Warriors arena

Compromised position

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steve@sfbg.com

When Mayor Ed Lee came to the Board of Supervisors for his monthly “question time” appearance Feb. 12, Sup. David Chiu tried to get some sense of where the mayor stood on a controversial piece of legislation that would allow more condominium conversions.

Chiu explained the complexities and implications of an issue where the two sides have dug in and appear to have little common ground, and he asked the mayor for some guidance.

“What is your position on this pending legislation?” he asked. “What protections would you support to prevent the loss of rent-controlled housing in our increasingly unaffordable city? How would you address the concern that if we allow the current generation of tenancy in common owners to convert, we will replace then with a new generation of TIC owners and additional real estate investments that will lead us right back to an identical debate within a short time?”

But if Chiu and other board members were looking for leadership, direction or a clue of where the mayor might stand, they didn’t get it. Lee said he understood both sides of the issue and hoped they could reach a consensus solution — without offering any hints what they might look like or how to achieve it. “I can’t say that I have a magic solution to this issue that will make everyone happy,” the city’s chief executive explained.

Asked by the Guardian afterward why he didn’t take a position and whether he might be more specific about how he’d like to see this conflict resolved, he replied, “I actually did take a position, even though it didn’t sound like it, because I actually believe they have good points on both sides.”

That’s a typical answer for a mayor who rose to power preaching the virtues of civility and compromise and striving to replace political conflict with consensus. But now several major, seemingly intractable issues are facing the city — and insiders say Lee’s refusal to take a strong stand is undermining any chance for successful.

The lack of mayoral leadership has been maddening to both sides involved in the negotiations over the condo-conversion legislation. Tenant advocates say the mayor’s waffling hardened the positions on both sides and emboldened the group Plan C and its allies in the real estate industry to reject the compromises offered by supervisors and tenant advocates.

“It’s very unhelpful,” San Francisco Tenants Union head Ted Gullicksen said of Lee’s refusal to take a stand. “Someone needs to kick the realtors in the butt, and that’s not happening. They have no impetus at all to compromise.”

Then there’s the case of California Pacific Medical Center’s proposed new hospital, a billion-dollar project that would transform the Cathedral Hill neighborhood and have lasting impacts on health care in San Francisco.

The mayor’s eagerness to get the deal done — even if it wasn’t the best deal for the city — led to a proposal that fell apart last year under scrutiny by the Board of Supervisors. That project has now been in mediation for months — and sources tell us they’re getting close to a deal that has little resemblance to the anything offered by the Mayor’s Office.

California Nurses Association Director of Public Policy Michael Lighty, who has been involved with the CPMC negotiations, said Lee’s unwillingness to take a strong and clear stand, or to help mediate the dispute once the deal blew up, is why this negotiation has been so difficult and protracted.

“If he had engaged stakeholders and the supervisors, we wouldn’t have had to go to the brink last summer,” he said. “You’ve got to have clear objectives and be willing to fight for those, and that means saying no…If you’re willing to accept any deal and just put political spin on it, this is what you get.”

 

 

ADMINISTRATOR-IN-CHIEF

Neither Lighty nor others involved in the CPMC negotiations would discuss details of the pending deal, as per the instructions of mediator Lou Giraudo. But they did talk to the Guardian about the political shortcomings that led to such a protracted mediation process on a project that has been in the works for many years and involving a looming state deadline to replace the seismically unsafe St. Luke’s Hospital.

Lighty called Lee’s conciliatory approach to CPMC “an administrative orientation and not a political one,” noting that what worked during Lee’s long career as a city administrator may not be working well now that he’s in the Mayor’s Office dealing with issues where consensus isn’t always possible.

“I don’t think it’s a very sophisticated view and I don’t think it’s one that produces the best results,” Lighty said.

Lighty did say the negotiations were getting close to resolution. “What comes before the board is going to be vastly superior to what the mayor and CPMC proposed,” he said. “I think what you’ll find whenever this comes out is it will repudiate the mayor’s approach.”

He contrasted Lee’s style to that of his predecessor, Gavin Newsom, who took positions on most controversial issues and would often get involved with forcing his allies to cut deals. For example, shortly after taking office on 2004, Newsom demanded that his allies in the hospitality industry end their lockout of hotel workers, and when they refused he turned on them and even famously joined workers on the picket line, pressuring the hotels to soon end the lockout.

“Why did you need to bring in an outside mediator for CPMC? Why didn’t the mayor do that?” Lighty asked, noting that Lee has stayed away from the current negotiations.

Ken Rich from the Mayor’s Office of Economic and Workforce Development has been in those meetings but didn’t return our call. Mayoral Press Secretary Christine Falvey has also ignored repeated messages seeking comment on the issues raised in this story.

Rudy Nothenberg, who negotiated big deals on behalf of five successive mayors before Lee and who has been critical of the Warriors Arena deal that the Mayor’s Office has negotiated, said Lee’s unwillingness to take strong stands with developers is hurting the city.

“I was able to say I’m going to get the best deal I can for the city,” Nothenberg told us, saying he approached all negotiations, including the construction of AT&T Park, with the understanding from the mayors he worked for that he could simply say no to bad deals. “You need to bargain for the city as if these guys walked away, well, then that’s okay too.”

Sup. David Campos, who has been trying to get CPMC to strengthen its commitment to keeping St. Luke’s open as a full-service hospital, agreed that, “There have to be times when you’re willing to say no.” And on the CPMC project, Campos said that fell to the supervisors when the Mayor’s Office wasn’t willing to. “It was clear that the board was not going to approve it,” Campos said, “and sometimes you have to do that to get to a result you can live with,”

UCSF Political Science Professor Corey Cook said the problem is less with Lee’s overall philosophy than with what is strategically smart on individual issues.

“The mayor’s strength is in trying to come up with consensus measures,” Cook told us, calling the approach “generally a good one” and saying “the decider isn’t always who you want, then you get George W. [Bush].” Yet Cook also said intractable problems like the condo conversion debate may require a different approach. “Sometimes you do need to stake out clear ground to limit the terms of the debate.”

 

 

CHIU’S CENTRAL ROLE

Chiu has at least been willing to put his energies behind his belief in compromise, taking an active role in the CPMC and condo negotiations, as well as complicated current negotiations involving how to legalize but limit Airbnb’s shared housing business in San Francisco, which involves landlord-tenant-neighbor dynamics, regulation of private leases, and complex land use and taxation issues.

“It’s been a very long month. I’ve been going around the clock on several challenging negotiations,” Chiu told the Guardian. “The most important things to work on are often the ones that are the most difficult to get done.”

Chiu was reluctant to discuss the negotiations, calling it a sensitive moment for each of them. But he did admit that he was disappointed in Lee’s non-answer to his publicly posed question. “I had hoped for a little more direction,” Chiu said. And while these negotiations haven’t shaken his faith in compromise, he did say, “It depends on the substance of the issue whether there are common ground solutions that are superior to two warring sides.”

But all involved in the condo debate say it appears we’ll be stuck with the latter. “The two sides are so far apart that I don’t know what a compromise that both sides would live with would even look like,” Campos said. “There are certain issues where I don’t think compromise or consensus is possible.”

On this one, tenant advocates are trying to protect a finite supply of rent-controlled housing and real estate interests want to convert that same housing into condos. “If the issue was just existing TIC owners, we would come to an agreement,” Gullicksen said. “But clearly the agenda of Plan C and the realtors is they just want more condos.”

