NEWSLETTER

NEWS	WHATS SHAKIN





LETTER
Vol. Vol 2 No. No 2 May 15, 1997	New City Renaissance Edited by Ed Campaña

The real estate market across the country has been heating up to a feverish pitch during the past quarter. You read something new every day about the rising prices across the board in the real estate industry from new homes to resales of condominiums. Prices are increasing, the market is strong, many properties are receiving multiple offers.

The general public and especially those that purchased their homes in the late eighties are thinking that this is reminiscent of that period of seemingly endless escalation of real estate prices. In fact many of those people who purchased in the late eighties, are seeing their properties regain their original equity position after having lost 10 to 25% over the course of their investment.

In my last newsletter I said that the both Buyers and Sellers had an equal edge in the market place. At this writing the table has turned a little and sellers are currently sitting at its head. The seat is a tenuous one however. The data is not yet sufficient to proclaim that the "Eighties Are Back" and caution should be exercised in coming to any pre-mature conclusions.

Our microcosm of the real estate market is impacted by many of the same elements which influence the general economy. However, local effervescence has a significant effect on our unique City.

In the long run this community will fair well from the point of view of real estate investment. The road in the short term may be bumpy. My advise to those of you how are contemplating selling at this time is as follows. Don't be greedy! Price your property at the market value. In this market fairly priced properties are getting multiple offers in most cases. Select the best offer not the highest. In several recent transactions, sellers have taken the highest offer without really considering the buyer's motivation, sophistication, qualification, and knowledge of market values. In two cases that I know of first hand, the accepted offers backed out within seven days. When the properties came back on the market, the other buyers had moved on or had a bad feeling about the property based on the rejection of what they considered a sound, fair offer. In the end, both properties ultimately will bring less on the transaction because of the lower offers which came forward subsequently.

Timing is everything! Currently there are more buyers in the market place than there are quality properties to sell. Most new buildings coming on the market are sold out before they reach the Multiple Listing Service, i.e. become public. The anticipation of all the new development in the area, which I will update later in this newsletter, has created a great demand for the area. Therefore, placing your property on the market at this time, at a fair price is a guaranteed 45 day sale.

What could effect whose sitting at the head of the table? Supply of buyers may run out. Inflation may run up resulting in higher interest rates. The interest rates will price many buyers out of the market. The number of units in area will grow beyond the demand. The media will convince everyone that the big one is coming and the SOMA is not earthquake safe.

If you have to leave the area or have a need to rent your unit, Fred Sands Rental Division can accommodate that need at top dollar. If you have a commercial property to lease or sell or you are looking for commercial space, Fred Sands Commercial can accommodate you. My recent affiliation with the L.A. giant, Fred Sands, gives me a tremendous increase in resources to service your residential and commercial needs.

Talk about science fiction! The Seismic Hazards Mapping Act requires cities and counties to protect the public from earthquakes! Since they can't predict where or when they will occur, the state geologists have decided to protect the public by trying to scare the heck out of them. The state has made it mandatory, as of April 17, 1997, for Sellers to disclose to prospective Buyers whether or not the property for sale is in a seismic hazard zone. Hey, we live on Earth don't we? Hello!

The same "scientists" who consulted to the film production of Meteor, have decided to produce a map that must be disclosed in any real estate transaction in San Francisco. The map identifies which areas of the City may be subject to liquefaction in a major quake. They are supposedly accurate up to 95% and within 40 feet on the map. It is stated in the map legend that there are other factors which contribute to earth quake damage but they haven't been fully evaluated at this time. Did you know what liquefaction was before Loma Prieta? No two state agencies can agree on which zip codes are at risk or on the boundaries of the areas prone to liquefaction. Nevertheless we have to include this map in our property disclosure. Go figure!

Based on the map provided by the state, Rincon Hill is not impacted by liquefaction, of course if you had a fissure down 1st Street, it wouldn't really matter.

The bottom line is that this map leads you to two conclusion that are both false. One is that the ground saturated by dots on the map will liquefy during and earthquake and two that if you are not in an area saturated by dots on the map, you will be safe in the event of an earthquake. If you live in San Francisco, you live in one of the most popular cities in the world which happens to be a seismic hazard zone!

