City Hall Diary
Last week, the council spent 90 minutes deliberating the sale of a 0.19 acre parcel of surplus downtown property for $450,000. The current tenants, the Arab American Community Center and the Indochinese Refugee Center, are nonprofits who pay $12 a year in rent (month to month) on an expired lease. They were notified in January 2006 about the city’s plans to sell the property.
The city is selling the property “as-is” and the new buyer is paying for all closing costs. The buyer offered $85 per square foot, even though surrounding parcels are appraised at $70 per square foot, and has even offered to give the nonprofits $20,000 each to help with moving expenses.
During December 2007, when the outreach for the 2008-2009 budget started, the city polled San Jose residents and asked them a variety of questions regarding the budget. The top response from those polled was that residents wanted the city to maximize its assets, such as selling surplus land.
The math seems pretty simple to me regarding this parcel: $450,000 vs. $12. Perhaps my calculator is not working correctly, but I think $450,000 will go much farther in keeping city employees employed and providing some street maintenance than the current $12 can.
When the issue of selling surplus property first came to the council late last year, I had concerns. I wanted to make sure that we did not sell land that the city might need in the future for a firehouse or park. I also wanted to make sure that we were getting fair market value. In the end, the council voted to sell the land and the new owner has even offered to allow the nonprofits to stay until the end of they year.
The council spent a lot of time questioning if the city was being fair to the nonprofits. My answer to that is: YES, we have been very fair. Allowing nonprofits to have building space for $12 a year is very fair indeed.
However, while on the dais, I couldn’t help but think about all the other deserving nonprofits. Should the council favor certain ethnic nonprofits over ones that help troubled youth and/or seniors? Do the residents of San Jose (those folks the city council represents) want the council to provide land at well below market value to nonprofits? Or, do the residents want to make sure the city is paid fair value for land it sells? Should the council “fill up” the Old City Hall with nonprofits and never maximize the value of the land?
Perhaps the City of San Jose should place the Old City Hall, Hayes Mansion, Rancho del Pueblo and Los Lagos golf courses on the ballot for November 2008 as an “advisory vote” which would allow ALL voters in San Jose, not just special interest groups, to provide direction for the council regarding real estate matters.
I’m not familiar with the piece of property in question but, generally speaking, I’m wondering;
1) Why is the property “surplus”? What DID the City use it for and why did they quit?
2) Is $12/year the best the City can do?
Pierluigi—Sort of tells us for sure what we all suspect—that the San Jose City Council is entirely inept, except for you. Nothing wrong with your calculator; mine comes up with the same answer, exactly. If the discussion took 5 minutes it was way too long. 90 minutes?? Please. George Green
Sell all surplus land that is not needed for any strategic purpose. $12 a year!!!
We worry about city finances as they affect the character, integrity and function of this city. If we forsake those in favor of the budget, then said budget becomes worthless. Paying for more street repairs due to housewives romping in suburban tanks is not what I’d hope San Jose to be about. Community outreach (based on ethnicity or not*) is more important in my mind. Perhaps anyone opposed would rather live in Palo Alto, where their surplus just sits around until a new housing tract needs a playground.
*I actually saw the testimonials that day and the people speaking were of many different cultural backgrounds.
Pierluigi,
The City Council needs to start focusing on all “not for profits” the furnish large sums of money to. Some are for very good causes and funding needs to continue, others maybe not?
There was a large list of “not for profits” presented to the City Council one Tuesday nite a couple months ago. The Council has not reviewed the list and should. The list is quite large and gets up in the big dollar amounts.Each recieves several hundreds of thousands of dollars.Many have the capicity of raising their own money but go to the City because the City has been an easy mark in the past.
I believe a review by a City Council and Citizen review team should begin.We have budget problems.
#1
How do we distinguish which are better? Is it the role of the city to do this work or is it the county? Which specific ones do you believe the city should stop funding?
#2
Originally the property was bought to widen the actual street. The city certainly could have collected more rent then $12 however it chose not to do so.
#3 City staff(public works)did a good job here. However with all these surplus land decisions you leave it up to an elected body which brings in the politics thus the extra time for discussion.
#4 Do you believe are parks strategic?
#5 Yes I believe about 12 people spoke that day with from a variety of backgrounds.
Pierluigi:
Yes, let’s have an advisory vote…and be sure to add the IStar/soccer stadium question.
pete campbell
Pierluigi,
You are correct – the community did ask during the neighborhood budget priority session and subsequent public outreach meetings to review surplus property to provide income to the city to offset cuts that could diminish our core services, ie public safety, park maintenance, street repairs, etc. We have come to a point where tough choices have to be made and I am alway appreciative when the larger picture is looked at when making these decisions. In answer to your question- yes parks are strategic- they provide value to our city now and will continue to do so for many many years.
Lost me on the math there.
$450,000 for 0.19 acres is $54 per square foot, not $85. Noticably less than you said the nearby properties sold for.
How much will that advisory vote cost the taxpayers? Over $450,000? I’d rather my elected representative represent me in those decisions in exchange for the salary they receive. I’d hope they know more than I do about how to balance the city’s budget.
It’s like that commercial: “I stayed in a Holiday Inn Express last night and now I’m ready to make complicated, strategic long-term land use and financial decisions.”
Anyway, didn’t the sale pass unanimously? The council did its job. So what if it took 90 minutes.
#9
Good observation.
The difference in the $/sq ft. calculations is related to the future “right of way” the the purchaser will be dedicating and improving(free to the city) The .19 acres (8276 sq ft) sold at $450,000 comes to $54.37/sq ft. However the purchase agreement requires future right of way dedication for widening Park Ave which leaves 5300 sq ft. So in essense they paid $84.90 sq ft. for the 5300 sq ft of usable property.
WG Resident #10:
I agree with you in that our elected reps should make these decisions however if we spend a couple hundred grand and put in on the ballot,then the sale could reap double digit million dollar net return for the city. Problem is as stated in the blog is that the council is unable to vote on what is right for the residents because interest groups sway them. What should have been a obvious 5 minute vote to make $450K turned into 90 minutes of speeches. I could only imagine the vote for selling old city hall would take days if not weeks. An advisory vote would make the council vote for what the majority want.