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Supervisors Continue Review of 10-Year Lease for Retirement System at 1145 Market
Summary
The Budget and Finance Committee continued consideration of a proposed 10-year, 37,289 sq ft lease at 1145 Market Street for the San Francisco Retirement System after questions about staffing growth, program use of expanded space, and public meeting access. Staff will return with more detail and a site visit was requested.
Chair Mark Farrell and members of the Budget and Finance Committee continued discussion of a proposed 10-year lease at 1145 Market Street for the San Francisco Employees’ Retirement System, saying they needed more information before taking final action.
John Updike, Director of Real Estate, told the committee the proposal would lease 37,289 square feet to the retirement system, relocate its offices from 30 Van Ness, include a five-year option to extend, and an exit clause allowing the city to depart after July 1, 2017 if a different civic center location becomes available. Updike said the move responds to growth in staff — from about 62 to nearly 100 employees over time — and to “privacy concerns” during individual counseling that the new space would address. He said the landlord is providing a tenant-improvement allowance of roughly $2,040,000 and that the city would likely reimburse an additional estimated $1,100,000, with options to amortize that cost over the lease term at an 8% rate.
The budget analyst summarized the fiscal effect: current annual rent at 30 Van Ness is $524,003.31 and would rise to about $1,000,437.07 under the proposed lease — an increase of roughly $906,004 (about 173%). The analyst also reported the Department’s office footprint would grow by about 14,048 square feet (from ~23,241 to ~37,289 sq ft), a 60% increase.
Supervisors pressed retirement-system leadership for a clearer breakdown of when staffing increases occurred and how the additional office capacity would be used. One supervisor said expanded space should be justified by program needs and by evidence the Retirement Board’s policy directives (including a request for information on divestment from fossil fuels) are being implemented. Retirement system Executive Director Jay Hueish said the largest single-year staff increase occurred in the investment division and that staff are working on the requested reports and engagement items; he offered to provide a division-by-division staffing history since 1999.
During public comment, Jed Holtzman of 350 San Francisco urged the committee to ensure the new lease includes adequate public meeting space and recording so Retirement Board meetings are accessible to the public. Updike replied the largest meeting room would be doubled in size to accommodate up to 60 people, additional meeting rooms would be added across floors 5–7, and conduits exist to support televised or recorded meetings, though detailed design had not yet been finalized.
Committee members requested a site visit to the current retirement-system offices and asked staff to return with more detail on space needs and cost alternatives. The committee approved a motion to continue Item 5 to the Budget and Finance meeting on Jan. 29 for further deliberation.
The item was continued; staff will provide the requested staffing breakdowns, clarify public-meeting and recording plans, and supply any revised cost estimates when the matter returns to the committee.
