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Frankie, Veronica, George, John, Cookie, and of course Joanne of Jonell’s at Ellis & Jones. Many other Tenderloin old timers and residents. The problem-bar-that-had-to-be-shut-down crowd. Happy. Hugging each other. Celebrating. The powerful and positive life-energy of the 100K+ Women’s March was palpable everywhere in the Tenderloin as the crowds streamed into the neighborhood afterward. It was fitting to host the reunion at Jonell’s on that evening: Jonell’s run by three women who have been in the Tenderloin for ages and are not to be messed with.
A lot of the old 21 Club crowd has since moved over to Aunt Charlie’s across the street. I’ve moved over with them. Aunt Charlie’s has the same “All are Welcome” vibe that Frankie’s place always had. Joe and Barry, the barkeeps, have been there for decades. José and ninety-plus year old Bob, who has travelled the world, have been there for a mere 14 years or so.
That’s what I loved about Frankie’s. It didn’t matter who you were, whether you had money or not, lived in a SRO or Pacific Heights mansion. Your race, whether you did time (so long as there was no violence), who you slept with, none of that mattered. (It helped if you were a Giants fan though.)
During 21’s last few years the corner @ Turk & Taylor got really rough. Lots of drug trafficking and violence, culminating the night when eight people were shot outside. Frankie himself was a non-escalation Buddha master. He had a disarming way with people. The girls selling crack outside would come in sometimes to use the bathroom, but they never disrespected the place by trying to conduct business there. Frankie was easy with people and loved by everyone. He would only get irritated when the press reported shootings at the 21 that actually took place outside on the corner.
The new watering holes in the Tenderloin – the Black Cats, the Biig and the like – are fancy joints. I’ve walked by a couple of times and have seen zero Tenderloin residents hanging out. They’re “Uptown” establishments whereas 21 was, and Jonell’s and Aunt Charlie’s are, definitively Downtown.
Biig now occupies 21 Club’s notorious old corner. They discuss seasonal drink concepts with patrons. I don’t understand what’s so complicated; haven’t they heard of scotch?
I’m just kidding, I’ve had one wee dram too many – Lagunitas 16! – courtesy of two dear friends of mine. (I know what you’re thinking – I should be drinking Ron del Barrilito!) I shouldn’t be a snob or hater, there’s way too much of that going around. I have my own nostalgic inclinations that can lead to ignorance and intolerance for others. I’ll save up and stop by for a seasonal drink consultation one of these days, though I can imagine pops in heaven looking down at me and having a good laugh. Pops, and Brooklyn/Queens Mets fans (after losing their beloved Dodgers), were Schaefer or Rheingold Extra Dry people. (You don’t even want to talk about the Yankees.) I remember driving by Schaefer’s giant plant each day on the way to the factory in Greenpoint.
In the meantime, see you all at Aunt Charlie’s. I don’t care what the plaques say – it’s in Downtown Tenderloin, and we don’t need the federal government to tell us where we are, who we are, or how important we are.
Forty-two years at Turk & Taylor. Bon voyage Frankie.
I salute the organizers who pushed last year’s Proposition S campaign to near victory and in the process built a strong foundation on which the arts community’s resilience can grow, especially now that federal resources are being eviscerated.
63.71 percent and counting! Check-in with Arts for Better Bay Area to learn what’s next.
Dig if we will the picture, of safe and affordable arts spaces.
Or do we? What about if it takes, gasp, development? Building? Rebuilding? What if it is made affordable through a bump in a height limit established forty years ago? Or capital dollars to underwrite construction? Or leveraging private sector investment with, double gasp, tax dollars? Or dedicating city land? Or all of the above?
Will we protest “giveaways” for “greedy” developers? File specious CEQA appeals that blow-up the project’s affordability? Threaten to put the height increase – which would buy permanent affordability – on a ballot measure?
Will we spar over who’s deserving of the space? Visual arts vs. performing arts? “Native” groups vs. “Outsiders?”
