Town Square

Big bucks fuel campaign for Maybell development

Original post made on Sep 28, 2013

Opponents of Measure D might have the signatures, but it's the supporters who have the funds, campaign-finance statements released Friday show.

Read the full story here Web Link posted Saturday, September 28, 2013, 7:42 PM


Posted by Appalling, a resident of Barron Park
on Sep 28, 2013 at 9:46 pm

"Palo Altans for Affordable Senior Housing ... has raised more than $104,321 for its campaign.... The Housing Corporation kicked in $50,000 to the pro-Measure D campaign, with a little more than $10,000 in cash coming from other sources."

So a developer is pouring in mega-bucks to ram its project down the throat of the neighborhood? The more I hear about the Housing Corp., the less I like. It is appalling - a corporate developer simply trying to get its way vs. the community.

They do themselves and the cause the support a serious dis-service. I hope they are stopped.

Posted by Voting No, a resident of Green Acres
on Sep 28, 2013 at 11:02 pm

What the pro-rezoning side don't tell you is that the ordinance mainly enables a financing scheme that makes the housing cost less to the City at the expense of the neighborhood via increased density, severely inadequate parking, etc. More than half the property is going for market-rate for-profit development, and the "affordable" component is shoehorned onto less than half the property, in a 50-foot building (when existing zoning limit was 30 feet). Web Link

And they also don't tell you that they only care about making some "affordable" housing for Palo Altans, they don't care very much about poor people in the rest of California. The funding scheme enables them to basically win funding away from less affluent cities who would provide far more housing for less money to people who are truly poor.

As much as they advertised this property by saying (in the ordinance) that the need is because of seniors living below the poverty line in Palo Alto, the residents who will live there will be limited to those making far more than the poverty level.

They didn't even plan this property for seniors to begin with -- in other words, they decided they wanted the property and did whatever it took to get it, they didn't have a clear idea of how to best meet the need of low-income residents and try to do that. If they did, the City would be working with neighbors to try to save the far more low-income residents at Buena Vista (in that same neighborhood) instead.

Posted by Barron Parker, a resident of Barron Park
on Sep 28, 2013 at 11:38 pm

PAHC is a non-profit organization that develops affordable, low income, and section 8 housing. To call it "the developer behind 567 Maybell Ave" is not really accurate. Peery Arrillaga is a "developer." "Developers" are for profit. If you insist on calling PAHC a "developer" at least call them a "nonprofit developer of affordable housing." You make this sound like some billionaire developer and 27 University. Get real. PAHC is a non-profit organization. I understand that the City Council should have had greater transparency in its approach to this project but there is no need to sensationalize the role of PAHC. You have allowed a lot of anonymous comments to disparage this fine and important organization, its leaders, and so forth accusing them of deception and fraud and corruption. Ginning up a bunch of bad feeling toward PAHC serves no ones interests and its not accurate or civil or appropriate.

Posted by Vote No, a resident of Green Acres
on Sep 29, 2013 at 12:15 am

@ Barron Parker,
Sorry, you're just flat out wrong.

Put the phrase "non-profit developer" into Google, and you will find page after page of links to organizations for (drumroll): Non-profit developers.

Here's a list of "non-profit developers" in the Bay Area: Web Link

It includes Eden Housing, who is the developer behind 801 Alma. It does not include PAHC, yet, because they are only aspiring to be developers, this is their first big act as DEVELOPERS.

Also, more than half the property at the Maybell site will go to FOR-PROFIT MARKET RATE DEVELOPMENT, which PAHC is upzoning for the market-rate developer first so the for-profit developer can make a bigger profit by violating the neighborhood zoning. So, PAHC is involved in market-rate development on more than half the property.

They are also responsible for bringing this financing scheme to Palo Alto, where any large property can now be turned into high-density in any residential neighborhood, with the City loaning money to purchase, more than half being sold off to market-rate developers upzoned for their benefit to make the most money, and the remainder for a high-density high-rise affordable development behind it. If voters greenlight it at Maybell, the City Council and PAHC have every intention of repeating it all over Palo Alto.

Most of us in the neighborhood were supporters of PAHC before this. I was personally shocked at how they never even tried to work with the neighborhood and how they do not think of themselves as part of the community. No one has to "gin up" bad feelings toward PAHC, they have done this all on their own, with a lot of help from the City Council.

Posted by Vote No, a resident of Green Acres
on Sep 29, 2013 at 12:50 am

@Barron Parker,
"You have allowed a lot of anonymous comments to disparage this fine and important organization, its leaders, and so forth accusing them of deception and fraud and corruption."

