PG&E eyes new headquarters in Oakland

PG&E has an option to buy a downtown Oakland office tower for nearly $900 million as part of the embattled utility’s deal to shift its headquarters from San Francisco to the East Bay’s largest city, a new regulatory filing shows.

San Francisco-based PG&E has struck a deal with an affiliate of veteran developer TMG Partners to lease the office tower at 300 Lakeside Drive in downtown Oakland, and according to a filing with the Securities and Exchange Commission, the transaction also gives PG&E an option to purchase the highrise for $892 million.

The SEC filing also details the complex nature of the deal for PG&E to move its head offices to a 1960s-era office tower in Oakland that has undergone a wide-ranging renovation.

Step one in the deal, the SEC filing disclosed: A TMG affiliate, BA2 300 Lakeside, must complete a deal to buy the office tower from current official owner SIC — Lakeside, which is an en

tity controlled by real estate firms Swig Co. and Rockpoint Group.

On Feb. 28, TMG Partners struck a deal with the Swig-Rockpoint venture to buy the 28-story office tower, as well as an adjacent office and retail building and an adjoining parking garage.

Once that purchase is complete, and TMG owns the three sites, TMG is slated to take steps to create a separate parcel for the office tower that PG&E has agreed to lease with an option

to buy.

After that, PG&E would start a lease of approximately 35 years that would begin in early 2022. The office tower totals 910,000 square feet.

PG&E wouldn’t have to pay the $892 million until 2023, under the option agreement, the SEC documents show.

Ratepayers could potentially be asked to bankroll the acquisition of the office tower, along with the leasing costs, PG&E said in the SEC filing.

However, ratepayers could realize a benefit from PG&E’s plans to sell its existing San Francisco office centers as part of the company’s move to Oakland.

PG&E intends to pass along to its customers the proceeds from the sale of the San Francisco office sites, located at 77 Beale St., 215 Market St., and 245 Market St.

The state Public Utilities Commission and the U.S. Bankruptcy Court must approve PG&E’s lease and purchase option agreements.

PG&E’s $58 billion bankruptcy case, triggered by the company’s mounting liabilities and debts in the wake of a string of lethal and catastrophic wildfires that the utility caused in recent years, is in its final stages.

The company intends to

shift employees from to the new downtown Oakland headquarters from the San Francisco office centers, an office at 3401 Crow Canyon Road in San Ramon, and an office at 1850 Gateway Blvd. in Concord.

Potentially, 3,000 to 4,000 PG&E workers could eventually be employed at the future Oakland site, which is perched on a scenic corner next to Lake Merritt.

The relocation will take place in phases. TMG will also undertake a wideranging upgrade of the tower in a fashion that’s custom-tailored to PG&E’s specifications. It’s likely that workspaces in the new

PG&E headquarters will be configured to comport with coronavirus protocols for social distancing.

The relocation of PG&E is a welcome coup for Oakland as cities across the United States attempt to revive their shattered economies in the wake of government-ordered business shutdowns due to the coronavirus.

“Oakland welcomes a workforce as large and local as PG&E’s and particularly at a time when cities prepare to reopen,” Oakland Mayor Libby Schaaf said.