CMCBD News

Mid-Market 'caterpillar' transforms into 'butterfly'

San Francisco Business Times
06/27/2008 12:00am
Tony C. Yang

After years of languishing in the shadows of its poverty, crime and dilapidated buildings, Mid-Market is ready for a starring role in the spotlight.

The completion of two blockbuster projects, the SoMa Grand and the Federal Building, in the past two years, combined with the rise of the massive Trinity Plaza apartments, are catalysts prompting developers to take a chance on this stretch of Market Street from Fifth Street to Van Ness Avenue.

A string of projects is in the works, including a huge retail complex one block from the Westfield Centre, a smaller shopping and restaurant complex down the street, a 720-unit apartment tower on 10th Street and a 165-room hotel.

Mid-Market’s potential is huge. Not only is it a key site for high-density, transit-oriented housing along Muni and BART lines, but its proximity to Union Square and SoMa make it promising for tourist-serving hotels, restaurants and retail.

For years, Mid-Market boosters argued that a proposal to turn into a redevelopment area would unlock its potential by funding affordable housing, restoring historic buildings and nurturing arts and cultural groups. But that proposal was basically killed by the Board of Supervisors last year. Though supporters were disappointed that more than a decade of work went down the tubes, the creation in 2006 of the Central Market Community Benefit District has stepped in to fill the void by cleaning up streets and working with small businesses.


Residential visions

While the Federal Building added close to 1,500 people during the day when it opened in 2007, investors feel that a full-time residential neighborhood is essential to a Mid-Market revival.

The first major luxury residential project in the area, AGI Capital and TMG Partners’ 22-story SoMa Grand, opened in December off Mission and Eighth streets. Well over half of its 246 units (starting at $400,000) are filled, and the vacancies may not last long when a groundfloor restaurant operated by the Slanted Door’s Charles Phan opens in the fall.

Paul Zeger, president of the condo marketer PMA, said sales are solid at SoMa Grand. “The Mid-Market caterpillar has turned into a butterfly,” he said.

The next mega-housing project scheduled to finish will be Angelo Sangiacomo’s Trinity Plaza, a vast, 1,900-apartment complex under construction at Eighth and Market streets, which will profoundly change the demographics, land values and retail opportunities of the area when the paint dries. The estimated $175 million development broke ground on its first phase – 440 units – in November and will be finished in Spring 2010.

Sangiacomo told the Business Times in May that the project “is a chance to do something great for the city.”

Two blocks away, Crescent Heights’ $350 million, 720-unit tower at Tenth and Market streets is slated to break ground in the fall, though the Miami-based developer recently decided to build apartments rather than condos on the site. And Shorenstein Properties is studying possibilities for a residential complex at 1066 Market Street, bounded by Golden Gate Avenue and Jones Street.

Tom Hart, executive vice president with Shorenstein, said the building could be condors or rentals. “We believe in the future of that area,” he added.

That optimism is echoed by others, said Carolyn Diamond, executive director of the Market Street Association, who fielded more calls than ever in the past six months from residential developers interested in the area.

“I think a lot of it has changed from commercial to housing,” she said.

In fact, residential activity has driven up prices in the area, which have more than doubled since 2005: a property across from the SoMa Grand that once sold for $100 per square foot is now being offered for $300 per square foot.


Retail on tap

While housing developers keep tabs on SoMa Grand, retail developers have only to look at the wildly popular Westfield San Francisco Center at 5th and Market streets to feel confident. Riding on the success of the Westfield expansion, Urban Realty wants to add a five-story, 250,000-square-foot retail project on 935-965 Market St., creating about 760 new retail jobs when a planned discount retail tenant moves in. If approved, construction will begin in mid-2009.

“It will be the kind of place where people can get a bargain on anything from electronic equipment to bath towels,” said David Rhoades, principal at Urban Realty.

Not to be outdone, David Addington, principal at Fair Market Properties, plans to build a “world-class” retail and restaurant project on the corner of Sixth and Market streets down the street from urban Realty’s proposed project. His goal is to lure Westfield shoppers west to a glitzy two-story, 6,000-square-foot outdoor dining mezzanine that he is now seeking approvals for. Another major project with a retail component is Market Square between Ninth and Tenth streets, which may be converted into 1 million square feet of mixed-use office and retail space as early as next year, said general manager Roseann Carini. A proposed 300,000-square-foot addition at 875 Stevenson St. calls for more retail and offices.


Tourism, culture on upswing

An important component of the Mid-Market redevelopment plan was the presence of cultural and arts groups to help drive tourism.

Greg Holland, CEO of SHN, which owns the Orpheum, Curran and Golden Gate theaters, said the downtown space has shifted favorably towards entertainment and cultural activities. When the Orpheum Theatre was renovated a decade ago for $20 million, the street was awash in crime. Now shows like “Hairspray” and “The Drowsy Chaperone” grace the stage at Eighth and Market streets.

Another stop for cultural activities is Mint Plaza, which opened last year, and starting this summer will feature a free Friday concert series.

Hotels in the area are also investing to lure more visitors. After finishing upgrades in July, Hotel Britton, on the corner of 7th and Mission streets, will become the Good Hotel featuring an onsite Good Restaurant. Michael Stanton, of Stanton Architecture, is bullish about a planned 13-story, 165-room tourist hotel at 942 Mission St. awaiting planning commission approval.

Despite all the progress, crime and vagrancy persist in the area. Yet change is clear to George Williams, former San Francisco assistant director for planning, who recalls a Mid-Market filled with drug dealers and shady storefronts.

“Recently I walked from around Sixth street to the Financial District,” Williams said. “The sidewalks in the Mid-Market are clean.”

The tidier streets are thanks to the Central Market Community Benefit District, which is tackling urban blight.

Daniel Hurtado, executive director of the CBD, said since February the non-profit has directed the sweeping and power washing of the sidewalks and has hired two “community guides” armed with radios to patrol the area.

Rhoades of Urban Realty said the work of the CBD is crucial to turning around the area, showing that “as a community, we are slowly building a momentum to transform our city’s main thoroughfare into a truly great street.”