A legacy of wreckage
Five big holes in the ground that symbolize the failure of Mayor Willie Brown's planning policies.

By David Moisl

SAN FRANCISCO STILL hasn't recovered from the dot-com era, a time when, it often seemed, greed so ruled the landscape that no renter, small business, nonprofit organization, or neighborhood was safe. Evictions were rampant. Displacement was an everyday event. City planning policy was ruled by a gold-rush mentality, in which money was all that mattered.

All over San Francisco, you can see the legacy of wreckage, the damage done by city officials who refused to recognize that the glimmering dot-com kingdom came at a price – that you can't bring thousands of new high-tech workers into a crowded city without driving out some longtime residents, businesses, and community organizations.

That attitude was not only cruel – it was also shortsighted. Because the boom was bound to end, and with it would go the high-paying jobs and endless demand for office space. And now that the dust from the wrecking ball has settled, it seems we may have lost more than we gained.

Perhaps the most striking testament to that era are the holes in the ground – the places where existing businesses and people were pushed aside to make way for ambitious new projects that never happened.

If you want to see the real fallout of the once greatly hailed high-tech boom and of Mayor Willie Brown's failed planning policies, you need look no further than the lots and blocks of urban wasteland in the South of Market, the north Mission District, and lower Potrero Hill. In those places blue-collar jobs, local manufacturing and light industry, and artist studios – things San Francisco officials now admit the city desperately needs – were lost for a promise that never materialized.

Every site has a different history behind it. Some tenants were kicked out, others were squeezed out by rising rents, and some were even forced out by natural disasters. But in each case, developers destroyed what was there for something that was supposed to be more profitable, and the city simply facilitated their desires and left the consequences to market forces. And when the market tanked, the city had nothing to show for it.

"It would be nice if we had some of those businesses back that were displaced," says Debra Walker, an artist and a former member of the city's Department of Building Inspection. "Most companies were doing just fine until they got priced out of the real estate market."

At end of the day, says Stephen Cohen, a professor of regional planning at UC Berkeley, it was bad business for the city to lay all of its eggs in one basket. "There now is a huge hole in the economy. We won't be able to replace that for years."

In one of its first attempts to address the systemic flaws of the planning process in San Francisco, the Planning Department has started an outreach program called Community Planning Process. Its first report concludes that by losing its economic diversity, the city also stands to lose its resilience to shifting economic trends and cycles. Small industrial enterprises are "a fundamental part of what makes San Francisco work," the report says. "What happens to them matters to the City."

So the following five properties around San Francisco are more than just vacant lots or the sites of unrealized dreams. They are symbols of larger community issues, and perhaps even harbingers of an uncertain future, one that can be prevented only if we learn the lessons they offer.

Bryant Square: Displacing industry and artists

Mosaic artist Lilian Sizemore, who rented one of the artist studios in a group of buildings on Bryant Street between 19th and 20th Streets, recalls what it was like before the buildings were demolished to make way for a commercial development called Bryant Square: "There was a fantastic atmosphere. There were about 50 tenants in the building I was in, from writers to photographers to jewelry casting to knitting. It was a vibrant community of not just artists but creative people. The rents were relatively affordable, which allowed people to experiment and do things that were off the beaten path."

Other buildings at the site housed a sweater factory, a small furniture factory, a nonprofit book publisher, a coffee roaster, and a commercial bakery. They were valuable – culturally and economically – but they couldn't compete with growing demands for high returns on investments.

The mood among the tenants of the site's former buildings changed quickly when an enormous office project was proposed and more and more people got kicked out. "When people lost their leases, there were moving vans out front every day," Sizemore says. "It was very sad. Bryant Square was a vibrant community that got systematically displaced and dispersed because of money."

Bryant Square was to be a 166,815-square-foot dot-com office behemoth in an area zoned for light-industrial use. The developer, SKS Investments, donated more than $100,000 to Mayor Brown's reelection campaign just one month before the project went before the San Francisco Planning Commission (which at that time was made up entirely of mayoral appointees) for approval. The necessary permits were quickly issued, demolition began, and soon thereafter, the economy tanked. It's been a hole ever since.

"We call it the Bryant Square swimming pool now," Sizemore says.

At the time it was being approved, many residents and community activists fought the change. A group called Community Alternatives to Bryant Square formed to oppose the design, vision, and political opportunism of SKS. CABS was also concerned that there was no assurance that new jobs created would benefit local residents. "New job creation serves no purpose at this point but to destabilize the labor market. Rather than creating jobs for a target population, projects often have displaced and eliminated jobs for neighborhood residents," reads a letter the group sent to the Planning Commission.