I’ve been working on stabilizing and building new, safe, purpose-designed, permanently affordable arts space in the Tenderloin and mid-Market for seven years and have experienced this resistance in all its forms. In my former role as director of the Tenderloin Economic Development Project I helped facilitate and support the space needs of the Luggage Store Gallery, PianoFight, the Strand, CounterPulse, SF Camerawork, Women’s Audio Mission, and Hospitality House’s Community Arts Space. And there were big heartbreaks – Alonzo King LINES Ballet, Lorraine Hansberry Theater and Intersection for the Arts – all of which had a chance, especially Intersection. But those are all long stories I won’t get into here.
I’m now on the board of the Luggage Store Gallery/509 Cultural Center. Thanks to its founders Darryl Smith and Laurie Lazer, this landmark Tenderloin/mid-Market cultural institution has been providing affordable space for emerging artists for thirty years. Luggage Store’s gallery @ 1007 Market Street just underwent a major renovation as a part of the CAST initiative that acquired and also renovated 80 Turk Street, the new home of CounterPulse. How was this achieved? A combination of philanthropy, New Market Tax Credits and other proven real estate development methods. The protected space represented by these two organizations are, in effect, a desired civic goal achieved through a creative use of real estate economics and tools.
The greatest local struggle for new arts space, as many know, was for the 950 Arts and Education facility. Over 40,000 square feet of permanently protected space for the arts. How were we going to achieve this? Again, by deploying a number of proven real estate development tools to underwrite the space: tax-increment financing, New Market Tax Credits, height/density bonus, capital campaign. Through these tools the 950 project raised $24 million dollars before day one of a capital campaign. Real estate economics and tools used creatively for social ends.
As the story now infamously goes, San Francisco shuns this proven real estate economics model. Instead it takes the laissez-faire road and hides behind “community benefit agreements,” all of which leaves city hall completely off the hook and puts projects at the mercy of opportunistic politicians playing local groups with all manner of xenophobic, NIMBY sensibilities like: “Your housing is not for “our” people,” and “That arts organization is an ‘outsider.’” In the end, larger public interests like socioeconomic diversity, affordability and cultural resources lose big, and we are all the poorer for it.
I’m pissed – aren’t we all? We want our goodies, like affordable residential and commercial spaces, but we want them to come magically, or through vacuous “progressive” legislation that mandates, but doesn’t provide, a mechanism to achieve them. Mandated social goals devoid of real world tools… that’s living in laissez-faire unicorn land, not to mention a sure formula – literally – for making space less affordable for everyone, or altogether nonexistent.
Here’s an excellent, more technical but plain English translation of what works and what doesn’t to make space affordable: Inclusionary Zoning: The Most Promising – or Counter-Productive – Of All Housing Policies. An excerpt: New York City allows a 33 percent increase in building size. In contrast, San Francisco offers nothing at all to offset the financial encumbrance of its IZ requirements. I.E. We don’t get what we don’t help pay for. That holds true regardless of whether the developer is for-profit or non-profit.
We’ve been unwittingly undermining and fist-pumping against space affordability. We don’t like building, developing, or capitalism (unless we’re engaged in an annual or capital campaign). We don’t like “those people,” or more people of any kind, period. Maybe the next four years of assault from the reality-tv White House will force us to grow up and learn the basics on how space works. Otherwise our new POTUS will just kick up his heels and let us continue to do his destructive, polarizing us vs. them work for him.
Now, as a volunteer, I’m fighting alongside the developer of 950 Market Street project to protect its remaining affordable arts space committed to the venerable Magic Theatre. Where the larger arts center was undermined by our laissez-faire city, a dysfunctional SF Foundation, and a no-extra-height-or-tax-increment-dollars-for-arts-space attack by the usual crusty Tenderloin pillars of parochialism, the new attack is from a couple of opportunistic liars using a deplorable misrepresentation of Tenderloin history and abuse of the CEQA process as tactics.
