LOS ANGELES, May 22, 2012 (BUSINESS WIRE) -- Glancy Binkow & Goldberg LLP, a Los Angeles based law firm with offices in New York and San Francisco, announces that it has filed a class action lawsuit on behalf of investors who suffered losses in connection with the highly publicized initial public offering ("IPO") of Facebook, Inc. ("Facebook" or the "Company") /quotes/zigman/9962609/quotes/nls/fb FB -8.90% . In the IPO, Facebook sold more than 420 million shares of the Company's common stock to the public at a price of $38.00 per share, of which approximately 180 million shares were sold by the Company and approximately 240 million shares were sold by existing stockholders. As a result of the IPO, Facebook received net proceeds of approximately $6.7 billion and the selling stockholders received approximately $9 billion.

The Complaint, captioned Lazar v. Facebook, Inc., et al., was filed today in the Superior Court for the State of California, County of San Mateo, on behalf of a class consisting of all persons or entities who purchased the securities of Facebook pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with the Company's IPO (including investors who purchased shares through May 22, 2012). The Complaint alleges, among others, that the offering materials provided to potential investors were negligently prepared and failed to disclose material information about Facebook's business, operations and prospects, in violation of federal securities laws. A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email at shareholders@glancylaw.com, or visit our website at http://www.glancylaw.com .

Specifically, the Complaint alleges that Facebook, certain of the Company's executive officers and directors and the underwriters of the IPO failed to disclose that during the IPO roadshow, the lead underwriters, including Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, and Goldman, Sachs & Co., cut their earnings forecasts and that news of the estimate cut was passed on only to a handful of large investor clients, not to the public.

On May 22, 2012, Daily Ticker published an article titled "Facebook Bankers Secretly Cut Facebook's Revenue Estimates in Middle of IPO Roadshow," which in relevant part disclosed that "Facebook's lead underwriters, Morgan Stanley, JP Morgan, and Goldman Sachs all cut their earnings forecasts for the Company in the middle of the IPO roadshow." Moreover, the article disclosed that "news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook." The article concluded that, "during the marketing of the Facebook IPO, investors who did not hear about these underwriter estimate cuts were placed at a meaningful and unfair information disadvantage." By the close of trading on May 22, 2012, shares of the Company's stock declined to $31.00 per share, a commutative loss of $7.00 per share from the IPO price of $38.00 per share, in only three days of trading.

Institutional and individual investors that purchased Facebook's shares who wish to discuss this action or their rights or interests with respect to these matters, are welcome to contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1925 Century Park East, Suite 2100, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224, by e-mail to shareholders@glancylaw.com, or visit our website at http://www.glancylaw.com .

The spotlight is shining on Silicon Valley’s business software companies Friday, with both Sunnyvale-based Proofpoint and Santa Clara-based Infoblox posting successful IPOs.

Proofpoint rang the Nasdaq opening bell, while Infoblox rang its counterpart on the New York Stock Exchange.

Proofpoint CEO Gary Steele said it’s “been an exciting day” that marks a “very important milestone in the company’s history.”

“You can walk out to Times Square and you can see Proofpoint banners and Proofpoint videos playing on the jumbotron,” he said when I caught up with him briefly by phone Friday morning.

Proofpoint’s stock closed at $14.08, up 8.31 percent from its initial price of $13. The company sold 6.3 million shares in the offering and raised $82 million.

Infoblox’s stock, originally priced at $16, closed up 33 percent at $21.30. The company sold 7.5 million shares, raising $120 million.

Both companies exceeded their target fundraising by healthy margins.

Even as China emerges as a super power, many of those who have benefited most from the country's economic rise are heading for the exits. And many are relocating to the Bay Area, whose large Asian population, good schools and comfortable lifestyle are powerful draws for Chinese multimillionaires concerned about the future of their homeland and seeking the own American dream.

