Committee wins rent reductions on city office leases, forwards amended deals to full board

The San Francisco Board of Supervisors Budget & Finance Committee voted to approve amendments reflecting renegotiated rent terms for two city office leases and forwarded the amended agreements to the full board with a positive recommendation.

Andrico Pinnock, Director of Real Estate, told the committee that landlords agreed to roughly a 15% reduction from the rates previously proposed because of market impacts tied to the COVID-19 outbreak. "We were able to achieve a 15% reduction in the proposed rates for each of these leases," Pinnock said, noting the change reflected landlords’ willingness to continue their partnership with the city. He presented new per-square-foot proposals of $41.18 for Mission Street space and $44.78 for Gulf Street space.

Chair Sandra Lee Fewer said members had asked for renegotiation following a Budget Legislative Analyst review. When asked for the five-year savings total, Pinnock later provided figures showing $1,942,840 in savings for the Mission Street leases and $586,215 for the Gulf Street lease, bringing combined savings across the leases to slightly more than $2,500,000.

City Attorney staff advised the committee that the resolutions would require non-substantive amendments to reflect the new lease terms but would not change the substance of the underlying approvals. With amended redlines available to members, the committee approved the amendments and voted to move Items 1 and 2 as amended to the full board with a positive recommendation.

The committee recorded roll-call votes of Supervisors Shamann Walton and Rafael Mandelmann and Chair Sandra Lee Fewer in the affirmative. The amended resolutions will appear before the full Board of Supervisors for final action.

The committee also asked Real Estate to provide a breakdown of annual and multi-year savings and any follow-up details requested by members before the full-board hearing.