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Past Imperfect 

Herb Caen-inspired nostalgia is no substitute for dealing practically with the dot-com boom

Wednesday, Sep 13 2000

Page 2 of 3

The proposition's supporters claim it is an attempt to fight unwanted neighborhood gentrification, and to keep the working classes from being driven out of the city by rising rents.

But the measure's ultimate effect will be to tighten the supply of office space in San Francisco, raise its price, and drive all but the wealthiest enterprises from the city -- creating, at long last, Herb Caen's ideal of a city full of top-hatted dandies.

Mayor Willie Brown not long ago introduced an opposing ballot measure aimed at easing price pressure on the commercial real state market. His measure has its flaws; for one thing it creates a new, highly paid "growth czar" position that is sure to become a political plum dished to a political pal.

But by exempting some already approved office construction projects from the 1986 growth cap, Brown's proposition would dramatically increase the amount of available new office space. This would ease some of the upward pressure on San Francisco commercial rents, slowing the flight of less-well-heeled commercial tenants, and help preserve some semblance of the economically diverse Old City of one year ago. Or, the city could return to Herb Caen's ethos of nostalgic fantasy.

While Herb Caen's genteel, tastefully moneyed Old City may be fantasy for most of us, there are those who do make their homes there. A walk past the $20 million houses of the fashionable Sea Cliff neighborhood quickly establishes this.

There you'll find the gorgeous home of Clinton Thomas Reilly. A real estate speculator, Reilly includes among his investments the 97-year-old Merchants Exchange Building. This structure is a true, Caen-esque monument; it's the site of the ship-reporting agency where important turn-of-the-century men would gather and discuss business.

I thought Reilly would be an ideal person with whom to discuss our newest monument to nostalgia, Proposition L.

Reilly was part of the no-growth campaigns of the 1970s and 1980s. He says he "contributed an enormous amount of money and the services of my campaign consulting firm" to the passage of 1986's Prop. M. And in 1991, Reilly says, he put up money on a campaign to stop the original Mission Bay development. (A modified version of Mission Bay is now under construction in the China Basin area.)

Over time, Reilly also used money earned as a campaign consultant to buy millions of dollars of downtown San Francisco office space. This was a wonderfully prescient financial move; the benefits Reilly has reaped from San Francisco's recent office-space shortage are astounding, putting him in the category of our country's great financial speculators. The market value of just his Merchants Exchange Building, for instance, is currently about $82 million, up from $50 million just a year ago.

And now Reilly is the main financial backer of Proposition L. He paid to gather the signatures that put L on the ballot. And he says he will continue to put his mouth where his money is.

As a reporter, I expected my conversation with Reilly to be simple. Reilly owns millions of dollars' worth of downtown offices. He paid for Proposition L, which would, as sure as day, limit the available supply of office space, and inflate commercial real estate property values. So I figured I'd conduct one of those ordinary, let's-get-this-over-with-so-we-can-both-go-home questioning sessions that Herb Caen surely did all the time.

I asked standard-issue questions such as, "How big's your real estate portfolio, really?" ("I'd rather not say," Reilly demurred.) And, "How much do you think you'll make if Prop. L succeeds?"

This line of questioning would seem a cakewalk for Reilly, who earned his pre-real estate millions helping politicians beguile the press. So I was startled to hear the defensive, patronizing tone of his replies.

I wasn't around during the 1960s, '70s, and '80s like he was, he explained. I don't understand the city's unique political history like he does, he said. And I don't comprehend the unique set of social sensibilities forged during those years to cause people in this city to think the way they do, he insisted. And he called my suggestion that he was supporting a proposition that would wind up making him a lot of money if it passed "a very simplistic analysis.

"It's not at all accurate. It's an amateur's analysis of how this city works. I have been a longtime defender of neighborhood advocates. It's a neighborhood issue against downtown."

At first, this torrent of verbiage sounded like the self-interested dissembling of a political professional -- a professional's "analysis of how this city works," if you will.

But Reilly's voice seemed to contain more earnestness than necessary for an ordinary political consultant's con. And in what I admit may have been a moment of madness, I took the advice of a millionaire political consultant/real estate speculator at face value, and looked to the past for explanations of our present civic delusion.

I looked to yellowed copies of the San Francisco Chronicle. (Actually not-so-yellowed Lexis-Nexis news database files.)

I read columns in which Herb Caen reminds us, in many different ways, how wonderful it would be if we could all pop over to lunch at Bix's and then spend an evening at the opera. I read the column where he gravely laments the fact that our city didn't live up to the San Francisco self-image as described under "San Francisco" in Encyclopedia Brittanica.

About The Author

Matt Smith


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