Make Room for Dot-Coms

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

Brian Bock bounds up a makeshift stairway in a former warehouse at 530 Folsom St., past yards of sandblasted brick, a gallery of as-yet-unglazed windows, and a forest of rustic, steel-reinforced wood pillars.

"This was one loft in the original plan," says Bock, a tall, neatly groomed developer sporting the breezy authority customary among the strivers populating this part of town. "You'd have entered right here," he says, directing attention to a brick, steel, and pine expanse about the size and shape of five joined bowling lanes. Dressed out a certain way, the space would have contained an unconfined kitchen, sleeping area, living room, work space, and bathroom. "This would have been your loft space, with the mezzanine right here," Bock explains, in a near-wistful tone.

Instead, this former warehouse for the George W. Caswell Coffee & Tea Co. will soon become the corporate home for Critical Path Inc., which makes e-mail systems for businesses. Airy desk pods will replace spacious kitchenettes. Industrial-chic conference rooms will rise from floors once designated as living-room-slash-sleeping-areas.

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.
Jim Gonzalez, hired by dot-com companies and their real estate developer allies to lobby for increased digital media space.
Jim Gonzalez, hired by dot-com companies and their real estate developer allies to lobby for increased digital media space.
Sue Hestor, the live-work loft foe who has now turned her sights on curbing multimedia offices.
Sue Hestor, the live-work loft foe who has now turned her sights on curbing multimedia offices.

Bock has recently abandoned plans for this and two other South of Market live-work warehouse conversions, and is now dressing out the same buildings as commercial properties. It is no coincidence that, within just the past few months, commercial space has come to demand $4 per square foot per month, while residential space fetches $2.50 per month, Bock says.

"It's kind of a no-brainer to say, 'Forget the live-work or residential because I'm getting 50 percent or more on commercial,'" says Bock. "I wouldn't consider live-work anymore. The economics aren't there."

This seemingly subtle shift in the business plan of a minor builder actually portends a social, economic, and political temblor for San Francisco.

The city's live-work loft boom -- perhaps the most polarizing political issue of the past three years -- is receding with a whimper, not the bang neighborhood activists had hoped for. Market forces, not political struggle, are quietly erasing the economic logic of live-work buildings.

In the lofts' place is rising a bidding frenzy for high-tech office space. The Midas-rich venture capitalists, sleepless entrepreneurs, and trendy-hipster-brainy kids who populate the new digital-network industries have decided among themselves that San Francisco, and especially San Francisco's old, southeastern industrial region, is the only place to be.

During the past few months, rents for multimedia commercial space have shot past those that builders are able to charge for live-work lofts. Bock, and developers like him, have halted live-work projects midway, throwing out expensive architectural plans, abandoning hard-won live-work building permits, and steering their business plans toward the dot-com boom. This fact, and the economic and social reverberations it will create, shall be the subject of City Hall, courtroom, and neighborhood struggles to come.

The city's old-line anti-growth agitators -- who shaped progressive politics during the 1970s, '80s, and '90s -- are trying to catch up as they see the slow-growth battleground shift under them, from live-work lofts to multimedia office space. Some of these players are already laying plans to curb the development of multimedia space in the South of Market, Potrero, and Mission areas. They are erecting battlements along the same lines as the live-work struggles before, arguing that these new commercial developments will supplant light industry and drive out blue-collar jobs. The dot-com buildings worsen already awful traffic congestion, and aggravate an unsupportable demand for housing, these activists say. The glut will make San Francisco whiter, richer, less diverse, and less politically aware -- another Boise-style West Tech boomtown. And as San Francisco grows as a Web colony, the Left Coast City of legend will fade into virtual reality, according to this worldview.

"The priority should be to provide enough housing rather than enough commercial space," says Supervisor Tom Ammiano, warming to the cause.

"I don't want to have a situation where the only people who are valued are overeducated, financially ambitious office workers," adds Sue Hestor, a longtime anti-growth agitator and an author of a pivotal anti-growth measure passed by the voters in 1986.

