Lyft has signed a 10-year lease renewal for its headquarters in San Francisco as it sues the city to recoup $100 million in back taxes.
The locally based ride-sharing company re-upped its lease this month for 170,000 square feet of offices at 185 Berry Street, in China Basin, the San Francisco Business Times reported, citing an unidentified source.
In 2016, Lyft leased 335,000 square feet of offices in the two-building complex, but listed 165,000 square feet for sublease in 2022 during a national downsizing. The lease is slated to expire in August next year.
Lyft’s renewal with landlords McCarthy Cook and a subsidiary of JPMorgan Chase was a “blend and extend” deal, according to the source.
The deal allows Lyft to rid the offices up for sublease and commit to the remaining 170,000 square feet originally set to expire in September 2027, according to regulatory documents. Financial terms of the 10-year lease were not disclosed.
“Lyft and San Francisco go together like a La Taqueria burrito and guac,” David Risher, CEO of Lyft, said in a statement to the Business Times. “We’re excited to play a role in connecting locals and tourists alike to the best San Francisco has to offer, powering its economy for years to come.”
The re-upped lease is a boon for McCarthy Cook and JPMorgan Chase, now marketing 326,000 square feet for lease at their 885,500-square-foot, two-building property. That equates to a vacancy of 36.8 percent, on par with the city’s rate of 36.9 percent, according to CBRE
The recommitment to San Francisco comes as Lyft sued the city for $100 million in business taxes over the past five years, alleging it was overcharged, according to the Los Angeles Times.
Lyft said fees paid by riders to drivers aren’t part of the company’s revenue and should not be taxed, according to the complaint. The company considers its drivers as customers, not employees.
San Francisco wrongly included driver income as part of Lyft’s revenue when calculating taxes between 2019 and last year, Lyft said. The company seeks refunds for overpaid taxes, plus interest and penalties.
“We will review the complaint and respond accordingly,” Jen Kwart, a spokeswoman for the San Francisco city attorney, told the Times.
— Dana Bartholomew
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