Plan C board member Kat Anderson told us, “I have a simple approach to this: Home ownership is important to me.”

She was undeterred by arguments that thousands of new condos are now being built in San Francisco, but there’s a steadily dwindling number of rent-controlled apartments in a city where two-thirds of San Franciscans are renters.

Anderson made it clear that she wants to not only allow the backlog of condo applicants to be approved, but she doesn’t want to slow the flow of condo conversions for a few years thereafter or place TICs themselves under the cap, compromises offered by Gullicksen. “The worry is that if you change the system, it will never come back and we’ll lose our tiny toehold of 200 units [that the lottery allows to be converted to condos annually],” Anderson said. And so we end up with the very thing Lee sought to avoid: a big, nasty, divisive public fight that will probably end up being decided by big money and deceptive campaign mailers rather than a civil, deliberative political process. And the mayor has nobody to blame but himself.

Big waterfront projects prompt study of new transportation ideas

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The massive development projects being proposed along San Francisco’s central waterfront – from the proposed Warriors Arena at Pier 30 through the Giants’ housing/retail project at Pier 48 down to Forest City’s sprawling proposal around Pier 70 – will create huge challenges for the city’s already overtaxed transportation system.

Nobody is more aware of that issue than Warriors President Rick Welts as he seeks approval to build a 17,500-seat arena with just a smattering of parking spaces. “We’re investing a billion dollars in this property, and if people aren’t comfortable getting to it and leaving it, we have a problem,” Welts told a gathering of the California Music and Culture Association on Tuesday night, responding to a local resident who raised the concern. “We have to get that right, it’s at the top of our list.”

With Muni and BART already at capacity during peak hours, and thousands of new housing units being built in the coming years both along the waterfront and from nearby SoMa down through the Eastern Neighborhoods Plan area, city transportation planners are trying to get ahead of potential problems created by the development boom.

“We’re now taking a step back and looking at the long-term needs from the Exploratorium down to Pier 70,” says San Francisco Municipal Transportation Agency planner Peter Albert, who is leading a comprehensive waterfront transportation study that will inform the environmental studies done for each of these projects. “What we get is an environmental review that is much smarter because we have all this advanced planning….EIRs are important, but they aren’t really planning.”

Albert is looking at everything from working with various transportation agencies to beef up bus, train, and ferry services to the area; using these projects to complete the ambitious but underfunded and long-stalled Blue-Greenway bicycle path along the waterfront; accelerating capital projects that are already in the SFMTA’s queue; and exploring a dozen or so new ideas.

“What’s also coming out of this are new ideas we’re coming up with, things we weren’t even thinking of that may make sense,” Albert told us, noting that he’ll be doing his first presentation of some of these ideas to the SFMTA Board of Directors on March 5.

They include extending new streetcar service along the Embarcadero to the Caltrain station at 4th and King or possibly all the way out to the Anchor Steam Brewing-anchored project at Pier 48 (which would probably involve construction of new streetcar turn-arounds); better integrating the Central Subway project into Mission Bay and the Embarcadero with new bus and rail connections around 20th and 3rd streets; and expansion of the Embarcadero BART station to increase its peak capacity.

Welts said BART will be an important connector to the new Warriors Arena, noting that the walking distance from Pier 30 to the Embarcadero station is actually about the same distance as the Coliseum BART station is from the entrance to the Warriors’ current arena. He said that he’s excited about Albert’s work and wants to cooperate with helping the city meet its transportation needs: “We have a lot of process to go through and we’re embracing that process.”

Funding the needed improvements will be a challenge, particularly because new development projects generally don’t pay for their full impacts to the transportation system, as SFMTA head Ed Reiskin and Sup. Scott Wiener have told the Guardian. On Monday, Wiener amended the Western SoMa Community Plan to increase how much developers would pay in transportation impact fees.

Albert said funding for the needed improvements to the area’s transportation system would come from a combination of mitigation fees from the developers, reprioritizing the SFMTA’s existing capital budget, and securing state and federal transportation grants by developing impactful projects that are shovel-ready, thanks to this advanced planning effort.

These three waterfront development projects alone could have huge impacts. The Warriors Arena would host more than 200 concerts and sporting events per year, drawing anywhere from a few thousand to more than 17,500 people. The Giants’ Pier 48 proposal involves 27 acres of new development, including retail, office, Anchor Brewing, and about 1,500 homes. And Forest City’s proposal for Pier 70 involves about 1,000 homes, 2.2 million square feet of office space, and 275,000 square feet of retail and light manufacturing.

Addressing the waterfront’s transportation challenges, Board of Supervisors President David Chiu told the Guardian, “It is possibly the most difficult and important question surrounding the Warriors project, and I’ve encouraged all parties to make sure they get it right.”

Proposal to raze I-280 linked to train and real estate deals

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It’s a bold idea, discussed for years behind closed doors and recently announced in a strangely understated and pro-growth way: Tear down the last mile of Interstate 280 and replace it with an wide boulevard – reminiscent of the removal of the Central and Embarcadero freeways – in order to facilitate the extension of electrified Caltrain and high-speed rail tracks into the Transbay Terminal.

For almost three years, city planners have been discussing the idea and drawing up closely guarded plans to tear down the freeway, discussions sparked by the state’s Environmental Impact Reports on electrifying the Caltrain tracks and bringing high-speed trains into town. With an increasing number of trains traveling those tracks, access to the rapidly growing Mission Bay area from the west on 16th Street would turn into a traffic nightmare, either with long waits for an at-grade train crossing or the creation of ugly and uninviting underpasses for cars and bikes.

Mayor Ed Lee and other top politicians have long sought to bring those trains downtown in Transbay Terminal through a still-unfunded tunnel, rather than having them stop at the existing Caltrain station at 4th and King streets. But the existence of the I-280 pilings made it structurally impossible to send the train underground before it got to 16th street.

So the idea was raised to raze the elevated 280 freeway and better integrate Mission Bay and the Potrero Hill/Showplace Square area, where Kaiser plans to build a huge new medical facility, creating a bike- and pedestrian-friendly corridor without the shadow of an antiquated freeway overhead.

“If you get the freeway out of the way, it’s a ton of space,” said Greg Riessen, the city planner who developed and studied the idea. “The whole corridor of the freeway is blocking the ability to do anything else.”

But it wasn’t until the political class and their capitalist partners also realized the enormous development potential of the idea – raising money that could be used to fund the train tunnel – that it was finally floated as a public trial balloon for the first time this week. The Chron’s Matier & Ross led their Sunday column with a short item on the idea, apparently tipped off to its quiet debut a couple weeks earlier.

The city’s Transportation Policy Director Gillian Gillett unveiled the idea in a Jan. 7 letter to the Municipal Transportation Commission, repeating it Jan. 10 at a forum on high-speed rail held at the San Francisco Planning and Urban Research Association. The letter was a response to the MTC’s request for information on “San Francisco’s policy goals and objectives regarding the much-needed electrification of Caltrain.”

Yet rather than deal directly with that issue, the letter said the answer “must be broadened to address the need for growth in the downtown and South of Market areas,” which it said requires funding to bring the trains into Transbay Terminal and to then let developers have at the 21 acres of land surrounding the existing Caltrain station, where transportation officials planned to store the trains.

