America's Cup Archives — Page 4 of 5 — San Francisco Bay Guardian Archive 1966

Central Subway gravy train shows how City Hall works

Sasha Cuttler

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August 23, 2011

Central Subway gravy train shows how City Hall works

Despite its skyrocketing cost, inefficient design, and a growing chorus of criticism – ranging from a Wall Street Journal editorial today to an op-ed in the SF Chronicle last week – the Central Subway project continues to move forward for one simple reason: rich and powerful people want it to happen, whether it makes sense or not, because it benefits them directly.

“The subway is a case study in government incompetence and wasted taxpayer money,” the Wall Street Journal wrote in a “Review & Outlook” piece today (full text below), but it was only partially correct. The Central Subway is actually a case study in how things get done at City Hall, and how connected contractors and their political patrons make off with that taxpayer money.

“San Francisco is embarking on a Big Dig of the West, and unless our local leadership applies the brakes soon, the damage to our transit systems will be all but guaranteed. I urge local and national leaders to recognize what is obvious and stop this train to nowhere,” former San Francisco Transportation Agency Chair Jake McGoldrick wrote in his Aug. 18 op-ed.

But that isn’t likely to happen, given the political dynamics that have taken root at City Hall this year. Remember, this project was the result of a mutually beneficial deal that then-Mayor Willie Brown cut with Chinatown power broker Rose Pak back in 2003 (when the project was estimated at $648 million, before it ballooned to its current price tag of $1.6 billion).

This was the same duo that engineered the appointment of Ed Lee as interim mayor earlier this year and then pushed him to break his word and run to retain control of Room 200, as well as pressuring David Chiu into being the swing vote to give Lee that job and secretly backing Jane Kim’s run for the Board of Supervisors. All are big supporters of the Central Subway project, despite all the experts calling it an wasteful boondoggle that will be the most expensive 1.7-mile piece of track ever built in this country.

But the opinion of fiscal and transportation policy experts matters little in a town that is once again being governed by shameless power brokers. Hell, Brown even uses his weekly column in the Chronicle to confirm his weekly breakfast date (every Monday at the St. Regis Hotel) with his “friend” and client Jack Baylis, a top executive at AECOM, the main contractor for the Central Subway, as well as the America’s Cup, Transbay Terminal, the rebuild of the city’s sewer system, and all the other most lucrative city contracts.

In turn, AECOM kicks down contracts and payouts to a network of political supporters that will ensure that the project gets built, such as Chinatown Community Development Center, which signed an $810,000 contract in December to support the Central Subway in unspecified ways right before CCDC and its director Gordon Chin provided crucial support for getting Lee into the Mayor’s Office, where he can ensure the Central Subway project remains on track.

Yes, it’s just that crass and obvious. And it isn’t even about politics. Hell, Baylis is a Republican from Los Angeles, despite his meddling in San Francisco’s political affairs by sponsoring the Alliance for Jobs and Sustainable Growth and other groups that will be doing independent expenditures on behalf of Lee this fall, trying to tell us that “it’s all about civility.”

No, it’s about money and it’s about power, straight up. The Central Subway is really more of a gravy train than a sensible transit project, but that’s just how business is being done at City Hall these days.

One of the people who has long criticized the project – noting how Chinatown would be served far better with surface transit options, at a fraction of the cost – is Tom Radulovich, executive director of Livable City and an elected BART board member. He was heartened to see so many more voices – from the editorials to a recent Civil Grand Jury report to internal audits in the San Francisco Municipal Transportation Agency, which will lose money operating the new system – echoing his concerns.

“There are more people who seem to be sharing my thoughts,” Radulovich said. “It would be good to have a civic debate on this.”

But he’s not confident that will happen, despite the fresh wave of concerns. “There’s a lot of stuff that looks like planning that has gone into justifying this,” he said. “When the political culture of City Hall and the planning culture come together, this is what you get.”

Full text of WSJ article:

Off the San Francisco Rails

Tony Bennett may have left his heart in San Francisco, but the politicians who contrived the city’s Chinatown subway project must have left their brains somewhere else. The subway is a case study in government incompetence and wasted taxpayer money.

P.S. The Obama Administration is all for it.

Former Mayor Willie Brown sold a half-cent sales tax hike to voters in 2003 to pay for the 1.7-mile line on the pretext that the subway would ease congestion on Chinatown’s crowded buses, but he was more interested in obtaining the political support of Chinatown’s power brokers. In 2003, the city estimated the line would cost $647 million, but the latest prediction is $1.6 billion, or nearly $100 million for each tenth of a mile.

Transportation experts say the subway’s design is seriously flawed and that improving the existing bus and light-rail service would make more sense. The subway misses connections with 25 of the 30 light-rail and bus lines that it crosses, and there’s no direct connection to the 104-mile Bay Area Rapid Transit line or to the ferry.

Commuters will have to travel eight stories underground to catch the train and walk nearly a quarter of a mile to connect to the Market Street light-rail lines—after riding the subway for only a half mile. Tom Rubin, the former treasurer-controller of Southern California Rapid Transit District, calculates that taking the bus would be five to 10 minutes faster along every segment.

The city’s metro system, which is already running $150 million operating deficits, isn’t likely to have the money to keep the subway running in any case. Last month the San Francisco Civil Grand Jury, a watchdog group, warned that the subway’s costs “could stretch the existing maintenance environment [of the metro system] to the breaking point” and will defer the purchase of a new communications system.

Alas, San Francisco will likely drag national taxpayer money into the bay too. The city has applied for a multiyear $942 million “full funding grant agreement” from the Federal Transit Administration (FTA) to cover 60% of its capital costs. In 1964 Congress created a back-door earmark program called “New Starts” to subsidize local transportation projects. The FTA rates and recommends projects for grants, and Congress usually rubber-stamps its recommendations.

In January 2010, Transportation Secretary Ray LaHood modified the grant criteria by adding environmental and communal benefits and minimizing cost-effectiveness. The change effectively means that any project can get federal funding as long as its sponsors claim they’re moving cars off the road.

“Measuring only cost and how fast a project can move the most people the greatest distance simply misses the boat,” Mr. LaHood wrote in January 2010 on his Fast Lane blog. “Look, everywhere I go, people tell me they want better transportation in their communities. They want the opportunity to leave their cars behind . . . And to enjoy clean, green neighborhoods. The old way of doing things just doesn’t value what people want.” We’re told Mr. LaHood is smarter than he sounds.

The FTA has given the Chinatown subway one of its highest project ratings, which virtually assures a full funding grant agreement. Once the city receives such an agreement, the feds are obligated to provide whatever funds they promise. The FTA won’t approve the agreements until the fall, so there’s still hope that someone wises up and nixes the project. Oh, and if Congress is looking for discretionary programs to cut, New Starts would be a good start.

You can’t trust Ethics

Jesse Hawthorne Ficks

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August 16, 2011

2

By Larry Bush

OPINION Proposition F, a measure on the November ballot, is supposed to clean up some provisions of the law that requires political consultants to register and make disclosures about their clients and their work. It was approved by all 11 supervisors.

But Prop. F has some serious problems. For starters, it grants authority to the Ethics Commission to make any other changes it wants in the law.

As the Voter Handbook says:

“A yes vote means: You also want to allow the City to change any of the campaign consultant ordinance’s requirements without further voter approval.”

Why should you oppose that? Because the Ethics Commission can’t be trusted.

The reason San Francisco has a law forcing political consultants to register and make disclosures is because the voters demanded one. City Hall fought against it every step of the way.

Former Supervisor Tom Ammiano introduced the measure in 1996, and it won board approval. Then-Mayor Willie Brown vetoed it. Ammiano rewrote the measure 1997 to meet Mayor Brown’s objections. Brown vetoed it again. And the supervisors who had voted for the law refused to vote for it again and overturn the veto.

So Ammiano and several other supervisors put the measure on the ballot. The political consultants raised a war chest to defeat it and spent more than $100,000 in direct mail, billboards and other voter contacts.

It passed with 61 percent of the vote.

What kind of clean up does Ethics plan now on the political consultant law? You can bet it won’t come down on the side of greater disclosure.

In 2009, two years ago, the Ethics Commission decided to write a clean up of the city lobbyist law. Just like they want to do with the political consultant law now.

And what happened with that law?

It changed one little aspect that didn’t get any real attention. It changed what is defined as a lobbyist — a person or entity who seeks to influence administrative or legislative decisions.

And what is the result?

Now the San Francisco Chamber of Commerce no longer has to file and disclose its lobbying. Neither does Lennar. Neither does the America’s Cup or Larry Ellison.

All those groups had to file under the old rules.

The bottom line is that a sleeping watchdog that can’t be trusted wants the right to change the laws governing political consultants — without any further oversight or public vote.

The former Ethics Commissioners who also are opposing this measure are Paul Melbostad, who served on the commission when the political consultants act was passed; Bob Dockendorff; Joe Julian; Bob Planthold; and Eileen Hansen, who just completed her term and was the only commissioner who voted against the pay-to-play rewrite.

I urge you to join them in opposing this measure.

Larry Bush is the publisher of Citireport.com, a City Hall watchdog.

Environmentalists: America’s Cup not green enough

Sasha Cuttler And Mary Magee

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August 11, 2011

9

A preliminary planning document for the America’s Cup doesn’t go far enough to protect San Francisco’s natural environment, a coalition of environmental organizations has said.

The Environmental Council — made up of a group of nonprofits including the Sierra Club, San Francisco Baykeeper, Turtle Island Restoration Network, the Dolphin Swimming and Boating Club, and others closely tracking planning for the America’s Cup — were gearing up to offer feedback to the San Francisco Planning Commission Aug. 11 on a hefty draft environmental impact review (DEIR) of the prestigious yachting event’s impacts on marine life, air quality, and parklands.

The draft EIR “does not go far enough to protect San Francisco’s air, water, and marine life,” said Teri Shore of the Turtle Island Restoration Network. She advocated for requiring vessels to use the cleanest possible fuels and to travel at slow speeds so as not to collide with dolphins, porpoises, seals, sea lions, or whales once outside the Golden Gate.

Ken Coren, Vice President of the Dolphin and Swimming Club, voiced concerns about the effects the race would have on swimming and recreational boating. “The bay would be sealed off — it would only be spectator viewing,” he said. Activities like swimming around Aquatic Park or entering the bay on rowboats “would be prevented if you were going to take the EIR as it stands today at its word.”

Jon Golinger, president of the Telegraph Hill Dwellers, said the report “dramatically underestimates the impact” to individual San Francisco neighborhoods.

http://www.youtube.com/watch?v=BngNbTCUcM8
Jon Golinger speaks at a press conference on the steps of City Hall. Video by Rebecca Bowe

Jennifer Clary, of San Francisco Tomorrow, said the groups’ concerns centered on three key areas: Impacts to the water, such as the potential for oil spills or degraded water quality; impacts that huge crowds would have on surrounding lands, especially in protected areas such as the Presidio; and neighborhood impacts. “You have already busy locations, and they’re going to packing more people in,” she said.

While they raised concerns, the nonprofit representatives also made it clear that they were not opposed to the America’s Cup, and only wanted to see the city strengthen environmental protections during the event. David Anderson, Conservation Committee Chair with the Golden Gate Audubon Society, noted that the world-famous regatta would result in a major economic boon. “Certainly the city can afford some mitigation to make it right,” he said.

We need a real question time, Mr. Mayor

Andrew Lam

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August 9, 2011

0

EDITORIAL Mayor Ed Lee and his supporters owe San Franciscans some answers to troubling questions that the reporting of local journalists from at least four different media outlets has been raising this summer. That work — by the Guardian, Bay Citizen, San Francisco Chronicle, and San Francisco Examiner — has painted a picture of a corrupt political machine, built largely with public funds, that is acting in naked self-interest to keep Lee in Room 200.

In short, what we’re seeing is a return to the bad old days of the patronage politics that was the hallmark of former Mayor Willie Brown — a key supporter of Lee — when downtown powerhouses from the San Francisco Chamber of Commerce to Pacific Gas & Electric called the shots in City Hall.

Lee needs to be honest about why he decided to run for office, something we saw no signs of during his Aug. 8 speech to journalists citing his supposed accomplishments as a reason for breaking his word. “I have been part of changing the way city government is run…Because of that change, I changed my mind,” Lee said. (For video of his remarks, see the SFBG.com Politics blog).

While it is true that City Hall has been less acrimonious since the departure of former Mayor Gavin Newsom — whose combative style and a solid progressive majority on the board led to some epic conflicts — it’s not like things have gotten any better for the average San Franciscan.

Today, with the progressive movement weakened by a stubborn recession and political betrayals, big business sets the agenda at City Hall more than ever. Whether it’s Twitter’s tax break shakedown, Oracle’s seizure of prime waterfront real estate for the America’s Cup, Parkmerced’s demolition of rent-controlled apartments, CPMC’s refusal to pay for its housing and hospital project impacts, or the relentless cutting of city services, corporations have been getting their way every single time.

Yet this very track record is cited by Lee as the reason why he broke his word and stayed in office. Both the flip-flop and its rationale should be a key campaign issues this year. But in order to have an honest public discussion about how business in being done under the dome, Lee needs to come clean about the role he’s been selected to play.

Now that he’s running for mayor, Lee must stop pretending that he’s not connected to the recruitment effort by his closest political allies. It’s illegal for him to be coordinating with the supposedly independent Progress for All group that has been waging the deceptive “Run, Ed, Run” campaign, and his blanket denials of knowing what was happening on his behalf just aren’t credible. He has allowed a rising tide of sleaze to envelop the Mayor’s Office.

Progress for All was coordinated by the same people who orchestrated Lee’s ascension to Mayor’s Office in December: Brown, Chinatown power broker Rose Pak, political consultant David Ho, and various figures associated with Chinatown Community Development Center, including its director, Gordon Chin, the leader of Progress for All.

