The Presidio's Power Player

Transforming the Presidio, a 1,480-acre former Army base, into a self-sustaining hybrid of national park and mini-city has provided San Francisco real estate lawyer Mary Murphy a unique opportunity to be the person her clients usually are up against. Since her appointment to the Presidio Trust, Murphy has scored a whopping victory against the Pentagon, and an all-but-finalized lease with Lucasfilm Ltd.

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As she weaves her shiny black Mercedes past the cannons, converted generals’ mansions and spectacular vistas that line the San Francisco Presidio’s winding roads, Mary Murphy talks about her vision for the former military base. The Farella Braun & Martel partner wants it to be a place that the public can use and enjoy in a way that it couldn’t when it was an Army base, and she wants it to be safe, educational and accessible. “This is the only national park in the country you can take a city bus to,” she said. The seasoned real estate lawyer is one of seven trustees appointed by President Bill Clinton and charged with transforming the 1,480-acre Presidio into a self-sustaining hybrid of a national park and mini-city. At Farella, Murphy is a rising star who specializes in representing developers. Her current projects range from the $70 million renovation of San Francisco’s historic Ferry Building to two restaurants in San Francisco’s Rincon Park, to the 500,000-square-foot San Rafael, Calif., Corporate Center. But the Presidio is providing the Rhodes scholar and Harvard Law School graduate with a unique opportunity to be the person her clients are usually up against. “The deals I’m negotiating are very much like what I do in my practice,” said Murphy, 41, “though I’m on the other side of the table with the Presidio deal.” The Presidio Trust is a federal executive agency created by Congress in 1996 to oversee the transition of the base to public hands and transform it into a mixed use of private and nonprofit businesses, educational facilities, houses and parks. For now, the Presidio’s budget is subsidized by the government; the seven board members are charged with making the property self-sustaining by 2013. Since being appointed in 1998 to the trust, Murphy has scored a whopping environmental clean-up victory with the Pentagon, as well as an all-but-finalized ground-lease with Lucasfilm Ltd. While the trust uses an outside leasing agency, its general counsel Karen Cook, and its own leasing office to manage its approximately 1,100 buildings, Murphy and the other board members tend to only get involved with some of the larger matters. One of the biggest projects Murphy tackled was the environmental cleanup of the property. CLEANING UP When the trust first took over, the Army planned to spend $6 million on cleaning up, which Murphy said would have only covered regular monitoring of the various landfills, a missile swale and the hundreds of lead- and asbestos-contaminated buildings that freckle the sprawling property. Murphy recalls sitting in a Pentagon conference room with a slate of high-ranking generals in uniform, and telling them why it made sense to really clean up the Presidio. “I said to them: ‘You can be heroes or you can be goats! What do you want to do?’” she recalled. “I said to them, ‘No! I want $100 million and I want it now!’” She got her way. By the end of the negotiations, Murphy had convinced the Pentagon to give the Presidio an additional $94 million to clean up pollution over four years, starting immediately. Don Fisher, founder of Gap Inc. and one of the other Trust appointees, raves about Murphy’s Pentagon victory. “That was brilliant,” he said. Murphy thinks her negotiating approach worked because she took assigning blame for the pollution out of the discussion and got the Army and the Presidio Trust working together as a team. And part of what accelerated the agreement — which played out over a series of trips back and forth between San Francisco and Washington, D.C. in 1998 — was her ability to come to the table with Pentagon leaders as a decision-maker. “One of the things that’s handicapped remediation efforts in the past has been conflicting jurisdictions, and we were in charge,” she said, adding that a solid environmental consultant report helped her make her case. “I came away a better negotiator. I got a senior-partner dose of judgment,” she said. “I’d have to concentrate 10 years of my regular practice to get that much practical experience.” THE LUCAS LEASE About a year ago, the Trust began exclusive negotiations with Marin, Calif.-based Lucas Digital Arts — an entity of Lucasfilm, the production company of “Star Wars” creator George Lucas — about leasing the 900,000-square-foot site of the closed Letterman hospital and research complex. Murphy was the principal negotiator in the 99-year lease, which will bring in approximately 14 percent of the Presidio’s $36 million annual operating budget. She says the experience gives her tremendous insight into the dynamics between lenders and developers, a skill she brings back to her real estate negotiations for developer clients at Farella. “Seeing the other side’s point of view is enormously helpful. It just makes you more reasonable,” she says. “It’s not about winning; it’s about having a structure that works for everyone.” Murphy’s work at the Presidio counts toward her billable hours at the firm, although she and her co-workers concede that she puts in many more hours for the Presidio than the 300 billable hours Farella has agreed to let her count. “It’s good for the firm to have someone in the firm in such a prestigious position,” says Brian Donnelly, incoming chairman of Farella’s business department. “The exposure certainly helps to get Mary’s name out there for land use. Mary’s strength is certainly her practice development and networking skills. “She’s certainly viewed as an up-and-coming rainmaker of the firm.” Murphy says that her work with outside counsel — the Presidio consistently relies upon outside counsel in addition to Murphy, Cook and the other two lawyers on the board — gives her insight into how a corporate principal needs to work with her or his lawyers. “The good news for them is that I’m a very informed client; the bad news is that I’m a very opinionated client,” she said. “Being a very informed principal is hugely important to avoid getting stuck in the mud.” The Presidio Trust is using San Francisco-based McCutchen, Doyle, Brown & Enersen’s environmental group, and Los Angeles-based Sheppard, Mullin, Richter & Hampton for transactional work. Murphy says that in many ways she prefers being the one delegating to being “the poor, starving lawyer” who actually has to draft the legal paperwork. “The fun part is saying, ‘Let’s do X,’ and then, I don’t have to write it!”

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