Suspending Fees for Improvements

Last week, the City Council made a change to suspend two construction taxes for a limited time in an attempt to encourage commercial property owners to provide improvements for their existing buildings. The hope is that if owners can improve their buildings at a lower cost, they may find tenants—which is a win for them and for San Jose. 

Providing incentives to property owners to improve their property is one way the City can show that it is a partner in economic development. As we know, new tenants brings jobs and payroll spending to San Jose. Also, new office development like market rate housing—not affordable housing—pays fees and taxes that helps provide money for road paving. However, the current municipal code kept the construction taxes higher than they needed to be, and it appeared that the high tax may dissuade certain office development like research and development.

With this new policy, any loss of tax revenue for road paving would be taken from the economic development department. The Economic Development department thought this was so important that it was willing to give its own budget away to make it happen.

The other item the council discussed was exploring the traffic impact fees in the North San Jose development plan. There is concern that the fees may be a hindrance to locating a new expansive corporate headquarters. The approved Environmental Impact Report (EIR) for North San Jose was challenged in court, and as a result, the EIR requires that certain road improvements take place. Many of these traffic improvements would have been paid for by the Redevelopment Agency (RDA), but alas the Golden Goose appears dead. Unfortunately, that leaves really high traffic impact fees that increase new development costs in comparison to other cities.

The housing units for North San Jose are traffic mitigation for the EIR, because it is assumed a portion of those new residents will work in North San Jose and/or take shorter car trips versus someone who drives to North San Jose for work from South San Jose.

Cities often invest in infrastructure to induce economic development. For example, if San Jose listed certain infrastructure projects as a core priority, then we could possibly allocate funds and therefore increase jobs in San Jose. These infrastructure projects would have to compete against city departments for funding instead of hoping they will get built.

Or, and possibly better yet, instead of making market rate housing developers in North San Jose pay millions of dollars towards affordable housing projects, let’s instead take that money and allocate it to an earmark fund for the North San Jose traffic impact project. We can literally use this money to pave the way for news jobs in North San Jose.


  1. <The housing units for north San Jose are traffic mitigation for the EIR because it is assumed…>!!!

    Is this the same twisted logic that’s used to convince ourselves that all these high density housing eyesores near light rail stations mitigate traffic since the residents won’t even own cars and will choose light rail for all their journeys in and around our utopian village?

    You can spin your EIRs any way you want to get the desired result. You’re just fooling yourself.

    More Houses=More People=More Traffic. It’s as basic as F=ma.

  2. Council Member Oliverio,

    I hope you will join me in holding a FREE class at City Hall for small business owners in San Jose. Saturday, while helping to feed hundreds of hungry people a Christmas dinner, provided by Firehouse at the Gardner Center, at least 5 people who own small businesses, asked me if our Board would put said meeting together.

    My hope is that we can get City staff to teach them how to survive all these taxes, fees, and permits the City is sticking them with. I know there are small business loans, marketing strategies, and other ways to assist tem in surviving these tough times.

    Let me know if you’d be willing to help us plan and facilitate this much needed venture.

