SF-owned office building at 30 Van Ness Ave. is on sale again

Supervisors turned down an earlier offer of $80 million for the 30 Van Ness Ave. building (center right). Supervisors turned down an earlier offer of $80 million for the 30 Van Ness Ave. building (center right). Photo: Santiago Mejia, Special To The Chronicle Buy photo Photo: Santiago Mejia, Special To The Chronicle Image 1 of / 1 Caption Close SF-owned office building at 30 Van Ness Ave. is on sale again 1 / 1 Back to Gallery

It’s Take 2 at 30 Van Ness.

Nine months after the Board of Supervisors rejected a deal to sell its office building at 30 Van Ness Ave. for $80 million, the city on Wednesday again went to market with the parcel, a site that could accommodate a 550-foot office or residential tower.

The property will be listed without a price. Listing broker Kyle Kovac of Newmark Cornish & Carey said that the demand for high-rise building sites remains strong in the Mid-Market and Civic Center neighborhoods.

“You are talking about one of the most substantial development opportunities on the West Coast,” Kovac said. “The intersection of Market and Van Ness is still highly desirable.”

The offering comes at a time when City Hall is embroiled in a debate over how much affordable housing market-rate developers are able to build while still making enough profit to attract the lenders that make building possible. At 30 Van Ness, the previous would-be buyer, Related California, had agreed to make 15 percent of the apartments below market rate and then raise that figure to 20 percent through tax-exempt bond financing.

But at the time Supervisor Aaron Peskin said “the city can and should negotiate a better deal.” And Supervisor Jane Kim argued that the developer should be forced to make 33 percent of the project affordable, to adhere to a nonbinding ballot initiative voters passed last November on surplus public land.

Gabriel Metcalf, executive director of the urban think tank SPUR, said the reoffering of 30 Van Ness “will be an interesting test of the progressives’ negotiating abilities.”

“They scuttled the last deal because they thought they could get a better deal for the city,” he said. “Now we will find out if they were right.”

Department of Real Estate Director John Updike said developers now are being asked to assume the site will require at least 25 percent affordable housing.

The 30 Van Ness site is one of three city-owned properties San Francisco officials are hoping to sell to raise money for a new city office building on the northeast corner of Mission Street and South Van Ness Avenue. The others — 1660 and 1680 Mission St. — represent 120,000 square feet of office space in the Civic Center area, which is home to Uber, Square, Twitter, Yammer and Dolby Labs.

The sales of the buildings on Mission Street could generate $60 million or more.

All three buildings are currently occupied by city departments, and whoever buys them would have to agree to lease them back to the city until the new building is constructed.

John Jensen of Colliers International, the broker marketing the Mission Street properties, said there are still several large tech tenants looking for space in the Mid-Market.

“We are seeing large deals in the works all over that district, large users that bodes well for the project,” Jensen said.

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jkdineen@sfchronicle.com Twitter: @SFjkdineen