These people are Lee’s political base, people that even he admits to being in regular communication with, people whose power derives from access to the mayor and whose organizations thrive on the millions of dollars in city contracts that Lee helps steer their way. In turn, they have been turning out droves of supporters (including many who rely on CCDC for housing and services) to help put him in office and keep him there.

What we’re seeing appears to be straight-forward political corruption, of the same type and involving many of the same players that we saw under Brown’s tenure as mayor, corruption that was aided and abetted at the time by Lee in his capacity as public works chief and later as city administrator.

Board President David Chiu, the swing vote for putting Lee in the Mayor’s Office in December (based on Lee’s pledge to be a “caretaker mayor” who wouldn’t run for a full term) was also a prime enabler of this coup, so there is some poetic justice in the fact that it turned on him and sabotaged his chances of becoming mayor.

It shows bad political judgment that Chiu and the other supervisors-turned-mayoral-candidates — Bevan Dufty and Michela Alioto-Pier — put Lee into office and naively ignored warnings from the Guardian, then-Sup. Chris Daly, and many others that the feel-good move was actually a corrupt power play.

Politics can be a blood sport, and we’re under no illusions that politicians are noble creatures. But the simple fact is that Lee broke trust with San Francisco, gained a huge political advantage in doing so, and he now faces an uphill battle in restoring his credibility. Because the new politics he brought to City Hall look a whole lot like the old politics that the progressive movement spent the last decade trying to counter.

Editorial: We need a real question time, Mr. Mayor

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August 9, 2011

11

Mayor Ed Lee and his supporters owe San Franciscans some answers to troubling questions that the reporting of local journalists from at least four different media outlets has been raising this summer. That work — by the Guardian, Bay Citizen, San Francisco Chronicle, and San Francisco Examiner — has painted a picture of an emerging political machine, built largely with public funds, that is acting in naked self-interest to keep Lee in Room 200.

In short, what we’re seeing is a return to the bad old days of the patronage politics that was the hallmark of former Mayor Willie Brown — a key supporter of Lee — when downtown powerhouses from the San Francisco Chamber of Commerce to Pacific Gas & Electric called the shots in City Hall.

Lee needs to be honest about why he decided to run for office, something we saw no signs of during his Aug. 8 speech to journalists citing his supposed accomplishments as a reason for breaking his word. “I have been part of changing the way city government is run…Because of that change, I changed my mind,” Lee said. (For video of his remarks, see the SFBG.com Politics blog).

While it is true that City Hall has been less acrimonious since the departure of former Mayor Gavin Newsom — whose combative style and a solid progressive majority on the board led to some epic conflicts — it’s not like things have gotten any better for the average San Franciscan.

Today, with the progressive movement weakened by a stubborn recession and political betrayals, big business sets the agenda at City Hall more than ever. Whether it’s Twitter’s tax break shakedown, Oracle’s seizure of prime waterfront real estate for the America’s Cup, Parkmerced’s demolition of rent-controlled apartments, CPMC’s refusal to pay for its housing and hospital project impacts, or the relentless cutting of city services, big corporations have been getting their way Virtually every single time without having to pay their fair share of taxes.

Yet this very track record is cited by Lee as the reason he broke his word and stayed in office. Both the flip-flop and its rationale should be a key campaign issues this year. But to have an honest public discussion about how business in being done under the dome, Lee needs to come clean about the role he’s been selected to play.

Now that he’s running for mayor, Lee must stop pretending that he’s not connected to the recruitment effort by his closest political allies. It’s illegal for him to be coordinating with the supposedly independent Progress for All group that has been waging the deceptive “Run, Ed, Run” campaign, and his blanket denials of knowing what was happening on his behalf just aren’t credible. He has allowed a rising tide of sleaze to envelop the Mayor’s Office.

Progress for All was coordinated by the same people who orchestrated Lee’s ascension to Mayor’s Office in December: Brown, Chinatown power broker Rose Pak, political consultant David Ho, and various figures associated with the Chinatown Community Development Center, including its director, Gordon Chin, the leader of Progress for All.

These people are Lee’s political base, people that even he admits to being in regular communication with, people whose power derives from access to the mayor and whose organizations thrive on the millions of dollars in city contracts that Lee helps steer their way. In turn, they have been turning out droves of supporters (including many who rely on the CCDC for housing and services) to help put him in office and keep him there.

What we’re seeing appears to be straight-forward political corruption, of the same type and involving many of the same players that we saw under Brown’s tenure as mayor, corruption that was aided and abetted at the time by Lee in his capacity as public works chief and later as city administrator.

Board President David Chiu, the swing vote for putting Lee in the Mayor’s Office in December (based on Lee’s pledge to be a “caretaker mayor” who wouldn’t run for a full term) was also a prime enabler of this coup, so there is some poetic justice in the fact that it turned on him and sabotaged his chances of becoming mayor.

It shows bad political judgment that Chiu and the other supervisors-turned-mayoral-candidates — Bevan Dufty and Michela Alioto-Pier — put Lee into office and naively ignored warnings from the Guardian, then-Sup. Chris Daly, and many others that the feel-good move was actually a corrupt power play.

Politics can be a blood sport, and we’re under no illusions that politicians are noble creatures. But the simple fact is that Lee broke trust with San Francisco, gained a huge political advantage in doing so, and as a result now faces an uphill battle in restoring his credibility. Because the new politics he brought to City Hall look a whole lot like the old politics that the progressive movement spent the last decade trying to counter.

Fall ballot gets stripped of progressive measures

Sasha Cuttler

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August 3, 2011

25

Fall ballot gets stripped of progressive measures

The San Francisco Tenants Union suffered a pair of disappointing setbacks in the last week – first when a referendum on the Parkmerced project narrowly failed to qualify for the fall ballot, then when progressive supervisors withdrew a proposed ballot measure to prevent demolition of existing rental housing – leaving the fall ballot without any progressive measures (unless one counts the sales tax measure that was unanimously approved this week by the Board of Supervisors).

Also dropped from the ballot this week was another progressive measure that would have prevented the Recreation and Park Department from entering into new commercial leases of parks and recreation centers, a measure written by the citizens group Take Back Our Parks to reverse RPD’s recent push to monetize more of its assets.

Yet unlike last week’s removal of a third measure placed on the ballot by at least four progressive supervisors – the Fair Shelter Initiative, written by the Coalition on Homelessness, which was unhappy that Sup. Jane Kim dropped her support under pressure from the Mayor’s Office – it was the sponsoring groups that asked the supervisors to remove the two measures this week.

Sponsors of the parks measure say it had some legal problems that would have complicated the campaign, particularly after an analysis by the City Attorney’s Office concluded that it could affect things like private party reservations and leases associated with the America’s Cup.

Ted Gullicksen of the San Francisco Tenants Union said his group concluded there were legal problems with the anti-demolition measure as well and that it wouldn’t affect the demolition of 1,500 housing units associated with the Board of Supervisors’ 6-5 vote to approve the massive Parkmerced project, which was the catalyst for the measure.

SFTU sponsored the signature-gathering campaign to do a referendum on that vote, but the Elections Department concluded on July 29 that of the 18,487 signatures that were turned in, just 12,917 were valid, falling short of the 14,336 they needed. Gullicksen said delays in qualifying the 56-page petition gave them just three weeks to gather signatures, and a freak mid-June rainstorm hurt that effort as well.

“We knew from the get-go that it was going to be a challenge,” he said. “It was very disappointing that we fell just short.”

But he said there was a silver lining: “It sent a message to the supervisors. David Chiu [the swing vote on the Parkmerced approval] called me the next day to say he’d make sure demolitions don’t become an epidemic.”

Sup. David Campos – who helped sponsor all three measures and even kept his name on the shelter measure after Sups. Eric Mar and Kim had removed theirs – told us, “I think it’s disappointing that there isn’t a measure on the ballot to excite the progressive base, but at the end of the day, we do have an exciting mayor’s race and races for sheriff and district attorney.”

Campos has endorsed John Avalos of mayor and Ross Mirkarimi for sheriff, but has not yet made an endorsement for DA.

One month to read a 1,600-page DEIR on the America’s Cup: Ready, set, go!

Sasha Cuttler And Mary Magee

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July 11, 2011

0

Members of the public will have a chance to offer feedback on the massive draft environmental impact report (DEIR) for the America’s Cup at the Planning Commision on August 11 — one month from the date of the DEIR release, July 11. Anyone interested in weighing in on far-reaching plans for the Northern Waterfront during the world-famous sailing matches in 2012, 2013, and beyond ought to download the report now and start diving in. To absorb the whole thing, you’d have to read 53 pages a day.

Representatives from the Port of San Francisco, the Office of Economic and Workforce Development, and America’s Cup Race Management gathered in San Francisco City Hall July 11 for a briefing on the landmark document. Race organizers are aiming to wrap up the environmental review process by the end of the year.

Iain Murray, CEO of America’s Cup Race Management, spoke about the history of the regatta, the sailing events planned around the globe from now until the 2013 match, and the challenges even the world’s most skilled sailors will encounter while learning to pilot the specialized America’s Cup vessels.

Brad Benson of the Port of San Francisco explained that Pier 27 would serve as a primary public viewing area during the event and a focal point for city activities during the match, complete with spectator vessels. He also noted that preparations for the race would involve dredging and sub-structure improvements at Piers 30-32, which would house cranes for lifting the giant boats in and out of the water.

Yet none of the speakers spoke directly about the findings of the DEIR.

“What we’d like to do is let the document speak for itself,” said Michael Martin, America’s Cup Project Director, after a reporter asked him to provide a summary. Martin also noted that a number of locations were being studied as areas where members of the public could congregate during the races, including Crissy Field, Aquatic Park, and Fort Mason. Alcatraz would likely be used for private events, he added.

The DEIR is a hefty document which we’ve barely begun to peek at. It encompasses plans not only for the America’s Cup, but a two-story, 91,000-square foot cruise terminal at Pier 27 that would serve ships carrying as many as 4,000 passengers. (The green shoreside power hookup there, as we reported last week, will be temporarily disabled, negatively impacting air quality.)

If the proposal is approved as written, the core and shell of the cruise terminal would be built to house the America’s Cup operations as part of the America’s Cup Village at Piers 27-29. After the 2013 events, the rest of the facility would be completed.

Meanwhile, a coalition of environmental organizations that have been involved in the planning process released a statement expressing “guarded optimism” about the DEIR. Made up of representatives from San Francisco Baykeeper, San Francisco Tomorrow, and the Turtle Island Restoration Network, the groups signalled that they would be keeping a close eye on issues such as traffic congestion, the impacts of crowding near sensitive habitats in the Presidio and other viewing areas, carbon-reduction plans, and impacts to Bay water quality and marine life.

“Our organizations are committed to a green and carbon negative event and this is just the first step in ensuring that we get that,” said Teri Shore, Program Director of Turtle Island Restoration Network. “We need to have a thorough understanding of the impacts of the event, how they will be mitigated, and who will pay.”

During America’s Cup, clean-air program takes a step backward

Sasha Cuttler And Mary Magee

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July 8, 2011

0

During America’s Cup, clean-air program takes a step backward

A $5 million clean-air program along the San Francisco waterfront will be temporarily halted to accommodate the America’s Cup, prompting criticism from environmental advocates.

In October of 2010, representatives from the Port of San Francisco joined former Mayor Gavin Newsom and Princess Cruises to unveil a shoreside power installation at San Francisco’s Pier 27 for cruise ships transporting tourists to the city. The fourth system of its kind ever installed, the shoreside power hookup was touted as a way to improve local air quality by supplying passenger vessels with municipal power, making it unecessary for ships to run large diesel generators while at dock.

The U.S. Environmental Protection Agency provided $1 million to finance the emissions-reduction project. Additional financing came from the San Francisco Public Utilities Commission, the Bay Area Air Quality Management District, and Port capital funds.

Modern cruise ships use between 6 and 12 megawatts of power. The Port estimated that 19.7 tons of carbon dioxide would be reduced for every 10-hour ship call, while harmful air pollutants such as particulate matter, nitrogen oxides, and sulfur oxides would be cleared while diesel generators were shut down. The shoreside power was fed by San Francisco’s gravity-based Hetch Hetchy Water System, a relatively green energy source.

The environmental gains from shoreside power could be temporarily lost, however, when America’s Cup racing teams take over Pier 27 in 2012 and 2013 during the high-profile sailing events.

“With just one stroke of a pen, it’s gone,” said Teri Shore, program director at the Turtle Island Restoration Network (TIRN), based in Marin County. While the shoreside power hookup is disabled, “The ships will be coming in and parking, and running their diesel engines” at other waterfront piers.

The Port had already anticipated temporarily halting the shoreside power for a year during construction of a Pier 27 cruise terminal, Brad Benson of the Port of San Francisco told the Guardian. “Assuming there were no America’s Cup, it would already not be in operation … for approximately one year,” he explained. After a year of construction that will mark the first phase of the cruise terminal project, the America’s Cup will move onto the site, he said. “As a result of the America’s Cup, shoreside power is not going to be available for one year.”

By 2014, when cruise ships will be required by state law to have the ability to plug in at the shore rather than run polluting generators, the shoreside power will be in operation again, Benson added. The America’s Cup Event Authority — the primary race organizing team — has agreed to finance a $2 million relocation cost.

Shore, who is working with a coalition of environmental advocates that’s closely watching America’s Cup plans, said she hopes to see the city find some way to offset the impacts from the lost air-quality improvements. As long as ships’ generators are running, “there’s an exposure level,” she pointed out.

Benson said the port is starting to look at how it could offset the impacts, saying there might be ways of reducing carbon outputs during the event in order to make up for the lost emissions reductions. “I can’t tell you whether we could achieve the same level of emissions reductions that shoreside power would provide,” he said. “It’s very effective.”

On Monday, July 11, the city is expected to release a draft environmental impact review for the America’s Cup project.

