Home > 1 > TREASURE CHEST – July 23, 1997

TREASURE CHEST – July 23, 1997

San Francisco Bay Guardian – July 23, 1997

TREASURE CHEST

Migden’s bill waives state law, allows Brown to plunder Treasure Island.

By Savannah Blackwell; Ron Curran and Deanna Hodgin contributors

State legislation that would give Mayor Willie Brown complete control over Treasure Island has alarmed activists across the political spectrum, who fear it will cut the public out of any meaningful role in deciding the future of the former U.S. Navy base.

Some critics are saying the assembly bill, A.B. 699, written by Carole Migden, is the latest move in a grand giveaway of public assets that rivals any scandal in the history of California.

The privatization pirates who have seized control of the Presidio are now poised to grab the next choice piece of former military property – Treasure Island – and the Democrats who run San Francisco are leading the way.

“Yet again, the public has an asset, they’ve paid for it, and politicians are selling it off to themselves and their friends,” Huey Johnson, president of San Francisco’s Resource Renewal Institute, told the Bay Guardian. “I’ve been critical of this before, at the Presidio, and it’s happening again.”

If Migden’s bill passes, the Board of Supervisors will have a very limited role in deciding the island’s fate. A new redevelopment agency run by five handpicked Brown appointees will call every shot, make every deal – and potentially pave the way for the sort of big-money private development Brown has made it very clear he favors.

Brown has made no secret of his desire to turn the island into a multi-billion-dollar development. Nor has he made a secret of his discussions with Hong Kong billionaire Li Kai Shing, who has expressed interest in building a resort with a massive hotel complex and an 18-hole golf course. The city’s budget analyst, Harvey Rose, has projected costs of more than $263 million for needed infrastructure improvements at the island, including seismic stabilization. Brown is hoping developers will subsidize a large portion of that cost.

Though activists acknowledge the huge expense of maintaining or upgrading the island, they fear that cost-effectiveness is the only criterion the mayor is considering and that the public’s right to a natural resource that has already been paid for out of tax dollars is being ignored.

“Brown wants to create a commercial development he can control,” former city environmental commissioner Joel Ventresca told the Bay Guardian. “We could see a [privately owned] Disneyland-like amusement park….This is the public’s resources being turned over to private interests.”

To understand the politicking and plundering of Treasure Island, it’s necessary to follow the enabling local and state legislation through its labyrinthine journey.
Special Office

Brown began laying the groundwork for control of Treasure Island in August 1996, when he created the Treasure Island Project Office under the auspices of his Business and Economic Development Office to handle the city’s redevelopment efforts there.

In December 1996, the Board of Supervisors approved legislation transferring redevelopment authority over Treasure Island from the city’s Redevelopment Agency to the mayor’s Business and Economic Development Office. That same month, Brown succeeded in getting the supes to allow him to lease property at Treasure Island without competitive bidding – though the resolution preserved the supervisors’ right to approve those contracts. Supervisors Angela Alioto and Tom Ammiano were the legislation’s sole opponents.

This maneuvering had an immediate goal: the city and county of San Francisco began leasing land at Treasure Island to its first clients, Walt Disney Productions and ATL Productions Inc., in March and April, respectively, for filming.

On April 21 Brown upped the ante by proposing a special nonprofit corporation whose members he would appoint to redevelop Treasure Island. Only Supervisor Leland Yee opposed that move. Both Yee and Ammiano are currently working on legislation that would give the board more influence over the new authority by allowing each supervisor to appoint a representative to the corporation.

“That way, not only would the board have more direct oversight but also more awareness of what’s going on there,” Yee told the Bay Guardian.

After getting his ducks in line locally, Brown called his Sacramento cronies between July 11, when the state senate’s Committee on Governmental Organization received the Migden bill creating a second redevelopment agency in San Francisco specifically focused on Treasure Island, and July 15, the day the committee approved the bill. On July 2 Brown had named the members of the proposed redevelopment agency, the Treasure Island Development Authority (TIDA).

Not only does the legislation create a second, mayor-controlled entity but it also exempts that entity’s board members from existing state laws. Although California’s community redevelopment law prohibits city officials from sitting on redevelopment agency boards – that’s defined as a conflict of interest, as it would allow public officials to vote on matters directly affecting the city departments for which they work – Migden’s bill waives that restriction for TIDA. It’s no coincidence that the five-member authority includes three acting city department heads: planning director Gerald Green, port director Doug Wong, and redevelopment agency director Jim Morales. The mayor also appointed Pacific Stock Exchange vice president Dale Carlson and low-income housing developer John Elberling.