The measure, referred to reverentially in progressive circles as Proposition M, was drafted as the most restrictive anti-growth legislation in the country 14 years ago. But, just as in the case of the live-work lofts, market forces made these no-growth provisions all but irrelevant as the S&L crisis, a California real estate recession, and high Financial District vacancy rates accomplished overnight a task that took anti-growth activists most of the 1970s and '80s.

Indeed, the growth-limiting provisions of Proposition M are only becoming relevant this year, as the city for the first time in a decade has more new office space under review than it can legally approve. And not just a little more. The San Francisco Planning Department now has requests from developers for new office construction that, taken together, would add more than a million square feet beyond what is allowed under Proposition M.

Growth-friendly politicians, multimedia lobbyists, and developers, meanwhile, are drafting legislation seeking to circumvent these growth-control laws by creating a new zoning category for digital media space. Under this scheme, high-tech lofts would not be counted as office space, and thereby not fall under yearly office-tower construction limits instituted by Proposition M.

This is a clean, compact industry offering thousands of jobs, including positions for entry-level workers, highly paid professionals, and everything in between. The industry promises millions of dollars of tax revenues, and will inject many billions of dollars into the city's overall economy, the pro-growth advocates note.

But it is in more lofty terms that San Francisco's future will actually be debated -- literally lofty: Should a former industrial loft that is now filled with cubicles and computers and receptionists and systems administrators be called an office? This civic discussion has just begun at the San Francisco Board of Supervisors. Implicit in this discussion -- which is now taking place at City Hall, at the Planning Department, in corporate boardrooms, and in neighborhood activists' living rooms -- is whether San Francisco should grow, or try to congeal itself into the 1970s. While seemingly architectural in nature, this debate really asks whether city planning should first seek to accommodate people, or cars; whether the city should welcome new jobs; whether the city should understand and plan around market forces, or ignore, and then decry, them.

It's a debate that's raged in San Francisco for 30 years. The vocabulary shifts from decade to decade, but the premise never does: Should we seek to accommodate newcomers, or exclude them?

Sue Hestor, she of the sturdy, college-discus-thrower bearing, the rat-a-tat Nebraska auctioneer delivery, and the overweening confidence of someone who's had her way with the San Francisco alternative press for 20 years, tucks into a bowl of duck, sausage, and white bean cassoulet maison, at a French jazz bistro near her downtown law office.

Between spoonfuls, she describes her role in modern San Francisco political history (it's central). She explains the personal formation and ethical compass of San Francisco developers (they're vile). And, in great detail, she lays out the way raw-material inputs, industrial planning, and civic zoning combine to foment economic growth and stability in western cities (at least, Sue Hestor's version).

"We have a resilient economy because we have a wide base for our economy," she says. "San Francisco has a huge base of people who provide services to its residents. Suburban models are often monocultures. Services need to be provided here. It's the civilized way of dealing with your residents. If restaurant-supply companies have to go to Contra Costa County, restaurants are going to have problems. Everything on this dining table came from somewhere, and I can pretty much tell you where to buy everything. You have to ask, 'What are the parts of the economy that make the economy work?' For example, shuttle bus services. Buses that have to park in Hayward are going to cost a lot more. Or specialized audiovisual equipment. Those kinds of facilities are necessary for the convention industry to function. The extent to which it is more expensive for the convention industry, it adds to the cost of doing business. So it's all about how San Francisco fits these components into its economy."

Hestor is an attorney who makes her living suing developers and commercial landlords on behalf of tenants, or on her own behalf. She earns part of her income indirectly from settlements with developers, who calculate that bargaining with Hestor is cheaper than allowing projects to languish in court and Planning Commission hearings. For the past two decades, she has been present at every sort of City Hall development meeting, working tirelessly to beat back commercial and housing projects. She drafted Proposition M, still a guiding template for commercial real estate development in San Francisco. For the past three years Hestor has sounded the clarion against live-work lofts. Now she's in court and at City Hall fighting multimedia office space.

