News

Housing Corporation responds to concerns over conflicts of interest

Palo Alto nonprofit says it has no single policy to govern all uses of its residential properties

Responding to recent community concerns and questions from Palo Alto officials, the nonprofit developer that led the 2013 push to build a housing development on Maybell Avenue has submitted a letter clarifying its policies and explaining its decision to rent out a house on the Maybell Avenue site to its executive director.

The Palo Alto Housing Corporation (PAHC) has faced criticism from several opponents of the Maybell project about its ongoing arrangement with Candice Gonzalez, who lives in one of the four houses that was set to be demolished to make way for the new development.

Tim Gray, one of the leaders of the citizen campaign that struck down Measure D in a referendum, also raised questions about the Housing Corporation's sale of the site to a builder whose broker is Gonzalez's husband.

Faced with these questions, City Manager James Keene last week submitted his own letter to the Housing Corporation, asking the agency to clarify its policies for governing "interim use of units purchased for the purpose of redevelopment" and for choosing brokers. The city also inquired about the Housing Corporation's guidelines for perceived conflicts of interests and nepotism.

The Housing Corporation has maintained that all of its actions have been legal, ethical and fully vetted by the agency's boards of trustees. But it also noted in its March 11 response to the city that when it comes to interim use of sites bought for redevelopment, there really is no policy governing the practice.

"Because each property has its unique set of circumstances there is not one policy to govern all," Board President Bonnie Packer wrote to the city.

The agency, she wrote, makes sure that all of its use of these residential units comply with all applicable loan agreements, all applicable regulatory agreements and "the intent and ultimate goal of the redevelopment."

In this case, the board agreed to rent the house to Gonzalez at market rate after the property reportedly stood vacant for more than six months, with no takers. The board stressed that unlike the many apartment complexes that it manages in Palo Alto, the four homes on Maybell and Clemo were never designated for low-income housing.

The board also pointed out in its letter that its effort to sell the Maybell site after Palo Alto voters defeated Measure D did not entail listing the property with a broker but marketed it "through word-of-mouth." This was the only site that the Housing Corporation has ever sold in its 45-year history, Packer wrote.

"The Maybell site received a great deal of exposure during the development process and the Measure D referendum campaign," Packer wrote. "Members of our volunteer board and our staff contacted many of the major homebuilders in the area. Accordingly, PAHC had a long list of potential buyers, so it was unnecessary to hire and pay a listing broker for more exposure than it had already received.

After more than a dozen offers came in, the former orchard was sold to Golden Gate Homes, a developer whose broker was Ted O'Hanlon, Gonzalez' husband. While this raised some eyebrows in the community, the Housing Corporation maintained that Gonzalez "immediately recused herself from any and all discussions, negotiations and decision regarding the sale of Maybell."

"The Board then chose the best offer based on price, contingencies and closing timeline," Packer wrote.

In addition to the letter, the Housing Corporation provided the city with a copy of its resident-selection criteria and a worksheet that the agency prepares any time there is a potential for a conflict of interest.

Packer also emphasized that the board was fully informed about Gonzalez' relationship with Golden Gate's broker and her tenancy on Maybell. The board, according to the letter, is satisfied that appropriate steps were taken to avoid a conflict of interest.

"Ms. Gonzalez immediately brought to the Board's attention the potential conflicts in both of these situations," Packer's letter states. "The Board evaluated these situations in accordance with our conflict of interest worksheet and guidelines and determined that the transactions were at arms-length, that there was no self-dealing, and that the transaction was for the benefit of PAHC."

Comments

35 people like this
Posted by Reasonable Citizen
a resident of Fairmeadow
on Mar 12, 2015 at 10:49 am

It sounds like they clearly answered the questions that the Measure D folks raised. We all have to remember that this is a board of directors comprised of solid citizens and they are VOLUNTEERS. I am sure they are doing their best, and they have done so much good for the City. There are literally thousands of families they have helped with housing in Palo Alto.


16 people like this
Posted by Bonnie Packer
a resident of Palo Verde
on Mar 12, 2015 at 11:05 am

I would like to clarify the subheader to this article which incorrectly implies that PAHC has no policies to govern the use of its residential properties. That is not the case. Indeed, PAHC has strict sets of policies and requirements which apply to each of its residential properties. These policies vary depending upon the regulatory agreements and loan requirements associated with each property and for that reason there cannot be one single, uniform policy.

PAHC properties are funded and regulated by a number of agencies, including: the U.S. Department of Housing and Urban Development (HUD); the California Housing Finance Agency (CalHFA); the California Tax Credit Allocation Committee; the Affordable Housing Program of the Federal Home Loan Bank; the Section 8 Moderate Rehabilitation Program; the City of Palo Alto through its Housing Reserve Funds; Home Investment Partnerships Program (HOME); and Community Development Block Grant (CDBG) funds. Web Link


19 people like this
Posted by Craig Laughton
a resident of College Terrace
on Mar 12, 2015 at 11:13 am

What was the market rent that Gonzalez paid? Simple question, should be a simple answer (and backed up with rent checks).

Where was the house advertised? Can a copy of the ad be produced by PAHC? Again, a very simple question and request.

I am still befuddled by the notion that leaders of the anti-D movement knew about this sweetheart deal, yet said nothing during the Measure D campaign. I have written to the PASZ website asking those questions...but I have not received a response.

