Requests for public records irk mayor

Posted on Sun, Mar. 27, 2005
Internal Affair - San Jose Mercury News

San Jose may have just saved about $2 million re-doing a technology contract for the new City Hall that was tainted with favoritism for Cisco Systems. But even that taxpayer money now back in the bank apparently didn't warm Mayor Ron Gonzales to the handy tool used to recover it -- the Public Records Act.

With the city council working last week to mop up yet one more part of the Cisco mess (making sure city officials actually do comply with state records law next time and don't hide or delete tattletale e-mails), Gonzales delivered a disdainful soliloquy Tuesday from the dais. It made clear as never before the mayor's contempt for forcing city workers to spend inordinate amounts of time looking through files, phone records and e-mail boxes to share documents with the public.

``I'm beginning to think the Public Records Act is a misnomer. It really needs to be changed to the media-plaintiff- attorney's-rejected-bidders-Record Act,'' Gonzales said, ``because when you look at the requests we're getting nowadays, and I'm not talking about someone walking into the City Clerk's Office and getting a copy of the agenda, that's common. I'm talking about stuff that requires huge amounts of work be done.''

Gonzales complained that with more records requests taking hours and hours to fill, the city in the near future may have to pay to create an entire new department just to deal with records requests.

Given such an expense, Gonzales said, ``I just wonder at what point does the Public Records Act get in the way of serving the public?''

The mayor's remarks left some with their mouths hanging open.

``I'd tell the mayor that the time spent complying with the Public Records Act is money well spent for his constituents,'' said Peter Scheer, executive director of the California First Amendment Coalition.

``I think taxpayers understand that sometimes there are things the government never wants us to know. Sometimes when they're discovered, bad deals get undone and taxpayers save a lot of money -- as they did with Cisco.''

http://www.mercurynews.com/mld/mercurynews/news/local/11243338.htm

San Jose also seeks public records

March 27, 2005
Internal Affairs - San Jose Mercury News

It's always interesting when an attorney complains of legal harassment. That's what Santa Clara County's top lawyer, Ann Ravel, says San Jose is committing as the city presses ahead with its lawsuit to block the county's fairgrounds theater project.

Ravel says the city's latest request for information -- down to the driver's license -- about every county official who years ago helped negotiate a land-use policy now at the heart of the theater dispute is just a naked attempt to bury her office in busywork.

``It's apparent to me that this is solely for the purpose of harassment,'' Ravel said. ``They are abusing the process of the court.''

San Jose, which fears the fairgrounds theater will hurt chances for a downtown music venue, claims a 1983 land-use agreement revised in 1993 and 2001 required Santa Clara County to get the city's OK on the project.

Ravel says the city's request is a waste of government time and taxpayer resources because the city has its own records of the joint meetings on the land-use policy. And the dispute is more over the nature of the fairgrounds theater project than the intent of the land-use agreement, she said.

``The city was a participant in all those conversations,'' Ravel said. ``Every meeting involved city staff and county staff. They're asking us to get an enormous amount of information they already have. And not only that, they don't really need it.''

San Jose City Attorney Rick Doyle said he was ``dumbfounded'' by Ravel's complaint, and that the county has made similar requests.

``We're trying to get to the intent around this provision, which is the heart of this case,'' Doyle said. ``There's nothing vexatious or abusive.''

No trial date has been set, but the feuding lawyers are scheduled to appear before a mediator April 26 to try to settle the case. Interestingly, some players in this drama have swapped sides. Doyle notes that Ron Gonzales signed the policy's 1993 revision as county board chairman and its 2001 version as San Jose mayor. Jim Beall signed the 1993 version as a San Jose councilman and the 2001 revision as a county supervisor.

Marketing approach for chief job flops

http://www.mercurynews.com/mld/mercurynews/news/local/11243338.htm

San Jose RDA asks rule shift

Timothy Roberts
Published: March 21, 2005
------------------------------------------------------------
The San Jose Redevelopment Agency is lobbying the state legislature for
two bills that would allow the RDA to extend the life of its most
prosperous development district by 10 years and allow it to create new
redevelopment zones around rail and transit stations.

One bill would give the agency the ability to sell bonds once again for
its North First Street district, which is home to some of Silicon
Valley's most widely known technology companies, including eBay, Cisco
Systems Inc., and BEA.

The other would create one-quarter-mile redevelopment zones around rail
transit stations, although San Jose is pushing to have the radius
extended to one-half mile. The legislation is being pitched as a help in
solving California's chronic housing shortage, a popular political
cause. But it is likely to run up against opponents of the widespread
use of redevelopment powers, who see the agencies as arrogant and
aggressive.

"This would turn the city upside down," says Dale Warner, a retired
lawyer who is president of the Independence High Neighborhood
Association in northeast San Jose. "It would really empower RDA."

Redevelopment officials acknowledge the challenge that lies ahead.

"It's difficult to extend the life of a redevelopment zone unless you
can make a very good case," says RDA Assistant Executive Director Sharon
Landers. "We look at this as something that is critical to our
community."

The bill granting the 10-year extension was filed by Assemblyman Joe
Coto, D-San Jose. The San Jose Redevelopment Agency is adamant that the
bill is not just to benefit San Jose, and it is worded to affect all
agencies statewide.

"The bill is broader than just San Jose," Ms. Landers says.

But statewide, the legislation is seen as an effort to keep San Jose's
cash cow alive.

"This is a San Jose bill," says John Shirey, executive director of the
California Redevelopment Association.

San Jose does have a good reason for pushing the bill. The city wants to
redevelop its North First Street technology boulevard to accommodate 20
million square feet of new research and development and office space,
30,000 new housing units and 68,000 new jobs. But to spark that
development, the city estimates that it needs to spend about $500
million to improve roads and other infrastructure. A new lease on life
could provide much of the funding, although there is no official
financial projection, the RDA says.

Redevelopment agencies derive their income from tax increment funding,
which is based on the increase in property values and the taxes paid on
them after an agency creates a redevelopment district. The efforts of
the agency are expected to improve an area, and property values are
expected to rise as a result.

At its peak early in the decade, the San Jose Redevelopment Agency was
receiving $198 million annually in tax increment. And three-quarters of
that money came from its North First Street redevelopment zone.