Smooth sailing for developers

Andrew Lam

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June 28, 2011

3

rebeccab@sfbg.com

It’s a mad dash at San Francisco City Hall to put all the pieces together in preparation for the America’s Cup, the prestigious regatta that will culminate in the summer of 2013 along the city’s northern waterfront. But once that spectacle is over, the biggest impact of the event will be a massive, lasting, and quite lucrative transformation of the city’s waterfront by a few powerful players, a deal that has been modified significantly since it was approved by the Board of Supervisors.

As negotiations on the fine terms of the development agreements continue to unfold, the future landscape of a huge section of the San Francisco waterfront is in play. If the America’s Cup Event Authority (ACEA) — the race management team controlled by billionaire Oracle CEO Larry Ellison — aims high in its investments into port-owned infrastructure, it has the potential to lock-in leases and long-term development rights for up to nine piers for 66 years, with properties ranging from as far south as Pier 80 at Islais Creek to as far north as Pier 29, home of the popular dinner theater Teatro ZinZanni.

The possibility of securing long-term leases and development rights to Piers 19, 23, and 29 — provided race organizers sink more money into infrastructure improvements — was added to the deal in the last two weeks of 2010, just before San Francisco won its bid to host the world-famous sailing match. The possibility of obtaining rights to portions of two additional piers, 27 and 80, were also added at the last minute. Race organizers and city officials negotiated the final modifications after the Board of Supervisors signed off on the Host City Agreement on Dec. 14, 2010.

Not all board members knew that three additional city-owned piers were being added as possible extensions of the land deal, and those properties weren’t mentioned in any of the earlier documents that went through a public review process in the months leading up to the approval of the agreement. Yet Board President David Chiu was evidently appraised of how the last-minute negotiations were unfolding and he quietly offered his support.

On Dec. 22, 2010, Chiu sent a letter to Russell Coutts, CEO of Oracle Racing, the team that won the 33rd America’s Cup and is an integral player in laying plans for the 34th. “I understand that Mayor Newsom and the city’s team have been working directly with you since the board’s approval of the Host City Agreement to make the necessary adjustments and clarifications to the agreement to ensure it meets your needs. I am aware of these changes and support them,” Chiu wrote in a letter that was not shared with his fellow supervisors.

Quoting from a section of the agreement that explains that ACEA is ensured long-term development opportunities in exchange for funding improvements and upgrades, Chiu’s letter went on, “This section specifically applies to … Piers 30-32 and Seawall Lot 330, as well as Piers 26 and 28, and if mutually agreeable could apply to Piers 19, 23, and 29. To obtain the community’s support and agreement for future development rights to piers on the northern waterfront, you will need to invest in a strong partnership with the community … I am prepared to help facilitate that relationship.”

Former Board President and Democratic County Central Committee Chair Aaron Peskin, who has closely followed the America’s Cup land deal and has for decades been actively involved in land-use issues along the northern waterfront, interpreted Chiu’s letter to Coutts as a backroom deal.

“There is no question that the president of the board, without the authorization of the majority of the Board of Supervisors, went behind closed doors, out of view of the public, and committed to [long-term development] for three piers,” Peskin said, highlighting the fact that no other supervisors were copied on Chiu’s letter. “That he has done this unilaterally, without the consent of a board’s vote at a board meeting, is not good governance. If there’s one body that’s supposed to do all of its work for the public, it’s the Board of Supervisors.”

Chiu defended the letter by emphasizing the part that asked for a partnership with the community. “This was all within the broader framework of the Host City Agreement that we signed in the middle of December,” he told the Guardian when presented with the letter during an interview and asked to comment. “They had questions about, well, can we develop on these other piers? And what I said was, ‘Well, as I think the language here specifically says if mutually agreed upon … you could possibly do this.’ And we specifically said you’ll need to invest in a strong partnership with the community.”

He added that specific development plans would still have to be approved by the Board of Supervisors. Proposals for each parcel will be made in separate Disposition and Development Agreements, subject to board approval.

On hearing Chiu’s response, Peskin was still critical of the lack of transparency in this deal: “My position is, if it walks like a duck and quacks like a duck, it’s a duck.”

Meanwhile, an analysis prepared by Budget Analyst Harvey Rose in mid-March suggests that the final amendments did reflect new commitments for the city that go well beyond what was discussed publicly. “No city approval of the Event Authority’s selection of Pier 29 for a long-term lease is required in the agreement, as modified by the Mayor’s Office and other city officials,” the Budget Analyst’s report notes. “This entire provision … was not included in the agreement of Dec. 14, 2010 as previously approved by the Board of Supervisors.”

Brad Benson, special projects manager at the Port of San Francisco, explained the Pier 29 provision slightly differently. “The city would have to be acting in its reasonable discretion to say no,” he said, emphasizing that ACEA would have to invest well above the $55 million threshold to obtain rights to Pier 29.

At a time when a new era of civility is being hailed at City Hall, two elements of the city family are essentially agreeing to disagree on the broader question of whether the 11th-hour modifications to the deal resulted in a greater hit to city coffers than supervisors approved. While Rose stated in public hearings that the modifications would deal a greater blow to city revenues, City Attorney Dennis Herrera, a mayoral candidate, has stood with the Office of Economic and Workforce Development in his assessment that the changes did not significantly exceed the scope of what was approved by the board. Fred Brousseau of the Budget & Legislative Analyst chalked it up to “a difference in opinion,” reflecting “the auditor’s standard for materiality versus the city attorney’s.”

Legalese aside, it’s clear that the race organizers stand to gain some highly desirable waterfront property in exchange for investing in the piers and bringing an event to the city that is expected to generate substantial economic activity. If ACEA invests a minimum threshold of $55 million for infrastructure improvements, it can likely secure long-term development rights for Piers 30-32, a 13-acre waterfront parking lot where Red’s Java House is located, plus win the title to Seawall Lot 330, a two-acre triangular parcel along the Embarcadero that has been discussed as the site of a future luxury condo tower that has already cleared city approval for that use.

A high-rise next door to Seawall Lot 330, called the Watermark, currently has condos going for $1.2 million apiece on average, according to a calculation of online listings. Under the America’s Cup deal approved by the board, the port would have received 1 percent of each condo sale plus 15 percent of transfers or subleases made by ACEA. “Such required payments … have been entirely removed from the agreement as modified by the Mayor’s Office and other city officials,” the budget analyst’s report points out.

Waterfront real estate in San Francisco, always expensive, has recently soared to even higher values. According to a June 22 article in the San Francisco Business Times, Farallon Capital Management recently put up for sale a 3.36-acre parcel in Mission Bay zoned for life science and tech office space — and it’s expected to fetch around $90 million. This past April, BRE Properties shelled out $41.4 million for two Mission Bay residential development sites entitled for 360 residential units, and last year, Salesforce.com acquired a 14-acre Mission Bay property for $278 million, or $140 per buildable square foot.

By comparison, the $55 million that ACEA must invest to be granted a two-acre waterfront parcel on the Embarcadero, plus long-term rights to lease and develop an additional 13 acres across the street, sounds like a good deal. “We’re using an appraisal approach. It’s not going to ridiculously undervalue the property,” Benson said. Under changes made to the deal after the board signed off, base rent for Piers 30-32 will be $4 per square foot of building area. Rent for all other possible piers will be $6 per square foot of building area.

The ability to transfer city-owned Seawall Lot 330 outright to the ACEA is predicated on the approval by the State Lands Commission to strip that property of constraints placing it, like all coastal properties, in the public trust. Lt. Gov. Gavin Newsom, who pushed the deal as mayor, is one of the three members of that commission.

Under a provision in the agreement, the ACEA’s $55 million investment will be applied toward rent credits on city-owned parcels — and depending on how much the company puts in, that credit balance can increase by 11 percent every year. Benson described this as a typical arrangement, saying, “It’s not out of the line with other rent-credit deals the port has done.”

Two former mayoral advisors from OEWD, Kyri McClellan and Alexandra Lonne, have since gone to work for the America’s Cup Organizing Committee (ACOC), a nonprofit entity working in tandem with the city and the ACEA to secure financial commitments for hosting the race. Newsom has also been named ambassador at large for the America’s Cup effort.

Meanwhile, an OEWD budget proposal includes $819,000 in staffing costs for four management-level positions relating to America’s Cup planning. A refund is expected in the form of $12 million that the ACOC has committed to fundraise by the end of 2011, with an ultimate target of $32 million by 2013. So far, ACOC has only raised $2 million, but plans to seek higher donations once it gains tax-exempt status. “I think the $2 million is a really good start,” said Mike Martin, who transferred in February from the San Francisco Public Utilities Commission to OEWD to direct the America’s Cup effort. “They’re building a foundation for an effective pitch.”

For now, city departments are scrambling toward completing the environmental review process for the infrastructure improvements, expected to be complete sometime in November. “It’s incredibly compressed,” Martin said. “There’s a lot to be done in a very short time.”

Peskin, for his part, seemed be keeping a watchful eye on the unfolding America’s Cup plans. “What we, the citizens of San Francisco, have to watch out for is that we’re not being taken advantage of,” he said. “We’ve got to be vigilant that we don’t get taken to the cleaners.”

BYO Flair: A guide to this weekend’s festival explosion

Andrew Lam

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June 17, 2011

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BYO Flair: A guide to this weekend’s festival explosion

If there is one thing I know about festivals it is this: the gear you pack can leave you hydrated, hip and happy — or break you down to a sunburned, schlubby hunk of bad vibes. (It’s true – shoddy preparation for Reggae on the River 2006 left me stranded in the psych tent with disoriented girlfriend during the Ziggy and Damian Marley concert. Clearly, a hipper fedora would have solved everything.)

This weekend plays host to a freakishly large share of summer festivals, so consider this your guide to happy cavorting in the sun. Cups, caps, frocks, and foods: here, friends, are our picks for best festie flair.

Sierra Nevada World Music Festival

The perfect weekend campout for those that can’t handle the crushing crowds of the more commercial festivals this summer. Even the little things (children) will appreciate the open-minded approach to beautiful noise here.

Bring: Consider SNWMF a three-day immersion program in getting loose. Translation: you need costumes. If you’re heading up from San Francisco, we’ve got the perfect sartorial layover for you. Sebastopol’s Funk & Flash vintage store is far enough removed from the big city that its stock hasn’t been picked to all hell by the club kid set, so festie-bound you can benefit from its racks of flowery skirts, and tons of sparkle. Go, do you!

Fri/17-Sun/19, $60-150

Boonville Fairgrounds

CA-128, Boonville

www.snwmf.com

Juneteenth Festival and Parade

The website proclaims this celebration of African American heritage to be the largest gathering of blacks in Northern California, but it remains to be seen whether you’ll fixate on the cultural signifcance while attending the event itself: with an impressive classic car show and three-on-three basketball tournament, all the historical reflection might have to wait until after the festival.

Bring: No brainer accessory: a hat from Hats of the Fillmore, an independent business that’s been holding it down on Fillmore’s main drag for years. High quality at surprisingly low prices, you can don one of these lids to fit in perfectly with the jazzy milieu of SF’s traditionally black neighborhood.

Sat/18 11 a.m.-7 p.m., free

Fillmore and Geary, SF

www.sfjuneteenth.org

Alameda Sailing Festival

Hey Muffy, take a break from hating on the impending America’s Cup to catch a day of boating buoyancy. The Encinal Sailing Foundation will be providing turns on the high seas for a “nominal” fee, and there will be seminars on “pilates for sailors,” boating to Mexico, and how to get your captain’s license. Afterwards, we know some great places to get drunk in Alameda!

Bring: This really goes for every fest on the list, but possibly the most important piece of flair is a fun, functional backpack to hold your water (flask), sunscreen, cell phone, and snacks. We love the Brooklyn Circus’ BKc satchels – but for the moment you’ve gotta special order them from New York. That’s fine, this ain’t the last weekend of the summer! The store’s preppy style (without the snooty WASP-y supply chain behind it) would be divine if you’re looking to drop some dough on a nice sailing fest outfit.

Sat/18 10 a.m.-8 p.m., free

Encinal Yacht Club

1251 Pacific Marina, Alameda

www.summersailstice.com

Bicycle Music Festival

You read our profile on Fossil Fool, so you know all about the current trend towards bike-fueled culture fun. According to all the volunteers that have been standing near Mona Caron’s bike mural behind the Church Street Safeway for the past few days, this fest will be the perfect spot to enjoy the zeitgeist. Saddle up for awesome tunes, and community-building bike rides between concert sites.

Bring: Hedgehog mug from Gravel and Gold so you can (chicly, adorably) reap the benefits of the fest’s pedal-powered smoothie maker. It also comes in rabbit, fyi. The calories you consume in said smoothies work doubletime — once you’re done drinking, take your turn powering the generator for the drinks or one of the music stages yourself.

Sat/18 noon-11:25 p.m., free

Various locations, SF

www.bicyclemusicfestival.com

Berry Festival

You know this sun isn’t going to last past 4th of July, so now is the perfect time to up your antioxidant intake and arm the old immune system against “summer” colds. CUESA and the Ferry Building farmers market is holding this day of loving for berry season – sample the treats available in the market stalls and let chef Daniel Clayton of Nibblers Eatery and Wine Bar show you how to whip up some healthy, hearty grub with the juicy little devils.

Bring: a nice navy sweatshirt from Mollusk for the Bay breezes and inevitable tayberry stains.

Sat/18 11 a.m.-1 p.m., free

Ferry Building, SF

www.cuesa.org

California Big Time Indian Gathering

The Ohlones are hosting their first gathering of Native peoples in their ancestral lands in two centuries. Come to learn more about real SF locals through dance, rituals, and craft exhibitions.

Bring: Mocs that slip off easy – you’re not gonna want a layer of separations between the well-manicured lawns of Yerba Buena and your soles.

Sat/18 noon-11 p.m., free

Yerba Buena Gardens

Howard between Second and Third St., SF

www.worldartswest.org

North Beach Festival

Sure, the neighborhood street fests all start to look the same after awhile. But there are good parts of that same: family-friendly musical acts, artery-busting festie food, and an excuse to run amok in the streets. The North Beach incarnation has been going for 56 years, and manages to sneak a couple unique facets into the standard cruise-shop-eat formula SF has perfected.

