David Chiu Archives — Page 17 of 29 — San Francisco Bay Guardian Archive 1966

Question time’s a waste of time

Zelda Bronstein

-

April 13, 2011

I strongly supported the measure that mandates that the mayor of San Francisco appear before the supervisors once a month to take questions. But the rules adopted by the board — with waaay too much consultation between Mayor Ed Lee and Board president David Chiu — have turned this great idea into a farce.

The supervisors have to submit questions in writing a week in advance. The mayor in essence stands there and reads pre-written answers. Aaron Peskin, one of the backers of question time, sent a text to Sup. Chiu’s office during the April 12th board meeting and made the point:

“Your idiotic question time rules have led 2 an absurd charade of folks reading (poorly) 2 eachother. What a joke.”

It’s embarassing. The board needs to rewrite the rules, now, and allow some actual interchange and debate, which is what the whole thing was supposed to be about in the first place.

Taxes, Tech, and Talking Back to the Man

Sasha Cuttler

-

April 13, 2011

29

Taxes, Tech, and Talking Back to the Man

This issue’s story on the destructive fallacies pushed by advocates of supply-side economics — “The failed experiment” by David Cay Johnston, the country’s top tax policy journalist, a story that is running simultaneously in alt-weeklies around the country – really couldn’t come at a better time. Please, read it, and consider our current moment.
On the national level, President Obama has joined the Republicans in cutting up the social safety net and regulatory system in order to maintain indefensible inequities in our tax system. And on the local level, one-time progressive Sups. David Chiu and Jane Kim have joined fiscal conservatives on the board to approve tax breaks for corporations and landlords and promote the flawed but poll-tested argument that the payroll tax is a “job killer.”
Yet that argument – we all need jobs so we shouldn’t challenge the corporations and rich people that provide them – has become so widely accepted that politicians wave it like a get-out-of-scrutiny-free card at an increasingly desperate public. So it’s crucial that writers like Johnston point out that much of what these people are saying simply isn’t true. Supply-side economics is destroying our country, not helping it.
The evidence for the failure of this 30-year economic experiment is clear in Johnston’s piece, as well as on the streets of San Francisco and every major American city. It’s reflected in our pervasive public budget deficits at a time of record corporate profits and our insistence on running our fossil-fueled economic system at full speed even as the poor and planet lay bleeding by the roadside.
Our deference to corporate titans is so pervasive and deeply instilled that it even applies to Black Rock City LLC, the corporation that stages Burning Man, an event and culture based on equally participating in a decommodified gift economy, but where few burners are willing to question the board’s plan for cashing out and creating a new governance structure.
In this and almost all exercises of corporate power and unchecked decision-making, the people feel powerless. If Twitter, Zynga, and Yelp threaten to leave and take their jobs with them, we have to accept their demands, right? And if not powerless, then simply grateful for the jobs, culture, and technologies that they have so generously bestowed upon us. We’re like slaves who appreciate the food, shelter, opportunities, and security we’ve been given and know how unwise it would be to rebel.
But once upon a time, the people understood that corporations are originally created as instruments of public good, not just private profits. They are created with charters approved in the name of the people, permission that could be revoked at any time if there was the political will to do so. But that will has long since been broken, the wage slaves and their representatives too scared, self-interested, or content to even dream of their own liberation. And it really doesn’t matter whether the corporations are publicly held or privately owned, LLCs or nonprofits, we still see them as the keys to our survival and well-being, so the last thing we want to do is make demands on them that might be seem unreasonable and ungrateful.
And so it goes. We willingly accept that the value of our labors is not our own. We let the rich get richer and richer – now to levels unheard of in any other civilized country – and pass the bill on to our grandchildren, the people who will finally be forced to deal with our folly, fear, and foolishness as the oceans rise and civil society recedes.
But I’m not simply going along with it, and I’m not alone. We need to resist this doomed system, for posterity’s sake if nothing else. I’ll keep writing polemics like this one, covering the campaigns of people like Sup. John Avalos who are willing to buck this trend, exposing corruption and sleeping watchdogs, and giving a forum to malcontents like Chicken John who raise questions that demand to be answered.
I fervently believe that the decisions made by publicly accountable individuals, in open forums and with the best information available, are infinitely superior to those made behind closed doors by people who have a self-interest in the outcome. And that’s why I’m proud to work for a progressive publication like the Guardian that speaks truth to power and features stories like “The failed experiment.”

Seeking a watchdog’s watchdog

Andrew Lam

-

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.”

Avalos for mayor? He’s talking about it

Zelda Bronstein

-

April 12, 2011

130

The San Francisco mayor’s race is taking a new twist: Sup. John Avalos — one of the best, most consistent and productive progressives on the board — is looking at running.

Avalos told me he wasn’t interested in the interim mayor job and “this was never on my mind when I ran for supervisor.” But the process of selecting an interim mayor and the politics of Sup. David Chiu’s re-election as board president left him deeply disturbed. “I was blown away by how the process was perverted into a backroom deal based on personal ambition,” he said. “The side of the progressive movement that’s about good government and transparency was lost.”

So he’s been meeting with potential supporters and discussing what an Avalos for Mayor campaign would look like.

Although he’s only been in office two years, Avaos has been Budget Committee chair and has a solid and impressive legislative record (the local hire law being his most recent accomplishment). He has as much experience as Matt Gonzalez did when he ran for mayor (and, obvioulsy, as much experience as Chiu, who is also running.)

He makes the case that the progressive movement is better off in the long term if there’s a strong progressive in the race: “If we don’t have someone running, we won’t do as well in district elections next time,” he said, noting that the progressive victories in 2000 and 2004 were helped by the energy generated by Tom Ammiano’s mayoral campaign in 1999 and the Gonzalez campaign in 2003.

Not everyone in progresive poltics agrees with that analysis; I’ve heard from a number of community leaders who question whether what everyone agrees would be a longshot mayoral campaign is the best use if prorogressive resources right now.
But Avalos, to his immense credit, isn’t going to do this on his own. “I don’t believe in just announcing one day,” he told me. “I’m going to talk to people, and if there’s enough support for me, fine, and if there isn’t, I won’t run.”

That’s a sharp contrast to Chris Daly, who has pretty much announced that if no other progressive runs, he will. And with all due respect to the former District 6 supervisor — who has done a tremendous amount of good for the city, and I mean that with all sincerity — Daly’s not the right person to carry the progressive standard in the November mayor’s race.

Rule change for Mayor Ed Lee could expand beyond special case

Sasha Cuttler And Mary Magee

-

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

-

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.

The case for class warfare

Zelda Bronstein

-

April 5, 2011

36

By now, just about everyone who cares about the economic wars in America has read the Joseph Stiglitz piece in Vanity Fair. It’s nothing new, really — the same stuff a lot of people have been saying for a long time now. But the fact that it was written by a Nobel Prize winner and that the piece ran in a popular magazine typically dedicated to the lives of the rich and famous has brought a lot of welcome attention to the message:

In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

And:

Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul.

And:

The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs. The rich don’t need to rely on government for parks or education or medical care or personal security—they can buy all these things for themselves. In the process, they become more distant from ordinary people, losing whatever empathy they may once have had. They also worry about strong government—one that could use its powers to adjust the balance, take some of their wealth, and invest it for the common good. The top 1 percent may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.

Over at CalBuzz, they’re talking about how class warfare may be the next big winning strategy in California politics:

As a political matter, it’s time for Jerry Brown to reach for his inner La Follette and start sounding some good, old fashioned, Wisconsin style populism. Instead of going after the railroads, as La Follete did, however, Brown should aim at the ultra-wealthy, the oil companies and other greedy corporate interests who have a) allowed the California Republican Party to gridlock the budget process and b) fought to keep special corporate loopholes, including outrageously low property tax rates from Prop. 13.

The latest polls show that more than 75 percent of Californians (including 60 percent of Republicans) think it’s a good idea to raise taxes on people who make more than $500,000 a year. The California Federation of Teachers is talking about a ballot initiative for the fall. Brown ought to be on board with that; hell, he ought to be out front making the case.

I’d like to see some Inner La Follette in San Francisco, too. City Attorney Dennis Herrera, who seems to support the Twitter tax break, is at least talking about the need to refrom the local tax structure. Although he’s using the same dumb old language of the anti-tax folks:

The city’s economic analysts have estimated that the current business payroll tax depresses employment in San Francisco by 1 percent, by driving up costs to employers to hire more workers. For some real-life perspective, that’s about 5,500 jobs that would otherwise be available to unemployed and under-employed San Franciscans right now. City economists also blame the current business payroll tax for depressing local wages—which, in turn, depresses local spending.

Which is enough to make me scream. The payroll tax doesn’t affect any rational business decision on hiring; it can’t. It’s just too minor a factor. And if you want to say that without a payroll tax, a company with several hundred employees might be able to hire a couple more, you’re missing the point: The payroll tax is just a rough estimate for the size of a firm — and if San Francisco had a gross receipts or commercial rent tax instead, that company would be paying roughly the same amount for a different tax.

