Committee recommends renewal of Bayview Plaza leases for HSA and DPH with lower base rents

The Budget and Finance Committee on May 7 voted to forward to the full Board of Supervisors two lease agreements for city tenants at Bayview Plaza, 3801 Third Street.

Andrico (Rico) Penick, director of real estate, said the City would be the tenant for space occupied by the Human Services Agency (HSA) in Suites 200–250 and by the Department of Public Health (DPH) in Suite 400. Under the proposed deals, HSA would take a three‑year initial term with one five‑year option and an annual base rent of about $526,000 (approximately $33 per square foot). DPH would take a five‑year initial term with two five‑year options and an initial annual base rent of about $489,000 (also $33 per square foot). Both leases are described as fully serviced (the landlord provides building services included in the rent).

Penick said the lower $33 per‑square‑foot base rent represents a significant decrease compared with prior leases; the prior HSA rate was approximately $40.58 per square foot and the prior DPH rate was approximately $38.29 per square foot. Christina Malamut of the Budget and Legislative Analyst told the committee the HSA lease term length aligns with the agency’s plan to relocate some child‑welfare services to a new city‑owned Bayview site, while the DPH term accommodates continued mental‑health and crisis‑response programs. The BLA reported total initial‑term costs of about $1.6 million for HSA (three years) and $2.5 million for DPH (five years) and recommended approval.

Supervisor Chan thanked staff for renegotiating the terms and noted the leases support long‑term service delivery in the Bayview neighborhood. There were no public speakers on the items. The committee voted 3‑0 to forward both resolutions to the full board with positive recommendations.