In a perfect demonstration of what is wrong with Palo Alto city government these days, an attempt to sneak through a series of actions that would pave the way for the new owners of the President Hotel Apartments to proceed with their hotel project has quietly appeared as the last agenda item on Monday night's penultimate City Council meeting of the year.
With an agenda description that is indecipherable and doesn't mention the relevance to the President Hotel proposal, the city staff is asking the council to dispense with normal review by the Planning and Transportation Commission and rush to adopt changes to the zoning ordinance that were secretly requested by A.J. Capital, the boutique hotel company that is in the process of evicting the last remaining tenants from the President.
The staff report buries any reference to the President Hotel controversy and neglects to disclose that each of the proposed zoning changes was demanded by A.J. Capital as part of a scheme that also sought to squelch continued opposition to the conversion by the remaining tenants.
It also deceptively attempts to hide the real intention by citing as an example a restaurant wanting to convert to a retail store, as if that was a pressing problem deserving urgent council action. The proposed new ordinance isn't about restaurants or retail stores. It's about the President Hotel Apartments.
According to reporting by Weekly reporter Gennady Sheyner, who obtained previously undisclosed city documents and emails through a Public Records Act request, A.J. Capital has pressured the city staff to get the zoning changes approved by Dec. 18, the day after the last City Council meeting of the year. And for reasons that no one has yet explained, the staff has followed A.J.'s roadmap to a T.
Over the last two months, with the city staff's knowledge and after private consultations with Councilman Greg Scharff, A.J. quietly approached all the remaining tenants in the apartment building offering them a deal that would give them several months of additional occupancy at reduced rent, plus additional relocation money, in exchange for their silence, but conditioned on the council approving by Dec. 18 the needed zoning changes that would allow A.J. to move forward unimpeded in its conversion of the 75-unit apartment building back to a hotel.
The zoning changes needed by A.J. Capital are the lifting of the current cap on downtown commercial development and the elimination of "grandfathered building" provisions that prevent a change in the use of a property that is not in compliance with today's zoning rules. What's more, A.J. wants an exemption from parking requirements.
There is legitimate room for debate on each of these proposed changes had they come before the city in an appropriate and transparent way, followed normal procedures for consideration by the planning commission and absent a manipulative tenant agreement designed to take advantage of and buy the silence of the tenants. The involvement of former senior-level city staff members as paid consultants to A.J. Capital has done nothing but raise suspicions of deals crafted behind the closed doors of City Hall conference rooms.
A disingenuous attempt has been made to suggest it's merely a coincidence that these zoning changes were scheduled for the final meetings of the year while citizens are distracted by the holidays and a new seven-member City Council potentially less sympathetic to A.J. Capital will be seated in January. (One, the downtown cap, has been moved to a January agenda, according to City Manager Jim Keene.)
City staff, Mayor Liz Kniss and whomever else was involved were wrong to rush this proposal forward and allow the city to become a supporting actor to the three-way deal A.J. Capital is trying to pull off. Instead of facilitating a conversion in use that will sacrifice 75 units of housing for the creation of another hotel, the city should instead be taking advantage of the current zoning rules to block this conversion.
Unfortunate as it is that current tenants are being displaced, earlier council action already requires that substantial relocation assistance be paid to them by the new owner. If the City Council truly believes that it didn't go far enough in helping evicted tenants, it would be far smarter for the city to pay those few remaining tenants additional relocation benefits than to give A.J. Capital the gift, worth millions of dollars, of zoning changes that will enable the elimination of badly needed housing.
This staff proposal should never have made it onto the council's agenda and should be pulled or resoundingly rejected. The city doesn't need another late-night controversial decision in the waning days of the current council. If nothing else, the results of the Nov. 6 election should have made that very clear.