The economic slowdown and a drop in property values has reduced that
income to an estimated $150 million in the current budget year, and just
two-thirds of that amount comes from North First Street.

Born in the 1950s, redevelopment agencies were designed to clean up
blighted areas. But cities have found an increasing need for
redevelopment as they have struggled to keep downtowns alive, meet the
need for housing and attract industry. They have convinced the
legislature to extend their lives, in part by redefining the blight they
were to clean up.

San Jose's redevelopment agency, the largest in the state in terms of
revenue, has some looming deadlines. The taxing authority of the lower
part of the North First Street redevelopment zone expires in 2025. The
newest, most northern part, in what is sometimes called the Golden
Triangle, expires in 2033. The redevelopment agency usually sells
30-year bonds. Now that it no longer has the ability to guarantee the
revenue stream for the full term, the agency is unable to sell any new
bonds.

The legislation that would allow redevelopment areas around rail transit
stations comes from state Sen. Tom Torlakson, D-Antioch, an advocate of
so called smart growth policies that encourage the development of
housing and jobs near transportation.

"This kind of growth is better for California, healthy for the economy
and good for families," Mr. Torlakson says. "Longer and longer commutes
to far away suburbs is wearing people down."

Because redevelopment agencies are only supposed to be in the business
of eradicating blight, the Torlakson bill redefines blight to include
low-density areas around transit stations.

The California Redevelopment Association has mixed feelings about
changing the definition of the word "blight."

"That's not to be done lightly," says Executive Director John Shirey. He
notes that redevelopment agencies are frequently criticized for defining
"blight" broadly so they can create new redevelopment zones. "People
won't intuitively agree that lack of density is blight."

The Redevelopment Association also is concerned about a provision in the
Torlakson bill that would require state approval of plans by local
redevelopment agencies for transit stations.

"We are not about to enter into some sort of arrangement where RDA
projects are subject to state review and approval," he says.

Moreover, he says, the state needs to take a comprehensive look at how
to increase the supply of affordable housing at a time when, according
to the California Association of Realtors, only 18 percent of California
residents can afford to buy a median-priced home. Piecemeal legislation
nipping at the edges of the problem may not be the solution, he says.

"What is really gong on here is a real struggle over what it is we do
about our housing crisis," Mr. Shirey says.

This article can be found at http://sanjose.bizjournals.com/sanjose/stories/2005/03/21/story1.html

Report paints grim picture of North San Jose redevelopment

Silicon Valley/San Jose Business Journal
Sharon Simonson
Published: March 21, 2005
------------------------------------------------------------
The redevelopment of North San Jose into a far denser, more urban area
supporting thousands more jobs and residents means notably dirtier air
on a local and regional basis and worse traffic congestion at 51
intersections in San Jose and three neighboring communities.

Such are some of the major conclusions contained in a nearly 500-page
draft environmental impact report issued March 10 by the City of San
Jose about its plans to re-make nearly 5,000 acres along North First
Street into a high-density, industry-centered urban village.

To help mitigate these impacts, employers in the area would be expected
to provide on-site child care and showers and lockers for workers who
choose to walk or bicycle to the office. Home builders would be prodded
to include retail in their developments to reduce resident drive-times
and to provide "telecommute centers" in or near their homes.

These and other proposed measures wouldn't do much to lessen the
negative impact on the region's air quality, however, nor is there much
to be done to prevent the even greater interstate congestion that the
development would produce, the EIR says.

Meanwhile, some North San Jose home owners, including those in
single-family homes in established suburban neighborhoods, would have
more noise and cut-through traffic as motorists use residential streets
to avoid delays on larger thoroughfares. This impact, too, would simply
have to be tolerated, because little could be done to stop it.

Frank Jesse, real estate and corporate services vice president for BEA
Systems Inc., speaking at a March 3 business community luncheon at which
city leaders explained their North San Jose plans, questioned city
assumptions that employers and employees in the area were looking mostly
for high-density, entry-level, rental housing for short-term stays.

Housing costs and the quality of kindergarten through 12th-grade
education are two of the primary issues that software maker BEA faces as
an employer in Silicon Valley, Mr. Jesse said.

"We need neighborhoods, not just housing stock," he said, noting that
developments of 55 units to an acre would not seem to encourage putting
down family roots.

In addition, he questioned the city's plans to finance more than $500
million in needed transportation improvements in the area largely with
private dollars.

At the same luncheon, city staff estimated that $7,000 would be added to
the cost of every new single-family home in the area and $5,600 would be
added to every unit in a multifamily development to pay for roadway and
other transportation upgrades. Industrial developers would face charges
of nearly $10.50 a square foot.

"What level of infrastructure costs can we expect builders to pick up?
It all goes to the price of a house," Mr. Jesse said.

The city anticipates 32,000 new homes and 83,000 new jobs in 26.7
million square feet (about 613 acres) of new industrial development in
North San Jose, according to the EIR. By way of comparison, the city is
proposing 50,000 jobs and 25,000 homes on 3,500 acres in largely
undeveloped Coyote Valley.

The city is promulgating the North First Street changes in an effort to
shore up its finances and the struggling local economy. It wants to
capitalize on North First Street's reputation as a mecca for industry
and technology by encouraging redevelopment of the area for what it
believes will be the next generation of business users.

Right now, a third of the commercial properties in the area are
obsolete, according to city officials, and will never again be occupied
by the type of tenants for which they were built -- primarily
manufacturers.

That obsolescence has led to high vacancy rates in the area, which is
undermining city finances and those of the San Jose Redevelopment
Agency, which draws a preponderance of its tax revenue from assessments
on the properties. Many of those properties have lost value.

The plan also calls for the conversion of as much as 285 acres now
earmarked for industrial use into high-density housing -- in some cases
at a minimum of 90-units to an acres. Residential developers have
clamored for sites to build homes over the last three years as record
low interest rates ignited a home-buying frenzy here and across the
country.

The North First Street revisions are part of a large mosaic of changes
that the city of San Jose is pushing for land use within its borders to
prepare for population growth and, perhaps more importantly, to
encourage private-sector re-investment.

A similar EIR is due out for downtown San Jose almost any day. That EIR
will examine the premise of expanding industrial and residential
development capacity in an enlarged downtown district.