Bring: your kitty cat companion for the yearly St. Francis of Assisi animal blessings. Also, a flirty, locally made frock from NooWorks is totally Maria from West Side Story – perfectly for the neo-Catholic-in-the-summertime vibe you’ll be channeling.

Sat/18-Sun/19 10 a.m.-6 p.m., free

Washington Square Park

Union and Columbus, SF

www.northbeachchamber.com

Northern California Pirate Festival

Never underestimate the amount of people willing to drop serious time and dime on dressing up in period costumes. You’ve seen the Renaissance fairs and the Dickens Christmas Fair – now it’s time to peep the pirates. Two very full days of pirate entertainers and replica boats (not to mention squadrons of pirate clothing vendor booths) await you if you be brave enough to cross the seas to Vallejo.

Bring: Your 826 Valencia designer spyglass, for scurvy-watching of course.

Sat/18-Sun/19 10 a.m.-6 p.m., free

Vallejo Waterfront

Mare Island Way (near the ferry terminal), Vallejo

www.norcalpiratefestival.com

Picklewater Free Circus Festival

As we mentioned in last year’s profile of our favorite free circus troupe, Circus Bella, nothing quite highlights the magic (and eccentricity) of this city quite like catching a high-flying aerial act smack dab in the heart of downtown. Picklewater is taking over Union Square for the third year in a row this weekend, and we suggest you head down — if only to catch the amazed gaze of the throngs of tourists that’ll be on hand to remind you that yes, your city is freakin’ amazing.

Bring: Your medical marijuana card, and attending accoutrements.

Sun/19 2-4 p.m., free

Union Square

Post and Powell, SF

www.jewelssf.org

Sharon Jones and the Dap Kings at the Stern Grove Festival

The 74th season of this green glade’s free concert series kicks off with a killer show from the queen of throwback soul.

Bring: The Stern Grove scene struts more with its picnic spread than by any accessory or fly outfit. A retro basket (check Goodwill, people are always ditching picnic baskets) will be a useful score, and in terms of snack to make (they must be homemade!), peep our favorite new vegan cooking blog, The Vegan Stoner. It’s perfect, even if you had to self-medicate your hangover before you started prepping for the journey out to the Sunset.

Feat. Ben L’Oncle Soul

Sun/19 2 p.m., free

Stern Grove

19th Ave. and Sloat, SF

www.sterngrove.org

Mission Street mural unveiling

But why spend all your time at the big events? Artist Aaron Lawrence is holding an al fresco event of his own – pulling the dropcloth off the work he and muralist Rocky Villanueva did on a new apartment building on Mission. He’s making a party of it, so get there early if you want to get down on the free burritos provided.

Bring: Tapatio, tall can Tecate. Bring two cans, share them.

Sun/19 2-5:30 p.m., free

Mission between 18th and 19th St., SF

Facebook: Sunday Mural Reveal Party

Behind the all-smiles budget

Jesse Hawthorne Ficks

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June 7, 2011

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news@sfbg.com

When Mayor Ed Lee released his 2011-12 budget proposal June 1, all was sweetness and light at City Hall.

The mayor delivered the document in person, to the supervisors, in the board chambers. Sup. Carmen Chu, chair of the Budget Committee, was standing to the mayor’s right. Board President David Chiu was to his left. There was none of the imperious attitude we’d come to expect in the Gavin Newsom era — and little of the typical hostility from the board.

As Sup. David Campos, who was elected in November 2008, remarked afterward: “It’s the first time since I’ve been elected that the mayor has taken the time to come to chambers. It’s reflective of how this has been a lot more of an inclusionary process.”

Lee went even further. “This is a pretty happy time,” he said. “There are no layoffs, and instead of closing libraries we’ll be opening them.” That earned him an ovation from assembled city leaders, including mayoral candidates City Attorney Dennis Herrera and Assessor-Recorder Phil Ting along with District Attorney George Gascón. “I think this budget represents a lot of hope.”

It’s true that this year’s cuts won’t be as bad as the cuts over the past five years. It’s also true that the pain is spread a bit more — the police and fire departments, which Newsom, always the ambitious politician, wouldn’t touch, are taking their share of cuts.

But before everybody stands up and holds hands and sings “Kumbaya,” there’s some important perspective that’s missing here.

Over the past half-decade, San Francisco has cut roughly $1 billion out of General Fund spending. The Department of Public Health has eliminated three- quarters of the acute mental health beds. Six homeless resource centers have closed. The waiting list for a homeless family seeking shelter is between six and nine months. Muni service has been reduced and fares have been raised. Recreation centers have been closed. Library hours have been reduced.

In other words, services for the poor and middle class have been slashed below acceptable levels, year after year — and Mayor Lee’s budget doesn’t even begin to restore any of those cuts.

“We’re not ready yet to restore old cuts,” Lee told the Guardian in a June 2 interview. “It was enough for us to accomplish a pretty steady course and keep as much. Particularly with the critical nonprofits that provide services to seniors and youth and homeless shelters, we kept them as close as we could to what last year’s funding was.”

But the current level of funding is woefully inadequate. As Debbi Lerman, administrator of the Human Services Network, noted, the people who work in the nonprofits Lee was talking about haven’t had a pay raise in four years — even though the cost of living continues to rise. “Our costs have gone up with cost of inflation,” she noted.

She said the cuts over the past few years have deeply eroded services for children, homeless people, substance abuse programs, and others. “There have been significant cuts to every area of health and human services.”

And in a city with 14 billionaires and thousands more very wealthy people, Lee’s budget is distinctly lacking in significant new ways to find revenue.

THE GOOD NEWS

Just about everyone agrees that the budget process this year has been far better than anything anyone experienced under Newsom. “He [Mayor Lee] listened to everybody,” Lerman said. “That doesn’t mean they fixed everything. Mayor Lee fixed as much as he could.”

At his press conference announcing the release of the budget, Lee thanked Police Chief Greg Suhr for having already made significant cuts through management restructuring and for considering an additional proposed cut of $20 million.

“We want to thank you for that great sacrifice,” Lee said, addressing Suhr, who sat in front row of public benches, dressed in uniform. Lee next acknowledged that adequate funding for social services also helps public safety. “Without those services, officers on the street would have a harder job,” he said.

Lee also praised the departments of Public Health and Human Services for helping to identify $39 million in federal dollars and $16 million in state dollars, to help keep services open and the city safer.

Lee noted that San Francisco no longer has a one-year budget process and has just released its first five-year financial plan as part of its decision to go in five-year planning cycles.

“To address this, I’ve asked for shared sacrifice, ” Lee continued, adding that he recently released his long-awaited pension reform charter amendment, emphasizing that it was built through a consensus and collaborative-based approach.

Lee also said he would consider asking voters to approve what he called “a recovery sales tax” in November if Gov. Jerry Brown is unable to extend the state’s sales tax. That would bring in $60 million — but it is only on the table as a way to backfill further state budget cuts.

Lee observed that San Francisco is growing, the economy is looking brighter, and unemployment is down from more than 10 percent last January to 8.5 percent today. He plugged the America’s Cup, the city’s local hire legislation, the Department of Public Works’ apprenticeship programs, and tourism, both in terms of earmarking funding in the budget for these programs and their potential to boost city revenues.

He said his budget proposed $308 million in infrastructure investments that include enhanced disability access, rebuilding jails, and energy efficiency, and is proposing a $248 million General Obligation bond for the November ballot to reduce the street repair backlog.

“We will get these streets repaired,” he promised.

“This submission of a budget is not an end at all, it’s the beginning of the process,” he continued, going on to recognize Chu for her work getting the process rolling and thanking Budget Analyst Harvey Rose in advance. “I do know his cooperation is critical.”

And he concluded by thanking each of the supervisors. “I will continue enjoying working with you — we need to keep the city family tight and together.”

The sentiment was welcomed by supervisors. “As he said, this is the beginning of the process, and it’s an important and symbolic step” Campos said. “The budget shows that a lot of good programs have been saved. But there is still work to do.

“There are still gaps in the safety network,” he added, singling out cuts to violence-prevention programs. “It’s my hope they will be restored.”

THE BAD NEWS

But even if the cuts for this year are restored, the city budget is nowhere near where it ought to be. “We still had to make cuts,” Lee acknowledged.

“We did consider very seriously a whole host of revenue ideas that we had,” he said. “They were not off the agenda at all.” At the same time, he noted that state law requires a two-thirds vote for new taxes (although that threshold drops to 50 percent in presidential election years). “We decided that it’s not that they were bad ideas, but that we wouldn’t be able to sell them at this time.”

Lee praised some of the revenue ideas that have been suggested in the past year, including the alcoholic beverage fee proposal by Sup. John Avalos, which Lee called “a pretty good idea.” He said that “a year or two from now” an additional sales tax and a parcel tax (for the police or for schools and open space) might be on the agenda.

The city now has a multiyear budget process and projections are supposed to go beyond a single year. But what’s missing — and what nobody is talking about — is a long-term plan to restore critical city services to a sustainable level. That means talking — now — about tax proposals for 2012 and beyond and including those revenue streams in long-term budget planning.

Because the city parks, the public health system, the libraries, the schools, affordable housing programs, and the social safety net are in terrible condition today, the result of year after year of all-cuts budgets. And while the supervisors and the mayor wrangle over the final details, and advocates try to win back a few dollars here and a few dollars there, it’s important to recognize that this budget does nothing to fix the damage.

“We’re about $10 million short of what we need right now to keep service providers at current levels,” noted Jennifer Freidenbach, who runs the Coalition on Homelessness. “But we also need to restore the health and human services system that was slaughtered under Gavin Newsom.”

Super yachts are hard to move

Sasha Cuttler And Mary Magee

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May 4, 2011

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The Guardian spotted a colossal sailboat mast getting wheeled down Illinois Street yesterday, as it was being transported from a warehouse on Pier 80 to SF Boat Works, a boat yard beside The Ramp restaurant on Terry Francois Boulevard.

It was quite a job – the mast was more than 100 feet in length, encased in protective material, and set up on metal boxes with casters for transport. Instead of being loaded on a big rig, it was simply secured to the back of a pickup truck and towed down Illinois Street, with a team of about half a dozen guys running alongside to make sure it didn’t fishtail into any parked cars. They didn’t use flags or lights or anything, but an SUV followed from behind. Traffic was stopped coming from either direction, but they managed to get it out of the gate at Pier 80 and into the gate at SF Boatworks without any mishaps. It was quite a site to behold.

Pier 80 will serve as the base for the BMW Oracle racing team during the 34th America’s Cup. Billionaire Larry Ellison’s super yacht, the USA 17 — the winning boat in the last America’s Cup off the coast of Spain — is being stored at Pier 80, according to news reports. So we naturally assumed that this mast was from that world-famous sailing vessel. When we asked one of the movers if this mast was from the USA 17, they confirmed that it was. But then another member of the moving crew gave a different answer, saying this had nothing to do with the America’s Cup.

It seems that it may have been a mast from a different super yacht, the Cheyenne, which was previously named the Play Station. That boat once belonged to the late Steve Fosset, who, in addition to being a sailor, was the first person to fly solo around the world in a hot-air balloon. The Cheyenne was sold to adventurer Chris Welsh, who announced in Los Angeles last month along with billionaire Sir Richard Branson that they will co-pilot a Virgin Oceanic submarine expedition to the greatest depths of the ocean.

The Cheyenne — which recently sailed from San Francisco to Newport Beach — will serve as a “mother ship” for the submarine expedition, and won’t be used for competitive sailing anymore. We’ve contacted the America’s Cup Event Authority, Virgin Oceanic and SF Boatworks to try to get some clarity on whether the mast we saw getting towed along the waterfront belonged to the Cheyenne or the USA 17, but haven’t heard back from anyone yet.

The Virgin Oceanic submarine is expected to descend later this year into the Mariana Trench in the Pacific, a journey that will take the explorers deeper than anyone else has ever gone.

Meanwhile, it seems that when the America’s Cup comes to the city, San Franciscans probably won’t get the chance to see the USA 17 sail on the bay, even though it is being stored here. “The trimaran may not sail again,” noted a February press release from Oracle Racing. “Oracle Racing’s focus is on the next Cup.”

**UPDATE** No sooner had we posted this than we received a call from Ruby Esparrago at SF Boat Works, who said, “Yes, that was the mast for the boat from the America’s Cup.” But then we got an email from someone from Virgin Oceanic who said it was theirs.

Earth Day in City Hall … on Wells Fargo’s dime

Sasha Cuttler And Mary Magee

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April 26, 2011

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Who was lucky enough to get treated to Mayor Ed Lee’s Earth Day Breakfast in City Hall, with the city’s top politicos and a smattering of high-profile San Franciscans? After noticing that the Board of Supervisors had approved a grant of $12,000 from Wells Fargo a few weeks ago to sponsor the event, the Guardian contacted the Mayor’s Office to ask for the guest list. The response came from the city’s Department of the Environment, which accepted the donation and organized the affair.

The 472-person invite list (we don’t know how many actually attended) included prominent figures such as Sens. Barbara Boxer and Dianne Feinstein, Rep. Nancy Pelosi, billionaire investor Warren Hellman, and former San Francisco Mayor Willie Brown. All 11 members of the Board of Supervisors were invited, too, as were mayoral hopefuls City Attorney Dennis Herrera, Assessor-Recorder Phil Ting, and state Sen. Leland Yee.

Invitations were extended to some truly green organizations, too, such as Green for All, Save the Bay, Rainforest Action Network, the Ella Baker Center for Human Rights, the Sierra Club, the Apollo Alliance, Greenaction, and others.

