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HomeMy WebLinkAbout2024-09-18 Retail Committee Summary MinutesRETAIL COMMITTEE SUMMARY MINUTES Page 1 of 7 Regular Meeting September 18, 2024 The Retail Committee of the City of Palo Alto met on this date in the Community Meeting Room and by virtual teleconference at 9:00 A.M. Present In-Person: Burt, Kou (Chair), Lythcott-Haims Absent: None. Call to Order The meeting was called to order by Chair Kou. The clerk called roll with all present. Public Comments The clerk reported there were no public comments. Agenda Items 1. Discussion and Recommendation to the City Council to Initiate Various Near-, Mid- and Long- Term Amendments to the City’s Zoning Code (Title 18) Related to the City Council’s Economic Development and Transition Priority. Steve Guagliardo, Assistant to the City Manager, indicated the hope was to engage the Retail Committee in discussion about how to proceed with this. It responds to comments and recommendations they heard from the business community on how the City can be addressing a regulatory environment. There would be time at the end to talk about the Economic Development Activity Report if the Committee chose to. Jonathan Lait, Director of Planning & Development Services, provided a PowerPoint presentation about amendments to zoning code to include a background, recommendations for near-term code revisions, recommendations for mid-term code revisions, recommendations for long-term code revisions, office-related code revisions that were not recommended, parking- related code revisions that were not recommended and the next steps. Assistant to the City Manager Guagliardo added Palo Alto was not the only city looking at expanding their uses in commercial cores. He discussed revisions recently made by Mountain View. Chair Kou wanted to understand how robust the PTC meetings were when this subject came forward. She indicated it would be important for the public stakeholders to be engaged so that SUMMARY MINUTES Page 2 of 7 Retail Committee Meeting Summary Minutes: 09/18/2024 when the recommendation from PTC comes forward after they have examined and analyzed all the different recommendations and suggestions then they could take the input of the public while making those analyses. Director Lait remarked there were a number of meetings with some attendants watching online. There was not a lot of public engagement on the different discussion points. Council Member Burt referenced the third item on slide number four asking if it was meant to be a choice. He wanted to know where staff stood regarding elimination of non-retail of allowing any office or allowing services or more appropriate uses than eliminating it completely from the geographic area. He queried if staff had looked at which near-term things might be more appropriate under the notion of the possibility of an emergency ordinance. He asked if they had looked at the overall impact over an extended period of time on parking availability combined with their intention to have significant residential downtown combined with AB 2097 if they were in a direction of greater online sales, fewer traditional goods being sold and more food and beverage. He observed under AB 2097, they cannot mandate any parking but do not have to allow the interchangeability of uses. He asked if there was a way to condition interchangeability on a certain amount of parking or an in lieu. He mentioned a series of issues when looking at the NVCAP and wanted to know the definition of the distance from the train station and do they have the authority to require ADA parking and EV requirements. He noted the intent of the law according to the legislative record was to not exclude EVs and ADA parking. Regarding alcohol not requiring a CUP, he asked if staff had considered whether they would look at beer and wine versus alcoholic licenses. Director Lait answered the recommendation is either repeal the retail preservation ordinance or amend the retail preservation ordinance. The amendment would include looking at the geographic span. He explained they thought retail preservation required a more nuanced approach to how it would apply. He thought there were areas where retail preservation does not need to extend as extensively as it does. There are other policy documents in the City, specifically guidelines for the South El Camino Real area, that have identified this notion of nodes of commercial activity. Those would be areas they would want to retain retail preservation or at least have some standards for it. There are also some regulatory aspects of the ordinance itself that require a square foot for square foot replacement of retail. In some areas, that has been reduced to replace it with 1500 square feet. That would be another area that could be looked at it. The staff’s perspective was that there are opportunities to make some refinements to the retail preservation ordinance if the Council does not want to just rely on the GF and R combining districts. He remarked they could talk more about the process whether it is an urgency or interim ordinance that goes straight to the City Council. All of the near-term items could be included in that with the one caveat about the retail preservation piece. If the Committee selected not to include some of the near-terms, they could forego that and pick that up subsequently. Director Lait explained that the recommendation does not have a significant impact in terms of affecting policy on the two downtown areas because parking is not required for any of those SUMMARY MINUTES Page 3 of 7 Retail Committee Meeting Summary Minutes: 09/18/2024 uses under that state law. If they start seeing a lot more parking intensive uses that were also being categorized as retail or retail-like, there could conceivably be some increased parking challenges in those areas. He does not know how that would be mapped out to understand the long-term implications. At this time, it appears the parking resources are not being fully utilized. His initial inclination on conditioning interchangeability was that they could not but that would require more discussion. He added that the state takes positions on increasingly more local land use issues. For housing, if they make changes to the density, there is a challenge for local jurisdiction to roll that back. He did not know of a similar consideration for parking other than AB 2097. Regarding NVCAP, that was the reference in the staff