Alexandria Real Estate sued over potential SoMa project sale

Sports group wants judge to “interpret the contract” for 88 Bluxome project

Seth Socolow, executive director of San Franciscans for Sports and Recreation here, and a rendering for 88 Bluxome Street (TMG Partners, SFSR, Getty Images)
Seth Socolow, executive director of San Franciscans for Sports and Recreation here, and a rendering for 88 Bluxome Street (TMG Partners, SFSR, Getty Images)

Breaking a deal to include a world-class tennis club in San Francisco’s SoMa district was bad enough. Now a developer faces a legal challenge for trying to peddle its unbuilt biotech project.

San Franciscans for Sports and Recreation has filed a lawsuit seeking to stop Alexandria Real Estate Equities from selling its entitled development at 88 Bluxome Street, the San Francisco Business Times reported.

The nonprofit recreation group had already compelled the Pasadena-based real estate investment trust to add a world-class tennis club, to replace the demolished Bay Club once used by the likes of Andre Agassi, Serena Williams and Arthur Ashe.

Then it successfully challenged Alexandria’s decision last year to drop the negotiated, 134,000-square-foot replacement tennis club from its 1.2-million-square-foot, mixed-use project.

Now San Franciscans for Sports and Recreation wants a court to enforce a 2016 agreement that allegedly requires the publicly traded REIT to get its permission before selling the project site.

The lawsuit was triggered by the news last spring that Alexandria was shopping its 88 Bluxome development.

When the group sought confirmation from Alexandria that it was seeking a buyer, the developer “failed or refused to respond,” according to the complaint.

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“We have sole discretion to give consent to anybody they want to sell the property to,” SFFSR Executive Director Seth Socolow told the Business Times. “We told them that in a letter — they did not respond. Now we’re asking a judge to interpret the contract, that it does indeed assert that we have that right.”

Alexandria, a life sciences developer with major Bay Area holdings, declined to comment.

The REIT bought the site in 2015, prompting SFFSR to launch a successful signature-gathering campaign to place a measure on the 2016 ballot to require any developer who removed recreational facilities of a certain size to replace them. Alexandria cut a deal to include a replacement in exchange for the group dropping the ballot measure.

In 2020, would-be anchor tenant Pinterest canceled a lease for 490,000 square feet of the project’s office component, citing remote work as the reason for pulling out of the deal.

Early last year, Alexandria sought to modify its project plans by dropping the promised tennis club. After receiving approval from the city’s zoning administrator, the city’s Board of Appeals in December ruled in favor of the nonprofit. The tennis club – 10 percent of the total project – had to stay.

Outgoing Alexandria co-CEO Stephen Richardson told the Business Times last spring that the sports group had agreed in 2016 to a one-time termination fee of $7.5 million, should the tennis club no longer pencil out. The nonprofit didn’t accept that payment, according to the Business Times.

– Dana Bartholomew

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