And they’re doing it using public money! so its free or charge for them while killing housing and arts space affordability for everyone else. CEQA abuse is a wondrous thing. Their initial message to the developer: “Give us the Magic Theatre space or we’ll appeal your project.” Dearly beloved, we are gathered here to get through this thing called extortion. Here the “greedy” developer is being threatened by a couple of “progressives” demanding the developer displace a small and much loved nonprofit arts organization even before the space is built. (These guys are inventing a whole new kind of displacement!) The developer, by the way, who is effectively a community partner given their extensive and strong relationships here in the Tenderloin, continues to honor its agreement with Magic for the arts space and is holding its ground. Check that out.
Which leads to some good news: The 950 project just received its planning approval! There were moving testimonies from Tenderloin youth, affordable housing advocates, members of the LGBTQ and arts communities, and labor. There are enormous living-wage union jobs, housing, human and community development benefits involved, even with a totally absent city hall (our fault, really) contributing virtually nothing. There’s also the first new construction permanently affordable arts space to be built in the Tenderloin for nearly twenty years. That’s a big deal, and we’re going to fight to protect every last square foot of it while building more.
“Elvin! If it weren’t for the Tenderloin all these people would be living in Vallejo!”
A flash-argument broke out while chowing on some slammin’ phở at Turtle Tower on Larkin. Supervisor Kim had me at a disadvantage: I didn’t know where Vallejo was. I could only wonder: Do the apartments there have toilets?
“The city exploits the Tenderloin,” I responded, “to avoid paying for quality affordable housing. There are numerous quality SROs, but much of the housing is substandard, if it can be considered “housing” at all. Are you saying there’s no such thing as substandard housing in the Tenderloin?”
“No, there is not.”
And with that the brief argument ended as quickly as it began. There’s no debating with someone who thinks all the 8 x 10 rooms without toilets or sprinklers qualify as decent housing. Different, and ironic, world views I suppose: one’s money Upper East Side Manhattan and one’s no-money East New York Brooklyn. One prioritizes place over people, often accompanied by the argument that we can’t provide any better. The other prioritizes people over place, and wants to force us to provide better.
I’ve heard similar arguments on numerous occasions from various progressive friends: the Tenderloin is the last affordable neighborhood downtown is a common refrain. This always mentioned geographic factor overrides all other considerations, like healthy living conditions and environment. It makes me wonder what’s the great privilege in living downtown that the city would concentrate poverty so intensely – is it so we can be close to Macy’s?
Displacement in East New York Brooklyn
I can understand the emotional attachment to place at any cost. I grew up in a no heat or hot water, rodent and roaches infested apartment in East New York Brooklyn, one of the most violence-plagued neighborhoods in the country. Each night before I went to sleep I would rehearse in my mind the emergency evacuation sequence in case we woke up to one of the fires burning down the buildings all around us: I’d jump down from the top bunk, open the window, grab my kid brother, and climb out onto the awning over the convenience store beneath us. Then we would slide down onto the safety of the sidewalk below. I used to worry about the fall from the awning to the sidewalk, but always concluded that a broken leg would be better than burning to death.
Fires, gunfights, chains, bricks, bottles, knifes, gangs, heroin, bodies, human feces, needles. Fear was omnipresent. As a kid leaving in the morning on the way to school I would routinely have to step over someone to get out the front door downstairs (or jump, if there was more than one body). Coming home at the end of school, I remember wondering if there was someone waiting to assault me in the stairwell upstairs. I would start talking out-loud, in the deepest voices I could muster, with a make-believe companion to scare away would-be assailants. Strength in imaginary numbers.
