SFMTA Board enters predevelopment agreement for Potrero Yard Modernization Project

The San Francisco Municipal Transportation Agency (SFMTA) Board of Directors approved a predevelopment agreement (PDA) for the Potrero Yard Modernization Project with Potrero Neighborhood Collective, LLC (PNC) that will serve as the project’s lead developer.

The Potrero Yard Modernization Project will replace SFMTA’s 107-year-old Potrero Bus Yard with a modern, three-story bus storage and maintenance transit facility with approximately 575 affordable rental units atop the facility for those with low or moderate incomes. The joint development of a bus facility with housing over it is a first in the United States.

“Transit and housing should go together, whether that’s building dense housing on transit lines or recognizing opportunities like this to not only modernize a bus facility, but also how we think about building more housing while we do,” said Mayor of San Francisco London Breed. “San Francisco is a dense city, and we have to be deliberate in how we approach solutions to our housing shortage.”

Affordable housing options

Approximately half of the units are planned for low-income seniors, families and single-occupant households. The “low-income” designation is based on earning levels of 80 percent or below of the Area Media Income (AMI). The remaining units will be available to “moderate-income” households earning between 80 percent and 120 percent of the AMI. SFMTA reports many of its staff, including bus operators and maintenance staff, fall within this moderate-income bracket.

SFMTA explains the ambitious affordability goals for the housing component are reliant on competitive non-city sources. Should the project not secure these sources on a schedule that can accommodate the construction of the bus yard facility, the housing program may need to be amended.

“This is an exciting milestone for a project that not only brings urgently needed improvements to our aging transportation infrastructure, but also shows how we can work outside the box to create desperately needed housing,” said District 9 Supervisor Hilary Ronen. “Affordable housing is critically needed in San Francisco, and I'm thrilled this project seeks to place a significant number of affordable units in District 9."

Replacing the bus facility

Overhauling the obsolete Potrero Yard is the first facility to be prioritized under SFMTA’s Building Progress Program, which launched in 2017 in an effort to repair, renovate and modernize the agency’s aging facilities.

Potrero Yard houses bus routes that service neighborhoods across the city, including many communities that are heavily reliant on transit. Additionally, the yard does not meet seismic safety standards and cannot support modern maintenance and cleaning. A modern facility will allow staff to repair buses faster and improve the agency’s reliability while leveraging an opportunity to maximize environmental upgrades. The new facility would support SFMTA’s transition to a battery-electric bus fleet while also increasing capacity to service a fleet of 213 buses, which is an increase of more than 50 percent.

"The Potrero Yard Modernization Project is an example of SFMTA's national leadership in delivering sustainable transit,” said Jeffrey Tumlin, director of transportation of SFMTA. “I am extremely proud of the creative work done by SFMTA and city staff, who envisioned a unique use of public resources to address affordable housing needs as we improve Muni’s infrastructure.”

Next steps

The PNC team is led by Plenary Americas US Holdings Inc., PNC’s sole equity member, which also includes veteran San Francisco affordable housing and housing developers Mission Economic Development Agency, Young Community Developers, Tabernacle Community Development Corporation (TCDC) and Presidio Development Partners.

IBI Group and Y.A. studio will serve as design consultants, Plant Construction Company and The Allen Group will provide preconstruction services from the general contracting, and construction management perspective and WT Partnership will consult on infrastructure facility management.

This next phase of the project will enable will take on due diligence, risk analysis, housing feasibility and early contractor procurement. Once the project and housing agreements with all final terms are completed and approved following the PDA phase, it is expected the Plenary-led team will build, operate and maintain various components of the project.