Mayor Edwin M. Lee

San Francisco is using private/public partnerships to transform formerly blighted areas into the city’s new economic engines, according to Mayor Edwin M. Lee on a recent visit to the Urban Land Institute. Mayor Lee visited with ULI staff in Washington, D.C., as the inaugural speaker of ULI’s Urban Innovators Series to commemorate ULI’s 75th anniversary. Lee presented a talk on “San Francisco Innovation Corridor.” Throughout the year, ULI will invite extraordinary individuals to meet with staff to share their work and to inspire ULI to think smart and think big about the future of responsible land use.

Large-scale redevelopment of districts such as Mission Bay, Candlestick Point/ Hunters Point Shipyard, and Treasure Island are creating needed real estate for employment clusters in life-sciences and clean technology to grow within the city, and are being developed along with mixed-use, mixed-income housing that are well connected to other parts of the Bay Area with multi-modal transportation options.

As San Francisco’s economic identity is changing, Lee has sought to engage this new generation of technology companies in civic life. “Whereas the traditional companies were B of A [Bank of America], Chevron, and PG&E,” Lee said, a whole new generation of technology companies and pharmaceutical companies are starting to spend in philanthropic ways, and need to fill millions of square feet of office space as they grow. They want to be in the Bay Area because our higher education institutions give them access to attractive labor, and we need to retain them as they grow.

The Mission Bay redevelopment, which includes a life-sciences technology cluster, is also home to the San Francisco Giants’ AT&T Park. This former rail yard was acquired and cleaned up by the city, and the ballpark was built with private funding. The stadium has anchored new market-rate and workforce housing; its more than 300 acres included about 10,000 residential units and 2 million square feet of office space, including enterprise cloud computing company , retailer Old Navy, Bayer, Pfizer, and a new research campus for University of California San Francisco.

About $1 billion in public transportation infrastructure helped attract development to the site, including the 3rd Street light rail, paid for in part with federal grants. The city also offered payroll tax exemptions for companies that located there.

At the 700-acre former Hunters Point Naval Shipyard, which closed in 1975, Lee said the city’s focus is on clean technology. This is the last open area of city, with beautiful views of the San Francisco Bay. U.S. House Minority Leader (and local congresswoman) Nancy Pelosi and Senator Diane Feinstein helped get $125 million in federal funding to cleanup this Superfund site, which is about 90 percent completed after a decade of work. The city is using tax increment financing to build the site infrastructure, and is beginning to attract investors with its private partner, Lennar Corporation. There is a site for the 49ers football team to build a stadium at Hunters Point, if the team does not leave the city.

The site will include 12,000 new residential units, including the redevelopment of Alice Griffith housing project, one of most notorious in the city for high crime and unemployment. Some 300 affordable units will be replaced and integrated with market-rate housing. As part of a community benefits agreement, Lennar will train current residents, none of whom will be displaced, to help with the construction. Lee called the $80 million community benefits package, which also includes $23 million in affordable housing funding, one of the city’s “proudest moments.”

Lee said the Treasure Island redevelopment deal was almost undone by the state’s action to eliminate redevelopment agencies in California. Projects with signed agreements were allowed to go forward, but Treasure Island had not yet been approved by the city. Private investors are nervous, but they will be protected thanks to the city’s use of infrastructure financing districts instead of a traditional redevelopment agency. Lee said it is not yet clear how the redevelopment will work in California under the state’s new plan to allow cities to buy back their authority.

Lee is working with a new industry technology advisory council to comprehensively reform the city’s payroll taxes, which have caused new companies to consider leaving San Francisco as they ramp up hiring. Negotiations with Twitter convinced the firm to relocate to a struggling section of Market Street in exchange for payroll tax exemptions as they grow from 250 employees to 3,000 in the next three years. Lifestyle is important to these employees as well, according to Lee.

“I actually asked the CFO, the CEO, and the President to leave the room and if I could talk to the workforce myself directly,” he said. Lee added that when he asked them what made them want to be in San Francisco, they cited the city’s diversity, its great food, its international feel, and its bike lanes.

The state’s attack on redevelopment agencies also had a silver lining: it forged closer relationships within the Bay Area between Lee, Oakland Mayor Jean Quan, and San Jose Mayor Chuck Reed.

“We have created alliances,” Lee said. “We said as a group we are not competing with each other. What we are trying to do is allow for the Bay Area to be a choice for the companies that want to locate in the Bay Area. For the most part, I think, we each offer very distinguishing features. What we want to do is not lose it [employers] to Los Angeles or to Tokyo or to China.”

Lee was appointed interim mayor in January after former Mayor Gavin Newsom resigned to become California’s lieutenant governor, and is the first Asian American mayor in San Francisco’s history. He was San Francisco’s Public Works Director under Mayor Willie Brown, and served as the City Administrator for six years under Newsom.