San Francisco Mayor Ed Lee:
Partnership with People
San Francisco's first Chinese-American mayor Edwin M. Lee has been on board throughout the city's long process of urban renewal. In this exclusive interview, he explains how people, not government, ultimately drive success.
Partnership with PeopleBy Hsiang-Yi Chang
From CommonWealth Magazine (vol. 502 )
Inside the century-old San Francisco City Hall, the heavy wooden doors to the mayor's office open to reveal high ceilings and classical appointments, as a compact man with an Asian face and graying hair graciously greets us. It is the mayor himself, Edwin M. Lee, San Francisco's first mayor of Chinese descent.
In his first interview with media from Taiwan, holding forth on his city's experience with urban revitalization, Ed Lee states categorically, "The government doesn't have the answer by itself. The answer must be in partnership with people."
Following are highlights from the interview:
Q: Let's begin by talking about the city's Market Street development project.
A: Of course. I've been working for the city for over 22 years. So I've served over (the terms of) four mayors, and certainly the last four mayors, when I was at the Department of Public Works and as the City Administrator, we always wanted to do more to enliven our Market Street. Market Street has a history. Ever since the 1960s and 1970s, it was really a victim of 'disinvestment.' It had been the center of our city for many, many decades. But for some reason the downtown area went elsewhere, and so businesses did not invest there.
I think also, again back in the 1970s and 80s, when the underground BART system was being built, again there were many businesses that had to close because the construction was handled in a way that was not inviting to be down there. So over time, even though Market Street was the centerpiece of the city, it was run-down, with a lot of poverty on both sides of the street, a lot of non-investment, a lot of vacant storefronts, and it became what we call "Skid Row." We ended up finding a lot of adult entertainment theaters down there that could survive, a lot of vacancies… and a lot of poor people decided that if they were going to live on our streets, then they were going to hang out in front of the buildings and sleep overnight. So it didn't become a very safe place, nor a very good place for business.
When I became mayor, I started working on something that my predecessor, Mayor Gavin Newsom, was working on: to use the arts programs of the city to try to revitalize it. We were a little bit successful, and we got some very nice non-profits – like Burning Man and the Great Arts Foundation, ACT – began taking interest. Because there was a lot of disinvestment in Market Street the rents were pretty low and there were a lot of vacancies, so it was actually an opportunity for neighborhood arts programs to start locating there. When they did, some of them asked us for help. I said yes, because I wanted to make a commitment to them.
When I ran for mayor, I actually put my campaign office right there in the middle, and I saw and I smelled and felt everything that was going on there. I personally felt that I wanted to make a commitment to help change this, and make it positive and safer for everybody. And so as soon as I became mayor, we started putting together a loan fund for small businesses, aimed at Mid-Market. We wanted to entice not only the arts community, but we started talking with restaurants, and things that would draw people, and use the Economic Development Office in the city to attract them to the market.
The big break came last year when a company called Twitter said that they were growing, they wanted to stay in the city, but that they felt that they had to look outside the city because we had a tax structure that was very much going to be bothersome to them. We have a payroll tax, and I signaled that I wanted the city to have businesses that create many more jobs for all of our residents. But you can't have that when you're taxing them for that very growth in jobs, so we signaled to Twitter and others that we could start with an exemption on the payroll tax. And lo and behold, they found a place, they signed a long-term lease, and we responded with the Mid-Market business exemption for all the businesses that located there.
Before the ink was dry on their agreement, we had two other companies that decided to move in and utilize that opportunity. A company called Zendesk moved in right away, and shortly after them another company called Zoosk moved in. And with that excitement, as soon as Twitter announced that they would move in, then the same building they were moving into – which had more room – attracted companies called One Kings Lane, which is an online furniture business owned by Ali Pincus, the wife of Mark Pincus, who of course is the owner of Zynga. And so they're here, headquartered in San Francisco, and they were engaged with us in all the discussions on the payroll tax exemption.
And then there was CallSocket, another company that decided to move in, and then ultimately Yammer decided that they would move into the same building as well. They're all filling that whole building so quickly, so that the owner of the building – Shorenstein Properties – now owns the building behind it, and they're beginning the renovations to welcome even more companies there.
When they signed that lease there, then the housing project that had been dormant on Tenth and Market immediately went back and talked with their investors, and they started construction. They had been dormant for over three years, until they heard that Twitter was signing, and then they knew that more people were going to be invested in. And that's what's been happening along Mid-Market. When we did those things, and created the payroll tax exemption, we had small business loans, we signaled support for the arts community… We are working with the community benefit district that had been formed there by representatives of the neighborhood for many years, and there was a re-establishment of investor confidence in Mid-Market.
