Small Business

The rate hike hurts the economy

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EDITORIAL Pacific Gas and Electric Co.’s latest rate increase simply ratifies what’s been going on for many years: the private electric utility screws residential users and small businesses. If the California Public Utilities Commission goes along with the new rate plan, renters and homeowners will see their power bills go up more than 4 percent; small merchants will face a hike of nearly 7 percent. Meanwhile, rates for some of the biggest users will actually fall, by as much as 3.7 percent.

That’s pretty shoddy environmental policy. For years activists have argued that the biggest users should pay higher rates, since that would give them the strongest incentive to conserve. Cutting rates for, say, big companies that leave their lights on all night or manufacturers that refuse to invest in the latest conservation technology will only lead to more waste — and thus to more energy use and more global warming.

But it’s also bad economic policy. High utility rates hit hardest among those least able to afford them — and just as tax increases on the poor and small businesses disproportionately harm the economy, this rate hike will have lasting damage that goes beyond individual users.

Since San Francisco has a mild climate and a lot of residents and small businesses already work hard to conserve power, the rate hike may not seem catastrophic: if your monthly electric bill is $50, the additional charge will be just $2. But when that’s multiplied by more than 300,000 San Francisco households (and close to one million in Northern California), we’re talking significant money.

As we’ve demonstrated (see "The $620 Million Shakedown," 9/4/02), high PG&E rates suck hundreds of millions of dollars a year out of San Francisco and many times that out of Northern California. This rate hike will bounce that number even higher. And remember: San Francisco is the only city in the United States with a legal mandate, through the Raker Act, to establish a public power system.

And that ought to spark a new organized effort to bring public power to the city.

The city is already moving forward on Community Choice Aggregation, which will translate into lower rates — but will leave PG&E controlling the local grid. It’s a good first step, but the second step — a full takeover of the grid and a city-run power agency — needs to be on the agenda as an action item. It’s not clear how best to proceed, but there are great ideas out there. Sups. Tom Ammiano and Chris Daly, for example, have talked about requiring contractors to allow the city to lay electric cables whenever the streets are torn up, which would allow public power to proceed one neighborhood at a time.

But the economic impact of this rate hike ought to be enough evidence of the need to get rid of PG&E that organizers can start putting together concrete plans for the future.

PS If city hall proposed a 7 percent tax hike for small businesses, most would be screaming bloody murder and complaining about the larger economic impact. But the small-business community has never been actively involved in public power efforts. The rate hike is in effect a tax on those least able to pay, and small-business leaders ought to join the public power fight.

PPS The city, especially the Small Business Commission, needs to be fighting this late hike. And the commission should designate an ombudsperson to compile complaints about PG&E.

The Chronicle applies their “be fair to PG&E” news principle to a major study on the beneficial impact of small business in San Francisco

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By Bruce B. Brugmann

Last Thursday May 23, as I was preparing my introductory remarks for our third annual small business awards ceremony at Anchor Steam Brewery, I found a timely article buried in that day’s business page of the San Francisco Chronicle that helped illustrate what I call the Chronicle’s “Be Fair to PG&E” news principle.

The article Local merchants reinvest in city, I pointed out, reported on a major $l5,000 study that was specially commissioned by the San Francisco Locally Owned Merchants Alliance and provided valuable ammunition to independents in their endless battle with the chain stores. The group made the study available exclusively to the Chronicle in hopes that the paper would do a major story, play it up, and give the small business community a much needed boost to a large number of readers.

Instead, I noted, the Chronicle, owned by the Hearst chain out of New York and a champion of big business and big development and big chains, gave the story its patented “let’s be fair to PG@E” approach or in this case “let’s be fair to the chains.” The Chronicle buried the story in its prime burial spot at the bottom of the right hand page of the business section where it buries stories it doesn’t like: for example, the Reilly story on his settlement with the Hearst and Singleton chains, which we called a Reilly victory (see Guardian coverage and other blogs.)
I held up the page and noted that AMD and the Gap and IBM all got the big heads above the fold.
And the small business story got the “let’s be fair to PG&E approach” with a much smaller head below the fold, “Local merchants reinvest in city, their study says.” Then, right there in the subhead was the clinker right out of the PG&E/big chain playbook that read, “Retail federation spokesman skeptical of survey’s claims,” buttressed further down in the story with some nice counter quotes, and a telling phrase that, gosh, golly, gee, those tricky merchants out there in the neighborhoods “acknowledged they see the study as a competitive weapon.” Wow! Pow! Wow!

Let’s be fair to PG&E, says the Chronicle, and applies its news principle to a study on the value of small business over chains in San Francisco

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By Bruce B. Brugmann

Last Thursday May 23, as I was preparing my introductory remarks for our third annual small business awards ceremony at Anchor Steam Brewery, I found a timely article buried in that day’s business page of the San Francisco Chronicle that helped illustrate what I call the Chronicle’s “Let’s be fair to PG&E” news principle.

The article, I pointed out, reported on a major $l5,000 study that was specially commissioned by the San Francisco Locally Owned Merchants Alliance and provided valuable ammunition to independents in their endless battle with the chain stores. The study was made available exclusively to the Chronicle in hopes that the paper would do a major story, play it up, and give the small business community a much needed boost to a large number of readers.
It was timed for Small Business Week San Francisco 2007 (May 5-12), but the Chronicle was more interested in putting out a special ad supplement with no mention of the study, stuffed with deadly proclamations and boilerplate. Significantly, there were virtually no ads from small business. The rates were too high and the format too boring.

Instead, I noted, the Chronicle, owned by the Hearst chain out of New York and a champion of big business and big development and big chains, gave the story its patented “Let’s be fair to PG&E” approach or in this case “Let’s be fair to the chains.” The Chronicle buried the story in its prime burial plot at the bottom of the right hand page of the business section where it buries stories it doesn’t like: for example, the Reilly story on his settlement with the Hearst and Singleton chains, which we called a Reilly victory because he forced the chains to compete (see Guardian coverage and other blogs.)

Small Business Awards: Previous Winners

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PREVIOUS SMALL BUSINESS AWARD WINNERS

2006


1906 Earthquake Survivor

ANCHOR BREWING CO.

Chain Alternative

BROWNIE’S HARDWARE

Arthur Jackson Diversity in Business Award

FABRIC8

Small Business Activist

COMET SKATEBOARDS

Community Activist

BAY AREA FAIR TRADE COALITION

Creative Manufacturer

FAT DOG’S WORLD FAMOUS SUBWAY GUITARS

2005


Neighborhood Activism

NORTH BEACH MERCHANTS ASSOCIATION

SUP. AARON PESKIN, DISTRICT 3

TELEGRAPH HILL DWELLERS

Small Business Activist

PHILIP DE ANDRADE

Best New Business

MADRONE LOUNGE

Best Co-op

OTHER AVENUES

Best Chain-Store Alternative

FLOORCRAFT

Golden Survivor

SUPERIOR TRADING CO.

Unsung Hero

VERITABLE VEGETABLE

Community Service

ARTHUR JACKSON, 1948-2006

List compiled by Adam Brody and Angela J. Bass.

Small Business Awards 2007: A salute to small business

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The Brugmann family has been continuously in small business for 105 years. My grandfather, the eighth child of German immigrants who homesteaded in the Midwest’s high prairie grass, came to Rock Rapids, Iowa, in 1902 to start a drugstore.

He and my father after him spent their entire working lives in that store, known throughout the territory as "Brugmann’s Drugs, where drugs and gold are fairly sold, since 1902." I started at 12 selling stamps and peanuts and worked my way up to trimming wallpaper and waiting on trade. I also moonlighted as a writer for the Lyon County Reporter, an excellent hometown weekly under third-generation publisher Paul Smith.

My father would call on every new merchant and pass along his philosophy of how to make it in business in a small town such as Rock Rapids (population: 2,800). His message: play golf, go to church, do all your trading in Rock Rapids, and above all support the town and its community activities.

This philosophy always worked well for the Brugmanns, and ours was the only store on Main Street to make it through the depression.

When Jean Dibble and I founded the Guardian in 1966, we tried to operate with the hometown values of the Brugmanns in Rock Rapids, adding some San Francisco flair and later some Potrero Hill flair. We were delighted to find that San Francisco was a city with lively neighborhoods rich in small, locally owned businesses backed by merchant and residential associations and feisty neighborhood newspapers. From the start, the Guardian was a stand-alone independent newspaper that was of, by, and for small business. We still are.

And so when the Guardian moved to its new offices at the bottom of Potrero Hill, we were happy to join the Potrero Hill Merchants Association, meeting every month at Phil de Andrade’s Goat Hill Pizza. We pitched in on projects, from supporting the Neighborhood House and Potrero Hill History Night to instituting a real planning process to save the neighborhood. We also joined the endless battles to protect the hill and the southeastern neighborhoods from the Pacific and Gas Electric Co. and Mirant power plants and the encroaching Mission Bay complex and invasion of high-priced commercial and residential condos.

