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SUPERLIST NO. 813: Bling it on

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Grills, plates, slugs, pullouts — whatever you want to call them — the gold tooth phenomenon, once a staple of hip-hop culture, has now become fashionable among indie rockers, parents, and high schoolers of all ages and races. Though the American Dental Association has strongly advised against bringing the bling to your gum line, as long as Oscar-winning rappers are dropping $30K on their choppers, the golden craze will surely blaze on. Caps are removable, can be made of yellow or white gold, silver, or putf8um, and usually come in two settings: solid, which covers the entire tooth, or open-faced, which has a square cutout to expose the normal tooth. Most grill shops specialize in custom designs and will cater to whatever your fancy might be — whether it’s grilling your teeth into white gold vampire fangs with diamond tips or etching your dog’s name into your caps with emeralds, rubies, or sapphires. Though we can’t vouch for the quality of a gold tooth, and prices may vary depending on the griller at each of these jewelry stores, we can certainly point you in the right direction for getting your pearly whites to shine through all that Bay Area fog.

Bling Master Jewelry (3746 San Pablo Dam Rd., El Sobrante. 510-669-0457, www.blinggoldteeth.com) has just the thing for your bling. On the Web site you can check out various designs of four-cap and six-cap grills in 14-karat yellow or white gold with diamond-cut settings. Service prices range from $80 for two 14k caps to $900 for six 22k caps.

For more than seven years, EJ Jewelry (2605 International, Oakl. 510-434-0700) has set polished grills into the smiles of folks all over the Bay Area. The glass cases within this bustling shop display a selection of open-faced and diamond fronts. One yellow gold tooth will cost you $20; a white gold tooth goes for $25.

Located on a gritty SoMa corner, Gold Teeth (986 Mission, SF. 415-357-9790) offers a twinkling assortment of gold caps and bars, adding luster to the dingy posters plastering its walls. Inside, you can get your grills cast in putf8um or 14k, 16k, or 18k gold and get your favorite stone inlay for $40 and up.

Gold Tooth Master (10623 International, Oakl. 510-636-4008), in East Oakland, has posters of rappers flashing their glistening fronts covering the peach-colored walls. Two display cases flaunt an impressive collection of fangs etched with various letters and designs. A 14k gold cap starts at $20, and dental gold costs $50.

A giant set of golden incisors grafed to the storefront of JC Jewelry (1940 Broadway, Oakl. 510-763-5556) welcomes visitors as they set foot in this boutique, located just off the 19th Street BART station in the heart of downtown Oakland. Here you can buy or trade gold teeth and even get repairs done for $25. Your options for grills include a solid or open-faced cut with diamond initials or gemstones ranging from rubies to sapphires.

Koko Gold Teeth (4838 International, Oakl. 510-533-2345, www.kokogoldteeth.com) gives you the most bling for your buck. Choose from an astounding array of beautiful designs and features. If the heart-shaped caps with rubies don’t have you salivating, then the jagged 3-D bars with diamonds will have you forking over your rent money in no time.

The original Mr. Bling Bling (1836 Geary, SF. 415-928-5789, www.mrblinggoldteeth.com), which is also the sister shop of Koko Gold Teeth, is crammed into a row of shops across the street from the Fillmore. Like Koko, this pocket-size store offers customers gold and silver fronts in a variety of diamond-fanged cuts and designs. Get there early because business tends to boom once the local high school lets out for the day.

Mr. Bling Bling Jewelry (13501 San Pablo, San Pablo. 510-215-0727) specializes in making repairs to damaged caps in need of a "bling-tastic" makeover. The store will also brighten your choppers with a tooth cast in yellow or white gold for $25.

Grilling at Nomad Body Piercing (1745 Market, SF. 415-563-7771) has gotten off to a slow start, due in part to its employees still trying to perfect the gold cap craft, but you can have your mouth cut in yellow or white gold for $25. Or you can just get your tongue pierced.

Tom’s Jewelry (693 E. 14th St., San Leandro. 510-430-8087) is a hop and a skip from the San Leandro BART station. Here you can get your plates filled with 14k and 18k gold, dental gold, and putf8um, as well as with different cuts and engravings with shimmering diamonds and colored gems. *

Family business

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Frank Edward Lembi has spent nearly six decades turning San Francisco’s hot housing market into his version of the American dream, in the process creating nightmares for many struggling renters.

The aging patriarch still resides at the top of the Lembi family’s colossal accumulation of capital, Skyline Realty, also known widely as CitiApartments, the second-largest owner of rental units in San Francisco, as the company describes itself.

