As September wound down, Palo Alto City Council candidate Lydia Kou's campaign had plenty of endorsements but not a lot of cash.
Kou, a longtime neighborhood activist who in July declared her candidacy, had received nearly $17,000 in contributions by Sept. 24, according to her financial disclosure forms. Despite enthusiastic support from the city's slow-growth "residentialists," including contributions from council members Tom DuBois and Eric Filseth and from Cheryl Lillienstein, president of the grassroots group Palo Altans for Sensible Zoning (PASZ), Kou found herself in the middle of the pack in terms of campaign cash.
Then came an October surprise: a sequence of large checks, each totaling $6,000 or more, that collectively pushed her total contributions received to more than $40,000. Additional checks arrived at the end of last week, leaving Kou with a war chest of $78,537.
Arthur Keller, a former planning commissioner who is also popular with the limited-development crowd, did somewhat better than Kou by the end of September, with contributions of slightly more than $24,000. But both he and Kou lagged far behind fellow candidate and planning commissioner Greg Tanaka and council incumbent Liz Kniss, who each had more than $45,000 in their war chests, along with endorsements from the Democratic Party and the council's moderate members.
But like Kou, Keller found his fortunes shift for the better in the first two weeks of this month. A series of contributions, ranging from $2,100 to $6,500, pumped nearly $60,000 into his campaign, raising his total to $84,000, far more than anyone else.
Keller and Kou say the contributions were unexpected. Kou said she knows donor Gabrielle Layton, a Downtown North resident who supported Kou's bid for council in 2014 and more recently served on a committee that crafted downtown's new Residential Preferential Parking program. The other contributions, Kou said, came as a "surprise" in that she has never talked to the donors.
The contributors include venture capitalist Tench Coxe and nonprofit executive Simone Coxe, who between them gave $12,000 to Keller and $12,900 to Kou (they had also made smaller contributions earlier in the year). Gabrielle and Thomas Layton gave $12,500 to each candidate; Helyn MacLean, whose husband Asher Waldfogel serves on the city's Planning and Transportation Commission, likewise gave $12,500 to Kou and $12,500 to Keller. Rounding out the list of the major donors are G. Leonard and Mary Anne Baker; and Michael and Paula Rantz.
The total contributions by these donors to the Kou and Keller campaigns, as well as to the PASZ political action committee, added up to $162,000 as of Oct. 19.
Keller wasn't as surprised as Kou when the funds began arriving. Donors had contacted him, he told the Weekly, to offer their help. Keller said the donors alluded to the fact that four other council candidates -- Adrian Fine, Liz Kniss, Don McDougall and Greg Tanaka -- had just won the blessing (if not the outright endorsement) of the Chamber of Commerce, which emailed members encouraging their support of the quartet.
"They did contact me and indicated their desire to help my campaign and Lydia's campaign by making these donations so that we could better compete with the Chamber of Commerce-endorsed candidates," Keller said. "I figured we can use the help."
Keller said he has not had any conversations with the donors about any specific issues and noted that they did not ask for anything in exchange for their donations. Kou said the same. The donors indicated that they want Keller and Kou to "continue along the policies that they know we've espoused for some time," Keller said.
"They know that, in my case, I've been scrutinizing developments carefully and that I do understand issues of development," Keller said.
Donor Tench Coxe concurred. He told the Weekly that he and wife Simone decided to support Kou and Keller "because we believed they best represented our goals of intelligent growth for Palo Alto."
He said he is particularly frustrated by the city's lack of planning on traffic and parking management, as well as by the city's "lack of willingness to speak about what a bullet-train corridor would mean."
"I am not anti-growth, but I believe we should have a traffic and parking plan (first) and then a plan for low-income housing," Coxe said in an email.
The couple's donations to the two campaigns are so sizable, he said, because "we perceive the developers to be spending a lot of money (on other candidates) and not to have the best interests of the city in their focus." He stressed that he and Simone have "absolutely not asked either candidate for anything in return for our support."
