Development Archives — Page 37 of 72 — San Francisco Bay Guardian Archive 1966

Focus on tax reform and scrap the sleazy giveaway

Sasha Cuttler

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March 29, 2011

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.

Housing: Density and affordability

Zelda Bronstein

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March 24, 2011

44

The way the Chron describes it, the debate over the city’s updated Housing Element is all about density. And that’s part of the issue, no doubt: For years, people on the west side of town have resisted any increased density, meaning all the new housing has to get crammed into the eastern neighborhoods. And increased density, on some level, is going to have to be part of the future in San Francisco.

But there’s another, more important, piece of the puzzle. The Housing Element draft acknowledges that, based on community needs, more than 60 percent of all new housing in San Francisco should be affordable — that is, below market rate. And the draft admits that’s not about to happen:

However, even with these strategies the City will not likely see the development 31,000 new units, particularly its affordability goals of creating over 12,000 units affordable to low and very low income levels projected by the RHNA.

In other words: Existing city policy is inadequate to meet the needs that the city formally agrees must drive public policy.

The Planning Department won’t come right out and say it, but the message is pretty clear: Our current planning and housing policy — driven primarily by the needs of the private sector — is not going to come remotely close to solving the housing crisis. Either San Francisco has to come up with a huge amount of public money — billions of dollars — to underwrite new affordable housing construction or there has to be a much greater requirement that private developers chip in.

Building market-rate condos in San Francisco is a lucrative business. It does nothing to meet the city’s needs. There’s a disconnect here, and until we resolve it, the affordable housing crisis will continue.

Who really owns Parkmerced?

Sasha Cuttler And Mary Magee

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March 23, 2011

8

A major redevelopment proposal at the Parkmerced housing complex is scheduled to go before the Board of Supervisors on March 29. Under the plan, developers intend to bulldoze 1,538 rent-controlled units and replace them with new units, which they’ve promised will stay rent-controlled with the same monthly rates for existing tenants. It’s a major overhaul which will nearly triple the number of units, transforming an entire San Francisco neighborhood, and it could take as long as three decades. So just who are the developers behind this plan?

It’s been more than a decade since hotelier Leona Helmsley, reviled as the “queen of mean,” and her real-estate partners made more than $300 million in the 1999 sale of Parkmerced. Helmsley, who died in 2007, was a storied figure with a distinctive wide mouth, arched eyebrows, and a reputation for running her New York luxury hotels with an iron hand. When she died, Helmsley left $12 million to her beloved poodle, Trouble.

She may not have been anyone’s favorite landlord, but Helmsley was a highly visible character in the public eye — in stark contrast with the current owner of the housing complex, a firm blandly titled Parkmerced Investors, LLC.

Court filings list Parkmerced Investors as a “Delaware limited liability company,” and an entry in a California Secretary of State database lists the LLC as having been incorporated in August of 2005. When it was created, it was listed with a Manhattan address identical to that of Stellar Management, the New York-based real estate company which manages Parkmerced. In 2005, Stellar Management and Rockpoint Group, an investment firm, purchased Parkmerced for about $675 million. They created Parkmerced Investors Properties LLC as a venture that would maintain ownership of the colossal property.

While Stellar continues to manage Parkmerced, the company was unable to keep up with its loan payments on the property last year, so in 2010, a new financial firm stepped in to take control and save it from default. In Sepetember of 2010, a minor change was entered into San Francisco property records — the address for the property owner, Parkmerced Investors Properties LLC, was changed from one Manhattan skyrise to another. The new address is identical to that of Fortress Investment Group, a private equity firm.

Fortress bought a roughly 75 percent stake in the venture that controls Parkmerced, according to a report in the San Francisco Business Times, in a deal which reportedly valued the entire property “at about $750 million.”

In an email, Parkmerced spokesperson P.J. Johnston noted, “I can’t discuss terms or details of the owners’ investments, but I can confirm that Fortress and Stellar are the owners and operators of Parkmerced.” In an earlier email, he noted that “Parkmerced Investors LLC has been the owner since 2005, and remains the owner. Fortress came on as a lead investor last year. Stellar continues to manage the property.”

So who’s behind Fortress? The firm was profiled in Vanity Fair in 2009 in a lucid account of how investors vaulted to billionaire status in the mid-2000s.

“On February 9, 2007, a company called Fortress Investment Group began trading on the New York Stock Exchange,” notes Bethany McLean’s Vanity Fair article. “Fortress, which both runs hedge funds and makes private-equity investments, was part of the seemingly miraculous wave of money begetting more money, in which people who managed others’ fortunes made even greater fortunes for themselves. Those who thought they’d found a way to get in on the miracle snapped up Fortress’s shares. The stock had been priced at $18.50 the day before and promptly shot up to $35 when trading began in the morning. By the end of the day the five principals of Fortress — all youngish men who were present on that winter morning to ring the bell at the N.Y.S.E. — were worth a combined $10.7 billion.”

Fortress is a Manhattan-based firm with offices in London, Shanghai, Tokyo, Los Angeles, San Francisco, and other worldwide metropolitan hubs. Its directors hailed from Lehman Brothers and Goldman Sachs. Fortress’ luck soured with the onset of the financial crisis, and it was highlighted in Forbes magazine as one of the biggest losers of the recession. These days, its stocks are valued in the $5-to-$6 range, yet it still seems to be regarded as big deal as far as global investment firms go — its website boasts $44.6 billion in “assets under management.”

Fortress’ CEO, Daniel Mudd, made the news recently because the Securities & Exchange Comission (SEC), a federal agency which regulates financial entities, has apparently been taking a hard look at how Mudd performed at his old job. Prior to joining Fortress in 2008, Mudd served as CEO of Fannie Mae, the monstrous government-backed mortgage company that was placed in a government conservatorship in August of 2008. Recent news reports noted that Mudd had received a notice from the SEC informing him that he might be under investigation, and could face civil action for “allegedly misleading investors about the mortgage company’s exposure to subprime loans,” according to Reuters.

That could prove to be a big deal. A report of the Federal Commission of the Financial Crisis, convened after the economic crisis to sort out what went wrong, flagged mortgage giants Fannie Mae and Freddie Mac as key players in the dysfunctional trading system that brought on the mortgage meltdown, precipitating the nation’s steep market decline.

“Their $5 trillion mortgage exposure and market position were significant,” the federal report notes, referring to the government-backed mortgage giants. “In 2005 and 2006, they decided to ramp up their purchase and guarantee of risky mortgages, just as the housing market was peaking. They used their political power for decades to ward off effective regulation and oversight — spending $164 million on lobbying from 1999 to 2008. Through the third quarter of 2010, the Treasury Department had provided $151 billion in financial support to keep them afloat.”

For the tenants of Parkmerced, the revelation that their homes are under the financial control of a firm directed by someone who was in the eye of the storm when the mortgage crisis hit is none too comforting. A story about Mudd’s SEC notice was recently posted on a Facebook page maintained by the Parkmerced Action Coalition, a group of tenants that’s publicly opposed the redevelopment plan.

As part of the Parkmerced project approval, the city will enter into a long-term development agreement with Parkmerced Investors LLC which hammers down the plan to replace all existing rent-controlled units, even though the law only guarantees rent control on units built before 1978. Tenant advocates have raised concerns over whether this agreement could withstand a challenge court, but mayoral development advisor Michael Yarne sought to assure tenants that the deal was ironclad when he spoke at a December planning commission meeting. He said the document had been drafted with input from the city attorney, and that the city would not leave residents vulnernable to a loss of affordable housing.

Meanwhile, an independent financial analysis drafted by CB Richard Ellis Consulting to provide the city with objective financial information found that if Parkmerced Investors LLC went ahead with the project as planned, adhering to all the terms of its binding development agreement, the project “may not be economically feasible.” That’s because it would generate a lower estimated internal rate of return, 17.8 percent, than the 20 percent that is generally considered attractive to real-estate investors. However, the report also suggested that this lower-than-average estimate could be offset by income from rent, which would mitigate the risk.

As part of the analysis, the consultants looked at how the project’s internal rate of return would change under hypothetical scenarios. Under the so-called “tested scenario” where developers opted to “eliminate rent-controlled replacement unit program” in favor of building market-rate units instead, the project’s rate of return would rise to 19 percent, according to the report. And if Parkmerced Investors LLC abandoned the community improvements it’s signed up for, such as a new MUNI line, organic farm, and athletic fields — as well as ditched the rent-control unit replacement plan — the project’s rate of return would jump up to 23 percent, according to the consultant’s estimate, making it much more attractive to investors.

In other words, it would be in the best financial interest of the developer not to uphold its promises under the development agreement. But that is purely hypothetical, noted consultant Mary Smitheran.

The development agreement says Parkmerced Investors LLC must adhere to its obligations, and the binding document is meant to stay with the property even if the housing complex changes hands. All along, developers and city officials have assured residents that there is no way they will lose their rent control. Going by the math, however, it’s easy to see why tenant advocates perceive an incentive for the developer to try and have the agreement struck down in court after it’s been granted approval to build.

For decades, Parkmerced has provided affordable housing for seniors, families, working-class residents, and others from a mix of economic backgrounds.

“With these private equity firms, these guys are major owners of multifamily housing, and nobody knows anything about them,” noted Dean Preston of San Francisco-based renters’ rights organization Tenants Together. “Somehow, because they have an ‘LLC’ after their name, nobody’s paying much attention to who’s behind them.”

US EPA, SF Health Department and Lennar accused of asbestos collusion

Mary Magee

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March 21, 2011

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US EPA, SF Health Department and Lennar accused of asbestos collusion

The SLAM Coalition of Bayview Hunters Point Community Organizations and the New Orleans-based Advocates for Environmental Human Rights held a press conference outside US EPA Region 9’s San Francisco office today to protest the contents of a string of emails they obtained through a Freedom of Information Act request that they claim “show conspiracy by the US Environmental Protection Agency Region 9 and the San Francisco Health Department officials to cover-up dangers of the Lennar Corp.’s development project at the Hunters Point Shipyard.”

“Since 2006 when heavy grading and excavation began by the Lennar Corporation at the Hunters Point Naval Shipyard, residents of the Bayview Hunters Point Community, a majority African-American, Samoan and Latino low-income community, suffered from health problems including nose bleeds, rashes and headaches that they believed were caused by asbestos and heavy metals being unearthed from these actions,” the SLAM/E.H.R.’s press release states. “However, little did residents know that officials in the Environmental Protection Agency Region 9 and the San Francisco Department of Public Health were conspiring with the Lennar Corporation to conceal the health threats of asbestos laden dust.”

E.H.R’s Wilma Subra said she first saw the emails Thursday March 17.
“As I started to go through them, I could clearly see where EPA and DPH are wrestling with how to downgrade, or make less important, the information on asbestos on Parcel A of the shipyard,” Subra said,

Parcel A is the plot of shipyard land where military housing used to stand before the land was transferred to the city in 2004. Lennar began grading and excavating operations on the site in 2006, which led to health complaints and a $500 million fine by the Bay Area Air Quality Management District when it turned out that Lennar’s asbestos dust monitors had not been properly functioning and that regular dust mitigation measures had not been enforced.

“So, the community has been asking tough questions, because people have been sick,” Subra continued. “And this clearly shows that the agencies are trying to figure out how to message to the community and downplay the impact, and that Lennar was at the table.”

SLAM member and Bayview Organizing Project Organizer Jaron Browne concurred with Subra’s assessment of the email string.

‘This establishes a consistent pattern of communication right from the beginning,” Browne said. “It shows pressure in the agency to communicate in ways that are less negative.”

“The ones we have included are just examples of many, many more, “ Subra added, noting that the community-based agencies did not receive any attachments in their FOIA request, nor did they get copies of responses from Lennar to US EPA’s emails.

“You see this type of collusion fairly frequently but it’s usually limited to a person or two,” Subra continued. She notes that these emails relate to Parcel A, but two more shipyard parcels are scheduled for early release, and that the city’s Redevelopment Agency and Lennar would then take the parcels over.

“If this is how it’s going to go, but public health is being impacted, then it’s totally unacceptable,” Subra said.

Browne predicts that US EPA will issue a statement standing by its original statements around asbestos exposure at the site. “But we’ve asked a number of agencies and will be ccing our findings to US senators,” Browne said.