Something fishy going on here....


5 people like this
Posted by gsheyner
a resident of another community
on Mar 12, 2015 at 11:14 am

gsheyner is a registered user.

Thanks for the clarification, Bonnie.

The subhead was meant to convey that there isn't a single policy that governs all interim uses of properties -- a point that you made in your letter to the city.

I recognize that my wording was somewhat ambiguous. Hopefully, the revised subhead makes things clearer.

Thanks again,

Gennady Sheyner


16 people like this
Posted by Midtown
a resident of Midtown
on Mar 12, 2015 at 11:14 am

The fact that PAHC is coming up with a long winded and complex defense pretty much says it all!


3 people like this
Posted by curmudgeon
a resident of Downtown North
on Mar 12, 2015 at 11:46 am

"The fact that PAHC is coming up with a long winded and complex defense pretty much says it all!"

Yes indeed. Why would they be so upfront if they had nothing to hide?

Sorry, Craig. Apparently PAHC doesn't take you as seriously as you do. Try another approach.


17 people like this
Posted by commonsense
a resident of Adobe-Meadow
on Mar 12, 2015 at 11:51 am

This is absurd. The PAHC is a non-profit working very hard to provide affordable housing. The board is made up volunteers that have committed a portion of their lives to provide this service. That Tim Gray and others are trying to dig up dirt on a group like this is embarrassing. They rented a vacant house on a temporary basis to someone on the board, generating income where there was none. Please find something decent to write or complain about.


15 people like this
Posted by Just the facts
a resident of Old Palo Alto
on Mar 12, 2015 at 11:59 am

The author says in part that "the Housing Corporation maintained that Gonzalez 'immediately recused herself from any and all discussions, negotiations and decision regarding the sale of Maybell.'" Immediately means when, exactly? After the receipt of bids? Once the board decided to sell the property? The timing is crucial.

Regarding Gonzalez' renting of the house, what efforts did the Housing Corporation make to rent the homes on the site? Did it list the rentals? At what rate? How much did or does Gonzalez pay? I don't know what the terms were, but I know the local market for rental housing, even short-term, is tight and expensive.


22 people like this
Posted by Shady
a resident of Crescent Park
on Mar 12, 2015 at 12:06 pm

There was a house for rent in PA that PAHC couldn't find a tenant for? Really???? PAHC needs to show where the house was listed and advertised for rent. Was it on Craig's List? How long was it advertised? Prove it. Show evidence of the rent Gonzales paid per month. Did she pay a security deposit? First and last months rent? Let's see the lease agreement that was signed by both parties.
PAHC needs to be investigated.


17 people like this
Posted by common sense
a resident of Midtown
on Mar 12, 2015 at 12:33 pm

The article states 'The board also pointed out in its letter that its effort to sell the Maybell site after Palo Alto voters defeated Measure D did not entail listing the property with a broker but marketed it "through word-of-mouth."'

Sounds like an "old boy network" to me, not an open market sale; there would have been no harm done if the property was put on the open market, and a better price might have been offered. Note there are no specifics on who, when and which potential buyers were contacted.

The article states 'This was the only site that the Housing Corporation has ever sold in its 45-year history, Packer wrote.' If the PAHC never sold a property before, the most logical course of action would be get a professional to handle the marketing and sale to obtain the best price with the best terms.

Does it make any sense for PAHC to say we've never done sold a property before, let alone a $20+ million property, so let's use 'word of mouth" to see how much PAHC can get for the property?

It just doesn't make any sense at all.


13 people like this
Posted by common sense
a resident of Midtown
on Mar 12, 2015 at 12:44 pm

Reasonable Citizen @ Fairmeadow - the board may be volunteers, but that another reason why it did not make sense not to hire a professional to handle the sale. To market and sell a $20+ million dollar real estate sale would take many hundreds of hours to try and achieve the best price at the best terms. I'm sure the volunteers don't have that amount of time to spend on this, so it would have been more logical to hire a professional.

And just because they tried their "best" doesn't mean they exercised their fiduciary responsibility as a board member in this matter - achieving the best price at the best terms. Looking at the occupation of the board members, I'm surprised that they weren't more concerned about what it means to exercise their fiduciary responsibility as a board member.


8 people like this
Posted by Sell Out
a resident of Barron Park
on Mar 12, 2015 at 12:48 pm

I hear many of these Chinese developers are buying US real estate and pre-selling these properties in China, most times not even bothering to sell to the buyers locally. A prominent real estate agent from Shanghai came to the Bay Area to scoop out developers and to reserve units to be pre-sold in China recently. Does anyone know if Golden Gate is planning to pre-sell in China? Or are we, those who live here, going to have a reasonable chance to buy?


14 people like this
Posted by Concerned in Palo Alto
a resident of Barron Park
on Mar 12, 2015 at 1:13 pm

Answer the question regarding the market rate rent.

In business, if something looks like it may be a conflict of interest, don't do it. If Candice Gonzalez is paying market rate rent for a temporary rental property, why not pay market rate elsewhere to avoid even the appearance of impropriety.

Just as she recused herself from the property deal, why not use the same logic to recuse herself from the rental property?


