May 9, 2012
Protest Alert: Rally Against 8 Washington
San Francisco Supervisor David Chiu is expected to join the San Francisco Tenants Union, a couple of "Occupy" groups, and a few neighborhood associations who oppose the 8 Washington Street development that was approved by Planning in a protest this evening.
Protestors plan to rally at 550 Battery Street at 5pm and march to the office of Golden Gateway’s Oak Hill Partners at Montgomery and Columbus at which point the protestors will present Golden Gateway (which owns 80% of the 8 Washington site) with a tax default notice from "the people."
According to Ted Gullicksen of the Tenants Union, the "people’s default notice" is on account of Golden Gateway having "found a way to avoid paying taxes on the real value of their property, resulting in a potential loss of $30 million to the city."
∙ Planning Approves 8 Washington Street Development As Proposed [SocketSite]
∙ Art Agnos’ Open Opposition To The Development Of 8 Washington [SocketSite]
First Published: May 9, 2012 3:30 PM
Comments from "Plugged In" Readers
The most pressing issue of our time.
Posted by: sf at May 9, 2012 4:02 PM
Jesus H. Christ! San Franciscans need to get a job and a life! Never does any project in the city get proposed and passed without all the losers coming out and protesting.
Posted by: GoodGrief at May 9, 2012 4:06 PM
I look forward to seeing this well designed project get built.
Posted by: futurist at May 9, 2012 4:06 PM
It may not be the most pressing issue of our time but it is very sad when the president of the board of supervisors goes to demonstrate on the streets against a decision by the city's planning body. Clearly he has no respect for the city processes that pay his salary - I guess it must be election year.
Posted by: BobTheBuilder at May 9, 2012 4:10 PM
@sf For all of SF's left leanings, it sure is a very, very, very conservative town! And the folks on the left are some of the most conservative I have met. Oddly enough, they are constantly saying no to change. The irony is apparently lost on them.
Disclosure: I live in SF, have for years, and LOVE IT when projects like this are built. Oh, and I also consider myself to be liberal, and very pro development. Yes, it is possible to be both.
Posted by: alps at May 9, 2012 4:45 PM
"I live in SF, have for years, and LOVE IT when projects like this are built. Oh, and I also consider myself to be liberal, and very pro development. Yes, it is possible to be both."
Posted by: gellan at May 9, 2012 5:08 PM
The progs have been very displeased with Chiu's move to moderate since being elected. He's trying to win his way back into their good graces.
Posted by: Patrick at May 9, 2012 5:15 PM
So when this permit finally gets in front of the BoS won't Chiu have to recuse himself now?
Posted by: sparky-b at May 9, 2012 5:48 PM
Good point. I certainly like Mr. Chiu should NOT be allowed to vote and participate at the BOS, with regard to this project.
Posted by: futurist at May 9, 2012 6:21 PM
I do think this project is BS.... when at all times a huge amount of housing for working people could be built, and added onto this project, possibly offsite, and where the city could guarantee more worker housing .... luxury boxes with views of the bay continue to be built with no regard for housing for working people in this town. Good for Chiu. The Planning Department's claims to be for increased density and diverse housing is, mostly, a joke, and clear that money buys whatever rich people want in this town.
Posted by: RK at May 9, 2012 6:31 PM
Why is everyone at SS jumping up to say how much they love this project? It's on public land, it got a massive height variance, why shouldn't the developers have been forced to include a nice chunk of affordable housing on site? Agnos, Chiu et.al. Are perfectly right to say this project should not have been approved as is.
Posted by: JB at May 9, 2012 6:40 PM
also, please note what mr Chiu is protesting: the owners using a loophole that cost the city $30 million. Really? Everyone on this post is against this? You all are pro-stealing? This project is a reward for really awful people, shame on the PC:
I am seriously for most city development, but this one just REEKS!
Posted by: RK at May 9, 2012 6:41 PM
As if this project being proposed for the middle class would negate the THD's true objectives??
If there's one thing these snobs hate more than a blocked view, its the middle/ working class.
Which makes it very ironic, comical, and entertaining that occupy and the 1% are teaming up together to protest the 1%.
LOLs are here again!
(And btw my first post was pure SARCASM)
Posted by: sf at May 9, 2012 7:24 PM
This project will end the loophole won't it? The project will mandate 27 affordable units or in-lieu money, it will be millions a year in taxes, a bunch of money for school, etc.
Posted by: sparky-b at May 9, 2012 7:27 PM
"why shouldn't the developers have been forced to include a nice chunk of affordable housing on site?"
Because this is a completely stupid idea (I know - redundant when it comes to SF policy) and does not address the underlying cause, which is LACK OF DEVELOPMENT.
And you better believe the non-profit mafia knows this.
Posted by: Toady at May 9, 2012 9:29 PM
Gee Toady, thanks for that illuminating insight.
Posted by: JB at May 9, 2012 10:12 PM
Now that I see Ted Gullick opposes the new project, well, it makes me one hundred percent certain I support it.
Posted by: Mike at May 10, 2012 6:55 AM
RK-because the market dictates otherwise and legislating BMR units, affordable housing etc, doesn't work. If SF really wants affordable housing then they will allow for the permitting and construction of units unecumbered of all the BS that one has to go through to build, and go dense. Go dense in designated neigborhoods and increase the density in all neighborhoods
When you have more housing, then it will become affordable, but SF citizens on all sides tend to be anti-development, so only those with deep pockets/connections build and the cost requires higher end units to generate the desired return on the investment.