Of course, if we had a better tax structure, more companies would pay; right now, so many outfits have so many ways to avoid the payroll tax that only about ten percent of local businesses pay it at all. And I’m in complete agreement with Herrera (and David Chiu, and others) who argue that we need to get rid of the payroll tax altogether and create a better, fairer business tax. But that’s not because very modest taxes (and that’s what the city charges) drive companies out of San Francisco or prevent job growth — it’s because too many pay nothing at all. (Yes, applying the payroll tax to stock options is a big financial disincentive. It’s also easy to fix, without giving half of the central city a tax break that will cost hundreds of jobs. Yes: Cost jobs. Because when the city loses tax revenue, it has to lay off employees. Public sector jobs are jobs, too.)

I have been asking — begging — city officials for 20 years to get serious about tax reform, to put together a summit, a task force, a committee that can overhaul the entire local tax structure. But let’s not talk about lower taxes creating jobs. That’s just nonsense. Investment creates jobs. Good education and infrastructure attracts businesses. The goal of a new tax policy ought to be to make the city’s revenue generation more progressive (the rich pay more) and more fair (almost everyone pays something) — and to bring in at least a few hundred million more dollars a year.

In fact, the goal ought to be to follow the advice of Professor Stiglitz and do whatever we can here at home to fight wealth inequality (the same way we do our small part here in SF to fight global warming, childhood obesity and overuse of plastics).

I’m not a big fan of war, but I believe in self-defense — and over the past 30 years, the powerful interests in this country have waged an all-out war on the poor and the middle class. And for the most part, we haven’t bothered to fight back. We’ve surrendered, over and over again, and now we’ve become a nation of serfs, forced to work more hours for less pay with less security and a declining quality of life — just so the top 1% can be richer than ever before.

At the great T. Pynchon wrote:

They’ve been paying you to love it

But the time has come to shove it

And it isn’t a resistance, it’s a war.

Right here in San Francisco, too. Can we at least talk about that? Please?

Why does a “burgeoning” neighborhood need tax breaks?

Sasha Cuttler

-

April 4, 2011

43

Why does a “burgeoning” neighborhood need tax breaks?

The San Francisco Chronicle has run two stories in the last two days about the huge influx of new arts-related businesses coming to the supposedly “blighted” mid-Market area, some of them drawn by a 10,000-square-foot space the city’s Film Commission opened as an incubator for independent filmmakers (the Examiner had the story last week). Yet city officials and the daily newspapers are still pushing a $22 million tax exclusion zone for the area, which will be considered by the Board of Supervisors tomorrow (Tues/5), using discredited arguments that nothing will locate here without big tax breaks.

“The incubator project will benefit both the San Francisco film community and the evergrowing Mid-Market Arts District,” Mayor Lee said today in a Mayor’s Office press release. “Establishing programs such as this helps ensure the health of the Mid-Market area as it continues to grow and become a burgeoning arts community.”

“Listen to the recent City Hall political debates, and you’d think the beleaguered Mid-Market neighborhood was on the verge of becoming the next Silicon Valley with Twitter at its core,” was the lede in a front-page story in today’s Chron listing at least seven major arts-related businesses that are moving to mid-Market, drawn by the cheap rent, large buildings, and artistic synergy and not the tax breaks.

At least three supervisors are also working on legislation to excuse tech companies from paying payroll taxes on stock options, which City Economist Ted Egan said was the main reason to believe Twitter would follow through on threats to leave town if it doesn’t get a tax break. And Guardian investigations have revealed the lies and corruption behind how the tax exclusion zone was created.

Yet rather than prompting a reconsideration or scaling back of a tax giveaway that even Egan — a fairly conservative, free-market kinda guy – says doesn’t make sense for most of the properties that have been thrown into this tax exclusion zone, Sups. Mark Farrell, Carmen Chu, Malia Cohen, and Scott Wiener have recently joined the original sponsors, Sups. David Chiu and Jane Kim, as co-sponsors, giving them the six votes they need.

Let’s be clear: This isn’t about helping mid-Market and the Tenderloin. Hell, with all the business interest that is already occurring there naturally, the likelihood that this tax break will raise rents and force out low-income residents, small businesses, and non-profits is now greater than ever. But then again, this was always about helping landlords and doing a big political favor for the rich in an election year more than it was about any of the platitudes that have dripped from the lips of these craven political animals.

Old-school land-use power politics is back at City Hall, sold to the rest of us with the false promise of helping the poor. I guess some things never change.

Redmond traded for Nevius in mid-season shocker

Sasha Cuttler

-

April 1, 2011

4

Redmond traded for Nevius in mid-season shocker

Bay Guardian Executive Editor Tim Redmond has been traded to the San Francisco Chronicle for columnist C.W. Nevius and a right-wing associate editor to be named later, it was announced today.

As part of the deal, the Chronicle will pick up the remainder of Redmond’s $25.3 million contract. In addition to a future editor, the Chron will pay the Guardian an undisclosed amount of money “just to get Nevius the fuck out of here,” Chronicle Editor Ward Bushee said.

“We respect all that Chuck has done for us, but when we realized he couldn’t even get a hippie recycling center evicted by the deadline, we knew it was time to make a change. This is the big leagues, boyo.”

Former Sup. Michela Alioto-Pier, one of the many die-hard Nevius fans who has become disillusioned of late, was more harsh. “Nobody pays any attention to his shit anymore,” she said.

Nevius, a former sportswriter, has been struggling lately with the transition to a political position. His Column Effectiveness Percentage has dropped to .212 and his embarrassing play on the Haight Asbury Neighborhood Council Recycling Center and the Park Merced development have spurred calls for his removal.

Redmond has been struggling, too, and is widely considered to be grossly overpaid. His CEP fell below .300 for the first time this year, a problem he has blamed on age and brain damage. He recently cut his hair in an effort to clear some of the heat from his leftist political rhetoric, but his last four pieces on tax policy have been complete failures – not one politician has held a hearing, made a statement or done anything but quietly murmur that Redmond “has gone off the deep end.” He has refused repeated calls to open up his stance.

Redmond insists that none of his problems are his own fault, and suggested that his lack of effectiveness is due to some sort of shadowy “juice” at City Hall. “David Chiu and Jane Kim can’t possibly be throwing curve balls like that on their own,” he said.

Under the terms of the deal, Nevius will immediately take over Redmond’s job and Redmond will become the Chron’s Conservative Suburban Twit.

Redmond announced that he will be selling his house in Bernal Heights and moving to a gated community in the East Bay. “If I’m going to trash San Francisco every day, I need to be living in a place where there’s no music and the cops shoot homeless people on sight,” he said. “If I’m going to become a conservative, it’s important to eliminate any actual connection to the people I’m writing about.”

April Fool’s.

Board delays Yellow Pages vote

Sasha Cuttler

-

March 30, 2011

3

In an attempt to assuage big business interests, the Board of Supervisors decided yesterday (Tues/29) to delay the vote on an ordinance regulating the Yellow Pages, a piece of legislation that would create a three-year pilot program to rid the city of unsolicited phone books. A vote on the legislation is set for May 10.

The ordinance by Board President David Chiu passed the Land Use Committee on March 22. In attendance was a large opposition including the Yellow Pages Association, representatives of International Brotherhood of Electrical Workers and AT&T Advertising Solutions to stress the importance of the directory to small businesses and local jobs.

Although it appears the votes are there to pass it, supervisors including progressive David Campos and business-friendly Sean Elsbernd pushed for the delay so the city’s chief economist could undertake an analysis to understand how the “ban” would affect city businesses and to allow the public to continue to voice its opinions on the issue.

According to a previous Guardian article on the ordinance, many local businesses have chosen to advertise elsewhere, and many residents, including populations generally seen to use the Yellow Pages such as the elderly and non-English speakers, will still be able to easily obtain phone books if need be.

Alexia Marcous, Vice President of the Green Chamber of Commerce and a strong advocate in favor of the ordinance, said she was disappointed that the board chose to delay the vote.

“It’s politically motivated,” she told the Guardian. “Instead of doing what’s best for the city, they are stalling.”

While Marcous noted that it’s always prudent to obtain more information, it was unnecessary for the public to “provide further rebuttal” on the ordinance that she believes already has overwhelming support. Marcous states that some of the consequences of delaying the vote include the costs the city incurs for “dealing with the blight and litter and diverting the vital funds from more important issues.”

If the board decides to authorize the ordinance, Marcous sees San Francisco as a success story for other cities to emulate.

“It shows we are willing to do something about the egregious distribution practices that are only helping the Yellow Pages,” she said.

YPA Vice President of Public Policy and Sustainability Amy Healy posted on the Yellow Pages blog last week, before the vote was made, that the Yellow Pages Coalition “will be working diligently over the next week to influence the other members of the Board of Supervisors.”

The Parkmerced investors

Jesse Hawthorne Ficks

-

March 29, 2011

8

rebeccab@sfbg.com

Parkmerced is one of the largest rental properties west of the Mississippi, and with more than 1,500 rent-controlled units, it’s an important piece of the city’s affordable-housing stock. Among the residents who live in the neighborhood-scale apartment complex are seniors, young families, and working-class San Franciscans, some of whom have called it home for decades.

