Q&A with County Assessor Larry Stone

We tried to do a Q&A with Santa Clara County Assessor Larry Stone back in late March. That didn’t happen, but it wasn’t Stone’s fault—there weren’t enough questions at the time. But here we are, three months later, and we’ve got the tax man’s answers to a couple submitted questions, relayed in a telephone conversation, as well as his thoughts on the fight between the county and Redevelopment Agencies, the odds the Oakland A’s will relocate to San Jose and how he views the local housing market five years after the subprime mortgage crisis.

Q: What have you heard recently on the possibility of an A’s stadium in San Jose?

A: I’ve talked to Lew Wolff a couple times, and I don’t know what’s going on. Here’s what I think, and I really believe this is kind of a change of attitude of mine over the last six to nine months: I really believe Commissioner Bud Selig wants to make this move from Oakland to San Jose. I really believe he supports that. So, the only thing you can conclude is he doesn’t have the votes of the owners, because you have to have 70 percent support of the owners.

This is about market share; baseball just happens to be the product. The San Francisco Giants want to keep the A’s in Oakland, because they know they can’t survive there. If they keep them there, they know the A’s will have to sell or move, and then the Giants will control the entire Bay Area market.

What is going on with the county Redevelopment Agency oversight board and the fight over $30 million that was expected to go to the San Francisco 49ers stadium project?

I was one of a few people who attended the hearing the other day. The county has significant influence over the (RDA) oversight committee. What they were doing was essentially trying to cancel contracts that the 49ers had with the city of Santa Clara.

The point is that this whole process is not very transparent. Part of (the stadium funding deal) was on the agenda, but not the action that they took. The 49ers got a letter 24 hours before the hearing was held, saying what this oversight agency was proposing to do. They didn’t have much time to respond. It was technical so they contacted their lawyers. Then they contacted me about going.

There are also questions if the action to put the $30 million toward schools instead of the stadium was a violation of the Brown Act on public meetings.

This was a fast-track railroad job, not very transparent. The arguments came down to—they met the Brown Act requirements to holding the hearing, but the question is if they met Brown Act requirements to taking action on the agenda.

Aside from that, the meeting was a high-speed railroad job. One of the members (George Putris), he was arrogant; he tried to limit the testimony and presentation of the San Francisco 49ers to three minutes. The 49ers obviously have a significant financial interest in this whole issue. He was rude and that’s not the way we do business here. I completely understand his vote, he’s a member of the county staff here and I didn’t expect him to vote any other way. I’m not taking exception to his vote, but we treat people who are going to spend a billion dollars on a major construction project that creates jobs, we treat people better than that. It was embarrassing, and if he’s not embarrassed, I’m embarrassed for him.

What was the deal with that press release sent out by County Executive Jeff Smith over San Jose not telling the truth about its Redevelopment Agency debt?

Part of my testimony to the oversight board was: Where do we go from here? All of the complexity of unwinding the RDAs and distributing the assets and money they have means that the county and the city, both, need to stop looking at this issue from narrow interests. We need to think of the city and the county as one economic engine. I don’t think anyone benefits—not the voters, the economy and certainly not the school children—when local governments fight like this.

How have things changed since the housing bubble burst? Are we headed back to a similar place as housing prices continue to rise?

Prices are beginning to rise, but it depends on the geographic area. And the quality of the school district drives residential property values. The condo market is still very, very weak. Generally speaking, the condo market is still down. The realtors will tell you, and it’s true, they’re seeing multiple offers and sales above the asking price, and schools are driving a lot of that. But what does that mean?

You have houses in Gilroy and Morgan Hill that were selling for $1.2 million in 2006-07, and they dropped to $600,000. They might be up to $700,00 now and maybe even $800,00, but is that progress? Realtors are transaction-oriented but you’re still seeing sales at the levels of the high $600,000 and $700,000 range. That doesn’t mean prices have returned to before the Great Recession. Yeah, the housing market is improving, but it’s not anywhere near to where it was before the Great Recession. The apartment market, on the other hand, is on fire.

But would we want to even go back to pre-Great Recession levels since those prices were inflated?

Right, I agree. There was no way that market could be sustained. And part of the reason the apartment market is so strong is because the underwriting for home loans is so rigid. So, people can’t get loans today. Part two is that a large part of the economic growth is technology and a lot of people being hired are young engineers. Gen X and Gen Y folks today don’t believe, or many don’t believe, that home ownership is a necessary part of the American Dream anymore. So we’ve seen trillions of dollars evaporate through the housing crash.

