Letter: Displacement Threatens Small Businesses Along San Jose’s Alum Rock Corridor

The following was addressed to San Jose Mayor Sam Liccardo, Vice Mayor Chappie Jones and members of the City Council about the imminent displacement of local family-owned businesses in East Side’s iconic Little Portugal neighborhood.

Honorable Mayor and Council Members,

During the past few years, and in several occasions, I have expressed my immense concern in regards to the imminent displacement of several local family-owned small businesses in our Alum Rock and Santa Clara Street business corridor.

Today, I want to express the consternation I feel for not being able to accelerate the process to create rules, policy changes, and other ways to protect the businesses in our business corridor. Just a few weeks ago, four local family-owned small businesses located at the corner of Santa Clara and 24th streets were displaced, all at the same time.

• El Aguila Restaurant, in business at that location over nine years.
• El Divo Beauty Salon, in business at that location over six years.
• California Car & Audio, in business at that location over seven years.
• Botanica y Novedades San Pablo, in business at that location over 10 years.

All these businesses were displaced last month.

The reason being that the location on East Santa Clara and 24th streets is the planned site for a new 84-unit affordable housing development.

Over the past three months, I have done everything possible to help the four businesses stay at their location or at the very least to be supported with a relocation plan. I met with the developer, spoke to city officials, I tried locating the landlord, but I was unsuccessful in getting support for these four businesses. At the end, even after being filed on time, their option to extend lease was not awarded by their landlord for, as per the business tenants, unreasonable circumstances.

The result was that these businesses were to be displaced.

Probably the most concerning issue here is that none of these businesses was notified of the plans for this new development until 90 days before they were displaced. Despite the fact that negotiations for these new planned developments started years ago, and despite the fact that the city of San Jose had received formal applications for awards from the developer to build. No notice was ever given to the four businesses.

None, until a few days before being displaced.

We must understand, each one of these local family owned businesses has an owner and a family. Each one of these businesses has an average of at least three to five employees who also have families. Therefore, these developments are not only displacing small businesses but leaving several families without a job.

We must do something about this now.

Over the past few years the Alum Rock Business Corridor suffered very serious adverse impact caused by VTA’s Bus Rapid Transit (BRT) construction. As a result of the different complications caused by the project during and after those years, over 50 local family owned small businesses have closed including these four.

And now, after the completion of the BRT system, and with the combination of the housing crisis and the imminent arrival of the Google campus and the BART station, the Alum Rock Business Corridor has become extremely attractive to developers wanting to build multi-unit housing along the corridor thus increasing the high risk of displacement and gentrification for our business corridor.

At this time, we know of at least 11 different developments wanting to build along our corridor. And they all want to start building within the next few years, imagine how our business corridor will look like between 2020 and 2024 when most of these developments, including BART, are being built. Imagine all of the disruption that these developments will be creating by being built at the same time. Our business corridor will look like a war zone, reminiscent of the past state during the BRT construction phase.

BART has announced their plans to start building at the end of 2020, their time of constructions is estimated at around five years. Nonetheless, at the same time as BART is being constructed, at least nine other developments (that we know of at this time) will be building their developments within the Alum Rock-Santa Clara Street business corridor. That means that at least between the end of 2020 and 2024 our business corridor will be in construction yet again.

Unless we have an adequate coordination program between city, Santa Clara County, the VTA, and developers implemented to measure and lessen the impact to small businesses, not only will the “directly displaced” small business will be affected, but many more will also suffer irreparable impact and may also be left out of business.

To put this in numbers, around 50 percent of the local family-owned small businesses along our business corridor and surrounding areas are at high risk of being displaced. Yes, 50 percent, or an estimated 200 businesses and over 1,000 jobs, may be lost.

Consequently, it is of great urgency that when building big structures like BART and the Google campus the city, county, and all parties involved coordinate with the many other developments that will be building at around the same time.

I appreciate the all the input and support I have received from the San Jose Office of Economic Development within the past few months, they are doing their part and I see their genuine intention to find solutions to the horrible situation our local family-owned small businesses are going through.

However, we must expedite this process and take action to explore, find, and approve strategies and financing tools to mitigate small business displacement.

These local family-owned small businesses represent our community, the constituents you serve, and the dreams of San Jose families. Families who are trying to pay a mortgage, put a son or daughter through college, or simply keep up with the cost of living in one of the most expensive places to live in the United States.

We urge our public agencies to establish policies and regulations that can counteract the effect of business displacement. We must come together to protect our small businesses and families from displacement.

At this time, we are seeking policies and programs that can provide:

1. An Anti-Displacement Resource Unit within the city of San Jose with an effective anti-displacement program for locally-owned small businesses in risk of being displaced.

2. A policy to enforce reasonable and effective notification to business tenants (including sub-tenants) as soon as a permit or bid is presented to build a new development.

3. Access to affordable commercial or retail space with long-term lease options for established businesses.

4. Relocation grants for those who are displaced, even if the planed development is not an affordable development.

5. Protecting and preserving those culturally serving businesses and the cultural character and/or “flavor” of the corridor.

6. Legal code to be changed to request a percentage of “Affordable Commercial” space for local family-owned businesses in new developments.

7. A “Right to Return Policy” to require developers to give displaced businesses the opportunity to go in front of the line to reoccupy their commercial spaces when finished at a fair market cost.

8. Rent subsidy for property owners if they can agree to at least 10-year leases with a rent increase cap.

9. Financing loan fund grants to serve as “collateral” for business seeking financing when being displaced and having difficulty finding it due to their “lack of stability” for being displaced.

10. Funding programs for local business associations that have demonstrated effective results on advocacy and support to local family owned businesses.

Business displacement is the most serious issue on the Alum Rock business corridor. When a small business is displaced it’s not only the business that is displaced, but also the dreams, hopes, and livelihood of our neighbors and family members. We support any anti-displacement efforts to stave off the loss of our family-owned businesses and look forward to working with the city to address our urgent needs.

Respectfully,

Jesus Flores

Jesus Flores is the president of the Alum Rock Santa Clara Street Business Association. Contact him at 408.924.0848 or [email protected]. Opinions are the author’s own and do not necessarily reflect those of San Jose Inside. Send op-ed pitches to [email protected].

4 Comments

  1. Sorry Mr. Flores,
    But 84 unites of no income housing is far more productive to the city’s tax collector than 4 dirty old Mom & Pop shops.
    Bring on the tired and huddled masses look for something FREE.

  2. Mr Flores,

    I imagine you would be better received if you avoid hyperbole in your wording. I understand the point you were trying to make that the development plans had been made long before the businesses were notified, but there is a huge difference between “90 days” and “a couple of days.” Don’t inflate the issue, the landlord and city knew about it for more than a year they could have given more than 90 days notice to the tenants, that’s fair to say. But you make it sound like they had less than a week to pack up and relocate their business, which sounds as though it is not an accurate depiction of the situation.

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