On April 18, 2006, the City Council unanimously approved the Guadalupe Mines General Plan amendment, changing the zoning from Research & Development to Residential. At that same meeting, the Council debated other industrial conversions along Old Oakland Road/Rock Avenue, and voted to convert all of the employment-land parcels that night to housing.
Now, four years later, on Aug. 31, the Council heard a proposal for housing on the Guadalupe site for 89 single family homes. The issue for many who spoke at the meeting was that this piece of land is against a creek and the city’s Riparian Corridor policy should be adhered to. (A riparian corridor is another term for a waterway. The purpose is to make sure that developments are not built right next to a as a creek, river, etc..)
Although the internet is great for providing maps and aerial views, I prefer going out to the sites of land-use items that are on the council agenda. I drove through the existing neighborhood across the street from the proposed development to know more about it, and finally drove and walked the parcel.
The thing that struck me is that I saw many parked cars. I looked up and recognized the name on the building, Monolithic Power Systems (MPS). MPS is a $240 million analog semiconductor company whose global headquarters are in San Jose. I went into the lobby, introduced myself and asked for the Chief Financial Officer (CFO). While I was waiting, I noticed people were coming in for job interviews. I later found out they had 11 open positions they were hiring for this location on top of the 160 current employees in San Jose.
I met with Richard, the CFO, and he gave me the history of the company which started in Los Gatos and then moved to San Jose. MPS ranks as one of the fastest-growing companies in Silicon Valley. The CFO told me they like the location and would really like to stay, but they understand they do not own the property. They like the location so much they offered to buy the building—and an additional vacant building, even though they did not need it to sweeten the pot. So they put in an offer for the market price for R & D office space and a housing developer put in a bid as well, based on building houses. We know that housing trumps jobs for the cost of land. So the private property owner chose the higher bid.
The CFO understands they will have to move, so I asked what about Edenvale or North San Jose? He responded that San Jose is not on the short list, as they have looked at properties in other cities based on where executive management lives.
Understanding the rezoning was done four years ago, I could not vote for housing knowing the city of San Jose would lose a corporate headquarters and 170 really well-paid jobs. As a result, I voted ‘no,’ as I did not want to associate myself forcing a technology company to move out of San Jose. My colleague Councilmember Kalra also voted ‘no,’ citing concerns from the dais about the development being too close to the creek. Final vote was 8-2 in favor of housing.
PS: I highly recommend seeing the documentary The Tillman Story at the Camera Cinemas. It is the story of San Jose native Pat Tillman. It is a must- see and good on many levels. Do not wait for Netflix.
Only put housing and industry in the downtown area only! The city should stuff all the development downtown to make it vibrant and realize that their investment would payoff. The city makes the same lousy mistakes by pinning the downtown against the city’s outlying areas like what they did in case of Santana Row(retail) and North San Jose(office/industry). The city must just focus on the downtown area only and forget the rest of the city’s outlying areas. Downtown needs all the attention it can get, or it’ll die.
dur:
Just so you know, I have placed the word “vibrant” on the banned words list as unsuitable for use in discourse with regular Americans.
Similarly banned words are:
spew
outreach
pristine
green jobs
I have instructed my internet browser to ignore these words and replace them with “expletive deleted” whenever they are encountered.
I find that it improves the intelligibility of many postings.
