East Palo Alto's long-standing first-source jobs rule of hiring up to 30 percent of local residents at new businesses has been set aside by the City Council to make way for Amazon in the new University Square project. The decision could signal a revamp of the city's first-source-hiring ordinance, which some council members on Feb. 21 said needs an overhaul.
But some residents are fuming over the short notice that Amazon gave to the council, which, they said, had more of the appearance of an ultimatum than an offer to help the community. Residents were also not given adequate notice, they said.
Amazon already occupies 80,000 square feet of office space at University Circle on the city's west side, but the company proposes to occupy about 200,000 square feet of office space at the new building at 2100 University Ave. on the city's east side just over the U.S. Highway 101 ramp and to hire 1,300 employees.
The company's east side presence would bring high-skilled jobs, many of which the city's residents could not fill, Amazon claims. Instead, developer The Sobrato Organization and Amazon offered a proposal at the Feb. 21 council meeting to create a job center staffed by an employment specialist for 10 years. The specialist would help residents to identify their job skills, develop skills to find and keep jobs and to find employment in East Palo Alto or outside of the community, CEO John Sobrato said.
But some residents are angered by the council's approval, calling it "gentrification at its finest," and they want the council to repeal its decision. The city already has hard-working employment-training groups such as StreetCode Academy, Renaissance Entrepreneurship center and JobTrain, and it doesn't need another jobs center to help residents find miscellaneous jobs; it needs a commitment from Amazon to help fund the skills it says that residents need so they can be hired by Amazon and other Silicon Valley companies.
Amazon gave the City Council little time to debate. Staff only learned of the proposal on Feb. 14 with a deadline for the council's decision of Feb. 21. Amazon's potential lease of the space is contingent on removal of the first-source-hiring requirement, city staff noted. Amazon would move on to other potential locations if the issue could not be quickly resolved, staff said they were told.
Residents said the short notice is indicative of the company's view of the community.
"It is a JOKE that the City Council would accept Amazon's first alternative offer. It may be true that the skill level of residents in EPA would not be able to fill this 30 percent first-source hiring policy, however, the ordinance requires a good-faith attempt. Amazon is a large international company that is solving world problems daily. The fact they did not attempt to address this issue with much thought shows how little they think of the community they would like to be neighbors in," Marlayna Tuiasosopo-Gordon, an engineer and Fremont resident who calls East Palo Alto her second home, said in an email letter to the community.
Council members said they wished they had more time to debate the finer points and to give the proposal a serious look before taking a vote. But given the time crunch and the need to get the ball rolling on a project that has been stalled for years, they didn't want the developer to lose out on the opportunity, they said. In the end, they voted 4-1 in favor of the Sobrato-Amazon proposal with Councilwoman Donna Rutherford abstaining.
"The building was built to have a tenant, not to be empty. It's unfortunate not to have enough time to vet it, but the outcome is that it will benefit the community," Mayor Larry Moody said.
The city's first-source hiring policy is 14 years old. It was created as the city sought redevelopment and rebuilt areas such as the Ravenswood 101 retail center and University Circle, which includes offices and the Four Seasons Hotel. The ordinance was to help retain jobs for residents in the community as development takes place and to help prevent displacement, But the results have been mixed. East Palo Alto continues to have an unemployment rate that is twice that of surrounding communities as a whole, Assistant City Manager Sean Charpentier said.
Some retail businesses have had a hard time filling some of the positions because of a lack of basic language or job skills among residents. The Four Seasons Hotel has not been able to reach the 30-percent mark despite training of some workers through the nonprofit JobTrain, Charpentier said. A November 2016 update found that Nordstrom Rack had hired no one from East Palo Alto; The Home Depot hired 56 percent and Mi Pueblo supermarket and Office Depot have 71 percent each of hires from East Palo Alto. Overall, 37 percent of employees in the city are residents, he noted.
Charpentier said the problem of having the right tech skills is not exclusive to East Palo Alto. In Menlo Park, only about 4 percent of Facebook hires are that city's residents despite having one of the most highly educated populations in the state. (According to the 2010 U.S. Census, 57.6 percent of Menlo Park residents are of working ages between 23 and 64; East Palo Alto's is 58.4 percent.)
