The 1 Percent

CPMC’s new numbers threaten St. Luke’s and the mayor’s deal

Sasha Cuttler
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9

Can San Franciscans trust California Pacific Medical Center (CPMC) not to shutter St. Luke’s Hospital once the company gets what it wants from the city? And has the Mayor’s Office, in its desire to please the business community and building trades, accepted and promoted a bad deal that doesn’t adequately protect the city’s interests?

Those are some of the questions that arose Monday during a hearing on CPMC’s $2.5 billion, multi-hospital development proposal before the Board of Supervisors Land Use Committee when officials from the Mayor’s Office revealed that the development agreement they negotiated with CPMC might not be good enough to keep St. Luke’s open.

As we’ve reported, CPMC (a subsidiary of Sutter Health, a not-for-profit corporation that nonetheless has a well-earned reputation for profiteering and other bad corporate behavior) is seeking to build a 550-bed regional luxury hospital atop Cathedral Hill. In exchange, the development deal requires CPMC to rebuild St. Luke’s, a seismically unsafe hospital in the Mission District that is relied on by many low-income San Franciscans (as well as the city, which would otherwise have to shoulder more of that burden at General Hospital).

After years of stalled negotiations between CPMC and two consecutive mayors, Mayor Ed Lee announced a deal in March that would have CPMC build a smaller version of St. Luke’s (with just 80 beds) and agree to keep it open for at least 20 years as long as CPMC’s operating margins didn’t dip below 1 percent in two consecutive years.

Activists had criticized the deal as too small, too short, and without enough guarantees, but Mayor’s Office officials have consistently said they were confident it was enough to keep St. Luke’s from being shuttered. But now, based on new revenue projections offered by CPMC, even those officials have lost confidence in the deal and say it needs to be renegotiated.

“These new 2012 projections, while still showing CPMC will not breach the 1 percent margin, do not offer the same comfort level we previously had,” Ken Rich of the Mayor’s Office of Economic and Workforce Development told the committee.

The news hit like a bombshell, shaking the confidence of even supervisors who strongly supported the deal, such as Sup. Scott Wiener, who called it a “surprising, critical piece of information” and said, “It’s very, very important that this issue is quickly resolved.”

For supervisors who were already skeptical of the deal and CPMC – such as Sup. David Campos, whose District 9 includes St. Luke’s – it was further evidence that this was a bad deal that needed more work before being brought to the board. The Planning Commission has already approved the project and the full board was scheduled to consider it in just a few weeks.

“What does that say about the way the negotiation was done?” Campos told us. “How half-baked can something be? What have we done to verify the numbers that CPMC gave us? And what does this say about CPMC?…If the numbers on St. Luke’s aren’t accurate, how can we trust the rest of what they’re telling us?”

Yet during the hearing, when Campos tried to get reassurances from CPMC officials and requested that the board be allowed to review the company’s financial records, he was rebuffed and belittled by CPMC attorney Pam Duffy – who later tersely apologized for her comments after Committee Chair Eric Mar criticized them as “insulting to the board.”

Campos had questioned Rich about why the city was relying on CPMC rather than independently assessing the numbers. “Maybe if you had done an audit, you wouldn’t be in this position of being surprised by the numbers that were given to you,” Campos told Rich.

But Rich said “projections are guesses, we can’t ever guarantee that they are right,” noting that CPMC had revised its revenue estimates downward for the years after St. Luke’s would open (when it would be absorbing the high costs of construction), making its profit margin slimmer. “CPMC took a more conservative approach to forecasting the rate of increase in hospital charges as well as patient volumes in light of the greater uncertainty in health care finance,” Rich said.

So Campos asked whether the supervisors could review CPMC’s data. Rich, who has reviewed it, replied, “The conditions under which we were shown CPMC’s projections is that those are confidential.”

Campos noted that it is the board’s job to review and approval this deal to determine whether it’s in the city’s best interests, which shouldn’t simply involve trusting CPMC. “Why should the executive branch of the government see those numbers but not the legislative branch?” he asked.
“It’s really not our call,” said Rich, noting that he had no objections to the request.

But when Campos asked CPMC’s Duffy, she offered a legalistic refusal, and when Campos tried to explain his reasoning, she said, “I heard your speech a moment ago” and added, “this isn’t really a game of gotcha.”

When Campos said the board was simply exercising its due diligence over an important project. she said “nothing unusual or untoward has occurred here, and the suggestion that might be the case, I think it unfair.”

But Campos wasn’t alone in wanting more reassurance from CPMC, who supervisors, labor leaders, and community activists have criticized for its secrecy and bad faith negotiating tactics with both the city and its employee unions.

“This announcement is shocking, on a number of levels,” Board President David Chiu said at the hearing, noting that he had met with CPMC officials just days earlier and they hadn’t mentioned the new developments, instead assuring him that their operating margins were high and the deal protected St. Luke’s. “It’s not a great way to build the trust we’ll need to move this forward.”

Rich said he had learned of the new numbers 12 days earlier, drawing a rebuke from Campos and others who said the supervisors should have been notified earlier. But Rich said that he was hoping that the problem would be solved through negotiations with CPMC before the hearing, but that talks over the issue have so far been fruitless.

“We would have vastly preferred to have an agreement in hand,” Rich told the committee, reassuring the supervisors that the Mayor’s Office will not support the project until the St. Luke’s issue is resolved to its satisfaction.

But Sup. Malia Cohen criticized CPMC as an untrustworthy negotiating partner. “CPMC has an interesting corporate culture,” she said, noting that the company has repeatedly misled supervisors and community leaders, accusing it of being “disingenuous in its negotiations.”

Chiu emphasized that this is a make-or-break issue: “This is an escape clause that could allow St. Luke’s – and what St. Luke’s means to the city – to not be operational. So this is an incredibly important question.”

Campos said this latest episode only added to his suspicion that CPMC will play games with its finances to shutter St. Luke’s – whose construction must be completed before CPMC can build Cathedral Hill Hospital – once it gets the lucrative regional medical center that it really wants.

“How do we know they aren’t transferring money out of CPMC into Sutter in order to shut down St. Luke’s?” Campos said, adding that he wants to see a clear guarantee that St. Luke’s will remain open as a full-service hospital. “This deal, as far as I’m concerned, is not ready for prime time.”

Thick petition against a big project

Zelda Bronstein
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45
Thick petition against a big project

My old friend Sue Hestor stopped by my house June 24 to ask if any of my neighbors might want to sign the referendum petition on 8 Washington. She was carrying a clipboard with a document the size of a phone book attached to it. Almost 600 pages, neatly bound.

I flipped through it. Lots and lots of background documents on the project, nothing anyone’s ever going to read. But thanks to some slick moves by the developer, Simon Snellgrove, supported by his allies on the Board of Supervisors, the referendum petition has to have all of that material attached.

See, the petition seeks an election to overturn a piece of legislation. Doesn’t happen often in San Francisco, and as far as I know, it’s never been successful. State law, of course, says that you have to show people the bill you want to overturn.

But when activists in Bayview Hunters Point tried to run a referendum campaign on the area’s redevelopment plan, they lost before they even had a chance. The City Attorney’s Office ruled that each petition had to include the entire redevelopment plan, all 62 pages. Since the petitions didn’t include every single page of that plan, the signatures were rejected.

In this case, Snellgrove’s crew made sure that the final legislation approved by the supes included numerous mentions of other documents that were, in legal terms, “included by reference.” Lots of documents. And all of them had to be copied, bound and attached to every set of petitions that every circulator carries.

It’s a bear: You can’t send petitions around by mail, you can’t carry a whole stack to a big event … and it costs $18 to print and bind a set. The foes of 8 Washington will need at least 1,000 sets to get the required 28,000 signatures. That’s $18,000, just to get started.

Which would clearly appear to be a chill on the rights of the people to force a ballot referendum.

Still, they soldier on. Hestor told me she’s “fundraising like crazy” to get enough money not to pay signature-gatherers but just to print the petitions. Jon Golinger, who’s helping run the campaign, says he confident there will be more than enough copies to do the job.

So if you want to get a little exercise for your arms (don’t laugh –one petitioner is already having arm problems lugging this stuff around) and you’re interested in helping out, check out the campaign HQ at 15 Columbus or call 415-894-7008. There’s a rally Saturday/30 at 10am.

 

 

 

 

 

 

Putting 8 Washington on the ballot

Zelda Bronstein
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116
Putting 8 Washington on the ballot

The fall ballot’s going to be crowded — and one of the issues that may face a vote is the future of the 8 Washington condo complex, the waterfront multi-zillionaire housing that the city doesn’t need.

Opponents of the project have filed for a referendum on the Board of Supervisors approval, and they’re meeing Satruday June 23 at 15 Columbus at 10am to start the process of gathering signatures. It’s not easy — they need 28,000 signatures in 28 days, and this, I suspect, isn’t going to be one of those money-heavy deals with a lot of paid gatherers.

Former City Attorney Louise Renne will be there to lead off the festivities.

Me, I’d love to see this on the ballot in a high-turnout year when six supervisorial seats are up. Because it’s a great issue to discuss: Who is San Francisco building housing for, and why?

Is it ok that more than 80 percent of the people who work in San Francisco can’t afford to buy or rent a median-priced home? Is it ok that virtually all of the new housing getting constructed is out of reach to virtually all of the people who work here?

Is that in any way sustainable?

 

Gosh, we need more condos for millionaires

Zelda Bronstein
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58
Gosh, we need more condos for millionaires

I guess it’s really, really important for San Francisco to build more housing for the very rich because there’s just such a profound need for it. In fact, the demand for million-dollar condos is so high, and the supply so tight, that the folks at Rincon Tower (which is hideous) are bringing in celebrities to try to sell the last few units.

You don’t find many mid-range and affordable units sitting on the market; in fact, there’s a long waiting list and a lottery for affordable housing. Because there’s more demand than supply. On a policy level, one would think that the city would seek to match supply and demand (since the free market clearly isn’t doing it). But no: SF continues to approve housing for people who don’t need it and won’t balance that out with the level of affordable housing that IS desperately needed.

Smart.

No deal yet on business tax reform as competing measure are introduced

Sasha Cuttler
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21
No deal yet on business tax reform as competing measure are introduced

Mayor Ed Lee and his business community allies failed to reach an agreement with labor and progressives by today’s deadline for submitting fall ballot measures to the Board of Supervisors, leading progressive Sup. John Avalos to introduce a business tax reform measure that would compete with Lee’s proposal.

The Avalos measure would raise $40 million in new General Fund revenue to restore recent cuts to city services while Lee’s would essentially be revenue-neutral, although Lee did tweak the formulas to raise about $13 million in new revenue that would be dedicated to a new Affordable Housing Trust Fund, which would be created by another ballot measure that Lee was having a hard time funding in the face of business community opposition.

“I don’t believe trickle down economics works, except for the 1 percent,” Avalos told the Guardian, arguing the importance of recovering revenue that the city lost when the biggest downtown corporations sued the city in 2001 to invalidate a gross receipts tax. Both the Lee and Avalos measures would gradually convert the current payroll tax into a new version of the gross receipts tax, which is preferred by most of the business community.

So, will voters in the fall be faced with competing ballot measures? Probably not, according to the same sources from the business and progressive sides of the negotiations who told us last week that it appeared a deal was in the offing, something they still believe.

“This is the beginning of the negotiations,” said the business community source, noting that both measures won’t be approved until next month, with discussions about merging them ongoing. “I’m sure this is part of the process and they will agree on a number.”

Our labor source agreed, predicting the two sides will come to an agreement because neither side wants competing ballot measure, but noting that Lee appears to be trying to create divisions between the progressive revenue coalition and the affordable housing advocates. “That’s just positioning on their part, but it doesn’t feel like good faith bargaining,” the source said.