"What the Internet economy is, it's called a Ponzi scheme. Do you know what that is?" Hestor asks, helpfully. "Everyone wants to be a billionaire, but not everybody is going to strike it rich. I don't see myself being able to say, 'Take out entire square miles and let owners of Internet businesses decide the future of our city.'"

Despite Hestor's self-assurance, the statements she makes about San Francisco politics are interesting not because she is a political leader, per se -- it's hard to tell where her role as City Hall ringmistress ends and her own notions of personal grandeur begin. Rather, she's interesting and important because her political sensibilities and personal experience swim at the vortex of San Francisco's peculiar brand of progressivism. And this ideology, and how our leaders respond to it, will reverberate into the future of San Francisco's Internet economy.

Hestor's ideas about growth and development might not be the best road map for predicting the effects city planning decisions will have on the lives of ordinary citizens. But they're ideas shared by many San Franciscans.

And while Hestor's economic theory may be nothing more than a garbled version of five-year-plan Sovietism, half-asleep-in-high-school-economics-class-ism, and wistful, good-ole-days nostalgic romanticism, for an important portion of the citizenry here, it's San Francisco Economics 1-A. Politicians, planners, entrepreneurs, and pundits ignore it at their peril.

While seemingly ad hoc, this uniquely San Franciscan ideological stew wasn't just bought off the shelf. It's a group of sensibilities that have simmered through decades of political battles and myriad economic, demographic, and social changes. This ideology doesn't limit itself to real estate development -- racial diversity, poverty, homelessness, the environment, middle-class quality of life, and other issues are all part of the mix. But anti-growth real estate battles were the cooker in which this olio of ideas became fully formed.

While leftist, it is a staunchly conservative ethic with roots in the sense of shock some residents felt during the '50s and '60s when they saw their city gradually cease finding sustenance as a postwar shipping and manufacturing center.

Then, San Francisco was a low-rise, blue-collar city with shipping, manufacturing, and distribution industries as its growth engines. Over time, shipping moved across the bay to Oakland. Distribution warehouses and other space-intensive businesses moved toward the greater urban area's periphery as land here became more dear. The city's economy shifted toward service industries -- tourism and financial services such as banks, accounting firms, and consulting firms. Within 20 years, the city work force went from being largely blue collar to more white collar. Once mostly white, San Francisco became a much more ethnically diverse place during the period. By the 1980s, half of the workers commuted from elsewhere. Residents also saw the city's physical appearance change dramatically, as service-oriented economic growth led to a high-rise office construction boom. San Francisco's skyline stretched upward and downtown expanded. More and more frequently, the term "Manhattanization" drifted through San Francisco coffee conversations.

This grumbling eventually became focused enough to channel into anti-growth ballot initiative campaigns. The first, called Proposition T, was largely concerned with protecting the views of selected property owners, and would have limited building height limits to six stories. It was defeated. In 1979 slow-growth forces regrouped and drafted Proposition O. Backers were led by white, middle-class professionals whose arguments echoed those of today's anti-growth activists: Downtown high-rise growth was responsible for rising housing prices and worsening traffic congestion, they said. The measure would have limited the height and bulk of downtown buildings, but not as severely as its predecessor. Proposition O, too, was defeated. But with its 45 percent share of the vote it was a harbinger.

In 1983, a coalition of low-income and minority groups, social activists, and members of what was coming to be called the San Francisco progressive movement drafted the first version of Proposition M. They argued that downtown development was marginalizing minorities and disenfranchising the poor; driving up housing prices; and focusing economic activity in areas that employed only highly educated, well-paid professionals. This measure required downtown developers to contribute fees for transit improvements and job training. While the measure included no specific growth restrictions, its proponents believed the fees would be steep enough to put the brakes on high-rise development.

Startled by the growing sophistication of slow-growth activists, the city's Planning Department drafted a downtown zoning plan that specifically limited the total amount of office space to be built each year. The plan was credited with helping defeat the first version of Proposition M. But it didn't do much to blunt the message of the anti-growth campaign: Economic development was key to the city's problems, not their solution.