12 people like this
Posted by Ends and Means
a resident of Barron Park
on Mar 12, 2015 at 1:25 pm

Normally I respect your reporting, Gennady, but you have throughout this shown a bias toward PAHC that should give you reason to give these stories now to someone else.

"after the property reportedly stood vacant for more than six months, with no takers"

Something does not add up. Never once, not for one day, was there a "For Rent" sign in front of that house, much less for 6 months. In this neighborhood, which has many schools and rare vacancies, even a short-term rental of a ranch house (especially one of that size) would have been snapped up if PAHC had ever indicated in the usual way that it was for rent (with a simple sign out front).

Also, this defies logic as there were 3 other houses that clearly had no issues getting renters right next to that one. They also, by the way, never had "For Rent" signs in front. And, a "clear" answer to the question would have included what PAHC considered "market rate" for the rental.

The house itself is a red herring, though, as the more important issue is whether Gonzales had influence on whether the City chose to exercise its right to purchase the orchard noncompetitively and (cheap) save the orchard/solve the many safety issues related to that site to our Safe Routes to School for thousands of schoolchildren/take advantage of the rare opportunity to create a community space/open space at the heart of this neighborhood so densely populated by schools (including Gunn) but without any community space.

The City made that decision in early December, right after the referendum, throughout which Gonzales and PAHC clearly had a great deal of influence on what really should have been a more inclusive community decision with significant implications to the lives, safety, and mental health of our schoolchildren.

There are significant questions around the formation of that company, too, which formed around that time and has no history of development - this would have been their first development. Again, that just doesn't smell right.

Given that the property was purchased for PAHC mostly with taxpayer money - $6 million from Palo Alto, and $8 million from the county (which thankfully is finally being made available at Buena Vista) - it was simply inappropriate for Gonzales to be in any way profiting from the sale of the property, period, especially given her influence in the City during and after the referendum. The many ways she has profited, and will profit, have not been enumerated in this story, and that should give the Weekly pause to consider its own biases.


8 people like this
Posted by Shady
a resident of Crescent Park
on Mar 12, 2015 at 1:30 pm

Did Gonzalez's realtor husband disclose to all the buyers that he also had a buyer for the property? Real estate laws dictate that a listing agent must disclose to all the other agents that represent a buyer that he too, has a buyer. All the other buyers need to be tracked down to see if there was indeed other buyers for the property. Was the property advertised and/or placed on the Multiple Listing Service? Lots if issues need to be clarified


12 people like this
Posted by Ends and Means
a resident of Barron Park
on Mar 12, 2015 at 1:33 pm

@Reasonable Citizen,

Everyone agrees PAHC has an important mission. Nonprofits get very little true oversight. The long-term interests of those whom the organization protects are not served by avoiding oversight if someone misuses the organization for their own personal gain. There are enough questions here that this should be investigated, and probably not by the City which clearly had some conflicts of its own in how employees acted in the application for state and federal funds. The investigation should be done by someone outside the City and PAHC board. If there are problems, they should be quickly routed out and the organization leadership changed to bring it to a high ethical standard for the interests of all residents.

PAHC is not the only affordable housing provider in town. If nothing else, perhaps this should give us reason to examine who is doing the best job and how we ensure everyone meets that standard.


9 people like this
Posted by Abitarian
a resident of Downtown North
on Mar 12, 2015 at 1:38 pm

Admittedly, I am not following this news closely. However, it seems to me that PAHC may have helped many people with affordable housing AND may have exercised poor judgment in this matter. These two things are not mutually exclusive. In any event, we have every right to expect PAHC to fulfill their worthy mission AND adhere to high ethical standards.


4 people like this
Posted by The Red Envelope
a resident of Crescent Park
on Mar 12, 2015 at 1:44 pm

[Post removed.]


6 people like this
Posted by Robert Smith
a resident of Duveneck/St. Francis
on Mar 12, 2015 at 2:28 pm

I still believe that this scenario shows very poor judgment on the part of the housing group. They should have understood that they were asking for and accepting public monies and public support in a variety of ways, and that even if everything they did was above board, it looks very bad.


12 people like this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Mar 12, 2015 at 3:45 pm

PAHC is not known for its openness, or transparency.

And being a volunteer by no means that one is a competent money manager, committed to the rule of law, or incapable of being involved in illegal activities.


3 people like this
Posted by Supporter of PAHC
a resident of Barron Park
on Mar 12, 2015 at 3:48 pm

This is really not news and I do not understand all the criticism here. Conflicts of interest exist in the real world and are not illegal or unethical. PAHC is a private, nonprofit and the ED is not a public official. PAHC received a great offer that closed in a couple of months without city approvals, in time to pay back their loans ...I doubt any other local developer would have done that.

2013 was a different real estate market than 2015. Why is it so hard to believe that no one would want to move into a house earmarked for almost immediate demolition? It was a market rate house. PAHC did not try to or want to rent it to a low income family that would have to be uprooted, as their Board President said. If you look at their Board, there are many real estate professionals ...i think they did a wonderful job of selling to a high bidder, without the use of a broker. I don't think most land deals are put on the mls anyway. I don't often read the Post but Chop Keenan has a great quote in it (about most developers not willing to close without city map approvals). Sounds to me like PAHC got lucky with this buyer.

