Page 1



Reforms Aim at Saving Shelter Beds p.3


San Francisco

Muni Drivers Try to Shift The Bulls-Eye p.3


Run Down? Pay Up. p.4 University of California Invests $53 Million in Two Diploma Mills Owned by a Regent p.5

Texas Oil Company Pumps More Cash Into Delay of Global Warming Law p.5

Mental Health Budget Takes a Hit p.5

CCA vs. PG&E: Public Power Battle in Your Mailbox p.6




It was fall 2008 and the holiday sales rush loomed, Cortney Balzan recalled. That’s when he said he felt forced to confront one of America’s largest retailers and warn it that it might be misleading its customers.

‘Queer the Census’ Efforts Building for 2020 p.7 Why I’m Worried About This Census p.7

Crackdown Checks Fake ID Vending p.7


Buying a Gem From Macy’s?

HIV, AIDS Gap Widens Between Blacks and Other Ethnic Groups in East Bay p.8

Ask an Environmentalist p.8

You might want a second opinion

Bayview Sewer Plant Raises Billion-Dollar Question p.9








The property’s interior is beautifully restored. The smell of fresh paint wafts through the air. Its walls are all exposed brick; the third-story floorto-ceiling windows overlook Market Street. Outside, it’s barren. Rhoades acknowledges that the street scene is “derelict,” a haven for crime and homelessness. It may be ready to lease, but Rhoades is in no hurry to fill the David Rhoades space — or any of the other eight buildings he has acquired on mid-Market over the past five years. He has been waiting for the right moment to bring San Francisco’s depressed central boulevard back to life. And he’s prepared to wait years more. “If we rent now, we’ll get locked into a 10-year lease with some terribly low rate,” said Rhoades, co-founder of Urban Realty, a commercial real estate business with financial backing from a $40 billion Connecticut-based lender. “We’re waiting for the area to start to really pop. Then we can get someone in that’s much higher-end.” Urban Realty’s eight mid-Market properties represent 62 percent of the assessed value on the troubled block between Fifth and Sixth streets. When the company finally opens all that commercial space, it will have gone a long way toward the redevelopment of San Francisco’s once-proud commercial spine, attracting investment and spurring more construction.


n 1976, Jimmy Carter devised a Misery Index to measure the level of economic hardship Americans were facing during that era’s recession.

The index tracked the rates of inflation and unemployment added together, and during Carter’s tenure it reached 20 percent. Today, as the nation is gripped by another, deeper recession, New America Media created an expanded Misery Index to gauge the hardships experienced in California, which is feeling some of the most painful effects of the economic downturn. see full story on page sixteen




istorically, many laundromats have provided cover for seedier operations such as money laundering, gang violence, or more recently in Oakland, marijuana peddling. But a familyrun shop in the Richmond District is trying a far different experiment: free Wi-Fi and career counseling. Amybelle Capule Amybelle Capule, a slight, 5-foot-tall Filipino American in a business casual suit jacket, dispenses free resume advice amid the change machines and dirty clothes at her coin-operated laun-

see full story on page two

Athletes Vie With Birds in Golden Gate Park’s Environmental Turf War p.6

S.F. Pride at 40 p.7

full story begins on page eighteen

avid Rhoades surveys his 2,500-square-foot retail space behind the boarded-up storefront at 925 Market St., on the mostly abandoned block just west of Fifth.

Mid-Market Mogul p.2


n the next six months, local officials and a consortium of private developers will begin to finalize legal papers for Treasure Island’s future as a high-density eco-city. Renderings of the gleaming towers, parks and gardens suggest harmony and community.

Getting Schooled in ‘Post-Racial America’ p.10 Journalist Spins Riveting Talk of Murder and Intrigue p. 10

Darius Anderson

Yet the promise of an urban Treasure Island, one of the most complex and risky redevelopments in San Francisco’s recent history, has for more than a decade been wrapped up in a process driven by power and influence. The mayor got near-total control. Political friends got plum jobs and contracts. Critics were exiled. City and state conflict-of-interest laws were waived. Independent inquiries and the will of voters were nakedly rebuffed. Big projects naturally draw big money. Treasure Island, currently slated for $6 billion in residential and commercial development, was an unusually large prize. But companies with political and social ties to two mayors won the two major projects related to the redevelopment — with the master development drawing only one serious bid. The winning bidder was a group that included Darius Anderson, an influential Democratic Party lobbyist and fundraiser for both outgoing Mayor Willie Brown and incoming Mayor Gavin Newsom. One partner was the Miami-based homebuilder Lennar, then the secondlargest in the nation, also now leading the concurrent $7 billion Hunters Point Shipyard redevelopment and the conversion of the former Mare Island Shipyard in Vallejo. Other companies, backed in part with public-employee pension funds, have also joined the team now known as Treasure Island Community

see full story on page fourteen

Berkeley Scientists’ Next Green Energy Alternative: Stomach Bug to Biofuel p.9

see full story on page twenty four

Summer Events for You and Yours p.10 Playwright Octavio Solis: ‘Shake These People Up’ p.11 Amid Budget Cuts and Institutional Neglect, San Quentin’s Arts Education Volunteers Keep Working p.11

What if? — Haiti p.12

Stranded p.12 Gulf Spill Puts Conservation in Spotlight p.12 Chinese Currency to Rise Against Dollar p.13

Russia’s Medvedev on Silicon Valley Reconnaissance Mission p.13 News You Might Have Missed p.13 Of Course Banks Resist Reform, MIT Professor Says p.13 At Amybelle’s Wash & Dry, Clean Your Clothes and Work History p.14

Your neighborhoods p.15 Education Cuts Hit Poorest Schools the Hardest p.15

Poetry Chains! p.15 Better Ways to Measure Tough Times p.16 ‘Socially Responsible Outsourcing’ Takes Tech Jobs to Developing World p.17 Cheap Phone Calls Hang in the Balance in Tug-of-War Between FCC, Cable Giants p.17






San Francisco’s adult homeless shelter system is seeing fresh attempts at reform on two fronts: one through the settlement of a lawsuit, the other through new legislation.

Local biotech researchers may have found a way to avoid using essential food crops for fuel by genetically modifying a bacteria most people associate with human food poisoning.

Octavio Solis’ critically acclaimed plays have been produced around the country. His most recent work, The Pastures of Heaven, is now in production.

Any artist who promises to end racism in about an hour will earn his fair share of cynics. Comedian W. Kamau Bell was well aware of that when he launched his solo comedy show.

On a Friday night in March, the hip boutique Tweekin Records hosted an unusual gallery opening, featuring art created by inmates at San Quentin State Prison.

keep reading on page three

please continue on page nine

read it all on page eleven

read more on page ten

page eleven for the rest

Macy’s Sells Rubies ‘Filled’ With Glass p.18

Sit, Lie, Get Deported p.20

2 SF Public Press

June 22, 2010 //





How Urban Realty quietly cornered San Francisco’s troubled main drag

David Rhoades, 61, co-founder of Urban Realty, surveyed 925 Market St., one of his eight empty properties on Market Street between Fifth and Sixth streets. Urban Realty's property represents 62 percent of the assessed value on the block.


avid Rhoades surveys his 2,500-square-foot retail space behind the boarded-up storefront at 925 Market St., on the mostly abandoned block just west of Fifth. The property’s interior is beautifully restored. The smell of fresh paint wafts through the air. Its walls are all exposed brick; the Story: third-story floorAngela Hart to-ceiling windows // Public Press Photos: overlook Market Monica Jensen Street. Outside, it’s // Public Press Graphic: barren. Rhoades Cody Rishell acknowledges that // Public Press the street scene Panorama: Mike LaHood is “derelict,” a ha// Public Press ven for crime and homelessness. It may be ready to lease, but Rhoades is in no hurry to fill the space — or any of the other eight buildings he has acquired on mid-Market over the past five years. He has been waiting for the right moment to bring San Francisco’s depressed central boulevard back to life. And he’s prepared to wait years more. “If we rent now, we’ll get locked into a 10-year lease with some terribly low rate,” said Rhoades, co-founder of Urban Realty, a commercial real estate business with financial backing from a $40 billion Connecticut-based lender. “We’re waiting for the area to start to really pop. Then we can get someone in that’s much higher-end.” Urban Realty’s eight mid-Market properties represent 62 percent of the assessed value on the troubled block between Fifth and Sixth streets. When the company finally opens all that commercial space, it will have gone a long way toward the redevelopment of San Francisco’s once-proud commercial spine, attracting investment and spurring more construction. That goal has eluded local government for 15 years, as publicly funded redevelopment schemes were proposed, then foundered. This spring, the San Francisco Redevelopment Agency allocated nearly $1 million in funds aimed at revisiting the mid-Market as a redevelopment project area. This would allow the city to direct property tax and redevelopment dollars toward initiatives to improve the strip,


such as adding affordable housing and a theater district, and preserving historic buildings. Supervisor Chris Daly halted similar plans in 2005 mostly because he said they didn’t include enough affordable housing. Mayor Gavin Newsom said in January that, by establishing the area as a redevelopment district, “Central Market Street, once a pivotal part of our city’s economy and cultural life, has great potential to once again be the grand thoroughfare that it was meant to be.” Yet by leaving so many storefronts intentionally empty, Rhoades’ slow-churn

No one knew about any

of the transactions, and we had to keep them quiet, because if people got wind of it, they’d start buying up other sites to try to kill the project.

real estate strategy has made city planners’ work largely moot. Urban Realty is sitting on a cluster of vacant commercial spaces and will redevelop them on its own timetable.

CAREFUL TIMING How did one developer succeed at acquiring so much valuable downtown real estate, less than a block from the high-end Westfield San Francisco Centre mall? One word, Rhoades said: “Stealth.” Rhoades said that in order to build anything of scale in the area, he has to purchase large swaths of land at reasonable rates. His business strategy, he said, is that of a lion. He prowls into a neighborhood and pounces on the properties he wants without anyone knowing. “We were very, very quiet about this,” Rhoades said. “No one knew about any of the transactions, and we had to keep them quiet, because if people got wind of it, they’d start buying up other sites to try to kill the project.” Rhoades said by buying properties under several shell limited-liability compa-

nies, he was able to outwit competitors. “We didn’t really want people to know what we were doing,” he said. “We bought them in different LLCs, so if people looked they would say, ‘Oh yeah these aren’t the same people.’ They wouldn’t trigger immediately if they ran a search.” A public records search showed ten active LLCs, with David P. Rhoades as one of the agents. Many of them listed the same Bush Street mailing address.

company that helps fund educational institutions, nonprofits and health care organizations — has also invested in companies as diverse as vineyards and venture firms. In 2008, the San Francisco Business Times reported that the company invested $50 million in Premier Pacific Vineyards and a portion of $375 million in the San Francisco-based venture capital firm Sofinnova Ventures.


Rhoades’ biggest Market Street development, CityPlace, will be a mid-priced retail mall that will swallow up more than an acre where three buildings currently stand. CityPlace had been slated as the centerpiece of a mid-Market master plan envisioned in 1995 by San Francisco planners and neighborhood activists. But by 2005, after the city had spent $1.3 million from the General Fund and the Redevelopment Agency, local politi-

Just as the city’s interest in mid-Market waned, Urban Realty’s swelled. It started buying more blighted buildings, and continued as property values plummeted during the recession. Rhoades bought mid-Market properties every year from 2004 to 2008. He said he saw the area as an “obvious great investment,” despite the profusion of run-down façades. “Our most significant investment is in mid-Market,” Rhoades said. Residents and business owners haven’t seen much but gloom and doom in the mid-Market area for about 40 years, said Carolyn Diamond, deputy director of the Market Street Association, a nonprofit business association that advocates for redevelopment. Diamond witnessed the slow disintegration of mid-Market into a stretch of abandonment, grime and crime. “We saw some hope when BART was built and some investment during the dot-com era,” she said. “But besides the occasional pawn shop or jewelry store, there really hasn’t been anything down here since the late ’60s and ’70s. People didn’t want to take a chance.” Daly, whose district includes mid-Market, said Rhoades “seems to have staying power” because he has a history of other Market Street acquisitions. Since 2004, Urban Realty, a privately held company, has acquired nine properties on nearly two acres of blighted, vacant downtown real estate in the heart of mid-Market, through seven separate off-market transactions and more than $100 million in investments. Urban Realty’s main capital partner, the $40 billion Wilton, Connecticutbased Commonfund — an investment


cians put the project on ice when they determined it would not include enough affordable housing. Rhoades is still moving forward with plans to build CityPlace between Fifth and Sixth streets. He owns eight of 21 buildings on that block. The acquisitions happened in quick succession: Rhoades bought 939 Market St., the old Social Security Administration building, in 2005; 949 Market St., the old St. Francis Theatre, in 2006; and 943 Market St. in 2007. Urban Realty also owns the old Maxferd’s Loans pawn shop at 972 Market St. and the two nondescript buildings flanking it at 966 and 974 Market St.; 925 Market St. — the tiny slice of a building nestled against the old First Step shoe store; 901 Market St., the building at the corner of Fifth and Market streets where Marshall’s, a discount department store, is the ground-floor retail tenant; and 799 Market St., leased to Ross Dress For

Less, a block down at Fourth and Market streets. Though many of the buildings were leased when Rhoades first took an interest in the area, he saw untapped potential in the mishmash of businesses that did not seem to fit together. “To me it’s so simple, but it’s kind of scary when you see potential and no one else sees it,” he said. “You have to do something at a certain scale because the incremental properties can’t seem to do it.” Rhoades has now dusted off the plans for CityPlace. He said he has garnered support from business leaders, politicians and property owners, whom he said will be instrumental in getting the project approved by the Planning Commission next month.

continued next page

PLANNING COMMISSION TO DECIDE PROPOSED MALL'S FATE A lengthy environmental review and a public approval process will determine whether the San Francisco Planning Commission will approve the plan for CityPlace — a five-story retail mall with 188 subsurface parking spaces on Market Street between Fifth and Sixth, across from the Warfield Theatre. CityPlace developers David Rhoades and Martin Sawa, founders of San Francisco-based Urban Realty, will not reveal who they plan to court as tenants for the 250,000-square-foot mall, but say there is a lot of interest. "We can’t mention them, but we have tenants interested in being located right across the street from Bloomingdale’s and Nordstrom,” Rhoades said. "People have been waiting for something to happen in mid-Market for a long time." CityPlace will house stores that bridge the retail gap between the ritzy stores of Union Square and those that stand between Fifth and Eighth streets on Market Street as well as stores that are having a difficult time staying in business, Rhoades said. Out of the 35 storefronts between Fifth and Sixth on Market, 17 are vacant.

San Francisco-based developer, Urban Realty, has been sitting on valuable, mostly vacant real estate on Market Street between Fifth and Sixth for almost six years. Urban Realty principal David Rhoades is waiting for the Planning Commission to approve the proposed CityPlace, next month, before he unleashes all of his plans. He says he's waiting and changing the fate of the street. He owns properties on the north and south side of Market Street. The Urban Realty properties are colored gold, and the vacant properties are striped.

Urban Realty plans to complete construction of 250,000 square feet of retail space on Market Street by 2010. Rendering courtesy of Urban Realty Co., Inc. There’s a wig store, a pawn shop, a Western Union, liquor stores and a Metro PCS, just to name a few. Rhoades called his mall "value-based" retail. He will not give specifics, he said he hopes to attract stores like Target, T.J.Maxx and Bed Bath & Beyond. "There’s always been a neighborhood barrier between Fifth and Sixth streets," Rhoades said. "But CityPlace will make this a good location; it’ll give people a reason to cross the street."

The most contentious issues about CityPlace remain parking, traffic and historic buildings. In response, the draft Environmental Impact Report includes alternatives: reduced parking down to 88 spaces, and a "no garage alternative." "However," Rhoades said, "no parking, no tenant." We don't want to see destruction of any historic buildings," said Elvin Padilla, a Tenderloin affordable housing advo—AH cate.

STREETSCAPE // June 22, 2010

3 SF Public Press


Reforms Aim at Saving Shelter Beds


an Francisco’s adult homeless shelter ment of Public Health adequately enforces the system is seeing fresh attempts at reform current rules. on two fronts: one through the settle"It's creating false hopes for shelter residents," ment of a lawsuit, the other through Picariello said. new legislation. SUIT 'PRESERVES STATUS QUO' Since July 2004, more than 400 shelter beds have been eliminated, and the lawsuit settleWRAP’s suit directly addresses the reduction of ment between the city of San Francisco and the beds for homeless people. Western Regional Advocacy Project will spare "The only way we were getting them to stop further reduction from budget cuts for this fiscutting is this case," said Paul Boden, WRAP's excal year. Story: ecutive director. "The bottom line is it preserves In addition, per legislation T.J. Johnston the status quo in terms of capacity." sponsored by Supervisor Eric // Public Press Photos: The suit's core issue was an allegation that the Mar, staff members of cityJackson Solway shelter system favored people enrolled in the funded shelters will receive // Public Press welfare program known as Care Not Cash. Beds training in disability issues in in the system are disproportionately allotted to compliance with the AmeriCare Not Cash recipients and for longer periods cans With Disabilities Act. of time, according to the lawsuit. Mar's proposal would amend the Standards of Co-plaintiff Calvin Davis had exactly that Care law, which the Board of Supervisors enacted problem in his 10 years of homelessness in San in 2008. Francisco. The original act established minimum stanNow 60 and living in public housing, the fordards in shelter conditions, including commer contract painter and car detailer often spent fort and cleanliness of facilities and mandated fruitless hours waiting for shelter. He went on professionalism by staff, as well as a grievance Supplemental Security Income after his legs and procedure for homeless clients who are denied shoulders failed to heal properly from an injury services. and he could no longer work. "I believe that with these new measures in By his estimates, Davis was turned away at place, homeless people will have greater access least eight times a week because the only empty to basic human needs, safer and cleaner places beds were held for Care Not Cash. Davis had to to stay," Mar said in a statement. reserve his bed repeatedly and make curfew each The legislation would also simplify the process night or risk losing his bed. However, his Care of renewing shelter reservations, lengthen stays Not Cash counterparts were guaranteed a bed for to a maximum of 141 days, allow 24-hour access 45 days, whether or not they used it. to beds, and provide information about shelter rules and how to access case management services. The Shelter Monitoring Committee, which oversees shelter conditions, would be authorized to investigate contractual violations and refusal of beds to clients. If approved, the legislation could take effect as early as mid-July, according to Cassandra Costello, Mar’s legislative aide. Mar agreed to sponsor the bill after he was approached by the Coalition Calvin Davis, 60, lives in public housing. He has spent 10 years homeon Homelessness, a Tender- less in San Francisco. loin-based advocacy group, which had published a re"A lot of them beds are empty for people," Daport in 2009 on the delays homeless people envis said. "You don't have to come in every day if countered in making seven-day reservations for they're open" to Care Not Cash recipients. beds. Coalition director Jennifer Friedenbach deFigures from the Human Services Agency's stascribed the process during a May 20 hearing as tistical report on Care Not Cash show 563 active “not a homeless person-centered process,” but a homeless clients in January 2009. That month, “system-centered process.” the city counted 5,614 indigent in their bienThe push for the “person-centered process” nial application for federal funding. By those was also behind the lawsuit by WRAP, an alliance estimates, one in 10 homeless people are on genof organizations serving the homeless. The suit eral assistance. Yet out of 1,213 beds available in was filed in August of 2008 and reached a settleFebruary, 378 — or about one in three — were exment this April. According to the deal with the pressly reserved for Care Not Cash in three of the city, homeless clients must be accommodated at city's largest shelters. any shelter for which they have proof of a reserIndigent people must prove a lack of income vation, even if it does not appear in the reservaor assets to qualify. Since Care Not Cash took tion system. effect in 2005, welfare payments were reduced The suit, along with Mar’s legislation, seeks to from $395 per month to $59 with provision of redress scenes such as those described by David services. Harness, a former ship repairman who is now L.J. Cirillo, a shelter client advocate, had to aphomeless after losing employment due to disabilply for welfare to avoid repeated waits. Her case ity. He testified that people sometimes literally manager suggested it was the best way of keepfight for a bed. ing a bed during her six months of homeless"My reservation ran out and I was attacked ness, she said. in front of Glide Church, waiting for a reserva"Stability is the No. 1 thing a homeless person tion," Harness said, adding that someone behind needs," Cirillo told the Rules Committee. "A perhim took a swing at him to take his place in line. son who has been on the streets is going to need "They had to put me in a police car and take me time" to find housing. to another location for my own protection," he said. But Tomas Picariello, a former shelter occuContact T.J. Johnston at: pant, said he was skeptical about amending the The story continues: standards. He said he doesn't believe the Depart-

from previous page

Mid-Market Mogul MAKING FRIENDS IN THE NEIGHBORHOOD Currently there are no tenants in the properties needed to build CityPlace. When Urban Realty started its acquisition, several businesses had to be moved. “We had to take care of everybody so everybody likes us,” Rhoades said. “There were no cheap deals, but there was nothing extraordinarily tough, and no one knew we were buying so no one jacked their prices up,” he added. Urban Realty cut the rent in half for three years for the Asian Law Caucus, until it was able to purchase its own building at 55 Columbus Ave. The developer forgave back rent for the First Step shoe store so it could move to a larger space directly across the street. Rhoades and his partners reduced the rent for In-Home Support Services — a publicly funded program for low-income people with disabilities — which was relocated to Folsom Street.

Urban Realty also moved Citywide Case Management, an organization assisting 500 low-income and homeless psychiatric patients, to 982 Mission St. “We had been in that building with options to renew but David made it real clear from the beginning that he’d be a responsible developer,” said David Fariello, the group’s division director. “I found him to be a straight shooter.” During this four-year span, a 7-Eleven store in mid-Market also closed, and the Social Security Administration moved to the Federal Building on Seventh Street near Mission Street. At least two property owners on the block are holding out for the economy to turn around. They see the potential growth that CityPlace could stimulate. Blick Art Materials, scheduled to open this summer, hopes to position itself to benefit from future mid-Market development, and in the meantime expects to start strong by filling the void created by the closure of another art store, Pearl, on the same block. Shiekh Ellahi opened a designer shoe store in a building flanked by Urban Realty properties three years ago — his sec-

Emmanuel Andreas is the president of Bay Area Transportation Advisory Committee and a Muni operator. TRANSPORTATION

Muni Drivers Try to Shift the Bulls-Eye


ands clasped and brows furrowed, Gabriel Desalla sat quietly for the first half of the Bay Area Transportation Advisory Committee meeting. He is one of 2,172 union workers in the transit agency who are under increasing pressure to make concessions that would restore recently cut Muni services. In a small conference room in Bayview-Hunters Point San Francisco, Desalla waits for committee president, Emanuel Andreas, to open the floor for discussion. The topic, as usual, is the ongoing battle over salaries, health benefits and Story: work rules. The SFMTA says Anna Rendall that reforms are needed to // Public Press Photos: improve financial efficiency Ed Ritger but many Muni drivers are // Public Press resistant to the changes proposed. Andreas, Desalla and others in the small, 37-member grassroots group want to avoid a fight by convincing members of Transit Workers Union Local 250-A, which represents the drivers, to be more willing to compromise with the SFMTA. The group’s efforts seemed to be making ground when union negotiators agreed to concessions that BAYTAC suggested, and took the plan to the drivers. But the drivers rejected the agreement on June 11. Andreas said in an Email that the concessions were voted down because “the union officials refused to debate the issue before the vote.” The concessions would include changes to healthcare benefits for dependents, the instigation of part-time drivers and work rules that only allow overtime pay after a 40-hour workweek. One Muni driver, Philip Aragon, said he voted no because the Union did not adequately clarify what these concessions entailed. Andreas has said that one reason drivers rejected the concessions was because they would mean that the SFMTA would not be required to give part-time staffers benefits—a policy that could lead to full-time operators losing work hours. Following the vote, Mayor Gavin Newson and SFMTA Executive Director Nathaniel Ford asked the rank-and-file to recast their votes, but there has been no movement from the union in response. Not only do tensions between the SFMTA and the drivers’ union have a history, but power

ond Shiekh Shoes location in San Francisco. Before Ellahi opened his doors, Rhoades offered to buy his building; but Ellahi had already recruited staff and promised jobs. “I want to say Urban Realty offered me like $6 million,” Ellahi said. “But they weren’t willing to commit to a timeframe for opening. I know when they say five years they mean 15, and I already had committed to hiring some people.”

RAISED ON REAL ESTATE Growing up in Los Angeles, Rhoades learned real estate from his father. He bought his first six residential units when he was in his 20s and has been doing land deals ever since. He said he takes inspiration from Chicago’s Magnificent Mile. Before forming Urban Realty, Rhoades worked as a valuation expert and appraiser for Wells Fargo & Co., GE Capital and Bank of America Corp. Rhoades and his partner, Martin Sawa, started Urban Realty in 2002 to buy large properties with debt and turn them around to “fill in the market on

conditions should be.” struggles over Muni operations, between the But for 12-year Muni veteran Roy Flugence, mayor and the Board of Supervisors, do as well. who lives in the Bayview District with his wife, A Muni reform ballot measure spearheaded by the mere prospect of pay-cuts is worrisome. Supervisor David Campos that gives the Board “I’m living paycheck to paycheck — it’s not what more power over picking SFMTA appointees is people think it is for transit operators,” he said. nothing new. Most drivers cannot afford homes in the city, In 2005, the Board attempted to gain some and according to the SFMTA, only 43 percent of control over the agency with a similar measure, drivers list San Francisco as their residence. but it lost at the polls. BAYTAC president, Andreas, said that the The new reform efforts are now rearing their difference between Muni salaries and other heads in the midst of the state’s biggest budget drivers’ salaries are mere cents, despite being crisis in recent history and a controversial audit the second-highest salaries in the nation. One that was publicized last month. thing that Andreas In January, Campos says could in fact be initiated an audit of I'm living paycheck to changed to improve the SFMTA, and on May efficiency is the ele11 — three days after 10 paycheck — it's not what ment of seniority in percent Muni cuts went the Muni pay scale. into effect — the audit people think it is for “The longer revealed consequences you’ve been with of work rules that cost transit operators. the union, the betthe SFMTA a annual $3 ter choices you get,” million. said driver Philip A grass-roots campaign, Aragon, who has been with the agency since Fix Muni Now, has cropped up in response last June. The agency’s current rules are such to the audit, with the intention of reforming that some drivers who work only 3.5 hours can Muni work rules and salary decisions. Superviget a full day’s pay. “It’s not fair to the majority sor Sean Elsbernd and the San Francisco Planof drivers. It’s wasting the riders’ money,” Anning and Urban Research Association are headdreas said. ing the effort. If it makes the ballot, Elsbernd’s proposal They hope to gather 73,000 signatures by July would run alongside Campos’ measure. Cur7 to place a charter amendment on the ballot rently, the mayor appoints all seven board that would make drivers collectively bargain members. Under Campos’ amendment, the for their wages and work rules, meant to save mayor would appoint three members, the the city money and make Muni run more efBoard of Supervisors would appoint three and ficiently. On a recent Saturday morning, Elsone appointee would be jointly decided by the bernd and Supervisor Carmen Chu  stood at a board president and mayor. busy street corner, collecting signatures. Unlike Elsbernd’s measure, Campos only Elsbernd’s first talking point with passer-bys needs the approval of the Board of Supervisors was drivers’ salary — and how, by changing a to get his measure onto the ballot. city charter, Muni drivers would no longer be The two measures are not mutually exclusive required to be the second highest paid in the and can both pass if they both make it to the nation, which is currently required by a city November ballot. If that happens, the city attorcharter. ney will decide which attributes of each meaChu, who represents the Sunset District, said sure will prevail, as determined by the number that Muni issues especially affect her residents of votes for each measure. because it can take them over an hour on the Elsbernd is confident his measure will pass, transit system just to get downtown. but “if lightening strikes and it doesn’t pass,” “Not one thing will be the magic silver bullet he says, “I will keep trying.” that will fix it, but we do think that having collective bargaining is one way in which the city can negotiate and see improvement,” Chu said. Contact Anna Rendall at: “This ballot measure doesn’t take away their pay, doesn’t lower their pay, all it says is that The story continues: the city should be able to negotiate what those

what’s missing,” Rhoades said. “Then we started buying more and more properties because I found out I kind of knew more than other people about the mar-

What killed mid-Market

development in 2005 were groups that said, "large business is going to kill small business and displace people.

ketplace.” Urban Realty has had significant redevelopment success in San Francisco. Rhoades points to the overhaul of one property at 228-240 Post St., a 39,000square-foot retail building between Stockton and Grant streets, as an example of why he expects to succeed on Market Street. He’s done it before. During escrow on the property, Urban Realty got tenant commitments for the

entire building from what he calls “luxury retailers.” Construction began immediately upon closing, and since then net income for the property has increased more than 400 percent since the early 1990s. The property is now worth more than $42 million. Development on mid-Market may be risky, but Rhoades said he likes taking chances and “buying on the edge.” In 1999, before Urban Realty bought the building that houses Ross, at Fourth and Market streets, it was leased below market rate. After the acquisition, Urban Realty negotiated the retail lease up to market rate — an 80 percent increase. “We bought this thing,” Rhoades said. “Then the Four Seasons and the Metreon opened, and, wow, this is a great location!” Rhoades said there’s a good chance his mid-Market properties will have the same financial success as the Ross building and Post Street property. “Now that we’ve gone public, people have started buying properties and there’s a lot of interest from prospective tenants,” Rhoades said. “The market is changing, it’s coming back.”

Neighborhood groups in SoMa and the Tenderloin are conflicted. They say although development can spur economic and social growth in the area, they are concerned about the destruction of historic buildings, increased vehicle congestion and rising rents on area streets. Paul Hogarth, an attorney at the Tenderloin Housing Clinic and managing editor of the political blog BeyondChron. com, organized against the first midMarket redevelopment plan. Five years later, he summarized the quandary many neighborhood groups face when power brokers seek to transform their home turf: Does doing something — anything — always mean progress? “What’s the alternative,” Hogarth said, “nothing?” Also, what killed mid-Market development in 2005, were groups that said, "large business is going to kill small business and displace people," Diamond said. That's a feeling that persists today. Contact Angela Hart at: The story continues:

4 SF Public Press

STREETSCAPE June 22, 2010 //

Run Down? Pay Up.

City scrambles to nail down $341 million in blighted, abandoned properties


ix months after the Department of Building Inspection launched an ambitious effort to catalog unused and blighted properties in the city — a process that ultimately could bring in millions of dollars in property and transfer taxes and developer fees — the effort has been hobbled by layoffs in the department. The Board of Supervisors passed an anti-blight law unanimously in November 2009. It requires property owners whose buildings are vacant or abandoned to register them with the city and fix up their dilapidated exteriors. The law is intended to reduce crime, clean up neighborhood blight and stimulate economic and social activity. Building inspectors are still tryText: ing to figure out how to validate Angela Hart the city’s stock of vacant and aban// Public Press Graphic: doned buildings, and it is increasShawn Allen ingly difficult, they say, because this // Stamen Design is the first time San Francisco has attempted this feat. Inspectors must investigate each property to determine the validity of the blight complaint, the majority of which come from citizens — though some result from fire and police officials responding to crime or a fire in one of the empty buildings. “Everything fell off the cliffs last October in terms of meeting our budget,” said William Strawn, a spokesman for the building inspection department. “We shrunk to about 230 employees from 300 last year, so we don’t have enough code enforcement to vigorously pursue every reported situation. “I think the bottom line is that until this ordinance, we had not acquired reliable vacant-building data,” Strawn said. “Even when I spoke to district police and fire stations in an attempt to obtain verified vacant building addresses, none of them kept such data.” The list of abandoned and vacant properties continues to grow. Although some properties have been removed because the complaint turned out to be bogus, the number grew to 314 buildings this monthfrom 214 in February. So far, the estimated assessed value of the city’s vacant and abandoned property and land has exceeded $341 million, though that number is low because the actual number of blighted properties could eventually exceed 500, according to building inspectors, and because of Proposition 13.

Under Prop. 13, property tax rates can only increase 2 percent per year, and in San Francisco, the rate is slightly lower than that, at 1.159 percent. And buildings are not reassessed unless they are sold or major improvements are made. “Those values are probably understated even versus today’s depressed real estate market,” said Ben Rosenfield, the city’s controller, responsible for reports on San Francisco’s fiscal condition. “The actual value of the property is probably significantly higher.” In neighboring cities such as Oakland and San Jose, there are laws that attempt to track and clean up blight. In Oakland, the city pays for some privately owned properties to be cleaned up to help minimize blight. In San Jose, the Code Enforcement Division tracks blighted buildings and residents can report a property they think is blighted on the city’s website. Three complaints, most recently May 18, have been filed with the city’s Department of Building Inspection about the old Pagoda Palace Theater — the gutted five-story building that is completely engulfed in plywood on the corner of Powell and Union streets in North Beach. The Planning Commission approved a plan in January 2009 to redevelop the old theater that is most famous, perhaps, for showing kung fu movies in the 1980s. Having been closed since 1994, the new plans call for 18 units of new housing with ground floor retail and 27 off-street parking spaces. The developer, Joel Campos, who owns a chain of La Corneta Taquerias in the Bay Area, is awaiting approval for a $10 million business loan before he can begin renovation. “It’s very hard,” Campos said. “The banks are asking for a lot of requirements to get the loan and I’m a smallbusiness man, but I’ll keep trying.” Campos also needs to secure additional building permits in order to begin construction, according to Tim Frye, the North Beach historic preservation specialist for the San Francisco Planning Department. San Franciscans are calling building inspectors about rundown buildings in neighborhoods across the entire city from Pacific Heights and North Beach to the Mission and Hunters Point. Brett Howard is the building inspector who responded to the citizen complaints about the old Pagoda Theater. He called the gargantuan shell of a building a health

Department of Building Inspection's abandoned building list, June 2010.

What makes blight? The San Francisco vacant and abandoned buildings targets blighted properties. A building is blighted when the property owner fails to actively maintain and manage it. Blighted buildings are described under the ordinance as boarded buildings, substandard or unkempt properties, long-term vacancies that retard their appreciation, lower property values and discourage economic development. Also, properties are blighted if they are overgrown with weeds, used as a dumping ground for debris or hazardous substances, properties that attract vagrants and gang members. Also included are properties that are deteriorated enough that the building must be demolished or neighboring people and properties could be endangered. In addition to the 2009 law, the city has another anti-blight ordinance on the books. In 2008, the Board of Supervisors approved legislation that gives the Department of Public Works the authority to designate properties as blighted and mandate that property owners make needed repairs. Under this law, public works staff can fine property owners $250 for each violation.

threat and an eyesore. “The upper part is exposed to the elements and pigeons and the exterior of the building is all tagged up,” Howard said. “The whole thing is falling into disrepair.” On a scale of one to 10, Howard rated the building a five of the worst he’s seen while inspecting the city’s blighted buildings. In the past, said Ed Sweeney, deputy director of the Department of Building Inspection, his staff would “wing it” because there were no laws on the books to track the city’s empty or blighted buildings.

Contact Angela Hart at: Join the conversation:

How the city keeps track: Building inspectors keep a working list of abandoned buildings based on citizen, fire and police department complaints. The department emphasizes the list may not be entirely accurate. Some properties may not be abandoned or vacant, and some properties (as our photographers have discovered through spot inspection) may not even exist at the addresses provided. A photographic survey of 209 of the 314 listed properties, through June 19, turned up at least five that do not appear to exist.

Left to right: 1532 Revere Ave., 834 44th Ave., 135 O'Farrell St. and 1741 Powell St.

North Beach Marina

The Department of Building Inspection oversees the enforcement of building, plumbing, electrical, mechanical, housing and disability access codes for the city’s estimate of 195,000 buildings.

Russian Hill

Presidio Pacific Heights

Nob Hill

Financial Chinatown District

To report a vacant or abandoned or vacant building in your neighborhood — or to inform the Department of Building Inspection of an error in the list — call 415-558-6454 or e-mail

Presidio Heights


Western Addition

Inner Richmond

Outer Richmond


MORE ONLINE: the Public Press is compiling an interactive map of each property on the abandoned building list. Go to sfpublicpress. org to post your comments on a building or to share photos of blight in your neighborhood.

