Oh San Francisco, Poor San Francisco : As Businesses Flee and Homelessness Increases, the City by the Bay Finds It Can’t Get By on Charm Alone

IN THE PIANO LOUNGES OF THE GRAND HOTELS PERCHED like sentries atop Nob Hill, “I Left My Heart in San Francisco” can still work its magic on a roomful of tourists. For a few luminous moments, every journeyman lounge lizard becomes Tony Bennett. Couples squeeze hands and exchange meaningful glances. The city high on a hill calls to everyone, shimmering like a splendid jewel.

Then, too soon, the song is over. Tony turns back into the middle-aged guy with the bad hair weave and the day job in telemarketing. And the shimmering jewel, when the lights finally come up, looks suspiciously like cubic zirconia.

These days, tourists may be the only ones leaving their hearts in San Francisco. Many residents are finding their spleen to be the more useful organ for living in the city. Like a thick fog rolling into the bay, a civic malaise has crept over San Francisco, propelled by an almost unanimous feeling that the city isn’t as great--or even as livable--as it once was. It’s great having the wonders of the Bay Area right at your doorstep, but sometimes you can’t help feeling like a chump for insisting on living in the 46-square-mile patch called San Francisco. By most yardsticks, San Francisco doesn’t work as well as it did even a few years ago. High housing costs and burdensome taxes are squeezing out the middle class and making staying in the city a loser’s game for many. Major employers such as Wells Fargo, Chevron and Levi Strauss have moved thousands of jobs out of the city. Even the once unassailable physical charms of San Francisco are under siege. Tumbleweeds of garbage blow through some city streets, particularly downtown. Many buses and street signs are covered in graffiti. The city’s homeless problem is among the worst in the country.

Herb Caen, the San Francisco Chronicle columnist who has built a career on complaining that his beloved city isn’t as great as it once was, now seems to have plenty of company. “Nobody loves us anymore,” Caen whined in print recently. San Francisco “has grown old disgracefully, from raving beauty to crone. Los Angeles is so far ahead of us, it’s outta sight.” A poll conducted for the San Francisco Examiner in December confirmed the notion that the shimmering jewel has lost its luster: 55% agreed with the blasphemous assertion that San Francisco is not as great as it once was, a startling development in a town that wrote the book on smug provincialism. The poll also found that more than 60% of the respondents believed that local problems are similar to those of other large cities. In other words, San Francisco is not as great as it once was precisely because it’s begun to resemble other cities.

To be sure, San Francisco is no Detroit. It remains, in fact, one of the richest, safest and cleanest of American cities. During the 1980s, crime was essentially flat even as the place grew by 50,000 residents, to 724,000.

But most of the economic news has been bad. From 1980 to 1989, employment in the city grew by only 16,000 jobs. Employment in the surrounding suburbs grew much faster, thanks partly to job flight from the city. And San Francisco ranks last among major U.S. cities in one of the most fundamental quality-of-life categories: housing affordability. According to a National Assn. of Home Builders survey, only 9.2% of the city’s households can afford to buy a house.

Of course, that’s partly because San Francisco is such a desirable place to live. But another reason is the city’s fervent crusade against change. Like all such crusades, this one has been quixotic, yielding mainly a lesson in the futility of a community trying to preserve itself in amber, fretting over whether to change, rather than how.

Worried by the creeping “Manhattanization” of downtown, San Francisco voters in 1986 decided to limit new commercial construction to 750,000 square feet annually, about the size of a single 30-story building. The measure, one of the most restrictive in the country, was too late to prevent the most egregious downtown monoliths, and now the recession has imposed its own curb on growth. A greater danger than Manhattanization these days is that the city will come to share the fate of Venice and New Orleans as a charming, doddering irrelevancy, an urban museum, and of course, a favorite tourist destination.

Indeed, San Francisco is no longer in a class by itself. It’s evident in the way loyal natives defend the place: “Well, at least it’s better than living in (name of city you’d never want to live in).” In the past, San Franciscans thought it ridiculous to compare their city with any other; now they seem almost eager to make comparisons, to reassure themselves that things are even worse Out There.

