While it hasn’t got nearly the attention, the same tensions between wealthy tech employers and local interest groups – which see the employers as hurting quality of life by increasing congestion and by making housing costlier – are playing out in the June 5 San Francisco mayor’s race. It’s being held to fill the vacancy created by Mayor Ed Lee’s death from a heart attack on Dec. 12. Lee’s death was lamented by tech executives who called him a key to San Francisco’s emergence as a world tech capital.

That sentiment is far from universal. A May 15 Business Insider analysis by Melia Robinson that was featured on the San Francisco Chronicle website was headlined “San Francisco is fed up with Big Tech, and residents are begging the next mayor to do something about it.”

Leading mayoral candidates critical of tech’s effects

It’s difficult to be confident who’s leading the mayor’s race since San Francisco is one of a handful of cities to use a top-three ranked voting system in which a candidate who doesn’t get a majority in the initial tally can still win based on her or his second- and third-place votes. But the consensus top three are all liberal to very liberal Democrats by national, if not San Francisco, standards. They are Board of Supervisors Chairwoman London Breed, who would be the city’s first African-American woman mayor and has the support of former Mayor Willie Brown’s business-friendly coalition; Supervisor Jane Kim, who would be the city’s first Korean-American mayor and is a mostly beloved figure among local progressives; and former state Sen. Mark Leno, who would be the city’s first openly gay mayor and who also runs well to Breed’s left.

Breed, who was deposed as acting mayor by progressive supervisors earlier this year, seems to want the most limited policy changes aimed at tech workers. She has backed limits on short-term rentals by companies like Airbnb and wants to cap the number of ride-hailing vehicles at any given time, and perhaps put restrictions on food deliveries as well.

Kim wants tech companies to improve pay and benefits for lower-rung workers so they can live in the city. She says companies subcontract services for janitorial and cafeteria work so they can avoid responsibility for the poor quality of life for those hired. She has expressed interest in requiring Uber and Lyft to pay a per-rider fee.

Leno wants to impose hiring rules on city tech companies to force them to hire city residents. He says this hiring shouldn’t just be for blue-collar positions but for administrative and sales jobs. He has also called for tech firms and their employers to “invest” in the city by committing to improving its lifestyle for those beyond the wealthy.

Some warn tech firms shouldn’t be taken for granted

The only Republican in the race – business consultant Richie Greenberg – and business groups say that mayoral candidates shouldn’t take tech companies for granted. They note that the city’s tech boom may have peaked in 2016, with exploding housing costs hurting San Francisco more than the broader Bay Area-Silicon Valley tech region in general.

But this point of view is a tough sell going into June 5’s voting. Perhaps the best example of this is a deal orchestrated in 2011 by then-Mayor Lee with the support of Supervisor Kim to revitalize the rough Tenderloin and Mid-Market districts west of downtown by giving a six-year break on city payroll taxes to companies located there. This was meant to keep Twitter’s headquarters from moving out of the city and to attract new tech firms to the area.

The proposal was widely seen as a smart way to maintain San Francisco’s tech momentum in 2011. In 2014, business groups hailed the agreement for keeping Twitter and for creating 13,000 jobs and generating much more revenue for the city than the sums lost because of the tax break.

But that same year, a San Francisco Chronicle analysis noted that the deal was seen by many residents as a sign of the city caving to business pressure – and it has emerged as a reason for progressives to question Kim’s bona fides.

“The voter coalitions that elect moderates in San Francisco are Chinese voters, white homeowners, older renters, and the 10 Republicans left in town, combined with unions that represent building trades, police officers and firefighters,” political consultant Jim Ross told the San Francisco Chronicle the day after Lee’s death. Progressives dominate every other category of voters, especially young tech workers and social justice activists.

While many other names have been mentioned, here are the most prominent likely or declared candidates in the June 5 special election to serve out the last year and a half of moderate Lee’s term:

– Acting Mayor London Breed, part of the moderate faction on the city-county Board of Supervisors who shares Lee’s view that dealing with homelessness is the city’s most important issue. Breed, pictured, is the first African-American woman to serve as mayor. There is a possibility that supervisors will name an interim mayor rather than give Breed months to use her authority as both mayor and supervisor to build support for her expected mayoral bid. This could be supported by moderate as well as progressive supervisors in a city full of ambitious politicians.

– Supervisor Jane Kim, part of the progressive wing, filed paperwork to run for mayor on Wednesday. Kim lost a state Senate bid to moderate Supervisor Scott Weiner last year. She has won national and international attention for her proposed state “robot tax” assessing fees on companies whose use of robots or algorithms has led to the loss of jobs. The money from the fees would be used for worker retraining and other programs meant to minimize the impact of losing jobs to technology.

– State Sen. Mark Leno announced in May that he would run for mayor in 2019 after Lee was termed out. Now he’s running in the June special election, touting his “progressive vision for our city, grounded in a commitment to affordability and civil rights.” A former Assembly member and supervisor, he’s won a reputation as an energetic policy wonk with interest in a wide range of issues, from gender and transgender rights to prison and criminal justice reform to the environment.

