Cesar Chavez Street dead-ends near San Francisco's eastern waterfront in a bleak industrial area of nondescript warehouses, workshops, and small office buildings. During the day, there is little traffic, except for sporadic flurries of trucks pulling out from Pier 80, laden with newly arrived cargos of steel, lumber, and paper. The mostly blue-collar workers tend to mind their own business, and nothing much exceptional happens.

That's why many in the neighborhood still recall the day in July 2006 when Derf Butler, a politically connected businessman, celebrated the opening of his new business venture, Fanatics Sports Bar and Restaurant, at 601 Cesar Chavez. Instead of trucks spewing diesel exhaust, the street was lined with shimmering black limousines carrying city supervisors, commissioners, and members of the Chamber of Commerce.

Fanatics Ultra Lounge, the hip-hop club politically connected businessman Derf Butler promised would be a sports bar and restaurant.
RC Rivera
Fanatics Ultra Lounge, the hip-hop club politically connected businessman Derf Butler promised would be a sports bar and restaurant.
Police regularly responded to problems outside Fanatics, which included underage drinking, vandalism, and shootings.
RC Rivera
Police regularly responded to problems outside Fanatics, which included underage drinking, vandalism, and shootings.
RC Rivera
RC Rivera
Fanatics was initially promoted as a sports bar. Instead, it became a hip-hop club holding events with titles like "Massacre."
Fanatics was initially promoted as a sports bar. Instead, it became a hip-hop club holding events with titles like "Massacre."

Mayor Gavin Newsom gave a short speech before using a gigantic pair of scissors to cut a shiny red ribbon. The esteemed guests took casual tours through Butler's two-story building, which he had built on public property leased from the Port of San Francisco. Small groups gathered outside in the warm afternoon sun to listen to live music and chat while they nibbled on Cajun shrimp hors d'oeuvres, mindful not to drip sauce on their expensive clothes.

Butler, short in stature with a thickset frame, was an energetic 43 years old, though in recent years he had added 60 pounds to his powerful build. Instead of detracting from his appearance, the extra weight complemented his jovial persona. He moved easily among his high-powered guests, making sure they were comfortable and had enough to eat and drink. It was an exceptionally beautiful summer day, and there were plenty of reasons to celebrate.

Butler built Fanatics on the northern edge of the Bayview–Hunters Point Redevelopment Project Area, a sprawling district that includes several neighborhoods and covers much of the city's southeastern corner. Its residents are largely African-American and for years have been beleaguered by violent crime, high rates of unemployment, and the despair that comes from both. City agencies invested millions of dollars in the area in recent years in the hope of reducing blight and crime. The Municipal Transportation Agency was then within weeks of launching the $648 million T-Third light rail line. City officials billed the T-Third as a vital economic link that would shuttle commerce and employment opportunities to the economically neglected southeastern neighborhoods. In addition, the MTA had spruced up Third Street, the Bayview's major commercial artery, with new sidewalks, street lighting, and palm trees.

The politicos also came that day to celebrate Derf Butler. An African-American raised in the city's hardscrabble Western Addition, Butler had overcome trouble with the law to ingratiate himself among the city's elite. He contributed generously to political campaigns and was a charming fixture at community and fund-raising events.

Elected officials regarded Butler and his new business as dividends on the city's investment in Bayview–Hunters Point. On the day of the ribbon cutting, Fanatics was the focal point of a citywide hope that dozens of new businesses, especially black-owned ones, would spring up along the Third Street corridor. "The economic impact is huge," a spokeswoman for the mayor told a reporter. "It will provide a stimulus for new business for the entire southeast area."

But after the speeches were over and drivers navigated the limousines away from the gray end of Cesar Chavez, problems began to emerge. Butler had not paid rent to the Port of San Francisco for months, and at the time of the ribbon cutting, he owed city taxpayers more than $70,000. And within weeks, he began to transform Fanatics into a business that would embarrass his political connections and turn city property into a lodestone for underage drinking, vandalism, and bloodshed.

The port, which manages seven and a half miles of waterfront, was not pleased with the turn of events. But if the city agency had looked a little closer at the cheerful businessman's background, they might not have been so surprised.

