FOUR MILLION DOLLAR SUBSIDY FOR ST. CLAIRE HOTEL
August 21, 1991
By Yolanda Reynolds
The San Jose City Council held a special Council meeting on Thursday, August 15, to approve a loan to MidPeninsula Country Hills, Inc. for the purchase of the Country Hills Apartments that are intended for conversion to low and very low income housing.
MidPeninsula Country Hills Inc. is a non profit housing corporation that owns and manages low and very low income housing thus enabling eligible renters to receive rental assistance.
At Thursday’s meeting, a number of nearby homeowner groups accompanied by their attorney, Thomas Stutzman, expressed their opposition to the loan.
The homeowners accused the City of “dumping” low income housing in that area. They said that there was already low income housing in the area.
The protesters expressed concern over the great increase in crime that the entire area has experienced in recent years. Indeed, it was just such statistics that prompted Councilman George Shirakawa to seek public office. He has not been on the job for quite a year, but some progress has been made in addressing the grave problems of District 7.
There have been concerted efforts to curb the incidence of crime in the area. Project Crackdown, a police-community program designed to reduce drug abuse and its related crimes, has been in effect for several years. Pact, a church/community group, has provided an articulate and vocal advocate for community action with the goal to improving the quality of life for the residents of the Seven Trees, St. Maria Goretti and Santee neighborhoods of District 7.
In District 7, where these apartments are located, there are many apartments complexes, some of which are very well managed. Unfortunately, there are also some in the area that are very poorly managed and not well maintained.
This newspaper recently has detailed the unhealthy conditions and poor management of some apartments in the Santee area of the District (“Municipio Alcahueta Mala Vivienda,” por Francisco G. Azuero). These unkempt, but expensive apartment complexes are used to profit the owners, with no regard for legal requirements and accepted quality standards.
The idea of large housing projects strikes fear into the hearts of most neighborhoods for a number of reasons. The biggest fear is improper management which can open the way to drugs and crime. Such can be a problem anywhere, particularly poor management and lack of cooperation.
Besides management, other concerns are traffic, lack of open space, and areas in which the children can play.
With an increasing need for inducing single auto occupancy on the city’s congested roadways, pressure is developing on decision makers to allow very high density housing projects. Such development also tends to house clusters of people with like incomes.
In recent years, policy makers have been demanding and developers are agreeing to build mixed housing (high medium and low income housing units within one development) developments in order to disperse low income housing throughout the city.
Ricardo Velasco, a homeless advocate (Student Homeless Alliance) and himself homeless, spoke on behalf on the loan proposal; but he also suggested that the City work more closely with the community in order to allay the fears surrounding “low and very low income housing” development.
Councilman George Shirakawa, at Thursday meeting, said that the community and city had a choice; private ownership and a great difficulty in enforcing City laws (by relying engaging in lawsuits) or the purchase (as proposed) of available property by a group whose primary interest is not profit and – whose management must follow enforceable guidelines.
According to Shirakawa, by law, the City has more power to enforce laws involving housing that is managed by such a non profit organization.
According to District 7 Council Assistant, Sylvia Ramirez, purchase of such housing by a non proﬁt organization requires that at least 20 percent of the existing tenants be eligible for low income housing assistance. Ramirez says that a majority of the residents at Country Hills have been identified as eligible for such assistance.
Ramirez added that ownership by a nonproﬁt organization reduces the doubling up of families in small quarters in order to pay the high rents demanded by “for profit” owners.
It is expected that current renters will continue living at the Country Hills apartment complex under the new management throughout the renovation of the apartments. However, a telephone call to confirm this expectation was not returned before press time.
That same afternoon, the San Jose Redevelopment Agency Board approved a number of expenditures on Redevelopment projects. One of those projects, the renovation of the now defunct St. Claire hotel drew strong opposition from homeless advocates.
The Agency Board (ie. the City Council) accepted, without any reservations, the proposal submitted by Agency Director Frank Taylor for the reopening of the St. Claire. The St. Claire plan involves an intricate ﬁnancial arrangement, whereby the developer first buys the hotel from the Bank of California. The developer in turn will then sell the hotel to the Redevelopment Agency for $8,676.000.
Following completion of the hotel’ renovation, the agency will lease the hotel back to the developer. After a period of years and upon realizing a profit, the developer will begin to pay taxes on the property.
The final Redevelopment Agency contribution for the renovation “needed” is $3.97 million. The total cost for acquisition and renovation of the hotel is estimated to cost $17.87 million.
Recent reports regarding hotel occupancy rates indicate that there is a high vacancy rate for Bay Area hotels, including those in Santa Clara County. For the last 25 years, The Saint Claire, though a lovely small hotel (182 rooms) has been a ﬁnancial failure.
The renovation is expected to cost around $104,780 per room. According to Central Labor Council spokesperson, Ric Sawyer, this project will bring much needed employment to the building and trades workers. Sawyer and the new St. Claire owners are working closely in this renovation/construction project. 0ver the years, labor has been critical of a number of public private construction projects, which have involved outside labor to the exclusion of local workers. Homeless advocates suggested that the money would be better spent helping small business people.
Chavez Napoli, a critic of the lax cost controls and project management of the numerous Redevelopment projects, questioned the advisability of millions of taxpayer dollars being given as at subsidy for the hotels’ renovation.
Homeless advocates pointed out the need for replacement low income housing in the heat of downtown.
The Agency Board members informed those present at the meeting that reopening the hotel and adding those rooms would help give San Jose the ability to attract major conventions.
Council member Shirakawa said that he would be carefully monitoring the cost and status of the project as he is doing for other Redevelopment projects.
A number of homeless advocates questioned the advisability of spending precious taxpayer money on luxury hotels for people who do not reside in San Jose when, in San Jose there are increasing numbers of residents, including whole families, who are homeless.
The Agency Board (City Council) unanimously approved all the items on the Redevelopment Agenda.
Following the Agency meeting, homeless advocate Brenda Techler, spoke person of the Student Homeless Alliance at Thursday meeting and herself homeless and wheel chair bound, asked the developer’s wife and business partner if – the hotel would consider setting aside a number of jobs for the homeless, Mrs. Mobedshahi responded to Brenda that, she “should not feel that because she if was homeless of she would not have an equal opportunity for a job provided she was qualified.”
For a variety of reasons, one of which is loss of self esteem and confidence, it is very difficult for homeless people to find employment.
Mr. Mobedshahi said that he and his wife were moving, with their children, to San Jose from San Francisco
With the current severe economic situation in the nation, the Bay area and, in particular, downtown San Jose, the wisdom of investment in another luxury hotel with taxpayers money is severely questioned by local residents.
Redevelopment, throughout the nation, has been involved in the construction of luxury hotels, convention centers, upscale downtown housing, upscale shopping pavilions and sports facilities, while the original purpose – improved housing and economic development for low income communities has been slow to occur, if at all.
Redevelopment Agency Board meetings are held on the first and third Thursday of each month, beginning at 1:30 p.m. in the San Jose City Council Chambers at 801 north First Street in San Jose. © La Oferta Newspaper.