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City releases First & Main memo

The city of Los Altos Nov. 30 released an internal memo by a former city employee over developer interest in the city-owned First and Main streets property.

In a statement, the city noted that it released the memo to eliminate “an unnecessary distraction for the newly-elected Los Altos City Councilmembers,” who are slated to be sworn in today.

A PDF copy of the memo and the city's statement have been posted on the city's website, www.losaltosca.gov/pr.html.

The city previously declined to release the memo following a public records request by downtown property owner Kim Cranston in July 2011. Cranston, in turn, filed a lawsuit against the city in May seeking the release of the memo.

The city declined to release the memo on the grounds of deliberative process, according to the statement, “due to concerns that doing so would reflect poorly on a former employee, and would also have a chilling effect on robust City staff debate on internal, pre-decisional, strategic, legal and administrative issues, which increases the quality of City executive decisions.”

The draft memo "was written by a junior staff member who is no longer employed by the City,” the city’s statement continued. “The draft memo, which is now posted on the City’s website … discusses the sale of the City-owned property located at the corner of First and Main Streets, and presents the junior staff member’s opinion that the City should entertain additional proposals. However, the junior staff member did not participate in Council closed sessions in which these issues were discussed with senior City staff members and the City Attorney, and the draft memo contains many factual omissions and inaccuracies.”

The Feb. 14, 2010 memo, written by then-Economic Development Manager Anne Stedler to Assistant City Manager James Walgren and then-City manager Doug Schmitz, came after developer Jeffrey Morris had already expressed interest in developing the property following an unsuccessful 2008 Request for Proposal (RFP) process, the city’s statement noted.

Among other things, Stedler suggested in the memo the need for a third Request for Proposal (RFP) after an unnamed developer expressed interest in the property as well. Stedler noted that the unnamed developer – referred to in the memo as “ND” – expressed interest in purchasing and developing the property with the “caveat that their project would involve the relocation of Safeway.” The memo identifies “ND” as a developer who at the time was in negotiations for the Cottage Green site on First Street, among other details.

The city later finalized an agreement with Morris following a weeklong postponement “to allow the new, unnamed developer an opportunity to come forward,” but failed to do so within that time period and during subsequent public input opportunities at city council meetings in February and September of 2010, the statement read. The city council later approved Morris’ proposed project in September of this year.

The city’s statement also addressed allegations that the sale of the property to Morris was illegal, noting that it engaged the services of an outside law firm to seek an unbiased opinion about the legality of the sale by not issuing another RFP.

“The total cost to obtain that opinion was $25,698,” the statement read. “Once the opinion was received it was made public and is now posted on the City’s website … it found that the sale was legal and followed best practices.”

Finally, the statement noted that the city spent approximately $15,000 to prevent the release of the memo, instead of the $30,000 previously reported by various publications.

For more on this story, read the Dec. 5 edition of the Los Altos Town Crier.

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