The city does feel strongly about camping at Westlake. Some have argued that the justness of the cause means we should look the other way and ignore the city’s no-camping rules at Westlake. But when it comes to free speech, government does not get to do that. We are not allowed to favor one type of speech over another. That is anathema to the Constitution. If we permit camping at Westlake for one group, no matter how worthy the cause, we will be obligated to permit camping at Westlake for any group that wishes to do so as a form of speech. That is simply not an appropriate use for Westlake. This is why we have made City Hall, a civic building that is a locus of political speech, available for camping. Anyone who wants to stay warm and dry can do so at City Hall plaza.
Coming from his position this really the only stance he can take. He's correct that it would be wrong for him to selectively overlook rules for specific groups. The Occupation is an act Civil Disobedience and so a conflict with this rule is both necessary and inevitable. What we can hope is that he had enough influence over the police to keep them from brutalizing people during all this.