News

Palo Alto changes fee rules to support Buena Vista purchase

City Council vote frees up $14.5 million to preserve city's only mobile-home park

After making a pledge in June to contribute $14.5 million toward the preservation of Buena Vista Mobile Home Park, the City Council on Monday changed its guidelines for affordable-housing fees to make the funds available for the park's purchase.

The council voted 8-0, with Greg Scharff absent, to change the city's rules for expending the fees that the city collects from commercial developers to support affordable housing. The change will allow the city to use $7.7 million from its Commercial Housing Fund to pay for the purchase of Buena Vista. Before, the funding was earmarked specifically for construction of new affordable housing, rather than the preservation of existing affordable housing.

The city also looks to tap into $6.8 million in its Residential Housing Fund, which similarly supports the rehabilitation, acquisition and construction of affordable housing.

The council's move comes at a time when the future of the city's sole mobile-home park remains cloudy. The park's roughly 400 residents have been facing the possibility of eviction and departure from Palo Alto since the fall of 2012, when the Jisser family announced its plans to close the aging mobile-home park and redevelop the Barron Park site, at 3980 El Camino Real.

Though the Jisser family's initial agreement with the Prometheus Real Estate Group to build luxury apartments at the site fell through after Prometheus pulled out, the family proceeded with its closure application and ultimately won the City Council's green light for the closure in May.

Now, in a last-ditch effort to preserve the mobile-home park, officials from Palo Alto, Santa Clara County and the nonprofit Caritas Corporation are making a bid to buy Buena Vista.

Caritas, which was charged by the county with making an offer for Buena Vista, submitted an informal offer to the Jisser family earlier this month. The city and the county have pledged $14.5 million each for the purchase of the park, which would be managed by Caritas if the offer is accepted. Caritas also plans to raise additional funds through tax-exempt revenue bonds issued against the rental stream and, if needed, rely on philanthropic contribution to make up the balance.

Winter Dellenbach, founder of the group Friends of Buena Vista, on Monday thanked the council for its pledge and urged it to make the change in the guidelines for the housing fund. She reminded the council that there is now a preliminary offer on the table.

"We need you guys to come through because if something ... should happen, we're going to need access to those funds," Dellenbach said. "We need you to vote on this, approve this tonight, and make those funds accessible ASAP."

Mary Kear, vice president of the Buena Vista Residents Association, also addressed the council and in her brief comments urged the council to move ahead with the revision.

"We, the residents of Buena Vista, are relying on you to approve these changes to the housing funds so the money you approved for purchase of Buena Vista can be freed up," Kear said.

The council made the change with little debate and no dissent. Just before the vote, Councilman Cory Wolbach suggested that the council undertake broader conversations about affordable housing and displacement.

"For all of us, staff, community and council, the unanimity with which the community and the City Council have supported, taking great steps to prevent displacement in Buena Vista ... suggests that at some point we need to have a much more serious and broad discussion about what we're going to do to prevent loss of affordable housing in general in Palo Alto and to prevent tenants from displacement in Palo Alto."

The Weekly has compiled an archive of news coverage capturing the many voices of the people involved in the fight over Buena Vista.

Comments

25 people like this
Posted by Nayeli
a resident of Midtown
on Aug 18, 2015 at 4:06 pm

Nayeli is a registered user.

Unbelievable. [Portion removed.]


39 people like this
Posted by george drysdale
a resident of Professorville
on Aug 18, 2015 at 4:13 pm

Bingo. In it's massive ignorance of economics the decision of the Palo Alto city council will become (already) world famous. As we see on the internet "The Catastrophe in Capitola and the great Santa Cruz land swindle" Caritas is a racket. The value of the land they "preserve" for "affordable" housing goes right into the pockets of the mobile home owners. Check on the internet: Zillow, etc. There is no such thing as "affordable housing" just subsidized housing. Only the very few can receive subsidized housing as demand for subsidized would be enormous and would bankrupt all government budgets in a minute. You cannot fight gentrification. You can fight ignorance, however.

