Developer constructs empire by building ties with community
A half mile south of San Francisco City Hall, developer Related California’s latest project charges up the sky.
The nearly 400foot tower at 1500 Mission St. is the first in a new district of planned highrises, with dizzying views of Sutro Tower and most of downtown. It has 550 apartments, 20% of them affordable, and leasing will start this spring.
At ground level is a massive seal of the city and county of San Francisco. That’s because Related is also building new offices for the city’s Department of Building Inspection and Planning Department — the very agencies that sign off on its projects.
It speaks to the symbiotic relationship between the city and Related, which has grown to become one of the largest builders in the state. It has built or proposed more than 5,000 homes in San Francisco and 4,000 more in Silicon Valley and the East Bay. It also has major Southern California holdings and is moving to expand to the North Bay and Sacramento.
Bill Witte, founder and CEO of the 30yearold Irvine company, is no stranger to government. He was a top housing aide under Mayors Dianne Feinstein and Art Agnos, and also worked for the U.S. Department of Housing and Urban Development.
“I think a lot of developers understandably say, ‘You know, I just don’t want to have to deal with more government.’ Well, we’re accustomed to it,” he said.
Witte has deftly navigated city and neighborhood politics, partnering with the city and nonprofits, and defusing most opposition by modifying projects.
“By and large, we’ve avoided major fights, because even people who disagree with us, we’ll listen to them, and we’ll take some of their ideas,” he said. “People have to talk to each other. You’re developing in an urban area.”
Only two projects in the company’s history have died, Witte said: one in Newport Beach and a San Francisco tower on a cityowned site at 30 Van Ness Ave., across the street from 1500 Mission. Related’s $80 million offer to buy the site was voted down after the 2015 election of Supervisor Aaron Peskin, who wasn’t satisfied with the deal.
But Related is now working with Peskin on another public site, where it plans to replace a squat Financial District fire station with a new station, 200room hotel and offices. Project fees will help fund affordable housing in nearby Chinatown.
Peskin said that despite the 30 Van Ness vote, he gets along with Witte and praised the developer’s ingenuity. “They came up with a remarkably creative solution that, when done, will build dozens of units of affordable housing in Chinatown,” Peskin said. “They are very smart and creative folks.”
Unlike most housing developers, which focus on either marketrate or affordable housing, Related California does both. That approach mirrors its parent company, New York’s Related Companies. Founded by Stephen Ross in 1972 as an affordable housing builder, it’s since grown into a global enterprise that owns and manages more than $60 billion in projects, including Hudson Yards in Manhattan. Witte said the name comes from Ross initially starting separate companies in housing, property management and finance that were all “related.”
Ross is also majority owner of the Miami Dolphins, and Related controls SoulCycle and the boutique gym Equinox. His New York fundraiser for President Trump triggered SoulCycle and Equinox boycotts last year, but the backlash didn’t appear to affect the company’s real estate projects.
To build 100% affordable housing, Related California often partners with local nonprofits such as Mercy Housing and Chinatown Community
Development Center. Even its four major San Francisco marketrate projects to date — 1500 Mission, the Avery in Transbay, Mason on Mariposa on Potrero Hill and the Paramount in South of Market — all have 20% affordable housing or more.
That has helped it win political support.
“If you’re a longterm owner, like we are of all of our properties, it is good for the brand. And as a forprofit (company), I think we feel a special burden to prove to people that we’re doing good developments here,” Witte said. “It’s a little harder when we’re at a community meeting or with a city to demonize us.”
Affordable housing projects still generate some money through developer fees and rental income, though they aren’t nearly as lucrative as marketrate projects, Witte said. “It’s not a business for home runs. It’s singles and doubles.”
As a private company, Related California doesn’t disclose its financial performance, but Witte said it’s able to scale in part by using its parent company’s capital, which helps it weather downturns. It also uses government funding to help build affordable projects.
Agnos, his former boss in City Hall, said Witte is one of the few developers who don’t pursue profit above all.
“Bill, in my book, combines the very best of public service and used the values and principles of public service to do good in the private sector,” Agnos said. “A lot of other developers overreach. He is the exception.”
Related still has to grapple with San Francisco’s lengthy approvals process. Approval for 1500 Mission took about three years, even though it had future city offices and no opposition, Witte said. At times, permits would be stuck for months, he said.
Related’s biggest project in San Francisco is not a luxury skyscraper. It’s the Sunnydale redevelopment in Visitacion Valley, replacing 775 units of public housing and adding 995 homes, in partnership with Mercy Housing. The project includes a new community center and new streets and utilities, adding millions of dollars in costs, in an effort to transform an area that has grappled with poverty and high crime.
“They’re willing to do hard projects,” Doug Shoemaker, president of Mercy Housing, said of Related. “I think a lot of it has to do with understanding what cities need, what departments need.”
Shoemaker said Witte doesn’t try to use power to force through projects, but is receptive to the community.
“I think people are comfortable working with him,” Shoemaker said. “As far as forprofit firms go, they’re our partners for a reason. There’s tons of alignment.”
Some of Related’s partners aren’t in the real estate business at all. Across the street from 1500 Mission, Related is proposing a tower with the French American International School, which would get a new facility. In East Oakland, it’s worked with Acts Full Gospel Church to build affordable housing.
Related has had some missteps. It failed to secure a grocery store at its Avery tower in Transbay, a city requirement that was later scrapped.
Its $8 billion project in Santa Clara near Levi’s Stadium was caught in the crossfire of dueling lawsuits between San Jose and Santa Clara over growth, which Witte attributed to “historic bad blood,” leading to delays. But litigation was settled last year, and the project is set to begin construction this year.
In comparison, Related’s New York megaproject Hudson Yards has seen bigger fights, including a dispute with construction labor unions and, last week, backlash over a potential wall next to the High Line elevated park, though Related denies it was ever considered.
Witte also picks his battles. He said for now, the company isn’t pursuing any marketrate housing projects in the Mission, where other developers have been caught in yearslong fights with community groups.
At Related’s 299unit project at 1601 Mariposa St. on Potrero Hill, community criticism led to changes including new pedestrian passageways, a reduction in mass, a higher affordable housing rate, and $2 million for improvements at neighboring Jackson Park.
J.R. Eppler, president of the Potrero Boosters Neighborhood Association, said community engagement was positive.
“The process we had with Related, while lengthy, was cordial and respectful,” Eppler said. “Bill was an old hand at San Francisco politics, and it showed in how he was respectful for the neighbors.”
Related’s project was approved in 2015 and is nearing completion. Other developers in the neighborhood haven’t fared as well. A few blocks away, Potrero Hill groups sued an approved housing project at 901 16th St.
In an unusual move, Witte met with the neighbors during the approvals process, a role that’s usually fulfilled by a project manager, not the company CEO.
“We’re in it for the long haul, and I can’t hide. You want to get invited back,” he said.