The city and SFMOMA have reached a land agreement that is critical to the art museum’s planned expansion.

Under the agreement, announced today by Mayor Gavin Newsom’s office, the city will give SFMOMA the existing fire station on Howard Street. In exchange, the museum will build the city a state-of-the-art fire station on Folsom Street, a deal that essentially translates to a $10 million gift from museum leadership to San Francisco, the mayor’s office said.

Securing that property was a prime hurdle to SFMOMA’s expansion, though the museum’s chairman, Charles Schwab, said back in September 2009 that he expected the city and the museum to reach precisely this agreement. Conversations between the parties were already advanced, Schwab said at the time — just after the museum said that it had reached an agreement to display the 1,000-piece contemporary art collection of Don and Doris Fisher.

SFMOMA said earlier this month that it had raised $250 million of a planned $480 million campaign. $100 million of the money raised will go to double the museum’s endowment. The museum declined to say how many donors gave the $250 million, or to share specifics on who the donors were, but Neal Benezra, director of SFMOMA, said the donations came from “core museum leadership.”

Benezra said that $480 million would likely include another $100 million for the endowment.

“I have to think a number of museums are looking at us with envy,” Benezra said. “More often than not, great museums and great collectors have not found it easy to work together. One entity tends to override the other. We have been able to marry ourselves in a very positive way that I believe suits the needs of the museum and the needs of the Fisher family, and benefits the public.”

Benezra said that the capital campaign can begin in earnest once SFMOMA has hired an architect for the project. It hopes to have one selected by the end of the summer.

The expansion will add 100,000 square feet of new gallery space and offices.

SFMOMA celebrates its 75th anniversary in May. Over 600,000 people visit the museum annually.

Construction of the new fire station is expected to begin in 2011. Benezra said it will be about four years before SFMOMA breaks ground on the expansion.

The fire station would kill a proposed eight-story, 75-unit condo project that had been planned for the parcel. The housing development, proposed in 2006 when residential real estate boom was in full swing, was being planned by Eugene, Ore.-based condo developer Spring Capital Group. Spring Capital bought the 14,000-square-foot property in 2005 for $4.1 million.

The building at one point was home to the Hotel Owners Laundry Co. warehouse and in the early 1980s it became a squat for about 30 punk rock anarchists, according to the online historical web site Shaping San Francisco. The two-story warehouse at 935 Folsom St. last made news five years ago when the U.S. Department of Justice raided the property as part of a multi-agency investigation into illegal sweatshop operations.

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