San Francisco

San Francisco Passes Moratorium on Delivery Warehouses To Shake Down Amazon

City politicians and union activists have said the temporary ban on new delivery warehouses is meant to send a message that the company can't just open a new facility without first providing generous "community benefits."

|

San Francisco's Board of Supervisors has passed a temporary ban on new package delivery facilities in an effort to shake down Amazon.

On Tuesday, the board voted unanimously to impose "interim zoning controls" for 18 months on parcel delivery services. Those interim controls will require new package delivery services to go through the city's conditional use authorization process—a long, expensive, and fraught prospect. The San Francisco Chronicle and San Francisco Standard both describe the ordinance as an 18-month "moratorium."

Amazon has been in the process of establishing a new 725,000 square foot distribution center in the city's Showplace Square neighborhood since late 2020. Neighboring residents and a nearby art school have consistently opposed the plan, citing the potential for more traffic and noise, as well as Amazon's record on safety and labor issues.

"The massive Amazon project will completely change the character of our neighborhood creating traffic congestion, safety issues, pollution, and low-paying jobs at a company hostile to worker rights," said one resident in a written public comment.

A coalition of trade unions—including the Teamsters, the United Commercial Food Workers, Service Employees International Union, and the Building Trades Council—have embraced the ordinance as well. They held an energetic rally outside City Hall yesterday before the vote.

The proponents of this moratorium on new delivery services are pretty blatant that the idea behind it is to shake down Amazon.

"If you are going to come into our neighborhoods you are going to talk to the people in the neighborhood. You are going to provide them with community benefits," said Shaman Walton, who introduced the moratorium bill, at yesterday's city hall rally, per the Chronicle.

Jim Araby of the United Food and Commercial Workers likewise said at yesterday's rally that "this legislation is the first step to make sure there is an actual process, that you can't just plop down a 700,000 square foot in the middle of a community and say we are going to buy you off with five dollars and an ice tea."

Long and protracted approval processes are a favorite tool of organized labor and neighborhood activists to extract concessions from project sponsors.

Unions' ability to delay these proceedings with frivolous appeals and lawsuits gives them the leverage necessary to force developers to hire all-union labor. Neighborhood groups will do the same in pursuit of developer-provided "community benefits"—whether that's a new park, new community space, or a $1 million cash payment.

Araby, the union rep, told the local Potrero View that the jobs at the planned Amazon facility "should be union jobs, not only when it's built, but when it's operated."

San Francisco's typical approval process is already pretty long and protracted. It gives ample room for third parties to delay things with an eye toward extracting concessions.

The 18-month moratorium slows things down even more. It seems to be an attempt by the Board of Supervisors to prevent other organs of the city's government from being too welcoming to Amazon.

When introducing the moratorium bill at a February Board of Supervisors meeting, Walton complained of being blindsided by the city's Office of Economic and Workforce Development (OEWD)—which had already signed a memorandum of understanding (MOU) with Amazon about its plans for the Showplace Square site.

"I had no idea that the Office of Economic and Workforce Development had signed an MOU with the company in District 10 until right before it was reported in the news," he said. "At least the OEWD could have reached out to our office to have a courtesy conversation."

"It just feels a little janky," Supervisor Aaron Peskin told the Standard of the MOU back in January. "Because, basically, it's a sign that labor, and traffic, and environmental impacts to brick-and-mortar businesses are all being ignored and Amazon is being embraced."

The irony is that Amazon only came into possession of its Showplace Square site because of San Francisco's intensive approval process for new development, and the power it gives project opponents to gum things up.

The previous owner of the site, Recology, had pursued plans to convert its trash hauling facility into 1,000 units of new housing. Neighbors vocally opposed that plan, arguing that doing so would forfeit an industrial-zoned site that could be used by locally owned auto repair shops and smaller manufacturers.

"Facing an uphill approval process that was likely to drag on three or four years, not including delays from environmental lawsuits common in San Francisco, the rubbish company gave up and sold the 6-acre site to Amazon in 2020," reports the Chronicle.

Now Amazon is trying to use that industrial site for a distribution center while local activists complain that would be out-of-step with the increasingly residential character of the neighborhood. The solution city politicians appear to have settled with is to layer more process onto whatever development happens at the site.

