$110 million windfall for San Francisco improvements

Caylie See and Adrian Druzgalski stroll through South Park, which is slated for a $3 million makeover. Caylie See and Adrian Druzgalski stroll through South Park, which is slated for a $3 million makeover. Photo: Michael Macor, The Chronicle Photo: Michael Macor, The Chronicle Image 1 of / 12 Caption Close $110 million windfall for San Francisco improvements 1 / 12 Back to Gallery

San Francisco's construction boom is pumping millions of dollars of development fees into the city, providing much-needed cash for street, transit, open-space and other improvements in the areas affected most by the growth.

A spending plan presented to the city Planning Commission on Thursday estimated that nearly $110 million in development impact fees will be paid to the city over the next five years. That's nearly $50 million more than the $63 million last year's report anticipated.

"We're looking at the development pipeline and estimating when construction is going to start," said Kearstin Dischinger, a city planner who helped put together the plan, which was developed with a number of other city agencies.

The report deals only with the impact fees paid in the parts of the city covered by area development plans, the growth and zoning guidelines developed by the communities and approved by the Board of Supervisors.

Among the areas covered are Rincon Hill; Visitacion Valley; the Market and Octavia area, which generally includes large swaths of land on both sides of Market Street from Van Ness Avenue to Noe Street; and the sprawling eastern neighborhoods, covering much of the eastern SoMa, the Mission, Showplace Square, Potrero Hill and the central waterfront.

That's where the building is going on. In the Market and Octavia area, for example, 20 projects totaling 1,400 units were either under construction or ready to go as of the middle of this year, while an additional 1,000 units are earlier in the development process.

In Rincon Hill, where the city wants to see dense, high-rise residential buildings, there are 700 completed units, 400 under construction and more than 1,200 ready to go.

The money paid by the developers goes directly to ease the local impacts of that new construction.

"You can't just build residential and office buildings without improving the infrastructure," said Supervisor Jane Kim, whose South of Market district includes Rincon Hill and part of the eastern neighborhoods.

Park on Rincon Hill

Nearly $3 million of the Rincon Hill fees, for example, will be used to build Guy Place Park on a small, city-owned lot on Guy Place Street at First Street. Other money will go to widen sidewalks, add bike lanes and make improvements on Harrison, Fremont and First streets to accommodate the flood of new residents in a neighborhood once home to warehouses and commercial buildings.

More housing means more people on the streets, walking, riding bikes, taking buses and driving cars. That's one reason the largest chunk of the impact fees are earmarked for transportation improvements.

"When it comes to streetscapes and pedestrian safety, the impact fees absolutely are accelerating our projects," said Supervisor Scott Wiener. "There's no doubt that many projects would not be out there today without the impact fees."

Fill gaps in funding

In the eastern neighborhoods and Market and Octavia areas, impact funds cover only about 30 percent of the planned infrastructure projects' costs. But by using that money to fill gaps in funding, provide matches for state and federal grants and combine with other outside money, the fee revenue can jump-start stalled projects.

South Park, a piece of SoMa greenery near Third and Bryant streets, is up for a $3 million makeover that will include a children's play area, an open meadow and spaces designed for picnicking. The new spending plan calls for using impact fees for the final $1.2 million needed for the project. Along Polk Street, the fees will provide the city's required match for a grant to put a contra-flow bike lane on the one-way street segment between Market and Grove streets, closing a gap in a major bike route.

While most of the money goes for transit and open space, about $1.3 million in impact fee revenue will be spent for completion of the Visitacion Valley library.

More is on the way

More impact money soon is going to be in the development pipeline, Dischinger added. The new report doesn't include impact fees from the huge Transbay Transit Center now under construction. Estimates of that revenue will be included in a separate report early next year.

While money from the impact fees will never cover all the costs growth and new construction bring to the city, it's an important start.

"We'd absolutely be in a much worse shape without the program," said Ken Rich, development director for the Mayor's Office of Economic and Workforce Development. "We're able to pay for a lot of things that otherwise wouldn't get done."