Rezone the Quarry 9212 report released, or, It’s not the size, it’s the frequency

Anyone know a good fix for crossed eyes from reading too much? If you are like me and didn’t know what a “9212” report was before this Quarry rezone flap started, it basically is the citys’ effort to directly address and present a supposedly unbiased opinion on what an initiative does and does not accomplish. Concerned citizens ask questions and the City Attorney states the city opinion. In the case of the Quarry rezone initiative, there are many  more questions than answers.

The report is buried way back in minutes of the City Council meeting of July 25. The report itself in turn is 304 pages long and can be downloaded from here.  A follower of this blog pointed me at it and I am trying to digest it all…and in addition to eye stain, it gives some heartburn, just how large the disparity between what is actually being voted on, and what has been represented.

I read through about 60 pages of it, then, when my eyes got tired, I played like a nerd and applied a little frequency counting to the article, basically seeing how often some of the key points were repeated.

“The Initiative does not approve a specific project” appears 127 times in the body of the report. If that is not clear enough, let me break it down further – All of the promised benefits – hotels, new signs for the Rockaway merchants, uplift in TOT (Transient Occupancy Tax) for the city, “Preservation” efforts, purple unicorns flying through the sky to disrupt the flight path from SFO so we can get some sleep…none of that has any guarantee of happening  if this mess passes.

We are not being to asked to vote on a project – in fact, we are being asked to do the opposite. We are asked to forever yield the quarry to whatever schemer blows into town.  Some have argued that if the measure passes, Eenhorne could easily “Flip” the property to another developer.  The 9212 does confirm that if the measure passes, the change to the Rockaway Beach plan and authorization to rezone would survive any change of ownership of the quarry land.

I personally do not believe he would flip it. I wouldn’t. The potential gross revenue flowing out of Pacifica into his Michigan coffers will be well over a half million dollars a month just in apartment rents. The report does state repeatedly that not only does the initiative not approve this specific plan, but the city has no way to compel or order the developer to complete any phase of the project in any particular order.  Given the aforementioned beaucoup dinero from rents, I think I can guarantee the only component sure to be built – those 206 “Multi Family Housing Units”

That is another, very troublesome little factoid. Both the initiative and the 9212 consistenly refer to 206 “Multi Family housing units”.  If you dig into the report, You will find that a “Multi Family housing Unit” is a structure that houses three or more families….or, what are normally refered to as “Apartment buildings“.  This may just be paranoia on my part, but the initiative explicitly limits all square footage for commercial development, but only uses broadly or ill defined terms like “Multi Family Unit” and “Four Story”for the residential component.  How big is a “Story” exactly? Is it 10′ high, or 20′ high?  Are we talking Anna Karena or Hop on Pop?  There no limit on square footage for the residential component as there is for the commercial and hotel components.

This is beyond insane.  This initiative restricts how much land can be purposed for the activities that will generated the highest tax yield to the city while not limiting the square footage for the tax revenue neutral-to-loss residential component?  Even if you are pro development (as I am), this particular initiative is just a sucker bet for the city.

I’ll probably rant some more on this 9212 thing as I continue to fight through it.  If you feel like reading some of the thing and spot any steaming nuggets of Dutch absentee landlord chicanery, please feel to drop a comment.

 

Pacifica Residents for Preserving the Quarry – Seriously?

Please do not feed me bullshit. I don’t like the taste.

I am holding in my hand a mailer from “Pacifica Residents for Preserving the Quarry”. Apparently the shills in front of the grocery stores are not getting enough signatures (You might want to hire some more) so now we are getting petitions direct mailed.

It’s the same disinformation – “Save the Quarry from the developers” but the word re-zoning NEVER appears on the slick mailer at all.  Extra Granola on this one “green” slick printed multipage piece of junk mail- I think they should have added a picture of a puppy playing with a balloon, though.  That would be cute. I like puppies.

In a way, maybe this is better – I actually have less concern about fraud compared to the card table shills, because if you tried to submit fraudulent material through the mail and got caught, we can go after mail fraud as well as voter fraud. So maybe this direct mail petition is superior to the way it is normally done – gathering the signatures in a public place.

