Potrero Power Station Advances as Commission Reshapes SF Development Policy

The San Francisco Planning Commission opened a new chapter July 30, seating three new commissioners and then moving unanimously through a sweeping agenda designed to unlock stalled development across the city — from a 29-acre waterfront megaproject to downtown office-to-housing conversions to a crackdown on hoarded office allocations.

• Potrero Power Station clears major hurdle as commission approves height increases, use flexibility, and streamlined approvals for the 2,600-unit, 30%-affordable waterfront project
• Office-to-housing conversions get a boost with parking, loading, and car-share exemptions; a 105-unit project at 150 Hayes set to file immediately
• Stalled office projects put on notice under new three-tier revocation policy as only 800K sq ft remains against 2M+ in requests
• Three new commissioners seated — Joel Koppel, Mike Chen, and Elizabeth McDonald — in the largest single-meeting turnover in recent memory
• Larger signs approved for half-acre-plus mixed-use parcels, directly benefiting Sierra AI's 250,000 sq ft office near the ballpark
• Impact fee revenue plummets as construction drought and 67% fee cuts shrink the pipeline funding parks, transit, and affordable housing infrastructure

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A Generational Project Gets a Second Wind

The night's centerpiece was the Potrero Power Station, a 29-acre former industrial site on the southeastern waterfront that has been closed to the public for 150 years. Commissioners unanimously approved a package of amendments to the project's development agreement, special use district, zoning map, and design guidelines — changes the project sponsor says are essential to making the development economically viable in a post-pandemic market.

The basics: The project, developed by Fifth Space/California Barrel Company, was originally entitled in January 2020, weeks before COVID upended the real estate market. It envisions 2,600 homes — 30% of them affordable at 50–110% of area median income — plus commercial space, a UCSF cancer center, parks, and community facilities on a waterfront site in the Dogpatch neighborhood.

Where things stand: Progress is real but uneven. The project sponsor reported 105 workforce housing units completed, a UCSF cancer center under construction with a 2029 opening, horizontal infrastructure finished, and 150 workers currently on site. But the remaining phases need the flexibility these amendments provide: allowing residential or commercial uses on blocks previously locked into commercial-only designations; permitting rooftop bars, internet service exchanges, and inclusionary housing units site-wide; increasing building heights by 8 to 30 feet on various blocks; expanding parking for institutional and grocery uses; and delegating some future approvals to the planning director rather than requiring full commission hearings.

Why it matters: The 30% affordable housing commitment — an unusually high figure for a private development — remains untouched. Planning staff Monica Giacomucci walked through late modifications to transportation and transportation demand management plans. John Lau of the Mayor's Office of Economic and Workforce Development provided historical context on the entitlements.

Community benefits are also shifting to match reality. The project sponsor explained that two planned 6,000-square-foot childcare facilities are being replaced by three smaller ones at the YMCA's recommendation, and an uninsurable rooftop soccer field is becoming a basketball court. Manuel Rodriguez of the YMCA of Greater San Francisco spoke in support, citing the organization's successful Dogpatch location at Crane Cove Park as proof the partnership works.

One public commenter, Jessica Pesco, raised concerns about website accessibility and said community benefits were glossed over in the presentation.

Decisions: Commissioners were effusive. "What you're doing down there is absolutely phenomenal. The vision of it early on is phenomenal. We've got the old, we've basically got the new, we're reinventing the old," said Commissioner Sean McGarry. Commission President Amy Campbell called it "a generational project." Vice Chair Lydia So praised the affordability commitment: "I particularly applaud all your unwavering commitment to 30% affordable housing. By utilizing a thoughtful AMI flexibility, this project directly targets the housing needs for our missing middle." Commissioner Joel Koppel praised the developers for taking on risk, and Commissioner Elizabeth McDonald highlighted the public realm design. The motion, made by Commissioner McGarry and seconded by Vice Chair So, passed 6-0 (For: Chen, Koppel, McDonald, McGarry, So, Campbell; Against: 0; Absent: 0).

What's next: The amendments head to the Board of Supervisors for final approval.

