With Election Day looming, Keller and Kou lead race for cash | November 4, 2016 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - November 4, 2016

With Election Day looming, Keller and Kou lead race for cash

Two slow-growth candidates have each raised more than $90,000

by Gennady Sheyner

In a City Council race in which conflict over campaign contributions has served as a proxy for philosophical disagreements over development and the city's future, both the pro-growth and slow-growth groups of candidates have amassed about the same total contributions. Individually, however, candidates Arthur Keller and Lydia Kou have commanding leads in funds raised.

The two candidates, who share a campaign manager, an endorsement from the Sierra Club and a taste for slow-growth policies, have each raked in more than $90,000 as of Oct. 22, according to the latest campaign-finance disclosures. This includes roughly $73,000 that each received between Sept. 25 and Oct. 22 , according to the documents — more than any other candidate has amassed all year. It also includes a non-monetary contribution, in form of polling data, worth about $10,000 from the citizens group Palo Altans for Sensible Zoning.

The strong month left Keller, a former planning commissioner, as the fundraising leader of the 11-candidate field, with $97,650 in total contributions. Kou, a longtime neighborhood activist who was 135 votes away from getting elected to the council in 2014, had $90,062.

Adrian Fine, who currently chairs the Planning and Transportation Commission and has been the target of negative ads by Kou and Keller in recent weeks, had the strongest month among the remaining nine candidates. He raised $33,114 in the last reporting period, which gave him $68,821 in contributions received by Oct. 22.

Immediately trailing Fine monetarily are three candidates who, like Fine, earned the endorsement of the California Democratic Party and the support of the Palo Alto Chamber of Commerce. Together with Fine, the three — incumbent Liz Kniss, planning Commissioner Greg Tanaka and Library Advisory Commissioner Don McDougall — are generally positioned as an alternative to candidates Keller, Kou, Greer Stone and Stewart Carl, who favor limited development.

The documents show that Tanaka raised $11,249 in the last reporting period, bringing his total to $58,572. McDougall did marginally better in the last period, raising $11,581, and ended October with $36,425. And Kniss brought in $7,999 between Sept. 25 and Oct. 22, for a total of $54,158.

The remaining six candidates have been either less aggressive or less successful when it comes to raising funds. Stone, who chairs the Human Relations Commission and who was also endorsed by the Sierra Club (as was Kniss), received $4,963 over the last reporting period, bringing his total to $6,463. Stewart Carl, who co-founded the citizens group Sky Posse, which advocates for a reduction in airplane noise, raised $2,518 in the last period and finished with $5,084.

Campaign financing has become a hot issue in Palo Alto's heated race over the past month, with supporters of Kou and Keller accusing their more growth-friendly opponents of taking too much money from developers and outside interests. Supporters of Fine and Tanaka, meanwhile, accuse their more growth-averse opponents of injecting too much cash into the council race.

A recent analysis by the slow-growth group Palo Altans for Sensible Zoning (PASZ) asserted that about 30 percent of the contributions to Fine, Tanaka, Kniss and McDougall came from people outside of Palo Alto, compared to 1.4 percent for Keller, Kou, Stone and Carl. The group also found that the more growth-friendly candidates have received, in aggregate, about 25 percent of their contributions from "developers and property interests" (this varies by candidate, however, with Kniss getting 10 percent of her cash from this category of donors and Tanaka getting 35.7 percent, according to the PASZ analysis). The slow-growth, "residentialist" candidates, meanwhile, have received only 0.6 percent of their contributions from developers and property interests.

This analysis, however, belies the fact that many of the people whom PASZ counts as "developers" are in fact architects, former planning commissioners, attorneys and real estate agents. The group's list of "developer" contributors includes former planning commissioners Dan Garber and Lee Lippert; current commissioner Michael Alcheck and Vice Mayor Greg Scharff (both real-estate attorneys); and real estate agents Leannah Hunter and Brent Gullixson. The group's decision to include real estate agents in this group is particularly puzzling given that Kou, whom PASZ has endorsed, is herself an agent.

But while the group's final figures are open to debate, it's impossible to dispute that developers have indeed been playing a larger role in the campaigns of those candidates more open to growth. Fine has benefited from contributions from several local developers, including Roxy Rapp ($1,000), Jim Baer ($500) and John McNellis ($500). He also received a $2,500 contribution last week from the California Real Estate Political Action Committee, the political arm of the California Association of Realtors.

