Home > 1 > THE BATTLE FOR SAN FRANCISCO – October 18, 2000

THE BATTLE FOR SAN FRANCISCO – October 18, 2000

San Francisco Bay Guardian – October 18, 2000 Pgs. 14-16, 34-35

THE BATTLE FOR SAN FRANCISCO

How big developers, with the help of Mayor Willie Brown, are moving to bulldoze the neighborhoods.
By Savannah Blackwell

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On Feb. 9, in a corridor outside a City Hall hearing room, powerhouse multimedia lobbyist Robert McCarthy pulled housing activist Calvin Welsh aside and told him exactly how the big developers were going to destroy San Francisco’s limits on commercial office development. He didn’t mince words.

Welsh does not recall exactly word for word what transpired that day, but at least one other observer who was present does, and he says it went something like this: “We’re going to fuck you guys,” McCarthy gleefully charged as he poked Welsh in the chest. “We’re going to repeal Prop. M [the 1986 slow-growth law].” And according to McCarthy, there wasn’t much Welsh or any of his other political allies could do about it. (A call to McCarthy’s office was not returned by press time.)

McCarthy’s plan was to take advantage of a law Welsh wanted expanded” a measure that requires commercial office developers to pay the city a special fee that goes to affordable housing construction. Welsh wanted other kinds of big projects, including hotels and retail outlets, to pay the fee as well.

McCarthy wouldn’t oppose that expansion. Instead, he’d simply convince Leslie Katz, one of his friends on the San Francisco Board of Supervisors, to insert language into the law that would define all new multimedia developments as something other than office space. That would mean that these new projects would be exempt from the city’s limits on office construction.

Of course, anyone with any sense knows that multimedia offices are, for all practical planning purposes, the same as offices for lawyers, or accountants, or corporate executives. Many use about the same amount of space for each new employee and thus put the same demand on the city’s transit, parking, housing, and city-services infrastructure.

McCarthy and the developers were getting frustrated by Prop. M’s limits on the amount of new office space that can be built in the city every year. So he was using his political connections and trickery in an attempt to repeal – without a vote of the people – the landmark proposition that 14 years ago had slowed runaway office growth and saved San Francisco’s neighborhoods.

City on the line

The impact of McCarthy’s sneaky plan would have been profound: since many, perhaps most, of the new big office projects that developers want to build in neighborhoods like the Mission District and Potrero Hill were, in fact, designed for Multimedia companies, his legislation could have ended any effective controls on growth. Welsh insisted that McCarthy would never get away with the scheme. “You cannot kill a voter-approved mandate [by getting the Board of Supervisors to pass] an ordinance,” he told the lobbyist. And when the details of McCarthy’s plan became public, even the pro-development supervisors realized the absurdity of his define-away-the-dot-coms plan. Katz’s proposal to designate multimedia office development “research and development” went nowhere.

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But McCarthy wasn’t giving up his goal of overturning Prop. M. Within several months he and a handful of other downtown lobbyists had convinced Mayor Willie Brown to put a measure on the November ballot that would, for all practical purposes, destroy 14 years of city planning policy, wipe out a citizen initiative that has become a national model for growth control, and give big developers the freedom to bulldoze what’s left of San Franciscoˆ‚s thriving neighborhoods and diverse economy.

The future of San Francisco will be on the line Nov. 7, when two competing ballot measures – one, Proposition L, backed by Welsh and a host of housing and neighborhood activists, and the other, Proposition K, the work of Brown, McCarthy, and the developers – vie for voter support.

Prop. K would accelerate the rate of multimedia office development in neighborhoods that are already suffering from overcrowding and gentrification and, as a result, would accelerate the eviction of nonprofits, arts groups, and renters. “This is a repeal of Prop. M,” Welsh told us. “Everything in [Prop. K] could be done by ordinance, except to lift the annual limit on office development, and that’s what Prop. K does.” Of course, Prop. K supporters disagree. “Prop. K attempted to find a balanced approach,” Emilio Cruz said at a Sept. 27 workshop on Prop. K held by the San Francisco Partnership, a pro-business group created by Gap CEO Don Fisher. Cruz, who has taken a leave of absence from his job as the mayor’s director of economic development to lead the Prop. K campaign, argued that the measure “keeps the cap of 900,000 square feet and defines multimedia [developments] as subject to the exactions [fees]. We needed to compromise, and Prop. K does that.

