When restaurateur Gus Murad won 20 extra feet for a major project earlier this month, planning officials blamed it on a clerical error in which a city planner inadvertently put the project at 85 feet after the Board of Supervisors had voted to maintain it at 65 feet.
The mistake has been cast as a fortuitous bit of serendipity that made it easier for Mayor Gavin Newsom to veto a measure that would have kept Murad’s project at the New Mission Theater consistent with the height restrictions on Mission Street. But it was an error worth millions of dollars and a zoning variance long in the making, according to realtors and planning documents.
While nothing illegal transpired as far as Mission Loca@l’s review found, the story of Murad’s 20 feet offers a look at how one project became an exception in a planning process designed to offer consistency. It is also an indication of how Mayor Newsom might one day operate as governor. His veto ensured the 20 feet that three separate votes of the full board taken in November, December and January sought to stop.
Murad, the politically connected owner of the popular Medjool Restaurant, also on the 2500 block of Mission Street, waged the battle for 20 more feet—two more floors—for three years. In fact, Murad always saw the extra 20 feet as part of the project, which would transform New Mission Theater and its neighbor, Giant Value, into a mixed-use complex with dining, entertainment and 95 apartments. Like others nearby, the lot in question had been capped at 65 feet for decades.
“He wasn’t going to give up until he got the 20 feet,” said Colleen Meharry, who owns the building near New Mission Theater and supports the proposed project. “Whether it was a clerical error, or whether the mayor stepped in, I know he was fighting this since 2005.”
Murad declined to be interviewed for this article. Mayor Newsom told Mission Loc@l that the planning commission’s original recommendation was to put all of Mission Street at 85 feet, and that by trying to change that, the board was playing political games.
In July 2005, Murad & Associates began to argue that it needed 20 extra feet on its proposed complex to produce more revenue. Murad’s team allegedly said the money made from the 16 or so apartments on the seventh and eighth floors would help renovate New Mission Theater, according to Sarah Jones, a city planner who is overseeing an Environmental Impact Report for the project.
Mayor Newsom referred to this in his Jan. 16 veto letter explaining that the project would not be possible without the extra 20 feet. However, others pointed out that developers have long made money on Mission Street with the 65-foot height restriction.
Realtors agreed, however, that the two extra floors would give Murad more revenue. The 20 extra feet could be worth as much as $11.2 million for the 16 new units, said Jorge Cárcamo of Gold Key Realty and Investments. Cárcamo facilitated the sale of the theater to Murad in 2003 for $4.5 million, and said he was surprised to hear that Murad got approval for 85 feet.
“City College was the previous owner, and they could not get an approval beyond four floors,” he said.
For Nick Pagoulatos, coordinator of the Mission Anti-Displacement Coalition, the problem is not the 20 extra feet or the project. It’s that in allowing Murad an exception, the city failed to seek anything new in exchange. Yes, Murad will have to comply with a 15 percent allowance for affordable housing, but so does everyone else not given the extra height allowance, he said.
From the start, Pagoulatos said, “We were concerned that the amount of upzoning didn’t require the developers to give enough back.”
Still, in his three-year journey to get the 20 extra feet, Murad found obstacles—and hope.
The biggest hurdle was the ongoing planning for the Eastern Neighborhoods Community Planning process—an eight-year effort to update city zoning and codes for the Mission District, Soma, Showplace Square/Potrero Hill and the western waterfront.
In August 2008, that effort appeared to work in his favor. City planners recommended the Mission Street corridor be rezoned for building heights of 85 feet. But after hearings the planning department noted in its memo to the Land Use Committee that the board “may wish to modify the height limits” on Mission Street, “bringing them generally down to 65 feet or possibly to their existing heights.”
It attached nine pages of current and potential heights. Many, including Murad’s property and the blocks between 22nd and 23rd streets, had been proposed at 85 feet but were originally 65 feet.
That recommendation began a ping-pong-like decision-making process that essentially tipped in Murad’s favor on a fault.
At the Nov. 17 meeting, the Land Use and Economic Development Committee voted 3-0 to keep the original 65-foot restriction on Mission Street except on two properties—New Mission Theater and El Capitan at 2353 Mission St.
Ping! The game was on.
On Nov. 25, the Board of Supervisors voted 9-1 to keep all of the Mission Street corridor at 65 feet. The no vote: Sean Elsbernd (D. 7). Excused from the vote because of conflict: Chris Daly (D. 6).
