Affordable housing units will no longer be required by the city of San Francisco, allowing Lendlease to restart work on the Hayes Point tower (seen in rendering at center).
Rendering courtesy SCB
The city of San Francisco has dropped a requirement to include affordable housing units in a mixed-use project stopped over one year ago by developer Lendlease, clearing the way for construction to restart, according to media reports.
The Australian real estate giant, which earlier this year decided to divest its U.S. and U.K. construction and real estate operations, had made the project a key part of its American development business.
Globest.com reported that the company decided to sell the project, known as Hayes Point and located at 30 Van Ness Street. But San Francisco agreed to drop a requirement for affordable housing units priced below market rate to be among the planned 333 condo units. The city is trying to spur housing development, since it has usually ranked high on lists of the most expensive to live in, the San Francisco Standard reported.
“City officials are finding room for compromise on issues like fees, infrastructure and affordable housing requirements,” reported the Standard.
When work was paused, the project seemed like a poster child for the post-pandemic, high-interest rate real estate woes.
Lendlease had broken ground 11 months earlier on the $1.2-billion structure that was one of the company’s biggest projects started in 2022, with key sub-structure work completed.
Sales to Consigli
In an announcement May 27, the Sydney-based developer and contractor said it would refocus operations and real estate investment in its native market and divest U.K. and U.S. projects and assets—an overall transaction it said would “recycle” $2.9 billion into the Australia market while exiting international construction.
Almost immediately, Milford, Mass.-based Consigli Building Group Inc. said it will acquire Lendlease’s New York and New Jersey construction operations, which comprise most of its U.S. activity—a deal the former said includes employees and work associated with about 45 current under-contract and pre-construction projects.
Whether Consigli will take over or have any role in the restarted San Francisco construction could not be confirmed.
Deputy Editor Richard Korman helps run ENR’s business and legal news and investigations, selects ENR’s commentary and oversees editorial content on ENR.com. In 2023 the American Society of Business Publication Editors awarded Richard the Stephen Barr Award, the highest honor for a single feature story or investigation, for his story on the aftermath of a terrible auto crash in Kentucky in 2019, and in 2015 the American Business Media awarded him the Timothy White Award for investigations of surety fraud and workplace bullying. A member of Investigative Reporters and Editors, Richard has been a fellow on drone safety with the McGraw Center for Business Journalism at the Craig Newmark Graduate School of Journalism at CUNY. Richard’s freelance writing has appeared in the Seattle Times, the New York Times, Business Week and the websites of The Atlantic and Salon.com. He admires construction projects that finish on time and budget, compensate all team members fairly and record zero fatalities or serious injuries.
