A six-story development on Townsend Street is in limbo after an annual tax break for the development was rejected.
The Board of Supervisors Budget and Finance Committee voted 2 to 1 Wednesday to reject a proposal that would have provided a $62,296 annual tax break for the property slated for development at 166-178 Townsend St. The hoped-for tax break was being used to secure project financing.
How it would have worked is The City would have approved a Mills Act Historical Property Contract with the property owner to obtain property tax reductions. The contract would have been approved, and in exchange the property owner would maintain the existing historical one-story brick building.
The project includes a new 59,000-square-foot building, with up to 94 residential units, ground-floor retail, 45 parking spaces and the renovation of the existing historical brick exterior walls.
Supervisor John Avalos, who chairs the budget committee, said the proposal was a “gross application of the Mills Act” since it would “preserve only a small part of the original building, just the shell.”
Supervisor Sean Elsbernd supported sending the deal to the full board for a vote.
“I think there’s merit in this. I think on the scales of justice the positives outweigh the negatives.”
Patrick McNerney, head of 178 Townsend Properties LLC, which wants to develop the parcel, said the disapproval reduces their loan amount and makes the project unfeasible.
“That reduction creates a shortfall that we do not have the means to overcome right now,” McNerney said. “I don’t think anything gets stopped forever but it certainly stops [the development] for the foreseeable future.”