But there was also Thanksgiving dinner, Christmas tree and presents, visits from kings on el Día de Los Reyes, weekend mornings café con leche, rolling Matchbox cars on the crooked floor, making fun of my sisters as they sat under the hair dryer with their rollers, mami’s awesome pollo guisado con arroz blanco y tostones, watching the Mets on Channel 9 with pops (the best), my brother and I celebrating when pops’ car got stolen and he would stay home, and music, always music: Tito, Celia, Hector, Willie. In all this there was a lot of love and happiness, and the nightmare around us was kept at bay.
So, when our place got condemned by the city as “Unfit for Human Habitation,” I felt a powerful sense of loss. Our place was dangerous and substandard, but it was home. We moved to a gigantic Section 8 project – Starrett City, the biggest in the country – built on a former landfill on the outskirts of East New York and Canarsie. Our high-rise apartment had heat, hot water, the toilets flushed, there was grass out front – real grass! – walking paths, and handball courts free of feces and needles. There were no roaches or rodents; no bodies to step over or assailants waiting at the top of the stairwell. No smell of burned-down buildings. In short, it was heaven. The old corner of Rockaway Avenue and Fulton Street vs. the new apartment in Starrett City was no contest.
I hear rumblings now of gentrification coming to East New York, which has always been considered impossible. From what I’ve read the neighborhood needs to go up to keep costs down, and that is a cultural problem for a place characterized by old 4 story walk-ups. Mayor de Blasio has proposed a major upzoning of East New York to add more affordable housing. Rebuilding East New York, like my old building that was constructed in 1910, would introduce over a thousand new affordable units, but would it still be East New York? Activists and preservationists are opposing upzoning/new development while offering in return nostalgia for the old days and the myth of a neighborhood that will be affordable in perpetuity. Today’s protectionism laying the foundation for tomorrow’s displacement.
But maybe I’m calling balls and strikes from 3000 miles away; even worse than what Bay Area progressives do to the Tenderloin. Best I shut up before my old ENY homies come find me at farmerbrown’s and bust me upside the head.
Segregation and the Intense Concentration of Poverty in the Tenderloin
I’ve heard Supervisor Kim say on a couple of occasions the goal is to make the TL a stable low-income community like Chinatown. I don’t know if Chinatown is a stable low-income community, but in this we are in agreement. It will be impossible, however, for the Tenderloin to achieve this socioeconomic equilibrium until the Department of Public Health (DPH) and Human Services Agency (HSA) treat the Tenderloin and Chinatown on equal terms, and on this measure we’re not remotely close.
This, of course, would require an advocacy that does not exist in the Tenderloin. Unlike Chinatown, without DPH and HSA programs, many Tenderloin SROs would be economically obsolete and sit empty. And if our goal is historic preservation of buildings at any cost – even at the cost of constructing new high-quality affordable housing – then we won’t push back against DPH or HSA. Our policy is poor people – or, more specifically, the government funding they bring with them – in the service of buildings, rather than the other way around.
If President Obama and HUD argue that neighborhood poverty at or over 40% constitutes “Extreme Poverty” and segregation hurtful to poor people, why are they funding a city with placement programs that far exceed that number in the Tenderloin? (Mere “High Poverty,” by the way, is considered 20% or higher.) In the Tenderloin, and adjacent blocks in mid-Market, the number exceeds 90%. Indeed, given all the literature dating back to William Julius Wilson, the War on Poverty and the more recent research on Social Determinants of Public Health from major public health foundations, a strong argument can be made that the worst offenders to the public health interest of the Tenderloin’s poor have been the San Francisco Department of Public Health and the Human Services Agency.
Since Supervisor Kim’s office tried to prevent DPH and HSA statistics from being made public (see Housing, page 24) it’s no surprise she would not challenge this strikingly inequitable status quo that renders her comparison to stable low-income Chinatown completely absurd. How would she challenge DPH and HSA? – by telling them to take their bean-counting bureaucratic boots off the neck of the Tenderloin. The Tenderloin doesn’t belong to city hall to exploit. (Though through its Master Lease Program, much of the Tenderloin is de-facto controlled and exploited by the city; effectively privatized public housing, without the toilets.) Or, if parity with Chinatown is truly Kim’s goal, she could tell DPH and HSA to apply the same placement practices to both.
