Tired Of Backroom Deals?

By Guest Blogger Alex Marthews

After a midnight vote at City Council last week, San Jose is slated to lose the finest of its historic canneries, Del Monte Plant #3. With this decision, we have all lost.

We’re not losing the cannery because it can’t be saved, but because of a backroom-dealing culture at City Hall that shuts out inconvenient truths: for example, that KB Home was using 2003-2004 sale prices for housing units that would actually be sold in 2008, making reuse of the historic cannery buildings seem less profitable than it actually is. Whatever scandals the City faces, whether over Tropicana, Cisco contracts or bottles of Opus One, they happen because our civic leaders make a bad call before the public process even begins, and then will not listen to other opinions whether they are right or not. We, the residents of San Jose, get stuck with the consequences: hastily approved projects that scar our city, and our taxes wasted as the City spends time and effort trying to defend its poor decisions.

We shouldn’t have to force the City Council to esteem San Jose as we do. San Jose, even without either BART or a ballpark, is a great city with its own great traditions. We have over three thousand identified historic buildings and five historic districts. We should all be proud of that heritage and want to protect it. Instead, the City Council kowtows to developers who care nothing for our city or our people, destroying our own city in order to save it. Were it not for the Preservation Action Council, we would have lost River Street, the Montgomery Hotel, the Jose Theatre/Comedy Improv – the buildings that help make this city worth living in at all.

If you believe the way we do, and if you’re tired of the City Council doing backroom deals instead of listening to its residents, go to www.preservation.org and join us.

Alex Marthews is the head of the Preservation Action Council of San Jose.

38 Comments

  1. Actually, the deeper we and our consultants looked into it, the more profitable it got. Our initial estimate was a profit of $10-$12 million, but we revised our calculations of appreciation to include actual appreciation 2004-2005 and then only 3.1% appreciation 2005-2008, with 5% annual increases in costs. That created an expected profit of roughly $22.2 million, quite independently of the other revenue-generating and cost-saving strategies we identified, so the real figure could easily be more.

    This isn’t exactly a matter of “split the difference to find the real figure”. This is a matter of KB Home, consciously or unconsciously, failing to factor in a basic thing, appreciation, that they should have factored in (or, which is the same thing, assuming that the nominal value of the units they sell in 2008 will be the nominal 2003-2004 value). This was a problem that the Planning Department, in internal documents we have obtained, also identified, but that did not make it into their memos to either the Planning Commission or the City Council.

  2. I would be interested in knowing how much “participation” council members or their family members (or even staff members) recieved from KB or their subsiduaries in return for the vote.

  3. Ask youself of the the people running for supervisor, Cohn, Yeager, and Lezotte, who got KB Homes money?

    Did Chuck Reed who will never admit to the Ceppos relationship story, and who will not admit to his contributions from KB Homes, also did their bidding.

    KB Homes told people, apparently, why go to planning school, we have people doing planning with no college background.

    Yeah, we know, they have a background in spreading the checks.

    go to http://www.kbhomesucks.com

    Today, I challange Reed, Yeager, Lezotte, and Cortese to respond to the following:

    a)  Who among you received KB Homes money and why?

    b)  What is the connection between them and ceppos

  4. When you elect a former Sunnyvale councilman mayor of San Jose what else do you expect.  We have a man leading ( well maybe) San Jose who has no interest in it other than being a politican and running for some other office.  Can’t wait to see where he’lll go from here.  How do these things happen?  Lets elect people with some sort of love for our city who have actually lived here for a while.

  5. With all the non-transparency and backroom deals that go on in this city, isn’t it ironic that a glass structure was chosen for the new city hall?

    Wouldn’t a Northrup designed stealth black box have been a more appropriate choice?

  6. I am hearing more and more people in casual conversation about local politics that this is the worst mayor and council in recent, and even not so recent memory.  This decision on the Del Monte site is another example of the corruption and back room dealing that is going on.  And Mr. Yeager was leading the charge on this one.  He won’t get my vote if he runs again.  We can’t do any house cleaning before this current batch of losers moves into their new digs, but it needs to happen with the next election.  Incumbents need to be thrown out.

  7. As there was not space above to do it, I would like to commend the three City Councilmembers who had the courage to oppose this project – LeZotte, Chirco and Williams.  They felt that the negative impacts of the project outweighed its benefits, and they were right. None of my comments about the Mayor and City Council with respect to this project should be presumed to apply to them!