During the dot-com era, city and census figures show that about 80,000 new jobs were created in San Francisco, while the Housing Element, a state-mandated component of the city's General Plan that sets affordable housing goals, concludes that "between 1990 and 2000, commuters obtained 60 percent of new jobs in the City." As these numbers indicate, most of the new jobs created were not suitable to the expertise of those living low-income, working-class neighborhoods.

This not only created a wide discrepancy between available jobs and the skills of residents but also placed a lot of pressure on an already tight rent market. For many commuting workers, it became very desirable to move to the city. Because only 10,800 new housing units were built during the same period to accommodate this growth, San Franciscans had to compete with a new, highly paid workforce for places to live.

"Bryant Square is a perfect example of the flaws that were evident at that time. The city, and in particular the Planning Department, acted as if building dot-com offices was the only feasible development," says Antonio Diaz, a member of People Organizing to Demand Environmental and Economic Rights (PODER), an organization that cofounded the Mission Anti-Displacement Coalition. "Now what we have is a lot of empty buildings and holes in the ground."

Housing rights activist Calvin Welch says the city's planning process was, and still is to a certain extent, "extraordinarily manipulatable by well-funded developers and their minions, such as lawyers and lobbyists. Existing policies get thrown out the window when developers with big, fat wallets want a permit."

As of now, SKS plans to use two structures at the Bryant Square site (one existing, one to be built) as a residential project housing 77 units, with some office and mixed use also approved. While community advocates certainly welcome the switch from commercial invasion to providing housing, they say all housing isn't equal. "Housing is very much needed," Diaz says. "Our concern now, though, is how many affordable-housing units will be included. Market-rate housing for young urban professionals is not what the neighborhood needs."

Although the city has a shortage of affordable housing, the dot-com boom triggered widespread development of live-work lofts, whose developers are exempt from providing any affordable units because such projects are considered commercial rather than residential. In addition, live-work developments, like the one at 685 Brannan St., have often replaced industrial businesses. Meanwhile, a vibrant part of the city's arts community is just gone.

685 Brannan St.: Displacement does not make the radar screen

This empty lot right next to the I-280 freeway entrance at Sixth Street was going to be one of the city's largest live-work projects. The original proposal envisioned constructing four buildings containing a total of 177 live-work lofts. In April 2000, permission was granted to knock down the 10,000-square-foot warehouse that stood on the site. The warehouse and the adjacent outdoor lot were used for the storage and sale of terra-cotta pottery items.

The business was forced to move its operations to Dublin. Like the artists and workers at the Bryant Square site, the employees here were uprooted in the name of progress that never came to pass.

The project site is within a designated Industrial Protection Zone. In 1999 the Planning Commission started to address some of the concerns related to land-use conflicts and created interim zoning controls. An IPZ is intended to "protect and preserve the City's diminishing supply of industrially zoned land and building space for PDR [Production, Distribution, and Repair] uses." Live-work developments are not allowed in an IPZ. However, the application for the project was filed just three days before the site was designated an IPZ and was thus considered under the old regulations.

The Planning Department's Preliminary Negative Declaration (the first assessment of any given project), dated March 25, 2000, discusses the problem of displacement in a way that is emblematic of how the department dealt with the issue. The report acknowledges the "relative inability of PDR uses to compete with market pressures favoring live/work and residential uses." Nevertheless, it does not consider the permanent displacement of residents and industrial businesses a significant environmental impact. The declaration states that displacement and the demise of industrial space are "socio-economic concerns in nature and are thus discussed in this document for informational purposes only."

It is intangibles like community, tradition, and the feel and character of an area and its businesses that city planners have problems taking into account. City planning decisions are usually based on "significant environmental impacts," while intangible impacts to the culture and community are secondary considerations.

The rules for building live-work projects exempted many developers from providing affordable housing. The market for this kind of development has disappeared, but many developers are still trying to creatively circumvent the city's mandatory affordable-housing laws, as is clearly visible in the site at 557 Fourth St.

557 Fourth St.: Avoiding affordable-housing requirements

Before a fire Jan. 1, 1998, destroyed the buildings at 557 Fourth St. – an area encompassing almost an entire city block – this was one of the few remaining small-industrial centers in San Francisco. Among the many small industrial businesses were a company that sold tires and a plumbing service. Yet rather than facilitating a return to industrial use, the property's owners sold it to developers with grand plans to take advantage of the boom.

They proposed constructing 12 buildings with a total of 188 live-work units and an underground parking garage with 480 spaces. The construction cost for the project was estimated at $20 million. The developer, Joe Cassidy, is a friend of the influential Joe O'Donoghue, president of the Residential Builders Association. Cassidy planned to finance the project by designating more than half of the parking spaces for public use and charging fees for them. Since the end of the dot-com boom also meant a decline in demand for parking spaces in the area, the project was later revised. The current proposal envisions 330 housing units above nearly 19,000 square feet of retail space.

