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Despite backlash, President Hotel owner presses ahead with hotel conversion

Original post made on Oct 30, 2019

The new owner of the President Hotel made a renewed pitch on Tuesday for converting the iconic apartment building into a hotel, even as critics continued to assail its proposal as ill-conceived and illegal.

Read the full story here Web Link posted Tuesday, October 29, 2019, 11:34 PM

Comments (27)

Posted by Help Preserve Housing
a resident of Crescent Park
on Oct 30, 2019 at 3:41 am

Thank you Palo Alto Weekly for covering this story. We need housing, not hotels. AJ Capital has no permit to convert the building and yet evicted all the existing tenants. Now we read that was part of some absurd legal maneuver that seems unlikely to even work. That alone speaks volumes as to the true character of AJ Capital.

Developers have been able to push their weight around in City Hall for years. They've ignored zoning laws and finagled huge exemptions worth millions of dollars. The President Hotel story shows the tragic consequences of letting developers run the city and flout our laws. So it's heartwarming to see outraged residents working to turn this around. Let's insist the City finally enforce its own laws and preserve the building as much-needed housing.

Posted by Resist
a resident of Another Palo Alto neighborhood
on Oct 30, 2019 at 8:08 am

It would take at least $45 million to replace the hotel's 75 units of housing while AJ would get millions of dollars for Transferable Development Rights in return for doing the seismic upgrade and historic restoration. AJ wins and Palo Alto loses. Another buyer of this building would likely do both upgrades given the value for doing so.

We don't need another hotel - more of those are in the pipeline. We need to save the housing we have. The city council and City Attorney must remember this and stand strong against AJ's schemes to convert to a hotel. The city's focus must stay housing, not on AJ's threats, end runs and profit margin.

Clearly this hotel conversion will continue to get the resistance it deserves. When you kick 70 some Palo Altans out of their homes, then also want to eliminate the homes, that seems the only appropriate response. Resist!

Posted by "donation" to TMA?
a resident of another community
on Oct 30, 2019 at 8:14 am

Aren't downtown businesses required to join and contribute to the TMA anyways? If so, sounds like AJ is trying to pose as a generouus simply paying its dues?
By that measure we should all give ourselves a pat in the back ..... comes April 15 every single year :)

Posted by Lulu
a resident of Palo Alto High School
on Oct 30, 2019 at 9:01 am

Michelle Kraus was former Hotel President tenant and was also a wanna be city council candidate back in 2016 and now, working for AJ Capital.

Steve Emslie and Richard Hackmann, both former city employees, consulting for AJ Capital.

Their PR methods are not working. The community sees through their deception.

Posted by Marrol
a resident of Embarcadero Oaks/Leland
on Oct 30, 2019 at 9:05 am

Times and demographics change. The new owners should be able to convert THEIR property into whatever best suits their needs. They have made the substantial investment, incur the liability, and as a property owner should not be dictated as to how or when to develop that investment. Nothing unreasonable about developing this property into a hotel. It's located in a commercial area. There are several other hotels in the downtown area. Why should they be denied, especially on a rental property? The current tenants have no ownership rights. If any of the critics wanted to maintain The President as a rental property then they should have outbid the current owners and bought it. If that were the case I would equally defend their right as a property owner to do so.

Posted by Marc
a resident of Midtown
on Oct 30, 2019 at 9:22 am

Why was no one upset when Casa Olga was closed and converted to the Epiphany Hotel or Palo Alto Hotel was converted to Hotel Keen?


Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Oct 30, 2019 at 9:36 am

Online Name is a registered user.

Marc, lots of people were upset about the conversion of Casa Olga into the totally under-parked Epiphany, Now we've got AJ Capital with a 200-car parking space deficit. Surely one of our virtue-signaling officials will be along shortly to tell us it's just fine for hotels to be car-light because all their guests and workers commute via broomstick.

Posted by Resist
a resident of Another Palo Alto neighborhood
on Oct 30, 2019 at 9:49 am

"donation to TMA?" above, makes a good point. AJ, according to its own material, will make a "charitable contribution" to the Transportation Management Association (surely TMA is not a legal charity.) But elsewhere in the material it says it will pay into the TMA to help for transportation alternatives for employees. It's PR double-dipping.

