If you think about it, there’s a certain poetry to the dramatic arc of the fall premiere season. As we all know, after fall comes winter, and by December many of these TV shows will be dead, with just a few dried-up blog entries left behind to mark their passing. This painful thought might provoke a zealous couch fan to get carried away — watching every last debut to hit the networks while staying faithful to old favorites from seasons past. And granted, certain shows, like the well-cast Six Degrees, with Campbell Scott, Hope Davis, and Jay Hernandez (premiering Sept. 21 on ABC), or Showtime’s Dexter, starring Michael C. Hall (Six Feet Under) as a serial killer with the best of intentions (premiering in October), deserve at least a shot at some viewers.
But even the Guinness record (69 hours and 48 minutes) proves there are limits to how much TV one human being can watch — though apparently there are no limits to how many dramas based on the premise of 24 can be developed in one season. Choices must be made — between, say, the NBC comedy about a late-night sketch comedy show starring SNL’s Tina Fey and Alec Baldwin and the NBC drama about a late-night sketch comedy show starring Matthew Perry, Amanda Peet, and Bradley Whitford and created and written by Aaron Sorkin (Sports Night, The West Wing). What follows are notes from a highly subjective decision-making process. Show info is subject to change.
Studio 60 on the Sunset Strip vs. 30 Rock Aaron Sorkin’s writing is pretty much why I started watching television again, and I’m still not over Sports Night’s 2000 cancellation. Thus, in the face-off between shows about sketch-comedy shows, his creation, Studio 60, will no doubt reign supreme. Bradley Whitford from The West Wing stars alongside Amanda Peet and Matthew Perry — and while the latter actor certainly wasn’t the least annoying of Friends’ friends, a guest spot on The West Wing proved his Chandler mannerisms haven’t completely devoured him. (Studio 60 on the Sunset Strip: Mon., 10 p.m., NBC; premieres Sept. 18. 30 Rock: Wed., 8:30 p.m., NBC; premieres Oct. 11)
Vanished vs. Veronica Mars Having spent five years watching Gale Harold plug every available male extra in greater Toronto as Queer as Folk’s surly stud Brian Kinney, I’m tempted to get invested in his character’s FBI investigation of a disappeared senator’s daughter. The thing is, even if he does get to play another unapologetic asshole, he will likely have clothes on. So will Kristen Bell in Veronica Mars, but the latter show, about a smart-ass teen private investigator engaged in all kinds of class warfare, was easily the best high school drama since My So-Called Life, while in a vastly different vein. The sleuth is university bound now, and higher education is clearly a death knell for teen dramas, but I’m betting Veronica won’t let her studies get in the way. (Vanished: Mon., 9 p.m., Fox; premiered Aug. 21. Veronica Mars: Tues., 9 p.m., CW; premieres Oct. 3)
The O.C. vs. Dante’s Cove They may seem like an odd couple, but both The O.C. and Dante’s Cove feature melodramatic sexual entanglements, power tripping, drug addiction, and expensive real estate. The O.C. may have a slight advantage in terms of plotlines and thespian talent, but c’mon: Dante’s Cove, part of Here!’s all-queer programming, has real live gay people, a private sex club — and black magic! Also, I get how satisfying it must have been to finally off the waif with suicidal tendencies, but with Marissa in the grave, The O.C. is likely to become so bearable it’s boring. (The O.C.: Thurs., 9 p.m., Fox; premieres Nov. 2. Dante’s Cove: Fri., check for times, Here!; premieres Sept. 1)
One Tree Hill vs. Friday Night Lights The infant love child of UPN and the WB fashioned a glaringly lowest-common-denominator ad campaign whose thought-provoking tagline for One Tree Hill was “Free to be cool.” And yet, I breathed a deep sigh of relief on learning that the show, basically about a small town that loves its basketball and the dramas that ensue, had survived the merger and gained entrance to the freedom-loving land of the CW. Friday Night Lights, based on the movie that’s based on the book, is about a small town that loves its football and the dramas that ensue. A toughie, but I hate football, so for me One Tree has the home court advantage — plus the laser-beam-eyed power-acting of Chad Michael Murray. (One Tree Hill: Wed., 9 p.m., CW; premieres Sept. 27. Friday Night Lights: Tues., 8 p.m., NBC; premieres Oct. 3)
Prison Break vs. Runaway Maybe it all goes back to my deep, abiding love for The Legend of Billie Jean, but dramas about desperate people on the run from the law have a near-endless ability to captivate me. Prison Break has the hot brothers. CW debut Runaway looks to have more of a Running on Empty family dynamic — with New Kids on the Block’s Donnie Wahlberg in the Judd Hirsch role. Both hint vaguely at possible political undertones. Mostly for River Phoenix’s sake, I’m going to go with the latter. (Prison Break: Mon., 8 p.m., Fox; premiered Aug. 21. Runaway: Mon., 9 p.m., CW; premieres Sept. 25)
Jericho vs. Three Moons over Milford Jericho has Skeet Ulrich and a nuclear holocaust on the horizon. Three Moons has, well, three moons — or parts of what used to be one moon — and one or more of them might be heading this way. The end (of the season, that is) will be in sight for the latter sooner, which is good, because how many times a week can a person watch the world teeter on the brink of collapse? (Jericho: Wed., 8 p.m., CBS; premieres Sept. 20. Three Moons over Milford: Sun., 8 p.m., ABC Family; premiered Aug. 6)
Project Runway (reruns) vs. Fashion House The community-minded thing to do, no doubt, would be to support KRON TV’s efforts to add dramatic content to its programming. After all, Fashion House, a six-nights-a-week telenovela-style program about the fashion industry starring Morgan Fairchild and Bo Derek, should just about do the trick. And yet, even after Project Runway’s latest season ends later this fall, I’m probably going to find other uses for those six hours — including renting back episodes of the show that makes it work. (Project Runway: Bravo; your local video store. Fashion House: Mon.–Sat., 10 p.m., KRON; premieres Sept. 5) SFBG
What happens to the news when the conglomerati corner the Bay Area newspaper market
By Bruce B. Brugmann (B3)
As you will remember from my last blog, I unveiled the term Eurekaism to replace the term Afghanistanism for the bad habit of many daily papers to cover stories in Eureka, but not the local big scandal or embarrassing stories in their hometowns.
Well, as I was pedaling away this morning on my cardio machine at the World Gym,
I turned as usual in the Hearst-owned Chronicle to find the day’s real Eureka style news: the second page of the business section under the Daily Digest section. Today, surprise, surprise, the Eureka story was below the fold with a nicely disguised head that read: “State won’t challenge newspaper sale.”
Eureka! There was a rummy little five paragraph story that announced a major new development in the major running story of the emerging new regional media megaconglomerate (Hearst/MediaNews Group/Singleton/Gannett/Stephens/McClatchy). The development: Atty. Gen. Bill Lockyer announced that his office will not take antitrust action over the McClatchy sale of the San Jose Mercury-News and Contra Costa Times to Singleton, but that he would investigate a three-way transaction between the companies and Hearst. The story quoted Lockyer as saying without blushing in his standard line to remove-all-pebbles-from-any-impending consolidation: “It does not appear that these transactions will result in a substantial reduction in competition,” though most everyone in the Bay Area knows otherwise. It is a major story that ought to be regularly covered on the front pages of all the papers, with context, perspective, outside expert opinion, mainstreet commentary, and some tough questions of Lockyer. But the megaconglomerate is either censoring, trivializing or burying the story with axe and shovel.
For example, the Chronicle story was not a Chronicle story, but a Reuters wire service story datelined New York (we pulled down the Reuters story from the Reuters website.) The difference between the Reuters and Chronicle stories was telling: Reuters had a better head, “California Oks McClatchy-MediaNews paper sale,” while the Chronicle left out the local Hearst angle. The Chronicle also cut out five key paragraphs from the Reuters story, notably three that made some embarrassing points:
“The move would result in MediaNews owning most of the largest dailies in the area, including the Oakland Tribune. Hearst owns the San Francisco Chronicle.
“San Francisco-based real estate investor Clint Reilly had filed an injunction to halt McClatchy’s sale of San Jose Mercury News, Contra Costa Times and Monterey Herald.
“He argued the sale would put all three California in a partnership controlled by MediaNews and including Gannett Co. Inc. and privately held Stephens Media Group, therefore reducing competition and harm (sic) advertisers and readers…”
Meanwhile, on the Contra Costa Times, George Avalos wrote a misleading three paragraph story that the “state decision clears away the final regulatory impediment to the MediaNews purchase of the Bay Area papers.” No mention of the continuing Hearst/Singleton investigation nor the
Down at the Mercury-News, an unbylined story buried the AG’s statement in the last two paragraphs of a five paragraph story trumpeting the new four man team that will run the nation’s “4th biggest newspaper chain.” No mention of the Reilly suit nor the continuing Hearst investigation.
And what happens on a paper not owned by any of the conglomerati? The headline on the East Bay Business Times got it right: “Attorney General continues to look at Hearst deal.”
I repeat: show me a paper owned by any of the Hearst/MediaNews/Singleton/Gannett/Stephens/McClatchy papers that is really covering the story. Alas, the links below indicate the pattern of how badly they are covering the story. (At the time of this writing, we couldn’t find the Hearst story on the Chronicle website.)
Coming next: Let’s play Eureka!! B3
EDITORIAL The federal judge who allowed the largest media merger in Northern California history to go forward unimpeded did what far too many judges do in cases like this: she ruled narrowly on the tightest definition of the law and missed the overall point entirely. Judge Susan Illston rejected a bid by San Francisco real estate investor Clint Reilly to block Denver billionaire Dean Singleton’s effort to buy virtually every daily newspaper in the Bay Area and set up an unprecedented media monopoly. Reilly had sought an injunction against the deal, arguing that once it’s approved there will be no way to halt the obvious damage. Illston noted that Reilly had raised “serious questions” and agreed that there’s “a need to examine the proposed sale to ensure that no long-term harm will come to Bay Area residents.” But she insisted in a 16-page opinion that the deal posed no “pressing and imminent danger.” Wait: no imminent danger? One person could soon control every single significant news media outlet in the entire Bay Area save for the Hearst-owned San Francisco Chronicle — which also has a financial partnership with Singleton. What does Illston expect? That a year or two down the road, when residents of the region find themselves without any credible local newspapers and advertisers find nothing but high monopoly rates, someone can reexamine this and find that it was a bad idea? That’s silly. The time to put the deal on hold and address Illston’s “serious questions” is now, before it’s too late. Nobody will be able to unscramble this egg. But Illston didn’t get that at all. Instead, she ruled that the real threat of great harm was to the defendants — the billionaire publisher and his business associates. Actually, they face no risk of harm at all — except for the threat to their ability to make obscene profits by gutting newsrooms, combining operations, and tearing the heart out of Bay Area journalism. This is how Singleton, known (for good reason) as “Lean Dean,” operates. He likes what he calls “clusters” of papers — groups of newspapers in adjoining geographic areas. He centralizes as many functions as possible, reduces staff to the minimum necessary, then sits back and watches the cash roll in. In the Bay Area, that will probably mean that the big, expensive newsrooms of papers like the San Jose Mercury News and the Contra Costa Times will be pared down, perhaps merged into a single operating center. The various papers will share stories, so there won’t be much difference (or competition) between them. Old-fashioned concepts like investigative and enterprise reporting, which require time and resources, will disappear. None of this requires a law degree and a judicial robe to comprehend. It’s been happening all over the country; Singleton’s record is clear. Of course, it didn’t help that Reilly was all alone on this, a single local businessperson trying to block a massive media merger that the state and federal governments are apparently ready to approve with only cursory examination. The outcome might have been very different if Attorney General Bill Lockyer had appeared before Illston representing the state of California. But Lockyer is sitting on his hands — and the US Justice Department just announced that it won’t pursue the matter and is going to allow the merger to proceed (see www.sfbg.com). This doesn’t have to be the end of the case, by any means. Reilly can and should go forward with his suit as aggressively as possible. And Lockyer, who is running for state controller, and Jerry Brown, who is running for attorney general, need to stop ducking this issue and take a firm stand against the merger. SFBG PS All of the papers involved in the merger covered the ruling, but none of them quoted outside experts critical of Illston’s decision or critical of the merger itself. Bruce B. Brugmann, Guardian editor and publisher, posted some key questions for the publishers on his Bruce Blog at www.sfbg.com; here are some of them: Why, if Hearst and the publisher participants feel they can’t cover themselves, don’t they get quotes from journalism or law professors at nearby UC Berkeley, Cal State Hayward, Stanford, San Jose State, SF State, USF? Why don’t they check with other independent experts such as Ben Bagdikian of The Media Monopoly fame, who is living in Berkeley? Why don’t they quote union representatives at the Chronicle and Merc? Why don’t they quote the congressional delegation that called on the Department of Justice and the attorney general to carefully scrutinize the sale? Why don’t they call on Sup. Ross Mirkarimi, who introduced a local resolution opposing the sale, or any of the other supervisors who approved it unanimously? Why is it left to the handful of remaining independent voices to raise these critical questions? PPS Now that the investigation is closed, we’ve asked the Justice Department to release its full investigative file. We hope all the local daily publishers, who love to talk about open government, will support our request. Read the Alioto Legal Documents: Complaint.pdf Gannett-Stephens_Opp_to_ TRO.pdf Hearst_Opp_to_TRO.pdf McClatchy_opp_to_TRO.pdf MediaNews-Calif_Newspaper_Partnership_Opp_to_TRO.pdf Memo-Supp_of_Mtn_for_TRO.pdf Order_denying_TRO.pdf Plaintiff’s_Reply_to_Mtn_for_TRO.pdf
TECHSPLOITATION I didn’t want to see it, and then I did. When Pirates of the Caribbean: Dead Man’s Chest came out, I was beyond underwhelmed. But then the box office numbers started rolling in — it was the biggest weekend take in movie history — and I was intrigued. I kept wondering how Johnny Depp’s prancing pirate Jack Sparrow could pack more punch than square-jawed Superman. After seeing the flick, the answer was obvious.
Jack Sparrow lives in a world of magic and monsters, a place where half-fish zombies stalk the seas in a mysterious ship and a giant kraken fells merchant vessels with fat, sucker-covered tentacles. His greatest enemies are Davy Jones, an undead sea captain with a squid for a head, and the British East India Company. How can Superman’s boring domestic troubles and a bald, Method-acting real estate mogul ever hold a candle to that? Metropolis is drably realistic compared with Jack’s South Seas. And yet the films’ supreme enemies do have a lot in common. The British East India Company and Lex Luthor’s real estate firm are both ruthless corporate enterprises whose owners mow down human life in search of bigger profits.
It’s only in an overt fantasy like Pirates, however, that we get a story capable of capturing the full horror of uncontrolled corporate greed. Representing Halliburton-size evil is a toady for the British East India Company, who coerces hero Will Turner into hunting down Jack to get the pirate’s magical compass, which points the way to whatever its owner desires. In exchange for this perfect colonizing tool — essentially, a never-ending source of information about where the raw materials are — the king of England promises to grant Jack a full pardon and make him a privateer.
But Jack is a true pirate. He steals and swashbuckles for the love of it and has no interest in working for a boss. Instead of selling out to the British East India Company, he faces down Davy Jones and his zombie crew, who are cursed to spend their afterlives working under the iron discipline of their tentacled captain. As they get older, they literally merge with the ship itself, melting into the wood until they are just flattened, grimacing faces poking out of the bulkheads. Fleeing the British East India Company’s brand of domination, Jack falls right into the path of a boss whose monstrousness mirrors it.
Of course, this is also just a movie about people fighting monsters with goo and suckers and claws. And that’s what makes Pirates both fun to watch and fun to endlessly analyze. Monster stories leave room for interpretation; they allow us to tell stories that are subversive, that question why we should have to take shitty jobs and respect corporate power. At least, some monster stories do.
I just finished writing a book that’s all about how monster stories in the United States reflect often-buried fears about capitalism run amok. The book is called Pretend We’re Dead: Capitalist Monsters in American Pop Culture, and you can actually buy the damn thing now. It’s in bookstores and on Amazon and crap like that. I don’t want to tell you how long it took me to write, but suffice it to say that before I became a tech and science geek, I was a horror and science fiction geek.
The weird thing is that I learned to excavate the cultural meaning of real-life technologies by analyzing movies about imaginary ones. That’s because the process of innovation is nearly identical to the process of dreaming up a monster. Just as new devices like the iPod or TiVo respond to changes in social norms, so too do our fantasies. I mean, it’s no accident that a horror movie like The Ring came out during the heyday of file sharing. Let’s think about it — the flick is about a haunted videocassette that will kill you unless you make a duplicate copy and show it to somebody else. It’s like a nightmare analog version of BitTorrent. If you do not share your media, you will die. Creative Commons really should do a cartoon parody of The Ring.
There will always be people who want to consume their electronic toys and mass media without having to think about what they mean. Sometimes they’ll even claim that there are no politics of science fiction — or science — because politics only take place in Congress or at the United Nations. But I say that until we understand the monsters in our dreams, we’ll never defeat the ones who run the world. SFBG
Annalee Newitz is a surly media nerd who just published a book — w00t!
Come hear her read from it (and enter a B-movie trivia contest): Thurs/27, 7 p.m., City Lights Bookstore, 261 Columbus, SF. (415) 362-8193, www.citylights.com.
