South San Francisco leaders approve changes to 1051 Mission Road housing project

But since the project was approved back in 2019, it still hasn’t broken ground, and the city hopes that an amended agreement could allow the developer to do so in the next year and a half. Some of the delay was due to preparation work on the site itself, however, other financing challenges — including a lack of grant funding and difficult lending conditions — have caused further delays. BRIDGE Housing, the original developer for the affordable housing portion of the project, withdrew its participation after failing to secure the state’s competitive Affordable Housing and Sustainable Communities grant three times.

That means the current market-rate developer, L37, will need to secure another affordable housing partner.

“One of the reasons why I’m confident is because I think we will have a better team,” L37 Managing Partner Eric Tao said during the meeting, noting that BRIDGE decided to pivot away from projects such as 1051 Mission Road, as well as others throughout the region.

“North Berkeley, El Cerrito and others … are experiencing the same of what we are experiencing here, which is BRIDGE’s decision to not put as much resources as it probably needs or has in the past, including participating in AHSC applications,” he said.

Among other provisions, the changes approved by the City Council would amend the agreement to allow the city to redirect up to $14.6 million in impact fees toward the affordable housing portion of the development, if needed — which would otherwise go toward different city projects — waives about $3.7 million in impact fees and authorizes a fourth AHSC grant application. It also extends the development agreement deadline to the end of 2032, originally set to expire at the end of 2029.

The new provisions are intended to spur movement on the long-awaited development.

“With these changes, there is a better chance this project will advance to construction in the next 12 months,” Nell Selander, Economic and Community Development director, said during the meeting. “It is market dependent, and there are risks there, but staff believe these proposed amendments are bringing the project to a place where it is much more feasible to move forward.”

But not all councilmembers were eager to approve the new plan. Vice Mayor Mark Nagales said he was frustrated over the project’s frequent changes.

“We hear a lot of ‘ifs,’” he said during the meeting. “We’ve been waiting eight years for this project.”

Mayor Mark Addiego said he was also disappointed in the developer, not just for the shifting plans but also that the city will get the short end of the stick, especially since it could lose out on critical impact fee revenue if external grant funding doesn’t come through.

“I’m finding it very difficult to … hang my hat on your words and your ifs and your assurances,” Addiego said to Tao during the meeting.

The City Council voted 3-1 to move forward with the updated agreement, with Addiego voting no and Councilmember Eddie Flores absent.