San Jose Downtown Association
28 N. First Street, Suite 1000
San Jose, CA 95113
sjdowntown.com
408.279.1775
March 8, 2022
The Honorable Mayor Sam Liccardo and City Council
City of San Jose
200 East Santa Clara Street
San Jose, CA 95113
RE: Implementation and Amendment of the Commercial Linkage Fee Ordinance, Item 8.3 Dear Mayor Liccardo and City Councilmembers,
The San Jose Downtown Association (SJDA) expresses our support for the staff recommendation regarding the Commercial Linkage Fee (CLF).
As the city revisits the CLF again, familiar issues resound. As noted in our August 28, 2020 letter to Council, generating new commercial development and business growth is crucial for San Jose to help create the jobs needed to address the city’s structural budget imbalance. This has been a priority civic goal for decades and an underpinning of the city’s General Plan.
What has changed since Council action on the CLF a year and a half ago? A crushing pandemic, skyrocketing construction costs, supply chain disruptions and delayed commercial projects over uncertainty with the future of work. Now is not the time to overreach with the CLF.
Staff’s recommendation follows the Council direction by providing reasonable payment options, and encourages up front payments through a discounted fee structure. The deferred payment option is important for those developments that may need the flexibility to align payments with the lease up of their buildings. This flexibility will be especially critical during tough economic times when tenanting can take multiple years. The deferred payment flexibility can make a difference for projects getting out of the ground.
We understand the need for affordable housing throughout the city is great. So is the need for job growth in San Jose. If the CLF is not implemented correctly it could preclude development and recurring annual property tax, business tax, and sales and transaction tax revenue that supports the city, and ultimately our affordable housing aspirations.
Sincerely,
Scott Knies
Executive Director
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San Jose Chamber
of Commerce
101 W. Santa Clara St., San Jose, CA 95113 | sjchamber.com | 408-291-5250 | [email protected]
Mayor Sam Liccardo and San Jose City Councilmembers
City of San Jose
200 E. Santa Clara Street
San Jose, CA 95113
March 8, 2022
RE: Item 8.3 – Commercial Linkage Fees
Mayor Liccardo and City Councilmembers:
The San Jose Chamber of Commerce would like to express our support for the February 15th staff memo regarding commercial linkage fee (CLF) collection and would request its adoption under Item 8.3 on the March 8, 2022, Council agenda.
The goal of the commercial linkage fee, namely that a nexus exists between commercial development and the need for more affordable housing, is laudable, and even more pressing in the current crisis of housing affordability. The means, however, of the collection of these fees must also be driven towards another laudable goal: increasing commercial development and enhancing the likelihood of full leasing of these buildings. By providing flexible payment options that are conscience of current economic conditions, the staff memo is the best option for achieving these goals concurrently.
The benefits of this approach are multi-faceted. Facing an uneven recovery, San Jose’s small businesses and customer facing organizations require a vibrant and active city, with feet on the sidewalks and abundant commercial activity. We have seen the myriad of impediments to this occurring, many of which – like the supply chain disruption and ongoing work from home policies – are out of our control. It is for that reason that Council, when the decision is within their purview, should adopt the approach on CLF that is most likely to lead to continuing robust development throughout San Jose.
We appreciate the consideration of this position and respectfully request that Council adopt the staff memo on Item 8.3 during your meeting this afternoon. Thank you for all you do to make San Jose a premiere destination to start and grow your business.
Sincerely,
Derrick Seaver
President & CEO
Via Email
March 8, 2022
Honorable Mayor Sam Liccardo and Members of the City Council City of San Jose
Dear Mayor Liccardo, Vice Mayor Jones, and Councilmembers Arenas, Davis, Carrasco, Cohen, Esparza, Foley, Jimenez, Mahan, and Peralez.
Item 8.3 – Actions Related to the Implementation of the Commercial Linkage Fee We write today to express our concern that despite falling short in our response to the pressing affordability crisis in our communities, San Jose is not adequately preparing for the increased need for affordable housing that will accompany the post pandemic growth in the city. The Commercial Linkage Fee is the primary tool used by cities throughout the county to fund affordable housing development as they increase local employment. San Jose’s policy is the weakest in the county and fails to equitably confront these challenges.
We ask the Council to support the memorandum from Councilmembers Cohen, Jimenez, and Carrasco and take two actions:
• Amend the ordinance to require payment of Commercial Linkage Fees at time of issuance of building permits.
• Direct City Staff to follow the direction from September 2020, return to Council by September, 2022 for consideration of increasing the fees across the city.
We also ask for the following:
Remove the current waiver of fees for the first 40,000 square feet of new office space, and align any fee reductions with neighboring jurisdictions.
When the last City Council finally adopted a Commercial Linkage Fee in 2020, following years of advocacy and the active engagement of over 50 community-serving organizations, fees were set well below what was feasible due to the uncertainty of the pandemic. At that time, recognizing the immense number of new jobs planned around the city, the council accepted the recommendation from Mayor Liccardo to have City Staff prepare an update of the Fee Feasibility Study and return in no more than two years to reassess appropriate fee levels. It is critical that the Council affirm its own direction, and support increasing the fees by September of this year.
We are not through the extensive human, social, and economic impact of the pandemic, but our major employers have fared well, and the current commercial development pipeline will bring well over 100,000 new jobs to the city. It is imperative for appropriate Commercial Linkage Fees be in place prior to the start of post-pandemic construction to be effective in addressing increased demand for affordable housing. Our existing need is already tremendous. Inaction would be a failure of our commitment to our communities in recovery.
Sincerely,
Nadia Aziz, Directing Attorney
Law Foundation of Silicon Valley
Gabriela Chavez-Lopez, Executive Director
Latina Coalition of Silicon Valley
Louis Chicoine, Chief Executive Officer
Abode Services
Gina D. Dalma, Executive Vice President
Silicon Valley Community Foundation
Jennifer Hark Dietz, CEO
PATH
Amie Fishman, Executive Director
Non-Profit Housing Association of Northern California
Poncho Guevara, Executive Director
Sacred Heart Community Service
Maricela Gutiérrez, Executive Director
Services, Immigrant Rights and Education Network (SIREN)
Janice Jensen, President & Chief Executive Officer
Habitat for Humanity East Bay/Silicon Valley
Gregory R. Kepferle, Chief Executive Officer
Catholic Charities of Santa Clara County
Jennifer Loving, Chief Executive Officer
DESTINATION: HOME
Derecka Mehrens, Executive Director
Working Partnerships USA
Sandy Perry
Affordable Housing Network
Andrea K. Urton, Chief Executive Officer
HomeFirst Services of Santa Clara County
Victor Vasquez, Co-Executive Director
SOMOS Mayfair
Jon White, Chief Real Estate Officer
Allied Housing
Regina Celestin Williams, Executive Director
SV@Home
Dan Wu, Executive Director
Charities Housing