UNION CITY — A developer that has struggled for more than four years to get a major apartment project off the ground is getting another reprieve from Union City.
The developer, Windflower Properties of San Francisco, will get an extra two years and seven months to begin building the 443-unit apartment complex approved in November 2017, the City Council unanimously decided this week.
The building — planned for a 3.5-acre plot of city land in the middle of the “Station District” near BART, was touted by Windflower Properties as the largest single housing development in Union City history. It’s supposed to go up at 34302 11th St., next to Union Flats, a 243-unit apartment complex Windflower previously completed.
But skyrocketing construction costs held the latest project up in 2018 and 2019, and then the pandemic came, pushing rents down while keeping material and labor expenses high, according to V. Fei Tsen, Windflower’s founder and CEO. That made it harder to finance the project, she added.
“We are hoping that some of the supply markets will stabilize, and that we, together with some of the design changes, will be able to make the project more feasible,” Tsen told the Planning Commission last month.
“We are optimistic that we can make the project work. We have already invested a tremendous amount of capital in this,” she said.
This is not the first time Windflower has been given a reprieve. It received two consecutive one-year extensions by the city through November 2020, then qualified for an 18-month extension under a state law meant to offset the pandemic’s impacts on housing developments.
At its meeting Tuesday, the council moved the extension deadline to start the project — known as Windflower 2 — from May 14, 2022 to Dec. 31, 2024.
If the project doesn’t break ground by the end of 2024, the approvals and rights to develop the land will both expire, city officials said.
“The applicant does have dibs on the land, so to speak, until Dec. 31, 2024, and I just don’t think it makes any sense to not extend this, because if we didn’t, then she does have the right to start (a new development application) all over again and I think that’s a waste of staff time and her time, and money,” Mayor Carol Dutra-Vernaci said.
“She has been a great partner, and continues to be a great partner in my opinion, for getting Union Flats off the ground,” she said.
“I’m totally supportive of continuing the partnership and am looking forward to seeing what the next version of this will be. I just am hopeful that the times will change and that we’ll have an opportunity to begin the momentum again,” Councilmember Emily Duncan said.
“It would be so disappointing to extend the agreement out and then find out we are not able to make it happen,” she said.
Some planning commissioners were less optimistic than the council.
“I like your determination. If nothing else, that’s worth a lot of money,” Commissioner Jo Ann Lew told Tsen at the commission’s Feb. 17 meeting. “But I’m not real confident that you’ll be breaking ground by Dec. 31, 2024,” Lew said.
Commission Chair Harpal Mann wondered whether a different developer could have built something by now.
“The city has a housing shortage, we all know that. There is no land available today for anyone to build. And this is prime land in the middle of the city,” he said.
“Is there any good faith from the (developer) that they are actually going to do something in the next two years, given the fact they haven’t done anything in the past five?” he asked.
“If Windflower is not able to do it, I do not believe that any other developer will be able to do it. We are very committed to this city,” Tsen told the commission.
“The city has no recourse, we’re stuck until 2024, right?” Mann said.
“This just looks like a bad deal. I’m not against extending it, but we would like to see that there has to be some milestones, there has to be a plan. The cost of construction is going to keep going up, it’s not going down,” Mann said.
While several commissioners and a council member asked Tsen how likely it is her company could break ground before the deadline, she didn’t offer any guarantees.
“You have a commitment by me to move as quickly as possible because actually my equity and my financial investment is in the project,” Tsen told the council.
Source: www.mercurynews.com