The Silicon Valley Leadership Group’s 11th Annual CEO Business Climate Summit at Ericsson included a debate by the San José mayoral candidates. This is a full transcript of that debate.

Participating candidates were Santa Clara County Supervisor Dave Cortese and San José City Councilmembers Rose Herrera, Sam Liccardo, Pierluigi Oliverio and Madison Nguyen, who serves as vice mayor. The moderator was Barbara Marshman, editor of the editorial pages at the San Jose Mercury News. She formulated the questions with no participation by the Leadership Group staff or board.

Barbara Marshman: I’d like to start out with a question about the city slogan. (They’re all thinking, “What’s the city slogan?”) San José calls itself the “Capital of Silicon Valley.” Sunnyvale is the “Heart of Silicon Valley,” and who knows what other parts are out there, but let’s stick to the “Capital” today.

My question is, do you consider the “Capital of Silicon Valley” a fact, or is it more wishful thinking? And if you’re elected mayor, what would you do to perhaps make it more real, so that next time, nobody will even ask this question. Let’s start with Pierluigi.

Pierluigi Oliverio: I think it’s more of a marketing idea — You know, the concept of “We’re a region, and we’re a major part of it.” Having worked 18 years in semiconductors and software, I unfortunately didn’t work in San José most of the time. I drove to Foster City, Menlo Park, Mountain View, Milpitas, and one opportunity I did have to work in San José, which was fantastic; but I think, in the end, we are a region.

San José is one of the pistons in the engine; and without San José, the region would falter. We have done a lot of good things to enable Silicon Valley to happen, but I think the reality is, whoever our next mayor is, he or she will need to make sure that San José is really taken care of when it comes to the opportunities for economic growth, and new high-tech companies that are starting.

Madison Nguyen: I’m going to stand up because I’m a little short. (laughter) But I like the fact that when Pierluigi said, “Whoever’s going to be the next mayor,” he pointed to me, ’cause I sat next to him! So thank you for that!

I think it’s a fact, and it’s something we should definitely build upon. San José is the capital of Silicon Valley. It’s not only the capital of Silicon Valley. It’s the capital of opportunity. This is the capital of innovation. It’s the capital of entrepreneur spirit. It’s the capital of a concentration of businesses here.

And I think that we all believe that, and we should. As the next mayor, I want to be able to do everything I can to make sure that nobody questions that, especially at another candidate forum in the future.

We are so proud to be the Capital of Silicon Valley. And the reason why we’re so proud is because this is where everybody is so envious of our city, and we like that!

We love the fact that people all over the world want to be in San José, the Capital of Silicon Valley, where an immigrant, a college student, or a professional with a work visa wants to be here. And the fact that we want them to be here, and contribute to the vitality of our city and our region, is something that the next mayor should try to push, and push harder than what we have done in the past.

Rose Herrera: I agree with the vice mayor, Pierluigi was pointing over to a woman, but that woman was me, so I will be your next mayor!

You know, Silicon Valley is both, for San José as a moniker, it’s basically half-true and half-aspirational. And I think what would be more interesting is to ask all of you, do you think San José is the capital of Silicon Valley?

Certainly, that is what we aspire to. That is what we need to make real. And for–as for–my experience of driving up the road, and working in other cities, I didn’t find that the companies I worked for were located in San Jose.

However, I had my own software company that I started, and I’m the only one up here that’s had [the] experience of actually running a company, raising money, and making that work. I’m very proud of that, and I will use those skills to go out and bring more companies into Silicon Valley, to San José, and make San José more business-friendly so that companies are going to want to stay and grow in Silicon Valley.

The next mayor, and that’s going to be me, has to be able to go out and do that. We need to go out as mayor and really encourage companies to be in our city, and we need to work to make sure that San José is the easiest city to do business with, so that companies are going to want to be there.

It’s very, very important that we have more jobs in San José. We have a jobs-housing imbalance. And I know housing is the biggest issue, and we need to focus on that; but we need to put more jobs in San José so that our residents can work, live and play in San José as well as the rest of the region.

Sam Liccardo: I want to begin by thanking Ericsson and SVLG for hosting this gathering, this debate, today. It’s very important that we all have an opportunity to dig into these very important issues.

And, most importantly, I want to thank the Mercury News, since their endorsement interview is coming up next week, and thank them for being a part of this.

You know, I’m less interested in titles, and I’m more interested in the fact that when you drive north on 101 or 85 or 280, you’ll encounter bus after bus heading south from a small town to our north, filled with 20- and 30-something talented coders, engineers, business leaders, who are coming from a town from our north for one reason — because that town to our north is a vibrant, urban center that is increasingly attracting the talent that our companies covet so much.

What is critical for San José in the next decade, whether we’re a “capital” or not, is to be the vibrant, urban center of Silicon Valley; because we are seeing more and more that the creative, talented employees that are driving innovative companies today are choosing where they want to live before they choose who they want to work for. And, increasingly, they’re choosing to live in vibrant cities like Austin and Manhattan and San Francisco.

And the question is, “Is Silicon Valley going to finally develop a vibrant urban core that will attract that talent?” We know the jobs and the companies follow the talent. We need to be the place that attracts the talent.

Dave Cortese: Thank you, Barbara. First of all, I’ve given some thought to that just recently, because I having lunch with a prominent entrepreneur here in Silicon Valley just a couple of days ago — a venture capitalist, as well, and we had this very discussion.

And I was telling him, I think that the title, “Capital of Silicon Valley,” is becoming a little bit of a stasis thing, a static thing, that it makes you feel like the city is sitting there declaring itself somehow the anchor of Silicon Valley. The city government is doing that. Remember, it’s the title of a city government.

And I told him that I think that the real title for this city should be the “City of Great Possibility,” because this is a city of extraordinary possibility; and I think, over the last few years, it’s been operating out of a mindset of scarcity, and we need to get over that, and we need to get over that soon, because that’s not how Silicon Valley operates. Silicon Valley has never operated out of a mindset of scarcity.

And what that means, as well, is if you have a city that has that mindset, that has that creativity, you will get a confluence of great ideas between the private sector and the public sector that move this city forward. That’s what I think about the current title in the name of Silicon Valley.

