News

President Hotel tenants ask City Council to save building

Clock is ticking on hotel conversion

The lobby and ground-floor stairwell of President Hotel Apartments in Palo Alto hearken back to another era. The building was designed by Palo Alto architect Birge Clark. Photo taken June 12, 2018 by Adam Pardee.

Dozens of residents facing eviction from the President Hotel Apartments in downtown Palo Alto urged the City Council on Monday night to spare the building from being converted back to its original purpose as a hotel by the new owner.

Tucker Berckman told the council that many of his neighbors at the President have been living there for decades and have made significant contributions to the community.

"The result of this eviction in all likelihood is that the residents of this building will leave Palo Alto. I don't think this is what everyone wants," Berckman said.

AJ Capital Partners, a Chicago-based hotel developer that restores historic properties in college towns, notified tenants on June 12 that it had closed escrow on the 75-unit property at 488 University Ave. and would provide relocation assistance to move everybody out of the building by Nov. 12 before it begins renovations on the historic 1929 building, which it plans to reopen as the Graduate Palo Alto hotel in 2020.

Residents said they were still reeling from the unexpected notice that many discovered slipped under their doors. They requested that the city slow down the process and make it more transparent.

Tech worker Jeffrey Jones moved into the Spanish Colonial-style complex that he has called home for the past nine years after relocating to the area from New York City.

"This is a historic building," he told the council. "It is a historic property. It is a historic downtown property. My ask of the the City Council and the city manager is simple: not rush through the process of remaking the President."

Jones told the Weekly that residents aren't out in the streets armed with pitchforks protesting the sale -- they simply want to understand what's going to happen to the building, and if there's a way to preserve the unique community that has blossomed there over the past 50 years that it has served as an apartment complex.

Tenants have heard that the hotel conversion is an allowed use. They've also heard that the six-story building exceeds current height restrictions, which may limit its use as a hotel to two stories.

"I have no doubt that the creative minds of Palo Alto can sit together and come up with a creative solution, so literally, everybody wins," he added.

City Manager James Keene said the city has not yet received a formal application from the new owners and is thus not in the position to formally respond to the proposal. Staff is currently "in the process of actually reviewing to see what factors can be in play in any kind of city response to that application," he said.

"There are a lot of factors we're carefully looking at in the city's code and in ordinances that relate to this," Keene said.

At last week's June 11 council meeting, Keene said that the renovation would include seismic upgrades, new elevators and other improvements. The property is listed as a Category 2 resource on the city's Historic Inventory. The city's Architectural Review Board and Historic Resources Board are expected to review the conversion plans later this year, Keene said adding the hotel use is allowed "by right" at the downtown location.

A few residents bristled on Monday at his assertion that the hotel use is automatically allowed. Michelle Kraus, who lives at the President Hotel, told the council that she and some of her neighbors are far from certain that the "oversized building" can function as a hotel "by right" under the current code.

"We've done our homework. We are worried. We are concerned," Kraus said.

Council members assured residents that there hadn't been any negotiations between the city and the new hotel owner, though they acknowledged that they had attended information sessions to hear about the planned conversion shortly before it was announced.

"I doubt there is a council member here who wasn't thinking sympathetically about what has happened at President Hotel," Mayor Liz Kniss told the crowd after all the speakers made their appeals. "We don't have information yet. Surprisingly, we know very little more than you do."

AJ Properties sent out a press release last week that said the company plans to renovate the building into a 100-room hotel that will include a lobby coffee shop, street-level retail and the restoration of its original rooftop garden.

Tim Franzen, president of the company's Graduate Hotels division, which will operate the Graduate Palo Alto, told the Weekly in an email on Tuesday, June 19: "We have independently confirmed through counsel that the operation of a hotel within the Hotel President is, in fact, a permitted use of that property. We have not yet made any requests to the City or any of its departments, nor do we anticipate doing so for quite some time. Our meeting with City staff was purely introductory and informational in purpose. We have a great deal of historic research and architectural and engineering work to be done before it can be determined what City approvals may be necessary and before any plans will be submitted for consideration of those approvals."

Representatives from the development firm met with residents one-on-one last week and Tuesday. Residents said they were told during the sessions that they would be receiving information about who to pay rent to in a future letter. Any other obligations and responsibilities made between residents and former owner University President Associates LLC will remain in place until November.

AJ Capital is offering each residential unit $3,000 to assist with moving-related expenses and is working with relocation expert Autotemp to provide customized services "to households that may require additional help."

