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Supervisors reject 1155 Market Street office lease after budget committee warns against deal
Summary
The Board of Supervisors voted 11-0 on Sept. 26 to reject a proposed five-year, 103,000-square-foot office lease at 1155 Market Street after the Budget and Finance Committee and several supervisors said the terms were unfavorable and that the city should explore alternatives such as property purchase or relocation.
The San Francisco Board of Supervisors on Sept. 26 voted against approving an amended and restated office lease for roughly 103,000 rentable square feet at 1155 Market Street, rejecting the proposal after members said the contract did not reflect current real‑estate market conditions.
Supervisor Chan, speaking for the Budget and Finance Committee, urged colleagues to vote no. “A no vote to the legislation…will allow us the city to perhaps go back and figure out a better solution,” Chan said during the committee’s report to the full board.
The measure, described in the clerk’s reading as a 5‑year lease with one 5‑year option at an initial annual rent of about $6,600,000 and 3% annual increases, had been referred to the Budget and Finance Committee with a unanimous recommendation of “do not pass.” Committee members and other supervisors said the wider real‑estate market has weakened since earlier long‑term leases were approved and that committing to the proposed terms was not prudent.
Supervisor Chan and several colleagues argued the city should explore alternatives, including purchasing property or seeking different office locations for the departments that would occupy the space. The budget and legislative analyst’s report—cited repeatedly during committee remarks—concluded the proposal raised policy questions given changing market conditions.
On a roll‑call vote, the board recorded 11 no votes and the resolution failed. The clerk announced, “Resolution fails. Next item, please.”
Why it matters: The rejected lease was intended to consolidate space for about nine city departments and lock in a multi‑year rental commitment. By rejecting the measure, supervisors signaled reluctance to approve large new office leases without additional review of market alternatives and long‑term asset strategies.
What happens next: The board did not adopt an alternative motion on the floor. Staff and the mayor’s office of property will determine next steps, which could include renegotiation, returning with new terms, or exploring property acquisition. The Budget and Finance Committee’s recommendation and the board’s vote effectively send the proposal back for further consideration.
Votes at a glance: The roll call recorded the following votes against the lease: Melgar; Peskin; Preston; Ronan; Safaie; Stephanie; Walton; Chan; Dorsey; Angadio/Guardio; Mandelmann (11 no votes). No ayes were recorded on the final motion to approve the lease.
