Tax Base Erosion Night

It is that time of year again, with lobbyists circling City Hall in preparation for the General Plan hearings.

With the leadership of Mayor Reed, modifications to our General Plan (GP) have been reduced to once a year, for the most part. At the GP hearings, applicants make their case as to why current land-use designations should be changed to allow for the applicant to build what they want, regardless of how the land is currently zoned.

These “conversion” requests are typically for land that is industrial/commercial to housing.  Or it could be extending the urban growth boundary to allow for more suburban sprawl. By the way, San Jose currently has over 21,000 units of housing approved and entitled on land zoned residential that has not started construction.

With more conversions of our industrial, commercial and retail land, we are pecking away the tax base a little at a time, which narrows our future options down the road.

Either you view San Jose as a dead city with little chance of economic growth (so go ahead and convert each proposal put before you because it doesn’t matter), or you have the view that there is future potential for San Jose to bring more small business and large business. I feel San Jose has not reached it’s potential but will be severely handicapped if we allow death by a thousand cuts when it comes to land use. San Jose will be fighting for a smaller piece of the economic pie in the United States as globalization continues and our national debt reels out of control. San Jose should control it’s destiny by standing firm in not changing land-use designations to housing.

At the budget hearings on Nov. 18, I shared that I would have a very difficult time asking employees for wage concessions if the Council cannot hold the line on the conversion of employment land. Seems only fair: If you are going to ask someone for money to pay your utility bill, don’t leave the furnace on all day when you’re at work. The Council has had to tell residents and employees “no” this fiscal year because of past decisions. I cannot and will not jeopardize more city jobs that provide services with conversions that hurt our future tax base.

In one of my first votes on the City Council, I voted to rezone industrial land to housing. I later wrote about my regrets regarding this vote.

One of the proposed exceptions that the Council denied in May 2008 on a 6-5 vote is back again with a different lobbyist. The same property owner also owns land where the proposed baseball stadium would be located. I met with the property owner representatives who said if the City would rezone this piece of land then they would consider selling the other piece of land to the City for baseball. I believe each rezoning should be judged on its own merits and not tied to a quid pro quo. I wrote about this property the last time it came to Council.

Exceptions to our General Plan (tax base erosion) will be heard Tuesday, Dec. 7, not before 7:15pm. I would be impressed if more than one person, whether it be city employees or San Jose residents, would speak at the Council meeting and simply say, “hold the line—please do not convert our future tax base.”

Congratulations to the Willow Glen Rams winning the CCS Division 2 Football championship over Sequoia of Redwood City. An incredible season that rallied the school and neighborhood. The star quarterback is the son of my classmate and friend from Willow Glen High. Sadly, my friend passed away from cancer several years ago however his son is the spitting image of his father, which makes it a very special victory.

27 Comments

  1. Pier,

    Sadly, I do view “San Jose as a dead city, with little chance of economic growth.”  That doesn’t mean that I’d like to see zoning conversions continue.  It does, however, make me wonder why all of the other muncipalities in our area seem to be well-managed and have viable futures. 

    To my regret, the politicians and unions and lobbyists and developers have FUBAR’d our City.  As a lifelong resident, it saddens me to think that I’ll not see San Jose rise to its former greatness in my lifetime.

  2. Pierluigi:

    An interesting and thought provoking analysis.

    Although I am instinctively suspicious of “zoning” and “general plans” because it strikes me as a corrupt system of backroom horsetrading conducted by creepy low-lifes and political ideologues, your points are well-taken.

    Enlighten us, please, on how the issue of “affordable housing” plays into the issue of “tax base erosion”.

    My perception is that “affordable housing” is a code word for steering govenment subsidies and skid greasing to unionized developers and contractors to build unneeded housing and to achieve social engineering ends that in an earlier, more honest era, would have been described as “block busting”.

      • Thanks.  Now I’m mad all over again.

        Why don’t the lunkheads on the city council spend more time on “affordable taxes” and “affordable business licenses” and less time on “affordable housing”.

        If I bring my own bullhorn, can you arrange a two hour time slot for me to address the council.  They won’t need potty breaks.

        • Bronco, I haven’t agreed with you on much, but on this, we are certainly in agreement. All affordable housing is, is income redistribution with a pretty name. Taxpayers pay for someone else’s housing twice over: once through the taxes they pay and again, when homeowners buying at the so-called market rate absorb some of the cost of someone else’s house into their own purchase price. And, believe me, I get livid every time I think about it.

