Fresno Councilmembers will decide at next Thursday’s City Council meeting whether to lease the entire former Bitwise building at 747 R St.
“It keeps downtown as the center for government work and it allows us to place our public works capital staff responsible for reconstructing downtown in the heart of the city, It’s a win-win for everyone.” — Fresno City Councilmember Miguel Arias
The building would house the recently approved Capital Project Department, which oversees all new major construction projects for the city, including the planned infrastructure improvements for downtown Fresno.
Base rent for the building would be $800,301 annually, growing to $955,915 by the end of the seven-year term, according to the lease agreement posted on the city’s website. Following the seven-year lease, there are three optional one-year extensions. Maintenance charges add $364,581 annually.
Despite Bitwise’s “complete failure,” what they did do was create top-of-the-line office space, said Fresno Councilman Miguel Arias. Leasing the 73,737-square-foot building keeps downtown as the center for government work, he said.
“It keeps downtown as the center for government work and it allows us to place our public works capital staff responsible for reconstructing downtown in the heart of the city,” Arias said. “It’s a win-win for everyone.”
New Capital Department to Tackle Major Construction Projects
Fresno is receiving $250 million from the state of California to improve downtown Fresno. In conjunction with the grant, the city created the Capital Project Department to oversee major construction projects. The city in August also received a $43 million grant from the California Department of Housing and Community Development to modernize sewers, streets, and parking.
The department would oversee ventures such as the train underpass at McKinley and Blackstone avenues called the Blackstone McKinley Grade Separation and any new parks, Arias said.
The city created 46 new positions for the department and transferred 74 positions from the Department of Public Works and 20 positions from the Department of Public Utilities, according to city documents.
747 R St. Used by Bitwise to Obtain Fraudulent Loan: Federal Prosecutors
747 R St. was one of the buildings that federal prosecutors accuse former Bitwise CEOs Jake Soberal and Irma Olguin Jr. of fraudulently borrowing against.
“Olguin and Soberal fabricated bank statements, lied to investors, provided false financial information to their board of directors, forged documents, and used buildings Bitwise no longer even owned as collateral for loans, all while lining their own pockets,” said U.S. Attorney Phillip Talbert last month.
NICByte LLC, has an active lawsuit against Soberal and Olguin. The Texas company partnered with Bitwise entity Wishon Row to purchase 747 R St. The listed landlord, 747 R Street, LLC, is managed by NICByte.
Bitwise Buildings Abuzz with Leases
When Bitwise shut down, occupancy at the three other buildings dropped to about 30% said Will Dyck, a developer with Baltara Enterprises LP.
Bitwise leased space at three buildings owned by Baltara Enterprises after Dyck divested from Bitwise.
Demand for office space has grown since the company’s closing, he said.
Dyck’s South Stadium building at 700 Van Ness Ave. is almost full, he said. State Center Community College District is looking to occupy some space there, Dyck said, but the deal needs approval from district trustees first.
“South Stadium has mostly smaller, incubator-type spaces and those have been the most desirable in the current market,” Dyck said. “The larger spaces are the ones that have had a little bit longer lead time to fill. But that’s also natural because the user for spaces like that is typically institutional or a large company.”
“With a paint job of 50,000 square feet of beehive on the outside, it couldn’t be called anything other than the Beehive.” — Will Dyck, Fresno developer, talking about the former Bitwise Hive building
The Beehive at 2600 Ventura Ave. is about 70% occupied. The former Bitwise 41 building — now called the Factory 41 building is about 50% occupied. Dyck said he hopes to announce a larger lease soon that will fill up the Factory 41 building.
Spaces at South Stadium are typically furnished with utilities included.
“It’s usually a smaller company and it’s just inefficient for them to try to contract with all their services separately,” Dyck said. “So we provide it as a turnkey solution.”
Rebranding the buildings was important for the tenants at Bitwise, Dyck said. The smaller tech companies felt they were getting lost by the Bitwise name.
“Bitwise had such incredibly strong, kind of in-your-face branding that they were frustrated that their vendors were thinking that they were somehow part of Bitwise or owned by Bitwise because they resided in their buildings,” Dyck said.
To move past the Bitwise legacy, signage had to come down, Dyck said.
Dyck applied to Google Maps and Apple Maps to reidentify the buildings under their new names. The former Bitwise 41 building is now called the Factory 41 building — a nod to its history with the Old Spaghetti Factory restaurant. Dyck is still looking for a name for the South Stadium building. Bitwise Hive became simply The Beehive.
“With a paint job of 50,000 square feet of beehive on the outside, it couldn’t be called anything other than the Beehive,” Dyck said.