• Justin Sullivan/Getty Images file photo
• Real estate in San Francisco and around the Bay Area is poised for an upswing, much like the trend before the recession hit.

In the half-decade before California was clobbered by its worst recession since the Great Depression, taxable property values — those of land, homes, apartments and commercial buildings — exploded.

Between 2003 and 2009, values increased by a whopping two-thirds, from $2.7 trillion to $4.5 trillion, much from new construction, and local governments enjoyed a nearly $20 billion increase in annual revenue from the boom.

We all know what happened next: The real estate market went into a tailspin. Local governments that had banked, literally, on ever-increasing revenues felt the pinch. It contributed heavily to two cities’ bankruptcies.

Actually, taxable values didn’t go into the tank.

They just stopped growing and shrank a little, falling to $4.3 trillion in 2011. And as the state’s economy began to improve, so did property values, rising slightly in 2012.

This year, they are poised to register a sharp gain, based on reports from local assessors that are being compiled by the state Board of Equalization.

Gov. Jerry Brown’s 2013-14 budget assumes a 2.8 percent increase, but it’s more likely to be in the 4 to 5 percent range.

Los Angeles County, which has a quarter of the state’s taxable property, is up 4.66 percent, and in some of the counties experiencing economic booms, such as those in the Bay Area, the gains are higher. They’re up 6 percent in San Mateo County, for example, and 5.17 percent in Alameda County.

Each percentage point of property value increase generates about a $500 million in additional revenue statewide, so overall, the increase could be well over $2 billion for local coffers and, indirectly, for the state treasury.

Under the state constitution, schools are guaranteed certain amounts of revenue, with the first increment coming from property taxes and the state providing the remainder. Thus any unanticipated increase in local property values and taxes decreases what the state must pay schools.

It’s not another property bubble, at least not yet, but with the housing construction industry beginning to pick up again, California could see strong growth in property taxes in the years ahead. The state is also seeing a surge in sales and income taxes, $2 billion over estimates already this year.

These revenue jumps, however, create another challenge for state and local politicians, who have overspent previous windfalls, leading to huge budget deficits and, as mentioned earlier, the bankruptcies of two cities.

Those who want more spending, whether it’s for government services or public employees’ salaries, will be pressing politicians hard.

Brown has said he wants to resist that pressure and redirect any windfalls into debt reduction and reserves.

But as the money piles up, the pressure will grow.

Dan Walters covers state politics for the Sacramento Bee.

Article source: http://www.sfexaminer.com/sanfrancisco/california-property-values-poised-to-soar/Content?oid=2535210

By Alex Girda, Associate Editor

The Department of General Services is planning the sale of a large section of surplus land in its administration, and marketing has commenced for the property. According to a press statement, the DGS has already listed the property and opened talks with interested buyers until October 3. The 81 acres of land that are being offered up for sale by the state of California once belonged to the former Agnews Developmental Center.

According to DGS Director, Fred Klass, California Gov. Jerry Brown is looking to sell the land located in Silicon Valley’s Golden Triangle area in order to pay off some of the “wall of debt” that the state currently owes. “This sale will allow us to meet that goal while providing a tremendous development opportunity for the San Jose community,” said Klass.

Also making headlines is a very different kind of real estate property as Kimpton Hotels has put up for grabs one of its San Francisco Bay Area venues. The Serrano Hotel is now available for an asking price of around $65 million, or a per-room rate of around $275,000. The 236-key hotel recently underwent a $7 million renovation process for not only its façade but also the windows.

The 16-story hotel also offers a dining option in the form of Jasper’s Corner Tap Kitchen, as well as 2,500 square feet of meeting space at the venue. Considering the rising profile of the Bay Area’s hospitality market, the Serrano Hotel is set to see investors flock to the property.

Article source: http://www.cpexecutive.com/property-types/hospitality/san-francisco-bay-area-properties-put-up-for-sale-as-california-looks-to-pay-off-wall-of-debt/

By Alex Girda, Associate Editor

The Department of General Services is planning the sale of a large section of surplus land in its administration, and marketing has commenced for the property. According to a press statement, the DGS has already listed the property and opened talks with interested buyers until October 3. The 81 acres of land that are being offered up for sale by the state of California once belonged to the former Agnews Developmental Center.

