Pin It

Griftin' on the Dock of the Bay 

How waterfront developer Carl Ernst fished for political influence to help his struggling Pier 38 project

Wednesday, Nov 20 2002
Carl Ernst Jr. is a man of great height and girth. At first, he seems to be a gentle giant, intelligent and slightly self-mocking. But behind the twinkle in his eyes lie wells of bitterness. In March, Ernst talked for an hour inside a cabin cruiser tethered to the rotting pier he leases from the city of San Francisco. The boat rocked as Ernst shifted his weight from side to side, trying to explain why a fellow with what amounts to a lifetime lease at low rent on a valuable waterfront property can't make the damn place spin off any real money. Ernst complained that what stood in his way was city officials waiting to be bought off before they would help him. To dramatize the point, he pirouetted and held out his hand, palm up, in the universal gesture for baksheesh, some grease, a touch of the green, baby.

Ernst said he does not play that game, which is, of course, illegal. He said he came by his city lease, and nearly $3 million in financial backing from the state of California, purely on the basis of professional merit. For the last seven years, he has dreamed of remodeling Pier 38, just north of Pac Bell Park, as a recreational marina and restaurant complex. And for seven years the pier has continued to rot into the bay as Ernst's project got permanently mired in the dream stage.

Ernst blamed Mayor Willie Brown for his troubles. The mayor is out to destroy him, he said, because he won't make payoffs. But Ernst, 64, has only himself to blame for the debacle at Pier 38. His story -- how he frittered away public money while failing to build his project, how port and state officials enabled his failure, how he played the political influence game at City Hall -- is worth telling because it shows, in microcosm, the way things get done, or not done, under the Brown administration.

Carl Ernst arrived in San Francisco in 1970, drawn by the beguiling promise of the Summer of Love. He held a doctorate in communications but had joined the crew of the hippie musical Hair and spent a few years partying. He especially remembers having fun at a nude beach south of the city, Gray Whale Cove. "We had cast parties on the beach, gay and straight, gals," he says. "I was only 30 years old." He enjoyed the secluded cove so much that he leased it from the state of California for two decades, pocketing entrance fees until the state took the property back in 2000.

Along the way, the versatile Ernst became a home builder and "the best of friends" with Joe O'Donoghue, influential president of the Residential Builders Association. In 1995, Ernst formed Pier 38 Maritime Recreation Center Inc. He appointed another house builder, Kenneth A. Hagan, nephew-in-law of then-Mayor Frank Jordan, as vice president of the corporation.

As Jordan was leaving office in 1996 -- to make way for Brown -- the San Francisco Port Commission granted Ernst a 36-year lease on Pier 38, at very low rents. The California Department of Boating and Waterways loaned the new corporation $1.5 million to construct a maritime recreation center to serve small boaters. The facility would offer slips for temporary docking, fuel, water, and sundries. Ernst promised to build rows of steel racks inside the pier's two-acre shed to "dry-store" hundreds of motorboats. The San Francisco Bay Conservation and Development Commission, a powerful state agency that controls the use of waterfront property around San Francisco Bay, OK'd Ernst's business plan, provided that he build a promenade around the pier for the public to enjoy.

Ernst and Hagan projected gross revenues of $5.6 million by their second year of operation. That meant they would have plenty of cash to remodel the crumbling pier, pay off the state loan, and take a profit. Seven years later, the state money is long gone and the restaurant, public promenade, and boat racks have not materialized. Ernst is running the business on a hand-to-mouth basis, scrounging dollars by charging hourly slip fees, storing a handful of small boats, subleasing office space, and parking cars owned by residents of nearby luxury condominiums -- the latter in violation of his city lease. Recently, Ernst entered into partnerships with a restaurateur and a yacht dealer, hoping to jack up his cash flow, but the relationships soured, leaving him unable to pay his debts.

The Pier 38 project is a dead albatross around the neck of its government sponsors. They all say it stinks, but they cannot get rid of it. For example, after bemoaning Ernst's chronic inability to earn his keep, the Bay Conservation and Development Commission launched an "enforcement action" against him two years ago for not providing public access to the pier. BCDC officials say they are still investigating the matter and have yet to assess any penalties. Port officials say the project is a financial and programmatic bust, yet they continue to champion Ernst, hoping for the best, even though they have excellent reasons to evict him.

Despite the pier's problems, Ernst's associate Hagan pocketed money from it. From 1996 to 1998, his company, Hagan Construction and Development, was paid more than $500,000 by Pier 38 Maritime Recreation Center to demolish rotted portions of the pier, build offices and public restrooms, assemble portable docks, paint and repair walls, and install windows. Much of this work was only partially finished, leaving a variety of holes in the pier. Hagan also got a $40,000 brokerage fee from the port when Ernst signed the lease, and has received tens of thousands of dollars in construction management fees, according to public records. Hagan, who did not return repeated calls requesting comment, appears to have parted ways with Ernst after the state loan money was exhausted in 1998.

