May 14, 2009
It’s Déjà Vu All Over Again For The Cow Palace
A year ago state Senator Leland Yee threw in the towel on his proposal to sell the state-owned Cow Palace for development and instead settled for "a compromise plan" to sell an adjoining overflow parking lot.
Last October Governor Schwarzenegger vetoed the bill that would have enabled said compromise plan. But in light of Califonia's growing fiscal crisis, The Governor has now adopted the Senator's original proposal (to sell the Cow Palace) as his own.
∙ Much Ado Over Nothing (Except An Overflow Cow Palace Parking Lot) [SocketSite]
∙ How’s This For Compromise: No (Cow Palace Bill Vetoed) [SocketSite]
∙ Cow Palace could be on the state chopping block [Examiner]
First Published: May 14, 2009 8:15 AM
Comments from "Plugged In" Readers
Sell the bitch.
Posted by: Tweety at May 14, 2009 8:34 AM
Ditto that. As a Bay Area native, many good memories there. But, its time for more condos. $410/sf?
Posted by: Tall Guy at May 14, 2009 8:53 AM
Who gives a crap about this old piece of junk??!!
And I heard he's gonna sell San Quention too. Perhaps the Cubix folks can reno it into yuppie condos.
I hear the views are great.
Posted by: Jimmy (No Longer Bitter) at May 14, 2009 8:53 AM
cubix does have that jail cell aura going for it. If only they would sell alcatraz
Posted by: tjg at May 14, 2009 9:28 AM
My guess is that we sell the Cow Palace, but not San Quentin. We don't need the Cow Palace, but we will need to build something to replace San Quentin.
Since it now costs $7mm a mile to move wires underground in SF (and about $100mm a mile to build the 3rd Street rail line)it will cost more to replace San Quentin that we will get if we sell it...
Posted by: FormerAptBroker at May 14, 2009 9:43 AM
We should sell the state capitol in Sacramento and shut it down.
Posted by: tipster at May 14, 2009 10:07 AM
ANYONE who has taking management accounting 101 knows that you don't sell capital assets or look to one time influxes of money to pay for ongoing operating or recurring expenses, which is what the governor is proposing. It's not just pointless, it's destructive to the public's interest! Because it doesn't solve your basic problem -- a structural deficit -- and you're left with fewer assets at the end. It's like if you didn't have any income and decided to start selling off all your body parts (kidney anyone?) to pay your rent. You can't hock your way to solvency. You use one-time revenue sources for one-time expenditures.
Never mind that a lot of properties on that list (e.g. LA Colieseum) actually make a profit in normal years.
Public property is the state's most treasured possession. It would cost a fortune to get this land back should it be needed or wanted. Selling state land is like saying that we'll never need another square foot of parks, universities, etc or any of the other myriad things we expect the state to provide. If anything, the state should hold the land and swap it at a later date for property or capital improvements that it needs or wants to pay for.
Posted by: realist at May 14, 2009 10:09 AM
keep it. buy a buncha beds on craiglist. run a free muni line directly there from market street. give the homeless a home. make us nimbys real happy.
Posted by: resp at May 14, 2009 10:29 AM
Agreed, realist. But try using management accounting 101 to explain to unions why their pensions are gone (much like that home equity they were planning to use for retirement).
A fire sale of parks probably isn't in our collective best interest as a state. But this dated obelisk? What do we really lose by redeveloping it? The gun nuts can drive out to the central valley to get their xm177s and armor-piercing rounds for "hunting." I say bring on the condos.
Posted by: Legacy Dude at May 14, 2009 10:35 AM
Where are da gun nuts gonna go?
Posted by: sf at May 14, 2009 10:59 AM
@Legacy Dude -
I don't have a problem selling the Cow Palace. that's not what I'm saying. I'm saying the decision to sell the Cow Palace and what to do with the proceeds should have nothing, zero, to do with the state's operating budget deficit. That's insane! And tomorrow's parks are today's underutilized properties. Dolores Park used to be a cemetery. Crissy Field was an unused airstrip. The new UCSF campus was a railyard. Countless parks, large and small, all over every city and the state were once used for other things. No, selling the Cow Palace is not selling our parks, but it is selling our future parks and schools. The state's and region's populations are continuously growing. We needs more parks and schools and whatnot. If the state were to sell the Cow Palace and use the funds to buy land for a park or other public infrastructure somewhere else, or to sell part of the site to pay for the creation of a school or park on part of the site, I would be all for that. But to just sell the land off to the developer and funnel the money into the pit of this year's operational deficit is downright criminal and an abuse of the public's pocketbooks, assets, and future.
Posted by: realist at May 14, 2009 11:30 AM
Actually, with regards to only the Cow Palace, it hasn't been making a profit in some time, is in need of $$$$ structural work, and is retained primarily because of the "community benefit" provided by it's large entertainment space. Thus it can hardly be considered much of an asset. Especially as the "community" seems to be coming around to opinion that we'd be better off with real retail instead of a hulking monolith that rarely drives revenue to local merchants.
I for one will be glad to see it go. With the recent approval to proceed with redeveloping the old Schlage factory, the real possibility of eliminating this horrendous blot, and a proposal to redesign the Balboa BART area as a "transit village" the neighborhood could see genuine improvement (not just superficial changes of the government-largesse variety).
