By Steven T. Jones
In Sacramento, Washingon D.C., and most of the rest of this country, politicians and the electorate shrink in the face of Chamber of Commerce complaints that some regulation or piece of legislation will hurt the economy and cost jobs. It doesn’t matter that it often isn’t true, or that the benefits outweigh the costs, or that such comments are clearly driven by naked self-interest. The fact is, in this fearful country, it’s a tactic that works over and over again. The boy keeps crying wolf and we keep running for cover.
San Francisco is proving to be different. The living wage law passed a couple years ago has proven to be a huge success with little downside and this summer’s health care mandate is also filling a troubling void left by the much hallowed market. Next comes a measure by those scrappy and effective activists over at Young Workers United: a measure for the fall ballot requiring employers to provide their workers with paid sick days.
The Chamber is already howling — surprise, surprise — but the reality is this measure will be good for both employers and employees, it’s almost sure to pass, and it will help boost progressive voting power this November.
Chamber of Commerce
Sick days
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› tredmond@sfbg.com
It’s your Guardian. That’s the message we posted on the cover today, and I mean it: The new sfbg.com website is designed to be fully interactive. You can post your comments on every article, every review, every editorial. You can join in on five new blogs. In a few weeks, we’ll have a reader’s blog, just for you.
Newspaper publishing should never be a one-way communication. For more than 20 years, I’ve been hearing from readers (yeah, I answer my own phone), and your ideas and suggestions (and complaints) are what make this paper great.
And now you can share your thoughts with all the other readers, too. Argue, fight, tell me I’m full of shit, point out great San Francisco ideas that ought to be in the mix … It’s easy. Registration takes about 30 seconds. And keep coming back – there’s going to be more, much more, rolling out in the next few weeks.
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The first thing I did when I learned that private housing developers in San Francisco were demanding 28 percent profit levels (see page 5) was to call my brother Mike, who runs a small business building houses in New York. He almost dropped the phone.
“Let me get this straight,” he said. “These guys say they need 28 percent profit?” That’s the minimum, I told him.
“Shit, sign me up,” he laughed. “I’ll take the whole crew and we’ll be on the next plane.”
Mike is thrilled when he walks away with 10 percent profit on a job. So is everyone he knows. So are most small businesses (and quite a few large ones). The only ones who can get away with demanding that sort of return are oil companies, daily newspaper publishers, and, it appears, San Francisco real estate developers.
This isn’t really shocking news: We’ve known for a long time that developers make a killing in an inflated housing market. Compared to the boom years of the 1980s, when the office market was running rampant and out of control, the 28 percent margins aren’t that outrageous – high-rise office developers made even more.
But there’s a bottom line for the city: These folks aren’t just getting rich; they’re getting really rich – purely off a market that exists simply because of the appeal of San Francisco. They owe it to the city to give more than a pittance of that back.
Now this: Just about every small-business owner in San Francisco is sitting down with a spreadsheet and trying to figure out how much Sup. Tom Ammiano’s health care legislation is going to cost. A lot of them seem to be nervous – in part because of the fearmongering campaign put out by the Chamber of Commerce and the Committee on Jobs.
But when you actually look at what the law says, it’s not that scary. I’ve gone over the final language, and here are some key points:
1. The requirement that employers pay for health care doesn’t affect anyone with fewer than 20 employees, which is most of the small businesses in town.
2. Nobody’s going to have to pay anything until July 2007, and companies with between 20 and 50 employees aren’t going to have to pay anything until April 2008.
3. There’s a 90-day waiting period before anyone has to pay for a new employee.
4. Nobody will have to pay for employees who either have health insurance already (from a spouse, say) or who voluntarily decline health insurance.
5. Employers will pay based on how many hours an employee works, so the price for a part-timer will be comparatively small.
6. If you have more than 20 employees and don’t currently provide health insurance for all of them (or the amount you pay for that insurance is low), you’ll have to ante up, either by buying insurance in the private market or paying into the city plan. For companies with 20 to 99 employees, the city plan will run about $1.12 an hour next year for anyone who works more than 12 hours a week. Pencil it out; it may not kill you.
It’s absolutely an imperfect system. Employer-based health insurance is the wrong model. But for now it’s all we have – and this is a way to offer at least basic primary health care to everyone in the city. It’s worth the price. SFBG
Ammiano’s health care plan is fair
OPINION Universal health care. These days, most people want it, but no one wants to pay for it.
But like it or not, we all share in the expense of providing health care. We pay for it directly in our health care premiums or indirectly from higher costs for goods, services, and taxes. According to the activist group Health Care for All, “We spend over $6,000 per person in the US — two to three times the amount spent in other countries that insure everyone and have better health outcomes.” Our health care system, if you can call it that, is currently based on a corporate, for-profit model that increasingly leaves large numbers of people uninsured — and they must rely on taxpayer-subsidized public health programs.
Mayor Gavin Newsom is pushing for universal health care in San Francisco, and there are three ways on the table to fund it.
The Committee on Jobs, Chamber of Commerce, and Golden Gate Restaurant Association champion a plan in which all businesses pay a set fee, whether or not they are providing health care for their employees. Under this plan, large businesses that are not providing health care for their employees will save big money. Small businesses — and every business already doing the right thing — would subsidize the minority of large businesses that don’t provide health care.
In fact, 63 percent of the projected $50 million in revenue raised by this plan would come from businesses with fewer than 20 employees. A full 80 percent would be paid by employers with fewer than 50 employees.
The local papers say Newsom supports a voluntary plan. I assume that means employers can choose whether to pay. I’m surprised anyone would propose this with a straight face. Most employers do provide health care. This legislation is about those that don’t. They haven’t volunteered to pay for their own employees’ health care; why would they pay for a city plan?
Then there’s Sup. Tom Ammiano’s proposal.
Ammiano’s plan includes a minimum spending requirement for health care services for all employers with 20 or more employees. Small businesses with less than 20 employees (the vast majority of registered businesses in San Francisco) don’t have to pay anything. Of the three proposals, Ammiano’s seems the fairest to the majority of employers that already provide health care.
The Committee on Jobs tells us that small businesses will be hurt by this plan. I’m always suspicious when a well-funded organization that exists to lobby for the interests of the largest corporations in San Francisco leads with an argument related to the impact to the small business community.
The SFSOS thinks that any decision on Ammiano’s health care plan will be made “predominantly by people who have never worked in retail business, never managed a staff, nor ever had to make a payroll.”
I operated a temporary employment business in San Francisco for 25 years. Ammiano’s plan levels the playing field for all businesses.
For the record, many of my former colleagues within the small business community provide very generous health care benefits. Employees in small businesses, after all, are like family. Many small business owners think that those who do not provide health care have an unfair competitive advantage.
If we’re going to have universal health care, everyone should pay. SFBG
Barry Hermanson
Barry Hermanson is running for state assembly in District 12 on the Green Party ticket.
Downtown’s deceptions
By Steven T. Jones
The rancorous debate over providing health care to all San Franciscans finally comes to the Board of Supervisors for a vote tomorrow, culminating a truly ugly political spectacle. The business community has aggressively gone after the measure’s sponsor, Tom Ammiano, angrily accusing him of not listening and not caring.
Now, it’s understandable that some small business people on the verge of going under would be upset about having to give health coverage to their employees. It’s a legitimate concern, but it’s also a valid point that Ammiano’s measure makes: providing a living wage and health coverage to employees is a reasonable cost of doing business in this city, and if you can’t afford to do these things, then your business plan doesn’t really pencil out, sorry.
This might have been a good political debate to have, but unfortunately, the issue has been sullied and convoluted by the intentional deceptions of a few downtown groups (notably the Committee on Jobs, Golden Gate Restaurant Association, and the San Francisco Chamber of Commerce), distorted and inaccurate presentations of the issue by the Chronicle and Examiner, and the political cowardice of Mayor Gavin Newsom.
If you’ve been reading the Guardian then you know that the “Newsom plan” was simply one component of the “Ammiano plan,” not the workable stand-alone plan that the dailies and business elites tried to present it as (by itself, Newsom’s plan didn’t pay for itself and it threatened to make the number of uninsured in the city grow by providing the perverse incentive for businesses to drop their employees’ health insurance in favor of cheaper but less comprehensive access to city clinics). Even the dailies finally got around to saying the two plans relied on one another last week after playing up the deceptive competition for weeks.
