$1 Million in RDA Money

In my opinion, the Council made two great investments two weeks ago for our tax base and jobs. The Council provided $500,000 of Redevelopment Agency (RDA) funds each to Sunpower and Maxim, totaling a one million dollar investment for economic development. These two companies compete globally, therefore they could have chosen any other location in the world. 

Maxim, a billion-dollar semiconductor company, will consolidate its offices and relocate its corporate headquarters from Sunnyvale to North San Jose.  Maxim has design facilities all over the the USA and the world.

Sunpower will double its headcount to a payroll of approximately $75 million in San Jose instead of Texas. Texas offered Sunpower $4 million.  Sunpower could have also expanded its Malaysia facility and been exempt from taxes.

We can’t ignore that we are competing at a global level and the fact that San Jose was able to have these two companies call us home after the Great Recession is an accolade. Although I do believe RDA has lost its focus from time to time, this kind of economic development is right on target.

The County of Santa Clara is upset with these two investments, issuing a letter to the City of San Jose citing Sunpower and Maxim specifically. This is the same government agency that says time and time again that they want job growth in the County; especially green jobs. The saying “action speaks louder than words” comes to my mind here. The County will benefit from these investments as the majority of Sunpower and Maxim’s employees will have homes in the county paying property tax and sales tax, of which the County government gets a significant portion.

In contrast, the Council funded the construction costs for an existing charter school in East San Jose with $950,000 of RDA money.  So, is one million better spent for economic development or a school? Neither economic development nor schools are in the City Charter. Do they provide the same measurable return on investment?

RDA did fund the extensive remodel of the existing Horace Mann elementary in our downtown 10 years ago when there was more cash on hand. Horace Mann was an eyesore and is now a very attractive school. Part of the thought process was for downtown to have a good public school for young families. I think the Horace Mann PTA would agree it has benefited the school community. On the other hand, the money spent did not generate any new ongoing jobs or revenue for the City.

Council could have directed the million dollars to fund more affordable housing, since that is funded by RDA, or another million on top of the $73 million RDA has spent on the Strong Neighborhood Initiative, which benefits a fraction of San Jose.

Finally, important to note is that long ago RDA funded a bridge and light rail station in North San Jose next to then-small company that relocated from the Peninsula. That small company was Cisco and is now the largest private employer in San Jose.

83 Comments

  1. RDA has had some good economic development projects like those you mentioned.

    It has also spent many millions on political paybacks projects that wasted property taxes because project::

    1) had little or no return on investment of new taxes or good jobs that attracted city employment that requires new government support ( low income housing, city / county / state tax subsided services ) resulting in public tax loss

    2)cleaned up blight, public health and safety but but spent many more millions taxes than needed for political purposes making return on investment negative or 50-100 years to pay back investment ( Story and King Shopping Center, San Pedro Marketplace, many downtown projects )

    3) built public facilities that produced little taxes or few good jobs then leased facilities at zero or very low rents with many requiring millions in general fund or other tax subsidies and bailouts ( Mexican Heritage, Hayes Mansion, downtown theaters and museums, sports teams facilities )

    4) There has NEVER BEEN a complete audit or public accounting by an impartial auditor that lists all RDA spending showing
    a) RDA taxes spent
    b) actual new taxes generated that go to city or RDA ,
    c) actual new jobs at low requiring additional tax subsidies, middle income and high income levels in San Jose not going outside of San Jose
    d) any additional public benefits

    A few good RDA projects are shown like those you cite to justify RDA existence while many RDA projects that wasted taxes are never discussed or after completion audited since taxes did not produce new taxes or jobs as promised to public or Council while benefited or enriching political cronies, special intesests or insiders political paybacks

    Until San Jose taxpayers get a complete unbiased accounting that audits all RDA taxes spent it will be very , very difficult for public to believe any RDA, city ot Council claims that RDA has overall benefited to San Jose since the public has seen many millions of our taxes wasted or diverted to private use or political payback purposes with highly questionable over inflated benefits that were never audited after project completion

      • PLO how many companies or workers will be moving to San Jose in the future with you and Reed destorying San Jose with your pipe dream socialism?  At this rate San Jose will be the Detroit of the west.  No matter how much money you throw at companies the community will not prosper without good schools, safe neighborhoods and honest politicians.  What’s in your closet Mr Oliverio?  Trust me when I say that we are looking.

  2. I still hope Governor Brown, closes that little bank of yours called the “RDA” and puts that money into the General Fund. Where it is needed the most.
    It seems nice that you try and justify the expenditure of these funds in some sort of feel good way.
    The simple fact is, the entire council, including you, is missing the big picture. Spending money on “likes” vs. “needs” is not the answer right now.

  3. There is no doubt that the redevelopment agencies does good things for San Jose.  The question is one of priorities at times of limited budgets.  Should we continue to shorten the school year and cut services for students?  Redevelopment money helps us compete globally, but only if we have an educated workforce that allows us to do so.

