The back and forth with respect to Michael Kriozere’s intentions to pay the final five million dollars in development fees for One Rincon Hill prompted Supervisor Chris Daly to introduce legislation on Tuesday that would require future Rincon Hill developers to pay their fees in full before a Temporary Certificate of Occupancy (TCO) is granted rather than upon request of a final Certificate of Occupancy as is currently written.
And while tightening up the language in Rincon Hill development agreement doesn’t strike us as such a bad idea, punishing One Rincon Hill when they haven’t yet violated any terms of the agreement that’s curently in place does. From the Chronicle:
Also, on Thursday the Planning Commission will decide whether to withhold $1.6 million that the city owes Kriozere for some street improvements related to the development.
“We were scheduled to give him (Kriozere) the money to do one thing and he was refusing to pay us for another, so I wanted to give the commission a chance to consider that,” said Zoning Administrator Larry Badiner.
To summarize: you haven’t yet violated the terms of the agreement we wrote but we now realize that we should have written it differently and we don’t like your reported tone, so we propose to punish you rather than our team who wrote the agreement in the first place.
∙ Builder changes tune on paying One Rincon fees [SFGate]
∙ One Rincon Hill Still 70% Sold (And Reneging On Development Fees?) [SocketSite]
∙ Michael Kriozere (ORH) Responds: We’re Planning To Pay, Damn It! [SocketSite]
All these fees and taxes on luxury towers will make it more expensive for the rich to live in the city. If Daley’s plan is to tax the rich to subsidize the poor [Removed by Editor], it probably is working.
Memo to Krozere”s PR agent (…yes he must have one) : Get him on Sean Hannity , he is already screwed in this town anyway….
Sean : “Mike i must say I really respect people like you….but folks in san fran-CISCO say you didnt tell them the truth…”
Crow: ” really… they do? Ok…. you want the truth, maybe i lied…. but this country is going in the WRONG DIRECTION, and someones got to do something.”
Sean : “Yup. weve heard about chris daly. mike, youre an american hero. Karl, whaddya think?
This. Is. So. Stupid.
Typical Daly.
Prefer a cheap thrill?
http://lookatthisfuckinghipster.tumblr.com
God this town is so oppressively SMALL TOWN sometimes.
Seriously, can we rename the city to grovers corners? The hamlet of Mayberry ?
hee hee hee… isn’t the unwinding of a bubble fun? And the tide has just started to go out in the “real” SF.
I bet there’s going to be plenty of spectacle for the ss gloaters, grave dancers, doom and gloomers, haters, bubble heads and fence sitter.
Oh, not to forget the bitter renters.
🙂
Editor,
Removing JJ’s comment (which I didn’t think was even bad?) makes his sardonicism far less clear. I’m not sure how you read it but I don’t think he meant to slam SS either, rather I think he was tweaking some of the visitors here. Certainly one could be forgiven for thinking that some of SS’s self admittedly wealthy readership have remarkably uncharitable views on the poor. Certainly I have seen many cases where the poor have been painted with wide brushes, which I believe is what JJ was alluding to.
I’m respectful of the editor reserving the right to run this privately owned site as he sees fit, but when even mild comments containing no shilling, threats, slander or foul language are edited it certainly gives this reader pause as to what the future holds for one of my favorite blogs, and what sort of opinions will be allowed to be expressed.
JJ,
As has been pointed out previously, developers will charge what the market will bear regardless of any fees. The sale of a property is not based on what it *cost* (as many owners are finding out to their chagrin), it is based on what a buyer is willing to pay. And while I am sympathetic to Lmrim’s argument that the overall pricing environment is inflated by the introduction of fees, I’m also sympathetic to the argument that these sorts of fees are the inevitable result of prop. 13. The money, as they say, has to come from somewhere.
[Editor’s Note: We didn’t take it as a slam (which we’re happy to endure), and we never try to moderate opinions, but we are sensitive to perpetuating myths as well as trying to keep discussions on track. Apologies if we blew it this time. Regardless, and as always, thank you for plugging in.]
As someone who lives (quite happily) in the tower, I have to say this move by Daly and co. is very shortsighted. According to my bank, my PROPERTY TAX checks cleared a few months ago. Was Daly not happy to receive those? As the Developer noted in his retort to the Chron article, the city did not put any money the building of the tower, but the residents will continue to provide the city with income. So would the residents of the second tower, which shenanigans like this could prevent!
Wow, congratulations to Robert Selna of the San Francisco Chronicle for avoiding taking any responsibility for his half assed reporting job that made readers believe Kriozere hadn’t given the City a single penny …
I’ve been a supporter of keeping the Chronicle alive (subscriber and stuff, even though I read it online more or less for free) … I think I’m ready to stick a fork in the paper though …
Whatever comes of this mess, I hope that it doesn’t leave Rincon Hill with huge dirt piles at Fremont and Harrison along with Lansing Street for years (decades) to come …
The money, as they say, has to come from somewhere.