San Jose’s decades long ” build in downtown economic stupidity” or you can’t build in San Jose while wasting billions economic development tax money that should have built infrastructure, attracted and retained businesses in other San Jose areas why we have budget deficits, more city employee layoffs and less city services than other Silicon Valley and most large business friendly California cities
Corporations, hotels, retail stores, shopping centers and other tax generating businesses have many choices on where to build or locate other than undesirable San Jose downtown
They have and will continue to take their companies, jobs and taxes to other business friendly cities because of San Jose’s business unfriendly very high taxes, fees, costly and unpredictable city approval process making budget deficit greater
What city in Silicon Valley does not have enough business and jobs for it’s residents resulting in lost taxes revenues making budget deficit greater ? – SJ
What city in Silicon Valley for decades restricted large hotels, shopping centers, retail stores and economic development tax funds to downtown while watching millions taxes and thousands of jobs go to other more desirable business friendly neighboring cites making budget deficit greater ? – SJ
What city continues to waste millions on downtown development that most residents and businesses in Silicon Valley do not want to visit or locate in losing more businesses to other cities making budget deficit greater ? – SJ
What city has a recent shopping center that a few uninformed residents still thinks was a mistake ( even though no shopping center developer has for decades or will invest in downtown ) that produces more tax revenues than all downtown ? – SJ ‘s Santana Row
What city continues to convert industrial property to residential losing millions tax revenues since homes cost more than businesses in city services and incurring millions in greater city service costs making budget deficit greater ? – SJ
What city continues to have a few uninformed bloggers, local rag columnists and few residents ignore economic facts, California tax policy and continue to advocate wasting more taxes on downtown and development restrictions that result in businesses and jobs leaving that will make budget deficit greater ? – SJ
What city has not learned from the pat mistakes and continues Economic Stupidity of driving businesses, jobs and taxes out of town that created decade of city budget deficits and continues to make budget deficit greater for unneeded residential development ? – SJ
What city will have more city employee layoffs, worst streets. more closed libraries, parks and community centers and higher crime, emergency medical deaths and more buildings unnecessarily burn down due to continuing budget deficits ? – SJ
Just another example of what has gone one for years to bring San Jose to the financial position it is in. It is especially disappointing that the Mayor and Pete Constant voted for housing over jobs. San Jose continues to repeat history, while Santa Clara and Sunnyvale continue to bring in the jobs. I know, lets blame the city employees, especially the safety workers.
Pierluigi, can you play devil’s advocate for a second and explain why other council members voted for this?
Perhaps because the law defines what the Council can take into account when voting on a land use decision and they need to vote on the merits of the project, whether or not they support the potential impacts associated with their votes.
That sounds quite far-fetched. If the Council members vote against a land use decision on the basis of a reason other than those you assert the law allows them to decide it upon, who is going to do anything about it? And how would such an agency prove what was in the heart of the Council members?
I do not believe there exist any laws which limit how a Council member can vote on an issue that comes before the Council (except for those which pertain to bribery, conflict of interest, etc).
Planning politics….train your planning commission and council to be technocrats who perform regulatory functions and compliance rather than serve a representative role in a democracy.
There’s so many stupid rules made in Sacramento that they would virtually have to act this way, which is not how our representative political system is supposed to work.
Anyway…housing generates quick profits for developers (and politicians) as well as city (planning department relies on fees charged to developers.) Housing vs. other uses (industrial/commercial) has a lot to do with fiscal health of the city. Towns with more business and less housing generate more income tax revenue. Thus converting land to housing from industrial or commerical is actually sabotaging the city’s financial future for short term profit. Hmmm….
What is disgusting is Council’s self serving political behavior against public interest when Council knows that more homes will increase budget deficit and that San Jose needs more not less businesses and good paying jobs
Council voted
– against public interest and planning department but
– for lobbyist who brags he and his residential developer clients give more campaign contributions to Council than any group in San Jose and
– for increased budget deficits, future layoffs and service reductions
Disgusting self serving Council political behavior to lose 170 needed good paying long term jobs for more developer and lobbyist profits and a few months of construction jobs especially disappointing that the Mayor Reed and Pete Constant for voting for housing over jobs.
The Guadalupe Mines Road housing project, like all other residential housing projects should never have been allowed to occur.
It is my opinion that there are already too many people in this valley. Those that have needed skills will always find a place to live and work here. The “housing glut” in San Jose is a legend all into itself.
So, I am always skeptical as to motive when I hear government officials raise “jobs and housing” issues and never talk about loss of services or the fact that San Jose is the fastest growing slum in Santa Clara County.
Congestion in all forms is now accepted as “commonplace”. But, the bigger issue here is the water supply.
Your Honor should be keenly aware as to the precarious state of the Santa Clara Valley Water Districts forecasts.
