[Editor’s Note: With the San Francisco Board of Supervisors Land Use Committee scheduled on Monday, July 7, to act on a proposal to allow the new owner of the San Francisco Design Center  to evict existing tenants to accommodate tech company Pinterest, Jim Gallagher of Garden Court Antiques, one of those tenants, wrote the following guest editorial for the Guardian.]
The San Francisco Design Center has been a doing business at 2 Henry Adams street for the last 40 years. During that time it has created thousands of good paying jobs in the city. We are currently at risk of losing the majority of the building to tech office space. The building is zoned for PDR-Design but a loophole in the law is being exploited by the new owners, a Chicago based investment firm. This would lead to the loss of SF based small businesses and the jobs that they create.
We have worked with countless interior design firms, architects and contractors as a resource for their projects. In addition, we are an intrinsic part of a network of the PDR(Production, Distribution and Repair) businesses here in San Francisco. These are the upholsterers, fabrication workrooms, cabinet makers, finishers, metal workers, installers and movers that make up our industry. This industry offers above average paying jobs to a variety of people from different cultural and ethnic backgrounds that don’t necessarily have college degrees. These jobs and those that work at them are being squeezed out of this city and when they are gone, we lose yet another piece of the soul of San Francisco.
There is no question that PDR space is being lost in San Francisco. A recent study of PDR space in SF, showed that we currently have the lowest available PDR space of any major American city at less than 7 percent. Mayor Lee along with Supervisors Cohen and Campos introduced legislation at the end of last year to expand the amount of PDR space and shore up the manufacturing and light industrial sector in the city. Why then, would the Board of Supervisors even consider giving up a quarter of a million square feet of PDR space that is currently 90% occupied with viable PDR businesses?
The sad reality is that it is a simple matter of corporate greed. The new owners of the Showplace Building at 2 Henry Adams bought the building as a PDR building, knowing the use limitations of designated PDR building and immediately began to find ways around the laws. The loophole that they discovered was the Landmark designation.
The Landmark designation was an exception put into the PDR protections in order to help with the cost maintaining some of the historic architecture that is often found in these PDR buildings. The idea being that PDR rents do not always bring in enough income to retrofit and maintain these old buildings. The Landmark status would allow the owners of PDR buildings to rent out part of the building as higher paying office space in order to offset the retrofit and maintenance cost. This sounds like a good idea until you bring in the greed factor. This Landmark exception has become the favorite loophole for corporate investors and greedy landlords to move out PDR businesses all over the city.
In the case of the Showplace Building, it is currently 90 percent occupied by PDR-Design businesses. According to the building owers, there are approximately 262,000 square feet of rentable space in the building. The Common Area Maintenance or CAM fees that tenants of the building pay beyond their monthly rent is $1.25 per square foot per month. This would mean that the owners of the Showplace building are currently bringing in nearly $3,500,000 just in Common Area Maintenance fees annually. In what universe is this not enough money to maintain a building that was fully retrofitted 15 years ago and is only five stories high?
The idea that this building needs to granted Landmark status from the city in order to create enough revenue to maintain the building just does not pass the smell test! This is a case of simple greed on the part of a Chicago based investment company. They believe that they can skirt the laws that are in place to protect San Francisco based small businesses and San Francisco workers. They do not have the best interest of our city or our workers in mind. They simply want to exploit this Landmark loophole in the PDR protections to line their own pockets.
I would hope that the members of the Board of Supervisors and Mayor Ed Lee do not let this happen. Please consider the consequences to our city. Do not choose to allow a Chicago based investment company to skirt our laws and exploit this loophole. Do not allow this greed to put several San Francisco small businesses out of business.
This building is 90 percent full of viable PDR businesses. We pay nearly $3.5 million dollars a year to maintain this building. This is the perfect example of what a well-run PDR building should look like. This building is this beautiful and well-maintained because of us. Please don’t allow the exploitation of the Landmark status to kick us out. We built our businesses here because we love this place and we want to continue to work and thrive here.