Keeping Muni Reliable for the Long Haul: Tough Choices as We Transform Potrero Yard

Wednesday, October 1, 2025

People boarding and exiting a 49 Van Ness bus parked in a dedicated transit lane.

The Potrero Yard Modernization Project would make it easier for our teams to clean and maintain trolley buses that communities across the city rely on.

As one-time pandemic relief funds run out, Muni faces a budget deficit of about $307 million. We are making cost saving reductions across the SFMTA to avoid devastating cuts to Muni service. That means making hard choices to be able to move essential Muni infrastructure projects forward.

The Potrero Yard Modernization Project is one example. We need to replace this 110-year-old bus yard to create a safe, efficient hub for our trolley buses. This will make it faster and easier for crews to maintain buses that communities across the city rely on every day.

Unfortunately, the current scope of the project is well beyond what we can afford. To move forward with this critical investment in Muni service, we have to make very difficult decisions to lower costs.

We are now proposing changes that would reduce the amount of housing that could be built at the new yard. This approach would help us keep Muni reliable for the long haul while still preserving up to 100 units of proposed affordable housing at the project site.

Investing in your rides for the long term

Muni’s Potrero Yard is a vital part of our public transit system. The repairs, maintenance and cleaning done at this facility keep buses running for about 111,000 riders each day – more than a fifth of Muni’s total ridership. But at 110 years old, the yard is obsolete and one of our most vulnerable facilities in an earthquake.

The SFMTA needs to replace this bus yard. A new yard will:

Maintain our electric trolley bus fleet, with space for two-thirds more buses

Improve Muni’s reliability

Provide safe conditions for our staff

Building a modern bus yard is the primary goal of the Potrero Yard Modernization Project.

Facing difficult challenges

Financial crisis: The SFMTA faces a projected $307M operating shortfall starting in FY26-27. This shortfall grows over time. This project must be affordable to the SFMTA given these fiscal challenges.

Increasing development costs: Construction costs, interest rates and market volatility have all escalated since the project started.

Cost inflation: Costs will continue increasing. More delays would jeopardize the entire project.

The SFMTA has partnered with the Potrero Neighborhood Collective (PNC) developer team on this project. This partnership is one of the reasons we can move the project forward, even with financial challenges facing transit. PNC will pay the upfront costs to build the bus yard. The SFMTA will then repay them over time, spreading the costs over a 30-year period.

However, the construction cost and these annual payments must be affordable to the SFMTA. And a key deadline is approaching. Our predevelopment agreement with PNC expires on March 31, 2026. If the deal expires, it would be hard to find a new deal that offers similar financing options.

To keep the project moving, our teams got to work identifying the most effective ways to cut costs.

30 Stockton bus drives through Chinatown with many signs for small businesses in the background.

Our teams at Potrero Yard help 30 Stockton buses run smoothly to Chinatown and back.

Doing everything possible to meet local needs

The top priority: find cost savings for the project that do not endanger our ability to support Muni service.

The SFMTA and the developer team have found initial savings with alternatives for materials, building systems and equipment that don’t compromise quality of performance.

In addition, we must consider other project changes. The SFMTA and the developer team have identified the following areas for savings to create a path to feasibility for the project.

Removing the podium

Reducing the size of the basement and mezzanine level

Eliminating the roof

Removing operations and maintenance from the deal structure

Among these proposed changes, removing the podium would be the toughest choice. A podium would allow developers to build housing above the new yard. However, the podium is a significant cost the developer is unable to fund prior to the start of bus yard construction.

Our agency tried to find a way to shoulder this cost. Now, we cannot afford to fund it. However, we are still committed to preserving as much proposed housing as possible as we make a significant investment in the future of Muni.

Draft rendering of the Potrero Yard Modernization Project - a bird's eye view from 17th and Bryant streets.

Draft rendering aerial view of Potrero Yard from 17th and Bryant streets perspective, September 2025. (Arcadis)

To that end, we worked closely with the developer team to ensure there would still be space for approximately 100 units of proposed housing. These units would be built on Bryant Street, next to the new bus yard.

We are also finding more cost-effective ways to lay out the new bus yard. Reducing the size of the basement and the mezzanine level and removing the roof would significantly decrease construction costs without impacting transit operations. The SFMTA is also taking on operating and maintaining the facility and building systems using our own staff, which results in significant cost savings.

We’ve been doing everything we can to explore different creative solutions. By making these changes, we can get closer to an affordable and responsible price for the bus yard. Plus, we can preserve the opportunity to develop approximately 100 units of affordable housing on the site.