$8 Million Dollar Coffee with Dr. Sandra Hernandez, former CEO of the San Francisco Foundation, and How the San Francisco Foundation Really Works

The meeting, as I recall, was set up by Kary Schulman, San Francisco Grants for the Arts Director, and Susan Clark, the wonderful president of the now closed Columbia Foundation.  Sandra was looking for ways the foundation could engage with mid-Market revitalization efforts; the mayor was pressing her to carry the torch for his revitalization plans.   The meeting was to exchange ideas.

A thirty minute late-afternoon coffee turned into a three hour early dinner at farmerbrown.  One of the points Sandra made very clear at the outset: she was not interested in “Paying for Ed Lee’s laundry list,” the “list” being the myriad goals outlined in the mayor’s recently released Central Market Economic Strategy, his once-upon-a-time Mid-Market Legacy Project.  (We’ll look at that later.)

We talked about the Tenderloin and mid-Market globally, and I updated her on the 950 arts center project.  Shortly before meeting with Sandra, the American Conservatory Theatre (ACT) made the decision to take their property acquisition dollars and buy the Strand instead.  (ACT was understandably playing it safe; the Strand was an existing structure with a motivated and transparent seller, unlike the murky Texas-based hedge fund that owned the 950 properties at the time.)   I told Sandra that ACT was still committed to building their acclaimed conservatory on the distressed first block of Turk Street, where our kids would have a landmark arts school built in their own neighborhood, but that I had lost my buyer for the site.

Sandra asked me how much the site was going for.  I replied: $8 million.  She expressed amazement that we can take control of an entire highly-impactful block for a mere $8 million dollars.  “We make and lose that much money on any given day,” she said.

Wait a minute.  What did she just say?  Let’s try that again: “We make and lose that much on any given day.”  Pause.  Process.  Got it: Sandra was referring to what the Foundation’s $1.3 billion invested in multiple investment instruments (Wall Street) was earning or losing on any given day.  More on that later.

Sandra suggests the Foundation buy the site.  I’m stunned, but don’t object!  A couple of weeks later the Foundation convenes a very large assembly of mid-Market/Tenderloin stakeholders to make the announcement.  Seated next to Sandra is David Friedman, SF Foundation’s Board President.  Everyone leaves in a state of near euphoria – incredibly the site control crisis is resolved: We will own a piece of the mid-Market rock and control its destiny.

The engagement of the SF Foundation creates an exciting opportunity for a constellation of high-quality organizations that could engage with the Tenderloin community, generate people traffic, and finally have access to a permanently affordable, highly visible and accessible venue.   In short order my project team meets with: the Magic Theatre; Lorraine Hansberry Theater; Cutting Ball; CounterPULSE; All Stars Project; Youth Speaks; Women’s Audio Mission; Blue Bear Music; KDFC Radio; KALW Radio; SFArtsEd; Alonzo King LINES Ballet; Theater Bay Area; SF Playhouse; Community Music Center and Performing Arts Workshop.  (Astonishing, really, the caliber of organizations here, many of which were struggling with facility issues.  Many still are.)

During this new iteration of feasibility analyses I raised funding from:  Walter & Elise Haas Fund; Columbia Foundation; Gerbode Foundation and the Rainin Foundation.

Sandra disappears for weeks, not responding to calls or emails.  Finally, word gets out the board said no to acquisition, yes to supporting the project in a more “conventional” way.

Reactions, and Getting Schooled

Lots of folks in the arts community and city hall were incredulous.  Some were pissed.  I fell into the incredulous category.  (After Fiasco #2, I was firmly in the pissed category.)  I felt bad for Sandra.  I could not understand how the board would override the CEO, and its president, to kill such a powerful proposal that had enormous stakeholder support and groundbreaking potential to effect equitable development on a macro scale in a highly distressed community.  I gave Sandra credit for at least trying.

Soon after, I received invitations to lunch from a couple of directors of other Bay Area foundations.  One (definitely in the pissed category) told me the SF Foundation needs to be called out.  The other expressed condolences, then calmly explained to me how the SF Foundation really works.

“Elvin, you damn fool, let me break it down for you.  The SF Foundation is largely a tax-shelter mechanism for wealthy individuals/households who want to park their money somewhere to avoid paying taxes.  The instrument is called “Donor Advised Fund.”  At some point donors can direct foundation staff to make grants with their deposited funds, but they are under no obligation to do so.   In the meantime, the funds collect interest.”

 And there’s more, Elvin, you damn fool.   The SF Foundation is in an intense arms race for new Donor Advised Funds with the Silicon Valley Community Foundation: both behemoths are competing to buddy-up with the new crop of Bay Area tech multi-millionaires and billionaires.   Once the new money class chooses one of the foundations they are likely stay with them for life, so the pressure is on to solicit and get their business.  The goal is to bring money in before it goes to the other side, not to put money out.”

What’s the business proposition?  I was advised that the SF Foundation has little actual money of its own; the $1.3 billion asset base is made up of a multitude of Donor Advised Funds.  The Foundation, like all community foundations that operate under this model, charges fees to accept and administer these funds; that’s how they make money.   And a last surprising bit of information: giant Wall Street financial concerns like Charles Schwab and Fidelity are also in the Donor Advised Fund business.  Schwab and Fidelity call their divisions Schwab Charitable and Fidelity Charitable.

The Conventional San Francisco Foundation Way

The conventional San Francisco Foundation way, as it turned out, was to award itself a grant to steward the development of the project.  In other words, the SF Foundation makes a high-profile announcement about a major grant, but doesn’t disclose that the grant is largely to itself (we couldn’t tell how much, it’s very opaque over there) to cover staff time spent on the project.  This, I suppose, would be a reasonable, if self-serving, approach if foundation staff were qualified to undertake the work at hand.  In the case of developing 40,000 square feet permanently affordable arts and education space, however, no one at the foundation was remotely qualified, and the strangling of the project inexorably and painfully began.  When I raised this issue with the Foundation’s VP of Programs at the time, he responded: “It’s our money, and we have the prerogative to develop our staff.”  A disastrous policy, about which I’ve heard similar complaints from a prominent affordable housing developer engaged on another SF Foundation-funded project.

Jen Rainin is $5 million dollars short

During my time in the Tenderloin the Rainin Foundation has always been there in any effort to build arts program capacity.  Shelley Trott, who runs Rainin’s arts program, is one of the finest foundation officials I’ve ever worked with.  Shelley did her best to roll with the site control struggles of the 950 site, but eventually Rainin’s funds had to move and the Community Arts Stabilization Trust (CAST) was created, an excellent investment in its own right.  Now that the SF Foundation was publicly behind the 950 Project, there was some thought there might be a leverage play – SF Foundation & the Rainin Foundation – whereby we could move both 950 and CAST forward concurrently.

A meeting was set-up.  Shelley and her entire board were there, including the brilliant Jen Rainin.  Like they do with all things, the Rainin crew cut to the chase and say they’re all in, support collaborating and, not incidentally, have $5 million to start things up.  Here’s our big opportunity to leverage, leverage, leverage.  Sandra listened and replied: To avoid fees our minimum fund allocation is higher (my recollection: $10M), but we can look into waiving administrative costs to accept your $5 million.

Jen Rainin’s ready to write a check for five million dollars to support a project – a project you’re saying is a top priority for the Foundation – and you’re going to look into waiving administrative costs to accept it?   I could not, fucking, believe, what, I, was, hearing.  A sudden desire to slide under the conference table unnoticed and never to be seen again came over me.

In retrospect it made sense; it was a Bill Murray in Tokyo moment.  Sandra probably was thinking in Donor Advised Fund terms (the SF Foundation’s MO), whereas Rainin was not interested in parking money to dawdle and collect interest – they wanted to put it on the street ASAP.  That, of course, is exactly what Rainin did; they seeded CAST, the money was immediately leveraged (by New Market Tax Credits) and they went to work acquiring 80 Turk Street and 1007 Market Street, the new home of CounterPulse and ongoing historic home of Luggage Store Gallery, respectively.

Quick Sidebar: the KQED Fallout

A Cy Musiker piece on arts facilities development along mid-Market got me in big trouble.  City Hall was complaining about me, Sandra sternly advised.  I have to stop my “agitating against tech.”

Agitating against tech?  I did not see anything in Musiker’s piece that suggested as much.  What I was doing, I replied to Sandra, is advocating for the arts and equitable community development, not agitating against tech.  Sandra continued complaining about my making noise, but I wasn’t backing down.  It was strange, but telling, that I had to defend myself to the head of a community foundation for calling out a city hall that had mislead an entire community.  And the calling out consisted of a simple statement that no city resources were being made available to achieve the very outcome the mayor claimed was a high-priority.  Pretty mild stuff.

A side note:  It’s interesting to revisit Musiker’s piece and read the reference to Supervisor Kim working on arts district legislation.  We all know now that didn’t happen; in fact, behind the scenes, Supervisor Kim’s office worked against developing new funding resources for the arts.  More on that later.

Just Guarantee the Campaign, you don’t have to contribute to it

After the SF Foundation flaked a second time, with a special starring role by the former VP of Programs, I threw one last Hail Mary pass for 950 before it went completely under.   I wrote a note to SF Foundation Board President David Friedman asking for a meeting to float one more idea.  (Sandra had left the foundation by this time.)  Friedman responded that he would forward my communication to the appropriate party, but I never heard again from the Foundation.   The idea: Guarantee a loan the project team could utilize to build the arts & education center.  A loan guaranteed by the Foundation’s $1.3 billion was a sure bet, and it could have moved the project forward.  The loan would been taken out by the capital campaign and not have cost the Foundation a penny, for a project they claimed to hang their 1.3 billion-dollar hat on.

I credit the idea of Bay Area philanthropic assets being utilized as loan guarantees to Bob Gamble of Public Finance Group.  Bob ran the Goldman Fund in a previous life, and on a few occasions I’ve heard him rant about how underutilized the immense wealth of Bay Area philanthropy is.  Joining him is billionaire Bay Area philanthropist Marc Benioff, who has not been shy with his sharp criticism of the Donor Advised Fund model.

Lessons Learned

There are no villains here.  Definitely not Sandra; she’s a public-interest serving giant with a big heart that understands the need for holistic human development (hence her taking the unconventional leap so poor Tenderloin residents had access to quality arts education facilities and programs just like higher-income households do).  I didn’t appreciate her laying into me for being an anti-tech, anti-city hall agitator, but that’s small stuff.  The big stuff were the major structural disconnects: staff vs board; the foundation’s operating model vs. a community project’s needs. Perhaps as its critics – which includes some very experienced and smart figures in philanthropy – suggest, the Donor Advised Fund model does create a more savings bank rather than philanthropic institution cultural dynamic.  I’m not sure.

What’s the lesson moving forward?  All you practitioners out there still or newly in the trenches, I would recommend being highly suspect of SF Foundation’s spin.  They do invest heavily in marketing and communications.  In fact, during key technical meetings with Sandra to go over 950’s development numbers, the VP of Programs wasn’t present, but the communications director was.  Later the VP would be clueless as to what the CEO committed to: a big structural disconnect.

I would challenge their board – directly – to put money on the street; the Foundation’s CEO apparently has limited power and operates more as brand ambassador.  I would challenge them to put up real risk capital and not just ride the Wall Street train (If they make or lose $8 million on any given day whether they do anything or not, then why not do something?).  I would demand they live up to the endless self-promoting hype they broadcast far and wide as they try to score new Donor Advised Funds.  (Do you see the Walter & Elise Haas Fund plastering its name all over the place?  WEHF rocks, by the way.)

The whole Donor Advised Fund model needs to be reevaluated.  Maybe donors setting up funds should be advised a portion of their funds may be risked for, say, charitable purposes.

Lastly, upon returning to the Tenderloin, I learned the Foundation has dismantled its arts grant portfolio and is focusing its resources (whatever that means, to be determined) on “equitable development” (whatever that means, to be determined).    So, does that mean the San Francisco Foundation will, or will not, support the arts as part of its new campaign on equitable development? In my view they would be wise to recognize the arts are much more than just about the arts.

Maybe they could start their equitable development campaign by writing a check for $24 million to Tenderloin youth groups, all of which lost that much in committed money – and the chance to have their own state-of-the-arts education facility – the day 950 fell.  Hey, that would total 0.018 of the San Francisco Foundation’s Wall Street holdings, on any given day.

Yes on S Yo!


A Letter to Darren Walker, President, Ford Foundation

Dear President Walker:

I’m a fan.  When the Ford Foundation rolled out with its 20% Indirect Cost Proclamation I was like, “Holy shit!  Walker is for real yo!”  (I’m from East New York Brooklyn, so you’ll understand this is my first language.)

That said, I am concerned about your recent short video piece on being a “Disruptor.”  I was with you until you declared that being a disruptor of the status quo is “fun.”  Why the worry?  Suggesting the role of a disruptor is “fun” hints you may be falling victim to the creeping insularity that, sometimes, comes with mega-foundation-directing, flying-at-30,000-feet daily life.

Here’s another take on being a “disruptor” and taking on the status quo: Your job and funding get threatened.  An example: Years ago I signed-on with the current San Francisco mayor and district supervisor to support their campaign to bring tech companies to a long-dilapidated commercial corridor in a poor neighborhood.   Later, when I objected to how the city abdicated on its responsibility to leverage tech’s investment to the betterment of local residents, I was threatened by a city official to get on board or risk losing my job and having my organization’s funding cut.  (At the time I was running a small Tenderloin nonprofit.)

I resigned shortly after to make sure my organization – the Tenderloin Economic Development Project – was not punished for my refusal to play along.  And I was cool with that because I wasn’t going to kiss the city’s ring, but it wasn’t easy or “fun.”

Another example.  Years later, I had to blow a whistle on the city and a flaky community foundation as they undermined an important community development project.  (Actually it was just a toot, I haven’t yet fully pulled back the curtain.)   That wasn’t any fun at all.  Worst of all, I stopped getting invitations to happy hour events, receptions, galas, etc., and my monthly food & beverage bill went way up.  (Just kidding!… sort of.)

So that’s how it goes President Walker, at least for some of us.  If you have an ironclad source of funding and job security, enjoy it.  Go wreak havoc on the status quo, just please don’t call it “fun.”

Your fan,


P.S.  To the safe havens and friends out there that always kept their doors open to me (and no doubt to other political dissidents) – Luggage Store Gallery, the Vietnamese Youth Development Center/Judy Young, Warr/Zamora Productions, Marc, Ellen, Keefer, Ebony, Lex, Shelley, Frances, Carmela, Terrance, Deanna, Bita, Indra, Paul – thank you.

Pops and Roberto Clemente

Pops died on the day of my Tenderloin Arts & Education Advisory reunion, July 28th, 2016.   How fucked up is that?   I flew up from Santa Ana the day before to facilitate the meeting at 826 Valencia, which kindly offered to host it at their new Tenderloin space on Golden Gate (thank you Bita).  As I was getting dressed I got the text from my brother: The nurse is there and now says it could be tonight or tomorrow.  A few days earlier the nurse said he had a few weeks left.  Half sobbing, I text Michael Warr, Deputy Director at the Museum of the African Diaspora, and Patricia Zamora, Area Director SF Boys & Girls Club, to ask them to take over the meeting for me.  Michael and Patricia are family; they responded immediately: We got this, sending you prayers and blessings.

I raced back to the airport but didn’t make it back on time.  My brother called while I was waiting at the terminal.  I answered, but there was no voice on the line.  I knew pops had died. Finally, my brother said: Yo man…he’s gone!   Then I heard him wail, a piercing, pained sound like I never heard before.  Thinking of the agony of that sound makes me want to cry.

Okay, okay, not sure what to say to my brother.  I’ll be there in 2 hours.  The nurse says they have to take my dad’s body away now, but my brother tells them I’m coming and they have to wait.

Pops is covered with a light cloth when I walk in.  I pull the cloth off of his face and torso, and see he’s wearing his favorite flannel shirt.  The color has left his skin, and he’s cold to the touch.  Just a few hours before I kissed him on the head and said “See you later pops.  I have to go do a volunteer job.”  His mind was already gone but I wanted him to know why I had to leave for a little while.

I took my bracelet off and put it on his wrist, a bracelet Joy made to protect me during the Year of the Dragon.  I never took it off even after the Dragon year passed.  Joy made me another one which she brought down two days later when she came to visit the family.

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Cremation arrangements are made.  My brother and I chose a local “Cremation Society” that seemed a good fit for pop’s: simple, no frills. The director asked my brother and I if we wanted to be present.  There was a moment of silence: neither one of us anticipated that question.  I eventually said yes, thinking I can’t leave my dad alone during those final moments.  Totally irrational, I told myself, but I can’t.

The cremation facility in Santa Ana is just like the factory in Brooklyn my dad and I used to work in.  Well, that he worked in for most of his adult life – I was only there in the summers after I turned 14.  The director was there to meet us (my brother and mother both joined), described the process for viewing and cremation, then surprised us with another question: Would any of you like to turn on the switch to the cremation chamber?

The cremation chamber, one giant super oven essentially, had a few dials on the front and a digital readout: 1600 degrees.  We visited with pops one last time, now on a factory floor, which somehow seemed appropriate.  I gestured to the director that I wanted to turn on the machine.  Then a young hermano came out – his nametag sewed on his shirt read Oscar – gently offered his condolences, and showed me how to turn on the machine.