"The rich people are trying to get green cards," said Ta-lin Hsu, founder and chairman of Palo Alto-based venture capital firm H&Q Asia Pacific, who spends a lot of time in Asia. He is frequently asked by business associates about how to immigrate to the United States.

"The main reason is, they still worry about the future stability of China," Hsu said. "The U.S. is a democracy, there is freedom and it's a safer place."

The exit door for many of these wealthy Chinese is opened by the fast-track visas America offers for well-heeled immigrants. Known as the EB-5, the visa requires applicants to invest $500,000 in projects in economically struggling regions or $1 million in a commercial venture in other locations. The investments must create or preserve 10 jobs for two years. If successful, the applicants and their families -- spouses and children younger than 21 -- are awarded permanent residency.

The foreign money is a welcome source of funding for many projects. Oakland city officials, for example, have eyed the program to help pay for a project that includes hotels, a convention center, shops and new facilities for the Raiders and Warriors and possibly a new A's ballpark.

In recent years, as the number of China's millionaires has grown, interest in the program from across the Pacific has soared.

Between 1992 and 2011, the number of applications for investor visas jumped 700 percent, from 474 to 3,805, according to the U.S. Citizenship and Immigration Services. In the past two years alone, the number applicants has nearly quadrupled. More applications by far come from China than any other country. Last year, 77 percent of all of those who applied for these visas were Chinese.

"They are standing in line," said Scott Bachman, CEO of San Mateo-based eBee5. His company helps pair large development projects with wealthy Chinese looking to invest in the United States.

"When I go to China, I get a Chinese cellphone and I am constantly bombarded with EB-5 (advertising) text messages," said Kevin Wright, a consultant with offices in the United States and China.

A survey of 980 Chinese millionaires published last fall by the Bank of China and the Hurun Report, which tracks the country's wealthy, revealed that 46 percent of them were thinking about leaving China, while an additional 14 percent were filling out immigration paperwork or had already left the country.

"The Chinese government is definitely worried," said one successful EB-5 applicant, who relocated his family from Beijing to Los Altos Hills after initially moving to Texas, where he invested in a metal processing factory. The man, who asked that he only be identified as Mr. Zhang, did not want to reveal his full identity because he still does business in China and does not want to upset powerful government officials.

Indeed, most Chinese who come to the United States on these visas strive to remain under-the-radar, particularly those doing business in China, whose laws forbid transferring more than $50,000 a year out of the country.

Many Americans, bruised by the long recession and its painful aftermath, worry about the United States being eclipsed by China. But many successful Chinese complain about China's pervasive corruption, polluted air, contaminated food and educational system that stresses memorization over creative thinking.

"The United States looks like a pretty good option to them," said San Francisco immigration attorney Robert Gaffney, a specialist in EB-5 visas who is fluent in Mandarin. "It's a quality of life decision for them. They are voting with their pocketbook: They'd rather be here than in their own country."

The money of these deep-pocket immigrants is highly valued in this country at a time investment funds can still be tough to acquire for some development projects.

"Local financing is just not available, or it's very hard to come by, especially for construction," said Katie Yao with Sand Hill Property, a Redwood City developer that is planning to build a hotel across the street from the yet-to-be-built new Apple campus in Cupertino.

So far, the company has found one Chinese investor interested in backing the project with a $1 million stake, with the hope of getting an EB-5 visa.

"We are only trying to raise $20 million -- that means 20 (Chinese) families," she said. "We offer 6 percent returns and profit-sharing."

By China's boom-time standards -- which often reward investors with returns of 100 percent or more -- the Cupertino hotel project hardly seems worth their interest, she admitted. However, Yao added, "People want to find a shelter for their money, someplace safe."

The investor visa, which began in 1992, will expire in September unless Congress reauthorizes it, but experts expect that to happen.

"It has enjoyed bipartisan support," said Peter Joseph, executive director for the Association to Invest In the USA, a trade group that lobbies Congress. "It's about creating jobs without spending anything from the public purse."

