The closure of Palo Alto's sole mobile-home park became more imminent Wednesday, when an administrative judge upheld the property owner's plan for compensating the roughly 400 residents who would be displaced when Buena Vista Mobile Home Park shutters.
Acknowledging that his decision will have a significant impact on the largely Hispanic and working-class community in Barron Park, Administrative Judge Craig Labadie concluded that the Jisser family has fulfilled all the necessary legal requirements to proceed with the closure. Among the most significant of these is the completion of an adequate Relocation Impact Report (RIR), a document that estimates that value of each mobile home and lays out the assistance that Jissers would provide to the roughly 100 families that would need to find a new place to live.
Labadie's 22-page decision, which focuses on this document, came about three months after a three-day public hearing in which dozens of Buena Vista residents and community supporters made a plea to keep the mobile-home park open, citing the high costs of finding alternative housing in the area and the disruptive effects of having to pull children out of Palo Alto schools. The residents' attorney called the mitigations offered in the Relocation Impact Report "grossly inadequate" at that time.
Labadie acknowledged in his ruling the "heartfelt testimony" he heard from residents and experts about the negative impacts of park closure.
"These impacts include not only disruption to the lives of the residents and their families, but also loss of economic and cultural diversity for the City of Palo Alto," he wrote.
Yet he also concluded that the Jissers have met their burden in offering Buena Vista's residents "reasonable costs of relocation," as required by state and local law. This being the case, he ruled that the Relocation Impact Report merits approval.
For the Jissers, the ruling is a significant milestone in a process that was launched nearly two years ago, when they submitted their initial closure application. In February, Palo Alto officials deemed the Relocation Impact Report complete after five iterations and numerous revisions to the compensation package. Labadie's decision largely confirmed the city's conclusion, paving the way for the closure to proceed.
"Although I am mindful of the impact this decision will have on the lives of park residents, my factual and legal conclusions must be based on evidence and reasoned analysis, not emotion or sympathy," Labadie wrote. "After careful consideration of all the information presented, my ultimate conclusion is that the park owner has met its burden of proof by proposing a package of mitigation measures which, taken as a whole and with certain supplemental conditions, do meet the criteria set forth in the City's Mobilehome Park Conversion Ordinance for mandatory approval of the application to close the Buena Vista Mobilehome Park."
The package of relocation benefits was most recently revised on May 14, when the Jissers' attorney offered at the conclusion of the public hearing to increase the level of subsidies. The relocation benefits provided to the residents in the current report are: the full appraised value of each mobile home; a rent subsidy equal to the entire difference between the average space rent at the park and the average market rent for replacement housing; start-up cost equal to three months' rent; moving expenses; and special assistance for handicapped and disabled residents. Labadie also stipulated that the compensation should be based on updated appraisals for the mobile homes, reflecting market conditions within six months of relocation. The Jisser's attorney, Margaret Nanda, offered the updated appraisals on May 14 -- five minutes prior to the end of the three-day hearing -- in response to the concerns from residents.
At the public hearing, Nanda argued that "in all respects, the RIR complies with the express terms of Palo Alto's conversion ordinance." The park, which the Jissers bought in 1986, has always been a private property, she said.
"It is the legal right of the private-property owner in California, and specifically a mobile home park owner ... to close, convert or cease the operation of a mobile home park," Nanda said on May 12.
Melissa Morris, representing the residents, made a case in her closing comments on May 14 for preserving the mobile-home park, calling it "an important part of the Palo Alto community."
"It's one of the community's only sources of affordable housing, so its preservation is important, as is making sure that if the residents of Buena Vista are forced to leave their homes that they do get adequate compensation," Morris said.
Labadie concluded that the benefits listed in the amended Relocation Impact Report meet that standard.
"Taken as a whole, the above mitigation measures will substantially lessen the adverse impacts of park closure on residents who are required to relocate," Labadie wrote. "With the assistance of the housing relocation specialist, the relocation benefits to be provided by the park owner will go a long way toward helping individual residents pay the cost of relocating into alternative housing."
Labadie's decision is tentative and attorneys from both sides will have 14 days to respond to the ruling. Residents will have a chance to appeal the decision to the City Council, a move that Palo Alto officials fully anticipate. Labadie also offered to hold his decision in abeyance, effectively suspending it, if the two parties request time to come up with an agreement that would either avoid an appeal altogether or narrow the issues that the council would rule on.
While the ruling makes it increasingly likely that the park will close, the question of what will replace it remains open. In July, real-estate giant Prometheus, which was planning to build a 187-unit, luxury-apartment complex on the site, pulled out of its deal with the Jissers. The roughly 4.5-acre site at 3980 El Camino Real is zoned R-15, which means it can accommodate low-density, multi-family housing.
After attorneys from both sides respond to Labadie's ruling, he will issue a final decision within a month. Residents will then have 10 days appeal the decision to the council.