    Also, much of redevelopment’s spending does nothing for California as a whole, only supporting businesses to locate in one city at the expense of another.  It is great that Brocade built their HQ in North San Jose, lured by $1 million+ RDA money, but they weren’t choosing between San Jose and China.  They were choosing between San Jose and Sunnyvale or Santa Clara.  Net 0 jobs for California.  At the same time as that HQ was going up, K-3 class sizes in many of Santa Clara County’s school districts went from 20 to 30.

    • Brocade products generate sales tax. I would like that point of sale to be San Jose.

      I would be happy to support the relocation of related companies to San Jose, whether it be Juniper Networks of Sunnyvale or Network Appliance of Mountain View.

      • Yes, that’s great for San Jose, and I support it.  But like I said, it is a question of California priorities.  California set up redevelopmnent agencies, but they don’t have much effect on overall revenue and employment for the state.  Can you justify bringing more tax dollars to San Jose from Sunnyvale while local schools go bankrupt?

    • I know what it is, the ugly rich geek kid in High School who threw money around in order to buy friends.  Somehow it just seems wrong to pay businesses to locate in San Jose. Either we are a desirable place to do business or we are not.  And, just like the desperate teenager, when the money stops, the friends go elsewhere…

      • California is one of the least business friendly states in the U.S. It’s a crying shame that Intel, one of our flagship employers, is spending billions on fabs located outside of California. It is comical that the California State Automobile Association’s call center is located outside the state, and the people answering the phone have no idea where Lake Tahoe is.

        It is imperative to the well being of our state, and for the employment of our citizens, that this situation be rectified.

        Businesses mean jobs, and jobs are exactly what our ailing economy needs.

  4. Building a tax base to help pay for city services is a good use of RDA money. Wishful thinking that taxes will always cover the bill is not good. More economic development and less low income housing.

  5. Part time city council members without bloated staffs could have made the same decisions. It is time for part time city council members to serve San Jose.

  6. Pierluigi,

    The RDA spending funds to sway high-cap companies like Sunpower and Maxim to our jurisdiction is imperative. Although, I question the justification of spending RDA funds to support affordable housing in today’s economy and state as being absurd. Downtown San Jose high-rises are not selling and they are plenty of affordable houses for sale on today’s market (due to the current state of housing market property values).

    A little information about myself:
    I am a City of San Jose employee and will most likely be laid off this summer. I will default on my mortgage within two months following my lay off. I live in a small and old condominium type residence in downtown San Jose and bring in an entry-level salary. 

    I believe our city should be making RDA investments that ensure instant capital return. Governor Brown’s proposal so shift the RDA funds would certainly assist in keeping my job, but I understand we must still be competitive in attracting business. Let us continue with proper RDA investments in business, but shift housing development funds to our general fund…. Your feeling? 

    Marshall Timmons

    San Jose resident (35 years)

  7. Maxim?

    Isn’t that the magazine with scantily clad women?  This is the first time I agree with spending tax and/or RDA money. 

    There can never be enough scantily clad women.  If that ever stops then the terrorists have won.

    • > Maxim?

      > Isn’t that the magazine with scantily clad women?  This is the first time I agree with spending tax and/or RDA money. 

      OOOOPS! 

      I was monitoring the other Maxim.

      I’ll get back on the case. 

      In the spirit of selfless volunteerism, of course.

  8. Nice try Pier. You cant put lipstick on that pig you call the RDA and call it a sucess! We the people in San Jose know better and is still looking forward to governor Brown turning that pig into bacon we all can eat, not just your political cronnie friends like Tom Mckennry and Lew Wolfe.

  9. Perhaps, just perhaps, if the RDA paid the County the $43 million it owes them, your actions will speak louder than words.

    • Mona, I couldn’t agree more. You know that’s $20 mil per year and at the end of this year (June 30) it will be another $20 mil?!?!! if they don’t think they owe it why do they keep acknowleding their obligation (see the CAFR referenced by pier above).

      The CAFR covers that funds are properly accounted for but says nothing about the program execution that has been messed up since 2005.

  10. I’ve always known my taxes go to silly things like golf courses, Hayes Mansion, Mexican Heritage Plaza, the McEnry family, etc.

    But now I have to give money to the shareholders of Maxim and Sunpower?

    Is this a joke?  Am I on some internet candid camera show?

  11. P.O.,

    This is laughable. OK, so some expenditures are arguably more strategic than others. Of course this is true. And occasionally a junkie buys food. Both are true. This cash cow needs to come home to the General Fund barn. When you are laying off firefighters, soon police officers, yet wooing Nippon exces in Japan, something is VERY WRONG. Most here recognize this, I think it’s time for you to wake up Pier and smell the coffee…

      • I think the point is that making a relatively small handful of strategically sound business decisions is hardly justification for maintaining and funding the RDA. The question really is about priorities, and, if San Jose can’t afford to fund the bare essentials – like maintaining public safety staffing at levels approaching national averages and for compensation levels that are similar to other agencies in the area, then the RDA is a luxury San Jose can’t afford.

