AFL-CIO HOUSING INVESTMENT TRUST TO PROVIDE $33 MILLION IN FINANCING FOR ARC LIGHT CO. IN SAN FRANCISCO

South Beach Apartment Project will be Union Built and Financed

San Francisco – The AFL-CIO Housing Investment Trust (HIT) has announced a $33 million commitment of union pension capital to finance the Arc Light Co. project, a development that will create much needed in-town rental apartments.  The project will convert an historic commercial building in the South Beach neighborhood into an innovative multifamily development.

The development project will transform the former Arc Light Company Station into a five-story structure with 94 housing units, 20% of which will be reserved for low-income households. It will include an underground parking facility, more than 4,400 square feet of retail space and a children’s day care center.  With its many green features, Arc Light is expected to become San Francisco’s first LEED Gold-Certified residential project.

“The HIT’s investment in the Arc Light project will bring much needed housing, while creating family-supporting jobs as San Francisco recovers from its worst recession in generations,” said Stephanie H. Wiggins, who is HIT’s Chief Investment Officer- Multifamily Finance.  “It shows that prudent investment of union pension funds is a force for positive change in the lives of union workers, their families, and their communities.”

The project is expected to create an estimated 270 union construction jobs in a city where the construction industry has been especially hard hit by the economic downturn.   All on-site construction work at the $48 million development will be performed under collective bargaining agreements with local building and construction trades unions.  The jobs created by the Arc Light project move the HIT closer to its goal of creating 10,000 union construction jobs to help combat high unemployment and support economic recovery in communities around the country.  The HIT is more than two-thirds of the way to its goal and expects to surpass 10,000 jobs nationwide by the spring of 2011.

“We’re very pleased to be part of San Francisco’s drive to create new housing opportunities in neighborhoods like South Beach,” said Liz Diamond, the HIT Investment Officer who heads its Western Regional office. “This project exemplifies South Beach’s continuing transition from a largely industrial area to a more residential-oriented community.”

The HIT was an early investor in the revitalization of the South Beach neighborhood with its 1997 commitment of $42 million for One Embarcadero South, located a few blocks from the Arc Light Co. site.

The HIT worked closely with CB Richard Ellis (CBRE), the world’s largest real estate services firm, to put together a creative financing package for the Arc Light project.  CBRE utilized HUD’s Section 221(d)(4) mortgage insurance to help fund the construction and permanent loans. The loan provided the credit enhancement for a tax-exempt bond that allowed the project to be eligible for low-income housing tax credits. The HIT purchased tax-exempt bonds collateralized by Ginnie Mae mortgage-backed securities (MBS) issued by CBRE.  Merchant Capital served as the bond underwriter.

Arc Light Co. is being developed by Martin Building Company of San Francisco, a multi-disciplinary design and development firm with special expertise in historic preservation and neighborhood-oriented urban infill development.  Architectural design services were provided by HKS, Inc., and the general contractor is James E. Roberts-Obayashi.

The Arc Light building was originally constructed in 1888 and has been used for various industrial and commercial purposes.

About the HIT
The AFL-CIO Housing Investment Trust is a fixed-income investment company registered with the Securities and Exchange Commission. It manages nearly $3.9 billion in assets for 350 investors, which include union and public employee pension plans. Forty-four of these investors are in California. The HIT invests primarily in government and agency insured and guaranteed multifamily and single family mortgage-backed securities.  The HIT is one of the earliest and most successful practitioners of socially responsible, economically targeted investing, with a 45-year track record that demonstrates the added value derived from union-friendly investments.  The investment objective of the HIT is to provide competitive returns for its investors and to promote the collateral objectives of constructing affordable housing and generating employment for union members in the construction trades and related industries.  Since its inception, the HIT has invested $5.8 billion to finance 95,000 units of housing nationwide, generating approximately 64,000 union jobs.

Last night’s debate clearly showed what type of California we would see if Meg Whitman was elected Governor. Jobs would be cut and outsourced; state services would be slashed; and, implementation of tax cuts to the wealthy would be the major goals of a Whitman administration.
Attorney General Jerry Brown clearly distinguished himself by showing that his experience and lifelong dedication to public service is exactly what working families need to turn California around. He spoke like a leader and demonstrated his hands on approach to governence.

Jerry Brown was a stark contrast to Whitman’s partisanship to Wall Street special interests, her complete inexperience with any type of governence (she doesn’t even vote!), and her history of cutting jobs.

