Proposition D - Pier 70 Financing and Planning

Voter Guide
This measure appeared on the November 2008 San Francisco ballot.


What it does

Under current laws, the Port of San Francisco can finance improvements to its properties with Port revenues, property tax growth, grants, federal historic tax credits, and public-private development projects. Proposition D, a proposed amendment to the San Francisco City Charter, includes a planning process for the redevelopment of Pier 70 and provides an additional tool the Port can use for financing improvements.

The planning process for Pier 70 would begin with the Port creating a long-term financial and land use plan for the pier. Once the Board of Supervisors has approved the plan, the Port Commission would be responsible for putting it into action — but the plan still would be subject to other permits issued by the State Lands Commission, the Bay Conservation and Development Commission, and other agencies. For instance, any property leased from the Port under the plan would require the approval of only the Port Commission, plus a finding by the San Francisco Controller's Office in consultation with the Department of Real Estate that the lease is consistent with the board approved Pier 70 plan.

The second major component of the legislation is a financing tool that would permit the Port to capture the revenue from hotel and payroll taxes on Pier 70 and then to borrow against that revenue stream to pay for public improvements needed at the Pier. These improvements could include parks, environmental remediation, historic preservation and utility improvements. Currently, there are no businesses or hotels on Pier 70 and thus no revenue. Prop. D would become a tool once there are some tax paying businesses on the Pier. This revenue stream is a financing of last resort: In order for the Port to borrow against this revenue from new leases and property tax growth from development at Pier 70, the Board of Supervisors must first make a finding that this revenue itself is insufficient to finance the Pier 70 plan.

The Controller's Office would certify how much revenue the City collects through its payroll and hotel tax from the Pier 70 Waterfront District, and project annual increases in these revenues based on the development proposed by the Pier 70 plan. These projections would form the basis for a future revenue stream that could be used to pay off the debt. Then the City would appropriate monies from its General Fund to use as the basis for the Port to issue bonds for Pier 70. The money appropriated in this way could not exceed 75 percent of the projected growth in payroll and hotel taxes at Pier 70. The funding stream would be used for a maximum of 20 years — or fewer, if the Port has retired its debt or fully paid for the improvements. If the actual revenue from payroll and hotel taxes from Pier 70 is less than what was projected, there is no mechanism for the City to recapture that revenue.

Why it is on the ballot

Pier 70 is a 65-acre site in the city's central waterfront area, under the jurisdiction of the Port of San Francisco. For 150 years, the site has been used for shipbuilding and other heavy industrial activities such as the Bethlehem Steel Shipyard. Today, BAE Systems runs that site under lease from the Port. Pier 70 is one of the main sites identified along the waterfront for large-scale mixed-use development. The site is directly adjacent to a PG&E substation and the Potrero Hill power plant. It includes more than 40 historic buildings and structures eligible for listing on the National Register of Historic Places.

The Port has been engaged in a master-planning process with the following goals:

  • Establish an economically viable land-use plan that retains ship repair activity.
  • Expand open space and public access (the current concept has up to 20 acres of new open space).
  • Upgrade nationally significant unreinforced masonry buildings throughout the site.

Prop. D was proposed by the Port to assist them in the redevelopment of Pier 70.


Arguments in favor of Prop. D:

  • Pier 70 occupies 65 acres on an important location on the central waterfront. Past efforts to attract private investment to the site have failed. Prop. D would enable redevelopment and help reverse decades of disinvestment and decay.
  • Prop. D would expand the menu of financial tools available for the Port to create incentives for private investment in Pier 70. Recent experience indicates that without these tools, and the private investment they bring, Pier 70 will not be reused and developed.
  • The improvement of Pier 70 is critical to redevelopment of the waterfront, and would create economic and financial benefits to the area and to the City as a whole that would far exceed the cost of the public investment needed.
  • The measure would provide a clear and focused process for planning for the renovation of Pier 70.
  • The City cannot reasonably expect any growth in payroll or hotel taxes from Pier 70 without the tools provided by Proposition D. The past history of failed development efforts, combined with the significant historic preservation and environmental costs at Pier 70, suggest that public investment at Pier 70 is necessary.


Arguments against Prop. D:

  • The build-out of Pier 70 would create demands for new City services such as transit. These services are paid for primarily through the City's General Fund. Because Prop. D would divert new payroll tax and hotel tax revenues from Pier 70, this new money would no longer be available to pay for the increase in services.
  • The measure enables the Port to finance redevelopment with projected revenues, yet has no provision for the City to recapture revenue if Pier 70 redevelopment were less successful than projected. The funds appropriated to pay for Pier 70 improvements would not be readjusted based on actual tax revenues. As a result, the City could end up committing more money than it would earn.
  • If special incentives and processes are needed, we should establish a redevelopment district instead, as opposed to creating special rules and processes for one site.
  • Prop. D would divert revenues away from the General Fund that are needed for purposes other than the redevelopment of Pier 70.

SPUR’s analysis

This measure should be viewed in the overall historical context of the Port's efforts to renovate and rebuild the city's waterfront. Over the past 50 years, the demise of much of the city's maritime business has resulted in continued disinvestment in and deterioration of the Port's infrastructure. The Port has estimated that it needs approximately $1.9 billion in investment to rebuild needed infrastructure. Of this amount, only $800 million for these needs have been identified from existing resources, leaving a deficit of $1.1 billion. A substantial portion of this deficit can be attributed to Pier 70, which needs investment for environmental remediation, historic preservation and basic infrastructure.

The Port's intention is to use revenues from elsewhere on the waterfront as an initial investment in Pier 70 and as a way to attract private investment. Then once some of the infrastructure has been built and new businesses have moved in, the tools in Prop. D will allow the Port to finance additional redevelopment of Pier 70.

This measure would add to the financing mechanisms available and would expand the Port's ability to forge effective and realistic public-private partnerships. If successful, these partnerships would bring financial and economic benefits to the area and to the City that far exceed the cost of the initial public investments. A revitalized waterfront also would contribute broadly to the quality of life of the city and its residents.

SPUR already has identified the need for a new Pier 70 financing scheme in our report on the waterfront ("Hard Choices at the Port of San Francisco," Urbanist, August 2007; This measure is such a financing measure, and it finally would enable the redevelopment of Pier 70, an essential historic and economic resource — and a potential open-space resource — on our waterfront.

SPUR recommends a "Yes" vote on Prop. D.