Well, it looks as if Sup. Ross Mirkarimi and state Sen. Carole Migden have managed to squeeze some real concessions out of the developers of the old UC Extension site. This is still preliminary, and the details are not confirmed, but I’m told that the percentage of affordable housing could be increased from 16 percent to more than 35 percent, a total of 80 more affordable units.
There are still issues here and the players haven’t all agreed, but this is progress.
B3 comment:
As I said in my post-election blog, I liked the fact that it was the voters, not the pundits nor the pollsters, who decided the New Hampshire primary and surprised everyone.
I also liked this commentary below by Fairness & Accuracy in Reporting, a national media watchdog group, who asked the Washington Post’s David Broder and NBC’s Tim Russert to explain their embarrassingly wrong predictions, rebuked NBC’s Chris Matthews for horserace coverage, and quoted NBC’s Tom Brokaw offering some good reporting advice, and then giving its own good advice.
FAIR to the campaign reporters: “Reporters should strive for coverage no matter what the results are.”
Brokaw: “Wait for the voters to make their judgment…”
B3 adds: “Reporters should cover the issues and the policy differences between the candidates. And work to keep the war and Bush on the front burner at all times.”
http://www.fair.org/index.php?page=3242
Media Advisory
Humbled in New Hampshire?
Press Needs to Refocus Campaign Coverage
1/11/08
Leading up to the New Hampshire primary, the storyline on the Democratic side was the disastrous state of the Clinton campaign. Her loss was a given; it seemed the only considerations were the margin of defeat and whether or not she would even continue running at all. The day of the primary, the Washington Post reported (1/8/08) that a second loss to Obama “would leave the New York senator’s candidacy gasping for breath,” and declared that Clinton’s vow to stay in the race
may be more wish than reality. By Wednesday, it may be too late. By then, Obama’s campaign may have inflicted enough damage on the woman-who-was-once-inevitable that no amount of readjusting, recalibrating and rearranging will give her the wherewithal to overcome two big losses in the first contests of the 2008 nomination battle.
Clinton, of course, won the primary–surprising the pundits and contradicting the polls that journalists unwisely use to set the tone of so much of their coverage. In the aftermath, the media were left asking what went “wrong” with the numbers. As the front page of USA Today declared (1/10/08), “For pollsters, N.H. ‘unprecedented.'” But this isn’t so; the actual USA Today story included a state pollster who noted that pre-election polls in 2000 vastly underestimated John McCain’s victory over George W. Bush. Right before the primary, the New York Times reported (1/30/00) that “a series of polls showed the two Republican front-runners in a dead heat.” Given that McCain won by 19 points, journalists and pollsters puzzling over Clinton’s showing are ignoring very recent history.
As the media mea culpas start to pile up, it’s worth considering the unspoken implication–that if the vote had gone the way the polls were predicting, then the press would have been doing a fine job of covering an election. But journalists should not be gamblers, betting that they will be vindicated by voters’ choices that are inherently unpredictable. Reporters should strive for coverage that holds up no matter what the results are.
Expectations and reality
Though they often prefer to think of themselves as mere observers of an election, the media clearly set the tone for much of the campaign, laying out expectations for various candidates and making editorial decisions about who the most “viable” contenders will be–usually long before most actual voters have been given the chance to weigh in.
But beating the expectations doesn’t necessarily guarantee good coverage. Democratic contender John Edwards defied press predictions by finishing second in Iowa, ahead of supposed front-runner Hillary Clinton. But much of the media conversation after the votes were tallied focused on the disappointing Edwards showing. By contrast, Republican John McCain had a great night in Iowa, according to many in the press– despite the fact that he finished fourth, behind Fred Thompson. The obvious difference is not how well the candidates did but how well they are liked by the press corps.
Some in the media point out that the Republican race in New Hampshire went as predicted, so it wasn’t all bad news for the press. But the campaign coverage still included its share of bizarrely confident predictions. NBC’s Tim Russert (1/4/08) declared that “only McCain or Romney can come out of New Hampshire to fight for another day in South Carolina, only one. One stays behind. It is make or break for McCain or Romney in New Hampshire.” Given that both candidates are, by all appearances, continuing to campaign, will Russert explain where his prediction came from? Or as the Washington Post’s David Broder wrote before the New Hampshire vote (1/4/08), “A second Romney loss would effectively end the former Massachusetts governor’s candidacy.”
Horse race
There’s a long trend of media hostility towards so-called “second-tier” candidates (Extra!, 9/10/03). As a recent Wall Street Journal news story put it (1/10/08), “In both parties, second-tier candidates continue to press on and siphon off votes.” But Broder and Russert were not just saying that non-frontrunners have a duty to get out of the way–they were asserting that a loss in New Hampshire would mean that Romney would no longer be a front-runner. This illustrates an important point about mainstream election coverage: Not only do journalists and pundits devote far too much attention to covering the horse race aspect of campaigns, but when they cover the horse race they generally do a poor job of it.
Primary elections and caucuses determine how a state party’s delegates are assigned; if a candidate wins enough delegates, they will almost certainly be their party’s nominee. So a reasonably helpful media would focus on this delegate count. But the mathematics of this process are obscured by the media’s obsession with “wins” and “losses” in highly visible contests.
Consider Barack Obama’s apparently monumental victory in the Iowa caucuses. The distribution of delegates, though, was hardly so dramatic: Obama won 16, Clinton 15 and Edwards 14. In a race to secure a little over 2,000 delegates, the results are of little consequence. In New Hampshire, Clinton’s dramatic comeback netted her nine delegates–the same number awarded to Obama. In the total delegate count tallied on CNN’s website–which counts a large number of party insiders awarded as “superdelegates”–Clinton has more than double the number of delegates as Obama, and Edwards is about 25 delegates behind Obama.
On the Republican side, McCain’s victory in New Hampshire gained him seven delegates; to put that in context, Romney’s second-place finish in Iowa was worth 12 delegates. And Romney’s win in the Wyoming primary–which received almost no media coverage at all–secured him eight delegates. His total delegate count still puts him ahead of all or most his competitors (depending on whether you believe CNN or ABC), though the media coverage would lead you to conclude otherwise.
Given that the process of nominating a presidential candidate is a matter of winning delegates, why does the press assign so much significance to the Iowa caucuses and New Hampshire primaries? The implicit assumption is that these small states have a big role in determining the eventual party nominees, but they actually have a quite mixed record in projecting overall winners in competitive races. (Gary Hart, Paul Tsongas and Pat Buchanan were all New Hampshire winners.) Neither does losing early primaries necessarily doom a candidacy–in 1992, Bill Clinton lost the first five contests. The media’s decision to place such importance on the small number of delegates in the first two states has little to do with any actual reasonable political determination.
What do we cover now?
Former NBC anchor Tom Brokaw offered some helpful commentary during the coverage of the New Hampshire primaries, suggesting to MSNBC anchor Chris Matthews that reporters put less emphasis on trying to predict outcomes and spend more time covering actual policy:
BROKAW: You know what I think we’re going to have to do?
MATTHEWS: Yes sir?
BROKAW: Wait for the voters to make their judgment.
MATTHEWS: Well, what do we do then in the days before the ballot? We must stay home, I guess.
BROKAW: No, no we don’t stay home. There are reasons to analyze what they’re saying. We know from how the people voted today, what moved them to vote. You can take a look at that. There are a lot of issues that have not been fully explored during all this.
Matthews’ response is illuminating. Does a political junkie who hosts two national television programs really not have any idea about how to cover politics other than talking about strategy, fundraising and polls? Do campaign journalists really have so little interest in the actual policy positions of the candidates?
As it stands now, the races for the major party nominations are remarkably close. The most valuable service journalists could provide now would be to illustrate the differences between the candidates on the major issues of importance to voters. The press corps seems chastened by their misreading of the New Hampshire electorate, and many are vowing to be more cautious in their assumptions. Will they follow through on their own advice? And will voters ever get campaign reporting that helps them make informed choices about the direction of their democracy?
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Peter Hart on 2008 primaries, Kali Akuno on New Orleans public housing (1/11/08-1/17/08)
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In 1996, Your Black Muslim Bakery lieutenant Nedir Bey had a wealth of ammunition with which to lobby city leaders for a $1.1 million loan to fund his health care company, E.M. Health Services.
The previous year, the city of Oakland had agreed to spend hundreds of millions of dollars to bring the Oakland Raiders back from Los Angeles, a deal that quickly soured and has cost the city and Alameda County taxpayers more than $20 million a year ever since.
