City Council Denies Nic Nak Proposal to Sell Liquor

Tonight, the City Council overturned the Planning Commission's approval and denied the Nic Nak convenience store the ability to sell alcohol. Focusing on the legal requirements for a variance and discounting the Planning Commission's fabrication of "historical relevance" as a basis for granting a major variance, the Council voted 5-3 to uphold the appeal and deny the alcohol sales. Many of the arguments adopted by Councilmembers voting to uphold the appeal were arguments We Fight Blight has articulated over the last year and that were confirmed by the City Attorney in his legal opinion. Councilmembers Brunner, Quan, Nadel, Kernigan, and De La Fuente voted in favor of the appeal. While Councilmembers Brooks, Kaplan and Reid voted to deny the appeal. More details to come later.

City Council Can't Make a Decision on Nic Nak

Tonight, the City Council was unable to make a decision on the Nic Nak Liquor Store. A large number of neighborhood residents appeared before City Council asking the appeal be upheld and liquor sales at 6400 Shattuck be denied. After hearing scores of residents question the use of "historical relevance" as a basis for approving a major variance, expressing concerns about setting a new Citywide precedent, and making personal pleas to deny liquor sales, the City Council voted to break attorney client privilege and allow the City Attorney to provide its legal opinion on whether "historical relevance", a creation of the Planning Commission, could be upheld. In short, the City Attorney stated that if "historical relevance" were presented to the courts as a basis for approving a variance for Nic Nak Liquors it would not be  legally defensible and would be struck down.

Nevertheless, as Oakland politics go, this was not enough for some City Council Members to support the appeal. Both Council President, Jane Brunner, and Pat Kernighan provided thoughtful and well-reasoned rationales for supporting the appeal and the City Attorney's legal opinion. Given that this liquor store is located in Jane Brunner's district, it was anticipated the Council would likely go with Brunner. However, Desley Brooks called for a motion to deny the appeal after an emotional and pointed, although misled, support for Nic Nak. That motion was supported by Desley Brooks, Larry Reid, and Rebecca Kaplan. Jane Brunner, Pat Kernighan, Jean Quan and Nancy Nadel all voted against the motion to deny. There were no abstentions.

Pat Kernighan then moved to support the motion to approve the appeal and deny the liquor sales. That motion was supported by Pat Kernighan, Nancy Nadel, Jean Quan and Jane Brunner. Desley Brooks, Larry Reid and Rebecca Kaplan opposed the motion. There were no abstentions.

In effect, the City Council was unable to make a decision. Apparently a simple majority does not win the day for a motion. A plurality is required. Consequently, the Nic Nak is in limbo. They are unable to sell alcohol as they have no approval for a major variance. For those supporting the appeal, this is not an altogether bad outcome. The City will have to figure out the next procedural step which could include bringing Nic Nak back for a full vote before the Council. Since Ignacio DeLaFuente was absent, his vote could be the determining factor in this case. When this comes back to City Council is anyone's guess. Apparently, this circumstance is quite unusual.

Other unusual or bizarre moments in the hearing included the fact the Pannell's and their supporters did not seem to understand the critical legal issues at hand. The Nic Nak representatives provided rambling and sometimes incoherent and disjointed presentations that failed to address how they satisfied the legal findings for a variance. At one point, President Brunner asked Mr. Pannell's daughter if they had an attorney who could step in and speak before their time was up. The Nic Nak's attorney, Mr. Hiawatha, stepped in and was even more off-point and incoherent, despite the fact that they were given additional time not afforded the appellants.

If you recall, the Pannell's previously had Clinton Killian (perennial Council hopeful, and current candidate for Jean Quan's seat) as their legal representative, but dismissed him in favor of family friend and attorney, Mr. Hiawatha. Most supporters for the Nic Nak were emotional, but failed to speak to the relevant legal or policy issues. Many were timed out and unable to finish their presentations. This seemed to be emblematic of the changes that are occurring in North Oakland.