Built in 1929, the property includes 70 studio apartments and five one-bedroom units of between 250 and 800 square feet on the upper five stories. About 58 units were rented at the time of the sale, according to Chris Dressel, president of University President Associates. Rents for the mostly month-to-month leases are relatively low for Palo Alto but are not included in the city's affordable housing count. They range from $1,200 to $2,400, according to a sign posted at the building. Median rent in Palo Alto stands at $2,520 for a one-bedroom apartment, according to apartmentlist.com.

Palo Alto native Dennis Backlund, who moved into a 300-square-foot studio at the President 37 years ago, is the longest remaining tenant in the building. A friend recommended the building when Backlund returned home after living in Paris for a few years.

"I knew of the President, I'd seen it my whole life," said Backlund, who worked as a historic preservation planner for city of Palo Alto before retiring several years ago. His love of historic buildings is part of why he's stayed so long at the President, which he said is the city's largest historical resource.

Backlund said he was blindsided by news of the conversion during an informal meeting held by residents at the President on Saturday. Over the years, the building changed hands a few times, but it always remained an apartment building. Once, he said an owner reportedly tried to convert the apartments into condominiums, but city regulations prevented such a conversion.

"It was just the most terrible feeling when this plan came out because I never ever dreamed that something like this could happen," said the 76-year-old. "Three months ago, I would go to bed every night and just serenely go to sleep, and look around the apartment at all my bookcases, with about 2,000 books of literature and philosophy, and feel just so much at home. It was just such a wonderful feeling, and then the announcement came, and it was just the feeling of sort of desperation and disbelief that this could actually happen," he said. "This was going to be the place where I spent the rest of my life. That is what I thought."

Backlund said the building has fostered a tight-knit, culturally-oriented community within its walls.

"A lot of the apartments advertise. People come in and don't know each other and never know each other. But the President never advertised apartments. They were rented by word of mouth, and so when people left, it was their friends who moved in, and it just kind of gradually evolved into a place where artists, musicians, writers, people like that lived here," he said. "The culture here is passed on from person to person, and so, the character of the building here has remained remarkably constant even when the people have changed ... and with the way the building is designed, with all these doors that face into inner corridors, and the common mailroom and lobby ... the building just physically encourages people to get together."

Related content:

Webcast: President Hotel

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Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.

Weekly City Hall reporter Gennady Sheyner contributed to this story.

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Comments

74 people like this
Posted by Anon
a resident of Barron Park
on Jun 19, 2018 at 9:14 pm

Anon is a registered user.

Another mass displacement. Awful. Renters, who are 44% of Palo Alto’s residents must have more protection. Last year councilmembers DuBois, Kou and Holman tried to get the council to discuss more protections of any kind but were voted down by the other members, led by Cory Wolbach - shame.

The City must act - it sounds like it may have found room to do so.

I am offended at Palo Alto Forwards statement that exploits the plight of these residents who are about to lose their homes, to try to justify PAFs obsession to build big tall building everywhere. I am sure it’s a comfort to these residents that you are using them to make your irrelevant political points.


34 people like this
Posted by common sense
a resident of Midtown
on Jun 19, 2018 at 11:33 pm

The city council and the city manager are shedding fake tears and sympathy for the residents. They are all too eager to get the tax revenue from another hotel, and to get the property tax bump from the change in use of the property from an apartment to a hotel.

And where is Supervisor Joe Simitian? and all the others who were manning the ramparts for the Buena Vista mobile park?


39 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jun 20, 2018 at 12:42 am

Online Name is a registered user.

And then the city council and city manager will shed some more fake tears while they gear up to hire consultants and to tell us how we need more housing and try to raise our taxes to fund "affordable" $3200 a month studios but never neat BMR places like The President that have character.

Of course, they'll oppose the initiative to curb office growth even though more workers means more competition for housing which pushes up rents and prices.

Lather, rinse, repeat.



28 people like this
Posted by Who did not speak
a resident of Downtown North
on Jun 20, 2018 at 12:01 pm

Anon wrote
>I am offended at Palo Alto Forwards statement that exploits the plight of these residents who are about to lose their homes, to try to justify PAFs obsession to build big tall building everywhere.>

I agree. and the bigwigs who are tied into the construction/development industry didn't speak either, Slater, Uang, Rosenblum, or the Palantir employees, Zelkha etc.


25 people like this
Posted by David Thompson
a resident of Palo Alto Hills
on Jun 20, 2018 at 12:47 pm

Ummmm, this is just obsurd. The property was built as a HOTEL, its being restored to its exact original intent...full circle.. isnt this exactaly the type of development we should be applauding?


