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Since 1925, the Pacific Telephone Building on New Montgomery Street has stood as a craggy white cliff on San Francisco's South of Market skyline.

Today it is a construction site. The summit of the 435-foot tower is shrouded in black netting. The office spaces inside are stripped bare of everything but their concrete floors and brick walls. There are holes in the wall where the original windows are being replaced with ones that look similar but have better insulation.

The statuesque shaft hasn't been the focus of such attention since it debuted as the tallest high-rise in the city. But as the 200 bicycle parking spaces planned for the basement attest, the landmark's new lease on life is tied to economic forces that were unimaginable when the San Francisco Examiner greeted the newcomer as "a shimmery, gleaming monument to Talk!"

"Everybody today is looking to create buildings with character. This is a building that already has character," said Christopher Meany of Wilson Meany, which is renovating what's now called 140 New Montgomery with Stockbridge Capital Group. "We want to play up every architectural piece we can, but add every contemporary office amenity we can."

This is a change in focus from 2007, when the developers purchased the tower from AT&T. The idea was to convert the building to large, lavish condominiums, and the city approved the plans 18 months later - around the same time the economy plunged into a recession.

Last year the developers abandoned the idea of posh living and shifted back to office use, albeit of a much different sort than that engaged in during the 80 years when the telephone company was the sole tenant. The developers took a cue from the 26-story building's high ceilings and abundant light and decided to play up the loft-like aspects of the first major work by architect Timothy Pflueger.

The shift paid off: 140 New Montgomery now is 60 percent leased, with tenants that include Yelp. By next spring, the first set of tenants should be handed their hollowed-out spaces, and by next fall the tower should again be a functioning part of the city.







New firm hired

The change in use was costly. The approved residential design had to be scrapped, because it wove seismic upgrades into new structural walls between the planned condominium units. A new architectural firm was hired, Perkins + Will, which worked with the local office of engineering firm Holmes Culley to craft a much different seismic system with a central core of concrete that reinforces the rest of the tower through a paired set of diagonal beams between the sixth and seventh and 17th and 18th floors.

"We looked rigorously at a number of structural solutions, because we didn't want to alter the openness or the natural light," said Cathy Simon of Perkins + Will, who worked with Meany on the restoration of the Ferry Building, another transformed landmark. "It's completely an honor to work on such a building."

The terra-cotta facade will be cleaned and patched as necessary, but otherwise left intact. The lobby will be restored to its Jazz Age grandeur, from the marble walls and bronze fixtures to the plaster ceiling that looks as though it could be embossed leather. Upstairs, almost the only original details that will remain will be the marble walls around the elevator doors; not much else was left behind after a half-century's worth of telephone company "upgrades," Meany said.







Bicycle parking

The one aspect of the project that endured through the change in direction and architects is the more pedestrian-friendly ground floor. The long, narrow lobby next year will be flanked by a restaurant and a cafe in spaces where telephone customers once paid their bills.

The basement, meanwhile, will include no fewer than 200 parking spaces for bicycles, compared with just 21 for cars. There will be lockers and showers and what is billed as a "bike spa" - a workroom for tune-ups and repairs cloaked in wood paneling from the telephone company's former 18th-floor boardroom.

Last month, Aziza’s Mourad Lahlou signed a lease on the big, coveted downtown restaurant space at the historic Pacific Telephone Building. This week, Bar Agricole’s Thad Vogler finalized a deal for the second, smaller space at 140 New Montgomery.

There, he will open Whiteside Company — an all-day cafe, restaurant and bar, named after a turn-of-the-century dried foods company in San Francisco.

“It’s going to be beverage-oriented,” he says. “The idea is nothing unique and original, but an all-day beverage location with a food component, like a Parisian or Roman cafe where you can come any time of the day and have the appropriate beverage for that time of day.”

Of course, as the night progresses, it will evolve into a bar open until 2 am. Bar Agricole’s butcher, Salvatore Cracco, will be in charge of the food which, like the entire project, is anticipated to be more rustic and less complicated than Bar Agricole. So expect “simple foods” out of the butchery program, plus a raw bar.

