A while ago I wrote that I wanted to tour each council district. Well, I got my wish. I have been touring San Jose over the past few months and last Friday I spent the morning with my colleague, Nancy Pyle, who represents District 10.

I met Ms. Pyle off Blossom Hill Road where we began the tour driving through the Hoffman Via Monte SNI neighborhood, which is right next to Pioneer High School—and, where I believe we made a mistake in planning. This area has about 40-50 apartment buildings that are clustered on three adjoining streets.  This 1970’s planning mistake is replicated all over San Jose.  Perhaps the recent focus of using RDA funds in partnership with the code enforcement will encourage landlords to clean up their properties. Neglect of the property leads to blight which leads to people not caring about their area.  It’s nice to know that the SNI program has brought improvements to the area.  Last year, I attended the grand opening of the new community center which was the number-one priority for the Hoffman Via Monte SNI.

We then went on what I call the “Almaden Valley Home Tour!”

Having grown up in San Jose and having friends that live in Almaden, I thought I had seen every street. However, I soon realized that I had not seen everything D-10 has to offer. There are some incredible streets with vintage ranch houses and houses that I pictured as being like ones in Los Altos, complete with families of deer passing by.  One advantage of having housing stock occupied by upper income families is that some of these individuals start companies that employ people.  If these individuals are living in Almaden, it is less likely for those new companies to be located in Palo Alto and Mountain View. At least that’s the hope.

On the way out to the Almaden Urban Reserve we passed the historic Feed and Fuel. It’s a shame that it is closed; it was like a tavern in the old west.  The Almaden Reserve is HUGE (1000-plus acres) and quite scenic.  This is the area where former Vice Mayor Pat Dando proposed building soccer fields but was met with opposition.  The questions that came to my mind were: Do we plan for the development of this land now?  If we plan, does it lead us to build on it prematurely?  Is there an alternative route other then Almaden Expressway for the future?  Where will the water come from?  If we do “nothing,” there will be one house per 20 acres but no master plan—is this a “bad” thing in an effort to preserve open space?

Our tour also included the location of the tragic accident on Mockingbird Lane where Leland students died in the mid-80s while driving too fast.  In this particular case, the youths came over a steep hill (and got some serious air) and crashed right into a garbage truck.  Three of the four students died—very sad.

We stopped off for a tour of the Almaden Library and Community Center. What a gem! It’s an impressive structure teeming with people of all ages.

We drove the outline of the district and finished at a future VTA development site. There is a VTA station at Capitol and Highway 87 which has a surface parking lot. The VTA would like to build a transit-oriented development at this light rail station.  The biggest questions from the neighborhood are how tall and how many units?  I am glad that I am not the only one with the same issues; even District 10 has to wrestle with the density question.

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.

The city council spent 12 hours on “Budget Tuesday” last week.  Here are three of the topics we covered.

Budget:
It was the end of a long budget process and I lived through it.  We had tough choices to make. San Jose is involved in many things—some questionable and others necessary.  I think we need to consider starting fresh with a clean slate by making “core” city services—sewer, public safety and land use—our first priorities.

We need to fully fund these core services first and then move on from there to roads, libraries, attorneys, and accounting (collect revenues/pay bills), followed by code enforcement, parks and community/senior centers.  Perhaps San Jose should consider dropping things that are not core, such as taxpayer subsidized golf.

I know that folks might think I am “Mr. No Fun” because I am upfront about the fact that there are tradeoffs we have to make. Casual fiscal responsibility, when it’s convenient, does not cut it. We must have a sober discussion on tradeoffs.  Why not have high ratings for our core services rather than being average at many things?

Traffic Calming:
Last year I chaired the traffic calming meetings in an effort to gather community feedback on how best to update San Jose’s policy. We had a meeting in each council district, shared the policy twice at the Transportation and Environment Committee, and held a final community meeting before the council unanimously passed the new policy last Tuesday. Two of the important changes to the policy are partnering with schools and neighborhoods adjacent to schools in an effort to make the streets in these areas safer, and allowing private funding for traffic calming devices.  The entire policy was revamped and I encourage you to check it out.

Inclusionary Housing:
Wordsmithing was at its best when “inclusionary” housing was discussed last week. I was starting to get dizzy with the constant back and forth about literally one word.  I have given this issue considerable thought and, as a result, it is not one I support the way it is presented today.  In the end, I want what is best for San Jose and its residents. I don’t believe building housing on every parcel is in anyone’s best interest, nor do I think raising the prices for first-time home buyers to subsidize others that earn less money is fair either. San Jose has done more then its fair share for both market rate housing and affordable housing. I am not alone. Councilmember Pyle did a good job by offering an alternative. I supported her, along with my colleagues Cortese and Constant.