East Palo Alto City Council members noted the ordinance has never had the teeth to enforce a 30-percent-hiring rule; an ironclad requirement would likely be unconstitutional. A business needed to show it made a "good-faith effort" only.
Sobrato and Amazon argued that the 1,500-square-foot job center at University Square property would help match employees with the kinds of jobs and skills they desire or already have, and it would help achieve better outcomes than more nebulous first-source hiring. The job center would offer its services for the 10-year-lease lifetime. If at any time the center was to be discontinued, Sobrato and Amazon would be beholden to 30-percent first-source hiring. As the property's owner, Sobrato would be required to come up with a lease for any new tenant to either follow the hiring policy or maintain a job center, city staff said.
"I truly believe this alternative will provide a much better result for the residents of East Palo Alto," John Sobrato, CEO of The Sobrato Organization, said. As a public benefit, the developer agreed during the planning process to provide nearly more than $1.2 million in funding. The money will pay for the center and staffing.
Some audience speakers at the Feb. 21 meeting agreed with the proposal, but with caveats. Scott Hochberg, a workers' rights employment attorney with Community Legal Services in East Palo Alto, said that relieving Sobrato and Amazon of the 30 percent first-hire rule makes sense given the skills of most residents, but he urged the city to step back and consider the proposal before committing to a vote.
"The employment specialist in my view should be closely connected to Amazon. In addition to providing generalized job-placement advice to the community, the specialist should know about openings at Amazon and be able to funnel local residents into those jobs, because I'm sure that a good portion of East Palo Alto residents would be fine for them. The specialists' role to help East Palo Alto residents get jobs at Amazon should be written into this agreement," he said.
Charpentier said the city does have many residents with tech skills; they currently work elsewhere but might wish to return to a job in their city. Sobrato had also noted that although many jobs are highly skilled in tech, many other jobs are support roles.
Duane Goff, chairman of the Committee on Social Justice at the League of United Latin American Citizens of California, a civil rights organization, cautioned he has seen many instances where companies have gotten around hiring and similar public-benefit requirements. The specialist should not be an Amazon staff member, "otherwise that would be putting the fox in charge of the hen house," he said.
Over the 10-year life of the jobs center, Amazon should also be able to help residents become employable at the company through additional job training, he added.
"That's the kind of commitment I want to see, not just throwing a million bucks at it because in all honesty, and I don't mean to be insulting, but for an organization the size of Amazon a million bucks is chump change. I don't think we should be treated like that; I think we should make them prove what they say they want to do," he said.
Vice Mayor Ruben Abrica said that the existing policy is old and needs to be revamped. The job center proposal is "innovative" and the kind of project that could kick off how the council has to think about what development really means: about training people and even about wages. "There are a lot of ways the city can help the community to be in a better economic situation," he said.
But Rutherford said she did "not see the potential of East Palo Alto residents getting the benefit here." She was concerned about long-term residents who have invested in the community and who want to stay here "getting a piece of the pie."
She also expressed concern about the rush to make a decision.
"Something like this comes to the council at the ninth hour," she said, adding she hoped the vote could be put off for further study.
Councilwoman Lisa Gauthier wanted to know where the 1,300 employees would end up living and if they would displace existing residents. Charpentier said that he did not have an answer to where people will live, but many who work at University Circle offices commute over a wide area including from Walnut Creek to Morgan Hill.
Gauthier also wanted to know how groups that already educate students in technology, such as the StreetCode Academy and other job-training organizations such as JobTrain, might be incorporated into the job center's goals. She, Moody and Councilman Carlos Romero also wanted the job center to work with other city-based jobs programs to avoid redundant services and to create a pathway for residents toward earning living wages.
Residents including Tuiasosopo-Gordon said any serious discussion about educating the community must include existing tech-education efforts in the community. The Amazon proposal does not contain any language that furthers those efforts, but rather just offers job-placement services that do nothing to keep East Palo Altans in their community. They plan to organize against the council's decision and put forth a proposal of their own to counter Amazon's, they said.
Spokespersons for Amazon and Sobrato could not immediately be reached for comment.
A previous version of the story said that Marlayna Tuiasosopo-Gordon is an East Palo Alto resident.