Personally, I like a city with a whiff of decay in the air--it lends a place character. But many San Franciscans refuse to go gentle into that urban night. The notion that San Francisco is in decline was a recurring theme in the city’s recent mayoral race, and was largely responsible for the result. The new mayor, former Police Chief Frank Jordan, swept to an easy victory over incumbent Art Agnos in December chiefly on the promise of returning San Francisco to its past greatness, or maybe even to its past. Jordan never tired of reminding voters that he grew up in the city’s Mission district in the 1940s and ‘50s, and that the city worked much better back then. The streets were cleaner, housing was cheaper, and who knows, maybe even the fog was thinner.

Jordan’s “Back to the Future” platform may have put him in City Hall, but he’s already found that San Francisco’s civic funk is not so easily dispelled. The latest rabbit punch to the city’s spirit was delivered by Bob Lurie, owner of the baseball Giants, who has announced plans to move the team to San Jose--now a larger city than San Francisco--in 1996. The team would be the San Jose Giants, Candlestick Park would become a very windy place to see tractor pulls during the summer and San Francisco would have lost one more claim to being a major-league town.

The Giants’ move isn’t a done deal--San Jose voters still have to approve financing in June. “They’re not the San Jose Giants yet,” says Jordan, who promises to present “new alternatives” to the team if the referendum is turned down. But for many San Franciscans, it’s unsettling that the Giants would pack up and leave just as they abandoned New York for the Promised Land by the bay in 1958. It raises the fear that San Francisco’s recent troubles aren’t temporary setbacks, but the local onset of the same long-term decline that other American cities have struggled with for years, a law of urban life as immutable as gravity. Once the little cable car climbs halfway to the stars and stops in its tracks, the only thing left for it to do is roll back down the hill.

PAT FLANAGAN IS A MEMBER OF AN ENDANGERED SPECIES: a real fisherman on Fisherman’s Wharf. “There’s one question that tourists down here always ask,” Flanagan tells me over an after-work rum and Coke at the Fish Alley Bar and Grill. “You wouldn’t believe how many times I hear this. They come up and ask, ‘Where is Fisherman’s Wharf?’ I have to tell them, ‘This is Fisherman’s Wharf. You’re already on it.’ You should see the look of disappointment on their faces.”

Flanagan shakes his head sadly, not for the tourists, but for what’s become of his beloved wharf, where he’s worked almost all his life. It’s not difficult to see why the tourists wandering through are a bit confused. If this is Fisherman’s Wharf, where are the wharves? And where are all the fishermen?

Running across a real fisherman on the wharf these days is enough to land you in “Ripley’s Believe It or Not!” Well, almost. For that, you’ll have to walk a few blocks down Jefferson Street, past a line of T-shirt stores, souvenir shops, mimes, jugglers, soothsayers, panhandlers and the Guinness Museum of World Records, until you finally hit Ripley’s Believe It or Not! Museum. There aren’t any fishermen in Ripley’s either, but I did find something billed as “The World’s Greatest Fake,” the image of a mermaid from Fiji consisting of a woman’s head and chest “cleverly sewn to a fish’s body.”

The same might be said of Fisherman’s Wharf, a tacky commercial strip cleverly sewn to a fishy concept, now touring as The World’s Greatest Fake. San Francisco certainly isn’t the first city to repackage its past for tourists, but few towns have sold off their history with such a vengeance. From a mercenary standpoint, changing the wharf’s catch of the day from fish to fillet o’ tourist has paid off handsomely. The wharf pulls in more than 10 million visitors a year, helping to make tourism the city’s leading industry.

That’s the case in many large, sophisticated cities. But the changes at Fisherman’s Wharf go to the heart of San Francisco’s uncertainty about its identity and direction. The future must look murky to a city that has lost touch with its past. The old myths are dying, and few have risen to replace them. Nowhere is this more evident than on the wharf, where fishermen feel like strangers.

Flanagan began working on the wharf in 1954, when his father bought Standard Fisheries Corp. Most tourists never see Standard’s building, tucked behind the wharf’s main commercial area in a small cul-de-sac known as Fish Alley. The operation is housed in an old blue-and-white clapboard building that looks like the “before” picture in weatherproofing ads. Work there begins with 4 a.m. preparations for the filleters, who arrive an hour later, after the boats are unloaded.