The emails obtained through SLAM and E.H.S.’s email request number in the thousands and can be viewed here, which is also the site where POWER has posted its concerns with the city’s environmental draft environmental impact report for Lennar’s shipyard development –concerns that led POWER to file a suit that will be heard in San Francisco’s Superior Court at 400 McAllister Street at 10 a.m. on Thursday March 24.

“The emails are a separate issue from the lawsuit, but what unites then is that the Bayview community is really organizing,” Browne said. “The EPA recognizes that the Bayview is an environmental justice community, and what cuts across all these issues, whether they are at Parcel A or over the EIR [for Lennar’s massive shipyard-Candlestick development] is that we see the same pattern of behavior in which they dismiss the community’s concerns.”

Browne says POWER’s issue with the EIR was that it did not address toxic contamination at the shipyard.
‘The city says that’s the Navy’s concern, but CEQA [the California Environmental Quality Act] requires you to explain what’s there and, if there’s a negative impact on health, how to address it. But the Navy can’t answer that question yet, and therefore it’s premature to approve the EIR.”

Calls to US EPA were not returned today, but we’ll be sure to post their reply here, so stay tuned…

Gamer: does the dismal “Homefront” have a silver lining?

Sue Vaughan

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March 18, 2011

19

Gamer: does the dismal “Homefront” have a silver lining?

Can Homefront’s failures inspire change in the game industry?

I’m almost reluctant to add to the media blitz that first-person shooter Homefront (now available) was and is getting. Even with low scores and plummeting stocks, the game managed to sell 300,000 copies on its first day, so to a degree it would seem the publicity has paid off. But, after being personally subjected to an overwhelming number of posters and billboards, hundreds of balloons, an anti-Korean rally, and a long schoolbus ride to a barbed-wire-laden warehouse, I was disappointed to find that behind this velvet curtain was a pretty flimsy product. Maybe Homefront will be the game that gets the ball rolling on an important issue that has been brewing for a while: game pricing.

Kaos Studios was smart to attach itself to a wholly original idea, implausible or not, and putting the power of Academy Award-nominated screenwriter John Milius (1979’s Apocalypse Now) behind it doesn’t hurt. But the premise is wasted on such an impossibly underdeveloped campaign; it’s almost like Milius wrote “North Korea invades U.S.” on a napkin and called it a day.

Kaos’ shooter isn’t the first game to re-neg on its promises (see the ever-fresh wound of the Molyneux/Fable debacle for proof of that) but this burn was unique in that it was a title that appealed to a game audience that is largely overlooked. Alternate history, as a genre, has ardent supporters but aside from Fallout and Singularity its ranks haven’t been stocked particularly well. In that light, Homefront’s undelivered promise only intensifies the sting that results from its brevity.

Sixty bucks and all I get is a three-hour campaign?

http://www.youtube.com/watch?v=a9hWdAN6guw&feature=related
You don’t hype a three hour tour.

Homefront’s single-player is surely not worthy of its price tag, so what else is in the box? The game includes a multiplayer mode and it’s light years more focused than the campaign, but multiplayer-only experiences like Battlefield 1943 run around $15. If the studio had released a multiplayer-only title, they would have been welcomed to the table differently. Instead, we’re left wondering how much developer weight was actually put behind the single-player campaign, and why the quality seems so inconsistent with the seemingly-great weight the publicity team put into hyping the mode over the past year.

Now that a sharp divide has evolved in the value of game content, making every game the same price not only hurts the consumer, it also directs the development process towards creating a viable product rather than a singular experience. As more and more players purchase titles purely for their multiplayer components, I might go so far as to suggest completely separating single player and multiplayer experiences through independent purchases.

No matter how it is sold, it seems clear that the value of each mode is rarely analogous to the amount of time developers invest in them. Call of Duty campaigns are five to six hours long, and no one bats an eye because they know the multiplayer will afford them hundreds of hours in entertainment. At the same time, enormous resources are spent on creating multiplayer for games like Bioshock while all anyone wants is to be told a cohesive story. Instead of feeling obligated to deliver both, why don’t developers make a greater effort to give players what they came for?

Perhaps there’s something to be learned from the casual games market. While many console gurus malign the low pricing of iOS games, at least games are variably priced based on their worth. What’s the answer? Publishers would be smart to figure it out before all games go digital, because I expect that flat rate of $60 is going to feel a whole lot heavier without a physical product in hand.

Supervisors scale back Mid-Market tax break

Sasha Cuttler

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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

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March 15, 2011

20

steve@sfbg.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EXPANDING THE GIVEAWAY

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

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

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

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

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

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

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

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

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

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

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

QUESTION OF ALLEGIANCE

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

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

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

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

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

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

Matz told us she sees nothing wrong with coaching Twitter.

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

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

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

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

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

FACTS AND FICTIONS

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

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

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

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

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

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

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

Showdown time for Twitter/Tenderloin tax break

Sasha Cuttler

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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.

Board considers extra $75.4 million for Mission Bay redevelopment

Mary Magee

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March 15, 2011

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Board considers extra $75.4 million for Mission Bay redevelopment

UPDATE: An earlier version of this post reported that the Board was meeting in closed session. This was incorrect.

The Board is meeting today to consider amending the San Francisco Redevelopment Agency’s (SFRA) budget to issue an additional $70 million in tax increment bonds and appropriate $75.4 million ($70 million in bond proceeds, plus $5.4 million tax increment). The request, which comes on the heels of last year’s $64 million request, represents a 109.4 increase of tax increment bonds in 2010-2011. The city says thiis has nothing to do with Gov. Jerry Brown’s proposal to eliminate redevelopment agencies. But the last-minute timing of today’s session looks a tad fishy at best. And it’s playing out as a vote on Treasure Island’s final environmental impact report approaches, and against a backdrop of extreme funcertaintly related to all things Redevelopment, as Mayor Ed Lee and other city leaders try to figure out ways to prevent or reduce the affordable housing fallout from the governor’s elimination proposal.

According to a Budget and Legislative Analyst’s summary of today’s request, the requested bond issuance and expenditure is part of the “SFRA’s normal course of fulfilling its obligations under the tax increment allocation pledge agreements between the city, SFRA and FOCIL-MB (Catellus’ successor entity at the Mission Bay redevelopment sites), and not as a result of the Governor’s proposal to eliminate local redevelopment agencies. Ms. Lee [deputy executive director at the SFRA] states, that, as of the writing of this report, the impact of the Governor’s proposal on the Mission Bay Redevelopment Project is currently unclear and ambiguous as to whether approval of the Governor’s proposal would affect the requested bond issuance and expenditure authority.”

“At the time of the development and approval of the FY 2010-2011 budget, the Agency and Tax Assessor did not have available tax roll information that resulted in a significant increase in property taxes in Mission Bay due to the accelerated assessment agreement between the Assessor and the Agency,” states today’s Board resolution that Mayor Lee sponsored, explaining why there’s a request for an additional $70 million in bonds, so soon on the heels of the $64 million that the Board approved last year.

“The Agency wishes to amend its budget for the fiscal year 2010-2011 to permit the receipt of additional tax increment of $5.44 million and bond proceeds in the amount of $70 million for the purposes of low moderate housing and for the reimbursement of public improvements made by Catellus pursuant to the tax increment allocation pledge agreement between the City and County of San Francisco, San Francisco Redevelopment Agency and Catellus made in November 16,1998 for Mission Bay North and South,” the resolution continues.

Mission Bay North and South are two separate redevelopment areas that encompass 303 acres, bounded by King Street and AT&T Park on the north, the San Francisco Bay and the I-280 freeway on the east and west, and Mariposa Street to the south, according to Redevelopment Agency documents.

The Budget and Legislative Analyst notes that of the $5.4 million in additional tax increment, an estimated $3.48 million would fund a portion of the Agency’s required educational revenue augmentation fund payment to the state for FY 2010-2011. And that the remaining $1.95 million would be distributed to tax entities, with $870,400 to be expended on the agency’s low and moderate income housing fund.

The BLA notes that the proposed sale of $70 million in tax increment bonds will provide $60.345 million bond proceeds, including $12 million (20 percent) to fund the construction of 1180 4th Street, a development of 150 units of family rental housing, including 25 units for formerly homeless families and $48. 276 million (80 percent) to reimburse Catellus’ successor, FOCIL-MB, LLC, for public infrastructure development that FOCIL-MB constructed..

“If the proposed resolution is approved, of the $177 million total estimated debt service, $100, 890,000 or 57 percent will be paid from the City’s General Fund. The City’s General Fund estimated additional annual cost would be $3,648,000 for the first 20 years, decreasing to $2,793,000 for the next ten years.” The BLA concludes, explaining that approval of the proposed resolution is a Board policy decision because it adds up to a total General Fund cost of more than $100 million.

According to the BLA report, Amy Lee, SF Redevelopment Agency deputy executive director, the requested $70 million in tax increment bonds would be sold in late March 2011, “such that no debt service payments would be required in FY 2010-2011.

The BLA also notes that if the Board approves the proposed resolution, the net effect of each property tax dollar expended for tax increment that is provided to SFRA would result in a reduction of $0.57 on each dollar from the city’s General Fund.

“In other words, for each tax increment dollar provided to SFRA, the City would no longer have to provide payments to other tax entities,” the BLA observes.

These entities include the city’s Children’s Fund, Library Preservation Fund, Open Space Acquisition Fund, and the General City Bond Debt fund, the Community College district, the San Francisco United School District, BART, and the Bay Area Air Quality Management District, which total approximately $0.43 of each property tax dollar.

It’s because of these property tax dollar equations that the annual cost to the city’s general fund for proposed increased debt service would rise, if the Board approves today’s Redevelopment resolution, by more than $100 million over the next 30 years.

And as local Democratic Party chair and former Board President Aaron Peskin explains, there’s nothing much the Board can do about the deal today, but they might want to reconsider getting into more deals like this at Treasure Island and beyond, in future.

“A deal is a deal is a deal,” Peskin said. ‘So, there’s nothing the Board could do differently, but that’s $3.648 million that otherwise would be going into the General Fund, and it’s a sign we should pay attention to, when considering Treasure Island, as deals like this will continue to impoverish the General Fund.”

“Even though they deny it has nothing to do with Gov. Jerry Brown’s pending legislation to eliminate redevelopment agencies, I have never seen something scheduled so quickly,” Peskin added, noting that the Board’s agenda is published Thursday evening or Friday morning, but this item wasn’t on that agenda, hence the need to publish a separate notice.

Meanwhile, Treasure Island’s final environmental impact report has been released, and the way the current plan looks, will forever alter our view of the Bay.

“It will have enormous impacts on services for the City and traffic for the entire Bay Area,” Saul Bloom, executive director of Arc Ecology, told the Guardian.

On April 7, a joint session of the San Francisco Planning Commission and Treasure Island Development Authority will be meeting to consider certifying the EIR, but Arc is asking for an extension of two more weeks to provide the public with 42 days for review.

“Fourteen additional days for public review is a very modest request for a project with such significant impacts yet, the City has thus far refused,” Bloom notes.

Twitter tax: It’s not all about Jane Kim

Zelda Bronstein

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March 15, 2011

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Twitter tax: It’s not all about Jane Kim

Randy Shaw’s latest piece announcing that (duh) the Small Business Commission supports the Twitter tax break makes it seem as if the entire opposition to the deal is based on dislike for Sup. Jane Kim:

Since announcing her candidacy for District 6 Supervisor, Jane Kim has been attacked by self-declared progressive power-brokers who vowed to defeat a candidate they could not control. After one of the city’s most progressive districts overwhelmingly elected Kim, these detractors continued their attacks – desperate to undermine Kim’s credibility as a progressive.

To this end, [Chris] Daly, [Gabriel] Haaland and others who failed to defeat Kim last November are now charging Kim with promoting “gentrification” by backing a payroll tax exemption to encourage businesses like Twitter to move to Mid-Market.

It’s getting crazy, how Shaw is making this whole discussion so nasty and personal. Because it really isn’t all about Jane Kim.

There are actual, legitimate policy differences here. Some of us don’t think tax breaks are a good way to do economic development. Some of us think that we’ve tried lowering taxes — for 30 years — and it hasn’t worked. Some of us (particularly me) wonder if a break from the city’s annual payroll tax makes any difference at all to a company’s decision where to move or whether to hire new workers.

In fact, it should come as no surprise that former Sup. Daly and Haaland, a union activist, are opposed to a corporate tax break. They’re just doing what they’ve always done.

In ten years on the Board of Supervisors, Daly told me, he opposed every single tax cut or tax break that came before him. (He also said he’s not a “longtime critic” of Jane Kim: “The first time I criticized her was over the board president selection, and that was two and a half months ago.” He wasn’t a supporter of Kim’s main progressive opponent, Debra Walker, last November, and can hardly be described as somone who “vowed to defeat” Kim.)

Haaland did support Walker — but he’s not doing anything unexpected, either. He told me he’s never once supported a tax break for anyone. “You can say a lot of things about me, but you can’t say I’m inconsistent here,” Haaland noted.

I’ve been at the Guardian for more than 25 years, and I’ve written more than 1,000 editorials, and I can’t remember every one of them, but I’m pretty sure we’ve never supported this kind of tax break, either — for anyone, anywhere. We would have opposed it if Debra Walker suggested it; Jane Kim happens to be a sponsor of this particular deal, but there’s nothing surprising — or personal — in our position.

Randy Shaw is free to argue that we’re wrong and to say that this tax break is good for the Tenderloin and for the city. Lots of people (although generally not people I call progressives) support all kinds of tax deals for lots of policy reasons. I disagree with them, but I’m happy to have the discussion; I love to debate tax policy (I realize I’m sick that way.)

But you wonder where Shaw is coming from with this “anti-Kim” personal shit. Is this the best case he can make?

Census no surprise to outmigration taskforce

Mary Magee

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March 10, 2011

37

Census no surprise to outmigration taskforce

“San Francisco is losing its black population faster than any other large city in the United States — and the trend is unlikely to stop unless the city takes immediate action.” That’s what the Guardian wrote in August 2008, when we covered a draft report that the Mayor’s African American out-migration task force produced.

But despite the taskforce’s dire warnings, the Mayor’s Office didn’t hold a press conference when the final report was published in 2009. Instead, it was quietly posted on the Redevelopment Agency’s Website, where you can still find it today tucked into the bottom lefthand corner.

And despite the report’s numerous recommendations, taskforce members say that little funding had been made available to turn their ideas into realities.
So, it comes as no surprise that San Francisco’s black population continues to shrink while that of Asian Americans and Latinos make big gains.
According to newly released 2010 Census figures, San Francisco’s total population grew by 3.7 percent to 805,235 in the past decade, the Asian and Latino populations each swelled by 11 percent, the white population shrank by 12.5 percent—and the black population shrank by 22.6 percent.

This means, San Francisco now has 337,451 white residents (42 percent of total population), 265,700 Asian residents (33 percent of population), 121,774 Latinos (15.1 percent of the population), and 46,781 blacks (5.8 percent of population).
In 2009, the out-migration task force, which used 2005 US Census and state demographic data, placed the city’s African American population at 1/16 of San Francisco’s total population, compared to its two largest minorities, Asians and Hispanics, which made up 1/3 and 1/8, respectively.

“We saw that the African American population has declined by 40.8 percent since 1990, and as a share of the population decreased from 10.9 percent in 1990 to 6.5 percent in 2005,” the AAOMTF’s 2009 report states.

(As it happens 6.5 percent of the population in 2005 translated into 46,779 black residents. So, while the black population appears to have grown by two people, when viewed as a share of the city’s entire population in 2010, it can be seen to have shrunk by 22.6 percent, reflecting a flight to the East Bay and other states.)

“That’s not enough people to fill Candlestick Park,” Fred Blackwell, executive director of the San Francisco Redevelopment Agency, stated in 2008, during a presentation about the taskforce’s draft report. He cited a lack of affordable housing and educational and economic opportunity, severe environmental injustice, an epidemic of violence, and lack of cultural and social pride, as the reasons blacks were leaving.

But sadly not much has changed, including the frustration of local black leaders.
“We could paper the walls of this building with reports that have been made on this issue,” task force chair Aileen Hernandez said in 2008, pointing to similar studies that were done in 1995 and 1972, while fellow task force member Barbara Cohen said the draft recommendations “should have long ago been called the final recommendations.”

Reached by phone today, AAOMTF task force member Sharen Hewitt recalled how she and London Breed called for the creation of the taskforce, only to see many crucial recommendations ignored.
“We called for the creation of the taskforce in face of an imminent threat to the sustained presence of African Americans in San Francisco, especially low-income residents,” Hewitt said. “The taskforce’s draft report did not capture 80 percent of the discussion.”
Hewitt says a key flaw was the absence of a “real plan to address the fate of African Americans who live in subsidized low-income housing.”

Fellow AAOMTF task force member Regina Davis, director of the San Francisco Housing Development Corporation, agrees that a lack of action didn’t help.
“Today’s numbers could have looked different based on actions,” Davis said.
She hopes that today’s increasingly dire financial system will be a call to action.
“Especially with the threat of the elimination of redevelopment agencies, because a lot of the housing for low-income folks is jeopardized in ways we haven’t experienced for three decades,” she said. “People are understanding that this is a market they haven’t seen before.”

Davis remains optimistic that the 2010 Census figures will galvanize folks.
“I’ve been mystified why people haven’t protested the war more,” she mused. “Maybe they will now that dollars they have taken for granted aren’t on the table. And maybe they’ll start to realize that tax cuts cost money. I don’t know where folks get the notion that tax cuts are free.”

Other AAOMTF members say the whole taskforce process was very discouraging for those who worked so diligently to find solutions.

”After all that intense work, we were all left with no notable action taken, (At least no action that I am aware of),” wrote AAOMTF member Larry Saxxon in an email. “At the least, the report should have been released to the general public for their review and feedback. It left me questioning the motives for the process from a political point of view.”

Saxxon said that because of feeling a great deal of dissatisfaction with the AAOMTF’s Education Committee’s findings, he and fellow taskforce member Barbara Cohen wrote a minority report on the needs for greater educational services for the African American community.

In their report, Cohen and Saxxon noted that there was a need to increase awareness and advocacy for African American students who are classified as special needs students.

And in his email, Saxxon noted that as an African American and an active advocate for the African immigrant community, he strongly suggested that AAOMTF include the presence of the African immigrant community in the final report as this was the only known incoming source of Blacks arriving in San Francisco.

“From the statistical data that we had access to, we know that the African immigrant comprises, at a minimum, of 10 percent of the overall African American presence in San Francisco. This 10 percent is only counting those that are documented. When we view the ratio of undocumented African immigrants… that number increases considerably! Sadly, that fact never manifested in the final report.”

“This is an issue that is very dear to my heart, as I too feel like an endangered species as an African American man and father trying to survive, and indeed thrive, in San Francisco,” he said. “The prospects seem to get dimmer as the months and years go by.”

Saxxon was pleased Mayor Ed Lee “did at least acknowledge the nature of
the problem and also by his alluding to the fact that some concerted action
needs to be taken.”

And it’s true that Lee has signaled a commitment to the African American community through his support for Sup. John Avalos’ local hire legislation, which kicks in March 25. (The AAOMTF identified jobs, as well as housing, education, economic development, cultural and social life, and public safety and quality of life as key policies and practices that can “help stem the outflow and even entire more African-Americans to make a home and establish roots in San Francisco, while making them feel like an integral part of the City’s stability and vibrancy.”)

But will Lee take other significant steps to stem the outflow in his ten remaining months in office (assuming he doesn’t throw his hat into the ring of the mayoral race, after all?) And will the plight of the city’s African American community even become an issue in the 2011 mayoral race?

Is David Crane just another Kochhead?

Mary Magee

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March 9, 2011

24

This week the Chronicle majorly attacked State Sen. Leland Yee, claiming Yee tried “to distort the words” of billionaire investment banker and UC Regent David Crane on collective bargaining.

The Chron’s attack came on the heels of Yee’s attempt to block Crane’s UC Regents confirmation. And Yee’s attempt to block Crane came in response to an op-ed Crane wrote for the Chron titled “Should public employees have collective bargaining rights?”

In its counter-counter attack editorial this week, the Chronicle accused Yee of falsely claiming that Crane had “called for an end to collective bargaining rights for California teachers, nurses, firefighters, university employees and other public sector worker.”

“What the former adviser to Gov.Arnold Schwarzenegger did was present a history of collective bargaining in California and explain how a 1977 law had changed the balance of power by giving public employees power over their compensation and benefits,” the Chronicle stated. “Crane did assert that extending collective bargaining to employees who already have civil service protections ‘serves to reduce benefits for citizens and to raise costs for taxpayers. Anyone who would argue with that fact has not been paying attention to what is happening with state and local budgets lately.”

The Chronicle finished by praising Crane, who is currently a lecturer on Public Policy at Stanford University and is reportedly working with former Fed Chairman Paul Volcker to form a task force to examine current state budget practices. Crane, the Chron asserted, has “long been widely respected as a teller of inconvenient truths about the rising costs of public-employee pensions and benefits. He should not be silenced – or misquoted by opportunistic politicians. The Senate should vote to confirm him as regent.”

Now, when Schwarzenegger appointed Crane as a UC Regent in December 2010 as one of his last acts as Governor, the Sacramento Bee described Crane as Schwarzenegger’s “chief public employee pension critic.” But here in San Francisco, the Chron didn’t bother to flesh out Crane’s history of employment, campaign contributions, prior statements on collective bargaining, and financial investments.

Maybe it was because these public records reveal Crane to be less a dyed-in-the-wool Democrat and more of a Bushocrat, an ultra-rich investor who supported G.W. Bush through two elections, and repeatedly frames the collective bargaining rights of government employees as an obstacle standing in the way of pension reform and budget balancing.

Campaign finance records show that in March 1999, when Democrats were trying to hang onto the White House in the wake of Clinton’s sex scandals, Crane gave $1,000 to Bush. And in June 2003, just three months after Bush invaded Iraq on a false pretext, Crane saw fit to give Bush another $2,000.

The good news? Crane didn’t support Sarah Palin and John McCain in 2008. But he did donate $7,200 to Republican Tom Campbell’s unsuccessful 2010 bid for US Sen. Barbara Boxer’s seat. And here in San Francisco, Crane was one of several billionaires who wrote big fat checks last fall in support of Measure B, which sought to curb the pension and health benefits of city workers, most of whom will make a fraction in their lifetime of what Crane rakes in each year from his widely diversified financial portfolio.

Crane’s 2009 statement of economic interest shows he has over $1 million invested in Farallon Capital Partners, one of the world’s largest hedge funds, many of whose investors include top university endowments.

Crane also has over $1 million invested in Acacia Partners, over $1 million in Bislett Partners, over $1 million in Kensico Partners, over $1 million in Semper Vic Partners, over $1 million in Berkshire Hathaway, whose CEO is Warren Buffet, over $1 million in the HCP Absolute Return Fund, whose Board includes Warren Hellman, and up to $1 million in Hall Capital Management, whose Board includes Hellman and Gap heir John Fisher. Crane also owns several million dollars stake in real estate investments, and has sizeable stock in Wells Fargo, Chesapeake Energy, Microsoft, Google, Pangloss Oil, Whole Foods Market, M&T Bank Corp., IBM, American Express, WalMart and Exxon.

And he gets income from Acacia Partners and Babcock & Brown, where he was a former partner from 1979 to 2003. While at Babcock, Crane reportedly brokered a controversial jet-lease deal between Arnold Schwarzenegger and Singapore Airlines that allowed Schwarzenegger to defer taxes on millions of dollars. And in 2004, Crane went to work for then Republican Gov. Schwarzenegger as special advisor for Jobs and Economic Growth. The Terminator returned the favor by appointing Crane to the California Commission in Economic Development and the California High Speed Rail Authority. But Crane was rejected in Senate confirmation proceedings for a position on the board of California State Teachers Retirement System.

Now, clearly it’s not a crime to be a billionaire, even though the way some folks make their billions is criminal. But you have to wonder if UC really needs another ultra-rich Regent on its Board. You also have to wonder why the wealthy Crane sought reimbursements of $2,812 from UC in 2009, if he cares about saving the state money.

And Crane has made plenty of statements about collective bargaining rights and pension reform in recent months that seem to frame government employees as the bogey men, not just in California, but across the entire nation.

Take his April 2010 comments to the Los Angeles Times: “State legislators are afraid even to utter the words ‘pension reform’ for fear of alienating what has become — since passage of the Dills Act in 1978, which endowed state public employees with collective bargaining rights on top of their civil service protections — the single most politically influential constituency in our state: government employees,” Crane said.

Or what he said in August 2010 to the Fox Business Network: “Even if you took care of every one of these spiked above the iceberg level pensions in California, you would not take care of the pension problem in California, which is true of virtually every state in the country, at least those where, you know, government employees have collective bargaining rights,” Crane said

In December 2010, he told the L.A. Times that the year 1978, ”wasn’t notable just because of Proposition 13. That was also the year public employees gained a power Franklin D. Roosevelt had warned against: collective bargaining rights.”

“California hasn’t been the same since,” Crane continued. “Public workers have gained at the expense of private workers as government spending was redirected from infrastructure and education to higher salaries, pensions and other benefits.”

And in his Feb. 27 Chronicle op-ed, Crane claimed that, “The battle in Wisconsin is not over collective bargaining rights generally but rather the appropriateness of those rights in the public sector ”

“Collective bargaining is a good thing when it’s needed to equalize power, but when public employees already have that equality because of civil service protections, collective bargaining in the public sector serves to reduce benefits for citizens and to raise costs for taxpayers,” Crane continued. “Citizens and taxpayers should consider this as they watch events unfold in Madison.”

As of today, letters are circulating in Sacramento opposing Crane’s confirmation. And Sen. Ted W. Lieu (D-Torrance), Chair of the Labor and Industrial Relations Committee in Sacramento, has already signaled his opposition.

“I cannot support someone for the powerful post of UC Regent who continues to perpetuate the myth that collective bargaining caused our state economic crisis and has a fundamental misunderstanding of how our state budget operates,” Lieu said in a statement. He noted that in the Chron op-ed Crane claimed that because of collective bargaining, “general fund spending on higher education, parks and environmental protection was flat or lower.”
“As a matter of historical fact, that is false,” Lieu countered. “ Our general fund spending generally declined because of a national economic recession. The recession was not caused by collective bargaining or public sector unions, but by private sector, out of control Wall Street firms at the time.”

“The specific reason our general fund spending sharply declined was because the person Mr. Crane advised, former Gov. Arnold Schwarzenegger, reduced the Vehicle License Fee and replaced it with . . . nothing,” Lieu continued. “As a result, the state general fund lost over $5 to $6 billion in revenues per year for every year Mr. Schwarzenegger was in office. The VLF reduction has resulted in a total loss of over $30 billion to the state, an amount in excess of the current California budgetary shortfall. How conveniently Mr. Crane forgot to mention that critical fact when it doesn’t suit his ideological assault on public sector unions.”

“Now that Mr. Crane senses his confirmation may be in jeopardy, he attempts to marginalize his own Op-Ed by releasing a new statement saying he really didn’t mean to attack all public sector unions, just those who happen to have statutory civil service protections,” Lieu added. “For those in Ivory Towers that distinction may have some academic meaning, but for everyone else in the real world that is a distinction without a difference. Civil Service protections do not prevent employees from being terminated or laid off, they provide standards for government to follow when firing or disciplining employees. Such protections do not guarantee appropriate wages or benefits, nor address a plethora of other issues, such as workforce safety issues.”

“Mr. Crane’s Op-Ed also discusses political spending by public sector unions, “Lieu concluded. “In his world view, political spending by the California Teachers Association is inappropriate, but the massive political spending by the Koch Brothers would presumably be acceptable. I cannot, and will not, support someone for the post of UC Regent who blames public sector employees, such as teachers, for somehow being responsible for our economic crisis or the resulting decline in general fund spending. We need UC Regents who are interested in solving problems, not those who twist historical facts to suit an ideological agenda.”

So, as I wait for Crane to return my call, I’ll leave you with something reporter Peter Byrne, who authored the award-winning investigative series ‘Investor’s Club” How the Regents of the University of California spin public funds into private profit,” said to me yesterday when I asked him about the wisdom of putting investment bankers on the UC Regents Board. “Putting investment bankers in front of a plate of $63 billion is like putting a pound of hamburger in front of a bunch of feral cats. They are going to eat it. It’s in their nature.”

So, would confirming Crane be like adding another feral cat to the mix? Is he just another Kochhead? Or is he just maligned and misunderstood, as the Chron vehemently implies?

Stories for big kids: Tales hit the stage with Paul Flores, the Living Word Project, Campo Santo, and Word for Word

John Elberling

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March 9, 2011

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Stories for big kids: Tales hit the stage with Paul Flores, the Living Word Project, Campo Santo, and Word for Word

Stories aren’t just for youngsters who read The Very Hungry Caterpillar before bed or tell scary tales around a campfire. The big kids need stories too, and lucky for San Francisco, the city boasts dynamic performers enacting mature and human stories on stage. Feeding complex chronicles to the souls of grown up audience members, Paul Flores, Living Word Project, Campo Santo and Word for Word do their parts to prove stories for big kids rule.

In You’re Gonna Cry, a one-man show about the effects of Mission District gentrification performed in February at Dance Mission Theater, Flores embodied about a dozen neighborhood characters. Ranging from a Latino bohemian, a pink-haired DJ, and an elderly dumpster-diving immigrant, to a salsa-dancing old timer, a drug dealer, and a well-meaning business man, the personalities illuminated his story from diverse perspectives.

With versions of each character walking the streets in real life, You’re Gonna Cry‘s tales resonated. “The project is not meant to be consumed passively, but to move people to respond and take action,” Flores wrote in the program notes, revealing his intention to employ art for social change. The call to action: empathy, respect, and support for one’s neighbors, and acknowledgment of the cultural nuances in the Mission District. For Flores, hip-hop theater and storytelling helped to put a human face on the issue.

A Def Poet, playwright, novelist, and spoken-word artist, Flores continues to make a huge impact on teens as a co-founder of Youth Speaks, which implements programs connecting poetry, spoken word, youth development, and civic engagement. The resident theater company of Youth Speaks, the Living Word Project extends the reach of personal narratives, emphasizing spoken storytelling to communicate important social issues and current movements. Living Word Project Artistic Director Marc Bamuthi Joseph, also a former Def Poet, works closely with a select group of writers and performers, whose ages span from 19 to 25, for the productions.

Trailer for the Living Word Project’s ‘Word Becomes Flesh’:

Excerpts from the Living Word Project’s Word Becomes Flesh appeared in December of last year at YBCA’s Left Coast Leaning festival, co-curated by Joseph. There, committed performers enacted letters to an unborn son, with electrifying physicality and rapid-fire wordplay. The work presented a counter-narrative to the narrow frame of current commercial hip-hop, breaking stereotypes. Through performance, the group focused on the oral transfer of a story, directly confessing personal thoughts and emotions to make connections. Watch for them with Campo Santo at Intersection for the Arts this November in Tree City Legends, written by Dennis Kim of Denizen Kane and directed by Joseph.

Campo Santo, the resident theater company at Intersection for the Arts led by Sean San Jose, plays a major role in theatrical storytelling, linking writers to the stage. “Campo Santo is Spanish for sacred ground,” the group’s artist statement declares. “Like the roots of our name, we are taking the sacred form of storytelling and using it as a tool to bond community through socially relevant plays.”

In May, Campo Santo performs for the first time in Intersection for the Arts’ new home at the San Francisco Chronicle Building, presenting Nobody Move, based on the book by Denis Johnson. Adapted by San Jose, the performance offers a noir psychic picture of the United States from an outsider’s seat. In September, Campo Santo continues its work with Pulitzer Prize-winning author Junot Diaz when it presents The Pura Principle, created from Diaz’s recent short stories and original writings. Also expect storytelling to be part of this year’s Bay Area Now Triennial at Yerba Buena Center for the Arts, where San Jose is one of several curators for performances during the final months of 2011.

Another group breathing life into short stories is the Word for Word Performing Arts Company, operating at Z Space. Founded by Susan Harloe and JoAnne Winter, Word for Word is known for staging performances of classic and contemporary fiction, enabling the company to tell literary stories with theatricality. Word for Word’s last show was extended due to its popularity and positive critical reception. This week, The Islanders opens at Z Space, telling about the bonds of friendship – as two women reunite for a trip to Ireland — by bestselling author Andrew Sean Greer, directed by Sheila Balter.

While some degree of storytelling already exists in most narrative theater work, the outward expression of a story onstage shifts the performances of Flores, the Living Word Project, Campo Santo, and Word for Word into distinct territory. By combining narrative and literature with powerful theatricality, these San Francisco performers make clear that stories are for people of all ages.

THE ISLANDERS
Wed./9-Fri./11, 8 p.m.; Sat./12, 3 and 7 p.m.; $15-$40
Z Space
450 Florida, SF
www.zspace.org

Waste not

Jesse Hawthorne Ficks

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March 8, 2011

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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.”

For safety’s sake

Jesse Hawthorne Ficks

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March 8, 2011

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rebeccab@sfbg.com

A federal investigative hearing on the deadly Sept. 9, 2010 San Bruno explosion triggered by the rupture of a high-pressure Pacific Gas & Electric Co. pipeline was all about getting answers — but it has also sparked new questions.

For instance, why didn’t the San Bruno Fire Department have maps of the 30-inch gas line running beneath the neighborhood where the blast destroyed 37 homes and killed eight people? Why did PG&E’s records list that section of pipe as seamless when the federal investigation revealed that it actually consisted of shorter pieces of pipe, called pups, welded together? Why has PG&E been unable to produce records of close to 30 percent of its pipeline infrastructure, proving that the lines are in decent shape? And does the paperwork it has produced contain reliable information?

These shortcomings speak to a broader issue gaining attention as more fatal pipeline ruptures grab headlines. On a national scale, at least 59 percent of onshore gas transmission pipelines were installed before 1970, according to a report issued by the U.S. Department of Transportation’s Office of Pipeline Safety, making most of the infrastructure a minimum of four decades old.

Pipelines everywhere are getting older, and in some cases, weaker. Yet there tends to be a lack of awareness about the risks associated with the subsurface transport of hazardous materials, and as the San Bruno disaster demonstrated, there is often a lack of communication between utilities, local governments, and property owners about minimizing the risks.

These gaps are especially apparent in the process of approving new development projects. Tried-and-true systems are in place for indicating to contractors where they should and shouldn’t dig to avoid making direct contact with underground infrastructure, but that information seldom takes into account what condition a pipeline is in. The general assumption is that the pipeline operator (in this case, PG&E) is keeping up with maintenance, and that it’s safe to dig. Yet with the gaping questions surrounding PG&E’s infrastructure in the wake of the San Bruno blast, there’s a new level of uncertainty.

Pipeline safety isn’t just a problem for utilities and pipeline regulators to worry about, according to a report issued by Pipelines and Informed Planning Alliance (PIPA), an initiative led by the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), which brought together more than 100 experts in the field. It should also be on local governments’ radar when they’re making decisions about land use. Yet in San Francisco, this level of awareness seems to be absent.

According to PIPA, “Changes in land use and new developments near transmission pipelines can create risks to communities and to the pipelines.” The hefty report contains an exhaustive set of best practices for planning near pipelines, many specifically targeting local governments. Priority No. 1 for local planning departments should be to “obtain mapping data for all transmission pipelines within their areas of jurisdiction … and show these pipelines on maps used for development planning.” The report also suggests taking special precautions in areas spanning 660 feet on either side of a gas-transmission pipeline; creating systems of communication so information can be readily shared between local governments, utilities, and landowners; and identifying emergency contacts who can halt dangerous excavation activities in case something goes wrong.

The Guardian sent e-mail queries to the Planning Department and Department of Building Inspection (DBI) to find out if the city was adhering to any of the practices recommended by PIPA as the best ways to ensure safe planning near pipelines. Reached by phone, a spokesperson from Planning told the Guardian, “DBI is where you need to call.”

But DBI spokesperson Bill Strawn said, “Those questions you were asking really don’t fall into the Department of Building Inspection’s jurisdiction.”

Strawn added that the issue of underground infrastructure is not really taken into account when building permits are issued. “We don’t go to the [Public Utilities Commission] or [Department of Public Works] or PG&E” for that kind of information, Strawn said. “That would be the responsibility of the property owner, and the plans they submit to us don’t include that kind of utility information.”

PG&E is scrambling to meet a March 15 deadline imposed by the California Public Utilities Commission to turn over records proving its lines are intact. Until it can prove the integrity of its system either on paper or through costly, high-pressure water testing, the condition of some lines is unknown. PG&E did not return calls for comment.

In San Francisco, a densely populated urban hub on an earthquake-prone peninsula where major development projects are being permitted all the time, these issues are particularly pressing. Charley Marsteller, former chair of San Francisco Common Cause, certainly thinks so.

Last December, Marsteller penned a letter to a well-respected geotechnical engineer, raising a question about pipeline safety in light of California Pacific Medical Center’s plans to construct a massive hospital at its Cathedral Hill site on Franklin Street. According to a map of underground gas lines published by the Guardian (See “PG&E’s Secret Pipeline Map,” 9/21/10) using several sources of data, a PG&E gas main appears to run beneath Franklin.

Marsteller was worried about whether excavation for CPMC — or other projects requiring excavation, or even simple contractor digging — could cause vibrations that could affect that pipe.

“As CPMC digs its 100-foot hole, and due to the massive construction vibrations, is there not a risk that the PG&E gas pipeline is at risk of rupture?” he wanted to know.

The engineer, who preferred not to have his name published, responded in an informal letter that “it is indeed possible that soil movement generated by excavation and/or foundation construction could rupture a deteriorated gas main.” He added that while he wasn’t familiar with the details of CPMC’s or other excavation projects on Franklin Street, he did know that the area in question “consists of relatively weak soil” underlain at depth by a geologic feature called the Franciscan Formation, made of sandstone and fine-grained, sedimentary rock.

Yet no one seems to be giving this question any kind of professional attention or study. Eerily, Marsteller seems to be the only person in San Francisco who’s asking what happens if a major excavation project is permitted nearby a corroded pipeline — and he says he hasn’t received much of a response from the “rather blistering memos” he’s fired off to planning commissioners and members of the Board of Supervisors to ask about it. “I’m very concerned that we’re not suspending contractor digging proximate to a pipeline,” Marsteller said, until PG&E can offer proof that the lines nearby excavation projects are in good shape. Whether these issues will ever be considered as part of the local planning process, Marsteller predicted: “The answer is, no one ever thinks about this.”

Excavation damage accounts for nearly one-quarter of pipeline “incidents” nationwide, according to the federal Office of Pipeline Safety report. Yet safeguards are in place to prevent these things from happening.

When the Guardian initially phoned the Planning Department to ask about digging near pipelines, the phone call was returned by the Department of Public Works. Anytime a street excavation project is planned, DPW’s Gloria Chan explained, a notice of intent is issued 120 days beforehand to PG&E, AT&T, the Public Utilities Commission, and any other stakeholders that might have something running underground. Projects are then designed to integrate existing lines. “Sometimes the information we get may be 40 years old,” Chan said. Through a mandated process called USA Service Alert, people go out to physically mark where the underground infrastructure begins and ends on the project site before a contractor starts breaking ground.

That same process occurs with private development projects, explained Alan Kropp, a geotechnical engineer with the firm Alan Kropp & Associates. Kropp said it’s left up to a private contractor to work out the technical details for digging, which are governed by a set of regulations. “If you’re one foot away or three feet away, most pipes don’t care,” Kropp said, but he acknowledged that if a pipe is deteriorated, there could be instances where digging a normally safe distance away could still pose a problem.

“Almost all the time, the system works well,” Kropp said. As for the condition of the pipe, Kropp said, that information generally doesn’t guide project decisions. “It’s really up to the owner of the pipeline,” he said. “They would be the ones in control of that information.”

Bay Area dance’s bragging rights

Jesse Hawthorne Ficks

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March 8, 2011

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DANCE When the 25th Annual Isadora Duncan Dance Awards take place March 14, the local dance scene will have much to celebrate. In advance of the event, I recently asked several local members of the community what makes Bay Area dance special.

Wayne Hazzard, executive director of Dancers’ Group, pinpoints the relationship between contemporary and traditional artists. “I’ve seen it [the dance community] really grow and continue to do what it’s been doing and attract new companies and artists to the area.”

According to Hazzard, the dance scene’s steady development is linked to the Bay Area’s “livability” and “the maverick nature of the West Coast, this region where you can find yourself. Even if you are coming from a tradition, you can deepen that and go in your own direction, which seems to be a truism of artists here whether [we’re discussing] the San Francisco Ballet or Brenda Way or Chitresh Das. They’re all traditionalists, yet they’re imbuing their formal structural ideas around theater and dance with current issues. Joe Goode as well.”

Jessica Robinson Love, artistic and executive director of CounterPulse, focuses on a different aspect of community. “We can’t talk about dance in the Bay Area without discussing the Ethnic Dance Festival and the huge amount of culturally-specific dance that’s practiced here,” she says. Love also believes the Bay Area’s proximity to Silicon Valley makes for greater interest in and use of technology: “Being on the Left Coast gives us a freedom to experiment. There’s less of a fear of risk-taking and failure, so there’s a lot more diversity in terms of the choices choreographers make about their work.”

“I also see a real emphasis on queer and gender-bending performance,” she adds. “There’s an emerging, blossoming conversation between the drag performance community and the dance community in San Francisco right now.”

Joe Landini, artistic director of The Garage, agrees that queer dance-makers are among the strongest voices to surface. Specializing in emerging choreographers, he produces an exceptional amount of new work. “What I’m finding is that a lot of choreographers coming out of the university system are choosing to relocate to San Francisco because the resources are less competitive than New York. San Francisco probably has more opportunities for emerging choreographers than any other place in the United States, so we have a huge pool of trained choreographers.”

Site-specific work also makes its mark on the scene. Hazzard points in particular to Anna Halprin’s long history of investigations, noting that, at 90, she’s still creating new work, including an upcoming trilogy honoring her late husband titled Remembering Lawrence. “Joanna Haigood particularly deals with space and ideas,” he adds, “so when you look at aerial artists that work here, whether its Haigood or Jo Kreiter or Project Bandaloop, no one anywhere else is doing what they’re doing. It’s uniquely about our region and space and relationship to dance and performance.”

THE 25TH ANNUAL ISADORA DUNCAN DANCE AWARDS

Mon/14, 7 p.m., free

Yerba Buena Center for the Arts Forum

701 Mission, SF

(415) 978-2787

www.ybca.org

Psychic Dream Astrology

Andrew Lam

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March 8, 2011

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March 9-15

ARIES

March 21-April 19

Being too goal-oriented in the realm of relationships can backfire. Don’t focus so much on how you believe things should look. Be receptive to what is, and make the best of that.

TAURUS

April 20-May 20

If you aren’t more flexible, you’ll be unable to let in the good that is trying to enter your life. All change requires some compromise. Don’t overthink things, and practice openness wherever you feel blocked.

GEMINI

May 21-June 21

Go with the flow even if it takes you someplace you didn’t expect to be, Gemini. This isn’t the week to power through your cold or tummy ache. Listen to the needs of your body and heart and respond with grace.

CANCER

June 22-July 22

It’s such a delicate balance between your need for love and family-style connections and your need for high quality, real-deal autonomy. Pursue that balance with everything you’ve got this week, Cancer.

LEO

July 23-Aug. 22

Be courageous and creative! It’s time to go to the next level with your development, and nothing is going to get you there other than your own energy. Go big and bold.

VIRGO

Aug. 23-Sept. 22

It’s all about supporting that big, beautiful heart of yours with that equally large brain. Go for what brings forth happiness and creativity at a pace you can sustain. Love wants to enter your life, so open up and let it in.

LIBRA

Sept. 23-Oct. 22

Be proactive in creating what you want, Libra. The world of people awaits you and only requires that you show up as your full, real self. Resist any and all urges to mold yourself into what you think others want this week.

SCORPIO

Oct. 23-Nov. 21

If you have to repress or hold back on what you’re feeling, then its time to retreat and TCB, pal. Make sure you create space for loving self-care. You have so much to learn from the needs of your stresses — if only you’ll listen.

SAGITTARIUS

Nov. 22-Dec. 21

Lean on your friends this week, Sag, and let them help you through your vulnerable times. Knowing how and when to ask for help is an art form, and you should pursue it, full speed ahead.

CAPRICORN

Dec. 22-Jan. 19

In matters of the heart, negative thinking generally serves to manifest your greatest fears. Such crap! Nurture your worries with tender loving care — or find someone else who can do it for you and let the good vibes roll.

AQUARIUS

Jan. 20-Feb. 18

The better your boundaries, the longer you’ll be able to hold onto passion. Approach your life with a clear sense of what works for you and what you’re not willing to do. Be the change you want to see in your life.

PISCES

Feb. 19-March 20

Too much ego will backfire on you, Pisces. Whether you’re playing the victim or the perp, make sure to take responsibility for your role. If you don’t like your actions, be humble enough to change them.

Jessica Lanyadoo has been a Psychic Dreamer for 16 years. Check out her website at www.lovelanyadoo.com or contact her for an astrology or intuitive reading at (415) 336-8354 or dreamyastrology@gmail.com.

In Wisconsin, it’s all about jobs–249,865 of them

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March 4, 2011

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By Jess Brownell

(Jess Brownell is a freelance writer in Milwaukee who keeps a sharp eye on job-creating events in Madison, Wisconsin.)

According to our new Governor, Scott Walker, his budget – which includes big tax breaks for the private sector and strips public employees and teachers of their collective bargaining rights – will engender a business climate that will soon produce 250,000 new jobs in Wisconsin. Right now the outcome remains uncertain. The battle is on, and after the battle the war will continue. Yet who can argue with the need for jobs? And what state couldn’t use 250,000 new ones? So in the interest of fairness, let us put aside our differences for a moment and peer into this rosy future . . .

(The Governor of Wisconsin and an aide are showing a prospective factory site to a manufacturer who is considering moving his production facility to Wisconsin.)

WisGov: I’m sure you’ll like it here. We are all very proud of our natural beauty. Why, not far from here Frank Lloyd Wright built his dazzling Taliesin. With no help from the state, I might add. And with my new budget and laws governing bargaining and employment we’re attracting attention all over the world. You could lose out on this prime location if you don’t move quickly.

Mfr: Very nice, the beauty and the Frank-What’s-His-Name and all that, but what about the nitty-gritty? What about taxes?

WisGov: No taxes.

Mfr: No taxes?

WisGov: None at all. We’ve eliminated all taxes on business. I would point out that even Alabama and Mississippi still collect some taxes, or try to. We’ve given that up. So there you go. Moving to Wisconsin just makes economic sense.

Mfr: It’s very tempting, I must admit. Could you tell me a little about the public school system?

WisGov: Don’t have one.

Mfr: No public schools?

WisGov: Nope. We used to have them, but after I gave the teachers the ass-kicking they had coming our damn test scores kept going down. So we closed the public schools and now we give every kid a voucher for a private school instead.

Mfr: And the test scores are better?

WisGov: That’s the beauty part. There’s no requirement for testing private school students. We are totally off the hook on education. Saves a ton of money.

Aide: We’re pretty sure that a lot of those kids can read and write.

WisGov: And do simple sums.

Mfr: Well, our jobs aren’t terribly demanding in that way. But it could cause some problems in assembling a competent work force.

WsGov: We’ve got that covered, too. Our new laws say that you don’t have to pay any employee until you are completely satisfied with his or her performance. It’s part of what we call the Wisconsin Idea.

Mfr: Wow. How long does that provision last?

WisGov: There’s no time limit. (Laughs.) Wink, wink, nudge, nudge.

Mfr: Got ya. I have to hand it to you folks in state government here. You really do have your people on the run. Talk about desperation!

WisGov: I said I was going to create a business-friendly climate, and with the help of the good Lord and a Republican majority, that’s what I’ve done.

Mfr: You’ve convinced me. I’m moving the business to Wisconsin. Uh, you wouldn’t throw in a sign, would you?

WisGov: You bet we would. Neon, if you want. I can see it now, right out on the highway. The H. Allen Smith Putty Knife Factory.

Mfr: Big letters?

WisGov: As big as you want. By the way, how many jobs are we talking about?

Mfr: Oh, 25, maybe 30.

Aide: That’s really great. (To WisGov, looking at his clipboard.) Only 249, 865 to go. Or 249,870, as the case may be. (To Mfr.) That’s counting the 105 new state workers we hired to run the Business Development Department, of course.

Mfr: (Glancing up at the sky.) What was that?

WisGov: That? Just a snowflake.

Mfr. You have snow?

Wisgov: It’s Wisconsin. You have to expect a little snow in the winter.

Mfr: There wasn’t anything in your brochure about snow. Or winter.

WisGov: We didn’t really think it was necessary.

Mfr: I’m not moving anyplace that’s got winter.

WisGov: You don’t have to live here, for God’s sake.

Mfr: Yeah, but what if I have to come here in the wintertime for a meeting or something. I could get snowed in. I could slip and fall on the ice and hurt myself.

WisGov: We’ve got snowplows. We’ve got salt.

Mfr: That’s just it. I don’t want anything to do with any place that needs snowplows and salt.

WisGov: Look, we’re burning coal and oil as fast as we can. We buy it at a discount from the Koch brothers. At least they assured me over the phone it was a discount. But climate change doesn’t happen overnight, you know.

Mfr: But you do expect a winter this year?

WisGov: Yes.

Mfr: And next year?

Wisgov: Probably.

Mfr: Sorry, but that’s a deal-breaker for me. I’m outa here. (Shivers, puts up his collar and hurriedly departs.)

Aide: Well, I guess we’re back to 249, 895.

WisGov: Goddamn wimp.

Aide: Don’t take it so hard, Governor. We’ve got that delegation coming in from Fiji tomorrow. They’re sure to love it here.

Okay, the above is admittedly fanciful. Given its current poisonous political climate, not even a putty knife manufacturer would consider moving to Wisconsin. Also, I know the reference to H. Allen Smith is pretty obscure. Anyone who recalls H. Allen Smith reveals a lot about both his age and his taste in literature, but I always thought that his Life in a Putty Knife Factory was one of the great American book titles. I never thought that as a concept it would be preferable to life in Wisconsin, though.

Newsom’s fancy gift, trip to China

Sasha Cuttler And Mary Magee

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March 4, 2011

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The Chronicle’s got a story today about how Lt. Gov. Gavin Newsom’s personal investments and earnings, documented in an economic disclosure form released by the Fair Political Practices Commission (FPPC), make him a lot richer than his boss, Gov. Jerry Brown.

The form also discloses travel payments and gifts Newsom received in 2010, which makes for some interesting reading. For one, San Francisco’s former mayor evidently received a very expensive pen (made by Louis Vuitton and valued at $398) last year from this guy.

The most significant item in the travel and gifts category, of course, was Newsom’s trip to Shanghai last June, valued at $9,082 and paid for by the San Francisco-Shanghai Sister City Committee. He traveled there with former Mayor Willie Brown and some others for San Francisco week at Expo 2010 Shanghai China.

Evidently, it was a week filled with dancing, singing, and celebration. (And dressing to impress. Check out the creamy, eco-friendly suit Brown wore at this “dazzling” event.)

http://www.youtube.com/watch?v=NZ8rKho15dw

Since becoming lieutenant governor of California, Newsom has continued his efforts to improve business relations between China and San Francisco. Just have a look at his recent article in China Brief, a magazine published by the American Chamber of Commerce in the People’s Republic of China (AmCham-China).

In the article, penned in late January of 2011, Newsom wrote:

“China’s central government stresses the importance of developing their innovation industry sectors–including clean-tech, biotech and information technology (IT)—and is projected to commit over $600 million of government funds to support this development. This overlaps with San Francisco’s core industry sectors. With over 500 tech and new media companies (including leaders such as Salesforce.com, Zynga and Twitter), more than 225 clean-tech companies and a worldclass biotech hub (anchored by the University of California San Francisco), San Francisco brings together internationally-recognized leadership in each of these sectors.”

Meanwhile, a few items on that economic disclosure form suggest that what’s good for business in China is also good for Newsom. His wife’s investment portfolio, the Jennifer Siebel Newsom Trust, includes stocks ranging from $10,001 to $100,000 each in China Valves Technology, a for-profit, “e-learning services provider” called Chinacast, and a Chinese motor manufacturer called Harbin Electric.

Redevelopment debate full of bum choices

Mary Magee

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March 2, 2011

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Redevelopment debate full of bum choices

At the Potrero Hill Democratic Club’s debate about Gov. Jerry Brown’s proposal to ax local redevelopment agencies to balance the state’s $26 billion deficit, folks attempted to evaluate if redevelopment agencies are essential for job creation and community revitalization, if reform, not total destruction, is possible, and if bum choices are all we have to look forward to.

The Chronicle’s Marisa Lagos, who moderated the debate, noted that redevelopment agencies were created over 60 years ago to create economic development opportunities by borrowing against future tax increases that agencies think they can create.

“That’s a fancy way to say ‘borrow against future taxes,’” Lagos joked, pointing to the Candlestick Point/Hunters Point Shipyard project as an example of an ongoing project, and the Yerba Buena project as an example of a completed success.

“The Governor is arguing that when the state is cutting schools and other essential services, this is not the best use of tax dollars,” Lagos stated.

Panelist Olson Lee, deputy executive director of San Francisco’s Redevelopment Agency, pointed to affordable housing as evidence of the agency’s positive impact.

“I think Redevelopment is important because of the good things it has done,” Lee said, pointing to 11,000 units of affordable housing that the agency helped build in the city.

Panelist Carroll Wills, the communications director for the California Professional Firefighters, said “many wonderful projects” have occurred under Redevelopment. But he pointed to what he called “a decade of tricks and games,” on the part of Redevelopment agencies as one reason why the state is in a fiscal crisis that threatens firefighters’ jobs.

“Concrete does not trump core services,” Wills said, arguing that it’s not clear that many affordable housing projects would not have been built without redevelopment aid

Arc Ecology’s Saul Bloom accused Gov. Brown of “short-circuiting” what could have been an important statewide discussion about redevelopment reform, with his bombshell suggestion in January to eliminate redevelopment agencies entirely

“I’m sympathetic to the argument that Redevelopment takes money away from core services,” Bloom said. “But what do we do to replace it? And is economic development versus core services a false choice?”

Lee pointed to Mission Bay as further evidence of Redevelopment’s success.

“It was considered a brown field, and through development, it’s much different,” Lee said, noting that 20 percent of tax increment financing goes to the General Fund to pay for redevelopment infrastructure. “Clearly the university would not have been there. It was an opportunity to place UC there and generate economic opportunities.”

Wills argued that Redevelopment Agencies are a luxury we can no longer afford, even as he acknowledged being unfamiliar with local redevelopment projects.

“At best, redevelopment moves around the pieces,” Wills said. “It doesn’t increase economic development and it doesn’t necessarily pay for itself.”

Bloom noted that developments like Mission Bay are dependent on large institutions, like the University of California, which can’t be forced to implement city laws like local hire.

And he said he found it “disappointing” that there wasn’t much more of a dialogue around the plans to redevelop Candlestick Point and the Shipyard, despite the fact that the city held hundreds of meetings over the past decade.

“It was more a case of, Here’s our idea, tell us what you think of it,’” Bloom said. “Perhaps if we had invited the nation’s largest industrial developer, instead of the nation’s second largest home developer, we would have had a different dialogue.”

Lee replied that the Shipyard has been under discussion for 15 years.

“It’s a very large project, the largest in the Western United States,” Lee said. “It’s a brownfield, though I know Espanola will say it’s a Superfund site,” he continued, as Bayview elder Espanola Jackson bristled under her hat, and the audience wondered if Lee meant that the US E.P.A. somehow got it all wrong.

Lee further shocked audience members by saying Treasure Island was not a redevelopment project (leading Bloom to clarify that Treasure Island is under the jurisdiction of the local Treasure Island Development Authority, if not the SF Agency).

“People felt they wanted economic development at the shipyard,” Lee continued, noting that the neighborhood suffered after the Navy withdrew from the shipyard in the 1970s. But he did not mention that major bones of contention around the redevelopment proposal, centered on plans to build 10,000 mostly market-rate condos, a bridge over an environmentally sensitive slough, the taking of a chunk of the community’s only major park, and no proof that thousands of promised jobs will materialize.

Wills noted that most local redevelopment commissions are peopled by the members of each municipality’s city council, a situation he believes leads to a lack of accountability. But members of the audience, including this reporter, noted that San Francisco’s Redevelopment Agency consists entirely of mayoral appointees, who, unlike elected officials, can’t easily be voted off the proverbial island.

It was at this point that panelist Calvin Welch, a longtime housing activist, showed up at the debate, apologizing for being late, but blaming his tardiness on being on a phone call with Sen. Mark Leno to discuss Brown’s redevelopment proposal.

And from there, the conversation veered towards discussions of what could happen to existing redevelopment projects if Brown goes through with his elimination threat.

Lee noted that if projects simply had a disposition and development Aagreement (DDA), but Redevelopment was no longer there, there would be no project financing. “The devil’s in the details,” Lee said. “Because if you don’t have bonds, what’s the point of having an agreement.”

Wills opined that Gov. Brown’s proposal has “a vehicle to roll back the bum’s rush” of projects that local municipalities have been trying to push across the finish line, ever since Brown dropped his Redevelopment elimination bomb in January.

Welch went off on a historical riff about how the San Francisco Redevelopment Agency (SFRA) was met with controversy and outrage until 1988, when Art Agnos was elected mayor, and brokered a deal under which SFRA could do tax increment financing, provided the majority of funds were used for affordable housing.

“It became a finance agency to build infrastructure and affordable housing,” Welch said, noting that attempts to build out Mission Bay around commercial offices and high rises failed, until the Agency used tif to redevelop the site.

“But mark my words, Lennar is going to come out of this just fine,” Welch added, reminding me of a recent comment that former Lennar executive Emile Haddad reportedly made that suggests Haddad believes the California housing market is poised for a rebound.

(The article outlined how Haddad sold 12,000 acres in California for a $277 million profit at the housing market’s peak four years ago, reacquired it at half the price in 2009, and is now saying it’s time to build in his new role as CEO of FivePoint Communities Inc., which is developing four new master-planned communities with a combined 45,000 residences at Newhall Ranch north of L.A., the El Toro Marine Corps Air Station in Orange County, the Candlestick Point/Hunters Point shipyard and Treasure Island in San Francisco, with investors including Lennar, Michael S. Dell’s MSD Capital LP, Ross Perot Jr.’s Hillwood Development Co. and Rockpoint Group LLC. “I don’t want the party to show up and I’m not dressed,” Haddad, 52, reportedly said in a recent interview. “When the market says ‘I’m here,’ we’ll be one of the few that can deliver inventory.”

(The Haddad article, which appears to be a non-bylined reprint from Bloomberg News, also claimed that Hunters Point sales are set to begin by late 2012 with prices starting at $525,000, as the Navy continues its cleanup of the 700-acre site. And that the plan now calls for as many as 12,000 homes, 3 million square feet (of commercial space and a new stadium for the 49ers. And that 7,000 homes may eventually be built on Treasure Island and adjoining Yerba Buena Island, under terms of a final development agreement that may go before the San Francisco Board of Supervisors for approval in May, with units averaging $800,000 and reaching up to $2 million, according to Lennar V.P Kofi Bonner.)

And during the Potrero Hill Dems debate, Bloom noted that the Treasure Island plan is being “sped up” and that the Board is expected to vote on the plan as soon as possible. “But since these plans were not bonded before January [when Gov. Brown took office], what’s the point of speeding up the process?” Bloom asked.

“We’re basically seeing a brick wall,” Welch interjected. “There are virtually no funds for permanent affordable housing in San Francisco.But Jerry Brown is not going to commit financial hari kari. Every major developer of market rate housing will come out just fine, because of state actions, not because of a local vote. Deals are going to be made. It’s the question of affordable housing that’s our challenge. You’re gonna be stuck with public housing, as it is, unless there’s affordable housing financing.”

