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HomeMy WebLinkAbout2024-10-16 Retail Committee Summary MinutesRETAIL COMMITTEE SUMMARY MINUTES Page 1 of 10 Regular Meeting October 16, 2024 The Retail Committee of the City of Palo Alto met on this date in the Community Meeting Room and by virtual teleconference at 9:05 AM. Present In-Person: Burt, Lythcott-Haims Present Virtually: Chair Kou arrived at 9:08 AM Absent: None Call to Order Council Member Burt called the meeting to order. The clerk called roll and declared two were present. Council Member Burt voiced why the meeting had started late. He announced that Chair Kou was attempting to join the meeting. Public Comments Stephen L. shared how his family and neighbors used retailers in the downtown area. He hoped vacant spaces would be filled. John S. hoped there would be more focus on the happenings with the new parklets. He was concerned that retailers did not understand the parklet policy and thought they needed more information defining parklets. The clerk noted that Chair Kou was present in the meeting. Chair Kou thanked Council Member Burt for starting the meeting. She invoked AB 2449 and announced that no one under 18 years of age was attending the meeting with her. She asked Council Member Burt to help her in chairing the meeting since she was attending virtually. Agenda Items 1. Planning for November Study Session on Filling Retail Vacancies Assistant to the City Manager Steve Guagliardo commented that this item was in response to a number of conversations that had occurred at Retail Committee since March regarding retail SUMMARY MINUTES Page 2 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 vacancies, especially in the commercial core. Staff understood there was a desire for the Committee, the business community, and other stakeholders to engage in a constructive and participatory manner. There had been limited dialogue to date, but there was a desire for a study session to engage in a more substantial manner. This meeting was about planning the November study session to address retail vacancies. He displayed slides and noted that vacancies could be addressed with communication and collaboration through partnerships with the private sector, which required engagement and a clear understanding of what the engagement could look like. They proposed a study session at the November 20 Ad Hoc Retail Committee meeting to address vacancies, specifically in the downtown core and California Avenue commercial core, to better understand stakeholders’ perceptions of retail, retail-like options, and options for addressing retail vacancies. He furnished a slide listing potential areas of discussion and asked for the Committee’s feedback in narrowing down the list. The areas of discussion would shape how outreach would be done and the structure of the meeting. He discussed meeting structure and format. It was important to remember that the Committee was a Brown Act body, although there was flexibility in structuring the meeting to get participation and better engage with stakeholders through a study session. Staff recommended a semistructured discussion between Ad Hoc Retail Committee members and stakeholders, which he outlined. A panel conversation was an alternative option, but staff did not recommend it. He discussed the importance of engaging with internal and external participants. Coordination would be necessary to tailor participants to the areas of discussion the Committee desired to explore. Staff wanted the Committee’s feedback today and hoped this addressed broader engagement to allow stakeholders more than three minutes of speaking time. Following this, staff would work with the City Attorney’s Office to structure the conversation, reach out to stakeholders for participation, and prepare a report with the structure and areas of discussion, which would go out in packet and could also be used as a marketing tool in the outreach effort to ensure people’s understanding of the November 20 meeting. Public Comments Steven L. had written a letter that included two general principals, which he summarized. He wanted to hear what the property owners of vacant spaces thought was necessary to fill the spaces. He thought engagement in financial feasibility was key to solving the vacancy problems. John S. spoke of entitlement and development processes, which he did not consider a great problem; uncertainty of access in parking, which he indicated was a big issue; parklets, which he begged the Committee to reconsider the policy; trends in retail, which he thought the retail zoning ordinance and the uses allowed without going to a CUP had to be done; potential vacancy tax, which he proposed postponing; and activating storefronts, which he felt should be encouraged. Chair Kou requested that Council Member Burt manage the Committee discussion and question portion of the meeting. SUMMARY MINUTES Page 3 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 Council Member Lythcott-Haims suggested the length of the November 20 meeting be extended. She wanted to discuss all or most of the areas of conversation that had been listed on the slide. She was excited about reviewing the entitlement planning and development process, and she thought concerns related to parking, parklets, and trends in brick and mortar needed to be discussed further. She felt that local trends in brick and mortar were more relevant than national and state trends and she wanted the topic narrowed to local trends. She agreed with postponing the potential vacancy tax. She believed someone needed to speak to the benefits of a property tax upon presenting that subject. Activations of vacant storefronts excited her, but she explained that there was a vast difference in putting art on windows and activating microbusiness popups. Regarding structure and format of the study session, she appreciated the recommendation to have a semistructured discussion and asked if questions for that type of meeting would have to go in the agenda for Brown Act purposes and who would handle it. She remarked that topics, structure, and outreach were key. She wanted this to be promoted to the public/consumers for their participation and inquired how they might be engaged. Assistant to the City Manager Guagliardo voiced that staff would be happy to work with the Committee on any time constraints or parameters. He thought the meeting time would be extended and that staff would be clear about time allotments for discussion areas. Regarding questions being on the agenda, he believed it would be helpful for the Committee to provide the types of information on the topics of interest and then staff could craft questions that would elicit that type of information. There were opportunities through Uplift Local to promote this to the public for their participation and opportunities to reach out to Palo Alto Neighborhoods and other groups as well as community leaders. A