Mami went back inside to the waiting room.  Oscar lifted the table to match the height of the chamber door.  A last chance to grab at pops’ flannel shirt and pull him off the table before he went in, but I suppress the surprising and curious urge.  In my father went, and then I turned the knob and started the machine.

I’ve had some thoughts on “I should have been there” when he took his last breath.  I’m glad my brother and mom were there; my brother described how he had his palm on pops’ chest, counting his last breaths until there weren’t any more.  I knew it didn’t really matter as his mind was checked-out days before, but I still wish I had been there.  My brother kindly said the same, perhaps reading my mind.

And then I thought maybe my pops dying while I was away, on a volunteer job of all things, was his last editorial comment on my quixotic life’s work to “Make the world a better place.” El viejo mio was not an idealist.  All he knew, and respected, was whether you were working and providing for your family.  Actually, he also knew a lot about baseball, especially Caribbean baseball players, and most especially Puerto Rican peloteros.

The best of the best, of course, was Roberto Clemente.  Clemente was pops’ hero, as well as the hero to Puerto Ricans everywhere.  Two weeks before pops died I found a great documentary on Clemente’s life on ESPN sports.  I also found a segment on the 1971 World Series between the Pirates and Orioles; Clemente was voted MVP of that series.  I set-up my iPad on the table next to his bed and played both documentaries for him.  Ordinarily pops would only remain awake for a few minutes at a time, but once he saw Clemente on the screen and heard his voice, he was dialed-in and would remain alert for 30 minutes or more.

Clemente died while on a mercy mission bringing supplies to earthquake victims in Nicaragua.  This was typical Clemente; once he became a superstar he spoke up on civil rights and the needs of the less fortunate.  Years ago pops argued that it was Clemente’s fault: had he been home with his wife and kids, on New Year’s Eve of all nights, he would not have perished in the sea with his body never to be found.  Go to work, keep your mouth shut, don’t cause any problems and you might live to see another day.


I could understand why pops saw the world this way.  He grew up a homeless kid in a small barrio in Puerto Rico.  Food, a pair of shoes, a place to sleep – all of these things many take for granted were privileges he did not know on any given day.  He was not a gifted ballplayer like Clemente, whose beautiful game took him to the highest stage of play and afforded him some comfort.  Comfort matters like food and shelter, finding and keeping them, was all pops thought about.  That and his boys – and of course mami, he cared about her most of all – and her daughters.  If there was a dinner we asked for more food and there wasn’t any, pops would take the food off his plate and put it on ours.  

Mami was also a throwaway child, but she was the opposite of pops: always rebellious, always pissed off and protesting, always ready to tell everyone all about the injustices in the world.  If pops was pro”Commonwealth,” mami was defiantly independentista. If pops said the island would not survive without the United States, mami would say the island hasn’t survived with it. If pops spoke of the virtues of service in the Army, mami would bring up the Navy’s bombing Vieques.  For a time she was a single mother of three girls in Brooklyn’s barrio, and when applying for an apartment some landlords would look at her mixed facial features (Puerto Ricans come in all forms) and ask: Where are you from?  Mami would reply: “I’m from Planet Earth,” and leave to apply someplace else.  Always with an attitude, Mami has been unfailing in her support of my community development efforts (though she wishes I would also have a family of my own).  

That’s all for now.  Still processing.  Still don’t know which parent is right.  Love you pops. Gracias Michael y Patricia.  Thank you Joy.

pops army

Elvin Padilla Rodriguez, Dear Husband and Father, 1934 – 2016

Magic Theater Joins Tenderloin Arts & Education Community

Note to Self: If you can’t get promised arts district legislation passed or implement a local tax-capture finance district, get out of the way and let four brilliant women make magic happen.  In this case, the magic is the Magic Theater, which is coming to Turk Street as part of the 950 Market Street project.

This wonderful new addition to the Tenderloin’s local arts ecosystem was made possible by Loretta Greco, Magic Theater’s Artistic Director; Jaimie Mayer, Magic Theater’s interim Managing Director; Ellen Richard, former executive director at Magic and A.C.T., and Joy Ou, President of Group i and trustee at the venerable San Francisco Arts Institute and Global Heritage Fund.  After several years of a great TL arts and education coalition’s struggle for an arts presence at the site I can’t think of a more fitting name for our new neighbor than Magic. Group i and the Magic worked hard on crafting a community benefits program. The arts & eds groups are reuniting this week to celebrate the good news and welcome their soon-to-be new neighbor. 

The idea of 950 arts on the south side and a renovated 80 Turk Street – the new home of CounterPulse – directly across on the north side, was always thought of as a powerful way to draw lots of diverse people traffic to a long-devastated and particularly problematic block in the Tenderloin.  I’ve spent a lot of time on Turk Street over the past 7 years, have seen a lot of human misery and have listened to many stories.  Perhaps most memorable were tearful testimonies from Dalt Hotel residents about how difficult life on the block has been.  The people traffic 950 will bring, especially now with the addition of the Magic, will help the many who for years have felt trapped by fear and dread of walking out their front door.

Equally important, in my admittedly biased opinion, will be the powerful new addition to the built arts and education environment that our youth will know, feel at home in, be a part of, in their neighborhood.  Some day-trippers with a M – F, 9 – 5 understanding of the TL have difficulty appreciating what this means, but our youth and families who spend 24/7 in the ‘hood understand.

By the way, congratulations to all those who worked to make the Bayview Opera House possible. Fantastic.  It bears repeating: Developing bridge-building cultural resources in our neighborhoods is the ultimate creative placemaking.

But let’s not celebrate just yet. If you value the arts, and think the arts merit equal consideration as a valuable community benefit – a position that still comes under attack by those who see the arts as superfluous to the needs of poor people – then you should strongly consider signing-on as a supporter of the 950 project.

Please contact the Magic and Group i to support this important project.  For more information please contact Jessica Berg: jberg@bergdavis.com.

