Kaiser Permanente to build new $900 million Oakland headquarters

Health care giant Kaiser Permanente plans to construct a 1.6 million-square-foot headquarters in Oakland, creating one of the largest new buildings in the Bay Area.

Kaiser, already Oakland’s largest private employer, said Monday it will consolidate 7,200 East Bay employees from seven offices into a new tower at 2100 Telegraph Ave. Construction is expected to start next year, and the building is set to open in 2023.

The project, formerly branded as Eastline, is a block from the 19th Street BART Station. The site is currently a parking garage and vacant lots. It will be named the Kaiser Permanente Thrive Center — “Thrive” is Kaiser’s slogan — and includes a health clinic, community meeting spaces, art gallery and retail space.

The company will invest about $900 million to buy the land and complete construction, said Bernard Tyson, chairman and CEO of Kaiser Permanente. The consolidation will save Kaiser $60 million annually compared with its current seven-building operations, which total 1.7 million square feet, he said.

Tyson said the offices will be “modern, upbeat, airy” and will have environmental sustainability features.

“For more than seven decades, Kaiser Permanente has been proud to call Oakland our home, and today, we further strengthen our commitment to this incredible city,” Tyson said.

“I’m excited that we’re bringing all of our staff together, along with our physicians who work in both the national office and regional office,” he said.

The Kaiser project has more than quadruple the space of nearby Uptown Station, where tech company Square plans a new office. The building has more square footage than San Francisco’s tallest building, Salesforce Tower, and is comparable in size to the huge suburban buildings occupied by tech giants Facebook and Google in Silicon Valley.

Kaiser was founded in Oakland in 1945. Its home at the Ordway Building is just a few blocks east of its new headquarters. Kaiser also operates its Oakland Medical Center about a mile north of its new headquarters.

“Kaiser and Oakland have always made a great ‘values match.’ We share commitments on social values — on equity, affordability, and healthy communities for all,” Oakland Mayor Libby Schaaf said in a statement. “To know that Kaiser has committed to us and will build their new headquarters in the heart of Oakland’s downtown shows the world that as Oakland grows, our values can scale up with us.”

It is uncommon for non-tech giants to own and develop their own buildings, but large health care providers are sometimes an exception. Kaiser, UCSF and Sutter Health have previously constructed medical centers with offices.

Kaiser will buy the headquarters site from Lane Partners and Strategic Urban Development Alliance LLC, which won approval last year for the project at Oakland’s Planning Commission. The new headquarters will generate an estimated $23 million in one-time taxes and fees for the city and create $15 million in annual taxes.

Kaiser plans to sell the three Oakland office buildings it owns — 1950 Franklin, 1800 Harrison St. and 2000 Broadway — to Lane Partners, and will move out.

Leases at the Ordway Building, 2101 Webster St. and 300 Lakeside Drive in Oakland, and 1451 Harbor Bay Parkway in Alameda won’t be renewed.

Kaiser’s consolidation will free up a significant amount of space for other growing companies, according to Colin Yasukochi, research director at real estate brokerage CBRE.

“It opens up additional office space for tenants seeking a lower-cost alternative” to San Francisco,” he said. “There’s a stronger likelihood that more jobs will be located in Oakland.”

Last year, Kaiser committed $200 million to fund affordable housing and mitigate homelessness, including preserving 41 units of affordable housing in East Oakland.

Kaiser also partners with the Golden State Warriors on health and youth sports programs and is sponsoring the plaza around the basketball team’s new arena in Mission Bay.

Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf