The plot thickens around the President Hotel

December 8, 2018 – Palo Alto Matters

Investigative reporting by the Palo Alto Weekly has shed troubling new light on behind the scenes interactions that may have led to the city’s surprise rush to enable the elimination of 75 housing units at the President Hotel Apartments. Communications secured through a Public Records Act request depicted an intensive lobbying campaign by AJ Capital Ventures, the new owners of the President Hotel building. AJ’s efforts included threat of litigation, side communications with a sitting council member, use of former senior-level city staff to gain access, a private agreement with tenants to silence their opposition to the project, and notably, a proposal to extend significant short term benefits to remaining tenants if the city acts, by a certain date, to make the zoning changes needed to enable conversion of the building to a hotel. 

Against the backdrop of overwhelming community support for preserving housing at the President, in late November, the city added two action items to its end-of-year calendar that could eliminate regulatory barriers to conversion of the building, just in time to meet the deadlines in AJ’s proposal. One of those is a “grandfathering” rule that will be taken up on December 10. The provision prevents remodeling of an oversized building associated with a change from its grandfathered use (e.g. housing to hotel). The agenda item makes no reference to the President Hotel and the staff report describes the code change as correction of a mere “administrative error,” yet contends that it must be made in advance of the normally required Planning Commission review in order to “preserve the public health, safety and welfare.”  

The appearance of behind closed door dealings, the city’s efforts to play down implications for the President building, and the prospect that the city may take affirmative action to facilitate reduction of housing stock while conveying multi-million dollar benefits to AJ Capital have raised substantial concern in the community. It stimulated both a scathing editorial by the Palo Alto Weekly, and a call to action from Palo Alto Neighborhoods (PAN) opposing any change to the “grandfathered facilities” law without the normally required vetting by the Planning Commission and urging that “any revision should continue to prevent residential uses from changing to commercial ones so as to preserve Downtown housing and protect tenants from being displaced.”

City Council will vote on the “grandfathered facilities” provision on Monday, December 10.

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