Related content:
• Buena Vista residents, supporters ask for comparable compensation (May 2014)
• Survey shows neighborhood support for Buena Vista residents (May 2014)
• Study sheds light on Buena Vista children (March 2014)
• Buena Vista owners reject residents' $14.5M offer (September 2013)
• A history of Buena Vista Mobile Home Park (July 2008)
Comments
Another Palo Alto neighborhood
on Aug 28, 2014 at 8:55 am
on Aug 28, 2014 at 8:55 am
Let's see, Palo Alto wants to spend $10.5M on a new, "landmark" bike bridge, it just spent $5M on new carpets for City Hall, and received a payback of $5.8 M from the Housing Corp. That is getting very close to the $30M that Jissers apparently want for the Buena Vista site. I would rather the city spend money on the people in the community who can least afford to live here, and will be dramatically impacted by the court decision.
Read: The Expanding World of Poverty Capitalism by Thomas B. Edsall.
www.nytimes.com/2014/08/27/opinion/thomas-edsall-the-expanding-world-of-poverty-capitalism.html
Crescent Park
on Aug 28, 2014 at 9:16 am
on Aug 28, 2014 at 9:16 am
I agree.
The ideal solution to this problem is for the city to buy the land at the full price. The proposal that the residents could buy it for half price was always a non-starter.
Barron Park
on Aug 28, 2014 at 9:17 am
on Aug 28, 2014 at 9:17 am
I would rather have the bridge and new carpet!!!
Barron Park
on Aug 28, 2014 at 9:27 am
on Aug 28, 2014 at 9:27 am
I look forward to redevelopment of this very blighted area. Residents in other areas of Palo Alto may not be aware of how dangerous some of the Trailers are ( concerning building codes).
Mr. Jisser did a great job in keeping this housing opportunity available for so long.
The city has no obligations in this private matter, other than following the laws for closure.
I am sure there are many areas on Stanford "land" where a trailer park could easily exist. Students may even like the idea.
Barron Park
on Aug 28, 2014 at 10:30 am
on Aug 28, 2014 at 10:30 am
Buena Vista is far from over. It was understood that this administrative hearing was another required stop along the way toward an actual solution if we are to avoid displacing Palo Alto residents to clear the way for developers. While it would have been lovely to get a better decision, it wasn't something counted on.
See fobv.org for more on BV and to join Friends of Buena Vista.
Another Palo Alto neighborhood
on Aug 28, 2014 at 10:37 am
on Aug 28, 2014 at 10:37 am
Buena Vista should have been over long ago. It is too bad that certain individuals have so little regard for the rights of Jisser. What do they expect will happen?? That Jisser will not be allowed to close the trailer park and be forced to continue renting it out? Or is their plan to try to extort more money from Jisser as part of the "resettlement" payment?
I do not understand why Winter and the rest of the "friends" do not just raise the $30 million dollars and buy the property from Jisser. Then they can continue to run it as a trailer park.
At that point the relevant authorities should be called in to thoroughly inspect the park and cite all the units that are not up to code.
Crescent Park
on Aug 28, 2014 at 10:55 am
on Aug 28, 2014 at 10:55 am
@Spring - the last I heard, the owner is not interested in selling. He plans to develop the property himself.
@Winter - the only ambiguity I read in the ruling was what could be used as the dollar amount for comparable housing.
I think we should focus on helping these residents relocate as successfully as possible.
Downtown North
on Aug 28, 2014 at 10:56 am
on Aug 28, 2014 at 10:56 am
I cannot see Buena Vista as blighted [Portion removed due to disrespectful comment]. Buena vista is orderly, well kept and the blight may be in eyes that see themselves as superior. [Portion removed due to disrespectful comment
Crescent Park
on Aug 28, 2014 at 10:56 am
on Aug 28, 2014 at 10:56 am
I was on the City Council which zoned Buena Vista the lowest possible multi-family zone in order to help preserve the Mobile Home Park which even back then was Palo Alto's most affordable housing. If this City Council is going to allow the Mobile Home Park to be closed, I hope it will also express its intent to hold the line on the zoning -- no Planned Community zone, no density bonuses, no variances. NADA. There should be standard public roads and sidewalks, park requirements, the works. Anything less will continue to encourage developers to ravage Palo Alto and remove the special places that give our town character and heart.
Green Acres
on Aug 28, 2014 at 10:57 am
on Aug 28, 2014 at 10:57 am
Let the Jissers do what they are allowed to do as rightful property owners. For those of you asking the city to step in and help the residents financially, I think you should stop asking others to fund your unrealistic ideas. Instead, why don't you offer your own home and resources if you really want to help those who cannot afford to live in the area?
Crescent Park
on Aug 28, 2014 at 11:00 am
on Aug 28, 2014 at 11:00 am
No doubt the BV residents will appeal the decision to the CC. If the CC has any brains, they'll listen to their lawyer and will uphold the arbiter's decision. Otherwise major lawsuit by the Jisser and they will lose...costing the city legal fees and damages. Maybe the BV residents will do the same if the CC upholds the ruling...but can they afford the costs of paying back the city's legal costs if they lose?
I appreciate that the arbiter recognizes all of the emotional issues and doesn't discount the impact of his decision. But I also appreciate that he is following the law and that he recognizes Jisser's private property rights.
