Switching the Alcatraz ferry to Fort Mason could cost a lot

Alcatraz: You can’t get there from here. photo: david jones / flickr

Recently we learned that the National Park Service (NPS) wants to move the Alcatraz ferry from its long-term home at the Port of San Francisco to Fort Mason. This move may be necessary if the NPS cannot reach an agreement with the Port on a 50-year lease.

Per federal law, the NPS puts the Alcatraz ferry concession up for competitive bid every 10 years. Currently, the company that wins the Alcatraz ferry concession bid decides the location from which the ferries will depart. The current concession with Hornblower Yachts expires in 2016. The NPS now wants a minimum 50-year lease on the ferry piers for itself and to sublease to whoever wins the future bids. The NPS has identified three possible locations: two at the Port (its existing location at Pier 31½ and 33) and at Fort Mason.

If the NPS moves the Alcatraz ferry to Fort Mason, the city will lose millions in revenue. Let’s not blow it like the Presidio did with George Lucas.

Besides the loss of millions for the Port, local businesses along Fisherman’s Wharf will also lose millions in revenue as the result of the projected 1.7 million annual passengers of the ferry going to Fort Mason.

This doesn’t even take into account the effect of the increased local traffic and congestion for Marina District residents.

But because this is a competitive bid matter, it is appropriate to look at how the city will actually fare from a revenue point of view. This is it in a nutshell: The city will also lose millions over the years in property tax revenue for our General Fund. Let me explain this one. Most properties get reappraised when there is an ownership transfer or at the completion of new construction.

However it is quite different when it comes to what is called “possessory interests,” which is when a private party uses government-owned property and is subject to a possessory interest tax. The assessor relies on all government agencies to report their users. Many times these assessments go unassessed or under-assessed — many times due to politics.

I recently talked with an appraiser from another county who handles possessory interest and asked about several assessments. The appraiser was aware of the potential assessments, but that county was not appraising because it was too political. This reminded me of when I worked in the San Francisco Assessor’s office years ago and specialized in possessory interest. I remember going through numerous files and found one with a note from a prior assessor stating, “Do not assess. Too political.” We assessed parties that were using Fort Mason for private benefit; over the past 10 years, they are no longer assessed. That means that the Alcatraz ferry concessionaire currently paying property tax at the Port will no longer pay if the ferry moves to Fort Mason.

During World War II, Fort Mason was the headquarters for the San Francisco Port of Embarkation, which controlled shipping facilities across the Bay Area. Throughout that war, two-thirds of our troops sent into the Pacific, and more than half of all army cargo moved through West Coast ports. This high volume continued in the 1950s with the Korean War and through the early 1960s. In 1955 the San Francisco Port of Embarkation was renamed the U.S. Army Transportation Terminal Co-

mmand Pacific. In 1965 the headquarters transferred to the Oakland Army Terminal, and most of Fort Mason’s embarkation facilities were abandoned. Since Fort Mason was no longer used for military purposes, the federal government transferred jurisdiction to the Golden Gate National Recreation Area (GGNRA) in the 1970s to be used for natural, historic, and cultural purposes.

Military installations are federal enclaves and are exempt from state authority. According to the State Board of Equalization’s legal counsel, a federal enclave is a property over which the federal government holds exclusive jurisdiction. The transfer of jurisdiction to the GGNRA negates the concept of federal enclave and exclusive jurisdiction, because Fort Mason is no longer used for military purposes. Current tenants of Fort Mason include restaurants, art galleries, and nonprofits. Many users, such as those for educational purposes, would be tax exempt.

For all of these reasons, the possible Alcatraz ferry move to Fort Mason is bad for the city, not only financially but because it also hurts local businesses along Fisherman’s Wharf and Marina District residents. Further, San Francisco should revisit the assessment of private users of Fort Mason.

Or just leave it the way it is. Unfair and inequitable taxation.

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John Farrell, MBA, is a broker/Realtor at Farrell Real Estate, and a former city assistant assessor for budget and special projects. E-mail: [email protected]