The developers of a new downtown ice rink had defaulted on $11 million in bonds just three months after the facility opened.
The city had also given plenty of money to other businesses, most white-owned. As a result, the City Council was getting a relentless drubbing from bakery members and black business associates who lined up at meetings to speak on behalf of E.M. Health Services and its efforts to obtain the loan.
They argued that white business owners had an easier time obtaining credit, unsecured loans and support from the city while black-owned businesses endured undue scrutiny. Elected officials endured hints and outright accusations of racism if they dared ask questions about the company or collateral for the loan.
Some of those accusations occurred during the June 4, 1996, council meeting where the officials discussed giving E.M. Health an interim start up loan of $275,000 in city funds. The loan was needed because the company’s application for a $1.1 million share of federal Housing and Urban Development funds for job training programs had not yet been distributed to the city of Oakland.
During the meeting, Shannon Reeves, then-president of the NAACP Oakland chapter, accused the city’s black elected officials of forgetting where they came from.
“It’s time to deliver for the people in the community…,” Reeves said. “We need those who look like us to advocate for us.”
Beth Aaron, executive director of the Bay Area Black Contractors Association also testified at the meeting that night. She said the record proved that white-owned businesses had a much easier time getting Oakland to open its purse strings.
“Those who are white or friends of friends get things done very quickly,” she charged. “Those of us who are of color… do not.”
Even Nedir Bey got into the act.
“A few years ago we wouldn’t have been able to come here and ask for anything without getting run out,” he said. “Cut us a check on Friday for $275,000. Compare us to other projects that you have passed.”
A decade later, E.M. Health is just an unpaid debt on the city’s books, its license suspended by the California Franchise Tax Board. Principal payments first due in May 1998 never materialized, and by the time city staff knocked on its doors in October 1999, the offices had been cleared out.
But the story of how the business, a subsidiary of the now-bankrupt Your Black Muslim Bakery, received the money despite a flawed business plan and a disturbing criminal incident in Nedir Bey’s past illustrates the extent politics and pressure played in officials’ decision to approve the loan.
Bakery members have also been linked to several violent incidents, including the shooting death of journalist Chauncey Bailey, as well as alleged real estate and welfare fraud and child rape. ‘Intimidation factor’
“In reality it was political pressure that got them the loans,” said now-City Council President Ignacio De La Fuente, who was a councilmember at the time. “Deep down inside everybody knew it was bull—. No business plan, no records anyone could show. … And they kept saying they were failing because they didn’t get the city’s money soon enough.”
Retired councilmember Dick Spees, who is white, remembers how heated those meetings were, of being accused of racism because he dared question the business plan or ask about collateral or a missing business license. Bakery members would line up along the wall and refuse to sit, he recalled.
“It sounded good (on paper), this training program to help black people who were not getting opportunities,” Spees said recently. “But there was this intimidation factor, it just didn’t feel comfortable.”
Spees said he grew suspicious when Nedir Bey started racking up ineligible expenses even before federal government lenders had determined E.M. Health’s job training program met its criteria for financing.
Spees said he ended up voting for the loan and for several thousand dollars in advances from city coffers after he was assured by city staff on more than one occasion that HUD would approve the loan and that Bey had put up collateral.
De La Fuente, now council president, said he understood that the HUD money was intended for riskier loans, but that was no reason to cave in to pressure and give the money without trying to protect the city’s resources.
“I never got their support,” he said, referring to his black council colleagues, Nate Miley, Dezie Woods-Jones, Elihu Harris and Natalie Bayton.
Kidnap, torture
The city gave Nedir Bey money despite a disturbing incident that occurred on March 4, 1994, when Qiyamah Corporation, E.M. Health’s nonprofit parent company was still in its infancy.
On that date, Nedir Bey and Abaz Bey, another spiritually adopted son of bakery founder Yusuf Bey, were arrested and charged with abducting, assaulting, torturing and robbing a man they believed had cheated them on a real estate transaction.
Abaz Bey and other members of the bakery lived in an apartment building on 24th Street in North Oakland, the same one Nedir Bey wanted to buy with his very first request for city money, that ultimately was reduced in scope. The owner had hired the bakery to provide security after being sued by tenants fed up with rampant drug dealing and other crime.
According to police and court records, three men, led by Nedir Bey, beat the man with a flashlight and burned him with a hot knife. The arrests sparked a tense, full-scale standoff between more than 40 police officers and a similar number of male bakery members.
According to news reports, then-Mayor Elihu Harris agreed to meet the demand of bakery patriarch Yusuf Bey to discuss the standoff and the arrests.
Nedir Bey pleaded no contest to one felony count of false imprisonment. He was sentenced to three years’ probation after a veteran Oakland police officer and members of the community wrote a support letter on his behalf.
The probation report noted that two other prominent Oakland residents acted as character references for Nedir Bey: Alameda County Supervisor Keith Carson and Larry Reid, then aide to Mayor Harris. However, Reid, now an Oakland city councilmember, said he never wrote a letter or served as a reference for Nedir Bey.
When Tribune reporters Diana Williams and Paul Grabowicz questioned whether the the arrest should impact his loan application, Nedir Bey said such details were irrelevant.
“Nelson Mandela spent 27 years in prison, and he was respectable enough to become president of South Africa,” he was quoted as saying in a June 1996 Oakland Tribune article.
Unapologetic support
Alameda County Supervisor Nate Miley, who was an Oakland council member and pushed hard for the E.M. Health loan, said recently that he never knew about Nedir Bey’s felony conviction or other clashes between bakery members and the police.
“Then-police chief Richard Word and I chaired the Public Safety committee and I didn’t know about it,” Miley insisted. “Clearly, I had a sense that the police had some concerns (about bakery members), but not how it’s been depicted recently.”
Miley is unapologetic about his unflinching support of E.M. Health during his time on the council. He wasn’t overly concerned when the company defaulted, he told his colleagues at the time, because the federal money was intended to fund higher-risk ventures.
He recalled in a recent interview that African-Americans had good reason to believe black businesses weren’t getting a fair share of city contracts or loans. Oakland’s leaders had poured millions in public money into bringing the Raiders home from Los Angeles and bailing out the Ice Center, Miley said, and African-Americans never let them forget it.
It’s also possible that city staff and some council members were intimidated by the accusations of racism, he added.
“I think we were very sensitive (about accusations) of being racist and Uncle Toms,” said Miley, who is African American.
“When E.M. came in to get a loan … on the face of it that looked like very worthy cause, something that would serve the public. So we decided to give them a chance,” Miley said, adding that there was some concern over the money being used for a car and consultants.
“We gave them some technical assistance and guidance rather than pulling the rug out from under them completely,” Miley recalled. “Still, even if it’s federal money they got, it’s still public taxpayer dollars down the toilet.”
Miley said he admired Yusuf Bey and the way he preached self-reliance, spirituality and discipline. Oakland was suffering record homicides and here was someone who was reaching out to ex-cons or those who might otherwise get caught up in the cycle of violence and helping them turn their lives around and earn money legitimately for their families, Miley said.
In February 1996, a smiling, soft-spoken Nedir Bey stood before the City Council and told them as much.
“This is an excellent program and it will target men and women who are not working presently and have no job skills,” Bey said. “We can train them in the home health care field and start them on a better way of life.”
‘Brilliant’ concept
Redevelopment Agency Director Gregory Hunter said the company’s goals were hard to turn down even if E.M. Health’s promises lacked details.
“The concept was brilliant, absolutely brilliant,” he said, adding that the business proposal drew applause from as far away as Washington, D.C. “Unfortunately, the execution fell somewhat short of the expectations the city had.”
Elihu Harris, now the chancellor of Peralta Community College District, was reluctant to discuss the matter recently because he said he did not recall many details. Harris said his dad received home health care from employees of E.M. Health, but it was his mother who handled the contract.
He added that a community loan advisory committee _ a body the federal lenders required _ had voted to fund E.M. Health, and the council debated that recommendation back and forth for many months. He said the council was not provided with a lot of details about the company.
“The (loan committee)… had really done the research,” Harris said. “The council was between a rock and a hard place.
“(E.M. Health) had made some mistakes and they were going to try and rectify those mistakes,” Harris said. “There was a lot to be concerned about, but they had strong community support.”
One supporter who turned out early and often to lobby for Nedir Bey was Theodora Marzouk, an administrator for Oakland-based Community Care Services, Inc.
