A committee of the Sunshine Ordinance Task Force, which normally gets no press attention, will take on what could be an explosive issue Tuesday/16 when it considers a public-records request about the massive ParkMerced project.
Nick Pasquariello, who is making a documentary film on the project (and was one of my investigative reporting students), is asking for the project’s financial records, including profit and loss statements, arguing that since the development got public subsidies, that information must be released.
He’s relying on a section of the Sunshine Ordinance that is rarely used or enforced (although it ought to be). It provides that the city can’t give public subsidies to any project unless the developer releases financials:
The City shall give no subsidy in money, tax abatements, land, or services to any private entity unless that private entity agrees in writing to provide the City with financial projections (including profit and loss figures), and annual audited financial statements for the project thereafter, for the project upon which the subsidy is based and all such projections and financial statements shall be public records that must be disclosed.
The law was written back in 1999, when City Hall was planning to give a cash subsidy to Bloomingdale’s to move into the shopping mall on Market Street. That subsidy plan vanished quickly after I invoked the law and asked for Bloomie’s financials for the new store.
But these days, corporate subsidies are more tricky – Twitter got a tax break for moving into mid-Market, but so did everyone else who moved into the area. I probably should have tried to get all of the tech company records at the time, but I didn’t. And it’s easier to do this in advance – the law doesn’t apply to the companies, but to the city; it says the city can’t provide the subsidy unless the project sponsor agrees to make its financials public.
And since there’s been very little use of this provision, the city attorney and the courts have never defined what “subsidy” means. Is a promise of a new Muni line to serve a project a “subsidy?” Is a property-tax reduction? Is a promise not to give out parking tickets in public bus stops?
In this case, Pasquariello told me that ParkMerced got property-tax reductions. The project also got a new Muni station. It would be hard to argue that ParkMerced got nothing in the way of city benefits.
He requested that the Planning Department send him all documents related to the project, and got a CD with more than 6,000 files on it – but none of them, he says, include the project’s profit-and-loss statements.
The Planning Department’s response to his complaint has been simple: We gave you everything we have. That might be true – the department might never have demanded the financials, since the planners (like many city departments) don’t consider the relevant section of the Sunshine Ordinance when considering projects.
That’s one of the problems that this case might bring to light. If ParkMerced did, indeed, get city subsidies, then the planners should have demanded the financials before approving it. Which, of course, never happened. Because the city acts as if Section 67.32 of the Sunshine Ordinance, approved by the voters, doesn’t exist.
So the Compliance Committee of the Task Force will have to decide: Is there an issue here? Did the Planning Department fail to provide records that is has – or did it fail to demand the records from the developer in the first place? The first is clearly a violation; the second would seem to be a violation, too.
And if it is, then planners (and other city departments) will have to be on notice in the future: You can’t just give stuff away without citing this part of city law.
Then comes the hard part: What’s the remedy? Can the city now, in retrospect, admit that it was wrong not to demand ParkMerced’s financials and take back the property-tax relief? What about all the other projects that fall into the same category?
This case potentially opens a huge new area of inquiry that, frankly, all of us in the news media have let slide. The hearing will be at the end of a long meeting that includes a bunch of complaints from the Library Users Association, which has more of its pretty endless complaints about the public library, so while the meeting starts at 4pm in Room 408 City Hall, this issue won’t come up until later. It may amount to nothing; it may get deferred to the full Task Force.
But it’s a fascinating and important question, and at some point, it needs to be resolved.