Others offered similar reasons. Waldfogel -- who made a $500 donation to Keller and a $100 to Kniss in September, but no major contribution this month -- told the Weekly that he and the other donors discussed the candidate pool. They agreed that they want to support Keller, a former member of the planning commission, and Kou, a Barron Park resident who helped lead the neighborhood's opposition to a new housing development on Maybell Avenue in 2013 and who was edged out for the fourth open council seat in 2014.
"Arthur knows more about development issues in Palo Alto than anyone else," Waldfogel said. "And Lydia is a community organizer with a big constituency, and she is able to get things done."
MacLean noted that her contributions to Keller and Kou were the single largest that she has ever given to any campaign.
"I made them because I have lived in Palo Alto for 25 years," MacLean wrote last week on Town Square, Palo Alto Online's discussion forum. "I like its suburban, college town character. I'm afraid that we are in danger of losing that. Many candidates seem to be supporting growth to benefit large corporations and developers."
Checking the developer money trail
Developers have indeed made contributions to Fine and Tanaka, though these contributions pale in scale when considered alongside the recent inflow of cash to the Kou and Keller campaigns. The exact amount of contributions from developers is difficult to peg because only a few identify themselves as such on campaign forms (for example, Roxy Rapp, a prominent downtown developer who contributed $1,000 each to Tanaka and Fine, has his profession listed as "Keeping Palo Alto Beautiful and Prosperous" on Tanaka's campaign-finance statement and as "self-employed" on Fine's).
Tanaka did receive contributions from Jim Baer ($250), a land-use consultant who developed many of Palo Alto's "planned community" projects; John Goldman ($1,522), partner at Premier Properties; Sam Hawkes and Brittany Davis of King Asset Management ($1,000 each); David Kleiman, whose two recent downtown projects faced unsuccessful citizen appeals ($250); and from developers Boyd and Lund Smith ($1,000 each). Altogether, the contributions from the developer community added up to about $9,000, according to the Weekly's analysis.
This does not include architects, real-estate agents, real-estate attorneys, environmental planners and members of other professions associated with construction. An analysis by PASZ of "developer money" included donors in these professions.
Fine, for his part, received only about $6,000 from developers as of Oct. 19, which includes $2,500 from Stephen Reller of R&M Properties; $1,000 from Hawkes of King Asset Management; $250 from Goldman; and $500 each from Jaime D'Allesandro and Tod Spieker, whose development company Windy Hill Property Ventures is looking to build a 60-unit housing complex on El Camino Real and Page Mill Road.
The push back
While donors to Kou and Keller say they are looking to level the playing field and counterbalance the developers' influence, the large infusion of funds into the election has sparked concern and suspicion from other council candidates -- as well as from eight former Palo Alto mayors.
In a letter provocatively titled, "Is someone trying to buy Palo Alto City Hall?" former mayors Betsy Bechtel, Larry Klein, Bern Beecham, Sid Espinosa, Dena Mossar, Leland Levy, Lanie Wheeler and Gail Wooley characterized the large amount of cash raised as "disturbing," noting that it sets a tone that "many, if not most, of us don't want in our town."
"Not only are these contributions shocking and deeply troubling, but checks for $5,000 or more are unprecedented in our City Council elections!" the letter stated. "In the past, individual donations rarely exceeded $500, and for good reason: Candidates did not want the appearance of undue influence from big donors."
The letter states that, as former mayors, the signatories are "deeply concerned about the unprecedented role that large contributions are playing in this year's election at the last minute."
"No one knows how these funds will be used, if attacks and negative campaign tactics are coming, or (whether) new City Council members ... will be beholden to big money."
The mayors are hardly nonpartisan bystanders, however. Almost all have endorsed Fine and Tanaka, the two candidates who are generally seen as moderate on growth. Bechtel is an honorary campaign chair for Fine's campaign while Beecham and Klein (along with Assemblyman Rich Gordon and Susan Rosenberg) serve in the same capacity for Tanaka. Fine also has the endorsements of Klein, Mossar, Espinosa, Wheeler and Beecham. Tanaka, meanwhile, has the endorsements of Espinosa, Levy, Mossar and Bechtel.
