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Mickie Winkler: Update on plan to restore revenues and end blight

Original post made by Note This, Menlo Park: Central Menlo Park, on Oct 29, 2006

Below is an Oct. 4 e-mail by Councilwoman Mickie Winkler to Menlo Park residents. Winkler is a candidate in the Nov. 7 Menlo Park City Council election.

Fellow Residents,
When we came on City Council there was nothing but deficit and state take-aways on the horizon. Our car dealerships were no longer dealing. To sustain and improve the services that make Menlo Park a special place to live we developed and have been implementing a long-term income-generating plan.
It was immediately obvious that we needed to increase our revenue stream from businesses. Toward that end, we convened a 2-month-long business round table to better understand our problems, and we hired a business manager to reverse the "business toxic" legacy we learned that we had. The revenue generation plan includes.
1. Encourage construction of new hotels and upgrade those we have. Cities love hotels because they bring in 10% of the sales tax dollar. To get more hotel tax dollars we need to:
-- Make sure that the new Rosewoood hotel at I-280, which is projected to bring in $1.9 million in annual tax revenues, stays on schedule to open in 2008.
-- That the proposed hotel on 101 near Marsh goes forward expeditiously.
-- That the Stanford Park hotel expands, as planned, to add meeting space, so it can become a full-time, not just seasonal, facility.
-- That the other hotels in the Menlo-Park portion of El Camino Real have incentives to remodel. (Dave Johnson had us meet with them.)
2. Attract tax-generating businesses, especially in the business to business sector, east of 101. Menlo Park has an ideal location, and the rents in our primary business district (east of 101) are comparatively low.
However, we need to continue reforming our approval processes so it takes days not months for high-quality tax-generating businesses to get licensed here.
We need to commit, long-term, to the 4 big projects underway in this, our "cash cow" sector:
(Check the website at Web Link to see the impressive and productive reforms already made, and to learn more about the 4 projects underway)
3. Increase user fees, so that residential and commercial developers pay for the staff and construction costs they incur. Done.
4. Restore Pride and Prosperity to the heart of our town. Santa Cruz Avenue has two retail stores under construction. Even the new Ace Hardware store wants to expand.
On El Camino Real, where you still see blight, we see progress. There are 6 new developments in various stages of the planning pipeline, most of which will create environmentally blessed housing near public transportation and in walking distance of downtown. Our merchants like this too. We need to responsibly create places for our aging population to live -- and with it new retail space.
Fellow Residents, that's the income-generating side of the plan. (The cost-containment side is coming). If you'd like to participate -- or if you'd like a library or a playfield named after you :-) --just email me.
Thanks for hanging in 'til the end. Mickie

Comments (9)

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Posted by Gern Blanston
a resident of Menlo Park: Linfield Oaks
on Oct 29, 2006 at 2:43 pm

"If you'd like to participate -- or if you'd like a library or a playfield named after you :-) --just email me."

O'Brien, Summerhill, Pollack, Foxhollow gang, are you listening?!


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Posted by BusinessExec
a resident of Menlo-Atherton High School
on Oct 29, 2006 at 2:50 pm

This is SPIN from Mickie "Rove" Winkler. Please see other online conversations with FACTS about the budget, not her rosy "truthiness".

The car dealers did not start going away until the last few years. American car dealers have not done well in general. Their departure came as a surprise initially, even though this was predictable. Camino.
Mickie and company ignored the input of 4 of the 5 subgroups of the Business Roundtable and started dismantling the commercial zoning ordinance in favor of large property owners who want no rules that constrain them. Their empty offices would fill faster if they lowered rent!
Sure, we need to bring back revenue producing businesses to the commercial areas east of 101 but until Mickie and Co. realize the rents there are HIGHER than surrounding communities, the challenge is great. Where is the business development plan? There isn't one! Mickie thinks the "market" will solve all problems and drop in what's needed. Well, it doesn't work that way. The role of government is to encourage what we want to happen and constrain what we don't. She isn't trying. We need a real plan. We have had a great opportunity during the Dot Com bust to figure out what we want and what it should look like, but it whas been squandered.

