Upfront
Newsmakers ’09
lawsuits between Page Mill and the city and conclude the city’s long and bitter battle over rent control. N — Gennady Sheyner
(continued from page 7)
Page Mill Properties’ EPA operation raises rents, gets sued, implodes
T
he war between Page Mill Properties and its tenants in East Palo Alto hit two key turning points in September. First,
Numbers say it all for Palo Alto-based Facebook
P
Martin Yonke, left, Diane Sekimura, Kim Fletcher and Brandon Baum, who won a compromise to preserve Edgewood Plaza’s Eichler architecture, stand in front of the former Papasitos Restaurant. a San Mateo County judge barred the Palo Alto-based property management firm from raising rents at its apartment complexes in East Palo Alto. Then, a week later, the company briefly abandoned the East Palo Alto apartments, leaving trash cans overflowing, fire alarms malfunctioning and residents wondering what to do with their rent checks. When the dust settled, the situation looked bleak for the largest landlord in East Palo Alto. After months of raising rents (in some cases by more than 50 percent), suing East Palo Alto and lobbying San Mateo County officials to break off the Woodland Park neighborhood from the city’s sphere of influence, the company found itself on the defensive and struggling to pay its bills. By the second half of the year, the company that East Palo Alto officials had long accused of “predatory� tactics now found itself prey
International School of the Peninsula
to the Great Recession. In August, Page Mill missed a $50 million payment to Wells Fargo Bank. A judge then upheld an injunction by tenants against Page Mill, barring the company from “collecting or enforcing any rent increases� at its properties. The Palo Alto Police Department even got involved: It hired a private investigator to look into Page Mill’s hiring of a Palo Alto officer to moonlight as its security consultant. That investigation is ongoing. Page Mill’s financial woes hit their climax in September, when the company was forced to cede control of its 1,700-plus units to a court-appointed receiver, Wald Realty Advisors. Now, as the company’s apartments slog toward foreclosure, tenants are anxiously waiting to see what will happen to the properties. Meanwhile, East Palo Alto officials and Wald Realty are contemplating a deal that would settle the ongoing
alo Alto social networking giant Facebook’s leadership in 2009 perhaps can be best quantified in lay terms by its move to Stanford Research Park from its 10 downtown Palo Alto offices. The exponentially growing company moved most of its then-800 employees to the research park in May. The company moved into the former 132,780-square-foot Agilent facility at 1601 S. California Ave., which can hold a maximum 1,446 employees. Facebook says it now has about 1,000 employees. The company’s phenomenal growth led it to rent an additional 265,000 square feet in December
(continued on page 11)
Veronica weber
Fiscal crisis of the year
Company of the year
Veronica weber
ties) and 86 homes in Tract 1641 in 1956. They are bound by a “Declaration of Restrictions, Conditions, Covenants, Changes and Agreements� (CC&Rs). Such declarations can restrict changes or uses of properties. The CC&Rs limit residences to onestory detached homes and restrict two Edgewood Plaza lots for retail, restaurant, office and similar commercial uses. The declaration requires that construction plans must be approved by a three-person Architectural Control Committee, plaintiffs said. Committee members and Sand Hill reached a settlement Oct. 29. The settlement could clear the way for redevelopment of the dilapidated, 53-year-old shopping plaza, whose future has long been under contention. The agreement includes reducing the number of new homes to 10, adding a 10,400-square-foot (0.25 acre) public space and preservation of two original Eichler retail buildings and a grocery-store building. Neighborhood leaders and most residents have expressed satisfaction with the outcome at public meetings. “We were really fortunate to have the legal backup of the CC&Rs to help level the playing field. In negotiations with a powerful developer, you have to have some place to stand,� Sekimura said. N — Sue Dremann
in the research park, at 1050 Page Mill Road. Spokesman Larry Yu said Facebook went from 150 million users in January to 350 million by early December. And officials expect even more explosive growth in the near future. The company implemented Facebook Connect in December 2008, a viral sharing loop that allows 60 million users every month to visit, comment, rate and share websites with others. So far about 80,000 websites have used the tool, including many businesses, he said. Facebook scored $200 million in investment funds in May from Digital Sky Technologies, its first big financial injection since 2007. In October, Facebook was awarded a $711 million judgment against a prolific spammer, a coup that would keep others from abusing the site, Yu said. The company “didn’t expect the level of consternation� to changes
Ashoke Chakrabarti, left, and fellow members of the User Operations team at Facebook work at their new office on South California Avenue in December.
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