EDITORIAL The last time real estate investor Clint Reilly took the local newspapers to court in 2000, the trial was a sensation. Among other things, Tim White, who was at the time the publisher of the San Francisco Examiner, admitted that he had offered to give then-mayor Willie Brown more favorable editorial coverage if Brown would help squelch a Justice Department investigation into an Examiner-Chronicle financial deal.
The so-called “horse-trading” testimony brought to light one of the giant lies of the daily newspaper business in San Francisco and proved that the out-of-town owners of these papers care more about profits than honest journalism.
Back then, the deal involved Hearst Corp., which owned the Examiner, wanting to buy the Chronicle. The idea was to shut down the Ex, eliminate a 35-year-long joint operating agreement, and create a daily paper monopoly. The Justice Department hemmed and hawed a bit, then (thanks to Brown and Sen. Dianne Feinstein) agreed to a backroom deal: Hearst would give the Ex to the Fang family (along with a juicy three-year, $66 million subsidy), and the federal regulators would get out of the way.
Reilly’s suit was a tremendous public service, shining light on parts of the newspaper business that the big publishers always try to keep secret. In the end the suit went down, dismissed by a conservative federal judge, Vaughn Walker, who nevertheless called the whole Hearst-Fang-Chronicle deal “malodorous.”
Now there’s another, much bigger newspaper deal in the Bay Area, one that would create a far bigger and more powerful news monopoly — and once again, while the government regulators dither and duck, Reilly is taking the matter to court.
The unholy arrangement in question would give Denver media baron Dean Singleton and his Media News Group (in partnership with Gannett and Stephens Media) control over virtually every daily newspaper in the Bay Area [see “Singleton’s Monopoly,” 5/6/06]. Singleton, who already owns the Marin Independent Journal and the Oakland Tribune (among others), is buying the San Jose Mercury News, Contra Costa Times, Monterey Herald, and some 30 other small dailies.
That would leave the Chronicle as the only real competitor, but Hearst, which now owns the Chron, is in the deal too, helping finance some of Singleton’s out-of-state purchases in exchange for a stake in the business.
Reilly, represented by antitrust lawyer Joseph Alioto, argues that the whole thing violates the Sherman and Clayton antitrust acts and would lead to an illegal consolidation of market power for one newspaper owner. It would also, of course, lead to an unprecedented consolidation of local political power for a conservative Denver billionaire. Reilly wants an immediate injunction to put the merger on hold while the courts can determine how bad its impacts will be.
Three cheers for Reilly: Somebody had to question this massive media scandal — and so far, there’s no sign that the government is going to. The US Justice Department is doing nothing to aggressively fight (or even delay) the deal, and we’ve heard nothing out of the office of Attorney General Bill Lockyer.
The damage that this newspaper consolidation could do is long lasting and irreparable: Once the papers are all fully integrated under the Singleton umbrella, there will be no way to unscramble the egg. That’s why the court should quickly approve Reilly’s request for a temporary restraining order so the whole thing can be examined in detail, in public, before a judge.
Meanwhile, the political questions keep flowing: Where is Lockyer? Where is Oakland mayor Jerry Brown, who wants to be the next state attorney general? And where is the supposedly competitive Chronicle, which has said nary a word against the deal?
PS: The news coverage of Reilly’s suit reflects how poorly the daily papers cover themselves: Just tiny press-release-style reports, with no outside sources, no indication of how crucial the issues are, and no aggressive reporting. It reminds us of how the papers covered Sup. Ross Mirkarimi’s resolution opposing the deal: Guardian editor and publisher Bruce B. Brugmann hand-carried a copy of the resolution to the Chronicle reporters in the press room. The paper never ran a story. SFBG
To see a copy of the Reilly lawsuit, go to www.sfbg.com. For all the inside details on the deal, check out knightridderwatch.org.
OPINION The recent Guardian editorial was absolutely correct in its analysis of development in the Presidio: San Francisco “wound up with the worst of all worlds” [“Playing Hardball in the Presidio,” 7/12/06]. Essentially it was Rep. Nancy Pelosi who created the all-powerful, arrogant, and unaccountable Presidio Trust to simply have its way with the conversion of the park, one of most breathtaking, inspiring pieces of real estate in the world, situated right here in our own front yard.
The voices of San Franciscans hoping to inject any conscience into the transition process of the military base into a national park have been basically ignored from the beginning; any opinions expressed at the mandated community hearings that did not fit in with the trust’s plans counted for nothing.
Many will remember that in January 1996 Religious Witness with Homeless People launched a campaign to preserve the Presidio’s roughly 1,900 housing units and make them available to San Franciscans of all economic levels. We specifically targeted the 466 units of former military family housing and tried to have those set aside for homeless individuals and families and other low-income members of our community. This powerful campaign extended over a period of almost three years and was actively supported in a variety of ways by a diverse collection of at least 237 organizations and more than 1,700 individuals in San Francisco, including then-mayor Willie Brown and other elected city officials. But even the powerful, united voice of this campaign was haughtily disregarded by the seven members of the Presidio Trust, all with the smiling blessing of Pelosi.
The ultimate step taken by our campaign to secure the availability of the housing for our city, which even then suffered a crisis in the lack of affordable housing, was to place a measure on the 1997 ballot. Proposition L stated that unless the Presidio Trust made housing available to San Franciscans of all economic levels, the city would withhold the nonemergency services so desperately needed by the Presidio in order to function.
The passage of Prop. L provided the powerful leverage needed to achieve our goal. We had no reason to suspect that Mayor Brown, who had strongly, consistently, and publicly supported our campaign and the passage of Prop. L, would betray us.
However, shortly after the passage of Prop. L, Brown simply gave the trust the public services it needed. This was a betrayal of hundreds of men and women living on our streets, and the 93,002 voters who favored the proposition.
Throughout our three-year campaign, Pelosi, the National Park Service, and the Presidio Trust repeated the mantra: “The National Park Service is not in the business of providing housing.” How hypocritical, then, are the trust’s current plans to build hundreds of housing units in the Presidio, even as its seven nonelected members continue to arrogantly ignore the expressed concerns of the neighboring communities? That’s what happens when the guiding force is money instead of social and environmental concerns.
What was once a dream for San Franciscans has become a nightmare. It happened as Pelosi stood firmly with the Presidio Trust as it created an elite city within our city. But the plans are not yet fully implemented, and San Franciscans still have a chance to put a stop to the Presidio Trust’s most recent assault on our community. SFBG
Sister Bernie Galvin
Sister Bernie Galvin is the director of Religious Witness with Homeless People.
It’s your Guardian. That’s the message we posted on the cover today, and I mean it: The new sfbg.com website is designed to be fully interactive. You can post your comments on every article, every review, every editorial. You can join in on five new blogs. In a few weeks, we’ll have a reader’s blog, just for you.
Newspaper publishing should never be a one-way communication. For more than 20 years, I’ve been hearing from readers (yeah, I answer my own phone), and your ideas and suggestions (and complaints) are what make this paper great.
And now you can share your thoughts with all the other readers, too. Argue, fight, tell me I’m full of shit, point out great San Francisco ideas that ought to be in the mix … It’s easy. Registration takes about 30 seconds. And keep coming back – there’s going to be more, much more, rolling out in the next few weeks.
The first thing I did when I learned that private housing developers in San Francisco were demanding 28 percent profit levels (see page 5) was to call my brother Mike, who runs a small business building houses in New York. He almost dropped the phone.
“Let me get this straight,” he said. “These guys say they need 28 percent profit?” That’s the minimum, I told him.
“Shit, sign me up,” he laughed. “I’ll take the whole crew and we’ll be on the next plane.”
Mike is thrilled when he walks away with 10 percent profit on a job. So is everyone he knows. So are most small businesses (and quite a few large ones). The only ones who can get away with demanding that sort of return are oil companies, daily newspaper publishers, and, it appears, San Francisco real estate developers.
This isn’t really shocking news: We’ve known for a long time that developers make a killing in an inflated housing market. Compared to the boom years of the 1980s, when the office market was running rampant and out of control, the 28 percent margins aren’t that outrageous – high-rise office developers made even more.
But there’s a bottom line for the city: These folks aren’t just getting rich; they’re getting really rich – purely off a market that exists simply because of the appeal of San Francisco. They owe it to the city to give more than a pittance of that back.
Now this: Just about every small-business owner in San Francisco is sitting down with a spreadsheet and trying to figure out how much Sup. Tom Ammiano’s health care legislation is going to cost. A lot of them seem to be nervous – in part because of the fearmongering campaign put out by the Chamber of Commerce and the Committee on Jobs.
But when you actually look at what the law says, it’s not that scary. I’ve gone over the final language, and here are some key points:
1. The requirement that employers pay for health care doesn’t affect anyone with fewer than 20 employees, which is most of the small businesses in town.
2. Nobody’s going to have to pay anything until July 2007, and companies with between 20 and 50 employees aren’t going to have to pay anything until April 2008.
3. There’s a 90-day waiting period before anyone has to pay for a new employee.
4. Nobody will have to pay for employees who either have health insurance already (from a spouse, say) or who voluntarily decline health insurance.
5. Employers will pay based on how many hours an employee works, so the price for a part-timer will be comparatively small.
6. If you have more than 20 employees and don’t currently provide health insurance for all of them (or the amount you pay for that insurance is low), you’ll have to ante up, either by buying insurance in the private market or paying into the city plan. For companies with 20 to 99 employees, the city plan will run about $1.12 an hour next year for anyone who works more than 12 hours a week. Pencil it out; it may not kill you.
It’s absolutely an imperfect system. Employer-based health insurance is the wrong model. But for now it’s all we have – and this is a way to offer at least basic primary health care to everyone in the city. It’s worth the price. SFBG
The Presidio, converted from military to civilian use 12 years ago, has six million square feet of former officers’ quarters, barracks, and buildings that make it unlike any other national park in the country.
This public space has become home to a mixed bag of occupants — primarily private citizens, a smattering of nonprofit organizations, and an increasing number of commercial enterprises — as the Presidio Trust pursues a controversial congressional mandate to be financially self-sustaining.
Two different museums have also vied for residence at the site of the park’s Main Post: the California Indian Museum and Cultural Center (CIMCC) and the Disney Museum. Both submitted viable proposals for exhibition space, representing starkly different futures for the Presidio.
This is the story of how one may get to stay and the other just had to go. This is also the story of how the Presidio Trust is transforming a prized national park into just another piece of real estate to be claimed by the highest bidder.
In Presidio Trust literature, the Main Post is called the “heart of the Presidio.” The centrally located seven-acre parcel includes an enormous parking lot surrounded by dozens of buildings that provide a steady stream of traffic pumping through the arteries of Presidio Boulevard and Doyle Drive. If you were hoping to attract a regular flow of visitors to your museum, the Main Post would be an ideal place to put it.
Photographs of classic Presidio architecture usually show the northwestern edge of the Main Post where Buildings 103 and 104 are a stately couple among a quintuplet of identical four-story brick structures. They are now empty, except for some temporary office space. Approximately 44,000 square feet each, the historic barracks were built between 1895 and 1897 to accommodate troops returning from frontier battles during the conquest of Native American tribes.
When the National Park Service was handed the Presidio in 1995, the CIMCC became one of the first “park partners” to set up office. For almost two years, the museum negotiated with the park service to lease additional space for the first living museum of Native American culture in California.
The museum planners took a shine to Building 103, paid for a $44,000 renovation study, and kicked off the necessary fundraising with a $2 million allocation from then–Senate president pro tem Bill Lockyer. Joseph Myers, a Pomo Indian, lawyer, and chairman of the CIMCC Board of Directors, said there was a lot of enthusiasm for the project.
“Even when we just had office space here we had international visitors wandering through, wondering when there would be a museum here,” he said.
Things were looking hopeful, and on Sept. 21, 1996, the Presidio, originally home of the Ohlone tribe, hosted a formal dedication of the return of a Native American presence to the park. Then-mayor Willie Brown attended the ceremony and pledged his support to the project.
Not long after, the Presidio’s power structure radically shifted. The park was split into two areas, with Area A along the waterfront managed by the park service and the inland Area B and the bulk of its buildings, including the Main Post, managed by the Presidio Trust — the result of a newfangled proposal by Rep. Nancy Pelosi that won acceptance in a Republican-controlled Congress.
The Presidio is the first national park with a mandate to pay its own way; the trust’s finances are governed by a board of seven presidential designees — initially chaired by downtown-friendly Toby Rosenblatt and including Gap founder Donald Fisher. The new landlords informed the CIMCC that all real estate negotiations were on hold.
“We tried very hard to convince them we would be good tenants,” Myers told the Guardian. “The Presidio is originally one of the places where Indians suffered at the hands of Spanish conquistadors. They were tortured and killed for not being good slaves. That’s old history, but it’s certainly morally and culturally acceptable to consider the Presidio a good place for a museum.”
But over the course of three years, serious discussions with the trust were delayed, and alternate plans and proposals for different buildings were ignored. In September 2000, at Myers’s insistence, the CIMCC finally met with Presidio staff and was encouraged to submit a proposal to renovate three dilapidated buildings near Lombard Gate.
The deadline to submit was short, but the CIMCC met it and museum planners say they were promised a decision within 14 days. Nine months later they received a formal response with, according to Myers, no solid answer. They continued waiting until an article in the San Francisco Chronicle informed them that the buildings had been leased to a private foundation from Silicon Valley.
The results of that deal now stand within sight of the Main Post: the Letterman Digital Arts Center, 850,000 square feet of space renovated and leased for $5.6 million a year by the private company Lucasfilm.
According to Presidio spokesperson Dana Polk, negotiations didn’t work out because the CIMCC couldn’t pay rent or put money into the work on the building. “They weren’t able to do either,” she said.
Somehow the museum was able to do it elsewhere. After withdrawing all proposals and vacating its office space, the CIMCC purchased a 24,000-square-foot building in Santa Rosa. The museum pays $10,000 a month in mortgage for the building, now worth $3 million, and it’s a better deal than the Presidio offered: a leased space at $50,000 a month after $10 million in renovations paid out from the CIMCC’s pocket. But it doesn’t lessen the irony or pain of the situation.
“The philosophy behind keeping the Presidio alive for public access was not for the purpose of George Lucas and Disneyland, but for California culture,” said Myers. “I think they have their own idea of what cultural projects are, and it’s not us.”
The new museum is still under construction in Santa Rosa and will include displays of indigenous art and archives. The National Indian Justice Center already calls it a home, and there are regular workshops on subjects like storytelling and art, current issues, and traditional uses of California native plants.
“That would have been a perfect fit for a national park,” said Joel Ventresca, chair of Preserve the Presidio, a watchdog group that’s fought past Presidio developments. He likened the CIMCC to exhibits in Yosemite where visitors can learn about the lives and legacies of local tribes. “Where is that in the Presidio? It’s nowhere.”
Actually, he’s not quite right. Directly in front of Building 103, there’s an old, paint-chipped sign with faded letters that reads, “Old Burial Ground. The area immediately to the west of this marker was used by the Indians, Spaniards, and Mexicans to bury their dead — 1776–1846. The remains are now in the National Cemetery, Presidio of San Francisco.”
MICKEY MOUSE PROPOSAL
If the CIMCC had found a home in Building 103, Myers would be preparing to welcome a new next-door neighbor. The Disney Museum is the next bastion of culture vying for residence in the Presidio and it has designs on Building 104.
The proposal comes from the nonprofit Disney Family Foundation — a compendium of Walt’s family, headed by daughter Diane Disney Miller, that split from the Disney Company. Due to a curiosity about Walt Disney apparently unsatisfied by several theme parks around the world (one of which, at 47 square miles, is nearly the size of all of San Francisco), the family is looking for a place to display what remains of Disney’s personal artifacts.
Museum planners hope that by 2009 they can invite the public to view items like the Academy Awards he once won and the cars he once drove. Part of the Disney proposal includes renovating Buildings 108 and 122 as well, and the overarching plan is for office space and a reading room, gift shop, and café.
Walt Disney never lived in San Francisco, and when asked why the Disney Family Foundation selected the Presidio, trust spokesperson Polk said of the family, “They live relatively locally, in Napa. They’ve always enjoyed the Presidio and the history here.”
No agreements have been signed yet between Disney and the trust, and according to Polk the project is still subject to approval by the Presidio board. But the foundation has announced the plan on its Web site and held a celebration in November 2004, where Miller and trust staff answered questions about the project.
When the Presidio was first conceived as a national park in 1994, it was sold to the public as a “global center dedicated to the world’s most critical environmental, social, and cultural challenges.” Part of the National Park Service’s General Management Plan was to house people and organizations inspired by their unique setting to do good work for the public benefit. Then when Congress put a financial noose around the park and designed the Presidio Trust with a mandate for fiscal sustainability, that vision was blurred.
“This underlying issue of letting market forces come into play in a national park, it’s a terrible precedent,” said Presidio activist Ventresca. “People who have an important cultural story to tell are given the cold shoulder, and people with deep pockets are being given a place to build a monument to their father.” SFBG
EDITORIAL When Rep. Nancy Pelosi began peddling her plan to privatize the Presidio back in the 1990s her chief weapon was fear: If the Democrats didn’t cut a deal to let the private sector control the fate of the new national park, she argued, the Republicans who ran Congress would simply sell off the land. Then there would be no park at all.
