Walk the Walk

City Hall Diary

A few weeks ago, I wrote about my biggest regret as an elected official: my support last year of the unanimous vote that converted commercial property to residential on Lincoln Ave—820 units to be exact.  Going forward, I will vote on what is best for San Jose and our future.

Last week I was put to the test. A project was before the council requesting the conversion of a prime seven-acre commercial parcel next to Santana Row to residential. Was I going to stand true to my genuine principle that converting tax-generating land is bad, or was I going to pick apart all the “exceptions” to the rule and cave in?

Santana Row generates over $2.2 million in sales tax each year.  Two million is not a number to dismiss, especially when we are suffering through budget deficits and nearby cities are filing bankruptcy. This prime seven-acre parcel has great potential for office space right next to Santana Row.  It is a prime piece of commercial real estate and clearly more centrally located then the Evergreen industrial land that was highlighted in 2007.

The employment land framework was unanimously passed by the city council in October 2007. The goal was to stop conversion of land that generates jobs/taxes for the city. On the dais I spoke of the lost opportunities of not having land available for jobs, and the loss of a revenue opportunity for the city, (sales tax, utility tax, 911 fees, etc). The city has already converted hundreds of acres of employment land. Conversion of these parcels creates two problems: the loss of commercial land and the strains on neighborhood services which end up costing the city more money.

Unfortunately, some property owners will choose to neglect their property in hopes of convincing the council that a commercial use is outdated.  This excuse will not work for me.  If commercial owners can’t take care of their property, then the city should use code enforcement resources to cite and remove blight.

The real estate agent for this parcel spoke at the meeting and said that he “only had two offers for the office use.”  Two sounds good to me. Don’t you only need one? Or, since the parcel is seven acres, perhaps the two interested parties could share?

Unfortunately (as I have seen many times before), the public speakers that night, including nearby residents, spoke in favor of the conversion. In fact, none of the activists who say they are against the conversion of land neither showed up to the meeting that night nor sent any written correspondence against this conversion.

Professional developers and knowledgeable lobbyists showcase some of the best salesmanship I have ever seen, using terms like “LEED certified” and “extraordinary benefit.”  However, I still stand by my belief that good housing projects need to be built on land that is already zoned for residential.

I made the motion to deny the applicants request of converting the land which passed. The developer is probably going to blame the city, the process and me, saying that we were, and are, not consistent. However, the only “inconsistency” would have been if we converted the land. The land has always been commercial; conversion would have been an inconsistent use of the land.  Because of the Reed Reforms, the next time conversion of land will come before the council will be in the spring of 2009, instead of every 3 months.

Over and over and over again, I hear from developers and lobbyists that vacant commercial buildings are of no use and we should convert the land the building stands on to housing.  With that said, should we then convert the empty Sobrato building downtown to housing? It is vacant, after all.

28 Comments

  1. One, unstated, side effect of this policy is that it raises rents on poor people in San Jose.  When you artificially limit supply, it creates a shortage and prices go up.

    This may be fine for people who already own their homes.  For young people trying to find a place to live, it makes a hard situation even worse.

  2. I was also at that VTA Board meeting where the Board approved that land sale and spoke first.  The most disturbing thing I found that you heard me spoke about: why the developer got a full 2-minute presentation but residents only got one minute each.  Either everyone gets the same time to present their view or no public input should have been allowed at all.  The latter would have at least proven that our “leaders” were not going to listen to the public. 

    It’s another example on how our brand of “democracy” is the best that money can buy.

  3. Greg Perry points out the obvious argument, but one that needs to be periodically restated so that we retain our perspective.

    How can we say we have enough housing when the average residence still costs half a million dollars ($530K) and the average household earns $87K?

  4. Pierluigi,

    Can anybody at city hall precisely define “extraordinary benefit”?

    If so, how much would the developer need to pay to get the support in city hall he needed for the conversion on a seven acre parcel?

  5. Speaking from current experience, point taken from Greg.  Even if I wanted to come back to Silicon Valley, I’m currently priced out of the renters market, largely due to lack of supply.  I’m currently paying $1450/month in Santa Cruz (on the Capitola border, to be specific) for a 2-bedroom condo.  It’s on a major bus line and is within walking distance of Capitola Mall, movies, the beach, and food shopping.  Anything similar in Silicon Valley would cost me at least $1800/month plus commuting expenses.  Figure out the irony of someone monitoring a county’s transit agency who doesn’t even live in the county being monitored.  Nowadays my day job is in Monterey County so at least I have a reverse commute – one that would have been worse if I had lived in the Valley.

    Another point that should have been brought up is our growing lack of water supply.  Last I checked, wasn’t California on the verge of another drought?  Most people I talk to forget that our water source is NOT the Pacific Ocean but the Sierras.  Places like San Jose build dense housing – only to have the Water District tell all current residents to conserve water.  The conflicting messages one gets from our leaders only spur residents to oppose any density throughout the Valley. 

