Although San Francisco’s mayor urged major academic institutions to open a campus in the faltering downtown, Vanderbilt University instead chose a fast-growing area of the city a mile or so south.
Nashville’s prestigious research university confirmed Tuesday that it has leased the 4.5-acre California College of the Arts campus in Showplace Square, the city’s design district that straddles the Mission, Potrero Hill and Mission Bay neighborhoods. The announcement coincided with news that CCA will close when it transfers its campus to Vanderbilt in 2027.
The deal was hailed as a victory for the city: The art school has faced financial struggles for years, and the deal offset “a gut punch from the demise of an institution like CCA” and its “vacant” facilities, said downtown Supervisor Matt Dorsey.
“I think it was a great save,” Dorsey told the Chronicle.
For Mayor Daniel Lurie, Vanderbilt’s deal is the culmination of his office’s nearly year-long push to attract a major university and thousands of students to San Francisco.
But there’s a problem: Vanderbilt’s new campus isn’t downtown, as Lurie had hoped. Nor in the struggling Mid-Market neighborhood, where office buildings and retail space sit empty and vacancies continue to rise even as other parts of the city prosper.
Instead, the university will capitalize on the success of a part of the city that has already bounced back from the pandemic, with UCSF buying buildings, the Chase Center drawing millions to concerts and sporting events, artificial intelligence companies gobbling up space and restaurants opening from Mission Rock to Thrive City to the brick warehouses along Third Street.
Since Lurie took office last year, his team has promoted plans to revitalize downtown — where job vacancies have hit historic highs for nearly six years, major retailers’ storefronts sit dark and a 1.5 million-square-foot mall is nearly vacant — with a national university that would fill downtown streets with students who would “live, work and play” in the area. Lurie and his predecessor, former Mayor London Breed, touted tax breaks and economic incentives to attract investors looking to convert vacant office buildings into housing, but so far not a single conversion project has gone ahead.
More recently, city leaders have hoped that students needing housing near their downtown campus could be a catalyst.
“One of the wonderful components of a university is that it revitalizes a neighborhood because people live, work, play and learn right there in that area,” Ned Segal, Lurie’s head of housing and economic development, said in October.
At the time, it was confirmed that Vanderbilt was in talks to take over the Chronicle’s longtime headquarters at 5th and Mission streets in SoMa, an area in dire need of revitalization. New York-based Hearst Corp. owns the property, as well as the Chronicle and SFGATE, which is also based at 901 Mission.
That plan appears to have changed sometime in the past month, according to a local real estate insider who has followed Vanderbilt’s San Francisco campus expansion and described the university’s move from a downtown location to Showplace Square as unexpected.
“I know how much time the owners of the Chronicle building spent with Vanderbilt … this whole thing is really shocking,” said the individual, who requested anonymity to preserve business relations. The source described the 5th and Mission area as “incredible from a location perspective” — but noted that its battle with “perceived safety issues” continues.
“The feedback from tenants in the area is ‘it’s not safe for a 22-year-old girl right out of college to walk from the BART station to the building … with a laptop in her backpack,'” the source said. “But, there have been some improvements.”
The University of the Pacific School of Dentistry is located across Fifth Street from the Chronicle Building.
A Vanderbilt spokesperson confirmed that the two institutions “entered into a definitive agreement earlier this month.” Terms of the deal, including what Vanderbilt paid for the CCA campus, are not known.
Answering questions about whether downtown safety was a factor in choosing Vanderbilt’s site, Chancellor Daniel Diermeier said Tuesday that the opportunity to move to a “ready-made campus” in Potrero Hill was too good to pass up.
“It’s not so much the neighborhood,” he said of the SoMa area.
Diermeier said Vanderbilt looked at “different opportunities” that “would have been possibilities if the opportunity to work with CCA hadn’t come up.”
“There was a point where they had to make a decision to cease operations,” Diermeier said. “It was something that made it a lot easier for us to be able to operate in a shorter amount of time. If you have to renovate a building or something like that, it takes longer and it’s more expensive.”
Diermeier confirmed that the Chronicle building was a serious contender. Hearst announced plans last year to move both publications into a building it purchased at 450 Sansome St. The move is now scheduled for spring.
Diermeier said Vanderbilt now needs to raise funds for its Showplace Square campus and is still working on programming, but said it will have a technology as well as a creative focus.
As a “residential college,” Vanderbilt will fill the 750 existing housing units currently on the CCA campus with up to 1,000 of its undergraduate students, Diermeier said.
“I’ve learned that students like being on campus in their first two years, and by their fourth year, they like to spread their wings a little bit,” Diermeier said.
Colin Yasukochi, director of research for real estate firm CBRE, said downtown could have used an institution like Vanderbilt to activate it. But he said the Third Street corridor near Vanderbilt’s future campus “is becoming a premiere educational corridor,” with UCSF’s sprawling campus already nearby.
“That’s a newer part of the city and it’s gained a lot of traction with technology and AI companies. With UCSF continuing to grow there and adding another prominent educational institution in that corridor … it’s still going to be a pretty big boost to the city.”
The area around Fifth and Mission has taken one hit after another since the pandemic. Once the centerpiece of the much-celebrated 5M redevelopment, the intersection is now growing an empty mall on the verge of closing. It has a newly constructed office building at 415 Minna that is 90% vacant. A 400-unit apartment building to be built south of the Chronicle building on Fifth Street is stalled. The historic Chronicle building, with its clock tower, will be largely unoccupied in the spring.
Developer Eric Tao, who has built about 1,000 units and a hotel in the Mid-Market and Central SoMa neighborhoods, said “it’s really disappointing that (the Vanderbilt campus) doesn’t have a place at 5M.”
“Right now, the Mid-Market is suffering — condos, condo sales, leasing. The hotel is not doing great,” he said, referring to the Timbre Hotel, which he helped build. “The recovery has not yet extended into the mid-market. We are nowhere near pre-pandemic levels.”
David Seward, CFO of the UC College of the Law, which is opening a 656-bed apartment complex in the Tenderloin in 2024, said the CCA deal is welcome, even if a 5M campus would have helped the “academic village” his school is building a few blocks away.
“We’re excited they’re coming to San Francisco,” he said. “They’re coming in with 1,000 full-time students, and it makes a lot of sense for them to get a turnkey operation.”
Dorsey, the SoMa supervisor, said he understands that Vanderbilt had to do what was best for its bottom line.
“Initially I liked the idea of them being in the Chronicle building. I would really like something for the mall,” he said. “We also have to defer to the institution about what’s best for them.”
But other city leaders were reluctant to comment on whether there are plans for other downtown academic institutions. The Chronicle asked Segal, the city’s head of housing and economic development, at Tuesday’s news conference if the effort to revitalize downtown with another university of Vanderbilt’s caliber is still going forward, but did not receive an answer.
Charles Lutvak, Lurie’s spokesman, would not confirm whether the city is in active discussions with other university partners.
“We would love to have more academic partners,” he said. “If we have another university to announce, we will.”
This article originally published at SF’s booming neighborhood to host new university campus – a blow to downtown.