The Tax the Agreement Refunds
The agreement ties the subsidy to the room tax. City payments equal the actual General Fund transient occupancy tax revenues generated by the new hotel, up to $40 million in net present value, over a period of up to 20 years. Bespoke Hospitality is the project sponsor, on the 2023 planning filing.
The city's own case, quoted in the agreement, puts net General Fund revenues at approximately $713,000 a year against the existing land use and after the incentive payments. It puts approximately $157,000 a year net to the Municipal Transportation Agency Fund and $367,493 in transient occupancy tax for arts and culture that the agreement states is unaffected by the incentive payments.
The developer's arithmetic in the same record runs from an annual rate of return of approximately 3.8 percent without the subsidy to approximately 17.9 percent with it. Both figures are the developer's own.
The Committee's Figures
The Board of Supervisors Budget and Finance Committee sent the agreement forward without recommendation. Mayor Daniel Lurie and Supervisor Matt Dorsey sponsor the measure.
Maggie Mattson of the Office of Economic and Workforce Development put the new property tax at $577,000 a year. Leigh Lutenski, the department's director of development, put the overall economic impact at more than $36 million. Each figure rests on the official who stated it.
Mattson also said the project carries a demonstrated funding gap vetted by a third party, and that report sits outside the board files. Dorsey has said the state offered $30 million in tax incentives for the renovation, with the offer expiring in April.
The Disclosure Rule Over the Subsidy
Section 67.32 of the Sunshine Ordinance bars the city from giving any subsidy in money, tax abatements, land or services unless the recipient agrees in writing to publish financial projections, including profit and loss figures, and annual audited financial statements as public records. 48 Hills reported the rule on February 1, 2026 and the outstanding records request with it. The Office of Economic and Workforce Development set its response for on or before February 13, 2026.
The Rooms That Generate the Tax
The approved programme holds up to 170 hotel rooms, 5,920 square feet of office, 11,390 square feet of retail and 21 bicycle spaces inside the 121,470-square-foot complex. Forge is the project architect.
Auberge Resorts Collection announced on April 28, 2021 that it would manage The Hearst Hotel with 150 rooms and 14 suites, designed by Roman and Williams, for a 2023 debut.
The city first approved the scheme in mid-April 2019, and the extension on the authorisation runs to mid-April 2026. Construction is estimated at around 20 months from a start, and no building permit, general contractor or construction lender appears on the published record.
The Rate the Rooms Enter
Engine's San Francisco page carries an average nightly rate of $165 across 3.1 million public rate observations from May 2024 to April 2026. March reads $197, 19 percent above the average, and December $129, 22 percent below. The spread across the year is 35 percent. The page ranks the city 18th of 50 markets at 11 percent above the $148 median, and it defines its figures as par rates, the cheapest publicly available price at the time of each search.
The Palace Hotel sits 354 feet from the site, Four Seasons 580 feet and The St. Regis San Francisco 693 feet, on OpenStreetMap coordinates read September 24, 2026.