That was a highly unlikely scenario — there was a Democrat named Bill Clinton in the White House, and it’s hard to imagine him going along with the GOP on the sale of 1,491 acres of parkland in San Francisco (part of his loyal California base). But even if that happened, we argued at the time, San Francisco wouldn’t have been helpless: The city at least could have had some zoning control over the private land.
Instead, we’ve wound up with the worst of all worlds — a park controlled by an unelected, unaccountable federal trust that’s dominated by real estate and development interests, that has already handed over big chunks of the park to the private sector (George Lucas and others), and that refuses to abide by any local land-use regulations or ordinances.
That’s the problem at the heart of the dispute over the plan to build 230 luxury condominiums and apartments on the site of the old Public Health Service Hospital Complex just off Lake Street. Neighbors want a smaller project, one more in sync with the (relatively) low density district. More important, Sup. Jake McGoldrick, who represents the area, wants to see the developer add some affordable housing to the mix.
But the Presidio Trust has no interest in affordable housing. For the Bush appointees who run the park, the only thing that matters is the bottom line. Luxury units mean more profit for the developer and more cash for the trust. The needs of San Francisco aren’t even part of the equation.
This is what Pelosi wrought, with the help of then-mayor Willie Brown and the entire old Burton Machine (along with the Sierra Club and other environmental groups), and it is the most enduring legacy she will leave behind. (See “Plundering the Presidio,” 10/8/1997.) It’s important for every activist infuriated with the arrogant behavior of the Presidio Trust to remember that — and to start mounting some real pressure on Pelosi to undo the damage and repeal the Presidio Trust Legislation. The Presidio is a national park and ought to be run by the National Park Service.
In the meantime, though, the city has no choice but to play hardball. McGoldrick was only half joking (if he was joking at all) when he suggested that the city close portions of 14th and 15th avenues — literally blocking off the only entrance to the Presidio from the Richmond, a move that would seriously damage the new development. The city can also deny water and sewer service, which would pretty much end any plans for luxury housing.
Those aren’t pretty solutions — but if the trust won’t back down and at least meet the city’s requirement for affordable housing, McGoldrick and his colleagues should pursue them. SFBG
Can the Presidio Trust afford to listen to its neighbors? If not, it may just find city officials willing to play hardball over a controversial housing project.
Look at a map of San Francisco. Look closely at the northwestern corner: there are 1,491 acres of federally owned and operated land occupying about 20 percent of the city’s space. The Presidio is a bounty of beauty — miles of hiking trails and bike paths, beaches, bluffs, and greenways maintained by the National Park Service and available for San Francisco and its guests to enjoy.
Unfortunately, the city doesn’t have much say about what happens within that acreage. The property is managed by the Presidio Trust, an independent entity formed in 1996, two years after the park service took control of the former Army base. The trust began with the lofty mission “to preserve and enhance the natural, cultural, scenic, and recreational resources of the Presidio for public use.” It also had a tough mandate: financial independence by 2013.
While the park service tends to the trees and the grass, the 768 buildings scattered throughout the property fall into the purview of the trust, which has rehabilitated and leased 350 of the historic structures in the last 10 years. More than 100 remain on the list for a makeover and one in particular has become a poster child for the strained relationship between the trust and the city in which it lives.
The trust’s Board of Directors has been presented with four development alternatives for the Presidio’s Public Health Service Hospital Complex — 400,000 square feet of dilapidated buildings high on a hill at the southern edge of the Presidio, just 100 yards from the single-family homes that line the quiet avenues north of Lake Street, in the city’s jurisdiction.
For three years, the people who live in those homes have been advocating for developing only 275,000 square feet of the PHSH for smaller units that would house about 438 people and, they say, create less traffic in the neighborhood and environmental impact on the park.
At the last public PHSH meeting on June 15, nearly 200 people representing interests as varied as the Sierra Club and the Mayor’s Office voiced opposition. There was almost universal advocacy of “Alternative 3” (see table, page 14) or some sort of smaller development more in character with the neighborhood. There are currently only five dwellings in the Richmond district with more than 50 units, and the largest has 85.
The trust staff has consistently recommended “Alternative 2,” a plan for 230 market-rate, multibedroom apartments. After three years of neighborhood input and agitation, spokesperson Dana Polk told the Guardian, “This represents a compromise.” The original plan called for 350 units but was still the same size.
To the neighbors it represents a doubling of profit for the trust and its partner in the deal, Forest City Enterprises. Claudia Lewis, president of the Richmond Presidio Neighbors, wrote in a 16-page letter addressed to the board, “The difference in revenue between Alternative 2 and 3 is only $540,000, less than 1 percent of the trust’s projected annual revenue for the year 2010. For this modest gain, the trust is willing to sacrifice the adjacent habitats and community.”
The developer’s projected revenue has leaped from $2.8 million to $6.5 million with the “downsizing,” and the trust’s cut from a 75-year lease has gone from $253 million to $685 million. Forest City, the Cleveland-based real estate developer with a net worth of $8 billion, is only willing to renovate all 400,000 square feet of the building. If another alternative were chosen by the board, trust officials say there would not be a developer interested in the project.
Development in a national park is a lot easier than in the city: There are no restrictive city codes, no process of appeal, and no profit lost in social subsidies. Developers don’t even have to build low-income housing, as the city requires of all projects through its inclusionary housing ordinance.
“They have nothing, zero, no affordable housing in there,” District 1 Sup. Jake McGoldrick told the Guardian. “It’s just more expensive, market-rate housing. I would think they would want to be in sync with what we do on the other side of the road,” he said. “They ought to really address affordable housing voluntarily, as a good neighbor gesture. There’s no reason they can’t rethink the whole thing. How much profit do you really need to turn?”
In the “Response to Comments” on the Draft Environmental Impact Statement of the project, published in May 2006, project proponents argue, “Alternative 3 is, at best, marginally feasible as a rental project because it would not generate a sufficient return to induce a developer to undertake the project.”
PHSH is one of the last remaining large-scale renovations for the Presidio, and in order for development to be financially sufficient, trust staff says, it must net the trust at least $1 million annually in base rent. “That’s why the Public Health Hospital is a key project,” said trust representative Dana Polk. “For us, this is one of the only options for that kind of revenue.”
From a strictly economic standpoint, the Presidio Trust is in the real estate business. Since its creation by Congress in 1996, it’s been fixing up property to lease for the profit necessary to operate the park. In addition to Grubb, the six other Bush-appointed members represent a wealth of experience in real estate, investment banking, law, and finance. They know how to make money but not necessarily how to build a Presidio that works well for San Francisco.
It cost $43 million to operate the Presidio in fiscal year 2004–2005 — and that’s just to keep the lights on and the doors open. In that same fiscal year, the trust received $56 million from residential and commercial rentals, with George Lucas cutting the largest rent check, for $5.6 million. After the additional revenue from PHSH, that $56 million isn’t expected to change much and, according to Presidio spokesperson Polk, certainly won’t double with the 40 percent of Presidio square footage that remains to be renovated.
Since its inception, the trust has received an annual financial allowance from the federal government as assistance while it attempts to achieve fiscal sovereignty. That amount, $19.2 million last year, will steadily decrease to zero by 2013, when the trust is scheduled to sever ties with the US Treasury. It has already exhausted the $50 million borrowing power it was also granted, so for the next seven years it only has what it can raise philanthropically or attract economically to rehabilitate the remainder of the park.
While the trust can occasionally handle retrofits and small-scale renovations, buildings like the PHSH and the cluster of barracks at Fort Scott aren’t entirely feasible as in-house projects. “If we had the capital, we’d do it ourselves,” said Polk, who explains that in most scenarios the lessee incurs the cost of renovations in lieu of rent, which also explains why that $56 million isn’t expected to grow much: Rent revenues are disappearing as favors for renovations.
None of the Presidio property can be sold. It must be leased, but if the trust isn’t raising enough revenue to finance its own public interest renovations, what kinds of development can be expected to continue? Who is willing to pony up cash for buildings they can never own? What kind of bank finances loans on property that can never be foreclosed? Only enormous real estate firms with very deep pockets such as Forest City can afford the Presidio scenario.
In the next couple weeks, McGoldrick is hoping to gather reps from the Mayor’s Office, Rep. Nancy Pelosi’s office, the California Department of Transportation, and the local Transportation Authority’s office to try and reach a compromise between what the city needs and what the trust wants.
“One of the problems is they still have an objective to get as much money out of this project as possible,” said McGoldrick. “They should pause and consider trying to get 70 or 80 percent of that $1 million. They should find some way to find the other $300,000. They should find some way to be a good neighbor.”
Otherwise, the city may have to find some way to be a bad neighbor. There’s still a threat on the table to close portions of 14th and 15th Avenues — literally locking the Presidio’s gate to the city — which would severely cripple access to the PHSH. McGoldrick, whose district abuts the southern edge of the Presidio, put forward that resolution along with Sup. Michela Alioto-Pier two years ago.
Although McGoldrick still considers it a possibility, he told us, “Let’s hope we don’t have to go there.” SFBG
EDITORIAL The attack ads started almost the moment Phil Angelides won the Democratic nomination for governor, and they’ll continue until November, funded by Gov. Arnold Schwarzenegger’s seemingly bottomless war chest and carrying a misleading message that has become the vicious refrain of right-wingers everywhere:
The Democrat wants to raise your taxes.
Let’s get this straight, just for the permanent record: Angelides is not proposing to raise taxes on anyone who makes less than $500,000 a year. That’s means the vast majority of all Californians will not face a tax hike under the economic proposals the Democratic candidate for governor has set forth. Angelides wants to do something that Democrats (and Republicans) considered perfectly reasonable public policy for more than half a century, until the wing nuts got ahold of American economic policy: He wants to make the very wealthy pay a reasonable share of the costs of society.
The philosophy here is simple: Millionaires have reaped the benefits of this society — far more so in most cases than those who are struggling at the margins. They can afford to pay a higher marginal tax rate. They’ve won huge tax cuts on the federal level and pay far less in taxes than their peers in almost every other industrialized society. Asking the top tier of the taxpayers to cough up a little more money (nowhere near as much as they did in the 1960s and 1970s, but a little bit more) to get the state’s revenue in line with its spending is hardly a radical idea.
Californians want extensive public services. Schwarzenegger’s approach to providing them is to borrow more money. That’s never a terribly good idea, and given the state of the state’s pocketbook, it’s a particularly bad idea right now.
So Angelides is actually talking fiscal sanity — but a lot of people aren’t going to get the message. The “no new taxes” mantra is so powerful that it could well be the biggest factor in the fall election — and could mean defeat for Angelides unless he moves now, aggressively, to counter it.
His campaign, which in the primary was bold on policy but thin on promoting it, ought to turn the governor’s attacks upside down. Imagine a series of ads that went like this:
Phil Angelides wants to raise taxes — on Arnold Schwarzenegger. Or: Phil Angelides wants to raise taxes — his own. Or: Phil Angelides wants to raise taxes — but not yours.
Democrats who are willing to talk seriously about economic inequality in our society get accused of waging “class warfare.” Angelides, who made a personal fortune as a real estate developer, is in an excellent position to make a national statement about how wrongheaded and dangerous that sort of attack can be. And he’s in an excellent position to start a national conversation that’s long overdue — and start it in a state that brought America the awful “tax revolt” of the 1970s.
Memo to Mr. Angelides: Don’t fear the t-word. Use it right, and it will put you in the governor’s office. SFBG
In the early days, the mayor tried to sound like a practical, hands-on executive who was ready to run San Francisco.
Mayor Gavin Newsom used his inaugural address on Jan. 8, 2004, to emphasize that he was a uniter, not a divider — and that he wanted to get things done.
"I say it’s time to start working together to find common purpose and common ground," he proclaimed. "Because I want to make this administration about solutions."
It’s a mantra he’s returned to again and again in his rhetoric on a wide range of issues, claiming a "commonsense" approach while casting "ideology" as an evil to be overcome and as the main motive driving the left-leaning majority of the San Francisco Board of Supervisors.
"Because it’s easy to be against something," Newsom said on that sunny winter day. "It’s easy to blame. It’s easy to stop…. What’s hard is to hear that maybe to come together, we need to leave behind old ideas and long-held grudges. But that’s exactly what we need to do."
But if that’s the standard, Newsom has spent the past 17 months taking the easy way.
It’s been a marked change from his first-year lovefest, when he tried to legalize same-sex marriage, reach out to Bayview–Hunters Point residents, and force big hotels to end their lockout of workers.
A Guardian review of the most significant City Hall initiatives during 2005 and 2006 — as well as interviews with more than a dozen policy experts and public interest advocates — shows that Newsom has been an obstructionist who has proposed few "solutions" to the city’s problems, and followed through on even fewer.
The Board of Supervisors, in sharp contrast, has been taking the policy lead. The majority on the district-elected board in the past year has moved a generally progressive agenda designed to preserve rental units, prevent evictions, strengthen development standards, promote car-free spaces, increase affordable housing, maintain social services, and protect city workers.
Yet many of those efforts have been blocked or significantly weakened by Newsom and his closest allies on the board: Fiona Ma, Sean Elsbernd, Michela Alioto-Pier, and Bevan Dufty. And on efforts to get tough with big business or prevent Muni service cuts and fare hikes, Newsom was able to peel off enough moderate supervisors to stop the progressives — led by Chris Daly, Tom Ammiano, and Ross Mirkarimi — at the board level.
But one thing that Newsom has proved himself unable to do in the past year is prevent progressive leaders — particularly Daly, against whom Newsom has a "long-held grudge" that has on a few recent occasions led to unsavory political tactics and alliances — from setting the public agenda for the city.
Balance of power
The Mayor’s Office and the Board of Supervisors are the two poles of power at City Hall — and generally the system gives a strong advantage to the mayor, who has far more resources at his disposal, a higher media profile, and the ability to act swiftly and decisively.
Yet over the past year, the three most progressive supervisors — along with their liberal-to-moderate colleagues Gerardo Sandoval, Jake McGoldrick, Aaron Peskin, and Sophie Maxwell — have initiated the most significant new city policies, dealing with housing, poverty, health care, alternative transportation, violence prevention, and campaign finance reform.
Most political observers and City Hall insiders mark the moment when the board majority took control of the city agenda as last summer, a point when Newsom’s honeymoon ended, progressives filled the leadership void on growth issues, problems like tenants evictions and the murder rate peaked, and Newsom was increasingly giving signs that he wasn’t focused on running the city.
"Gay marriage gave the mayor his edge and gave him cover for a long time," said Tommi Avicolli Mecca, a queer and tenants rights activist. "About a year ago that started to wear off, and his armor started to be shed."
Daly was the one supervisor who had been aggressively criticizing Newsom during that honeymoon period. To some, Daly seemed isolated and easy to dismiss — at least until August 2005, when Daly negotiated a high-profile deal with the developers of the Rincon Hill towers that extracted more low-income housing and community-benefits money than the city had ever seen from a commercial project.
The Newsom administration watched the negotiations from the sidelines. The mayor signed off on the deal, but within a couple months turned into a critic and said he regretted supporting it. Even downtown stalwarts like the public policy think tank San Francisco Planning and Urban Research Association noted the shift in power.
"I think we saw a different cut on the issue than we’ve seen before," SPUR executive director Gabriel Metcalf told us. "Chris Daly is not a NIMBY. I see Chris Daly as one of the supervisors most able to deal with physical change, and he’s not afraid of urbanism…. And he’s been granted by the rest of the board a lot of leadership in the area of land use."
SPUR and Metcalf were critical of aspects of the Daly deal, such as where the money would go. But after the deal, Newsom and his minions, like press secretary Peter Ragone, had a harder time demonizing Daly and the board (although they never stopped trying).
Around that same time, hundreds of evictions were galvanizing the community of renters — which makes up around two-thirds of city residents. Newsom tried to find some compromise on the issue, joining Peskin to convene a task force composed of tenants activists, developers, and real estate professionals, hoping that the group could find a way to prevent evictions while expanding home ownership opportunities.
"The mayor views the striking of balance between competing interests as an important approach to governing," Ragone told the Guardian after we explained the array of policy disputes this story would cover.
The task force predictably fell apart after six meetings. "The mayor was trying to find a comfortable way to get out of the issue," said Mecca, a member of the task force. But with some issues, there simply is no comfortable solution; someone’s going to be unhappy with the outcome. "When that failed," Mecca said, "there was nowhere for him to go anymore."
The San Francisco Tenants Union and its allies decided it was time to push legislation that would protect tenants, organizing an effective campaign that finally forced Newsom into a reactionary mode. The mayor wound up siding overtly with downtown interests for the first time in his mayoral tenure — and in the process, he solidified the progressive board majority.
Housing quickly became the issue that defines differences between Newsom and the board.
"The Newsom agenda has been one of gentrification," said San Francisco Tenants Union director Ted Gullicksen. The mayor and his board allies have actively opposed placing limitations on the high number of evictions (at least until the most recent condo conversion measure, which Dufty and Newsom supported, a victory tenants activists attribute to their organizing efforts), while at the same time encouraging development patterns that "bring in more high-end condominiums and saturate the market with that," Gullicksen explained.
