Uploaded: Tue, Apr 29, 2014, 9:46 am
Palo Alto Housing Corporation sells Maybell site
With housing proposal rejected, nonprofit developer sells orchard site to Cupertino-based Golden Gate Homes, LLC
After seeings its plan for a housing complex on Maybell Avenue collapse in a referendum last November, the Palo Alto Housing Corporation has completed the sale of the 2.46-acre site to a Cupertino-based buyer, Golden Gate Homes LLC, county records show.
Candice Gonzalez, executive director of the Housing Corporation, declined to comment on the buyer or the details surrounding the terms of sale, citing her organization's "obligation to the buyer per a confidentiality agreement." She confirmed, however, that the terms were sufficient for the Housing Corporation to recoup its costs for buying the site.
"Our goal was to be able to pay back all of our lenders and recover our significant carrying costs, which we have been able to achieve with this transaction," Gonzalez said in an email to the Weekly.
The Silicon Valley Business Journal reported the purchase price at $22 million, well above the $15.6 million that the housing nonprofit paid for the site in December 2012. The price is also significantly higher than the $18.7 million Palo Alto officials had projected the site to bring in when they last discussed it in December.
The Housing Corporation, a nonprofit that develops and manages affordable-housing complexes throughout the city, has received several loans to make its purchase of the old orchard site around Maybell and Clemo avenues. It was planning to build a 60-unit complex for low-income seniors and 15 market-rate homes, a number that was later reduced to 12. Though the council unanimously approved the proposed housing development in June, the decision was later overturned by voters in a November referendum.
Palo Alto had loaned the nonprofit $5.8 million for the purchase and council members agreed in December not to demand immediate repayment of the loan.
Tim Wong, a Palo Alto city planner, said the escrow on the property sale was closed on Friday and the Housing Corporation repaid the city's loan on Monday.
The site zoning designation, R-15 (with a small portion that is R-2), makes it likely that the orchard could see an influx of housing, though proponents and opponents in last year's Measure D referendum reached different conclusions over how much housing it should accommodate. City officials have said the site's zoning would accommodate between 34 and 46 housing units, depending on the number of units the developer chooses to devote to affordable housing.
The Santa Clara County clerk's office lists the grantee in the April 25 transaction as Golden Gate Homes, LLC, an entity with a registered address on Stevens Creek Road in Cupertino. The agent for the corporation is listed as Yurong Han. The address listed for the corporation on the Secretary of State registry places it in the Pacific Business Center. When reached by phone, a receptionist at the center could find no record of either Han or the Golden Gate Homes in the business complex.
Even with the transaction complete, the Housing Corporation isn't celebrating.
"We remain disappointed at the loss of a very rare opportunity to build 60 affordable senior housing units in Palo Alto," Gonzalez said in an email.
Posted by Neighbor,
a resident of Green Acres
on Apr 30, 2014 at 9:24 pm
RE: ZONING LIMITS
The Comprehensive Plan state for multi-family zoning such as RM-15:
"density should be on the lower end of the scale next to single family residential areas. "
RM-15 is 8 units per acre on the lower end of the scale. That means 16 or so units on the whole property, not 41. It is possible to build LOWER density that zoning suggests, that's consistent with the comp plan. If someone honors all the setbacks and lot sizes, etc, and wants to build most profitable, marketable homes, they'll put in really large single-family homes on lots that make the most sense under market and zoning conditions.
A builder could put in 15 houses and make $35-45 million if they play their cards right. If they are really nice to the neighborhood and present a plan they can buy into, the neighbors will even support the new owners in rearranging the zoning so they can have properties big enough for in-law units -- single-family homes in this neighborhood above 2500 or 3k sq ft on lots large enough to take an in-law unit (even if not built) go into a whole other level of price stratum.
It's uncertain a Cupertino builder would know that, though.
Re: MEASURE D PROPONENTS' REVENGE ON TREES AND DISABLED STUDENTS
The only take-away is that the City really, really wanted to co-opt the otherwise tree-huggers around here so they could make all of you glad some developer was chopping down 100 established trees in the last historic orchard in town in a drought.
This was never a foregone conclusion. The City could have listened to the neighbors and formed a working group to save the orchard and get the housing. Palo Alto has 17% seniors as opposed to 11% in most of CA. Seniors are the wealthiest demographic. The trees and the disabled students in the school across the street from the orchard are who really deserved the help, and would have if the City had been willing to form a working group. Ah, but so what, so long as you thwarted get your revenge, right?
The City had the right to buy the property and hold it, and put deed restrictions on it for safety's sake before reselling it. But clearly children's safety was never on their radar throughout this whole thing anyway. Let's hope the new developer realizes that Measure D came about because of children's safety in the first place, and none of that concern has changed. In fact, the situation here has only gotten worse. Let's hope the new developer realizes that the City Council told PAHC to go after that property and told them the neighbors couldn't do anything then, too.