Indeed, the risks are borne by the immigrant investors, San Jose immigration attorney Acton Yang said.

"The EB-5 requires a risky investment," he said. "It can't be investing in a security. You can't just buy a house. It has to be a risky investment that will generate employment in the United States."

And if investors put money in something that fails -- say, a shopping center in a troubled neighborhood -- they stand to lose more than their cash, noted consultant Bachman. "If the business is dead, they not only lose their money, they lose their visas," he said.

Still, many wealthy Chinese are willing to place such bets if they trust those they are doing business with, said Zhang, whose wife and two children live in their gated Los Altos Hills home while he splits his time between China and Silicon Valley.

The number of people in China who can make a $1 million investment "is huge," he said. "I am the captain of my golf team, 40 people. More than half of them can make a $1 million investment just like that.

"The Chinese have full confidence in the United States," he added. "It will come back. That's why, from an investment perspective, there are a lot of opportunities here. At least a dozen people around me want to come here. They have the economic power. They have the means."

Groupon, which already has about 200 engineers working out of its Palo Alto office, is looking to hire as many as 100 more, boosting the Chicago-based company's headcount out West, the company tells us.

Groupon is going to host a big recruiting event for the office later this spring. The company is already buying billboards along the highways running from San Francisco to the South Bay.

The people who work for Groupon's research and development office in Silicon Valley are mostly data analysts, technologists,and developers.

The office works mostly on mobile and merchant products, including some apps for Groupon Merchants like one that allows merchants to scan groupons with their iPhones. The Groupon Scheduler also came out of the Palo Alto office.

Because Groupon has grown the office's headcount mostly through acquisition, about one-in-three employees out there are former CEOs or startup entrepreneurs.

Groupon's 40,000 square foot Palo Alto office is the building where Google's Android boss, Andy Rubin, built a company called Danger (which eventually sold to Microsoft). It's also where Dreamworks came up with the Shrek franchise.

In typical joke-making Groupon fashion, the office's first floor conference rooms are named for dangerous situations. Room names include “IRS Audit”,  "Lion Tipping," and “Zombie Invasion."

In January, Ford Motor Company announced it would build its first-ever West Coast R&D center in Silicon Valley. On Friday, Ford announced it has chosen downtown Palo Alto as the place to build it.  The new location will join research divisions already located in Dearborn, MI; Aachen, Germany; Nanjing, China; and Tel Aviv, Israel.

In January, K. Venkatesh Prasad, senior technical leader for open innovation with Ford Research and Innovation, told Xconomy that Ford was setting up shop in Silicon Valley to take advantage of the software development talent there as the automaker continues to increase its focus on in-car connectivity and the interaction between devices and cloud-based computers. Ford plans to recruit local employees in addition to rotating in employees from other Ford locations.

“The most exciting thing is the potential for really interesting interactions with startups,” Prasad said, adding that if a startup has a particularly compelling idea that’s not up to scale, Ford is willing to step in and co-create.

Competitor General Motors opened an “advanced technology” office in Palo Alto, CA, in 2006. Numerous European and Japanese carmakers also have outposts in Silicon Valley.

The dilapidated shopping center at the entrance to town on Embarcadero Road will finally, after nearly ten years, be redeveloped into a multi-use planned community, thanks to a vote for approval by City Council Monday night.

The Eichler-built development has slowly fallen into disrepair since Lucky, then Albertson’s left the main grocery space, and today that building lays vacant alongside other empty storefronts.

When Sand Hill Homes finishes the 3.58-acre Edgewood Plaza, there will be ten two-story homes alongside a remodeled retail area and a public park, all of which were designed to complement the mid-century modern architectural theme developed by Eichler, who once headquartered his firm there.

PHOTOS: Architectural Renderings of Edgewood Plaza

City staff and members of the Architectural Review Board, Historic Resources Board, and Planning and Transportation Commission spoke strongly in favor of green-lighting the Final Environmental Impact Report as well as an amendment to the civil code and a tentative map of the home subdivision.

