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Supervisors advance amended 10‑year lease for Employees' Retirement System at 1145 Market Street
Summary
The Budget & Finance Committee advanced a revised 10‑year lease for the Employees' Retirement System at 1145 Market Street after real‑estate and budget staff described space and cost reductions that lower the lease's 10‑year cost and preserve a market base rate. The committee approved the amended resolution without opposition and asked the department to file final amendments with the clerk.
The San Francisco Budget & Finance Committee on Feb. 26 advanced an amended resolution authorizing a 10‑year lease at 1145 Market Street for the Employees' Retirement System, saying the revised terms reduce space and long‑term costs while retaining competitive market rates.
Mr. Updike, representing the Department of Real Estate, told the committee the revised lease trims the space footprint by 1,710 square feet and reduces the base lease price by about $66,000 a year — roughly $700,000 over the 10‑year term. He said tenant improvement allowances were reduced by approximately $145,000 and the interest rate on amortized tenant improvements was cut from 8% to 6%, producing about $131,000 in savings. The department intends to preserve a base rent of $38.36 per square foot and retains one month of free rent; the retirement system also plans a partial leaseback of space to Prudential, the system's deferred‑comp administrator, to offset costs.
Budget analyst Mr. Rose summarized the committee report and tables, saying the amended lease lowers the 10‑year cost from $16,282,585 under the original proposal to about $15,531,141. The analyst noted the proposed lease would expand the retirement system's occupied space to about 35,579 square feet and estimated first‑year savings related to the negotiated first month free rent at roughly $60,510. Mr. Rose recommended approval as amended by the director of Real Estate, and also noted the mayor’s office was considering a one‑time appropriation of $1,061,640 to cover the city's share of building improvements in lieu of annual amortization.
Supervisor John Avalos and public commenters from 350 San Francisco urged greater public access to retirement‑board deliberations. Avalos asked whether the retirement board's meetings could be televised; Mr. Huish, present for the retirement board, said televising options were included in a budget proposal the board plans to present later this year and that telecasts might be live or delayed depending on scheduling.
After discussion, the committee moved to accept the budget analyst's recommendations and the Real Estate director's amendments. The motion to approve the amended resolution was taken "without opposition." The clerk and department staff were asked to file the approved amendment paperwork with the clerk's office.
Next steps: the committee forwarded the amended resolution for placement on the Board of Supervisors' agenda as indicated by the clerk.