The impact of this election can’t be understated. If the developers win this battle, big new projects will crop up all over the city, in areas that are now mostly residential and light industrial. Those projects will demolish existing buildings that house blue-collar jobs and drive up rents for residents and small businesses (not to mention artists) – and thousands of people will be driven out of town. What’s more, the city’s economy will suffer badly as a result (see “The Dot-Com Road to Ruin,” page 20).

The mayor is pushing Prop. K despite his earlier blessing of a series of discussions between neighborhood activists and business interests that was supposed to lead to a compromise. In doing so, he has stoked the first major development war in San Francisco in more than a decade. “During the first four years [of the mayor’s administration], it seemed that the mayor was willing to have an honest, open, and real dialogue about economic development and community development,” Welsh told the Bay Guardian. “But in the last nine months that’s gone out the window. This guy has decided to lean to one side.” The side that Brown is leaning to is the side of multimedia developers and their representatives who contributed generously to the mayor’s reelection campaign (see “Giving Away the City,” page 18).

Like Old Times

The situation in the mid 1980s that led to the passage of Prop. M is strikingly similar to the situation today: more capitol is being thrown at one particular segment of the economy than actually matches the demand. In those days, the rush was to build high-rise office buildings to accommodate supposedly soaring growth in the real estate, finance, and insurance industries. Today, it’s turning warehouses – whether they’re being used already or not – into dot-com businesses.

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In 1986 Mayor Dianne Feinstein’s “Downtown Plan” was threatening to displace small, South of Market businesses to allow the expansion of office construction – even though studies showed that these small businesses were responsible for most of the city’s job growth. Today, scores of nonprofits, artistic groups, and other less profitable ventures that help sustain the vibrancy of our communities have been forced or are on their way out. As in 1986, those people and companies looking to make money out of a particular segment have convinced the city’s top elected officials to steer planning policy to fit their agenda. But today the stakes are even higher.

In 1986 Prop. M supporters were fighting to protect San Francisco’s local industries, the skyline, the character of the neighborhoods, and the city’s stock of affordable housing. Today Prop. L supporters are fighting to keep people who make less than $100,000 a year from having to see the city. The outcome is fundamental to the very livability of San Francisco. The remnants of the city as we know it are at stake.

Prop. M was based on the notion that San Francisco ought to be developed to make life better for the people who live here, not to help outside financial interests make more money. Passed in 1986, it limited all new office development to 950,000 square feet a year. Unlike Feinstein’s “Downtown Plan,” which was aimed at luring out-of-town capitol to the city and which allowed high-rise development to expand beyond the Financial District, Prop. M sought to protect San Francisco’s native industries and neighborhoods by directing office growth to the existing Financial District. One of its main tenets was that office development should happen where the city’s major public transit corridors are located – that is, downtown – and not in residential and light-industrial neighborhoods.

Prop. M kept the high-rises from spreading to the Mission and other neighborhoods and is part of the reason San Franciscoˆ‚s economy did not suffer a more serious blow in the 1990s. Welch, who helped write Prop. M, says the situation today is even more critical, because so much more money is involved in pushing one industry. The San Francisco Chronicle reported in August, for example, that 227 Bay Area companies attracted more than $2 billion in venture capitol during a three-month period this spring.

“This is the eternal game in San Francisco, in which land use is key to money and all behind-doors political garbage,” Welch said. “It’s all about development here. But now it’s more fundamental. It’s about the transformation of who works here and who lives here. It’s far more intensive and massive [than in 1986].”

There’s a huge rush on to build new office space. City officials have approved some four million square feet of office space since the beginning of this year, adding to the three million already approved before 2000. If the mayor’s measure passes, by 2003 the city could have another 15 million square feet of space – the equivalent of 25 new Transamerica pyramids – approved or under construction, much of it outside of downtown. If all of that space were filled, it would mean 60,000 new office workers pouring into an already overcrowded city – with nowhere near enough housing being built for them. So tens of thousands of existing residents will have to be displaced (see “38,000 Evictions?,” page 21).

Already developers have been exploiting the loophole that McCarthy wanted enshrined in law. In many cases multimedia developers have convinced city planners not to call their proposed office projects offices. They have been allowed to convert warehouses and other spaces for high-tech enterprises without having to go through messy public hearings (and without having to abide by the annual growth limit). Residents who have fought these projects have moved beyond anger and desperation (see “Battle for the Barrio,” page 31). Many of them are now supporting L.

