Making Water into Land
San Franciscans had two ways of making water into land: one was political and the other physical. In 1847 military Governor Stephen Watts Kearny had held a "Great Sale of Beach and Water Lots in Yerba Buena Cove." Kearny extended existing street lines far into the shallow cove and auctioned off waterlots.
In 1851 the US Congress transferred ownership of "swamp lands and all tidelands" to the states. As San Franciscans controlled the state legislature in Sacramento, state tidelands were granted to San Francisco to sell to pay civic debts and for improvements. . . .
But waterlots proved difficult to survey. Some owners drove 80-foot pilings as fences, others sank derelict wooden vessels to become "improvements intended as fill" and validate their ownership claims. Many lots had as many as three or four claimants.
If drawing a line in the water was the political means of creating land, the actual physical changes took place with great speed and ingenuity. Market Street, for example, had some impassable 100-foot sandhills. The "Steam Paddy" used a giant steam shovel to dump sand into rail cars pulled along on a temporary track, laid down where needed.
Piers and bulkheads reached out to enclose the waterlots, which were filled with log cribbing to hold rocks, sand and dirt. Pile drivers operated day and night as piers spread into the bay. Millions of cubic yards of fill extended the waterfront farther east.
By 1867 two-thirds of Mission Bay had been enclosed by a causeway that ended its water heritage. Long Bridge (the end of Fourth Street and the long north-south axis of Third Street preserve its route) became the new waterfront. . . .
To the North
Channel Street, or Mission Creek, formed the northern boundary of Mission Bay, although scow schooner captain Fred Klebingat opined, "I never heard it called by such a refined title." The captain had arrived in San Francisco in 1909 at the age of 20 on the S.N. Castle, and decided to stay. In his recollection, "It was an open sewer, a cesspool that emitted offensive odors, especially at low tide. Bubbles of gas broke the surface. They said if you fell overboard you wouldn't last more than two minutes. If you took a gulp of the stuff it would be the end of you. As bad as the stench was it was the busiest place on the San Francisco waterfront."
In the 1880s and 90s lumber and hay were the biggest cargos brought into Channel Street. . . .
To the South
Potrero Point, near today's Central Basin piers, formed the southeastern boundary of Mission Bay. By the 1880s the city's heavy industries had moved south to become the industrial iron and steel center of the West Coast. . . .
In spite of the insatiable human energy spun into schemes for its future, the waters of Mission Bay did not become land that could be built upon until well into the 20th century. In the 1890s Division Street was called Dumpville, as "garbage tends to flow downhill" into Mission Bay. . . .
Source: Nancy Olmsted. University of San Francisco, Mission Bay. http://pub.ucsf.edu/missionbay/history/print.php?title=Making+History&file=sitebody