A plan for an extraordinary overhaul of the property envisions tearing down the existing low-rise apartments and nearly tripling the number of units with a construction project that could take up to 30 years. On March 29, after Guardian press time, the Board of Supervisors was scheduled to vote on whether to uphold the plan’s environmental impact report (EIR), a key milestone of the approval process.

The Planning Commission voted 4-3 to certify the EIR, and if the board followed suit by rejecting four different appeals filed against it, Parkmerced would be on track to clear final approval sometime in May.

San Francisco Tomorrow was among the groups that filed appeals against the Parkmerced plan. “They want to destroy a neighborhood without sufficient justification or mitigation,” said Jennifer Clary, the group’s president, citing concerns about traffic congestion, loss of an historic landscape, and the destruction of rent-controlled housing.

Julian Lagos, a resident of 18 years, filed an appeal on behalf of the Coalition to Save Parkmerced. “It’s a very blue-collar community, and they want to replace it with wall-to-wall luxury high-rise condos,” said Lagos, who lives in a unit that would be targeted for demolition under the development plan. “I call it ground zero,” he said. “And I tell my neighbors, ‘You’re living at ground zero.’ “

Mayoral development advisor Michael Yarne noted that most points highlighted in the EIR appeals had already been addressed, except one charging that there hadn’t been adequate consideration over whether a Pacific Gas & Electric Co. gas pipeline running underground near Parkmerced could be jeopardized by construction activity. “The answer to that is, that’s a really good question for PG&E,” Yarne said. But he asserted that it wasn’t a project EIR issue.

Elected officials’ reactions to the overall plan were mixed. Lagos noted that campaign filings showed that Sups. Carmen Chu and Sean Elsbernd had accepted donations from people related to the project, and he predicted that Board of Supervisors President David Chiu would be a swing vote on the issue. Chiu spent several hours touring Parkmerced the Friday before the vote. He did not return Guardian calls seeking comment.

A development agreement between the city and the developer, Parkmerced Investors LLC, promises that existing tenants will keep their rent control at the same monthly rates — even after the apartments they now reside in are razed to make way for new residential towers.

Such a plan typically wouldn’t fly under state law because the Costa-Hawkins Act prohibits a city from imposing rent control on newly constructed housing. Yet city officials, with input from the City Attorney’s Office, say they’ve constructed this deal so that it falls within one of the exceptions written into the state law, offering a legal defense in the event of a court challenge and a guarantee against affordable housing loss.

“The development agreement is like a constitution for land use,” said Yarne. “You can’t get rid of it.” If the project changed hands or the developer went bankrupt, the new owner would be bound by the same terms, Yarne said.

However, Mitchell Omerberg of the Affordable Housing Alliance cautioned that he didn’t believe there was any guarantee that rent-control housing qualified as an exception under Costa-Hawkins. “Like parking a semitruck in a motorcycle space, it’s a poor fit and a risky bet — even before you consider the antipathy to rent control of the California courts,” Omerberg wrote in an argument against the plan.

Tenants advocacy groups have pointed to recent court decisions negating affordable-housing agreements in development projects, saying the legal precedent makes the Parkmerced pact vulnerable to a court challenge. In response, Yarne said those cases had strengthened the city’s legal strategy for formulating the agreement to guard against such a challenge. “This agreement is actually greatly improved because of those cases,” he said.

Nevertheless, there’s a clear financial incentive for the developer to strip away the rent-control unit replacement and other valuable community benefits it is required to deliver under the terms of its agreement with the city. An independent analysis of the project’s financial plan found that if Parkmerced Investors LLC adheres to all the terms of the agreement as planned, its financial rate of return would be less than ideal.

Drafted by consultant CB Richard Ellis (CBRE) to provide an objective financial picture for the city, the report found that the developer’s estimated 17.8 percent rate of return was “slightly below the threshold required to attract the necessary private investment” because investors aim for at least 20 percent in this market. “This means that, based on current and reasonably foreseeable short-term market conditions, the project may not be economically feasible,” the report noted. It added a disclaimer saying that cash flow from rent payments could offset that risk.

That lower rate of return isn’t a cause for concern, Yarne said, but rather a sign of the city’s negotiating prowess, since “we’ve gotten as much as we can in terms of public benefits. That 17.8 percent rate of return shows that we’re probably at the max.”

At the same time, the financial analysis showed that the developer’s prospects improved under hypothetical “tested scenarios” where the expensive community benefits promised in the development agreement weren’t a factor. As part of the analysis, CBRE looked at how the numbers would change if the developer decided to build new market-rate units instead of replacing all the existing rent-controlled units, and found it would fetch a 19 percent rate of return. In a scenario where it stripped out additional costs such as a community garden and new transit line, the rate of return would jump to an eye-catching 23 percent.

But those scenarios are just a hypothetical way to arrive at conclusions about a project’s value, said consultant Mary Smitheran, who drafted the report. “The development agreement specifies that those items need to be provided,” she said.

City officials have given the impression that they’re nailing down a set of requirements that the developer, or any future property owner, cannot get out of. But the people behind this project are some savvy Wall Street investors who are no strangers to controversy.

Fortress Investment Group, a New York City-based hedge fund and private equity firm with directors hailing from Lehman Brothers and Goldman Sachs, gained a controlling interest in Parkmerced last year after Stellar Management couldn’t make the payment on its $550 million debt.

Stellar jointly purchased the property in 2005 with financial partner Rockpoint Group, setting up Parkmerced Investors LLC as the official ownership company. Stellar still manages the property, but Fortress has seized financial control. A recent report on the Commercial Real Estate Direct website noted that its $550 million debt had been modified recently with a five-year extension to 2016.

Fortress made headlines in 2009 after it stopped providing funds to Millennium Development Corp. for the Olympic Village project in Vancouver, British Columbia leaving the city on the hook for hundreds of millions to finish the job in time for the winter games. Meanwhile, Fortress CEO Daniel Mudd recently got formal notification from the U.S. Securities & Exchange Commission (SEC) that he could potentially face civil action relating to his former job as CEO of Fannie Mae, the government-backed mortgage giant, for allegedly providing misleading information about subprime loans.

Stellar, a New York City company run by real-estate tycoon Larry Gluck, was profiled in a 2009 Mother Jones article about Riverton Homes, a 1,230-unit Manhattan rental housing project built in a similar style to Parkmerced, which Stellar purchased in 2005. Although Stellar assured residents that their affordable rental payments would remain unaffected, hidden from view was its business plan estimating that half the tenants would be paying almost triple the rental rates by 2011. Since rents couldn’t ultimately be raised high enough to cover the debt payments, the complex went into foreclosure — but Stellar was shielded against loss because, on paper, Riverton was owned by a separate LLC.

Linh Le, a 36-year resident of Parkmerced and former Chevron employee, wrote to the Board of Supervisors in advance of the March 29 hearing to warn of the financial troubles the investors had experienced before.

“This project reflects a pipe dream that was hatched during an era of reckless spending, fake prosperity, and seemingly limitless money that has since crashed and nearly destroyed America,” he wrote. “The business model that Parkmerced based this plan on has failed and nearly ruined their enterprise. That era is over and the world has changed.”

Selling the Tenderloin

Jesse Hawthorne Ficks

-

March 29, 2011

3

steve@sfbg.com

Nobody wants Twitter to leave San Francisco, even if there is disagreement about whether it’s a good idea to give the company an estimated $47 million tax break to stay. But the most unsettling aspects of this deal are the unexplained, dramatic expansion of the tax giveaway zone and the unsupported claims that it will “revitalize” the mid-Market and Tenderloin areas without gentrifying them.

Nonetheless, the legislation creating a six-year payroll tax holiday for new jobs is on the fast track for approval after the Board of Supervisors Budget & Finance Subcommittee sent it on to the full board for consideration on April 5, denying the request by Sup. Ross Mirkarimi and other critics of the deal that the public be allowed to comment on a community benefits agreement with Twitter that is still being negotiated.

The deal was crafted mostly by the Mayor’s Office of Economic and Workforce Development, starting last year under Mayor Gavin Newsom (who has close ties to Twitter and its would-be landlord, Shorenstein Properties LLC) and seamlessly continuing under Mayor Ed Lee. For top OEWD staffers Jennifer Matz and Amy Cohen, keeping big businesses happy is a core mission, so their advocacy for this tax-cut package isn’t really surprising. It’s an article of faith with them.

David Chiu, the board president and mayoral candidate who is cosponsoring the measure, also professes a basic faith in the power of cutting business taxes and has a particular disdain for the payroll tax, which he calls a “job killer.” Chiu, who supported extending the payroll tax holiday for biotech companies last year, says this deal is consistent with his fiscally conservative approach to economic development and has even suggested doing similar tax exclusions in other San Francisco neighborhoods.

