The Port Commission approved up to $38 million in net present value over 20 years on 14 July 2026 to restart a hotel that had searched for financing since 2021. The same vote cut the rent. The hotel adds 164 rooms to the Embarcadero comp set at a 2029 opening.
The public share is measured off room revenue
The incentive agreement is calculated as a percentage of the transient occupancy tax the city actually receives from guest rooms at the new hotel. The staff report states that the $38 million figure is for measurement. Port staff will seek appropriation from the city general fund for the payments. The Port Harbor Fund is not a source of funds.
The Port’s record publishes no room rate, no room mix and no day-use or hourly offer for the hotel.
The gap the vote closed
Port staff and the developer negotiated against a measured shortfall. Increased project costs left a funding gap of approximately $30 million as of mid-2025. A projected $14 million gap remained after the proposed incentive payments. Construction costs had risen from $164 million in 2019 to $182 million.
The capital stack totals $182.4 million. Helix debt is $90 million, C-PACE financing $60.4 million, limited partner equity $16.6 million, sponsor equity $9.9 million and EB-5 private equity $5.5 million. The lender raised its loan from $60 million to $90 million to close the remainder.
The rent reduction
Percentage rent falls from the 2019 range of 3.5 percent to 6.5 percent to a range of 2 percent to 4.5 percent. Minimum base rent floors start at $0.5 million a year in lease years one through four and rise to $8 million a year in lease years 51 through 66. Nominal rent over the term falls from $433 million to $367 million. The net present value of rent payments to the Port falls from $54 million to $39 million at a 6 percent discount.
The day-room shelf in this city
hotelSlots lists 562 San Francisco hotels for day-use requests in its San Francisco directory, read on 24 September 2026. The page header reads "Up to 75% Off Nightly Rates" and "$0 Fees". The directory renders "Showing 24 of 562".
Engine publishes an average nightly rate of $165 in San Francisco across 3.1 million public rate observations from May 2024 to April 2026. The figures are par rates, the cheapest public price at the time of each search. The page’s monthly table runs from $129 in December to $197 in March, a spread of 35 percent. San Francisco ranks 18 of 50 markets in that dataset, 11 percent above the $148 median.
What the file does not carry
The Port’s record publishes no construction start date, no room rate, no room mix, no meeting-space total and no day-use or hourly offer. The close of escrow has moved to June 2027. Construction runs through 2027 and 2028, with a grand opening in 2029. The Board of Supervisors has not voted.