“In the old days, everyone on the wharf knew everyone else,” the 47-year-old Flanagan recalls. “It was like a family. This bar we’re sitting in now used to be a retail fish market, and it was kind of a nutty place. Everybody said it was run by the Mafia. I remember they used to have a pet monkey, and the monkey was trained to jump down from the rafters and pick the pockets of people who were walking by. When I was a boy, you could sit on the beach at Aquatic Park at lunchtime and watch the girls sunning themselves topless. Boy, I miss those days. And Ghirardelli across the street--that was still a real chocolate factory. Oh, it was great, you could smell chocolate every morning, all over the area.”

Ghirardelli is now a boutique-and-restaurant complex, not exactly a unique sight on the wharf these days. The chocolate works moved to the East Bay suburb of San Leandro, now also the home of Rice-A-Roni, which no one has the heart to rename “The San Leandro Treat.” Flanagan cites the 1968 Ghirardelli conversion as a turning point for the wharf. Since then, owner-operated factories, fisheries and family restaurants have gradually matamorphosed into look-alike retail shops and chain eateries run by absentee owners and aimed at tourists. Pier 39 was added in 1978, and now boasts--if that’s the right word--110 gifty shops designed to separate tourists from their money as quickly as possible.

Nowadays, Fisherman’s Wharf resembles a Hollywood movie set. A garish facade of shops and restaurants fronts a handful of small fishing companies that were the wharf’s original reason for being. Less dramatically, the same scene is being played out all over town. The old San Francisco was a place where factory workers made things, stevedores unloaded ships, cable cars took regular people to work and fishermen ruled Fisherman’s Wharf.

Today, shipping has moved to the East Bay, along with most of the heavy industry; the cable cars have been turned into a photo opportunity for tourists, and the fishermen are virtually invisible. All this was probably inevitable. Meanwhile, though, San Francisco is steadily turning into San Franciscoland, the theme park built as an amazing simulation of the original city.

SAN FRANCISCO’S LOSS OF DIRECTION LEAVES ITS BEWILDERED FOOTPRINTS around nearly every problem it faces. One of the biggest is homelessness. Opinion polls consistently show residents ranking it the city’s No. 1 problem, ahead of the usual urban bell-ringers: crime, education and the local economy. By any measure, San Francisco has one of the most acute and visible homeless problems in the country, with as many as 12,000 souls wandering the streets with no place to live. The city’s 22 homeless shelters are full every night and lately have been turning away more than 6,000 people a month for lack of space.

The number of childless San Franciscans on welfare--usually a good indication of what’s happening at the bottom of a city’s economy--has nearly doubled since 1986, to more than 14,000. Many of those new to the welfare rolls are from out of town. Some are attracted by San Francisco’s reputation for tolerance and relatively generous $340 a month General Assistance stipend, others by the allure of starting over in a city founded by people starting over. Others simply ended up there.

Homelessness is hardly unique to San Francisco, but the city has been uniquely unprepared to forge a consensus on how best to confront it. The problem was thrown into stark relief in the person of Gary Kappes, an unassuming 33-year-old who singlehandedly brought the homeless issue home to the middle-class neighborhood of Noe Valley.

Long one of the city’s more pleasant communities, Noe Valley is nestled in the sunny bosom of Twin Peaks, a pair of hills the Spanish settlers called Los Pechos de la Chola (The Breasts of the Indian Maiden). More recently, such fertility has taken on a decidedly “thirtysomething” caste: The mean streets in Noe Valley these days are the ones without ramped curbs for baby strollers.

Before Kappes arrived in the neighborhood, most Noe Valley residents thought of the homeless in collective terms, as a sad but somewhat amorphous group of shabby overcoats and extended palms. But when he set up shop as full-time panhandler about three years ago, he gave homelessness a name and a face. Kappes doggedly panhandled Noe Valley’s four-block main street from 9 in the morning until 7 in the evening, a full day’s work by anyone’s standards.