We like to say that the big downtown and chain businesses look upon San Francisco as a place from which to extract as much money as quickly as possible, much the way the strip miners saw the Sierra, whereas small, locally owned businesses see the city as a place to invest in human capital to build real community.

Jean and I and our staff are happy to salute the quiet heroes of small business with our third annual Small Business Awards. We congratulate the winners and all the small-business people in San Francisco who struggle daily against high taxes and daunting odds to keep their businesses going, their neighborhoods vibrant, and San Francisco an incomparably great city. *

The 2007 Small Business Awards

Die-Hard Independent Award
Clif Bar Co.

Golden Survivor Award
Hoogasian Flowers

Community Institution Award
Modern Times Bookstore

Solar-Powered Business Award
Oceanworks

Community Activist Award
Pet Camp

Chain Store Alternative Award
Waldeck’s Office Supplies

Cooperative Award
Woodshanti Cooperative

Previous winners

Small Business Awards 2007: Cooperative Award

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Down near the dead end of Palou Avenue, beside the old Hunters Point Shipyard, whose claim to infamy is being the city’s sole Superfund site still rife with toxic waste and radioactive material, there’s a woodworking shop that goes against the grain.

Woodshanti, a worker-owned cooperative of custom-furniture builders, strives to be as peaceful as its Hindi-inspired name suggests – "not a negative but a positive part of the ecology," cofounder Shawn Berry says. He and Tom Clossey took over the shop in 1997, when it was still run-of-the-sawmill, and transformed it into an expression of their core values: responsibility, trust, and fun. That last one is underscored by the Ping-Pong table in the break room and a print from Where the Wild Things Are hanging behind Berry’s desk.

As members of a cooperative, Berry, Clossey, and their four co-owners – Todd Rowan, Laura King, Dave Dupuis, and Zac Rose – are directly vested in the business, divide profits based on hours worked, and carry equal amounts of responsibility. Becoming an owner requires at least a three-year commitment and an ability to mesh with the group culture.

Environmentalism and sustainability are the key values of this business, making it a rarity in an industry that depends on cutting down trees. Unlike most wood shops, Woodshanti has a thumbs-up from the Forest Stewardship Council (FSC), a certification in the building trade similar to organic certification in the world of agriculture. Requirements are strict, and the shop is regularly inspected to ensure that the entire chain of custody – from the forest to the sawmill to the lumberyard – adheres to specific standards regarding how and where the trees are sawed. Wood must be responsibly harvested or "rediscovered," meaning it’s salvaged from windfalls, forest fires, or construction sites.

"We wound up doing it because there wasn’t a lot of credibility when we just asked lumberyards if the wood was responsibly harvested," Berry says. Though he believes that the field needs more improvements and the FSC certification isn’t perfect, it’s still above and beyond the conventional foresting industry, as there aren’t any restrictions on clear-cutting, mono-cropping, and using pesticides on privately owned land.

Health is also a part of the wealth of the work and workers. "This is by far the best-smelling finishing room you’ll ever be in," Berry says of the partitioned-off area where tables, bookcases, cabinets, and chairs await their departure. "This is what really sets us apart."

Most woodworkers use a petrochemical base for their finish, a fluid that dries into a slick, impermeable coat and feels more like plastic than wood. Woodshanti uses a linseed-oil-based blend of natural turpentine, rubbed into the wood by hand and designed to penetrate and protect in the way that moisturizer does dry skin. These finishes deepen, rather than stain, the arboreal hues and require additional applications over time. "We’re really up front with the customers," Berry says of the process. "If you’re not into it, there’s a shop around the corner that will do the standard finish."

They’re also forthcoming about their prices. As with most custom work, their products aren’t for the lighter purse. A basic furniture piece clocks in around $2,000; a kitchen on the cheap runs $30,000 and as much as $60,000 for more challenging joinery or costlier wood.

"Our clientele is more or less wealthy," Berry concedes. The co-op’s monetary success, in turn, allows for occasional generous donations of custom furniture to worthy causes and helps the co-op promote and foster its ideals for community outreach through such outlets as the Urban Alliance for Sustainability, an organization founded by Berry that is a clearinghouse of information for the sustainability-driven citizen and raises awareness of locally made goods and services. "What’s important is not to be individually self-sustaining," Berry says, "but to be part of a community that is." (Amanda Witherell)

WOODSHANTI COOPERATIVE

909 Palou, SF

(415) 822-8100

www.woodshanti.com

Small Business Awards 2007: Chain Store Alternative Award

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Since it opened in 1954, Waldeck’s Office Supplies in downtown San Francisco has been a true neighborhood store. In spite of the growth of now-ubiquitous large chains such as Staples and OfficeMax, this family-run retailer has carved a niche with its host of regular local customers and businesses large and small in the neighborhood.

Of the supply shop started by his father, owner Cliff Waldeck says, "Neighborhood-serving retail businesses are why people live, work, and visit specific communities." For him, seeing regulars come in is the best part. "It’s like a scene out of Cheers."

Waldeck’s also leads its industry in being environmentally conscious. Two years ago it was certified as a green business by the San Francisco Department of the Environment.

As Waldeck, a former member of the Mill Valley City Council and a current member of the Bay Conservation and Development Commission, puts it, "I always like to say, ‘In my industry we’ve killed a lot of trees, and I have sap on my hands.’ "

Having done environmental work and advocacy as a public servant, Waldeck decided to make the transition to green practices. To get green certified, he had to demonstrate to inspectors from the San Francisco Public Utilities Commission and Public Health Department that he uses good environmental practices, abiding by criteria including recycling and reusing products, conserving energy and water, and maintaining a healthy office space.

The office supplies retailer also stocks green products such as recycled copy paper, greeting cards made of recycled paper, and energy-efficient items. And you can drop off your fluorescent tubes, toner cartridges, cell phones, and other electronics for free recycling.

Survival is a constant issue for a small business, particularly one downtown, where Waldeck’s competes for retail rental space alongside billion-dollar companies. Waldeck points out, "You might have formula retail legislation that helps preserve places like North Beach and Hayes Valley, but the Financial District doesn’t have that. I have five Starbucks within five blocks." With national chains creating the market rate for retail space, he adds, "it’s extremely difficult to make it just on your foot traffic of people coming in paying cash."

Believing that green practices and the success of a small business can go hand in hand, the retailer has an interesting proposition for San Francisco’s political leaders: anyone bidding on a city contract for goods or services should be required to name seven or so green-certified San Francisco entities they do business with, which would encourage huge companies to work with small, green-certified businesses. "What I’m advocating is that since the city and county of San Francisco is the largest employer and purchaser here, they can lead by example," Waldeck says. "Procurement in SF is basically a cage match now. Whoever wants to sell a product at the lowest price is the one who gets the contract."

With a stockpile of past awards, including the San Francisco Urban Solutions Neighborhood Business Award, San Francisco Small Business Network’s Green Business of the Year, and one from the Environmental Protection Agency Region Nine, Waldeck’s plans to keep up the good work. (Julie Park)

WALDECK’S OFFICE SUPPLIES

500 Washington, SF

(415) 981-3381

www.waldecks.com

Small Business Awards 2007: Community Activist Award

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When Mark Klaiman and Virginia Donohue opened Pet Camp, a kennel for cats and dogs, in 1997 in the Bayview, they wanted to do more than just make money housing pets.

"A lot of businesses drive in, do their work, and leave. They don’t actually get involved in the community," says Klaiman, who with his wife, Donohue, worked for the Environmental Protection Agency prior to becoming an entrepreneur. "We have taken a fundamentally different approach to doing business in the Bayview."

Wedged between Third Street and the Southeast Pollution Control Plant, in a large warehouse complete with a synthetic-grass outdoor play space and a doggie swimming pool, Pet Camp is a stridently green business. It uses huge low-power fans to circulate air, sends its animal droppings to an East Bay methane plant for electricity production, and gets 75 percent of its electricity from a solar-panel-lined roof.

"You get a great view of the settling ponds from our second floor," Donohue says wryly, adding that housing activists threw around the idea of redeveloping their block for new homes.

But the gaseous and chemical smell from the tanks permeates the air, and the housing advocates quickly realized the block might not make for the best living conditions.

The Pet Camp owners are glad about that. They want to stay in the Bayview and have put in countless hours working with others on community projects.

He’s the secretary of the Bayview Merchants Association, which works to ensure that the neighborhood creates and maintains a positive environment for small businesses. During the disruption caused by the construction of the new T-Third line, he helped the group push Muni to develop an ad campaign to let people know that businesses in the neighborhood were still active. They also successfully pressured Muni to speed up the project by making construction crews work weekends and holidays.

"While everyone now thinks the light-rail is going to be great, during the five years it was under construction, it really desecrated Third Street," Klaiman recalls.

