Sydney Johnson [00:01:35] A few different things come to mind. He’s definitely trying to balance, at least publicly, both changing this whole, you know, the city is in a doom loop narrative, while being honest about issues that he sees like street homelessness and outdoor drug use. Behind the camera, though, you know, he’s really promoting the private sector enormously as part of this downtown revitalization. As you’ll probably recall, Ericka, we’ve talked about before, Lurie is an heir to the Levi Strauss fortune, and he started a major philanthropy organization called the Tipping Point Community. And it’s no secret, actually an explicit part of his transition plan, to make public-private partnerships and business alliances help restore trust and fill vacant storefronts downtown and to fund things like shelter beds that the city needs.
Ericka Cruz Guevarra [00:02:42] And recently, Lurie announced the Downtown Development Corporation or DDC, what is that set up to do exactly?
Sydney Johnson [00:02:50] Yeah, the DDC is a private nonprofit group and their main north star is to raise money from wealthy people to revitalize the city’s central business core. Members of the group include Meg Whitman, who’s the former CEO of eBay and Hewlett-Packard. Crypto billionaire Chris Larson, also Bob Fisher of the Gap Retail Company. And so this group is focused on raising large amounts of money for anything from beautification, you know, restaurant outdoor seating, planting trees, to potentially even housing projects.
Ericka Cruz Guevarra [00:03:36] And it’s not just downtown revitalization being funded in this sort of way, right, Sydney?
Sydney Johnson [00:03:47] Just last week, Lurie announced a new fund as part of his, quote, “Breaking the Cycle” program, which is targeting largely street homelessness.
Daniel Lurie [00:03:57] Today I am proud to launch the Breaking the Cycle Fund. A novel public-private partnership that will help us accelerate the work of expanding interim housing.
Sydney Johnson [00:04:09] So this is a public fund that the city can use to raise private dollars for things like building shelter to get people off the street quicker. Even though this Breaking the Cycle fund is not part of the DDC, there are some similar goals, you know, in terms of wanting to have sort of the optics of homelessness change really fast.
Daniel Lurie [00:04:34] The people of this city have given us a clear mandate. To create a safe, clean and thriving San Francisco. That begins with clean and safe streets.
Sydney Johnson [00:04:47] So when Lurie announced the Breaking the Cycle fund, he said that the group had already raised more than $37 million, and that came from groups like the Charles and Helen Schwab Foundation. A group called Crankstart, which was founded by Michael Moritz, who you’ll recall is a billionaire who’s very much involved in San Francisco politics. Also, Lurie’s own nonprofit, the Tipping Point Community contributed $11 million to that fund. That was the largest donation in this initial kind of announcement.
Ericka Cruz Guevarra [00:05:20] What does Lurie say about why he is doing this this way, like what is the rationale behind tapping san Francisco’s super wealthy elite?
Sydney Johnson [00:05:31] Lurie is staring down a massive budget deficit that could balloon even larger if federal funds are withheld from San Francisco as well.
Daniel Lurie [00:05:43] We can no longer invest in the same solutions and expect different outcomes. Our system and services must become more effective. And the opportunity to invest in private resources for public good must deliver tangible results.
Sydney Johnson [00:06:02] Supporters of this model say, you know, the city desperately needs money injected into these kinds of efforts and services and that the business community should step up.
David Stiepleman [00:06:17] The DDC is going to be a helper. It’s going to raise money in order to supplement those plans and go and execute those plans.
Sydney Johnson [00:06:26] I spoke with David Stiepelman, who is the chief organizer behind the DDC. He’s also co-president of Sixth Street, which is an investment firm.
David Stiepleman [00:06:37] We’ll plant trees, we’ll do some greening, we will help restaurants with outdoor seating and figuring that out.
Sydney Johnson [00:06:44] He said that this is really going to be used to quickly get some things moving. And I think that there, as we saw in this last election cycle, was frustration from a lot of voters over, you know, this sluggish recovery downtown. So folks like Stiepleman are saying that, you know, they can raise some of these monies and actually start to make some changes that voters will see in their day-to-day commutes and walks to school and whatever it may be.
David Stiepleman [00:07:16] If we’ve done our job correctly, this becomes a sustained generational kind of effort. And I think eventually that has to be something that’s generated from public funds, but in the meantime we’re gonna get a going with the substantial private capital base to make sure that downtown is vibrant and resilient and is you know, re-imagined.
