News

City challenges plan to convert President Hotel

Officials determine the conversion would violate zoning code

A controversial proposal to convert the iconic President Hotel from an apartment building into a hotel hit a snag this week, when Palo Alto officials determined that the change would violate the local zoning code.

Palo Alto's acting Planning Director Jonathan Lait informed the hotel's new owner, Adventurous Journeys Capital Partners (AJ Capital), in a letter dated Tuesday that the city has conducted a review of the property and "determined that the establishment of a hotel at this location, as described, is impermissible based on existing zoning regulations and site characteristics."

The determination comes less than a month after City Manager James Keene suggested at a City Council meeting that the new property owner can move ahead "by right" with the conversion, which would force the displacement of residents who occupy the building's 75 units. Keene walked back his comments on June 25 and said staff is still reviewing the zoning code to see whether the conversion can legally proceed.

The city's determination this week that it cannot is based on a code provision that pertains to "grandfathered" buildings -- those that do not comply with the zoning code but that are allowed to retain their uses because they were established before the code was developed. Designed by Birge Clark, the President Hotel building was constructed in 1929 and initially functioned as a hotel, but was converted to an apartment building about 50 years ago.

The zoning code allows grandfathered facilities to be remodeled or improved but specifies that these facilities should retain "the same use" as part of the renovation. That provision would be violated if the building at 488 University Ave. reverted to a hotel, according to the city.

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In his letter to Timothy Franzen, president of AJ Capital, Lait noted that when he and Keene met with Franzen and the company's representative, Richard Hackmann, on June 7 -- five days before AJ Capital closed escrow on the building -- to discuss code compliance, Hackmann indicated "only a need to address parking and obtain design review approval."

"Since that meeting, the City has conducted a review of the property and determined that the establishment of a hotel at this location, as described is impermissible based on existing regulations and site characteristics," Lait wrote.

He noted that President Hotel, with its ground-floor retail and above-grade apartments "is non-complying with respect to maximum building height and floor area requirements of the Municipal Code and perhaps other provisions as well."

AJ Capital President Tim Franzen said in a statement Friday that the company "respectfully disagree(s) with the letter’s preliminary analysis of the zoning question."

"A hotel use at this location is supported by the zoning," Franzen said. "We intend to discuss this matter further with the City."

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While it remains to be seen what impact the determination will have on the evictions, it offers a bit of hope to residents, many of whom asked the council on June 18 to slow down the process and to take a closer look at whether the conversion is legal. Many noted at the meeting that President Hotel, with its small units, offers a commodity that has become exceedingly rare in Palo Alto: affordable housing.

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

Mayor Liz Kniss responded at the time that while council members are sympathetic to the residents, they don't have enough information to determine what can be done to help them.

But for land-use watchdog Jeff Levinsky, the city's determination isn't surprising. On June 9, Levinsky circulated a letter flagging possible legal issues with the conversion, including the provision on "grandfathered" buildings. Levinsky, who co-chairs the Development, Zoning and Code Enforcement Committee for the umbrella group Palo Alto Neighborhoods, noted in the letter that the residences were in existence in 1986, when the zoning code was adopted, and as such can remain and be occupied.

Current zoning laws, he noted, would only allow two hotel floors at the downtown site if it weren't for the "grandfathered" provision.

"In the case of the President Hotel, one of those floors would have to be the ground floor," Levinsky wrote. "The remaining floors of the building cannot be used as part of the hotel and must either stay in use as residences or not be used at all.

"No sensible building owners would want to abandon the residential use of those floors, as they'd then earn no income from the majority of the building."

For the residents, the city's concurrence that the conversion cannot proceed is a glint of good news, even if it offers no real assurance that they will be able to keep their homes, resident Pemo Theodore told the Weekly. Theodore said that some residents have already "cut their losses and left." It is very sad, she said, to go to the mailroom and see their names removed.

"It has been a huge cost to all of us and we still do not know what the future holds for The President Hotel and our apartments," Theodore told the Weekly. "We are grateful for all the support from the Palo Alto community. The building has a heart and the heart is the residents -- the community."

The hotel's conversion would have also dealt a blow to Palo Alto's officially adopted goal of producing 300 units of new housing annually. To date, the council had only approved one housing project totaling 57 units. The loss of 75 units would have more than offset that project.

Councilman Cory Wolbach, one of the city's staunchest advocates for more housing, called the city's determination that the building cannot be converted to a hotel "a matter of due diligence, of understanding what the zoning code says, understanding what the new owner is proposing and understanding what our proper role is as a jurisdiction where this is proposed."

He noted that the item may end up as a quasi-judicial matter (in which the council is effectively acting as a judge) and said it's important that council members "be careful not to reach full conclusions or prejudice ourselves."

"But of course, it's important that we continue to expand, rather than constrict, our overall housing supply in Palo Alto," Wolbach said. "I think most people in Palo Alto, the council included, are always concerned when members of the community face displacement."