Keyser Marston arts space economics report

This is a technical report assessing the economics of the 950 Project as a real estate development. It outlines the public subsidies necessary and various strategies to achieve them.  The analysis and conclusions are based on industry standard affordable space economics, something the city of San Francisco chooses to ignore.  The choice to ignore this report’s recommendations, specifically and generally, resulted in 950’s demise and the city’s now famous scarcity of protected, affordable space.

This report on the economics of providing affordable arts space was also withheld – by the mayor’s office – from the city’s two arts departments: Grants for the Arts and the SF Arts Commission.

Keyser Marston arts space economics report

Tenderloin Arts Advisory & Friends, January 2015. Illegal arts funding in San Jose. Pumping up the Advocacy Volume with ABBA.

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The wonderful ensemble of the Tenderloin Arts Advisory & Friends, hosted by our friends at LINES Ballet.  January, 2015.

I hosted my last TL Arts Advisory & Friends on January 16th.  Whether the advisory continues or folds into Arts for a Better Bay Area (ABBA, see below!),  it’s time the arts advisory and advocacy builds an organizational infrastructure.   We heard from several dynamic speakers including Steven Anthony Jones of Lorraine Hansberry Theater, Terrance Alan of the California Music and Culture Association and Richard Livingston of the EXIT Theatre.  From Steven Anthony Jones we heard a charismatic call to organize, arguing that “the time is now.”  From Terrance Alan we heard an impassioned plea for San Francisco not to become one mega museum – an amusement park of charming cultural relics of yesteryear.  From Richard Livingston we heard a blunt testimony about the arts community being “ill prepared” to respond to the upcoming city budget negotiations.  Livingston went so far as to say the arts will never achieve an equitable outcome should they have to annually jostle for a place in the city’s general fund budget.  On this very important topic we discussed the decoupling of hotel tax revenues and Grants for the Arts, historically the city’s main source of operating funding for arts organizations.  We were advised by Tom DeCaigny, Director of Cultural Affairs, that the city’s attorney moved to decouple the hotel tax revenue from arts funding out of concern of potential legal exposure.

A lawsuit to challenge a percentage of hotel tax revenue going to the arts?  Really?  I suppose it’s possible – anyone can sue for anything in our system.  Years ago I worked with the Los Angeles Redevelopment Agency.  I tried to get more of the agency’s massive resources into the hands of small arts organizations, like the wonderful Tia Chucha’s Centro Cultural in the San Fernando Valley.  The pushback came quickly: I was told that funding arts groups directly was illegal under redevelopment law.

But hold on!  Not too long after, the Ford Foundation asked me to do a site visit to the fantastic MACLA – Movimento de Arte y Cultura Latino Americana.  MACLA received Ford Foundation funding for its outstanding work in bridging different groups and cultures in their neighborhood in San Jose, i.e. community building through the arts.  At the time MACLA was working closely with the San Jose Redevelopment Agency on a new facilities project.  I spent some time with SJRA officials to learn of their plans, and was very surprised that they involved significant operational support, the very kind the LA agency told me was “illegal.”

I asked the San Jose officials about this.  They responded “there’s always a chance we’ll get sued for any of our work by some tax-payer association of some sort.  That’s what we have lawyers for. We think the arts are important to invest in.”  Wow.  So the takeaway here, for me at least, is to keep a healthy skepticism when government officials offer quick dismals of proposals and programs being “illegal.”  There is often room for interpretation in the “law,” and what is truly the decisive factor is our leadership’s willingness, or lack thereof, to push the envelope.

In retrospect, it’s too bad there indeed wasn’t a lawsuit, one that came from the arts community when the link between the hotel tax fund and arts funding in San Francisco was severed.  The arts community was probably, as Richard Livingston said, ill-prepared to respond.   Note to ABBA: don’t readily accept “we can’t do that,” or “that’s illegal,” or, especially, “we’ve always done it this way” as answers.  Push our leadership to push the envelope.

Jammin’ with ABBA

On to good news! Arts for a Better Bay Area is here! Under the very capable leadership of Ebony McKinney and Lex Leifheit, organizing meetings are off to a great start.   To the extent my work has garnered support from many wonderful people in the arts and arts education community I ask that we all get behind ABBA’s efforts and give them a chance.  It will be a difficult, messy, confusing, imperfect process, but that’s the price we have to pay so we can’t be so easily dismissed by mayors and supervisors.  With perseverance we will get to a much better place as a community.

Judging from the diverse representation of people and groups I have seen in the organizing meetings held to-date, I see a great deal of promise in ABBA, and if they win, so will the arts community.

Want to learn more?  ABBA’s hosting its next meeting on Tuesday, March 24th.

CBOs Letters to Supervisor Kim and Mayor Ed Lee

Many of us in the community saw the tech-fueled tsunami coming.   While many individuals and organizations sought to stop and protest against tech companies settling in San Francisco, a collaborative of over 20 community based organizations chose to support Mayor Ed Lee and Supervisor Jane Kim in their actions to attract investment to mid-Market.  That said, we also were very clear in communicating our hope that this investment would be leveraged to the benefit of the community at large.  These letters describe this hope.  They were summarily ignored by Supervisor Kim and the mayor, both of whom have completely failed to capitalize on the city’s historic boom to the benefit of its marginalized citizens living in intensely concentrated poverty in the Tenderloin.   We were instead told: “Talk to Twitter.”

CBOs Mayor & Supervisor letter re facilities financing.

St. Anthony public finance support letter


Mercy Housing letter of support

Intersection for Arts support letter Lee

Intersection for Arts support letter Jane

Hastings public finance support letter


Arts vs. Social Services Displacement

Mami always railed about the neighborhood doctors wanting to prescribe her anti-anxiety medication.  In bombed-out, famously violent East New York Brooklyn it seemed like everyone was on meds of some sort, prescribed and otherwise.