report to not seek ad hoc guidance on those issues because they would be bringing those issues to the City Council in October. He explained none of the recommendations change the city's current process for obtaining a conditional use permit for alcohol but if the Committee was interested in that, it could be further explored. Assistant to the City Manager Guagliardo added if they were to amend that item, they could the geographic applicability and ease the restrictions on retail use. Ed Shikada, City Manager, agreed with Director Lait regarding conditioning interchangeability. He thought that might fall under a conditional process to the extent that the focus was to facilitate the filling of the retail-like spaces would likely conflict with that goal. Council Member Lythcott-Haims wanted a sense of why Redwood City, Los Altos and Santa Monica 3rd Street Promenade were chosen and not Burlingame. Director Lait explained this was started before it went to the PTC in parallel when the Street Sense report was going on and they had just identified different cities at that time. He acknowledged Burlingame should have been included. Chair Kou requested clarification of the timeframe of mid-term and long-term. She asked for an explanation about retaining the ground floor retail if you are repealing it. She wanted to further understand the new definitions for retail and retail-like. She thought it would be helpful to look at where the high demand for retail and retail-like were located on the map and other areas that would not be appropriate. She was not ready to have parking interchangeability until she understood AB 2097 better. She wanted clarification on modest adjustments to parking requirements. With regard to eliminating the CUPs for certain retail and retail-like and if alcohol is involved as well, she asked what kind of levers are put in place for noise and bad behavior. She thought it would be beneficial to understand the pros and cons on ancillary versus primary alcohol usage regarding requiring CUPs. On the formula retail, she asked how it went from 10 to 50. Director Lait indicated near-term is six months from Council authorization. He explained there is a combining district in the downtown area and portions of Middlefield and that is the ground floor combining district that requires ground floor retail uses already. Those would stay in place even if the retail preservation ordinance was lifted. He indicated two maps showing those areas were included in the packet. He discussed the parking square footage requirements. He SUMMARY MINUTES Page 4 of 7 Retail Committee Meeting Summary Minutes: 09/18/2024 admitted modest was a subjective term and should not be included in the report. He noted for more commercial areas, in light of AB 2097, there is no parking required for those. It has more impact on Middlefield, Charleston and El Camino. He explained the zoning code sets forth a number of objective standards about what kind of activities can take place when in the city and there is a cut off for most land uses. They do not have a lot of late night operations. The conditional use permit is only required when alcohol is introduced. In those instances, they impose additional conditions. He added that one of the recommendations had to do with creating more objective standards for conditional use permits. Another way to look at that is to develop those type of objective standards that would address those situations, particularly if the Committee and ad hoc were interested in not requiring a CUP for beer and wine they would then replace that with objective standards. They could possibly do that through a near-term action. He discussed the threshold of 10 or 50 on formula retail explaining it takes a look at national brands. If there are more than 10 of those types of businesses across the nation then a conditional use permit would be required. The threshold of raising that to 50 means if there are 49 of those brands nationally, then you could enter the Palo Alto market without a conditional use permit. He indicated it was the consultant’s idea to go to 50. The recommendation from the consultant also talks about just looking at the California market as opposed to the United States. Just looking at the California market would allow for more uses to come in without the need of a conditional use permit. Looking at the entirety of the United States, there might be a lot of uses on the East Coast or elsewhere in the nation that want to break out to the West Coast but if they trip that threshold, they may require a conditional use permit which can be a barrier to some new uses being established. Assistant to the City Manager Guagliardo thought it would be helpful to decide whether to address it through objective standards if the alcohol is ancillary to the use versus if it is a primary use. Dan Wery indicated the number of 50 might have come from some of the examples they evaluated when they were going through the analyses. He stated it was 50 nationwide. He thought 50 came from a comfort level of PTC. Council Member Burt asked about the implications of AB 2097 going forward and if that meant that new development, whether it be office, retail, or housing, could not have any parking requirement either directly or the in lieu. Mr. Wery was concerned that in the long run it would mean they would end up without parking. He recalled 70 to 80 percent of retail sales were from the daytime population. He thought it was a community issue and thought they would have to build a garage in the longer run. Item 1 Public Comment 1. Brad E spoke in support of the PTC’s recommendations. He did not understand why they would want to limit national restaurants on Cal Ave. He suggested going back to the SUMMARY MINUTES Page 5 of 7 Retail Committee Meeting Summary Minutes: 09/18/2024 2009 zoning ordinance. He pointed out that the parking assessment district is still in the code even though the garage bonds had been paid off and they should be looking at assessing that district and allowing the fees to be charged. He felt CUP was a failure as it was a massive barrier to entry. He advised simplifying the code, broadening the definition of retail uses, reducing barriers, and giving staff discretion to make decisions. 