        Take a look at the budget. You will see line after line of expenditures on things like consultants, training and income redistribution – I mean ‘affordable housing’, etc. These are all luxuries which should be axed from the budget long before even one firefighter, police officer, librarian or janitor gets laid off. As well, whatever municipal infrastructure has arisen in support of all those non-essential services can be re-assigned to support essential services or, at worst, laid off.

        The city needs to make a solid commitment to providing core services with available funds: nothing more and nothing less.

        • I agree with you.  I commented on the mess RDA has inflicted over the last 5 years, but IMHO, the lo-mod housing program that is a legal requirement RDAs must abide by, has been the only good thing to come out of the abyss.  It was the housing department that bailed out the RDA with guaranteeing financing so the RDA could pay the last state take of $74 million, otherwise this city’s RDA would have gone dark last year. Who blessed that deal? Pier and friends. It’s scary RDA may not be around to pay the city’s housing department back. I hope that doesn’t impact the GF.

      • @ Police Union has lots of time:

        Apparently you have time as well, LOL. It is the honest endeavor and duty of the people, us, to keep these politicians honest Mr. Einstein. Have you had so much KoolAid that you no longer understand this. RDA is a crystal clear example. The economics are simple. The abuse is too when one LISTENS what Reed and Co SAY and then watch WHAT they DO. Try it occasionally.

      • @ Police Union has lots of time and other Law Enforcement Dectractors. I am continually astonished and appalled by the attitudes on display by those critics of law enforcement who post on SJI. Taken as an aggregate, the only way that a cop or cops as a whole could make you people happy is if cops were uniltaterally San Jose residents, silent, uninvolved, quasi-citizens who, in 15 minutes miraculously fix problems which took decades for individuals to develop, who never, ever used force on anyone who wasn’t caucasian, and was a mindless social janitor who understood that years of experience, expertise, knowledge and work ethic were disposable commodities with a market value predicated solely on convenience and class envy.

        Seriously, do you actually think about the merit of the opinion you are about to pen or is adopting an opposite position from any cop simply as reflexive as breathing? You want cops to live in San Jose, but shut up about San Jose’s politics and practices. You want cops to practice community policing, but as a second-class member of the community from the outside looking in. You want cops to deal with dangerous people – the sorts who scare the shit out of you and your families – but not hurt any of them. You can’t be bothered to be concerned about the hundreds of injuries cops sustain annually and you’re equally quick to dismiss the merit of disability retirements by cops working for a department that’s been chronically understaffed for decades. And, for all your vaunted support for merit-based job retention, you are just as quick to fall back on the 21st century eqivalent of affirmative action hiring when it comes to your police chief. (Yeah, I’m talking to you Rev. Moore and Raj.)

        If you are really that serious about having mindless subservient powerless drones, hire a private security company to ‘police’ your city. Otherwise, stop and consider the actual needs of the city instead of resting on your reflexively oppositional position.

  12. PLO,
    The Great Recession?
      Those are my dollars.PLO, You are way over your head in Cr*p.Your tranparency become you! You’re the kid that nobody liked, cause you were always polishing apples for the teacher.
      Dorky

  13. Only because our City has spent billions to create this 3rd world shantytown do we now have to bribe companies to locate here.
    Sunpower & Maxim. By definition a couple of corporate freeloaders, unable to compete fairly in the free market, only able to exist due to the rigging of the game by various levels of government. Welcome to San Jose where all brands of deadbeats are invited to set up shop.

  14. We all know that Yes on V&W was near and dear to Reed.  (Oliverio too as we’ve seen with the signs).  So who better to help out with campaign contributions than people who will benefit the most from RDA funds (Hand outs for affordable housing).  In the likes of: California Apartment Association, Core General Contractors, Greenwaste Recovery, South Bay Development Co., Hunter Storm LLC, Guinn Construction, South Bay Construction, Webcore, Arcadia Development, Trumark Companies, Bradenburg Staedler and Moore (Real Estate Investors), Shapell Homes.  And lets not forget about SUNPOWER who contributed $5000.00 to his cause. 

    You don’t even need to read between the lines.  It’s smacking us right in the face. 

    Oh let’s hope this $500,000 is better spent then the $500,000 spent on the latin supermarket that closed up shop after taking the money. Right under the nose of city hall (pun intended).

  15. Ok, so RDA funds are spent and these companies are here but what about the services they require now that they have set up shop?.  So let’s say Sunpower in Edenvale, one of your workers has a medical emergency or car catches on fire in the employee parking lot or employee gets assaulted leaving for work…. Call for San Jose Fire or Police for help….Well the Fire Station in Edenvale area was closed or will be closing and SJPD has no officers to respond because the City laid off 200 officers.  What about the streets and traffic around Sun Power buildings? Who pays to maintain?  Yes, all these services cost money and that money comes from the General Fund.  RDA spends huge money to get these companies here or buildings built. Then the rest of the City Services must service them with no financial help from RDA funds.  It’s like someone, for free, digging you a nice swimming pool for your backyard but now it’s up to you to pay for the water to fill the pool and maintain it.
      All city services are stretched so thin or non existent yet RDA keeps adding more to the work load of basic core services with out contributing to the General Fund. The rest of the city suffers and just how much are theses RDA compainies really bringing in?
    I just don’t get it????

