News

Eshoo 'very concerned' about Wells Fargo's apartment sale

 

As Wells Fargo Bank prepares to sell about 1,800 housing units in East Palo Alto to a real-estate trust, U.S. Rep. Anna Eshoo, D-Palo Alto, has joined city officials in calling for the bank to make sure the sale doesn't spell the end of affordable housing in the Woodland Park neighborhood.

The bank, which acquired the properties last year in foreclosure, plans to sell the portfolio to Equity Residential, a national company headed by real-estate magnate Sam Zell. East Palo Alto officials and tenant activists have been adamantly opposing the sale, arguing that allowing one buyer to acquire the entire portfolio would leave the area vulnerable to redevelopment and would threaten the city's affordable-housing stock.

The properties were previously owned by Palo Alto-based company Page Mill Properties, which infuriated tenants by raising rents and filing about a dozen lawsuits against the city, challenging its rent-control laws.

Despite the city's protests, the bank indicated in a letter to the City Council last week that it plans to proceed with the sale to Equity, a sale that's expected to be finalized in October.

Eshoo, whose congressional district includes East Palo Alto, wrote in a letter to Wells Fargo CEO John G. Stumpf that she is "very concerned about the fate of these properties because there will be a profound and lasting impact on the community of East Palo Alto and my Congressional District.

"At present, the region suffers from an inadequate inventory of decent, safe and affordable housing," Eshoo wrote.

East Palo Alto has officially requested that the bank halt its sale until the city releases certificates of Maximum Allowable Rent for each unit of affordable housing. City Manager M.L. Gordon also requested in an Aug. 19 letter to Wells Fargo that the bank, as a condition of sale, require the buyer to provide written assurance that it will "abide by and conform to the requirements" of the city's affordable-housing laws.

But bank officials argued in a recent letter to the city that Equity is well qualified to offer the residents of East Palo Alto a "better quality of life" than they have experienced historically. Wells Fargo Senior Vice President David Ash and Vice President Robert Maddox said the buyer would have the "capital, personnel and incentive to provide monetary and non-monetary support to the community overall."

The City Council last week agreed to send the bank another letter, reiterating its request that Wells Fargo not sell all the properties to one buyer. The council also called on the area's religious, political and civic leaders to petition Wells Fargo to reconsider the sale.

In her letter, Eshoo wrote that her "hope is that along with community leaders, residents and advocates, residents will have protections and East Palo Alto will continue to be an affordable community for generations to come."

Comments

Like this comment
Posted by Arch Conservative
a resident of Menlo Park
on Sep 30, 2011 at 10:26 am

The Honorable Congresswoman is perfectly free to gather her friends and/or funds and buy up the outstnding properties and then manage them to the betterment of those citizens. But until then, Wells owns the properties and can do with them what the want. It's called "Private Propertu".


Like this comment
Posted by Cid Young
a resident of another community
on Sep 30, 2011 at 10:55 am

Sam Zell is rich...so perhaps he will fix up/improve the properties and make them more liveable for the tenants. Everyone gets in a dither before knowin g the facts. Good tenants deserve god properties to live in. This is a distressed sale, so how many improvements could the former owner have afforded?


Like this comment
Posted by SP
a resident of East Palo Alto
on Sep 30, 2011 at 11:08 am

This isn't a question of freedom, its a question of responsibility. Page Mill Properties was free to act irresponsibly. They created havoc in the lives of thousands of families while looking for a quick profit, went broke, wiped out $100 mil in pension money for California government employees, and the executives are now being sued by the investors for fraud.

Wells Fargo executives made verbal promises to leaders of the community. They promised the community to break up the properties and sell them individually. They didn't do that, and so could really find very few companies that could afford to buy the whole block at once. There are organizations and individuals that would like to buy property here and "manage them to the betterment of the community". Last I looked, that is how good businesses work and make long term profits. But because of how Wells did the deal, that was impossible.

Irresponsible behavior has its consequences. Banks require customers to trust them with their money. Banks whose executives lie should not be trusted. Just about every time I or family members step in to Wells Fargo these days, they try to give me a hard sell to open an account. No thanks. Wells Fargo (and B of A for that matter) seems to have forgotten that there are other banks to do business with.


Like this comment
Posted by Garden Gnome
a resident of Crescent Park
on Sep 30, 2011 at 11:10 am

banksters, Thanks for providing an excellent point - that once a private company accepts public monies, it ceases to have a free hand to provide value to its shareholders. Instead, it becomes beholden to political concerns.

With all this intervention, I trust we'll see these properties fall into neglect before long - alas, much to the detriment of our neighbors in EPA.


