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103 6 The Redevelopment Agency Flounders Delays caused by TOOR’s successful lawsuit and Justin Herman’s obvious intransigence in the face of this legal obstacle began to implant grave doubts at city hall about the Redevelopment Agency’s handling of the YBC project , doubts furthered by Thomas Mellon, the City’s chief administrative of- ficer (CAO). In early 1971, Mellon suddenly announced possible illegalities and conflicts of interest in the agency’s proposed public facilities financing plan and serious defects in the convention center design. What ensued was a struggle that in a few months removed power over the YBC public facilities development from the agency and placed it in the hands of city hall and its convention industry supporters. A Palace Revolt Thomas Mellon’s job as chief administrative officer, as well as his personal stature among local business and political figures, put him right at the heart of the growing YBC controversy. (According to the March 23, 1973, San Francisco Progress, his “mandatory retirement was waived . . . to allow him to see the Yerba Buena Convention Center through.”) The CAO’s role was to serve as grand coordinator for the City’s administrative and bureaucratic apparatus. It was an extremely powerful, politically independent post, which until 1978 in effect carried life tenure. (Voters in 1977 changed the term to ten years; a 1996 voter-approved City Charter change abolished the position and recreated it as city administrator, part of the mayor’s office.) Mellon , appointed by Mayor Shelley in 1963, was a successful businessman and former head of the Chamber of Commerce and the Police Commission. He 104 / Chapter 6 was known as an extremely hard worker, served on innumerable civic and governmental bodies, knew everyone of influence in the city, and had wellhoned abilities to wheel and deal. He also was responsible for annually allocating the half of the hotel tax receipts (then amounting to more than $2 million) assigned to the City’s Publicity and Advertising Fund, a fund termed “the last pot of sugar in San Francisco politics.” In short, he was in many ways more influential than the mayor.Allan Jacobs, who as city planning director (1967–74) experienced Mellon closely, described him as “day in, day out, the most powerful person in San Francisco government.”1 Mellon’s intervention in YBC began shortly after the agency announced its developer for the Central Blocks,and was triggered by the Hotel Employers Association (HEA) and the Convention &Visitors Bureau.Both groups were worried about possible delays in building the convention facility, given the overbuilding of new luxury hotels in the city and the resulting excess of vacant rooms.They were also eager to have a superior design better able to compete with other new centers around the country. Richard Swig had himself appointed head of a joint committee formed by the HEA and CVB to review plans for the center.When the agency showed them the detailed plans for the convention hall, Swig’s group raised a great hue and cry over the design, objecting to the idea of an underground facility and to many specific design features ,including inadequate ceiling heights,insufficient distance between supporting pillars,and too few meeting rooms.Swig and the hotelmen took their complaints directly to MayorAlioto,who agreed there were real design problems .Alioto realized his powerful hotel and convention supporters had to be pacified and assigned Mellon to arbitrate the dispute. After a series of discussions convened by Mellon, the Swig group agreed to accept an underground facility (since moving it aboveground would cause serious additional delays) in exchange for an agreement to meet their other design objections. This was all done through city hall,completely bypassing Justin Herman and his developers, a move that antagonized Herman considerably. The Swigs’ role in financing Alioto’s 1967 election, to be repeated in his successful 1971 reelection campaign, gave Richard Swig more leverage at city hall than he could have had with Herman and the Redevelopment Agency. More serious intervention on Mellon’s part was his publicly voiced criticism of the agency’s original plan for financing the YBC public facilities. The agency plan was an amalgam of political and economic considerations. The goal was to put together a scheme that would provide the most rapid, flexible, and politically acceptable method of raising funds and exercising control over their use. Albert Schlesinger’s plan, developed originally for the Dillingham Corporation and later...

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