By allowing more more residential housing, local governments will intentionally exacerbate the water crisis forcing “toilet to tap” water for drinking and cooking purposes.
As your Honor is also keenly aware, the “toilet to tap” issue is thinly veiled via the “Advanced Water Filtration” project.
This project, a “water utility” by any strecth of the imagination is funded, wrongly, by the Sewer Service & Use Charge. But your Honor knows that most citizens do not.
Your Honor and I do not agree on “growth related issues”. That’s fine. But the state fo the water supply, cannot continue to support residential housing growth therefore a “sewer hook-up moritorium” is the only solution viable for the foreseeable future.
David S. Wall
Simple, make a pact with nearby cities so they won’t try to take businesses or recruit businesses from San Jose. Then, San Jose can shove all the businesses and housing downtown. Downtown needs all the businesses and housing it can get without interference from within the city boundry and nearby cities.
Not only was the vote a foolish one for a city that cannot provide services to the housing they already have, it also was an attack on the environment. The Riparian Corridor Policy was enacted for a reason—to protect our creeks and waterways and the wildlife that inhabits them. It also adds to the quality of life by protecting the natural beauty of these passageways.
Unfortunately, time and time again, the Council only supports the policy when it is convenient and ignores it when they want to allow building to encroach on the corridor.
Thanks to you for “no” on this project. Too bad you couldn’t get more than one vote to go along with you.
dur
You are either naive or simplistically unrealistic with your downtown ideas and solutions
Others cities are not in control of where businesses locate or relocate to
– Please think before you comment on San Jose Inside since you are embarrassing yourself with your comments
” Better to remain silent and be thought a fool, than to open your mouth and remove all doubt.”
Thanks Pierluigi. I am not sure I agree with your vote on this matter, but I appreciate and respect that you take the time to explain why you vote the way you do.
Well, it’s rare that I agree with PLO, but in this I have to acknowledge that he did the right thing with his vote. With fewer police officers in San Jose than there has been in the last 20 years, the last thing we need is more residents absorbing more city services. Part of the reason that San Jose is in its current financial bind is because it is hemorrhaging business left and right and favoring residential development. The only way that San Jose is going to get out of it’s current mess is if it becomes a more business-friendly environment and radically cleans up its budget system.
I visited the site after the council meeting too.
It’s not that bad of a deal. In its current state, the parking lot rides right up to the creek. The proposed plan will tear that out and restore it to nature (at least 100’)
The houses will bring jobs. During the building phase we’ll have plenty of contractors and their lackies hammering away. Local cement companies will make a few bucks. Building inspectors, insurance agents, and other non construction types will even have a cut of it.
After the building phase these houses will need maintenance. Again, some lucky guy or gal will be tending the lawns here.
These houses will also bring in a nice chunk of property tax. Being that I am a homeowner, I get stung twice a year by my house tax, so I know how much it is. 10% of your overinflated assessed value. $89,000,000 in value, $890,000 a year in property tax revenue.
Finally, some of the land is going back to the public. They’re going to build a trail along the creek. I love these types of trails.
“These houses will also bring in a nice chunk of property tax. Being that I am a homeowner, I get stung twice a year by my house tax, so I know how much it is. 10% of your overinflated assessed value. $89,000,000 in value, $890,000 a year in property tax revenue.”
You raised something I was wondering. Everyone seems to think it’s bad that San Jose doesn’t have as many jobs as it has people, i.e. we house the rest of the Silicon Valley. But does anyone know the actual numbers for which brings in more money to a city: residential or commercial property?
Assume the number of jobs within driving distance of San Jose stays the same (this company moves to Santa Clara, for example) and that people actually buy these new houses. What’s the difference in revenue?
Well the difference is this…
MPS provides us with business and sales tax. Now the bigger question is, how much?
IIRC business tax is $75 per employee (I know PL will jump in here if I’m wrong). So MPS with 179 employees will net us $13,425 in business tax. A real drop in the bucket.
