Ten for the Tenderloin
The “B” word has officially surfaced here in the Tenderloin/mid-Market. According to J.K. Dineen, resident real estate authority of the San Francisco Business Times:
“More than $1 billion in capital has poured into Mid-Market, a neighborhood that has struggled with crime and vacant storefronts for decades. There are currently about 2000 new residential units under construction in the neighborhood as well as new corporate headquarters for Yammer, Dolby, Twitter and Square.”
One billion dollars! What a fantastic opportunity for our long-struggling neighborhood. What can be done to reinvest some of these dollars in the local community? Thus far the city has been largely silent, perhaps caught off guard by the velocity of the boom. Thus far all I’ve observed in the Tenderloin are cuts to vital youth programs and a big increase in drug trafficking outside my front door as Market Street dealers are being pushed north into our neighborhood.
We do have the Community Benefit Agreements with the tech companies moving in. But there’s no real money here. Supervisor Kim acknowledges as much, offering that it’s the “spirit of community and good corporate citizenship” that’s the real payoff.
Recently I’ve been doing presentations on the increment capture strategy based on the formation of an Infrastructure Finance District (IFD). Infrastructure Finance District is a terrible sounding term and doesn’t exactly roll off the tongue, so we decided to use Tenderloin Funding Capture District instead. I’ve been using the “Twitter Building” as a case study in presentations to community stakeholders on how much money the city could capture and reinvest locally. While the experts debate interest rates and credit enhancement schemes our analysis showed this one property alone could generate on the order of $15 million for a Tenderloin Funding Capture District.
But perhaps it’s been a mistake to focus on the capture mechanism. Perhaps we should get back to the principal of the matter: 1) the Tenderloin is an extremely disenfranchised community in large measure because of city policies and practices, 2) more than a BILLION DOLLARS has been invested in the immediate area since the payroll-tax exemption legislation passed and 3) the city now has an unprecedented opportunity to reinvest a portion of the billion dollars to help underwrite community development projects in the Tenderloin.
Lots of folks in the neighborhood, the art community, youth program service providers and others feel they were misled to believe Community Benefit Agreements would make the difference. It’s unfortunate they were not given a clear explanation of what to expect. But there’s still time to set the record straight and make good on promised benefits. As I see it:
1) It’s the city that has the responsibility and obligation to improve life for its citizenry.
2) It’s the city that is reaping most of the financial benefits from the payroll tax exemption – a very good thing by the way!
3) With more than $1 billion invested, the city now has an ample and unprecedented ability to reinvest a portion of these benefits locally.
What’s a fair portion to reinvest? How about, say, ten percent? Our new campaign?!
TEN PERCENT for the TENDERLOIN!
If we go by J.K.’s $1 billion that gives us $100 MILLION DOLLARS. This would be about $99,800,000 more than what we’re looking at from Community Benefit Agreements. With real resources we could achieve a more equitable transformation. We could invest in some good stuff like:
- child care centers
- recreation facilities
- art & education centers
- improved public transit facilities (I live around the corner from Civic Center BART station – about as dreary and depressing as they come)
- improved low-income housing
- cleaner, wider, nicer sidewalks
- dignified facilities for homeless individuals to get care and services
- public safety
- finally getting a good pizza joint in the neighborhood (okay – maybe conflict of interest on this one)
In each of these areas there are many examples where the availability of public funding to leverage private funding determines whether a project happens or not. For example, on low-income housing, the owner of the notorious Warfield Hotel at Turk & Taylor has been calling me repeatedly over the past two years asking for help finding a buyer. How can the city incentivize quality developers to buy and improve this derelict property and put it under quality management? Answer: The city can help leverage dollars the developer would bring to the table. How can the city help pay for it? By capturing ten percent of that one billion dollars pouring in just blocks away from the Warfield Hotel. Otherwise there’s no solution in sight and this property, along with other similarly derelict properties nearby, will remain squalid for years more.
In the end, this remarkable boom is a direct result of the payroll tax exemption the mayor championed. Whereas many cried gentrification and protested “tax breaks for millionaires,” many of us supported the mayor in this important effort to attract investment to a devastated commercial corridor at the doorstep of an exploited community. We believed we could all win. Some of us still believe.
Judging from the congregation of dealers outside my front door – a very bad situation for the Cambodian family-run bakery there – it’s unclear how the Tenderloin will win, if at all. But there’s still time for the city to act with the sense of purpose and urgency it very effectively used to keep Twitter in the city. That was a good deal for the city, certainly, but one that has not reached its potential to benefit our immediate neighborhood. Not by a long shot. We know Supervisor Kim would enthusiastically support the mayor taking bold action on behalf of equitable transformation. And San Francisco owes the Tenderloin – big time.