    • In one sense, you are correct, but, in another, your frustrations are misguided. The reality is that businesses generate far more usable tax revenue than residential developments. Part of the reason San Jose’s budget is so upside down with its budget is that, at the same time as businesses have been leaving San Jose and relocating to more business-friendly states (or nations) the city council has been approving thousands of new homes.(I believe the general plan has 20000 housing units approved.)

      Despite my overall low opinion of PLO and the rest of the city council, I will give him his due: he and a couple others on the city council have fairly consistently voted against rezoning of commercial real estate to residential. This minority on the city council apparently understands that attracting business to San Jose should be THE PRIORITY. Unfortunately, they have been consistently outvoted by their peers.

      Now, ask yourself this question: if it is generally understood that taxes generated from businesses are generally what keep a municipal budget in the black, why is it that the majority of the city council keeps voting in favor or zoning conversions that are JUST NOT NEEDED. How many condos remain vacant in the residential high-rises downtown? Hundereds? Thousands? What does this surplus do to property values and associated tax revenues?

      Finally, I ask you to start doing the research and follow the money – that goes from various builders to the city council. How does the SBLC play a role in all this? And, what influence, if any, does Debra Figone’s connections to de Mattei Construction exert on these rezoning decisions. Are the leaders of San Jose really as hypocritical or inept as their decisions would lead the outside observer to conclude, or is San Jose’s political structure shot through with corruption?

    • These companies and the jobs that come with them require less services than housing. Sales tax generated from Sunpower products provides tax revenue to fund salaries. A portion of the eventual $75 million in payroll will be spent in San Jose which again generates sales tax to fund salaries. I would suggest we have income producing uses of land or at least revenue neutral.

  16. RDA money has been used mostly as legal corruption ” paybacks for election money and volunteers ” by elected politicians to campaign contributors, corporations, city contractors, housing developers, unneeded public building construction, political friends and community groups that provided volunteers for elections

    20% required RDA money for low income housing draws

    1) low income workers to San Jose from other cities 2) requires more city services
    2) increases voters wanting more entitlements, city tax redistribution and political support for non essential city spending like Mexican Heritage Plaza, downtown free events, community group tax subsidies and bailouts etc

    that drain general fund and create budget deficits

    3) created hidden but legal politically corrupt system of pay to play elections, unnecsesary and wasteful tax spending that does not benefit residents or taxpayers but city / RDA spending that benefits special interests and enriches wealthy political insiders

  17. I agree with John Galt. A half-century ago this valley lured corporate players big and small with two things our elected leaders have spent those fifty years decreasing: available technical talent and the quality of life here. Frederick Terman and William Shockley, both of Stanford, planted the seeds of a new industry and with remarkable speed the Valley of the Heart’s Delight morphed into Silicon Valley, filling our cities with transplants from every corner of the country—young people blessed with technical aptitude and inventive passion.

    Not to be upstaged, our elected morons (think Blanca Alvarado and every mayor except TM) have shown equal skill in poisoning that very environment.

    Exactly how much high-tech aptitude do you imagine has snuck over our southern border these last thirty years? Exactly how much better are our neighborhoods and schools? Our community college system, once a treasured stepping stone to high-tech for the bright but underprivileged, is today a bastion of multiculturalism—in its management and curriculum, turning out graduates with grade school skills and itself facing a big fat “F” on its report card, to wit, the loss of accreditation.

    Incredible weather; desirable neighborhoods; proximity to beaches, mountains, a gorgeous bay, and a world class city; a smart, educated workforce: the makings of an unbeatable draw for the corporate world that could only be ruined by politicians taking positions that serve their needs, not ours. Small wonder San Jose must now open its checkbook to attract the companies that in decades past took on debt simply for the chance to land here. I guess corporate America just doesn’t appreciate our Mexican Heritage Plaza, cherish the chance to rub elbow with Norteños and Sureños, or share the religious conviction, taught in local schools, that when it comes to technological promise, IQ doesn’t matter.

    • > Incredible weather; desirable neighborhoods; proximity to beaches, mountains, a gorgeous bay, and a world class city; a smart, educated workforce: the makings of an unbeatable draw for the corporate world that could only be ruined by politicians taking positions that serve their needs, not ours.

      Wait!  You forgot the plastic bag ban!

      Doesn’t the plastic bag ban attract businesses?

    • Welcome to Global Competition.
      We used to be able sit on our laurels decades ago but that is no longer the case.
      There are people in other countries that are driven to succeed and compete for many of the same jobs.  It is no longer manufacturing but front end design as well.  No matter how tough it is in certain parts of the Bay Area many would argue that there is more opportunity to get a good education in the USA than in the developing world.