We have to stand for possibility in this city. We have to stand for a city with safe neighborhoods, with neighborhoods that are connected to City Hall, a city that attracts people who want to live here and create their businesses here. Thank you.

Marshman: I think it was Rose who mentioned housing. Once again this year, housing is the number-one concern of Silicon Valley companies, based on the Leadership Group survey. It just about always is. And the next two concerns, recruitment and traffic, are actually very closely related to the cost of housing and the location of housing, so it’s really major. Now I’m going to ask two questions about housing.

My first question is, San José has a general plan that calls for large amounts of high-density housing in transit villages and urban villages. Are you committed to getting that housing produced as a regional obligation? And do you think it’s possible that some industrially-zoned land might be appropriate to convert to housing, or at least commercial/industrial? Let’s start with Madison.

Nguyen: I’m going to answer the second question first. No, I do not believe in converting industrial land into housing. I think that we should keep industrial land so that we can have opportunities for companies to use [that land] to turn [it into] great companies, to provide employment and housing opportunities for their employees.

The (other) question is yes, I do believe that we should build more high-density housing along the transit corridors. I think, though, when you build housing, it has to have access to not only great employment, but also give people the opportunity to use transit to get to where they need to be, in order to make the kind of living that they need in order to live in our city, and in our region.

High-density housing is just so critical, and we are on a path to greatness in terms of our vision and our direction, in terms of where we want to go. And I want to work with the CEOs, with the various companies here, to make sure that we head in the right direction, to make sure that we provide adequate market-rate housing for your employees so that they can stay here, work here, live here, and raise a family here.

Herrera: First of all, San José is doing a great job in building high-density housing, and we have a general plan that calls for that, and we have made decisions, as long as I’ve been on the council, to go ahead and do that, and we’re doing that in North San José, and we’re doing that along transit corridors.

And it’s very important, because our employees, your employees, our residents, need housing options. And more and more, we’re seeing young people choose to actually have one car, to live in a higher-density environment, and choose to ride transit.

In my own family — that wasn’t how I was, when I grew up. But in my own family, my stepson and his significant other have chosen to live in high-density housing, own one car, so that they can use the transit to get to work. I think that’s an important trend that we need to support, for lots of different reasons — for environment, for transportation, to make sure that we have the housing, because, obviously, that’s very important. If we’re going to have jobs here, people have got to have a place to live.

I will not support converting industrial land to housing. That’s our seed corn. We need to have industrial land, and I’ve written on this in the Mercury News, that we need to be able to reverse the jobs-housing imbalance.

San José has done a great job of providing housing, but we need more jobs, and, at a 0.85 jobs per employed resident, it’s not enough. We need to move towards 1:1 so that we can have jobs for our residents, and that also provides an increased tax base so that we can provide services. The economy and our needing to improve the economy in San José is one of the root causes of why they can’t provide services as well as we’d like to. Thank you.

Liccardo: As chairperson of the general plan task force, I worked hard to stem the conversion of industrial land in this city, because I knew it’s critical for our fiscal future to be able to keep those industrial/commercial lands generating tax revenue to support city services. I also worked hard to halt the sprawl of the city, and to ensure that we’re not developing out in Coyote Valley and Almaden, South Almaden reserve, and Evergreen Foothills, to ensure that we have a sustainable — fiscally-sustainable — plan for development.

At the same time, we know that the greatest impediment to growth of jobs here in this valley is the lack of housing. And so there’s one solution to that, and that is to build extremely high-density housing in the downtown core, along key transit corridors. And that’s why I led an initiative two years ago to cut fees and rapidly increase the rate at which we’re approving high-rise requests in the downtown.

We’ve now got two under construction. We’re going to have two more under construction this year. By this time next year, we’re going to have 2,500 units of housing under construction in the downtown core. That’s going to provide the critical housing for your workforce, and it’s going to ensure that we can grow sustainably, because that’s the only kind of housing that actually improves our fiscal situation in the general fund. We need to ensure that we do it right, to provide the kinds of safety and services that will ensure our future residents have the same great city I grew up in.

Cortese: Thank you, Barbara. As some of you know, I’ve been very involved in regional government. In fact, I wrote an op-ed for the Mercury News not so long ago on a document called Plan Bay Area. I see Ezra Rapport here, who is the [executive director] of the Association of Bay Area Governments. Thank you for being here.

That was a very difficult effort, because we took all nine counties, all 101 cities in the Bay Area, and fed into that plan, those general plans, with a commitment to plan development areas for housing around transit corridors.

That plan calls for over 600,000 units of housing over the next decade, and what you, as businesspeople, CEOs, and so on, need to pay attention to is, even at those numbers, which some people consider to be a stretch, we’re going to bottleneck job growth by about 100,000 jobs. So we’ve got to get this housing thing done.

And what’s really important is that these transit corridors that we’ve changed the general plan on — I see former Mayor Gonzales here. He will recall that we were on the council together. We changed the whole Capitol light rail corridor to about 100 units to the acre. None of that is built yet. So we have to ask ourselves the question: “Is it just about changing the plan? Or do we need something else?”

And I say we need something else. It’s going to take tax credits. It’s going to take probably a return to tax-exempt bond financing, and other credit enhancements, to start getting that housing built.

I know that because I’ve built housing before. I know that because I’ve been a lender before, and I know that because I’ve been listening to the people who helped us shape that plan. Thank you.

Oliverio: I think it sounds like all the candidates are supportive of stopping what we’ve done in San José historically, which is suburban sprawl of single-family homes. That has been part of the economic detriment to the city, is that we were too far extended. And if you look at San José, the majority of the housing product is a single-family home, speckled with some apartments.

And now what we’re trying to do is create this sense of place through developments of mixed use, Santana Row-like, so that we have the economic ability to run the city, because that higher density brings an aggregated property tax, utility tax, etc. It’s also environmentally correct, because the number-one crop in this country is lawn, grass. We don’t need to be spending our precious water by watering all these lawns.

And the fact and reality is, not everyone wants that lifestyle. They’re younger. They might not want all those burdens of a home, of a traditional American house; or, if you’re an empty-nester, you may no longer want to hold onto a house. You might want to have those options.

