- May 25, 2001 - Shorenstein Co. is pushing ahead with plans to rehabilitate San Francisco's historic Mining Exchange building at 350 Bush St. and to add a 19-story office tower.
A market downturn and the scarcity of land to develop means the city's largest property owner may be alone in seeking approvals this year to develop a major office property in the city.
The proposed $150 million development would encompass 360,000 square feet of office and 7,000 square feet of retail shops. The project will also include the complete renovation of the 78-year old Mining Exchange building, which has been vacant since the 1980s.
"This is the last large undeveloped site north of Market Street," said Tom Hart, executive vice president of Shorenstein and the project manager for 350 Bush.
An environmental impact report has been issued for the site and public comment will be heard later this summer. Assuming Shorenstein's project receives all necessary approvals to develop the site, the building would break ground in 2002, with completion scheduled for 2004.
Beauty Contest
The biggest hurdle the company must clear is getting approval in the city's annual competition for office space. San Francisco allocates just 875,000 square feet each year for larger office projects in a process that developers refer to as the "beauty contest".
Last year's competition was heated, with developers working to impress city planning commissioners with plans for additional housing and nonprofit space.
This year's contest won't be as spirited. Little land is available in the city's central core and vacancy rates South of Market will likely dissuade developers and lenders from investing in sites far from downtown.
"I haven't seen anything on horizon of a large-building nature," Hart said. "There were very few building sites anyway, and most have been presented. Development South of Market is highly questionable at this time."
Catellus Development Corp., with its massive Mission Bay project, has the most developable land of any company. Although the San Francisco-based company has an active application for 270,000 square feet, Mike Monroe, who handles commercial leasing for Mission Bay, said Catellus is undecided about competing in this year's contest.
"It will depend on the preleasing efforts with the first two buildings," Monroe said.
Catellus is currently building a 275,000 square foot speculative building and has received approval for another 150,000 square foot building currently on hold.
Another possible candidate is A.F. Evans Development Inc.'s proposed 237,500 square foot 601 King St. building, which lost out in the 2000 contest and will leave its application in the running for this year, said company spokesman Steven Kuklin. However, the company is exploring other uses as well.
No other contenders have come forward with plans for a large office project, the city's planning department confirmed.
Years in the works
The 350 Bush project has been in the works for years. Shorenstein and minority partners Swig Co. and New York's Weiler-Arnow Investment Co. have owned the Mining Exchange building since the 1960s, but a shadow ordinance, height limitations, and the necessity of restoring a historic landmark have discouraged the owners from building on the site until now.
The 5,700 square foot Mining Exchange building, designed by Miller & Pflueger, opened in 1923. The façade has four pairs of fluted columns and six composite columns. The building served as a trading hall for mining commodities until 1928. The Mining Exchange was replaced by the San Francisco Curb Exchange, which operated there until 1938. After the Curb Exchange moved, a variety of commercial tenants occupied the building until the 1980s.
Shorenstein and its partners began assembling the land around the Mining Exchange Building for the 350 Bush development, which includes six parcels, in 1979. The latest acquisition last year.
Shorenstein Co. hopes its existing tenants will consider expanding at the new building.
"We have a substantial amount of office space in the city and are always talking with tenants about their changing needs and would expect to throw this (building) into the mix," Hart said.
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