Wills claimed that Prop. 22, which voters approved last November, “created a mechanism so rigid,” that the state’s only option was to eliminate redevelopment. “Basic services are dying on the vine,” he said. “We can’t afford to give developers subsidies.”

Lee noted that SFRA built thousands of affordable units over the years that saved the city thousands in terms of core services it would otherwise have to provide. “Affordable housing is so basic, you can’t do things we take for granted if you are living under a freeway,” he said.

Bloom suggested Redevelopment could do a better job of economic development, including the creation of permanent and sustainable jobs, like his proposal to create maritime uses at the Shipyard—something not entertained under the city’s Shipyard plan.

Welch connected the dots between the taxpayer revolt that led to Prop. 13’s passage and the current fiscal woes of municipalities unable to raise taxes on commercial development. “That’s a killer,” he said, noting that housing costs more to build and maintain than it generates property taxes, especially if it’s family housing. ‘It’s those damn kids,” he joked.

Welch noted that Gov. Brown used redevelopment money to enable market rate development in downtown Oakland when he was mayor of Oakland—and claimed that Brown equated affordable housing with crime, at the time.

“We love Brown better than Meg Whitman, but it’s 2011 and we face bum choices.”

Community advocate Sharen Hewitt, who heads the C.L.A.E.R. project, asked if the panel thought San Francisco could be a “demonstration model” for using Redevelopment funds to build 50 percent affordable housing.

Welch said conversations have “already happened” between Mayor Ed Lee and Gov. Jerry Brown that have led him to believe that, “all of San Francisco’s redevelopment projects will be made whole, affordable housing will be protected and Brown will be committed to a San Francisco model.”

“It’s like the film Casablanca, when people are shocked to find out that gambling is going on in a casino,” Welch said. “People are shocked to find out that capital talks in a capitalist system.”

Espanola Jackson asked Welch what will happen to the shipyard development, in face of a lawsuit that POWER brought that’s due to be heard March 24.

“The shipyard plan has a political function,” Welch said, noting that it was the result of a citywide vote in 2008. ‘We opposed it, but we lost. The structure of that deal flows from the vote.”

City College Board member Chris Jackson expressed frustration that the Redevelopment conversation had devolved into a housing conversation.

“Mission Bay is all about biotech, but who works at UCSF?” Jackson said, noting that Redevelopment, as a state-funded agency, does not have to agree to the city’s newly approved local hire law.

Welch acknowledged that there has never been a study to determine the tipping point required to lift the Bayview out of poverty.

Lee admitted that Redevelopment’s focus has been housing, “because San Francisco is such an unaffordable city.” But he claimed that SFRA had a “much more aggressive program on local hire than the city, for many years.” Noting that SFRA has tried to attract restaurants and food establishments to Third Street, over the years, Lee said, “It hasn’t been something we’ve been particularly successful at.”

Welch opined that the “skills and abilities of the San Francisco community are far greater at stopping projects and protecting neighborhood character, but we can’t figure out how community-based organizations can employ their own people.”

And then it was time to go back out into the cold March wind and try to wrap our minds about the true meaning of “bum choices” in 2011.

Chiu’s challenge

Jesse Hawthorne Ficks

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March 1, 2011

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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.

The mayor’s race: beyond compromise

Jesse Hawthorne Ficks

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March 1, 2011

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EDITORIAL The race for mayor is now fully underway, with eight candidates declared — and at least four are fighting for the progressive vote. It’s a remarkably open field — and the fact that there’s no clear frontrunner, no candidate whose money is dominating the election, no Willie Brown or Gavin Newsom, is the result of two critical progressive reforms: public financing and ranked-choice voting.

In fact, those two measures — promoted by the progressive, district-elected supervisors — have transformed the electoral process in San Francisco and undermined, if only somewhat, downtown’s control.

As Steven T. Jones points out in this week’s issue, the leading candidates are all sounding similar, vague themes. They all say the city can work better when we all work together. That’s a nice platitude, but it reminds us too much of President Obama’s promise to seek bipartisan consensus, and it’s likely to lead to the same result.

On the big issues, the Republicans don’t want to work with the president, and big downtown businesses, developers, and landlords don’t want to work with the progressives. In the end, on some key issues, there’s going to be a battle, and candidates for mayor need to let us know, soon, which side they’re going to be on.

Sup. David Chiu, who entered the race Feb. 28, may have the hardest job: he actually has to help balance the city budget. As board president, he’ll be involved in the negotiations with the Mayor’s Office and the final product will almost certainly carry his imprimatur. It’s unlikely the progressives on the board will agree with the mayor on cuts; it’s much more likely that some will seek revenue enhancements as an alternative. Whatever Chiu does, he’ll be on the record with a visible statement of his budget priorities.

We’d like to hear those priorities now, instead of waiting until June. But either way, the remaining candidates, particularly those who want progressive and neighborhood support, need to start taking positions, now. What in the city budget should be cut? What new revenue should be part of the solution? What, specifically, do you support in terms of pension reform? How would you, as mayor, deal with the budget crisis?

Every major candidate in the race has enough familiarity with city finance to answer those questions. None should be allowed to duck or resort to empty rhetoric about everyone working together.

The same goes for community choice aggregation and public power. There is no consensus here, and will never be. Either you’re for public power and against Pacific Gas and Electric Co., or you’re opposed, weak, or ducking — all of which put you in PG&E’s camp.

There are many more issues (condo conversions, tax breaks for big corporations, housing development, help for small business, etc.) on which there has never been, and likely never will be, agreement. The people who make money building new condos will never accept a law mandating that 50 percent of all new housing be affordable (although the city’s own Master Plan sets that as a goal). The landlords will never accept more limits on evictions and condo conversions.

We’re all for working together and seeking shared solutions, but the next mayor needs to be able to go beyond that. When the powerful interests refuse to bend, are you ready to fight them?

The American dream, for sale

Jesse Hawthorne Ficks

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March 1, 2011

14

news@sfbg.com

For Mao Huajun and Wen Lin, a trip to San Francisco is a chance to stock up on American retail. With at least five bags in each arm, the couple from China is all smiles. Through an interpreter, they point to the tags on their new clothes and cologne and explain: "Made in China."

Consumer products devised here and made there are too expensive or not available for Chinese shoppers, so Mao and Wen, who come from Wenzhou, where Mao made a fortune in wood products and real estate, are taking full advantage of their trip.

But don’t confuse them with typical tourists. The two are on a boutique pre-immigration tour of the Bay Area, tailored for rich people who want to move to this country — without the typical problem of getting documents.

An anti-immigration wave is sweeping across the country. The Obama administration has overseen the deportation of a record 390,000 people in the past year. College kids who came here as young children are finding they can’t stay and work. The much-anticipated DREAM Act, which would allow college graduates a chance at citizenship, is in a Republican-induced limbo. Poor and working-class immigrants are getting kicked out of the country every day.

But private companies are going overseas and recruiting investors with the promise of a little-known federal program: For half a million bucks, you can get yourself a green card.

If you’ve got the cash, the promoters say it’s easy. Invest that sum with a broker who’s doing some sort of development in a low-income area and you’re guaranteed the right to move to the United States, immediately, with your entire family. You can live anywhere you want (not just in the area where you invested). And you’re on track to become a U.S. citizen.

But the program, known by its federal moniker of EB-5, is riddled with loopholes and lack of oversight. It has a history of creating few or no jobs, and the projects it funds can harm low-income communities. The immigrant investors aren’t safe, either. They put their fate in the hands of brokers and immigration officials, and if everything doesn’t go according to plan (and sometimes they have no control over that plan), they lose their money and face deportation — sometimes years after settling into their new lives.

In truth, the real winners in this program are the private brokers who profit by connecting immigrant investors with projects that desperately need funding.

San Francisco has been late to enter the EB-5 game — but now long-time political figures, including former Redevelopment Commissioner Benny Yee, are getting in on the action. Oakland has several EB-5 centers looking for money.

THE RICH ARE DIFFERENT

The federal government has long offered employment-based visas that allow people with exceptional skills or who are otherwise valuable to the American economy to immigrate to the U.S. But EB-5, created in 1990, is different: it places value on immigrants based on their wallets, not on their brains.

When Congress debated the creation of EB-5, politicians and members of the public saw it as a bona fide way to create citizenship opportunities. The rationale: people who create jobs with their money deserve to live here.

Federal officials and EB-5 experts told us how it works, at least in theory. To gain initial residence visas for themselves and their families, would-be immigrants have to invest $1 million in a new business or an existing and struggling one. If the business is in a Targeted Employment Area — defined by law as "a rural area or an area that has experienced high unemployment of at least 150 percent of the national average" — the investment requirement drops to $500,000.

The EB-5 applicants can invest on their own or they through a broker, known as a regional center. Regional centers make the process easier for investors; they also pool investment to generate the capital necessary for big projects.

Each investor must create or preserve at least 10 full-time sustainable jobs within two years to stay in the country permanently.

Exact numbers aren’t available, but government data shows that the vast majority of investors opt for the $500,000 plan — and few invest on their own. Luz Irazabal, spokesperson for United States Citizenship and Immigration Services, the agency overseeing EB-5, estimates that 80 percent to 90 percent of visas are granted through the regional centers.

So in practice, the program allows private, unregulated brokers to take the money of wealthy people and invest it in projects that are supposed to create jobs in low-income areas. It’s not necessarily a bad idea, and there’s nothing wrong with opening the most possible paths to legal residency.

But it doesn’t always work out — for the immigrants or the community.

WIN-WIN-WIN-WIN?

The EB-5 program is booming. Only 11 regional centers existed in 2007. Today 133 businesses are designated as regional centers allowed to offer EB-5 visas to foreigners in exchange for their cash and 180 applications for the status are pending.

And while EB-5 started out slowly (only a few hundred green cards were issued in the first few years) and still isn’t a huge factor in immigration (1,886 permits were issued last year), most observers agree it’s on the rise.

"As domestic money has gotten tighter, project developers have discovered the EB-5 program as a possible way to obtain foreign capital," said Stephen Yale-Loehr, a professor at Cornell University Law School, veteran immigration lawyer, and self-described "guru" of EB-5."

Some are dubious. Henry Liebman, the Seattle-based CEO of one of the oldest and most successful regional centers, told us that "most of these [new] regional centers aren’t going to raise a nickel." He added that EB-5 is "not going to be the panacea that’s going to lift us out of the great depression."

And it’s something of a Wild West. The federal agency that runs the program doesn’t regulate the regional centers once they’re approved for business. And even though the centers make loans and invest money, the Securities and Exchange Commission doesn’t monitor them. Indeed, there’s no real regulation at all.

Yale-Loehr says the program helps everyone. "Project developers can win because they can get access to capital for their projects. U.S. workers win because the EB-5 money will create jobs. U.S. taxpayers win because EB-5 money stimulates the economy and creates jobs at no expense to taxpayers. And foreign investors win because they get a green card through their investments."

Not exactly. A Dec. 22, 2010 Reuters news service report notes that "thousands of immigrants have been burned by misrepresentations that EB-5 promoters make about the program, inside and outside the United States. Many have lost not only their money, but their chance at winning U.S. citizenship."

In fact, the news service found that in 2009 "four Koreans who invested in a South Dakota dairy farm through EB-5 lost their entire investment when the price of milk collapsed and the operators of the farm stopped paying the mortgage. When the four, who had invested a total of $2 million in the dairy, tried to step in and save the venture, they discovered their partner had left their names off the title. When they tried to sue in state court, the case went nowhere."

If a project falls apart and no jobs are created, the immigrants face deportation.

And there’s little guarantee that the projects these investors fund actually create any jobs for the communities where they’re located.

Regional centers have plenty of ways to win. According to center executives, they typically charge the investors a fee for facilitating the program they charge their clients. In some cases, the immigrant investors become part owners of a business enterprise; the investors and the regional center gets paid when the business turns a profit. But it’s far more common for the regional center to lend the money for projects and collect the interest. Usually immigrant investors get paid only around 1 percent in interest and the regional center picks up the rest.

