SF Supervisors Review Amended Deal to Modernize Century-Old Potrero Bus Yard

At 2500 Mariposa Street in the Mission District, where a bus yard has stood for over a century, San Francisco's Board of Supervisors took up an amended $612 million project agreement on March 24 to finally replace the aging Potrero Yard with a modern, earthquake-safe facility capable of housing 68 percent more electric trolley buses than the facility it replaces.

The project agreement legislation cleared the SFMTA Board of Directors on March 3 and was unanimously approved by the Board of Supervisors Budget and Finance Committee on March 18, before landing before the full board. Public comments were accepted at the Budget and Finance Committee meeting on March 18; under legislative rules, no public comment opportunity was available at the full Board of Supervisors hearing.

After months of negotiations, the SFMTA and Potrero Neighborhood Collective reached $612 million as the final fixed price for the new bus yard facility. Under the financing structure, the project agreement provides for a 30-year term commencing after substantial completion, two milestone payments of $65 million at or around financial close and $250 million during construction, a $5 million development fee payable after substantial completion, and annual availability payments projected to start at approximately $33 million, with an estimated cumulative total of approximately $980 million.

The deal's structure leans heavily on the developer to bridge SFMTA's budget constraints. Developer partner Potrero Neighborhood Collective will pay the upfront construction costs, with the SFMTA repaying over the 30-year term. That arrangement has taken on added urgency: the predevelopment agreement with PNC expires on March 31, 2026, and if the deal expires, it would be hard to find a new deal that offers similar financing options.

The project aims to replace Muni's 110-year-old bus yard with a modern, earthquake-safe facility, even as Muni faces a budget deficit of about $307 million as one-time pandemic relief funds run out. The yard is seismically unsafe, puts lives at risk, and hinders SFMTA's ability to respond in the event of a disaster; the 111-year-old facility is outdated, and aging equipment and the lack of space create challenges for staff.

The new four-story facility will include improved maintenance infrastructure and store 68 percent more electric trolley buses. Starting February 14, the bus routes previously served from Potrero Yard have been served from other Muni divisions, including the 5, 5R, 14, 22, 30, and 49. Should the project win the necessary approvals, the remainder of 2026 will include SFMTA's move-out from the yard, additional site due diligence, and removal of overhead lines. Webcor, the selected prime contractor, would begin demolition of the existing facility in Q1 2027, with construction scheduled to be completed in 2030.

The housing component of the deal has shrunk significantly from earlier visions. Community members in the Mission District had long advocated for a prior plan that included 465 housing units; last October, SFMTA announced it was dropping a podium structure that would have allowed approximately 365 units above the bus yard, citing financial constraints. The final project allows for about 100 units of affordable housing on Bryant Street, proposed for households earning up to 80 percent of Area Median Income, with unit sizes ranging from studios to three-bedrooms; construction of the housing is dependent on the housing developer's ability to secure funding.

Roberto Hernandez, a working group member since the project's inception who said he joined because he knew mechanics and bus drivers from the yard, told the SFMTA board that housing was a priority and expressed frustration upon learning last October of the reduction in units.

The Board of Supervisors' December 10, 2024 endorsement resolution (File No. 241136 / Resolution No. 625-24), sponsored by then-Mayor Breed and Supervisors Walton, Mandelman, and Ronen, had previously greenlit the key terms of the Infrastructure Facility Design-Build-Finance-Operate-Maintain Agreement. The March 24 vote brought the finalized, amended contract before the full board for binding approval, with the clock running down to the March 31 predevelopment agreement deadline.