And many seats were reserved for the corporate sector. A total of nine representatives of Pacific Gas & Electric Co. were on the list. There were seven from Cisco, several from consulting and design firm CH2MHill, and a couple representatives from Skidmore, Owings & Merrill — the firm that’s doing the Parkmerced overhaul and which was tapped to envision waterfront venues for the America’s Cup.

Seven representatives — including the CEO — were invited from Recology, which is in the midst of a debate over its high-stakes, $275 million no-bid garbage contract with the city.

According to Mark Westlund of the Department of the Environment, only half of the Wells Fargo grant went toward the mayor’s Earth Day Breakfast, “the remainder to a series of community events held in the Department’s EcoCenter lobby.” The other sponsors included Blue Shield of California ($2,000); CH2MHill; Skidmore, Owings & Merrill; United Airlines; Environmental Science Associates ($4,000); Levi Strauss & Co.; Cisco ($6,000) and Starbucks — which provided BPA-free travel mugs (double green points!).

It’s nice that San Francisco taxpayers didn’t have to shell out the $18,000 for all these people to celebrate Earth Day together. But at an event such as this, with so many millions of dollars in city contracts and major development projects flying around (not to mention the half a dozen or so people in need of campaign contributions), you can bet they weren’t all talking to one another about saving the planet.

Editor’s notes

Andrew Lam

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April 19, 2011

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tredmond@sfbg.com

You lose a lot on the left. We all get used to it; we’re fighting against a rich, entrenched power structure and the rules of the game are rigged against us. For people in the labor movement, it’s been a particularly bad year; all over the country, politicians are looking for ways to undermine collective bargaining rights.

So it’s nice to win one every now and then — and it’s nice to be able to say that labor, progressive labor, just won a major victory in San Francisco. But it’s no surprise that the San Francisco Chronicle got the story wrong.

For several years now, the owners of the Fairmont Hotel have wanted to tear down a tower built in the 1960s, eliminate 226 hotel rooms, and build about 160 luxury condos instead. The hotel workers union, not surprisingly, worried about a loss of jobs; condo owners don’t use housekeeping. But it’s a larger issue than that: people who buy hotel condos don’t live there much. Most of the rooms that have been converted nationwide become pieds à terre for very wealthy people. They spend a few nights a year in their units; the rest of the time, the places are empty. Nobody there to shop, eat, or get entertained in SF; nobody spending money here.

So it’s a nice little bit of class warfare: The city loses hotel and restaurant jobs — and part of the city’s tourist infrastructure — so that the owners (including a Saudi prince and Oakland A’s owner Lou Wolff) can make a fast windfall profit. (Think $1 million to $2 million each for 160 condos and you get the picture.)

The owners hired Willie Brown to make their case at City hall; Mayor Ed Lee quickly introduced legislation that would allow the conversion. The Chron picked up the ownership line: only condos can save the Fairmont. “The business has migrated downhill to new hotels near the Moscone Convention Center south of Market,” the paper lamented in an April 17 editorial. Done deal, right?

Well, no. Local 2, the hotel workers union, did an amazing job of organizing, working with Nob Hill neighbors and, by the way, pointing out the facts — the Fairmont has outperformed the SoMa hotels during 10 of the past 11 years, has enviable occupancy rates and stands to reap the benefits of the America’s Cup. Facing a possible strike and a battle royal at City Hall, the Fairmont blinked. The condo plan is dead. Good work, my friends.

Seeking a watchdog’s watchdog

Andrew Lam

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April 12, 2011

1

rebeccab@sfbg.com

When cash pumps through the guts of city politics, the Ethics Commission is charged with keeping track of it all to help members of the public follow the money. But what happens when the public loses faith in the ethics of the Ethics Commission?

In the run-up to a hotly contested mayoral race, in a city marked by rough-and-tumble politics influenced by moneyed power brokers, the function of this local-government watchdog agency is especially critical — and to hear some critics tell it, the Ethics Commission needs reform if it is to perform as an effective safeguard against corruption.

So it was hardly surprising that an April 5 discussion at the San Francisco Board of Supervisors meeting about whom to appoint to the Ethics Commission featured a low-level tug-of-war with some potentially high-level implications.

Sup. Eric Mar proposed that the board consider Allen Grossman for the seat. An octogenarian government watchdog unaffiliated with any political party, Grossman has gone so far as to file a successful lawsuit against the Ethics Commission for not following its own public-disclosure rules. As a potential appointee, he was widely viewed as reform-minded, following in the footsteps of others who have been purged from the body in recent years.

“Open government and good government work together, hand in hand,” Grossman told members of the board’s Rules Committee several weeks prior, interlacing his fingers for emphasis.

Grossman won the backing of Sups. John Avalos and Ross Mirkarimi. But Board President David Chiu spoke against the idea, throwing his support instead behind Dorothy Liu, an attorney and professional colleague of his through the Asian American Bar Association. The Rules Committee, chaired by Sup. Jane Kim and filled out by Sups. Sean Elsbernd and Mark Farrell, also turned down Grossman in favor of Liu.

“She’s extremely hard-working and does her homework,” Chiu later told the Guardian. He also saw it as a plus that Liu was not a political insider: “I think we need an individual on the Ethics Commission who will be impartial,” he said, adding that he’d prefer “someone who has not been involved in the rough-and-tumble of San Francisco politics.” Sup. Carmen Chu echoed Chiu’s comments during the meeting, saying she thought Liu would be an ideal candidate because she did not seem to have an agenda.

Mirkarimi and Avalos, on the other hand, said they were looking for a candidate who did possess a vision for strengthening the role of the agency as a watchdog. “I think our Ethics Commission and the department, as it stands, needs all the help it can get,” Mirkarimi said during the meeting. “I think having people who are well-seasoned with an understanding in the law of ethics and sunshine is something we should be looking for. Mr. Grossman has exhibited that well over the years in trying to do everything he possibly can to advance the cause in a nonpartisan way of making sure that we have a very strong Ethics Commission.”

Mar’s motion to consider Grossman was shot down on an 8-3 vote with Mirkarimi, Mar, and Avalos dissenting; Liu then won the commission appointment on a 10-1 vote, with Avalos dissenting.

Until recently, the Board of Supervisors seat on the Ethics Commission was held by Eileen Hansen, a progressive who had called for political reform under Mayor Willie Brown’s administration prior to being named to the post. When she was being considered for the commission, Hansen recalled, then-Sup. Michela Alioto-Pier raised an objection. “[She] thought the perfect person would be somebody who … would come essentially as a clean slate,” Hansen remembered. “Because I had been involved in organizing campaigns and had run for office, that was deemed too political.”

Yet Hansen viewed her familiarity with the system as an asset that helped her serve as an effective watchdog against corruption. During her six-year tenure, Hansen often cast lone dissenting votes against decisions she believed were weakening ethical standards. She told the Guardian she’d tried floating remedies for situations she viewed as inappropriate, only to have them summarily ignored, a role similar to that of former Ethics Commission member and staffer Joe Lynn.

In one case, Hansen recalled, she became concerned about a planning commissioner who also directed a nonprofit. To raise money, her organization held fundraisers that were ostensibly attended and funded by the very same developers and lobbyists who appeared before her at the Planning Commission. Yet Hansen said she was unable to persuade the other commissioners or staff to call for an investigation.

A more recent Ethics Commission vote underscores the same tension. On March 14, the commission voted unanimously to waive a pair of ethics regulations to allow a mayoral staff member to become executive director of the America’s Cup Organizing Committee (ACOC). Composed of highly influential business figures including at least two billionaire investors, ACOC is tasked with securing corporate donations for the America’s Cup to offset city costs of hosting the race.

Kyri McClellan, project manager with the Mayor’s Office of Economic and Workforce Development, helped craft a memorandum of understanding with ACOC regarding its fundraising obligations to the city. In her new job, without skipping a beat, she’ll interface with the city on behalf of ACOC. The rules that were waived for her benefit are meant to prevent city officials from holding undue influence over their former coworkers after leaving public service, and to prevent city staffers from accepting money from city contractors right after departing from city employment.

“If I had been there, there would have been at least one vote against that waiver,” said Hansen, whose term on the commission ended before this vote. “We have this law in place for a reason. By continuing to provide waivers … we create a situation where the public will not trust the Ethics Commission as a watchdog.”

Hansen said she was scouting for a new commissioner who would carry on with her work. “I was looking for and trying to recruit a visionary — someone who could really be a reformer,” she said. “We’re almost in a position now where we need a watchdog over the watchdog.” She said she saw Grossman as the right fit.

Other observers, such as CitiReport blogger Larry Bush — an investigative reporter who called for the creation of the Ethics Commission in San Francisco in the early 1990s — questioned whether Liu was the best choice after hearing her statements at the March 17 Rules Committee hearing. Liu did not come out strongly in favor of televising Ethics Commission meetings, which has long been a sticking point for open-government advocates.

“I absolutely support televising the Ethics Commission, I think it’s really important,” Kim noted when we asked her about this. She added that she would have supported Oliver Luby — a former Ethics Commission staff member and whistleblower who was ultimately ousted from the job — if he’d applied.

Kim noted that an initial concern she’d had in seeking an ethics commissioner was whether the person would vote to allow Mayor Lee to resume his job as city administrator after serving out his term as interim mayor, a key decision that the commission was scheduled to consider April 11.

Once she was advised that it would be inappropriate to ask which way they would vote when conducting candidate interviews, Kim said she withheld her question — and still didn’t know Liu’s or Grossman’s position at the time she spoke with the Guardian. “I think it’s very appropriate for him to get his job back,” Kim noted. “That vote is very important to me.”

That vote drew closer scrutiny, however, after Ethics Commission staff recommended that the exemption that would be built into the law for Lee’s benefit should be expanded to include appointed members of the Board of Supervisors. “This new proposal would convert a targeted, narrow exemption to deal with a special case into the ‘Politician Job Protection Act’ and could open the door to all kinds of unintended consequences,” charged Jon Golinger of San Franciscans for Clean Government.

Meanwhile, Luby seemed disheartened by the board’s selection of Liu for the Ethics Commission. He was looking to Grossman to fill Hansen’s shoes as the commission’s reformer — a role previously held by Lynn, Luby’s good friend and mentor who died last year.

He lamented, “This will mark the first time in over 10 years to have an Ethics Commission without someone who has past experience advocating for good government.”

Rule change for Mayor Ed Lee could expand beyond special case

Sasha Cuttler And Mary Magee

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April 11, 2011

4

Last week, the Guardian reported on the Ethics Commission’s decision to waive two post-employment bans for city officials in order to allow mayoral staffer Kyri McClellan to take a job as executive director of the America’s Cup Organizing Committee, a role that will put her into direct contact with the same office she’s departing from as a representative of private-sector interests.

The April 11 Ethics Commission meeting will feature another discussion on whether to bend the rules on post-employment for city officials.

Shortly after former City Administrator Ed Lee was appointed as interim Mayor, Board President David Chiu introduced legislation that would modify post-employment restrictions to allow Lee to go back to his former job directly after serving out his mayoral term. Under the Campaign and Governmental Conduct Code, the mayor and members of the Board of Supervisors must wait a full year after serving office to obtain employment with the city. Unlike in McClellan’s case, this rule cannot be waived for an interim mayor, so the law must to be changed to include an exception to accommodate Lee in this special case.

As it stands, “This rule is designed to restrict these elected officials from using their influence to create golden parachutes as they leave office,” according to a memo issued by Ethics Commission Deputy Executive Director Mabel Ng.

Yet Ng’s memo proposes expanding the reach of the rule change, advocating for it to apply not only to an interim mayor but any appointed member of the Board of Supervisors who does not plan to seek office after filling out a term.

“If the commission approves this legislation, staff recommends that the Commission also extend the exception to a member of the Board of Supervisors in the same circumstances,” Ng’s memo notes. “Staff makes this recommendation because the same arguments supporting an exception for appointed mayors like Mayor Lee apply equally to appointed members of the board.”

Not so fast, says Jon Golinger of San Franciscans for Clean Government, who issued a press release warning of the possible rule change on April 11. While Lee’s case is rare indeed, supervisors are appointed to fill vacant seats far more frequently, Golinger pointed out. “It introduces a whole new level of uncertainty and political abuse,” he charged. “We don’t want our top officials playing games with public funds so that they can have a job with the city” after leaving office.

Golinger said his group thought the provision that would allow for Lee to resume his old post should include a sunset clause to make it a temporary change, since in his view, “there’s no reason that should be a permanent change.”

As for going a step further to include appointed members of the board, “It’s a major change,” Golinger said, “and it does raise the broader issue of whether Ethics Commission reform is needed.”

In order to be approved, the rule change would have to win at least four votes at the Ethics Commission and at least eight votes at the Board of Supervisors.

Ng’s memo noted that a representative of Chiu’s office would attend the April 11 meeting and respond to questions from staff about the proposed legislation to create an exemption from the post-employment ban for Lee. Reached by phone, Chiu’s legislative aide Judson True said his office had not yet formed an opinion on whether the rule change ought to be extended to the Board of Supervisors.

Mayoral staff member to direct America’s Cup Organizing Committee

Sasha Cuttler And Mary Magee

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April 7, 2011

3

The San Francisco Ethics Commission voted unanimously on March 14 to waive a pair of ethics rules in order to allow Kyri McClellan, a project manager in the Mayor’s Office of Economic and Workforce Development (OEWD), to become executive director of the nonprofit America’s Cup Organizing Committee (ACOC). The fundraising arm of the America’s Cup effort, ACOC’s role in bringing the world-famous sailing regatta to San Francisco is to secure corporate donations to offset city costs.

For months, McClellan has been on the city’s side of the negotiating table in discussions with ACOC to hash out a memorandum of understanding (MOU) concerning its fundraising obligations to the city. Without skipping a beat, she’ll now be interfacing with the city on the ACOC side. At press time, it was unclear whether McClellan had already started her new job, but her voicemail with OEWD was still in service. We left a message, but haven’t heard back.

