Editorial: The case against the 8 Washington tower

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Editorial note: In 1971, at the height of the Alvin Duskin anti-highrise battle, the Guardian did a special first ever cost benefit study for high rise office development.

We found that highrises cost the city  more in services than they produce in revenue.  This meant that the commercial high rise boom could be fought on economic grounds, not just aesthietic and environmental grrounds, and the Chamber of Commerce/Big development gang could never adequately refute our findings.  In fact, they are now taken for  granted. So, as the 8 Washington battle is poised to open the floodgates even further for a forest of market rate residential  buildings, it's time for the city to do its own study to determine the economics of high end  residential buildings.  Does the cost of servicing luxury residential buildings exceed the taxes they pay? We and many others in the neighborhoods are certain that market rate housing doesn't pay for itself. But the facts are needed and so we urge the supervisors to direct the budget analyst or the city economist to do a similar analysis  for luxury condos.  Below is Executive Editor Tim Redmond's powerful argument against 8 Washington.

By Tim Redmond

tredmond@sfbg.com

In city planning terms, it's a fairly modest project: 134 condos, no buildings more than 12 stories tall, on a 27,000-square-foot site. It's projected to meet the highest environmental building standards and offers new open space and pedestrian walkways. It's near Muni, BART, and ferry lines. And the city will collect millions of dollars in new taxes from it.

But the 8 Washington project, which will come before the Planning Commission March 8, has become a flashpoint in city politics, one of the defining battles of Mayor Ed Lee's administration — and a symbol of how the city's housing policy has failed to keep pace with the needs of the local workforce.

Put simply, it will create the most expensive condos in city history, housing for the richest of the 1 percent on the edge of the waterfront — and will further push San Francisco toward becoming a city that caters almost entirely to the very wealthy.

So in a city where the growing divide between the 1 percent and the rest of us has become a central issue and where the lack of affordable housing is one of the top civic concerns, 8 Washington is an important test. By any rational standard, this sort of development is the last thing San Francisco needs.

But some of the best-connected lobbyists in the city are pushing it. One of the mayor's closest allies, Chinatown powerbroker Rose Pak, is a leading advocate — and the final outcome will say a lot about city politics in the Lee administration.

There are all sorts of half-truths and misleading statements by supporters of 8 Washington. Here are the five main reasons the project shouldn't be approved.

1. It fills no housing need. San Francisco has no shortage of housing for the very rich; the dramatic need, outlined in both regional planning documents and the city's own General Plan, is for low- and moderate-income housing for the people who actually work in this city (see "Dollars or sense?" 9/28/10). While San Francisco is getting richer by the day, the core workforce — public employees, workers in the hotel and restaurant industry, service workers, construction and trade workers, and a majority of the people in the lower levels of the finance and tech sector — are being priced out of the city. That means more people working here and living far out of town, often commuting by car, in what everyone agrees is an unsustainable situation. Meanwhile, more and more high-paid workers from Silicon Valley are living in San Francisco — again, commuting to distant jobs, either by car or by corporate bus.

The city's General Plan states that some 60 percent of all new housing built in the city should be below market rate. San Francisco desperately needs housing for its workforce. This type of project simply puts the city deeper in the hole and further from its housing goals.

2. It's a reward for bad actors. The main developer of this project is Simon Snellgrove, but one of his partners is, by necessity, Golden Gateway, which owns a significant part of the land — and which has been flouting at least the spirit if not the letter of city and state law and costing San Francisco tens of millions of dollars.

As project opponent Brad Paul has noted in written testimony, when Timothy Foo, the current owner, bought the complex from Perini Corp. about 20 years ago, he used a loophole in state law that allowed him to avoid a formal transfer of ownership. That means the property wasn't re-assessed, costing the city about $1.5 million a year. According to the Assessor's Office, the deal wasn't illegal (and these tricks to avoid reassessment are relatively common) but still: He's costing the city millions by using a loophole not available to most people.

Golden Gateway, which was built in a redevelopment area as middle-class housing, is now renting out apartments as short-term tourist or corporate rentals. There are dozens of examples right now on Craigslist. City law bars the owners of rental housing from converting it to hotel rooms, but a loophole in that law makes what Foo's outfit is doing technically legal. But he's clearly violating the spirit of the city ordinance that seeks to protect rental housing from hotel conversions.

