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11111974
1 CITY COUNOL MINUT€S COI Or- rL 1O Regular Meeting November 11, 1974 ITEM PAC1; Adjourned Meeting of November 4, 1974 5 9 3 Employee Retirement Program: Public Safety Employees Amendment 5 9 3 Employee Retirement Program: Cost of Living Amendment 5 9 5 "Channing Place" - Cowper and Channing Request for Approval of Price Increase for Below -Market Priced Housing Units 5 9 6 Urban Bicycle Route System - Revision of Maste' Plan 6 0 3 Request for Staff to Investigate Parking Lot Air Rights Proposals 6 0 4 Construction of a Broadcasting Booth in the Council Chambers for KZSU ` 6 0 4 Request that Automatic Doors and Curbside Ramps be Installed at Stanford Shopping Center 6 0 5 Regular Meeting of November 11, 1974 6 0 6 Minutes of October 10, 1974 6 0 6 Minutes of October 15, 1974 6 0 7 Proclamation Honoring "Armistice Day" (Emergency Item) 6 0 7 Executive Session 6 0 7 Report re Apartment Licensing Program - Chapter 4.15 of the PAMC 6 0 8 Report of Councilwoman Pearson and Request for Council Reaction as to Role of Planning Policy Committee of Santa Clara County Regarding the Social Problems in the County 6 0 8 Bicycle/Pedestrian Bridge at Wilkie Way -- Memorial Dedication and Naming 6 1 0 4175 Page Mill Road - Vacation of a Public Utilities Easement 6 1 0 Paramedic Field Training 6 1 1 Resolution Honoring 100th Birthday of Mrs. Mary Wilt Denison Thomae 6 1 1 Old Police/Fire Building Lease Agreeneut 6 1 1 Cogswell Plaza Extension - Award of Aid 6 1 6 Request of Councilman Norton re Apartment Manager Licensing Ordinance (PAMC Chapter 4.15) 6 1 6 5 9 2 11/11074 November 11, 1974 The City Council of the City of Palo Alto met on this date at 7:30 p.m. in an adjourned meeting of November 4, 1974, with Mayor Sher presiding. Present: Beahrs, Berwald, Clay, Henderson, Pearson, Norton, Rosenbaum, Sher, Comstock (arrived 8:10 p.m.) Absent: None ent (CMR:590:4) Jay Rounds, Director of Personnel, explained that this was an item that is the continuation of a process started a year or so ago in employee negotiations. The item involves amending the Public Employee's Retirement System Contract to provide 2% at age fifty retirement benefits for police employees. Mr. Rounds mentioned that on September 18, 1974, Council passed a resolution of intention with respect to this matter, and the necessary procedural activities have now been concluded. Now the ordinance was before Council that would amend the contract to provide 2% at age fifty benefits for police/safety employees effective January 1, 1975. MOTION; Councilman Rosenbaum introduced the following ordinance and moved, seconded by Berwald, that it be approved for first reading: ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO APPROVING AN AMENDMENT TO THE CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY OF PAL() ALTO (LOCAL SAFETY MEMBERS ---2% AT AGE 50 RETIREMENT PROGRAM) Councilman Beahrs asked what the projected costs of this program would be. Mr. Rounds responded that the costs would be $104,236 for the remainder of this fiscal year; and costa for 197576 for both the Police and Fire Departments would be $288,470. Councilman Beahrs was concerted about the effect of this program if the country should fiu-1 itself in a severe depression. Mr. Rounds replied that the program would provide only for half salary at age fifty, assuring the employee has had twenty-five years of service. George Sipel, City wager., commented that if salaries went down, there would be opportunities for a lower total cost. Councilman Beahrs felt that in the case of a depression, it would be only fair that everyone would experience a decrease in in ; and he did not see that this wa,i provided for in the present contract. 5 9 3 11/11/74 Mr. Sipel explained that there were three variables under the plan. One of these was the number of years of service, the second is the salary being earned, and the third is the percent of that salary fog each year of service. The one variable that could conceivably be affected in a negative way by a downturn in the economy would be the salary of the person and the base upon which the whole formula is considered. Councilman Beahrs asked whether or not an employee's retirement would be reduced if the pay scale went down due to extreme conditions. Mr. Sipel said this would not happen after an employee had retired. If there is a downturn in the economy a year _ or two before an employee's retirement, then the base could be affected. Councilman Beahrs stated that in his opinion, retired persons should have increased benefits if there were a constant inflation, and decreased benefits if there were a depression. Councilman Berwald asked if this were an irrevocable contract and whether the ordinance could be amended if Council so desired. Mr. Rounds responded that the contract could always be amended; but once this benefit had been agreed to, he did not think it could be retracted at a later tine. Councilman Berwald asked if he understood correctly that the ordinance would be amendable only for those persons who were hired after the Bate of this contract. Mr. Rounds responded affirmatively, Councilman Berwald asked if Mr. Rounds could give him the present projected costs for twenty years as compared to the nlw costs for the same period of time. Mr. Rounds said that a report put out earlier sowed a marginal cost of $1,442,000 for a five year period, or $2,884,000 for a ten year period. Those figures are in terms of the present payroll and present uninflated dollars. Councilman Berwald asked if these figures represented additional costs. Mx. Rounds responded affirmatively. Councilwoman Pearson pointed oue that when the city is negotiating with its employees, it ia setting what will be paid to them for the next few years. It seemed to her that if over a long period of time, the City of Palo Alto four it could not pay theca, there certainly would be an opportunity tp renegotiate. Councilwoman Pearson said that the negotiations were really for persons fairly fat down on the pay scale; and if those persons were going to be asked to give up some of their retirement in the event of a depression, It would be her hope that persons with high salaries would have their income deflated also. The ordinance was approved for first reading,on the following vote: AYES: Berwald, Clay, Henderson, Pearson, Norton, Rosenbaum, Sher NOES: None ABSTAIN: 3ahrs ASSENT: Comstock 5 9 4 11/11/74 Employee Retirement Program: Cost of Living Amends ut (64R:591:4) Mr. Rounds stated that this particular item was created by two unrelated moves in the retirement system. He explained that the retirement system provides for a 2% cost -of -living increase if the Consumer Price Indee goee yip more than 2% each year. Over the last few years, the rate of inflation has been significantly higher than 2%; therefore, periodically, the retirement system makes available options to the contracting agencies which will allow for additional cost -of -living allowances to be paid to retired employees. Mr. Bounds recalled that in November of 1973, the city amended its contract to provide such an increase for employees who retired prior to December 31, 1970. On June 30, 1971, the retirement system changed ito formula for computing retirements for miscellaneous employees, adopting a 2% at age sixty formula; and that went into effect on July 1, 1971. Consequently, there was a six month period when some employees retired who did not have advantage of the 5% coat -of -living increase or the 2% at age sixty formula. The 1973 Legislature passed 3 bill which enabled the city to adopt an amendment to give the 5% cost - of -living increase to the three employees who retired during that six month period. Mr. Rounds pointed out that this resolution would declare the city's intention to amend the contract, and this would involve a one -tine cost of $7,678. He said that it has been the policy in the past to adopt these cost -at -living adjustment amendments, and staff recor7mended that Council adoptthe resolution of intention. Vice Mayor Henderson commented that there would be a 2% increase if there were a 2t or more increase in the Consumer Price Index, snd he asked if there were a decrease if the cost of living went :;r. Rounds responded negatively. Vice Mayor Henderson asked if the 2% figure also applied to the Police and Fire Departments. Mr. Rounds replied that the 2% cost -of -living adjustments also applied to the Police and Fire Department employees. See pg. 679 Vice Mayor Henderson felt that in the case of the Police and Fire Department employees, this was rather excessive considering that it was in addition to the 2% at age fifty retirement program. Mr. Sipel commented that if there were a depression of any length, it would be likely that there would be legislation introduced in Sacramento that would take note of this. Similar plans had changed in this way over the past ten years, and Mr. Sipel expected that would continue to happen. He thought it was important to keep in mind that while there was a :oat -of -living accelerator, it was not congruent to the oast--of-living index. MOTION; Councilman Berweld introduced the following resolution and moved, seconded by Henderson, its adoption: RESoLUTICN NO. 5023 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION OF THE PUBLIC EMPLOYEES' RETIE SYSTEM AND THE CITY OF PALO ALTO" The resolution was adopted ou a uulnlamis vote. 5 9 5 11/11/74 Councilman Berwald said there were many other aspects to inflation besides wages; hut wages were a concern, and he thought that everyone present recognized the seriousness of the subject. Secondly, he wanted a legal opinion as to where this sort of ordinance stands in relation to other ordinances. For instance, when could the ordinance be amended without a breach of good faith of the understanding that was entered into, Further, Councilman Berwald wanted to see a written report on the estimated costs through a period somewhat midway in the careers of the average police officer and fire fighter - perhaps fifteen to twenty years - with the figures taking into account inflation and no inflation. Robert Beath, City Attorney, and Mr. Rounds agreed to prepare the information which Councilman Berwald requested. "Channin Place" -- Cosier and Channin ase (CMR:593:4) Naphtali Knox, Director of Planning, said that this itew refers to the project that is now nearing completion at the corner of Cowper Street and Charming Avenue. The'developers of "Charming Place" have made formal application