Mayoral Press Secretary Christine Falvey seemed to leave the door open for compromise, telling the Guardian, “The Mayor believes that to be successful, we should continue building consensus around business tax reform and that it’s important that the business community continue to be key partners in that effort.”

Lee is trying to placate an emboldened business community, which has taken a hard line position on opposing new taxes even while seeking ever more tax breaks and public subsidies. In fact, Sup. Mark Farrell had another business tax cut on today’s board agenda, cutting the payroll tax for small businesses at a cost of more than $2 million to city finances.

“I believe we need to do all we can to incentivize job growth in our small business community,” Farrell said.

Avalos said he agrees with helping small businesses – which is why both his and Lee’s business tax reform measure shifts more of the tax burden to the large corporations that have been so profitable in recent years – but that “we should not be putting a hole in the city’s budget to do so.”

In a sign of just how strong the business community has become at City Hall compared to the progressive movement that had a board majority just two years ago, the tax cuts were approved on a 10-1 vote, with only Avalos opposed.

8 Washington isn’t getting much better

Zelda Bronstein
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30
8 Washington isn’t getting much better

When the Board of Supervisors approved the environmental impact report for the most expensive condos in San Francisco history, several members of the board said they weren’t entirely happy with the project. Supervisors Christina Olague and Eric Mar both complained about the height and bulk and Olague said she wanted a parking fee.

So now the project is back, and just won approval at the Budget and Finance Commitee — with only a few minor changes. There’s no adjustment to the height and bulk, although the parking has been cut from 255 spaces to 200 and a 50-cent parking surcharge has been added. Sup. Jane Kim wants to be sure that the pool built in the new facility will be open to low-income youth.

But the city’s not getting a dime more than the $11 million in affordable housing money that developer Simon Snellgrove has already offered — despite the fact that the available financial evidence suggests Snellgrove and his partners will make more than $250 million on the deal. Sup John Avalos made clear that the city’s not getting enough out of this project.

So now it goes to the full board June 12 — and if things go according to the normal San Francisco pattern, the developer will get what he wants and the city will get screwed.

See, when you give developers the opening, they take advantage of it. When you let them over the first hurdle with and 8-3 vote, they get pretty confident that they’re going to win. So why would they compromise on more than few details? Why cut the height and bulk when you know you have the votes?

I respect what Eric Mar, Jane Kim and Christina Olague said about their votes on the EIR — but imagine if it had been a 6-5 vote? Snellgrove might have gotten the message that this wouldn’t be easy. He might be calling Olague and Mar and saying: How much less height? How much less bulk? How much more affordable housing? We might have wound up with a much better deal.

Every time — every single time — a developer presents what is supposed to be the last, best deal it’s a scam. Every time the city has said No, the developer has come back and sweetened the pot. That would have happened here, too.

But no. I predict no height and bulk adjustments, no additional affordable housing money — nothing more than what Budget and Finance already got. Which isn’t enough.

Oh, and by the way: Everyone here already knows that I oppose this project because it’s too much housing for rich people, which we don’t need in this city, and puts the city’s housing balance further out of whack. But if we’re going to sell off the waterfront for all the wrong reasons, we should at least get the best deal we can.

The battle of 8 Washington

Jesse Hawthorne Ficks
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24
The battle of 8 Washington

tredmond@sfbg.com

More than 100 people showed up May 15 to testify on a condominium development that involves only 134 units, but has become a symbol of the failure of San Francisco’s housing policy.

I didn’t count every single speaker, but it’s fair to say sentiment was about 2-1 against the 8 Washington project. Seniors, tenant advocates, and neighbors spoke of the excessive size and bulk of the complex, the precedent of upzoning the waterfront for the first time in half a century, the loss of the Golden Gateway Swim and Tennis Club — and, more important, the principle of using public land to build the most expensive condos in San Francisco history.

Ted Gullicksen, director of the San Francisco Tenants Union, calls it housing for the 1 percent, but it’s worse than that — it’s actually housing for the top half of the top half of the 1 percent, for the ultra-rich.

It is, even supervisors who voted in favor agreed, housing the city doesn’t need, catering to a population that doesn’t lack housing opportunities — and a project that puts the city even further out of compliance with its own affordable-housing goals.

And in the end, after more than seven hours of testimony, the board voted 8-3 in favor of the developer.

It was a defeat for progressive housing advocates and for Board President David Chiu — and it showed a schism on the board’s left flank that would have been unthinkable a few years ago. And it could also have significant implications for the fall supervisorial elections.

Sup. Jane Kim, usually an ally of Chiu, voted in favor of the project. Sup. Eric Mar, who almost always votes with the board’s left flank, supported it, too, as did Sup. Christina Olague, who is running for re-election in one of the city’s most progressive districts.

At the end of the night, only Sups. David Campos and John Avalos joined Chiu in attempting to derail 8 Washington.

The battle of 8 Washington isn’t over — the vote last week was to approve the environmental impact report and the conditional use permit, but the actual development agreement and rezoning of the site still requires board approval next month.

Both Mar and Olague said they were going to work with the developer to try to get the height and bulk of the 134-unit building reduced.

But a vote against the EIR or the CU would have killed the project, and the thumbs-up is a signal that opponents will have an upward struggle to change the minds of Olague, Kim, and Mar.

 

DEFINING VOTES

The 8 Washington project is one of a handful of defining votes that will happen over the next few months. The mayor’s proposal for a business tax reform that raises no new revenue, the budget, and the massive California Pacific Medical Center hospital project will force board members to take sides on controversial issues with heavy lobbying on both sides.

In fact, by some accounts, 8 Washington was a beneficiary of the much larger, more complicated — and frankly, more significant — CPMC development.

The building trades unions pushed furiously for 8 Washington, which isn’t surprising — the building trades tend to support almost anything that means jobs for their members and have often been in conflict with progressives over development. But the Hotel and Restaurant Employees Union joined the building trades and lined up the San Francisco Labor Council behind the deal.

And for progressive supervisors who are up for re-election and need union support — Olague and Mar, for example — defying the Labor Council on this one was tough. “Labor came out strong for this, and I respect that,” Olague told me. “That was a huge factor for me.”

She also said she’s not thrilled with the deal — “nobody’s jumping up and down. This was a hard one” — but she thinks she can get the developer to pay more fees, particularly for parking.

Kim isn’t facing re-election for another two years, and she told me her vote was all about the $11 million in affordable housing money that the developer will provide to the city. “I looked at the alternatives and I didn’t see anything that would provide any housing money at all,” she said. The money is enough to build perhaps 25 units of low- and moderate-income housing, and that’s a larger percentage than any other developer has offered, she said.

Which is true — although the available figures suggest that Simon Snellgrove, the lead project sponsor, could pay a lot more and still make a whopping profit. And the Council of Community Housing Organizations, which represents the city’s nonprofit affordable housing developers, didn’t support the deal and expressed serious reservations about it.

Several sources close to the lobbying effort told me that the message for the swing-vote supervisors was that labor wanted them to approve at least one of the two construction-job-creating developments. Opposing both CPMC and 8 Washington would have infuriated the unions, but by signing off on this one, the vulnerable supervisors might get a pass on turning down CMPC.

That’s an odd deal for labor, since CPMC is 10 times the size of 8 Washington and will involve far more jobs. But the nurses and operating engineers have been fighting with the health-care giant and there’s little chance that labor will close ranks behind the current hospital deal.

Labor excepted, the hearing was a classic of grassroots against astroturf. Some of the people who showed up and sat in the front row with pro-8 Washington stickers on later told us they had been paid $100 each to attend. Members of the San Francisco Planning and Urban Research Association, to which Snellgrove has donated substantial amounts of money in the past, showed up to promote the project.

 

BEHIND THE SCENES

But the real action was behind the scenes.

Among those pushing hard for the project were Chinese Chamber of Commerce consultant Rose Pak and community organizer David Ho.

Pak’s support comes after Snellgrove spent years courting the increasingly powerful Chinatown activist, who played a leading role in the effort that got Ed Lee into the Mayor’s Office. Snellgrove has traveled to China with her — and will no doubt be coughing up some money for Pak’s efforts to rebuild Chinese Hospital.

Ho was all over City Hall and was taking the point on the lobbying efforts. Right around midnight, when the final vote was approaching, he entered the board chamber and followed one of Kim’s aides, Matthias Mormino, to the rail where Mormino delivered some documents to the supervisor. Several people who observed the incident told us Ho appeared to be talking Kim in an animated fashion.

Kim told me she didn’t actually speak to Ho at that point, although she’d talked to him at other times about the project, and that “nothing he could have said would have changed anything I did at that point anyway.” Matier and Ross in the San Francisco Chronicle reported that Ho was heard outside afterward saying “don’t worry, she’s fine.”

Matier and Ross have twice mentioned that the project will benefit “Chinatown nonprofits,” but there’s nothing in any public development document to support that assertion.

Chiu told me that no Chinese community leaders called him to urge support for 8 Washington. The money that goes into the affordable housing fund could go to the Chinatown Community Development Corp., where Ho works, but it’s hardly automatic — that money will go into a city fund and can’t be earmarked for any neighborhood or organization.

CCDC director Norman Fong confirmed to me that CCDC wasn’t supporting the project. In fact, Cindy Wu, a CCDC staffer who serves on the city Planning Commission, voted against 8 Washington.

I couldn’t reach Ho to ask why he was working so hard on this deal. But one longtime political insider had a suggestion: “Sometimes it’s not about money, it’s about power. And if you want to have power, you need to win and prove you can win.”

Snellgrove will be sitting pretty if 8 Washington breaks ground. Since it’s a private deal (albeit in part on Port of San Francisco land) there’s no public record of how much money the developer stands to make. But Chiu pointed out during the meeting, and confirmed to me later by phone, that “there are only two data points we know.” One is that Snellgrow informed the Port that he expects to gross $470 million in revenue from selling the condos. The other is that construction costs are expected to come in at about $177 million. Even assuming $25 million in legal and other soft costs, that’s a huge profit margin.

And it suggests the he can well afford either to lower the heights — or, more important, to give the city a much sweeter benefits package. The affordable housing component could be tripled or quadrupled and Snellgrove’s development group would still realize far more return that even the most aggressive lenders demand.

Chiu said he’s disappointed but will continue working to improve the project. “While I was disappointed in the votes,” he said, “many of my colleagues expressed concerns about height, parking, and affordable housing fees that they can address in the upcoming project approvals.”

So what does this mean for the fall elections? It may not be a huge deal — the symbolism of 8 Washington is powerful, but if it’s built, it won’t, by itself, directly change the lives of people in Olague’s District 5 or Mar’s District 1. Certainly the vote on CPMC will have a larger, more lasting impact on the city. Labor’s support for Mar could be a huge factor, and his willingness to break with other progressives to give the building trades a favor could help him with money and organizing efforts. On the other hand, some of Olague’s opponents will use this to differentiate themselves from the incumbent. John Rizzo, who has been running in D5 for almost a year now, told me he strongly opposed 8 Washington. “It’s a clear-cut issue for me, the wrong project and a bad deal for the city.” London Breed, a challenger who is more conservative, told us: “I would not have supported this project,” she said, arguing that the zoning changes set a bad precedent for the waterfront. “There are so many reasons why it shouldn’t have happened,” she said. And while Mar is in a more centrist district, support from the left was critical in his last grassroots campaign. This won’t cost him votes against a more conservative opponent — but if it costs him enthusiasm, that could be just as bad.

Housing for the super rich approved, 8-3

Zelda Bronstein
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111
Housing for the super rich approved, 8-3

The progressive movement and the battle for housing balance and economic justice in San Francisco got walloped May 15 when eight supervisors sided with a developer who wants to build condos for the massively rich on the waterfront.