Copies of a SOMA section of the map will be provided upon request from Ed Campaña at (415) 441-0656 ext 266.

The Pac Bell Park brings a tremendous amount of benefit to the City, specifically the SOMA. Unfortunately it brings some displeasure as well. For awhile it seemed that Quentin Kopp was not going to get legislation passed to issue early eviction notices to the tenants of 860 Second, 865 Third, Berry Street, and Pier 46. In the 11th hour, with some help from his friends he prevailed. This legislation caused some hardship for the tenants sooner rather than later.

At a planning meeting in April which reviewed the EIR(environmental impact report) for the ball park, a major concern was raised about toilets backing up in the South Beach area. The claim was that several of the high rises in the area have had back ups several times a year ( I had not heard that complaint before.) and 42,000 fans flushing would exaserbate the problem! Creates a swell image, doesn't it?

Parking will be a problem, as will traffic. Several suggestions were made in the report to mitigate against the problems but on weekday day games-Don't drive to work. That seems to be the good news. If driving becomes a big enough hassle, people may leave their cars at home!

The ball park design has brought both praise and criticism. It will clearly be one of the, if not the finest, baseball parks in the world. On the other hand, neighbors are concerned about noise, lighting and signage amoung other things. The reports which I have read, indicate that the residents and yachtsmen are fearfull that the Scoreboard (125 feet tall) placed in center field and one of the two, Pac Bell Park signs (175 feet long with neon letters 11 to 12 feet high and facing North) will be an iritant rather than enhance the esthetics of the the area. Jack Blair assured the skeptics that the lights are designed to focus on the field and should not pose a problem. If they don't, at least Crime Watch will appreciate the deterrence of a clean, well lite neighborhood!

The issue of sound will be addressed by a system of smaller amplified speakers placed throughout the inside of the park and focused on the playing field. This theoretically, diffuses the booming effect of large speaker PA systems.

The Esprit Park across from Potrero Square (701 Minnesota) is on the auction block. The new owner of Esprit has declared the park surplus propety and assessed it's worth between 3 and 4 million. The City is trying to negotiate with the owners to save the park as open space which the City would maintain at the cost of $75,000 dollars a year, if it becomes public. A coordinated effort of public and private groups has been launched to save this open space in an area that would be void of a "calming patch of green" in its absence.(Rachael Gordon-SF Examiner-3-21-97)

In case you hadn't noticed there is quite a bit of activity at the gardens lately. The infrastructure and the construction technique of the West end of Moscone Center are very impressive. The way has been cleared for the Sony entertainment center and we should see the beginnings of that project very shortly. Bowling, shows, museums, theater, ice skating, restaurant, it's a regular amusement park!

The dipute over the Yerba Buena Center plaza is over. The ostrich maneuver was used to pass over New York=s Peter Eisenman proposal for the plaza which was labeled by some as sterile and cold. When the commissioners came up for air they and the neigbors to the plaza were thrilled with the new plan submitted by Carter Tighe Leeming and Kajiwara. It=s been described as a gentle,gracious balance (The three former discriptors all from different quotes.) Can't wail to see it!

After basking in the calm of the plaza you can stroll through the esplanade to the proposed huge, urban country club. The situs for the club is the empty lot on Market street next to the Marriott Hotel. The 100,000 square foot health club will occupy the lower floors of the 750,000 square foot building. These mega clubs already exist in New York and Los Angeles. The developer of the proposed highrise is also the developer of the Sony entertainment center. For $100 to $150 a month, you too can perspire and drink smoothies.

And last but not least don't miss the "Summer of Love: A Pictorial Celebration" at the Ansel Adams Center, 250 Fourth Street from June 25-September 7. The exhibit will feature photographs, posters, album covers and other memorabilia of the 1967 summer of love.

The love tiangle between Mayor Brown, Catellus and UCSF is finally working its way into a marriage! Like him or not, you have to give Mayor Brown the lion's share of the credit in bringing the players to the table and keeping them there. As a result the developer of the Mission Bay Site, Catellus, and the City have offered to donate 43 acres to UC for construction of their $800 million second campus. Catellus went along with the plan based on the Mayor's assurance that he would support and facilitate Catellus' plans for residential development along the estuary of Mission Bay. The board of Regents will make the final decision on the site this month.

