1. Cost of land. This has been a source of question for some time now. The developer has claimed that any additional retail would bring a financial loss. In reality, the purchase price of the land was far below market rate. The Santa Clara County Assessors’ Office website shows that on October 12, 2005, parcels at 3401, 3417 and 3445 Alma were transferred as follows:
Parcel 132-28-009, 3445 Alma: Land $3,390,000; Improvements $2,000; Total $3,392,000.
Parcel 132-28-073, 3407-3437 Alma: Land $2,240,000; Improvements $3,000; Total $2,243,000.
Parcel 132-28-074, 3401 Alma: Land $365,000; Improvements $0; Total $ 365,000.
In short: the developer paid $6 Million for the entire Alma Plaza site, a price-per-acre that has not been seen in Palo Alto for a very, very long time.
2. The nature of Greenbriar Homes’ projects.
According to the company website, current and past Greenbriar developments are 100% residential. This sheds light on the developer’s wish to subdivide Alma Plaza, eliminate most of the retail services provided now, and replace retail with housing – even at ground floor.
3. The cost to build housing.
Professionals in real estate development report that the actual cost to build housing (excluding land and site improvements) averages somewhere in the range of $190 – 220 per square foot. Greenbriar has a development in Dublin, “Riva,” of homes similar in size to what are proposed for Alma Plaza. At Riva, Greenbriar bought the land, made site improvements, constructed the homes, and now is selling them profitably for $669,000 to $769,000 – far, far below the range of $1.5 Million these same homes would sell for in Palo Alto, with a similar cost basis as in Dublin.
4. The sales price for homes in Palo Alto.
According to Alain Pinel Realtors and others in real estate, the average selling price for homes in the area of Alma Plaza in 2006 ranged from $740 per square foot in South Palo Alto to $835 per square foot in Midtown. Applying the more conservative multiplier to 39 housing units proposed for Alma Plaza, at an average of 2,000 square foot each, totals $57,720,000 total from the sale of residences.
5. The “benefit” of public benefit
The value of the in-lieu public benefit for affordable housing should be based on the actual anticipated selling price of homes at market rate, not the lower “asking price” that has been suggested by the developer.
Separately: Apparently the Pacific Art League intends to sell their downtown building. The second and third floors, now used as studio and gallery space, would be converted to condos; the Art League would buy the first floor back for their own use. Would space for the Pacific Art League at Alma Plaza represent net additional space for this non-profit, as a public benefit? And why is this space being identified for three separate uses: non-profit, as private meeting space for residents, and as retail space? Each use is different, and only retail space is “retail.”
6. Finally: what “process”?
We have seen in the recent past situations where a developer proposes a massive over-build and blames community members for delay and “process” when they merely ask that the Comprehensive Plan and reasonable zoning be applied. Jim Baer wrote an eloquent Guest Opinion published in the May 26, 2004 edition of the Palo Alto Weekly. His words are as relevant to Alma Plaza as they were in the context that they were written.
The full opinion can be read at Web Link. An excerpt follows:
“The unpredictable bumps of the Process will not defeat a project if -- and this is critical -- the project has a sense of gravity (momentum) and downhill direction, meaning whether a project is "approvable," as consistent with community policies.
Here is where Hyatt created its own fully predictable failure. Experienced persons in the community predicted that more than 300 housing units would never be approved.
This was made clear to Hyatt as early as 1997, when Solit interviewed more than a dozen Palo Alto insiders (names familiar to Palo Alto readers). City staff, Chamber of Commerce leaders, council members, developers and residential activists advised Hyatt that its project was effectively dead on arrival.
The hotel was not the problem. A project with 200 housing units would have been approved within two years. Hyatt's proposed 300 housing units plus hotel could have received a denial within the same time. Hyatt prolonged the Process rather than (1) accept certain denial for its 300+-unit project or (2) cut back to 200 units.
We cannot know whether Hyatt's refusal emanated from Hyatt's Chicago headquarters, overconfidence from past successes, or local arrogance. In any case, Hyatt created its own Process -- for failure.”
Palo Altans will be proud of a development at Alma Plaza that incorporates true mixed-use, retaining ground-floor retail to serve the center’s neighborhood and beyond.
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