Downtown San Jose, Oakland opportunity zones attract investors, spur development plans amid Google effect

Developers eye projects in downtown San Jose and parts of Oakland, bolstered by tax incentives keyed to opportunity zone.

Developers and a new crop of investors are eyeing projects in downtown San Jose and parts of Oakland, bolstered by opportunity zones enabled by President Donald Trump’s tax-cut initiative.

Potentially the first project in a local opportunity zone would be development of a brand-new office and retail complex on South First Street in downtown San Jose at the site of the old Lido night club, said Erik Hayden, president of Urban Catalyst, a company that as formed an opportunity fund that would provide cash for selected developments in designated areas.

“These opportunity zones are ways to create greater economic activity in lower-income areas,” Hayden said. “They were originally presented to the Obama Administration but didn’t get a lot of traction. Then they became part of President Trump’s tax cuts and jobs act. San Jose Mayor Sam Liccardo very successfully lobbied Gov. Jerry Brown to get downtown San Jose included.”

Investors who plunk down cash for an opportunity fund can “defer or eliminate federal taxes on capital gains,” according to information on the state’s Department of Finance site.

The Lido night club site, currently a two-story building at 26 and 30 S. First St., is now owned by a partnership led by Gary Dillabough, who has emerged as one of downtown San Jose’s most active realty investors and developers. Among the properties Dillabough-headed groups have bought: the nearby Bank of Italy building, a historic office tower at the corner of South First and East Santa Clara streets.

 

 

 

Read more on The Mercury News

 

 

 

Fruitvale: Transit and Community

More than just a BART station.

metro or subway station may seem one-dimensional, a jumping-off point from one place to another. But some stations are destinations, drawing in visitors on the basis of their own merits. They may be architectural gems, like Grand Central Terminal in New York City or shopping meccas like Shinjuku in Tokyo. A few go beyond attaining this status and have become communities unto themselves.

Fruitvale Station is one such place. It’s a thriving transportation hub that also possesses the elements of a long-standing community.

I commute to the city from Fruitvale Station every day, witnessing this tangible sense of community up close. My daily journey here began in January 2009, just a few weeks after Oscar Grant was shot and killed by a BART police officer in the early hours of New Year’s Day. The tenth anniversary of the tragedy happened on January 1 of this year, marking a milestone that has largely defined the identity of the station.

Fruitvale ingests passengers not only from its namesake neighborhood but also from other areas of Oakland and adjacent towns — as evidenced by the busy AC Transit buses and the jam-packed parking. The ongoing stream of humanity begins in the early morning with commuters and school kids and continues until the last train departs for Warm Springs at 1:00 a.m.

The first clue that more is afoot than simply moving people is the Fruitvale Village sign that stands next to the station entrance. Fruitvale Village was developed in the early 2000s by the Unity Council, a nonprofit Oakland group, and became an early model of transit-oriented development.

The development is home to housing and multiple community organizations, including institutions that are hallmarks of any civic community: a health clinic, a public library branch and a school. It also features shops and restaurants, most of them locally owned, like neighborhood Mexican food fixture Obelisco (formerly the Taco Grill). In 2017, Reem’s, an Arab bakery, opened to much acclaim. Owner Reem Assil has been recognized by the James Beard Foundation and major food publications. Equally notable, Assil has made social justice a core value of her business by hiring local workers and providing a living wage.

Read more at The Bold Italic

New Richmond ferry draws developers and businesses to long-struggling city

A new ferry terminal has spurred development and optimism in Richmond.

Keba Konte hopes a new ferry in Richmond will bring his business scores of new customers.

Konte’s Red Bay Coffee, which currently operates three locations in Oakland, will cater to Richmond’s first ferry commuters in over two decades when the city opens its new $21 million ferry terminal on Jan. 10. He plans to park his coffee truck near the waterfront Craneway Pavilion.

“Richmond interests us because it shares the same spirit as the city of Oakland, a working-class city that has often been viewed as the underdog. It’s a developing city and we strive to be a part of that story,” Konte said.

The ferry terminal has spurred other businesses and developers to want to be a part of Richmond’s story as well. They’re attracted to the idea of a high-density waterfront community, a 35-minute commute to San Francisco and increased foot traffic to businesses and restaurants along the waterfront and downtown. Already, there are over 2,000 housing units slated to be built within five miles of the terminal, said Richmond Mayor Tom Butt.

“The waterfront is our biggest opportunity to promote Richmond,” Butt said. “The ferry service is going to accelerate some of these projects in the pipeline because a l lot of people are really anticipating that ferry. A lot of people commute to San Francisco from Richmond and areas around it. It’s going to be popular.

 

 

 

Read more on San Francisco Business Times

 

Lucca Ravioli Co.’s parking lot sold — five-story tower may rise

Lucca Ravioli Company’s parking lot at 22nd and Valencia Street, which went on the market in August, quietly sold in October for around $3 million — and now plans are in the works to develop it into a five-story residential building.