McClellan sat down with the Guardian last November for an interview about the America’s Cup. She seemed knowledgeable and organized — and race organizers were clearly impressed with her performance. Regardless of how qualified she may be, however, the Ethics Commission’s decision to grant these waivers raises the question of whether McClellan received special treatment from the very entity that’s tasked with ensuring ethical government conduct.

The move also raises concerns about a revolving door between the Mayor’s Office of Economic and Workforce Development and the powerful private-sector interests behind the prestigious sailing event. Rather than preserving the ethical barrier that the rules intended, ACOC will now gain a team member who has detailed knowledge of OEWD’s inner workings.

In order to accommodate McClellan, commissioners agreed to waive two post-employment restrictions for city officials. The first is a yearlong post-employment communications ban, and the second prohibits former city employees from receiving compensation from city contractors for two years.

To better understand the intent behind these bans, the Guardian phoned the Ethics Commission and was connected to Deputy Executive Director Mabel Ng. She explained that the communications ban prohibits former city employees from taking private-sector positions that interface with the same department they worked for, “because you might have some undue influence.”

The two-year ban on receiving compensation from city contractors is meant to ensure that city officials engaged in negotiating contracts are not doing so to secure an outcome that would benefit them personally. “This again, just to make sure that when you are negotiating a contract … you’re doing this on behalf of the city,” Ng said.

Asked to explain the commission’s reasoning behind the granting McClellan the waivers, Ng said it was because “it determined that there would not be a potential for undue influence … because it seemed like [ACOC’s] interests were aligned with the city’s interests.”

As one ethics commissioner pointed out during the meeting, however, the same could be said of virtually any nonprofit entering into an agreement with the city.

Asked what would happen if ACOC somehow failed to raise the agreed-upon funds, placing McClellan in the position of having to explain the shortfall or re-negotiate with her former coworkers, Ng allowed, “If something like that happened, there might be a conflict.”

And what justification was given for waiving the ban on former employees receiving compensation from city contractors? “For that one, in the law itself, it says the commission may waive it … if it would cause extreme hardship,” Ng explained. “There would be a hardship, because … this is a great opportunity for her, and there was a short timeline for her to do it.”

Pressed on that point, Ng confirmed that the “hardship” in this case was the possibility of being barred from a great job opportunity, not the threat of financial impact or job loss.

The other issue, Ng said, was that without McClellan serving in that post, the committee’s fundraising effort might not be successful. “It just seemed like, you need to have somebody take charge,” she said. “The committee may suffer without her at the helm. If she were not able to do that, the committee — which plays a very crucial role in this — may not be able to meet its obligations.”

When we mentioned to Ng that the committee was composed of some very well-connected individuals, she noted that she was not familiar with its membership.

As we reported in previous coverage of the America’s Cup, ACOC is a veritable who’s who. Hollywood mogul Steve Bing, who’s donated millions to the Democratic Party and funded former President Bill Clinton’s 2009 trip to North Korea to rescue two imprisoned American journalists, is on the committee. Tom Perkins, a Silicon Valley venture capitalist, billionaire, and former mega-yacht owner, has a seat. George Schultz and his wife, Charlotte, are members. Billionaire Warren Hellman, San Francisco socialite Dede Wilsey, and former Newsom press secretary Peter Ragone are also on the committee. And that’s to say nothing of the less well-known investors, or the honorary members — elected officials serving at all levels of government. Would a powerful crew such as this have a difficult time raising money without McClellan’s leadership? Seems like a stretch, but that reasoning was offered as a factor in the decision to grant the waiver.

In an odd twist, McClellan might also be working alongside her former boss on the America’s Cup effort. In January, ACOC named its “first ever” Ambassador at Large: Lt. Governor Gavin Newsom.

While several ethics commissioners raised questions before granting the waiver, the vote ultimately came to 4-0 in favor of McClellan’s request. Board President David Chiu sent his legislative aide, Judson True, to speak in support of issuing the waiver.

How to move 200,000 people around America’s Cup

Mary Magee

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April 4, 2011

3

How to move 200,000 people around America’s Cup

I’ve been wondering how the city plans to move the thousands of spectators expected to show up for a series of regattas in 2012 and 2013, leading up to and including the 34th America’s Cup Final.

And today I had a chance to start perusing the city’s draft People Plan which aims to move up to 200,000 residents and visitors daily to the city’s waterfront and is promising to be “the most transit, bicycle and pedestrian-friendly major sporting event in history.”

(Note to compulsive printers of online government documents: thanks to some nifty maps in this document, your printer may experience replication difficulties. For instance, I had to print everything but the maps on pages 13 and 14 of the document.)

Anyways, my preliminary review revealed that there is a special section in the draft dedicated to the “special transportation needs” of America’s Cup “participants” and that these participants include teams, event staff and, ta da!, accredited media.

“Special transportation needs for the ‘participant” group include but are not limited to staff access to race-related areas and other constricted waterfront areas,” states the plan. “These activities may require unique and frequent vehicle access to various sites.”

[Note to self: Remember to check out what is required to qualify as “accredited media” for a seat in one of the vehicles frequently accessing the area.]

Just kidding, and now, back to the needs of regular people who want to see the event.

“Part of the appeal that brought the Events to San Francisco Bay was the opportunity to create a new kind of viewing experience for the highest level of competitive sailing, with races held in close proximity to urban areas and accessible shoreline instead of open seas,” states the plan’s “Strategic Adaptability” section.

“The novelty of this concept creates excitement but it also creates uncertainty, in that there are few instructive examples of how spectators will choose to attend an America’s Cup Final-level sailing event in the middle of a weekend day, or how a large event in San Francisco Bay during a weekday will affect the ability of Bay Area residents to commute to work or their other daytime destinations,” the section notes.

{This sounds like the city is trying to figure out how many of us will choose to be anywhere but San Francisco on the weekends in question, how many of us who work in San Francisco are planning to play hookey to attend week day events, and how many will show up even if the Bay is swathed in fog.]

Un its draft plan, the city promises “to seed the strategies set forth in the People Plan with a measure of adaptability to allow for the strategic deployment of a finite amount of transportation resources across the spectrum of transportation demands associated with the Events in accordance with the expected demands of each day.”

Beyond that, the document is divided into three main parts. One itemizes likely destinations, the next describes transportation strategies to serve these key destinations, and the final section describes “additional considerations and strategies.”

To learn a) which race facilities, waterfront locations, and race viewing locations will be accessible to the public, b) which bus, rail, cable car, bike, automobile and ferry routes will be modified, and c) which parking and special locations will be added, be sure to check out the plan. And then eave your comments at the city’s feedback site here.

For, as the city’s website warns, “The early draft of the People Plan is the product of analysis by city and SFMTA staff, with early input from stakeholder groups. The draft People Plan announced today will also undergo significant and further revisions, following input from members of the public, advocates, city and agency staff, the environmental community and other stakeholders in the coming months. Final approval and consideration will occur following the completion of environmental review.”

In other words, review the documents now and speak your piece soon, otherwise your ideas won’t have any chance of making it into the final plan.

Or at Mayor Ed Lee put it in a press release, “We are moving rapidly to meet our commitments to host a spectacular 34th America’s Cup in 2013 and set a new standard for sustainable event-planning. The America’s Cup is a unique opportunity to leverage our region’s transportation resources and our enthusiasm to deliver the most transit, bicycle and pedestrian-friendly international major sporting event in history for residents and visitors alike.”

And here’s hoping that we will all be “moving rapidly” when the regatta finally rolls into town…

Focus on tax reform and scrap the sleazy giveaway

Sasha Cuttler

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March 29, 2011

33

A few weeks ago, when the Guardian was the only media outlet in San Francisco that seemed to care about the huge Twitter/Mid-Market/Tenderloin tax exclusion zone – which everyone took as a done deal because it was sponsored by Sups. David Chiu and Jane Kim and backed by fiscal conservatives – I had a very illuminating interview with City Economist Ted Egan.

We at the Guardian were instinctively opposed to huge tax breaks for a wealthy corporation and big landlords and our position only became stronger as I reviewed thousands of pages of internal city emails and other public documents and got a sense of the sleazy and haphazard way this was created, and with the unsupported claims being used to sell it.

But then, when I asked Egan what convinced him that Twitter would leave without a tax break, he said the tax on stock options was what convinced him. If media reports were right and Twitter goes public for $12 billion and employees got about a quarter of that, that would translate into about a $40 million one-time tax bill. And that, Egan said, would probably convince most companies to flee.

It made sense to me and the other editors here at the Guardian, so our position evolved and our coverage focused on the rest of the tax giveaway, which Egan told us and the Board of Supervisors Budget & Finance Subcommittee – in two separate hearings – really didn’t make much economic sense. SEIU Local 1021 and other progressive opponents of the legislation also softened their opposition and acknowledged that some kind of change to the stock option taxation was probably needed.

Today, as Sups. Chiu, Ross Mirkarimi, and Mark Farrell all introduced varying forms of legislative fixes to the stock option issue — and the media coverage of the issue begins to pick up steam – what’s somehow being lost in the renewed debate is how ridiculously corrupt and wasteful the city’s initial approach to the Twitter problem was.

“One is a sleazy land grab and the other is honestly trying to deal with tax policy,” says Gabriel Haaland of SEIU 1021, which opposes the Tenderloin/Mid-Market deal but is open to legislation tweaking the payroll tax’s stock options provisions.

Yet, unbelievably, many city officials are talking about approving the massive tax giveaway zone on April 5 and then continuing to give even more tax breaks to Zynga, Yelp, and any other high-tech companies that threaten to leave. Rather than stepping back to reevaluate the whole thing (as Farrell, to his credit, seems to be advocating in his comments to the press), most the officials involved in this seem to be bent on simply giving in to what corporations say they want and asking for almost nothing in return.

As I report in this week’s Guardian, continuing my earlier investigation, there are serious unanswered questions and hints of corruption in the way many Tenderloin and Mid-Market properties were offered tax breaks, largely at the direction of private power broker Randy Shaw, yet proponents of the measure have plowed forward with the deal anyway, denying reasonable requests for a public review of what the city is getting in the deal, for reasons nobody can explain.

During a high-stakes election year, when many of these deal makers will be seeking campaign contributions from the very interests that would benefit most of this reckless and ill-considered giveaway of public funds, it would behoove us all to take a deep breath, get the facts, get off our knees, regain a sense of civic pride, and have our toughest negotiators get the best deal we can with these companies.

And those negotiators probably aren’t from the Office of Economic and Workforce Development, which cut a bad deal with corporate America on the America’s Cup (another story on which the Guardian was a loud and early whistle-blower) and a bad deal on Twitter, largely because this agency exists almost entirely to serve the business community and not city residents. Personally, I’d love to see Egan and Budget Analyst Harvey Rose as the city’s negotiating team, two straight shooters who don’t have a political pony in the race.

There is a reasonable solution to this problem here somewhere, and it isn’t simply about slashing the taxes for every big corporation that wants it, or with simply waiving payroll taxes on stock options, a provision the board created in 2004 to address the problem of companies using inflated stock options to get around their payroll taxes. Mirkarimi’s legislation includes a floor of at least $100,000 in salary per employees that companies would still be taxed on when they go public, which seems like a good idea. Farrell has suggested finding a way to value stock options as compensation at the time employees buy them, which also sounds reasonable to us – even though we’re a progressive publication and he’s arguably the board’s most conservative member.

You see, reasonable solutions are possible. But that has to start with abandoning the ill-conceived, badly executed Mid-Market/Tenderloin tax exclusion zone – which Egan has said won’t achieve its desired goals anyway – and dealing solely with the issue of business taxes and retention.

Then, on a separate track and with a more transparent process, the city can also deal with revitalizing Mid-Market and the Tenderloin using smart, creative, multi-pronged strategies – some of which may still involve incentives to Twitter and other desirable companies – that don’t rely on voodoo economics and wishful fantasies that seem to mask darker ulterior motives.

Behind the tweets

Jesse Hawthorne Ficks

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March 15, 2011

20

steve@sfbg.com

A Guardian review of the voluminous e-mails and other public records behind the proposed Mid-Market tax exclusion zone shows how public officials and private power brokers promised millions of dollars in benefits to Twitter and greatly expanded the tax-exclusion zone to unrelated properties with little explanation, concern over impacts, or understanding of how it would affect city finances.

The result was a proposal that could cost the cash-strapped city more than $17 million — a cost that even the city’s fairly conservative economist Ted Egan told the Guardian isn’t justified for many of the properties that were included in the proposal, particularly the large commercial office buildings along Market Street and the small businesses in the Tenderloin.

“It’s giving taxes away to properties that are going to fill up anyway,” said Egan, who recommended several changes to lessen the proposal’s cost, even though he supports giving a tax break to Twitter and thinks the deal will be a net positive if it stimulates business development as much as its backers hope.

The proposal would exempt companies in Mid-Market and the Tenderloin from paying the city’s 1.5 percent business payroll tax on any new jobs they create for six years. It was sweetened even more for Twitter — city officials promised the company a new Muni line, police foot patrols, and various other tax credits and exemptions to improve Twitter’s cash flow, the documents show.

The Mayor’s Office of Economic and Workforce Development worked almost full-time on the deal for several months to keep Twitter from following through on its threat to leave town. Indeed, OEWD staffers don’t even acknowledge that the tax break is a loss to city coffers, arguing the city would lose money if Twitter leaves and keeping the company here will increase property taxes and rents in the Mid-Market area.

Yet there is little in the documents to indicate how real that threat is or whether the legislation will convince the company to stay here, and Twitter hasn’t responded to inquires from the Guardian or other media outlets.

Egan pointed to a reason for Twitter to leave that hasn’t been part of the public discussion to date. The city’s payroll tax applies to stock options — and Twitter would be on the hook for as much as $40 million in taxes if the company goes public. But he said that could be addressed more directly without the broader giveaway.

OEWD head Jennifer Matz said she trusts Twitter executives and “they are out the door if we don’t do this.” She also said she disagrees with Egan that the city is giving away more than it needs to and “there is no question in my mind it will bare its fruits.”

