Hotel President tenants fight evictions
New owner plans to reopen as an inn even though city says it’s not allowed
Residents of Hotel President in downtown Palo Alto facing possible evictions in November say they won’t go without a fight.
Adventurous Journeys Capital Partners, or AJ Capital, announced June 12 that it had purchased the 488 University Ave. building, with the intent of converting the historic property back into a hotel with 100 guest rooms. Currently, the hotel is used as a residential building. However, the city on July 17 informed the company that it could not convert the property into a hotel because that would violate the city rules. AJ Capital met privately with city officials about its plan before the purchase but has not submitted an application for the proposed conversion.
Jonathan Lait, the city’s assistant planning director, said when he and other officials met with AJ Capital on June 7, staff had not at that time fully explored the site. When City Manager James Keene during a City Council meeting in June mentioned that the new owner was interested in turning the site back into a hotel, Lait added, he wasn’t making an incorrect statement “except for this instance where the building is non-compliant.”
“In hindsight, if we were to play this over again, we’d be more judicious” he said.
The historic building, even though it was constructed as a hotel in the 1920s, exceeds current height and density limits and cannot be remodeled, improved or replaced to any other use than retail on the ground floor and 75 housing units on the upper floors, Lait said. That’s because its current uses were in place in 1986, a condition of the city’s grandfathering law. AJ Capital could raise rents with no restrictions or convert the apartments into shared ownership units, he said.
Michelle Kraus, a 10-year President Hotel Apartments tenant, applauded the city for properly interpreting its laws “against a developer that has come in with a lot of money,” but said residents now need the city’s help to stay in their apartments. Some have already packed up and left, yielding to AJ Capital’s planned changes, she said.
“This is the fight for the soul of Silicon Valley,” said Kraus, who helped form the President Hotel Tenants group.
The group, which launched a petition (https://bit. ly/2Oc3oGn) over the weekend, is asking the city to halt the evictions, issue a moratorium on any rent hikes and explore putting a rent stabilization program in place. The group is urging the community to come out and speak on the issue at the July 30 council meeting. It has also employed the services of Shute, Mihaly & Weinberger law firm as it gears up for possible litigation.
Katja Priess, a single mom who has lived at the site for 23 years and runs a language school out of her home and a shared downtown office space, said she will likely have to restart her business elsewhere and also uproot her 15-year-old daughter from a local school if she is evicted.
“With this situation that came out of the blue honestly, I don’t know what I would do,” Priess said. “There’s this dark cloud of uncertainty and displacement hanging around the building.”
Jeff Levinsky of the Palo Alto Neighborhoods residents group said it would have set a “horrible precedent”
for other residential buildings downtown if city staff had sided with AJ Capital’s plans. He said there is a history of “city staff misinterpreting the law,” noting that an illegal planned conversion of a historic building at 261 Hamilton Ave. in 2014 made it all the way to possible council approval before it was rejected. A later proposal for the site was eventually approved, even though it didn’t have enough parking spots, until his group appealed the decision, he added.
“I think it’s a win for everybody when the city upholds the law,” Levinsky said. “It’s also good for these particular residents because preserving at least residential use is maybe good news for them. … We’re looking at other legal protections for the apartments and the residents.”
AJ Capital, which didn’t respond to requests for comment, isn’t planning to go down without a fight either. It issued a letter to Hotel President residents Monday stating they must still vacate the building by Nov. 12 and it is not in agreement with city officials over their “reading” of
city rules.
“We respectfully disagree with the City’s current reading
of the relevant Municipal Code provisions and will be continuing our discussions with them over the coming days,” the letter reads.
Mayor Liz Kniss on Monday said the issue of protecting Hotel President’s residents is “going to be a huge challenge” to keep the residents in place, but she is determined to bring the issue forward at a future council meeting, though she said she isn’t interested in widening a discussion of renter protections beyond historic buildings.
“It is terrific low-cost housing and I’m a big advocate of low-cost housing,” Kniss said of Hotel President, where rents average about $1,900 a month. “Some people live there long-term (and) it’s been a good place for new people coming into town to stay for a short time. … We don’t have enough low-cost buildings, we’d like more of them.”