Sales tax is where they really make money. Looking at the MPS site…
http://ir.monolithicpower.com/phoenix.zhtml?c=181789&p=irol-newsArticle&ID=1453297&highlight;=
Net revenues of $55.7 million, an increase of 10.8% sequentially from $50.3 million in the first quarter of 2010 and 35.3% from $41.2 million in the second quarter of 2009.
So let’s just round sales tax up to 10% (it’s getting there soon anyways) MPS sales tax is around 500k@year, almost 300k less than what the houses would bring in.
There has to be other things to factor in. How much does it cost in services per resident? Does that eat up the rest of that $300k? I doubt it..
So in this instance, housing does do better for San Jose. I’m looking forward to my new park trail.
It’s questionable whether or not the City of San Jose derives much benefit from property taxes that are collected by Larry Stone, the County assessor. The process by which the revenue is distributed is at best pretty confusing to the non-wonk layman. I’ll freely admit that I don’t get it. Ask Blair Whitney. He’d know. Blair Whitney. The name just sounds like a genius doesn’t it.
But don’t forget to consider the fact that as more housing is created in a buyer’s market, the effect is to devalue ALL properties so even though it may appear that there is extra revenue from these 89 new houses it may well be offset by the slight decrease in value in all the other 400,000 properties in the city. The net increase in revenue might be zilch.
This whole line of discussion is pretty lame anyway. Should we really be basing land use decisions on how much money the City government is going to get? Is that how great cities are created? How much revenue will the City get? Jeez. We’re doomed if that’s the way we think.
“This whole line of discussion is pretty lame anyway. Should we really be basing land use decisions on how much money the City government is going to get? Is that how great cities are created? How much revenue will the City get? Jeez. We’re doomed if that’s the way we think.”
Ah, I forgot. Poor financial decisions and deficits make great cities. My mistake.
John Galt Said:It’s questionable whether or not the City of San Jose derives much benefit from property taxes that are collected by Larry Stone, the County assessor.
Same could be said for the sales tax derived from MPS’s sales, except that getting the money from the State Board of Equalization is probably a lot harder than Larry.
Blair WhitneyFundamental systems are broken, and repealing Prop 13 or term limits won’t fix it, though many think that’s the place to start.
As much as I’d like to say yes to that (split some of the tax burden) I feel the right decision is a solid no.
My grandmother has lived in her house for close to 50 years now. She’s on a fixed income, and there is no possible way she could afford to live her without prop 13. Same goes with my in-laws, my father, etc. If any of them got the yearly tax DING I get, they’d be hurting.
I need all these people around for myself, my kids. It’s nice being able to drive 10-15 minutes to see Grandma/Great Grandma. Not everyone is in the same boat mind you, but a good percentage are which is why prop 13 will stay for the foreseeable future.
I agree that its small thinking to base big decisions around local government revenue (sales tax versus property tax potential.)
But let’s play devil’s advocate here – some would say don’t sweat the small stuff, think big while others would point out that attention to detail and the small stuff adding up is most important. We’ve built this city without paying much attention to the bottom line, assuming future revenue like an entitlement rather than something earned. Lots of little land use decisions add up to big policies. Honestly San Jose was and is a bedroom community (first for SF and now for Silicon Valley.) There’s a good bit of business and jobs, but not as many as there could be. What does Santa Clara, Cupertino, Palo Alto and others have that we do not? A better job/housing mix – which worked because we subsidized them in a way by building the housing needed for the workers in those towns.
The problems and I suspect the solutions are bigger than the boundaries of the city jurisdiction. Regionalism could help, and maybe some honesty in Sacramento. Fundamental systems are broken, and repealing Prop 13 or term limits won’t fix it, though many think that’s the place to start.
Why the surprise? The city’s buying up occupied, tax-paying and worker-employing businesses’ land right now to…hold, in case just maybe a for-profit sports team might want to build a stadium there someday. Yes: your money’s going to buy property, level buildings, displace tenants and…sit quietly waiting for a baseball stadium. Hey, at least someone gets to live in housing.
