The 8 Washington embarrassment

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I wasn’t shocked by the vote on 8 Washington. I knew it was happening; I knew we’d lost when the EIR went through. I knew we couldn’t count on a solid progressive bloc any more. I knew that the lobbying was intense.

But I have to say, at the end of the day I was embarrassed. Because the supervisors sold the city cheap.

In the earlier board discussions, Sup. Christina Olague and Sup. Eric Mar mentioned their concerns about the heigh and bulk of the project and said they would work with the developer, Simon Snellgrove, on changes. But the final project was exactly the same size.

Olague and Sup. Jane Kim were concerned about the amount of parking; the developer agreed to cut 50 spaces. But the actual size of the garage won’t be reduced at all; the only promise: There won’t be valet parking, so maybe not so many cars will fit.

Yes, Snellgrove agreed to set aside some scholarships for low-income kids to swim in the pool, which is a great thing and I fully support it. For a project that, according to available figures, will net the developer $200 million in profit -- according to Sup. David Chiu’s analysis, a 72 percent rate of return -- the scholarship money is peanuts.

There’s an additional 50 cent parking levy to pay for surface improvements in the area.

But as Chiu asked at the June 12 meeting, “Is the city getting an appropriate level of benefits based on Snellgrove’s profits?” Project foe Brad Paul -- a veteran of more than 30 years of the city’s development wars -- doesn’t think so. “They got nothing,” he told me.

Here’s how it went down:

Chiu started off by introducing the board’s budget analyis, Harvey Rose. Rose said he’d reviewed the finances of the project, and concluded that the city would get $50 million less out of the project than the developer or the Port of San Francisco, which owns some of the land and is a primary proponent, had originally claimed. Chiu also noted that not all the documents were in the file, but nobody else seemed to care.

In fact, through most of the discussion -- limited discussion -- and final votes, it was pretty clear that nobody was swayed by any of the facts that Chiu put forward. This deal was done long before the board members took their seats.

Chiu offered a series of amendments, none of them terribly radical. He pointed out that the deal requires the city to pay the developer $5 million for open-space improvements. “That’s an anomaly,” Chiu said, and moved that it be removed.

Kim, who throughout the meeting was the strongest supporter of the project, argued that the city often reimburses developers for open space. More, she said, compared to what the city has asked other major residential developers to give, this project is just dandy. “I would not say this is not a fair deal for the city,” she told her colleagues.

The vote on the $5 million giveaway? Developer 6, SF 5. Siding with Snellgrove: Christina Olague, Scott Wiener, Carmen Chu, Sean Elsbernd, Mark Farrell, and Jane Kim. Siding with Chiu and project opponents: John Avalos, David Campos, Malia Cohen, and Eric Mar. It’s an odd lineup -- Cohen doesn’t always vote with the progressives, and I have to say it’s strange to see Kim and Olague siding with the four most conservative supervisors.

Chius’s second proposal: Since the city’s benefits were $50 million less than advertised, why not add $14 million to the affordable housing fee?
Developer: 7. Affordable housing: 4. Voting for the developer: Olague, Wiener, Chu, Elsbernd, Farrell, Kim and Mar.

Okay, one last try. Chiu suggested maybe just $2 million more for affordable housing. Wiener, as is he way, went off on his usual complaint that too much of the affordable housing money is for poor people and not enough for the middle class. The final vote:

Developer: 6. Affordable housing: 5. Voting for the developer: Olague, Wiener, Chu, Elsbernd, Farrell, Kim.

Kim, again, took the lead in promoting the deal on the final vote, saying that a parking lot and a private club were not a good use for the space and that “we are achieving here is a higher and better use for the land.” That’s what every developer talks about, by the way -- higher and better use.

She also talked about One Rincon, that hideous tower next to the Bay Bridge that was approved after then-Sup. Chris Daly cut a deal with the developer that the San Francisco Chronicle denounced as a “shakedown.

Kim said that, considering the much-smaller size of the Snellgrove project, the benefits were richer than the Rincon deal.

I never liked the Rincon deal -- that tower’s a disaster, an ugly scar on the skyline, and there was nowhere near enough affordable housing money. That’s because I think that the city should be building six affordable units for every four market-rate units, that there’s no need for more housing for the very rich and that our current housing policy is a disaster. (The Guardian wrote an editorial at the time that said it was good that Daly had gotten that much money, but was dubious about the whole project. In retrospect, we were too kind.)

I think all my readers at this point know that. So does Daly.

