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Larry Rosenstein
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Big Banker: Your suggestion that the wealthy people who buy these homes will generate a lot of sales taxes is just a variation on the trickle-down economic ideas that haven't worked at all. But the bigger issue is that the city benefits only from sales made in town, and even after these houses are built, the businesses in Pacifica will still be the same. Pacifica just doesn't have the kind of businesses that generate a lot of sales tax revenue; if it did, then the city's financial situation would be better. Even if you ignore all that, and assume that each of these 10 new families somehow manage to spend (say) $100K/year within Pacifica (a tall order since that's almost $300/day), then the city will see only $10,000/year of sales tax revenue (1 percent of $1 million). Sure, there's a bunch of other revenue from utility taxes, franchise fees, permit fees, etc., but those are even less. Bottom line: There is no "big picture" when it comes to Harmony @ 1. As a development project, it's fine. The original property owners gave a lot of thought to creating an environmentally sound project, which is why it was approved without much controversy. (Hopefully, the current owners will adhere to those conditions.) It will generate more revenue than the typical 10-unit development, but not enough to make a significant difference. But it's also a unique project that can't be replicated throughout town. BTW, the situation in East Palo Alto doesn't seem to be as rosy as you imply. Regarding the crime problem, the city passed a $100/year parcel tax specifically for that: In February, East Palo Alto also looked at outsourcing its police service due to a $1 million budget shortfall: And in the fiscal year 2014-15 budget, East Palo Alto's city manager warns that "the City's expenditures are outpacing the City's revenues, creating an ongoing structural deficit." Sound familiar? So despite having several big-box retail stores, East Palo Alto faces many of the same problems as Pacifica. The same is true of most cities in California, since the recession caused a drop in both property tax and sales tax revenue that is just now recovering.
The idea that this is going to build Pacifica's tax base is fantasy. The total property tax from this project is about $500,000/year, but the city gets only 12 percent to 15 percent of that. The jobs, permit fees, etc. are not sustainable revenue; once the project is finished, those things go away. So in the end, the city will get about $75,000/year in revenue, and that amount will go up only 2 percent a year. This is certainly enough to pay the cost of services for 10 houses for a few years, but it's not going to be a windfall for the city. Plus, it's not something that can be replicated elsewhere in town. There are only a few places where $4.5 million homes are financially viable. For example, the article mentions the project on the other side of Fassler, and I doubt those homes will be in the same price range.
The San Mateo study was about general land use issues, but there was no study about whether housing pays for itself. The paragraph Bob posted even says: "Although this kind of fiscal analysis has not been performed specifically for the City of San Mateo..." It provides general conditions where housing might be expected to pay for itself, without anything to back up those statements. I would also argue that those conditions don't apply in Pacifica: (1) housing prices here are among the lowest in the county, (2) the cost of city services is known to be high, and (3) there's a lack of retail to capture sales taxes. The Harmony @ 1 project will likely pay for itself, since the home prices are so high. But that project is not the norm in Pacifica, and it's certainly not going to make a dent in the city's deficit. Regarding the number of units, there are 10 luxury homes, but there are supposed to be a number of affordable units built as well. The FEIR has a statement from the original developers about this and the other proposed CCRs:
Chris: I was at the Pacifica Chamber of Commerce office two Saturdays ago, and the office was closed with a sign on the door that says it is open only Monday to Friday from 9 a.m. to 5 p.m. The same information is on the chamber's Visit Pacifica website: Some of the chamber activities you listed elsewhere on Riptide are also part of the chamber's member benefits, and it's difficult to separate the two. Even if the city cuts the $10,000 funding for the visitor center, the chamber will continue to market the city to help its members, since that's what a chamber of commerce does.
I did some digging on the county website, and I could find only one parcel in the area (APN: 022-055-140) owned by someone from San Francisco. On the parcel map, it looks fairly large, so perhaps the owner is planning to subdivide it into two lots. At the other end of Oddstad is a project approved by the city in 2006. Since then, the property changed hands, and the current owner has gotten development permit extensions every year since then. Recently, the parcels next to this project have been put up for sale: When I looked at the MLS the other day, I noticed two other lots in the area up for sale.
