Teng resigns suddenly

SF Assessor Mabel Teng quit suddenly yesterday. A couple of years ago, I would have reacted to this news with a yawn, and rolled over and gone back to sleep. I mean, Assessor, who cares about the Assessor?

Maybe it's just that I have become a huge politics geek, but I've started to see how the Assessor matters. It is a major point of pressure for the city's big property owners to try to reduce the taxes they owe. Chris Daly provides us with an example:

The ballpark has fueled significant growth in South Beach and adjacent neighborhoods. Restaurants and bars catering to the crowds have sprung up almost as quickly as the condos "from the $700’s". Land values around the ballpark have skyrocketed. And yet, somehow, the owners of our beloved Giants are claiming this week at the Assessment Appeals Board that the stadium lost 40% of its value in its first 8 months of operation… as if Pac Bell Park was a car driven off the lot. It’s the baseball equivalent of stealing home on us.

Unfortunately for McGowan and friends, that’s not how real estate works. In San Francisco, real estate doesn’t do anything but go up. Even with the '89 quake and economic downturn, real estate was back up within a few years.

According to the Giants, the ballpark cost $319 million to build. Adjusting for the inflation of land, the Assessor’s office valued the ballpark at $331M in 2001, $337M in 2002 and $344M in 2003. In each of these years, the Giants Corporation claim the ballpark was only worth $200M.

Clearly, the property tax on $344 million is a lot more than the tax on $200 million. That's a clinic that has to close, or a bus line that has to be cut or a couple of bike races that can't be subsidized.

Mabel Teng, for all her problems, has not been shy about drawing the connections between big property owners clamoring for a giveaway and the city's budget problems. As the Guardian noted:

In response to Mayor Gavin Newsom’s call for city executives, departments, and unions to take voluntary cuts to help the city deal with the budget crisis, San Francisco Assessor-Recorder Mabel Teng stepped up in support of city progressives who believe that San Francisco’s wealthiest businesses and property owners should make sacrifices as well.

While the city is facing a deficit of nearly $300 million, the owners of the Bank of America building and about 200 others among San Francisco’s biggest commercial property owners are appealing for property tax refunds that would cost the resource-starved city nearly $100 million in potential revenues.

Teng called on property owners whose properties are worth $50 million and up to rescind their appeals for tax refunds.

“This money may make little difference to these companies’ bottom lines or their CEO salaries, but have huge impacts on city programs,” Teng said. “I ask these companies to take personal responsibility for the city’s welfare during these lean budget times.”

According to the Assessment Board of Appeals office, in their application to Board, the Shorenstein Company and the Bank of America, joint owners of a 52-story tower, claim their building was worth $320 million in 2002 – that’s $280 million less than what it was worth when the company purchased the building for $500 million in 1985. According to the Assessor’s office, the current value of the building for 2002 and 2003 is twice that estimate – $700 million, which equals about $4.2 million in property taxes for the city’s starved budget.

This is why the Assessor's office is important. We'll have to see who Gavin appoints, but the hotel strike notwithstanding, he has not made a practice of defying big businesses.

Whoever the next assessor is, we'll have to keep pressure on her or him to make sure that s/he does not cave in to the demands of the city's wealthiest landowners. Property tax revenue is crucial for San Franciscans' well-being, and we can't let some appointed functionary give away our city's future.

An additional thought: Teng will be staying in office for a month. Given the cloud she is under, it would not surprise me if she ended up cutting some deals. We'll have to keep a close eye on her office to make sure there are no shenanigans in her lame-duck month.