The merchant association is also working with the national group Volunteers in Medicine to establish a free health care clinic for Bayview residents.

Pet Camp has a staff of about 20 and offers all employees full benefits and profit sharing. Klaiman says these and other industrial jobs are better than those offered by the tourist and service industries.

For this reason, Klaiman has worked with the Planning Department to retain industrial jobs in the Bayview. Housing activists and other neighborhood merchants have criticized him for that relationship.

According to Al Norman, president of the merchant association, he handles the flack well and takes everything in stride. "He’s levelheaded and evenhanded," Norman says.

At the same time, Klaiman is watchful of downtown developers who are working on changing the Bayview. He keeps track of their efforts through the Planning Department and the San Francisco Urban Planning Association, which has a hand in proposed plans for the area.

"They’re downtown think tank people," Klaiman says in reference to SPUR. "They’re the type of people from north of Market who say they know what is right for the Bayview."

In order to make SPUR sensitive to the needs of Bayview businesses, Pet Camp put together a bus tour for the group to familiarize it with the business community there.

"We should get together as businesses to improve our neighborhood, not just have everything go to downtown," Klaiman proclaims. "And that’s something I think we’ll actually achieve success in – getting better organized out here." (Chris Albon)

PET CAMP

525 Phelps, SF

(415) 282-0700

www.petcamp.com

Small Business Awards 2007: Solar-Powered Business Award

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Going to a mechanic can be like paying a visit to a dentist. Sometimes it feels like they’ve done more harm to your grill than good. Needless to say, it can be a chore to find a good one. Bless your stars and garters that the steady-handed masters at Berkeley’s Oceanworks, which specializes in repairing Japanese cars, are the preeminent green and reliable mechanics around.

Since the current incarnation of the shop opened in 1991, it has developed a reputation for being affordable, trustworthy, environmentally thoughtful, and, most of all, competent. Words wished for in, but not always associated with, the world of automotive repair.

When you step into owner Angus Powelson’s small office, little details reveal that his West Berkeley shop departs from the typical automotive garage. Rather than Popular Mechanics, recent issues of the New Yorker rest on the coffee table, and the good old pot of coffee has been replaced by an antique-looking Italian espresso machine. Sure there are the smells and sounds found in any other garage, but this is about as bohemian an auto shop as you’re going to find.

It’s not only the decor that makes this place so great: Oceanworks consciously does all it can to limit the damage it causes to our beautiful bay biosphere. Upgraded in 1997, the garage receives roughly 75 percent of its power from the reflective solar panels that you see soaking up the rays on the roof. In the office the key word is reuse. Envelopes, boxes, plastic bags, Ziplocs, and cardboard continually find new raisons d’etre. The small amount of paper that is not reclaimed goes into the blue bin, along with any cans and bottles, and is sent off to the recycling yard.

In the garage the story is the same. Coolants get reused and engines are built from salvaged parts. Scrap steel and aluminum are either recovered or recycled. Salvageable car parts are sorted and stored for a chance to live again. When Powelson first took over Oceanworks, the garage filled a six-cubic-yard waste can daily. Today the can is three cubic yards and rarely gets full.

It seems hard to believe, but this mechanic and his shop tread as lightly as possible. Powelson may change oil and rebuild motors for a living, but his dedication to environmentally conscious auto repair is rivaled only by his commitment to traveling by bike as much as possible and using his truck only for work-related tasks.

While the outfit specializes in foreign cars, it’s also thinking ahead. Oceanworks deals in Swift bicycles, those nifty folding Xootr bikes that are superlightweight and can be readily stored without nuisance. "Anything to get people out of their cars," Powelson says. (Chris Jasmin)

OCEANWORKS

2703 10th St., Berk.

(510) 849-1383

www.oceanworksberkeley.com

Small Business Awards 2007: Community Institution Award

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It started in 1971, with a handful of people who worked for Socialist Revolution magazine and wanted to sell books that would give the Movement – and back then it had a capital M – some historical and theoretical perspective. The magazine’s editor, Jim Weinstein, provided the rag with a free 900-square-foot space in a building he owned. With $5,000 in raised funds, the idealistic collective opened Modern Times Bookstore in the Mission.

A lot of similar projects were launched in San Francisco during that era – co-operative businesses and ventures founded by activists with a radical social vision – and most of them folded. Modern Times grew. And while independent bookstores around the country are failing by the day, Modern Times is thriving.

"I think it’s because we’ve always had the support of the community," Michael Rosenthal, who started at Modern Times just weeks after it opened and retired this year, told us. "We were always a community bookstore."

And unlike a lot of ’60s-era institutions, Modern Times was open to adapting and changing – while preserving its core beliefs. There have always been books for sale on Marxism and socialist theory, but as Rosenthal points out, "at a certain point, we realized we were just speaking to a coterie."

Taking a broader approach, Modern Times became one of the first bookstores in the country to offer a lesbian-gay section and one on women’s issues. And these days the store has an incredible variety of books from major and small-press houses in all sorts of different genres, including Spanish-language and children’s books, and an extensive rack of zines and cultural periodicals. New College, right down the street, uses Modern Times as its school bookstore, a deal that helps both local institutions.

Modern Times has maintained its worker-ownership structure – and has always been a community resource. Its back room is abuzz with local author book signings and queer experimental poetry readings. Political and community groups use the store for everything from panel discussions on the city’s wi-fi plan to workshops on economics and how-to sessions on bike safety. The site has hosted events featuring the storied radical feminist ’80s performance art and culture-jamming group the Guerrilla Girls, and San Francisco’s innovative Cutting Ball Theater is currently in residence there. Check out the events page on the store’s Web site for a fabulous list of upcoming eclectic and wonderful writers, speakers, and interactive programs.

Modern Times has become more than just a neighborhood bookstore for the Mission. It’s also a crucial part of San Francisco’s progressive community. And it’s a sign that independent bookstores can withstand gentrification and the assault of the big chains – and make a difference. (Tim Redmond)

MODERN TIMES BOOKSTORE

888 Valencia, SF

(415) 282-9246

www.moderntimesbookstore.com

Small Business Awards 2007: Golden Survivor Award

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It didn’t seem like Harold and Larry Hoogasian were going to take up the family business, floristry. The brothers, exactly three years apart in age (both were born on Bastille Day), attended UC Berkeley in the ’70s – Harold studied genetics; Larry majored in architecture.

But a love of the customers and the family tradition drew them back into the fold. "We grew up in the business," says Larry, who remembers working with his older brother and father, Harold Sr., after school and on weekends at the flower stand that has occupied a spot in front of Gump’s on Post Street since Feb. 14, 1953.

Prior to establishing possibly the first stationary flower stand in the Financial District, the siblings’ grandfather was one of many small vendors of gardenias and violets operating a pushcart around the bustling downtown area. "One day he just got lazy and stayed in one place," Larry says, recalling what he’s always been told about his grandfather’s bold move.

It was their father who extended the reach of the business to the Cannery on Fisherman’s Wharf and Treasure Island, then a naval base. Both locations afforded the stand’s customers large doses of ’60s flower power. The tourists who flocked to the Cannery had all heard Scott McKenzie croon, "If you’re going to San Francisco …," and made sure to wear one of the Hoogasian blooms in their hair. The Treasure Island business was the spot where soldiers wired their last tokens of affection to loved ones before heading overseas.

After taking ownership, the sons brought the business to the next level. Harold took on marketing and promotions; Larry handled all of the designs and arrangements, then opened a storefront on Lombard Street, which closed shortly after he set up the current shop in South of Market six years ago.

It seems fitting that Harold and Larry, both fans of the city’s vibrant music scene as teens, would become an important part of the city’s music culture – florally speaking.

As the story goes, Harold entered a design contest at a flower show in 1976. Larry’s task was to build a gazebo. He pulled out all the stops, constructing a massive 1,000-square-foot structure. As he was nailing flowers over the trellises, a man strolled by and exclaimed, "My, my, my. I’ve never seen a pile of sticks so beautiful." That man happened to be Bill Graham. Not only did the siblings win the contest, but they also began a long relationship as the concert promoter’s florist, decking out dressing rooms for the Grateful Dead and Elton John and even putting together the wedding bouquet for Madonna’s "Like a Virgin" tour.

A career highlight for Larry, who was raised Catholic and had a contract with St. Mary’s for many years, came when he won the bid to make all of the arrangements for Pope John Paul II’s 1987 visit. "I had to chase away all the nuns," he says, explaining that many habited women were trying to snatch keepsakes from the floral decorations that were being broadcast to millions of television viewers.

His brother, Harold, has received his fair share of accolades too. His efforts have put the company in online and telephone floral service FTD’s top 100 in volume sales since the mid-’90s. To keep up with the competition, Harold has sealed contracts with 30 Walgreens, where a lot of last-minute flower sales occur these days.