“We need to create a faster and cheaper DTX [Downtown Extension project] alignment, realize the full value of the 4th & King Streets Railyard site, and eliminate the intrusiveness of I-280 in Mission Bay by terminating it at 16th Street and replacing it with a boulevard, based on the lessons learned from the removal of the Embarcadero Freeway to create a new Rincon Hill neighborhood, and the Central Freeway to create the new Market-Octavia neighborhood. Reenvisioning Caltrain electrification and the DTX could increase ridership, reduce costs considerably and create additional real estate value that would, in turn, provide for both more jobs to create revenue for both Caltrain and DTX and attract investment,” Gillett wrote.

She calls current plans to electrify Caltrain “shortsighted because it reduces the City’s ability to meet its regional job growth allocations, because more than 20 acres are covered with trains, and it eliminates an important opportunity to create real estate value which can be used to fund transit and Caltrain investments,” she wrote.

The letter doesn’t address where the increasing number of trains coming into San Francisco would be stored if the railyard is turned into luxury condos and commercial spaces, which has long been a goal of SPUR and other pro-development cheerleaders. High-speed rail officials have suggested Brisbane, but sources say city officials there have balked at the idea. Although Gillett hasn’t returned our calls with follow-up questions, the Mayor’s Office seems to see such logistical questions as secondary to this cash-cow idea.

So a staff-level proposal to solve a transportation challenge with an elegant multi-modal solution that follows in the city’s tradition of tearing down freeways has morphed into a real estate deal. Quentin Kopp, the father of high-speed rail in California, has already derided the Transbay Terminal project (which is funded by the sale of state land surrounding the site to office tower developers) as little more than a real estate deal, and now the city is apparently seeking to extend that deal further into Mission Bay.

Former Mayor Art Agnos, who worked on both the Embarcadero and Central freeway tear-downs, told us, “In general, I really support the concept of demolishing freeways that bisect the city.”

Yet he said there are many key details and questions that need to be addressed, particularly given the Mayor’s Office support for the new Warriors arena on the Central Waterfront, a project whose unaddressed traffic impacts would be exacerbated by an intensification of development at the Caltrain station, into Mission Bay, and further south.

“It could drown the city, this tsunami of cars, particularly with all the development planned all the way down to Hunters Point,” Agnos said. “I like the idea, but we need a serious discussion of the details, particularly with all these development proposals.”

 

Sea-level rise and development in SF

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It’s good the Chronicle is taking on climate chance and sea-level rise. It’s good that Carolyn Lochhead is writing about the reality that storms like Hurricane Sandy are part of our future and that all types of coastal development are now at risk. It’s scary:

Naval bases, power plants, ports, highways – trillions of dollars of investment – sit on U.S. coasts because it once made sense to put them there. As people flocked to the shores, tiny beach towns became cities. Congress is hardly maintaining roads and bridges; its appetite for giant new sea walls around New York Harbor has yet to be tested. “You may be able to have the government rebuild New Orleans, and maybe you could have the government rebuild from Sandy,” said John Englander, author of “High Tide on Main Street,” a book on how rising seas will affect the coasts. “But as sea level rises and reclaims shoreline all around the United States and all over the world, governments can’t afford to reimburse that. It’s not just Miami, it’s Charleston, it’s downtown Seattle, it’s Sacramento, it’s every coastal city and city on rivers.”

 Oh yes — and it’s San Francisco, where sea-level rise doesn’t seem to be an issue in the city’s plan for massive real-estate development on the waterfront.

 The Chron has a map of what the Bay Area might look like after a two-foot increase in sea levels and a six-foot increase. It looks like this.

Of course, it might be okay because we can build super-tech levee that will create artificial waterfalls and protect us all from living on islands.

(You could argue that climate change isn’t about new technology, but that would be no fun — and would require actual political leadership.)

Anyway, here’s the problem with the Chron’s map: It makes San Francisco look just fine. The entire city is in white, safe from that pesky inundation that will ruin lesser parts of the bay.

Thing is, the Bay Conservation and Development Commission has spent a ton of time on sea-level rise, and has its own map, that’s a bit more accurate, or at least more detailed — and that shows some major-league problems for this city.

Check out the areas in blue: It’s most of the northen and eastern waterfront. That includes not only Mission Bay, where the city is pinning its hopes for a biotech boom, but also the site of the Warriors Arena, 8 Washington, and 75 Howard. In other words, the plan to make the waterfront into a heavily developed entertainment and residential neighborhood isn’t going to work for very long — unless everyone gives up his or her car and buys a boat. Or unless we, the taxpayers of San Francisco, spend billions protecting all this development that doesn’t make sense in the first place.

Oh, Treasure Island’s going to be a much smaller island, too.

It’s entirely possible — and likely — that state, federal, and local tax money will go to protect some essential, vulnerable coastal areas. It makes no sense to try to move both the San Francisco and Oakland airports; we’re going to build barriers to protect them. But how are we going to protect an arena that’s built out over the water when the water starts to lap up to the doors? Who’s paying for that?

The Chron has done a good job asking the questions at the national level — but, just as we so often see with economic inequality and tax policy, nobody wants to bring the message home.

The (bad) Warriors deal, by the numbers

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Rudy Nothenberg, who ran Muni and the city’s water system, was chief administrative officer, negotiated the deal for the Giants ballpark, and served under six San Francisco mayors, stopped by the office last week to talk to us about the Warriors Arena. We’ve had our fights with Nothenberg (as we would with anyone who was that close to Willie Brown and Dianne Feinstein) but the guy knows more about City Hall, public works, private development, and infrastructure finance than almost anyone alive. So we were happy to hear what he had to say.

Let’s be clear, here: Nothenberg lives near where the arena is slated to be built, and, as he was quick to tell us, he doesn’t want it in his backyard. But he also presented a compelling case that San Francisco is getting ripped off. And he had a few pointed things to say about the lack of negotiating skills among the members of Mayor Ed Lee’s administration.

Back when Nothenberg was talking to the Giants about a stadium at Third and King — at that point a district of dilapidated and underused warehouses — always kept a card in his back pocket. “I always knew that if things didn’t work out and we didn’t build the stadium, that would be okay too,” he said. In other words: You can’t get a good deal if you’re not prepared to walk away. And when it comes to the Warriors proposal, the mayor has made it so clear that this is his legacy that the team knows the city will never walk away. So one side of the talks can demand pretty much anything, and the other side has no leverage.

Oh, and it doesn’t hurt that just about every development lawyer, political consultant, and lobbyist in town is already working on the project. “They have co-opted everyone,” Nothenberg — no stranger to the dark side of politics — told us.

The exact terms of the deal are still not public, which is a bit odd since the city has already started its environmental review. (Can you really do an environmental impact report on a project when you don’t know what the project actually is? Two difference state courts have come to opposite conclusions, so for now the answer is: maybe.)

But there’s enough information out there for Nothenberg to give us a basic rundown on the financing — and it doesn’t look good. “The Port is really not getting anything out of the deal,” he said. The city will get some increased sales and business taxes, and the Warriors will have to pay housing and transit fees. But there won’t be a lot of new property tax revenue, since that will all go to pay for the arena.

