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Real estate staff seek lease expansions and option renewal for Human Services Agency locations
Summary
The committee approved forwarding two Real Estate items: a 5,000-square-foot expansion of HSA space at Mission/Chavez to convert a successful ARRA-funded pilot into a longer-term occupancy, and exercise of a five-year option to extend a 52,200-square-foot sublease at 1440 Harrison with a fixed renewal rate. Staff said the consolidations save the city money by negotiating across a single ownership group.
The Real Estate Division presented two leasing items for the Human Services Agency (HSA).
John Updike, acting director of Real Estate, described Item 3: an amendment to add approximately 5,000 square feet at Mission/Chavez as part of a consolidated lease for multiple HSA sites. The space was initially leased as a pilot funded by ARRA and produced favorable job-placement results — Updike noted more than 1,000 job placements attributable to programs hosted in the pilot space — and HSA now has funding to convert the temporary occupancy to a longer-term commitment at a rate of $24 per square foot plus variable electrical and janitorial costs.
Item 4 requested exercise of a five-year option to extend a 52,200-square-foot sublease at 1440 Harrison Street for HSA operations (Medi-Cal, CalFresh and other programs). Updike said the sublessor will recarpet and repaint the facility at an estimated cost just over $200,000. The renewal rate is fixed at $23.28 per square foot per year; the city will continue to pay for janitorial, security and utilities.
Budget analyst materials noted that the combined consolidation increases the average per-square-foot rate modestly for one site but produces overall savings through negotiation with a single owner. Committee members asked about CPI floors, renewal options and comparables; Updike and budget staff explained standard market negotiation practices and appraisal-based valuation. Both items were moved forward to the full Board with the budget analyst’s recommendation.
Next steps: forwarded to the Board of Supervisors for final action.