And so today, in addition to all those technology companies, as of this morning Benchmark Capital decided to move in literally to the same building that I was in during my campaign. So they moved in, and they want to establish their presence. And then we have a number of food establishments. For instance, Pearl's Deluxe Burgers moved in around six months ago, right on Sixth and Market, Dottie's True Blue Café… also with Show Dogs, which is a hot dog sausage stand. They all moved in to that very area. And then ACT, the American Conservatory Theater, they also decided to purchase the old Strand Theater, which is close to Seventh and Market. They are using it to expand their theater, and also using the costume shop on the ground floor to establish yet another smaller theater.
Just two days ago I was also able to go to 1011 Market Street and help open up Camera Works, which is another non-profit arts studio. But they emphasize photography, and they had their opening night right there in the middle of Market Street. So we have a whole revitalization, an urban revival, right in our own Skid Row, because we did the kind of things to signal the city's official support – with small business loans.
We also announced that we would put a police station right at 60 Market Street to help with safety concerns. But we were not content to wait for that. We have expanded our Community Ambassador Program, which is the hiring of local residents that are trained by police to walk the streets at day and night to make sure everybody's safe. They're not officers, but they're appointees hired by the community to help people – to be additional eyes and ears. And when you have those people focused on street safety, then I think the elements that might want to cause trouble go elsewhere. They don't want to be in an area where there are a lot of witnesses and people. Because a lot of the success of revitalization is attracting more people into the area, and having them invest their money, spend time, and having their friends and their professional colleagues interact, day and night.
And we're now working on evening entertainment, so that it will be safe in the evening. We're working with people that will help us light up the market at night, and provide a vibrancy that hasn't been there before. I think that years ago it would have been just very dark and uninviting, and unsafe. We're doing all those things while we invite businesses to be great partners with us, and at the same time we're having a conversation about revitalizing, and replacing our whole payroll tax for the whole city, forever. And that's where a lot of the technology companies have really been excited to work with the city. Because they want to grow, but they also want a tax system that does not punish their growth.
Q: I know you have an agreement with Twitter and other companies to cut their taxes for six years.
A: That's right. It's just an exemption.
Q: Do you think that's a big risk for the city?
A: I don't think it's risky, mainly because if we didn't do something, we'd risk losing these companies and they'd move outside the city. That was not a threat; that was real. They (Twitter) had actually identified a warehouse in South San Francisco where they were going to relocate. And other companies had already started relocating to South San Francisco because of our tax structure. So it wasn't too much of a risk at all. It was really more of a smart invitation. I think we not only made the right move, but that we've enticed other companies to be successful in similar ways.
Q: This is very forward-thinking, especially when City Hall was not in a good management situation.
A: That's right. We do have to be forward-looking, and we do have to think years down the road about where our economy is going, and what are we going to do to keep the companies that are going to grow.
A lot of the talent that the companies are looking for are right here in San Francisco. We have great students that graduate from the local schools, whether it's Stanford, Berkeley, UCSF, San Francisco State, and the others. Even our community colleges have a lot of immigrants that are really smart, and they want to stay here and thrive here with their families. And so the companies have come here to start the companies; the question is would they stay and grow? I think it's a great investment.
So we have to be smart about this, and I know that we also wanted to create a spirit of innovative ideas. I think a lot of our programs are innovations of our own ideas, of looking down the road at the future, seeing where the jobs are, and embracing that spirit of innovation to invite these companies to stay. We have a big philosophy in my Economic Development Office that is: we want you to start your company in San Francisco, we want you to stay, and we want you to grow.
And if we can do the things in government to sustain that, we now see over 250 technology companies excited about being in San Francisco. They love the culture, they love the arts community, they like the spirit of innovation… and what I've done is to invite those companies to build a relationship with us. They formed a relationship called sfCITI (Citizen Initiative for Technology and Innovation), which is like our "Technology Chamber of Commerce." And so they've also been invited to help me figure out how to deliver government services in a smarter, more technology-friendly way to the citizens of San Francisco.
I think it's a great relationship. It's something we enjoy doing, and it's now presenting and creating portals for people who are living in the Tenderloin or South of Market (two of the city's districts) – these kind of lower-income groups. They can come and get trained to support the technology industry.
And that's just technology; we have bio life sciences that we did in Mission Bay that are exciting and ongoing as well, and then we have a tourism and healthcare industry that's also creating thousands of jobs for our city.
I'm very lucky. And of course, as you heard earlier, we're utilizing our success in attracting a very historic basketball team to come back to San Francisco – the Golden State Warriors.
Q: I'd also like to know your thoughts about urban renewal. San Francisco has a reputation for admirable public development projects, but also for being slow in this area. So I would like to ask you about that, and about the biggest challenges for you in urban renewal.
A: Yes, in the past it has taken a long time. Mainly because we didn't have everybody working in a collaborative way. One part of the government would do one thing, and then somebody else would do another, and they wouldn't talk to each other. I've been using my experience in working in the government for 22 years, and I know that you can accelerate the investment confidence ideas in the city if you have maybe 10 departments all working together. So it's transportation, it's public safety, it's economic development entities, it's our planning department, our building inspection department, our public works and public utilities.
