PG&E Expects to Provide Long-Term Savings to Customers from Reduced Real Estate Costs and the Gain on Sale of San Francisco Complex; Cities of Oakland and San Francisco Expected to Benefit from Increased Tax Revenues
Move Will be Phased over Period of Years; PG&E Will Remain Focused on Delivering Safe, Reliable, Affordable, Clean Energy
Oakland Headquarters Will be Designed as Modern Workspace with Flexible Layout that Promotes Workforce Health and Safety in Light of COVID-19
SAN FRANCISCO, Calif. — PG&E Corporation and Pacific Gas and Electric Company (together, "PG&E" or the "company") today announced the company's plans to relocate its headquarters from San Francisco to Oakland beginning in 2022. The move is part of PG&E's broader commitment to implement changes for the long-term benefit of its customers and communities.
PG&E expects the move to achieve near-term cost savings and result in substantially lower headquarters costs for PG&E over a long-term period. In addition, PG&E will request approval from the California Public Utilities Commission (CPUC) to return the net gain realized upon the future sale of its San Francisco headquarters to its customers. These transactions are also expected to collectively have a positive impact on tax revenues for both San Francisco and Oakland.
"Our new Oakland headquarters will be significantly more cost-effective, is better suited to the needs of our business, and is a critical part of fulfilling our commitment to operate in a fiscally responsible way that will enable us to achieve our operational and safety goals," said Bill Smith, incoming Interim Chief Executive Officer of PG&E Corporation. "Savings from lower headquarters costs will tangibly benefit our customers financially. The move will also bring our employees together in new and better ways in service to our customers."
The new Oakland headquarters will be a better and more efficient use of space for PG&E's workforce and provide greater flexibility on layout and density to both promote workplace health and safety and accommodate potential new working arrangements in a post-COVID-19 environment. In addition, commutes should be easier for the majority of headquarters employees who already live in the East Bay.
"Oakland is the perfect fit for us for a host of reasons. It is a thriving hub of industry and innovation in our state, and we look forward to establishing our headquarters and contributing to life there," said Andy Vesey, Utility CEO and President. "We are also proud of our history in San Francisco, where PG&E has been headquartered for 115 years, and we will continue to serve our customers in this great city. We expect the sale of our San Francisco headquarters will unlock value in a notoriously tight real estate market, no doubt bringing a dynamic new tenant to downtown."
The PG&E move to 300 Lakeside Drive is expected to occur in phases, and PG&E expects to remain in its current location, which includes 77 Beale Street and 245 Market Street, until the move is complete in 2023. PG&E also plans to consolidate two other East Bay satellite office locations—3401 Crow Canyon Road in San Ramon and 1850 Gateway Boulevard in Concord— into the new Oakland headquarters, beginning in 2025. This overall plan will simplify PG&E's Bay Area real estate footprint and lower its operating costs.
Subject to Bankruptcy Court approval and the satisfaction of certain conditions, PG&E will enter into a lease with purchase option for the Oakland property with leading Bay Area developer TMG Partners.
At the developer's own up-front cost, TMG will renovate the Oakland property to PG&E's specifications before PG&E relocates its operations. PG&E anticipates that the renovation and relocation of operations from the San Francisco headquarters complex will be completed in 2023.
PG&E expects to launch a competitive market process to sell the company's San Francisco headquarters office complex. The sale is expected to occur after the company emerges from Chapter 11.
"PG&E has been a steadfast partner for decades to the Oakland Chamber as well as many other civic and community organizations. Their commitment to ‘The Town' is deep, and we applaud their decision to go all in for Oakland," said Barbara Leslie, President and CEO of the Oakland Metro Chamber.
"We are thrilled to hear that PG&E will be joining us here in Oakland. We need strong corporate partners to help advance our mission, and we have every confidence PG&E will continue do just that as a member of our community," said Regina Jackson, President and CEO of East Oakland Youth Development Center.
This news release includes forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E Corporation and Pacific Gas and Electric Company (the "Utility"), including but not limited to statements regarding the company's intention to relocate its headquarters, its plans to sell its San Francisco property, and the expected impacts and timings of these transactions. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties, including the possibility that these transactions are not approved by the Bankruptcy Court and the CPUC, as applicable. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation and the Utility's joint Annual Report on Form 10-K for the year ended December 31, 2019, and their joint Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and their subsequent reports filed with the Securities and Exchange Commission. Additional factors include, but are not limited to, those associated with Chapter 11 cases of PG&E Corporation's and the Utility's that commenced on January 29, 2019. PG&E Corporation and the Utility undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) is a holding company headquartered in San Francisco. It is the parent company of Pacific Gas and Electric Company, an energy company that serves 16 million Californians across a 70,000-square-mile service area in Northern and Central California. Each of PG&E Corporation and the Utility is a separate entity, with distinct creditors and claimants, and is subject to separate laws, rules and regulations. For more information, visit pgecorp.com.