Larry foresees customers soon pouring into the location on Townsend and Seventh streets as more residents move into the increasingly residential neighborhood. It looks like Hoogasian Flowers will be creating beautiful arrangements for locals on their birthdays and for their weddings and funerals for many years to come. (Deborah Giattina)

HOOGASIAN FLOWERS

615 Seventh St., SF

(415) 229-2732

www.hoogasian.com

Small Business Awards 2007: Die-Hard Independent Award

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In 2000, when Gary Erickson, founder and owner of Clif Bar and Co., told reps from Quaker Oats – the fourth largest consumer goods company in the world – that he needed to go for a walk before signing over his company for $120 million, they thought he was bluffing to secure a larger payout.

"He literally had his pen this close to the contract," recalls Sheryl O’Loughlin, outgoing CEO of the company, as she poises the tip of an ink pen a couple inches above a notepad at her desk. "The way he described it was that his hand started to shake. Something just didn’t feel right."

Erickson chewed over the life-changing dilemma as he walked the block surrounding his Berkeley office building. Did he honestly want to exchange an eight-year enterprise to produce and successfully market an appetizing assortment of energy bars and drinks for the life of an instant multimillionaire and all the attendant comforts it yields – mansions, shopping sprees, and exotic trips?

And how could the company founder not sell when the consensus among consultants, Erickson’s now ex-partner, and even some of his employees was that Clif Bar’s competitors would eat them alive if he didn’t? Deserting the Clif Bar empire before its fated downfall seemed to be the only logical move.

"Nestle had just bought PowerBar, which was really big at the time, and then Kraft bought Balance Bar," O’Loughlin explains. "So naturally there was a ton of pressure to sell, because we [supposedly] couldn’t make it on our own."

In spite of the risk or perhaps because of it, Erickson returned to his office with a new resolve and announced to the investment banker, lawyers, and his stunned partner that the deal was off. He then literally told them all to go home.

"I went from the darkest of dark to the highest of highs the moment I realized I didn’t have to sign that contract," marvels Erickson during a phone interview. The company founder – with his wife and partner, Kit Crawford – is resuming leadership of their company with just under 200 employees.

"I was more excited at that moment than probably any other moment of my life, aside from having children."

A year after ditching Quaker Oats at the altar, Erickson could identify another important reason why he did it. Although he and his partner were promised postacquisition roles in the company, as signing day neared it became clear that this was merely a typical sweet nothing often whispered in the midst of a seductive corporate takeover.

But once Quaker Oats unveiled its plan to move the Clif Bar operations to its offices in Chicago and told Erickson that his people in Berkeley would basically be out of their jobs, he got a whiff of the company’s true oats.

The decision invigorated Erickson and motivated him to define Clif Bar’s bottom line beyond its profits. He came up with what the company now refers to as the Five Aspirations: business, brand, planet, community, and people. This new mission galvanized the creators of Luna, Nectar, Mojo, and Builder’s bars to make 70 percent of each product organic and use biodiesel trucks between their bakery and destination centers.

On the community tip, Clif Bar donates approximately 1 percent of its net sales in the form of food, money, and volunteer time. Each employee volunteers at least 20 community service hours per year during paid work time, which can entail anything from assisting Habitat for Humanity in New Orleans to planting community gardens in Hunters Point.

Though a commitment to green practices and community service has boosted company morale, masseuses, salons, in-office rock climbing walls, personal trainers, and laundry facilities, among other staff perks, also serve to sustain Clif Bar’s people. How’s that for ulterior motives? (Angela J. Bass)

CLIF BAR AND CO.

1610 Fifth St., Berk.

1-800-254-3227

www.clifbar.com

Toward a sustainable San Francisco

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EDITORIAL When you decide to buy your vegetables at a local grocery store, not at Safeway, or when you buy your books at the neighborhood bookstore instead of Barnes and Noble, or when you buy hardware from a store down the street, not from Home Depot, you’re actually doing something profoundly radical. You’re challenging the predominant paradigm of economic theory — and you’re helping make the San Francisco economy a whole lot healthier for a whole lot of people.

That’s what a detailed new report by a group of small business leaders and advocates for a sustainable economy argues. The coalition, led by the Business Alliance for Local Living Economies, makes a powerful argument — and the San Francisco supervisors ought to make it official city policy to follow the report’s proposals.

As Jeff Goodman reports in "Localize It" on page 11, in some ways the report is a critique of globalization: it argues that an economic system that encourages Bay Area consumers to buy cheap goods made by near-slave labor thousands of miles away and shipped here to be sold in giant chain stores whose workers can’t even afford health insurance and where all the buyers arrive in individual automobiles isn’t good for anyone. The economic displacement, the environmental impact, and the human cost are all unacceptable. And yet globalization (and so-called free trade) is the accepted principal of almost all national and even statewide policy.

But cities like San Francisco don’t have to go along with that. Jane Jacobs, the urban economist and planner, noted more than 30 years ago that cities are the true engines of national economies — and that the healthiest and most successful cities are the ones that have diverse, locally controlled economies and that, as much as possible, replace imports with local products. That’s what the new report calls for — and on a policy level it’s not terribly complicated.

For example, a citywide policy calling for a sustainable local economy would strongly discourage any new chain stores in the city (such as a Home Depot on Bayshore Boulevard) on the grounds that they violate all the basic principles of what the coalition calls localization. Economic development decisions would have to pass a strict test: Does this encourage locally owned businesses? Does it help replace imports? Does it keep money in the economy? Land-use decisions would have to be evaluated in part on their economic merits (but under a new sort of standard); a high-end housing development that displaced local industry wouldn’t make the cut. Purchasing decisions would have to take into account localization issues: Does the food come from the region? Is it possible to buy the goods locally?

It’s impossible in the modern economy to completely avoid globalization — and it’s not necessarily a good idea either. The new report hardly calls for economic isolation. But it does offer a very different policy vision. The supervisors should hold hearings, bring in the authors of the report, and move to create a formal policy that sets sustainable local economics as a standard for all city business. *

The coalition’s report is available at www.regionalprogress.org.

Editor’s Notes

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San Francisco is spending $250,000 to create an economic development plan, and that’s probably a good thing. The city’s economy is changing; development pressure is threatening small businesses and light industry; local people can’t find jobs; and more and more residents are working out of town — it’s exactly the sort of situation that calls for some intelligent planning.
The current project, sponsored by the Mayor’s Office, is the result of a ballot measure approved two years ago that requires the city to measure the economic impact of policy decisions. For the most part, the legislation, by Sup. Michela Alioto-Pier, is aimed at stopping progressive initiatives, but if it gets San Francisco headed in the right economic direction, that will be well worth a quarter million dollars.
If.
See, I’ve talked to the economist who is heading up the study and to the person in the Mayor’s Office who is coordinating it, and I’m afraid that they’re coming very close to missing the point.
The final study won’t be completed until the end of January, but the Board of Supervisors got a sneak preview a couple weeks ago, complete with a PowerPoint presentation and lots of the kind of talk that seems coherent only to academic economists. (Under “Conclusions,” the summary recommends that we “invest in and diversify the engines of innovation in the knowledge sector.” Whatever that means.)
The actual research in the preliminary documents seems fairly solid, and the evidence, while not surprising, is still alarming: San Francisco has lost thousands of families, jobs that don’t require a college degree are vanishing, and the income gap between the increasingly wealthy high end of the population and the increasingly squeezed middle and working classes is growing.
But missing from the study so far are what I consider the two most important factors in economic development in this city: housing and land use.
I work for a small business, and I have to hire people, and I can tell you that every small businessperson in this town (except the ones who have vast stores of venture capital to spend) is facing the same problem I am: it costs too much to live here. And if their businesses are operating in the eastern neighborhoods, they’re also facing the very real prospect that they may lose their leases and their places of business to make room for more million-dollar condos that their employees can’t afford, which will fill up with more people who work in Silicon Valley.
Last week I spoke with Ted Egan, the Berkeley economist who is heading up the project for ICF Consulting. He understands that locally owned businesses are the key to the local economy and that replacing imports and expanding exports is a crucial goal. But he also said that “housing outcome isn’t on our plate.”
That, I guess, is because the city defined the study that way. Jennifer Matz, who is deputy director at the Mayor’s Office of Economic and Workforce Development, told me that her office would be coordinating with city planners but that housing and land use were beyond the scope of this report.
If that’s the case, it won’t be a terribly useful document. SFBG