The city wasn’t, and isn’t, prepared to deal with the influx of dot-commers. Finding a parking space in the Mission can take 20 to 30 minutes now. Spillover streets are gridlocked during rush hour. Only the well-off can afford to move to the city. Artists, nonprofits, and now even doctors cannot afford space to work. It’s become glaringly obvious that the developers have taken control of city planning.

“We have been learning and developed an understanding of the planning process and have become much more sophisticated in understanding it,” Eric Quezada, resident programs director for the Mission Housing Development Corporation (MEDA) and a Mission Anti-Displacement Coalition (MAC) organizer, told the Bay Guardian. “One of the most important things that’s happened in San Francisco for many years is that we targeted the planning department and exposed them for the decisions they are making and how it affects the [housing] market. People thought it was just about the market forces. As if there was no facilitation process by the city.”

No Real Planning

Meanwhile, the rising number of reports of mergers and layoffs suggests that the high-tech industry may be leveling out. In fact, the city may be building far more space then the dot-coms need.

That’s the problem with allowing developers to set the planning agenda: the city’s growth is driven by all sorts of factors (greed, speculation, excess capital) that have nothing to do with logical planning for real need. According to Katz’s proposal to categorize multimedia office development as something other than “office use,” the information technology firms need an additional 2.5 million square feet – a figure put out by high-tech industry lobbyists. But the mayor and the developers’ measure would allow the construction of 15 million square feet of office space by 2003 (though not all of that would go to dot-com businesses).

Prop. L is hardly antigrowth: it would allow a little more than 10 million square feet of new office space during the same period and more than two million next year alone. Props. L and K would both change development law governing the city’s southeast section and modify the cap on the amount of new office construction that can be approved in any one year. But there the similarities end. Prop. L does include compromises, such as exempting federal, state, and city office space, Pier 70, and the Hunters Point shipyard – but, unlike K, it maintains the 950,000 square foot limit.

And perhaps more important, Prop. L bans big office development in the Mission and parts of Potrero Hill.

Though its proponents won’t admit it, Prop. K does away with the office limit imposed by Prop. M. It allows for more than seven million square feet in new office construction by the middle of 2001 alone and more than the 950,000-square-foot limit each year thereafter. It exempts Mission Bay’s massive proposed office development, as well as all land under the jurisdiction of the Port of San Francisco. It opens up areas of the city to office development where it is presently banned, such as in parts of SoMa, Telegraph Hill, the Embarcadero, South Beach-Rincon Hill, and Treasure Island.

Prop. K purports to protect parts of the Mission and Potrero Hill from further, large-scale office development for two years. But L proponents say that moratorium is phony, because K fails to stop developers from exploiting the live-work loophole in the city’s planning laws that allows them to construct market-rate lofts supposedly for artists to live and work in. Many of those buildings are being used solely as multimedia office space (see “Strictly Business,” page 26).

Like its predecessor, Prop. M, Prop. L is based on the premise that San Franciscans who live here have an inherent right to continue to do so. Also like Prop. M, it directs office growth to public transit corridors and limits or stops it in several neighborhoods. It bans further office development in the north Mission (except for the Armory project at 14th and Mission Streets) and parts of Potrero Hill. It places a moratorium on commercial office developments in the mid-Market area, SoMa, parts of Potrero Hill, and Bayview-Hunters Point until neighborhood plans for those regions can be established by planners in coordination with residents and approved by the Board of Supervisors. And any proposal for an office development larger than 6,000 square feet would require a public hearing.

Prop. L goes much further than Prop. K toward protecting the most endangered types of organizations in the city: nonprofits and groups dedicated to the arts. It encourages affordable housing development by directing the Board of Supervisors to pass a law requiring dot-com and other office developments to set aside 10 percent of their space to nonprofit groups, at less than market-rate rent. It prevents nonprofits and arts groups from having to compete for space with office developments by calling nonprofit developments “community services.” (The mayor’s measure also exempts nonprofits from the annual limit.) It also requires that developer fees to support housing construction and the arts be adjusted with inflation.

Prop. L also settles the contentious matter of live-work developers’ not paying affordable housing and other fees, by formally categorizing live-work as housing development. Prop. K doesn’t address the live-work issue at all; instead the mayor is backing legislation at the Board of Supervisors that would treat live-work construction as housing development and therefore subject to impact fees. But there’s no guarantee that that legislation will pass (or won’t be killed if Prop. L fails).