Beauty is as beauty does. Same goes for ugly. And "corrupt" (your term, I've actually never used it to describe PAHC myself).

PAHC submitted an application for funding to the state which contained unequivocal verification of the PC zoning status before the City Council final vote, and more than a month before the rezoning would have been in place at the earliest according to their own staff report (it still technically has not been rezoned yet because of the referendum). This zoning was a requirement of their application, and if it's so meaningless as you say, why did they submit such a misrepresentation? Maybe they're so confident of winning the referendum, they feel they can continue to lie to the state? (Even if they win, neighbors are not out of recourse in fighting the rezoning.)

In fact, they've submitted more documentation as of July 25 by Tim Wong once again that claims the Palo Alto Medical Foundation at 795 El Camino is less than 1.5 miles away from the Maybell location, and that the only environmental or land use issues associated with the site is the MND prepared for traffic -- even though there is a CEQA lawsuit that neighbors have very good standing to prevail on, there will almost certainly be litigation under the Subdivision Map Act (that neighbors have extremely good standing to prevail on), and there is currently a referendum (which neighbors face an uphill battle on because they are so outgunned and the City Attorney got to write the "impartial" ballot analysis and ballot question, but luckily it's not their only recourse). They also claim there is a general plan amendment, even though the City council rescinded it because of the referendum.

They also go on to explain why the housing is needed by stating that 20% of Palo Alto seniors live below the poverty limit — it's actually less than 10% — and even if it was 20%, not a single one of those seniors is going to be served by the income bracket the development is planned for, not even close.

There's much more -- the application is subject to Public Records Act requests, anyone can ask the California Tax Credit Allocation Committee for a copy. Neighbors are reluctant to say anything to the Committee, so no, they have not ratted PAHC out, even though PAHC frankly deserves it for making so many misrepresentations.

These misrepresentations are not harmless, since PAHC is in competition for funds against considerably less wealthy communities, who can provide far more housing for less money, to people who are truly poor. Correct me if I'm wrong, but they seem to be asking for such a large amount of money, they will be taking the whole pot if they win, whereas all of the other applicants in those less affluent communities would share the money for their low-income housing projects otherwise.

This is like High Speed Rail. I voted for that too, on principal. The devil is in the details, especially if they are seriously misrepresented.

Posted by common sense, a resident of Midtown
on Sep 29, 2013 at 7:13 am

Barron Parker, how does a non-profit come up with $100,000 in campaign money so quickly? and you realize that PAHC doesn't pay property taxes as a "non-profit" on their properties, which are worth at least $500 million? so they aren't contributing to the schools and city services, even though they have around 1000 units of housing. Meanwhile many households in Palo Alto are dual income households to afford the mortgage & property taxes.

Posted by A neighbor, a resident of Barron Park
on Sep 29, 2013 at 8:11 am

PAHC is a developer and a corporation like any other one and pursues its goals with LOTS of money. Developer and special interest money is flowing into PAHC rapidly. Take a look at their board of directors to see that it is basically made up of attorneys, developers, real estate attorneys and so on.
Web Link

Being non-profit means they don't give out their profits to investors, they just keep it themselves and spend it as they wish.

Think about it, REI is also a nonprofit. Do you believe everything they tell you? Will you just open your wallet and have them take what they need?

Posted by Barron Parker, a resident of Barron Park
on Sep 29, 2013 at 8:48 am

Wow watch the spittle fly. Anyway, PAHC is a non-profit. I think that the PA Weekly should be accurate in its reporting. Phrases like "big bucks" and "developer behind" the project imply something quite insidious.

In case anyone over there is at all interested in accurate reporting, the $44,000 is "non-monetary" not "monetary." It's a bit of a detail, I know.

Posted by Timothy Gray, a resident of Charleston Meadows
on Sep 29, 2013 at 9:17 am

Not-for-profit is purely a tax exempt status.

There are not-for-profits that act benevolently, and those that have the tax status to serve the business aims of the board members and "donors".

I offer this without a judgement -- we can all make our own observations.


Posted by NO-Gets-My-Vote, a resident of Another Palo Alto neighborhood
on Sep 29, 2013 at 9:25 am

> and you realize that PAHC doesn't pay property taxes
> as a "non-profit" on their properties, which are worth
> at least $500 million?