– Former San Francisco Supervisor Angela Alioto, daughter of former Mayor Joseph Alioto, has taken out papers to run. An attorney specializing in discrimination cases, she cited homelessness as a key issue and said it was crucial to build a coalition with tech firms to address the issue and larger housing concerns. She has deep ties to moderates both through family ties and years in the city’s political trenches.

– Assemblyman David Chiu, a former supervisor, faces perhaps the toughest decision of any candidate. If the moderate runs in the June mayoral special election, he can’t seek re-election to the Assembly in November – meaning he’d be giving up the safest of legislative seats with more than eight years until he would face term limits. But Chiu is poised to inherit support from the Chinese American community that was so valuable to Mayor Lee, and he has high name recognition and fundraising clout.

Willie Brown still a crucial behind-the-scenes player

Even at 83, former Mayor and former Assembly Speaker Willie Brown remains a key player in San Francisco’s political intrigue. After Mayor Gavin Newsom was elected lieutenant governor in 2010, Brown helped arrange the appointment of Lee – then the city’s chief administrative officer – as interim mayor and gave Lee crucial help in winning a full term in 2011 after Lee broke a promise to progressives to not seek the office.

San Francisco progressives fear that moderate Brown will try to execute the same maneuver with Breed, who is considered one of his proteges.

The biggest controversies hanging over the SFPD: the fatal shooting of an unthreatening burglary suspect that was caught on video in December, the fatal shooting of a homeless man in murkier circumstances in April, and two rounds of revelations about racist and anti-gay text messages sent by police officers.

Until a week ago, Suhr was in an odd middle ground. He was under fire from activists but also from his own officers, whose union depicts him as a coward who refuses to stick up for a police force that by and large acts professionally.

However, the local political establishment seemed generally in his corner, including some prominent commentators. Suhr was seen as a relative source of stability in a city rocked by an ongoing investigation of a massive corruption scandal that took down state Sen. Leland Yee, among others, and appears to be zeroing in on Mayor Lee.

Making officers promise not to be racists

Despite years of criticism from San Francisco’s progressive media, Suhr wins praise from some San Franciscans for seeming to have his heart in the right place. Agreeing with some of protesters’ complaints, he formally requested a U.S. Justice Department review of his department, which is now underway. Suhr also drew national headlines for his policy of having officers take an annual pledge not to be racist or intolerant.

Yet critics says the kindest possible assessment is that Suhr may be a good person, but he is in over his head in dealing with a department mired in the past — specifically the ugly culture of big-city 20th-century police departments. Some outsiders surveying the situation agree. 

“If you have a poorly managed department without standards of accountability, everybody sinks to the bottom,” Samuel Walker, a retired criminal justice professor from the University of Nebraska at Omaha, told the Associated Press.

But in Mayor Lee’s most direct comments on the matter earlier this month, he disagreed. “I just don’t believe that having a different chief automatically gains the kind of groundwork that we are already gaining with the reforms that we have,” Lee said at a news conference in which he announced new policies meant to lead to fewer police shootings.

Willie Brown backs chief

The San Francisco political heavyweight offering the loudest support for Suhr is Willie Brown, the African American former mayor and Assembly speaker. This is from his Saturday column in the San Francisco Chronicle:

I feel sorry for Police Chief Greg Suhr.

From the tone of the attacks against him, you’d think he was the guy who put 20-plus bullets into Mario Woods [the suspect shot in December]. That he was one of the guys sending out racist texts. That he personally ordered the stopping and frisking of every person of color in the city.

In truth, he’s one of the most progressive police chiefs the city has seen in decades.

But every time he makes a move to reform the SFPD’s culture, whether it be to improve racial sensitivity or come up with smarter use-of-force policies, he’s overshadowed by another story about some cop’s inappropriate behavior.

The 82-year-old California political legend also took a pointed shot at the protesters.

Supervisor Aaron Peskin suggested at a recent board meeting that they bring in me to broker a peace deal between Mayor Ed Lee’s administration and the Black Lives Matter people, as I did during the last labor stalemate at Muni.

Are you kidding? Muni drivers are rational geniuses compared with these protesters.

Suhr appears safe for now — unless there is another dubious fatal shooting or still more racist police text messages emerge. That could prove the last straw.

In recent coverage of the Senate race to succeed retiring Barbara Boxer, talking heads on CNN and MSNBC have treated Villaraigosa, 61, as a formidable foe for Harris, 50. But they have been vague about what it is that might make him preferable to a Democratic rival who seems much more comfortable and appealing on TV and who has far more national patrons.

Given his mayoral record on issues of crucial importance to state Democrats — global warming, mass transit and disdain for cars — Villaraigosa has reasons for optimism. Billionaire environmentalist Tom Steyer may adopt Villaraigosa as his stand-in after his announcement Thursday that he wouldn’t run for Senate.

This record is lauded in a June 2013 Los Angeles Times look back at his eight years as mayor.

Rail stations under construction on the traffic-clogged Westside attest to the billions of dollars in transit money he secured. …

And the Department of Water and Power established itself as a leader among utilities nationwide in shifting from coal-fired power plants to solar and wind energy. …

Villaraigosa took office amid rapid changes in the urban landscape of Los Angeles, most dramatically in the revival of downtown and Hollywood. He embraced those changes and tried to hasten the city’s transformation into a place that is more amenable to pedestrians, cyclists and public transit passengers. The city opened 149 miles of bike lanes and launched CicLAvia, a festive cycling event along miles of boulevards closed to auto traffic for the day.

