Looking to invest in Qualified Opportunity Zones? These resources may help

As investors across the nation seek to deploy billions of dollars in capital gains into Qualified Opportunity Zones, they are actively seeking guidance about the program and on the hunt for resources to help identify neighborhoods, assets and available land within opportunity zones most ripe for investment. 

The program, created through the passing of the Tax Cuts and Jobs Act last year, aims to incentivize private investment in underserved and otherwise blighted communities across the U.S. in exchange for a hefty tax break.

More than 8,700 census tracts have been classified as opportunity zones and numerous opportunity zones funds have already launched to take advantage of the program — with an estimated $6 trillion in unrealized capital gains eligible to be deployed into opportunity zones, according to a study conducted by Real Capital Analytics.

In response to high demand from firms and high net worth individuals interested in the opportunity zones program, a number of tools have come to market to help potential investors understand how the program works, identify neighborhoods that qualify for it and locate assets within the designated areas in need of investment.

“Opportunity zones have brought national attention to areas of the country that have been too often looked over for investment. Unlike traditional community development institutions, knowledge and understanding about these communities is quite limited,” Smart Growth Americas Vice President of Land Use and Development Christopher Coes told Bisnow. Coes is also director of national real estate developer and investor network LOCUS.

“The structure of the opportunity zones tax incentive places the onus on the investor to identify and conduct due diligence … which requires an understanding of not only the project but also the place. Because of this demand, we’re seeing a lot of tools [come to market] to help assist investors and policymakers.”

Read more on Bisnow

 

 

What Google’s San Jose project means for downtown

For years, much of the area around Diridon Station has been a neglected jumble of grimy auto body shops, vacant lots overgrown with weeds and shabby warehouses.

Google — whose plans face a critical City Council vote Tuesday — is expected to transform some 50 acres into a mix of offices, shops and restaurants connected by pathways that wind through parks and plazas filled with public art. Steps away, Diridon is set to undergo its own renovation and become the only place in the Bay Area where BART, Caltrain, Amtrak and high-speed rail converge.

It’s a tall order. But if the tech giant succeeds, the project could transform a downtown that has struggled to rebound from sprawling development in the 1950s and 1960s, when city manager Dutch Hamann rapidly annexed land at the city’s fringes while neglecting its urban core. When it’s complete, the area could support more than 25,000 workers, a 65 percent increase in the number employed in the core of the city today.

For longtime restaurateur and downtown business owner Steve Borkenhagen, Google’s foray into San Jose might finally spark the kind of urban rejuvenation he’s dreamed of for decades. For Kathy Sutherland, a nearly 40-year resident of the Delmas Park neighborhood in the shadow of the proposed development, the project brings both the long-sought possibility of a vibrant neighborhood and the fear of displacement. And for the urban studies theorist Richard Florida, the project is less personal but no less important — a chance for a major American city to finally get redevelopment right, to provide an antidote to the debacle of the Amazon HQ2 rollout.

It will be years before any such dreams or fears are fully realized, but the sale of more than $100 million dollars of city land — expected to be finalized at the Tuesday council meeting — sets the stage for planning and development to begin in earnest after months of closed-door talks and speculation about the biggest thing to happen in San Jose in generations.

 

 

Read more on the East Bay Times

 

 

A sample of SF waterfront redevelopment concepts

The Port of San Francisco’s “request for interest” for 14 waterfront structures within the Embarcadero Historic District is an outgrowth of a larger effort to update the port’s Waterfront Land Use Plan.

That effort began in 2015 and should move to environmental studies next year. The goal for the requests is to try and begin making plans to revive specific piers, so work could begin soon after an update is approved.

Respondents include restaurateurs seeking space, cultural entrepreneurs, and developers or design firms eager to take part in future projects. The full set of 52 responses can be found at www.sfport.com, but here are six examples that show the range of ideas.

 

Read more on the San Francisco Chronicle

 

 

New effort to push more housing near transit stations by setting state rules

A state bill to allow dense housing near transit stops, alleviating long commutes and coaxing people out of cars, never made it out of committee last session. But backers think the mood has shifted enough in the housing debate to try again.

“I think the political climate is changing,” said state Sen. Scott Wiener, D-San Francisco. He’s the lead sponsor of the More HOMES Act — HOMES stands for Housing, Opportunity, Mobility, Equity and Stability.

“In talking to my colleagues, there’s more support than there was earlier,” Wiener said.

The new iteration, SB50, prevents cities from restricting density within a half mile of a major job center or transit hub, such as a BART or Caltrain station. It raises height limits to 45 feet, about four stories, within a half-mile of the station, and 55 feet or five stories within a quarter mile. It also eliminates minimum parking requirements for new developments, a move that the Board of Supervisors is contemplating for San Francisco.