Here’s the bottom line: Ammiano’s plan got eight co-sponsors because it was an honest attempt to deal with a serious problem using an approach (employer mandates) popular with most citizens (as shown by 69 percent of the people voting for a statewide mandate in Prop. 72). But downtown has done nothing but obstruct and obfuscate the issue. And they’re loud and have tons of money, so they’ve managed to bring out Newsom’s most cowardly instincts and they’ve cowed the media into bearing false witness to what’s going on.
Will they also peel off a supervisor or two who have already pledged their support? I guess we’ll find out tomorrow.
Downtown’s “Hail Mary” lawsuit
EDITORIAL This one is way over the top: The San Francisco Chamber of Commerce and the Committee on Jobs filed suit last week against the San Francisco Board of Supervisors, alleging that the supes won’t implement Proposition I, the 2004 ballot measure that was aimed at derailing progressive legislation. The suit makes little legal sense: The downtown crew is demanding that the city do something that it’s already doing, for the most part. But it shows an aggressive new strategy on the part of Mayor Gavin Newsom’s allies, who are out to scuttle three important bills that will probably win board approval.
Prop. I was designed to do two things: Delay anything that downtown might consider "antibusiness" and promote the political fortunes of Michela Alioto-Pier, who authored the ballot measure. The idea: Create an Office of Economic Analysis, under the city controller, with the responsibility to do an "economic impact analysis" of any legislation that comes before the board. Of course, that economic impact analysis will by definition be fairly narrowly focused; it won’t consider the social impacts or consequences of decisions.
That was always the flaw in Prop. I, and that was the reason we opposed the measure. Economic impact studies that show only how much a proposal would cost or how it might harm the "business climate" ignore the fact that a lot of government regulation improves things that aren’t quantifiable. And even when they can be measured, certain effects are ignored: Clean air has a tremendous value — but typical studies of antipollution measures focus only on the costs of compliance. Safe streets, nice parks, and good schools are worth a fortune — but a study that examines the tax burden required to pay for them won’t account for that.
Downtown spent a fortune promoting the measure (and sending out colorful flyers with Alioto-Pier’s face on them, which didn’t hurt her reelection efforts). It narrowly passed — but since Alioto-Pier never put in a request for the additional money the plan would cost, it took an entire city budget cycle to fund and hire the two staff economists who will do the work.
Now, for better or for worse, they’re on board, and the analyses are beginning — but downtown isn’t satisfied. Chamber spokesperson Carol Piasente told us the group wants to eliminate any board discretion in deciding what needs analysis and what doesn’t; right now, the board president can waive the analysis on relatively trivial things like resolutions and appointments.
But what’s really going on, according to Sup. Chris Daly, is that downtown is gearing up for a full-scale attack on three bills: Sup. Tom Ammiano’s proposal to require employers to pay for health care; Sup. Sophie Maxwell’s plan to better enforce the minimum wage laws; and Daly’s proposal to require additional affordable housing in all market-rate developments. "Downtown’s hail mary pass involves using the economic analysis to kill these socially critical proposals," Daly wrote in his blog.
Oh, and while the chamber is always worried about city spending, the group’s lawyer, Jim Sutton, is asking for attorney’s fees (likely to be a big, fat chunk of taxpayer change) if the suit prevails.
This is ridiculous. City Attorney Dennis Herrera needs to defend this aggressively, but that’s only the legal side. The mayor, who has become ever more closely allied with these downtown forces (see page 11), ought to join the supervisors in publicly denouncing the suit. SFBG
A strong small-business agenda
EDITORIAL You read the academic journals these days, or peruse economic-development Web sites, and everyone seems to be talking about sustainable urban economics. It’s as if the mantra that was first put forward by Jane Jacobs, David Morris, and a few others a quarter century ago is very much in the mainstream today: Cities function best with diverse economies dominated by locally owned businesses, with money circuutf8g within the community. Cutting-edge restaurants talk about serving locally grown food. Beverage savants want local beer and wine. Just about everyone — including the mayor and the San Francisco Chamber of Commerce — wants to participate in a program called Shop Local.
It’s a wonderful, encouraging trend — but if it’s going to make any real difference in this city, it has to become a lot more than lip service. Consider: •Just as Mayor Newsom was proudly signing on to a Shop San Francisco program, the mayor and the supervisors were busy approving plans to allow Home Depot — an anticompetitive out-of-town corporation that destroys local small business and undermines the entire concept of a strong local economy — to build a giant store on Bayshore Boulevard.
•It’s taken legal action by Sue Hestor and the neighborhood leaders to derail (for now) the mayor’s plans to build high-end condos all over the eastern neighborhoods — threatening hundreds of locally owned businesses.
•Downtown business leaders and the groups they fund still push for policies that hurt most of the businesses in the city — and too many small-business people still go along.
Here’s the reality: Supporting small businesses — and moving San Francisco toward a sustainable economy — requires a lot more than a slogan. The people who are behind the Shop Local movement know that. They’re promoting a wide range of national and local policies designed to change not only attitudes but the direction of public policy.
San Francisco, a progressive city known for its wonderful, lively, unique neighborhoods, ought to be a national leader in the battle. But others (Philadelphia, for example) are moving way ahead. This city is still stuck in an ancient (and regressive) economic mind-set.
There are a number of key things the city can do to turn that around and become a truly small-business–friendly place — and most of them go far beyond public-relations efforts and cutting through red tape. The basic approach to policy needs to change; here are a few ways to start:
•Stop allowing big chains to come into town. That’s not exactly rocket science, and it isn’t so hard either: Hayes Valley and North Beach both have "formula retail" laws that restrict the chains, and there’s talk of doing the same in Potrero Hill. But why does this have to be fought block by block? Why not a citywide ordinance that protects every neighborhood commercial district — and, more important, keeps the life-sucking big-box giants away from the city altogether?
•Make small, locally owned businesses part of the planning process. The city’s own (limited) studies have made clear that the type of development the mayor and the current city planning leadership has in mind would damage local businesses, particularly in the repair, distribution, and small manufacturing areas. That alone ought to be grounds to change directions. Why not a checklist for every new project that includes the question: Will this displace existing locally owned businesses? If the answer is yes, the project should be rejected.
•Take progressive business taxes seriously. There’s almost certainly going to be an effort this fall to change the city’s business-tax structure, with one of the goals being an increase in overall revenue. That’s great, and it ought to happen — but the tax rates have to be shifted too, so that a tiny local retail outlet doesn’t pay the same amount as the Gap. (Socking big-box outlets with a special tax or fee — possibly based on the fact that they are by nature car-driven operations — might be a nice way to bring in some cash.)
You can’t be friendly to small local businesses these days without taking sides in the national economic war — and that means coming out against the big chains. Until San Francisco does that, all the talk of supporting local merchants will amount to nothing. SFBG
20 questions for Fiona Ma
Sup. Fiona Ma, who is running for state Assembly, last week decided to skip an endorsement interview that she scheduled with the Guardian – making herself unavailable to answer questions important to Guardian readers – so we’ve decided to put some of our questions out the publicly.
We encourage voters to press her for answers before the June primary, and if you have any luck, please let us know by e-mailing City Editor Steven T. Jones at steve@sfbg.com.
1. What kind of health care system do you support for California? Ma’s opponent, Janet Reilly, has made single-payer health care her top campaign priority and issued a detailed plan for what that would entail. Health care is one of just five issues that Ma discusses on her website (the others being Housing, Education, Budget/Jobs, and Transportation), vaguely indicating she support universal coverage and stating, “I support state measures to provide incentives for business owners to cover their workers and other such efforts, but we need the political will on the national level to be successful.” The first part sounds as if she’s advocating tax breaks to businesses that offer private insurance health plans to their employees. The caveat at the end sounds like she doesn’t intend to do much of anything until the feds do. But then, during the only debate that she’d agreed to have with Reilly, Ma said that she support a single-payer health care system, without offering any other details. This is arguably the most important issue the Legislature will face in the next few years and we have a right to know whose side Ma would be on.
2. What will you do to protect renters and rental units in San Francisco? Again, it was the sole debate and its aftermath that yielded much confusion about where Ma stands regarding renters. She has made no secret of her strong support for increasing homeownership opportunities and her record is one of opposing local efforts to slow the number of Ellis Act evictions. But at the debate, she went further by declaring, “The Ellis Act is sometimes the only way for some people to become homeowners and I support it.” After being criticized for the statement, she defended herself in a piece on BeyondChron.org that only seemed to dig a deeper hole, arguing that she supports “ownership units [that] are affordable to San Franciscans of all income levels.” And how exactly is that going to happen?
