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Pouring Money Down a Hole 

We tried to warn you. A new audit shows how a PGA tournament sucked millions of dollars from city parks.

Wednesday, Jan 25 2006
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The official guidebook to San Francisco politics goes like this: On one side of the political isle are "progressives," including many of the members of the Board of Supervisors, who see their job as protecting ordinary citizens and their families from profit-hungry "downtown" business interests. On the other is our mayor, Gavin Newsom, and his fellow "moderates," MBA-minded sharpies who struggle to promote economic and jobs growth, despite sabotage from ultra-left-wingers bent on making San Francisco a Stalinist experiment.

This narrative, of San Francisco in the throes of ideological bipolar syndrome, suits all its protagonists.

Barbarians-at-the-gate rhetoric draws donors, volunteers, and popular support to both camps. Battlefield hyperbole also allows players on both sides to explain away suspect behavior. When Chris Daly pries $50 million out of the developers of Rincon Hill condominium towers to enrich political cronies, as he did last year -- it's not political payola. It's part of a larger struggle on behalf of the poor and oppressed against downtown economic interests. When Gavin Newsom advocates on behalf of a $1 billion Treasure Island project backed by Democratic moneyman Darius Anderson, it's not pay-to-play cronyism. It's advancing the cause of economic development in the face of left-leaning Luddites.

There's another guidebook, however, released last week in the form of an audit report of the Recreation and Park Department, that tells a different story.

This far more revealing narrative describes a San Francisco run by competing groups of cronies willing to dispense with principle if it means remaining loyal to members of their own political faction. According to this de facto guidebook of San Francisco politics, city fathers here, both left and centrist, aren't driven by principle, but by the needs of their respective tribes.

The Recreation and Park audit shows how progressive supervisors did little to stop a $16 million Professional Golfers' Association tournament boondoggle that has sucked funds from parks used by ordinary people. Why didn't they stop it? Tony Hall, a former supervisor whose independent streak made him a frequent ally and friend to progressive supervisors, was behind the mess. And the rule at city hall says no stepping on pals' toes.

The mayor's underlings, meanwhile, carried out the golf project with such incompetence as to cost the city millions of dollars in price overruns, loan-repayment expenses, and money wagered on disadvantageous contracts with golf-tournament promoters and course managers.

How could a mayor who touts himself as a pencil-sharpening policy geek ever lead taxpayers into such a fix?

That's easy: If ever there were a cause inspiring blind excitement among the fat-cat crowd the mayor hangs with, it's golf.


I hate to gloat. No. Wait. I love it.

In a February 2002 column titled "Sand Trap," I wrote how San Francisco's city fathers were embarking upon a boondoggle diverting tens of millions of dollars that had been earmarked to benefit low-income park users. The money would fund a county supervisor's fanciful dream of turning San Francisco's seven public and five private golf courses into a Pacific Rim golf-tourism attraction à la Monterey. This would come about after the city spent millions to spruce up Harding Park Golf Course to PGA standards, and thus attract a tournament featuring Tiger Woods. From a fiscal standpoint, this turned into an even bigger debacle than I had predicted.

A couple weeks after the October 2005 golf tournament had finished, I asked a park spokeswoman to give me a full picture of what I had suspected was a financial smashup for S.F. taxpayers. She assured me the tournament had made money, and that criticisms saying money had been improperly diverted into this fiasco were unfair.

I wrote a column last October called "The Money Went Fore What?" ascribing responsibility for what looked every bit like a money-losing disaster to San Francisco's chief executive, Gavin Newsom, who's responsible for hiring, firing, and allotting money to the administrators who first carried out the golf project and then misled the public about its results.

As thanks, I got a letter from Isabel Wade, director of the Neighborhood Parks Council, one of the city's hundreds of self-appointed kibitzer groups, berating me for criticizing Newsom.

This is usually about as far as things go when SF Weekly highlights government foolishness or wrongdoing.

But last week, the Board of Supervisors budget analyst issued what was supposed to have been a routine audit of the Recreation and Park Department. It arrived as a scathing exposé of the financial disaster caused by Tony Hall's golf fantasy, the one approved by the progressive-dominated Board of Supervisors.