He pointed out that those two approaches coalesce into a doubly damaging policy on the issue of converting apartments into condominiums, which usually displace low-income San Franciscans, turn an affordable rental unit into an expensive condominium, and fill the spot with a higher-income owner.
"So you really get a two-on-one transformation of the city," Gullicksen said.
Newsom’s allies don’t agree, noting that in a city where renters outnumber homeowners two to one, some loss of rental housing is acceptable. "Rather than achieve their stated goals of protecting tenants, the real result is a barrier to home ownership," Elsbernd told us, explaining his vote against all four recent tenant-protection measures.
On the development front, Gullicksen said Newsom has actively pushed policies to develop housing that’s unaffordable to most San Franciscans — as he did with his failed Workforce Housing Initiative and some of his area plans — while maintaining an overabundance of faith in free-market forces.
"He’s very much let the market have what the market wants, which is high-end luxury housing," Gullicksen said.
As a result, Mecca said, "I think we in the tenant movement have been effective at making TICs a class issue."
Affordable housing activists say there is a marked difference between Newsom and the board majority on housing.
"The Board of Supervisors is engaged in an active pursuit of land-use policy that attempts to preserve as much affordable housing, as much rental housing, as much neighborhood-serving businesses as possible," longtime housing activist Calvin Welch told us. "And the mayor is totally and completely lining up with downtown business interests."
Welch said Newsom has shown where he stands in the appointments he makes — such as that of Republican planning commissioner Michael Antonini, and his nomination of Ted Dienstfrey to run Treasure Island, which the Rules Committee recently rejected — and by the policies he supports.
Welch called Daly’s Rincon deal "precedent setting and significant." It was so significant that downtown noticed and started pushing back.
Board power really coalesced last fall. In addition to the housing and tenant issues, Ammiano brought forward a plan that would force businesses to pay for health insurance plans for their employees. That galvanized downtown and forced Newsom to finally make good on his promise to offer his own plan to deal with the uninsured — but the mayor offered only broad policy goals, and the plan itself is still being developed.
It was in this climate that many of Newsom’s big-business supporters, including Don Fisher — the Republican founder of the Gap who regularly bankrolls conservative political causes in San Francisco — demanded and received a meeting with Newsom. The December sit-down was attended by a who’s who of downtown developers and power brokers.
"That was a result of them losing their ass on Rincon Hill," Welch said of the meeting.
The upshot — according to public records and Guardian interviews with attendees — was that Newsom agreed to oppose an ordinance designed to limit how much parking could be built along with the 10,000 housing units slated for downtown. The mayor instead would support a developer-written alternative carried by Alioto-Pier.
The measure downtown opposed was originally sponsored by Daly before being taken over by Peskin. It had the strong support of Newsom’s own planning director, Dean Macris, and was approved by the Planning Commission on a 6–1 vote (only Newsom’s Republican appointee, Antonini, was opposed).
The process that led to the board’s 7–4 approval of the measure was politically crass and embarrassing for the Mayor’s Office (see “Joining the Battle,” 2/8/06), but he kept his promise and vetoed the measure. The votes of his four allies were enough to sustain the veto.
Newsom tried to save face in the ugly saga by pledging to support a nearly identical version of the measure, but with just a couple more giveaways to developers: allowing them to build more parking garages and permitting more driveways with their projects.
Political observers say the incident weakened Newsom instead of strengthening him.
"They can’t orchestrate a move. They are only acting by vetoes, and you can’t run the city by vetoes," Welch said. "He never puts anything on the line, and that’s why the board has become so emboldened."
The Newsom administration doesn’t seem to grasp how housing issues — or symbolic issues like creating car-free spaces or being wary of land schemes like the Bayview–Hunters Point redevelopment plan — shape perceptions of other issues. As Welch said, "All politics in San Francisco center around land use."
N’Tanya Lee, executive director of Coleman Advocates for Children and Youth, said the Newsom administration has done a very good job of maintaining budgetary support for programs dealing with children, youth, and their families. But advocates have relied on the leadership of progressive supervisors like Daly to push affordable housing initiatives like the $20 million budget supplemental the board initiated and approved in April.
"Our primary concern is that low- and moderate-income families are being pushed out of San Francisco," Lee told us. "We’re redefining what it means to be pro-kid and pro-family in San Francisco."
Indeed, that’s a very different approach from the so-called pro-family agenda being pushed by SFSOS and some of Newsom’s other conservative allies, who argue that keeping taxes low while keeping the streets and parks safe and clean is what families really want. But Lee worries more about ensuring that families have reasonably priced shelter.
So she and other affordable housing advocates will be watching closely this summer as the board and Newsom deal with Daly’s proposal to substantially increase the percentage of affordable housing developers must build under the city’s inclusionary-housing policy. Newsom’s downtown allies are expected to strongly oppose the plan.
Even on Newsom’s signature issue, the board has made inroads.
"In general, on the homeless issue, the supervisor who has shown the most strong and consistent leadership has been Chris Daly," said Coalition on Homelessness director Juan Prada.
Prada credits the mayor with focusing attention on the homeless issue, although he is critical of the ongoing harassment of the homeless by the Police Department and the so-called Homeward Bound program that gives homeless people one-way bus tickets out of town.
"This administration has a genuine interest in homeless issues, which the previous one didn’t have, but they’re banking too much on the Care Not Cash approach," Prada said.
Other Newsom initiatives to satisfy his downtown base of support have also fallen flat.
Robert Haaland of the city employee labor union SEIU Local 790 said Newsom has tried to reform the civil service system and privatize some city services, but has been stopped by labor and the board.
"They were trying to push a privatization agenda, and we pushed back," Haaland said, noting that Supervisor Ma’s alliance with Newsom on that issue was the reason SEIU 790 endorsed Janet Reilly over Ma in the District 12 Assembly race.
The turning point on the issue came last year, when the Newsom administration sought to privatize the security guards at the Asian Art Museum as a cost-saving measure. The effort was soundly defeated in the board’s Budget Committee.
"That was a key vote, and they lost, so I don’t think they’ll be coming back with that again," Haaland said, noting that labor has managed to win over Dufty, giving the board a veto-proof majority on privatization issues.
Who’s in charge?
Even many Newsom allies will privately grumble that Newsom isn’t engaged enough with the day-to-day politics of the city. Again and again, Newsom has seemed content to watch from the sidelines, as he did with Supervisor Mirkarimi’s proposal to create a public financing program for mayoral candidates.
"The board was out front on that, while the mayor stayed out of it until the very end," said Steven Hill, of the Center for Voting and Democracy, who was involved with the measure. And when the administration finally did weigh in, after the board had approved the plan on a veto-proof 9–2 vote, Newsom said the measure didn’t go far enough. He called for public financing for all citywide offices — but never followed up with an actual proposal.
The same has been true on police reform and violence prevention measures. Newsom promised to create a task force to look into police misconduct, to hold a blue-ribbon summit on violence prevention, and to implement a community policing system with grassroots input — and none of that has come to pass.
Then, when Daly took the lead in creating a community-based task force to develop violence prevention programs with an allocation of $10 million a year for three years — Measure A on the June ballot — Newsom and his board allies opposed the effort, arguing the money would be better spent on more cops (see “Ballot-Box Alliance,” page 19).
"He’s had bad counsel on this issue of violence all the way through," said Sharen Hewitt, who runs the Community Leadership Academy Emergency Response project. "He has not done damn near enough from his position, and neither has the board."
Hewitt worries that current city policies, particularly on housing, are leading to class polarization that could make the problems of violence worse. And while Newsom’s political allies tend to widen the class divide, she can’t bring herself to condemn the mayor: "I think he’s a nice guy and a lot smarter than people have given him credit for."
Tom Radulovich, who sits on the BART board and serves as executive director of Transportation for a Livable City (which is in the process of changing its name to Livable City), said Newsom generally hasn’t put much action behind his rhetorical support for the environment and transit-first policies.
"Everyone says they’re pro-environment," he said.
In particular, Radulovich was frustrated by Newsom’s vetoes of the downtown parking and Healthy Saturdays measures and two renter-protection measures. The four measures indicated very different agendas pursued by Newsom and the board majority.
In general, Radulovich often finds his smart-growth priorities opposed by Newsom’s allies. "The moneyed interests usually line up against livable city, good planning policies," he said. On the board, Radulovich said it’s no surprise that the three supervisors from the wealthiest parts of town — Ma, Elsbernd, and Alioto-Pier — generally vote against initiatives he supports.
"Dufty is the oddity because he represents a pretty progressive, urbane district," Radulovich said, "but he tends to vote like he’s from a more conservative district."
The recent lawsuit by the San Francisco Chamber of Commerce and the Committee of Jobs — urging more aggressive use of a voter-approved requirement that board legislation undergo a detailed economic analysis — shows that downtown is spoiling for a fight (see “Downtown’s ‘Hail Mary’ Lawsuit,” page 9). So politics in City Hall is likely to heat up.
"There is a real absence of vision and leadership in the city right now, particularly on the question of who will be able to afford to live in San Francisco 20 years from now," Mirkarimi said. "There is a disparity between Newsom hitting the right notes in what the press and public want to hear and between the policy considerations that will put those positions into effect."
But Newsom’s allies say they plan to stand firm against the ongoing effort by progressives to set the agenda.
"I think I am voting my constituency," Elsbernd said. "I’m voting District Seven and voicing a perspective of a large part of the city that the progressive majority doesn’t represent."
Newsom flack Ragone doesn’t accept most of the narratives that are laid out by activists, from last year’s flip in the balance of power to the influence of downtown and Newsom’s wealthy benefactors on his decision to veto four measures this year.
"Governing a city like San Francisco is complex. There are many areas of nuance in governing this city," Ragone said. "Everyone knows Gavin Newsom defies traditional labels. That’s not part of a broad political strategy, but just how he governs."
Yet the majority of the board seems unafraid to declare where they stand on the most divisive issues facing the city.
"The board has — really, since the 2000 election — has been pushing a progressive set of policies as it related to housing, just-taxation policies, and an array of social service provisions," Peskin said. "All come with some level of controversy, because none are free." SFBG
Back when the tsunami of condo conversions now rolling across San Francisco was but a ripple on the rental pool, local resident William Johnston didn’t know "the ins and outs of the Ellis Act."
"Now I have a Ph.D. in it," jokes Johnston, 70, about the legislation allowing landlords to get out of the rental market, which has been increasingly abused over the past decade by landlords wishing to sell their buildings in a scheme known as tenancy-in-common.
Under the TIC system, tenants share the same mortgage but live in their own unit, which they usually hope to convert to an individually owned condo. And it was a letter proposing a TIC in the 10-unit rent-controlled building where Johnston has lived for 33 years that finally got the feisty septuagenarian to start learning about the Ellis Act in detail.
"That letter scared the crap out of me," says Johnston, who was shocked when a real estate agent claimed that the one-bedroom unit, for which Johnston pays $512 a month, would fetch half a million dollars if it were converted into a condo … if only Johnston could pony up $90,000 for a down payment.
Johnston was relieved when none of his fellow tenants took his landlord’s TIC bait, but they’re all worried the landlord plans to put the building up for sale anyway. So he’s closely following the latest chapter in the Board of Supervisors’ effort to protect renters like him.
On May 9 the board gave an initial 7–3 approval to a measure that would prevent condo conversions in buildings where seniors, the disabled, the catastrophically ill, or multiple tenants have been evicted.
Three previous board efforts to help tenants have been vetoed by Mayor Gavin Newsom, so Sup. Aaron Peskin heeded input from the Mayor’s Office and amended the measure to move the cutoff date for considering evictions from Jan. 1, 1999, to May 1, 2005.
That change, and the fact that he’d been getting public pressure from renters, apparently won the support of Sup. Bevan Dufty, who had voted to uphold Newsom’s vetoes of the previous renter measures. But with Sup. Ross Mirkarimi forced to abstain because he owns a TIC, the board is still left one vote shy of being able to override a veto.
The date change could affect renters like Debra Hutzer, who is disabled by thyroid problems and whose eviction papers were filed January 2005, forcing her to move on May 13, 2006, from the rent-controlled apartment on Church Street where she’s lived for 19 years to a place where she’s already paying $250 more a month.
"It’s been very disconcerting," says Hutzer of the eviction, which one of her neighbors, Carole Fanning, may now fight. Fanning is also supposed to leave, but she’s now hired an attorney to fight for "a stay of execution" that would allow her to remain in her rent-controlled unit.
"It’s possible, since seniors, disabled, and the catastrophically ill have one year from the date their eviction notice was served, that some may yet be able to convince landlords not to proceed," Peskin board aide David Owen told us.
As for the watering down of Peskin’s original measure, Ted Gullicksen of the San Francisco Tenants Union says the alternative was to put a version backdated to November 2004 on the November ballot — a strategy that would have involved taking risks on an initiative that, even if it had passed, wouldn’t have gone into law until January 2007.
"Instead we have a measure that’s acceptable and has passed its first reading, which means tenants should be protected in another week," Gullicksen says. Peskin’s other amendment allows buildings with multiple evictions — but not those involving the elderly or disabled — to be eligible for condo conversions after 10 years. "This means those buildings get taken off the speculative real estate market," Gullicksen adds. SFBG
OPINION The MediaNews Group, which proposes to buy the San Jose Mercury News, the Contra Costa Times, the Monterey Herald, and 30 Bay Area weekly newspapers, is paying a 20 percent premium over the price McClatchy paid Knight-Ridder for those same publications less than two months ago. Antitrust regulators in the US Justice Department, who must decide whether to go to court to try to block the transaction, will want to know why.
There are two possible explanations. One is that MediaNews, which already owns or controls eight daily and three weekly newspapers in the Bay Area, thinks the deal will yield economies of scale, allowing it to operate its newly acquired properties more efficiently than Knight-Ridder was able to. Another explanation is that MediaNews’s dominance of a restructured market will enable it to raise advertising rates.
From the standpoint of antitrust, the first reason is completely benign. Antitrust regulators will be very concerned, however, if they suspect the second explanation: that MediaNews paid a premium because its competitive position in the Bay Area newspaper market — where its circulation will rise from approximately 290,000 predeal to more than 800,000 postdeal — will permit it to raise rates.
MediaNews’s share of the Bay Area daily newspaper market will be somewhere north of 65 percent if the McClatchy sale goes through as planned. While that is a high degree of market concentration — and almost certainly would have drawn a challenge from the Justice Department 20 years ago — it is likely to be seen today as inconclusive.
Why? Because these newspapers compete not only with each other but also with Craigslist, eBay, Yahoo!, Google, and numerous other Internet-based businesses (not to mention television and radio) offering help-wanted ads and real estate and auto listings, as well as display advertising.
But another aspect of the McClatchy-MediaNews deal is not so easily dismissed. I’m referring to the role of Hearst, owner of the San Francisco Chronicle, which will be MediaNews’s primary competitor in the Bay Area.
As part of the deal, Hearst will also become a MediaNews investor and partner. The questions the regulators will ask are these: Why Hearst of all possible investors? If Hearst’s only function is to be a source of investment capital for a deal between McClatchy and MediaNews, why not use other investors whose participation would raise no competitive issues at all? Why use the one company that has the resources and incentive to object to the deal and whose participation creates at least the risk of a lessening of competition?
Whatever the answer, the public is entitled to have the Justice Department or Federal Trade Commission hear it and make its own judgment. Although filings with Justice in such "pre-merger reviews" are generally confidential, let’s hope that McClatchy, MediaNews, and Hearst, which are all in the business of making information public, will elect to tell their readers what they’re telling government regulators. SFBG
Peter Scheer, a lawyer and journalist, is executive director of the California First Amendment Coalition.
Marcoa Publishing seems to be at the top of its game. The San Diego–based company bills itself as the "nation’s largest publisher of advertising-supported, local business publications."
It rarely misses an opportunity to remind prospective advertising clients and employees alike about its exclusive contract to print industry-specific guides and an annual membership directory for the San Francisco Chamber of Commerce, of which it is also a member and business partner.
In fact, Marcoa’s San Francisco offices are located just four floors below the Chamber in the heart of the Financial District, at 235 Montgomery St. But what the oldest Chamber of Commerce in the western United States may not have known is that its "exclusive publisher" is being investigated by the California Department of Industrial Relations (DIR) for possible violations of the state’s labor code.
And now the question is: Does the business community’s biggest booster have a blind spot for dubious ethics?
Paula Ceder went to work as an ad sales specialist for Marcoa’s SF office from her home in November 2004. But despite the fact that she quickly became the San Francisco office’s top seller, she realized that Marcoa had no interest in reimbursing her for business expenses. High-end salespeople regularly spend thousands of dollars a year making personal contact with their clients — money that employers generally reimburse.
It’s perfectly common, and in fact legally required, for employers to reimburse workers for such expenses. And Marcoa has even promoted the claim that it offers expense reimbursements in its job postings on Monster.com.
But by the time Ceder left Marcoa, in August 2005 — having worked much longer than many former Marcoa employees — she told the Guardian she had accrued $2,500 in reimbursable business expenses. Over that nine-month period, she didn’t meet another employee who’d received reimbursed expenses, meaning former Marcoa employees could still be awaiting thousands of dollars in compensation. Marcoa did, however, claim to offer a taxable $10 "parking bonus" for each ad contract that the sales specialists managed to sell. But even then it took her four months to get the "bonus," Ceder said. Some ad buyers can commit as much as $12,000 to a two-page spread.