  8. I wonder how many of the PAC people ever worked inside the Del Monte Cannery? For those who cherish this “historic” site let me tell you what it was like: hot, smelly, and very noisy. The work could also be both dangerous and repetitious. The pay wasn’t bad, but the work was seasonal. Most who worked there were glad to get out.
    There is a lot of San Jose worthy of preservation. But dirty old factories? Tear them down, build the much needed housing and instead concentrate on preserving farmland in Coyote Valley…our real valley heritage.

  9. Do you remember 1961?.  Downtown SJ was vibrant and filled with historic building.  In 1962 and after, the city demolished most of the old buildings and turned downtown SJ into garbage by 1965 with little or abandaned building in the name of evil renewal.  The downtown never recovered and is still in the dumps because so many old buildings were lost. They don’t know how to revitalize downtown.

  10. Del Monty,

    A bunch of our members did work in the canneries. Most people who have been in town long enough worked at a cannery at some time.

    We’re not just going by our own opinions here. We go by the opinions of professional, qualified historical consultants as to what is historic and what is not, and if they say it’s not, we don’t try to protect it. Does that seem fair to you?

  11. First, I don’t think that whatever KB builds, from scratch or saving some of the existing buildings (assuming some pushing and shoving takes place to accomplish that) is going to be hot, smelly or noisy.  They are building modern homes, not another factory.

    Smurf, you’re correct that the urban renewal craze of the 60’s took a serious toll on downtown SJ.  However, it could be much worse.  Santa Clara leveled their downtown, which at this point with similar leadership could be a lot like what Campbell has going.  But they didn’t save one building.  Look at Franklin St. now.  It’s not even there, it’s a parking lot, and Santa Clara has no city center or heart left.  At least in SJ some of our downtown was saved.  We have a long way to go but it could have been so much worse if SJ had done the same as Santa Clara. 

    Just trying to look at the glass being half full, and it’s all relative.

  12. Alex,
      “Professional, qualified historical consultants” aside what, in your view, makes these old factories “historic” to the point where the buildings must be preserved to the exclusion of other development?  How would converting the interiors of the buildings into condos, or other uses, serve any real historic purpose? Isn’t some change healthy? 
        I’m glad some of your members did time in the canneries, although I don’t share the nostalgia. In fact I’m willing to be that none of them would want to go back!

  13. To say that “downtown is still in the dumps” is depended on which time frames you are comparing.  The change in downtown since the 1960’s is both dramatic and positive, but in no way perfect evolution.  To claim that the reason for your perceived notion that downtown is still “in the dumps” is “because so many old building were lost” is absurd, complete over-simplification of the complex problem and solution of revitalizing an ailing area. 

    Many buildings in this area are historic.  Some of these are worth savings at all costs, most must be weighed against the pros and cons and be considered be demolishment.  One of the main arguments against saving these buildings that I have not heard on these boards is the amount of housing that is created by tearing these buildings down versus reusing them.  As housing prices soar, you lucky homeowners, there is an ever-growing affordable housing shortage that can be hindered by in-fill housing.  If there were significantly more units to be built by demolishing these once important but not so beautiful buildings then I, for one, might be for it.

  14. When you move to the valley from somewhere else – a couple of things strike you.

    You’re struck by the mind boggling numbers of strip malls that are *everywhere* and the sheer lack of planning or anything of charm or character.  So you ask yourself, “Who was in charge that allowed this place to get so screwed up”?

    Then when someone tells you the place used to be all orchards or was the first capital of the state or…  you’re kinda surprised and then you realize that there are very few clues about the history of the place to be found.

    And then you watch this weeks city council meeting – the lightbulb goes off and you go “Oh that’s how it happened!”

  15. Del,
    Alex might disagree but if SJ had a wealth of historic buildings to save through adaptive re-use, you probably wouldn’t be hearing as much protesting over Plant 3 as you are today. Not a whole lot less, but maybe a little.
    The sad truth is that decision makers past & present have knocked down so many historic buildings that we’re scraping the bottom of the barrel around here to save anything that’s old and/or speaks to the one enduring identity this town did have during the course of its history, and Plant 3 meets the criteria.

  16. One other thing. 
    Is there anyone out there who thinks the conservatory James Lick intended to build in Santa Clara would still be in use and intact if it actually ended up being built there?  My guess is that it would have been allowed to decay and the City of Santa Clara would have declared it a nuisance and demolished it.  That structure is the showpiece that it is today because it ended up being built in San Francisco, a city with far more sophisticated leadership and electorate.  They’ve made their share of mistakes up there, but this area just didn’t have the level of sophistication in its civic leaders and electorate then, and it still doesn’t now.  So decisions to bulldoze pieces of history or significant architecture are opposed by a relative few and nobody worries about being voted out.  That’s the recipe for The World’s Most Boring Big City as our next handle.