Skyline owns somewhere between 130 and 150 apartment buildings, hotels, and commercial properties throughout the city. Over the past few years, the company has spent tens of millions of dollars buying new properties everywhere from the Tenderloin to Russian Hill, quietly making the already controversial Skyline an even more ubiquitous force in San Francisco’s housing market.

As the Guardian has reported over the past few weeks, some Skyline tenants claim the company has developed an aggressive business strategy intended to empty newly purchased buildings of unprofitable tenants with rent control by either offering onetime buyout deals or simply frightening and coercing them until they leave.

Records from the San Francisco Department of Building Inspection also show violations of the city’s building and housing codes leading to complaints from tenants of roach and bedbug infestations and inoperable heating systems and elevators at some of the company’s properties. Such allegations have resulted in two lawsuits filed by the city and several more by tenants. Skyline also filed more eviction attempts in San Francisco Superior Court last year than any other single year during the past decade, according to a review of court records. Those cases have climbed fastest over the past four years and don’t reflect the true volume of notices to vacate that appear on tenants’ doors and are resolved before the matter appears in court.

From additional interviews and a review of publicly available records, corporate filings, and old press accounts emerges the portrait of a man, Frank Lembi, who has survived some of the darkest periods of the past few decades of American capitalism and retained his position as one of the city’s most powerful real estate moguls.

A San Francisco native, Lembi returned from serving in World War II and founded Skyline in 1947. Today he still lists the same Burlingame home address he had at least a decade ago when his longtime wife, Olga, passed away. The stark white and pea-green split-level is modest considering the wealth he’s accrued since Skyline began its ascension.

He and Olga had five children, two of whom would join Frank’s list of chief business allies. Yvonne Lembi-Detert is the president and CEO of a Skyline-affiliated company that owns a handful of posh boutique hotels. His son Walter joined the real estate business in 1969.

"I learned nepotism from my father," Frank told California Business in 1987. "He came to this country from Italy and started his children off pretty much the way I’ve started mine. It’s a way of life for us."

Frank and Walter eventually founded Continental Savings of America in 1977, a savings and loan association that propelled the family beyond the simple purchase and resale of small apartment buildings. At its peak, Continental maintained a staff of nearly 200 and more than half a billion dollars in assets. The company was making individual real estate loans of up to a million dollars by 1983.

During the ’80s and early ’90s, federal deregulation of the S&Ls encouraged a push for much more profitable, yet risky, high-interest loans and resulted in a race to the bottom. It was the era of financial scandal, and paying back federally insured depositors who had invested in failed S&Ls eventually cost taxpayers billions.

Continental began posting major losses in the ’90s as the company’s capital sank, and in 1995 the Office of Thrift Supervision (OTS) took it over, fearing insolvency. Not long beforehand, just before Continental went public, Frank stepped down as chair, owing to a conflict of interest tied to Skyline’s HomeOwners Finance Center. But Frank and Walter both remained major shareholders in the company.

It was a bad time for lenders, nonetheless, and Frank was apparently not happy. The feds had to file a restraining order against him after he allegedly threatened to plant security guards at Continental’s 250 Montgomery St. doors to "physically prevent" the confiscation of its office furniture, according to court records.

In the end, according to an OTS official we contacted, the cost to taxpayers amounted to about $22 million. But it clearly didn’t send the Lembis to the poorhouse: Since the Continental Savings collapse, Skyline Realty, along with CitiApartments, has grown to become a very lucrative focal point of the family’s enterprises.

Skyline Properties alone generated approximately $36 million in sales during the 2004 fiscal year, according to the Directory of Corporate Affiliations. But the company has founded more than 100 corporations and limited liability companies, each owning individual Skyline properties, and making it difficult to ascertain Skyline’s real annual revenue.

Its business model is not uncommon, but the complex web of affiliates has enabled the company to keep some legal liabilities aimed away from Skyline and Lembi and make sizable political contributions to various candidates and causes — nearly $40,000 since 1999 — all of it in small amounts stemming from several different entities. In one case, Skyline’s affiliates donated $20,000 on a single day to help defeat a 2002 ballot initiative designed to increase utility rates and improve the Hetch Hetchy water system.

The company has declined to answer further questions for this series, but Skyline manager David Raynal stated in response to a list of e-mail questions in early March that the company’s "plan is to restore apartment buildings to the highest standard." He wrote that Skyline supports the creation of special assessment districts that benefit those neighborhoods. "Every year we renovate many apartments, upgrade common areas, and improve neighborhoods."