Discovering the formula

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› amanda@sfbg.com
San Francisco has a thing for local businesses. From Chinatown to Hayes Valley, the dozens of distinctive neighborhoods that constitute this city have for the most part maintained their individuality with one-of-a-kind, locally owned places to shop, snack, and seek services.
While many cities and small towns across the country have succumbed to the sprawl and homogeneity of chain stores, some have resisted, even in the face of lawsuits and wily campaigning from megaretailers. Big corporations including Wal-Mart, Home Depot, and Target are combating restrictive municipal legislation with their money, pouring millions into local political races and flying in paid signature gatherers for ballot referenda.
“They’re spending $100 per vote in some cases,” Stacy Mitchell told the Guardian. Mitchell is the author of Big-Box Swindle and a senior researcher for the New Rules Project, a subsidiary of the Institute of Local Self-Reliance, which tracks legislation against formula retail.
“They’re getting mixed results,” she said, which means sometimes the big boys lose, like in the multiyear battle with Inglewood that sent Wal-Mart walking. But more often than not, the formula retailers win.
Take Chicago as a recent example: Mayor Richard Daley overrode city councilors and issued his first veto in 17 years, against legislation that would have required large retailers to pay a living wage to employees. Councilors hoped to trump the mayor with another vote, but at the last minute three councilors switched positions to side with Daley.
“I still don’t understand how it happened,” said SF supervisor Tom Ammiano, who flew into Chicago to speak in favor of the legislation. He told us the city was behind it, though opponents were arguing that low-income people needed the option to work and shop at Wal-Mart and it was discriminatory to not allow the store to move into the city. “They played the race card. It was obvious they were people on [Wal-Mart’s] payroll.”
In the week since the veto, Wal-Mart has already swooped in with several site proposals for the first 20-acre megamart in Chicago. It’s stated an eventual goal of building 20 stores in the Windy City. Could Wal-Mart spite San Francisco just like it did Chicago?
Since 2004, San Francisco has operated with the Formula Retail Ordinance, designed to preserve “the city’s goal of a diverse retail base.” This isn’t an outright ban, but it makes the application and review process more arduous for formula retail. The ordinance defines formula retail as any chain with 11 or more outlets that offer standardized services or mimic one another in decor, architecture, and practices (like Starbucks, the Gap, and Wal-Mart, to name an infamous few).
The relevant legislation, Section 703.3 of the Planning Code, reads like it was penned by a Norman Rockwell acolyte and cites such businesses as generally undesirable, granting neighborhoods the right to be notified of potential chain store proposals. While the legislation allows neighborhoods to create their own stricter legislation, it also grants them the right to accept a chain into the fold, which is a pretty big loophole.
So far, most neighborhoods haven’t been welcoming. A battle in North Beach over Home Depot resulted in an outright ban of all formula retail in the neighborhood. Hayes Valley followed suit. Conditional use permits in western SoMa, Cole Valley, and Divisadero from Haight to Turk add an extra layer of scrutiny to the planning process when a Starbucks or Target want to set up shop. Potrero Hill–Showplace Square is the next in the trend, with a 12-month interim conditional-use period and a more permanent restriction on the way. That restriction was introduced by Sup. Sophie Maxwell, approved by the Land Use and Economic Development Committee, and headed to the full Board of Supervisors for initial approval Sept. 19 after Guardian press time.
Maxwell’s legislation could become moot this November if voters approve Proposition G, the Small Business Protection Act, which would extend conditional-use permitting to the entire city, making any proposal from a chain store subject to public hearings and an arduous Environmental Impact Review at the expense of the applicant, not the city.
Dozens of counties and municipalities have enacted similar ordinances around the country in response to the track records of megaretailers. Public criticism is mounting against corporations such as Wal-Mart and Home Depot for drawing the shopping masses by reducing prices to quash smaller competitors and for pulling profits out of communities instead of keeping them local, as small businesses tend to do.
But the chain stores aren’t just rolling over.
“It’s happening in enough places that it’s reached a point where they’re feeling nervous about how it’s affecting their growth,” Mitchell said about the retail giants. Her organization has been assisting communities for several years in drafting legislation against formula retail and is seeing some of that legislation undercut by voracious chain stores. Wal-Mart, the most notorious foe, dumps thousands of dollars into local election races. The tactic is especially evident in California.
“Wal-Mart spends more in California than anywhere,” said Nu Wexler, spokesperson for Wal-Mart Watch, a Washington-based organization with hawk eyes on the company. “They have active lobbying in all 50 states, but California is a particularly important market for them.”
He attributes that to the state’s status as the sixth-largest economy in the world. In 2002, Wal-Mart promised to open 40 supercenters in the state within four to six years. As of October 2005, only six had been opened. “They’re fighting expansion battles all over the country, but they’re having an especially difficult time in California,” Wexler said. Inglewood, Turlock, and Hercules have all recently dodged Wal-Mart.
But several other cities have not, despite protective measures, and in the last year 12 more supercenters have opened in California, bringing the grand total to 19.
Contra Costa County, apropos of no immediate threat, passed a 2003 ordinance prohibiting “big box” stores over 90,000 square feet. In response, Wal-Mart dumped more than $1.5 million campaigning for a measure overriding the ordinance on the next available ballot. In 2004, the ordinance was overturned by 54 percent of voters.
Four years of fighting in Rosemead resulted in two city council shake-ups, with a recall election of two council members set to be decided this week; a possible Brown Act violation when city officials approved a permit for Wal-Mart during a meeting when it wasn’t on the agenda; and multiple lawsuits from both sides. Wal-Mart spent $200,000 campaigning and dropped another $100,000 in local charities to spread some good cheer. It worked: doors opened at a new supercenter Sept. 18.
Last August, a Wal-Mart opened just across the bay in Oakland even though the city already had a ban on big-box retail larger than 2.5 acres. Spurning the city’s provincial laws, Wal-Mart found real estate regulated by the Port of Oakland — which, similar to San Francisco’s port, is outside the city’s jurisdiction and not subject to local ordinances.
“It was passed in a backroom deal with the port before the city could have any public hearings,” said Adam Gold, a spokesperson from Just Cause Oakland, a local group that opposed the store. “It made it difficult to resist it. It had already been approved.”
At the state level, Governor Arnold Schwarzenegger recently vetoed Senate Bill 1414, introduced by San Francisco’s state senator Carol Migden, which would have required employers with more than 10,000 workers to put 8 percent of total wages toward health care. Not a surprise: Wal-Mart’s Walton family dropped more than half a million dollars into electing the governor, with a most timely donation of $250,000 last year on the very day he vetoed legislation aimed at Wal-Mart that would have required businesses to disclose when employees use public health care services.
Two other bills, SB1523, requiring environmental impact reports and public hearings for the construction of stores larger than 100,000 square feet, and SB1818, allowing cities to recover legal fees when sued by big-box retailers, sailed through the legislature but are currently festering on the governor’s desk.
Is it all enough to protect San Francisco? Can the city keep mom and pop on the corners and resist the commercialism that has made a city like Emeryville the mall that it is today?
Maxwell, who pushed the recent legislation for Showplace Square and Potrero Hill, hopes so. “I’d rather have the position of them on the offense than the defense,” she said of potential retail applicants. When asked if the city codes are strict enough, she said, “If not, I’d be willing to put forth the legislation that is.”
As for the idea of Wal-Mart coming to town, the District 10 supervisor was nothing if not firm: “No, no way. Not in San Francisco.” SFBG

