SAN FRANCISCO-The developer selected to build the Transbay Tower has agreed to pay $235 million for the land on which the high-rise would be located. Last year, in its wining proposal, Hines, the developer, offered to pay $350 million for the 48,000-sf site at First and Mission streets now owned by the Transbay Joint Powers Authority. Now, instead of paying $350 million several years down the road as was the case in its original offer, Hines has agreed to pay the lesser price much more quickly.

The agreement calls for Hines to pay $160 million within 90 days of the tower being approved by the San Francisco Board of Supervisors–which is slated to occur in late 2009–and the remainder in $3 million annual installments over the ensuing five-year- period. Under the original offer, Hines was going to pay its $350 million only after it achieved 50% preleasing, the typical hurdle for construction financing.

In addition to the $235 million, Hines would pay the TJPA 0.5% of the building’s NOI for 66 years, which is expected to total $10 million. Beyond that, the agreement calls for Hines to pay the an additional $50 million to build a park next door, atop the new mass transit terminal for which the TJPA hopes to break ground in 2010.

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