This is an important point. The exact market value of their properties probably isn't $500M—but their properties are worth a goodly sum---and they don't pay property-based taxes, other than parcel taxes. All of the occupants of these properties require police, fire, and social services—often at a much greater level than those residents living in single-family homes. The cost of these services is shifted to single-families, and businesses. Moreover, people living in these projects can vote—and seem to have no problem voting higher taxes on their neighbors, while being exempt, themselves.

For instance, the PAHC property at 360 Sheridan is assessed at $6.4M, but qualifies for a 100% exemption . Assessments generally are between 3 and 5 times market value. So, this property is likely to be worth somewhere between $20M and $30M. Given that this is Palo Alto, one might suggest that the property could be worth more, based on who's buying it and what purpose they intend for it.

But given this assessment, this property is not contributing about $64K in taxes yearly, which pay for the quality of life in this town. The folks in these properties are riding on the backs of others.

It's unlikely that the PAHC portfolio of properties is worth $500M, but it's probably worth upwards of a couple hundred million.

Posted by Barron Parker, a resident of Barron Park
on Sep 29, 2013 at 9:29 am

TIm, this is a journalism question. Is it accurate to call PAHC a "big bucks developer"? Is it accurate to call the $44K "monetary" when it is "nonmonetary"?

I think everyone's interests would be much better served by bringing it down a notch and this story really ratchets it up. I know that to the people who live on Maybell this feels really important and they are very emotional about that. The newspaper can report on that emotion without joining it.

One thing that would help would be to report accurately that PAHC is a nonprofit that will sell off half the land it purchases for the construction of homes and use the profits from that sale to provide subsidized senior housing. THen if Gennady wanted to do so, he could quote you saying that Tim Gray called into question whether or not PAHC was acting in the interest of the community or in the interests of real estate developers "There are not-for-profits that act benevolently, and those that have the tax status to serve the business aims of the board members and "donors," said Gray. Gray, who is not a Barron Park resident, ran for City Council unsuccessfully in 2012 and is evidently using the unhappiness with Maybell Avenue as a launching pad for his 2014 campaign.

[Portion removed.]

Posted by common sense, a resident of Midtown
on Sep 29, 2013 at 11:02 am

Barron Parker, the $44,000 paid to employees to work on the pro Measure D campaign is money. And when we are talking millions of dollars in land costs, millions of dollars in construction costs, and millions of dollars in profits, I would call that "big bucks".

Posted by Appalling, a resident of Barron Park
on Sep 29, 2013 at 4:11 pm

@Barron Parker - as others have said, you are confusing tax-status with benevolence. PAHC is acting as a developer here, pure and simple, spending big bucks to ram its project through over the objections of the neighborhood. You want to "bring things down a notch" - they have donated $50K in cash and $44K in in-kind contributions vs. less than $10K in cash from others. THEY ARE THE ONES DIALING EVERYTHING UP, which forces the rest of us to push back with vigor.

You seem like a reasonable person - perhaps you (and others) should re-evaluate your view of this Corporate Developer (yes, they are a corporation; yes, they are a developer) based on their behavior, not their tax-status.

And a dig at Tim Gray - wow, that's not very classy. As far as I can tell, he calls it like he sees it and let's the rest of us judge for ourselves. Your ad hominem attack ("carpet bagger") suggests you are not confident in your argument.

Posted by Steve, a resident of Charleston Gardens
on Sep 29, 2013 at 7:40 pm

In my view, PAHC and their enablers went way to far with the Maybell development. The Mission of the PAHC as I understand their purpose is to facilitate the creation of affordable housing in Palo Alto, fine. But, for PAHC and the city to ram rod this particular project into a neighborhood with valid concerns and objections about the scope of the project, not the purpose of the project, as irrelevant and nimby, goes way beyond their mandate. At this point PAHC and the city are testing the waters for where more such projects can be forced into other neighborhoods with little regard, or need, for neighborhood input. That PAHC has $100k to fund their ballot initiative begs the question of just how much money does this not for profit have, and who's really funding this campaign?

Posted by Paranoid Conspiracy theorist , a resident of Green Acres
on Sep 29, 2013 at 8:39 pm

[Post removed.]

Posted by Vote No, a resident of Green Acres
on Sep 29, 2013 at 11:41 pm

The big bucks PAHC is spending on the campaign is probably not going to be as serious a problem for the outcome as the manipulative and leading way the City Attorney wrote the "impartial" ballot analysis and ballot question.

It costs a lot of money to reach voters, but the ballot materials go to everyone.

I think most people assume some authority in the county writes the impartial analysis, or even they realize the City Attorney does it, do not realize the extreme prejudice with which city staff have pursued railroaded through this project, including the City Attorney.