On the beverage side, Vogler says that they will highlight the repertoire of Bill Boothby.

“He was working in the Palace Hotel just down the street from [140 New Montgomery],” says Vogler. “We are huge fans of his book, so we’re going to focus on his book and excavate old recipes and resuscitate lost ingredients, a number of which are found in that book.”

There will be about 80 seats, half inside and half outside in the back patio, which is connected to the Aziza project. The entire construction — the building renovation and the two restaurants — is scheduled for completion in September 2013.

And how does Vogler, who had been rumored for the project for a few weeks, feel about finalizing a deal next door to the future Aziza concept?

“One of the coolest things about the project is we’ll be neighbors. I love Mourad and I think we both see it as a collaboration.”

“It’s exciting to be a part of this. It’s a seminal piece of architecture. It’s going downtown. It’s with a friend on the other side. I opened the Slanted Door in the Ferry Building with the same developers. Without taking it all too seriously, it’s auspicious.”

“I want it to feel like a San Francisco restaurant.”

Mourad Lahlou is standing in his new restaurant space on the ground floor of the historic Pacific Telephone Building, where the chef-owner of Aziza just signed a lease for the 6,600-square-foot restaurant space.

“I want it to have a sense of place,” he says.

For months now, the entire Pacific Telephone Building — designed by Timothy Pflueger in the 1920s and an Art Deco landmark skyscraper — has been undergoing a substantial renovation, preservation and seismic upgrade, scheduled to be completed in September 2013.

The 26-story building sat empty for years until Stockbridge Capital Group and developer Wilson Meany — the same Wilson Meany who rejuvenated the Ferry Building — purchased it and the nearby parking garage for $117 million. Yelp procured eight floors for its headquarters earlier this year, and half of the 25 floors of office space are already filled.

There are two restaurant spaces on the ground floor, both lining New Montgomery and also spilling out onto a rear area that will eventually be a garden courtyard. Both have 19-foot ceilings and several dramatic 12-foot windows facing the street. Exposed brick and concrete abound.

The smaller of the two spaces, about 2,400 square feet, has no signed deal yet.

As of today, the other is Lahlou’s.

“It’s a great space, first of all,” says architect Olle Lundberg, who will design the restaurant. Indeed, it’s a space that was coveted by many big-name chefs and restaurateurs, even though it never went on the open market.

Diners will enter from New Montgomery into a good-size bar and lounge area. Like at Aziza, there will be a full liquor license. Walking away from the street, the main dining room (roughly 110 seats) will be split into series of sections, as opposed a sprawling room. Further back will be the kitchen. A mezzanine overlooking the entire dining area and kitchen will be used for private dining. Including the courtyard — inspired by the outdoor dining vibe of Morocco — Lahlou expects to have nearly 200 seats.

As such, the size will dictate the food to a certain extent. Since the due date is still far off — September 2013, if not slightly sooner – the food details will crystallize as the opening gets closer. But there will be no tasting menus; Lahlou’s signature take on Moroccan cuisine will likely be more approachable than what’s currently served at Aziza. That said, it will still be tight, says Lahlou.

“I don’t want the space to be a shrine. I want a good vibe, good music,” he says. He doesn’t yet have a name, although “Aziza” and “Mourad” are two early possibilities.

As for the design, Lundberg and Lahlou want to showcase the quirky, historic building, with Moroccan overtones. They’ll keep the big windows, exposed bricks and the like.

“The goal is to figure out how we’re going to design an abstract version of what [Lahlou] loves about Moroccan architecture,” says Lundberg.

“That’s what he’s doing with his food,” he continues. “He started with traditional elements and evolved into his own style. Our goal is to do the same thing with the architecture.”

It’s no secret that Lahlou has been looking for a downtown space since he nixed the 500 Jackson deal a year ago. Now that he has found one, the question again is the fate of the current location of Aziza in the Richmond at Geary and 22nd Avenue.

