SF Weekly has a revealing article in which reporter Chris Roberts shows how this process happened:

But it wasn’t supposed to be this way. For a time, those condos were supposed to be a part of City College’s planned expansion — and, later, affordable housing.

Instead, the once-public property was flipped to the condo’s eventual developer after the former owner, a well-known restaurateur with political connections, whose purchase was partially financed with public money, stiffed his creditors.

….

But the winner was a $4.5 million offer from restaurant owner and then-Small Business Commissioner Gus Murad, a friend and political donor of former Mayor Gavin Newsom who already owned a building on the block — the five-story structure that housed Medjool, well-known as a hangout for city planning officials and political types (and that had somehow been able to build its rooftop deck higher than city zoning code allowed).