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."