Then again, I don’t know that the hidden powers behind “Pacifica Residents for Preserving The Quarry” are smart enough to realize this – their behavior up to now has shown a certain contempt for Pacifica and it’s residents.  If they believe that we are buying the BS that slapping up a 200 unit yuppie storage complex is “Preserving the Quarry” then they might even think they can get away with tricks to circumvent our ballot process.

But enough of my paranoia.  What set me off is not the potential for voter fraud, it’s the damn name.  Seriously.  If they called themselves “Pacificans for Rezoning the Quarry”  or “Pacifica Residents That Think Low Income Apartments and Lots of Traffic On The Beach are a Good Idea” I would be ok with it.  Hell, I’d shake the hand of the man with the stones to call a spade a goddamn shovel.

But you don’t become a millionaire absentee landlord by shooting straight I guess.   Apparently you do it by putting up dummy “grass roots” groups, shading the truth if not outright lying, working through proxies, and saying what you need to say to get your way and make your dough.  Real Estate is big business and Huele stands ready to get a lot of nice rent checks mailed to him in Michigan, if he can just fool those dumb ol’ hippies in Pacifica into thinking that apartment complexes are a form of ecological recovery.

“Rust Belt Slumlord” may be a bit harsh

To set the record straight, I have never referred to Huele or Eenhoorn as a “Rustbelt Slumlord” and certainly never in print.  I don’t think I have ever lived in an one of the over 80 apartment complexes he boasts of on the corporate site, so I wouldn’t have any firsthand knowledge of that.  I think “Absentee Landlord” is the politically correct term, right?

Definitely not a slum. Would look nice on the headlands.
Definitely not a slum. Would look nice on the headlands.

Another website following this current debacle, pacifica.city, decided to check me out and see if I was making crackpot claims – I appreciate the journalistic integrity in fact checking.  They determined that of the Eenhoorn properties they identified, there was no indication of anything resembling the quarry plan.  Besides looking for a pilot for the corporate jet (hey, I’d want my own jet if I called Grand Rapids, MI home…anything to get out of town faster) all they are hiring for is apartment management.

But HIS fact checking in turn gave me a nice list of complexes.  If an “Absentee Landlord” is looking to plop a 200+ unit complex in the middle of this beach, it might be good to take a look at his other developments, and moreover, read the reviews that his tenants have posted.

It doesn’t look all that bad, certainly not “Slumlord” level.  I only found occassional mentions of basic building maintainence being neglected, malfunctioning appliances, and only a couple of meth labs mentioned in the reviews.  By Rust Belt standards, pretty standard stuff in a world of $700 3 bedroom apartments.

I think this is the basic disconnect.  Mr. Huele and Eenhorne have become extremely wealthy on the backs of a lot of poor people in an economically devastated region.  If they were putting forth the quarry plan in, say, Kalamazoo, or Flint, or East Troy, it would be a boon to the community.  I am pretty sure there are lots of places – old quarries, tire factories, press mills – that would *gift* the property to Huele for this sort of plan.  But Mr. Huele, for all his real estate acumen in Michigan and the midwest, didn’t do his homework before jumping into this quarry deal.

Pacifica has problems, to be sure – but they aren’t Rust Belt problems.  Instead of taking the time to study his potential investment and understand the completely different challenges of this city, Huele is really just exporting Rust Belt style “Absentee Landlord” management into our city, creating the same sort of environment that people with corporate jets fly away from.

Hope you find that pilot, Mr. Huele.

Paul Huele and Eenhoorn Group, LLC – Shady practices exhibited

I was at Safeway in Linda Mar last Saturday and saw a little card table set up – someone was collecting signatures for something.  I sidled up to see what was being discussed – and it was the “Save the Quarry” folks   passing out hard copy cards attempting to make a case that the geologically stable quarry was somehow in danger, and my signature might help save it.   In fact, there were at least four tables set up at that shopping center.  Each one trying to collect signatures, and trying to get those signatures without volunteering any information other than the eco-spin printed on those not very green, glossy printed cards.  The first three I spoke to did not know (or claim to know) the developers name, his backing, background, or anything else.  One older “Volunteer” – probably a paid shill who organized the others – was able to come up with the name “Huele” but nothing else. Other questions about the zoning and need for quarry saving were met with a similar lack of integrity.