Here’s how Nothenberg laid out his analysis:

The Warriors have to spend $120 million to replace Piers 30-32. (Costs a lot to build such a huge structure over the water.) To make the team whole, the city will sell the Warriors a seawall lot on the other side of the Embarcadero for $30 million, then give the $30 million right back to the team. Then the city will set up an Infrastructure Finance District — the 2013 equivalent of a redevelopment agency — use the future tax increments to fund a $50 million bond. The Warriors get the bond money; the city pays it back. Oh, and then the city gives the team $30 million worth of rent credits, meaning the Warriors will probably never pay any rent at all for the use of that public property. And to make it sweeter, San Francisco will pay the Warriors 13 percent interest on the rent-credit money.

Meanwhile, the local taxpayers will have to come up with a huge amount of money to increase Muni capacity, since the existing transit can’t possibly handle the load of the new arena. Yes, the Warriors, like any developer, will have to pay a modest transit impact fee — “but it’s laughable to thing that this will ever cover the capital and operating costs,” Nothenberg said.

To summarize: The wealthy owners of a professional sports team will get free waterfront land to build an immensely valuable new arena. The city will pay to bring the fans there and get them home, deal with the traffic impacts — and get almost nothing in return.

Good one, Mr. Mayor.

Chiu’s committee assignments keep the moderates in charge

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A week after engineering his unanimous re-election to an unprecedented third consecutive term as president of the Board of Supervisors, David Chiu today announced his assignments to board committees, placing fiscal conservatives into two of the most powerful posts and making himself a key swing vote on the Land Use Committee.

“I believe these committee assignments reflect a balanced approach and the diverse interests and talent of the supervisors,” Chiu said just after 4pm during the Roll Call portion of today’s meeting.

But some progressive activists were immediately grousing about some of the selections, which seem to reflect Chiu’s neoliberal approach to governance, preventing progressives from doing much to challenge development interests or the appointment of Establishment insiders to city commissions.

The Land Use Committee is perhaps the most powerful and impactful, particularly as the Warriors arena and other controversial waterfront developments and the CPMC hospital deal come to the board. Scott Wiener – a moderate who is already perhaps the most prolific supervisor – gains far more power as he is named to chair that committee. It is balanced out by Chiu and Sup. Jane Kim, both of whom have some progressive impulses on land use issues but also personal ambitions and a penchant for cutting deals. Developers have to be happy about this lineup.

Sup. Mark Farrell was named chair of the Budget Committee, succeeding Sup. Carmen Chu – a pair that are indisputably the most conservative supervisors on the board. While progressive Sups. Eric Mar and John Avalos will help balance out the permanent committee, their influence will be offset by the temporary members added during budget season: Sups. London Breed and Wiener.

That roster essentially puts Breed in the swing vote role, which should immediately give her some clout. Chiu’s defenders note that Budget’s balance of power is essentially status quo (with Breed now in the same swing vote role that Sup. Malia Cohen played) – and that the committee’s work last year was supported by labor and business interests alike.

Chiu is proposing to combine the Public Safety and City Operations & Neighborhood Services committees, naming Sup. David Campos as chair, Mar as vice-chair, and new Sup. Norman Yee as its third member. Yee, who nominated Chiu for president last week, was also rewarded with a chair on the Rules Committee – controlling appointments, it arguably the board’s third most influential committee after Land Use and Budget – with that committee filled out by Breed and Sup. Malia Cohen.

Speculation that Cohen and Kim would be rewarded for withdrawing their nominations as president before the vote last week don’t seem to have materialized in these appointments. Cohen was also named to the Government Operations Committee, along with Campos, which Sup. Carmen Chu will chair. That doesn’t give Cohen, who told us that she wanted to be on Land Use, much power.

Similarly, Kim was named chair of the City & School District Committee – nice, but not exactly a political launching pad – and Kim’s only real power on Land Use will come when Chiu is opposing some project, as he did with the controversial 8 Washington project that Kim and seven of her colleagues supported.

Aaron Peskin, Chiu’s predecessor as board president, said that he vaguely saw some semblance of Chiu’s claimed strategy of having conservative committee chairs balanced out by liberal majorities (although even that depends on how you define your terms). Yet Peskin questions that approach, and sees committees unlikely to really gel around good decisions or policies.

“It’s a recipe for dysfunction,” Peskin told us. “But it certainly will be fun to watch.”

War of the waterfront

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tredmond@sfbg.com

There’s a blocky, unattractive building near the corner of Howard and Steuart streets, right off the Embarcadero, that’s used for the unappealing activity of parking cars. Nobody’s paid much attention to it for years, although weekend shoppers at the Ferry Building Farmers Market appreciate the fact that they can park their cars for just $6 on Saturday and Sunday mornings.

But now a developer has big plans for the 75 Howard Street site — and it’s about to become a critical front in a huge battle over the future of San Francisco’s waterfront.

Paramount Partners, a New York-based real-estate firm that also owns One Market Plaza, wants to tear down the eight-story garage and replace it with a 350-foot highrise tower that will hold 186 high-end condominiums. The new building would have ground-floor retail and restaurant space and a public plaza.

It would also exceed the current height limit in the area by 150 feet and could be the second luxury housing project along the Embarcadero that defies the city’s longtime policy of strictly limiting the height of buildings on the waterfront.

It comes at a time when the Golden State Warriors are seeking permission to build a sports arena on Piers 30 and 32, just a few hundred feet from 75 Howard.

Between the proposed 8 Washington condo project, the arena, and 75 Howard, the skyline and use of the central waterfront could change dramatically in the next few years. Add to that a $100 million makeover for Pier 70, the new Exploratorium building on Pier 15, and a new cruise ship terminal at Pier 27 — and that’s more development along the Bay than San Francisco has seen in decades.

And much of it is happening without a coherent overall plan.

There’s no city planning document that calls for radically upzoning the waterfront for luxury housing. There’s nothing that talks about large-scale sports facilities. These projects are driven by developers, not city planners — and when you put them all together, the cumulative impacts could be profound, and in some cases, alarming.

“There hasn’t been a comprehensive vision for the future of the waterfront,” Sup. David Chiu told me. “”I think we need to take a step back and look at what we really want to do.”

Or as Tom Radulovich, director of the advocacy group Livable City, put it, “We need to stop planning the waterfront one project at a time.”

 

Some of the first big development wars in San Francisco history involved tall buildings on the waterfront. After the Fontana Towers were built in 1965, walling off the end of the Van Ness corridor in a nasty replica of a Miami Beach hotel complex, residents of the northern part of the city began to rebel. A plan to put a 550-foot US Steel headquarters building on the waterfront galvanized the first anti-highrise campaigns, with dressmaker Alvin Duskin buying newspaper ads that warned, “Don’t let them bury your skyline under a wall of tombstones.”

Ultimately, the highrise revolt forced the city to downzone the waterfront area, where most buildings can’t exceed 60 or 80 feet. But repeatedly, developers have eyed this valuable turf and tried to get around the rules.

“It’s a generational battle,” former Sup. Aaron Peskin noted. “Every time the developers think another generation of San Franciscans has forgotten the past, they try to raise the height limit along the Embarcadero.”

The 8 Washington project was the latest attempt. Developer Simon Snellgrove wants to build 134 of the most expensive condominiums in San Francisco history on a slice of land owned in part by the Port of San Francisco, not far from the Ferry Building. The tallest of the structures would rise 136 feet, far above the 84-foot zoning limit for the site. Opponents argued that the city has no pressing need for ultra-luxury housing and that the proposal would create a “wall on the waterfront.”