Also noted is AJ needs the city council to approve its Parking Transportation Management Program -Ah Ha! Now we see what this giving to TMA is really about. AJ makes just one payout to TMA to try to make us think it is full of beneficence, while really it's all about getting its lousy project approved.

Finally, so disappointed that Downtown Streets Team folks had a table there, handing out sox for attendees to distribute to homeless people. What a gobsmacking irony for a group that helps the homeless to be supporting AJ by by participating in its open house. The very tenants that it displaced were there confronting AJ, and Streets Team was offering sox.

Posted by Anon
a resident of Another Palo Alto neighborhood
on Oct 30, 2019 at 11:32 am

Posted by Marrol, a resident of Embarcadero Oaks/Leland

>> The new owners should be able to convert THEIR property into whatever best suits their needs.

Wrong. Every property owner (e.g., you, or your landlord, me, or my landlord) is subject to zoning. Don't like the zoning in town A? Move to town B. You were speaking in generalities, so, I'm answering in generalities. Note that the city of Houston, TX, famously did not have zoning. OBTW, instead, they used "covenants"** to contractually restrict property use in much the same way as zoning. Because, most people don't want to buy a house next to an orchard and then have the owner build a pig sty. Even people who like pork don't necessarily want to live next to a pig sty. (The classic zoning example.)

Posted by Marc, a resident of Midtown

>> Why was no one upset when Casa Olga was closed and converted to the Epiphany Hotel

You are kidding, right?


** Web Link

Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Oct 30, 2019 at 11:39 am

mauricio is a registered user.

When voters keep voting in council members who carry water for developers, they shouldn't be surprised at what follows. Voting for candidates because of name recognition in spite of their voting record and letting them get away with falsely representing their platform help to diminish democracy. The chickens are coming home to roost because voters aren't educating themselves before they vote.

Posted by Barbara
a resident of Downtown North
on Oct 30, 2019 at 12:39 pm

Let the hotel conversion be a "GO"!! Why more housing? With it comes more autos which overgrown Palo Alto does NOT need!

Posted by Hotel occupants use autos.
a resident of Duveneck/St. Francis
on Oct 30, 2019 at 1:00 pm

Hotel occupants use autos. is a registered user.

To Barbara,

People who stay in hotels don't use autos? Uber, cab, Lyft trips count as an auto well as limo pick-ups from nearby companies.

NYC is drowning in these trips. It's a problem that city is struggling to manage.

Posted by Let me see
a resident of College Terrace
on Oct 30, 2019 at 1:23 pm

We have a big problem with downtown congestion but AJ Capital is proposing valet parking which doubles the traffic impact!

Posted by commonsense
a resident of Professorville
on Oct 30, 2019 at 3:22 pm

commonsense is a registered user.

It was idiotic for AJ to buy this thinking approvals would be easy. However, it’s not fair to vilify them for trying to turn what was originally a hotel back into a hotel. The housing crisis is not their making and losing 70 units will have minimal effect on the problem. PALO alto needs to spend more energy on approving more housing and increase the height limit. Otherwise, This is all just noise and the affordability issue will continue for many decades

Posted by Midlander
a resident of Midtown
on Oct 30, 2019 at 4:58 pm

Midlander is a registered user.

Dear Palo Alto Online,

Roughly how many people were present at the protest? From the photos, I can count about six (including the dog). Is that way off, or in the right ballpark?

The size (or lack of size) of the demonstration doesn't really affect the core issues, but if you're going to mention a protest, it would be helpful to have a sense of scale.

Posted by Citizen
a resident of Community Center
on Oct 30, 2019 at 9:28 pm

No, more housing is not what we need. We have a housing affordability crisis, not a lack of housing. And a lack of income. As the article mentions,these former president hotel tenants found places to live. It's just that they have to pay more, and of course they prefer to pay under market. Well, they were lucky to pay under market for years. Maybe they could count their blessings.

Posted by I was there
a resident of Evergreen Park
on Oct 30, 2019 at 11:05 pm

Midlander,the photos are misleading, there were quite a number of protesters there before the meeting, then some left and others arrived. Some went in to the meeting, then came out and joined or chatted with the sign-holders. I would guess a total of 25.

Posted by Greenacres
a resident of Green Acres
on Oct 30, 2019 at 11:42 pm

All I can do is shake my head. If Palo Alto housing advocates were a little more willing to think about how conditions have changed in the new Bay Area tech economy, they would realize that protecting affordability means *protecting* and strengthening, not weakening zoning.