According to DGS Director, Fred Klass, California Gov. Jerry Brown is looking to sell the land located in Silicon Valley’s Golden Triangle area in order to pay off some of the “wall of debt” that the state currently owes. “This sale will allow us to meet that goal while providing a tremendous development opportunity for the San Jose community,” said Klass.

Also making headlines is a very different kind of real estate property as Kimpton Hotels has put up for grabs one of its San Francisco Bay Area venues. The Serrano Hotel is now available for an asking price of around $65 million, or a per-room rate of around $275,000. The 236-key hotel recently underwent a $7 million renovation process for not only its façade but also the windows.

The 16-story hotel also offers a dining option in the form of Jasper’s Corner Tap Kitchen, as well as 2,500 square feet of meeting space at the venue. Considering the rising profile of the Bay Area’s hospitality market, the Serrano Hotel is set to see investors flock to the property.

Article source: http://www.multihousingnews.com/news/national/san-francisco-bay-area-properties-put-up-for-sale-as-california-looks-to-pay-off-wall-of-debt/1004083683.html

Gov. Jerry Brown said Tuesday that someone attempted to break into his loft in Sacramento Sunday night and that three men attempted to break into his Oakland home about a year ago.

The governor, who made the remarks while speaking to a crowd gathered to remember victims of crime, was not home for either of the attempted break-ins, but he said his wife, Anne Gust Brown, was home alone in the Oakland incident.

Jerry Brown said the Oakland incident happened around 1 a.m. when three men showed up at his house and tried to break in. Anne Gust Brown called the California Highway Patrol, which arrived and held the men for 40 minutes. The governor and the first lady have a protective detail of CHP officers with them at all times, even when they are not together.

“They said they were looking to buy real estate in the neighborhood, and the Oakland police let them go. The CHP deferred to them, but that’s not going to happen anymore,” Brown said.

Oakland Police Chief Howard Jordan said he needed to gather more information before making a formal statement.

“We are looking into the incident to find out what happened,” Jordan said. “I don’t know why the officers let them go. I don’t want to speculate on what happened.”

Sean Maher, spokesman for Oakland Mayor Jean Quan, declined comment and referred all calls to the Police Department.

Brown also spoke about what happened Sunday night in Sacramento.

“Just a few days ago, a gentleman was found on my balcony trying to break in,” Brown told the crowd. “Luckily, I wasn’t home.”

The governor lives on the fourth floor of a loft building that has a restaurant on the first floor in downtown Sacramento.

Brown said the person broke into the building, got on the roof and jumped onto his balcony. A neighbor called police, and the man was arrested, he said.

“I think he’s out on his own recognizance,” the governor said, adding that he didn’t think the man knew it was Brown’s loft.

Sacramento police said the man, Jamal Johnson, 26, was wandering around several of the connected balconies on the top floor of the building where the governor lives around 9:35 p.m. Sunday. He was arrested for prowling without incident and is no longer in custody, said Michele Gigante, public information officer for the Sacramento Police Department.

Sacramento police worked with the governor’s CHP detail after the arrest, Gigante said. She added that police also believe that the man was not aware that he was at one point on the governor’s balcony.

San Francisco Chronicle staff writer Matthai Kuruvila contributed to this report. Wyatt Buchanan is a San Francisco Chronicle staff writer. E-mail: wbuchanan@sfchronicle.com

Article source: http://www.sfgate.com/bayarea/article/Jerry-Brown-s-homes-were-targets-of-break-ins-4457477.php

Sources familiar with the deal – an effort more than a year in the making and involving the China Development Bank and Chinese Railway Construction Corp. – tell us it fell apart largely over demands by the Chinese for more control over the developments than Lennar was willing to give.

Word of the deal’s collapse came Thursday, just after Mayor Ed Lee returned from a weeklong trip to China.

He had been hoping to trumpet news that Lennar and the Chinese had reached final terms on the landmark agreement. Instead, he got to answer questions about whether the two biggest development projects on the boards in San Francisco were DOA.

The timing was especially ugly, coming just a day after Gov. Jerry Brown, on his own trade mission to Beijing, announced a $1.5 billion deal with a different Chinese outfit to build a big residential project in Oakland.