Here’s a reader question from a few months ago that could still apply in the future:

I’m a week away from moving into my first house in Plant 51, a condo complex across the street from the planned stadium if the Oakland A’s move to San Jose. How will the new stadium and development impact property values in The Alameda region of San Jose?
— Steven

Well, if history is repeated, it should have a very strong impact on property values and property development. As a matter of fact, if you look at the impact Pac Bell Park, which is now AT&T Park, had on the south beach area of San Francisco, it was significant. Now, you can’t just put a ballpark in an undeveloped area. There has to be something there beforehand.

Pac Bell Park was clearly an incentive for young people to live there. And I think the same thing would happen here. I also think the downtown ballpark would be a catalyst to the downtown area. Office development, which has been practically nonexistent, would also be accelerated in San Jose and that would drive jobs and people living there. You need a balance to make a downtown work, and retail doesn’t come there yet because we don’t have enough people living there.

It’s been proven, not just in San Francisco, but also Seattle. I grew up in Seattle. The term “Skid Row” came from Seattle, and the loggers would cut the trees from the hills—Seattle is built on seven hills, very much like SF—and so these logs would have a skid and they’d send them down into the bay and they would be picked up there and taken by boat and barge. Well, these loggers were tough guys—a lot of prostitution, a lot of alcoholism. I grew up there and I know it used to be a real ghetto. But now, with the ballpark, there’s been a complete renovation of that area.

But it’s not all the ballpark. I think people who support ballparks and stadiums; they try to justify them on economic grounds. The 49ers stadium will be a financial success on its own, but libraries don’t pay for themselves, museums don’t pay for themselves. To be a major metropolitan area, like San Jose is trying to be, you need many different things. You need the Rep, the Opera, the Tech Museum, a world-class airport and a world-class convention center; you need venues like HP Pavilion and the California Theatre, public transit, freeways and parks. You don’t have to be a senior citizen to understand the value of senior centers—same with golf courses and tennis courts.

If you have a choice between professional sports and the arts, I would say the arts should come first. But some people like sports. It’s not that everything should be for everybody, but to be a major metropolitan area, you need the components of the things that I mentioned.

Here’s another reader question:

I keep filing out forms and calls to get a real property adjustment of my property taxes but no reply. Who do I need to call to get a real person on the phone? (My) property (value) has obviously dropped like everyone else in the valley. Why do you make it so hard?
— Rick Heller

The questions I always ask are: How long have you owned your property? Where is it located? And what type of property is it? I say to them: wait until you get your assessment notice next week, and if you believe the market value of your property is less than the value on the notice, contact our office, go online, and ask for an informal review. And between July 2 and the middle of August, we do as many of those informal reviews that we have time for. If we agree that you’re overassessed , we’ll make an adjustment. We proactively reduced the assessments on 130,000 properties, reducing the assessment roll by $26 billion. without being asked by the property owners.

Anybody who says they can’t get ahold of somebody in our office is flatly incorrect. And if you don’t, I want to know about it. Once in a while people get stuck on a loop, but very rarely.

14 Comments

  1. Oh you phoney petty Journos of the Silicon Valley News Group – SJ Inside and Josh. Shame on the lot of you.

    Lets see you openned up the piece accepting questions for SJPD Chief Chris Moore on 9/30/2011. 41 days later on 11/18/2011,  “SJI/Josh” published an article ripping Moore for not answering the selected questions and not returning his nswers in a timely manner – remember the funny picture with the duct tape in the form of an “x” over Moore’s Mouth???

    The 11/18 piece says that Moore submitted his answers to you on “sunday evening” 11/13 perhaps?
    (“We were holding out hope, though, that Chief Moore would find a quiet moment to answer the questions from SJI readers.”) Mocking the PIO Dwyer for telling you that the Chief is busy trying to run a PD… Then publishing Moores answers a whole 4 days later on 11/22/2011 – Lets see 53 days? from the time you openned up questions to the time you published Moores answers.

    On the other hand “questions for Larry” was openned up on 3/29/2012. Larry’s answers are published on 6/26/2012 – it only took 89 days. It took 36 more days for you to publish Stones answers and all yo ucan say is “We tried….” Youaccept all the blame for not getting it done in a timely manner?

    Was Larry dealing with 66 people laid off in his office? Near record homicide rates? Any of a number of other issues affecting the City and department for which he is raked over te coals on a daily basis?

    Meanwhile, Larry Stone is hard at work supporting Chuck Reed and Measure B, Busy talking to Lew Wolff, and collecting our taxes!..

    Josh / SJI / Silicon Valley News Group You get the Meyer’s award for maintaining an obvious bias.

    • Meyer,

      The difference between this Q&A and the chief’s is that we were told multiple times by the chief’s office that answers would be coming in any day. In this case, there were few reader responses and, admittedly, we lagged in getting Stone enough questions to make it a full post.

