The San Francisco Redevelopment Agency has suspended efforts to develop housing on a key Transbay District parcel after bids for the property came in “well below the potential value of the site in a healthier real estate market,” according to a memo from Executive Director Fred Blackwell.

Blackwell said the agency decided to suspend the request for proposals process for Block 8, a 42,600-square-foot parcel on Folsom Street between First and Fremont streets. The agency is looking for a developer to build two market-rate structures: a 550-foot residential tower and an adjacent 50-foot residential townhouse development. In addition, the RFP called for a 100 percent affordable building 65 to 85 feet.

“Staff believes that waiting a year and issuing a new RFP could potentially result in more interest from developers and higher purchase offers,” said Blackwell.

Blackwell said the agency will issue a new RFP in 2010.

Originally, three teams made bids on the property: Avalon Bay and Bridge Housing, Golub Real Estate and Mercy Housing, and Avant Housing and Citizens Housing. The Avant/Citizens team, which had hired star architect Richard Meier Architecture to design the building, withdrew in April. AvalonBay is working with designer Arquitectonica and Chicago-based Golub is working with Solomon Cordwell Buentz. Both architects designed prominent buildings on Rincon Hill: Solomon Cordwell Buentz designed One Rincon Hill and Arquitectonica designed Tishman Speyer’s Infinity.

Blackwell said “the market has changed significantly since the RFP was issued in 2008.”

“For a prime development opportunity such as Block 8, the agency should wait for conditions to improve rather than sell under current market conditions.”

The agency did not release details of the two proposals that were submitted.

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