Though the mayor and K’s backers claim their measure will establish developer fees for affordable housing and the city’s other needs, passage of the initiative itself will not put those charges into effect. That would require legislation to by the Board of Supervisors. And none of those charges apply to projects built in 2000 – which means some $61 million for affordable housing, transit, and child care the city will never see. “K means more office development [than L] and less money for services,” Welch says.

Brown kills compromise

If Brown weren’t completely beholden to a few very greedy developers and lobbyists, this ballot battle might never have happened. In a highly unusual move earlier this year, the San Francisco Chamber of Commerce and the slow-growth activists very nearly reached a compromise.

About a year ago the business community started debating the dot-com phenomenon and began to ask, “Is this too much of a good thing?” The San Francisco Business Times pointed out that the multimedia office developers wanted more space than the law would allow. At the same time, activists started to note that many live-work units were being used as offices for Web enterprises.

In response to the debate, Brown encouraged Chamber of Commerce vice president Roberta Achtenberg last spring to call for a summit, one in which the disparate interests – from development boosters such as the San Francisco Partnership to neighborhood activists from the Mission, where displacement pains were already severe and anger over massive multimedia office proposals such as Bryant Square palpable – could come to some kind of compromise over how to revise Prop. M to handle the push to build dot-com offices.

The idea was to put that compromise on the ballot, since any changes to Prop. M would require a vote of the people. There was one key point the 30 or so people gathered for those summit meetings quickly agreed on: there was too much office space going into neighborhoods that lacked the infrastructure to handle it – and future development shouldn’t come at the cost of destroying those neighborhoods. From there, the talks led to an outline of principles.

The activists, including Welch and several neighborhood leaders – Quezada and Carlos Romero of MAC, Luis Granados of MEDA, Dick Millet of the Potrero Boosters Neighborhood Association and others from Potrero Hill, and Sophie Maxwell, who is running for supervisor in the Bayview – agreed that they were willing to trade an adjustment in the annual office growth limit for neighborhood protections. (Welch and his housing activist group had been talking to residents from the frontline neighborhoods about their concerns several months before the talks started.) They agreed to exempt already approved projects such as the redevelopment of the Hunters Point shipyard and the construction of the Lucas digital center at the Presidio and Catellus Corporation’s Mission Bay complex – if multimedia development was slowed down in residential areas.

The neighborhoods activists were also willing to allow planners to “borrow” from future years’ office growth allotments if the push for development was particularly strong in a given year – and if the basic tenets of Prop. M were maintained.

After some 20 discussion sessions the Chamber of Commerce put out a list of principles that represented a compromise between the two sides. Those principles included modifying or lifting the office growth limit under Prop. M to accommodate the current backlog of projects. But the principles also stressed that the economic diversity and the character of the city’s neighborhoods should be preserved.

This consensus approach was underscored in a proposal adopted in June by the board of the San Francisco Planning and Urban Research (SPUR) association, a group that traditionally had been friendly to developers. That proposal stressed that office development should occur mostly near major public transit and that large-scale growth should be directed away from neighborhoods.

During preparation for the talks, the two sides had agreed that a few people from both sides – namely land-use attorneys Sue Hester and Tim Tosta and lobbyists McCarthy and Debra Stein – would not be invited. The idea was to avoid the most vocal element of both sides of the issue. It wasn’t a perfect situation by any means, and the final outcome might not have pleased anyone. But it was remarkable that the participants agreed to some basic guidelines – guidelines that the mayor would very soon scrap. According to Welch and others involved, the most strident pro-development forces, the ones not directly involved in the Chamber of Commerce talks, did an end run around that process and went straight to the mayor.

The activists strongly suspect that representatives from the San Francisco Partnership (which has promoted a 1996 Arthur Anderson study urging the elimination of city rules that hinder multimedia development), who were involved in the Chamber of Commerce talks, assisted those who weren’t by complaining to the mayor that the neighborhood activists were getting their way in the talks. At least, that’s what two of the developers who were at the Chamber of Commerce talks put out. A July 3 San Francisco Business Times article quoted Dan Kingsley of SKS Investments, the developer of Bryant Square, saying, “To craft a ballot measure in November, there should be more bipartisan support than exists now.” And it reported that office developer Douglas Rosenberg had yanked his support of the Chamber of Commerce principles. (Kingsley’s projects were already heading toward approval.) Despite the mayor’s blessing of the talks, it soon became apparent he was not going to bless the discussions’ outcome.