By lucky timing, large-scale rail investments by his predecessors came to fruition on Villaraigosa’s watch. The Gold Line between Union Station and East L.A. opened, followed by the Expo Line linking downtown and Culver City.

But Villaraigosa made his own mark by leading the campaign for Measure R, a $35-billion transportation package passed by voters in 2008. Largely through that ballot measure, Villaraigosa reshaped the region’s notoriously inefficient transit system more than any mayor since Bradley, who got a subway line built between downtown and North Hollywood. Measure R produced much of the money now being spent to extend the Expo Line into Santa Monica, start construction on the new Crenshaw Line in South Los Angeles and bring the Wilshire Boulevard subway to the Westside. It also covers an array of other rail, bus and road projects across Los Angeles County, some of them coupled with zoning changes to concentrate new development around transit stops and draw people out of their cars.

“One of the things about Villaraigosa that is most impressive is that he actually did get it done, and the importance of Measure R cannot be overstated,” said Martin Wachs, an urban planning expert at the Rand Corp. …

Environmentalists welcomed the [city] utility’s growing reliance on renewables, along with the drop in truck pollution at the Los Angeles Harbor, synchronization of city traffic lights and installation of energy-saving LEDs in city streetlights. Evan Gillespie, a deputy director of the Sierra Club’s Beyond Coal Campaign, called Villaraigosa’s record “phenomenal,” particularly in addressing climate change. “We now have a road map from the largest public utility in the nation for how you rapidly cut carbon pollution,” he said.

A politician who likes the ladies

But given the repeated tabloid headlines over his personal life during his time as mayor, Villaraigosa is also hugely vulnerable to attack ads. This George Skelton column only scratches the surface.

Actor Tom Hanks had a great line in the movie “A League of Their Own.” Playing the crusty manager of a women’s baseball team, he berates one member into tears and shouts: “There’s no crying! There’s no crying in baseball.”

That came to mind when I read last week that Los Angeles Mayor Antonio Villaraigosa was asking for privacy, after admitting to an affair with a prominent TV reporter. To paraphrase Hanks’ character, Jimmy Dugan, there’s no privacy in politics.

There’s no privacy, at least, that a politician can ever count on, particularly at Villaraigosa’s level. He is, after all, mayor of the nation’s second-largest city, with his eye on becoming the first Latino to be elected governor of California since statehood.

Of course, Kamala Harris could face salacious attack ads as well. Her rise to power in San Francisco politics began when Assembly Speaker Willie Brown chose to groom her for a big future after she became the married politician’s girlfriend when he was 60 — and she was just 29.

Editor’s Note: This is Part One of a series on the Calderon family.

June 13, 2013

By John Hrabe

It wasn’t quite the Academy Awards. But the 60 or so people assembled last Saturday afternoon at the Whittier Center Theatre were excited just the same.

The festival, a digital media competition organized by Assemblyman Ian Calderon, D-City of Industry, in conjunction with the California Arts Council, featured the works of 58 area high school students, who produced short clips on human rights and genocide. The nearby picture shows Calderon with two students getting awards.

“Around here, many of the kids won’t go to college because of money,” said Calderon, who provided small scholarships to some of the participants. “I want them to know there are opportunities out there.”

The kids were vulnerable — putting their creations up for judgment by the community. It’s something Ian knows about. Earlier this year, when he and two of his legislative colleagues released their own digital media creation, a surfer’s perspective on coastal protection, Ian’s father expressed his misgivings.

“The surf caucus?” recalled Ian’s dad, Charles Calderon, a former assemblyman and state senator. “I mean, in my day, surfing was associated with ‘Fast Times at Ridgemont High.’”

The film was released in 1982, the same year that Charles won his first election to the Assembly. The film’s 1980s California slacker milieu is an anathema to Charles’s tough-guy image, especially because he came within a handful of votes of dethroning then Assembly Speaker Willie Brown, the self-proclaimed “Ayatollah of the Assembly.”

The old political rules, Ian says, no longer apply. Yet, he understands why it took some time for his father to come around. “The old guard keep things close to the vest because that’s when they come after you,” Ian said.

The Calderon “Dynasty” Storyline

This week, everyone seems to be coming after the Calderons. No sooner had FBI agents executed a search warrant at the Capitol offices of Democratic state Sen. Ron Calderon, Charles’s brother, than the press was churning out headlines about the “political dynasty” mired in scandal. “Sen. Ron Calderon, target of FBI raid, is part of a political dynasty,” read the headline of one LA Times piece. The Times wasn’t alone. Almost every major outlet has repeated some version of the “Southern California political dynasty” storyline.

The Calderons have certainly made politics the family business. Charles, the eldest brother, started it off in the Assembly in 1982, followed by middle brother, Tom, in 1998, then Ron in 2002. Last year, Ian, the surfer son, won a hard-fought campaign for his own seat in the Legislature. The dynasty storyline is easy and convenient. It’s also an oversimplification of the major differences among the Calderons.