nuance to that was there being a number of forums for communication with residents on these topics, and one of his responsibilities was enhancing engagement with businesses. As it was being marketed, he wanted to ensure it would be positioned appropriately. Assistant City Attorney Tim Shimizu added that specific questions did not have to be on the agenda, but the more notice the public was given as to what was being elicited from them, the more they could come prepared. Council Member Burt preferred that the meeting include the public commenting on subtopics and that there be a group of stakeholder representatives designated to be on the panel at the table throughout the discussion. He thought about the categories being goods retailers, property owners, food-and-beverage representatives, brokers, and neighbors/residents, and within brokers, he was not sure if it should be local brokers and regional retail experts bringing a broader perspective. As for content, he found all the subjects (and perhaps others) to be appropriate. He expressed that having a discussion moving toward consensus may need to be in two closely scheduled meetings. With the breadth of topics, he envisioned the meeting being three hours, and he noted that he saw consensus from Chair Kou. He suggested the meeting begin with shared information. He discussed streamlining the zoning code and permitting processes and noted that there would be updates to the zoning code on November 18. He thought decision-making and implementation proceeding quicker had to be a reflection of SUMMARY MINUTES Page 4 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 Council, stakeholders, and staff, which he detailed. He requested that one of the topic areas address doing things more quickly. Chair Kou wanted to ensure that the November meeting would be inclusive. She queried how the study session information would be distributed to the public, especially stakeholders. She agreed that the meeting time may need to be extended. She noted that most stakeholders were listed, but she thought resident stakeholders were missing, especially in the business core, who had a lot of parking knowledge. She wanted the November study session to be inclusive but structured. She wanted Midtown included in the discussion. She questioned if there was a list of commercial property owners for Midtown, downtown, and California Avenue. She explained that shopping centers throughout town needed to be considered but that thought also needed to be given to ownership and management type, which she explained. She expressed that the City’s Real Estate Office or title companies may be able to assist in compiling a list of business district property owners, so they could be included in the discussion. Bearing in mind business owners’ schedules, she asked what would be a good time for the meeting. She added that businesses had different locations and clientele, which she felt should be identified. She agreed that there may need to be two or three meetings and that topics could be classified as immediate, mid, and long term. Assistant to the City Manager Guagliardo replied that the Business Connect newsletter was sent to a list of folks, which was an augmentation of outreach. The outreach would consist of making phone calls to individuals who had constructively participated in the past and asking for their participation and to activate their networks. If the Committee elected to proceed with a hybrid- type meeting with members of each group, staff would work with each set of stakeholders to identify a representative. He had a list of commercial property owners for downtown and University Avenue and some for California Avenue. There was much less insight into the owners and connections to Midtown. The discussions related to accelerating through City processes, where retail and retail-like uses would be allowed, and activating vacant storefronts could be applied citywide. He thought a 9 AM to 12 PM meeting would be appropriate. Determining a framework for the meeting topics would assist in providing the timing of different subjects. He also understood that there may need to be more than one meeting, which he would include in the marketing and outreach as well. Council Member Lythcott-Haims agreed with there possibly needing to be two meetings. Being that November 20 was close to the Thanksgiving holiday, she suggested a long meeting consisting of a morning discussion and then moving toward consensus in the afternoon. She was willing to devote an entire day to it so as not to delay a second meeting with the approaching holidays. She suggested that zoning changes not be on consent for Council but instead to be an action item. She detailed why she thought the topic of entitlement planning and development could be pulled out. She thought it was important to learn more about vacancy tax, but she was willing to move that topic to a date in the not-too-distant future. Assistant to the City Manager Guagliardo did not think this would be solved in one meeting. SUMMARY MINUTES Page 5 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 Council Member Burt elaborated, related to the question of zoning changes being on consent and more broadly, that he had not seen a breakdown of near, medium, and long-term measures and thought that should be broken down in the discussion. Due to the holiday season, he wondered if the first meeting should be on November 13 and the second meeting on November 20. He questioned if having a long meeting on November 20 with a follow-up meeting in early December was an option. Assistant to the City Manager Guagliardo responded that a long meeting occurring in a day resonated with him. Moving the meeting up a week would truncate the outreach period and the opportunity to engage. Assistant City Manager Kiely Nose did not think meeting dates needed to be determined at this meeting but that goals or preferences could be identified and then staff could coordinate with folks. She remarked that tentative holds on calendars had been done previously. She acknowledged that stakeholders may not be able to engage for a full day. Council Member Burt added that stakeholders may need time to confer with colleagues, etc., which may be a reason to not have a full-day meeting. He voiced that it had not been framed which of the topics applied to University, Cal Ave, and Midtown and to what degree. He worried that there may not be real dialogue due to the stakeholder group at the table being too large. He did not see a topic related to marketing and the identities of each of the three retail areas and their clients. He was interested in hearing from the retail and service business community where their revenue came from historically and today in order to think about going forward. Trying to anticipate what the new normal will be was going to be imprecise but important to attempt to do. Identifying broad trends and non-generic identities of