Since we began publishing stories on Skyline, former employees have contacted us with tales about how the company conducts business. A onetime Skyline employee who requested anonymity said she was well aware of the company’s buyout offers to rent-controlled tenants and added that the company was "pretty heavy-handed." She also said she was encouraged to enter tenants’ units without prior notice.

"We were told we were making the community better, but we knew that was a bunch of bullshit," she said.

She added that Skyline had trouble retaining employees. High turnover rates are hardly uncommon in the real estate industry, but another former employee who also asked that his name not be revealed said Skyline’s group of hotels had similar issues.

"[Frank Lembi] is not the friendliest man in the world," he said. "Salespeople would get frustrated and move on."

Dean Preston, an attorney for the Tenderloin Housing Clinic, said he’s assisted at least 100 Skyline tenants with legal advice over the last five years.

"I deal with tenants, as well as landlords, all across the city," Preston said. "In my opinion, CitiApartments is the most abusive landlord that I deal with in my practice." *

Trannyshack east

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Apparently all drag queens work for tips.

Last year, a gay club owner in Manhattan wanted to copy the aberrant-behavior-fest known as Trannyshack, unaware that its San Francisco founder, Heklina, owns legal rights to the name. Upon finding out — he paid her for it. Now, on late Sunday nights in Chelsea, New York City’s gay tourist ghetto, something akin to Trannyshack®-Lite transpires between Desperate Housewives and shirtless dancing. The talent is tamer and better rehearsed, the audience more jaded, and the venue a thumping 10,000-square-foot disco cavern called Splash Bar New York.

Imagine your favorite public access TV show has gotten picked up and retooled for Bravo: That’s how the legendary Tuesday night at the Stud translates at Splash. Unlike similar versions in Los Angeles, Reno, and (come April) London, which are Heklina’s own offspring, Trannyshack New York is the bastard spawn she rarely visits.

On a recent Sunday night, hostess Sweetie strolled out at 12:45 a.m. and warned the crowd, "I’m running on fumes!" Moments ago, meaty go-go dancers had yanked up their thongs and scurried away, and small, metal tables with candles had been rolled out for the show. Sweetie, a nightlife veteran who paints her face "for the back row," introduced Miss Bianca Leigh, "the Donna Mills of the drag set." (Leigh has a bit part in the transgender-themed road trip flick Transamerica.) The would-be Knots Landing understudy has the slender figure, sculpted cleavage, and sweet smile of a suburban trophy wife. Her gown plunging deep, her long, blown-out reddish hair swaying just this side of Farrah Fawcett, she performed a sultry version of "Sisters" — drag legend Joey Arias’s signature at the old Bar d’O, before he stopped channeling Billie Holiday there for a living and moved to Vegas.

"We’re going to send these bitches packing!" Sweetie barked before the next act, with the viciousness of a reality show judge. Like much of life in New York, Trannyshack here is a cynical competition with no real prize. Sweetie, we learned, had been cast as a hooker named Olestra in RuPaul’s new movie, a hush-hush transploitation flick, and she’d woken up early to do a shoot with various porn stars and dragsters. "I’ve been working this face since eight a.m.," she announced, but her day-old mug looked flawless.

And then Miss Debbie Taunt was bounding across the stage like a Saint Bernard in hose and heels, gyrating to a diva medley. Behind her the floor-to-ceiling mirrors featured working shower heads for the naked strippers who usually earn their rent there. Miss Taunt’s short black overcoat concealed neither her barrel-shaped torso nor her large white panties, out of which poked two hamlike thighs. Sweetie praised the "shameless, shameless bitch" for her gratuitous crotch shot and then set the stakes: "These girls are competing for a $50,000 Jeep Cherokee full of Latino hustlers picked up at the Port Authority!"

Mother Flawless Sabrina, a stately figure and contemporary of Andy Warhol, performed next, tottering under a large wig that looked like a vanilla ice cream tsunami wave with chocolate swirls. With her taut pale skin, she could have been Warhol himself in a gold-beaded flapper dress and black eyeliner. Using a prop telephone, she phoned her deceased pop artist friend to tell him about cell phones, Internet sex, and the fact that speed is back.

Appropriately enough, a statuesque queen named Miss Tina performed last, neck-rolling, convulsing, and shaking her buxom booty to ’70s funk. Composed of thigh-high boots and a hooded, backless, shredded outfit assembled with safety pins, her look said "Flashdance burqa meets sexy new wave pirate."