The ACE hardware store's need to expand was entirely predictable. The space the old store occupied is currently split between the new store and a church meeting room that has no place in the middle of prime retail real estate.
The user fees for development and construction support from staff remain subsidized by taxpayers. The city does not seem to understand how to recoup costs through cost accounting changes, and neither does Mickie.
What are the six projects on El Camino she keeps mentioning? What are the 4 big projects east of 101? There is NO PLAN for El Camino, NO PLAN for east of 101. Why does she think these developer-driven projects will help bring in revenue when projects like the Beltramo mixed-use project's commercial space wasn't required to be revenue-producing. The reason: to give "flexibility" to the developer.
We need much better business leadership than she is capable of providing.

Like this comment
Posted by Planning Wonk
a resident of Menlo-Atherton High School
on Oct 29, 2006 at 4:26 pm

BusinessExec -

To begin with, there would be NO ACE Hardware if the business development manager that Mickie Winkler hired had not worked out the arrangement you refer to with Menlo Presbyterian. It should also be pointed out that the minority fought against allowing ACE Hardware to sublet the space, prefering instead to keep it vacant.

Second, anyone can go to the planning department website Web Link and see some of the projects underway for El Camino. It typically takes 3-4 years before construction begins.

Third, the suggestion that Menlo Park should enact policies to lower commercial rents is unfair to property owners and ignores their self interest to maximize profits. Last quarter, downtown Menlo Park had one of the highest commercial rents on the peninsula AND the lowest vacancy rate. Properties like the former Juice Patch and Bicycle Connection are vacant WAITING FOR PERMITS so that they can upgrade their retail space to take advantage of the high demand. Why would developers be building two other retail buildings on Santa Cruz if they did not think that they could rent them.

The large industrial sites along 101 take longer to rent or sell, but as in the case of the Tyco site, progress is being made. Down-zoning would have a chilling effect on progress.

Lets get realistic about how long redevelopment takes and acknowledge that current council has made significant progress towards attracting new businesses to Menlo Park.

Like this comment
Posted by Just the facts
a resident of Menlo Park: Allied Arts/Stanford Park
on Oct 29, 2006 at 5:45 pm

The current council has driven away far more business than it's attracted. Take a look at Santa Cruz, El Camino, and the office park to see what four years of neglect have achieved.

Mickie's crack about naming a library or playing field after someone is so appropriate for a council that's consistently sold pieces of our town to the highest bidder without any regard for the impact on our community.

Time to take back our city.

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Posted by Paul Collacchi
a resident of Woodside: Emerald Hills
on Oct 29, 2006 at 11:10 pm

Planning Wonk writes: "It should also be pointed out that the minority fought against allowing ACE Hardware to sublet the space, preferring instead to keep it vacant."

Not quite. I was "the minority" at the time along with Chuck Kinney.

What no-one is saying about the Ace hardware, is that it occupies only a small portion of the front of the building and that a church meeting room occupies the larger back portion of the building.

The building is 8000 square feet and the Ace hardware occupies about 3000 square feet.

The net/net of the deal is that Menlo Park replaced a former sales tax producing parcel with a non sales tax producing use. The Chamber also understood this and wrote a polite letter or objection.

I wanted all 8000 square feet to be retail.

Elsewhere in Menlo Park we are replacing former sales-tax paying auto dealers with high-density condos, and in the east we have replaced sales-tax paying light manufacturers with non sales tax paying offices.

Office conversions and condo conversions have wiped out the sales tax base. Is it any wonder that sales tax revenues are at a 13-year low?

While its perfectly understandable that property owners would want to maximize rents, it is incomprehensible to me that city council members would also want to maximize rents particularly when it leads to the elimination of sales tax and hence city revenue.

Its perfectly “fair” for the community to guard its tax base, and to put retail uses in retail zones.

Mickie’s only policy is “streamlining”, a euphemism for eliminating community discretion in land-use matters. Mickie wants to make Menlo Park safe for spec development, even at the expense of the sales tax base.

Now, in the election, she’s getting beaten up over the fact that she ran our sales tax base into the ground. Suddenly, Mickie has a plan for sales tax. It's too late.

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Posted by Planning Wonk
a resident of Menlo-Atherton High School
on Oct 30, 2006 at 12:12 am

Mr Collacchi,

Your statement about sales tax ignores the facts that sales tax fell $6 million or 50% under your council majority and has remained roughly flat over the last four years. Projects that can bring back that kind of revenue take years to develop and this council has brought in both a hotel and an auto mall that will each generate millions.