EIRs are also being prepared for proposed redevelopment plans in
Edenvale and Coyote Valley.

This article can be found at http://sanjose.bizjournals.com/sanjose/stories/2005/03/21/story5.html

Economic effect still isn't clear

Silicon Valley/San Jose Business Journal
Sharon Simonson and Timothy Roberts
Published: March 21, 2005
------------------------------------------------------------
The new $388 million San Jose Civic Center is scheduled to open downtown
this fall and spark an economic revival on East Santa Clara Street, but
that won't be soon enough to help copy shop owner Vien Tan.

Mr. Tan, whose Tan Tien Publications sits in the shadow of the 18-story
edifice, is moving. His business is eeking out sales of less than $200 a
day, and he has lost faith in the city's plans for economic rejuvenation
of the area, once populated primarily by Vietnamese-owned businesses.

"For the last couple of years, the economy has been going down, and then
we've had all of this construction, and we don't have any parking any
more ... " he says. "We've lost so many customers."

With just six months to go before it opens, the new Civic Center has
spurred little of the private-sector investment promised by city
officials and downtown boosters. Only two developers have revealed plans
to capitalize on the city's investment: Barry Swenson Builder and Los
Gatos developer Michael Shadman. The Swenson firm and the First United
Methodist Church hope to build a 140-unit high-rise condo building at
Fourth and East Santa Clara streets. Mr. Shadman is planning a
medium-rise office building on Fourth Street facing the Civic Center and
condominiums facing Third Street.

From the start, a new City Hall downtown was sold as an
economic-development tool. In 1996, for instance, the campaign for a
ballot measure to allow the city to move its offices from North First
Street to downtown, proponents said it would boost business.

The city used the San Jose Redevelopment Agency to buy and clear the
land for the new Civic Center. But in 2001, the California Court of
Appeal ruled that redevelopment agencies could not participate in
building city halls. The Civic Center had been included in a 32-acre
redevelopment project "intended to revitalize and stimulate growth," the
court wrote.

In 2002, when the city had to defend its choice of a move downtown, the
city manager's office declared, "This site was selected because of its
location and ability to attract private development to this area of
downtown."

In a memo to council members at the time of the challenge, Mayor Ron
Gonzales said the new civic center would save money, improve services
"and support long-term community development goals."

Mr. Gonzales did not respond to requests for an interview for this
article.

Eighth-District Councilman Dave Cortese, however, argues for a longer
view, saying that long-time downtown property owners are holding on to
their land until just the right moment, a moment that will come sooner
because of the stimulus effect of the Civic Center.

"It'll happen," he says. "I think there is generally a delayed reaction
(to projects like this one)."

But so far the new $385 million Civic Center is proving anything but an
economic stimulus for the retailers at its flanks. Three of the 11
storefronts in Mr. Tan's tiny strip center are vacant. An eyewear store
next to Mr. Tan's business closed 14 months ago and the space remains
empty; a second store closed in the last month. A third storefront has
been empty for more than a year. A worker in a beauty parlor two doors
from Mr. Tan says they're also contemplating a move because business is
so bad.

Visitors to the Albertson's directly east of City Hall are unlikely to
see improvements to that store's appearance soon either. A spokesperson
for the Idaho-based grocer says a mid-2003 company promise to invest $4
million to upgrade the tired, 31,000 square-foot store is no longer in
the offing. She declines to say if concerns about returns on that
investment are an issue but does say it's a factor in any such decision.

The new City Hall "is definitely a step in the right direction," says
Quyen Ha of Albertson's public affairs office, but the company is unsure
about putting its own money to work nearby. "We still remain committed
to having productive conversations," she offers.

A search of 144 parcels on 12 blocks surrounding City Hall, done
exclusively for the Business Journal by Stewart Title Co. to identify
ownership changes, shows no flurry of commercial property sales in the
last five years, contrary to expectation were there private investors
anticipating an economic bounty.

Not everyone at City Hall is a believer.

"The economic impact was oversold," says council member Chuck Reed. "We
always argue according to the Big Bang Theory and there is no big bang.
You have to do it piece by piece and block by block."

"I've never believed it would be a catalyst for new development," says
Linda LeZotte, the council member representing the 1st District. But,
she adds, the 1,700 city workers will bring cash to spend on lunches and
dinners when the building opens this fall.

There is a respectable argument to be made -- and City Hall proponents
are making it -- that it's too soon to evaluate the economic impact.

"The market is waiting to see what opportunity arises from having 1,800
new people working downtown," says John Weis, deputy executive director
for the San Jose Redevelopment Agency.

"I personally think that City Hall will open and everyone will be
flabbergasted at how wonderful it is. People will be drawn to it and the
public space out front and will say, 'This is a great thing,'" he adds.

Other developments around the site are bound to help, says Scott Knies,
executive director of the San Jose Downtown Association.

"I think the perspective for East Santa Clara Street is not just about
City Hall. I think you also have to think about BART going down Santa
Clara Street and what the expansion at San Jose State University means
and the redevelopment of the (San Jose Medical Center) site," he says.

Silicon Valley appraiser Norm Hulberg says there have not been enough
property sales in the area to statistically establish whether values
near City Hall are changing. He adds, however, that City Hall, as a new,
state-of-the-art structure, is far better for values than the buildings
that previously occupied the Civic Center site.

"They tore down a lot of very old, very modest structures and are
putting up a very modern expensive structure. There's no question that
has a favorable influence on surrounding property values," he says.

But even a $388 million City Hall designed by world-renowned architect
Richard Meier can't create demand for new office towers. Residential and
retail development nationally is hot; office towers are not. The capital
of Silicon Valley is no exception.

Downtown developers of high-rise condominium towers are falling all over
themselves to put up nearly a dozen towers, including the two next to
City Hall. Atlanta's Cousins Properties is building a 360,000
square-foot retail power center anchored by Target immediately north of
downtown, partly in anticipation of the shopping needs of the thousands
of new downtown residents.

In contrast, with a quarter of the office space downtown vacant, no
developers are moving forward with new downtown office construction.

Randy Shortridge, a vice president, urban designer and architect for
RTKL Associates in Los Angeles, says mostly what City Hall needs, if
it's going to work any magic, is time. RTKL has a long history in
downtown San Jose, helping design master development plans more than 20
years ago and more recently helping Hollywood's CIM Group with its
downtown retail and housing developments.

