Lendlease Pauses San Francisco Tower In Another Sign of Real Estate Woe | Engineering News-Record

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The post Lendlease Pauses San Francisco Tower In One other Signal of Actual Property Woe appeared first on DAILY SAN FRANCISCO BAY NEWS.

Dive Brief:

• Lendlease’s rough 2023 continues. The Australia-based builder and developer hit pause on Hayes Point, a $1.2 billion, 47-story mixed-use tower in in San Francisco, CEO Tony Lombardo told investors during an earnings call Monday.
• The project, originally set for completion in 2026, is the company’s largest investment in the U.S., according to Reuters. If finished, the project will hold 300 condos and over 300,000 square feet of office space, according to the San Francisco Business Times.
• The stall follows Lendlease laying off about 10% of its global staff — or about 740 workers — in mid-July. At the time of layoffs, an official statement from Lombardo claimed the worker reduction wouldn’t impact project delivery dates.

Dive Insight:

In its rocky earnings report released Monday, Lendlease announced an AU$232 million statutory loss ($150 million USD). Nonetheless, the company claimed its financial position was stable in its 2023 annual report, with AU$22.9 billion of work in progress and AU$8.7 billion in external construction backlog revenue. The latter represented a 17% drop from its full-year 2022 results.

Lombardo addressed Hayes Point in the earnings call, stating the project was paused to “de-risk” the investment, which has cost AU$260 million to date, until Lendlease secures more tenants or a capital partner.

“So until we get one of those two things to come to fruition, we won’t restart,” Lombardo said. “From a capital perspective, we still see good returns in that project. So we don’t feel at the moment there’s any risk of impairment.” 

Lombardo said that of the work Lendlease launched this year, Hayes Point was unique in that it didn’t have outside capital backing the project.

Within the U.S., the San Francisco property market has been hit particularly hard. Following remote work trends that started during the pandemic, office vacancies have remained persistently high. 

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SAN FRANCISCO (AP) — San Francisco supervisors voted Tuesday to put the brakes on a controversial policy that would have let police use robots for deadly force, reversing course just days after their approval of the plan generated fierce pushback and warnings about the militarization and automation of policing.

The Board of Supervisors unanimously voted to explicitly ban the use of robots in such a fashion for now. But they sent the issue back to a committee for further discussion and could vote in the future to let police use robots in a lethal manner in limited cases.

The board voted last week to allow the use of deadly robots in extreme circumstances. The police department said it had no plans to arm the robots with guns but wanted the ability to put explosives on them and use then to contact, incapacitate or disorient dangerous or armed suspects when lives are at risk.

The initial vote thrust the famously liberal city into the center of a debate about the future of technology and policing, with some saying arming robots was a step too close to something one would see in a dystopian science fiction movie. Though robot technology for policing has become more widely available, departments across the country have rarely used it to confront or kill suspects.

Three supervisors who rejected the policy from the beginning joined dozens of protesters Monday outside City Hall to urge the board to change course. They chanted and held signs with phrases like “We all saw that movie… No Killer Robots.”

Supervisor Dean Preston was among them, and on Tuesday he told his colleagues the public hadn’t been given enough time to voice their concerns about such a pressing issue.

“The people of San Francisco have spoken loud and clear: There is no place for killer police robots in our city,” he said in a statement after the vote. “We should be working on ways to decrease the use of force by local law enforcement, not giving them new tools to kill people.”

The vote was the result of a new state law that requires police departments to inventory equipment including certain guns, grenades, armored vehicles and battering rams and to seek explicit approval for their use. So far, only San Francisco and Oakland have discussed lethal robots as part of that law. Oakland police wanted to arm robots with shotguns but backed down in the face of public opposition, instead opting for pepper spray.

Some San Francisco officials wanted to proceed with allowing robots to use deadly force in certain cases, arguing nothing substantive had changed to warrant a reversal. But the vote to advance the broader police equipment policy — including the ban on lethal robots — passed unanimously.

It still allows police to use robots to check out potentially dangerous scenes so that officers can stay back.

“Having robots that have eyes and ears and can remove bombs, which happens from time to time, is something that we want the police department to do while we continue to have this very controversial discussion,” said Supervisor Aaron Peskin, who brought forward last week’s motion around the use of robots.

The new policy needs another vote to take effect.

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Amazon said Tuesday it will pause work on a proposed last-mile warehouse in San Francisco’s Showplace Square after the Board of Supervisors unanimously passed legislation that placed an 18-month moratorium on all new parcel delivery services in the city.

In a statement a company spokesman said, “We will continue to evaluate our long-term use of the site, and in the short-term we will work with our neighbors to look at ways to use the location to serve the community.”

The company’s announcement came after the board voted 10-0 to back the moratorium, which was crafted in part as a response to Amazon’s plan to build a 725,000 square foot warehouse at 900 7th St.

Supervisor Aaron Peskin recused himself from the vote because he owns stock in Amazon.

While the board didn’t discuss the legislation at Tuesday’s meeting, the vote was preceded by a fiery rally in front of City Hall at which organized labor, environmental watchdogs, and residents of San Francisco’s southeast neighborhoods denounced Amazon’s expansion plans.

With an 18-wheeler emblazoned with a “Teamster” banner as a backdrop, Jason Rabinowitz, president of Teamsters Joint Council 7, said “the type of jobs we don’t need to have are the Amazon style poverty jobs that are underpaid, unsafe , include no rights at work.”

“Good jobs uplift our community,” he said. “Amazon style poverty jobs drag us all down.”

Folks attend a press conference at Civic Center Plaza that urged passage of temporary moratorium legislation on Amazon and other parcel delivery service facilities in San Francisco.

Yalonda M. James/San Francisco Chronicle

Board of Supervisors President Shamann Walton, who represents the neighborhood where the logistics center would be located, said that if Amazon wants to build in the district it will have to negotiate a community benefits package similar to deals struck with major waterfront developers.

“You can go and ask Pier 70. You can ask the (Potrero) Power Station. If you are going to come into our neighborhoods you are going to talk to the people in the neighborhood. You are going to provide them with community benefits,” he said.

The legislation passage is a big win for a broad coalition of organized labor, including the Teamsters, the United Commercial Food Workers, Service Employees International Union and the Building Trades Council.

Jim Araby, strategic campaign director with the United Food & Commercial Workers, said the legislation would “Create the process necessary to hold large corporations like Amazon accountable to the community, the workers and the elected officials.”

“This legislation is the first step to make sure there is an actual process, that you can’t just plop down a 700,000 square foot in the middle of a community and say we are going to buy you off with five dollars and an ice tea ,” he said.

JK Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen

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