Debates about a hardware store that might pay a few tens of thousands per year in sales taxes are academic in that context.

People in town wanted a downtown hardward store and our business development manager found a creative way to get one. The hardware store has been a catalyst for bringing people back downtown to shop and saved many trips to Palo Alto.

I for one would like to say thank you.

Like this comment
Posted by Inquiring Mind
a resident of Menlo Park: Central Menlo Park
on Oct 30, 2006 at 7:12 am

What role does Proposition 90 play in all of this? Palo Alto has deliberately taken a number of actions in advance of the election to protect retail areas from conversion to offices and residential. What is Meno Park doing?

Here is an Aug. 9 story from the Palo Alto Weekly: Web Link

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Posted by BusinessExec
a resident of Menlo-Atherton High School
on Oct 30, 2006 at 8:37 am

Planning Wonk - you misinterpreted what I said. I agree that cities can't lower commercial rents, but cities don't have to approve projects that defy existing land use regulations in order to satisfy the self-interest of property owners. The residents have a huge stake in these decisions because it is the policies that help ensure sufficient revenue will accrue to pay for services residents desire and it is the policies that help ensure there is an appropriate mix of business types so residents don't have to go to other cities to find what they need.
I looked at the city website and see that a number of the projects you mention require amending the city's General Plan. Since when does a list of projects initiated by property owners constitute a Plan?

By the way, if the Juice Patch and Bicycle Connection are awaiting permits, these are BUILDING permits. Mickie's Council did nothing to improve any inefficiencies in that process. There are no use permits required for renovating retail establishments on Santa Cruz.
As glad as I was to see the ACE return to Santa Cruz, we all know that once non-retail enterprises (in this case, the church) take over retail space, it will be hard to dislodge them. Where will ACE go now? If they move, what happens to their space? These are important questions.
We need to bring diverse perspectives together for the good of the community. The best ideas and plans can come from that. I don't have confidence that the current majority knows how to listen or compromise because they tend to ignore input (what ever happened to the Budget Advisory Commission?) and villify those who don't follow in lockstep.

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Posted by Paul Collacchi
a resident of Woodside: Emerald Hills
on Oct 30, 2006 at 8:37 am

So you seem not to deny the underlying structural analysis, but decided to throw some factual mud at me, instead. I re-assert: in almost every case possible, large (car dealers and light manufacturers), and small (hardware stores) Menlo Park is allowing non-sales tax producing uses to crowd-out and replace sales tax producing uses.

Sales tax did both boom and then drop under my "majority" but not by 50%. Mickie also mis-stated that fact in her email. Sales Tax Revenues in the last year of the prior majority ('02) were $8.6M, and didn't bottom out to the $6M run rate until FY04. They have stayed flat and now are declining after four years.

Our "majority" foresaw and predicted the exodus of sales tax producers as early as ‘98, even as coffers were rising. Web Link ,

(“City Council members are concerned about … loss of sales tax from companies such as light industrial businesses that are being replaced by professional services companies that don't pay sales taxes.”)

We took action. We had some protective legislation almost in place by 2002.
Web Link
“The phenomena of high-rent offices crowding out beneficial lower-rent uses in M-2 is similar to events downtown where the Park Theater and Menlo Hardware are being crowded-out by rent pressure from offices along El Camino.
… In M-2, high-density offices are already crowding-out Menlo's existing sales tax producers and may permanently eliminate any chance for new ones to return.”
The legislation was opposed by Mickey and Lee and dropped when they took office.

The problem actually began earlier in the ‘90s, when an office loophole was first exploited.

Changing the subject, and flinging political mud at me wont fix it. The problem is real, its been happening for a long time, Mickie and Lee denied it during the term, and Menlo Park is suffering long-term structural revenue problems, in part, because its “pro-development” wing has willing sacrificed sales tax at the alter of high rents.

Though the city cannot control rents per se, we do not need to throw gasoline on the fire, and we can insist on sales-tax producing retail uses in our commercial zones and sales tax producing light industrial uses in our industrial zones. Its just basic planning.

Sorry, but further commenting on this topic has been closed.

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