She testified more than once about the shortage of training programs for nurses’ aides and said her own company couldn’t supply enough of them. She urged Oakland’s leaders to fund E.M. Health.
But Marzouk ended up on E.M. Health’s payroll for the last two quarters of 1996 earning more than $20,000, city records show.
Marzouk refused to comment for this story, but she sounded surprised to hear that she’d once been listed as an employee.
In any case, by 2000, the company’s business license was suspended, and by 2003, Alameda County records show, state and federal tax officials during the intervening years had imposed tax liens on the company’s assets totalling nearly $200,000.
But today, E.M. Health’s motto “Big enough to serve, small enough to care” is little more than a failed promise.
MediaNews investigative reporters Thomas Peele and Josh Richman, KQED reporter Judy Campbell, and radio reporter Bob Butler contributed to this report. Cecily Burt is a MediaNews staff writer. G.W. Schulz is a staff writer at the San Francisco Bay Guardian.
E.M. Health Services, a home health care company founded by a high-ranking member of Your Black Muslim Bakery, opened for business in July 1996, flush with a $1.1 million loan from the city of Oakland.
But shortly over a year later, signs of trouble already plagued the business — and a review of documents shows that the founders of the struggling company paid themselves lavish salaries, and lucrative consulting contracts went to bakery associates and family members.
More than a decade later, the city hasn’t received one penny in repayment for the loan, and questions remain over why city officials granted the loan in the first place.
Under the terms of E.M.’s loan, the company wasn’t scheduled to make principal payments for two years — until 1998 — but just 15 months after getting the money, CEO Nedir Bey asked to defer repayments until 2000.
The city, which had already questioned several invoices submitted by the company, did not approve the extension. Instead, officials responded by requesting an audit of E.M.’s books.
In his request for an extension, Bey did not mention that in May 1997, E.M. Health had applied to the California Department of Insurance for a $2 million loan to purchase a 4,000-square-foot office building on 17th Street in downtown Oakland.
In his application to the state, Bey cited Oakland’s loan approval as proof of his good reputation, even though by then the city was already questioning tens of thousands of dollars in operating expenses claimed by his company.
The $1.1 million loan agreement called for E.M. Health to begin repaying monthly interest and principal payments of $19,692 on May 1, 1998, the date the company was projected to have enough billable clients to break even.
But May came and went with no payments.
And, documents show, E.M. Health would ask for more.
But the story of how the business, a subsidiary of the now-bankrupt Your Black Muslim Bakery, received the money despite a flawed business plan and a disturbing criminal incident in Nedir Bey’s past illustrates the extent politics and pressure played in officials’ decision to approve the loan.
Bakery members also have been linked to several violent incidents, including the Aug. 2 shooting death of journalist Chauncey Bailey, as well as alleged real estate and welfare fraud and child rape.
Details of the company’s financial growth were outlined in correspondence between Nedir Bey and various city staff who reviewed documentation to support the original $1.1 million loan application, as well as documents surrounding Nedir Bey’s later attempts to obtain a $2.5 million loan that was never granted.
In a January 1997 letter to the city, E.M. Health said it had contracts with 13 patients between October and December 1996, which should have generated more than $23,000 in revenues for the three-month period.
The same letter said seven would-be home health aides had graduated from a training program run by a different company. Those aides could not be sent out to care for Medicare/MediCal patients until they passed their certification exams that month, the letter said.
The letter also reveals that E.M. Health had a goal of generating $1.2 million in income in 1997 by providing services to 50 clients. The company instead reported large losses in 1996 and 1997.
It started to pull in more revenue early the following year, according to a letter from former Economic Development Chief Bill Claggett addressed to then-City Manager Robert Bobb.
Clagget’s letter stated that the company had a net profit of $30,068 for the first two months of 1998, but was still experiencing delays in receiving reimbursements for its Medicare/MediCal clients.
By June 17, 1998, Nedir Bey stated in a letter to city loan department manager Teri Robinson-Green that E.M. was “doing about $80,000 a month.” In another letter listing E.M.’s achievements, Bey claimed the company had hired 55 people, trained 30 people and served more than 200 patients.
But still no loan payments.
E.M. Health’s agreement with the city stated that the company and its employees, many of whom were also trusted bakery associates and family members, would not profit from the business. Any extra income after expenses would be funneled back into Qiyamah, a nonprofit organization founded by the bakery to further Yusuf Bey’s community work. Qiyamah was E.M. Health’s parent company.
But the salaries, car lease and billing rates charged by bakery members who moonlighted as consultants to E.M. Health coupled with too few billable clients and delays in reimbursements by Medicare and MediCal all but ensured there wouldn’t be enough money left over to pay back the city’s loans.
“It’s interesting how that millionaire from the skating rink got $12 million and declared bankruptcy and never paid the city back,” Nedir Bey said, referring to the builders of Oakland’s downtown ice rink, who defaulted on an $11 million loan before E.M. Health Services was funded. The city took possession of the rink. “Is the city calling him and trying to ask him those kind of questions?
“The bottom line for me, I’m trying to move forward with my life. Everything that you’re discussing is in my past,” Bey said.
A popular message
E.M. Health’s business model resonated with Oakland’s black politicians who were eager to even the playing field for black businesses that had not gotten an equitable share of city contracts and loans. They lauded the accomplishments of Yusuf Bey — the controversial but charismatic founder of Your Black Muslim Bakery — and viewed the health care proposal as a continuation of his good works.
The plan also resonated with the U.S. Department of Housing and Urban Development and appeared to meet its criteria for loan funding. E.M. Health’s $1.1 million loan came from a $44 million pot of money the federal agency offered Oakland to fund start-up organizations that sought to provide jobs in low-income communities.
Still, in a June 4, 1996, letter to Kofi Bonner, Oakland’s then-director of community development, local HUD director Steven Sachs wrote that “E.M. Health Services business plan is still being developed …” with many “issues still to be worked out.”
Sachs urged the city to consider “providing a much smaller amount of financial assistance to this start-up business.”
That same night, despite Bonner’s warning that Nedir Bey had not yet provided several documents the city required for the loan, nor procured a provisional license from state health officials, the council voted to give the company a $275,000 advance on the $1.1 million HUD loan.
In fact, even though E.M. Health was $63,000 in arrears in its business taxes, the company ended up getting $538,000 in interim loans from the city of Oakland over the next six months, before HUD officials reimbursed Oakland for the money in April 1997.
Nedir Bey relied on that type of sentiment when he approached the city in February 1998 and asked for an additional $2.5 million — half loan, half grant — to buy a shopping center in West Oakland to house a new urgent care clinic, in addition to funds he sought unsuccessfully from the state department of insurance.
The shopping center plan lacked numerous financial details and included no downpayment or personal investment by Nedir Bey.
Nonetheless, he lined up his supporters and produced letters of recommendation from well-respected medical experts, including David Kears, director of the Health Care Services Agency for Alameda County; Michael Lenoir, president of the Ethnic Health Institute at Alta Bates/Summit Hospitals; and H. Geoffrey Watson, president of the Golden State Medical Association, which represents 2,000 African-American physicians in California.
Claggett said he would have loved to have someone revitalize that blighted shopping center, but nothing about E.M.’s finances by then suggested it could support a new business venture. City records show that E.M. Health incurred losses of $425,000 during 1996 and $343,000 in 1997.
E.M. Health was already three months behind on the payments for the $1.1 million loan, and a mere six months later, E.M. Health’s parent, the Qiyamah Corporation, would default on a
$100,000 bank loan originally signed by Saleem Ali Bey, also known as Darren Wright.
‘I don’t think they ever gave up’
Nedir Bey nonetheless again pressured the city into rushing the review of his new loan request. By July 1998, he sought direct backing from then-Mayor Elihu Harris, whose father was an E.M. Health patient for a short time, according to company records on file with the city.
“Staff should be more inform (sic) on the procedures and policies of the city of Oakland as opposed to me having to check with the mayor and then letting you know what you can and cannot do,” Bey said in a July 1998 letter to Gregory Hunter, now Oakland’s redevelopment agency director, apparently unhappy that the request had not yet been forwarded to the loan review committee.
Kears recalls Nedir Bey first approached him for a letter of recommendation, but that evolved into a request for money to finance outreach efforts for new patients. The county wound up giving Bey a $25,000 contract, the most it could provide without approval from the Alameda County Board of Supervisors. Kears said he doesn’t know whether E.M. Health ever submitted invoices to use any of the money.
