After being headquartered in San Francisco for over 115 years, Pacific Gas & Electric will be selling its prominent building on Market Street and relocating to Oakland.
The company that began as San Francisco Gas Company in 1852, incorporating at PG&E in 1905, is in the process of both trying to emerge from bankruptcy and reinventing itself as a more responsible corporation whose equipment doesn't spark deadly wildfires every fall. In so doing, the utility has plans to move to the 28-story Kaiser Center office tower, a.k.a. 300 Lakeside Drive, in Oakland, as soon as BART relocates its headquarters to offices nearby.
PG&E's longtime headquarters encompasses two addresses: a circa-1925 building at 245 Market Street, and a second, attached building at 77 Beale Street. As Curbed reported back in January, while the company was wending its way through a complex bankruptcy process, the buildings could be worth around $1 billion — though their value after the pandemic has cast uncertainty over the value of office space may no longer be quite so high, as the Chronicle notes.
In a statement, CEO Bill Johnson said, "Our new Oakland headquarters will be significantly more cost-effective, is better suited to the needs of our business, and is a critical part of fulfilling our commitment to operate in a fiscally responsible way that will enable us to achieve our operational and safety goals. Savings from lower headquarters costs will tangibly benefit our customers financially."
The move is set to begin in 2022, as KPIX reports, long after Johnson and a number of other PG&E board members are long gone. Johnson announced his retirement plans in April, effective this month, saying, "As we look to PG&E’s next chapter, this great company should be led by someone who has the time and career trajectory ahead of them to ensure that it fulfills its promise to reimagine itself as a new utility and deliver the safe and reliable service that its customers and communities expect and deserve."
Oakland officials gave some expected statements of appreciation for the corporation making the move across the Bay, even though PG&E has been nothing but toxic from a PR and human decency perspective for decades.
"PG&E has been a steadfast partner for decades to the Oakland Chamber as well as many other civic and community organizations," says Barbara Leslie, President and CEO of the Oakland Metro Chamber. "Their commitment to ‘The Town’ is deep, and we applaud their decision to go all in for Oakland."
And Regina Jackson, President and CEO of East Oakland Youth Development Center, says, "We are thrilled to hear that PG&E will be joining us here in Oakland. We need strong corporate partners to help advance our mission, and we have every confidence PG&E will continue do just that as a member of our community."
As the Chronicle reports, PG&E has told the CA Public Utilities Commission that it plans to use the net gain from the building sale to offset prices for utility customers, though the financials there remain unclear.
BART previously announced plans to end its lease at 300 Lakeside in order to downsize offices nearby at 2150 Webster Street in Oakland. That will free up 14 floors of the building for PG&E, and developer TMG Partners has plans to buy the building from its current owners and renovate it before PG&E begins moving in 2022.
Office rents have tended to be about one-third less expensive in Oakland compared to San Francisco, and regardless of what happens to the SF office market in the coming months, this newly open (as of two years from now) 1 million square feet of office space will no doubt be desirable to someone.
PG&E now has until June 30 to complete its bankruptcy proceedings in order to meet a state deadline to receive $21 billion in wildfire bailout funds from the state.
Related: PG&E Claims Wildfire Victims Have ‘Overwhelming’ Support for Half-Cash, Half-Stock Settlement Deal
Photo: Wikimedia Commons