"Is economic growth going to happen just because of City Hall?," he
says. "No. But will it happen because of City Hall and the museums and
public spaces?

Yes.

"But it will take 20 or 30 years."

This article can be found at http://sanjose.bizjournals.com/sanjose/stories/2005/03/21/focus2.html

Could it be that these are the good old days?

Published: March 21, 2005
Silicon Valley/San Jose Business Journal
------------------------------------------------------------
It should have been a good week over at San Jose City Hall.

City Council approved a deal with Nortel Networks that should close the
book on the Cisco scandal. Nortel says it can meet all deadlines so the
new building is moving along roughly on schedule and on budget. There
also was agreement on limiting council fundraising, an effort to avoid
further ethical questions.

This is all good government, right? So why does it seem as though city
government is reactive, always on the defensive and the decisions are
all being made for the wrong reasons?

Ever since problems surfaced with the Cisco bidding, the talk on the
street has been that the city handled the whole thing badly. Sure, that
was no way to bid a contract. Nobody blinked when heads rolled, although
the cost of that decision is still to be determined.

But in the end, the local company that is the industry leader lost the
job. How can that be the desired result?

Hindsight is always 20-20. But what would have happened if the city had
taken the offensive and said 'hey, we built a bidding system that awards
bonus points to local vendors and in the final analysis we're damn glad
Cisco won.'

It would have taken a bold bit of leadership. But then, isn't that what
we have a right to expect from the people we elect to lead the
community?

It won't be long until voters get a chance to elect new leadership for
San Jose. The candidates have started announcing their intentions and
more will enter the race.

We'll keep our eyes open for one who displays enough backbone to
exercise leadership and withstand the harsh winds of transitory public
opinion. Having the smile -- and connections -- to win friends shouldn't
be enough. And it's not too much to ask that the next mayor have both.

Commuters be damned

The Environmental Impact Report on plans to increase density along San
Jose's North First Street contains some sobering information. If the
Redevelopment Agency pushes through the plan, we'll be breathing dirtier
air and sitting in traffic much longer on the way to and from work.

And apparently there is no cure, only expensive steps to mitigate the
damage.

If this is progress, we're not convinced it's worthwhile.

The city certainly needs a plan for serving the businesses that will
create the next big thing, providing better mass transit and improving
the housing situation. But can't we do one thing well rather than many
poorly?

At the risk of sounding like a broken record, it'll take an act of real
leadership for some official to pull the brake on the Redevelopment
Agency's freight train to the future. But it's starting to feel like
some of this progress comes at too high a cost.

This article can be found at http://sanjose.bizjournals.com/sanjose/stories/2005/03/21/editorial1.html

City seeks to prolong agency's cash cow

By Tracey Kaplan

Mercury News

Thirty-one years ago, the joke was that the only blight city officials could find in rural North San Jose was pear blight.

But under state law in 1974, the city was able to declare the area blighted and begin funneling into its downtown redevelopment effort millions of dollars in tax revenue from Cisco and other high-tech firms that gradually replaced the orchards.

Today, the blight rules have changed, so much so that now-industrial North San Jose won't qualify as a redevelopment district beginning in 2025, when the current designation is set to expire. No blight means no redevelopment area -- and no special tax money to pay for that redevelopment.

So, what's a city with the largest redevelopment agency in the state to do? Especially when it needs $520 million for traffic improvements if it is to turn North San Jose into a second downtown with high-rise office towers?

It will lobby the state Legislature, of course, to extend the life of the project area for 10 years so it can keep generating the vast bulk of the San Jose Redevelopment Agency's annual revenue. Assemblyman Joseph Coto, D-San Jose, has agreed to sponsor AB 1472 to do just that.

Just to be safe, the city also will back a separate bill to create new redevelopment zones around rail stations because North San Jose happens to be bisected by a light rail line. State Sen. Tom Torlakson, D-Concord, wrote SB 521 to create such zones within a quarter-mile of rail stations and may expand the proposed radius to within a half-mile at San Jose's request.

And both bills would establish new criteria for blight.

``Without blight, you can't get an extension of a project area,'' said Sharon Landers, the RDA's assistant executive director. ``So we're trying to create an alternate definition of blight.''

Under a 1993 state law, a redevelopment zone area must be blighted physically as well as economically. That's a tough sell in North San Jose, where nearly a quarter of the office buildings are vacant, but not dilapidated or out of compliance with the building code.

``Could you start from scratch today and call buildings like that today blighted? Well, no,'' said John Shirey, executive director of the California Redevelopment Association.

New definitions

Torlakson's bill would change the definition of blight to include the lack of high-density development around rail. Coto's bill is still being drawn up, but the criteria could include any economically depressed area in the state with outdated buildings.

Bill Fulton, publisher of the California Planning & Redevelopment Report, noted that other states do not force cities to tie redevelopment to blight.

``Maybe we could give up on the fiction that everything has to be blighted,'' Fulton said. ``A big policy question is why not allow urban redevelopment for the sake of stimulating the economy rather than bending the definition of blight?''

Aside from the blight question, though, both bills face an uphill battle, largely because California needs every tax dollar it can get, and redevelopment areas produce millions of tax dollars.

Redevelopment agencies are funded by extra property taxes generated by new development within a designated zone. In a designated redevelopment district, the redevelopment agency gets that money. Absent that designation, the state gets most of it, and the state is in no mood to pass up money.

`Significant problems'

``Any bill that costs money has significant problems, given the state's finances,'' said Robert Oakes, Torlakson's spokesman.

In San Jose's case, the 10-year extension on the Rincon area, including North San Jose, would allow the agency to net an estimated $500 million to help pay for transportation improvements to North San Jose. The council will vote this summer whether to approve new rules that would allow enough development in North San Jose to house 83,300 new workers and more than 56,000 new residents in high-rise office towers and densely clustered apartments and condominiums.

The Rincon area has long been the agency's economic engine, generating about $100 million of the agency's $150 million annual revenue.

Redevelopment is more popular in San Jose than it was before 1999, when the city began using some of the revenue to upgrade existing neighborhoods. But some still oppose the extension.