This is hardly the first time that San Francisco's efforts to preserve small business through its zoning code has backfired. The city restrictions on chain retail, meant to prevent Starbucks from taking over town, also tripped up plans for a local, family-owned burrito chain from opening another location.

One would think that this series of regulatory own-goals might convince city politicians, community activists, and organized labor to give up on micromanaging zoning rules. Instead, they seem more determined than ever to fight every development block by block.

NEXT: Are Josh Hawley and Ted Cruz Ignorant About Child Porn Penalties or Just Demagogic?

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

    1. No I didn't

  1. The real story here is that anyone's still stupid enough to try to do business in San Francisco.

    1. What Amazon ought to do is tack on a delivery surcharge for addresses in areas where governments have arbitrarily raised the cost of doing business.

      Oh, we have to use a warehouse 10 miles further away and slow down deliveries? $1 more, please.

      1. Including, of course, shipments to Prime members.

        That would gore some SF liberals' oxen!

        1. In the form of no Amazon Boxen?

        2. Just announce that direct delivery is not available in San Francisco zip codes and all deliveries will be made by the USPS.

          1. ...attempted by the USPS.

      2. Instead they'll add $0.01 on to all of our Amazon orders so as not to upset anyone in San Francisco.

        When are they going to break off into the ocean again?

        1. Since we don’t have Lex Luthor,
          maybe Elon will do something?

          1. "Since we don’t have Lex Luthor,
            maybe Elon will do something?"

            I think Jeff Bezos is the obvious Lex Luthor replacement.

          2. We could use a man like Max Zorin again...

        2. "When are they going to break off into the ocean again?"

          They aren't going to break off into the ocean. The Pacific side of the San Andreas Fault line isn't moving west, it's moving North by North West at an inch or two per year. In a few million years, San Francisco will be a suburb of Anchorage, Alaska.

      3. Fuck that. Go full bore. No deliveries anywhere in San Francisco. Go pick it up at the Amazon Delivery Center at the Whole Foods in Oakland. Put the home phone numbers of the Board of Supervisors on the error page when people try to order stuff.

        1. This is the best solution, and the first thing I thought of. And I would pay a penny surcharge to keep Amazon whole if they lose revenue.

          Let's go Oakland!

    2. Or California?

    3. Bezos is a lefturd, pretty sure that current Amazon management is, too.

      -jcr

  2. The previous owner of the site, Recology, had pursued plans to convert its trash hauling facility into 1,000 units of new housing. Neighbors vocally opposed that plan, arguing that doing so would forfeit an industrial-zoned site that could be used by locally owned auto repair shops and smaller manufacturers.

    At some point, a light turns on and you start to understand what all of this is really about.

    1. One would think that this series of regulatory own-goals might convince city politicians, community activists, and organized labor to give up on micromanaging zoning rules. Instead, they seem more determined than ever to fight every development block by block.

      One WOULD think, until you think, then, as I said above, you understand what this is really about.

  3. Kind of a shame that Amazon can't go anywhere else.
    And a real damn shame they can't decide it is too dangerous to deliver in San Francisco any more.

    1. Drones with drop-offs from 100 feet might work. They'll send you a text when the drop is made, so you can beat the crowd to your stuff.

      1. aim for the poop!

        1. That doesn't narrow down the target window much.

  4. I guess the "community benefit" of delivering stuff on time doesn't count.

    But when CVS and Target have periodic 100%-off group discounts, you gotta offer something I suppose.

    1. Walgreens is where the real discounts are at.

    2. Jobs apparently are not a community benefit.

      1. "Only union jobs really benefit a community." [/sarc]

        1. Jobs are racist and oppressive.

    3. Exactly so. "Your community benefit is faster Amazon deliveries."

      Lots of jobs, even if they pay less than activists want to accept ain't nothing either. Neither is blowing millions to buy and upgrade the site.

      If I were running a business, I'd just write off SF. It's just not enough business to be worth the headache.

  5. So a proposed residential project didn't fit with the existing industrial zoning, so that was nixed. Now a proposed industrial project doesn't fit with the "increasingly residential character" of the neighborhood? Seems like the process is already taking too long, if the character of the neighborhood changes while things are in the approval process. So why extend it by 18 more months?

    1. "So why extend it by 18 more months?"

      Uh, well I'd go with the obvious mob style shake down for money and benefits.