3. What’s up with the $20 million? In that same Beyondchron.org column, to defend her bad record on renters, Ma cited an effort that she made earlier this month to amend the city’s $20 million housing subsidy program to prioritize those who have been evicted under the Ellis Act. City officials said it would have had little practical effect and the gesture seemed to contradict you statements of support for Ellis Act evictions. Why should we see this as anything but a crass political deception?
4. Why have you been unwilling to provide details about your policy positions – even on the five issues you raised on your website – so voters would know how you intend to vote?
5. How do you intend to increase revenues coming into the state, which you will need for even the broad goals you cited in education, transportation, and business “incentives”? We’re particularly interested in this answer after watching Ma chair the city’s Revenue Advisory Panel two years ago. That body was charged by the mayor’s office with recommending new revenue sources, and ended up recommending none.
6. Are you just a pawn of downtown business?At luncheon speeches that she gave to SFSOS and the San Francisco Chamber of Commerce over the last couple years, Ma you blasted and belittled her colleagues on the board while fawning over the business community. What is she willing to do to show her independence from downtown?
7. Why do most of your colleagues on the Board of Supervisors support Janet Reilly — and why shouldn’t voters see that as an indictment of your tenure as a supervisor?
8. Is there anything new that you would require of the business community, such as improved labor or environmental standards, greater corporate accountability and transparency, regulation of greenhouse gas emissions, health care benefits for employees or their same sex partners?
9. Your record is one of consistent opposition to requiring developers to pay more or offer more public benefits, such as open space or affordable housing. Why shouldn’t rich developers making obscene profits pay a little more? Has your position been influenced by the financial support of people like Oz Erickson, Joe Cassidy, Warren Hellman, Don Fisher, and Bob McCarthy?
10. Why did you oppose legislation that would have limited the number of parking spaces that could be built in conjunction with the nearly 10,000 housing units slated for the downtown core, legislation that Planning Director Dean Macris called critical to good planning? Did your support from the downtown developers who opposed it have anything to do with your position?
11. You supported a deal that extended Comcast’s cable contract without requiring any new public programming requirements, even though other comparable cities have better plans. Do you think that’s why Comcast is supporting your campaign?
12. You’ve been a big advocate of tax breaks for corporations, including the biotech and film industries in San Francisco. How would you make up for these lost revenues and are you concerned that having cities compete with tax breaks creates a race to the bottom that starve public coffers? And on the biotech tax credit, given that such companies often lose money for years before reaping high windfall profits, how would be insure those companies eventually pay taxes to the city rather than just moving somewhere where they won’t be taxed?
13. You were a longtime supporter of Julie Lee, continuing to support her even after it was revealed that she illegally laundered public funds into political campaigns. Why, and do you continue to support her?
14. In a recent letter to supporters, you warned that Janet Reilly was trying to buy the campaign so people needed to give more. At the time, she had raised about $600,000 to your $700,000. How do you justify what appears to be a deceptive statement to your own supporters?
15. We understand you support the death penalty, but many studies have shown that those on death row have been represented by inexperienced and ineffective lawyers, that they are disproportionately poor and minorities, and that based on detailed studies conducted in other states, it is likely that at least a few are not guilty of their crimes. Given all of that, are there any reforms that you’d like to see in how executions are carried out?
16. In the debate, you said that the state is not required to balance its budget and that the federal government may simply print money to cover its budget deficits. Would you like to clarify or amend either statement?
17. What is your position on drug prohibition? Are there any current illegal drugs that you would decriminalize or are there any other changes you would make to the war on drugs?
18. The statement you issued on your website dealing with “Transportation” – one of just five issues you addressed – is only 48 words long. Is there anything that you’d like to add? And are there any other issues facing the state that you think are important?
19. The Reilly campaign has warned of a possibly illegal effort to attack her by a group called “Leaders for an Effective Government,” using money laundered by Comcast and your old boss, John Burton. Are you aware of this effort and have you taken any steps to stop or repudiate it?
20. Why do you think it’s okay to avoid tough questions from the press?
Pombo on the issues
To say that Richard Pombo is an environmental skeptic is putting it mildly. When asked if Pombo accepted the worldwide scientific consensus that global warming is a fact, his spokesperson, Wayne Johnson, shilly-shallied. "What I have heard him say is the jury is still out," Johnson cautiously ventured. "For those absolutely convinced, I would not put him in that category."
Pombo entered Congress determined to "reform" the Endangered Species Act and other tree-hugging depredations on the rights of private property owners. Before arriving in Washington, he cowrote a book titled This Land Is Our Land: How to End the War on Private Property, in which he declared that he’d become politically active after a skirmish with the East Bay Regional Park District about the creation of a public right-of-way through his property. He later switched his story to say that his family’s property values had been hurt when their land was designated a San Joaquin kit fox critical habitat.
Both claims were entirely without merit. But Pombo is not one to let the facts get in the way.
Pombo says the ESA, which is widely regarded as one of the more successful pieces of environmental legislation ever, is a failure. Pombo’s “reforms,” however, recently ran into a brick wall in the Senate. If passed, the reforms would have removed the concept of critical habitat from the ESA, which means that a threatened species would have been protected, but its home territory would not have received such protection.
Pombo has hit numerous other environmental high points. Among them was his idea to allow ham radio operators to erect antennae on the Farallones Islands. He proposed selling 15 sites within the national parks as a way of raising money for energy development. He was one of the original sponsors of the legislation to allow drilling on Alaska’s north slope.
And the 11th Congressional District representative has taken interesting stands on all sorts of other issues, from civil rights to drugs to gun control to gay rights. Because he has such a wide range of conservative interests, a short list of his Congressional voting record will suffice.
Pombo has opposed stem cell research, supports banning “partial birth” abortion, and has a 0 percent rating from NARAL, the pro-choice group. He voted for the constitutional ban on same-sex marriage and against allowing gay adoption in Washington, DC.
He has voted in favor of making the PATRIOT Act permanent and supports a constitutional amendment to oppose flag burning and desecration. He supports more prisons, the death penalty, and more cops. He voted to prohibit medical marijuana and HIV-prevention needle exchange, in Washington, DC.
Pombo has a 97 percent approval rating from the US Chamber of Commerce. He opposes gun control and product-misuse lawsuits against gun manufacturers. He got an A-plus rating from the National Rifle Association.
For a more in-depth appreciation of Richard Pombo’s politics, go to www.ontheissues.org/CA/Richard-Pombo.htm, which gives him a 70 percent hard-right conservative rating. (Tim Kingston)
Research assistance by Erica Holt
Street fairs and fall festivals
IF YOU’VE been wondering where all the headline acts and theater companies go in that long gloomy stretch before the fall season, take a look at some of the entertainment featured in the following fairs and harvest festivals. Not only do Bay Area late-summer and autumn celebrations provide space for artists, craftpeople and nonprofit organizations to peddle their wares, many feature performers like Maxine Howard, Modern Jazz Quartet, the Asian American Dance Collective and many, many more. In part two of our third annual guide to Bay Area street fairs, we’ve listed TK celebrations from the beginning of August through October. Unless otherwise noted, the fairs — and the entertainment — are free. For more information, or in case you’d like to participate, call the telephone number listed at the end of each festival description.
August 1-2
Nihonmachi Street Fair The streets of Japantown come to life with live entertainment, food booths, arts and crafts and games. Headliners on Saturday include the top-40 group Desire, while Sunday features jazz recording artist Deems Tsutakawa. On both days, Spirit of Polynesia, the Asian American Dance Collective and the Chinatown Lion Dance Collective perform ethnic dances. The event also features Children’s World, with activities and arts and crafts designed especially for two-to 12-year-olds. 11 am-5 pm in Japantown, Post and Buchanan, SF. 922-8700.
Aug 7-???
Festiva Latino ALL FURTHER INFORMATION TO COME ON MONDAY BECAUSE I LOST THE FOLDER THAT HAD ALL THE STUFF IN IT. I DON’T KNOW HOW I LOST IT BUT WE NEED AT LEAST TO MENTION ALL THE STARS THAT WILL APPEAR. PHONE NUMBER: 543-3030.
August 7-9
ACC Craft Fair From custom-made saddles and porcelain lamps to cedarwood desks and ornamental jewelry, this fair highlights the distinctive work of 300 artists from across the nation, including 75 from Northern California. All of the artists are chosen on the basis of integrity of design and excellence of execution, and the show’s organizers say they hope to elevate crafts into a major industry and an important art form. Adults, $4; children under 12 free. Fri., 11 am-8 pm; Sat., 11 am-6 pm; Sun., 11 am-5 pm. Fort Mason Center, Piers 2 and 3, Bay and Laguna, SF. 526-5073.
