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S.F. neighborhood was supposed to become an extension of downtown. Instead, it’s in a ‘deep freeze’
By Laura Waxmann, J.K. Dineen
July 15, 2024

The area’s decline is likely to accelerate late this summer when one of Central SoMa’s last remaining active hubs, the San Francisco Flower Mart, relocates to the foot of Potrero Hill. Spread across warehouses at 640 Brannan St. for 68 years, the Flower Mart buzzes with life early in the morning as trucks pull up with Ecuadorian roses or dahlias from Figone’s nursery in Half Moon Bay.

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The flower market’s move caps a long saga about the future of the historic institution and how it would fit into the new Central SoMa. As city planners worked on rezoning the neighborhood, real estate investment trust Kilroy Realty bought the land for roughly $70 million and pitched plans to redevelop it into what would become the pillar of the Central SoMa plan: a more than 2 million square foot office campus, spread across three new buildings ranging between eight and 18 stories in height.

The deal — which includes spaces set aside for artisan and small-scale manufacturers — was the culmination of years of negotiations with the city, flower vendors and historic preservationists who fought to save the flower mart. Meanwhile, for Kilroy, the price tag kept going up: the developer agreed to pay $166 million in community fees, including $54 million for affordable housing, committed to building a new home for the Flower Mart and to help fund its operations post-relocation. In 2019, Kilroy paid another $99 million for a 1-acre industrial site at the base of Potrero Hill to make good on the latter promise.

In total, Kilroy has spent a total of $579 million on assembling the sites at Central SoMa and Potrero Hill, and delivering a new facility for the vendors — without putting a shovel in the dirt in Central SoMa.

Meanwhile, Kilroy is trying to figure out what to do with the property once the flower mart leaves. The group has brought in brokers to assess its value, but does not plan on selling it, according to Kilroy vice president of development Mike Grisso.

Grisso did confirm that Kilroy is “actively looking for tenants” to lease out the Brannan Street warehouses on a “temporary basis” once the Flower Mart relocates this year. He added that the developer remains “enthusiastic” about the Flower Mart site’s long-term prospects.

https://www.sfchronicle.com/sf/artic...n-19522607.php