The $2.5 million loan application eventually stalled as Nedir Bey failed to produce documentation requested by the city related to the first infusion of cash, the repayment of which was falling further and further behind.
By the time the city sent its first default letter to E.M. Health in December 1998, the payments were eight months past due and the company had crumbled.
City employees would later discover that the company’s offices had been cleaned out, office furnishings and computer equipment pledged as collateral gone.
Claggett said that not long afterward, he was questioned by the FBI about E.M. Health and Nedir Bey. The FBI’s San Francisco office did not return a call seeking comment about the probe.
No way to collect
The Oakland city attorney sued E.M. Health
in December 2000 in an attempt to recover $1.45million in loan funds and $98,600 in unpaid interest. The city won a default judgment, but no one could collect on it, in part because there was no personal guarantee made when the loan was awarded.
City Attorney John Russo said recently that it is up to the city’s Finance Department to collect on the $1.5 million judgment, which remains unpaid today.
The city wasn’t the only one left holding worthless paper when E.M. Health deteriorated. Orthopedic and Neurological Rehabilitation, Speech Pathology Inc. of Los Gatos sued Nedir Bey and Cecil R. Moody, an E.M. Health agent listed among business registration records, in 2000 to recover $8,700 worth of services it provided to the company’s patients over a two-month period. According to the lawsuit, E.M. Health billed MediCal and Medicare but never reimbursed the company.
In May, Daulet Bey, a Muslim wife of Yusuf Bey and mother of current bakery CEO Yusuf Bey IV, 21, and her daughter Jannah Bey filed papers to revive Qiyamah’s state business license. It’s not clear whether bakery associates plan to use Qiyamah to attempt a new business venture.
The license was promptly suspended again by the state Franchise Tax Board for failing to file an information report in 2005, according to spokeswoman Denise Azimi.
Nedir Bey’s costly experiment was finished and thousands in unaccounted for public funds were left in his wake.
MediaNews investigative reporters Thomas Peele and Josh Richman, KQED reporter Judy Campbell, and radio reporter Bob Butler contributed to this report. Cecily Burt is a MediaNews staff writer. G.W. Schulz is a staff writer at the San Francisco Bay Guardian.
Editor’s note: This is the first of a three-part series examining a $1million city loan to a Your Black Muslim Bakery affiliate that was never repaid.
It was a noble cause: Train welfare recipients as home health aides and put them to work caring for homebound sick and elderly clients.
A decade ago, while Your Black Muslim Bakery founder Yusuf Bey enjoyed unwavering support and adulation from black businesses and politicians, his spiritually adopted son, Nedir Bey, pressured and shamed city leaders into giving him a $1.1 million loan to help finance the promise of black entrepreneurial independence.
But the venture, E.M. Health Services, swiftly collapsed. The failure of CEO Nedir Bey to repay a dime of the loan made headlines at the time and prompted most to assume the company’s demise was caused by a combination of poor business decisions, bureaucratic hurdles and simple bad luck.
But was it?
City officials overlooked flaws in the company’s business plans and relented to black community leaders who insisted they award the loan, according to interviews, documents and other correspondence reviewed by the Chauncey Bailey Project.
The loan was granted to Nedir Bey despite his well-publicized arrest for the torture and kidnapping of a man two years earlier. Bey pleaded no contest to one felony count of false imprisonment and was sentenced to three years’ probation.
In awarding the loan to Nedir Bey, nearly every elected official lauded the accomplishments of Yusuf Bey in turning around the lives of troubled young men. Yet dozens of those men had armed themselves during a standoff with police two years earlier. And a few years later, Yusuf Bey himself would be accused of raping and fathering children with young girls who were placed in his care.
And the Chauncey Bailey Project has learned that in late 1999 and early 2000, the FBI investigated E.M. Health Services’ loan and Nedir Bey, although it’s not clear how the probe was resolved.
In the wake of reported real estate and welfare fraud allegedly committed by the wives and children of Yusuf Bey _ as well as the August arrest of a bakery member accused of the Aug. 2 shooting death of Bailey, the editor of the Oakland Post _ a deeper review of the E.M. Health Services loan reveals several questionable expenses that suggest an internal pattern of cronyism that enriched nearly every facet of the bakery empire’s inner circle including:
-Tens of thousands of dollars in consulting fees paid to companies controlled by Nedir Bey and his wife, Rosemarie Boothe-Bey, as well as other bakery insiders.
-Thousands of dollars in security fees paid to yet another company controlled by Your Black Muslim Bakery and thousands more in advertising fees paid to Universal Distributors, a company operated by associates of the bakery.
-$20,000 paid to the administrator of an Oakland home health company who had urged the city to award the loan to E.M. Health Services.
-Top-end salaries paid to Nedir Bey and his wife, Rosemarie Boothe, as well as to two of the Muslim wives of bakery patriarch Yusuf Bey who are accused of receiving fraudulent welfare payments at the time, and a second woman with whom Nedir Bey fathered children. Other bakery insiders filled the company’s payroll.
-15-day loans made to E.M. Health by Nedir Bey and other bakery associates that were repaid with hefty loan fees.
The beginnings
On April 30, 1996, the Oakland City Council awarded E.M. Health conditional approval for a $1.1million federal loan to establish a training program for home health aides.
According to loan documents and internal memos, the city approved that loan despite flaws in the company’s business plan and no discernible collateral or equity to back up the debt.
The money was part of a $44 million pot — half loan, half grant — awarded to the city by the federal Department of Housing and Urban Development to fund start-up ventures or help expand existing businesses in three distressed areas of Oakland with high unemployment rates. The federal money was supposed to create jobs, and it was intended for borrowers who could not qualify for conventional loans.
E.M. Health’s share of that pot — through the leadership of then-bakery lieutenant Nedir Bey — would further Yusuf Bey’s efforts to empower poor black residents and ex-cons by giving them training and job opportunities at various bakery outlets and private security companies affiliated with the patriarch’s expanding empire.
The loan proceeds were supposed to be used for start-up costs to recruit workers and patients, establish the home health training program and provide ongoing operating expenses.
The company never lived up to its promise. Ten years have passed and still not a cent has been repaid. The equipment pledged to secure the proceeds never surfaced. The promised jobs for low-income residents, as well as the promised services for sick and elderly clients, evaporated. The Oakland city attorney sued to recoup the debt, plus interest, but the city’s finance department has not been able to collect.
Nedir Bey, whose last listed occupation is business development consultant, would not answer questions about the business operations or why the company failed to take hold, saying that was “in the past.” In a brief telephone conversation, Bey said there were other Oakland businesses that defaulted on city loans and he asked if they were receiving the same level of scrutiny. Bey remains in Oakland but says he is no longer affiliated with the bakery.
Former bakery associate and businessman Ali Saleem Bey has spent the last several months trying to save the heavily indebted bakery enterprise from liquidation. Saleem Bey said he hasn’t spoken to Nedir Bey in years, but he defended E.M. Health’s efforts to provide job training and services to poor Oakland residents.
Saleem Bey, reached by phone, said the city subjected the business to undue scrutiny compared with others seeking public money. That scrutiny also led to the company being underfunded, Saleem Bey said, and contributed to its demise.
“We really felt we were sabotaged by the city, …” said Saleem Bey, who worked alongside other bakery associates to help launch the business.
“Politically, they never wanted to give us the money … and when it came time to work with us and make it go, they made it as hard as possible,” Saleem Bey said. “They wanted to wag their fingers at us.”
But the only thing that remains today from the ashes of E.M. Health is a considerable outstanding debt to taxpayers — a debt that could have been much larger.
Big plans, big loan requests
The Qiyamah Corp., E.M. Health’s nonprofit parent company, first filed state business registration papers in October 1993. The nonprofit organization was formed to expand the bakery’s community work and job training programs, and it wasn’t long before bakery members sought the city’s help in financing a new home health care venture.
Nedir Bey originally approached the city in approximately 1994 for a $3.4million loan to buy an apartment building on 24th Street in North Oakland. That would be used, he said at the time, as a base for his home health care program.
The building purchase didn’t qualify for HUD funds, and over time it was dropped from the plan. The loan request was whittled down to the $1.1 million, which was conditionally awarded to Qiyamah’s for-profit subsidiary, E.M. Health.
The company promised to create 32 full-time jobs, more than half of which would be filled by residents of West Oakland, East Oakland or San Antonio/Fruitvale — the three economically depressed areas targeted by HUD.