The parking lot’s new owner — M3 LLC — filed a preliminary application with the city in mid-December. The plans for 1120 Valencia Street envision a five-story, 18-unit building with around 1,171 square feet of ground-floor retail and a rooftop deck. Two of the units will be below-market-rate, and the building will include 18 bicycle spaces but no car parking.

The project’s estimated cost is $4.8 million.

The owner of M3 LLC could not be reached for comment, as his or her identity could not be confirmed. Planning documents list the owner’s address as the Garaventa Accountancy Corporation on Church Street.

 

 

Read more on Mission Local 

 

 

Neighbors rise against plan to replace Red Cottage Inn with bigger hotel

Owner wants to tear down small hotel for Hampton Inn with three times as many rooms in Menlo Park, but residents call it too massive.

The owner of a Menlo Park hotel who wants to replace it with three times as many guest rooms is facing fierce opposition from a neighborhood group that threatens to appeal the project if the city approves it.

Sagar Patel, who owns the 28-room Red Cottage Inn at 1704 El Camino Real near the Atherton border, said his proposal to raze the hotel and build a taller, 68-room Hampton Inn in its place checks off all the city’s approval boxes. He’s also made a number of concessions sought by nearby residents, such as better screening for privacy, after meeting with them over the past 16 months, he said.

“I was under impression that we meet (Downtown) Specific Plan requirements and that’s the holy grail,” Patel said. “Not only did we meet them, we exceeded them.”

Residents say they aren’t pleased because after Patel came forward with a proposal in the spring that would have placed all parking underground and set back the building 36 feet from their homes, he later scrapped it saying the concessions would be too costly and without warning, presented a different plan to the Planning Commission during an October study session.

In the latest proposal, parking would be at ground level and setbacks reduced to 10 feet.

“He decided he couldn’t afford underground parking and he changed everything,” said Deborah Melmon, a member of Park Forest Plus, the group opposing the new hotel.

Melmon said the current proposal places the edge of the three-story building 17 feet from her master bedroom window and living room on Buckthorn Way.

“He’s gone from a hotel that a lot of time and effort was spent on trying to compromise with the neighbors … and suddenly changed it up on us,” she said. “If the Planning Commission votes to approve the plan, we’ll appeal it; if it doesn’t, he will. Either way it’s going to end up at the (City) Council.”

Patel said he is tweaking the proposal to possibly put the parking back underground, though in a less expensive fashion, before going back for possible approval in February.

 

 

Read more on The Mercury News

 

 

Oakland requires landlords to retrofit ‘soft-story’ buildings

Landlords have six years to retrofit the buildings, which are prone to substantial earthquake damage.

To prevent hundreds of multi-story, wood-frame apartment buildings from collapsing as they did in the 1989 Loma Prieta earthquake, Oakland is requiring seismic upgrades of all those at risk in the next big shaker.

There are 1,479 such “soft-story” apartment buildings in the city constructed before 1991 — when the building code changed — that stand two to seven stories tall and contain five or more apartments, according to a 2008 analysis by the city and the Association of Bay Area Governments.Those buildings are supported by slim columns with either garages or storefronts underneath, and contain a total of 24,273 apartments.

With fears of the “big one” occurring any day now along the Hayward fault — which runs along northeast Oakland and south along Interstate 580 — the City Council unanimously passed an ordinance Dec. 14 making the seismic retrofitting of soft-story buildings with more than five units mandatory, giving landlords four to six years to get their buildings up to code.

“A major earthquake along the Hayward fault is not a matter of if, it is a matter of when,” Mayor Libby Schaaf said in a statement released a week before the meeting. “As a city, we have a responsibility to put measures in place that will prevent injury and loss of life, and reduce displacement and recovery time in the aftermath of a major quake. This ordinance does all of those while also ensuring that we’re not placing an undue financial burden on property owners and tenants in our community.”

San Francisco passed a similar ordinance that went into effect in 2017; Berkeley and Fremont also require soft-story buildings to be seismically retrofitted. The Hayward council is scheduled to consider a similar measure in February.

In 2009, Oakland required soft-story building owners to gauge the potential earthquake damage that could occur. In the city’s 2015-2023 General Plan, officials called for the creation of a seismic safety retrofit program that would encourage retrofits through financial and procedural incentives.

Councilmember Dan Kalb — who introduced the ordinance — said city staff had been researching the risks of soft-story buildings and working toward the legislation for about four years. Though some California cities have required the buildings be retrofitted, others have not yet addressed the issue.

Seismic retrofits fall under the Oakland rent board’s definition of capital improvements, and thus up to 70 percent of the cost of may be passed on to the tenants. This ordinance requires that pass-through costs to tenants be dispersed over 25 years to prevent substantial rent hikes.

 

Read more on East Bay Times

 

 

San Francisco readies for convention boom as $500 million Moscone Center expansion opens

Nearly two years after it closed for a $550 million renovation, San Francisco’s larger Moscone Center reemerges on Jan. 4, aiming to take the city’s convention business into a new era.

Expanded by 350,000 square feet, Moscone’s north and south wings are now fully connected, creating up to 500,000 square feet of flexible and contiguous convention space and allowing San Francisco to host simultaneous conventions.