Even with these recent contributions, however, an analysis by the Weekly shows that about $11,600 of Fine's $68,821 in contributions, or about 17 percent, came from developers. This is well below the 30 percent cited by PASZ.

Similarly, while Tanaka has received contributions from local developers, including Boyd and Lund Smith ($1,000 each) and Roxy Rapp (another $1,000), his total draw from developers comes out to less than $9,500, according to the Weekly's analysis, or about 16 percent of his total contributions (far below the PASZ estimate of 35.7 percent).

According to campaign-finance documents, Tanaka's contributions, like Fine's, come from a diverse range of sources, including former mayors and planning commissioners, architects, tech professionals, professors and residents affiliated with the pro-growth group Palo Alto Forward. Both of the candidates, along with Kniss and McDougall, have also received contributions from Santa Clara County Supervisor Joe Simitian and the League of Conservation Voters.

Similarly, McDougall's contributions came from a variety of sources including developers, business professionals and civic volunteers, including members of Palo Alto Forward. He received contributions from Brittany Davis of Palo Alto Property Management ($999); Charles King of King Asset Management ($999); Jon Goldman of Premier Properties ($886); and Steve Pierce of Zane MacGregor ($100). McDougall also received contributions from Elaine Uang and Sandra Slater, co-founders of Palo Alto Forward (they gave $500 and $250, respectively), former Councilwoman Gail Price ($100) and Elizabeth Wong ($500), whose recent effort to construct a four-story development at University Avenue and Kipling Street was struck down on appeal.

Altogether, developers accounted for about $3,500 of McDougall's contributions, or about 9.6 percent of the total received (the PASZ analysis pegged his developer contributions at $6,558, or 30.8 percent).

But residentialist candidates and their supporters aren't the only ones raising alarms about campaign contributions. On the other side of the coin, eight former mayors — including Betsy Bechtel, Bern Beecham and Larry Klein — earlier this month co-signed a letter calling huge contributions to the Keller and Kou campaigns "shocking and deeply troubling" and stating that checks for $5,000 or more are "unprecedented in our City Council elections."

With its provocative title, "Is someone trying to buy Palo Alto City Hall?," the mayors' letter insinuates that the sources of the funds are shadowy (hence the "someone") and that the donors have an ulterior motive ("buying City Hall") for their contributions.

But much like the allegations that developers are the primary funders of the Fine-Tanaka-Kniss-McDougall group, the letter from the mayors appears to be bigger on innuendo than on fact.

As the Weekly had previously reported, most of the funds that Keller and Kou had received in the past month have come from five local families who, between them, contributed more than $150,000 to the two campaigns as well as to the Palo Altans for Sensible Zoning political action committee. The contributors — Tench and Simone Coxe; Gabrielle and Thomas Layton; Asher Waldfogel and Helyn McLean; Michael and Paula Rantz; and G. Leonard and Mary Anne Baker — argued in letters, postings on the online discussion forum Town Square and interviews with the Weekly that their only objective was to level the playing field and offset the contributions that other candidates had received from developers.

Some of them are well-known in the community for their civic service — Waldfogel is a former utilities commissioner who now serves on the Planning and Transportation Commission, while Gabrielle Layton worked on the task force that created downtown's evolving Residential Preferential Parking program. Furthermore, in addition to supporting Kou and Keller, both Waldfogel and Layton made contributions this year to other candidates in the race, with Waldfogel contributing $100 to Kniss and Layton contributing $250 to Tanaka.

If the goal of the five families was to level the playing field for two of the residentialist candidates, they have more than achieved it. But when one considers the race as a clash between the two sides, the contributions are fairly balanced, with the two groups of candidates — Keller, Kou, Carl and Stone and Fine, Tanaka, McDougall and Kniss — finishing October with about $200,000 per side.

The four candidates affiliated with the residentialist camp have raised $199,259 among them, while the four favored by the Chamber of Commerce received $217,976, according to the latest campaign-finance disclosures.

The remaining three candidates have avoided raising funds altogether. Commercial real-estate broker Leonard Ely is spending $2,500 of his own money and has not received any outside contributions. Retired civics teacher John Fredrich and Danielle Martell have each submitted forms indicating that they will be raising and spending less than $2,000 on their respective campaigns.

Staff Writer Gennady Sheyner can be emailed at gsheyner@paweekly.com.

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