The Land Use Committee of the San Francisco Board of Supervisors had a hectic day on Monday as they cleared for approval what will likely be the city’s largest industrial development project in recent history, along with more protections for legacy small businesses.
Prologis’s Gateway Project
The committee unanimously approved the development agreement, as well as changes to the city’s Planning Code and Zoning Map, creating a special-use district to accommodate the S.F. Gateway Project. This is a two-building, multistory production, distribution, and repair complex with a 97-foot-tall, 2,160,000-square-foot footprint located on Toland Street and Kirkwood Avenue in the Bayview. Four warehouses used by Amazon currently occupy the site. In their place, the new project promises to provide not only last-mile delivery hub services but also light industrial and retail spaces, including art studios. Prologis acquired the site in 2014, and project plans have been in development since 2016.
The project sponsor is Prologis, based in San Francisco and by some measures the largest property company in the world, specializing in warehouse and logistics sites. The company’s founder and CEO, Hamid Moghadam, has made political news in recent years for his support of the presidential campaign of Stanford classmate and then governor of North Dakota, Doug Burgum, in 2023. Burgum is now Secretary of the Interior under President Donald Trump. Moghadam has also supported Democrats in the past, including Bill Clinton and Tom Steyer. The Prologis CEO also spoke out on how the spike in crime in the wake of the Covid-19 pandemic in San Francisco was driving business out of the city, after he was mugged in 2022.
The project has also figured in the fractious development politics of San Francisco’s southeast corner. When Amazon made moves to expand its delivery operations with the development of its own site in Showplace Square in 2022, it met organized resistance from residents and stakeholders marshalled by District 10 Supervisor Shamann Walton, including new interim controls on parcel delivery services passed by the board.
Chan’s legislation has been criticized by members of the city’s Small Business Commission, and last month, the Planning Commission recommended against approval.
The Prologis project itself has also received some criticism from constituent groups, such as Green Action. Nevertheless, it has garnered more support from other residents and labor groups, as well as Walton, and was approved by the Planning Commission last month.
Testifying for the project Monday, Walton called the project “a milestone moment for our district.” He noted Prologis’s accompanying pledges of local hiring and contracting, $8 million in “direct community contributions,” and $11 million in street rebuilding and other market zone improvements that will benefit future small businesses.
More boosts for legacy businesses
Controversially, and perhaps in contrast to the recent approval by supervisors of legislation by District 3 Supervisor Danny Sauter to liberalize business controls in his district, on Monday the committee voted 2–1 to refer to the full board legislation from District 1 Supervisor Connie Chan to preserve temporary controls that would require a Conditional Use Authorization for making use of commercial spaces previously occupied by “legacy businesses”— those which had operated for 15 years or longer.
Then Board President Aaron Peskin first introduced the temporary controls in response to the purchase through shell entities by venture capitalist Neil Mehta of several buildings in the Upper Fillmore neighborhood, including the historic Clay Theater. Dubbed the Upper Fillmore Revitalization Project, the venture has proposed a plan to reopen the Clay Theater as a higher-end single-screen venue with additional amenities, including alcohol service. At the board’s regular meeting on Tuesday, District 2 member Stephen Sherrill announced new legislation that would ease the regulatory process for the project.
Chan’s legislation has been criticized by members of the city’s Small Business Commission, and last month, the Planning Commission recommended against approval. After being continued in committee last week, the plan was amended to, among other things, limit covered legacy businesses to those with less than $5 million in gross receipts. The amendments were enough to sway Land Use Chair Myrna Melgar and member Chyanne Chen in favor of approval, but not remaining member Bilal Mahmood.
“I’m glad that small businesses are exempt from needing a conditional use authorization under the new amendments that have been proposed,” Mahmood told colleagues, “but this requirement to demonstrate business size is going to impede those other goals that we have about filling empty storefronts.”