Who’s Afraid of the Black Cat?
Now that I’m back in the neighborhood I’m noticing what appears to be a conversion of SRO hotels back to tourist hotels. Heretofore illegal but now going unchallenged (perhaps the new owners have the right connections to avoid legal action being taken against them), it will be interesting to see if and how this trend continues, and the impact it will have on the city’s 90%+ placement number. If the result is more income-diversity, local spending on small businesses and a drop in the concentration of poverty, this would be a good development for the Tenderloin’s poor. Maybe we can get the placement percentage down to a mere, say, 45%; that still qualifies as egregious, unhealthy segregation per government and public health policies, but would still be far less oppressive for the Tenderloin’s poor.
How about Tenderloin low/moderate income entrepreneurs? The conversion back to hotels, if this is indeed happening, could be a benefit or threat. Many low/moderate income entrepreneurs took a giant hit and went out of business years ago when hotels converted to 100% residential; hundreds of low-cost lodging rooms that catered to low-income travelers were lost. These low/moderate income travelers patronized the Tenderloin’s small businesses. Maybe some of these travelers will come back now as a result of these conversions. Or perhaps we’ll see another wave of extinction as more mom & pop New Star Chinese restaurants and Lafayette Coffee Shops give way to sleek and high-end Black Cat “Uptown” establishments.
Ideally, the extensive inventory of ground floor commercial space owned and/or controlled by nonprofits can be made available at below market-rate rents to displaced low/moderate income entrepreneurs. That can be tricky, however, as some affordable housing developers don’t see providing affordable commercial space as part of their mission (not unless they’re subsidized for it, like they are for residential units). Hopefully the Tenderloin Neighborhood Development Corporation (TNDC) will, given that the organization’s name suggests a holistic focus above and beyond affordable housing. (Perhaps TNDC’s opposition to public funding for neighborhood-serving facilities and improvements was an aberration.) Between TNDC, the Tenderloin Housing Clinic, Mercy Housing, Community Housing Partnership and Chinatown Community Development Corporation, there’s plenty of commercial space that arguably should be protected. Will they help?
Back to the quiet conversions – like the Warfield Hotel at Turk & Taylor for example, or the Adrian Hotel on Hyde – the historic preservationists at the Tenderloin Housing Clinic must be happy. Whether facilitated by poor people’s or tourists’ money, the buildings remain intact and the gentry are visiting. A return to the glory Uptown days of yesteryear. They’re drinking Champagne at the new high-end bars after indulging at the new luxury spas, i.e. the kind of community serving retail the Tenderloin Housing Clinic advocates for in Community Benefit Agreements with market-rate real estate developers. The socioeconomic chasm between rich and poor in the Tenderloin may be worse than ever, but the party is on.
I’ve heard concerns from Southeast Asian community activists (all API children of refugees, none progressives) that hotel landlords have been harassed to evict Southeast Asian moms & pops to make way for the Uptown Black Cats. But I don’t buy that: Taking poor people’s Supplemental Security Income to keep the 8×10 rooms/one-sprinkler-per-floor buildings economically viable, while squeezing out low/moderate income moms & pops on the ground floors to make room for Champagne and caviar joints more befitting the Uptown profile, would constitute the most insidious and disgusting example of poor people exploitation and gentrification ever witnessed. Besides, I’m sure HUD and/or HHS would have investigated.
Maybe once upon a time it was about protecting poor folks, but at some point the focus in the Tenderloin turned a corner and became principally about protecting nostalgia, not the people. I know from experience the vast majority of poor folks in the Tenderloin care little, if at all, about the history stuff or plaques; they’re just fighting to get through the day. If it were about the people, we would not accept the extreme concentration of poverty. And we would go up, give them better housing, fire sprinklers, and maybe even toilets, like I suspect they have in Vallejo.