18 people like this
Posted by Confused
a resident of Old Palo Alto
on Jun 20, 2018 at 5:19 pm

The City is ALL about more housing. The City is ALL about not enough parking. So this sale of the President Hotel will reduce housing and create another hotel with no parking.


17 people like this
Posted by another voter
a resident of Duveneck/St. Francis
on Jun 20, 2018 at 5:59 pm

Doesn't the city manager realize how many of us laugh at his usual crocidle tears because someone will loose there home and the $3000 will get them NOTHING. And the young, innocent young men on the CC, grew up in privilege, went to good schools and in simple english DON"T GET IT. One even lives at home with his parents.....what is it we think he does or doesn't understand. And our present Mayor- at one time she understood the fight. She is so blatently off course that as an act of generosity, she might consider retiring. Once again the council plays innocent after the article hits the paper. Imagine if any one of those involved had the conversation when approached to buy the hotel and after a quasi deal has been cast.

Obviously, I am disguested as there isn't even any conversation to assist these long term productive residents of Palo Alto find equal housing.


18 people like this
Posted by resident
a resident of Crescent Park
on Jun 20, 2018 at 6:11 pm

Our city needs more housing, not less. Killing this many homes all at once is a travesty. Good luck finding this many homes for the residents all at once.


5 people like this
Posted by Eric Rosenblum
a resident of Downtown North
on Jun 20, 2018 at 8:02 pm

Palo Alto Forward strongly supports the residents in this case; we hope that this transaction does not take place. This is exactly the sort of housing that we need in our community.

For those who seem annoyed that we're asking for NOT ONLY the President Hotel to be preserved as a resident, but to have EVEN MORE President Hotels be built in our community, ask yourself why not? Let's not limit the benefit of affordable apartments in a great walkable area to just a lucky handful. The President Hotel is a wonderful residence; why shouldn't we have more buildings like this one? This is what more affordable housing can look like.


4 people like this
Posted by stephen levy
a resident of University South
on Jun 20, 2018 at 8:32 pm

stephen levy is a registered user.

Below is the letter submitted by Eric Rosenblum on behalf of Palo Alto Forward and which was read at the city council meeting on Monday by Diane Morin.

I spoke at the meeting as one of the 20+ speakers and voiced my opinion that the building AND its residents are a treasure for our community. This is a market rate project in a great location made more affordable by its large number of units on a relatively small site and the absence of parking costs.

If this building and its residents are indeed a treasure for our community why should we not work to make more buildings like this possible in locations like downtown while also exploring possible remedies for the existing residents.

The Palo Alto Forward letter---

To Palo Alto City Council


Palo Alto Forward bemoans the potential loss of the President Hotel as a residence for 75 of our fellow Palo Altans, and strongly supports any efforts to allow for the building to continue to be residential.


The President Hotel is a perfect example of the sort of residential building that we need more of in Palo Alto. It is lovely building, with smaller apartments that are relatively affordable for our area. It is located in the center of our University Avenue downtown, allowing residents the freedom to shop, eat, live and work without having to rely on cars, should they choose to.


We hope City Council can find a way to preserve this as a residential building. Furthermore, for those people who are supportive of this as a wonderful residential building, please take a moment to think about what makes a building like this possible. The President Hotel violates all of our existing zoning codes: it is underparked, overly dense, and too tall. And yet, it is wonderful. It provides a unique supply of smaller apartments in the heart of downtown, and houses a huge diversity of people who may not otherwise be able to live in our community.


We want to encourage more President Hotels in our town. Please consider supporting buildings like this in your Housing Workplan!


Sincerely,


Eric Rosenblum

President, Palo Alto Forward


24 people like this
Posted by No Tenants Protection/No Housing Preservation in Palo Alto?
a resident of another community
on Jun 20, 2018 at 9:24 pm

@Eric Rosenblum

Wasn't there also a precedent when Casa Olga (closed in 2009) made way for the Epiphany Hotel (opened in 2014)? Preserving Casa Olga's SROs (single room occupancy) use could have gone a long way in addressing the current homelessness crisis.

Since PA has so little in the books for Tenant Protection (apparently not even a standard relocation package) and Housing Preservation (no net loss of housing, no conversion from housing to any other use....), history is bound to repeat itself at the President Hotel ... and any replicas you're calling for.

Consensus among many affordable housing advocates (including CASA working group) is that any housing strategy should be based on the "three P's": Produce ...but just as importantly Protect and Preserve. Time for Palo Alto and its neighbors to adopt that 3 legged approach?


3 people like this
Posted by stephen levy
a resident of University South
on Jun 20, 2018 at 9:49 pm

stephen levy is a registered user.