Ericka Cruz Guevarra [00:07:47] What is new about this approach? Is this a unique way of addressing the city’s problems?
Sydney Johnson [00:07:54] Yeah, I think that’s a great question because it’s not like private money has never been a part of politics. It certainly has and it certainly has here in San Francisco. What is new is that we have a mayor who ra the most expensive mayoral campaign in the city’s history, largely funded through his own wealth. And we’re seeing his connections to the business class, to philanthropy, to technology really come with him to City Hall in some very direct relationship building and direct fundraising from his connections in tech and business and real estate.
Ericka Cruz Guevarra [00:08:53] What kind of authority do the people in charge of these funds actually have? Are they deciding how this money is then used to beautify downtown?
Sydney Johnson [00:09:06] It’s a little vague, and that’s partly because some of the actual projects and things that they’re going to be doing are somewhat vague still. We don’t know. You know, so it depends, like if there’s, you know, potential housing or shelter project that they’re funding, that is something that would need to go through City Hall you know, likely pass certain approvals. There are still some guardrails. But it is somewhat vague also when you consider that people who are putting a lot of money towards these things are probably gonna care where it goes to, so even if there’s not a memo attached to the check you know, it’s likely that there’s some sort of conversation and there’s convincing that needs to be done to get people to open up their pockets.
Ericka Cruz Guevarra [00:09:51] Yeah, I mean, it sounds like this public-private approach is normal, but perhaps the scale of it and the embrace of it is what is maybe different. I mean, is anyone concerned about this approach of of tapping san Francisco’s wealthy elite to solve these problems?
Sydney Johnson [00:10:13] Absolutely.
Sean McMorris [00:10:15] It’s not that it’s not a worthy cause, but it always raises the issue of purchasing Influence.
Sydney Johnson [00:10:21] I spoke with Sean McMorris, who follows money in politics for a nonprofit called Common Cause.
Sean McMorris [00:10:28] I’m sure the people who are going to, he’s going to be soliciting, are probably pretty well healed and probably have their own interests within the city.
Sydney Johnson [00:10:38] We are definitely seeing a real close alliance between the mayor and the city’s wealthy elite class. And that alone, I think, concerns plenty of people. Sean McMorris also talked about this.
Sean McMorris [00:10:55] It’s kind of this game that gets played where the politicians know the people who have the special interests and they reach out to those people. And in return, those people understand that, I do a good thing here, I’m going to be putting myself in good stead with the mayor you know when certain issues come before us or those people are looking for contracts or they’re looking for zone tax change amendments or they’re just looking for certain things that might benefit them individually.
Sydney Johnson [00:11:28] Another concern that I’ve heard from folks across the political spectrum is you know, what happens when private investment dries up? Or when private donors are not as generous, are not willing to give? Even if you agree and understand that the city needs money right now to function and pay its employees and provide the services that it does, the question of sustainability comes up if that’s not coming through tax revenues.
Ericka Cruz Guevarra [00:12:04] And I mean, do we know anything about whether some of the people that Lurie is tapping to fund the Downtown Redevelopment Fund, or this homelessness fund, if they do, in fact, have any sort of political agendas ?
Sydney Johnson [00:12:21] One that gets mentioned a lot in the media is Chris Larson. He was the founder of Ripple, which is a major cryptocurrency company. And he, for a long time, has been very involved in the city’s politics, has put a lot of money into different candidates and ballot measures. And yeah, I think that it’s fair to say that folks who are, you know, using their money in order to get certain ballot measures passed or get certain candidates elected have interests that go beyond just goodwill of the city.
Ericka Cruz Guevarra [00:13:01] Well, Sydney, what is, I guess, the timeline here with these funds? What’s next, and when will we actually see these funds, I guess, turning into actual action like, are changes to downtown or are shelters being built?
Sydney Johnson [00:13:18] Yeah, for the DDC. In particular, it’s a little vague still. In terms of the Breaking the Cycle Fund, some of that money is already being put to use. Like I mentioned before, the Tipping Point’s, $11 million donation is being used for family homelessness prevention. The city announced that it is going to open over 70 new behavioral healthcare beds and so that is slowly starting to take shape already as well.
Ericka Cruz Guevarra [00:13:54] And I guess what are you going to be watching for moving forward with these two funds?