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City challenges plan to convert President Hotel

Officials determine the conversion would violate zoning code

by / Palo Alto Weekly

Uploaded: Fri, Jul 20, 2018, 9:55 am

A controversial proposal to convert the iconic President Hotel from an apartment building into a hotel hit a snag this week, when Palo Alto officials determined that the change would violate the local zoning code.

Palo Alto's acting Planning Director Jonathan Lait informed the hotel's new owner, Adventurous Journeys Capital Partners (AJ Capital), in a letter dated Tuesday that the city has conducted a review of the property and "determined that the establishment of a hotel at this location, as described, is impermissible based on existing zoning regulations and site characteristics."

The determination comes less than a month after City Manager James Keene suggested at a City Council meeting that the new property owner can move ahead "by right" with the conversion, which would force the displacement of residents who occupy the building's 75 units. Keene walked back his comments on June 25 and said staff is still reviewing the zoning code to see whether the conversion can legally proceed.

The city's determination this week that it cannot is based on a code provision that pertains to "grandfathered" buildings -- those that do not comply with the zoning code but that are allowed to retain their uses because they were established before the code was developed. Designed by Birge Clark, the President Hotel building was constructed in 1929 and initially functioned as a hotel, but was converted to an apartment building about 50 years ago.

The zoning code allows grandfathered facilities to be remodeled or improved but specifies that these facilities should retain "the same use" as part of the renovation. That provision would be violated if the building at 488 University Ave. reverted to a hotel, according to the city.

In his letter to Timothy Franzen, president of AJ Capital, Lait noted that when he and Keene met with Franzen and the company's representative, Richard Hackmann, on June 7 -- five days before AJ Capital closed escrow on the building -- to discuss code compliance, Hackmann indicated "only a need to address parking and obtain design review approval."

"Since that meeting, the City has conducted a review of the property and determined that the establishment of a hotel at this location, as described is impermissible based on existing regulations and site characteristics," Lait wrote.

He noted that President Hotel, with its ground-floor retail and above-grade apartments "is non-complying with respect to maximum building height and floor area requirements of the Municipal Code and perhaps other provisions as well."

AJ Capital President Tim Franzen said in a statement Friday that the company "respectfully disagree(s) with the letter’s preliminary analysis of the zoning question."

"A hotel use at this location is supported by the zoning," Franzen said. "We intend to discuss this matter further with the City."

While it remains to be seen what impact the determination will have on the evictions, it offers a bit of hope to residents, many of whom asked the council on June 18 to slow down the process and to take a closer look at whether the conversion is legal. Many noted at the meeting that President Hotel, with its small units, offers a commodity that has become exceedingly rare in Palo Alto: affordable housing.

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

Mayor Liz Kniss responded at the time that while council members are sympathetic to the residents, they don't have enough information to determine what can be done to help them.

But for land-use watchdog Jeff Levinsky, the city's determination isn't surprising. On June 9, Levinsky circulated a letter flagging possible legal issues with the conversion, including the provision on "grandfathered" buildings. Levinsky, who co-chairs the Development, Zoning and Code Enforcement Committee for the umbrella group Palo Alto Neighborhoods, noted in the letter that the residences were in existence in 1986, when the zoning code was adopted, and as such can remain and be occupied.

Current zoning laws, he noted, would only allow two hotel floors at the downtown site if it weren't for the "grandfathered" provision.

"In the case of the President Hotel, one of those floors would have to be the ground floor," Levinsky wrote. "The remaining floors of the building cannot be used as part of the hotel and must either stay in use as residences or not be used at all.

"No sensible building owners would want to abandon the residential use of those floors, as they'd then earn no income from the majority of the building."

For the residents, the city's concurrence that the conversion cannot proceed is a glint of good news, even if it offers no real assurance that they will be able to keep their homes, resident Pemo Theodore told the Weekly. Theodore said that some residents have already "cut their losses and left." It is very sad, she said, to go to the mailroom and see their names removed.

"It has been a huge cost to all of us and we still do not know what the future holds for The President Hotel and our apartments," Theodore told the Weekly. "We are grateful for all the support from the Palo Alto community. The building has a heart and the heart is the residents -- the community."

The hotel's conversion would have also dealt a blow to Palo Alto's officially adopted goal of producing 300 units of new housing annually. To date, the council had only approved one housing project totaling 57 units. The loss of 75 units would have more than offset that project.

Councilman Cory Wolbach, one of the city's staunchest advocates for more housing, called the city's determination that the building cannot be converted to a hotel "a matter of due diligence, of understanding what the zoning code says, understanding what the new owner is proposing and understanding what our proper role is as a jurisdiction where this is proposed."

He noted that the item may end up as a quasi-judicial matter (in which the council is effectively acting as a judge) and said it's important that council members "be careful not to reach full conclusions or prejudice ourselves."

"But of course, it's important that we continue to expand, rather than constrict, our overall housing supply in Palo Alto," Wolbach said. "I think most people in Palo Alto, the council included, are always concerned when members of the community face displacement."

