The Man Who Made Mid-Market

by Randy Shaw on March 14, 2005

When the Mid-Market Project Area Committee (the PAC) met last week to approve its Redevelopment Plan, Bob McCarthy left nothing to chance. He took a spot in the audience close enough for him to shout out the exact phrasing of amendments, which were then dutifully approved-verbatim– by the PAC. While the Shorenstein Company is paying McCarthy to make Mid-Market Redevelopment a reality, fairness dictates that the many other developers standing to make huge profits from the Plan should dip into their pockets for McCarthy as well.

Robert J. McCarthy has been a lobbyist in San Francisco for over three decades. While best known as the lobbyist for San Francisco’s largest office developer, the Shorenstein Company, McCarthy’s list of developer clients is pages long. The reason is simple: there are many lobbyists in San Francisco, but none have McCarthy’s skills or track record of success.

What makes McCarthy special is his ability to use whatever approach is necessary to secure success for this client. If a soft touch is needed to get the job done, nobody is more genial and friendly. If yelling and strong words are necessary, as occurred with the Mid-Market Plan, McCarthy will go that route.

McCarthy always puts the needs of his client first, even if the political implications of a victory could hurt other clients. For example, he pushed through the notorious Bryant Square dot-com project in 2000 that prompted an anti-development ballot measure (Prop L) in November 2000 that narrowly lost but brought into office a Board of Supervisors majority that quickly banned new private development in the entire Mission District.

The dot-com bust meant that Bryant Square was never built, but McCarthy presumably got his fee.

Strange as it sounds, McCarthy holds many political views that are quite progressive. He truly wants to help low-income people—as well as his well-heeled clients-giving him an edge in reaching “win-win” solutions for tenants and other disadvantaged groups.

McCarthy’s ability to move the Mid-Market Redevelopment Area process may ultimately stand as his most astonishing achievement.

The process toward creating a Mid-Market Redevelopment Area began before the dot-com boom, at a time when private development in San Francisco was next to dead. Once the boom saw Mid-Market property dramatically increase in value and sites were quickly gobbled up by developers, even the Redevelopment Agency backed off from Mid-Market. The notion that government needed to stimulate investment in an already booming area was seen as ludicrous.

But Mid-Market real estate interests fought back, and convinced Mayor Brown to keep Mid-Market Redevelopment on track. The Fang-owned Examiner newspaper, which was headquartered in Mid-Market, helped the process by running a series of front-page stories title the “Mess on Market Street.”

While Market between 6th and 7th Street was turning into a mess, the chief reason was business decisions by developers. After speculators purchased properties and evicted the ground floor retail uses, the empty storefronts became sites for drug dealing and homeless encampments. Buildings were demolished and left to sit while developers waited for the possibility of better deals through the Redevelopment process.

The Examiner’s “Mess on Market” series ignored the eviction of longstanding ground-floor retail uses and the warehousing of valuable city land. The media also ignored the fact that some of the wealthiest interests in the city, including the Shorenstein Company, owned land in the area and hardly needed a government handout in order to revitalize the neighborhood. Instead, the media’s focus was on the need for the city to remove “blight” from Mid-Market by creation of a Redevelopment Area.

Despite the Examiner’s best intentions, Mid-Market Redevelopment remained on the slow track. That all changed when Bob McCarthy began taking an active role in the PAC meetings.

According to sources present at the meetings, McCarthy took the position that the Shorenstein Company had “invested millions” in Mid-Market and that the city needed to step up and get the area improved. McCarthy shrouded his arguments in moral righteousness—his client had been pouring money into the area out of the goodness of its heart and had the right to expect San Francisco to start providing some help of its own.

Of course, nobody on the PAC questioned why the Shorenstein Company’s multimillion dollar retrofit of its Orpheum Theater was being framed as an altruistic act. Nor did anyone question McCarthy about his client’s failure to spend money to address problems near its Golden Gate Theater or in the area around the Orpheum.

The Shorenstein Company as a concerned Mid-Market business owner? Give me a break. During the 1980’s the Concerned Businesspersons of the Tenderloin gave Carole Shorenstein an award for some small donation in the hope it would spur further involvement in the neighborhood. Neither she nor a member of her staff ever came by to pick the award up.

But PAC members did not know the real history. Many were brought to metaphorical tears by McCarthy’s tale of Shorenstein generosity, and redoubled their efforts togive the office development company what it was asking.

McCarthy has been criticized for allegedly leading the charge for the Plan’s meager 12% inclusionary housing requirement. But this is all part of his plan.

McCarthy knows that the Board of Supervisors must improve upon the deal approved by the PAC, or else be accused of giving in to developers. So McCarthy made sure to lowball the Plan’s inclusionary total so that the Board can claim victory by raising the requirement to 20%, rather than the 34% already offered by Mid-Market property owner Angelo Sanciacomo.

Some lobbyists would have gone with a higher percentage from the outset to avoid the furor that followed the PAC’s adoption of the 12% figure. But that’s why most lobbyists are a step behind McCarthy. He has created the perfect scenario for the Supervisors to claim a dramatic success when in fact they will approve the same 20% figure that McCarthy knew would be the final outcome.

A classic McCarthy “win-win” move.

A good salesman can sell a product that the buyer does not need. A great salesman can sell a product that is not only unnecessary, but leaves the buyer thrilled over the transaction.

McCarthy’s selling job of Mid-Market Redevelopment shows his greatness as a salesman. Here we have an area where private developers have already purchased the land, are prepared for development, and yet the city says that we need a Redevelopment Area to stimulate development in the area. And a broad range of political opinion is excited as can be over the chance to divert millions from Muni, health care, and public works in order to for Redevelopment Agency staff to help wealthy developers make even more money.

When future generations ask how one of America’s most expensive areas of land became officially declared “blighted, ” and why millions of property tax revenue goes to the Redevelopment Agency for Mid-Market rather than to San Francisco’s citywide needs, tell them Bob McCarthy did it..

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