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Bohemian Rhapsody: Artists, Activists Re-Claim Dot.Com San Francisco
by Wall Street Journal
Wednesday Feb 5th, 2003 3:27 AM
While less than 1% of offices South of Market were vacant three years ago, almost half sit empty now, by far the highest vacancy rate downtown. "It's as if a neutron bomb went off -- the people are gone but everything else is here," says Daniel Ben-Horin, executive director of CompuMentor, a nonprofit that supplies technology products and services to other nonprofits.
Bohemian Rhapsody Returns
To Offices of Dead Dot-Coms
Artists, Activists Invade Spaces in San Francisco
That Dot-Com Boom Once Evicted Them From

By NICK WINGFIELD
Staff Reporter of THE WALL STREET JOURNAL

SAN FRANCISCO -- In the South of Market district here, the two-story building at 690 Fifth St. is packed with quirky fixtures of the old dot-com workplace. A fountain trickles in the lofty atrium. Hip-hop music pulses from glass-walled offices as people peck at computers. Rice-paper screens obscure an elegant conference room.

These were once the offices of Netcentives Inc., an Internet flop that marketed worker-incentive and loyalty programs. But look who's here now: a Tibetan rug maker, an Irish arts foundation and an Asian-American theater company. There are also filmmakers, a record label, fiction writers and a couple of dozen nonprofits and artistic groups.

"This will be the beginning of the biggest renaissance in creativity in San Francisco history," says David Latimer, who manages the building. He's encouraged because these are the very folks the dot-coms began squeezing out of the prime real estate just a few years ago. Their displacement sparked street protests, antigrowth measures and fears about the loss of this liberal city's cultural life and its historical soul.
[[David Latimer]]

But they're back, the artists and the activists, reclaiming the neighborhood that once was the epicenter of the thriving Internet scene. The city rode the dot-com boom as startups piled into town, bringing with them lavish launch parties, jobs and prosperity. Now, amid the bust, the rental market has cooled, allowing the dislocated to reclaim turf they were priced out of just a few years ago.

Here in San Francisco, one of the cradles of bohemian culture, artists and gold-diggers have alternately reshaped neighborhoods like no other city in the country. In the 19th century, poets and writers were drawn by the natural beauty, raucous saloons and free-wheeling culture. The Beat movement attracted artists of all stripes to the coffee houses and jazz clubs in the 1950s. In the 1960s, the Haight-Ashbury neighborhood was the prime urban stomping ground for the nation's counterculture movement. And the city has long had a thriving gay community contributing to the cultural milieu.

"People come here looking to find themselves," says Larry Harvey, the founder of Burning Man, a San Francisco organization that holds a popular arts festival in the Nevada desert. "If they're sincere in that pursuit they tend to stay."

But the city has also been a center of manic capitalism. The gold rush of 1849 established San Francisco as a hub of finance. By the end of that century, the city's bohemian community had settled into cheap studios in the Montgomery Block building -- also known as Monkey Block -- downtown. It was one of the city's first major office buildings, abandoned when San Francisco's mining and banking interests moved to other parts of the city. Almost a century later, the pyramid-shaped Transamerica building was erected on the site, a distinctive icon on the San Francisco skyline.

In recent decades, nearby Silicon Valley brought an influx of technology, banking and other businesses, but San Francisco retained its reputation as a bulwark of liberal politics. And a unique mix of businesses and bohemians crammed into a city less than a sixth the size of New York City.
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That precarious balance between the two groups, for a time, seemed threatened as never before by the Internet frenzy. And South of Market, or Soma, as locals affectionately call it, is something of an archaeological record of that boom and bust. Long home to light manufacturing, Soma was also a favorite of dance clubs, museums and artists. The roomy lofts and warehouses appealed to the irreverent sensibilities of Internet companies more than the pricier offices of the nearby financial district. In the late 1990s, Soma came to be known as Multimedia Gulch.

Much of that bustle is gone now. San Francisco and two nearby counties, Marin and San Mateo, have lost more than 73,000 jobs since late 2000. While less than 1% of offices South of Market were vacant three years ago, almost half sit empty now, by far the highest vacancy rate downtown. "It's as if a neutron bomb went off -- the people are gone but everything else is here," says Daniel Ben-Horin, executive director of CompuMentor, a nonprofit that supplies technology products and services to other nonprofits.

While Soma's economic frenzy may be gone, in its place are survivors such as the businessman on nearby Bluxome Street who calls himself Tardon Feathered. Sitting in a 7,200-square-foot loft cluttered with microphones, drum kits and speakers, Mr. Feathered (the name he has gone by for decades) considers the change in fortunes of his business, Mr. Toad's, a recording and video-production studio.

During the boom, many of his aspiring-musician clients disappeared, nabbing steady paychecks instead from Internet companies. Adding to Mr. Feathered's strain two years ago: a threatened tripling in his rent. After the real-estate bust, that never materialized. In Soma, in fact, average annual rents for a common class of offices South of Market run only $17.08 a square foot, roughly a quarter the price several years ago, according to real-estate-brokerage firm Grubb & Ellis Co.

Mr. Feathered's business has since picked up. Artists and musicians are "society's economic equivalent of cockroaches," he says, able to survive during meltdowns.

The bust "has lit a fire under people to be expressive," adds Austin Lewis, a former tech worker, now a clown with Xeno, a circus group in San Francisco.

In many cases, nonprofits are capitalizing on the amenities Internet companies left behind. After cramming its 70 employees into converted apartments in two buildings, CompuMentor now occupies a spacious, 21,000-square-foot place that started out as a Soma warehouse. Later it housed Pets.com Inc. and, when that Internet retailer folded, Netcentives. The previous tenants left behind row after row of expensive cubicles and fancy office chairs. "They're better than what our butts are accustomed to," says Mr. Ben-Horin, CompuMentor's executive director.

At 690 Fifth St., Netcentives left loads of gear at its former building, including cubicles, office chairs and $100,000 of computer servers, estimates Mr. Latimer, the building manager. He stores beer for office parties in a server room where a thermostat keeps the brew, and the computers, cool. "You still need five levels of security to get to your beer," he jokes, fumbling with an access card at the door of the server room.

For Mr. Latimer, finding an eclectic set of tenants has become a mission. He has run an assortment of magazines, including one about psychedelic drugs called "High Frontiers." A longtime San Francisco resident, Mr. Latimer, 48, moved to New York during the Internet boom, after selling "Res," a film festival and publication, to an Internet venture there.

By the time he returned to San Francisco last summer, many of his friends had left. "I said, 'What is gone from the city? All the cool people who had to leave because they couldn't afford it anymore,' " Mr. Latimer says. So he set out to change that. He persuaded real-estate developer Merritt Sher, an investor in one of Mr. Latimer's magazines, to put him in charge of renting Mr. Sher's empty Netcentives offices. Mr. Latimer charges about $250 a month for a large cubicle, Internet access and shared use of the building's conference room.

Tenants here say they like the communal atmosphere of the place, which Mr. Latimer calls Space 690. Before moving in, Nicole Avril, regional director of GenArt, a nonprofit arts group, says she couldn't find an affordable office with open, airy spaces, perks she had grown accustomed to at a dot-com called I-Drive. She left there early last year to return to nonprofit arts administration. That's the field she was headed to, she says, before getting "sucked into the dot-com thing."

Write to Nick Wingfield at nick.wingfield [at] wsj.com
Write to Nick Wingfield at nick.wingfield [at] wsj.com

by Wall Street Journal
Wednesday Feb 5th, 2003 3:29 AM
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