Comments

resident
Downtown North
on Jul 20, 2018 at 10:42 am
resident, Downtown North
on Jul 20, 2018 at 10:42 am
42 people like this

Evicting that many city residents all at once would be an epic travesty


Joe
Stanford
on Jul 20, 2018 at 10:50 am
Joe, Stanford
on Jul 20, 2018 at 10:50 am
32 people like this

If Palo Alto didn't fight the creation of new housing at every turn, then there might have been enough room in this city to both restore a beautiful old hotel to its original purpose AND to house these people elsewhere in Palo Alto.


Online Name
Registered user
Embarcadero Oaks/Leland
on Jul 20, 2018 at 10:52 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Jul 20, 2018 at 10:52 am
56 people like this

Good for the watchdogs and Palo Alto Neighborhoods.


Elizabeth
Downtown North
on Jul 20, 2018 at 10:54 am
Elizabeth , Downtown North
on Jul 20, 2018 at 10:54 am
2 people like this

I assume a hotel room is more taxed than a residential unit and therefore more profitable for the city? If so, can taxes to adjusted to incentivize the city to approve more housing?


Ericaceae
Registered user
Ventura
on Jul 20, 2018 at 11:01 am
Ericaceae, Ventura
Registered user
on Jul 20, 2018 at 11:01 am
75 people like this

Thank you Jeff Levinsky for your research and letter raising the grandfathering conditions.

I imagine AJ Capital was not very happy to get this information AFTER their meeting with the City Manager (and after closing escrow)!

So is this article stating that a resident volunteer is more familiar with zoning rules than CPA staff?


Curmudgeon
Downtown North
on Jul 20, 2018 at 11:21 am
Curmudgeon, Downtown North
on Jul 20, 2018 at 11:21 am
42 people like this

"If Palo Alto didn't fight the creation of new housing at every turn, ..."

Get off it. Nobody will fight you if you buy a vacant lot and build yourself a house.


resident
Midtown
on Jul 20, 2018 at 11:45 am
resident, Midtown
on Jul 20, 2018 at 11:45 am
49 people like this

The Daily Post article stated "After other private meetings with City Council members and City Manager Jim Keene, the sale went through."

First, were the discussions with City Council Members and Manager Keene disclosed as to what was discussed? is there a potential Brown Act violation? I would hope after the 27 University fiasco, where council members had private meetings with the person interested in developing 27 University, that they would know better than to have private meetings.

Second, why has the city council not proposed the same protections to the residents of 488 University that were afforded to the Buena Vista mobile park home - specifically rent increase controls, etc? Could the city's hunt for revenue (specifically the hotel tax which goes entirely to the city, and the step up in assessed value of which the city get a portion of) be driving the original feedback to the developer on the conversion?

I'm glad that the Acting Planning Director Jonathan Lait was willing to listen to Jeff Levinsky and reconsider the rush to judgement. If Mr Lait, doesn't become the Planning Director, this could be one of the reasons why; so Mr. Lait made a decision with integrity even though he may face some adverse consequence. And we should all be glad that we have someone like Jeff Levinsky in our city to help make sure the land use rules are being followed.


Joe
Another Palo Alto neighborhood
on Jul 20, 2018 at 11:47 am
Joe, Another Palo Alto neighborhood
on Jul 20, 2018 at 11:47 am
28 people like this

Given that the building was originally a hotel, and the Garden Court Hotel sits next door to the President--a little difficult to understand why the Garden Court's existence as a hotel is OK, but the President returning to its roots is not.


Gale Johnson
Adobe-Meadow
on Jul 20, 2018 at 12:00 pm
Gale Johnson, Adobe-Meadow
on Jul 20, 2018 at 12:00 pm
40 people like this

@Ericaceae, you beat me to it. I was going to ask the same question. Maybe Jeff Levinsky should run for CC.

We know very little about the meetings between Jim Keene and AJ Capital. Were any CC members present at the meetings? Why did staff not know about the zoning code that restricted the sale? Could it be that the city was willing to throw the residents under the bus for new revenue, in this case TOT revenue, that we so desperately need for infrastructure and pension obligations?? For all the talk about supporting the low income folks in our city, why were CC voices silent on this issue??

Ken, we need more concerned citizens like yourself on CC. We have a few watchdogs on council now, but not enough of them.

And now, is there a possibility of a law suit over this misadventure??


Bill
Barron Park
on Jul 20, 2018 at 12:06 pm
Bill, Barron Park
on Jul 20, 2018 at 12:06 pm
32 people like this

> If Palo Alto didn't fight the creation of new housing at every turn

Pretty sad isn't it?

The largest project in the past few years to build 180 apartments was from Prometheus at the site of the Buena Vista Mobile Home Park. Both the City staff and City Council fought the project for years, forcing the developer to walk away. The City and County ended up spending nearly $50 million to purchase part of the site and keep Buena Vista as low density mobile home housing forever.