  6. Amazon should pass a moratorium on deliveries to San Francisco.

    Door Dash and Uber Eats and a number of those types of delivery apps did it when St. Louis tried to limit what they could charge, and that local policy got reversed with a quickness.

    1. They don't need to pass a moratorium. Instead, deliveries will just be slower, more expensive, and cause more congestion.

  7. If I were Bezos I would say, "Fuck you San Francisco, if you want your packages you can come down to San Bruno and pick them up."

    1. To really twist the knife make it merces. That's were the "sf high-speed rail" starts

  8. How dare Amazon create jobs and pay taxes!

  9. "If you are going to come into our neighborhoods you are going to talk to the people in the neighborhood. You are going to provide them with community benefits."

    They are providing them with community benefits! Amazon is making sure people like Sevo are getting their cheap crap made in China in under twenty-four hours.

  10. Seems every few months an Olympic official, Soccer alliance, or company building in a third world country is getting accused of things like extortion and bribery.

    What I cannot figure out is why unions, bureaucrats, and activists are not? The moment you say "you have to give me X for if you want Y" it is extortion. Using [abusing] the US legal system and SF's overly bureaucratic approval system doesn't make it less so.

    Seems to me that maybe we should worry less about SF's rules and more about fixing that particular hitch in the legal system.

    1. It is the great trade-off in zoning regulation (and a lot of other government regulation). You set standard non-discretionary criteria, and you get absurd approval/denials around the edge cases. But if you let elected representatives apply common sense with a conditional use permit, it creates opportunities for this sort of shake down.

      I'm not sure how you fix that fundamental tradeoff. Fixed regulation can never suit all situations. But permits are valuable, so they are likely to be held hostage if you allow discretion. Perhaps, discretionary but only requiring a minority to approve? A threshold of 3 out of 9 likely still imposes a very high cost to bribe your way to an absurd use, but creates ample opportunity for a "bidding war" in an extortion situation.

      Unfortunately, that only works if everyone acts as an independent rational agent, and not as if they are all in the same party. Good governance is hard to design with single party rule (who would have thought?). To solve single party rule, the basic (but hard) fix is to have different parties at each level of government. The Republicans and Democrats can fight it out at the federal level. But, in SF, there should be the "Progressive party" and the "Liberal party". Both can endorse the Democrats, and in turn various Democrats might endorse one or the other party. But it would restore a bit of political accountability if SF had two parties that could plausibly win an election.

  11. The author did no research in what will happen during that moratorium? Can Amazon write off a big loss for that property on it's taxes, since they are being denied use? Might be time to see if there's property they can use just south of there, and add a fuel surcharge to all deliveries in SF.

    1. As someone familiar with San Francisco's planning and buildings processes I don't understand your comment. Amazon can't take a loss on the property until they sell it. They can deduct normal carrying costs, but not development costs. Amazon already has 2 or 3 distribution hubs in San Francisco right now. Yes they could add a hub in Daly City, Brisbane or South San Francisco but there are a very limited number of sites and they are competing with VC funded Medical Bio Tech firms for those sites.

      1. So, the net result will be higher delivery costs, slower deliveries, and much more congestion for San Francisco.

        Choices have consequences.

  12. San Francisco: "It's terrible these homeless people don't have jobs so they can afford a home."

    Also San Francisco: "But not that job, it's not good enough."

    1. They don't care about jobs anymore. Just wealth transfers. But how real wealth is actually generated is a giant mystery to them.

  13. "The previous owner of the site, Recology, had pursued plans to convert its trash hauling facility into 1,000 units of new housing."
    Where I live we'd say, "Houses are a vast improvement over a trash-hauling facility. Go for it!"

    "Neighbors vocally opposed that plan, arguing that doing so would forfeit an industrial-zoned site that could be used by locally owned auto repair shops and smaller manufacturers."
    Right. Except small, locally owned businesses can't afford the SF zoning/permit process the way Amazon can.

  14. These days, there is no difference between local governments run by democrats and organized crime syndicates like Mafia, Yakuza, Sam Gor and others.

    1. One difference; the democrats don't have to worry about getting arrested.

    2. "These days, there is no difference between local governments run by democrats and organized crime syndicates like Mafia, Yakuza, Sam Gor and others."