But the motivations are less clear for two other key proponents of the measure: Sup. Jane Kim and Randy Shaw, the Tenderloin Housing Clinic director and self-styled power broker for a part of town that he’s been seeking rebrand as Uptown.

Kim told us that she’s a progressive who philosophically opposes these sorts of supply-side economic schemes, but that she decided to champion the measure to keep Twitter from leaving and address blight in the neighborhood. Yet that doesn’t explain why she has drastically expanded the giveaway zone or made several public statements that aren’t supported by the facts, and Kim has stopped answering questions from the Guardian.

City Economist Ted Egan testified that there are no discernible economic development benefits to including the entire Tenderloin, and that the Twitter-induced economic boost would increase commercial rents. In other words, the primary economic benefits would be to commercial landlords.

At the same March 16 hearing, Kim claimed the measure will revitalize the Tenderloin without gentrifying it, something she calls one of her top concerns.

Shaw strongly supported Kim’s supervisorial campaign and is pushing this deal with almost messianic desire to call the shots in the neighborhood where he’s been building an empire with public funds for 30 years.

POWER BROKER

A Guardian investigation (see “Behind the tweets,” March 15) revealed that Shaw was a key architect of the deal: working closely with OEWD staff, adding properties into the tax exclusion zone, developing the talking points, rallying support for the legislation, and being given credit for the deal when city officials talked to landowners.

Being the champion for corporate tax breaks and large landlords is a new role for Shaw, who began his career as a progressive advocate for low-income renters, using lawsuits against landlords and social services contracts with the city to grow THC into a $25 million nonprofit corporation that controls much of the city’s single-room-occupancy housing stock. THC was a prime beneficiary of Newsom’s Care Not Cash program, which converted cash assistance for the poor into housing subsidies and support services, increasing THC’s government grants from $9 million in 2004 to $15.7 million in 2009. Recently THC was awarded a five-year city contract worth $82 million.

But if Shaw is still trying to promote the needs of the poor, he’s now doing it by casting his lot with landowners.

Shaw has lately been in fundraising mode as he tries to open a Tenderloin history museum next year in the Cadillac Hotel (where THC has acquired an ownership interest), and he has ambitious fantasies of turning a neighborhood that has long been one of the city’s poorest into an international tourist destination (see “The Test of the Tenderloin,” 9/28/2010). Who is he soliciting money from? We asked him, in writing, and he won’t tell us.

Shaw once stood with housing-activist-turned-supervisor Chris Daly in protesting plans by UC Hastings College of the Law to tear down low-income housing and build a parking garage — but now Shaw sat through the March 23 hearing on the tax break deal with Hastings CFO David Seward, who spoke in support of the proposal after Shaw added the property into the tax-free zone, saying it might help the ground floor retail businesses on the garage property.

Shaw still plays up his progressive roots and long advocacy for the Tenderloin, as he did during an emotionally overwrought presentation to the Budget & Finance Subcommittee on March 16, detailing his advocacy work over 30 years. “We are a neighborhood starved for investment,” said Shaw, who actually lives in the Berkeley Hills. “We cannot compete on a level playing field.”

But the “we” Shaw refers to isn’t really the poor people in his hotels, or the progressive leaders or movement that he has repeatedly criticized over the last year as “a political machine” that he’s fighting against in BeyondChron, a political blog he runs out of THC. Given the scant information in public records on why so many properties have been added into the district or the private discussions that led to those decisions, it’s hard to say who Shaw’s “we” is these days. But we’ve dug up a few more clues.

HIDDEN AGENDA?

In August 2009, THC entered into a partnership with Giampaolo “Paul” Boschetti, to buy a 50 percent interest in THC’s office building, a 3,692-square-foot space at 126 Hyde St. What was unusual about the deal was its documentary transfer tax of just $750, which translates into a purchase price of $150,000.

Records with the Assessor/Recorder’s Office show that even with Prop. 13 limiting annual property tax increases after the property’s base year of 1991, the THC building was actually assessed at $964,161 — and that the reappraisal triggered by the sale would value the building in the millions of dollars, based on comparable buildings in the area.

The city and THC/Boschetti have been in negotiations to determine what the building is really worth for property tax purposes. Those negotiations are confidential, although one city official told us that the financial claims by this property owner are very unusual. The Guardian has repeatedly asked Shaw whether he has any financial interests in properties in the district, questions he ignored until we unearthed the Boschetti deal.

“We own our headquarters at 126 Hyde with Paul Boschetti. We have no other business dealings or investments with him, and our entire space is used by THC,” Shaw wrote. Responding to a follow-up question about whether he has any other financial interests in the district, he wrote, “only 126 Hyde.” When we asked about the strange undervaluing of that property and his financial arrangements with Boschetti, Shaw asked for detailed questions in writing, which we provided but he still refuses to answer. Boschetti also has not returned repeated Guardian calls.

But Shaw’s tax-break advocacy could also help another Boschetti-owned property: the Aida Hotel on Market Street. Helping “two growing hotel chains” buy a hotel on mid-Market Street was cited as a top reason for giving the tax breaks in OEWD e-mails we reviewed, although references to hotels was blacked out in dozens of other documents provided to the Guardian, with city officials claiming they were exempt as “propriety information or trade secrets.”

Matz denies knowing about Shaw’s business arrangements and says the redactions were to protect the identities of the national hotel chains that have been negotiating deals to come here. Boschetti appears to be an active real estate speculator, cutting deals in the Tenderloin and mid-Market areas.

An SF Weekly cover story (“Randy Shaw’s Power Plays,” 3/27/1996) details how Boschetti bought the Hotel Burbank in 1986, renaming it the Hotel Verona and converting it from a residency hotel for the poor into a tourism hotel, despite a city law against such conversions that Shaw worked on and has sued landlords under. “And though Shaw has battled tourism hotel conversion since the beginning of his career, he won’t comment on Boschetti, although he takes time out to praise the hotel owner as a good landlord,” reads the article.

City records show Boschetti also owns a 4,499-square-foot, 44-unit apartment building at 656 O’Farrell St.— just inside the tax exclusion zone that Shaw helped extend all the way to Geary and Polk streets — appraised at $2.6 million, as well as a commercial property at 2260-2264 Union St. worth $1.5 million.

An article in Poor Magazine (“Goodbye Mr. Stag,” 9/11/01) details Boschetti’s brief yet profitable ownership of properties at 1041 and 1035 Market St., once home to Mr. Stag Fashion Center. The article says Boschetti, “owner of the nearby Aida and Verona Hotels,” bought the property for $650,000, then sold it for $5.5 million in the spring of 2000 to a limited liability company, which then resold it four days later to another LLC for $7.75 million.

It is precisely this kind of lucrative real estate speculation — and its potential to affect the poor through rising rents and police crackdowns, such as the 18-hour-a-day police foot patrols that the city is promising Twitter — that most worries critics of the deal that Shaw is pushing.

“The people who are going to profit the most on this deal are big landlords,” said Gabriel Haaland with SEIU Local 1021, which is opposing the legislation.

Even those who support cutting a deal to keep Twitter here say they don’t understand why so many other properties were included. As Egan told us, “If you take Twitter out of the equation, this thing doesn’t make a lot of sense.”

Asaf Shalev helped with research for this story.

Focus on tax reform and scrap the sleazy giveaway

Sasha Cuttler

-

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.

Tax-break sponsor denies review of Twitter’s promises

Sasha Cuttler

-

March 23, 2011

30

The Board of Supervisors Budget and Finance Subcommittee today sent the controversial Twitter/Tenderloin tax exemption zone to the full board, scheduling it for April 5 and denying the requests of community groups and Sup. Ross Mirkarimi that the public be allowed to comment on Twitter’s community benefits agreement (CBA), which city officials are still negotiating.

“There should be public comment on the CBA,” Mirkarimi said. “Don’t shortchange the process. It undermines the integrity of the process.”

Yet Mirkarimi and others also say integrity has already been lacking from a process he called “sleazy,” with properties being added willy-nilly to the tax-exclusion zone by a private power broker with an apparent conflict of interest; no fiscal analysis given to the Muni line, police foot patrols, and other perks promised to Twitter; and little thought given to the bad precedent this sets for other businesses (a point given real resonance today when Bay Citizen reported that Zynga is also threatening to leave the city if it doesn’t get a deal similar to Twitter’s).

But the main issue at today’s hearing was why city officials are moving forward the agreement – in which Twitter would forgo paying about $17 million in payroll taxes over six years and another $40 million in taxes on its stock options – before the company has agreed to provide any community benefits, despite the fact that proponents of the measure cite benefits to the community as the main reason for doing this deal.

Sponsoring Sup. Jane Kim said that she and co-sponsor David Chiu, the board president and a candidate for mayor, would continue the item if a community benefits agreement wasn’t completed by the day before the full board meeting. Considering that the only leverage the city has to get a good community benefits package is a threat not to approve the legislation, opponents weren’t won over by that gesture.

