Realtors

SEIU Local 1021 backs motorist measure and a Republican. WTF?!?!

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Service Employees International Union Local 1021 — which has long played an important role in San Francisco’s progressive movement, providing the money and member turnout to achieve some important victories for the left — finds itself at odds with many progressive activists in this election, particularly on the issue of transportation.

As we previously reported, the union has been aggressively campaigning for BART Board member James Fang’s reelection this year, even though Fang is the city’s only elected Republican and not particularly progressive on transit and other issues. But he was the only BART board member to walk the picket line with the workers during last year’s disastrous strikes, so it’s understandable why the union would stand with him now.

What’s less understandable is why Local 1021 has endorsed the Yes of Prop. L campaign, which seeks to undermine San Francisco’s transit-first policies and transfer money from Muni operations to subsidize more free public parking for automobiles, joining such unlikely allies as the San Francisco Republican Party, the SF Association of Realtors, and the SF Chamber of Commerce.

So we asked Local 1021 Political Chair Alysabeth Alexander about the endorsement, and she told us: “One of our member leaders is a proponent and the argument that driving is hell in San Francisco resonated with a portion of our membership that drives and for whom public transportation is not an option either because of service cuts and route changes, because their job requires car use, or because they work shifts that don’t work for public transportation or biking. Because of rising housing prices many working people have been pushed out of SF over the years, and many of our workers shifts end or start when BART or Muni isn’t working or isn’t practical. Our union is 100 percent supportive of public transportation and addressing the climate crisis head-on.  We are fighting for the expansion of public transportation and for adequate funding, and sufficient staffing so that it can be maintained.”

The “member leader” she referred to was apparently Claire Zvanski, a longtime past president of the District 11 Democratic Club. But even that club couldn’t bring itself to endorse this myopic primal scream of a ballot measure, taking no position and writing, “This is a policy statement to inform the MTA that cars and those who love them are not getting enough attention in the transit planning process. This measure received a No Recommendation as an alternative to an Oppose from the eboard, mostly out of respect for our venerable past-president Claire Zvanski. The members also voted No Recommendation.”

Most progressive and transportation-related groups are opposing Prop. L, which its opponents say will actually make things worse for motorists in the city by undermining current efforts to make Muni more attractive and encourage people to use alternatives to the automobile.

“If we don’t reduce the congestion on the streets, that makes it harder for the people who really do have to drive,” No on L campaign manager Peter Lauterborn told us, responding to Alexander’s argument that the measure somehow helps working people and noting that Local 1021 never allowed the No on L campaign to make its case before endorsing the measure [UPDATE/CLARIFICATION: Alexander said the San Francisco Bicycle Coalition “did present a No on L position]. He also said the measure may have visceral appeal to frustrated drivers, but it doesn’t really make sense.

“Taking away money from the transportation system to build parking garages doesn’t help anyone,” Lauterborn said. “The Labor Council endorsed No on L and the reality is working class people use Muni at a far higher percentage than those citywide….Being pro-transit is inconsistent with supporting a ballot measure that would defund Muni.”

Meanwhile, in an allegedly unrelated matter, Local 1021 Political Director Chris Daly — who was a local leader of the progressive movement while serving the Board of Supervisors 2000-2010 — on Friday resigned from the union, where the Guardian has long been aware that he was having internal power struggles over the last year.

Daly tells us that his departure wasn’t based on political or philosophical differences with SEIU, that he’s proud of the work that he and his colleagues have done on wage equity and beating back anti-worker threats, and that it just seemed like the right time to leave, although he’s not sure what he’ll do next.

“I’m sorry to go,” he told us, “but it was time to go.”

Grassroots campaigns work to counter the influence of big donors

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Big money is pouring into a few campaign committees for the fall election, with Big Soda targeting the soda tax, Realtors gunning for the anti-speculation tax, and the Fisher family last week giving $500,000 to promote artificial turf playing fields in SF (Yes on I, No on H), according to campaign filings. But low-budget grassroots campaigns are still having a strong presence at public events like the Sept. 14 Sunday Streets in Western Addition.

San Franciscans Against Real Estate Speculation, Yes on G, had activists out in force even though it has only raised a few thousand dollars. Its biggest contribution so far is $5,000 from attorney Dean Preston of Tenants Together, who was out there spreading the word near Alamo Square Park, along with campaign consultant Quintin Mecke, the runner-up in the 2007 mayor’s race.

One of the more surprising grassroots campaign of the season is No on L, San Franciscans Against Gridlock, which is campaigning against the pro-motorist Restore Transportation Balance initiative, a measure aimed at undermining the city’s transit-first policy and promoting more free parking.

The Yes on L campaign hasn’t shown much sign of life since the summer when it spent nearly $50,000 on its signature-gathering effort out of about $83,000 raised (including $49,000 from tech titan Sean Parker), but it was sitting on nearly $35,000 in the bank as of July 16.