During the course of the hearing one supporter of the appeal made a reference to approval of the Nic Nak opening the door to allowing other non-conforming uses under the "historical relevance" rationale. They used a massage parlor in Piedmont as an example. This elicited widespread laughter frrom the audience. Yet, one supporter of the Nic Nak took umbrage to this and made intimidating verbal and physical gestures to residents supporting the appeal. An Oakland police officer had to step in and address this individual. At the conclusion of the hearing, some supporters of the appeal were concerned enough to ask the City Council President, Jane Brunner,  for a police escort upon leaving the chambers.

What is certain in all of this is that Mayoral hopeful, Rebecca Kaplan, has lost a tremendous amount of cache in North Oakland. While her progressive politics and her focus on attracting business in Oakland plays well to many North Oakland voters, her naive and obvious pandering to Geoffrey Pete and African American votes by supporting the Nic Nak may have misfired quite badly. Many North Oakland residents were sadly disappointed and outraged by her lack of leadership. In fact, Kaplan failed to provide any rationale for her vote and was totally silent when an opportunity came to discuss the matter, yet voted to support the Nic Nak's ability to sell liquor despite the City Attorney's legal opinion stating it was not legally defensible. This is similar to her deafening silence on the City Attorney, John Russo's, injunction on the Northside Gang in North Oakland which is strongly supported by Chief Batts ( Gang Injunction). Despite requests to clarify her position on the injunction, Kaplan has been silent. Is this the type of Mayor we want? Despite her degree from MIT, her MA in urban and environmental policy from Tufts and her JD from Stanford, she doesn't seem to understand basic land use law, or at least is willing to disregard it for votes from the African American community. Come on Ms. Kaplan! We expect and want more from our our elected officials who are here to represent all of Oakland. We are disappointed, to say the least.

Desley Brooks and Larry Reid were expected to provide some support for Nic Nak given their polictical constituencies. While we disagree with Desley Brooks' position, we have to give her credit for making a spirited defense of Nic Nak, something that Rebecca Kaplan failed utterly to do. That's leadership. Rebecca Kaplan's apparent lack of understanding of how this issue plays out throughout Oakland is astonishing, given her role as the at-large City Council Member. North Oakland residents will not forget this at election time and will make sure others in the city understand her role in attempting to weaken the deemed approved status for non-conforming liquor sales and opening the door for other non-conforming land uses for her personal gain. 

This matter is not over. Both the City Planning Staff and the City Attorney are now on record stating the use of "historical relevance" is not defensible and has no basis in the Oakland Planning Code--something we have been stating from day one. This is a sheer fabrication of Planning Comissioners, Doug Boxer and Anne E. Mudge, the two Planning Commissioners who originally led the charge to approve liquor sales at 6400 Shattuck. For Anne E. Mudge, a respected land use attorney, this has to be a professional setback that her future clients must question. For Doug Boxer, the son of Barbara Boxer and a political hopeful, one has to question his judgment and his ability to wade through tough legal issues.

If the City ultimately approves the liquor sales at Nic Nak, the matter will most certainly end up in court. The City will spend limited tax dollars and staff resources defending a liquor store, resources that could and should be used for public safety and other core public services.  Yes, that is Oakland for you. We will take away resources from public safety to defend a liquor store.... a liquor store the Planning Staff, the City Attorney and scores of residents all agree should not be approved. Core priorities?

Oakland--First World Taxes, Third World Services

The Oakland Tribune recently reported that due to the city's "truly unprecedented" financial crisis, the City Council may be placing both a parcel tax and a utility tax on the November ballot to generate more revenue ( New Oakland tax measures.). The City of Oakland already has some of the highest combined taxes in the west. Overall, the city's annual budget for FY 2009-11 is approximately $1.1. billion dollars (Oakland City Budget). Yet,  the city is unable to use existing revenues to balance our budget and maintain infrastructure and wants more money from residents. Its hard to imagine how overtaxed middle class residents are going to be willing to fork over even more taxes when most feel they don't get their money's worth to begin with.

