With the bankruptcy and closure of the San Jose Rep, San Jose's cultural and entertainment meccas downtown continue to face difficult times. Another institution with challenges is the Camera 12 Theaters, which are facing a potentially huge rent increase in March. The question is whether a nascent revival downtown will be enough to carry them.
As background: Despite a couple of very favorable loan agreements with the city's redevelopment agency, Camera 12 failed to make its monthly cash payment of $2,500 for 15 months in 2011 and 2012. A forgiving city is willing to accept this, particularly because Camera 12 is now making regular payments plus an extra amount for the missing months.
A more serious concern is Camera 12's deal with Forest City, the developer that is essentially a middleman between the city, which owns the land, and the movie theater. Under the terms of a 2011 deal, Camera 12 pays a base rent of $13,500 monthly to Forest City. As of March, that is due to jump to $24,567, an 82 percent increase.
Can Camera 12 afford it? A limited partner with the theaters, PR man Dan Orloff, sounded upbeat when we asked him, saying that new housing downtown and retail businesses inside the theaters would lure new customers. "We expect to be able to make that rent without any problem," he told us.
But Richard Keit, the managing director of the Successor Agency to the Redevelopment Agency, sounded less sanguine. "There's a very grave concern that they can make that amount," he told us. Meantime, a city memo (goo.gl/azh04N) notes that Forest City is considering its option to buy the land at market value.
Familiar face taking over as Cortese's campaign manager
San Jose mayoral hopeful Dave Cortese is breaking in a new field general as he gears up for a fresh campaign battle.
The Santa Clara County supervisor announced last week that Lara McCabe would be his campaign manager for the November election. She replaces JR Starrett, who got a job as a senior staffer with San Francisco philanthropist Tom Steyer's political group, NextGen Climate.
McCabe, a former science teacher, ran Cortese's campaign for supervisor in 2008 and was his interim chief of staff at the county before settling into a role as assistant chief of staff.
"San Jose needs a leader like Dave Cortese as our next mayor because he has the experience and skill to unite San Jose and make our neighborhoods safe again," McCabe said in a statement.
IA never got the sense that Starrett, who is new to California politics and lives in San Francisco, was fully committed to Cortese's run. During the June primary, Cortese was often forced to handle routine matters such as scheduling that are typically left for staffers.
Of course, while Cortese has an official campaign, local unions supply many of the volunteers who knock on doors and call voters on his behalf, and much of the independent political spending supporting him.
As for his opponent, Councilman Sam Liccardo, he's sticking with his longtime aide and campaign manager from the primary, Ragan Henninger, as his No. 2. She recently left Liccardo's council office, where she was his chief of staff, to oversee the campaign full time.
But Liccardo, too, has outside help and even bigger independent financial support -- from big businesses.
Ro Khanna gets backing of former GOP legislator
With two Democrats having survived the 17th Congressional District's primary to advance to November's general election, the battle is on for the district's Republican hearts and minds.
Weeks after Jim Cunneen -- the last Republican to represent Silicon Valley in Sacramento -- endorsed Rep. Mike Honda, D-San Jose, for an eighth term, Republican former Rep. Ernie Konnyu has now cast his lot with Democratic challenger Ro Khanna.
"I have been in touch with Ro and his staff and look forward to help unite Republican and independent voters who supported me in the western portion of the Congressional district with the thousands of voters already backing Ro Khanna," Konnyu, 77, of San Jose, said in a statement.
"My aim is to deliver to the House of Representatives a new bi-partisan Congressman from Silicon Valley ready to lead for jobs and greater Silicon Valley successes," he said. "I trust that Ro will be good for America and great for Silicon Valley."
Konnyu was a South Bay assemblyman from 1980 to 1986, when he was elected to serve what was then the 12th Congressional District. He served only one House term, losing in 1988 to a more moderate Republican, Tom Campbell.
Honda finished first in last month's primary with 48 percent of the vote, and Khanna -- a former Obama administration official from Fremont -- finished second with 28 percent. Republican Vanila Singh, of Fremont, received 17 percent and Joel VanLandingham, of San Jose, got 7 percent, and so they were eliminated.
Only 19 percent of the district's voters are Republican, while 44 percent are Democrats and 32 percent state no party preference, but that GOP fifth of the electorate could be a crucial bloc if either campaign can mobilize it. A poll in May found 19 percent of GOP voters favored Honda, while 18 percent favored Khanna.
Who's to blame for late payroll taxes?
Was the Santa Clara County Office of Education honest with Uncle Sam about paying late payroll taxes back in September 2010? When the IRS noticed the delinquency last year, it levied a $174,000 penalty.
In a March appeal letter, the education office blamed the Santa Clara County treasurer/controller for the payment's late arrival. But Office of Education spokesman Ken Blackstone indicated that an ex-director in business services had provided misinformation.
That former employee, Nimrat Johal, signed the appeal to the IRS and copied Micaela Ochoa, the education office's chief business officer, and then-Superintendent Xavier De La Torre. Johal wrote, "We are an involuntary participant in the county treasury" and said her office faxed a tax payment request to the county treasurer 48 hours before the payment due date.
But that fax was simply a notice of pending payments. Santa Clara County acts as the bank for the Office of Education and school districts and requires advance notice to ensure accounts have sufficient funds to cover large payments.
Did Ochoa believe Johal's claims, and not know that her office transferred tax payments to the IRS electronically? Or was she trying to deceive the IRS? Ochoa won't say, and the IRS isn't talking.
Internal Affairs is an offbeat look at local and state politics. This week's items were written by Scott Herhold, Mike Rosenberg, Josh Richman, Sharon Noguchi and Paul Rogers. Send tips to email@example.com, or call 408-920-5782.