"As soon as I went to work for Marcoa, it became clear that there was no program for expense reimbursement, and I was aware that that was against the law," Ceder said recently. "That was entirely different than any experience I had ever had. Had I known I was going to have that experience, I would have never gone to work for them."
Section 2802 of the state’s labor code reads: "An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer."
Believing she’d never see the money, she approached the California Labor Commission, which ruled in her favor and granted her $1,693 of the expenses in January. At the hearing, Marcoa CEO Stewart Robertson told the administrative judge he would produce the company’s policy regarding expenses. He never did.
During her tenure, Ceder had managed to squeeze a substantial raise out of Marcoa, due mostly, she said, to her top performance. But she said others weren’t so lucky.
Ceder said she concluded that the company not only failed to maintain any sort of policy regarding expenses but also seemed to systematically shortchange workers, from declining to pay simple business expenses to withholding commission payments for months on end or never making the payments at all. Salespeople often earn a percentage of each ad contract in the form of commission as an incentive to sell, which Marcoa portrayed as a significant part of its compensation package.
"My entire point for pursuing a claim for myself was not to receive my expense reimbursement back, although it’s always nice to get the money you put out," Ceder said. "My aim was twofold: One, to have the state investigate and prosecute Marcoa, so that the result of that investigation and prosecution would be an across-the-board change in Marcoa’s current noncompetitive business practices. And second, to get the Marcoa story out into the public."
Former Marcoa workers we interviewed appeared to corroborate Ceder’s claims.
Mario Sarafraz worked as a salesman at Marcoa for 13 months, but he’s worked elsewhere in sales for 17 years. He said he only "tolerated" Marcoa for so long because he liked working closely with the hotel and restaurant industries for the company’s semiannual Business Meetings and More publication.
"Everything else was a nightmare from the beginning," he said. Sarafraz claimed he never received a single commission check, and added that even in a profession where workers move on quickly, Marcoa "had an extremely high turnover rate."
Virtually everyone we talked to said the sales staff had to share two old computers and the company didn’t allow them access to the database of businesses that had purchased ads. Repeated phone calls to businesses that had already grown disenchanted with Marcoa were common, they complained.
A former office manager who asked not to be identified said she believed the Chamber was largely kept in the dark about annoyed advertisers waiting for sometimes long-delayed publication dates and embittered former Marcoa employees.
Carol Piasente, the Chamber’s vice president of communications, said the group had no comment and that the issue was a "personnel matter between Marcoa and their employees." Steve Falk, the Chamber’s CEO and a former publisher of the San Francisco Chronicle, wrote in an e-mail that he "had not heard any complaints about Marcoa" but failed to respond to follow-up questions. No one at the Chamber would confirm whether the group received annual fees from Marcoa for revenue generated from ads placed in Chamber publications.
"It was by far the most shady company I’ve ever worked for," one saleswoman, who also requested anonymity, said. "They turn and burn employees like you would not believe."
Although she too became a top seller for the company, she said she never received commission and never saw her last paycheck.
Dean Fryer, a spokesperson for the DIR’s Division of Labor Standards Enforcement, told us that agency officials pursue an investigation based on the case’s merit.
"On all cases that involve wages due employees, we’ll move forward to collect those wages," he said. "Our primary goal is to collect money due employees."
In Marcoa’s San Francisco office of 10 or so employees, sales can reach anywhere between $1 million and $3 million annually. The company also publishes industry, relocation, and real estate guides in at least four other major cities, including San Jose, Dallas, Austin, and Houston. Elsewhere, Marcoa publishes local resource guides for new trainees at 80 of the nation’s military installations, according to the company’s Web site.
Marcoa’s San Francisco publisher Bart Lally and CEO Robertson declined to respond to a series of detailed e-mail questions.
"Marcoa absolutely believes that it is in compliance with all relevant labor laws," Robertson wrote in an e-mail. "However, we are not going to provide specific responses to any of your questions."
Sarafraz insisted it’s not his nature to complain.
"As far as training and having a working system, I’ve never heard of an organization so out of place," he said. "Every organization has shortcomings. But these people just didn’t care." SFBG
One could be forgiven for staring. Oakland’s lower Telegraph Avenue on a wet, cold, windy Friday night is not a location renowned for its street parties, particularly those involving dozens of young, white hipsters happily mingling with an equal number of young African Americans, both watching an impromptu rap show.
But a street party is precisely what was happening outside the Rock Paper Scissors (RPS) Gallery, at Telegraph and 23rd Street, that night. Welcome to Art Murmur, Oakland’s very own art walk on the first Friday of every month. What started in January as an eight-gallery venture has, in a mere four months, blossomed. A dozen Oakland galleries now participate, exhibiting everything from installations featuring massively oversized pill bottles and pillboxes to traditional oil portraitures and, in the case of the Boontling Gallery, unnerving little sculptures that co-owner Mike Simpson described as "whimsical takes on decapitation."
"We want to improve the art scene in the East Bay so that people will call Oakland an artistic force to be reckoned with," the lanky Simpson told the Guardian. "Oakland has a lot of potential, and I have a lot of pride in the city…. A lot of artists who show in San Francisco are from Oakland. Why not represent where they are from?"
But jump-starting an artist-driven revival of lower Telegraph also has its potential hazards, prime among them gentrification. As San Franciscans know all too well, such revitalization carries the danger that the community will be made safe for real estate agents, developers, and urban professionals who quickly eliminate less desirable residents, i.e., the folks who were there first and the new artists’ community.
When asked about the issue, Sydney Silverstein of the RPS Collective knowingly said, "Oh, you mean artists laying the groundwork for gentrification?"
Setting the gentrification question aside for a moment, something new and very exciting is happening along Telegraph Avenue, come rain or shine.
"We want to get people to buy art that have never bought art before," nattily attired Art Murmur cofounder Theo Auer said as he sipped free wine. It is not just the young and trendy who show up — more than one gray-haired art aficionado was spotted making purchases at Boontling.
How did it all start? According to Auer, the midwife was beer. "It was after a show, and we asked each other, ‘Why doesn’t Oakland have an art walk?’ ‘How hard can it be?’" The result was a meeting last year at which RPS, Mama Buzz Café, Ego Park, 21 Grand, 33 Grand, Auto Gallery, Boontling, and the Front Gallery all chipped in money for logistics, postcards, an www.oaklandartmurmur.com Web site, and a newspaper ad.
"It’s a tight community," said Tracy Timmins, the pale-blue-eyed and enthusiastic co-owner of Auto Gallery. "We are all very supportive of each other." And that support also comes from her landlord, who is only too happy to have a group of impoverished students who want to improve the neighborhood with art.
This, of course, is what raises the specter of gentrification. History shows that the shock troops of gentrification — a Starbucks on every corner, a yuppie in every Beamer — are the artists, freaks, punks, and queers who move into marginal areas. They happily pay low rent and live in iffy areas so they can create alternative communities. But that success can sow the seeds of a community’s destruction.
What makes the Art Murmurers different from alternative communities of the past is they are well aware of how they can be a mixed blessing for neighborhoods. The night before the April Art Murmur, Murmurers held a five-hour meeting to revisit their founding principles, which include a commitment to a sustainable neighborhood as a way to prevent yuppification.
"We are trying not to alienate the current residents," Silverstein said, while noting the harsh reality of gentrification. "If this neighborhood goes to hell and becomes another Emeryville, I don’t think you can do anything about it."
Silverstein said RPS is proactively linking to, and becoming part of, the community by offering sewing classes, art classes, a community space for events, and by forging a partnership with a local high school so the collective is not just an invasive bohemian Borg.
Silverstein told us she sees more new faces at classes offered by the gallery, a statement backed by the youths of color running in and out of the gallery space. Timmins too sees a role for the galleries to provide a place for art and education for local kids, because they "are not getting it in school."
Other galleries are less clear on the concept of community and gentrification. Esteban Sabar, owner of the upscale Esteban Sabar Gallery, moved from the Castro to affordable Oakland with a grant from the city of Oakland.
"This is affordable for me," Sabar said. "It will take awhile for gentrification to happen. By putting a gallery here I will help artists and the community. I will not let anyone kick me out." But he failed to address what might happen to the poorer local residents already living there if gentrification heats up.
Perhaps Jen Loy, co-owner of Mama Buzz Café, has the most realistic take on the issue. Lower Telegraph isn’t like areas that used to have vibrant communities until they were decimated by dot-commers. She said there were few people living in the area.
"The more people, the better," Loy said. "People [who have been] living here 10 or 15 years are saying, ‘Thank you, it is great to have you here.’" Loy says businesses like a local market, a pizzeria, and the bar Cabel’s Reef all benefit from an influx of capital.
So the question is, as always, who benefits? If an area is revitalized, tax revenues go up, more people move in, and a more vibrant area ensues, but where do the artists and people who were there first go? Will they be able to create a community strong enough to resist displacement?
Or will they do what Tracy Timmins of Auto Gallery has already had to do: "As far as being pushed out, it happens," she says. "If that happens, I start again somewhere else." SFBG
It’s an old, old adage, but that doesn’t make it any less true: follow the money. And in Rep. Richard Pombo’s case, that money leads to some very interesting places, such as Abramoff, oil and Indians.
According to the nonpartisan Open Secrets website, which monitors campaign contributions, Pombo received some $10,000 from the Keep Our Majority PAC, which is supported by disgraced lobbyist Jack Abramoff. The former Capitol Hill power broker and convicted felon is also one of the six top donors to Pombo’s RICH Political Action Committee. And Pombo has received more than $500,000 in donations from Indian tribes, members and lobbyists, despite the fact that there are no Indian tribes in the 11th congressional district. Two of the tribes linked to Abramoff, the Saginaw Chippewa and the Mississippi Choctaw, have given Pombo more than $10,000.
Pombo is such a popular fellow with Washington D.C. lobbyists that he made a very special cut. In late 2005, Citizens for Responsibility and Ethics in Washington (CREW), a liberal D.C. watchdog, named Pombo as one of the 13 Most Corrupt Members of Congress: “Pombo’s ethics violations include: misuse of the franking privilege, accepting campaign contributions in return for legislative assistance, keeping family members on his campaign payroll, and misusing official resources,” the group said.
Pombo spokesman Wayne Johnson, not surprisingly, disagrees both with CREW and those alleging that such donations are an indicator of any impropriety. He asserts there was a lot of “sloppy reporting” that in the original Abramoff stories that made a lot of unsubstantiated allegations. “There are Congress members who had a relationship with Jack and Richard was not one of ‘em,” he stated. “Abramoff gave Pombo $7,000 over a number of years and that was returned as soon as Abramoff was exposed.” As far as the Indian tribes go, Johnson says they supported Pombo because he helped the tribes get federal recognition, not because of any connection with Abramoff.
But Abramoff and Indian tribes are not the only people who directly or indirectly gave Pombo scads of cash. The two largest industrial contributors to Pombo are the agricultural and real estate sectors—which makes sense given that those are the dominant industries in his area. But his third largest source of campaign funds is the oil and gas industry, which has given him $178,788 since 1989. Pombo is chair of the house Committee on Resources, which oversees those industries. Chevron Texaco alone gave him $21,500.
There are plenty of reasons for the oil giant to like Pombo. He opposed a Chinese bid to purchase Unocal — Chevron also wanted to buy Unocal – and has tried to lift the moratorium on oil drilling off the coast of California.
Early this year, investigative reporters with the Los Angeles Times uncovered two cases of what looks suspiciously like back scratching between Pombo and the extractive industries. In 1999, Pombo and Rep John Doolittle (R-Roseville) linked up to put the kibosh on a Federal Deposit Insurance Corporation investigation of Charles Hurwitz, of Maxxam lumber clear-cutting infamy, over his involvement in a collapsed Texas savings and loan company. According to the Times the legislators, both known as “protégés of [Tom] Delay” subpoenaed documents from the confidential FDIC investigation of Hurwitz and promptly published them in the Congressional Record, styming the government’s case. Hurwitz subsequently gave Pombo $1,000 and Doolittle $5,000.
Another LA Times article noted that in late 2005, just three months before Pombo inserted language into a budget bill—without debate or hearings—that would have opened public lands, including national forests, to mining operations, Washington lobbyist Duane Gibson organized a $1,000 a plate fundraiser for Pombo. Gibson is a former aide to Pombo’s House Resource Committee and is now under scrutiny in the Abramoff scandal. While the total dollar amount raised that night is unknown, the paper revealed several mining companies made donations to Pombo. Gibson, who also personally contributed $1,000, also represented some of those companies.
In 2004, Pombo wrote a letter to then Secretary of the Interior Gale Norton urging her to suspend environmental regulations that the wind-power industry opposed. He neglected to mention that his parents own a wind farm on the Altamont Pass, nor did he mention his own stake in his parent’s ranch. Although wind-farm regulation does fall under his committee, it would have been less unseemly had he acknowledged his potential conflict of interest.
In other family matters, Pombo got into hot water for trying to bill the taxpayers almost $5,000 for a two-week family RV vacation by saying it was government related business because he visited several national parks.
Pombo, like many representatives Democrat and Republican, believes in keeping it in the family. He has paid out $357,325 to his wife and brother for bookkeeping, fundraising, consulting and other services to his political activities.
Rep. George Miller (D-Vallejo/Concord) has twice written Pombo with requests that he investigate allegations of sweatshop conditions, prostitution and gambling on the Marianas Islands. No such investigation has been initiated, but readers might remember that Abramoff lobbied extensively to oppose the implementation of U.S. labor and immigration regulations in the Marianas, which are U.S. trust territories. According to Time magazine, Pombo received $8,050 from Northern Mariana islanders following a visit to the islands.
Research assistance by Erin Podlipnik
SONIC REDUCER I love the fact that whenever you leave this country, you immediately come to the discomfiting realization that … you’re such a damaged by-product of capitalist America. Case in point: Last week I gazed upon the beauteous, barren, and treeless expanses of Iceland, miles and miles of rock, scrubby grass, and mirrorlike pools of ice. Iceland in the spring is the chill, brown-white-and-blue equivalent of the Southwestern desert, austere yet fragile in the face of certain global warming, and barely containing an undercurrent of volcanic energy reminiscent of Hawaii’s Big Island. So why do I look at these moonscapes and wonder where all the people are and why there aren’t any houses, strip malls, or ski resorts out here? Why do I look at untrammeled land and see real estate?
Reykjavik: I’m here on a press trip with other media field operatives from BPM, OK!, Nylon, and Vapors, studying the club culture, seeing the sights, taking in gutfuls of fresh, fishy air by the wharf, gazing at snowcapped mountains, and perusing menus in shock. I just couldn’t help blurting a culturally insensitive, "Omigod, that’s My Little Pony!" when I saw the roast Icelandic foal with a tian of mushrooms, caramelized apples, and calvados sauce on the bill of traditional Icelandic restaurant Laekjarbrekka.
Likewise, the Icelanders probably can’t help turning those cute puffins and herb-fed lambs into meaty main courses to warm them through those long, dark winters. The real, long-haired, sweet-faced Icelandic horses turned out to be more engaging and curious than I’d ever imagined, strolling up to our group out in the wilds near Thingvellir to examine the hipsters (and hip-hoppsters) and be ooohed over. "They’re more like dogs than horses!" our Icelandair rep, Michael Raucheisen, exclaimed.
After a scrumptious Asian fusion meal at the elegant, cream-colored, deco Apotek (started with kangaroo tartare and finished off with a mistakenly ordered $125 bottle of Gallo cab; travel tip number one: Reykjavik is not the spot to sample California vino), our wild bunch was more into checking out a local strip club than settling in with a good book like Dustin Long’s charming Agatha Christie parody, Icelander (McSweeney’s), or the catalog for the National Museum of Iceland’s current photo exhibit of fishing village life in the southeast, "Raetur Runtsins" ("Roots of the Runtur"). We were more likely to price the local, ahem, pharmaceutical offerings ("$175 for a gram of coke is not cheap!" was one assessment) at the city’s nightclubs than shop for runic love charms or grandmotherly woolens.
One reason for the aforementioned vast, unpopulated expanses: There are only 300,000 people in the entire country — albeit well educated, well employed, relatively youthful, and wired. (Is it any wonder this isle has the highest concentration of broadband users in the world?) Most of the youth culture was happening in the capital, where about a third of the population lives it up, sucks down Brennivin and macerated strawberry mojitos, dances with compact little hand motions that resemble a funky elfin hand jive. I must confess that, watching Deep Dish’s Ali "Dubfire" Shirazinia skillfully work Iceland native Björk into his house mix at NASA, I’ve rarely seen more hot, seemingly straight men dancing, en masse, on the floor, on the mezzanine, in the booths, every damn where. Where did they get the energy — from a geothermal pipeline or those mischievous sprites called Julelads?
As we piled into the van to steep at the sulfur-scented but soul-soothing Blue Lagoon and study the brand-spankin’ Icelandic Idol Snorri Snorrason (I kid you not) serenading the soakers lagoonside with Jack Johnson–like tunes, I could only sit and plot my next visit — possible when Icelandair resumes its summer flights from SF in May? It’ll be too late to catch late April’s new Rite of Spring alt-jazz and folk music festival, but not for October’s Iceland Airwaves music fest (Oct. 18 through 22, www.icelandairwaves.com), where big tickets like the Flaming Lips have filled the city’s venues alongside Icelanders such as Sigur R??s. I’ll have to catch these new Icelandic rock artists:
Ampop, My Delusions (Dennis)
This trio was getting the royal hype in Reykjavik — posters were plastered everywhere. How nice to find that their jaunty yet dramatic English-language orchestral psych-rock traverses the dreamier side of Coldplay and Doves.