      Thanks for reading,

      Josh

  2. The SJ Merc News wrote an article some time ago that documented that County Assessor Larry Stone: “Santa Clara County Assessor Larry Stone also accepted tickets worth $350 from the team in August 2005 while he was exploring possible South Bay relocation sites on the 49ers’ behalf. The Mercury News discovered that Stone listed the tickets among gifts he received on an economic disclosure form, despite his statement in the San Francisco Chronicle on Thursday that he ‘paid for everything that I got from the 49ers.’  “

    Larry Stone also campaigned heavily for the 49ers stadium and was featured in campaign mailers (scroll down to see a picture from a campaign mailer):
    http://www.santaclaraplaysfair.org/index.php/component/content/article/35-whatownerswonttell/109-timelineapril2010

    Watch the video of the oversight committee meeting on the city of Santa Clara website.

    Measure J says that the voters approved ‘up to’ $40 million in redevelopment funds, not exactly $40 million.  The city already spent $10 million in RDA funds on the stadium.  Anything from zero to $40 million falls within the category of ‘up to $40 million.’ 

    The city agency which accepted the $30 million loan from the 49ers is the Stadium Authority.  Measure J approved by the voters says that neither the city nor the redevelopment agency are liable for the debts of the Stadium Authority.

    County Counsel said at the oversight committee meeting that the Stadium Authority was set up in a ‘funky’ way as a joint powers agency between the city and the redevelopment agency in order to ‘wash’ funds between the redevelopment agency and the 49ers, because the redevelopment agency could not legally give money to the 49ers.

    AFTER Gov Brown announced that RDAs were going to be wiped out (in Jan 2011) the city council created an agreement (the cooperation agreement of Feb 2011) between the Stadium Authority (SA) and the RDA to transfer funds from the RDA to the SA.  The SA has no income on its own, and no taxing authority – the 49ers were relying on the transfer of public funds from the RDA to the SA to pay off the loan.

    AFTER the Supreme Court of CA ruled in Gov Brown’s favor in wiping out the RDAs (Dec 2011/Jan 2012 timeframe) the 49ers decided to go ahead and loan $30 million to the SA – an agency without any assets or income and which they knew might not be able to tap into RDA funds to pay back the loan.  But they went ahead and took a calculated risk and stared construction anyway, knowing that all of the RDA money could go away (including the government’s right to claw back the $10 million that has already been spent.)  Perhaps the 49ers thought if they pre-spent the money they loaned the SA, that public agencies in line for a share of redevelopment dollars would joyfully give up the money to the 49ers.

    Anyone who thinks that the county/schools wouldn’t vote to keep the RDA property tax dollars didn’t pay attention to the Supreme Court case over the RDAs.  The City of Santa Clara/its RDA joined in a lawsuit with other cities/RDAs to sue the state to try to prevent the state from wiping out RDAs. The County of Santa Clara together with school districts in the County sided with Gov Brown and Att General Kamala Harris to in favor of dissolving RDAs. Why? The County and school districts lose tens of millions of dollars every year to redevelopment agencies, which siphon off property tax dollars, leaving public agencies struggling to fill budget deficits, making cuts, having furlough days, etc.

    At last Friday’s meeting, the oversight board severed the cooperation agreement between the redevelopment agency and the Stadium Authority, essentially stopping the flow of any public dollars to the SA.  This is not a contract that the 49ers are a party to.  The 49ers contract is with the Stadium Authority, not with the city of SC or with the redevelopment agency (which no longer exists.)
    County Counsel said that absolutely the oversight board has the right to terminate any agreement between the redevelopment agency and another city agency.  What they did was legal.  The fact that the 49ers and pro-stadium SC city council members/staff didn’t like the outcome of the vote is just too bad.

    The $30 million in debt belongs to the Stadium Authority alone.
    The oversight board cannot be sued (so said County Counsel last Friday.)  The city and RDA are not liable for the debts of the SA as voted into law by Santa Clara voters.  The SA has no assets and no income.  Who will the 49ers sue?

    The fact that the 49ers and SC’s pro-stadium council members and staff didn’t see this coming is because for the past 6 years, the pro-stadium council members have bent over backwards to please the 49ers and vote yes on everything the 49ers want – including letting the 49ers put forth the ballot language and through Mayor Matthews, a ballot question worded in favor of the stadium that didn’t disclose costs and read like an advertisement for the stadium.

    And I’m really embarrassed as a SC taxpayer to be paying into the salaries of our two city attorneys who spoke at Friday’s meeting and our city’s finance director. At a time when we’re furloughing city employees once/month and shutting down library hours, it’s appalling that they’d rather give money to a private party than to our city’s general fund and schools.

