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Port Commission approves rent parameters, directs staff to negotiate graduated increases for Pier 70 artists
Summary
After public testimony from long-term artists at Pier 70's Newnan Building saying proposed rent changes would "almost double" their rents, the Port Commission approved a portfolio-wide parameter rent schedule but instructed staff to negotiate a graduated payment schedule for Building 11 tenants and return to the commission for approval.
SAN FRANCISCO ' The Port Commission on June 8 approved a portfolio-wide parameter rent schedule for fiscal year 2010-11 while directing staff to negotiate a graduated repayment or step-up schedule specifically for long-term artist tenants at Pier 70's Newnan Building (Building 11).
Geoffrey Bauer, the port's leasing manager, told commissioners the $1.10-per-square-foot parameter for the Newnan Building "was exact last fiscal year" and represents the minimum delegated authority for staff to negotiate leases. "If we can get a dollar 50, that's great," Bauer said, describing the parameter as a floor for delegated transactions.
Artists who use the Newnan Building urged delay and tailored terms. "In January, we were notified that our rent was going to be almost doubled," artist and tenant Marty McKee told the commission, adding the group proposed a three-year stepped increase that would mitigate the immediate financial shock. Kimberly Austin, another long-term tenant, said the proposed change would "nearly double my rent," and described neighboring vacancies and the risk of losing the artist community.
Deputy Director of Real Estate Susan Reynolds clarified that the parameter rents before the commission have not changed from the previous year and said staff can present individualized, graduated adjustments for tenants who are well below market. "If you go ahead and approve the parameter rents, it moves that item forward and it allows us to continue to negotiate rents," Reynolds said, adding the port can bring separate proposals for tenants in hardship.
Commissioners debated whether approving the parameters and separately negotiating relief would be fair. One commissioner proposed, and the body approved, an amendment requiring staff to work with affected tenants on a graduated payment schedule and to return with any recommended exceptions for commission approval. The motion passed on a voice vote; the transcript records a unanimous "Aye" with no roll-call tally printed.
The action keeps the commission's delegated authority intact while directing staff to seek solutions for tenants who would face steep increases. Port staff said they will report back at the next meeting with proposals for how to implement stepped increases or negotiated concessions for the artists affected.
The commission also noted that vacancy in the Newnan Building is limited (staff cited three vacancies) and that a market study showed overall rates in the building are at the low end for comparable studio space.
The commission approved the parameter rents with the staff-direction amendment; the vote was recorded as approved (Resolution 10-xx in transcript).