City Councilmembers and the City Administrator, Dan Lindheim, suggest the budget problem is due strictly to the dire state of the economy. There is no doubt revenues across the board are down. While all local governments in the State of California face the same problems of reduced tax revenues due to the poor economy, not all all share the same massive budget problems as Oakland. In the City of Oakland, Councilmembers and the City Administrator alike are framing the budget quandary to force residents to pony up more tax revenues--give us more money or we will cut core police and fire services. Certainly, there is more to this story than the poor economy.

The City Council's recent demand for more revenues is largely a scare tactic to cover up the mismanagement and lack of leadership among the City Council, the mayor and the City Administrator. Their rationale for new taxes is that a good share of the city's budget is consumed by voter mandated programs, such as Kids First OO and Measure D, Measure Q for libraries, and Measure Y for Violence Prevention and Public Safety, and because they have already cut other programs to the bone, they need more revenue from John Q. Public or they will be forced to cut police and fire which make up the majority of the General Purpose Fund. If police and fire are not to be cut, they proclaim a need to eliminate wholesale senior citizen services, libraries and parks.

Of the approximately $1 billion of revenue, approximately $421 million is the General Purpose Fund budget. Of that $421 million approximately 88%, or $369 million, is mandated for certain programs. This of course all depends where you pull the numbers. (Oakland Budget Office) (Balancing Measures FY 2009-10 Budget Shortfalls) (Oakland City Budget Facts). Of course there are alternatives to additional taxes including repealing all voter mandated programs or suspending them to allow discretion in re-directing revenues to provide core city services like police and fire. These measures would have to be taken to the electorate in the form of ballot measures not unlike new taxes. However, that tough solution seems to have eluded City Council, the Mayor and the City Administrator.

Nevertheless, what is being ignored here is any discussion on the mismanagement of city finances and the lack of leadership among City Councilmembers, the Mayor and the City Adminstrator. As early as July 2008, concerns were being expressed about the revenue projections of former City Administrator Deborah Edgerly that relied on rising property tax and transfer tax revenues at a time when the economy was tanking. In 2008 the City Administrator and City Council also were drawing down the City reserves from $70 million to $15 million. Despite furloughs, elimination of vacant positions, and other budgetary measures, the then $15 million dollar deficit eventually ballooned to approximately $114 million (cumulatively). This was largely because City Councilmembers, the Mayor and the City Administrator failed to make realistic revenue projections and failed to act swiftly enough and cut deeply enough to stem this massive budget deficit.

Why neither Councilmember Jean Quan, as the Chair of the Finance Committee, or Dan Lindheim as the City Administrator have been able to get a handle on revenue projections and their relationship to the budget deficit is a mystery. Budgets involve revenues and expenditures. If revenues are going down, expenditures must follow at an equal or greater rate or you generate a deficit. 

Another glaring lack of leadership revolved around the Kids First debacle. When the voter approved Kids First Measure OO went back on the ballot for a second time as Measure D seeking even a greater piece of the budget pie, every City Councilmember knew that the program was a budget buster. At that point, the City was projected to be $50 million in debt. Yet, none of the City Councilmembers, including Jean Quan who is now running for Mayor, took an active leadership role to campaign against the Kids First revenue grab. They all saw that train wreck coming, but did nothing to repeal Measure OO altogether. In fact Jean Quan actively negotiated a compromise that put Measure D on the ballot and guaranteed Kids First a significant slice of the City budget, albeit at a lower rate than Kids First originally sought. She then spun it as a budget saving measure and a necessary compromise at a time when the city finances were in disarray and going downhill fast.

On another front, the city has allowed tax dollars to be spent on sending staff to attend Eskimo yo-yo making classes in Alaska and other excessive out of state travel that occured in 2007-2008 as revealed by the Alameda County civil grand jury (Frequent Flying Staff). All the while, Mayor Dellums continues to spend extravagant amounts on his Washington expense account for top five star hotels, exclusive restaurants, limousine service and a chauffeur (Ron Dellums Living Large). Ironically in a September 27, 2008 SF Gate article, Chris Heredia quoted Mayor Dellums in response to our budget woes as saying that "At the end of our review, we came to the conclusion: Oakland is living beyond its means. As mayor, my job is to speak the truth, as painful as it is". It is certainly true that some have been living large at the public trough, including our Mayor. Yet our City Administrator Dan Lindheim and Councilmember Jean Quan routinely dismiss such boondoggles as being so small they are irrelevant to the overall budget problem.