If the City Council told the new developer, if they build under the existing zoning the neighbors can't do anything, and it's the Council's vision of what can go there, history will repeat itself for the new developer and the City Council. If the City Council told the developer they had nothing to worry about and do whatever they want because of the bike "safety" plans on that corridor, they'll also be unpleasantly surprised, especially since City people told neighbors (in writing) they couldn't take potential development on that parcel into account in that effort. If the developer made plans based on talking just to PAHC and the City (the same City employees who provided demonstrably false information to the state throughout the Measure D debacle to try to get what they wanted), without understanding the neighborhood, they will find out what the neighbors had planned had they lost the referendum, they are not powerless.
PAHC and the City never gave the neighbors the chance to find a way to save the orchard. That was all their doing. They could have, and it wouldn't have cost anything.
Just realize - had they not been so bent on revenge and rewriting all of this to suit their ideological biases, and proponents had been willing to give their neighbors the benefit of good faith, the same people who made opposed the rezoning could have saved that orchard and found a way to put in some affordable housing (probably for disabled students, though, which would have been a far more needed use at that location). THAT's what Measure D proponents including Council and PAHC have prevented from happening in their quest for revenge. Hope that makes you feel real good.
As someone who was involved in this from the start, Maybell Action Group only formed much later, after a lot of work trying to convince PAHC and the City to compromise to make the development closer to the neighborhood. Neighbors like Joe Hirsch and Bob Moss who helped ensure the low-income Terman Apts got built in a working group would have made sure the housing got built in another way, if given the chance. Their asking for a working group had a proven history of success, but they were ignored. No one wanted to go to referendum.
With all due respect, Jerry Underdal -- as one of the people who started this, I can tell you your retelling is almost entirely fabrication to suit your opinions. It's not what happened. But I can tell you that if we had been given the chance, we would have saved the orchard, and ensured affordable housing was built for disabled students on the parcel, too, close to that school. That was an easier prospect than winning a land use referendum against PAHC. But PAHC and the City didn't want to allow that to happen, and never gave us the chance. They only had that option politically because of people like you.
This could end up being ugly if the developer follows the above desired path of revenge, but if challenged, we will win that, too, if children's safety and our neighborhood's character are at stake. Just realize, we could have been putting the effort into making a real asset for the entire City and for the disabled community, saving the orchard, making sure the most beneficial affordable housing was built there, and putting effort into ensuring the senior housing was built in a more service-accessible location -- and we would have made it happen. Again, it would have been far easier than Measure D given what we faced. I realize you'll go back to just demonizing us in your mind. Hope you understand for at least a millisecond what was really lost here. Enjoy seeing the trees chopped down and realize your own part in it.
Posted by SWE,
a resident of Green Acres
on May 4, 2014 at 4:24 am
SWE is a registered user.
If PAHC had been willing to build the houses and take the profit from the houses themselves, they could have afforded to build just 6 single-family homes consistent with the neighborhood, within zoning. In their plan, they were only taking the profit from selling the upzoned land to a contractor who was going to put in houses at twice the normal density, some of them 3 stories high, and the profit from the houses was going to the for-profit developer, not PAHC. If PAHC had built the houses and profited from those, it could have built far fewer of them.
City Council asked PAHC why they wouldn't just build the houses themselves, since they were building the senior apartments. They said it was because that's not their mission. Huh? When they want to upzone and subdivide property for the benefit of a for-profit developer, it's their mission because it makes money for their purposes, but when they could make the same or even more money in a way that would work for the neighborhood, suddenly it's not their mission?
JLS Mom of 2 - you usually make reasonable posts on some issues, so I'm not going to lay into you about this, but I'm just really fed up with people whining about how this community doesn't support affordable housing, at the same time as antagonizing the majority of the community who would otherwise be supportive. Jerry Underdal has been one of the worst that way. If not for people like him painting his neighbors as [portion removed], it would have been possible for both sides of the rezoning debates to come together to create that housing and save Buena Vista. PASZ has made an official statement in support of BV, and one of the leadership members has even put up a website for the friends of BV, but from the inside, I know a lot more would have been done - a lot of the same energy that went into Measure D could have gone to help -- if the people who wanted to volunteer didn't feel so browbeaten and outright rejected from helping by rezoning proponents.
In fact, the City committed $7.2 million in low interest loans at Maybell, money that was tied up and couldn't be used to help add to the BV offer. Our City Council very cynically gave lip service to saving BV, but tied up money that, added to the money the residents found, might have made all the difference. They told PAHC to go after Maybell, committed that money to that property, knowing full well what was happening at BV (and our then Mayor former head of acquisitions for Prometheus, who wanted to develop BV). Certainly constantly banging this drum that every one hates affordable housing hasn't helped convince the developer at BV that their high density proposal will be rejected by residents.
You lost the high ground with this when PAHC, the City, and all the eventual Measure D proponents refused to honor requests for a working group and deal honestly with this. JLS Mom of 2, do you realize the same people who asked, officially at City Hall, that a working group be formed at Maybell in order to try to work things out, are the same people who saved Terman School site from being turned into apartments, while working out what is now the 92-unit low-income Terman Apartments?