That interaction led me to start looking into where the money was coming from.   I went to the URL on the card (thepacificaquarry.com) to do some reading….But I am also an inquisitive nerd, I started looking for where the money was coming from to fund these signature drives, pay for the offset printing, web development and the rest.  The site looks pretty slick. although the content does leap to a lot of conclusions easily rebutted that I will discuss in a seperate post.  But what I wanted, really, was contact info.  No contact info on the site other than a generic email “info@” link and a 650 phone number.  Strange for such a big project to not want thier street address to appear.

Since there was a website, I looked up who owns the domain, and noticed something odd. Whoever it was did not want anyone finding out their identity too easily.  The DNS registration for thepacificaquarry.com is deliberately obfuscated and looks like this (Click for a full copy): dotcomwhois info

If you don’t work in this stuff, I will explain what you are looking at – DNS is “Domain Name Service” and to have a domain name, you must register that name, and provide administrative, technical and billing contact information.  If you are up to something that maybe is not so good, you might want to hide that information, so you use a domain proxy service who stands in your stead for the registration.  This is a common practice in some of the sleazy underbelly of the interwebs – you know, porn sites, on line pharmacy sites from the bahamas, and eco friendly real estate rescue operations.   It’s perfect for developers from Michigan who would rather those tree hugging hippies in California not learn too much about the rust belt profiteer seeking to wreck our beach and city.

Continuing to dig, I did finally identify Paul Heule as the “Developer”  that the card table jockeys dared not speak of.  Mr. Heule is the VP, and son of the founder of the Eenhorne group . Their website isn’t much better but they don’t seem to need to obfuscate that one. Compare THEIR whois info:  eenhornwhois – that is what whois from a legitimate site looks like.

In this stage, despite all the granola crunchy feeling goodness on the website, the fact remains that these parties are telling the truth selectively or not at all.  This is not a “Save the quarry” or “Restore the Quarry” – this is “We want to build apartments in the Quarry”.  Apartments are where they make their money, and compared to the festering suckhole that is Michigan, the California market must look really good.  THE quarry does NOT need “restoration” – that would mean putting most of a very large granite rock back –  and what is being proposed is not a “Restoration”, it is simply “Development”. Despite the “Green” feel to thier slick marketing, all of that touchy feely eco-goodness could be started today, if they just didn’t need to slap up a couple of hundred “Low income” oceanfront apartments to do it.

Our on line research quickly shows that Eenhorne is little more than an apartment management outfit.  They do not own or operate hotels or retail outlets, they run apartment complexes. Below is his bio, cribbed from the Eenhorne webpage.  From the bio, I am sure he is very good at making money from apartment complexes, and he certainly should continue to do that – in Detroit or maybe Flint.

 