The people who know the Calderons best, old friends, current and former staffers, community leaders, and Sacramento lobbyists, say that each of the Calderons has brought a unique style and approach to the family business. Far from speaking with a uniform voice, the Calderons often have had heated political disagreements within the family and been on opposite sides of controversial legislative fights.

The FBI says it won’t comment on the ongoing investigation, which has only intensified the Capitol rumor mill. The best evidence suggests that the FBI is investigating Ron’s relationship with the Central Basin Municipal Water District, where Tom has worked as a high-priced consultant. At least one state Senator, Kevin de Leon, D-Los Angeles, has confirmed that he has been subpoenaed.

That Ron and Tom are the subjects of the FBI investigation, without any evidence to suggest that either Charles or Ian is involved, doesn’t surprise many Calderon confidants. When speaking candidly on background or not for attribution, these individuals described two brothers in conflict with Charles’s reputation as an honest broker and effective legislator.

Centinela Valley school desegregation case

Last Thursday afternoon, I sat down with Charles Calderon just a few blocks from the Los Angeles City Attorney’s office, where his professional career began as a deputy city attorney. Under then-City Attorney Burt Pines, now an LA County Superior Court judge, Calderon got his start prosecuting misdemeanor cases that ranged from assaults to drunk driving. “My dream was to be a lawyer,” Calderon explained.

After two years, he moved into private practice, while also serving on the school board. Almost immediately, Calderon took up a low-paying, controversial school desegregation case representing a group of white, black and Latino parents that had already been turned away by the NAACP and MALDEF.

“Here I was, I’d just started with a private law firm, and I’m taking a risky case,” Calderon recalled of the lawsuit. “The case was a 50-50 proposition, maybe.”

Calderon’s clients claimed that the Centinela Valley Union High School District had closed a Lawndale high school in order to prevent integration of other high schools in the area. It was an uphill battle; the parents had to show intentional segregation. So Chuck, in search of any evidence to show de jure segregation, headed down to the school district headquarters to review years of board minutes.

Hours into his search, a secretary offered Calderon something to drink and casually mentioned that all the meetings were recorded. “I immediately knew if there was going to be anything, it’d be on those tapes,” he said. “Finally, I heard it.”

Calderon found audio of school board members making racial slurs about the students at Lennox High School, the segregated school that the board kept open. The school district quickly settled. Writing of the case in 1985, the Los Angeles Times observed, “The Lawndale group raised the focus of the community debate to a loftier level.”

“It takes discipline to go through that kind of exercise,” Charles proudly shared as he sipped a cup of coffee and ate a slice of pie a la mode. “It also takes a lead ass.”

A disciplined taskmaster who’d drive staff crazy

A year later, Charles was up and on his feet, walking door-to-door in his first legislative campaign. That first election, he estimates, he walked 98 precincts. He’d walk one side of the street, his mother the other side.

The discipline — to finish law school, to tediously review school board minutes, to walk door-to-door — explains Calderon’s approach in Sacramento. His former legislative staff members consider him “a taskmaster.”

“Chuck used to drive staff crazy,” says Tom White, who worked for Calderon all six years of his second stint in the Assembly. “On policy, he was a taskmaster. He wanted to walk through the bill, talk through the bill and think his way through it.”

Charles: “Head and shoulders above his brothers”

Phil Pace, a Montebello community leader whose friendship with Charles goes back decades, describes him as someone who has “always been straightforward.”

“I consider him a good friend, a good person, and a good legislator,” Pace said. “He tried to do the right thing for the right reasons.”

Personal friends say that Charles’s smarts and discipline are what separate him from his brothers. Another close personal friend, who has known the family since the days before a Calderon served in the Legislature, described Charles as “head and shoulders above his brothers.”

“In terms of everything, smarts, style, class, honesty, work ethic,” the friend said of Charles, the first in his family to earn a college degree and the only one to graduate from law school. “That doesn’t take anything away from his brothers. They just don’t have Chuck’s smarts, not even close.”

Part Two will explore Ron and Tom’s Reputation in Sacramento

By Chris Reed

The instant national chortling Thursday over the fact that President Obama had called California’s Kamala Harris the “best-looking” state attorney general ended up being more about seeing the usual slippery standards on political correctness. Democrats can often get away with little blowback for things that would get Republicans fricaseed, and this was one more example.

But if you are Harris, you probably don’t appreciate the Obama remark because of the likelihood that it will remind people that it was her attractiveness that gave her her initial foothold in state politics.

Harris caught Willie Brown’s eye in her 20s

The first time she ever appears in a Nexis.com search of California news is March 22, 1994, when she was Assembly Speaker Willie Brown’s date at his 60th birthday party. She was 30 years-plus younger. But she didn’t just date Brown. She cashed in from knowing him:

“Assembly Speaker Willie Brown, continuing his rush to hand out patronage jobs while he retains his powerful post, has given high-paying appointments to his former law associate and a former Alameda County prosecutor who is Brown’s frequent companion.

“Brown, exercising his power even as his speakership seems near an end, named attorney Kamala Harris to the California Medical Assistance Commission, a job that pays $72,000 a year.

“Harris, a former deputy district attorney in Alameda County, was described by several people at the Capitol as Brown’s girlfriend. In March, San Francisco Chronicle columnist Herb Caen called her ‘the Speaker’s new steady.’ Harris declined to be interviewed Monday and Brown’s spokeswoman did not return phone calls.