One of the main aesthetic complaints about the area — something Snellgrove's lobbyists have tried to use to support the project — is the ugly fence that now surrounds the Golden Gateway Tennis and Swim Club. But who do you suppose put that fence there?

Do we as a city want to be giving special zoning benefits to companies that try to circumvent tax and housing laws?

3. It's an environmental disaster. Snellgrove and his architects, Skidmore Owning and Merrill, are seeking LEED platinum certification for the project, saying that its energy-efficiency, water use, and green building materials will make it one of the most sustainable structures in San Francisco. It is, the project website notes, close to all types of public transit.

But LEED doesn't take into account what the building is used for (see "Is LEED really green," 7/5/11) — and in this case, the use makes a huge amount of difference.

People who buy multi-million-dollar condos don't tend to take Muni or BART when they go places. That's not conjecture, it's a proven fact. A 2008 study by the American Public Transportation Association notes, bluntly, that wealthier people are more likely to drive cars. When you move into the stratospheric regions of the ultra-rich, that's even more true. A 2011 report on the Charting Transport website notes: "The very rich tend to shun public transport."

The current zoning in the area allows for one parking space for every four residential units. Snellgrove is asking for one space per unit — in other words, he figures every single buyer will have a car.

Many of the people who buy these condos won't be working or even living most of the time in San Francisco. These are condos for world travelers, second and third homes for people who want to spend a few weeks a year in San Francisco. "They aren't going to be living here all year," Christina Olague, a former Planning Commission member who is now the District 5 supervisor, told us last July.

If five of the 165 residents of 8 Washington fly in a private or corporate jet from, say, New York to their SF pad once a month, the project will cause the use of jet fuel equivalent to what a normal family would use driving a car for 330 years, Paul noted.

"How many solar panels are needed compensate for burning 396,000 gallons of jet fuel a year?" he asked.

Then there's the construction issue. If the developer's projections are correct, as many as 20,000 dump truck runs will be trundling along the Embarcadero for several months, one every two minutes — and it could be happening right as the traffic nightmare called the America's Cup is hitting the waterfront.

It also goes against some 40 years of waterfront planning policy, all of which as focused on downzoning and creating open space. This would be the first upzoning of San Francisco waterfront property in decades.

4. It will wipe out what is mostly a middle-class recreation facility. The Golden Gateway Tennis and Swim Club will be closed for three years, then (possibly) reopened later as a smaller facility. The club — with two outdoor pools and six tennis courts — sounds like something for the elite, and it's managed by the upscale Bay Club, but a lot of the users are longtime Golden Gateway residents and seniors. "I would say 30 or 35 percent of the users are seniors," Lee Radner, chair of Friends of Golden Gateway, told me. Most, he said, are middle-class people, and the expense isn't that high. "My wife and I pay $3 a day to use the pool," he said. "I swim every day, and it would cost more than that to use the public pools in the city." He added: "There are some wealthier people, of course, but many of us are retired and on fixed incomes."

We're talking about 90,000 total square feet of outdoor recreation space — which dwarfs the 20,000 square feet of open space the developer promised to provide.

5. The city doesn't get much out of the deal. In exchange for upzoning the waterfront, creating a big all of buildings and screwing up the city's housing balance, what does the San Francisco general fund get? Not a lot. The estimates for new tax revenue run about $1.5 million a year of the next 60 years — and when you translate that to what economist call "net present value," the cash equivalent today of that revenue stream, it's about $30 million. The Port of San Francisco is talking about creating a special infrastructure financing district — sort of the equivalent of a redevelopment area — to pull that money out in advance, which may not even be legal (since part of the land is a former redevelopment area, the state law that allows these special finance districts may not apply). But even so, a Jan. 14 Port memo suggests that the agency has plans to spend all that money on its own infrastructure — setting up a potential battle between the supervisors and the Port Commission over where the money, if it actually can be collected up front, will go.

Like any developer, Snellgrove will pay into the city's affordable housing fund — in this case, about $9 million to pay for the equivalent of 27 units. No affordable units will be on site, of course; that would detract from the uber-wealthy ambience of the place. And it's not clear when those units would be built. "Nobody builds 27-unit buildings any more," Paul, a former deputy mayor for housing, said. "We'll have to wait until there's enough money for a bigger project, somewhere, sometime down the road. That's what we're getting here."