Compromise for the neighborhood would have meant an honest traffic study, and putting the traffic out at Arastradero rather than Maybell. It would have meant exploring how to accomplish the housing AND studying safety AND honoring zoning AND possibly even saving the orchard. I appreciate the mission of PAHC as much as anyone else, but the people running that rezoning show are not exactly the most flexible. Doggedness used to be the most important trait, but it wasn't a good fit for the development circumstances, particularly when the people in the community actually value the affordable housing. Or, valued, I can see how many people have had their minds changed -- all the haranguing has been a self-fulfilling prophesy.
Working with the community would have also had the side effect of rehabilitating PAHC's reputation in the community. They could have done a great deal to help that by how they handled the Maybell sale. Apparently, they still feel that antagonizing the neighbors is somehow the right approach politically, even though it worked so catastrophically in the rezoning.
We all walk, bike, or drive by that site daily, because it's the only way out of the neighborhood to Palo Alto. We all know PAHC and the City never at least even gave us the chance to save the orchard (AND find a way to make the housing a reality). People [portion removed] can try all they want to rewrite what happened to suit their opinions, but the rest of us know. I don't know why Nancy Shepherd is even considering another run.
Posted by SWE,
a resident of Green Acres
on May 4, 2014 at 11:56 am
SWE is a registered user.
"But that option was not on the table."
But that option WAS on the table. In fact, the City actually HAD TO consider the option.
The City, by virtue of its close involvement in aiding in the purchase of that property and providing loans, had to consider what to do, whether to purchase it after Measure D. There was a meeting in which the option was specifically weighed.
They could have purchased it and held it temporarily, even 6 months, to give residents a chance to save the orchard. They could have purchased it and let residents have that working group after all and figure out how to provide some affordable housing there, as they would have if that option had been given them.
Marc Berman warned that it wasn't safe as is, and all of Council indicated that a market-rate development under existing zoning would be even less safe, and a belief that they couldn't do anything about it if a market-rate developer wanted to build under zoning. Given that City Council's primary responsibility is to safety, and they have a policy of greater scrutiny and standards for safety on school commute routes, and given that the route has only recently been subject of a major safety improvement (was as safe as it was going to get), the City could have temporarily purchased the orchard, done the safety analysis the neighborhood was demanding all along with the bikes and pedestrians included, and put any deed restrictions necessary on the property before selling it.
The City could have made a profit, as we now see, and at least discharged their duty to safety. But no, that would have meant they would risk having to put low-traffic restrictions on that parcel, and lose the chance to rub the uppity neighbors' noses in it. PAHC began quietly shopping the parcel to their stack-and-pack partners the next day.
As for what will happen with that parcel and Nancy Shepherd, we shall see. Before the rezoning and election, City Councilmembers and PAHC refused to acknowledge that there was even opposition to the rezoning, to the new way they intended to finance new projects as implemented there, or even to the way they were densifying Palo Alto. Most of them insisted the majority of Palo Alto was with them, in statements that sounded very much like the one you just made.
You may be right about the advantage of incumbency. But we just won a land use referendum that 3 former mayors told us was impossible in which the City Attorney was able to write the ballot and make an unbelievably biased analysis and ballot question in the City's favor, a massive advantage that outstrips the usual incumbent advantage and we did it because we got connected to much of the rest of Palo Alto, who hate what this Council, including Nancy Shepherd (especially Nancy Shepherd) are doing to Palo Alto.
Most of them, including me, like Nancy Shepherd as a person but do not like her as a Councilmember, and if they are reminded every day because they have to fight against overdevelopment at that parcel again, they will be actively trying to unseat Nancy Shepherd. Hubris didn't serve her well in the last election, we'll see how well it serves her in this one.
Someone can put in 15-18 homes on 6000 square foot lots on that parcel and make many, many millions in profit, with no controversy, and homes almost certainly sold before built. Or they can try to put in condo development as you say, with the number of units the Council has publicly already deemed unsafe, and face certain litigation and seeing what we would have done if we had lost Measure D. We are neither without options nor the will to do so. So we will see how smart a for-profit developer chooses to be.
If you think we are without options, I invite you to take a drive over to the Glenbrook extension, and see what was put in by a for-profit developer on that RM-15 property. You forget, we have been consulting with land use attorneys, and will continue to fight if someone thinks they can put in any high-traffic use there.
Regardless of what goes in there, it will have to comply with height, setback, daylight plane, parking, density, and other restrictions of the zoning. If someone wants to go for density, they will have to build smaller and smaller units that are less desirable, and lose the premium they get for larger homes in this neighborhood, and have to invest a great deal more in the planning and structure, with an uncertain timing because of certain legal challenges from the neighborhood. If they want to maximize profit, they aren't going to give a rat's ass about your revenge fantasies, either.
Those of us who live here will continue to work to protect children's safety which is an issue for many people beyond Barron Park, and was the primary motivator for what we did with Measure D. We were also hoping for the best but planning for the worst, so we already know we have recourse.
But back to the original point: City Council overtly chose to do nothing, as was the staff recommendation, when it came to saving the orchard. People like you gave them political wind to do it. Enjoy seeing the trees bulldozed, because we would have otherwise saved them, AND ensured the affordable housing got built.
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