“Harris accepted the appointment last week after serving six months as Brown’s appointee to the Unemployment Insurance Appeals Board, which pays $97,088 a year.”

That’s from the Nov. 22, 1994, Los Angeles Times.

Two British newspapers are going where U.S. papers won’t and connecting the 2013 compliment Harris got from America’s most powerful black politician with the 1994 “compliments” she got from California’s most powerful black politiican. Both the London Daily Mail and the London Evening Standard mentioned Harris’ history with Willie Brown, without mentioning he was double her age.

Harris’ personal history is even more exotic than Obama’s.  Her parents are Dr. Shyamala Gopalan, a breast cancer specialist, and Stanford University economics professor Donald Harris, who had Kamala after emigrating to the U.S. from India and Jamaica, respectively.

I’m sure this high-powered couple was just thrilled to see their daughter’s mentor/protege/girlfriend relationship with the aging, married Brown.

Yes, married.

“In September 1958, Brown married Blanche Vitero, with whom he had three children, Susan, Robin, and Michael. He has four grandchildren, Besia, Matea, Mateo, and Lordes, and a step-granddaughter, Tyler. The couple separated in approximately 1976 but remain married. He has a daughter, Sydney Brown, by political fund raiser Carolyn Carpeneti.”

How … continental.

By Chris Reed

California Attorney General Kamala Harris is among the many Americans of all political persuasions who are outraged that few are taking the fall for the grotesque irresponsibility that led to the housing bubble, its collapse, and the recession of the past six years.

She sued quasi-federal mortgage-issuing giants Fannie Mae and Freddie Mac in December over their foreclosures of 12,000 homes in California. Last week, she targeted Standard & Poor’s over the credit-ratings agency’s high marks for many firms involved in the bubble.

But Harris, who is half black and half Indian-American, is doing more than a little grandstanding here. Like most politicians and most of the media, she chooses to ignore the coarse racial politics that led both George W. Bush and Bill Clinton to push policies that inevitably inflated the housing bubble. It’s the uncomfortable back story that is usually ignored in favor of the tidy narrative of evil Wall Street and supine regulators.

On June 17, 2002, Bush announced a drive to get 5.5 million minorities out of apartments and into their own homes. The primary method amounted to affirmative-action lending — eliminating down payments and loosening income requirements. As The New York Times noted in a 2008 analysis, Bush’s primary means of achieving this end was insisting that “Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.”

Against this backdrop, Harris’ insinuation that Fannie Mae and Freddie Mac were racially predatory looks grossly demagogic. This is from a Huffington Post account of her lawsuit:

“Harris also called on Fannie Mae and Freddie Mac to disclose whether they have complied with civil rights laws protecting minorities and members of the Armed Forces against unlawful convictions and foreclosures.”

So if affirmative action backfires, the quasi-government agency pursuing affirmative action under pressure from the president faces civil liability?

Clinton’s role in inflating the housing bubble was every bit as direct as Bush 43’s. In 1997, he appointed Andrew Cuomo, the current New York governor, to be secretary of housing and urban development. Cuomo had little banking or lending expertise, but he had a broad banking and lending agenda. Veteran journalist Wayne Barrett laid out his folly in a 2008 analysis in Village Voice:

“Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country’s current crisis. He took actions that — in combination with many other factors — helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded ‘kickbacks’ to brokers that have fueled the sale of overpriced and unsupportable loans. …

“Perhaps the only domestic issue George Bush and Bill Clinton were in complete agreement about was maximizing home ownership, each trying to lay claim to a record percentage of homeowners, and both describing their efforts as a boon to blacks and Hispanics. HUD, Fannie, and Freddie were their instruments, and, as is now apparent, the more unsavory the means, the greater the growth.…

“Cuomo … did more to set these forces of unregulated expansion in motion than any other secretary and then boasted about it, presenting his initiatives as crusades for racial and social justice … .”

Somehow I doubt this coarse and depressing history will be mentioned by Kamala Harris, who is an utterly conventional California Democrat despite her exotic background and moralistic rhetoric. Wall Street did behave with gross irresponsibility, Standard & Poor’s did fail as a credit-ratings analyst, and thousands of other white-collar types did behave unethically. But the ethical failing that started it all was bipartisan racial pandering dressed up as the pursuit of “social justice.”

The result here in the Golden State:

“Latino and African-American homeowners in California have experienced foreclosure rates 2.3 and 1.9 times that of non-Hispanic white borrowers.  Latino borrowers alone make up 48 percent of all foreclosures.”

That is from a 2010 report by the California branch of the Center for Responsible Lending. How perverse that from 1997 to 2006, the Center for Irresponsible Lending was at 1600 Pennsylvania Ave.

By Wayne Lusvardi

Willie Brown just reminded us why in 1990 voters passed term limits largely to move him out of his seat as California Assembly-Speaker-for-Life.

Brown wrote that Prop. 13 should be reformed by “cleverly” by making “a racehorse look like a donkey.” But Brown must take California homeowners and small business persons to be dumb mules.  Everyone knows that you can’t make a racehorse out of a donkey.