South of Market Haight Ashbury

Golden Gate Park

Castro Inner Sunset Outer Sunset


Potrero Hill

Twin Peaks Noe Valley West of Twin Peaks


Diamond Heights

Bernal Heights

Bayview Outer Mission Lakeshore


Ocean View Visitacion Valley Crocker Amazon

Bayview 1001 Jamestown 1129 Mendell Street 1137 Mendell Street 1147 Palou Avenue 119 Nautilus Court #89 1207 Thomas Avenue 1215 Hollister Avenue 1406 Hudson Avenue 1479 Revere Avenue 1486 Oakdale Avenue 1500 Newcomb Avenue 1520 Jerrold Avenue 1526 Newcomb Avenue 1532 Revere Avenue 1590 Thomas Avenue 1596 Quesada Avenue 1654 Wallace Avene 170 Boutwell Street 1727 Oakdale Avenue 1748 Oakdale Avenue 1786 McKinnon 1881 Oakdale Avenue 1940 Oakdale Avenue 1963 Oakdale Avenue 2010 Keith Street 6276 3rd Street 6299 3rd Street 66 Robblee Avenue 718 Mendell Street 85 Lucy Street 8 Jakey Court Bernal Heights 106 Milton Street 14 Costa Street 1629 Dolores Street 173 Ellsworth Street 344 Richland Avenue 3912 Folsom Street 553 Mission Street 857 Peralta 906-908 Cortland Ave Castro: 180 Dolores Street 200 Dolores Street 246 Liberty Street 4126 17th Street 420 Noe Street 4388 17th Street 4390 17th Street 614 Noe Street Crocker Amazon 1120 Naples Street #A 1294 Geneva Street 1310 Ridge Court 15 Naylor Street 811 Red Leaf Court Tenderloin 1236 Market Street 1 Jones Street 34 Mason Street 401 Post Street 532 Sutter St 630 Leavenworth Street 838 Market Street 907 Post Street 966 Market Street 970 Market Street 972 Market Street 974 Market Street Excelsior 155 Edinburgh 1609 Felton Street 161 Gambier 206-208 Silliman Street 277 Munich 2854 San Bruno Avenue 450 Cambridge Street 5 Naples Street 627 Felton Street 672 Lisbon Street 815 Lisbon Street 955 Excelsior Avenue Financial District 16 Jessie Street 520 Montgomery Street 584 Pacific St Glen Park 217 Randall Street 2 Everson Street 47 Digby Street Inner Richmond 1045 Cabrillo Street 2118 Anza Street 284 Stanyan Street 421 Arguello Avenue 5400 Geary Blvd Inner Sunset 1677 11th Avenue 2024 15th Avenue 324 Hugo Street Lakeshore 160 Everglade Drive 168 Clearfield Drive 554 Gellert Drive Marina 1598 Bay Street 2055 Union Street 2465 Van Ness Street Mission 1101 Dolores Street 1140 Potrero Avenue 1198 Valencia Street 1450 15th Street 1450 Alabama Street 1886 Mission Street 2465 Mission Street 2600 18th Street #6 2660-62 Harrison Street 2660 Bryant Street 2857 22nd Street 3065-3067 23rd Street 3069-3071 23rd Street 312 Utah Street 3246-3248 18th Street 35-37 Woodward Street 3732-34 20th Street 475 South Van Ness 857 Alabama Street 868 Potrero Avenue Nob Hill 1177 California Street #1211 1527-1529 Pine Street 1601 Larkin Street 1800 Van Ness Street Noe Valley 226 27th Street 2350 Castro Street 3935-43 24th Street 4179 23rd Street 724 Elizabeth Street 873 Alvarado Street

North Beach 2568 Jones Street 280 Union Street 424-426 Francisco St 551 Filbert Street 555 Francisco St Ocean View 1290 Holloway Avenue 204 Sagamore Street 216 Head Street 23 Caine Avenue 248 Harold Avenue 251 Montana Street 275 Vernon Street 32 Josiah Avenue 331 Shields Street 42 Miramar Avenue 431 Plymouth Avenue 445 Lakeview Avenue 454 Ralston Street 55 Montana Street 69 Santa Cruz Avenue 715 Plymouth Avenue 7 Orizaba Avenue 85 Caine Avenue 9 Edgar Place Outer Mission 151 Rae Avenue 152 Bertita Street 154 Naglee Avenue 163 Rae Avenue 4 Joost Ave #4 762 Cayuga Avenue Outer Richmond 2950 Anza Street 673-75 44th Avenue 740 39th Avenue 834 44th Avenue 858 27th Avenue Outer Sunset 1269 19th Avenue 1279 19th Avenue 1675 48th Avenue 2000 Judah Street 2158 36th Avenue 3540 Rivera Street Pacific Heights 2040 Broadway St #301 2109 Steiner Street 2548 California Street 2550 Webster Street Parkside 2250 33rd Avenue 2440 23rd Avenue 2514 23rd Avenue 2574 31st Avenue Potrero Hill 1267 Rhode Island 2342-44 3rd Street 642 Wisconsin Street 650 Illinois Street Presidio Heights 23 Wood Street 3800 Washington Street 3810 Washington Street Russian Hill 1111-33 Green Street 1269 Lombard Street 2640 Leavenworth Street 653-667 Bay Street 869 North Point Street Seacliff 3132 Clement Street 86-88 Seal Rock Drive South of Market 1023 Market Street 1077 Mission Street 1089 Market Street 1127 Market Street 1161 Mission Street 139 6th Street 1401 Howard Street 140 South Van Ness #335 1415 Howard Street 147 South Park 1501 Harrison Street 200-212 6th Street 219 Brannan Street #11B 224 11th Street 250 10th Street 280 7th Street 333 1st Street #1805 355 1st Street #S1206 36-38 Laskie Street 374 5th Street 398 7th Street 400 Beale Street #705 450 Irwin Street 501 Beale Street #D 501 Beale Street #PH1E 525 7th Street 570 Jessie Street 639 Natoma Street 923 Market Street 925 Market Street 939 Market Street 941-943 Market Street 942 Mission Street 949 Market Street 969 Market Street 973 Market Street Visitacion Valley 1181 Girard Street 1225 Goettingen Street 1267 Sunnydale Avenue 1279 Sunnydale Avenue 343 Campbell 362 Velasco Avenue 493 Sunrise Way Western Addition 1172-1174 Fell Street 1650 Pine Street 1656 Pine Street 1660 Pine Street 1670 Pine Street 1844 Turk Street 1847 Scott Street 2000 McAllister Street 2028 Fillmore Street 2584 Sutter Street 554 Fillmore Street 591-93-95 Waller Street 640-42 Hayes Street 708-710 Buchanan Street 709-711 Lyon Street 754 Oak Street 949 Fell Street West of Twin Peaks 161 San Pablo Avenue 1728-1770 Ocean Avenue 240 San Fernando Way 247 Lansdale Avenue 300 Santa Ana Avenue 432 Ulloa Street 479 Los Palmos Drive

5 // June 22, 2010

SF Public Press



University of California Invests $53 Million in Two Diploma Mills Owned by a Regent


year ago, Richard C. Blum, then the chairman of the Regents of the University of California, spoke at the Milken Institute’s Global Conference 2009, held at the Beverly Hilton in Beverly Hills. The corporate confab was hosted by Michael Milken, the “junk bond king” who went to prison in the aftermath of the savings and loan fiasco in the 1980s. Milken, who is Story: barred from securities Peter Byrne trading for life by federal // Public Press regulators, has since recreated himself as a proponent of investing in for-profit educational corporations, an industry which regularly comes under government and media scrutiny in response to allegations of fraud made by dissatisfied students. At the conference, Blum sat on a panel called “The New University and Its Role in the Economy,” alongside the presidents of the Massachusetts Institute of Technology (Susan Hockfield) and Arizona State University (Michael Crow). The panel focused on how universities can best serve the corporate jones for tech-savvy employees by recruiting smart freshmen with scientific aptitude. One panel member urged treating universities as “laboratories of business ideas and products.” As someone who oversees investment policy decisions for the University of California’s $63 billion portfolio, and as the largest shareholder in two for-profit corporate-run universities — in which UC invests — Blum had a unique perspective to share at the conference. He advised public universities to attract business-oriented students with clever advertisements, as vocational schools do. “It’s like anything else,” he said. “It’s how you market it.” Marketing strategy aside, Blum has taken on two seemingly disparate roles — one as an advocate for a nonprofit university, and the other as an owner of two for-profit educational corporations. For several years, Blum’s firm, Blum Capital Partners, has been the dominant shareholder in two of the nation’s largest for-profit universities, Career Education Corp. and ITT Educational Services, Inc. The San Francisco-based firm’s combined holdings in the two chain schools is currently $923 million. UC investment managers have invested $53 million of public funds in the two educational corporations. Blum sits on the university’s investment committee, which oversees the management of the university’s stock

portfolio. It is not clear whether Blum had a direct role in decisions regarding UC’s educational corporation investments, but the juxtaposition of his significant personal stake in educational corporations with his role as financial advisor to the state’s crown-jewel school system — also an investor in the same educational corporations — raises questions, at the very least, about the appearance of conflict of interest.

One panel member urged treating universities as

laboratories of

business ideas and products.

The regents’ conflict-of-interest policy requires them to “avoid the potential for and the appearance of conflicts of interest with respect to the selection of individual investments … public officials shall not make, participate in making, or influence a governmental decision in which the official has a conflict of interest.” And the California Political Reform Act of 1974 provides civil and criminal penalties for officials who ignore conflicts of interest — as UC makes clear in ethics training presentations specifically created for university officials. When UC Treasurer Marie Berggren was questioned about the propriety of UC investing in Blum’s for-profit college chains, her spokesman, Steve Montiel, replied by e-mail: “The Treasurer’s Office doesn’t track Regents’ holdings in making decisions about security selections, though Regents’ holdings are disclosed as a matter of policy.” Blum did not respond to repeated requests for comment. UC spokeswoman Lynn Tierney called on his behalf, saying that the university recruits its students from the intellectual elite of applicants. Only those with very high grade averages and SAT scores get in, she said. Therefore, “UC is not losing students to Blum’s vocational schools, and there is no conflict of interest,” she said. John M. Simpson of Consumer Watchdog, a nonprofit education and advocacy organization in Santa Monica, disagreed. “It is hugely inappropriate for the University of California to invest in for-profit colleges when it should be promoting public education,” he said. “And something stinks when university investments end up in companies largely controlled by a regent. To the average fellow on the street, this

would seem to be a conflict of interest. It is up to Mr. Blum and the UC treasurer to explain how it could not be a conflict of interest.”

RECESSION CAPITALISM Because of repeatRichard Blum ed tuition hikes by the UC Regents and their gutting of many classes and educational programs and the imposition of a 15 percent reduction of instate admissions to the university, the gateway to higher learning in California has narrowed. Blum voted in favor of all of these measures. On March 13, The New York Times reported that many chain schools, including ITT Educational Services and Career Education Corporation, “have exploited the recession as a lucrative recruiting device while tapping a larger pool of federal aid … selling young people on dreams of middle-class wages while setting them up for default on untenable debts, low-wage work and a struggle to avoid poverty.” The Times noted that for-profit schools are directly benefiting from cuts in education, especially in California where state-funded universities and community colleges have been “forced to cut classes just when demand is greatest.” Indeed, ITT Educational Services recently reported to its shareholders that because of “higher unemployment rates among unskilled workers,” company revenue increased by $300 million, to $1.3 billion. Responding to a recession-induced increase in demand for vocational training, ITT increased its tuition by 5 percent (70 percent of ITT’s revenue comes from federal tuition aid programs).

Blum’s investment bank entered the for-profit education business in 1987, when he purchased a large block of shares in National Education Corp., an Irvine-based vocational school. He joined the company’s board of directors, sitting alongside former U.S. Sen. Barry Goldwater, R-Ariz., and David C. Jones, a former chairman of the Joint Chiefs of Staff. Two years later, according to a report in the Los Angeles Times, Blum got in hot water when an-

was already shaky. We need a structural overhaul of the university governance system.

large blocks of shares in ITT Educational Services and Career Education Corp. These two purchases followed dips in the companies’ stock prices brought about by allegations of corrupt practices made against them by government agencies. In the case of ITT Educational Services, federal and state regulators investigated the company in 2004 after shareholders and students alleged that it was falsifying student attendance, grades and job placement records in order to keep federal financial aid flowing. When the

news broke, the price of ITT shares halved. Blum Capital Partners acted quickly, purchasing reams of devalued ITT stock. It soon owned the largest block of stock in the company — a 10 percent ownership stake in 2006. Not long afterwards, the investigations were closed, with no findings of wrongdoing. By May 2010, ITT’s revenue exceeded $1.3 billion, and Blum Capital Partners’ stake was valued at $415 million. Similarly, Blum Capital Partners bought shares of Career Education Corp., a $1.8 billion operation that serves 90,000 students, following a corruption controversy. In 2004, Career Education Corporation was investigated by multiple federal agencies after whistle-blower lawsuits alleged that the school had allowed failing students to remain enrolled in order to keep its pipeline to federal grants and loans tapped. In 2005, after “60 Minutes” televised an unfavorable story about the chain school, the value of its stock dropped by more than half. Blum Capital Partners bought in for $33 million. By May 2010, its stake had grown to $508 million, making Blum’s firm by far the largest and most powerful shareholder of the chain school. A partner with Blum Capital Partners, Greg L. Jackson, sits on the board of Career Education Corp. UC is an investor in both educational corporations. Even as Blum was buying stock in Career Education and ITT Educational Services, UC financial records show that the university’s investment managers were actively buying and selling these same stocks — to the tune of $53 million. The university was not just holding onto these stocks to accrue value over time, it was day trading them in large amounts, as much as $2 million a trade, thereby affecting the daily price of these stocks. Noah Stern, president of Associated Students at the University of California, said he is concerned by UC’s investment practices. “Student trust in the regents was already shaky,” he said. “We need a structural overhaul of the university governance system.” Note: This is an edited version of one article in a 10-part investigative series on the regents’ conflicts of interest sponsored by and a consortium of six Bay Area newsweeklies. The rest of the series will be linked here as stories are published: CalPERS, the state pension fund, also had, as of the end of 2009, $6 million invested in Career Education Corporation, and $10 million invested in ITT Educational Services. And CalPERS held more than $100 million in shares of both companies as part of a $500 million investment with Blum Capital Partners, which is an investment adviser to CalPERS. Details about CalPERS connections to Blum and other regents may be found in the investigative series.


Texas Oil Company Pumps More Cash into Delay of Global Warming Law

Mental Health Budget Takes a Hit



Courtesy of flickr user on2wheelz.

ing officially placed on the state ballot. In total, it has received more than $3 million in contributions. Other large contributions from non-oil companies include $100,000 from the Howard Jarvis Taxpayers Association and a $498,000 contribution from a littleknown Missouri-based tax group, the Adam Smith foundation. In total, $1.7 million in contributions are from out of state, with most of the money coming from Texas-based Valero. Valero owns two refineries in California and around 80 company-owned gas stations. It also supports around 800 other stations that carry its brand and employs around 1,500 people with a payroll in excess of $20 million. Bill Day, a spokesman for Valero, said the company supports the initiative because it is concerned that the state's global warming regulations would

Student trust in the regents



alero Energy Corp. has given hundreds of thousands of dollars in additional contributions to a November ballot initiative that would suspend California’s global warming law until unemployment falls significantly. Story: Timothy Sandoval Valero, a // California Watch Texas-based oil Graphic: company, has Name Lastname // Public Press been the largest contributor to the campaign, donating more than $500,000 since February. This month, in filings with the secretary of state's office, the California Jobs Initiative acknowledged two more contributions from Valero totaling $550,000, bringing the company's total contributions to the campaign to more than $1 million. The California Jobs Initiative would suspend the Global Warming Solutions Act of 2006, California's landmark global warming law, until unemployment reaches 5.5 percent. Currently, California’s unemployment rate is 12.3 percent. Teroso Petroleum Corp., an oil company based in Long Beach, contributed a $150,000 loan to the campaign this month as well, making it the second largest contributor behind Valero with $600,000 contributed thus far. Oil companies have primarily funded the initiative, contributing $2,338,000 or 75 percent of the total contributions the proposed measure has received. The initiative may set a record for collecting the most money prior to be-

gry shareholders filed a lawsuit contending that “the company issued rosy financial statements while Blum and other directors were selling their shares.” The shareholders claimed in court documents that Blum sold $2.7 million worth of shares at about $24 per share after he learned, a day before the public announcement, that the company president planned to resign. When the share price bottomed out at $3.50 after the announcement, Blum reinvested in the troubled company, booking a profit. By the late ’80s and early ’90s, National Education Corporation was “battered by accusations that its vocational schools were riddled with fraud,” The New York Times reported in March 1997. A new president was hired in 1994 to reform the school and to bring it into the age of computerized learning. By 1995, Blum had gained control of 11.5 percent of National Education Corporation stock via his own firm’s holdings and those belonging to a nonprofit investment fund, Commonfund, for which Blum worked as an investment advisor. (Commonfund manages investments for more than 1,400 universities, including UC.) In 1997, Harcourt, the textbook publisher, bought National Education Corporation for about $750 million, or $21 a share. Blum and his private partners profited handsomely. After he became a regent in 2002, Blum pursued further investment in for-profit education. In June 2005, Blum Capital Partners bought 5 percent of the stock (worth $24 million) in Lincoln Education Services Corp., a $300 million operation with 32 campuses. Blum also acquired

be too much for California’s faltering economy to bear. “Valero has proudly supported the California Jobs Initiative because we feel it is the best way for Californians to express their opinions on whether a repressive cap and trade regime should be implemented during an economic slowdown,” Day said. Critics have attacked Valero’s involvement in the campaign. Steve Maviglio, spokesman for California for Clean Energy and Jobs, which is leading a campaign against the California Jobs Initiative, called the measure a “special-interest bailout for oil companies.” “I think California voters are going to be smart enough to see through this deceptive campaign for what it is,” This article was first published on June 16.

n a tough budget year, profound questions about a city’s priorities rise to the surface. San Francisco’s relationship to its residents who occasionally break down and do indelibly strange and antisocial things in the street can be a tense one. In spite of large budget cuts this month, Citywide is a program whose work with mentally ill criminal offenders seems to work. A 2007 study of the San Francisco Story: Heather Smith Behavioral Health Court (where 70 per// Mission Local cent of Citywide’s clients come from) Story: Heather Smith found that 18 months into the court // Mission Local program, participants had about a 26 percent lower risk of new criminal charges and a 55 percent lower risk of new criminal charges for violent crimes than mentally ill people who had not gone through the program. “The fun thing about de-institutionalization,” says David Fariello, division director of Citywide, “is that there was no model for how it would be done. People in institutions didn’t vote. They didn’t make a fuss. These programs were cut and then it wasn’t until these people started showing up in prisons and emergency rooms that people realized there was a problem.” So, when the mayor’s budget proposal came out on June 2, Citywide was shocked to discover that the budget for it and its sister program, Community Focus had been cut 15 percent — the largest of any mental health outpatient facility. Citywide is located at 982 Mission St. Since the agency qualifies for federal matching funds, Fariello says that the total amount Citywide stands to lose is close to 30 percent. San Francisco’s Behavioral Health Court, an arrangement between the city’s district attorney, public defender, and Superior Court to shunt mentally ill defendants out of the court system and onto treatment, may be forced to shut down, because of the lack of a place to send people to. In order to qualify for Citywide, a client needs to have serious mental health problems or developmental disabilities — the sort that prevent them from having the presence of mind to man Heather Smith writes for Missionlocal org. You can contact her at:

Michael Austin waits outside UCSF Citywide Case Management on Mission Street to obtain his medication.


6 SF Public Press

CIVICS June 22, 2010 //


CCA vs. PG&E: Public Power Battle in Your Mailbox

In wake of Prop. 16 defeat, decoding the claim from both sides on local power MAILER: CLEANPOWERSF

Analysis by Dana Sherne. Contact Dana at: Join the conversation:

COMMON SENSE COALITION The Common Sense Coalition is a political action committee largely funded by PG&E and organized around a campaign against efforts to involve the city of San Francisco in providing power to citizens.

CleanPowerSF is the city’s Community Choice Aggregation program, which will supply consumers with power generated from "green” sources and delivered via PG&E’s electrical grid.

CLAIM: Is the CCA an expensive proposition? Half true. The city government will purchase electricity from a third party. However, it will also sell that electricity to consumers, said Tyrone Jue, spokesman for the San Francisco Public Utilities Commission. He added that the CCA will be funded by ratepayers and not by the city’s general fund.

CLAIM: PG&E hasn't met California's goal for clean energy? True. California’s Renewables Portfolio Standard recommends that 20 percent of an electric provider’s energy come from eligible renewable resources by 2010. According to PG&E’s website, 14.4 percent of the company's power comes from renewable sources.

CLAIM: Higher bills? Misleading. The city controller’s May 2007 report states there is not enough information for a definite conclusion. “While on the one hand, CCA could result in greater competition in San Francisco’s electricity market, leading to lower prices and environmental benefits, the currently proposed CCA plan could also create a situation where consumers pay higher energy prices than they would with PG&E.”

CLAIM: Will clean power rates be the same as your old rates? Possibly untrue. A May 2007 report from the San Francisco controller noted the possibility that prices might rise. Furthermore, consumers might have trouble picking the electricity plan that best suits their economic needs. “If the selected CCA supplier has proposed a fixed rate plan, consumers would have to estimate the future difference in rates between PG&E’s future rates, something very difficult for the general public to do. Consumers might not have adequate information to make an informed decision on this matter.” In addition, the report points out, potential private sector suppliers using more expensive renewable energy sources might have difficulty keeping their rates competitive with PG&E’s. Since consumers who don’t “opt out” will be immediately enrolled in the CCA, those who are not informed about the issues or their rights may find themselves paying higher fees.


CLAIM: The claim: You'll be automatically enrolled in CCA and opting out will incur exit fees. True, but the dire warning is misleading. According to the CleanPowerSF implementation plan certified in May, four notices will inform consumers on how to opt out. The first two will be issued before the switchover, and the second two within the first 60 days after enrollment in CleanPowerSF. Exit fees are not unusual. PG&E charges the same fees to all customers opting for another electricity provider, according to its tariff Rules Nos. 23 and 22.1.

Is Common Sense Coalition Independent? Not credible. The Common Sense Coalition’s 2008 tax return showed all its contributions — $8.5 million — coming from PG&E. The return lists Dan Richard (PG&E’s former senior vice president for public policy and government relations) as president and director, Nancy McFadden (senior vice president and senior advisor to PG&E’s chairman and CEO) as director, and Steven S. Lucas (partner at Nielsen, Merksamer, Parrinello, Mueller & Naylor, a California law firm that often represents PG&E in ballot campaigns) as principal officer and secretary. The organization’s two greatest expenses are $4.2 million on advertising and $1.9 million on publications.


Athletes Vie With Birds in Golden Gate Park’s Environmental Turf War Fields. A plan to replace natural grass with artificial turf lies at the center of a debate over proposed renovations to the fields. The project is a collaboration between the San Francisco Recreation and Park Department and the nonprofit City Fields Foundation. On April 30, those plans were put on hold by the Recreation and Park Commission, which called for an environmental impact report. The commission reversed an earlier vote of approval, which followed numerous Story: public hearings. The call for Daniel Hirsch an environmental impact // Public Press Photo: report came after opponents Ed Ritger threatened a legal battle. The fight centers around the ability of birds to forage and fly in that area of the park and the desire to allow more soccer players to use the fields. In recent years, the use of artificial turf for athletic fields has increased nationwide, but its rise has also been met with protest due to environmental concerns. Two years ago, Potrero Hill residents protested a plan to install turf at a city-owned recreation center, citing the potential health risks associated with the chemicals found in the turf’s rubber. The opposition prompted the city to assemble a Synthetic Turf Task Force to study the effects of turf on players’ health and the environment. The group’s final report did not recommend a moratorium on artificial turf fields in the city, but it did suggest that each field project be submitted to the Planning Department for review as well as for a California Environmental Quality Act review. The Golden Gate Park proposal includes artificial turf as well as 60-foot stadium lights and an expanded parking lot. Project designers estimate these changes would allow more people to use the fields, tripling the current numbers. Opponents of the plan, a coalition led by the Golden Gate Audubon Society, argue that the city does not know the extent of the environmental impacts. Given that Golden Gate Park’s western edge lies on a flight path for migratory birds, the Audubon Society said the removal of natural grass in the current plans could encroach on the available foraging area for many species. Audubon Society Conservation Director Mike Lynes said he hopes the city will address these concerns in the review process. “We expect at minimum there would be mitigation required,” Lynes said. The decision to postpone the project for an environmental

To turf or not to turf? SF Historic Preservation Commission meeting notes Community members opine about proposed Golden Gate Park renovations.


"The (Chalet Recreation Field) has grassy meadows and leafy trees, song birds and ruminating animals that would be impacted by the proposed artificial structures.” — Cate Bainton, Historic American Landscapes Survey "I have four children and all four of them play soccer.However, I feel that this is a really misplaced project. The thought of changing this pastoral setting…to an artificial turf site with lighting that — as people come down the Great Highway or MLK or JFK drives in the park — will look like in the midst of the trees there’s a shopping mall ... ” — Ed Yarbrough, architectural historian, ICF International "Please help us to stop plastic grass from being installed in our sylvan meadows.” — Nancy Wuerfel, resident of the Sunset District


Soccer players practice in Golden Gate Park, where grass may be replaced with artificial turf in a proposal that has stirred community concerns over environmental impacts, as well as support from local soccer players.

review is expected to delay it by at least a year, according to the Recreation and Park Department. Soccer players say the artificial turf will be a significant improvement on the grass at Beach Chalet, where gopher holes pose a risk of tripping and injury. “Kids will continue to get hurt,” said Shelli Meneghetti, director of the San Francisco Vikings Youth Soccer League. Every year, one in four fields is closed for grass to grow back. For the proposed Beach Chalet renovations, City Fields, a nonprofit created by the sons of Gap founder Don Fisher, would provide $5 million to the city, with $7 million in voterapproved bond money funding the rest. Patrick Hannan, a City Fields spokesman, said the renovations will use materials suggested by the 2008 Synthetic Turf Task Force to avoid the presence of heavy metals or any other toxic materials in the artificial fields. City Fields estimates the city could save 1.5 million gallons of water a year from not having to irrigate grass fields, and the group claims the city could see a 75 percent decrease in maintenance costs. The increased lighting at the fields has also been a contested issue. The illumination could disrupt the annual migration

of numerous bird species, according to the Audubon Society. Local astronomers have also expressed concerns about the potential effect of light pollution on stargazing. The Planning Department’s Historic Preservation Commission held a hearing in April about how the renovations could upset the historic nature of the park, a site listed on the National Register of Historic Places. “Golden Gate Park is one of the city’s most important public and historic resources,” said Courtney Damkroger, vice president of the Historic Preservation Commission. Katherine Howard of SF Ocean Edge, a community group organized against renovation plan, said although they weren’t opposed to artificial turf, residents didn’t want the renovations made at the west end of the park. Mark Buell, president of the Recreation and Park Commission, said he hopes the environmental review process will find a plan that environmentalists and the soccer community can support, but he understands how difficult finding that common ground can be. “Golden Gate Park is many things for many people. I don’t think there is a vision that this is just an environmental sanctuary or just a place to play sports,” he said.

"These wonderful fields that the City Fields Foundation has created have become essentially fitness clubs to the masses. People are playing and exercising. For me, these fields are keeping people alive.” — Toby Rappolt, soccer player "Since U.S. Women have started to show at a national level, the sport has ballooned, it’s huge. We can’t keep up with getting enough coaches out there; we can’t keep up with getting enough fields.” — Jill Lounsbury, soccer coach "Opponents of the project maintain that it violates William Hammond Hill’s 1880s-era vision of the park as a woodland or forest with valleys covered with lower growing shrubs or field grasses. However, in the early 20th century a more pragmatic view of the parks as places of recreation emerged and the development of the western end of the park reflected that shifting view. The Polo Field Stadium was erected in 1907, the first model yacht club near Spreckels Lake was erected in 1909, and by the later 1930s the western end of the park had numerous other recreational facilities, including an archery field, an equestrian center, the angler’s lodge and fishing pools." — John Zwolinski, resident of the Outer Sunset

Contact Daniel Hirsch at: Join the conversation:


swath of ground at the western end of Golden Gate Park has stirred debate among soccer players, neighborhood residents, astronomers and environmentalists. The disputed turf is the Beach Chalet Soccer

CIVICS June 22, 2010 //

S.F. Pride at 40

‘Queer the Census’ Efforts Building for 2020

Amy André's sees first pride month as executive director

New S.F. Pride executive director Amy André in her office.


class status to equality and back again — the Pride has assumed a heightened importance in the LGBT community. The lighthearted theme chosen for this year’s parade, “Forty and Fabulous,” is intended as relief and release. André, SF Pride’s first bisexual woman of color executive director, has been seen as a welcome burst of energy toward continued progress. Pride institutions have their own convoluted histories of discrimination — bisexual and transgender activists were not allowed full inclusion until 1995. This year, SF Pride will honor transgendered communities by inviting them to be the lead contingent in the parade. Wendy Herndon, president of NIA Collective — a local nonprofit for lesbians of African decent — said it was a wise and bold move for SF Pride to make André its director. “That they had the courage to hire her is a positive thing,” Herndon said. It’s difficult to compete with André’s diverse experience. An MBA and MA holder, scholar on bisexual female health issues and director of a documentary film about a mixedrace transgender man, she brings an important perspective to the organization. Yet despite André’s progressive profile, she looks to the past for her inspiration.

“The executive directors before me left some pretty big shoes to fill,” she said. “I’m honored to follow in their footsteps, even while taking Pride in new directions.” A nonprofit membership organization, the San Francisco Pride Celebration Committee is dedicated to education. It also is a grant-giving organization, which has given more than $1.6 million from proceeds of the Pride Celebration and Parade to local nonprofit LGBT organizations and those serving the breast cancer and HIV/AIDS communities. As San Francisco awaits a ruling on the constitutionality of gay marriage, André’s first official Pride month as executive director draws to a close. “My hope is that even when we have full rights as LGBT people, we still continue to have Pride events because these events are not just about fighting for our rights,” André said. “They are also about celebrating our culture and our community.” Oakland Local is an independent nonprofit news hub for Oakland. Contact Tehea Robie at: trobie@ Visit their site at


New Crackdown Checks Fake ID Vending


he U.S. Immigration and Customs Enforcement’s “Secure Communities” program went into effect in San Francisco this month. The federal program checks the fingerprints of people arrested for any crime to determine their immigration status. Sheriff Michael Hennessey unsuccessfully sought to opt San Francisco out of the program, saying it conflicts with a city policy of reporting only those undocumented immigrants who are arrested for felonies. The city currently reports about 2,000 people a Story and Photo: Rosa Ramirez year to immigration authorities, he said, // KALW News adding that the new policy, which could include reports on traffic violations, could raise that number above 35,000. And still that number represents just a portion of the immigrants who are in the country illegally and live in San Francisco ­— many who are able to get a job by obtaining a fake ID, green card, California ID or U.S. birth certificate. In the Mission District, it costs $90 and two hours to buy a new life in the underground market. Along with street vendors luring customers with the smell of sizzling hot dogs or the counterfeit movie peddlers advertising the latest flicks for five bucks are the men selling documents. Dora Trujillo is an immigrant from El Salvador. She once bought a phony green card and Social Security card to get a job in a San Francisco restaurant. She used the fake documents without any problems for years before she got her own documents, this time legitimately, from the Department of Homeland Security. “I am Ana Claire for almost five years,” Trujillo said. Undocumented immigrants interviewed said they need papers in order to work. Many feel torn by having to resort to fraudulent means to earn money honestly. “It’s hard to say “I no have papers’ when you go to looking for a job, you know?” Trujillo said. “They ask for papers. They no complain. You give them from Mission or you give them from immigration. They always take it and say OK.” A reporter on Mission Street on a warm weekday afternoon is approached by an identity vendor within 20 minutes. “They are psychologist, the people who sell documents,” Trujillo said. “Because they know when you need.” The vendor calls out the words, “Micas, micas, micas.” “Mica” is the Spanish slang word for green card. “Ten years ago when I buy my documents, the Social Security is $30, the green card $20 or $30, too,” Trujillo said.“But you buy the three documents is for $60 all. That’s it. It’s very cheap.”

SF Public Press



he little bar on Christopher Street in Greenwich Village was pulsing with tension. Though police raids on New York's gay bars were normal, before this night was over, drag queens would escape paddy wagons, use their high heels as weapons, straddle cops and Story: beat them. Several Tehea Robie // Oakland Local nights of riots Photo: followed, marking Ed Ritger // Public Press the Stonewall Inn — a gay bar in the West Village — as the birthplace of the LGBT liberation movement. Nobody ever thought homos would fight back. The nation’s first Pride march happened a year later. In San Francisco, a modest group of 30 marched down Polk Street. “Forty-one years ago, a fierce and feisty group of individuals fought back against police violence,” said Amy André, the third executive director in SF Pride’s history. “Now, 40 years after that first march, that first commemoration of Stonewall, we are still marching, we are still commemorating and we are still celebrating.” In the wake of Prop. 8 — and the dizzying pendulum swing from second-


The Mission District has become the point of sale for fake IDs.

The going rate now is higher. A street entrepreneur — a slim, Hispanic male, in his late 40s, with dark shades — says a California ID is $90. Another one, which looks real, he said, is going for $200. It’s made with better machines, he said. San Francisco police Capt. Greg Corrales of the Mission station calls the vendors crooks. “The main culprits are involved in the sales of false IDs, that’s their specialty. That’s where they’re making their money,” Corrales said. “They’re experts on it. They’re very realistic looking IDs.”  Although the price is high for most immigrants, the payoff is worth it, Trujillo said. “You pay maybe $300 for the three documents, you know?" she said. “But the big favor they’re giving to you, because maybe you pay only $300 one day but you gain the job maybe you make $1,300 every two weeks.” The vendors decide what name is on the card. “I using the name Ana Claire. My face is no Ana Claire. And it’s not my last name,” Trujillo said. “You think an Ana Claire one small lady, blue eyes. But I am big. I have brown eyes.”  Two days later, back in the Mission, the ID vendor is leaning against the wall wearing the same shades and smiling. A price for the fake ID is negotiated on the street, in broad daylight. The seller walks the reporter to a nearby passport photo shop to get a mug shot. Within two hours, a new identity is provided. Michelle O. Smith, a random name picked on the spot. The date of birth … the Fourth of July. Rosa Ramirez is a student at UC Berkeley's Graduate School of Journalism. Contact Rosa at Visit their website at


or the first time, results of the decennial U.S. census will be used to count how many cohabitating samesex partners and spouses live in the U.S., but leaders of the “Queer the Census” campaign are pushing for even greater changes in years to come. The National Gay and Lesbian Task Force and other organizations want the Census Bureau to include sexual orientation and gender identity in its yearly community surveys and 2020 census. Some of California’s openly gay Story: politicians are pushing the cause Kristine Magnuson as well. State Senator Christine // Public Press Kehoe, D-San Diego, has introduced a resolution urging the federal government to count LGBT (lesbian, gay, bisexual and transgender) people in the next census. Kehoe’s resolution, SJR 28, went before the state Senate Judiciary Committee for a hearing and vote, and was passed on June 17. But asking about sexual orientation for the census doesn’t sit well with everyone. College student Jake Conway, wrote in an April 6 op-ed letter for Yale Daily News that “Forcing people to check a box to categorize themselves as gay, lesbian, bisexual or transgender promotes the understanding that if you are gay, lesbian, bisexual or transgender, you are problematically not straight.” Yet for LGBT people and families, the trouble with the government keeping its nose out of their private lives is that it reduces potential federal resources that might otherwise benefit them. The U.S. Census Bureau’s website says the information it collects “helps to determine how more than $400 billion of federal funding each year is spent on infrastructure and services.” It says that the government allocates money for job training, emergency services, health centers, schools and senior centers based on census reports. The resolution Kehoe wants to send to the president and Congress notes that “same-sex couple families are much more likely to be poor than are heterosexual married families.” Lee Badgett, research director of the Williams Institute at the UCLA School of Law, backs up that statement. “Using census data and other sources of information,” she says, “‘we know that children in gay and lesbian couple households have poverty rates twice those of children in heterosexual married couple households.” Not only does the government base funding on census numbers, but so do most nonprofit and corporate giving programs. Population surveys also have the potential to suggest cause-and-effect correlations and help identify what to investigate when designing studies to address socioeconomic disparities.

To bring visibility to LGBT people and families, and to their underrepresentation in the census, the National Gay and Lesbian Task Force started “Queer the Census” in 2009. The campaign asked individuals to self-identify as gay or lesbian, bisexual, or transgender (or alternatively as a “straight ally”) on pink stickers to seal their census return envelopes. It distributed more than 150,000 of the stickers. The Census Bureau discarded the pink stickers, along with the envelopes, without collecting any data from them, but advocates say that doesn’t matter. “A count of the stickers was not the point. Our campaign not only energized the LGBT community to participate," said Jaime Grant of the Task Force, "but it has moved the Bureau to begin research on LGBT data collection for the first time in history,” The Census Bureau has made strides with the LGBT community. For 2010, it released videos clarifying how they should fill out the census survey to best reflect their circumstances, from marital-or-partnership status to maleor-female gender. For the 2010 survey, the Census Bureau didn’t include any new questions. It’s just using 3 existing questions to come up with estimates of cohabitating partners or spouses. One drawback to this method is that, for their relationship to be counted, the partners or spouses have to live in the same household and be listed with one of them as person 1. Another drawback is that it doesn’t provide detailed information about same-sex parents and each partner’s relationship to each child. Gary Gates, who works with the Census’ “Our Families Count” program, serves as a resource on LGBT demographics and analysis. “We are working with the Census to improve the relationship question to better fit the complex legal situation of same-sex couples. The American Community Survey also includes a marital status question and we are also working to alter that question to include non-marital legal relationships like civil unions and domestic partnerships. "We are working with a variety of federal agencies, including the Census, to encourage them to consider adding sexual orientation and gender identity surveys to government surveys,” Gates said. Ultimately, Congress, the president and the Census Bureau will make these decisions for the 2020 census, but not without unprecedented input from the LGBT community and California lawmakers.

Contact Kristine Magnuson at: Join the conversation:


Why I’m Worried About This Census

Or how the system this time around doesn't add up


n May 1, 635,000 Americans hit the streets ­— from sea-toshining-sea — as employees of the federal government to kickoff the Census Bureau’s Non-Response Follow-Up operations. Their mission, which continues through July, is important: Count every man, woman and child in this land — regardless of race, religion, income, immigration Opinion: status or any Stephen Robert Morse other factors // — specifically, the 28 percent of American households who failed to return the 2010 Census forms that were mailed out in mid-March. As the largest civilian hiring effort in the history of the United States, problems are bound to occur during 2010 Census operations. Unfortunately, because of poor decisions made in the mid- and late2000s that continue with the decisions made by the Census Bureau’s current leaders, the 2010 Census has come to be defined by many as a chaotically disorganized and dysfunctional bureaucracy. This trajectory may very well set up the current headcount for failure. In 2006, the Harris Corporation, an international communications and information technology firm based in Florida, was awarded a $600 million contract from the Census Bureau to create computer systems and software to collect decennial census data with handheld computers. After the company failed in its initial attempt to create an adequate and consistently functional product, the government awarded Harris an additional $200 million to get the job done right. This questionable practice of rewarding failure with more tax dollars of course resulted in a yet another failure. Though the Harris Corporation ultimately created a poorly performing handheld device that was used in

the fall 2009 address canvassing operations of the Census Bureau, the agency’s upper management felt that the devices were unfit for the current non-response follow-up operations (the largest Census Bureau operations). The result is that census-takers, officially called “enumerators,” are using pencils and paper to conduct this massive headcount. This is a pathetic reality in a day and age where not only are other developed nations like Australia using computer-based (and even online) census technology, but even heavilypopulated developing nations such as Brazil have successfully implemented technology to conduct its census. This Census Bureau’s disconnect with the IT world has led to problems. Because the Census Bureau is not using computers to tally the information of the 48 million households that it now must count, it relies on what is called PBOCS — a paper-based operations control system, pronounced “pee box,” as in the place where a cat urinates — to input the data about these rogue households. Unfortunately, the Census Bureau continues to face major problems when it comes to implementing this software successfully, resulting in the software going down for up to a week per IT failure. This is particularly shocking because the Census Bureau decided in 2008 not to use the Harris computer systems and has somehow fell way behind in developing an alternative. Sadly, these days, the Census Bureau seems to be run more by PR professionals in the Public Information Office than statisticians. At his most recent press conference, Bureau Director Dr. Robert M. Groves only glossed over this major IT failure, as if he’d been prepped for hours by a team of flacks. “We continue to struggle with the software system called the paper base operation control system, but we passed, just amazingly, a wonderful threshold last week where we printed out

assignments for all these enumerators,” Groves said. “It worked. ... Not that it is the most loved piece of software in the Census Bureau, but it’s working well enough to get the census done so far.” The above problems are only the ones that were caused by Washington. Many additional problems are created at the regional and local levels. In recent weeks, there have been reports of Census Bureau polo shirts and black canvas tote bags appearing at thrift shops across America and on EBay. Purchasing these items will make it easy for scammers and other unsavory individuals to steal the identities and/or property of unsuspecting individuals by obtaining access to their homes. The elderly are particularly susceptible to this, as they will think they are providing information to genuine federal employees who are actually imposters. For more than a year now, I have personally warned against lax and nonuniform procedures in fingerprinting Census Bureau applicants, as well as the agency’s failure to provide photo identification for its door-to-door employees. (For the record, Census Bureau workers actually use dinky generic plastic cards and black bureau tote bags to identify themselves.) To date, my calls of alarm remain unacknowledged. Though the Census Bureau has already spun the 72 percent “participation rate” as a success over the 2000 Census rate, the government PR machine has once again attempted to dupe America by comparing apples to oranges, since the “participation rate” is a figure that was not even used in 2000. Yes, I’m worried about the 2010 Census … and you should be, too.

Stephen Robert Morse is the founder and executive editor of, a nonpartisan watchdog of the 2010 United States Census. Visit the website:

8 SF Public Press

June 22, 2010 //


HIV, AIDS Gap Widens Between Blacks and Other Ethnic Groups in East Bay Experts divided about the cause of health disparity

Living with HIV Loren Jones, an African American Oakland activist who has been living with HIV for 25 years, talks about what needs to happen in the fight against AIDS in an interview with Gianmaria Franchini.

