EPA Region 9 Brownfields Program RLF Success Stories

Townsend St, San Francisco, CA

4>EPA

United States
Environmental Protection
Agency

RLF Assistance

After receiving an EPA Revolving Loan Fund (RLF) grant
in 2006, California's Department of Toxic Substances
Control (DTSC) made three loans and ten subgrants
to local governments, community development
corporations, and school districts to address a range
of petroleum and hazardous substance contamination
issues. DTSC's RLF Program plays a critical role in
moving cleanup forward by providing gap financing for
cleanup activities, while leveraging other funding for
project construction. With this funding, once troubled
properties are successfully being reused for affordable
housing and greenspace opportunities, education and
community centers, community-serving retail, and civic
uses in disadvantaged communities.

Proje

Remediating extensive lead contamination,
obtaining project approvals on a historic building,
and pulling together multiple financing sources all
posed challenges

Project partners collaborated to overcome the lead
contamination and put together various funding
sources, including federal and state grants and loans,
to make the new use into a reality

Strong community support from various groups,
including: San Francisco Housing Action Coalition,
Transportation for a Livable City, San Francisco
Architectural Heritage, San Francisco Bicycle
Coalition

Project Description

Property Address: 178 Townsend Street

San Francisco, CA 94107
Property Size: 22,000 square feet
Former Uses:	Electric power plant; hay, grain and

feed mill; drayage and storage facility;
automobile repair shop; and parking lot
Contaminants Found: Lead

Current Use:	Mixed-use residential project under

construction

Planned Use: Residential development to provide 94
new units, including 19 affordable units

Current Owner: Arc Light Co, Affordable, LP

Property History

In 1888, the California Electric Light Company constructed a
three-story brick electricity generating plant—the first in the
world to operate and distribute light from a central station—at the
property on the corner of Townsend Street and Clarence Place
in San Francisco. The plant provided most of the city's electric
lights, satisfying the burgeoning demand for electricity. The
1906 earthquake caused severe damage to the building and the
demolished brick and concrete from the building was used as fill
during post-earthquake reconstruction. The brick and concrete
had been painted with lead-contaminated paint, which seeped
into the soil and created the contamination, In the years since
the earthquake reconstruction, the site has been utilized for a
variety of functions by various owners: a hay, grain and feed mill;
a general purpose warehouse and drayage facility; an automobile
repair shop; and a parking lot.

Drivers for Redevelopment

Located between AT&T Park, home of the San Francisco Giants,
and the city's financial district and waterfront, the site is an idea!
place for a residential building. The mixed-use residential project
is expected to help revitalize the property and the surrounding
community. Cleaning up and redeveloping this lead-contaminated
site realizes several benefits to the community: eliminating a
blighted, underutilized site from the neighborhood, adding much
needed affordable and market rate housing units, and providing
neighborhood-serving retail, In addition, it will help revitalize
the local economy by creating employment opportunities (100
construction jobs and 60 new permanent jobs), an increased tax

Converting an underutilized and contaminated
site into residential mixed-use housing and retail
represents an important development to this historic
San Francisco neighborhood


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Project Partners

Environmental Protection Agency, Region 9
California Department of Toxic Substances Control
City of San Francisco
Arc Light Co. Affordable, LP
Architects: Ian Birchall Associates and HKS
Contractor: James E. Roberts-Obayashi
Department of Housing and Urban Development
CBRE HMF, Inc. (HUD Lenders)

base of $500,000, an increase in annual sales tax revenue, and a
$200,000 increase in annua! property tax revenue.

Project Results

In September 2008, the Arc Light Co. project received initial
approvals by the San Francisco Planning Commission for a
mixed-use residential project on the site. In May 2009, the project
received a commitment letter from DTSC for EPA Revolving Loan
Fund (RLF) funding, which was a crucial milestone as it allowed
the remediation to move forward and leveraged other funding
that was needed for project construction, including a $3.5 million
Infill Infrastructure Grant from California Housing and Community
Development (HCD) and a Department of Housing and Urban
Development (HUD) loan. In October 2009, a $1.25 million
low-interest loan from the DTSC RLF (originating from EPA)
was awarded to clean up lead-contaminated property at 178
Townsend Street. The loan has created about 100 construction
jobs over two years.

Three thousand tons of lead-contaminated soil were excavated,
removed and hauled to a disposal site; seven yards of non-
Resource Conservation and Recovery Act (RCRA) hazardous
waste from lead paint on the brick were also removed and hauled
to a disposal site. Excavation activities removed excess fill from
previous uses and debris from previous earthquake material
that was buried beneath the building, Further in August 2010,
the California Tax Credit Allocation Committee (TCAC) awarded
an American Recovery and Reinvestment Act (ARRA) Gap

Project Timeline

Sept 2008 Phase I Environmental Site Assessment (ESA)
Oct 2008 Phase II ESA

Sept 2008 San Francisco Planning Commission
approves redevelopment of site into
mixed-use residential project
May 2009 DTSC RLF commitment letter received
Oct 2009 DTSC RLF awarded
Aug 2010 HUD construction loan awarded

Arc Light Co Affordable, LP ownership
TCAC ARRA gap financing awarded
2012	Construction completed

Financing grant of $312,000 to the project as a gap in financing
for the market for low income housing tax credits for which the
project had a reservation.

Completed in early 2012, this residential development provides
both 94 new residential units (75 market rate and 19 affordable)
and 3,540 square feet of retail space consisting of a restaurant,
daycare and underground parking garage. To date, there are 10
occupied units and 11 signed leases for market rate apartments.
Finally, the structure meets today's gold standard for "green"
construction under the U.S. Green Building Council's Leadership
in Energy and Environmental Design (LEED) certification.

For additional information, please contact:

Arc Light Co. Affordable, LP • San Francisco, CA • (415) 348-4600 • arclightco@martinbuilding.com

Region 9 Brownfields Revolving Loan Fund Success Story
Townsend Street, San Francisco, CA

June 2012
www.epa.gov/brownfields


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