The odd twist to the Chron's Chiu endorsement


The most obvious interpretation of the San Francisco Chronicle's endorsement of David Chiu is that the Chron thinks Chiu has completely left the progressive camp and is now aligned with the political wing the daily paper calls "moderates:"

What is impressive about Chiu is that "change" and "jobs" are not just campaign slogans for him. He can go into detail about the redundancies and red tape at City Hall that are holding back economic development: the 15 departments that regulate the private sector, the hundreds of fees that burden businesses big and small, a payroll tax that is a disincentive to hire ... If elected, he would have a mandate to make city government more efficient and effective.

(I don't know how many times I have to say this, but the payroll tax is NOT a disincentive to hire.)

The Chron -- which, on economic issues like taxes and development, is a very conservative paper -- clearly thinks Chiu can be trusted, which ought to make progressives nervous.

But here's the other interesting twist.

Hearst Corporation bought the San Francisco Chronicle in 2000, at the top of the market, for more than $500 million. I guarantee the paper isn't worth more than a tiny fraction of that today. It's still losing money, and has been for years, and nobody's buying daily newspapers any more, and if Hearst wanted to unload the Chron, the New York publishing chain would be lucky to get $50 million. Hell, they'd be lucky to get $25 million.

So the bean counters in New York have this nonperforming half-billion-dollar asset on their balance sheets, and there's no way to recover that money -- except for one thing: The Chron owns a bunch of land around Fifth and Mission, including its own historic building. And that property is potentially worth a whole lot of money. When the economy picks up, Hearst can develop the parking lots, old press facilities and even its HQ; turn it all into condos and office space, and suddenly there's a real chance of recouping some of those deep losses.

The process is already underway -- the Chron's been moving tech firms into vacant space in its building, and is working with developers on the shape of what could be a major project still to come.

And guess what? In June, William Randolph Hearst III -- heir to part of the Hearst fortune and a member of the Hearst Corp. board -- made a rare campaign contribution to a San Francisco political candidate. He gave the maximum allowable $500 to ... David Chiu. Around the same time, Michael Cohen and Jesse Blout, the partners in a firm called Strada that's working on the redevelopment of the Chron's property, also gave Chiu the maxiumum $500.

I figured the top people at the Chron would back Ed Lee because they figured he'd be down with whatever they wanted to do with that land -- particularly since Lee's good buddy Willie Brown is now a San Francisco Chronicle columnist. But it appears they've cast their lot with Chiu. As Mr. Spock would say, fascinating.