Republican rent-control foe gives $500K to Mark Farrell ballot-measure committee

Coates family’s big give indirectly funnels half a million dollars to candidate, and donation to independent committee eludes contribution limits

Man in green jacket and glasses sitting on a sailboat, looking pensively at the water, with overcast sky in background. by JOE RIVANO BARROS JULY 8, 2024 (MissionLocal.org)

Mark Farrell and his team try pastries from Sunny Wheatfield Cafe on Irving Street. April 30, 2024. Photo by Kelly Waldron.

A ballot measure committee mayoral candidate Mark Farrell spun up in March disclosed on Friday evening that it had received another $570,340 in donations in just a two-week period from a handful of wealthy donors. Notably, that list includes Thomas Coates, a millionaire real-estate investor and one of the major longstanding opponents of rent control across California.

The measure Coates et al. are donating to caps the number of city commissions and increases mayoral power. Farrell did not start the effort; it was initiated by TogetherSF, the big-money group that shares extensive ties with the Farrell campaign. TogetherSF is led by a former Farrell aide, and three members of his campaign team are former or current TogetherSF staff.

On March 18, Farrell established a committee, called “Mayor Mark Farrell for the Cut the Dysfunctional Bureaucracy Initiative,” to help pass the TogetherSF measure. 

A candidate forming a committee to raise funds for a ballot measure while simultaneously running for office is a time-honored practice. San Francisco caps contributions to candidates at $500, and bars corporations from giving to them altogether. Ballot measures, however, can accept unlimited individual and corporate funds, even when they are being run by a candidate for office, like Farrell. 

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So candidates create committees to back a measure, and wealthy donors who want to fund those candidates but are hamstrung by donation limits have a clear avenue: Pour money into the ballot committee instead.

In 2002, for example, then-Supervisor Gavin Newsom set up his “Care Not Cash” committee to pass a measure reducing welfare checks and putting the savings into homeless housing and services. By the end of the election, Newsom’s committee had raked in more than $960,000; he would successfully run for mayor in 2003.

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More recently, in January, Daniel Lurie appropriated a measure put on the March 2024 ballot by Mayor London Breed (Proposition E) and created his own committee to help pass it. Lurie’s committee raised almost $700,000 and bought ads on national networks like CNN and MSNBC. He then used those ads to push for Prop. E, but also to introduce himself to millions of viewers, advertise his “career fighting poverty,” and appear on screen talking to voters and walking with his children. 

Farrell will likely do the same. As long as the ballot measure’s ads do not mention his mayoral campaign, they can feature Farrell as often as he likes. His ballot measure campaign and his mayoral campaign can also commingle resources — like staff and consultants, office space, and legal expenses — as long as the two committees reimburse one another.

Though common, the extent of Farrell’s shared spending is unusual: About 70 percent of the total spending by the ballot measure committee so far has been in payments to Farrell’s mayoral campaign.

July Spivack event

Majority of spending by ballot committee is shared with Farrell’s mayoral campaign

“It’s a pretty longstanding way for rich people to support candidates,” said Jim Ross, a Bay Area campaign strategist on Newsom’s Care Not Cash initiative and subsequent mayoral run. 

Ross, who now generally works with labor-backed and progressive candidates, called out the “shell game” whereby donors can fund such third-party groups, and said the spend “raises questions about Coates’ influence on [Farrell’s] campaign and his mayoralty.”

Farrell’s campaign declined to comment. The recent donations brought his ballot-measure committee’s total fundraising to almost $1 million.

Rent-control opponent a longtime supporter of Farrell

The vast majority of the newly reported influx to Farrell’s ballot measure committee — half a million dollars — came from the same source: The Coates family. Thomas Coates, the chairman of Jackson Square Properties, which says it owns 19,000 units across the country, gave nearly $1 million to an unsuccessful 2008 effort to repeal rent control across the state. He also donated six figures to pass then-Supervisor Mark Farrell’s Prop. Q in 2016, outlawing tents on sidewalks in the city.

Thomas and his wife Linda gave $250,000 each to the committee.