Brown switched college majors from mathematics to a degree in political science.  He should have stuck with the numbers.  Reforming Prop. 13, the 1978 tax limitation measure, won’t favorably change the mathematics of property taxation for government. To the contrary, it is likely to make it worse. Even if Prop. 13 was reformed, it would likely result in lower property tax revenues for public schools and cities in a recession than if it was left alone.

In California, 97 percent of businesses are small businesses.  They are being hammered with a 50 percent increase in the lowest-tier of electric rates from AB 32, 15 percent higher water rates, new storm water taxes in Los Angeles County and an Obamacare surcharge of $5,000 to $8,000 per employee.  Eliminating Prop. 13 would be another hammer blow.

Businesses not escaping paying their fair share of taxes

Property owners should beware the misinformation in Willie Brown’s call for a split-roll property tax. Currently under Prop. 13, all property is reassessed in value only upon sale.

Under a split-roll tax, residential properties would continue under that system. But commercial properties would be reassessed at least every three years.

Brown infers that big corporations are getting away without paying their fair share of property taxes when they merely change title to commercial property.  Brown is a lawyer and knows that merely changing a title is not considered a “transfer” or “sale” under existing law.  And any changes to the law would likely end up being overturned by the courts, as they have in the past.

Proposition 13 is one of the most adjudicated laws in California history.  A practical review of whether a property transfer meets the criteria of being considered a “sale” under Prop. 13 can be found here.

Brown’s goal is to change public perception

Then why do politicians like Willie Brown keep banging a loud drum in the media about commercial properties getting away with avoiding property reassessments by transferring “the stock in the company that owns the property”?   And why does Brown continue to propagate the myth that property taxes disproportionately fall on homeowners instead of commercial property owners?  The most impartial study conducted in California found that commercial properties pay more of their fair share of property taxes than residential properties.

Such facts don’t matter to politicians like Brown because their argument is for political purposes, not for rational argument.  It is the symbol of wealthy big corporate commercial property owners being stingy that Brown wants to fabricate.  A falsehood told often enough is often believed to be true.  And the mainstream media no longer view their job as correcting the erroneous statements of those who are for raising taxes in California.

The apparent objective is to get a split roll property tax on the books even if it doesn’t raise revenues and mostly impacts small businesses.  Once a split roll property tax is on the books, Willie Brown will again say that it is “unfair” that businesses have their property taxes reassessed every three years and residential properties do not.  Then they will take a case through the courts calling for “tax fairness.” And legislators will shift the blame onto the courts for eliminating Prop. 13 protections for all residential properties.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, has come out with a powerful call to arms in opposition to a half dozen ballot initiatives funded by billionaire California crony capitalists. The tax increases often are designed to feather their own pocketbooks.

Having already achieved the dubious distinction of being dubbed Taxifornia, the state of California infamously has America’s worst credit rating, second worst unemployment rate, third worst taxes and worst state business climate.  Raising taxes through the state initiative process for the benefit of special-interest billionaires seems like economic suicide.

In spite of its already brutal tax burden on individuals and businesses, the California state budget is estimated to have a $13 billion deficit over the next 18 months.  Gov. Jerry Brown last week announced his “leadership of California” is behind a state ballot initiative that would raise taxes $7 billion per year through increased income and sales taxes.

Grass-Roots vs. Billionaires

The Jarvis group’s founder, Howard Jarvis, pioneered the grass-roots use of the initiative process in 1978 to pass restrictions on rapidly escalating local property tax rates.  Because this people’s movement passed Proposition 13, California’s real estate taxes are only the 18th worst in the nation. This is why the Howard Jarvis Taxpaayers Association became so appalled that special interest billionaires are now highjacking the initiative process for their own benefit.  Jon Coupal offers as examples:

“Tom Steyer, a billionaire hedge fund manager with major investments in renewable energy, is promoting a $1.1 billion tax on out of state businesses with operations in California to fund renewable energy projects.  His initiative would make California an even more hostile place for businesses to operate, likely kill jobs and raise consumer prices, while diverting taxpayer money to corporate welfare for tycoons such as himself.  In 2010, Californians voters rejected the same tax increase on out of state businesses by a 58 percent to 42 percent margin

“Molly Munger wants to increase income taxes on everyone to raise $10 billion annually.  Munger is the daughter of billionaire Charles Munger, a partner of Warren Buffett at Berkshire Hathaway and is a Los Angeles civil rights lawyer. She has been credited for devoting some of her considerable fortune to support early childhood education, but she now seems intent on compelling everyone else to support the cause she has selected.  Regardless of her good intentions, forcing taxpayers to cough up another $10 billion will be a substantial additional burden in a state that already ranks third highest in income tax rates….

“The Think Long Committee [is] funded by Nicolas Berggruen, who is often called ‘the homeless billionaire’ because he lives in hotels and does not own a home.  Their initiative would raise taxes by $10 billion on all Californians by charging sales taxes on services, while reducing income taxes on the wealthy.”

Billionaires’ Paradise

The Think Long Committee, according to its Website, believes that California’s system of governance is broken. It states, “Meanwhile, decisive and unified leadership elsewhere in today’s world, notably in China, is building for the future.”

The leadership for the new worker’s paradise Berggruen seems to envision would require average Californians for the first time to pay a 6.75 percent sales tax every time they get a haircut, go to the drycleaners or pay an accountant to calculate their state tax rate.