August 15
Reggae Explosion, ’87 Presented in the style and tradition of Jamaica’s famous annual Sun Splash concert, this event features Haitian art, Caribbean crafts and Jamaican cuisine, as well as dance, poetry, raffles and prizes. Musical artists include the internationally known Don Carlos and his Freedom Fighters Band, Strictly Roots and the sweet steel drums of Val Serrant. $8 in advance; $10 at the door. 1-11 pm, Fort Mason Center, Pier 3. Sponsored by the Western Addition Cultural Center. 921-7976.
August 22-23
Palo Alto Celebrates the Arts Festival Wine tasting and dancing in the streets will bring even more sunshine to Palo Alto’s University Avenue. Wares include high-quality ceramics and pottery ranging from dinnerware and stoneware as well as paintings, prints and one-of-a-kind furniture to decorate and distinguish the home. 10 am-6 pm, University Ave., Palo Alto. Sponsored by the Downtown Palo Alto Arts Fair Committee. 346-4446.
August 22-September 27
The Renaissance Pleasure Fairs A large grove of live oaks provides the setting for spirited pageants and merry parades that attempt to recreate a 16th-century Elizabethan country village. The Northern California Renaissance Fair is an autumn harvest festival, with music and dancing, hearty foods and rare hand-made crafts. Queen Elizabeth and her court are among the more than 1,000 costumed entertainers. Visitors are encouraged to arrive in period dress and join the fun. Adults, $10.50; seniors, $8.50; children under 12 free. Weekends and Labor Day, 10 am-6 pm. Located at the Blackpoint Forest in Novato, Hwy 37 to the Blackpoint exit. Sponsored by the Living History Center. 620-0433.
August 27-30
San Francisco Fair and International Exposition This year’s fair has an international flavor with its theme “San Francisco: Gateway to the Pacific.” San Francisco’s sister cities of Manila, Osaka, Shanghai, Sydney, Taipei and Hong Kong each have their own pavilion, to exhibit the individuality and heritage of each city and country, and highlight San Francisco’s thriving relationship with her sister cities. The fair also features a wine pavilion, a San Francisco history exhibit and, of course, the famous contest program, featuring such past favorites as the “Financial District Strut,” the “Impossible Parking Space Race,” the winners of the Bay Guardian Cartoon Contest and new additions including the “SF Safe Sex Button,” and “Freeways to Nowhere.” Adults, $5; seniors, $3; youth aged 5-15, $2; children under 5, free. Aug. 27th is “Youth Day” (all youth 15 and under admitted free); Aug. 28th is “Senior Day” (seniors admitted for $1.50). 11 am-9 pm, Civic Auditorium, Brooks Hall, Civic Center Plaza, SF. 557-8758.
September 4-6
122nd Annual Scottish Gathering and Games Come join 40,000 Scots for three days of music, dancing, food and contests. Highlights include the Highland Dancing Championships and the Caber Tossing Championship (a caber is a log the size of a telephone pole tossed end-over-end for accuracy). More than 50 clans are expected to set up tents and display their family tartans and coats of arms. Tickets for the Friday night Musical Pageant and Twilight Tattoo are $5 grandstand; $6 box seat, 8 pm, at the Sonoma County Fairgrounds. Sat. and Sun., adults, $11 one day, $16 both days; youth 11-16, $6 each day; seniors, $5 each day; children under 11, free. Sponsored by the Caledonian Club of San Francisco. 897-4442.
September 5-6
A la Carte, a la Park Here’s your chance to picnic with more than 60 top Bay Area restaurants — De Paula’s, Firehouse Bar-B-Q, Vanessi’s Nob Hill and Hunan, among others — presenting their specialties at special prices to benefit the San Francisco Shakespeare Festival’s Free-Shakespeare-In-The-Park program. Sample the great cuisines of the world while enjoying a series of classical and jazz performances and samplings from the drama of William Shakespeare. $2.50 voluntary donations encouraged. 11 am-6 pm, in Golden Gate Park’s Sharon Meadow on JFK Drive across from McClaren Lodge, SF. 441-4422.
September 5-7
Concord Fall Fest This fourth annual Labor Day weekend festival, held in Todos Santos Park, features grape stomps, chili cook-offs and a 10K run. Less energetic fairgoers can enjoy an open-air marketplace of arts and crafts, food booths and live music. 10 am-6 pm, Concord (take Willow Pass Road exit from 689). Sponsored by the Concord Chamber of Commerce. 346-4446.
September 5-7
Sausalito Art Festival One of Northern California’s largest outdoor fine arts exhibitions, the 35th annual art festival is held along the beautiful Sausalito waterfront. More than 100 artists and craftsmen from around the world exhibit a total of 4,000 works of art. A variety of non-stop entertainment will be provided, along with 26 international food booths. Festivities begin Friday night, Sept. 4th, with fireworks and a black-tie party. The Breakers to Bay run begins along the Pacific at Fort Cronkhite in Marin at 8:30 am (register by August 18th). Adults, $3; children 6-12, $2; under 6, free. 10 am-6 pm, Bridgeway and Litho, Sausalito. Sponsored by the Sausalito Chamber of Commerce. 332-0505.
September 7
Arts Explosion This Labor Day festival celebrates the end of summer with a bang (fireworks) and launches the fall arts season. Complementing the showcase of outstanding Bay Area musicians and dance companies will be original performance works; “art by the yard” and a sculpture “glue booth” for children of all ages; an “Arts Row” with a variety of opportunities to interact with local arts organizations. Children under 12 free; adults, $1. 11 am-9 pm, Estuary Park on Embarcadero West, Oakl. Sponsored by the Oakland Festival of the Arts. 444-5588.
September 12-13
Russian River Jazz Festival Bring your suntan lotion, beach chairs, blankets and swimsuits, and swing to the sounds of the legendary Nancy Wilson, Maynard Ferguson and High Voltage, the Wayne Shorter Quintet and a host of others. This year, the festival features two stages set at the river’s edge, with a spectacular backdrop of redwood-covered mountains. Food and crafts will also be available. $23 single day; $42 for both days. Located at Midway Beach near Guerneville. (707) 887-1502.
September 12-13
15th Annual San Francisco Blues Festival The oldest ongoing blues festival in the U.S. offers two days of performances by blues greats from around the country, an unmatched view of the Bay and a superb array of New Orleans and Louisiana cuisine. Saturday’s music lineup includes Johnny Winter, Lonnie Brooks and Oakland’s own Maxine Howard, and on Sunday Roomful of Blues, Albert Collins and Memphis Slim play. $10 in advance; $12 at the door; $16 for a special two-day ticket available in advance only. Noon-6 pm at the Great Meadow, Fort Mason Center, Marina at Laguna, SF. 826-6837.
September 13
24th Street Merchants’ Cultural Festival The 24th Street Fair celebrates Latin American Independence as well as creating a community gathering for artists, residents and merchants. Visitors can enjoy Latin American food and arts and crafts with a Latin theme. A plethora of information booths provides literature on community activities and five stages continuous entertainment by local groups. 11 am-6 pm, 24th St. from South Van Ness to Potrero, SF. Sponsored by the Mission Economic and Cultural Association. 826-1401.
September 18-20
30th Annual Monterey Jazz Festival Monterey Jazz Festival swings again, this year featuring more than 25 superstars, including Ray Charles, The Modern Jazz Quartet, B.B. King, Toshiko Akiyoshi, Etta James and Bobby McFerrin. The event also features food and merchandise booths, and the sponsor, MCI Communications, offers visitors the opportunity to call anywhere in the U.S. free of charge. Although the main stage events are sold out, grounds admissions tickets are still available and allow the bearer access to the outdoor Garden Stage and the indoor Nightclub, which host many of the headliners. $15 a day. Fri., 5 pm-midnight; Sat., noon-midnight; Sun., noon-10 pm. 775-2021.
September 19-20
Mill Valley Festival More than 100 artists, selected by a jury, exhibit their wares at this arts-and-crafts fair set in a beautiful redwood grove. Food, continuous on-stage entertainment and activities for children make this one of the premiere fine arts festivals in the country. Voluntary donations requested. 10 am-6 pm, Old Mill Park, Throckmorton and Old Mill, Mill Valley. 381-0525.
September 19-20
Pan-Pacific Exposition Art and Wine Festival This city-wide festival is held on the site of the 1915 World’s Fair. Horse-drawn carriages and vintage cars transport visitors to the glories of bygone days as the festival celebrates the highlights of San Francisco history. Enjoy ragtime music, a historic fashion show and pennyfarthing bicycle races. Several wine gardens offer premium wines from select California vineyards. 10 am-6 pm, Marina Green, Lyon and Marina, across from the Palace of Fine Arts, SF. Sponsored by the San Francisco Council of District Merchants. 346-4446.