During the next three years the slow-growth forces continued to build on the coalition of poor, black, environmentalist, neighborhood activist, and white liberal voters. And in 1986, the second Proposition M put a temporary moratorium on development and subsequently froze the amount of new office space to be built at 950,000 square feet per year. Neighborhood preservation, the preservation of blue-collar jobs, and the mitigation of traffic problems were key factors to be considered in the approval of projects. The measure included bulk limitations, new zoning regulations, and shadow bans. The black-owned San Francisco Sun-Reporter, the Bay View Democratic Club, and a host of black ministers all backed the measure. Meanwhile, members of the San Francisco business community -- some of whom stood to gain handsomely if growth controls succeeded in driving up commercial rents -- contributed modestly to a lighthearted opposition campaign. The measure won -- barely -- by 5,311 votes.

For city politics, the measure's victory went beyond merely limiting construction in the Financial District. The slow-growth coalition formed during these campaigns was credited with aiding in the victory of liberal Mayor Art Agnos.

"The election of Art Agnos was a progressive victory," writes Richard DeLeon in Left Coast City, a 1992 book that describes the Proposition M campaign as the Bunker Hill of S.F. progressivism. This movement's basic tenets, which were subsequently applied to all sorts of political struggles, never veered far from principles described in Proposition M pamphlets: fight Manhattanization, empower communities, guard against predatory investors and their allies.

While Proposition M had tumultuous political effects, it actually had almost no significance limiting downtown development and growth. Not long after the measure passed, the aftershocks of the nationwide savings-and-loan crisis rattled San Francisco. Downtown banks laid off workers. The demand for office space shrank dramatically. By 1990, no fewer than seven already approved office tower projects languished for lack of financing.

The empty lots holding half-abandoned construction projects served more as a monument to market forces than to the progressives' newfound clout.

Just as market forces pre-empted San Francisco progressives' battles past, they are now defining struggles to come: The sudden growth of the Internet economy has injected a new sense of urgency into the ongoing anti-growth struggle.

Multimedia Gulch, the 10-block area of converted warehouses packed with digital technology companies, is bursting. A 1998 report by the San Francisco Redevelopment Agency said the cyberhood clustered around South Park had created about 35,000 jobs and was generating revenue in excess of $2 billion annually. And that was before the boom. Two years later, massive unmet demand for digital media office space has allowed downtown and SOMA landlords to double rents for firms renewing their office leases.

"I suggested we move to Colma," quipped one Financial District lawyer whose firm recently received a hefty rent-hike notice.

Now, though current figures aren't available, anecdotes suggest there are more than 1,000 businesses in the SOMA/Multimedia Gulch area, with hundreds more spilling out into Potrero and the Mission.

The crunch can only get worse as Proposition M limits the amount of available office space. Because of an office construction slump during most of the 1990s, the Planning Department has saved up 3.5 million square feet of office-space permits -- which can lay over from year to year under Proposition M. But with 4.5 million feet in proposed development, and millions more sure to come soon, the once-inert Proposition M is morphing into a giant killer.

The real scope of this impending office bottleneck is also disguised by the fact that city zoning officials have, up to now, had a difficult time classifying exactly what it is multimedia companies do.

The city Planning Department so far has dealt with the steady stream of industrial-to-office-loft conversions going on in the South of Market, Potrero, and Mission districts on a case-by-case basis, in many instances classifying these new companies as a form of light industry, or business service, and therefore not falling under the strictures of Proposition M.

"Business service is in a category allowed in industrial districts, and doesn't require the off-street parking retail requires. It also doesn't fall into the category of the city's concerns about office space limits," says Bob Passmore, who last year retired as the city's zoning administrator. "For a period of time, that wasn't a concern," Passmore says, because there weren't enough large office projects proposed to cause Proposition M's growth limits to kick in.

As a guide to whether computer-oriented businesses were classified as office space falling under Proposition M growth limits, or industrial space, which is unfettered under the law, Passmore referred to the industries that computers, software, and networks have replaced. "If multimedia is turning out software, that's manufacturing. If it's editorial, it may be the same as printing. If it's keeping track of insurance accounts, that's office," he says.