It's not the role of government to build housing.
Posted by: marko1332 at May 10, 2012 9:18 AM
I am with the preservationists. If the Golden Gateway swim and tennis club disappears, where will the moms and hot nannies go to sun themselves?
William Wallace as Occupy leader:
"They may take our homes, but they will never take our little piece of Greenwich Connecticut!!!!"
I'm here all week. Don't forget to tip your waitress.
Posted by: DannyNoonan at May 10, 2012 10:34 AM
If the purpose of the "peoples default notice" is to generate lost property tax revenue I suggest that the bogus conveyances between Aron Peskin and his parents on his Filbert Street home should be investigated. Ted G. that's a good job for you.
Posted by: Ratso at May 10, 2012 11:24 AM
"also, please note what mr Chiu is protesting: the owners using a loophole that cost the city $30 million. Really? Everyone on this post is against this? You all are pro-stealing? This project is a reward for really awful people, shame on the PC:"
What you fail to note in your comment is that even the City Assessor's office confirmed that the "loophole" used was not illegal. The buyer was aware of the law and conducted his activities in such a way so as to minimize the amount of taxes owed. That is the most american of activities.
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." - Judge Learned Hand (1872-1961)
Posted by: JustLooking at May 10, 2012 11:53 AM
Who created the loophole? Any Why?
Posted by: marko1332 at May 10, 2012 12:40 PM
My guess on who created the loophole. Many of these get created because someone in Sacramento crafted a poorly written law. Laws are written to direct or influence behavior an people will respond in a way that serves their best interests.
Look at Apple. They have a Reno, NV based subsidiary (Brayburn Capital) that manages Apple's investments. Becuase of a corporate "loophole," Apple does not pay California income taxes on these earnings. Is this wrong - no. Apple looked at the laws and is taking full advantage to pay as little as legally allowed. Don't like this, get the law changed.
Posted by: JustLooking at May 10, 2012 1:21 PM
Yes, look at the org chart under the CFO of any large company and you'll find a corporate tax department staffed with CPAs who spend most of their time seeking out such loopholes. My employer is global and pulls all sorts of tricks to minimize tax liability. They even go so far as to affect how we arrange deals with other multinational customers so the money flows through the paths of least
Posted by: The Milkshake of Despair at May 10, 2012 1:50 PM
And if a corporation didn't seek out loopholes and paid more tax than they needed to, they'd be sued by their shareholders (if they found out).
Posted by: R at May 10, 2012 2:03 PM
Let's remember that the loophole happened some 20 years ago and will be ended by the development.
Posted by: lyqwyd at May 10, 2012 3:04 PM
The "loophole" is Prop 13. It is available to you as well: create a shell corp for your property; sell the corporation instead of the property-- the property never changes hands so it is never re assessed.
Posted by: jim at May 12, 2012 8:08 AM
If indeed Prop 13 is the loophole at work here, I don't see how it necessarily follow that it is available to everybody else.
First, when and if you want to sell the property, instead of selling real estate, you're now selling a company. The buyers, assuming that they don't have all cash, will need financing from a commercial bank to buy a company instead of a straightforward mortgage loan, with presumably a large difference in interest rate.
Of course, to make that loan to the buyers in order to purchase the shell corp, the bank is going to demand that the buyers have significant assets, put up lots of collateral, or both. Which means the pool of buyers is going to be relatively small and limited to people who could have just bought the underlying property outright for a lot less in financing and transaction costs.
For the sellers, the shell corp is going to sit on the market a lot longer than the real estate would if it were sold unencumbered, implying larger carrying costs when one wants to dispose of the property.
Which means in the real world, its unlikely that anyone would do this for residential real estate just to reap tax benefits, unless they were already incorporated.
Posted by: Brahma (incensed renter) at May 14, 2012 10:09 AM
^Eh, banks now about the prop 13 loophole too. When I was looking to sell a property in Marin a few years ago the banks helped me set up the appropriate shell corp, and walked the buyer through how to deal with it.
It ain't hard, and the banks that do business in the state certainly aren't blind to how it works.
Posted by: anon at May 14, 2012 2:13 PM
^ anon@May 14, 2012 2:13 PM
Will those banks write a mortgage at the "normal" residential rate? I've often thought about doing exactly what you describe, but I've worried about the financing consequences (as per Brahma's note).
Posted by: El-D at May 14, 2012 5:13 PM
Yes, for the most part.
In my situation, Wells Fargo was willing to give the buyers of my place financing at a slightly higher rate than a normal place, but the difference between full-price property taxes and the financing difference still made it worth it - enough so that I got an extra $45k in selling price as well for structuring the sale as we did.
Posted by: anon at May 14, 2012 6:47 PM
THD has blocked every effort to build anything on this and every other waterfront lot. What should have been built is a high rise, but the NIMBYs blocked that. So what we have is this.
I too am liberal and pro-development. The anti-growth "progressives" who can't understand simple market forces are an embarrassment to The Left. If you want to bring down the price of housing, build more of it.
How hard is that to understand?
Posted by: NoeValleyJim at May 14, 2012 10:02 PM