The company also promised to train 120 low-income residents and welfare recipients as home health workers, who would in turn provide services to Medicare and MediCal patients and other clients who were privately insured. According to E.M. Health’s business plan accepted by the city, insurance reimbursements would be more than sufficient to repay the loan. It might have worked if Nedir Bey had started small.
Instead, he purchased expensive office furniture and loaded the payroll with bakery insiders, most of whom had no health care experience, while spending little initially on actual medical supplies, according to loan documents.
Bill Claggett, the former director of Oakland’s Community and Economic Development Agency who inherited the E.M. loan in late 1997, said he couldn’t believe the city gave the company “a dime,” let alone $1.1 million.
“They didn’t know what they were doing,” Claggett said. “The cost per person served was much higher than any other similar business. It was clear (Bey) didn’t have the kind of staffing he needed for that operation.”
E.M. Health opened its doors on July 10, 1996, in an office storefront on Grand Avenue. That first year’s tax return posted income of $6,007 and a loss of $437,802. It spent $85,886 on consultants, $10,600 on security and only $5,708 for medical supplies. It survived almost exclusively on the city loan.
The list of employees included Nedir Bey’s wife, Rosemarie Boothe; and another woman, Kathy Leviege, with whom he has two children; family associate Janet Bey; and Madeeah Bey and Farieda Bey, two wives of bakery patriarch Yusuf Bey who are alleged to have received illegal welfare payments at the time, according to civil depositions taken recently in an unrelated case.
Within three months of receiving start-up funds from the city, Nedir Bey was on track to earn $108,000 a year, a figure that was out of line with what similar agencies in the Bay Area paid their CEOs, according to a spring 1997 memo in the city’s loan files.
Quarterly wage reports filed with the state show that Nedir Bey’s wife earned $47,000 as the assistant administrator, and Yusuf Bey’s wives — whose occupations were listed as marketing director and LVN/outreach coordinator — earned nearly $60,000 each, the same as Janet Bey, a registered public health nurse. Other than Janet Bey, none of the women had nursing degrees or related licenses, according to a review of state documents. Saleem Bey said it should not seem suspicious that members of the bakery’s extended family ended up on E.M. Health’s payroll. He said they worked many different jobs to help support the bakery empire and to further Yusuf Bey’s edict to be self-reliant.
He said they also worked alongside Nedir Bey to try and make the enterprise a success. To infer otherwise would be a mistake.
“It behooved the organization to be successful, so it wasn’t as if everybody was just eyeing this money and they wanted to steal a million,” Saleem Bey said. “If the business plan was successful, by this time it would have created 10 times that amount of money and created many jobs.”
Even so, the city’s loan staff requested that the compensation for E.M.’s three top executives be reduced by 20 percent, a move Nedir Bey protested in a memo to city officials.
Other questionable expenses
There were other missteps and invoices that city officials questioned before the city received the HUD proceeds, including a lease on a Cadillac and reimbursements to a security company controlled by the bakery.
One city staffer flagged the vehicle lease, $64,000 in consulting contracts, and thousands budgeted for security as ineligible uses of the federal funds. “Staff is exploring options for recovering these costs,” reads one memo from April 1, 1997.
That same year, in addition to their salaries, E.M. Health paid approximately $40,000 in consulting fees and service payments to Nedir Bey and relatives either directly or through companies that he and other associates of the bakery controlled, according to records on file with the city of Oakland.
Bakery associates also made 15-day loans to E.M. Health to cover operating expenses and charged substantial interest fees in return. Nedir Bey earned a $750 fee for a $9,000 loan he made to the company, and Ali Saleem Bey charged $1,000 interest for a $13,750 loan. Time after time, city staff questioned the invoices E.M. Health submitted for reimbursement, asking for more details or supporting documentation. But the money was never withheld for long.
MediaNews investigative reporters Thomas Peele and Josh Richman, KQED reporter Judy Campbell and freelance radio reporter Bob Butler contributed to this report. Cecily Burt is a MediaNews staff writer. G.W. Schulz is a staff writer at the San Francisco Bay Guardian.
Gavin Newsom, flanked by his sister, Hillary Newsom Callan, her two young daughters and his fiancee, Jennifer Siebel, prepares to be sworn in for a second term as Mayor of San Francisco by his father, retired Judge William Newsom.
Promises, promises. Newsom takes the oath, using an old family Bible, held by Siebel.
Mayor Gavin Newsom’s 2008 inaugural address under City Hall’s caverous domed rotunda looked like a rehearsal for his upcoming wedding to actress Jennifer Siebel, what with the choir trilling, the reverend pronouncing his blessings, the family Bible, the bucket loads of roses, and Newsom’s sister’s cute little kids running all around.
Siebel clutches Newsom’s niece, Talitha Callan, while the Mayor listens to event emcee Carlos Garcia, before launching into his hour-long inaugural address
Less adorable was the fact that Newsom’s speech contained a not so thinly veiled attack on the November 2008 charter amendment, which seeks to set aside $2.7 billion in city funds for affordable housing over 15 years.
The amendment would give affordable housing the same baseline of funding that the city already allocates to the Recreation and Park Department Fund and the Library Preservation Fund—and less than it already sets aside for the Children, Youth and Families Fund.
Sounds reasonable to those of us who have no hope of owing a home in San Francisco and are either having difficulty cobbling together the rent each month for our lowly studio/room/apartment/shack in the City, or are already displaced to the East Bay.
It’s a point that a super majority of the Board of Supervisors, along with State Senators Carole Migden and Leland Yee, and Assemblymembers Mark Leno and Fiona Ma, all seem to get, given their support for the affordable housing set aside.
But not, apparently, Newsom, who smeared this amendment as “a political gambit,” while pushing a Lennar-backed measure that promises to build 10,000 housing units at Candlestick Point, but does not specify what percentage of these units would be below market rate, for rent, or affordable, to people who currently live in the Bayview.
“In the next four years we are going to keep offering real solutions on affordable housing, not fall prey to political gambits that offer attractive promises but not sound policy,” Newsom said, during his address.
But is the newly resworn-in Mayor’s resistance to the Board’s affordable housing charter amendment rooted in the fact that it would require the Mayor’s Office of Housing to prepare an affordable housing plan every three years, present an annual affordable housing budget and do so before the rest of the Mayor’s annual budget proposals are finalized?
All these steps are crucial, in terms of transparency, accountability–and ensuring that the affordable housing needs of low-income and working class folks get top priority, instead of becoming an annual political football. They are also logical steps, for those seeking sustainable solutions to homelessness and climate change, as Newsom claims to be doing.
But instead, Newsom continues to lend his support to the Lennar-backed measure on the June 2008 ballot, even though Lennar broke its promise to build rentals at its Hunters Point Shipyard Parcel A site, where it is constructing 1,500 condominiums, and failed to live up to its promise to proactively protect local residents from asbestos dust.
Let’s Newsom sees the light, uses his political capital to support the affordable housing charter amendment, and thus lives up to his promise to protect all of the City’s residents, for the next four years.
OPINION In San Francisco’s June 1997 special election, the swells convinced the voters to float $48 million in bonds to build a "world-class" zoo, which would entail largely privatizing a public institution, leaving the city on the hook for liabilities while giving a private nonprofit the benefits.
The initiative passed — you can’t get warmer or fuzzier than a tiger or a koala — and the San Francisco Zoo, relinquished to the tutelage of corporate fixer Jim Lazarus, was largely gifted as another privatized party space for the rich.
The case might be made that zoos can serve as genetic incubators in the face of widespread habitat destruction. But the city’s precautionary principle, like the Hippocratic oath, should prevail on us to do no harm in seeking to prevent extinction.
The record of the privatized Zoo has hardly been a story of precaution:
•In 2000, two already sick koalas were kidnapped from the Zoo and not returned for two days.
•A 12-year-old Siberian tiger, Emily, died in October 2004. Tatiana was just murdered at age four. Siberian tigers generally live to be 24 years old in captivity.
•Two elands, majestic African antelope, were introduced improperly into close quarters with an already resident eland at the Zoo, which led to a spate of deadly eland-on-eland violence and the deaths of the two newcomers.
•Apparently, shoddy attention to detail hastened the demise of Puddles the hippopotamus in May 2007. Hippos, like African elephants, thrive in nature preserves located in their native tropical habitat.