2. John S, Thoits Brothers, volunteered to help participate or lend a perspective. He stressed it is critical to have sufficient parking for retail. He heard there was an impression that there was extra parking, but he stated that was not the case. He opined street parking was the most valuable parking to all retailers. He maintained that parklet requirements were a horrible policy and scared retailers. 3. Charlie W recalled asking Council to support the recommendations provided by Street Sense for the economic development strategy a year ago. He still supported the recommendations from the staff report, particularly around relaxing formula retail restrictions. 4. Roxy E opined that Palo Alto is missing flexibility. He discussed a potential business that would have supported other retails but got turned down. He thought Stanford should have been included in the retail core. He agreed Burlingame should have been included in the sales. He talked about a national firm that was lost to Stanford because he did not want to have a parklet in front of the store. 5. Joshua S agreed that accessibility into the downtown core was critical. He agreed with the idea of enhancing and expanding retail uses. He thought adding CUPs was not necessary because it would cause uncertainty for a retailer causing them to look for alternatives. Chair Kou agreed with the suggestion that Burlingame should be included. She thought they should look at how to differentiate themselves from Stanford and Town & Country. Council Member Burt observed that comparing Burlingame to Stanford Shopping Center and Town & Country was an apples to oranges comparison. He did not think they had thought through what interchangeability would mean longer term with AB 2097 well enough and did not support including it in the urgency ordinance and recommended referring it back to try to have some better analysis and reconciliation of those tensions. He did support going forward with staff recommendations two and three on the urgency ordinance. They needed more clarity on four if the boundary is based upon the definition of distance from the transit station being the boarding area or from the furthest edge of any transit area properties. Regarding the boundaries of the retail preservation ordinance, he discussed resolving how and where the uses are liberalized or if restrictions on use are eliminated. He mentioned a separate issue within the core retail issues that was if uses were liberalized that did not require a conditional use permit, would it be done on Main Street as well as the side streets. He thought that was where they would want to concentrate core retail activity and the other more liberalized uses could be in SUMMARY MINUTES Page 6 of 7 Retail Committee Meeting Summary Minutes: 09/18/2024 the adjacent areas. He continued to look for that to come forward with that kind of recommendation. Director Lait explained the way they were currently applying AB 2097 was from a point that approximates a discrete location on the platform and then go a half mile from that which is the boarding area. Based on how the radius is drawn on number 4 there are 16 properties that are in the downtown that are not included and this recommendation would be to extend it to those 16. This was discussed by City Council during the NVCAP conversation and can be addressed in October when they are before the Council again seeking direction on how to proceed. City Manager Shikada suggested providing the general parameters as they narrow in to a recommendation would be helpful to staff. Chair Kou asked about the recommendation option of doing the urgency ordinance where it goes straight to council and on a consent. She observed there were certain things that could be put on the urgency and go straight to Council but there were others she thought needed more robust discussion. She suggested to go ahead with picking the urgency ones that could move quickly along. She agreed with moving number two along and asked if that would be limited to restaurants. City Manager Shikada clarified they were looking for a recommendation to Council at that time. That recommendation would be the next step to either proceed with the urgency ordinance which would have it go directly back to council versus a referral back to staff and PTC to develop a more robust process before bringing it back to full Council. Director Lait stated the recommendation on number 2 was to raise the threshold from 10 to 50 and have it only apply to formula restaurants and there is an outstanding question as to whether or not that will be 50 nationwide or just in California. There would be no CUP requirement for formula retailers. He stated recommendation two only applied to the California Avenue area. Council Member Burt wanted to make the distinction on number 2 for goods retailers and the California 50 restaurants. He had concerns on the proliferation of exercise uses on the main street. Assistant to the City Manager Guagliardo said they could incorporate that if it was the will of the Committee. There was discussion about the wording of the motion. MOTION: Council Member Lythcott-Haims moved, seconded by Council Member Pat Burt, to recommend the City Council: 1. Direct staff to bring an urgency ordinance with the following recommendations: SUMMARY MINUTES Page 7 of 7 Retail Committee Meeting Summary Minutes: 09/18/2024 a. Approve recommendation #2, raising formula retail threshold from 10 to 50 (based on number businesses in California) 3-0 straw poll b. Approve recommendation #8 but excluding gyms directly on California Ave 3-0 straw poll c. Approve recommendation #7.1 of retail-like definition 3-0 straw poll d. Approve recommendation #6 3-0 straw poll 2. Direct staff to: a. Analyze Recommendation #1 with analysis of AB 2097 and interchangeability of uses and evaluate reactivation of parking assessment district 3-0 straw poll b. Analyze Recommendation #3 to amend retail preservation ordinance and evaluate geographic boundaries for its application and permitted uses for what remains within potentially amended boundaries 3-0 straw poll c. Analyze Recommendation #7.2 3-0 straw poll d. Carry out Recommendation #5 3-0 straw poll e. Recommendation #11 and #13 to merge with Recommendation #15 3-0 straw poll f. Carry out Recommendation #15 3-0 straw poll 3. Reject the following recommendations: a. Recommendation #4 3-0 straw poll b. Recommendation #9 3-0 straw poll c. Recommendation #10 3-0 straw poll MOTION PASSED: 3-0 2. Economic Development Activity Report Chair Kou suggested to continue at the next meeting. Future Meetings and Agendas None. Adjournment: The meeting was adjourned at 11:01 A.M.