      • PLO, this isn’t about resting on our laurels. This is absolutley 100% about whether or not San Jose is a desirable place in which to do business. Or California. Or the US. The U.S. has the 2nd highest corporate tax rate in the nation. After Japan drops its corporate tax rate by 15% as was recently announced, the U.S. will have the unenviable status of having the HIGHEST corporate tax rate in the world. California his the 10th highest adjusted corporate tax rate according to one article I read. And San Jose? Well, I’ve got to stop. My stomach is turning.

        If it were only an issue of laurels, we’d be #1. So much innovation and industry happens here. I suspect more would want to be here. Unfortunately, at every level of government, we are doing our damnedest to drive industry away.

        • I hate to break it you but no multi-national in the US pays taxes at the stated rate. HP for example, pays closer to 6 percent… The same is true of Cisco and etc…

          A lot has been made about the business unfriendly nature of CA… Well Texas, the supposedly most business friendly state, is facing a fiscal crisis that rivals California’s (actually it surpasses CA if you look at the longterm instability issue).

          We are in this mess, locally, statewide, and nationally, because large business interest (i.e. multi-nationals and super wealthy who head them) have slowly eroded the protections that middle class Americans relied on. America’s demise can be seen all along the rustbelt. As manufacturing jobs fled our shores, so did the lifeblood of our nation.

        • > Well Texas, the supposedly most business friendly state, is facing a fiscal crisis that rivals California’s (actually it surpasses CA if you look at the longterm instability issue).

          Texas’ “fiscal crisis that rivals California’s” is news to a lot of people.

          Could you provide some corroborating testimony to put to rest the suspicion that you might just be making this up.

  18. City Council / RDA Board definitions for City / RDA administration

    “illegal use of RDA funds.” is anything Council / RDA Board doesn’t want to spend their RDA political payback taxes on “

    “legal use of RDA funds ” is anything in a redevelopment area that Council / RDA Board want to spend their RDA political payback taxes on “

    What happens if Council / RDA Board needs millions taxes for a political payback spending project in a non redevelopment area but does not have taxes available in capital, operating or general fund ? 

    Really easy to legally spend the required millions as RDA taxes in redevelopment area instead of capital, operating or general fund taxes thus legally transferring the required millions of RDA taxes to non redevelopment area to be spent as Council / RDA Board wants for political payback purposes

    Effectively with legal spending transfers there is always millions in RDA taxes available to spend anywhere Council / RDA Board wants for political payback spending projects anywhere in city / RDA areas

    Millions in RDA or city taxes can easily and legally be transferred and spent outside San Jose by city / RDA paying for political projects in another city / county area especially where Council / RDA Board is on that agency’s Board ( VTA, CalTrain, MTC, etc ) or works closely with agency ( BART etc ) where deal would be done freeing up that agencies taxes for desired San Jose Council /RDA Board desired political payback spending outside city / RDA areas

  19. A million dollars in corporate welfare is the example of a good RDA project?

    It’s well past time to get rid of RDAs entirely.  The money should go back where it came from: schools and health care.

    • Um, actually, the money comes from taxpayers…schools and health care are getting what they got before the RDA dollars were spent. We can argue at length about the wisdom of the spending, but lacking the spending, the tax base would not improve.

      • “lacking the spending, the tax base would not improve”????

        Nope.  If the tax base growth were solely due to RDA spending, then neighborhoods with no RDA money would still have homes at 1979 prices.  (By your argument, they lack the spending, so their tax base must not have improved.)

        This is clearly not the case.

    • I agree 100%.

      Scare tax dollars need to be spent on core functions. The argument that RDA investment is a catalyst for job creation is weak. The RDA has become so embedded in San Jose development culture that its leaders and Board have absolutely no objectivity relative to taxpayer value. Isolated examples of RDA investment successes do not necessarily justify their existence. One must look at the comprehensive result of all RDA activities and then examine their value in light of the big picture including the State budget.

      City Council members and the Mayor are doing a lot of cheerleading for the RDA lately. I think this is a disconnect from taxpaying SJ citizens.

  20. PierLuigi, its nice that the RDA spent a whopping $1million to encourage business to settle in San Jose, but to put it in perspective how much did the RDA spend last year on HOUSING/(high-density)HOUSING/(low-income/affordable)HOUSING all of impacts a strained infrastructure and service package? What is the ratio of business to housing dollars spent? 

    $1million? The RDA paid $12x that to the City General Fund for salaries and rent. Many concerned taxpayers and city employees have suggested that RDA money be transfered to the General Fund to ease the deficit / pay salaries and benefits to minimize layoffs/demotions – that suggestion according to the Mayor and City MAnager is DOA as it would be an “illegal use of RDA funds.”

    • Most RDAs are required, by state law, to spend 20% of their money on subsidized housing.