  17. One of the things that our City has hurled out the window in its haste to make all things new is the fact that San Jose is actually in the USA.

    Patriotism aside, take a look at recent investments in public art to see how much is Americana and thus links San Jose to the USA. Precious little.

    Check out the public art scheduled to place around the new City Hall and see if you can identify Americana suffficiently forthright to tell us even what country the new City Hall is in.

    http://www.sanjoseca.gov/newCityHall/publicart/index.asp

    The anti-Americana impulse is alive and well at the Office of Cultural Affairs.

  18. Many of us have visited other cities – San Francisco, Portland, Seattle, New Orleans where the revitalization of their downtown or older areas near downtown was primarily due to reusing historic buildings and we have a number of outstanding local historical reuse examples utilizing private and public tax funds..

    The Del Monte site historic reuse argument is primarily over whose cost calculations are correct – KB Homes who calculated a $2.6 million loss using 2003 unit sales prices or Preservation Action Council showing a $10 million profit using 2006-8 sales prices . The reality is probably somewhere between the $ 10-12 million difference in estimated profit / lsoss and really won’t be known until the units are build and sold.

    San Jose has a public historic reuse policy and the City Council appointed Planning Commission and Historic Landmarks Commission both supported historic reuse of 3 of the Del Monte buildings but eh City Council did not due to the developer projected loss..

    Our current public historic reuse policy voices support for historic reuse but lacks:

    1) A complete city wide historic building inventory so a developer can know prior to starting if they will have to deal with historic reuse cost / profit /loss issues
    2)A method for evaluating or determining what are the actual costs and profit / loss of a historic reuse project

    3) A method of providing partial financing with a cap on public tax funds or a profit / loss sharing agreement where between the city and the developer to be done when the project is completed under very specific circumstances and conditions if a potential developer calculates a historic reuse project and the Planning Department agrees with the calculations of a forecasted loss so we do not in the future have to approve proposed projects that demolish San Jose’s history when the developer estimates he can not make a profit but will not know until the project is completed

  19. I have a great historical solution / compromise!

    let’s put the buildings on rollers and drag them down the street to the new land just bought for the ball park.  We can use them as duggouts and locker rooms.  Rememeber the barn storming days of baseball.

  20. Creating infill housing is an excellent thing. Adaptively reusing the historic buildings, in this case, would have created more units of infill housing than the project KB Home proposed. You don’t have to do a teardown in order to give the next generation a chance.

    Truthfully, though, as a member of that “next generation” who cannot afford to buy here,  no amount of infill housing will reduce the prices of starter homes or condos to a level that we can afford. So I keep renting!

  21. This one has me befuddled, (and yes I have worked in canneries, albeit a long time ago.)  I live near this site and find it hard to love.  History is great and fine architecture should be valued.  I am not hopeful that the homes built here will have any lasting features… but one.

    They will fulfill a long held and, “not so secrot society plan” to explore in-fill housing over additional invations of the green belt.  These are not secret back room deals nor are they new and quickly developed.  This is an Council, (with whom I rarely agree) actually doing its job.  Creating work, creating housing and doing so in an area that most would consider blighted and under used.

    Are we really ready to close the city to growth?  Do we feel we can support our region and its resources with long comutes by polutting vehicles?  that is hte answer?  Are we really having this conversation?

    Tear ‘em down and give the next generation a chance to plant roots here.  the first homes are the hardest to get.  Help em out.  Let new opportunity be the one victory of this project.

  22. First Timer,

    Adaptive reuse of the cannery buildings, according to KB Home’s own analysis, would have resulted in at least 18 additional units of housing, because lofts in a historic building take up less space than new townhomes. If you wanted to take the density as high as it would go without the additional costs of steel construction, then our figures suggest you could have as many as 129 additional units of housing relative to KB Home’s project, but it would not be as profitable as doing only 18 extra units.

    KB Home doesn’t like dense. The parcel is zoned for 40-100 units per acre, and they came in at 40.44. We are fully aware of the desperate need for housing, and this is one case where preservation would have created more housing.

    Del Monty,

    The intention is not to “exclude other development”. The intention is to have a both-and situation, where the building is reused for housing, just as happened at Del Monte Plants #14 and #51.

