Josh Koehn

<a href="https://sfstandard.com/search/?query=mark%20farrell">Mark Farrell</a>’s last stint as a public official concluded with a victory lap fit for a king.

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<a href="https://sfstandard.com/search/?query=mark%20farrell">Mark Farrell</a>’s last stint as a public official concluded with a victory lap fit for a king.

During his final year as a supervisor, Farrell spent thousands of dollars in campaign donors’ cash to frequent some of San Francisco’s swankiest bars and restaurants, treating money raised for an already-concluded Democratic Party race in a manner that ethics experts likened to a slush fund. Farrell also appears to have used a legal loophole while interim mayor to accept large chunks of money from special interest groups that would have been otherwise barred.

During his final year as a supervisor, Farrell spent thousands of dollars in campaign donors’ cash to frequent some of San Francisco’s swankiest bars and restaurants, treating money raised for an already-concluded Democratic Party race in a manner that ethics experts likened to a slush fund. Farrell also appears to have used a legal loophole while interim mayor to accept large chunks of money from special interest groups that would have been otherwise barred.

The Standard’s investigation into old campaign records filed by Farrell—who is now running to reclaim the Mayor’s Office—found that he used leftover money from a 2016 Democratic County Central Committee (DCCC) campaign to wine and dine unnamed constituents at more than three dozen meetings for meals. After being appointed mayor in early 2018, Farrell continued to tap into the campaign account while also using it to accept thousands of dollars from trash giant Recology and a friend’s restaurant—both of which had business with the city. Farrell then gave out coveted commission appointments to the restaurant owner and a Recology exec who <a href="https://sfstandard.com/2023/12/14/san-francisco-corruption-paul-giusti-sandra-zuniga-sentencing/">pleaded guilty to a bribery scheme</a>.

Why 2 defendants in San Francisco corruption probe avoided prison time

The Standard’s investigation into old campaign records filed by Farrell—who is now running to reclaim the Mayor’s Office—found that he used leftover money from a 2016 Democratic County Central Committee (DCCC) campaign to wine and dine unnamed constituents at more than three dozen meetings for meals. After being appointed mayor in early 2018, Farrell continued to tap into the campaign account while also using it to accept thousands of dollars from trash giant Recology and a friend’s restaurant—both of which had business with the city. Farrell then gave out coveted commission appointments to the restaurant owner and a Recology exec who <a href="https://sfstandard.com/2023/12/14/san-francisco-corruption-paul-giusti-sandra-zuniga-sentencing/">pleaded guilty to a bribery scheme</a>.

Multiple campaign ethics experts contacted for this story said they were surprised by the number of gastronomic outings Farrell took and the opaqueness around who attended, especially given his past ethics issues. In 2016, Farrell paid a record fine of $25,000 after his first supervisor campaign was found to have <a href="https://www.sfgate.com/politics/article/SF-Ethics-Commission-slashes-fine-for-Farrell-9981935.php">illegally coordinated with a committee</a> funded by real estate magnate Thomas Coates and socialite and philanthropist Dede Wilsey.

Multiple campaign ethics experts contacted for this story said they were surprised by the number of gastronomic outings Farrell took and the opaqueness around who attended, especially given his past ethics issues. In 2016, Farrell paid a record fine of $25,000 after his first supervisor campaign was found to have <a href="https://www.sfgate.com/politics/article/SF-Ethics-Commission-slashes-fine-for-Farrell-9981935.php">illegally coordinated with a committee</a> funded by real estate magnate Thomas Coates and socialite and philanthropist Dede Wilsey.

“Given that history, it is rational for the public and the press to scrutinize his record,” said Sean McMorris, an expert on campaign ethics and transparency for California Common Cause. “Who were these people [at the meals]? Was their business campaign-related?”&nbsp;

“Given that history, it is rational for the public and the press to scrutinize his record,” said Sean McMorris, an expert on campaign ethics and transparency for California Common Cause. “Who were these people [at the meals]? Was their business campaign-related?”&nbsp;

Lawmaker spent $75K in campaign cash on 49ers, Giants, Warriors tix

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Several active members of the DCCC told The Standard that leftover campaign funds for a seat on the local party are generally used to help pay off debts to staff, fund travel for Democratic Party functions and pay for civic events and organizations.

Several active members of the DCCC told The Standard that leftover campaign funds for a seat on the local party are generally used to help pay off debts to staff, fund travel for Democratic Party functions and pay for civic events and organizations.

In contrast, from late 2016 through March 2018, Farrell’s DCCC campaign picked up more than $7,400 in tabs for meals and drinks at Spruce, Swig, Bix, Novela, Balboa Cafe, The Beer Hall, Bob’s Steak &amp; Chop House, Izzy’s Steak &amp; Chop House, Fat Angel Food &amp; Libation—the list goes on for more than three-dozen meetings with “DCCC constituents” whom Farrell has declined to identify.&nbsp;

In contrast, from late 2016 through March 2018, Farrell’s DCCC campaign picked up more than $7,400 in tabs for meals and drinks at Spruce, Swig, Bix, Novela, Balboa Cafe, The Beer Hall, Bob’s Steak &amp; Chop House, Izzy’s Steak &amp; Chop House, Fat Angel Food &amp; Libation—the list goes on for more than three-dozen meetings with “DCCC constituents” whom Farrell has declined to identify.&nbsp;

Mayoral candidate Mark Farrell addresses the crowd at the second mayoral debate, held at UC Law in San Francisco on Monday, June 17th, 2024.