Mirkarimi said both the Controller’s Office and Budget and Legislative Analyst’s Office should be given the opportunity to review the agreement, or at the very least the public should be given a chance to weigh in, something that would only happen if the legislation remained in committee or if the committee agreed to let it be heard by the full board sitting as a “committee of the whole,” which is the the only time the full board hears public testimony.

Kim considered the request for a moment, then whispered to committee Chair Carmen Chu, who announced that they would come back to this item and deal with the rest of the agenda first. Then Kim walked over to have a private chat with Mirkarimi – an apparent violation of the Brown Act, which requires public business to be conducted in the open rather than through private conferences involving two of the three committee members.

Kim and her board aide April Veneracion also conferred with Deputy City Attorney Cheryl Adams while the committee worked through other business and those interested in this item waited for a resolution. When the item was taken up again, Adams responded to questions from Kim and Chu by reminding the committee that supervisors are barred from intervening in contracts negotiated by city departments that involve less than $10 million or a 10 year term.

And because the tax exclusion legislation doesn’t include any community benefits for the Mid-Market area – it is written only to be a tax exclusion, with a vague requirement that large companies negotiate a CBA with the city – that negotiation is separate from this legislation, just like the safeguards against gentrification, consideration of neighborhood improvements, paying for Twitter’s other perks, and the possibility of a parcel tax on vacant commercial property. Kim has pledged to pursue those ideas later.

Critics of the measure were incredulous, openly asking why city officials would push through such a large tax giveaway without asking for anything in return as part of that agreement. As Mirkarimi said, “The city is blinking and blinking too soon.”

Perhaps the denial of public comment has something to do with how the tenor of the public comments today were markedly more critical of the deal than those last week. While several members of the South of Market Community Action Network (SOMCAN) criticized the deal and called for a delay so it could be more carefully scrutinized, perhaps the most poignant moment came from someone unaffiliated with any organized groups at the hearing: Kayren Hudiburgh, co-owner of Good Life Grocery, which she said played an important role in revitalizing the Cortland Avenue corridor many years ago.

“I pay my payroll taxes and I’m proud to pay my payroll taxes to support this city,” she said, appealing to the civic pride of others in the business community. “I think it’s socially irresponsible for Twitter not to want to pay its taxes.”

Does tax-break promoter have a conflict of interest?

Sasha Cuttler

-

March 22, 2011

16

Does tax-break promoter have a conflict of interest?

In last week’s Guardian, my investigation of the Twitter/Mid-Market tax exclusion zone showed that Tenderloin Housing Clinic director Randy Shaw played a central role in creating the district and policy that would cost city taxpayers about $22 million in lost payroll taxes (which officials hope to recoup in economic stimulation to the area).

Now, my continuing investigation reveals that THC business partner Paul Boschetti owns a hotel that was specifically targeted for the tax breaks, raising conflict of interest issues that city officials never asked Shaw about.

The legislation is sponsored by Sup. Jane Kim, whose supervisorial campaign was vociferously supported by Shaw and the BeyondChron blog he operates out of THC offices, and David Chiu, the board president and mayoral candidate. The proposal is scheduled for a vote by the Board’s Budget and Finance Subcommittee tomorrow (Wed/23) at 10 a.m. in board chambers.

THC operates low-income rental housing in the Tenderloin and beyond on a city contract, receiving $15.7 million in government support in 2009 and recently being awarded a five-year city contract worth $82 million. Boschetti – a real estate investor who owns the Aida Hotel on Market and has owned the hotels Verona and Burbank in the Tenderloin and other commercial properties around town – owned the 126 Hyde building that is THC’s headquarters.

In 2009, Boschetti and THC became co-owners of the building, with the documentary transfer tax indicating the sale was for just $150,000, which is very low for a large commercial office building. Officials with the Assessor/Recorder’s Office say they are still in negotiations with the property owners to determine what the building is really worth.

So what exactly is going on here? Could this relationship – and perhaps others that Shaw has developed with property owners who would directly benefit from the tax exclusion – be why Shaw has so aggressively expanded and pushed this district? And why have public officials so blindly followed the lead of a private power broker whose clout was built with public funding?

Over the last week, I’ve asked Shaw several times by e-mail whether he has any personal economic interests in the tax exclusion zone, and he ignored the question each time – even as he vociferously denied making threats to labor union officials who are opposing the plan. When I finally discovered the Boschetti documents in a public records search and asked him about it, Shaw wrote, “We own our headquarters at 126 Hyde with Paul Boschetti. We have no other business dealings or investments with him, and our entire space is used by THC. We moved into this space in 1986 and have occupied the entire building since 1991.” When I repeated my questions about whether he has any economic interests in the district, he responded “only 126 Hyde.”

Now that we’ve learned more about this transaction, Boschetti’s other property holdings, and a relationship between the two men that dates back for 25 years, we’ve forwarded Shaw a list of detailed questions. We’ve also placed calls with Boschetti and various city officials involved with the deal, all of whom have yet to call back, and we’ll let you know what we learn as our investigation continues over the coming days.

Supervisors scale back Mid-Market tax break

Sasha Cuttler

-

March 16, 2011

14

Supervisors scale back Mid-Market tax break

In the face of testimony that the proposed Mid-Market/Tenderloin/Twitter payroll tax exemption zone included properties that don’t need tax breaks to fill vacancies, sponsoring Sup. Jane Kim today amended the measure to exclude several large commercial properties along Market Street at the end of a long and heated hearing before the Board of Supervisors Budget & Finance Subcommittee, which then voted to continue the item for one week.

City Economist Ted Egan had recommended that change and others, including creation of a parcel tax on vacant commercial properties in order to encourage landlords to lower rents enough to attract tenants. That change would require voter approval and Kim told the Guardian that she supports the idea and has directed her staff to work on introducing that measure for the board’s consideration this year.

Yet many critics of the proposal – particularly members of the city’s biggest labor union, SEIU 1021, who criticized the city for giving millions of dollars to millionaire landlords and Twitter executives while asking low-paid city workers for salary and benefit givebacks – weren’t satisfied with those changes. They say testimony from Egan and others made clear that the tax exemption should be narrowly tailored to keep Twitter in town rather than including the entire Tenderloin, which Kim and Tenderloin power broker Randy Shaw tacked onto the original proposal.

Kim, who ran for office as a progressive, tried to counter criticism from her political base that the proposal would gentrify the area and potentially drive out low-income renters, non-profits, and small businesses, specifically asking Egan whether the proposal would increase commercial rents. Egan said it probably would: “That will exert rent pressures on a lot of the small businesses,” Egan said, adding that it would also probably drive up rents for nonprofit groups in the area, costs that could be passed on to the city taxpayers that support them. Egan also said that the proposal probably wouldn’t have any discernible economic development benefits for the Tenderloin.

But apparently Kim wasn’t paying close attention to those answers because her closing statement cast the legislation as a progressive reform aimed at helping a blighted area and small businesses, rather than the boon to landlords that critics say it is. “This is a huge boon to many of the small businesses that are struggling in this area,” Kim said, adding that, “Our office is very concerned about gentrification.”

Several community and business groups whose support had been solicited by Shaw, Kim, and the Mayor’s Office of Economic Development testified at the hearing, stating a belief that the legislation will revitalize the area and keep Twitter from leaving town. OEWD distributed a new letter from Twitter CFO Ali Rowghani stating, “I am happy to report that Twitter has signed a Letter of Intent with the Shorenstein group to lease a large block of space at the historic Furniture Mart building on Market and 9^th Streets. This LOI is contingent on the Board of Supervisors’ approval of the payroll tax exemption as part of the revitalization efforts, without which Twitter would not be able to justify the cost burden of staying in San Francisco.”

Critics called it a shakedown of city taxpayers. “We’re talking about giving away $22 million to a corporation valued in the billions,” former Sup. Chris Daly said, later adding, “Someone needs to stand up to corporate threats and do the people’s work.”

Yet even critics of the deal, such as Sup. Ross Mirkarimi said, “I don’t think there’s anyone in city government that wants to see Twitter leave San Francisco.” But he questioned the many hidden costs to taxpayers of the giveaway to Twitter, such as the Muni line and police foot patrols that have been promised, asking whether they have been calculated into the cost of this deal. “We do not have a cost for these things and you do have a valid question,” replied Budget Analyst Harvey Rose.

Other critics questioned the optimistic assumptions of how much Twitter will grow, how many businesses it will attract to the area, and whether that economic activity will continue after this tax holiday expires in six years – which is the basis for Egan’s conclusion that the $22 million giveaway will eventually pay for itself.

As the board begins to weigh into its next big controversial issue, a pension reform proposal that cuts deeply into city workers’ paychecks, the symbolism of corporate tax breaks weighed heavily on the proceedings.

“It’s going to be very difficult to get our members to do anything if you do this,” Brenda Barros, an SF General worker and SEIU 1021 member told the committee. “Are you with the workers or are you with the millionaires?”

But proponents of the deal insist that it’s simply about mid-Market blight and retaining Twitter. As Board President David Chiu, whose co-sponsorship with Kim means that this is likely a done deal, said, “It’s about changing the status quo.”

