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OCII conditionally consents to California Historical Society lease amendment at Paramount tower
Summary
The Commission conditionally authorized the executive director to concur with a lease amendment between Related-affiliate Third & Mission Associates and the California Historical Society that reduces CHS’s Paramount premises and provides city-controlled nonprofit space at the adjacent Jesse Hotel, with a buyout payment flowing partly to OCII for CDBG use.
The Office of Community Investment and Infrastructure on Aug. 5 conditionally authorized Executive Director concurrence with an amendment to the long-term lease affecting the California Historical Society (CHS) at the Paramount tower, 680 Mission Street.
Christine Maher, a senior real-estate development specialist, described terms staff negotiated after commissioners raised concerns in May about the loss of dedicated nonprofit space. The developer, a Related affiliate, would pay a lease buyout of $2,250,000 as part of the transaction. OCII staff said the agency’s share is approximately $947,000; that money would be treated as Community Development Block Grant program income and transferred to the Mayor’s Office of Housing and Community Development (MOHCD) to fund nonprofit tenant improvements through the nonprofit rent stabilization program.
Under the proposed deal, CHS would relinquish about 10,000 usable square feet at the Paramount in exchange for approximately 4,100 usable square feet on the third and fourth floors of the adjacent Jesse Hotel. The City would lease and improve the Jesse Hotel space and then sublease it to one or more nonprofit users through MOHCD’s nonprofit rent stabilization program, staff said. Maher told commissioners the city tenant would be responsible for tenant improvements in the Jesse Hotel space, which is currently a shell.
Anthea Hartig, executive director and CEO of the California Historical Society, urged the Commission to authorize conditional concurrence with the lease amendment. "We waited four fiscal years to have this happen," Hartig said, describing fiscal uncertainty for the nonprofit while the transaction was pending.
Commissioners asked staff how CHS plans to use remaining space and how the new Jesse Hotel premises would be improved and operated for nonprofits. Staff said the City intends to fund tenant improvements using OCII’s share of the buyout through MOHCD programs and that the Jesse Hotel space would be configured and marketed for nonprofit use under an approximately 87‑year term.
Commissioner Mondehar moved to approve the conditional concurrence; Commissioner Singh seconded. The Commission approved the motion on a unanimous roll call vote.
The conditional consent is subject to Board of Supervisors approval of the Jesse Hotel lease; staff said the lease is expected to go to the Board in September. OCII staff will work with MOHCD and Related on tenant-improvement scope and nonprofit selection through the nonprofit rent stabilization program.
