The Position
San Francisco should send this measure back for the filings. The city would pay a private developer the transient occupancy tax the new hotel generates, up to $40 million in net present value over a period of up to 20 years, and the developer's profit and loss statements are not in the board files. The Budget and Finance Committee sent the plan forward without recommendation on February 4, 2026.
The Building and the Programme
JMA Ventures develops through its affiliate Bespoke Hospitality, LLC, on a long-term lease at 5 Third Street and 17-29 Third Street, three mostly vacant and internally connected commercial buildings known as the Hearst Building. Planning approvals cover a mixed-use hotel project with up to 170 rooms, restaurant and bar space, office, retail, seismic and structural upgrades, and restoration of historic features.
San Francisco YIMBY records the building's own history. William Randolph Hearst commissioned the main tower in 1898 as the San Francisco Examiner Building, seven stories in Mission Revival style by A.C. Schweinfurth. The 1906 earthquake and fire destroyed it, and the building returned on the same site as a twelve-story steel frame by Kirby, Petit and Green. Julia Morgan revised the exterior in 1938 and added a taller cornice.
The city first approved the office-to-hotel change of use in mid-April 2019. Bespoke Hospitality applied for a three-year extension to mid-April 2026, and a 2023 filing describes 121,470 square feet of offices becoming 170 hotel rooms, 5,920 square feet of office and 11,390 square feet of retail, with parking for 21 bicycles. Forge is the project architect, and Page & Turnbull and Knapp Architects hold the preservation work. No construction start, building permit, general contractor, construction lender or signed operator agreement appears on any document this column could reach.
What the Subsidy Buys
The developer's own figures sit in the agreement text. Without the subsidy the project returns approximately 3.8 percent a year, which the developer calls short of industry standards. With the subsidy the return runs approximately 17.9 percent a year, which the developer calls feasible.
The city's numbers run lower. The project would add approximately $713,000 a year in net General Fund revenue against the existing land use after the incentive payments, approximately $157,000 a year net to the Municipal Transportation Agency fund, and $367,493 in transient occupancy tax for arts and culture. OEWD staff put new property taxes at $577,000 a year, and the department's director of development put the overall economic impact above $36 million.
One line of arithmetic on the published General Fund figure: 20 years at $713,000 a year returns about $14.3 million nominal against up to $40 million advanced.
The Records That Arrived After the Vote
Section 67.32 of the Sunshine Ordinance bars the city from granting a subsidy in money, tax abatements, land or services to a private entity unless that entity agrees in writing to publish financial projections, including profit and loss figures, and annual audited financial statements.
48 Hills searched the public record at the time of the committee vote and found no such documents. The Mayor's Office referred the request to the Office of Economic and Workforce Development. OEWD answered that the request was not "simple, routine, or readily answerable" under Administrative Code Section 67.25 and set a response date of February 13, 2026. The full board vote falls before that date.
OEWD staff told the committee the project carries a "demonstrated funding gap" and that a third party vetted it. That report is not in the board files either. Supervisor Matt Dorsey said the state offered $30 million in tax incentives for the renovation and that the offer expires in April.
The Precedent the City Already Ran
Supervisor Connie Chan told the committee the Twitter Tax Break was, in retrospect, a total disaster. She called project-by-project tax cuts incoherent and asked OEWD for a citywide downtown economic development plan.
A rebate wired to one building's tax line prices one project against no alternative. A published downtown plan with a published cost would let the board compare this use of the money with every other use of it.
The Terms That Would Change This Position
Four terms would move this column. Profit and loss projections and audited financial statements filed before the board vote. A payment schedule that releases the rebate against construction milestones. A clawback that returns payments if the hotel does not open inside the authorization window. A written operator agreement with the brand named.
The February 2026 record names no operator. Auberge Resorts Collection announced in April 2021 that it would manage The Hearst Hotel, a 150-room property with 14 suites, a spa, a destination restaurant and a rooftop bar, and it named 2023 for the debut. The approved programme counts up to 170 rooms.