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SFMTA’s Potrero Yard Modernization Project reaches commercial and financial close, advised by Arup

Delivered through a progressive P3, the project will replace the historic yard with a larger electric bus facility, expand capacity, support green transit, and enable affordable housing as part of a broader modernization program.

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Chloe Ginnegar

Americas Media Officer

Los Angeles

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americaspress@arup.com

+1 310 578 4400

Last updated: 21st April 2026

SFMTA’s flagship transit project, the modernization of the Potrero Bus Yard, has reached commercial and financial close with Arup acting as financial and procurement advisor.

This milestone follows the SFMTA’s and the San Francisco Board of Supervisors’ recent approval of the contract, which includes a fix-price, date-certain design-build-finance (DBF) delivery of the project by Plenary Americas US Holdings Inc. and Webcor Construction, LP. This project is the first of a multi-facility modernization program that the SFMTA is pursuing to improve and expand green transit while creating additional public benefits including affordable housing.

The Potrero Yard Modernization Project replaces the existing two-story 1915 bus yard with a modern, three-story electric trolley bus maintenance and storage facility, designed to improve transit efficiency across the system. The new yard increases capacity to park and maintain 68% more buses than the original facility. In addition to meeting the SFMTA’s operational and sustainability goals, the development aims to contribute to San Francisco’s housing needs by enabling approximately 100 units of affordable housing on the bus yard’s site and approving a development agreement with the community-based housing developer.

This project is a once-in-a-generation investment in improving Muni,” said Julie Kirschbaum, SFMTA’s Director of Transportation. “It will have an incredible positive impact on our ability to deliver reliable Muni service and provide our staff with a modern, seismically resilient facility to safely and efficiently get our service out every day.”

“The SFMTA’s joint development approach to couple state-of-the-art bus fleet facilities and housing through a public-private partnership delivery offers a valuable precedent for other agencies and cities who are seeking new ways to deliver and finance public infrastructure while addressing broader needs in our cities,” said Ignacio Barandiaran, Principal at Arup.

Rendering view of the Potrero Bus Yard from the north with Franklin Square Park in the foreground © Arcadis

Arup developed a financial and commercial structure based on the SFMTA’s affordability and technical performance requirements. Informed by Arup’s advice, the progressive P3 procurement strategy adopted by the SFMTA attracted highly qualified bidders with innovative technical solutions and attractive financing proposals. This procurement was implemented through a Pre-Development Agreement (PDA), which aligns the bidders’ interest and capabilities with the SFMTA’s project objectives.

Early on, Arup conducted market sounding exercises that, in conjunction with financial and affordability analysis, provided the key parameters to conduct the procurement that led to successful entitlements and financial closing. Arup drafted the procurement documentation and supported the SFMTA’s management of the process, including proposal evaluation, process to award the PDA to the preferred proponent, and subsequent negotiation and project development support to the SFMTA during the PDA phase. Arup supported the SFMTA with negotiation of its private partner’s final implementation proposal, including all aspects of the design-build final price and contract terms, financing structure and terms, the delivery contract’s performance deductions regime linked to the payment mechanism, and comprehensive performance-based technical requirements.

The project site, which takes up an entire city double block in the Mission District, will soon be handed over to Webcor, the design-build general contractor, following move-out by the SFMTA’s current bus operations. As the final design is developed and permits are secured, preparations for demolition will enter their final stages later in 2026 and building work will commence. Arup will continue to support the SFMTA during final design and construction by providing contract and project management services and ongoing financial advice. Project completion is scheduled for 2030.

Learn more about the project