George Drysdale a social science teacher


2 people like this
Posted by Commentator
a resident of Professorville
on Aug 18, 2015 at 4:22 pm

"You can fight ignorance, however."

Sure can. I know people who been doing it for decades in this town. Got any ideas how to win?


24 people like this
Posted by Gee Wiz
a resident of Palo Alto High School
on Aug 18, 2015 at 4:27 pm

OMG, unbelievable. I thought U.S. was a capitalist nation. Apparently not.


6 people like this
Posted by R Wray
a resident of Palo Verde
on Aug 18, 2015 at 7:01 pm

Money extorted from developers. Tainted money. Easy come, easy go. Just like third world economies.


41 people like this
Posted by Naseous
a resident of Midtown
on Aug 18, 2015 at 8:30 pm

Seems like every new story I read about this makes me sicker and sicker to my stomach. I would love to see these affordable housing funds put to good use building new quality housing. If it takes a little longer for enough funds to build up so be it. Paying $40M to keep the BV park open is insane. Also don't understand why this group of residents gets such special treatment, seems very unfair. These funds should be put to use to build new housing and it should be determined by lottery or however they usually do these things.


31 people like this
Posted by Carrie
a resident of Downtown North
on Aug 19, 2015 at 7:22 am

Let the jisser family do as they wished. Enoughof the nonsense.


13 people like this
Posted by 38 year resident
a resident of Old Palo Alto
on Aug 19, 2015 at 11:09 am

I would hope that the elected council members read the posts on this thread. I'm sure as the day goes on there will be many more added that question the sanity of this decision. What will stop others from demanding the city subsidize their rental expenses? How about house payments?

Liberal guilt is the driving force behind this idiocy. I hope voters remember this the next time we hold city elections.


17 people like this
Posted by Mr. Clueless
a resident of Charleston Meadows
on Aug 19, 2015 at 11:22 am

According to Cory Wolbach, there is unanimous support for this. That's why the private philanthropic donation total as of right now appears to be $0.

That Cory Wolbach really has his finger on the pulse of the community.


18 people like this
Posted by Big Mistake
a resident of Another Palo Alto neighborhood
on Aug 19, 2015 at 11:33 am

I suspected it was a mistake to vote for Wolbach--now I know it was a big one.

He's just a smooth talker-- should have gone to law school.


17 people like this
Posted by oldman
a resident of Old Palo Alto
on Aug 19, 2015 at 11:44 am

Who will pay the property and the school tax ? All of us in Palo Alto. I guess, since Caritas is a charitable group they and don't pay any tax.

Wake up PALO ALTO


27 people like this
Posted by Carlos
a resident of Green Acres
on Aug 19, 2015 at 12:30 pm

As excited as I was when I became a citizen of this country allowing me to be part of the electoral process, I'm equally shocked to see our local politicians resorting to third-world tactics to advance their careers.

I find it equally shocking that a town of highly educated residents would allow the city council to make such arbitrary decisions w/ public funds to benefit a small group of residents by getting into the welfare housing business. What about all those hard working people who make sacrifices to meet their monthly rent/mortgage payments? What about those who had to leave to more affordable communities because they realized their family budgets call for a different neighborhood?

Our city council reps don't mind getting into the welfare business using public funds. Very easy to be generous and gain popularity when they don't have to spend out of their own pockets, and when these low-income housing projects are far away from their own nicer sections of town.

And those of you who think you live too far from Barron Park to be affected, remember that your tax $ will be going towards this project, now and well into the future because the city will be liable for many future expenses by purchasing something that should be left to the private sector.


14 people like this
Posted by Peter Carpenter
a resident of Atherton
on Aug 19, 2015 at 12:47 pm

Peter Carpenter is a registered user.