Palo Alto Housing's effort at Maybell to build 60 senior low income units collapsed because the project required selling more than half of the site to a commercial developer for high end townhomes. The City could have kicked in money to reduce or eliminate the townhomes, but refused. After PAH walked away, the City refused to purchase the Maybell site.

Now, of course, the City Council and staff blame the residents for not supporting dense housing projects. But, the worst offenders are operating out of City Hall. They created the housing crises themselves, and want to dump massive overdevelopment into the neighborhoods of South Palo Alto.

No thanks.


Concerned landowner
Old Palo Alto
on Jul 20, 2018 at 12:11 pm
Concerned landowner , Old Palo Alto
on Jul 20, 2018 at 12:11 pm
35 people like this

This is a corrupt loop hole that should be eliminated. AJ meets with the city planners 5 days before escrow and get the go-ahead, only to find out about this loophole? Cronyism at its finest.

As a PA citizen, I’m deeply troubled that the city may come after my property at any moment....”sorry this violates some loophole we didn’t tell you about.”

Was this same loophole applied for the 5-story plus Epiphany hotel conversion (previously low income, senior citizen housing)?

Regardless of where this lands, it will be an expensive process for both sides caused by unclean city codes. Shame!


Sheri
Registered user
Midtown
on Jul 20, 2018 at 12:31 pm
Sheri , Midtown
Registered user
on Jul 20, 2018 at 12:31 pm
48 people like this

@Ericaceae

“So is this article stating that a resident volunteer is more familiar with zoning rules than CPA staff?” Yes, as has long been the case.

As usual, thanks, Jeff!


Sheri
Registered user
Midtown
on Jul 20, 2018 at 12:31 pm
Sheri , Midtown
Registered user
on Jul 20, 2018 at 12:31 pm
27 people like this

Also, thank you, Jonathan, for acting on this.


Carl Jones
Palo Verde
on Jul 20, 2018 at 2:32 pm
Carl Jones, Palo Verde
on Jul 20, 2018 at 2:32 pm
14 people like this

My concern is - (a) would AJ Capital have purchased the building had they known that it had to remain apartments? (b) in their meetings with The City (manager and council members) were they told (assured?) that they could convert the building? (c) is The City now (potentially) liable in any way for damages if (B) is YES and (A) is NO?

As to the Garden Court Hotel, the question would seem to be "is it grandfathered"? However, it was built in 1985. So if it is non-conforming it would be interesting to know how/why.

This is a good link on the President Hotel Web Link


Joe
Another Palo Alto neighborhood
on Jul 20, 2018 at 3:10 pm
Joe, Another Palo Alto neighborhood
on Jul 20, 2018 at 3:10 pm
7 people like this

> As to the Garden Court Hotel, the question would seem to
< be "is it grandfathered"?

There was an apartment building on the site where the Garden Court now sits.


Jane
Evergreen Park
on Jul 20, 2018 at 3:48 pm
Jane, Evergreen Park
on Jul 20, 2018 at 3:48 pm
6 people like this

I believe the President Hotel is listed and the exterior preserved so it cannot be torn down. Unlike whatever existed on the now Garden Court Hotel property. Looks like the lawyers for the prospective buyers did not do their due diligence and the right questions were not asked because there was an assumption the building could be turned into a hotel because although it had not been a hotel for 50 years it was a hotel when it was built.


Money money money
South of Midtown
on Jul 20, 2018 at 3:56 pm
Money money money, South of Midtown
on Jul 20, 2018 at 3:56 pm
29 people like this

We can now add Richard Hackmann to the Revolving Door cesspool. He used to work in the City Manager's office, as I recall. Now he works for this developer.

>Like Steve Emslie who went from Asst.City Manager to working for developers, now working for the Castilleja developers, among others, Ms.Gonzalez joins a list of city officials who have gone to work for development interests. Others who come to mind are Jean McCown, land use attorney who leads development at Stanford,(regardless of her title), and Judy Kleinberg, CEO of the Chamber of Commerce.<


James Thorton
College Terrace
on Jul 20, 2018 at 4:05 pm
James Thorton, College Terrace
on Jul 20, 2018 at 4:05 pm
4 people like this

[Post removed.]


Hulkamania
Duveneck/St. Francis
on Jul 20, 2018 at 4:15 pm
Hulkamania, Duveneck/St. Francis
on Jul 20, 2018 at 4:15 pm
10 people like this

[Post removed.]


typical
Downtown North
on Jul 20, 2018 at 7:18 pm
typical, Downtown North
on Jul 20, 2018 at 7:18 pm
15 people like this

[Post removed.]


the_punnisher
Registered user
Mountain View
on Jul 20, 2018 at 8:02 pm
the_punnisher, Mountain View
Registered user
on Jul 20, 2018 at 8:02 pm
2 people like this

For talk about building your house, just buy a chunk of land and drive a " tiny house " onto the patch of land and demand all hook up services....oh this is covered in another story, my bad...

A rhetorical question: Are the government all people who failed at being " rocket scientists "? That could explain the latest drama unfolding in Palo Alto? Playing Russian Roulette with 5 of 6 chambers loaded is something smart people should avoid whenever possible....