To the previous poster

I attended and spoke at public comment at the CASA meeting today

The whole agenda was about preservation and protection.

CASA committee members realized that preservation requires major fund raising to be able to purchase properties like the President Hotel in danger of being converted. And so many of the proposals were about raising money to provide subsidies to preserve housing.

There was also discussion of developing better data on units at risk of being converted from subsidized to market rate housing and also collecting data on which market rate units like the President Hotel are affordable but not in a BMR program.

In other meetings CASA discussed policies to make sure evictions are for cause and programs to give tenants access to fair processes and mediation.

The one area where there is a sharp difference of opinion is with regard to rent control not the other renter protections.


4 people like this
Posted by Rob
a resident of Atherton
on Jun 21, 2018 at 12:50 pm

This "unique community that has blossomed there" needs to stop complaining. They're turning this building back into what it should've always stayed as, a luxury hotel. Can't wait to have my guests flying in from out of town stay at this hotel. The rich history of this building will top any other hotel in the area. Location is perfect as it's near Atherton and on University Ave.


2 people like this
Posted by george drysdale
a resident of Professorville
on Jun 21, 2018 at 12:52 pm

Let's use numbers in our reasoning. The money for providing "affordable housing" is now being increasingly consumed by those truly in need of housing. It is make believe that people will receive "affordable housing" in the very very high priced land in Palo Alto and now Mountain View. Resources are scarce especially because of the baby boomer tsunami. The only thing you can do is produce more apartment units at market rates. Preservation, yes, but the taxpayer should pay for this. The U.S. government is now on paper bankrupt, the federal government debt is as high as after the second world war. The government of California is also broke. Raise taxes in Palo Alto and there goes more talent to other states.


14 people like this
Posted by rsmithjr
a resident of Duveneck/St. Francis
on Jun 21, 2018 at 1:36 pm

rsmithjr is a registered user.

There are two separate issues here: preserving existing housing, and providing low-income housing for people whose income is low and are qualified for subsidized housing.

If you look at San Francisco, which has rent control, you will find that many people living in rent-controlled housing could actually afford market rates. This is because they get into the rent-controlled space and simply hang onto it even when their income increases.

I personally know people in San Francisco who have used their extra income to buy several non-rent-controlled units/houses while continuing to enjoy the benefits of rent control (such as they are).

WRT Buena Vista, we never had any idea that all of the occupants matched the criteria for subsidized housing. Likewise, we don't know what the status is for the current occupants of the President.

My point is that government support should go to the efficient creation of housing for people who need the subsidy. We should not be creating small groups of entitled people obtaining public benefits that they are not really qualified for.

I support rational public housing, not efforts to keep property owners from repurposing their properties.




6 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jun 21, 2018 at 3:43 pm

Online Name is a registered user.

There are lots of known problems with rent control, esp. in San Francisco, but rent moderation measures could certainly be pursued like limiting annual increases to X%.

When the ADU ordinance? was rushed through several of us asked lots of questions about which laws would apply ADU tenants since we might want to charge lower rates to a disadvantaged tenant but would risk being sued by another able to pay market rates.


13 people like this
Posted by peninsula resident
a resident of another community
on Jun 22, 2018 at 9:33 am

"Ummmm, this is just obsurd. The property was built as a HOTEL"

Exactly.

The problem here are not developers. The problem are the people that complain about housing but do nothing except protest legal property transactions and changes after-the-fact. These people are lazy, lazy, lazy and dumb, dumb, dumb.

I fully support changing zoning and rules on changes in property use, and support those who want to implement policies that ensure there is no net-reduction in housing.

What I do NOT support and is entirely un-American are retroactive changing-of-the-rules/codes for entirely legal and reasonable changes/modifications to property.

Changing this former hotel into a hotel is entirely compliant with Palo Alto requirements. If you don't like it, then stop being LAZY, and instead change the rules so *future* transactions better reflect the interests of the community.

Changing the rules for entirely legal property use after-the-fact is unethical. If you don't like the existing rules, CHANGE THE RULES.


5 people like this
Posted by george drysdale
a resident of Professorville
on Jun 22, 2018 at 11:58 am

Simitianville (the Buena Vista). Designed by committee: a politically correct action group. Again, look to the numbers. Even if the big proposed bonds for "affordable housing" are passed it will only be a drop in the bucket because of the very high land prices along much of the coast. Fortunate winners of the lottery around 20% would be subsidized by the other 80% who qualify but did not win in the lottery. Redistributionism. There is no escaping supply and demand and demography.
George Drysdale bull in the China shop


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