Menin Hospitality is led by Keith Menin and Jared Galbut. KGTC’s managers include Matis Cohen and Marisa Galbut. The group submitted a proposal for a seven-story building with 114 workforce housing units and a separate Class A office building designed by Arquitectonica. KGTC recently received Design Review Board approval for 72 Park in the block across the street.
Pacific Star and the Menin team were the only bidders on a City Request for Proposals (RFP) to redevelop the theater which is now closed due its deteriorated condition.
Pacific Star proposed an 11-story hotel designed by architect Kobi Karp along with retail space in an adjacent City-owned parking lot which was also an option for development in the RFP. Pacific Star owns the City National Bank building and several parcels around it.
Menin and KGTC's proposal also includes ground-level retail in both the residential and office buildings.
Both proposals contained a required cultural space component to be run by the City – 10,000 sq. ft. in the case of the Menin team and 23,220 sq. ft. in the Pacific Star submission.
The proposals were ranked by an evaluation committee that included City staff and one North Beach resident. While the hotel proposal was ranked highest, the discussion reflected divided opinions over the proposals and the best use of the property.
In October 2019, Morales suggested negotiating with both bidders. “As articulated by the Evaluation Committee, both teams are qualified and have worked in the City, which demonstrates each firm’s ability to comply with the City’s building code and development standards,” Morales wrote in a memo to Commissioners. “Moreover, both teams have developments near the project location. However, the proposals provide very different visions in terms of programming and aesthetics.”
“Given that the two proposals offer different perspectives on the project, I think the City would benefit from negotiating with both parties to see which one ultimately offers the best overall package to the City in terms of public benefit, income and truly viable and achievable economic activity,” Morales wrote at the time.
Discussions were put on hold during the early stages of the COVID-19 pandemic. In June, the Commission's Finance and Economic Resiliency Committee directed the Administration to resume negotiations and to “maximize any economic benefits of the deal, given the City’s need for diversified revenue sources,” according to Morales’ latest memo.
He stated Pacific Star notified the City at a July 9 meeting “that it is no longer interested in pursuing the hotel development on the Theater site but reaffirmed its original offer to purchase the P80 lot for $3 million,” the adjacent property that is an option for inclusion. “However, it is important to note that the solicitation… clearly stated that the sale of the P80 was not within the scope of the RFP. As a result, staff believes that the sale of P80 pursuant to the RFP is not allowable. Further, even if such a sale was permissible under the RFP, Pacific Star’s offer of $3 million is well below the property’s value, as determined by a 2018 appraisal when Pacific Star previously sought to acquire P80.” Menin suggested using the P80 lot for its proposed office building.
In an email, Pacific Star Capital founder Aria Mehrabi did not address the withdrawal of the hotel proposal but said he was interested in the parking lot "to turn it into street level retail to complement Prima Pasta, and to energize 71st street."
With regard to the Menin Hospitality bid, Morales said, “There remain a number of issues to reconcile between Menin’s proposal and the previously expressed desire of the City Commission, such as the size of the cultural space and the number of workforce housing units. Nevertheless, staff is confident that material terms for a development and lease agreement can be finalized with Menin Hospitality for consideration by the City Commission.”
Morales said negotiations are proceeding with a goal of presenting details at the September meeting of the Finance Committee.
KGTC’s Matis Cohen said he is looking forward to further discussions with the City about the workforce housing component. “We have to diversify our housing supply so that it can embrace and allow for our own workforce to live in our city.”
Final selection and approval of terms would be subject to approval by the Mayor and Commission which requires a 6/7th vote. Any project would also require approval by the Design Review and Planning Boards.