The way the question is written makes it seem like people are being asked if they want senior affordable housing or not. It makes it seem like the ordinance is for the building of the senior housing, rather than for the high-density zoning. The League of Women Voters Vote Smart site doesn't even use the word "zoning" or "rezoning" in the first several paragraphs. The site even makes some interesting mistakes, like when they do finally mention the 50-foot building, it's typed in as a "SO-foot" building. What's a so-foot building? Who cares if you think you're voting senior housing up and down, which is a misleading and manipulative way to represent the choice.

It's really interesting that the "impartial analysis" in its limited space includes something about an electric vehicle charging station, but never really makes it clear that an important purpose of the ordinance is to enable the upzoning/violation of existing zoning by 3 or 4 times, of more than half the property for a market-rate development.

Voters are not going to get an accurate picture of both sides from the ballot materials, and that places a huge burden on neighbors who are clearly hugely outgunned here.

Posted by Vote No, a resident of Another Palo Alto neighborhood
on Sep 29, 2013 at 11:42 pm

My apologies, I really did proofread before posting, not sure why so many mistakes. This is what I meant to say:

I think most people assume some authority in the county writes the impartial analysis, or even if they realize the City Attorney does it, do not realize the extreme prejudice with which city staff have pursued railroading through this project, including the City Attorney.

Posted by Boffo, a resident of Midtown
on Sep 30, 2013 at 8:52 am

Speaking of non-profit: TIME magazine did an expose on hospitals a few months ago, and the (surprise!) hospitals that charged the most money and had the biggest profits, as well as paying the highest wages to administrators were non-profits.

The definition is very loose.

Posted by Anonymous, a resident of Another Palo Alto neighborhood
on Sep 30, 2013 at 11:49 am

Developers own the City Council so why should is it surprise anyone that a non-profit PAHC puts $50K into passing Measure D.

Posted by Go Barron Park, a resident of Barron Park
on Sep 30, 2013 at 1:18 pm

It's great to see that the Barron Park Association is the largest supporter Against Measure D. It's clear that the large marjority of the neighborhood is against the project. $100K total (monetary and in kind contributions) from Palo Alto Housing plus several attorneys and developers vs a neighborhood association and individual assocations. The money paints a great piucture

Posted by Bob G, a resident of Hoover School
on Sep 30, 2013 at 7:02 pm

I don't live in the Maybell area. But am disgusted at the City Manager's and Council's lame handling of this initiative - it should have been shot down on the spot and never have reached the ballot box.

How can we help kill the Palo Alto Housing Corporation including all of their future initiatives. They are a very SPECIAL INTEREST GROUP, w/interests previously on the City Council - e.g., John Barton who made a fool of himself and city management by pushing through the Alma project.

Posted by PA Resident, a resident of Another Palo Alto neighborhood
on Sep 30, 2013 at 10:58 pm

I take issue with people who slam everything the PAHC does. If you don't like the Maybell proposal, fine. However, this non-profit has done tremendous things to help our residents who can't afford what many of us take for granted. I live close to one of their projects that has quite a few families residing in it. My high schooler and elementary age child have both known kids who lived there. I have a friend who mother has lived here her entire adult life and could potential benefit from this project as paying market rate rent is certainly not an option for her any longer. I am grateful that there are citizens in this town who care about housing our low income friends and neighbors. I have no problem with people taking issue with the proposed height increase, but you can bet I do when such negativity is cast on the PAHC as a whole! Needless to say, I will be voting in favor of Measure D

Posted by Vote no, a resident of Green Acres
on Oct 1, 2013 at 12:33 am

@PA Resident,
Most of the people AGAINST Measure D also know people who live in PAHC and other low-income developments, because there are several in the immediate area. Support for affordable housing is high in that neighborhood. Support for PAHC WAS high until they started attacking neighbors.

The City is who got PAHC into this, ask them who told them to focus on that parcel. The City and County loaned millions to purchase it (one of the councilmembers' law firms represented the seller), and they put in place this very complicated and rigid financing setup before taking any public input. They left themselves no discretion to really consider public input. So they attacked neighbors instead to get their way. The turning of many former supporters against them was inevitable.

If Measure D is passes, it won't be the end of the battles over the parcel. For neighbors, it really is about that parcel, the limitations of the infrastructure, the safety of the kids, the character of the neighborhood - so they are already planning on fighting even harder if they lose on the referendum on several legal fronts, including pursuing any causes of action related to conflicts of interest.