``RDA seems like a self-sustaining monster,'' said Dennis Umphress, president of the Silicon Valley Taxpayers Association. ``It has too many fingers in too many pies. It's too controlling, and citizens aren't getting much bang for their bucks.''

But a spokeswoman for Coto said the extension is warranted.

``It would create more jobs and more housing,'' said Lorraine Guerin, Coto's legislative director. ``The assemblyman believes it would be good for the whole economy of San Jose.''

--------------------------------------------------------------------------------
Contact Tracey Kaplan at tkaplan@mercurynews.com or (408) 275-0140.

This article can be found at www.mercurynews.com

Building Confidence in Local Government

Commonwealth Club Silicon Valley would like to invite your community and friends to our upcoming program, Building Confidence in Local Government: Who Can We Trust?

For more information, please visit our website www.commonwealthclub.org/sv.html
or call Trish Newfarmer at 408/351-3477

Date: Wednesday, March 30, 2005

Time: 7:00 – 8:00 program

Venue: Dr. Martin Luther King, Jr. Library, Second Floor Meeting Room, 150 E. San Fernando Street, San Jose. Free parking in Fourth Street Garage after 6 p.m.

Title: Building Confidence in Local Government: Who Can We Trust?

Cost: Free Program

Panelists:
Hon. Tom McEnery, former Mayor, City of San Jose
David Yarnold, V.P. and Senior Editor, San Jose Mercury News
Bob Kieve, President, Empire Broadcasting (KLIV and KRTY radio stations)
Hon. Judy Nadler, Senior Fellow, Markkula Center for Applied Ethics, Santa Clara University; former Mayor, City of Santa Clara

Moderator:
Dr. Gloria Duffy, President & CEO, Commonwealth Club

Description: Long known as a "clean" city, San Jose city government has recently been rocked by multiple scandals. City Councilman Terry Gregory resigned in January and was indicted on 11 counts of failing to report gifts and loans and conflict of interest. In 2004, City Hall officials allowed San Jose-based Cisco Systems to write the specs for a contract for 18,000 items of communications equipment that Cisco then bid to win for the new City Hall. After investigation, the deal was overturned, Nortel received the contract for $8 million less than Cisco had bid, and a criminal investigation of City officials is ongoing. Has the ethical climate in San Jose changed? What factors have led to these episodes? And most importantly, what can be done by citizens, the media and government institutions themselves to ensure that San Jose government is clean and regains public confidence? People in San Jose are quietly talking about this issue over dinner and at social events; now it's time to talk about it openly. Please join us for this frank, yet positive discussion.

Time: 7:00 – 8:00 program

Venue: Dr. Martin Luther King, Jr. Library, Second Floor Meeting Room, 150 E. San Fernando Street, San Jose. Free parking in Fourth Street Garage after 6 p.m.

Deal near for cannery site

CITY COVETS LAND FOR POSSIBLE S.J. BASEBALL PARK
By Barry Witt
Mercury News

--------------------------------------------------------------------------------

Posted on Sun, Mar. 06, 2005

San Jose is closing in on a deal to acquire the former Del Monte cannery, which local baseball supporters say would be a prime location for a future major league ballpark.

The terms remain under wraps, but negotiators for the city indicated last week that they expect to bring a set of options to the city council later this month that would allow the city to take control of the 13.7-acre site on Auzerais Avenue from KB Home, which has been pursuing a 275-home development project on the property.

Three city officials, including a top aide to Mayor Ron Gonzales, have been meeting with the developer for two months to structure a deal that would exchange eight acres of city-owned land at North San Pedro and Julian streets for KB Home's option to buy the cannery. The price of KB's option, which expires in June, has not been disclosed.

Characterizing the talks to a city council committee last week, Paul Krutko, the city's economic development director and one of the negotiators, said, ``Those conversations have gone well in the sense of we have elements that seem to make sense for us to bring back something to you'' in a closed session within several weeks.

Major League Baseball officials have said repeatedly that they would not allow any team, including the Oakland A's, to move to San Jose because the San Francisco Giants have territorial control of Santa Clara County. But that hasn't stopped baseball boosters from pursuing the A's anyway, or Gonzales from declaring in a speech last month that he would send a proposal to baseball officials to attract a team.

City negotiators said they expect to have one more meeting with KB executives before taking the outline of a deal to the city council. The council then would have to decide whether it wants to try to complete a deal. To date, the council has held no public discussion about the merits of acquiring the Del Monte property, a move that would kill the housing proposal at a time the city has said adding new housing is a major priority.

KB's housing proposal is scheduled for a hearing before the planning commission Wednesday night. City officials say the planning process for the KB proposal will go forward, at least until the city acquires the land.

Councilman Ken Yeager, who represents the area that includes the cannery property and opposes its acquisition, said he wants the city to conduct a broad analysis of what would be the best location for a ballpark before buying Del Monte.

``We need a discussion with the neighborhood associations and some sort of analysis of the pros and cons of it as a site for a baseball stadium,'' he said.

Any sort of land swap between the city and KB would likely be a complex transaction. The city would need a source of funds to exercise the option to buy the cannery. That money could come in the form of a payment from KB for the San Pedro property.

The city also could give KB a back-door subsidy by agreeing to use taxpayer money to straighten out the S-curve on Julian Street, a responsibility that the city previously has said would be the responsibility of whatever developer took control of the San Pedro site. Removing the S-curve and restoring a normal street grid increases the developable area and also better links the property to the rest of downtown by improving pedestrian movement.

Defining 'public' use is at the heart of court case

Posted on Sun, Mar. 06, 2005
KENNETH HARNEY, Washington Report

WASHINGTON REPORT

City is trying to raze private homes to let a developer build condominiums, office buildings, a hotel and conference center -- which would bring in more taxes.

Could your local government seize the home you own solely to transfer it to somebody who promises to pay higher taxes?

That might strike you as bizarre, improbable and illegal. After all, the Fifth Amendment to the U.S. Constitution prohibits the taking of private property for public use without just compensation, right?

Correct. But what is a ''public'' use, and who gets to define it? Could it involve, as the Supreme Court heard Feb. 22, a municipal government hypothetically seizing a privately owned Motel 6 and transferring the property to a privately owned Ritz-Carlton hotel development group, simply because the latter would generate higher tax revenues?

