SF New Developments

San Francisco Business Times – September 12, 2006

by J.K. Dineen

The Port of San Francisco has rejected DeBartolo Development’s effort to take over the Cruise Terminal project at Piers 30-32 because the proposal would have increased the amount of commercial space and made other changes to the plan.

Former 49ers owner Eddie DeBartolo had sought to take the Piers 30-32 project over from Australian construction giant Bovis Lend Lease, which decided not to go ahead with the office and cruise ship complex because of the soaring cost of construction. But in a memo presented to Port Commissioners Sept. 12, port Executive Director Monique Moyer said the DeBartolo’s preliminary analysis found the same problems as Lend Lease: The estimated $80 million cost to seismically upgrade the piers makes the project financially out of the question.

In order to make the project pencil, DeBartolo had proposed shrinking the amount of space of the cruise ship terminal and increase commercial retail space by 240,000 square feet. In addition, DeBartolo asked the port to look into the possibility of giving it another port-owned parcel to develop, Seawall Lot 330. The proposed changes would likely have been met with vigorous neighborhood opposition. At the very least they would have required the port and project sponsor to obtain a dizzying series of governmental approvals from the California State Lands Commission, the city Board of Supervisors, and the city Planning Commission.

Instead, the port will appoint an advisory panel to take another look at the site plan and propose a new master plan and implementation schedule for the cruise terminal.

And rather than shrink the amount of square footage dedicated to the cruise industry, the new plan would likely increase that number, according to Moyer’s memo. With the length of cruise ships growing to more than 1,100 feet, and the number of passengers on the biggest ships surpassing 5,000, it may be necessary to jack up the amount of cruise terminal space in the plan from 80,000 square feet to 120,000 square feet.

“Clearly, we’re disappointed the project sponsor was not able to pull this off,” said John Doll, who heads up the project for the port.

He said the port would have to look at public financing, such as a general obligation bond, in order to jump start the project.

“I’m optimistic we’ll be able to rebid the project,” said Doll.