Clearly working men and women need a Governor who has the experience and track record to create jobs. We  don’t need a Goldman Sachs-type of Executive who got us into this financial mess in the first place. We need to go forward, not backward. We need Jerry Brown as Governor.

The other day I was invited to a small conference in San Francisco’s financial district hosted by the Lennar Corporation. We gathered to discuss the Labor Council’s groundbreaking community benefits agreement (CBA) with Lennar and the San Francisco Redevelopment Agency which will renovate and invigorate the depressed Hunters Point shipyard neighborhood. This area of southeastern San Francisco has been neglected in so many ways in the 30 years since the shipyard’s closing, until the Board of Supervisors finally passed a historic development plan late last year.

I was joined by a dozen leaders including San Francisco Mayor Ed Lee, new Oakland City Administrator, Deana Santana (Mayor Jean Quan was tied up in Oakland), Alameda Mayor Marie Gilmore, as well as representatives from Senator Feinstein’s and Leader Pelosi’s offices, among others. We spent an intense two hours discussing our project in the context of future American urban development and revitalization of a fractured modern international economy.

Associates of the Brookings Institute, a moderate but innovative think tank based in Washington, DC, came to San Francisco to learn more about this redevelopment, praise this historic urban plan, and listen to our assessment of how this is one of the best ways that San Francisco can call on community, labor, government, and planners to work together to move American urban re-growth into the 21st century. The Brookings researchers had just completed a tour of the shipyard and Conny Ford, a Vice President of the Council, and Mike Theriault, the head of our Building and Construction Trades Council, joined me, city planners and other development leaders in a discussion.

Brookings Institute analyst Bruce Katz, who worked for HUD in the Clinton administration under former San Antonio Mayor Henry Cisneros, made some observations about current urban development. Katz worked with Roberta Achtenberg, now a senior policy advisor to Lennar, who arranged the meeting. (Achtenberg, a former San Francisco Supervisor and famous for taking on the attacks from Senator Jesse Helms who challenged her credentials when Clinton nominated her as Assistant Secretary of Housing “because she’s a damn lesbian,” is a hero to many of us.)

Discussion centered on best practices for American revitalization. Some of the points Katz touched on were:

• Green economy is still minor in this country. We have made little progress despite California’s leading legislation to move our agenda to less emissions and cleaner building. He was excited to see that Lennar has many new green tools in their plans.
• It was wonderful that San Francisco community and labor organizations have pushed this plan to include good jobs and good benefits and labor rights.

He then gave his own thoughts on our 200 years-old history by stating that America, despite its massive land size, is driven by urban economies. He highlighted that some of the original American Federalist debate regarding Alexander Hamilton’s manufacturing principals vs. Jefferson’s agrarian roots are still in play—national government policy vs. states rights. He laughed when noting that the new Tea Party folks still pretend like we survive by cottage values. He said that despite our tremendous geographical size, including agricultural land, the American economy is dominated and driven by the 100 or so of our urban areas surrounded by the original travel routes (rivers and lakes) and our two major coasts—the areas that dominate our industries. He gave an example of how Paterson, N.J. became one of America’s first manufacturing centers due to its water falls that early American industries tapped and, though stagnant now, there’s a plan in place where Chinese capitol (sic) might invest in a new manufacturing enterprise with us. They might have to bring a few Chinese workers to train Americans but… Sound familiar? “The reverse of NAFTA might be happening if we are smart.”

Katz emphasized (on the side of Hamilton) that we ultimately need a national framework for economic policy as opposed to a decentralized states rights impediment, though he admitted that local projects like Hunters Point will serve as models for how investment dollars are spent.

Katz ended with a few remarks that included:
•    We are a country of bad habits.
•    Our politics don’t reflect our metropolitan economy.
•    We need to retool our investment priorities; e.g. China is investing everywhere.

My impression is that that the Brookings Institute is driven by business needs and really doesn’t reflect a good jobs agenda. Not intentionally, but, like SPUR, they don’t get that far into the details of living wage jobs and workers’ rights but are intelligently up in the Ivory Tower. But they do recognize a good urban strategy like our shipyard plan when they see it.

Last week, before this Memorial Day weekend, (where we still fight to extricate ourselves from wars in Afghanistan and Iraq) was full of activity at the Labor Council.

We started last week with a press conference that featured the Labor Council’s Public Employee Committee, Mayor Ed Lee, financier Warren Hellman, and most of the Board of Supervisors, to announce the introduction of a charter amendment for pension revisions that will save city services and jobs.