“Usually, board members are not allowed to vote on a project where they might have an interest,” Jackie Landsman, aide to state senator Quentin Kopp (I-S.F.), told the Bay Guardian. “But in this case, if you have officials sitting on the board, they will be able to vote on projects their own city departments might be bidding for.”


Blind Loyalty

Local activists said allowing such a conflict of interest could further exclude the public from oversight of the island’s future development. “This means Brown will have blindly loyal political appointees who will do his bidding,” Ventresca told the Bay Guardian. “That’s not how we do redevelopment in San Francisco. There’s supposed to be public oversight and a public approach to developing real estate.”

When Migden’s bill reached the state senate’s Governmental Organization Committee July 11, on which Brown ally Sen. John Burton (D-S.F.) sits, it had been amended by the Housing and Land Use Committee (on which Kopp sits) to give the Board of Supervisors a voice in contracting decisions at the island and to require competitive bidding.

Brown objected to those changes, and Burton more or less deleted them. He changed Kopp’s committee amendment – requiring TIDA to comply with the competitive bidding laws that govern San Francisco government agencies – to say the authority must comply only with the less strict competitive bidding rules that apply to redevelopment agencies. That would mean that TIDA would not be required to conduct competitive bidding. Burton also changed the Housing and Land Use Committee’s amendment requiring the Board of Supervisors’ approval of leases worth more than $1 million to no longer require the board’s approval once it passes a redevelopment plan for the island.

“I am very confident [this bill] will prevail,” Burton told the Bay Guardian. “This bill is consistent with redevelopment agencies in the state.” Migden’s bill is expected to hit the senate floor in early August. It must then be approved by the state assembly.

Migden casts the bill as a benign move to streamline and fast-track development at Treasure Island, which the U.S. Navy is expected to turn over to the city October 1. The bill does that by circumventing a state law that says cities and counties may create only one redevelopment agency. Without TIDA, the island’s redevelopment would be subject to overlapping agency jurisdictions: under the Burton Act of 1968 (named for Sen. John Burton), the San Francisco Port Commission would control the bayfront and submerged lands at the island and the San Francisco Redevelopment Agency would make all redevelopment decisions. Migden’s bill routes those powers to TIDA.

Critics of the new agency say it’s less a tool for fast-tracking than a method for controlling what and who makes money on Treasure Island. “[Brown] is seizing control of the subleasing of Treasure Island,” Kopp told the Bay Guardian. “What [Migden, Burton, and Brown] are doing is circumventing the regular redevelopment process and municipal code provisions dealing with conflicts of interest, competitive bidding rules, and Board of Supervisors’ approval of leases.”

The Burton-Brown-Migden camp says Kopp is using the issue to get back at longtime foe Brown.

But Kopp is right – standard procedures are being ignored, and public oversight of Treasure Island redevelopment will be severely limited. According to its articles of incorporation, TIDA may solicit development proposals and donations, determine goals, plans, and programs for the island, and engage in any other activities related to promoting planning, redevelopment, reconstruction, rehabilitation, and reuse of the former Navy base. The authority may create a citizens’ advisory committee, the Board of Supervisors and the mayor must approve its budget. In keeping with city law, the articles of incorporation give the Board of Supervisors 30 days to veto mayoral appointments, but it is required to muster a two-thirds vote to do so.

“Brown has circumvented the Board of Supervisors – with their stupefying acquiescence,” Kopp told the Bay Guardian. “And he’s doing it further with this bill by Migden.”

Kopp said Brown’s attempt to deem Treasure Island a redevelopment district is inappropriate. Traditionally, redevelopment agencies have broad special powers, including the right to award contracts without competitive bidding, because they are charged with revitalizing economically depressed areas – a description that hardly applies to Treasure Island.

“It’s certainly not a blighted area,” Landsman told the Bay Guardian. “It’s this total jewel out there waiting to be plucked.”

Activists fear Brown will let his big-league developers do the plucking. The island’s reuse plan, prepared by Roma Design Group for the San Francisco Redevelopment Agency, the city’s Planning Commission, the Mayor’s Office, and the Office of Military Base Conversion, characterizes a theme park as being “at the heart of publicly oriented uses” for the island, and also lists hotels, resorts, conference centers, and major sports and arts attractions as preferred uses.

Mayor’s Office spokesperson P.J. Johnston said the bill will forward Brown’s development plans. “Mayor Brown is hoping that San Francisco’s state legislators will do their work and pass the bill, because they would be serving the people’s best interests at Treasure Island,” he told the Bay Guardian.