I’m not suggesting the Tenderloin goes high-rise like Starrett City. I’m suggesting we rebuild obsolete buildings – and go higher in the process – that haven’t served the needs of poor people or the city for a long time, except maybe to save an expedient buck in the short run. In some instances we may want to rebuild entire blocks (we’ll take a look at an example later). Put the needs of the people, not the buildings, first.
Despite the harsh environment I come from, I’m the beneficiary of a loving family and privileged education; I’m an incredibly lucky person. Still, given the history of substance abuse and mental illness that runs in my family, and maybe a little “residual stuff” carried over from childhood (you never forget the fires, the smell of burned buildings, the fear), I occasionally wonder about the possibility I’ll someday wind up in a placement program of some sort, somewhere. If that day comes, I hope I’m nowhere near the likes of SF public health/human services officials or progressive, status-quo protecting politicians that have such complete disregard for the welfare of poor folks and decades of public health research.
And I’ll especially keep a lookout for nostalgic preservationists who would exploit me – and what little money I have – for their own poverty theme-park creation purposes.
Ed Lee’s laundry list, as San Francisco Foundation CEO Sandra Hernandez dubbed it, went by the official name of Central Market Economic Strategy (CMES). Not without its flaws, CMES (central-marketeconomic-strategy-november-2011) attempted to lay out a comprehensive road map to revitalization without displacing existing low-income residents. It was developed after an exhaustive outreach effort and extensive vetting among mid-Market stakeholders and government officials.
CMES was recognized by the American Planning Association for its 2012 Grassroots Planning Award. Not bad props. From what I observed during the marathon development of CMES, this was recognition well deserved. Any and all community gathering spaces were used by organizers to connect with neighborhood residents, ask lots of questions and solicit input. I participated in many meetings in my capacity as Tenderloin resident and director of a neighborhood community development organization.
As far as I can discern, three things happened after this herculean effort. First, there was no leadership from the mayor to move the multiple agendas forward. Second, there was no money to move the multiple agendas forward. Third, tech showed up and the mayor’s office effectively said: “What CMES? May The Tech Be With Us!”
On leadership, it only fair to acknowledge this was a very ambitious plan to take on. Numerous entrenched interests were being challenged, or at least questioned. Statistics on placement programs were being made public for perhaps the first time, triggering at least one attempt to censor the CMES. One prominent nonprofit ED went so far as to accuse the mayor’s staff of “class warfare.” That’s a tough one, and a common paradox in progressive San Francisco: You listen to poor people, you respond to poor people, you’re accused of being anti-poor people. What were plan organizers responding to? Many testimonies from Tenderloin and nearby South of Market residents pleading for better housing conditions and cleaner, safer streets.
The failure in leadership was also, in part, our fault, when we opened wide and swallowed whole the Community Benefits Agreements approach the mayor and local supervisor laid before us after passage of the payroll tax exemption. The larger, big budget, veteran mid-Market nonprofits, afraid or unable to challenge city hall because of their contracts/funding, raced to get in front of the line for the tech company handouts. These large nonprofits squeeze out smaller nonprofits – especially those that focus on families and youth – even now as discussions with local builders/developers are ongoing. One ad hoc assembly of groups, “Market Street for the Masses,” unwittingly became laissez-faire city hall’s best friend during this crucial time. As one colleague who went to one of their meetings put it years later: “We gave city hall a Get Out of Jail Free Card.”
Let’s Not Go Dutch
The CMES’ had a task force: the Central Market Partnership Funders Collaborative. As a participant I accompanied staff on the mayor’s magical mystery tour of imaginary Mid-Market messiahs (couldn’t resist!). The Collaborative’s goal:
Launch a collaborative of foundations, corporate donors, social investors, and other private sector and commercial partners that will contribute and align funds to support projects outlined in the Central Market Economic Strategy.