Yet she also acknowledged the difficult precedent this deal is setting and said she’s already fielded regular calls from other companies asking for their tax break. “I’ve had multiple conversations like that,” she said. “We tell the other businesses, ‘we’re sorry.'”

Not everyone shares her faith in the power of tax breaks, with progressives and the city’s biggest public employee union opposing the deal. Critics have said Twitter is a rich company that is essentially trying to shake down city taxpayers, despite previous assurances to remain here. After then-Mayor Gavin Newsom made one of many visits to the company on March 10, 2009, Twitter officials wrote on the company blog, “We assured Mayor Newsom that as Twitter grows, we’ll continue to keep our headquarters here in San Francisco.”

That all changed the next year as Twitter officials looked to expand and relocate into the SF Mart building at Market and Ninth streets.

“OEWD staff has been actively engaged with Twitter since February of 2009,” Matz wrote in a Jan. 18 memo to Sup. Jane Kim soliciting her support for the tax breaks.

But it wasn’t until October 2010 that records show the deal really taking shape. According to memos from Matz, Twitter CFO Ali Rowghani met with Newsom and told him that the company’s top choice for a new headquarters location was SF Mart (which also happened to be where Newsom’s campaign for lieutenant governor was headquartered at a discounted rent) but Twitter’s concerns were “public safety, transportation, neighborhood conditions, [and] cost.”

The memos show Newsom returned to Twitter on Oct. 29 with his chief of staff, Steve Kawa, Police Chief Jeff Godown (then assistant chief), and Matz — promising not just the payroll tax break and enterprise zone tax credits but 18 hours a day of police foot patrols in the area and the creation of a new Muni express line, 47A, between the Caltrain Station and the Twitter headquarters.

None of those costs are being figured into the deal. Matz said the new Muni line was a service restoration that has already been approved but not yet funded, and that the foot patrols would simply be absorbed into the police budget. These are just a few of the many guesstimates and unaccounted for costs in this highly complex deal.

EXPANDING THE GIVEAWAY

Throughout the month of January, new properties kept getting added to the district by various people, from OEWD staffers to Sup. Jane Kim — who greatly expanded the district and refuses to answer Guardian questions about why — and Randy Shaw, who runs the Tenderloin Housing Clinic and the Beyond Chron blog and has been a vocal tax-break supporter.

“Payroll tax thing is going to happen and Randy Shaw wants us to add the Uptown Tenderloin Historic District!” OEWD’s Amy Cohen wrote on Feb. 2 to a real estate consultant with the Northern California Community Loan Fund.

None of the requests for expanding the tax exclusion zone included an explanation of why that property should be in — and in each case they were added to the area without question. The only possible exception was when the Warfield Building was added Jan. 7 after OEWD learned Burning Man was seeking to rent headquarters space there. Yet Burning Man founder Larry Harvey told us it planned to move to mid-Market with or without the tax break, and that it is now negotiating for a different building, although the Warfield remains in the tax exclusion district.

“Can you add 875 Stevenson to the boundaries and send the revised map? Thx,” one OEWD staffer wrote to another on Jan. 13.

“I want to add one more area: I want to go halfway down the block between Fifth and Sixth grabbing everything heading east up to the Cityplace properties,” Matz wrote to another OEWD staffer on Jan. 14.

New properties were being added right up to the point that the legislation was introduced on Feb. 9. The day before, Shaw wrote to Matz and OEWD’s Amy Cohen telling them that the owner of the Hastings Law School garage “should get the exemption if he thinks it might help,” and that property was added. Cohen then gave Shaw credit in an e-mail to UC Hastings CFO David Seward: “We’re going to put your properties in. Randy is good with it!”

Even some OEWD staffers seemed surprised that the tax exemption area had grown so far beyond its original borders. “Wow, when did the entire TL get thrown in?” OEWD Project Manager Lisa Pagan wrote to Cohen in a Feb. 8 e-mail.

But Matz defended the expansion and said it wasn’t as willy-nilly as it appears. “There was a lot more conversation than was reflected in those e-mails,” she told us. “The boundaries evolved due to more thorough thinking.”

Yet she acknowledged it’s tough for skeptics of the deal to determine why properties were included, whether political favoritism played a role, or who stands to benefit from the decisions.

As OEWD staff prepared memos for the mayor and supervisors on Jan. 13, they also discussed talking points for the media and how to share credit for those outside City Hall. As Cohen wrote to another OEWD staffer, “Randy Shaw — we are crediting him with coming up with the idea. He told me he talked to a bunch of people, including supervisors, and got lukewarm reception.”

That assessment runs contrary to how proponents have publicly claimed the idea has enthusiastic support in City Hall. Indeed, it wasn’t until Egan’s report came out one day before the first public hearing that proponents of the deal started discussing why they had expanded the boundaries so far.

QUESTION OF ALLEGIANCE

For those who aren’t simply fiscal conservatives who automatically support corporate tax breaks, the wisdom of this deal relies on whether people believe Twitter is headed to Brisbane if its demands aren’t met.

“The real question is do you believe Twitter is leaving if they don’t get this,” Egan said. “It’s impossible to say.”

He’s convinced that the high stock option price tag would be enough to cause most companies to leave town. But OEWD seems to just take corporate claims at face value, as it did when Oracle CEO Larry Ellison said he needed $128 million in public subsidies to hold the America’s Cup boat race here (see “The biggest fish,” Nov. 30, 2010) only to later agree to a greatly reduced public subsidy.

Even the two supervisors who are sponsoring the legislation, Kim and Board President David Chiu, don’t seem to have had the opportunity to assess the deal free of OEWD’s advocacy for a company that has refused to share any financial records with the city.

Matz set up phone conversations between Twitter’s Rowghani and Chiu and Kim on Jan. 21, sending the two supervisors an e-mail that day recommending they ask three questions of Twitter: why the company needs the tax break, whether it would commit to keeping its entire headquarters here, and what community partnerships it would commit to.

She then sent Rowghani an e-mail that same day letting him know what the supervisors would be asking and what they wanted to hear. Matz told him both supervisors support the deal “but need to hear from you how and why payroll taxes moves the needle for you.”

Matz told us she sees nothing wrong with coaching Twitter.

“It was more like facilitating a first date between friends,” Matz said of sharing information with Twitter. “I was simply trying to facilitate a productive conversation.”

Drafts of a community benefits package were watered down to please Twitter, the documents show. Language claiming that Twitter will try to hire more San Franciscans who don’t have four-year college degrees became a pledge to work with city officials on “a mutually agreeable program to train” those individuals.

In the end, even Matz admits that the community benefits agreement is too weak and vague: “We want to work with them in making that stronger,” she said.

Shaw, the records show, functioned almost as a de facto member of the OEWD staff, strategizing with officials while writing articles in Beyond Chron.org that tried to retain a thin veneer of journalistic objectivity, such as “Landmark Measure Would Revitalize SF’s Mid-Market and Upper Tenderloin Area,” which he wrote and forwarded to Matz on Feb. 8.

“Article is perfect. This is game-changing, largely for the signal it sends about the city’s commitment to improving the area,” she wrote in response.

FACTS AND FICTIONS

In addressing progressive critics of the deal, Kim said she greatly improved the proposal before agreeing to sponsor the legislation, insisting that its duration be reduced from eight years to six, its boundaries be expanded, and the payroll tax exclusion be limited to new jobs that a company creates rather than all its employees.

Yet the documents show that OEWD had been developing two options for the legislation, total jobs and “net new jobs,” since well before Kim got involved.

The OEWD also sold the deal to supervisors and the public during the month of January with figures it couldn’t support — such as repeatedly claiming that the creation of 300 jobs at Twitter would create 400 additional jobs and $174 million in economic activity. Yet when the OEWD finally checked those figures with Egan on Feb. 2, he wrote that “it is only 100 additional jobs” and “not sure where you get $290,000” as the economic value per job.

Yet for the OEWD and the other proponents of this deal, the record shows a determination to get the deal done — and then make it sound good. “Make the narrative as strong as possible,” Cohen wrote to Matz on Feb. 1, passing on the concerns expressed by Kim’s office. “Ultimately, we need to be able to show that this is not a net loss, it is a net gain.”

But behind the scenes, the actual cost to taxpayers of retaining Twitter is being obscured by a variety of financial mechanisms and budget decisions by city departments.

Even Kim’s shortening of the program brought new demands by Twitter. In a Feb. 9 e-mail from Matz to Chiu and Kim, she wrote, “Twitter told me that they agreed that the six-year time frame works only if 1) their short term cash flow issues are addressed and 2) the exemption for stock options is extended to eight years.” So Matz said she would “noodle on other financial mechanisms, including Mills Act Historic Tax Credit and New Market Tax Credits.”

The public won’t get a chance to weigh in on these details. On Feb. 4, when an OEWD staffer wrote to Matz that the City Attorney’s Office recommended the legislation call for another public hearing after OEWD develops rules and regulations for implementing the policy, Matz replied simply, “No!”

Editor’s Notes

Jesse Hawthorne Ficks

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March 15, 2011

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tredmond@sfbg.com

The numbers in the Twitter tax-break deal just keep getting bigger. And the politics keep getting stranger.

City Editor Steven T. Jones went through hundreds of pages of city records on the Twitter negotiations; the results of his investigation are in this issue.

But two elements jumped out at me right away. One is that San Francisco officials seem be really bad at negotiating with private companies. It’s now clear that billionaire Oracle CEO Larry Ellison took the city to the cleaners on the America’s Cup deal, demanding (and getting) millions of dollars in extra concessions that the Board of Supervisors never approved. And talks with Twitter aren’t a whole lot better.

Then there’s the size of the tax break.

When this was first presented, proponents argued that the city’s 1.5 percent payroll tax would discourage Twitter from staying in town and expanding its workforce. I’ve always said that’s ridiculous; the tax amounts to such a modest business expense that no honest corporate executive would ever say it was a factor in a hiring or relocation decision.

Ah, but that’s not what’s really going on here. The documents show that Twitter isn’t just worried about the annual payroll tax. It’s all about what happens when the company goes public — and many of its employees become very, very rich.

See, the city’s payroll tax also applies to stock options. If, as city economist Ted Egan estimates, Twitter winds up after its initial public offering with a market capitalization of $12 billion (entirely possible), and 25 percent of that money goes to employees as stock options (entirely possible), then the Twitterites (350 or so now and maybe another 300 in a few years) will walk away (after costs) with $2.7 billion.

That’s about $7.7 million for each current employee — although the folks at the top will get a whole lot more than that.

So several hundred instant multimillionaires and possibly a couple of instant billionaires. People who will vault into the income and wealth bracket that has been radically undertaxed in this country for many years.

For the $12 billion company, it also means a payroll tax liability of $40 million. And that’s got Twitter all a-twitter.

Let’s be honest here: A number like that is not chump change, and might convince a CEO to leave town. But it’s also politically tricky. Who wants to go out there and argue that a company that rich, with all those rich employees, can’t pay taxes on its windfall?

The payroll tax exemption is supposed to create jobs. This is another league altogether — and it has nothing to do with job creation.

So let’s have that discussion, shall we? Forget the puny tax on weekly payroll and this rapidly-growing tax-free zone in the Tenderloin. Cut to the chase: should San Francisco exempt Twitter from the IPO stock options tax? That, at least, is worth fighting about.

Mayoral dynamics

Jesse Hawthorne Ficks

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December 21, 2010

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steve@sfbg.com

Despite the best efforts of Sup. Chris Daly and some of his progressive colleagues to create an orderly transfer of authority in the city’s most powerful office, the selection of a successor to Mayor Gavin Newsom will come down to a frantic, unpredictable, last-minute drama starting a few days into the new year.

The board has convened to hear public testimony and consider choosing a new mayor three times, each time delaying the decision with little discussion by any supervisor except Daly, who pleaded with his colleagues on Dec. 14 to “Say something, the people deserve it,” and asking, “Are we going to take our charge?”

The current board will get one more crack at making the decision Jan. 4, a day after the California Constitution calls for Newsom to assume his duties as lieutenant governor — although Newsom has threatened to delay his swearing-in so Daly and company don’t get to the make the decision.

“I can’t just walk away and see everything blow up. And there are a few politicians in this town that want to serve an ideological agenda,” Newsom told KCBS radio reporter Barbara Taylor on Dec. 16, two days after praising the board for its “leadership and stewardship” in revising and unanimously approving the city’s bid to host the America’s Cup.

Newsom and his fiscally conservative political base fear that the board’s progressive majority will nominate one of its own as mayor, whereas Newsom told Taylor, “The board should pick a caretaker and not a politician — that’s my criteria.”

Some board members strongly disagree. “It’s not his to decide. Besides, what’s not ideological? That doesn’t make sense. Everyone’s ideological,” Sup. John Avalos told the Guardian, a point echoed by other progressives on the board and even many political moderates in town, who privately complain that Newsom’s stand is hypocritical, petty, and not in the city’s best interests.

The Guardian has interviewed a majority of members of the Board of Supervisors about the mayoral succession question, and all expect the board to finally start discussing mayoral succession and making nominations on Jan. 4.

But whether the current board, or the newly elected board that is sworn in on Jan. 8, ultimately chooses the new mayor is anyone’s guess. And at Guardian press time, who that new mayor will be (and what conditions that person will agree to) was still a matter of wild speculation, elaborate conspiracy theories, and backroom deal making.

GETTING TO SIX

A majority of supervisors say there’s a simple reason why the board hasn’t seriously discussed mayoral succession since it unanimously approved the procedures for doing so Nov. 23 (see “The process begins,” Nov. 30). Everyone seems to know that nobody has the required six votes.

Avalos said he thinks the current board is better situated to choose the new mayor because of its experience, even though he voted for the delay on Dec. 14 (in an 8-3 vote, with Daly and Sups. Ross Mirkarimi and David Campos in dissent). “I supported the delay because we were not closer to having a real discussion about it than we were the week before,” Avalos told us, noting that those who were pushing for Campos “didn’t do enough to broaden the coalition to support David Campos.”