Housing spots are not interchangeable with displaced low- and regular-income people. The fact that AJ Capital clearly believed it could defeat zoning is the only reason those longtime residents lost their homes. Redevelopment is brutal when it comes to displacement. Even if they don't build a hotel, any housing that goes there now be for high-income, new tech workers, with a few scraps for people who are designated low-income but probably making more than the people who were booted. Advocates will be appeased because they think (sadly, delusionally, and despite all evidence to the contrary) that density is a proxy, always, for affordability. There is no way to reverse this now, and that's a terrible shame.

Posted by Me 2
a resident of Old Palo Alto
on Oct 31, 2019 at 9:55 am

"I would guess a total of 25."

LOL. In a town of over 67,000 residents, less than .04% of the population showed up to protest.

Posted by I was there
a resident of Evergreen Park
on Oct 31, 2019 at 12:46 pm

Me too, meaningless comparisons to make you sound educated.
Most people didn't even know about this charade and aren't likely to go out on a cold evening to demonstrate.
But they do recognize a greedy, heartless, corrupt, developer.

Posted by Anon
a resident of Another Palo Alto neighborhood
on Oct 31, 2019 at 1:02 pm

>> "Advocates will be appeased because they think (sadly, delusionally, and despite all evidence to the contrary) that density is a proxy, always, for affordability. "

No amount of actual evidence seems to convince these folks. It seems to be a new kind of religion. I just wish they could focus their love of high-rises on some location where people actually want the high-rises, and are willing and able to pay the rent in those new high-rises. Of course, in one location I happen to know something about, the majority of units are owned by investors who live in other places. "Supply and demand" actually does work, it just doesn't work the way they think it does.

Posted by Vip
a resident of Adobe-Meadow
on Oct 31, 2019 at 5:21 pm

Me2- it got big coverage in the weekly because winter Dellanbach was there protesting. She is a PA weekly preferred VIP.

Posted by Mark Weiss
a resident of Downtown North
on Oct 31, 2019 at 9:52 pm

Mark Weiss is a registered user.

Did they have an Anne Bancroft impersonator seducing a Dustin Hoffman double?

Posted by Revolving Door
a resident of Another Palo Alto neighborhood
on Nov 1, 2019 at 6:33 am

The perfidy of Michele Kraus is noted, but a related issue was missed - that of Steve Emslie and Richard Hackman. Both are former Palo Alto city employees and both sold their services to AJ Capital to grease the skids for getting rid of the tenants and converting to hotel use.

So we paid these two to work for us, they gained valuable experience doing so, walked through the revolving door, then sold that experience, their contacts, knowledge, and souls to the AJ bunch.

So how's that going for you, Steve, Richard and Michele? Over 70 tenants kicked out of their homes, first application to the city to convert denied, major legal obstacles and community opposition facing you, and bungled PR with local non-profits. I'd say some well deserved karma is catching up with you.

Posted by anon
a resident of Evergreen Park
on Nov 1, 2019 at 9:46 am

Sure the local turncoats look bad, but the real culprit is AJ capital and whatever city staff and/or electeds lead AJ to believe their scheme was in any way legal.
So lets get to the bottom of that....maybe the Weekly can investigate?

Lets not forget when Jim Keene without any authority to do so "sold " a public park to Palantir for two weeks for a TINY sum!
Astonishing what we put up with in this city.

Posted by Citizen
a resident of Community Center
on Nov 1, 2019 at 10:28 am

I'm sorry, but these are rental apartments. The owner changed hands. The owner wants to repurpose the property for another use. It's unfortunate, but lifelong access and use of someone else's property is not a guarantee.

Posted by PAer
a resident of Crescent Park
on Nov 1, 2019 at 10:48 am

Very sad that the very people that have blocked any sort of real housing growth in Palo Alto are now crying that this hotel is being converted back to a hotel. Rather than fighting development and building housing over the past 60 years, they stand in the street and protest, then drive back to their mansions in cresent park. if they really cared they'd be rent out extra rooms for the displaced folks, but nope. they don't care about the evicted, they care that it may take them an extra minute to find a parking place.
seeing as even the a mediocre Hilton is $500 a night on week nights, I think Palo Alto could use several new hotels.
The rent is too damn high and you'all know who caused it. Hint -- it's not the developer nor the city council.

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