for an increase it the sales price to the maximum amount possible for the two moderately priced housing units they are providing. Mr. Knox stated that Council action was necessary because any increase would reds+.re an amendment to the original conditions of approval. He explained that the present developers of "Channirg Place" acquired the approved plan and the land from Roberts Communities, inc., who were the original applicants, sometime to the spring of 1974. The original developer agreed to the sale of two units at $25.500 to fulfill the below market price requirements. Seven months after Council approval, Mr. Sanchez, the present developer, asked if there were any way that the price could be increased; and staff told him that he would have to supply detailed cost information to support the request. Staff then met with Mr. Sanchez to establish a specific price increase. Mr. 1:nox noted that in the letter from Mr. Sanchez, no specific price was mentioned. The staff and Me. Sanchez took into account actual construction costs as established by sub -contracts, and they excluded land costs, marketing costs, and coats for extras that were not attrAbuteble to the below market price units. Because the exact cost of a unit could not be esstabliaahed, staff established a range when they were working with fir. Sanchez, Mr. Knox said they found that the lowest possible cost of a two - bedroom unit was $27,661; and the highest possible cost, that is - actualconstruction cost, was as high as $38,125. A sales price of $30,000 was agreed upon, which falls between those lows and highs; and all parties agreed that was a fair and reasonable cost. If Council e.pproves an increase in the coat of these un:i.ts. to $30,000, that would represent an increase of 132 over the prey erstly approved price of $26,500. Mr, Knox stated that staff recommended that Council approve the request for an amendment to the condition* of approval of the condominium subdivision map to increase the sales price of these two below market price units at " Channing Place" to $30,000 each and authorize the City Attorney to amend the declaration to effect that change. Further, staff recommended that Council authorize the staff to execute a document as may be necessary to provide that the city and the Palo Alto Housing Corporation will have three months from the date of issuance of occupancy permits in which to locate qualified buyers for the two low/moderate units. After that time, the developer would be free to sell the units at market prices/. 5 9 6 11/11/74 1 Mayor Sher noted that the third point with regard to locating qualified buyers was not in the report from staff, but he assured it was necessary from past experience in trying to locate such persons. Mr. Knox responded that was an item brought to staff's attention by the developer of the San Alma project. Staff included that item in the administrative resolution for that project and notified Council regarding itin their memorandum of October 24. On the 3}st of October, Mr, Sanchez called and asked how long he would be required ao hold the below market price units in the "Charming place" development for sale to buyers who would be qualified by the city before the units would revert to him for sale on the open market. This information was necessary so that Mr. Sanchez: could respond to questions being asked by his mortgage money source. Staff informed Mr. Sanchez that there had been no specified holding time established for this development; but since an agreement was being made with another developer on the matter, it would be reasonable that the same time frame - namely, three months from the date of issuance of occupancy permits - would be applicable in his case also. Mr. Knox thought three months was an adequate time in which to find applicants for the units; on the other hand, ne developer should be asked to keep units empty for an unreasonably long period of time while he is paying construction costs on those units, Vice Mayor Henderson asked if there were any problem legally in retaining the $26,5OO price requirement if Council so desired. Mr. Booth responded that the price was a condition of the subdivision approval; therefore, there would be no prohibition against keeping the price where it is. Vice Mayor Henderson asked what income and assets a person would need in order to buy a unit priced at $30,000. Mr. Knox replied that the income required for a family of three or four persons would be approximately $12,000 per year. The tinsncing available at "Channing Place" is 20% down, so a $6,0.10 down payment would have to be made. Vice Mayor Henderson asked if Mr. Knox knew what the monthly payments would be, including the Owners'. Association fees, after the $6,000 down payment was wade. Ma. Knox responded that his guess would be in the vicinity of $30O per month. He wished to point out that staff was in no case asking a developer to provide a unit at less than it cost hies to build it. In those cases, staff asked the developer to extract land costs, Marketing costa, model home costs, commissions, and profit from the picture in ,order to provide the real construction cost of the unit. What is happening in this case is the developer is saying that since the time he purchased this project from another applicant who had made cost calculations at an earlier time, the change in labor, material, and money costs has been such that if he provides units at $26,500, he would be providing the at less than the unit cost him. Mr, Knox said this is why the matter was being brought before Council. It is quite clear that if Council so chooses, the developer will be required to Fsrovide the units at $26,500 even though that was less than his cost. Vice Mayor Henderson referred to Mr. Knox'ss reference to a policy that no developer should be asked to sell any unit at a price lower than the actual coat of construction, and he said this count had also appeared in the General Plan impact Report. He said he did not recall eatti.ug such a policy, and he asked if it were silly a staff statereint. 5 7 11/11/74. Mr. Knox explained that this was something that evolved. When staff found itself without federal funds to use for subsidizing low/moderate income housing, it faced the question of how to provide through implemen- tation of Council Resolution 4725 some units at less than market price. They began talking to developers about the possibility of their lowering those prices on a quid pro quo basis, and the quid pro quo was in return for an increase in the number of units they could have on their property. In the San Alma project, staff was talking about an R -1-B-8 zone that was rezoned to P -C; and the developer was able to build 32 or 34 units there rather than 17, In return for the increased number of units, he was expected to provide something that would go toward effectuating the policies that the city had - especially the policy with regard to :low►/toderate moos housing. In the "Channing Place' development, the developers initially agreed to provide two units of low/moderate income housing even though they were not asking for rezoning. The only city approval they needed was a condominium subdivision approval, and they probably could have built something like twenty-eight units on the land if they really tried; whereas, they had a total of twenty-six. Mr. Knox noted this was not quite the same as the quid pro quo discussion that staff had with other developers. 'ice Mayor Henderson asked if the city were in any way responsible for the delay in the construction. .fir. Knox responded that the initial delay carte during the tiro when Roberts Communities was involved since it took them eight month: to get through initial application to City Council approval, and he thought the toll of that eight months was not visible until recently. Vice Mayor Henderson referred to the fact that Mr. Sanchez speaks in his letter of the cost of two -bedroom units being in excass of $50,800. In his study of the breakdown of the costs, Vice Mayor Henderson understood that land costs, marketing costs, and profit: would not be included. Mr. Sanchez' breakdown showed a total of over $1,278,000; but Vice Mayor Henderson said that he would eliminate land costs, sales commission, and merchandising costs, thus arriving at a figure of $871,106 that should be used for computing the construction cost. If Vice Mayor Henderson's figure is divided by twenty-four units, you get a figure of $36,196 as the average cost of all units. He pointed out that the agreed upon price was $26,500, so the difference between the net cost and the agreed price is $9,796 times two units, which is a total of $19,592. That figure then would be the amount over the agreed upon price. If that amount of money were spread over the remaining twenty-two units, there would be an increase of S891 for each unit to overcome this "loss". Vice Mayor Henderson stated that if his figures seemed to hold up, then he would have a problem with going to the $30,000 figure. He did not think an increase of $$91 would be toe much for buyers of the twenty-two units to bear. Mr. Knox. tesponded that the cost picture was very complex. Items that could be deducted from the low/moderate units were removed. It was necessary to discover the average cost of a two bedroom unit, and this was found to be $28,287. After taking out some luxury items and replacing them with other required items, staff came to the lowest cost figure of $27,661 in terms of true construction cost. Staff added on all of the other costs, such as land, and came up with a figure of $3£,125 which it the upper end of the range. Staff told the developer that the units could not be sold for anything over S30,000►, because that would make it ia+poseible to reach the upper range of the moderate income families. The. developer agreed with the $30,000 propoeal. 