If you care about PAHC and its reputation in the community, take it from this former longtime supporter -- vote AGAINST Measure D, and help them salvage their reputation and move on to something more positive, with the lesson that they need to care about being a part of and work WITH rather than against the community. (Something about "don't bite the hand that feeds you".)

@ Bob G,
There are a few things underfoot you may wish to know about:

1) When he spoke to the council, Bob Moss warned that if they voted in this ordinance, he would bring an initiative to seriously curtail PC zoning in residential neighborhood areas.

2) Neighbors had their eyes opened with the Maybell referendum to the fact that the City Attorney writes the ballot question and "impartial" analysis for referendums and initiatives, creating a misleading and prejudicial ballot. It makes it kind of hard to win referendums and initiatives. As a result, some neighbors have called for an initiative to create an impartial ballot committee like the one in San Francisco, instead of letting the City write their own elections. Such an initiative will probably be necessary if Palo Altans want to win a PC zoning restriction initiative, because developers will spend even bigger bucks against that one.

3) Neighbors realize they can't just be against the overdevelopment of that parcel, but if they want to see a low-traffic use, and see the heritage orchard preserved, they need to be ready to act. So expect to see an initiative to save the orchard, and please support that, too.

Neighbors are badly outgunned on Measure D - consider putting in an AGAINST lawn sign (and making a donation to cover it!) and talking to your friends and neighbors around town so they understand what is at stake in the Maybell election. The financing scheme that is being tested there alone is a reason every Palo Altan should vote Against Measure D.

Posted by Sasquatch, a resident of Stanford
on Oct 1, 2013 at 2:42 pm

I do not live near Maybell, but the whole idea that residents have no choice of how their neighborhood is developed just makes me sick!

Posted by No, VOTE YES on MEASURE D, a resident of Barron Park
on Oct 1, 2013 at 4:11 pm

[Post removed.]

Posted by kb, a resident of Barron Park
on Oct 3, 2013 at 6:23 pm

Great. So PAHC doesn't have enough money to fund the project under the existing zoning, but they've got enough extra cash to fund the election campaign. Since PAHC took millions in city loans, they're effectively waging a campaign battle against the residents with our own money.

What really gets me is that instead of asking the city council for enough money to fund the project without rezoning, PAHC and the City Council came up with this harebrained scheme to fund it for less and make up the difference by rezoning the property. So because they and the council are too cheap, the neighborhood gets stuck with this high density development.

And where is the council on all this? They've been incredibly quiet on this issue all year. I suppose they're too chicken to let their opinions be known. Any council members out there want to let us know what the heck they were thinking? Didn't think so.

I think one of the real problems here is that the council members are all at-large members, instead of district-based. If we had a council member representing Barron Park, they would have stood up for the neighborhood, and this wouldn't have happened. Anyone know why Palo Alto has all at-large council members?

Posted by Vote no, a resident of Green Acres
on Oct 3, 2013 at 9:33 pm

@ kb,
Actually, Gail Price is glad to tell you how PC zoning allows the council to be so "creative" and the City staff call this new financing mechanism that foists costs onto neighborhoods through densification and market-rate giveaways to developers as a "creative" new funding scheme.

The scary thing is that some of those councilmembers have a vision for the Manhattanization of Palo Alto. Is that what we, the residents want? Whose town is this anyway? They think they are our overlords!

Posted by kb, a resident of Barron Park
on Oct 4, 2013 at 9:04 am

@ Vote No

Yes, you're absolutely right. I say we kick all the bums out. But then we'll just get new bums.

The more I think about it, the more I believe that the at-large nature of the council is to blame. The council members aren't really accountable to a group of constituents specifically, and as long as they raise enough money (hello developers!) and have good name recognition, they'll get re-elected.

When I lived in Chicago a long time ago (arguably not a model for governance, but it worked well in this area), no rezoning or large developments were approved without the approval of the local alderman (i.e., council member) representing the neighborhood. And the local alderman never approved anything without getting the support of the local neighborhood associations, because he knew that the neighborhood association could make or break him in the next election. It seemed to work fairly well.

Posted by Fred, a resident of Barron Park
on Oct 4, 2013 at 9:22 am

@kb - yes, at large only is a known problem, creating a system where moneyed interests (developers, unions) are well represented, as well as certain parts of town. In a discussion on this topic, I once had someone tell me that Palo Alto governance was so complicated that you really couldn't rely on getting candidates from all over the city who could meaningfully contribute - I'll leave it to readers to guess what part of town he was from.

Some places have district-based seats plus 1-2 at-large seats - that might work well here.