I watched it all, minus a few minutes while I was putting the kids to bed, all seven and a half hours of testimony and discussion, winding up with a series of pro-developer voters a little after midnight. It was stunning: Opponents of the project came out in droves, many of them seniors, others tenant activists and neighbors. Former City Attorney Louise Renne, who is by no means an anti-development type or any sort of economic radical, led off the arguments in favor of scrapping the environmental impact report and denying the conditional use permit that are needed for 8 Washington to move forward. They brought up so many points that by the end there was nothing more to say: This meets no housing need in San Francisco, further screws up the city’s own mandates for a mix of affordable and market-rate housing, caters to the top half of the top half of the 1 percent, is too tall and bulky for the site, offers the city too little in community benefits and is one of the great development scams of our time.

Then the other side spoke — the city planners who defended the EIR and, briefly, developer Simon Snellgrove. His supporters lined up — and almost all of them talked about the same thing: Construction jobs. I get it, we need construction jobs — but is that a justification for such a bad project? As Sup. David Chiu pointed out, “apartment construction is booming.  There are 22,000 units under construction and 50,000 more in the pipeline.”

Both sides were organized, but only one paid people to show up: At least five people seated in the front row, wearing pro-8 Washington stickers, confirmed that they’d been paid $100 each — in cash — to show up. They didn’t even speak, leaving once they realized that they were misled about the project. One source heard a construction worker say he knew nothing about the project and had been bused in from Sacramento.

And after hearing all of that, the supervisors did what they clearly had decided to do long before a word of testimony was uttered.

The vote to overturn the EIR went like this: favoring the developer were Supervisors Mark Farrell, Jane Kim, Eric Mar, Christina Olague, Malia Cohen, Carmen Chu, Sean Elsbernd and Scott Wiener. Opposing the project were Chiu, John Avalos and David Campos.

Approving the conditional use went along the same voting lines. Chiu couldn’t even get a continuance after arguing that there was no report from the budget analyst and no financial information about whether this is a good deal for the city.

That’s the lineup: Eight votes for the 1 percent. Three votes for the rest of us. I haven’t seen anything this bad in years.

Some fascinating information came out of the discussion. Chiu made clear that the developer doesn’t need the height-limit increase to make a profit off the deal. He estimated that the total sales revenue from the project would be around $470 million and construction costs about $177 million. That’s a huge profit margin, even if you add in another $25 million for upfront soft costs.

Snellgrove’s lawyer, Mary Murphy, tried to duck the financial issues, talking around in circles. Evenutally Chiu got Snellgrove to respond, and he said the costs would be higher and his profit would only be about $80 million. “The capital markets require a high return on these projects,” he said.
Still: $80 million is a lot of money. And while Snellgrove and his allies love to talk about the $11 million in affordable housing money for the city, that’s about 2.3 percent of his total revenue. Which doesn’t sound quite as juicy.

Chiu raised another good question: “Should a condo that sells for $5 million pay the same affordable housing fees as one that sells for $500,000?”
Mar, who is usually a strong progressive, was the big surprise of the night, not only voting the wrong way but teeing up softball questions for the city planners to make the project sound better. It was as if he was reading from the developer’s talking points.

In the end, he said he saw “a lot of benefits from this project,” but promised to work with the developer to advocate for “less bulk and less height.” Olague said the same thing.

But even if it’s a little smaller, this will still be a completely misalignment of housing priorities, a project entirely for the very rich. That’s not going to change.

If anything, they should push for more affordable housing money — a whole lot more. Because what we’re getting is enough for maybe 25 or 30 units, which means 80 percent of the new housing related to this project will be for multimillionaires and 20 percent for everyone else. Keep that pattern going — and there are few signs that it’s about to change — and imagine what this city will be like in 20 years.

It’s not over, not yet: The actual development agreement and the height-limit changes still have to come to the board early in June. And if the mayor signs off on it, opponents are talking serious about a ballot referendum that would be before the voters in November — just when Olague, Mar, Avalos, Campos, and Chiu will be up for re-election.

Challenging the duopoly

Jesse Hawthorne Ficks
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4

By Adam Morris

news@sfbg.com

On May 12, the Green Party held a presidential debate between Massachusetts physician and longtime progressive activist Jill Stein and comedian turned TV star turned macadamia nut farmer Roseanne Barr. The debate was moderated by Rose Aguilar, host of KALW’s Your Call, and took place at San Francisco’s historic Victoria Theater.

Outside the theater before the event, a battalion of senior-citizen canvassers collected signatures to petition Gov. Jerry Brown to take up single-payer health care. Inside, the audience steadily grew to about 100 people, nearly filling the Victoria, but still was a grim turnout for what was once the Valhalla of progressive politics in America.

The audience was primarily gray; notably absent were the 20- and 30-something Occupiers, indebted students, and underemployed ranks of America’s youth, a political class actively courted by the Green Party and its candidates.

Barr read her opening remarks straight from her laptop computer, in a hurried monotone that nevertheless reached a crescendo as she called for “an end to the system of slavery, war, and usury” in America, and pledged to “make getting food to the hungry our final cause.” Ending hunger resurfaced later in the debate, when Barr observed that the military could be used to distribute food. She also claimed that “there would be no global warming” if humans chose to get their protein from nuts rather than eating animals. This would only happen, she charged, by getting Monsanto “off the necks of small farmers.”

Cribbing lines by turn from JFK and Jesus (via Lincoln), Barr continued, “I beseech the debt creators to ask not what this country can do for them, but what they can do for this country,” and asked America to give the 1 percent a chance to be our partners and not our adversaries, “for a house divided against itself cannot stand.”

Stein’s opening statement indicted the Obama administration for adopting the policies of the Bush administration and called for a Green New Deal to reform transportation, health care, and environmental standards. Throughout the night, Stein repeatedly invoked the power of grassroots social movements witnessed across the globe, asking the audience to help her and the Greens “go viral” with their message of environmental and social reform.

Both candidates demanded vengeance on Wall Street, with Stein calling for a breakup of the banks and the establishment of public banks. Barr said that current laws allowed for the prosecuting of what she called “the biggest heist in history,” which is how she referred to the “transfer of wealth upward” of the last decade. “Everything filthy and disgusting originates right there on Wall Street,” she said, “and we want our money back.”

On the military, Stein vowed to “bring our dollars home to stop being the exploiter of the world,” and to turn the bomber factories into windmill factories for green jobs. Barr warned against the militarization of the police and the dangers of what she called the “prison-military-industrial complex,” which she said will be “holding a gun on your neighbor while your neighbor does free labor for a corporation.” Barr’s condemnation of the prison complex continued into the debate on legalization of marijuana, which Barr said would thrust the “tip of the spear into the beast” of the incarceration industry.

Stein echoed Barr’s support of legalization, leaning on her authority as a physician to proclaim that “marijuana is dangerous because it is illegal, not illegal because it is dangerous.” As a doctor, Stein also called for a real health care system involving bikeable cities and reform of the FDA to replace the current “sick-care” system favored by the major parties. Barr said that she too would “lift the curse on single payer universal health care.”

The candidates also came out strong in their support of labor reform, slamming NAFTA and suppression of workers’ rights. Stein called for “fair trade” over “free trade,” faulting the Obama administration for its recent free trade deal with a “union-destroying country” like Colombia. Barr choked up when she told the audience that she is able to “represent the people from whom I came,” quickly adding “and I’ll fight hard too—I’ve got balls bigger than anybody.” Women’s rights also drew fiery proclamations from the candidates, with Stein vowing to “resurrect the Equal Rights Amendment,” and Barr stating flatly that “patriarchy needs to go.”

The signature issue of the Green Party—the environment—was a minor if constantly underlying thread to the discussion, emerging as a topic only later in the debate. While Stein repeated Barr’s jabs at Monsanto and pledged to “deny the Keystone Pipeline on Day 1,” Barr grew solemn, acknowledging the possibility that it might be too late to save the environment from impending catastrophes. We would need to learn, she said, to create “a new system that is not money dependent.”

Both candidates broke debate protocol on time limits and turns of speech, but the atmosphere was collegial and supportive, with Barr chiming in “yeahs” to many of Stein’s remarks. Each woman repeatedly said she “agreed completely” with what the other said. “Our greatest weapon,” Barr said, is to “resist the fear they force-feed us,” linking her remarks to Stein’s claim that “the politics of fear has brought us everything we were afraid of.”

Stein railed against a mainstream press that has effectively sequestered discussion of political alternatives. “We do not have a functioning press,” she told the audience, “We have an o-press. We have a re-press.” She repeated her call for Greens to mobilize online to get the word out about alternative party movements. Barr said that she was being very careful not to bring any discredit to the Green Party. Though biting and at times sarcastic, Barr said she her campaign was “dead serious. And the message is dead serious too.”

An absolute must-read on taxes (by Stephen King)

Zelda Bronstein
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10
An absolute must-read on taxes (by Stephen King)

A lot of things drive me crazy (people making a left turn on 16th and Bryant at 5 p.m., backing up traffic for an entire block; people who get to park in the midde of the street on Sunday because the cops don’t ticket churchgoers; politicians who say “I’ll take a look at that” as a way to duck a question, dog owners who leave piles of shit in the middle of the sidewalk… don’t get me started). But one of the worst, on top of my list, is the claim that wealthy people who think the rich don’t pay enough taxes should just write the government a check.

George W. Bush loved that one. Every time taxes on the rich came up, he’d say: “If you think your taxes are too low, the IRS takes checks and money orders.” You can pay online, too.

So what’s wrong with that argument? Why doesn’t Warren Buffett just pay the taxes he thinks he ought to, and stop complaining? Because taxes don’t work that way, that’s why. And one of the best essays on this critical point just appeared on the Daily Beast. The author of this gem, called “tax me, for F@%&’s sake” is an author, Steven King, who is also part of the 1 percent, a man whose knack for telling horror stories has made him very wealthy. And he has harsh words for just about everyone who tries to get away with suggesting that high taxes ought to be voluntary:

I’ve known rich people, and why not, since I’m one of them? The majority would rather douse their dicks with lighter fluid, strike a match, and dance around singing “Disco Inferno” than pay one more cent in taxes to Uncle Sugar. It’s true that some rich folks put at least some of their tax savings into charitable contributions. My wife and I give away roughly $4 million a year to libraries, local fire departments that need updated lifesaving equipment (Jaws of Life tools are always a popular request), schools, and a scattering of organizations that underwrite the arts. Warren Buffett does the same; so does Bill Gates; so does Steven Spielberg; so do the Koch brothers; so did the late Steve Jobs. All fine as far as it goes, but it doesn’t go far enough.

What charitable 1 percenters can’t do is assume responsibility—America’s national responsibilities: the care of its sick and its poor, the education of its young, the repair of its failing infrastructure, the repayment of its staggering war debts. Charity from the rich can’t fix global warming or lower the price of gasoline by one single red penny. That kind of salvation does not come from Mark Zuckerberg or Steve Ballmer saying, “OK, I’ll write a $2 million bonus check to the IRS.” That annoying responsibility stuff comes from three words that are anathema to the Tea Partiers: United American citizenry.

More:

Most rich folks paying 28 percent taxes do not give out another 28 percent of their income to charity. Most rich folks like to keep their dough. They don’t strip their bank accounts and investment portfolios. They keep them and then pass them on to their children, their children’s children. And what they do give away is—like the monies my wife and I donate—totally at their own discretion. That’s the rich-guy philosophy in a nutshell: don’t tell us how to use our money; we’ll tell you. The Koch brothers are right-wing creepazoids, but they’re giving right-wing creepazoids. Here’s an example: 68 million fine American dollars to Deerfield Academy. Which is great for Deerfield Academy. But it won’t do squat for cleaning up the oil spill in the Gulf of Mexico, where food fish are now showing up with black lesions. It won’t pay for stronger regulations to keep BP (or some other bunch of dipshit oil drillers) from doing it again. It won’t repair the levees surrounding New Orleans. It won’t improve education in Mississippi or Alabama. But what the hell—them li’l crackers ain’t never going to go to Deerfield Academy anyway. Fuck ’em if they can’t take a joke.

