As the port turns

Another private development proposal sinks. Piers are falling into the water. Is the Port of SF broken?

Another setback to the Port of San Francisco's plan to allow development of Piers 27–31 has brought about a new round of soul-searching at the beleaguered agency, as well as calls to change what may be allowed along the waterfront.

Last month the port's latest private development partner, Shorenstein Properties, withdrew its plan for a mixed-use facility that relied on large amounts of office space to recoup the cost of renovating the dilapidated piers. The State Lands Commission, which watchdogs new waterfront construction for adequate maritime and public recreation uses, signaled in November 2006 that it would not support the office-heavy design. The port's previous development partner, Mills Corp., pulled out last March after half a decade of public Sturm und Drang over its plan for a shoreside mall.

For years the Port Commission has looked to Piers 27–31 as a magic bullet for its financial woes. The port receives relatively little money from actual port operations, and as an enterprise fund department, it receives no subsidies from the city's General Fund. Moreover, when the state transferred jurisdiction to the agency by way of the 1968 Burton Act, it handed down a good deal of debt and deferred maintenance.

Estimates now put the cost of fixing the port's crumbling piers and properties at around $1.4 billion, with the vast majority of those costs not yet funded. With construction costs rising between 8 and 10 percent every year, port and city officials are starting to realize that even if Shorenstein's plan eventually makes it through the gauntlet of government agencies and public oversight, the one-time infusion of cash it would provide would not be enough.

"It is a pretty dire situation," the port's executive director, Monique Moyer, said at a Feb. 13 commission meeting. "And we do need all hands on deck" to try to solve the problem.

Board of Supervisors president Aaron Peskin, whose district includes Piers 27–31, has answered Moyer's call. In the last several weeks, he has floated two new ideas that could have a wide-ranging impact on the 7 1/2 miles of shoreline under port control. As reported in the San Francisco Business Times, Peskin told a Hotel Council luncheon on Jan. 17 that he and Moyer have been discussing hotel development on the city's piers, something Proposition H, passed by voters in 1990, currently prohibits.

Peskin told the Guardian his hotel concept is in the very early stages and stems from the fact that the State Lands Commission considers hotels to be allowable uses of waterfront property. He stressed that the proposal, which would require a new ballot initiative, is "not by any means a wholesale abandonment of Prop. H." It would instead seek to designate certain piers for hotels after consulting with neighborhood groups and other stakeholders.

"The question is are we willing to have a couple [or] three of them in the right places? That's it," Peskin said, voicing his opinion that the "right places" would probably fit somewhere between South Beach and Pier 27. "Fisherman's Wharf does not need any new hotels."

Peskin's second idea involves replacing much of Shorenstein's proposed office space at Pier 27 with a year-round cruise ship terminal. For years the port had a public-private partnership similar to the one with Shorenstein to build a new terminal at Piers 30 and 32. But its development partner, the Australian firm Lend Lease Corp., backed out of the deal last year. Shorenstein officials did not answer numerous requests for comment, but Peskin told us the company has expressed some interest to him in going forward with a cruise terminal design.

Not surprisingly, hotel industry representatives enthusiastically backed Peskin's plan to revisit Prop. H. Hotel consultant Rick Swig highlighted the benefits of letting hotel developers rehab the waterfront.

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