Those provisions are less dramatic than what Wiener proposed in SB827, his first attempt at statewide zoning reform. It would have barred cities from rejecting four- to eight-story apartment or condo buildings near transit nodes.

Wiener’s first measure laid bare an ideological divide in a state struggling with soaring rents, jammed freeways and a paucity of housing. The crisis has pushed people farther from jobs, forcing them into wildfire zones or soul-grinding commutes, Wiener said. But it has also ignited fears that new development will push out existing residents — or drastically change the landscape. And many opponents bristle at the idea of Sacramento interfering with local governments’ ability to shape their own neighborhoods.

“The issue seems to be that Scott Wiener and his bills are so often looking to undermine local control,” said Susan Kirsch, founder of Livable California, a San Francisco organization that advocates for local urban planning and moderate growth. It opposed SB827.

Political leaders in San Francisco and Berkeley fumed at the building heights in SB827, saying it would allow luxury high-rises to sprout up, unchecked, in quaint residential neighborhoods. San Francisco’s Board of Supervisors passed a resolution against the bill after an emotional hearing in which residents compared it to a “hydrogen bomb” and an “undemocratic power grab.” Some detractors worried that their neighborhoods would be remade to look like Manhattan or Miami Beach.

To other critics, the original bill felt like an unfinished draft. It didn’t do enough to protect tenants from displacement or require affordable housing.

“It felt like it was a big proposal, it was a bold proposal, and there were a lot of details that had not been sufficiently worked out,” said Anya Lawler, a policy advocate for the Western Center on Law and Poverty. The center opposed SB827 but has not taken a position on the new bill.

Yet in the last few months, the tenor of the debate has changed. London Breed was elected mayor of San Francisco on an ardent pro-housing platform — she’s among the politicians tentatively supporting Wiener’s revised legislation. In September, the Legislature passed a law empowering BART to fill station parking lots with homes. And Wiener is seeking an ally in Gov.-elect Gavin Newsom, who emphasized the link between housing and transportation in a post-election speech.

 

 

Read more on SFGate

 

 

 

Google is gearing up to buy prime San Jose land for a new tech campus. What now?

As the city of San Jose gets ready to release long-anticipated documents related to the sale of 20 acres of land near downtown, the question on the minds of both boosters of the Google expansion and skeptics is “what now?”

The city of San Jose is on the verge of releasing details of a controversial 17-month negotiation to sell 20 acres of publicly owned land to tech giant Google for a massive new campus near downtown.

Those details, set to be released Friday, are a key milestone, but only the first step of making the Bay Area’s largest city one of the next expansion points for Alphabete Inc.-owned Google, a plan that has been met by community members with both excitement, deep disdain, and as of this week, a lawsuit over transparency.

Now, as the release date of the long-anticipated land sale documents near, the question on the minds of both boosters of the Google expansion and skeptics is “what now?”

First, the end goal: Google has said it wants to build a mixed-use campus that could span as large as 8 million square feet and would include housing, retail, and office space next to transit. Somewhere between 15,000 and 20,000 workers could show up each day at the campus if built out fully.

 

 

Read more on Silicon Valley Business Journal

 

 

 

Is Richmond the new Oakland? New ferry terminal attracts SF homebuyers, stokes gentrification fears

During his 16 years selling homes in Richmond, realtor Mark Lederer has always seen buyers from San Francisco looking in the East Bay city.

But he says those numbers have gone up recently, thanks to both skyrocketing prices in SF and the soon-to-open Richmond-SF ferry service. In fact, he estimates that 30 to 40 percent of buyers in Point Richmond and Marina Bay, the two areas closest to the ferry, are moving from San Francisco.

“Most SF buyers see tremendous value in the different neighborhoods in Richmond,” he says. “This is because the price per square foot is less than half that of homes in San Francisco’s most desirable districts.”

He says high-end condos in Point Richmond have been going for up to $950,000, with prices starting as low as $500,000. In Marina Bay, the price point is a bit lower, with condos and townhomes starting at $300,000 and going up to the mid-$700,000 range.

Those looking for a single-family home are attracted to North and East Richmond, which is a five-minute drive or 15-minute bike ride to the new ferry terminal. “This neighborhood is full of 1920s homes that mimic those found in El Cerrito, Albany and Berkeley,” he says. “Prices range from $325,000 to $731,000 for a home. This area has seen tremendous growth over the last couple of years and a spike once the ferry terminal was announced.”

San Franciscans are certainly attracted to the prices in Richmond, but they also have their concerns, including what Lederer calls Richmond’s “tough crime-ridden image.” But he says this perception doesn’t do justice to all that Richmond has to offer. “The roughest parts of Richmond are an isolated area that is very small as compared to the entirety of Richmond,” he says. “Most of Richmond is full of beautiful housing, water access, beaches, trail and hillside access, great restaurants, fun pubs and great entertainment.”