“I had wished we could get the funding done, and I’m going to continue to try and help Lennar do it,” Lee said, suggesting San Francisco’s hot real estate market was ready to attract more domestic investment.

Lennar had secured a tentative agreement from the Chinese late last year to finance thousands of new homes and offices at the former naval shipyard, Candlestick Point and Treasure Island. Construction was set to start as early as the end of this year.

Lee said he was not privy to all the discussions between Lennar and the Chinese that led to their deal collapsing. But sources inside and outside City Hall privately tell us both sides had been uncomfortable with how the talks were proceeding.

Seeking better returns

For starters, under Beijing’s recently installed new leadership, the Chinese continually sought assurances of a better return on their investment. That meant that if certain performance measures weren’t met, they could take greater control of the project.

“They kept moving the goalpost,” said one source, who declined to speak for the record.

The locals also had their doubts – not about the Chinese bank’s financing, but about using Chinese Railway Construction Corp. as the general contractor, because the company wasn’t familiar with San Francisco’s local hiring requirements.

Add it all up, sources say, and it was simply time for Lennar to look elsewhere for financing.

“The housing market in San Francisco is hot, hot, hot, and moving with speed is incredibly important these days,” said one source outside City Hall. “And waiting around for the Chinese central government to act probably is not the best way to capture a free-enterprise market.”

Despite the deal’s collapse, Lennar is still planning to begin construction on at least 200 homes at the Hunters Point shipyard this summer using a San Francisco-based contractor.

However, it wasn’t immediately clear what the absence of deep Chinese pockets will mean for the rest of the shipyard project or for the development on Treasure Island, where Lennar hopes to build several 30- to 40-story residential towers.

Lennar’s plan

Lennar issued a brief statement late Thursday, saying only that it is “continuing to move forward with development of Hunters Point shipyard” and that “lenders continue to have significant interest in financing the shipyard and Treasure Island, which they believe are extremely attractive projects.”

As for the Chinese?

Well, they aren’t talking. But it’s worth noting that within the past couple of days, reports have appeared saying the longtime chairman of the China Development Bank, Chen Yuan - who only two months ago was reconfirmed by the new government – is being replaced.

Phillip Matier and Andrew Ross are San Francisco Chronicle columnists. Matier can be seen on the KPIX-TV morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call (415) 777-8815, or e-mail matierandross@sfchronicle.com.

Article source: http://www.sfgate.com/bayarea/matier-ross/article/S-F-China-development-deal-falls-apart-4427448.php

In the Bay Area, the biggest news stories of the year had all the familiar themes – crime, political scandal, money.

But this year, more so than in the recent past, it was largely about the money. California voters, tired of underfunded schools, approved more taxes. Facebook went to cash in its chips and tripped at the cashier’s cage. The Bay Area’s real estate market tightened up and those rituals of the past – bidding wars – returned with vigor.

In between, there were stories of heartbreak – Oikos University – and outrage – Oakland’s crime problem.

Here is a listing of the most important local news stories as voted on by The Chronicle’s editors and reporters.

Voters approve tax hikes:

The political pollsters, antitax crusaders and talking heads on TV all agreed voters would never approve higher taxes, even if they were sold as a “Millionaires Tax.”

Color them surprised because on Nov. 6 voters approved Gov. Jerry Brown’s Proposition 30, which is expected to bring in $6 billion to fund schools, colleges and public safety departments, among other things.

The race appeared close in the polls, and a late cash infusion of $10 million from opponents pumped intrigue into the shadowy depths of campaign financing, but it was too late. Prop. 30 passed 55.3 to 44.7 percent.

In 2013, the wealthiest 1 percent of Californians – individuals who make more than $250,000 and married couples who earn $500,000 – will pay for 79 percent of the tax increase, according to the California Budget Project, a research group that endorsed the proposition. The rest will come from a quarter-cent sales tax increase.

They said it couldn’t be done, but with other states facing their own “fiscal cliffs,” voter-approved taxes may look like a bridge to the future.

Chevron refinery fire:

It looked like a blackened tornado had frozen over Richmond. Then, the huge funnel cloud drifted east, dragging a toxic brew born from a petroleum fire at the Chevron refinery below.