    Some change is certainly healthy – we’re not suggesting that a cannery reopens on the site, because that can’t be done – but reusing the building for housing is simply more efficient than tearing it down and building new. You say, “professional historic consultants aside”, but that is the measure we use: otherwise it would be simply us saying, “we like this building so save it”!

    Mark T,

    We have lost a lot. We only have to look at old photos of downtown to realize how much has gone. But what is left is still worth saving. The Del Monte cannery is not just something special to us: along with Plants #14 and #51, it is eligible for the National Register of Historic Properties. They don’t make that assessment for bottom-of-the-barrel properties. The sad thing is that we are too ready to assume that, just because something is in San Jose, it must be bottom of the barrel in historic terms. What we’ve got is way better than that!

  23. When is the last time anyone went down Auzerais to check out the Del Monte Cannery Buildings?  Just ‘cuz it’s old doesn’t mean we have to pay taxpayer dollars to poreserve it, especialy when we are cutting police, fire, libraries, etc.

    You folks at the Preservation Action Council: if you are so convinced of its value, do what sempervirens does—raise money and buy it.  Until you’re ready to put YOUR money where your mouth is, sit down, shut up, and stop picking my pocket for your pet project.

    John Michael O’Connor

  24. Mr. O’Connor,

    A. Did you not read the bit above that said that there was no question of using taxpayer money for this project? We weren’t asking the City to contribute a dime. Check your facts before you accuse us of “picking your pocket”.

    B. The City themselves attempted to buy the property from KB Home for a ballpark, but decided that the cost of $30 million was too high for them to stomach. If the City, with its vast annual budget and huge resources, couldn’t afford it, how do you propose a shoestring nonprofit to manage it? We have an annual budget equivalent to one-seventh of the median price of one average-sized single-family home in Santa Clara County. So don’t tell us to buy a property like that when you know it’s flat-out impossible even for the City itself to do.

  25. Mr. Marthews, what planet are you living on?

    You say the citizens of San Joise get stuck with hastily approved projects?!  Nothing could be further from the truth.  Nothing is hasty with San Jose government.  The council moves at glacial speed, as do the planning and the building departments.

    It has taken one friend of mine nine months to get approval of a 360 square foot addition to his office.  A dowtown restaurant with an “unconnected” owner is eight months behind in a project for just tenant improvements to an existing building.

    Mr. Marthews, if you and your fellow preservation nazis want to preserve a building, do what the Sempervirens Society does—raise some money and buy it.  Stop filing lawsuits to save old ugly buildings at taxpayer cost.

    Look at The Fallon House.  It was supposed to cost under $3million.  But our misguided leaders applied for a $1million state grant, which added $2.5 million to the final cost due to the conditions placed on the grant.  Only a government employee could make such a costly mistake and still have a job.

    And the paint is already peeling in many places.

    John Michael O’Connor

  26. Mr. Marthews:

    My mantra remains the same—if YOU want it preserved, YOU buy it.  Whether it’s government money buying something to preserve it, or people placing obstructions to development, the issue remains the same. 

    As is clear from the numerous comments above, not everyone agrees with your view of what is worth preserving.  So, gather up all your busybody friends and tell them to put their money where their mouth is if they want to preserve some old rickety steel building…and buy it.  What do you want to bet that you wouldn’t raise enough money to keep KQED broadcasting for one day, let alone buy the buildings to preserve “history”.

    Otherwise, please just go away until your pocketbook matches your rhetoric.

    John Michael O’Connor

  27. Mr. O’Connor,

    I dislike intensely the casual and unthinking use of the term “Nazi”. It is not right of you to apply such a term to me, and you should apologize.

    I have monitored closely the practices of the City government when it comes to major development projects, and the pressure to move forward with them quickly (and often uncritically) is intense. I am sorry that the Planning and Building Departments have been less responsive to your friends.

    We do not file lawsuits frivolously, but only where the City has clearly violated the California Environmental Quality Act. We have never lost a case.

    It may be frustrating for you that that Act requires more careful review of projects than you consider to be appropriate. Nonetheless, it is the law, and if you don’t like the law, you are at liberty to try and change it. Meanwhile, if we observe violations of that law, it is not only reasonable for us to hold the City to account for it, but our duty.

    The costs of the lawsuit are paid by the losing party in the suit, and if that happens to be the City of San Jose, then I would say that they should have avoided incurring the cost by avoiding breaking the law. If you want less cost to taxpayers, go to the City and ask them to adhere to the law.