I fail to understand why the City Council does not understand that making an investment of City funds in this project will mean that the City will be considered by the residents and the public as a de facto co-owner.

And as a de facto co-owner the City will be on the hook for every legal claim, for compliance with State mobile home zoning regulations and for any relocation costs necessitated by any changes in the total occupancy levels.

If Caritas gets in trouble who does the City think will be next in line to solve any problems?


Like this comment
Posted by jerry99
a resident of Barron Park
on Aug 19, 2015 at 12:58 pm

[Post removed.]


12 people like this
Posted by Craig Laughton
a resident of College Terrace
on Aug 19, 2015 at 1:25 pm

>Who will pay the property and the school tax ? All of us in Palo Alto. I guess, since Caritas is a charitable group they and don't pay any tax.

@ oldman: This is a critical issue that will never be addressed by our liberal-guilt-driven city council. This very valuable property will be withdrawn from our property tax rolls forever. The real cost of this disaster will be tens of millions more than what is currently being discussed.


Like this comment
Posted by musical
a resident of Palo Verde
on Aug 19, 2015 at 1:26 pm

I was expecting quite an increase in tax collections from that parcel, because I didn't think it's that easy to sidestep the tax assessor.

The assessor's FAQ for Non-Profit Exemptions says:

"... that portion of the property used for private purposes will not qualify for the exemption. The remaining portion of the property or facility will continue to be exempt from taxes."

Sounds like any part that's rented to private individuals should be taxed. Church property rentals are taxed. All those residences on Stanford pay property tax. All the private businesses in Stanford Research Park pay property tax one way or another.

But looking at a property like the PAHC apartments behind Buena Vista, I see a $5.4M exemption, and virtually no tax. 801 Alma has a $24M exemption, zero net assessed value. Will Caritas get a $40M exemption? Why aren't there at least Possessory Interest assessments?


11 people like this
Posted by commonsense
a resident of Adobe-Meadow
on Aug 19, 2015 at 2:06 pm

I am sympathetic to these people but overspending like this makes no sense. The property is now valued at over $50mm. Add to that the cost of required upgrades on over 100 old trailers and we're quickly at $75mm. For 100 units that $750,000 per old falling apart unit. "Greedy" developers can build market units for much less than that, much less affordable units. This is more politics run amok than helping the less fortunate.


Like this comment
Posted by Tim Buck II
a resident of Downtown North
on Aug 19, 2015 at 3:26 pm

"Why aren't there at least Possessory Interest assessments? "

Have you called the assessor's office? What's the response?


4 people like this
Posted by Peter Carpenter
a resident of Atherton
on Aug 19, 2015 at 3:30 pm

Peter Carpenter is a registered user.

"change the city's rules for expending the fees that the city collects from commercial developers to support affordable housing."

Can the developers who paid these fees now sue the city to recover their payments since the funds will now be used for a different purpose than was specified in the rules that levied the fees?


2 people like this
Posted by Peter Carpenter
a resident of Atherton
on Aug 19, 2015 at 3:36 pm

Peter Carpenter is a registered user.

Here is the old language:

"The fees collected must be utilized in ways that increase affordable housing for Palo Alto's workforce."

Here is the new language:
"The fees collected must be utilized in ways that preserve or increase affordable housing for Palo Alto's workforce."


Like this comment
Posted by musical
a resident of Palo Verde
on Aug 19, 2015 at 4:43 pm

@Tim, I've rented a school room in the evening on a weekly basis for a non-profit activity and been charged a Possessory Interest property tax by Santa Clara County, because the room is recurrently rented for our exclusive use on a property which is otherwise not taxed. They tell me that people who rent living quarters are different. Looks like a shell game to me.


16 people like this
Posted by Joe
a resident of Barron Park
on Aug 19, 2015 at 4:55 pm

The change to the Commercial Housing Fund rules seems like a minor technical correction. Vice Mayor Schmid, based on a letter to council from Herb Borock,directly asked the City Attorney if this change was legal. According to the SJ Mercury, Stump responded: "We're confident that the change that's before you today is lawful."