The chairman of the U.S. Chemical Safety Board called the Aug. 6 accident a “close call” that averted catastrophe and avoided fatalities, yet an estimated 15,000 residents visited hospitals with complaints of itchy eyes and wheezy lungs. For all residents, the impact of the fire was felt later at the pump: The refinery’s closure spiked West Coast gas prices.

World Series victory:

As confetti-dusted revelers said along Market Street, “Let’s do this every two years, San Francisco!” But next time let’s cut down on the bonfire-setting, bottle-throwing and Muni-bus smashing. The local team’s miraculous run – including six victories in elimination games – was blemished only by the mayhem that followed. Winning never tasted so sweet or sour.

Ross Mirkarimi scandal:

In a city that relishes scandal, Ross Mirkarimi provided a 10-month drama after he was charged with crimes that shocked the liberal conscience: domestic violence battery, child endangerment, dissuading a witness. The details that emerged after the Dec. 31, 2011, incident with his wife, Eliana Lopez, were sordid – a bruised biceps, a video-recorded confessional that Lopez said was coerced by a nosy neighbor with political motives, and accusations from two other women who said Mirkarimi was less than gentlemanly. It was all capped by an Ethics Commission hearing and a long-awaited vote by the Board of Supervisors.

Mirkarimi toggled between contrite and defiant, and appeared to further inflame his troubles when he dismissed the incident as “a private matter, a family matter.” Yet after he pleaded guilty to false imprisonment, Mayor Ed Lee’s attempt to fire him fell two votes short on the Board of Supervisors, which reinstated Mirkarimi in October.

The vote may have shocked some, but in a city that savors its scandals, perhaps the only things it loves more are tales of redemption.

High court takes on Prop. 8:

More than eight years after then-Mayor Gavin Newsom told city clerks to ignore state law and issue marriage licenses to same-sex couples – an act that made gay marriage one of the city’s defining issues – the U.S. Supreme Court agreed in December to hear arguments on the matter in 2013.

The decision by the justices to settle the constitutional dispute marks the final stop in a long and arduous legal fight.

Since San Francisco first wed gay couples outside City Hall in 2004, nine states have passed laws that allow gay marriage, while California voters banned it through Proposition 8 in 2008. The 1996 federal law known as the Defense of Marriage Act also withholds recognition of same-sex spousal benefits.

But if Prop. 8 and the federal law are overturned after arguments are heard in the spring (an announcement is due by the end of June), gays and lesbians will be allowed to marry in California, and 100,000 couples will be entitled to federal benefits.

Housing prices rebound:

There’s a saying among real estate agents in the city: “It’s never a bad time to buy in San Francisco.”

That idiom was never more true than from 2007 to early 2012, when home prices were “depressed” by city standards.

That window appears to be closing.

Bolstered by the latest wave of tech job growth and a lack of inventory, the city’s housing market enjoyed steady gains, which helped raise the values in neighboring cities throughout the Bay Area, experts said.

In October, a study from the real estate service Zillow showed Bay Area home values rebounded by 8.2 percent in the third quarter compared with the same time in 2011. Listings site Realtor.com analyzed price change and supply/demand dynamics that billed Oakland as the nation’s leading “Turnaround Town,” followed by San Jose, San Francisco and Sacramento.

While positive news for homeowners, the surge has renewed concern for the city’s renters, including working families. It’s always a good time to buy in San Francisco unless you’re the one getting priced out.

Oikos shooting:

At about 10:30 a.m. on April 2, One L. Goh entered a private trade school in Oakland and opened fire on his fellow nursing students and teachers.

By the time Goh, 43, had emptied a .45-caliber handgun, he had killed seven people and injured three at Oikos University, a Korean-based Christian school that catered to students new to the United States.

In the days following the tragedy, mourning family members and a shocked community asked one question: Why?

Those lost were Kathleen Ping, 24, of Oakland; Judith Seymour, 53, of San Jose; Lydia Sim, 21, of Hayward; Sonam Choedon, 33, of El Cerrito; Grace Eunhea Kim, 23, of Union City; Doris Chibuko, 40, of San Leandro; and Tshering Rinzing Bhutia, 38, of San Francisco.