But the No on L crowd is taking this attack on sustainable transportation policies seriously, and it’s hoping to fill its fairly meager coffers ($5,000 from Daniel Murphy on Sept. 6 is its biggest donation) this evening [Tues/16] from 6-8pm with a fundraiser at Public Bikes, 549 Hayes Street.

That event is hosted by a bevy of transportation activists and Sup. Scott Wiener, David Chiu, and Jane Kim. As the campaign says, “If you care about helping to build a better transit system, a more walkable and bicycle-friendly city, and reducing car congestion in San Francisco, the No on Gridlock, No on L campaign needs your support to raise money to educate voters.”  

Realtors give $600,000 to defeat anti-speculation tax

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Two Realtor groups have dumped nearly $600,000 into the campaign against Prop. G, the tax on flipping properties to discourage real estate speculation and evictions in San Francisco, a massive early donation that could signal the beginning of a campaign onslaught by the Realtors.

A campaign group calling itself Stop the Housing Tax, No on G, and Coalition of Homeowner, Renter, and Real Estate Organizations received a $425,000 donation from the California Association of Realtors Issues Mobilization PAC on Sept. 4 and $170,000 from the San Francisco Association of Realtors on Aug. 26, according to filings with the Ethics Commission.

Apparently, the Realtors recognize they have a strong financial stake in encouraging the flipping of houses within one to five years of being sold, on which the measure would levy a graduated tax of 24-14 percent in order to discourage. Such quick turnarounds often involve evicting tenants in order to increase a home’s market value.

Representatives for the Realtors didn’t immediately return our calls, but Sara Shortt, executive director of the Housing Rights Committee of San Francisco and a supporter of Prop. G, told us the huge donations indicate what’s really driving opposition to the measure.

“Make no mistake: the polished No on G mailer you receive spouting lies such as ‘G will hurt homeowners’ is coming directly from the mouths of the Realtors, the very people who have the most to gain by continuing to allow for evictions and flipping of apartments,” Shortt told the Guardian. “These are the same players who dumped piles of money to kill Ellis Act reform in Sacramento. And these are the same people who are making windfall profits by evicting low income tenants in San Francisco and wreaking havoc on our neighborhoods.”

UPDATE: Jay Cheng with the SF Association of Realtors just sent us an email that said, “We are working to raise funds to defeat the tax on housing, which will make San Francisco even less affordable to middle class families. We’re proud the people who know the most about housing are stepping up to defeat this tax, which will only backfire and make housing more expensive.”

Know the most, or profit the most? We asked a follow-up question about whether financial self-interest prompted the donations, and we’ll update this post if and when we hear back.  

Angry building owners threaten lawsuit over anti-speculation tax

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Opponents of the anti-speculator tax that will appear on the November ballot blasted the proposal in a City Hall hearing yesterday [Thu/10] — pledging to defeat the measure in court even if voters approve it — but they were overwhelmed by a strong turnout from supporters who said real estate speculation drives up the cost of housing without adding any value.

“We can sue you in court on the many of the unconstitutional aspects of this and we will do that,” Janan New, director of the San Francisco Apartment Association, said of the measure that would charge a 24 percent tax on properties flipped within a year of purchase down to a 14 percent tax if flipped within five years.

New and other allies — including San Francisco Association of Realtors, Small Property Owners of San Francisco, and Sup. Katy Tang — claimed that the measure is illegally retroactive because it affects those who recently bought property and that it doesn’t account for people who need to sell their properties because of job loss or other life changes.

“This is almost tantamount to a confiscation of property,” Peter Rich of SPOSF said at the hearing.

But Sup. David Campos — who placed the measure on the ballot along with Sups. Eric Mar, Jane Kim, and John Avalos — refuted allegations that the measure isn’t legally sound and carefully questioned City Attorney’s Office staff to clarify the laws that allow for the measure.

“I know there’s a lot of ulterior motives here because we do know this is going to be challenged in court, so I want to be very clear,” Campos said in response to a line of questioning from Tang, who continued to maintain, “So it’s retroactive in a sense” after being told by the deputy city attorney that it wasn’t retroactive because the tax only applies to future property sales.

The anti-speculation tax was first introduced by then-Sup. Harvey Milk shortly before his assassination in 1978 (Dianne Feinstein killed the measure after becoming acting mayor), and it was revived this year during a series of tenant conventions and sponsored by Mar.

“What we’re proposing is very reasonable to deal with the affordable housing crisis,” Mar said at the hearing, noting that it exempts single-family homes, projects larger than 29 units, and sales triggered by the death of the property owner. “It’s been crafted with enough exemptions to protect the small guy and really go after the profiteers.”

During the public comment period, where supporters on the measure vastly outnumbered opponents, several speakers referenced Harvey Milk and said housing in San Francisco wouldn’t be so expensive today if the measure had passed back then, a time when evictions and displacement were also on the rise.