Meanwhile, Mr. Berggruen would grant himself and other benevolent billionaires a 27 percent state income tax cut.  To demonstrate that billionaire-money-talks-very-loud in California, Mr. Berggruen has recruited as spokespersons former governors Grey Davis and Arnold Schwarzenegger and former Assembly Speaker Willie Brown.

Mr. Coupal acknowledges the range of motivation for billionaires to fund initiatives that “increase the tax burden on average Californians” may be for “using other people’s money to help what they believe are good causes, while, for others, it’s just good old fashioned greed — the measures they support will help themselves.”  But he worries that the California initiative process, meant to allow the average citizen to stop special interests in the state legislature, has been corrupted by a small cadre of billionaires with special interests and their crony allies.

Jan. 5, 2012

Yo ho ho and and a pot of redevelopment gold.

For 15 years San Francisco has tried to transform Treasure Island from a sandy former Naval base into a gold and jobs-generating new urban community with 40-story skyscrapers interspersed by parks and marinas. The idea came from then-Mayor Willie Brown as far back as 1995.

On June 15, 2011, San Francisco Mayor Ed Lee finally signed the formal approval to allow the redevelopment of Treasure Island to begin. While the city has been remarkably patient in its mission to secure approval for the $1.5 billion project, this project represents a golden opportunity to build a new city center for 19,000 new tax-paying residents.

There will be huge new skyscrapers secured into the volatile landfill with earthquake-proof foundations, a number of community parks, a seawall to prevent tsunamis and tons of sand imported to stabilize the land-filled island. Before the Loma Prieta earthquake in 1989, Treasure Island stood 18 feet above sea level. After the quake, it was at 6 feet. The new sand will be compacted into the existing soil to provide a solid base for the coming towers.

Mark Sarkisian of Skidmore, Owings & Merrill, the firm’s chief structural engineer on the project, said the towers and the other new buildings will be safe. He said, “We did shaker-table modeling and computer-generated effects to see how the new buildings will perform and we’re satisfied they will be able to safely withstand a 7.5 earthquake.”

Critics like Aaron Peskin, the former president of the San Francisco Board of Supervisors, don’t think the seismic or traffic issues have been thoroughly explored or tested. “I’d say that if you believe that the seismic issues are resolved, then you’re either a total optimist or an absolute fool,” said Peskin, who is presently weighing the idea of pursuing a legal action against the Treasure Island Development Authority (TIDA). “If we do bring an action, it will likely relate to the EIR [Environmental Impact Report] for the project.”

Indeed, as Anthony Pignataro reported on this site last year, Treasure Island has a toxic problem. He wrote that “a disputed portion of Treasure Island — the Navy says just a few sites, others say possibly the entire island — is radioactive. What to do about the radiological contamination has become the great unmentionable in the quest to turn the old, rapidly decaying base into San Francisco’s ‘premier date-night locale’….”

Opponents Outgunned

At this point, Peskin and Treasure Island development opponents appear to be outgunned. TIDA’s attorney-of-record on this is Tina Thomas, of the Sacramento law firm Ramey-Thomas. When she served in the first Jerry Brown gubernatorial administration, Thomas wrote the California Environmental Quality Act (CEQA) in 1974. Now she tends to serve developer interests, such as Sacramento’s Angelo Tsakopolous and Ron Burkle, the billionaire who is involved in the Treasure Island redevelopment plan.

The TIDA project involves Florida-based Lennar Properties, Wilson Meany Sullivan and Kenwood Investments (the Burkle-Anderson group) who say they hope to break ground early next year. The city of San Francisco is also a partner on the deal, since it’s chipping in $700 million in bonds; while Kenwood et al. are in for $500 million. The developers are projecting $370 million in profit at build out, and the city gets a taste of  it.

Over the next few decades, Lennar and friends will transform the island into a state-of-the-art neighborhood with a mix of affordable and market-rate energy efficient homes. Massive weight will compact the soil, keeping the island stable during earthquakes. A 30-foot seawall will guard against sea-level rise and possible tsunamis. Plans call for the ramps to and from the Bay Bridge to be redesigned and dedicated bus lines to run from the island to downtown San Francisco.

High-Paying Jobs

There are numerous reasons to welcome the new development at Treasure Island from a policy standpoint. It will create high-paying construction and engineering jobs for the length of the 20-30 year build out. It will also increase tax revenue and provide new housing for maxed-out San Francisco.

There are other reasons to abhor Treasure Island from a political process standpoint, for the redevelopment of this naval base is easily one of the sleaziest deals ever put forward in a city where political sleaze has reigned supreme since the octopus of Southern Pacific Railroad extended its tentacles over the city at the end of the 19th century.

Grand jury investigations into Treasure Island have occurred. The governing agency for the project, TIDA, is a bit of a mystery as to what kind of agency or corporation or city entity it is exactly, and recent rulings have relaxed the ethical questions that have characterized the process since it started.

Willie’s Plans

In 1998, reporter Chuck Finnie of The San Francisco Examiner wrote a story,  “Mayor’s Pals find Treasure on Island,” in which he laid out the plans that Mayor Willie Brown then had for Treasure Island.