Please let them move on and build affordable housing.


3 people like this
Posted by Supporter of PAHC
a resident of Barron Park
on Mar 12, 2015 at 4:03 pm

I have to add ...PAHC openly stated throughout their campaign that they would have to sell the site if they lost. They were not kidding here. They were forced to sell it ...that's what many of the No on D people wanted so why they complaints now? I really don't get it. They unquestionably sold the land for a great price with great terms (no city approvals). Are they supposed to pass on the best deal for the organization (accept a lower price with bad terms) just because of a potential conflict of interest that they clearly properly worked though? I think NOT! They chose the best offer. Ask every developer out there if they could have come close to the buyer's offer especially with that site. I bet it would be a resounding NO. We need more affordable housing. Please let PAHC do its job.


10 people like this
Posted by Craig Laughton
a resident of College Terrace
on Mar 12, 2015 at 5:04 pm

> They chose the best offer. Ask every developer out there if they could have come close to the buyer's offer especially with that site. I bet it would be a resounding NO. We need more affordable housing. Please let PAHC do its job.

Unless there is a full audit and investigation, how would you know? This deal has 'sweetheart' written all over it.

BTW, we already have too much subsidized housing. We have plenty of affordable housing.

PAHC should be shut down, period. There is no need for it, and there never was.


5 people like this
Posted by Amazed
a resident of Another Palo Alto neighborhood
on Mar 12, 2015 at 5:27 pm

I am not sure why any of you think you have the right to know what someone pays in rent. Are you all going to disclose your mortgage payments? In addition, have any of you driven by the property in question? It is an eyesore. The people who live in that neighborhood should be glad that someone wants to improve the area. It will do nothing but increase their value.

I find it amazing that many of you have nothing better to do than throw mud and demand things that you would not be willing to discuss yourselves.

Find something better to do with your time. There are far many other things in the world to get behind.


5 people like this
Posted by End and Means
a resident of Barron Park
on Mar 12, 2015 at 5:37 pm

"Conflicts of interest exist in the real world and are not illegal or unethical. "

Seriously? Have you never heard of insider trading? Conflicts of interest very often are illegal if they involve influencing a governmental decision for personal gain.

Additionally, there was a major for-profit aspect to the proposal at Maybell, meaning to benefit a for-profit developer, and PAHC was oddly unwilling to compromise, the City Council even commented on that. Were PAHC's decisions, that did result in the City spending a great deal of money on an election, and might have resulted in another community's low-income housing proposal losing out on its funding, influenced by personal conflicts of interest? Many of the sale documents even at the City were kept from the public.


4 people like this
Posted by End and Means
a resident of Barron Park
on Mar 12, 2015 at 5:41 pm

"Conflicts of interest exist in the real world and are not illegal or unethical. "

Seriously? Have you never heard of insider trading? Conflicts of interest very often are illegal if they involve influencing a governmental decision for personal gain.


7 people like this
Posted by Craig Laughton
a resident of College Terrace
on Mar 12, 2015 at 5:42 pm

>I am not sure why any of you think you have the right to know what someone pays in rent.

If that someone works for the public agency (PAHC...yes it IS a public non-profit), then I have a right to know. So does everyone else.

>Are you all going to disclose your mortgage payments?

I have no problem with that: I pay about $3500/month and still owe about $650k. My family gross annual income is about $120k. No inheritance money. Does this satisfy your curiosity? I say this as a private citizen, not a public official. Doesn't bother me.

Now, I want to know what Gonzalez paid in monthly rent, when she started to pay it, when/where the house was advertised. When did her husband get involved, exactly?

Sweetheart deals are always a big deal in the public realm. The PA city council has a lot to answer for, here, since it created this entity...and failed to oversee it.


8 people like this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Mar 12, 2015 at 6:19 pm

> I am not sure why any of you think you have the right
> to know what someone pays in rent

Doen't all of the properties that PAHC manages have the rents posted somewhere publicly?

Another part of the problem here is that the City (and other government agencies) provide the PAHC a lot of money, some of which goes to subsidize the people renting the properties. There is no reason that public money should not be fully accounted for--meaning that PAHC rental subsidies should be identified.

If the PAHC were to delink itself from the government money stream, then they could do what they want without having as much public interest as there seems to be because of the way they do business.


6 people like this
Posted by Ends and Means
a resident of Barron Park
on Mar 12, 2015 at 6:48 pm

@Amazed
"In addition, have any of you driven by the property in question? It is an eyesore. The people who live in that neighborhood should be glad that someone wants to improve the area. It will do nothing but increase their value"

Whoa now. I drive by there every day. "Eyesores" in the neighborhood, 1400 sq ft houses in original condition, are going for about $2.6-2.8 million. Probably a little less on Maybell, but not much, but more because those houses are over 2,000 sq ft, on is over 3,000. The per square foot sales price of property over there is equal or greater than just about any neighborhood in Palo Alto except Old Palo Alto, which is higher than any.

Those houses in particular are rare because they are >2000 sq ft, which makes them a hot commodity, even for a few months. Even in the past month there have been both ads and requests for short-term rentals in the neighborhood. They get snapped up immediately. Most of the homes in this area are those low-key ranchers, which is what people who move in here like. There tends to be VERY low turnover around here.

