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Diamond Heights condo project will proceed after opposition is withdrawn

San Francisco Chronicle logo San Francisco Chronicle 1/14/2022 By J.K. Dineen

A Diamond Heights group that spent $100,000 fighting the biggest housing development in that San Francisco neighborhood in decades has withdrawn opposition after the builder agreed to a series of concessions.

Developer Marc Babsin said the parties reached a settlement last weekend on the 24-unit condo project at 1900 Diamond St. after he agreed to save 10 Monterey cypress trees, set back the buildings and create a parklet with a public platform offering 180-degree views from the downtown skyline to Mount Diablo and south along the bay.

In addition, the developer, On Diamond LLC — an affiliate of Emerald Fund — agreed to build a public staircase connecting Diamond Street and Diamond Heights Boulevard, which will connect Diamond Heights to Upper Noe Valley. The new plan also calls for the number of driveways to be reduced from 15 to eight, which will result in fewer curb cuts and more street parking.

Babsin said the negotiations, which carried on through Thanksgiving and Christmas break, were tough but that the project improved because of the input. The neighbors hired their own attorney, architect and engineer, and some of their ideas were incorporated into the new design.

“We had over 30 meetings — which is a lot for a project of 24 units,” Babsin said. “It’s an example of a dedicated effort by a community and a project sponsor to work together over time.”

In a letter to the 800 residents who had signed a petition opposing the development, 1900 Diamond for All said the compromise proposal “addresses many of the neighborhood concerns.”

“Although some may be disappointed, there has been a considerable investment in time and money in this effort,” the letter said. “After 1.5 years pushing for a better outcome; addressing environmental, neighborhood and legal concerns at a cost of (more than) $100k in legal, architects and expert fees, significant changes have been made by the Emerald Fund to the project which benefit the neighborhood.”

Steve Chaffin, an organizer with the group, declined further comment.

While the development will be all market rate, Babsin’s group will pay $2.8 million in affordable housing fees to the city. Of the 24 units, 21 will be three and four bedrooms, which Babsin said will help keep families in the city. Over the past decade, just 10% of the housing produced in San Francisco has been three bedrooms or more.

“This is family housing, and we are in a major family housing crisis,” Babsin said, noting that several friends with children had left the city in the past year. “The project is hopefully still viable.”

Supervisor Rafael Mandelman, whose staffer Jacob Bintliff was involved in the negotiations, said, “Babsin deserves a lot of credit for working with the neighborhood and coming up with something that works.”

He said he would prefer if the units were smaller — and therefore less expensive — but he was pleased a deal had been reached. The homes average 2,500 square feet and will probably fetch more than $3 million each.

“The good thing about the project is that it will create housing in a neighborhood that has not had very much built in recent memory,” Mandelman said. “My concern has been that some of that housing is clearly very large single-family homes. I don’t think that is a priority.”

The neighborhood opponents had also questioned whether the current property owner, the Cesar Chavez Foundation, has the right to sell the land to a market-rate developer. The foundation, which owns the adjacent Vista Del Monte low-income housing development, bought the property using public money — tax-exempt affordable housing bonds issued by the California Statewide Communities Development Authority — and the deal included a deed restriction that requires it to maintain the property for affordable multifamily rental uses for a period of 55 years.

While the city attorney looked into the matter, the office declined to take on the case, according to 1900 Diamond for All.

Carolyn Lee, an attorney for the Cesar Chavez Foundation, said the property had been subdivided in 2019, and the portion of land slated for development has “absolutely no remaining deed restrictions, regulatory agreements, declarations, covenants or any other recorded encumbrance” that would prevent it from becoming market-rate housing.

Both the California Tax Credit Allocation Committee and the U.S. Department of Housing and Urban Development had signed off on the subdivision and proposed sale of the land, Lee wrote in a letter.

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen

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