Finnie reported:

“Political patrons of Mayor Brown who are favored for a Treasure Island redevelopment deal would pay The City at least $1 million less than the other two bidders, a Port of San Francisco financial report says…. The project is one of several in which the mayor’s staff and city commissioners have been asked to make business decisions involving people close to Brown…. Anderson worked as a volunteer raising money for Brown’s $2 million mayoral campaign.

“Burkle, who is backing Anderson’s bid financially, is a Los Angeles investor and former law client of the mayor’s during Brown’s days as speaker of the Assembly.

“The report, obtained by The Examiner under state public records law, raises questions about why the mayor is recommending the deal go to Treasure Island Enterprises, the creation of Anderson and Burkle…. [A] mayor’s selection committee judged Anderson and Burkle’s proposal best.” 

One of Lennar’s partners in the Treasure Island deal, Kenwood Investments, is the outgrowth of the original company hand-picked for Treasure Island by Willie Brown in 1998. Kenwood is headed by Burkle and Anderson.

Theme Park Plan

Willie Brown’s Treasure Island plan was first put forward in a document, “The Treasure Island Reuse Plan.” This plan would have transformed the former U. S. Naval base into a tourist-oriented theme park. The lead agency for the conversion would have been the San Francisco Redevelopment Agency.

In 1995, Willie advanced the idea that it would make a suitable location for Indian gaming casinos. In 1998, Willie tried to enlist reclusive Hong Kong billionaire Li Ka-Shing to develop it as such. But Li wouldn’t bite. “It was sort of a unique time,” said Larry Florin, who oversaw Treasure Island for the city in the late 1990s. “Land-use planning in San Francisco is like hand-to-hand combat, and you had this detached piece of property that no one thought about, so it was an opportunity for some free thinking to occur.”

Sweetheart Deal

Free thinking is one way to describe it. Treasure Island has been a sweetheart deal ever since the process got underway in the late 1990s. After Brown failed to get the project moving, the next mayor, Mayor Gavin Newsom, took a bite at the Treasure Island apple during his term. Newsom was figuratively caught with his pants down at a fund-raiser for him hosted by Burkle’s partner Darius Anderson in Sacramento in 2004. Again, the plan didn’t fly.

Present Mayor Ed Lee finally succeeded where the previous two had failed — despite a narrow, 4-3 approval by the San Francisco Planning Commission before the Board of Supervisors passed the plan unanimously by an 11-0 vote.

The Treasure Island project envisions a new ecologically friendly, “smart growth”-oriented, “sustainable” mini-city of 19,000 residents. It would have set-aside proportions of 20 percent of the new housing units designated for “low-income families” and the homeless with shining new high-rise commercial and residential towers interspersed among “pedestrian-oriented” retail units. All of it will be served by new ramped-up ferry services from San Francisco and the East Bay to Treasure Island to insure the “sustainability” quotient.

Most of the main players in the San Francisco Democratic Party Insider Club are also on board the Treasure Island Express. Besides Willie Brown, Gavin Newsom, Darius Anderson and Ron Burkle, the Treasure Island gold miners include Rep. Nancy Pelosi, D-San Francisco, and some of her family.

“There is no question there is a concerted effort to make this a political issue by some,” said Nancy Pelosi, speaking on the issue in 2010 when a new mosque was being proposed for Ground Zero in New York. “And I join those who have called for looking into how is this opposition to the mosque being funded. How is this being ginned up that here we are talking about Treasure Island, something we’ve been working on for decades, something of great interest to our community as we go forward.”

Indian Casinos

Pelosi, then-Mayor Gavin Newsom and Navy Secretary Ray Mabus signed the transfer agreement on Tuesday, June 10, 2010. It included a section of neighboring Yerba Buena Island, where Native American Indian remains were found in 2003.  That makes Yerba Buena Island a potential site for Indian gaming casinos.

Pelosi has used her power to push the crony-infested project for years. She pushed hard for legislative language that would have forced the military to grant highly valued properties at no cost to the local communities.

“Treasure Island is not a case of a small town that has relied on a local military base for its livelihood for decades. It is a land grab by politicians for well-connected developers,“ said Tony Hall, the former executive director of the Treasure Island Development Authority and a mayoral candidate. The authority is the firm that grew into an entity that Aaron Peskin said is “one of the great mysteries of our time. It’s a non-profit that grew into a LLC that then became a city agency.” Hall called the city’s effort to develop the island a “den of corruption.”

Peskin quoted a news story back to me: “A proposed Treasure Island development plan slates 90 percent of the developed acreage for residential use, 7 percent for commercial property and 3 percent for parking. An illustration shows about a dozen high-rise blocks of shoreline condominiums with stunning views of the city, plus 300 acres of park and recreation land.”

“This would hardly be ‘affordable housing,’ the $5 billion investment that Mrs. Pelosi claims would have to be recouped by the developer, Peskin snorted. “The only long-term jobs created from this plan would be for maids and doormen for the high rollers privileged enough to live there.”

The likelihood of a successful legal challenge to TIDA isn’t good. There are powerful political and economic forces at work here, and the whole Democratic Party team out of San Francisco is backing the plan. Willie Brown’s dream of gold on Treasure Island seems to be coming true.