Hi all,
I've just put up a web alert page that lays down the basics on the toxic
Hunters Point 2 development and directs viewers to call/email Board of
Supervisors President David Chiu. See http://our-city.org/campaigns
Chiu will be our -key- tipping point on this campaign. We must swamp him
with massive public comment in the next three weeks so that he will have
the courage to step up and reject the project EIR. The Board may vote as
early as mid July.
Chiu has said some positive things for our side in committee, but he is
still not openly opposing the EIR. We -must- push him hard.
Please spread the alert page widely so that we can get this in gear soon
enough to turn his vote in our favor. Create a version on your own web
sites if you can. (Feel free to copy and paste from Our City's original.)
To go directly to the contact action yourself and immediately comment to
Present Chiu go to:
http://our-city.org/campaigns/index.html#WHAT_YOU_CAN_DO
peace
Eric B
http://xrl.us/bhnjjk
Parkmerced in Default: What Now for Owners' Plan to Bulldoze Over 1,500
Rent-Controlled Homes?
by Dean Preston, Jun. 01, 2010
The owners of San Francisco's Parkmerced cannot pay their mortgage, yet
they want permission from the city to demolish more than 1,500 rent
controlled homes. While most of the public discussion about the proposed
development project has been about environmental, transit and
preservation issues, the planned demolition of so many rent-controlled
housing units is reason alone to stop this project.
Parkmerced was built by the Metropolitan Life Insurance Company
(MetLife) after World War II. Met Life also built similar complexes in
New York City (The Riverton Houses, Stuyvesant Town and Peter Cooper
Village) and other large U.S. cities. For decades, these developments
have provided stable housing for middle-class renters in increasingly
expensive urban real estate markets.
In 2005, a partnership of Stellar Management and Rockpoint Group
purchased Parkmerced and The Riverton. The complexes were purchased for
sums that could not be justified by the existing rental income on the
properties. Instead, as noted in a /New York Times/ piece this weekend
<http://www.nytimes.com/2010/05/29/business/29real.html>: "just like
Riverton and Stuyvesant Town, the owners of Parkmerced sought to take
advantage of a roaring market to replace rent-regulated residents with
tenants able to pay far higher rates."
These "predatory equity" schemes have not been working out as investors
intended. Tishman Speyer (Stuyvesant Town), Stellar Management
(Riverton), Page Mill Properties (East Palo Alto), and others wound up
in foreclosure, with banks, pension funds
<http://tenantstogether.org/article.php?id=1332> and other institutional
investors losing the funds invested in these reckless schemes.
Parkmerced is not far behind these other properties on the road to
foreclosure. The latest news is that the owners are in default
<http://www.sfgate.com/cgi-bin/blogs/bottomline/detail?blogid=56&entry_id=64…>
on their loans. Former Willie Brown spokesman P.J. Johnston, now working
for Stellar Management, sought to reassure the community that the
default would not change life at Parkmerced. According to Johnston, the
owners remain committed to moving forward with their development plans.
Those plans calls for the demolition of over 1500 "garden apartments,"
all of which are subject to San Francisco's rent control law. The owners
argue that they will replace these units with over 5000 new housing
units on the site at a rate of 300 per year. (It is unclear how many of
these anticipated units would be /rental/ units. The owners admitted at
a recent Planning Commission hearing that the mix of rentals to owned
units "has not been finalized.") They claim that they will replace the
rent-controlled units with new rent-controlled units.
The promise to replace the demolished rent-controlled housing with
rent-controlled housing cannot be taken at face value. First, given the
owners' current financial situation, there is no assurance that they
would be able to perform on such a promise. In a worst-case scenario,
one that seems entirely possible, rent controlled homes would be
bulldozed and then the project abandoned -- in whole or in part -- when
it came time to build the replacement units.
Second, the City must remember that this ownership group's business
model involves the deregulation of rent-controlled units. At minimum,
the city should demand and examine placement memoranda, investment
agreements and other documents that the owners provided to potential
investors. Similar documents in other predatory equity deals reveal the
intent to displace tenants and raise rents despite local tenant
protection laws.
Third, now that California's Court of Appeal has expanded the
Costa-Hawkins Rental Housing Act to bar most rent-restrictions on new
housing, proposed rent restrictions on replacement housing would likely
be challenged in court by the owners, or subsequent owners, of
Parkmerced. While Costa Hawkins recognizes a limited exception for
certain types of development agreements, the 2009 /Palmer v. Sixth
Street <http://www.beyondchron.org/news/index.php?itemid=7184>/ court
decision shows that cities cannot rely on the Courts to interpret Costa
Hawkins to allow rent-restrictions on new housing. Until state law
changes so that the city can guarantee its residents that replacement
units will be rent-regulated, the City should not even consider allowing
such a large-scale demolition of rent-controlled housing units.
Finally, let's not forget that San Francisco has a policy against
demolishing <http://www.sf-planning.org/index.aspx?page=1633> sound
rent-controlled housing. The City's Planning Code
<http://search.municode.com/html/14139/level2/A3_s317.html> makes this
clear. The City's Planning Department reiterates the point: "Under
requirements of the General Plan, the Department is predisposed to
discourage the demolition of sound housing."
Given the precarious financial position of the owners, the uncertainties
regarding rent-restrictions on replacement housing and the city's policy
to discourage the demolition of sound housing, it is hard to imagine
that any responsible city official would approve moving forward with a
plan to demolish over 1500 rent-controlled homes at Parkmerced.
/Dean Preston is the executive director of Tenants Together,
California's Statewide Organization for Renters' Rights. For more
information about Tenants Together, go to www.tenantstogether.org
<http://www.tenantstogether.org>/
