Newell Court Housing Deal Fails 2-1 as O'Keefe Compromise Advances

East Palo Alto's City Council split its verdicts on Sand Hill Property Company's two Woodland Park redevelopment proposals in a session that ran past midnight on Nov. 10, 2026. The Newell Court alternative failed for lack of a third vote. Hours later, with the Mayor recused, members passed a tougher affordability package for the O'Keefe-Manhattan site by voice vote.

---

• Newell Court alternative fails 2-1, leaving the existing inclusionary rules in place ahead of a Jan. 7, 2027 state deadline.
• O'Keefe-Manhattan compromise passes: 172 rentals, half at 50% AMI rents and half at 60%, deed-restricted in perpetuity.
• Code enforcement cases hit 508 last year, up from 130-160 annually, as staff seek software and a hearing officer.
• Three-vote rule stays after a heated debate over notice, power and attendance.
• Residents press for Councilmember Mark Dinan's recusal and report flooded units at East O'Keeffe buildings.

---

Newell Court: A Compromise Without a Third Vote

The basics: The city's inclusionary housing ordinance (IHO) sets affordable-unit requirements for new development. Sand Hill asked council to accept an "alternative compliance" package as an equal or greater public benefit. AMI means area median income.

Why it matters: The 766-unit project at 1-9 Newell Court would replace 144 rent-stabilized apartments. Without three affirmative votes, the alternative died and the project returns under existing inclusionary rules, with the state clock running.

Where things stand: Housing Project Manager Yajaira Morales said the item was continued from the Oct. 20 meeting, when council requested more information from the applicant. The revised offer included 119 deed-restricted rentals, capped at 80% AMI with rents set at 60% AMI, and five for-sale townhomes at 120% AMI. That is down from 124 rentals. The package also included 4,100 square feet of commercial space with right of return, comparable bedroom counts and dispersed units.

Staff recommended approval and asked council to choose between Option A, deed-restricted replacement units for above-low-income tenants, and Option B, replacement under the city's rent stabilization ordinance. Alex Waggoner, a Heart of San Mateo consultant providing housing staff support, said state law requires the city to act on the project by Jan. 7, 2027. Special counsel said the application had been deemed complete and that state law measures equivalent unit size by bedroom count.

Mayor Webster Lincoln moved Option A for 55 years. His motion also directed staff to recommend Planning Commission conditions on the retail right of return, submission of tenant income data before building permits, inclusionary units on top of replacement units, and right of return at current rents for households above 80% AMI.

"I believe it kind of does provide greater public benefit for several reasons," said Lincoln.

Councilmember Mark Dinan cited housing supply and the risk of a builder's remedy, a state provision that can let projects bypass local zoning. "I support this compromise," he said.

The other side: Councilmember Carlos Romero challenged the absence of a tenant income survey and a developer pro forma. He also questioned the city's reliance on federal CHAS data, which presumes about 79% of renters earn at or below 80% AMI, and the use of bedroom count rather than square footage. He raised concerns about how rent increases would be regulated.

Public comment ran heavily against the proposal:

• Luis Rosas urged preserving deeply affordable units, fining Sand Hill instead, and warned that 80% AMI deed restrictions would be permanent.
• Alicia said 80% AMI is about $117,000, beyond what current residents can pay.
• Esmeralda Abrego, a 20-year resident of 430 East O'Keeffe who works three jobs, asked council not to take her housing away.
• Sean Ripley asked for Sand Hill's pro forma and binding commitments with penalties.
• Khalifa Windham noted that EPA Can Do received only five applicants for a below-market unit.

Small businesses also weighed in. Griselda, speaking for Three Brothers Tacos, asked council to preserve the restaurant or provide nearby relocation and support. Manpreet Singh, the 7-Eleven owner, said the project threatens both his business and his housing.

Supporters spoke too. Teresa Morales, Woodland Park's community engagement director, said tenants want new homes. Vanessa Rivera read a tenant leader's letter urging adoption.

Francisca Guzman, Angel and Crystal asked Dinan to recuse himself. Some speakers alleged undisclosed developer contacts, which are allegations, not findings. "I have had lots of communication with Woodland Park," Dinan said, describing those contacts as being about getting housing built. He did not recuse.

Decisions and stakeholder impacts: Council first voted 3-0 to extend the meeting past midnight. The resolution then failed.

• For: 2 (Lincoln, Dinan)
• Against: 1 (Romero)
• Recused: 1 (Vice Mayor Ruben Abrica)
• Absent: 1 (Councilmember Martha Barragan)

Current tenants keep their existing protections for now. Sand Hill loses a negotiated path through the IHO.

What's next: Romero floated a 50% AMI deal and a Dec. 8 revisit. The developer was not present to accept.

---

O'Keefe-Manhattan: Deeper Affordability, Uncertain Buy-In

Why it matters: The 300 O'Keefe Street project would demolish 344 rent-stabilized units. The approved terms set the affordability floor for 172 replacement units, but they still need developer acceptance and Planning Commission action.