So it’s important that we stick with the plan, that we put housing where it’s zoned for housing, not industrial land. We save that land. And then we put the right density that we can do. And we have to also understand, we’re going to encounter opposition, because people don’t want San José to change. They want it to stay as a suburban environment; but the fact is, we have to offer more than one product. And, by building in the transit corridors, where it makes sense for more pedestrian-oriented activation of retail, etc., is the right thing to do.

I sat on the general plan for four years. We took too long to do it. We could have come up with the plan in one year, and done the EIR (environmental impact report); but sometimes I think the scope is that we want to make — try to make — everyone happy, and we can’t.

Marshman: Let’s move to affordable housing. The painful death of San José’s huge redevelopment agency, along with everyone else’s, has really been devastating to the cause of building affordable, low-income housing in San José; and it’s important to the region, because these are the folks who staff the service industries that make it possible for us to live and work here.

How should the city, counties, and/or state be replacing that financial support? And will you fight for affordable housing, low-income housing, in San José?

Herrera: First of all, I want to say that I’m very proud of the role that San José has played, and the amount of affordable housing that we have created over the years. And, yes, that was at the time when we had the redevelopment agency. But San José has played a great role in creating thousands of units of affordable housing, and I appreciate all the folks that were involved in that, including all the development community that has played that role.

With the demise of the redevelopment agency, it puts us in a very tough position in terms of how to afford to move forward with affordable housing. And we struggle without the tax-increment financing. I know that the legislature is considering new ways for us to be able to have the ability to use tax-increment again, to look at affordable housing, and I would support that ability to do that.

We’re looking at different fees that might be looked at in the future for developers. I think we have to be really careful not to put all of the burden on developers, though. I think we put a lot of fees and burdens on developers, and we don’t want to do it so much that we actually stop the very thing that we’re trying to encourage.

I also think that affordable housing needs to be throughout the city and throughout the region, and I think all the cities, and I’m sure there’s many represented in this room — I encourage you to take on affordable housing, too. We need to see it in every city in our county and in our region. San José cannot do all the affordable housing. We also need to be providing jobs for our residents, and that’s a real focus that I have.

Liccardo: In 2008, I launched an initiative to make San José the largest city in the country with what’s called an inclusionary housing policy, a requirement that the developers either build affordable housing or pay a fee to enable nonprofits and the city to build affordable housing elsewhere in the city.

The good news is, we won the battle. The bad news is, the war is still being fought. We’re now in front of the California Supreme Court, as we’ve been facing litigation from developers, and we’ll continue to fight that battle. I’ll certainly push ahead.

As we consider that and other options, going forward, I think we need to recognize, in the short term, that there is no public money. And so we have to be more resourceful within the market. And that requires us to focus on ideas like affordability by design, what we’re seeing now with micro units in many urban communities — how 500 square feet of housing is a critical resource for ensuring that a workforce can live in a community and work there; ensuring that the housing is on transit stops, or near transit, is critical, because we’re seeing, in many Silicon Valley budgets in households throughout the valley, as much as 30 percent of their household income is being spent on transportation. If we can remove that burden by ensuring that people can walk, bike, or ride to work, we can substantially improve the affordability of the valley for many people in our workforce.

Cortese: We’ve already begun the process of trying to deal with this problem at the board of supervisors. For example, the tax-increment dollars that are no longer there. Twenty percent off the top of all redevelopment tax increment is what we’re really talking about here. Twenty percent of the property tax is directly to housing.

This is a thing that cities and counties actually agreed upon throughout the region and throughout the state; so even though many counties and school districts opposed redevelopment funding for years, none of them wanted to see the housing piece, the 20 percent, go away; and, in fact, there’s been many regional votes to affirm that that needs to come back.

So what we’ve done in Santa Clara County is we’ve said, “Whatever we get, now that RDA has been dissolved, whatever we get that would have gone to that 20 percent in housing is still going to go there. We are going to pass that right through.” And, in fact, we’ve already adopted that measure. That money will be going to the Housing Trust here in Silicon Valley. That’s one thing.

At the regional level, we’ve begun to take steps, as well. I am vice chairman of the Metropolitan Transportation Commission, where all state and federal funding to our transit operators comes from. It’s where it’s derived from. We have created another housing trust there with transportation dollars, and that housing trust will have the capacity to match the housing trust here.

I want to acknowledge Carl (Guardino) and all the others that have worked with the housing trust to leverage those kind of dollars, to help with this problem; but ultimately, it’s going to take legislation. It’s going to take legislation because these are just small steps in that direction. Thank you.

Oliverio: So with the demise of the redevelopment agency, the city is now grappling with the debt. So it was a great opportunity to invest $2 billion in downtown. Unfortunately, we still have to subsidize people to build there. We spent over $1 billion on affordable housing, building 20,000 units. Extremely generous!

San José has done its fair share. It’s always done its fair share in housing stock, and it’s done more than its fair share in affordable housing and low-income housing. It has become a detriment to San José.

Much of this housing does not pay property tax, so I don’t have any ability to pay for a police officer or a librarian. It was exempted from fees for road paving, and it was exempted from fees for parks. And so San José has been so charitable, it has come at a cost.

Moving forward, what we need to provide is what we talked about on the last question — market-rate, higher-density housing in the right places. Through increasing supply, you will create some level of affordability.

When it comes to truly low-income housing for people that have a lower income, this has to be a regional thing. If Palo Alto is going to reject a small amount of affordable housing, and try to stick it all on San José, that is unfair. I don’t mind matching per capita, but I can’t bear the lion’s burden. It needs to be spread throughout the area, because people of all incomes live in every area, and I’d like to see more pulling as a region.

And I’m against inclusionary housing because it increases the rate to the market-rate buyer. If I’m an engineer working in Silicon Valley, and I want to set my roots here, and buy a place, why should inclusionary make me pay $650,000 for a condominium versus $600,000? You’re taxing the market-rate buyer, which is unfair to that person who has saved their money.

Nguyen: I hate to disagree with Councilman Oliverio, because he’s such a nice guy, and I like him a lot; but in this particular issue, we always differ, which is fine, and we can still be really good friends. But I would be remiss if I didn’t acknowledge and recognize the work that Mayor Ron Gonzales did for San José during his tenure, and with this administration.