    Oh, and a careful read of today’s SJ Merc article shows that the $950 million in loans haven’t yet funded and the $200 million from the NFL hasn’t yet funded either.  This is the first time an NFL stadium has been completely debt funded.

    • The important thing we all agree that the stadium is a great deal for the county as well as, obviously, the city. Just think of all the money the city and county are going to net from this deal.

      • Obviously from your “handle”, you’re into self-promotion.

        “The important thing that we all agree that the stadium is a great deal…”?  What post did you mean to reply to?

  3. The area that the stadiums were built in Seattle is the “International District”.  The thing that the stadiums in Seattle and ATT Park in San Francisco have in common is the “International District” is next to Puget Sound, and ATT Park is next to the Bay.  Petco Stadium in San Diego is likewise near the waterfront too.  I would argue that any development in places like that would draw people.

    Downtown promoters look at what’s going on in Seattle and San Francisco and think it can be replicated here.  You only have to see how those big high rise condos have been selling to know San Jose is not San Francisco.  Let’s be realistic and stop trying to be San Francisco.

  4. Larry Stone’s comments are ridiculous. He said, ” The 49ers obviously have a significant financial interest in this whole issue. He was rude and that’s not the way we do business here. I completely understand his vote, he’s a member of the county staff here and I didn’t expect him to vote any other way. I’m not taking exception to his vote, but we treat people who are going to spend a billion dollars on a major construction project that creates jobs, we treat people better than that. It was embarrassing, and if he’s not embarrassed, I’m embarrassed for him.”

    Who is spending $1 billion? Not the 49ers. All they’ve contributed is a loan from the NFL. The rest of the money is obligated through hotel taxes and loans which will have to be paid off by the Stadium Authority. So, never mind the promotional push by Larry Stone. The 49ers are NOT spending $1 billion on the stadium project.

  5. Softball questions for Larry Stone, typical SJ Metro.

    I remember when he got up in front of the city council and said measure B most go on the ballet, when collects a huge salary and a huge pension that will never be touched.

    In fact that county of Santa Clara collects a 100 million dollars a year to guarantee Stone’s pension.

    Hypocrite!

  6. @SantaClaraWillNotBenefit – you’re right, the 49ers are not spending $1 Billion. This is a completely debt financed stadium. This model of financing hasn’t been tried for any other NFL stadium and I think we’re seeing why.  The loans haven’t funded and they were supposed to fund 2 months ago.  Hopefully the lenders have checked and aren’t seeing how the loans could conceivably be paid back out of psls, naming rights, and ‘stadium revenue’s when the 49ers will get all NFL revenue, including all TV revenue, plus 1/2 of the non-NFL revenue. There just won’t be enough money to pay the debt service and the operating costs.

    Please watch the videotape of the meeting.
    The 49ers attorney actually had the audacity to say that the taxing entities (school district, city’s general fund, county’s general fund, water district, college district etc.) would receive far more money if they give the $30 million to the 49ers.

    If the 49ers sue, it will look very very bad for them.  At a time when both the city and the schools have their employees on furlough days – providing less services for citizens and school children and salary cutbacks for teachers and other employees – and the college district can’t accommodate all of the young adults who want to take community college classes, to have a billionaire NFL team owner demand that the Oversight Board give money to him instead of to community needs would be horrible PR for the team.  We’ll have to wait to see if the 49ers choose to go that route.

  7. Downtown San Jose is a lost cause because of the high tech community and regional residents are infatuated with suburban lifestyle, where they work in the corporate campus that’s isolated from the rest of the community.  They don’t want to be in a vibrant, pedestrial friendly urban area and make the downtown the best there is for people to enjoy and socialize.  It’s now the only area in the world like this.  Just look at Europe, Asia, Latin America, Africa, Canada, Australia and other American Cities, they all have downtowns as their focal point!  Even Detroit and LA are doing nicely.  What a hypocrite of the high tech people since they said they want to be in an urban environment, not North San Jose. The A’s are not coming to San Jose, which is too bad.  The only thing that will change downtown around is the attitude of the people in this valley!  These high tech execs and its employees should forget Sunnyvale, Mountain View and North San Jose when they want to build their campuses and build them in downtown instead, so developers can build their residences in highrises and make downtown an urban oasis for the hipters.

  8. you say flatly incorrect, I say BS.  I have tried numerous times, phone, by mail. Get mailer saying no on property value going down.  Hell the whole county is going down in prices!  What proof do you need!  Every house in the county should get a refund or reduction in property taxes.

    • Great, got my Assessor letter today to protest my property value, but since you came out that property is on the raise why do I waste my time since you have declined my value for 4 years running when the county is going down the sewer!

      Seems it is a joke to even ask for a review.

      No we do not need the A’s coming here.

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