“He was assassinated before it came to fruition. The parallels to that time and today are striking,” testified Tom Temprano, president of the Harvey Milk LGBT Democratic Club, who urged supervisors to “honor the legacy of Harvey Milk by passing this thoughtful and well-crafted legislation.”

Brian Basinger, head of the AIDS Housing Alliance, played old video footage of Milk talking about the measure back in 1978, shortly after he was evicted from his Castro Street camera store by a landlord seeking higher rents, noting that profiteering forces San Franciscans to spend too much on housing and have too little left over for other needs.

“So when you look at that, it’s going to affect the larger economy,” Milk said of real estate speculation.

Gen Fujioka, who works at Chinatown Community Development Center and spoke for San Franciscans Against Real Estate Speculation, cited recent evidence of properties snapped up by speculators and quickly flipped for profits of 50 percent of more.

“Basically, what we’re seeing today is an escalation in the sales prices of multi-unit buildings beyond what people can pay in rent,” Fujioka testified, noting how that essentially forces landlords to evict rent-controlled tenants to make the investments pencil out. “That kind of price escalation is causing instability in our communities.”

But opponents lashed out at the measure and the characterization that they were profiteering in ways that hurt people. “It’s a housing tax and it doesn’t make sense to have a housing tax in the most expensive city in the country,” said Jay Chang of the Association of Realtors.  

Aaron Jones said he and his wife invested their children’s college savings in a small apartment building, and that they’re good landlords who should be able to sell the property when they want to without penalty.

“We can’t sell until 2017 with this retroactive, punitive tax,” Jones said, saying there were many other small investors like him who were afraid to speak up because “in San Francisco, to be an investor — not a speculator — is to be the devil.”

But supporters of the measure say their intention isn’t to demonize property owners but to do something about the eviction and displacement crisis that is changing the face of the city, and to create a disincentive to bad behavior.

“It’s really the most vulnerable people who are being affected by evictions,” said Erin McElroy of the Anti-Eviction Mapping Project, citing her group’s research showing 72 percent of recent evictions have been of the elderly or disabled.

“Speculation is the commodification of housing and housing is essential,” said Chris Durazo of the Veterans Equity Center.

Campos said most landlords should support the measure as check against speculators that are pushing up the price of housing, triggering evictions, and creating a divisive politcal climate: “Speculators are giving landlords in San Francisco and property owners in San Francisco a bad name.”

Taxing speculators

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steve@sfbg.com

Political tensions over evictions, displacement, real estate speculation, and rapidly rising housing costs in San Francisco are likely to heat up through the summer and autumn as a trio of November ballot measures are debated and combated by what’s expected to be a flood of campaign cash from developers and other real estate interests.

Topping the list is a tax measure to discourage the flipping of properties by real estate speculators. Known generally as the anti-speculation tax — something then-Sup. Harvey Milk was working on at the time of his assassination in 1978 — it was the leading goal to come out of a citywide series of tenant conventions at the beginning of this year (see “Staying power,” 2/11/14).

“To be in a position to pass the last thing Harvey Milk worked on is a profound opportunity,” AIDS Housing Alliance head Brian Basinger told us, arguing the measure is more important now then ever.

The measure has been placed on the ballot by Sups. John Avalos, David Campos, Jane Kim, and Eric Mar and is scheduled for a public hearing before the Board of Supervisors Rules Committee on July 10 at 2pm.

“It’s an absolutely key issue for San Francisco right now. Passing this measure will create a seismic shift in what we’re seeing with evictions and displacement in the city,” Sara Shortt, director of the Housing Rights Committee, told the Guardian.

The measure creates a supplemental surcharge on top of the city’s existing real estate transfer tax, a progressive rate ranging from a 24 percent tax on the sale of a property within one year of its purchase to 14 percent if sold between four and five years later.

In addition to levying the tax, the measure would also give the Board of Supervisors the power to waive that tax “subject to certain affordability-based restrictions on the occupancy of the real property,” giving the city leverage to expand and preserve deed-restricted affordable housing.

Meanwhile, there’s been a flurry of backroom negotiations surrounding the City Housing Balance Requirement measure sponsored by Sup. Jane Kim, which would require market rate housing projects to get a conditional use permit and be subjected to greater scrutiny when affordable housing falls below 30 percent of total housing construction (with a number exemptions, including projects with fewer than 24 units).

That measure is scheduled for a hearing by the Rules Committee on July 24 and, as an amendment to the City Charter, it needs six votes by the Board of Supervisors to make the ballot (the anti-speculation tax is an initiative that requires only the four supervisorial signatures that it now has).

Mayor Ed Lee and his allies in the development community responded to Kim’s measure by quickly cobbling together a rival initiative, Build Housing Now, which restates existing housing goals Lee announced during his State of the City speech in January and includes a poison pill that would invalidate Kim’s housing balance measure.

