Does tax-break promoter have a conflict of interest?

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Randy Shaw testifying in favor of the tax exclusion zone on March 16.
Luke Thomas

In last week's Guardian, my investigation of the Twitter/Mid-Market tax exclusion zone showed that Tenderloin Housing Clinic director Randy Shaw played a central role in creating the district and policy that would cost city taxpayers about $22 million in lost payroll taxes (which officials hope to recoup in economic stimulation to the area).

Now, my continuing investigation reveals that THC business partner Paul Boschetti owns a hotel that was specifically targeted for the tax breaks, raising conflict of interest issues that city officials never asked Shaw about.

The legislation is sponsored by Sup. Jane Kim, whose supervisorial campaign was vociferously supported by Shaw and the BeyondChron blog he operates out of THC offices, and David Chiu, the board president and mayoral candidate. The proposal is scheduled for a vote by the Board's Budget and Finance Subcommittee tomorrow (Wed/23) at 10 a.m. in board chambers.

THC operates low-income rental housing in the Tenderloin and beyond on a city contract, receiving $15.7 million in government support in 2009 and recently being awarded a five-year city contract worth $82 million. Boschetti – a real estate investor who owns the Aida Hotel on Market and has owned the hotels Verona and Burbank in the Tenderloin and other commercial properties around town – owned the 126 Hyde building that is THC's headquarters.

In 2009, Boschetti and THC became co-owners of the building, with the documentary transfer tax indicating the sale was for just $150,000, which is very low for a large commercial office building. Officials with the Assessor/Recorder's Office say they are still in negotiations with the property owners to determine what the building is really worth.

So what exactly is going on here? Could this relationship – and perhaps others that Shaw has developed with property owners who would directly benefit from the tax exclusion – be why Shaw has so aggressively expanded and pushed this district? And why have public officials so blindly followed the lead of a private power broker whose clout was built with public funding?

Over the last week, I've asked Shaw several times by e-mail whether he has any personal economic interests in the tax exclusion zone, and he ignored the question each time – even as he vociferously denied making threats to labor union officials who are opposing the plan. When I finally discovered the Boschetti documents in a public records search and asked him about it, Shaw wrote, “We own our headquarters at 126 Hyde with Paul Boschetti. We have no other business dealings or investments with him, and our entire space is used by THC. We moved into this space in 1986 and have occupied the entire building since 1991.” When I repeated my questions about whether he has any economic interests in the district, he responded “only 126 Hyde.”

Now that we've learned more about this transaction, Boschetti's other property holdings, and a relationship between the two men that dates back for 25 years, we've forwarded Shaw a list of detailed questions. We've also placed calls with Boschetti and various city officials involved with the deal, all of whom have yet to call back, and we'll let you know what we learn as our investigation continues over the coming days.

Comments

He really seems to have come unhinged.

Posted by Guest on Mar. 22, 2011 @ 7:17 pm

This author seems to have come unhinged. One fact couched in conspiracy theories does not make an article.

Posted by Guest on Mar. 22, 2011 @ 8:05 pm

I do not think that term means what you think it means.

The facts indicate that Randy Shaw really does have a financial stake in the property values of the Tenderloin. It seems absurd to argue that fact. There really is a conflict of interest.

Posted by Librul on Mar. 23, 2011 @ 8:56 pm

But my suspicions aren't grounds for creating a series of articles which say basically nothing.

But you know what's the funniest thing about Steven's obsession with Randy Shaw? This accusation: "And why have public officials so blindly followed the lead of a private power broker whose clout was built with public funding?"

Good question Steven. Why don't you pose the same question in regards to Gabriel Haaland or the various leaders of Non Profit Inc?

Posted by Lucretia Snapples on Mar. 22, 2011 @ 8:50 pm

Boschetti?

Heard about the tie around 5 years back and Shaw denied he had ANY partnerships with the guy. Clearly, he was lying.

The worst thing about the entire situation is that Shaw's buildings are the worst run in the City. He's had to go to court for restraining orders against gang bangers he hired for management at one of his places in the Mission. He's destroyed the Seneca Hotel which used to be a humble but clean and safe working stiff's SRO and in the last 6 months recorded 464 police visits.