Seeing Kappes panhandle, I couldn’t help but admire his technique. He would always have two or three shiny pennies in his cupped hand when he asked for money, storing the quarters and dollars people gave him in his coat pocket. Kappes quickly became as much a neighborhood fixture as the local butcher, if you can imagine a 6-foot-4 butcher with a long, straggly beard, unkempt hair, tattered overcoat and a habit of hitting you up for spare change every time you passed him on the street.

“When Gary started coming around here, I think a lot of people’s hearts went out to him,” says Patti Wood, co-owner of the Wooden Heel shoe-repair shop. “He was a pretty pathetic character, but he was sort of our resident homeless person.”

Until Kappes showed up, Noe Valley rarely had a homeless person in its midst. A monstrous hill separates the neighborhood from the downtown area where many of the city’s destitute congregate, acting as a sort of natural barrier to the indigent. The occasional homeless person who did wander into Noe Valley would usually move on, feeling out of place amid the gourmet coffee shops, yuppie video stores and precious clothing boutiques.

Kappes, on the other hand, was completely comfortable in a middle-class environment, even if he no longer looked the part. Before he slid into homelessness in 1988, Kappes had been a computer programmer and analyst, and was an articulate, if often painfully shy, man. He declined to be interviewed for this article, but in a 1990 interview with the Noe Valley Voice, he revealed a keen interest in world history, and drew a comparison between fallen empires and an America that turned its back on its needy.

“The Roman Empire was a lot like America,” Kappes told the paper. “There are a lot of parallels.”

Around the neighborhood, Kappes’ words prompted an outpouring of sympathy--topped by a frothy dollop of liberal guilt--and led several residents and merchants to offer him help in finding housing and a job. This was San Francisco at its progressive best, attempting to empower the disenfranchised. But Kappes had even more powerful demons to contend with than joblessness and homelessness.

“I was in the parking lot next to the Radio Shack one day last summer when I saw Gary with a belt in his teeth and a needle in his arm,” recounts Wood. “There was a mother with a baby not 10 feet away from him. That’s when I knew I had to do something.”

Kappes, it turned out, had a heroin habit, a biographical detail he had neglected to pass along to the newspaper or those who gave him money. In fact, Kappes had been arrested several times the previous year on drug-paraphernalia charges, and faced having his probation revoked with this latest charge.

When word of Kappes’ drug use got out, many people felt betrayed. A movement sprang up to have him banished from the streets of Noe Valley. Posters went up around the neighborhood showing his stooped figure framed by a large circle with a slash through it--the international symbol for “No Gary.”

More than 20 merchants and residents showed up to testify at a series of probation hearings held to determine Kappes’ fate. Most of the residents who testified thought that he should be removed from their streets and put in prison or a live-in drug-treatment program.

“I had a few sleepless nights after I testified at Gary’s hearing,” says Margaret Daley, a resident in favor of getting Kappes off the streets. “You always think of the karma coming back to you. But I think we were doing it for his own good.”

Several other residents, however, thought only of the bad karma. “It really bothers me that people are criminalizing homelessness,” says Anjali Sandaram, a bookstore employee who testified on Kappes’ behalf. “I never saw Gary with drugs, but if he did use them, he wouldn’t be different than a lot of people with problems and addictions. It’s just that his were out in the open.”

“Noe Valley is a neighborhood that caters to an upper-middle-class clientele, and a homeless person just doesn’t fit in,” concurs Martin Sprouse, another resident who testified in Kappes’ defense. “To the shop owners in the neighborhood, Gary was dirty, and that was bad for business.”

Well, it wouldn’t be San Francisco if a simple community dispute didn’t turn into a major political controversy with karmic implications. But Kappes’ saga in many ways epitomizes San Francisco’s difficulties in grappling with the problem he represents. The homeless don’t fit the venerated victim/oppressor model that San Francisco has been applying to most of the world’s problems for decades. Empowering the disenfranchised is a noble aim, but what if some of the disenfranchised, like Kappes, are too messed up to appreciate the opportunity? Where does Noe Valley’s responsibility end and Gary’s begin?