598 11/11/74 Vice Mayor Henderson stated that even if an increase were approved, he vas not sure the cost should be more than what was approved at San Alma a short time ago. He laic: the real problem was that Council approved a contract with the developer, and Council was "on the spot" to have staff now come in as an advocate for the developer. It appears that staff worked this matter out with the developer, and now offered it to Council as a joint recommendation. Vice Mayor Henderson said he would have been much more comfortable if the subject had come to Council first, so that Council could have made a determination as to whether or not it wanted to consider these problems. Council could have had the choice of stating that $26,500 was_the agreed___ upon price, and it wanted to stay with that; or Council could have directed staff to work with the developer in determining costs. Whatever comes out of this, Vice Mayor Henderson said the figures were not very much different on the average than the $36,000 one that he came up with. He said he would he favorable to spreading the $900 over the other units, rather than expect to find two families 679 who could pay $6,000 and over $300 per month, Vice Mayor Henderson stated support for the $26,500 figure. Mr. Knox stated that Council should not feel that staff is present in an advocate position for the developer. There was a request from the developer, and Mr. Knox felt it was his obligation to bring to Council what he considered to be completed staff work. 14hen staff saw the figures, it was obvious they needed some interpretation; and that is what they tried to do. if Council is so inclined, it should feel perfectly free to keep the price where it is. That is a contracted price, and the developer will have to hold to it. Staff did feel that a policy had evolved in which the city was attempting to provide low/moderate units without city, state, or federal subsidy; aad in fairness, the only way to do this was to ask the developer to forego costs that he was not actually paying against these units, that he could pay against some other units. Mr. Knox said staff did not really want the developer to take costs out of his pocket; and it seemed that if the developer had to give the city the units at less than the cost of building them, that was what was happening. If Council takes the position of maintaining the units at $26,500, then Mr. Knox thought that Council should ask staff to take a look at the process in which these costs are negotiated. It could be that the city should be going after lower costa and asking developers to take some cash out of their pockets and attribute it to the other units. Vice Mayor Henderson stated he felt that a contract was a contract. The agreement was signed, and that was where the sale price should stay. Councilman Clay asked how much of an increase had occurred in the market priced units. Mr. fnox responded that Roberts Communities had set the sale price at $36,000; but the present developer has_i:ade the units aomevhat more luxurious, and he feels he is catering to an entirely different market. Although he has not told the city what the market prices are, Mr. Knox thought he crust be asking; for something in the vicinity of sixty to sixty-five thousand dollars. Councilman Clay asked what was likely to happen at San Alma. Mr. Knox replied that there was a different kind of arrangement at San Alma. Sta►f f' a memorandum of October 24 indicated that the original proposal by the developer was to provide four one --bedroom units at $19,000 and four two -bedroom unite at $24,000. They asked 5 9 9 II/11/74 1 for a price increase to twenty-five and thirty thousand dollars. Staff looked over the figures with the developer and carne up with a figure of $29,500 for the two -bedroom units, which was a 23% increase. That figure relates to the $30,000 in this case for the two -bedroom unit, and you have to take into account the size and location. Mr. Knox felt there was some added value to a unit that is closer in to the center of the city; on the other hand, the units at San Alma are somewhat larger. MOTION: Councilman Beahrs moved, seconded by Berwald, that Council approve the staff recommendation: 1, Approve request for an amendment to the conditions of approval of the condominium subdivision map to increase the sales price of the two below --market priced units at "Channing Place" to $30,000 each. 2. Authorize City Attorney to amend the "declaration" to reflect the change indicated in 1. 3. If a qualified purchaser is not found at the below market price, the builder has the right to sell the units at market price ninei:'y days after the issuance of the occupancy permit. The following letter was read into the record as requested by Dan Williams, President of Midpenins:z a Citizens for Fair Housing: "The proposal for a price increase for the two below market - priced housing unity at Channing Place raises complex problems There are questions of equity and questions of precedent - precedents recently set and the precedent you are setting tonight. No matter what decision you make we are sure you will feel frustrated, a frustration that we too share. However, we would remind you that our frustration is minor compared to that of a person who deeds housing. Each increaee in price means many more frustrated families and individuals. The lower you can keep the price the more meaning you give to the time you heve devoted to developing policies to encourage housing for people with a complete range of incomes. Additionally, we hope you will direct staff to investigate the use of air rights above parking lots as another possible method of reducing housing costs," Councilman Beahrs stated that he did not subscribe to the idea that any private a itizen should be requested to subsidize fellow rasidente in a development of this character. If the City of Palo Alto wants to dictate and control to this extent, then it should put up its own money. It aeersed to Councilman Beahrs that $800 was a lot of money for those persons who would have to pay over $50,000 for a place to live; and it was not equitable to force these other families to ;say for the extra costa when the city itself was not willing to do a:o. He urged Council members to vote for the staff recommendations' Councilman Berwald commented that he did not feel that staff vas trying to be an advocate for anyone; on the ether hand, he thought they were trying to be fair and apply the rule of reason to an agreement. le the city is fair with this developer, that would encourage developers to do more of this sort of thing in Palo Alto, If not, this kind of investment capital would be driven out of the city; and there would be no more of these kinds of developments. 6 0 0 11/11/74 Councilwoman Pearson reiterated that Council gave one developer the right to go ahead and build his units which would sell for $36,500, and he sold to another developer who is row building more elaborate units which will sell for approximately $65,000. She asked if this were a correct statement. Mr. Knox explained that one developer went through the process of going from application through Council approval; and at the conclusion of that time, the developer broke up his partnership and sold the property and the approved plans to another developer. The second developer knew that he would have to provide two units st $26,500. Councilwoman Pearson stated that the second developer knew that this was in the agreement. Ile gent ahead and built fancier houses which will sell for $65 - $75,000; and if anyone is able to purchase a house in that range, he could easily afford the little amount of money that would be spread over the twenty-two houses to subsidize the two low/Moderate units. Councilwoman Pearson wanted to know how a -developer could start out building one thing, build something else, and then expect to be rescued by the City Council when they knew full well from the start chat they were expected to build two units that would sell for $26,500. She stated that she did not like that kind of procedure. The developer agreed to help and he should stick to the agreement no matter w:Iat provide low/moderate income housing for those who need it. Councilwoman Pearson took issue with those who feared there would never he another development in the City of Palo Alto, and she pointed out that apartment houses and condominiums were going up constantly. She urged Council members to vote against the motion. Councilman Comstock noted that the difference between $26,500 and $30,000 was about the account of money that was being allowed in the development for sv coming pools. The microwave oven and a f{rep1ac add up to about $800 per unit, and someone suggested that might be the increase in cost per unit. He said he was not prepared to argue that the developer had not suffered from inflation, but the question is the extent to which he was able to foresee that. Councilman Comstock accepted the fact that the whole program was inflated in a manner that the developer did not expect, and the consequence of defeating the motion - which he hoped Council would do -would be that the cost of the other units would be increased. He recommended that Council stand firm on the $26,500 price for the two low/moderate units. Mayor Sher asked if the increased cost of the two units reflected partly a more luxurious unit than was contemplated when the original permit was issued. Mr. Knox replied that the developer has tried not to install any elaborate fixtures in the two low/moderate units, recognizing that he was suffering some inflationary cr,sts.. He stated that he could not say how much cif the cost increase is inflation, how much is due to an understatement of the cost initially, and hew much was due to adding some luxury to the units. Mr. Knox thought it was probably a combination of all three. Thet was why staff found it hard to get at a precise coat, and why they had to deal with a range from $27,000 to $38,000. Mayor Sher asked if the increase in the San Alma project reflected the inflation factor only. Mr. Knox responded that it was basically the inflation factor, but also the final coats included the addition of public streets in the project. 