Posted by: Average Joe at May 14, 2009 11:32 AM
I understand the reasoning; I spent a lot of time at the garbage-strewn parking lot that eventually became Crissy Field. But the neighborhood already HAS McLaren Park, one of the largest, and least utilized, in the City. There are also several schools (elementary up to City College), and the biggest need OF THE COMMUNITY is more retail. A legitimate grocery store would be worth cash-in-pocket to most of the neighborhood.
Posted by: Average Joe at May 14, 2009 11:40 AM
@Average Joe -
The Cow Palace is a state property and a state resource. It is the property of every resident of the state, not just the ones that live in Daly City. I have every much interest in the fate of the LA Coliseum and Big Basin State Park as the people that live in LA or Santa Cruz, as well as interest in what happens with the cash that the state gets from selling it. You're not getting what I'm saying! This is not about whether the Cow Palace or any other hunk of steel or asphalt should be preserved! This is about the method and dipsosition of the capital resources represented by that asset and whether it is plowed back into improving and expanding the capital assets of the state or whether the funds are plowed into a small patch in this years budget deficit and gone forever.
Posted by: realist at May 14, 2009 12:06 PM
^^^Ahhh, I see now. You're not talking about the specific property, but about the planned disposition of any funds received. Sensible, but I would argue not "realistic". Government accounting works on providing services to current constituents, and government officials are merely people trying to balance those competing interests. They aren't inherently evil, stupid, or lazy (anecdotes of the DMV notwithstanding).
If the competing interests (early childhood education, domestic violence prevention, enhanced food inspections, AND capital asset reserves)become too strained then drastic activities must be proposed to determine which ones the public will stomach. Eliminate CDF firefighters, or sell the Cow Palace? Cancel all technology upgrades for the next 3 years, or sell the LA Coliseum?
It's always a specious arguement to assume everything can be made rosy by finally getting tough on "Waste, Fraud, and Abuse". While some of that undoubtedly exists, it's a cop-out to assume tough choices needn't be made. And no choices are easy, no matter who makes them...
Posted by: Average Joe at May 14, 2009 12:41 PM
It's easy. Cut taxes and services to zero and let people fend for themselves.
We can than all self-assembled into gangs, Mad Max style, for protection.
But at least we won't have to sell off the precious Cow Palace!
Posted by: Jimmy (No Longer Bitter) at May 14, 2009 12:44 PM
selling the cow palace would preserve some services for this year, but what happens next year when you don't have another cow palace to sell?! selling the cow palace isn't going to do jack s--t for preserving services beyond a few months. that's an idiotic argument. It just postpones the Mad Max chaos by a pitifully short time. Services can only be preserved by finding new streams of revenues.
And on top of it all, the state is not going to get much money in this market for any of its assets, so it's exactly the WRONG time to sell.
Posted by: realist at May 14, 2009 2:02 PM
shoot, realist, I think you're on to something. The only way out is to raise taxes on the lower- and middle-classes. California's state taxes aren't really high enough on those people anyway so its high time they paid their fair share. And if they don't like it, they can move someplace else which will be good for the state too since those poor people always use up all the free services around here.
Posted by: Jimmy (No Longer Bitter) at May 14, 2009 2:22 PM
Selling a large asset like this should be done as a strategic initiative. Strategic transactions should be timed for optimal return. In other words this should not be done in a down market.
The state seems to be treating this as a tactical decision. A quick fix for an immediate problem, but will have long term negative effects. I agree with realist's analysis : this would only make sense if the state were going to use the funds for a different capital expense.
The same happens in reverse. The government should have strategic reserves of cash to take advantage of once in a lifetime buying opportunities. For example, old railway right-of-ways keep coming up for sale. These are unique properties because they can provide linear connectivity for new transportation systems. But when they're chopped up into little segments and sold piecemeal then some consortium of government interests needs to buy up *all* of the parcels to preserve the ROW's utility for transportation. This almost never happens though and we lose forever a unique resource that is extremely expensive to substitute.
Posted by: The Milkshake of Despair at May 14, 2009 2:44 PM
According to the Chronicle (which may or may not be accurate), the big problem here is labor & entitlements. Specifically, the main impasse is caused by unions refusing to take pay cuts, government departments refusing to lay off or even furlough workers, and the big one: governments being obligated to make pensioners whole on losses to retirement accounts.
Nobody is bailing out 401Ks for the non-government employees, and layoffs/pay cuts are abundant in the private sector. So why are the unions and government employees entitled to special treatment? Another case of heads they win, tails we lose.
Although I'm still in favor of redeveloping the Cow Palace, FWIW.
Posted by: Legacy Dude at May 14, 2009 3:56 PM
ANYONE who has taking management accounting 101 knows that you don't sell capital assets or look to one time influxes of money to pay for ongoing operating or recurring expenses, which is what the governor is proposing.
Well then, I guess the University of Wisconsin-Superior will be contacting Arnold Schwarzenegger soon to get their degree back, since he earned a bachelor's degree there in Business, and hence probably had to take and pass Management Accounting 101.
Posted by: Brahma (incensed renter) at May 14, 2009 3:57 PM
Why does The State even own this in the first place? This is not the kind of thing the State Government should be involved in running or building in the first place. I could see it as a municipal owned property, but this is the kind of thing that should be privatized, if possible.
It is also a terrible use of that space in general. It should be housing.
Sell it, though perhaps it makes sense to wait until the real estate market recovers.
Posted by: NoeValleyJim at May 15, 2009 7:01 PM