The amendment to the city’s municipal code approves a Planned Community Zone District allowing renovation of three retail buildings, relocation of a fourth, construction of ten single-family homes, and creation of a .2-acre park and associated site improvements.

The tentative map that was approved merges what were once three distinct parcels into one giant parcel that Sand Hill will re-subdivide into eleven parcels—one commercial and ten residential—plus off-site improvements, for the site at 2080 Channing Avenue.

 “We have finally gotten to a point where a majority of the community and the applicants are on the same page,” said Curtis Williams, Director of Planning and Community Environment.

Indeed, most of the twelve public speakers who addressed Council—all of whom lived in the immediate vicinity of Edgewood Shopping Center—spoke favorably of the plan, Sand Hill’s outreach efforts, and the work of city staff. Most exciting to locals, however, is the planned addition of a Fresh Market grocery store.

“Most people are very excited about having the Fresh Market come,” said Gail Olsen, who lives in a neighboring Eichler home. She said the Albertsons that occupied that space was “dirty, the product was poor quality, and it was expensive.”

Today, nearby residents have to drive or bike away from the neighborhood to get their groceries.

“We’re all excited about having a place where we can walk and bike to do our shopping and have coffee,” said Olsen.

Council members were also largely supportive of the plan, but many of them expressed great concern over traffic and parking issues.

Council Member Pat Burt said the plan did not properly account for the fast flow of exiting freeway traffic from Highway 101, which makes it difficult for drivers turning left onto St. Francis from Embarcadero. That intersection doesn’t have a green left-turn arrow, forcing drivers to wait for oncoming traffic to pass. Since traffic from the freeway is often going 55 miles per hour, and comes as a steady stream during rush hour, the drivers going the opposite direction have to wait a long time to make that turn.

“I think that’s a big part of what makes this real hazardous,” said Burt. “We need to figure out ways that we’re going to be able to address those issues.”

Chief Transportation Official Jaime Rodriguez said that a green left-turn arrow would certainly help mitigate that intersection, and adding a signal would cost somewhere in the ballpark of $120,000.

Burt later motioned that that upgrade be made a condition for approval of the project.

Parking was also a major concern, since the new plan reduces the number of parking spaces from the existing 250 to 156. Sand Hill hired a third party traffic analysis firm to assess parking needs, and they concluded that 156 spaces would be sufficient. City staff agreed with those findings and signed off on the result.

Council Member Karen Holman noted, however, that the existing office building being used by the Maharishi Enlightenment Center of Palo Alto will require more than 60 parking spaces if it is ever used as an office again. If that occurs, said Planning Director Curtis Williams, the applicant will have to find a way to deal with parking, which may be impossible since the parking lot will be at full capacity.

Council members also worried about the reduction of the number of driveways to and from the parking lots from six to two. But again, city staff agreed with the analysis done by traffic experts, who concluded that two access points would be enough.

Council Member Burt was the first to motion to approve the plan, along with two additional amendments—one for the left-turn arrow onto St. Francis, and another requiring the driveway in the rear of the Shell Gas Station to remain open.

“The community has been looking forward to this project for along while, and I think we have something that is a very good balance of a variety of competing interests,” said Burt. “No balancing act is ever perfect, but I think this is one that has worked very hard to come up with something that I think the community will be very pleased with once it is built.”

Council Member Greg Scharf seconded the motion and thanked developer Jim Baer for his commitment to working closely with neighbors, and for bringing in another place to buy food.

“I’d like to thank the applicant for bringing a grocery store,” he said.

One by one, the rest of the council members offered enthusiastic—if measured—support for the project, with the exception of Karen Holman, who, although generally supportive, wasn’t satisfied that the EIR was complete and therefore could not support approval.