  3. Since we don’t have a Rants & Taves any more, I’ll post these items her.

    Ken Heredia retired as a firefighter in 1999, with an annual pension of $83k.  Eleven years later his pension is $112k, according to the Murky News.  And Mr. heredia is screamin bloody murder ‘cuz the council stopped this years bonus payment.

    Yo, Ken, Social Security recipients haven’t had a COLA for the last two years, you’re gettin’ $112k and you’re pissed ‘cuz you’re not getting a bonus.

    And you wonder why the attitude toward firefighters has changed dramatically?

    But wait, there’s more.  The firefighters retirement board unanimously approved a disability pension for former fire Capt. Mark Skeen, WHO WAS FIRED FOR SUBMITTING FRAUDULENT TRAVEL EXPENSES!

    And, deficit-ridden Team San Jose is now GIVING AWAY meeting space to any group who books 150 room nights.  Great!  They’re $750k in the hole to the taxpayers and they’re giving the product away to small groups.

    • Yo, Ken, Social Security recipients haven’t had a COLA for the last two years, you’re gettin’ $112k and you’re pissed ‘cuz you’re not getting a bonus.

      He is getting a retirement salary that is more than what 90% of the working population makes working fulltime.

    • “And you wonder why the attitude toward firefighters has changed dramatically?”

      So the actions or opinions of a few should dictate your perspective of the group as a whole…??  Really, Mr. O’Connor ??

      The Firefighters in the City of San Jose are professional, honorable, and selfless in their actions to save YOUR life if the need arises.  Regardless of your opinions related to pensions and pay, your blanket statement that your attitude toward firefighters has changed inferring toward a non supportive position is juvenile and you should be ashamed of yourself.

      If you really want to form an unbiased non mercury induced opinion of your local Fire Department then go visit a station more than once and get to know the people who put their lives on the line for you.  I challenge you….. although, seeing your consistently demeaning posts here toward the firefighters I doubt you would ever put forth the effort.

      Irregardless, should you ever need them rest assured that they will provide you with the best service possible…… providing your nearest station hasn’t been closed down then you’ll be waiting awhile.

  4. Past and Present Mayor’s and Council talk a good story about not converting industrial / commercial to residential and then convert more year after year and not use economic development or high density or other reasons for conversion, tax subsidies or both when real numbers – increased taxes, good jobs, higher city service costs / budget deficits etc don’t justify conversion – just helping political insiders and lobbyists make more money while San Jose gets worst and worst with less less city staff, services, jobs, businesses and tax revenues

    – iStar for Lew Wolff
    – San Pedro Market Square for Tom Mc Enery
    – VTA / San Carlos for Barry Swensen
    – San Jose A’s Baseball stadium – Lew Wolff

    and many many more

    What is amazing is that after 10 years –  city labor unions – (  not South Bay labor construction unions and their elected Council members who will always support more residential construction ) –

    don’t understand that more residential conversions means more required city services but less businesses, less jobs, higher local taxes rates, poorer paid jobs ( city, airport and private ) resulting in less city taxes, more pay and pension cuts, and less, less city staff – again and again

    City Staff, services, pay, pensions etc WILL BE CUT each year for at least next 3-5 years OR MORE

    UNLESS San Jose makes more, not less land available for business, cuts business taxes and speeds up approval process ( without using lobbyists ) which could result 1000’s new jobs, businesses and millions taxes

  5. “- VTA / San Carlos for Barry Swenson”

    Correction. This parcel was already zoned for housing in the 2020 General Plan.

    iStar-
    was proposed as a conversion from industrial to housing so as to give a higher land value and therefore money to the developer to pay for soccer stadium however that did not go forward since it is not really appropriate. However I would not be surprised if it resurfaced.

    • “iStar for Mr Wolff—conversion from industrial to housing”

      wow !

      This could very well be the *missing link* of how Mr. Wolff will be paying (in part) for the M$450 baseball stadium !!!

      This conversion is also (one of the many) ways citizens of San Jose will all have to pay for the stadium …

      even though Mayor Reed keeps touting his negotiating principles with the A’s …

      vote NO, join http://www.bettersensesanjose.org !

  6. Took me five minutes on the council agendas to see that the property owner referenced is AT+T/Pacific Bell, one of the few remaining hold outs on the site of the proposed baseball stadium at Diridon Station. 

    The quid-pro-quo for ATT would be a development between Santana Row and I-280.

    There is a pattern here, and it has to do with a City Council wanting a baseball stadium at any cost:

    The SVSE earlier this year got their quid-pro-quo to not oppose the S-EIR anymore, this was the power of RDA’s eminent domain to be able to acquire land for a parking garage just north of the HP Pavilion.

