"The Developer has obtained Planning Department approvals to develop a mixed-use hotel project on the property with up to 170 hotel rooms, restaurant and bar spaces, office, retail, seismic and structural upgrades, and restoration of historical building features. To help finance construction of the hotel, the City would provide incentive payments equal to the actual General Fund TOT revenues generated by the new hotel, up to $40 million in net present value, for a period of up to 20 years."
"This is the first time I can remember in years when the city has actually offered a cash incentive to a private developer for a commercial project. The city used to do this under the Redevelopment Agency, and more recently has done similar things at Hunters Point and Treasure Island, but in those cases the money was used to reimburse the developer for providing public infrastructure like roads and sewers."
The city proposes advancing up to $40 million in net present value of future hotel tax (TOT) revenues over 20 years to a private developer to finance conversion of the historic Hearst Building into a mixed-use hotel. JMA Ventures, through Bespoke Hospitality, holds a long-term lease and obtained Planning approvals for up to 170 rooms plus restaurants, offices, retail, seismic upgrades, and historic restoration. The proposal represents a cash incentive rather than reimbursement for public infrastructure. San Francisco’s Sunshine Ordinance (Section 67.32) requires private subsidy recipients to provide financial projections and annual audited financials as a condition for receiving public subsidies.
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