Paulus C. Heule graduated from Calvin College in 1985 with a degree in mathematics and computer science. Mr. Heule is fluent in Dutch and English and has working knowledge of German and French. He is a licensed real estate broker in Michigan and a graduate of the GRA. Upon graduation, he became a mathematician for Proditech, an engineering firm. During his employment, he worked closely with the engineering department of the University of Michigan to develop new optimization algorithms which were later used by Quality Stores, Inc. and a number of other retail chains in their logistics departments. Mr. Heule restructured his first apartment project while still employed at Proditech. Though only 23 units, the project formed the foundation of his hands-on management style. In 1988, Mr. Heule joined forces with his father to start Eenhoorn Investment Management Group, Ltd. Mr. Heule has Profit and Loss responsibility for the entire Eenhoorn Portfolio as well as new acquisitions. Eenhoorn currently owns and operates apartment communities across the United States, collectively representing over 80 entities ranging from a 800,000 square foot mixed use 34 story high-rise in Grand Rapids, Michigan to garden style independent senior housing in Irvine, California, Class A apartments in Atlanta, Georgia, affordable Section 42 Townhomes in Springboro, Ohio and affordable Student Housing in San Marcos, Texas. In 2010, Mr. Heule was appointed by Queen Beatrix of the Netherlands to serve as the Honorary Consul for the Kingdom of the Netherlands in West Michigan. Mr. Heule also serves as president of the Western Michigan chapter of the Myasthenia Gravis Foundation and serves on the boards of several non-profits including the Ada Christian School Board, Cascade Fellowship Church and the Dutch Reformed Translation Society. In his free time, he enjoys spending time with his wife and children along with running, snowboarding and reading. Mr. Heule is also a hobby farmer and beekeeper.
Paulus C. Heule graduated from Calvin College in 1985 with a degree in mathematics and computer science. Mr. Heule is fluent in Dutch and English and has working knowledge of German and French. He is a licensed real estate broker in Michigan and a graduate of the GRA. Upon graduation, he became a mathematician for Proditech, an engineering firm. During his employment, he worked closely with the engineering department of the University of Michigan to develop new optimization algorithms which were later used by Quality Stores, Inc. and a number of other retail chains in their logistics departments. Mr. Heule restructured his first apartment project while still employed at Proditech. Though only 23 units, the project formed the foundation of his hands-on management style. In 1988, Mr. Heule joined forces with his father to start Eenhoorn Investment Management Group, Ltd. Mr. Heule has Profit and Loss responsibility for the entire Eenhoorn Portfolio as well as new acquisitions. Eenhoorn currently owns and operates apartment communities across the United States, collectively representing over 80 entities ranging from a 800,000 square foot mixed use 34 story high-rise in Grand Rapids, Michigan to garden style independent senior housing in Irvine, California, Class A apartments in Atlanta, Georgia, affordable Section 42 Townhomes in Springboro, Ohio and affordable Student Housing in San Marcos, Texas. In 2010, Mr. Heule was appointed by Queen Beatrix of the Netherlands to serve as the Honorary Consul for the Kingdom of the Netherlands in West Michigan. Mr. Heule also serves as president of the Western Michigan chapter of the Myasthenia Gravis Foundation and serves on the boards of several non-profits including the Ada Christian School Board, Cascade Fellowship Church and the Dutch Reformed Translation Society. In his free time, he enjoys spending time with his wife and children along with running, snowboarding and reading. Mr. Heule is also a hobby farmer and beekeeper.

 

if *I* were to develop the quarry…

If you know where the quarry is, or if you’ve EVER been to Rockaway beach – you’ve driven by my house, and maybe parked right out front.  I also could be called an “Out of Town developer”, since I did not grow up here.  However,    I do live here now, for which I feel truly blessed.  I managed to buy a building on Rockaway, with a goal of commercial exploitation of the space – but I will keep on living here, come what may. I love this beach.

Because my building needed *ahem* a little work when I first saw it, and it sits on commercially zoned land (although starting life as a single family residence), I was careful to visit the planning department, pull all the documents regarding the land and the Rockaway Beach special plan, review them carefully, and understand what was possible and allowed.  Most of the Beach is C-1 zoning.  You can look it up, but it boils down to “No residential on the ground floor, residential over commercial is OK.”  It’s not hard to understand, and it’s a very workable plan.

You can see the plan here – by the way, kudos to the city for putting this content on-line and so easy to find.  As you can see, the plan does not  stymie development of the quarry – quite the contrary – but does specify commercial land use. If you recall Rockaway in the eighties -it was funky but cool.  Today, execution of that plan has resulted in a vibe that is just as funky, and much more attractive and tourist friendly, while still managing to improve the city tax base and provide parking at the same time.

My observations, as someone who lives here and observes this daily is that we do get a LOT of tourist traffic in season, and the demographic mix is healthy and fairly well heeled mostly. There is no commercial space available on the beach currently, other than that run down KFC building.  For whatever reasons, the rents have been kept low for the businesses here. I don’t think that is necessarily a good thing, but high occupancy is important in a retail area like Rockaway.

When I moved in, the topics everyone seemed to want to talk about when we would meet on the street is the widening of US 1, and what’s wrong with Pacifica. I was regaled with many tales of failed attempts to develop here.  As someone with a background in sales and marketing, who has lived and worked in Beach towns that were thriving, it blew my mind.  It is a great spot – Rockaway has the closest oceanfront hotels to SFO, beautiful coastside scenery, easy access from US1 (lets not kid ourselves, it doesn’t need to be widened, it needs to be managed), even a stoplight.  Boom, boom, boom. You would have to work at it to screw it up.