New HIV cases, Alameda County 1994-2008


s overall AIDS rates fall in Alameda County, the rate in the black community has hardly budged in the past 10 years, making African Americans in this part of the East Bay increasingly overrepresented among sufferers of the disease. Public health experts disagree about why this is happening — behavior, education, stigma and lack of advocacy are all suspected. Which of these factors is most important will determine the best way to tackle the problem, and how to parcel out increasingly scarce resources in an era of growing state and local budget deficit. To put the dilemma in perspective: African Americans make up 13.5 percent of Alameda County’s 1.5 million residents, yet they Story: account for half of all AIDS Danielle Brown cases reported there in 2008. // Public Press Photo: While the AIDS rate for AfMonica Jensen rican Americans in Alameda // Public Press County has been more or less unchanged since 1994, the ratio of the black AIDS rate to that of all county residents has risen 42 percent. Local officials and health experts have varying opinions as to why the gap between African Americans and other ethnic groups exists, and what to do about it. “There is no mystery now about HIV infection, because we know how to prevent every single mechanism of transmission,” said Dr. Arthur Ammann, president of Global Strategies for HIV Prevention, a nonprofit dedicated to fighting HIV and AIDS overseas. “So why do we have more infections in minority populations in the United States? The problem is that it’s a disease related to sexual behavior, and it’s hard to change behavior.” Ammann, who is also a clinical professor of pediatric immunology at the University of California San Francisco, is a pioneer in the field of HIV prevention. He has researched HIV prevention methods since the early 1980s, and was the first to discover two of the three ways HIV is transmitted. He believes that the solution to Alameda County's AIDS crisis resides beyond education. “Does education change behavior? Not under these circumstances,” he said. “I think we are at the point where we have to say, ‘No, we must find out how to protect the people who are getting infected.’” Conversely, some activists and public officials say AIDS education should be Alameda County’s highest priority for combating the high rate of AIDS among African Americans. Kabir Hypolite, director of the Alameda County Office of AIDS Administration, said education is needed

New AIDS cases, Alameda County 1994-2008

now more than ever, and he blames the high rate of AIDS among the county’s black residents on diminishing fear about the virus, blind trust in the success of anti-retroviral medications, and false impressions about who is at risk. “It is still common for people to think that it’s gay white men that are catching HIV and AIDS, but it’s actually everyone’s problem,” Hypolite said. “At this point, there is no such thing as a high-risk group in my mind.” Hypolite suggests that effective AIDS education in Alameda County begins with reaching out to groups that have not been mobilized, and working with community leaders who can relay the importance of AIDS education. In addressing the widening AIDS gap between African Americans and other racial and ethnic groups in Alameda County, activists and county officials are placing AIDS education on the back burner, claiming that stigma is the primary issue to tackle. Growing numbers of black residents are reluctant to get tested because HIV and AIDS are often associated with being homosexual or a substance abuser. As a result, late testing has become prevalent among Alameda County African Americans; many who seek HIV testing receive AIDS diagnoses. Stigmas linked to cultural values keep people underground and make it more difficult to identify individuals in need of care and services. “I know how it affects the people that we work with, but I worry about how it’s affecting the people who won’t come to us,” said Kevin Bynes, program director of AIDS Project East Bay, a nonprofit organization in Oakland that provides HIV and AIDS prevention and health services. “We have not moved beyond judging,” said Hypolite, “so people will hide their status, will not know it, or will avoid getting care because they are afraid of being ostracized or shunned in some way.” Activists and local officials seem to agree that lack of advocacy for black residents has compounded the ongoing AIDS crisis. Some argue that methods that raised awareness about HIV and AIDS prevention in the past, especially in San Francisco and its gay community, have not carried over across the Bay Bridge. They claim that demographics play a huge role in gaining public support. Ammann said blacks have been part of the AIDS epidemic since the 1980s; however, the virus affected white males with political connections to AIDS advocates as well. Loren Jones, an Oakland activist and African American woman who has been living with HIV for 25 years added, “In 1985, we were not getting information on

Darrel Thigpen (right), 32, was diagnosed with HIV in 2005. He's the assistant manager at a pet food store in Oakland.

this side of the Bay, because it was perceived that this disease was being spread through the gay, white male population, most specifically in San Francisco. That's the kind of illogical thought process that leads to this backlog of people who are getting this disease — obviously that was a false premise.” Jones, among other black AIDS activists in Alameda County, serves a vital role in raising awareness within the black community, and she rallies with her community in order to target county officials and make their issues visible. “We have this whole idea that HIV and AIDS doesn’t have a face — it does have a face, and it's black," Bynes said. "We have experienced no greater emergency as black people, and as a community, we need to get involved and do something." While Alameda County's public health dilemma persists, and experts remain divided about the cause of the problem, several advocates have presented possible solutions. Ammann and Hypolite encourage practical methods to control AIDS infection rates. One method is partner notification. Another is contact tracing, in which anyone who has been in sexual contact with an infected person is tested and treated. Both have been problematic in the past because of the stigma associated with HIV and AIDS, but studies have shown they are effective means of outreach and prevention. Public officials encourage Alameda County residents to remain persistent in lobbying for funding and policy changes in order to contain a public health dilemma whose end is long overdue.

Contact SFPP writer Danielle Brown at: The story continues:

On activism It’s part of my survival, because I am a low-income African American woman myself – I always have been. I was born to a welfare mother, and have had inand-out struggles with severe poverty.  My activism comes naturally to me. I was diagnosed with HIV more than 25 years ago, in ’85 or ’86. I don’t directly link the disease to race as much as I do to lack of knowledge.  To see that the situation has continued, and has not improved that much for black women, is a major concern.  For me it has been a 25-year struggle, and to see that information has still not reached people in a way that is empowering for them, I think is very disturbing. My reason for being involved is that I really believe as individuals we can stop this. We can stop the madness.  I don’t think the public is aware of the numbers.  People are not aware of a whole age group of women that are already dead.  The fact is that AIDS is the number one cause of death for African American women 24-35 nationwide. This is according to the CDC. Quite frankly, I think if it were white women, it would be on the news every day. Within any culture, these are a woman’s most productive years. These are not disposable people.  To have them silently disappearing is not a good thing.  America is a very proud country, and that is not something to be proud of.  On the role of education and poverty When you are poor, you do what you need to do to survive.  Unfortunately, and this is not just for black people, your worth as a sex object is marketable. I will say that I’m a fairly attractive woman.  I’ve been homeless, and I’ve been on the street.  I’ve had men tell me, ”If I was a woman and I had what you had I wouldn’t be homeless.”  And everyone knows what that means. That’s very sad, but it’s the truth of the matter.  That’s pretty much where it’s at for black women. If you need something, you have to give something up, and the preference is sex.  Of course, there is never any conversation about using condoms and protection.  On whether the black community has difficulty talking about AIDS openly I think that has been the case. But I think that this is a generation that ought to be able to break that. People talk about sex in the media and in every other kind of way, so there is no reasonable explanation for why we cannot talk about protecting yourself from this disease. On why African Americans suffer from AIDS disproportionately That is the case.  I am not going to be one to deny these numbers, although

I do question them. I don’t know that we’re clear that these numbers reflect everyone that needs to be tested. The testing is pushed to target groups that are perceived as high risk. If you are a white woman who has not had many sexual partners, or who lives in a small town somewhere even in California, your white doctor is not going to suggest the possibility of an HIV test, because he doesn’t believe you are at risk. Whereas if you are a black woman and you look and dress a certain way, you will be perceived as high risk. On what the statistics indicate I think that they are irrelevant, because they give the perception that the virus is spread by race. AIDS is a disease that passes from person to person through unprotected sexual contact. This isn’t a situation where white people are just having sex with white people, and black people are having sex with black people.  Even the questions on surveys and CDC reports, they do not ask the race of the people someone has had sex with. They ask if you are HIV positive, if you shared a needle, if you had unprotected heterosexual or homosexual sex and so forth. If I am a heterosexual black woman, the natural assumption is that the person I have had sex with is a black man. I have two daughters, their fathers are white.  In ’85 we were not getting information on this side of the Bay, because it was perceived the disease was being spread through the gay, white male population, most specifically in San Francisco. That’s the kind of illogical, pseudo-scientific thought process that leads to this backlog of people who are getting this disease, according to ’statistics,’ they should not have the disease to begin with.  Obviously, that was a false premise. Nobody was looking for it over here.  On whether women have a strong voice or figures who give them a strong voice when it comes to this issue Yes, we definitely do.  The organization that I work with, WORLD (Women Organized to Respond to Life-Threatening Diseases) was founded in 1991 by Rebecca Denison in her apartment. She was shocked to find out she had this disease, and also that there was no information about it that related to her as a woman.  For a woman, particularly a young woman who has not yet had children, a sexually transmitted disease is devastating and very serious. Any woman would want answers and expect them to be there immediately, and at that time, there were no answers for her. Doctors were not even comfortable talking about it. Now things are different.  On what needs to happen It has to stop. Our preference is a cure.  Even if we don’t have a cure, the message is so simple: You have to use protection no matter who you have sex with or how you have it.  The message here in Oakland is, “AIDS stops with me.” It’s very clear. 

ASK AN ENVIRONMENTALIST QUESTION: I know airplanes burn enormous amounts of fuel. What’s the carbon footprint comparison between driving the 400 miles between San Francisco and Los Angeles and flying? — Jessica, the Marina This kind of carbon calculus is notoriously tricky, but very roughly speaking, flying to L.A. will spew about two and a half times more carbon into the atmosphere than driving there — about 435 kg of CO2 versus about 180 kg. Still, getting exact numbers would mean considering an almost endless web of progressively more maddening variables. For one thing, airplanes release their exhaust higher in the atmosphere rather than at road level, and climatologists believe this intensifies the effect of its greenhouse gass emissions two or threefold. Weight must also be taken into account: a Boeing 757 full of pregnant women will burn Advice Column: more fuel than one containing a single elderly woman. Jon Mooallem // Public Press On the other hand, how heavy is the car you’re driving? And Illustration: how fuel-efficient? Is it a belching old sedan? A Prius? OK, but is Justin Allen the Prius’ trunk filled with iron ore? And what about carpooling? // Public Press Do you have any LA-bound friends? Can you round up strangers and vagrants through Craigslist, or even pick up early-adopting hobos along the way through nifty new iPhone ridesharing apps like Avego? Bear in mind that the more people you pack in, the less carbon you emit per head, although added weight, as with airplanes, means you burn more fuel. But how many can you fit in a car? Two? Three? Seven? Go far enough into this thought experiment, and you wind up awed and chastened by the ecological unassailability of the clown car. Q: Can I compost my old clothing? — Lisa, Glen Park Clothing is not accepted by San Francisco’s citywide composting program. But a small number of scraps of 100 percent cotton clothing, provided they’re free of dyes and bleaches, should mix into your own backyard compost just fine. Also, coconut bikinis!

wind power, which is enough electricity to power all its stores in San Francisco, its corporate headquarters and then some. Of course, all the wind power production that Safeway underwrites merely gets fed from those various wind turbines into the electrical grid, where it congeals with electrons from every other conceivable energy source, and they all begin zipping around madly and indiscriminately, like the sperm in that Woody Allen movie, spurting out of walls everywhere whenever something switches on. Thus, the probability that your neighborhood Safeway is powered at all times, exclusively, by wind power is damn close to zero. Maybe some Safeway-funded wind power streams into a Safeway; maybe none of it does. Maybe, in some twisted, grocerial cosmic joke, it all ends up powering the Trader Joe’s on Masonic. Still, my contact at the EPA explains: “Safeway’s claim to be ‘running on wind power’ is a statement we support.”

Q: The Safeway near my house has a sign that reads, “This store is powered entirely by wind power.” What’s up with that? It’s got to be hooked up to the same electrical grid as the rest of the city, right? Do they have a bunch of people farting into it or something? — Ruben, Lower Haight Oh come on, Ruben. I can tell by your tone that you already know the answer: It’s not true. But it’s not exactly a lie either, and it’s not nearly as brazenly deceptive as some of the other green-washing we’re accustomed to seeing on a daily basis – and which you, Ruben, have apparently been using as a leather strop against which to sharpen your gleaming snark razor. Since 2005, the Safeway Corporation has been a part of an EPA program called Green Power Partnership, which requires businesses and organizations to purchase a certain amount of renewable energy. Actually, Safeway buys something called RECs – renewable energy certificates — which function like currency, corresponding to the price of generating a certain amount and type of clean energy and entitling the buyer to the bragging rights of having produced or used it. Right now, Safeway is buying the REC-equivalent of 90 million kilowatt hours of

Q: In the early '90s, the hole in the ozone layer and aerosol cans were all anyone talked about in terms of environmental issues. Now it’s hardly mentioned. Is it fixed? Is it still growing? — James, Glen Park Actually, it was the mid-’80s. But 43 countries came together in 1987 to limit the emissions of chlorofluorocarbons and other ozone-depleting chemicals, averting what might have otherwise been a disastrous situation by now, if not fixing it outright. The Montreal Protocol, as this agreement is known, is an inspiring precedent to keep in mind as we face more severe environmental threats. Clearly no progress would have been possible without such swift, multinational cooperation, and without the support of the general populace, which, as is now apparent, really rallied behind scientists’ anti-aerosol findings because they saw a chance to stop women from cementing their bangs into hideous waves and towers with hairspray. We can’t rest on our laurels though. This year scientists raised new alarms about another potent threat to the ozone layer not addressed by the Montreal Protocol: nitrous oxide gas. If the world can once again put our differences aside and band together, it will be miraculous. It will also be just the kind of clear global referendum on Phishheads and dentists so many of us have longed for.

SCIENCE & HEALTH // June 22, 2010

The Southeast Treatment Plant was built in 1952 and expanded several times. The plant is located on Phelps Street near Third and Evans streets in the Bayview District. It treats an average dry weather flow of about 67 million gallons a day and can treat up to 250 million gallons a day when it rains.

Bayview Sewer Plant Raises Billion-Dollar Question

Price tag for replacing aging digesters could reach twice that amount


lans to replace San Francisco’s aging sewage digesters have the BayviewHunters Point community divided and the city staring at a potential $2 billion price tag in what some see as an test of the city utilities commission’s new environmental justice policy. At the end of June, members of a Bayview-Hunters Point community task force will present the San Francisco Public Utilities Commission with the pros and cons of three alternative locations for the digesters. The aging and polluting units sitting at the corner of the neighborhood’s sprawlStory: ing wastewater treatment Bethany Fleishman // Public Press plant still process most of Photo: the city's sewage. Max Rosenblum // Public Press “It’s not going to be a consensus document,” said Bayview resident and Southeast Digesters Task Force member Alex Lantsberg. He is one of the voices advocating for the digesters to be moved out of the neighborhood – which he said would be smart urban planning as well as reversing an environmental injustice, since the move would free up 12 blocks in Bayview, a neighborhood many say will soon face significant redevelopment. Doing so, however, would cost $2 billion. Others say keeping the digesters in the neighborhood will more easily boost redevelopment – putting a twist on the "not in my backyard" position commonly taken by people in the shadow of a polluter. Keeping the digesters in the neighborhood would cost $1 billion.

SMELLY, OBSOLETE EYESORE Whichever option is chosen, the utilities com-

mission and neighborhood residents say upgrading the Southeast Wastewater Treatment Plant’s sewage digesters, which sit just 25 feet from the nearest houses on Phelps Street, is imperative and long overdue. Besides being a smelly eyesore, the pancake-shaped digesters — which use heat and bacteria to literally digest sewage — use old technology that needs repair and are vulnerable to earthquakes. For many in the largely low-income and African American districts, the underlying issue is being subjected to yet another situation that negatively impacts their environment. Besides sharing their yards with the plant that treats 80 percent of the city’s wastewater, they have borne the brunt of pollution from the old Naval shipyard in Hunters Point, the recently decommissioned Pacific Gas & Electric Co. power plant and the 101 and 280 freeways that segregate their neighborhoods from the rest of the city. San Francisco Department of Public Health studies show the residents have higher incidences of asthma, heart disease, infant mortality and other health problems than the rest of the city. "This is a community that has been dumped on and continues to be dumped on," said Malik Looper, executive director of Literacy for Environmental Justice, which educates young people in Bayview-Hunters Point. The SFPUC said it wants to change that. The Hunters Point Power Plant operated by PG&E was shut in 2006. Now the SFPUC is looking at the role of the wastewater treatment plant in the district. The digester upgrade is part of a new $3 billion to $4 billion sewer master plan, the first since the 1970s. The agency is planning to overhaul the city’s entire sewer system, but the focus and most of the cost – $1 billion to $2 billion – is on the Bayview plant’s sewage digesters.

On top of the nasty odors from the digesters, until recent years neighbors also had to contend with raw sewage gushing into streets and yards during heavy rains. The SFPUC ordered the sewage leaks fixed and began the public process to fix the digester problem. As part of the sewer master plan, the agency set up the Southeast Digesters Task Force to allow community and business leaders to review and give recommendations on replacing and relocating the digesters. "We want to be a good neighbor," said SFPUC spokesman Tyrone Jue. As part of the sewer master plan, the SFPUC is also working to green the entire system. Jue said this will mean “not just bigger pipes, but slowing the flow” of wastewater into the overloaded Bayview plant. The agency will accomplish this by reducing the amount of storm water that goes into the drains – by reviving some of the city’s buried streams and by building permeable planted zones on some street corners. Two proposals keep the sewage digesters in Bayview. One simply locates new upgraded units within the plant’s lot, but farther from the houses on Phelps Street. The other does the same in an adjacent city lot known as Central Shops, where city vehicles are kept and maintained. Each of these proposals will cost around $1 billion, according to SFPUC preliminary estimates.


The third proposal – costing an estimated $2 billion – is to move the digesters along with the rest of the solid waste treatment facility to the Pier 94 Backlands – 23 acres of unimproved Port of San Francisco land just behind the waterfront, between Islais Creek and India Basin, northeast of Bayview. The liquid wastewater treatment fa-

cilities do not need upgrading and would not be moved out of Bayview. Moving the digesters would free up 12 blocks of land – creating an opportunity for new redevelopment for Bayview-Hunters Point, task force members said. Lantsberg, who is also the chair of the SFPUC Citizens' Advisory Committee, sees new housing and businesses along the Third Street light-rail corridor if the digesters go to Pier 94. He called it "a rare opportunity to set a clear agenda for the development of the community infrastructure for the next 50 to 100 years and institutionalize strong environmental policies." Another benefit, he added, is that "if you can move this blighting facility, you're able to remove barriers on the neighborhood's western edge and integrate the neighborhood with the rest of the city." Task force member and Bayview resident Karen Pierce thinks a solid waste facility at the Pier 94 Backlands should be incorporated into a proposed “eco-industrial park” of sustainably designed business and industrial buildings that would share resources and recycle each other’s by-products. Mike McGowan, also on the task force and staff scientist at Arc Ecology, a Bayview-Hunters Point social justice and environmental organization, said that moving the facility to Pier 94 would create more temporary construction jobs than those created by just upgrading it in Bayview. And since the entire wastewater treatment plant would be divided into two locations — the liquid treatment in Bayview and the solid treatment at the pier — new permanent jobs would be created because of some duplication of duties at the two sites. For Pierce, Pier 94 seems a long shot. She said the SFPUC appears to favor relocating the digesters within the plant lot, which borders Third Street and Evans Avenue. However, Jue is firm that the SFPUC does not have a preference. “I honestly believe any of the alternatives could happen,” he said. Jue said new technology would reduce the number of digesters needed. That, combined with moving the digesters farther back from Phelps Street, would eliminate the odor problem for neighbors. Pierce disagreed. She said that would only remove the digesters from the closest neighbors' line of sight and would not reduce the smell and pollution.

SOME WANT STATUS QUO Surprising both Lantsberg and the SFPUC are task force members and vocal residents who back the two alternatives that keep the plant in their neighborhood. “There is an inexplicable constituency for the status quo,” Lantsberg said. James Bryant is part of that constituency. But he believes he has good reason for it. Bryant, San Francisco chapter president of the A. Philip Randolph Institute, a national black labor and civil rights organization, is not on the task force, but attends the meetings. He said he thinks that the extra time, expense and effort to move the digesters out of the neighborhood would threaten the completion of the project. He said most of the people in the community he talks to want a shorter-term project. He said people worry that “it could be one of those projects that never gets done.” He added that historically, other similarly ambitious projects in the community become “so compromised, so modified,

9 SF Public Press

they weren’t the dream people had” because of a lack of resources or political will. He added that keeping the digesters will fuel growth. “Bayview needs a shot in the arm, and this is a shot in the arm," he said. The SFPUC is willing to spend at least $1 billion on the project and is promising to address residents’ concerns regarding the digesters' assault on the senses. Because of this Bryant thinks the community should go for relocating the more aesthetically pleasing new digesters at the Central Shops lot or similarly “blighted” lots in the area – places that Bryant said are uglier than any sewage treatment plant. Doing so would allow the community to “rebuild right on their own land and get rid of the big nasty eyesore in their backyards,” he said. “Where are we going to get funding to do something else?” Others are less positive about the benefits of keeping the facility in Bayview, but are still advocating against moving it to Pier 94. Neighbors may just have to accept the political inevitability that the plant has been in the neighborhood for decades and will not move now, said longtime Bayview activist Espanola Jackson, who sits on the task force. She thinks the treatment plant will stay put, and she is focused on making sure it is adequately upgraded.


Task force members hope that regardless of the solution, the SFPUC will put into practice the environmental justice resolution that it approved at a public meeting in Bayview in October. The resolution encourages the SFPUC to reduce the disproportionate environmental and social impacts of its activities on poor communities and communities of color in the city. The agency says this would be achieved through increased involvement by, and job opportunities for, disadvantaged communities, as well as “considering community impacts in all our construction projects at the earliest stages,” said Public Utilities Commission General Manager Ed Harrington. Bayview-Hunters Point residents at the public meeting said they hoped that the resolution will bolster the SFPUC jobs training program that has been in place intermittently since the 1980s as part of the agency’s mitigation of its enormous impact on the neighborhood. This program allows residents of the Bayview-Hunters Point ZIP code to go through a rigorous apprenticeship to gain skills for mid- and high-level technical and managerial jobs at the SFPUC. This summer, after hearing recommendations from the task force, the SFPUC will submit one or more final proposals for the new digesters to the city's Planning Department for environmental review, a process that Jue expects to take two to three years. Construction of the new digesters, however, will not begin for five to nine years after final approval, depending on the location chosen, Pier 94 taking the longest. Funding for the digester upgrade will come through revenue bonds. That leaves city residents — who drink and flush and are therefore ratepayers to the SFPUC — on the hook to pay back the bonds over about 20 years.  Rates will absolutely have to go up to cover the costs,” Jue said. How much and when are still to be determined. Contact SFPP writer Bethany Fleishman at: The story continues:

Berkeley Scientists' Next Green Energy Alternative: Stomach Bug to Biofuel


team of local biotech researchers may have found a way to avoid using essential food crops for fuel by genetically modifying harmless strains of a bacteria most people associate with human food poisoning. The result is an extremely expensive fuel — hardly competitive with fossil fuels at $25 per gallon – but marks the beginning of a new look at green energy. Scientists led by University of California, Berkeley, professor Jay Keasling created an alternative for biodiesel production harnessing E. coli, the bacteria responsible for Story: foodborne illnesses. Ambika Kandasamy A recent study found // Public Press that E. coli could synthePhotos: Monica Jensen size production of biodie// Public Press sel from plant waste, saving the resources — corn, peanut oil, soybean oil or sugar beets – spent on today’s leading “green” fuel, bioethanol. The results of the study, written by Keasling’s team at Lawrence Berkeley National Laboratory’s Joint BioEnergy Institute, were published in the journal "Nature" earlier this year. Seizing prime agricultural land to cultivate high-profit crops for biofuels instead of food is a problem for both bioethanol and similar biofuels, said Chris Field, director of the Carnegie Institution’s Department of Global Ecology at Stanford University. “You want to be careful that you’re not taking away critical food resources while producing biofuels,” Field said. It’s called “indirect land use change.” Supposedly eco-friendly biofuel shifts food crop production to new land and, ultimately, increase pressure for forest destruction for new agricultural space.

Araidopsis thaliana is fed to the E. coli to produce biodiesel in the Joint BioEnergy Institute in Emeryville.

The overall result of bioethanol may actually be greater carbon emissions. The Joint BioEngery Institute team says that the E. coli-synthesized biodiesel takes less energy to produce. “The entire process can be done with the principle of green chemistry inside the cell,” said Eric Steen, a researcher at the institute and a lead author of the study. “Biodiesel lowers carbon emissions when you look at the total life-cycle of its production, but is also dependent upon what we’re feeding our E. coli to produce it,” Steen said. “If we’re feeding plant biomass that is directly digested by our bug, the carbon sink is better than that if we’re

Dawn Chiniquy, a graduate student, cares for the Arabidopsis thaliana, a model plant that can be fed to E.coli to produce biodiesel.

feeding more processed sugars.” Steen said bodiesel produced by E. coli is easier to separate than ethanol, which requires an energy-wasting distillation process that releases carbon dioxide. The findings also suggest that biodiesel produced by E. coli could be transported in existing fuel transportation pipelines. “What we’re producing floats in water – it’s more like petroleum,” Steen said. “It’s easier to distribute than bioethanol.” Bioethanol has the potential to corrode pipelines during transport. The simplicity of biodiesel production by E. coli could also prove to be cost-effective in large-scale production. “We’re producing a product that is much easier to separate and process,” Steen said.

Eric Steen said the nonpathogenic E. coli is "coddled" and kept at 37 degrees C.

“There’s less energy required and therefore less associated cost.” Despite having similar properties to petroleum, biodiesel created by E. coli is more expensive than fossil fuels, and Steen said improvements are in the works to make it more feasible for consumption. Though it will take a few years, Steen said, the next step is to increase the scale of production. One of the partners in the study, the South San Francisco-based biotechnology company LS9, will pursue a business model for producing fuel by varying the process at its Florida plant. The researchers stressed that their process was safe. They modified E. coli by elevating the bacte-

ria’s fatty acid production levels and introducing genes from other organisms, such as brewer’s yeast. Though some strains of E. coli cause life-threatening illnesses – for example, the pathogenic strain of E. coli O157 leads to about 70,000 cases of infections every year in the U.S., according to the Centers for Disease Control and Prevention – the researchers said their strains of E. coli are non-pathogenic and safely discarded.

Contact SFPP writer Ambika Kandasamy at: The story continues:

10 SF Public Press

June 22, 2010 //


Fiction / MysteRy & suspense

“Every reporter worth his or her notepad is a sleuth at heart. McHugh brings this truth to life … .” — Dan Rather, TV news anchor, Dan Rather Reports

“People who love San Francisco and appreciate a good mystery will find Paul McHugh’s Deadlines a page-turner with unforgettable characters and a realistic view of crime.” — Sheriff Mike Hennessey, City and County of San Francisco

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Journalist Spins Riveting Tale Of Murder and Intrigue Along the California Coast



Getting Schooled in ‘Post-Racial’ America San Francisco-based comedian W. Kamau Bell launched his solo comedy show in 2007. Bell says he hopes his audiences leave his performance with a different perspective on race.


ny artist who promises to end racism in about an hour will earn his fair share of cynics. Comedian W. Kamau Bell was well aware of that when he launched his solo comedy show, “The W. Kamau Bell Curve,” in fall 2007. During a run at San Francisco’s Shelton Theater a few months later, Bell watched from the corner of his eye as a middle-aged couple shuffled out of the room. He was roughly 15 minutes into a well-honed comedy set that lampooned the idea of Story: Rachel Swan “post-racial” Amer// Special to the ica. He resisted his Public Press Photo: knee-jerk tendency Monica Jensen to heckle the man // Public Press and woman as they quietly left their seats. “They weren’t making a huff or anything,” he said. “In my mind, I’m just like, ‘Oh, they gotta go to the bathroom.’ I didn’t think anything of it. They never came back, but I also never noticed.” After the show, Bell’s producer, Bruce Pachtman, looked somber. “That couple left,” he said. Apparently the man was repelled by Kamau’s material. He was white and characterized himself as a progressive. “I feel like I’m being blamed,” the man told Pachtman. “I don’t have to listen to this; I’ve done a lot for black people.” Bell was unruffled. “If I’m a straight white guy and I go to a show about racism, I would expect to get something on me — that they’d start flinging the s— stick my way,” he said. “I thought, ‘That is hilarious. Absolutely hilarious.’” In fact, San Francisco progressives – particularly the ones who have “done a lot for black people” – were the impetus for Bell’s show. He began writing the first bits just a few months after the Don Imus flap, when

IF YOU GO: What: Comedian W. Kamau Bell When/Where: 8 p.m. June 30 at the Rickshaw Stop, 155 Fell St.; and 8 p.m. July 13 at Punch Line Comedy Club, 444 Battery St., both in San Francisco. Details: Visit, or

the MSNBC talk show host in April 2007 called the Rutgers University women’s basketball team — made up of eight AfricanAmerican women and two white women — “nappy-headed hos.” At that time, America had begun conceiving itself as a “post-racial” society, even though the label seemed unwarranted. Celebrities like Sarah Silverman engaged with race in a way that challenged social norms, but also teetered right over the edge of political correctness. (Kamau says his beef with Silverman was a big inspiration for “The Bell Curve.”) Some, like Michael Richards and Rosie O’Donnell, had already crossed the line. With the advent of YouTube and an increasingly permissive shock culture, racial outbursts had become a common media event. But somehow, these so-called celebrity meltdowns weren’t cause for major concern or discussion. Imus might have been scorned, but he was still treated as an aberration. Many people thought that if we cast a blind eye to racial inequality, it might disappear on its own. Bell wouldn’t buy it. “You know after a while, this starts to hurt,” he said. “I felt like Russell Crowe’s character in ‘A Beautiful Mind,’ looking through magazines, making connections and drawing from one magazine article to

another. I was really trying to draw these connections and prove that there’s actually this culture of racism that we’re accepting as just being crazy celebrities, when it actually can affect the populace as a whole.” Bell is not a provocateur per se. Born in Chicago, he launched his comedy career 13 years ago when he moved to San Francisco. Race has always informed his bits and he’s always told jokes in monologue form. Many critics would cite George Carlin and Lord Buckley as his proper antecedents. “I would transcribe their bits just to see what they looked like on paper,” Bell recalled. “I bolded the punch lines. It just seemed magical.” Bell’s interest in racial themes aligns him with other local performance artists who’ve made it their business to analyze race — both as a construct and a lived experience. He belongs in the same camp as poet Chinaka Hodge, rapper Boots Riley, monologist Jennifer Jajeh, novelist Adam Mansbach and emcee Ise Lyfe. Among comics, though, Bell stands out because of his format and his intentions. He started off with a one-hour routine that was partly anecdotal and largely about spoofing celebrities. After Barack Obama’s election, the show transformed and became mostly political in nature. Now, it’s a pedagogical tool. He’s trying to prove something to liberals of San Francisco and to do it, he needs visual aids. “San Francisco is 6 percent black — I’ve heard it reported at 7 percent — and for a city that considers itself one of the most liberal cities in the world, we aren’t even as black as Jasper, Texas,” he said. “That’s impactful enough that the show can be built on that point.” More than 21/2 years in business, Bell has incorporated YouTube clips and PowerPoint presentations into “The Bell Curve.” He’s

SUMMER EVENTS FOR YOU AND YOURS Coro Hispano presents: ¡Fandango! X June 25-26, Presidio Officers' Club, 50 Moraga Ave. at Arguello, San Francisco Presidio, (415) 431-4234, Free. Songs and dances of Hispano-Mexican California. AXIS Dance Company @ the Yerba Buena Gardens Festival June 26, Yerba Buena Gardens, 760 Howard St, San Francisco, (415) 543-1718, Free. New outdoor work from a troupe of 35 dancers, disabled and otherwise. Meet and greet follows. Hammers of Misfortune, St. Vitus, Stone Axe, Walken June 27, DNA Lounge, 375 11th St., San Francisco, (415) 626-1409, $17/$20. San Francisco’s Hammers joins old-school doomsters St. Vitus for an evening of heavitude. Blue Bear School of Music Band Showcase June 27-30, Café du Nord, (415) 861-5016, $12-$20. Local music debuts for a three-night showcase.

Circus Bella: Gotcha! July 3, Yerba Buena Gardens, San Francisco; July 10, DeFremery Park, Oakland; July 16, Studio One Art Center, Oakland; July 18, Dimond Park, Oakland, (415) 205-8355, www.circusbella. com. Free. An open-air, one-ring circus troupe featuring dazzling professional acts and a topshelf circus band. American Bach Soloists: Academy Summerfest. July 8–18, San Francisco Conservatory of Music, 50 Oak Street, San Francisco, (415) 621-7900, Daily concerts, free public lectures and master classes. Another Hole in the Head: Three Weeks of Indie Horror, Sci-Fi and Fantasy July 8-29, Roxie Theater, 3117-16th St, San Francisco, $10-$11.50. The Complete Beethoven Violin Sonatas feat. Wayne Lee and Miles Graber July 16, 20, 23, Crowden Music Center, 1475 Rose St., Berkeley. (510) 559-6910, Call for ticket prices.

learned to stay on top of the news cycle, mine Wikipedia for material and try the premise for a new joke on Twitter, right before he presents it onstage. He goes to town every time a big race story hits the media — like Henry Louis Gates getting arrested for breaking into his own house. (Bell’s take: “Now that there’s a black president, they have to invent new crimes for black people.”) Bell takes a rather imperious approach to comedy, but he does occasionally glean something from audience feedback. Within a week of the walkout incident, he found an answer to the white guy who’d done a lot for black people. He’s now perfected the bit, which pays homage to “five white guys from history who can say they’ve done a lot for black people.” They are: Abraham Lincoln; Lyndon B. Johnson (for ratifying the Civil Rights Act); abolitionist John Brown; Branch Rickey (who signed Jackie Robinson to the Brooklyn Dodgers); and Olympic silver medalist Peter Norman, who stood by while his fellow medal-winners made Black Power fists at the 1968 Olympic ceremony. According to legend, Norman also was complicit in the act, because he suggested that gold medalist Tommie Smith and bronze medalist John Carlos share Smith’s gloves after Carlos forgot to bring his own. “You see?” Bell recently asked his audience at Berkeley’s La Peña Cultural Center, after presenting a slide of the famous 1968 photograph. “Peter Norman did that ‘think outside the box’ thing that you white guys are so good at!” People laughed. A few looked embarrassed. But nobody walked out.

Contact Rachel Swan at: Join the conversation:

SCAN ME with your smartphone for more! Or visit

Alfred Hitchcock’s “Psycho” with live Bernard Herrmann score July 17, Davies Symphony Hall, (415) 864-6000, $30-$70. The 9th Annual Outsound New Music Summit July 18-24, The Community Music Center, 544 Capp Street, San Francisco, Performances $12/$8. Experimental film, free jazz, vocal mayhem, electronic noise. Free: Touch the Gear Expo, cardboard-instrument-building demonstration. Jonathan Richman July 21-23, Swedish American Hall,; (415) 861-5016. The legendary songsmith croons for your affection. Music@Menlo: 2010 Festival, "Maps & Legends." July 23–August 14, Atherton, Menlo Park and Palo Alto venues, (650) 330-2030, Concerts, recitals, symposia, master classes, free events.

Sleepytime Gorilla Museum July 24, Great American Music Hall, 859 O’Farrell St., San Francisco, (415) 885-0750, $17/$19. Bay Area art-rock legends warp time, space and genres live on stage. Bicentennial of Mexico’s Independence with the SF Symphony July 25, Mission Dolores Park, (415) 864-6000, Free. Cabrillo Festival of Contemporary Music. August 1–15, Santa Cruz Civic Auditorium, Mission San Juan Bautista, (831) 426-6966, Call for ticket prices. CounterPULSE Artists-in-Residence Showcase: Laura Arrington & Jesse Hewit August 5-8, CounterPULSE, 1310 Mission St., San Francisco, (415) 626-2060, $15-$20 sliding scale. Emerging dance-theater artists contemplate femininity in a double bill of performance.

conservationist is trampled to death by a horse on the seaside wildlands of Cornu Point, donated to the state by her father as a nature preserve and now so manicured and exclusive that the public is discouraged from walking its trails. An intern reporter at The San Francisco Post-Dispatch discovers that the victim is the same elderly woman he spoke with on the phone just days before — a caller dismissed by newsroom veterans as a nattering crank. The reporter investigates and is beaten into a coma when he trods onto the noReview: man's land that separates the elegant Leslie Guevarra // Special to the park from the secretive and scruffy enPublic Press clave of Castello, a community whose mania for privacy is enforced by vigilantes known for the unbridled application of their fists. Enter Colm MacCay, the anti-hero of Paul McHugh's novel "Deadlines" (Lost Coast Press, $16.95), a besotted, arrogant and wildly insecure newspaper columnist beyond his prime, who swaggers and staggers onto the story and wants to make it his own. Unraveling the murder and the assault before the competition scoops him, could resuscitate MacCay’s faltering career — and, of course, bring a measure of justice to the victims. Is he driven by ego, idealism or remorse? MacCay's rationale is as much of a mystery as the motives for the crimes. In fact, the question of "why" is even more imPaul McHugh portant than "who" in McHugh's quick-paced tale of abused personal and public trust. It's the latter that lies at the heart of the quick-paced story. In "Deadlines," the transformation of protected wildlands into a luxury resort is just as heinous as the slaying of land activist Beverly Bancroft and the beating of reporter Sebastian Palmer. "It's said that eternal vigilance is the price of freedom — actually, it's the price of everything," McHugh said at a recent reading at Green Apple Books in San Francisco. "Ripping off the commonwealth is not just the crime of the century; it's been the crime of the last 10 centuries." McHugh's sense of justice and adventure, as well as his experiences as a newsman at the San Francisco Chronicle (where we both worked for more than 20 years), inform virtually every aspect of his novel.

It's said that eternal vigilance

is the price of freedom — actually, it's the price of everything.

Though Cornu Point, like the town of Castello, is fictional, its inspiration can be found in reality. In the mid-1990s, McHugh's exposé on the Asilomar Conference Center in Monterey led to an overhaul of the operation and state practices. It was a call from a reader, ignored by his colleagues, that prompted his investigative articles. The template for Castello can be found in seaside communities on the San Mateo County coast that were the favored spots for rum-runners in the days of Prohibition — as well as in a North Bay town once notorious for pulling down road signs so that anyone who didn't live there couldn't find it. McHugh, who was the co-editor and main feature writer for the Chronicle's Outdoors section, is well versed in the Bay Area's back roads and their lore, lending the novel a keen sense of place. His experience as a skilled outdoorsman emerges in the athleticism of some key characters and those whose only physical exertion involves elbow-bending also ring true. And surviving denizens of the M&M Tavern, a reporters' hangout once just steps away from the Chronicle and the San Francisco Examiner, may wax nostalgic over McHugh's description of the sawdust- and debris-strewn floors at the S&S Pub frequented in "Deadlines." While veteran newsies and newsmakers may recognize certain endearing or appalling traits in McHugh's characters, none is the fictional embodiment of a past coworker, he insists. Fictional or not, the characters already have a fan base among readers, says McHugh, who promises that a sequel is in the works Engaging and entertaining, Deadlines is a must-read for mystery lovers — as well as anyone with a deep affection for San Francisco, the greater Bay Area and its newspapers.

Leslie Guevarra is a longtime Bay Area journalist. More information about McHugh and "Deadlines" can be found at Join the conversation:

SCENE June 22, 2010 //

11 SF Public Press


Playwright Octavio Solis: ‘Shake These People Up’

Provocative thoughts from a Texas transplant who has 'always felt like an outsider'


ctavio Solis’ critically acclaimed plays have been produced around the country, from the Oregon Shakespeare Festival to San Francisco’s Campo Santo and The Magic Theatre. His most recent work, “The Pastures of Heaven,” based on the Steinbeck novel, is in production until June 27 at CaliforInterview: nia Shakespeare Theater. Karen Macklin The transplanted Texan // Public Press Photo: and Sunset District resident Ed Ritger has primarily written about // Public Press El Paso and the Mexican border, but in recent years he has turned his pen to San Francisco, writing about bars, bandits, poetry-writing wolves and his adopted “city of love.” (Full disclosure: I worked for Solis in 2002 as assistant director for his play "Dreamlandia" at the Thick Description Theatre Company.) QUESTION: Despite the recession, you had three world premieres in the last year, and five additional productions. Yes, last year was my most successful year as a playwright, both financially and artistically. Q: You first arrived in San Francisco back in 1989 as a Texan actor, theater artist and burgeoning playwright. What was that experience like? It was a big time to be here because of the big theater scene that was going on ... and I was very determined to assert my Texan identity. I said “howdy,” wore my cowboy boots and Texan belt and bolo ties a lot. ... I couldn’t figure out who I was, what the city wanted from me, what I needed from the city. The only thing I knew was that I wanted all of the plays that I ever wrote to be performed here, even if they premiered somewhere else. I said, “This has to be my home.” Q: Your plays about El Paso have garnered a strong following by audiences in the Mission. Why do you think that is? A lot of the people in the community are newly arrived immigrants or are first generation like me. Or their parents are still undocumented workers. So they have contact with the immigration laws on a very gut level. My characters deal with that. And all of them have a sense of belong-

ing to a different land that a) they have to let go or b) they tend to go back to at some point. They want to belong but they still feel like outsiders.

and homophobia and class consciousness that are still very present ... no matter what we say or how we stand on this issue or that issue. In “Pancho and Lucy,” I put these thoughts in the mouth of a puppet who was so racist, so sexist, so vile. ...