He skewers the idea that giving the rich more money creates jobs (“At the risk of repeating myself, here’s what rich folks do when they get richer: they invest. A lot of those investments are overseas, thanks to the anti-American business policies of the last four administrations.”) He explains why the GOP tries so hard to defend tax cuts (“They simply idolize the rich. Don’t ask me why; I don’t get it either, since most rich people are as boring as old, dead dog shit. The Mitch McConnells and John Boehners and Eric Cantors just can’t seem to help themselves. These guys and their right-wing supporters regard deep pockets like Christy Walton and Sheldon Adelson the way little girls regard Justin Bieber … which is to say, with wide eyes, slack jaws, and the drool of adoration dripping from their chins.”) And he warns that life might not be so pretty for the uber-rich if this trend continues:

Last year during the Occupy movement, the conservatives who oppose tax equality saw the first real ripples of discontent. Their response was either Marie Antoinette (“Let them eat cake”) or Ebenezer Scrooge (“Are there no prisons? Are there no workhouses?”). Short-sighted, gentlemen. Very short-sighted. If this situation isn’t fairly addressed, last year’s protests will just be the beginning. Scrooge changed his tune after the ghosts visited him. Marie Antoinette, on the other hand, lost her head.

Think about it.

Yes, think about it: A society that gets more and more economically unequal is a society that won’t be stable for long.

 

The two defining votes of 2012

Zelda Bronstein
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38
The two defining votes of 2012

The Board of Supervisors will be facing two votes in the next couple of months that will define this board, establish the extent of the mayor’s political clout — and potentially play a decisive role in the political futures of several board members.

Oh: They’ll also have a lasting impact on the future of this city.

I’m talking about 8 Washington and CPMC — one of them the most important vote on housing policy to come along in years, the other a profound decision that will change the face of the city and alter the health-care infrastructure for decades to come.

Both projects have cleared the Planning Commission, as expected. Neither can go forward without approval from a majority of the supervisors. And there will be intense downtown lobbying on both of them.

The 8 Washington project would create what developer Simon Snellgrove calls the most expensive condos ever built in San Francisco. A piece of waterfront property would become a gated community for the very, very rich, many of whom won’t even live here most of the time. If it’s approved, the economy won’t collapse, neighborhoods won’t be destroyed — but it will make a powerful statement about the city’s housing policy. The message: We build housing for the 1 percent. We are a city that caters only to one very tiny group of people. We are willing to let the needs of the few drive our policy over the needs of the many.

Face it: There is no shortage of housing for the people who will buy Snellgrove’s condos. There’s a severe shortage of housing for most of the people who actually work in San Francisco. And the city’s housing policy is so scewed up that it’s making things worse. That’s the message of 8 Washington.

Then there’s CPMC. California Pacific Medical Center wants to put a snazzy state-of-the art new medical center on Van Ness, which is all well and good. But the giant nonprofit Sutter Health, which operates CPMC, has been openly hostile to some of the city’s demands (for housing, transit and other environmental mitigiation) and the proposal that Mayor Ed Lee has signed off on is way out of balance. There’s not anything even close to a reasonable link between jobs and housing — which will impact the entire city. You bring in a lot of new workers and don’t help build enough housing for them and everyone’s rent goes up.

CPMC also wants to radically downsize St. Luke’s Hospital, the only full-service facility on the south side of town except for the overcrowded and overloaded SF General. Health care for a sizable part of the city will suffer.

This is a very big deal, and the Chamber of Commerce is pushing hard for the supes to approve it. A lot of labor and the entire affordable housing community is against it.

So put those two votes in front of a board where the progressive majority has been very shaky of late — and where Lee will be working hard to line up six votes — and you’ve got potential political dynamite. Supervisor John Avalos told me he has serious concerns about both projects. Sup. David Campos told me he feels the same way. Sup Eric Mar is unlikely to vote for 8 Washington and unlikely to oppose the health-care workers and the progressive leaders who want to block the CPMC deal and make Sutter come back with a better offer, but some elements of labor are pushing hard for 8 Washington and Mar is up for re-election in one of the city’s swing districts.

Sup. David Chiu is against 8 Washington. I’ve called Sups. Jane Kim and Christina Olague (who was not a fan of the project when she was on the Planning Commission) but they haven’t gotten back to me. Olague is running for re-election this fall in the city’s most progressive district, one that’s right on the edge of the CPMC project site; Kim’s district is on the other edge.

You can’t really count to six on either of these projects without getting Chiu and/or Kim and/or Olague. Chiu has no progressive opposition, but if he supports the CPMC deal, someone may decide to challenge him. If Olague supports either project, it will give her opponents plenty of fodder for the fall campaign (John Rizzo, who is running against her, told me he opposes both). If Olague opposes the two projects, it’s going to be much harder for anyone to run against her from the left since she will have demonstrated that she can stand up the mayor on tough issues.

I’ll let you know if I hear more.

 

 

 

Why Wall Street loves the War on Drugs

Zelda Bronstein
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46
Why Wall Street loves the War on Drugs

The raid on Oaksterdam has just about everyone in local politics engaging in a little head-scratching: What possible reason would the Obama administration have to crack down on medical marijuana in an election year? How does it help the president, who will be facing an unsettled and angry electorate in a still-tough economy, to alienate the pot smoking liberals of the world, who were at one point among his most loyal constituents?

What a fucking idiot.

Here’s what make it worse: I don’t think anyone at Goldman Sachs talked to the White House about this, but the 1 percent clearly have a lot to gain from the drug war.

And it has nothing to do with drugs.

Let’s be logical here. There’s only one possible way to increase economic equality in this country, and it involves government intervention. With union membership at a fraction of what it once was, government is the only institution with the power these days to enforce income redistribution. The wealthy have to be forced to pay higher taxes, and that money has to be spent on public education, affordable housing, economic development, public-sector-driven job creation and other programs that are proven to narrow the wealth gap.

But that’s tricky, since the Right has done such an effective job (with the help of corrupt politicians of every stripe, including liberals) of making Americans mistrust government. How do you get people to vote for higher taxes when they think the money’s going to be wasted on pointless wars and crony contracts — and on sending federal agents to roust pot clubs?

The two factors that most accounted for the fall of economic liberalism in the 1960s were Vietnam and pot. My parents generation saw the government as the nation’s leaders who got us out of the Great Depression and won World War II. My generation saw government as the assholes who were sending us to die in Southeast Asia and putting us in jail for smoking weed. That’s why when Ronald Reagan announced that “government is not the solution, it’s the problem,” so many of my peers nodded (through the haze) and said: Right on.

There are more progressives in the Bay Area today who distrust and dislike the federal government than there were before the raids began. We’re going back to the days when “the feds” became a dirty word. And it’s undermining everything that Obama is tyring to do with the economy.

Yeah, Wall Street, which is trying to get rid of pesky regulations, loves this — if you hate the feds in Oaksterdam, it’s hard to love them at the IRS and Securities and Exchange Commission. That’s what the 1 percent relies on. And it’s working.

 

 

Awww, the poor finance industry

Zelda Bronstein
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63
Awww, the poor finance industry

It must be so awful to be a recruiter in the finance industry these days. Seems college kids just aren’t as interested in going to work for companies that crashed the U.S. economy, perpetuate the wealth gap and screw their clients. Besides, the money’s just not as good any more: The folks at Goldman Sachs only got $125,000 in bonuses last year.

I wonder if anyone’s talking about cutting their pensions. Oh, wait — their greed helped cut other people’s pensions!

Now maybe the smartest college students will think about doing something more productive for the world. Except that the ones who didn’t start out rich will have trouble with that, since they’ll graduate with about $100,000 in debt, and the only way to pay it off is to work for someplace that pays a shitload of money. So maybe Wall Street will be saved anyway.

 

 

The case against 8 Washington

Andrew Lam
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35
The case against 8 Washington

tredmond@sfbg.com

In city planning terms, it’s a fairly modest project: 134 condos, no buildings more than 12 stories tall, on a 27,000-square-foot site. It’s projected to meet the highest environmental building standards and offers new open space and pedestrian walkways. It’s near Muni, BART, and ferry lines. And the city will collect millions of dollars in new taxes from it.

But the 8 Washington project, which will come before the Planning Commission March 8, has become a flashpoint in city politics, one of the defining battles of Mayor Ed Lee’s administration — and a symbol of how the city’s housing policy has failed to keep pace with the needs of the local workforce.

Put simply, it will create the most expensive condos in city history, housing for the richest of the 1 percent on the edge of the waterfront — and will further push San Francisco toward becoming a city that caters almost entirely to the very wealthy.

So in a city where the growing divide between the 1 percent and the rest of us has become a central issue and where the lack of affordable housing is one of the top civic concerns, 8 Washington is an important test. By any rational standard, this sort of development is the last thing San Francisco needs.

But some of the best-connected lobbyists in the city are pushing it. One of the mayor’s closest allies, Chinatown powerbroker Rose Pak, is a leading advocate — and the final outcome will say a lot about city politics in the Lee administration.

There are all sorts of half-truths and misleading statements by supporters of 8 Washington. Here are the five main reasons the project shouldn’t be approved.

1. It fills no housing need. San Francisco has no shortage of housing for the very rich; the dramatic need, outlined in both regional planning documents and the city’s own General Plan, is for low- and moderate-income housing for the people who actually work in this city (see “Dollars or sense?” 9/28/10). While San Francisco is getting richer by the day, the core workforce — public employees, workers in the hotel and restaurant industry, service workers, construction and trade workers, and a majority of the people in the lower levels of the finance and tech sector — are being priced out of the city. That means more people working here and living far out of town, often commuting by car, in what everyone agrees is an unsustainable situation. Meanwhile, more and more high-paid workers from Silicon Valley are living in San Francisco — again, commuting to distant jobs, either by car or by corporate bus.

The city’s General Plan states that some 60 percent of all new housing built in the city should be below market rate. San Francisco desperately needs housing for its workforce. This type of project simply puts the city deeper in the hole and further from its housing goals.

2. It’s a reward for bad actors. The main developer of this project is Simon Snellgrove, but one of his partners is, by necessity, Golden Gateway, which owns a significant part of the land — and which has been flouting at least the spirit if not the letter of city and state law and costing San Francisco tens of millions of dollars.

As project opponent Brad Paul has noted in written testimony, when Timothy Foo, the current owner, bought the complex from Perini Corp. about 20 years ago, he used a loophole in state law that allowed him to avoid a formal transfer of ownership. That means the property wasn’t re-assessed, costing the city about $1.5 million a year. According to the Assessor’s Office, the deal wasn’t illegal (and these tricks to avoid reassessment are relatively common) but still: He’s costing the city millions by using a loophole not available to most people.

Golden Gateway, which was built in a redevelopment area as middle-class housing, is now renting out apartments as short-term tourist or corporate rentals. There are dozens of examples right now on Craigslist. City law bars the owners of rental housing from converting it to hotel rooms, but a loophole in that law makes what Foo’s outfit is doing technically legal. But he’s clearly violating the spirit of the city ordinance that seeks to protect rental housing from hotel conversions.

One of the main aesthetic complaints about the area — something Snellgrove’s lobbyists have tried to use to support the project — is the ugly fence that now surrounds the Golden Gateway Tennis and Swim Club. But who do you suppose put that fence there?

Do we as a city want to be giving special zoning benefits to companies that try to circumvent tax and housing laws?

3. It’s an environmental disaster. Snellgrove and his architects, Skidmore Owning and Merrill, are seeking LEED platinum certification for the project, saying that its energy-efficiency, water use, and green building materials will make it one of the most sustainable structures in San Francisco. It is, the project website notes, close to all types of public transit.

But LEED doesn’t take into account what the building is used for (see “Is LEED really green,” 7/5/11) — and in this case, the use makes a huge amount of difference.