The project was supposed to cost $16 million, much of that drawn from a state fund earmarked to maintain safe neighborhood parks for "heavily populated and economically disadvantaged areas." It was supposed to earn profits for the city.

Instead, the audit report shows, this golf scheme was such a money-loser that it could jeopardize, for years, the possibility of properly maintaining parks citywide.

For one, golf tourism never materialized. Sure, more golfers paid greens fees at the spruced-up Harding Park. But fee income at other city courses plummeted. Local duffers were simply taking their game across town to the nicer course.

Costs, meanwhile, ballooned. The PGA tournament renovation project sucked up nearly $24 million in funds. That's a cost overrun of almost 50 percent, paid for by borrowing about $19 million, rather than the originally estimated $13 million. Even under a sweetheart deal devised to repay the "open space fund for city park improvements," however, the park department has already fallen behind, the audit says. As a result, park maintenance and repair all over the city will be deferred.

How could this be? Park spokeswoman Rose Dennis, for one, had assured me the PGA event would be a financial success, and that the kids' parks money would be repaid.

According to the audit, Dennis exaggerated.

The tournament actually turned out to be a major financial flop -- even when one ignores the $24 million in expenses leading up to the event. Costs incurred just during the days of the tournament caused the city to dish out $141,619 more than it received in payments from the PGA, according to the audit.

Thanks to a long-term PGA contract, San Francisco can expect four more money-losing tournaments.

Another bad city-negotiation gem hidden in the golf deal is $2 million in potential debt the audit shows hasn't been fully accounted for. Somehow, the sharpies at the park department negotiated a concession agreement for Harding Park Golf Course with a company called Kemper Sports Management allowing the company to borrow $2 million in city-backed bank loans. But the deal doesn't require the company to provide accounting for the city-backed debt. Already Kemper has borrowed about $1 million in S.F. taxpayer-backed loans. When city auditors asked for loan documents, the company refused.

This is scary, because the Recreation and Park Department concession agreements have a history of disappointment.

In 2001, the company that operated the horse-riding facility in Golden Gate Park failed to meet its financial obligations. The stables were closed, and remain so. The concessionaire operating the Japanese Tea Garden failed to pay its contracted rent for two years running. The St. Francis Yacht Club is behind in rent payment for facilities at the city-owned harbor in the Marina District. The audit said these last two were examples of a broader concession-failure trend.

I know of no evidence suggesting Kemper's having problems with its business, or its loan repayments. Let's all keep our fingers crossed, because the city's strained parks-upkeep budget can't afford a $2 million hit.

Parks facilities are in truly horrible shape, the audit suggests. One of myriad signs that things have gotten out of control: City swimming pool facilities are filthy with mildew, a sorry state that's causing kids and their families to turn away.

Meanwhile, the audit said, the department is about $600 million short of funds needed for planned improvements and repairs.


This golf deal was awful for the people of humble means who receive greatest benefit from publicly funded parklands.

Yet it had the support of the city's left-wing "progressives."

On the moderate side of the political aisle, this debacle was touted as a pro-business economic development deal. But the golf mecca scheme has proven so costly, and so detrimental to the city's overall parks-enhanced quality of life, that only an Enron accountant could describe it as an economic winner.

Nonetheless, political momentum behind the foolish golf mecca idea was as irresistible for the mayor as it was for leftist elected officials. Sean Elsbernd was Tony Hall's chief of staff in the months the golf tournament financing scheme was devised, during which time Elsbernd served as point man for the deal. Newsom, then a supervisor, hired Elsbernd in 2002 to join his executive staff, and then appointed him, as a personal loyalist, to the Board of Supervisors. Businessman favorite Willie Brown helped raise money for the deal behind the scenes. And business leaders such as former S.F. Chamber of Commerce President Lee Blitch told me and other reporters back in 2002 that the golf deal was "great" for the city.

But it wasn't great at all.

How could the supposedly poor-empowering progressives and the allegedly dollar-savvy moderates back something that has proven a disaster for both causes?

The answer is a map to San Francisco public life: Here, tribal loyalties transcend social principle, no matter what the official guidebook says.

About The Author

Matt Smith

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