Q: Even though you say that San Francisco now, after 20 years, finally feels like your artistic home, do you ever still feel like an outsider? I've always felt like an outsider. That's sort of been my modus operandi. Even when writing plays about the Latino community. And now, I feel like I can no longer say that I am Mexican. ... I just feel like an American now. ... In the end, I think I am always trying to figure out who I am. Q: When did you begin writing about San Francisco? The first play I wrote that took place in San Francisco was “Gibraltar” (2005) ... for the Oregon Shakespeare Festival. It takes place in a condo in the Marina. But I never lived in the Marina, I was just imagining what it would be like. I did work a lot in the Mission, though, and the Mission was getting so gentrified that we were losing our bars. I wanted to do a play about the iconic bars of the Mission, so I wrote “The Ballad of Pancho and Lucy” for Campo Santo (2005). The play was based on the story of this couple that had robbed Mission bars. ... I wanted to make it something really happy and full of dancing and singing, and Campo Santo said, “OK, do it, man.” One of my favorite projects was “Lethe” (2006), which I wrote for Cornerstone Theater. I set that in a senior center here in S.F., and it could only have taken place here. We developed it here ... and cast local seniors and caregivers in it. But I am also working on a new musical about San Francisco. I really wanted to call it “Cloud Atlas,” but there is a novel called that, so I might call it “Cloudlands.” I am doing it with Adam Gwon, a young, bright composer in N.Y. who is really one of the best, and it’s a commission for South Coast Repertory. ... It’s kind of a dark tale for a musical, and it’s about misbegotten love in San Francisco. Q: What does it mean to write about San Francisco? This city is about love. This city feels like Paris

Q: What San Francisco plays would you like to write in the future? I’d like to write a play about the racist tensions between Latinos and blacks in the city, which are manifested most clearly in prison. ... I’d also like to write a play about the mayors of the city — they’re all very colorful, none more colorful than Willie Brown. He really was a dealmaker. He's a real San Francisco original. But the next play I want to do is called “The Werewolves of North Beach.” It’s about modern day beat poets. When the moon is full, they turn into poetry wolves and start howling and writing poetry everywhere, and instead of biting people, they start citing haikus in their faces. ... It would be a followup to “Pancho and Lucy,” another silly musical.

Playwright Octavio Solis’ piece “The Pastures of Heaven” runs until June 27th at CalShakes in Orinda.

to me. You can fall in love turning a corner. You see lovers everywhere of every ilk. You go to the Castro and see men kissing; you see people of different races kissing; lovers kissing in Dolores Park. Tourists come here to have their anniversaries, honeymoons. ... S.F. casts that spell on people. ... And, of course, it’s also got its sinister side. Q: You recently won a GLAAD (Gay & Lesbian Alliance Against Defamation) Media Award for "Lydia’s" portrayal of gay characters in El Paso. I would never have written “Lydia” if I lived in El Paso or Dallas. I am aware of the issues that LGBT people face every day here. That awareness has to bleed into my work in some respect. It’s there in the new musical, as well ... I didn’t want to only depict a heterosexual relationship.

Q: How else does San Francisco influence your work? The racial diversity of the city. My daughter is half-Mexican and half-white from Kentucky. Almost all of her friends are half-something, halfsomething else. Asian, black, Latino, American Indian — we’re all part something, part something else. It’s the culture of the future and it’s happening right here in this city. It’s a laboratory … a real mix of people. And this diversity of the city is starting to be reflected in the writing that I do. It’s a very liberal town and people wear their liberal credentials on their sleeve. In Dallas, I knew my audience. They were really conservative. I knew what buttons to push. Here, I think, “How do I shake these people up?” ... I have to try and get under their liberal skin and find out what they’re hiding; there are traces of racism

Q: Local theaters are suffering financially at the moment, or losing their spaces. What does this feel like to you? I’ve been here 20 years and in that time I have seen theaters come and go. I feel like the climate right now is full of opportunity. Yes, I think that theater companies and arts organizations are affected by this recession, just like everyone else. But they’ve always been in a state of recession. They’re probably better equipped to deal with it than anyone else. They’re tough little ships and they'll weather the storm. Q: Will you stop writing about Texas? I kind of cherish Texas and, at the same time, revile it. ... But I’ll never leave (El Paso) because so much of who I am is still there. It’s a city on the cusp of two eras, two countries, two ways of life, two ways of seeing the world. ... I was raised half a mile from the border. ... I will go back to El Paso a lot, but I am feeling like now I can also write about San Francisco. Contact Karen Macklin at: Join the conversation:


Amid Budget Cuts and Institutional Neglect, San Quentin’s Arts Education Volunteers Keep Working


n a cool Friday night in March, near the corner of Haight and Steiner streets in San Francisco, the hip boutique Tweekin Records hosted an unusual gallery opening of paintings, sketches, poetry and elaborate collages. It was created by inmates at San Quentin State Prison. Organized by Kate Deciccio, an artist and a mental health and substance abuse counselor in Story: San Francisco, the Ezra Carlsen exhibit featured // Public Press Photos: her own work, Monica Jensen along with work by // Public Press Eddie Sanchez and “Absent” Helean from San Quentin, and by inmates in the John Howard Pavilion at St. Elizabeth’s Hospital in Washington, D.C. — Deciccio’s former employers. Deciccio came to the Bay Area three years ago to explore mental health in correctional institutions. Today, she volunteers one morning a week in San Quentin, where she runs an art program with roughly half a dozen inmates. “There’s only two criteria to be in my class,” she said, “a pre-existing interest in art-making and a history of mental health symptoms.” It’s estimated that one in six California inmates suffer from mental health problems, but the topic is largely stigmatized on the inside. “Mental health is not something that they’re sitting around the table rubbing elbows chatting about in the chow hall,” Deciccio said. “When and if they want to, or need to, discuss the psychiatric part of their experience, the door’s open.” During graduate school, Deciccio researched community-immersed alternatives for working with patients with mental health symptoms in Washington, D.C. She ran arts programs in the John Howard Pavilion, a forensics unit for criminally insane inmates. Inspired by the Arts in Corrections program of California’s Department of Corrections and Rehabilitation — a once-thriving service that brought volunteer artists into teaching positions in all 33 California prisons — Deciccio approached the artist facilitator in San

interest in art. This, she said, is better for stabilizing mental health symptoms than punitive measures or antipsychotic medications. Most of her students have been paroled, yet Deciccio fears the men won’t find the support they need on the outside to cope with their symptoms. Current law prohibits prison volunteers from keeping in contact with their students once the students have left the institution, which Deciccio bitterly criticizes. She said volunteers are “facilitating and fostering inmates to be engaged in productive, positive activity. It’s absolutely crazy to castrate any positive contact that could actually plug a person into community life.”

Paintings on exhibition at Tweekin Records in San Francisco on March 12 included art (above) by Kate Deciccio, mental health and substance abuse counselor, and “Corporate Bailout” (right) by Eddie Sanchez, inmate at San Quentin prison. Quentin and pitched her idea for an art class tailored specifically to those grappling with acute mental illness. The class began with an outside grant, but the funding dried up, and she has since been entering the prison as a volunteer. Arts in Corrections emerged in the late 1970s amid new interest in prison arts programs. San Quentin Prison was the program’s showcase, bringing in theater workshops from the Marin Shakespeare Co., yoga and meditation from the Insight Prison Project, and the William James Association’s Prison Arts Project, established in 1977 at the California Medical Facility at Vacaville, which sends about a dozen artists into San Quentin each week, teaching drawing, painting, creative writing, guitar and printmaking.

CUTS IN 2003 The beginning of the end came in 2003. First, the state’s budget turmoil led to deep cuts in Art in Corrections, including the elimination of artist facilitators in several institutions. San Quentin was an exception until early this year, when the facility’s artist facilitator position was finally cut. Laurie Moore, director of the William James Association since 1989, said the most severe cuts to arts programs in San Quentin have come since Gov. Arnold Schwarzenegger tacked the “rehabilitation” moniker to the Department of Corrections in 2005. “Arts in Corrections is, in essence, dead,” she said. Today her program operates without official support, even

though her teachers reach as many as 300 students directly and hundreds more through performances and art shows inside prison walls. The cuts come at a time when California’s “streamlined rehabilitation model” saw $250 million slashed from programs, including drug abuse treatment, vocational programs and education. Close to 1,000 rehabilitation employees were laid off across the state, the majority of them in education. Chris Brady, San Quentin teacher until the recent layoffs, said the state’s numbers are misleading, because some teachers elected to retire rather than take pink slips or demotions. All told, 184 educators, including Brady, were demoted to records analysts in prisons while others were reassigned as librarians or administrative support. Brady currently works in the California Medical Facility in Vacaville, reviewing inmate case files. In San Quentin, more than 30 positions were cut, leaving only eight teachers remaining for an institution with nearly 5,000 inmates. Those remaining, Brady said, are mainly relegated to administering tests. By state law, all inmates in California must take the Test of Adult Basic Education and are then assigned to work, vocational or education programs according to their score. “It comes down to values; what we think is important and where we are going to put money,” Deciccio said. Currently much of the Correctionsrun education is “worthless,” Deciccio said, and while some teachers are committed to helping their students, that’s


not always the case. “There’s nothing about the messages in that space that say to a person, ‘you’re capable to learn, you’re capable to become a thinking (person) that’s successful and constructive and can offer something useful to your world when you leave,’” she said. The result is that Corrections relies increasingly on volunteer programs like Deciccio’s, the William James Association and others. Diane Ketelle, a professor of education administration at Mills College in Oakland, began working in San Quentin as a tutor in the prison’s Richard E. Burton Adult School, teaching literacy, English as a Second Language, and GED prep courses. After the layoffs in March effectively

ended the program, Ketelle volunteered to teach an autobiographical writing class for inmates. Though San Quentin is home to Death Row, the vast majority of the prison’s inmates will be released to re-enter society. Ketelle and Deciccio work with those in the minimum-security H Unit, a place of large, overcrowded dormitories and prisoners serving relatively short terms. “Most of my guys are dealing with major anxiety, a lot of them have paranoia and depression,” she said. “It’s an unsettling space for anyone, but it’s a really unsettling space for someone who’s experiencing mental health symptoms.” Part of the design of Deciccio’s class is to build relationships with her students based on trust, empathy and a shared

Deciccio’s dream is to create a collaborative space where parolee artists can live and work in a co-op environment with community artists – one with individual apartments and shared studio space. Many of the San Quentin volunteers harbor similar goals. Ketelle said she has been searching for a forum to publish her students’ autobiographies, and Moore, the director of the William James Association, wants to organize a San Quentin blues festival. Meanwhile, Deciccio organizes art shows, like the one in San Francisco’s Lower Haight nightlife district; she wants her students to have clear artistic goals when they’re released, something to keep them motivated to produce positive work. Also, getting her students’ art into a public forum allows people on the outside to see that inmates are not always the pariahs they’re made out to be. “You have an object that’s evidence of an inmate working really thoughtfully over a period of time,” she said. “So when a viewer … experiences that artwork, it allows them to consider more the soul and meaning of a person who’s sitting inside the prison.”

Contact Ezra Carlsen at: Join the conversation:

12 SF Public Press

June 22, 2010 //



What If?




argaret Trost was living in Cottage Grove, Wis., and just 34 years old in 1997, when her husband, Rich, collapsed suddenly in an asthma attack. He was gone in just 15 minutes, en route to the hospital. “We were talking about how we were going to slow down,” Trost said. “We just realized that time was so precious and that we needed to spend more time together.” Little did she know that devastating turn in life a decade ago would lead her to Haiti. Well before January’s devastating Story: earthquake, Trost’s quest to David Iverson begin a new life resulted in an // KQED TV Photos: unlikely partnership with a Josiah Hooper charismatic Catholic priest to // KQED TV Video Editing: address hunger in one of the Peter Borg poorest countries on earth. // KQED TV “I’ll never forget it,” Trost said when she heard Father Gerard Jean Juste. A year after her husband’s death, she had moved to Berkeley and then embarked on a volunteer mission to Haiti. There, the Catholic priest talked to the group about hunger. Twenty percent of Haiti’s children



first met Michael Brewer in 2005 when I the food program is even more desperately needwas in Port au Prince reporting on Citie ed now. Soleil, a notoriously violent ghetto at the She sees the relief in the children’s eyes when time. she places food in their hands, she said. Michael, a Texas native and a registered nurse The hunger that was there before the earthturned child advocate, ran a nonprofit organizaquake is only magnified now, she said, and there tion called Haitian Street Kids Inc. and spent a aren’t many options. Week in and week out, the lot of time in Citie Soleil helping homeless chilWhat If? food program feeds about 2,000 children. I don’t recall what we talked about, other dren each day. than he promised to introduce me to some Trost raises the money but what makes this street kids. But our schedules diverged and we program distinctive is that all operations are run never got together. However, we kept in touch by Haitians. Trost says this is key. periodically through e“I think it’s critical to be working alongside a Story and Photos: mails after I left. Haitian community, for them to be running the J. Malcolm Garcia When the Jan. 12 program,” she said. After all, she doesn’t live in // Public Press earthquake struck HaiHaiti, she is still learning Creole and she doesn’t ti, I e-mailed Michael know how to run a program in Haiti. immediately. He told “They have designed the food program in a me he had lost the four houses he had estabway that works.” lished for his program. Like the kids he helped, Lavarice Gaudin directs the program’s Haitian he was homeless. He established a camp on top staff. The What If? Foundation is now branching of a desolate hill and lived in a hut surrounded out, beyond the kitchen, and into the school. by about 30 of his teenage kids he had been able Public education is not the norm in Haiti. to locate after the quake. He was trying to feed Most schools are private, and the annual cost of them, raise the money to re-establish his proseveral hundred dollars per pupil is more than gram and meet his own needs. most parents can afford. Michael’s plight felt more than The What If? Foundation now pays a little familiar. Before I became a for the schooling of more than 200 reporter, I worked with homeless students each year. people in the Tenderloin. I remem“You see how much we accomplish two takes ber the 1989 Loma Prieta earthin 10 years,” Gaudin said. “My hope quake and the resulting damage to for the organization is to make a difthe building housing my nonprofit ference, because the children are the agency at the corners of Golden future of Haiti.” Gate Avenue and Leavenworth Street. City funds New challenges arose along with the initiaintended for homeless services were diverted totive, however. Father Juste, the man whose vision ward earthquake relief and I had to scramble to inspired Trost, passed away last year. The Cathokeep my doors open. But now I was a reporter. lic Church asked the food program to move out I asked Michael if I could stay in his camp for of the church rectory it has called home. a week for a story. He agreed, but warned me I The What If? Foundation met the challenge. would be miserable. On this return trip, Trost was able to look over a “Bring plenty of insect repellent,” he said. plot of land which the foundation has just purOn April 25, 2010, Michael met me at the Port chased. It’s a wooded acre not far from the food au Prince airport. We climbed into the back of a program’s current location. The land will be truck and sat on a wood bench, jostled back and used for more than a school. forth as the driver negotiated traffic on the un“We’ve always had a vision of a school,” she even pitted road. Kids on the street shouted at said. “Not only to educate children but an opporMichael and ran alongside the truck. He waved, tunity to have a community center, an opportuhis thick red hair swept back from his forehead nity for a technical school where things could be by the hot, grit-filled breeze peppering his face. built or made or sold to generate income.” After driving a few miles, we turned up a And so a project born out of sorrow is changsteep hill. Rocks spewed out from beneath the ing the face of the future: A child — and a step tires as we passed row after row of huts covered — at a time. The Haitians have a saying, “piti piti with plastic white and blue tarps. Dogs scavna rive,” “little by little we will arrive.” enged between the huts and children chased For Trost, the project has provided an opportuthem, barefoot and sweat-soaked, in the stifling nity to be in a partnership to change some things heat. Cresting the hill, the truck slowed to a for the better. stop near a cluster of square shaped huts. A few “To right these wrongs, to do the little bit we boys lounging on logs and rocks squinted at us can, to make a difference for these children for their parents,” she said. “And so in that sense it gave me back that part of me that I feel I lost after Rich died, that spark had gone out. “They’ve taught me that it’s always important to take a step, that every bit matters. And that’s made all the difference in my life.”


Swift RegItal 8pt +10t

are malnourished, more than any nation in the Western Hemisphere. “He said, ‘I have a vision for a food program for the hungry children in my community. They come to me every Sunday and they say, ‘Mon Pere, Father, mwen grangou’ – I’m hungry.” He described how it broke his heart that he wasn’t able to feed them.” “There was something that lit up inside of me,” she said. “What if I could help him with a food program?” When Trost got back to her new home in Berkeley she started the What If? Foundation. Its sole purpose is to raise money to feed hungry children in Haiti. Within months, the program was underway. Slowly it grew. In a nation beset by everything from violent coups to violent hurricanes, the food program survived and prospered. Then came the earthquake of Jan. 12. “I just knew it was catastrophic and was terrified for that area,” she said. She thought of the food program. All the children would have finished eating in the outdoor cafeteria. She wondered if they were alive, and if they were safe. Three days later, she learned that not only had everyone survived, but the food program was back in business. In fact, within days of the quake, when food distribution was still snarled throughout Port au Prince, the What If? Program was feeding upwards of 5,000 people a day. Trost returned to Haiti in April. She saw that

This story originally aired on KQED's This Week program as part of a collaborative reporting project with the PBS NewsHour. Contact KQED writer David Iverson at: Join the conversation:

Michael Brewer in Haiti.

Port au Prince as it now stands after the Jan. 12 earthquake, which exacerbated the already desperate conditions in many parts of Haiti's capital.

while the dust generated by truck settled over them. Michael wiped his forehead, considered the dry, cracked ground around us, the complete lack of shade beneath a sky white with heat, the empty cans of food licked clean by the dogs and littering the ground, along with cigarette butts and discarded fruit. The air was motionless. This was home now. Michael had been in Texas fundraising when the earthquake struck. He flew back to Haiti, stunned by the numbers of collapsed buildings he saw, the bloated bodies piled like cords of wood on street corners. He still smelled the rot of death months later. He wondered how so many people became trapped in buildings. Why didn’t they just run out? Then he experienced a 5.8 aftershock. Zero notice, he said. He was in bed and felt the power of it instantly. Everything began falling. He lost his balance, stumbled to the floor. It was like a bulldozer was slamming his room. No way out. It was that sudden. My first night in the camp, a tall man in illfitting clothes approached Michael and began talking nonstop. He laughed, talked more, gestured wildly, laughed and continued talking. He lives in another camp and wanders here from time to time, Michael said. The kids called him the crazy guy and asked Michael to kick him out, but he refused. He and the boys had little to do but survive. If the crazy guy wasn’t around, Michael said, they would have nothing to distract them. So he let the crazy guy stay and babble, his voice as loud as those of the boys demanding Michael’s attention. They needed clothes, food. When Michael had a house, the boys never


ping into a point of maybe allowing some additional drilling off the coast of California off existing platforms – slant drilling, back in towards the land into state property, the so-called Tranquillon Ridge project, which ... the governor was supportive of, but of course, a few days after the incident he withdrew his support for that project because I think we were all disappointed in the human element here that apparently contributed to what’s happened.

Gulf Spill Puts Conservation in Spotlight

Commonwealth Club panel sees disaster as a 'game changer' The Commonwealth Club of California’s Climate One series of programs brings together leaders from business, government and civil society to discuss clean energy. These highlights are from a May 18 panel discussion on offshore oil drilling. The panelists were Cathy Reheis-Boyd, president of the Western States Petroleum Association; Dan Miller, managing director of the Roda Group and former president of AskJeeves; Michael Brune, executive director of the Sierra Club; Jim Boyd, vice chairman of the California Energy Commission; and Greg Dalton, director of Climate One, vice president of the Commonwealth Club of California and the panel moderator. —Edited by Taylor Wiles

Dalton: This spring, President Obama opened up new tracts of deep ocean waters to oil exploration and development. Just a few weeks later, the Deepwater Horizon oil rig plunged into the Gulf of Mexico. Will the country finally get serious about conserving energy and investing in renewable transportation fuels? What will be the economic and environ-

mental impact of oil gushing from the ocean floor in the Gulf of Mexico? Cathy, let’s begin with you with regard to the Western States being the representative here for the petroleum industry. We have a situation in the Gulf where there are three companies involved. What is the scope of this?

Reheis-Boyd: I think it’s a real game changer. The incident itself certainly doesn’t impact current supplies, because it was a discovery well; it was an exploration well. It does, I think, symbolize the issue around energy security. We’ll never be energy independent with the amount of imports that we have in this country and certainly in this state, but I do think that it signifies a look to the future and how we can diversify… I do think, in California, it’s a different situation. We have very different facilities here … they’re fixed to the ocean floor. They’re 150 feet down instead of a mile, so they’re easy to access if something did go wrong. I think we have a

begged. They got up at such-and-such a time, ate at such-and-such a time, attended school, came home. Now they had no schedule. Adrift, they worried they would be left out of something. What that something was they didn't know, and the not knowing scared them more than the earthquake had. So they hit up Michael all the time for smokes, food, money, something — anything — not to feel left out and abandoned. Just to keep his attention on them. I wilted from the heat inside my hut and left the door open. But other huts surrounding it prevent the rare breeze from coming through. One hut belonged to Kendy, a kid who has lived with Michael since he was 10 when Michael discovered him outside a hospital, homeless with a broken leg. Kendy scrawled the names of his girlfriends on the walls of his hut: Kendy and Minion; Kendy and Monioniz; Kendy and Loulie; Kendy and Krystie; and Kendy and Donnuela. Kendy was asleep during the earthquake. When his room started shaking, he panicked and tugged frantically at his door, forgetting to unlock it. The walls began collapsing and he jerked at the doorknob screaming until his roommate unlocked the bolt. The door swung open and they ran out. On the street, everyone was yelling. Buildings fell and the ground shifted underfoot, people emerged from the debris bleeding and ghostly, and Kendy kept running. Michael had other kids in camp who, like Kendy, had been with him for years. They stay for the security of the only constant adult they

Dalton: [Cathy,] are your members actively investing in supporting renewables, or are they resisting the transition to renewables? Climate One panelists

very good track record here in the state and a very good safety record.

Brune: I was very happy, Cathy, to hear you talk about how this is a game changer and it prompts a need to accelerate a conversation about diversifying our energy supply. It’s good to start off on an area of agreement.

Miller: I also think it’s interesting that if this spill didn’t occur, we would have taken all this oil and put it in our cars; it would have been in the atmosphere.

It would have been invisible, but it still would have had great environmental damage. I think if we recognize these costs, we can move closer to the alternatives that are out there and are not yet quite cost effective, but if we stop subsidizing the fossil fuels and start subsidizing the renewables and the other alternatives like electric vehicles and things like that, we can actually very rapidly move toward a better future.

Boyd: Well, it has already changed the dialogue because California was slip-

Reheis-Boyd: I think our companies are becoming energy companies. I hope one day I can change the name of our association to be that. I think petroleum will be in the future for a very long time, certainly all of our lifetimes and probably all of our kids’ lifetimes, and then we’ll see after that. I think, again, if you are building this bridge, you have to look at what it’s going to take you to get there, and we should keep making strides, making improvements, making things cleaner, diversify as fast as we can and then hopefully in the future we might meet some of the goals of AB 32 (the Global Warm-

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ing Solutions Act), which in 2050 is to reduce our emissions 50 percent.

Brune: We will be on oil for as long as we allow ourselves to be using oil. … The United States currently uses about 20 million barrels every day. … If we electrify our transportation fleet and chase out all of the SUVs, big truck, gas-guzzling cars and all the vehicles that we drive in California and around the country, we’ll save more than nine million barrels every day when we complete that job. Finally, about the political positions about some of your member companies, it’s ironic that you bring up AB32, Cathy, because three of your member companies are now funding the campaign to delay AB32. The state of California is the only state in the country that doesn’t have a severance tax on oil companies. Reheis-Boyd: … What this particular tax does is it puts California number one in the nation as the most heavily taxed oil-producing state in the nation. What that does is it just reduces our ability to produce domestically, and it increases the loss of jobs.

Contact Taylor Wiles at: Join the conversation:


Why American consumers and businesses should care if the Yuan is revalued


While a stronger renminbi makes Chinese products more expensive here, it also makes U.S. products relatively cheaper there, and in general allows U.S. exporters to better compete with Chinese competitors all around the world. The U.S., Germany, Japan, and other economic powers have long accused China of keeping the price of its currency artificially low, to make sure its weed whackers, air conditioners, cordless drills, and other consumer products are the cheapest around. This likely will still be a big topic at the G-20 global economic summit coming up next weekend in Toronto. But the talk will be less contentious than it might otherwise have been. “The [currency] move will help China deflect criticisms on its currency policy at the G-20 meeting, and reduce tensions between China and its major trading partners,” reads an analysis from IHS Global Insight. Currency value is as much a part of the price of a product made in another country as is the price of raw materials like plastic and cardboard. And Beijing historically has intervened in global markets to make sure the renminbi remains cheap compared with the

dollar, the euro, and the yen. That is one reason Chinese manufacturing has grown so fast in recent decades that at the moment, in dollar terms, it has drawn equal in value to manufacturing in the U.S. A cheap renminbi provides world consumers cheap imports, which they like. But it also takes away millions of domestic manufacturing jobs, which they don’t like. And it affects China’s consumers as well, by making imports in China more expensive, and feeding Chinese inflation. That’s why a floating renminbi should constitute a “rebalancing” of the world economy that would be good for everyone, say many U.S. economists. Indeed, China’s announcement that it would allow the renminbi to float had an immediate effect on financial markets Monday: The currency strengthened to its highest level in nearly two years. The real question now, according to some critics of China in the U.S., is whether Beijing’s move is cosmetic, and simply intended to placate the world in advance of the coming G-20 meetings.


Russia’s Medvedev on Silicon Valley Reconnaissance Mission


ussian President Dmitry Medvedev's visit to Silicon Valley this week to meet with technology leaders is part of a larger strategy for the U.S. and Russia to improve business ties as the two countries try to “reset” relations with the incoming Obama adStory: ministration. Daniel B. Wood “This is the first // Christian Science Monitor highly visible, concrete evidence that there are major changes taking place in attitudes toward one another on the commercial side,” says David Kemme, an author and international economist at the University of Memphis. Medvedev is scheduled to meet Wednesday with Gov. Arnold Schwarzenegger in San Francisco, tour Silicon Valley — including a meeting with Google CEO Eric Schmidt — and give a speech at Stanford University.He then heads to Washington Thursday for talks with President Obama. Dr. Kemme says the U.S. and Russia have made

progress on the political front with Washington’s indefinite postponement of antiballistic missiles in Eastern Europe and agreements to increase cooperation in Afghanistan. Trade between the two countries consists mostly of raw materials — oil, aluminum, titanium and fertilizers — amounting to $18.4 billion. That makes Russia the United States’ eighth-largest trading partner. Part of Medvedev’s interest in touring Silicon Valley lies in talking with entrepreneurs there about launching a Russian version of the hightech hub — to be called Skolkovo, outside Moscow. "Russia recognizes that it cannot rely on a resourcebased economy forever, and has a strong scientific and intellectual history upon which to build an innovation-driven economy,” says David Wack, a Russiabased lawyer with Squire, Sanders & Dempsey L.L.P. He said Russia escaped the financial collapse and ensuing rebound of commodity prices, with steady finances, low external public debt and high currency reserves. “Russia is looking to deploy these in a manner that will drive future growth, and the current president is


quite serious about this,” says Wack. He notes there have been previous attempts to lure U.S. venture capital funds into the Russian market, including the government-sponsored Russia Venture Company, which was modeled after Israeli incubator funds, and which attracted interest from a few US fund managers. Now, the Russian government appears to be much more serious and is offering incentives such as eliminating the capital gains tax and relaxing visa rules. "That said, Russia will have to create regulatory bodies and make much deeper reforms to the judiciary in order to create a suitably attractive environment for many venture capital investors," says Wack. American businesses have been eager to expand into Russia’s giant market, and will be watching Medvedev’s visit for signals that ideas have moved beyond the realm of natural resources, says Kemme.

Contact Peter Grier and Daniel P. Wood at:

Published by since February 2002, News You Might Have Missed brings you breakthrough coverage of important but overlooked issues and underserved communities. Get the whole story at

INTERNATIONAL  Asia-Pacific HIV on the Rise

 Costa Rica Ecotourism Goes Boom

 Antarctic "Ghost Mountains" Revealed

Ninety percent of gay men in Asia-Pacific nations are criminalized and denied access to HIV prevention, according to a new public-health survey. HIV rates have hit "alarming levels" among gay and bisexual men and transgender people in Asia and the Pacific, researchers said. AIDS educational materials are censored in Singapore and China, and condoms are confiscated as evidence of criminal activity in Cambodia, Mongolia, Thailand, Nepal, the Philippines and elsewhere. In China, police have raided HIV-education events, while Bangledesh, Malaysia and Papua New Guinea punish men in gay relationships with jail terms of 10 years or more. The sponsors of the report called on regional governments to recognize the "legal context" of the epidemic, which they say will only worsen without "effective, human rights-based national HIV responses."

Hotel and vacation home construction along Costa Rica's Pacific Coast threaten biodiversity and the booming ecotourism industry there. Dubbed "ant development" by Costa Ricans, the new construction is causing "environmental and aesthetic deterioration," the report finds. Researchers also said cruise-ship traffic is an ill-advised strategy for building local economies. The two-year study assessed the impacts of tourism and related development from Guanacaste in the north and south to Golfo Dulce and the Osa Peninsula — one of the 25 most biodiverse places on the planet. Researchers called on the government to reject a proposed international airport on the peninsula, and for strict enforcement of building standards at the Gulf of Papagayo. They said some resorts there have "blatantly violated regulations on waste disposal and protection of beaches, mangroves and coral."

Scientists at the International Polar Year conference in Norway unveiled startling new images of Antarctica's Gamburtsev Mountains, a huge and mysterious "ghost range" lurking under more than a mile of ice. The radar images reveal a dramatic landscape of rocky summits, deep river valleys and liquid, not frozen, lakes, all hidden beneath the ice. The range rivals the Alps in scale and is roughly the size of New York state. The new radar survey produced images far more detailed than coarse gravity data could show. Flying twin-engine light aircraft the equivalent of several trips around the globe, and establishing a network of seismic instruments across an area the size of Texas, a U.S.-led, international team of scientists in 2009 not only verified the existence of the mountain range, which is thought is to have caused the massive East Antarctic Ice Sheet to form, but also created a detailed picture of the rugged landscape.

Primary Sources: Asia Pacific Coalition on Male Sexual Health, United Nations Development Program

Primary Sources: Inter Press Service, the Center for Responsible Travel, the Peace With Nature Initiative

Sources:,, Xinhuanet. com, Scientific American,,

NATIONAL  Alzheimer's Spikes for Blacks, Hispanics

 Alaska Burns, Lower 48 Wait Their Turn

 Beyond the Cul-de-Sacs of Doom

Black and Hispanic Americans are much more likely to develop Alzheimer's Disease than U.S. Caucasians. A report from the Chicago-based Alzheimer's Association found African Americans are about twice as likely to develop the disease than European descended Americans; Hispanics face about 1.5 times the risk. The report found no genetic link, instead citing "health conditions like high blood pressure and diabetes," as well as socioeconomic factors, such as lower educational and income levels. Also of concern was the fact that while African and Hispanic Americans have a higher rate of Alzheimer's and dementia, they are less likely to have a diagnosis of such disorders. Stating that Alzheimer's Disease is the nation's "largest looming unaddressed public health threat," Harry Johns, the Alzheimer's Association president, said blacks and Hispanics are "more likely to have Alzheimer's, less likely to know it and, as a result, less likely to receive available treatment."

Fairbanks is smoky. Anchorage is smoky. To be in Alaska this early in June is to see skies of haze, mixed with the scent of burning forests. Due to an unusually dry winter and spring, 293 wildfires already have burned some 463,000 acres in Alaska this year. The unprecedented fires in May are more characteristic of extreme July conditions, researchers noted. Most of the wildfires are lightningcaused and are located southeast and west of Fairbanks, where persistent heat and a lack of rain were rampant last month. From Anchorage to Fairbanks, temperatures have averaged more than 11 degrees above normal, with rainfall just 26 to 40 percent of May's usual levels. Down in the Lower 48, low snowpack and a hot and dry summer may spark new fires in the desert Southwest, northern Great Lakes, Gulf Coast, Northern California, Nevada, northern Idaho, western Montana, Wyoming and eastern Washington state.

Dead-end communities can be bad for your health. Icons of suburban development and land use since World War II, cul-de-sac communities contribute to higher rates of air pollution and obesity than those with well-connected street grids, new research finds. A study of King County, Wash. by the University of British Columbia found a 26 percent reduction in vehicle miles per day for those who live in high-density areas, along with lower emission levels of volatile organic compounds and nitrogen oxides. The chemicals combine to form ozone, which has been linked to respiratory illness. More driving in dispersed, poorly connected cul-desacs also increases greenhouse gases, is linked to lower fresh water levels from Cascades Range snowpack, and may affect salmon runs there. The researchers also examined communities in Atlanta, Ga., and found that "every additional hour spent in a car each day translated into a six percent greater chance of being obese."

Source: The Alzheimer's Association

Sources: Fairbanks Daily News-Miner, AccuWeather, Southern Oregon Mail Tribune, Anchorage Daily News

SF Public Press


Chinese Currency to Rise Against Dollar

hina’s weekend announcement that it will permit more flexibility in the exchange rate of its currency sounds like news that might interest Wall Street more than Main Street. But the fact is that such a move – it if really happens – could affect the pocketbook of virtually every consumer in the U.S. Why? Because a big Story: jump in the value of Peter Grier // Christian Science Monitor Chinese currency, the renminbi, (also known as the “yuan”) could make products manufactured in China more expensive. And “products manufactured in China” means pretty much the entire inventory of every big-box store in America, as anybody who’s pulled out a credit card in the last decade or so knows. Since even members of Congress shop at Wal-Mart, you might think Washington would be angry at the possibility of a stronger renminbi. But that’s not true, as the U.S. government has long pushed China to take such a revaluation step.


Primary Source: University of British Columbia

Of Course Banks Resist Reform, MIT Prof Says As the financial crisis drags on, Congress and the Obama administration are taking up regulatory reform of the banks at the center of the crisis. The San Francisco Public Press spoke with Simon Johnson, MIT professor of Interview: economics and forShawn Gaynor mer chief economist of // Public Press the International Monetary Fund. Johnson, author of "13 Bankers: The Wall Street Takeover and the Next Financial Meltdown," shared his views May 13 before the World Affairs Council. QUESTION: This year we have already seen the failure of 68 banks, twice the failure rate of last year. In fairness, should the government be bailing out these medium and small banks, and are we perpetuating the problem of “too big to fail” by allowing smaller banks to fail? Well, we are certainly perpetuating the problem of too big to fail; that is for sure. And it's very unfortunate, and we should address that. However, I wouldn't favor saving small- and medium-sized banks. They are failing because they made bad business decisions. And it's appropriate for business to fail when they make mistakes. The problem is that the biggest banks don't fail, can't fail, will not be allowed to fail. That's where the problem lies. Q: We see a revolving door between banking institutions and government. Do you think that is problematic, and, if so, how can it be addressed? The revolving door is definitely, definitively a problem. I think what we need is tighter safeguards in the form of more restriction on government employees. You certainly should not be allowed to work on a bill, or a set of regulations, and then turn around in a week or a month and go to work for people who are trying to game that regulation, or play game with regulators more broadly. You need some code of conduct, or whatever you want to call it, within the administration. Q: Do you believe that banks foresaw the economic crisis, and if so did they sleep easy knowing that in a worstcase scenario the government would be obliged to bail them out? That's a very good question. It’s hard to know. I think they felt at various points that they had some privileges and some advantage. And this encouraged them to take risks. They also made some mistakes prior to September 2008. The interesting point and the important point is not what they felt prior to 2008, but how they feel now, because now they have proved to themselves and to everyone else that they

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Stranded have known. The kids ask him to find them jobs, but the jobs never materialize. After the earthquake, a prosthetic factory offered to hire them. Michael had it all planned and then never heard from the factory owner again. Construction jobs, the same thing. The kids get all wired up and then nothing happens. They look at Michael as though he failed them. But they stay. Street kids have no resources, he said. They are not in the child welfare system because they have no adult to register them. Orphanages don't want street kids, and no family asks to adopt a 15year-old or 16-year-old kid. Michael had one orphanage director tell him there was no money in helping teenagers. Michael asked him, “What business are you in again?” Mormons adopted two boys he knew. You can change your life, they told him and the kids. He hated that. They assumed his life needed changing. They knew nothing about him or his kids. They needed to sit in the camp and get off their asses and do something, he thought. Well, they got off their asses and adopted two boys. Michael wasn’t crazy about the adoptions, but at least those two boys were in the U.S. now. The next morning, I awoke to the crowing of roosters. The sun was not yet up and the air retained the fleeting coolness of night. I filled a bucket from a well and washed, by scooping water with my hands and splashing my body. Michael took a simpler approach. He poured wa-

are indeed too big to fail. They know this for sure, and the financial markets know this. They can now borrow more cheaply than their smaller competitors. So now going forward, this is front and center of our problems. Q: In your book, you advocate for a major financial overhaul of the system. Is there still the political will in the country to move in that direction? I think President Obama missed a very important opportunity to make big changes in the financial system when he first came into office. It would have been difficult. But there is no question that he and his advisers decided to pass on that and just focus on putting the existing system back on its feet. Now there is some political will for change. The administration has woken up to the fact that Simon Johnson this system is very dangerous and they are pushing for reform. But now the banks are strong again. Now the banks are making money. The banks spend, according to the administration’s own estimates, $1.4 million a day on lobbying. And of course they are resisting, with all their energy, attempts to reform them. Q: You speak in your book about a new American oligarchy. Do you feel these large investment banks are antithetical to a democratic system? I think when you have very large concentrated economic power you tend to get concentrated political power. Concentrated political power is absolutely not consistent with democracy. We have seen this multiple times in American history. There was a big showdown between President Jackson and the biggest bank in the country in the 1830s. Teddy Roosevelt had a big showdown with the leading industrial magnates and financiers, including J.P. Morgan, in the early 1900s, and FDR had a big bust-up, successful in the end, with the major banks in the 1930s. So we have seen exactly this confrontation before in American history and it is very clear what has to happen. The democratic side either prevails or we will go down a route that takes us away from democracy and takes us away from good outcomes for most of the people in the country. Contact Shawn Gaynor at: Join the conversation:

ter from a plastic bottle into one hand and tossed it against his face. “I’ve had my shower,” he said. A government camp stood at the bottom of our hill. It was fully occupied and no longer accepting new families, let alone an American with a bunch of street kids. Long, even rows of brand-name tents shimmered in the hazy heat of sunset: Outback, Coleman, Outfitter. It was resplendent in purple-and-white canvas, with little patios and barbecue pits. There were lots of square feet to spare between each tent. The paths were paved with crushed white stones. A huge screen showed a movie and stadium lights illuminated the grounds. Music played. I stood with some of the other boys and looked down on this Promised Land with its outhouses and showers and aromas of food. Michael sat in a broken plastic chair outside his hut, head in his hands. His cell phone was out of minutes. There was no money, no money. I was flying back to the states in the morning and promised to wire him $100. That would be nice, he said. Kendy was standing beside me. He closed his eyes and opened them. Closed and opened them again. The government camp remained before him. It’s real, he told me. It was as real — we both knew — as the barren, sweltering hilltop where they now lived.