6 0 1_ 11/11/74 Mayor Sher asked if the cost of the streets was not contemplated when the original estimate iaas made. Mr. Knox said that in the original discussions with the developer, there had been no mention of public streets in the project. Mayor Sher asked if the costs had gone up for the units on Arastradero. Mr. Knox explained that those four units were to be provided under Section 235, b'it the funds under 235 were frozen. Those units wete going to have a maximum cost of $21500 for both the t»o and three - bedroom _ units, and federal funds were available to finance those at that time. Also, the developer contemplated building the units at the same time he was building all of the other houses, using the same crews and equipment. However, when the funds were frozen, he went ahead with his development; and he kept asking the city if he could go ahead and find some other arrangement to build those two units. The staff's answer was that if 235 came alive again, he could not build the units before having approval; or he would not get the 235 funds. He waited; end eventually, he was all finished with his development, and the building crews all pulled out. The developer had to go back in with new construction crews, new start- up costs, etc., as though he were starting a new project. Mr. Knox thought the cost ended up being about $30,700 for the three -bedroom units. Mayor Sher asked if these figures had been the projected ones at the time staff was talking to the developer, what figure would staff had recommended to Council for the low/moderate units. Mr. Knox responded that staff would have recommended a figure somewhere between $36,000 and $38,000. Mayor Sher stated this project well illustrated the difficulty of not only implementing Resolution 4725, but also with the option adopted recently which requires that a certain percentage of low/moderate units be provided in new projects. When that was adopted, Mayor Sher felt Council recognized that as long as there were no state or federal assistance programs, that there was a goal. represented. It was good to have the goal on the books in the even; that should happen; but in the meantime, the city might not be able to reach that goal. So, in the interim, the city was operating under Resolution 4725 which is a kind of negotiated arrangement in trying to accomplish this purpose. Mayor Sher agreed with the staff principle that while the developer should not include land cots and profit, the city sieo=edd attempt to get the low/moderate units in a way that does not require the developer to bear the loss that would occur. On the other hand, 1tayor Serer said he had a lot of trouble with this particular project because he found it difficult to isolate what portion of the increase was due to inflation and which portion was due to the fact that the project had become a more luxurious development. For the future, it was necessary to recognize there would be difficulties in providing low/moderate units in private developments when there were no assistance program. Councilman Berwald responded to Councilwoman I'earson`s comment regarding the fart thet building would continue in Palc Alto under any circumstances. He explained that his point vas that there probably would not be any more of this kind of building; people would be still building in Palo Alto, but they woiald be discouraged from coming to the city and agreeing to put in lower priced unite if the city were neat _fair with rheas. Council n Berwald pointed out that staff had calculated 6 © 2 11/11/74 the average of the two figures they had come up with as being $32,893.71; therefore, $311,000 was below the average. He feat staff was making a recommendation that was a good one, and he did not think the increase would work any great hardship on people; but the main thing was that the city would be giving the developer an opportunity to realize some return from the project that he would not realize if the cost of the low/moderate units were: not increased. Councilman Berwald pointed out that there are some develi;pments in town, notably the one at Alma and Green Meadow Way, where the units were not moving because they were probably priced too high. If this is the case, they will not sell; and the price will probably come down. Councilman. Eeahrs-thought it would be a good idea to approach this kind of a problem in the future with a formula, for instance, ,so that Council would not have to go through this kind of a situation again. He thought it would be well for staff to give Council some figures some time as to just what is happening to residential construction in Palo Alto as compared to four or five years ago. Vice Mayor Henderson said that if he understood Councilman Bertaald correctly, he was saying let the lcw/moderate income people pay $3,500 per unit more than was originally anticipated, rather than have the market price people spend $900 per unit more. The city made a contract with a developer in this case. That developer then sold to another developer who added luxury items. He is not adding those luxury items to give people something, he is adding them to make the units more attractive and thus increase hie profits. Vice Mayor Fenderson pointed out that the other twenty-two units had been increased far more than the $900 he had calculated that would he necessary to keep the two low/moderate priced units at $26,500. He agreed that there were some problems with Resolution 4725; but he felt there was more of a problem with a Council that will make a contract under one set of conditions and then be pushed into another set of conditions and alter the contract. ,Therefore, Vice Mayor Henderson opposed the motion. Councilman Rosenbaum thought everyone recognized what inflation had done to building costs, and he did not think a 13% increase was unreasonable. He recocnended that Council approve the staff recommendations. The motion passed on the following vote: AYES: Beahrs, Berwazd, Clay, Norton, Rosenbaum, Sher NOES: Comstock, Henderson, Pearson f le Route Sstem - _ eisMtno asj an a.e:568:4) MOTION: Councilman Comstock introduced the following resolution and moved, seconded by Pearson, that it be adopted: RESOLUTION NO. 5024 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING RESOLUTION 4441 EXTENDING THE URBAP BICYCLE ROUTE SYSTEM" Co:mcilwoman Pearson asked what had ever happened to the study for the trails along San }ransisquito Creek that were given to ataff by Hr. Rend Peschche-Koeait, 603 11/11/74 red Noguchi, Traffic Engineer, responded that the assignment '►e.id not been forgotten; but it was one of many that had been given to his department by Council, such as the bicycle boulevard concept, the Alma Street corridor, etc. A response would be coming back to Council in short order. Councilman Seahrs stated that he thought it important that motorists be warned in some way to expect bicyclists to cross an intersection from the sidewalk. The resolution was adopted on a unanimous vote. Request for Staff to Investigate Councilman Comstock said he could see something like this rapidly become a very substantial study since there are a lot of engineering and legal questions involved. What he was hoping would occur at this point would be that if Council approved his motion, that would be considered an indication to staff that it should explore this kind of concept; but because it has the potential of being a sizeable study, there were two things he hoped would not happen. One of these was that in the process of engaging in the study, the staff would not become preoccupied and piss opportunities for developments - for instance, California Avenue. Secondly, he thought Council should get some reading cn the subject before it progressed too far. Council- man Comstock asked staff if they would probably come back to Council with some kind of an interim report if they sass that it was developing into a large assignment, with a recommendation as to whether or not they thought such a study would be worth the effort. Mr. Si.pel thought the best thing for staff to do would be to spend eight to ten hours on a survey of what the problem involves and some of the possible alternatives. They would then come back to Council for its reactions and directions as to how much further the matter should be explored. Such a report could be back to Council in about two months. MOTION: Councilman Comstock moved, seconded by fberwald, that staff be directed to look at parking lot air rights development proposals end consult with the Housing Corporation or other groups as appropriate. Councilwcman Pearson hoped that staff would also look into the possibility of getting some recreational faciltties above parking lots, such as tennis courts. She recalled that she placed this very items en the agenda in 1967; and them were all kinds of articles at that time about the use of air rights. The motion passed on a unanimous vote. Construction of a Broadcastina Booth Councilwoman Pearson thought it was time to do for KZSU what the city should have done originally, which was build them a broadcasting booth. The broadcasting occasionally disturbs Council members who sit at the end of ttte table where KZSU personnel sit, and it sometimes disturbs the audience. Councilwoman Pearson pointed out that KZSU was paying for the telephone line, which was about $15.04; and at the beginning, the city said it would carry that expense. She proposed a three -sided giaem or plaatic booth'so tbat the broadcaster could i' see and monitor what was going on. 6 U 4 -11/11/74 MOTION: Councilwoman Pearson moved, seconded -by Rosenbaum, that staff be directed to investigate the cost of installing a broadcasting booth for KZSU, and report back to Council. :tike Windes, 305 Mirrielees, Stanford, Station Manager of KZSU, said that the agreement that was sigred in April of 1972 needed to have the obligations of both sides reviewed. Live broadcasting of the Council meetings had been carried out, and KZSU also broadcasted almost all of the Comprehensive Plan meetings and the Fire Zone I meetings. He pointed out that at 7:00 p.m., before the Council meeting, there was a fifteen minute interview with Mayor Sher. Further, KZSU provided all of the necessary equipment for the actual broadcasting. The city has the obligation of providing the sound system, and KZSU did hake use of that. Secondly, the city had agreed to construct a sound booth; and K2SU was very disappointed that the booth had never been built. Mr. Windes stated that the contract was not fulfilled by the city. It was now two and one-half years since the contract heed been signed, and Mr. Windes requested the city to fulfill its obligation by constructing the sound booth. Councilman Clay asked what the term of the contract was. Mr. Windes responded that the term of the contract was until either part; gave five days notice. Councilman reahrs asked ';r. Windes what he would think of using the Council conference room. Mt. Winder replied that there ware occasions when the broadcasters would want the opportunity to interview people on the spot; and that would be very difficult if their base of operations vas the conference room. Councilman berwald stated that he thought the broadcasts were great, and he would not want to have them stopped. Vice Mayor Henderson said he was sorry that he had not passed along to KZSU all of the complimentary positive comments that he had receive from the public with regard to the broadcasting, The motion passed on a unanimous vote. jeauest that Aut_omdLic Doo ss and Curbside Rams Toe ni at�taa led Councilwoman Pearson stated that she could find no automatic doors - except at the Purity Market _ or curbside ramps for use by the physically eand4_capped at the Stanford Shopping Center. She suggested that Council ..rv+ to persuade the major store owners to install at least one automatic door and some ramps. Councilwoman Pearson was aware that there was a committee working on this problem; she did not mean to bypass thews at all, and perhaps they had same idea of how to do this. She would like staff to place high priority on accommodating the need for these facilities at Stanford Shopping Center. Charles Walker, Assistant City Manager, said that a study group had been working with staff for a number of months; and he was sure that group would appreciate the Council's support. At present, the study group was working on this specific problem; and they had been in communication with people at the Stanford Shopping Center. 