Through the cracks journalism
The latest catch.
By DANIEL GOLDSTEIN : marketwatch – excerpt
urging rents, skyrocketing real-estate prices and booming tech companies. Sounds like San Francisco in 2015, right? It also describes the city just before the tech bust of 2000, according to a recent report.
John Burns Real Estate Consulting of Irvine, Calif., and Pacific Union, a San Francisco real-estate brokerage, say that based on the appreciation (and apparent correlation) of venture capital deals and rent prices, the rise in the Bay Area’s rapid real estate and rent price appreciation today is looking more like a repeat of the dot-com bust of 2000.
“The San Francisco Bay Area is on our watch list for a correction,” said John Burns, his company’s chief executive, in an interview. He said that while San Francisco has become a permanently more expensive place to live and should be one of the most expensive places to live in the world because of its status as the center of the high-tech and Internet economy, the recent increases in home prices and rents have been fueled mainly by speculation.
“Affluent older buyers, often for investment reasons, have identified San Francisco as a place they want to own or live and have driven up prices dramatically,” he said. About a third of all-cash buyers in the Bay Area are purchasing property only as an investment, he said.
Sounds like a correction some people are praying for could be coming soon.
By Ron Leuty : bizjournal – excerpt
When a sports team or politician pledges that no public money will be used on a new sports facility, politely nod, step back and call “bull.
Cases in point: the Golden State Warriors’ and Oakland Raiders’ planned billion-dollar palaces.
To some extent, public money always is involved — and needed, for example, to upgrade infrastructure that helps a broader development beyond ballparks, stadiums and arenas. But the extent to which taxpayers and future generations are on the hook depends on how creative — or disingenuous — politicians and teams are with the real-world implications of their “no public money” pledges.
Do they mean no taxpayer dollars will be spent on new stadiums at all, or just the construction of the structures? In the best-case scenario, how will an (insert realistic dollar amount here) investment of public dollars actually benefit the public? In a worst-case scenario, how much of a new-stadium bill would taxpayers foot if teams wiggle out of a city’s legal grasp.
At the core, we really should ask why it’s assumed to be a city’s responsibility to come up with a facility plan for multimillion-dollar businesses with unicorn-like valuations of more than $1 billion. But let’s not tackle that deeper philosophical question now.
Instead, let’s look at how the different approaches San Francisco and Oakland are taking on two vastly different projects.
In San Francisco, the use of public funds connected to the Warriors’ planned arena is much more defined (transportation upgrades), involves less money ($55.3 million) and, potentially, has a safeguard built in for the city. Still, the privately financed project has a potential public overhang of $30 million… (more)
Originally posted on SF CEQA:
By KENNETH OFGANG, Staff Writer :metnews – excerpt
The State Lands Commission violated the public trust doctrine when it approved the dredge mining of sand from sovereign lands under the San Francisco Bay, the First District Court of Appeal ruled yesterday.
Div. Four said the commission and a San Francisco Superior Court judge were wrong in concluding that an adequate review under the California Environmental Quality Act obviated the need for separate consideration of environmentalists’ claims that the plan was an inappropriate use of public trust land.
San Francisco Baykeeper, Inc., which has been fighting the project for years, sought a writ of mandate after the commission decided last year to renew, for 10-year terms, leases that were originally granted in 1998.
The leases allow three companies to extract sand from below Central San Francisco Bay, Suisun Bay, and the western Sacramento-San Joaquin River Delta, to be used in…
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Eviction Defense Group Displsced
Originally posted on Grassroots Actions:
By Lamar Anderson : SanFranciscoMagazine – excerpt
The dark side of the Twitter tax break
Two tenants’ rights groups, the Eviction Defense Collaborative and Tenants Together, are losing their mid-Market office space to coworking startup WeWork, in a twist of events that might be ironic if it weren’t so…inevitable. Add in the fact that the building that tempted WeWork falls within the bounds of the contentious Twitter tax break district, and you have a clash of old versus new San Francisco so self-referential and potent that we think we just heard David Campos’s megaphone short out. In fact, we’ll go ahead and call it: Welcome to Peak San Francisco.
Come January, the New York–based coworking outfit WeWork will take over the 12th floor of the Hewes building at 995 Market, which has served as the headquarters for the Eviction Defense Collaborative for a decade. Last year, 5,000 tenants came through…
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Major legal questions and policy decisions over the 5M project at the Board of Supervisors meeting November 17, 2015
Originally posted on Grassroots Actions:
By Tim Redmond : 48hills – excerpt
And the role of Sup. Jane Kim in cutting a deal on one of them is raising all sorts of questions
NOVEMBER 16, 2015 – Major development projects in the heart of Soma and along the waterfront will come before the Board of Supervisors Tuesday/17, and there’s a storm brewing over the role Sup. Jane Kim played in cutting a deal with one of the building groups.
It’s possible that one or both projects could be decided by a narrow margin, meaning the outcome would be different if they were delayed even a few weeks until Aaron Peskin replaces Sup. Julie Christensen.
The simpler of the two in procedural terms is 75 Howard. It’s currently a parking garage, which can hardly be called the best use of the property. The developer, however, wants to put a 220-foot building on the site, all…
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By Rupert Neate : theguardian – excerpt
The $1bn-plus valuation of a number of Silicon Valley firms far outstrips their ability to deliver such returns – and many investors now believe it’s a question of when, not if, the bubble will burst.
There are a lot of people in Silicon Valley and New York betting on “unicorns” – the new breed of tech startups like Uber, Square, Airbnb and Snapchat that have been valued at least $1bn.
Not since the last dotcom boom has so much money been poured into so many hyped companies. As startup founders and their investors hope to turn their paper unicorn fortunes into cold hard cash, some of Silicon Valley’s most successful investors are warning a reckoning is coming. And on Monday that magical thinking faces one of its biggest tests.
Square, the mobile payments platform co-founded by Twitter’s Jack Dorsey, will sell shares in New York at a $4bn valuation. A year ago, private investors valued Square at $6bn. Now questions are being asked about whether Dorsey can really juggle his duties at troubled Twitter and a once hot startup that has yet to show any signs of making a profit. If Monday’s initial public offering (IPO) goes badly, a lot of other profitless unicorns will start feeling the chill.
One big problem for the unicorns is that there are simply too many of them. When the term was coined by venture capitalist Aileen Lee in 2013, unicorn was the perfect way to encapsulate something rare, magical and mythical: in this case, a $1bn startup.
“The number of unicorns is a sign that there is a bubble in the private market – in the dotcom era there were 10 or something, now there are too many to count,” he said. “That for me is a sign that these values are untested and out of step with reality. And none of them are making money, they are all buying revenue with huge war chests.”
Patrick reckoned the 2.0 tech bubble will come to be defined by the unicorn. “Whether it’s the ‘big swinging dick’ of the last one [the build-up to the financial crisis], there is alway a name that attached to a bubble; for this one it will be the unicorn.”
But he added that he doesn’t think the bubble is about to burst just yet. For that to happen, he said, there needs to be an “insanity event” – “something that in hindsight is so extraordinarily crazy, but looked normal at time”.
“Last time it was AOL-Time Warner [a $165bn takeover]. It’ll be an event when everyone goes, ‘Oh my god, that was nuts’,” he said. “That’s what I’m waiting for, and when that happens you blow the whistle.”… (more)