The San Jose Department of Housing staff are paid *way* too much to make mistakes, so I have to think this decision in Guadalupe Mines—like all of their others—is sound and reasonable. Like the judgement call to stop supporting the rotating church shelters for the homeless. Now there’s more people living on the streets, but the staffer in charge of faith-based housing initiatives is still collecting more than $100k/year. That’s smart government in action!
Dur fool, you’re right! The business community, along with the people of this valley, make the decision, and they’re embarrassment to the whole world since the rest of world cities concentrate on their downtowns to make it a happening place for people to gather and socialize. The business and the art communities thrive there. The only other place like San Jose is Detroit of the 1970’s.
I won’t comment on this particular project but this discussion is very interesting.
Here are several quotes from the city’s 2020 General Plan, which was approved in the 1990s. These are in the same section and are not taken out of context. I removed some sentences referring to supporting tables and reduced redundant sentences that support the same points.
“The City of San José does not have sufficient fiscal resources to provide desired levels of City services, due in large measure to the fact that there is an imbalance of jobs and housing.”
…
“A basic premise of this Plan is that San Jose’s fiscal deficiencies can be improved under the current local government revenue structure only through attaining a better balance of jobs and resident workers. This means, in effect, that there needs to be more new economic development than new housing development.”
…
“It is unlikely that San José will achieve a perfect balance between jobs and housing given past development patterns and the slower rate of growth anticipated in the future. San José, however, must make every effort to improve its jobs/housing balance and prevent any further deterioration in this balance if it is to provide adequate services to its residents.”
So the basic problem facing San José has been well known for some time. Its really a problem of a housing/jobs imbalance. Its’ more complex than this statement, but basically the revenue from housing alone (even high density housing) normally doesn’t pay for a high level of services. Other cities either have much lower level of services or a much better job/housing balance. And of course you can find exceptions to this because of specific economic situations (i.e. a gambling center hooked up to your General Fund, etc..).
I’m not even going to try to answer why more hasn’t been done to fix the core issue. Perhaps Pierluigi Oliverio could comment? I’m sure it might have something to do with the enormous pressure public officials are under to provide housing in the city.
Hi Norman,
I have written about the jobs/housing imbalance from time to time like this article: http://www.sanjoseinside.com/news/entries/1976_2009_same_problem/
Overall I believe the City should only build housing where it zoned residential and preserve industrial and commercial land.
Steve,
As mentioned before the City is annexing a portfolio of county pockets based on a court settlement with the County of Santa Clara. I agree with you that some of the annexations pockets have high crime and poor infrastructure while other county pockets are low in crime and have good infrastructure.
Pierluigi Oliverio,
Yes, I read that article. Right on target. You nail this issue.
We still have a long way to go in understanding and agreeing with good urban design strategies. Half is education and half is political will. Its not left, right, liberal or conservative, just smart planning. The General Plan 2020 spelled it out and I think the new General Plan will also say pretty much the same thing. We need to fully grasp the design issues and have the will power to implement what we know is right. The pressure to build housing, even ugly subdivisions, in this town is unbelievable. The pressure comes from all over the political spectrum.
Having all this in mind it is mind blowing that the city has annexed over 40 neighborhoods from the county in the past few years, especially since many of these are high crime areas require an inordinate amount of resources from our police department.
There’s no substitute for physically going to a place and learning firsthand with your own eyes and ears. Thanks for the conscientous effort Pierluigi. Your vote was the right one.
Why is it that San Jose’s political history is defined by one Council after another that seems determined to inflict a perpetual housing glut on us?
Were the wishes of the people represented by this 8-2 decision? The several comments above are obviously not statistically meaningful but you can see a trend there. I’ve never had the feeling that my rep, Judy Chirco, gives a hoot what I think. So I’ve got to wonder just what forces are at play guiding these seemingly illogical and unpopular decisions. And what of Chuck Reed’s supposed committment to keeping commercial zoning commercial? And of his insistence that San Jose is a “green” city. How “green” is it to allow a housing tract on the banks of one of the few natural creekways left in the City? What the heck’s going on here? Is it simply spinelessness? Since there’s no strong passionate advocacy opposing the development it’s just easier and more comfortable to go along with it?