Together, the measures will draw key battle lines in what has become the defining political question in San Francisco these days: Who gets to live here?

 

COMBATING SPECULATORS

In February, Mayor Lee and his allies in the tech world, most notably venture capitalist Ron Conway, finally joined housing and other progressive activists in decrying the role that real estate speculators have played in the city’s current eviction and displacement crisis.

“We have some of the best tenant protections in the country, but unchecked real estate speculation threatens too many of our residents,” Lee said in a Feb. 24 press release announcing his support for Sen. Mark Leno’s Ellis Act reform measure SB 1439. “These speculators are turning a quick profit at the expense of long time tenants and do nothing to add needed housing in our City.”

The legislation, which would have prevented property owners from evicting tenants using the Ellis Act for at least five years, failed in the Legislature last month. So will Lee honor his own rhetoric and support the anti-speculation tax? His Communications Director Christine Falvey said Lee hasn’t yet taken a position on the measure, but “the mayor remains very concerned about real estate speculators.”

Peter Cohen of the Council of Community Housing Organization said Lee and his allies should support the measure: “It seems so clearly aligned with the same intent and some of the same mechanics as Ellis Act reform, which had the whole city family behind it.”

“I think it would be very consistent with their position on Ellis Act reform to support the anti-speculation tax,” Shortt told us. “If the mayor and tech companies went to bat for the anti-speculation tax, and not against it, that would show they have real concern about displacement and aren’t just giving it lip service.”

Conway’s pro-tech group sf.citi didn’t returned Guardian calls on the issue, nor did San Francisco Planning and Urban Research Association, but their allies in the real estate industry strongly oppose it.

“As Realtors, our goals are to increase housing availability and improve housing affordability,” San Francisco Association of Realtors CEO Walk Baczkowski told the Guardian. “We don’t believe the proposal from Sup. Mar, which is essentially a tax on housing, will accomplish either of those goals.”

But supporters of the measure say real estate speculation only serves to drive up housing costs.

“We have been successful at bringing people around on the issue of real estate speculation,” Basinger told us. “But of course, there will be financed opposition. People will invest their money to protect their interests.”

“We know it’s going to be a fight and we’ll have to put in a lot of resources,” Shortt said, adding that it’s a fight that tenant activist want to have. “Part of what fuels all of this [displacement] is the rampant real estate speculation. We can’t put profits above people.”

 

MAYOR’S MEASURE

Falvey denies that Lee’s proposal is designed simply to negate Kim’s measure: “Build Housing Now specifically asks the voters to adopt as official city policy the Mayor’s Housing Plan to create 30,000 new homes by 2020 — the majority within reach of low, moderate, and middle income residents. This is not a reaction, but a proactive measure that lets voters weigh in on one of the mayor’s most important policy priorities.”

Yet the most concrete thing it would do is sabotage the housing balance measure, an intention it states in its opening words: “Ordinance amending the Planning Code to prohibit additional land use requirements such as conditional use authorizations, variances or other requirements on housing projects…based on a cumulative housing balance ratio or other similar criteria related to achieving a certain ration of affordability.”

Beyond that, it would have voters validate Lee’s housing goal and “urge the Mayor to develop by December 31, 2014 a Housing Action Plan to realize this goal.” The measure is filled with that sort of vague and unenforceable language, most of it designed to coax voters into thinking it does more than it would actually do. For example, it expands Lee’s stated goal of 30 percent of that new housing being affordable by setting a goal of “over 50 percent within reach of low and middle income households.”

But unlike most city housing policies that use the affordable housing threshold of those earning 120 percent of area median income (AMI) and below, Lee’s measure eschews that definition, allowing him and his developer allies to later define “middle income households” however they choose. Falvey told us “he means the households in the 50-150 percent of AMI range.”

The measure would also study the central premise of Mayor Lee’s housing policy, the idea that building more market rate housing would bring down the overall price of housing for everyone, a trickle-down economic argument refuted by many affordable housing advocates who say the San Francisco housing market just doesn’t work that way because of insatiable and inelastic demand.

“Within 60 days of the effective date of this measure, the Planning Department is directed and authorized to undertake an economic nexus analysis to analyze the impact of luxury development on the demand for middle income housing in the City, and explore fees or other revenue sources that could help mitigate this impact,” the measure states.

Shortt thinks the mayor’s measure is deceptive: “It’s clever because for those not in the know, it looks like a different way to solve the problem.” But she said the housing balance measure works well with the anti-speculation tax because “one way to keep that balance is to make sure we don’t lose existing rental stock.”

And advocates say the anti-speculation tax is the best tool out there for preserving the rental housing relied on by nearly two-thirds of city residents.

“It’s the best measure we have going now,” Basinger said of the anti-displacement tax. “Mayor Ed Lee and his tech supporters were unable to rally enough support at the state level to reform the Ellis Act, so this is it, folks.”