<figure class="wp-block-image size-large"><img height="1666" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/06/20240614-secondmayoraldebate-ac-461.jpg?w=2500" alt="A man in a dark suit and white shirt is giving a speech, gesturing with one hand up. A flag is seen in the background, and a presentation slide is partially visible." class="wp-image-284212"/><figcaption class="wp-element-caption">Mark Farrell declined to identify who he met with for more than three dozen meals while using money from his Democratic Party campaign account.</figcaption></figure>

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<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/06/20240614-secondmayoraldebate-ac-461.jpg?w=2500" alt="A man in a dark suit and white shirt is giving a speech, gesturing with one hand up. A flag is seen in the background, and a presentation slide is partially visible." class="wp-image-284212"/><figcaption class="wp-element-caption">Mark Farrell declined to identify who he met with for more than three dozen meals while using money from his Democratic Party campaign account.</figcaption></figure>

Many of the restaurants and bars Farrell frequented have closed since the start of the pandemic, but The Standard obtained an itemized receipt from a $1,511.62 dinner Farrell held at Michelin-starred restaurant The Progress to thank DCCC volunteers. According to the receipt, the dinner occurred the night of Dec. 14, 2017—a year and a half after his DCCC victory and just two days after the death of Mayor Ed Lee, which eventually led to Farrell’s appointment as mayor.

Many of the restaurants and bars Farrell frequented have closed since the start of the pandemic, but The Standard obtained an itemized receipt from a $1,511.62 dinner Farrell held at Michelin-starred restaurant The Progress to thank DCCC volunteers. According to the receipt, the dinner occurred the night of Dec. 14, 2017—a year and a half after his DCCC victory and just two days after the death of Mayor Ed Lee, which eventually led to Farrell’s appointment as mayor.

Items Farrell and company ordered at The Progress included: two bottles of Tassin Champagne; two bottles of heritage blend from Bedrock winery in Sonoma; one bottle of chardonnay from Massican Hyde Vineyard in Napa; eight tasting menus at $78 apiece; two cappuccinos; and one sparkling water. The receipt noted eight meals were served while Farrell’s campaign report said the party featured the candidate and 11 unnamed guests.

Items Farrell and company ordered at The Progress included: two bottles of Tassin Champagne; two bottles of heritage blend from Bedrock winery in Sonoma; one bottle of chardonnay from Massican Hyde Vineyard in Napa; eight tasting menus at $78 apiece; two cappuccinos; and one sparkling water. The receipt noted eight meals were served while Farrell’s campaign report said the party featured the candidate and 11 unnamed guests.

It’s unclear if Farrell was paying for the table or only himself on other occasions, as Farrell began reimbursing himself directly starting with a meal charged on Christmas Eve 2017, according to campaign filings. He did not report the location of almost a third of his expensed meals, which totaled more than $1,900 in charges.

It’s unclear if Farrell was paying for the table or only himself on other occasions, as Farrell began reimbursing himself directly starting with a meal charged on Christmas Eve 2017, according to campaign filings. He did not report the location of almost a third of his expensed meals, which totaled more than $1,900 in charges.

Additional charges for Farrell’s DCCC campaign committee, which had more than $56,000 in remaining funds at the start of 2017, show that he kept the account open to: reimburse his wife, Liz, for $440 in office expenses; purchase more than $1,200 of office supplies from Walgreens in just two purchases; buy more than $1,000 worth of office furniture; and rack up a $195 bill at Bed Bath &amp; Beyond in a transaction inexplicably labeled as a meeting.

Additional charges for Farrell’s DCCC campaign committee, which had more than $56,000 in remaining funds at the start of 2017, show that he kept the account open to: reimburse his wife, Liz, for $440 in office expenses; purchase more than $1,200 of office supplies from Walgreens in just two purchases; buy more than $1,000 worth of office furniture; and rack up a $195 bill at Bed Bath &amp; Beyond in a transaction inexplicably labeled as a meeting.

Farrell’s campaign told The Standard that he did not recall who attended all of the meals and he does not have a calendar documenting the meetings. Farrell’s spokesperson said the furniture was used in his supervisor office.

Farrell’s campaign told The Standard that he did not recall who attended all of the meals and he does not have a calendar documenting the meetings. Farrell’s spokesperson said the furniture was used in his supervisor office.

Mark Farrell, a former San Francisco mayor and supervisor, formally announce his candidacy at the San Francisco Baseball Academy at 3010 Geary Boulevard in San Francisco on Tuesday, Feb. 13, 2024. Mark Farrell will challenge London Breed and other candidates in the November 2024 mayoral election.

<figure class="wp-block-image size-large"><img height="1668" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2024/02/20240205farrellmayor012.jpg?w=2500" alt="Mark Farrell, wearing a suit and tie, smiles at a podium with microphones as his wife holds &quot;Mark Farrell for Mayor&quot; sign behind him." class="wp-image-249204"/><figcaption class="wp-element-caption">Mark Farrell used campaign money to reimburse himself for thousands of dollars worth of meals while also giving his wife, Liz, money for unknown office expenses.</figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2024/02/20240205farrellmayor012.jpg?w=2500" alt="Mark Farrell, wearing a suit and tie, smiles at a podium with microphones as his wife holds &quot;Mark Farrell for Mayor&quot; sign behind him." class="wp-image-249204"/><figcaption class="wp-element-caption">Mark Farrell used campaign money to reimburse himself for thousands of dollars worth of meals while also giving his wife, Liz, money for unknown office expenses.</figcaption></figure>

Farrell’s $1,245 in charges for two Walgreens visits and a $440 reimbursement to his wife were likely for thank-you notes, envelopes, stamps and other supplies, according to campaign officials.

Farrell’s $1,245 in charges for two Walgreens visits and a $440 reimbursement to his wife were likely for thank-you notes, envelopes, stamps and other supplies, according to campaign officials.

“I followed the law around fundraising and spending at all times,” Farrell said in a statement. “All of the fundraising and expenses that I submitted were legitimate, vetted and approved by counsel.”

“I followed the law around fundraising and spending at all times,” Farrell said in a statement. “All of the fundraising and expenses that I submitted were legitimate, vetted and approved by counsel.”

A spokesperson for the state’s Fair Political Practices Commission (FPPC) declined to comment for this story, instead pointing The Standard to state law on campaign funds being used to purchase meals. A local campaign committee can charge up to $200 for food and drinks as long as the charge is reasonably related to a political, legislative or governmental purpose. However, if the charge exceeds $200, “the expense must be directly related to one of these purposes,” such as a campaign fundraiser or a meeting to discuss a change in city policy.