Although the supervisors approved it on a 8-3 vote, foes gathered enough signatures to force a referendum, so the development can’t go forward until the voters have a chance to weigh in this coming November.

Meanwhile, the Paramount Group has filed plans for a much taller project at 75 Howard. It’s on the edge of downtown, but also along the Embarcadero south of Market, where many of the buildings are only a few stories high.

The project already faces opposition. “The serious concerns I had with 8 Washington are very similar with 75 Howard,” Chiu said. But the issues are much larger now that the Warriors have proposed an arena just across the street and a few blocks south.

“Because of the increase in traffic and other issues around the arena, I think 75 Howard has a higher bar to jump,” Sup. Jane Kim, who represents South of Market, told me.

Kim said she’s not opposed to the Warriors’ proposal and is still open to considering the highrise condos. But she, too, is concerned that all of this development is taking place without a coherent plan.

“It’s a good question to be asking,” she said. “We want some development along the waterfront, but the question is how much.”

Alex Clemens, who runs Barbary Coast Consulting, is representing the developer at 75 Howard. He argues that the current parking garage is neither environmentally appropriate nor the best use of space downtown.

“Paramount Group purchased the garage as part of a larger portfolio in 2007,” he told me by email. “Like any other downtown garage, it is very profitable — but Paramount believes an eight-story cube of parking facing the Embarcadero is not the best use of this incredible location.”

He added: “We believe removing eight above-ground layers of parked cars from the site, reducing traffic congestion, enlivening street life, and improving the pedestrian corridor are all benefits to the community that fit well with the city’s overall goals. (Of course, these are in addition to the myriad fees and tax revenues associated with the project.)”

But that, of course, assumes that the city wants, and needs, more luxury condominiums (see sidebar).

 

Among the biggest problems of this rush of waterfront development is the lack of public transit. The 75 Howard project is fairly close to the Embarcadero BART station, but when you take into account the Exploratorium, the arena, and Pier 70 — where a popular renovation project is slated to create new office, retail, and restaurant space — the potential for transit overload is serious.

The waterfront at this point is served primary by Muni’s F line — which, Radulovich points out, “is crowded, expensive, low-capacity, and not [Americans with Disabilities Act]-compliant.”

The T line brings in passengers from the southeast but, Radulovich said, “if you think we can serve all this new development with the existing transit, it’s not going to happen.”

Then there are the cars. The Embarcadero is practically a highway, and all the auto traffic makes it unsafe for bicycles. The Warriors arena will have to involve some parking (if nothing else, it will need a few hundred spaces for players, staff, and executives — and it’s highly unlikely people who buy million-dollar luxury boxes are going to take transit to the arena, so there will have to be parking for them, too. That’s hundreds of spaces and new cars — assuming not a single fan drives.

The 75 Howard project will eliminate parking spaces, but not vehicle traffic — there will still be close to 200 parking spaces.

And all of this is happening at the foot of the Bay Bridge, the constantly clogged artery to the East Bay. “Oh, and there’s a new community of 20,000 people planned right in the center of the bridge, on Treasure Island,” Peskin pointed out.

Is it possible to handle all of the people coming and going to the waterfront (particularly on days where there’s also a Giants game a few hundred yards south) entirely with mass transit? Maybe — “that’s the kind of problem we’d like to have to solve,” Radulovich said. Of course, the developers would have to kick in major resources to fund transit — “and,” he said, “we don’t even know what the bill would be, and we don’t have the political will to stick it to the developers.”

But a transit-only option for the waterfront is not going to happen — at the very least, thousands of Warriors fans are going to drive.

The overall problem here is that nobody has asked the hard questions: What do we want to do with San Francisco’s waterfront? The Port, which owns much of the land, is in a terrible bind — the City Charter defines the Port as an enterprise department, which has to pay for itself with revenue from its operations, which made sense when it was a working seaport.

But now the only assets are real estate — and developing that land, for good or for ill, seems the only way to address hundreds of millions of dollars in deferred maintenance and operating costs on the waterfront’s crumbling piers. And the City Planning Department, which oversees the land on the other side of the Embarcadero, is utterly driven by the desires of developers, who routinely get exemptions from the existing zoning. “There is no rule of law in the planning environment we live in,” Radulovich said. So the result is a series of projects, each considered on its own, that together threaten to turn this priceless civic asset into a wall of concrete.

Aggressive Warriors

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steve@sfbg.com

No standard defensive strategy is likely to stop the Golden State Warriors, Mayor Ed Lee, and their huge team of partners and employees from dominating the game of approving construction of a new basketball and concert arena on San Francisco’s central waterfront. That became clear on Nov. 14, as the political operation overcame fire, darkness, and neighborhood-based opposition for the first big score.

The Board of Supervisors Budget and Finance Committee was set to consider declaring the project, which the Warriors want to build on Piers 30-32 by the 2017 basketball season, to be “fiscally feasible,” recommending it move forward with more detailed environmental studies and a term sheet nailing down myriad administrative details.

Before the 11am hearing, the project team held a packed press conference to announce that the Warriors had volunteered to abide by the city’s local-hire standards for public works projects, hiring San Francisco residents or military veterans for at least 25 percent of total construction jobs and 50 percent of apprenticeships. A beaming Lee praised the deal as an “unprecedented” indicator of the Warriors’ willingness to partner with the city.

The event overflowed with union members in hard hats and orange “Build It Now!” T-shirts, as well as a full range of local political pros, from former mayoral and current project spokespersons PJ Johnston and Nathan Ballard to former aides to progressive supervisors, David Owen and David Loyola. Among the agreement’s four signatories were Joshua Arce, the Brightline Defense Project head who last year crusaded for Sup. John Avalos’s local hire ordinance, and building trades chief Michael Theriault.

Strikingly missing at the press conference was Sup. Jane Kim, in whose District 6 the project would be built — over the objections of many residents who are raising concerns about the loss of waterfront views, huge crowds attending what is projected to be more than 200 events per year, high interest rates paid by city taxpayers, the project’s accelerated approval schedule, and other concerns.

Kim is one of the three members of the Budget Committee, which held its meeting despite an electrical fire in the basement of City Hall that knocked out power to the building. Portable photography lighting was brought in to supplement the emergency backup lights, making it bright enough so the televised show could go on but giving a strangely surreal feel to the proceedings and reinforcing the urgency project supporters feel to move this forward without delay.

Kim raised the concerns of her constituents, winning support for amending the resolution to ensure the Citizens Advisory Committee — whose chair was given two minutes to convey how its members feel steamrolled by the accelerated process, asking it be delayed by a month or two — will be given chances to weigh in and pushing the EIR scoping meetings back a few weeks to January.

In the end, Kim and the committee voted to move the project forward. A few days later, on Nov. 19, the process repeated itself with another flashy press conference in the Mayor’s Office — with another important union endorsing the project — followed by the Land Use Committee responding favorably to the project.

The full Board of Supervisors was scheduled to approve the project’s fiscal feasibility the next day, after Guardian press time, but there was little chance that the full board would take any other action than giving the Warriors, Lee, and their huge roster of teammates what they want.

This despite unusual financing and some very real concerns about waterfront development.

 

 

JOBS, MONEY, AND SUPPORT

Mayor Lee — who has placed a high priority on this project since announcing his deal with the team in May — emphasized its job creation and contribution to the local economy during the Nov. 19 press conference.