After more than three hours of debate, City Council voted to green-light Edgewood Plaza on a 8-1 vote with Holman voting against.

via paloalto.patch.com

Just weeks after announcing nearly $2 million in seed funding, GetHired.com has opened its doors on University Avenue with a team of 14.

Palo Alto Mayor Yiaway Yeh joined Chamber of Commerce CEO Paul Wright and Downtown Business and Professional Association Executive Director Russ Cohen in welcome GetHired CEO Suki Shah and his team at a ribbon-cutting ceremony Thursday afternoon.

“Palo Alto is an incubator of leading growth companies,” said Suki Shah, co-founder and CEO at GetHired.com. “We’re honored to launch in the same office that Intuit started out in – and in the same town that Facebook, Google, Sun Microsystems and PayPal got their start. These companies have been game-changers in their respective industries, and I am confident that GetHired.com will make a significant mark, as well.”

Wright said GetHired.com will be a great platform for job-seekers and companies alike, due to their ability to marry the services used by both parties into one service.

“I think it’s an excellent fit,” he said. “If you think about the technology businesses that are in this space, they’re perfect for serving that market.”

GetHired is a video-based social recruiting platform that allows employers to, in addition to simply posting jobs, also ask video and audio pre-screening questions that allow applicants to offer more detail than a simple resume offers. The service also includes an applicant tracking system for employers to manage candidates and onboarding. And, it’s free.

“We help bring the cost down from tens of thousands of dollars for an employer down to nothing,” said Shah.

Mayor Yeh said that GetHired will bring new energy to Downtown, as evidenced by the house music bumping in the office.

“You bring the vibrancy to our downtown,” he said. “You bring a lot of energy. The music was not staid, not very plain when we walked into your office today. There was a very clear beat. And that reflects a lot of the energy that you bring.”

Russ Cohen, who presented Shah with a “Downtown Crown” award, said GetHired’s decision to come to Palo Alto is emblematic of many companies who realize the value of capitalizing on the city’s talent pool and capital resources.

“GetHired has recognized—like many other companies have recognized—the power of being in Downtown Palo Alto,” he said. “They know that they can find talent just by walking out in the street and going to lunch.”

Eight years after the fateful decision by a Harvard sophomore to spend a summer in California working on his new website, that choice is about to pay off in a big way -- not just for Mark Zuckerberg and the roughly 3,000 employees of Facebook, but for Silicon Valley and the rest of the Golden State.

Even as Facebook begins the process -- through a securities filing widely expected Wednesday -- of offering its stock to the public, the wealth being created by the company is already rippling through the local economy, and experts say the IPO will buoy the valley even more in future years.

Anticipation of the biggest IPO ever for an Internet company has real estate agents seeing a note of urgency in the local market, Wall Street money managers moving in for a piece of the action, and even state budget analysts factoring in a "Facebook effect" that could top $1 billion.

The Facebook IPO "is a continuation of this little mini-surge we're having right now" in the valley's economy, said Stephen Levy, director of the Center for Continuing Study of the California Economy. Unlike the dot.com boom and bust, Levy said, fast-growing social networking companies such as Facebook, Zynga and LinkedIn "are real companies, many of them with millions of customers."

Wealth managers working with Facebook employees say the IPO could easily mint 500 to 1,000 new millionaires -- perhaps as much as one-third of the company -- with many engineers who joined Facebook in its first few years in line to own $10 million or more in stock. Zuckerberg, who is thought to own almost one-quarter of the company, could end up worth well over $20 billion.

Even though some reports late Tuesday suggested that the IPO could be as little as half the expected $10 billion, Realtors say the buzz around Facebook is already sparking the long moribund housing market. Potential sellers want to know whether they should sell now or wait, and buyers are fervently pushing their agents to get into the Peninsula housing market before the IPO, anticipating rising prices as the newly wealthy compete for the hottest neighborhoods from San Francisco to Palo Alto.