On still another front, the City Auditor has refused to take a 15% budget cut that other politically elected officeholders agreed to. It's no wonder the city's budget deficit seems to grow and grow and grow.

Now that the city has dug itself a huge budget hole, we have to wonder why City Councilmembers and the City Administrator Dan Lindheim have chosen to frame the budget problem as one of raising more revenue through additional parcel taxes, rather than one of repealing voter mandated measures, such as Kids First, to allow greater discretion in the use of all existing revenues so that core city services, such as public safety, can be maintained. Oakland has first world taxes, but third world services. The problem is lack of leadership and an unwillingness to tackle the real problem--voter mandated spending, mismanagement of existing revenue and a failure to set core priorities. City Councilmembers are unwilling to discuss repealing Kids First because it is like the third rail of politics in liberal Oakland.

Meanwhile, our public infrastructure seems to be crumbling before our very eyes and has a direct effect on reducing the volume of taxes we collect. The city uses very little of its discretionary budget to maintain infrastructure such as roads and sidewalks. The paving cycle in the City of Oakland is 80 plus years. That's right, the city streets get paved once every 80 years or so. Maintenance of infrastructure, such as roads and sidewalks, is commonly viewed in the United States as a core local government service, as are police and fire. In the City of Oakland they are not. The city relies on state and federal tax dollars to repave city streets. This money, which is subject to state and federal budgetary issues, is largely metered through the Metropolitan Transportation Commission.

Roads that are full of potholes and sidewalks that are significantly deteriorated have a direct affect on the city's ability to maintain and generate a higher volume of tax revenues. If our basic infrastructures is falling apart and creates blighted conditions, it signals to others the poor state of our local economy, the poor health of our local government, and the inability of the city to maintain core services. These conditions, on top of already high tax rates and high crime rates result in fewer people interested in locating in Oakland, fewer businesses willing to operate in Oakland, and fewer people interested in recreating and shopping in Oakland. This means lower demand for housing which results in lower home prices and lower property tax revenues and transfer tax revenues. This also means lower business taxes, hotel taxes and sales taxes because the lower overall volume of businesses and shoppers. Think of all those people flocking to San Francisco, Walnut Creek, and Corte Madera for their safe, clean, pothole free shopping experience. Oakland is one of the lowest sales tax generators in the Bay Area. Ever wonder why?

In North Oakland, residents have been complaining to the Public Works Department and for the past year about the poor state of Shattuck Avenue between the Berkeley border and 55th Street and torn up sidwalks on Tremont Street. The City Public Works Department has made several half-hearted efforts to fill some potholes and to put asphalt over concrete sidewalks. Still Shattuck is rapidly deteriorating and has numerous potholes that are a safety hazard to bicyclists and motorists and the deteriorated sidewalks on Tremont Street have already caused one serious injury. Frustrated residents have even taken it upon themselves to mark numerous potholes with spray-paint on Shattuck between Alcatraz and 65th Street, as a warning to motorists and bicyclists. The city cannot provide basic core services such as filling potholes and fixing deteriorated sidewalks that are safety hazards, yet they want more money. Interestingly, as part of the proposed budget solution the city will reduce the street and sidewalk maintenance program by eliminating five vacant staff positions in the Public Works Agency. This reduces the number of concrete grinding crews from three to one for the entire city.