“I remind people, this is a private investment of hundreds of millions of dollars,” Lee said of a project pegged to cost around $1 billion. “It means a lot of jobs, and that is so important to all of us.”

The project is expected to directly create 4,300 jobs: 2,600 construction jobs and 1,700 permanent jobs, including those at the 17,000-seat sports and entertainment arena and the 250-room hotel and 100,000 square feet of retail and restaurants that would be built as part of the project.

“We’ve been spending a lot of these last many months describing what it is we want to build,” Warriors President Rick Welts said at the press conference before casting the project in grander terms. “That’s not really what we’re building. What we’re really building are memories.”

But city residents and workers are looking for more tangible benefits than just the highs of watching big games or concerts. The building trades were already expected to strongly support the project, which only got stronger with last week’s local-hire deal. Labor’s support for the project was broadened on Nov. 19 with the announcement that the Warriors agreed to card-check neutrality for the hotel, making it easier for its employees to join UNITE-HERE Local 2.

“Thank you for being a partner and we’re looking forward to working with you in the future,” Local 2 head Mike Casey, who notably also serves as president of the San Francisco Labor Council, said to Welts at the event before the two signed a formal agreement.

In addition to allowing the hotel workers to easily organize, the Warriors agreed to card-check neutrality for vendors at the arena with at least 15 employees and those outside the arena with more than 45 employees, as well as giving those who now work Warriors’ games at Oracle Arena first dibs on jobs at the new arena.

“I think that speaks a lot about what the project is. It’s not just a San Francisco project, but a Bay Area project,” Casey said. He also said, “I want to thank the mayor for bringing people together and laying all this out.”

While Lee and the Warriors do seem to have this deal pretty well wired, this is still a San Francisco project, a complex one on the politically and environmentally sensitive waterfront that city taxpayers are helping to pay for and one for which the residents there will bear the brunt of its impacts.

 

PAYING FOR IT

Lee, Office of Economic and Workforce Development head Jennifer Matz, and other key project supporters have repeatedly claimed this project is funded completely with private money, noting how rare that is for urban sports stadiums these days.

But in reality, city taxpayers are spending up to $120 million for the Warriors to rebuild the unstable piers on which the arena will be built, plus an interest rate of 13 percent, an arrangement that has drawn criticism from a key source.

Rudy Nothenberg, who served as city administrator and other level fiscal advisory roles to six SF mayors and currently serves as president of the city’s Bond Oversight Committee, wrote a Nov. 12 letter to the Board of Supervisors urging it to reject the deal.

“Quite simply, I would have been ashamed of such a recommendation,” Nothenberg wrote of the high interest rate. “In today’s markets it is incomprehensible to have such a stunning recommendation brought to your honorable Board in such haste.”

Johnston and Matz each disputed Nothenberg’s characterization, citing a report by the project consultants, the Berkeley-based Economic and Planning Systems Inc. (EPS), that 13 percent is a “reasonable and appropriate market based return.”

Matz told us the rate was based on the risky nature of rebuilding the piers, for which the Warriors are responsible for any cost overruns. And she compared the project to the massive redevelopment projects now underway on Treasure Island and Hunters Point, from which the city is guaranteeing powerful developer Lennar returns on investment of 18.5 percent and 20 percent respectively.

Johnston, who was press secretary to former Mayor Willie Brown and worked with Nothenberg on building AT&T Park and other projects, told us “I have great respect for Rudy.” But then he went on to criticize him for taking a self-interested stand to defend the views from the condo he owns nearby: “They don’t want anything built in their neighborhood. They would rather leave it a dilapidated parking lot.”

But Nothenberg told us his stand is consistent with the work he did throughout his public service career in trying to keep the waterfront open and accessible to the public, rather than blocking those views with a 14-story stadium and hotel complex.

“I have a self-interest as a San Franciscan, and after 20 years of doing the right thing, I don’t want to see this rushed through in an arrogant way that would have been unthinkable even a year ago,” Nothenberg told us. “I spent 20 years of my life trying to deal with waterfront issues.”

He is being joined in his opposition by other neighborhood residents, land use experts such as attorney Sue Hestor, some opponents of the 8 Washington project concerned with the creeping rollback of waterfront development standards, and members of the Citizens Advisory Committee who have felt steamrolled by the rapid process so far and unable to thoroughly discuss the project or the neighborhood’s concerns.

“We would like to slow this process down,” committee Chair Katy Liddell told supervisors on Nov. 14. “Things are going so quickly.”

 

DETAILS OF THE DEAL

The $120 million plus interest that the city will owe the Warriors would be offset by the $30 million the team would pay for Seawall Lot 330 (the property across from the piers where the hotel would be built), a one-time payment of $53.8 million (mostly in development impact fees), annual rent of nearly $2 million on its 66-year lease of Piers 30-32, and annual tax and mitigation payments to the city of between $9.8 million and $19 million.

Kim raised concerns at the Budget Committee hearing about the more than 200 events a year that the arena will host, but she was told by Matz that’s necessary to make the project pencil out for the Warriors.

Many of the project’s financial and administrative details are still being worked out as part of a term sheet going to the Board of Supervisors for approval, probably in April. Other details will be studied in the project Environmental Impact Report, which is expected to come back to the board in the fall.

The Department of Public Works, Police Department, and — perhaps most critically given its impact on Muni and roadways — Municipal Transportation Agency have yet to estimate their costs.

“We do have a lot of concerns in the neighborhood about this project,” Kim told the Land Use Committee, singling out impacts to the transportation system as perhaps the most important, followed by quality-of-life issues associated with huge crowds of sports fans.

Kim noted that the area already has a problematic transportation infrastructure, with some of the highest rates of motorist-pedestrian collisions in the city and a public transit system that reaches capacity at peak times, and said that many residents worry this project will make things worse. The EIR will deal with the transportation details. But Kim praised how about half the space on the piers, about seven acres, will be maintained as public open space: “I think the open space aspect is incredible and it could actually increase access to the waterfront.” In the end, Kim urged project proponents to heed the input of the CAC and other concerned parties because, “This could be a very valuable project, or it could also be a disaster.”

Critics urge caution on fast-moving Warriors arena deal

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UPDATED The proposal to let the Golden State Warriors build a new sports arena complex at Piers 30-32 is moving forward quickly, with the Board of Supervisors Budget and Finance Committee considering approving its fiscal feasibility tomorrow (Wed/14), the Land Use Committee hearing its design and transportation aspects on Monday, and the full board scheduled to move it forward on Tuesday, two days before Thanksgiving. After that, it will undergo an environmental study and work on myriad fiscal and administrative details, coming back to the board for final approval, probably in the fall, with the goal of opening by the 2017 basketball season.

[UPDATE 11/14: The Finance Committee today voted 3-0 to approve findings of fiscal feasibility for the project after Sup. Jane Kim made amendments delaying the EIR scoping session until January and ensuring the Citizens Advisory Committee will be given more time to review the project and its term sheet. City officials and the Warriors also signed a deal this morning requiring that at least 25 percent of its construction jobs and half of its apprenticeship positions go to local residents or military veterans. We’ll have more details and analysis of what happened in the coming days.]