Recently Randy's THC was awarded another long-term management contract of a building where he'll house junkies, drunks and the insane. Who will go hang out on Market Street to hook up with the added dealers who BART in from Richmond and Oakland. Every contract awarded to Shaw makes the Tenderloin and SOMA less safe.

It doesn't matter how many billionaires you get to move their work forces into Mid-Market to take advantage of great buildings in a wonderful location at cheap rents. Nope, these yuppies will only put up with slipping and sliding on human shit and being mugged by addicts ... they'll only put up with it for so long.

I've been in the Tenderloin for all 30 years that Shaw's been building his empire. Because of Randy Shaw, the neighborhood is far filthier and more dangerous than it has ever been.

Go Giants!

h.

Posted by Guest h. brown on Mar. 22, 2011 @ 9:37 pm

You do have a strange obsession with this Randy Shaw fellow. I'm pretty sure there is no conspiracy afoot.

Can't we move on to more pressing issues? The tax break is worth what--$20 million over the term of the deal? And face it--it probably keeps jobs from leaving, and probably nets-out cash flow positive for the City in the long run if it keeps Twitter from fleeing to Brisbane.

The debates about pension/benefit reform are much more important to the City's finances. City payments to the pension fund are hundreds of millions a year and escalating. The unfunded pension liability is in the billions. The unfunded healthcare liability is nearly $5 billion. The SFBG has provided no worthwhile commentary on the pension/benefit issue. (Aside from some random article a couple weeks ago in which Tim Redmond said pensions were employees' deferred compensation.) Pension/benefit issues are the most important ones facing the City, and the SFBG has decided to become the irrelevant publication in this town regarding such issues. Your publication should change it's name to "The Ostrich" if you're going to ignore the pension/benefit problems that are sucking the money away from all the programs that progressives are supposed to support.

Posted by The Commish on Mar. 22, 2011 @ 9:43 pm

to the city deficit.

Tax the rich!

Posted by TheDoc on Mar. 23, 2011 @ 6:56 am

Michael, now you're in bed with and excusifying for the City's top poverty pimp, and you expect this parroting of GOP economics to benefit you in your race for D5 supervisor next year how exactly?

-marc

Posted by marcos on Mar. 23, 2011 @ 10:49 am

you seem convinced The Commish is named Michael. You've posted that at least twice. My name is not Michael. I promise. I even pinky promise. And I don't live in, nor am I running for D5 Supervisor.

Posted by The Commish on Mar. 23, 2011 @ 11:08 am

He obviously thinks there's a dollar to be had somewhere in all of this, more than he is making off being a middle man between the city and our out of town TL burn outs?

And he made threats towards union leadership? How much no one cares?

Posted by matlock on Mar. 23, 2011 @ 12:49 am

There is a conspiracy, you know that, oh wait, there is some one at the door........

I just peeked through the peep hole and Randy Shaw is out side, what am I going to do? Comrades, if you do not hear from me again, always remember!!!!!!!

Posted by Patrick Brown on Mar. 23, 2011 @ 9:15 am

As a former THC Board member, I agree with Steve! I am happy to have severed all ties with THC!!!!

Randy fired me as I was composing my letter of resignation!!

Posted by Terrrie Frye on Mar. 23, 2011 @ 12:59 pm

Patrick,

If there is someone knocking down your door to rob you in the Tenderloin then you can rest assured it's one of Randy's tenants. He's collected hundreds of millions from the City to establish and extend a business plan that depends upon subsidized rents paid directly to him ... to house junkies, crazies and drunks.

go Giants!

h.

Posted by Guest h. brown on Mar. 23, 2011 @ 1:22 pm

Are you Aunt Mary's son?

Posted by Patrick Brown on Mar. 23, 2011 @ 4:48 pm

Patrick,

The 'Brown' in my name is cause my dad was a bastard and she gave him the name of the second guy she married years after he was born. My family is Scots Irish/German/Jewish (Gamble/Gamel/Nettles/Clemens). Doubt we're closely related but the math folks say no one is further away than 13th cousin.

play nice with the other kids, cuz,

h.

Posted by Guest h. brown on Mar. 23, 2011 @ 5:55 pm

I want to show you just how ironic this is about the liquor stores and Randy Shaw

http://www.bluoz.com/blog/index.php?/archives/1408-Randy-Shaw-Crime-Crus...

Posted by Guest on Mar. 01, 2012 @ 7:50 am