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Subcommittee forwards 10‑year lease for DPH at 2712 Mission Street with lower rent
Summary
The committee forwarded a 10‑year lease for Department of Public Health at 2712 Mission Street (32,000 sq ft) at an initial annual rent of $768,000 ($2/sq ft/month), a significant reduction from prior $40.80/sq ft, and including tenant improvements and a potential rental credit; supervisors pressed departments for better lease‑tracking procedures.
The subcommittee advanced a proposed 10‑year lease for Department of Public Health (DPH) community health services at 2712 Mission Street. Marta Bayle of the Real Estate Division described the agreement as a 10‑year lease for approximately 32,000 square feet at $2 per square foot per month (initial annual rent cited as $768,000). Bayle said this reflects a negotiated market rate that is lower than the previous $40.80 per square foot, and that the landlord will provide up to $160,000 in tenant improvements and a rental credit of approximately $216,047 to the city if the lease commencement occurs before March 31, 2012.
Tyrone Navarro, operations manager for DPH community programs, said the site is a key service hub and strongly recommended approval to avoid disruption to clients. Supervisors probed why negotiations and board consideration had lagged after a prior lease expiry; staff said negotiations occurred over many months and that the landlord eventually reduced its asking rate as market conditions became clearer. The budget analyst said the revised rent represents a 41.2% reduction (from $40.80/sq ft to $24/sq ft in the analyst's table) and estimated a 10‑year cost range between about $8.6 million and $9.4 million depending on CPI adjustments and negotiated credits.
No public opposition was raised; the committee forwarded the resolution with recommendation. Supervisors requested further information on the city's overall lease monitoring and expiration tracking practices.