That kind of degrading attitude was expressed by City Hall and the people at PAHC trying to force the upzoning on the neighborhood. If you do not like the neighborhood, then don't live there. That low-key character is actually preferred by the people who live over here, which is why those houses cost so much, and whey there is perpetually so little turnover.


8 people like this
Posted by marty
a resident of College Terrace
on Mar 12, 2015 at 7:15 pm

Very poor judgement with regard to sale of property unless the bid process was clean and transparent, in which case jut an unfortunate coincidence. However, the house rental was clearly self dealing.
That being said the PAHC does a good job at something we need. It is untrue to say that "Nonprofits get very little true oversight" as non profit community housing corporations are closely audited by multiple overlapping funders. It may be that the individual has failed the mission but the mission should go on.


2 people like this
Posted by Confused
a resident of Duveneck/St. Francis
on Mar 12, 2015 at 9:24 pm

@ Marty and others - why does one market rate house rented to an org's ED matter? A house NOT part of their low income inventory?. My church houses our pastor, many nonprofits do something similar. In this case, the ED paid market for a vacant market rate house.....this is a NON-issue. It's almost better than having a property manager onsite (common too). The board approved it.

@Ends/Means - a couple of those Maybell houses are very small, like 1000 sf. I've been in one before. I doubt any of them are 2000 sf. Also, this potential conflict seems to have been handled properly by all parties. Should they have taken a lower, worse offer?

Do we not have bigger issues to talk about in Palo Alto? Let's respect the org and the people that work there and work hard to save Palo Alto from its lack of diversity.


5 people like this
Posted by Plinyman
a resident of Barron Park
on Mar 12, 2015 at 9:59 pm

I find it hard to believe that any real estate agent/broker would broker a $22 million dollar property out of the kindness of his heart! The PAHC claims no commissions were paid for the sale of the Maybell property. How is this possible in a town where money matters?


7 people like this
Posted by Ends and Means
a resident of Barron Park
on Mar 12, 2015 at 10:25 pm

@Confused,
I'm going by the sq ft that were on the staff reports, I was surprised, too, but it seems logical, most of the houses in the neighborhood of that vintage are 1400 - 2000 sq ft.

This is a relevant issue on so many levels. Gonzales was the director of PAHC at the time the decision was made not to pursue any kind of negotiation with the neighbors during or after the referendum. She had a lot of influence on that decision, too.

The same neighborhood surveys that made it clear they would be against the upzoning, also found the greatest number wanted to save the orchard, and they would have put the same energy into ensuring the affordable housing was pursued at the same time, that was the initial effort (I know, I was part of it and totally ignored). If the property was going to be developed, the greatest number wanted to see the affordable housing developed there (only the affordable housing).

Given that no one thought the neighbors could even qualify much less win a referendum (much less two), including 3 former mayors who were asked, and given that the same neighborhood leaders involved in saving the Terman school site from development and ensuring the 92-unit affordable Terman apartments got built through a working group at the same time were asking publicly for a working group again here -- it is worth revisiting the decisions that were made and the tactics used, given the conflicts Gonzales had and the potential for making lots of money by the decisions she had the power to influence all along. It never made sense that those things were never explored.

Many of the neighbors felt really steamrolled by the accusations and unwillingness to work anything else out. If there were conflicts at play in what ultimately happened, since public money bought the property, since there was the potential to save a unique, uniquely situated, and consequential piece of property for thousands of schoolkids, it does make a difference.

If conflicts of interest in the sale of the property played a role, we should know if only to ensure we put in place rules so it doesn't happen again. If there are more problematic aspects of the sale, that is also a matter of public interest. PAHC does indeed do good work, and hopefully a closer look at this situation will help separate the organization from the actions of a few people.


4 people like this
Posted by Confused
a resident of Duveneck/St. Francis
on Mar 13, 2015 at 6:18 am

@ ends and means - you are obviously the same "save the orchard, build another park across from the park" lady ...NOT going to happen so you should move on from that idea. I pulled the old staff reports and you are way off with your numbers. The majority of PAHC's funds were private, not public (only ~$2mm from county). The city has $8mm for Buena vista now bc PAHC paid them back $6mm. You are also wrong when you rehash measure D ...the majority wanted existing zoning (can't happen with affordable housing) and to maintain the single family neighborhood ...that means single family homes, not low income apartments.

And yes, PAHC admitted there were potential conflicts which they vetted properly and legally. Conflicts can and do exist in the real world. End of story. Seems to me that PAHC was the only honest one here ... I heard them/the ED state over and over again that they would have to sell the site if their proposal got rejected. They were obviously not bluffing.


4 people like this
Posted by Really?
a resident of Barron Park
on Mar 13, 2015 at 7:58 am

What were the terms and prices of all the offers? Was Golden Gate given a "last look" at purchasing the property? How did the Board run that process? All bids come in sealed and then opened at once and then evaluated and the highest qualified bid taken (like a lot of public agencies)?

I doubt it.

PAHC needs wiser leadership, they received bad advice based on the reporting in this article...


7 people like this
Posted by Former PAHC supporter
a resident of Charleston Meadows
on Mar 13, 2015 at 9:10 am

I'm supportive of PAHC's mission, but this has really discredited them in my view, in combination with a few other factors. I thought it was unusual just how unwilling PAHC was to compromise on the for profit portion of their development. After insisting that the project absolutely required 15 stack and pack for profit units to be viable, they then were suddenly ok with 12, and even offered 8 to the neighbors when faced with a referendum.

