By Erin Sherbert
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By Leif Haven
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By Kate Conger
Due to this week's decimation of the America's Cup deal, it's uncertain when the Board of Supervisors will be voting on the ever-shifting plan to transform San Francisco's waterfront.
The documents that have been put before the supes could fill up a phone book — and are nearly as readable. Yet rather than focus on what the supes might vote on, it's interesting to note what they have refused to vote on. Concealed within scads of America's Cup-related legal and real estate arcana presented to elected officials this month was legislation that would have lashed together the Cup and the proposed 8 Washington luxury condo tower that anti-development groups have spent years battling in and out of the courtroom.
SF Weekly earlier this month reported on the Port of San Francisco's eyebrow-raising desire to glean property taxes from the unapproved Seawall Lot 351/8 Washington project and apply them toward spiraling America's Cup-related costs ("The Cup Runneth Over," Feb. 15). Locking in funds for one project from a second, yet-to-be-greenlit project isn't just questionable planning — it's questionably legal. When the Port submitted a resolution of intent to direct revenue generated by the hypothetical 8 Washington development toward the increasingly costly Cup, enemies of the condo project balked. So did the Board of Supervisors.
"I was very surprised," said Supervisor David Chiu. "This was completely premature, being as the city has not approved the controversial 8 Washington project." Added Supervisor David Campos, "I am not prejudging the 8 Washington project. But I was shocked it was in there. I do not understand why this happened."
The project's opponents have their own ideas about that — and it has escaped no one's notice that the 8 Washington project and the America's Cup Event Authority share both a lawyer and a lobbyist.
The America's Cup development agreement requires the creation of multiple Infrastructure Finance Districts (IFDs) — designated areas in which some or all of the property taxes are directed to specified ends (the port can multiply this revenue stream by issuing bonds against it). Seawall Lot 351, across the street from Pier 1, was one of eight potential IFD sites listed in a resolution submitted to the Board of Supervisors alongside the America's Cup development agreement. Blink and you'd miss it — it's doubtful many of our leaders slogged through the entire mound of papers; the sole mention of Seawall Lot 351 in the Budget and Legislative Analyst's lengthy report on the Cup deal is a single blip on the bottom of page 18.
When Chiu and his colleagues were tipped off about the commingling of the condo project and the America's Cup, they were displeased — and insisted all references to Seawall Lot 351/8 Washington be stricken from the deal. "That probably saved the port from taking some serious illegal action," says former City Attorney Louise Renne, a critic of the 8 Washington project. "But it wasn't for lack of trying."
Had the city ratified a plan tying the funding of the America's Cup to 8 Washington, it would have likely resulted in swift litigation alleging "a precommitment" to the condo project prior to its official approval. Once the condo project was enshrined as a significant source of Cup funding, voting down its approval would be politically challenging — and require tearing up America's Cup-related legislation. There appears to have been no proactive effort to inform the board of the ramifications of what they were voting on.
Messages for Event Authority and 8 Washington lobbyist Marcia Smolens were not returned, as she is out of the country. Event Authority and 8 Washington attorney Mary Murphy laughed off any notion that she had a role tying together the two projects. "Honestly, I don't know the genesis of the thing," she said. "I'm just a lawyer."
Jonathan Stern, the port's head of waterfront development, downplayed the significance of connecting 8 Washington and the America's Cup. He insists that the IFD resolution was "merely a disclosure" of hopes to form an IFD sometime in the future. Brad Benson, the port's special projects manager, said including every potential IFD in one grand resolution was simply a matter of expediency. When asked whose idea it was to toss 8 Washington into the mix, Benson said "It was a port staff proposal."
It was a lousy proposal, counters Sue Hestor. The land-use attorney has been battling development at Seawall Lot 351 for a long time — and, she notes, the port has been attempting to tap a revenue stream from the site for a long time, too. "The port is not an uninterested party," she says. "They have a huge stake in both of these projects" — the America's Cup and 8 Washington. "They think of [Seawall Lot 351] as a cash cow with multimillion-dollar condos on it."
Chiu adds, "This was just one line in the documents. It's very good that we caught it."
In the not-so-distant future, 8 Washington — along with other proposed waterfront condo towers, like 75 Howard — may loom over the Embarcadero, dwarfing the long-demolished freeway. Both projects are represented by law firm Gibson Dunn & Crutcher, and share architect Skidmore, Owings & Merrill. Skyscrapers like 8 Washington may prove to be spectacular places from which to watch the America's Cup. Whether they should be built to pay for the Cup is another matter.
Why are you so afraid of, and or, against developing the waterfront? More legal battles and less development = less tax dollars to fund all of those things San Franciscans love to vote in favor of. Let's make the waterfront an even more incredible place to live, work and play.
It is just unbelievable that average, every day citizens, naively interested in the well being of their City, have to ride shotgun over every planning document to be sure an "interested party", a consultant with aligned clients, or another entity is not attempting to slip one under the tent and pull one over on the citizen-suckers. I am astonished at our sheer fortune that President Chiu found "one line" in the America's cup deal that would have directed income to the Port from a highly controversial project which is NOT approved and has nothing whatsoever to do with America's Cup, but which would have given tacit approval to the controversial, non-approved project. This kind of trick-deal writing is really sharp business practice at it's best and feels like the same level of thinking that generated the "creative financing" deals recently done by Wall Street. These trick-deals just make the citizens more cynical, the planning/approval process more opaque, arduous, exhausting, expensive and frustrating because the citizens have learned not to trust any deal.
This was an opinion piece masquerading as a news article. Typical in this town. The “nothing is better than something” crowd should be pleased. Others see a lost opportunity to have improvements to the Embarcadero area and private sector jobs.
It's always a "proposal" - not harm done. It's probably not the first time the Port tried "creative financing". How many other proposals were completed by robbing Peter to pay Paul?