Critics of the project say it is being rammed through too quickly, with too little public notice or attention to blocking off views of the bay, and on terms that are too costly to city taxpayers. To some, Lee’s quest for a “legacy project” is reminiscent of the groupthink boosterism that characterized the initial America’s Cup proposal, before it was revealed to really be a lucrative waterfront real estate scheme that was great for developers but costly to the public, and later abandoned.

And just like last time, when the Guardian, then-Sup. Chris Daly, Budget Analyst Harvey Rose, and others forced a major scaling back of the developers’ ambitions, there are some prominent voices of caution now being raised about the Warriors arena deal and its potential to fleece city taxpayers, including concerns raised by someone with decades of experience shepherding some of San Francisco’s biggest public works projects.

Rudy Nothenberg, who served as city administrator and other level fiscal advisory roles to six SF mayors and currently serves as president of the city’s Bond Oversight Committee, yesterday wrote a letter to the Board of Supervisors urging it to reject the deal.

Among other things, he criticized the 13 percent interest that city taxpayers would pay on the $120 million in pier restoration work that the Warriors will do. “Quite simply, I would have been ashamed of such a recommendation,” Nothenberg wrote. “In today’s markets it is incomprehensible to have such a stunning recommendation brought to your honorable Board in such haste.”

Project spokesperson PJ Johnston and its main advocate City Hall, Office of Economic and Workforce Development head Jennifer Matz, each disputed Nothenberg’s characterization, citing a report by the project consultants, the Berkeley-based Economic and Planning Systems Inc. (EPS), that 13 percent is a “reasonable and appropriate market based return.”

Matz told us the rate was based on the risky nature of rebuilding the piers, for which the Warriors are responsible for any cost overruns. And she compared the project to the massive redevelopment projects now underway on Treasure Island and Hunters Point, from which the city is guaranteeing powerful developer Lennar returns on investment of 18.5 percent and 20 percent respectively.

Johnston, who was press secretary to former Mayor Willie Brown and worked with Nothenberg on building AT&T Park and other projects, told us “ I have great respect for Rudy.” But then he went on to criticize him for taking a self-interested stand to defend the views from the condo he owns nearby: “They don’t want anything built in their neighborhood. They would rather leave it a dilapidated parking lot.”

But Nothenberg told us his stand is consistent with the work he did throughout his public service career in trying to keep the waterfront open and accessible to the public, rather than blocking those views with a 14-story stadium and surrounding commercial and hotel complex.

“I have a self-interest as a San Franciscan, and after 20 years of doing the right thing, I don’t want to see this rushed through in an arrogant way that would have been unthinkable even a year ago,” Nothenberg told us. “I spent 20 years of my life trying to deal with waterfront issues.”

Among those also sounding the alarm about how quickly this project is moving is land use attorney Sue Hestor and former Mayor Art Agnos, who told us the supervisors should heed the input of Nothenberg and make sure this is a good deal for the city.

Agnos said, “Rudy Nothenberg stands apart from every other department head and CAO in the modern history of San Francisco for his financial and managerial expertise in bringing major projects with complex finances to completion that worked for our City. That is why the past six mayors…whether conservative or liberal…trusted him to advise them and administer the biggest projects in this city from Moscone Convention Center to the new main library to the Giants baseball park and Mission Bay. “

Legislative Analyst Harvey Rose released his initial analysis of the project on Friday. The $120 million plus interest that the city is paying to the Warriors would be partially offset by the $30 million the team would pay for Seawall Lot 330, a one-time payment of $53.8 million (mostly in development impact fees), annual rent of nearly $2 million on its 66-year lease of Piers 30-32, and annual tax and mitigation payments to the city of between $9.8 million and $19 million.

But the report also notes that many city departments and agencies – including the Department of Public Works, Municipal Transportation Agency, and the Police Department – have yet to estimate their costs. Both Johnston and Matz emphasized Rose’s conclusion that the project is “fiscally feasible” – the determination that supervisors will have to agree with to move the project forward – but the report also noted “the finding of ‘fiscal feasibility’ means only that the project merits further evaluation of environmental review.”

The full text of Nothenberg’s letter follows:

Dear Supervisors:

My experience as a high level financial advisor and city administrator for Mayors Moscone, Feinstein, Agnos, Jordan, Brown, and Newsom, and current President of the City’s Bond Oversight Committee cause me to write in the hope that you will reject the outrageous 13% interest rate that the developers of the waterfront arena are proposing to charge the City for their cost of replacing Piers 30/32. 

In my years as General Manager of Public Utilities, the Municipal Railway System, Water and Hetch Hetchy, and later as the Chief Administrative Officer for the City and County of San Francisco, I took probably more that a billion dollars worth of various debt instruments to the Board. 

Never…even in the worst days of highest modern era interest rates of the 1970’s hovering at 20% …never did I ever bring a 13% City borrowing to the Mayor and the Board of Supervisors for approval.  Quite simply, I would have been ashamed of such a recommendation.

In today’s markets it is incomprehensible to have such a stunning recommendation brought to your honorable Board in such haste. 

Even more remarkable is the fact that just weeks ago, Allentown, Pennsylvania has just procured a 4.78 % interest rate for $224.4 million of taxable bonds to help build with private contributions a hockey arena for 8500 seats. 

Yet, you are being told the best our city can do is 13% for $120 million.

No Board of Supervisors I ever appeared before would tolerate such dramatic discrepancy.

It is with this in mind, I would most respectfully urge you to send this proposed deal back to the developers, instructing the City’s negotiators not to bring it back without a far more favorable interest rate for City tax payers not to exceed a maximum of 7.5%.

And that would still be almost twice what the City would need to pay for City issued debt and more than amply compensate the developers for any risk premium that they allege that they are taking. 

Any such instruction from you to the City negotiators should also make it clear that they are not to make any new concessions to the developers in exchange for achieving a still high, but eminently more reasonable interest rate.

Thank you for your attention.

Rudy Nothenberg

Chief Administrative Officer (Ret.)

Documentation:

1.     The Warriors Arena negotiates 13% interest on $120 million from San Francisco when the City of Allentown in Pennsylvania just issued $224.4 million of taxable bonds for an arena at an average interest rate of 4.78%. 

13% for SF versus 4.78%  for Allentown

 http://www.allentownpa.gov/Home/AllentownCityNews/tabid/142/xmmid/636/xmid/2000/xmview/2/Default.aspx

City of Allentown – PA – Official Site

www.allentownpa.gov

The official website for the City of Allentown, PA. Learn about all the exciting events going on in the city of Allentown, from music, arts, theater, and sports. Allentown is the largest city in the 

2.     Allentown hockey arena bonds cost $4.2 million to issue 

www.lehighvalleylive.com/allentown/…/allentown_hockey_ar

Oct 10, 2012 – About $224.4 million in municipal bonds were sold last week to help finance arena construction. City officials say the issuance costs are about 

 

 

Newsom will vote on campaign donors’ projects

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On the front page of the Chronicle Aug. 12, California Watch reported that Lieutenant Governor Gavin Newsom has been promoting the interests of campaign donors in San Diego and San Bernardino. It’s nothing criminal, but it looks bad – and it’s just the start.

Newsom, who sits on the state Lands Commission (one of the few critical duties of the Lite Guv) has received thousands of dollars in donations from interested parties looking to exploit San Francisco’s waterfront, public records show. And he will be voting on the future of their projects.