Crescent Park
on Aug 28, 2014 at 11:02 am
on Aug 28, 2014 at 11:02 am
And BTW, I agree that the city should not up zone the property. It must remain as R-15.
Mayfield
on Aug 28, 2014 at 11:15 am
on Aug 28, 2014 at 11:15 am
Follow the money.
Barron Park
on Aug 28, 2014 at 11:38 am
on Aug 28, 2014 at 11:38 am
I can't see the cost needed to supply housing to these people when they leave. I am sure most are living in their spaces through the Section 8 subsidized housing that is one of the 124 welfare programs passed by Congress since Lyndon Johnson became President. And they will get a higher Section 8 subsidy when they leave by applying for it based on their new rents.
Only the illegal aliens do not get the Section 8 voucher subsidy and I am sure there is some California program paying for their housing with taxpayer money too.
Its too bad that this process delayed the owner being able to close the park for two years. It is a firetrap with shacks located next to each other. Its a miracle that there has not been a major fire there.
Barron Park
on Aug 28, 2014 at 11:40 am
on Aug 28, 2014 at 11:40 am
I can't see why someone that lives in Crescent Park that probably has never been in Barron Park has an opinion on zoning the property. [Portion removed due to disrespectful comment.]
Palo Verde
on Aug 28, 2014 at 12:00 pm
on Aug 28, 2014 at 12:00 pm
The Jesser's have rights, too. It appears that they have met the requirements to close the park. Like selling any business, if the property had an economic future as a trailer park, then someone (investor or businessperson) would come up with the money to buy it and continue to run the business. But evidently the income from the park (the ROI) makes that a poor investment. THIS INCLUDES THE IDEA BY SOME THAT THE CITY OF PALO ALTO SHOULD BUY THE PROPERTY AND RUN THE TRAILER PARK. Are we to force the Jesser's to remain in this situation? It has been two years. Is it sad that people will be displaced? Yes, indeed. That is why there are some rules of compensation for such people. But sometimes life is not rosy and people get hurt.
PS
I, too, agree we don't need a $10 million "gateway to Palo Alto" bike bridge. I DO BELIEVE we NEED a bridge, but simple and utilitarian would be just fine.
Crescent Park
on Aug 28, 2014 at 12:03 pm
on Aug 28, 2014 at 12:03 pm
@jerry99 - Just curious, since you live in Barron Park, that means you have never been to Crescent Park, right? Never had friends that lived there, kids that played sports there, kids who had friends there? Just because someone lives in Crescent Park doesn't mean they have never been in another part of Palo Alto, that's just silly. And I don't see any indication that anyone is "throwing a tantrum because the didn't get their way". In fact, if you read the above posts, Ms. Renzel, who also lives in Crescent Park, helped zone "Buena Vista the lowest possible multi-family zone in order to help preserve the Mobile Home Park " when she was on the City Council.
It is truly unfortunate that so many people will be displaced. We should focus on helping them rather than trying to keep the park from its inevitable closure.
Esther Clark Park
on Aug 28, 2014 at 12:10 pm
on Aug 28, 2014 at 12:10 pm
Just makes sense to displace legal immigrants and make room for illegal ones at the same time..
Barron Park
on Aug 28, 2014 at 12:17 pm
on Aug 28, 2014 at 12:17 pm
@winter, its difficult to believe you think this is far from over. Its been going on for two years now and the land owner has been patiently following the law. Now that a City appointed hearing officer ruled in his favor you believe that this is far from over. Why the need to change the law?? I dont see the owner suing the city to get his way.
Time to start Friends of Property Rights.com this story should have not even been a story. The landlord (obviously per the decision) has rights as well!
Barron Park
on Aug 28, 2014 at 12:21 pm
on Aug 28, 2014 at 12:21 pm
Most of the mobile homes in the park are old and dilapidated. Some have modifications made without permits or inspections. They are very susceptible to serious damage in the event of natural disaster (a half dozen or so mobile homes in Napa burned to the ground following the earthquake). So, as housing units, they are substandard so why is there an effort made to preserve them? The best solution for all parties would allow for a gradual closure over several years, during which time the public interest lawyers who are fighting so hard to keep Buena Vista open instead try to get loans from public agencies and work with local housing non-profits and other agencies and build affordable housing somewhere in the area.
Adobe-Meadow
on Aug 28, 2014 at 12:54 pm
on Aug 28, 2014 at 12:54 pm
@Don, I think @Jane is right. your idea seems fair but again when a government has the right to force a private property owner to stay in business for several years we have bigger constitutional rights issues. The city would have to make a deal with the owner to keep it open. Sounds like the owner has been wanting to close for over two years now, which leads me to believe this will be difficult. then again I guess it wouldnt hurt to ask.
Barron Park
on Aug 28, 2014 at 1:06 pm
on Aug 28, 2014 at 1:06 pm
Does anyone know if the school district will allow the BV children, who are enrolled in the district at the time of closure, to finish their schooling at PAUSD?
