The tunnel was primarily built for the streetcars of the now defunct F Stockton line. A petition was filed for a new streetcar line by Frank Stringham, representing an unnamed group of investors, with the San Francisco Board of Supervisors on January 23, 1909. Their intent was to create a nearly level route connecting North Beach with the downtown area. George Skaller later took credit for the initial push for a tunnel, saying that the city had studied the idea for at least 20 years, but would never be built as "all city enterprises, on account of the long and windy red tape connected with city enterprises" were doomed by bureaucracy. Stockton was favored over Grant, which was seen as too narrow, or Kearny, which already was franchised to the United Railways. Although Skaller initially hoped to raise private funding for the tunnel, the Board of Supervisors imposed a requirement allowing the city to take over the railway after ten years at its physical valuation, and no private investors were willing to fund the project. Instead, Skaller turned to the idea of public funding through a special assessment district, labeling the project as an "improvement" for existing roads. The Stockton Street Tunnel Association launched its fundraising campaign in May 1910, hoping to raise to cover construction costs by creating a special assessment district to fund the improvements. The estimated assessment for a lot was in 1910. The project adopted the slogan "The open door to North Beach" in May 1910. The Stockton Street Railway franchise was relinquished to the city in 1910, and suggestions were made that if ferries from Marin would land in North Beach instead of the Ferry Building, the resulting rise in local property values would offset the cost of the assessment. Two assessment districts were set up, in North Beach and Downtown, and projected traffic was estimated to reach 50,000 to 75,000 passengers per hour during the Panama–Pacific International Exposition of 1915. The precedent set by the assessment districts for the Stockton Street Tunnel sparked interest in building a similar tunnel under Fillmore Street and leveling Rincon Hill to increase usable land, but these added works were not carried through. Final plans for the tunnel were filed by city engineer Marsden Manson in March 1912. By June 1912, the final legal and funding issues were being resolved, and work was to start "within 30 or 60 days." In July 1913, excavation of the bore was planned to take 100 days. During construction, hotel guests were kept awake by work at night and at least one worker was killed by a cave-in. Revenue service through the tunnel was inaugurated by Mayor James Rolph on December 29, 1914.
Design
The tunnel was built to decrease the grade through the hill. Before the tunnel was built, the maximum grade along the route of Stockton north from its intersection with Sutter was 18% and the maximum grade south from the intersection with Sacramento was 12%. The tunnel was built with a maximum grade of 4.29% between Sacramento and Sutter. Initial plans in 1909 called for a tunnel long. The planned tunnel was shortened in 1910 to, with a width of and a height of, with stairways connecting the tunnel with Pine and California streets. The bore was narrowed slightly in 1912, with a total planned width of and a height of. Construction involved lowering Stockton Street near where it passes into the tunnel from the South, evidence for which can still be seen at the building of 417 Stockton Street, where the basement became the ground floor and the former front door is now a visibly marked window bay on the second floor.