Contact SFPP writer J. Malcolm Garcia at: Join the conversation:

14 SF Public Press

June 22, 2010 //


At Amybelle’s Wash & Dry, Clean Your Clothes and Work History


Mary Vitale and volunteer waiter Jack Harmon linger after lunch in the Kroc Center’s dining room where diners pay $1.50. Harmon keeps the atmosphere light and friendly. LIFE ON A BUDGET

In Central San Francisco, Ultra-Cheap Dining

Meals for elderly see increasing demand as Social Security checks decline


uch has been written about the free lunch, but so little about the $2 lunch. Low-income seniors all over town know they can shun soup kitchens, pay a little, and get a big difference, whether it’s lunch at a senior center or at a church. It’s like switching from the bleachers to a loge seat, or the bus to a taxi. At senior lunch sites, the elderly remove themselves from the hoi polloi. No standing outside in line at St. Anthony’s with younger people and the occasional ill-mannered rowdy. No sitting in cramped quarters in Story: noisy settings. No getting Tom Carter rushed out to make way // Central City Extra for others, either. Photo: Marjorie Beggs One gets a smaller, // Central City Extra more genteel community and the opportunity to make friends among one’s peers. Sometimes there’s a movie or music or a chance right there to hook up with social programs. The food’s pretty good, too, nutritionally balanced and with seconds, when available. One reason seniors have it so good come lunchtime is that the lion’s share of their meals are subsidized by the city. The Department of Aging and Adult Services bankrolls lunch at 42 sites serving those age 60 and over. Its $8 million budget provides 1.7 million lunches and breakfasts to San Francisco seniors and disabled adults; about a million of those meals are delivered to housebound people. The programs are popular. “We keep being asked by the sites for more. We can’t,” says Department of Aging Director Anne Hinton. “We’ve been fortunate that we haven’t had to cut our budget.” Much of the money comes from the state and the feds, and they “encourage” sites to ask for donations, Hinton says. The subsidized lunch sites ask seniors discreetly — maybe just a sign on a jar — for $1 to $2 donations. Few respond. Seldom does a donation jar end up with even $20, and for most, the cheap lunch from the city becomes the free lunch. “A lot of people sign up (for meals) because of the diversity we deliver — Japanese food, ko-

THE BIRD SHRINK Multimedia preview Dana Strome lives in San Francisco with her husband, two dogs and no less than fifty parrots. Founder of the Wing Foundation, a nonprofit dedicated to the rescue of abused and abandoned parrots, Strome works in emergency rooms by day and is a bird shrink by night. She enlists veterinarians for their physical care, but her Mission District apartment serves as the birds’ emotional rehabilitation grounds. This series is produced by Taylor Wiles and Jackson Solway, two San Francisco freelance journalists. Bird Shrink is one in a series of audio slideshows that reveal characters of the Bay Area. Find it online at birdssf . To view multimedia content for this report, scan this QR code with your smartphone.

sher, Chinese, Latino and Southern style. The last thing we need is seniors not eating. That’s the slippery slope of bad health, and it can lead to dementia,” Hinton adds. The seven sites in the Tenderloin and SoMa serve an average of about 500 seniors per lunch. Lunch on the second floor of the Curry Senior Center in the Tenderloin got so popular that the offerings doubled starting in October. The center, which has served lunches since 1972, went from one to two 90-seat sessions, at 11 a.m. and noon. The sessions average 162 diners. That’s seven days a week, 365 days a year, or 59,130 meals a year. “It has increased dramatically,” says Curry Executive Director Dave Knego. “At the end of the month it’s more.” On March 31 the center had

What do I like about this

place? The entertainment, the staff, the food, the beautiful women! Shall I go on?

185 patrons but on April 2 — when government checks began arriving and more seniors splurged on restaurants — the center had only 140 guests. Project Open Hand prepares the Curry fare that’s planned by a nutritionist, and Andy Burns, on loan from Open Hand, runs the lunch period. At the beginning of the month, Burns makes a pitch for a $2 donation, but there’s no pressure to pay. The cash box averages about $5 a session, Burns says, perhaps a generous estimate. The figure doesn’t surprise Department of Aging Director Hinton. “I’m assuming people can’t afford it,” she says. “Some places they pay a little more and elsewhere maybe just a quarter. They have very fixed incomes that have gone down while prices of everything have gone up. The SSI cost of living was discontinued last year and dropped from $850 to something like $790. And a lot of seniors think when they’re old all medical costs are taken care

of. That’s not the case.” Jim Hall, 66, partially blind and suffering from diabetes and depression, is a four-year regular at the Curry Center, where his donation is determined by his medical expenses. He worked for 15 years loading Sacramento Bee and Chronicle delivery trucks until he was disabled. Now living on 15th Street, he gets $780 from Social Security and $173 from SSI, down from $183 in 2008. “I’ll give $15 to $30 here, depending on what I have left after Medicare,” he says, at a table between Curry lunches. Seniors start lining up outside the building shortly after 6 a.m. On this early April weekday, 50 people were in line by 7:30 a.m. The menu is turkey sloppy joes with vegetables, berry pie and milk. Chicken is always a favorite and would have attracted an additional 10 diners, Burns guesses. At the first table, though, the joes, healthy as they are, aren’t a complete success. An Asian woman sidles up to Stephen, 63, who doesn’t want his last name used, and strikes a deal: her plate for his milk. It’s a good trade for Stephen. On his way home he’ll take the meal to an 85-year-old blind lady friend. “What do I like about this place?” repeats the buoyant Stephen, a five-day-a-week regular. “Her company.” He shoots a smile across the table at Dorothy Carberry, 88. “And the entertainment, the staff, the food, the beautiful women! Shall I go on?” Carberry doesn’t like the sloppy joe, either. “I like turkey plain,” she says. “But the meals are good and wholesome,” says Stephen. “And you don’t have to rush. It’s really community, and you get to know everyone.” Carberry gets up to leave. “Don’t pick up any sailors on the way home,” he says, and she grins back.

Tom Carter writes for Central City Extra, a publication for the Tenderloin and West SoMA neighborhoods of San Francisco. Contact him at writers@

istorically, many laundromats have provided cover for seedier operations such as money laundering, gang violence, or more recently in Oakland, marijuana peddling. But a family-run shop in the Richmond District is trying a far different experiment: free Wi-Fi and career counseling. Amybelle Capule, a slight, 5-foot-tall Filipino American in a business casual suit jacket, dispenses free resume advice amid the change machines and dirty clothes at her coin-operated laundromat at 3220 Balboa St. At Amybelle’s Wash & Dry, CraigStory: slist helps to bring in four Saul Sugarman San Franciscans each // Public Press Photo: week seeking the free adMonica Jensen vice while their clothing // Public Press tumbles through spin cycles. Capule and her husband have owned the laundromat for about five years, but she just began offering resume advice in January this year. Sitting with a laptop in the corner of the laundromat, Capule steers the customers around obstacles and common mistakes seen in many applications. Clearly labeled contact information is good, she said. Writing about qualifications in paragraphs instead of bullet points is bad. Also, she advises keeping the resume concise and avoiding repetition. Capule has worked as a recruiter for more than four years, first for an insurance company and now at Electronic Arts Games in Redwood City. She also has volunteered with Jewish Vocational Services giving resume advice, making her a rare breed of counselor you can find outside college career centers. “When I changed to EA Games, the other volunteer job was such a hike from Richmond,” she said. “Here, I can help out my neighbors and keep an eye on my 20-month-old daughter, Madison Ray Capule.” Helping the Richmond District community has always been one of Capule’s priorities. “I was thinking maybe there was somewhere else I could use my degree and still help out,” she said. After she graduated from UC Davis around 1995, she began working for Families First, helping boys aged eight through 12. She wanted to counsel boys aged 13 through 17 but felt that her short stature was an obstacle. “They towered over me is a better way to describe it,” she said, “How can you gain a kid’s credibility when they are towering over you?” In human resources, applicants need help getting noticed, according to Capule. It's hard

Amybelle Capule runs a Laundromat in the Sunset District where she offers free resume advice on Saturdays. to stand out in a crowd when the pool is larger than a recruiter has ever seen in her career. “Managers look at resumes as a means of communication and written skills,” Capule said. “If you have to have a second page resume, make sure it's well labeled.” But Capule advises against two pages. “I have many years of experience in the same field and I still keep it to one page,” she said. Her clients have included photographers, restaurant managers, the unemployed and people in search of a career change. Many of them report back that they’ve landed an interview or even a job; most leave feeling satisfied. “I definitely benefited from her advice,” said Angelica Amaya, 38, a social worker who brought in a resume for her boyfriend, a restaurant manager in San Francisco. “Amybelle said to use paragraphs instead of bullet points, and I think I’ll bring in my resume next time.” Contact Saul Sugarman at: Join the conversation:


Like the Neighborhood, Homeless Slow to Waken on 6th St. 9 a.m. to 11 a.m.


he fog begins to rise off Sixth and Mission as amorphous masses of old sleeping bags and packing blankets begin to shift about. The homeless sleep in clusters, clinging to the north side of the street. One by one the security gates of the area’s shops slide open, causing a stir among the waking people. Some leave while others slouch off to some yet unopened gate. Shopkeepers stand in front of their businesses in a silent territorial challenge. Even the pigeons look hung over on this block — feathers ruffled, eyes red. Twenty-two-ounce cans of King Cobra and Colt 45 tucked into crumpled paper bags have replaced coffee as the eye-opening drink here. The Guardian Angels march down the south side of the street — 20 of them, flexing in matching red berets. They don’t even glance at the homeless on the north side. Paul woke up hungry and homeless this morning. He’s looking for some spare change to get some food. “I’ve been down here a long time. Seven years one time, 10 years another. It’s gotten a little less violent. It was a hell of a lot more violent about five years ago.” He says he has seen some improvements in the neighborhood, with dilapidated buildings being renovated and businesses and restaurants coming into the area. Paul says the people are the best part of the neighborhood. “There are so many people here. It’s really diverse.” Smoking and carrying some quarters in his hand, Jason, a 14-year resident of the area, approaches me for money or a cigarette. “There is no help out here that

photo: Sarah Mcdonald

can change anything. You have to change yourself,” he says, going on to tell me he had bought a radio from one of the neighborhood pawnshops, then turned around and sold it for some money to make it through the day. “I see a lot of desperation down here.” Ten minutes later, as if by magic, all of the homeless get up and leave. A stray cart and a few abandoned blankets are the only evidence of their night here. —SG SF Public Press participated in a 24-hour reporting project sponsored by The Bold Italic. This article by Shawn Gaynor is one piece in the series. For the full array of stories and multimedia content, see stories/303-neighborhood-watch


Education Cuts Hit Poorest Schools

Neighborhoods: What’s Up Where This is a selection of stories from the June issues of member newspapers of the San Francisco Neighborhood Newspaper Association.

Cannabis Dispensary Gets OK to Open on Taraval The San Francisco Planning Commission approved a plan May 21 that will allow a medical cannabis dispensary to open on Taraval Street, despite fierce opposition from many Sunset District residents. After hearing from more than 100 speakers, the Commission voted 5-1 in favor of opening the dispensary, which would be located at 2139 Taraval St. Commissioner William Lee was opposed, while Commissioner Michael Antonini, a dentist, was excused because one of the petitioners was his patient. The hours-long meeting did not adjourn until shortly before 3 a.m. Many residents expressed concerns that crime would increase around Taraval Street, between 31st and 32nd avenues, where the dispensary would be located. Children frequent the nearby schools and churches, they said, as well as recreation, day care and tutoring centers. One Sunset resident, who lives two blocks away from the proposed site and operates a day care center there, told commissioners she strongly opposed the plan. Greg Schoepp, sponsor of Bay Area Health Compassion Center, said data presented by San Francisco Police Commander John Loftus at a Police Commission meeting reveals that crime decreases in areas with marijuana dispensaries. Schoepp said the dispensary would operate as a pharmacy, not as a pot club, where patients are allowed to sample marijuana on the premises. San Francisco Supervisor Carmen Chu and other residents said that cannabis users already have access to 22 dispensaries in the city and can have cannabis delivered to them. Cannabis users with mobility issues protested, saying most of the dispensaries are located downtown.

—Natasha Lee


Pristine Green Space Turns Industrial Lot Located at the corner of Seventh and Clarendon avenues, Laguna Honda Reservoir is one of the few remaining green spaces in the city. Area residents said they were shocked to recently learn that the San Francisco Public Utility Commission plans to permanently use the site for industrial purposes. The area on the east end of the reservoir facing Clarendon was filled with flowering shrubs and blackberry bushes just a few years ago. When the SFPUC began renovations of the neighborhood pump stations, they removed all of the plants in order to use the site as a staging area for equipment and supplies for the pump station renovations. The city agency, however, has reneged on assurances that the change was temporary and that the area would be restored to its natural state when the pump station projects were completed. Without public notice or input, the commission decided to use Laguna Honda Reservoir land for industrial purposes, instead of returning it to green, open space. It is now slated to be a distribution center for fill material used in construction projects. This means large piles of sand, dirt and gravel will


Poetry Chains! Poems used to appear regularly in American newspapers. Walt Whitman published in the New York Saturday Press and the New York Times. “Casey at the Bat” debuted in the San Francisco Examiner. For the print debut of the Public Press we have chosen two poets to feature here. In our next issue, they will each pick their local favorites, who will then present a poem. And so on. —The Editors

This feature is presented in collaboration with Jesse Nathan, an editor at McSweeney’s. Our other poet, Alisa Heinzman, recently graduated from Saint Mary’s College with an MFA in creative writing.

be stored at Laguna Honda Reservoir along Clarendon Avenue, even though the commission’s Newscomb yard is currently providing this service. Additionally, the commission has decided to construct a building at the reservoir that will contain office space and storage areas. The electrical service is installed and the building is scheduled to go up later this year.

–Anthony Roy


Pier 70 Development Slowly Sets Sail 4 PAST, PRESENT, AND FUTURE

PG&E owns the poles, but the San Francisco Public Utilities Commission pays the city’s light bills; the Excelsior Action Group pulled together representatives of both agencies on May 26 to work out the solution. “I don’t see any speed bumps at all,” PG&E spokesman Matt Herron said, referring to assigning work crews for the area. That was good news to May Ling, coordinator of the Light up the Excelsior campaign. Her concern is that the poor lighting in some areas could encourage would-be criminals to operate in the neighborhood. The campaign began at public safety meetings back in November. A group was formed that surveyed residents about whether they would be OK with upping the wattage. Then in April, volunteers canvassed Persia Avenue residents to ask them to leave their porch lights on. “We knocked on doors, giving free CFL bulbs to our neighbors that responded to our survey,” Ling said. “The final tally from our walk was three ‘no’ and 49 ‘yes’ out of approximately 100 households.”

—Anthony Myers

20th Street in the future - a pedestrian and bicycle oriented place

Rendering of a redeveloped 20th Street at Pier 70


Earlier this year the Port of San Francisco published its Preferred Master Plan for Pier 70, a historic area along the city’s eastern shore, which stretches from Mariposa to 22nd streets. Once a bustling shipyard, much of the pier is dilapidated and closed to the public. Current tenants include ship repairer BAE Systems, a towing company, and scrap metal collector Sims Metal. Several artists lease space in the pier’s Noonan Building. The 30-year master plan includes environmental remediation, historic preservation, and the creation of new open space. When fully developed, Pier 70 could include three parks, medical and biotechnology offices, art and performance spaces, restaurants and retail establishments, alongside continuing ship repair. “I’m excited,” said Susan Eslick, Dogpatch Neighborhood Association vice president, who leases an art studio at the pier. “I just hope I’m alive to see it happen.” The plan also identifies eight buildings as having the highest priority for preservation, including the Union Iron Works Machine Shop, a unique cathedral-like building on 20th Street which could become a central node of a redeveloped pier. The port hopes to secure a developer by the end of the year. A substantial portion of the funding for Pier 70’s improvements would come from property tax revenues generated by new development. Before any development can begin, however, the port must remediate the environmental damage to the area, much of it associated with former shipbuilding by the U.S. Navy.

­—Sarah Mcdonald INGLESIDE LIGHT

‘Light Up Excelsior’ Campaign Bright After a brief but concentrated lobbying effort by local activists, PG&E has agreed to increase the wattage on streetlights along Persia Avenue starting this month. Increasing the output from 100 to 150 watts is expected to help the light penetrate the canopy of elm trees that co-mingle with the light poles.

SF Public Press




June 22, 2010



Boisterous Beasts Return to Delight Pier 39 Crowds


Popular Sandwich Shop Faces Eviction Fans of Ike’s Place, who often wait in hourlong lines on the street for a beloved artisan sandwich shop at the 16th and Sanchez streets hub, could disappear from the corner as the property owner has sought legal action to oust the popular deli. Ike Shehadeh, a San Francisco native and 32-year owner of the popular Ike’s Place, has received an eviction lawsuit from building owner Denman S. Drobisch. “I’m actually in shock and disbelief,” Shehadeh said. The owner’s lawyer, Arlene Helfrich, did not return phone calls seeking comment regarding the eviction proceedings. The former hole in the wall has become a Castro phenomenon through a host of creatively named sandwiches, freshly baked bread, more reviews on Yelp and a television appearance on the Travel Channel’s “Man vs. Food” show. The shop can serve over 1,000 customers a day, and employs 53 people. Fame and success are where the trouble started for Ike’s. The neighbors living upstairs, Vince Blaskovich and Paul Quin, have complained about the heavy traffic and the garbage. They have hired attorney Julian Lastowski but have not yet filed suit. Lastowski has written letters demanding that Ike’s Place pay thousands of dollars to his clients for disrupting their lives or pay to relocate them. Shehadeh would not specify how much the demands called for but said the amount was “a lot.”

—Ted Andersen

RICHMOND REVIEW Sea lions in residence at Pier 39. Photo Courtesy of Pier 39

Service Providers Say Budget Cuts Will Hurt

Pier 39 threw a party on May 21 to celebrate the 20th anniversary of their infamous sea lions’ arrival in 1990. It was the second celebration planned for the pinnipeds this year — but this time the guests of honor decided to show up. Back in January — the official anniversary month — the sea lions had taken off for better fishing grounds, leaving their dedicated docks at Pier 39 virtually empty. So there wasn’t much to celebrate. But in the past month, the number of the playful sea mammals has been rising, much to the joy of both tourists and Pier 39 merchants alike. Instead of the few dozen seen on the docks from December to March, there are now a couple of hundred each day. Why they left at the end of last year is still a mystery. Experts don’t know for sure what tempted them away, but a record number of starving yearlings found stranded on Northern California beaches last year hinted that the food supply had shifted away from the Bay Area. Larger numbers of sea lions were seen in Oregon and Monterey Bay, where food supplies were greater. No one knows for certain why the creatures are returning now, nor how many will eventually set up camp again on the docks. A few hundred animals are far below last year’s record number of 1,700, but the Pier 39 “infestation,” as it was originally termed, in 1990, also started with only a few hundred sea lions.

On May 20, Supervisor Eric Mar gathered the Richmond District community and labor leaders together to foster discussion on ways the neighborhood might be able to raise revenue to offset a city budget in crisis. More than 40 people showed up at the Richmond Branch Library on Ninth Avenue; Mar invited local service providers, activists, residents and homeowners. Mar had a panel of four community leaders assist him in the discussion: Patricia Kaussen, executive director of the Richmond District Neighborhood Center; Chelsea Boilard, family services coordinator from Coleman Advocates for Children & Youth; Kavoos Bassiri, CEO of Richmond Area Multi-Services, Inc.; and Michael Tong, labor representative from the local chapter of Service Employees International Union. The Hotel Fairness Initiative, a proposal for the November ballot, was one revenuegenerating measure discussed. If approved, it would increase the tax on local hotel rooms and close loopholes used by airlines and online booking services that book hotels in San Francisco. The city's portion of the budget for the Richmond District Neighborhood Center has been slashed by $350,000 for the upcoming fiscal year. Tong and the other panel members all noted that what gets impacted the most in budget reduction efforts is almost always services.

—Cindy Beckman


—Jonathan Farrell

Will We Burn? Will the River Run.

During the first war in our lives my brother wrote to some general, said hello sir I am nine and I have an idea, have you seen Swiss Family Robinson, the way they dig a pit, put a tiger inside, and cover it all with palm branches. I sat on the warm carpet near our sliding deck door thinking of their treehouse, waterwheel, O Christmas Tree. Why will I never lose myself at sea. The general sent back a poster of a tank. *** The war passed and we were there, us all in Dallas for who knows maybe an hour to see him. Because I am a coward I wouldn't look at his eyes and thought of blizzards in Nebraska and how once in the cereal aisle I couldn't read the signs, my mind gone slack, and everyone tended to me. When power goes out you have to close the fridge up tight until things work again. What was there to say was said, and he was gone again. *** When he came home the football stadium ceremony made me proud and we all went out for pizza. It seems a joke to say inadequate. It is inadequate to say we failed in our welcome. The spastic aftermath of a great gift. He said he saw a guy's brains, a skull-hole big as a fist, and mopped and mopped the sticky O.R. floor, and couldn't sleep or pick out peanut butter at the store any more. I wanted to say things like relief and a triumph of the strength of the mind.

Alisa Heinzman

Dialog in a war zone

Break my hand and pray the river will save us. Don’t let it go — Ach! The sky is the color of pebbles the color of mice. They hate us. But see how the river moves round the bend, into plain speech, horses into poems? No, Hanka. The sun is sunk. The river runs. Night falls like ash. No poems. But I am your daughter! I say time is a letter a stone wrote. I say time is a swimmer counting rafts in a river. So? What if they light a fire to us and we don’t burn? A pebble is powerless. Who knew our pyres so soon would come? Daddy, we could tread miles yet in this sunset. Why do you speak in a lonely tongue? Because a pebble burdens, lovely and terrible. See the horizon, clouds in the shapes of fierce cats? I am a girl awakened in the morning light of her life to a knock. I am a man awakened in the middle of his life to the smell of fire.

Jesse Nathan


s San Francisco’s school district lays off 195 teachers, the poorest schools in the city’s southeast corner will be hardest hit by the cuts. Neighborhoods including the Mission, Excelsior, Bayview and Visitacion Valley, which have the highest concentration of children and minority residents, stand to lose the most teachers under rigid statewide seniority rules. It’s difficult to keep teachers in the city’s poorest schools, so teachers there tend to have the lowest seniority, leaving them most vulnerable to losing their jobs amid budget cuts. That reality hit home on the last day of class, June 3. “We hear the words ‘social justice’ getting thrown around everywhere and it really is tragic that the students that need it the most are losing Interview: out on relationships that they’ve Mayra Martinez // established,” said Methinee Photo: Thongma, one of four educators Monica Jensen // Public Press who lost their jobs at El Dorado Elementary in Visitacion Valley. Although Mrs. T, as she’s called by her students, has nine years of teaching experience, only one was in San Francisco, leaving her at the bottom of the seniority list. At Monroe Elementary in the Excelsior, three teachers and a classroom aide were laid off. In the same ZIP code, Sheridan Elementary also lost four people. Principal Dina Edwards said the dismissals marked the deepest cuts she’s seen in her 14 years at the school. By comparison, no teachers were laid off at Alice Fung Yu Elementary in the Inner Sunset, where every teacher has been at the school more than three years, according to Principal Liana Szeto. At Robert Louis Stevenson Elementary in the Sunset, just one teacher was let go, according to Principal Dr. V. Kanani Choy. The final numbers for each school will shift through the summer. Last-minute shuffling is common as teachers with more seniority are moved into positions at schools with openings left by newer teachers. That process continues into the fall. Overall, San Francisco boasts the highest average student performance of the large urban districts in California. But it also has the widest gap between that average and the lowest performing students, according to the district’s strategic plan. The problem isn’t unique to the San Francisco. SeniorityStudents protest cuts at Buena Vista based variations beElementary School . tween rich and poor neighborhoods are the basis for a lawsuit pending against the Los Angeles Unified School District and the state. Filed by the ACLU and students from three different schools, the suit asks that “there may be, once and for all, equal education opportunity for every child.” Teachers in poor neighborhoods must possess special skills and extra patience to deal with the kids who often have emotional or behavioral problems as a result of living in areas frequently struggling with crime issues. At El Dorado, school psychologist Allyson Holmes said educators spend a lot of time working on simple things such as transitions from play time to study time that can prove more difficult at schools in rough neighborhoods. “It is important to have teachers and staff that are very sensitive and are aware of the experiences of these kids,” said Holmes. “There’s a certain level of consistency and predictability that a lot of these kids need.” A study released in May by the University of Washington’s Center on Reinventing Public Education found the poorest schools are likely to see 25 percent more teacher layoffs and, in the case of “significant layoffs,” the highestminority schools lose 60 percent more teachers. In schools with the fewest minority students, only 8 percent of teachers had two or fewer years of experience, according to the study. In schools with the most minority students, the number jumped to almost 13 percent. Children who face constant change and unsafe situations may be more subject to “meltdowns,” said Holmes. “You see them sitting on the playground crying because they can’t access the part of the brain that helps them stay calm, that helps them rationalize and think about what’s happening,” she said. Thongma made a similar observation just minutes after consoling a student who crumpled in the playground, sobbing inconsolably at her feet. “The routine and everything that they have at school — the one thing that they can count on — is falling apart,” said the teacher. “A lot of their homes are like that and now their school is going to be like that.” Chaney Casimir worries about how the changes will affect her son, Jaiden, who struggled with fellow classmates under a previous teacher. “When he transferred to Mrs. T’s class it was a total turnaround,” she said. “She lets us play on the computers and play outside with my buddies,” added Jaiden. “And she always makes us read books.” In her empty classroom, Thongma reflected on how teachers work extra hard for small gains when teaching children who face hard lives. “I have put blood, sweat and tears into this job,” she said. “Out of my nine years of teaching, this has been the hardest year that I’ve ever worked in my career. But I did it because it was worthwhile.” Mayra Martinez is a writer for Newswire21. You can contact her at: Join the conversation: http://sfpr. es/Newswire21SchoolCuts

16 SF Public Press

June 22, 2010 //


Better Ways to Measure Tough Times A Bay Area ‘Misery Index’ shows growth in hunger, joblessness


n 1976, Jimmy Carter devised a Misery Index to measure the level of economic hardship Americans were facing during that era’s recession. The index tracked the rates of inflation and unemployment added together, and during Carter’s tenure it reached 20 percent. Today, as the nation is gripped by another, deeper recession, New America Media created an expanded Misery Index to gauge the hardships experienced in California, which is feeling some Text: of the most painful effects of the Annette Fuentes economic downturn. Aaron Glantz The NAM Misery Index offers // New America Media Graphic: these indicators of how the Mary Catherine Plunkett recession, which began more // Public Press than two years ago, is reverberating through Californian’s own economy. The data are for the state, Alameda County and the city of Oakland and from Pacific Gas and Electric Co. Overall, the NAM Misery Index paints a picture of personal and financial deprivation that is growing yearby-year or even month-by-month. As a tool, the Index can be updated to reflect improvement as the economy recuperates and hardship begins to give way to recovery.

The statewide unemployment rate doubled from January 2008 to May 2010. Californians also saw an increased need for services.

This report was produced in collaboration with New America Media. Visit their website:

Food Stamps

General Assistance

Medi-Cal Enrollment

50 percent increase statewide

Up 45 percent statewide

5.7 percent increase statewide

More than 136,000 Californians now depend on General Assistance (also called General Relief in some places), an increase of 45 percent since January 2008. General Assistance is the last-chance social program for adults who are not able to support themselves and are not eligible for other public funds or assistance programs. To receive General Assistance, Californians must not own more than $1,000 in personal property. The benefits are small. In Alameda County, for example, the maximum cash grant for a single person on GA is $336 per month. In most counties, recipients are required to participate in workfare programs to get their checks. In San Francisco, they also get a Muni pass.

Nearly half a million more Californians turned to Medi-Cal, the government-sponsored health insurance program for the poor, in the last two years. More than 7 million Californians were on the Medi-Cal rolls in May 2009 (the most recent month where data is available), an increase of more than 400,000 from January 2008.

Over the past two years, a million more Californians have turned to food stamps to fill their bellies. According to the California Department of Social Services, nearly 3.2 million Californians were on food stamps in February 2010, up from about 2 million in February 2008. It's no wonder: According to a new report from the nonprofit Food Research Action, close to one-fifth of Californians reported not having enough money to buy food for themselves or their family in 2008 and 2009. The report found that about 25 percent of people in Bakersfield and Fresno and 20 percent of Los Angeles residents did not have enough money to buy the food they or their family needed. Conditions were slightly better in the Bay Area: 13 percent of residents in and around San Francisco, Oakland and Fremont reported their family was going hungry.

Auto Repossessions 6.5 percent increase statewide Californians may be losing their homes to foreclosure in record numbers, but data provided to NAM by the California Attorney General's office shows residents of the Golden State have had better luck holding onto their cars. The number of private vehicles in California's Stolen Vehicle Database (so-called because repossessed cars are those legally stolen from their owner) increased by a modest 6.5 percent last year, from 293,000 cars in 2008 to 312,000 in 2009.

Reduced-Cost School Lunches 2.5 percent increase in those eligible in Oakland From 2008 to 2009, the percent of Oakland public school students eligible for free and reduced school lunches increased by 2.5 percent, a small but significant rise. Free and reduced-cost lunches are subsidized by the federal government and available to students whose family income is at or below the federal poverty line. Free lunch numbers are a long-standing indicator of a school district’s poverty-level population. In Oakland Unified School District, the number of students eligible for free lunches has gone up. In the 2008-2009 school year, 66.55 percent of Oakland public school students were eligible for a free or reduced cost lunch, based on family income that is within the federal poverty line guidelines. In the current school year — 2009-2010 — 68.70 percent were eligible, according to Jennifer Le Barre, director of nutrition services for the OUSD. Oakland is not alone. California’s public school districts overall are seeing increased eligibility and participation in the lunch program, according to state education department data manager Sharon Ray: "Increase in participation in California is far outpacing any other state."

CalWORKs, the workfare program for families, is also experiencing an increased caseload. Some 565,000 families were enrolled in the program in January 2010, an increase of 17 percent from the beginning of 2008. In addition to cash assistance, CalWORKs also helps parents by providing counseling to victims of domestic violence, mental health and substance abuse treatment, and money to pay for childcare. Because of the state budget crisis, Governor Arnold Schwarzenegger has proposed eliminating the program.

PG&E Utility Shut-Offs 17 percent increase Utility disconnects for nonpayment increased 17 percent for all PG&E residential customers in 2009, according to the California Division of Ratepayer Advocates. From 2006 to the present, the number of people who fell behind on their gas and electric bills and had their service turned off climbed steadily as the economy spiraled downward. Of PG&E’s roughly 5 million residential customers, 3.58 percent were disconnected in 2006, 4 percent in 2007, 4.4 percent in 2008 and 5.15 percent in 2009. Worst hit were the utility’s low-income customers, who comprise about a quarter of all residential utility users. In 2006, 3.92 percent of them were disconnected; in 2009, it jumped to 8.05 percent of all lowincome customers. The good news in this bad-news scenario is that 69 percent of customers at all income levels have their gas and electric service reconnected. Linda Serizawa, program manager at the ratepayers organization, said the fact that the reconnection rate is so high means that many disconnections are preventable. "Customers could find the funds to reconnect, so the challenge is to find out how to prevent service interruption," she said. The "smart meters" that PG&E and other utilities are installing allow companies to shut off service at a central office without sending out a utility worker.

Bay Area 211 Calls for Help 35 percent increase

Emergency Room Visits 16.4 percent increase in Alameda County Alameda County Medical Center in Oakland has seen a 16.4 percent increase in visits to its emergency room from 73,000 in 2008 up to an anticipated 85,000 for 2009. As thousands of people join the unemployed, they lose their health benefits and may turn to the hospital emergency room as the physician of last resort. According to medical center spokeswoman Andrea Breaux, most of the uninsured that come to the hospital’s ER do so for prescription refills. Eligible uninsured patients are enrolled in Medi-Cal, while those who do not qualify may be enrolled in the County Medical Services Program (CMSP) for so-called indigent residents. According to Breaux, CMSP enrollments at Alameda Medical Center are going up.

The 211 hotline, created in 2008, is an information and referral phone service that directs callers to housing/shelter, food, utility, clothing, childcare and employment assistance. Operated in Alameda, Contra Costa, San Francisco, Santa Clara, Solano, Sonoma, Marin and Napa counties by nonprofit agencies, Bay Area 211 has seen demand for its services mushroom in its short existence. In the first half of 2008, calls to 211 operators totaled 74,646 — a 35 percent jump from the same six-month period in 2009. For that period, the greatest number of calls — 30,176 — was about housing and utility assistance, representing a 27 percent increase over the previous year. Food assistance increased 57 percent year to year, while income and employment service-related calls increased by 43 percent. Alameda County’s 211 hotline, operated by Eden I&R, saw a 247 percent increase in calls from Spanish speaking callers from 2008 to 2009, with rent assistance, food and emergency shelter among the top needs each year.

In a cruel twist, however, those Medi-Cal benefits are buying less and less health care. The state is so broke that last year Gov. Schwarzenneger eliminated a host of benefits from Medi-Cal coverage, including dental, vision and mental health care, acupuncture, hearing exams, speech therapy, chiropractic services and foot care. This year, with the state facing a $20 billion budget deficit, Schwarzenneger plans to cut $500 million in other, "optional" benefits not required by federal law.

Unemployment 100 percent increase statewide It's almost impossible to imagine, but two years ago, California's unemployment rate stood at 6.4 percent. By March 2010, 12.6 percent of Californians were officially unemployed, a very limited indicator that does not count people who have become so discouraged that they've stopped looking for work, or those whose benefits have expired. But Bay Area residents can thank their lucky stars they don't live in Imperial County, which borders Mexico and Arizona. Unemployment there increased from 17 percent in January 2008 to 27 percent in August 2009. Another telling indicator of unemployment is the number of claims for unemployment insurance. California has registered a record number, as 6.5 million people filed for unemployment in 2009, nearly doubling the record 3.6 million who asked for cash assistance the year before. So many Californians are out of work that the California Economic Development Department says it had to pay out over $20 billion in unemployment benefits in 2009. With so many unemployed Californians, it's no wonder the state's unemployment insurance program is nearly $7 billion in the red, according to a report by the investigative news nonprofit ProPublica.

Evictions 7.1 percent increase in Oakland Landlords are required to file a notice of eviction with the Oakland Rent Adjustment office and must give it to tenants within 10 days. According to the office, there were 8,732 eviction notices filed in 2008 and 9,349 filed in 2009, representing a 7.1 percent increase from year to year.

Indigent Health Services 8 percent increase in Alameda County Alameda County’s Medical Services Program, a healthcare safety net for uninsured residents, has seen steady increases in enrollment over the past three years, according to county finance director Vana Chavez. For FY 2007-2008, CMSP had 56,000 unduplicated patients; for 2008-2009, it served 60,200 patients; and current enrollment is at 65,000, an 8 percent increase from last year. Meanwhile, the funding base for CMSP — sales tax and vehicle registration fees — is dropping as sales tax collections fall and fewer people buy and register cars. "I’ve worked in this capacity 20 years and I’ve never seen anything like this," Chavez said. She added that new CMSP enrollees are mainly the newly unemployed who have assets that disqualify them for Medi-Cal. CMSP doesn’t have an assets test for applicants, so such people would qualify.

ECONOMY // June 22, 2010

17 SF Public Press


‘Socially Responsible Outsourcing’ Takes Tech Jobs to Developing World Wages a fraction of U.S. standards, hours inconsistent, but nonprofit lifts workers from poverty


local nonprofit group is making a name for itself in the tech world by providing U.S.-based companies with low-priced online labor in developing countries. While thousands of for-profit companies have been offshoring tech jobs for years, San Francisco-based Samasource says it wants to turn online work into a tool to alleviate poverty. In the last year the organization has attracted grants and support from foundations and Silicon Valley companies, including Google and Facebook, by finding jobs for low-income people with some level of education but lacking economic opportunity. Samasource distributes “micro-technology” jobs such as data entry, proofreading and transcription to partner firms in South Asia and Story: Africa. Ambika Kandasamy // Public Press The organization says Photo: that while prevailing Monica Jensen wages abroad for these // Public Press jobs are “often $5 per hour or less,” that is enough to benefit impoverished workers while also providing competitive rates for small businesses in the United States. Workers at Samasource contractors report earning 44 cents per hour in India and $2.67 in Kenya. Wages vary widely depending on the country and type of work. Representatives of the group say they look out for workers’ economic interests in part by adhering to strict criteria for selecting global service partners. “I think giving work and providing people with the means to earn an income is a really logical way to end poverty,” said Leila Chirayath Janah, founder and CEO of Samasource. “Yet very few organizations are actually able to connect the poor to what they need most — work.” The emerging “socially responsible outsourcing” business model, however, has raised a number of questions beyond the appropriate level of pay. International labor oversight is complicated, and alleviating poverty depends on providing stable working hours and long-term employment. “Anybody that’s here in the U.S. that is outsourcing work should be doing so in a way that makes sure that those workers are permanent workers, and therefore receive all the benefits that come with being a permanent worker,” said Trina Tocco, deputy director of the International

was 16 on a scholarship to teach English to blind children, and the experience inspired her to go into international development work. Although initial funding failed to maintain the organization, Samasource later got help from the Peery Foundation ($300,000), the Rockefeller Foundation ($70,000), the John Templeton Foundation ($10,000) and the Body Shop Foundation ($2,000). The group also got training and support from Facebook’s fbFund and $120,000 worth of AdWords from Google.

How Samasource CEO defines company mission "Some people have accused us of creating a virtual sweatshop. I find that very funny. This is like the ultimate creme de la creme job you can possibly get. If your opportunities are working at a quarry or toiling away on some field, the chance to sit in front of this cool machine and do this work that connects you to the world is so empowering for people, especially people from marginalized groups who have been told their whole lives that they're not worth anything."


Stephen Muthee, a Samasource partner. Labor Rights Forum, a labor advocacy group in Washington, D.C.

CHARITABLE GOALS The organization says it selects service partners that share its social goals: tackling poverty in poor regions with “untapped human capital,” working with women, 18- to 30-year-olds and refugees and paying a “living wage” appropriate to the country. To determine the local living wage, the group uses the Fair Wage Guide developed by the Oakland nonprofit World of Good, which derives its index from research by economists and fair trade experts. Originally it was developed for artisan work, but Samasource has adapted it to compute hourly wages for tech jobs. “Digital work is perhaps unique,” Janah said. “The social impact doesn’t come from regulating organizations that are doing the work, because there’s not a lot of mistreatment of labor that happens in the digital work space. I think that by having social-impact criteria, right at the top of our list of guidelines for selecting partners, we avoid that.” Janah founded Samasource in September 2008 with $35,000 in funding from the Stanford Social Enterprise Challenge and the Business in Development Challenge, an international business plan competition. She went to Ghana when she

Samasource has provided more than $400,000 worth of work for 20 partners in seven countries. Samasource declined to state what percentage of its revenue it charges to American clients. The U.S.-based businesses benefiting from the work include Palo Alto technology nonprofit Benetech, Jersey City, New Jersey-based entrepreneur incubator Rising Tide Capital, and San Franciscobased technology company CrowdFlower. Service partners are spread out across the globe: Kenya, Ghana, Zambia, Pakistan, India, Cameroon and Haiti. Shama Perween, 21, has a bachelor’s degree in history and works for Samasource service partner Usha Martin Rural Services, a for-profit Web company with 39 employees in the Indian state of Jharkhand. Perween has worked on projects for Crowdflower. Her job is to verify addresses, post job listings and match photos by product category. Through a translator, Perween, who speaks Hindi, said she learned enough about Internet search and basic English to do the job. In an e-mail, the company’s CEO, Mahesh Venkateswaran, said employees earn a base pay of $80 a month. At about 42 hours a week, this translates to an income of 44 cents per hour, not including extra “incentives.” Workers at Samasource’s for-profit partner in Kenya, Daproim Inc., receive $1.33 to $2.67 per hour. The organization’s cofounder, Stephen Muthee, said he partnered with Samasource in 2008 and 85 percent of Daproim’s employees are now working on projects generated by Samasource.  

DEBATING LABOR STANDARDS While socially responsible outsourcing connects low-income individuals overseas to the

— Leila Janah, as told to

Leila Janah, CEO of Samasource. global market, it’s a complicated business. Clair Brown, an economics professor and director of the Center for Work, Technology and Society at the University of California, Berkeley, said hourly wages are only part of the picture. “The problem with the minimum wage is that it’s good to set a wage per hour, but then we also need to have minimum hours, so that we’re assured of a living wage for a person over time,” Brown said. Janah said Samasource’s goal is to employ each worker 20 hours a week for two years. “But as you might imagine, we have very little control over what workers want to do and we can’t force anyone to do anything.” Another challenge is overseeing home-based work. That is especially hard for digital piecework like that offered by online transnational marketplaces, such as Amazon Mechanical Turk. “Home work is notoriously difficult to regulate and highly problematic — it tends to be very unregulated work,” said Cynthia Estlund, a law professor at New York University. “On the other hand, if home-based work were overseen in a responsible way by an organization that genuinely wants to ensure decent standards — decent wages — that might be a source of sustenance for workers that don’t have much else available.” Some labor experts are concerned about gov-

"So the exploitation of the workers is not so much — is not the problem — that we’re trying to combat, we’re trying to get companies to give work to new populations that they would’ve never worked with before. For example, you know, refugees in a refugee camp in Africa. These are people who would be seen as unemployable by traditional outsourcing companies, so Samasource’s mission is to make those people employable and to help them develop saleable skills rather than regulate the companies that are giving them work." — As told to SF Public Press

ernment oversight to ensure workers are compensated fairly. Vic Van Vuuren, director of the United Nations’ International Labor Organization office in Pretoria, South Africa, said many underdeveloped countries in Africa “are able to meet minimum international standards for minimum conditions.” But regulation is slow to follow, he added. “It’s the implementation of the oversight that is glaringly missing, which prevents people from moving from a poverty situation to a quality of life in the workplace.”

