Six worst decisions in 50 years
When politicians make a big decision, they often summon studies from consultants or cite polls of their constituents. The truth is that they don’t always know the impact of their calls. Sometimes an afterthought will be a sparkling success, while an oversight can be devastating.
With that in mind, I’m offering the first part today of a twopart series on the worst and best decisions by local government leaders over the last halfcentury. Why 50 years? I’ll admit it’s arbitrary: But it was 50 years ago that my family moved to Palo Alto, and almost 40 years ago that I began working at the Mercury News.
I’ve covered almost all these stories, or at least their aftermath. You should know I bring an urban viewpoint to my judgment: I favor downtowns. I want a suburban place to forge an identity. Finally, it’s one columnist’s take. You’ll have your own list.
Today I cover the halfdozen worst decisions. Next Sunday, I’ll cover the half-dozen best. The following come in no particular order.
DEMOLISHING SANTA CLARA’S DOWNTOWN — No land-use decision of the last half-century has damaged the urban fabric of a city more than Santa Clara’s decision to tear down its eight-block downtown in the 1960s. The compact old Franklin Street downtown had a City Hall, a five-and-dime, a grocery store and a movie theater.
The City Council of the time thought it could usher in an economic boom by acquiring the land and demolishing the buildings with federal urban renewal funds. Six of the eight blocks sat fallow for many years, and it wasn’t until 1987 that the last vacant parcel was developed. The result has no coherence, no center, no charm.
$60 MILLION BOND LOSS — It was a mark of San Jose’s affluence in 1984 that City Hall could lose $60 million in the bond market and not really feel it. A duo of traders in the city’s treasury department was speculating on long-term bonds through an esoteric vehicle called “reverse repurchase agreements.”
The traders received praise for their performance from their bosses. Then, in reports to the council in early 1984, the city’s treasury reported earning no interest — zero — on a portfolio that hovered above $200 million. The speculation, alas, was not caught immediately: It was the equivalent of paying no attention to your checking account.
After the city brought lawsuits against the brokerage houses that dealt with the treasury department officials, the loss was pegged at $39 million. The affair cost seven city officials their jobs and began the long decline in the prestige and power of the city manager’s job.
NOT GETTING THE WARRIORS — In 1995, you could not accuse San Jose or then-Mayor Susan Hammer of not wanting to bring the Warriors to town. The city put together a $43.5 million package, heavily reliant on bonds that would be paid back by a stream of money from the Warriors, to persuade the team to share the downtown arena with the Sharks.
It was a difficult threeway negotiation: Because they controlled the arena, the Sharks led the talks. And some people say that Sharks’ President Art Savage, a tough negotiator, upped his demands as the negotiations went on. Oakland eventually made an offer that kept the team.
It’s unclear precisely how much more public money would have been needed. What we know in retrospect, however, is that the city’s stance underestimated the value of bringing the Warriors to San Jose.
The Sharks and Warriors were $6 million apart on luxury box income, and the Warriors wanted control of the city’s box. But with redevelopment income starting to boom, San Jose could have increased its offer. The Warriors would have been worth double what the city was putting on the table.
San Jose’s caution was understandable politically — but still a miss. Now San Jose has to face the likelihood that a new Warriors arena in San Francisco will eventually take concert dates away from the SAP Center.
FAILING TO FLUORIDATE IN THE 1960s — It’s a story of good intentions lost in a Balkanized bureaucracy. In 1964, a young lawyer named John Vasconcellos, later a long-serving legislator and target of Doonesbury fun, led a campaign to fluoridate the water of the San Jose Water Co. A vote of San Jose residents showed that a sizable majority of residents favored the move.
The water company dragged its heels, saying it would fluoridate only if the Public Utilities Commission ordered it and a majority of all SJW customers — the company also serves folks who live outside San Jose — approved it. A move to persuade the Board of Supervisors to put it on a more extensive ballot failed. The campaign died in 1969. For almost half a century, kids in San Jose dealt with unacceptable levels of tooth decay.
DRAMATIC PENSION REFORM IN ONE CITY — I confess to eating crow here. I supported San Jose’s Measure B in 2012, which significantly cut expected pensions for city employees. I still believe the intent was good: A pension of 90 percent after 30 years, which veteran cops and firefighters enjoy, is not sustainable for a city like San Jose.
But I’ve come to believe that Measure B was a bad political mistake by Mayor Chuck Reed. The proponents underestimated how easy it was for cops to transfer to cities that retained higher pensions. And they misjudged how substantial the exit would be of top managers at City Hall.
The San Jose Police Officers’ Association, which kept tight control over vetting new cops, aided the exodus and effectively closed the spigot of new hires. A police force once near 1,400 officers slipped to below 900 ready for street duty. The courts struck down a big piece of Measure B — and Mayor Sam Liccardo has had to make more concessions to the unions.
In retrospect, it shows how hard dramatic pension reform is in one city. The reformers would have been better to accept something more modest in San Jose — along the lines of what happened in San Diego, which passed a much more limited measure on the same day that Measure B was approved. Reed later pushed for statewide reform, an effort that bore only modest fruit under Gov. Jerry Brown.
LOSING THE SADDLE RACK — Yes, a quirky choice. But the loss of the best-known country-western nightclub in the Bay Area in 2001 was a blow to San Jose’s identity. Beneath the high-tech gloss, San Jose’s roots are agricultural, one reason why the nightclub on the near West Side was so insanely popular.
True, the Saddle Rack’s owner, Hank Guenther, might have sold out anyway. But with the adoption of the Midtown Specific Plan in the 1990s, the city decreed that it foresaw housing for the area. The plan virtually made it uneconomic for Guenther — who died in a plane crash in 2002 — to remain in business with the Saddle Rack.
Instead, he sold his property to KB Home. In preferring condos to the bucking bull, San Jose betrayed a lack of soul. The Saddle Rack re-opened in Fremont.