Hawaii has already made " shipping container " communities for the minimum wage slaves who take care of the uber rich....Kinda like the problem that Palo Alto is grappling with right now.

A thought; why not fill in the area around " Cooley Landing " and build " shipping container " communities where all those auto wreckers did business , like on Tara Road? I have a secret set of reasons the " on-line " editors would know and this would be a 50 year old secret. History repeats again... There is plenty of open space where all the businesses were. Right next to the government equipment sits. across from the old ROMIC Superfund site is located. One problem: the east side of C&C business gets flooded at the extreme high tide. Now we have solutions to fix that end of Tara Road. A win-win situation.


the_punnisher
Mountain View

Registered user
on Jul 20, 2018 at 8:04 pm
Name hidden, Mountain View

Registered user
on Jul 20, 2018 at 8:04 pm

Due to violations of our Terms of Use, comments from this poster are only visible to registered users who are logged in. Use the links at the top of the page to Register or Login.


Annette
Registered user
College Terrace
on Jul 20, 2018 at 8:32 pm
Annette, College Terrace
Registered user
on Jul 20, 2018 at 8:32 pm
16 people like this

I kinda doubt this story is over. Gale Johnson and Ericakeae perfectly state the various concerns. Kudos to Jeff L. I wonder why in the heck the City didn't get things right sooner. Too sweet a deal on the table?


Eric Rosenblum
Downtown North
on Jul 20, 2018 at 8:43 pm
Eric Rosenblum, Downtown North
on Jul 20, 2018 at 8:43 pm
24 people like this

Thanks to the residents and allies (esp mr. Levinsky) for effective work in preserving this building as housing. Well done!


residents win one, finally
Another Palo Alto neighborhood
on Jul 20, 2018 at 10:11 pm
residents win one, finally, Another Palo Alto neighborhood
on Jul 20, 2018 at 10:11 pm
24 people like this

This episode just lays bare the culture of City Hall which has been destroying this City over the
last more than 15 years. Here the hotel tax revenue, in a renovated building, were considered a gift and there was no intent to block it, the
objective was to guide it through the process, just business as usual. What happened here is just the tip of the iceberg, and thanks to a concerned resident, it blew up in their face. Just wondering,does anybody know what the in-lieu parking assessment was against the Epiphany Hotel when that building was converted?




Another Giveaway
Another Palo Alto neighborhood
on Jul 20, 2018 at 10:14 pm
Another Giveaway, Another Palo Alto neighborhood
on Jul 20, 2018 at 10:14 pm
33 people like this

This whole thing would all be hilarious if it wasn't so sad.

Real-estate developers spends the last thirty buying city council members that stuff city staff with industry lapdogs, then the developers complain when those same bought and paid for council members and compliant city staff give bad real-estate investment advise!

Maybe developers need to relearn how to do their own due diligence instead of depending on the corrupt hacks in city government to do it for them?


Rob
Atherton
on Jul 21, 2018 at 12:08 am
Rob, Atherton
on Jul 21, 2018 at 12:08 am
6 people like this

I hope the new owners raise everyone's rent.


Fred Davidson
Atherton
on Jul 21, 2018 at 12:53 am
Fred Davidson , Atherton
on Jul 21, 2018 at 12:53 am
6 people like this

This is laughable. I love how the article says the letter from the city gives the tenants hope. It’s actually the other way around. It gives them less hope since the city has now gone back on its word and the developers were playing nice before and even helping w moving credits. I doubt that’s on the table any longer. Some tenants are frustrated that their for rent annual leases are not being renewed and they go cry to the city. The city has no backbone and agrees to send out the letter a citing an agent loophole to make it appear they are going to fight this as of right process. What a waste of everyone’s time and energy. The building is president Hotel, it’s going to be what it’s intended use is. These developers will 100% sue the city and they will 100% win, what a giant waste of time and money this is for the city and our tax dollars. Fake news.


residents win one,finally
Another Palo Alto neighborhood
on Jul 21, 2018 at 9:28 am
residents win one,finally, Another Palo Alto neighborhood
on Jul 21, 2018 at 9:28 am
32 people like this

If the developer sues the City and is awarded
damages there should be a clawback provision against the City Manager and his recent salary increases and pension as he walks out the door.
This is common in the private sector against CEO's
who depart. The public should not have to pick this up. Likewise if a lawsuit results from the Ross Rd debacle in that the resident warnings about the project were ignored.


No Tenants Protection in Palo Alto??
another community
on Jul 21, 2018 at 9:38 am
No Tenants Protection in Palo Alto??, another community
on Jul 21, 2018 at 9:38 am
11 people like this

CASA -the regional housing group featured in another article- has a 3 legged-stool strategy; the "three P's": Produce, Protect and Preserve.
Great to see Palo Alto step up in Preserving these housing units. But without tenants protections, this might be a very short reprieve for current tenants who are at the mercy of sudden rent hikes, no cause evictions...


