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Chronicle Endorses Ed Lee This Week…and here’s the reason why

by Larry Bush on 10/11/2011

in Merely Rumors

[What’s black and white and red all over? CitiReport after the Chronicle today endorsed David Chiu, not Ed Lee, for mayor. Upon reflection, we would call our post below as “courageous” in its willingness to predict that Tom Dewey would win the presidency. Here’s what the Chronicle actually wrote, available here:]

(rendering shows Chronicle’s expansion into a tech and start-up campus)

Sure, words like “civility” and “solutions” will appear in the editorial.

But what’s at stake at Fifth and Mission isn’t the next four years for the city — it’s what’s at stake for the Chronicle’s profit center and winning city approval to redevelop 23 parcels it owns stretching across 4.7 acres around Fifth and Mission.

The plans include 400-foot high towers – equal in height to the Embarcaero Center Two and Three and as high as three of the four planned Transbay Terminal towers.

The Chronicle knows what it takes to win City Hall’s favor — it  has hired two of Gavin Newsom’s former directors of its economic development office and retained the President of the city’s Historic Preservation Commission as a consultant. It also has partnered with the powerhouse Forest City developers whose local leader is Natalie Berg, past president of the City College Board of Trustees.

It’s an open question whether the Chronicle’s financial interests bleed into the news pages. The fact that the Chronicle has shrunk its news hole and staff can’t explain the paper’s failure to examine Lee or its penchant for highlighting those issues that dovetail with its own financial interests. Lee’s tenure as a city bureaucrat virtually disappeared from its pages, and along with it the controversies over repeated failures to meet deadlines, tolerance for misconduct and abuse of office, and awarding contracts to mayoral friends.

A crossroads for news and business

The Chronicle has a strong financial interest in tax benefits for start-up companies in the tech field, and now counts nearly 1,000 small start-ups among those housed in the revamped Chronicle Fifth and Mission building. They operate under the company name 5M for Fifth and Mission.

Among the early companies moving into the building is Square Inc., a start-up by Jack Dorsey, co-founder of Twitter who returned as Twitter’s leader in March. That was a scant week before   before the Twitter tax deal was completed with the Chronicle’s editorial support. Dorsey is continuing his 5M-located office while also serving with Twitter.

The Fifth and Mission Chronicle headquarters have historic status, which can be both a plus and a minus as it converts former newsroom space into offices for tech and other start-ups. They needed a friend on the Historic Preservation Commission.

Early in his term, Ed Lee moved forward to name Richard Johns to the city’s Historic Preservation Commission. Johns only claim to credentials in historic preservation is his role as a board member of the San Francisco Museum and Historical Society with offices in the Old Mint across the street from the Chronicle.  Johns lack of professional credentials left him vulnerable to a lawsuit by preservationists that still is active in state pleadings.

One of Johns’ fellow board members at the old Mint is Martin Cepkauskas, director of real estate for the Western Properties Division of the Hearst Corporation, described in the San Francisco Business Journal as being “in the middle of seeking city permits and approval to redevelop its historically significant Chronicle building.” It’s a useful connection for a corporation that has to successfully win approval for its development plans from the Historic Preservation Commission.

The Chronicle also began adopting members of the city family into its corporate family. Since the paper’s plan depends in part on the Historic Preservation Commission’s approval, the Chronicle hired as a consultant the President of the Commission, Charles E. Chase.

Charles E. Chase, the commission president, told the Bay Citizen that he would recuse himself when the Chronicle’s plans come up. Whatever he costs, it’s worth it.

Just how flexible the city’s historic preservation rules can bend was made clear in the Chronicle itself. Columnist Willie Brown’s piece on October 9 described how he could bulldoze through historic preservation requirements. In typical Brown style, the former mayor took credit for a plan to evade the city’s historic preservation requirements in order to help Steve Jobs develop an Apple store.

Brown claims this was the exchange between him and Jobs:

“Just promise to preserve a significant part of the building.”

“And what significant part would that be?”

“How about the back wall?” I said.”

Ed Lee City Hall Falls in Love

The Chronicle’s plans, which will take several years to bring to fruition, already are being embraced with open arms by Ed Lee’s administration.

In an April Bay Citizen article also published in the New York Times, Lee’s economic development leader gave an uncritical assessment.

“Their ideas are innovative and very responsive to market needs,” said Jennifer E. Matz, the current director of the mayor’s Office of Economic and Workforce Development. “I’m really interested in seeing how their plans develop.”

Ken Rich, a project manager under Matz, didn’t hold back in his praise for the Chronicle’s plans. In the Bay Citizen piece, he indicated that the proposal “would be ideal for the large-scale expansion of nimble, entrepreneurial-minded companies like the ones that are now proliferating in the building,” according to Gary Shih, the Bay Citizen’s author of the piece.

The Chronicle already has lined up support from SPUR, whose executive director is quoted “It’s important to the city that we really make use of this site because they are trying to invent a new kind of work environment that is going to work for the economy of the future.”

Businesses are expected to act in the interests of their owners and investors, and the Chronicle’s use of its editorial endorsement to enhance its potential profits is no exception.

In 1995, the Chronicle shocked the city when it endorsed Frank Jordan for a second term over challenger Willie Brown. Inside the paper, it was no shock. Jordan was seen as brokering a peace pact between the Chronicle and its unions during an expensive strike, and the paper’s owners owed him.

By 2011, the Chronicle’s endorsement of Lee isn’t a shock at all.

After all, this isn’t a newspaper that tells readers it serves the community “without fear or favor.”

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