February 14, 2013

Muni Will Pay $131,250 Per Month To Lease The Pagoda Theater Site

North Beach Pagoda Theater (Image Source: MapJack.com)

As we reported last week:

While Muni has a plan to demolish the derelict Pagoda Theater and extract the Central Subway tunneling machines from the North Beach site rather than digging up Columbus Avenue for the task, they don't yet have a lease. As such, the Planning Commission's scheduled vote to approve the plan has been delayed by at least a week while Muni and blighted building owner Joel Campos continue to negotiate.

Not exactly negotiating from a position of strength, Muni has agreed to pay Campos $3.15 million in rent for a 24-month lease. In addition, Muni will pay for the demolition of the Pagoda Theater and ask San Francisco's Planning Commission to declare the site a Special Use District, clearing the way for the five-story Palace at Washington Square to rise.

Pagoda Theater Rendering 2010

Pagoda Theater Demolition Vote Delayed Until Muni Has A Lease [SocketSite]
Demolition Of Derelict North Beach Pagoda Theater Set For Approval [SocketSite]
A Plan For San Francisco's Central Subway To Stop In North Beach [SocketSite]

First Published: February 14, 2013 2:45 PM

Comments from "Plugged In" Readers

Still cheaper than buying it outright... but a shame they couldn't use condemnation or eminent domain and put a subway stop there.

Posted by: James at February 14, 2013 3:06 PM

Given everything the owner of this property has been through with our city and the local neighborhood warlords, I'm surprised he'd didn't rake them even harder...

Posted by: warehouse at February 14, 2013 3:25 PM

The city should have taken it by eminent domain, for a future North Beach station. Have a temporary park there in the interim.

Posted by: Dan at February 14, 2013 3:34 PM

Campos is going to get 3 million dollars, free demolition, plus a free basement.

Posted by: Wai Yip Tung at February 14, 2013 3:35 PM

Government negotiating with other peoples' money.

Posted by: Unwarrantedinlaw at February 14, 2013 3:41 PM

What Dan said. If I were mayor, I would have had just cancelled the negotiation outright. The site was and is blighted and we're in a post Kelo v. City of New London world. Talk about a lack of creative thinking, this was a situation screaming out loud for an eminent domain transfer of the land, even if an actual station was never in the cards.

The City could have turned a profit and punished the property owner who had a building just sitting there deteriorating for years as a side benefit.

Posted by: Brahma (incensed renter) at February 14, 2013 4:11 PM

I wonder if MTA also considered the parking lot that is about 50 feet north of the Pagoda. I don't think there is any foreseeable plan to develop that lot. Probably would have been cheaper since MTA wouldn't have to raze an existing building.

Posted by: Jim at February 14, 2013 4:16 PM

What's market rate rent for an abandon building that cannot be occupied? Zero. $131k/month for blight and paying overtime on driver's birthdays - no wonder the buses aren't maintained and never arrive on time.

Posted by: SFSquee at February 14, 2013 7:43 PM

this is the perfect example of snatching defeat from the jaws of success. i can't believe how such an obviously good solution was passed over for this boondoggle.

Posted by: yao at February 14, 2013 8:03 PM

Does anyone know WHY they didn't eminent domain this place? And who was 'negotiating' on behalf of the city?

Posted by: jack at February 14, 2013 10:03 PM

Martin Kirkwood, a broker with Urban Green Real Estate, was apparently negotiating on behalf of Campos. A man to whom we should all tip our hats in respect, though perhaps a bit of irritation since it's our tax and fare money that he has arranged to pour into Campos' pockets.

Campos apparently owns a couple of taquerias and has controlled the Pagoda site since 2009, but couldn't get financing to develop it. That problem is probably solved for him now. Basically MUNI is going to pay him to develop it.

Posted by: jack at February 14, 2013 10:10 PM

Sigh...

Here is the more pressing issue- Let's say they remove the drill, and they let this guy go and build this apartment building. When, or if, they ever get around to building a North Beach station or extension to the piers- how are they going to put the drill back in the ground? You wanna bet they would need to tear up Columbus? Infrastructure requires long-term thinking, and apparently we are no longer capable.

Posted by: Adam at February 15, 2013 12:28 AM

All that fighting for years and this will become just another ugly condo building.

Posted by: etslee at February 15, 2013 9:04 AM

I will gladly welcome the tunneling machine under my own place for that kind of money. Plus I would get a free new basement!

Posted by: lol at February 15, 2013 10:12 AM

Adam's point is a big concern. The only hope for the CS to pay off and carry significant volumes of passengers is for it to be extended. All of the boring work should be done in one shot because insertion/extraction of the TBM is so expensive ($3M just to lease the extraction site !). The unused part of the tunnel can remain unfinished until funds are acquired to complete the extension.

Posted by: The Milkshake of Despair at February 15, 2013 12:09 PM

Does anybody have any idea what the value of that lot is?(I don't). It is fine to talk about eminent domain but in this country (unlike China) one still has to pay the owner the fair market value of the property under eminent domain. The Kelo decision didn't change that (and really is irrelevant to this discussion as taking a property in order to build a subway has always been considered a public use). My guess is that even if the City had tried to use eminent domain, the owner could have delayed the process significantly in courts, so the City decided it was cheaper and easier just to rent it.

Posted by: NoeNeighbor at February 17, 2013 12:53 PM

Because subway ridership estimates have dropped from 100,000 yearly riders to 35,000, MUNI now says the subway when operational will "eat $15.2 million in yearly O&M costs — siphoning resources away from a perpetually underfunded system."
(SF Weekly)

No wonder a special article by the Wall Street Journal called the Central Subway a "a case study in government incompetence and wasted taxpayer money."

The extraction of the boring machine at the Pagoda theater is all about Federal funds that are available for this additional project (partially) vs. leaving the machine in the ground for future expansion which would not receive funding. "Muni has the feds' blessing to dig into North Beach — provided it does so "for construction purposes" related to the current (funded) phase of the project. Digging the tunnels as a means of extracting the boring machines is considered "for construction purposes."

Someone needs to save us from the SFMTA / MUNI "planners".

Posted by: SFMTAwatcher at April 12, 2013 4:05 PM

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