I am proud of the city workers and San Franciscans who crafted this ballot measure. While governors and mayors in Wisconsin, San Jose, New Jersey, Costa Mesa, and Ohio, unilaterally decide to demonize the workers who maintain our streets, clinics, firehouses and public safety—here in San Francisco the entire fabric of government, unions, and business found a way to craft a solution to the financial hole we have found ourselves in because of the very avoidable missteps on Wall Street.

We are still assessing our Mayoral Forum from a couple weeks ago where we interviewed 7 of the 35 plus candidates who are competing in the November election. All 7 have been endorsed by labor for one position or another over the last 10 years which makes the ability of the Labor Council to endorse rather challenging. I want to remind everyone, including the candidates who complained about our long questionnaire, that the San Francisco Labor Council endorsement for any candidate is based on multiple issues—not personalities or a singular vote. We represent many industries for workers and we have an endorsement process that ultimately needs 2/3 of our representatives to agree on an endorsement.

Josie Camacho, my colleague and new Secretary-Treasurer of the Alameda County Central Labor Council, also visited our office to catch up on organizing and collective bargaining campaigns. Josie also introduced me to the new Executive Director of APALA, Gregory Cendana, who flew out from DC. Greg is young, gay, and Filipino-American and will bring great energy to the Movement. The Asian Pacific American Labor Alliance, one of the seven constituency groups affiliated with the AFL-CIO, is holding their national convention in Oakland this July. (SF next time!)

Thank you to those who supported Local 2 at the Intercontinental Hotel last Wednesday.

We want to acknowledge the unions who came to San Francisco for their conventions recently. It was a pleasure to address the International Bakers Union which stayed at the Hilton in Chinatown and I want to thank F.X. Crowley from Local 16 for making me get up extra early on Saturday morning to welcome the IATSE delegation to the Fairmont hotel.

For those of you who have still not bought tickets to our June 9th fundraiser to please get your final commitment to Emily. (We still need to order enough wine…)

Memorial Day is supposed to be Day 1 of summer. So as summer approaches I wish that my brothers and sisters in the building trades start to get more work hours—but when you do don’t forget to stay active in your union.

And I hope that those who actually get a hiatus from work—like our teachers—take this time to continue their activism to make sure that your union is still the one place where you have a voice at work.

Go Giants!

Tim Paulson is the executive director of the San Francisco Labor Council, an organization representing over 100 local unions with a membership of over 100,000 working men and women in San Francisco.

On Friday evening after sitting for hours of public sector pension negotiations at City Hall, I stopped by the Building Trade Council’s political fundraiser at the Intercontinental Hotel. As usual the food was great and the casino night theme kept everyone in a good mood. The Council honored its President, Larry Mazzola, Business Manager of Plumbers Union Local 38. Larry is also a Vice-President of the Labor Council. Larry was one of the most respected construction trade leaders when I first worked as a business representative for Bricklayers and Tilelayers Local 3 in the early 1990’s. He was there whenever I needed advice on how to best represent our members and he still brings good counsel over 20 years later. Thanks for your support over the years, Larry Mazzola. (Photo of award at casino nite.)

At the same time, over in Oakland, my colleague Sharon Cornu was being honored by the Alameda County Central Labor Council for her years serving as political director and executive secretary-treasurer. Sharon and I both started working for Labor Councils as political directors almost 10 years ago – me in San Mateo county and she in Alameda – before we were elected officers of the Labor Council. So we have spent many hours strategizing over elections and organizing campaigns. I wish her well as Deputy Mayor in Jean Quans Administration. (photo of Sharon and I at antiwar rally)

And speaking of Oakland I can’t say that I’m too displeased with the way the Giants dismantled the A’s this weekend….

And this is a good time to announce that we will be hosting “Union Night at the Ballpark” again on Monday, August 8. Email Emily for tickets.

I also want to remind everyone that our political fundraiser is coming in less than two weeks (June 9th!) and table reservations are coming in a bit slowly. We know that times are difficult but we will still be busy this coming November. Again, we are honoring Fiona Ma for her 100% voting record in 2010 as well as our brothers and sisters who came out in November to defeat Measure B. Check out all the details here.

And don’t forget Local 2’s action at the Intercontinental on Wednesday from 7 AM to 7 PM.

Go Sharks!

Tim Paulson is the executive director of the San Francisco Labor Council, an organization representing over 100 local unions with a membership of over 100,000 working men and women in San Francisco.