It can be extremely hard on those children if they have to abruptly switch to another school. This is the least that we can do for these kids.
Barron Park
on Aug 28, 2014 at 1:47 pm
on Aug 28, 2014 at 1:47 pm
There is no requirement in the state law or Palo Alto's ordinance that addresses allowing the children of Buena Vista to continue their education within PAUSD. Both are completely separate government entities.
The school district could allow them to stay, and the PAUSD board expressed support for the children at Buena Vista. But, they haven't made any kind of commitment right now.
While there seems to be a lot of public support in offering the children at Buena Vista the opportunity to stay in the district, people are privately concerned how this would be implemented. If they are only allowed stay at their current schools such as Barron Park, there would be space for them. But, getting to Barron Park from affordable housing in Redwood City and East Palo Alto is very difficult during commute hours. Furthermore Barron Park Elementary is the lowest performing school in the district. So, in making this kind of offer, PAUSD could generate a significant lawsuit because it would put the Buena Vista children at a disadvantage compared to other children in PAUSD. I don't think parents in north Palo Alto would be willing to give up slots in their top rated neighborhood schools to accommodate these children, but I guess that's a question the PAUSD board could ask.
Registered user
Barron Park
on Aug 28, 2014 at 1:57 pm
Registered user
on Aug 28, 2014 at 1:57 pm
To all the "property owners' rights" advocates,
"Although I am mindful of the impact this decision will have on the lives of park residents, my factual and legal conclusions must be based on evidence and reasoned analysis, not emotion or sympathy," Labadie wrote.
This statement is exactly what is wrong with our legal system in so many areas of life. Where were those laws when the natives (indigenous Peoples) were summarily forced off these lands? The laws are written to benefit the most wealthy in our society because they have the wherewith all to influence the legal and political systems.
At the same time I thank the Jisser family for creating and allowing the mobile park to exist for so many years. It has been a significant benefit to our continually gentrified community. My hope is that some compromise can be found to keep the park a livable, diverse community that benefits us all.
another community
on Aug 28, 2014 at 3:47 pm
on Aug 28, 2014 at 3:47 pm
@ a neighbor: nice thought, letting the kids finish out at Palo Alto schools, but these people will not be able to find such affordable housing within commuting distance. Salinas? Manteca? It's a shame that this is happening, but such is life in one-time affordable Palo Alto.
Green Acres
on Aug 28, 2014 at 5:24 pm
on Aug 28, 2014 at 5:24 pm
@MyOpinion
"THIS INCLUDES THE IDEA BY SOME THAT THE CITY OF PALO ALTO SHOULD BUY THE PROPERTY AND RUN THE TRAILER PARK."
I've been reading these threads for awhile and I don't think I've ever seen that suggestion. I've seen people suggest the City loan the money from the affordable housing fund that was returned from Maybell, to the non-profit group the residents of BV set up. The City will get its money back, and it's money that can't be used for anything else anyway, better that it go to benefit existing Palo Altans.
Another suggestion is that the City help purchase and co-own the property, similar to the way they co-own, for example, an expensive house in north Palo Alto owned by a former City manager so that he can continue to live here until his child finishes high school. The City wouldn't be running the trailer park, the residents' non-profit would, in fact, they could apply for grants then to upgrade the park and would have an incentive to improve it. The City wouldn't lose any money, they would own part of the property. But they wouldn't be running the park anymore than they run the former City manager's household just because they co-own property together. You put the restrictions on responsibility in the purchase agreement.
Another suggestion is that the City help facilitate the purchase using the knowledge they had from the Maybell sale to help come up with a combination of write-offs and loans to give Jisser a good competitive offer, while also ensuring the property remains affordable into the future, and residents have an opportunity to improve it. The City's involvement could be time limited in order to give the community time to raise money, such as through crowdsourcing, to repay all or part of it.
Anyway, it's worth exploring. I think it's at least worth making the effort.
Embarcadero Oaks/Leland
on Aug 28, 2014 at 5:34 pm
on Aug 28, 2014 at 5:34 pm
Of course the judge sides with the property owner, because it was the logical and right thing to do. I'm gratified that the rights of the property owner have been respected. Local governments should not be able to dictate what one chooses to do with their property assuming the action is legal and just.
another community
on Aug 28, 2014 at 7:08 pm
on Aug 28, 2014 at 7:08 pm
Had to quit reading the comments rather early on when I fell off my chair laughing at the idea that Stanford might allow a trailer park to be built on their land!
So where are all these people to go to live? [Portion of post removed.] So let me put it in terms of your own self interest: how are all the less advantaged people who clean your houses and offices, care for your children, take care of your lawns (drought may take care of that), empty your bed pans and a multitude of other jobs that the over-privileged in Palo Alto don't do going to get to those jobs? Many of those people can't afford a car and if they did it would worsen traffic and pollution. Where will they live with no decent public transportation? (And I'm remembering how the same privileged few voted down high speed rail, an act so backward you should all hang your heads in shame.) I'm waiting to see how this plays out. Palo Alto has gotten more snotty and conservative by the year. Meanwhile, I'll just read what's going on from the great town with the NUMBER TWO MAIN STREET IN AMERICA, according to Parade magazine's recent online competition. Ya'll have fun down there with all your problems, traffic, bad city government and stratospheric cost of living. Hint: it ain't worth it.