      I don’t believe this strategy does anything much to help people- it mostly just takes a house away from Peter and gives it to Paul.  But the fault lies with the state, not the RDA.

      (Don’t interpret this to be support for RDAs.  I think Brown is right to get rid of them.)

    • This is actually a really great question because it has a bearing on other poor decisions made by the city council: that of approving additional housing while simultaneously decreasing the public safety work force. At what point will they stop slapping public safety in the face by laying off employees, seeking wage/benefit reductions and increasing the work load. And, all the while, they tacitly acknowledge that taxes generated from housing don’t actually support the services required by the occupants of that housing. The hypocrisy and ineptitude is stunning.

      • New market rate housing does a pretty good job of paying for itself.  The new homeowners pay 5 to 10 thousand dollars each in property tax.  That’s on top of the 50K or so in fees the builder pays for parks and permits.

        It is true that residential as a whole doesn’t pay for itself, but that is a story of older homes whose taxes are comparatively small.

        • Not according to PLO’s own blog from a week or so ago. Regardless, doing a ‘pretty good job’ of paying for itself isn’t the same as being completely in the black. Also, don’t make the mistake of assuming that the bulk of the property taxes actually come back to the city. Those are county taxes, of which the city gets a fraction. Lastly, the fees are one-time income, not ongoing revenue generation as taxes from business income would be. Finally, however much the builder might contribute toward construction of a park, it doesn’t pay for the public safety presence required to keep the neighborhood safe or for the municipal staff necessary to maintain the park.

          I’ve said it before and I’ll say it again. The last thing San Jose needs is even one more residential construction project. Every ounce of energy, effort and imagination ought to be directed toward enticing businesses to come to San Jose and not on projects whose net effect will be to put San Jose’s economy in further dire straights.

        • I’d look at Cindy Chavez, SBLC, connections to various major building contractors. Does the name Debra de Mattei Figone mean anything to you? I think the simple answer is that our local political process is as shot through with corruption and political prostitution as the State is.

  21. I think RDAs, throughout California, started to game the system to the point where the original intent was becoming lost.  San José probably was the worse example, but not the only one.

    I still believe the original idea has much merit, but maybe a ‘restart’ is appropriate.  If we do away with RDA as we know it, perhaps a RDA 2.0 can be created to give it a second chance.  Simply stated, any increase in tax revenue in a narrowly defined blighted area should go to improve that narrowly defined area.  Isn’t that a great idea?  Too bad it was mis-used.

    It also reminds me of the golden rule of any being or agency.  Of course that rule, like all living things, is self preservation.  It will not go quietly in the night.  It has to be killed by an outside force or starved to death.    Ok, a little too cute I admit.

    • Hi, Norm.

      ANY tax increase goes to the RDA?

      Why?  If you tear out 10 small homes and replace them with 300 condos, you get an increase in tax revenues.  However, it was the rezoning, not the RDA, which caused the increased tax base. 

      What’s more, with that rezoning, you also get an increase in need for services.  Normally, the new residents pay taxes to pay for the added services.  That won’t happen if you give all the new tax money to the RDA and Sunpower.

      • Hi, Greg.

        That isn’t a good example of using RDA funds to me so I have no arguments with what you are saying. 

        Using RDA money for housing isn’t really a great idea.  I’m sure there are some exceptions but clearly housing, even condos, rarely pay for services.  So in effect you are getting double whopped.  The housing basically will require services that they are not paying for.

        However, RDA money for infrastructure projects, libraries, roads, even community centers or parking structures makes sense.  Anything that can help generate or attract taxable activities or increase surrounding property values.  The goal is not to only improve property values within the RDA, a main goal is also to improve surrounding property values as well.

        Most RDA areas in the state are pretty small.  They were mean to truly clean up a real blighted areas that drag down the rest of the community.  Sense the first and larger ones abused system, the law was dramatically changed in 1997 making it much more focused.  Most RDAs today could not qualify under the new law. 

        As for the Sun deal.  It really depends on the terms of the agreement.  I doubt, hope?, that the dollars just didn’t go into their P&L statement, but is tied to developing their campus, improving roads, etc and has some other restrictions.  If so, then it would probably would be OK.  If they leave, those improvements stay.    If on the other hand we simply gave them a check, well not so good.  At least for RDA funds.

        • Norm,

          Thanks for commenting.
          RDA typically funds manufacturing or test equipment at the facility so it is tied to the building. Market rate housing at 100 units to the acre is when we actually get more in tax revenue than expenditures.
          One issue on RDA funding new facilities like community centers or parks is that it then requires staff/general fund dollars to maintain those new facilities.