If the project was viable at eight units, why put so much effort into trying to maximize the profit by asking for more then was absolutely required to fund the nonprofit portion of the project? This is capitalistic behavior from somebody who stood to make profit. PAHC he's not supposed to engage In for profit, capitalistic behavior, at the expense of neighborhoods. This "coincidence" goes along way in explaining why PAHC was so aggressive in their pursuit of a bloated, for profit over densification.

I also question the wisdom of ms. Packer and the board. To issue a response as they did, and leave out all of the facts, are only sending them selves up to destroy their credibility later on if and when the facts are indeed revealed. While I don't agree often with Craig Laughton, I believe his questions are completely legitimate and merit honest, factual answers. If PAHC continues to be even a sieve, the city should cut them off from public funding, and Dave are our tax dollars to a more open, honest organization.


2 people like this
Posted by Former PAHC supporter
a resident of Charleston Meadows
on Mar 13, 2015 at 9:13 am

Autocorrect alert: "even a sieve" should read "evasive" in my post above


3 people like this
Posted by Floored
a resident of Downtown North
on Mar 13, 2015 at 10:57 am

Wow. I caught myself up on this issue and all the dust it's kicking up and I am just so amazed at how much time and effort people are spending to, well, step all over the efforts of a well-established non-profit that has served the Palo Alto community for over 40 years. What people are not aware of is that non-profit agencies undergo vigorous annual audits of their financials. No dollar is unaccounted for. Board members, as mentioned in another comment, are respectable, hard-working volunteers who oversee all of the major decisions made. Accountability in such a company is through the roof. It is unfortunate that a coincidence of the Executive Director and her husband crossing paths has brought about so much angst and suspicion. And didn't PAHC lose the fight to develop the parcel (into affordable senior housing, needless to say)? Why is this being drawn out so much? PAHC lost the fight, the parcel was sold, no one is pocketing a windfall. For goodness' sakes, LET IT GO, and let a reputable, community-serving non-profit go about their business. They make Palo Alto better. They nay-sayers continue to give Palo Alto a bad name. We all have so much. It's unfortunate that we decide to sap others of opportunity - just because we can.


4 people like this
Posted by Craig Laughton
a resident of College Terrace
on Mar 13, 2015 at 11:07 am

>What people are not aware of is that non-profit agencies undergo vigorous annual audits of their financials. No dollar is unaccounted for

Well then PAHC should have no problem proving what rent Gonzalez paid on a monthly basis. And when/where this rental house was advertised. Why have they refused to disclosed these simple fact?

> We all have so much. It's unfortunate that we decide to sap others of opportunity - just because we can.

Floored, please name the exact addresses in Downtown North (your neighborhood, apparently) where you want the next subsidized project. Please do NOT suggest dumping it on the non-elite neighborhoods, like PAHC has done for many years.


4 people like this
Posted by Floored
a resident of Downtown North
on Mar 13, 2015 at 11:37 am

@Craig Laughton -
>Please do NOT suggest dumping it on the non-elite neighborhoods, like PAHC has done for many years.

Please visit the downtown multi-family affordable housing properties before speaking out of turn. They are impeccably kept up and blend in with the neighborhood. Such words like "dumping" suggests otherwise, and is just outright offensive (and inaccurate).


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Posted by Craig Laughton
a resident of College Terrace
on Mar 13, 2015 at 11:53 am

@Floored: Where do want the NEXT subsidized project in Downtown North (please read more carefully)? Or would you suggest that the next project get dumped into Old Palo Also or Crescent Park (or some other elite neighborhood that has, thus far, avoided the issue). Actually, you could offer your own property to PAHC to build a stack-and-pack subsidized project...thereby offering the opportunities that you have suggested.


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Posted by Jerry Underdal
a resident of Barron Park
on Mar 13, 2015 at 12:08 pm

Jerry Underdal is a registered user.

@Floored

Thank you for weighing in. I agree with what you have said. It is very disappointing to see discussion hijacked on an issue by irresponsible speculation that jumps right over facts that are presented to them. It doesn't do credit to the intelligence and reasonableness of our community. We can do better than what I've seen pass for online debate on this matter.

Why is PAHC being singled out again for critical scrutiny? There's no issue currently pending that they are involved in. For several months the online criticism of PAHC that was a staple of the Measure D campaign had receded. What prompted the "discovery" article in the Post regarding the Gonzalez family's rental, and the Town Square post alerting us that Candice Gonzalez and Ted O'Hanlon were married?

I still don't completely understand the structure of PAHC--my fault, not theirs--and I think my ignorance is shared by most people posting here as if they understood perfectly and therefore feel free to criticize freely.


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Posted by Floored
a resident of Downtown North
on Mar 13, 2015 at 12:20 pm

@Craig Laughton -

I don't presume to know the entire development process or keep up with commercial/land sales. If there are properties available in Palo Alto, in area of Palo Alto (please do not retort that I am not being honest, again, IN ANY AREA OF PALO ALTO), the prospect of building affordable housing in such areas are not out-of-this-world. Either it's market rate or affordable. One or the other. The due diligence behind making an affordable housing complex possible is astounding. Not only is it MORE work to make it happen, non-profit developers do not pocket beyond the cost of the build-out plus salaries of the employees and other necessary costs.