DCCC calls against Prop B did not have desired effect, did raise questions

Chairperson Mary Jung of the San Francisco Democratic County Central Committee, a highly influential political body that governs the San Francisco Democratic Party, has come under fire for “misuse of funds” after authorizing the use of DCCC dollars to make calls to voters just before the June 3 election.

The funds in question, according to DCCC members who raised concerns, came out of a $25,000 check from billionaire venture capital investor Ron Conway, received by the DCCC May 30.

In a June 16 letter – signed by DCCC members Kelly Dwyer, Hene Kelly, Sup. Eric Mar, Sup. David Campos, Sup. John Avalos and Petra DeJesus – Jung is taken to task for directing $11,674.48 from this donation be used for phone calls placed to voters in opposition to Proposition B, which appeared on the June 3 ballot, just before the election.

As previously reported, a complainant cried foul on this action in a filing with the San Francisco Ethics Commission, because callers seemed to be intentionally misleading voters by implying that the No Wall on the Waterfront Campaign, which backed the measure, was opposed to it.

When we phoned Jung for comment on that complaint, she said she did not have the call script and could not comment on the charge that the calls were misleading. She also said Conway’s contribution was not necessarily put toward the No on B calls. Instead, she told us, she could not link any single donation with any single expenditure, because the DCCC had been conducting broad fundraising efforts leading up to the election.

In their letter to Jung, the dissenting DCCC members argued that her decision to authorize the use of funds for the No on B voter calls violated the organization’s bylaws, because “there was never a vote by the members to expend $11,674.48 to make calls for No on B.” 

The letter points to an article within the board’s bylaws, stating that “Disbursements of SFDCCC funds … shall be authorized by a majority vote of the voting members present and voting at a regular meeting.” 

In the end, San Francisco voters overwhelmingly approved Prop. B, which requires voter approval before building heights may be increased above established limits for new waterfront development projects. However, the measure was not popular among real-estate development interests.

In addition to being chair of the DCCC, Jung is employed as a paid lobbyist for the San Francisco Association of Realtors, making her professionally positioned at the center of the San Francisco real-estate community.

“The power that comes with being the Chair does not mean that you can circumvent Bylaws and advocate and raise money for causes that you happen to also work for,” the authors of the letter stated bluntly. “There is a serious conflict of interest here.”

When the Bay Guardian phoned the DCCC to ask if there was an expert on the organization’s bylaws who might be able to comment on whether the rules had been violated, we were directed to Arlo Hale Smith, a 30-year DCCC member and parliamentarian with a deep understanding of the bylaws.

Smith offered an interesting twist on the matter: He said these funds were indeed “properly expended, under the emergency provision.”

The emergency provision? Yes, Smith explained, the DCCC bylaws contain a provision allowing the DCCC chair and treasurer to authorize the use of funds without first calling a vote, “in the event of an emergency.” This provision has been used in the past, he said, to authorize last-minute expenditures when an election imposes a tight deadline.

Since the money arrived three days before the election, there was no time to call a meeting and vote on it, Smith clarified. That’s why it was perfectly legitimate for Jung to authorize the use of funds. He added that disagreement over the content of the calls warranted a separate conversation.

“Because of when the check arrived – it constituted an emergency,” Smith noted, confirming that he was talking about the check from Conway.

That would be the same check from Conway that Jung told us had nothing to do with the No on B calls.

Sounds like the DCCC is going to have lots to talk about on June 25, when the members who submitted the letter asked for a hearing on this matter.

Here’s the full text of the letter.

DCCC members' letter to Chair Mary Jung

Breaking the chains

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steve@sfbg.com

San Franciscans have always been wary of chain stores, more so than residents of any other major US city, none of which have taken on the ever-expanding national corporations and their homogenizing impact on local communities as strongly as San Francisco.

In the decade since San Francisco first adopted trail-blazing controls on what it calls “formula retail” businesses, those restrictions have only gotten tighter for various commercial districts around the city as elected supervisors seek to prevent big companies from taking over key storefronts from local shopkeepers.

But now, as the Planning Department and Mayor’s Office push a new set of formula retail regulations that they say standardizes and expands the analysis and controls for chain stores throughout the city, neighborhood groups and small business advocates are decrying aspects of the proposal that actually weaken those controls.

Most controversial is the proposal to almost double the number of outlets that a company can have before it is considered a formula retail business, going from up to 11 stores now up to 20 under the proposal, which was approved by the Small Business Commission last week and heads to the Planning Commission next month.

Opposition is particularly strong in North Beach, one of two neighborhood commercial districts that have an outright ban on formula retail business (Hayes Valley is the other) and where residents are organizing to fight the proposal at the Board of Supervisors and at the ballot if necessary.

“The Planning Department proposal to redefine what a chain store is flies in the face of the voters’ will and 10 years of successful chain store policy,” Aaron Peskin, the former Board of Supervisors president from North Beach who sponsored the ordinance banning chains there, told the Guardian.