Resident
University South
on Jul 21, 2018 at 10:24 am
Resident , University South
on Jul 21, 2018 at 10:24 am
41 people like this

Last year DuBois, Holman and Kou made a proposal that the council evaluate tenant protections against rent spikes, wrongful evictions, etc. But Wolbach, Scharff and the rest blocked it from even being explored in committee.
The renter situation here has become so bad that PA needs to consider these kinds of protections, like other cities have already done.


Question
Duveneck/St. Francis
on Jul 21, 2018 at 11:30 am
Question, Duveneck/St. Francis
on Jul 21, 2018 at 11:30 am
8 people like this

In brief, how did this small, select group of individuals get this fantastic place to live, and with such a great deal on rent? I am divided about the iniquity of the privileged few, while understanding it’s great to live in a wonderful ventral location with character with just such a deal.
Larger scale, regional efforts are more fair to the public. We all have needs (or many of us, anyway).
I am unclear: do we taxpayers subsidize their low rent in this place?
Can tenants stay forever at that low tent?!


Curmudgeon
Downtown North
on Jul 21, 2018 at 12:40 pm
Curmudgeon, Downtown North
on Jul 21, 2018 at 12:40 pm
8 people like this

When did the hotel convert, and what was the code then? Maybe it is residence uses that are illegal.


Annette
Registered user
College Terrace
on Jul 21, 2018 at 12:58 pm
Annette, College Terrace
Registered user
on Jul 21, 2018 at 12:58 pm
30 people like this

Note to Joe: I think the critical issue regarding housing is that the City has promoted excessive Office/R&D growth despite the hugely out-of-whack jobs:housing imbalance.

As for the Hotel President/AJ Capital situation, there are many unanswered questions.

When did AJ Capital first meet with Staff? Council members?
How many meetings were there?
When were these various meetings?
When the meetings with Council members took place, how many CC members attended each meeting?
Did any of this happen before Gitelman's decision to leave?
With both Hackman and Emslie in the buggy (so to speak) it is unlikely that key issues such as "can this be done" were not covered by one side or the other.

We are told that we pay top dollar for top positions b/c we hire only the best. In this instance, we see that two of our former "best" and at least one of our current "best" were in fact bested by a smart resident who is simply paying attention. Oh, dear. Maybe the City should hire Jeff L.

Finally, does this situation explain why the CC Majority is opposing the Citizen's Initiative for a growth cap on office/r&d?

I think there's more to this story; maybe more than will ever be made public. What's the military term - SNAFU?


Oldster
Old Palo Alto
on Jul 21, 2018 at 3:41 pm
Oldster, Old Palo Alto
on Jul 21, 2018 at 3:41 pm
11 people like this

An unspoken issue is major investment financiers such as those behing this redecelopment project now want rental-only income property for their "core" residential real estate funds. Just look at what happened in Redwood City, Sunnyvale, San Jose downtowns' redevelopment recently. The idea of tenants having any American Dream homeowner rights in these core projects such as a condo or a multi-year lease gives them the cooties since that reduces their return on investment which they usually calculate for 50 years. For example, after 10-15 they can fix up a bathoom and charge more rent for a hotel suite instead of a condo owner - and local voter - taking that profit.

The real issue behind all of this is simply the bean counter game of rate of return on cash investments for the owners and their financial backers, and thus also the politicians' careers they supoort. Old downtown major redevelopement projects of only rental units are not what is in the best interest of those living and voting here unless we force City Hall to do what *we* want for our town.


Online Name
Registered user
Embarcadero Oaks/Leland
on Jul 21, 2018 at 4:40 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Jul 21, 2018 at 4:40 pm
22 people like this

As always, Annette asks the key questions. We need to know which city council members, city employees and local candidates met with them. And then I want to see some real reporting on that and campaign contributions before the the next election.

I'd also like to know how the investigations into the last election's campaign irregularities is going. Anyone know?


bikermom
Mayfield
on Jul 21, 2018 at 5:44 pm
bikermom, Mayfield
on Jul 21, 2018 at 5:44 pm
Like this comment

Thank goodness, this would cause yet another headache for the surrounding neighbors.


Annette
Registered user
College Terrace
on Jul 21, 2018 at 7:05 pm
Annette, College Terrace
Registered user
on Jul 21, 2018 at 7:05 pm
29 people like this

Suppose the City's new position on this holds and the property remains apartments. AJ Capital will be the new landlord. And they will of course expect to operate at a profit. How high will rents need to spike in order to begin to recover on a $65 million investment?

I hope this mess causes the City and CC to reconsider the Developer Doctrine they have been following. Not only is their approach not serving us well, it is clearly against our best interests b/c we are stuck with a built environment that doesn't work for the community it is in. Whatever happened to the concept of "do no harm"?

First step on the road to recovery: the oft-mentioned Citizen's Initiative. We need housing, not more and more office.


