Monday, November 02, 2015

California Stem Cell Agency Moving This Month to Oakland, Pushed Out of San Francisco by High Rents

By the beginning of next month, California’s $3 billion stem cell research effort expects to be safely ensconced in its new headquarters in Oakland, once the stomping grounds of author Jack London and actor Tom Hanks and still the home of California Gov. Jerry Brown.

Building housing new HQ of CIRM
The move will cost about $1.8 million, according to the agency, which says it will save money over the long term compared to staying in San Francisco, across the bay from Oakland.  The cost of office space in San Francisco is soaring, fueled by tech firms awash in cash.

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, has enjoyed a rent-free, 10-year stay in what is now a sizzling real estate location in San Francisco. The agency’s offices were provided as part of an $18 million package offered by San Francisco, which was competing with other cities in California.

Maria Bonneville, CIRM’s director of administration, said in an email last month to the California Stem Cell Report,
“Given the cost of remaining at our current location, we had no choice but to move.” 
(The full text of her email is here.)
Figures in Bonneville’s email show that the move will cost an estimated $1.8 million, including $828,300 in tenant improvements. The landlord will pay an additional $891,520 for the improvements, which will total about $1.7 million. The next largest expense in the move, scheduled for the Friday after Thanksgiving, is $371,043 worth of new furniture.

Bonneville said the existing furniture, again donated, is 10 years old, not ergonomic and will not fit in the new space, which totals 17,000 square feet instead of the current 19,500. 

Some CIRM staffers will be losing their offices. The new space is slated for only 12 private offices compared to 39 at the current location.

Bonneville said,
“Although CIRM will incur some one-time costs as a result of its relocation, we believe that the space is better designed to facilitate the CIRM team’s execution of CIRM 2.0 and beyond, and CIRM will realize more than $2 million in savings over the course of the lease compared to the costs of remaining in its current space.”
She said,
 “Indeed, even at $75 per square foot for our current space, in the first year alone, CIRM will save approximately $1 million in rent ($501,569 in Oakland compared to approximately $1.5 million (19,500 sq. ft. x $75).
Bonneville elaborated,
“Over the next five years and four months, CIRM would pay approximately $8 million to remain in its current office space.  The costs for rent in Oakland will be approximately $3.975 million (assuming CIRM occupies the entire premises, including the 15th floor, for the full term).  Thus, even with CIRM bearing some of the costs of tenant improvements and other one-time relocation expenses, CIRM will realize substantial savings from the move and it will occupy space that is better designed to achieve the agency’s mission.” 
The agency has space on two floors of a building at 1999 Harrison Street with the lease on the 15th floor running three years and five years on the 16th. The agency is currently projected to run out of funds for new awards in 2020 and may see its current budgeted staff of about 55 shrink as that year approaches.


Capturing the headquarters of California’s world-renown stem cell agency is a nice score for Oakland. It has long been a poor cousin to San Francisco, lacking the glitter and romance of the city that was once known as Baghdad-by-the-Bay. No one sang about “losing their heart" in Oakland, as Tony Bennett has famously done about San Francisco.

Oakland, 1901. CIRM's  new HQ is on Lake Merritt, shown
at the lower left of  the map. 
But Oakland has its share of stories, famous personages and interesting history. Huey Newton, a co-founder of the Black Panthers, grew up in the city, along with Ed Meese, former U.S. attorney general and close advisor to former President Reagan. Clint Eastwood had his roots in Oakland in addition to Tom HanksJerry Brown was mayor of Oakland for eight years. He still has his voting residence in that city.  

The site of CIRM’s new offices on Lake Merritt was once an important location for the Huchin tribe, which lived there for thousands of years.  Rocky Road ice cream was created in Oakland in 1929.  During World War II, the city was an important shipbuilding and food processing hub. The mai tai cocktail was first concocted in Oakland in 1944, according to Wikipedia. Misconduct by the Oakland police department led the city to pay $57 million from 2001 to 2011 to alleged victims, the largest sum of any city in California, according to local television station KTVU.  

Today the city is the home of Golden State Warriors, the National Basketball Association champions, who have played there since 1971, eschewing, however, the designation of “Oakland Warriors.” The Warriors are scheduled to leave Oakland in 2018, taking up residence in a $1 billion, combined basketball palace/commercial development, ironically only a short distance from the current offices of the stem cell agency. Some UC San Francisco scientists and others oppose the development because they fear it will push out biomedical enterprises now in the area and deter others.
 
As for Jack London, a section of Oakland bears his name.  As a boy, Jack London “studied” there in a saloon called the “First and Last Chance,” according to legend, and drank there, presumably when he was a little older.

The stem cell agency had its first chance in San Francisco to develop a commercial stem cell therapy. Now, its last chance may be in Oakland, only about a 30 minute walk from Jack London's waterfront watering hole.

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