A spokesperson for the state’s Fair Political Practices Commission (FPPC) declined to comment for this story, instead pointing The Standard to state law on campaign funds being used to purchase meals. A local campaign committee can charge up to $200 for food and drinks as long as the charge is reasonably related to a political, legislative or governmental purpose. However, if the charge exceeds $200, “the expense must be directly related to one of these purposes,” such as a campaign fundraiser or a meeting to discuss a change in city policy.

David Campos, a former chair of the San Francisco Democratic Party, said that when people have money left over in their officeholder accounts, they are normally asked to donate money to the party to help with voter registration. Campos said he did not recall Farrell donating money or furniture to the Democratic Party following the 2016 election.

David Campos, a former chair of the San Francisco Democratic Party, said that when people have money left over in their officeholder accounts, they are normally asked to donate money to the party to help with voter registration. Campos said he did not recall Farrell donating money or furniture to the Democratic Party following the 2016 election.

“I would hope the FPPC takes a look at all of the things you’re reporting on in terms of campaign expenditures,” Campos said.

“I would hope the FPPC takes a look at all of the things you’re reporting on in terms of campaign expenditures,” Campos said.

The statute of limitations on Farrell’s DCCC campaign spending has expired at this point. However, in narrow circumstances, the statute of limitations can be extended if a candidate or officeholder is found to have concealed a campaign violation.

The statute of limitations on Farrell’s DCCC campaign spending has expired at this point. However, in narrow circumstances, the statute of limitations can be extended if a candidate or officeholder is found to have concealed a campaign violation.

Peter Gallotta, a member of the DCCC since 2017, said that Farrell’s spending appears to be a “clear abuse” of his officeholder account.

Peter Gallotta, a member of the DCCC since 2017, said that Farrell’s spending appears to be a “clear abuse” of his officeholder account.

“They’re not personalized ATM accounts for people,” Gallotta said. “I think it’s shameful to raise money and then use that money for wining and dining. It erodes public trust.”

“They’re not personalized ATM accounts for people,” Gallotta said. “I think it’s shameful to raise money and then use that money for wining and dining. It erodes public trust.”

<h2 class="wp-block-heading" id="h-oysters-and-trash-money">Oysters and trash money</h2>

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<h2 class="wp-block-heading" id="h-oysters-and-trash-money">Oysters and trash money</h2>

By keeping his DCCC campaign account active after the 2016 election, Farrell was able to continue accepting money from restricted sources that could give well above the $500 contribution limit for supervisor and mayor campaigns.

By keeping his DCCC campaign account active after the 2016 election, Farrell was able to continue accepting money from restricted sources that could give well above the $500 contribution limit for supervisor and mayor campaigns.

Near the end of March 2018, Farrell accepted a $5,000 contribution from a political action committee for the city’s trash company, Recology, and a $2,500 payment from <a href="https://sfstandard.com/2024/05/10/san-francisco-nightlife-meet-citys-bar-crawl-king/">Mayes Oyster House</a>, one of San Francisco’s oldest restaurants. Mayes Oyster House had business before the Planning Commission about a week before making the contribution.

Meet San Francisco’s bar crawl king who bet big on city’s nightlife—and won

Near the end of March 2018, Farrell accepted a $5,000 contribution from a political action committee for the city’s trash company, Recology, and a $2,500 payment from <a href="https://sfstandard.com/2024/05/10/san-francisco-nightlife-meet-citys-bar-crawl-king/">Mayes Oyster House</a>, one of San Francisco’s oldest restaurants. Mayes Oyster House had business before the Planning Commission about a week before making the contribution.

Farrell’s campaign said he did not solicit contributions from Recology and Mayes Oyster House, and he had no role in the Planning Commission’s unanimous vote to allow the restaurant to remain open every night until 2 a.m. That same week, Farrell stepped down from the DCCC.

Farrell’s campaign said he did not solicit contributions from Recology and Mayes Oyster House, and he had no role in the Planning Commission’s unanimous vote to allow the restaurant to remain open every night until 2 a.m. That same week, Farrell stepped down from the DCCC.

However, in one of Farrell’s final acts as mayor in June 2018, he appointed one of the restaurant’s owners, Matt Corvi, to a seat on the city’s Small Business Commission. The two men now serve on the board of the Olympic Club Foundation, which is connected to the private golf and social club that has hosted multiple U.S. Opens.

However, in one of Farrell’s final acts as mayor in June 2018, he appointed one of the restaurant’s owners, Matt Corvi, to a seat on the city’s Small Business Commission. The two men now serve on the board of the Olympic Club Foundation, which is connected to the private golf and social club that has hosted multiple U.S. Opens.

Corvi told The Standard in a phone interview that he runs the operations at Oyster Mayes House and had no idea the business had given money to the campaign of Farrell, whom he called a friend.

Corvi told The Standard in a phone interview that he runs the operations at Oyster Mayes House and had no idea the business had given money to the campaign of Farrell, whom he called a friend.

“Honestly, I was not in charge of finances at that time,” Corvi said. “I had two partners and I never wrote checks.”

“Honestly, I was not in charge of finances at that time,” Corvi said. “I had two partners and I never wrote checks.”

Owner Matt Corvi poses for a portrait outside of Mayes Oyster House in San Francisco, Calif., on Friday, August 12, 2022.