In a June 26 meeting with those involved in the Chamber of Commerce discussions, the mayor seemed unimpressed with the compromise. According to participants in that meeting, the mayor said he didn’t like the fact that the proposal failed to create a special category to cover multimedia, the concept proposed by Katz at the behest of McCarthy and other multimedia lobbyists. In fact, he made it clear that he wanted to end any effective limits on office development in San Francisco.

Participants walked out realizing that the Chamber of Commerce compromise was dead. The activists concluded that the talks were simply a way to stall them from getting a measure on the November ballot that would amend Prop. M to deal with the dot-com assault.

“Apparently there was some kind of internal competition among the developers in terms of what their influence would be on the mayor,” Quezada told the Bay Guardian. Why else [other than the developers getting to him] would the mayor kill the compromise? He passed up an opportunity for a win-win situation.”

Achtenberg admitted to the Bay Guardian that the mayor’s decision surprised her. She, along with Welch, had been providing regular updates to Brown on the direction of the talks. He had not raised any objections.

“Mostly we were hopeful that a compromise that served the goals of neighborhoods and business would have been embraced,” Achtenberg said. Then she added, “I think we influenced both proposals.” But she stressed that the Chamber of Commerce is supporting the mayor’s measure.

According to Quezada, angry Mission residents had been carefully following the Chamber of Commerce discussions and were outraged when the mayor killed the compromise. “[The compromise] was not a done deal,” Quezada said. “We would have had to sell it hard to the community. But [the mayor’s decision] helped pull a lot of the troops together. Regardless of the outcomes in November, I think [the mayor’s decision] has backfired on him. He’ll be ruling over a deeply divided city.”

Brown staffer Cruz explained the mayor’s actions at the San Francisco Partnership workshop for Prop. K. He said the Chamber of Commerce compromise did not allow enough office construction to “keep [the dot-com] industry going and the economy healthy.”

“It would have left the next administration in a difficult position,” he said. “We were worried about that.” Cruz also revealed a little bit about who had influenced the measure’s contents. He said Prop. K was the result of picking “the best things” from the Chamber of Commerce compromise, separate proposal from the San Francisco Partnership and SPUR, and a “a few other comments from private interests that, by that time, were circulating on the streets.” The same day the mayor dissed the compromise, the Board of Supervisors signed off on the Bryant Square multimedia development.

Two days later, on June 28, more than 500 people packed the Horace Mann Middle School in the Mission to confront representatives from the Planning Department, which had approved the Bryant Square in May. Enraged residents demanded an end to new lofts as well as office buildings and live-work conversions.

The following weekend Hestor, Debra Walker (a painter who has taken the lead in fighting the displacement of artists), Welch, activists from the Mission, and artist-activist Andrew Wood called a pow-wow. They faced two choices: to sue over each multimedia office project that the developers and planners tried to call something else or to amend Prop. M. The decision to go to the voters as soon as possible was spurred by Welch’s recent acquisition of some inside information. He had heard, secondhand, a comment made by Jack Davis, the mayor’s political consultant who directed the anti-M campaign in 1986, that made him suspect that the mayor and his forces were going to try to repeal Prop. M at the November ballot.

Hestor’s July 5 e-mail announcing the creation of “the daughter of Prop. M,” which would have become Prop. L, went like this: “Last Monday the Board of Supervisors gave the finger to the Mission when it rubber-stamped the more than 165,000 square foot Bryant Square project at 20th and Bryant, surrounded by neighborhood housing serving many low income Latino families,” Hestor wrote. “Over the weekend some of those who had been involved in the [Chamber of Commerce talks] process got angry and decided to call the mayor’s bluff… we drafted the ‘Daughter of Prop. M’ to close the loopholes created by planning development… make the city develop new offices in areas where there is adequate transit (rather than neighborhood locations where people will drive and over-run the neighborhood) AND BAN NEW OFFICE CONSTRUCTION IN THE MISSION AND FORCE PLANNING OF THE AREAS IN THE WESTERN SOUTH OF MARKET, THE BASE OF POTRERO HILL AND BAYVIEW [Hestor’s emphasis].”

The activists took a two-pronged approach, hitting the streets for signatures and also trying to get four supervisors to put it on the ballot. They got three: Tom Ammiano, Sue Bierman, and Mark Leno, Gavin Newsom – their best shot after Sup. Leland Yee declined – ultimately refused to sign.