Either way, it's not a huge benefit for allowing this disaster of a project — and it's a terrible statement for San Francisco to make. At a time when the mayor has cleared the Occupy protesters — who are talking about how little the rich pay in taxes — off the waterfront, the city is preparing to move in the exceptionally rich, who aren't paying anywhere near their fair share in tax revenue to local government.

(Nobody knows for sure whether the costs of servicing high-end residential exceed the revenue the city gets from property taxes. In 1971, the Guardian put together the first-ever cost-benefit study for highrise office development, which showed that commercial buildings cost the city more than they paid; that's been confirmed and demonstrated over the years to the point where it's hardly even an argument any more. The supervisors ought to ask the city economist or the budget analyst to do the same sort of analysis for luxury condos.)

There's another element here: Mayor Lee made a point during his campaign to say over and over again that he was an independent thinker, that powerful and influential allies like Rose Pak would not be calling the shots at City Hall. This will be his first major test: Pak and lobbyist Marcia Smolens are working hard to promote 8 Washington. And we're already getting some disturbing signals out of the mayor's office.

Lee told us that he has "no thoughts" about the project and hasn't been paying any attention to it. That's an odd stance, considering that his own Port Commission is pushing it and staffers in his office are working with the developer. This is a big priority for Pak, and the notion that she has never mentioned it to the mayor defies reason. Board President David Chiu, who talks to the mayor regularly, opposes the project, which is in Chiu's district.

It's hard to imagine that anyone who pays attention to local politics could be missing what will be one of the landmark votes this spring on the Planning Commission — which will take up the project March 8 — and the Board of Supervisors.

The mayor, may, indeed, be ignoring everything that supporters and opponents of 8 Washington have said and may be waiting until the Planning Commission vote to take a position. But if he's just ducking questions because he's planning to support it, he's making a big mistake.

This is a chance for San Francisco to go beyond the platitudes about building housing, go beyond the hype about "green" buildings, see through the fraud about community benefits and consider what this really is: A special favor for a developer who wants to cater to the top 1 percent of the 1 percent and move San Francisco even closer to being a city of, by, and for the elite. The only reasonable vote on 8 Washington is No.

Comments

The part about the increased use of private jets because of 8 Washington is my favorite. So apparently we have plenty of housing options for the uber rich but it is the building of 8 Washington that will cause people to fire up their private jets for the weekend. If not for 8 Washington they would stay home in New York composting or something. 8 Washington has some type of hypnotic draw for theses jetsetters that just doesn't exist in the Millenium Tower or on any one of the downtown or Nob Hill multi-million dollar housing options. Or maybe a place in the Bahamas. Nope. Build this project and they will come, leaving entrails behind them.

Posted by Guest on Mar. 06, 2012 @ 4:53 pm

The manufactured hysteria (1 dump truck every two minutes!! Private jets!!) is in itself - hysterical.

As is Olague's concern that the residents of 8 Washington won't "live here all year." Is Olague as concerned about transitory student renters - many of whom live in Olague's district in USF housing? I wonder when the Board is going to institute a plan to monitor how many days SF residential property owners spend in their property each year?

Posted by Guest on Mar. 06, 2012 @ 5:04 pm

anyway? If you buy a home you have the right to be here or not be ehre. If you choose to pay your property taxes and not consume any city services, we ought to be thrilled.

And why does Tim say there is anough housing for rich? If there was, such places would be cheaper. the real point is that Tim doesn't want more successful people here in SF because it will change the demographics and voting patterns.

The city will get miilions in tax revenues, hundreds of new jobs and the kind of resident who actually adds to the city's coffers rather than suck them dry. But of course Tim would prefer more homeless people, bad poets, pot smokers and other assorted losers.

Posted by Guest on Mar. 06, 2012 @ 5:20 pm

The problem is the cars. Apparently the condos at 8 Washington will be bought by people who come to San Francisco infrequently, but their cars will be in constant use. This goes beyond the environmental disaster that Tim predicts. These riderless cars are downright dangerous!

Posted by Guest on Mar. 06, 2012 @ 6:43 pm

environmental disaster. And the whole point with this location is that you can walk everywhere and that it is at the hub of public transit. That would be a better argument against suburban development than this.

