Publication Date: Wednesday, October 12, 2005
How pro-business should Palo Alto be?
How pro-business should Palo Alto be?
(October 12, 2005) Campaign focuses on balancing city revenue sources by becoming more business friendly and proactive
by Bill D'Agostino
The message this political season is clear: Palo Alto is embattled in a "war" to retain its tax dollars and needs to stop resting on its laurels.
The 10 candidates fighting for five seats on the City Council have vastly different backgrounds, but all agree the city is not doing enough to protect its revenues.
Most candidates, even one of the two incumbents, say the council has been too slow to react to the area's economic slowdown. Two auto dealerships, Agilent Technologies and Hyatt Rickey's have all shut down or left town in recent years -- costing the city more than $1 million a year in revenue, according to a recent report.
The issue has become so central to the campaign that an entire forum was dedicated to it on Monday, and a new group, KORE (Keep Our Region Energized), has been formed to advocate for a better local business climate.
The most frequently mentioned example of the city's supposed passivity is Alma Plaza, the run-down shopping center once home to Albertson's grocery store. For years, Albertson's attempted to revitalize the center without success. The store closed last year and the company sold the center to a local developer, who is proposing mostly housing there.
A redevelopment plan for the site never reached the City Council, because the city included the property in a moratorium during a traffic-impact study of the Charleston/Arastradero roads corridor. Candidate John Barton, a school board member, said council members should have required that one of the proposals be voted upon.
"I think the reason we probably lost a grocery store there was really a function of a lack of leadership," Barton said.
The loss of Hyatt Rickey's on El Camino Real is also cited frequently. Hotels are especially important to the city because occupants pay a 10 percent tax on their room rates -- that money goes directly to the city. This year, the city projects it will collect approximately $6 million from the hotel occupancy tax.
Former Mayor Larry Klein wants the city to find a spot for a new upscale hotel, although he offered no specific location. He's suggested the city partner with Stanford University, but since his wife is a professor for the university, he would be unable to work on such a proposal on the council.
Three candidates -- Karen Holman, Peter Drekmeier and Yoriko Kishimoto -- advocate raising the hotel occupancy tax to the 12 percent charged in other neighboring cities. Kishimoto, an incumbent, has also been pushing for a citywide, high-speed telecommunications network, which she said could entice businesses to Palo Alto.
Numerous candidates said the council should fix the city's "protracted" planning process. Both Holman, a planning commissioner, and Drekmeier, an environmental activist, said the city should hire an "ombudsman" who could walk applicants through the various steps needed for permits.
Such a person "will save applicants money, it'll help our retailers, plus the cost to the city would go down because they wouldn't have to charge as much," Holman said. "So it's a basic streamlining, practical approach to getting something done."
Harold "Skip" Justman, a real-estate lawyer, is recommending that the council set a policy that requires fewer meetings and hearings to make a decision on an application.
"A good decision is better than the perfect decision six months from now," Justman said. "We're fighting a war to keep businesses here. If you're fighting a war to keep businesses, you need to approve a good plan in a week rather than beat them into a perfect plan in six months."
Jack Morton, the race's other incumbent, said the community needs to shift its attitude about business, but offered no specific new proposals.
"You have to be very sensitive to the fact that businesses need ... a supportive environment and they need to be supported by the community," Morton said. "So if you lose those two factors then you're going to lose the businesses."
Mayor Jim Burch, who is not running for re-election, defended the council. He said the past four mayors have each made supporting the city's retailers their main initiative, starting with Mayor Vic Ojakian, who started a retail committee in 2002.
"Having been on the inside, I'd say there's been a great concern about doing everything we can to support retail," Burch said.
In October 2003, City Auditor Sharon Erickson issued a scathing, in-depth report about the city's Department of Planning and Urban Development, with 34 recommendations. Since then, there has been an emphasis on speeding up approvals.
The council recently lifted some zoning restrictions for auto dealers and is now searching for a place to build an auto mall. The city brings in approximately $2 million a year in sales tax from its auto dealers.
Candidate Norman Carroll, an un-housed activist, said he was supportive of the city's desire to help auto dealers. The city, he added, would have to "bite the bullet" and offer new incentives for them.
"If we want to keep the car dealerships we're going to have to be willing to possibly compromise on things like a little bit of signage along the freeway that may not necessarily be pleasing to everyone. But if they want to keep some of the city services, the revenue has to stay here," Carroll said. "There's no two ways about it."
When asked if the city was doing enough to protect its revenues, two candidates -- Danielle Martell and Victor Frost -- said lawsuits were costing the city too much money. Frost did not specifically mention any lawsuits. Martell referred to a claim against the police department filed by a black man, Albert Hopkins, who said officers Michael Kan and Craig Lee beat him unprovoked. The city settled for $250,000.
Staff Writer Bill D'Agostino can be e-mailed at bdagostino@paweekly.com.
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