Resolution approving and authorizing the Director of Property, on behalf of the City and County of San Francisco, to execute the second amendment to the lease of 39,251 square feet of office space at 3120 Mission Street, from KLW Investments, LLC, a California limited liability corporation; extending the term by four years and six months from March 31, 2026, for a total term from July 1, 2015, through September 30, 2030, and granting a five year option to renew the lease, at an annual base rent of $1,237,642 for continuing use by the Human Services Agency; and authorizing the Director of Property to enter into any additions, amendments or other modifications to the lease that do not otherwise materially increase the obligation or liabilities of the City to effectuate the purposes of the lease and this Resolution.

This resolution approves a second amendment to the lease for 39,251 square feet of office space at 3120 Mission Street for the Human Services Agency (HSA). The lease, with landlord KLW Investments, LLC, is extended by four years and six months from March 31, 2026, establishing a new total term from July 1, 2015, through September 30, 2030, with an additional five-year renewal option.

The amendment significantly reduces the annual base rent from $1,819,223 to $1,237,642 ($31.53 per square foot), resulting in an annual savings of $581,582 (32%), effective retroactively to September 15, 2025. Rent will then increase by 3% annually starting March 1, 2027. The total contract obligation for the extended term and tenant improvements is $5,934,589.38.

A tenant improvement (TI) project for the premises, with a Guaranteed Maximum Price (GMP) of $418,491, is also authorized. The City's net cost for these improvements will not exceed $47,336.26, as $371,154.74 will be offset by accrued rent credits from this and another Mission Street lease. The TI work, including bathroom and kitchen renovations and LED lighting upgrades, is expected to be substantially complete by April 30, 2026. HSA uses this location for vital public programs such as Workforce Development, CalWORKs, MediCal, CalFresh eligibility, and Family and Children’s Services.