“He’s a mega landlord, he’s been trying to get rid of rent control for, like, 15 years,” said Shanti Singh, the communications and legislative director at Tenants Together, a statewide renters advocacy group. 

In a city like San Francisco, Singh said, it is “really consequential” when deep-pocketed donors like Coates support a mayoral candidate, and she worried about what his donation might mean for renters’ rights if Farrell were elected. In April, Farrell called San Francisco’s rent-control laws “onerous.”

It is not the first time the Coates family has helped Farrell.

The Coates have given at least $161,500 to support Farrell since 2010, when he first ran for office as District 2 supervisor, according to local filings; they either donated to the candidate directly, or to independent expenditure committees supporting him. The family lives in the Marina, Farrell’s district, and owns multiple properties across San Francisco, according to property records.

Some of Coates’ giving led to a 2015 fine, at the time the city’s largest, when Farrell was threatened with a $191,000 penalty for allegedly coordinating with an independent committee to keep voters from choosing his opponent. Farrell won that 2010 race by just 258 votes. 

The Ethics Commission later reduced the fine to $25,000. It said it agreed with a state finding that Farrell was “not aware of [his campaign manager’s] actions,” but the commission vote was 3-2, and one of the commission members subsequently resigned, saying the body was ineffectual.

Coates could not be reached for comment. The husband-wife pair have given at least $2,136,499 to San Francisco races since 1998, according to local filings, including to business-friendly PACs and groups supporting District 2 Supervisor Catherine Stefani. Nationally, the two have given at least $892,502, according to federal filings; 85 percent of that, $758,802, has gone towards Republicans.

Farrell close to big-money group Neighbors for a Better San Francisco

In June, Farrell raised eyebrows when his mayoral campaign received $57,415 from Farrell’s ballot measure committee. His team said it was reimbursement for office space and canvassers; rival campaigns said Farrell’s ballot committee was subsidizing his mayoral race.

Farrell has no shortage of potential big donors with which to potentially continue this arrangement: He has in his corner one of the top-spending groups in San Francisco politics, Neighbors for a Better San Francisco. The group, formed in 2020, is a collection of moderate- and right-leaning donors who have, in quick order, funded a slate of moderate candidates and bankrolled the 2022 recall of then-District Attorney Chesa Boudin

In April, the San Francisco Chronicle reported that Neighbors’ executive director, Jay Cheng, positioned himself as a decision-maker in the choice to hire a campaign strategist for Farrell; the campaign said it was not working with Neighbors.

While the group said it is officially staying out of the mayor’s race, its donors aren’t. In June, the group endorsed Farrell and Daniel Lurie for mayor, signaling to deep-pocketed San Franciscans where they should put their money.

They’ve obliged. Already, at least eight Neighbors donors (or their spouses) have given more than $730,590 to Farrell’s ballot-measure committee. That includes Coates and his wife, the Republican mega-donor and Neighbors president William Oberndorf (who gave $45,000 through his company), and billionaire investor John Pritzker (who gave $100,000).

“It’s even more questionable than just ballot measure ads,” Ross said of the two committees sharing campaign infrastructure. How could a press secretary accurately log their time between both committees, he asked, or a field director? The two committees, Ross said, are “one in the same.”

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JOE RIVANO BARROSSENIOR EDITOR

joe.rivanobarros@missionlocal.com

Joe was born in Sweden, where half of his family received asylum after fleeing Pinochet, and spent his early childhood in Chile; he moved to Oakland when he was eight. He attended Stanford University for political science and worked at Mission Local as a reporter after graduating. He then spent time in advocacy as a partner for the strategic communications firm The Worker Agency. He rejoined Mission Local as an editor in 2023.More by Joe Rivano Barros

Source: https://missionlocal.org/2024/07/farrell-thomas-coates-sf-ballot-measure-rent-control-neighbors/?utm_medium=email&utm_source=Mission+Local&utm_campaign=44ad9a0ea2-EMAIL_CAMPAIGN_2024_07_08_05_09&utm_term=0_-44ad9a0ea2-[LIST_EMAIL_ID]

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