Mammut, Mammut (Smekkleysa)
Polished though quirky, this bass-driven, all-lady post-punk fivesome takes a bite of the Sugarcubes, Siouxsie Sioux, and the Raincoats, with plenty of all-Icelandic lyrical histrionics.
Storsveit Nix Noltes, Orkideur Havai (12 Tonar; to be released on Bubblecore)
Last glimpsed at South by Southwest’s Paw Tracks/Fat Cat showcase, these Animal Collective tourmates draw inspiration for their instrumentals from Bulgaria, Romania, Hungary, and the Balkans.
Mugison, Mugimama — Is This Monkey Music? (12 Tonar)
The Mark Linkous of Icelandic rock digs into the raw stuff on this acclaimed full-length. He also recently scored Baltasar Kormakur’s film A Little Trip to Heaven, reinterpreting the Tom Waits track of the same name.
For the real folkways, check out Raddir/Voices: Recordings of Folk Songs from the Archives of the Arni Magnusson Institute in Iceland (Smekkleysa/Arni Magnusson Institute), which includes a great booklet on the music, collected between 1903 and 1973 and revolving around Icelandic sagas and cautionary fables of monsters, ogres, and child-snatching ravens. SFBG
CH-CH-CHECK IT OUT
Anthony Hamilton, Heather Headley, and Van Hunt
Hamilton killed, from all reports, at SXSW, and we all know how good that Hunt album is. Wed/19 and Mon/24, 7:30 p.m., Paramount, 2025 Broadway, Oakl. $39–$67.75. www.ticketmaster.com
M’s and the Deathray Davies
Chicago cock-rockers meet quirk poppers. Wed/19, 8 p.m., Rickshaw Stop, 155 Fell, SF. $8. (415) 861-2011
The chairs are pushed back when this band of Tuaregs, the indigenous people from Eastern Mali, break out the guitars. Wed/19, 8 and 10 p.m. Yoshi’s, 510 Embarcadero West, Oakl. $14–$20. (510) 238-9200
The gritty girlfriend that might be the next Mary adds a late show. Fri/21, 11:30 p.m., The Grand, 1300 Van Ness, SF. $32.50. (415) 864-0815
The ensemble premieres a collaboration with Walter Kitundu, takes on a Sigur R??s number, and teams with Matmos on "For Terry Riley." Fri/21–Sat/22, 8 p.m., Yerba Buena Center for the Arts, 701 Mission, SF. $18–$35. (415) 978-ARTS
Saddle Creek’s electro-folk-pop sweetheart steps out from Azure Ray. Sat/22, 9 p.m., Cafe du Nord, 2170 Market, SF. $10. (415) 861-5016 SFBG
Frank Edward Lembi has spent nearly six decades turning San Francisco’s hot housing market into his version of the American dream, in the process creating nightmares for many struggling renters.
The aging patriarch still resides at the top of the Lembi family’s colossal accumulation of capital, Skyline Realty, also known widely as CitiApartments, the second-largest owner of rental units in San Francisco, as the company describes itself.
Skyline owns somewhere between 130 and 150 apartment buildings, hotels, and commercial properties throughout the city. Over the past few years, the company has spent tens of millions of dollars buying new properties everywhere from the Tenderloin to Russian Hill, quietly making the already controversial Skyline an even more ubiquitous force in San Francisco’s housing market.
As the Guardian has reported over the past few weeks, some Skyline tenants claim the company has developed an aggressive business strategy intended to empty newly purchased buildings of unprofitable tenants with rent control by either offering onetime buyout deals or simply frightening and coercing them until they leave.
Records from the San Francisco Department of Building Inspection also show violations of the city’s building and housing codes leading to complaints from tenants of roach and bedbug infestations and inoperable heating systems and elevators at some of the company’s properties. Such allegations have resulted in two lawsuits filed by the city and several more by tenants. Skyline also filed more eviction attempts in San Francisco Superior Court last year than any other single year during the past decade, according to a review of court records. Those cases have climbed fastest over the past four years and don’t reflect the true volume of notices to vacate that appear on tenants’ doors and are resolved before the matter appears in court.
From additional interviews and a review of publicly available records, corporate filings, and old press accounts emerges the portrait of a man, Frank Lembi, who has survived some of the darkest periods of the past few decades of American capitalism and retained his position as one of the city’s most powerful real estate moguls.
A San Francisco native, Lembi returned from serving in World War II and founded Skyline in 1947. Today he still lists the same Burlingame home address he had at least a decade ago when his longtime wife, Olga, passed away. The stark white and pea-green split-level is modest considering the wealth he’s accrued since Skyline began its ascension.
He and Olga had five children, two of whom would join Frank’s list of chief business allies. Yvonne Lembi-Detert is the president and CEO of a Skyline-affiliated company that owns a handful of posh boutique hotels. His son Walter joined the real estate business in 1969.
"I learned nepotism from my father," Frank told California Business in 1987. "He came to this country from Italy and started his children off pretty much the way I’ve started mine. It’s a way of life for us."
Frank and Walter eventually founded Continental Savings of America in 1977, a savings and loan association that propelled the family beyond the simple purchase and resale of small apartment buildings. At its peak, Continental maintained a staff of nearly 200 and more than half a billion dollars in assets. The company was making individual real estate loans of up to a million dollars by 1983.
During the ’80s and early ’90s, federal deregulation of the S&Ls encouraged a push for much more profitable, yet risky, high-interest loans and resulted in a race to the bottom. It was the era of financial scandal, and paying back federally insured depositors who had invested in failed S&Ls eventually cost taxpayers billions.
Continental began posting major losses in the ’90s as the company’s capital sank, and in 1995 the Office of Thrift Supervision (OTS) took it over, fearing insolvency. Not long beforehand, just before Continental went public, Frank stepped down as chair, owing to a conflict of interest tied to Skyline’s HomeOwners Finance Center. But Frank and Walter both remained major shareholders in the company.
It was a bad time for lenders, nonetheless, and Frank was apparently not happy. The feds had to file a restraining order against him after he allegedly threatened to plant security guards at Continental’s 250 Montgomery St. doors to "physically prevent" the confiscation of its office furniture, according to court records.
In the end, according to an OTS official we contacted, the cost to taxpayers amounted to about $22 million. But it clearly didn’t send the Lembis to the poorhouse: Since the Continental Savings collapse, Skyline Realty, along with CitiApartments, has grown to become a very lucrative focal point of the family’s enterprises.
Skyline Properties alone generated approximately $36 million in sales during the 2004 fiscal year, according to the Directory of Corporate Affiliations. But the company has founded more than 100 corporations and limited liability companies, each owning individual Skyline properties, and making it difficult to ascertain Skyline’s real annual revenue.
Its business model is not uncommon, but the complex web of affiliates has enabled the company to keep some legal liabilities aimed away from Skyline and Lembi and make sizable political contributions to various candidates and causes — nearly $40,000 since 1999 — all of it in small amounts stemming from several different entities. In one case, Skyline’s affiliates donated $20,000 on a single day to help defeat a 2002 ballot initiative designed to increase utility rates and improve the Hetch Hetchy water system.
The company has declined to answer further questions for this series, but Skyline manager David Raynal stated in response to a list of e-mail questions in early March that the company’s "plan is to restore apartment buildings to the highest standard." He wrote that Skyline supports the creation of special assessment districts that benefit those neighborhoods. "Every year we renovate many apartments, upgrade common areas, and improve neighborhoods."
Since we began publishing stories on Skyline, former employees have contacted us with tales about how the company conducts business. A onetime Skyline employee who requested anonymity said she was well aware of the company’s buyout offers to rent-controlled tenants and added that the company was "pretty heavy-handed." She also said she was encouraged to enter tenants’ units without prior notice.
"We were told we were making the community better, but we knew that was a bunch of bullshit," she said.
She added that Skyline had trouble retaining employees. High turnover rates are hardly uncommon in the real estate industry, but another former employee who also asked that his name not be revealed said Skyline’s group of hotels had similar issues.
"[Frank Lembi] is not the friendliest man in the world," he said. "Salespeople would get frustrated and move on."
Dean Preston, an attorney for the Tenderloin Housing Clinic, said he’s assisted at least 100 Skyline tenants with legal advice over the last five years.
"I deal with tenants, as well as landlords, all across the city," Preston said. "In my opinion, CitiApartments is the most abusive landlord that I deal with in my practice." *
"Show me a sane man," Jung said, "and I will cure him for you."
I saw this on a billboard on Turk Street, I think, but I didn’t catch what it was advertising. Jung’s psychotherapy practice, I guess. But that seems like a waste of money to me, Jung being dead.
"Show me a dead man," I said to Earl Butter, my passenger . . .
And . . . and . . .
"What?" said Earl Butter.
I didn’t know. Which is why I’ll never be on a billboard. I can’t complete a thought, let alone . . . um. Well, I can throw a curveball and I’m alive, so I was going to go play baseball after I dropped Butter off in the Mission.
We’d just had lunch at my new favorite Moroccan restaurant in my old favorite neighborhood, the Tenderloin. Tajine. Jones Street.
Maybe I can be on a bumper sticker.
For example: Regis lives.
I wear a ring with 86 and 99 on it. Don Adams, Barbara Feldon. Dead and alive, respectively. Over a really red, really cuminy, really good sausage sandwich with some kind of salsa or chutney or something on it, tomatoes, onions, Earl Butter informed me that there are now more people living than there are dead ($6.95).
This astounds me. And like so many things Earl Butter tells me over lunch, it changes everything. For starters, we no longer have to be afraid of zombies. We’ve got them outnumbered. Barring big bombs and/or bird flu, it’s a power play from here out. Night of the Living Dead? Not scary.
Secondly, I can’t help wondering: When they counted, which side did they put Jesus and Elvis on? Dead or alive? Because judging from some other billboards and bumper stickers I keep seeing, there seems to be some question on the one hand. I can’t remember whether or not I ever pointed it out yet in this column, which may account for some of the confusion, but . . . Jesus? He died. Look, Christians, even if the cat did "come back to life," so to speak, he died again. He’d of had to by now, or else he’d be 2,000-and-some years old. So get over it already, and get real.
And don’t worry. Yeah, they’ve got Socrates, Jesus, Elvis, Jung, and Don Adams . . . But we’ve got Regis. Everything’s going to be OK.
The chicken ($8.50) was a little dry, but the preserved lemon sauce that it was drenched in was fantastic sop for the great homemade Moroccan bread. And there were good olives and, oddly, a handful of french fries scattered artfully about the leg and the thigh, sticking up like arrows out of General Custer (dead).
This is a tiny restaurant, Tajine. Maybe just six or seven tables. Very cozy and superfriendly. Sandwiches go for seven bucks with meat, five-fifty without, and entrees range from seven to eight-fifty, except for the brochette royale, which is basically everything, lamb, chickens, and ground beef, with soup and salad for 12 bucks.
And thirdly but not leastly, all kidding aside, if we got more people now aboveground than under it, you gotta wonder at least a little, if not to distraction, what this says about our planet in terms of, you know, real estate trends and compost.
I know, I know, you’re on that already. Well, my job is poetry and poultry, not politics or theology, but has anyone suggested yet tax breaks for the childless, state-subsidized sex-change operations, and, I don’t know, the supreme naturalness, in an overpopuutf8g species, of same-sex marriages?
Damn, we’re nostalgic, ain’t we?
Well, we got Regis! Regis saves. And he lives, I know, because I just heard him on the radio. He’s pushing grape juice instead of wine. Welch’s. Blood of Regis.
Another thought occurs to me. It occurred to me awhile ago, actually, but I saved it until last, so as not to ruin everything. It’s this: that Earl Butter got his story wrong. Heard wrong, misunderstood, or even lied to me, for kicks. He’s a notorious kidder. And I’m a pretty gullible traveler. It does seem far-far-far-far-fetched, huh? People have been dying for a pretty damn long time. How can they possibly be outnumbered by the living?
Listen, I gotta go now. I have a therapy appointment, and groceries to get, and I have to do my makeup. You do the work. Look it up online, think about it, figure something out, and get back to me. *
Tues.–Wed. and Sun., noon–10 p.m.; Thurs.–Sat., noon–11 p.m.
552 Jones, SF
Takeout and catering available
Credit cards not accepted
Many lives ago, I remember standing in the back hallway of the International Hotel trying to fathom why it was that this funny, run-down place with these very sad, old, alone men had become the focal point of an enormous array of the concerted power of the state, city and business interests from across the world. And it was not easy then, and it is not easy now, because we were looking at the problem of progress, in some strange sense, and the sadness of one generation, the evils of one generation, seeking redress in another generation. Most of the residents of the I-Hotel were Filipino men who had come to work in the fields of the Central Valley, and had been refused the opportunity to bring over wives or sweethearts, had stayed perhaps too long and had lost their families, lost their wives, lost their sweethearts, lost anything except their companionship with each other, and their attachment to this funny place that they called home, that was not much of a home, but it was all that they had. And so the landowners that owned that prime piece of real estate in downtown San Francisco were being chided for taking away a precious place, which they looked upon as a rundown flophouse, from people who had been cheated of their lives by other landowners, hundreds of miles away. And if there’s any lessons to be learned, it’s the lesson that we are all connected, each to the other, and that everything we do has consequences, not only for ourselves and our immediate family and friends, the people who live in our immediate neighborhood or our city or our state, but across the world, across the century.
Member, San Francisco Board of Supervisor; former San Francisco sheriff
I think that a larger population of voters in San Francisco have begun to see — in part from the I-Hotel — that we can’t continue to Manhattanize the city without destroying our quality of life. And I think that is in part responsible for the passing of Proposition M and other efforts to control density in our city.
We just have to keep pursuing the legislative remedies to prevent the destruction of existing housing stock and replacing it with higher-density construction, and to prevent the conversion of existing low-cost housing into high-profit commercial space and so on. We’ve done some of that already, but I think we can continue to do more. One of the things we need to do is get the right person in the mayor’s office, to get the right Planning Commission in there, which is one reason I’m supporting Art Agnos, because he’s the only person in the race who supported Proposition M.
I wouldn’t let my photograph be taken knocking down a door [if I had to do it over again], because the photograph was completely misunderstood. I was knocking the door panels out of the doors, so the minimum amount of damage was done to the doors, because we were hoping we could get the tenants back in. When we started to do the eviction, the deputies from my department started to smash in the whole door and the door frame, and ruin it. And what I did was I took the sledgehammer and said no, do it like this — just knock out one door panel, and that way if the tenants can get back in, they can take one little piece of plywood and screw or nail it in over the missing door panel. So I showed them how to do it and I got photographed in the act. The photograph has been attributed that I was running around smashing down the doors in hot pursuit of the tenants, when in fact the opposite was the truth.
I think that as a result of the fact that I refused to do the eviction immediately, and then getting sent to jail and sued — I had to spend about $40,000 in 1978 out of my own pocket to defend the suit — I think we made a real effort to forestall the eviction and give the city a chance to take it over by eminent domain and save the building for the tenants. It did not work out in the end, but I’m glad that we gave it the best shot.
Executive director, North of Markert Planning Association
Well, let me just start by saying that I was there the night that it happened. It was pretty horrifying to watch people, basically, that I was paying — because I’m a taxpayer and they were police officers, paid by the city — to beat people up around me, and I saw people right in front of me have their skulls split open at taxpayers’ expense, so that this crazy person from Thailand, Supasit Mahaguna, could throw all these people out of their homes.
In retrospect, we’ve learned about the important role that nonprofit corporations can play in owning houses and there was a thing called a buy-back plan, which people thought was a scam. Today, you would think of something like a buy-back plan as just a normal way of buying residential property protection. I can’t think of any residential development ten years ago owned or operated by a nonprofit corporation. Today there are lots.
The eviction — I think people paid a very dear price for that. A number of those people are dead now, and I’m sure that the threat of that eviction didn’t help. A more recent case is 1000 Montgomery. The eviction of those people, I think, led to the death of one of the older tenants there. I think that’s one of the sad losses of things like the I-Hotel and 1000 Montgomery and all of them. I don’t think government officials pay enough attention to that when they make decisions on whether or not to let somebody do these things.
But for myself, I’d have to say that there were a number of things that I was involved in ten and 12 years ago that made me decide to do the kind of work I’m doing now. And I’d say one of the single things that had the biggest effect on me was being there that night and watching that, and saying we shouldn’t allow this to happen — that we need to all see that it never comes to this again.
State senator, third district; former member, San Francisco Board of Supervisors
To me it was an unusual episode, and I’m not sure that it was a lesson of any kind. I don’t think it’s been repeated, has it? You know, I’m a believer in property rights, so it’s a difficult issue. On the other hand, I became convinced that there was genuine justification for maintaining the hotel for those who lived there and had an attachment to it. It was a collision of property rights versus feeling sorry for people who would lose their lodgings, lodgings to which they had become accustomed and attached. If I were the property owner, I would be indignant about the way the city treated me …
the tactics that were used, and the litigation — the litigation was horrendous.
