By Jorge Casuso
October 23, 2025 -- The City Council on Tuesday is expected to extend its lease with Bank of America through 2028, more than a decade after a proposed development that included the prime Downtown property was rejected.
The third amendment to the lease agreement for 1301 4th Street -- which runs From February 1, 2026, through December 31, 2028 -- will not impact the potential development of the City-owned site at 4th and 5th streets and Arizona Avenue.
The City is currently seeking a developer that can "provide a minimum of 362 affordable residences" and explore "other potential commercial uses" on the 2.57-acre site.
Development of the site -- composed of nine parcels that took the City more than a decade to cobble together -- came to a halt when a newly elected slow-growth Council voted in December 2020 to kill The Plaza, a proposed 357,000-square-foot mixed-use hotel development.
According the staff report for the B of A lease extension, it would take "under ideal conditions" until the fall of 2028 to execute a development agreement for the site.
"Under this schedule, the earliest construction activity could realistically start would be in late 2028/early 2029, assuming that a developer moved building plans forward concurrently with DDA (Disposition and Development Agreement) deliberations," staff wrote.
The lease extension, which "compliments" Chase Bank's lease for the neighboring property ending in April 2028, "will not delay or limit future redevelopment" and would generate a total of $4,344,122 for the General Fund, according to staff.
"In the event the site redevelopment requires more time to implement, the Third Amendment also provides up to three one-year options to extend term through December 31, 2031," staff wrote.
"If all three options are exercised, the City would receive additional rental revenues of $4,794,807."
The City Council declared the 4th/5th/Arizona site as surplus land at its meeting on February 25, 2025, and "the City’s Housing Division is currently in the process of evaluating the interest received" from developers.
"The timeframe of good faith negotiations including entering into an exclusive negotiation agreement and a disposition and development agreement for the site will depend on a variety of factors such as complexity of proposed project, financing, and/or entitlements," staff wrote.
The Plaza project, which as a private development was less onerous and inexpensive to build than an affordable housing project, took seven years of negotiations before the Council pulled out.
The City's "Notice of Availability" issued on June 30 anticipates it may not produce proposals for a financially viable affordable housing project that explores "other commercial uses."
"If 362 affordable residences is not financially feasible, (the) proposal must provide an explanation for why it is not feasible and provide an alternative scenario(s) to maximize the number of affordable apartments," the notice states.
"The City may consider scenarios that include market-rate, middle income, moderate income or other types of housing with the priority for affordable residences."