In April 2002, Sup. Chris Daly introduced a resolution to create a Special Use District just for the site, which would expand the allowed height limit from 50 feet to 85 feet, meaning that the height and scale of the proposed building at 557 Fourth St. would be roughly double that of most nearby structures. The resolution has since been adopted by the San Francisco Board of Supervisors and signed by the mayor. Having their project declared an SUD also allows the developers to bypass a city law requiring 17 percent of the residential units be made available at affordable, instead of market, rates in exchange for building, in this case, 56 affordable units somewhere else (no site so far has been purchased or proposed).

Critics charge that allowing at one block what is forbidden at the next amounts to spot zoning and is basically rewriting and circumventing the Planning Code for the site. Land-use attorney Sue Hestor thinks the current SUD designation is only a convenient bailout for the developer: "The proposed Special Use District legislation not only provides for less affordable housing, with less protections of long-term affordability; there are also less guarantees that it will be constructed in a timely manner than current law provides."

The businesses at this site were not directly displaced by dot-com developers. However, the larger trend in the city went toward eliminating more and more space for industrial businesses and services and replacing them with a one-size-fits-all economic model. Another example of the demise of industrial jobs is the deserted site at 188 King St.

188 King St.: Displacing and replacing industry in San Francisco

There used to be a thriving garment factory at this site. When the previous owner retired, he closed the factory and sold the property to real estate speculators, who swiftly demolished the warehouse that housed the factory to make way for a live-work development. In a letter to the Planning Commission, Alice Barkley (who did not return phone calls seeking comment), the lawyer representing the developers, argued that the demolition of the warehouse was justified on the grounds that it represented an "under-utilization of the site." In late 2000 the Planning Commission approved the construction of an eight-story building containing 46 live-work units.

The Planning Department stated in a report about the proposed live-work units at 188 King that they "are restricted to artists uses." Developers continually played up the idea of providing needed affordable space for struggling artists, when in reality, such spaces were being used by affluent dot-com companies. At the time, the department acted as if it did not know what would happen to the fancy live-work lofts once they were built, even as Barkely writes in her letter that "demand for live/work units for small businesses and other information technology businesses services continues to be high" and that "the project site ... will provide work/live space for small start-up firms."

By then, even the Planning Department had realized this. The "Rezoning Options Workbook," part of the Community Planning in the Eastern Neighborhoods initiative, states that "live/work developments were initially permitted in industrial districts to accommodate artists' needs ... but became a highly profitable residential development type and were soon priced out of most artists' means."

The lot at 188 King has been laying bare behind a fence for years now. The Planning Department official overseeing the project, Mathew Snyder, says there have been no new proposals submitted for application. Indeed, one of the faults that becomes apparent through all of these empty sites is that the Planning Department issues permits but does not follow up on whether a project is being built.

"A lot of times, the developers get their entitlements before they get their financing," Snyder says.

Former planning commissioner Dennis Antenore thinks this blind faith in the market is dangerous. "While you certainly cannot force developers to go through with their projects when their funding runs out, there are other things you can do to prevent this kind of thing in the first place.... There are certain desirable land uses that simply cannot compete in the marketplace. For these activities, planning safeguards are needed."

During the boom the Planning Commission often sided with developers by interpreting the rules freely to suit their interests. Turning a blind eye to the actual uses of live-work developments was one way it did this. Another was helping big developers to get business-service or light-manufacturing designations. These classifications enabled developers to rent out industrial spaces at office-space prices. According Hestor, the developer of the following site, at 450 Rhode Island St., Ron Kaufman, is "the biggest example of a person claiming that they are not building offices, when clearly they are."

450 Rhode Island St.: Replacing real businesses with 'business services'

The last occupant of this lot was S&C Ford, which used to have a warehouse and an automobile-repair facility on the site. The business lost its lease when Kaufman bought the property in the mid '90s. Fortunately, it was able to relocate to a different place in the city. A worker at the new location told us the business is now "crushed into a lot less space. There also is less business. I don't know if that has to do with the site or if it's just the way things are." One of the owners of S&C Ford, Charles Mori, declined to comment.

The now-bare block at 17th and Rhode Island Streets was proposed and approved in 2000 to be the new headquarters of Macromedia. It was to be a 295,000-square-foot office building with 543 parking spaces. The developers lost no time and immediately demolished the car-repair shop. Like Bryant Square, the proposal was grossly out of scale for the neighborhood. Whereas about 65 people worked on the site previously, Macromedia would have brought an estimated 1,100 new employees to the neighborhood.