The citywide voters he refers to are those who approved Prop. G by a wide margin in 2006, defining formula retail business as having 11 or more outlets with common branding and merchandise and requiring that they obtain a conditional use permit before opening in most neighborhood commercial districts, thus giving local residents a vehicle to stop those projects.

Although Prop. G allows the city to update its standards and definitions regarding formula retail, Peskin and others said throwing out the negotiated number of 11 outlets undercuts “the fundamental underpinning of the formula retail controls.”

The Planning Department proposal also does nothing to prevent big national chains from creating spin-offs to circumvent the controls, a growing trend that raised controversy in the last few years, including when Gap subsidiary Athleta opened a store on Fillmore Street and when Liz Claiborne owner Fifth & Pacific Companies tried to open a Jack Spade store in the Mission District.

Those two controversial provisions in the Planning Department proposal aren’t in rival legislation by Sup. Eric Mar, who has long been a champion of expanding controls on chain stores. Both the Mar and Planning Department legislation will go before the Planning Commission on July 17, and they could be either merged or move forward as rival proposals.

“We’re hoping this legislation moves forward as quickly as we can,” Mar told us. “We’re losing neighborhood character in many areas.”

 

WEAK LINKS

For all the indignant opposition to the Planning Department proposal expressed at the June 9 Small Business Commission meeting, where mayoral appointees led that body’s 4-2 vote approving the measure, the planners who developed it say they’re actually trying to expand the controls on chain stores.

Senior Policy Advisor AnMarie Rodgers and Project Manager Kanishka Burns sat down with the Guardian to go through details of the proposal and a May study it was based on, “San Francisco Formula Retail Economic Analysis,” by Strategic Economics, as well as an earlier study by the Controller’s Office.

“Our department is super committed to encouraging the diversity of neighborhood commercial districts,” Rodgers told us, acknowledging that small businesses often need protection from deep-pocketed corporations that can pay higher rents and enjoy other competitive advantages over mom-and-pop stores.

Rodgers cited studies showing that local small businesses circulate more of their revenues in the city than big chains, boosting the local economy. That’s one reason why the Planning Department proposal expands formula retail controls to include the categories business and professional services (including Kinko’s and H&R Block), limited financial services (including street front ATMs and small banking outlets), and fringe financial (such as check-cashing and payday loan outlets).

The new controls would also count a company’s outlets in other countries and locations that have been leased but not yet opened, it would expand some of the neighborhoods subject to formula retail controls, and it would require formula retail businesses to minimize their signage on the street, improve their pedestrian access, and fund more detailed analysis on their impacts on the local economy. Big box stores, in particular, would be required to submit to even more detailed economic impact studies.

Many of these same provisions are included in the Mar legislation, which also goes further in including gyms, gas stations, smoke shops, strip clubs, massage establishments, and various automotive businesses under the formula retail controls. Like the Planning Department measure, Mar’s also requires more data for formula retail applicants.

“We want to make chains fund economic impact statements before they go into the neighborhoods,” Mar said, noting how those studies will allow city officials to make better decisions about whether to approve formula retail applications.

Stacy Mitchell is the senior researcher for the Institute for Local Self-Reliance, an organization that has been working with San Francisco on its formula retail controls since their inception. She applauds the city’s current efforts to create more comprehensive guidelines and to require more economic analysis.

“San Francisco doesn’t have a good mechanism for fully evaluating the economic impact of these proposals,” Mitchell told us, calling the Planning Department and Mar efforts “a really good place to start the conversation.”

But Mitchell said that she doesn’t want to weigh in on what specific number of outlets may be right, saying city officials just need to decide, “What is the right balance and mix and how do we want to handle it?”

Rodgers told us the Planning Department legislation will expand the number of businesses that fall under formula retail controls, even as the threshold is raised to 20 outlets, although she couldn’t quantify exactly how much.

But critics are focusing on aspects of the proposal that loosen current restrictions, noting how that cuts against the trend in recent years of supervisors seeking to tighten restrictions in their districts, creating a hodgepodge of legislation that the Planning Department was trying to overcome with comprehensive new legislation.

 

WHAT’S A CHAIN?

The Planning Department’s new threshold and the arguments being made to support it rely heavily on making the case that three specific homegrown companies should be excluded from formula retail protections: Philz Coffee (with 14 stores), Lee’s Deli (13 outlets), and San Francisco Soup Company (16 locations).

“Right now, we would treat Philz the same way we treat Starbucks,” Burns said, noting that Starbucks has more than 20,000 outlets.

“Can’t you cut a break to the businesses that started here?” was a question that Rodgers says helped shape development on the regulations. The Strategic study found that about 5 percent of the retail establishments in the city had 11 to 20 outlets, while another 4 percent had 21-50 outlets. “We’re just trying to find the sweet spot.”