That’s TBD at this point, but one thing is certain: With 22 years left on a long-term lease, he’ll be staying there. Down the road, there may be a name change or a concept change — a Moroccan Jewish restaurant perhaps? Stay tuned.

Expect updates in the coming months on both the current Aziza and its future sequel.

Last week brought quite a surprise when we learned that the Chinese government is in negotiations to finance and assist in construction of San Francisco's two largest redevelopment projects.

This has the potential to be great news for all of San Francisco. On behalf of labor and business, we are voicing our strong support that the development group led by Lennar Corp. will get the deal with China Development Bank completed quickly.

Lennar and its partners, which include San Francisco's Stockbridge Capital and Wilson Meany, reportedly are in talks with the China Development Bank for approximately $1.7 billion to accelerate development of infrastructure and construction for the Treasure Island and Hunters Point Shipyard-Candlestick Point projects.

We agree it is a shame that no U.S. financial institution has been willing to lend to these projects on reasonable terms. It's no secret that our credit markets have remained incredibly constrained since the housing crisis of 2008. Our infrastructure is crumbling, yet the local, state and federal funding programs to rebuild America are held captive by politics, bureaucracy and a weak economy.

Fortunately, the long-term trends are very positive for the Bay Area and, particularly, for these projects. San Francisco is a world-class city that continues to be a magnet for professionals eager to use their knowledge to change and improve our lives.

The timing is right. Our city is in a housing crunch, and these two projects take advantage of woefully underutilized land to provide more than 20,000 units, with nearly a third of them affordable housing.

We only wish this had happened sooner.

Our construction trades need the jobs. Our businesses need the contracts. With the growing influx of technology companies to San Francisco - and the enterprises that support those companies - we are in need of not only housing but of office, commercial and retail space.

Should we be concerned about a Chinese state-owned enterprise investing in the United States? We don't think so. As everyone knows, the Chinese are growing their own economy and are looking to invest in industrialized nations. Frankly, there is no better place for the Chinese to invest their dollars than back in America and especially in San Francisco, the gateway to the Pacific.

As a chamber of commerce, we work closely with the Mayor's Office and our China SF partnership to provide opportunities for local businesses in China. In fact, we applaud the entrepreneurial spirit of the many U.S. companies that have taken advantage of China's resources; we should willingly accept its capital on our shores.

Wisely, city leaders negotiated development contracts that require the use of quality labor, local workers, local suppliers and local subcontractors. While the construction work may be managed by a global business based in China (with U.S. headquarters in San Francisco), the design and construction jobs will be filled by American workers.

In many ways, San Francisco is the ideal city for the Chinese to make their first attempt at financing and overseeing parts of a major construction project. Our city has close ties with China. Many of our residents are Chinese American. Much of our past has been closely linked with China.

We all should be pushing for this deal to get done as soon as possible.

The easiest decision I ever made while serving on the San Mateo City Council was to oppose a 24-hour card room casino at the race track. Both the city and the track were experiencing rough economic times. A card room to expand gambling options at Bay Meadows was seen as a possible answer. I was a new councilmember when the issue first arose. In the beginning, I had no real objection. My father occasionally played cards for pocket money and I innocently thought a card room would sort of be like that.

When I attended a League of California Cities conference in Los Angeles with a few other councilmembers and staff, we visited Inglewood race track and card room. Inglewood, located near LAX, is a poor urban city with little in common with San Mateo. When we were ushered into the card room, I gasped in surprise at the rows of old despondent men bent over their cards and cigarettes in the smoke-filled room. I changed my mind. This was not right for San Mateo.

I was the only one on the council to oppose the card room. And since I helped start a grass roots movement to fight it, I was persona non grata among my colleagues and some warned I would never be chosen as mayor. However, the community agreed with our efforts and the card room was defeated at the polls.