    Let us say that someone wanted to demolish your home to build a freeway, and violated the Environmental Quality Act’s provisions on public process to do it. By your argument, you should solve this not by holding them accountable for violating the law, but by paying them not to build the freeway through your house – a viable solution, if you have several million dollars to spare. 

    When it comes to what is and what is not worth preserving, we do not use our own views, but the views of qualified historic consultants. Whose views do you expect us to use – your views, or the views of someone who has spent their whole career evaluating which buildings are historically significant and which are not? Whose views would you use in our position?

  28. Mr. Marthews:

    “Qualified historical consultants”?  What does that mean?  People with an axe to grind using other peoples’ money?

    You held up the construction of the Taj Gonzal employee garage to save that slum of a building that stood on part of the site?  What “qualifiied historic consultant” passed on that deal?

    Tell that to the hundreds of men and women who will be working in the Taj Gonzal ,who have been told that ,pending construction of the new garage that you and your ilk delayed for so long ,they will have to walk as far as the Market Street garage for parking—through a guantlet of druggies, rapists, losers, and perverts that inhabit the space between the Taj Gonzal and the temporary parking that is many long dark blocks away.  Are you and your friends going to protect them, especially the women, from rapes and muggings during their walks in the dark during winter?

    Weren’t you guys the ones that “saved” The Jose Theatre?  I have friends who grew up here that said it was a piece of S$% in the 50’s; but your “qualified historical consultants” knew better, I guess.

    You have the right to your opinion, as do your “qualified historic consultants”, but you do not have the right to pick every taxpayer’s pocket to accomplish your personal agenda.  You don’t speak for me, or the general public.  You speak only for your personal clique.

    If it’s worth saving in the view of your “qualified historic consultants” join with them, raise money, and pay for it.  Don’t make the rest of us pay for your hobby.

    John Michael O’Connor

  29. John – Generally when you don’t know what you are talking about it is better not to go public with it. You conveniently neglected to include in your ramble that the entire delay was caused by the city because they submitted an inadequate EIR (read illegal) despite receiving numerous warnings that their document was flawed. When the city refused to correct the flaws the courts made them do it, causing the delay. Arrogance and/or ignorance is no way to run a city government and this one does it all the time.
    As for historic buildings, you should spend some time reading what makes a building historic or not. Your opinion nor my opinion does not make a building historic.
    If we all subscribed to your line of thinking, SJ would be even more bland and Anywhere USA than it already is.

  30. Historic B.S.! The Del Monte site is as historic as my 2005 Mercedes. Not at all. The Mayor and the Assessor are after the money available from K B Home. ” Gosh guys, we tried to get a MLB team here so that we could spend a lot of tax payer money to build a baseball park but, we couldn’t pull it off.” Now we need to get our money from K B Home so they can put housing in. Better housing than a baseball field scam. But, isn’t a scam a scam?

  31. after the gonzales garbage ‘‘merger or aquisition ??’’ in the backroom why is anyone surprised to learn that the fox just got into the henhouse again!! san jose allows this worm to operate as he pleases with no regard for the city that was duped into electing him   !he gets away with self serving scam after scam knowing that no one has the time to do anything about it that will cause him any real harm rather than doing his best work to lead san jose he has time after time chosen to exploit our city to his best advantage and still we continue to let him operate freely with no official oversight did the city council ever study the possibility of buying the del monte parcel and leasing out the massive empty buildings to an indoor flea market enterprise? the new campbell los gatos light rail line actually crosses one corner of del montes auzerais warehouse and if no public parking was available flea shoppers would have flocked to the trolley line in droves!! park and ride lots througout the county would finally be used to their potential >light rail would finally have a reason to run the trains >>and do so at a profit!! local residents would see a minimum impact on their neighborhoods since shoppers would step off the light rail onto the loading dock of the flea market warehouse >if any one doubts the profitability of the flea market farmers market biz check out the crowds that visit the berryessa and capital sites regularly >neither of these sites will be there too much longer and both have to maintain over half of their property just for car parking>this is just one brainstorm and im sure there are others the council should have considered before the doors wrere closed and the special interest money started to do its political dirty work >we all know that fear of being censured will keep our beloved mayor on the up and up >>right >maybe the council should have required gonzales to wear an orange elmwood jumpsuit while doing city biz untill that long awaited day when he takes his pension check and runs off to sacramento to start a new and improved mob operation

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