    It also creates conditions where residents like me have to leave the Valley and go to Tracy, Los Banos ($300K homes still available!  call now! – billboards on 101 in Prunedale) and the Central Valley – and thus contribute to the gridlock on our highways written up here.  All just to make sure that there is money available for hard times like we have now, or for retirement.

  6. On #4.
    Obviously, PO is not saying no to all housing projects just the ones that convert commercial to housing, although I am not sure how much space is out there.  Housing costs are a county/valley issue not any one city’s doing. 
    #6.  If we are going to make a dent in the $530k average home cost so the truly poor can afford it (…what do you consider poor in our valley…), how much more housing do you really think is needed if we are going to leave it to market forces to bring the price down?  I am thinking that would be a ginormous number.  That should do wonders for the traffic, QofL, etc.  Maybe we need another model for a sustainable city.

  7. So, do we oppose residential “infill” development near Santana Row because it should be developed commercially? What about that empty building downtown? How about that empty or underutilized commercial space in North San Jose? Or that vacant land near the Component light rail station? And what about that wasteland around Julian/San Pedro streets downtown? All of these are prime locations for commercial development but are just sitting there.

    And every time a “dense” development is proposed like on San Carlos Street, NIMBYs get in an uproar about “too many people.” Never mind getting the maximum return for the taxpayer on the sale of surplus public land. All of the environmental alarmists worry about global warming/pollution/peak oil but then turn around and oppose anything that smacks of higher density. Like Eugene said, if people are priced out of Santa Clara County, they’ll just move out to Tracy and commute back here. If sprawl is a Bad Thing, then get serious about increasing residential density. Otherwise, cut the “environmental” propaganda.

  8. Hugh,

    NIMBY always wins out over the environment, housing for their kids, any chance of significant retail.  We always build short and then do not have enough land for parks.  If you really want to transit to work then makes sense to have density there.

    Otherwise as far as todays post it makes sense to me to retain land for the expansion of the santana row area.

  9. Good move at Santana Row Pierluigi!

      I believe the activists you speek of might be burned out after the last VTA meeting when 36 residents went on the record to ask the VTA Board to stop the sale of the County owned property to Barry Swenson and Van Avery to build 850 condo units at the corner of San Carlos and Sunol.Two lobbiest, very well known, voted in favor of the sale.
    The Mayor and five San Jose City Council members on the VTA Board voted with the two lobbist and ignored the 36 voters request to deny. The motion to sell was introduced by our Mayor Reed and seconed by Council member Sam Liccardo.
      You tried to explain to the VTA Board that 2200 condo`s and apartment units were about to come on line within a mile of the VTA project and another large condo project was going up for council vote on Meridian and San Carlos Streets. You told the Board that the residents in the area had no idea how the new 2200 units were going effect the local residents. Still the Mayor and our five city council members ignored you too and voted in favor of more residential development.
      It seems what Barry Swenson wants Barry gets, everytime.The name is politically correct(connected).Voters, well there just voters…they will get over it.

      This is and always been a city run by political and insider decisions.

  10. I love the members of the Willow Glen neighborhood association who want their opinions to be heard on projects all over San Jose, yet are very particular about who is within their borders and can join their club.

    Theres still a major housing shortage, and it hasn’t been solved until people aren’t forced to move to the San Joaquin valley because they can’t afford to live here.

  11. Regarding the conversion of the Sobrato building downtown to residential use again the insiders will decide.
    How about the conversion of the Hotel site to high rise condo`s and loss of property tax,sales and hotel taxes. Every time we listen to Redevelopment people blow their horn, they tell us about the big success story downtown,“the Fairmont Hotel” it payes 450,000 in property taxes and more sales and hotel taxes.When is that meeting going to be at City Council chambers?
      Maybe we should find out how well that conversion will do as condo`s first before we consider converting the Sobrato building.
      The northeast corner of San Carlos and Market Streets across from the Marriott Hotel was an excellent Hotel Site for the Convention Center.What about the Convention Center Expansion, why do it? The Convention Center will need more rooms downtown to be successful. Have we given up on San Jose being a Convention destination.
      “Why convert the Hotel site to residential and expand the Convention center”. How often in the past year has the big tent behind the Convention Center used in 2006,2007and 2008.
      There is a major hotel planned for the Intermodal BART station in Milpitas, why Milpitas and not downtown San Jose? What is wrong with Downtown San Jose that we can`t attract another major hotel. Why do the big Hotels build just across the San Jose City line in Milpitas and Santa Clara? What`s the problem?
      Local companies like Sysco FoodService in Fremont have a big Convention and show with a big turn out. Three years ago Sysco left the Oakland Convention Center and moved their Convention to south to Santa Clara, why not San Jose.This show attracts people from all over California, especially northern California.Again, what`s the problem with San Jose?
      Business just seems to stay just over our City line in Milpitas and santa Clara.There are 27 hotels just across that City Line.Warm Springs has a Marriott high rise hotel busier than the san Jose Marriott.