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800K Square Feet, 2 Million in Requests: Office Allocations Hit a Wall

The commission adopted a new policy to reclaim stalled office development allocations under the city's Prop M program — a 1986 voter-approved cap on office space that has become a critical bottleneck for San Francisco's economic recovery.

The basics: Prop M limits the total amount of office space the city can approve. The "large cap" — for projects over 49,999 square feet — has only about 800,000 square feet remaining, while active applications request more than 2 million square feet, and port projects represent another 2 million in future demand. Making matters worse, Prop E (2020) tied annual allotments to affordable housing production. Because the city met only about 25% of its affordable housing goal, the annual allotment was slashed proportionally.

Where things stand: Zoning Administrator Corey Teague delivered a detailed presentation on a new three-tier revocation framework. Tier 1 covers projects with no progress that have exceeded their performance periods — those will face revocation hearings after the commission's summer recess. Tier 2 captures projects with some progress but that have stalled; they'll receive 18 months to advance. Tier 3 covers development agreement projects and those with significant public benefits, which will be evaluated on project-specific timelines.

Future allocations would prioritize projects with housing components, construction-ready status, or that previously forfeited space. Any new allocation would face automatic revocation scheduling if no building permit is issued within three years.

The other side: Vice Chair So raised a structural concern: port projects draw from the same pool, and changing that would require voter approval. "I have been reading this for quite some time and I have to say this is a situation where no one wants to be in," she said. Director Sarah Dennis-Phillips cautioned against reading the tiers as a death sentence for projects: "Most of the project sponsors that we're talking to that are in any one of these tiers are in very dynamic circumstances. Some are in circumstances where they look at this policy and they're like, we have people we're actively talking to."

Decisions: The policy was adopted 6-0 (For: Chen, Koppel, McDonald, McGarry, So, Campbell; Against: 0; Absent: 0).

What's next: Tier 1 revocation hearings will begin after the commission's summer recess.

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Clearing the Way for Downtown Conversions

Commissioners unanimously approved amendments to the planning code that exempt office-to-housing adaptive reuse projects from residential parking maximums, loading requirements, street frontage standards, floor area ratio limits, and car-share obligations — regulations that were designed for new construction and have made conversions of existing buildings financially infeasible.

Why it matters: Only one successful office-to-residential conversion — 100 Van Ness — has been completed in San Francisco. Staff member Lily Language presented the ordinance, authored by Supervisor Dorsey, as part of a suite of policies dating to 2023 that includes fee waivers and transfer tax exemptions. Madison Tam from the supervisor's office described the legislative arc.

Where things stand: Two developers spoke in support. Mark Babson of the Emerald Fund described a specific project at 150 Hayes Street — a building with three floors of parking, four residential, and four office floors — that would yield 104 to 105 units in the Civic Center. He said his firm plans to submit an application imminently. A developer from SDG who has worked on conversion feasibility for more than three years noted that the recent office market recovery has paradoxically made conversions harder to pencil, making the code changes essential.

Commissioner McDonald raised a question about how converted buildings would interact with the ground-floor public realm, particularly where existing parking garages face the street. The department proposed a modification limiting the street frontage waiver to buildings with existing ground-floor parking. Commission President Campbell praised the policy: "I think they've implemented every recommendation that SPUR made several years ago at this point."

Decisions: The motion, made by Commissioner Koppel and seconded by Commission President Campbell, passed 6-0 with four department-recommended modifications, including conditional bike parking waivers (For: Chen, Koppel, McDonald, McGarry, So, Campbell; Against: 0; Absent: 0).

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Three New Faces Reshape the Commission

Half the commission turned over in a single meeting. Commissioner Joel Koppel returns to the body, now employed by the SF Electrical Contractors Association. Commissioner Mike Chen, nominated by Mayor Daniel Lurie, is a former SF YIMBY advocate and frequent public commenter. Commissioner Elizabeth McDonald, nominated by Board President Mendelman, is a former UC Berkeley planning professor.