Behind the tweets

Jesse Hawthorne Ficks

-

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!”

Showdown time for Twitter/Tenderloin tax break

Sasha Cuttler

-

March 15, 2011

8

Showdown time for Twitter/Tenderloin tax break

After months of backroom deals to enlarge the tax giveaway zone – which I detail in this week’s Guardian, based on my review of thousands of pages of public documents – the Board of Supervisors Budget and Finance Sub-Committee tomorrow (Wed/16) will finally consider the mid-Market and Tenderloin payroll tax exclusion zone.

There’s been a flurry of last-minute activity on the proposed legislation, including the increasingly desperate and personal advocacy by Tenderloin power broker Randy Shaw, who has worked closely with Sup. Jane Kim and the Mayor’s Office economic development status to craft a deal that has grown from focusing on keeping Twitter in town to encompassing all of the Tenderloin, a tax giveaway that the Budget and Legislative Analysts’ Office says totals $22 million.

City Economist Ted Egan told the Guardian that he doesn’t understand why the tax exclusion zone was expanded so far and he doesn’t think inclusion of the Tenderloin properties or the big Market Street commercial properties (except for SF Mart, where Twitter is seeking to relocate) provides much economic stimulus. “If you take Twitter out of the equation, this thing doesn’t make a lot of sense,” he told us.

Egan submitted his report on the project for the Office of Economic Analysis to Controller Ben Rosenfield at the end of the day on Friday, but it’s still being tinkered with and has still yet to be released even though the hearing is tomorrow at 10 a.m. Egan said he recommended the area be reduced and that the city consider legislation aimed to lessening how much Twitter would pay on stock options as an alternative to the broader giveway.

As I write in this week’s paper, the reasons why the area was expanded – it now reaches north to Geary, west to Van Ness, and east to Mason, rather than just being on Market between Sixth and 10^th as originally proposed – is a bit of a mystery, although we know it was pushed by Shaw and Kim, as well as some members of the Office of Economic and Workforce Development staff.

Kim has decided to stop answering questions from the Guardian and Shaw also didn’t answer our inquires, including whether he has any economic interest in any properties in the tax exclusion zone, a question that OEWD staff said they never looked into as well. So what exactly is going on here?

Perhaps we’ll find out tomorrow, although Kim and co-sponsor David Chiu have decided to have the legislation heard by just the Budget Sub-Committee, which is chaired by fiscal conservative Sup. Carmen Chu, rounded out by Kim and Sup. Ross Mirkarimi. So this thing seems likely to be passed on to the full board as soon as Tuesday.

If Chiu and Kim continue their unquestioning support for legislation created by former Mayor Gavin Newsom they’ve chosen to champion and expand, this thing could be a done deal, although progressives (including Sup. Eric Mar, who endorsed Chiu for mayor but last week told the Guardian, “I’m voting with the progressives on this one”) are strongly opposing the deal and threatening a referendum on it.

So this will be the first big political fight of the new year, and the first big test of Chiu’s stated belief that there’s common ground to be found on all controversial issues.

Rec & Park begins HANC eviction before Board vote

Sasha Cuttler And Mary Magee

-

March 9, 2011

25

Just as the Board of Supervisors was gearing up to vote at its Mar. 8 meeting on a resolution defending the Haight Ashbury Neighborhood Council (HANC) Recycling Center against eviction from Golden Gate Park, Sup. Ross Mirkarimi noted that the Recreation & Parks Department had already filed an unlawful detainer against HANC, the first legal move in an eviction process. “I think that only escalates the matter, in what I believe is an unprincipled way,” Mirkarimi said.

“It’s very unfortunate that we did have this unlawful detainer action being filed,” Sup. David Campos noted. “I am hopeful that the city reconsiders that action.”

Mirkarimi had originally drafted the resolution to urge Rec & Park to “rescind the eviction of the HANC Recycling Center from Golden Gate Park.”
Board President David Chiu made a move to amend Mirkarimi’s resolution, replacing the part about rescinding the eviction with some language calling for Rec & Park to “negotiate in good faith.” Mirkarimi’s resolution also requested the Rec & Park and the Department of the Environment to establish a “comprehensive Parks recycling program utilizing the expertise, volunteer base, and facilities of the HANC Recycling Center in Golden Gate Park.”

Mirkarimi stressed the need for the city to assist HANC in finding a new location, and questioned how the loss of the recycling service offered by HANC could possibly be replaced by vending machines in nearby grocery stores. “We’re going to have a people-traffic problem … I guarantee that that problem’s going to escalate exponentially,” Mirkarimi said.

Mirkarimi’s resolution passed 6-5, with Sups. Scott Wiener, Carmen Chu, Malia Cohen, Sean Elsbernd, and Mark Farrell dissenting. However, the District 5 supervisor acknowledged in his comments that Rec & Park is not accountable to the board, so the resolution may not have any effect on the outcome. “Let’s keep in mind, decisions by Rec & Park — it’s one of two commissions citywide whose decisions are not appealable by the Board of Supervisors,” Mirkarimi said. “They work as a parallel government.” As things stand, Rec & Park commissioners are appointed by the mayor. Alluding to a charter amendment that would have changed that governance to include Board of Supervisors’ appointees, Mirkarimi said, “I’m sure soon that that’s going to come back.”

Reached by phone, Rec & Park Policy and Public Affairs Director Sarah Ballard did not directly answer a question about why Rec & Park went ahead with the legal filings for HANC’s eviction before the Board had a chance to vote on Mirkarimi’s resolution. “We have plans to build a community garden at that site,” Ballard said. “And we’d like to get started.”

Eric Brooks, speaking on behalf of Our City, did not mince words during public comment. “This is an agency that is out of control, totally full of itself, and belligerent to the Board of Supervisors and toward the public when it comes to these issues,” Brooks said. “I think it’s really time for the Board of Supervisors to take strong action to democratize Rec & Park, to change the way that the Rec & Park Commission is constructed so that the Board has a majority of those selected — until this agency can show that it’s not a rogue agency.”

Editor’s Notes

Jesse Hawthorne Ficks

-

March 8, 2011

1

Tredmond@sfbg.com

Back in the early 1990s, when the city was hurting for money even more than usual, Sue Hestor, the environmental lawyer who is always full of good ideas, called me up and suggested that the city start charging banks a fee for every storefront ATM. "They have turned the public sidewalks into their bank lobbies," she said. ATMs can lead to congestion and are magnets for crime; why shouldn’t the banks (which made a lot of money replacing human tellers with machines and costly private space with public property) help pay for some of those impacts? After all, banks escaped most local business taxes.

I ran that one up the old flagpole, and got nowhere. Back then, the city attorney was Louise Renne, who wasn’t known for aggressive approaches to revenue generation; she immediately told me it wasn’t legal. Back then, at least nine of the 11 supervisors were guaranteed to vote against anything that would offend big business.

A few years later, Tom Ammiano, who had become the only supervisor serious about brining in new money for San Francisco, suggested that the city put a tiny tax on transactions at the Pacific Stock Exchange. A similar tax in New York City had brought in millions. The exchange quickly marched up to Sacramento and got the state to outlaw the idea.

Down in Los Angeles, they’re trying to put a severance tax on oil production. Great idea. Too bad (not really) we have no oil wells here.

Lots of good ideas. It’s time for some more.

Things in San Francisco are really, really dire, and the district-elected supervisors are far more open to progressive approaches to the budget crisis. And if you’re willing to stipulate — as I am — that San Francisco has a revenue problem as much as a spending problem, and that the rich and big businesses are radically undertaxed, then its time for a comprehensive look at the ways this city might bring in some more money.

There are some nice concepts floating around. David Chiu, the Board of Supervisors president, is talking about reforming the city’s business tax. Sup. John Avalos tried to put a nickel-a-drink impact fee on alcohol wholesalers. Sup. David Campos thinks downtown should help pay for Muni service. I still like the notion of a city income tax.

But what we need is a long list of options — a complete guide to how a charter city and county in California in 2011 is legally allowed to raise money.

Dennis Herrera, the city attorney, is a smart guy; he’s figured out all kinds of ways to use his office to go after polluters, scam artists, and crooks. I suspect that with a bit of a nudge, he could help develop a few dozen legally sound ways to tax the wealthy individuals and institutions. That ought to be priority one for the Budget Committee.

I’m not sure what would work best, and nobody else is either. But we ought to have all the options.

Waste not

Jesse Hawthorne Ficks

-

March 8, 2011

0

sarah@sfbg.com

The San Francisco Board of Supervisors has delayed consideration of a city waste disposal contract while officials investigate a broad range of questions ranging from logistical considerations to whether to break up Recology’s current garbage collection monopoly.

Is it feasible to move the city’s entire infrastructure for waste and recycling to the Port of San Francisco? Would it be more sustainable to barge or rail the city’s trash directly from the port rather than drive it across the Bay Bridge to Oakland every day? Considering that recyclables get shipped from Oakland to Asia anyway, why not send them by barge rather than truck? Or is that idea just an empty gesture since recycles, mostly paper products, consitute only 10 percent of the waste stream?