This is a huge project. Mission Bay North which the Mayor has promised to support, would encompass 600 units of affordable housing and 2,400 units at market rate, rental housing, parks, 250,000 square feet of "community serving" retail space and up to 350,000 square feet of entertainment-retail space next to the proposed Giant's ball park. Mission Bay South has its own development proposal which includes the UC Campus, 5 million square feet of leasable space for commercial use, 250,000 square feet of retail space, 500 room hotel, and 3,000 residential units with one third being affordable housing and two thirds sold or rented at market rates. The commercial space is expected to be utilized by the biotecnology and mutimedia industries.

Have you noticed the number of wood frame boxes sprouting up in and around the neighborhood? Well the folks in Potrero Hill have. It's a familiar debate. Status quo vs. progress. Both sides have merit. How do commercial tenants coexist with residents, what happens when rents go up as a result of new development, what happens when the character of a neighborhood changes. The proliferation of the residential loft construction is evident from city figures: 58 units built in 1991 and 617 units being built this year. The whole thing started when the City, in its wisdom, passed zoning ordinance changes designed to help artists reside in the spaces in which they worked. Hence, live-work was born. Unfortunately, not many artist could afford the units that were built. In this market the average price is about $250 a square foot, not inexpensive by any stretch of most artist's imagination.

The answer is stricter enforcement of the intent of the live-work ordinance and a moritorium on loft building, say some. The matter is being discussed in the planning commission meetings currently. It is something you may all have an opinion on and you should share it with the commission. After all it will shape the face of your community.

One of the more important facets of the Transbay 20/20 Project is well on its way to City approval. The Redevelopment Agency Commission has voted to approve the a measure to create a $130 million dollar bus station on a block bounded by Main, Beale, Howard, and Folsom Streets. This action calls for the demolition of the current transbay terminal at First and Mission.

I hope that most of you attended the exhibiton at the South of Market Cutural Center on May 9th and 10th. It covered most of the significant developments in the SOMA currently. It was great to have representatives of all the entities involved in the SOMA development in one place at one time. Planning , Port Authority, Redevelopment, Giants, Muni, Environmentalists were all in attendance. Catellus was not represented which would have been instructive. It was a very informative event and hopefully there will be follow up events in the future.

A few things of interest gleaned from the event were the following. The Port has a master plan for what they envision as the best use of the waterfront. Most of the plan will have little negative impact on the residential community. However, there are plans to develop the Bryant Street Piers, which may impact views from the Portside. The Redevelopment Agency has approved 301 Bryant Street for 38 Lofts and the Cape Horn Warehouse for 16 Lofts, construction scheduled for August 1997 and April 1997 respectively. Proposed developments include 216 efficiency type live work units at the site adjacent to the bridge abutment on Beale and Bryant Streets, 350 housing units at the corner of First and Brannan, 70 units at the corner of Townsend and Colin P. Kelley Jr., and 233 rental housing units at the corner of King and Second Streets. The agency has been and will continue to be extremely active in developing the West SOMA (Sixth Street West) with affordable housing. The goal is 500 new housing units and 200 SRO's (single room occupancy) and rehabilitation of 150 family residences and 1,000 SRO's.

Current Comparable Sales Museum Park/ Baycrest /Baycrest/Portside/Clocktower/355 Bryant/The Lofts/Potrero Square/Hills Plaza/New Developments--Oriental Warehouse/650 Second/

*These sales are so recent that square footage is an approximation-the tax records do not reflect square footage yet.

There have been several other smaller developments popping up in the greater SOMA. However, those developments are built from the ground up and generally, sell for $250 a square foot or less. With the exception of the Welsh, Ritch and Zoe Street Lofts, they are outside of my focus area. Therefore, they will be covered in a later edition of this newsletter which will focus on lofts built from the ground up. The proliferation of these ground up lofts will go on into the next millennium. Historic site Lofts will hold and appreciate in value more.