They built over 11,000 units of affordable housing during his eight years as San José mayor, and we wanted to recognize, and we wanted to thank him for that, and also the work of Carl [Guardino] and the housing trust. These are the kinds of partnerships that we need in order to make sure that we continue to build affordable housing in our city.

I grew up in a family of 11 people — nine kids, two parents — in a three-bedroom home. And, for me, that was the foundation. And I grew up very poor. And we received all the subsidies from the local government in Stanislaus County, in a small town called Modesto, which is not so small.

But it really provided a foundation for who I am and what I’m able to accomplish, and standing in front of you today. It gives me that opportunity. It gives me that foundation.

And in a prosperous city like San José, we should open our arms to help these families, to provide them with a sense of upward mobility, to give them foundations, so that their children could–can–go to college, so that their parents can feel proud that they bring home foods and put them on the table, and keep a nice, warm place for their children. We’re such a prosperous city. Why can’t we do that?

We can collaborate with the federal government, with the state, with the county, and with the different partnerships that we have here in our city to do that. And so, yes. I want to continue to build affordable housing in the City of San José, and I think, with the right impact, the housing-impact fees, we’re going to get there.

Marshman: The next questionis about transportation, and, this being a Leadership Group event, I do feel personally responsible to ask you about BART. Have you supported the two tax measures that have succeeded, and have made BART to Berryessa possible? Will you make bringing it to downtown a priority for your administration, and how would you do that?

Liccardo: I not only supported both the measures, I worked on them. In 2000, I took time out of my job to work for several months to get the Measure A in 2000 over the goal line. I’m grateful for the leadership of Mayor Ron Gonzales, enabling us to do that. And, obviously, Carl Guardino, on both measures.

In 2008, I was working hard, both in advocacy, in radio and television, as well as in fund-raising, to ensure that we could marshal the campaign we needed to move BART forward, and I’m thrilled to say we’re under construction today. We’re under budget. We’re on time, and we’re going to be opening in Berryessa with service in 2018, hopefully 2017, if all goes really well.

I am absolutely committed to getting BART all the way through downtown and beyond. That’s why I have gone off to Washington, D.C., on more than one occasion, to advocate with the FTA to ensure we can get the funding to make this happen.

This is going to be a critical asset for our region and for our city. This is going to enable so many people to be able to get to work and, perhaps most importantly, to enable employers to be in San José, knowing that workers can get to them.

That’s why we’re going to push ahead. And I know, as we look at all the congestion out there on the freeways, 880, 680, in particular, BART is going to be a critical solution to moving 100,000 people that will otherwise be in cars.

Cortese: Let me answer the question specifically. First, of the last two tax measures, I supported the first of those, and I did not support the second. I did not oppose it, either. I took a neutral position, and the reason I did that is because I had some concerns about the lack of construction of capital projects that had been approved in the first Measure A, which I supported, and the voters supported.

One of those projects, light rail to Eastridge, which is the number-one transit hub in Santa Clara County, 13 years later is still unbuilt, and I appreciate some of our former leaders for having pushed that. But I think where my value has come in, in supporting BART over the years, is in a couple of previous, very key votes.

We purchased, as the VTA, on a very tight vote — I think it was a matter of one vote, with me included in the “Ayes” — the UP (Union Pacific) corridor, the UP right-of-way, for about $80 million at a point in time when nobody knew whether or not we were ever going to be able to fund BART as we know it today.

That was prudent risk. We did that. Had we failed, of course, we’d have a right-of-way on a rail line that we could do absolutely nothing with.

Later, when our good mayor was in the hospital, I was the swing vote when we certified the environmental impact report. And I know there are some north county elected officials here who voted against that environmental impact report. It survived by one vote. Had that environmental impact report failed, we wouldn’t be talking about bringing BART here today.

And lastly, as the vice chair of the MTC (Metropolitan Transportation Commission), I helped cobble together the votes to move money from the Dumbarton Light Rail to the Warm Springs, Fremont station. If that didn’t exist, you wouldn’t be talking about getting BART to San José. You needed to get to Warm Springs first. Thank you.

Oliverio: To the question, I wasn’t an elected official the first time Measure A was there. On the second time, I was asked to endorse it; and, like Supervisor Cortese, I didn’t take a stance. I had deep concerns about the cost of BART, when it came to the labor, and I think that’s been very evident with the strikes, and, you know, gaining lifetime healthcare after five years of working. And so my concern was, how are we going to manage the cost, once it’s built.

Overall, like most of the residents, we’re supportive of mass transit, supportive of BART. It provides a great opportunity to what we were talking about earlier on housing. And I think it’s important that what we do is that BART isn’t just housing of people in San José to go work up in the East Bay. It’s jobs at the BART station.

And so I voted against, for example, when we decided to put wood townhouses next to BART. That’s not the right density. That’s not the right product. You’ve got to put a higher-density product next to a BART station.

So I think you have to be cognizant of the land —use decisions you’re going to put next to BART, and make sure that you ideally, leave land available so you could have commercial development. And then, if you’re going to do housing there, it has to be the right density, not just something you would see somewhere else in the city.

So, going forward, I’m hopefully optimistic that the BART board will keep costs in line with reality for the compensation packages; because otherwise we need to be cognizant in government that it costs one price to build it, and another, ongoing cost to maintain it.

Nguyen: I’m standing right in front of Carl Guardino, and he has a very sharp pen in his hand, and I don’t want him to throw it at me. When it comes to BART, how can you not support BART to San José? Mass transportation is so critical.

I’ve lived in Washington, D.C., and in Chicago. I’ve been to New York. Been pretty much all over a lot of different places in the United States. And mass transportation is the key to help people to have access to so many different places. And we’re just so proud of the work that, again, former San José mayor Ron Gonzales did. It was his vision, along with Carl Guardino’s and, of course Sam Liccardo worked on that campaign, and we’re so grateful for all the hard work in helping to bring BART to San José.

I supported both measures, and I look forward to making sure that we bring BART to downtown; because, when we have the A’s here, that’s what people are going to need for them to get to the A’s games. There’s absolutely no way everybody can drive to San José and try to find parking, and try to get to the game on time. And we know that if we don’t get to the games on time, we’re going to be pretty pissed off. (applause and laughter) And so BART needs to come here, and I will do everything I can as mayor to make sure that happens.

