Port of San Francisco Shuts Down Pier 38 Tech Hub—Dogpatch Labs, True Ventures, Automattic Soon to Be Homeless

9/6/11Follow @wroush

In a blog post today, Ryan Spoon of Polaris Ventures shared some pretty awful news for the tech startup community in San Francisco. The vibrant collection of startups and related tech firms occupying Pier 38 will have to clear out of the funky but aging structure by the end of September, thanks to a condemnation order from the Port of San Francisco. The port owns the property and was leasing it to a developer, who in turn sublet much of the space to Socialmedia, Spoon’s Dogpatch Labs, True Ventures, Automattic, and other companies.

I’d been hearing stories about Pier 38′s “crazy landlord” for months. And when I attended a conference at Automattic’s first-floor lounge at Pier 38 on August 27, I noticed red stickers on the windows stating that the property was unsafe to enter or occupy (blogger Robert Scoble posted pictures of the notices). But since absolutely no one was paying attention to them, I assumed the stickers must be simply the latest volley in what has become a long-running saga pitting Pier 38 tenants against their landlord, Carl Ernst Jr., and now against their landlord’s landlord, the port itself.

According to this SF Weekly article back in 2002, The Port of San Francisco granted a 36-year lease on the pier to Ernst, a waterfront developer, in 1996. Ernst said he wanted to turn the pier into a high-end marina and restaurant complex, and promised he’d build a public promenade around the pier.

None of that ever came to pass. Instead, Ernst began subleasing space in the pier, with True Ventures and advertising startup Socialmedia being among the first tech-related companies to take up residence. In 2008 Polaris Ventures sub-sublet a part of Socialmedia’s second-floor area that same year for Dogpatch Labs, its informal startup incubator and coworking space, where 10 to 20 startups are in residence at any given time. (Xconomy’s Bob Buderi visited the space and profiled Dogpatch back in early 2009.)

Automattic, maker of the WordPress blogging platform, fixed up the space across the pier’s iconic archway from True Ventures as a flexible coworking lounge for its itinerant employees. True Ventures and other organizations often used the Automattic space for startup events such as the August 27-28 conference on behavioral economics that I attended.

Ernst’s venture eventually ended up in bankruptcy court, and in February the Port of San Francisco sued to evict him and hit him with citations for a series of code violations. According to the San Francisco Business Times, city officials originally said they just wanted to get Ernst out of the picture, and that they hoped to keep the tech scene inside Pier 38 alive. But apparently, the dispute escalated past that point. In a bizarre twist in the story this May, police arrested Ernst after he allegedly threatened to kill the port’s directors and other staffers. He was later released on bond, but the port obtained a protective order barring Ernst from the pier, according to the San Francisco Chronicle.

Spoon, a Polaris Ventures principal who manages Dogpatch, told TechCrunch that Polaris is “actively working on finding a great new Dogpatch Labs home.” Spoon says the operation has been home to 250 entrepreneurs from more than 100 companies in the past two and a half years, including Appjet, Instragram, Formspring, LOLapps, Recurly, TaskRabbbit, and Yardsellr.

GigaOm founder Om Malik, who is also a venture partner at True Ventures, wrote in his personal blog tonight that he has mixed emotions about the pier’s closing. He says it was “drafty and cold” with Psycho-like bathrooms, but also a “lovely peaceful” place to work. “A whole lot of startups can trace their roots back to this creaking, aging pier,” Malik writes. “It became a vibrant little village. We moved away to somewhere else, but Pier does live in our heart.” Malik also speculates that the ultimate reason behind the pier’s closing is not the dispute with Ernst, but the Port’s larger effort to redevelop the Embarcadero area in time for the America’s Cup sailing finals in 2013.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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