Exclusive: Potential buyer asked about major change at Oceanwide Center
https://www.bizjournals.com/sanfrancisco...hange.html?iana=hpmvp_sfbt_news_headline
"Days before it pulled out of a deal to purchase Oceanwide Center in March, the prospective buyer asked city planners about the feasibility of nixing the hotel slated for the troubled San Francisco project.
SPF Group, which pulled the plug on its $1 billion purchase of the mixed-use site under construction at First and Mission streets in March, asked Planning Department staff if it would be allowed to build an unspecified number of housing units in place of the hotel, internal emails obtained through a public record request show.
The Chinese developer selling the project, Oceanwide Holdings, halted construction on the 605-foot hotel tower in October, citing local market conditions and economic uncertainties. As of now, the hotel remains part of the plan for the second tower, which will front Mission Street and and is approved to also include 156 residential units. The hotel is slated to be a Waldorf Astoria.
Daniel Frattin, managing partner with Reuben Junius & Rose, who represents Oceanwide, sent the inquiry to several planning staffers on March 22 and a call was held the week of March 23 to discuss the parameters of the changes.
Exact details of what SPF wanted are not known, as they are not disclosed within the body of the emails obtained via the records request. But planners seemed receptive.
Marcelle Beaudroux, a principal planner assigned to the project, forwarded the request to Director of Environmental Planning Lisa Gibson in a March 25 email.
“There are some potential changes to the project regarding removal of a use (hotel) and increase in residential square footage/number of units, but otherwise no massing or site design shifts have been identified,” Beaudroux wrote.
Beaudroux said SPF's proposed changes would have required additional project approvals, and Rich Hillis, the city's new planning director, indicated they would likely receive the green light.
“All seems do-able,” wrote Hillis.
SPF also inquired about reducing the 109 condos approved as part of the taller office-residential tower fronting First Street. SPF wanted to add more office space — a proposal that would be more difficult to execute due to the city’s restrictions on office space allocations as a result of Propositions M and E. Construction continues on that tower, which will rise 910 feet and be the second-tallest in the city. It is slated to have 1.2 million square feet of office space.
SPF had canceled its deal to buy the project by March 31. The changes it discussed were never made, but the guidance from the Planning Department could apply to future decisions by any new owner, though the department did not write an official determination letter.
After SPF pulled out, Oceanwide announced it has a deal to sell the project to another Chinese buyer, Beijing-based Hony Capital, for $1.2 billion. The deal is scheduled to close by July 15.
Neither Oceanwide, SPF nor Hony responded to requests for comment. The Reuben law firm referred questions to Oceanwide.
Hilton Worldwide, which owns the Waldorf Astoria brand, said April 29 that plans for the luxury hotel brand at the site remain current."
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