Really? How about someone actually earning it instead of just feeling entitled to it and taxing the buyers. What did the City or anyone else do to get this money? The City does not need more money. It has enought to spend 1 million on a ramp for a councilwoman that hardly shows up. It has enough to pay more than 9,000 employees over $100,000 a year. Even the top nurse earns close to $300,000. It has enough to house criminal youth on the guise of sanctuary. And the Mission district has enough money that it can turn away commerce because it does not like the company. And the market will bear the price of the increased cost of building. Missionite, you are really misguided if you think that business can succeed at a loss. If the market can’t bear the costs of building, there won’t be a market, end of story, and the buyers end up with crappy product at high costs. Oh right, that’s the way it used to be so it must be good.
I’m also sympathetic to the argument that these sorts of fees are the inevitable result of prop. 13.
I’m not sure what I think about the relationship of Prop 13 to all these various fees, but I do think prop 13 is an unconscionable and massively distorting feature of CA tax policy. I very much like the idea of “starving the CA tax beast”, but the way to do that imo is to limit property taxes to x% of current assessed value and stop this crazy subsidization of early cohorts by later cohorts, which distorts pricing and supply dramatically. No exceptions.
That being said, I’m a trader. If CA is dumb enough to create a system like this and tolerate the distortions it has created, I will continue to enjoy as a renter the services that my fellow recent purchasers are graciously providing. My landlord pays $1K/year in tax and the guy across the street from me is paying $17K/per year for effectively the exact same house. And he has the privilege of watching his house price go down, partially because the crazy subsidization scheme drove the marginal prices so high (relative to income).
I’ve said it before, I’ll say it again… Daly is a moron. From any side of this issue the guy is a parasite. I will personally put on a going away party when he is out.
for those of you hoping cd just goes away –
guess what, ?, once gavin newsom runs for gov – there are 3 real candidates for mayor
Chris Daly
Aaron Peskin
Dennis Hereera
unless you think DH is a lay-up, odds are this blog will have a lot of posters in misery for a long, long time.
Daly is too far left to win that big an office IMO. We’ve seen it twice over, with far more likeable lefties.
Daly doesn’t have a chance. Peskin slightly better, but he is still widely loathed. Dennis Herrera is clearly the front-runner. One problem for him is that even those in the office he runs largely don’t know him, and those that do know him dislike him and think he is a dimwit. If anybody with half a brain and the slightest dose of charisma stepped up, he or she would take the race IMHO.
The Chron has always been a joke. And for many, many years it was the only game in town for general news as well as advertising Sunday open homes.
Now the times have changed and the Chron has been to shortsighted and/or arrogant to adapt. [I’ve let me subscription go after 20+ years- it’s no longer worth paying for] and I no longer shell out $100/week for a two line open house ad when they cannot even guarentee that they will publish it correctly.
This bogus “news” story about ORH where the paper didn’t even bother to do any fact checking brings thier credibility equal to that of the Bay Guardian.
RIP, SF Chronicle
M.R.
Let’s examine Round 1 of the Chris Daly/Board of Stupidvisors scam before looking at this latest ploy –
$11,026,146 (Dec. 2005) – Paid to Chris Daly’s front pocket
$858,448 (Feb. 2006) – Paid to Chris Daly’s back pocket
$3,162,889 (Sept. 2006) – Paid to Chris Daly’s checking account
$1,268,306 (Dec. 2005 and Sept. 2006)- Paid to Chris Daly and cronies general extortion fund.
So, the developer has paid $16m+ in fees and wants to pay the remaining $5m once the Temporary Certificate of Occupancy (TCO) is granted. Apparently this TCO is granted when all the units are sold. Doesn’t seem grossly unfair to me, given the amount already paid. Seemingly though the Daly mafia feel entitled to their entire bribes up front. And to get it, they will punish the entire Rincon Hill neighborhood by withholding $1.6m that they have raised in taxes from special assessments. How is this not mafia style blackmail? These guys are truly the lowest form of scum.
[Editor’s Note: A TCO is required prior to any residents moving into a building and was granted to One Rincon Hill long ago. As currently written, One Rincon Hill is not required to make its final development fee payment until a permanent Certificate of Occupancy is requested (which isn’t directly tied to sales).]
If those are the options for Mayor, then I’m running. I think I have a fighting chance.
“Editor’s Note: A TCO is required prior to any residents moving into a building and was granted to One Rincon Hill long ago. As currently written, One Rincon Hill is not required to make its final development fee payment until a permanent Certificate of Occupancy is requested (which isn’t directly tied to sales).”
Thanks for the clarification. However, it seems like a permanenet certificate would be logically be requested one the building is fully occupied/sold? Either way, hard to side with the city’s extortionists when they already have 75% of the bribe in hand.
Yes, Robert Selna’s dimwitted writing of non-stories that he has dreamed up about City issues is one major reason for cancelling a SF Chron subscription. I wonder why the editor puts up with such crappy reporting despite numerous complaints made directly to the editor about Selna. Bronstein and his predecessors would never have put up with it.