It’s certainly worked for Liebman. He owns and runs 10 regional centers with offices throughout the United States and one in Tokyo. All his investments have gone into commercial real estate. "You don’t get to be Bill Gates through EB-5, but it certainly raises your game," he said.

Yale-Leohr did say the program must be "done correctly" and that it’s no piece of cake. "It is hard to set up a project that meets all immigration and securities-related requirements."

JOBS? WHERE?

Everyone agrees that the program exists primary because it’s supposed to create jobs. "There is a lot of scrutiny of job creation because that is the foundation of the program," Irazabal said.

But that scrutiny is actually limited.

It shouldn’t be hard to determine if an investment is creating jobs in the community; either there are people working in a local business or not. But EB-5 experts told us that most of the EB-5 investment doesn’t create direct jobs. Sharon Rummery, also a spokesperson for the Citizenship and Immigration Service, said she suspects most of the jobs are indirect. But after checking with agency staff, she told us there’s no data.

The difference is critical. Say, for example, some investors build an electric car factory in a neighborhood with high unemployment. They hire 10 people to build cars, and create 10 direct jobs.

But when the workers go out to lunch and the deli counter down the street hires more help, that’s indirect job-creation — and how one specific investment creates other jobs is essentially guesswork.

Of course, the electric car factory has to buy materials and parts — say, computer chips — that might be made halfway across the country (and possibly in an area that doesn’t have high unemployment). Those jobs count, too. According Irazabal, USCIS has "no requirement for the [indirect] jobs to be in the geographic area" that is struggling economically.

The geographic flexibility USCIS allows is interesting considering that, according USCIS rules, regional centers must have "plans to focus on a geographical region within the United States and must explain how the regional center will achieve economic growth within this regional area."

The most interesting question is whether any of the indirect jobs are ever really created. And the bottom line is, USCIS never checks.

Here’s the process, according to USCIS officials. Regional centers create business plans. Then they hire consulting firms to evaluate how many indirect jobs will be created if the business plan all goes as projected. USCIS signs off on the report and the E-5 visas are approved.

The government never does its own studies or reports, never tracks actual indirect job creation, and rarely questions what the private consultants say.

Economist Peter Donahue, who runs PBI Associates in San Francisco, told us the job creation promises under EB-5 amount to a "parable." Models used to track indirect jobs "give the appearance of the science but its probably someone’s best guess," he said. "I’m not persuaded this stuff adds up."

Assumptions inherent in the models are not commonly verified, he added, and often fail to calculate the net effect of an investment, like when a new firm crowds out existing firms.

Tom Henderson, who’s setting up an EB-5 center in Oakland, told us the indirect jobs model "is all smoke and mirrors — it’s bullshit" (see sidebar).

Still, Irazabal says, "numbers don’t lie." USCIS checks that business plan and the job creation strategy is "viable, can be reproduced, and is practical. We have people whose area of specialty is looking at this."

To make things more complicated, most EB-5 money isn’t going into creating goods or services. It’s going into real estate development. And unlike a factory, a new building by itself creates barely any direct jobs.

It may have the opposite effect. High-end office development often displaces existing businesses, particularly industrial ones. And those lost jobs aren’t taken into account.

THE AMERICAN DREAM

Mao said his No. 1 reason for seeking residency in the United States is the prospect of better education for his two sons, 5 and 17.

It’s ironic. Mao’s American Dream for his children is no different from the dreams of immigrants like Shing Ma "Steve" Li, a 20-year-old nursing student in San Francisco.

Li has lived in San Francisco since he was 12. speaks Cantonese, English, French and Spanish. He was arrested Sept. 15, 2010 by ICE agents, held in a detention center for two months, and threatened with deportation because his parents lacked the proper documentation.

Li, like tens of thousands of others, has talent and education and a lot to offer the United States. But he doesn’t have $500,000.

Immigration activists like Ali Noorani, executive director of the National Immigration Forum, aren’t against EB-5 just because its immigrants are privileged. "We don’t believe there are good immigrants or bad immigrants when it comes to folks who contribute to this nation," he said.

But, he added, "We are looking for equity in our immigration system."

Immigrant-rights activists properly support almost any program that helps open the doors, particularly at a time when the right-wing is exploiting anti-immigrant sentiment. But it seems unfair that one class of immigrants, the ones with large sums of extra money to invest, are getting recruited to come to the U.S. while a much larger group — including people who have lived here for years, worked hard, built businesses and contributed to the nation — is being shown the exit door.

Francisco Ugarte, an attorney with the San Francisco Immigrant Legal and Education Network, made the point: "We disagree with legal standards that make it easier for rich people to immigrate than poor people.

"Our legal system is designed to protect the rich and powerful," he added. "People who are coming out of necessity have a much harder time immigrating than wealthy people looking to move."

"It is," he added, indicative of a broken immigration system." *

EB-5 COMES TO SAN FRANCISCO

Tom Henderson’s clients call San Francisco jiou jin shan, meaning "old gold mountain" in Mandarin and referring to the Gold Rush era impression that San Francisco must be awash in opportunity.

His soon-to-be-unveiled San Francisco Regional center is still waiting on final government approval, but Henderson has already been lining up investors to participate in the program.

He spends a third of his year in China and has done business there for decades. Armed with an international network of business relationships and a quirky charisma, Henderson has won over people like Mao Huajun, low profile but extremely wealthy potential investors with sights on America.

Although more than 20 regional centers are certified to do work in Southern California, only a handful are operating in the Bay Area — although applications for more regional centers are in the pipeline.

Featured prominently on the website of the Synergy Regional Center are two prominent local figures: former Mayor Willie Brown and former Redevelopment Commission member Benny Yee.

The website has pictures of the Synergy management "meeting former San Francisco Mayor Willie Brown, to discuss about how EB-5 investment can stimulate the local economy."

Yee is listed as one of six principals at the firm. He didn’t return our phone calls seeking comment. Neither did Brown (who, to be fair, may have simply been part of a photo op since it appears the picture was taken at a fund-raising event for his institute).

According to Synergy CEO Simon Jung, Yee joined after initially "giving [Jung] advice on how to do business. He can help us bring deals in San Francisco we don’t have access to otherwise."

James Falaschi heads the Bay Area Regional Center in Oakland. His website that features three potential projects — all real estate developments in downtown and east Oakland.

Sunfield Development is the company building at the Fox Uptown and at Seminary and Ninth streets, two of the projects the Bay Area Regional center is working on. Sunfield CEO Sid Afshar said EB-5 is "a very good idea because it is a win-win for everyone."

The new player on the scene is Henderson, and he is unveiling an EB-5 vision with a lot of promise.

Mao was bombarded with options when he first heard of EB-5. As a savvy businessman, he was wary of jumping into something sketchy. Through an interpreter, he told us he went with Henderson because he "can see the way Tom is doing this business is transparent, so [he] know[s] the step by step."

Henderson has yet to reveal what his projects will be, but he says they are all businesses, not real estate projects. He said all the companies he is setting up will inhabit industries the city has identified as central to Oakland’s economic growth.
"I was born in Oakland. I work in Oakland. I live in Oakland," he said. "I won’t do projects that don’t create direct jobs."

Burn this culture

Jesse Hawthorne Ficks

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March 1, 2011

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caitlin@sfbg.com

LIT “I didn’t want to write a love letter to Burning Man.” Those words may come as a surprise out of the mouth of Guardian City Editor Steven T. Jones, who has been covering the freaky desert art festival and its year-round scene for nearly seven years in these very pages. They’re also surprising given that news of the book has already spread across the country by the vast Burning Man network: listserves, counterculture word-of-mouth, and through an important nod by the festival itself, which included a mention of Jones’ in-depth exploration of 2004-10 burner culture, The Tribes of Burning Man (Consortium of Collective Consciousness, 312 pages, $17.95) in its Jack Rabbit Speaks newsletter, which lands in 70,000 inboxes across the country.

Although Jones critiques many aspects of playa life, the book seems to be resonating with people immersed in the DIY, creativity a-go-go, Black Rock City milieu. “Man,” a burner friend told me on a recent trip to Washington, D.C. “You just don’t see books about Burning Man around these parts!” Which is kind of the point — Jones wanted to highlight a culture he says is vastly underreported yet culturally significant (and have a good time in the process). The book may be the most researched history of the festival to date, and romps through some of the biggest parties and most innovative art experiments on the playa in first person. “I was lucky to be reporting on this event at this time,” Jones says. “It was really epic stuff.”

Love the burn? Find yourself in the book’s pages — and at Jones’ series of readings all over town, he’ll be holding to celebrate its release. Hate everything it stands for? Read it and you’ll never have to go. I sat down with Jones at the newly remodeled Zeitgeist last week to learn more about the Man.

SFBG Why did you write this book?

Steven T. Jones Burning Man has been largely misunderstood and marginalized. Even those who know something about the event assume that its moment has past, that it’s “gone corporate” or otherwise lost its essential energy and appeal. Those who aren’t familiar think of it as just a festival. But it still absolutely floors newcomers, giving them what many describe as a chance to rediscover some more authentic sense of self in this strange and challenging new world. In recent years, this culture has expanded outward all over the world, a development that has begun to be even more important than the event itself to many people. It’s spawned vast social networks of creative, engaged people pursuing really interesting projects, and I’m honored to be able to tell their stories.

SFBG What initially drew you to write about Burning Man? You’re the Guardian city editor and most of your pieces are about politics.

SJ I think it’s hard to separate political culture from the counterculture. This book is probably more about San Francisco than it is about Black Rock City. Burning Man is the most significant culture to come out of San Francisco in years, especially considering its longevity and reach. I mean, some of our progressive political views have spread, but there are groups of burners in every major American city.

SFBG Who are the burners?

SJ There’s a census taken every year, so we know exact demographics on this one. There’s a wide age range and a wide cultural range in terms of ethnicities and geographic regions, and a range of how people live. There are the super-conservatives …

SFBG Really?

SJ Yeah, there are plenty of libertarians there. That’s how it was founded — the gun nuts and the freaks. Then the hippies discovered it. There’s the old hippie-punk divide at Burning Man that we see play out in San Francisco politics all the time over the last 40 years.

SFBG Throughout much of the book, you’re struggling with Burning Man’s political significance. In 2008 you even took a break in the middle of the festival to attend the Democratic National Convention and Barack Obama’s nomination. What was your final conclusion — is Burning Man important, politically speaking?

SJ It’s a good question. I wanted it to be. Larry Harvey wanted it to be, given what was going on with the rest of the country at the time. Ultimately, it just is what it is. I think it’s at least as relevant as the Tea Party — it’s got a better thought-out ethos and value system, but it doesn’t get as much press. It is a city, and the example the city offers is very relevant to the rest of the country.

SFBG Let’s say I’ve never gone to Burning Man and I’m never going to go. What does this book have for me?

SJ Burners are my main target audience, but it was important to me to make this book interesting and accessible to those who don’t go to Burning Man. I firmly ground this book in an intriguing sociopolitical moment in 2004, when the country really lost its mind. Bush was being reelected president and things were about to turn really ugly with the Iraq War and Hurricane Katrina, events that would further divide an already fractured country. I don’t think it’s an accident that the country hit its nadir just as Burning Man hit its zenith. People were desperate for authenticity, creativity, and a life-affirming way to spend their time. The most innovative and impactful cultural developments often happen on the margins, so to ignore Burning Man is to be incurious about what is animating the counterculture in San Francisco and other cities — people who will help lead this country back from this cultural desert we’re in, if that is ever going to happen.

SFBG Are you going to continue to write about burner culture as extensively as you’ve been doing?

SJ No, I think I’ll back off on it. I’ve got a few ideas for the next project — I’m fascinated by bike culture. I think it’d be fascinating to explore the international bike movement in the fashion of this book.

STEVEN T. JONES READS FROM TRIBES OF BURNING MAN

“Burning Man and the Art of Urbanism”

Tues/8 6 p.m., free for SPUR members, $20 for nonmembers

SPUR

654 Mission, SF

(415) 781-8726

www.spur.org

“Tribes of Burning Man Reading and Powwow”

Fri/11 7:30-10 p.m., $5–$20

Westerfield House

1198 Fulton, SF

Facebook: Tribes of Burning Man Reading and Powwow