But I asked the former supervisor anyway to comment on the difference between 8 Washington and One Rincon. His thoughts:

1. The Rincon Hill agreement was negotiated by the district Supervisor working together with the communities most impacted by the development. 8 Washington was opposed by the district Supervisor and many nearby residents.
2. Most people in the South of Market were not diametrically opposed to highrise development in that location. The Planning Department had been working on a Rincon Hill neighborhood plan and was recommending upzoning for the area.
3. Rincon Hill had no waterfront trust issues.
4. The Rincon HIll development impact fee was $25 per square foot (over and above the required inclusionary affordable housing fee even though the Mayor's Office contended that over $20 per square foot would kill the deal.) According to Kim's release, her 8 Washington deal netted an additional $2 million for affordable housing and a $.50 parking surcharge. This even though development in Rincon Hill is not as valuable as the northern waterfront.

Folks: I think the city got taken to the cleaners here. I’ll stipulate that I’m against this project for much broader reasons. And maybe I’m just an old commie who thinks that the richer you are, the more you should give back, that the affordable housing fees on the most expensive condos in San Francisco should be higher than normal, that if Snellgrove nets $200 million, then the city by definition left too much on the table.

But I don't think I'm alone in believing that if you’re going to approve something that will make a developer this rich, and let him use public land to do it, on the waterfront, you ought to get your fair share. And that didn’t happen.

Embarrassing.

Comments

Like the social girls used to say in high school decades ago, "Tim, I am so embarrassed for you."

Posted by marcos on Jun. 14, 2012 @ 1:50 pm
Meh

Could be worse. That's politics.

Posted by Guest on Jun. 14, 2012 @ 1:56 pm

The girls didn't have to be embarrassed for me in High School. I did just fine embarrassing my self on my own.

Posted by tim on Jun. 14, 2012 @ 2:12 pm

Profits on Rincon were not that much greater in absolute terms than 8 Washington, much greater in relative terms, per unit.

Posted by marcos on Jun. 14, 2012 @ 2:14 pm

I heard that the 50 parking spots removed from the project are actually going to be used by Google to park their busses for free. At the suggestion of Kim, Olague and Mar.

Posted by Troll on Jun. 14, 2012 @ 2:18 pm

Does that person who will make 200 million dollars and yet still take millions from the city without even offering any equity sometimes privately call people like me 'marxist' because of my tiny rent control apartment?

Posted by Guest on Jun. 14, 2012 @ 2:21 pm

That may be the gross proceeds from the sales of the units but that's not the profit. You think they don't have costs, taxes, fees?

Oh, and then there's the risk that the RE market will turn and theyc an't sell at all.

Do a business class and get back to me. Hey, if you do, you might even be able to get a decent job, buy a home, and not die in some rent-controlled hovel aged 75, alone, sad and bereft.

Posted by Guest on Jun. 14, 2012 @ 3:16 pm

If this isn't a wealthy person conducting class warfare then what is?

Posted by Guest on Jun. 14, 2012 @ 2:27 pm

similar to declaring war on you?

Tim doesn't understand the vote because he doesn't understand political reality, only political ideology.

Posted by Guest on Jun. 14, 2012 @ 2:49 pm

Chiu was the real embarrassment here. Taking the torch for the 1% telegraph hill dwellers and doing what pappa peskin tells him to. There are videos on youtube of the GG group who have been funding all this drama along with Sue Hestor the joyful litigator - in those videos Chiu does his cameo and he looks horribly embarrassed to be there and slinks out as soon as he can. The only reason he is doing this is because the THD would lobby against him if he didnt, and there might be a few dollars in it for him.

oh and Tim, you forgot to mention. "Rich people are boring"

Posted by Greg on Jun. 14, 2012 @ 2:38 pm

can afford to criticize RE developments while profiting from them at the same time. Nice work if you can get it.

Posted by Guest on Jun. 14, 2012 @ 2:50 pm

I think Mar's role in getting this development approved is rich. He must be really running scared in his Supervisor race.

Posted by The Commish on Jun. 14, 2012 @ 3:40 pm

Gotta love the self-immolation of the left in SF..

Posted by Guest on Jun. 14, 2012 @ 3:56 pm

You lost, and you lost big, which you're no doubt used to by this point. Now grab your notebook and get out the door! PG&E is selling unstamped cigarettes behind the Moscone Center!

Posted by Guest on Jun. 15, 2012 @ 6:10 am

then you need to increase the housing stock, instead of putting up insane roadblocks to development.

The city just does not have enough influence to alter the market dynamics, in which there is not enough supply to meet demand.

You can prattle all you want, but your solutions will not address the underlying issues

Posted by Guest on Jun. 15, 2012 @ 11:30 am

The need is for increased supply, not playing class games.

Posted by Guest on Jun. 15, 2012 @ 12:00 pm

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