For the city’s hospitality industry, which bore the brunt of Moscone’s closure, its return has been a long time coming.

Hotel room bookings, which fell by more than half a million while Moscone was closed, are now set to rebound to an all-time high in 2019. Restaurants and other businesses that feed off the convention trade are eager to eat their fill again. Moscone is expected to attract 175,000 net new visitors annually who will spend a projected $180 million a year and, for the city, generate an additional $20 million in hotel tax.

 

Read more on San Francisco Business Times

 

How low-cost chains are changing the retail game

Dollar store chains are among America’s fastest-growing retailers, but their impact on the industry is coming under increased scrutiny.

Nonprofit Institute for Local Self-Reliance reports that dollar stores are more prevalent than Walmart and McDonalds locations combined, and they feed more people than Whole Foods stores. In some urban neighborhoods, low-income and rural areas, dollar stores might be one of the only retail options for residents.

The number of dollar stores in America has grown from 20,000 in 2011 to almost 30,000, per ILSR. With many Americans living paycheck to paycheck, it’s not surprising these small-box stores selling affordable merchandise are thriving.

The ILSR report contends that dollar stores — which lack fresh produce and meat but offer a host of frozen, processed and canned food options — aren’t a symptom of economic distress in some communities, but the cause of it, as they stifle independent grocers and other local retailers.

“To the extent that dollar stores are filling, in some ways, a need in communities, I think that is true in the short term,” Marie Donahue, one of the report’s authors, told Civil Eats. “But really our research is demonstrating…those foods aren’t as good quality as full-service grocers or independent local stores, which may be able to connect to local farmers and the larger food system.”

 

 

Read more on San Francisco Business Times

 

 

Stanford sues Santa Clara County over housing law

University claims it’s been unfairly targeted by ‘inclusionary housing’ ordinance.

Stanford University on Wednesday filed two lawsuits against Santa Clara County Board of Supervisors, charging county officials of unfairly and illegally targeting the university with a recently adopted law that aims to promote more affordable housing on campus.

The university is contesting the new “inclusionary housing” law, which the board approved on Sept. 25 and which requires the university to designate 16 percent of all new housing units as below-market-rate housing. The two lawsuits, filed in state and federal courts, allege that the county’s law violates the Equal Protection clauses of the U.S. and California constitutions, which prohibit government entities from treating one individual differently from others in similar circumstances.

The university also indicated that it plans to sue the county over a separate law that the board had also passed on Sept. 25, one that significantly raised the “housing impact fees” that Stanford has to pay for every square foot of new development. Under the law, the fee is slated to go up from $36.22 to $68.50 per square foot.

In a lawsuit filed in U.S. District Court, Northern District of California, Stanford takes issues with both policies, though the new suit only pertains to the “inclusionary housing” law (Stanford has a later deadline for challenging the ordinance on impact fees). It argues that the county is illegally forcing Stanford to bear the burden of solving what the county itself had determined to be a regional problem: A severe shortage of affordable housing.

By targeting Stanford with its new affordable-housing requirement, the county is violating the 14th Amendment of the U.S. Constitution, which prohibits states from denying “any person within its jurisdiction the equal protection of the laws,” the university alleges in a complaint.

“The County ordinance impermissibly singles out Stanford University,” Geoffrey L. Robinson, of the firm Perkins Coie LLP, wrote on behalf of Stanford in the federal lawsuit. “Through its ordinance, the County has intentionally imposed affordable housing requirements exclusively on housing development constructed by Stanford.”

Read more on Palo Alto Online

 

Square takes over enormous Oakland building

Uptown Station, once meant to be Uber’s Oakland HQ, nets a new tech tenant.

Not too long ago, the circa 1929 Beaux-Arts building in Oakland now known as Uptown Station was meant to be the East Bay home of Uber, which had ambitious plans for the historic and recently refurbished locale.

But Uber sold the building almost exactly a year ago, netting $175 million from Oakland-based investment firm CIM Group but leaving the future of the sometimes neglected unofficial landmark up in the air.

On Thursday, CIM and Square announced that the SF-based payment app company owned by Twitter CEO (and Benioff antagonist) Jack Dorsey will lease much of the building, completing the locale’s long transition into an East Bay tech hub.

“Square has signed a lease for the entire office space in the iconic Uptown Station building,” according to a Thursday press release from both companies, a deal covering more than 350,000 square feet.

The building at 1955 Broadway first opened as an HC Capwell department store in the ‘20s, at the time apparently a very big ticket for Oakland as thousands showed up to see the mayor overturn the first shovelful of dirt on the future shopping hub.

Eventually, the building transitioned into being a Sears store instead, and for many years now has laid mostly dormant.

Developer Lane Partners spearheaded efforts to turn the disused retail Mecca into a new mixed-use office building before selling to Uber in 2016.

Square won’t actually move in until the end of 2019, possibly because CIM Group is still overseeing work that’s being done on the nearly century-old building.

“Oakland is committed to attracting businesses whose values align with our community. […] I believe Square can be that company,” Oakland Mayor Libby Schaaf said Thursday.

 

 

Read more on Curbed SF