For a sports bar, Fanatics is an impressive space. Its steel warehouse exterior fits well with the other buildings on the street and belies its upscale interior, which features a mix of plush carpeting and hardwood floors. Tasteful backlighting and textured surfaces create an airy, contemporary atmosphere. The decor might be considered elegant if not for the 35 plasma televisions that seem to project from every vertical flat space.

Butler promotes Fanatics as the largest sports bar in the city at 10,300 square feet (building records show the interior is actually less than 6,000 square feet). Upstairs, there are several VIP rooms and a private bar area. On the ground floor are a large kitchen, the main bar, and a dining area on an expansive, polished cement floor. The menu ranges from pub grub to Cajun cuisine, and at night the Fanatics After Dark Experience, or "FADE," offers "sophisticated evening entertainment."

"The lights get low, the ambiance is mellow, our staff is prepared to take you to the next level," the club's Web site promises. "Smooth R&B, salsa, blues, old-school beats, and new soul fill your ears."

But the restaurant began to fail immediately. According to several Yelp reviews, the bartenders and wait staff were slow and inexperienced, and customers were sometimes overcharged for drinks. The food was fair to good, but lunches were pricey for the working-class neighborhood, and at night the industrial area was not a draw for dinner customers. The bar frequently ran out of basic liquors, and one patron complained that he drove to Fanatics for an advertised salsa night only to find it closed.

"There were a lot of employees around here who were excited to have a place to go and have lunch," said Sesilia Pahulu, the operations manager at a logistics and transportation business in a nearby office building. "We went once or twice. The food was good, but it was too expensive. Most of the people who work down here just can't afford to spend $12 or $15 for lunch."

Within a few weeks of Fanatics' opening, neighboring workers at the end of Cesar Chavez noticed it was closed during the day and thought it had gone out of business. Then they began to see liquor bottles and other garbage on the street. "Sometimes, if you came in on a Saturday, there were so many broken bottles, you had to be careful where you parked," Pahulu said. Some businesses had windows broken, along with other property damage. One morning, a Trans Metro Express manager arrived at the company parking lot across the street from Fanatics to find two charter buses with their windows shot out.

By the late fall of 2006, it was apparent that Fanatics Sports Bar (now sometimes referred to as Fanatics Ultra Lounge on dozens of MySpace pages) had morphed into a hip-hop and gangsta rap club catering to the "18 to party, 21 to drink" crowd. Police responded regularly to calls of fights, public drunkenness, and sideshows, a popular activity that consists of burning rubber while spinning doughnuts, often in stolen cars.

The first shooting occurred on January 15. According to police reports, an unknown suspect fired numerous times at the front of Fanatics, hitting 36-year-old Quintin Morris in the chest as he left at 2 a.m. with friends. For police, the club was now a serious concern.

Underage drinking, vandalism, and gunplay are bad enough on private property, but when they happen regularly on public land, they become a political embarrassment — particularly to the mayor's office, which has failed to reduce violent crime in the city despite numerous heartfelt pledges.

It's hard to say for sure whether Butler planned all along to operate a hip-hop nightclub. But it is certain that had he presented the hip-hop plan to the Port of San Francisco, officials would have scuttled the project long before the ribbon-cutting celebration. "What the port approved was a bar and restaurant with entertainment for the 35-and-over crowd," said the port's real estate director, Susan Reynolds. "Had we known what Mr. Butler had in mind, we never would have approved it. Absolutely not."

Reynolds echoes other city officials around the Bay Area who have begun to restrict hip-hop clubs when a pattern of violence emerges. San Jose shut down the Ambassador's Lounge after repeated shootings outside. Gilroy recently closed the Krazy Koyote for shootings and stabbings in the club's parking lot. In March, Oakland denied a permit application for Tycoons, which would have been operated by Ed Pope, a former owner of Ambassador's. Using a standard hip-hop impresario tactic, Pope claimed in his application that he planned to stage comedy shows and gospel artists.

Butler's cabaret application to the San Francisco Entertainment Commission — which was submitted almost a year before Fanatics opened — listed entertainment as comedy, poetry, jazz, rhythm and blues, and DJs. Butler says the switch from restaurant to hip-hop club was unplanned, and simply a survival tactic. "There were certain financial realities, and I had to do whatever I could to keep the doors open," he says. "At least until the restaurant became known. It takes time." Butler pointed out that he has also held boxing matches, domino tournaments, and several community-based parties and celebrations at Fanatics.