San Jose’s structural deficit isn’t over yet, so stay tuned as this week’s council meeting should also be a long one.

Last week the city council unanimously approved a concession agreement for the new airport terminal.  Believe it or not, the Chamber of Commerce and the Working Partnerships Labor Union both agreed on the selection. Whew!  If only agreements like this could happen more often.

However, in my opinion, the best part of this selection is that many local small businesses that have made their mark in San Jose by risking their capital years ago will now have the opportunity to be showcased at the airport. These include local favorites like Schurra’s Chocolates on The Alameda, Chiramonte’s Deli on North Thirteenth, Hicklebee’s Children’s Bookstore on Lincoln Ave, Willow Street Pizza, Paolo’s and San Jose Sharks Bar & Grill.  I can’t wait.  Can you just imagine all of these great businesses all in one location?  San Jose here we come!

Last July, during our council break, I co-hosted a meeting with the Chamber of Commerce to raise the awareness that local small businesses should have a fair chance of being selected as tenants at the airport. The attendance was great and I believe that meeting played a part in bringing awareness; thus, we have many San Jose small business tenants moving forward.

City staff and a committee representing labor, the chamber and the convention visitors’ bureau reviewed the proposals that were submitted.  The council was not directly involved, although I did make my support known for local businesses. By awarding these contracts, the city and the airport do not have to manage individual rental agreements with each tenant.  If we did, it could take a lot of staff time and inevitably become political by having individual tenants lobby the council members.

The new concessions will not only change perceptions of our airport, but they are projected to bring in double the sales tax from today’s amount of $280,000 to $564,000. Revenue to the airport via rents will increase from $3.7 million to $8.2 million, and there will be 271 new jobs. Granted, they are service jobs; however, they will be paid living-wage hourly rates.

As much as the airport is criticized, most people still find it valuable for air travel. In fact, a former colleague of mine who happens to live in Menlo Park chooses to drive to San Jose instead of San Francisco Airport (SFO) to fly to Seattle every week. Even though SFO is closer, he finds San Jose’s airport easier to get in and out of.

San Jose will have a new face to show off in 2010 and I hope that you all check it out. Whether you are traveling or not, it will be worth the visit.

Disneyland in Alviso?  Not quite, but the comparisons are definitely there.

Several months back, I accompanied Councilmembers Chu and Liccardo on a tour of the San Jose Water Pollution Control Plant.  We rode on electric carts that were linked together like those at an amusement park.  Our tour guide spouted off words like, “sewage back-up, micro-organisms, aeration, methane gas”—much different then “Pirates of the Caribbean.”

The facility itself is quite large (2,600 acres) and old (built in 1956). The tour included the carts going from different facilities and walking down into the bowels of some of the buildings. San Jose could easily rent this space to the maker of a horror movie since these basements were eerie. Some of the rooms looked like scenes from a large naval ship, with long dark hallways and big pipes running overhead.  Down below, we were able to view wiring that is 20–40 years old; life expectancy of the wiring is only 25 years.

This facility treats over 110 million gallons of water each day to serve 1.4 million residents in eight cities.  The water that we flush from our toilets travels north to the plant where it goes through a series of phases. The finished product is clean water that flows to the bay.  Also, “recycled water” can be pumped back out to the city through “purple pipes” to manage industrial and irrigation needs. In some cities it becomes drinking water. I am leaving out a lot of detail on all the phases since this would get too wordy, and I must leave you with some mystery.

You may actually tour the plant yourself! The city offers a two-hour free tour on Saturdays. You may choose 9–11a.m. or 1:00–3:00 p.m. The remaining dates available are June 7, July 12, August 2, and September 6. Call 408.975.2551 to sign up or email carolina.camarena@sanjoseca.gov.

The San Jose Water Pollution Control Plant is an important facility.  Although many people may not realize it, the plant is an important part of San Jose government. We would quickly forget about any other city issues we discuss on this blog if in the future we were told we could not flush our toilets.

I support investing in the infrastructure so that we can continue to rely on this resource. Water will continue to be a scarce resource locally and globally; therefore, San Jose should take advantage of this unique opportunity to be in the driver’s seat with a leading-edge Water Pollution Control Plant by making capital investments today.

I encourage you to stop and have lunch in Alviso (before or after the tour) and enjoy your own “Bay Area Backroads” experience.

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.