Contact SFPP writer Ambika Kandasamy at: Join the conversation:


Cheap Phone Calls Hang in the Balance in Tug-of-war Between FCC, Cable Giants Voice-over-Internet service takes center stage in struggle over net neutrality


oice-over-Internet calling is steadily growing in popularity, replacing costly long distance phone services with free or cheap options that are affordable for many low-income and immigrant communities. Francisco Cocson, a Filipino immigrant who lives in Daly City, talks to his mom and siblings in the Philippines every week with free voice and video VoIP calls through Yahoo and Skype. “It’s more cheaper than to use the phone card or the phone line,” Cocson said. But Cocson and other Bay Area residents could see cheap calls become a thing of the past depending on the outcome Story and photos by: of a battle being waged Christi Morales in the halls of Washing// Public Press ton D.C. Federal Communications Commission Chairman Julius Genachowski wants to reclassify broadband from an information service to a telecommunications carrier with the goal of gaining some authority to regulate providers such as Comcast, AT&T and Verizon, which the companies fiercely oppose. On Thursday the FCC voted to begin the process to decide whether to reclassify broadband. The public and members of the industry can submit comments to the FCC until Aug. 12. The FCC’s effort is one of the key battlegrounds in the pursuit of net neutrality or open Internet. Net neutrality is the principle that all online services should be treated equally without interference. Aside from potential lawsuits from broadband companies, a congressional review of the Communications Act could alter those plans, further delaying the FCC’s implementation of the National Broadband Plan and its key net neutrality components. Without net neutrality, proponents say Internet providers — especially cable and telecoms — could make or break stand-alone Voice-over-Internet Protocol services, like Skype. Since the FCC has no control over broadband providers after a court ruled the agency had no right to sanction Comcast for blocking BitTorrent users, these corporations can decide which traffic gets slowed or not, potentially whittling away competition and options for consumers, said proponents of net neutrality. “Once you allow networks to discriminate against certain types of services, you will have less services in the market, less competition and ultimately less consumer choice,” said Thilo Salmon, chief executive officer of San Francisco’s Sipgate Inc., a European Voice-over-Internet Protocol — or VoIP — company that entered the

United States last June. VoIP calls flow through the pipes of Internet providers and are susceptible to sound quality loss or failure, if slowed or blocked. In 2005, Madison River Communications, a North Carolina-based telecom and DSL Internet provider, was caught blocking Vonage’s VoIP service and ordered to stop. More recently, Free Press, a staunch net neutrality advocate, urged the FCC in January to look into Comcast practices that possibly give network preference to its own “Digital Voice” VoIP service over competitors. Digital Voice is not routed through the “public” Internet, but over a separate company network line and in this set-up cannot affect the traffic of other VoIP providers, said Sena Fitzmaurice, Comcast vice president of government communications. “There has been a question about the regulatory treatment of Voice-over-Internet that has been an open question for a couple of years, and the FCC has had open proceedings on that and those still remain open,” she added. Fitzmaurice said regulatory discussions about VoIP management do not focus on Comcast, but are aimed at all Internet providers. FCC spokesman Mark Wigfield confirmed this via email and said the issue “was raised in the Open Internet proceeding that is pending before the commission.” Meanwhile, VoIP-only companies continue to clamor for open Internet rules to protect their business interests. For Sipgate, new to the U.S. VoIP market, the stakes are high. If Internet providers interfere with competing VoIP traffic, that “could kill our service,” said Salmon.

Impact on low-income consumers, immigrants Some argue that traffic discrimination will impact low-income consumers by reducing affordable options. VoIP quality is vulnerable to interference so a service whose traffic is degraded, could lose customers and go out of business, said Sameer Vaerma, associate professor in the college of business at SF State. Such practices reduce competition, thus decreasing affordable choices for low-income immigrants who may not be able to afford access to VoIP, said Malkia Cyril from the Center for Media Justice, a public interest group in Oakland. VoIP has become an alternative for immigrants who regularly call abroad, said Cyril. A study by The Tomas Rivera Policy Institute at the University of Southern California said

many Latinos are familiar with the service and “positively associate VoIP with a lower cost to telephone.” Cable and telecom interest in certain populations implies VoIP use is in fact prevalent among immigrants. Comcast has service plans to Asia, Latin America and Mexico. AT&T doesn’t have special VoIP plans for certain countries, but did say in an investor briefing that “Mexico is AT&T’s most popular international calling destination.” In the Bay Area, almost 30 percent of all residents are foreign-born migrants, according to 2008 U.S Census Bureau data. In San Francisco, Ayad Kholaifat from Jordan

options would have a negative financial impact on them, especially Cocson. After being laid off and now working for minimum wage, he’s responsible for living expenses, a student loan, support for his disabled father, as well as his mother and siblings.

Cable and telecom advantage Comcast and AT&T have similar strengths because they offer other core services in addition to broadband – cable for Comcast and landline and mobile for AT&T. Vonage, Skype and Sipgate are independent VoIP-only services that run us-

voice subscribers, as well as 23.6 million cable customers, according its financial highlights online. AT&T has 23 million TV subscribers with 70 percent of those customers opting for service bundled with VoIP. In 2008, global communications researcher TeleGeography found that out of 14.4 million new VoIP customers, 80 percent of them subscribed through cable companies. Trefis estimated last year that VoIP penetration in the U.S. was about 31 percent among broadband customers, translating to a subscriberbase of close to 25 million. Meanwhile, Dell’Oro Group, a telecom market research firm, forecasts the number of VoIP subscriptions among global

Francisco Cocson calls his mom every week using free VoIP voice and video services.

also uses VoIP to contact family back home. “I use [Skype] like every other day, sometimes every day,” he said. Skype’s fee-based unlimited international plan costs about $13.99 a month, but Kholaifat utilizes the free service that allows anyone with a web connection to sign up and make no-cost calls to other Skype users. Meanwhile, Comcast’s VoIP with unlimited U.S. calling and its best international add-on plan costs $55 a month, according to San Jose-based Infonetics Research. The report listed other key providers with comparable monthly packages at $53 for AT&T and $25 for Vonage. “If [Internet] providers have the authority to slow or block any traffic that they don’t like, then that means Comcast, AT&T, etc., could crush somebody like Skype,” said Brian Carver, assistant professor in the School of Information at the University of California, Berkeley. Kholaifat and Cocson said a lack of cheap VoIP

ing the Internet. “Those who offer Internet access these days actually have a phone service of their own — pretty much everyone – so they have a vested interest in trying to actually keep competition down,” said Sipgate’s Salmon. Fewer competitors mean cable and telecoms are poised to capture VoIP customers, said SF State’s Verma, because of existing relationships with customers who subscribe to their Internet or digital television services. Several market reports said future VoIP growth would come from broadband providers who bundle the service with high-speed Internet and digital television, referred to as “triple-play” or “double-play” depending on the combination of services. Analysis by financial website Trefis said bundles appeal to customers because they’re cost-effective and all services are on a single bill. At present, Comcast is one of the most popular VoIP services in the nation with 7.9 million

broadband subscribers, which was at 24 percent in 2009 worldwide, will grow by 52 percent by the end of 2014, according to its five-year Carrier IP Telephony Report. Trefis forecasts that stand-alone VoIP cannot match bundled offerings and “are thus likely to lose out.” FCC action is particularly critical to curb practices such as traffic discrimination, said Catherine Sandoval, assistant professor at the Santa Clara University School of Law. With Congress set to review and update the Communications Act, which could take more than a year, and broadband providers mulling over possible litigation, the FCC’s plans to reclassify broadband and enforce its net neutrality agenda would be put on hold. Contact SFPP writer Christi Morales at: Join the conversation:

18 SF Public Press

ECONOMY June 22, 2010 //


Macy’s Sells Rubies ‘Filled’ With Glass Local salespeople fail to disclose composite nature of rubies Gemologist Cortney Balzan (left) examines a ruby under UV light while Robert Tobin, Balzan's attorney, observes.


t was fall 2008 and the holiday sales rush loomed, Cortney Balzan recalled. That’s when he said he felt forced to confront one of America’s largest retailers and warn it that it might be misleading its customers. For a quarter century, Balzan, an independent gemologist, had been responsible for the quality oversight, appraisal and repair of the precious gemstones that Macy’s West, the San FranciscoStory: David V. Johnson based West Coast divi// Public Press sion of Macy’s, sold in its Photo: Jackson Solway stores. // Public Press But beginning in 2007 and continuing throughout 2008, Balzan discovered that gems arriving for distribution and sale did not satisfy Macy’s quality standards. Topping his list of complaints were the rubies, which Balzan determined were composites of ruby and leaded glass worth an estimated $15 a carat. The inferior ruby product, which began flooding the market around 2004, generated an industrywide debate about how vendors should market it. By 2007, a consortium of international gemological laboratories concluded that the new stones should be called “ruby-glass composites.” In fact, the Jewelers Vigilance Committee, a leading industry watchdog, concluded that the stones could not be sold as “rubies” or “precious gems” under Federal Trade Commission guidelines, since they lacked the durability and value of bona fide rubies. Balzan insisted that Macy’s West apply industry standards. But he said company officials ignored his recommendations to reject the goods or disclose their true nature to customers. As Christmas approached, he spent many late nights composing e-mails to Macy’s jewelry and legal executives in San Francisco and New York. “I told them that Macy’s had a problem,” Balzan said. “But all they wanted to talk about was how they could glamorize the product.” In May 2009, Macy’s canceled Balzan’s contract for quality control and appraisal, but retained him for repairs. He continued to see the

same substandard gems arrive at his laboratory, he said. Last December, Macy’s severed all ties with Balzan. He sued Macy’s that same month in San Francisco Superior Court, alleging that the store had contracted with him in bad faith. The San Francisco Public Press conducted its own, independent investigation of Macy’s gems, which substantiated Balzan’s claims. This investigation found that Macy’s salespeople at all three of its San Francisco locations did not accurately describe its products and sold lead-glassruby composites as bona fide rubies, without disclosing their true nature. In the past year, Macy’s gemstones have garnered some media scrutiny, though none in the general-circulation press. Two televised sting operations, one by “Good Morning America” last November and another by San Francisco’s CBS5 in February, supported Balzan’s allegations. In both shows, reporters purchased gems at Macy’s stores that were sold as natural rubies but found under testing to be composites. In January, a former employee of both Macy’s and Balzan’s laboratory initiated a separate classaction lawsuit, also in San Francisco Superior Court, on behalf of customers who claim they purchased gems that were not what Macy’s represented them to be. Despite the two lawsuits and media attention, Macy’s continued to sell the same controversial stones. In February, the retailer posted on its website a menu detailing gem treatment and proper care, with the rubies’ glass treatment and several other disclosures Balzan said he demanded. Macy’s stores maintain a similar chart behind sales counters to aid employees and customers. But on separate visits two months ago to three Macy’s locations, salespeople did not make the charts available to a reporter who bought ruby jewelry. Macy’s staff also did not fully disclose the treatment and care of its gems when asked. Federal Trade Commission guidelines require such disclosures without prompting, prior to purchase. A spokesman for Macy’s declined repeated requests for comment, saying the company does not discuss matters currently under litigation,

and that a key staff member needed to answer questions was on vacation. Macy's offered the following written statement to CBS5's February broadcast: "Ruby gemstones sold in settings in Macy's Fine Jewelry departments are genuine. In general, rubies are heat treated to enhance their quality and appearance. Rubies also may be fracture-filled with glass or a glass-like substance during the heating process to improve the overall quality of the stone. We have signs in our precious and semi-precious gemstone departments to inform customers that gemstones may have been treated and may require special care. We are always available to discuss the quality of a purchased item with our customers because we want our customers to be satisfied. Rubies sold at Macy's represent an outstanding value for our customers."

The customer shouldn't have

to ask," Spector said. "It should be disclosed so that the customer knows what he's buying"

Though the laws on disclosure are clear, federal and state agencies have not publicly reacted to news reports or the lawsuits. To date, no regulatory agency — the Federal Trade Commission, the California Department of Consumer Affairs or the California Attorney General’s Office — has taken action against Macy’s.

LOCAL QUALITY CONTROL In the mid 1980s, Macy’s West had problems in its fine-jewelry department, Balzan recalled. Some cubic zirconia were sold as diamonds. The company hired Balzan, who in 1983 had become the first master gemologist appraiser in northern California, as an independent contractor to improve its quality-control standards. Balzan played an important part in Macy’s West’s elaborate system of checks and balances

to ensure that everyone in jewelry sales knew what was being sold and how it had to be advertised. After Macy’s staff buyers purchased jewelry from vendors, the products arrived at the Macy’s Fine Jewelry Center on O’Farrell Street for distribution to the company’s 259 stores in the western United States, Hawaii and Guam. Balzan and his team of checkers would then examine the merchandise to ensure that it met Macy’s criteria and satisfied the buyer’s request. “We were the independent laboratory,” Balzan said. “Our goal was to give an objective, unbiased assessment, based on their standards.” His analyses included identifying the type of stone, its quality, treatments and measurements. Balzan would even occasionally track down the mine the stone allegedly came from. “In quality control, you have to have some rejections, because no one is perfect,” Balzan said. Gems that clearly didn’t meet Macy’s standards were stamped “RTV” — return to vendor. If the product’s quality was ambiguous, Balzan informed the Macy’s buyer, as well as jewelry executives and legal counsel, what the stone was and how it had to be sold to customers and advertised to the public. The buyer would then decide whether it was worth selling in Macy’s stores. The Fine Jewelry Center was run by Mimi Lowe, whom associates nicknamed “Dragon Lady” for her strict adherence to the rules. “I made sure everyone followed the standard,” said Lowe, who retired from Macy’s in 2004. “If there was a problem, you would bring in a partner, the upper echelon, legal, and you would make a determination.” To ensure that Macy’s complied with federal and state laws, Balzan also helped develop detailed charts, explaining the treatment that each type of stone had received and the special care each required. These charts were supposed to be made available to customers, said Balzan, who also helped with the training of salespeople about proper disclosure. Over the years, Macy’s took an increasingly larger share of Balzan’s attention. His staff grew to 18 people, who worked in the additional laboratory space that Macy's provided in the Fine Jew-

elry Center. Balzan hired Lowe, its former director, as a consultant in 2006. At the height of his relationship with Macy’s, the company represented 90 percent of Balzan’s business. Balzan’s lab was expected to be on call at all times to inspect shipments, especially before the holidays.

HODGEPODGE OF QUESTIONABLE STONES Starting in 2007 and increasingly in 2008, gemstones began arriving at the Fine Jewelry Center that, according to Balzan and Lowe, not only failed to meet Macy’s quality standards but were not even the gems that vendors reported them to be. There were sapphires whose fractures were filled with glass; “green amethysts” that were really praseolite (a form of quartz); “natural black diamonds” that were irradiated to induce color or that were really black sapphires; diamonds that were enhanced with laser drilling or were fracture-filled; and then there were the leadglass-ruby composites. In many cases, Balzan ordered the stones to be returned to the vendor. Most of the problem gems, Balzan and Lowe said, came from one East Coast company, BH Multi. Headquartered off Fifth Avenue in Midtown Manhattan, BH Multi began as a small jewelry operation in Aruba founded by Fatollah “Effy” Hematian, an electrical engineer who emigrated from Iran in 1978 and became a jewelry designer. BH Multi is now a top jewelry vendor for Macy’s Inc., which owns all Macy’s and Bloomingdale’s stores. Hematian also sells his Effy Collection merchandise on his own website and in stores throughout the Caribbean, in Alaska and in New York. Despite the problems Balzan alleged in BH Multi’s products for Macy’s, the vendor gained an increasing share and superior location in the stores’ gem showcases, according to Balzan and Lowe. Today, Effy Collection jewelry, marked by black jaguar tags with gold “EFFY” letters, dominates the ruby, emerald, sapphire, and black diamond sections of the colored-gem area.

HOW TO DISTINGUISH A RUBY FROM A LEAD-GLASS COMPOSITE Is your ruby 100% legit? With the right tools (many of them cheap and readily accessible), a trained eye can tell the difference.

$29 LOUPE (10x)

Test: Look at surface with reflected lights and examine internally with transmitted light RUBY Uniform, red appearance.

COMPOSITE Round bubbles, crazing visible.






DARK-FIELD LOUPE Test: See same features as with eye-loupe, but much easier to see tell-tale indicators RUBY Retains pure red color.

COMPOSITE Blue flashes, yellow pools from leadglass content.




Test: Examine under ultraviolet wavelengths with UV lamp RUBY Glows like a Christmas light.

COMPOSITE Does not react; maintains same dull color.

POLARISCOPE Test: Rotate the stone 360 degrees on the test surface RUBY Blinks four times when turned.

COMPOSITE Doesn't blink when turned.



& UP

ADVANCED TOOLS More sophisticated testing can confirm and quantify the percentage of lead-glass present, including XRF Analysis (lead detection) and advanced microscopy (to separate ruby's crystal structure from the non-crystalline glass).

Photos of instruments: "Gem Identification Made Easy," Antoinette Matlins | Prices from: s Gemstone Press q Gemological Institute of America

ECONOMY // June 22, 2010


19 SF Public Press


When You Boycott BP Gas Stations, BP Can Profit

Usually heated to improve appearance. Surface cavities and fractures are often filled with foreign material including glass and glass-like substances. Occasionally diffused to improve color. Clean with warm soapy water and a soft brush or cloth. Avoid strong detergents, heat, pressure and ultrasonic. Avoid re-polishing or re-cutting of the stone. Color may fade in light or with heat.

You need gas. On the right is a BP. On the left is a supermarket gas station. Which do you choose, and why? If you skip the BP to go to the other, you might actually be Opinion: putting more cash Ben Popken // The Consumerist in BP's stained pockets. Your corner BP station is mainly just a brand, a licensed franchise owned by a local businessman. The fuel that comes out of the pumps might have been bought from a totally different company. Only right before it gets put on the truck for delivery is the special BP sauce, additives, added. However, if you opt for another place, like a supermarket gas-station, they could be a wholly-owned BP subsidiary, with BP getting all the cash. According to Facebook group Boycott BP these include Castrol, Arco, Aral, am/pm, Amoco, Wild Bean Cafe and Safeway gas.

While not accepted by the Macy's Fine Jewelry Department, treatments other than those listed above are often used in the industry. Due to the nature of some treatments, such as fracturefilling, and the fact that technology and practice is constantly changing, we cannot guarantee that all have been detected. "Gemstone Treatment and Care"

This is not to say you shouldn't choose a different gas station if the BP one makes you squeamish. Just bear in mind that doing so is a political act, one that damages BP's brand in the long-term, rather than having direct financial impact on BP. The immediate business loss will be felt most acutely by the local businessman. Over the years, that same guy could own the same stations, and change it from being a Shell, an Exxon, or a Sunoco, depending on who's got the best deal. Then again, if no one is buying BP gas, do you think many new gas station owners are going to be eager to sign up for a BP franchise? Which would mean a loss of future franchise fee income for BP, and that will end up hurting their bottom line. Just not today.

Contact Ben Popken at: Join the conversation online.

Macy's Mother's Day Jewelry Catalog, 2010

Effy Collection merchandise occupied five pages of Macy’s 20-page jewelry catalogue for Mother’s Day this year. Vendors pay between $30,000 and $75,000 for each page that advertises their lines by name, according to a former Macy’s jewelry employee who requested anonymity to protect her current business relationships. The payments, she said, help defray the cost of printing and mailing. Vendors who pay for advertising receive preferential treatment, the employee said, because Macy’s jewelry buyers themselves have to solicit it. BH Multi enjoyed a special status at Macy’s, Balzan and Lowe charge. Lowe’s successor as the Fine Jewelry Center’s director ordered Balzan to review fewer and fewer of the gemstones arriving from BH Multi. Nevertheless, Balzan still discovered the same problems, he said. Benny Hematian, president of BH Multi and son of founder Effy Hematian, did not respond to repeated requests for comment, both by phone and e-mail. But a spokesman for the company, reached last week, said he was “almost 100 percent sure” that Macy’s “knew everything, and we disclosed every information that there is to disclose.” Without leaving his name, the spokesman directed this reporter to a company lawyer, who did not respond to questions e-mailed to him. Balzan concluded that his quality-control laboratory was being bypassed when he noticed that gems that Macy’s sent to his lab for repair or resizing were the same ones he had rejected. Such repair or resizing requests normally came from customers who had purchased the jewelry at Macy’s. The retailer, Balzan believed, was ignoring his guidance. This differed from Balzan’s experience of working with Lowe when she was the Fine Jewelry Center’s director. “We used to go back and forth,” Balzan said. “Under the new director, we didn’t have that same rapport.” Such bypassing of quality control in jewelry distribution would constitute a break with prior practice, according to the unnamed former Macy’s jewelry employee. “We would never have gotten away with just bringing in any jewelry and sending it out there without knowing what we were selling our customers,” she said. “I mean, that never happened. Ever.” In the run-up to the Christmas season in 2008, Balzan said he confronted the top Macy’s jewelry executives, both in person and by e-mail. He warned them that if any of the stones were sold in stores, Macy’s had the duty, under Federal Trade Commission guidelines, to disclose their true nature to customers prior to sale. Robin Spector, a commission lawyer, said the sale of composite rubies places a burden of disclosure on the retailer or vendor, since any treatment that changes the value, permanence and care of a gem needs to be disclosed. “The customer shouldn’t have to ask,” Spector said. “It should be disclosed so that the customer knows what he’s buying.” But Macy’s jewelry heads didn’t share Balzan’s concern, Lowe said. She participated in the discussions and was told that vendor contracts cleared Macy’s of any potential legal responsibility. Balzan rejected Macy’s legal view. “You can’t always say the vendor is wrong,” Balzan said. “If they’re selling you material, and you have an independent gemology laboratory telling you it’s something different, you say, ‘We’ll check into it.’ And that’s what was always done at Macy’s.” In spring 2009, Macy’s Inc. laid off almost all of its 1,400 San Francisco corporate employees and dissolved Macy’s West as a separate division (though employees were allowed to reapply for

jobs with the firm). In May, the company ended Balzan’s quality-control contract. Balzan, in turn, was forced to lay off staff, including Lowe, in August. In December, idled by the additional loss of his Macy’s repair contract, Balzan hired Robert Tobin, a Bay Area attorney known for his prosecution of a priest sexual-abuse scandal at San Jose’s St. Martin of Tours. “There were e-mails to everyone who was in charge,” Tobin said about Balzan’s suit. “Everyone was advised of the problem.” Tobin said he could not share the e-mails with the Public Press, due to the early stage of the lawsuit. Last year in July and December, Lowe said she purchased ruby jewelry at Macy’s stores in San Rafael and Hawaii as gifts for relatives. She said she tested the rubies and they turned out to be composites. In January, she initiated a classaction lawsuit on behalf of customers who had purchased Macy’s gems. “It will be demonstrated that Macy’s defrauded knowingly thousands and thousands of people,” said Thomas Brandi, the plaintiff’s attorney. “It’s a sad day when a name that could be trusted can no longer be trusted.” Richard Marcus, a professor at Hastings College of the Law in San Francisco, said he thought there might be a hurdle getting a group of people such as the one in Lowe’s suit certified by a court as a class, because the lead plaintiff is a former insider.

WHAT WE FOUND To test Balzan’s and Lowe’s claims, the San Francisco Public Press conducted its own independent investigation. On April 28, the newspaper purchased three Effy Collection ruby jewelry pieces (two rings and one pendant) at three separate Macy’s stores: in Union Square, in the Stonestown Galleria and in Daly City’s Serramonte Center. The Macy’s listed retail price for the items totaled $6,400. The jewelry was actually purchased at a steep discount. Thanks to the Macy’s Friends and Family sale and after opening a new Macy’s account, this reporter bought the items

It's ruby with a lot of air, filled

with glass," she said. "Call it whatever you want, and charge $10 or $20 for it in the costume-

jewelry aisle

for $2,821, including sales tax. In each store, the jewelry cases had indexcard-sized signs stating that gemstones may have been treated, and that customers should ask staff for more information. Before each purchase, the reporter asked the salesperson to explain the treatment each ruby may have received. Each employee acknowledged that the rubies may have been heated, a commonly accepted practice that permanently improves color and clarity. None mentioned the possibility that the rubies may have had fractures filled with glass (as acknowledged by Macy’s gem treatment chart linked from the company’s website) or were glass-ruby composites. But Macy’s staff did not simply neglect to share the fine print with the customer. The salespeople, after acknowledging the heat treatment, asserted that the rubies were

“natural,” “a real ruby,” “not synthetic” and “not a lab ruby.” None mentioned that the rubies required special care or that their redness can fade over time, especially in light or heat. Only one salesperson suggested that it should be cleaned with warm water. Yet according to the website, ruby purchasers must “clean with warm soapy water and a soft brush or cloth,” “avoid strong detergents, heat, pressure,” and “re-polishing or recutting of the stone.” Each piece of jewelry was accompanied by a tag, “Fine Precious Ruby,” with no other caveats or explanations. The Public Press then sent the jewelry to New York’s American Gemological Laboratories, one of the nation’s most respected, for testing. Christopher Smith, its president, concluded that all three stones were composite rubies that were "heavily treated using ... lead-glass to fill fractures and cavities." It was impossible to determine exactly how much glass the gems contained without destroying them, Smith said. The newspaper also examined the stones for lead content — an additive used to improve the visual properties of the glass. The test was conducted with a Thermo Fisher Scientific XRF Analyzer, commonly used to check for traces of the metal in consumer products. All three pieces showed significant lead content. Local accredited gemologist and appraiser David Harris examined the three stones, which weighed between 1.4 and 2.8 carats. He valued them at approximately $40 per carat. In May, the reporter returned the jewelry to the three stores and alerted its salespeople, who weren’t the same ones who sold the merchandise, that the rubies were determined to be composites of ruby and leaded glass. The first salesperson twice repeated that “they do that to prevent it from cracking.” The second appeared shocked and disputed the gemologist’s report, claiming that it was “definitely ruby.” When told that the only disclosure made before sale concerned heat treatment, she said that heating is common — then also acknowledged a possible further treatment. “We’ve been told that sometimes, if there’s a crack in the stone, it’s filled,” she said. “But it’s definitely a natural ruby.” The third salesperson replied that it was “no secret” that Macy’s sells rubies with glass. She then placed on the counter the Macy’s gem treatment and care chart, encased in a plastic stand, that previously had been out of view of customers.

CHEAP AND BRITTLE Almost all gems sold nowadays are treated in various ways to enhance their beauty. Although such treatments present challenges for identification and disclosure, few have generated the controversies that the lead-glass fill of rubies has.  “I think it’s the most serious issue that the jewelry industry has ever faced,” said Antoinette Matlins, an internationally recognized gemologist with seven books in print.  For more than 25 years, leaded glass has been used to fill fissures in raw corundum — the species of stone that includes ruby and sapphire — to enhance their clarity and color before being faceted. But around 2004, gemologists started seeing a new, more radical form of glass fracture-filling in rubies. Finished stones showed numerous bubbles under microscope, indicating that an increasing amount of glass was being used. In some stones, the glass was acting as an adhesive, holding the underlying bits of

In this close-up of a ruby composite, internal bubbles mark the presence of glass. —photo courtesy of Ouellet and Lynch

corundum together. Gemologists found that after melting away the glass additive, some rubies were shown to be at least half glass. “Rubies are on the forefront because of all the foreign material,” Harris said. “It changes the whole characteristic of the stone.”  Natural ruby is the second hardest stone in existence, behind diamond. Composite rubies, however, are fragile and require special care. They can crack and lose their color over time. If exposed to everyday household products like strong detergent or lemon juice, the glass can quickly degrade. Only the lightest of cleaning treatments should be applied.  Thanks to their fragility and foreign additives, glass-lead-ruby composites are worth a fraction of the value of real rubies. Rubies of similar, lesser clarity and color cost $350 per carat wholesale, while high-quality natural rubies run $5,000 to $12,000 per carat.  Ruby composites, by contrast, are worth $1 – $50 per carat.  The quality and value of composite rubies is so inferior, Matlins recommends an entirely different name — “rubaire.”  “It’s ruby with a lot of air, filled with glass,” she said. “Call it whatever you want, and charge $10 or $20 for it in the costume-jewelry aisle.”  Composite rubies are also difficult to detect with the naked eye. That, combined with their fragility, makes them especially problematic for gemologists and jewelry salespeople. Several gemologists interviewed mentioned stories of bench jewelers placing composite rubies in gem cleaning solutions, having them dissolve like pop rocks, and then being blamed by their owners for the damage.  The sale of precious gemstones, a $28 billion market for U.S. jewelry stores, is governed by state and federal laws intended to ensure that customers know what they are buying. As gem technology has advanced, so too has the challenge in properly identifying gems and the obligation to share that information with customers.  According to Federal Trade Commission standards, it is “unfair or deceptive” to call a gemstone by its name if it “is not in fact a natural stone” or if it is “manufactured or produced artificially.” Stones should not be called “gems” or “rubies” if they don’t possess the “beauty, symmetry, rarity and value necessary” to qualify as such. 

INDUSTRY SELF-REFLECTION On this basis, Suzan Flamm, a lawyer for the Jewelers Vigilance Committee, has concluded that composite rubies cannot legally be called “rubies” or “gems” without qualification.

“You’re not talking about a ruby or anything natural,” she said. “It’s disturbing to those of us who care a lot about integrity and not getting over on consumers.” Flamm has joined other industry experts calling for reforms of the nomenclature and disclosure of ruby composites. Earlier this month during the JCK Las Vegas jewelry convention, Matlins emceed a seminar with Flamm and other speakers on composite rubies, sponsored by the American Gemological Association.  The session was one of several at such conferences in the past three years.   “I’m very much concerned with the issue of proper representations and proper disclosures,” said Smith of the American Gemological Laboratories, who spoke at the session. He called Macy’s a high-profile example of a general problem in the industry.  “We don’t know how much of the material has been sold to consumers,” he said. “Since we don’t know how much has been sold, we don’t know how much has been properly disclosed.”  Matlins was more vehement in her criticism of Macy’s and the consequences for the industry.  “I really think Macy’s should be nailed to the wall for this,” said Matlins, who visited a Macy’s in Tucson last February and used her loupe to identify ruby composites in the retailer’s jewelry case. “They should have taken them out of the store, but they haven’t, and they’re still charging exorbitant prices.” Despite its nationwide presence, Macy’s has always retained a special status in the hearts of San Franciscans. Since 1866, its flagship store has anchored Union Square as a treasured city landmark. That history was lost, Balzan and Lowe said, after last year’s mass layoff and the dissolution of Macy’s West. They see the quality-control standards that they upheld as part of the unique Macy’s West culture that made it a superior franchise. “I don’t want to talk about Macy’s nowadays,” Balzan said. “I get angry and my blood pressure rises.” In his spare time, Balzan teaches gemology. He occasionally takes his students to Macy’s and other stores around town to test their wares. He still maintains his laboratory on Market Street, a block away from Macy’s, with a staff of four. His employees include his son Patrick, who is also an accredited gemologist. “I’m disappointed in the way everything ended up,” the younger Balzan said. “We put a lot of work into Macy’s.” Contact SFPP writer David V. Johnson at:


SF Public Press // June 22, 2010 //

Andrew Goldfarb draws an underground comic strip called "Ogner Stump's One Thousand Sorrows" ( His book "Slub Glub in the Weird World of the Weeping Willows" was recently published by Spunk Goblin Press.

Uncertain About Rising Seas, Developers Using Mid-Range Estimate to Build Up Island p.22


Sand and Silt Require $137 Million Fix for Treasure Is. p.23 Financial Upside for Developers Is Long-Term and Risky, City Says p.23

Through Two Mayors, Connected Island Developers Cultivated Profitable Deal p.24

Treasure Island Timeline p.24 Treasure Island Residents Face Choices for Relocation p.26 Homebuilder Lennar Uses Federal Taxpayer Funds to Balance Its Books p.27

Can Treasure Island Realize Its Ecotopian Dream?

Crossword p.27 Welcome to the San Francisco Public Press, Beta Version p.28

Why the Bay? Because It's Nuts p.28


WHEN? Master plan aims high. Will big money and hardball politics bring it down?


hat does the massive redevelopment of Treasure Island give to San Francisco? First and foremost, it funnels money into jobs for construction workers and profits for the contractors who will do the building. The project also promises to loosen up a housing market Analysis: that has stayed tight Jeremy Adam Smith // through the recession, Photo: creating 8,000 new Monica Jensen residential units, 30 // SF Public Press percent of it affordable housing. Bonus:

All those new residents (around 20,000) and businesses will add significantly to the city’s tax base. But the Treasure Island redevelopment, which aims to be the most ecologically sustainable community in the world, delivers something else as well: a positive self-image of San Francisco as a forward-looking, avant-garde, socially and environmentally responsible metropolis. Nothing excites the utopian impulse more than a blank slate — and Treasure Island’s 486 acres have been semi-abandoned since the Navy shut down its base in 1997. Thus the island provides an almost-ideal

laboratory for the latest green building and urban design techniques. In fact, reading the Treasure Island redevelopment plan (which you can do yourself at www.sftreasureisland. org) instantly reminded me of Ernest Callenbach’s classic 1975 novel “Ecotopia,” which speculates what would happen if Northern California, Oregon and Washington separated from the United States and tried to develop an ideal “stable-state” economy and culture. Branded by some as a hippie-dippie relic, the book holds up shockingly well in 2010 — and it continues to be discussed after having sold more than a million copies in nine languages.

Some of Callenbach’s wacky, far-out proposals — like requiring every Ecotopian household to sort waste into compost and recycling — are now the 21st century reality in Bay Area cities. Other ideas — like carbon neutrality — have come to seem perfectly reasonable in the age of rising sea levels. The following laundry list could come from Callenbach’s “Ecotopia” — but, in fact, these items come straight out of the Treasure Island sustainability plan:

Continued on page 26

This report on Treasure Island is co-sponsored by, an online magazine about alternative economics and sustainable community, and Spot.Us, a micro-funding website for journalism. Support this reporting. Donate via To view multimedia content for this report, scan this QR code with your smartphone.

22 SF Public Press



Uncertain About Rising Seas, Developers Using Mid-Range Estimate to Build Up Island


ost of Treasure Island will be inundated by the end of this century, if the documented progression of the ocean’s rise caused by climate change continues as predicted. Studies foresee sea-level rise ranging from as little as five inches to as much as six feet. The lowest parts of Treasure Island lie just four feet above the Bay's low tide. To buffer the island from the Bay, project officials say they have Story: hit upon a solution that Victoria Schlesinger // SF Public Press protects the developGraphic: ment from ever-changing Shawn Allen // Stamen Design climate change assumptions. They will build up the ground on 100 acres of the island to accommodate as much as 36 inches of sea-level rise, set back development from the shore and leave room for future levees or other adaptations. The currently planned work, including geotechnical improvements, is estimated to cost $137 million. If the developers are wrong, and sea-level rise is more extreme, the costs would climb higher. “There are projections that range all over the map,” said Jack Sylvan, redevelopment director of the Treasure Island Development Authority, which oversees the island’s transformation for the city. “The challenge is, how do you actually plan for something that you don’t know what it’s going to look like?” Absent a fixed upper limit for sea levels this century, the rationale for a three-foot lift — as opposed to any other height — is based partially on optimistic scientific projections, cost considerations and the challenges of building on an unstable manmade island that has been sinking in one corner. Without being able to point to any concrete financial, technical or scientific limitation, the city says it is comfortable taking a chance on 36 inches. The city Planning Department’s forthcoming Treasure Island

environmental impact report, obtained through a public-records request, finds the approach acceptable. The city and developer consortium reviewed seven climate change research papers published between 1987 and 2007 with sea-level-rise estimates ranging from five to 55 inches by the end of the century. The latter, worst-case scenario was predicated on a disastrous 5.8-degree Celsius rise in the global average temperature. They also looked to the Bay Conservation and Development Commission, the state’s California Climate Adaptation Strategy, and to Gov. Arnold Schwarzenegger’s Delta Vision Blue Ribbon Task Force. All use 16 inches by 2050 and 55 inches by 2100 as upper benchmarks, though labeling those numbers as improbable. Based on their review, the developer and the Treasure Island Development Authority together concluded that in 2075 sea-level rise may reach 36 inches, a scenario they all said makes the planning workable. But increasing attention to climate change and its broader effects has led to a flurry of new research. Sea-level rise predictions still range widely, and developers and governments worldwide combine the data in a variety of ways. The three most recent studies use semi-empirical models, which incorporate increasing rates of change. If global temperatures increase by 2.8 C — a likely scenario — sea levels will, on average, rise between 33 and 57 inches by 2100. A few years ago, a 55-inch rise seemed like a fringe scenario. But according to these most recent studies, that is likely to happen. And if the unthinkable were to occur, and global temperatures increased by 6.1 C, the ocean could rise by 70 inches, calculates Potsdam University ocean physicist Stefan Rahmstorf in his 2009 paper. These modeling experiments take into account melting land ice — a significant factor set aside in many sea-level-rise estimates, including

reports issued in 2007 by the United Nations Intergovernmental Panel on Climate Change, an international body of scientists.

BUILDING IN THE DARK State and local agencies have provided little concrete guidance on Bay Area coastal development projects grappling with sea level rise. The Treasure Island build-up plan has not yet received the official blessing of the San Francisco Bay Conservation and Development Commission, a key regional regulator that recommends that all builders look at how future sea level will impact their projects. Treasure Island Community Development, the project’s developer consortium, has informally shared its sea-level-rise plans with the commission. “The commission has no formal opinion on this project,” said Steve Goldbeck, the commission’s deputy director for climate change and legislation. “But I can say that the approach they’re taking, I think, makes a lot of sense.” “We don’t, however, have some fixed number that people have to design to,” he added. “The reason for that is because we don’t know how much sea level is going to rise because we don’t know how much greenhouse gas we’re going to emit going forward.” The city and developers gave various, and at times conflicting, answers as to why exactly 36 inches was the most appropriate height to raise the developed parts of the island, instead of the more cautious 55 inches, suggesting there are geotechnical and financial limits to what can be built. “If we always took the most conservative approach, a lot of things wouldn’t happen,” Sylvan said. To bulk up Treasure Island for sea-level risks, Treasure Island Community Development turned to Moffatt & Nichol, an international engineering firm known locally for its work on

the new Bay Bridge and Ferry Building. Moffatt & Nichol proposed adding enough soil to raise 100 acres of the island, where the building pads and infrastructure will sit, by 36 inches

How do you actually

plan for something that you don’t know what it’s going to look like?

above the 9.1-foot, 100-year high tide. They also added six inches of “freeboard,” a term engineers refer to as a “fudge factor.” The remaining 230 acres will be left at their current height. (Yerba Buena Island, an adjacent outcropping of bedrock measuring at its peak roughly 338 feet tall, does not need to be raised.)

