Just got this back from the Guerrero property owner. Mostly complete term sheet. Last item of pushback would be to extend the ‘lock-in purchase’ for one more year to match the lease term (I think that was just an oversight). They turned down our request to deduct rent from the purchase price, but left the rest largely unchanged.
Fyi - this is an LOI and is not binding on either party - but is an ‘in good faith’ representation of lease terms.
Guerrero LOI - V4.pdf (140.5 KB)
At any point now we could start lease negotiations, and the process should go rather smoothly from there. With the ‘Early Access’ clause - as soon as we make a security deposit we have access to the building, with the official lease starting 8/01/19.
In my opinion, the biggest draws of this space are:
- About 50% larger (7,500 vs 5,200 sqft)
- Ground level and ADA accessible
- Garage doors, concrete floors, give us lots of new capabilities. Makes moving tools super easy.
- Lock in an option to buy the building (at $4.0mln)
- 2.5 blocks from current NoiseBridge
I just re-watched the video and the space looks pretty amazing and very accessible and open on the ground floor, although it’s more expensive and the yearly rent hikes scare me a bit. If we were allowed to hold more events in the space that could increase revenue to cover the increased rent but I know very little about zoning and how creative we can be or what if any pushback we’ve had from the city about events. The first floor would be perfect for music and you could maybe even put a DJ booth/ little stage overlooking it from above. I guess other ways to increase revenue would be to consider subletting certain areas on the second floor but not sure how good NB would be as a landlord.
I called the planning information desk today and they filled me in on a few details about 668 Guerrero. They were surprised that a warehouse was located in an RH3 residential zone, but on closer look there is something called a Limited Non-Conforming Use exemption that was granted in 1981. This designation allows more leeway in terms of commercial uses. I guess it used to be a glass manufacturing location. They also have something called a “Conditional Use Authorization” (I should have asked what the difference is between LNCU and CUA but it seems like they mean similar things).
A permit to demolish was issued in 2017. They said we should consider the above if this is a long term strategy, however, according to them this permit is only valid for 3 years, so if the building is not demolished before then they would need a new building permit.
Limited Non Conforming Use means that we can do anything that would happen in an “NC1/ Neighborhood Commercial 1” designation, unless there is an over-riding more restrictive use. Because it is within 1/4 mile of a Valencia St. District they think that any sort of entertainment venue is off limits because of this.
Based on my description of the hacker space and community serving educational mission (as well as the fabrication and building of various projects that goes on), they said what we would likely want to designate ourselves as “Institutional Use”.
If we wanted to be really safe they recommended trying to get a Zoning Letter of Determination from the Zoning Administration. This should be on the website, costs something like $600, but could take a month (they didn’t know how long). When I pushed the issue of timing they also said we could try to hire something called a permit expeditor (consultant) and that maybe they could help with the determination process.
On further research there is also something called a zoning verification letter that takes 1-2 weeks:
A Zoning Verification Letter (ZVL) is a signed letter confirming the zoning details of a property (the current land use and zoning for a specific property, including information on variances, special permits/exceptions, ordinances or conditions, and violations).
Thanks for the help on that @david! Paging @hicksu and @rando who have done this research as well.
I forwarded a some of this info on the Real Estate agent in case he may know more about obtaining a ZVL. Any chance you guys will be around for the next Tuesday meeting? I’d like to get a good checklist of what we’d need to confirm our use works in this space (or any space really).
I will be working in the Mission on Tuesday afternoon so should be able to make the meeting.
Sorry, I can’t do the meeting.
I think David has taken the right steps. Just need to keep following them to know what our zoning is. A rough idea is good to plan with, and getting it formalized tells us exactly what we need to do.
If we don’t get it done in time for 668, we’ll have it next time.
You might want to draft the consensus item for 668 and start that process. Better to start dealing with those questions in parallel if possible.
You might need the zoning info to consense, but having the item written up in draft status will save some time.
I am sending back on last revision to the term sheet now. Pushing to lock in one additional year on the purchase option. Right now it is a 4 year lease, with a 3 year purchase option. I want to push for a 4 year option.
I imagine they will follow up pretty quickly on that and want to start drafting a lease. I’ll keep everyone posted.
$4m option to buy is terrific. Smart move. Will position us well on the campaign. “We can buy the place we’re in now or go shopping.”
As long as the zoning works out for our use, let’s go for Guerrero.
@nthmost’s original conception of Guilds would probably help this a lot!.. Just sayin’.
Did Marc the realtor reply about the zoning, letter of determination, or zoning verification letter since last week? The owner should have some data confirming the “effectively NC1” status. LOD takes 6-8weeks and we may not have time for that. ZVL may help, takes 1-2 weeks, but if the owner can provide us this info now it would be extremely helpful.
“We are a Glass Laser Bong factory” – everybody comfortable with that?
BTW I’m showing that our supervisor for 668 Guerrero would be Rafael Mandelman (District 8).
I am totally ok with that.
This space looks amazing and so is the location since it is so close to Dolores Park. Also love how we will have the option to buy later!
Someone should probably add this to the consensus thread before next Tuesday meeting. Any volunteers?
Someone (literally anyone) could just open the binder and pencil “move to 668 Guerrero” and date it. Also nice to start a Pros and Cons list so everyone can chime in even anonymously (is there a way to do that on discuss?).
Would be really nice to hear back from Marc the commission earning realtor regarding thoughts on zoning… the ZVL takes 1-2 weeks and costs something like $175. If its superfluous we should skip it, otherwise we should pay the fee and submit it now.
Yesterday I wrote a letter directly to the city planner who approved 668’s demolition but haven’t heard back. Also, the planning information desk office is on Mission Street and they are staffed with at least 3 people taking calls and available to meet during the day. Expect to wait up to an hour but then you’ve got their undivided attention. Still they’re just an information desk not a legally binding statement writer.
I can add it to the Consensus thread tonight if no one beats me to it.
I spoke to Mark on the phone for a bit yesterday on the zoning. He seemed to think we won’t run into an issue with the zoning, as it defaults to NC2 (we are NC3 right now). But he did say to use caution getting a ZVL. Pretty much it is better to ask forgiveness than permission when dealing with the city.
David, since you’ve done more research than I have on this, do you want me to loop you in on an email with Mark and set up a time to call can ask him on the details. We could also reach out to Trevor (the agent working with the owner) for multiple opinions.
Yes loop me in by email! Happy to participate on any call. I cant say I’ve done more research, just covered some aspects in my own way (nice to get 2nd and 3rd opinions). Very useful to hear that feedback from Marc about the ZVL ( that we should NOT request one at this time ).