UC San Francisco just saved a cool $7 million.
That's because a property-tax deal made with The City for a planned development in Mission Bay across the street from the proposed Warriors site was approved Tuesday by the Board of Supervisors.
But the deal -- which cut $7 million from the school's in-lieu fees if paid upfront -- didn't sit well with two supervisors: Malia Cohen, whose district the project sits in, and London Breed. Both voted against the measure.
"I wasn't trying to take UCSF down. I was trying to make a point," Breed said about UCSF not paying its fair share for infrastructure and transportation in Mission Bay. "They just weren't going to get a free pass from me in this particular instance."
Under state law, universities are not obligated to pay property taxes. But in order to build in Mission Bay, a redevelopment area still governed by a master plan, UCSF has to pay in-lieu fees equivalent to property taxes -- approximately $39 million -- until the development area dissolves in 2043.
But in negotiations, the school offered to pay all its in-lieu fees upfront on the property if it could get a $7 million cut from the price tag: $32.1 million for infrastructure and $21.9 million for below-market-rate housing, both required by Mission Bay development agreements.
In the end, that's what they got.
"It is in San Francisco's best interest to collect taxes over a 30-year period as opposed to one large sum?" Cohen asked. "We may lose up to $7 million on the deal and we don't have a guarantee from UCSF that they are going to consolidate their facilities in Mission Bay."
The offer pleased officials at the Office of Community Investment and Infrastructure, who oversee Mission Bay, because it allows them to begin construction on several housing developments now instead of waiting for the payments to come over the next 30 years.