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2022/08/RestaurantHaveNots-169.jpg?w=2500" alt="Matt Corvi man in a grey jacket stands with arms crossed in front of Mayes Oyster House restaurant, featuring a red facade and vintage neon sign." class="wp-image-68102"/><figcaption class="wp-element-caption">Mayes Oyster House owner Matt Corvi received an appointment to the city’s Small Business Commission in June 2018, three months after his business gave $2,500 to Mark Farrell&#8217;s Democratic Party campaign account</figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2022/08/RestaurantHaveNots-169.jpg?w=2500" alt="Matt Corvi man in a grey jacket stands with arms crossed in front of Mayes Oyster House restaurant, featuring a red facade and vintage neon sign." class="wp-image-68102"/><figcaption class="wp-element-caption">Mayes Oyster House owner Matt Corvi received an appointment to the city’s Small Business Commission in June 2018, three months after his business gave $2,500 to Mark Farrell's Democratic Party campaign account</figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2022/08/RestaurantHaveNots-169.jpg?w=2500" alt="Matt Corvi man in a grey jacket stands with arms crossed in front of Mayes Oyster House restaurant, featuring a red facade and vintage neon sign." class="wp-image-68102"/><figcaption class="wp-element-caption">Mayes Oyster House owner Matt Corvi received an appointment to the city’s Small Business Commission in June 2018, three months after his business gave $2,500 to Mark Farrell&#8217;s Democratic Party campaign account</figcaption></figure>

David Latterman, a longtime political analyst in San Francisco, suggested that Recology’s contribution to Farrell deserves even more scrutiny after the company was found to be deeply enmeshed in a <a href="https://sfstandard.com/2023/08/04/players-in-san-francisco-corruption-scandal-mohammed-nuru/">City Hall corruption scandal</a> that led to numerous arrests and Recology being <a href="https://sfstandard.com/2022/01/11/sf-investigates-recology-for-more-overbilling-after-95-million-payout-tied-to-corruption-scandal/">fined $100 million</a> in a rate-hike scheme.

San Francisco corruption scandal: A guide to the players involved

Recology faces new overbilling probe after $95 million payout tied to City Hall corruption scandal

David Latterman, a longtime political analyst in San Francisco, suggested that Recology’s contribution to Farrell deserves even more scrutiny after the company was found to be deeply enmeshed in a <a href="https://sfstandard.com/2023/08/04/players-in-san-francisco-corruption-scandal-mohammed-nuru/">City Hall corruption scandal</a> that led to numerous arrests and Recology being <a href="https://sfstandard.com/2022/01/11/sf-investigates-recology-for-more-overbilling-after-95-million-payout-tied-to-corruption-scandal/">fined $100 million</a> in a rate-hike scheme.

Records show that when Farrell was mayor, he nominated Paul Giusti—a former Recology exec who <a href="https://sfstandard.com/2023/12/14/san-francisco-corruption-paul-giusti-sandra-zuniga-sentencing/">admitted to arranging more than $1 million in bribes</a>—for a reappointment to the Treasure Island Development Authority a little more than a week after the $5,000 contribution went into Farrell’s DCCC campaign account.

Records show that when Farrell was mayor, he nominated Paul Giusti—a former Recology exec who <a href="https://sfstandard.com/2023/12/14/san-francisco-corruption-paul-giusti-sandra-zuniga-sentencing/">admitted to arranging more than $1 million in bribes</a>—for a reappointment to the Treasure Island Development Authority a little more than a week after the $5,000 contribution went into Farrell’s DCCC campaign account.

“That needs to be looked at,” Latterman said. “It certainly raises eyebrows. Recology has been a thorn in the side of the city ethics-wise for years.”

“That needs to be looked at,” Latterman said. “It certainly raises eyebrows. Recology has been a thorn in the side of the city ethics-wise for years.”

A <a href="https://www.documentcloud.org/documents/24784441-city-ethics-commission-study-of-mark-farrells-behested-payments_dated-november-9-2020">report by the city’s Ethics Commission</a> in 2020 found that Farrell acted as an intermediary for $882,500 in “behested payments,” which are donations from private entities that Farrell passed along to the Parks Alliance, a nonprofit that disgraced former Public Works director Mohammed Nuru used as a slush fund in the City Hall corruption scandal. Farrell’s wife served as the chair of the Parks Alliance’s board of trustees during his time as a supervisor, and records show that Farrell helped with $35,000 in behested payments on behalf of Recology.

A <a href="https://www.documentcloud.org/documents/24784441-city-ethics-commission-study-of-mark-farrells-behested-payments_dated-november-9-2020">report by the city’s Ethics Commission</a> in 2020 found that Farrell acted as an intermediary for $882,500 in “behested payments,” which are donations from private entities that Farrell passed along to the Parks Alliance, a nonprofit that disgraced former Public Works director Mohammed Nuru used as a slush fund in the City Hall corruption scandal. Farrell’s wife served as the chair of the Parks Alliance’s board of trustees during his time as a supervisor, and records show that Farrell helped with $35,000 in behested payments on behalf of Recology.

The Ethics Commission report from 2020 noted that some of the behested payments Farrell made were timed closely to lobbyist contacts he had with AT&amp;T, Facebook and the San Francisco Realtors Association. In the case of AT&amp;T, Farrell introduced legislation that would have benefited the telecoms giant by preventing landlords from interfering with a tenant’s choice of internet service providers.

The Ethics Commission report from 2020 noted that some of the behested payments Farrell made were timed closely to lobbyist contacts he had with AT&amp;T, Facebook and the San Francisco Realtors Association. In the case of AT&amp;T, Farrell introduced legislation that would have benefited the telecoms giant by preventing landlords from interfering with a tenant’s choice of internet service providers.

In response to emailed questions about behested payments and the $5,000 contribution to Farrell’s DCCC campaign, Recology issued a statement saying the company “instituted a robust set of compliance practices” in the wake of the corruption scandal and no longer makes behested payments or contributes to elected officials’ campaigns in San Francisco.

In response to emailed questions about behested payments and the $5,000 contribution to Farrell’s DCCC campaign, Recology issued a statement saying the company “instituted a robust set of compliance practices” in the wake of the corruption scandal and no longer makes behested payments or contributes to elected officials’ campaigns in San Francisco.

“A lot has changed at Recology in five years,” Recology spokesperson Robert Reed wrote in an email to The Standard. “We have a new CEO, a new leadership team, and new management at our San Francisco operations.”

“A lot has changed at Recology in five years,” Recology spokesperson Robert Reed wrote in an email to The Standard. “We have a new CEO, a new leadership team, and new management at our San Francisco operations.”

A screen capture of Recology Executive Paul Giusti talking at the Commission on the Environment in San Francisco on Tuesday, October 10, 2017. Paul Giusti cooperated with the Federal Government in the Mohammed Nuru case.

