Speculation Station: Litigation and Incorporation

We speculate on the four lawsuits being discussed in closed session and cover a very interesting item that will likely fly under the radar.

Speculation Station

Speculation Station is a segment we run before every City Council meeting where we speculate as much as we can about what will go in on Closed Session. Closed Session is completely private with a very truncated report given by the City Attorney being the only thing we get. So why not speculate wildly about what’s going on?

Destination: Litigation

So the City is discussing a lot of lawsuits this week, apparently. One case is just anticipated, and I’m not sure if it’s the same one from last time. It’s impossible to know!

They’re also meeting about City of Hayward v. County of Alameda, et al. (Alameda County Superior Court, Case No. 23CV036712). This one is probably about the little girl who was kidnapped and killed because of foul-ups with County Child Services. She was a resident of Hayward and the City isn’t having it. We’ll be seeing this one come up on and off for a long time, I’m sure.

The next one is Mitchell Engineering, Inc. v. City of Hayward (Alameda County Superior Court, Case No. 22CV011334) Mitchell Engineering is a civil contractor based in San Francisco. They apparently do a lot of stuff with different cities, including San Francisco Public Works, and SF Muni. Maybe this has to do with the intersection of Watkins and D where they’re ripping up and re-doing all the corners over again. Goodness knows somebody screwed up there.

And lastly we have Roe v. Montenegro, et al. (Alameda County Superior Court, Case No. 22CV010050) and the City isn’t even a primary defendant in this one, so who knows what’s going on there. Maybe Montenegro was a former employee of the City? Maybe two dudes got into a big-ass fight on City property? Again, impossible to really know.

One day, when I’m able to do this full time, I’ll be up to spending the money to really dig into these, but the Courthouse charges comical fees to get access to detailed documents.

Consent Calendar Items

The Consent Calendar is for items that are deemed “non-controversial” and don’t usually get individualized discussion. Any councilmember (or member of the public) can request to pull an item to discuss it, but discussion is never guaranteed.

Incorporation for Decommodification?

The City is going to start a Public Benefit Corporation with the express purpose of economic development. Now, that could easily be just a way to funnel money into grants for businesses or something, but the details in the staff report show a lot more promise.

They’re going to apply for tax-exempt status, so this may be something you, as a resident, can donate money to and receive a tax rebate. They don’t say they’ll be a 501(c)3 specifically, but I bet they will if they’re allowed as there’s a lot of benefits to it.

But what will they do with that money? I’m so glad you asked.

The staff report outlined 11 different things the Corporation will be doing. Most of them have to do with developing business interests, which is all well and good: combating blight, providing economic opportunities, educational programs, expanding entrepreneurship, all that kind of thing. Very on brand for Economic Development.

But 9 and 10 are particularly interesting:

(9) acquiring, providing, developing, leasing, financing, rehabilitating, owning and operating property in support of the City's economic development goals; (10) acquiring, providing, developing, leasing, financing, rehabilitating, owning and operating decent, safe and sanitary housing affordable to persons and households of low income; [emphasis added]

That’s right, Haywardistes, the City is gonna get into the property development game. Not only are they going to develop commercial property, they’re going to develop affordable housing, too. And, honestly, with the broad goal of “economic development goals” they could make the argument of developing any kind of real estate as it all supports the economy in some way.

This may not seem like a big deal, but the City has no need to turn a profit (they already get taxes), and depending on how the bylaws are written, elected officials could still be in the driver’s seat (which really means we’re in the driver’s seat, so long as we speak up). And if they, for example, buy up vacant property downtown and lease it out at cost in perpetuity, they’re effectively taking it off the speculative market because they don’t care about making a profit.

Get in, loser. We’re decommodifying real estate.

This could be the start of a City flexing its muscles, stepping in, and doing things that are necessary, but the “Market” can’t bear. Staff lays it out in the report:

Whenever the creation of economic opportunities cannot be accomplished by private enterprise alone, without public participation and assistance, it is in the public interest to expend public funds to provide a means by which economic opportunity can be created.

That’s taken the form of tax breaks and loans and other stuff, but why not cut out the middle man and just acquire, develop, and lease property as the City for no profit? That’s directly putting your tax dollars to work for the public good.

There’s no guarantee that’s what form this will take, unfortunately. But we’re excited to see where this goes as this has Big Municipalism Energy going on. We’ll be keeping an eye on it as it develops.