Fred Davidson
Atherton
on Jul 21, 2018 at 8:16 pm
Fred Davidson , Atherton
on Jul 21, 2018 at 8:16 pm
5 people like this

If a miracle happens and for some reason the city prevails in a lawsuit (which they wont), the tenants leases will not be renewed regardless of the outcome, and the building will sit vacant until AJ decides if they would rather renovate and create luxury apartments or even worse luxury condos.....great work city of Palo Alto. Lets deter developers from converting properties to their original use and generate more tax income for the city than any other type of asset class. As a resident, this is embarrassing and will deter further investment by responsible investors, besides our hotel stock is nowhere near the quality of this community, name one historic hotel with any charm or character.....


Judy
Menlo Park
on Jul 22, 2018 at 12:23 pm
Judy, Menlo Park
on Jul 22, 2018 at 12:23 pm
15 people like this

"..how did this small, select group of individuals get this fantastic place to live, and with such a great deal on rent?" The President's Hotel is not the greatest place to live, which is probably why the rent is lower than other nearby apartment buildings. I looked at it years ago and although I could afford it, there were too many strikes against it for me to consider living there. Most rooms are just like single hotel rooms without kitchens or adequate closet space. The kitchen is a sink and a hot plate - no oven, cupboards or counter space. There is no parking available. There is a constant humming noise from the fan on the roof - typical in buildings with a restaurant on the ground floor. Lots of noise/car exhaust from University Ave. Not much ventilation in the room as there is only one window which opens onto Univ. Ave., with car exhaust from cars idling at the traffic lights. Sounds like the best thing going for it is the community the residents have built (priceless), the character of a 1920s building, and being able to walk to everything. That's it.

It's a great place for a person without a car, who eats out all the time, is a sound sleeper and doesn't require much closet space.


Online Name
Registered user
Embarcadero Oaks/Leland
on Jul 22, 2018 at 3:06 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Jul 22, 2018 at 3:06 pm
16 people like this

I don't get why people want to raise the tenants' rents and are solresentful of their relatively low rents when we keep hearing all the campaign rhetoric about "affordable" and "below market rate" housing.


Mark Weiss
Downtown North
on Jul 22, 2018 at 8:09 pm
Mark Weiss, Downtown North
on Jul 22, 2018 at 8:09 pm
16 people like this

There was another meeting Thursday July 19 in City Managers conference room on 7th floor, at 10 a.m. Who was there? What was said?
How many former staff members, besides Richard Hackman, are working on this project and or are lobbyists for developers?


Annette
Registered user
College Terrace
on Jul 23, 2018 at 6:56 am
Annette, College Terrace
Registered user
on Jul 23, 2018 at 6:56 am
22 people like this

About rents - I don't WANT to see an increase in rental rates at the Hotel President, but I do think that is likely if the new owners cannot revert to hotel status or they are required to maintain some units as apartments. We've zero protections for renters and the new owners will want to get moving on earning ROI on their $65 million investment.

I appreciate the inference that City Hall is home to a Development Lobby. It is and residents have been severely short-changed. We don't build what we do need and do build what we don't need.

But we are not without recourse. Every single voter who is concerned about the way this city is managed and governed can do the following:

1. Write City Council to voice your concerns.

2. Write City Council regarding your support for the Citizen's Initiative to change the new Comp Plan to allow *only* 850,000 new sf of office/r&d development instead of double that amount.

3. Don't vote for any incumbent who helped get us into this mess - whether that person is running for City Council or Supervisor or the Assembly.

4. Pay close attention to who is endorsing each candidate and do not vote for candidates who are supported by those who helped get us into this mess.


Random
Downtown North
on Jul 23, 2018 at 8:51 am
Random, Downtown North
on Jul 23, 2018 at 8:51 am
2 people like this

I understand the concern about displacing so many tenants, but an above commenter is right, this will disaplace them anyways because the new owners will get them out for those willing to pay more or will increase on current tenants.

The discussion in Palo Alto is frankly sad l, and borderline uninformed. The residents of the city who bark the loudest ignore all of the wonderful local businesses. The discussion need not put developers versus residents and to always pillory developers for looking to earn a return on their investment. If any of you commenters were ever employed by any business over your life, you should thank your employer and other businesses because otherwise you would have been broke and jobless.

How is complaining about a developer wanting to earn a return on an investment even an argument? This city’s residents would have you believe that developers caused all the problems in Palo Alto and that they shoulder the responsibility to make it affordable. I have an idea - everyone who bemoans low income housing leaving the city should invest their own dollars, buy a building, develop it at their own cost, then rent below market. You might not make money but at least you won’t be so hypocritical. Seems to be more than a quarter of the population. Chip in and jump into the arena rather than waste your time on this message board.


Online Name
Registered user
Embarcadero Oaks/Leland
on Jul 23, 2018 at 9:24 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Jul 23, 2018 at 9:24 am
18 people like this

"If any of you commenters were ever employed by any business over your life, you should thank your employer and other businesses because otherwise you would have been broke and jobless."

