[BTinSF]

Friday, November 21, 2008
Jack London Square’s office, market to open in ’09
San Francisco Business Times - by Steve Ginsberg

With Jack London Square’s $350 million redevelopment well under way, the pressure is on developer Ellis Partners LLC to find retail and office tenants for its two new buildings. The project promises to turn the district into Oakland’s culinary hub, akin to San Francisco’s Ferry Building.

Jack London Market, a spec 170,000-square-foot mixed-use building under construction, is the centerpiece of Phase I. A public food hall will fill the first two floors, roughly 72,000 square feet of space. Another four floors of the market will be Class A office space. The $55 million building is scheduled to open in April 2009, but needs a core group of tenants.

“We will open the market in two phases and will not open each until a substantial portion is committed to. We would like to see each phase with 75 percent (of the space) committed. We need critical mass to open the first phase,” said Jim Ellis, managing principal. “We have signed 10 letters of intent and 20 are in negotiation. We need 32 to achieve our goal and we are well along to meeting our goal.”

Ellis hopes to sign 15 restaurants throughout the project and turn JLS into Oakland’s culinary hub. The first anchor restaurant to sign is Bocanova, a pan-American concept by San Francisco chef Rick Hackett, in a 6,500-square-foot space inside a building adjacent to Jack London Market. Daniel Patterson, the well known San Francisco chef behind Coi, will open Bracina, a 3,000-square-foot restaurant on the market hall’s ground level.

Finding tenants for the office portion of Jack London Market is a greater challenge, with none signed so far. Ellis Partners has shifted its leasing strategy to find multiple tenants for the waterfront offices instead of trying to land one or two anchors.

Phase I also includes 1 Ferry Landing, a 30,000-square-foot mixed-use building containing retail and office space. It is 80 percent leased, Ellis said. The third piece of the Phase I construction is a 1,100-spot parking garage with 32,000 square feet of ground floor retail space, which is 75 percent complete. Ferry Landing is expected to open when the Jack London Market opens. Ellis is hopeful to land a drug store for the garage’s retail anchor since no pharmacies serve the Jack London waterfront district.

There have been several significant leases signed at the project. At the historic 66 Franklin, Catellus signed a lease for 7,400 square feet and Miette Patisserie signed a lease for a baking school and retail shop. Another win for Ellis Partners was the $30 million acquisition and remodeling of the Waterfront Hotel, which it bought with boutique operator Joie de Vivre, which is running it. Caribbean restaurant Miss Pearl’s Jam House opened in the hotel in September.

Another hospitality option will be the centerpiece of the second phase of the project, with a Westin hotel and conference center planned. Ellis Partners is in discussions with the city and Port of Oakland for gap financing for the hotel.

The $150 million second phase also consists of two office buildings, the first of which will be a 130,000-square-foot multi-use building to be built on the current Barnes & Noble store site at the front entrance of the project. Ellis Partners is now negotiating with an entertainment tenant to fill the building’s first two floors. The building will also have office space. A second 130,000-square-foot office building is envisioned for a later date and will be next to Jack London Market.

Ellis is hopeful that all construction at JLS will be complete in five years.

Ellis Partners has been reshaping venerable Jack London Square for nearly a decade, but the current recession could slow leasing there. Its financial partners include conglomerate Cargill, and it also has extended financing through a major national pension, National Electrical Benefit Fund.

sanfrancisco@bizjournals.com

Source: http://sanfrancisco.bizjournals.com/...ml?t=printable