Despite offering to help displaced businesses find space elsewhere, technology company Pinterest suffered a setback Monday in its bid to transform an historic light-industrial property into its office headquarters in the Showplace Square Design Center.
In recent years, San Francisco has gone to great lengths to protect real estate in the eastern neighborhoods for light manufacturing, otherwise known as production, distribution and repair (PDR), a vital source for blue-collar jobs.
Pinterest, a virtual pinboard company, has proposed to move its headquarters into the approximately 300,000-square-foot 2 Henry Adams St. building, which would result in the displacement of existing tenants. To enable the move, the company would need to benefit from a loophole in the PDR zoning, which allows for conversion of light-industry space into office space if the building is landmarked. The property is formerly the longtime home of the Dunham, Carrigan & Hayden Co., one of The City's founding businesses, according to city documents.
But the landmark proposal by the building's property management firm, Bay West Development, was brought to a halt Monday by the Board of Supervisors Land Use and Economic Development Committee where it faced opposition from former Mayor Art Agnos, tenants of the building and the Potrero Boosters neighborhood association.
The debate illustrated the ongoing pressures between The City's growing technology industry and long-standing tenants.
"We feel that it's actually just an encroachment of technology-social media uses into the area. That sort of creep is very difficult to undo and it concerns us greatly," said J.R. Eppler, president of the Potrero Boosters.
In a statement released prior to the committee vote, Mike Yang, Pinterest's general counsel, addressed concerns saying, "Pinterest isn't just a number crunching machine but a community of creative people, including designers, decorators, and home decor merchants, who are joined together by our service. We'd love to stay in this great neighborhood and have our company embedded with the very design community that's at the heart of our service."
Existing tenants like Jim Gallagher, general manager of Garden Court Antiques, have fought the change of use proposal, calling the building "a shining example of what PDR space should be. It is profitable, well-maintained and 95 percent full of viable businesses."
Sean Murphy of Bay West said the firm had taken strides in the preceding weeks to address many of the concerns of displacement of the 77 leasing tenants. That includes having found alternate space at the company's nearby Galleria building at 101 Henry Adams St. and offering to pay relocation costs. Pinterest has also offered to pay two months of rent to help displaced tenants remain in the area.
"The vitality of this neighborhood and this district are really important to us," Murphy said.
Supervisor Malia Cohen, who represents the area where the building is located, sided with opponents.
"This decision today sets an important precedent," Cohen said. "I'm just not comfortable with moving this forward today."
The committee approved a motion to advance legislation to the board next week that would make it more difficult for such property conversions to occur by requiring a conditional-use permit. These special permits require more public notice and can be appealed to the Board of Supervisors.