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/12/20231212-guistizunigapreview-006.jpg?w=882" alt="Paul Giusti, a bald man in a pink shirt, speaks into a microphone in a room filled with seated people. Some attendees are paying attention, while others are focused on their own activities." class="wp-image-229963"/><figcaption class="wp-element-caption">Paul Giusti, a former Recology executive who pleaded guilty for a bribery scandal, was nominated for a reappointment to the Treasure Island Development Authority after the trash company gave Mark Farrell’s Democratic Party campaign $5,000.</figcaption></figure>

Farrell’s campaign opponents said his unorthodox use of his DCCC account deserved scrutiny from voters.

Farrell’s campaign opponents said his unorthodox use of his DCCC account deserved scrutiny from voters.

“Mark’s growing list of ethics scandals is catching up to him and exposing why San Francisco can’t afford to give him another shot,” said Tyler Law, a consultant for the campaign of mayoral candidate Daniel Lurie. “Mark is literally invested in keeping the status quo.”

“Mark’s growing list of ethics scandals is catching up to him and exposing why San Francisco can’t afford to give him another shot,” said Tyler Law, a consultant for the campaign of mayoral candidate Daniel Lurie. “Mark is literally invested in keeping the status quo.”

Supervisor Aaron Peskin, who is also running for mayor, said that Farrell’s liberal spending on meals and drinks with unknown individuals—as well as expenses Farrell paid directly to himself while taking money from special interests like Recology—should be thoroughly examined.

Supervisor Aaron Peskin, who is also running for mayor, said that Farrell’s liberal spending on meals and drinks with unknown individuals—as well as expenses Farrell paid directly to himself while taking money from special interests like Recology—should be thoroughly examined.

“It begs the question why someone who is receiving a lucrative mayor’s salary was nickel and diming the garbage company to pay for his meals and extravagances,” Peskin said. “It certainly is not the hallmark of the kind of leadership that San Francisco deserves.”

“It begs the question why someone who is receiving a lucrative mayor’s salary was nickel and diming the garbage company to pay for his meals and extravagances,” Peskin said. “It certainly is not the hallmark of the kind of leadership that San Francisco deserves.”

Peskin and Breed both had DCCC campaign committees in 2016, but the manner in which they used these accounts appears to differ greatly in scope from Farrell. Peskin had a zero balance by the end of 2016, while Breed—who was serving as the president of the Board of Supervisors at that time—spent the bulk of her expenditures on Democratic Party travel, office expenses and civic events like the Pride Parade.

Peskin and Breed both had DCCC campaign committees in 2016, but the manner in which they used these accounts appears to differ greatly in scope from Farrell. Peskin had a zero balance by the end of 2016, while Breed—who was serving as the president of the Board of Supervisors at that time—spent the bulk of her expenditures on Democratic Party travel, office expenses and civic events like the Pride Parade.

Breed had almost $9,000 in debt from her DCCC campaign at the end of 2016, which kicked off a fundraising drive the next year to bring in about $74,000. In total, she spent money on nine meals—three of which were for campaign staff and volunteer events, while the other six were noted as staff meals. The total cost came to just under $2,500.

Breed had almost $9,000 in debt from her DCCC campaign at the end of 2016, which kicked off a fundraising drive the next year to bring in about $74,000. In total, she spent money on nine meals—three of which were for campaign staff and volunteer events, while the other six were noted as staff meals. The total cost came to just under $2,500.

“How can the voters trust Mark Farrell to run San Francisco, if his default setting is habitually breaking the law for his personal benefit?” asked Joe Arellano, a spokesperson for Breed’s campaign.

“How can the voters trust Mark Farrell to run San Francisco, if his default setting is habitually breaking the law for his personal benefit?” asked Joe Arellano, a spokesperson for Breed’s campaign.

McMorris, of California Common Cause, said it’s unfortunate that many people have become conditioned to think campaign finance and ethics laws are less important than other laws because of the way <a href="https://sfstandard.com/2024/06/17/matt-haney-campaign-49ers-warriors-broadway-tickets/">lifestyle expenses</a> are routinely baked into campaigns.

McMorris, of California Common Cause, said it’s unfortunate that many people have become conditioned to think campaign finance and ethics laws are less important than other laws because of the way <a href="https://sfstandard.com/2024/06/17/matt-haney-campaign-49ers-warriors-broadway-tickets/">lifestyle expenses</a> are routinely baked into campaigns.

“You’re not robbing a bank or holding someone up, but these are important laws and I wish people would take them more seriously,” McMorris said. “They are part of our Democratic foundation.”

“You’re not robbing a bank or holding someone up, but these are important laws and I wish people would take them more seriously,” McMorris said. “They are part of our Democratic foundation.”

Mark Farrell lived large on campaign cash while mayor, supervisor

Kevin Truong

By the end of next year, a seven-story office building in the South of Market area will be transformed into Taiwan&#8217;s governmental headquarters in Northern California.

By the end of next year, a seven-story office building in the South of Market area will be transformed into Taiwan's governmental headquarters in Northern California.

By the end of next year, a seven-story office building in the South of Market area will be transformed into Taiwan&#8217;s governmental headquarters in Northern California.

The Taipei Economic and Cultural Office (TECO)—Taiwan’s de facto diplomatic mission—spent nearly $53 million on the newly constructed building at 345 Fourth St., and officials plan to spend millions more to outfit the property to house its consular, education, economic, tourism and immigration divisions, a rooftop space for hosting galas and a cafeteria for visiting dignitaries.

The Taipei Economic and Cultural Office (TECO)—Taiwan’s de facto diplomatic mission—spent nearly $53 million on the newly constructed building at 345 Fourth St., and officials plan to spend millions more to outfit the property to house its consular, education, economic, tourism and immigration divisions, a rooftop space for hosting galas and a cafeteria for visiting dignitaries.

