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The Grid 

Wednesday, Oct 23 1996

It's Willie's Economy, Stupid
From his economic summit in April to his state of the city address last week, Mayor Willie Brown has made it clear that the phrase "economic development" will be highly elastic under his administration. That's more than mere summitry and speechifying. Brown has already begun centralizing the various tools of economic growth into a new agency: The Mayor's Office of Economic Development.

Created early this year, the new office has an ambitious agenda: to coordinate, if not actually consolidate, the economic development functions of city government. That would embrace everything -- from the dispensation of loans and tax breaks to greasing the skids for transnational business partnerships, from curbing the spread of chain stores to executing major development projects like Treasure Island.

Most previous mayors have had related ceremonial enclaves. But evidently Mayor Brown's more serious about laying his hands on the levers that dispense money and policy. (This, after the new city charter, which took effect this summer, removed most all checks on mayoral power.)

As part of this whole effort, Brown has spent the past month raiding the Redevelopment Agency. First, the mayor snatched Larry Florin, the agency's military base closure expert. Florin says his sole job will be to make sure that Treasure Island becomes a mega-entertainment center of movie studios, amusement parks, and a fire and police academy. Last week, Brown grabbed the $30 million Fillmore Jazz Preservation District project, a redevelopment initiative aimed at creating a jazz-oriented neighborhood of nightclubs and restaurants.

And Sue Lee, the former Chamber of Commerce vice president whom Brown tapped this month as the new director of the development office, says that even more Redevelopment Agency responsibilities will be subsumed. Most likely first candidate for absorption: the ability to establish enterprise zones, those typically blighted geographic areas where businesses are awarded tax breaks, loans, and technical support.

The Board of Supervisors also got trapped in the mayor's gravitational pull. Supervisor Mabel Teng recently sponsored legislation mandating that all bills affecting small businesses be sent to the mayor's Small Business Advisory Committee prior to being introduced. This month, the mayor pulled the advisory commission, and its director, Barbara Kolesar, into the new office. Rarely do executives get to review, much less affect, the work of a legislature at such an early stage.

And even within the Mayor's Office Brown is seeking centralization. Lee says that eventually the Mayor's Office of Community Development, which oversees $43 million in federal money for loans and various programs like job training and housing for people with AIDS, may be merged into her office. "After all," Lee says, "what's the difference between community development and economic development?"

(This is pragmatic, too. When Brown's appointee, Priscilla Watts, took over the office, she says she discovered a bureaucratic nightmare, including loans that had never been collected on and others that had been in default for years.)

The mayor's consolidation of economic development functions is arguably smart policy. Duplication of effort and bureaucratic turf wars are legendary killers of progress. But it's undeniably smart politics, too. The delivery of favors and public monies, whether it's blocking a Blockbuster or helping cement a telecommunications contract for Pacific Telesis in China, is key to both the city's well-being and the mayor's popularity among constituents.

Brown obviously thinks so anyway. Consider whom the mayor has tapped as his international trade czarina: Melinda C. Yee, a 33-year-old former top aide to Ron Brown, the late U.S. commerce secretary. Yee has literally been at the table when major U.S. corporations -- like Kodak, Motorola, and Sprint -- have struck deals with the Chinese government. Clearly, the mayor was looking for some major talent here -- unlike the arrivistes and yes-boss hacks whom he's spread throughout so many other levels of staff.

Burmashave 2
City officials are still dealing with Burma-entangled Motorola Inc. and its $50 million bid on the new police and fire emergency radio system (see "The Grid," Sept. 4). But now S.F. may trip over a considerably larger municipal contract that violates the city law prohibiting government monies from going to companies that do business with the brutal dictatorship in Myanmar (formerly Burma).

The Airport Commission is apparently poised to grant a $148 million contract to Mitsubishi Heavy Equipment America Inc. The division is a wholly owned subsidiary of the Japanese parent company of the same name, which is a heavy investor in Myanmar -- where, in recent weeks, the government has again placed Aung San Suu Kyi, the Nobel Prize-winning democracy activist, under house arrest. (The S.F. contract would cover the construction of a "people mover" within the airport terminal.) Mitsubishi companies are involved in or bidding on a host of projects for Myanmar's dictatorship, according to the Franklin Research and Development Corp., a "socially responsible" investment firm in Boston, Mass.

Mitsubishi's competitor for the S.F. contract, ABB Diamler Benz Transportation Inc., says the airport has stopped sending it technical information needed to continue in the bid process, which Diamler executives interpret as meaning they've lost. (Diamler Benz, a subsidiary of the Mercedes Benz Co., has never done business in Myanmar, a company official says.)

Ron Wilson, the spokesperson for the airport, admits that a Mitsubishi bid award would violate city law. But, he adds, the City Attorney's Office is busy looking for a loophole. "This is not a hard and fast rule," Wilson says.

Perhaps not. But skirting it won't be easy. Supervisor Tom Ammiano, author of the Burma bill, has told the new airport director, John Martin, that a Mitsubishi award would mean political war. "I've already told him it's no-go," Ammiano says.

Privacy Please
In an SF Weekly profile seven weeks ago ("The DA's Svengali," Sept. 4), David Millstein blithely explained away maintaining a private law firm after hours while drawing a $123,000 salary as S.F. chief assistant district attorney. "My [private] practice does not involve any criminal practice," said Millstein. Then came a measure of indignation: "I'm comfortable with that. If there is a problem with that, I will leave."

Guess there was a problem. On Friday, DA Terence Hallinan announced Millstein's resignation. Seems that S.F. investment banker Calvin Grigsby, a longtime client of Millstein's who is under FBI investigation for his role in alleged municipal corruption in Miami, has sought Millstein's legal services. Says Hallinan: "The figures that Grigsby is throwing at him, he must be asking, 'Why should I stay?'

About The Authors

George Cothran


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