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| The California stem cell agency is located south of Market Street in San Francisco, close to the San Francisco Giants ballpark (upper right). It is one of the hottest office leasing areas in the city. Since the agency has been there, the area has changed from seedy to gentrified. |
The $3 billion California stem cell
agency has a 19,500-square-foot problem.
That is the amount of free office space
that the agency will be losing in a little over a year. What's more,
it puts the agency square in the middle of a red-hot office leasing
market in San Francisco, where its headquarters is located. Rates
have shot up 70 per cent since 2010, according to a leasing industry estimate.
One tech company executive said in March that she just signed a lease that was so expensive “it made
me want to throw up,” according to a report in March on Business Insider.
Eleven months ago, the value of CIRM's
space and unspecified “incentives” was estimated at $1.2 million annually by the agency's outside auditor. That estimate would be considerably higher today and even higher next year when the agency would be signing a new lease. However, the California
Institute of Regenerative Medicine(CIRM), as the agency is formally known, is allotting only $600,000 annually for office rental, according to figures released Friday afternoon.
That would seem to mean that the agency
will be either moving from San Francisco or cutting way back on its
square footage or both. Remaining at its current location with less
space may not be possible, given the agency's rocky history with its
landlord, who donated the space as part of an $18 million package offered by San Francisco to lure CIRM to the city. Additionally, the
agency has a legal cap on its budget, which means that it would be
difficult to accommodate a large increase in rent.
A move to another city would be a
major disruption for some employees who have made housing decisions
based on the location of the headquarters. Relocation additionally
can be anxiety-producing for employees worried about their work space
as well as posing issues for moving computer servers and other
hardware that needs to be functional virtually around the clock.
According to a 2006 CIRM document, the
agency's space includes 18 offices with windows, 17 internal offices
and 19 cubicles. The agency's space also contains a number of conference
rooms and common areas in addition to a large reception area.
The headquarters houses 56 employees.
Employment is likely to remain close to that level for the next two years. Some consultants and outside attorneys also work at the agency
from time to time. After 2017, the number of employees is likely to
decline unless new funding is secured. Without additional cash, the
agency will be limited to overseeing the waning number of research
grants that would still be underway.
As of a few years ago, free parking was
provided to employees, a substantial benefit in a city where
parking can cost $15 a day or more. Continuing that benefit could add
to office space costs. Parking is so tight in San Francisco that a Web site has been created that focuses on the matter. More than one
smart phone app has been created to deal with parking, including one
that allows a driver leaving a public parking space to auction off the space to other drivers for prices up to $20.
CIRM's vice chairman, Art Torres,
former head of the state Democratic Party, is looking into the
possibility of securing some sort of subsidies through the city of
San Francisco to maintain the agency's headquarters within the city.
However, he has not publicly discussed that endeavor since last May.
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