September 20
Folsom: Dimension IV! Now in its fourth year, this fair has established itself as the “End of Summer” celebration. Staged on the equinox of 1987, the fair again features the mascot “Megahood,” who breathes fire and smoke over the crowds. Entertainment includes the Folsom All Stars, the Zasu Pitts Memorial Orchestra and Viola Wills. Expect high-energy performances and technological innovations and one of the most diverse display of local artistry and crafts. The fair is a benefit for the San Francisco Aids Emergency fund and the South of Market Community Association. 11 am-7 pm, Folsom between 7th and 12th St., SF. Sponsored by Budweiser Corporation. 863-8579.
September 26-27
The Pacific Coast Fog Fest Visitors to the Pacific coastline are treated to historical and humorous displays at the Fog Fest. Diners may feast on seafood and of course fogcutters are the featured cocktails. Vintage cars, arts, crafts, continuous entertainment and fog-calling contests make this a welcome new Bay Area event. 10 am-6 pm. Located on Palmetto Ave., between Shoreview and Santa Rosa in Pacifica, Hwy 1 to Paloma exit. Sponsored by the City of Pacifica. 346-4446.
October 2-4
Fiesta Italiana A weekend family event, this year’s fair promises to be the “Besta Festa.” The celebration of Italian-American culture features Italian cooking demonstrations, wine tasting and grape stomping. Mayor Dianne Feinstein is scheduled to cut the pasta ribbon to open the ceremonies, Sergio Franchi will headline with two shows a day and the Italian design Ford Concept Car is on display. Fireworks are scheduled for the end of each day. Adults $8; children $1.50; Seniors and disabled $5 (free from noon-6 pm on the 2nd). Noon-midnight, noon-10 pm on Sun. Pier 45, Fisherman’s Wharf, Shed A and C, SF. Sponsors include Pepsi, Ford Motor Co., Budweiser, Sony, Lucky Stores, EFS Savings and the Port of San Francisco. 673-3782.
October 4th
Castro Street Fair Started in the back room of Harvey Milk’s camera store in 1974, this neighborhood fair has become a city-wide event. Musicians, bellydancers and jugglers appear with prom queens, urban cowboys, visitors from outer space and the Gay Freedom Day Marching Band and Twirling Corps. A variety of music, comedy acts and more than 200 arts and crafts displays are also scheduled. Castro between Market and 19th, SF. Sponsored by the Castro Street Fair. 346-2640.
October 9-25
Harvest Festival For three weekends, the nation’s largest touring festival of handmade crafts, fine art, music, theater and cooking transforms Brooks Hall into a colorful 19th-century village. The event features bluegrass and country bands, continuous stage entertainment, jugglers, acrobats and wandering minstrels, as well as the hundreds of unique shops that line the walkways. Center Stage headliners include Riders in the Sky, and the famed musical comedians the Brass Band, winners of the top prize at the Edinburgh, Scotland Performing Arts Festival. Adults $5; children 6-11, $2.50; children under 6, free. Fri., noon-10 pm; Sat., 10 am-10 pm; Sun., 10 am-7 pm, Brooks Hall, Civic Center. 974-4000.
October 10-11
Art and All That Jazz on Fillmore A second-year revival in remembrance of Fillmore Street’s heyday of music, known in the 1940s, ’50s and ’60s for its hot jazz and blues clubs. Two days to celebrate San Francisco’s jazz roots with fine arts, fine food and fine wine in outdoor cafes. 10 am-6 pm, Fillmore between Post and Clay, SF. Sponsored by the Fillmore Street Merchants’ Association, the Pacific Heights Homeowners’ and Merchants’ Association. 346-4446.
October 11
Montclair Village Fair The winding streets of Montclair Village provide a charming locale for this neighborhood fair, where 50 artisans sell crafts and local schools, business and nonprofit organizations sell food. This year’s fair has a circus theme, with strolling flutists and meandering mimes helping to create a carefree atmosphere. A pancake breakfast kicks things off and is followed by hayrides in Montclair park. 11 am-5 pm, LaSalle at Mountain, Oakl. Sponsored by the Montclair Business Association. 339-1000.
October 17-18
Half Moon Bay Art and Pumpkin Festival Artists and craftspeople from across the United States display wares in more than 250 booths and all-day entertainment features blue grass to rock-and-roll at this “something for everyone” festival. As you might expect, pumpkin goodies abound and the fair kicks off with two pie-eating contests. Other events include a Pumpkin Festival Run and a pumpkin-carving contest. 10 am-5 pm, Main Street in Downtown Half Moon Bay. Sponsored by the Coastside Chamber of Commerce. 726-5202. *
What are city officials and the Chamber of Commerce planning behind closed doors?
San Francisco public officials and the Chamber of Commerce have launched a new Economic Development Corporation with the stated goal of charting and guiding the city’s economic future. But although the decisions the group might make would have dramatic impacts on all of San Francisco, the agency thus far has refused to conduct its business in public.
Although several city officials serve on the EDC’s board of directors in an official capacity and the corporation will be partially funded by the city, the agency’s first meeting, July 16th, was held behind closed doors at the Chamber’s California Street headquarters. A Bay Guardian reporter was told he could not attend the meeting, and no official minutes have been published. The meeting appears to violate the Ralph M. Brown Public Meetings Act.
Paul Wright, deputy executive director of the Chamber of Commerce and acting executive director of the EDC, insisted the meeting did not fall under Brown Act guidelines.
The EDC’s board of directors, however, includes Bill Witte, executive director of the Mayor’s Office of Housing and Economic Development, Rudy Nothenberg, the city’s chief administrative officer and Nancy Walker, president of the Board of Supervisors. The Brown Act defines “legislative body” as “any board, commission, committee, or other body on which officers of of a local agency serve in their official capacity as members.”
Furthermore, the new EDC receives its funding in part from the Chamber and in part from MOHED. Presently, that funding is limited to “in kind” services such as preparing presentations and clerical services. Under the Brown Act definition, a legislative body must be “supported in whole or part by funds provided by such a public agency.”
The EDC was formed jointly by the Chamber and MOHED and will be incorporated as a nonprofit in the fall of this year. According to the agenda from the July 16th planning meeting, the corporation is designed to “help retain employers in San Francisco and attract appropriate new businesses to the City” and to maintain “a close working relationship between the public and private sectors in the economic development activity of the City.”
Terry Francke, legal counsel for the California Newspaper Publishers Association and an expert on the Brown Act, told the Bay Guardian that the new EDC qualifies as a “legislative body” as defined under Government Code Section 54950 and therefore any meetings the EDC holds are subject to Brown Act requirements. “If the meeting is official enough to have public officials in attendance then it’s official enough to be open.”
Supervisor Walker was invited to the meeting but could not attend due to a previous commitment, according to staff aide Jean Mariani. Mariani said Walker’s office was seeking a city attorney’s opinion on the status of the EDC and told the Bay Guardian, “Supervisor Walker is concerned with this issue. We will have the situation resolved before the next meeting.” That meeting is scheduled for September 11th.
City Attorney Louise Renne told the Bay Guardian her staff was looking into the matter.*
SF’s economic future
Sometime early this spring, while most of Washington, D.C. was watching the cherry trees bloom and thinking about the impending Iran-contra hearings, a few senior administration officials began discussing a plan to help domestic steel companies shut down underutilized plants by subsidizing some of the huge costs of pension plans for the workers who would be laid off.
The officials, mostly from the Departments of Labor and Commerce, saw the plan as a pragmatic approach to a pressing economic problem. With the steel industry in serious trouble, they argued, plant closures are inevitable — and since the federal government guarantees private pension plans, some companies will simply declare bankruptcy and dump the full liability on the taxpayers. Subsidies, they argued, would be a far cheaper alternative.
But the plan elicited sharp opposition from members of the Council of Economic Advisors, who acknowledged the extent of the problem but said the proposal was inconsistent with the Reagan economic philosophy. The problem, The New York Times reported, was that “such a plan would be tantamount to an industrial policy, an approach the president has long opposed.”
For aspiring conservative politicians, the incident contained a clear message, one that may well affect the terms of the 1988 Republican presidential debate. To the right-wing thinkers who control the party’s economic agenda, the concept of a national industrial policy is still officially off-limits. In San Francisco, the ground rules are very different. All four major mayoral candidates agree that the city needs to plan for its economic future and play a firm, even aggressive role in guiding the local economy. The incumbent, Dianne Feinstein, has established a clear, highly visible — and often controversial — industrial development policy, against which the contenders could easily compare and contrast their own programs.