Whenever the doctors wanted to write her a prescription for some chill pills she would, talking to no one in particular in the kitchen, say “Quieren darme pastillas , pero no voy a tomarlos!”    Maybe she should have – she certainly had a lot on her mind. Raising her kids in a very dangerous neighborhood that was burning down all around us, living in a substandard apartment that eventually got condemned by the city as “unfit for human habitation” (that’s what the big orange poster outside read in big block letters when I came home from school one day).  And even that nice lady who came with the clipboard from time to time, which always curiously caused us to hide the mini toaster oven – and papi’s shoes – in the closet; something about her made mami nervous. As kids we all took it in and still went out in the street to play, but for her life must have been very stressful.

But no to those damn pills! mami would say.   Instead she would put on her music from the island, and sing, every day, every night, for as long as I can remember.  Music was her therapy.  Music was her social service.

I’ve been thinking about the arts and social services ever since last fall’s supervisorial candidates forum on the arts, which was a bummer.  With the exception of one there were uninspiring presentations all around, and candidates arriving late and leaving early – clearly arts organizations are not a constituency to contend with.

I heard two points from District 6 Supervisor Kim.  First, city hall doesn’t know what the arts community wants as there is no advocacy voice presenting a coherent message.  In regards to the annual city budget process this is indeed true, and an exciting new movement – Arts for a Better Bay Area – is in the works to address that.

The second point Supervisor Kim made was that displacement of arts groups is a cyclical phenomenon, and that most groups eventually land somewhere.  This is arguably also true, though of course it begs several questions: What about the groups that don’t land on their feet?  Are we okay with cyclical displacement of arts organizations?  What if they’re displaced out of our neighborhood?  Should supervisors do everything they can to work against losing neighborhood arts organizations, capacity and resources to other districts?

Here’s another question: Would we casually accept this dynamic of cyclical displacement if we were talking about social service organizations?  That seems highly unlikely.  Maybe the arts advocacy community should think of embracing a new tagline: Arts, the original social service.   I bet that would score the arts more respect.   (I know mami would dig that!)

Candidate Tony Kelly offered what, to me, was the only inspiring comment of the evening when he said “yes the arts are notoriously difficult to organize, but that doesn’t mean we, as city leaders, should not look after their interests.”

The 950 Journey – Part 2

It is my hope the 950 Journey will be instructive to all current and future arts and arts eduction advocacy efforts.  It is a remarkable story that has involved many twists and turns.  Undoubtedly the media will only touch the surface, as in the recent JK Dineen article in the Chronicle.   The summary that follows is to help clarify what happened, with some commentary on my part.  After all, I was invited by this city to do community development through the arts.  Six years later I do have a few things to say.

The arts organization’s (950 Center) development team, the SF Foundation (previous top leadership, not the program officer) and Group i had several project development meetings in 2013 that led to a simple agreement: the SF Foundation would 1) keep up with quarterly development expenses related to the arts space, and 2) take point on raising the funds to build the building/get the campaign going. Group I would take point on project management and endowing an operating fund that would subsidize small-budget groups to ensure access to the Center. Group i would create this endowment based on the incentives the mayor’s office promised, i.e. additional value from additional height. We all knew that a debt free space wasn’t good enough – we would also need an operating subsidy. Group i retained a highly respected local philanthropy advisory firm to begin the process of structuring this endowment.

At the conclusion of these meetings, contrary to JK’s reporting, there was total clarity and agreement between the arts organization and Group i.   Group i never “insisted that the arts nonprofits pay 50 percent of construction costs.” It didn’t have to – the SF Foundation pledged to take leadership on this since the project – in addition to landing ACT’s great drama school for the Tenderloin – was conceived to serve groups that did not have that capacity.   For this same reason, i.e. the SF Foundation’s commitments, the arts groups never were “pushing for the developer to bankroll construction.” In fact there was just one “art group” – the 950 Center group – not “arts groups” at all.

I can’t explain why the promised support did not materialize. Not one agreed-to quarterly funding milestone for the arts program was met. I can report, however, that the arts group learned much later that the SF Foundation (previous senior brass, not the program officer) and the mayor’s office were engaged in talks that the arts group was not aware of. I was stunned (20 years of working with foundations, big and small, local and national, I’ve never experienced anything like this) and should have jammed on the brakes right then, one of the many times I should have. The deal we had with the SF Foundation slowly and mysteriously vanished, though the arts group team didn’t realize it at the time. Or perhaps refused to believe it. It seemed impossible this would happen. Years after the foundation said it was going to buy the properties, but then didn’t, while subsequently not returning emails or phone calls, I refused to believe there could be a second astonishing disappointment.  Not twice.

In the absence of special use legislation for the arts being introduced and passed, JK is inaccurate in his reporting that the city was willing to rezone the property. In fact, in June, 2014, Tom DeCaigny, Director of Cultural Affairs, reported to over 40 arts organizations that the mayor and Supervisor Kim were going to co-introduce the legislation last fall. This did not happen.

Perhaps rather than going by what city officials “felt,” (JK’s term) we all should have gone by what Keyser Marston, an objective third party economics/feasibility analysis firm highly experienced in real estate development, proposed in their September 13, 2013 report to the mayor’s office.   Their “Preliminary Draft Assessment of Arts Incentives Options,” provides a detailed, well, assessment of options to the city.

As it turns out Keyser Marston’s analysis of the economics validated Group i’s analysis. In fact, it calls for options that went far beyond what Group i proposed the city could do to help build the project. Unfortunately neither the arts group nor Group i knew that since the report was not made available until more than a year later.   It was lost, misplaced, forgotten, who knows.

It is also notable that Tom DeCaigny, one of the city’s two highest level arts leaders who had been participating in the city’s project meetings, was also unaware of the existence of this report. (I’m certain Kary Schulman, Director of Grants for the Arts, was also kept in the dark, though I was told she, along with DeCaigny, were closely involved in discussions.) This report could have been the ultimate blueprint for how to make projects like 950 possible.   The catch? The missing report called on the city to do much, much more than what it has done historically to support the development of affordable space.

The report also validates the advocacy letter from over twenty community based organizations that called, nearly three years ago, for Mayor Ed Lee and Supervisor Kim to utilize a tax increment strategy to help make projects like 950, CounterPulse and Luggage Store pencil.   The letter was ignored.

