Feds Pledge $3.4B for Rail Link in Downtown San Francisco

The Federal Transit Administration has agreed to provide $3.4B in funding for a rail link that will connect Caltrain—and, eventually, a new high-speed rail line to Southern California—with the multimodal Salesforce Transit Center in downtown San Francisco.

The massive project, known as The Portal, would extend the Caltrain commuter rail line by 1.8 miles, including by digging a 1.3-mile tunnel underneath downtown.

The Portal, which will take almost 10 years to complete, also will construct two new underground stations. It will connect Caltrain service at Fourth and King street to a six-level underground endpoint at the Transit Center.

The federal commitment, which requires local matching funds, represents 41% of the current estimated cost of the project, according to a report in the San Francisco Examiner. Alan Van de Water, executive director of the Transbay Joint Powers Authority (TJPA), reported at a board meeting last week that the project now has more than two-thirds of the estimated cost covered.

Transbay spent $2.3B building the Salesforce Transit Center, the multimodal facility south of Mission Street that serves eight transit systems. The center also features retail shops and a 5.4-acre rooftop park.

TJPA has allocated $340M to buy 10 properties and 18 easements that will be needed to make way for The Portal, the report said.

In February, TJPA indicated that it is prepared to seize the specified properties using eminent domain if owners do not agree to sell to make way for the rail connection, according to a report in the San Francisco Business Times.

The list of downtown properties targeted by TJPA includes a 41K SF office building at 180 Townsend Street that traded in 2022 for what was close to a record price, $71M, which translates into $1,731 per square foot. The Sobrato Organization purchased 180 Townsend.

The Caltrain line currently ends at the Fourth and King Street station in the SoMa section. The properties that Caltrain wants to acquire, which include seven buildings and a surface parking lot, sit above the planned route of the underground rail connection. They will become unsafe to occupy when construction of the rail line begins.

TJPA estimates that its acquisitions could displace as many as 53 businesses and/or landlords. The agency will cover moving costs, as well as re-establishment costs up to $25K for eligible small businesses; businesses also can opt to receive a lump sum of $40K in lieu of moving and re-establishment payments, the Business Times report said.

In addition to 180 Townsend St., the properties designated for acquisition by Transbay include 191 Second St., a 28K SF office building; 181 Second St., a 20K SF office building; 217 Second St.; a 27.5K SF office building; 205-215 Second Street, a 15.5K SF office building; 689-699 Third Street, a 6.2K SF retail building; 580 Howard Street, a 15-unit loft complex; and 201 Second Avenue, a surface parking lot.