Supes move forward $40 million tax break for luxury hotel-while key records remain secret - 48 hills

"The Board of Supes Budget and Finance Committee Wednesday sent forward without recommendation a plan to give a private developer $40 million for a hotel project that appears to be a direct violation of the San Francisco Sunshine Ordinance. Supporters of the plan, including Mayor Daniel Lurie and Sup. Matt Dorsey, say that turning an old, historic office building on Third Street into a modern hotel would help revitalize downtown."

"Maggie Mattson, a staffer with the Office of Economic and Workforce Development, said that turning the building into a hotel would have positive impacts on the local economy. The city would reap $577,000 a year in new property taxes. Leigh Lutenski, director of development for OEWD, told the supes that the overall positive economic impact of the project could be more than $36 million."

"But there's a larger issue here. Mattson said the project has a "demonstrated funding gap," and that without the city money, it won't pencil out. That gap was "vetted by a third party." Maybe so. We have no idea if that's true. The public has at this point no access to that "third party" report. It's not in the board files."

The Budget and Finance Committee moved forward without recommendation a proposal to provide $40 million to a private developer to convert the largely vacant Hearst Building into a hotel. Supporters, including the mayor and a supervisor, contend the conversion would help revitalize downtown. OEWD staff estimated $577,000 in new annual property tax revenue and suggested overall economic benefits could exceed $36 million. The Sunshine Ordinance requires disclosure of developer profit and loss statements for tax abatements, but the developer pro forma and the cited third-party vetting report are not available in the board files. A supervisor criticized project-by-project tax breaks.

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