Have you driven down El Camino and seen all the RVs or checked the homeless stats lately? Being "broke and jobless" is the "mew black" and on the rise.

Our area from SF to San Jose has the highest housing prices (rentals and purchases) in the country, higher even than NYC. and it's time to stop adding offices that perpetuate the jobs /housing imbalance and push up costs even more.

Your statement might have been true decades ago when you still had companies who valued their workers back when you still had pension plans and before unrelenting outsourcing and board pressure to cut labor costs to boost shareholder returns, before companies started replacing local workers with $60K foreign contractors, before companies started "aging out" workers at increasingly younger ages to cut benefit costs.

How about supporting the residents instead of the huge local companies who keep pushing their costs onto us?


Annette
Registered user
College Terrace
on Jul 23, 2018 at 11:27 am
Annette, College Terrace
Registered user
on Jul 23, 2018 at 11:27 am
20 people like this

@Random - developers will do what developers do; no reasonable person would expect a developer to not want to make money. ROI is the game. The problem and blame rests with the City. Our Council Majority has essentially held open the door and approved more office/r&d growth than we can support. Each new approval exacerbates our impossibly bad jobs:housing imbalance. This problem is not new and it did not take us by surprise. At this point we cannot even argue that the imbalance is an unintended consequence. We are too smart for that, but that hasn't stopped the Majority from consistently approving balance-worsening office projects. That is what has to be controlled.


Bill Bucy
Registered user
Barron Park
on Jul 23, 2018 at 12:38 pm
Bill Bucy, Barron Park
Registered user
on Jul 23, 2018 at 12:38 pm
1 person likes this

I enjoy a convoluted city council conspiracy as much as the next guy, but as today's Daily Post notes, the law allows "...older buildings that are too tall or dense to comply with current zoning code to remain in use, but prevents them from changing use unless the new use complies with the current code."

The simplest solution for AJ Capital is to sell the building and sue it's bonehead lawyers for whatever it loses in the deal.

(The number of deleted posts here makes clear Palo Alto is awash in bane and bile. What fun.)


Bill
Barron Park
on Jul 23, 2018 at 2:23 pm
Bill, Barron Park
on Jul 23, 2018 at 2:23 pm
9 people like this

> The simplest solution for AJ Capital is to sell the building and sue it's bonehead lawyers for whatever it loses in the deal.

> (The number of deleted posts here makes clear Palo Alto is awash in bane and bile. What fun.)

Haha. We all know that AJ Capital will sue the City and force Palo Alto to buy the President Hotel due to misrepresentation. AJ will turn a healthy profit, as will former City staff. The City will turn around and gift the President to an affordable housing agency. Palo Alto will get no credit for developing affordable housing units. After spending millions, the mayor will continue to cry about the City's unwillingness to support affordable housing.

Like this wasn't a plan from day 1.


Oldster
Old Palo Alto
on Jul 23, 2018 at 4:10 pm
Oldster, Old Palo Alto
on Jul 23, 2018 at 4:10 pm
8 people like this

Or encourage AJ Capital to offer better move-out payments to tenants reflecting the owners carrying costs if there's more redevelopment delays. Face reality on the true worth of the building if renovated v. delay costs which can easily go 3-4 years with permit appeals. $40,000 offers to vacate instead of the paltry $3,000? What did Palo Alto and housing advocates make the Buena Vista owner offe to tenants to vacate?

Expect many tenants not to move at any price since it is their home and they are savy enough to force every delay possible. Why not a multi-phased redevelopment with some of the building being converted where vacancies exist to a small boutique hotel given the limited parking, next some slightly larger apartments with multi-year leases or even better condos to get more local apartment residents off the tenancy treadmill. That would reduce the owner's expected hoped for 50 year gold mine revenue stream from a 100% rental hotel rooms property, but they'd have a copper mine instead if the tenants and voters like the plan. A community supported phased redevelopment would be good for the City and its residents who make their homes here.

AJ Capital's 2018/19 property taxes are coming due. Tick tock. Their carrying costs go up every day.


Rob
Atherton
on Jul 24, 2018 at 9:52 am
Rob, Atherton
on Jul 24, 2018 at 9:52 am
5 people like this

$40,000 offers to vacate? Haha! These people are on a month to month lease. They should consider themselves lucky with the $3,000. I wouldn't give them a dime.


Marc
Midtown
on Jul 24, 2018 at 10:39 am
Marc, Midtown
on Jul 24, 2018 at 10:39 am
9 people like this

Re: Oldster

What is the justification for hold AJ Capital hostage? What right do the tenants have to stay there beyond the notice to vacate?

Are you saying the once someone occupy a residence they "own" it and have rights to stay there beyond any legal agreement with the property owner?

So I can rent an house in Palo Alto and then claim that I have the right to stay there as long as I want and pay as little rent as I want, regardless of any lease or legal agreement with the owner?

/marc


Oldster
Old Palo Alto

on Jul 24, 2018 at 7:41 pm
Name hidden, Old Palo Alto

on Jul 24, 2018 at 7:41 pm

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