Newsom received $2,000 for his 2014 campaign from two lawyers, Neil Sekhri and Mary Murphy. Both attorneys are at the law firm Gibson, Dunn and Crutcher, and are involved with the controversial 8 Washington project – which comes before the Lands Commission Aug. 14. Since part of the site of the most expensive condos in San Francisco history is state Tidelands Trust property, the state has to approve the deal. Newsom will be one of three members voting.

The future site for the Golden State Warriors arena is along the waterfront. The decision to turn over that land to private investors will come before Newsom’s panel, too – and Newsom has received more than $6,000 from interested parties.
The Strada Investment Group, which is representing the Warriors as a development consultant, gave Newsom $5,000, records on file with the Secretary of State show. Jesse Blout, real estate investor for the group contributed $750. Scott Stafford, principal, contributed $750. Marty Glide, chief executive officer of the Warriors, contributed $2,000 Newsom’s campaign.

Aaron Peskin, former supervisor and a foe of 8 Washington, issued a press release Aug. 13 calling on Newsom to recuse himself from voting on that project. Newsom’s office hasn’t responded to us, but it’s a safe bet that’s not going to happen. Newsom didn’t get where he is by stiffing campaign donors when they need him on a big vote.

There’s another  problem with the Lands Commission vote on 8 Washington. According to former City Attorney Louise Renne, the commission can’t vote on a project that doesn’t actually exist.

Her argument, laid out in an Aug. 7 letter to the commission, is simple: More than 31,000 San Francisco voters signed a petition demanding a vote on the project – and the Department of Elections has certified the referendum for a citywide vote. That can’t happen until November 2013. “Under these circumstances,” Renne wrote, “you do not have a currently valid 8 Washington Street/Seawall Lot 351 project before you for consideration. Approvals of the project are suspended by law.”

Does the commission even care if what it’s doing is legal? Anyone placing bets?

UPDATE: We just got a statement from Newsom’s chief of staff, Chris Garland, who told us that the Attorney General’s Office and the Lands Commission legal staff agreed that none of the panel members have a conflict of interest.  “The lieutenant governor has enjoyed the support of parties on both sides of this issue and is capable of looking at the item impartially and doing what is right for the state,” he said. “This isn’t a matter of contributions; it’s matter of calling balls and strikes on an important project.”

Okay then.

Guardian voices: The labor agreement that changed SF

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This year marks the 53rd anniversary of the beginnings of  negotiations between the International Longshoreman’s and Warehouseman’s Union and the Pacific Maritime Association over what came to be known as the “Mechanization and Modernization Agreement.”  Signed in October, 1960, after months of talks,  the “M and M agreement” transformed San Francisco’s economy forever, moving its founding industry — shipping and trans shipping — to the East Bay, opening up the land once devoted to maritime uses to real estate development, and setting off the modern political era of San Francisco.

The agreement allowed containerization to come into the San Francisco Bay, making obsolete  the finger piers along San Francisco’s waterfront and the ILWU’s “gangs” that worked on them, hand-loading “break bulk” cargo into the holds of cargo ships. The new technology of shipping cargo in a single  container that could be transported by truck, train, and ship without unloading  transformed maritime trade.

During World War II, shipbuilding and shipping were  fundamental in the effort to move billions of tons of supplies and millions of troops across the global battlefield. In both cases the  San Francisco Bay was ground zero in that in that effort.

Kaiser and Bechtel, two Bay Area-based construction companies, wildly successful in undertaking huge construction projects during the New Deal, were urged to build ships during the war. Kaiser in Richmond and Bechtel in Sausalito constructed  huge shipyards that  built cargo ships by the hundreds, bringing tens of thousands of workers to the Bay Area and changing the demographics of the region for ever. These huge industrial centers didn’t last after the war, and while they transformed who lived in the region, they didn’t really have a lasting economic impact.

But wartime changes in cargo handling did.

For as long as San Francisco had been a city, it depended on its port as the base of its economy. The Gold Rush happened here in part because we had a port and the world rushed in on ships. The enduring fortunes were made during that period by merchants and shipping companies were totally dependent on shipping and cargo handling.

At the heart of the maritime economy was the longshoreman who, by hand, loaded and unloaded ships’ holds. The demand for speed during WWII saw the then-revolutionary introduction of the fork lift truck on the piers of San Francisco, replacing hands with a machine for the first time in the history of the San Francisco waterfront.

But that was only the beginning. New ship designs and new shipping techniques were invented to meet the needs of global war. Since most of the Pacific islands that were the military objectives of the war had no ports or piers, ships were designed that could land directly on a beach and unload preloaded trucks.  Preloaded containers were simply stacked on the decks of Liberty ships, avoiding the need to load the cargo below decks.  By the Korean War these containers were in such regular use by the Army that ships were modified to carry only them, replacing below-deck cargo entirely.

Since ports and piers had been major targets during the war and required extensive rebuilding in both Europe and Asia,  new cargo handling techniques were built into these new facilities, making US ports, undamaged by the war, outmoded and old fashioned.  If US ports were to keep up they had to be modernized.  But who would pay for these new facilities: the shipping business or the government?

San Francisco was still governed by an unbroken line of Republican Mayors during this key period: the anti-New Deal, pro-Mussolini Angelo Rossi; the shipping line owner and anti- ILWU leader Roger Lapham; the pro-real-estate development Elmer Robinson; and finally, the last Republican Mayor of San Francisco, the pro-urban-renewal stalwart George Christopher. These four had no desire to rebuild the waterfront and make the ILWU even stronger. Indeed, Robinson and his successor Christopher had a vision of the waterfront as prime real estate, not working waterfront.

And so, with no commitment to the maritime industry from the city’s leadership and with technological change making the status quo impossible to maintain, Harry Bridges and the leadership of the ILWU cut the best deal they could for their existing members: the 1960 M and M agreement, which gave all existing longshore workers lifetime jobs and very good pay — but sealed the fate of San Francisco waterfront.

By 1962 the Port of Oakland had built its first container facility, and that same year, the first containership, the S.S. Elizabethport, docked and begin loading. By the mid 1970’s, the ILWU was no longer a force in the San Francesco labor movement, its leadership taken by the Building Trades unions  whose  numbers increased as the development boom, fueled by land made vacant by the loss of the maritime industry, grew.

For the rest of the Bay Area, it was San Francisco’s model of waterfront as real estate development that was followed, not Oakland’s investment in cargo shipping. By 1965, development of the Bay was so intense that the McAteer-Petris Act was passed, creating the Bay Conservation and Development Commission, a regional body aimed at limiting the powers of local governments (like San Francisco) in filling and over-developing the Bay.

The 8 Washington battle, the struggle over the Hunters Point shipyard, and the looming battle over the use of a port pier for the Warriors arena all have their history deeply rooted in the 1960 M and M agreement.

In this second decade of the 21st century, our greatest challenge is creating and sustaining meaningful employment. Would our prospects be better if we had somehow been able to keep some maritime uses at the port? Would families in Bay View-Hunters Point be more able to buy homes in their own neighborhood if the same kinds of jobs that allowed their grandparents to buy theirs still existed? Would the boom-or-bust cycle of our real-estate dependent local economy been so disruptive if we had a more steady state base of a maritime sector — which kept the Great Depression from being so devastating in San Francisco in the1930s?

These questions are real — and should show that the shape of our economy is made by us and the decisions we make, locally, not solely by techological change, global trends or the far-too-palsied invisible hand of the free market.