Mayor's race stirs up waterfront battle
Newsom in hot seat over Mills Corp. project

By Savannah Blackwell

The battle over the future of a 19-acre parcel of prime waterfront property is shaping up as a significant issue in the mayor's race – and it's likely Sup. Gavin Newsom will be taking the most heat.

The San Francisco Port Commission voted 3-2 in April 2001 to award the Mills Corp., a Virginia-based shopping mall developer, the right to transform Pier 27/31 into a $200 million, massive retail and office complex featuring a new YMCA. It was a classic case of backroom deal-making by Mayor Willie Brown: the commission ignored the recommendations of its own staff and caved to pressure from the mayor. It's the same kind of sleaze that took place in the port's selection of a developer of a new cruise-ship terminal at Piers 30/32 (see "No Cash, No Contract," 7/3/00).

And now a group of environmental, neighborhood, and waterfront activists, as well as representatives of waterfront operations near the piers, such as the Cannery and Pier 39, has kicked off a campaign to force the port to dump the Mills proposal and rebid the project.

Sup. Matt Gonzalez has announced he's all for scrapping the Mills deal. But Newsom has told the activists he will likely continue to support it – even though he has expressed some concern for issues raised by the group. He has strong political connections to the Mills team, and his economic development plan trumpets the "site-sensitive" Mills project as a potential source of 1,600 jobs. But if he backs the deal, he risks associating himself even further with the corruption of the Brown era.

Politics played a role in the development plan from the start. Port staffers had initially recommended a rival, smaller-scale sports complex proposal offered by Chelsea Piers, a New York-based outfit chaired by Roland Betts, a high-powered pal of President George W. Bush. When the commission went with Mills, Betts cried foul – claiming Mills had used the community-friendly YMCA to pedal an inappropriately huge shopping and office complex.

State law discourages heavily commercial, nonrecreational uses of port land. The port's waterfront plan called for a maximum of 60,000 square feet of offices in the entire northeastern section of the port – including Pier 27/31. But some 400,000 of the total 1.4 million square feet in the Mills proposal is slated for offices and retail outfits.

At the time of the 2001 decision, the commissioner who provided the swing vote, Michael Hardeman, acknowledged that Brown had lobbied him personally on the matter. Hardeman said Brown argued the YMCA was more friendly to working-class families than the more upscale, yuppie-oriented facilities of Chelsea Piers were. But city hall insiders say Brown had another motive – to keep relations smooth with Mills, which had agreed to build a shopping mall at the proposed new 49ers stadium. (Mills is now threatening to walk on that deal.)

Citizens to Save the Waterfront, which wants to scuttle the Mills plan, has hired a campaign manager and gotten Sup. Aaron Peskin, who represents North Beach and areas near the site, to author a resolution calling on the port to scrap the project. The 11-page resolution lists a host of reasons to oppose Mills's development: the port's economic analysis of the project found it would eat into the profits of local businesses. A recent report produced by Korve Engineering for the city, the activists say, shows the complex will jam nearby streets and sidewalks. And the current market would likely no longer support such a large office and retail complex. (A huge office center is also slated for nearby Pier 30/32 – as part of the new cruise-ship terminal development.)

The San Francisco Board of Supervisors does not have the authority to rescind the port's approval. But, if passed, the resolution would send a signal that the supervisors might not look kindly on any environmental or other sign-offs needed for the project and, Peskin and the activists hope, indicate to whomever succeeds Brown that the port should move in another direction with the project. (A vote on the matter was scheduled for after press time.)

To that end, Citizens to Save the Waterfront is turning concern over the Mills project into an issue in the mayor's race. Gonzalez has told the group he'll support Peskin's legislation and has signed on as cosponsor. But when the resolution came to the Board of Supervisors Nov. 17, Peskin asked for a one-week delay on the vote. Newsom wouldn't even support that.

"Everyone, whether they've given money to Newsom or not, is really upset and disturbed that he voted against even discussing it," Jon Golinger, campaign director for Citizens to Save the Waterfront, told the Bay Guardian.

The group's opposition puts Newsom in a politically tough spot. Chris Martin of the Cannery and others in the group have been supporters of the candidate. Then again, representatives of Mills have donated at least $3,000 to Newsom's mayoral campaign. And Eric Jaye, Newsom's main campaign strategist, was on Mills's payroll at the time the project won approval. The spokesperson for Mills, David D'Onofrio, works for an outfit that's part of Jaye's Storefront Political Media operation called "Storefront Public Affairs." Jaye did not return calls seeking comment.

If Newsom were to become mayor, the situation speaks to the kind of problems that have arisen from Brown's heavy use of consultants – who then parlayed their alliance into big lobbying contracts. In October 1999 the San Francisco Chronicle reported that consultant Jack Davis, who played a major role in Brown's 1995 election, had amassed some $700,000 worth of lobbying contracts on behalf of various commercial and other enterprises seeking to do business in the city.

"This sounds like the pay-to-play politics à la Gray Davis and Willie Brown all over again," Peskin said.

E-mail Savannah Blackwell