SAN FRANCISCO, CA, June, 29, 2015 – Kilroy Realty Corporation (NYSE: KRC) , the San Francisco Flower Mart LLC (“SFFM”), and the group known as the San Francisco Flower Mart Tenants’ Association (“Tenants’ Association”) today jointly announced the signing of an agreement to save the San Francisco Flower Mart (“Flower Mart”) and end the proposed November ballot initiative that had the potential to stop the redevelopment of the Flower Mart into a mixed-use project, including a new, state-of-the-art wholesale flower market. The Tenants’ Association was advised by former San Francisco Supervisor Aaron Peskin and former San Francisco Mayor Art Agnos. The agreement provides additional protections for the existing tenants of the Flower Mart, including guarantees on future rent and continued cooperation between the owners and the tenants on the design of the new facility, which will constructed on the site of the current Flower Mart at Sixth and Brannan Streets in San Francisco.
“As we have said from day one, the San Francisco Flower Mart, a celebrated San Francisco institution, will remain at Sixth and Brannan Streets,” said John Kilroy, Kilroy Realty’s Chairman, President and Chief Executive Officer. “We’re excited to create a facility that will enable the San Francisco Flower Mart to thrive in a rapidly changing environment.”
“This is a huge win,” said former San Francisco Supervisor Aaron Peskin, who has been a key leader on behalf of the Tenants’ Association. “This agreement will ensure that the new flower market being developed by Kilroy will be affordable to the current tenants. It will retain working class jobs in the city at a time when many of them are disappearing. With this agreement, the ballot initiative is now off the table. I look forward to working collaboratively with the tenants and Kilroy Realty to make sure that this storied, beloved institution thrives for many decades to come.”
“After months of hard bargaining between Kilroy and the small business tenants of the San Francisco Flower market, a mutually beneficial agreement has been reached that will ensure affordable rents for existing tenants and preserve a major 100 year old city institution that is the envy of the nation for yet another century ” said former Mayor Art Agnos.
“The SF Flower Mart is not just a 102-year-old SoMa and City institution. It is a place that multiple generations of families, including many immigrant families, have called home,” said Supervisor Jane Kim. “Saving the Flower Mart means that these locally-owned businesses will be able to continue to call this their home for generations to come. I want to thank all of the parties who have worked hard these past months to get the agreement completed, including the Tenants’ Association and Kilroy Realty. I’m thrilled to celebrate with them and the thousands of living wage workers whose livelihoods depended on reaching this agreement.”
Under the terms of the agreement, the existing tenants will be guaranteed affordable rents in the new flower market. The agreement also includes terms of a move to a temporary location, which is still to be determined, within San Francisco while the new flower market is under construction. In addition, Kilroy Realty will continue to hold regular meetings with the tenants on the design of the project and SFFM will create a new board of directors to manage the operation of the Flower Mart, with three seats reserved for tenants. In return, the Tenants’ Association and its advisors have agreed to halt the ballot initiative that had been filed to challenge the development.
“Kilroy worked with us and listened to our concerns. They were willing to modify their design to accommodate our needs,” said Jon Gomez, owner/operation of Americana Flower Brokers, a San Francisco Flower Mart tenant since 1992. “I was concerned about the how the flower market could survive for the long term,” said Rob Shibata, owner/operator of Mt. Eden Floral Co., a San Francisco Flower Mart tenant for over 100 years. “But Kilroy has made a substantial financial commitment that will allow the wholesale flower industry to remain in San Francisco for a long time.”
“Through hard negotiations, we have come to an agreement that continues the future of the flower market with rents that are affordable to our industry,” said Louie Figone, owner/operator of Figone Nursery, a San Francisco Flower Mart tenant since 1967. “We will now have a real say in how the Flower Mart is managed through our seats on the new board. It is important that we work together with SFFM so that the needs of the tenants are taken into consideration,” said Patricia Valencia, owner/operator of Sunshine International, a San Francisco Flower Mart tenant since 1995.
The final design of the project, which is proposed to include 1.5 million square feet of office space above retail and the new wholesale flower market, is still being developed, according to Mike Sanford, Kilroy Realty’s Executive Vice President for Northern California. “We are working with a Tenant Project Committee that meets monthly to work through the design elements of the Flower Mart that would best suit the existing tenants’ needs. We envision the new San Francisco Flower Mart to be a real destination—a mixed-use development where flower vendors, retail tenants, office users, and visitors mingle together to create a unique, organic environment that complements all of the varied uses on the site,” said Sanford.
Approvals for the project are not anticipated until 2016, with estimated project completion in 2019.
About Kilroy Realty Corporation
With more than 65 years’ experience owning,
developing, acquiring and managing real estate assets in West Coast real estate markets, Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the region’s premier landlords. The company provides physical work environments that foster creativity and productivity and serves a broad roster of dynamic, innovation-driven tenants, including technology, entertainment, digital media and health care companies.
At March 31, 2015, the company’s stabilized portfolio totaled 13.0 million square feet of office properties, all located in the coastal regions of greater Seattle, the San Francisco Bay Area, Los Angeles, Orange County and San Diego. The company is recognized by the Global Real Estate Sustainability Benchmark (GRESB) as the North American leader in sustainability and was ranked first among 151 North American participants across all asset types. At the end of the first quarter, the company’s properties were 42% LEED certified and 60% of eligible properties were ENERGY STAR certified. In addition, KRC had approximately 1.7 million square feet of new office and mixed-use development under construction with a total estimated investment of approximately $1.1 billion. More information is available at http://www.kilroyrealty.com.