People who buy multi-million-dollar condos don’t tend to take Muni or BART when they go places. That’s not conjecture, it’s a proven fact. A 2008 study by the American Public Transportation Association notes, bluntly, that wealthier people are more likely to drive cars. When you move into the stratospheric regions of the ultra-rich, that’s even more true. A 2011 report on the Charting Transport website notes: “The very rich tend to shun public transport.”

The current zoning in the area allows for one parking space for every four residential units. Snellgrove is asking for one space per unit — in other words, he figures every single buyer will have a car.

Many of the people who buy these condos won’t be working or even living most of the time in San Francisco. These are condos for world travelers, second and third homes for people who want to spend a few weeks a year in San Francisco. “They aren’t going to be living here all year,” Christina Olague, a former Planning Commission member who is now the District 5 supervisor, told us last July.

If five of the 165 residents of 8 Washington fly in a private or corporate jet from, say, New York to their SF pad once a month, the project will cause the use of jet fuel equivalent to what a normal family would use driving a car for 330 years, Paul noted.

“How many solar panels are needed compensate for burning 396,000 gallons of jet fuel a year?” he asked.

Then there’s the construction issue. If the developer’s projections are correct, as many as 20,000 dump truck runs will be trundling along the Embarcadero for several months, one every two minutes — and it could be happening right as the traffic nightmare called the America’s Cup is hitting the waterfront.

It also goes against some 40 years of waterfront planning policy, all of which as focused on downzoning and creating open space. This would be the first upzoning of San Francisco waterfront property in decades.

4. It will wipe out what is mostly a middle-class recreation facility. The Golden Gateway Tennis and Swim Club will be closed for three years, then (possibly) reopened later as a smaller facility. The club — with two outdoor pools and six tennis courts — sounds like something for the elite, and it’s managed by the upscale Bay Club, but a lot of the users are longtime Golden Gateway residents and seniors. “I would say 30 or 35 percent of the users are seniors,” Lee Radner, chair of Friends of Golden Gateway, told me. Most, he said, are middle-class people, and the expense isn’t that high. “My wife and I pay $3 a day to use the pool,” he said. “I swim every day, and it would cost more than that to use the public pools in the city.” He added: “There are some wealthier people, of course, but many of us are retired and on fixed incomes.”

We’re talking about 90,000 total square feet of outdoor recreation space — which dwarfs the 20,000 square feet of open space the developer promised to provide.

5. The city doesn’t get much out of the deal. In exchange for upzoning the waterfront, creating a big all of buildings and screwing up the city’s housing balance, what does the San Francisco general fund get? Not a lot. The estimates for new tax revenue run about $1.5 million a year of the next 60 years — and when you translate that to what economist call “net present value,” the cash equivalent today of that revenue stream, it’s about $30 million. The Port of San Francisco is talking about creating a special infrastructure financing district — sort of the equivalent of a redevelopment area — to pull that money out in advance, which may not even be legal (since part of the land is a former redevelopment area, the state law that allows these special finance districts may not apply). But even so, a Jan. 14 Port memo suggests that the agency has plans to spend all that money on its own infrastructure — setting up a potential battle between the supervisors and the Port Commission over where the money, if it actually can be collected up front, will go.

Like any developer, Snellgrove will pay into the city’s affordable housing fund — in this case, about $9 million to pay for the equivalent of 27 units. No affordable units will be on site, of course; that would detract from the uber-wealthy ambience of the place. And it’s not clear when those units would be built. “Nobody builds 27-unit buildings any more,” Paul, a former deputy mayor for housing, said. “We’ll have to wait until there’s enough money for a bigger project, somewhere, sometime down the road. That’s what we’re getting here.”

Either way, it’s not a huge benefit for allowing this disaster of a project — and it’s a terrible statement for San Francisco to make. At a time when the mayor has cleared the Occupy protesters — who are talking about how little the rich pay in taxes — off the waterfront, the city is preparing to move in the exceptionally rich, who aren’t paying anywhere near their fair share in tax revenue to local government.

(Nobody knows for sure whether the costs of servicing high-end residential exceed the revenue the city gets from property taxes. In 1971, the Guardian put together the first-ever cost-benefit study for highrise office development, which showed that commercial buildings cost the city more than they paid; that’s been confirmed and demonstrated over the years to the point where it’s hardly even an argument any more. The supervisors ought to ask the city economist or the budget analyst to do the same sort of analysis for luxury condos.)

There’s another element here: Mayor Lee made a point during his campaign to say over and over again that he was an independent thinker, that powerful and influential allies like Rose Pak would not be calling the shots at City Hall. This will be his first major test: Pak and lobbyist Marcia Smolens are working hard to promote 8 Washington. And we’re already getting some disturbing signals out of the mayor’s office.

Lee told us that he has “no thoughts” about the project and hasn’t been paying any attention to it. That’s an odd stance, considering that his own Port Commission is pushing it and staffers in his office are working with the developer. This is a big priority for Pak, and the notion that she has never mentioned it to the mayor defies reason. Board President David Chiu, who talks to the mayor regularly, opposes the project, which is in Chiu’s district.

It’s hard to imagine that anyone who pays attention to local politics could be missing what will be one of the landmark votes this spring on the Planning Commission — which will take up the project March 8 — and the Board of Supervisors.

The mayor, may, indeed, be ignoring everything that supporters and opponents of 8 Washington have said and may be waiting until the Planning Commission vote to take a position. But if he’s just ducking questions because he’s planning to support it, he’s making a big mistake.

This is a chance for San Francisco to go beyond the platitudes about building housing, go beyond the hype about “green” buildings, see through the fraud about community benefits and consider what this really is: A special favor for a developer who wants to cater to the top 1 percent of the 1 percent and move San Francisco even closer to being a city of, by, and for the elite. The only reasonable vote on 8 Washington is No.

Editorial: The case against the 8 Washington tower

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Editorial note: In 1971, at the height of the Alvin Duskin anti-highrise battle, the Guardian did a special first ever cost benefit study for high rise office development.

We found that highrises cost the city  more in services than they produce in revenue.  This meant that the commercial high rise boom could be fought on economic grounds, not just aesthietic and environmental grrounds, and the Chamber of Commerce/Big development gang could never adequately refute our findings.  In fact, they are now taken for  granted. So, as the 8 Washington battle is poised to open the floodgates even further for a forest of market rate residential  buildings, it’s time for the city to do its own study to determine the economics of high end  residential buildings.  Does the cost of servicing luxury residential buildings exceed the taxes they pay? We and many others in the neighborhoods are certain that market rate housing doesn’t pay for itself. But the facts are needed and so we urge the supervisors to direct the budget analyst or the city economist to do a similar analysis  for luxury condos.  Below is Executive Editor Tim Redmond’s powerful argument against 8 Washington.

By Tim Redmond

tredmond@sfbg.com

In city planning terms, it’s a fairly modest project: 134 condos, no buildings more than 12 stories tall, on a 27,000-square-foot site. It’s projected to meet the highest environmental building standards and offers new open space and pedestrian walkways. It’s near Muni, BART, and ferry lines. And the city will collect millions of dollars in new taxes from it.

But the 8 Washington project, which will come before the Planning Commission March 8, has become a flashpoint in city politics, one of the defining battles of Mayor Ed Lee’s administration — and a symbol of how the city’s housing policy has failed to keep pace with the needs of the local workforce.

Put simply, it will create the most expensive condos in city history, housing for the richest of the 1 percent on the edge of the waterfront — and will further push San Francisco toward becoming a city that caters almost entirely to the very wealthy.

So in a city where the growing divide between the 1 percent and the rest of us has become a central issue and where the lack of affordable housing is one of the top civic concerns, 8 Washington is an important test. By any rational standard, this sort of development is the last thing San Francisco needs.

But some of the best-connected lobbyists in the city are pushing it. One of the mayor’s closest allies, Chinatown powerbroker Rose Pak, is a leading advocate — and the final outcome will say a lot about city politics in the Lee administration.

There are all sorts of half-truths and misleading statements by supporters of 8 Washington. Here are the five main reasons the project shouldn’t be approved.

1. It fills no housing need. San Francisco has no shortage of housing for the very rich; the dramatic need, outlined in both regional planning documents and the city’s own General Plan, is for low- and moderate-income housing for the people who actually work in this city (see “Dollars or sense?” 9/28/10). While San Francisco is getting richer by the day, the core workforce — public employees, workers in the hotel and restaurant industry, service workers, construction and trade workers, and a majority of the people in the lower levels of the finance and tech sector — are being priced out of the city. That means more people working here and living far out of town, often commuting by car, in what everyone agrees is an unsustainable situation. Meanwhile, more and more high-paid workers from Silicon Valley are living in San Francisco — again, commuting to distant jobs, either by car or by corporate bus.

The city’s General Plan states that some 60 percent of all new housing built in the city should be below market rate. San Francisco desperately needs housing for its workforce. This type of project simply puts the city deeper in the hole and further from its housing goals.

2. It’s a reward for bad actors. The main developer of this project is Simon Snellgrove, but one of his partners is, by necessity, Golden Gateway, which owns a significant part of the land — and which has been flouting at least the spirit if not the letter of city and state law and costing San Francisco tens of millions of dollars.

As project opponent Brad Paul has noted in written testimony, when Timothy Foo, the current owner, bought the complex from Perini Corp. about 20 years ago, he used a loophole in state law that allowed him to avoid a formal transfer of ownership. That means the property wasn’t re-assessed, costing the city about $1.5 million a year. According to the Assessor’s Office, the deal wasn’t illegal (and these tricks to avoid reassessment are relatively common) but still: He’s costing the city millions by using a loophole not available to most people.

Golden Gateway, which was built in a redevelopment area as middle-class housing, is now renting out apartments as short-term tourist or corporate rentals. There are dozens of examples right now on Craigslist. City law bars the owners of rental housing from converting it to hotel rooms, but a loophole in that law makes what Foo’s outfit is doing technically legal. But he’s clearly violating the spirit of the city ordinance that seeks to protect rental housing from hotel conversions.

One of the main aesthetic complaints about the area — something Snellgrove’s lobbyists have tried to use to support the project — is the ugly fence that now surrounds the Golden Gateway Tennis and Swim Club. But who do you suppose put that fence there?

Do we as a city want to be giving special zoning benefits to companies that try to circumvent tax and housing laws?

3. It’s an environmental disaster. Snellgrove and his architects, Skidmore Owning and Merrill, are seeking LEED platinum certification for the project, saying that its energy-efficiency, water use, and green building materials will make it one of the most sustainable structures in San Francisco. It is, the project website notes, close to all types of public transit.

But LEED doesn’t take into account what the building is used for (see “Is LEED really green,” 7/5/11) — and in this case, the use makes a huge amount of difference.

People who buy multi-million-dollar condos don’t tend to take Muni or BART when they go places. That’s not conjecture, it’s a proven fact. A 2008 study by the American Public Transportation Association notes, bluntly, that wealthier people are more likely to drive cars. When you move into the stratospheric regions of the ultra-rich, that’s even more true. A 2011 report on the Charting Transport website notes: “The very rich tend to shun public transport.”

The current zoning in the area allows for one parking space for every four residential units. Snellgrove is asking for one space per unit — in other words, he figures every single buyer will have a car.

Many of the people who buy these condos won’t be working or even living most of the time in San Francisco. These are condos for world travelers, second and third homes for people who want to spend a few weeks a year in San Francisco. “They aren’t going to be living here all year,” Christina Olague, a former Planning Commission member who is now the District 5 supervisor, told us last July.

If five of the 165 residents of 8 Washington fly in a private or corporate jet from, say, New York to their SF pad once a month, the project will cause the use of jet fuel equivalent to what a normal family would use driving a car for 330 years, Paul noted.

“How many solar panels are needed compensate for burning 396,000 gallons of jet fuel a year?” he asked.