The most choreographed and leggy of the bunch, Tina was the clear crowd-pleaser — but as diehard Trannyshack fans know, the winner never wins. With Tina doomed, Sweetie, whose low-battery light was by that time blinking, pitted Flawless Sabrina against Bianca in a scavenger-hunt tiebreaker. Among the 16 items: an out-of-state driver’s license, lip balm, a cock ring, a straight female, a condom, breath strips, one white athletic sock, a six-foot-tall man and poppers. Before the girls could hit the floor, a drunken crowd rushed the items to the stage. And the winner was … Miss Bianca Leigh!

San Francisco phenoms rarely translate well in New York (long live the Cockettes!), and Splash isn’t serving Trannyshack à la Heklina. But Sweetie’s show is tasty too — even if it is lite. *

Paul Freibott writes about New York and San Francisco and will travel anywhere for a good drag show.

TRIP PLANNER

When to go Trannyshack NYC celebrates its first birthday March 5. Avoid the cover by signing up on the Web site before 6 p.m. that night. Go early for the beer blast ($8 for 10 Buds) and go-go boys showering onstage; end the night drunk, horny, and wondering when the dancing beef slabs in G-strings morphed into singing drag queens.

Where to stay The Chelsea Lodge and Chelsea Lodge Suites (1-800-373-1116, www.chelsealodge.com) offer historic panache in a renovated brick townhouse; $99 a night and up. The gay-friendly Colonial House Inn (1-800-689-3779, www.colonialhouseinn.com) has a clothing-optional roof deck (seasonal); $104 a night and up. Rooms at the Chelsea Inn (1-800-640-6469, www.chelseainn.com) are mere slivers without private baths, but it’s right next door to Splash.

SPLASH BAR NEW YORK

50 West 17th St., New York

(212) 691-0073

www.splashbar.com

Enforcing a hidden anti-eviction law

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As the Board of Supervisors was in the process of approving a measure to require a public hearing before converting rental units into condominiums – a measure Mayor Gavin Newsom has shamefully pledged to veto – Sup. Chris Daly told his progressive colleagues they shouldn’t be cowed by accusations that they are against home-ownership opportunities.

He’s exactly right. The city’s building new condos at a rapid clip, with more than 9,000 for-sale units in the pipeline right now, while rental units are disappearing. It’s more fair to accuse Newsom and his allies of being hostile to renters than to somehow say progressives oppose home ownership.

In fact, as Daly pointed out Jan. 10, the city isn’t even using existing tools to help tenants.

Six months ago, the San Francisco Tenants Union and Sup. Aaron Peskin unearthed a 25-year-old city law that could prevent many future condo conversions. Section 1386 of the city’s subdivision code, approved in 1981, requires city planners to reject condo conversions in which evictions or steep rent hikes have been used to clear the building for sale.

The law is a bit outdated – it requires landlords to provide only a five-year history of building occupancy. The supervisors should amend it to allow city officials to consider how a building was cleared out of tenants, whenever that occurred, and if Newsom wants to be seen as anything more than a fan of evictions and a shill for speculators, he should direct planning officials to start aggressively enforcing the law’s provisions.

That’s just one step the supervisors can take to deal with a mayor who seems unwilling to take even modest steps to slow the flood of evictions and the loss of rental housing. Newsom insists smaller condo conversions – ones involving fewer than five units – shouldn’t even be subject to Planning Commission hearings because that august body needs to save its time and energy for larger land-use issues.

So tenant activists and Peskin are pursuing with the City Attorney’s Office the possibility of requiring public notice for all condo conversions, of any size, which would give tenant activists the ability to appeal those permits to the full Board of Supervisors. It’s a good idea: If the poor, overworked planners are too busy to protect rental housing, and the supervisors want to take on the job, it will be hard for Newsom to say no.

Does Mills make sense?

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It wasn’t supposed to go like this.

 When Virginia-based mall developer Mills Corp. used political pressure by then-mayor Willie Brown and a partnership with the YMCA to narrowly win Port of San Francisco approval, in 2001, for the exclusive right to build a shopping center and office park at Piers 27-31, the project was supposed to slide right through.

 The Board of Supervisors was effectively cut out. All that elected body – which includes some supervisors who have been critical of the Mills project – could really do was tinker with the environmental impact report, or maybe just refuse to certify it and risk getting sued.

 But that was before a little-noticed change in a fairly noncontroversial ordinance put the board in the driver’s seat.

