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SAN FRANCISCO-The planned conversion of a former hospital complex at the foot of the Golden Gate Bridge into 161 apartment units appears ready to move forward. Forest City Enterprises said Monday it has secured $67.5-million in construction financing for the estimated $100-million project within the Presidio, a historic former army base that has been under redevelopment for more than a decade.

The hospital was closed in 1981. The project calls for the historic buildings in the hospital complex to be rehabilitated and for the non-historic wings of the main hospital building to be removed in favor of new construction. Wachovia, RBS Citizens, N.A. and the National Electrical Benefit Fund participated in the financing transaction, according to Forest City, which provided no other loan details.

The construction financing news comes 18 months after the Cleveland-based public company signed the related development agreement development agreement with the Presidio Trust. The Trust was established in 1996 to make the Presidio economically self-sufficient by 2013.

The Presidio was transferred to the National Park Service and made part of the Golden Gate National Recreation Area in 1994. In so doing, Congress mandated a funding model for the Presidio that requires it achieve economic self-sufficiency, which led to the creation of the Presidio Trust two years later. If the Trust cannot achieve self-sufficiency by 2013, it could be liquidated.

As part of the self-sufficiency effort, the Trust initially selected the 23-acre site of the Letterman Army Medical Center to be redeveloped and leased. Following a design competition in 1997, a team led by Lucasfilm Ltd. was selected to replace the hospital with the Letterman Digital Arts Center. Letterman Digital Arts Ltd., a George Lucas company, officially completed the $350-million redevelopment in June 2005. The 23-acre campus comprises 843,000 sf in four five-story office buildings surrounded by a 17-acre park. The company and its affiliates Industrial Light & Magic and LucasArts occupy three of the four buildings.

The fourth building remained in shell condition until early last year, when tenant improvements began for Babcock & Brown, an Australia-based investment advisory that signed a long-term lease for 155,000 square feet. Located a 2 Harrison St. on the San Francisco waterfront for the past 16 years, the firm relocated to One Letterman Dr. earlier this year.

Three other projects are in the works at the Presidio. The Walt Disney Family Foundation, a Presidio tenant since 2001, is rehabilitating the barracks in the Presidio’s Main Post for use as the Walt Disney Family Museum and Library. The project will include a children’s learning center with hands-on art programs, an extensive collection of artifacts and archival material, exhibits on animation and motion pictures, a research center for scholars, exhibits of art works influenced by Disney, a book store/gift shop, and a small café. The museum is expected to open to visitors in August 2009.

The Trust also is working toward the creation of a hotel at the Main Post, and for the rehabilitation of 12 other historic buildings totaling 144,000 square feet as it looks to increase revenue by increasing the number of public attractions. In addition to the hotel, the historic Montgomery Street Barracks that frame the Main Parade is slated to feature visitor-serving activities such as restaurants, galleries, and cultural institutions. A 1930s-era, unused for more than a decade, is expected to be rehabilitated and expanded for film and other theatrical performances.

A hearing to discuss the “Draft Main Post Update of the Presidio Trust Management Plan” and “Draft Supplemental Environmental Impact Statement” is schedule for Dec. 9, 2008, at the Palace of Fine Arts Theatre, 3301 Lyon St., San Francisco.

Michael Boland, the Trusts director of planning told the Golden Gate Club last month that about 75% of the buildings in the Main Post have been rehabilitated and occupied consistent with Presidio Trust Management Plan, and that the population of the Main Post today is about 1,400, which is about half of what it was during World War II.

“Even with all of this progress it’s safe to say the Main Post is not really a very lively placed,” he said. “Most of the square footage has been filled with office uses, and if you come here on any typical day, it’s a pretty quiet place. There are not many people coming. That’s because I think the remaining 25% is really the square footage that we always anticipated would really be devoted to public uses, and I think that will really establish the public character of the Post, and it’s really what we’re focusing on today.”

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