IT SITS ON a prime piece of San Francisco waterfront real estate. Five years ago the city determined it was worth $210 million. But now Mirant Corp., the Atlanta-based power company, claims its Potrero power plant should be assessed at only $40 million and is trying to squeeze the city for some $8.5 million in back taxes.

As Matthew Hirsch points out on page 13, it's a scandalous case that will test the resolve of the local Assessment Appeals Board and that ought to be a huge political issue citywide.

Mirant, which also happens to be one of the worst polluters in town (and one of the worst gougers during the energy crisis), is taking advantage of a 2003 change in state law that took the authority for assessing power plants away from counties and gave it to the state Board of Equalization. The state agency uses a different criteria for valuing the facilities – it takes greater account of the current price of energy, and less of the inherent and lasting value of land and buildings in a city like San Francisco – and has a long track record of favorable treatment of utilities. The BOE claims the Mirant plant was worth only $43 million last year, and Mirant wants to use that lower value to challenge the city's assessments all the way back to 1999.

For starters, letting the BOE assess power plants was clearly a bad idea, and state senator Carole Migden, a former BOE member who authored the bill to make that change when she was in the state assembly, ought to move immediately to repeal it. But even Migden's replacement on the BOE, Betty Yee, argues that the board's current valuation shouldn't be used to reduce taxes from past years. The Assessment Appeals Board should reject Mirant's claim entirely and refuse to award this crybaby millionaire polluter a single dime in tax refunds.

Beyond that, the San Francisco Board of Supervisors and mayor ought to make this a major public cause: San Francisco is cutting soccer programs for low-income kids, eliminating the senior escort program, and closing recreation centers, mental health facilities, and homeless programs – in other words, making life tougher for the most needy and vulnerable in town.

This appeal is absurd. As Assessor Mabel Teng notes, the land alone – situated at the foot of Potrero Hill, not far from the new Mission Bay development in an area with soaring real estate values – would almost certainly sell for more than $40 million. And if Mirant really wants to insist that's all the property's worth, it's clearly the bargain of the decade. The city ought to use its power of eminent domain to buy it.

P.S. Meanwhile, the San Francisco Chronicle continues the drumbeat to tear down the Hetch Hetchy dam. A Jan. 16 piece by environmental writer Tim Holt puts forward an antienvironmental argument that would damage the public power cause (see "Save the Dam," 8/14/02).