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Timeshare Classic: Remaking the Mint
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This story ran in the San Francisco Examiner 2/14/2003. It is reprinted here in its entierity.
Publication date: 02/14/2003
Remaking the Mint
BY MARK SILVERMAN
Special to The Examiner
Keep your eyes on the Board of Supervisors. There is the slim chance that it could do something virtually unprecedented. It could, just maybe, make an intelligent decision.
The issue is what to do with the landmark San Francisco Mint, left idle since the federal government shut it down in 1994, rather than spend $20 million on a seismic retrofit.
As reported by the Examiner's David Kiefer, three competing plans were evaluated by an advisory task force. The option it forwarded to the Supes for final approval: a San Francisco's history museum.
Whichever plan is finally picked, its developers will have to pony up the now $50 million for the retrofit.
Chris Daly, supervisor of District 6 in which the Mint is located, favors this museum proposal's high level of public use. But he warns it may be years before the city finds the funds to complete the project.
The second proposal includes below-market rental housing, hoping to attract federal subsidies to cover the retrofit costs. Nobody I've spoken with gives that plan much credence
The final plan involves converting the upper floors of the Mint to a luxury, fractional timeshare, developed by industry leader Destination Club Partners. The street level would house The Gold Rush Museum, celebrating the Mint's history and operated by the American Numismatic Association. Don Kagin, an expert in the study of currency, says it would be the first such museum and a lure to coin collectors everywhere.
Converting the entire building into a museum, as recommended by the task force, raises more questions than answers. The biggest is where's the bucks? It will cost money to renovate and retrofit the building, and to operate it.
Sen. Dianne Feinstein has proposed legislation to issue a commemorative coin expected to raise about $9 million toward the project. Jim Lazarus, executive director of the San Francisco Museum and Historical Society, said $10 million could come from state and federal grants, and the rest from loans and city bonds. And there are annual taxpayer subsidies to operate museums.
But, DCP's proposal to create the city's first private residence club turns a white elephant into a financial asset. Save for tax credits associated with landmark preservation, no public money would be needed.
And DCP has a proven track record with its development of the Phillips Club in New York City.
The numismatic museum also is in keeping with the building's roots. Kagin points out that Feinstein's commemorative coins would likely sell much better if collectors understood the proceeds would fund a museum devoted to coin collecting. Many might even lend their collections to the museum.
Thirty two-bedroom condos shared by 180 owners would bring serious cash to the city. Annual property taxes would be hundreds of thousands of dollars per year. Yet, owners would place no burdens on much of the city's infrastructure, such as schools.
Fractional owners are often accompanied by friends, adding to the $500 per day average spent by each unit on dining, shopping and entertainment. And, fractionals are occupied almost 90 percent of the time, compared to hotels' 60 percent occupancy rates.
Daly is concerned that his constituency, among the poorest in the city, would not get much use from the luxury timeshare. My guess is some of Daly's constituents might benefit from the 30 to 40 full-time jobs created by the resort, as well as the financial ripple effect from visitors.
There also is precedent for public-private partnerships preserving landmarks. The 1847 Customs House in Boston sat vacant for almost 14 years until Marriott stepped in, making it home to 84 timeshare units and restoring the original structure. The project was a 1999 National Preservation Awards winner.
Consider the options, San Francisco. A museum with questionable appeal, uncertain finances and ongoing cost to the city. Or a partnership that creates a museum with built-in, international appeal, private funding and an ongoing stream of revenue to the City.
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