San Francisco’s top developers are lining up for the chance to turn what was once one of California’s dirtiest energy generators into one of the city’s most promising development sites.
Genon Energy Services LLC, formerly Mirant Corp., has issued a request for qualifications to at least 50 national and local developers that might be interested in acquiring the now-defunct Potrero power plant — a 22-acre central waterfront site that brings with it huge potential as well as environmental headaches.
The site could be redeveloped for offices, institutional use or biotech space.
While a current deed restriction prohibits housing or a hotel, Genon has made it clear that the restriction could be lifted, according to developers who have toured the site.
To assist with the process, Genon has hired two real estate consulting firms: Sedway Consulting of San Francisco and Economic & Planning Systems of Berkeley, according to Genon spokesman Tony Cordero. The Potrero Generating Station was permanently retired from operation in January of 2011. “Genon decided to try to sell the property since our core business is generating power, not managing vacant real estate,” stated Cordero.
Developers that have received the RFQ from Genon include Hines, Forest City, Orton Development, Mission Bay Development Group, Shorenstein Properties, TMG Partners, Strada Investment Group, Lennar, Build Inc., Emerald Fund and Alexandria Real Estate Equities. Responses to the RFQ are due Sept. 14 and Genon plans to pick a developer by January 2013.
The property occupies the original site of Potrero Point, immediately south of Pier 70 and a mile south of AT&T Park.
District 10 Supervisor Malia Cohen said that she was “thrilled about the possibility of this property being reused.”
“It has great potential to be transformed from an environmental scar on the neighborhood into a community-serving asset. I am hopeful that there will be interest in this property and that we can work together with the neighbors who fought for years to close the plant to design and implement its successful reuse,” said Cohen.
A representative from the San Francisco Bay Regional Water Quality Board said the cleanup of the property would be broken up into seven areas. The first phase is the northeast parcel closest to Pier 70. The cleanup plan for that part of the job has been issued and is undergoing public comment.
“We can make (housing) work. It’s not much different than Mission Bay or Pier 70. It’s going to be high density, not going to be people growing fruit trees — fruit wouldn’t grow there anyway,” said the water quality board representative, who asked not to be named because he is not authorized to speak to the press.
Potrero Hill Boosters President Tony Kelly said the neighborhood is receptive to the site being redeveloped as office or biotech space. Unlike Pier 70, which the Port of San Francisco owns, the power plant has been in private hands for more than 100 years and is not under jurisdiction of the State Lands Commission. “Any day that it continues to not be a power plant is a good day,” said Kelly.
He said he would rather see dense office or research/development construction at the power plant than at Pier 70. “If you are looking to extend Mission Bay, go ahead and do it there rather than Pier 70,” said Kelly.
In 2010, the city won a decade-long fight to close the Potrero plant. Prior to its subsequent closure, it was one of the oldest fossil-fuel-burning plants operating in California and among the filthiest. The plant dumped heated water into the bay and its smokestacks belched particulate matter and greenhouse gases into an already disproportionately polluted southeast part of San Francisco.
Calls for the facility to be shut down began in the 1990s after it was purchased from Pacific Gas and Electric Co. by Southern Co. (now Genon).
Emerald Fund President Oz Erickson said his company had received the package on the opportunity but would be taking a pass on it. “We have our hands full right now,” said Erickson. “That is a major, major project — probably 10 years worth of work. It’s a great site and I hope whoever gets it succeeds.”
Build Inc. Principal Lou Vasquez said his group has been looking at the site for seven years and hoping it would become available. He said he envisions a mixed-use neighborhood with housing, waterfront parks, cultural facilities and commercial uses.
“It’s an opportunity for a 21st century, self-contained neighborhood,” said Vasquez. “All the infrastructure has to be built from scratch, so you have the opportunity to use state-of-the-art planning and technology to create the kind of urban place you want to be. In a lot of ways it’s an easier play than Pier 70 because there is no (Port of San Francisco) involvement and no California State Lands Commission.”
Genon estimates that half the property is likely to be used for buildings and the remained used for open space, streets, plazas and a buffer from the existing PG&E switchyard to the west.
One developer said the potential development is complicated by the fact that PG&E controls the cleanup and there is no legal way to enforce a deadline on the utility for completing the work.