I think that has been working very well under my administration, in that we want everybody to work across the aisle, across the different divisions, and see what we can do to entice business to work with us as partners. And when we started doing that, we started getting a lot more faster decisions, a lot more support for each other, and interest in attracting private funds to do that.
The message I sent to everybody is that we cannot wait for the federal government or the state government, because they no longer have the money. And because they don't have the money, we have to have an innovative spirit in our own administration, and generate such a strong attraction that private people will put their money on the table.
Q: So you have a special task force for that?
A: Absolutely. And it's signaling support for not only private funds. Because they have to go through the same thing. They have to go through the planning process, environmental reviews, permitting… but we can fast-track everything knowing that we could really create jobs faster.
Because many times if I wait, the state will hurt us – they're always cutting programs – the federal government will cut programs. And we have to build our own economy.
And now we've seen that not only have we done this in the Mid-Market area, but now the neighbors in Outer Mission, the Excelsior, in Bayview, in Chinatown, as well as Outer Sunset… they say, 'Hey, I want the same treatment. I also want to revitalize our neighborhood commercial corridors.' So they asked us if we could create a team to invest in the neighborhood corridors, so we're doing that as well. Because the success we've felt here, we don't just want it to be in Mid-Market, we want it to be every single neighborhood. And we know that people coming to San Francisco love the waterfront, they love the downtown, but if they have an extra day or two, they also want to visit the neighborhoods: Chinatown, Japantown, the Fillmore, in Bayview and Outer Mission – because they also love the experiences in those neighborhoods, and there's a lot to offer in the experience of coming to San Francisco.
Q: How do you go about getting the trust and support of local communities for your programs?
A: First of all, you spend a lot of time talking to people. For example, every year that I've been doing the budget, I hold a Town Hall meeting in every neighborhood in the city. So they tell me what is their budget priority, how would they like me to help them spend their tax dollars, what projects do they feel are important to their neighborhood. So there's a connection with them and City Hall.
Many years ago when I was working in the other departments, I always saw people come to City Hall to complain about how City Hall is not talking with them. I heard that for years and years. I made a promise to myself that if I ever took charge, in all of my positions I would make sure I would go out to the communities to work with them. And they don't even have to come to City Hall anymore; I go out to them to look for answers, to look at how I can support them. And that has worked.
Handling a city as diverse as San Francisco is demanding, but it's worth it. I think people sacrifice a lot to live in this city. It's more expensive. It's very diverse, there are a lot of opportunities, and people struggle like everybody else.
I know that in my own Chinese community, we have a lot of immigrants that have struggled and sacrificed. They work in the restaurants and the garment shops for not a whole lot of money. They're not rich, but they amass it together, and hopefully they start a small business for themselves. It's like the discussion we had about [Sam Wo Restaurant] in Chinatown. People put together the money for many generations and hoped to have a little success; they hoped for the city to support that success.
That's why I'm a very big supporter of small business. Because a lot of it is family investment; they don't have the multi-million-dollar IPO investment that some of these other technology companies have, but they have the same values. If they put in all the sweat, or they get a little break and make sure that we don't over-tax them, that we attract them, that we have the roads and the public safety working for them, then I support them. I think they are mindful that I also come from an immigrant family. My dad had a restaurant, and wanted to be successful. And my mom worked in the garment shops. And they know that there's a strong feeling that we just have to be economically secure and then we can participate in the best part of the city.
Q: What suggestions do you have for Asian countries to review their policies, such as cities like Taipei?
A: I would say that my success is due to listening carefully and having a very open door to people that want to be successful, and that want to participate. The government doesn't have the answer by itself. I have never felt that a mayor or board of supervisors had the final answer. The answer must be in partnership with people in the neighborhoods. Because it's really in the private sector – they are the real good job creators. If I have a successful restaurant, a technology company, retail, or somebody who's manufacturing something, they will be the ones hiring people to make more of a successful product – whether it's a virtual product, or a knowledge-based product, or something that they make – whether it's fashion design or an accessory, they're doing all of that. It really is organically done. It's people feeling that they are going to get support, and they will take the risk.
I think government in the past always built bureaucracies because they don't want to take risk. And they feel sometimes very conservative, that, 'Hey, I'm using people's tax money, so I'm going to be very, very careful.' But sometimes they are so careful that they build such a thick bureaucracy that nothing gets done. I think that we have to take risks – not irresponsible risks, but risks that are reflective of ideas that come from the community.
That is part of the innovative spirit. It's not just always about the technology, but it's about being creative, and it's about listening to people and responding very quickly. I think that our success will be not only a spirit of innovation, but bringing people into City Hall to tell us what their best ideas are, and then joining on some of those ideas to say, 'Let's grab some of those ideas and get them done.'
I think that's how you create that spirit, and I don't know any other way to run government than to run it as a partnership – because we can't be the final answer, and we don't have all the answers, but we can provide an avenue for the answers to be found.