Pier 38 Drama Isn’t Over Yet

9/14/11Follow @wroush

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moderation in the real estate market, rents in the SoMa district are back up in the neighborhood of $40 per square foot per month.

Real estate blog Curbed SF reports that SOMAcentral is looking at new space in the One Market Street building, which is already home to large tech companies such as Autodesk and Salesforce.com. Dogpatch Labs, meanwhile, is also searching for space. “We are committed to the future of Dogpatch Labs, and are in the process of finding a new home,” says Gus Weber, an entrepreneur in residence at Dogpatch Labs in Cambridge, MA.

Is Pier 38 really unsafe? Certainly, the facility is none too modern—and the big upgrades that were supposed to have occurred under Ernst, such as a public promenade around the pier, would have been useful. But there’s an abundance of alternative theories about the reasons for the Port’s eviction notices. Observers such as GigaOm’s Om Malik have speculated that the Port wants to clear out the space as part of its preparations for the America’s Cup sailing races in 2012-2013. One local real estate developer I spoke with offered a different explanation: the Port decided it didn’t want to be in charge of the morass of leases, sub-leases, and sub-sub-leases set up under Ernst, and decided to clear everyone out and start fresh.

Whatever the case, it appears that for the first time since the eviction notices went up, there may be some chance of a negotiated solution that keeps Pier 38 in place, or moves them to a temporary location while repairs are carried out. Wong says inspectors from the Port, the city, and the San Francisco Fire Department revisited the pier yesterday to conduct new inspections while the rally was going on at City Hall. “You don’t get two inspections in the course of two weeks under ordinary circumstances, unless there is a lot of public pressure coming into play,” Wong says.

The hope for Friday’s meeting, says Wong, is to see whether Pier 38 tenants can hammer out an agreement with the Port and City Hall that would allow companies to remain at Pier 38 while safety upgrades are completed—or, failing that, to lay a plan for swift repairs so that displaced tenants can move back into the space as soon as possible after September 30.

Even if some current Pier 38 tenants end up fleeing due to the current chaos, there’s still a strong core of startups who would stay if allowed, Wong says.  “I know that 99designs would want to stay here, and I’m pretty sure that Automattic would want to stay here,” he says. “If any companies leave, there are any number dying to take their spots, because of everything that happens here.”

Of course, it’s not just technology tenants who would be affected by a shutdown at Pier 38. Juraj Martanovic of Euro-Sail, a boat maintenance and diving operation based at the pier, contacted Xconomy today to let us know that he has started an online petition to save Pier 38 at Change.org. (It’s got 139 signatures as of this writing.) “It is our waterfront and we should ask Port to do more to maintain and fix all the piers, not just Pier 38,” says Martanovic.

[Update 9/15/11 9:30 am PT] Port and city officials have repeatedly denied that the Pier 38 evictions are related to preparations for the America’s Cup events in 2012 and 2013. But KTVU reports that it has uncovered an environmental impact report stating that Pier 38 may be used as an area for spectators during the sailing races. A spokesman for Board of Supervisors President David Chiu told KTVU that the agreement refers only to the waters around Pier 38, not to the pier itself.

Below are snapshots of the eviction notices and “red tags” posted at Pier 38 by the Port of San Francisco.

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

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