Posted by Guest on Mar. 07, 2012 @ 8:09 am

having? Why not tell that to the 27 families you are condemning to sub-standard housing, homelessness or banishment from the city.

Tell that to those who will lose city services because of budget cuts.

Tell that to city workers who will have their pay, hours, benefits or jobs cut.

But no, as long as you get to hate on some successful people, none of that really matetrs, does it? Because you care more about class warfare and the politics of envy than you about the city and it's people.

Posted by Guest on Mar. 06, 2012 @ 5:27 pm

This bickering about specific housing options for the rich is futile. They have plenty of luxury options and if they did run out they would just buy something upper middle class and re build it. Tim makes some great points but attacking the problem in a piecemeal fashion is a wasted effort.

So I'll say it. The time has come to call for the forced relocation of all wealthy persons to areas outside of the City and County of San Francisco. This may sound harsh at first but in fact, by relocating to areas such as Hillsborough and Belvedere they will be living among their own kind, in communities in which they will feel comfortable and wanted.

Think about it. The buildings on Nob Hill will now be used for BMR housing.

Of course, the wealthy must compensate us for the loss of their future tax dollars. They should have to pay a sum equal to 10 times their annual real estate taxes as an outgoing wealth punishment toll.

The sooner the better.

Posted by Steroidal Progressive on Mar. 06, 2012 @ 6:37 pm

Looks like 8 Washington's paid media guy is hard at work...

Posted by Guest Public Trust on Mar. 06, 2012 @ 8:17 pm

Just curious...

Is it that you think that a negative editorial from the SFBG could unexpectedly doom the project unless people ridicule it?

Or is it that anyone who disagrees with the SFBG position MUST be getting paid to do so?

Posted by Guest on Mar. 06, 2012 @ 8:46 pm

a paid agitator. It never occurs to them that the vast majority of this city thinks very differently about issues like this than the SFBG class-warfare party line.

It's so unthinkable to them that they have to believe that you are paid to say that because, in their closed, narrow minds, nobody would ever thinks such things.

And yet Lee just got elected with over 60% of voters thinking the way you and I do.

Posted by Guest on Mar. 07, 2012 @ 7:02 am

Sure, they ran Aaron Peskin's "Anyone But Ed Lee" editorial, but don't forget that All of the SFBG's Supervisor endorsements were rejected by the voters.

So I guess that it is possible that people don't agree with their positions, but they'll never admit that -- to themselves.

Posted by Guest on Mar. 07, 2012 @ 8:57 am

those who agree with them. If there is a dissenting voice then they quickly assume one of two things - either you're a "troll" or you're paid to express that view.

They just cannot grasp how marginal and out of touch their viewpoints are with the vast majority of people. Which of course makes it impossible for them to understand or accept election results. So they go into denial. Or of course claim the election was bought or rigged or stolen.

There are none so deluded as those who won't look or listen.

Posted by Guest on Mar. 07, 2012 @ 9:25 am

And I think this goes for all true believers right or left, they seem to think that their views are so correct and obvious that all they need to do is explain them to you and you will get it and agree.

With all overly constructed world views, they have the secret knowledge and they are bringing you the insight from that world view, if you are too dumb to get it, that is your own fault, and thus dumb and a troll.

It is much like the born againer who willtell you about all the joy they find in jesus and what a great life they have and etc... If you reject all that nonsense you are just not smart and well informed like them.

Posted by Guest on Mar. 07, 2012 @ 10:26 am

Sure it might be nice if 60% of new housing was "affordable". But affordable housing requires a subsidy and the taxpayers aren't willing to fund that while they are struggling with their own housing costs, and you can't blame them.

There is nothing to stop 60% of new housing being this, that or the other. But it does not follow from that that NO new housing should be built for those who can and want to pay more. There are shortages of housing at all levels, and if there were no demand for these 134 condo's then there would be no plan to build them.

The city's housing policy doesn't ban new build for the wealthy. And in fact many of the affordable units that are built in SF are built as a set-aside from developments exactly like this one. So why would you turn your nose up at new affordable units just because it means that some other new units are less affordable? That's perverse thinking.