We met with directors of several local foundations. One especially respected figure in Bay Area philanthropy reviewed the CMES and concluded: “You’re looking at $100 million minimum; local foundations don’t have that kind of money. Float a bond.”
They also famously said: Talk to the SF Foundation; while they don’t have that kind of money either they do have access to a network of immense wealth. But Sandra wasn’t buying it, at least not without the city demonstrating it was going to put some skin in the game first.
Something along the lines of this might have gotten some traction: This is our program, to implement it’ll cost about $150 million. We’re getting things started with $50 million by floating a bond. We challenge and expect philanthropy to match with $50 million, and the private sector to match with $50 million. Then we can work toward equitable development in the face of the tech boom.
Instead, the message was: Here’s our plan, please pay for it. The neighborhood was left with city hall, philanthropy and corporate sectors all looking at each other and saying “You go first.” (With the very notable exception of the Rainin Foundation.)
This was, in my view, the great failing of city hall on the eve of the city’s launch into a massive and inequitable period of growth. It never presented a challenge; it instead raced to the back seat. I’ve spoken with San Francisco real estate dynasty heiresses and young venture capital tycoons about their civic duties and they’ve all asked the same question in response: Give back to what?
On this point I often think about one conversation in particular. It was with Daniel Lurie, the Founder/CEO of The Tipping Point Community (TPC). TPC gives away all the funds it raises each year, a different approach to conventional foundation grantmaking. After hearing the city’s pitch, Daniel expressed skepticism about investing in the area. “Who are your changemakers? What will be different? I don’t see new thinking or new models of anti-poverty programming in the Tenderloin. What’s there has been there for a long time, and the intense poverty remains unchanged.”
It’s good to see, now years later, the Tipping Point Community investing in Larkin Street Youth Services. If Daniel is reading this, might I also recommend the Vietnamese Youth Development Center? The Asian Pacific Islander community in the Tenderloin has few voices representing their needs or rich and important legacy in the neighborhood; in fact, some consider them an inconvenient presence in the quiet but methodical campaign to upscale/gentrify the TL’s commercial businesses. (333 beer is out, molecular cocktails are in; alas, the Asian community is not down with the Uptown. But you can help one family here.)
The IFD Fizzle
Tax increment financing was considered as one of the ways to pay the tab for the central-marketeconomic-strategy-november-2011. It’s tough trying to sell something with the moniker Infrastructure Finance District, or IFD. IFDs are a way to capture the increase in local taxes so they can be reinvested in an area over a prescribed period of time. The strategy was straightforward: We all can see the surge of investment in mid-Market coming and the commensurate surge in taxes collected by the city. This is a way the city – having successfully attracted tech companies to the area – can reinvest and leverage those extra gains in the local community. Everybody wins.
As director of the Tenderloin Economic Development Project I lobbied for the passage of an IFD. I made the rounds to my neighboring community organizations, many of which signed on, and gave a tax-increment 101 presentation to an audience of residents and other stakeholders at the Tenderloin Futures Collaborative, which at the time was facilitated by beloved Tenderloin legend Reverend Glenda Hope. But the IFD campaign fizzled. I could not get the support of the Tenderloin Neighborhood Development Corporation (TNDC), the Tenderloin’s largest landlord. IFDs did not provide funding for new construction affordable housing, a deal killer for TNDC.
This struck me as unfortunate for several reasons:
- The Tenderloin’s housing stock is already affordable and protected, much of it owned and managed by TNDC.
- TNDC residents would have been beneficiaries of neighborhood improvements.
- IFD legislation did allow for funds to be used to build replacement housing, which was an opportunity to rebuild derelict SRO hotels like, say, the notorious Warfield Hotel on the corner of Turk & Taylor, or the entire eastside of 100 Taylor Street for that matter (built for the housing needs of the late 19th century), into high-density, high-quality, mixed-income housing two blocks from the Powell Street BART/MUNI station. The Warfield Hotel’s historic plaque does nothing for poor people or the city’s twenty-first century urgent need for more housing.