SEA WALLS New properties will be set back 300 feet from the shore allowing room for adaptation should the sea rise more than 36 inches. One plan is to increase the height of the perimeter’s rip-rap retaining wall, which currently stands between 12 and 14 feet, by piling more rocks on it. This is the least expensive of various adaptation options, which will be paid for through a tax on Treasure Island residents. The project’s managers have not yet calculated the cost of raising the perimeter or other strategies, but all parties assume that option will be cheaper than building for a 55-inch rise. That expense has not been formally calculated either. The city guessed it might cost an additional $130 million to build the development pads to 55 inches. And yet, cost may not be the signifi-

cant obstacle. Instead officials said that adding more soil weight could jeopardize the island’s stability and impact the rest of the design plans. Dilip Trivedi, a Moffatt & Nichol coastal engineer working on the Treasure Island project, said mounding to 55 inches would be “a huge cost difference.” “You could go to 55 inches,” he said, “but at some point it doesn’t become cost effective. At that point then the project suffers, we can’t do the project anymore.” So while technically possible, he said the height increase would also leave the federally owned Job Corps Center, which the development will not own or alter, at the bottom of a hole in the center of the new neighborhood. “In the end it was, ‘Why 55 inches?’ Even that could be wrong,” Trivedi said. “How is it that we don’t build for the 1,000-year earthquake then? We don’t. It’s a matter of acceptable levels of risk over your planning horizon.” The major variable is the pace of global warming and climate change. Scientists say they still need to better understand how polar ice sheets and mountain glaciers are responding to climate change in order to make more accurate predictions. In particular the Greenland and Antarctica sheets “have started to flow much faster towards the sea in recent decades, which contributes to rising sea levels,” Rahmstorf, author of multiple studies on sea-level rise, wrote in an e-mail. “That this would happen so rapidly was unexpected,” Rahmstorf said. “That is probably the main reason why sea level rise has been underestimated in the past.”

Contact Victoria Schlesinger at:

POLLUTION Many Treasure Island sites have been decontaminated through soil removal or capping, which entails covering the remaining toxic soil with a clay cap. But there is growing concern that coastal sites once considered sufficiently remediated may become problematic as sea levels rise. Contaminated soil could come in contact with ground water as the sea pushes it higher. Bay Area scientists and regulators are beginning to explore the problem given the large number of former military sites in the region. As a former military site, Treasure and Yerba Buena islands suffer from environmental pollution problems affecting their soil, water, air and existing buildings. Not only does the Navy have environmental remediation to complete – from the removal of DDT and petroleum products to PCBs and lead – but also the developers anticipate that additional clean up will cost them $33 million. But because the Navy is only required to remediate an area to current use standards, if the developers want to build homes where an auto shop once

stood, more cleaning will be required. In addition to soil concerns, the construction on Treasure Island will last at least 18 years causing unavoidable and significant increases in traffic, ground vibrations, noise and air pollution, according to the forthcoming Treasure and Yerba Buena Islands draft Environmental Impact Report, which the Public Press obtained through a public records request. The draft EIR is subject to change prior to its official release in mid-July. Particulate matter measuring the size of a human red blood cell or smaller is of concern and “may lead to adverse health effects” in people exposed to substantial amounts of it. The report also says traffic will increase – despite plans to mitigate construction traffic and discourage the use of cars on the island – during peak hours on the Bay Bridge and downtown San Francisco. The city will likely adopt a statement of overriding consideration, concluding that the project’s environmental damage is unavoidable and outweighed by its potential benefits, said city officials.



San Francisco Bay 10



31 24


Toxins key PAH: Polycyclic aromatic hydrocarbons PCB: Polychlorinated biphenyl DDT: Dichlorodiphenyltrichloroethane TPH: Total petroleum hydrocarbon Dioxins: Polychlorinated dibenzodioxins VOC: Volatile organic compound




Caption key LU: Land use P: Pollution S: status Source: U.S. Navy Site 13 Storm water outfalls and offshore sediment LU: The 538-acre off shore perimeter of Treasure and Yerba Buena Islands. P: Metals, PAHs, PCBs, DDT, TPH. S: Closed in 2005.

Site 2 Decontamination Training Area LU: Was used for radiation decontamination training for 20 years, is currently housing, and will be housing. P: Radioactive materials. S: Closed in 1988.

Site 12 Old Bunker Area LU: Was Navy ammunition bunker and storage yard, currently housing, and will become housing and open space. P: Refuse and incinerated solid waste containing PCBs, PAHs, dioxins, arsenic, lead, radium 226, and trash spread over 93 acres. S: Groundwater study underway.

Site 20 Auto Hobby Shop/Transportation Center LU: Was the site of auto repair and storage center with underground storage tanks, the buildings were demolished, land will become housing. P: Petroleum, oils, lubricants, VOCs. S: Closed in 2004.

Site 31 Former South Storage Yard LU: Was storage yard and trash dump, currently a paved elementary school playground P: Lead, DDT, PCBs, motor and diesel oil, dioxins. S: Scheduled to be closed in 2010.

Site 27 Clipper Cove Skeet Range LU: Was a clay skeet Navy target range for 10 years, to become a marina. P: Lead shot, lead, and PAHs, water pollution. S: Scheduled to be closed in January 2013.

Site 25 Seaplane Maintenance Area LU: Was an airplane and vehicle maintenance area with underground storage tanks, pipelines and fuel pump house, and will become a new marina. P: Petroleum, oil, lubricants, water pollution. S: Currently requesting closure. Site 21 Vessel Waste Storage Recovery Area LU: Was a vessel oil recovery site for 50 years, and will become commercial area. P: Petroleum, VOC, water pollution. S: Treatability study underway. Site 24/building 99 Dry Cleaning Facility LU: Was at different times a facility for laundry and dry cleaning, meat processing, and printing, today it’s an office, and will become open space. P: Petroleum, oil, lubricants, and chlorinated solvents. S: Groundwater pollution treatability study underway for closure in 2016.

Site 32 Former Training and Storage Area LU: Was hazardous materials storage and training area, and will be open space P: PCBs, TPH, dioxins, pesticides. S: Clean up underway. Site 10 Bus Painting Shop LU: Was used to paint buses, mix paint and store pesticides, and will be open space P: Iron, carcinogens such as benzo(a)pyrene, dibenz(a,h) anthracene, water pollution. S: Closed in 2007.

(All clean up statuses are based on the Navy’s 2009 Site Management Plan. The Navy declined to provide the updated 2010 Site Management Plan.)


23 SF Public Press


Sand and Silt Require $137 Million Fix for Treasure Is.


here is a high probability that a Loma Prieta magnitude or greater earthquake will shake the Bay Area during the projected 18-year redevelopment of Treasure Island. However, city development officials say the island will ultimately be safer than the liquefaction-prone areas of downtown San Francisco and the Story: Marina. Victoria Schlesinger Parts of // SF Public Press the city’s Graphic: Shawn Allen shoreline // Stamen Design and all of Treasure Island are manmade. The island was constructed in the 1930s out of sand and silt dredged from the Bay and held in place with a riprap retaining wall. When loose water-saturated soil is shaken intensely, it turns into a thick, unstable liquid, a process called liquefaction. The city and developer plan to compact the 100 acres of soil that will lie beneath the new buildings and around existing ones, as well as reinforce the island’s perimeter. They estimate the geotechnical improvements will cost $137 million. “The buildings should structurally perform well on such soil assuming they are built to code,” said Thomas Holzer, a U.S. Geological Survey research geologist who studied Treasure Island following the 1989 Loma Prieta earthquake. “The untreated open space area could be pretty exciting in a large earthquake with water and sand spouting out of the ground.” Water and sand can push up to the ground’s surface and produce sand boils, resembling geysers, during liquefaction. About 300 acres of open space and parks on Treasure Island will remain untreated. This has another expert concerned. “Treasure Island has a significant problem. It was very poorly engineered when it was built, in terms of geotechnical engineer-

Treasure Island

Source: U.S. Geological Survey

Liquefaction Susceptibility

Very High High Medium Low Very Low

San Francisco Bay

Interior area-wide densification Perimiter geotechnical improvements as-needed Vibration control zones near existing structures Perimeter geotechnical improvements

Source: Treasure Island Community Development

ing,” said Jack Boatwright, U.S. Geological Survey senior seismologist There is a two-out-of-three chance that the Bay Area will experience another earthquake of a 6.7 magnitude or greater within the coming 30 years, according to the 2008 Uniform California Earthquake Rupture Forecast. A 7.0 magnitude earthquake along the nearby Hayward-Rodgers Creek fault system would cause Treasure Island to shake with an acceleration of .5 g-force, which is strong enough to knock people to the ground, said Boatwright. In comparison, Loma Prieta measured 6.9 magnitude and was 60 miles from Treasure Island, producing about .3 gs there during its roughly four-second peak. Treasure Island is flanked by two of the region’s most volatile faults — the San Andreas lies 18 miles to the west and the Hayward is 7 miles to the east — the HaywardRodgers Creek Fault system is due to move soon. Its last quake was in 1868, with a 6.8 to 7.0 magnitude, and scientists estimate that the fault shifts every 140 years. Areas such as Foster City, where the fill has been compacted, suffered little damage during Loma Prieta, according to Boatwright. Treasure Island Community Development will improve the island’s perimeter, possibly by strengthening it with stone or soil cement columns and rock berms. The interior areas beneath the new development will undergo densification through deep dynamic compaction, which entails repeatedly dropping a very heavy weight on the ground. The developers also will siphon water from deeper layers of mud and sand to the surface though a process called surcharging that helps settle the soil. Vibratory compaction methods, which compact the soil through shaking, will be used as well.


Financial Upside for Developers Is Long-Term and Risky, City Says


he developers of Treasure Island stand to earn a potential 20.6 percent return on their investments if the 18-year, phased construction plan and real estate sales proceed as they predict. That does not include possible future real estate sales. Story: Victoria Schlesinger But San Francisco of// SF Public Press ficials say the potential private upside is laced with long-term economic risks — only some of which are calculable — that will be borne mostly by the partner firms in Treasure Island Community Development, and their investors. The massive and long-term project is complex and inherently uncertain, with homes and businesses to accommodate up to 20,000 people. Much of the uncertainty centers on the inexact science of predicting property values, as amply demonstrated by the recent housing bust. Though many of the details have yet to be worked out, the Treasure Island Development Authority says that much of the payback from land sales will occur in later phases of the project, encouraging the developers to stick with it for the long haul and follow through with hundreds of millions of dollars in up-front investments before making a profit. “In the first phase, they will not get their return,” said Jack Sylvan, redevelopment director for the Treasure Island Development Authority, the city’s agent negotiating the public-private partnership with the developer consortium. “And it’s likely that in the second phase they won’t have been able to get their return. Their ability to get their return is by being successful over a very long time period. Unless they hit some massive upswing in the market.” Under the current agreement, San Francisco will earn roughly $13 million a year for the city’s general fund — as the project nears completion — due to the expanding real estate tax base. Nonmonetary benefits include a slew of public goods, such as 300 acres of open space and parks, an additional 2,260 units of affordable housing, 2,590 new jobs, and environmentally advanced architecture, landscaping and energy

systems. But not all city officials have concluded that the redevelopment plan is a good financial investment, especially because the land will require $1.5 billion in investment just to prepare the ground for building. “Anyone in their right mind would say that in this current economy, it’s a stretch,” said Aaron Peskin, former president of the Board of Supervisors. “The economy has changed forever, and it’s become more rational. No one is going to give a government or developer major amounts of capital to shore up an island built on fill.” Peskin called Treasure Island “a blob of Jell-O in the Bay,” adding: “The best thing is to let natural processes do its thing, and allow it to return to that which it came.” Sylvan acknowledged that Treasure Island “is about as risky a project as you can find.” But he argued that the risk will mostly accrue to the developers, who are putting up at least $548 million in performance bonds on the private market over the life of the project. Sylvan said the partners in Treasure Island Community Development expect a return based on their economic projections. And they need to show these projections to investors to get any investment. The risks are many, Sylvan said: • The city might not get all the property transferred from the U.S. Navy on schedule, slowing down construction. • The costs of preparing the infrastructure might rise due to unforeseen challenges. • Developers don’t know what prices they can charge for the land, once it has been prepared, because of fluctuating market conditions. Treasure Island Community Development is made up of several developers and investors. Lennar, a national homebuilder, will cover half of the consortium’s horizontal costs, which amount to $274 million. The other half will be paid by Stockbridge Real Estate Funds, a private San Francisco-based investment firm. Stockbridge is partnering with Wilson Meany Sullivan, a real estate and development company known for its rehabilitation of the San Francisco

Ferry Building. Kenwood Investments, one of Democratic lobbyist Darius Anderson’s many investment operations, is also part of the partnership, although it will contribute no money. Kenwood representatives declined to comment publicly on their role. So far the developers have spent almost $53 million on the deal, $6 million of which has covered the costs of the city’s redevelopment staff and consultant expenses. Treasure Island Community Development has been in exclusive negotiations with the city since 2003.

PROFIT SHARING According to the 2010 term sheet — the development contract approved by the Board of Supervisors in May — Treasure Island Community Development will contribute a total of $548 million to prepare the island for “horizontal” development, which includes seismic stabilization, underground infrastructure, environmental remediation, roads and a ferry quay. The developers will also contribute $91.7 million in subsidies toward of affordable housing construction. Treasure Island Community Development will pay the Navy $55 million plus interest over 10 years. They then will compensate the Navy an additional $50 million if the developer achieves an 18 percent annual internal rate of return, which is projected by 2021. Higher levels of profit will be further split between the developer, Navy and the city. The deal puts the Navy first in line for revenues, and then the developers. The Treasure Island Development Authority comes later. Michael Tymoff, the redevelopment project manager for the city, insisted that the city will not be responsible for problems with project financing. No money for the development will come from the city’s general fund. Instead, the city will tap Treasure Island newcomers for $944 million, through community facilities district taxes known as Mello-Roos bonds, and tax-increment financing, to be repaid by the new residents over the next 30 years. The city has designed several financial benchmarks to ensure that it does not shoulder undue

economic risk. It has divided up the horizontal development into several phases and sub-phases, anticipated to last through 2028. Before each phase begins and the city hands over a portion of property, Treasure Island Community Development must find a third party to put up a performance bond, or guarantee, that equals the value of the phase’s cost. If the developers default at any point during a phase, the city retains the value of the bond, allowing it to complete the phase with a new contractor. For example, during the first phase, currently slotted to span from 2011 to 2013, Treasure Island Community Development will spend $196 million before it earns any revenue, and will be required to complete a portion of the public benefits and horizontal development before proceeding to the next phase. The details of each phase — its length and what must be completed

Sylvan acknowledged that Treasure Island is

about as risky a project

as you can find.

— are still under negotiation, said city officials. The developers’ potential reward for shouldering so much risk comes in the form of real estate. The term sheet specifies that the city will retain ownership of the developed public spaces, several historic buildings and 1,984 housing pads. The city will partner with affordable housing groups to build those homes. Of those, 435 units will be operated by the Treasure Island Homeless Development Initiative, a collaboration of community organizations that carry out the federal Base Closure Community Redevelopment and Homeless Assistance Act of 1994, which requires that all former military sites assist homeless people in some way. The collaboration currently oversees 250 units on the island that will be rebuilt and will be given an

additional 185. But Treasure Island Community Development will own the lion’s share of the property. It has the right to retain 60 percent of the remaining 5,280 housing pads, as well as half of the next 20 percent of the pads. They have the right to build on the lots or sell them. The remaining 20 percent must be auctioned to other builders. Five percent, or 275, of all the new units, must be sold or rented to people whose household income is below or equal to the area’s median household income — $73,127 for San Francisco in 2008, according to the most recent figures from the U.S. Census Bureau. The developer estimates that the commercially priced units will range from a low of $597,000 for a low-rise flat to a high of $1.2 million for the 200 townhouses to be built on Yerba Buena Island, based on current market prices. Based on the contract between the city and Treasure Island Development Authority, which is limited to the horizontal development, it is not possible to calculate the developer’s total revenue or profit, the majority of which could be earned through home and commercial real estate sales. Treasure Island Community Development also has the right, and in some instances a requirement, to develop all of the commercial space, including two hotels with a total of 500 rooms. The agreement also requires the Treasure Island Development Authority to enforce greenbuilding design standards with all builders. But many of the environmental big ideas have still to be worked out in detail. Everything from the alternative energy and a large organic garden to maintaining the island’s parks hinges on the city developing new partnerships with companies and organizations to share the costs of these green amenities. Sylvan said that developing these new partnerships are now his biggest concern.

Contact Victoria Schlesinger at: The story continues:

24 SF Public Press



Research: Jerold Chinn // SF Public Press

Aug. 1936 Exposition President Leland Cutler "broke" ground on Treasure Island. Feb. 18, 1939 Golden Gate International Exposition opens to the public. Feb. 28, 1941 San Francisco officially leases Treasure Island to U.S. military. Treasure Island is named the Naval Training and Distribution Center. Feb. 16, 1965 The Navy opens bids for $4.5 million worth of housing. The Junior Chamber of Commerce asks for a moratorium so land can be evaluated for a small-plane airport. Oct. 17, 1989 Treasure Island, seven miles west of the Hayward Fault and 18 miles east of the San Andreas Fault, suffers significant liquefaction during 6.9 Loma Prieta quake. Source: Treasure Island: San Francisco Exposition Years (Richard Reinhardt)

San Francisco History Center, San Francisco Public Library

Through Two Mayors, Connected Island Developers Cultivated Profitable Deal

How the city handed over control one of the city’s most scenic locales — despite audits, voter anger and rebellious bureaucrats In the next six months, local officials and a consortium of private developers will begin to finalize legal papers for Treasure Island’s future as a high-density eco-city. Renderings of the gleaming towers, parks and gardens suggest harmony and community. Yet the promise of an urban Treasure Island, one of the most complex Story: and risky redevelopments Alison Hawkes // SF Public Press in San Francisco’s recent Bernice Yeung history, has for more than // SF Public Press a decade been wrapped up in a process driven by power and influence. The mayor got neartotal control. Political friends got plum jobs and contracts. Critics were exiled. City and state conflict-of-interest laws were waived. Independent inquiries and the will of voters were nakedly rebuffed. Big projects naturally draw big money. Treasure Island, currently slated for $6 billion in residential and commercial development, was an unusually large prize. But companies with political and social ties to two mayors won the two major projects related to the redevelopment — with the master development drawing only one serious bid. The winning bidder was a group that included Darius Anderson, an influential Democratic Party lobbyist and fundraiser for both outgoing Mayor Willie Brown and incoming Mayor Gavin Newsom. One partner was the Miami-based homebuilder Lennar, then the second-largest in the nation, also now leading the concurrent $7 billion Hunters Point Shipyard redevelopment and the conversion of the former Mare Island Shipyard in Vallejo. Other companies, backed in part with public-employee pension funds, have also joined the team now known as Treasure Island Community Development. Over the years, few have been outwardly critical of the contracting process. An exception was former city supervisor and mayoral antagonist Tony Hall. During his brief tenure as head of the Treasure Island Development Authority he raised allegations — not all borne out by facts — of missed deadlines, unpaid developer fees and a “sweetheart deal” in the making. In 1998, San Francisco voters attempted to wrest power from Brown and install good-governance practices for Treasure Island. But supervisors never implemented many of the provisions in the ballot measure, which passed easily. Even today, some current and past city supervisors say they had to pick their battles, and Treasure Island has been a remote concern. Bill Rutland is a lobbyist and a close friend of Brown who briefly worked on behalf of Anderson, the lobbyist, to win the first part of the Treasure Island redevelopment bid. He said that despite appearances, his team won the contract on merit. “Anybody that has the size and capacity to do these types of billion-dollar deals is going to have relationships with the powers that be,” Rutland said. “But they have to show a track record and a financial capability for doing that.” But Charles Marsteller, a former coordinator of San Francisco Common Cause, said no matter how dazzling the eco-city seems on paper, insider politics represents a giveaway to companies with unusual access to government decision-makers. “The public thinks we’re going to build a city in the public’s interest,” he said. “I would say

sive making sure the staff was by the book.” But at least one critic said she was silenced. “I was pushed aside because I questioned too much,” said Lois Scott, a city planner who voiced concerns about the seismic safety of Consolidating power building high-rises on an artificial island. Scott said she was eventually demoted to code enFrom the start, Treasure Island was Brown’s forcement. (Green said the seismic issues were pet project. In 1997, as the U.S. Navy began shut“thoroughly investigated.”) tering operations on the island, the former state By 1998, two political rivals saw an opening. Assembly speaker parlayed his influence over Kopp and real estate millionaire Clint Reilly, the Legislature to push a bill establishing a sepa- who was gearing up for a mayoral run, launched rate governing authority for Treasure Island. Proposition K to substantially curb Brown’s The move provoked power over the island. The opposition. A Brown ballot measure mandated ... there was only one political rival, former that good-governance legitimate bidder, which became procedures should guide state senator and retired judge Quentin Treasure Island’s developa problem because we were Kopp, suspecting ment. To blunt support for Brown would appoint negotiating against ourselves, Proposition K, the Board loyalists, fought of Supervisors preempagainst the bill. “He tively adopted some of the rather than negotiating could control them,” changes, though fell short Kopp said. “The objec- with two parties. of stripping the mayor’s tive was always to appointment power. get the development Voters passed Prop. K, power in the hands of friends and political supbut it was never fully implemented. Former porters.” supervisor Michael Yaki said the voter-approved As expected, Brown won, and the articles of initiative was a declaration of policy, not a bindincorporation for the Treasure Island Developing mandate, so the supervisors were under no ment Authority listed the San Francisco mayor obligation to follow it. Yaki later had a change as the “sole incorporator.” Directors would be of heart. “I remember trying to go there one named by the mayor “in order to perfect the weekend and not being able to get to the base, organization of the Authority.” City and state and I thought this was very odd,” Yaki said. “I conflict-of-interest laws forbidding city employgot more reports from other people.” ees to hold dual offices were waived, making Yaki began pushing supervisor appointments it possible for Brown to pack the authority’s to the Treasure Island authority board. But his board. proposal never went anywhere. The authority’s governance structure is unPriming the pump usual for California. Although San Francisco’s mayor filled many appointments at city commisWith the Treasure Island Development sions, the agency overseeing Treasure Island is Authority in place, the city began priming the a state entity. At other converted military bases, pump for redevelopment, starting with modpower had been dispersed into the hands of ernization of the Clipper Cove marina between many. March Air Force Base in Riverside County, for example, is governed by representatives from Yerba Buena and Treasure islands. Among the first bidders to surface was the county and three of its cities. In Monterey Treasure Island Enterprises, backed by star County, Fort Ord Army Base’s reuse authority Democratic fundraiser Anderson and his former consists of officials from the county and eight billionaire boss, Los Angeles supermarket magtowns. McClellan and Castle Air Force bases in nate Ron Burkle. Sacramento and Merced counties are overseen Their ties with Brown ran deep. Both had by county boards of supervisors. been part of Brown’s fundraising effort for his Former Planning Commissioner Gerald Green, one of Brown’s original five appointees to 1995 election campaign. Burkle was a former law client of Brown’s and donated to various the Treasure Island authority board, defended Brown causes. the entity’s design and said knowledgeable The Anderson-Burkle bid immediately propeople like him belonged on it. voked claims that the outcome was a fait acompli, “That was done not for mayoral control, but and a civil grand jury looked into it. The resultto have experienced people who could jumping 1998 report said the Clipper Cove marina’s start the process,” said Green, who years later bidding process had never been made public “in lost his planning job in an unrelated conflict-ofan adequately informative way,” and called on interest scandal. the Treasure Island authority to use competiAlso on the early board were the city’s directive, open bidding procedures. tors of redevelopment and of the Port of San The report went on to decry the lack of Francisco — both Brown campaign donors. public oversight, and said the process had been Among the authority’s staff were a number “hampered by concern about the concentration of “special assistants,” a cadre of city employees of power, jurisdictional squabbling, political hired by the mayor without civil-service testing. infighting.” A 2001 civil grand jury report noted that some In spite of these concerns, three bids came in were scrutinized in the press as patronage jobs. and none was easy to dismiss. The Port of San The report named several Treasure Island Francisco reviewed the proposals, and each had staffers, including former director Annemarie its strengths and weaknesses. Conroy. London Breed, an unpaid intern in the What might have killed the Anderson-Burkle mayor’s office who was promoted to developproposal was the port’s findings that it would ment specialist and secretary to the board, now generate about $1 million less in revenue over sits on the Redevelopment Commission. She a 16-year period than the two other applicants. defends Brown’s integrity: “He was really aggreswe’re building a city in the private sector’s interest — and whatever they want, we’re getting. Ultimately the residents have to live with the consequences long after the developer is gone.”

Nevertheless, the authority’s staff recommended Treasure Island Enterprises as the winner. A selection committee concurred and in February 1999 the Anderson-Burkle team secured the bid. The plan had merit, but it didn’t hurt that Anderson and Burkle also had gotten to the right people. Anderson told the San Francisco Chronicle that he had paid lobbyist Bill Rutland, Brown’s friend, $30,000 to learn “what were the hot buttons of the general public.” Brown and Anderson did not respond to requests for comment on the marina or subsequent deals. A Burkle spokesman would not speak on the record about Treasure Island. Rutland said in an interview that his job with Anderson was to shepherd the proposal through a slew of public agencies. But he did not recall talking to the mayor about it. “I wouldn’t have, because the decision was going to be in the hands of the authority,” he said. Rutland added: “I couldn’t deny being Willie Brown’s friend. I really understood the process, and my ability was to help shape a proposal that meets the expectations and quirks that makes the city of San Francisco — and believe me, there are many.” The other bidders were disappointed. “We put out a prospect, submitted plans and financial studies,” said Terry Cowhey, who had partnered with one of the three marina bidders, Modern Continental. “It was a couple of volumes, phone books of stuff, we submitted. And it was all an inside fix. It was all based on who was Willie Brown’s buddy, and it had nothing to do with the technical qualities.” The marina project was a toehold onto Treasure Island. When the city was ready to open bids for the larger redevelopment, Anderson was back at the table, this time with one of the largest homebuilders in the country, Lennar.

Would-be bidders drop out To develop the rest of the island, the Treasure Island authority issued a public call for a master developer in October 2000. The brochure was sent out to 500 companies, and it boasted that the project was a “once-in-a-lifetime opportunity” to redevelop the “jewel of the San Francisco Bay.” A few months later, the agency hosted a prebid conference and about 150 parties turned up. But by the February 2001 deadline, only two bids had come in. One came from Navillus Associates, a group of investors that included an international financing expert and local actor Peter Coyote. The second bid came from a consortium called Treasure Island Community Development, which featured a familiar name from the marina development: Darius Anderson. Homebuilder Lennar was also part of the team. By most accounts, the Navillus proposal for a “Magic City” was lackluster. Treasure Island Community Development submitted a document championing the team’s experience “developing large projects on challenging sites” and highlighting its strong financial footing. The Treasure Island authority brought in a team of consultants — including Dean Macris, a former city planning director and Willie Brown loyalist — to judge the proposals. They dismissed Navillus for lacking relevant experience, financing and community ties. But the Anderson-Lennar team met all the requirements. The consultants noted, in particular, that Lennar “has the financial

capability to undertake this project without the financial participation of the other members” of Treasure Island Community Development. The consultants said Lennar’s experience with Bayview-Hunters Point and the Mare Island base conversion in Vallejo, as well as Burkle and Anderson’s experience with the marina, illustrated the requisite “sensitivity to the built urban environment.” Some Treasure Island authority staff voiced concern about the lack of competitive selection. But then-board member Gerald Green said the paucity of bidders simply reflected that “there are a lot of unknowns about what would be involved” with such a large and complex development. Still, the agency agreed to hire yet another outside consultant to evaluate how to “improve the prospects for increased competition,” according to city records. It charged Bay Area Economics, a Berkeley-based real estate consulting firm, with anonymously interviewing five developers who had attended the pre-bid meeting but declined to submit a bid. The firm reported that seismic issues were “10 times more important than any other concern.” Developers also had “doubts about the financial feasibility of the project” and concerns that the cost of seismic improvements in an earthquake zone would “necessitate a level of density on the island that would be ‘unethical.’” The report also noted that potential developers were concerned about “the political climate in San Francisco.” The Treasure Island authority’s board discussed these findings at a September 2001 meeting and considered ways to improve the competitive process. For example, the report said, the city could explain how it would assist with the redevelopment, and it could “make a selection based solely on qualifications.” If adjustments were made, two developers said they would feel “very positive” about submitting a bid. Instead of reopening the bidding process, Treasure Island authority staffer Stephen Proud recommended allowing Treasure Island Community Developers alone to submit a more detailed proposal because the staff did not think the agency would receive an “outpouring of new proposals.” (Proud later left the authority to oversee Lennar’s Bay Area projects, including Treasure Island.) Development authority board member Marcia Rosen, then also the director of the city’s redevelopment agency, told the group that she supported Proud’s recommendation because it was “in the public interest to move forward expeditiously.” Not everyone agreed. Six days later, the Treasure Island Community Advisory Board — a citizen committee charged with providing input to the development process — was briefed on the Bay Area Economics report. Some members expressed concern about moving forward with only one option. “Rushing this project only places it in the hands of a small group of people who have no competition,” one member said. Former Supervisor Aaron Peskin said the scenario was not ideal from a public-interest perspective: “There were only two bidders, and one was completely out to lunch. So there was only one legitimate bidder, which became a problem because we were negotiating against ourselves, rather than negotiating with two parties.” But the course appeared to be set. In April


1993 Naval Station Treasure Island tagged for closure by federal government’s Base Realignment and Closure Commission. 1993 San Francisco Examiner asks Bay Area architects for ideas on what to do with Treasure Island. Suggestions included moving the U.N. from New York, a pleasure dome, an annex to the Academy of Sciences and a prison. 1995 Board of Supervisors designates Treasure Island a redevelopment area.

July 27, 1995 The Island, which had been 14 feet above sea level at its inception, has sunk to nine feet. The cause: Loma Prieta. May 2, 1997 Treasure Island Development Authority created as a state agency, controlled by mayor of San Francisco. May 8, 1997 Navy ends operations and vacates Treasure Island, though still owns it. Oct. 23, 1998 City chooses Lennar Corp. to develop Hunters Point Shipyard. Feb. 11, 1999 Island authority selects Treasure Island Enterprises, led by Darius Anderson and Ron Burkle, to modernize Clipper Cove Marina. A civil grand jury criticizes the bidding. April 2002 Island authority issues call for proposal from AndersonLennar team, eliminating sole competitor. Jan. 2003 Anderson’s team comes back with revised plans after first draft envisions housing on seismically unstable ground.

2002, the Treasure Island authority board unanimously voted against reopening the bid, and it gave Treasure Island Community Development the exclusive opportunity to submit a request for proposals. A few months later, Anderson’s team drafted a plan for a “model of 21st Century living,” which included housing on the most seismically unstable portions of the island. In January 2003, after listening to public comment, the developers came back with a revised plan that pulled housing away from the shoreline and included new parks. The Citizen’s Advisory Board still had concerns. “It was not environmentally defendable,” said Kathrin Moore, an architect who sits on the board. “It was suburban in nature and density. It was car-dependent and unresponsive to the physical setting of Treasure Island.” In April 2003, the Treasure Island authority voted unanimously to approve the deal.

Enter Newsom With the November 2003 mayoral election approaching, Anderson put his money on Gavin Newsom, whose $4 million campaign war chest received a lift from associates of his Treasure Island development team. Though small, recorded campaign donations document a network of political bonds. Anderson’s Kenwood Investments, a partner in the Treasure Island deal, gave $250, while colleagues at Anderson’s lobbying firm Platinum Advisors — including Jay Wallace, who is actively involved in the development — collectively handed Newsom a total of $4,500. Two of the principals of Wilson Meany Sullivan, the private real estate firm that was added to the development partnership in 2005, supported Newsom’s mayoral campaign and a political action committee that supported him. There were additional ties. Lennar employee Laurence Pelosi, the nephew of House Speaker Nancy Pelosi, served as Newsom’s campaign treasurer from 2002 to 2007. Chris Gruwell, Newsom’s campaign finance manager, also appeared to have an in with Anderson. After Newsom narrowly won the election, Gruwell went to work for Platinum Advisors. A few months later, Anderson paid Newsom another favor, hosting a luncheon at Platinum’s Sacramento office to help Newsom retire $400,000 in campaign debt. The event caused a flap because San Francisco law prohibits government decision-makers from accepting contributions from anyone vying for a city contract. But Newsom’s attorney was dismissive of the conflict-of-interest allegations, telling newspapers that the local statute didn’t apply to the Treasure Island authority because it was a state entity. (Newsom’s office did not return phone calls for comment.) By the late summer of his first term, Newsom shuffled staff around. He created a new agency, the Mayor’s Office of Base Reuse and Development, and appointed assistant city attorney Michael Cohen as its director. Cohen had been involved with the Bayview-Hunters Point Shipyard development, and the negotiations over Treasure Island. In what has since been dubbed the “triple play,” Newsom also reassigned the existing Treasure Island authority’s executive director, and persuaded Tony Hall, his conservative political rival on the Board of Supervisors, to take the job. Newsom then appointed mayoral aide Sean Elsbernd to Hall’s supervisor seat, providing Newsom with a fourth ally on the board. Hall said in an interview that Newsom asked him to take the job several times, and he finally agreed because he considered himself a development expert. Hall was indeed a player in the city development game, and he counted Anderson among his political donors and fundraisers (Hall

• City leaders decided to build the island over part of the 735-acre shoal just north of Yerba Buena Island, a 147-acre hunk of rock where the spans of the Bay Bridge would meet. The sandy shoal, long a navigation hazard, ranged from 2 feet below the surface to about 26 feet deep. • The Army Corps of Engineers began construction Feb. 11, 1936, and finished Aug. 24, 1937 — reportedly 15 days ahead of schedule and $4,100 under budget. The island cost $3,808,900 to create, all of it federal aid from the New Deal's Works Progress Administration. San Francisco Mayor Angelo Rossi, a Republican, called it "the newest of our insolent possessions." • The island is one mile long and three-quarters of a mile wide — 403 acres, or 0.9 square miles. • Barges hauled 287,000 tons of rock — quarried from Napa, Greenbrae and McNear's Point — that was dumped on the shoal and piled up to create the form of the island 14 feet above the water's surface. Eleven dredges then worked 24/7 to suck, pump and scoop an estimated 20 million to 29 million cubic yards of mud, sand and gravel from the bottom of San Francisco Bay to fill in the rock-rimmed outline. No official record exists of exactly how much was dredged from the bay to make Treasure Island.

returned the $500 Anderson gave him in 2003). Newsom’s decision to install Hall at Treasure Island turned out to be a gross political error, but it gave a brief window into the internecine politics of San Francisco development. Unlike his predecessor, Hall stirred the pot from the beginning. A few months into the job, Hall got into a public tiff with Newsom supporter and San Francisco Film Commissioner Stephanie Pleet Coyote — wife of the actor whose development plan was rejected — over the filming of the movie “Rent” on the island. A few months later, The New York Times wrote about the redevelopment of former military bases. It included an inflammatory Hall comment that the Navy — which took over the island from the city during World War II — was delaying development by “holding us hostage on our own lands.” Treasure Island became the eye of the political storm. When the Navy sent a letter demanding $1.3 million in unpaid maintenance fees, Treasure Island authority board member Matthew Franklin told local newspapers that Hall had invited the wrath of the Navy through his comments. (Documents show that the military had been demanding the payments since 1998.) By the fall, Hall was openly clashing with board members. The developer’s contract was about to expire, and Michael Cohen of the Mayor’s Office of Base Reuse pushed for an extension. Cohen assured the authority’s board that these kinds of arrangements are “common on a large-scale development such as this,” even though a number of deadlines had been missed. But Hall was convinced that this was another attempt to solidify a “sweetheart deal” for the mayor’s fundraisers. “This is the most corrupt deal ever in the history of the city,” Hall said in an interview. (Darius Anderson did not return calls for comment, and Jay Wallace of Kenwood Investments declined to speak on the record.) The board ignored Hall and approved the extension unanimously.

SF Public Press

April 6, 2003 Island authority approves exclusive negotiating agreement with Treasure Island Community Developers, a partnership headed by Anderson and Lennar; critics decry lack of competition and overly generous agreement. Jan. 2006 Treasure Island Community Development releases updated drawings of the building plan, adopting green and smart-growth concepts. Dec. 17, 2009 San Francisco and the Navy reach agreement to convey land to the city for redevelopment. Navy guaranteed $55 million at first, an additional $50 million later and a share of profits from land sales. July 2010 Draft environmental impact report to be released for public review.

Platinum Advisor Chris Gruwell and CEO Darius Anderson celebrate at the newly reopened Washington Square Bar & Grill, affectionately known as the “Washbag.” Photo courtesy of Luke Thomas,

Dec. 2010 City and developers finalize legal papers for the master plan.

WHY AND HOW TREASURE ISLAND WAS BUILT • Looking to boost the local economy and spirits amid the Great Depression, San Francisco's business and political leaders — backed enthusiastically by the people — decided to put on a world's fair. The Golden Gate International Exposition, modeled after the city's Panama-Pacific International Exposition of 1915, would celebrate, among other things, the completion of the San Francisco-Oakland Bay Bridge (1936) and the Golden Gate Bridge (1937). The expo opened in February 1939 and ran until October, then reopened in May and closed Sept. 29, 1940.


• Known as "hydraulic fill," this slurry also contained human bones thought to have been from ancient Native Americans, a prehistoric mammoth tusk, fossilized ferns, seashells and millions of pounds of fish and shellfish. When the muck settled, 300 wells were drilled and several million gallons of salty brine were pumped back into the Bay. The artificial cay was then finished off with a 6-foot-high layer — 50,000 cubic yards — of rich topsoil from the Sacramento Delta. • Because the shoal was only 2 feet below the surface at the south end, adjacent to Yerba Buena Island, the new island began to emerge within days. Because the shoal was deeper to the north, the northern end of the new island was just spongy mud and was expected to sink a foot a year for seven years. Because it was so unstable, nothing could be built on it, and it served as a 12,000-car parking lot during the Exposition. The north end continues to sink roughly 1 centimeter a year. • Treasure Island was connected to Yerba Buena Island by an earth-and-gravel causeway. • After the Exposition, the island was to be used for San Francisco’s first trans-Pacific and transcontinental aircraft, including the famous Pan American Clipper. Before the Navy seized it from the city in 1942, the island was intended to be San Francisco's international airport, with crisscrossing, 4,000-footlong runways envisioned. • The naval station served as a major Navy departure point for sailors in the Pacific. It also trained sailors in electronics and radio communications. The base closed Sept. 30, 1997. A U.S. Coast Guard station occupies about half the southern end of the island, facing Yerba Buena Island. Research: Michael Winter // SF Public Press

To add poison to the water, just days before that vote, an anonymous whistle-blower — Hall said he was convinced it was one of his foes from the Treasure Island authority board or staff — had sent a letter to the city controller’s office alleging that Hall had removed funds from the city’s control by opening separate bank accounts for Treasure Island rental deposits. Hall said he had set up new accounts because he was concerned that the city was improperly placing them into the city’s general fund. The story of supposed financial malfeasance was all over the news. A week later, the Board of Supervisors held a hearing to sort out the “leadership crisis” at the Treasure Island Development Authority, according to city records. “The mayor appoints all commissioners — for heaven’s sake, department heads who are clearly his votes,” said John Elberling, then-chief financial officer for the board, “and the other three of us are citizens who serve at his pleasure. ... It’s the mayor’s call.” The hearing revealed the extent of the dysfunction at Treasure Island, highlighted by the controversial bank accounts. Despite well-publicized allegations to the contrary, Elberling said “the funds are functionally under the control of the treasurer’s office” and insisted that he did “not see an issue there.” Then-Deputy Controller Monique Zmuda said that while her office was advising the board to take responsibility for the new accounts, it was not illegal or inappropriate. Furthermore, at the hearing, the supervisors learned that Treasure Island Community Development had failed to pay $1.8 million in developer fees to the Treasure Island Development Authority because the authority had never exercised the right. “I said, ‘Where is the money?’” Peskin recalled. “The developer made representations that they would pay them, but they had not. They did pay once I raised the issue, and they paid retroactively.” At the following Treasure Island Development Authority board meeting,

Summer 2011 Expected groundbreaking.

Supervisor Chris Daly, an ex-officio member of the board, called the lack of payments an “unbelievable corporate giveaway.” But the issue did not get much notice in the local papers, which focused instead on the political theater produced by the Newsom-Hall rivalry. Then Hall appeared on ABC News, claiming that Treasure Island is “an inside deal — it’s structured to reward the mayor’s biggest donors or a group of his largest donors.” Newsom responded in the report that the allegation was “laughable.” Anderson then went on the offensive, and told the Chronicle that Hall had asked him to grant a $420,000 Treasure Island lobbying contract to one of Hall’s business associates. Hall denied the claims and retorted that Anderson was “full of crap.” Three days after Anderson’s allegations, Hall was fired. As outlined in his contract, Hall was given 30 days’ pay and a $254,500 golden parachute. The next day, the Ethics Commission informed the ex-supervisor that he was being investigated for using 2004 campaign funds to pay off a personal loan. Hall was fined $6,000, which he is contesting. With Hall out of the picture, the storms over the island seemed to have passed. In September 2006, Newsom appointed Mirian Saez as the director of island operations. Previously she was the head of real estate at the Port of San Francisco. Her spouse is Julian Potter, a high-level Newsom staffer. When additional seats on the authority board have opened up, Newsom has appointed heads of the Planning Department, the Mayor’s Office of Housing and staffers from the Mayor’s Office of Economic and Workforce Development. One appointee was listed by Lennar as a reference in a development submission to the city.