Topping the hoop

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› culture@sfbg.com
“Wowza, how’d you get that gnarly bruise?” wide-eyed oglers at the office, in line at the taquería, or on my MySpace blog would ask with awe after peeping the five-inch-long trophy wound on my hip.
“Oh, this old thing,” I’d sniff. “No big deal. Just picked it up in hula hoop dance class.”
“Hula hoop dance class?” my friends back home would reply incredulously, their tiny brains atrophied by played-out calorie burners like hiking and cycling. “You got that from hula hooping? [Guffaw, guffaw, insert joke about pitiful lack of physical endurance here.]”
“Yes, friend, you see, I’m doing an article about this new fitness trend, hoop dance, and …”
“HULA HOOP DANCE CLASS!?!? Only in California, dude, only in California.”
Well, yeah, bitches. That’s right: California. Utopian birthplace of an endless array of revolutionary fitness regimens. Jazzercise. Tae Bo. Heck, according to Wikipedia, Jack LaLanne invented the jumping jack right here in California.
It’s true, though, that when it comes to wacky-sounding physical fitness, it’s been a while since the Golden State unleashed any new trends upon the world. Opportunities for women to get their saucy swivel on have been dwindling — spinning’s hardly saucy, girlfriend — with nary a Curves-free shimmy in sight in some parts of the country.
So yes, indeed, I say thank heavens for the hula hoop, God’s sexiest training wheel. Not only is the hoop helping to polish the state’s tarnished gym-class cred, it’s also spawned hoop dance, a swayin’ and slithery new workout aimed at squeezing the inner juiciness out of average dames like you and me (or possibly your girlfriend or even your mom).
The practice has already gained a healthy following in San Francisco, thanks to inspirational instructor Christabel Zamor, a.k.a. HoopGirl (winner of the 2006 Guardian Best of the Bay Award for Best Personal Trainer). But what about my hoop-deprived friends back East? When and how will they ever get their jaded swivel on?
Good news for all: having wisely determined that despite her effervescent charm and spiritual buoyancy she simply can’t be everywhere at once, HoopGirl’s now passing her hard-earned knowledge along to a bevy of women from all over the country who seek opportunity in this brand-new industry. After all, what better way to sneak erotic exercise into the red states than via the seemingly innocuous hula hoop, Trojan horse of the fitness world?
The 10 women who attended Zamor’s first weekend-long teacher certification workshop in June formed a broad career spectrum: a nurse, a raw food chef, an elementary school teacher, a massage therapist, an architectural assistant, and, of course, a handful of professional fitness instructors. All possessed the requisite hoop skills, and a few even had teaching experience.
What they came to learn, however, was the nitty-gritty of the hoop dance biz, something that Zamor did not have the benefit of knowing at the beginning of her own career. In fact, Zamor’s first exposure to hoop dance came while she was pursuing a career as an anthropology professor at UC Santa Barbara.
“When I was studying anthropology, I loved teaching, but I was really interested in ethnic dance and music traditions,” she says. “The academic environment only contextualized these things in terms of their own preestablished academic jargon. I had been very naive going into graduate school. I really thought it was about exposing myself to the beauty of dance.”
She found herself entranced by hoop dancers at a rave outside of Los Angeles. Disillusioned with the academic environment, she committed herself to learning hoop dance. She returned to Santa Barbara with a hula hoop and started practicing in the park.
“It was a new field, based on no other cultural dance form,” she explains. “And all of a sudden people were beating down my door for hoop dance.”
After struggling in an environment in which she was constantly forced to defend the legitimacy of studying African dance traditions, Zamor found herself at the epicenter of a dance revolution. Within three months of her first hoop dance experience, she found herself teaching group classes.
Today, the hoop dance teacher certification course is the latest addition to Zamor’s hula-shake empire, which includes group classes, private lessons, instructional DVDs, and performances. It’s also a crash course in running your own business.
Over three days, students learn everything they need to effectively teach a hoop dance fitness course, including how to clearly explain and demonstrate the key principles of hoop dance (squat and shimmy, very important); how to make use of imagery and metaphors (“Reach into the honey pot!”); the physiological and psychological benefits of hooping (“Did you know that the most beautiful sound in the world is the sound of a hoop hitting the floor? That’s the sound of learning and growing.”); class structures (hoop jam!); and how to deal with the top five difficult situations (a cranky, clumsy reporter in your midst, perhaps). The course also leaves students with a sense of marketing savvy and all the esoterica involved in operating a small business, such as insurance, liability waivers, pricing, and property rental.
“I really respect Christabel as an artist and a business woman,” says Candice Schutter, a movement facilitator and life coach from Portland. “She’s given us a workable structure that can be used right away to create a thriving business.”
But Zamor said she hopes the women take away much more than technical know-how. “The most important thing that I want the teachers to exude, so that other people can absorb it, is confidence,” she says. “It’s the key to learning hoop dance. It’s a feeling. It’s not something people can memorize. You just have to believe it.” SFBG
The next HoopGirl teacher-training course will be in San Francisco, Oct. 6–8. To register or for more information, go to www.hoopgirl.com.

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› tredmond@sfbg.com
It’s your Guardian. That’s the message we posted on the cover today, and I mean it: The new sfbg.com website is designed to be fully interactive. You can post your comments on every article, every review, every editorial. You can join in on five new blogs. In a few weeks, we’ll have a reader’s blog, just for you.
Newspaper publishing should never be a one-way communication. For more than 20 years, I’ve been hearing from readers (yeah, I answer my own phone), and your ideas and suggestions (and complaints) are what make this paper great.
And now you can share your thoughts with all the other readers, too. Argue, fight, tell me I’m full of shit, point out great San Francisco ideas that ought to be in the mix … It’s easy. Registration takes about 30 seconds. And keep coming back – there’s going to be more, much more, rolling out in the next few weeks.

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The first thing I did when I learned that private housing developers in San Francisco were demanding 28 percent profit levels (see page 5) was to call my brother Mike, who runs a small business building houses in New York. He almost dropped the phone.
“Let me get this straight,” he said. “These guys say they need 28 percent profit?” That’s the minimum, I told him.
“Shit, sign me up,” he laughed. “I’ll take the whole crew and we’ll be on the next plane.”
Mike is thrilled when he walks away with 10 percent profit on a job. So is everyone he knows. So are most small businesses (and quite a few large ones). The only ones who can get away with demanding that sort of return are oil companies, daily newspaper publishers, and, it appears, San Francisco real estate developers.
This isn’t really shocking news: We’ve known for a long time that developers make a killing in an inflated housing market. Compared to the boom years of the 1980s, when the office market was running rampant and out of control, the 28 percent margins aren’t that outrageous – high-rise office developers made even more.
But there’s a bottom line for the city: These folks aren’t just getting rich; they’re getting really rich – purely off a market that exists simply because of the appeal of San Francisco. They owe it to the city to give more than a pittance of that back.
Now this: Just about every small-business owner in San Francisco is sitting down with a spreadsheet and trying to figure out how much Sup. Tom Ammiano’s health care legislation is going to cost. A lot of them seem to be nervous – in part because of the fearmongering campaign put out by the Chamber of Commerce and the Committee on Jobs.
But when you actually look at what the law says, it’s not that scary. I’ve gone over the final language, and here are some key points:
1. The requirement that employers pay for health care doesn’t affect anyone with fewer than 20 employees, which is most of the small businesses in town.
2. Nobody’s going to have to pay anything until July 2007, and companies with between 20 and 50 employees aren’t going to have to pay anything until April 2008.
3. There’s a 90-day waiting period before anyone has to pay for a new employee.
4. Nobody will have to pay for employees who either have health insurance already (from a spouse, say) or who voluntarily decline health insurance.
5. Employers will pay based on how many hours an employee works, so the price for a part-timer will be comparatively small.
6. If you have more than 20 employees and don’t currently provide health insurance for all of them (or the amount you pay for that insurance is low), you’ll have to ante up, either by buying insurance in the private market or paying into the city plan. For companies with 20 to 99 employees, the city plan will run about $1.12 an hour next year for anyone who works more than 12 hours a week. Pencil it out; it may not kill you.
It’s absolutely an imperfect system. Employer-based health insurance is the wrong model. But for now it’s all we have – and this is a way to offer at least basic primary health care to everyone in the city. It’s worth the price. SFBG

Ammiano’s health care plan is fair

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OPINION Universal health care. These days, most people want it, but no one wants to pay for it.
But like it or not, we all share in the expense of providing health care. We pay for it directly in our health care premiums or indirectly from higher costs for goods, services, and taxes. According to the activist group Health Care for All, “We spend over $6,000 per person in the US — two to three times the amount spent in other countries that insure everyone and have better health outcomes.” Our health care system, if you can call it that, is currently based on a corporate, for-profit model that increasingly leaves large numbers of people uninsured — and they must rely on taxpayer-subsidized public health programs.
Mayor Gavin Newsom is pushing for universal health care in San Francisco, and there are three ways on the table to fund it.
The Committee on Jobs, Chamber of Commerce, and Golden Gate Restaurant Association champion a plan in which all businesses pay a set fee, whether or not they are providing health care for their employees. Under this plan, large businesses that are not providing health care for their employees will save big money. Small businesses — and every business already doing the right thing — would subsidize the minority of large businesses that don’t provide health care.
In fact, 63 percent of the projected $50 million in revenue raised by this plan would come from businesses with fewer than 20 employees. A full 80 percent would be paid by employers with fewer than 50 employees.
The local papers say Newsom supports a voluntary plan. I assume that means employers can choose whether to pay. I’m surprised anyone would propose this with a straight face. Most employers do provide health care. This legislation is about those that don’t. They haven’t volunteered to pay for their own employees’ health care; why would they pay for a city plan?
Then there’s Sup. Tom Ammiano’s proposal.
Ammiano’s plan includes a minimum spending requirement for health care services for all employers with 20 or more employees. Small businesses with less than 20 employees (the vast majority of registered businesses in San Francisco) don’t have to pay anything. Of the three proposals, Ammiano’s seems the fairest to the majority of employers that already provide health care.
The Committee on Jobs tells us that small businesses will be hurt by this plan. I’m always suspicious when a well-funded organization that exists to lobby for the interests of the largest corporations in San Francisco leads with an argument related to the impact to the small business community.
The SFSOS thinks that any decision on Ammiano’s health care plan will be made “predominantly by people who have never worked in retail business, never managed a staff, nor ever had to make a payroll.”
I operated a temporary employment business in San Francisco for 25 years. Ammiano’s plan levels the playing field for all businesses.
For the record, many of my former colleagues within the small business community provide very generous health care benefits. Employees in small businesses, after all, are like family. Many small business owners think that those who do not provide health care have an unfair competitive advantage.
If we’re going to have universal health care, everyone should pay. SFBG
Barry Hermanson
Barry Hermanson is running for state assembly in District 12 on the Green Party ticket.