Where things stand: Lincoln recused himself. "My real property is located at 453 East O'Keeffe Street, within 500 feet of the project," said Lincoln. Vice Mayor Abrica chaired, and there was no staff presentation.

Romero opened by pushing for 50% AMI rents in perpetuity. He settled on a split: half of the 172 units at 50% AMI rents and half at 60%, using Option A. The deal relies on CHAS data while requesting an income survey now. Members discussed rent-increase caps, with 4% floated. By comparison, the statewide cap under AB 1482 is CPI plus 5%.

The other side: Dinan argued the terms would make the project unprofitable but agreed to vote.

Public speakers wanted more. Khalifa Windham said the alternative deletes the 35% and 50% AMI tiers and cuts homeownership units, and he proposed project-based Section 8 and HUD-VASH vouchers. Robert Fisk asked for unit-by-unit data. Griselda asked what written protections exist for Three Brothers Tacos and 7-Eleven. Rovniel asked council to postpone the item and renewed demands that Dinan recuse.

Decisions and stakeholder impacts: The motion carried by voice vote, with the Mayor recused. No tally was stated. Members also agreed to separately advise the Planning Commission on a business right of return.

Staff noted that without approval, the existing IHO requirements would apply, including a 20% set-aside. Lower-income tenants would gain deeper, permanent affordability if Sand Hill accepts the terms, which the record does not show.

What's next: The Planning Commission acts next, and Sand Hill's response is pending.

---

Code Enforcement Caseload Triples

Why it matters: Council is split on whether to pursue fences and paved yards or to focus on slumlord conditions. That choice will shape next year's enforcement policy.

Where things stand: Chief Building Official Don Jepson reported that cases rose from 130-160 a year to 508 last year. He described trouble with Tier 3 violations, such as paved front yards and fences over four feet.

Jepson requested "a new software dedicated for code enforcement. It runs about $15,000 a year," along with a hearing officer. He also said $150,000 in third-party funding is running out.

"$15,000 or whatever it is, that's nothing compared to hiring an additional staff member," said Lincoln, who also backed annual walk audits.

The other side: Other members urged prioritizing blight and landlord violations and suggested Tier 3 enforcement be complaint-based. Members also called for a study session on multi-unit housing enforcement.

Public speakers split:

• Rovniel and Luis Rosas urged hiring local staff over buying technology.
• Marielena Gaona asked why single-family homes are targeted while Sand Hill apartments deteriorate.
• Gail Dixon said she photographed 34-35 houses in the Gardens with violations.
• Khalifa Windham supported the software.

Decisions and stakeholder impacts: Tenants put a face on the debate. Luis Rosas said 340 East O'Keefe flooded Oct. 26 during roof repairs, sending tenants to hotels. Edward Simpson, a 430 East O'Keeffe tenant, said he was still charged rent during the relocation and lacked breakfast. Lincoln said roof work was underway and that he had spoken with residents and the owner. No vote was taken on the update.

What's next: Staff will weigh the software and hearing officer requests. A related item was requested for Nov. 17.

---

Three-Vote Rule Survives Heated Debate

Why it matters: The rule decides whether a 2-1 majority can act when only three members attend.

Where things stand: City Clerk James Cullen explained that an Oct. 6 proclamation passed 2-1 with three members present but still failed. "The proclamation did not pass because our municipal code requires at least 3 affirmative votes for any council action to be approved," Cullen said. State law requires three votes for ordinances, resolutions and payment orders, but may allow a majority of a quorum for other actions.

"I want to bring it back so that we can have a full discussion and get clarification on how our municipal code aligns with state law," said Lincoln. He cited confusion over the University Avenue pilot and attendance issues.

The other side: Romero said the item was inadequately described on the agenda and called it a power grab. Dinan and Abrica favored keeping the three-vote rule. Lincoln initially declined public comment, then relented.

Most speakers opposed the change. Sean Ripley called it a reaction to a single incident and said attendance is the real issue. Gail Dixon defended the Mayor's right to bring the item.

Decisions and stakeholder impacts: No formal vote was taken. Staff understood council's direction was not to bring the item back.

---

Minor Items

• Youth Commission launches: Eight youth begin one-year terms with stipends. "I am very excited to introduce what has been 43 years in the making, our first ever Youth Commission," said Community Services Manager Maurice Baker.
• Lighting study: General Lighting Services' study is due in December, with construction bids planned for May 2027. Staff said PG&E is deferring about $2 billion of work in 2027.
• Daylighting: Signs under AB 413 will go up at high-injury and school intersections in the first half of 2027, with warnings before citations.
• Consent calendar: Council approved $4.5M in Cycle 8 pedestrian and bicycle grant applications, SAFER Bay contract extensions to 2031, and a Ghirardelli contract amendment.
• Proclamation: Council declared November Lung Cancer Awareness Month after remarks from Fatima Osmani of the American Lung Cancer Screening Initiative.

---

Looking Ahead

MLK Jr. Park field-light environmental review (CEQA) comes to council Dec. 15. Staff are arranging a PG&E appearance before council. A new council is seated in December, with Newell Court's Jan. 7, 2027 deadline looming.