City Hall Diary
Last Tuesday, we considered whether to continue preliminary discussions with the Redevelopment Agency (RDA) and three private property owners regarding San Pedro Square. The issue under consideration was should RDA spend money to do capital improvements like sidewalk widening, streetscapes and loans to rehab older buildings in the area.
Let me first talk about the elephant in the room, former Mayor Tom McEnery. I think it’s pretty well known that his family owns a chunk of the outlying property at San Pedro Square.
I do not carry Tom’s water; nor do I share his puritan views on nightclubs or past fears of Santana Row. In fact, I support a livelier downtown and frequent Santana Row on a regular basis. However, as someone who has lived in downtown, I do share a vision that it can and will be home to people, businesses and social gathering spots. I have had this vision since 7th grade, when RDA visited my school and brought in the physical model of our future downtown.
So should the city collaborate with three property owners who are willing to invest approximately $15–21 million of their own money above and beyond RDA’s $6 million?
City governments have complex and confusing pots of money and rules on what the money may actually be spent on. Some money can be spent on people (police, librarians, code enforcement), and other money can be spent on capital projects (roads, equipment, building construction). Even more confusing, some money may only be spent in certain geographic areas to acquire property or build things, like in “redevelopment” areas or the Strong Neighborhood Initiative (SNI) neighborhoods. (SNIs cover 1/3 of the city where we have spent $60 million on capital improvements.)
The question of “Return on Investment” (ROI) came up since the amount is more than $1 million. The idea brought forward would add retail on San Pedro Square and St. John Street by creating an urban market similar to, but not the same as, Pikes Place in Seattle or the Ferry Building in San Francisco. In addition, we would create a walkable attractive paseo highlighting the historic Peralta Adobe of 1797 and the Fallon House of 1855, which are hidden gems of our downtown.
ROI is a loosely thrown-around term and is always up for scrutiny based on what criteria you choose to measure. ROI has “hard” measurable aspects like saving dollars, eliminating costs, and new sources of revenue, etc. And, on the other hand, “soft ROI” can be an externality of the main benefit. The investment makes it possible to leverage future dollars from future investors. For example, we do façade grants to make businesses look nice in the downtown and in our neighborhood business districts. Outside of looking nice, there is a hope that because of these façade improvements, more private investment will occur in this area. These façade improvements individually require less than $1 million, but the aggregate costs are well over that amount.
When it comes to ROI, we are sometimes kidding ourselves because we try to stretch it to make us feel good. Unlike the Grand Prix (that came and went, costing the city a loss), we have investments like this one where we actually get to retain physical improvements to the area. Sometimes we do things without instant ROI
On the one hand, we could continue to do nothing because it’s the McEnery family’s property and let only nightclubs downtown. However, nightclubs do not bring nor create the family friendly downtown that we are looking for, as Councilmember Chu stated at the council meeting. The central question is: Will this investment—regardless of the owner—provide benefit for the downtown core?
To the North of San Pedro Square, the city has planned several residential towers that will help this proposed development succeed by joining newly opened residential towers, Axis and City Heights. This is an exciting opportunity for San Jose and I am confident that all of these components together will bring more life into downtown.
The final proposal will come back to the council around October.
The bigger questions I ask again are: How should we spend our RDA dollars? Should we spend it only on economic development where there is ROI? If so, do we stop funding any items that do not generate sales tax, hotel tax or utility tax?
Here are some downtown building and restoration projects that were done because of the RDA:
Adobe Headquarters, Convention Center, Hilton Hotel, Marriott Hotel, Fairmont Hotel, Children’s Discovery Museum, Tech Museum, California Theater, Hyatt Sainte Claire, De Anza Hotel, Jose Theater, San Jose Museum of Art, San Jose Repertory Theater, six office buildings and seven condominium developments.
Can we move the International Swim Center in Santa Clara to San Jose and get it funded there??
Oops, that was Au Nguyen’s issue. Well, sorry I hijacked it.
Let’s build recreational airports like Reid-Hillview in the middle of all neighborhoods.
Why should only the residents of East San Jose be able to walk and/or bicycle to their airplanes? That just is not fair to the rest of us.