Ernst paid $215,000 in state loan proceeds to his nude beach operation for contracting services and to purchase used equipment, including boat-launching gear, a forklift, and a rusty old barge, an eyesore tethered to the ballpark side of the pier. And port officials confirm that Ernst has permitted business activities on the pier that are prohibited by his lease.

About The Author

Peter Byrne


Subscribe to this thread:

Add a comment


  • Nevada City and the South Yuba River: A gold country getaway

    Nestled in the green pine-covered hills of the Northern Sierra Nevada is the Gold Rush town of Nevada City. Beautiful Victorian houses line the streets, keeping the old-time charm alive, and a vibrant downtown is home to world-class art, theater and music. The nearby South Yuba River State Park is known for its emerald swimming holes during the summer and radiant leaf colors during autumn. These days the gold panning is more for tourists than prospectors, but the gold miner spirit is still in the air.

    South Yuba River State Park and Swimming Holes:
    The park runs along and below 20 miles of the South Yuba River, offering hiking, mountain biking, gold panning and swimming. The Highway 49 bridge swimming hole is seven-miles northwest of Nevada City where Highway 49 crosses the South Yuba River. Parking is readily available and it is a short, steep hike to a stunning swimming hole beneath a footbridge. For the more intrepid, trails extend along the river with access to secluded swim spots. The Bridgeport swimming hole has calm waters and a sandy beach -- good for families and cookouts -- and is located 14 miles northwest of Nevada City. Be sure to write down directions before heading out, GPS may not be available. Most swimming holes on the South Yuba River are best from July to September, while winter and spring can bring dangerous rapids. Always know the current before jumping in!

    Downtown Nevada City
    The welcoming, walkable downtown of Nevada City is laid back, yet full of life. Start your day at the cozy South Pine Cafe (110 S Pine St.) with a lobster benedict or a spicy Jamaican tofu scramble. Then stroll the streets and stop into the shop Kitkitdizzi (423 Broad St.) for handcrafted goods unique to the region, vintage wears and local art “all with California gold rush swagger,” as stated by owners Carrie Hawthorne and Kira Westly. Surrounded by Gold Rush history, modern gold jewelry is made from locally found nuggets and is found at Utopian Stone Custom Jewelers (301 Broad St.). For a coffee shop with Victorian charm try The Curly Wolf (217 Broad St.), an espresso house and music venue with German pastries and light fare. A perfect way to cool down during the hot summer months can be found at Treats (110 York St.) , an artisan ice cream shop with flavors like pear ginger sorbet or vegan chai coconut. Nightlife is aplenty with music halls, alehouses or dive bars like the Mine Shaft Saloon (222 Broad St.).

    The Willo Steakhouse (16898 State Hwy 49, Nevada City)
    Along Highway 49, just west of Nevada City, is The Willo, a classic roadhouse and bar where you’re welcomed by the smell of steak and a dining room full of locals. In 1947 a Quonset hut (a semi-cylindrical building) was purchased from the US Army and transported to its current location, and opened as a bar, which became popular with lumberjacks and miners. The bar was passed down through the decades and a covered structure was added to enlarge the bar and create a dining area. The original Quonset beams are still visible in the bar and current owners Mike Byrne and Nancy Wilson keep the roadhouse tradition going with carefully aged New York steaks and house made ingredients. Pair your steak or fish with a local wine, such as the Rough and Ready Red, or bring your own for a small corkage fee. Check the website for specials, such as rib-eye on Fridays.

    Outside Inn (575 E Broad St.)
    A 16-room motel a short walk from downtown, each room features a unique décor, such as the Paddlers’ Suite or the Wildflower Room. A friendly staff and an office full of information about local trails, swimming and biking gets you started on your outdoor exploration. Amenities include an outdoor shower, a summer swimming pool and picnic tables and barbeques. Don’t miss the free vegetable cart just outside the motel in the mornings.

    Written and photographed by Beth LaBerge for the SF Weekly.

  • Arcade Fire at Shoreline
    Arcade Fire opened their US tour at Shoreline Amphitheater to a full house who was there in support of their album "Reflector," which was released last fall. Dan Deacon opened the show to a happily surprised early audience and got the crowd actively dancing and warmed up. DEVO was originally on the bill to support Arcade Fire but a kayak accident last week had sidelined lead singer Mark Mothersbaugh and the duration of the west coast leg of the tour. Win Butler did a homage to DEVO by performing Uncontrollable Urge.

Popular Stories

  1. Most Popular Stories
  2. Stories You Missed
  1. Most Popular