  22. Pierluiegi Oliverio,
      How do you equate giving 1 million of our dollars to Maxin, a Billion Dollar company and justify it as a good investment. I sence an incredible arrogance in your style.  I have spent my life fighting for our children and our village people, trying to balance a community that will produce the children of the future.
      In the future you will hear the words of those that have nothing left to lose.
    I recall when Joe Hernandez the guy that made the 20 % happen for low income housing,from RDA got whacked in Blanca’s office. The RDA has always been a place with out boundries.
      There is much to be told and much to be said about the past and the arrogance of our politics.
      Quite frankly I have very little liking for you. You are in a world of your own. Get out there and nurture the children that have been systematicly ignored of their very high blood lead levels in the Barrios of Sal Si Puedes. The MHC has been a complete failure for our community. I have documented every aspect of the process since it’s inception, pre 1990.
      We have failed our children . The politics is so discusting. The EPA, the class action suits, will live beyond your years as a politicion.
      We are left to wonder why there is so much anxiety, where those with less have to suffer more of the same, while you and your group continue to force thing upon us that matter little to our children and the hope of our vilage.
      When as a boy I would fold my Merc Papers at the corner of Santa Clara and Market St, now the Chamber of Commerce, and Tony Ridder was a copy boy inside, I felt a sence of community.
    Now there is no sence of anything of the golden days of our village. the police state that took control these past years has driven folks like me to other hospitable locations else where. 20 plus years ago I watched as the RDA transformed our down town into a night club venue.
      There is much to be done in the absence of real dollars to find our way back. Perhaps Mr Brown will prevail in getting us back to what is the reality of our Village. I ask that you call me if you have any questions of me. I have so many answers that went unasked all of these years.
      I took my son to a Sharks Game once. We watched as two opposing player beat each other sensless as the refs watched. We walked out and never went back. He was an assult victim at 15. These guys are gang bangers on ice.
      The Village Black Smith

    • Good to hear from you VBS.
      Schools are not in the City Charter. That responsibility is with our (too) many local school districts and the State.  67% percent of your property tax bill goes to K-14.

      In my view the strength of a city is measured by tax revenue and much of that comes from business and jobs. I cannot fund anything without tax revenue. There will always be a larger list of wants than money to pay for it.  My colleagues Councilmember Chu and Councilmember Kalra wrote in the Mercury News yesterday about the success of economic development in San Jose because of RDA.

      No fighting allowed in Olympic hockey, 2014 Russia. I folded my Merc Papers at a church that was converted to housing.

    • >  I took my son to a Sharks Game once. We watched as two opposing player beat each other sensless as the refs watched. We walked out and never went back. He was an assult victim at 15. These guys are gang bangers on ice.

      I think professional hockey players wearing helmets and pads, slugging each other with mittens for twenty seconds are far safer than pedestrians walking down Story Road, in the midst of many of San Jose’s 40,000 REAL gang bangers.

  23. It seems like all the planning decisions are driven by a desire to maximize tax revenue for the City. Is that really the purpose of city government? To get itself more money? Does that magically translate to a nicer, cleaner San Jose with a good quality of life? Not so much, judging by what I see when I open my eyes and look around.
    In the sacred name of ‘Jobs’, we bribe high tech companies to do business here. Then, in order to fill those jobs we bring people in from India and from China. Not that I have anything against Indians and Chinese, but how does cramming hundreds of thousands of mercenary workers into this valley actually make San Jose a better place for those who call San Jose their home?
    Quit paying individuals and companies to live here. We’ll wind up with a higher quality, more well rounded population.

  24. Pier, if RDA was tossed wouldn’t we have more tax dollars to spend in other areas?  I’ve sat in sessions and have heard that San Jose must match a certain percent of RDA funds from the state with it’s own funds to secure payment from the state.  That would not be required if RDA was gone would it?

  25. Bronco Bramma,PLO,
      Exactly what I expected from both of you. Both of you are lost in a world with out empathy.
    PLO Your dedication to purpose was demonstrated in the footage where you were busy taking sign to achieve a purpose.
      Put that dedication to help one child with High Blood Lead. THE OBIIOUS IS REPUGNANT.  I await your phone call for some questions that beg answers.  Your challenge is to make a difference. in our city.
      Bronco, get a life.

      The Village Black Smith

  26. > In the sacred name of ‘Jobs’, we bribe high tech companies to do business here. Then, in order to fill those jobs we bring people in from India and from China.

    You speak wisely, Galtus.

    I just read the news accounts of EPA Director Lisa Jackson’s Congressional testimony.

    Sayeth Senator Inhofe:  “Global warming is a hoax, and carbon dioxide is not a pollutant, and EPA regulations are foolish, unjustified, and harm the economy.”

    Sayeth Lisa Jackson: “Well, . . . um . . . uh . . . we’re creating jobs.”

  27. From Maxim’s website:
    “Maxim leverages its proprietary wafer fab technologies and world-class engineering team to develop innovative solutions for rapidly growing markets. Maxim reported revenue of $1,997,603,000 for fiscal 2010.Maxim has posted a profit every year since it went public in 1988.”

    So, while we lay off cops, firefighters throw their young comrades under the bus rather than take a small cut, and we have the worst roads in America, we give $500k to a company that has made a profit every year since 1988??????