The mayor’s development director claims the project died “despite their best efforts.”  It is very troubling to think that misplacing or losing or ignoring the one third-party objective analysis that could have fixed everything constitutes the city’s “best effort.”   You best check on that best effort Mayor Ed Lee.

I can’t say if Keyser Martson’s analysis validated the city’s analysis because, it appears, the city goes by what it “feels.”   That famous breakfast meeting the mayor hosted, over two years ago, to tell the development community his shop was going to develop incentives for arts space development seems to have translated into “feelings.”

I collaborated a while back with a city hall veteran who shed some light on these municipal moods.  He told me the city looks at the St. Regis super luxury hotel and MoAD as its reference model, i.e. find a high-end/luxury project and tack on a cultural facility (whether the location makes sense for the cultural facility or not, and is a complete afterthought, or even sucks, design-wise). That is not “creative placemaking” Mayor Ed Lee, that is expedient mall making. In contrast, Group i positioned the 950 Center in a highly integral and prominent way. And it was going to go up in the ‘hood, not in a super high-end/luxury residential and commercial district.  In fact, Group i was pressured by city hall spokespersons to go super uber-luxury on both the 950 residential and hotel components to follow the St. Regis and Millenium Partners models. This, while Group i has been struggling at each step of the design and cost engineering process to keep residential price points well below the median home price and introduce a moderate price point hotel that would match well with the local fringe oriented arts scene.

Some outsiders (none in the Tenderloin) have questioned my allegiance since I’m close to Group i and its president.   To them I say my allegiance lies with Keyser Marston’s report.   (To my knowledge I don’t know anyone at Keyser Marston.)   If the city had adopted its recommendations 950 would have been well on its way and a new, fantastic and successful model would have been established to build additional cultural facilities, or affordable housing, or community facilities assets period, arts or otherwise.

A word from Banksy: “The most dangerous phrase in language is “we’ve always done it this way.” (Don’t know if Banksy really said that. No matter, it applies here big time.)

Speaking of a new successful model, there’s another developer with a prominent site along mid-Market (he asked not to be identified) that took keen interest in doing an arts facilities or artist housing project after learning about 950.  They approached Group i over a year ago.  Group i brought this developer to the city in the interest of working together to truly build a mid-Market arts district (remember those days?).  The mayor’s people wouldn’t agree to meet with them together (We all wondered, huh? But now I understand why). This other developer concluded that there wasn’t any proof – or even signs of proof – of legitimate incentives from city hall that would justify taking on the huge additional risk inherent in incorporating an arts project, so he’s going forward with an as-of-right project sans the arts.  Bummer…we could have been a contender.

As for Supervisor Kim, if she’s “disappointed” as she claims to be she should have showed up with legislation to help make it happen. The Tenderloin just lost $24 million (and this is the figure that was already committed before the capital campaign started) for thousands of feet of permanently protected arts space and a landmark arts education school that would have been at our kids’ front door. This happened under her and Mayor Ed Lee’s watch. And for that matter Grants for the Arts and the SF Arts Commission, though they, as has been explained, were effectively lost.

Another JK error, the SF Foundation did not file the paperwork necessary to establish a nonprofit to oversee the project.   This was done on the recommendation of a consultant who concluded the project was going nowhere until it had autonomy from the foundation. Group i, as did I, parted ways from this group once it became clear it was taken over by de facto city hall spokespersons and legacy ambassadors of “but we’ve always done it this way.” These spokespersons failed to name a successful case study when asked.  Despite this fact, the mayor’s office mandated Group i work with Team Status Quo, who were, in addition to their devotion to said status quo, too calcified to realize they were in fact arguing against years of arts/cultural equity advocacy and the most important how-to-build affordable arts facilities policy paper in the city’s history, or at least mid-Market’s history.  The city hall appointed spokespersons began to advocate that Group i go high-end luxury (like the aforementioned St. Regis/MoAD and Millennium Partners/Mexican Museum.) Group i, again, committed to make the project as affordable as possible with zero subsidy to work with, refused.

Team Status Quo clearly felt Turk & Taylor is comparable to the site for the future super-luxury Millennium Partners Tower/Mexican Museum, which will be surrounded by the Four Seasons Hotel, the St. Regis Hotel, the Paramount, the new $800 million (give or take) SFMOMA and Yerba Buena Center for the Arts.  (All that luxury surrounding the new museum – my fellow Latinos, we have arrived!)

On height. Everyone should understand 950 could only pencil if the project went over the existing decades-old height limit. The local TL arts groups knew that. That was always the case, barring significant public subsidy which we all know is not a possibility in this town. It’s nice to read my old crew at TEDP chiming in as arts promoters. Now, are they willing to back a project when it gets challenged for going above the zoning limit? If not it’s a meaningless, rhetorical promotion. There were already threats being made against the project going above 120 feet, regardless if the additional height bought affordable arts space or affordable housing.  Are we as a city willing to go taller to get affordable arts space or affordable housing?   Signs are mixed at best.  In the Tenderloin, signs are unequivocally bad.

This is one of the great errors I’m personally guilty of. When I began work on 950 back in 2010 I just did not know this town is aggressively anti-height, anti-density, regardless if that buys affordability. After hearing some of the static – and realizing the promised help with the campaign would not come – I thought perhaps we should proceed with a shorter project: a) A.C.T.’s landmark drama school, b) a black box – primarily for Lorraine Hansberry Theater, which I had been trying to land in the neighborhood for years – and c) some rehearsal and classroom space. But then I heard talk from a senior city hall official that the “temperature” wasn’t right for passing legislation that would help a “wealthy and white” institution, regardless of its plans to build an amazing school that would benefit thousands of underprivileged kids and adults.   Okay, how about small people of color organizations?  Not so fast, the little guys don’t have the requisite operating reserves and make funders nervous.