6 0 5 11/11/74 MOTION: Councilwoman Pearson moved, seconded by Berwald that staff be directed to place high priority to accomplish the implementing of facilities for the handicapped at Stanford Shopping Center and to work with the study committee and inform them Council supports its efforts. Waiter A. Plonski, 72 Stanford. Shopping Center, said that the Shopping Center has been moving in the direction of providing more facilities for the handicapped; and he stated that there are seven existing ramps that can be used by wheelchair persons. Also, two exclusive parking stalls were being tested for handicapped drivers. Further, special parking permits had been issued for years to handicapped drivers which permitted curbside parking in selected areas; and the Center would continue that, Mr. Plonski stated that the automatic door problem was a eamplex one, since such doors require extensive architectural changes. The cast for converting each regular door into an automatic one is approximately $2,500, so this phase of the problem requires careful analysis. A typical small store owner would be hard pressed to justify the expenditure of that much money. t1r. Plonski commented that sometimes in solving a problem for a handicapped person, a problem is created for the average person. For instance, yellow coloring has to be ueed on ramps to attract attention to the fact that a hazard exists. Councilman Beahrs agreed that ramps are a hazard to persons who are not handicapped; and he suggested that Councilwoman Pearson's proposal include language such as installing automatic doors and safe and appropriately located curbside ramps. Councilwoman Pearson was pleased to learn there were some ramps in the Shopping Center. She said that if the conversion of a regular door to an automatic one cost only $2,500, then large stores zuch as Macy's, The Emporium, Bullock's, etc. could certainly install one door, at least. She did not agree that ramps were hazardous to normal persons, since they could easily see and walk over them without any difficulties. Councilwoman Pearson also thought the yellow coloring might even be an aid to the handicapped. The motion pass=d on a unanimous vote. Ad.1 ourn*ent The meeting of November 4, 1974, adjourned at 9:20 p.m. on November 11, 1974 The City Council of the City of Palo Alto set on this date at 9:20 ,.rs. in a regular meeting with Mayor Sher presiding;. Present: 5eahrs, Berwald, Clay, Comstock, Henderson, Pearson, Norton, Rosenbaum, Sher Absent: None Minutes of October 10, 1974 tgal faile llgOlaTaglaggiriffMNOW MOTION: Councilman Comstock moved, seconded by Henderson, that the minutes of October 10, 1974, be approved as presented. The motion passed on a unanimous vote. b 0 5 11/11/74' Minutes of October 151 1974 Councilman Clay asked that the sentence beginning on the eighth line of page 453 read as follows: "Further, the Housing Corporation says that the conditions of Option 3-C do not interfere with the sub -corporation's criteria". Vice Mayor Henderson requested that the spelling of "Vice" be corrected at the beginning of the fourth paragraph on page 454. Councilman Beahrs referred to the last sentence in the third paragraph on page 447 and asked that "e1ivaory" be corrected to "illusory". He requested that the beginning of the second sentence of the second paragraph on page 455 be corrected to read: "Revenue bonds or a general obligation bond voted by the people would accomplish this". Councilman Berwald requested that the sentence beginning on the tenth line of the third paragaph on page 448 read as follows: "There might have to be a regulation to cover this situation". Councilman Berwald asked that the lsat word of the fourth line from the bottom of the third paragraph on page 448 be changed to "an"; and that the words "impact report or drawing" on the next line be deleted and the words "with a recommendation" be inserted. The very last part of that sentence should read: "using; as a standard the number of bedrooms rather than dwelling units". MOTION: Councilman Con:stock moved, seconded by Henderson, that the minutes of October 15 be approved as corrected. The motion passed on a unanimous vote. Proclamation Honorin ft.mwms tgencyw item) MOTION: Mayor Sher moved, seconded by Berwald, that as an emergency item under Specia) Orders of the Day, a proclamation concerning Armistice Day be presented. The motion passed on a unanimous vote. Mayor Sher read the proclamation honoring veterans and naming November 11, 1974, as Armistice Day in the City of Palo date. John Snow, 105 Lowell Avenue, representing the Veterans, apologised for the time he had taken at the Council meeting on November 4. He reported that the Veterans lad a fine Armistice Day ceremony at their building, and he extended the appeufciation of the Veterans co Council for its approval and backing. :Mayor Sher presented the proclamation to Mr. Snow. Executive SesaLQ The Council recesaad to Executive Session to discuss litigation from 9;3© - 10:55 p.m. 11/11/74 Re ort re A artment Licensing Pro raa �i'IYa#S i .I of the PAST The following statement was made by Mayor Sher: "In executive session this e,ening, the Council has decided to appeal from the judgment of the Superior Court of Santa Clara County declaring invalid Chapter 4.15 of the Palo Alto Municipal Code (commonly known as the Apartment Licensing Program). The Council has been urged to appeal from this judgment by several individuals and organizations, including the Midpeninsula Citizens for Fair Housing, the NAACP Legal Defense and Educational. Fund, Inc., the San Jose Area Council of the Anti-Deiamaeion League of B'rai B'reth, San Francisco Lawyers' Committee for Urban Affairs, the Human Relations Commission of the City and County of Sacramento, the League of Women Voters of Palo Alto, and the Council. for Civic Unity of the San Francisco Bay Area, among others. It appears that many of these organizations, and very possibly a variety of governmental bodies, not only support such an appeal but tyre willing to participate in the filing of an amicus curiae or "friend of the court" brief before the appellate court A consistent and compelling reason ie put forward for such an appeal: the legal question will be far broader than the validity of the City's apartment licensing program alone. At issue is whether any direct or indirect local action can be taken to co -bat housing discri;.trnatioa, including action for the specific benefit of the elderly, the handicapped, and wonen as well as for racial and religious minorities. It behooves the City of Palo Alto, which has been in the forefront on many social issues with wide-r_2ngl.ng impact, to have this important question definitively settled by the appellate courts of the State of California. The Council has taken specific note of the fact that the legal research by the City Attorney's office on cbe issue to date has been very extensive, leaving relatively little legal work to be done on appeal. In addition, offers from prominent attorneys to aid in writing the briefs on appeal have been received, which will reduce the costs substantially." Councilman Beahrs stated that in opposing this action, it was his contention, in part, that the intent or clarification of state law is better effected at the level of the Legislature than by local. Councils or even the courts. General social problems of this type should be a burden of the total state-wide community and not of individual municipalities. Therein lies the bent protection and guarantee of Justice to all interests on matters of serious social concern. See pg. 679 (Councilman Beahrs left at 10:55 p.m. and did not return.) Report of Councilwoman Pearson and sue+ 1 the Councilwoman Pearson stated that she serves on the Social. Concerns Committee of the Planning Policy Committee of Santa Clara County, and the charge to_that Committee is as stated on the first page of her memorandum to Council. This is a report on what the public and private agencies of Santa Clara County are trying to do, and the aim is to determine what PPC can do to coordinate and integrate 6 0 8 11/11/74 the services in the County. The memorandum points out that the trend on the federal level is that the county will be given block grants with few strings attached. Councilwoman Pearson pointed out that the Housing and Community Development Act of 1974 was passed, and the Committee was working with that. Also, the Allied Services Act was passed on January 24, 1974, and the Committee was interested in coordinating and evaluating these services. The League of California Cities has prepered an action plan for social services to try to get cities to take more responsibilities themselves, rather than have those responsibilities on a state, county, or federal level. They also wanted to get cities to adopt a social services element into their General Plans. At the county level, there was the Capacity Building Project which is to determine just what exists in the county as far as social needs are concerned. There is also the Economic and Social Opportunities groups which is a state agency; and it wi11 do things such as supply staff to each city individually, or to cities to assess the needs and existing services. Councilwoman Pearson said that also in existence was the Social Planning Council and the Community and Governmental Relations Committee. The Social Planning Council was used in the City of Palo Alto when it had the need for child care documented by that group. She added that the Comprehensive Health Planning Association of Santa Clara County is a