Environmentalists say the island is an important public resource, for which politicians should be accountable. “This is an extremely valuable resource, and it belongs to the public, the taxpayers who paid for it,” the Resource Renewal Institute’s Johnson said. “The rightful owners should have a say in what becomes of it.” ?

Giving Up on the Island

Hetch Hetchy Water and Power, San Francisco’s public-power agency that serves more than 1,300 electric accounts, is considering handing over its Treasure Island account to Pacific Gas and Electric Co.

Officials from the city agency told the Bay Guardian they are considering letting PG&E provide power to a soon-to-be-redeveloped Treasure Island.

“We’re just opening the door for the possibility,” Deputy City Attorney Tom Berliner, general counsel to the Public Utilities Commission, which oversees Hetch Hetchy, told the Bay Guardian.

Public-power advocates say Hetch Hetchy’s position on Treasure Island sounds similar to the one it took at the Presidio. The department had not planned to even bid on supplying power to the former army base and national park until public-power advocates forced it to do so.

PG&E, which has an underground line to Treasure Island from Oakland through which it has periodically provided backup power, has expressed interest in delivering power to the island, according to Larry Florin, director of the mayor’s Treasure Island Project.

Indeed, PG&E seems to organizing its campaign for the island. It has expressed interest in acquiring the U.S. Navy’s Davis power station at the Oakland naval base, from which the U.S. Navy has supplied cheap federal power to Treasure Island, according to a June 5, 1995, memo written by the San Francisco Planning Department’s Catherine Bauman. PG&E crews are already working on the electrical infrastructure of the island, according to a May 23, 1995, memo from John Deakin, director of Hetch Hetchy’s Bureau of Energy Conservation, to Hetch Hetchy general manager Larry Klein.

The reason Hetch Hetchy officials say they may be willing to let PG&E be the power provider at Treasure Island is their fear of low return on investment: they worry that the demand for electricity at the island will not be sufficient to cover the cost of improvements that the electrical distribution system needs. “If you’ve got big loads locating out there that would use a lot of electricity, then maybe it doesn’t make sense to have PG&E do it,” Berliner told the Bay Guardian. “But, if you’re locating little loads out there, then you’d be losing, not making, money.”

There’s no reason for a hasty decision, however; those familiar with the current system say it could run without major problems for another 5 to 10 years. By that time, the Mayor’s Office hopes, the island will feature a resort and entertainment complex.

PG&E may want a decision sooner rather than later; the settlement with PG&E over the Presidio, passed by the Board of Supervisors July 21, gives PG&E the “right and obligation” to serve Treasure Island. In other words, if no other power provider wants to service the island, PG&E must do so.

Currently Treasure Island generates a 2.5 megawatt load. All the commercial, industrial, and residential demand in San Francisco adds up to 1,200 megawatts. But with Mayor Brown fast-tracking plans to get a developer to build a resort and theme park on the island, there could be a high demand for electricity, and potential profit for the new power provider.

Hetch Hetchy has been providing power to Treasure Island on an interim basis since April; this arrangement ends in September. The agency was reluctant to provide the power, with staff members writing in memos that they would be willing to let PG&E acquire the system and wondering, out loud, if Hetch Hetchy had any choice (see “The Shame of San Francisco,” 1/29/97).

A new cooperative agreement between Mayor Willie Brown and the U.S. Navy, which has not yet been approved by the Board of Supervisors, requires Hetch Hetchy to provide power to the island for at least two years. After that, the future of electricity on the island is unclear. Hetch Hetchy officials are saying that though they don’t think it will be a good investment for the city, it’s a policy decision for the city’s elected officials to make.

Florin has told the Bay Guardian he would like to see Hetch Hetchy provide electricity to the island so that all services would be provided by the city. In addition, he says, it may be a good way for the city to generate revenue to subsidize needed infrastructure improvements at the island. It’s not clear yet if the proposed Treasure Island redevelopment agency would make that decision.

The Board of Supervisors could delegate that responsibility to the new authority, Florin said.

“I think it will be a much-debated decision,” Florin said.

Joel Ventresca, chair of San Franciscans for Public Power, told the Bay Guardian there should be no debate. Hetch Hetchy should be moving aggressively to claim Treasure Island as a new territory for expansion, he said.

“We should be champing at the bit, aggressively pursuing every opportunity to position ourselves to compete in the new open market,” Ventresca said. “But instead, there’s this consistent drumbeat of capitulation, surrender on the part of Hetchy when it comes to competing with PG&E.” ?

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