In October, a judge halted Goh’s criminal proceedings, pending a determination of whether he was mentally competent to stand trial.

Oakland police:

In Oakland, crime and policing continued to dominate the concerns of residents and city officials. Based on 2011 data reported to the FBI, the city ranked as the United States’ third most dangerous city. In 2012 violent crimes – robberies, rapes, and murder – were listed as up 20 percent.

Amid this backdrop, department officials failed to implement reforms required in a federal court settlement that stemmed from the 2003 Riders case, when four officers were accused of imposing vigilante justice on West Oakland residents. After plaintiffs’ attorneys called for a federal takeover of the department, city officials compromised by agreeing to hire a “compliance director” to bring the agency up to par and stave off the nation’s first federally run city police department.

In the last week of December, the discussion took a new twist when city leaders announced they planned to hire William Bratton, the crime-fighting guru who oversaw crime drops in New York and Los Angeles, to work with the Police Department in 2013.

Warriors eye waterfront:

Usually, sports teams move to a new city after the fans stop buying tickets, politicians offer too-good-to-refuse tax incentives, or the stadium decays to rival Candlestick.

That’s not the case with the Golden State Warriors, who play in Oakland’s Oracle Arena.

So in May, the plan announced by team owners Peter Guber and Joe Lacob to build a sparkling new venue on Piers 30-32 in San Francisco was as surprising as a behind-the-back dribble no one saw coming. And as dazzling, too.

The proposed arena, a glass oval on the waterfront with plenty of public spaces, is still years away from reality – the team wants to move in 2017.

Facebook’s flop:

In the days leading up to Facebook’s public stock offering in May – the most anticipated IPO since Google went public in 2004 – local economists predicted a run on real estate from newly minted millionaires, record Lamborghini sales and Champagne flooding the gutters of Silicon Valley.

Instead: Thumbs down.

Set at $38, the price opened flat, then bottomed out at $17 in September, and has clawed itself into the $25 range. Aside from the scent of schadenfreude that permeated reports of Mark Zuckerberg’s fumble, the flopping stock has broader implications. If traders can’t trust in Facebook – the blue chip of social media – then what sites are good enough for Wall Street?

Justin Berton is a San Francisco Chronicle staff writer. E-mail: jberton@sfchronicle.com Twitter: @justinberton

Article source: http://www.sfgate.com/bayarea/article/Chronicle-s-top-local-stories-of-2012-4156379.php

That’s how much will be needed to help pay for a tunnel to connect the Transbay Terminal to the Caltrain station at Fourth and King streets.

As it turns out, none of the $2.5 billion in tunnel costs were included as part of the narrowly approved high-speed-rail deal.

It’s up to the locals to make the tunnel happen. If they don’t, the $68 billion high-speed-rail line from Los Angeles will dead-end several blocks from downtown proper.

Building the tunnel will put San Francisco in competition with those hoping to finish BART to San Jose – both projects will be tussling for $1.8 billion that the federal government will direct to the Bay Area in the coming years.

Just for work to start on the 1.2-mile dig through the heart of the city, however, the Bay Area has to come up with its own $650 million. The current plan is to raise $300 million from higher bridge tolls and $350 million in San Francisco sales-tax dollars.

“That’s a reasonable estimation,” said spokesman Randy Rentschler of the Metropolitan Transportation Commission.

José Luis Moscovich, executive director of the San Francisco County Transportation Authority, said city voters could be asked for the $350 million as part of an overall transportation-tax extension within the next two years.

The date for when the Legislature and voters would be asked to approve another $1 toll hike to raise the $300 million in tunnel money is a bit more elusive. Although acknowledging that toll money would be needed for a San Francisco tunnel, Rentschler says there are no plans on the boards to seek an increase.

Even if all the money does come through and the tunnel gets dug, High-Speed Rail Authority boss Dan Richard says, the bullet train won’t arrive in San Francisco until 2028 or so. Until then, the tunnel would be used only by Caltrain.

Oil and water: Even before they qualified their initiative for San Francisco’s November ballot last week, backers of the effort to restore Hetch Hetchy Valley in Yosemite National Park were turning up the campaign rhetoric.