voluntary organization, which is authorized by federal and state law. This group passes on such things as who can build hospitals, how many beds would be a11eved in the county, etc. Councilwoman Pearson noted that there were hundreds of agencies in the county, and some of the members of the PPC felt that it was very disorganized. Some of the alternatives that came up for involvement of the PPC - which is the political group of the county composed of representatives from sixteen cities, a county member, and the county's Punning Commission - are shown in the memorandum. It was requested of each Council member of the PPC go hack to its Council and get a response to the eight alternatives, or whether the Councils wanted PPC to do anything at all. Councilwoman Pearson's personal feeling was that it would be an enormous task to coordinate everything that is going on in the county, and the dog work should be left up to the county since it is geared toward that kind of thing along with ESO, the Social Planning Council, and the Comprehensive Planning Association. She also felt that the PPC should be involved to a lesser degree since it is the political body, and many of these social services have not gotten to the right people in the cities where they ',ere needed unless there was some political activity. Councilwoman Pearson favored recommending alternatives 1, 5, 6, and 7; and her opinion on the rest of them was that they were too vague or too large. The first alternative was that the PPC should undertake a one-year work program to assess the mutual impacts of social planning and traditional city planning. Study groups could be ford and various problems could be studied .with the input of social planning agencies: for instance, how zoning affects the number and typos of services which are provided in an area.. Councilwoman Pearson realised thia sounded like quite a big job, but she thought that the county would be quite competent to do this; and within the period of one year, she felt they would come up with some good ans'ers. The fifth alternative was that the PPC should encourage greater participation by the cities on voluntary planning and policy boards and commissions. Such participation would enable city representa- tives tc provide input reflective of particular city needs. Count ilwoman Pearson recommended that Council encourage them to do that, and it w+as something that PPC could bring back to each of the citiee. The sixth alternative was that PPC should consider involvement with ESO's Partnership Project. Such involvement would provide a practical and helpful experience in planning for human cervices at the local level. Councilwoman Pearson said this was being done in Campbell 609 11/11/74 where a determination was being made of what the needs are of the citizens of Campbell; a social element would be developed, and an attempt would be made to meet the needs - hopefully with county money. The seventh alternative was that the PPC should encourage all cities to develop eemprehensive community -wide social goals as the first step in meeting the needs of residents. Councilwoman Pearson considered that was what Palo Alto was doing in its own way with Child Care, Drug Abuse, Senior Citizen's activitieu, and all of the other things that are done for Palo Alto citizens; but it just had not been tut down as a social goal. MOTION: Councilwoman Pearson moved, seconded by Comstock, that the City of Palo Alto convey to the: PPC it's interest in numbers one, five, six, and seven as shown on their list of Alternatives for PPC Involvement. Councilman Beahrs pointed out that apparently no effort was made at all to define the differing responsibilities at the various governmental levels. He felt that the county should make it clear which responsibilities were primarily county ones and which ones were city responsibilities. Furthermore, Councilman Beahrs thought the study should state the possible sources of funds and the equitable apportionment of them. In his opinion, there was a lot of confusion because of the failure to properly define regional and municipal responsibilities. Vice Mayor Henderson stated support for the motion as made. Councilwoman Pearson agreed that two big probienty were the definition of city and county responsibilities and an equitable apportionment of funds. She stated that the Committee would be addressing itself to those problems. The motion passed on a unanimous vote. Bic cle Pedestrian Bride at Wilkie Wa :4) MOTION: Councilman Comstock moved, seconded by Henderson, that Council officially dedicate and name the new bicycle and pedestrian bridge at Wilkie Way, scheduled for completion during December of. 1974, as the "James A. Hawkinson Memorial. Bicycle/ Pedestrian Bridge". The motion passed on a unanimous vote. Mayor Sher stated that Jim Hawkinson had been a valued and talented .member of the city staff; and speaking for the entire Council, he said that this would be a very fitting memorial. 4175 Pate Mill Road.- Qsc tion of -4 -Public t t es scent CMR:605:4) MOTION: Councilman Comstock introduced the following resolution and moved, seconded by Pearson, its adoption: RESOLUTION NO. 5025 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ORDERING THE VACATION OF A CERTAIN PUBLIC UTILITIES EASEMENT THROUGH A PORTION OF SECTION 15, T.7 S., R.3 W. H.D.B. & M. (LANDS OF KRAMER) VICINITY OF PAGE MILL ROAD" The resolution was adopted on a unanimous vote. 6 1 0 11/11/74 Paraasedic Field ?rain'ne. (CXt:599:4) MOTION: Councilman Comstock moved, seconded by Henderson, that the Mayor be authorized to sign the agreement with the City of Redondo Beach as attached to the staff report dated November 7, 1974. The motion passed on a unanimous vote. lut ion Honorin 100th Biethda MOTION: Mayor Sher moved, seconded by Beahrs, that Item 8 on the Agenda dealing with the preparation of a resolution honoring Mrs. Mary Wilt Denison Thomas on her one hundredth birthday be moved forward on the agenda. The motion passed on a unanimous vote. Mayor Sher stated that Mrs. Thomas was one of the first Councilwomen in Palo Alto, and her 100th birthday would be on November 19. He said that Airs. Thomas would be visiting City Hall and would be in his office an November 18. Mayor Sher invited the Council members to join him at that time for the presentation of the resolution. ::CTION: Councilman Comstock introduced the following resolution and moved, seconded by Beaters, that it be adopted tonight as an er:erger_cy item: RESOLUTION NO. 5026 entitled "RESOLUTION OF APPRECIATION TO MRS. MARY DENISON WILT THOMAS FOR HER PUBLIC SERVICE TO THE CITIZENS OF PALO ALTO, UPON THE OCCASION OF HER ONE HUNDREDTH BIRTHDAY" The resolution was adopted on a unanimous vote, i c el Fire Buil (0 :613:4) Mr. Sipel reported that the agreement between the City and La Casa de Nieto y Amigos, Inc. provides for the procurement of financing within a certain period of time. The time period had long since expired, and the financing had not been arranged. Therefore, it was the City Manager's intent to terminate the agreement as of November 18. Timothy Ward, Attorney at Law, 2465 East Bayshore Road, represented Richard Nieto, President of La Casa de Nieto y Amigos, Inc. Mr. Ward stated that there had been consistent efforts on the part of La Casa in its development and reconstruction of the Old Police/Fire Building, and he reviewed the procedures that had been gone through with the city by his client. Mr, Ward said that his client had actual subscription commitments for the sale of stock for approximately $200,000. This project was originally scheduled for traditional orthodox bank funding, in conjunction with the Small Business Administration. Due primarily to the lack of money and the high interest rates, Mr. Nieto had been unable to secure traditional bank financing, nonetheless, he has continued his efforts to the point that over one-third of the construction in the building has been completed. Mr. Ward did not feel his client could be governed by, or pay the penalties of, the American economy today. He pointed out that approxi- mately $200,000 of the necessary $500,000 had been raised, and the balance of $300,000 waa being structured into a lease package with various interested and potential business affiliates. That route was being explored presently with relative success. However, there was a 6 1 1 11/11/74 new, and potentially very viable, source of financing as of this date. Mr. Ward reported that he and Mr. Nieto had met that afternoon with the Director of the Small business Administration who had flown to San Francisco specifically to discuss this project. He presented a letter from James Marks, Director of Capital Development, United States Department of Commerce, stating that the project had a thigh probability of receiving funding. Further, the letter indicated that Opportunity Capital Corporation had agreed to review the package funding request and stated "some difficulty in refusing such a package". Mr. Ward felt that funding for Mr. Nieto's project should be able to be secured from one of the several sources within the next ninety to one hundred and twenty days. A second letter was presented from Julius Spinoza, who is the Regional Director of the Small Business Administration in San Francisco, in which it was stated that an evaluation had been made on the loan proposal of La Casa de Nieto y Amigos, Inc; and it had been determined that the application was economically viable and potentially represents a significant minority enterprise. Further, the SBA had intieted action to obtain funding through the application of SBA LDC 502 program. Mr. Spinoza anticipated that funding would be forthcoming in approximately ninety days. Mr. Ward contended that the statements made in these letters bolstered the advice he had given his client - that he most definitely was not in default of the lease. Mr. Ward asked for the continued cooperation and confidence of the city. Councilman Norton asked what exactly Mr. Ward was asking Council to do. 