Then there’s the construction issue. If the developer’s projections are correct, as many as 20,000 dump truck runs will be trundling along the Embarcadero for several months, one every two minutes — and it could be happening right as the traffic nightmare called the America’s Cup is hitting the waterfront.

It also goes against some 40 years of waterfront planning policy, all of which as focused on downzoning and creating open space. This would be the first upzoning of San Francisco waterfront property in decades.

4. It will wipe out what is mostly a middle-class recreation facility. The Golden Gateway Tennis and Swim Club will be closed for three years, then (possibly) reopened later as a smaller facility. The club — with two outdoor pools and six tennis courts — sounds like something for the elite, and it’s managed by the upscale Bay Club, but a lot of the users are longtime Golden Gateway residents and seniors. “I would say 30 or 35 percent of the users are seniors,” Lee Radner, chair of Friends of Golden Gateway, told me. Most, he said, are middle-class people, and the expense isn’t that high. “My wife and I pay $3 a day to use the pool,” he said. “I swim every day, and it would cost more than that to use the public pools in the city.” He added: “There are some wealthier people, of course, but many of us are retired and on fixed incomes.”

We’re talking about 90,000 total square feet of outdoor recreation space — which dwarfs the 20,000 square feet of open space the developer promised to provide.

5. The city doesn’t get much out of the deal. In exchange for upzoning the waterfront, creating a big all of buildings and screwing up the city’s housing balance, what does the San Francisco general fund get? Not a lot. The estimates for new tax revenue run about $1.5 million a year of the next 60 years — and when you translate that to what economist call “net present value,” the cash equivalent today of that revenue stream, it’s about $30 million. The Port of San Francisco is talking about creating a special infrastructure financing district — sort of the equivalent of a redevelopment area — to pull that money out in advance, which may not even be legal (since part of the land is a former redevelopment area, the state law that allows these special finance districts may not apply). But even so, a Jan. 14 Port memo suggests that the agency has plans to spend all that money on its own infrastructure — setting up a potential battle between the supervisors and the Port Commission over where the money, if it actually can be collected up front, will go.

Like any developer, Snellgrove will pay into the city’s affordable housing fund — in this case, about $9 million to pay for the equivalent of 27 units. No affordable units will be on site, of course; that would detract from the uber-wealthy ambience of the place. And it’s not clear when those units would be built. “Nobody builds 27-unit buildings any more,” Paul, a former deputy mayor for housing, said. “We’ll have to wait until there’s enough money for a bigger project, somewhere, sometime down the road. That’s what we’re getting here.”

Either way, it’s not a huge benefit for allowing this disaster of a project — and it’s a terrible statement for San Francisco to make. At a time when the mayor has cleared the Occupy protesters — who are talking about how little the rich pay in taxes — off the waterfront, the city is preparing to move in the exceptionally rich, who aren’t paying anywhere near their fair share in tax revenue to local government.

(Nobody knows for sure whether the costs of servicing high-end residential exceed the revenue the city gets from property taxes. In 1971, the Guardian put together the first-ever cost-benefit study for highrise office development, which showed that commercial buildings cost the city more than they paid; that’s been confirmed and demonstrated over the years to the point where it’s hardly even an argument any more. The supervisors ought to ask the city economist or the budget analyst to do the same sort of analysis for luxury condos.)

There’s another element here: Mayor Lee made a point during his campaign to say over and over again that he was an independent thinker, that powerful and influential allies like Rose Pak would not be calling the shots at City Hall. This will be his first major test: Pak and lobbyist Marcia Smolens are working hard to promote 8 Washington. And we’re already getting some disturbing signals out of the mayor’s office.

Lee told us that he has “no thoughts” about the project and hasn’t been paying any attention to it. That’s an odd stance, considering that his own Port Commission is pushing it and staffers in his office are working with the developer. This is a big priority for Pak, and the notion that she has never mentioned it to the mayor defies reason. Board President David Chiu, who talks to the mayor regularly, opposes the project, which is in Chiu’s district.

It’s hard to imagine that anyone who pays attention to local politics could be missing what will be one of the landmark votes this spring on the Planning Commission — which will take up the project March 8 — and the Board of Supervisors.

The mayor, may, indeed, be ignoring everything that supporters and opponents of 8 Washington have said and may be waiting until the Planning Commission vote to take a position. But if he’s just ducking questions because he’s planning to support it, he’s making a big mistake.

This is a chance for San Francisco to go beyond the platitudes about building housing, go beyond the hype about “green” buildings, see through the fraud about community benefits and consider what this really is: A special favor for a developer who wants to cater to the top 1 percent of the 1 percent and move San Francisco even closer to being a city of, by, and for the elite. The only reasonable vote on 8 Washington is No.

The 8 Washington disaster goes to Planning

Zelda Bronstein
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100
The 8 Washington disaster goes to Planning

The urban planning disaster that is 8 Washington goes before the San Francisco City Planning Commission March 8 amid a long list of questions — including Mayor Lee’s position on the project and how it could screw up the America’s Cup.

Developer Simon Snellgrove wants to build the most expensive condos in San Francisco history on the waterfront, 145 units that will be far out of reach to anyone who makes less than half a million dollars a year. And many of the units will require income far higher than that. It’s not just housing for the 1 percent; it’s housing for the top half of the 1 percent.

There’s no need for this kind of housing in SF; the very rich have no problem finding places to live. And the spot zoning violates every standard of good waterfront planning practice.

The project will benefit the Port of San Francisco, which stands to take a cut of the money since some of the project is on Port land. But more than half of the land is owned by Golden Gateway and is a former redevelopment area, so the supervisors and the Port are going to have to fight over who gets the property tax increments and how that’s all financed.

More interesting, 8 Washington will be a boon to Golden Gateway, which as the landowner is a partner in the deal. And Golden Gateway is one of those big properties that are paying far too little in city taxes. When the complex changed hands several years ago, the owners used a stock-swap deal to transfer it, avoiding the Prop. 13 reassessment that could have substantially raised its taxes. So the city’s losing millions of dollars — and now Timothy Foo, who is the principal owner of Golden Gateway, will be getting a nice favor from the city he’s been screwing.

Oh, and by the way — a lot of Golden Gateway units are being advertised as short-term (that is, hotel) rentals — something that violates at least the spirit of city law. This is an outfit that deserves special zoning treatement from San Francisco?

Then there’s the fact that this could be a serious problem for the big America’s Cup party. Project critic Brad Paul has been analyzing the impacts of the development, and noticed some new language in the comments and responses to the Environmental Impact Report suggesting that excavation could lead to something like 200 dump-truck trips a day along the Embarcadero — roughly one trip every two minutes. In an email to Paul, Paul Matltzer in the Planning Department confirmed that the likely construction process could, indeed, involve that many dump trucks, rumbling along the Embarcadero during the peak construction period, which will also be the peak period for America’s Cup tourism.

Dump trucks, Paul (who used to drive one) notes, start slowly and brake slowly. The Embarcadero is already crowded — and will be far more crowded during the Cup races, so much so that city officials are thinking of closing traffic lanes to all but bicyles and transit. How, exactly, will that work out with 200 trucks a day fighting for room?

I’ve called and emailed the America’s Cup people, but they haven’t gotten back to me. I’ll keep you posted.

Lee’s office hasn’t gotten back to me, either, but I’m hearing that the mayor is telling people he hasn’t made up his mind — on a project that’s a week away from the Planning Commission and that one of his close allies, Rose Pak, is strongly promoting.

 

What’s wrong with the America’s Cup deal? A lot

Zelda Bronstein
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21
What’s wrong with the America’s Cup deal? A lot

Let’s start out with a premise that even Larry Ellison’s minions have come to accept: The race is happening here. Too late now to move it to another city. Worst-case scenario, according to Stephen Barclay, the point person for the world’s sixth-richest man: “If we don’t meet those dates, the teams will be forced to relocate to other places around the bay.”

That’s right — the teams will relocate to other places around the bay. The host city will still, for all practical purposes, be San Francisco; the races will happen off SF’s waterfront (where the Coast Guard is willing to allow them and the conditions are right) and the rich tourists will stay here, not in Burlingame or Fremont.

If Ellison decides the city’s not giving him enough, he won’t put up $55 million to fix up some of the waterfront piers. The city may decide that a development deal of some sort with him makes economic sense. But it’s a real-estate deal at this point, not a deal for the race. At least, that’s what the Ellison team seems to be confirming.

And I fear that the real-estate deal that the Board of Supervisors Finance Committee sent forward yesterday, 2-1, is a bad deal for the city.

The terms are really complicated, and it makes my head hurt just trying to figure it all out — and still, the supes are expected to vote on the 120-plus-page document Feb. 28. Here’s what we do know, though:

The supervisors originally came to a deal with the America’s Cup Event Authority back in December. The concept was — and is — pretty straightforward, the same sort of deal the city has done (or, certainly, the Redevelopment Agency has done) many times in the past. In exchange for putting cash into renovating several piers, Ellison’s group would get long-term leases and development rights on the property. The idea: The city can’t afford to fix the piers. Ellison’s organization can. And once the property is renovated, the developer can make back that initial investment, and a profit, by building commercial space, condos and whatever else the Port decides to allow.

In a perfect world, San Francisco (and the state and the feds) would tax the hell out of people like Ellison, and there’d be public money to rebuild the waterfront as public open space, recreational facilities and the like. And wouldn’t that be utterly cool? Wouldn’t this city have the most awesome waterfront in the world?

But no: The only way the piers are going to anything but a place to park cars until they fall into the bay is if some private developer gets the rights to build something that I won’t like.

Supervisors Jane Kim and Mark Farrell, who don’t agree on a lot of things, both agreed with my basic analysis of the politics here: We shouldn’t let the excitement over the prospect of a boat race get in the way of analyzing this for what it is: A financing tool for the Port to get its infrastructure fixed up. Without a private investor, “they just don’t have the capacity to do that,” Kim told me.

So let’s just stipulate for a moment that this is the best, maybe the only way the city can restore the Port. Then it comes down to the real issue: Has the Mayor’s Office negotiated a good enough deal? Is San Francisco getting enough out of this? Or is everyone so hyper-buzzed about fancy carbon-fiber boats in the water (and I admit, they’re pretty cool) and free-spending tourists in the hotels and restaurants that we’re letting Mr. Ellison — who didn’t get so stinky rich by being a weak negotiator — walk away with most of the cookies?

Remember: Ellison’s not doing the city any favors. He’s only fixing up the piers that he will effectively own (as least for most of the rest of this century).

Back in December, the rough outlines looked like this: A corporation set up by Oracle, called the America’s Cup Event Authority, would put $55 million into repairing and renovating piers, then would get  66-year leases and development rights on piers 30-32, 26 and 28, as well as seawall lot 330, across the Embarcadero, which Ellison’s team wants to turn into more condos for rich people. If that’s not enough to pay for Ellison’s investment, Ellison’s heirs or successors get half the rent for the piers for another 15 years. That’s 81 years.

The original deal mandated that the city would collect a 1 percent fee on the re-sale of the new condos. It also had a requirement that Ellison share with the city any profits he made by flipping the long-term leases.

That’s a big deal, because almost nobody in the city actually holds onto development entitlements anymore. A developer wins the right to build an office building — and next week, he or she sells that right to somebody else. It’s almost certain that at some point, Ellison — whose sole goal here is going to be making a profit off city land — will decide that the best way to make money is to cash out. He’ll keep his 66-year leases for a few years, maybe lobby his way to approvals for office, condos, time-shares (gasp! yeah, they’ll do that if it’s legal) restaurants or whatever — then sell the remaining time on the leases, plus the development rights, to somebody else. And because he’s Larry Ellison, he’ll wind up making a nice tidy profit.