Midtown
on Aug 28, 2014 at 9:46 pm
on Aug 28, 2014 at 9:46 pm
to @jane: "I would rather have the bridge..."
This is Palo Alto. The bridge will never be done. For previous references see: Mitchell Park Library.
Crescent Park
on Aug 29, 2014 at 6:37 am
on Aug 29, 2014 at 6:37 am
PAUSD cannot issue a blanket waiver to allow attendance by all the BV kids. Not legal. The issue is state funding and the other school districts involved. Transfers can only happen if the other district agrees to the request. But when a student is allowed to transfer, the "other" district must give up its state funding for that child. Some districts can't afford to do that. PAUSD has no authority and cannot waive state funding requirements.
Community Center
on Aug 29, 2014 at 6:57 am
on Aug 29, 2014 at 6:57 am
This "over-privileged" Palo Altan cleans his own house, cares for his own children, mows his own lawn and will empty his own bedpan when the time comes. Like many Palo Altans I do a multitude of other mundane jobs.
Green Acres
on Aug 29, 2014 at 7:22 am
on Aug 29, 2014 at 7:22 am
Enough is enough!@#$%^&*()_+~
Palo Verde
on Aug 29, 2014 at 7:43 am
on Aug 29, 2014 at 7:43 am
@Neal -- hear, hear.
Barron Park
on Aug 29, 2014 at 8:10 pm
on Aug 29, 2014 at 8:10 pm
Is Mr Jisser truly a good neighbor in Barron Park? Did he own the property the once had All American Market, which he developed into a succession of not neighborhood useful businesses? This property at El CAMINO AND Los Robles once held a full service super market. Barron Parnell no longer has a proper grocery store. Did he also own the property on the other side of Los Robles that once held a great Italian restaurant and pizza place? The ugly housing that is now there is not a good replacement for another neighborhood landmark.
The Buens Vista trailer park is fine. Residents keep it clean. It provides bridge housing for some trying to straighten out their lives and for low income residents. palo Alto keeps harping about low income housing and wanting to add ever more to our neighborhoods. Well here is some now. Why destroy a good low income housing source that had been stable for a long time to replace it with some ugly, over built, high density project? Soon Palo Alto will look like Ann the other similar low income projects in big cities. How will Palo Alto replace these lost units of housing?
Registered user
East Palo Alto
on Aug 29, 2014 at 9:14 pm
Registered user
on Aug 29, 2014 at 9:14 pm
As is often the case, Crescent Park Dad is a voice of rational, practical reason.
Barron Park
on Aug 30, 2014 at 9:15 am
on Aug 30, 2014 at 9:15 am
@sunshine - sounds like a great idea. Give the owner $30M for the land put more money to fix it up and keep the place open. As the new owner that should not be a problem.
Why is it so easy for people to tell someone what they should or should not do when their own money is not involved. ????
Duveneck/St. Francis
on Aug 30, 2014 at 1:07 pm
on Aug 30, 2014 at 1:07 pm
I think Mr. Zucker, Ms. Mayer and some of the other well-heeled Palo Altans who can afford to buy Buena Vista should do so and allow the residents to continue to contribute to the much needed diversity and humility that our city needs. Mr. Zucks just donated how many millions to Ravenswood and RWC schools?...exactly the same school districts where these families may wind up bc of affordability issues. Everyone is complaining about the Buena Vista residents' displacement, but why not tap our wealthy neighbors for a bit of help. Most of these folks are looking for a good cause to support.
Crescent Park
on Aug 30, 2014 at 2:27 pm
on Aug 30, 2014 at 2:27 pm
@common sense girl and all those who want the City to help buy Buena Vista - It's hard to buy something that is not for sale.
Green Acres
on Aug 30, 2014 at 2:48 pm
on Aug 30, 2014 at 2:48 pm
@ common sense girl
That's a nice idea, but if they were going to, they would have already. Philanthropists are always talking about things like leverage and high-value or high-impact. They're not going to donate or use $30M to get entangled with a mobile home park.
However...there may be a way to turn this into a high-impact situation.
It would probably be possible to raise the money to save BV through crowdsourced real estate investment, either all of it, or half if the residents still have access to the $14.5M they had before.
I am specifically thinking of a social business with the focused goal of preventing displacement of low-income people in the face of rapid gentrification, something to allow people to save low-income housing without having to wait on governments or Superman. Kind of like Nature Conservancy meets Habitat for Humanity. Only instead of raising money through donations, the money is raised as crowdsourced investment in small pieces of places with high-value real estate.
The goals would be the following:
1) Raise money through crowdsourced real estate investment in order to prevent the displacement of low-income communities. (Begin with BV, of course.)
2) Provide a reasonable investment vehicle for investors while also facilitating the building of assets by low-income residents.