  3. Your Honor, I don’t know how or if they pass out “writing assignments / topics” at the “S.J. Insider” for you or your contemporaries to write about but, you should have steered clear of this one.
        “Suspending fees for improvements” lacks foundation. What fees for what improvements? It is true, that by suspending fees (for whatever the fees are for in the first place), commercial property owners have more money to spend on bettering their properties for the illusory tenants that your premise supports.  In reality, Council is crying for help and nobody cares.
      And why should the business community care about San José in the first place? San José is devoid of leadership. Garbage is all over the place, the Police and Fire Departments are understaffed, other city services are slated for the axe next year, Council after Council has racked up more public debt than several generations will be able to pay off and all that the present Council can do is to offer businesses is a rat-like sniveling inducement of “suspension of fees”.
      Your statement, ” Providing incentives to property owners to improve their property is one way the City can show that it is a partner in economic development.” Illustrates that you have incorporated “OED speak” into your vocabulary and is typified by the following example.
      This Council is poised to confer a $440,000 “freebie” to a company who built Fire Station No. 19. This company racked up the $440,000 in “liquidated damages” by not performing their contractual obligation. This same company, who just happened to be the low bidder for the Environmental Innovation Center project, “twisted the city’s arm” by also being the only contractor lined up for the New Market Tax Credit lenders requirement for the City to receive a $4,500,000 loan for the EIC project. But, this company did not have the required insurance to play.  The city offered to “waive the $440,000 and the company got the necessary insurance. The NMTC lenders loaned the city the money…and the “company”… ended up with an $11,094,935 contract from the city to build the boondoggle known as the Environmental Innovation Center. I am waiting for the Public Record Information request” to be processed to see if my guess that the General Fund would have been the beneficiary of this $440,000 loss of revenue.
      But, ‘tis the season to be charitable and why not “suspend” or “waive goodbye” to a cool, free $440,000 when you can get an Environmental Innovation Center funded by debt that generations of people will ridicule?
      Next, you talk about more housing projects for North San José. This is a continuation of the incredible asinine decision by the arm-pit scratching monkeys on Council who continue to permit housing projects, the absolutely worse course to chart in an economic storm.  All residential projects should be outright banned for the foreseeable future. No services, congestion, traffic, crumbling infrastructure and the baboonery on the 18th Floor wants more and more housing despite foreclosures and vacant properties all over the place.
      You also state, “Cities often invest in infrastructure to induce economic development. For example, if San Jose listed certain infrastructure projects as a core priority, then we could possibly allocate funds and therefore increase jobs in San Jose.” This is what course the City should follow, but the “prevailing and living wage and the contract compliance infrastructure” slaps businesses in the face or just kicks them in the groin. Who at city hall has been touting the rebuild of the sewer collection system,  the storm drain system and creating a variation of the Works Project Administration (WPA)? How about the reformulation of parcel taxes?
      Lastly, and speaking of “parcel taxes”, the “road paving” you often mention rivals the non-funded liabilities of the pension system. You should tell folks how your Council contemporaries are considering parcel taxes for a funding source.
      Your Honor, you shouldn’t waste your efforts with the utopian dreams of the Office of Economic Development on housing or chasing the Finnegan’s rainbow of jobs. If Council was good at creating revenue and or jobs San José would not be an indebted dump. Focus your efforts in updating the antiquated, obsolete city charter by first eliminating the Office of the City Manager, the Public Information Officer and the Office of the Independent Police Auditor.

    David S. Wall   (12.19.11)

  4. Good evening,
    Update to those who worry about mismanagement of taxpayer money at city hall.

    With reference to Fire Station No. 19…remember the Fire Department is NOT AT ANY FAULT!

    Only the Office of the City Manager has their heads in the toilet on this one (and others). The company responsible for the construction of Fire Station No. 19 was paid from the following City FUNDS:

    FUND 392: Construction & Conveyance Tax Fund – Fire Purposes (Approx. $205,000).

    FUND 475: The Neighborhood Security Act Fund (Approx. $7,000,000).

    The publically disclosed loss of taxpayer monies, with reference to Fire Station No. 19 only, is described in two (2) documents that appear on the [City Council Agenda: (01/10/12), Item 2.7 (Consent Calendar)].

    BUT, $2,304.12 in Prevailing Wage violations seems to be separate as to the overall $440,000 in “Liquidate Damages” as described, defined and set forth in the “Settlement Agreement and Release; see [A. (8), page (2)].

    It seems the city’s Public Works person, on or about 05.12.10, met with company officials contracted to build Fire Station No. 19 voicing concerns to the affect, “Hey guys, when are you going to complete this project?” The company officials replied, “The end of May, dude.”

    It is rumored to have occurred, on or about June 3, 2010, the city’s representative (from Public Works) bemoaned, “It’s now June and you (the company) has significantly exceeded the contractual time to complete the project.” What was not said was, “Look guys, the Office of the City Manager are a bastion of overpaid skanks and skankettes who have no soul. If you want to drag your feet with these dumbos and bimbos go for it. I’m just here for a pay check like you and personally, I couldn’t give a sh*t about this freakin’ Fire House.” The company officials allegedly took a “hit” off a “well rolled refer” from a District 6 pot house (which was next to a grammar school) and is said to have replied, “Are you sure? This is the best weed in town!” “Nah, we have better sh*t at the office. Besides I don’t want to smell up my clothes. I have to meet with the Council Member who writes for the “Insider” and I have to cover this crap up.”

    This banter started the administrative raucous to wit the taxpayers lost $440,000.

    More to come,(like the original documents) once I have scanned them.

    David S. Wall (12.21.11)

  5. Mr Oliverio, are you really sure public employee wages, benefits and pensions are the cause of San José‘s financial problems. Any reasonable person who logically looks at the giveaways to businesses, Major League Baseball and all the rest would probably conclude that you, the Mayor, most of the City Council and the City Manager are truly the cause.

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