One realtor, who asked to remain anonymous because he does business with the city, said the city’s color-coded December 2008 map says it all. The colors cast a hue of perfect symmetry: dark blue to indicate 65 feet between 23rd and 21st streets, easing to a lighter blue for 55 feet from 21st to 19th streets, and then a darker blue again from 19th to 17th streets.
But right between 22nd and 21st streets is a white patch—New Mission Theater—with a special notation: Pending.
“You have this whole map and one property is pending,” said the realtor, asking how many people get such special treatment.
Pong! Dec. 9, the supervisors reconsidered their nearly unanimous Nov. 25 vote to retain Murad’s property at 65 feet.
They voted 6-4—Daly excused again—to increase the lot to 85 feet.
David Campos (D. 9), Jake McGoldrick (D. 1), Ross Mirkarimi (D. 5) and Aaron Peskin (D. 3) voted against the change.
Oddly, Sophie Maxwell (D. 10) voted with Michela Alioto-Pier (D. 2), Carmen Chu (D. 4), Bevan Dufty (D. 8), Sean Elsbernd (D. 7) and Gerardo Sandoval (D. 11).
Oddly because seven days later … Ping! Maxwell had a change of heart. She proposed the height be reduced to its original 65 feet. It was the intention, she said, that Mission Street “see no increase in height limits until the planning department came back to us with additional study on both the proposed changes … and affordable housing program for the corridor.”
Maxwell’s measure won a 6-5 approval. Once again, New Mission was back to its original 65 feet. Alioto-Pier (D. 2), Chu (D. 4), Dufty (D. 8), Elsbernd (D. 7) and Sandoval (D. 11) voted against the 20-foot trim.
Maxwell failed to return repeated phone calls to explain her Dec. 9 vote and her later change of heart. A source involved in the planning process said she was overwhelmed with all the details, but added that all the supervisors were getting a lot of pressure from the mayor’s office.
(Update: Maxwell called Mission Loc@l and said that she changed her mind on Dec 16th, because she felt that the community and the planning department needed thorough planning rather than a spot zoning. “I thought in six months we would do better planning.” She declined to elaborate on the Dec. 9th vote.)
Again, on Jan. 6, the supervisors voted 6-4 and approved the Maxwell amendment to leave the project at 65 feet. Things were looking dismal for Murad.
Then … Fault!
It turned out that way back in November, city planner Ken Rich made a typographical error in amending the zoning ordinance and inadvertently gave Murad the 85 feet instead of the 65 feet approved by the board.
The mayor then vetoed Maxwell’s Dec. 16 amendment correcting the error and allowed the 85 feet to stand.
Mayor Newsom was confident in his veto. “The proposed development would—among other benefits— rehabilitate, restore and reactivate the long dormant New Mission Theater,” he wrote in his Jan. 16 veto letter. He added that the project would “ … provide neighborhood-serving childcare services, reactivate the theater use and increase the city’s housing supply by constructing market-rate and below-market-rate units on one of the city’s most transit-intensive streets.”
On Feb. 3, some on the board tried to override the veto—essentially voting on whether to correct the 20-foot error. This time, Alioto-Pier (D. 2) Chu (D. 4), Dufty (D. 8), and Elsbernd (D. 7) stayed with the mayor. Seven others voted to correct the mistake, but that was too few to override the veto.
At least one supervisor defended his decision to support the mayor in overriding the correction. “Eighty-five feet may be more appropriate and may not. This project has numerous approvals to go through over the next few years, at which the height can be lowered, ” said District 7 Supervisor Elsbernd.
Supervisors who criticized the board’s inability to override the mayor’s veto attributed Murad’s success to his fundraising capabilities.
Supervisor Chris Daly wrote in the FogCityJournal blog that Murad hosted Newsom’s New Year’s Eve fundraiser at Medjool and “took in a stunning $76,416 on that all-important last day of the filing period!”
And Daly was not alone in his dismay. “When you talk about the future of the very large portion of the city, I am quite surprised that we have decided to go down the road of engaging in urban planning of San Francisco by way of a veto,” said Supervisor Campos, who represents District 9, which includes the Mission.
Nick Pagoulatos, the coordinator of Mission Anti-Displacement Coalition, added: “There is no rational justification for what the supervisor did, other than the fact that they are supporting the mayor and doing something that only serves to give benefit to the developer who contributed money to the mayor’s campaign.”
Jim Hurley, a real estate broker at Vanguard Properties at 2501 Mission St., said it is far too early to say whether Murad would benefit. “It might be profitable. You know the truth is it is hard to say anybody can make any money,” Hurley said, explaining that the project had yet to get financing and would take seven years to complete.
Emma Brown and Lydia Chávez contributed to this article.
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