Herrera: I remember hearing about BART when I was in school. And, unfortunately, some of the decisions that got made back then with the counties north of us not allowing BART to come down, we’re still living with today. So I’m very happy that BART is coming to San José.

In 2008, I was running for office, and I met with Carl Guardino, and I said, “Yes, I’ll support that.” So I ran on the issue. So, yes, I’m very supportive of bringing BART. And, you know, BART connects us. We’re going to have grand central station, basically, in downtown San José eventually, when all of the transit projects that we are working on come to pass.

Dave Cortese mentioned the light rail. I’m also a big supporter of the light rail to Eastridge, and that will connect the folks from East José, the most transit-dependent riders in San José, to BART. So it’s really important that we support BART, but also other projects that will help folks move around.

And I would–I will–also say, too, though, that we need to find ways to fund our highways, too. We need to find ways to fix pavement, and get our highways in shape, and our local streets and roads in San José, because they’re a mess, and they were some of the worst in the state, and so we also have to find ways to fund that, too.

Liccardo (in rebuttal): Supervisor Cortese explained that he didn’t support BART in 2008 because we weren’t moving forward on other capital construction projects like light rail to Eastridge. What he didn’t tell you is that, today, we’re under construction on a bus-rapid-transit line along the same corridor.

And the reason why we’re under construction on that line is, back in 2007, when I was on the VTA board, we had the choice. We could spend over $100 million more on a light-rail system that would transport fewer riders at greater cost; or we could make the transition, the pivot, to a bus-rapid-transit system that moves more riders at far lower cost. And I made the decision, along with the VTA board, to push forward with what made the most cost-effective sense at the time. And it will continue to be the most cost-effective approach until the densities change dramatically to support light rail.

I think it’s also important to note that that 2008 measure passed by only a few hundred votes. It was a critical moment for this city. And, while in Sacramento, they say that folks who don’t take a position “take a walk”. While others are “taking a walk,” some of us took a stand. I took a stand for BART, and I’ll do that as mayor of San José.

Cortese (response): As I mentioned, I’ve taken many a stand long before you were an elected official, Sam, and I won’t go over that ground again. But it wouldn’t be here today if I wouldn’t have cast the swing vote on the environmental impact report, and I think you know that.

Let’s get more specific about light rail. Councilmember Herrera talked about its connectivity, not just to BART, but all the way to Tasman. And I was sitting down with an executive from Cisco just a few days ago talking about how wonderful it is to have the high-density growth that we approved when I was a city councilmember on Tasman, but how difficult it is now to get there, and it’s becoming worse in terms of vehicular transportation.

Those people are coming from where I live in the Evergreen area, right next to that Eastridge transit mall. They’d be able to get there. Your ridership would go up. Your fare box recovery would go up. That’s what we’re talking about, and it’s short-sighted to kill a project like that.

Marshman: Let’s talk about the business climate and San José’s role in it. San José has the reputation of being great for big projects like Samsung, which I passed on the way in this morning. It’s neat to see that going up. But San José’s reputation is that it’s a nightmare for smaller companies, even for some commercial development. It takes forever to get permits. You hear it. Anecdotes are not evidence, but you do hear this over and over, and it’s definitely the city’s reputation. Do you think San José has a problem? And, if so, would you try to solve it?

Cortese: Repeat the question, please.

Marshman: San José has a reputation for being really good on megaprojects like Samsung, but not for speeding the development of smaller companies.

Cortese: Thank you. Out of 101 cities in the Bay Area, San José has the reputation currently of being the worst place to do business when it comes to building permits, planning permits, and the entitlement process. That’s got to end. It doesn’t matter if you’re talking to an executive at Cisco or if you’re talking to a little restaurant on San Fernando Street.

I was talking to somebody in a restaurant on San Fernando Street, an owner, just two weeks ago. And I said, “Why don’t you have chairs and tables outside? I know that some of the councilmembers have, you know, offered that possibility now, by a vote of the city council.”

He said, “I want to do that. I’ve been waiting a year and a half for a permit.” And he said, “I’m still weighing whether or not to pay the $600 that it’s going to cost me for the permit.” That’s his words, not mine.

I don’t know if that’s all fact, but that’s what you hear anecdotally here. If you talk about residential builders, if you talk to the Building Industry Association, they will tell you today that they are not making applications in the City of José, or doing projects here, because there are nine counties around that are better to do business in. We’ve lost that growth today to San Francisco and Contra Costa and Alameda.

That’s got to stop. That’s got to end. It’s going to be the demise of our economy here. If you don’t have housing, and if you don’t have business’s ability to process permits here, we are going to choke off our own growth, and we do have to grow. We do have to grow. That’s not optional. There’s no such thing as standing still unless you want to go backward. Thank you.

Oliverio: This topic has actually been brought up for decades. There’s been committees formed by other mayors. “How do we improve this process? And come out with a plan?” And they go do it, and you still hear the same issues.

Now, to some extent, some applicants are in the wrong. They don’t do their due diligence. They blame it on staff; but there’s been plenty of [anecdotal] that there are some issues. There are some hiccoughs. But the problem is that the mayor — who is only one vote on the city council, doesn’t manage by fiat or edicts, one vote on the city council — doesn’t have the ability to hire or fire the planning director.

And if you really want to change an organization, then you should be able to hire or fire that person so that there’s a sense of urgency, that if the council adopts new business policies or technology, that that is pushed down through the organization. And if there are no results, then you terminate.

But I can’t keep it the same way, where it’s done through the city manager, and then a council vote. The mayor needs to evolve more as an executive of the city. Some cities have a strong mayor, where they hire and fire every department head. What I’m thinking is, we need to start off with a slightly stronger mayor, and have that mayor hire or fire the planning director. This would require an amendment to the city charter. We can easily do this in November if all of my colleagues agree. So whoever is the mayor, that the whole city votes for, that they say, “These are my expectations.” Then that mayor is in charge of fulfilling the dream because, at this point, if that mayor doesn’t have the votes to do X, then we’re just stuck, and the city’s residents have the higher expectations.