So, no to height, no to density, please no to poor people of color and no to wealthy white people willing to invest millions in building an arts school our residents can go to in their neighborhood (there is no higher “creative placemaking” than putting it in our neighborhoods). I mean, I confess, I didn’t know all this back when we started.  For real.

Something about this whole episode reminds me of the way city hall dealt with the payroll tax break. The community got duped into going after Twitter and their brethren for Community Benefit Agreements to fix terrible conditions resultant from decades of neglect – or systems intentionally designed and maintained – when the real focus should have been placed squarely on the city.   But corporations – good ones, slacker ones, it doesn’t matter – are easy targets for supervisors and city hall to hide behind with easily digestible rhetoric offered to the masses.

Back in 2013, when the 950 properties were up for sale, the mayor’s director of development told a 950 arts consultant “the winning bid had better not include an arts component.”   How odd, given that the mayor had just broadly announced to the development community his office would incentivize a major arts program at the site.  Now, with the media inquiring, he’s heralding the success of the “arts district” by pointing out a few groups, though failing to mention all but one he lists have a lease time-bomb ticking.   Just a few meetings ago – with a major arts organization sitting across from him bringing millions of dollars to the table – he inexplicably and unilaterally announced he’s stopping the 950 project and that the arts group is forbidden to raise funds.  I mean, what is this?

Well I guess we should have listened, city of San Francisco.  At its core 950 was about disrupting the intense concentration of extreme poverty in the Tenderloin.  As it turns out there is no interest – on the part of the city and the major nonprofits that systematically maintain it – in disrupting the intense concentration of extreme poverty in the Tenderloin.  The mayor is satisfied with it.  Supervisor Kim celebrates it.  Changing this status quo is, clearly, the kind of non-algorithmic, disruptive innovation San Francisco is profoundly uncomfortable with.

Cultural equity discussions: Summer 2014, San Francisco, California; Summer 2006, Houston, Texas.

This summer I got looped in the fighting over cultural equity funding for the arts – or the lack of it from the perspective of some – in San Francisco. Angry testimonies swirled on the ethersphere, arising out of a perfect storm of a very rough summer of arts groups’ displacement, shocking collapse, confusion, fear and anxiety. I also listened to angry testimonies at an emergency focus group meeting called after the dire announcement from Intersection for the Arts’ board of directors.  Shortly into the focus group I had the thought that I had attended this same meeting before.  That in fact I’ve been attending variations of these meetings for nearly thirty years now and that the testimonies of injustice, sadly, were somehow the same.

My first introduction to arts politics took place in Houston in spring, 2006. The wonderful Project Row Houses hosted a national conference on arts and community development. The Ford Foundation’s community development program director sponsored and asked me to address the assembly of mostly arts professionals on the basics of real estate development. Ford’s program director was trying to get the groups to understand basic real estate development principles so they weren’t constantly at the mercy of ever-changing market forces.

But a fight broke out almost immediately during the opening plenary session.  Several attendees stood up and spoke angrily about the inequity of funding in the arts community.  “The issue is not real estate related,” one participant declared, “the issue is the big houses (symphony, opera, ballet, big museums) always being entitled to the lion’s share of the money while the rest of us have to constantly justify and fight for our existence.”

What a welcome!  My initiation to the politics of arts funding had begun.  Her statement triggered other declarations of injustice that spread like wildfire throughout the room.   There was barely time left to get in a word about arts and real estate development.

I can understand the frustration. Did anyone see the recent 60 Minutes segment on the Metropolitan Opera in NYC?   General Manager Peter Gelb has embraced new entrepreneurial approaches to generating revenue, like broadcasting in HD in cinemas throughout the world.  These broadcasts have grossed nearly $60 million for the Met.

Still, the Met is one hundred million dollars in debt!  I can imagine the calamity if I tried to set up the chronically in debt Metropolitan Opera at the 950 Center for Arts & Education (soon to be reprogrammed and renamed – stay tuned!).   Perhaps we should send them to the Northern California Community Loan Fund for a financial work-up. On the opera’s shocking debt, Gelb offers:

Opera’s always in debt. From a business point of view, opera shouldn’t exist. I mean, it only exists because there are enough people who love opera and my job is to try to persuade them that it is necessary to change in order to keep the art form alive. Otherwise it will die with them.

A pretty sober and refreshingly candid response. Cultural equity follows cultural values, i.e. society digs opera and still finds it worthwhile to keep it afloat even though it is deep in an ocean of red ink and altogether not a sustainable business.

This is, of course, a bit simplistic.  And to be fair, the Met employs 3000 people while generating big tax bucks as an important part of NYC’s vital arts-based hospitality economy.  And maybe they’re providing great educational programs to thousands of youth like the SF Symphony does.  (Also, on a personal note, while I’m not an opera person I don’t mind some of my tax dollars going to support it if I know that a portion of that money is going to benefit company carpenters, set designers, writers and the line cooks and dishwashers at the restaurants across the street, i.e. my peeps.)

That said, it would be nice if we stop stomping on the little guys and asking them to hold to standards a major institution like the Met itself can’t meet. The 950 Center, as one example among many, has been subjected to many lectures about the necessity of being in the black and not requiring subsidy. (Nip and tuck here and there and we’re now doing better than the Met!)  The Tenderloin’s rich arts ecosystem of Luggage Store Gallery, EXIT Theatre, LINES Ballet, Cutting Ball Theater, Center for New Music, CounterPulse, and others are also critically important to the city’s arts-based hospitality economy and should be treated as such on equitable terms.

Yet here we are again. (And again.  And again.)  As usual there is no shortage of bomb throwers while rational conversation remains elusive.  I do know there are several smart and thoughtful individuals in the Bay Area arts community who are saying something structural is broken.  The arts community must take this up.  Maybe we should start with what Tom DeCaigny, Director of Cultural Affairs, SF Arts Commission, suggested – a data driven approach.  Whatever we do our goal should be to stop sniping at each other and start generating new dollars for the arts.