According to a recent fundraising appeal, the century-old dam in the Sierra that supplies water for San Francisco, the Peninsula and elsewhere is an environmental disaster worse than the Deepwater Horizon oil spill in the Gulf of Mexico in 2010.

“Imagine the BP oil spill multiplied by 326: That’s how much water was deliberately flooded into Yosemite National Park,” Restore Hetch Hetchy executive Mike Marshall wrote in his appeal.

He added, “Your donation today sends a loud and clear message to San Francisco bureaucrats: When you’ve made a mess, you clean it up!”

“Pretty shameless,” shot back P.J. Johnston, spokesman for the pro-reservoir forces.

“A better comparison would be the catastrophic effects of demolishing Hetch Hetchy and draining a century-old lake,” he said, “which really would be a disaster for the economy and the environment.”

Filleted: With the help of friends, a gay South Bay couple has at least temporarily blocked the very Christian-minded Chick-fil-A chicken chain from opening an outlet in Mountain View.

City bureaucrats had recently issued a routine zoning variance to allow a Chick-fil-A franchise to be built on busy El Camino Real.

But David Speakman and his husband, Richard, of Mountain View – who in 2008 became the first gay couple in Santa Clara County to marry – had a bone to pick.

They didn’t like the company’s reputation for being antigay. The Georgia-based chain’s president did nothing to dispel that reputation recently when he defended “biblical principles,” including traditional marriage.

So David Speakman made an Internet appeal for the $1,000 needed to bring a zoning challenge before the Mountain View City Council – and within 14 hours, more than enough money had rolled in from donors.

That put Chick-fil-A on ice at least until September. In a statement, the company reaffirmed its “biblically based principles” but said it treats everyone – gay or straight – equally and with respect.

“It could be Mother Teresa that owns it, and it would be a bad place,” Speakman said, citing traffic and other concerns. “But because it was a bunch of bigots, it gave us an extra nudge.”

San Francisco Chronicle columnists Phillip Matier and Andrew Ross appear Sundays, Mondays and Wednesdays. Matier can be seen on the KPIX-TV morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call (415) 777-8815, or e-mail matierandross@sfchronicle.com.

Article source: http://www.sfgate.com/bayarea/matier-ross/article/Bay-Area-faces-new-high-speed-rail-costs-3726796.php

Gov. Jerry Brown pointed to city redevelopment agencies as cash-wasting bureaucracies when he took office in January, and he signed a pair of bills last summer that allow them two options: Go away completely or rely much more heavily on financing from local governments.

The California Redevelopment Association and other groups sued the state in July over the bills, calling them a violation of the 2010 voter-approved Proposition 22, which prevents the state from “raiding” local coffers to make up for its mounting debt.

Redevelopment Commissioner Rick Swig said the best-case scenario might actually be the Supreme Court upholding the state’s ability to eliminate the agencies.

“If the judge overrides them, the governor is going to find a more punitive way to get rid of redevelopment,” Swig said, adding that the agency simply needs closure on the turmoil. “We’re ready to go. We’ve been ready to go.”

The San Francisco Redevelopment Agency’s interim executive director, Tiffany Bohee, echoed that sentiment.

“We are anxious to get resolution and get back to business,” Bohee said.

She added that improvements in the real estate market suggest more promise for private investment in three major projects — Hunters Point, Treasure Island and Mission Bay,  the latter of which already has the massive new Salesforce.com headquarters moving forward.

In any case, the Redevelopment Agency and Mayor Ed Lee say they are prepared to move forward on keeping the agency alive, starting with a first-year commitment of $14.5 million in local funds. Lee said some of that money would come from The City’s general fund — which pays for basic services such as streets — plus another funding mechanism that’s yet to be announced.

“We already have a plan in place to present,” Lee said, referring to the need for Board of Supervisors approval on the agency’s funding future.

Although the agency has been executing work that was under contract before the state bills passed, it has been forbidden for months from starting new projects. The agency’s budget for the 2012-13 fiscal year amounts to $110 million.

dschreiber@sfexaminer.com

Article source: http://www.sfexaminer.com/local/2011/12/san-francisco-revitalization-money-hands-judges