But if Butler did mislead city officials about his plans for the city-owned property, it would not be the first time he had attempted to profit by deception.

In December 1996, on a bitterly cold and wind-bitten day in Chicago, Butler, who was using the name Gary Bresee, was holed up in a hotel room tearing up thousands of dollars' worth of phony Bank of America Visa travelers' checks. He was frantically flushing the shreds down the toilet as police kicked in the door to arrest him for heading a three-state counterfeiting ring.

A few weeks before, Butler had used a high-end copy machine to make the bogus $100 checks in a dingy West Oakland apartment building next to the New Hope Baptist Church. By December, Butler had made between $300,000 and $500,000 in travelers' checks and printed up another $10,000 in U.S. currency, according to court documents.

Butler transported the fake checks to Chicago, where he distributed them to four underlings. They then purchased thousands of dollars' worth of shoes, toys, body lotions, and gourmet coffee beans from retailers in Illinois and Kentucky. The counterfeiting ring profited by selling the merchandise and collecting change in cash for the phony $100 checks.

The money kept rolling in until one of Butler's accomplices was busted and gave up Gary Bresee's real name and the Chicago hotel where he was staying. Butler was charged with two counts of counterfeiting, to which he pled guilty in 1998. He dodged a two-year prison sentence by giving federal prosecutors enough information to leverage confessions from his cohorts. Butler also flipped on the counterfeiter who helped him print the currency, according to court documents.

Butler's lack of a serious criminal history and his cooperation with federal prosecutors paid off, and he served only a month behind bars. He was ordered to pay $14,000 in restitution to the businesses he ripped off, but after paying back a portion the court released him from that obligation, citing his inability to pay, according to court documents.

Butler says his counterfeiting enterprise was the biggest mistake of his life. "That's not me," he said. "I've always been hard-working, and I don't want to be that kind of example to my kids or my community. I was young and I made a big mistake and it has dogged me ever since."

But Butler wasn't all that young. When he became a counterfeiter, he was a 33-year-old family man with two children. Prior to becoming a late-blooming felon, Butler had led a mostly crime-free existence, according to court records. He prefers not to talk about what drove him to the dark side so late in life, and in fact cut an interview short when asked.

Butler then turned his attention to politics. In 1998, the same year he petitioned the court to release him from paying restitution, his immediate family members and his newly formed company, the Butler Enterprise Group, contributed $2,875 to San Francisco political campaigns. Of that, $2,575 went to Supervisor Amos Brown's successful re-election campaign. Between 1998 and 2004, Butler contributed $6,205 to candidates, about of third of which went to Gavin Newsom's mayoral campaign.

Butler's generosity and political activity gave him access to City Hall. He was a member of Newsom's transition team in 2004, which consisted of more than 200 community activists who helped the mayor establish priorities for issues such as redevelopment, homelessness, and violent crime. District Attorney Kamala Harris lists Butler's name prominently on her Web site, and Assemblyman Mark Leno's Web site features a photo of Leno with Butler at the 25th anniversary of the Ella Hill Hutch Community Center in 2006.

Butler says he turned to politics for selfless reasons. "I got involved in politics because I wanted to do what I could to make sure there was a spot at the table for African-Americans in San Francisco," he says. But by-products of his political activity were plum contracts for his Butler Enterprise Group. He was hired as a contract compliance officer for major developers with fat city contracts. Among others, Butler worked for Catellus, the master developer of the 303-acre Mission Bay project, and Lennar Corporation, the company behind the 790-acre Hunters Point redevelopment project.

In 2002, Butler's political connections paid off again when the Butler Enterprise Group became a 20 percent partner in the newly formed Fillmore Development Associates, whose first contract was to help build the Fillmore Jazz District, a $62 million redevelopment project in the city's Western Addition.

It appeared that a young man from the neighborhood had finally made good, but Butler apparently had not completely reformed. He failed to mention his felonious background to his new partner, Em Johnson Interest, and the San Francisco Redevelopment Agency. In 2005, just as the redevelopment agency was about to release $13 million in city-owned land and cash to Butler and his partner, the San Francisco Business Times published a story detailing Butler's felony convictions.

Causing further embarrassment, the Business Times noted that Butler had misrepresented his education to the agency, claiming on his résumé that he held a bachelor's in business administration from San Francisco State University. According to the university's admissions office, Butler was registered for two semesters in the mid-1980s, but never obtained a degree. The revelations damaged the credibility of the Fillmore project, and within 10 days of the story's publication, Butler quietly withdrew his partnership. It was around this time he turned his full attention to completing construction of his sports bar.

