Shelley's term as mayor was filled with challenges, including strikes over discrimatory hiring practices against African-Americans at the Palace Hotel, a public nurse strike in 1966, and a threatened San Francisco Symphony Orchestra strike in 1967. Shelley was mayor during the Summer of Love, a time of great turmoil and radicalism in the Haight-Ashbury and throughout the city. Shelley was faced with riots in Bayview-Hunters Point on September 27, 1966, after a white police officer fatally shot a black youth accused of auto theft. Shelley declared a state of emergency in the city for 6 days. After the riots ended, Shelley took several public steps to improve relations between city government and the African-American community. He appointed the city and county's first African-American supervisor, Terry Francois. Shelley took an aggressive stance against several prominent anti-development mobilizations during his tenure, including movements in opposition to development at the Yerba Buena Center and in the Western Addition. Shelley bowed out of running for a second term in office; his stated reasons were health-related, but it was thought that prominent political forces in the city's establishment wanted a more stringently pro-development mayor in office.
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