Private firms, public investment Times have changed since the redevelopment of Treasure Island was first conceived more than a decade ago. While environmental and transportation issues have always been part of the puzzle, financing the project in the current economic climate has become another hurdle for developers. Given the circumstances, responsibility for funding the project will fall to the few entities with the appetite for investing substantial capital in risky real estate development deals: big developers, wealthy private investors and public pension funds such as California Public Employees’ Retirement System, known as CalPERS, the largest in the country. Treasure Island Community Developers appears to have tailored its financing strategy accordingly. One of its partners, Stockbridge Capital, handles CalPERS real estate investments. Jack Sylvan, the redevelopment director for the Treasure Island project, recently confirmed that CalPERS has placed funds with the Treasure Island development. As of 2009, the pension fund had about $62 million invested in Stockbridge projects, not always with favorable returns. Earlier this year, it was reported that CalPERS pulled out of a Stockbridge-managed deal that included Wilson Meany Sullivan, and lost $91 million in the process. So while San Francisco residents may not have to assume financial risk related to the rebuilding of Treasure Island, California’s public employees will be exposed. When it comes to access to public pension funds, it may have helped that Treasure Island Community Developers has Darius Anderson on its team. Through the lobbying and investment companies that he runs, Anderson has been paid fees ranging from $400,000 to $2.25 million as a placement agent for Stockbridge to secure millions in investments from both CalPERS and the California State Teachers Retire-

ment System in the past five years. (Following an investigation of placement agents by the New York Attorney General's Office, Anderson recently paid a $500,000 settlement that does not admit guilt or wrongdoing; he was also named in a lawsuit that alleges that he “received, paid, or arranged kickbacks on investment business from the State of New Mexico.”) Financial maneuvers aside, the Treasure Island project has made steady progress. In January 2006, Treasure Island Community Development released updated drawings of the building plan, which adopted green and smart-growth planning concepts. It has won several environmental awards and gained the backing of some who had been skeptical. “I think the current plan is quite solid,” said Moore, the citizen’s advisory board member. A breakthrough in the plan finally came at the end of 2009, when the Treasure Island authority secured an agreement with the U.S. Navy for rights to the land. Though the city originally hoped to gain a no-cost conveyance, two bills before Congress that would have made it possible failed. A Navy representative said the most recent bill would have created “potential windfalls” for communities with high-value property and for private-sector developers. Instead, under the current terms, San Francisco agreed to make a $55 million payment to the Navy, followed by an interim payment of an additional $50 million. The Navy will also share in potential future profits from the resulting development. This paved the way for the Mayor’s Office of Economic and Workforce Development to present legislation related to the land conveyance, an updated development plan and a term sheet that lays out the scope and costs of the project to the Board of Supervisors. The term sheet was approved in May. But there are additional hurdles to come before the project can be realized. Among them is getting a green bill of health; the draft environmental impact report will be released for public review July 12. The signing of the legal papers could take a year, and Treasure Island Community Development hopes to finally break ground next summer. Even if all goes according to plan, a remade Treasure Island will need careful tending after Newsom leaves City Hall — as soon as early next year if he is elected lieutenant governor in November. The job, for the first time in a decade, might then go to a critic of Brown or Newsom. “I think he was hoping it would happen in his tenure,” Treasure Island Development Authority project manager Michael Tymoff said of Newsom’s vision of seeing a new Treasure Island take solid form. “But the process of getting entitlements takes longer than you would wish. But it’s such a regionally significant project that it doesn’t matter who is in office.” Opportunities for San Franciscans to shape Treasure Island as the development moves to the next stage have never been greater. As the project increased information on the messy development process has started to spark new conversation among San Franciscans on and off the island. The meetings of the Community Advisory Board and Treasure Island Development Authority are open to the public. The release of next month’s environmental impact report will open a window into a multibillion-dollar project that promises to permanently alter the face of San Francisco.

Alison Hawkes and Bernice Yeung are freelance writers for the Public Press. You can contact them at and Read this section online:

26 SF Public Press



"Jobs would be great here. I would love the opportunity to work here." — Carlos Lazartz, Treasure Island

"I'm a disabled person. I have to get on the bus and sometimes I can't get on the bus. And so I have to depend on other people to come pick me up and take me to the grocery store, things like that. It's very difficult. And with the redevelopment, with the stores, and the ferry, that's going to be beautiful, so beautiful." — Margaret Billsborough, Treasure Island

Keith Oriesk, director of design for Treasure Island Community Development, discusses transportation and wind issues at the Community Advisory Board meeting Thursday. MOVING ON

Treasure Island Residents Face Choices for Relocation


"So we get to the city and it's hard for us to come back. Then we get here, we got to come to the island. I want everything on Treasure Island." — Melanie Williams, Treasure Island

"We’ve really developed a sense of community and I find it a little sad that that community is going to be dispersed and we’re being forced to move without a lot of transparency and due process. ... We don’t know when we’re moving. We don’t know when the phases are actually going to be completed. And we don’t actually know that there’s going to be a phase two or phase three. They might make a couple billion dollars off phase one and just stop there with no real initiative to finish it.” — Nate Yeakel, Yerba Buena Island

from page 21

Ecotopian dream  Energy conservation and renewable energy  Land use policies that emphasize strong neighborhoods, walkability and a network of attractive public places  Sustainable design practices creating effective nodes for alternative transportation  Open space planning that minimizes energy and water consumption, encourages native plant usage and promotes biodiversity. Great. But will this vision become a reality? The funny, but predicable, thing is that Treasure Island’s Ecotopia has some big, big bucks behind it, an estimated $5 billion. A lot can happen over the course of the two decades it will take to build Treasure Island — and with that much money at stake, the Ecotopian vision might not survive the ground-breaking and ribbon-cutting. It’s this tension between big vision and big money that makes the project interesting — and reveals both sides of San Francisco’s split personality. On one side, stand the visionaries — people like Ernest Callenbach, who’d like to see urban life restructured along ecological lines. On the other side, we find the big money and hardball politics that make the Bay Area one of the wealthiest and most expensive regions in the world. Massive developments like Treasure Island don’t happen in velvet boxes. As this issue’s report by Victoria Schlesinger, Bernice Yeung, Alison Hawkes and Christo-

esidents of Yerba Buena and Treasure islands are divided on the relocation plan city officials have presented to the public. While many Yerba Buena residents expressed concern over maintaining their quality of life through more Story: Katy Gathright than a decade of // SF Public Press construction, TreaPhoto: Monica Jensen sure Island residents // SF Public Press tended to express more support. Joanna Luddington lives on Treasure Island. She endorsed the redevelopment and the relocation plan after a community meeting sponsored by the Treasure Island Development Authority Thursday. “I’m looking forward to it,” Luddington said. “I’m not too worried.” But Nate Yeakel, an eight-year resident of Yerba Buena Island, had questions about the phasing of the construction, and suspected that it might get bogged down, making the relocation of residents premature. “We’ve really developed a sense of community,” Yeakel said. “I find it a little sad that that community is going to be dispersed. We’re being forced to move without a lot of transparency and due process.” The process of relocating the residents has reached its early stages. The authority has begun to inform residents of about 1,000 households about their relocation options and transition benefits. Jack Sylvan, Treasure Island redevelopment director, said the city will not know who will have to relocate until spring 2011, when the board of the Treasure Island authority and the Board of Supervisors are to consider a

pher Cook reveals, it took a lot of backroom deals to make this Ecotopia possible — and the players wouldn’t have gotten in the game if they hadn’t smelled a profit. “Redevelopment in San Francisco has a bad reputation going to back to the ’60s,” says Chris Carlsson, director of the Shaping San Francisco oral history project, lead instigator of the Critical Mass bike ride and author of the 2008 book “Nowtopia.” “Without the strong public support, they don’t get permission to do it.” Indeed, the more one learns about the stake lobbyists and developers have in Treasure Island, the more one wonders if the Ecotopian vision isn’t just a way to sell development to a skeptical public. Treasure Island isn’t the only, or even the first, eco-city under the sun. Other grand Ecotopias have not gone as planned: Critics like Christina Larson, writing in Yale Environment 360, argue that master-planned ecocities like Huangbaiyu, Liuzhou and Dongtan in China, which were all greeted by waves of fawning press, have so far fallen far short of their goals: Dongtan and other highly touted eco-cities across China were meant to be models of sustainable design for the future. Instead they’ve become models of bold visions that mostly stayed on the drawing boards — or collapsed from shoddy implementation. More often than not, these vaunted eco-cities have been designed by big-name foreign architectural and engineering firms who plunged into the projects … with little feel for the needs of local residents whom the utopian communities were

Laura Shipman is a member of the Community Advisory Board for the Treasure Island project and an advocate for formerly homeless and low-income residents. “disposition and development agreement” for the redevelopment. Sylvan said the plan also requires the relocation of 250 Treasure Island Homeless Development Initiative households and about 800 households in the Villages at Treasure Island. Villages households face one of two possible types of relocation: interim moves from their current units to another existing unit, or long-term moves from their current unit to one of the new planned units. But residents who make interim moves will also have the chance eventually to make a long-term move into the new development. Interim moves will earn households 90 days of notice before mandatory relocation and long-term moves will earn 120 days of notice. Residents making both interim and longterm moves are eligible for moving assistance

designed to serve. But Treasure Island is in some ways quite different from those projects. Its commitments to stormwater wetlands and clean energy are legally binding, unlike in China. And unlike the Chinese projects, the Treasure Island redevelopment has been subjected to 15 years of intense expert scrutiny and public involvement. During a recent trip to Treasure Island, I saw signs everywhere advertising meetings for residents to give feedback on the project. When I asked one two-year resident if he’d had a chance to make his voice heard,

I can imagine in 25 years

people taking it back from the planners and turned it into a funky space where people live.

funds from the Treasure Island authority. Residents whom the redevelopment forces to make long-term moves can choose one of three housing benefits options. The rental housing option would allow residents to lease one of the new units in the Treasure Island redevelopment project at a subsidized rate, and rent-control protections. The unit purchase assistance option would give residents down-payment assistance for one of the redevelopment’s new units. Residents’ third option would entail an in-lieu payment, requiring them to move off the island. City officials estimated the in-lieu payment at $5,101 per adult tenant with an additional $3,401 payment for residents over the age of 60, with disabilities or with one or more minor children. The total cost for the relocation benefits

dedicated to “reintegrating the Bay as a food source and ecological resource for the community, not just something pretty to look at.” But Carlsson emphasizes that even the most flawed development can be transformed by the people who live there. “I can imagine in 25 years people taking it back from the planners and turned it into a funky space where people live,” he says. Ernest Callenbach, ever hopeful, made a similar point, choosing to see Treasure Island as a process and an opportunity. "It's rare for a city to get the chance at spinning off a better self,” he told me. “Mitosis happens in biology. Now let's see if San Francisco can do it in ordinary life!” In the end, the only thing we can do is watchdog the project as it unfolds over the course of the next 20 years, and try to hold developers and city officials to their promises — indeed, that’s why we launched our research into Treasure Island. From this perspective, Treasure Island stands to become a battleground, not utopia — and this shouldn’t surprise us. The word “utopia” is a Greek pun that simultaneously means “perfect place” and “no place,” suggesting that perfection is impossible. But the meaning of “ecotopia” is quite different: “eco” means home, and “ecotopia” is simply a human habitat. Treasure Island will never be utopia, but the plan does give us an ideal worth fighting for.

he just laughed. “I’ve had too much opportunity!” he said. “I’m sick of hearing about it!” Critics like Carlsson remain unconvinced, faulting the master-planned nature of the project. “The problem with master planning is that it’s a fantasy that you can engineer a good social life and sustainable living through architecture and design,” he said. And building a new city in the middle of the Bay is far from carbon neutral; two decades of construction will inevitably have a massive impact on the Bay’s ecology. It would be far better, Carlsson argues, for the island to become a laboratory and educational resource

Contact Jeremy Adam Smith at:

program depends entirely on how many tenants remain residents on the island over the next eight years, and which benefits options residents end up choosing, Sylvan said. He said he was unable to provide even a rough estimate for the comprehensive relocation budget. Sylvan noted that all of the Treasure and Yerba Buena Island households have been aware since the beginning of their residency that relocation for development projects was highly likely. “Everyone has known since the day they moved onto the island that a redevelopment project was happening,” Sylvan said. The Treasure Island Development Authority also held five community meetings in the last year to begin giving residents an idea of the relocation plans. It held follow-up community meetings Thursday and Friday, and plans another on Wednesday. Residents have until July 31 to provide the authority with their input on the relocation process. Some residents at the Thursday meeting expressed concern about what the new housing units and residential area would look like. Sylvan said the authority cannot provide more detailed descriptions of the new structures until the project is officially approved. “We can tell people what the overall look and feel of the buildings will be, but we don’t know,” Sylvan said. “The truth is, six years from now, we can’t project exactly what that building is going to look like. Folks are looking for information and they’re looking for certainty, and it’s hard to provide certainty right now.”

Contact Katy Gathright at:

ECOTOPIA BY THE BAY The Treasure Island redevelopment aims for high social and environmental goals:  Green building: The 8,000 new residences, marina and ferry, pedestrian — and bike-oriented shopping strip, urban farm and 300 acres of parks will employ the latest green building techniques — such as recycling the island’s current asphalt — and position the streets and buildings to take advantage of sun and wind energy. The planners promise that 60 percent to 70 percent of roofs will sport solar panels; the island’s two new residential towers will be covered with photovoltaic skin. Since big and tall wind turbines might chew up flying birds, the planners are considering installing short vertical-axis turbines throughout the island.  Hybridized land use: A 22-acre urban farm aims to produce enough food for 2,200 people, selling exclusively to residents, groceries and restaurants on the island, but will also serve as a park and pedagogical area. Same with an artificial wetlands, which will serve as a recreational area as well as a way of treating runoff. The goal is to create as little waste as possible while simultaneously generating all energy on the island itself, using wind, solar and a bio-gas plant. “The landscape is for cultivation, not consumption,” said Craig Hartman, the project’s lead architect at the firm Skidmore, Owings & Merrill, in a talk last year.  Shareable streets: Almost all residences will be within a 15-minute walk to a ferry going to San Francisco, with continuous Muni service from the city and around the island. “This will be a pedestrian-favored environment in which some cars happen to be there,” Hartman said. Streets are explicitly conceived as public spaces, with continuous curbs, many public gathering places, lots of access points from buildings to streets such as stoops and balconies, bike paths and so on. Each residential unit gets one parking space, and cars will be subject to congestion toll pricing. Thirty percent of housing is set aside for low-income residents; 435 units will be dedicated to housing formerly homeless people.


27 SF Public Press


Homebuilder Lennar Uses Federal Taxpayer Funds to Balance Its Books


n 2006, things were looking good for Lennar, America's second-biggest homebuilder. That year, before the U.S. housing market's epic collapse, the Miami-based giant pulled down $15.6 billion in revenues and closed sales on 29,568 homes. The ink was just drying on a massive and potentially lucrative deal to transform Treasure Island with new housing complexes, and the well-connected Lennar already had secured a deal to develop the HuntStory: ers Point Shipyard that Christopher D. Cook // SF Public Press the Navy was turning Photo: over to San Francisco. Monica Jensen // SF Public Press Business was booming and Lennar's books looked good — but the financial page was about to turn to a depressingly long chapter that Lennar and other homebuilding corporations helped write. Before the deluge, Lennar parlayed its profits — and considerable political capital — into securing the trust of San Francisco leaders, who have bestowed two major military base redevelopments on the corporation. But substantial evidence suggests that Lennar's finances, much like Treasure Island itself, are not exactly resting on bedrock. An examination of Lennar’s financial documents, and a raft of well-documented critical reports, suggests the company suffered especially deep wounds from a home-mortgage crisis that Lennar and other builders helped fuel through speculative over-building and their widespread issuing of subprime loans through subsidiary underwriting firms. Then, in a calculated bid to shore up its balance sheet, Lennar turned to Congress, the tax code, bank regulators and high-risk debt for financial salvation. Lennar's recovery strategy so far has included successfully lobbying Congress for nearly $1.5 billion in tax rebates, buying up distressed properties and partnering with the Federal Depository Insurance Corp. in high-risk investments in thousands of delinquent loans from failed banks. Rating Lennar's corporate bonds "junk," Morningstar, one of the nation's premier financial analysts, wrote in late May that the company "has been one of the more controversial homebuilders over the past few years because of its preponderance of offbalance-sheet joint ventures." While all perfectly legal, Lennar's subprime mortgage push, lobbying for tax relief and its high-risk/high-reward investment strategy raise caution flags as the company embarks on another multibillion-dollar redevelopment about which important financial, seismological and ecological questions remain unanswered. Despite repeated requests for comment, Lennar's sole spokesman, national Vice President Marshall Ames, chose not to speak for this story. In an e-mail response to questions about Lennar's financial health in the housing recession, Ames wrote, "Thank you for the invitation but we do not offer comments on the subjects which you request."


MONEY FOR NOTHING As the housing tsunami hit with full force from 2007 to 2008 and Lennar's finances evaporated, the company scrambled to shore up its books and beef up returns to shareholders. Beyond its flagging homebuilding endeavors, Lennar fixed its sights on two key sources of income: tax refunds courtesy of Uncle Sam, and potentially risky investments in distressed debt. Its first creative maneuver came in November 2007, two months after the company posted its largest quarterly loss in its 53-year history. Lennar secured a nifty last-minute land deal that netted massive tax relief. Just two hours before the end of its fiscal year, Lennar finalized the sale of 11,000 lots in seven states to Morgan Stanley at far-belowmarket rates, according to Builder magazine. "By selling land at about two-fifths of its estimated book value of $1.3 billion, Lennar can apply that loss to taxes paid two years back or 20 years forward," Builder wrote. "Its tax refund could be between $250 million and $300 million.” In fact, Lennar expected to gain as much as $800 million in tax-relief dollars from the deal, the Wall Street Journal reported. The Sunlight Foundation observed that the builders’ lobby was also "ramping up its sales pitch for a $250 billion stimulus package called ‘Fix Housing First,’ arguing that financial markets won’t recover until home prices stop falling. They are calling for a generous tax credit for home purchases and a federal subsidy that would lower a homeowner’s mortgage rate.” Lennar and the building industry landed a host of subsidies, not unlike the auto industry and bank bailouts. With tax-refund dollars in its sights, Lennar pumped up its lobbying operation and its top executives plowed big dollars into congressional coffers. After registering merely a blip on the federal-lobbying radar in previous years, Lennar nearly quintupled its political spending to $1.1 million in 2009. It also tapped Washington’s


As the U.S. housing market crumbled throughout 2008 and 2009, Lennar found itself in perilous financial straits and sinking deeper into the quicksand of the Great Recession. More than other major homebuilders,Lennar was slipping fast: it laid off 44 percent of its workforce, lost $3.4 billion over three years, and its stock posted anemic returns far below industry averages. In just three years, Lennar's homebuilding revenues plummeted to $2.8 billion in 2009, more than 500 percent below 2006. Though revenues shrunk throughout the industry, Lennar's decline outpaced that of top competitors such as Pulte Homes and DR Horton. Research of government home loan data by

one of Lennar’s chief labor union adversaries, the Laborers International Union of North America, shows the company aggressively promoted precarious home mortgages that stoked the growing housing market inferno. Citing data obtained under the Home Mortgage Disclosure Act, the union’s 2008 report shows that Lennar, through its home-lending subsidiary, Universal American, increased its use of subprime mortgage loans by 157 percent from 2005 to 2006 while reducing prime loans. As a result, the percentage of riskier, high-cost mortgages the company was carrying more than doubled, from 9.6 to 22.6 percent, the second highest in the industry. “The homebuilders’ mortgage lending was a key factor in how the builders contributed to the current housing and foreclosure crisis,” Laborers International said in an April 2009 report on foreclosures at Lennar. “The exponential increase in homebuilders’ origination of subprime and exotic loans enabled builders to continue to sell homes even after markets were overbuilt.” While Lennar and others expanded high-cost loans and subprime mortgages, they also overbuilt and, as the union put it, “ignored real market conditions in order to maximize profits.” The union wasn’t the only critic of the speculative building push. The National Association of Home Builders, the industry's main trade group, acknowledged in December 2007 that some builders “were chasing the gold and pursuing the brass ring, and they didn’t heed the market warnings as quickly as they should have." Without mentioning names, the NAHB stated, "some builders were probably overly aggressive. There’s no question about that.” During this period, Lennar ranked second among U.S. homebuilders with 29,568 home sales in 2006.


Lennar's Hunters Point Shipyard Development Project — one of many it has secured amid concerns about the company's financial stability. revolving door, hiring a former assistant secretary of the Department of the Interior to help lobby his former agency and Congress on land and water issues. During key months of 2009, Lennar CEO Stuart Miller flooded Congress with generous campaign contributions and "single-handedly gave more than $96,000 to Democrats in 2009, including $3,500 to Sen. Patty Murray of Washington, who chairs the Senate’s powerful appropriations subcommittee on transportation," according to the Center for Public Integrity. Both Lennar and the homebuilding industry are a potent presence on Capitol Hill. Citing federal campaign contribution data, non-partisan noted that homebuilders "should be relatively welcome on Capitol Hill" and that the NAHB "has spread around $1.7 million in contributions over the past two years … a vital tool in obtaining bailout bucks." In 2008, homebuilders doled out $9.15 million to federal officeholders and candidates. Lennar was the industry’s largest single-firm political contributor that year: its spending spree far outflanked that of other big homebuilders. And it paid off, big time. In November 2009, Congress passed, and President Obama signed legislation delivering some $352 million in tax relief to Lennar for that year alone, with similar fiscal beneficence flowing to other major corporations (Pulte Homes netted some $800 million in tax refunds, while DR Horton tapped the IRS for $352 million, according to Builder magazine). Over three years, from 2007 to 2009, Lennar grabbed up nearly $1.5 billion in tax-refund money, straight from public coffers. Lennar’s lobbying-to-tax-windfall ratio ($1.1 million spent, for a $352 million return) didn’t surprise veteran lobby monitors in Washington. “This is really what lobbying is all about, this is why every corporation in this country is represented by a lobbyist,” said Craig Holman, government affairs lobbyist for Public Citizen. In its 2009 annual report to shareholders and the Securities Exchange Commission, Lennar acknowledged the importance of winning these federal dollars as it promotes itself as a leading homebuilder with the financial solidity to take on big new projects in San Francisco and across the nation. The tax relief enabled Lennar to dramatically reduce its 2009 losses, from $731.4 million down to $417 million — “primarily due to a change in tax legislation,” which allowed Lennar to “recover previously paid income taxes.” The tax-relief boon, “net operating loss carryback” in fiscal parlance, came attached to unemployment extension legislation. That prompted Rep. Lloyd Doggett, D-Texas, to call it a “corporate

Across 1 Like Mark Twain’s July in SF 5 What “Tiburon” means in ingles 10 Scamps 14 “La Boheme” solo, e.g. 15 ___ the run (munch while in motion) 16 Actor-composer Coward 17 Bee Gees #1 “How Can You ___ a Broken Heart” 18 Garbo who wanted to be alone 19 Tax you may pay at SFO 20 Blue and Gold or Red and White tour on the Bay 23 “Surfin’___” (1963 hit) 24 “Yo!” 25 Iraqi city near the Persian Gulf 27 ___ -Croatian 29 Blowfish special? 33 “Killer” computer program 34 33, 45, or 78, briefly 36 “Steady as ___ goes” 37 Game with a 32-card deck 38 Clay Aiken album title taken from an MLK speech 42 SF ___ Troupe: a 50-year tradition 43 Egypt neighbor: Abbr. 44 2002 All-Star Game result 45 European peak 46 Bohemian 48 Martha & Bros. purchase 52 Mountain pass east of Yosemite 54 Tosca bartender’s “rocks”

giveaway,” according to Even as Congress extended unemployment benefits, its gift to the homebuilding industry and other sectors would cost taxpayers dearly. A July 2009 report by the National Bureau of Economic Research estimated that the tax give-back would cost the U.S. government up to $53 billion, with the major winners “concentrated in the homebuilding, automobile, and financial industries.” The measure enabled Lennar and other corporations in these key sectors to essentially write off current losses due to the recession and recoup taxes paid in the previous five years — directly at taxpayer expense. In a March 24 conference call on quarterly earnings, six weeks after investing with the FDIC in a $3 billion portfolio of high-risk bad debt, Miller insisted that Lennar and other homebuilders were not using the funds to build yet more speculative housing. “These government programs work very well as a kick-start to a free-falling housing market, but it now seems that the free market is positioned to take over in orderly fashion,” he said. “While there has been a great deal of talk about potential spec building of new homes to beat the end of the tax credit," most new homes “are still being built to order.” Like other corporate homebuilders, Lennar was poised to plow many of those tax dollars into new investments. As Miller put it, “Our improved balance sheet enables us to continue to capitalize on distressed land-buying opportunities, which will improve our operating results in 2010 and beyond." According to, a key industry information source, the National Association of Home Builders, the industry's lobbying arm, "estimates that the carryback provision, which will cost the federal government $63 billion over the next two years by Treasury calculations, will be enough to keep thousands of homebuilding and related companies in business. The NAHB estimates that the provision will prevent the loss of at least 30,000 industry jobs."

RISKY BUSINESS Of all the homebuilders, none has been as aggressive as Lennar in trying to profit from the real estate crash by increasing and leveraging its debt load — buying up distressed land, properties and unpaid loans. (Management foresees its debt reaching 35 percent to 40 percent versus equity.) "Nobody else is doing what Lennar is doing. Nobody,” the chairman of John Burns Real Estate Consulting told Bloomberg News in March. In January 2009, the Wall Street Journal report-

56 Shade or tint 57 Tale of Jim Hawkins, or subject of a section in this paper 62 High seas 63 Foreign-made General Motors cars 64 Prefix for a prolific mom 65 “___ Blood”, vampire fare 66 Barry or Bobby of the Giants 67 “Gypsies, Tramps & Thieves” singer 68 Crunch and 24Hour Fitness, e.g. 69 All atwitter 70 The Lovin’ Spoonful’s record label: ___ Sutra Down 1 SF State or UCSF surroundings 2 End of a bully’s threat 3 One-dimensional 4 Arp’s art movement 5 Smooth transition 6 Fillmore bar with a branch in Venice 7 “Suits you to ___” 8 Campus mil. group banned at Cal 9 Tree knot 10 SF Restaurant word after Gaylord or Amber 11 Greek eggplant dish you can find at La Mediteranee 12 It’s showing in a tent at Justin Herman Plaza Ferry Park 13 Family Stone lead singer 21 Boutiques at Laurel Village, e.g.

ed that Lennar "has about $4 billion in off-balance-sheet debt through 116 joint-ventures, and has typically given very few details about these arrangements." One notable example is Lennar's venture with the FDIC, announced in February. Together they took over $3 billion in so-called troubled assets from failed banks for $1.2 billion. Lennar kicked in $243 million, a 40 percent stake. The FDIC put up $365 million, and also extended a $627 million, taxpayer-backed loan to the partnership. Lennar management "has indicated that it will continue to opportunistically invest in these ventures, as this represents a higher-growth/higherreturn business than the core homebuilding business," Morningstar wrote last month. In the context of a stagnant building market, this strategy “represents a risk,” but the financial analyst remained upbeat on "the potential returns" of some ventures. But as the distressed-debt market balloons — echoing some of the speculative investment approaches that helped fuel the housing crash and financial crisis — there's plenty of concern among mainstream financial analysts. "Sometimes loans can't be salvaged," wrote Bloomberg News in 2007, citing big losses by one New York firm that was caught off guard by "higher-than-expected default rates on loans bought in 2004 and lower-than-anticipated values on foreclosed properties." In addition to concerns about Lennar's investment approach, two big bankruptcies might give San Franciscans pause about Lennar's track record of bailing out of projects and leaving investors and communities in a hole. Witness CalPERS, the giant state pension fund, which lost nearly $1 billion in a land deal with Lennar. LandSource Communities Development, a Lennar-led, 15,000-acre project in Southern California, went bust in 2007 amid the credit crunch — after Lennar sold most of its stake to CalPERS. Two years later, LandSource — itself a Lennar creation — filed for bankruptcy. Lennar then returned “to buy back, at a substantial discount, a chunk of the Newhall Ranch development north of Los Angeles that it sold for nearly $1 billion to the California state retirement system in 2007,” the Los Angeles Times reported in July 2009. After leaving CalPERS and its partners with huge losses, Lennar reported to its shareholders that "we recognized a deferred profit of $101.3 million" on the deal, according to its 2008 annual report to shareholders. Lennar secured an additional boon from the LandSource bankruptcy in July 2009: title to 650 acres of the former Mare Island Naval Shipyard, site of another troubled Lennar redevelopment. The Mare Island multi-use project, which Lennar took on jointly with LNR Property, itself a Lennar spin-off, went south with the housing economy. After building and selling 500 homes between 2004 and 2006 — far short of original plans for 1,400 homes — the firms filed for bankruptcy in 2008. Having reorganized and shed debt, Lennar now controls the lucrative waterfront land. The LandSource debacle could symbolize more than just poor investing by CalPers and smart dealing by Lennar. According to Builder magazine, Pali Capital analyst Stephen East “suggested in a research note there is a possibility that the LandSource partners could be sued under 'Bad Boy' clauses, claiming misrepresentations were made, since the deal deteriorated so rapidly.” "The bigger question for LEN [Lennar] is what remains for all the other JV's [joint ventures] sitting out there," East added. "LandSource is one of the largest and most visible, but it could well be a harbinger of things to come.”

Contact Christopher D. Cook at Conor Gallagher contributed research to this article.

22 26 28 30 31 32 35 37 38 39 40 41 42 46 47 49 50 51 53 55 58 59 60 61 62

Caesar’s ‘where’ It may have rent-control: Abbr. Green- or Mill- suffix meaning hillside Oracle computer operators, e.g. “Weeds” channel: Abbr. Bulk Sierra Club founder Pirate character in 12-Down Former owners of the Presidio and 57-Across Westfield SF Centre store that operated for 99 years Queue after Q Kaiser or St. Mary’s helpers On the ___ Fight Shop: Fishermen’s Wharf store Motorist org. Gives in Dance at Cesar’s Latin Palace Relative of Dorothy Indiana Jones trademark Raw materials for many Mission Bay biotech firms Nickname of philanthropist/socialite Roselyne Swig: var. Japantown noodles “When You Wish ___ a Star” “Seasons of Love” musical Canal feature Bus. tête-à-tête

28 SF Public Press

June 22, 2010 //


Welcome to the San Francisco Public Press, Beta Version


hat you hold in your hands is an experiment. Just as public radio and television arose generations ago to take news in a more substantive direction, so the San Francisco Public Press aims to conjure a new class of news organizations — local, accountable, noncommercial and innovative — that deliver news effectively across print and digital platforms. Our long-term goal is to publish a nonprofit, ad-free daily newspaper — online and in print — that contributes to a competitive news environment for intelligent and in-depth journalism. It will combine timely, nonpartisan original reporting with other quality writing and visuals from existing media partners that already produce public-interest news. The idea here is to cross media boundaries to expose this work to new local audiences. This pilot newspaper is our foray into print. The Public Press has been publishing news online since March 2009 after receiving a startup grant from the San Francisco Foundation. Since then, more than 100 writers, photographers, videographers, multimedia specialists, nonprofit workers and concerned citizens have collaborated to produce professional-quality, in-depth reporting on public policy and social trends in and around San Francisco. Why no ads? As the newspaper advertising market has drained to Internet competitors, we need to search for other sources of income to support quality journalism. Advertising has also warped the content of the newsroom, both ex-

DONATE Become a member of the SF Public Press Join us online: You can also send a check payable to: San Francisco Public Press 965 Mission St., Suite 220 San Francisco, CA 94103 Or scan this image with your smartphone to go to the donations page. Membership levels: "Media Reformer" — $5,000 "Publisher" — $1,000 "Editor" — $500 "Columnist" — $250 "Beat Reporter" — $100 "Cub Reporter" — $50 "Basic Member" — $35

The Public Press staff at work. Photo taken by Monica Jensen. plicitly and subtly, encouraging newspapers to shift their coverage to topics of interest to businesses and wealthy readers — the targets of ads. Noncommercial news, while often less lucrative, has the luxury of independence. Why print? In an era when most journalism innovation is taking place online, we see untapped opportunities in print, too. Here’s why: • Newspapers help bridge the digital divide. Not everyone is wired 24/7, even in the Bay

Area. According to San Francisco’s 2009 City Survey, more than 34 percent of households with income under $50,000 cannot access the Internet at home via personal computers. Newspapers serve as communal touchstones. You can never tell what people are reading by looking at the backs of their laptops. Instead, consider the experience of glancing at a headline over the shoulder of a fellow Muni passenger or picking up a copy of a paper someone left at a coffee shop. These

moments spark real conversations with neighbors. • We want to pay our hard-working staff for the work they do. Readers might not pay for news online, but they still buy newspapers: 50 million are sold every day in the U.S. • People use paper and electronic devices differently. There are times and places when even the most tech-savvy Bay Area digerati enjoy some screen relief. But the Public Press’ mission and purpose

extend far beyond our case for print. If independent news organizations are going to survive into the digital era, what will they look like? Who will control them? Whose interests will they serve? We envision a cadre of newsrooms operating as accountable, locally based publicinterest organizations with high professional standards. We do not stand alone in our aspirations. The Public Press would not exist as it does today if not for an outpouring of volunteer help from scores of people who believe in this vision. And yet, the organization must evolve if it is to thrive beyond this pilot venture. We intend to grow into an independent newsroom that can afford to pay journalists for the work they produce. To do this, we need your help. If this newspaper in your hands represents to you a worthy experiment, one worth refining and repeating, again and again, support our efforts by becoming a member of the San Francisco Public Press today. With your pledge you will get home delivery of future editions of the newspaper, free admission to our public events and the knowledge that you are helping redefine journalism for San Francisco.

Contact the Public Press newsroom at or (415) 495-7377


Why the Bay? Because It's Nuts


s the BART train exited the east side of the Transbay Tube, I looked back at the skyline of San Francisco. I couldn’t help but smile. Although it’s been almost five years since I moved to the Bay — after living 40 years in Arizona — there’s not a time that I don’t feel at one with it. But not everyone underColumn: stands my affinMichelle ity for the “City Fitzhugh-Craig by the Bay” and // SF Public Press all that surrounds it. People who’ve never lived here often ask the same question — “What’s so great about the San Francisco Bay Area?” It’s true, there are lots of things that would make some people shy away. And at times, I even ask myself, Why the hell am I still here? In San Francisco, you have a mayor who seems to enjoy ruffling feathers, vacationing and breaking the Tenth Commandment more than he does running a city. And his 11 rebellious disciples aren’t much better — consistently slashing funding from vital resources in their attempt to balance an out-of-control budget. Walk anywhere downtown and you’re sure to be stopped, assaulted and/or entertained by some homeless and/or mentally unstable individual wanting your change and/or, God forbid, your time. And don’t get me started with Oakland. Its mayor is a should-be-retired politician who has done little for the

city the last four years, but wants to — we think — hold on to his title for four more years. City officials aren’t much better with a track record of amateurish decision making and hiring practices and its police department will soon look like a Keystone Kops film with the planned slashing of its workforce. On both sides of the Bay you have transit systems that try to lure you into using them to save our planet, while at the same time making it less and less affordable to get where you want, much less need, to go. The cost of living here is too high, uncontrolled violence plagues many communities and everyone who lives here feels she has the right to say, feel and do what she wants. That’s right, people living in the Bay do have the right and the freedom to be whoever, do whatever, believe in anything and everything that makes them feel like a whole person. And although there is the minority who disagree, and the occasional latter-day saint to put roadblocks in some people’s way, for the most part you are left to be who you want to be, to do what you want to do, to believe in what you want to believe. San Francisco and Bay Area residents not only fight for what they want, but fight for what is right. And although I live in Oakland and enjoy experiencing all parts of the Bay, I found my heart in San Francisco.

EDITORS: Elise Banducci • Alice Chen • Lisa Chung • Liz Enochs • Bonnie Eslinger • Tom Honig • Jon Kawamoto • Mack Lundstrom • Richard Pestorich • Jeremy Adam Smith ( • Taylor Wiles • Josh Wilson ( • Michael Winter

Mcdonald (Potrero View) • Kate McLean (The Bay Citizen) • Jon Mooallem • Christi Morales • Stephen Robert Morse ( • Anthony Myers (Ingleside Light) • Jesse Nathan • Rosa Ramirez (KALW/UC Berkeley Graduate School of Journalism) • Anna Rendall • Tehea Robie (Oakland Local) • Anthony Roy (Westside Observer) • Timothy Sandoval (California Watch) • Victoria Schlesinger • Dana Sherne • George Shirk ( • Heather Smith (Mission Local) • Saul Sugarman • Rachel Swan • Bernice Yeung • Michael Zelenko

DESIGN & GRAPHICS: Justin Allen • Shawn Allen (Stamen Design) • Susannah Luthi • Mary Catherine Plunkett • Cody Rishell • Suzanne Yada

PHOTOGRAPHERS: Peter Borg (KQED) • Michael LaHood • John C. Liau • Sarah Macdonald • Ed Ritger • Max Rosenblum

WRITERS: Ted Andersen (Castro Courier) • Cindy Beckman (Marina Times) • Danielle Brown • Peter Byrne • Ezra Carlsen • Tom Carter (Central City Extra) • Christopher D. Cook • Jonathan Farrell (Richmond Review) • Bethany Fleishman • Gianmaria Franchini• Annette Fuentes (New America Media/The Bay Citizen) • Conor Gallagher • J. Malcolm Garcia • Shawn Gaynor • Aaron Glantz (New America Media) • Leslie Guevarra • Angela Hart • Alison Hawkes • Alisa Heinzman • Daniel Hirsch • Dave Iverson (KQED) • David V. Johnson • T.J. Johnston • Ambika Kandasamy • Natasha Lee (Sunset Beacon) • Karen Macklin • Kristine Magnuson • Mayra Martinez ( • Sarah

ARTIST: Andrew Goldfarb

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RESEARCHERS/COPY EDITORS: Mineko Brand • Jerold Chinn • Erin Dage • Conor Gallagher • Katy Gathright • Burt Herman • Theresa Seiger • Sandra Silvoy


BUSINESS & OPERATIONS: David Cohn (Spot. Us) • Amanda Fisher • Deepti Gottipati • Maryann Hrichak • Jennifer Luks • Anne-Marie McReynolds • Andrew Page • Mark Posth • Marc Smolowitz • Valentinos Themistocleous • Louise Yarnall • Tom Yates

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Contact Michelle Fitzhugh-Craig at: Read this story online:

CONTRIBUTORS Executive Director: Michael Stoll Director of Operations: Lila LaHood Multimedia Editor: Monica Jensen News Editor: Michelle Fitzhugh-Craig DIRECTOR of design: Jackson Solway


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We would like to thank all of our current and past volunteers, steering committee, members and everyone who has supported us morally, financially and journalistically since November 2007. We owe special thanks to The San Francisco Foundation for two years of grant funding; Clarisa Morales Roberts and Josh Wilson of Independent Arts & Media, our fiscal sponsor and wellspring of cheerleaders; David Cohn and Spot.Us for helping us find creative ways to pay some of our reporters; Jeremy Adam Smith and for coming up with the idea for the Treasure Island section; and Dave Eggers and McSweeney's, for inviting us to participate in the San Francisco Panorama, which inspired our work here, and for loaning us the large format printer, without which we could have not have published this newspaper.

Issue 1  

Volume 1, Issue 1 of the San Francisco Public Press

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