The New York Times recently featured a front page story on race track casinos linked to the death of too many horses, “Casino Cash Helps Push Cheap Racers to the Limit.” Cited was a casino which opened at New York’s Aqueduct race track last year. It offered richer prizes. But 30 horses died racing there, a 100 percent increase in the fatality rate over the same period the previous year. And it was not the only casino/track where horse mortality has increased. No question, the decision not to have a card room at Bay Meadows was correct.

***

On the other hand, one of the most difficult decisions I had to make was what kind of development to approve when the race track announced it would close. We went through more than five years of community meetings on what the city wanted rather than just reaction to a developer’s plan. It was very important for me to have a very large park equal to Central Park on the site, as well as a development which would encourage people to walk to stores and take Caltrain to work. At the same time, developer Wilson Meany and Associates was proposing a development plan for the site. Many in the surrounding neighborhoods were worried about traffic. Many citizens and some homeowner associations were against any development of any kind and just wanted the land to be kept as open space. That was never an option since the city didn’t own the land and didn’t have the money to purchase it. And horse racing fans and employees were upset.

I remember talking to then city manager Arne Croce about possible uses. We talked about a college campus, a high-tech research campus or maybe even creating a civic center at the site. But none of these ideas turned out to be possible. At last, after many extensive meetings, we had a rail corridor plan approved by a citizens committee and a developer’s proposal to fit that vision. My last vote as a member of the City Council was to approve the Bay Meadows development. That was in December 2005.

***

Today, work has begun on the closed down track. Wilson Meany is creating streets, lighting, sidewalks and utilities. They have submitted applications for two of the new public parks — the 12-acre community park and 1.5-acre neighborhood park. Meanwhile, construction is expected in a few months on 63 two- and three-bedroom townhomes to be built by TriPointe Homes. Another neighborhood of two- to four-bedroom townhomes is also planned. There will also be five commercial buildings designed to LEED Gold environmental standards. All of this is within easy walking distance to Caltrain.

A new Bay Meadows is coming to life. Here’s hoping it’s a great addition to the city and validation of a decision made seven years ago.

Office development is making a comeback in San Francisco.

With downtown vacancies now under 9 percent and rents climbing into the mid $50s a square foot, developers are pouncing on land and redevelopment plays with an optimism not seen since 2006. On Howard Street, Tishman Speyer is digging the foundation on Foundry Square III, a $200 million speculative development. Around the corner at 222 Second St., Tishman Speyer is also looking at a late 2012 construction start date for a 450,000-square-foot, 22-story tower.

Meanwhile, developers are chasing two entitled downtown sites, 350 Mission St. and 535 Mission St., both of which are on the market. In another prime site for sale at 329 Brannan St., a former car wash that could work for either residential or commercial, large office developers have been outbidding the housing developers, according to project broker Daniel Cressman of Cornish & Carey Commercial Newmark Knight Frank.

Squeezing more out of properties

The new focus on ground-up development comes after a 12-month period when San Francisco has seen an extraordinary number of major renovations of existing empty structures, reviving zombie buildings that had been left for dead after the Great Recession. One by one, the city’s inventory of formerly obsolete or mothballed buildings are filling up, prompting landlords to invest hundreds of million of dollars in renovations.

At 888 Brannan St. in the South of Market, SKS Investments is investing $25 million to reposition a largely vacant wholesale jewelry center as headquarters of startup Airbnb, a shining star of the so-called “sharing economy” that has caught fire in San Francisco. Shorenstein Properties is investing $80 million to create a home for tech titan Twitter in the long-empty Western Merchandise Mart building at Ninth and Market streets, an art deco landmark that has been rebranded as Market Square and is also poised to become home to Yammer and One King’s Lane. Along the Third Street corridor, TMG Partners and Rockwood Capital are reinventing and expanding 680 Folsom St. with a new curtain wall skin, an $87 million project that has attracted tenants Macys.com and Riverbed Technology. Shorenstein Properties added four floors to 188 Spear St. and has leased the bulk of the building to Amazon.