Do it like so:   Put up the hotel (I’d do that FIRST) along with the Amphitheater – the one part of the plan I like.  Amphitheater at THAT spot has potential to be a great musical venue – like Mountain Winery in Saratoga or even the Shoreline.  Yes, more traffic again, but it is manageable- Saratoga manages to survive Mountain Winery shows with one lane in and out.

A bit of branding and some effective marketing and now Pacifica has many people driving over the hills at non rush hour times to come to events, maybe spend the night, leave a pile of money behind, and go home.  I would even propose and volunteer to promote a new festival – maybe the “Rockaway Beach Folk and Art Festival” to drive brand awareness.  I can state without reservation that we can get headline talent into a venue with the location and demographic of Rockaway Beach. It just takes promotion.

So, yes to hotels, yes to shops, maybe put a bit of housing over the shops. If residential is needed for funding, I might propose extending Old County Road back to it’s original path and zone that street C-1 throughout. Rents would be higher due to lower density, but in the housing market for the Bay Area today, I would be confident in maintaining a high percentage of occupancy without the infrastructure strain of a high density approach. The same plan without the housing would require no rezoning at all.

If the quarry must be rezoned , C-1 makes more sense for the city and residents.  That is the zoning of the rest of Rockaway.  With this plan it is not strictly necessary,  but it would be in keeping with the argument that the Rockaway plan as put forth HAS worked – the beach not only is generating some tax revenue for the city, but better yet, it is money that out of towners bring in and leave behind. Expand it.  Zone the quarry C-1 to match the rest of Rockaway beach, with the argument that  the quarry is part of the beach, not a separate district.  Sure, you could put housing in, but low density, above the shops, just like on Dondee and Old County Rd.

An extreme version of this might look like Santana Row in San Jose, but limited to other density strictures in the general plan regarding building height and footprint this would address what many seem to think we need – Development to attract business, residential to pay the bills while commercial takes off- and keep density low enough to minimize the impact with regards to traffic. ANY development anywhere is going to increase traffic to that spot – if it will not, there is really no need or motivation to develop it.

A developer could play for the tax breaks by calling the development “low income housing” if he chose to. Low income, oceanfront property is frankly nonsensical in my opinion though, particularly from a city tax revenue point of view. In essence, you are taking land that could be bringing in affluent,  tourist disposable income, which we get to keep after pleasantly separating it from the tourists and sending them home, and instead using it to house people least likely to be able to generate tax revenue, while adding burden to our local infrastructure.  Police and Fire already make up half of the city budget.  Would 200 units of low income housing on a beach add to that burden?  Would the property taxes cover it, particularly with low income tax breaks?? Because the sales tax revenue just drove to Target in San Bruno.

That’s a thumbnail on what *I* would do.  I might also get shot down, given history here, but a plan like that would be a lot better for the city and residents from a  financial standpoint than this rezoning.  A developer with vision could see the potential here, but we seem to be faced with a speculator who has gambled a lot of money that he will be allowed to get away with contravening a long standing successful plan.  My plan is not nearly as lucrative in the short term as hundreds of apartments, but executed well, the long term result would be  a raising of commercial real estate values tremendously for the entire Rockaway beach district and do much more for the city tax base.

But it isn’t my quarry, now is it?

Here We Go Again!

The Rockaway Quarry is once again the focus of a rezoning campaign by an out of town developer. At first glance, this is foolhardy – the town has defeated two nearly identical attempts over the past 15 years.  The plan basically boils down to “We are going to put up an awesome hotel and businesses and stuff in that nasty old quarry – but we cannot pay to do that unless we can put up a few hundred residential units as well. ”
This is not the activity of a “Developer”- this is pure speculation.  The reality is that in the face of the ludicrous housing prices in the bay area, this speculator stands to make a whole lot of money if he can pull that off, and what’s more, he’s not going to have to live in the mess he has created.

With this site I seek to share information as I uncover it regarding this plan and initiative. More to come!