Yet Peskin said the change doesn’t make sense, and it’s just a way to give special treatment to a handful of local companies with political connections, and which have more resources to go through the conditional use process than a true small business.

“They’re basically finding another way to satisfy San Francisco Soup Company, a stalwart member of the Chamber of Commerce,” Peskin said.

Asked how she can seemingly circumvent the will of the voters, Rodgers told us, “It was a voter initiative, but it says the Planning Commission will establish further details.” In fact, Prop. G simply relies on the formula retail definitions that had already been adopted by ordinance started with a measure by then-President Matt Gonzalez in 2004.

But Peskin said the proposal to increase the threshold to 20 is an affront to popular local controls on chain stores, one that has little chance of becoming law.

“I don’t think the Board of Supervisors is crazy enough to go and undo one of the most successful pieces of legislation from the early part of this century. And if they do, then the voters won’t stand for it,” Peskin said, pledging to personally work on the campaign to protect existing formula retail controls.

Mar also said he will defend the current threshold. “The 11 that was written into the legislation was the result of a compromise,” Mar said, noting that Gonzalez initially placed the threshold at four stores and compromised with the business community on 11. “We’re going to do our best to work with our coalition to hold it to 11.”

 

CORPORATE CONTROL

Mar was also critical of the Planning Department proposal for not looking at corporate ownership of subsidiaries, something that his legislation does, stating that companies with a 50 percent or more ownership stake in an outlet get included in the formula retail designation.

“Our proposal has been attacked by people who think we’re over-regulating and those who think we’re under-regulating,” Rodgers told us.

Yet as the June 9 Small Business Commission hearing made clear, supporters of the proposal predictably came from the same business groups that have opposed formula retail controls from the very beginning: San Francisco Chamber of Commerce, San Francisco Association of Realtors, and San Francisco Building Owners and Managers Association.

Representatives from each of those three groups were the only people who spoke in favor of the proposal, each of them declaring it a “balanced” and “data-driven” compromise that they support, even as they argued for loosening the restrictions even more. But the vast majority of speakers were neighborhood activists critical of the proposal.

“Going from 11 to 20 makes no sense at all. Who picked out this number?” Susan Landry, owner of Animal Connection in the Marina District, told the commission. “Please have a conscience and vote for independent businesses.”

But Small Business Commissioner Kathleen Dooley said the vote was just the latest example of a commission stacked with mayoral appointees (including two bankers) doing the bidding of downtown rather than advocating for small business interests.

“Nine supervisors have tightened up the restrictions in their districts, but the Planning Department has gone the opposite way,” Dooley told us. “The irony was it all started with the protests [of chain applicants skirting local controls], but the Planning Department turned it on its head to loosen the restrictions.”

Yet the planners involved on the proposal call that a simplistic view that discounts the comprehensive nature of the new policy, which they say could serve as a model for other cities.

“I think they’ll all catch up to us,” Rodgers said of the other big US cities that have become to explore formula retail controls as local small businesses struggle against competition from chain stores. “We are a national leader on this and we want to get it right.”

Mitchell agreed: “There are lots of conversations going on around the country about how to meet this challenge, and people are watching what San Francisco does.”

Ethics complaint says chair of DCCC deliberately tried to confuse voters

NOTE: This post has been updated from an earlier version.

Right down to the wire, a complaint filed with the San Francisco Ethics Commission today [Tue/3] – election day – alleges that Democratic County Central Committee elected chair Mary Jung authorized phone calls that were meant to deliberately confuse voters on Proposition B.

The ballot measure, which would require voter approval for waterfront height limit increases, is officially backed by a committee called “No Wall on the Waterfront, Yes on B.”

But according to the Ethics Commission complaint, opponents of Prop. B falsely portrayed No Wall on the Waterfront as being against Prop. B in a bid to confuse voters.

A transcript of the call included in the complaint notes that a live caller opened the communication by saying, “I’m calling about the No Wall on the Waterfront Campaign,” without saying they were calling in opposition to that campaign, and seemingly posing as being affiliated with it. Callers also made statements such as, “Prop B is about environmental loopholes, against affordable housing,” and “No on B endorsements — the Democratic Party, Alice Toklas democratic club, labor.”

“This act by Ms. Jung was a devious and deceptive plan to trick San Francisco voters,” complainant Geraldine Crowley, formerly a DCCC member herself, charged in the filing. “While I realize she employed as a highly paid lobbyist for the San Francisco Association of Realtors – who oppose Prop. B – it crosses the line for Ms. Jung to violate the ethical codes and San Francisco law in this manner.”

We reached Jung by leaving a message on her phone line, listed on the San Francisco Association of Realtors website, next to her job title: “Director of Government and Community Relations.” (Which is really a very convenient arrangement for the real-estate crowd, when you think about it. Who better to relate to the “community” and the “government” than the chair of one of the most politically influential organizations in town, which endorses candidates for elected office?)