Now, the broader social issue I would characterize as preservation, obviously, of low-income housing for a minority group, the Filipinos. [But] if the city had such a robust concern, sincere concern, then the proper act for the city was to condemn the property — to take it and preserve it …
for the people who lived there. But the city was not forthright, the city did not set out to do that — the city tried to strangulate the owner into doing that, by reason of, it’s what I consider a bit cutesy a legislative move — a political move.
So what have we learned? Well, I don’t think that anything has been learned, and not simply because this is sui generis (which is the Latin term for one of a kind that lawyers often employ), but because the city doesn’t have a consistent policy for preserving this kind of living space.
Former member, San Francisco School Board, San Francisco Board of Permit Appeals
Speaking as a Filipino American, I saw an attempt to destroy a cultural link within the Filipino-American community. It was clear there was an established community living there. The use of the hotel in that general community formed a network and a lifestyle that was identifiable for older Filipino men. The access to the cheaper restaurants in Chinatown, the ability to hang out and speak their language in pool halls — this was all proposed to be destroyed in one big demolition permit. They were in a community where some of their cultural values were intact, and the only thing that kept them intact was the fact that they were close to one another.
I think those sensitivities now are clearer to the general community. I still think there are areas of Chinatown where they’re still going to have to fight this battle….
We’re seeing this: That we can’t allow people to be displaced purely in the name of bigger and better developments, and namely, bigger and better profits. With Prop. M, we’re seeing some attempts at this, and I think the first evolution of this was the I-Hotel.
As far as my sensitivites go, my thing is, through just having lived through it, this was the first time that anyone took on the developers the way they did. There have been later battles, but that was the first one that became known to everyone city-wide. If we are going to put some control on growth, we can use these lessons.
Member, I-Hotel Tenants Association
The first eviction notice was posted in December of 1968, so we’re talking about an almost 19-year battle, here. Actually, a 19-year war, because there were little battles in between. But it comes down to the city and various segments of the Chinatown community and the developer, Four Seas, arriving at an agreement on the development for that lot that would include some replacement housing — affordable, low-income replacement housing. I mean really affordable and priority for those apartments going to former tenants of the I-Hotel, and those elderly and disabled. A number of [tenants] have died since that time, so really we’re talking about maybe a dozen or 16 people who are still around to taste the benefits of this long, long war. Some justice, even though it’s late, has arrived and I would say that we finally won the war. It was a long struggle, 19 years, but people will get a chance, if they live long enough, to move in on the 20th year, which is 1988, when the construction should be completed.
It certainly wasn’t positive for the Filipino neighborhood. There are remnants of Manilatown, but to a large extent that neighborhood was destroyed. There was a lot going on there, and the I-Hotel was the heart of the community in that area. The positive thing about it was that it kept the Financial District from encroaching into Chinatown. The Filipinos and the Chinese have had a long history of living together, co-existing, and I think it was pretty much a sacrifice of the Filipino community there to make sure that Chinatown was preserved.
Fellow in urban planning, Institute for Policy Studies; lawyer for I-Hotel Tenants Association
In a sense, I think the International Hotel, the tremendous interest and support that the eviction attempt generated over so many years, was a kind of a coalescing and symbolizing of resistance to changes in San Francisco — changes being obviously the downtown corporate world taking over the neighborhoods. I think the fact that so many people came to the aid of the hotel residents, even though they weren’t successful in preventing the eviction, was pretty much a strong building block in developing what has become an extremely strong housing movement in San Francisco, one that really has become very effective in influencing candidates and people in public office, and in getting some laws passed.
So that’s one important lesson — that sometimes victories take a while, and take different forms, but all these struggles are connected. Another, I guess, is really how long it takes to get any results — the absurdity of having a totally vacant lot there for ten years, at a time when people need housing so badly. The fact that a private developer like Four Seas is able in essence to hold on and do nothing with its land when there’s so much need for housing in the Chinatown-Manilatown area says a great deal about … the relationship of city government to private developers.
Producer, “The Fall of the I-Hotel”
About the eviction night itself — and I just have a dim recollection now — I remember being very numb, and the fact that I was hiding behind a camera made it easier, because I had something between me and the event. I think I’ve spent a lot of time getting it behind me and if I haven’t seen my own film for, say, half a year it scares the hell out of me to look at the eviction again. I feel hairs standing up on the back of my neck.
What can I say about lessons? It was almost, I shouldn’t say, it was almost worth that eviction, but I mean, that’s the only thing you can get out of something like that — I mean, basically, they killed half those guys by throwing them out.
The potential for revolution in the country was still in the back of our minds in the early ’70s. And here we were trying to use the system, trying to play ball with the system, and it sort of set us up for yuppiedom. It was sort of our last hope to get something together, and we had invested 12 years or so in the struggle. There was kind of a little mass depression that stuck, and that same kind of high energy has never come back.
Attorney, San Franciscans for Reasonable Growth
In retrospect, one of the issues that we should have raised and litigated was the lack of an adequate environmental review of the project. We’ve learned a lot since then, and I don’t want to say that people that were involved at that point made a wrong decision, but in 1987 that would be one of the first issues that would be raised.
Secondarily, I think what we learned is how the physical destruction of a building makes it very hard to keep the issue alive — after a while, the hole in the ground becomes something that has to be filled, and the focus of attention drifts away. It’s really striking how when you lose the building, it’s more than just a symbol — it’s the motivating factor in people’s lives.
Organizer, San Francisco Tenants Union
They [the city] could’ve taken the building by eminent domain and they didn’t do that — they didn’t want to do that. I mean, the issue is not so much what they could do to prevent it, but why they didn’t prevent it in the first place. And that is basically because San Francisco has very little interest in preserving low-income housing. Its interest, and the interest of most of the people from San Francisco, are in getting rid of low-income housing, “cleaning up” poor neighborhoods, and turning them into nice middle-class neighborhoods, and that’s the stated goal of most city legislation — poor people aren’t what we want.
I think that probably the most important thing that came out of [the I-Hotel struggle] was that, while we don’t have a real good situation for tenants in San Francisco, I think consciousness was raised, among at least a lot of tenants about the situation which tenants are in. And I think that to a certain extent, on a national level, the elderly are getting somewhat better consideration than they did previously.
Director, Chinatown Neighborhood Improvement Resource Center
I guess the lessons of the I-Hotel have to go back to 15 and 20 years, to the genesis of the issue. I personally think the I-Hotel symbolized a lot of very key development issues — housing issues, tenant empowerment issues — that gained a national reputation back starting in the 1960s. In some respects, it highlighted many of the particular facets of the housing problem very early on: the need to maintain and preserve existing housing; the threat of commercial and downtown developments; the encroachment into the neighborhoods; the issue of foreign investment and the role that can play in development encroachment; the critical importance of tenant organizing and tenant organization with a support base in the larger community; the need for diverse ethnic, racial, sexual, lifestyle communities to work together on an issue of mutual concern — in this case, Chinese, Filipino, white, all different kinds of people supporting the I-Hotel tenants and getting involved in the issues as they evolved over the last 15 years.The I-Hotel experience has had a positive effect on these issues in San Francisco, and probably across the country. ….
It was a very critical time for the city, and this is going back to the early ’60s, with the previous United Filipino Association, the International Tenants’ Association, the whole bit. You had a lot of environmental movement activity….
I think that’s the I-Hotel’s importance, not just what happened back then. It was the whole evolution of the issue, even after the demolition, when the focus then became — well, we’ve lost the building, but the fight must continue in terms of making sure whatever is built on the site becomes new, affordable housing — not just housing but affordable housing. And it’s culminated in the most recent development plan for the project, which has gained pretty wide-spread support. I guess part of the whole recollection, reflecting back on the ’60s in general, [is that] the I-Hotel was very symbolic of the whole movement — Vietnam, everything.*
Interviews for this story were conducted by: Nicholas Anderson, Heather Bloch, Eileen Ecklund, Mark Hedin, Craig McLaughlin, Tim Redmond and Erica Spaberg.
Sometime early this spring, while most of Washington, D.C. was watching the cherry trees bloom and thinking about the impending Iran-contra hearings, a few senior administration officials began discussing a plan to help domestic steel companies shut down underutilized plants by subsidizing some of the huge costs of pension plans for the workers who would be laid off.
The officials, mostly from the Departments of Labor and Commerce, saw the plan as a pragmatic approach to a pressing economic problem. With the steel industry in serious trouble, they argued, plant closures are inevitable — and since the federal government guarantees private pension plans, some companies will simply declare bankruptcy and dump the full liability on the taxpayers. Subsidies, they argued, would be a far cheaper alternative.
But the plan elicited sharp opposition from members of the Council of Economic Advisors, who acknowledged the extent of the problem but said the proposal was inconsistent with the Reagan economic philosophy. The problem, The New York Times reported, was that “such a plan would be tantamount to an industrial policy, an approach the president has long opposed.”
For aspiring conservative politicians, the incident contained a clear message, one that may well affect the terms of the 1988 Republican presidential debate. To the right-wing thinkers who control the party’s economic agenda, the concept of a national industrial policy is still officially off-limits. In San Francisco, the ground rules are very different. All four major mayoral candidates agree that the city needs to plan for its economic future and play a firm, even aggressive role in guiding the local economy. The incumbent, Dianne Feinstein, has established a clear, highly visible — and often controversial — industrial development policy, against which the contenders could easily compare and contrast their own programs.
The mayoral race is taking place at a time when the city is undergoing tremendous economic upheaval. The giant corporations that once anchored the local economy are curtailing expansion plans, moving to the suburbs and in many cases cutting thousands of jobs from the payroll. The once-healthy municipal budget surplus is gone. The infrastructure is crumbling and city services are stressed to the breaking point.
By all rights, the people who seek to lead the city into the 1990s should present San Francisco voters with a detailed vision for the city’s economic future, and a well-developed set of policy alternatives to carry that vision out.
But with the election just three months away, that simply isn’t happening. Generally speaking, for all the serious talk of economic policy we’ve seen thus far, most of the candidates — and nearly all the reporters who cover them — might as well be sniffing cherry blossoms in Ronald Reagan’s Washington.
“San Francisco’s major challenge during the next 15 years will be to regain its stature as a national and international headquarters city. This is crucial to the city because much of its economy is tied to large and medium-sized corporations….The major source of San Francisco’s economic strength is visible in its dramatic skyline of highrise office buildings.”
—San Francisco: Its economic future
Wells Fargo Bank, June 1987
“In San Francisco, you have the phenomenon of a city losing its big-business base and its international pretensions — and getting rich in the process.”
—Joel Kotkin, Inc. Magazine, April 1987
IN MUCH OF San Francisco’s news media and political and business establishment these days, the debate — or more often, lament — starts with this premise: San Francisco is in a bitter competition with Los Angeles. At stake is the title of financial and cultural headquarters for the Western United States, the right to be called the Gateway to the Pacific Rim. And San Francisco is losing.
The premise is hard to deny. If, indeed, the two cities are fighting for that prize, San Francisco has very nearly been knocked out of the ring. Just a few short years ago, San Francisco’s Bank of America was the largest banking institution in the nation. Now, it’s third — and faltering. Last year, First Interstate — a firm from L.A. — very nearly seized control of the the company that occupies the tallest building in San Francisco. The same problems have, to a greater or lesser extent, beset the city’s other leading financial institutions. A decade ago, San Francisco was the undisputed financial center of the West Coast; today, Los Angeles banks control twice the assets of banks in San Francisco.
It doesn’t stop there. Los Angeles has a world-class modern art museum; San Francisco’s is stumbling along. The Port of San Francisco used to control almost all of the Northern California shipping trade; now it’s not even number one in the Bay Area (Oakland is). Looking for the top-rated theater and dance community west of the Rockies? San Francisco doesn’t have it; try Seattle.
Even the federal government is following the trend. A new federal building is planned for the Bay Area, but not for San Francisco. The building — and hundreds of government jobs — are going to Oakland.
In terms of a civic metaphor, consider what happened to the rock-and-roll museum. San Francisco, the birthplace of much of the country’s best and most important rock music, made a serious pitch for the museum. It went to Cleveland.
For almost 40 years — since the end of World War II — San Francisco’s political and business leaders have been hell-bent on building the Manhattan Island of the West on 49 square miles of land on the tip of the Peninsula. Downtown San Francisco was to be Wall Street of the Pacific Rim. San Mateo, Marin and the East Bay would be the suburbs, the bedroom communities for the executives and support workers who would work in tall buildings from nine to five, then head home for the evening on the bridges, freeways and an electric rail system.
If the idea was to make a few business executives, developers and real estate speculators very rich, the scheme worked well. If the idea was to build a sound, firm and lasting economic base for the city of San Francisco, one could certainly argue that it has failed.
NOT EVERYONE, however, accepts that argument. Wells Fargo’s chief economist, Joseph Wahed, freely admits he is “a die-hard optimist.” San Francisco, he agrees, has taken its share of punches. But the city’s economy is still very much on its feet, Wahed says; he’s not by any means ready to throw in the towel.
Wahed, who authored the bank’s recent report on the city’s economic future, points to some important — and undeniable — signs of vitality:
* San Francisco’s economic growth has been well above both the national and state average during the 1980s — a healthy 3.67 a year.
* Per-capita income in San Francisco is $21,000 a year, the highest of any of the nation’s 50 largest cities.
* New business starts in the city outpaced business failures by a ratio of 5-1, far better than the rest of the nation. * Unemployment in San Francisco, at 5.57, remains below national and statewide levels (see charts).
San Francisco, Wahed predicts, has a rosy economic future — as long as the city doesn’t throw up any more “obstacles to growth” — like Proposition M, the 1986 ballot measure that limits office development in the city to 475,000 square feet a year.
John Jacobs, the executive director of the San Francisco Chamber of Commerce, came to the same conclusion. In the Chamber’s annual report, issued in January, 1987, Jacobs wrote: “The year 1986 has been an amusing one, with both national and local journalists attempting to compare the incomparable — San Francisco and Los Angeles — and suggesting that somehow San Francisco is losing out in this artificially manufactured competition. Search as one might, no facts can be found to justify that assertion.”
Wahed and Jacobs have more in common than their optimism. Both seem to accept as more or less given the concept of San Francisco as the West Coast Manhattan.
Since the day Mayor Dianne Feinstein took office, she has run the city using essentially the policies and approach championed by Wahed and Jacobs. Before San Franciscans rush to elect a new mayor, they should examine those strategies to see if they make any sense. After nearly a decade under Feinstein’s leadership, is San Francisco a healthy city holding its own through a minor downturn or an economic disaster area? Are San Francisco’s economic problems purely the result of national and international factors, or has the Pacific Rim/West Coast Wall Street strategy failed? Is the economy weathering the storm because of the mayor’s policies, or despite them? And perhaps more important, will Feinstein’s policies guide the city to new and greater prosperity in the changing economy of the next decade? Or is a significant change long overdue?
The questions are clear and obvious. The answers take a bit more work.
SAN FRANCISCO’S economy is an immensely complex creature, and no single study or analysis can capture the full range of its problems and potential. But after considerable research, we’ve come to a very different conclusion than the leading sages of the city’s business community. Yes, San Francisco can have a rosy economic future — if we stop pursuing the failed policies of the past, cut our losses now and begin developing a new economic development program, one based on reality, not images — and one that will benefit a broad range of San Franciscans, not just a handful of big corporations and investors.
Our analysis of San Francisco’s economy starts at the bottom. Wells Fargo, PG&E and the Chamber see the city first and foremost as a place to do business, a market for goods and a source of labor. We see it as a community, a place where people live and work, eat and drink, shop and play.
The distinction is far more than academic. When you look at San Francisco the way Wells Fargo does, you see a booming market: 745,000 people who will spend roughly $19.1 billion on goods and services this year, up from $15.4 billion in 1980. By the year 2000, Wahed projects, that market could reach $229 billion as the population climbs to 800,000 and per-capita income hits $30,000 (in 1986 dollars), up from $18,811 in 1980. Employment has grown from 563,000 in 1980 to 569,000 in 1986. When you look at San Francisco as a place to live, you see a very different story. Perhaps more people are working in San Francisco — but fewer and fewer of them are San Franciscans. In 1970, 57.47 of the jobs in San Francisco were held by city residents, City Planning Department figures show. By 1980, that number had dropped to 50.77. Although more recent figures aren’t available, it’s almost certainly below 507 today.
Taken from a slightly different perspective, in 1970, 89.17 of the working people in San Francisco worked in the city. Ten years later, only 857 worked in the city; the rest had found jobs elsewhere.
Without question, an increase in per capita income signifies that the city is a better market. It also suggests, however, that thousands of low-income San Franciscans — those who have neither the skills nor the training for high-paying jobs — have been forced to leave the city. It comes as no surprise, for example that San Francisco is the only major city in the country to post a net loss in black residents over the past 15 years.
The displacement of lower-income residents highlights a key area in which San Francisco’s economy is badly deficient: housing. San Francisco’s housing stock simply has not kept pace with the population growth of the past five years. Between 1980 and 1984, while nearly 40,000 more people took up residence in the city, only 3,000 additional housing units were built.