Espinosa said his biggest concern with the recent big donations is the prospect that it will make running for council a much more expensive proposition, potentially shrinking future candidate pools.
"If this sets a precedent, it will really limit who decides to run for council in this city," Espinosa told the Weekly.
Negative political advertising
The mayors' suspicions became amplified after an online ad began making its way around social media targeting Fine, the candidate who chairs the Planning and Transportation Commission and who sits, along with Kou and Keller, on the citizens' committee that is working on the Comprehensive Plan update.
"Developers and candidates like Adrian Fine want to push through many high-rise office and luxury condo projects," the ad states. "The result? More traffic and crowded schools."
The ad then encourages viewers to support Kou and Keller. Fine, whose pool of contributors includes business professionals, former mayors (among them Bechtel, Peter Drekmeier and Greg Scharff), architects and members of the citizens group Palo Alto Forward, said the ad completely misrepresented his position.
"I never said I was in favor of high-rises, offices and luxury towers," Fine told the Weekly. "I put forward a balanced vision for balanced growth for Palo Alto to address housing and transportation needs that I heard residents call for."
Fine said he was surprised both by the huge amount of money donated to Kou and Keller and by the candidates' decision to use the funds on what he referred to as "completely unfounded attacks."
He also pointed to the fact that the same donors who made the recent contributions to Keller and Kou have also contributed to the Palo Altans for Sensible Zoning Political Action Committee. The committee's campaign statement shows that Gabrielle Layton, Helyn MacLean and Mary Anne Baker contributed $5,000 each to the committee, as did Rita Vrhel and Michael Rantz. Tench and Simone Coxe contributed another $5,000. Until recently, the group's treasurer was Tim Gray, who stepped down to become treasurer of Kou's campaign.
"Palo Alto has never seen this before," Fine said. "This pales in comparison to what other candidates have received from any types of residents or business owners in the city."
Keller and Kou stood by the ad, noting that Fine had previously voiced opposition to both the city's 50-foot height limit for new developments (he once called it "arbitrary") and to the annual cap on new office space that the City Council adopted last year (he called it a "blunt instrument"). As a commissioner, Fine initially voted against the office cap; he now says he favors keeping it at least until the update of the Comprehensive Plan is complete. He also said recently that he would be in favor of retaining the 50-foot height limit.
Keller said the ad "accurately represents Adrian Fine's positions before he changed them to run for council." Kou concurred and said that Fine is now "pivoting" on these issues.
"You have to have some consistencies with what you stand for," Kou told the Weekly.
Other candidates share Fine's concerns about the outpouring of cash. Leonard Ely, who is not affiliated with either the slow-growth or the Palo Alto Forward crowds, told the Weekly that the donations make it look like "someone is trying to buy the election for Kou and Keller." The fundraising, he said, is "getting out of hand."
"I'm concerned, as a citizen, that this sort of fundraising is taking the race out of the realm of 'I'm just a guy that wants to help the city,'" Ely said.
'Vote your conscience'
The donors, for their part, co-wrote their own letter to clarify their reasons for supporting Kou's and Keller's campaigns. In observing the run-up to the election, they say they saw "pro-developer candidates campaigning on a slate" and misleadingly "shift (their) positions on affordable housing, parking and traffic."
"We support affordable housing," states the letter co-signed by the Bakers, the Coxes, the Laytons, the Rantzes, MacLean and Waldfogel. "We support ground-floor retail. We support candidates who are the best choice to achieve positive growth for the city.
"When we saw the developer money and the Chamber weigh in just before the ballots were mailed, we realized that helping our candidates get their message out quickly was important. So we stepped in to help. Disagree? Then vote your conscience. We will."
The Weekly has created a Storify page for its coverage on the Palo Alto City Council election.