If zoos are to be a successful component of protecting endangered species, it’s paramount that their conditions not kill the specimens. Perhaps an affiliation with a major research institution is required to ensure that professionalism is the order of the day to ward against what appears to be amateur hour at the zoo.
It’s one thing for the swells to occupy public spaces such as the de Young Museum, City Hall, and the San Francisco Public Library as edifications to their egos — only fellow humans are inconvenienced. But for the rich to wrap themselves in the distinction of being movers and shakers in the San Francisco Zoological Society and wring glee from the glow of imprisoning animals in inhospitable conditions is truly pathological.
The Zoo should be closed, its animals sent to facilities capable of caring for them, and the land used for affordable housing. The city should replace the Zoo with an academic partnership with legitimate wildlife sanctuaries around the world to subsidize conservation, produce video footage of animals in their natural habitats, and arrange trips to see wild animals in the wild for San Francisco youths who otherwise could not afford it.
That would be a true 21st-century, world-class approach to bringing the wonder of exotic animals to San Franciscans.
Marc Salomon
Marc Salomon is a member of the SF Green Party County Council.
EDITORIAL In spring 2007, Assemblymember Mark Leno talked to Ruthy Bennett, the point person on the A.F. Evans proposal to build a major housing development on the old University of California at Berkeley Extension campus in San Francisco. Bennett was running into some problems: the site’s neighbors didn’t think the project included enough community mitigations. And Evans was looking for ways to fund a much larger community center and possibly some affordable housing.
Leno was interested in the project in part because it included plans for 80 units of housing for queer seniors. Open House, a local nonprofit, had been trying to find a site for an LGBT retirement complex for some time, and Evans had agreed to make that part of its project. The assembly member had a friendly relationship with the chancellor of the UC, which owned the land, and he told Bennett he might be able to intercede and help reduce the lease amount the UC wanted to charge the developer. Leno brought Sup. Bevan Dufty, whose district includes part of the site, to the meeting.
Leno told us he made some progress: the UC had wanted $20 million, but he talked the chancellor down to $18 million. "With that $2 million, we were able to substantially increase the size of the community center," he said.
But at the same time, UC representatives apparently walked away from the table thinking they had a final, done deal — that representatives of the city and the state had signed off on a price, which was now set in stone. "Unfortunately, UC’s position is predicated on a deal that doesn’t work well for moving this project forward," Sup. Ross Mirkarimi told us. Now that Mirkarimi is demanding greater affordability in the housing — which is largely high-end rentals — Evans is saying it needs a break from the UC, and the UC won’t budge an inch.
And somebody needs to budge, or this deal needs to be scrapped altogether — because it’s not good for the city.
Remember: this is public land that’s been used for public educational purposes for a century. Now the UC and Evans want to turn it into a private, for-profit housing complex. And only a minimal amount of that new housing will be available at a price that’s affordable to the vast majority of San Franciscans.
Of the 420 units, only 16 percent (roughly the legal minimum) will be affordable. None of the 80 LGBT units will be rented at anything but market rates unless Open House can raise the money to subsidize them. That’s not acceptable: building high-end apartments for the rich does nothing to help the city’s housing crisis, and while we agree there’s a need for supportive community housing for LGBT seniors, middle-class and poor queers need a place to retire too — and this will do nothing for them.
The project was on the fast track until state senator Carole Migden squeezed the UC and forced a delay until late January. The city has plenty of leverage here: not only does the site require rezoning, but the supervisors would also have to sign off on a plan to hand over a piece of Waller Street to the developer.
At this point city officials need to take a hard line: either Evans and the UC up the affordability level to, say, 40 or 50 percent and guarantee that some of the senior units will be subsidized, or the project dies. Period.
We agree with the neighbors of 55 Laguna who say the site has been empty for too long, is an eyesore, and attracts crime. It’s 5.8 acres of land in a central part of the city, and it shouldn’t remain a crumbling ghost of a former college. But the UC and a private developer can’t set all the terms here either — and the city can do a whole lot better than the deal on the table right now.
EDITORIAL San Francisco assessor Phil Ting wants to encourage more city residents and businesses to put solar panels on their roofs. It’s a noble idea, but the legislation he and Mayor Gavin Newsom have proposed needs work.
Ting told us he’s concerned that buying and installing solar panels is too expensive and that the cost is discouraging people from taking these steps toward putting the city on a path to greater reliance on renewable energy. So he’s put forward a two-pronged plan to lower the price: Using funds generated by the sale of Hetch Hetchy power, the city would offer cash payments of between $3,000 and $10,000 to residents and businesses that go solar. Then city bond money would be used to finance the remaining installation costs, and customers could pay back the city over 20 years.
The bond money Ting is eyeing comes from a measure passed more than 15 years ago, after the Loma Prieta earthquake, that makes money available for seismic upgrades to commercial property. For various reasons, including the complexity of the requirements, almost none of the $350 million in that bond fund has been spent, so with the approval of the voters it could be redirected to solar programs.
There are several problems with this approach.
We’re always a little leery of spending public money to benefit private property owners (and let’s remember that almost everyone who owns a home in San Francisco has seen its value increase dramatically in the past few years, despite the market slowdown). And while Ting and Newsom are right that the Hetch Hetchy money doesn’t come directly out of the General Fund, it’s still public money that could be spent on other programs — and the mayor is fighting against a plan to spend more city money on affordable housing.
But global warming and energy independence are important enough that we could live with the cash incentives — if the program were tailored to support community choice aggregation and public power. Instead, in its current draft, the plan would amount to a large incentive for electricity customers to snub the upcoming city program and stick with Pacific Gas and Electric Co. The language of the measure requires that applicants for the incentive program be eligible for a similar state program — but that state program is administered by PG&E and two other private utilities and is available only to their customers.
Starting sometime this year, if all goes well, San Francisco will be in the retail electricity business, competing directly with PG&E. Ting told us he’ll make sure the language is fixed to make the program available to all, but we’d go further: a city incentive program should help the city’s efforts. The first benefits should go to city customers, and they should be tailored as incentives for residents and businesses to stick with municipal CCA power and reject PG&E.
The bond money is problematic too. As it stands, landlords could pass along half of the costs of that money to tenants, many of whom don’t pay their own electric bills anyway and thus would get no benefits. That’s got to go: if the city is going to offer cheap loans to let landlords upgrade their buildings (and thus increase the value of their property), the supervisors shouldn’t pass any measure that sticks tenants with any of the costs.
The city of Berkeley is working on a similar program that seems much more simple: property owners can borrow money for solar panels and pay it back through increased property taxes. Sup. Gerardo Sandoval has suggested San Francisco pursue a similar plan, and Ting and the mayor should take that into consideration.
There’s the kernel of a good idea here — but the supervisors need to make some significant changes to what the mayor and the assessor are proposing before this plan moves forward.
EDITORIAL The deal that’s slated to turn a former University of California campus into a private housing development in San Francisco is another demonstration of a long pattern of problems between the UC and local governments. Put simply, the university is a bad neighbor and a bad actor — and it’s time the State Legislature did something about it.
The history of local communities fighting the UC is legend in this state, dating back at least to the People’s Park battles in Berkeley in the 1960s, and today that city is fighting the school’s plan to build a new sports stadium. In San Francisco the UC has tried to run over local planning laws to build a garage at Hastings College of the Law, is angering neighbors with its expansion plans at Mission Bay — and is now in the spotlight at 55 Laguna Street, the site of an old UC Extension campus.
The university wants to let A.F. Evans Co. build 440 units of housing — much of it high-end, with an average rent of $4,000 per month — on the 5.8-acre site. Only 15 percent of the units would be available below market rate.
Sup. Ross Mirkarimi has been trying to increase the number of affordable units but has run into a giant obstacle: the UC is demanding $18 million for the land, and it won’t budge an inch. In fact, the university has told him it’s prepared to drop the whole deal and walk away (leaving the campus empty and crime-infested and angering its neighbors) if the city tries to get a penny of that lease money.
We recognize that, like every other state agency, the UC desperately needs cash — but we’re sick of university officials acting arrogant, refusing to deal in good faith, and threatening to use the power of a state agency to bypass local land-use laws. While San Francisco struggles to make the 55 Laguna project work, the State Legislature ought to find a way to force the UC to work with local governments — and remove its ability to circumvent local laws.
› tredmond@sfbg.com
I think 2008 is going to be the year when we decide as a city if we’re serious about San Francisco.