In 1988, Mayor Agnos, in a flash of San Francisco-style utopianism, made an inaugural pledge “not to rest as long as a single homeless person had to make a bed on the streets of San Francisco,” a promise that soon resulted in hundreds of homeless people setting up a tent city in a park adjacent to City Hall. It wasn’t long before what became known as “Camp Agnos” was too much for even the most liberal sensibilities, and the tent city was unceremoniously dismantled.

Since then, no politician in San Francisco has suggested that compassion alone can solve the homeless problem, the orthodox view just four years ago. New mayor Frank Jordan seems to favor a “tough love” approach, with emphasis on the tough. Early in his campaign, he went so far as to suggest that some homeless be assigned to compulsory work farms outside the city. Jordan has since backed away from that idea.

As for Kappes, a Superior Court judge committed him to a six-month residential drug program outside the city, where he currently resides. One of the conditions is that he is barred from his old Noe Valley territory until his probation expires, which could take three years. For some in the community, the idea of three years without Kappes is a prayer answered.

Others are not so sanguine. Noe Valley may have solved its Gary Kappes problem, but there are plenty of homeless people in San Francisco ready to take his place. And what rough beast, its hour come round at last, slouches toward Noe Valley for spare change?

TWO YEARS AGO, THE 230 employees at Crowley Maritime Corp.’s main office could gaze out their windows and step into one of those six-for-a-dollar postcards of San Francisco. From atop their financial district high-rise, Crowley workers had a breathtaking 360-degree view of the city and the bay, a sumptuous panorama of the Golden Gate and Oakland-Bay bridges, Alcatraz and Treasure islands, the East Bay hills, and in the distance, the mighty Pacific.

“People used to visit our offices and say, ‘Wow, that’s a million-dollar view,’ ” says Dick Simpson, a Crowley vice president. “And we figured it out. That’s exactly how much it was costing us.”

In July, 1990, Crowley took one last look out the window and moved across the bay to Oakland, bringing to a quiet close nearly a century of doing business in San Francisco. Founded there in 1892 by Thomas Crowley, the firm grew into one of the largest maritime companies in the world, with annual revenues of more than $1 billion. In the late 1980s, as Crowley’s profits were being squeezed by deregulation-induced competition and the looming recession, the attention of the accountants fell on those magnificent--and expensive--views from the windows of Crowley World Headquarters.

After pricing office space in San Francisco and throughout the Bay Area, the company settled on a new 10-story building in Oakland near Lake Merritt. The views aren’t nearly as pretty, but the company estimates that the move has saved it about $1 million in rent, taxes and other costs.

“We had a lot of sentimental attachments to San Francisco,” says Simpson. “That’s where our founder was born, that’s where we did business for almost 100 years. But in the end, the decision came down to economics.”

Crowley isn’t the only company to conclude that San Francisco is a nice place to visit, but you wouldn’t want to do business there. The exodus has accelerated during the last few years, fueled by the recession and a general feeling that San Francisco’s government is unsympathetic, if not downright hostile, to business interests.

In an annual poll of chief executive officers conducted last year by Cushman & Wakefield, the real estate firm, San Francisco fell from sixth to 16th place among 32 cities ranked according to their attractiveness as places to do business. (Around the same time, San Francisco was named the No. 1 destination city in the world by the readers of Conde Nast Traveler magazine. Taken together, the two surveys show who gets the better deal in San Francisco nowadays.)

In the CEO poll, San Francisco scored at or near the bottom of the list for office costs, availability of skilled workers and friendliness of government. Some of the cities that ranked ahead--Tampa, Fla.; Norfolk, Va.; San Antonio, Tex.; and Kansas City, Mo.--aren’t the sort of towns San Francisco is used to finishing behind in any competition. But then, the corporate sweepstakes these days favors workhorses like Kansas City over show ponies like San Francisco.

San Francisco’s business taxes--the highest in California--certainly haven’t helped. A San Francisco retailer with a payroll of $170,000 pays about $2,550 a year in payroll taxes, compared to just $226 down the road in San Jose and $128 in the East Bay community of Concord. Even Los Angeles, at $1,388, is cheaper. In good times, plenty of San Francisco companies were willing to cough up the extra money, writing it off as a luxury tax on the nice views. With the recession, fewer have been willing, or able.