Real estate boom

The IPO could value the company at as much as $100 billion. Although a real estate boom is far from guaranteed -- some agents believe the boost to the market will be limited and will trickle out over time as employees gradually gain the right to sell their stock -- high-end mortgage bankers are staffing up, too, expecting business to surge.

"What we're seeing is just the possibility of a large IPO is creating a real sense of urgency in our market, both for buyers and for sellers," said Omar Kinaan, of Re/Max Distinctive Properties in Menlo Park.

Sniffing a big payday, Wall Street wealth management firms are opening new offices or expanding in the Bay Area to woo not only Facebook engineers, but also employees of LinkedIn, Zynga and other startups that have gone public. And with many of Facebook's engineers and executives working through an extensive interview process to hire the firms that will manage their new wealth, smaller, local wealth management firms are in the fight for new clients, too.

But however successful Facebook's IPO becomes, don't expect a replay of the financial promiscuity of the 1998-2001 boom, say wealth managers and real estate agents working the social network's new millionaires. Like Zuckerberg, who has long driven a well-used Acura and until recently lived in an inconspicuous rented house a few hundred yards from his then-Palo Alto office, the Facebook fortunati are likely to be more savvy, and less showy, with their wealth than the Internet boomers of the 1990s.

While news reports have featured rumors of Facebook employees planning to spend their new riches on things like archeological trips to the South American rain forest or buying flashy cars, many Facebookers appear to have more grounded plans.

"You might call it, 'the Club of Unpretentious Pretentiousness,' " said Miles McCormick, a veteran real estate agent based in downtown Palo Alto who has represented Facebook employees. "Everyone knows they have wealth now, or they are going to get considerably more wealth shortly, but it's much more subtle" than the 2000 boom.

Still, Carole Rodoni, a real estate agent and economist, expects a price explosion in places popular with the young social Internet crowd, such as Pacific Heights, Noe Valley and south of Market area in San Francisco, and Hillsborough, Atherton and Palo Alto.

"In 2000, they didn't care -- it was bigger, better bling," she said. "But these kids today, because of what they've been through (with the dot-com bust) they are very attuned to statistics and numbers. They will buy the home in the right area, but you have to convince them it's going to help them create wealth. They are not going to just give it away, the way the guys did in 2000."

Of course, the purse strings may loosen if one tech tribe butts up against another over a piece of property.

"You get a Yahoo (YHOO) guy against a Facebook guy against a Zynga guy against an Apple (AAPL) guy against a Google (GOOG) guy, then it's not just about the house," Rodoni said. "It's about the egos."

For the rest of us, Facebook's impact on the state's budget, which has a projected $9.2 billion revenue gap through mid-2013, may be the broadest example of the Zuckerberg dividend.

State officials recently declared they will need to adjust revenue projections upward for the 2012-13 fiscal year because of "the Facebook Effect."

But quantifying the benefit is impossible.

"The best that any expert can offer is a somewhat informed guess," Deputy Legislative Analyst Jason Sisney said in an email. "The range of error around any such guess is very, very large. The positive revenue effect for the state could be $300 million, $500 million, $1 billion, $1.5 billion, or something else. No one knows."

Bigger than Google

One model analysts are looking at is Google. A state Department of Finance estimate of the capital gains tax impact of Google's IPO, which raised $1.7 billion, was at least $142 million, and potentially more, in the two years after going public in 2004.

Timing also plays a role in Facebook's economic impact. Employees are expected to have a 90 to 180 day "lockup" period in which they can't sell their stock after the company starts trading publicly. If Facebook starts trading in mid-2012, it could be 2013 before employees can begin to liquidate their holdings.

Most experts agree the economic benefit will filter out gradually, in part because many Facebook employees have already sold some of their shares on the secondary market. Another limiting factor will be whether those who still hold large amounts of Facebook stock decide to stay in the Bay Area.

Michael Spector, CEO of Vista Wealth Management, said several of his clients who were early Facebook employees have already moved to states like Washington, Florida and Texas to avoid California income tax.

