Owner of the Warfield pushes billboard ballot measure

Real estate investor David Addington, 42, walks down the part of Market Street that intersects San Francisco's Skid Row, motioning at run-down century-old buildings and describing his plan to lead an economic renaissance. "Take a look down the sidewalk. You see all the people?" he says, in reference to a mob of pedestrians in front of Nordstrom on the northwest side of Fifth and Market streets. "Now look at this side. There's nobody."

Addington has identified the point where Union Square shoppers, Financial District workers, and tourists staying at the upscale hotels on Mason Street are discouraged from venturing farther southeast by the sight of flophouses, strip clubs, and clusters of drug addicts.

Addington then gestures toward 988 Market, which houses the historic Warfield Theater and the empty office building above it. He asks me to imagine this and nearby buildings festooned with electronic billboards that can rapidly change messages, like the one on the east side of the Bay Bridge.

The signs, he says, would lure the Nordstrom pedestrians past the winos and sex shops and toward the slums that now occupy the area surrounding the intersection of Sixth and Market streets. Once drawn by the lights, these crowds would need places to spend money. This would inspire out-of-town hotel developers, restaurateurs, theater companies, and other impresarios to set up shop. And down-and-out central San Francisco would recover the economic vitality of 60 years ago.

Addington's moths-to-light-bulbs theory of downtown economic development is behind the most controversial measure on the local November 3 ballot. Proposition D would create a special two-block district that would be exempt from a 2002 ballot measure that banned new billboards citywide.

Under Prop. D, most of the revenue generated by the new signs and billboards will go to Addington and other building owners. Buildings with vaguely defined "arts" uses in their ground floors will receive 80 percent of their sign revenue; those without artsy tenants will get 60 percent. The rest of the money would be controlled by a special community benefits district, which will route money to a ticket kiosk and some youth programs in the Tenderloin.

"Am I a beneficiary? Absolutely," Addington says. "But the group receiving the greatest portion of advertising revenue will be the community benefit district and the kids of the Tenderloin."

So far, he has spent $190,000 promoting the measure. Addington owns the Warfield building and the two-story building a block away at 1028 Market.

"We're asking the city to let us do something fantastic," he says. "We've crafted the measure so it can revitalize both blocks."

But it's preposterous to assert that the main thing holding back the slummy part of downtown San Francisco is a lack of computer-controlled LED billboards. An entrenched antigentrification ethos and a cacophony of nonprofits that treat Skid Row as their political fiefdom, combined with city laws and policies making it difficult to convert single-room-occupancy buildings to hotels, have discouraged investors from the neighborhood for decades.

The measure will, however, enrich Addington, possibly even if his revitalization idea fails: His buildings are the most visible at Sixth and Market streets for motorists entering downtown from Interstate 80, meaning the sign ordinance could improve the value of what have so far been poor investments. Addington counters that the billboards will be "pedestrian-oriented."

San Francisco needs to change rules discouraging development — ones that have nothing to do with billboards — to attract development to its downtown slums. Good places to start would be to make it easier for property owners to get permits to create tourist hotels and erect condominium towers.

But that doesn't mean voters should line one man's pockets simply because he spent a fortune on a ballot measure.


It's easy to see why Addington would seek unusual ways to profit from his $13 million investment in buildings within San Francisco slums. His efforts to cash in have so far failed miserably.

Addington arrived in San Francisco six years ago from Atlanta, where he played a lead role in putting together a development deal in which Wal-Mart and Home Depot would anchor an outdoor mall called Conyers Plaza. "I brought in outside investors and figured out how to get it developed," he said. "I bought it all back from the investors, and built a shopping center."

The development eventually sold for $20 million; Addington won't reveal his take, but says he came out "well."

With his Conyers Plaza grubstake in hand, he came here to attend law school at the University of San Francisco. But he discovered that he missed making development deals, and dropped out. He bought the Warfield in 2005 with the help of a $7.5 million loan. For $6 million, he bought the two-story building at 1028 Market, which housed a nightclub upstairs and some seedy retail businesses below.

Addington's idea was to get a permit to build apartments on the nightclub site and turn the offices that abutted the Warfield into office condominiums. But his plans bogged down in the kind of minutiae that has felled many an aspiring champion San Francisco developer. He fought with his tenants at 1028 Market, and was sued by the city for renting to a nightclub that operated illegally. A plan to develop his property into a temporary YMCA fell through. And the bottom fell out of the real estate market just three years after he'd bought his properties. San Francisco office rents, meanwhile, are declining at a rate of more than 10 percent per year, making office condos a less than stellar enterprise.

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