  12. Pierluigi,

    Congratulations on fending off the conversion of commercial property to residential.  We truly do need a positive contribution to tax revenues.  New residences are, and always will be, a drain on the city’s budget.

  13. #9 DG-
    “Housing costs are a county/valley issue not any one city’s doing.”

    Exactly.  Each city does its part to make the problem worse, and blames the others for the shortage.  Profiles in Courage this isn’t.

    #16 Howe-  A high rise residential building uses a lot less water than the same number of people anywhere else.  Your “solution” actually makes the water shortage worse, not better. 

    If you don’t build it here, you get tract homes in the central valley.  They will get their water from Sierra runoff, too.  Just more of it since they need to water a lawn.

  14. Greg says “Adding to the residential housing stock will always result in incremental budget deficits.  Put simply, city infrastructure costs outstrip the additional tax revenue.”

    Tell that to the “smart growth” crowd. Their party line is that we need denser residential areas close to transit so people don’t have to drive long distances to work. But every time a “high density” project is proposed, NIMBY sentiment kills it. Where are all the “smart growth” folks then?

    Greg again: “As for empty parcels, it is more cost effective to the city to leave them fallow than it is to build new homes.” OK, fine. Just don’t complain that all of the potential commercial land is being gobbled up by housing, because it’s not. There’s lots of underutilized land around here that could be commercial. Lots of low density “office parks” with acres of surface parking could be redeveloped at higher densities, for example. So could all of those surface parking lots downtown.

    As for environmental propaganda, I was referring more to all of the “global warming” hype, not commenting about the water situation. Global warming alarmists need to read this book:
    http://www.amazon.com/Cool-Skeptical-Environmentalists-Global-Warming/dp/0307266923/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1210693822&sr=1-1

  15. It’ll be interesting to see how you vote on the iStar conversion. I suspect your love for Chuck Reed will let you ignore the obvious hypocrisy of opposing conversions that enjoy the support of the people that live right next door, while voting for a conversion of truly prime industrial land proposed by his buddy and campaign supporter Lew Wolff.

    The true test is yet to come, Pier.

  16. It is not the duty of this City to sacrifice all in the name of “affordable housing”. Presumably, zoning designations are initially assigned with the idea of creating a reasonable balance in a community. In most cases the zoning was created in the absence of pressure from interested parties. This objectivity should be valued and respected. Zoning change applications should be viewed with a jaundiced eye and should only be approved because they are best for the *citizens* of San Jose, not for the landowner, not for the developer, not for the would-be residents, and not for the City’s “structural deficit”.

  17. Dan Malone, the iStar conversion will save the city millions it pays on the Airport West site. Learn a little before spewing some sensationalist crap you read in the Murk.

  18. Perry (#17),

    Gosh, I had no idea that high density residences use less water than fallow property.  You must admit, it is counter-intuitive.

  19. #12 Richard

      The Willow Glen Neighborhood Assn.endorced the sale of the County property on the corner of San Carlos and Sunol Streets if the developer followed the San Jose General Plan “Midtown Specific Plan” which that property plays a important role.The letter from the Willow Glen Neighborhood Assn. to the VTA Board of Directors said:
      We have concerns with the sale…We with the Willow Glen Neighborhood Assn. look forward to working with you and your chosen developer, to help design a project that will be a welcome addition to the community.We look forward in the future to riding the VTA Light rail to the vibrant “Destination” public plaza, shops and businesses as envisioned in the “Midtown Specific Plan”.
      That said, there is an introduction to the developer and the city planning department for a working relationship.

  20. Some interesting comments if you can keep an open mind…some of guys need anger management training though…

    John G. and Eugene make good points that dovetail together: there are only so many resources out there, we all have our own take on what is most important, and living in a community means that we ultimately have to make compromises.  But there is something that has been on my mind for a while: do we weigh the complex needs/desires of those who are here now the same as the complex needs/desires of those who may settle here in the future.  (I won’t elaborate more and I can anticipate some of the invective to come…)  But being consistent, if it meant that this community was only fit (based on community needs) to build out so much and I wasn’t living here…I can accept that.  At least PO has given us an explicit thoughtful take on how he will decide, and I think he is saying that he will live with the sometimes “uncomfortable” consequences.