That used to be what happened with Port property (see: Pier 39) but lately, the Port’s gotten a bit wiser and has, in some cases, insisted that part of the profit from flipping a lease goes back to the city. In the original discussions, Ellison was going to have to pay the Port 15 percent of any net gains he made from the almost inevitable sale of the valuable leases.

But that’s gone now. After the board approved Newsom’s deal, the former mayor — who was always terrible at negotiation with the rich and powerful and always gave away the store — went back and monkeyed around with it. He and Sup. David Chiu insisted that the changes were just technical, not substantive enough to require a new board vote — but the current deal has no 15 percent cut for the Port, and the 1 percent levy on condo sales only applies after the second owner sells — which will be years down the road.

Then there’s the part where the city has to reimburse Ellison if the cost of renovating the piers exceeds what’s expected (oh, and we have to pay him 11 percent interest, which is about ten times what I get on my bank account; how about you?) There’s no cap on what the city might have to pay. And Ellison gets to develop a new marina.

And while Pier 29 is no longer a part of the deal, the city has to give Ellison $12 million — or rights to a pier to be named later. (Maybe Ellison figures that in a few years the people who opposed Pier 29 development will be out of office and he can convince the new mayor and supervisors to give Pier 29 back. It’s not legally excluded.)

Kim told me she’s going to insist that the final deal include a local-hire provision, which the rest of the board would be crazy not to support (and which Ellison, despite his company’s problems with local labor laws in the past, would be crazy not to accept).

But overall, Kim — who with Sup. Carmen Chu was part of the 2-1 majority sending the package to the full board — told me she thought the city got a good deal. “It took me a while,” she said. “But [Port Director] Monique Moyer convinced me that this was good for them.”

Sup. John Avalos, the dissenting vote on the Finance Committee, isn’t convinced. He’s got a long list of concerns, starting with the fact that he thinks the projected attendance and economic benefits are a bit delusional. “The figures seem farfetched,” he told me. “I’m seeing a lot of pumped up numbers. And those numbers drive whether this is a good deal for the city or not.”

He’d like to see the 1 percent rule apply to the second condo sale, not the third. He’d like to see the Port get 15 percent of the profits from any sale. And he’d like a cap on the reimbursements the city has to give to Ellison.

But here’s the problem: When the development agreement comes before the board, sitting as a Committee of the Whole Feb. 28, it will be hard to put any of that back in the agreement. This is a contract, and while the board can pass a resolution asking for more, in the end, it’s a matter of voting it up or down.

Vote yes and it’s done — more or less as is — although Kim says there will be another chance to make changes down the road, since the board and the Planning Commission will have to sign off on whatever type of development Ellison wants to do. The problem with that scenario? Ellison’s lawyers will wave this development agreement around like a Giants victory towel and proclaim that it binds the city and limits any ability to demand any more changes later. That’s how these people operate.)

Vote no and the ball goes back to Larry’s Court: His group can sit down with the Mayor’s Office and make some changes, or they can walk away (and build their boat sheds in …. where? Oakland? Foster City? Who’s got waterfront that can handle this?)

When the Finance Committee send the package to the full board, Avalos said, “we pretty much lost our ability to influence the agreement. Now we have to decide if we want to call [Ellison’s] bluff.”

PS: One of the lingering issues is whether the America’s Cup Organizing Committee can raise the $30 million-odd that is needed to make the numbers pencil out. If I were a rich person and Mark Buell, the ACOC point person, called me for money, here’s what I’d say:

How much is Larry Ellison contributing?

See, Ellison’s improvements on the waterfront aren’t charity. He’s looking to make a buck off everything he does. In past eras, the great robber baron capitalists would donate civic monuments — libraries and museums and stuff — and by any traditional standard of great wealth, Ellison ought to be writing a personal check for that $30 million. Or at least for some of it.

But so far, he hasn’t given a penny. The sixth richest man in the world isn’t actually donating anything to San Francisco. Yeah, he’s gracing us with his lordly presence, but cash? Nada.

Good luck with that one, Mark.

PPS: This whole concept that the city needs to fix the “crumbling” piers ought to be examined. First of all, nobody’s ever said that Pier 29 was in anything but fine shape. But beyond that, the Bay Conservation and Development Commission considers piers to be bay fill, and in the long term, wants San Francisco to get rid of some of them. “Maybe it’s a good thing if some of the piers fall into the bay,” former Sup. Aaron Peskin told me. “Then we’ll have more leeway with BCDC when we want to fix up some of the others.”

Research assistance by Royce Kurmelovs

Gavin Newsom (suddenly) cares about economic justice

Zelda Bronstein
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37
Gavin Newsom (suddenly) cares about economic justice

I was eating my (late) breakfast as I was listening to Gavin Newsom on KQED’s Forum this morning, and at first it was just the usual lofty rhetoric about education … and then Michael Krasny asked the lieutenant governor about the Occupy movement, and I almost threw up my whole wheat bagel and peanut butter.

Cuz Gav — the mayor who would never even consider asking the city’s wealthiest to pay more taxes, who ran for governor and then lite gov on a platform that he’d balanced the city budget without raising taxes, the guy who was a great friend of the city’s 1 percent, had the nerve to sing the praises of Occupy and complain about economic injustice.

Seriously: Gav ranted on for about five minutes about how low the taxes are on rich people. He announced that his company just set up a new winery and hired a bunch of people — and taxes were never an issue. He acted like someone who reads my shit.

One of the messages of Occupy — and one of the reasons that the movement exists not just in Washington and Manhattan but in cities all over the country — is that economic injustice needs to be addressed everywhere. It’s not just about the Bush tax cuts or even Jerry Brown’s tax-hike initiative; it’s also about local government trying to address the wealth and income gap and the impacts of 1 percent domination — at home.

Gavin had seven years to do that. He didn’t even try. Worse, when the progressives on the board tried, he’d veto anything that remotely smacked of a tax hike on the rich or a way to force the 1 percent to share the wealth with the 99 percent. (Does anyone think he would have allowed Occupy to stay at Justin Herman Plaza as long as Ed Lee did? Not a chance.) Now he wants to take advantage of the popularity of the movement for his own advancement.

Fucking sick.

Transfer of power

Jesse Hawthorne Ficks
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4
Transfer of power

yael@sfbg.com

Feb. 1 marks the first day that San Francisco and other California cities no longer have redevelopment as a tool for building affordable housing or dealing with urban blight, but questions remain about how the power and functions of the San Francisco Redevelopment Agency (SFRA) will now be used.

On Dec. 29, the California Supreme Court upheld the validity of Assembly Bill 26, which dissolved all redevelopment agencies throughout the state and redirected the property tax revenue they accumulated to prevent deep cuts to public schools.

Redevelopment agencies, established in California in 1948, were charged with revitalizing “blighted” areas of cities. There were 400 such agencies throughout California, funded by incremental increases in property taxes within a redevelopment zone. Agencies could borrow against that revenue source to subsidize development projects.

AB 26 mandated that all cities dissolve their redevelopment agencies by Feb. 1 and transfer assets to successor agencies meant to “expeditiously wind down the affairs of the dissolved redevelopment agencies,” according the bill’s text.

A resolution passed by the Board of Supervisors on Jan. 24 authorized the transfer of SFRA affordable housing assets to the Mayor’s Office of Housing (MOH) and its non-housing assets to the city’s Department of Administrative Services. It also created a board to oversee the implementation of the SFRA’s ongoing projects.

Now, San Francisco is faced with the task of continuing to fund affordable housing projects and other development without the SFRA, and the board’s resolution laid out some of the terms for how the city will do that, although much remains to be determined.

Mayor Ed Lee appointed all members of the oversight board, which includes Planning Director John Rahaim; MOH Director Olson Lee; Nadia Sesay, director of the Mayor’s Office of Public Finance; and Bob Muscat, director of International Federation of Professional and Technical Engineers, Local 21.

In recent weeks, some groups have raised concerns that these appointees are not representative of the communities impacted by the ongoing redevelopment projects that they will be entrusted with overseeing, and that too much power is concentrated in the Mayor’s Office.

“One of our biggest concerns is that the oversight body could be made much more accountable and democratic,” said Jeron Browne of People Organized to Win Employment Rights (POWER)-Bayview. Much of Bayview-Hunters Point is no longer under the authority of the Planning Commission or any regular zoning laws since it was declared a redevelopment project site in 2000.

Sup. Malia Cohen, who represents the area, added an amendment to the board’s resolution that would impose term limits on oversight board positions. “I understand that there are a number of concerns that have been raised about the composition of the board. However, given the short time frame and the technical nature of the board and its obligations, I’m very comfortable with these appointees that they will be able to make decisions necessary to make the projects move forward. Additionally, with the inclusion of staggering terms we will be able to ensure that there is ample opportunity to include representation from affected communities,” Cohen said at the meeting.

The board also passed an amendment to “clarify that the land use controls granted by the oversight board are consistent with previous land use authority granted by the Board of Supervisors and the redevelopment commission,” as a response to concerns that the oversight board will have too much power over land use in project areas.

Tiffany Bohee, interim director of the SFRA, said that the court’s ruling was the “least desirable possible outcome.” Bohee said the SFRA has spent recent weeks analyzing all enforceable obligations outlined by the ruling to make sure that the transition complies with the law and is as fair as possible to SFRA employees.

The positions that these 101 workers filled at the SFRA will no longer exist as of Feb. 1, and layoffs are underway. However, most will remain employed throughout a transition period that ends March 31, and Bohee said that many will find work in city agencies that will be charged with continuing the work of the SFRA, such as MOH and the Planning Department.

MOH was historically responsible for allocating federal housing grants to city agencies. In past decades, federal budget cuts have severely limited the grants to build affordable housing. Now, although MOH has some power over city housing policy and allocation of funds to build housing, many of those responsibilities had been transferred to the Planning Department — or, until recently, the Redevelopment Agency.

The Planning Department is governed by the Planning Commission with four mayor-appointed members and three members appointed by the Board of Supervisors. The Planning Department implements planning standards and signs off on structural changes to the city, ranging from homeowner requests to alter houses to developer requests to build high-rises.

In many ways, the Redevelopment Agency was redundant, shadowing work done by the Planning Department. When an area was designated an SFRA project area, the planning code and zoning restrictions no longer applied, and developers working in partnership with the city had the power to define new land-use regulations.

Many critics of the SFRA said that private developers were able to use this lack of regulation to take advantage of the significant amount of money reserved for the agency. Deepening this concern was the fact that the Redevelopment Commission, which oversaw the SFRA, was composed entirely of mayoral appointees, which some felt were less accountable to the public interest than the Planning Commission.

Some feel that the oversight board, composed entirely of mayoral appointees, will repeat the same lack of accountability to neighborhoods.

“The city is setting up a planning commission for the 1 percent. And the Planning Commission that we have is the for the 99 percent,” said Tom Radulovich, executive director of Livable City, which works on land use issues. He said that with the dissolution of the SFRA, the city has an opportunity to facilitate the construction of affordable housing in a more democratic fashion. His organization expressed concerns to the Board of Supervisors, cautioning that the Oversight Board should not have undue power over land-use in development project areas and that the new structure in city government for facilitating development projects should be created with the input of communities. The Board of Supervisors made clear Jan. 24 that the Oversight Board and its appointees are a temporary measure to comply with AB26 by the Feb. 1 deadline. As Sup. Christina Olague said, “I just want to assure the public that this isn’t the end-all, be-all of this discussion, that it will be ongoing, and we welcome any of your concerns at any time.”

Occupy is back — with horns and glitter

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Occupy is back — with horns and glitter

yael@sfbg.com

On Jan. 20, hundreds of activists converged on the Financial District in a day that showed a reinvigorated and energized Occupy movement.

The day of action was deemed “Occupy Wall Street West.” Despite pouring rain, the numbers swelled to 1,200 by early evening.

Critics have said that the Occupy movement is disorganized and lacks a clear message. Some have decried its supposed lack of unity. Others have even declared it dead.