"There is a big wave" of wealth, Spector said. "But I've got to tell you that wave of wealth, most of those people did not build their lives here" and may leave.

The Palo Alto Downtown Streets Team is many things to many people: A second chance for someone down on their luck, a guarantee of clean sidewalks for a business owner, an elegant solution to homelessness for an elected official.

A charity, however, it is not.

"We give a hand up, not a handout," program operations manager Chris Richardson said pointedly during a recent interview.

Since its humble beginnings in 2005 as a $45,000 program designed to move homeless men and women into permanent housing and jobs, the Downtown Streets Team has bloomed into a nonprofit company with an annual operating budget of nearly $1.3 million. And it shows no signs of slowing.

A second team is operating in San Jose and "franchises" have sprouted in the south part of that city, Gilroy and Daytona Beach, Fla. Santa Barbara is poised to join that list soon. Meanwhile, interest is pouring in from around the country, from Oregon to New Jersey to Tennessee.

"We've created a lot of national buzz," said Richardson.

The model is basic. Men and women ready to leave the streets behind agree to work 20 hours a week -- sweeping city sidewalks and parking lots, for example -- in exchange for shelter and meals. Along the way, they acquire job and life skills, as well as rediscover their self-worth, Richardson said.

"Once they get to the point where they feel good about themselves and want to make a change, we don't hold them back," he said. "We can't."

To date, more than 100 participants have found part-time and full-time jobs; hundreds have been placed in temporary positions, according to Richardson. A total of 98 have found permanent housing.

Between the Palo Alto and San Jose Downtown Streets Teams, roughly 70 people are enrolled at any one time, Richardson said. The organization doesn't recruit because the waiting list is already long enough.

The Downtown Streets Team counts on traditional foundations and donors for just 30 percent of its budget, said Richardson, adding that the goal is to be 86 percent self-sufficient by 2014.

"We realize we cannot fund this through donations alone and have the impact we want to make," he said.

Developer Roxy Rapp said the Downtown Streets Teams has achieved its initial goals of cleaning up downtown Palo Alto and reducing homelessness. Both were a major concern for businesses surveyed in 2004.

"We still have homeless, but I don't think it's as bad as it was. The panhandling doesn't seem as bad as it was," said Rapp, adding that he has backed the organization since its inception.

Mayor Sidney Espinosa said the Downtown Streets Team has figured heavily into the city's efforts to address homelessness. The city council provided $25,000 of its starting budget.

"On all points, it's been a huge success," Espinosa said. "It was envisioned as a win-win-win for the businesses, the city and the homeless. And I think it's still that win-win-win today."

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Two luxury car companies have come under one Palo Alto franchise to offer wealthy car enthusiasts their choice of a 400-horsepower hybrid, or the fastest car on the road—oh, and they're right down the street from Tesla's headquarters.

McLaren Automotive, the British maker of the MP4-12C beast that tops out at 205 miles-per-hour, and Fisker Automotive, producer of the Karma gas-electric hybrid, are test driving both models out of their new location at 4190 El Camino Real, on the corner of Arastradero Drive. The dealerships opened their doors roughly a month ago.

Inside the sparkling new showroom, Gary Anderson, the managing director for both dealerships, hustles between phone calls while prepping for an 11 p.m. test drive with a pote

ntial buyer. The sleek and curvaceous Karma EcoChic is parked outside, plugged into a power source.  

Things are hectic, he said, because Fisker and McLaren landed a sweet spot in this week's San Francisco International Auto Show.

"We have had so much interest," Anderson said, referring to the the more affordable Fisker hybrid.

Before the customer arrived, Anderson took the silver four-door hybrid for a spin. The EcoCh

ic is Fisker's flagship model. Leather and suede interior. Twenty-two inch rims. A pounding, touch-screen stereo system and a push-button drive-park-reverse mechanism that looks more science fiction than shifter.