Wesley W. Horton, a lawyer for the city of New London, Conn., told the Supreme Court that such a taking of private property would fulfill the test for public use ``if [the taxes] are significantly more.''

Horton is representing New London against the owners of 15 private homes in the city's Fort Trumbull neighborhood along the Thames River near Long Island Sound. The property owners -- holdouts who refuse to sell at any price -- don't want their houses to be bulldozed by private developers of condominiums, office buildings, a hotel and conference center. The city favors the redevelopment project, and argues that the tax revenues and jobs produced by the new construction will benefit the entire city -- thereby meeting the constitutional standard of ''public'' use.

But Susette Kelo, a registered nurse who bought and restored her water-view Victorian home in 1997, says the city's condemnation of her property -- solely for the purpose of handing over the land to private developers who'll pump up the tax base -- is unconstitutional. Her lawyer, Scott G. Bullock of the Washington-based nonprofit Institute for Justice, told the court: ``Every home, church or corner store would produce more jobs and tax revenue if it were a Costco or a shopping mall.''

In other words, if the promise of higher municipal tax revenues is the only justification needed to seize a private citizen's home, whose house is safe? One of the families facing displacement in Fort Trumbull, the Derys, has lived in the neighborhood since 1895. Wilhelmina Dery, 87, was born in the well-maintained house the city now wants to seize and bulldoze. The roots of these people go deep in the community; can a municipal government simply rip them out for ``economic development''?

At one level, the case of Kelo v. City of New London is as simple as that: How can anyone fail to sympathize with the embattled homeowners fighting Goliath down at City Hall? But at another level the issue is considerably more complex. For one thing, local governments routinely exercise their powers of eminent domain to acquire private property for roadways, railways and other public uses.

And the definition of ''public'' can be trickier and more elusive than you might assume. For example, 51 years ago, in a landmark decision involving an economically depressed and crime-ridden section of Washington, D.C., the Supreme Court itself agreed that ''public use'' can be served by redeveloping blighted neighborhoods with the help of private developers of housing and commercial buildings.

That case, Berman v. Parker, helped open the door to ever broader interpretations of public use to justify eminent-domain seizures of private property. The court ruled that ''public ownership is [not] the sole method of promoting the public purposes of community redevelopment projects.'' A ''public'' purpose, in short, can also include a more generalized public benefit that allows private development and private profit and ownership in addition to jobs and public revenues.

Since the Berman decision five decades ago, local governments across the country have used that rationale to renew downtowns, waterfronts and declining commercial districts -- projects that often have produced unquestionable economic improvements.

But even granting that, is there a dividing line that distinguishes legitimate public purposes from naked tax-revenue grabs of private properties by politically powerful interests to reward their corporate friends and allies?

If there is no limit to local governments' condemnation powers when they cloak their seizures with the label ''public purpose,'' then who protects individual property owners in this federal system?

Several justices seemed skeptical during oral arguments that the judicial branch is equipped to wade into the muddy trenches of real estate projects and second-guess local elected bodies' decisions.

''Do you really want the courts in the business of weighing evidence to see if a hospital . . . or a road will be successful?'' Justice Sandra Day O'Connor asked Bullock.

But homeowners such as Kelo and Dery might ask in response: If the courts can't come up with standards to protect us, where do we go?

The Supreme Court's decision is expected by late June.

http://www.contracostatimes.com/mld/cctimes/11051784.htm

A Blight on Urban Renewal

- by Carol Lloyd, special to SF Gate
Friday, March 4, 2005

Last week, I wrote about Kelo vs. New London, the recent U.S. Supreme Court case in which a Connecticut woman is fighting against her city's right to seize her home to make way for a large private development. The increasing use of eminent domain for economic development (in which the government seizes your property to give or sell it to a private developer) has come under scrutiny as cities around the country have resorted to using this power--or, more often, the threat of it--as they scramble for ways to increase their tax base by luring retail, hotel, office and high-density residential projects.

Like the proverbial tale of the kitten in the well, accounts of average folk losing their homes or businesses will always get my attention, but, unlike most stories of feline tragedy, quick on the heels of my heartfelt sympathy comes a more selfish concern: could it happen here?

The good news is that California law doesn't allow cities and counties to simply seize any piece of property and hand it over to a private developer--which is what happened in New London. Here, the city or country must first declare that the property is part of a "blighted area" and a "redevelopment-project area."

The bad news is that such laws aren't much of a deterrent if a city is dead set on redeveloping your neighborhood. Moreover, by playing fast and loose with the definition of blight, many California cities have managed to turn all sorts of areas into redevelopment zones, thereby making them vulnerable to eminent domain for private development.

In the Bay Area, many cities have battles brewing around eminent domain and redevelopment. Daly City, for example, is debating the virtues and sins of creating a redevelopment zone for a cliffside neighborhood, where catastrophic bluff failures have occurred as a result of heavy rains and surf and the city must spend millions to stave off soil erosion. Although the city memo floating the idea explicitly suggests that this redevelopment area not include the power of eminent domain, neighborhood activists remain unconvinced. They worry that the real purpose of such a zone is to erect hotels or high-end housing along the attractive coastal corridor.

Martinez is also in the midst of a redevelopment controversy wherein some residents fear that adding the city's decision to include their downtown neighborhood to a redevelopment zone will in the end lead to the loss of their homes to big development. And last Tuesday, a few San Francisco property owners, justifiably fearing they might be vulnerable to eminent domain in the SOMA redevelopment area along Sixth Street, rallied outside City Hall to protest the 2003 designation of their properties as blighted.

But the most aggressively redevelopment-happy city in the region (if not the state) has to be San Jose. In 2002, the city declared a full third of its area "blighted" to create one massive merged redevelopment zone. In the process, city officials defined blight in ways Kafka would appreciate. In Naglee Park, a historic neighborhood consisting mostly of Victorians and Craftsman single-family homes near downtown, instances of blight included "wet leaves" on the tennis court at Congresswoman Zoe Lofgren's home, visible garbage cans sitting on the curb on trash day and architectural iron work on windows of restored Victorians categorized as security bars. Outraged residents had a field day with the issue and wrote "bliku" protest poems that were published in the San Jose Mercury-News.

