Quiet payouts remove opposition to India Basin development

In October 2018, the San Francisco Board of Supervisors batted down an appeal of a plan to create more than 1,500 new homes in India Basin, a small neighborhood south of Islais Creek.

In response, Mikhail Brodsky, owner of the nearby Russian bathhouse Archimedes Banya, also sued in an effort to block developer Build Inc.’s plans. He argued that construction would pose an environmental threat to his spa patrons.

Earlier this year, Brodsky and the developer quietly settled the matter out of court, keeping the terms of the agreement private.

Now the San Francisco Chronicle has the figures: Build Inc. reportedly paid $100,000 to the bathhouse and then another $100,000 to a business school Brodsky operates in Oakland. The developer also promised a few other favors, like a letter of support for potential expansions at the bathhouse.

In exchange, Brodsky dropped the suit.

Such payouts are not uncommon; protracted legal hurdles created by CEQA challenges—whether motivated by NIMBYism or legitimate environmental concerns—are not only expensive but can potentially smother a development deal by stringing it along to the point that backers get cold feet.

In the end, a few hundred thousand dollars proved a marginal cost to make the problem go away.

Since most of these agreements are rarely made public, it’s unclear how often such things happen, but backroom deals are an open secret in real estate development.

For the record, Brodsky says he still believes that the India Basin plan is bad for both the neighborhood and his business. He accepted the deal because he believed it was the best result he could realistically hope for.

Other neighborhood groups also object to the India Basin development on environmental grounds and have evidently not taken similar deals, as challenges still hold up construction.

If and when the project finally moves ahead, most of the build-up will take place on “bay-fill vacant land” around 700 Innes Avenue. The proposal includes the creation of a new 1.8-acre park and rehabilitation of two existing shoreline parks.

In all, 394 of the homes—about 25 percent of the the proposed total—will be earmarked affordable housing.