The new members replace departing Commissioner Derek Braun, who received emotional tributes from every sitting commissioner and from staff. Commission President Campbell praised his meticulous preparation and love for the city. Braun later returned during public comment to thank colleagues, calling Planning Department staff "the greatest collection of earnest, brilliant planners" he has encountered across nearly 100 public-sector clients.

Commissioner Chen signaled his priorities early, sharing a personal anecdote about a friend who left a rent-controlled one-bedroom: "He rented it in 2022 for $3,100, went on the market for $5,100 this year."

The new commissioners also made their marks on substantive items. Chen questioned the historic preservation evaluation process during the 646 Duncan Street case, calling it "not very friendly" for families who discover their property's historic status only after spending thousands of dollars on plans.

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Bigger Signs for Bigger Lots Near the Ballpark

The commission recommended approval of a Supervisor Dorsey ordinance allowing an additional wall sign per frontage — up to 80 square feet in area and 80 feet in height with indirect illumination — on mixed-use parcels of half an acre or more.

Why it matters: Current signage rules were designed for small lots and left large commercial tenants unable to display signs proportional to their buildings. Tom Tunney of Reuben Junius and Rose spoke in support, identifying Sierra AI as a client taking 250,000 square feet near the ballpark that needs appropriate signage. Staff noted a correction: the maximum height in mixed-use districts is 24 feet, not 60 feet as printed, with the 80-foot allowance applying specifically in the Mixed Use-Office District south of Townsend Street.

Commission President Campbell urged broader application: "I suspect there are other half-acre lots that would benefit from this in other mixed-use districts." Commissioner Chen recalled past signage legislation by former Supervisor Stefani.

Decisions: Passed 6-0 (For: Chen, Koppel, McDonald, McGarry, So, Campbell; Against: 0; Absent: 0).

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Duncan Street Addition: Historic Rules Push Massing to Neighbors

The commission declined to take discretionary review of a third-floor vertical addition at 646 Duncan Street, a Category A historic resource on a triangular lot. The neighbor at 652 Duncan objected that historic preservation requirements forced the addition rearward — more than 15 feet from the street — concentrating massing adjacent to their bedroom windows.

Project sponsor representative Simon Yip explained that an earlier design with a 7.5-foot side setback was rejected by preservation staff, and the current design voluntarily provides a 4-foot setback. Mediation was attempted but failed. Staff recommended approval, finding the project code-compliant.

Commissioner McGarry moved to approve, noting that the DR requester had maximized their own property. Commissioner Chen used the case to question a broader policy problem: "Many project sponsors may not know the historic status of their property before they submit, before they spend thousands of dollars." Clerk Jonas Ionin explained the process by which properties are evaluated and reclassified.

Decisions: Passed 6-0, project approved as proposed (For: Chen, Koppel, McDonald, McGarry, So, Campbell; Against: 0; Absent: 0).

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Minor Items

• 871 De Haro Street discretionary review continued to Sept. 17, 2026, on a 6-0 vote.
• Development Impact Fee Report accepted 6-0. Staff member Matt Snyder presented the biennial report covering 38 fees, showing sharp revenue declines due to low construction. Fees have been cut 67% to spur building. Completed projects funded by impact fees include Gene Friend recreation center, Esprit Park, Potrero Gateway, and the 22 Fillmore transit improvements. Snyder corrected a typo: the transportation sustainability fee total is $86.7 million, not $94.5 million.
• Lulu Huang, the longest-tenured Planning Department employee in history, was honored with a formal proclamation for 43 years of service (1983–2026).
• Board of Supervisors recap: Staff reported the Board passed roughly 20 landmark designations and a hotels-in-residential-districts ordinance, and forwarded a street tree ordinance.
• General public comment: Ace Washington, Fillmore Corridor Ambassador, criticized the Fillmore Community Action Plan for lacking grassroots input, referencing the Western Addition's urban renewal history. Georgia Schuttish, a 47-year resident, raised concerns about tall, narrow buildings being built under the Housing Choices SF program on small lots, citing a recent 85- to 95-foot project at 230 Anza.