'Sr. Ward responded that he was asking the city to agree that there is no default. Further, he was asking for the city's understanding and continued cooperation by stating that under the circumstances, an extension was due. An extension of sixty to ninety days granted formally by the Council would be very welcome. Mayor Sher asked if construction would continue during the ninety day period. Mr. Ward responded that Large Construction Company had been asked to stop construction until there was a clear definition from SBA or other sources as to their intention on the remainder of the loan. Mayor Sher asked if he were correct in understanding that if Council decided to grant a ninety day extension, Mr. Ward or Mr. Nieto could not state whether or not construction would go forward. Mr. Ward said this was correct. Councilman Norton commented that there was a letter from Mr. Large saying that he had filed a lien on the property. He asked Mr. Booth for his opinion as to the validity of the lien, and whether the city would jeopardize its legal position if an extension of time were granted. Mr. Booth responded that an extension of time would not affect the validity or invalidity of the lien, and it did not operate against any interest that the city has. Councilman Norton asked if the lieu would be against the land or the improvements. 6 1 2 11/11/74 Mr. Booth responded negatively. Councilman Clay asked Mr. Ward if he had an approved SBA guaranteed loan application. Mr. Ward replied that the entities that assisted in applications of this nature had worked with Le. Casa on each bank that they had gone to presenting the loan package for the SBA guaranteed loan; so to that degree, his answer would be "yes". Councilman Clay asked if he understood correctly that after having gone to a number of lending institutions and being denied their request, then it is acceptable to ask for a direct SBA loan. Mr. Ward responded affirmatively. Councilman Clay -asked why La Casa had not gone earlier to the SBA. Mr. Ward replied that the SBA will not give you a hearing until they see that banking sources are not responding to your request. Councilman Clay asked to hear again the comment made by Opportunity Capital Corporation. Mr. Ward quoted their state!.ent as being "sore difficulty in refusirg such a package". Councilman Clay concluded that this was not a definite statement of support. Mr. Ward explained that Opportunity Capital was an alternate, but the SBA was considered the prime possible source of funding. Councilman Clay asked if in terms of a time frame, La Casa had just gotten enough t!enials to enable them to go to SBA. Mr. Ward said the problem was that each bank that had been approached would react positively and indicate interest. After such time had passed, La Casa would then be told that in view of the tight money situation, no loans would be made. Gordon Yoch, 986 Colonial Lane, asked Council to extend every effort to allow this project a reasonable amount of time to obtain the financing that was needed in addition to the money that had been supplied by a number of persons in the audience. Richard Nieto, 951 Dennis Drive, asked Council to grant a reasonable Sint of time for La Casa to pursue the various offers of financing. Mr. Nieto stated that he needed the help and understanding of the City. Councilman Beahrs asked how many days extension Mr. Nieto would like to have Mr. Nieto responded that it would appear ninety days would be sufficient. Councilwoman Pearson asked Mr. Nieto if the t:ork were one --third completed. Mr. Nieto responded affirmatively. Councilwoman Pearson asked bow long it tcok to complete one-third of the project. ff 6 1 3 11/11/74 Mr. Nieto replied that the work had been done in about two and one- half months. Councilwoman Pearson was interested in how much longer it would take to do the other two --thirds. Mr. Nieto said that what remained to be done was the easy part, and he thought the work could be completed between sixty to ninety days. Councilman Clay asked if during the'discussions with SBA, the subject was meutiored of the pressure that La Casa was under from the city to get some definitive action. If this had been talked about, what willingness did they show toward speeding up their process. Mr. Ward was informed that because of the nature of the project and the intercession by Congressman McCloskey's office, the application would be given all due speed. Sixty to ninety days seemed to be a very comfortable time frame of reference for the SBA. Councilman Clay asked if an assessment had been made of the La Casa project recently. Mr. Ward responded that three or four full assessments had been made since the project had been starred. The project's feasibility has greatly improved due to the fact that there is now behind it a substantial amount of equity funding. Vice Mayor Henderson pointed out that Mr. large would not be able to continue work until La Casa received the money, and that is likely to be ninety days. If Mr. Large thinks he can finish the work in sixty days after that, that makes a minimum of five months. Vice Mayor Henderson's own opinion was that the project would end up taking seven or eight nor.ths before completion. Mr. Sipel said that Council should be mindful that this is a community asset that has been turned over to Mr. Nieto to develop. In the lease document that was prepared, the city contemplated that Mr. Nieto would get his financing in a sixty to ninety day period; but eight monthe had gone by rather than three months. During that extra five month period, Mr. Sipel said he tried to work with Mr. Nieto to satisfy himself that financing would be forthcoming. The last time he met formally with representatives of La Casa, Mr. Ward gave hiss a letter dated September 17, and he quoted: "Our information is that by Friday, September 20, 1974, NEDA will provide my client a finished loan package to be submitted to the Bank of America in Palo Alto by Monday, September 23, 19:4. We estimate that Bank of America will take a period of two weeka to review the KElA financing proposal. Assuming a go ahead from the Bank of America, the package would then be submitted to the SBA for their required approval. This, we estimate„ will take an additional ten day period." Mr. Sipel commented that this letter was written after a meeting between the two parties. From September 20 until approximately November 1, there was no communication between the two parties as to what happened with respect to those procedures that had been outlined by Mr. Ward, It was only after some newspaper articles that Mr. Sipel learned that there was, in fact, a problem v ith the financing. The letters that Mr. Ward presented tonight were written today following a meeting about which Mr. Sipel had no knowledge. Another interesting point was that Council and staff had heard tonight there had been $200,000 pledged to the project, and Mr. Sipel wondered why there had been a lien filed againstthe city and Mx. Nieto for $31,©00 construction 6 1 4 11/11/74 work which has been dons: and has not been paid for. Mr. Sipel said he could not agree with the statement that one-third of the project had been completed. He had been told that the project was at least a $250,000 one, and roughly $51,000 had been spent. The contractor told Mr. Sipel that he would need ninety days to complete the work once the financing is received. The City Manager stated that he has been in favor of the project from the first time that Mr. Nieto submitted his proposal, had worked with Mr. Nieto, and had gone five months beyond the agreed upon date without any specific authorization from Council to do so. It was now time to pin down a date by which Mr. Nieto would get financing or there would be no more extensions. Mr. Sipel said that if Council wanted La Casa to proceed, an amendment to the agreement would be in order. In addition to the amendment on the time element, specific controls should be looked into. He pointed out that as long as the building was not productive after the first of January, the city would not be receiving its money. Mr. Sipel recommended that if Council wanted to go forward, it should give direction to staff to prepare some amendments to the agreement that would reflect the city's concerns. Corcilmman Beahrs stated that he did not think anyone was critical of the way Mr. Sipel handled this matter. He expressed disappointment with the problems not entirely in control of Mr. Nieto, and he admitted that Council delayed quite a while before doing any th{.tap about the proposal. Councilman Beahrs asked if anything could be salvaged out of this project if Councildecided to cancel out tonight. Mr. Sipel felt that the city had received something of value in the work that had been done on the project up to this point. If Council decided not to extend the lease term, an effort would be made to find a new developer or have the city build it. Councilwoman Pearson wanted to know if ,fir. Sipel thought the project might be too large. She also asked if there were any people expressing interest in taking over the building. Mr. Sipel responded that he did not think the project was too large. He said he had a couple of inquiries from people about the possibility of taking over the project, but he regarded them as strictly exploratory. Mr. Sipel had discouraged any such discussion until it was clear to him what Council wanted to do. Councilwoman Pearson thought Mr. Nieto had missed a good bet because the city would have been a proper ally, and she felt that he should have been working with MT. Sipel very closely when he found he had a problem. If that had been the case, perhaps more could have been done in terms of pressure and in contacting people, Cohncllwo¢nan Pearson asked how more cooperation could be established between Mr. Nieto and Mr. Sipel. Mr. Sipel responded that Mr. Nieto should send a weekly report to the city as to the progressing of the financing. t Comci1man Uor.on said that he was familiar enough with this kind of application to be aware of the fact that results are rarely as certain as the letters presented by Mr. Ward suggested, particularly in -the case of the federal government. Ile thought there might be a better way to find out pore about this matter, and his idea was to ask Mr. Sipe/ to check directly with the authors of the letter. Mr. Sipel would then be in a position to make an appraisal on his own so that he could come back to Council in a few weeks with his personal frank opinion on the subject. 