Uploaded: Wed, Apr 16, 2014, 9:38 am
Palo Alto Housing Corporation nears sale of Maybell site
Nonprofit enters contract with potential buyer after Palo Alto voters rejected its housing proposal
After seeing its proposal for a housing development on Maybell Avenue fall in a referendum last year, the Palo Alto Housing Corporation has entered into a contract to sell the orchard site where the project was slated to go up.
Because of a confidentiality agreement, the Housing Corporation is not disclosing any details about the buyer or the terms of the sale. But Candice Gonzalez, executive director of the Housing Corporation, confirmed in an email that the nonprofit is "in contract with a buyer for the sale of the Maybell site but have not yet closed."
The sale was widely expected November, when after voters shot down the Housing Corporation's proposal for a development that included 60 units of affordable housing for seniors and 12 single-family homes. Though the City Council unanimously approved the project, residents gathered enough signatures to bring the development to a citywide vote, where it was rejected by a margin of more than 1,500 votes. Critics of the proposal argued that the proposed "planned community" development is inappropriate because it is both out of compliance with zoning regulation and out of scale with the surrounding neighborhood.
Opponents urged the Housing Corporation to reduce the number of units and bring the project into zoning compliance. Officials from the Housing Corporation countered that doing so would make the project impossible to finance and said they would likely have to sell the property if the development proposal were rejected.
Though the price is not being disclosed, the 2.46-acre property at 567 Maybell Ave. is expected to bring in more than $15.6 million that the Housing Corporation paid for it. At that time, the nonprofit developer had outbid at least five other would-be buyers. It was ultimately chosen because of its nonprofit status, which allowed the family selling the orchard to get a tax write-off.
Palo Alto had loaned $5.8 million to the Housing Corporation for the site's purchase. In December, council members agreed not to terminate the loan but to give the nonprofit more time to repay it. City officials said at the time that with local property values on the rise (up by close to 20 percent between 2012 and 2013), the property could probably now be sold for about $18.7 million.
Gonzalez said the agency's intention is "to pay back all the lenders that supported our project, including the City of Palo Alto."
Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 18, 2014 at 12:14 am
>All you Anti maybell folks seem to ignore that your argument that you wrote for the official SC Co Reg of Voter No on D arguments states you believe that either 41 or 45 units can be built under current zoning
First of all, that's not true, many of us, including Joe Hirsch, persistently and publicly said the zoning rules and consistency with the Comprehensive Plan meant around 16-18 units at most on the property under the zoning. City Council ignored that.
Secondly, the only way to come up with 41 units is if certain bonus density rules are applied for low-income housing projects, not for a market-rate development.
Thirdly, those numbers can only be attained if those rules are applied to the maximum number of units possible under the zoning range. Given that many in the neighborhood felt it was a reasonable compromise if PAHC was going to build senior apartments under the zoning to let them push that limit, there were people saying 41 or so units. But if a market-rate developer is building there, people will have no qualms about enforcing consistency with the Comp Plan and zoning.
Fourthly, the opposition was a large grassroots effort, and your attempt to characterize the opposition to the zoning as having spoken with one point of view or one contention about what could be built there is demonstrably false. A single organization had to be formed in order to wage the campaign, and that proved to be the most difficult part of the whole thing for the grassroots.
Lastly, the safety issues do not go away just because that plan won't be built. There are significant challenges at that location, which people in the neighborhood understand better than anyone. The City policy is of heightened scrutiny of developments on school commute corridors. Safety is supposed to come first. As has been pointed out so many times, that property sits at a bottleneck between THE two safe routes to school to Gunn, Terman, Bowman, and Juana Briones that thousands of children travel to school daily, a significant portion by bike and foot. One of those routes, Maybell, is a seriously substandard street. The other, Arastradero, is developing more serious traffic problems with each passing month. The neighbors suggested a light at Clemo and Arastradero as a way of putting most of the traffic from the development onto Arastradero instead of Maybell, in order to diffuse some of the conflict, but the City said this had too many impacts. Well, if it's too much traffic to go onto Arastradero, it's way too much to put onto Maybell. It was telling that in all those months, while neighbors complained about a lack of any study of the safety impacts to the bikes and pedestrians, and called on the City to do so, that the City never did.
ANY development there will have to be scrutinized for safety. If anyone thinks they can build there, even within existing zoning (whatever they think that is) without dealing with those safety issues -- which were the underlying motivation for many of the original opposition -- they may find themselves at the flash point for the next big civic movement, applying better and more comprehensive safety and traffic evaluation to new developments. Every rule in the zoning that you think a developer can use, has some kind of legal asterisk next to it that allows safety considerations to override. How those safety considerations are evaluated is too vague (although, no evaluation clearly doesn't comply) -- anyone trying to push a big development at that location will almost certainly trigger that conversation (in legal terms), which is long overdue anyway.
@Craig, I doubt anyone will decide to put just one house there. The 4 ranch houses along the edge, if renovated, are already $10-12M in value (especially since, if a little bit of land is added on the back, they are zoned for and would have room for in-law units each).
Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 18, 2014 at 12:49 pm
@palo alto resident,
[Portion removed.] The existing ranch houses on either end are R-2. Basically, this allows you to put in a granny unit, if the property is big enough (these currently aren't) and if the granny unit is owned by the owner of the main house (no flag lots, in other words).
R-2 is basically R-1 allowing granny units. There are still height, setback, daylight plane, square foot and other zoning restrictions that apply. Those lots are actually over built for what is allowed by the zoning, in other words, they are small lots and if someone tore the houses down and the zoning weren't changed, they couldn't even put back what is there.
You are remembering that PAHC wanted to tear down the 4 ranch houses and zone to let the for-profit developer put up 15 3-story houses (later reduced to 12 2- and 3-story houses) in their place (9 along Maybell), on far smaller lots than the zoning allowed, and violating virtually every other zoning rule. That is not possible under current zoning, hence the City's writing new zoning, and hence the neighborhood challenging it through referendum. It bears repeating that what the City did would have been against state law and wouldn't even have required a referendum, if Palo Alto were not a charter city with no provision for residents to legally enforce the comp plan.
So, in summary, no, you couldn't put 12 units where it's R-2, not even PAHC was trying to do that, as it would be physically impossible.
RM-15 is a zoning transition zone that allows 8-15 units per acre. According to the Comprehensive Plan, if it's adjacent to an R-1 area, as this is (the dominant land use of the entire surrounding area is R-1), the density is supposed to be on the lower end of the range, i.e.,8 units per acre, not 15. Although our comp plan is not legally enforceable the way spot zoning would be if we were covered by state law, there are other avenues including legal that allow neighbors to enforce the zoning and consistency with the comp plan. And, as you have seen, if Council thinks they can do an end run around these neighbors, they are mistaken.
Additionally, the density is not just the only restriction in an RM-15 zone. There are height, setback, parking, daylight plane, and other zoning restrictions. The more units you put on that space, the smaller they get, if you have to live with those restrictions. Within the zoning, according to the mayor, it's hard to even put up three stories. The smaller the units in that neighborhood, the greater the costs (kitchens and bathrooms cost the most), and the less the return. The builder will get the best return from putting in luxury homes on as small a lot as the zoning will allow, which is probably 6,000 sq ft. These will sell fastest, for the highest price in that neighborhood.
I think some people ran the numbers with someone down at the City, and what I heard was that if they lived with the zoning rules and put in 40 units, each would be on the order of 1,100 square feet? Which wouldn't make them the most desirable in that area, which in turn wouldn't make the best return. They would certainly sell, they would just be complete idiots to do that, though, if their goal was to make the most money.
Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 18, 2014 at 2:19 pm
@Crescent Park Dad,
I didn't have a chance to search for Cheryl's Lilienstein's letter(s), but there was a City meeting in which the City Council put on the agenda after the election what do to about the Maybell property, since they did have first right of refusal by virtue of the purchase contract they were so involved in. You can probably find more letters on the public record around that time, early December. The staff recommended the Council do nothing and that's what they did. Here's a few excerpts/letters:
Dear Council Members,
We are strongly in favor of maintaining the Maybell Orchard as a historical orchard so that young people and future generations of Palo Altans will have the opportunity to learn about the agricultural history of the Santa Clara Valley and of our city of Palo Alto. Many of us who have lived here before our valley became Silicon Valley feel very connected to that part of our city's history.
We grew up in New York City and are so familiar with urbanization as well as the protection of historical sites. Jacqueline Kennedy Onassis was instrumental in saving Carnegie Hall from demolition. Unfortunately the magnificent Pennsylvania Station was demolished and and so many New Yorkers strongly regret that decision. Palo Alto is the city we chose to live in and raise our family and have been here for over 50 years. We would not want to see Julia Morgan or Birge-Clark designed buildings demolished. Our Maybell Orchard deserves the same consideration for many reasons. In addition to its historical value, it would be a low impact addition to a neighborhood already experiencing very heavy traffic. It would be a wonderful educational tool for our children and it's across the street from Juana Briones Elementary School and the Orthopedically Handicapped School. Our citizens, children, seniors, everyone of us, need open space and this is a rare opportunity to obtain some.
If you would use your option to purchase the property and give us a chance to find funding to purchase the property from you, we would be most grateful. We ask for your consideration and help in allowing us to achieve our goal.
I realize that PAHC has decided to sell the property at Maybell, and the City has the right to purchase it. I realize also that City staff has recommended the City do nothing. In considering your options, I hope you all remember that you are supposed to be leaders for all of us, not just your favored constituencies, and look to the future. What kind of future are we leaving Palo Alto's children?
We are at a crossroads here again. We face a unique opportunity to create a community asset, to protect safety for our children, with a healing path of collaboration. Or more conflict stretching out well into the future.
Councilmember Berman, after spending time in our neighborhood last May, you told us you didn't think the traffic situation was safe for the kids, just as we have been trying to tell you all. I believe you said: [Maybell] may be a Safe Route to School, but it's not a safe route to school. I personally appreciated your time and candor in admitting that. I hope you all realize the traffic gets considerably worse when it rains, and not just on those days, the whole pattern of traffic changes during the rainiest, coldest months - Councilman Berman came out at a dry time in a record dry year. (And everything has been worse overall the last two years.) Councilman Berman and others of you in the City also voiced the opinion on record that a market-rate development would be less safe than the PAHC proposal, and a belief that Council would be powerless to do anything about safety if a market-rate developer were to build what you believe could be built there.
That is about as strong an argument as any for the City to do what it is eminently in its power now, to ensure you act in your official capacity first and foremost for the safety of Palo Alto's residents and children. At the very least you have a responsibility to reduce future liability to the City, and to avoid acting in a way that you have admitted you believe reduces safety, particularly if out of less-than-professional personal motives.
Given that you all have a responsibility, first and foremost, to safety, you should at the very least do what you can now by exercising the City's right to purchase the property. I am not suggesting the City hold the property long or ultimately incur any expense - though for safety and fairness, it would be even more justifiable an expenditure than loaning money to a private corporation (no matter how noble the purpose) or spending $660,000 on an election you hoped to win for them. The City has $40 million in Stanford funds, and it's been a very good year for tax receipts. You have the money to purchase the property, especially since you would just be holding it temporarily and most or all of it will ultimately come back to the City. (And where are all the fees to mitigate the affects of all this development on this side of town going? Could some of them be used?)
If the City purchases the property, it could do a comprehensive traffic analysis including bicycle and pedestrian safety, with current data, and put deed restrictions on the property to ensure any future development prioritizes the safety of the thousands of children whose school routes are impacted by development at that key location. All of the above information about safety concerns is on record (for any liability attorney in the future, no less), as well as the City's awareness of it and ability to do something about it.
I do think you should consider the opportunity that site presents to make a unique community asset for the future, to save an orchard with 100 established trees and the last heritage agricultural site in Palo Alto. The trees are established without irrigation, have been an important part of our urban canopy for decades, and in the middle of rampant development, remains a key piece in the patchwork of connected wildlife habitat between the foothills and the bay.
While I'm not asking for Council to make a specific plan or concession now - I think we would all benefit from the time and careful study of a citizens' working group - you need to realize that it's not a $15 million dollar orchard, either, it's a $6.7 million dollar orchard, as your own documents state. The value from the existing ranch houses could be optimized, making the orchard pretty cheap as parkland in the middle of Palo Alto goes, and could be cheaper than $6 million.
Again, I hope Council takes the high road for the sake of discharging its responsibility to safety, the environment, and yes, even the residents who voted No on Measure D, and takes the following steps:
1) Exercise the City's right to purchase the Maybell property from PAHC and retain it for 6 months to a year, or however long it takes to do the following:
2) Form a citizens' working group to ensure the safety considerations in the area, especially traffic, are properly studied, and the best possible land use of that unique site are considered. If the property is to be sold, place deed restrictions on it to ensure development is considered safe and no controversy will arise for the builder from the community, because the community has buy in on the conditions up front. If a low-traffic use is deemed safest, give citizens the chance to make it happen. I'm told a red-tail hawk has been nesting in the orchard - they and their nests are protected by the Migratory Bird Treaty Act. Give us time to find the best way here. Recognize that the same citizen energy that went to opposing D could and would be put in service of finding a beneficial way forward, even raising private money to pay for it. We just need the opportunity to do it.
I personally consider raising money to pay for a park and community building a far easier prospect than winning a land use referendum to overturn a rezoning under the conditions we just faced. I have been told by those in the philanthropy sector that there was no way for them to be involved while the property was in dispute - you can make it possible now. There are also federal and state grants for heritage agricultural sites, among other things. A working group could look at all possibilities. What about expanding APAC on the back end with 8-10 homes designed for low-income people with severely disabled children, a seriously underserved population, and so close to the OH at Juana Briones, with a connected, accessible community orchard in front? That's just one idea. Just give a working group - like the one that saved the Terman school site as well as resulting in the 92-unit low-income Terman apartments - a chance.
Dear Council Members,
I strongly urge you to purchase the Maybell property now that the PAHC has decided to sell it. The City has $40 million in Stanford funds, and this is a unique opportunity to create a community asset for the south part of town, in a key location near multiple schools. It would also be an opportunity to save an orchard with 100 established trees, the last agricultural site in Palo Alto.