"Stack-and-pack subsidized". Really? Wow. People need to educate themselves on affordable housing, period.

[Portion removed.]


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Posted by Voter
a resident of Crescent Park
on Mar 13, 2015 at 1:08 pm

I think Craig has touched a nerve: nobody on the PAHC side want to answer his questions. I for one would like to see them answered. Corruption of any kind in the public sector is unacceptable.


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Posted by common sense
a resident of Midtown
on Mar 13, 2015 at 1:11 pm

Tear downs sold for an average of $260/square foot for land in 2014.

The tear downs purchased in 2012 & 2013, and new houses built, mostly resold for between $3.5 - $4.2 million. 2012 land price of a tear down averaged $210/square foot.

The Maybell site is around 107,000 square feet, which makes the value in 2014 roughly $27.8 million. Based on price, this works out to 14 - 15 lots that would support a $3.5 -$4.2 million house.

PAHC sold the site for $22 million.

Note - during the Maybell campaign the pro-high density claimed that 35 - 46 units could be built on this site without a zoning change. That configuration would not yield the maximum profit for a developer.


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Posted by Craig Laughton
a resident of College Terrace
on Mar 13, 2015 at 1:20 pm

[Portion removed.]

@Jerry: If PAHC will simply answer two basic questions (amount of rent paid by Gonzalez and where the advertisement was placed), the heat would die down, I think. Why don't they?

When you visited me the other night, you said that the PASZ leadership was aware of this sweetheart deal. I have been trying to find out, as you have. Any new information? It would good (and expected) for the PASZ leadership to be transparent on this issue.

We could clear all this up in a few minutes if PAHC and PASZ agree to come clean. Do you agree?


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Posted by Jerry Underdal
a resident of Barron Park
on Mar 13, 2015 at 3:54 pm

Jerry Underdal is a registered user.

@Craig,

I disagree that the heat would die down upon delivery of any particular piece of data because this is largely a political matter, with arguments unending as long as someone believes there's advantage to be gained. At least one poster is upset about anything that doesn't lead to an orchard and community center at Maybell. That fire is too hot to be cooled by resolving two small factual matters.

I have had pleasant telephone conversations with two of the PANZ/PASZ leaders. They both said they were aware that the Gonzalez family were residing at Maybell during the campaign and didn't see it as an issue. And I have conveyed information from Candice Gonzalez regarding contacts with PANZ/PASZ leaders at her home and in the neighborhood during the campaign to the Post and the Weekly. We'll see what they do with the information and with the letter to the editor that I submitted.

(I'm sure you realize that for many people here on Town Square, an assertion by me, even one supported by evidence, will not be taken at face value.)


4 people like this
Posted by Craig Laughton
a resident of College Terrace
on Mar 13, 2015 at 4:47 pm

Craig Laughton is a registered user.

>I disagree that the heat would die down upon delivery of any particular piece of data because this is largely a political matter

Jerry, take it one step at a time. Demand that PAHC and PASZ come clean on very basic issues...otherwise, they will stonewall and hide. Once the basic facts are known about this sweetheart deal, we can all move forward.

PAHC has been protected by the PA city council for much too long. IMO, it should be abolished, because its basic mission is wrong for Palo Alto. However, I know that you believe just the opposite. Either way, the basic facts need to be understood, in the sunlight, by the voters in PA. I would hope that you agree.

It is remarkable that the PA Weekly refuses to do any serious investigative reporting on this issue. Yet the Daily Post does....


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Posted by Jerry Underdal
a resident of Barron Park
on Mar 13, 2015 at 5:23 pm

Jerry Underdal is a registered user.

Craig,

The Weekly hasn't taken a cut at it yet. Maybe they'll do so now. Gotta remember that it started out as a non-story story in the Post. Let's see what the Weekly comes up with when the focus switches from PAHC's rental to PASZ'S presumed acceptance of it in the context of the Measure D campaign.


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Posted by Jerry Underdal
a resident of Barron Park
on Mar 13, 2015 at 5:29 pm

Jerry Underdal is a registered user.

Ends and Means,

Do you have even one other person who agrees that it would have been a snap for the city to buy the property, get the cash to PAHC that it needed to repay its loans ASAP and oversee a process that would result in an orchard and community center? Fantasy land stuff. Quit blaming PAHC and the city council for acting responsibly when Measure D failed.


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Posted by EndsandMeans
a resident of Barron Park
on Mar 14, 2015 at 10:46 am

EndsandMeans is a registered user.

Could the City have purchased the orchard, even to let neighbors raise the money to save it? Absolutely, that's not even a question. Were neighbors who had achieved similar things like getting civic buildings built asking City Hall for the chance? Yes.

Winning the referendum, now that was impossible. Not even one person agreed that it would be even close to a snap to overturn a City Council ordinance by referendum, much less a land use referendum. Three former mayors essentially said it wasn't possible. And yet, here we are.