But the broad coalition of community organizations that came together to send a message focused on the abuses of housing rights by corporations and the 1 percent sent a clear message:

The movement is very much alive.

 

A FULL SCHEDULE

Protesters packed the day with an impressive line-up of marches, pickets, flash mobs, blockades, and everything in between.

The action began at 6:30 a.m., when dozens chained and locked themselves together, blocking every entrance to Wells Fargo’s West Coast headquarters at 420 Montgomery Street. The bank didn’t open for business that morning.

Another group of protesters did the same thing at the Bank of America Building around the corner. A dozen blockaded one of the bank’s entrances from 8:30 a.m. to 6 p.m., preventing its opening. A group organized by Act Now to Stop War and End Racism (ANSWER) closed down the Bank of America branch at Powell and Market for several hours.

The Bank of America branch at Market and Main was also closed when activists turned it into “the Food Bank of America.” Several chained themselves for the door, while others set up a table serving donated food to hundreds of people.

Meanwhile, activists with the SF Housing Rights Coalition and Tenants Union occupied the offices of Fortress Investments, a hedge fund that has overseen the destruction of thousands of rent controlled apartments at Parkmerced. Direct actions also took place at the offices of Bechtel, Goldman Sachs, and Citicorp.

Hundreds picketed the Grand Hyatt at Union Square in solidarity with UNITE HERE Local 2 hotel workers.

A group of about 600 left from Justin Herman Plaza at noon and marched to offices of Fannie Mae, Wells Fargo, and the Immigration and Customs Enforcement Agency (ICE) in a protest meant to draw attention to housing and immigrant-rights issues.

“It’s not just a corporate problem. The government has been complicit in these abuses as well,” said Diana Masaca, one of the protest’s organizers.

More than 100 activists from People Organized to Win Employment Rights (POWER) and the Progressive Workers Alliance “occupied Muni,” riding Muni buses on Market Street with signs and chants demanding free transit for youth in San Francisco.

Another 200 participated in an “Occupy the Courts” action at the Ninth Circuit Court of Appeals, in protest of the Citizens United Supreme Court decision and corporate personhood.

 

GLITTER AND BRASS

Exhausted, soaked protesters managed to keep a festive spirit throughout the day, with colorful costumes, loud music, and glitter — lots of glitter.

The Horizontal Alliance of Very Organized Queers (HAVOQ) and Pride at Work brought the sparkly stuff, along with streamers and brightly colored umbrellas, to several different actions. Many painted protest slogans onto their umbrellas, proclaiming such sentiments as “I’ll show you trickle down” and “Not gay as in happy, queer as in fuck capitalism.”

According to protester Beja Alisheva, “HAVOQ is about bringing fabulosity to the movement with glitter, queerness, and pride. All day we’ve been showing solidarity between a lot of different types of oppression.”

There was also the Occupy Oakland party bus — a decked-out former AC transit bus — and carnival, a roving party that shut down intersections and bank entrances in its path while providing passengers a temporary respite from rain.

The Brass Liberation Orchestra, a radical marching band that has been energizing Bay Area protests for a decade, showed up in full force with trumpets, drums, trombones, and a weathered sousaphone.

The Interfaith Allies of Occupy also used horns to declare their message. About 30 participated in a mobile service, sounding traditional rams’ horns and declaring the need to “lift up human need and bring down corporate greed.”

Said Rabbi David J. Cooper of Kehela Community Synagogue in Oakland: “Leviticus 19 says, do not stand idly by in the face of your neighbor’s suffering. Well, we’re all neighbors here. Ninety-nine percent of us are suffering in some way, economically or spiritually. And maybe that number is 100 percent.”

 

FOCUS ON HOUSING

A coalition called Occupy SF Housing called for and organized the day of action, but the messages ranged from environmental to anti-war to immigrant rights.

Many groups did focus in on housing-related issues — and a takeover of a vacant hotel building stressed the urgency and need to house homeless San Francisco residents.

Housing protests included an anti wage-theft occupation led by the Filipino Community Center and the National Alliance for Filipino Concerns at the offices of CitiApartments, an action at the offices of Fortress Investments to demand a halt to predatory equity, and an “Occupy the Auction” demonstration in which protesters with Occupy Bernal stopped the day’s housing auction (at which foreclosed homes are sold) at City Hall.

“A lot of the displacement in this city is happening because of banks and because of things that are out of peoples’ control,” said Amitai Heller, a counselor with the San Francisco Tenants Union. “People will live in a rent controlled apartment for 20 years thinking that they have their retirement planned. A lot of the critiques of the movement are, if you couldn’t afford it you should move. But these people moved here knowing they could afford it because of our rent controls.”

 

LIBERATE THE COMMONS

Most of the early protests drew a few hundred people. But when the 5 p.m. convergence time rolled around, many people got off work and joined the march. A rally at Justin Herman Plaza brought about 600; by the time the march joined up with others at Bank of America on Montgomery and California, the numbers had doubled.

The evening’s demonstration, deemed “liberate the commons,” was also more radical than other tactics throughout the day; organizers hoped to break into and hold a vacant building, the 600-unit former Cathedral Hill Hotel at 1101 Van Ness.

When protesters arrived at the site, police were waiting for them. Wearing riot gear and reinforced by barricades, the cops successfully blocked the Geary entrance to the former hotel.

The darkness, rain, and uncertainty created a chaotic environment as protesters decided how to proceed. Some attempted to remove barricades; others chanted anti-police slogans.

Soon, cries of “Medic! We need a medic!” pierced the air. A dozen or so protesters had been pepper sprayed.

Police Information Officer Carlos Manfredi later claimed that the pepper spray was in response to “rocks, bottles and bricks” thrown by protesters. He also claimed that one officer was struck in the chest by a brick, and another “may have broken his hand.”

But I witnessed the entire incident, and I can say that no rocks, bottles or bricks were thrown at police.

When protesters opted to march down Van Ness, apparently towards City hall, several broke windows at a Bentley dealership at 999 Van Ness.

The march then turned around and headed back up Franklin, ending at the former hotel’s back entrance. There, it became clear that some protesters had successfully entered the building; they unfurled a banner from the roof reading “liberate the commons.”

Soon, many other protesters streamed into the building. They held it, with no police interference, for several hours.

Around 9:30, police entered the building and arrested three protesters for trespassing. About 15 others remained in the building, but left voluntarily by midnight.

This building has been a target of protest campaigns in San Francisco since it was purchased by California Pacific Medical Center, which closed the hotel in 2009. There are plans underway for a hospital to open at the site in 2015.

The project has been met with opposition from unions such as SEIU United Healthcare Workers West and UNITE HERE Local 2. The California Nurses Association (CNA) has also come out against the hospital proposal. In fact, it was the target of a CNA protest earlier in the day Jan. 20, when protesters created a “human billboard” reading “CPMC for the 1 percent.”

At a Jan.18 press conference, CNA member Pilar Schiavo said that at the former Cathedral Hill Hotel site, “A huge hospital is being planned with is being likened by Sutter to a five-star hotel. At the same time, Sutter is gutting St. Lukes Hospital, which is essential to providing healthcare for residents in the Mission, the Excelsior and Bayview- Hunter’s Point.”

Homes Not Jails, a group that finds housing for the homeless, often without regard to property rights, was crucial to planning the “Liberate the Commons’ protest. The group insists that the 30,000 vacant housing units in San Francisco should be used to shelter the city’s homeless, which they estimate at 10,000.

 

RAINY REBIRTH

Wet and cold conditions were not what Occupy SF Housing Coalition organizers had in mind they spent weeks planning Occupy Wall Street West, which was billed as the reemergence of the Occupy Movement in San Francisco for 2012.

Yet for many, the day was still a success.

“The rain’s a downer. But I think it speaks to the power of the movement, the fact that all these people are still out getting soaked,” said Heller on Jan. 20.

Perhaps hundreds of “fair-whether activists” did forgo the day’s events to stay out of the cold. If that’s the case, then occupy protesters with big plans for the spring should be pleased.

At this rate, it seems that Occupy will survive the winter- and emerge with renewed energy in 2012.

 

This article has been to corrected. We originally reported that a demonstration at the offices of Citi Apartments was led by the Chinese Progressive Association (CPA). In fact, it was led by the Filipino Community Center and the National Alliance for Filipino Concerns, and supported by a number of organizations including the Progressive Workers Alliance, of which CPA is a member organization. We regret the error.

Will Obama bring the populist fire in tonight’s speech?

Sasha Cuttler
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Will Obama bring the populist fire in tonight’s speech?

President Barack Obama has a choice for how he uses his State of the Union speech this evening. He could follow the advice of Blue Dog Democrats like Mark Penn, who wrote in The Hill today that Obama should avoid “rhetoric that could be interpreted as class warfare.” Or he can find his inner populist and give the speech that the 99 percent needs to hear by announcing that the rich and the Right have already declared that war, and now he intends to win it on behalf of the people.

I’m rooting for the latter, but fearful that Obama is no William Jennings Bryant – or either of the Presidents Roosevelt – and that he is just not up for seizing this moment and going to war with the powerful plutocrats who are ruining this country.

But there are signs that Obama is at least prepared to “double down on taxing the rich,” as the Christian Science Monitor put it today. Certainly, all signs indicate that he will at least raise the economic inequity issue again tonight, and it’s a positive sign that the invited audience will include Debbie Bosanek, the secretary to billionaire investor Warren Buffet that he famously complained shouldn’t be paying his same tax rate. Certainly, Obama intends to push for his “Buffet rule” that would tax investment returns as income rather than at lower capital gains rates.

But those sorts of reasonable arguments aren’t enough. Obama has been calling for higher taxes on the rich throughout his presidency, albeit never as forcefully as he did on the presidential campaign trail in 2008. And since then, he’s repeatedly betrayed that pledge in cutting deals with Republicans in Congress, exacerbating historically high concentrations of wealth and betraying his own stated principles.

The Occupy movement and most of the left – and even segments of the Tea Party right that complain about the economic elites – no longer trust Obama and the Democrats to fight for the interests of the commoner. We’ve become cynical about putting any hopes in a president poised to shatter campaign fundraising records this year.

Yet as Obama prepares to run for reelection against either a vulture capitalist or hypocritical moralist – both of whom will be openly shilling for the 1 percent – he should realize that it’s both good policy and good politics to capitalize on the opportunity that the Occupy movement has opened up, join the class war, and help us finally win it and seize the resources we need to deal with this country’s myriad problems.

Today’s Chronicle includes a front page story about Rep. Nancy Pelosi’s hopes that Democrats will pick up the 25 seats needed to retake the House of Representatives this year – along with analysts poo-pooing that possibility. The only hope they offered for Pelosi’s plan is a meltdown by the Republican presidential nominee.

But that sort of clear contrast between Democrats and Republicans won’t simply happen on its own, it is something that Obama and the Democrats will need to force by finally relying more on populist ire than using campaign contributions from the wealthy to tarnish their opponents. Simply winning the presidential election won’t help Obama break this country’s political gridlock, he needs to make this race about the undue power of the rich and the Right and win it on those terms.

Pelosi acknowledged that her best hopes for gaining a substantial number of Congressional seats are in California, but they don’t seem to realize that the real potential here is with changing the political dialogue and tapping the 58 percent of California voters who said in a November Field Poll that they agree with the economic critiques that sparked the Occupy movement (and even higher percentages have supported taxing millionaires). Even those who didn’t join the Occupy movement agree with its basic analysis that the few are exploiting the many.

There is a simmering populist discontent that will play out in unpredictable ways this year. And it’s possible that many of the left will never trust Obama until his deeds finally match his words. But there is no larger mainstream political podium in this country than the State of the Union speech, and if Obama misses this opportunity to declare his allegiance with the 99 percent – and his willingness to fight for us – then we may all just be in for the nastiest yet most meaningless presidential election in modern history.

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