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Real Estate Economics • April 1, 2010

Development, diplomacy find a home in high-rise

Development, diplomacy find a home in high-rise

C.W. Nevius

San Francisco Chronicle

Thursday, April 1, 2010

Ken Werner is having trouble sleeping. It has been a problem since he moved into his new rental unit on the 17th floor of Trinity Place at Eighth and Mission streets.

"I wake up at night and look out the window and start looking at these magnificent views," Werner said, pointing out toward Twin Peaks. "I love this place."

Hearing that, those who followed the drama and commotion surrounding this project for six years have to smile.

This is the most unlikely of San Francisco stories. It began when a major developer proposed a large, expensive rental project for the blighted Mid-Market area. Affordable housing advocates - including firebrand Supervisor Chris Daly - rose in opposition. There were demonstrations and frustrating roadblocks.

But then, in what might be called "the miracle on Mission Street," it all came together. The landlord, Angelo Sangiacomo, made some concessions. The advocates suggested proposals. And today everyone - including Daly - is getting credit for putting together a compromise that will not only provide affordable housing for students, restaurant workers and older residents on a fixed income, but will help revitalize the neighborhood.

No one is more surprised than Werner, who used to represent the Trinity Plaza Tenants Association. In his bitterest moments, Werner wrote in a blog that Sangiacomo was "about as trustworthy as a rattlesnake."

Changing view on landlord

Today, Werner says he doesn't remember that. What he knows is that he's moved from the grubby, troubled Trinity Plaza building to his new digs. He's got more room - now 420 square feet - and killer views, and he still pays $673 a month in rent.

"I met Angelo," he said, "and he's actually a nice person. Who knew?"

Hardly anyone, it seems. Sangiacomo was considered such a rapacious landlord that he was mocked as "the father of rent control," because he was reportedly the reason the city passed a rent-control ordinance.

"People would say, 'We know Sangiacomo is an incredibly smart guy, so there is no way in the world he would do this if there wasn't some hidden agenda,' " said Walter Schmidt, CFO of Sangiacomo's Trinity Properties.

Agreement on rent control

Getting past that idea took some doing. Among those who shepherded the project through were Randy Shaw, executive director of the Tenderloin Housing Clinic, who had clashed with Sangiacomo in the past; Daly, who coordinated the tenants; and iconoclastic political consultant Jack Davis, who was lured back from laid-back Sedona, Ariz., by Sangiacomo to mediate.

Davis and Shaw sat down with Daly's group and asked what it would take for approval.

"It was like shuttle diplomacy," Davis said. "We'd take it to Angelo, and sometimes he'd say 'no' and sometimes he'd say "hell no.' "

The breakthrough came when Sangiacomo agreed to include 360 rent-controlled units to cover the total number of residents at the old Trinity.

Small rent increases

Those residents, like Werner, will have small rent increases as long they live in the apartments. When they leave, the units will rise to market rate, but the new tenant will have rent control from there. Building began in 2007. In January, tenants began to move in.

"This shows what can happen with cooperation," Shaw said. "This is one of the great buildings built in this city since World War II."

So that wasn't so hard, was it? The takeaway message is that for all the sound and fury, it is possible for two sides to compromise and agree, with both getting some of what they want. Last week, the building was named "Best Affordable Housing Project" and "Best Community Impact in an Urban Area" at the annual Real Estate Awards. Next thing you know we'll be praising Daly for his thoughtful, level-headed negotiating skills.

Daly declined to be quoted for this column, but his efforts earned him the title of "Housing Hero" by the San Francisco Housing Action Coalition in 2007.

"Everybody says he is anti-development," Shaw said, "but he supported one of the biggest developments in the city."

Davis, who entered the conflict reluctantly, now thinks he was part of something important.

"Just helping to turn that awful corner into something beautiful is something," he said. "This is going to live on. I feel real proud every time I pass it."

C.W. Nevius' column appears Tuesday, Thursday and Saturday.


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