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“Open Your Golden Gates” was the song that Jeanette McDonald made popular in the 1936 movie “San Francisco,” which she starred in with Clark Gable. But San Francisco’s otherwise welcoming Golden Gates were slammed shut two weeks ago on Star Wars movie creator and San Francisco-area native George Lucas, who chose Chicago instead as the home for his planned Museum of Narrative Art. Sadly, but predictably, Lucas’ shunning by San Francisco had everything to do with the city’s unwelcoming liberal politics, which are also working to spurn other new investments in the City, including desp erately needed new housing.

One would think that as dependent on tourism as San Francisco is, that the idea of serving as home to Lucas’ big museum, to include important vintage art, digital information, and unique Star Wars production items would be a no-brainer. Even both California’s liberal Democratic Senators Diane Feinstein, (a former Mayor of the City) and Barbara Boxer were lobbying in favor of Lucas.

Yet San Francisco’s liberal, wacky, over-regulatory political climate had everything to do with killing the Lucas Museum. Lucas understandably wanted his Museum to have an important location. But in San Francisco that meant on most of the public land under consideration, he would need approval of the voters in the city to raise height limits to accommodate a Museum. As much as San Franciscan’s love their Giants they rejected, twice in the past, voter approval of a new stadium to replace windy Candlestick Park. Why would they give Lucas his approvals now? The notion of an expensive and probably polarizing political campaign, with an uncertain outcome, to gain necessary development approvals for Lucas was just too much to take. Lucas’ other option at the “Presidio,” a part of the National Park Service, also floundered over similar bureaucratic concerns on “height” and “footprint” of the Museum building. San Francisco and its bureaucrats showed they were not interested in opening their gates to Lucas, rather, they slammed them shut.

Lucas’ Museum, which is bound to be a big tourist draw and job creator, is just the most recent victim of San Francisco’s extreme no-development policies. There is an employment boom going on in San Francisco and the Silicon Valley as many technology firms are rebounding from the recession, and many young entrepreneurs and larger firms are actually moving their headquarters from the suburbs into the city, including companies like Twitter and Google. As a result, housing costs have gone up, and the median price for a home is upward of $900,000.

But the local policymakers response has not been to praise all the new jobs and capital coming into San Francisco. Rather, it has been all about their perception not of success, but of the “inequity” that is being caused as a result of all the new high-paid jobs and the housing boom. These policymakers, stunningly, just cannot see a link between investment and job growth as a benefit to everyone in the city. For example, one current proposal to address “housing inequity” as a result of the current good fortune, and need for new housing, would require all new housing developments in the City to have to pay for and set aside a whopping 30% of developed units for low-income housing, an increase of about 100% from current regulations. Of course, such a “remedy” will only discourage new buildings, and it will drive up the cost of the other 70% of the development, making housing actually more expensive in the City, and whoever gets on the government’s list to receive the set-aside low-income housing will themselves have an inequitable financial windfall when the time comes for re-sale, thanks to the government interference.

Chicago’s leaders are not exactly conservative Republicans, but they understand that a no-development policy can cripple a city’s future. And vision helps get results. Chicago’s Mayor, Rahm Emanuel, Obama’s former Chief of Staff, “methodically assembled a well-connected task force to explore sites within the city” for the Lucas Museum, according to the San Francisco Chronicle, which included a report and recommendation for use of 17 acres overlooking Lake Michigan. No wonder Chicago captured Lucas’ attention, and no wonder, with San Francisco being its fourth largest city, that California remains the most unfriendly state for doing business nine years in a row, according to CEO magazine.

James V. Lacy’s first book, Taxifornia, is available at Amazon.com.