Richmond realtor Cherie Carson compares Richmond to another East Bay city that has gotten a lot of attention from San Francisco buyers in recent years: Oakland. “Richmond is like Oakland in that there are many different neighborhoods to choose from,” she says.

Just like in Oakland, there are fears of gentrification from this new onslaught of buyers potentially driving up home values and rents. Richmond Vice Mayor Melvin Willis told the Chronicle that he’s concerned long-time residents could be priced out—not just in the tony neighborhoods closest to the ferry, but throughout the city. “If rents go up in certain areas around the ferry, that would cause rents to go up in other parts of Richmond,” Willis said.

 

 

 

Read more on SFGate

 

 

 

How will S.F.’s tallest buildings fare in the next big earthquake? Report expresses concerns

San Francisco’s tall buildings may be at risk of damage during the next big earthquake, a study released by research nonprofit Applied Technology Council (ATC) last week warns.

The 36-page report outlines vulnerability concerns over outdated building standards and provides a strategy for proactive safety checks.

The study’s release comes just days after cracks were found in two steel beams of San Francisco’s newly minted $2.2 billion Transbay Transit Center, and as Millennium Tower next door continues to sink and tilt. Last year, the late Mayor Ed Lee commissioned the report, which was prepared by a group of engineers.

The report probed the city’s 156 tallest buildings — either constructed or permitted for construction — that are at least 240 feet high, primarily located in San Francisco’s Financial District. About 60 percent of these buildings house business and office space, while the rest are zoned residential.

 

Read more on San Francisco Business Times

 

 

2nd crack at SF Transbay Transit Center — to stay closed through next week

San Francisco’s new Transbay Transit Center will remain closed at least through the end of next week, officials said Wednesday, after yet another cracked beam was discovered during an overnight safety inspection.

The $2.2 billion hub for buses and eventually trains, which opened just last month as the flashy centerpiece of city infrastructure, was closed abruptly Tuesday afternoon after a fissure was spotted in a beam that helps hold up the sprawling complex.

The initial tear runs about 2½ feet long and 4 inches deep through the bottom of a 60-foot-long beam that supports both the center’s celebrated rooftop park above and a bus deck below, officials said. The beam is located over Fremont Street, between Mission and Howard streets. The second crack is in a parallel steel beam that also crosses Fremont Street. It was described as slightly smaller.

Representatives of the Transbay Joint Powers Authority, which built and operates the transit center, said Wednesday they didn’t know the causes of the cracks, but they remained concerned about the potential for the beams to fail. Fremont Street, which passes under the center, also is scheduled to stay closed through Oct. 5.

“We will not open the transit center or Fremont Street until we are certain the issue is 100 percent rectified,” said Mark Zabaneh, executive director of the TJPA.

 

Read more on San Francisco Chronicle

 

 

Business fees to fund housing will be studied in San Jose

The concern, even for some council members who voted for the study, is that despite its housing shortage, San Jose still has many more residents than jobs, which is the opposite of the situation in many surrounding cities.

The imposition of commercial linkage fees to fund below market-rate housing is still alive in San Jose after Tuesday’s 9-2 City Council vote to add a discussion of them to next week’s agenda.

The vote came on an item of how the city should respond to a Santa Clara civil jury report issued in June that included among its findings that the fees are overdue and would increase housing.

Five council members, including Mayor Sam Liccardo, wrote memos changing the staff-authored response of disagreement with the finding to say the city would consider a study to confirm the causal relationship between job creation and an increased need for housing and a second study of the feasibility of enacting fees.

 

 

Read more on Silicon Valley Business Journal

 

 

 

BART picks developers for huge housing and office development at Lake Merritt in Oakland

Bay Area Regional Transit officials selected a development team to revamp three city blocks above the Lake Merritt BART Station in Oakland.

The agency picked Strada Investment Group and the East Bay Asian Local Development Corp. to develop 1.4 acres into two high-rise towers with 519 homes and 517,000 square feet of commercial space.

EBALDC is one of Oakland’s top nonprofit housing developers with 27 communities in the city. San Francisco-based Strada has owned multiple office buildings in downtown Oakland and has developed multiple projects in various Bay Area cities.

The winning team beat out proposals from global real estate investor Hines, Menlo Park-based Lane Partners and a partnership of Oakland-based McGrath Properties Inc. and Canadian investor Brookfield Residential. Lane Partners came in second, according to a BART staff report.

The BART board will formally vote to select the Strada/EBALDC Team at its meeting Thursday and start a two-year exclusive negotiating agreement to finalize the project. if the two sides fail to negotiate a project in that time frame, BART could then give Lane Partners a shot without having to do another selection process.

BART has wanted to develop its land above the Lake Merritt Station for years. The goal is to boost BART ridership and attract more residents, businesses, and pedestrians to a relatively quiet stretch of Oakland nestled between the city’s core downtown and the lake.

 

Read more on San Francisco Business Times