Los Angeles architect Frank Gehry, whose retrospective exhibition was a hit last spring at the Museum of Contemporary Art, is one of three finalists in a competition to design the San Francisco Museum of Modern Art's proposed $70-million structure. A 160,000-square-foot museum is planned downtown near the San Francisco Convention Center in a redevelopment area. The other finalists are Mario Botta of Lugano, Switzerland, and Thomas Beeby of the Chicago firm of Hammond Beeby and Babka. The three finalists will present site-specific design proposals late in the fall. The winner will be announced before the end of the year and design will begin in early 1989. The building is to be completed in 1993.