READ MORE:&nbsp;<a href="https://sfstandard.com/business/westfield-gives-up-downtown-san-francisco-mall/">Westfield Gives Up Downtown San Francisco Mall</a>

READ MORE:&nbsp;<a href="https://sfstandard.com/business/westfield-gives-up-downtown-san-francisco-mall/">Westfield Gives Up Downtown San Francisco Mall</a>

 in San Francisco, on June 9, 2023.  | Isaac Ceja/The Standard

<figure class="wp-block-image size-large"><img height="1668" width="2500" src="https://content.sfstandard.com/wp-content/uploads/2023/06/SFRealEstateOpportunist_001-2500x1668.jpg" alt="" class="wp-image-169230"/><figcaption class="wp-element-caption">The Taipei Economic and Cultural Office (TECO) in San Francisco on Friday. TECO spent nearly $53 million for the newly constructed building in SoMa at 345 Fourth St. and plans to transform the property into a seven-story consulate. | Isaac Ceja/The Standard</figcaption></figure>

<figure class="wp-block-image size-large"><img src="https://content.sfstandard.com/wp-content/uploads/2023/06/SFRealEstateOpportunist_001-2500x1668.jpg" alt="" class="wp-image-169230"/><figcaption class="wp-element-caption">The Taipei Economic and Cultural Office (TECO) in San Francisco on Friday. TECO spent nearly $53 million for the newly constructed building in SoMa at 345 Fourth St. and plans to transform the property into a seven-story consulate. | Isaac Ceja/The Standard</figcaption></figure>

TECO’s purchase plants an anchor in the key West Coast gateway city for Eastern Asia. The deal more than doubles the amount of space the organization currently leases at 555 Montgomery St., representing a rare upsizing and investment in a commercial real estate market sorely in need of good news.

TECO’s purchase plants an anchor in the key West Coast gateway city for Eastern Asia. The deal more than doubles the amount of space the organization currently leases at 555 Montgomery St., representing a rare upsizing and investment in a commercial real estate market sorely in need of good news.

Office buildings in San Francisco are facing a record-breaking 30% vacancy rate—a seven-fold increase from the start of 2020—and those figures are expected to rise. Delinquencies in the commercial mortgage-backed security market, a precursor to property foreclosures, have ticked up each month this year, and dozens of buildings in the city have loans coming due over the next few years.

Office buildings in San Francisco are facing a record-breaking 30% vacancy rate—a seven-fold increase from the start of 2020—and those figures are expected to rise. Delinquencies in the commercial mortgage-backed security market, a precursor to property foreclosures, have ticked up each month this year, and dozens of buildings in the city have loans coming due over the next few years.

Many commercial real estate experts are calling this one of the most difficult economic environments they’ve seen, but TECO’s announcement shows that some investors are still betting on San Francisco in the long term.

Many commercial real estate experts are calling this one of the most difficult economic environments they’ve seen, but TECO’s announcement shows that some investors are still betting on San Francisco in the long term.

“There’s more opportunity today in San Francisco than there has been in the 30 years I’ve been in the market here,” said John Jensen, a commercial real estate broker at Colliers.

“There’s more opportunity today in San Francisco than there has been in the 30 years I’ve been in the market here,” said John Jensen, a commercial real estate broker at Colliers.

Of course, not every real estate player has a national government to back them.

Of course, not every real estate player has a national government to back them.

“Those people who have the most distress inside their portfolio will be distracted from the opportunity in front of them,” said Barry DiRaimondo, CEO of San Mateo-based developer SteelWave. “And there are a lot of people in that boat.”

“Those people who have the most distress inside their portfolio will be distracted from the opportunity in front of them,” said Barry DiRaimondo, CEO of San Mateo-based developer SteelWave. “And there are a lot of people in that boat.”

For the first time in years, DiRaimondo said, his company is considering buying into the San Francisco market, lured by the promise of discount deals in a city previously characterized by a pricing boom fueled by tech.

For the first time in years, DiRaimondo said, his company is considering buying into the San Francisco market, lured by the promise of discount deals in a city previously characterized by a pricing boom fueled by tech.

A downtown San Francisco building at 333 Kearny, is leasing to tenants, including Codi, a San Francisco-based startup that helps link companies with short term office space leases for a hybrid work world, on Monday, Dec. 12, 2022. | Camille Cohen/The Standard

<figure class="wp-block-image size-full"><img src="https://content.sfstandard.com/wp-content/uploads/2023/06/INLINED3_SFRealEstateOpportunist-.jpg" alt="" class="wp-image-169201"/><figcaption class="wp-element-caption">San Francisco&#8217;s office market has been facing record-breaking vacancy rates that continue to rise. | Camille Cohen/The Standard</figcaption></figure>

<figure class="wp-block-image size-full"><img src="https://content.sfstandard.com/wp-content/uploads/2023/06/INLINED3_SFRealEstateOpportunist-.jpg" alt="" class="wp-image-169201"/><figcaption class="wp-element-caption">San Francisco's office market has been facing record-breaking vacancy rates that continue to rise. | Camille Cohen/The Standard</figcaption></figure>

<figure class="wp-block-image size-full"><img src="https://content.sfstandard.com/wp-content/uploads/2023/06/INLINED3_SFRealEstateOpportunist-.jpg" alt="" class="wp-image-169201"/><figcaption class="wp-element-caption">San Francisco&#8217;s office market has been facing record-breaking vacancy rates that continue to rise. | Camille Cohen/The Standard</figcaption></figure>

“If you had to sell an office today in San Francisco, your values are off somewhere between 40% and 80% of where they would have been 18 months ago—that’s pretty dramatic,” DiRaimondo said. “If you own real estate, that’s a challenge. If you’re looking to buy, you’re probably buying in at a basis that has been unmatched for the last 25 years.”

“If you had to sell an office today in San Francisco, your values are off somewhere between 40% and 80% of where they would have been 18 months ago—that’s pretty dramatic,” DiRaimondo said. “If you own real estate, that’s a challenge. If you’re looking to buy, you’re probably buying in at a basis that has been unmatched for the last 25 years.”