Posted by Guest on Mar. 07, 2012 @ 8:14 am

paid PR guy will spin as "guest" and various aliases until 5pm, then will fall silent as usual and never actually address any of the issues...sad and illustrative how this public forum is manipulated by greed (like the puppet city officials); bravo, SFBG and people of San Francisco, we know a scam when we see one

Posted by Bobby on Mar. 07, 2012 @ 9:33 am

>paid PR guy will spin as "guest" and various aliases until 5pm, then will fall silent as usual

Yeah....unfortunately the posts are time stamped and show otherwise.

But we understand what you are trying to say anyway.

Posted by Guest on Mar. 07, 2012 @ 10:12 am

Like concern over people flying to SF in their jets to spend a few days in their place at Broadway and the embarcadero?

People bored at work posting until they get off at five?

A PR guy posting on the Bay Guardian web page that is read by dozens?

The conspiracy marches on.

Posted by Guest on Mar. 07, 2012 @ 10:21 am

Granted, some were more satirical than others but we did respond to specific points. All we got back was 'You guys must be paid to post those things'.

So just who is avoiding the issues???

And please kindly tell Bruce that it doesn't help when you pull out a 1971 study about high rises and claim that it prooves that a 12 story building in 2012 is a bad thing.

Posted by Guest on Mar. 07, 2012 @ 10:52 am

Great idea, great development, great for SF. I can't wait to move in.

Posted by Pat Monk's prostate on Mar. 07, 2012 @ 12:04 pm

in any way whatsoever either way.

Not all liberals share your open big-heartedness.

Posted by Guest on Mar. 07, 2012 @ 12:21 pm

There are many reasonable arguments that could be made in opposition to this condo project; unfortunately, one does not seem to be able to find reasonable arguments being made in SFBG anymore:

(1) Cars that apparently will drive themselves while their owners supposedly are spending almost all the year outside of SF living in one of their three or four other homes? (Hint, cars still require drivers in order to operate).

(2) Individuals who apparently will pay a huge sum of money to purchase a condo right on the downtown waterfront all for the privilege of spending a lot of time driving their cars? To where? San Mateo? Fremont? Livermore? (Yes, I am sure many residents will have a car available for a day trip, etc., but I doubt many of them will drive those cars every day while they are occupying their condo, especially if they will supposedly have their primary residence out-of-state).

(3) Private jets flying out once a month from New York? (Yes, private jets flying residents of Atherton to their summer estate near Cabo San Lucas, perhaps, but not flying uber-wealthy Manhattan residents to their little SF condos to slum it for the weekend. They are too busy flying to Saint-Tropez and Punta del Este instead).

(4) Dump trucks arriving every two minutes, all apparently timed to deliver right as the America's Cup race is occurring? (There is a permitting process for dump truck deliveries so they can be properly timed. Also, this is a fairly modest construction project--a much larger apartment building is going up on Mission Street near where I live, and there is certainly not a dump truck arriving every two minutes).

In short, who comes up with this sort of above absurd crap?

Will there be a forthcoming editorial about how the condo project will open up a portal to Hell and release a legion of winged demons on SF?

Tim, if I thought you were writing a satirical piece for the Onion, I would say you were doing a great job. But, this is supposed to be a serious news journal. Please drop the hand-wringing and hysterics and start writing editorials that give your readers credit for having at least a little intelligence and common sense.

Posted by Chris on Mar. 07, 2012 @ 11:59 pm

It's not optimal when the executive editor of a paper makes simple mistakes in an editorial.
It is significantly less than optimal when the great granddaddy of them all does. Can't you all use spellcheck ??
"just aesthietic and environmental grrounds,"
"they are now taken from granted"
"poised to open the floodgates even further for forest of highrise reseidential"
"city economist to do a similar analyst for luxury condos"

I mean does ANYONE proofread this stuff?
Is this acceptable quality???

Posted by Greg on Mar. 08, 2012 @ 8:38 am
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Posted by Darrell Bechtold on May. 10, 2012 @ 11:11 am

The estimate of $1.5 million per year in taxes assumes an average sale price of $1 million each for the 134 condos. But Tim says the condos will be the most expensive in the city. If so, and the condos sell for $5 million each, then the city gets $7.5 million per year in property taxes. (The city may get additional money from taxes on other economic activity from the new residents, as well.)

Posted by Dan on Apr. 24, 2013 @ 10:17 pm