Make Room for Dot-Coms

Forget about live-work lofts. The newest fight for San Francisco's soul is over multimedia office space.

Katz's staff drafted an amendment that would add a "new media" category to the Finance and Labor bill, proposing a $6.08 per square foot housing fee, rather than the $7.05 paid by office developers. The fee difference is a sidebar to the greater issue of whether to apply Proposition M's space limits to the S.F. digital boom.

The proceedings were mundane, yet of dramatic portent: If the amendment -- or some permutation -- succeeds, the digital boom will continue apace. If it doesn't, S.F. commercial rents will continue spiraling. Some of the new, cash-rich multimedia firms will supplant law firms, mining company offices, nonprofit organizations. Others will relocate to Oakland, Emeryville, Austin, Toronto.

At the hearing, Ammiano went on record as opposing the new category, for now, according to a news report. He asked the City Attorney's Office to prepare a report on how much more the city could earn for affordable housing if digital lofts were categorized as offices.

Paul Trapani
Developer Brian Bock inside the former George W. Caswell Coffee & Tea Co., once slated for live-work conversion, which will now become home to Critical Path Inc.
Chris Anderson
Developer Brian Bock inside the former George W. Caswell Coffee & Tea Co., once slated for live-work conversion, which will now become home to Critical Path Inc.

During an interview, Ammiano scoffed at Katz's legislation as a political gambit designed to propel Katz in her planned run for supervisor in the new district to be created for the SOMA/Multimedia Gulch area.

"As I understand it, when Prop. M was conceived, it was supposed to be in concert not only with the demand for office space, but building more affordable housing for the work force, and considering the transit implications. And as we know, we don't have enough housing today, and we also have problems with Muni and transit," Ammiano says. "So asking for increased office space is totally out of whack with the intention of doing something not in a vacuum, and that's what this would be. We don't have the housing, we don't have the transit part of the equation, so there's a total imbalance. The other thing is that a lot of where they want this office space and where they're currently building a lot of this office space abuts RH2 [duplex residential] zoning. This is an issue for Potrero Hill. Given that background, I'm not supportive of this at all. It smacks of favoritism, and it is kind of exposing this supposed dedication of the supervisors to finding solutions to affordable housing -- it kind of undercuts that, not to mention the transit-first policy."

Katz's amendment was sent to the Planning Commission for further consideration. The bill to broaden the Proposition M developers' fee beyond office space will go to the full Board of Supervisors.

So a new battle has begun in San Francisco's generation-old equivalent of a religious struggle.

For their part, real estate developers and digital media executives have been scurrying behind the scenes preparing for political conflagration. They have set up a lobbying group that includes companies with names such as USWeb, Apollo Media, and Bidcom. And the Don Fisher-funded business group San Francisco Tomorrow has made advocating on behalf of digital media office space a top priority.

"Our position is balanced growth in areas of the city that have been neglected," says Jim Gonzalez, the ex-S.F. supervisor the tech group has hired as its lobbyist.

As the battle is joined, Ammiano has all but sworn to defend the progressive territory. Hestor, she of the didactic tone and the now-empty bowl of cassoulet maison, frames the cause in the terms of San Francisco Progressive Economics 1-A.

"This is complicated, and I try to simplify it down for people," she says. "The other way that I have to talk about it is that it's human values. This city has traditionally been economically and racially diverse." Multimedia development will lead to less diversity, Hestor says. "My brother does auto-body work. I'm from a family of electricians and farmers and a lot of miners. I have mining on both sides. I think of the people whom I work with, who are dressmakers, a guy who comes and fixes garage door openers. We like to be able to say, 'You are important to the city and you don't have to be a computer whiz putting together Web sites, or a financier, or moving around paper, and you don't have to be primarily white.'"

Corporations against activists; developers against public-interest attorneys; populist politicians against their opportunist-seeming enemies: In any other place, at any other time, this would seem a simple battle of good vs. evil; of everyman vs. insensitive corporations; of profits vs. the commonweal.

But it's not, really. This is San Francisco in the year 2000, where politics are never what they seem, where right is left, left is right, and the canons of each camp celebrate a rich pageant of incompatible conceits.

For one, San Francisco Economics 1-A simply doesn't function in the real world. Hestor's idea of economic diversification -- San Francisco city fathers must act to protect restaurant supply stores, steel-door manufacturers, elevator repairmen, and the like -- seems to ignore notions such as the price mechanism, division of labor, and supply and demand.

In the real world, Financial District lawyers needing nearby Xerox technicians pay high fees, so repair shops can locate on Van Ness Avenue. Restaurants needing cups in a hurry typically pay extra for them -- perhaps enough for a cup-seller or two to stay in the city. The patient ones await shipments from their Hayward distributors.

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