AvalonBay is pushing into San Francisco’s Hayes Valley neighborhood with the pending acquisition of Parcel P, the largest of the city-owned sites along Octavia Boulevard freed up when the Central Freeway was knocked down.

The apartment real estate investment trust, which has built 800 units in Mission Bay and is developing projects in Mid-Market and on Ocean Avenue, injects fresh capital into a 50,000-square-foot site where the city hopes to see 180 units built. The developer is working with Build Inc., a Hayes Valley firm that won a design competition to develop the property four years ago.

The redevelopment, the centerpiece of the 2007 Market-Octavia plan, has been stalled since the recession. Two years ago, the city temporarily leased the land to a group that created the Hayes Valley Farm, where volunteers raise honey bees and everything from parsley to echinacea. The community gardening group is hoping to move the farm to another lot in Hayes Valley.

The sloping site is bounded by Octavia Boulevard, Oak Street, Laguna Street and Hickory Street. The seven-building project would consist of two larger buildings: one on Octavia designed by Owen Kennerly and one on Laguna designed by Worden Architects. Pyatok Architects is designing four smaller structures: the Oak Street row houses and the Alley Houses on Hickory.

Challenging site

In taking on Parcel P, AvalonBay will have its work cut out for it. Thus far, city planners have been receptive to much of the scheme, but are pushing for less parking, the creation of a pedestrian-friendly “living alleyway” along Hickory Street, and courtyard units that have more exposure to light and air than the preliminary plans called for. Current plan calls for 126 parking spaces for the 180 units.

“While the current proposal is successful in many ways (quality design and appropriate massing, production of substantial housing, creation of new retail space along Octavia Boulevard) there are still key issues which would need to be addressed as we move forward through the review of the formal application,” stated planner Kevin Guy in a letter to AvalonBay.

Meg Spriggs, AvalonBay vice president of development, declined to comment because the city still owns the land and the planning process is in its preliminary stages.

Other projects on deck

AvalonBay’s foray into Hayes Valley comes as several other Market-Octavia parcels are finally getting closer to development. Pocket Development is planning to start construction in the first quarter on 401 Grove St.

The 63-unit project is being designed by David Baker + Partners and will be for-sale condominiums, according to principal Elizabeth Costello. Pocket Development bought the parcel for $4.4 million last year. Meanwhile, DM Development, which already owns two Hayes Valley sites with New York-based DDG Partners, has taken control of a third in the neighborhood: Octavia Gateway at 8 Octavia St., which is slated for 51 units. DM Development principal Mark MacDonald expects that 8 Octavia will be the first of the group’s trio of Hayes Valley projects to be built.

The prior developer, AkS Development and Stanley Saitowitz’s Natoma Architects, had filed plans on the development. DM Development and DDG Partners are moving forward with the Saitowitz design.

“We are very excited about the building. It will be a gateway to San Francisco, one of the first buildings that anyone arriving from the 101 will see,” said MacDonald. “We hope that it will demonstrate that San Francisco has an openness and progressiveness when it comes to architecture.”

In addition to Octavia Gateway, DM Development and DDG Partners own two other sites: the 50-unit 450 Hayes St. and the 36-unit 400 Grove St.

“There is certainly a lot of activity as far as planning the projects right now, and we are looking forward to bringing the vision of the Market-Octavia plan to fruition,” said MacDonald.