Tuesday, May 05, 2009

Page Mill Properties and East Palo Alto Redevelopment Agency Should Work Together


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Several weeks ago I started my first look at the East Palo Alto problem of tenants being evicted from apartments by the housing developer Page Mill Properties and discovered a small group of "tenant activists" were behind a kind of smear campaign that blocked the real truth from seeing the light of day: that Page Mill Properties was facing a terribly-designed rent control system and an underground economy where apartments were sublet by the tenants at markup rates.  In my alternative approach talking to planning professionals I know and who are familar with the problem in EPA, I've come up with a solution.

The irrrational activists

This revelation of Page Mill's "underground economy" problem earned me the ire of activists who started a massive personal attack campaign against me, paced by representatives of  Tenants Together and Chris Lund who really represents himself as Tenants Together associates say he's not a part of their organization.

The attacks centered on the idea that I was paid by Page Mill and even had Paul Hogarth of BayondChron "friend" me on Facebook, thus becoming one of almost 3,000 contacts, then because a Pat Murphy was one of my Facebook Friends, asserted that we must be working together, forgetting that such illogic (an appropriate term as this is "Star Trek" week and that was Spock's favorite word) would mean I was working with everyone from perennial Republican Presidential Candidate Allan Keyes to conservative columnist Michelle Malkin as both are or were Facebook Friends. But then Hogarth "defriended" himself so I could not point out that he and I were friends.

He forgets that such acts leave a trail. Here's a screenshot of the email subject heading where Hogarth "friended" me and reads "Paul Hogarth added you as a friend":

But all of this crap masks the real story of what's going on in East Palo Alto.  In one of his email tirades, Hogarth wrote that he didn't care about the involvement of the East Palo Alto Redevelopment Agency.  That's true for many of the so-called activists, and the truth is they don't have the background to even analyze what the agency has or has not done, let alone an understanding of what such agencies do under California law.

What Redevelopment Agencies Do

Redevelopment agencies in California are generally established by a city or county's elected body of officials (but as a side note, a joint powers authority or even, say, the Port of Oakland, can establish its own redevelopment agency.)  The intent of the agency is first to establish an area called "blighted" as a "redevelopment study area" and then after the agency's report on and plan for the area is complete to get state approval for the establishment of a "redevelopment project area" where the agency can collect property taxes via a formulation method called "Tax Increment Financing", or "TIF".

TIF is where we start with what's called a "base year" of assessed value of say, 1 million.  Then according to state law and re-established with the passage of Proposition 13 in 1998, the agency can mathmatically increase that value by 2 percent annually.  So say two years later, the project area has a value of $1,020,000.  The agency will add that percentage increase each year and have an increment of $30,000 and from that a tax revenue (at one percent of the increment) of $300 by the second year.

But let's say that's part of a bond the agency has floated and it's 20 years long.  That means the agency can collect a total of $194,000 in revenue from an increment of $20,400,000 minus the base-year assessed value.  Doesn't sound like a lot of money, right?  Well, project areas are much more valueable than a milion bucks, more like billions, so that TIF money can add up and can be used to provide "bridge loans" to developers trying to provide affordable housing in an area like East Palo Alto.  And that's why I asked "Where was the East Palo Alto Revelopment Agency?" in this whole "Page Mill Affair".

EPA's redevelopment planning mistake and a solution

According to an unnamed source, the reason the EPA was not and is not involved in the Page Mill issue is because the housing they purchased is not in a redevelopment project area so TIF funds can't be used to help Page Mill, and for reasons that are not clear to the person I talked to, the EPA's project areas were not drawn to include housing units.  The source also agrees that was a huge planning mistake.

From my experience, what EPA's agency did was to form the project area boundary lines such that money from office and retail developments - which are more expensive than housing - was captured. But the problem is they can't use the money for housing because the boundaries don't include the housing units that were later purchased by Page Mill Properties.

Another source says the other issue is simply one of money.  Even with its development activities, EPA is still a relatively poor city.  In cities like Oakland, where I worked for its redevelopment agency and two Oakland mayors Harris and Brown, we commonly approached developers to build projects using the money generated from our project areas as an attraction tool; EPA's agency doesn't have such wealth so it's far less likely to show up as, say, The International Council of Shopping Center's Spring Convention in Las Vegas, looking to do deals with developers. 

That written, EPA's redevelopment body and not Page Mill, which was a late-comer, has been at the forefront of gentrification in that city and as far back as 2001.  One example is the decision to help developers build an IKEA store rather than a grocery store, upseting some local residents.  Today, in his state of the city adress, EPA's Mayor Ruben Abrica points to IKEA as a symbol of the city's growth:

In East Palo Alto, "you can get the best Mexican food, the best barbecue, the best island food. You can even get Swedish meatballs up at IKEA."

And in the same speech, Mayor Abrica stressed the need to update the city's rent control laws, which started the whole problem with Page Mill and led to the unusual rate of subleted apartments that Page Mill discovered.  The evictions the activists complain about were - for the most part - actually those sublets; the tenants didn't even live there in those cases. Moreover, the East Palo Alto Rent Board was allowing arbitrary rent increases which Page Mill contends were given to tenants who were then "re-renting" their units. 