Some of these questions are being studied as part of a survey the San Francisco Local Agency Formation Commission (LAFCO) is trying to complete by April, others as part of a longer-term investigation by the Department of Environment (DoE). At LAFCO’s Feb. 28 meeting, commissioners requested a survey of how other jurisdictions in the Bay Area procure trash collection, hauling, and disposal contracts.

Although the studies differ in scope and duration, both were triggered by a Feb. 3 Budget and Legislative Analyst (BLA) report that revealed that the annual cost to ratepayers of San Francisco’s waste system is $206 million. Yet only the $11 million landfill contract is being put out to competitive bid (see “Garbage Curveball,” 02/08/11).

The BLA report revealed that a 1932 ordinance intended to address territorial disputes around trash collection and transportation in San Francisco ultimately gave Recology (formerly NorCal Waste) a monopoly on all post-collection recycling, consolidation, composting, long-distance transport to landfills, and waste disposal contracts. The report triggered a political firestorm by recommending that the city replace existing trash collection and disposal laws with legislation that would require competitive bidding on all waste contracts and that rates for residential and commercial trash collection become subject to Board of Supervisors approval.

Faced with these recommendations, the Board of Supervisors Budget and Finance Committee asked Feb. 9 for a two-month delay on DoE’s proposal to award Recology a 10-year contract to dispose of San Francisco’s municipal solid waste at Recology’s Ostrom Road landfill Yuba County when its contract at Waste Management’s Altamont landfill expires.

DoE officials predict the WM contract will expire in 2015. But company representatives estimate the contract will last much longer, based on reduced volumes that San Francisco has been trucking to Altamont.

Sup. John Avalos, a LAFCO commissioner, requested that the LAFCO study include a map to give folks “a visual” of landfill locations throughout the greater Bay Area. “And there’s been an interesting discussion about the use of barging,” Avalos said, pointing to the flotilla of barges involved in building the Bay Bridge, which could be repurposed when that jobs ends. “A new maritime use could help the port raise revenue and reinvigorate other maritime uses on its property.”

At that point in the hearing, Sup. Ross Mirkarimi, the vice chairman of LAFCO, floated his “alternative barge plan,” under which only recyclables would get sent across the Bay to Oakland. Noting that he has met with Port Director Monique Moyer and Office of Economic and Workforce Development staff, Mirkarimi said that “the port is not equipped to deal with solid waste. But it is equipped to deal with recyclables, so this is something we should pursue.”

But Sup. David Campos, the chairman of LAFCO, clarified that the survey should still include a study of barging all trash. “Barging is complicated, but this is about providing basic information,” he said.

Records show the port reached out to DoE in 2009 with a letter that identified rail (but not barging) as an environmentally sustainable mode for moving waste from the city to its next landfill site.

In a June 23, 2009 letter to the DoE, Moyer and David Gavrich, president and CEO of the SF Bay Railroad (SFBR), stated that “rail directly from the port can not only minimize environmental impacts, it can provide an anchor of rail business for the port and a key economic development engine for the Bayview-Hunters Point community and the city as a whole.”

Recology’s trucks currently collect and haul about half the city’s waste to its recycling center, which sits on port-owned land at Pier 96. After the recyclables are offloaded for processing, the trucks haul the rest of the garbage through the Bayview and back onto the freeway to Brisbane, where it is loaded onto bigger trucks that haul the trash over the Bay Bridge each night to WM’s Altamont landfill near Livermore.

“It would seem most efficient to not double- or triple-handle the waste but to put it directly onto rail at the port instead,” Moyer and Gavrich wrote in 2009. “Collection vehicles could then go directly back out onto their routes, reducing time, fuel, emissions, and traffic impacts.”

The pair noted that SFBR and its affiliate Waste Solutions Group have used rail to haul more than 2 million tons of waste directly from the port in the past 15 years, using gondolas and 12-foot high municipal solid waste (MSW) containers on flat cars. They included an aerial photo showing Recology’s central recycling facility at Pier 96 and the extensive rail infrastructure and barge options that surround the facility.

But DoE never got back to them, Gavrich recalled last week as he fired up a SFBR locomotive and rode the rail tracks that crisscross the 20-acre port-owned facility that lies between SFBR’s outfit, Recology’s Pier 96 recycling facility, and the bay that is currently home to idle barges and rail cars that sit rusting a stone’s throw from the economically depressed Bayview.

“All that’s needed is two to four acres for an excellent transfer station,” Gavrich said. “Barge and rail access could not be better. It’s just waiting to be developed.”

In February, DoE officials told the Budget & Finance Committee that they had looked into and rejected barging as an option. But it turns out they did not conduct an official study. “There hasn’t been a study to date,” DoE’s Assmann said March 7, when the Guardian requested DoE’s barging report. “We had a discussion about it, but no formal policy.”

Assmann noted that DoE asked waste management companies that bid on the city’s landfill disposal contract to include a barging option. “But nobody did,” Assmann said, referring to Recology and Waste Management, the two finalists in the city’s landfill disposal contract bid process.

Assmann said DoE is currently doing a long-term study into three transportation and facilities options for waste using port facilities: the first option would involve moving the entire infrastructure for waste and recycling to the port. The second would be to use the port as a transfer facility for garbage, and truck, barge, or rail haul garbage from the port. The third would involve barging recyclables only from Pier 96.

Assmann notes that the majority of infrastructure for the city’s waste system is at Recology’s Tunnel Road facility on the San Francisco-Brisbane border, a situation he claims would make it impossible to design, permit, finance, and build new facilities at the port before 2015.

But Barry Skolnick, WM’s vice president for Bay Area operations, told the Guardian that 2016 is a more realistic estimate of the landfill expiration date. “At the current disposal rate, we do not believe San Francisco will exhaust its disposal volumes under the existing Altamont landfill contract until 2016 at the earliest,” Skolnick said. “There is plenty of time for the Board of Supervisors and LAFCO to explore best practices and options for its collection, recycling, composting, transferring, and residual waste disposal services.”

Skolnick noted that WM discussed extending the Altamont contract at the Budget & Finance Committee hearing and the LAFCO hearing, and is proposing to extend the city’s current contract by several years.

“We are preparing a proposed three-year extension of the disposal agreement for San Francisco’s review this week,” Skolnick said. “The extension would involve a price increase for disposal but less than the disposal rate offered under the proposed Recology rail haul to Ostrom Road in Yuba County. The three-year extension would provide disposal at the Altamont until 2019 or 2020.”

But Assmann noted that Recology, which currently pays the port $1 million a year to lease Pier 96, wants to expand its Brisbane facility on Recology-owned land. “We have offered to analyze [the Brisbane expansion] option,” Assmann said, estimating that a new transfer facility would cost $40 to $60 million, while a new integrated facility would cost $200 to $450 million.

“If the infrastructure moved to the port, that would have big positive implications for the port,” Assmann said, acknowledging that the port would lose money if Recology relocates entirely to Brisbane. Plus, Brisbane might demand fees from a new facility, he noted. “But consolidation would save ratepayers money in the long run because the operation would become more efficient.”

Unlike the LAFCO study, DoE won’t have its report ready by April, when the city needs to decide on the landfill contract.

“Our proposal is to look at the bigger picture,” Assmann said. “If the board approves Recology’s landfill contract, we’ll still go ahead and do it. The board can always delay its landfill decision. But this looks at infrastructure the landfill agreement won’t impact.”

DoE recommends working with Recology to implement a pilot program to barge recyclables from Pier 96 to the Port of Oakland as it studies long term infrastructure options including locating infrastructure at the port, Assmann said. DoE also recommends that the proposed plan to award Recology the landfill contract and facilitation agreement remain the same “since our analysis shows (and the port concurs) that all options for utilizing the port for any kind of landfill transportation would require a permitting process that would last a minimum of five years and a total timeline of at least seven to nine years.”

So far, the landfill contract has not come before the full board because of delays and continuations at the Budget & Finance Committee. As Judson True, legislative aide to Board President David Chiu, recently observed, the process over the last few months has raised more questions than answers, including unexpected angles such as how the port can be better utilized and the implications of the 1932 refuse collection and disposal ordinance. “We need to get these answers before we can move forward,” True said. “We all have a lot of work to do before we can figure out what’s best for the city and pick a path.”

But Gavrich hopes history doesn’t repeat itself and that Chiu shows some leadership on the garbage contract hornet’s nest. “There are so many compelling reasons and benefits for the city — but that hasn’t stopped the city from doing the wrong thing in the past,” Gavrich said. Gavrich pointed to 2007, when all members of the board except Sup. Chris Daly voted to give the sewage sludge contract to Recology even though its bid was $3 million higher than the competitor, S&S Trucking.

A Dec. 14 2007 San Francisco Chronicle article by Robert Selna quoted Mirkarimi as saying that a key reason for awarding the contract to Recology was that it was a union company. “That’s the elephant in the room,” Mirkarimi said, framing the board’s decision to go with Recology as being about “the devil we know.” Selna recently left the Chronicle to work as Mirkarimi’s legislative aide.

