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[IMGCAP(1)]SAN FRANCISCO-A master plan will be released Monday for Pier 70, a 50-acre waterfront property located just south of the burgeoning Mission Bay area and a few blocks from the Third Street rail line. A request for qualified development teams looking to take on the project will be issued this fall after the plan is vetted by the Port Commission, a source with the Port tells GlobeSt.com.

In addition to remediating the property and rebuilding its infrastructure, some elements of the multi-billion-dollar plan include maintaining the pier’s existing ship repair business while incorporating approximately 20 historic buildings on the property into some three million square feet of new office space along with street-level dining, drinking, shopping and entertainment options, and 20 acres of open space.

[IMGCAP(2)]Estimates for the cost of remediating the soil and removing asbestos from the buildings is approximately $70 million. An additional $560 million or so would be needed to rebuild the infrastructure and prepare the site for construction. Public financing may cover 60% of those costs, leaving the developer team to come up with the additional $1.5 billion or so needed to turn the plan into a completed project.

“It’s an idea we’ve been working on for three years,” Jonathan Stern, a waterfront development manager at the Port, tells GlobeSt.com, declining to discuss specifics until the plan is released next week. “We’ve taken it about as far as we can—a lot farther than we normally do–from a planning standpoint and now we need some developer expertise.”

Meanwhile, just north of Mission Bay, the Port is working to hammer out an exclusive negotiating agreement with the developer team selected to redevelop Seawall Lot 337 and Pier 48, respectively a 14-acre parking lot and a 180,000-square-foot pier, both located across McCovey Cove from AT&T Park, home of Major League Baseball’s San Francisco Giants.

The developer team, SWL 337 LLC, includes Wilson Meany Sullivan, San Francisco Giants, Kenwood Investments LLC, the Cordish Company, and capital partners Farallon Capital Management LLC and Stockbridge Capital. The entity is an amalgamation of the two developer teams that were short-listed for the project. Boston Properties, a major capital partner on one of the teams, opted not to participate in the joint submittal and is no longer involved in the project.

The estimated $2.2-billion development proposal is for the creation of a new neighborhood, the Mission Rock District, which includes SWL 337, China Basin Park, Pier 48 and portions of Terry Francois Boulevard. The design shows SWL 337 broken into 10 city blocks built up with one million square feet office space, 240,000 square feet of retail space, 875 apartment units and open space. The plan for Pier 48 calls for 181,000 square feet of event space.

The developer team is asking for 75- and 66-year leases for SWL337 and Pier 48, the maximums allowed by state law. The Port is projected to receive base rent totaling $208 million between 2013 and 2053. Though the submittal has no specific proposal for base rent increases, the pro forma shows $254 million in “performance rent” between 2013 and 2053 roughly equal to base rent escalations every five years at the rate of inflation.

Its development proposal outlines an approximately four year period to conduct due diligence and obtain all required entitlements followed by a four-phase, 17 year site build-out commencing in 2013. The historic rehabilitation of Pier 48 is proposed to take place between 2022 and 2026.

Seawall 337 is currently being leased to the China Basin Ballpark Company LLC for a surface parking lot of approximately 2,000 spaces, primarily to serve parking needs of AT&T Ballpark baseball games and events. The site also provides parking for commuters and special events. The China Basin Ballpark Company LLC lease expires on November 15, 2009.

Stern tells GlobeSt.com the exclusive negotiating agreement between the Port and the development team should be hammered out sometime this fall. The Port was not very impressed with the developer team’s initial proposal for Pier 48, which could be cut out of the agreement if a better proposal isn’t received, according to the latest staff report.

“The proposal’s treatment of Pier 48 seems to be incomplete, offering rents below current interim lease rates with major improvements at Pier 48 delayed until 2026,” states the report. “Based on the current proposal, Port staff does not believe a long-term lease is warranted at Pier 48. If the Port Commission chooses to proceed, Port staff would seek revisions to the proposal regarding Pier 48 or evaluate whether Pier 48 should be included in the scope of a long-term development agreement.”

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