The Metropolitan Transportation Commission board of directors voted 12-2 Wednesday to leave Oakland and spend $180 million to buy and rehabilitate a San Francisco building to serve as its new headquarters.

The decision, opposed only by MTC board members Scott Haggarty, an Alameda County supervisor, and Mark Green, the mayor of Union City, was a blow to Oakland officials. Mayor Jean Quan had urged the commission to not rush into a decision to abandon Oakland in favor of buying an older building it knew little about.

The impact of MTC's action on the Association of Bay Area Governments is not entirely clear. The two public agencies share space in Oakland at 101 Eighth St., and along with the Bay Area Air Quality Management District in San Francisco, had hoped to find a suitable location for a shared regional facility in either San Francisco or Oakland. About 60 percent of the agencies' combined workforce live in the East Bay.

Although the air district board voted July 18 to approve the purchase of a building at 390 Main St. in San Francisco, ABAG's executive board in closed session last week "politely declined to endorse" the move to San Francisco after several East Bay officials raised questions about the real estate deal and the absence of an Oakland choice, said ABAG Executive Director Ezra Rapport.


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Rapport said the board last week left open the possibility of reconsidering its vote once it had a chance to fully vet the pros and cons of both the San Francisco site and a new development site favored by Oakland officials at 1100 Broadway. But the MTC board opted to move ahead Wednesday without ABAG's endorsement, Rapport said. He said the door is still open for ABAG to relocate to San Francisco, but the agency owns one-third of the Oakland building, and it could just opt to stay put.

"We're very disappointed," said Oakland Deputy Mayor Sharon Cornu of the transit agency's action. "We think Oakland is the best project, the best location and the best value. We will continue to pursue the joint headquarters facility."

For Oakland, the effort to keep the government agencies is a matter of pride as well as economics. The city does not collect property tax revenue on government-owned buildings, but the jobs and economic benefits of new construction would give a boost to the region by creating new jobs and putting many unemployed people to work, Quan said. As Oakland's economy goes, so goes the regional economy, she added.

The selection criteria defined by the agencies required that the new regional facility be within one-half mile of BART and other public transit. It had to contain at least 350,000 square feet of rentable space and meet seismic and Americans with Disabilities Act codes, among other qualifications.

After considering the pros and cons of several sites, the 500,000-square foot building in San Francisco's South of Market area emerged as the preferred location, although it is one-half mile from BART. The three combined agencies need less than half the space, and the rest will be rented out to recoup costs. It also allows room for other government agencies such as Bay Conservation and Development Commission to move in.

But several speakers who use wheelchairs said the San Francisco location and building are not accessible for people who don't drive or who have mobility impairments. "It would be hard for our seniors and disabled people to participate in meetings if (the agencies) moved to San Francisco," said Carmen Rivera-Hendrickson, an advisory board member of the Public Authority of In-Home Supportive Services of Alameda County.

Oakland business leaders argued that the project at 1100 Broadway wasn't given adequate consideration. The site has already received its planning entitlements for a Class A, LEED-certified office tower and is located over a BART station.

According to MTC documents, a financial analysis determined that the new construction costs took the project out of the running. But Daniel Kingsley, managing partner of SKS Investments, said his team has been able to shave more than $25 million off the construction costs, ending up with an estimate far below the almost $180 million approved Wednesday by MTC and the Bay Area Toll Authority, which will fund the project.

The MTC board authorized the creation of an escrow account in the amount of $105,750,000 to purchase the 390 Main St. building, plus an additional $74,026,515 for building improvements and contingencies.

Contact Cecily Burt at 510-208-6441. Follow her on Twitter.com/csburt.

MTC move
The MTC board voted to move its office from Oakland to San Francisco.

$180
million
Amount allocated for project

500,000
Square footage of existing building to be renovated