Evidence of the trend can be found in a number of <a href="https://sfstandard.com/business/downtown-san-francisco-office-tower-to-sell-at-deep-discount/">recent examples</a>, including <a href="https://sfstandard.com/business/downtown-san-francisco-office-tower-to-sell-at-massive-discount-sources/">buildings poised to sell</a> at more than 70% discounts to their pre-pandemic price.

Evidence of the trend can be found in a number of <a href="https://sfstandard.com/business/downtown-san-francisco-office-tower-to-sell-at-deep-discount/">recent examples</a>, including <a href="https://sfstandard.com/business/downtown-san-francisco-office-tower-to-sell-at-massive-discount-sources/">buildings poised to sell</a> at more than 70% discounts to their pre-pandemic price.

The majority of the office supply in San Francisco is what DiRaimondo calls “commodity office space,” the types of properties that wouldn’t particularly stand out in a crowd. These properties are particularly vulnerable to losing tenants to nicer spaces and more likely to face refinancing troubles when loans come due.

The majority of the office supply in San Francisco is what DiRaimondo calls “commodity office space,” the types of properties that wouldn’t particularly stand out in a crowd. These properties are particularly vulnerable to losing tenants to nicer spaces and more likely to face refinancing troubles when loans come due.

SteelWave’s specialty is creating “environments that motivate people to actually go to work,” DiRaimondo said. SteelWave’s strategy will ultimately depend not on the success of the overall market recovery but just providing more attractive leases than those found in the building next door.

SteelWave’s specialty is creating “environments that motivate people to actually go to work,” DiRaimondo said. SteelWave’s strategy will ultimately depend not on the success of the overall market recovery but just providing more attractive leases than those found in the building next door.

“In order to convert vertical buildings into super cool, differentiated space, you almost have to be buying in at land value,” DiRaimondo said. “I think that’s kind of where we are.”

“In order to convert vertical buildings into super cool, differentiated space, you almost have to be buying in at land value,” DiRaimondo said. “I think that’s kind of where we are.”

<h2 class="wp-block-heading" id="h-investing-against-the-herd">Investing Against the Herd</h2>

<h2 id="h-investing-against-the-herd">Investing Against the Herd</h2>

Michael Shvo, CEO of New York-based developer Shvo, is betting on his own Downtown revitalization <a href="https://sfstandard.com/business/transamerica-pyramid-at-50-san-francisco-icon-enters-a-new-era-with-400m-redevelopment/">centered on his $1 billion purchase and redevelopment</a> of the Transamerica Pyramid and surrounding properties.

Michael Shvo, CEO of New York-based developer Shvo, is betting on his own Downtown revitalization <a href="https://sfstandard.com/business/transamerica-pyramid-at-50-san-francisco-icon-enters-a-new-era-with-400m-redevelopment/">centered on his $1 billion purchase and redevelopment</a> of the Transamerica Pyramid and surrounding properties.

Since taking control and beginning renovations of the pyramid, Shvo said he has signed multiple leases at $200 to $250 per square foot—double the pre-pandemic rates.

Since taking control and beginning renovations of the pyramid, Shvo said he has signed multiple leases at $200 to $250 per square foot—double the pre-pandemic rates.

The Transamerica pyramid, which is located at 600 Montgomery Street in the downtown, Financial District of San Francisco, Calif., looms above Mark Twain alleyway and the Transamerica Redwood Grove, on Tuesday, Dec. 6, 2022., while folks underneath celebrate the tower’s 50th birthday and interior renovation by SHVO development. | Camille Cohen/The Standard

<figure class="wp-block-image size-full"><img src="https://content.sfstandard.com/wp-content/uploads/2023/06/INLINED2_SFRealEstateOpportunist-.jpg" alt="" class="wp-image-169198"/><figcaption class="wp-element-caption">The Transamerica Pyramid, which is located at 600 Montgomery St. in the Financial District in San Francisco, looms above Mark Twain alleyway and the Transamerica Redwood Grove. | Camille Cohen/The Standard</figcaption></figure>

“It tells you that if you build the right thing and if you deliver an elevated product—it helps to be in the most iconic building on the West Coast,&#8221; Shvo told The Standard. “Tenants are not only coming; they’re paying twice what they would have paid before Covid.”

“It tells you that if you build the right thing and if you deliver an elevated product—it helps to be in the most iconic building on the West Coast," Shvo told The Standard. “Tenants are not only coming; they’re paying twice what they would have paid before Covid.”

“It tells you that if you build the right thing and if you deliver an elevated product—it helps to be in the most iconic building on the West Coast,&#8221; Shvo told The Standard. “Tenants are not only coming; they’re paying twice what they would have paid before Covid.”

Shvo said now is “100% the time” to be thinking about investing in commercial real estate in San Francisco.

Shvo said now is “100% the time” to be thinking about investing in commercial real estate in San Francisco.

“What you want to do is create the product in the slow time, in the dips in the market. Buy it, upgrade it, so when you come out of the downturn, you have the best product out there,” Shvo said. “Investors, in general, are like sheep; there’s a herd mentality. When things are bad, everybody sells. When things are good, everybody buys.”

“What you want to do is create the product in the slow time, in the dips in the market. Buy it, upgrade it, so when you come out of the downturn, you have the best product out there,” Shvo said. “Investors, in general, are like sheep; there’s a herd mentality. When things are bad, everybody sells. When things are good, everybody buys.”

Shvo’s company has been swimming against the stream in the current market, purchasing some $4 billion in real estate across the country during the pandemic. A major market downturn has provided rare access to the “trophy assets” Shvo prefers.

Shvo’s company has been swimming against the stream in the current market, purchasing some $4 billion in real estate across the country during the pandemic. A major market downturn has provided rare access to the “trophy assets” Shvo prefers.

The first movers in this type of market correction are usually high-net-worth family officers or well-capitalized players who have the cash supply on handy to finance deals.

The first movers in this type of market correction are usually high-net-worth family officers or well-capitalized players who have the cash supply on handy to finance deals.

“We are doing a bunch of deals right now that are predominantly cash deals because the borrowing cost is prohibitive from doing a lot of traditional deals that you would do,” Shvo said.