    What quid-pro-quo do all the neighbors of this proposed stadium get—they will actually have to live with noise, parking, traffic ??

    Who stands up for us ?  Our electeds ?

    Join http://www.bettersensesanjose.org !  Vote NO !

    P.S. Fortunately for us your position against land use conversions here coincides with standing against quid-pro-quos.

  7. Mr. Oliverio,

    I am a D6 voter, and while I have never posted to SJI before, I have been watching and reading for a while.

    First, I want to say thank you for your weekly postings that provide me with information and (some) transparency about the workings of our city council.  Second, thank you for your thought process and analysis in this posting.  It sounds like you are thinking strategically about making San Jose more prosperous in the years ahead, and that you are in the “San Jose has potential” camp.  I appreciate that.

    I look forward to reading more of your weekly updates.

  8. Any thread titled “Tax Base Erosion Night” needs to have a link to this article by Joseph Vranich:

    http://foxandhoundsdaily.com/blog/joseph-vranich/8315-as-more-businesses-flee-california-schwarzenegger-deserves-worst-governor-a

    Although this thread concentrates on the erosion of San Jose’s tax base, it is worth considering what bad state government policies are doing to California’s economy, i.e. chasing job creators out of state. Unfortunately, this trend will continue with Democrats maintaining control in Sacramento.

  9. Housing developers 10 years ago developed ” everyone get richer except public and taxpayers ” procedure for Council approval of industrial / commercial rezoning to residential which increased land value $1-1.5 million acre after Council vote

    1) Developers amd lobbyists take Mayor Ron Gonzales 2-4 times a week to play golf, sports events and dinner at posh resorts, professional sports and restaurants but never talk business – wink, wink – that is jobs for staffers and lobbyists

    http://www.metroactive.com/papers/metro/06.16.04/gonzales-0425.html

    2) Developers hired former San Jose Planning Director as lobbyist who showed Council how planning rules and previous exceptions which he wrote justified making more planning exceptions to approve residential rezoning.  He was paid bonus for each greater density approval and his firm said they bundled more campaign contributions than any one else in San Jose so got immediate Council access and review developer rezoning proposals 4 times a year vs previous once year rezonings

    3)Developers and sub contractors contributed $1000’s to Mayor and Council campaigns with implied political payback of rezoning commercial / industrial property to residential

    4) If project was in RDA area or low income Housing Council approved tax subsidies, resold RDA property or development credits to make deal more profitable

    5) Council gave developer insiders exceptions to city fees for parkland, granted time limited incentive development exceptions or reduced other typical high city fees which increased inside developer profits

    6) Many former Mayors, Council, political staff and city staff became lobbyists or land use consultants to help publicly justify residential developer approvals They paid very well and got help from friends still on city and political staff – ” the proposed rezoning / development project will create more jobs and increase taxes and is in San Jose public’s benefit – wink. wink, nod nod

    7) South Bay Labor was able to elected Council majority with residential developers and public building contractors campaign contributions
    Labor received labor jobs for large housing and public construction projects – City Hall, airport, community centers, libraries, police and fire stations etc

    8) All developers, contractors, former political and city staff insiders make big money and city staff who was supposed to be ” public servants” looking out for public and taxpayers were rewarded with large pay increases and increasing 75-90% pensions for being helpful to developers and South Bay Labor

    9) Developers, contractors have their millions and city staff have their high pay and pensions while public have less services, higher city fees and taxpayers get higher taxes

    10) Residential developers will be going to Council tonight for more million $ per acre approvals and professional Sports team owners will get more tax subsidies, credits, fee holidays, rezonings and Council approvals so they get richer as public expense, less city services and future tax increase

    Anyone disagree on how it happened, who benefited, how public and taxpayers will be paying for years ?

    Any other comments on ” How Developers Got Richer, Budget Deficit Grew ” ?

  10. There is a long list of folks who want GP conversions and if this goes through, they will have discovered the ticket—-promise to build another building somewhere else at some unspecified time in the future that absorbs some fraction of job potential that already existed. Call it “extraordinary benefit.”

    The Planning staff report makes no mention of the ATT/Ballpark sale link. Yet, the calculation of the 1 sq ft increase of employment capacity makes it look like higher ups told the Planning Dept. to create an analysis to prove there was an increase.  Awfully tiny increase considering the size of existing buildings and that the City Council has already approved a growth scenario that focuses on job creation.