Amalgamated health care

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› sarah@sfbg.com
Mayor Gavin Newsom has taken credit and sought the national spotlight for a plan he touts as an innovative way to deliver universal health care access to the city’s uninsured. Yet Newsom has consistently ducked the vitriolic public debate over how to the pay for the plan, which a companion measure by Sup. Tom Ammiano would cover with a controversial employer mandate.
But as the measures were headed for the first of at least two hearings before the Board of Supervisors (on July 11 after Guardian press time), a board committee and Newsom’s public health director, Dr. Mitch Katz, finally made it clear that Newsom’s plan can’t stand alone, as much as the business community would like it to.
“The two pieces of legislation were created to and do fit together,” Katz said at a July 5 Board of Supervisors’ Budget and Finance Committee hearing. “One can’t successfully move forward without the other.”
Katz made the comments after budget analyst Harvey Rose said the mayor’s plan doesn’t contain a specific funding mechanism. Rose’s admission prompted Sup. Ross Mirkarimi to characterize the mayor’s proposal as “a one-winged aircraft that doesn’t fly.” Sup. Chris Daly added that “It’s time to be up front that [the San Francisco Health Access Plan] only works if it has significant contributions from outside sources, including Ammiano’s plan.”
Neither Newsom nor his spokesman Peter Ragone returned repeated calls for comment on the issue. The Mayor’s Office also has not fulfilled a June 22 request by the Guardian for public records associated with the plan in violation of deadlines set by the city’s Sunshine Ordinance.
“Celebrating one resolution while pooh-poohing the other is disingenuous, because if they don’t work together, nothing works,” Mirkarimi added at the hearing, shortly before he, Daly, and a mostly mute Sup. Bevan Dufty voted to combine both proposals into one health care plan: the San Francisco Health Care Security Ordinance.
“After today’s meeting,” Ammiano wrote in a follow-up press release, “I’m confident that the citizens of San Francisco and the media will understand that the Worker Health Care Security Ordinance and the Health Access Program are one comprehensive health care plan, and are now codified as such in a single bill.”
The decision to amalgamate left small business owners voicing fears over the economic impact of the employer spending mandate, which would raise an estimated $30 million to $49 million of the $200 million cost of providing health care access for San Francisco’s uninsured.
As the controller’s Office of Economic Analysis points out, most of the financial burden of the employer mandate “falls on businesses with 20 to 49 employees, since these firms currently are less likely to offer health care benefits to their workers.”
With the cost of covering 20 full-time employees’ health care estimated at $43,000 to $65,000, many business owners fear the mandate will result in layoffs, economic downturns, and the erosion of their already marginal profits.
Although the controller predicts a “nearly neutral impact” on the city’s economic picture — a loss of 60 to 590 jobs from staff cuts or business closures mitigated by 140 to 250 new health care–related positions — small businesses worry about the controller’s “moderately adverse impact” prediction for employers who currently aren’t offering health care benefits at mandated levels.
“It’s going to add another $50,000 to my already high health care costs,” John Low, who runs a small company in the Tenderloin, said at the hearing. San Francisco Soup Company owner Steve Sarver claimed the mandate could force him to abandon expansion and hiring plans: “Projects that I was borderline on, I’m now going to go toward eliminating those jobs.”
As written before the July 11 hearings, the mandate would kick in January 2007 for large businesses and the following January for small businesses. Mirkarimi says the board should be “extremely sensitive” to the small business community’s concerns.
“The business community knows best how to speak about profit margins. Right now, an employer spending mandate is the only option in orbit. If there are other options, great, but so far all we’re hearing is nothing but distortion,” Mirkarimi told the Guardian. He said the proposal by some downtown leaders to increase the sales tax by a half cent — an alternative to Ammiano’s mandate — comes from “the same community who would sabotage any attempt to enact a tax-based funding mechanism.”
Mirkarimi told us the mayor’s plan was “prematurely pitched through the media on a national stage,” while Ammiano’s legislation, “which is really the heart and soul of the plan, has struggled to get any notoriety locally.” Mirkarimi told us he hopes Newsom will directly address small business concerns — including the reality that his health access plan can’t work without Ammiano’s mandate.
“The mayor needs to make an effort to show small business that he intends to mitigate the negative financial side effects of his plan. But what is the mayor’s communication? And why is he relying on the Board of Supes to fill in the blanks? The mayor needs to exercise leadership, to admit that for his plan to work somebody has to pay, and decide who that somebody is going to be, then build confidence that he has adequate answers. But right now, he’s deflecting that responsibility onto the board.”
Dr. Katz, who was a member of the Universal Healthcare Council that created the plan to offer health access to all the city’s uninsured residents, said he neither hopes nor believes that all 82,000 of the city’s uninsured will enroll.
“We hope that large employers continue to chose commercial health insurance,” Katz said at the meeting, noting that 95 percent of businesses with more than 100 employees already have commercial health insurance.
“If people enroll in a commercial health insurance plan, the city doesn’t get the revenue, but we also don’t get costs,” said Katz, who believes the city can offer health access to all uninsured residents without building additional health centers.
“All existing clinics and facilities have shown a desire to join the program and accept people,” Katz said, noting that the $104 million the city already spends on San Francisco’s uninsured is on the lowest-income individuals, plus a minute subsidy to small- and medium-size business but no subsidy for large businesses.
“Most of SF’s 82,000 uninsured residents are getting care right now, but not in a rational way,” Katz explained. “I look at how much capacity could we add to health centers by only paying for additional providers, like nurses, doctors. And the answer is a lot. We’re not doing evenings or Saturdays, so we just need to open for more hours and hire more doctors, nurses.”
Acknowledging that the Department of Public Health already saw 49,000 uninsured residents last year, Katz said that doesn’t mean that people are getting what he calls “rational care.”
“So when we create a system, we’ll create a demand,” he said. “It’s not just the woman with a bad cough who comes in, but now she’ll also get a pap smear.” SFBG
For coverage of the July 11 hearing and other updates on the health plan, visit www.sfbg.com.

Downtown’s deceptions

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By Steven T. Jones
The rancorous debate over providing health care to all San Franciscans finally comes to the Board of Supervisors for a vote tomorrow, culminating a truly ugly political spectacle. The business community has aggressively gone after the measure’s sponsor, Tom Ammiano, angrily accusing him of not listening and not caring.
Now, it’s understandable that some small business people on the verge of going under would be upset about having to give health coverage to their employees. It’s a legitimate concern, but it’s also a valid point that Ammiano’s measure makes: providing a living wage and health coverage to employees is a reasonable cost of doing business in this city, and if you can’t afford to do these things, then your business plan doesn’t really pencil out, sorry.
This might have been a good political debate to have, but unfortunately, the issue has been sullied and convoluted by the intentional deceptions of a few downtown groups (notably the Committee on Jobs, Golden Gate Restaurant Association, and the San Francisco Chamber of Commerce), distorted and inaccurate presentations of the issue by the Chronicle and Examiner, and the political cowardice of Mayor Gavin Newsom.
If you’ve been reading the Guardian then you know that the “Newsom plan” was simply one component of the “Ammiano plan,” not the workable stand-alone plan that the dailies and business elites tried to present it as (by itself, Newsom’s plan didn’t pay for itself and it threatened to make the number of uninsured in the city grow by providing the perverse incentive for businesses to drop their employees’ health insurance in favor of cheaper but less comprehensive access to city clinics). Even the dailies finally got around to saying the two plans relied on one another last week after playing up the deceptive competition for weeks.
Here’s the bottom line: Ammiano’s plan got eight co-sponsors because it was an honest attempt to deal with a serious problem using an approach (employer mandates) popular with most citizens (as shown by 69 percent of the people voting for a statewide mandate in Prop. 72). But downtown has done nothing but obstruct and obfuscate the issue. And they’re loud and have tons of money, so they’ve managed to bring out Newsom’s most cowardly instincts and they’ve cowed the media into bearing false witness to what’s going on.
Will they also peel off a supervisor or two who have already pledged their support? I guess we’ll find out tomorrow.