“We are doing a bunch of deals right now that are predominantly cash deals because the borrowing cost is prohibitive from doing a lot of traditional deals that you would do,” Shvo said.

Michael Shvo, Real estate developer and CEO of SHVO, speaks at the celebration of the Transamerica building’s 50th birthday and interior renovation by SHVO development, at 600 Montgomery Street in the downtown, Financial District of San Francisco, on Tuesday, Dec. 6, 2022.

<figure class="wp-block-image size-full is-resized"><img src="https://content.sfstandard.com/wp-content/uploads/2023/06/INLINED1_SFRealEstateOpportunist-.jpg" alt="" class="wp-image-169195" width="670" height="446"/><figcaption class="wp-element-caption">Michael Shvo, real estate developer and CEO of Shvo, speaks at the celebration of the Transamerica building’s 50th birthday in San Francisco on Dec. 6, 2022.| Camille Cohen/The Standard</figcaption></figure>

This approach comes with major risks, but also the potential for huge rewards.

This approach comes with major risks, but also the potential for huge rewards.

“The winners and losers are going to be separated out by who moves first and who moves last,” DiRaimondo said. “Those people who are trying to find the bottom of the market before they invest have a better chance of slicing off the tip of their finger than they do of getting it right.”

“The winners and losers are going to be separated out by who moves first and who moves last,” DiRaimondo said. “Those people who are trying to find the bottom of the market before they invest have a better chance of slicing off the tip of their finger than they do of getting it right.”

<h2 class="wp-block-heading" id="h-breaking-the-doom-loop">Breaking the ‘Doom Loop’</h2>

<h2 id="h-breaking-the-doom-loop">Breaking the ‘Doom Loop’</h2>

Properties that traded hands at sky-high prices in the years immediately prior to the pandemic face particular trouble. Those loans are coming due and often with debt higher than the current market value of the building.

Properties that traded hands at sky-high prices in the years immediately prior to the pandemic face particular trouble. Those loans are coming due and often with debt higher than the current market value of the building.

However, most current transactions are frozen. Lenders—typically banks—are disinclined to foreclose and take control of properties and are negotiating short-term extensions or more reasonable terms with borrowers. At the same time, property owners are loath to sell their assets at major losses unless forced.

However, most current transactions are frozen. Lenders—typically banks—are disinclined to foreclose and take control of properties and are negotiating short-term extensions or more reasonable terms with borrowers. At the same time, property owners are loath to sell their assets at major losses unless forced.

But this “extend and protect” strategy may only be delaying the inevitable, said Arpit Gupta, a finance professor at New York University.

But this “extend and protect” strategy may only be delaying the inevitable, said Arpit Gupta, a finance professor at New York University.

Gupta <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4124698" target="_blank" rel="noreferrer noopener">co-authored a 2022 paper</a> that helped to coin the term “urban doom loop,” which has taken hold in cities with struggling post-pandemic recoveries. San Francisco is facing the potential of a commercial real estate “doom loop” and Gupta believes policymakers should be moving to disrupt the downward spiral.

Gupta <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4124698" target="_blank" rel="noreferrer noopener">co-authored a 2022 paper</a> that helped to coin the term “urban doom loop,” which has taken hold in cities with struggling post-pandemic recoveries. San Francisco is facing the potential of a commercial real estate “doom loop” and Gupta believes policymakers should be moving to disrupt the downward spiral.

Gupta cited growing delinquencies and declining lease revenues as signs that the problem is worsening. Regional banks, which hold the bulk of commercial real estate debt and are <a href="https://sfstandard.com/business/first-republic-bank-will-be-seized-by-regulators-report-says/">facing their own outside pressures</a>, could shut off their lending and pull back from the industry.

Gupta cited growing delinquencies and declining lease revenues as signs that the problem is worsening. Regional banks, which hold the bulk of commercial real estate debt and are <a href="https://sfstandard.com/business/first-republic-bank-will-be-seized-by-regulators-report-says/">facing their own outside pressures</a>, could shut off their lending and pull back from the industry.

That would be followed by large-scale foreclosures and banks selling off real estate assets in fire sales, adding distress to the banking industry. Gupta <a href="https://www.fdic.gov/bank/historical/history/3_85.pdf" target="_blank" rel="noreferrer noopener">pointed to the 1980s and early 1990s</a>, when more than 1,000 banks closed due to a combination of high-interest rates and commercial real estate issues.

That would be followed by large-scale foreclosures and banks selling off real estate assets in fire sales, adding distress to the banking industry. Gupta <a href="https://www.fdic.gov/bank/historical/history/3_85.pdf" target="_blank" rel="noreferrer noopener">pointed to the 1980s and early 1990s</a>, when more than 1,000 banks closed due to a combination of high-interest rates and commercial real estate issues.

“The idea of waiting a little bit and hoping for recovery becomes a lot harder when you’re talking about assets that are experiencing long-term structural impairment,” Gupta said.&nbsp;

“The idea of waiting a little bit and hoping for recovery becomes a lot harder when you’re talking about assets that are experiencing long-term structural impairment,” Gupta said.&nbsp;

Inaction could create cascading impacts that weigh on the larger financial system. Gupta believes policymakers’ best option is to provide a financial cushion that helps properties reposition. He thinks a mix of zoning and planning changes, in combination with subsidies and tax incentives, can further push the process along, incentivizing building owners to sell and realize their losses.

Inaction could create cascading impacts that weigh on the larger financial system. Gupta believes policymakers’ best option is to provide a financial cushion that helps properties reposition. He thinks a mix of zoning and planning changes, in combination with subsidies and tax incentives, can further push the process along, incentivizing building owners to sell and realize their losses.

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Mark Farrell lived large on campaign cash while mayor, supervisor

Doom scoop: Real estate investors spy opportunity in San Francisco’s bleak market

California is clearing criminal records—including violent crimes—to offer second chances

Dead mall walking: Inside the reeling San Francisco Centre, store owners pray for a turnaround

San Francisco Art Institute will shutter after acquisition deal falls through