(Last Updated On: March 6, 2019)

San Francisco Supervisor Matt Haney has been a friend of mine for some time, so this isn’t personal. Ok Matt? But I am concerned that Supervisor Haney’s call for a hearing on the Twitter Tax Break Deal may degenerate into a name-calling fest with no real professional assessment of the costs and benefits of what was done.

In fact, part of me is hopeful that’s the case, just to pave the way for twitter’s move to Oakland. If that happens it will be because a number of people have no memory of the circumstances around which the twitter deal was crafted in the first place.

California Redevelopment Law Was Taken Away

For years, that part of Market Street was blighted and dilapidated. It should have been the focus of its own redevelopment project area, and merge the Federal Office Building and the Yerba Buena Center Redevelopment Plan, but the unhappy accident of timing got in the way. California Governor Jerry Brown was well on his way toward terminating California Redevelopment Law starting in 2011, and much of the state’s political establishment let the legendary politician do it.

Out with California Redevelopment Law went many of the policy tools that would have assured the development of affordable housing and funding for street and sidewalk cleaning and code-enforcement assistance: the kind of costs that plague many Financial District businesses. In, came twitter, and with the tax breaks – as well as the assumption that the firm was able to pay for community improvements without any spreadsheet analysis of how such expenditures would impact its ability to afford to be at that location.

In other words, what’s come into play is a lot of emotion and very little empirical thinking in policy formation or policy analysis. As tech companies have multiplied both in number and in wealth, this problem has only intensified. California Redevelopment Law was taken out, even though the California Finance Association said it was a mistake for Governor Brown to do so, and its replacement, SB 628 by Jim Belle, has not been widely used – to say the least.

SB 628, or “Enhanced infrastructure financing districts” reads as having nothing to do with downtown development issues, but that’s the reading of a novice economic development policy planner. Read carefully: “Existing law authorizes an infrastructure financing district to fund infrastructure projects through tax increment financing, pursuant to the infrastructure financing plan and the agreement of affected taxing entities, as defined. Existing law requires an infrastructure financing plan to include the date on which an infrastructure financing district will cease to exist, that may not be more than 30 years from the date on which the ordinance forming the district is adopted….This bill would additionally authorize the legislative body of a city or a county, defined to include a city and county, to establish an enhanced infrastructure financing district, adopt an infrastructure financing plan, and issue bonds, for which only the district is liable, upon approval by 55% of the voters; to finance public capital facilities or other specified projects of communitywide significance, including, but not limited to, brownfield restoration and other environmental mitigation; the development of projects on a former military base; the repayment of the transfer of funds to a military base reuse authority; the acquisition, construction, or rehabilitation of housing for persons of low and moderate income for rent or purchase; the acquisition, construction, or repair of industrial structures for private use; transit priority projects; and projects to implement a sustainable communities strategy.”

Use SB 628 To Form A New Plan For The Area Around twitter HQ SF

Now, if you just use your imagination, you can structure a program that uses tax increment financing to cause the acquisition, construction, or rehabilitation of housing for persons of low and moderate income for rent or purchase, and implement a sustainable communities strategy – all in an area around twitter Headquarters.

I have known the late Ed Lee since 1992, when I was co-author of a study called “African Americans In San Francisco: 1960 to 1990,” so I am certain he would agree with me when I say this: the main problem with the twitter plan was that it lacked a true redevelopment plan to go with it. In other words, it placed all of the weight of area revitalization on twitter, which has no real experience in that, and left San Francisco without any real oversight of what was going on.

The 2015-2018 Community Benefits Agreement is not an economic redevelopment program but a social development program. It can’t work without affordable housing or business assistance loans. A true redevelopment plan has all of that.

In closing Supervisor Haney, my fear is you will look only at what was done, but in reality you have to look at the twitter Tax Program from four perspectives: what was done, what happpened, what should have been done, and what can be done.

Out of that, please bring back redevelopment. The problem today, and particularly with progressive politics, is that economic development can be summed up in three words: tax, regulate, and sue.

When progressives were called “liberals”, economic development was summed up like this: stimulate and redirect tax revenue to generate jobs, cause affordable housing construction, and vibrant urban development.

It’s time for a return to basic, good old, smart, liberal economic development.

Otherwise, send twitter to Oakland.

Thanks.