    This just shows that SJ’s inferiority complex is alive and well.

    Want to lure companies here and keep them here?  Fire half the bureaucrats who make it so damn difficult to do business here.  A huge factor in the global competition equation is ease of doing business.  Despite Chuck’s protestations to the contrary, it is extremely difficult to do business in SJ.  There is no one stop shop to open a business or to build a building.

    This “global competition” mantra is the most recent way politicians explain away why they are not doing a good job attracting and retaining business.

    • JMO,

      500K in RDA dollars cannot be used on other items typically known as city services.  Selecting which companies to lure can be difficult as they may get bought or go out of business. Maxim has always had good gross margins and they have many customers. In the past Maxim has been on the buying side as they bought Dallas Semiconductor years back.  Again lots of people employed in San Jose is a good thing for San Jose.

      • PO,

        You never answer the questions regarding why San Jose makes businesses of all size so miserable to do business here.

        Do you support the way your staff treat businesses?

        Why?

        • The current Civil Service system that is based only on seniority is part of the issue.  Planning is a core focus of a city and should therefore receive more funding from the general fund instead of being mostly based on fees applicants pay.

        • Wow. Now that is a vague and largely uninformative answer which serves only to advance a change in city policy that you publicly advocate but the answer does absolutely nothing to inform the public as to why that’s your answer or to clarify why San Jose, innstitutionally, is so unfriendly to business.

          Would you like to back up your assertion with facts? Documented complaints? Explain how the current tax/fee structure in San Jose either invites or discourages new businesses? Can you do anything other than take another un-subtle jab at the municipal work force for which you’ve repeatedly demonstrated a general lack of respect?

        • “The current Civil Service system that is based only on seniority is part of the issue.”

          What a load of crap. Do you ever stop blaming city employees for every ill of the city? Look around at our neighboring cities, Pier. They all have the same seniority rules and business would rather flock to these cities than locatate in San Jose. This is not the fault of city employees, but arrogant politicians such as yourself that have shoved regulations down business’ throats such as a plastic bag ban and then wonder why a business would rather go to Santa Clara or Campbell.

          Ironically, all these surrounding cities have city councils and mayors that do not get paychecks or benefits. This is long overdue here in San Jose.

          Go work on medicinal marijuana retail stores that you are working so hard to encourage here in San Jose. We have all the surrounding cities beat in this green market.

      • PLO:

        Care to explain the 500K of tax dollars flushed down the toilet with Su Vianda Market, especially in light of the success of Mi Pueblo? Is it that we do not have enough markets to buy productos latino? I can’t wait to hear how weak the vetting was. That was the council playing Venture Capitol fund. Poorly played PLO, poorly played,…

        • LOL,…an even worse response than I anticipated. You will be accountable come your bid for re-election Sir. Kiss the monopoly money (RDA $ in case you’re wondering) buh bye.

          How in the world did you ever go from bartender to councilman? You should be selling used cars.

  28. PLO,
      Let’s see your responce to JMO.
    How about the rest of the City Council? Care to comment?
      Thanks John. You can be a pain in the ass sometimes, that’s what I like about you. Right PLO?  The Village Black Smith

  29. ” Market rate housing at 100 units to the acre is when we actually get more in tax revenue than expenditures.” 

    So where is that 100 unit to acre housing ? 

    Not even recently approved Ohlone VTA / Barry Swensen high rises on San Carlos apparently pays for city services since it is 8.25 acres for 680-800 attached residential units = 82-97 units per acre

    They will sit empty for years like most downtown high rises because little to nothing is near them to make them attractive to people – 8-10 blocks to Diridon, only fast food, a drugstore, used car lots and Safeway so they like rest of MidTown and San Jose other largely unoccupied transit orientated high rises (Tamien, downtown ) almost everyone drives to work, transit, shopping, entertainment etc

    Council still approves more budget busting empty for years high density transit oriented and low income housing while businesses move to other local cities

    A few on Council get it ( PO, Chuck ) more housing is budget disaster but when will rest of Council dummies wake up or are they so in political pockets of housing developers they will not until mismanaged San Jose declares bankruptcy ?

  30. PO said ” 500K in RDA dollars cannot be used on other items typically known as city services. ” 

    San Jose has for years used RDA dollars to pay for city services like code enforcement etc in RDA areas

    Many other cities ( SF, Oakland etc) have used redevelopment dollars to pay for police, park construction and maintenance, code enforcement,  fire stations and building inspections all in redevelopment areas which frees up the same amount of general fund or capital dollars to use in non RDA parts of city

    Sounds like a accounting shell game to me, moving taxpayers money around while confusing public

    Why can’t RDA pay for city services prevent or fix blight, health and safety in RDA areas like other cities ?

    • Great question, in fact, too good, hence the defeaning quiet from our illustrious councilman. Think about it though, do you ever get a straight answer from a street hustler? Answer, no,…and P.O. is an educated street hustler in a coat/tie.