3) Facilitate investment in and improvement of the properties
4) Retain properties as below-market rate.
The concept would look something like this: the ability to buy "shares" in the property through crowdsourcing, whether $100 parcels or $1,000 parcels - the optimal amount would be determined by further study. The success of this out of the gate would probably depend on a partnership with a major philanthropic or charitable concern like Habitat for Humanity, because people know they can trust it.
Residents would have first crack at purchasing shares and purchasing resold shares. There might need to be some restriction on the amount of time shares would have to be held before resale, like 15 years and 30 years. It might be different for residents and everyone else. Again, a subject for study. When the shares are sold, if there is a profit, the seller is allowed to make 1/3 the increase in the market, and take the remaining 2/3 as a charitable write-off donation to the nonprofit residents group (which has already been formed at BV, and would be a part of any community's participation in such an effort).
Everyone wins:
-Investors in parts of the country that can't ever dream of seeing real estate go up like here will have a decent investment vehicle they know is doing good.
-Low-income residents remain in their homes, can accumulate some wealth, allowing them to make incremental real estate investments in their own homes.
-Governments get to retain diversity in housing while avoiding the arguments over taxpayer funding, no taxpayer funding involved to purchase properties (except potentially tax waivers)
-Non-profit residents' groups would be eligible for funding to improve the properties, in fact, applying could be a condition of seeking the crowdfunding -- which is a far more high-value use of public dollars in providing for far more low-income residents than new developments in ultra-expensive places. Some money for improvements might alternately be collected as part of the initial investment offering, or through donations that then get used for another group if one is able to secure grants.
-Residents themselves retain their autonomy dignity, and don't have to be funneled into public subsidized housing.
-Cohesive communities avoid displacement during disruptive boom cycles and create stability for ordinary people during bust cycles.
The beauty of crowdsourcing is that if not enough money is committed or the deal falls through, no one is charged the money, so there are no complicated issues about how to give the money back, etc.
Making it a reality would need:
-Someone resourceful to drive it - setting it up is the easy part
-A trusted nonprofit partner such as Habitat
-Getting commitments from a large number of interested parties before the crowdsourcing goes online, it helps with crowdsourcing if lots of people commit right out of the block. That takes prep.
-Lastly, in order to help BV, someone would need to negotiate a sale price with Jisser that he would commit to if the money were raised. Larry Klein? You were willing to have your firm negotiate for the Maybell sale, how about it?
People are already crowdfunding real estate. This would be purely for the purpose of helping existing communities avoid massive displacement in the light of rapid gentrification pressures. It could start with BV, but then essentially take applications to help other groups all over the Bay Area and potentially in other high-value areas around the country.
You don't need to be Zuckerberg to do THAT, in fact, any community-minded young Jerry Yangs at Stanford who want to do this could put it together. They could easily enlist much citizen help, as the same neighbors who put together the Measure D referendum would only be too happy to find help for it, and Winter Dellenbach and FOBV have been tireless and have many media contacts to take such a thing to primetime.
Just an idea. As I feel the need to point out, if you think this is a good idea and you care about BV, don't rely on someone else to do it. You can do it.
Crescent Park
on Aug 30, 2014 at 2:55 pm
on Aug 30, 2014 at 2:55 pm
@greenacres - that is vey creative, but the last we heard, Jisser was not planning on selling the land, he is planning on developing it himself.
Crescent Park
on Aug 30, 2014 at 2:56 pm
on Aug 30, 2014 at 2:56 pm
Last heard, the property is not for sale. Jisser plans to do the development himself.
Green Acres
on Aug 30, 2014 at 3:08 pm
on Aug 30, 2014 at 3:08 pm
That may be so, be most people have a price. And giving Jisser cash now, saving him a lot of uncertainty and headaches, allow him to make other investments now, during this boom, has value as well.
It would be a business negotiation. If an agreement could be reached and the money could be raised, it's one worth pursuing.
It's also a win for Palo Alto in that we retain a whole community of long-time residents with a loyalty to this place, some diversity, the neighborhood school retains its stability and avoids getting another big boxy high-density high-rise at an already overdeveloped location, and people on every end of the political spectrum can be appeased: the residents can stay but without needing a huge subsidy, and the property would be improved.
Once again: Who will step up? We have so many people in this community with the heart and the skills to do this, there just needs to be one to make the commitment. If I could, I would have begun doing this over a year ago. If you can, if you think this is a good idea, please do it. Don't count on someone else to answer the call, then no one does.
Crescent Park
on Aug 30, 2014 at 7:23 pm
on Aug 30, 2014 at 7:23 pm
@greenacres - for the sake of argument, lets say everyone has a price. Here's is the math. At the low end, an almost 5 acre property zoned R-15 could easily build 60 units of housing. (5 acres could theoretically justify 75, but lets be conservative). Each of them sells for an average of $1.5 million (again, a conservative average for new housing, configured correctly, in the Gunn District). That's $90 million dollars in sales. Lets say that each unit of 1500 square feet cost $300 a square foot to build (which for a condo development is a really high estimate, it would probably be closer to $150-200 a square foot for the buildings). That's 27 million dollars to construct the buildings. And the family has spend 10 million on the land. So that's over 50 million in profit, at a very conservative estimate. And if I were the family, I would get my real estate license too....