 Now a clearly concerned Mills Corp. has launched an aggressive lobbying and public relations campaign – including a series of full-page newspaper ads – urging the public to convince the board to certify that the project makes long-term financial sense when supervisors consider the matter next month. Otherwise, the project could be dead even before its EIR is complete, setting up the port to chose another developer when the Mills contract expires next year.

 Board president Aaron Peskin won approval last year for his Fiscal Responsibility and Feasibility Ordinance. "The whole notion of the ordinance is before you go headlong into these projects, let’s make sure the city has the resources to maintain it over time," Peskin told the Bay Guardian, noting how many projects in the city get built without solid plans for the long-term operating funds needed to maintain them.

 The ordinance covers projects that get over $1 million in public funds and other taxpayer-backed subsidies, and in July of this year, with the Mills project in mind, the board modified the measure to include in its definition of public funds the lucrative rent credits Mills is getting.

 "I think [Mills executives] are scared. They didn’t expect the board to be able to weigh in on this before the end," said Jon Golinger, who is leading the opposition to the project. "The board now gets to assess whether we can trust this company to do what they say they’re going to do."

 And trust seems to be a key issue in this case. Under state law and Prop. H, in which San Francisco voters required a recreation plan for the northern waterfront, Piers 27-31 are supposed to be geared toward offering recreational amenities to San Franciscans. Mills and port officials say the project’s YMCA and the "recreational retail" focus of its shops will meet that requirement.

 Critics in Golinger’s group say the project is little more than a glorified mall using the recreation label to pass legal muster, an accusation that Mills Corp.’s 2003 annual report does little to contest, calling the project "an attractive entertainment, dining, shopping and office center" and never once using the word "recreation" (a word added to the label in its 2004 report).

 An otherwise breathlessly laudatory economic study commissioned by the developers and released in July also indirectly raises the question of whether the 164,700 square feet of office space in the project will generate enough cash to pay for all the developer’s promises. Based on statements made by Mills executives, the report notes, "the project is unlikely to be built unless it can achieve minimum net rents of $35 per square foot which represents a major premium over current rents, that few if any existing tenants would be able or willing to pay."

 San Francisco has one of the highest office vacancy rates in the country, and rents average well below what these developers expect to receive. But Mills spokesman Dave D’Onofrio said the offices will be unlike any in the city, and "the market is clearly there" to support such high rents.

 In addition to these areas, Peskin said the board will consider Mills Corp.’s deal with the YMCA, which will be required to pay back the $30 million in capital costs fronted by the developer, on top of the ongoing operating costs needed to maintain this project as a recreational facility open to all.

 "They’re going to have to show how they’re going to fund the Y," Peskin said. He and others have noted that none of the financial documents released by the developer shed much light on that arrangement or other financial details of the project, although the port is currently preparing another financial document set for release to the board Sept. 28.

 Neither port nor YMCA officials returned our calls for comment, but D’Onofrio noted that the YMCA will pay just $1 per year in rent and that he is "utterly confident that the Y will be successful."

 Mills officials have publicly blamed opposition on businesses on Pier 39 and Fisherman’s Wharf, who fear competition from the project. "But there’s no validity to that argument," said Chris Martin, whose family has owned The Cannery and has been involved in northern waterfront planning issues for more than 30 years. He said the northern waterfront is already a congested mess on weekends, and an intensive project like this will make things much worse.

 In response to our inquiries, Mills project manager John Spratley issued a written statement saying in part, "The Board of Supervisors will find that The Piers is financially strong and a tremendous economic benefit for San Francisco and the Port."

 Peskin said he has an open mind about the project but said it is incumbent upon the developers to provide more information showing how the open space, recreational amenities, and other public access aspects to this project will be maintained over the long run: "To them, I say that if your project is so great then it will be great in the future."

 E-mail Steven T. Jones at steve@sfbg.com.

Of Lenin and latecomers

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Lenin for lawyers

The 50-year-old San Francisco chapter of the National Lawyers Guild has long worked with local politicians to formulate legislation on issues from South Africa sanctions to rent control, but has always stopped short of endorsing candidates. Two recent events — the Jesse Jackson presidential campaign and Supervisor Harry Britt’s run for Congress — have prompted some members to suggest a policy change. The group’s latest newsletter includes a fascinating pro-and-con debate.

Doris Walker argues against endorsements, pointing to Britt’s divergence with the Guild over support for the PLO. But the choicest bit of writing is contained in a pro-endorsement argument by Thomas Steel, Nancy Clarence and Brian McAffrey: “A live and vibrant organization dealing with issues that matter will have disagreements. If we’re dead or irrelevant, we can avoid disagreement….

