A plan to convert parking lots under the Central Freeway near Duboce and Valencia Streets into a skate park and dog run is moving forward, but it won’t include basketball courts or a children’s playground as originally envisioned by residents.

Because the city will have to lease the land from Caltrans, which owns and collects revenue from the existing parking lots, city officials involved in planning the long-delayed parks projects say budget constraints left them with no choice but to allow the state department of transportation to retain a large section of the parking lot at the expense of park space.

“The City Parking Area is a vital revenue component to making the entire lease structure with Caltrans feasible; thus helping to fund the projects and keep them moving forward,” wrote Gloria Chan, a spokesperson for the Office of Economic and Workforce Development, in a February email to residents. “Without this revenue, we would not be able to plug the funding gap needed for these projects.”

D6 Supervisor Jane Kim introduced legislation this week to establish agreements between Caltrans and city agencies to move the project forward, and construction on the skate and dog parks are expected to begin this summer. She praised the project planners, but made no comment on the downsizing.

The SF Examiner reported details of the deal last month:

Under the terms of the lease deal, Caltrans will receive $10,000 a month for 20 years, with rent increasing by 2 percent every year. The Recreation and Park Department — the agency in charge of maintaining the park — will pay $85,000 a year for the site. Public Works will pay $66,000 a year.

The parks projects are a part of a package of streetscape and public space upgrades in the works since 2009, which are intended to mitigate the blight imposed by the Central Freeway after it was reconstructed as far as Market Street in 2006, at the insistence of Caltrans and pro-freeway car commuters on the west side. (Compared to a complete removal of the Central Freeway, the reconstruction saved, at the most, two minutes for drivers during peak hours, according to a study by the SF County Transportation Authority.)

Other components of the package have recently been completed, like streetscape improvements on McCoppin Street and the alleyways of Stevenson Street and Elgin Park. Residents are also expecting a public space on a stub of street space abutting the Central Freeway wall, dubbed the McCoppin Hub, to begin construction this fall.

After years of delays due to lack of funding and lease negotiations with Caltrans, neighborhood activist Lynn Valente said she’s just happy to see “something get done.”

“Compromises have to be made,” she said. “To be honest, this is coming out better than most things in I’ve worked on in San Francisco.”