Toggle Commented May 14, 2014 on Odd Doings on Oddstad at Pacifica Riptide
I got a notice directly from the city, and it was also posted on the Nextdoor site. The city has mailing lists for General Plan info as well as City Council agendas; you should be able to sign up here:
You can get DSL service from other providers besides AT&T. The service is the same, but the ISP takes care of dealing with AT&T so you don't have to. We have 3Mbps DSL service from PacificaNet (which I think is really in HMB) for $30/month, but in the past I've also used, based in Santa Rosa. DSL is likely better than the PacificaNet wireless Internet, but slower than what you can get from Comcast. (That's unlikely to change anytime soon since AT&T is trying to get out of the wireline business.) We recently switched our cell phones to T-Mobile and I've found that its wireless data speed is surprisingly good in Pacifica. But this will come with a relatively low data cap per month (e.g., $70 for 11GB/month).
big banker: I was the one who posted the numbers, not Todd. The point of my comment was to make a back-of-the-envelope estimate to show that different types of projects provide different benefits to the city. On my current property taxes bill, the general tax rate is 1.1171 percent. Actually, now that I look at it more closely, the base rate that should be used for any revenue estimates is only 1 percent. The other .1171 percent is for various school district bonds that are not relevant to calculating how much the City of Pacifica gets. The same is true of other bonds, sewer charges, etc. None of that revenue goes into the city's general fund. To estimate the price of the condos, I did a search on for recently sold condos that matched the size mentioned in the original proposal. The first page of results ranges from $411,500 to $725,000, so I think $700,000 is a generous estimate. Remember, this is an average price for all 63 units, some of which are only 1,140 square feet in size. Even if you increase the average price of the condos, it doesn't change the fact that the city won't see very much revenue from this project as it's currently envisioned. On the other hand, a 40-room hotel, which was originally approved for the site, would generate much more revenue. A conservative estimate would be 40 rooms at $125/night, rented an average of 250 nights/year times 12 percent tax = $150,000. A more luxury hotel would bring in more. In addition, hotel rooms are smaller than the condos being proposed, so the project itself would be much smaller. And the commercial space associated with a hotel is more likely to generate sales taxes.
Todd: What zoning changes are needed? According to the staff report, the existing zoning supports up to 63 residential units (based on 1 unit per 2,000 square feet of lot size). It seems to me that, as long as the developer includes some commercial, he can build the 40 or 63 condos. The end result is that another commercial site in town is going to be developed as housing, which will be a missed opportunity at economic development. Sixty-three condos would bring in only about $75,000 in property taxes a year. (A $700,000 condo generates about $7,700 in property taxes, of which only about $1,200 goes to the city.) The city has no control over what commercial goes in, so it may or may not generate any sales tax. (The original concept of a 40-room hotel would bring in two to three times the revenue in hotel tax alone.)
The staff report for the study session is interesting. It confirms that the planning permits from 1995 have expired. Also, the site is part of the Rockaway Beach Planning Area, and the property is supposed to be used for highway-oriented, visitor-serving commercial uses. Further, it says that size of the buildings and garage "do not appear to be compatible with the surrounding neighborhood" and "the project appears to be more of a residential use than a truly mixed-use project." It's rare for the staff report to have anything negative to say about a project.
My overall comment is that the so-called plan wasn't worth whatever the city paid for it. Look at the recommendations at the start of the report; these are all basic things that people have been saying for years. The report seems fixated on the idea of developing Class A office and laboratory space. Different areas in the city are evaluated as to whether they could support this type of development. The idea is to attract high-tech startup companies. I've worked at a series of high-tech startup companies for the past 15 years, and I don't think this is a viable plan. Once a startup gets to the point of needing office space, it is going to locate in a place that is convenient for the employees. The companies I've worked at were in Foster City, San Bruno, and San Francisco, which are easy to reach by car and public transportation. (I could see companies starting in Pacifica, since these days high-tech companies can get started in a coffee shop or someone's living room. But companies of that size don't need office space.)