Also, why should only East San children benefit from the inspiration given off by these airplanes? Children in other neighborhoods also need to be inspired so that they can be equal to the children in East San Jose.
The city and its redevelopment agency lost all credibility after all the efforts of revitalizing downtown with no result. They went, “if we build the Tech, Pavilion, the Fairmont, HP Pavilion, and the Convention Center, downtown will be vibrant.” Isn’t it a mirage? Oh, if we build one more office building or 4 condo towers, downtown would be dandy! Gee, the only way to revitalize it(downtown) is overbuild the downtown area with highrises and midrises just like Manhattan; then, maybe, downtown be vibrant. However, the lenders are kings, and they will never allow that kind of dense development for anywhere in San Jose. It’s a lost cause with absolutely no prospect for a lively downtown San Jose-no way, Jose! I promise you, so stop dreaming or contemplating it. I garantee it! If you want reality, you stick with my fact, or you can be lost in mirage forever and fall over the cliff.
So, was it RDA $$$ or Dept. of Cultural Affairs $$$ that installed the red lacquer “tree” in St. James Park today?
We have truly shity roads, not enough cops, and yet there are $$$ to fund this nonsense.
These “complex and confusing pots of money and rules on what the money may actually be spent on” you speak of need to be dismantaled and the $$ need to go to priorities as expressed above, not feel-good/ PC crap. We need BASIC SERVICES, and the rest will have to wait.
Just had to say this, #4, but your senario would have to be the other way around:
“Let’s build up neighborhoods around all recreational airports”.
San Jose International was built next to an existing neighborhood. Reid Hillview was there when the east Side was built up like it is.
You are asking how RDA money should be spent? Isn’t that question about 30 years and $3Billion too late? Can we honestly believe that putting 6 million into San Pedro Square is going to bring some pazazz to downtown? Isn’t that what the Pavilion was supposed to do? Wasn’t that what the Blues Club was supposed to do? Wasn’t that what all the subsidized hotels and chain restaurants was supposed to do? Wasn’t that what a million dollar merry go round in the Hobo camp was supposed to do?
For $3 Billion we could have bought a major anchor department store (and all the little retail would have flowed in) we could have built a new hospital, we could have moved the airport allowing downtown to have real high rise (and thus be a BIG city), we could have dredged the Guadalupe and made downtown a major seaport, hell we could have done a lot of things and as it is there isn’t even a decent place to buy a pair of socks downtown.
Can we be honest with ourselves? I love San Jose but really in many respects we’re a second rate city when it comes to cultural amenities. The 10th largest city in the country with one of the highest concentrations of wealth and yet we are very poor when compared to that place up north, Whatcamacallit.
Why is this? Up there people pay their RDA money for the privilege of putting up some new high rise or hotel. But not in San Jose, Noooo, here they wait for a fat subsidy and then half the time they skip town and even take their theater seats with them. Or they’ll say the busisness climate is bad and come back for additional subsidies. Has the well of commerce and free enterprise been tainted?
For all its wealth San Jose is a poor town. We lost a terrific art museum director to Milwaukee, a much smaller town but with a art museum budget three times ours!! Of course culture depends on private giving and with all the silicon money around here one would think that lots of that comes here but in fact it goes north to Whatcamacallit up there. Why is that?
I think San Jose needs to quit trying to be what its not and build its own character and image. We are the oldest civil settlement in California and we should act like it. I don’t’ see anything wrong with the San Pedro project but stop pandering to the big out of town interests and make San Jose San Jose again. Fix what few historic structures we have left and highlight them. The Peralta Adobe and Fallon House are a good start, showcase them and finish rebuilding our town clock. It’s a historic landmark and has been ignored for 100 years.Of course there is something wrong with San Jose. Collectively we don’t even know what time it is!!
Do this, make San Jose unique and the hotels and department stores will come without the RDA handouts and they will thrive and then we will be a really great San Jose.
Sockless in San Jose
Dear Pierluigi:
The RDA was set up decades ago to eliminate blight. There is no blight in San Jose, how can there be when we are in the middle of some of the most valuable real estate on the planet? Of course, there are areas and lots that are run down, but these areas could also be rejuvinated by simply creating tax free zones rather than running a bloated agency that has essentially become its own franchise.