Just past 10:30 p.m. on a recent Friday night, the quiet end of Cesar Chavez is suddenly slammed with traffic. Cars packed with young people turn onto the street and parking spaces are quickly filled.

Small groups hang out in front of the buildings east of the club, drinking hard liquor and passing blunts. The young men do their best to look self-assured in their uniforms of oversize jeans and polo shirts (the club's dress code requires males to wear collared shirts; plain tees, white tennis shoes, hoodies, or other gang wear are forbidden). Slender young women in miniskirts and light summer tops cross their arms against the chilly fall air while they wait in line.

A girl who looks to be no more than a teenager is hanging out up the street with two friends. She swears she's 21 as she pours a shot of Hennessy cognac into her friend's plastic cup before tilting the bottle to her lips for a long pull of the amber liquor.

A police squad car pulls up in front of a Fanatics employee collecting parking fees at the entrance of the club's parking lot. "How many are you expecting tonight?" the cop asks.

"This should really be about it for tonight," the parking attendant says, gesturing broadly to the 200 or so people on the street.

The cop scowls at the attendant for several beats to convey his skepticism before driving off without saying anything else.

The police have reason to be watchful. Police Captain Albert Pardini says Bayview Station is already overwhelmed with drug dealing, gang activity, and one of the highest homicide rates in the city. "There's never any telling what type of crowd will be there from one week to the next," he says. "That puts an added strain on our patrols, because we have to make sure we have enough officers available to deal with the type of major incidents we've had down there."

Of all the trouble outside the club, one night eclipses the rest in the minds of the police and has tempered the city's attitude toward Butler and Fanatics. Just past midnight on Sunday, June 10, a squad car responded to calls of shots fired outside the club. As the first two responding officers sped toward 601 Cesar Chavez, they could not have known how crazy things were about to get.

The promoter and headlining DJs that night were known for having a young gangsta rap following with a history of attracting trouble. To avoid potential violence, the promoter hired Universal Distributor Security to provide up to 10 security guards for the show. UD Security's parent company at the time was Your Black Muslim Bakery, an organization alleged to be involved in child rape, kidnapping, torture, and the shotgun killing of East Bay journalist Chauncey Bailey.

Fanatics was filled to capacity by 11 p.m., and there were still an estimated 300 to 500 people outside who either could not get in or had simply come to hang out. Around the same time, managers at Club Hide across town on Seventh Street shut down an unruly hip-hop show, and its disgruntled patrons headed to Fanatics.

The crowd, now a thousand strong, became angry. Around 11:45 p.m., about 200 people rushed the front door. Fanatics staff and security held them back, but the crowd's anger was about to overflow.

"Everybody was just standing around outside," says Darrell Lee Anderson, who was part of the crowd. "There were no fights or anything like that, but all of a sudden the shooting started. It seemed like the shooting was coming from every direction."

The first two officers who arrived found a chaotic scene. Gunfire was coming from several cars and hundreds of people were screaming as they tried to run from the front of the club or dodge bullets. Despite the presence of the officers, people continued to fire their guns into the air and at buildings. Realizing the situation was out of control, the officers immediately called for backup.

Canine officer Michelle Liddicoet and her partner were among the first to respond to the backup call. "As we walked up Cesar Chavez to the front of the club, we heard several rapid-fire shots, people running and screaming about someone in front of the club with an AK-47," she wrote in her police report. "We continued to the front of the club, where there were numerous people hiding inside and underneath cars trying to escape the bullets. People began to run from the area and the shots continued to ring."

Just up the street, Officer Ajay Singh was making his way through the people running away from the club when, 10 feet ahead of him, 20-year-old Donevan Noordzee was shot in the foot. Noordzee was the only gunshot victim that night, according to police reports.

At some point a police officer fired a weapon, which triggered a citywide call for backup. More than 100 officers immediately dropped what they were doing at one of the busiest times of a weekend night to descend on Fanatics.

Police blocked off the street and searched each car for gunshot victims and weapons. Eighteen people were detained on suspicion of weapons-related violations, and police confiscated seven guns, an air pistol, and a knife. Six people, including three 19-year-olds, were ultimately charged. The following day a man was arrested on suspicion of firing the AK-47 assault rifle outside the club.