The engine barely sputtered a sound as he accelerated on the way to 60-miles per hour in 6.1 seconds. Even with that raw power, the Karma manages 112 miles-per-gallon under optimal conditions, according to the company.

"It is the most amazing vehicle I have driven," Anderson said. "And I have had the luxury of driving almost everything with four wheels."

True speed freaks, however, might want to shop next door at McLaren. The company set a record in 1998 with its F1 model, which maxed out at  243 miles-per-hour. The slightly slower MP4-12C — a car Anderson called a "Ferrari beater" — has a 3.8 liter V8 engine that boasts just under 600 horsepower. 

But with an average price of $275,000, many wealthy buyers will be priced out of the ultra-luxury line.

Fisker's three

Karma models, on the other hand, run between $98,500 and $112,000. And Palo Alto packs the consumer spending power to make Fisker a mover, Anderson said. Since it opened, the Palo Alto location has received close to 80 orders.

On Tuesday alone, three people test drove the Karma and two put down the required $5,000 deposit to buy one. Anderson said buyers should expect a three-month shipping period. 

The company would not release overall sales or production numbers, but a company spokesperson said Fisker hopes to hit the 15,000 sales mark in the next two years, once the assembly line pumps out three new hybrid models, including a convertible and possibly a SUV. The Karma line is manufactured in Finland, but Fisker bought and is currently overhauling a former GM plant in Delaware to manage the future models.

Packing the latest in hybrid engineering, Fisker developed and uses "EVer," a similar technology to Toyota's "synergy drive" found in its Prius line. Karma's internal combustion engine, for example, charges the battery while running.

The battery, which runs the length of the car and weighs 900 pounds, charges in six to 14 hours an

d offers a drive range of roughly 50 miles. At that point, the gas engine aids the dual-electric motors, boosting the range to about 300 miles. If plug-in stations can't be found, Fisker hybrids can run on gas alone in a pinch.

That aspect separates Fisker from its high-end competitor and bitter rival Tesla Motors, which makes smaller, all electric cars for roughly the same sticker price. For buyers looking for a pure-green machine, Tesla has a showroom in Menlo Park.

The Fisker-Tesla feud dates back to a 2008 lawsuit filed by Tesla against Fisker's Danish-born owner Henrik Fisker, claiming he stole and used Tesla technology while working for the company as a consultant. Fisker had been hired for $875,000 to design the exterior of Tesla's first car. The case was thrown out of court later that year, resulting in Fisker winning $1.44 million in attorney's fees.

"It's not a friendly rivalry," Anderson said. "But our cars are very different. Fisker is hybrid, so our customers have no range-anxiety."

A Tesla representative could not be reached for comment.

Despite that bad blood, both companies share something substantial. They are start-up leaders in the rebirth of the American auto industry. From the Smart Car to the Chevy Vol

t to the Nissan Leaf, hybrid and pure-electric technology is emerging throughout the auto market. 

The shift caught the eye of the Obama administration and the Department of Energy, which loaned Tesla and Fisker $465 million and $529 million, respectively. 

The loans, designed to spur development and create jobs, originated in a $7.5 billion congr

essionally-approved reserve fund created to cut American dependence on foreign oil, said Dan Leistikow, the department's director of public affairs, in a statement last month.

"These are start-up companies that intend to grow over time," he said in the statement. "So they are following a common pattern for emerging companies: starting with a premium product for a smaller customer base, and eventually moving to lower cost, mass-marketed products as they gradually scale up operations."

In Palo Alto Tuesday, Anderson agreed that prices for hybrid and electric cars will steadily drop into most consumer price ranges. With it's tech-savvy, wealthy residents, Palo Alto alone is expected to sell between 200 electric and hybrid cars and many thousands in the next few years, Mayor Sid Espinosa said, quoting a study by the California Energy Commission.

And it could bring a windfall to the city if car shoppers buy local. With close to 80 Fiskers on order from the Palo Alto location alone, the city stands to bring home $80,000 in sales tax this financial year.