To the City Council and the City Adminstrator here are our recommendations to address the budget crisis:

1. Place measures on the November ballot to repeal all voter mandated programs, including Measure OO/D Kids First, Measure Q and Measure Y. This is necessary to restore discretion in our budget process. We have enough existing revenues to provide core city services. We are just being forced to use them in ways that do not meet core objectives such as public safety and maintenance of infrastructure;
2. Develop a prioritization of core city services with a focus on public safety, infrastructure, and revenue generating enterprises. A safer, cleaner and better maintained city will attract middle and higher income residents and shoppers to Oakland, thereby, generating more tax revenue. We need to increase the volume of taxes not by taxing the middle class out of Oakland, but by growing businesses and attracting new residents;
3. Stop using a budget process that mandates across the board cuts equally. Not all services are equal and not all services are necessary in times of budgetary crisis. Whole programs should be cut if they do not fall within the core services provided by local government. Cut all other city services that do not meet the descriptions identified in number 2. We cannot continue to be all things to all people during a budgetary crisis;
4. Personnel expenditures are the single biggest cost in the city. City employees have some of the highest salaries in the state and country for comparable sized cities. Require all remaining staff to take a 20% furlough and eventually renegotiate 15-20% permanent reductions in pay scales and freeze any cost of living adjustments for the next four years when union contracts are due.
5. Re-negotiate benefit packages when the union contracts are due to create a second tier retirement program for new staff that is no higher than 2% at 55, requires an 8 year vesting time period and requires existing staff to pay an additional 5% towards their retirement benefits;
6. Institute pay for performance measures to ensure taxpayers actually get their money's worth from city employees. This would include courteous and prompt service to all city residents. Fire employees who do not perform to well-defined metrics. This will create incentives for all employees to better perform their assigned job duties.
7. Require that all elected offices take a 20% funding cut. Yes, this even includes the City Auditor.
8. Establish strict guidelines and protocols for travel and training that applies to all city staff and all elected officials. This policy should mirror the per diems the state of California has adopted including strict controls on out of state travel.
9. Require the City establish a rainy day account for future economic crises.

Oh, and stop ignoring the residents' complaints and fill the potholes on Shattuck Avenue and fix the sidewalks on Tremont Street before someone gets seriously hurt, sues the City and makes our budget deficit even larger.

Update on Nic Nak Liquors and the Appeal to City Council

In a large outpouring of support against the approval of the Nic Nak Liquor Store, the North Oakland Community raised the filing fee to appeal the Planning Commission's approval of the Nic Nak Liquor Store. Community members banded together donations ranging from ten to one-hundred dollars. In this down economy, that is a significant indication of how much the North Oakland Community does not want to see another liquor store in its midst. A 37 page appeal detailing the faulty decision of the Planning Commission and the inadequacy of their findings was submitted to the Planning Department. The Planning Department has been preparing a response to the appeal and discussing the legal ramifications with the City Attorney's Office. It is likely the appeal may be heard in January after the holiday season.

In the meatime, the Nic Nak Liquors is precluded from selling any liquor until the matter is decided by the City Council. Jane Brunner, the City Council President and represenative for North Oakland will play a key role in determining whether the Nic Nak Liquor Store can peddle liquor in the already over-saturated liquor market.

Interestingly, We Fight Blight missed another liquor outlet in North Oakland at the corner of Alatraz and College. The approval of Nic Nak would actually result in 20 liquor outlouts within a mile of 6400 Shattuck Avenue, rather than the 19 previously reported. Regardless, the fact is that North Oakland and South Berkeley are plagued with problem liquor outlets. Adding one more liquor store does little to support economic revitalization. One area of interest is that homes in the North Oakland neighborhoods near Nic Nak have been selling quite briskly, indicating a high demand for the area. Unfortunately, Nic Nak Liquors represents a foregone way of life that is no longer supported by the North Oakland Community. Mr. Pannell would do well to reconsider his market and provide a product the community truly wants.

On another note of interest, we understand that Mr. Pannell has released Clinton Killian as his legal representative on the project. A former Planning Commissioner, Mr. Killian has had a checkered past. An expose in the East Bay Weekly during the last City Council election, where Mr. Killian was running for the at-large City Council seat now occupied by Rebecca Kaplan, revealed that Clinton Killian had significant legal and financial problems including unpaid bills and allegations of sexual harrasment. It is unclear whether Mr. Pannell dumped Mr. Killian because of his baggage or whether Mr. Pannell simply does not have the financial resources to keep him on the payroll. In any event, Mr. Killian is out.