But as computers, software, networks, the Internet, and their associated hardware continued to fill in old industrial niches, modern industrial niches, and heretofore unimagined industrial niches, this system became increasingly subjective. As land developers and Internet entrepreneurs saw the Proposition M limits looming, they realized that these types of spurious determinations could mean life or death to start-up business plans -- many of which included a Multimedia Gulch location as crucial to their strategy.

With this in mind, Supervisor Leslie Katz is advocating legislation that would create a special zoning category for multimedia companies.

"The industry's profile doesn't fit into any of the categories that exist today. We find that their particular profile meets the light industrial, some meets office use. By trying to carve out a new definition that will more precisely cover that industry, as opposed to now, as each developer comes before the Planning Commission, it slows down the process and creates backlog for Planning Commission," says Julian Low, an aide to Katz.

To San Francisco progressives it's not that simple. If the 1970s and '80s anti-growth movement was the progressive movement's Six Day War, Proposition M is its Golan Heights.

Already, a front-page piece in this month's New Mission News decries a planned office project at 20th and Bryant streets. "We are rapidly loosing [sic] the battle to maintain our affordable rental housing stock for the people who cannot compete with the cash-ready DOT.COMies," the article says.

And the progressive movement's new leader, failed mayoral candidate and Board of Supervisors President Tom Ammiano, isn't convinced his troops will yield Proposition M without a struggle.

"I think Prop. M was very hard won and still has a resonance," Ammiano says during an interview.

The first shots of this new battle rang out last week, before anybody expected.

Katz had been planning to introduce a separate piece of legislation later this month creating a new "multimedia loft" category, complete with specific fees developers would pay into Proposition M transit and housing funds. Because the new category would be described as quasi-industrial, any development slated for computer-related businesses could, theoretically, quietly slip outside the 1980s growth limits.

But a seemingly unrelated hearing at the Board of Supervisors last week forced Katz and her allies to fire the first shot in the growth wars to come.

Last week, legislation appeared before the Board of Supervisors Finance and Labor Committee that would add hotel and retail developments to those subject to the $7.05 per square foot Proposition M fee office buildings must pay into a city affordable housing fund. Under the proposed law, hotels would pay $4.25, retail $5.29.

While on its face irrelevant to the fate of digital media in San Francisco, business lobbying groups like San Francisco Tomorrow feared that by setting in stone a new schedule of Proposition M commercial space categories -- while not specifically including a new category for digital media -- the hotel and retail bill could have the corollary effect of condemning dot-com developers to working under the feared "office" zoning category. During coming years, proposed buildings wearing this scarlet "O" would have to compete with millions of square feet of planned development wishing to squeeze into the Prop. M limits.

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.

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.

"It's just the most elemental division of labor in the world," says economist Kent Sims. "One-third of the petroleum in California is refined in Contra Costa County, not one drop is refined in San Francisco and we're just fine. Containerized ships don't come here either. We don't suffer."

As for the idea that limiting the amount of available high-tech office space will somehow preserve low- to middle-income jobs in the city, the progressive rhetoric opposing 1970 bank towers doesn't apply very well to digital media industrial lofts. In the 1970s progressives were correct to notice growing economic stratification that accompanied expanding financial service and tourism industries. "We went through a period when the middle class moved out of San Francisco," says Sims. "The ones that stayed were either at the bottom of the income scale, or were highly paid professionals and managers."

But times have changed. Multimedia isn't banking, and it's not hotels. Notwithstanding all the buzz about dot-com millionaires, multimedia yuppie brainiacs, and latte-sipping live-work scum, there are far more 9-to-5 Joes and Janes working in the Internet industry than stock-option millionaires.

"One thing that digital media has done is it has drawn a great number of middle-income people back into San Francisco," Sims says. "The majority of them are people who earn good middle-class salaries."

