Small design showrooms in the Design District are crying foul as landlords do their best to cash in on the crazy office rents being commanded around SoMa. Pinterest has signed a deal to take over the majority of 2 Henry Adams Street, one of two large buildings at the Showplace Square Design Center that are the heart of the district — a deal that will force the eviction of dozens of small businesses. The building is currently 90-percent leased with design-related businesses, as the Chron reports, and some say the deal will spell "the death of the district."

The building owner filed for historic preservation status for the building last year, strategizing that this status, under city code, will allow a zoning exception to bring in regular office tenants. The building and all those around it are currently zoned for production, distribution and repair (PDR), making it one of the few remaining industrial-use districts in the city. But with the SoMa office market as white hot as it is, "landlords are seeing dollar signs," as Supervisor Malia Cohen says, and the victims will likely be small design firms.

The Design District itself emerged 40 years ago when small design tenants began getting priced out of what's still a node of fancy showrooms at Jackson Square. The same would likely happen here if more landlords were able to secure the historic designation, or find some other way to command higher rents.

The design industry, also, is shifting away from the showroom format, now that so much of this shopping and business occurs online.

But is Pinterest's expansion just part of the current bubble? They just expanded to new offices in SoMa, in two connected warehouses at 808 Brannan Street, a year ago, moving from Silicon Valley. Now they're signing on to lease 100,000 square feet on two floors, with a promise to take 245,000 square feet? All for building their internet bulletin boards?

In any event, the deal may get killed if Cohen has her way. She's going to introduce a revision to the rules about historic buildings that might limit the amount of office use that will be allowed at 2 Henry Adams Street, and she's also holding up the historic designation after finding out the landlord's plans.

[Chron]
[Pinterest]