The powerful San Francisco-based Yelp has become an influencer of behavior, with everybody from plumbers to pediatricians living in fear of the wrath of the Yelpers.

But when it comes to Yelp employees’ dogs, however, landlord Wilson Meany Sullivan has made clear that what constitutes acceptable canine behavior will not be left to an online audience.

Rather, Yelp’s new lease at 140 New Montgomery St. spells out in considerable detail, and in impressive legalese, doggie dos and don’ts: Tenant’s Dog — as referred to in the lease, in the singular, complete with the capitalization — must be on a leash. Tenant’s Dog must be current on all vaccinations and provide documentation to the landlord. Tenant’s Dog may not be brought to work if it has contracted a disease that could “potentially threaten the health or wellbeing of any tenant or occupant of the Building (which diseases may include, but shall not be limited to, rabies, leptospirosis and lyme disease).” Tenant’s Dog may use only the elevators dedicated to Yelp. Tenant’s Dog may not spend the night in Yelp’s office. Tenant’s Dog must not “bark excessively or otherwise create a nuisance.”

Tenant’s Dog must not emit “any objectionable dog related noises or odors.” Last but not least, the lease also goes into detail about where Tenant’s Dog’s bodily waste must go — designated trash receptacles only.

And Tenant’s Dog will be punished with more than a rolled newspaper across the nose, or a bad Yelp review, should it be problematic: “Landlord shall have the unilateral right at any time to rescind Tenant’s right to have Tenant’s Dog in the Premises, if in Landlord’s reasonable judgment, Tenant’s Dog is found to be a substantial nuisance to the Project (for purposes hereof, Tenant’s Dog may found to be a “substantial nuisance” if Tenant’s Dog defecates in the Common Areas, damages or destroys property in the Project or exhibits threatening behavior).”

Down, landlord ...

Wilson Meany announced today that Tom Sullivan is leaving the firm to pursue other real estate opportunities in the Bay Area.

Sullivan, former president of Wilson/Equity Office, collaborated for the past decade with partner Chris Meany at Wilson Meany Sullivan, a prominent San Francisco real estate development and management firm. Effective today, WMS is changing its name to Wilson Meany. The firm is retaining all of its executives and employees under Chris Meany, who will continue as managing partner.

“WMS has great projects and some of the most outstanding real estate professionals in the Bay Area,” Sullivan said.  “The firm will continue to set the standard for high quality, innovative development projects under Chris’s leadership.”

Said Meany: “Tom has been a great leader at our firm.  While we are sad to see him go, we are happy to see a friend pursuing his desired path and know he will succeed in his new endeavors.”

Wilson Meany is currently developing, by itself or in joint ventures, 140 New Montgomery and Treasure Island in San Francisco, Bay Meadows in San Mateo, Hollywood Park in Inglewood and The 88 in San Jose.

National Builder Launches Second Neighborhood at Progressive Urban Village on the Rail Line in San Mateo; Developed by Stockbridge and Wilson Meany Sullivan

SAN MATEO, Calif. – April 27, 2012 – Stockbridge and Wilson Meany Sullivan (WMS) have announced that Shea Homes will be the second homebuilder at Bay Meadows, California’s largest Transit Oriented Development (TOD), now rising along the Caltrain line in San Mateo. Immediately following the closing of TRI Pointe Homes (TPH), Shea Homes has purchased the second residential parcel available and plans to construction as early as summer 2012, with model home openings and sales launching in early 2013. Shea Homes will begin work on its Landsdowne residences, available in eight floor plans with a mix of two-, three- and four-bedroom homes from 1,150 up to 2,200 square feet. Landsdowne homes are oriented to the greenery of Bay Meadows’ 12-acre park. Consistent with Bay Meadows’ pedestrian-friendly approach, garages are at the rear of each home. Landsdowne, as well as TPH’s Amelia residences, are designed by KTGY Architecture + Planning.

