Uploaded: Thu, Dec 5, 2013, 9:56 am
City to decide fate of Maybell loan
Options include city buying the Palo Alto site and finding its own use for it
The Palo Alto City Council will decide Monday whether to demand back $5.82 million it loaned the Palo Alto Housing Corp. to develop senior housing on Maybell Avenue -- a proposal that was defeated by referendum last month -- or wait for the organization to pay back the loan after finding its own buyer.
The Housing Corp. purchased the site at 567-595 Maybell Ave. for $15.6 million with the help of the city's loan, as well as loans from the Local Initiative Support Corporation, the Low Income Investment Fund and the county.
Now, after the defeat of Measure D in November -- which was a referendum on a City Council decision to rezone the site to allow 60 apartments for low-income seniors and 12 market-rate homes -- the development won't proceed, according to a staff report.
The report states that the Housing Corp. is looking to sell the land, which has gone up in value since it was purchased. The report estimates the site could be worth as much as $18.7 million.
One of the city's options, terminating its agreement with the Housing Corp., would effectively force the organization to sell the property to allow the city to recoup its loan. However, the city could also potentially buy the property from the Housing Corp.
If the city were to terminate its agreement, it would get the same results that it would have if it had done nothing (the option staff recommends). It would recoup its $5.82 million loan, which could then be used for another affordable-housing development somewhere in the city.
But if the city were to purchase the site for the purposes of developing it for affordable housing, it would be on the hook for the $10 million in loans the Housing Corp. took out from the other organizations, including $8 million from Local Initiative Support Corporation and the Low Income Investment Fund, and $2.8 million from the county.
The city would then have to decide how to develop the site, which is zoned for a maximum of 46 homes, with the addition of a state density-bonus inclusion.
Staff estimates that developing the site could cost $15.6 million and probably wouldn't have the advantage of generating revenue from tax-credit subsidies, which were to have made the Housing Corp. $13 million for its more dense development.
The council will decide which option it will take on during its meeting, Monday, Dec. 9, in City Hall at 250 Hamilton Ave.
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Posted by Palo Altan
a resident of Green Acres
on Dec 5, 2013 at 7:43 pm
@Palo Alto resident,
Actually, the City has first right of refusal on the property. It can also decide to purchase the property without any competition. It could decide to purchase the property with Stanford funds and hold it for 6 months to give residents and environmental groups a chance to save the orchard, and sell it with no skin off their nose if it doesn't work out.
This side of town has taken a lot of density in the last few years, without commensurate investment in infrastructure or amenities. We have more affordable housing development than any other residential neighborhood -- much of which we are going to lose if the City doesn't act, which is a whole other discussion about City Council hypocrisy -- the only other part of Palo Alto with comparable is downtown, which also has Lucie Stern Community Center, Lucie Stern Theater, the children's theater, the children's library, the downtown library, the main library, the art center, Rinconada Park, Rinconada Pool, City Hall, the children's wading pool, the tennis courts, the bowling green, and is just up Embarcadero from the air port, baylands, and golf course. Our taxes help pay for those amenities, and what do we have on this side of town? Bol Park, which residents pretty much paid for themselves, and Briones Park, which would be an electrical substation if neighbors hadn't protested and gotten it moved.
Why are we chopped liver? We're not even asking the City to pay for it, just to give us (once again) a chance to find a way to pay for the few community assets we have on this side of town ourselves. We've been taking a lot of density, why shouldn't we be given the opportunity to make that open space? It's the last piece of orchard in the area, and this side of town could desperately use a meeting space. It's the perfect place to put in a sister site to Gamble Gardens, only for the trees.
If the City really cares about affordable housing instead of forcing developer giveaways on us, let them put their money where their mouths are, and take the $6million they invested at Maybell and loan it to the nonprofit at Buena Vista under similar terms and regulatory agreement as at Maybell. With nearly $21 million then, and the owner having the ability to write-off nearly $10 million as donation to the BV nonprofit, and saving the millions it would take to evict the residents, the residents would then have a competitive offer for the property, and the owners would get a clean deal sooner. The BV nonprofit could even then apply for grants to improve the park.
They were so gungho at Maybell, they were even willing to present inaccurate information to the state over and over again to apply for funding, they were willing to spend $660,000 on an election rather than setting aside the ordinance and working with residents. They kept flogging us over the need they could never really articulate well. Yet here we have a long-time residents of Palo Alto and the last truly affordable patch of the City, and a clear path to saving it, and what are they doing? The excuses are so bad they don't even count as lame.
Mountain View, by the way, when presented with this same exact circumstance recently, decided to save the historic orchard.