But Stephen Haase, director of planning, building and code enforcement for the City of San Jose, whose office was in charge of "supporting findings of blight" to create the redevelopment zone, says the city isn't interested in seizing people's homes. "The fear is greater than the act itself," he adds. "Examples of condemning individual buildings are very, very rare."

Haase says many neighborhoods were included in the redevelopment zone to help them, not to hinder them. He adds that the city wants greater power to enforce building codes, many of which have been flouted in neighborhoods with conspicuous overcrowding and substandard construction. He also contends that the mega-redevelopment zone was created as a way of shifting precious funds into residential areas.

"The idea was to invest in the neighborhoods," Haase explains. Because redevelopment agencies reap the benefits of all increased property-tax increments after a development has been built, he says, including neighborhoods in a redevelopment zone makes that money available for neighborhood improvement.

But for Beth Shafran Mukai, a homeowner in Naglee Park who now sits on the redevelopment zone's project-area committee (PAC), the cost of this potential funding is far too high. "The fact that we may be subject to eminent domain goes on all of our titles, and it becomes something to disclose," she says. "There's a provision that says the city may exercise eminent domain. It becomes a question: 'Do I really own my home?'"

According to Loraine Wallace Rowe, a local landlord and the chairperson of San Jose's Coalition for Redevelopment Reform, redevelopment zones are not the answer. "I want property to be in good condition," she says. "But I don't think the way to get around it is to give an agency a blanket power. It isn't very American." She says other homeowner hassles may surface as part of a redevelopment zone: "You have to go through an extra layer of bureaucracy if you want to do something to your home." And all these extra strictures, she adds, only strengthens the government's hand if it has designs on your property.

After the inclusion of Naglee Park in San Jose's redevelopment zone in 2002, residents voted to have it removed. But three years later, according to Shafran-Mukai, the paperwork is still in process. Despite assurances from city officials that no one is eyeing her house to build, say, a condo high-rise, Shafran-Mukai knows that her neighborhood could certainly yield higher taxes. "We're at the edge of the downtown frame," she says. "These are single-family homes built in the late 1800s. It's definitely not the 'highest use' for the city's housing."

Indeed, it's the downtown residents around the Bay Area who seem to feel most vulnerable to the wrecking balls of redevelopment. Lynda Kilday, who lives in downtown Martinez, knows she has some prime real estate, especially in a city--sandwiched between railroad tracks, refineries, steep hills and a freeway--where there is little land to develop.

"My home is 100 years old, and it's right behind the county administration building. Because I've lived here so long, my taxes are low," she says, adding that many of her neighbors are retirees. "It's also a special place. We can walk downtown and to the marina, and we have wonderful views of the Carquinez Straits."

For all those who fear being included in a redevelopment zone, the process of learning how redevelopment can change your neighborhood and your property rights is formidable.

"We don't know what they want to do," says Daly City cliffside resident Melissa Farley, having just returned from a city council meeting on the issue (the council also acts as the redevelopment board). "We're hoping that we can stop it before that train goes down the track," she says. "But it's so complicated, and that's part of its insidiousness."

Eminent domain cases like those in New London involving single-family houses are extremely rare in the Bay Area. But there have been a fair amount of such cases affecting small businesses--from the Tropicana, an ethnic grocery shopping mall in San Jose (whose owner spent more than a million dollars in legal fees fighting to keep his property) to a Daly City auto shop. Small businesses and landlords with modest properties will always be the most vulnerable to government redevelopment projects because they are located in commercial zones where the most room for intensifying density often exists.

So, are all these concerned homeowners and businesspeople simply antigrowth NIMBYs with too much time on their hands? Though I'm sure that's how many city officials feel, the history of redevelopment in this state has been so heinous that it's no wonder a growing body of neighborhood activists have vilified the very concept of eminent domain. And despite the fact that this Godzilla has not arrived to destroy their homes, they see its shadow looming in the distance, and they've come out swinging. This response may seem paranoid, but in an era when city coffers increasingly resemble Mother Hubbard's cupboards, the concern about eminent domain, for those living or operating businesses out of "underperforming" properties, is real.

Ironically, the abuse of eminent domain is the dark side of what I've been sporadically advocating in this column since its beginning five years ago: to embrace development and housing density in the inner cities. If we're not going to become a vast L.A.-like region of suburban sprawl, we need urban--and suburban--infill. We need city centers and transit zones to be "upzoned" to make room for denser housing, offices and hotels on top of what's now exclusively retail alleys.

But why does eminent domain have to be part of the equation (except in circumstances of real blight)? Sometimes it seems that cities are abusing (rather than judiciously using) the tools of redevelopment--with its promise of higher taxes and accelerated change and its power to float bonds--like it is a designer drug invented for desperate government officials. In the eagerness to "clean up" and "fix" the city with mega-plans, these officials need to remember that the greatest urban centers are unkempt places--patchworks of thoughtful planning and unpredictable accident, large-scale creations looking toward the future and smaller relics echoing the past.

Like the little string of old houseboats on Mission Creek in the center of the massive new Mission Bay development in San Francisco, keeping the people and businesses who actually have a history of occupying and loving a place is not only humane, it's good urban planning.

http://www.sfgate.com/cgi-bin/article.cgi?file=/gate/archive/2005/03/04/carollloyd.DTL

Your Casa Is Wal-Mart's Casa

- by Carol Lloyd, special to SF Gate
Friday, February 25, 2005

It's a ragged old cliché, but when we lay our heads down at night, there's something to be said for the American dream.

Even if not everyone can buy his or her own home, everyone can buy into the simple fairness of the idea. If you acquired a house and paid your mortgage and your taxes, you had a right to stay there until you decided to sell or were carried out feet first.

But for Suzette Kelo and her husband, the dream became a nightmare of surreal proportions when their community tried to seize their little pink house by invoking the power of eminent domain. This week, their case against New London, Conn., finally got its hearing before the U.S. Supreme Court; it's the first time the high court has addressed the limits of eminent domain in more than 50 years. Her case, along with several other high-profile court battles involving the concept, has attracted a veritable dump truck full of sympathetic press and galvanized a movement of diverse groups that are declaring war on the increasingly common practice of government seizure of one person's private property, only to hand it over to another private entity.