      The last time I checked the Mafia and Yakuza are smart parasites and want the underlying businesses they feed off of to stay in business. I'm not San Francisco government qualifies as a smart parasite.

  15. Ah, liberals. They have mainstreamed racism and reintroduced segregation. Now they making corruption and graft official city policy. Somewhere in hell, Mayor Daily, Bull Conner and Boss Tweed are laughing their butts off and tipping their hats.

    1. I hope they do this while slowly rotating on a gigantic spit over a roaring fire. And the spit has room for more.

  16. It's honestly funny.

    We get stories about companies shaking down cities and crickets most of the time.

    Here we have a city shaking down a company and the world is ending.

    1. So, which one do you favor?

    2. You only hear about companies shaking down cities because of Reason. Get your head out of your ass.

    3. We get stories about companies shaking down cities and crickets most of the time.

      Are you blind? People here constantly complain about government subsidies for big business and eminent domain.

      Here we have a city shaking down a company and the world is ending.

      Reason's portrayal of this as a "shakedown" is bullshit. San Francisco doesn't want Amazon delivery warehouses? Fine. What they are going to get then is slower Amazon delivery and more congestion, as Amazon needs to ship in the stuff from farther away. In the end, Amazon really doesn't care that much.

      Nobody outside San Francisco gives a f*ck how San Franciscans screw themselves over, except perhaps as an example of what not to do.

  17. Govt moritoriums, just like when they enacted all of the new house construction moratoriums back in the 2000s. Because, of course building houses is bad for the environment.

    Now we have a shortage of all types of housing and it is the landlords fault.

  18. Let's call it what it is. The Unions own California's Government. Plain and simple.
    Anybody else does this and it is called "extortion", but they can get away with it because they own the Government.

    People need to take a look at some of these business that are being bad mouthed. 99 times out of 100 it is Union bullshit.

  19. If these stupid woke corporations could see that these people would turn on them on a dime, then I don't feel sorry for them. They should have built these distribution centers in suburban areas and they probably wouldn't have had to deal with this.

  20. Also - if you try to open ANY kind of business in San Francisco, you're a blithering idiot.

  21. Simple solution. Amazon stops delivering to San Francisco. Blame city hall. Every time someone from there signs on and want a delivery, just send a message, "sorry, in light of the shakedown, we cannot deliver to your area."

    Course that will never happen.

  22. Amazon could make donations to a few genuine libertarian candidates in California. After all, all it took was ONE Buffalo Party combination rock concert and party convention to frighten the looters of both stripes into banning all concerts everywhere they could. In the instant case they'd have to copy our planks. Mimicking LP candidates from the teeth outward fails here all the time.

  23. God I hate that city. I hope nothing is ever built on that property.

    1. Maybe a more altruistic development:

      "George Floyd Memorial Park and Activism Coordination Center"
      Some broken swing sets. 2 Basketball courts w/ a single rim remaining (off-kilter, no net). 4 picnic tables, 1 with no bum sleeping under it. Cinder block building w/ meeting room, folding chairs, whiteboard. "Community Library": Marx, Marcuse, Chomsky, Zimm; good number of sociology, semiotics, Anthropology, Poli-Sci textbooks, never checked out. And an embarrassing number of old Harlequins with Fabio on the cover. Hey, a donation's a donation.

      Humble, BUT AT LEAST IT'S NOT SERVING THE CAPITALIST BEAST!!

      Staffed by...well, an Open Society grant covers several salaries of people who are never there. Actual staff: 1 Council member's nephew, who sells crack and fentanyl out of the library part.

      Huh. I could probably run a modest-sized blue city. But I'm not union.

      1. In SF, what you describe is what "we" get as a result of 'remediation funds'.
        Originally, this was intended to pay for infrastructure for streets suffering additional wear from trucks and so forth.
        Didn't take long for the BoS to appoint themselves the arbiters of how the money was spent.
        Well, a 'Neighborhood House' sounds neighborly, right? And if it is staffed by those who worked on the Supervisor's last election (and the next one, too), no harm done.
        This was allowed to become law while Newsom was mayor; he didn't veto it, as that would likely have had him missing a photo op.

  24. Just another way to steal money from those in this world who are productive. And The City is extracting a tax on the universe of Amazon users and workers. Who are greedy bastards wanting mo’ money.

Please to post comments

Comments are closed.