By Kate Conger
By Brian Rinker
By Rachel Swan
By Anna Pulley
By Erin Sherbert
By Chris Roberts
By Erin Sherbert
By Rachel Swan
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.