But we digress …
Ladies and gentlemen,
So if you want things to change in The City, organize or work with others who share similar beliefs and then actually work for a candidate that you all can get behind. Work the phone banks, walk the precincts, work before and during election day. You KNOW that the Daly coalition works very hard to get elected and then get like minded so-called progressives elected.
Start now for the next D6 election, I am.
next election – you mean to actually get of your butt and top complaining and actually try to do something? thank you for just saying it.
this is the problem of the “non-left” in san fran – and it will be so forever unless people take your advice.
message to “rightist” complainers – so far …. you get socket site and Daly gets the city.
I take no side here ideologically- but this is the way it is.
Since we don’t have city wide supervisors, I take it the rightist complainers you mention are the ones that live in the Mission. Good luck with that one. It’s way too cool to have some common sense when it comes to economics in that part of town, just ask American Apparel.
Let’s see … General Membership Meeting of the San Francisco Coalition for Responsible Growth on Thursday, April 23, 2009 at 6:30 pm at Hamilton Building, 631 O’Farrell Street (between Hyde and Leavenworth) … the speaker is Bevan Dufty … that might worthwhile, speaking of politics of a moderate Democrat disposition.
I really like Bevan. He’s always out at different city events as just one of the peeps (saw him last at pride walking down Van Ness). He’s also a very level headed supervisor. I’d totally get behind him and work really hard for him if he ran. (cue the snickers..)
viewlover,
I’m a CEO and founder of a successful company with offices in several states. I think I have a reasonably good idea of what business requires to succeed, and what constitutes “common sense”.
Nearly twenty years ago I was a young kid who had brief periods of homelessness, and lived for a period off of General Assistance from the city.
The tiny amount that was given to me allowed me to get by until I could get my feet on the ground and get started.
Between myself and my company, I probably pay more in taxes to the city on any given *day* then what I took from the city in my entire life. Without that little bit of help from the city, I think there’s a good chance I wouldn’t be here, wouldn’t be employing all the people I do, and wouldn’t be paying all the taxes I do.
Social services, in my opinion, are a long term investment. As a businessperson I think it is cheaper to educate, treat, and house people then to let things go to the point that we turn into a third world country. Broken window theory, etc.
That being said, few businesses will earmark funds for long term social investment. They basically have to be forced to do it. That’s one of the roles of government: to collect taxes which are used for the common good of all (defense, services, schools, roads, etc.), and decide how to allocate those funds.
Is there waste? Of course. There’s waste in every human endeavor. Whether it’s a wheelchair ramp in City Hall (which, ironically, Daly strongly opposed), or the Google cafeteria, there is always waste. That doesn’t mean good things don’t get done anyways. I think it’s a mistake to throw out the baby with the bathwater, which it seems many here would choose to do.
The developer was aware of the fees before he started building. He made a business decision that he could proceed (and in his own words become “really rich”) even with the fees, which BTW represented a fraction (4.2%) of the overall cost of construction.
The fees were not “for nothing”. The city offered variances on height in exchange for them. The developer clearly decided it was worth it. That was a business decision, and it was his/theirs to make.
Huh,
Apparently the facts aren’t of particular concern to you, and I won’t kid myself that my post will make a difference in your opinion, but for benefit of anyone else revisiting this post:
The Mayor’s office has full oversight and involvement in the expenditures of the funds collected from SOMA developer. The Mayor’s Office of Community Development is not only the official staff for the citizen’s group overseeing the fund, but the Mayor’s office also puts together the budget and proposals for expenditures. The BoS only approves the expenditures. There is a full system of checks and balances set up to ensure that the money does not become a slush fund for any supervisor or other interest.
Item 11A (Addendum) of the Planning Commission hearing today brought up this issue … and I have to say I really like the suggestion by Commissioner Antonini that we look into the relationship between developments in the Rincon Hill Planning Area and what makes those developments so special and extraordinary so that they are the ONLY developments supposedly impacting the rest of SOMA and therefore the ONLY developments that must pay into the SOMA Stabiliziation Fund. Why not other developments that are granted greater heights??? That’s a damn good question … and if they’re going to screw over Rincon Hill by creating all of these damn hurdles for developers to get that hole on Fremont and Harrison developed along with the hole on Lansing Street developed in my lifetime, their needs to be some ‘splainin about the reasoning behind the SOMA Stabilization Fund and why other buildings are paying the same $14 or whatever per square foot fee. If there’s really no impact (which I suspect) and the fee is just a ransom to keep up non-profits that should learn how to fundraise on their own instead of sucking the City’s nipple, let’s get rid of the fee!
As an example … why shouldn’t the 500 foot or whatever height building that will be built on the Transbay Redevelopment Area BLock 8 have to pay the same $14 per square foot (or whatever it is) fee into the SOMA Stabilization Fund as One RIncon Hill if it too creates the same “displacement” or “gentrification” on neighborhoods west of 5th Street? The fee should be assessed to every building on the same basis in SOMA … and not just Rincon Hill developments … or they should eliminate the damn fee.