We’re going to decide if we want this to be a place where working people can live, a place that isn’t just a playground for the rich, a place where the people who drive the buses and clean the hotel rooms and teach in the schools can get to work without commuting 50 miles.
And it’s not going to be an easy choice.
See, there’s a city charter amendment headed for the November ballot that would set aside a fairly good-size chunk of money, around $30 million per year, for affordable housing. It won’t solve the city’s housing crisis — that would take at least three times as much money, maybe more — but it will, for the first time, create a large, predictable fund of money that can be used and leveraged over the next decade to try to create the type of housing this city desperately needs.
And not entirely coincidentally (see: the subprime mortgage crisis), the voters will be considering this in a year when the city is looking pretty broke.
So the mayor, who hates this charter measure (and who won’t talk seriously about raising new revenue), is going to go all over town and tell everyone that we can’t afford it, that it will mean even more service cuts, that it’s fiscally irresponsible … that whole line. He’ll try to blame the supervisors for the cuts in Muni and the Health Department and the library — and then he’ll run his own candidates in the November board elections, all of whom will oppose the housing measure, and he’ll try to sell them as responsible managers of the city’s treasury.
And all of us will have to make some choices:
Do we recognize that if we can’t build enough low-cost housing, San Francisco will cease to exist as we know it? Are we willing to look at the long run and realize that there will always be good and bad budget years, and that saving the city’s middle-class base is actually good management? Are we willing to accept that the budget should be balanced by new taxes on the rich and not by abandoning everyone else?
God, I hope so. Happy holidays. *
By Amber Peckham
You may have heard of Global Green: it’s the US affiliate of Mikhail Gorbachev’s brainchild Green Cross International, an organization with the hazy but admirable goal of a “sustainable and secure future”. However, odds are that you haven’t heard they’re throwing a party in San Francisco for the third year in a row, because it’s a highly exclusive event. Tickets to attend the cocktail party are $250,. But to participate in everything the party has to offer – a patron dinner, live “ecotastic” auction, eco-friendly fashion show, and organic spa — will set you back a cool $5k per person. Pricey, but all the proceeds go toward Global Green’s efforts to rebuild a sustainable New Orleans, as well as advance the cause of affordable green housing and schools.
Of course, everything at the party is sustainable, including the alcohol. VeeV, the first eco-friendly spirit, is the sole option at this year’s party. VeeV is made from açaí berries, small dark fruits found only in Brazilian rainforests. For every bottle sold, Veev donates $1 back to the communities that harvest the berries. A bottle runs around $33, and a dollar in Brazil usually equates to between two and three Brazilian real.
Isn’t $5k a small price to pay for the chance to run into well-known celebrity Global Green supporters like Orlando, Leo, and Ms. Cruz? Or maybe not…
We can all argue forever whether Sup. Chris Daly’s affordable housing plan is perfect, but in the end, it’s way better than what we have now. Besides, as Daly points out, Jim Sutton is against it. Which is an excellent reason for everyone else to vote yes.
Now that Gerardo Sandoval has said he’ll support the plan, the two swing votes are Sophie Maxwell and Jake McGoldrick. If either one of them opposes this, it will be a slap in the face to all the progressives who have tried to hard to support the two supervisors.
You can call their offices, right now, and demand they support the Daly plan; McGoldrick is 554-7410 and Maxwell is 554-7670.
OPINION The Board of Supervisors is poised to vote on a crucial charter amendment to set aside more than $30 million per year for new housing. Since the mayor is talking about a huge budget crisis and a lot of people may complain that more funding for affordable housing will make the flow of red ink worse, it’s important to understand what this issue is all about.
While many of us are aware of the exodus of working-class people, most San Franciscans are unaware that the city is in the final stages of the largest rezoning effort of the past 50 years. The Eastern Neighborhoods plans will set new land-use rules for the Mission District, eastern SoMa, Potrero, the Central Waterfront, and parts of Bayview.
Those areas are going to be opened up to vast new developments, including as many as 20,000 new housing units and tens of thousands of square feet of new commercial development. I can think of no greater opportunity — nor any greater potential disaster — than the Eastern Neighborhoods rezoning effort.
Opening up the Eastern Neighborhoods for new housing without a commitment from the city to provide more resources for affordable units will guarantee that the new neighborhoods will exclude working-class residents and exacerbate the affordable-housing crisis in San Francisco for years to come.
In the Mission and many other districts, despite the cry for more affordable housing, the city has not prioritized housing for working-class San Franciscans. We hear a lot of talk from city hall, but in reality most of the new housing that gets built is far too expensive for most residents. This is a huge crisis — and the charter amendment will finally give affordable housing its rightful attention from the city.
We can’t accept a plan that relies only on the market to produce and fund some affordable housing. We’ve seen what that means: for more than seven years, while the community has waited for the Eastern Neighborhoods plans to be completed, housing for the wealthy has been built and housing for everyone else has been an afterthought. The Board of Supervisors has set an ambitious goal — 60 percent of all new housing should be below market rate — but the Planning Department and the Mayor’s Office of Housing have failed to produce a comprehensive strategy to meet that target.
So despite the budget crisis, the timing of the Affordable Housing Charter Amendment could not be any better. A measure that designates a significant amount of money every year for housing for working-class San Franciscans can finally bring accountability and a commitment from the city to build and retain affordable housing and plan for inclusive new neighborhoods.
We can’t sit idly by while the disparities widen between rich and poor, whites and people of color — or we will wake up 15 years from now and see the result, the continued exodus of working-class families and other lower-income communities. San Francisco is the only city I know of whose Latino population is stagnant and whose African American population is declining. The time to act is now. The Board of Supervisors should approve the Affordable Housing Charter Amendment, making it one of the key issues in 2008 for San Franciscan progressives.
Eric Quezada
Eric Quezada is the executive director of Dolores Street Community Services and a candidate for District 9 supervisor.
EDITORIAL State senator Carole Migden has stepped into the battle over a 440-unit housing development on the old University of California Extension site, and that creates some promise that the project can be taken off the fast track. State intervention may be critical; the university, which has a record of ignoring local land-use policies, wants developer A.F. Evans to get the project moving forward by the end of 2007, which has driven the San Francisco Planning Commission to schedule a Dec. 20 decision on the project’s environmental impact report. Migden, who isn’t afraid to play hardball, is contacting university officials to let them know she wants the EIR and the project approval delayed until city officials can negotiate a better deal for affordable housing.
Meanwhile, Sup. Ross Mirkarimi is demanding that the developer double the amount of below-market housing.
Mirkarimi and Migden are absolutely right here: the project site is public land that’s being turned over to a private developer for private use — and the city could be getting a much better deal. Evans is offering to set aside just 20 percent of the units for people who aren’t rich — and that’s nowhere near enough to justify turning over public land. Part of the fault lies with the UC, which wants Evans to pay a stiff fee for the use of the land; that’s something Migden ought to press university officials to reconsider.
In the meantime, the Planning Commission should take the EIR off the December calendar and give everyone involved some more time to negotiate.
› tredmond@sfbg.com
OK: a 26-year-old German exchange student was stabbed in the Outer Sunset two weeks ago by a man who appeared to be homeless. It was a terrible incident, an awful crime; we’ll all stipulate that. And although C.W. Nevius, the San Francisco Chronicle columnist, splashed it all over the front page of the Sunday paper Dec. 2, it really shouldn’t have anything to do with how the city sets homeless policy.
But it’s got me thinking.
Nevius is apparently shocked that there’s been a sudden increase in the number of homeless people living in the Sunset. I could have told him and the mayor and the police department a month ago that this was going to happen.
See, thanks to a series of Nevius columns about homeless encampments in Golden Gate Park, Mayor Gavin Newsom got election-year tough this fall and created special teams to go into the park and roust the residents. The mayor, of course, said that all he wanted was to get people into shelters, to get them treatment, to provide them the support that he insists his administration is delivering.
But the fact is, there aren’t enough decent places for all of these people to live. Some day, I still believe, the people in San Francisco (and the people who run the country and the state) will come to their senses and realize that it’s entirely possible to end urban poverty, but that it will take big chunks of money, multiple billions of dollars, and that the wealthy people who like to complain about the folks on the streets will have to pay higher taxes to make it happen. We live in a rich city and a rich country; we can afford to build housing and create jobs and fund welfare programs. We just don’t want to — because we’re Americans and we’ve been told for a couple of generations now that we don’t have to sacrifice for social progress.
