A market-rate housing project at 321 Florida St., approved five years ago, is finally set to break ground in the Mission District next month. Developers DM Development and Denver-based Ascentris closed a $61.7 million construction loan from PNC Bank, Urbanize SF reported.

The building

The nine-story building will have 152 homes, including 15 affordable units, above parking for 39 cars. It will also have about 10,000 square feet of amenity space, including a lounge, a fitness center and a terrace deck. Opening is planned for late 2028.

Urbanize SF said the project is billed as only the second market-rate building with more than 28 units to break ground in San Francisco since 2023.

What changed since 2021

The version the Planning Commission approved in 2021 had 168 units, 23 of them affordable (nearly 14%), Mission Local reported. Now 15 of 152 are affordable, just under 10%, after the city lowered its inclusionary housing rate. The affordable units are for households earning 30% to 120% of area median income.

DM Development CEO Mark MacDonald blamed the delay on interest rates, which began rising in 2022.

Expired deals with neighbors

Before approval, the developers signed agreements with community groups, Mission Local reported. They included:

  • $2 million toward buying 2675 Folsom St. for affordable housing
  • A 1,500-square-foot ground-floor gallery for the Community Arts Stabilization Trust
  • A new wall and $25,000 for the play area at Sweet Peas preschool next door
  • $25,000 for Friends of Franklin Square, plus up to $2,000 a year for three years for park cleanups

Those agreements expired in 2023. DM Development said in a statement that it had to change the project, including its community partnerships, to make financing work, and that talks with partners are ongoing. Instead of the $2 million for 2675 Folsom, the company said it now plans to give $500,000 in seed funding to Cultura y Arte Nativa de las Americas, led by longtime Mission organizer Roberto Hernandez, and to match up to $500,000 more raised at a fundraiser.

Sweet Peas director Samantha Dionne said a DM Development employee called her about six months ago to say the company planned to make good on its commitment. Jolene Yee of Friends of Franklin Square said the developer has sponsored the group's last 12 cleanups and told her it intends to renew the agreement. Catherine Nguyen of the Community Arts Stabilization Trust said the group has not spoken with the developers since 2022.