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Millions in funds to help Van Ness businesses during construction remain unallocated

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With construction work stretching into 2021 before San Francisco completes the Van Ness Improvement Project, supervisors are worried how the delayed project is impacting businesses along the corridor.

Peter Gabancho, the project manager for the Van Ness Avenue project, said utility work has complicated and compromised the original opening of The City’s first bus rapid transit system from late 2019 to late 2021. Currently, the $309 million project is about 28 percent complete.

Gabancho updated city supervisors on the project at Tuesday’s San Francisco County Transportation Authority board meeting. Not much has changed since his last report to the SFCTA with the project still delayed by 564 days.

The delayed project has bothered supervisors, who sit on the SFCTA, because they worry that businesses will not survive over the next two years along the Van Ness Avenue corridor.

Supervisor Aaron Peskin, who chairs the SFCTA, urged the transit agency to quickly create a process on how they plan to distribute a $5 million small businesses fund that was part of the transit agency’s overall $38 million they received from the Education Revenue Augmentation Fund:

“Let’s not take too long in analyzing how we’re going to get that money out the door and help those folks.”

Gabancho said in his presentation that of the 250-plus businesses operating on Van Ness Avenue, 10 had requested help from the Office of Economic and Workforce Development. Out of those 10 businesses, 1 business had closed.

Four businesses that did not request services from The City had closed with two of these businesses closing due to reasons unrelated to the construction, said Gabancho.

Supervisor Sandra Lee Fewer said she wanted the SFMTA to come back with a more comprehensive report on how construction has impacted businesses, especially now that the project is delayed by 564 days.

“What I’d like to see is an estimated loss of revenue due to construction. Also, the estimated cost of lost revenue they think might be projected since this project is two-year delayed.”

Supervisor Ahsha Safai said he would interested in seeing the gross receipts from small businesses over the last five years, including the time period from when construction began two years ago to now.

Both Safai and Fewer agreed that the initial $5 million may not be enough to help all of the businesses, but said it was start at least.

Jonathan Rewers, who leads the SFMTA’s construction mitigation impact program, said the transit agency will seek the help from The City’s Controller’s Office to help with the comprehensive.

So, what’s causing the delays?

As previously reported, Gabancho said unforeseen incidents occurred during the utility phase of the project, which included finding abandoned utilities, working around underground structures not previously known, difficulty working around rocks and tree roots, and rainy weather.

Also, crews found that there was no concrete base underneath Van Ness Avenue. It was just asphalt and dirt, said Gabancho.

City streets in general underneath them have a three-inch layer of asphalt over a 10-inch layer of concrete, but because Van Ness Avenue is a highway under the jurisdiction of Caltrans, the same standard was not applied.

Crews had to install a new concrete base, which partially reflects in the delay in the project, said Gabancho.

The SFMTA is seeking ways to make up for lost time, including seeking permits to extend work hours, seeking to close a lane of traffic from Caltrans on the weekend, and potholing in advanced at areas where crews might encounter problems.

Supervisors requested the transit agency come back to its April 23 meeting with the comprehensive report on businesses impacts.

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