Property seizure has always been an option for governments when a given piece of land is needed for a public use such as a park or school, or a freeway or a military base; in return, the government is obligated to pay fair market value. But it's never been a picnic. In the 1970s, my aunt lost her home to the carving knife of Interstate 605 in Southern California, and though I was only a little girl at the time, I still recall the vehemence of her fight to save her family home from the wrecking ball.

But in the case of the Kelos and six other families who have sworn not to leave their little cottages in New London's once vibrant working-class, waterfront neighborhood of Fort Trumbull, invoking eminent domain was justified not by a need for a public use, or even to rid an area of urban blight, but by the city's desire for hard cash.

New London has hit on hard times, and after pharmaceutical giant Pfizer built a $270 million research facility on an adjacent property, the city saw the possibility that Fort Trumbull could be more than a collection of modest single-family homes. With the right mix of retail, recreation and residence, it could attract the kind of shoppers, visitors and residents whose deep pockets could help buoy the city's pitiful financial burdens through additional sales and property taxes. So the city invoked the power of eminent domain over the neighborhood and slated it to be leased to a private developer for 99 years for $1 per year. In exchange, the developer is supposed to develop a high-end office building, a hotel, condos and other as-yet-undetermined projects.

Just how the Supreme Court justices--who are expected to rule in June--are leaning remains unclear. A recent New York Times analysis suggested that they seem reluctant to second-guess the city's reasons for employing eminent domain, fearing that such a judgment would overturn decades of decisions supporting the government's right to take land for publicly beneficial, if privately owned, railroads or for economic development in areas suffering from urban blight. The Institute for Justice, the libertarian public-interest law firm that is representing the Kelos, was more optimistic, even though, despite much opposition, eminent domain has historically been difficult to fight.

Many a historian has written about the real estate highway robbery created by railroad seizures and devastation caused by the inner-city slum clearances of the 1960s and '70s, but Kelo vs. New London represents the new frontier of eminent domain--not against blighted areas, or for obvious public use, but on attractive if underbuilt (i.e., undertaxed) properties that might become highly profitable for both developers and city coffers. The laws vary from state to state; some (like California's) require that a property be declared blighted before being condemned, while others (like Connecticut's) maintain the right to condemn a property if doing so might raise the city government's tax base.

But the trends in the use of eminent domain are ominous. Since the Supreme Court ruled in 1954 that eminent domain could be invoked for private development, cities and counties around the country have increasingly used this power to remove not only obviously blighted properties but also homes, businesses and even churches that are simply not yielding as much property-tax revenues as they might if they were developed differently.

Such seizures typically happen to a certain kind of neighborhood, says Dana Berliner of the Institute for Justice, who serves as co-counsel for the Kelos. "Eminent domain is used to raise tax dollars in perfectly nice but not-as-wealthy neighborhoods," she says. "Often, those neighborhoods--like Fort Trumbull--are well located on waterfront property or near downtown, but the homes are a little bit older, so the developer doesn't have to pay as much. Often, the [homeowners] have paid off mortgages, and it's just a mix of working-class and middle-class people living on prime real estate."

How many such seizures happen every year? Because most governments don't keep track of their use of eminent domain (or their threat of it, which typically is all they need to get property owners to sell), it's impossible to know for sure. The Institute for Justice carried out a survey between 1998 and 2002 and found that 10,000 properties throughout the United States had been seized or had been threatened with eminent domain to make available for private development. But Berliner, who conducted the study for the Institute for Justice, believes that because so many cases go unreported, the number is much larger.

Perhaps many of these occurrences were justified by a public use or by assessment of the area as blighted, but in many of the cases I read about, the stories were anything but reassuring. In an era when federal and state funding is increasingly screwing cities over, municipalities have taken more and more desperate measures to shore up their declining tax base by playing cards with the devil.

Cash-strapped cities often use eminent domain in the context of making deals with big business--car dealerships, big-box stores like Wal-Mart and Costco, casinos, football stadiums or any number of developers with plans for upscale housing, hotels or retail. The targeted properties include not only homes and businesses but also churches (which, of course, don't pay taxes), and sometimes even undeveloped natural areas or parkland. In 1999, the MGM Casino proposed for Atlanta City was never built, but plans for it caused the seizure and razing of two churches. In Hurst, Texas, the properties on which 127 homes stood were taken by eminent domain and sold to a private real estate developer to make room for a mall expansion.

Sometimes, in order for seizure to be legal, the lawmakers twist the definition of blight in patently obscene ways. In Lancaster, Calif., a 19-acre city park with more than 100 trees was declared blighted before being paved to make room for a new Costco. In a case recently featured on "60 Minutes," Scenic Park, a solidly middle-class residential neighborhood in Lakewood, Ohio, faced seizure by eminent domain after the city declared the area "blighted" because the homes lacked certain criteria: three bedrooms, two baths, an attached two-car garage and central air-conditioning. The justification for the seizure? A private developer was going to build upscale condos and a shopping mall.

In the Bay Area, where market forces have tortured even the relatively affluent with the stratospheric cost of homes, land battles are generally framed as struggles between affordable-housing-hungry would-be socialists and property-righteous free marketeers. But the new face of development-friendly eminent domain goes way beyond such a polarized vision between the haves and the have-nots, the renters versus the landlords, slow growth versus smart growth. With an unholy trinity of government, developer and big business trading favors and playing Monopoly with people's homes and businesses, it makes the ordinary real estate market--free, voluntary transactions between willing parties--look like a cakewalk.

Interestingly, the growing debate over eminent domain has brought together an unlikely alliances of progressives, liberals, libertarians and conservatives--all concerned about the increasingly chummy relationship between government, big developers and big business and the slippery-slope status quo in which even private property is not longer sacrosanct. In response to the Kelo vs. New London case, there may have never been such a diverse collection of friend-of-the-court briefs. Urban-planning icon Jane Jacobs, the NAACP and the AARP weighed in next to the Southern Christian Leadership Conference, the libertarian Cato Institute, the National Association of Home Builders and the National Association of Realtors. Even though these groups may differ in their visions of an ideal world, these visions all include that battered dream of homeownership, be it ever so humble.

What is the status of eminent-domain-tinged developments in the Bay Area? Return to Surreal Estate next week to find out.

http://www.sfgate.com/cgi-bin/article.cgi?file=/gate/archive/2005/02/25/carollloyd.DTL