From FINANCIAL TIMES (ft.com)

Neighbourhood of ironies
By Kevin Allison
Wednesday Jan 16 2008 23:55

Between Interstate 280 and San Francisco's eastern waterfront, past and present exist side by side in Dogpatch, a nine-block stretch of warehouses and 19th-century workers' cottages. This gritty, blue-collar patch of San Francisco has, over the past five years, seen an influx of refugees from nearby Potrero Hill, a formerly working-class neighbourhood and artists' refuge now well settled by dotcom yuppies.

The result is an area where some of the city's last vestiges of light industry, such as print shops, cling to life beside wine bars and trendy cafés built to serve the burgeoning ranks of Dogpatch's loft-dwelling professional class.

"This is a neighbourhood of ironies," says Bruce Brugmann, editor of the San Francisco Bay Guardian, the city's leading progressive weekly newspaper, which moved its offices to Dogpatch in 2002 from Potrero. "You've got the Hell's Angels' San Francisco club house down here and Dennis Herrera, the city attorney, living on the next block. Of course, he's always quick to say they're great neighbours." The Hell's Angels might have a rogues' reputation elsewhere but their presence in Dogpatch is a source of local pride. Residents say the bikers keep to themselves but are also seen to benefit the community by discouraging vandalism and crime.

The area has been lucky: it escaped the destruction that ravaged much of San Francisco after the disastrous 1906 earthquake and fire. As a result it is home to some of the city's oldest buildings, including the Irving M. Scott School, built in 1895.

The neighbourhood was designated a historic district in 2003 and reminders of its tough industrial past linger on, even as many of the textile factories and canneries are slowly replaced by luxury housing."Dogpatch used to be a whole lot grittier," says Herrera. "When I first bought here 16 years ago, I wouldn't even say it was a place in transition. It had beautiful old Victorian homes but a lot of vacant lots. It was a boondocks feel. Now it's really the crossroads for the future of San Francisco. We've had a tremendous influx of people."

Rising rents in Potrero have helped to make Dogpatch a destination for buyers. But other draws include the construction of a research campus for the University of California in Mission Bay and the opening of San Francisco's latest light rail line along 3rd Street, Dogpatch's main traffic artery. Some larger lofts in Dogpatch sell for about $480 per sq ft - well below the $600 average for San Francisco.

"Dogpatch was a forgotten place for a very long time," says Chris Lim, a partner at Climb Real Estate, a local agency. As a result, he says, "there are a lot of warehouses positioned at prices that are still attractive."Single-family homes, including cottages built in the late 1800s by the workers who toiled along San Francisco's now largely disused eastern waterfront, account for only a small portion of the housing stock. Such properties rarely come up for sale. Instead, a smattering of two- to three-unit condominiums and a number of bigger loft developments make up the bulk of the area's available housing. The biggest new development is Esprit Park, a complex of 142 units being built at the site of the former headquarters of the Esprit clothing company. When completed, it will include eight buildings, two of which were formerly used as a winery.

While some San Francisco neighbourhoods are frequently shrouded in fog, Dogpatch's situation on the city's far eastern edge means that it enjoys some of the best weather in town. According to Lim, temperatures in San Francisco's microclimates can vary by 15°C across just a few city blocks and sunnier areas can be a big draw for potential buyers. Esprit Park's first homes are expected to open late this winter and will be a mixture of one- and two-bedroom lofts featuring hardwood floors, underfloor heating, and other high-end fittings.

The development sits adjacent to a large open green space, originally part of the Esprit campus and now a public park. Two-bedroom lofts are listed for between $1m and $1.28m, with one-bedroom units on sale for $625,000.

Older lofts, built during a mild wave of gentrification that took place during the late 1990s tech bubble, also command prices in the high six-figures. A one-bedroom, three-level home at 1207 Indiana Street, for example, recently listed for $749,000. Such spaces have proved a magnet to self-employed professionals - including writers, photographers and designers - taking advantage of special "live-work" zoning enacted during the boom days, which allowed buyers to take out residential loans for commercial space.

While prices are above average for one- and two-bedroom properties in San Francisco as a whole, the properties in Dogpatch are also larger than typical city dwellings. As a result, prices per sq ft remain reasonable.

Like many parts of this most liberal of US cities, Dogpatch is home to an active and vocal neighbourhood association that takes a strong interest in new development. But residents also seem unusually open to change.

"The core group of people that live here are more expansive in their thinking," says Susan Eslick, a 12-year Dogpatch resident and president of the Dogpatch Neighbourhood Association. "It's not really a 'not in my back yard' type of neighbourhood."

Developers, including Build Inc, the developers of Esprit Park, have taken an active role in the community to insulate themselves from the backlash that has faced developers in other gentrifying neighbourhoods. "They've really raised the bar as far as what to expect from a developer," says Eslick. "They come to every single one of our meetings." Though Esprit Park will nearly double the amount of Dogpatch housing stock, she says, even a change of this magnitude is not seen as cause for concern: "I think people believe it's going to be good for us."

But growth in Dogpatch has not been without controversy. A neighbourhood group formed during the late 1990s to protest about plans to build a massive shelter for the homeless has been involved in a long-running battle to close the nearby Potrero power plant.

One lingering concern is that antiquated zoning rules could result in a dearth of green space as new developments begin to creep in. Eslick says the rules allow the ground floors of new buildings to cover entire lots, without any allowance for green space.

To solve the problem, Dogpatch is considering forming a "green trust" that would buy open space using money contributed by developers each time a new unit is sold.

Aside from these worries, residents are also anxious about the potential impact of the University of California's new Mission Bay research campus, part of a comprehensive plan to reinvigorate the neighbourhood just blocks to the north.

The campus, which welcomed its first researchers in 2003, is expected to be the eventual home of more than 9,000 scientists, teachers and students.

While it is likely to provide a source of new jobs for Dogpatch residents, there are worries about increased traffic and the risk of gentrification.

Meanwhile, some of San Francisco's trendiest restaurateurs have begun to catch on to the area's growing appeal.

The owners of Slow Club, a Potrero brunch spot, are opening a new restaurant called Serpentine in the heart of Dogpatch near the light rail stop at 22nd Street and Third. Other additions to the culinary scene include Piccino, a latte and pizza joint just up the road from the Hell's Angels' clubhouse. Yield, an organic wine bar, has set up shop along 3rd Street, just round the corner from the Dogpatch Saloon, one of the neighbourhood's original watering holes.

As vibrant as the streets have become during the day, the area still lacks a proper nightlife (the exception is Café Cocomo, a cavernous Salsa club tucked away on the neighbourhood's far south side). Nevertheless, as buyers search for some of the last bargains within San Francisco's city limits, this once-forgotten part of the city looks well placed to continue its revival.

Climb Real Estate, tel: +1 415-321 7072; www.climbsf.com