The best health care plan

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EDITORIAL The health care model that’s been established, largely by default, in the United States is an utter mess. Most working people get their insurance through their employers. That means people who have jobs that don’t provide insurance are out of luck, and people who don’t have jobs are out of luck, and the self-employed are stuck with crazy bills, and small businesses are getting hit harder and harder with rising insurance rates that they can’t afford.
It’s a ridiculous way to handle health care: In most other western democracies, everyone is part of a national health care program, and under the best systems, the government is the single insurer and pays all the bills.
Among other things, that prevents the sort of crisis that San Francisco faces today, where the large numbers of uninsured residents have no choice but to seek care at the overburdened San Francisco General Hospital. That leaves the taxpayers on the hook for more than $100 million a year.
For businesses, particularly small businesses, that scrape and suffer to provide health insurance for their workers, the system is fundamentally unfair: Those companies pay twice, first for their own employees, and then again in higher taxes to cover the costs of the uninsured. Businesses that can well afford health insurance (the Wal-Marts of the world) but don’t pay are forcing others to cover their costs.
In a perfect world, with national health insurance, this wouldn’t be an issue. But it’s almost impossible for a single city to implement a single-payer system — which is why Mayor Gavin Newsom is struggling to present a functional health plan, and why Sup. Tom Ammiano’s employer mandate plan is absolutely necessary.
But the small business advocates who complain about the burden of paying more than $100 a month for each uninsured employee have a point, too — and this entire plan ought to be linked (at least in the long run) to Sup. Aaron Peskin’s proposals to change the city’s business tax.
Newsom’s dramatic announcement last week of a complex plan to cover all residents won overwhelmingly favorable press coverage. But so far, the plan itself is little more than a glorified press release. There are a lot of devilish details, particularly when it comes to funding.
There’s no new money in the mayor’s plan. He argues, correctly, that San Francisco currently spends $104 million on health care for the city’s 82,000 uninsured, and shifting that money into a city-run health care program will underwrite a significant amount of the cost. But that money can’t just be moved like a chess piece — it’s part of the San Francisco Department of Public Health budget, and if everyone does not sign up for the new program and very sick patients (including, say, undocumented workers who don’t understand or fear enrolling in the city plan) keep showing up at General, there won’t be enough money to go around.
There’s also the very real prospect that some unscrupulous employers will simply quit paying health insurance premiums and dump their employees into the city plan. That would overwhelm the program and push it quickly toward financial ruin.
So the mayor’s plan has no chance at success unless Ammiano’s employer mandate passes, too. The Ammiano plan would offer additional funding for the program by requiring that employers either provide private health insurance or pay into a city pool — and would prevent businesses from tossing their health expenses into the city’s lap.
Ammiano’s plan isn’t perfect — no employer-based plan ever will be. The health insurance requirement would hit all businesses with more than 20 employees, and that might be a bit low. The plan already has some progressive gradations (companies with more than 100 employees would pay a higher fee), but linking the costs more directly to the size of the business (in other words, hitting the large outfits — which can well afford health insurance — a bit harder and giving more of a city subsidy to the smallest companies) could help ease the burden on struggling merchants.
But in the end, his plan — which would have no impact on employers who already offer health insurance to their workers — is crucial to any effort to get the uninsured into a decent health program (and to end the stiff taxpayer subsidy for companies that don’t provide insurance). The supervisors should approve it.
Still that’s not the end of the story. At the same time that Ammiano’s addressing health care, Peskin has floated a proposal for a new gross receipts tax on local business. Here’s the way to proceed: The supervisors need to fund a complete study of how much gross revenue local firms take in; write a new tax that allows the city to eliminate the payroll tax; add a progressive gross receipts tax; and use the next tax policy to help deal with the costs of health care. Big, rich companies pay a lot (enough to help subsidize the citywide health plan). Small firms pay less (and the reduced tax burden helps offset the costs of paying for health insurance). In the end, San Francisco would be the first US city to launch a progressive system for providing health insurance to all. SFBG

Ma’s moneybags

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› amanda@sfbg.com

As many predicted, late independent expenditures on behalf of District 12 California Assembly candidate Fiona Ma are flooding into the race, aimed at tarnishing her opponent, Janet Reilly, with Web ads, TV spots, and mailers. To date, more than $750,000 has been spent by nine IE committees supporting Fiona Ma. In addition to the million dollars flowing through her campaign’s piggy bank, that bumps her into the bucks-deluxe category of the 2006 primaries.

More than $500,000 comes from the Sacramento-based Leaders for an Effective Government, which got its initial funding from Ma’s former boss and current political benefactor, powerful former senator John Burton. The other eight IEs are Californians United, Professional Engineers of California Government, Cause Law Enforcement Independent Expenditure Committee, San Francisco Association of Realtors, Peace Officers Research Association, Committee for a Better California, Teachers United with Firefighters and Correctional Officers, and Asian American Small Business PAC. All are based in Sacramento or Los Angeles and have an incestuous web of contributing organizations, in some cases with the same contact information (none of which returned Guardian phone calls).

The Reilly campaign made a big stink back in April when Leaders for an Effective Government spent $33,000 on pro-Ma mailers. The campaign filed complaints on April 27 with state attorney general Bill Lockyer, San Francisco district attorney Kamala Harris, and the Fair Political Practices Commission, claiming an illegal connection between the IE, Burton, and the Ma campaign. It still stands by those concerns, citing a state law that bans coordination between an IE and the campaign its spending benefits.

"Bullshit," Burton told the Guardian when asked about the complaints filed by the rival campaign. As far as his relationship to Ma’s campaign goes, he said, "I don’t have a fucking story. I’m helping her campaign." He claimed no connection to the half million spent on her behalf, but did admit to being a big early benefactor of Leaders for an Effective Government.

Ma is benefiting from the lion’s share of that IE’s spending, although it also spent $33,900 on the Johan Klehs campaign for California Senate. While Districts 18, 45, and 69 are seeing a lot of financial activity, no other Assembly race comes close to touching Ma’s IE total, with the second highest clocking in around $300,000.

"It could be the most expensive primary race ever," Bob Stern, president of the Center for Governmental Studies, told us.

While an IE’s intervention probably isn’t illegal, "it has made campaigns dirtier," said Theis Finlev, a policy advocate for Common Cause. IEs have found new life breathing the polluted air of Proposition 34, passed in 2000 with the good intention of capping amounts of campaign contributions to control the financial investments of special interests. Unlike with campaigns, there’s no limit on how much an individual can contribute to an IE.

"The point of limits is to look like you’re not beholden to anyone, but this is a huge economy with many interests concerned about what happens in Sacramento," said Finlev. In addition to having no spending limits, IE committees disclose contributors at different intervals from campaigns and typically don’t start spending money until weeks before the election.

"It’s like a shell game," Finlev said. "Wealthy contributors can hide until after the election is over."

When asked about the money IEs are spending for Ma, campaign spokesperson Tom Hsieh aligned it with Reilly’s use of personal finances. "Janet and Clint Reilly have spent over $300,000 to date. They’ll probably spend another $400,000 to $500,000 by the end of the election," he conjectured.

Reilly spokesperson Eric Jaye said it was unlikely they’d spend much more: "She’s near the limit. If she has to search the couches, she will."

"We’ve been outspent in the last four weeks at least two to one," Reilly told us. She hopes to keep up financially, but she was critical of the contributing sources of the IEs. "It’s the tobacco lobby, the liquor lobby, large developers, gaming industries, spending unprecedented amounts of money getting Fiona Ma elected."

"I believe the campaigns are equalized by those contributors," Hsieh said, but claimed no control over any of them. "Fiona does not support any of those industries." He said there wasn’t much they could do about the fortuity of hundreds of thousands of dollars being spent to support Ma.

"People in this district should be making the decision," Reilly concluded. "Not the Sacramento insiders." SFBG

Small Business Activist: Comet Skateboards

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458 Brannan, SF
(510) 625-9045
www.cometskateboards.com

What if we saved our precious natural resources by not transporting our food and clothes halfway around the world? What if Oakland had its own BART-accessible skate park? And what if everyone there were riding skateboards made from stuff that wasn’t gnarly on the planet?

The proprietors of Comet Skateboards, founders Jason Salfi and Jonathan Reese and co-owner Don Shaffer, want to make all of these grand ideas realities. They’re already doing so with their stylishly designed skateboards, with many decks sporting artwork by Oakland youths. Manufactured by Glissade Snow Board Company, a solar-powered facility in SoMa, the boards are made from sustainably grown bamboo or maple and will be glued together with a soy-based resin.

By "merging sustainability ethos with pop culture," as Salfi explains, "[Comet] can help push things over the edge" in terms of influencing youth to think more about the environment.

But their eco-consciousness doesn’t just end with the manufacturing of their boards. The entrepreneurship would also like to foster other small businesses in the Bay Area while saving the planet at the same time.

For the past two years, Shaffer has been busy working toward his vision of living economies. He started the San Francisco office of the Business Alliance for Local Living Economies, which connects local agriculture with local business to encourage people to sell Bay Area–made goods locally. The organization, which has chapters in Philadelphia and Victoria, British Columbia, also supports the principle that when businesses stay small and local, they better serve the community, labor, and the environment.

As for that skate park, the company is planning the Hood Games block party for May 13 at 15th and Franklin Streets in downtown Oakland, all to help fund the park on Jefferson Square.

While Shaffer works with BALLE, Salfi involves himself with Earth Alliance Institute, which gets youth involved in solving global environmental problems. Looks like Comet Skateboards will have many successors in the next generation. (Deborah Giattina)

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