- In 2012 we voted for Proposition C to create a $1.5 billion dollar trust fund for affordable housing, so a much-needed war chest was already moving forward for housing. In comparison, nothing – zero – was available to invest in community facilities: homeless shelters; arts & education centers; recreation centers; parks; a new neighborhood YMCA; an SF community college campus; satellite libraries; streetscape improvements to improve public safety at several notoriously dangerous intersections; all these investments in community could have been paid for and/or catalyzed by an IFD.
It should be noted that California based affordable housing developer Mercy Housing, directed by Doug Shoemaker, said yes. Also saying yes were:
All Stars Project, San Francisco Bay Area
Alonzo King LINES Ballet
De Marillac Academy
Friends of Central YMCA
Intersection for the Arts
Kunst-Stoff arts & Kunst-stoff dance company
Lorraine Hansberry Theater
Luggage Store Gallery & 509 Cultural Center
North of Market Tenderloin Community Benefit District
Northern California Community Loan Fund
Shih Yu-Lang Central YMCA
Tenderloin Boys & Girls Club
Tenderloin Economic Development Project
UC Hastings School of Law
Vietnamese Youth Development Center
A pretty impressive line-up – arts, affordable housing, education, public health, business, nonprofit lending, youth development, social services – all represented here. I received no answer from Community Housing Partnership, though their lead organizer James Tracy tried to help connect us.
I also, unfortunately, couldn’t get a hold of Hospitality House to add them to the list. Given that mid-Market/Tenderloin is the epicenter of San Francisco’s homeless population it would only be appropriate to dedicate a portion of captured tax funds to invest in whatever facilities could help meet their needs. I asked Hospitality House for their expert counsel on what kind of facility would make sense. Instead, each year is a repeat of the same dynamic: an extreme shortage of beds translating to an absurdly long waiting list. And each year our response seems limited to service providers’ annual operating budget add-back requests that keep us as indentured servants and do nothing to change the status quo.
Perhaps at some point this status quo just became our norm and we no longer even see or question it… a kind of collective sleepwalking. Except, of course, for poor families in the Tenderloin, they definitely still notice it because they have to live with it. They don’t get evenings and weekends off. There’s little “active” left in the “activist,” it seems to me. We are lulled to sleep by bi-weekly paychecks and the droning sound of the BART train at the end of each weekday as we head back to our comfortable homes in neighborhoods where the concentration of poverty in the Tenderloin is far, far away.
Supervisor Kim wouldn’t support an IFD; perhaps she was getting pushback from other sources. I remember her saying we had to be careful about improving the neighborhood, which pretty much sums up her entire tenure as district supervisor. I don’t get how building neighborhood arts centers or parklets or a community college campus are a threat against the backdrop of an enormous inventory of protected housing, much of which, by the way, is dangerously substandard and in need of rebuilding. A perplexing Progressive Paradox – over five years living and working in the Tenderloin and I still don’t see the progress in Progressive.
While Mayor Ed Lee initially championed an IFD only to deliver a disappearing act instead, I often think the IFD campaign failure is largely on me. I made the naïve assumption that delivering a well-crafted letter – co-authored by the Tenderloin Economic Development Project and the Northern California Community Loan Fund – signed by numerous and influential stakeholder organizations would grab the attention of city hall and elicit a response. It doesn’t work that way; what was needed was an organized political campaign – a machine – that worked the chambers in city hall. I was a newbie and didn’t know how to work the politics. One dude getting his neighbor nonprofits – however impressive they may be – to sign a petition doesn’t cut it.
Witness what Arts for A Better Bay Area is doing to build support for Proposition S, a super important moment for restoring arts funding and improving services for homeless families. That’s how you bring important initiatives from concept to reality.
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.
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.
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.”
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.