The idea that participation in electoral politics would “compromise’ a leftist organization was rejected by no less than Lenin himself 70 years ago. Indeed, he characterized this perspective as “an infantile disorder’ in his famous polemic, Left Wing Communism — An Infantile Disorder….

Lenin [said]: “While you lack the strength to do away with the bourgeois parliments and every other type of reactionary institution, you must work within them because it is there you will still find workers who are duped….

Otherwise you risk turning into windbags.’

“For lawyers, the risk of turning into “nothing but windbags’ is something of an occupational hazard, while infantile disorders are not exactly unprecedented. We should avoid these mistakes and take part in legislative and electoral reforms along with the communities in which we live.”

The Guild will hold a membership meeting to vote on the issue September 16th. Info.: 285-5066.

Mayoral alternatives

In San Francisco, politics has always been too important to leave to the politicians. So it comes as no surprise that a popular local comedian and a flamboyant newspaper columnist have joined nightclub owner Cesar Ascarrunz in the ranks of contenders who hope to start their political careers at the top. Examiner columnist Warren Hinckle symbolically swept the steps of City Hall Friday and submitted a letter of intent to the registrar of voters signifying his official entry into the mayor’s race. Hinckle has impeccable credentials as a Party Loyalist, but based on his record as a magazine editor, we’d hesitate to let him near the city treasury.

Political satirist Will “Vote for me or don’t” Durst, claiming he is “as incapable of doing the job as any other candidate,” has also filed a letter of intent and plans a rousing campaign kick-off at a Julia Morgan Theatre show in Berkeley Aug. 23rd. Durst told the Bay Guardian he is serious about the candidacy and hopes to “pimp the process” to show people the other candidates never say anything of substance. But he added he doesn’t expect to win and is proceeding “with tongue firmly planted in cheek.” Durst says his campaign proposals include turning Broadway, with its boarded-up sex clubs, into a city-subsidized entertainment district and returning Fisherman’s Wharf to those who fish. Was that supposed to be funny? For more information on Durst’s campaign opener, call the Julia Morgan Theatre at 548-2687.

AIDS quilt

NAMES Project organizers have proclaimed Aug. 17th-24th Aid Quilt Week, and are asking people to form quilting bees to make panels bearing the name of someone lost to AIDS. The 3-by-6 foot panels will be sewn into a massive memorial quilt to be displayed at the Capital Mall in Washington, D.C. Oct. 11th, in conjunction with the National March on Washington for Lesbian and Gay Rights. Completed panels must be sent before Sept. 15th to NAMES Project, PO Box 14573, SF 94114. Info.: 626-5725.

SFRG grows

After eight years of battling Manhattanization on its own, San Franciscans for Reasonable Growth has decided to offer public membership. The nonprofit, 13-member citizens board, a major force in the Prop M victory last fall and a successful defender of the measure in court, plans a public outreach campaign on such upcoming issues as Mission Bay, the 101 corridor and regional transit development. A $25 annual basic fee ($100 supporting membership) will entitle members to a quarterly report analyzing urban environmental issues. President Alan Raznick told the Bay Guardian, “New members should provide a solid base for us to disseminate information. We’re building on our past strengths.” For information, contact Alan Raznick or Esther Marks at 870 Market, Room 1119, SF 94102, or call 392-6760.

Short takes:

Sunday/2ndAttendance at the July 12th screening of Iran/Contra: The Story Behind the Scandal, the Christic Institute video about a secret team in the intelligence community and its operations from Cuba to Vietnam to Nicaragua, was so great the Democratic Socialists of America scheduled additional screenings that will also include a second video in which Christic’s lead attorney, Daniel Sheehan, analyzes recent related developments in Washington. 4:30 pm, Noe Valley Ministry, 1021 Sanchez, SF. $2 Info.: 552-1250….

Tuesday/4th — Katya Komisaruk, who damaged a computer at Vandenberg Air Force Base to protest weapons testing, will speak at a War Resisters League/West potluck that will include a discussion of demonstration tactics. 7:00 pm, 942 Market,

701, SF. 433-6676….

Wednesday/5th — Participants at a conference organized by the Center for Third World Organizing will discuss how toxic pollutants disproportionately affect minorities. 8:30 am-4:30 pm, St Paul’s Episcopal Church, Grand at Montecito, Oakl. $10-$15. Info.: 654-9601.

SF’s economic future

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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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