Registered user
Old Palo Alto
on Aug 30, 2014 at 8:45 pm
Registered user
on Aug 30, 2014 at 8:45 pm
I find it hilarious that in one paragraph Greenacres is asking someone to "step up" then ends with "Don't count on someone else to answer the call, then no one does."
Green Acres
on Aug 30, 2014 at 9:38 pm
on Aug 30, 2014 at 9:38 pm
@PA Moderate,
I have an idea, I am sharing it in hopes that someone will take it up, since as I noted, I can't.
Making this point specifically "Don't count on someone else to answer the call, then no one does" is an important point to make something like this real to people who might be inclined to consider it. There's something called the Bystander Effect, and it works in online broadcasts and community organizing as well. People who would otherwise help think someone else will do it, and as a result, no one does. Reminding them of this phenomenon overtly seems to counter the effect. Glad you got a nice laugh, though, humor helps people remember and perhaps you'll pass the idea on to someone who will act.
@palo alto resident in Crescent Park,
The calculation will need to be Jisser's. But, developers lose their shirts if they only make the most rosy calculations, and I'm sure the lender for the construction loan isn't going to either. It's not a 5 acre property, it's 4.5 acres. In RM-15, the max is 15 units per acre, but it's a transition zone that is supposed to be on the lower end next to R-1, which this property is. So, in the Maybell neighborhood, no, I wouldn't think anyone could "easily" expect to build the max there, especially since the neighbors will be incensed if anyone tries to use an excuse of "affordable housing" to build more density there after evicting all those low-income residents. In fact, that's a really good point, because there is a City Council election, and even if the City tries to boobytrap the Housing Element for developers, residents can sue and one way or other, the Housing Element will probably be given final approval only after we get new Councilmembers who could and probably will make more resident-friendly building policies.
There is risk in delay, and a bird in the hand as they say. I'm not saying this would happen, but anything's possible. What if residents of the mobile home park and immediate neighborhood started an initiative to adopt a 2-story overlay zone? That would essentially mean even fewer units would be built there in order to make them a salable size. Jisser could well find himself caught in all kinds of trouble when he tries to subdivide, too.
If you are a developer, you do have to be conservative, and if Jisser only gets to build, say, 45 units, at $1.5 million each, and using your estimate of costs, if you also consider the cost of the eviction process, the cost of construction loans... it can start to make $30 million cash in hand where he can go look for another opportunity immediately, while the market is hot and without the headaches, look pretty good.
I do not know Winter, but as she noted, this isn't over yet, and there are many legal protections that will be invoked between here and evicting the residents that will be expensive for Jisser. In the meantime, Jisser has to pay his lawyers. This is a much more risky endeavor than many I can think of, especially if the timing puts him outside of the peak of the market.
I'm not saying I'm correct in any of the above. I'm just saying, people lose their shirts all the time by being too unrealistic about what they're going to make. Minimizing risk and having his capital to optimize timing of the market is another part of the calculation. I'm sure there are others, probably on both sides. The point is, its definitely in the realm of being worth exploring, especially if someone has a way of crowdsourcing the capital, quickly.
Barron Park
on Aug 31, 2014 at 8:16 am
on Aug 31, 2014 at 8:16 am
@Greenacres - you sound like a dreamer. you somehow want something that is not for sale to be sold. its obvious that the owner does not have a problem paying the lawyer. they have been in the fight for a few years now. Further for you and I, these costs seem outrageous, but for people that invest with $50 million legal fees and such are minimal to say the least. If money was an issue why hasnt the owner raised rents on the tenants yet?
It will be very difficult to have the owner walk away from $40 to $50 million in profit.
Green Acres
on Aug 31, 2014 at 9:23 pm
on Aug 31, 2014 at 9:23 pm
@Jane,
It's not clear that there is that much profit here, that's the problem. If there were, it's unlikely Prometheus would have walked away.
You may be right. You may not be right. The point is, none of us knows the calculation. It's silly to think any of the above rationalizations, yours, mine, mean anything. No, it's not obvious what the owner's internal financial picture is, especially since until recently, he was in a development agreement with Prometheus.
If people thought like that, Measure D would never have happened, because neighbors were told it was a done deal, former mayors said winning a land use referendum was impossible, etc etc.
It's definitely worth trying for the sake of the BV residents and our community. You also never know what someone will do until you put the cash on the table. My point above is that somewhere in this community is someone who could put together a new way to help spare low-income people in expensive, rapidly gentrifying areas from being displaced. A new way that avoids a lot of the old controversies and problems. it could be a college student. It could even be a current resident of Buena Vista. There are many people who will help such an effort, what's needing is the person who will drive it.