Pretty much everyone in the beginning, who organized to meet with Councilmembers to essentially "sell" them on our ability to find a way to get the affordable housing done and save the orchard thought achieving something positive like that was a lot easier than fighting against City Hall in a land use referendum. City Hall didn't think we could win a land use referendum, so the rest is history. (Or now, in hindsight, were there other reasons related to the majority for-profit side of that development that accounted for PAHC's stonewalling, as Larry Klein called their unwillingness to compromise?)

I don't think it's even a question among most of us who went through it that the referendum was not a snap. What does "snap" have to do with anything?

I don't think the Council acted responsibly in pursuing conflict and a referendum rather than working with neighbors who asked for a working group and had a track record of success. Why don't you quit your constant attacks on your neighbors for trying to do what they think is best for the neighborhood and kids? Clearly, you don't agree. We've heard your attacks now for years. I think we get it. Now can we deal with the matter at hand?

The fact is, the City had the right to purchase the property noncompetitively after the referendum. Given the serious safety issues that even they expressed, the fact that they have a backlog of open space that they owe use (from rules in the City Code, as calculated by Councilmember Filseth) related to all the development in the area, the density of schools surrounding that site and the City's duty to thousands of schoolkids, how unusually cheap the parkland would be, and the benefits of saving the 100 established trees (during a drought no less) and that location at the heart of this neighborhood that otherwise desperately needs community space, it was something they should have considered carefully, publicly, and above bruised-ego post-election feelings.

The City had $40 million in Stanford funds that could have gone in small part exactly to that purpose. The property was an orchard and 4 houses (that could have been immediately sold), leaving the orchard for the City. The City's own appraisal of the value of the orchard by itself was $6.8million - they had already put $5.8 million into purchasing the property, and promised $7.2 million on the loan application, so it's not like it was an inconceivable amount of money either. They could have saved the orchard for less than they are spending at the golf course at the very same time, something they could probably achieve with corporate donations if they put a little effort into it.

The same neighbors who fought the referendum would have been willing to even raise the money to pay the City back if given the time. They did, after all, raise the money to save what is now Bol Park from development. I hear that wasn't a snap either.

Candace Gonzales had a lot of influence in the decisions around that property. Did her influence/conflicts of interest affect the decisions at the time and the costs to the public? The house situation shows poor judgment but is not the more important issue, which is did the potential for making hundreds of thousands of dollars from the transactions end up affecting decisions of public import that she had a great deal of influence over? If so, that is relevant to the public decision over saving the orchard. Many of us think the 100 established trees at that key location, the safety and wellbeing of schoolchildren, and the opportunity to create desperately needed civic space are worth better than a hasty decision influenced by possible serious conflicts of interest no one knew about at the time. So yes, far more than just me think it was and even is possible to save the orchard for the benefit of our kids and community.


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Posted by Jerry Underdal
a resident of Barron Park
on Mar 14, 2015 at 8:32 pm

Jerry Underdal is a registered user.

@Ends and means

You had, and have, almost no allies ready to go to bat for your impossible dream. Did anyone besides me offer actual money, $100/yr for life, to support the orchard, a community center and ongoing programming costs? People laughed at me when I said I took seriously your threat after Measure D failed to block any construction at the site because of your orchard fantasy. I was right and you have been consistent, returning again to attacks on PAHC in hopes that someone would take you seriously about the orchard.

Your group elected two members to the city council, Erik Filseth and Tom Dubois. Both of them are serious people who want to make a difference. I don't recall that either of them said anything about saving the orchard and building a community center, much less insist that a large amount of city money be put at risk to do so. I'd listen to them about financial matters because they operate in the real world of business and finance. Do you have their support?

Who is your flesh and blood champion in this matter? Is Tim Gray ready to publicly support your calculations on how the city could have given us a park for free and condemn the council for not doing so?


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Posted by EndsandMeans
a resident of Barron Park
on Mar 14, 2015 at 11:49 pm

EndsandMeans is a registered user.

@Jerry Underdal,

You are conflating a lot of people and events, your post is almost unintelligible to me.

There is an orchard group, and a lot of people who would mobilize if they were given the chance, including for fundraising. Plus some interested nonprofits and a few potential deep pockets. There is nothing anyone can do if the property is in contention and in private hands. The City had the opportunity to purchase it as public land, and for the same reasons it was attractive to PAHC, it would be an unusually inexpensive piece of parkland, at an optimal place, with 100 established trees. Had the City purchased the property back then, in hindsight, the orchard would have ended up essentially free when they sold the houses.

When Filseth and duBois were elected, the property was long in private hands and they had no part in that decision.

Given the safety issues, the uniqueness of the site, and the trees (and the drought), the need for community space on this side of town, if there are questions about the legitimacy of the sale because of conflicts of interest and undue influence, hopefully the new Council will look at the issue with the interests of the public in mind rather than backlash because of bruised egos like the last.

[Portion removed.]


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Posted by Jerry Underdal
a resident of Barron Park
on Mar 15, 2015 at 9:35 pm

Jerry Underdal is a registered user.

[Post removed.]


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Posted by EndsandMeans
a resident of Barron Park
on Mar 15, 2015 at 10:29 pm

EndsandMeans is a registered user.

[Post removed.]


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Posted by EndsandMeans
a resident of Barron Park
on Mar 15, 2015 at 10:37 pm

EndsandMeans is a registered user.

[Post removed.]


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

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