A quick comment on Return On Investment. Consider: If the city receives one cent of the 8.25 cents sales tax, that means that a given project would have to generate 100 times the amount of the city’s investment just to break even! (I realize that RDA money is a different story, and that the RDA is paid back via tax increment). But, I believe that this simple set of calculus…(let’s call it “The Rule of One”) should always be measured and considered.
This will be an unpopular opinion, but . . . I’d like to see surveillance cameras, face recognition software, and instant police tip-off if you are a known troublemaker entering downtown at night. Three strikes, you’re out. Technology donated by local companies, installation paid for by RDA.
I’m not sure how it came to pass that the RDA has control over such an enormous chunk of tax revenue. I reviewed the RDA website and scrolled down the dozens and dozens of projects that RDA is funding and, with few exceptions they benefit specific, narrow groups of people- special interests. They are the kinds of projects that should be indulged in only by a City that is swimming in cash AFTER it has fulfilled it’s primary obligations like maintaining it’s sidewalks, street trees, gutters, storm sewers, roads, parks, etc., all over the City, for all the people, not just a select few.
Somehow, over the years, the arcane rules that dictate how City Hall spends money have been distorted to the point of defying common sense. Until this problem is addressed, settling questions about which special interest group gets how much is like rearranging the deck chairs on the Titanic.
San Jose is going down!
If the open question is “How can we spend the money”, then maybe it’s time to close the RDA and give the money back to the county and the schools. (Better yet, close all RDAs statewide)
RDAs rarely are focused on curing blight. More often, as in San Jose, an RDA is a pile of money burning a hole in the city’s pocket.
Certainly, the RDA funds projects that would never even be considered if the cash had to come out of the general fund.
Pierluigi,
I believe I have mentioned this before to you, but here is a good opportunity to remind everyone. Back in 2006 the RDA’s voucher program which basically reimbursed our parks department for park fees on affordable housing, sunsetted. As of today any affordable housing built and supported by RDA does not collect park fees. I would hate to see as we continue to densify our city that we don’t provide much needed park space and ammenities to those who truly need it. RDA should be looking at ways to contribute to our green infrastructure and reinstate a program to do that.
The Fallon House and Peralta Adobe get more RDA funds in the San Pedro Sq. project?? The Preservation “Action” guys are all in favor of largesse to McEnery, a letter to the editor in the Murky reveals, as if those two old “attractions” are the real reason for the improvement to the site, not an upgrade bringing the raggedy San Pedro scene into the present, as it hangs onto the past. If San Pedro Sq. doesn’t end up being trendy after 6M, OK by PAC nuts. And Tom encourages these fools. The lament that the old structures can be seen only by appt. overlooks the fact that during the time there were frequent tours, no one came. PAC has an orgasm over old, cracked peeling and mediocre “architecture”, and the dozens of volunteers who do help at Kelly Park, Fallon, etc., are a tiny minority. San Jose is NOT Charleston or Savannah, or even SF. St.James Park lynching is probably the biggest historical event in these parts. And
kicking Manny out of Manny’s Cellar to restore the history to Fallon House has proven to be a huge mistake. I say, kick Fallon out of the Fallon House and bring Manny back—when the place was a downtown destination, not an empty shell taking up space that could be put to better, i.e. a modern use. George Green
Greg Perry,
You are absolutely correct! RDAs have far out-stripped their charters. And the tax increment funds are forever lost to supporting basic infrastructure needs. It is indeed time to shut down RDAs statewide.
Pierluigi,
If the Peralta Adobe and Fallon House are truly San Jose “gems”, why are they never open to the public with regular business hours? History San Jose’s web site says that tours are available only by appointment.
When can we end the RDA? It is a scheme to take tax dollars and allocate them without a lot of resident over sight in the name of reducing blight. You mentioned Pikes Place and Ferry building as great places. They did not receive $6 million from their cities to create themselves. Good ideas stand on there own.
If you think it is a good investment because the rich families invest $15 million to get $6 million from the city, I assure you many businesses in San Jose will make that same investment for that kind of government handout.
The more politicians talk about change the more they stay the same.