There was some controversy over the Planning Department's concession to designate Macromedia as light industry since there wasn't any office use allowed in that zoning area. At the time, Larry Badiner, the Planning Department's zoning administrator, contended that "Macromedia produces the tools necessary to develop websites, and in that way could be analogous to Light Manufacturing." Hestor, who vehemently opposed the project, replied in a letter to the Planning Department, "Is writing a cookbook analogous to running a restaurant?" The controversy was also fueled by the fact that Kaufman is the husband of former supervisor Barbara Kaufman and a donor to Mayor Willie Brown's 1999 reelection campaign.

Kaufman told us he blames Hestor for ruining the Rhode Island Street project. She appealed the environmental impact report for the site twice on the grounds that it was inadequate. Her appeal was denied in both cases after a long period of time. Meanwhile the economy slumped, and the project was abandoned. Hestor told us that in this case she took the credit for halting what she considered a flawed project, but more often it is the developers themselves who derail projects.

In 1986 voters approved Proposition M, which limits new office development to 950,000 square feet a year. In order to circumvent that cap, most Internet companies tried to get classified as "business services," which the Planning Department defines as companies generally involved in selling some type of craft or service. Although in practice many developments received this designation, the Planning Department announced in an internal Information Flyer in October 1999 that it "will not give blanket approvals of multi-media as business services or as non-office uses."

Miriam Chion, a department official responsible for the new Community Planning Process, agrees the dot-com boom exposed various loopholes that developers could use to their advantage. "Our task right now is to make sure we increase certainty," Chion says. "We need to come up with zoning rules that are clear, specific, and that address community concerns. Both the community and developers should know what they are getting into."

Kaufman has submitted a new proposal for the Rhode Island Street site, which is to construct a mixed-use residential and retail project. It would house a 35,000-square-foot grocery store and 168 housing units. According to Kaufman, the project now has more support from the public. The project could come before the Planning Commission for approval as soon as July.

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During the boom the Planning Department definitely seemed to be more sympathetic to permit applicants than to residents. "The department is involved in talks with developers before the public is," housing advocate Calvin Welch says. "This naturally breeds some suspicion on the side of the public. The general attitude of the city is very business friendly: If you want to invest, you should be allowed."

Professor Cohen says the city could not have known the dot-com economy would go bust and thus did not do anything wrong. "It's pretty hard for the city to say no when the world is paying for a giant convention in San Francisco. That's basically what it was."

Yet Antenore, who served on the Planning Commission during the peak of the dot-com boom, from 1996 to 2000, thinks that "things got out of hand, and developments were happening too fast. You could predict ahead of time that this wasn't going to be sustainable. However, people did not pay any attention to that.... There was this kind of let-it-rip philosophy, without any consideration for actual planning concerns."

During the past eight years, virtually all live-work project applications have been approved despite some strong community opposition. Chion believes they were approved because the rules allowed those projects. This is why the Planning Department is in the process of defining explicit zoning controls in the eastern neighborhoods that will balance and reconcile the different interests of the community and developers.

"The live-work projects probably destroyed the fabric of those communities," Chion says. "The current zoning controls are inadequate, and the flexibility of those rules did not provide a reasonable level of certainty." Many people reacted to the dot-com development craze in frustration and took it as a sign that the planning process is rigged in favor of developers and that the city does not really care about its communities.

"The dot-com era created new players on the communities' side," Welch says. "These people contend that planning should be a part of the community, not left to experts, academics, and city officials. Neighborhood-initiated land-use controls will prove to be really crucial in terms of shaping future policy for San Francisco. How the Planning Department deals with these will be significant."

PODER's Diaz agrees. "Community participation is greatly needed so that we can have a say in what kind of development we really need," he says. But the difficulties in creating planning procedures sensitive to residents' concerns are hard to fix. The system itself is set up in a way that allows for plenty of public participation, even if decision-makers are free to ignore that input.

"We have a very open and participatory process in San Francisco for development issues," Welch says. "Theoretically San Franciscans have a great amount of formal process input. People are not upset that they haven't been heard but that they haven't been agreed with."

One significant change since the dot-com years was the passage of Proposition D in March 2002, which broke the mayor's control over the Planning Commission by allowing the president of the Board of Supervisors to appoint three of the commission's seven members. Activists say that removed some of the politics from the planning process.

"I have high hopes for this current Planning Commission. Unlike its immediate predecessor, their only imperative is not just to make the mayor happy," Welch says. If all else fails, Welch notes, there is always the option to "change the mayor who makes the appointments in the first place. After all that's how representative democracy works."

While it's true the Planning Department is at least trying to refine its system so it becomes more sensitive to community input, it remains to be seen whether these attempts are just cosmetic alterations or genuine changes. In the inevitable next boom, it will become clear whether the city has learned anything from the dot-com period. As Antenore points out, "The responsiveness of the new Planning Commission has not yet been tested during crunch time."