Mirkarimi’s recent suggestion that LAFCO explore barging recyclables as a pilot program has Gavrich worried. “Saying let’s explore simply barging recyclables makes no sense. It’s a fraction of what makes barge/rail haul economically viable.” Gavrich said. “It would put a greater burden on the ratepayer than the economic and environmentally inefficient system they have in place at Pier 96. The port should get the deal. It would be a cash cow.”

Board to approve highly staged mayoral question time

Sasha Cuttler

-

March 8, 2011

8

When San Franciscans voted on two occasions to require the mayor to meet publicly with the Board of Supervisors to answer questions – most recently in November when voters approved a binding measure after Gavin Newsom ignored the preview measure – I don’t think they had in mind the sterile, staged process that the board is poised to approve today.

Sponsored by Sups. David Chiu and Eric Mar (an early endorser of Chiu for mayor) and rubber-stamped by the Chiu-stacked Rules Committee, the procedures are a far cry from England’s raucous question time, which supporters and critics have always compared the proposal to. And it seems to let board-appointed Mayor Ed Lee and his successor off very easy.

The rules call for the mayor to appear on the second regular board meeting of each month (meaning Lee’s first session will be five months after voters approved it) and for only supervisors from odd-numbered districts to be allowed to ask questions one month, followed by even-numbered supes the next.

Supervisors are then required to submit their questions in writing almost a week in advance – and even then a supermajority of eight supervisors can vote the question down, meaning the mayor won’t have to answer. Conversely, a supermajority can also approve questions after the deadline when they arise about pressing business.

That’s quite a neat and tidy little democratic exercise that the new powers-that-be at City Hall are trying to create.

UPDATE: Chris Daly, who authored the question time measure as a supervisor, told us that neither of its sponsors nor any Rules Committee members who asked him about the legislative intent of the measure or the language he wrote in it, which Daly said the board and the mayor are violating.

“The intent of the charter amendment was to increase the dialogue and discourse, but the rules seem to dampen the ability of that discourse to take the city somewhere,” Daly told us. He also said that the measure calls for the mayor to appear monthly before the board and it contained no provision suspending that requirement while the board and mayor spend months coming up with ground rules, so “the mayor has been in violation of the charter since then.”

Divergent views on Chiu’s challenge

Sasha Cuttler

-

March 4, 2011

86

The political season is definitely upon us, and despite all the sunny statements coming from mayoral hopefuls, I predict is going to get ugly. One gauge was the split reactions to my stories on David Chiu getting into the mayor race and how his belief that “there’s always common ground” to be attained on big issues will be tested this year.

Some in his camp were mad at how I characterized the problems progressives have with Chiu, believing it was unfair to blame two years worth of bad budget compromises and aborted progressive initiatives on him (indeed, some of his progressive colleagues did go along with some of those decisions). Then again, Green Party activist Eric Brooks was outraged that I went too easy on Chiu, writing in an online comment that Chiu has “totally betrayed and stabbed in the back the progressives who got him elected.”

As for Chiu, he was a little more circumspect about his role, and he basically agreed with the premise of my article that he’s uniquely positioned to prove or disprove his theory on governance as the board wrestles with some big issues this year.

“We have a lot of decisions coming up before us at the board on which I’ll be working with our colleagues to see if we can bridge differences and address everyone’s concerns,” Chiu told me, citing the upcoming debates over pension reform and the CPMC and ParkMerced projects as examples that will test his consensus-building approach.

An even earlier test will be the mid-Market tax breaks that he’s pushing with Sup. Jane Kim and the Mayor’s Office. All three entities have been trying to cast that vote as an unavoidable fait accompli, but many progressives and union activists are gearing up for a fight when that measure is heard by a board committee, probably on March 16.

In his campaign kickoff speech on Monday, Chiu alternatively sounded progressive themes and those of the fiscally conservative corporate Democrats. “We need to stop being a bedroom community for Silicon Valley and actually compete with Silicon Valley,” Chiu said.

Now, if competition means getting into a bidding war over which cities can offer tech companies the lowest taxes and most taxpayer-subsidized benefits, Chiu’s problems with progressives are only going to get worse. But if he’d like to address the “bedroom community” problem by building more affordable housing that working class San Franciscans can afford – rather than all the luxury condos favored by the Google set – that’s something progressives could get behind.

But Chiu’s actions this year will speak far louder than his words. And with lots of chatter still rippling through progressive circles about someone else jumping into the mayor’s race – a play that would probably come in mid-to-late summer – the clock is running for Chiu or someone else to win over the left.

Chiu’s challenge

Jesse Hawthorne Ficks

-

March 1, 2011

4

steve@sfbg.com

Board of Supervisors President David Chiu launched his mayoral campaign Feb. 28 with a pledge to bring San Franciscans of all political stripes together around a common agenda. It’s a message that has also been sounded by other mayoral candidates, but one in which Chiu is in a unique position to try to deliver on this year.

“This campaign, at its heart, is going to be how we come together,” Chiu told a crowd of hundreds gathered at City Hall for the announcement. Later he told the crowd, “This campaign needs to be a beacon to the rest of the world about who we are as San Franciscans.”

Chiu appeared to be reaching out to progressives more than the other mayoral candidates have so far, emphasizing how he doesn’t own a car and wants make big improvements to Muni and the bicycle network, valuing “diversity and social justice,” calling for “community-based budgeting,” and saying that “we have to have a conversation about how we can creatively fund affordable housing.”

“We are at our best when we come together for our shared progressive values,” Chiu said.

But then he quickly noted that over the past decade, “City Hall has been a bit dysfunctional.” That was a time when progressives controlled the Board of Supervisors and there was a downtown-backed mayor, and Chiu decried how the two sides didn’t work well together. Yet now, with Chiu as board president and Ed Lee as interim mayor — an appointment Chiu helped engineer — “the tone at City Hall has changed.”

Perhaps that’s true, but the thorny issues that divide the city and defy simple solutions remain in play: bridging a $380 million budget deficit after years of deep cuts, creating jobs without worsening the city budget picture, controlling employee pension costs, reforming Muni and addressing traffic congestion, bringing cleaner energy sources online, and increasing the affordable housing stock.

These are all issues that President Chiu and Mayor Lee will have to deal with this year if Candidate Chiu is going to be able to credibly claim that the new tone at City Hall can actually translate into policies that work and bring people together.

And there won’t be consensus in the community on all of those issues; at some point, Chiu will have to take a side.

RHETORIC AND REALITY

All the mayoral candidates argue for coming together around common-sense solutions, a trope that clearly polls well with voters.

Leland Yee welcomed Chiu into the race while emphasizing his own kumbaya message: “My commitment is to run a different kind of campaign for mayor — to work with other candidates to present real choices and options for voters.”

Dennis Herrera, whose mayoral campaign announced its endorsement by Sup. Scott Wiener during Chiu’s kickoff event, said, “I look forward to working with him toward my goal of making San Francisco a city that works and one that lives up to its great promise”

And Ting told a gathering of his Reset SF group over the weekend, “It’s time for San Francisco city government to be as creative and innovative as the rest of San Francisco. And it’s going to take all of us to make that a reality.”

Even political consultant David Latterman, who usually works with downtown-backed candidates but is working on Chiu’s campaign, told us, “I’m just so tired of that left-right divide. I don’t think this city is served well by those wars any more.”

But Chiu is uniquely positioned to turn that rhetoric into a reality at City Hall — if it’s possible. Over the past two years, he took the lead on challenging bad budget proposals from the Mayor’s Office and the San Francisco Municipal Transportation Agency, only to back down in the end and make compromises that many of his progressive colleagues opposed. Similarly, he spent months working on a business tax reform measure that would have raised city revenue without costing private sector jobs, only to abandon it in the face of big business opposition.

This year, some progressives are banking on Chiu to deliver on their issues and have offered his mayoral campaign their early support.

“He’s willing to take bold moves to make Muni continue to improve,” MTA Commissioner and cycling activist Cheryl Brinkman told the gathering.

“There is no one running for mayor who has David’s zeal for social and environmental justice,” Fei Tsen, chair of Chinatown Community Development Corporation — a core Chiu constituency — told the gathering.

“I think he’s the right choice for low-income communities of color,” Planning Commission Christina Olague said at the event.

Sup. Eric Mar, the only elected official at Chiu’s kickoff, told the crowd that “David Chiu has shown he has the ability to bring communities together,”

But the rest the progressive community, from elected officials like Assemblymember Tom Ammiano and Sup. David Campos to the leading advocates for renters, environmentalists, and the social and environmental justice movements, are still waiting to see what happens this year. Many are disappointed that Chiu is pushing tax breaks for Twitter and other corporations rather than progressive budget solutions, as well as putting moderate supervisors in control of some key board committees.

In an era of fiscal desperation, it may not be possible to bring progressives and downtown together around a common agenda. But if Chiu wants to try, voters are likely to learn whether that approach works even before they head to the polls in November.