July 2014

Landmark Status for Henry Adams Building Threatens Tenants

Keith Burbank

A potential zoning change that would be triggered if 2 Henry Adams Street is granted landmark status is worrying some of the building’s tenants. Landmark status would enable the property manager, Bay West Development, to change zoning to office use from Production, Distribution and Repair. And while Bay West Development has already found a tenant to occupy some or all of the office space in anticipation of the change, it hasn’t committed to assuring alternative space for tenants who could be dislodged after their existing leases end. Bay West Development is owned by Chicago-based RREEF.

“Trust me,” is what District 10 Supervisor Malia Cohen heard from Sean Murphy, partner, Bay West Development, at a Land Use and Economic Development Committee meeting held last month. But, Cohen said she was having trouble extending that faith because of the uncertainty facing tenants. Roughly a dozen citizens appeared at the gathering to oppose the zoning change, with an equal number in support. 

In an interview with the View, Murphy said current tenants could move to 101 Henry Adams Street if the top four floors of 2 Henry Adams are converted to office use. 101 Henry Adams is currently 80 percent occupied; 2 Henry Adams is 90 percent full. Murphy said he’d work with tenants to help them transfer to 101 Henry Adams or other nearby space. Remaining lease terms among current tenants vary from 30 days to ten years. 

“I cannot trust them to move us,” said one tenant at the hearing. The same tenant said their business was just getting back on its feet after the recession, and wanted to add more employees, but hiring is difficult in the face of uncertainties related to their lease. 

Jeanne Reynolds, general manager of American Century Floors, had engaged an architect late last year to design its space, but building managers told them not to move forward. 

“At any moment they could say they are not renewing your lease, and after 30 years you have 30 days to get out of the space, said Jim Gallagher, general manager of Garden Court Antiques.

“We do have detailed phasing plans,” Murphy told Cohen. 

According to Murphy, Bay West Development wants to lease office space to Pinterest, which doesn’t fully match with what he told the View when he was interviewed previously, at which point he said the space would be leased to design-focused businesses. Some existing tenants see the zoning change as an opportunity for Bay West Development to raise rents by leasing to technology companies. Other said they use Pinterest in their work, and are sympathetic to their moving into the building.  

The building, constructed in 1915 for mining equipment and supplier Dunham, Carrigan and Hayden, is widely considered deserving of landmark designation. 

At the end of the meeting, the supervisors decided to defer a vote on landmark status, and asked Murphy to consult with existing tenants about his company’s plans. Cohen is evaluating legislation that would allow landmarked buildings to have some office space, but not as much as current law allows. She said that landmarking of 2 Henry Adams Street won’t proceed until she introduces that legislation.

“I am looking for a broad policy to set the zoning. I don’t want to do spot zoning,” Cohen said. “I believe I can strike a balance between PDR and allowing higher revenues to support the maintenance of these buildings, which are old and beautiful and expensive to maintain. But I’m not doing anything until these tenants have all their questions answered.”

The committee will hear the item again July 7, 2014. 

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