Measure D happened because there are so many people in this area willing to chip in, and they will pitch in for something like this if asked. (Sadly, they would have preferred to pitch in for something positive rather than having to just fight a negative, but that's water under the bridge.) The Stanford Graduate School of Business will often help facilitate connections. FOBV has many members of the community with diverse skills, all who can pitch in or find people who can pitch it.
it's worth a shot.
Crescent Park
on Sep 1, 2014 at 11:22 am
on Sep 1, 2014 at 11:22 am
@greenacres - Prometheus is in the business of building and then renting apartments, they knew they wouldn't be able to get the zoning changed and I suspect that's why they back out of the contract. I
While your funding ideas are very creative, they would require a great deal of work. Has anyone from FOBV contacted Mr. Jisser to see if he would be willing to consider an offer? Measure D had a clear potential outcome, therefore people were willing and able to get behind it. Fundraising to buy a property that is not even for sale is another deal altogether.
Green Acres
on Sep 2, 2014 at 12:06 pm
on Sep 2, 2014 at 12:06 pm
@ palo alto resident,
You make some good points. But if Prometheus thought they couldn't make money without a zoning change, then you have to question whether someone else less experienced developing the property under conditions Prometheus didn't like is so likely to be profitable either.
I want to be clear that most of the people who initiated Measure D were interested first in entering into a working group process instead, formal or informal, to hopefully create a better outcome for everyone that wouldn't have involved overbuilding in the neighborhood, that would have taken into account the safety concerns, and that would have produced the desired low-income housing, but perhaps even saving the orchard. That's a lot of work, too, and they were initially offering as citizens to be involved in it, some providing evidence of previous civic engagement outcomes as evidence of the impact they could make. Everyone hated having to be engaged in such a negative process and would far rather have spent the energy working for a positive outcome. Some residents individually tried to do this behind the scenes initially, many eventual Measure D people organized into groups to talk to each City Council member about a vision to take such an alternate path, etc. The suggestion there might be a better way to accomplish the goals just got us all called NIMBYs, and our offers of engagement were dismissed.
Measure D had clear potential outcomes because that's how the people who were involved in it work: has out a clear path and get there. Most would have preferred that path to have been a win-win but when that option couldn't be achieved, they moved to plan b and plan c. Measure D was not anyone's first choice.
I am not privy to what is going on behind the scenes at FOBV, they seem to be keeping things close to the vest probably for good reasons, so I don't know what their plan is, but I suspect they have plans and alternatives and are working through the process they must work through in the meantime. Even if the owner does not think about the very real potential for FOBV to effectively fight a development, whoever finances him will. Clearly Prometheus with all their resources thought about it, too. Prometheus is also for sure thinking of an altered development landscape after the Nov 2 election, which also increases their risk.
I do think contacting the owner to see if he would consider an offer if one has the concrete ability to raise the money fairly quickly is different than contacting him just to feel him out.
Putting together a crowdsourced way of helping to circumvent the usual problems and buy up property as outlined above to prevent the displacement of low-income, long-time residents in the face of rapid gentrification, help them build some wealth while maintaining affordable areas in high-value regions, is a really good goal to work for anyway. As I said, it's a very different situation coming to the owner with the ability to offer the cash, quickly, versus just blowing smoke. Building this capability is a good thing anyway.
If you are reading this, and think it sounds like something you could do, I implore you to get involved, and aim for finding a way to save the mobile home park residents' homes, in a way that is a win-win for everyone. It is at least worth making a sincere effort to try to do. It is the kind of positive social endeavor that could also MAKE someones high-tech career. Someone accomplishing this would get SO much positive exposure...
Again, I'd like to point out: if you think this is a good idea, don't think someone else will do it, that's what everyone thinks and then nothing gets done. Do it! Get involved. You will not be sorry. There are many very accomplished people in this community ready to lend helping hands.
Green Acres
on Sep 2, 2014 at 12:08 pm
on Sep 2, 2014 at 12:08 pm
@ palo alto resident,
Oh, to your point about raising money. That's the beauty of a crowdsourced organization with the purpose I outlined above. People make commitments, and everyone agrees in advance, but they aren't really charged the money unless the deal goes through. It's a much more flexible and nimble way of raising money than for traditional deals. Crowdsourced real estate is already being done. This would just be specifically geared to help save low-income residents communities from being displaced, and to help provide for improvements.
Crescent Park
on Sep 2, 2014 at 12:26 pm
on Sep 2, 2014 at 12:26 pm
@greenacres - your last post answered one of my biggest questions, if money is not collected unless the deal goes through, that makes a lot of sense to me. Regarding Prometheus - for them to use the property for their business - rental apartment complexes - it required rezoning. For anyone else to develop it under current zoning, there is still a huge potential for profit.
Crescent Park
on Sep 2, 2014 at 8:33 pm
on Sep 2, 2014 at 8:33 pm
I don't recall reading anywhere as to what Jisser plans to do with the property. My guess would be to build something other than an apartment complex...units that can be sold.
Barron Park
on Sep 3, 2014 at 11:13 am
on Sep 3, 2014 at 11:13 am
The Jissers only own the land. Why should they have any say in this issue??? That seems to be the consensus around Palo Alto.