On July 13 more than 500 people – many of whom had attended the venting session at the middle school – rallied on the steps of City Hall, specifically to protest the Planning Commission’s and the mayor’s policies. By July 31 proponents of Prop. M’s daughter, or the “Honest Planning Initiative,” had gotten enough signatures to get it on the ballot. On Aug. 7 Brown he4eld a meeting in his office to discuss an alternative to the activists’ plan. It had been billed as a discussion, but it was quickly clear there wasn’t going to be much of that. Welch, who participated, told us that the mayor simply wanted the 22 or so assembled to declare outright their support for the measure. Chamber of Commerce CEO Rhea Serphan and SPUR president Jim Chappell were the first to oblige. Welch refused.

The actual text of Prop. K was not ready until two days later, at the last possible moment before the 5 p.m. deadline Aug. 9. That gave the writers just enough time to throw in several highly objectionable items, including the appointment of a so-called development czar who, during a 10-year appointment, would look for neighborhoods willing to accept more multimedia office development. The czar would be appointed by the mayor and would be accountable to nobody. Supervisors and Brown allies Katz, Alicia Becerril, Amos Brown, and Micheal Yaki helped get the measure on the ballot by adding their signatures.

One day before, representatives of developers, including McCarthy, made it clear that they had had early, direct knowledge of the contents of the mayor’s measure: they filed applications for developments that the proposal would grandfather in = only if they were filed by Aug. 9 at 5 p.m. By 5 p.m. on Aug. 9 – just after Cruz had literally run through the halls to deliver Prop. K to the Department of Elections – it was clear that voters would face two very different measures on the ballot dealing with office growth: one that would hasten the destruction of neighborhoods, the loss of jobs and people, and one that would slow it down.

The Developer Lies

After failing to stop Prop. L in court, the proponents of K have started a major disinformation campaign fueled by hundreds of thousands of dollars from developers. Voters can expect a flood of mailers, chief among the charges being that L will drive out a “burgeoning” industry that is contributing to the economic boom times.

“We are now experiencing a textbook case of too much demand chasing too little supply,” Chappell wrote in an Oct. 12 op-ed piece in the san Francisco Chronicle. Then he offered this total falsehood: “Prop. K will encourage the construction of new office space where our city can best handle it – in the downtown area.” (Actually, it’s L that encourages construction downtown and K that pushes it deeper into neighborhoods.)

The “demand” in not due to normal market forces, but to a whopping influx of billions in capitol in a very short amount of time. How long it will last is tough to predict. Currently, office space is available downtown, but dot-coms don’t want to go there because it costs more money. The San Francisco Business Times reported June 9 that many Web outfits are leasing space in live-work buildings simply because it is cheaper, not because they couldn’t find space downtown. And in any case, allowing one type of industry to flourish at the expense of others doesn’t make for sound economic policy.

Prop. K’s proponents claim the measure will let the city “grow smartly,” while L will drive up rents. But that’s just another way of making the same phony supply-and-demand argument: it’s the current administration’s total failure to enforce San Francisco’s basic planning laws and the resulting breakneck speed of office construction – not the lack of space – that is escalating rents, forcing evictions, and disrupting communities. K will make all of that worse.

Prop. K’s supporters also claim, ironically, that Prop. L will widen economic disparity by “redlining” certain neighborhoods. “The permanent shut-down of office development as proposed in Prop. L would likely lead to decreased rents and property values in the redlined areas,” a report put out by real estate firm Grubb and Ellis claims. But it’s the intrusion of higher-rent office space into lower-rent office space into lower-rent neighborhoods that is widening the gap between haves and have-nots. And Prop. K would accelerate the invasion.

Don’t go to Kansas!

The San Francisco Partnership’s Sept. 27 workshop on Prop. K provided a peek at the developers’ campaign. Billed as a discussion on “winning smart growth for San Francisco” and held at the tony City Club of San Francisco, the cocktail reception featured a panel whose members all pushed Prop. K while laying out false charges against L and false claims about K.

First up was Katz, who claimed that “Prop. L will stop all growth.” She is wrong. Prop L allows office development to continue near downtown and parts of SoMa. Under its terms, 10 million square feet of office space can be built or approved by 2003. Despite what the developers say, it does not stop all construction projects larger than 6,000 square feet. It simply requires that those proposals go through a public hearing.