Now the EPA Rent Board is seeking the advice of the members of rent boards in Berkeley and Oakland to, as Mayor Abrica said "update the city's rent control laws".

Meanwhile the pace of gentrification continues and the EPA Redevelopment Agency has three project areas active, the University Circle, the Gateway/101 corridor, and the Ravenswood Industrial Area.  The University Circle Project Area includes a Four Seasons Hotel (called "The Four Seasons Silicon Valley")

All of this development, coupled with a general trend of African Americans spreading out in the Bay Area and while the population - at 7.5 percent in 2000 was projected to have decreased to 7 percent in 2007, has caused a reduction in EPA's Black population.

The African American population in EPA has given way to a diverse group of Latinos,  Asians, and Blacks but the city is still largely politically controlled by older African Americans.  It may have been this political rub between older Blacks who see what they knew fading away due to demographic change and gentrification and a White developer new to the EPA political scene, that led to the flurry of lawsuits from both sides.  But also a lack of good, sound technical expertise and input was and is the problem; politics has ruled the day even as the City of EPA has excellent professional staff.  They should listen to them.

The solution is the EPA's redevelopment project area boudaries need to be redrawn to incorporate the housing that Page Mill's upgrading.  The improved property values will be a new source of agency revenue that it can use with Page Mill to keep the units at affordable levels while maintaining Page Mill's ability to take care of them and realize a good rate of return on their investment. Moreover, EPA and Page Mill will emerge as true partners.  I admit re-drawing redevelopment boundaries is a time-consuming issue, but the rewards are worth it for city, building developer, and tenant.  To it's credit, Page Mill's Jim Shore, after I explained this idea, expressed to me that "We would be willing and happy to work with the (East Palo Alto) redevelopment agency." 

This is the kind of professional problem solving approach not brought to this issue by the activists who've attacked me.  As far I'm concerned, their lack of technical planning experience, and their unwillingness to work with people who have it, let alone really learn about redevelopment, and coupled with their desire to smear and demonize and harrass people have only made the Page Mill issue an ugly mess.  Unless they're willing to embrace an intelligent, professional, technical, detailed, urban planning approach, and advocate for EPA redevelopment project area redesign, they should stay out of this issue.

Oakland Blogger Party A Hoot!; Visit The Uptown District!


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Pican Restaurant is in the middle of the revived Uptown in Oakland.

Ok. After blasting the organizers of the previous Oakland Blogger's Party for not inviting me and for it being an "All Whites gathering" Oakland Blogger VSmoothe (A Better Oakland) was cool enough to invite me to last Wednesday's party, and you know, it was a good event with some diversity in the house. My only misgiving is that the folks' of color were not all active Oakland Bloggers like me or Michael Caton (An Oakland Citizen), or...VSmoothe or the good folks who write the Myrtle Street Review, who didn't make it but I'll get them to the next one!

(That's a bit of a prod to get it going, folks!)

But that written, it was a total blast! I'm happy to see that Oakland has a vibrant culture of people who care enough to write about what's happening in it. I love that they're engaged and it's good to see that they're active even as I'm off chasing windmills of national stardom and this television show of mine ; I'm all over the map and they're focused on Oakland. Thanks to Vivian for her critique of my Oakland Focus Blog's over stylized comment system (she can't see it) and always great to see the Oakland Legend Naomi Schiff of the Oakland Heritage Alliance, and of course, Libby Schaaf who really should be the Mayor of Oakland. (She's gonna kill me for that one, but it's true and insiders know that she's the only one who doesn't have any - as former Oakland City Manager Robert Bobb would put it - "sniper fire" coming at her from enemies.)
A good home base of people to keep me sane.

It was also cool to see all of the people waltz in and out of the event, like Phil Tagami, my long-time friend who just finished developing the Fox Oakland Theater (A place so nice, Sean Penn crossed the pond to see it.) and to who the City of Oakland owes a massive debt of gratitude, if they would for once stop being jealous of him (ah the Oakland Crabbarrel mentality!).

(By the way Phil, are you running for Mayor? What's up?)

But back to the party.

The real star was "Ave", (needs an updated website) the bar and eatery on 2020 Telegraph in the Uptown Entertainment District and next to the parking lot on Telegraph and Thomas Berkeley Ave, next to the Sears building - or across from it - and a hip place with the right amount of subdued lighting, and good wine and food. Stop by and try the pasta while you're watching the basketball game.

It's really cool to see Downtown Oakland just plain come alive with places to go and things to do after dark. I've got to admit, it's a little weird not crossing the bridge to find a party, now I've got to get my San Francisco friends over here where there's a "there, there" - finally!

If you've not been there, Pican Restaurant is a "must" on your restaurant list at 2955 Broadway and part of the Broadway / Grand Development. Try the mac and cheese and chicken or the salmon dish. It's the best in the Bay Area, and if you need a visual preview of the place, well the video above has it!