For his part, Campos agreed that “the progressive majority has not figured out what it wants to do yet,” a point echoed by Mirkarimi: “I don’t think there’s a plan.” Sup. Sophie Maxwell, who made both the successful motions to delay the vote, told us, “There’s a lot more thinking that people need to do.”

“We do not yet have consensus,” Chiu said of his reasons for supporting the delay, noting that state conflict-of-interest and open government laws also make it difficult for the board to have a frank discussion about who the new mayor should be.

For example, Chiu is barred from even declaring publicly that he wants the job and describing how he might lead, although he is widely known to be in the running.

The board can’t officially name a new mayor until the office is vacant. Sup. Bevan Dufty, who is already running for mayor, told us the board should wait for Newsom to act. “I felt the resignation should be in effect before the board makes a move,” Dufty said.

Sups. Sean Elsbernd, Carmen Chu, Michela Alioto-Pier, and Eric Mar did not return the Guardian’s calls for comment.

PIECES OF THE PUZZLE

Adding to the drama of the mayoral succession decision will be the new Board of Supervisors’ inaugural meeting on Jan. 8, when the first order of business will be the vote for a new board president, who will also immediately become acting mayor if the office has been vacated by then and the previous board hasn’t chosen a new mayor.

While Newsom and his downtown allies are clearly banking on the hope that the new board will select a politically moderate caretaker mayor, something that three of the four new supervisors say they want (see “Class of 2010,” Dec. 8), the reality is that the new board will have the same basic ideological breakdown as the current board and some personal relationships that could benefit progressives Chiu and Avalos.

Daly said downtown is probably correct that the current board is more likely than the new one to directly elect a progressive mayor who might run for the office in the fall, such as Campos or former board President Aaron Peskin. But he thinks the new board is likely to elect a progressive as president, probably Campos, Chiu, or Avalos, and that person could end up lingering as acting mayor indefinitely.

“They really haven’t thought through Jan. 8. Downtown doesn’t like to gamble, and I think it’s a gamble,” Daly said. “There’s a decent chance that we’ll get a more progressive mayor out of the leadership vote for board president.”

Avalos said it “would be a disaster” for the board president to linger as acting mayor for a long time, complicating the balance of power at City Hall. But he wouldn’t mind holding the board gavel. “I think I would do a good job as board president, but I’m not going to scratch and claw my way to be board president,” Avalos said. “I’d be just as happy to be chair of the Budget Committee again.”

Avalos said he thinks it’s important to have a mayor who is willing to work closely with board progressives and to support new revenues as part of the budget solution, which is why he would be willing to support Chiu, Campos, or Mirkarimi for mayor, saying “All of them could do a good job.”

Given the progressive majority on the board, it’s also possible that there will be a lingering standoff between supporters for Chiu, a swing vote in budget and other battles who has yet to win the full confidence of all the progressive supervisors, and former Mayor Art Agnos, who has offered to serve as a caretaker. Some see Agnos as more progressive than the other alternatives pushed by moderates, including Sheriff Michael Hennessey and San Francisco Public Utilities Commission head Ed Harrington.

Moderates like Dufty are hopeful that a couple of progressives might break off to support Hennessey (“From the first minute, he knows everything you’d need to know in an emergency situation,” Dufty said) or Harrington (“I could see him stepping in and closing the budget deficit and finding a good compromise on pension reform,” Dufty said) after a few rounds of voting.

Mirkarimi is openly backing Agnos. “He has evolved, as I’ve known him, in the days since being mayor,” Mirkarimi said. “I think we’ve spent too much time on finding the progressive guy to be mayor than on setting up what a progressive caretaker administration would look like.” And then there are the wild cards, like state Sen. Mark Leno and City Attorney Dennis Herrera. Herrera’s a declared candidate and Leno has made it clear that he’d take the job if it were offered to him.

Given the fact that supervisors can’t vote for themselves, it’s difficult for any of them to win. “I don’t think it’s likely that a member of the Board of Supervisors will get enough votes to be mayor,” Avalos told us, although he said that Chiu is the one possible exception.

But to get to six votes, Chiu would have to have most of the progressive supervisors supporting him and some moderates, such as D10 Supervisor-elect Malia Cohen (whom Chiu endorsed), D8’s Scott Wiener, and/or Chu (who might be persuaded to help elect the city’s first Chinese American mayor).

That would be a delicate dance, although it’s as likely as any of the other foreseeable scenarios.

Local hiring — and purchasing

Jesse Hawthorne Ficks

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December 14, 2010

1

EDITORIAL The local hire ordinance that the Board of Supervisors approved last week once again puts the city on the cutting edge of progressive policy. San Francisco’s law, sponsored by Sup. John Avalos, is the strongest in the country, and ultimately will mandate that 50 percent of all the people hired on public works projects live in the city.

The politics of the bill were tricky; the local building trades unions opposed it on the grounds that many of their members live out of town and that hiring decisions should be based on seniority, not on residence. But eight supervisors recognized that a local hire law not only benefits the large numbers of unemployed San Franciscans; it’s also good economic policy for the city.

Numerous studies have shown that money paid out to local residents gets spent in town, and circulates in town, and creates more economic activity. That translates into fewer social and economic costs for the city and increased tax revenue.

There are costs to the law. Someone has to monitor compliance, and that requires additional city spending. Training local workers for union jobs may raise the price of some projects. But in the end, the studies all show that keeping money in the community is worth the price.

Avalos deserves tremendous credit for negotiating with labor and other interested parties, accepting compromises that don’t damage the impact of the measure and lining up eight votes to pass it, so even if Mayor Gavin Newsom vetoes it, the board can override the veto.

Now the board ought to apply the same principle to a local purchase law.

One of the major complaints small businesses have in San Francisco is their inability to get city contracts. The qualifying process is complicated and expensive — and when big out of town corporations with plenty of resources to put together bids can also offer lower prices, locals get left out.

The city spends vast sums of money, hundreds of millions of dollars a year, buying goods and services. Every dollar that leaves town translates into far more than a dollar lost to the local economy.

In fact, a 2007 study by Civic Economics showed that 38 percent of the money spent on locally based retailers in Phoenix, Ariz., remained in town and recirculated in the local economy; only 11 percent of the money spent at chain stores stayed in town.

That’s a huge difference, and would translate into many millions of dollars for the San Francisco economy. (Over time, the impact of local hire and local purchasing laws would be much greater than the one-time burst of income expected from the America’s Cup race.)

There are complications with any local purchase law. Not everything the city needs can be bought locally. Nobody in San Francisco, for example, makes train cars or fire engines. But on everything from office supplies and cars to uniforms and consulting contracts, there are (or could be) local companies handling the city’s business.

As with the Avalos law, there would be costs. Some small local suppliers would be unable to match the price that big chains offer. But the overall economic benefits to the city would greatly exceed those price differentials.

San Francisco currently gives a modest preference in bidding to local firms. But if the supervisors applied the Avalos principle and mandated that, within five years, a certain percentage of everything the city buys would have to go to local firms, city officials would be forced to do what they ought to do anyway: look local first.

Every year during the holiday season, the mayor and business leaders urge residents to shop locally. When the new Board of Supervisors takes over in January, the members should start looking beyond rhetoric and start working on legislation that would keep the city’s money in the city.

Race against the clock

Jesse Hawthorne Ficks

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December 14, 2010

1

rebeccab@sfbg.com

City officials were poised to finalize an offer to host the 34th America’s Cup after amending a sweetheart deal that had city taxpayers heavily subsidizing Oracle billionaire Larry Ellison’s yacht race. But the question now is whether Ellison will accept the new proposal.

The original deal negotiated between representatives for Ellison and Mayor Gavin Newsom called for ceding 35 acres of city-owned waterfront property to Ellison’s America’s Cup Event Authority (ACEA) rent-free, but it was criticized as too expensive for a city facing massive budget deficits (see "The biggest fish," Nov. 30).

So at the Dec. 8 meeting of the Board of Supervisors’ Budget & Finance Committee, that deal was jettisoned in favor of a cheaper alternative that shifted the race venue to the city’s Northern Waterfront and promised long-term leases on commercially reasonable terms. The new agreement appeared on track for approval at the Dec. 14 Board of Supervisors meeting, after Guardian press time.

At the same time, new doubts arose at the last minute when race organizers stated publicly that they were more likely to reject the new option than the original plan because the financial terms were not as attractive. Although expectations have been high all along that San Francisco would be selected to host the next Cup, the team cast doubt on the outcome by publicly criticizing the new plan. According to a source familiar with negotiations, that move came as a jarring surprise to city officials. Nonetheless, supervisors approved the proposal at a Dec. 13 special meeting and sent it on to the full board.

Newsom’s Office of Economic and Workforce Development (OEWD) spent about four months in negotiations with Ellison’s BMW Oracle Racing Team and the ACEA to hash out a host city agreement. The Northern Waterfront scenario emerged in late November after Budget & Legislative Analyst Harvey Rose cautioned in a fiscal impact assessment that the original deal would have cost the city an estimated $128 million, including impacts to the general fund and losses from entering into rent-free leases.

The fundamental shift in the plan at this late stage, less than three weeks before the deadline for a final decision, reflected some deft maneuvering on the part of the board even in the face of intense pressure to approve a binding long-term agreement on an unusually short timeline. Sup. Ross Mirkarimi and Board President David Chiu, who expressed reservations about the original proposal but strongly favored the idea of bringing the race to San Francisco, were able to deflect a deal that would have harmed the city in favor of a wiser alternative by reshaping the proposal at the 11th hour.

"I was a little bit surprised by some of the recent press," Mirkarimi noted at the Dec. 13 meeting, referencing reports that the team was considering rejecting the bid. He asked everyone to keep in mind that "we’re working with public dollars and purse strings."

But the Mayor’s Office supported the modified deal. Press Secretary Tony Winnicker told the Guardian: "The Northern Waterfront bid is good for the city, great for the port, and will provide a spectacular experience for the America’s Cup. Hosting the America’s Cup will bring more than $1 billion in economic activity and thousands of jobs to San Francisco and showcase the city unlike almost any other event."

Speaking at the Dec. 8 committee meeting, Chiu also voiced his support for hosting the Cup. "Obviously this will have enormous benefits," Chiu said. "If this were to come to San Francisco, this will mean $1 billion and likely $1.2 billion in economic activity during the greatest recession since the Great Depression. We cannot ignore this opportunity."

The difference in the two scenarios amounts to tens of millions of dollars in savings. According to a fiscal feasibility analysis released Dec. 13 by the Budget Analyst, the net loss to the city under the Northern Waterfront alternative would be $11.9 million, compared to $57.8 million under the prior agreement (not including costs relating to the rent-free leases proposed earlier). However, that impact doesn’t account for a $32 million contribution that the America’s Cup Organizing Committee is expected to provide to the city to defray municipal costs.

Under the Northern Waterfront plan, Piers 30-32 and Seawall Lot 330 would be leased to race organizers for 66 and 75 years, respectively, on "commercially reasonable terms" with development rights included. The race organizers would receive a rent credit in exchange for investing an estimated $55 million for infrastructure improvements.

Rose’s office also found that the city would realize a net gain by transferring development rights for Piers 30-32 and Seawall Lot 330 with commercially reasonable rents, generating a net $12.3 million in new tax and lease revenues.

"This deal has significantly improved from the prior deal that went before you," Rose noted at the Dec. 13 Budget & Finance Committee meeting. The main reason for the reduction in costs was that under the original plan, ACEA would have been granted rent-free development rights to Pier 50, a 20-acre waterfront parcel needing costly renovations, for 66 years. Removing that costly improvement and shifting dredging costs from the city to race organizers made the prospect more feasible for San Francisco.

Piers 26 and 28 were added to the equation late in the game, too. Under the new plan, ACEA has the option to spend an additional $25 million renovating those piers in exchange for leasing them for 66 years with rent credits. Ted Egan, an economic analyst with the City Controller’s office, noted that the piers were expected to last for only 15 years if they weren’t renovated.

"Without the America’s Cup stepping forward, we lose them, and we lose any potential development that could take place at those piers," he noted. Port Director Monique Moyer also praised the plan at the Dec. 8 meeting, saying piers that would have continued to deteriorate could now be revitalized.

Chiu amended the agreement to secure greater assurance that the city would receive a $32 million contribution from the America’s Cup Organizing Committee (ACOC), the fund-raising arm of the race organizing team, to defray municipal costs. Prior to Chiu’s amendment, there was no guarantee that the city and county would receive that money, Rose pointed out.

Jennifer Matz, director of OEWD, noted that ACOC was "committed to using best efforts" to raise $32 million over the course of three years. Under the agreement, if the committee hasn’t successfully raised $12 million by one week after the environmental review has been completed, the city reserves the right to call off the deal.

The new plan seemed likely to pass muster even with Sup. Chris Daly, the most vocal opponent of the original plan. "One thing that’s clear is that it’s a whole lot better than the previous proposal," Daly said.

Ellison, who captured the 33rd America’s Cup off the coast of Spain and holds exclusive power to choose which city will host the next sailing match, has set Dec. 31 as the deadline for his final decision. But a source familiar with the negotiations told the Guardian an announcement was expected even sooner.

Ironically, there was little doubt that Ellison would select San Francisco until the very end of the process, when the city finally reached an agreement that seemed to satisfy the Mayor’s Office, the Board of Supervisors, and the economic analysts. At press time, it was still an open question whether Ellison will go for it.

"With this latest bit of vetting by us, I think the city has done the utmost it possibly could do in putting forth the best plan it possibly could craft in such a short period of time," Mirkarimi said at the close of the Dec. 13 meeting. "I think that San Francisco stands to be the best contender for hosting America’s Cup, and let that message ring well toward Mr. Ellison, and around the country, and abroad."