    If this is part of a negotiation between RDA and ATT for land at the ballpark, then the burden of employment potential loss from this site—using real numbers and growth oriented FAR—should be shifted to the economic analysis of the ballpark—and shared with voters. Include the phrase “the city is able to provide the land to the baseball team by giving away development rights on employment lands in other parts of the city. This reduction in employment lands will continue the structural deficit that leads to decreases in city services and more unfilled potholes.”

    Let’s get the RDA/ATT dealing out in the open, throw some sunshine on it, and let the stink rise.

    If the ballpark is so important to decision-makers, then decide to use eminent domain.

  11. Eloy Wouters,
    Why don’t you just move to Los Banos, and take your small town thinking with yah.
    The Big City that is San Jose wasn’t meant for you.  A real “Better San Jose” is on the way!
    A’s to SJ!

    • Anthony Dominguez, the thing is, why is my 1,000 or so neighbors investments by buying a house in San Jose less valuable than Wolf’s M$450 ?!!  My neighbors and I also employ people to fix our homes, maintain our gardens, etc., pay property and sales taxes etc.  We enjoy San Jose for its trails, museums, ballet, symphony, SJ Giants …
      Just putting in a MLB stadium is not going to suddenly put San Jose on the map, I hope to think that I live in a real big city, and dislike the attitude of some people that somehow it is less than San Francisco !

  12. To help clarify for those of us not in government positions, one of the rezonings scheduled for tonights meeting has to do with an abandoned, asbestos riddled commercial building located at Monroe and Tisch. This building now the only commercial building amongst a lovely residential neighborhood. I live right next to this building and have had to deal with the vagrants who deface the property. To not rezone to residential would mean that we would end up with another commercial building smack in the middle of our homes. If you take a closer look at the exact projects being discussed and get all the facts on the sensiblity of it, I think you would see that, in this case,  this one small change is the right thing to do.

  13. Let’s look at published findings as a David Letterman type of list – the “Top Ten Reasons Why California Companies Are Calling the Moving Companies.”

    #10: The Tax Foundation in their newest report lists California at No. 48 for tax fairness – ahead of only New York and New Jersey.

    #9: The Rose Institute of State and Local Government reported in the latest “Cost of Doing Business Survey” that California cities continue to be some of the most expensive locations to do business in the United States.

    #8: The Pacific Research Institute found that California’s labor performance in a recent five-year period is among the worst performing in the nation.

    #7: The Civil Justice Association of California said the state ranks 44th in legal fairness to business. Los Angeles was again named the least fair and reasonable litigation environment in the entire country.

    #6: A study by the consulting firm Bain & Co. found that an astonishing 60 percent of California business leaders said they have policies in place to restrict job growth in the state or move jobs to other U.S. locations.

    #5: Again from Bain & Co. – they’re a busy group – they measured the cost, uncertainty and complexity of regulations and constructed a “regulatory hassle index” and “California is far worse than any other state by a very significant margin.”

    #4:  The Small Business & Entrepreneurship Council in Virginia found that California ranked 49th overall in terms of business friendliness.

    #3: The Associated Press calculates what it calls a monthly “misery index” – California is close to the bottom of the list.

    #2 Extravagant state spending continues and pollsters have found people are much angrier about California government – more than they’ve ever been in recorded polling history.

    And the #1 reason why California companies are calling the moving companies” – Chief Executive magazine recently found California to be the worst state in the nation in which to do business. Texas was found to be the best.

    It’s no wonder that California has lost more than one million jobs in recent years while Texas employment levels have remained relatively stable.

    The governor said on national television the other day that the economy is turning around in California.

    Well, when a real economic turnaround occurs, California is likely to lag behind other states.

    The Brookings Institution – a substantial liberal organization’ they’re very credible – said in December that our cities have nearly the poorest recovery rates and – here’s a shocker – old “rust-belt” cities like Pittsburgh and Buffalo are actually having a faster economic recovery that our cities.

    San Jose is losing more jobs and businesses than any city in Silicon Valley due to Council policies high taxes, unreasonable fees and approval process an

  14. > It is that time of year again, with lobbyists circling City Hall in preparation for the General Plan hearings.

    Perhaps the City could require lobbyists to pledge to a code of ethics.

    Perhaps Charlie Rangels stirring declaration of cleanliness could be a model:

    “In all fairness, I was not found guilty of corruption, I did not go to bed with kids, I did not hurt the House speaker, I did not start a revolution against the United States of America, I did not steal any money, I did not take any bribes, and that is abundantly clear,”

    I say, if it’s good enough for Congress, it’s good enough for a San Jose lobbyist.