Twenty-five businesses have hit the $500 cap already. It isn't fair that these businesses completely avoid a tax increase, while everyone else has to pay. When the council members discussed this, they got bogged down on questions about indexing the cap, when it would have been very simple to just raise the cap to something like $750. Based on the city manager's comments at the last council meeting, the proposal is estimated to be something like a 60 percent to 70 percent increase in the utility tax, so increasing the cap by 50 percent would have been reasonable. The main reason why these issues didn't get addressed is that the council wanted this on the ballot in November, and to do that, it needed to approve it in July. There was no time to go back and refine the language of the ballot measure. This is the third time the city has tried to increase revenue, and the previous two attempts failed mostly because of a lack of credibility on the part of the city, and it's not any better this time around.
The definition of what is/is not included is confusing. Is Netflix a video streaming service? If so, then it's unfair to not tax cable TV video services, since the cable company is moving toward providing video services using very similar technology. (And I have no idea what a data streaming service is.) The $500 limit still seems to apply only to businesses. Since there are already businesses that have reached that limit, this tax increase won't apply to them, and it seems likely that additional businesses will reach the limit and be subject only to a partial tax increase. Finally, the proposed ballot language is very misleading. It starts with "Without raising the current 6.5% rate." This implies that it isn't a tax increase. Then it lists a number of city services that would be funded, and "citizens oversight," even though the tax proceeds go into the general fund and there's little oversight possible. Finally, it mentions "equal treatment regardless of technology used," when the tax doesn't apply to cable TV but does apply to video streaming. Even if the latter is intended to apply only to video services offered by cell phone companies, it's not equal treatment.
A $187 tax increase is pretty big, especially compared with the proposed fire assessment that failed. And that's supposed to be the average for a household. The point about it being a general tax is key. The proposed ballot language lists a bunch of things that the tax could pay for, but the reality is that the city can't promise that it will actually be used for any of them. And while there's a review committee to monitor expenditures from the tax, it's meaningless because the tax goes into the general fund. Also, it's sneaky that the suggested language starts off by saying the rate isn't going up, as if it's simply a renewal of an existing tax rather than an increase. In general, the UUT is probably the most regressive tax the city can impose. Even though this increase involves telecommunications services, in 2013 these services are almost as important as water and energy. Also, most telecom companies are big and have little competition, so they are free to raise rates anytime.
"The last commercial buildings to be built have been Kragen's and the dentist office and pet hospital." The dentist office and pet hospital are primarily service businesses. These types of businesses do not provide much revenue to the city because they generate very little in sales taxes. The same is true of residential development. The city's share of property taxes is small, and the entire Connemara development (23 homes + 2 commercial buildings) probably results in only $40,000/year in revenue to the city. The idea that new construction will result in significant economic development is simplistic; the type of development matters. Unfortunately, the city's planning code for commercial sites allows developers to build projects that are primarily residential, with only a token amount of commercial. And even then, it's possible to end up with service businesses that generate little sales tax revenue.
Surprise! The same old people who think any development must be good keep repeating the same illogical arguments over and over. I'm flabbergasted that you can't see a difference between the current traffic and the traffic that would result if a large-scale quarry project were built. The current traffic does back up, but only at certain times, such as when school is in session. There's also some evidence that timing the lights would help. Any quarry development would add traffic, and it's just a question of how much.
I agree that this should have been pulled from the Consent Calendar. Hint: If the agenda summary is 10 pages, I don't think it can be considered routine. It's clear that the Park and Ride site has already been chosen. On the same page of the minutes that discusses the odor is this: "Councilmember O'Neill asked if this was going to be part of the use for the retention thing they were building under the Linda Mar Park and Ride." Also, the additional work that was approved for this item (e.g., geotechnical boring) involves only the Park and Ride site. That, plus your conversation with Len Stone, explains why it didn't get removed from the Consent Calendar. From the council's point of view, the item was just a change order for something that had already been decided. I'm not sure there's a good alternative site for the tank, but exact size and scope of the project should be discussed and the public should have a chance to provide feedback. By the time the consultant comes back with a final report, it will be too late for changes. (The answer to your question about why not the west side of Highway 1 is mentioned in the staff report; there is a concern about sea level rise, which seems legitimate.)
This isn't the first time something like this has happened. In 1966, a decommissioned Navy ship was being towed to a salvage yard, broke free, and ended up grounded in Sharp Park:
Toggle Commented Mar 11, 2013 on Adrift at Pacifica Riptide
One clarification of Todd's comments. $70,000 is an estimate of how much the City of Pacifica would get if the owners paid the current back taxes. (That assumes the city gets a share of the penalties and interest.) On an annual basis, the city gets about $9,000 from the quarry property taxes. (One interesting thing about the tax assessment is that when the property changed hands in 2009, it was reassessed at $10 million. But in 2012 it was assessed at only $7.5 million, which is what Peebles paid for it originally.) If it's five years from when the property became tax defaulted, then that will be July 1, 2014. The last property tax payment was made for the 2007 tax roll year on 4/7/2008. The 2008 taxes became tax-defaulted on July 1, 2009. Finally, if anyone wants to look at the actual numbers, the secured property tax site is at: The quarry parcel numbers are 018-150-110, 018-150-120, and 018-150-150.
Toggle Commented Mar 9, 2013 on Ground Zero @ Highway 1 at Pacifica Riptide
Peebles wanted only to win the referendum and sell the property for a profit. (He did something similar in San Francisco.) The idea that he was going to fix the highway on his own dime is laughable, given that he didn't even put his own money into buying the property. (The chapter of Peebles' book about Pacifica makes for interesting reading.) The current owners owe about $640,000 in property taxes; that includes the $88,000/year Chris Fogel mentioned, plus the penalties and interest that accrue every month the taxes are in default. Based on the 11% that Todd mentioned, about $70,000 should be in the city's general fund.
Toggle Commented Mar 8, 2013 on Ground Zero @ Highway 1 at Pacifica Riptide
Ian is correct about the visitors center being closed on the weekends. There are brochures in the lobby, but those aren't even available to visitors on Sundays because the building is locked since the businesses are all closed Sundays. Even when it's open during the week, it's no longer very inviting as a visitors center because the furniture was rearranged to look more like an office. The comment about not wanting kids tells you how seriously they take the visitors center part of their activities.
Don Eagleston left the chamber in early 2010. (It turns out he is the CEO of the Sunnyvale Chamber of Commerce now, which seems to be doing fine.) The 2009 return was filed in the fall of 2010 after he had left. Regarding Todd's comment, Don's salary+benefits in 2008 was reported as $103,799, and in 2009 it was $90,232. In 2010, Courtney Conlon's salary was $40,833, but that was for a partial year.
Here's a short article on making a compost bin liner from a couple sheets of newspaper:
Dan said it best. A lot of people criticize the city for a lack of economic development, but I never see any specific ideas for what the city should do. As far as Sue Digre's comment goes, a year ago the Chamber of Commerce put together a proposal to help the city market Pacifica that starts with "In our estimation, the best way for the City to increase revenue in the short term is to boost tourism," which is basically the same idea. The chamber's long-term solution was "Fill Commercial Vacancies" and its proposal was to "design and maintain a searchable commercial real estate website." It turns out that the city's website provides most of what the chamber suggested. There is a listing of available commercial space, information about the various business districts, and links to them as well as to the chamber's website.
Todd: I don't think AB 506 does what you're suggesting here. A city can always negotiate with its employee unions, creditors, etc., and try to reach some sort of restructuring agreement. AB 506 doesn't change this. My take on it is that it imposes additional requirements before a city can declare Chapter 9 bankruptcy, to prevent a city from using bankruptcy as a quick and easy way to restructure its obligations. In other words, a city can't just declare bankruptcy and force its unions to accept changes. Under AB 506, a city has to work with the interested parties to get a neutral evaluation of its financial condition. (BTW, if I read the Stockton information correctly, doing this evaluation is going to cost $3.5 million; see page 251.16.) A city can bypass the evaluation if it declares an emergency, but I don't think the city's declaration of an emergency meets the requirements of AB 506. The executive summary you posted says: "The declaration of fiscal emergency must include findings that 'the financial state of the local public entity jeopardizes the health, safety, or well-being of the residents of the local public entity’s jurisdiction or service area absent protections of Chapter 9' of the federal bankruptcy code.9 Additionally, the resolution of the public agency must include a finding that the public agency will be unable to pay its obligations within the next 60 days." The ordinance shown in the February 27 agenda shows the first finding, but it did not include a finding that the city is unable to pay its obligations in the next 60 days. In fact, the ordinance says that the city's operating reserves will be depleted by 2017, so presumably the city can pay all of its bills for at least the next 60 days, if not the next couple of years.