A Developer's Paradise

Amid power shift at City Hall, a controversial bayside condo moves forward
By: Zusha Elinson and Gerry Shih

Last year, the San Francisco Board of Supervisors voted, 10 to 1, to quash a condominium project planned for 555 Washington Street, in the shadow of the Transamerica Pyramid. The vote stunned the developers, who were backed by former Mayor Willie L. Brown Jr. and Rose Pak, the Chinatown power broker.

Now, eight months after Brown and Pak engineered the appointment of Edwin M. Lee as interim mayor, another controversial condo project — 8 Washington Street — is moving quickly through the planning department, according to city officials.

The contrasting fortunes of the two developments — just 16 months and five blocks apart — show how a dramatic shift in political power is playing out on the streets of San Francisco, at a time when Lee is favored to win election to a four-year term this fall.

“I think we’ve got a political order in the city that’s more receptive to projects like this one,” Dean Macris, a former director of the San Francisco Planning Department, said of the 8 Washington project.

The 3.2-acre triangle where the developer Simon Snellgrove is proposing to build is one of the most desirable slivers of real estate in San Francisco, with unparalleled views of the bay. The land is directly across the street from the Ferry Building, and is occupied by the Golden Gateway Tennis & Swim Club, a private sports club.

Snellgrove is proposing to scale back the tennis club and build a glass and limestone condo complex that would step up from 4 to 12 stories and hold 165 residential units that are expected to be among the priciest in the city.

A coalition of neighborhood groups opposes the project, saying it would destroy the decades-old club and alter the San Francisco skyline. Many of them also fought 555 Washington.

“To give this up for a huge condo project built for the rich hedge-fund executives and an underground parking garage — you’ve got to be kidding me,” said Lee Radner, president of the Friends of the Golden Gateway.

But Snellgrove’s team is confident that 8 Washington will be approved under the new regime at City Hall, and big money is already lining up behind it. The project’s financer, CalSTRS, the state teachers’ retirement fund, has committed $26.7 million to pre-construction costs, and had spent $23 million as of March 31.

“I would like to think there is a more rational and productive debate in City Hall now,” said P..J. Johnston, a spokesman for the developer, attributing the change to “the supervisors as well as the mayor.”

The ill-fated development at 555 Washington, a planned 38-story corkscrew-shaped tower near the Financial District and North Beach, drew the same battle lines between developers and neighborhood activists.

Brown, who oversaw a construction boom during his eight years as mayor, starting in 1996, was a consultant on the project. The developer, Lowe Enterprises, made a donation to the Chinese Chamber of Commerce and secured the support of  Pak, the group’s influential consultant, according to people involved with the project.

“Rose was definitely a supporter,” said Andy Segal, senior vice president of Lowe Enterprises. “We had a lot of support lined up, but just not enough in the end.”

Pak did not return calls seeking comment. Brown declined to comment.

The developers attributed their defeat to former Supervisor Aaron Peskin, who was elected in 2000 as a liberal firebrand who vowed to slow the proliferation of big-money development projects backed by Brown.

 

 

Even after Peskin was termed out of office in 2009, he and the Telegraph Hill Dwellers, a group of outspoken North Beach residents, vigorously fought 555 Washington. On the day of the vote in May 2010, Peskin lobbied out of the offices of his former colleagues.

Today, Peskin, who is chairman of the city’s Democratic Party, has seen his influence wane while Brown and Pak enjoy a renaissance.

Brown and Pak — close friends and political allies — helped install Lee as interim mayor in January, outmaneuvering progressives allied with Peskin. That shift at City Hall is translating into an increased pace for development.

Snellgrove, the developer of the 8 Washington project, has assembled a lobbying team that includes several people with close ties to Brown: H. Marcia Smolens, one of the city’s highest-paid lobbyists and a longtime Brown fund-raiser; Karin Carlson Johnston, a lobbyist at  Smolens’s firm, HMS Associates; and her husband, Johnston, who served as Brown’s spokesman.

While the developers deny that Pak is working on the project, she has tried to help indirectly. In 2007, she organized a trip to China for friends and city officials that included Peskin, who was then president of the Board of Supervisors, and Snellgrove, a longtime friend of Brown and Pak.

“He was on the trip she organized and used it as a nonstop 10-day lobbying opportunity,” Peskin said of Snellgrove in an interview. “For 10 days we saw him for breakfast, lunch and dinner. We were taking this whole tour of Macau, and he was tagging along whining about his project for three hours. And we just wanted to see Portuguese architecture.”

Snellgrove declined to comment.

Snellgrove’s representatives told planning department officials several months ago that they had lined up the necessary six votes on the Board of Supervisors to win approval, according to a city official with knowledge of the project. But they suggested that the window might close after the November election because three supervisors were running for other offices and might have to be replaced.

“The message was, ‘We have to get this done with the current board,’ ” the official said.

The project’s progress has presented a political headache for David Chiu, the board president whose district includes 8 Washington Street. “I have heard there are attempts to move this faster through the process and have been surprised because I don’t think we have community support that we need,” Chiu said.

Chiu, who is also running for mayor, said he did not support the project in its current form.

But people familiar with the project said Mr. Chiu is concerned that Mr. Snellgrove’s team has already persuaded another supervisor, Ross Mirkarimi, to provide the crucial sixth vote. Mr. Mirkarimi is running for sheriff. Mr. Snellgrove and others involved in the project collectively contributed more than $2,500 to Mr. Mirkarimi’s campaign.

Mirkarimi said he had not examined the project in depth but would most likely respect Mr. Chiu’s opposition to it.

Johnston denied that the 8 Washington project was speeding through the approvals process, noting that it originated four years ago. In addition, neighborhood groups have filed a lawsuit against the city, arguing that the planning department is illegally raising height limits to accommodate the project, a claim the department denies.

Whatever the fate of 8 Washington, developers like Segal, the investor in the 555 Washington project last year, see greater opportunities for development under a Lee administration.

“The executive branch is more animated on this project than it may have appeared on our project,” Segal said. “It’s a different style.”

This article also appears in the Bay Area edition of The New York Times.