Nguyen: Let me just admit that yes, we do have a problem. We have a problem in the planning department. There are certain applications that’s been sitting around for years before staff has a chance to get to it. And we do focus more on the corporations and the big companies, and less on the medium-size and the small companies, and the small businesses. So we do have a problem.

But we also have a new mayor that’s going to come in and has a different vision and a different direction. We also have the opportunity to hire a new planning director. And yes, that person will work under the supervision of the city manager, but we are the boss of the city manager, and so we can tell that person that this is the kind of planning director that we want — someone that’s going to take care of business, someone that’s going to get the permitting process expedited, get your permit out the door in less than 180, 100 days.

Now I have proposed, as part of my platform, to hire an MBA, the Mayor’s Business Advocate. And this person is to strictly work with the businesses. Whether it’s a big company, or a small-size company, or a medium-size company, we want to come in and hold your hand and say, “What is it that you want from the City of San José? You want to relocate here? You want to open a business here? This is my MBA. This person is getting you through the door, through city hall, and get you up and opening, so I can come and cut your ribbon.”

This is where we have to be. This is the vision that the next mayor needs to have, and I want to be that mayor that makes sure that we are not going to have a reputation that San José is not a business-friendly city.

Herrera: First of all, our planning department has worked on billions of dollars of business, and got them through, and I want to give them credit for that first, because we have had lots and lots of great projects, Samsung being one of them. We don’t do the middle range very well, or the small companies. It is a problem. We need to step up to it.

We need to make sure that technology is deployed in the planning department that brings us into the 21st century, electronic plan submission. And we need to have all of that, so that needs to be a major focus. And some of that’s one-time costs.

You know, San José has a challenged budget of adding lots of people, but we need to take a portion of the budget, and really move to bring technology into line. That’s definitely going to help us speed things up. It’s going to flatten the organization, a lot of decisions to be made, so it’s not so “silo-ized” like it is now. As mayor, I will make sure that we do that.

The planning director needs to be somebody who is not regulatory-minded so much as making, facilitating projects to go through. It’s the attitude of that director, and we need to make sure that that director is very balanced, and looking at moving projects through. And we can have a big impact on that.

We need to really make sure that we support our businesses at all levels. We cannot just focus on the large ones. We have to make sure that all the other businesses move through; and, as mayor, I would do the actual steps necessary to improve that process. It’s just a matter of speaking, or saying that, you know, “It’s gonna happen.” You’ve actually got to put a plan in place and make changes in order for this situation to improve.

Liccardo: You know, if you order a Fedex package, you can go online, as you well know, and track that package every single mile, from the time it leaves some warehouse in Timbuktu until it lands on your doorstep. But if you submit a permit application to the City of San José, it lands into a black hole from which it doesn’t emerge for months, in the middle of Silicon Valley, and it is so incredibly difficult to track.

Until last year, when I pushed an initiative with Councilmember Johnny Khamis, to first implement a very basic tracking mechanism to ensure that every permit application that comes in the door is tracked to every single desk at city hall. And finally, after years of pushing, we are now implementing that.

The second phase of my plan is simple. We’ve got to aggregate all of that data about where all of those applications are going, and then release that data to the public, and create an open data platform, and that can enable managers to understand where the permits are getting stuck, and where they’re moving forward, and manage accordingly. Decide who needs training, and who needs maybe a promotion. Most importantly, it releases information to the public in a way that improves transparency and accountability.

And then we can go next door to San José State, where Mo has got a whole bunch of innovative coders, students who want to jump into a hackathon, and create smartphone applications that can enable business customers to understand that when they come up to the customer window, how long is the average delay in that permit request. So before they decide to make the decision to lease and pay rent, they’ll know how long it’s going to take to get the permit. And maybe how they can automate the process, so people don’t have to come into city hall at all. And they’ll know exactly who to call, and who their supervisor is if, in fact, that permit is held up. We can do better, not by spending more, but by spending smarter.

Oliverio (rebuttal): Mine is a friendly rebuttal (to Liccardo). In my office, I implemented a customer-relationship management (CRM) software to track all my constituent issues. I’ve been able to track 11,000 issues, see it with a dashboard, what people are calling about. People can log into the Internet and track everything, much to what Sam was talking about. So I have experience in doing that.

But what the reality is for the planning department, we have antiquated software. It doesn’t have XML format. You can’t do an open data platform when you have older technology.

So the reality is, we as a council, the next mayor, up on this stage, has to have fiscal prudence in allocating the funds necessary to update the software so we can have an open data platform. So I think that’s key.

If we want to have that accountability, where everyone can see the world through the Web browser, and see the information that’s been discussed, we have to put the dollars there, because it won’t happen with wishful thinking. We have to do that, and I just wanted to stress that the city needs to spend money on information technology to get those results.

Liccardo: You know, Councilmember Oliverio is right. We need to spend the money on the IT, but we have to do that anyway, to upgrade; and fortunately, our partners at Microsoft are helping us do that today; because, right now, on the 18th floor, we’re still using Wang computers to play Pong.

But it seems to me that we don’t have to do this alone. We can do it more cost-effectively with partners. Right now, we’re talking to Code for America, and Vijay Sammeta and I are figuring out how we’re going to launch this open-data platform — not using our resources. Using the resources of the brilliant minds we have here in the valley. There is a very active Code for America chapter right here. They want to help us do it, and we’re going to make it happen in the next couple months.

Marshman: One more question before we do our wrap-up. Public safety: Now, in neighborhood forums, this will be the first question for everyone. But let’s look at it from a regional perspective. Do you think San José’s work on pension reform has helped its reputation in the business community? Made it seem like a fiscally-responsible place? Or do you think public-safety issues that are arising now are hurting its reputation as a place to do business? Or both?

Oliverio: You cannot have a city whose annual pension obligations are higher than your annual property-tax revenues. That is a case study for instability, a case study for eventual bankruptcy. And so the city council took the action to go do something about it. Back in 2010, I initiated and authored Measure W, which was new pension plans for new employees. There was really no discussion on, “If you hadn’t taken the job yet, that you shouldn’t deserve the same unsustainable pension.”

And then we moved forward with Mayor Reed and the council majority to put Measure B on the ballot. It was the hard medicine that we felt we needed to do, to avoid a worse situation. Obviously, the police union has been adamantly opposed, and is doing anything and everything to punish the 70-plus-percent of the San José residents that voted for it.