Cruz plugged the fallacious economic argument, saying K will keep rents “at a reasonable rate” and that the city needs to increase the supply of office space “to preserve a balanced economy in San Francisco.” After Cruz, the San Francisco Partnership’s Marie Jones stood up and claimed that she would make the case “for the other side,” but she didn’t do a very honest job of that. She quickly painted Prop. L’s supporters as irrational. Her comment, “You won’t see the raging emotionalism [that you would have] if we had an L supporter up here” brought applause and laughs from the tassel-loafered group. Then she said the measure could not survive a legal challenge, because the provision suggesting office developers provide space to nonprofits at below market rents amounts to commercial rent control (which state law prohibits). She blasted Prop. L’s public hearing requirements: “Every yahoo in San Francisco will be able to come and try to stuff your project.” Finally, she dismissed it as “draconian.”

Then the San Francisco Partnership’s president, Mara Brazer, reassured the crowd that Prop. K would save them from the disaster of L: “Don’t despair if you’re a real estate developer and you feel like moving to Kansas.”

The attendees started to fret about the campaign, worrying who would get the message out and where the money would come from. But they need not have concerned themselves about either. Cruz quickly assured them that the mayor himself was handling the campaign (on behalf of the business community, Cruz added) and that Brown was planning to enlist a well-experienced consultant. Cruz did not name the outfit, but on Oct. 11 the Chronicle’s Matier and Ross reported that Barnes, Mosher and Whitehurst – the firm directing the local Democratic Party machine’s soft money campaign for district elections – had joined the mayor’s Prop. K team, along with Davis and direct-mail specialists Terris and Jaye. Lobbyist Don Solem is handling media calls.

BMW partner Robert Barnes is closely allied with the Alice B. Toklas Lesbian/Gay Democratic Club, which is playing a role in the web of soft money as well. The club’s slate cards have already arrived in voter’s mailboxes. Most of the club’s candidates for supervisor support K. And as for money – it’s rolling on in.

According to reports filed early this month at the San Francisco Ethics Commission, the Yes on K campaign has collected $226,750 – mostly from developers, their lawyer representatives, and other real estate interests. Lobbyists McCarthy and Marcia Smolens each gave $10,000. Rosenberg’s companies contributed $75,000. Other SoMa and Mission developers have forked over tens of thousands of dollars. For example, TST Mission Street gave $50,000, HC&M Commercial Properties $10,000. In an effort to protect his piece of the dot-com pie, live work landlord Victor Makras gave $10,000.

The Campaign to Save San Francisco (Yes on L) had collected $89,000 by the beginning of October. Of that, Doug Engmann, an original backer of Prop. M, contributed $12,500. Former mayoral candidate and original Prop. M backer Clint Reilly spent $44,000 on the petition drive. Engmann and Reilly have contributed nothing close to the $2 million the Chronicle’s Matier and Ross reported Brown claimed the two would kick in (see District Elections Notebook, 10/11/00). Indeed, the bulk of Prop. L’s contributions come from San Francisco residents and are less then $500 each.

Prop. K’s proponents are using one of the oldest campaign tricks in the book: steal the other side’s issue. By appearing to address some of the severe problems caused by rampant office development in the neighborhoods, they hope to convince voters there is no need to vote for L.

The mayor’s Oct. 3 press conference announcing that he would try to find space for nonprofits and artists who’ve been priced out of their practice and performance venues was part of that strategy. Even pro-establishment columnist Ken Garcia didn’t buy it. “Mock Tears for Eviction Victims” headed his Oct. 5 piece in the Chronicle.

In addition, expect Prop. K’s proponents to herald the Planning Commission’s Oct. 19 discussion of Katz’s amendments to the city’s existing legislation requiring office developers to help fund affordable housing as further evidence that Prop. L isn’t needed. They’ll also try to claim that Katz’s proposed legislation to treat live-work developments as housing construction – and therefore subject to some fees – as further evidence that L is not needed. Neither will do anything to prevent office development from further destroying neighborhoods. The only way to do that is to vote no on K and yes on L.

“The only people Prop. K will benefit are the lawyers representing projects before the Planning Commission and the developers,” Welch said. “It does not benefit small businesses or nonprofits or arts organizations. It opens up SoMa to unbridled development. It makes no mention of traffic. It’s a bad policy that does not benefit the people who call San Francisco home.”

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