Voice of Reason indicated that Council is bound by law to only consider certain things when making these land use decisions. Is this true? What law are we talking about? Does this mean that Pierluigi was breaking the law by voting no? Does Council have no discretion at all? Does a City have no ability to control development?
Decisions like this are why I am voting for Larry Pegram for city council. Mr. Pegram is a fiscal conservative. Mr. Pegram is also the founder of the Values Advocacy Council which promotes traditional Christian family values. This includes sound fiscal decisions based on the writings found in the Bible. Mr. Pegram will also not waste taxpayer money on Gay Pride events, family planning (ie abortions) etc.
Matthew,
You must be a religious zealot like Mr. Pegram. Lest you think he is a financial wizard, here is a link to an interesting article regarding the Values Advocacy Council, which Pegram started. Most of the money raised goes to his salary, and it has been run in the red for several years. No thanks on Pegram; bad choice by Mayor Reed.
http://webcache.googleusercontent.com/search?q=cache:8sFEKy-z4MUJ:watchdogsiliconvalley.blogspot.com/2010/03/values-advocacy-council-deficit-ridden.html+pegram+values+advocasy+council&cd=1&hl=en&ct=clnk&gl=us
Ahh, the sweet smell of success… the pimp, with a pocket full of ethically compromised politicians.
Wow, quite a stretch to get to why you are voting for a former councilmember and current religious zealot. As if this vote made any difference to your blind allegiance to Pegram.
We get it that you are anti-gay, anti-family planning, etc. Is there anything you are for that would not force your religious views on others who may have different beliefs?
Why only 89 homes? This shows the absolute short-sightedness of San Jose “leaders”. I bet they could have easily placed 300 units at this location. We need to think big, otherwise we will never get out of this fiscal hole.
We need to run the city, and state, like a business. Remember, while we might lose a little with each new residence, we can make it up with volume.
“Teachable Moment”
Okay, the council sold out, you had it right, got out voted, and now we’re losing a great company. What can we learn?
Did you ask the CFO why SJ was not on the short-list of new locations? What is it about the business climate that makes companies that started here want to move as soon as they can (or must?)
Can we take an honest look at that for a minute? I know Brocade got the redevelopment hook-up with their new campus. What about others?
Could we spend some time researching what real and perceived issues are with the business community and make some changes to improve the climate for them? It could actually be the biggest pay off for the smallest investment the city could make to improve its business climate.
Seems like we don’t have to let the public agenda be driven solely by the circumstance of our times (deficits, pensions, union contracts, etc). We can still think big and work towards a better future even in bad times and part of that is improving the job to housing mix.
There’s talk about doing something and a few trophy projects like Brocade, but let’s dig a little deeper. Ask small and medium sized businesses what the city could do to make things easier for them.
I suspect that there’s also a piece with real estate speculators here also. We have affordable housing in terms of social equity (although usually far below the unmet need), could we also consider affordable business spaces in the name of encouraging new and developing business?
Vacant commercial and industrial complexes are a blight. Putting them into use as incubators would generate economic activity. Growing business would generate sales tax revenue that more directly benefits the city than property tax.
Right across the street from the new Brocade is another empty commercial complex with a nice sign up talking about future residential development. What are we really doing in Redevelopment zones?
Blair WhitneyVacant commercial and industrial complexes are a blight.
So are schools with temporary structures. I think before any money is put into building new corporate HQ’s, we should eliminate all school temp buildings.
> I think before any money is put into building new corporate HQ’s, we should eliminate all school temp buildings.
What tortured logic makes a connection between corporations building headquarters buildings and schools eliminating temp buildings?
Just eliminate the lunkhead politicians and educrats who justified and built the temp school buildings.
Maybe some of the OSHA money pissed away on the stupid “Susan Harwood” grants could be used to eliminate the the temp buildings.
http://www.osha.gov/dte/sharwood/2010_grant_recipients.html
We have what, 10,000,000+sqft of empty office space in San Jose? I think if they want to stay in San Jose, they have plenty of options.