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The San Francisco Centre Project, 5th & Market Streets
Client: The San Francisco Unified School District
dashed line separator GG+A was asked to evaluate a ground lease of School District property. The analysis suggested that the $200,000 per year maximum ground lease could be significantly increased if the existing lease were allowed to expire and an RFP prepared for a new building on the site. The School Board agreed and GG+A conducted a series of financial studies to identify the potential value of the site to a developer. The results of the analysis were used in an RFP that offered an option to lease the ground at a minimum of $1,000,000 per year. GG+A assisted in the selection of a bidder and in subsequent negotiations.

The bidder who was awarded the option intended to build a 700,000-square-foot office building plus 276,000 square feet of retail space. The City refused to allow this project. The developer maintained his option payment and, as recommended by GG+A who continued to advise the School Board as the situation changed, the existing structure was demolished at the developer's expense. The developer elicited the interest of The Nordstrom Company who wanted to build their largest store as a part of the project. The School Board's option arrangement and anticipated lease were altered to permit a condominium arrangement for the portion of the project to be built by Nordstrom. The financial complications of a retail project were considered by GG+A and a final ground lease was signed. The entire project opened in 1988, operating on a ground lease that pays $1,000,000 per year plus "overages" to the School Board.




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