In the southeast corner of Potrero Hill, on two vacant lots overlooking Highway 280, new homes are disappearing before they’re even built.
After buying the lots for $1.7 million in 2018, San Francisco developer TM Build applied to put up 25 new homes, three of them affordable, in a pair of five-story buildings on Texas Street.
Last August, after seven years, the city issued building permits for 1053-1055 Texas, on a part of the street that dead-ends among public housing. Then, just before scoring a rare San Francisco development touchdown, TM Build stopped on the one-yard line. The developer withdrew the proposal in December.
Now TM Build is back with a new proposal, and it’s drastically downsized: a mere six units in two shorter buildings, and no affordable housing at all.
The project came before the Planning Commission yesterday. The seven commissioners offered opinions and plenty of criticism but could not vote. That’s because TM Build is invoking SB 423, a state law that allows most new SF housing developments to speed through the approval process.
Unless the proposal violates planning or building codes, there’s not much anyone can do to bar it.
But what happened to the 19 other homes and the affordable housing? What happened to the buildings the city already approved? In trying to answer those questions, the story takes some strange turns.
Calls and emails to TM Build and its attorney have gone unanswered. The only person connected to the project willing to talk is Reza Khoshnevisan, a local development consultant. He said high interest rates made it hard to get a loan, even though TM Build was about to break ground. So the firm came back with a smaller, cheaper plan. (TM Build attorney John Kevlin said the same thing at Thursday’s hearing.)
Limited access to financing is a common complaint in the current development environment, especially for mid-sized buildings like this. It’s also not uncommon for a builder to buy a property then spend so long at City Hall that the economics don’t work by the time they have construction permits.
But this Texas Street downsizing has a few other Texas-sized wrinkles. One is that Khoshnevisan was, at least until last year, named in TM Build’s state filings. Yet in an interview last week with The Frisc he seemed to put himself at arm’s length from the firm, declining to identify its owners.
Another twist is that Khoshnevisan pleaded guilty in 2024 to bribing SF building inspectors for years to speed up permits — part of the extended web of the Mohammed Nuru scandal.
A $25,000 fine and no prison
Khoshnevisan is co-owner of RKD Consulting, formerly SIA Consulting. In 2024, Khoshnevisan pleaded guilty to bribery — “honest service fraud,” in Justice Department-speak — and was fined $25,000. The conviction stemmed from DOJ charges against him and two SIA consultants, fallout from the 2020 anti-corruption probe that took down former Department of Public Works chief Nuru.
Khoshnevisan did not go to prison. His co-defendants received fines and probation. Two months ago, one of the Department of Building Inspection employees who took bribes from them received a 12-month sentence.
In his interview with The Frisc, Khoshnevisan did not bring up his legal troubles and declined to identify the owners of TM Build. He referred to the company as “they” and “the developers.”
For example, Khoshnevisan said the old version of the Texas Street project was “almost ready to break ground” last year, but “they couldn’t make it work with all the high interest rates and everything.” He added that “it was hard to get a loan. They tried everything.”
It’s true that construction costs have leveled off but remain sky-high. And interest rates are double what they were in 2018. Khoshnevisan said the new design with less infrastructure should be cheaper — no need to install elevators, for example.
There are many other instances of deeper connections between Khoshnevisan and TM Build. In a 2019 appearance before the SF Board of Appeals, he identified himself as a TM Build “partner.” (That hearing was over a neighbor’s appeal of a two-unit building on the lot just downhill from 1053-1055 Texas.)
In 2021, paperwork for the previous version of 1053-1055 Texas listed Khoshnevisan as the project sponsor. A project sponsor is either the owner, developer, or an appointed representative.
TM Build’s most recent filing with the California Secretary of State, dated March 2025, lists Khoshnevisan as a “manager or member.” One of his codefendants in the bribery scheme, Bahman Ghassemzadeh, is listed as manager or member as well. The Mission Street address filed for TM Build is also the address of Khoshnevisan’s RKD firm.
A memo from city planners about yesterday’s hearing provides the email and phone number for RKD as a “billing contact” for TM Build.
It’s unclear why Khoshnevisan seems to be putting daylight between himself and the firm. After his conversation with The Frisc, he did not respond to requests to clarify his relationship to the firm or the Texas Street project. TM Build’s attorney Kevlin also did not respond to requests for comment.
‘I need the developer to show up’
The peculiarities of the 1053-1055 Texas case may be unusual, but its money woes are not, according to SF Planning chief of staff Dan Sider. “Feasibility for [midsize] projects has been a huge issue for ages. It’s much more a macroeconomic issue than a regulatory one,” Sider said, adding that the city is still looking for policy solutions to encourage that type of development.
Witt Turner of the Housing Action Coalition is more succinct about financing: “Midrise buildings are the worst” and “capital is shy.”
An advisory committee on affordable housing recently recommended that SF cut the required percentage of affordable units in new buildings to boost financial incentives for developers. The new version of 1053-1055 Texas, with fewer than 10 units, is not required to include affordable units.
If I had to vote on this, I’d vote no.
Planning commissioner sean mcgarry
One neighbor, who’s well aware of the track record of Khoshnevisan and colleagues — “they had some trouble” — wishes the project hadn’t been downsized. “We appreciated the affordable housing of the first project,” said J.R. Eppler, president of the Potrero Boosters Neighborhood Association and owner of a business advisory firm. ”That helped justify its scale.”
But the new version is better than “leaving things fallow” on those lots, added Eppler, who has served on city commissions and has political aspirations.
TM Build is using SB 423 to fast-track the now-smaller project. What’s supposed to be a smoother approval path got off to a bumpy start. No one from the developer’s side showed up at a hearing last month. The Planning Commission used the time to debate whether SB 423 requires a builder to attend their own hearing.
The commission clerk said later that the absence wasn’t intentional and rescheduled for this week. Representing TM Build yesterday, attorney Kevlin called it a calendar error. His clients didn’t show up yesterday either, prompting Commissioner Lydia So to issue this rebuke: “Government did this [law] to make this whole process easier. I need the developer and their consultants to do their part, to at least show up.”
Commissioner Sean McGarry took issue with the removal of affordable housing. “It’s just for profit” now, McGarry said, “If I had to vote on this, I’d vote no.”
Commissioner Derek Braun also said he was disappointed with the number of homes but acknowledged the difficulties of the financing market.
Commissioner Gilbert Williams said that 1053-1055 Texas exposed “the unfortunate consequences” of SB 423, but he closed with a lukewarm endorsement. Since “there’s nothing there” now, Williams said, new housing and street improvement is “not a bad outcome.”
Khoshnevisan and his firm — or former firm — were not mentioned by name.