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issue 06/15/2000

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vCity 1.0
by Dr. Adam L. Gruen

20 days in the life of a 21st century virtual city simulation.


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nodal politics

The City of Gold

by Are We Really?

An insider's view of the Bay Area's dotcom culture's history. The development and rise of the new gold rush.

I was fortunate to get access to the internet very shortly after it was relinquished from Arpanet in the eighties. It was a very interesting collaborative place then. I recall a gig a bunch of us did called Cyberthon in a warehouse at India Basin south of South of Market in San Francisco. Cyberthon was a twenty-four hour gig for the wired in those days to try and figure what to do with this baby we had the fortune of being involved in. The media showed up and were not allowed in. Cyberthon spawned the Electronic Frontier Foundation.

I have not profited from the new economy but have only remained a user of its resources. What I have witnessed as a resident of San Francisco, whose business is in high end commercial printing, is the dot.commism of the entire city, and for that matter the country.

I'm not sure if it's a natural evolution. I think an opportunistic evolution is more appropriate. The new internet economy is another rapid "gold rush". San Francisco was a sleepy outpost for the Indians and the early explorers until the word about the Placer County gold strike hit the east coast. Within a year, there were over 40,000 miners in San Francisco looking to strike it rich. Most of these men were taken advantage of by the high prices for mining-related materials and food. Most of the men never found a spec of gold.

Back in the eighties when the internet was used by a handful of people, the climate South of Market was still bohemian in the original sense. Artists, nightclubs and blue-collar businesses still inhabited the burgeoning South of Market neighborhood. The only restaurants inhabiting the area that were worth eating at were Hamburger Mary's and the long gone and sorely missed Billboard Cafe at Ninth and Folsom. Ringhold Alley between 8th and 9th between Folsom and Howard was still an anonymous pickup area for gays after the sun went down and before AIDS came up. Courtney Love was the coatcheck girl at Club Nine at 9th and Harrison where the Stud is before we had to fire her for shooting up in the coatcheck room and rifling the checked purses and coats. Graphic design firms were still mostly rooted in North Beach or in the financial district. The old wooden warehouses on Howard, Folsom, Harrison, Bryant, Brannan and Townsend were still filled with artists painting, sculpting, performing and creating installations. The rent was cheap. It was still a real Shakedown Street in Grateful Dead terms.

A woman named Susana Montana (with a tilde accent over the second n) was, and still is, a San Francisco City Planner. Susana worked with the artist community South of Market to rewrite the zoning code to finally make it legal for artists to "live and work" in those funky old warehouses. It had been illegal to do so previous to the legislation that was passed in about 1989. Artists were often evicted at will because scrupulous landlords wanted to up the rent. The live work scenario became law allowing one to legally paint or sculpt in the same space where you lived.

After good old Bill Clinton was elected in 1992, the economy took a meteoric rise. The high tech sector in the Bay Area zoomed. Real Estate appreciated, vast amounts of money was available to lend for various speculative adventures that fueled the drop in the percentage of available rental space to about 1%. The banks and lending institutions further fueled the real estate boom by lending major bucks for redevelopment of property due to the hot hot hot economy. Growth was the mantra. We were all making money whether we liked it or not, and good old Bill Clinton was getting laid rather than putting his finger on the button to nuke the Russians because Reagan, who had not been getting laid, had already broken the Russians backs by outspending them with our borrowed tax money.

The shift came when the second large wave of real estate speculation drove rents up in the early 80s in San Francisco and throughout the Bay Area. South of Market though, still had many buildings that were older wooden structures that were not up to code that artists and the "bohemian" culture were willing to inhabit. The 1989 Loma Prieta 7.1 earthquake severely damaged many of these buildings. The timing for the radical upswing in the economy was coincidental with the renovation of these buildings. The landlords and lenders at the time, took advantage of the laws and easily-attainable funding to cater to the new economy.

By 1997, the obscure internet had finally caught the eye of every investment banker and suburban wife to the tune that everyone was running home to check their email. The funky old warehouses home to artists were being demolished at a rapid clip to accommodate the new economy. The real estate mavens along with their money lenders were now using the Live/Work concept and laws that Susana had created to protect working artists, to create new properties that working artists had no hope of ever living or working in let alone affording. The costs for these live work properties started at a mere $250,000 and now are fetching $500,000 to $1 Million where they were once worth only $250 to $500 a month rent a few years earlier.

The graphic designers, architects and new internet businesses flocked to the South of Market on the heels of the multi-media companies that had already entrenched there near South Park. The closer you were to Third and Bryant where Wired was located the better! I prefer the Discount Fabric warehouse across the street myself for art materials. I still create large art projects. The rents soared, old joints were torn down, new steel-framed lofts changed the landscape. Move over kids, here comes the businesses most of whom are less than three or four years old now. New, hip, expensive restaurants sprang up like dandelions. Parking became a problem. Even the San Francisco Giants left windy, cold Candelstick to move in.

New loft residents started calling the cops at midnight because the nightclubs who were there before they were, were booming the music and the nightclub patrons were spinning their tires in the intersections. Tsk, Tsk! Major attempts to evict the South of Market nightclubs were attempted. Police Captains were moved to other jurisdictions.

And where does this all lead us?

The new economy is also radically changing the San Francisco landscape. The development in terms of renovation of older buildings and the tearing down of buildings and construction of new buildings is phenomenal. The influx of cyber citizens is pushing out the older established inhabitants. While, currently, there are many new internet related companies that have set roots in San Francisco, many of them will not survive after their startup money fades. What does that leave in its wake?
- billboard in the Mission district of San Francisco -

The service economy is fueled by people who used to live in the Victorians in the alleys South of Market and in the Mission District. They are being driven out because they can't afford to live there anymore. Where will the restaurants get the dishwashers, the waiters, the parking valets? What will happen to the neighborhood that the Captain, who inherited the Talon Zipper fortune, subsidized by putting in his will that anyone who lived in his properties pays the same rent until they die, because he didn't need the money. The Captain owned over 120 properties in the alleys South of Market. He subsidized the rent for the people who worked in his factories so he would have good help! The inheritors and the executors, the Catholic Church and Wells Fargo Bank continually try to break the will except they have a formidable foe in an artist who lives and works South of Market who also happens to have a law degree from Hastings.

What will happen to the neighborhood when the high percentage of the new businesses to whom the new economy catered with its expensive development and expensive collateral businesses fails as is predicted? The waiters, the busboys, the dishwashers, the valet parkers and perhaps even the San Francisco Giants may have to find a new place to play.

Pessimism is not my intent here. It's just that it has grown too high too fast and it seems ripe for something. For Christ's sake, why should we buy toothpaste on the internet when we can get it at the corner store on the way home from work when we stop to buy fresh fish or vegetables. Web Van only further clogs the traffic not to mention the double parking that makes it even more difficult to maneuver the crowded streets. Only 11% of the inhabitants can afford to own the median cost of property in the Bay Area or something to that effect. I heard a statistic back in the eighties that said if only 8% of the people could afford to own the median property, we would be in for a rude surprise real estate-wise.

So that is my diatribe on the subject. I hope it doesn't fail because for all of my life, my parents told stories about how hard it was during the Depression.

b i o :
Are We Really? is a long-established Bay Area resident and multimedia artist. His projects include the ArtPolice. Are We Really? can be contacted at


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