In the meantime, no law-enforcement crackdown or Care Not Cash program or shelter system is going to end homelessness in San Francisco. There are going to be people living on the streets because they can’t afford to pay rent on even a nasty single room and they don’t want to deal with the rules and structure of the shelter system.
And I have to wonder:
Weren’t we all better off when we let them sleep in the park?
I know that’s not a terribly satisfying approach to public policy; I know there were and are problems (dirty needles, human waste, befouling of valuable and rare public space) associated with the camps. I know that in theory nobody should be camping in Golden Gate Park; as one city resident reminded me at a neighborhood forum not long ago, the park isn’t a wilderness — it’s a garden.
But nobody should be sleeping in doorways or on sidewalks or in makeshift shelters in industrial areas either. I refer you to paragraph five above.
I ask you (and Newsom and Nevius): where are these people supposed to sleep? No, the park isn’t a home, but a camp hidden in a rarely used corner is more of a home than a bed in a nasty, crowded shelter where you have no rights at all, not even the right to come and go when you want. I know where I’d rather sleep.
Maybe, in the spirit of harm reduction, we should just leave the park campers alone.
EDITORIAL Mayor Gavin Newsom goes before the TV cameras and announces, grimly, that the city faces a massive budget deficit ($229 million) and all departments will have to tighten their belts. There’s an immediate City Hall hiring freeze, and every agency has to prepare for budget reductions of as much as 13 percent. Things are bleak, the mayor insists, and everyone in the city should be prepared for service cuts.
If it feels like you’ve heard this song before, you have. It happens almost every year, and it’s been that way since the 1980s. And it’s not going to get any better until the city takes a hard look at how it brings in revenue and how that matches annual expenses. Before everyone starts lining up behind the mayor’s budget cuts, that’s what the supervisors need to do.
It’s still early in the budget cycle, and the shortfall numbers are still tentative. So the deficit is really a moving target, and it’s way too soon for anyone to start talking about specific numbers for specific cuts. It’s also entirely possible that the doom-and-gloom budget talk is aimed in part at derailing efforts by Sup. Chris Daly to put a charter amendment on the June 2008 ballot that would set aside $30 million per year for affordable housing.
But we’ll stipulate that the numbers aren’t good and that once again the city will have an unpleasant budget season with worthy causes, organizations, and agencies fighting one another over small bits of available money.
It’s also clear that Newsom’s first response to the problem is entirely wrong. "Although he wants to trim the fat," Newsom’s spokesperson, Nathan Ballard, told reporters, "the mayor made it abundantly clear he doesn’t want to see a reduction in people sweeping streets or police officers walking beats."
In other words, it’s fine if poor people can’t get treated at San Francisco General Hospital or mental health and substance abuse services get eliminated or funds for homeless housing disappear — but the streets will still be squeaky-clean. And for the record, the mayor resisted all efforts to get cops to walk beats and was only forced into approving it after the supervisors overrode his veto.
The hiring freeze is a gimmick: you can’t possibly run an operation the size and complexity of San Francisco city government with critical positions unfilled. What’s actually happened is that Newsom told department heads they can’t hire anyone without getting approval from his office first. So in effect, Newsom has given himself a direct veto over all personnel decisions at City Hall. He’ll simply make sure that the jobs he wants filled and the agencies he wants to continue operating properly will be spared, and others will get squeezed.
It’s a way to set policy without ever publicly discussing it, a way to shift money around without public hearings or input from the supervisors. It’s not a way to solve budget problems.
In fact, balancing San Francisco’s books — now and next year and the year after that and into the future — requires something that’s in short supply at the Mayor’s Office: direct and honest communication.
Here’s the problem: San Francisco, because it’s a city and a county, does a lot more than most other municipalities. And because it’s a city with active groups pushing for humane policies, it’s a city that tries to provide services that ought be paid for by the federal or state governments. In a rational system, San Francisco wouldn’t have to come up with $30 million per year for affordable housing; billions of dollars would be coming out of Washington DC to address poverty, homelessness, and the housing crunch in American cities. San Francisco shouldn’t be setting aside cash from the General Fund for the public schools; the state of California ought to be funding the schools at a level that would make local support unnecessary. And wealthy people in the United States (including in California and San Francisco) would be paying higher taxes to fund those things.
But that’s not the real world. Right now San Francisco has to find local money for pressing needs — and the city is both unable and unwilling to raise that revenue from its wealthiest residents and businesses. So the city budget is perpetually out of whack.
There are only two choices, really: the city can stop trying to do what the feds and state won’t, can back down on its commitment to something resembling a livable community and some form of social justice — or the folks at City Hall can start talking seriously about bringing in another $250 million per year in revenue.
It’s tough to raise taxes in a California city; state law sets high barriers. But it’s not impossible, and if the mayor and the supervisors came up with and campaigned for a comprehensive and progressive overhaul of the city’s tax system — with the goal of making the local rich people who have benefited from the George W. Bush tax cuts pay their fair share — San Francisco could get out of these constant and painful budget problems.
We’re getting sick of waiting.
Of course Gavin Newsom knew that a budget problem was ahead. He sees the figures. He also knows that it’s not about the economy or the looming recession; as Controller Ed Harrington put it, “our revenues here in the city are doing fine.”
That is, the revenue is on track, on budget, as predicted.
The problem is that the revenue San Francisco brings in isn’t enough for the level of spending. It’s no surprise: The city has to give its key employees nice raises, as Newsom did, because it’s so expensive to live here. City payroll is going to keep going up as long as housing prices do — and as long as Newsom doesn’t address the real housing issues.
All the talk of a hiring freeze and cutting out middle managers is nonsense; it won’t go anywhere. And sure, there’s fat in the city budget, but not $250 million worth. If Newsom were honest, he’d admit there’s a real structural problem here:
San Francisco voters want extensive public services (and that’s fine). City officials want to pay employees well (and they should). The city is trying to put resources into all sorts of problems that the federal and state governments have ignored (and that’s just not going to change).
To make it all work, we need more money. About a quarter billion dollars a year. Once you admit that, you can start talking about how to find it — who has to pay more taxes. But as long as you’re in denial, the problem will never go away.
OPINION We’re in a tough spot as a city when it comes to housing costs. As the price of living here goes ever higher, we lose everything special about the culture of San Francisco.
Here’s the dilemma: more people want to live here than we are creating places for.
Why do people want to live here? Cultural tolerance. Economic opportunity. To be part of a community that doesn’t feel like the rest of the United States. The same mix of reasons that caused most of us to come here.
But we are barely adding to the supply of housing. On average over the past two decades, we have produced around 1,500 units per year. The city would need to produce between 3,000 and 5,000 units per year to keep housing costs from going up. If we added 5,000 units a year, after 70 years we would have the same density as Paris.
We already know what happens when people in a city faced with high housing demand decide they like their community the way it is and do not allow new construction. You get Carmel and Colorado’s Aspen and Boulder. You get an ultraritzy resort town.
San Francisco is on the way to becoming the largest city to go down this path.
The easy answer is to blame gentrification on the high-rise condos for rich people. But the only thing that would gentrify the city faster than building those condos is not building them.
People are moving here. If they are not allowed to be stacked in little concrete boxes on top of other little concrete boxes, those with more money will displace those with less money, through the simple process of being willing to pay more for the Victorians and all the rest of the building stock. That’s why older housing units don’t sell for less than new housing units.
What do we need to do? Increase housing at all levels, but in a smart way:
•Concentrate the housing in places with excellent transit and within walking distance of stores.
•Add as much to the supply of affordable housing as possible. This costs about $200,000 per unit in subsidy. So if we want to help 10,000 families, we need $2 billion; if we want to help 25,000 families, we need $5 billion.
•Carefully convert some of the historically industrial areas into new, mixed-use neighborhoods.
•Stop requiring developers to build extra parking. Developers should never, ever be required by the government to build extra parking, since each space costs $40,000 to $75,000.
•Require excellent design of new buildings. If people felt confident that most new construction was going to contribute as much to the city, in the long run, as the old buildings do, we would be halfway to solving the problem.
All of this, of course, happens to be the same strategy we need to embrace to fight sprawl and its attendant outcome, global warming. Not one more inch of farmland in California would need to be developed if we were just willing to put growth inside existing cities. But this requires fundamental changes in the way we have been planning our cities for a long, long time.
Gabriel Metcalf
Gabriel Metcalf is executive director of the San Francisco Planning and Urban Research Association.