According to one survey, half the Web designers in the city have no college degree. Their average salary is between $50,000 and $70,000, barely enough to rent a one-bedroom apartment. Surfing the help-wanted pages of San Francisco-based Web enterprises produces dozens of medium-skill-level jobs paying in the $30,000 range. And anyone who lives in San Francisco has friends who finally managed to get out of their crummy old jobs for Web careers -- or for non-Web jobs someone else vacated for Web-related work.

Just ask former waitress Sarah Gersbach, now working at Gap Online. Or former Tibetan refugee Pema Chogkhan, who now teaches HTML programming to other Tibetans for Tibet Online. Or Gene Bishop, a former window washer who designs Web pages for Luis Vuitton's site.

In this light, driving multimedia companies from San Francisco could well have exactly the opposite effect from the one the progressives seek. By curbing the development of digital media office space, low- to medium-skilled workers would have less opportunity to obtain well-paying jobs.

If the S.F. progressive coalition reunites to prevent large amounts of new office space from being built, bidding for limited space will cause commercial rents to continue upward without limit. Nonprofit organizations, which are just now beginning to pack their bags in the face of dearer lease renewals, will be pushed from their buildings en masse, like deer from a forest fire. San Francisco will cease being western America's nonprofit Jerusalem. And the city will lose some of its uniquely altruistic character. Arts organizations, already facing similar difficulties, will likewise stare into an abyss.

If anti-growth advocates seek to accommodate San Francisco's growing South of Market traffic congestion by curbing the amount of space available for workers -- rather than curbing parking spaces, and thereby eliminating workers' cars -- this city will become, like the concrete urban expanse surrounding it, incrementally more similar to drive-by L.A.

Were activists to succeed in halting Web-oriented office development in the name of blue-collar industrial preservation, they could cause a net loss of thousands of low- and middle-income jobs. They could potentially deny opportunity to young people just entering the job market, or others who've spent lifetimes working lousy jobs.

If, in their zeal to preserve the "character of the city," progressive activists force dot-com businesses to spread around the Bay Area into loosely spaced office-park-style environs, rather than the tightly packed, converted-warehouse-and-high-rise development befitting an urban core, the result will be anything but progressive. The unimpeded march of urban sprawl will make collective transit increasingly unfeasible, the creation of diverse urban communities ever less practical, and Californians' massive -- and decidedly illiberal -- levels of energy consumption all but irreversible.

Just as the 1980s and '90s California recession nullified the anti-growth provisions of Proposition M, and just as the digital media boom has made the anti-live-work struggle all but moot, market forces will help define San Francisco's future. It is only by truly understanding those forces that San Franciscans will be able to fend off their most pernicious effects, and accommodate their benefits.

It's a real-world process in which some old businesses leave, new ones appear, and San Francisco remains a changing, vibrant, unpredictable city, as it has for 150 years. It's a fact of urban life advocates on both sides of the digital media office debate would do well to understand -- that cities are organic, they change all around you, whether you're pro-growth, slow-growth, or a battle-hardened San Francisco progressive.

Take the case of Riviera Beauty Supply, opened by a longtime resident named Guy Cherney during the late 1970s. At first, he merely wanted to get rid of some stock left over when an Ellis Street beauty college closed.

"The old business had some inventory, so they started selling it. Then it was like, 'Hey, why don't we keep selling stuff?'" recalls Gary Champagne, who worked at Riviera during the 1980s. "It was linoleum floors, cases stacked on the floor, that sort of thing."

Later, Cherney died, and his wife took over. She ran Riviera a few years, then sold it to someone else in the beauty business, who ran it for a while, then closed it five years ago. An Indian gift shop occupied the space for a short time.

Recently, the restaurant next door, Les Joulins, also across the street from Sue Hestor's law office, expanded into the old Riviera space.

"We had a lot of tourists come over here at night. After their meals, they like to look at some jazz," says owner Osman Uner. "I said, 'I should start that myself.' We've been very happy."

Having swallowed the space once occupied by the working-class beauty supply store, Les Joulins now includes a bar, a dinner restaurant, and a cafe. House specialties include bouillabaisse and cassoulet maison, Hestor's favorite.

"I come for lunch all the time," Hestor says. "Isn't it nice?"

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