Some of the new residents were immigrants who, lacking resources and glad to be in the country on any terms, crowded in large numbers into tiny apartments. Some were young, single adults, who took over apartments, homes and flats, bringing five of six people into places that once held families of three or four.
But overall, the impact of the population increase has been to place enormous pressure on the limited housing stock. Prices, not surprisingly, have soared. According to a 1985 study prepared for San Franciscans for Reasonable Growth by Sedway Cooke and Associates, the median rent for a one-bedroom apartment in 1985 was $700 a month. The residential vacancy rate was less than 17.
Housing is more than a social issue. A report released this spring by the Association of Bay Area Governments warns the entire Bay Area may face a severe housing crisis within the next two decades — and the lack of affordable housing may discourage new businesses from opening and drive existing ones away. When housing becomes too expensive, the report states, the wages employers have to pay to offset housing and transportation costs make the area an undesirable place to do business.
WAHED’S WELLS FARGO report shows a modest net employment gain in San Francisco between 1980 and 1986, from 563,000 jobs to 569,000. What the study doesn’t show is that the positive job growth statistic reflects the choice of the study period more than it reflects current trends. In the late 1970s and early 1980s, San Francisco experienced considerable job growth. By 1981, that trend was beginning to reverse.
According to a study by Massachusetts Institute of Technology researcher David Birch, San Francisco actually lost some 6,000 jobs between 1981 and 1985. The study, commissioned by the Bay Guardian, showed that the decline occurred overwhelmingly to large downtown corporations — the firms upon which the Pacific Rim strategy was and is centered. Since 1981, those firms have cost the city thousands of jobs. (See The Monsters that Ate 10,000 jobs, Bay Guardian DATE TKTKTK).
Some of the firms — B of A, for example — were victims of poor management. Some, like Southern Pacific, were caught in the merger mania of the Reagan years. Others, however, simply moved out of town. And no new giants moved in to take their places.
What drove these large employers away? Not, it would appear, a lack of office space or other regulatory “obstacles” to growth: Between 1980 and 1985, San Francisco underwent the largest building boom in its history, with more than 10 million square feet of new office space coming on line. In fact, the city now has abundant vacant space; by some estimates, the vacancy rate for downtown office buildings is between 157 and 207.
The decision to move a business into or out of a city is often very complicated. However, Birch, who has done considerable research into the issue, suggests in the April 1987 issue of Inc. magazine that the most crucial concerns are what he calls “quality of life” factors. Quality-of-life factors include things like affordable family housing for employees; easy, inexpensive transit options and good-quality recreation facilities and schools — and good-quality local government. In many cases, researchers are finding, companies that need a large supply of “back office” labor — that is, workers who do not command executive salaries — are moving to the suburbs, where people who are paid less than executive salaries can actually afford to live.
“Today the small companies, not the large corporations, are the engines of economic growth,” Birch wrote. “And more often than not, small companies are growing in places that pay attention to the public realm, even if higher taxes are needed to pay for it.”
For the past 20 years, San Francisco has allowed, even encouraged, massive new highrise office development, geared to attracting new headquarters companies and helping existing ones expand. In the process, some basic city services and public amenities — the things that make for a good quality of life — have suffered.
The most obvious example is the city’s infrastructure — the roads, sewers, bridges, transit systems and other physical facilities that literally hold a modern urban society together. A 1985 report by then-Chief Administrative Officer Roger Boas suggested that the city needed to spend more than $1 billion just to repair and replace aging and over-used infrastructure facilities. Wells Fargo’s report conceeds that that city may be spending $50 million a year too little on infrastructure maintenance.
Some of that problem, as Boas points out in his report, is due to the fact that many city facilities were built 50 or more years ago, and are simply wearing out. But wear and tear has been greatly increased by the huge growth in downtown office space — and thus daytime workplace population — that took place over the previous two decades.
To take just one example: Between 1980 and 1984, City Planning Department figures show, the number of people traveling into the financial district every day increased by more than 10,000. Nearly 2,000 of those people drove cars. In the meantime, of course, the number of riders on the city’s Municipal Railway also increased dramatically. City figures show more than 2,000 new Muni riders took buses and light rail vehicles into the financial district between 1981 and 1984. Again, city officials resist putting a specific cost figure on that increase — however, during that same period, the Muni budget increased by one-third, from $149 million to $201 million. And the amount of General Fund money the city has had to put into the Muni system to make up for operating deficits rose by some 737 — from $59 million to $102 million.
The new buildings, of course, have meant new tax revenues — between 1981 and 1986, the total assessed value of San Francisco property — the city’s tax base — increased 767, from $20.3 billion to $35.8 billion. But the cost of servicing those buildings and their occupants also increased 437, from $1.3 billion to to $1.9 billion. In 1982, San Francisco had a healthy municipal budget surplus of $153 million; by this year, it was down to virtually nothing.
The city’s general obligation bond debt — the money borrowed to pay for capital improvements — has steadily declined over the past five years, largely because the 1978 Jarvis-Gann tax initiative effectively prevented cities from selling general obligation bonds. In 1982, the city owed $220 million; as of July 1st, 1987, the debt was down to $151 million.
However, under a recent change in the Jarvis-Gann law, the city can sell general obligation bonds with the approval of two-thirds of the voters. The first such bond sale — $31 million — was approved in June, and the bonds were sold this month, raising the city’s debt to $182 million. And this November, voters will be asked to approve another $95 million in bonds, bringing the total debt to $277 million, the highest level in five years.
The city’s financial health is still fairly sound; Standard and Poor’s gives San Francisco municipal bonds a AA rating, among the best of any city in the nation. And even with the new bonds, the ratio of general obligation debt to total assessed value — considered a key indicator of health, much as a debt-to-equity ratio is for a business — is improving.
But the city’s fiscal report card is decidedly mixed. For most residents, signs of the city’s declining financial health show up not in numbers on a ledger but in declining services. Buses are more crowded and run less often. Potholes aren’t fixed. On rainy days, raw sewage still empties into the Bay. High housing costs force more people onto the streets — and the overburdened Department of Social Services can’t afford to take care of all of them.
What those signs suggest is that, in its pell-mell rush to become the Manhattan of the West, San Francisco may have poisoned its quality of life — and thus damaged the very economic climate it was ostensibly trying to create.
MAYOR DIANNE FEINSTEIN’S prescription for San Francisco’s economic problems and her blueprint for its future can be summed up in four words: More of the same. Feinstein, like Wells Fargo, PG&E and the Chamber of Commerce, is looking to create jobs and generate city revenues from the top of the economy down. Her program flies in the face of modern economic reality and virtually ignores the changes that have taken place in the city in the past five years.
Feinstein’s most visible economic development priorities have taken her east, to Washington D.C., and west, to Japan and China. In Washington, Feinstein has lobbied hard to convince the Navy to base the battleship USS Missouri in San Francisco. That, she says, will bring millions of federal dollars to the city and create thousands of new jobs.
In Asia, Feinstein has sought to entice major investors and industries to look favorably on San Francisco. She has expressed hope that she will be able to attract several major Japanese companies to set up manufacturing facilities here, thus rebuilding the city’s manufacturing base and creating jobs for blue-collar workers.
Neither, of course, involves building new downtown highrises. But both are entirely consistent with the Pacific Rim strategy — and both will probably do the city a lot more harm than good.
Feinstein’s programs represent an economic theory which has dominated San Francisco policy-making since the end of World War II. In those days, the nation’s economy was based on manufacturing — iron ore from the ground became steel, which became cars, lawn mowers and refrigerators. Raw materials were plentiful and energy was cheap.
By the early 1970s, it was clear that era was coming to a close. Energy was suddenly scarce. Resources were becoming expensive. The economy began to shift gears, looking for ways to make products that used less materials and less energy yet provided the same service to the consumer.
Today, almost everyone has heard of the “information age” — in fact, the term gets used so often that it’s begun to lose its meaning. But it describes a very real phenomenon; Paul Hawken, the author of The Next Economy, calls it “ephemeralization.” What is means is that the U.S. economy is rapidly changing from one based manufacturing goods to one based on processing information and providing services. In the years ahead, the most important raw materials will be ideas; the goal of businesses will be to provide people with useful tools that require the least possible resources to make and the least possible energy to use.
In the information age, large companies will have no need to locate in a central downtown area. The source of new jobs will not be in manufacturing — giant industrial factories will become increasingly automated, or increasingly obsolete. The highways of the nation’s commerce will be telephone lines and microwave satellite communications, not railroads and waterways.
IF SAN FRANCISCO is going to be prepared for the staggering changes the next economy will bring, we might do well to take a lesson from history — to look at how cities have survived major economic changes in the past. Jane Jacobs, the urban economist and historian, suggests some basic criteria.
Cities that have survived and prospered, Jacobs writes, have built economies from the bottom up. They have relied on a large number of small, diverse enterprises, not a few gigantic ones. And they have encouraged business activities that use local resources to replace imports, instead of looking to the outside for capital investment.
A policy that would tie the city’s economic future to the Pentagon and Japanese manufacturing companies is not only out of synch with the future of the city’s economy — it’s out of touch with the present.
In San Francisco today, the only major economic good news comes from the small business sector — from locally owned independent companies with fewer than 20 employees. All of the net new jobs in the city since 1980 have come from such businesses.
Yet, the city’s policy makers — especially the mayor — have consistently denied that fact. As recently as 1985, Feinstein announced that the only reason the city’s economy was “lively and vibrant” was that major downtown corporations were creating 10,000 new jobs a year.
Almost nothing the city has done in the past ten years has been in the interest of small business. In fact, most small business leaders seem to agree that their astounding growth has come largely despite the city’s economic policy, not because of it. That situation shows no signs of changing under the Feinstein administration; the battleship Missouri alone would force the eviction of some 190 thriving small businesses from the Hunters Point shipyard.
San Francisco’s economic problems have not all been the result of city policies. The financial health of the city’s public and private sector is affected by state and federal policies and by national and international economic trends.
Bank of America, for example, is reeling from the inability of Third World countries to repay outstanding loans. Southern Pacific and Crocker National Bank both were victims of takeovers stemming from relaxed federal merger and antitrust policies. In fact, according to Wells Fargo, 21 San Francisco corporations have been bought or merged since 1975. Meanwhile, deep cutbacks in federal and state spending have crippled the city’s ability to repair its infrastructure, improve transit services, build low cost housing and provide other essential services.
To a great extent, those are factors outside the city’s control. They are unpredictable at best — and over the next ten or 20 years, as the nation enters farther into the Information Age, the economic changes with which the city will have to cope will be massive in scale and virtually impossible to predict accurately.
Again, the experiences of the past contain a lesson for the future. On of San Francisco’s main economic weaknesses over the past five years has been its excess reliance on a small number of large corporations in a limited industrial sector — largely finance, insurance and real estate. When those industries took a beating, the shock waves staggered San Francisco.
Meanwhile, the economic good news has come from a different type of business — businesses that were small able to adapt quickly to changes in the economy and numerous and diverse enough that a blow to one industry would not demolish a huge employment base.
But instead of using city policy to encourage that sector of the city’s economy, Feinstein is proposing to bring in more of the type of business that make the city heavily vulnerable to the inevitable economic shocks that will come with the changes of the next 20 years.
THE CANDIDATES who seek to lead the city into the next decade and the next economy will need thoughtful, innovative programs to keep San Francisco from suffering serious economic problems. Those programs should start with a good hard dose of economic reality — a willingness to understand where the city’s strengths and weaknesses are — mixed with a vision for where the city ought to be ten and 20 years down the road.
Thus far, both are largely missing form the mayoral debate.
For years, San Francisco activists and small business leaders have been complaining about the lack of reliable, up-to-date information on the city’s economy and demographics. The environmental impact report on the Downtown Plan — a program adopted in 1985 — was based largely on data collected in 1980. That same data is still used in EIRs prepared by the City Planning Department, and it’s now more than seven years out of date.
In many areas, even seven-year-old data is simply unavailable. Until the Bay Guardian commissioned the Birch studies in 1985 and 1986, the city had no idea where jobs were being created. Until SFRG commissioned the Sedway-Cooke report in 1985, no accurate data existed on the city’s labor pool and the job needs of San Franciscans.
Today, a researcher who wants to know how much of the city’s business tax revenue comes from small business would face a nearly impossible task. That’s just not available. Neither are figures on how much of the city’s residential or commercial property is owned by absentee landlords who live outside the city. If San Francisco were a country, what would its balance of trade be? Do we import more than we export? Without a huge research staff and six months of work, there is no way to answer those questions.
Bruce Lilienthal, chairman of the Mayor’s Small Business Advisory Commission, argues that the city needs to spend whatever money it takes to create a centralized computerized data base — fully accessable to the public — with which such information can be processed and analyzed.
A sound economic policy would combine that sort of information with a clear vision of what sort of city San Francisco could and should become.
What would a progressive, realistic economic development platform look like? We’ve put together a few suggestions that could serve as the outline for candidates who agree with our perspective — and as an agenda for debate for candidates who don’t.
* ADEQUATE AFFORDABLE HOUSING is essential to a healthy city economy, and in the Reagan Era, cities can’t count on federal subsidies to build publicly financed developments. Progressive housing experts around the country agree that, in a city under such intense pressure as San Francisco, building new housing to keep pace with demand will not solve the crisis alone; the city needs to take action to ensure that existing housing is not driven out of the affordable range.
Economist Derek Shearer, a professor at Occidental College in Los Angeles and a former Santa Monica planning commissioner, suggests that municipalities should treat housing as a scarce public resource, and regulate it as a public utility. Rents should be controlled to allow property owners an adequate return on their investment but prevent speculative price-gouging.
Ideally, new housing — and whenever possible, existing housing — should be taken out of the private sector altogether. Traditional government housing projects have had a poor record; a better alternative is to put housing in what is commonly called a land trust.
A land trust is a private, nonprofit corporation that owns property, but allows that property to be used under certain terms and conditions. A housing trust, for example, might allow an individual or family to occupy a home or apartment at a set monthly rate, and to exercise all rights normally vested in a homeowner — except the right to sell for profit. When the occupant voluntarily vacated the property, it would revert back to the trust, and be given to another occupant. The monthly fee would be set so as to retire the cost of building the property over it’s expected life — say, 50 years. Each new occupant would thus not have to pay the interest costs on a new mortgage. That alone, experts say, could cut as much as 707 off the cost of a home or apartment.
* DEVELOPMENT DECISIONS should be made on the basis of community needs. A developer who promises to provide jobs for San Franciscans should first be required to demonstrate that the jobs offered by project will meet the needs of unemployed residents of the city. Development fees and taxes should fully and accurately reflect the additional costs the project places on city services and infrastructure.
Land use and development decisions should also be geared toward meeting the needs of small, locally owned businesses — encouraging new start-ups and aiding the expansion of existing small firms.
* ECONOMIC DEVELOPMENT programs should encourage local firms to use local resources in developing products and services that bring revenue and wealth into the city instead of sending it to outside absentee owners and that encourage economic self-sufficiency.
Cities have a wide variety of options in pursuing this sort of goal. City contracts, for example, should whenever possible favor locally owned firms and firms that employ local residents and use local resources. Instead of just encouraging sculptured towers and flagpoles on buildings, city planning policies should encourage solar panels that decrease energy imports, rooftop gardens that cut down on food imports and utilize recycled materials that otherwise would become part of the city’s garbage problem. (Using recycled materials is by no means a trivial option; if all of the aluminum thrown away each year in San Francisco were recycled, it would produce more usable aluminum than a small-to-medium sized bauxite mine.)
Other cities have found numerous ways to use creative city policies to encourage local enterprise. In Minneapolis-St. Paul, for example an economic development agency asked the U.S. Patent Office for a list of all the patents issued in the past ten years to people with addresses in the Twin Cities area. The agency contacted those people — there were about 20 — and found that all but one had never made commercial use of the patents, largely for lack of resources. With the agency as a limited partner providing venture capital, more than half the patent owners started businesses that were still growing and expanding five years later. Some of those firms had actually outgrown their urban locations and moved to larger facilities out of town — but since the Twin Cities public development agency had provided the venture capital, it remained a limited partner and the public treasury continued to reap benefits from the profits of the businesses that had left town.
* CITY RESOURCES should be used to maximize budget revenues. For example, San Francisco currently owns a major hydroelectric power generating facility at Hetch Hetchy in Yosemite National Park. A federal law still on the books requires San Francisco to use that facility to generate low-cost public power for its citizens; that law, the Raker Act, has been honored only in the breach. That means every year PG&E takes millions of dollars in profits out of San Francisco (the company is based here, but very few of its major stockholders are San Franciscans). The last time we checked, San Francisco was losing $150 million (CHECK) in city revenue by failing to enforce the Raker Act and municipalize its electric utility system.
Meanwhile, PG&E continues to use city streets and public right-of-ways for its transmission cables at a bargain-basement franchise fee passes in 1932 and never seriously challenged. Other highly profitable private entities, like Viacom cable television, use public property for private purposes and pay highly favorable rates for the right.
Those ideas should be the a starting point, not a conclusion for mayoral debates. But thus far, we’ve seen precious little consideration of the issues, much less concrete solutions, from any of the candidates.
The mayor’s race, however, is still very much open, and the candidates are sensitive to public opinion. If the voters let the candidates know that we want to hear their visions of the city’s economic future — and their plans for carrying those visions out — we may see some productive and useful discussions yet.*
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