Butler blamed the promoter for the incident, though he refused to say who it was. "We worked with a promoter that night that we worked with before and everything went fine," he said. "There were no problems at all. And how can we be responsible for Club Hide closing down that night? We've done everything we can to avoid something like that ever happening again." Butler also says Club Hide managers acted irresponsibly by closing their event so early.

But Captain Pardini said Butler has continued to stage hip-hop performers and DJs since that night and while there have been no further shootings, there are still problems with sideshows, fights, and underage drinking.

Butler's political friends have since distanced themselves from him. Supervisor Sophie Maxwell, who held her 2006 election night victory party at Fanatics, would not return phone calls about Butler or his club. The Reverend Amos Brown, who received almost $3,000 from Butler during his successful 1998 bid to be re-elected to the Board of Supervisors, said he had no comment.

Newsom's spokesman Nathan Ballard downplayed the mayor's appearance at the ribbon cutting. "The mayor goes to a lot of events," he says. "There were a couple of things going on down there that day, and I don't even know if he was there for Fanatics." Ballard was unable to say what the other event was. But Newsom's name was dragged indirectly into the June 10 riot when it came out that the Mayor's Office of Criminal Justice headed up the investigation, which was unusual because it does not typically conduct investigations.

The office's acting director, Sergeant Mikail Ali, a former investigator with the city's Gang Task Force, said he happened to be volunteering that night because of a spike in violent crime in the Western Addition. "This case came up, and being the most senior officer, I just took it because it was an appropriate use of resources instead of having a team of off-duty officers come in," he said. "No one from the mayor's office asked me to take that case, and I had never seen Derf Butler or even heard his name before that night. I still wouldn't know him if he was standing right in front of me."

The mayor's office also denied any connection with the investigation. But it's worth noting that a few weeks after the riot, Butler's wife, Anita Butler, contributed $500 — the maximum allowable — to Newsom's re-election campaign. It was the first political contribution made by anyone close to Butler since December 2004.

Butler said early last month that he is trying to switch his business back into a bar and restaurant by opening for lunch three days a week. He said he is also encouraged about Fanatics' regular Monday Night Football event. "We're starting to get a good crowd for that," he says with his trademark enthusiasm.

But port officials say that after working with Butler when he was $70,000 behind in his rent and being patient through all the construction delays and continued problems, they have had enough.

"We have had a lot of Derf's friends come by here and argue on his behalf, saying that we are not being fair and that he deserves a chance," the port's Reynolds says. "But after we tell them about the problems we've had with him, they leave here more mad at him than us. We also have a fiduciary responsibility to our tenants, and now we have a lot of small businesses on Cesar Chavez that have bullet holes in their walls."

On October 11, the port served Butler with an eviction notice, and on October 24, the city attorney's office padlocked Fanatics' front door and covered the windows with metal screens. Butler and his family removed what they could from the club the day before the eviction. "There's still a lot of stuff in there," a port workman said as he drilled the last screw in a steel-mesh window cover. "But it's shut up tight now."

The port will soon begin looking for a new tenant for the building. "We want it to continue to be a locally owned restaurant just like the original intention," Reynolds said. "It is not going to be a nightclub, that's for sure."

Butler still has staunch supporters, especially in the Western Addition neighborhood where he grew up. For many there, Butler is a dedicated husband and father, a businessman who has been treated harshly.

The Reverend Arnold Townsend, an election commissioner with strong ties to the Western Addition, says the port and the police have been too hard on Butler. The Western Addition community continues to be very proud of Butler, just as they were when so many people came out to celebrate the opening of Fanatics. "Everybody dressed up and went down there because this is a kid from the neighborhood who made good," Townsend says. "A kid who had some problems and straightened himself out, and that's no small thing. We don't have enough of that in our community."

Butler would say only that the eviction has been "a nightmare" for him and his family.

Port communications director Renee Dunn attended the ribbon-cutting celebration on that sunny day in 2006. What she remembers most is how hopeful everybody was that Fanatics would succeed. "I remember Mr. Butler's speech," she says. "He talked about how much he had dreamt of that day. His family was there and he thanked them for helping make it possible. I remember thinking this is really going to be something special if he can make it work. But it's been a disappointment."

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