And, as we talked about yesterday on the council dais about, you know, encouraging people to leave, and all that type of stuff. Whether or not that has affected the opinion of business leaders, to whether or not they feel the city is a good place or a safe place, I think that depends on the individual.

I, personally, as you may know from my proposal, believe we should guarantee minimum funding for the police department; because even if I have limited revenues, I need to do my core competency very well, and we’ve done things in the past in the council, where we said we want so many police officers, but we never provided the funding mechanism.

My proposal yesterday was very simple. Just increase it 1 percent a year for the next six years, and cap it at 35 percent; but it wasn’t the right time, apparently, for this council.

Nguyen: I was very proud to support the mayor’s pension-reform measure, and I think that most of us up here [were] very proud to do so. And it was a very hard pill to swallow. But when you’re dying, you need to take medication, even though I prefer alternative medicine. And I had to take that medicine because I need to survive, to make sure that the city is sustainable.

Now we’ve been through a lot. I have been supported by both fire, police, and, of course, the bargaining units, over the years. And so to move on to the other side, and tell them that this is what we’re going to do, because we want to make sure that our city is sustainable, was a very hard decision; but it was the right decision. And, yes, we received a lot of repercussions for it, things that I don’t really care to engage again, moving forward.

But this is what we have to do as elected officials. People elected us to make the hard choices. And, yes, we live in a democracy. But we also live in a representative democracy where people trust you to make the right decision, to make sure that their families, that our children, and the future of our children, is sustainable. And this is what we have to do. This is a mandate from the voters. I will do everything I can as mayor to make sure that we uphold the will of the voters, and make sure that pension reform [prevails] in the courts.

Herrera: I supported Measure B, and, as a result of it, I faced the toughest reelection challenge I think anybody’s ever faced. And I did it because — It’s not because I was on one side or another. It’s because I was on the side of the community and the people in San José.

When you run, you say a lot of things, and hopefully, you say the things you’re actually going to do. I think I have done that. But when you govern, you have to make tough choices, and we were faced with service insolvency, cutting services drastically. We were faced with even — Even thoughts of bankruptcy had been discussed. So taking the challenge to try to curb our pension expenses, even though we knew it was going to be a tough challenge, was something that I supported, and I still support.

We save $20 million a year now, we’re getting additional that we wouldn’t have had, to provide services. At that time, with the decisions we made, we saved 150 police officers’ jobs that would have gone.

So, you know, San José has a great police department. I support doing everything we can to retain our police officers, and I work very hard with them. I call on the union leadership to stop their negative campaign of driving our police officers out of San José. That is what’s happening, and we need to tell the truth about that; but we have a great police force. We have a great community. And we’re going to work through this together, and San José is not the only one facing this. Cities across the country are. We just were brave enough and courageous enough to take it on.

Liccardo: Two years before Measure B ever got to the ballot, I wrote an op-ed in the Mercury News arguing that people of all ideological persuasions should support pension reform and retirement-benefits reform. It was around that time that I stopped getting Christmas cards from the heads of the police union and fire union.

But, you know, it’s critical that we recognize — As I came into office, as many of us did, seeing that we had been dug into a multi-billion-dollar ditch, and this truck that had been driven off the road, as our president likes to say, in fact, it’s taken us seven years just to try to get it back on the road again.

And now some of those same folks that drove the truck into that $3.7 billion ditch now want the keys back. And we’re not going to give them back. We have to move forward with pension reform and retirement-benefits reform, because it’s critical to the sustainability of this city, for our ability to provide basic services and safety to our residents.

We don’t have to spend more on police, though certainly it would be nice if we had the money. We have to spend smarter, and that’s why I’ve crafted a very extensive plan — you can see it on my Website, www.samliccardo.com — where we can leverage what we have, old innovations like community policing by eliminating the six-month rotations, where officers move out of the neighborhoods every six months. It’s undermining our ability to develop relationships with our officers that help us police better and keep our communities safe.

Cortese: First of all, let me say, on the answer to the immediate question as to whether or not I supported Measure B, the answer is no. Do I support 90 percent pensions? The answer is no. In fact, I was the only city councilmember on December 13th of 2005 that voted against the 90-percent pension, and that included our current mayor, Chuck Reed, when he was on the city council.

I voted no. And I did that because we were advised that we couldn’t afford a 90-percent pension at the time. Any other awards that came after that time were won in binding arbitration after me and other councilmembers and the mayor kept saying no, no, no thereafter. Those were won in binding arbitration.

Measure B was flawed. We know that now for sure because the court has thrown out the flawed provisions in Measure B. That is a problem. It’s in the charter. They can talk about it all day long every Tuesday, if they want, but they can’t fix it now. It was a bad business model. Any businessperson knows you don’t handcuff yourself when it comes to your own ability to make decisions in the future.

So they put a flawed document on the ballot, told people it was going to solve all of our problems, told people it was going to balance the budget, and told people it was legal, when they were told over and over and over again, by their own city attorneys, including a publication in the Mercury News done by one of the city attorneys, an op-ed, laying out the fact that this is not going to survive a legal challenge. They said, “Yes, it will. Trust us. Trust us.”

And now we know what happened with that. Four hundred fifty police officers later, we don’t have public safety in this city, or in our neighborhoods. Thank you.

Herrera: Measure B is saving right now $20 million a year, because not all the provisions were struck down by the judge, and there will be appeals, as well. We wouldn’t have $20 million right now to spend if Measure B had not been passed. It’s a big piece of legislation. Just like other big pieces of legislation, sometimes, there are clean-ups that need to be done. We see that with the Affordable Care Act at the federal level. We see it with other pieces of legislation.

When it was crafted, individual pieces of it were contemplated that they could move along. Move along separately, in the event some things were not upheld. So we fully expected that maybe not everything would be upheld.

But our opportunity to do something rather than nothing, to do something to try to change what we knew was the biggest problem in the budget, which were the pension and medical benefits, which are not only harming our city, the city, and the residents for us to provide services.

