The project, proposed by Align Real Estate, would replace the existing grocery store at 11 and 15 Marina Boulevard with towers reaching 22 and 18 stories. The development includes a new Safeway at the base and 86 affordable homes. The city granted approval under Assembly Bill 2011, a state law that allows qualifying housing developments on commercial land to receive streamlined, ministerial approval without the public hearings and environmental review normally required under the California Environmental Quality Act.

Align principal Dave Balducci called the approval an important milestone, saying the project would bring new housing to a neighborhood that has seen relatively little development while providing an updated grocery store. The company has not disclosed whether it has secured financing or when construction could begin. High development costs remain a significant obstacle for San Francisco housing projects, with a city analysis earlier this year estimating construction expenses alone at $700,000 to $1.2 million per market-rate home.

In September, the YesAND Foundation, four Marina residents, and the neighborhood coalition NeighborsUnited SF filed a lawsuit alleging that the city improperly determined the project qualifies for AB 2011's streamlined process. The plaintiffs argue that the Safeway property does not meet the law's eligibility requirements and that the city allowed Align to bypass necessary hazardous-waste assessments.

Marina Supervisor Stephen Sherrill and several neighborhood organizations contend that the law requires at least 75% of the parcels adjoining a proposed development to already be occupied by urban uses. They argue that the Safeway site does not meet that threshold because much of the surrounding property consists of parks and open space, including Marina Green, the Marina Yacht Harbor, and land managed by the National Park Service at Fort Mason.

The Planning Department disagrees, maintaining that the site is surrounded by urban uses. Planning Director Sarah Dennis Phillips also wrote in a July letter that the property does not appear on the state's list of hazardous-waste sites.

Residents told KQED they spent months contacting the city's Planning and Public Health departments and requesting an environmental assessment before turning to the courts. The city determined in August that Align's proposal could proceed through ministerial approval, eliminating the usual public hearings and CEQA review.

"We were not asking for a veto," said Lori Brooke, a member of YesAND and NeighborsUnited SF, speaking to KQED. "We were asking for proper review and a meaningful opportunity to be heard. When both are denied, the courts become the only option left."

The environmental dispute also involves the property's history of industrial use and the legacy of a separate manufacturing operation nearby. The Safeway development property previously housed a steam-power generation facility, while the North Beach Manufactured Gas Plant occupied roughly three city blocks within a few blocks of the site during the late 19th and early 20th centuries.

The gas plant, operated by San Francisco Gaslight Co., PG&E's predecessor, processed coal and oil into gas used throughout the city for lighting, heating, and cooking. The operation left behind industrial byproducts, including clinker, a toxic residue from the manufacturing process. The facility was destroyed in the 1906 earthquake.

Although state regulators previously determined that pollution associated with the steam-power facility on the Safeway property had been cleaned to levels acceptable for commercial or industrial use, they cautioned that the determination could be revisited if the property's use changed or additional contamination was discovered.

The lawsuit cites a 2023 assessment by an official with the California Department of Toxic Substances Control who found petroleum-related contamination exceeding normal testing limits for commercial projects and standards for residential development. The plaintiffs allege that the city and PG&E failed to adequately investigate or remediate contamination associated with the property's former industrial operations, and accuse them of creating a public nuisance.

The lawsuit reportedly names Align Real Estate, the city's Planning and Public Health departments, PG&E, and Safeway parent company Albertsons. The plaintiffs are asking a judge to overturn the city's decision to streamline the development and require Align to complete the necessary health and safety assessments before the project moves forward.

A spokesperson for the city attorney's office told KQED in September it would review the complaint and respond in court once formally served. PG&E said at the time that it had not yet reviewed the lawsuit.

The approval highlights the tension between state housing mandates and local environmental oversight, as San Francisco struggles to meet aggressive housing production targets. AB 2011 was designed to accelerate housing construction by limiting discretionary review, but the Marina project's approval has raised questions about whether the law's eligibility criteria and environmental safeguards are being properly applied.