The business community finds its relationship with city government even more grating. In short, San Francisco’s businesses feel unloved.

“Many of the people who sit on the Board of Supervisors consider business a necessary evil,” says William Steele, public affairs manager for Chevron Corp. “We don’t appreciate that.”

Chevron has been voting with its feet lately, moving some of its operations from San Francisco into a 143-acre corporate center in the East Bay community of San Ramon. Chevron now has about 2,800 employees in San Francisco, down from 5,500 a decade ago. Steele says some of the company’s dissatisfaction can be traced to a 1986 vote by the Board of Supervisors to stop doing business with companies that do business in South Africa, including Chevron.

As many San Francisco companies have learned in dealing with the board, the city fathers have their own ideas about the way the world works. First of all, don’t call them the city fathers--that’s way too patriarchal. And don’t be surprised when they seem to show more interest in foreign policy than local issues.

Two days before the start of the Persian Gulf War, the board passed a resolution declaring San Francisco a sanctuary for war resisters, prompting the American Petroleum Institute to cancel two conventions, worth about $7 million. Shortly after that, several board members proposed a resolution declaring the city a sanctuary for sexual minorities, which is a little like declaring Los Angeles a sanctuary for automobiles. After a brief but shrill public outcry, the resolution was shelved.

Another year into the recession, there are signs that San Francisco’s stance toward the evils of capitalism is changing. In January, Jordan, who ran on the premise that San Francisco was “not on track,” signaled a new attitude in City Hall by meeting with business leaders and calling for an end to foreign-policy pronouncements by the Board of Supervisors.

“It’s a loss of innocence for San Francisco,” says Bill Maher, one of the more conservative supervisors. “I think the changes in East Europe and the recession have changed the minds of a lot of people around here about business and capitalism. With Eastern Europe going to a market economy, there’s not an egalitarian dreamland out there any more. And the recession has convinced people about the importance of having a real economy.”

But for companies such as Crowley Maritime, it’s too late for San Francisco to dust off the old capitalist welcome mat.

“There’s no doubt about it, San Francisco has a real charm to it,” says Crowley’s Simpson. “But Oakland’s working out very well for us financially. And it’s turned out to be a nice place to work.”

Like so many other companies, Crowley left its heart in San Francisco, but prefers to keep its money at a distance.

BACK AT THE FISH ALLEY BAR and Grill, Pat Flanagan is on his third rum and Coke, excitedly sketching on a cocktail napkin. The talk has turned to the new Seafood Center under reconstruction on Fisherman’s Wharf, a multimillion-dollar city project that would upgrade a couple of old piers.

“Now, this is the pier going down into the water,” Flanagan says, drawing a series of vertical lines extending below a wavy water line. “Now, when an earthquake hits,”--and here Flanagan draws loopy squiggles all over the cocktail napkin--”everything moves back and forth like this and the whole pier just cracks.”

Pier 45 suffered extensive damage in the 1989 quake, prompting planners to build a substantial seismic upgrade into the project. With the soil beneath the pier stabilized by cement grout, the new Pier 45 will be among the most quake-resistant on the waterfront.

“If a really bad earthquake hits, Pier 45 may be the only one left standing,” he says portentously, letting the words sink in. “The fishing boats may be the only way to get into and out of San Francisco. Do you realize what that means?”

It means San Francisco would have to be saved by a humble flotilla of fishing boats on Fisherman’s Wharf, a fantasy that says much about the city’s situation. Flanagan’s heart is in the right place; San Francisco’s best hope does lie in the old values it seems to have so casually rejected.

The problem is, it hasn’t been very good at distinguishing old values from old appearances, substance from sentiment, preservation from paralysis. It may come as news to old-line San Franciscans, but some change is good and necessary. For a city to flourish, it must reinvent itself as the world around it changes, yet retain the values that made it a city in the first place. San Francisco has stubbornly clung to the past, changing in spite of itself, and for the worse.

If the city can finally shed some of its nostalgic self-love--and there are signs that it is doing so already--San Francisco will have it made. At least then visitors won’t think the wharf is the most important place in town.