Unfortunately, she's completely and totally incorrect. This action exposes the City to significant legal action over millions of dollars in impact fees. To understand why, you need to understand how development impact fees get implemented and the law in California's Government Code, stating at section 66000.

California law allows Palo Alto to collect impact fees for affordable housing. The implementation and rate are determined by a nexus (i.e. connection) between new commercial development, the resulting increase in demand for affordable housing and the cost to provide that housing. The process of doing this is a "nexus study" that's usually done by experts and culminates in a public hearing that meets the requirements of California's Government Code.

The staff memo for the agenda item states: "The City’s legal expert on housing matters has reviewed the guidelines and the nexus studies they were based upon and determined that the City Council may amend the guidelines to permit use of the Commercial Housing Fund for purchasing existing units and converting them to deed-restricted affordable units, including necessary rehabilitation."

But California's Code and the case law that supports it is clear: there needs to be a connection between the original purpose for collecting the Commercial Development fees and their intended use. The City cannot unilaterally and retroactively change this. Furthermore, there can be no nexus between Buena Vista and new commercial development that generated the funds. The City itself has publicly stated that Buena Vista, as an affordable housing resource, existed long before any of these funds were collected. Finally, courts have specifically found that Commercial Development fees, intended for addressing new impacts, cannot be used to address existing and chronic problems.


8 people like this
Posted by Peter Carpenter
a resident of Atherton
on Aug 19, 2015 at 5:03 pm

Peter Carpenter is a registered user.

Thank you Joe for the facts regarding the unlawfulness of this action.

I suggest that formal requests for refunds from the developers will soon be presented to the City. If those requests are denied then very expensive lawsuits will soon follow.


12 people like this
Posted by Sarah
a resident of another community
on Aug 19, 2015 at 5:14 pm

This is really unfair. Why do these people get special treatment? So the city buys the property, who is going to pay to bring it up to code? The place is a mess and you get bet your life that as soon as a deal goes through that the residents will be up in arms to have everything fixed and many more millions will be needed. Let the family sell the land to someone who will dedicate it to NEW affordable housing and proceed with selecting residents as any city normally would do. PA is just killing itself with this PC attitude. I would like to live in PA, but I can't afford it; that's the way capitalism works, that's why historically we Americans have strived for better, so we can live in a nicer place. No one gives it away. This is beyond stupid.


16 people like this
Posted by get up and go got up and went
a resident of Barron Park
on Aug 19, 2015 at 7:32 pm

Web Link

remind me again why some people want to save the bv mobile home park?


12 people like this
Posted by Liability
a resident of Barron Park
on Aug 19, 2015 at 9:26 pm

Will the city (and us, taxpayers) be liable if someone gets hurt in a city-owned property? What if the recent incident in Buena Vista had resulted in a tragedy? Would the victim's family have been able to sue the city if it owned and maintained the park?

Is anybody in the council even thinking about this when proposing to buy the park?


4 people like this
Posted by Barbara
a resident of Another Palo Alto neighborhood
on Aug 19, 2015 at 11:11 pm

@Joe

The worst part is that since the Commercial Housing Fund is no longer in compliance, the City loses the right to collect fees from developers from now on.

Moreover, since there is no longer a legitimate program, the City has no way to dispense the funds, and the unspent millions in the fund now need to be returned to the developers.

According to state law, even if the city wanted to fix the guidelines, they would need 30 days to pass an emergency ordinance, rescinding council’s decision on Monday.

Congratulations Ms. Stump, you just emptied the Commercial Housing Fund for nothing.


4 people like this
Posted by Armchair
a resident of Another Palo Alto neighborhood
on Aug 19, 2015 at 11:16 pm

I sure hope all of you armchair lawyers are sending your briefs to the city council and the city attorney. [Portion removed.]