It harms our employees, because we’d like to give our police officers more money on the pay line, but we’re forced to put the lion’s share of it in pension and medical benefits that are increasing every year. It hamstrings us to do what we need to do for our employees, to keep people at the City of San José.

Cortese (rebuttal): The $20 million in savings didn’t come from putting Measure B on the ballot. The $20 million in savings came from the two-tier pension plan, which I support, and I think just about every other elected official in the State of California supports. The unions know I support two-tier pension plans, and they’ve asked me that, and I’ve answered that in writing; and if anyone wants to see the documentation on that, that’s fine.

But you didn’t need to go to court. You didn’t need to put something on the ballot and then adopt a resolution saying, “Let’s go to court and litigate this” with your own employees, knowing, with the legal advice that you had, that it was flawed in the first place. That was a mistake.

When I was on the city council, we were the safest big city in America. Now you have the fastest-growing crime rate of any city in America, according to your own auditor.

That’s unacceptable.

Marshman: I think it is time to go to our 60 seconds of closing remarks. Anything you’d like to tell us.

Nguyen: Well, vote for me!

There is no other place in the world with a concentration of businesses, financial capital, entrepreneur energy, talent pool of educated employees, with government commitment to business development, like the City of San José. Now those wise words were not mine. They belong to Patrick Lo, the CEO of Netgear.

So when people asked me, “Why do you want to run for mayor?”,I said I came here on a small fishing boat. I left Vietnam when I was four years old. Grew up very poor, working in the Central Valley, picking fruits with my family, until I went to college.

Today, I’m running for mayor in the tenth-largest city in the United States. Do you know how proud the immigrant community is about this opportunity? And it’s not just for me. This is the city of opportunity. It’s the capital of opportunity. It gives people like me, where there’s no place in the world that I have this opportunity to run for the highest position in the tenth-largest city.

I can’t be more proud and more happy to stand in front of you all today, the CEOs of our capital, and I’m just hoping that we can provide some perspective and insights and entertain you in the last hour.

Herrera: First of all, I want to thank all of you for being such a great audience, and thank Barbara Marshman and Carl Guardino for putting this on. You know, we’re at a crossroads in San José. San José, I’m proud to have been part of the effort to create a sustainable floor for San José to grow on, but we need to grow; and that means we need to grow jobs, and we need to work with your and other companies.

I’m running because I want to improve San José’s economy. I want to create more jobs. There are folks in San José that are not participating in the Silicon Valley dream. There’s a tale of two cities. Some people want to focus on one half of it. I want to focus on getting jobs, and I want to focus on making sure we don’t convert our industrial land, that we bring more jobs to San José, that we make it easier for you to do business in San José.

And, as mayor, I’m going to be out there as an advocate — the number-one advocate for that. I don’t have to hire somebody to go do that for me. I’m going to be doing it, because I’ve actually created jobs, and I’m the only one up there that’s run a company, that started it, and grew it to a $10 million enterprise.

I also want to say another thing, and I don’t get this opportunity every day. I’m proud to be one of two women running up here. Only one out of l0, less than 10 percent of the mayors in this state are female. Fresno has one.

So we need to have more women in office, and that’s why I started the Women’s Caucus of the League of Cities. We need more women in office. We need more women running companies. Fifty-one percent of the population needs to be a bigger part of this discussion. Thank you.

Liccardo: My grandparents started a grocery store in the 1940s in San José. They shared with many immigrant families in this valley a passionate optimism about the future of this city. And yet, when I’m knocking on doors now in neighborhoods throughout the city, all too often I’m hearing a sense of resignation, about how our budgetary challenges have confined us to a future of declining services, of deteriorating roads, of a diminished sense of our own safety.

I’m going to lead a San José that will restore a shared conviction in the extraordinary possibilities of this city. By leveraging innovation, to be able to restore services and safety, not by spending more, by spending smarter. We can do more by innovating, by leveraging the talent and skills that we have here in the valley, and we can do it fiscally and sustainably. I’m going to lead the most innovative, the most cost-effective, the most resourceful city hall, in the United States. And, with that, we will restore the optimism that has carried this city for generations.

Cortese: Thank you. Thank you for being here, and thank you for listening. I’m here because I care, and I’ve been caring for as long as I can remember, since I wrote my first letter to my congressman when I was 10 years old, from a house in a prune orchard on Rural Route 3, where Evergreen is now.

I’ve cared and cared and cared. I cared enough to serve on the school board for eight years. I cared enough to serve on the city council and as vice mayor for eight years. I cared to run to represent all of you on the county board of supervisors, and have served there for five years.

And I care enough about this city, this city that really is a city of great possibility, to take on this role. And it’s going to be a challenge. But I want to stand for safe neighborhoods again. I want to stand for a police force that’s respected and proud and dedicated and wants to stay here because San José is an employer of choice.

I want to stand for neighborhoods that are connected to city hall once again, not neighborhoods that feel like they’ve been left out. I want to stand for school districts that know how to work with city hall and want to work with city hall because we are providing the services that they need through city government. Thank you.

Oliverio: Thank you, Barbara. Thank you to everyone here. Thanks for organizing. I don’t really have a pitch to give you here at the end. I typically just speak to whatever comes off of the top of my mind, which is sometimes dangerous; but, with that said, I want to say to all my colleagues, I am so proud to stand here with you.

Each of you are uniquely different. We’re all special and different, each and every one of us are humans, right? But the fact is that you all care. I mean eloquent speaking, talking from the heart — whatever.

They’re all great. And I stand with them in the same reasoning, that this is the city I love. This is the city I care about. I’ve had the opportunity to live here, ’cause my parents moved here from a foreign country. That we have the potential to do good things here, that San José is a city of possibilities, that we can be better than we are today, and I think it’s the approaches, you know, being pragmatic. What it is that we can actually accomplish, at the same time being able to have an adult conversation.

The idea is that we face serious [challenges]. Whoever is going to be there is going to be a world of a lot of work. I was going to say “a world of pain,” but I mean there’s a lot to do.

And we’re going to just need to be as candid as we can with the public, and be as open and honest as we can, because we have some serious challenges, and we hope you’re all with us, whoever that next mayor is.

Marshman: Thank you. I’d just like to say that I second Pierluigi’s observation, that this is a very qualified field, and that feels good for San José. Thank you all.