Like this comment
Posted by Hmmm
a resident of East Palo Alto
on Sep 30, 2011 at 11:32 am

People aren't dreading the sale w/out good reason. It's not hard to discover Equity's poor track record on how they treat tenants, what the properties are like and why they have such low ratings given by so many of their tenants.

Wells has screwed over the City of EPA and its residents big time. This is a bad week - two residents killed in one day, and learning that this sale will go through, to the detriment of thousands of people.

Page Mill Properties aren't the only ones who dabbed in fake rental documents. Clearly, Laramar, WF's property management company, has faked a good amount of the info that they've sent, pretending to be accurate rent data.

I hope that as Zell and his henchpeople bring down suffering on others, that they suffer twofold. Being rich doesn't totally insulate them from reaping what they've sown.

We will NEVER be Wells Fargo customers. This makes me appreciate credit unions even moreso.


Like this comment
Posted by Resident
a resident of Another Palo Alto neighborhood
on Sep 30, 2011 at 1:35 pm

Eshoo being very concerned for them means nothing. Just like her representation for most of us means nothing, and for the past many years.


Like this comment
Posted by Leonor Delgado
a resident of Midtown
on Sep 30, 2011 at 2:08 pm

I find Wells Fargo's actions and attitude unconscionable. What makes bank executives feel that they are "so very special" that they not only deserve complete immunity for their crimes but also the ongoing financial support of the rest of us, especially those of us to whom they have denied employment by shipping our jobs to India and the like and foreclosed our homes? What is wrong with the country at large that it continues to allow these people (because, in the final analysis, "people" run "corporations") to get away with murder?


Like this comment
Posted by Hmmm
a resident of East Palo Alto
on Sep 30, 2011 at 4:50 pm

I'm surprised that Eshoo stuck her neck out by writing a letter & making her feelings public, espec because she's usually in bed w/the developers. So is she retiring soon, is that the reason, or was she truly morally compelled? Nevertheless, it's appreciated.


Like this comment
Posted by Walter_E_Wallis
a resident of Midtown
on Oct 2, 2011 at 7:11 am

Walter_E_Wallis is a registered user.

The property now belongs to Wells Fargo. You want to direct its future, you buy it.


Like this comment
Posted by WalterJr
a resident of Another Palo Alto neighborhood
on Oct 2, 2011 at 5:08 pm

Walter needs to stop typing about stuff he has no real knowledge of. Walter needs a job, or a date with Sharon.


Like this comment
Posted by Walter_E_Wallis
a resident of Midtown
on Oct 4, 2011 at 11:35 am

Walter_E_Wallis is a registered user.

Walter understands property rights.


Like this comment
Posted by palo alto mom
a resident of Duveneck/St. Francis
on Oct 4, 2011 at 11:39 am

Is the concern that Equity will fix up the buildings and try to raise the rents too much or that they will tear down the existing buildings and build something else? If they build new, are those building subject to the same rent control laws as the existing units?


Like this comment
Posted by Hmmm
a resident of East Palo Alto
on Oct 5, 2011 at 7:14 pm

Palo Alto Mom - thank you for asking.

There are various concerns. One would be a concerted attempt that these greedy outsiders would attempt to get rid of the reasonable rent control ordinance via aggressive litigation, a la Page Mill Properties. Another concern is that they'd tear down buildings and rebuild, avoiding rent control. Fixing up the units and charging more rent in line with rent control is of course acceptable. But a huge underlying fear is that outsiders who care not a whit about the community and its values will come in & through white collar aggression would change things by imposing *their* values on the community - and their main value is greed.

Planned community change that residents agree on is one thing - hostile takeover is another.

I have mixed feelings about rent control - I see its good & bad aspects. I'm a capitalist & I am well aware of the changes EPA needs. But changes that are determined by a community are the best ones in small community. The mix we've had so far has many benefits - resulting from planned change we've had a voice in - not change resulting from previous law breaking, harassment & out of control greed.


Like this comment
Posted by Walter_E_Wallis
a resident of Midtown
on Oct 6, 2011 at 5:07 am

Walter_E_Wallis is a registered user.

Hostile takeover? You mean when someone other than the owners, by force, takes management away from the rightful owners?


Like this comment
Posted by Hmmm
a resident of East Palo Alto
on Oct 8, 2011 at 12:52 am

Walter, you know what I mean. Your buddies at the bank is already doing some shady things with this sale. It'll be interesting to see what happens when they get nailed - which they will.


Sorry, but further commenting on this topic has been closed.

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