Introduction of Ordinance to Approve
Lease for Building 22 (2505 Monarch)
with Gold Bar Spirits Company, Inc.
March 5, 2024
Building 22: 2505 Monarch Street
• Located along Spirits Alley
• Approx. 32,500 square feet available for lease,
plus exterior areas
• Former tenant was Hangar One
• Contains existing distillery and tasting room
improvements
• Faction Brewing Co. occupies adjacent half of
building
St. George
Spirits
Faction Brewing
Natel Energy
City Hall
West
Subject
Building 22 – Goals and Process
• Secure a new tenant who would:
• Compliment Spirit’s Alley and surrounding
breweries, tasting rooms and distilleries.
• utilize existing improvements.
• demonstrate adequate financial resources to
invest in tenant improvements.
• provide stable rental income to the City.
• Engaged in public marketing effort to
identify and attract compatible
businesses
• Staff recommend leasing to Gold Bar
Spirit’s, Inc.
3 Interior views of Building
Gold Bar Spirits, Inc.
• Producers of Gold Bar Whiskey, founded in 2018
• Formal partnerships with 49ers, Vegas Golden
Knights & Cal Bears
• Sold in major brick-and-mortar and e-commerce
retailers like Total Wine, Costco and BevMo
• Current distillery facility on Treasure Island
• Financial information indicates strong 2023 sales
supporting ability to expand and invest in a new
facility and pay rent
• Building 22 accommodates both a new distillery
and tasting room/event space
4 Lease Terms
• Use: Distillery and Tasting Room
• Term: 6 years with one (1) 5-year option to renew
• Rent: $1.05 psf or $34,125 per month (initial rent)
• Annual incremental increases, thereafter
• Tenant pays share of all services, utilities and
taxes (including possessory interest taxes)
• If option is exercised, renewal term rent is reset at fair market value
• Rent Credit: Maximum value of ~$368,000 (Year 1)
• Capital Credit = $268K for building improvement
expenses; plus
• Up to $100K in Contingency Credit for risk
associated with duration of permitting &
licensing that ceases upon commencement of
operations
Year Monthly Rent Effective Annual Rent
1 $34,125 $41,925*
2 $35,750 $429,000
3 $40,625 $487,500
4 $43,875 $526,500
5 $45,191 $542,295
6 $46,547 $558,564
Total Initial Term $430,964
Total Renewal Term (5 years) $575,300**
Total Life of Lease $5.6 Million
*Inclusive of Rent Credit
** Estimated value – Base Rent will be reset at Fair Market Value Lease Premises
Premises: Interior portion of Building 22, plus:
• Non-exclusive parking along Monarch Street
• Exclusive operational uses along side yard
• Exclusive use of area behind Building 22 with
views over San Francisco Bay
Proposed outdoor uses to align with neighborhood
fabric of Spirits Alley
• Create customer seating and event space
• Fencing with screening measures to shield view of business’ operations (garbage enclosure, equipment storage, loading and unloading, production uses, etc.)
Gold Bar must apply for & receive a City Use Permit to make exterior improvements. Not approved as part of the lease agreement. non-exclusive
parking
operational use
area
exclusive use
area
Proposed Outdoor Uses & Screening
* Rendering for discussion purposes only. Gold Bar must apply for & receive a City Use Permit to make exterior improvements.
wood deck
barrel
screening
• 9-foot height for wood barrels proposed to screen
operational uses while protecting existing view of skyline • Wood patio added on backside, like Faction’s existing deck *
• Hold Public Hearing, and
• Approve introduction of
ordinance approving draft lease
with Gold Bar Spirits Inc.
Recommendation
Photo credit: Maurice Ramirez