  21. #4 Greg Perry,

      San Jose planning department has 56,000 new Condo and Apartment units planned in Willow Glen,Downtown San Jose and North San Jose. Just in Willow Glen there is apprx 2200 new housing units about to come on line soon with another 1200 to follow.
      San Jose is not holding back in spite of the fact all this new housing will put a financial burden on the San Jose City for city services.
      I think we all have to look to the City of Palo Alto for keeping the housing market up.The Coyotte Valley development and “specific plan” was handed a defeat by the enviromentalist.The City now has to begin all over.Coyotee Valley would have brought down the cost of homes in San Jose.
      By the way, how about the “Shoreline Park” development in Mountian View. Do you think the City of Mountian View could stand some high rise high density houing? Highway #85 is grid locked every morning and afternoon with workers trying to get to Google and back home every day.Some residential development in Shoreline and Moffatt Business Park would help losen up the grid lock on #85 and bring down the cost of housing.

  22. Hugh,

    Adding to the residential housing stock will always result in incremental budget deficits.  Put simply, city infrastructure costs outstrip the additional tax revenue.

    As for empty parcels, it is more cost effective to the city to leave them fallow than it is to build new homes.

    Regarding your notion to “cut the environmental propaganda, what in your mind would convert our region from semi-arrid to an oasis, one capable of supporting the water needs of yet more people?

  23. Hey Nam, the City selling the Airport West site will save it the millions its currently paying. The money from the iStar conversion will do nothing for the City except help Lew Wolff pay for a stadium for his soccer team, which will significantly boost the value of that team and allow him to sell it for an enormous profit.

    But thanks for the advice on where to get information. I’ll stick to reading city staff memos. They seem to be pretty accurate.

  24. #22

    typical willow glen.
    you would rather build out coyote then to have infill development by light rail stations? housing pays for itself when it is 100 units to the acre. the city loses money on single family homes, attached townhouses etc…real density provides tax base,retail, parks etc…

    On the environment side it is much better to stack people up since they all don’t have front and backyard lawns to water. if you have a single family home it will only grown in value as your house will be viewed as a big step up from a condo.

    building out coyote valley would repeat the same mistakes that have been made in the past…suburban sprawl.

  25. #22 Rich-

    We’re in total agreement on Palo Alto, Mountain View, and the other jobs surplus cities.  I spent 4 years on the Mountain View council advocating for more housing in Mountain View.

    However, pointing a finger at Palo Alto, alone, doesn’t do anything to solve the problem. The discussion of Palo Alto is simply being used as a rationalization, not a step towards a solution. 

    If San Jose were taking the lead to reform ABAG or create a regional concensus on market rate housing, that would be different.  But they aren’t.

  26. #25 Greg-
    If San Jose were taking the lead to reform ABAG or create a regional concensus on market rate housing, that would be different.  But they aren’t.

    Interesting comment..So what is San Jose’s role on ABAG?

    Helen, San Jose

  27. #18

      I would hardly call “Smarth Growth” people NIMBYites.Smart growthis an urban planning and transportation theory that concentrates growth in the center of the city to avoid urban sprawl. The Midtown Specific plan was designed to do just that.
      The Midtown Specific Plan design goes back to the days of Nancy Ianni and Tom McEnery for its roots.
        The plan calls for the VTA and Chiem properties to become a project with a “sense of place” which is part of any discussion of land conservation and growth management because sprawldevelopment tends to eliminate the unique features of a city landscape.The purpose is to connect people with each other,with the community and the surrounding.
        The Midtown Specific plan calls for high density housing on ths site and advocates compact, transit-oriented,walkable, bicycle-friendly land use and streets that work for everyone.This area was planned as a mixed-use development with a range of housing choices.
        The plan calls for the Midtown area to become a destination, a unique sense of community and place with a park close by and a development of small business retail. The plan calls for 100 foot set backs from the street, creating an area for public functions like a farmers market etc.
        This is the reason Santana Row is so successful, it has a sense of place. We have the perfect weather for such a meeting place. San Jose was just ranked #3 in the nation among large cities as,“America`s Best Cities For The Outdoors”
        San Jose has a chance to do it right at Midtown`s San Carlos and Sunol Sts.
        Willow Glen Neighborhood Association has endorced this project conditioned on the developer doing the right thing. Many people in District 6 question if the current developer chosen by the VTA has the ability and understanding of “Smart Growth” to do the right thing. This project is not his speciality.Will he convince the people in district 6 that he will hire a consultant that will help him achieve the right development? This is the “big question”.

  28. Hugh J.

    You said….“If sprawl is a Bad Thing, then get serious about increasing residential density. Otherwise, cut the “environmental” propaganda.”

    Increasing density and moving away from hours in the automobile and gridlock is a good thing.  But when you concentrate 600, 900, 1500, 2000 residential units in a small space without adequate commercial, retail, office-coop, light industrial, (jobs)….  and a plaza, restaurants, parks, libraries, walking friendly natural open space and raparian corridor and trails,  good schools and such you are not building viable neighborhoods and quality of life or funding needed services… you are creating quick-turn project for profit.  I may be all wet here.  Maybe you can help me understand the other side of this.