6 1 5 11/11/74 Mr. Sigel responded that through telephone calls, he could have a fairly good idea by next week whether the SBA would really be able to deliver. The City Manager said that no motion was needed on this subject, since this was something he would normally do anyway. Mr. Sipel mentioned that the Office of Minority Business Enterprise was largely a pressure group that ivRs effective in that context, but he did not know if they had any dollars to appropriate. MOTION: Mayor Sher moved, seconded by Henderson, that staff be directed to prepare clarification on several points and an amendment to the lease between La Casa de Nieto y Amigos, Inc., and City of Palo Alto, that the lease be terminated 120 days from November 11, 1974, unless: - 1) Financing be obtained or an irrevocable commitment therefore be obtained vy that date; See pg. 6/9 See pg. 679 2) Construction be commenced on or before that date provided that La Casa start Immediately to file weekly reports with City Manager concerning status of financing and construction and in the event that satisfactory progress is not demonstrated, the City Manager shall return to the City Council to terminate the lease at an earlier date. The motion passed on a unanimous vote. Co swell Plaza Extension - "wa o : o iON: Councilman Norton introduced the following two ordinances and moved, seconded by Beahrs, their approval for first reading and that the bid be awarded to Huett.ig & Schroam, Inc., in the amount of S17,035.70: and ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADDING SECTION 22.08.065 TO THE PALO ALTO MUNICIPAL CODE (DEDICATION OF COGSWELL PLAZA EXTENSION) TO ENLA.;GE THE AREA THEREOF ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO APPROVING AND ADOPTING PLANS FOR TIE I.4'ROVEMENT OF THE COGSWELL PLAZA EXTENSION The motion passed on a unanimous vote. Re.•us of Norton re art ent • a er cens n . finance 1 - Councilman Norton was aware that.it appeared to everyone that this subject had been resolved by the council's decision in Executive Session to appeal rather than to repeal, but he still felt compelled to persist with his motion that the ordinance itself be repealed. Councilman Norton had never thought the ordinance was a good one; 6 1 6 11/11/74 other, he felt that the action of at least two years ago authorizing the City Attorney to file law suits in selected discrimination cases would he a much more effective way to solve the problem of discrimination in Palo Alto. In his opinion, the maintenance of signs, the record keeping requirements, etc., of Chapter 4.15 were onorous, offensive to landlords, and tended to make landlords feel that Palo Alto was not a very desirable place to do business. Councilman Norton said there was an analogy between this and the massage parlor discussions, where the staff had recommended that owners of massage parlors be forced to keep records of the patrons; and this was much the same as the present ordinance requiring that landlords keep records of those who inquired about rentals. Councilman Norton stated that the Policy and Procedures Ccmmtttee had the good sense to reject that approach for the massage parlors as not being workable and being an unfair imposition. There was a close parallel here in that there was no reason to have that requirement in the case of the massage parlors, and there was no reason to have it in the case of landlords. He referred to the Rumford Act, and Councilman Norton pointed out that the great deficiency in it was the lack of enforcement. Until ordinances were enforced, there would be no change in the situation. In his opinion, the passage of the ordinance, and the appeal, misled people into thinking that Councilhad done something. Councilman Norton expressed his disappointment that two years had gone by, and the City Attorney had not filed a single law suit re discrimination. NOTION: Councilman Norton moved, seconded by beahrs, that the City Attorpey be authorized and instructed to prepare an ordinance repealing the section of the chapter of the Municipal Code dealing with landlord licensing requirements, and that he recommend a procedure for the refunding of the $24,001) in fees collected from landlords to date under the heretofore invalid ordinance. Councilman Comstock responded that he did not think that anyone who voted for the apartment licensing ordinance felt that the passing of the ordinance, in and of itself, would create any changes. The intention was that the city would mount, along with the passage of the ordinance, an educational and follow-up program to see that the terms of the ordinance were complied with. Councilman Comstock agreed that it was a burden to the apartment house owner and to the person who rents a eingle family dwelling to keep records and do the other things which the ordinance requires, and he was sure that they did view it as something offensive. On the other hand, the practices that have occurred to prospective tenants are vastly more offensive. When Councilman Comstock supported the ordinance, it had been his hope that there would be some degree of consistency as to the environment in which people who rent property would operate. andicapped people had related to Council some of the difficulties they had encouete.eed in trying to receive fair consideration from landlords in dealing with their problems, for instance. There really was quite a number of people who would be helped by this ordinance, and Councilman Comstock thought the ordinance would be effective if allowed to operate. He also thought the ordinance would be esauleted in other comities, end the overall effect would be positive. Councilman Comstock stated his disagreetsent with the motion. Councilman Beahrs commented that if the ordinance is at all worthwhile, there is nothing to prevent it from being used as an amendment to the Rumford Act. He added that the State had a lot of money, and the Legislature needed to reorder its priorities. 6 1 7 11/11/74 Councilman Clay stated that discrimination in housing existed in Palo Alto, especially in the rental area. A victim of discrimination is impatient about having the clatter handled as quickly as possible. As a member of a group which has been discriminated against over a long period of time, Councilman Clay said he was certainly impatient about resolving discrimination problems in housing or in any other area. He stated that he tended to look at the ordinance the way he did at the Affirmative Action programs. Palo Alto has a very good Affirmative Action program as far as the wording is concerned; but Affirmative Action programs, as a whole, are really not worth the paper they are written on. Councilman Clay thought that the ordinance which Councilman Norton proposed be repealed bore a strong resemblance to the character of the Affirmative Action programs which he had seen, and the indirectness of the approach left him with a rather empty feeling with regard to the results that might be attained. Councilman Clay really felt there must be some more direct way of dealing with the problem than the ordinance would provide. He noted that since the early 196U's, the landlords have become more sophisticated in their discriminatory approaches; but at the same time, there has been a decline on the part of minorities to integrate. Councilman Clay stated that his group had enough pride and determination to keep them from being satisfied with anything less than a direct approach to solving national discrimination problems. If Council repealed the ordinance, then Councilman Clay recourended that the city cackle the problem from the prosecuting standpoint. He stated support for the repeal of the ordinance. Mayor Sher stated that it seemed to him there were two questions involved. One of these was whether there was discrimination in Palo Alto; and the second one was -if so, would the approach the ordinance took solve the problem. There was no doubt at all that there was discrimination in Palo Alto. Mayor Sher was not certain in 1973 that the ordinance would deal effectively with the problem; but it was clear that the available remedies were not being successful. Therefore, he favored the ordinance on a trial basis. Mayor Sher aaid he would be against the repeal of the ordinance until it has an opportunity to show its worth or lack of worth. The issue that was decided by the trial court judge was that the matter had been pre-empted by a state law that was aimed at the prevention of discrimina- tion; but the state agency that deals with the matter supports the city's position that there was no pre-emption. Mayor Sher pointed out that the direct approach of legal aid was clearly not workieg. There were plenty of attorneys who were willing to volunteer their time to cases of discrireieation, but the victims of discrimination were not taking advantage of such opportunities; and the authorization given to the City Attorney to participate in such cases never cater to anYehing, because no one came to him for assistance. Mayor Sher etated that the whole pre-emption issue was an important one for municipalities. Until the outcome of the law suit was determined, Mayor Sher felt the ordinance ►should be left on the books. Councilwoman Pearson felt there was quite a difference between the Mamaage Parlor Ordinance and the Apartment Licensing Ordinance. It vas not quite as socially unacceptable to discriminate as it is to visit uassage parlors for activities other than massages. Also, Councilwoman Pearson was realistic enough to know that any ordinance that would require the names and addresses of patrons of massage parlors, and also of the masseuse or masseur,, and the time of the activity, would never pass any Council especially one that was almost totally composed of men. Here again, you are entering another field of discrimination; because under the present laws, only the women involved are prosecuted. Councilwoman Pearson a'fded that the possibility of arrest and the printing of the names cif the patrons would be totally unacceptable to any of her colleagues. In her opinion, there was no comparison at all. 618 11/11/74 Vice Mayor Henderson opposed the motion to repeal the licensing program in the strongest possible manner. He stated that all types of discrimination should be fought with all the tools available. There was nothing at all that he could do about the State Legislature. In Vice Mayor Henderson's opinion, the most effective, direct way to eliminate discrimination is in this very type of municipal legislation. The motion failed on the following vote: AYES: Beahrs, Clay, Norton NOES: Comstock, Henderson, Pearson, B.osenbaur, Sher Adiourx nt, MOTION: Councilwoman Pearson moved that the meeting be adjourned to 7:30 p.m. November 18, 1974, and that a special meeting of the Council be set for Wednesday, November 20th, at 7:30 p.m. in Executive Session - to discuss personnel tatters. The motion passed on the following vote: AYES: Clay, Comstock, Henderson, Norton, Pearson, Rosenbaum, Sher NOES: Beahrs The meeting adjourned at 12:40 a.m. ATTEST: APPROVE: t City Clerk 6 1 9 11/11/74