City Council approves sale of Hayes Mansion
San Jose is set to finally offload Hayes Mansion, which it has been trying to sell for years.
At its last meeting Tuesday before a July recess, the City Council approved a plan to sell the hotel and conference center to San Francisco-based real estate company JMA Ventures for $30 million. The sale will allow the city to pay off debt remaining from renovations done in the 1990s and early 2000s and eliminate an annual subsidy that has covered that debt service.
“I really hope this property sale transacts,” said Bob Staedler, a land use and planning consultant who used to work as a real estate manager for the now defunct San Jose Redevelopment Agency. “It’s been a huge weight on the city financially and it’s an asset for the city that has a lot of potential, and the city just doesn’t need to be in the hotel business.”
JMA has said it will continue running Hayes Mansion, located south of downtown off Monterey Road, as a hotel conference center.
It’s not the first time the city has tried to unload the property. Last year, a proposal to sell the mansion for $47 million fell apart when the would-be buyer, Asha Companies, failed to make a deposit. And in 2016, an offer from Global Bancorp Commodities and Investments stalled.
The sale wasn’t the only big-ticket item on the council’s stuffed agenda.
The council approved a settlement of nearly $60,000 with Cosme Grijalva, who was searched without probable cause by San Jose police in 2016.
And it formalized previously announced agreements with Verizon, AT&T and Mobilitie — the small cell partner with Sprint — to boost the city’s broadband coverage. As a result, the companies will put small cellular radio access devices on 4,000 city-owned light poles. According to the city, the move marks the largest small cell deployment in any U.S. city.
The council also continued to explore putting three potential ballot measures on the November ballot, including a possible bond measure for as much as $950 million to improve emergency response services and roads in San Jose; a possible extension of the 15 percent card room tax that gambling businesses currently pay to third-party businesses acting as “banks” for the card rooms; and a potential amendment to the city charter that could alter how its salaries are determined.
Right now, the council votes on its own salary every two years based on a recommendation from a commission. The potential change would count council salaries on July 1, 2019 as a baseline and automatically increase them every year by no more than 5 percent.
None of the ballot measures are written yet and voters would ultimately need to approve them in November, but the council directed the different city
departments working on them to return Aug. 7 after recess with draft ballot language. At that time, the council could vote to put the proposals on the ballot.
Early surveys suggest residents are open to the idea of a bond measure, but getting the necessary twothirds of voters to support the idea could be a challenge, something Mayor Sam Liccardo acknowledged Tuesday.
“We’ve got a lot of work to do before we decide if this is actually going to happen,” Liccardo said.
As part of the possible charter update, the council is also considering changing when it can propose an ordinance. Right now, the council is barred from putting an ordinance on the ballot that competes with a potential voter-sponsored ordinance; an amendment it’s considering would allow that. In June, the council appeared to put a proposal on the ballot that directly competed with a proposal from developers to build senior homes in the Evergreen area. Technically, that didn’t violate the rules because the city’s ultimately successful proposal was a charter amendment and not a competing ordinance.
In a continued attempt to revitalize the downtown area, the council also approved a Housing Department memo to extend a waiver of affordable housing fees that high-rise rental developments were set to begin paying and to exempt those projects from new private development workforce standards that require developments to get a public subsidy to pay prevailing wages and hire locally, among other things.
The housing department has said forcing developments already in the pipeline to apply the standards would be onerous and stifle creation of badly needed housing, but in a memo, Councilman Raul Peralez, who represents the area, said any future changes to the fee program should be subject to the workforce standard requirements.