When she called us back, Jung confirmed, “We were calling people to vote No on Prop. B.” But what about the allegation that those calls were intentionally deceptive, falsely painting No Wall on the Waterfront as being against Prop. B? “I have not seen the complaint,” Jung told us. She added, “I don’t have a copy of the script” used by callers when they contacted voters. To get a copy of the script, she said, we would have to call political consultant Eric Jaye, who is handling communications for the opposition to Prop. B. We tried calling Jaye but couldn’t reach him.

[UPDATE: Jaye just returned our call. He said Crowley’s complaint is “frivolous” because the callers said they were calling “about” the No Wall on the Waterfront Campaign. “This was what they named their campaign,” Jaye said repeatedly. “It’s not deceptive.” But we asked him multiple times if he would provide a copy of the full call script, and he refused to do so, without offering any reason why he couldn’t.]

What’s more, according to Crowley’s complaint, is that the paid phone calls to DCCC members appear to have originated with venture capitalist Ron Conway, who made a $25,000 donation to the DCCC on May 30. A few days later, Ethics Commission filings show, Jung authorized expenditures totaling $12,281.13 for “membership communication calls.”

Jung denied having had any conversation with Conway about it, and said “the Democratic Party has done a lot of fundraising in the past three months,” and that she could not link a specific donation with a specific DCCC expenditure. She then said she had to go.

Officially, “you can’t give to the party and officially say the donation is for some purpose, but anyone who’s worked in San Francisco politics knows … it’s designed to make something happen,” said Jon Golinger, who heads up the “No Wall on the Waterfront, Yes on B” committee.

He added, “They’re literally using our name to further an agenda that is the opposite” of what the Yes on B campaign has been organizing for.

Some members of the DCCC are reportedly seeking copies of that script, since there seems to have been little awareness of what was being told to voters in the Democratic committee’s name.

But the idea that Jung herself did not know what was being said in the calls, when she authorized the expenditure for membership calls and works in the same office as Prop. B opponents, raises questions about what sort of leadership she’s actually providing.

In the meantime, here’s the Ethics Commission complaint.

Ethics Complaint Against Mary Jung by Rebecca Bowe

The ideological split of the audience was clear as day: Eminent domain supporters wore yellow shirts with a logo of the activist group Alliance of Californians for Community Empowerment, and those against wore red shirts branded “Stop Investor Greed.”

They divided the gym like bitter parties of a political bride and groom. 

Those sporting the red shirts were mostly from the real estate industry, and in public comment they generally expressed that if someone were to lose their home, well, “so what?”

Lisa Johnson, clad in red, said, “My house is an investment, not a right.” 

A representative from Richmond’s Council of Industries asked the mayor to reconsider the eminent domain plan, and to rescind the initiative. 

Jerry Feagley, whose Feagley Realtors has sold homes since 1966, said the plan risks damaging all of Richmond’s ability to get credit. He was a seemingly mild-mannered man who is exactly who you’d picture if you think of a businessman from the ‘50s, grey suit and all.  “If this would go into effect, this would change loans in the entire country,” he said, passionately. 

Well, that’s kind of the idea, the supporters countered. 

“I was at the March on Washington with Martin Luther King 50 years ago, yes, I’m that old” said one woman. She was bent over with age but spoke with volume. “That’s exactly what we have to do. We’re going to have to met power with power and challenge the status quo.”

Well over 50 supporters came to speak at the podium. The meeting started at 7pm, and stretched on well past one in the morning. If there was one central theme to their sentiments, it was this: Richmond has hit rock bottom, and now is the time to fight back.

Councilmember Butt put it in plain terms. “What we’re voting for is a giant game of chicken, and it’s clear two of my colleagues have blinked,” he said, referring to Boozé and Bates. 

“I’m not blinking,” he said.

The council voted, and amid the turmoil and arguing and anger, the Boozé and Bates measure to scuttle the eminent domain plan was scrapped.

Having already lost once that night, Bates did not fare well when time came to vote on forming a coalition of cities to battle litigation, called a joint powers authority. El Monte may be the first to join, Mayor McLaughlin said, which would help homeowners in need who are often people of color.

Bates countered that McLaughlin should look out for “her people” and not try to use “his people” as a front for her legislation. “You don’t speak for my community,” he said, referring to African Americans.

When another black council member, Jovanka Beckles, spoke up to thank her “white brothers and sisters” for joining in a fight for justice, Bates was uncompromising.

“You are not African American,” he told her. 

Boozé also had words for the other dissenting African American Councilmember Jael Myrick. “One day you’ll have to stand up and be black,” he said.

Mayor McLaughlin’s measure to form a joint power authority then passed 4-3, with council members Boozé, Bates and Rogers dissenting. 

The last remaining supporters waved their yellow flags and the dwindling crowd clad in yellow shirts left victorious, for now.