The mayoral race is taking place at a time when the city is undergoing tremendous economic upheaval. The giant corporations that once anchored the local economy are curtailing expansion plans, moving to the suburbs and in many cases cutting thousands of jobs from the payroll. The once-healthy municipal budget surplus is gone. The infrastructure is crumbling and city services are stressed to the breaking point.
By all rights, the people who seek to lead the city into the 1990s should present San Francisco voters with a detailed vision for the city’s economic future, and a well-developed set of policy alternatives to carry that vision out.
But with the election just three months away, that simply isn’t happening. Generally speaking, for all the serious talk of economic policy we’ve seen thus far, most of the candidates — and nearly all the reporters who cover them — might as well be sniffing cherry blossoms in Ronald Reagan’s Washington.
“San Francisco’s major challenge during the next 15 years will be to regain its stature as a national and international headquarters city. This is crucial to the city because much of its economy is tied to large and medium-sized corporations….The major source of San Francisco’s economic strength is visible in its dramatic skyline of highrise office buildings.”
—San Francisco: Its economic future
Wells Fargo Bank, June 1987
“In San Francisco, you have the phenomenon of a city losing its big-business base and its international pretensions — and getting rich in the process.”
—Joel Kotkin, Inc. Magazine, April 1987
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IN MUCH OF San Francisco’s news media and political and business establishment these days, the debate — or more often, lament — starts with this premise: San Francisco is in a bitter competition with Los Angeles. At stake is the title of financial and cultural headquarters for the Western United States, the right to be called the Gateway to the Pacific Rim. And San Francisco is losing.
The premise is hard to deny. If, indeed, the two cities are fighting for that prize, San Francisco has very nearly been knocked out of the ring. Just a few short years ago, San Francisco’s Bank of America was the largest banking institution in the nation. Now, it’s third — and faltering. Last year, First Interstate — a firm from L.A. — very nearly seized control of the the company that occupies the tallest building in San Francisco. The same problems have, to a greater or lesser extent, beset the city’s other leading financial institutions. A decade ago, San Francisco was the undisputed financial center of the West Coast; today, Los Angeles banks control twice the assets of banks in San Francisco.
It doesn’t stop there. Los Angeles has a world-class modern art museum; San Francisco’s is stumbling along. The Port of San Francisco used to control almost all of the Northern California shipping trade; now it’s not even number one in the Bay Area (Oakland is). Looking for the top-rated theater and dance community west of the Rockies? San Francisco doesn’t have it; try Seattle.
Even the federal government is following the trend. A new federal building is planned for the Bay Area, but not for San Francisco. The building — and hundreds of government jobs — are going to Oakland.
In terms of a civic metaphor, consider what happened to the rock-and-roll museum. San Francisco, the birthplace of much of the country’s best and most important rock music, made a serious pitch for the museum. It went to Cleveland.
For almost 40 years — since the end of World War II — San Francisco’s political and business leaders have been hell-bent on building the Manhattan Island of the West on 49 square miles of land on the tip of the Peninsula. Downtown San Francisco was to be Wall Street of the Pacific Rim. San Mateo, Marin and the East Bay would be the suburbs, the bedroom communities for the executives and support workers who would work in tall buildings from nine to five, then head home for the evening on the bridges, freeways and an electric rail system.
If the idea was to make a few business executives, developers and real estate speculators very rich, the scheme worked well. If the idea was to build a sound, firm and lasting economic base for the city of San Francisco, one could certainly argue that it has failed.
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NOT EVERYONE, however, accepts that argument. Wells Fargo’s chief economist, Joseph Wahed, freely admits he is “a die-hard optimist.” San Francisco, he agrees, has taken its share of punches. But the city’s economy is still very much on its feet, Wahed says; he’s not by any means ready to throw in the towel.
Wahed, who authored the bank’s recent report on the city’s economic future, points to some important — and undeniable — signs of vitality:
* San Francisco’s economic growth has been well above both the national and state average during the 1980s — a healthy 3.67 a year.
* Per-capita income in San Francisco is $21,000 a year, the highest of any of the nation’s 50 largest cities.
* New business starts in the city outpaced business failures by a ratio of 5-1, far better than the rest of the nation. * Unemployment in San Francisco, at 5.57, remains below national and statewide levels (see charts).
San Francisco, Wahed predicts, has a rosy economic future — as long as the city doesn’t throw up any more “obstacles to growth” — like Proposition M, the 1986 ballot measure that limits office development in the city to 475,000 square feet a year.
John Jacobs, the executive director of the San Francisco Chamber of Commerce, came to the same conclusion. In the Chamber’s annual report, issued in January, 1987, Jacobs wrote: “The year 1986 has been an amusing one, with both national and local journalists attempting to compare the incomparable — San Francisco and Los Angeles — and suggesting that somehow San Francisco is losing out in this artificially manufactured competition. Search as one might, no facts can be found to justify that assertion.”
Wahed and Jacobs have more in common than their optimism. Both seem to accept as more or less given the concept of San Francisco as the West Coast Manhattan.
Since the day Mayor Dianne Feinstein took office, she has run the city using essentially the policies and approach championed by Wahed and Jacobs. Before San Franciscans rush to elect a new mayor, they should examine those strategies to see if they make any sense. After nearly a decade under Feinstein’s leadership, is San Francisco a healthy city holding its own through a minor downturn or an economic disaster area? Are San Francisco’s economic problems purely the result of national and international factors, or has the Pacific Rim/West Coast Wall Street strategy failed? Is the economy weathering the storm because of the mayor’s policies, or despite them? And perhaps more important, will Feinstein’s policies guide the city to new and greater prosperity in the changing economy of the next decade? Or is a significant change long overdue?
The questions are clear and obvious. The answers take a bit more work.
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SAN FRANCISCO’S economy is an immensely complex creature, and no single study or analysis can capture the full range of its problems and potential. But after considerable research, we’ve come to a very different conclusion than the leading sages of the city’s business community. Yes, San Francisco can have a rosy economic future — if we stop pursuing the failed policies of the past, cut our losses now and begin developing a new economic development program, one based on reality, not images — and one that will benefit a broad range of San Franciscans, not just a handful of big corporations and investors.
Our analysis of San Francisco’s economy starts at the bottom. Wells Fargo, PG&E and the Chamber see the city first and foremost as a place to do business, a market for goods and a source of labor. We see it as a community, a place where people live and work, eat and drink, shop and play.
The distinction is far more than academic. When you look at San Francisco the way Wells Fargo does, you see a booming market: 745,000 people who will spend roughly $19.1 billion on goods and services this year, up from $15.4 billion in 1980. By the year 2000, Wahed projects, that market could reach $229 billion as the population climbs to 800,000 and per-capita income hits $30,000 (in 1986 dollars), up from $18,811 in 1980. Employment has grown from 563,000 in 1980 to 569,000 in 1986. When you look at San Francisco as a place to live, you see a very different story. Perhaps more people are working in San Francisco — but fewer and fewer of them are San Franciscans. In 1970, 57.47 of the jobs in San Francisco were held by city residents, City Planning Department figures show. By 1980, that number had dropped to 50.77. Although more recent figures aren’t available, it’s almost certainly below 507 today.
Taken from a slightly different perspective, in 1970, 89.17 of the working people in San Francisco worked in the city. Ten years later, only 857 worked in the city; the rest had found jobs elsewhere.
Without question, an increase in per capita income signifies that the city is a better market. It also suggests, however, that thousands of low-income San Franciscans — those who have neither the skills nor the training for high-paying jobs — have been forced to leave the city. It comes as no surprise, for example that San Francisco is the only major city in the country to post a net loss in black residents over the past 15 years.
The displacement of lower-income residents highlights a key area in which San Francisco’s economy is badly deficient: housing. San Francisco’s housing stock simply has not kept pace with the population growth of the past five years. Between 1980 and 1984, while nearly 40,000 more people took up residence in the city, only 3,000 additional housing units were built.
Some of the new residents were immigrants who, lacking resources and glad to be in the country on any terms, crowded in large numbers into tiny apartments. Some were young, single adults, who took over apartments, homes and flats, bringing five of six people into places that once held families of three or four.
But overall, the impact of the population increase has been to place enormous pressure on the limited housing stock. Prices, not surprisingly, have soared. According to a 1985 study prepared for San Franciscans for Reasonable Growth by Sedway Cooke and Associates, the median rent for a one-bedroom apartment in 1985 was $700 a month. The residential vacancy rate was less than 17.