13 people like this
Posted by Really Concerned Now
a resident of Crescent Park
on Aug 19, 2015 at 11:25 pm

How can the people of Palo Alto stop this incredible misuse of public funds? I've watched with growing alarm as the idea of preserving this dump has grown from a fringe "liberal guilt" laughable matter to something that is increasingly looking like a horrendous misuse of public funds.

Given, politcal correctness requirements, the politicians and the Palo Alto Online editorial staff cannot deviate from these stances that serve sound bites but make horrible economic policy. I accept this.

So what can be done by those of us who foot the bill? Petitons to use our tax money for better purposes? Legal challenges to the Council on some grounds? As a taxpayer, I'm outraged that this discussion has gone so far, and I wholheartedly object to any use of my tax dollars this way. Please anyone who knows how these things happen share mechanisms to stop this incredible giveaway of our money.


6 people like this
Posted by Sandy
a resident of Mountain View
on Aug 20, 2015 at 10:59 am

It was the right thing to do and the world is not coming to an end.


7 people like this
Posted by 38 year resident
a resident of Old Palo Alto
on Aug 20, 2015 at 11:31 am

@Really Concerned Now....a recall of city council would be appropriate. It's a tough road to go down. Not many have the time or expertise to pull it off.


7 people like this
Posted by Palo Alto man arrested after alleged stabbing attempt
a resident of Barron Park
on Aug 20, 2015 at 11:48 am

Does anyone else think it's a bit odd that the comments have been disabled for the article about the stabbing attempt at mobile home park?

"Police arrested a Palo Alto man Tuesday morning who they said tried to stab another man at Buena Vista Mobile Home Park two weeks earlier."

The PA Online has blocked the commenting after only 7 comments? really? and one of the comments was why, if this incident took place on Aug 5, that it is being reported only now. Could it be that someone didn't want this news going public until after the City Council vote, until after the party in the park to thank all the friends of mobile park supporters? and now the comments are also disabled?.....really, now, what's going on here.


6 people like this
Posted by Commentator
a resident of Professorville
on Aug 20, 2015 at 11:54 am

"why, if this incident took place on Aug 5, that it is being reported only now."

Probably a routine occurrence. Not news.


6 people like this
Posted by Commentator
a resident of Professorville
on Aug 20, 2015 at 11:58 am

"This is really unfair. Why do these people get special treatment?"

They make great posole and serve it free to city officials. Who wants to lose that?


4 people like this
Posted by Bill
a resident of Barron Park
on Aug 20, 2015 at 12:13 pm

[Portion removed.] [L]ots of stuff like the attempted stabbing at Buena Vista usually goes unreported. The Weekly only reported it because PAPD put out a press release.


3 people like this
Posted by Joe
a resident of Barron Park
on Aug 20, 2015 at 7:28 pm

> I sure hope all of you armchair lawyers are sending your briefs to the city council and the city attorney

What's being posted here about the mess that the City Council made to the Commercial Housing Fund for Buena Vista isn't new. Herb Borock said all of these things in a letter to City Council. Herb's letter has been included in the August 31th council packet.

Here's a link to the Herb's letter extracted from the packet: Web Link


The City Attorney seems to have done a very poor job protecting the City's interests.


Like this comment
Posted by nai
a resident of Another Palo Alto neighborhood
on Aug 20, 2015 at 8:23 pm

Linkage fee. Seems like its accepted as pretty legal in California, or at least not illegal. Other cities use it for preservation/development of affordable housing. Their nexus study doesn’t link the fee to the exact development they are spending money on, just the need for affordable housing created by new development. I guess you could argue the whole thing is illegal as it doesn’t truly fulfill the guidelines/purpose of an impact fee, but you’d be fighting a fight bigger than random crazy ideas of Palo Alto.

Now whether you can just change the purpose of a fee after you collected it… who knows.


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

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