I would also strongly urge that you consider using profits from the eventual sale of the Maybell property to help save the Buena Vista Mobile Home Park, perhaps even creating a site that could accommodate our community members who live there now as well as additional affordable housing for seniors.
As the defeat of Measure D indicated, the residents are not happy with the PC zoning in Palo Alto, and more broadly, there is unhappiness with the leadership of the city; a leadership who so clearly misjudged and dismissed the concerns of the residents.
I think there is a way to create a real community benefit at the Maybell property in the form of an orchard, and create affordable housing for seniors and save the housing for the families at Buena Vista. There is a very motivated group of residents who are mobilized, able and willing to help figure out a workable solution to address all of these concerns.
Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 22, 2014 at 10:12 pm
@ palo alto resident,
That's a good question.
The Council is on record as saying what they think could go under existing zoning is 3 or 4 times what people in the neighborhood have been saying, like former planning commissioner Joe Hirsch.
So, for example, developers can often build far more units using what's called a "density bonus" if they include a small percentage of BMR units. Unfortunately, state laws have made such a low bar for getting the bonus, our own BMR program is being undercut AND we're getting this densified housing with all the impacts (and without any state funds to offset those impacts). So technically, a developer might be able to build 40% more units using density bonus rules.
Likewise, if you read the bonus density rules, the City isn't required to allow the bonus density if safety is at issue. The City has responsibility first to safety, and has broad powers it doesn't have in almost any other area per our own Charter. Unfortunately, the density bonus rules are pretty vague about meeting the safety standard, and as this Council seems to put safety last in virtually everything it does, I see a lot of litigation, controversy, and political heat down the line if anyone tries to put a development there per Council's vision. it could very well be the safety equivalent of the zoning grassroots we got from the last one. Most of the neighbors who got involved over Maybell did so fundamentally for safety reasons.
Nancy Shepherd has stated in writing recently her belief that those density bonus rules are from the state and thus the Council can't do anything at all if a developer wants to create that density. In other words, the Devil Made Me Do It defense. This Council loves to try to say they were forced into their worst decisions, but it's almost never true. During the Maybell debates, Shepherd and the rest of the Council called on the City Attorney overtly to try to hunt through a state housing law to see if there was any way it could force them to rezone Maybell. The City Attorney was instructed to warn the public that the law "ties their hands". (The state law doesn't apply to rezoning, anyone could see that by reading it, but nevermind.)
But it goes beyond that. All development rules are subject to safety limitations. It doesn't matter what the zoning says can go there if there are safety problems. That location happens to sit between the two main routes to school traveled by almost all the kids going to Gunn, Terman, Bowman, and Juana Briones, 4,000 kids daily, soon to be more, and half by foot and bike. There is no way to go in and out of that development except by those routes. One of those routes is seriously substandard, Maybell, which is why there was such an outcry. During the Maybell debates, residents suggested the City put a light on Arastradero and put that traffic out at Arastradero, and that this might work if it were tied together with the light at Clemo, but the City said no, there were too many impacts.
Whomever buys that property has a real planning nightmare ahead of them. If it's a builder planning to put in more than 15-18 units, I'm guessing City Council worked on them the way they worked on PAHC, probably promised them the residents couldn't do anything. (Something I heard verbatim from people who never thought in a million years the residents could win a land use referendum.) Anyone who's lived here for the last year or more would know better, but anyone else is going to believe a City Council telling them not to worry, put in what they want, there's nothing the residents can do.
The other issue is that any development that must go through any kind of subdivision process at all must comply with the Subdivision Map Act, which means consistency with the Comp Plan, something our Council has never paid much attention to, but which residents can enforce in court.
And there's more, but this post is long enough. And you'll know soon enough if anyone is gullible enough to believe the City Council. Maybe they can't do anything, but residents can, and as we saw in Measure D, will.
The City told PAHC to go after that property in the first place and were involved in that sale. By virtue of the loans/contract, they also had first right of refusal and other protections, so they could have purchased the property. Again, if the City Council believes it cannot do anything if people comply with zoning, then they were negligent not to exercise their right to purchase the Maybell property and place deed restrictions on it. They are on record as saying they don't think they can do anything if someone builds under the existing zoning while also saying they think that would be even less safe than the PC zoning. The only Councilmember to come out and spend time examining the traffic is on record as saying the situation is not safe as it is even without any development there. The City also has a policy of heightened scrutiny of developments on school commute corridors (which that property sits between).
If they didn't want to give the residents a chance to raise the money to save all those established trees (in a drought year no less), then they could have then turned around and sold it with said deed restrictions after properly studying the safety issues, and then indeed, there is probably little anyone could do, but then, whatever someone could build would probably be acceptable to everyone.