Housing is more than a social issue. A report released this spring by the Association of Bay Area Governments warns the entire Bay Area may face a severe housing crisis within the next two decades — and the lack of affordable housing may discourage new businesses from opening and drive existing ones away. When housing becomes too expensive, the report states, the wages employers have to pay to offset housing and transportation costs make the area an undesirable place to do business.
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WAHED’S WELLS FARGO report shows a modest net employment gain in San Francisco between 1980 and 1986, from 563,000 jobs to 569,000. What the study doesn’t show is that the positive job growth statistic reflects the choice of the study period more than it reflects current trends. In the late 1970s and early 1980s, San Francisco experienced considerable job growth. By 1981, that trend was beginning to reverse.
According to a study by Massachusetts Institute of Technology researcher David Birch, San Francisco actually lost some 6,000 jobs between 1981 and 1985. The study, commissioned by the Bay Guardian, showed that the decline occurred overwhelmingly to large downtown corporations — the firms upon which the Pacific Rim strategy was and is centered. Since 1981, those firms have cost the city thousands of jobs. (See The Monsters that Ate 10,000 jobs, Bay Guardian DATE TKTKTK).
Some of the firms — B of A, for example — were victims of poor management. Some, like Southern Pacific, were caught in the merger mania of the Reagan years. Others, however, simply moved out of town. And no new giants moved in to take their places.
What drove these large employers away? Not, it would appear, a lack of office space or other regulatory “obstacles” to growth: Between 1980 and 1985, San Francisco underwent the largest building boom in its history, with more than 10 million square feet of new office space coming on line. In fact, the city now has abundant vacant space; by some estimates, the vacancy rate for downtown office buildings is between 157 and 207.
The decision to move a business into or out of a city is often very complicated. However, Birch, who has done considerable research into the issue, suggests in the April 1987 issue of Inc. magazine that the most crucial concerns are what he calls “quality of life” factors. Quality-of-life factors include things like affordable family housing for employees; easy, inexpensive transit options and good-quality recreation facilities and schools — and good-quality local government. In many cases, researchers are finding, companies that need a large supply of “back office” labor — that is, workers who do not command executive salaries — are moving to the suburbs, where people who are paid less than executive salaries can actually afford to live.
“Today the small companies, not the large corporations, are the engines of economic growth,” Birch wrote. “And more often than not, small companies are growing in places that pay attention to the public realm, even if higher taxes are needed to pay for it.”
For the past 20 years, San Francisco has allowed, even encouraged, massive new highrise office development, geared to attracting new headquarters companies and helping existing ones expand. In the process, some basic city services and public amenities — the things that make for a good quality of life — have suffered.
The most obvious example is the city’s infrastructure — the roads, sewers, bridges, transit systems and other physical facilities that literally hold a modern urban society together. A 1985 report by then-Chief Administrative Officer Roger Boas suggested that the city needed to spend more than $1 billion just to repair and replace aging and over-used infrastructure facilities. Wells Fargo’s report conceeds that that city may be spending $50 million a year too little on infrastructure maintenance.
Some of that problem, as Boas points out in his report, is due to the fact that many city facilities were built 50 or more years ago, and are simply wearing out. But wear and tear has been greatly increased by the huge growth in downtown office space — and thus daytime workplace population — that took place over the previous two decades.
To take just one example: Between 1980 and 1984, City Planning Department figures show, the number of people traveling into the financial district every day increased by more than 10,000. Nearly 2,000 of those people drove cars. In the meantime, of course, the number of riders on the city’s Municipal Railway also increased dramatically. City figures show more than 2,000 new Muni riders took buses and light rail vehicles into the financial district between 1981 and 1984. Again, city officials resist putting a specific cost figure on that increase — however, during that same period, the Muni budget increased by one-third, from $149 million to $201 million. And the amount of General Fund money the city has had to put into the Muni system to make up for operating deficits rose by some 737 — from $59 million to $102 million.
The new buildings, of course, have meant new tax revenues — between 1981 and 1986, the total assessed value of San Francisco property — the city’s tax base — increased 767, from $20.3 billion to $35.8 billion. But the cost of servicing those buildings and their occupants also increased 437, from $1.3 billion to to $1.9 billion. In 1982, San Francisco had a healthy municipal budget surplus of $153 million; by this year, it was down to virtually nothing.
The city’s general obligation bond debt — the money borrowed to pay for capital improvements — has steadily declined over the past five years, largely because the 1978 Jarvis-Gann tax initiative effectively prevented cities from selling general obligation bonds. In 1982, the city owed $220 million; as of July 1st, 1987, the debt was down to $151 million.
However, under a recent change in the Jarvis-Gann law, the city can sell general obligation bonds with the approval of two-thirds of the voters. The first such bond sale — $31 million — was approved in June, and the bonds were sold this month, raising the city’s debt to $182 million. And this November, voters will be asked to approve another $95 million in bonds, bringing the total debt to $277 million, the highest level in five years.
The city’s financial health is still fairly sound; Standard and Poor’s gives San Francisco municipal bonds a AA rating, among the best of any city in the nation. And even with the new bonds, the ratio of general obligation debt to total assessed value — considered a key indicator of health, much as a debt-to-equity ratio is for a business — is improving.
But the city’s fiscal report card is decidedly mixed. For most residents, signs of the city’s declining financial health show up not in numbers on a ledger but in declining services. Buses are more crowded and run less often. Potholes aren’t fixed. On rainy days, raw sewage still empties into the Bay. High housing costs force more people onto the streets — and the overburdened Department of Social Services can’t afford to take care of all of them.
What those signs suggest is that, in its pell-mell rush to become the Manhattan of the West, San Francisco may have poisoned its quality of life — and thus damaged the very economic climate it was ostensibly trying to create.
MAYOR DIANNE FEINSTEIN’S prescription for San Francisco’s economic problems and her blueprint for its future can be summed up in four words: More of the same. Feinstein, like Wells Fargo, PG&E and the Chamber of Commerce, is looking to create jobs and generate city revenues from the top of the economy down. Her program flies in the face of modern economic reality and virtually ignores the changes that have taken place in the city in the past five years.
Feinstein’s most visible economic development priorities have taken her east, to Washington D.C., and west, to Japan and China. In Washington, Feinstein has lobbied hard to convince the Navy to base the battleship USS Missouri in San Francisco. That, she says, will bring millions of federal dollars to the city and create thousands of new jobs.
In Asia, Feinstein has sought to entice major investors and industries to look favorably on San Francisco. She has expressed hope that she will be able to attract several major Japanese companies to set up manufacturing facilities here, thus rebuilding the city’s manufacturing base and creating jobs for blue-collar workers.
Neither, of course, involves building new downtown highrises. But both are entirely consistent with the Pacific Rim strategy — and both will probably do the city a lot more harm than good.
Feinstein’s programs represent an economic theory which has dominated San Francisco policy-making since the end of World War II. In those days, the nation’s economy was based on manufacturing — iron ore from the ground became steel, which became cars, lawn mowers and refrigerators. Raw materials were plentiful and energy was cheap.
By the early 1970s, it was clear that era was coming to a close. Energy was suddenly scarce. Resources were becoming expensive. The economy began to shift gears, looking for ways to make products that used less materials and less energy yet provided the same service to the consumer.
Today, almost everyone has heard of the “information age” — in fact, the term gets used so often that it’s begun to lose its meaning. But it describes a very real phenomenon; Paul Hawken, the author of The Next Economy, calls it “ephemeralization.” What is means is that the U.S. economy is rapidly changing from one based manufacturing goods to one based on processing information and providing services. In the years ahead, the most important raw materials will be ideas; the goal of businesses will be to provide people with useful tools that require the least possible resources to make and the least possible energy to use.
In the information age, large companies will have no need to locate in a central downtown area. The source of new jobs will not be in manufacturing — giant industrial factories will become increasingly automated, or increasingly obsolete. The highways of the nation’s commerce will be telephone lines and microwave satellite communications, not railroads and waterways.
IF SAN FRANCISCO is going to be prepared for the staggering changes the next economy will bring, we might do well to take a lesson from history — to look at how cities have survived major economic changes in the past. Jane Jacobs, the urban economist and historian, suggests some basic criteria.
Cities that have survived and prospered, Jacobs writes, have built economies from the bottom up. They have relied on a large number of small, diverse enterprises, not a few gigantic ones. And they have encouraged business activities that use local resources to replace imports, instead of looking to the outside for capital investment.
A policy that would tie the city’s economic future to the Pentagon and Japanese manufacturing companies is not only out of synch with the future of the city’s economy — it’s out of touch with the present.
