Seventeen years after the project was initially proposed, the Catellus Development Corporation finally has received the go-ahead for its $4 billion, mixed-use Mission Bay mega-development in San Francisco.

The San Francisco Board of Supervisors unanimously approved a series of ordinances necessary for approval of the project.

Catellus' (NYSE:CDX) Mission Bay is anchored by a new "research park" campus for the University of California at San Francisco and a new baseball stadium for the San Francisco Giants, Pacific Bell Park.

The development also includes 250,000 square feet of entertainment retail space adjacent to the new ballpark, 5 million square feet of office, a 500-room hotel and over 5,000 housing units.

The development, which is being spearheaded by Catellus, will feature joint ventures with a number of smaller REITs, as well as co-development of the UCSF campus with the State of California.

Catellus is a diversified real estate company with one of the largest portfolios of developable land in the western United States. Catellus develops, manages and owns a broad range of product types including industrial, residential, office, retail and major mixed-use projects similar to the Mission Bay project.

"This is the largest urban development in San Francisco, and one of the largest in the United States," said Jennifer K. Ruddock, director of investor relations with Catellus. "We're proud to turn what is essentially an industrial wasteland into a thriving part of the city."

The project has the strong support of Willie Brown, Mayor of San Francisco.

"The benefits to the city from the Mission Bay development are significant. They include a 5% increase in jobs held by city residents, 1,700 affordable housing units, and a net benefit to the city's general fund and other dedicated city funds estimated at $574 million over a period of 30 years."

The mayor's claims came from a study by the Sedway Group of San Francisco, an independent consulting firm that studied the development.

According to their analysis, the project would create over 42,000 jobs, directly and indirectly, and that the City would experience a net positive revenue stream.

Environmentalists and affordable housing advocates who had opposed the plan in the past received concessions that led them to support the development.

To satisfy environmentalists, Catellus has offered to expand the sewer system and take other steps to protect the Mission Creek environment. For affordable housing advocates, Catellus is building 255 affordable housing units that it will sell or rent, and build and then give to the city an additional 1,700 units.

Activists, city officials and members of the business community have called this a "historic compromise."

Carol Piasente, vice president of communications for the San Francisco Chamber of Commerce says that the business community, "is excited that after nearly 20 years, that the Mission Bay plan has finally come to fruition.

"The creation of residential units in a city that sorely needs them, the business and commercial space around the new UCSF campus, and the potential for the UCSF research campus to draw existing and start-up biotechnology companies to the area have created a strong level of support for this project in the community," Piasente said.

Assuming that a final procedural vote by the Board of Supervisors is approved on Nov. 2, Catellus hopes to begin the project in early 1999.

For the nine months ended Sept. 30, 1998, Catellus had earnings before depreciation and deferred taxes of $68.6 million, versus $44.1 million in the same period in 1997. Net income for the first nine months of 1998 was $31.1 million, or $0.28 per share on a diluted basis, versus $15.7 million, or $0.16 per share on a diluted basis, during the same period in 1997.