The comprehensively sustainable Bay Meadows will also feature five LEED-certified office buildings, a traditional town square and main street retail.

“Signing Shea Homes exemplifies the positive momentum Bay Meadows is generating, and we are very excited to get construction underway on two residential neighborhoods this summer, with sales starting in late 2012,” said Christopher Meany, partner at WMS. “Shea Homes has long been recognized as one of ‘America’s Best Builders,’ and its progressive approach to anticipating consumer demand is perfectly aligned with Bay Meadows.”

The initial neighborhoods at Bay Meadows will set the

standard for people who want to live in a comprehensively sustainable and environmentally friendly atmosphere at the forefront of innovation and comfort.

“We’re looking forward to being a part of Bay Meadows. The outstanding location, progressive design and well thought-out vision make it a great fit for Shea Homes. We put a great deal of care into our homes and communities; Landsdowne in Bay Meadows will be no different. We’ll bring our innovative style, quality construction and high level of customer care to further enhance the Bay Meadow’s urban village” stated Layne Marceau, President of Shea Homes Northern California.

Stockbridge and Wilson Meany Sullivan Wilson Meany SullivanLatest from The Business JournalsTishman set to start SoMa constructionTRI Pointe Homes buys first Bay Meadows parcelTishman Speyer to start Foundry Square III in S.F.'s South of MarketFollow this company have sold a parcel at Bay Meadows to Shea Homes Shea HomesLatest from The Business JournalsHome builders see signs of recoveryDenver's Best Corporate Counsel nominees discuss industry challengesShea Homes introduces full-size luxury duplexes at VistanciaFollow this company , the second homebuilder to commit to the San Mateo horse racetrack-turned-transit-oriented development.

Shea Homes will build the 93-unit Landsdowne community, a development overlooking a 12-acre park that will feature eight floor plans and a mix of two-, three- and four-bedroom homes. Unit size will range from 1,150 to 2,200 square feet.

The price was not disclosed, but brokers in the market said the deal was likely north of $200,000 per buildable unit, or $18.6 million.

The land sale comes just two weeks after TRI Pointe Homes became the first developer to bite off a piece of Bay Meadows, which Stockbridge and WMS spent a decade entitling and preparing for development. Stockbridge and WMS are the master developers, but are selling off parcels to a variety of homebuilders. TRI Pointe Homes will build 63 units on the site.

Bay Meadows includes three public parks totaling 15 acres, a community garden and various open spaces throughout the property. The final development will include 1,171 residential units, up to 1.5 million rentable square feet of office space and approximately 90,000 square feet of retail space. With onsite amenities such as health care, child care, financial services, and dry cleaning, Bay Meadows is designed to be a place where residents can rely on public transportation and walking.

Shea Homes plans to start construction as soon as summer of 2012 with model homes and sales starting in early 2013.

Consistent with Bay Meadows‚ pedestrian-friendly approach, garages are at the rear of each home.

The architect for Landsdowne is KTGY Architecture + Planning, which is also designing as well as TPH's Amelia residences.

"Signing Shea Homes exemplifies the positive momentum Bay Meadows is generating, and we are very excited to get construction under way on two residential neighborhoods this summer, with sales starting in late 2012," said Christopher Meany, partner at WMS.

Layne Marceau, president of Shea Homes Northern California, said Bay Meadows was a natural fit for his company.

"We're looking forward to being a part of Bay Meadows," Marceau said. "The outstanding location, progressive design and well thought out vision make it a great fit for Shea Homes. We put a great deal of care into our homes and communities. Landsdowne in Bay Meadows will be no different."

Meany said, "mobility and aspiration have a long history" at Bay Meadows.

"In its earliest days, Bay Meadows was the site of an airfield," he said. "The land then became home to Bay Meadows Racetrack, a place passionate about the pursuit of glory and achievement. Now, the evolution of mobility culminates in this new urban village at the rail station and continues a legacy of forward thinking, progress, energy and aspiration for those looking for an inspired way of life."