    • “In all fairness, I was not found guilty of corruption, I did not go to bed with kids, I did not hurt the House speaker, I did not start a revolution against the United States of America, I did not steal any money, I did not take any bribes, and that is abundantly clear,”

      A long-winded version of Tricky Dick’s “I am not a crook”.

  15. I shouldn’t be surprised at how the deep and oily the baseball stadium fix oozes into our city’s governance. Thanks Eloy Wouters. To the larger question, is San Jose a dead city? It is certainly a stumbling, bumbling city. Here we are, situated among the most creative and innovative communities in the country, and we have officials with 10 left thumbs, and they are sucking on all of them. Team San Jose, the probably death of Downtown Christmas, the screwups in Redevelopment and finally, a baseball as an overriding goal as a dubious solution to the town’s economic slowdown: what’s going on here? Part of the answer is that San Jose remains a small town. That can be charming (as in Downtown Christmas). But it also means that too much of the city’s important functions are left to amateurs Team San Jose is the most glaring example. What are those good old boys doing overseeing the management of some of the most important real estate in the state? The M-N and even Metro have landed on the labor special interests. Look at Team San Jose’s board; yes, Labor is there, but so are Business and the Arts. The mismanagement of Team San Jose and redevelopment is probably not due to venality—I’m not suggesting criminal or civil action—but in most states, boards of directors bear direct responsibility, and in some cases, liability, for the organization’s finances. It’s time for San Jose to join the big leagues. Forget the stadium, which won’t get us nearly as far as fixing our schools and refocusing on Downtown. Don’t believe that a stadium will make things better, especially Downtown. If you want to fill up those condos, you need to make the area livable, and the proven degradation that a stadium brings to streets and neighborhoods hardly invites new residents. San Jose has so much going for it, mainly thanks to a previous generation—people like the Packards and Wozniak. San Jose is now frittering away that legacy, and if that continues, this will be a dead city.

  16. Let’s look at published findings as a David Letterman type of list – the “Top Ten Reasons Why California Companies Are Calling the Moving Companies.”

    http://arc.asm.ca.gov/inc/customPage.aspx?pid=47

    #10: The Tax Foundation in their newest report lists California at No. 48 for tax fairness – ahead of only New York and New Jersey.

    #9: The Rose Institute of State and Local Government reported in the latest “Cost of Doing Business Survey” that California cities continue to be some of the most expensive locations to do business in the United States.

    #8: The Pacific Research Institute found that California’s labor performance in a recent five-year period is among the worst performing in the nation.

    #7: The Civil Justice Association of California said the state ranks 44th in legal fairness to business. Los Angeles was again named the least fair and reasonable litigation environment in the entire country.

    #6: A study by the consulting firm Bain & Co. found that an astonishing 60 percent of California business leaders said they have policies in place to restrict job growth in the state or move jobs to other U.S. locations.

    #5: Again from Bain & Co. – they’re a busy group – they measured the cost, uncertainty and complexity of regulations and constructed a “regulatory hassle index” and “California is far worse than any other state by a very significant margin.”

    #4:  The Small Business & Entrepreneurship Council in Virginia found that California ranked 49th overall in terms of business friendliness.

    #3: The Associated Press calculates what it calls a monthly “misery index” – California is close to the bottom of the list.

    #2 Extravagant state spending continues and pollsters have found people are much angrier about California government – more than they’ve ever been in recorded polling history.

    And the #1 reason why California companies are calling the moving companies” – Chief Executive magazine recently found California to be the worst state in the nation in which to do business. Texas was found to be the best.

    It’s no wonder that California has lost more than one million jobs in recent years while Texas employment levels have remained relatively stable.

    The governor said on national television the other day that the economy is turning around in California.

    Well, when a real economic turnaround occurs, California is likely to lag behind other states.

    The Brookings Institution – a substantial liberal organization’ they’re very credible – said in December that our cities have nearly the poorest recovery rates and – here’s a shocker – old “rust-belt” cities like Pittsburgh and Buffalo are actually having a faster economic recovery that our cities.

    San Jose is losing more jobs and businesses than any city in Silicon Valley due to Council policies high taxes, unreasonable fees and approval process an

    • > Top 10 Reasons Companies leaving SJ & CA

      What a coincidence!!!

      These are also the top 10 things that the greenie-weenie trust fund children at the Sierra Club are doing to stop global warming.

%d bloggers like this: