The lease behind the developer
JMA Ventures, through its affiliate Bespoke Hospitality, LLC, holds a long-term lease to develop and operate the Hearst Building. The city's incentive agreement of February 2026 states the arrangement: the developer holds the lease on the property at 5 Third Street and 17-29 Third Street, three internally connected commercial buildings known as the Hearst Building. The freehold sits with the owner of record.
A 52-story, SOM-designed mixed-use proposal at 45-53 Third Street is a separate scheme. The Hearst family sponsors it with JMA Ventures, and it would create 354 homes, a 313-key hotel, office space and ground-floor retail. It sits on its own site under its own application.
What the city record funds
The city would pay up to $40 million toward the conversion, and the payment comes out of the hotel tax the property generates. 48 Hills published the agreement text on 1 February 2026. The terms read: incentive payments equal to the actual General Fund transient occupancy tax revenue the new hotel generates, up to $40 million in net present value, over a period of up to 20 years.
Sponsors are Mayor Daniel Lurie and Supervisor Matt Dorsey. The Board of Supervisors Budget and Finance Committee sent the measure forward without recommendation on Wednesday 4 February 2026, and 48 Hills reported the outcome the following day. Maggie Mattson, a staffer with the Office of Economic and Workforce Development, told the committee the city would gain $577,000 a year in new property taxes. Leigh Lutenski, the office's director of development, put the overall positive economic impact above $36 million. Mattson described the project as carrying a demonstrated funding gap vetted by a third party.
The agreement's own arithmetic reads: net General Fund revenues of approximately $713,000 against the existing land use after the incentive payments; approximately $157,000 a year net to the Municipal Transportation Agency fund; and $367,493 in transient occupancy tax for arts and culture, which the incentive does not touch. The developer states an annual rate of return of approximately 3.8 percent without the subsidy and approximately 17.9 percent with it.
The brand stated in 2021
Auberge Resorts Collection announced in April 2021 that it would manage The Hearst Hotel, redeveloped by JMA Ventures, opening in 2023. That release carried 150 rooms with 14 suites, an Auberge Spa, a grand lobby, social spaces, a destination restaurant and a rooftop bar, conceptualized and designed by Roman and Williams.
The February 2026 city record names no operator. The Auberge flag rests on the 2021 release, and the record carries no signed operator agreement date.
The two counts the sources publish
Up to 170 rooms is the count on the February 2026 incentive agreement and on the planning approval San Francisco YIMBY recorded in 2023. Auberge Resorts Collection's April 2021 release carries 150 rooms. The conversion therefore carries two published counts, and the subsidy rests on the larger one.
The dates on the file
The city first approved the project in mid-April 2019, and the developer sought a three-year extension to mid-April 2026. San Francisco YIMBY recorded approximately 20 months of construction once work starts. The record carries no construction start, no general contractor and no opening date.
Two steps sit between the committee action and a first reservation: the full Board of Supervisors vote, and the office's records response, due on or before 13 February 2026.
The disclosure fight
Section 67.32 of the Sunshine Ordinance bars the city from granting a subsidy in money, tax abatements, land or services to a private entity unless that entity agrees in writing to provide financial projections including profit and loss figures, and annual audited financial statements, as public records.
48 Hills asked the Mayor's Office and then the Office of Economic and Workforce Development for that material and reported finding none in the public record at the time of the committee vote. The office replied that the request was not simple, routine or readily answerable, citing Section 67.25 of the Administrative Code, and said it would respond on or before 13 February 2026 as permitted by Administrative Code Section 67.21(b) and California Government Code Section 7922.535.
Supervisor Connie Chan called the earlier Twitter Tax Break a disaster in retrospect and said project-by-project tax cuts are incoherent. Supervisor Dorsey said the state has offered $30 million in tax incentives for the renovation, and that the offer expires in April.
The building and the work it holds
The complex holds 121,470 square feet across the 13-story Hearst Building, 17-29 Third Street and the Stevenson Street annex. The conversion turns the office floor area into 170 hotel rooms, 5,920 square feet of office and 11,390 square feet of retail, with 21 bicycle spaces and street-facing retail walls rebuilt with full-height windows. The approved scope also lists restaurant and bar spaces, seismic and structural upgrades and restoration of historical building features. 48 Hills describes a Julia Morgan lobby inside the building.
William Randolph Hearst commissioned the main tower in 1898 as the San Francisco Examiner Building, seven stories in Mission Revival by A.C. Schweinfurth. The 1906 earthquake and fire destroyed it. Kirby, Petit and Green rebuilt it as a twelve-story steel frame with a granite base, a marble podium and a terra cotta shaft. Julia Morgan revised it in 1938, adding terracotta decoration, a monogrammed shield over the main entrance, a remodelled interior lobby and a taller cornice. Forge is the project architect, with Page & Turnbull and Knapp Architects jointly on historic preservation.
Three events would move this conversion to a booking: a signed operator agreement, a filed building permit and a recorded construction loan.