In San Francisco today, the only major economic good news comes from the small business sector — from locally owned independent companies with fewer than 20 employees. All of the net new jobs in the city since 1980 have come from such businesses.
Yet, the city’s policy makers — especially the mayor — have consistently denied that fact. As recently as 1985, Feinstein announced that the only reason the city’s economy was “lively and vibrant” was that major downtown corporations were creating 10,000 new jobs a year.
Almost nothing the city has done in the past ten years has been in the interest of small business. In fact, most small business leaders seem to agree that their astounding growth has come largely despite the city’s economic policy, not because of it. That situation shows no signs of changing under the Feinstein administration; the battleship Missouri alone would force the eviction of some 190 thriving small businesses from the Hunters Point shipyard.
San Francisco’s economic problems have not all been the result of city policies. The financial health of the city’s public and private sector is affected by state and federal policies and by national and international economic trends.
Bank of America, for example, is reeling from the inability of Third World countries to repay outstanding loans. Southern Pacific and Crocker National Bank both were victims of takeovers stemming from relaxed federal merger and antitrust policies. In fact, according to Wells Fargo, 21 San Francisco corporations have been bought or merged since 1975. Meanwhile, deep cutbacks in federal and state spending have crippled the city’s ability to repair its infrastructure, improve transit services, build low cost housing and provide other essential services.
To a great extent, those are factors outside the city’s control. They are unpredictable at best — and over the next ten or 20 years, as the nation enters farther into the Information Age, the economic changes with which the city will have to cope will be massive in scale and virtually impossible to predict accurately.
Again, the experiences of the past contain a lesson for the future. On of San Francisco’s main economic weaknesses over the past five years has been its excess reliance on a small number of large corporations in a limited industrial sector — largely finance, insurance and real estate. When those industries took a beating, the shock waves staggered San Francisco.
Meanwhile, the economic good news has come from a different type of business — businesses that were small able to adapt quickly to changes in the economy and numerous and diverse enough that a blow to one industry would not demolish a huge employment base.
But instead of using city policy to encourage that sector of the city’s economy, Feinstein is proposing to bring in more of the type of business that make the city heavily vulnerable to the inevitable economic shocks that will come with the changes of the next 20 years.
THE CANDIDATES who seek to lead the city into the next decade and the next economy will need thoughtful, innovative programs to keep San Francisco from suffering serious economic problems. Those programs should start with a good hard dose of economic reality — a willingness to understand where the city’s strengths and weaknesses are — mixed with a vision for where the city ought to be ten and 20 years down the road.
Thus far, both are largely missing form the mayoral debate.
For years, San Francisco activists and small business leaders have been complaining about the lack of reliable, up-to-date information on the city’s economy and demographics. The environmental impact report on the Downtown Plan — a program adopted in 1985 — was based largely on data collected in 1980. That same data is still used in EIRs prepared by the City Planning Department, and it’s now more than seven years out of date.
In many areas, even seven-year-old data is simply unavailable. Until the Bay Guardian commissioned the Birch studies in 1985 and 1986, the city had no idea where jobs were being created. Until SFRG commissioned the Sedway-Cooke report in 1985, no accurate data existed on the city’s labor pool and the job needs of San Franciscans.
Today, a researcher who wants to know how much of the city’s business tax revenue comes from small business would face a nearly impossible task. That’s just not available. Neither are figures on how much of the city’s residential or commercial property is owned by absentee landlords who live outside the city. If San Francisco were a country, what would its balance of trade be? Do we import more than we export? Without a huge research staff and six months of work, there is no way to answer those questions.
Bruce Lilienthal, chairman of the Mayor’s Small Business Advisory Commission, argues that the city needs to spend whatever money it takes to create a centralized computerized data base — fully accessable to the public — with which such information can be processed and analyzed.
A sound economic policy would combine that sort of information with a clear vision of what sort of city San Francisco could and should become.
What would a progressive, realistic economic development platform look like? We’ve put together a few suggestions that could serve as the outline for candidates who agree with our perspective — and as an agenda for debate for candidates who don’t.
* ADEQUATE AFFORDABLE HOUSING is essential to a healthy city economy, and in the Reagan Era, cities can’t count on federal subsidies to build publicly financed developments. Progressive housing experts around the country agree that, in a city under such intense pressure as San Francisco, building new housing to keep pace with demand will not solve the crisis alone; the city needs to take action to ensure that existing housing is not driven out of the affordable range.
Economist Derek Shearer, a professor at Occidental College in Los Angeles and a former Santa Monica planning commissioner, suggests that municipalities should treat housing as a scarce public resource, and regulate it as a public utility. Rents should be controlled to allow property owners an adequate return on their investment but prevent speculative price-gouging.
Ideally, new housing — and whenever possible, existing housing — should be taken out of the private sector altogether. Traditional government housing projects have had a poor record; a better alternative is to put housing in what is commonly called a land trust.
A land trust is a private, nonprofit corporation that owns property, but allows that property to be used under certain terms and conditions. A housing trust, for example, might allow an individual or family to occupy a home or apartment at a set monthly rate, and to exercise all rights normally vested in a homeowner — except the right to sell for profit. When the occupant voluntarily vacated the property, it would revert back to the trust, and be given to another occupant. The monthly fee would be set so as to retire the cost of building the property over it’s expected life — say, 50 years. Each new occupant would thus not have to pay the interest costs on a new mortgage. That alone, experts say, could cut as much as 707 off the cost of a home or apartment.
* DEVELOPMENT DECISIONS should be made on the basis of community needs. A developer who promises to provide jobs for San Franciscans should first be required to demonstrate that the jobs offered by project will meet the needs of unemployed residents of the city. Development fees and taxes should fully and accurately reflect the additional costs the project places on city services and infrastructure.
Land use and development decisions should also be geared toward meeting the needs of small, locally owned businesses — encouraging new start-ups and aiding the expansion of existing small firms.
* ECONOMIC DEVELOPMENT programs should encourage local firms to use local resources in developing products and services that bring revenue and wealth into the city instead of sending it to outside absentee owners and that encourage economic self-sufficiency.
Cities have a wide variety of options in pursuing this sort of goal. City contracts, for example, should whenever possible favor locally owned firms and firms that employ local residents and use local resources. Instead of just encouraging sculptured towers and flagpoles on buildings, city planning policies should encourage solar panels that decrease energy imports, rooftop gardens that cut down on food imports and utilize recycled materials that otherwise would become part of the city’s garbage problem. (Using recycled materials is by no means a trivial option; if all of the aluminum thrown away each year in San Francisco were recycled, it would produce more usable aluminum than a small-to-medium sized bauxite mine.)
Other cities have found numerous ways to use creative city policies to encourage local enterprise. In Minneapolis-St. Paul, for example an economic development agency asked the U.S. Patent Office for a list of all the patents issued in the past ten years to people with addresses in the Twin Cities area. The agency contacted those people — there were about 20 — and found that all but one had never made commercial use of the patents, largely for lack of resources. With the agency as a limited partner providing venture capital, more than half the patent owners started businesses that were still growing and expanding five years later. Some of those firms had actually outgrown their urban locations and moved to larger facilities out of town — but since the Twin Cities public development agency had provided the venture capital, it remained a limited partner and the public treasury continued to reap benefits from the profits of the businesses that had left town.
* CITY RESOURCES should be used to maximize budget revenues. For example, San Francisco currently owns a major hydroelectric power generating facility at Hetch Hetchy in Yosemite National Park. A federal law still on the books requires San Francisco to use that facility to generate low-cost public power for its citizens; that law, the Raker Act, has been honored only in the breach. That means every year PG&E takes millions of dollars in profits out of San Francisco (the company is based here, but very few of its major stockholders are San Franciscans). The last time we checked, San Francisco was losing $150 million (CHECK) in city revenue by failing to enforce the Raker Act and municipalize its electric utility system.
Meanwhile, PG&E continues to use city streets and public right-of-ways for its transmission cables at a bargain-basement franchise fee passes in 1932 and never seriously challenged. Other highly profitable private entities, like Viacom cable television, use public property for private purposes and pay highly favorable rates for the right.
Those ideas should be the a starting point, not a conclusion for mayoral debates. But thus far, we’ve seen precious little consideration of the issues, much less concrete solutions, from any of the candidates.
The mayor’s race, however, is still very much open, and the candidates are sensitive to public opinion. If the voters let the candidates know that we want to hear their visions of the city’s economic future — and their plans for carrying those visions out — we may see some productive and useful discussions yet.*
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