Palo Alto’s retail areas was important. He commented that food-and-beverage retailers investing in parklets needed to be made aware of the rules, and he wanted rules distributed to each and every one of the retailers. He wanted to ensure that there would be enforcement of the construction and operation of parklets and he asked how staff was addressing such. Assistant to the City Manager Guagliardo stated that trends in brick-and-mortar retail also addressed retail demand. Conversations with brokers was helpful in determining the new normal. Assistant City Manager Nose remarked that staff had robust documentation on parklets and had been working on proactive and handholding support as the ongoing standards were implemented. They were working with those who were out of compliance. Council Member Burt stated that there was a disconnect between perceptions and what Assistant City Manager Nose voiced, and he requested that the disconnect be addressed. There was a perception that it was hard for retailers to get permitted and do business in Palo Alto, so he was interested in having clear plan to address that, which should include what had been done, what was currently being done, and what was on the horizon. SUMMARY MINUTES Page 6 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 Assistant to the City Manager Guagliardo added that outreach and engagement had largely focused on parklet operators and perspective operators. He would be happy to include the permitting process as a discussion item if the Committee desired. Assistant Director of Public Works Holly Boyd mentioned that six months ago a part-time employee had been hired, who worked on just parklets, which she detailed. As the November 1 deadline approached for the ongoing parklet guidelines becoming effective, they would move toward an enforcement approach. She thought 8 parklet applications had been approved to date and that 14 were in the works. She would investigate the disconnect. They had been focusing on the parklet operators, not the neighbor or user aspects. Council Member Burt thought there should be more than a discussion of the permitting process but that a formula needed to be presented to the public, policymakers, brokers, and perspective businesses and part of that should show what had already been done in acknowledgement of past problems. He suggested that Good City Company Aaron Aknin be brought in to facilitate the upcoming meeting. The Downtown Housing Committee and what was happening with transit had not been discussed, which were factors. He thought vacant storefronts and vacancy tax were potentially related. He had been willing to look at a fine for dead space and the use of funds from those fees going back into a specific district. He wanted to consider long-term vacancy enforcement mechanisms. Chair Kou had put the entitlement process into buckets. She felt the City needed to reconsider parklets having more space than the footprint of their leased or owned space and wanted consideration given to visibility of neighboring businesses. She asked that food court ideas and how much formula retail to have on University, Hamilton, and Lytton be explored. She remarked that ground floor preservation was still needed. She thought it was important to identify street by street in the downtown and California Avenue core the retail needed for foot traffic and drive-by visibility to attract patrons, which she detailed. She did not believe destination businesses, such as medical services, needed to be located on high-traffic streets, and she suggested identifying such distinctions. She proposed identifying side streets used for businesses off University Avenue and California Avenue’s retail. She mentioned things like Third Thursday being on managed properties, and she thought needed promotions should be identified that property and business owners would have a stake in but that it should not be completely funded, operated, and coordinated by the City. She wondered if an arcade or bowling alley was restricted in Midtown or if such could be accommodated. Regarding uncertainty of plans and parking, the immediate, midterm, and long-term plans needed to be clearly developed, and she suggested that downtown and Evergreen Park residents be included in the discussion. She wanted a clear definition of retail, retail-like, and services uses. Concerning trends in brick-and-mortar retail, she thought ground-floor retail needed to be preserved and that restrictions were needed. She discussed retailers leaving Palo Alto because of rents being raised and office space rents being more lucrative for property owners than retail. The City should determine where and what is destination retail, destination retail-like, and services. She did not want it to be forgotten that the city had ADA and that those folks needed access to their destinations. She believed a potential vacancy tax should be explored SUMMARY MINUTES Page 7 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 and that staff should review what other cities had done and the pros and cons. In regard to interim activations of vacant storefronts, some had the potential to have temporary art or window treatments, but she thought relevancy to the zoning use and with encouraging wording, which she provided an example of, might be helpful. She discussed why she supported having a business improvement district. She thought the City should be supportive of communication, such as what Napa was doing. She welcomed two meetings in November and suggested looking at medium and mid-term items and identifying long-term items. Council Member Lythcott-Haims was in support of having meetings on November 13 and 20 or November 20 and December 4 and proposed that staff decide on the dates. She seconded bringing in a meeting facilitator from the outside, who would be neutral and impartial. She felt the study session would be an opportunity to demonstrate to stakeholders that things were changing for the better. She thought a topic area should be how things could be done more quickly. She agreed with a vacancy fee rather than a tax, which would be returned to a specific business district, although she was not sure it should be one of the topics, but she hoped the conversation would happen soon. She seconded differentiating stakeholder viewpoints on Cal Ave and Midtown versus University. She did not want University to dictate what would happen in the other districts. Assistant City Manager Nose understood from the Committee that the structure of the study session should be in two parts of about three to three and one-half hours per session and staff would work on dates and times. She thought staff would agree to an outside facilitator and that Good City Company Aknin would agree to do that. She had heard a lot of areas for discussion, and she suggested the topics focus on three to start. She thought the districts/areas of focus needed to be limited for the initial meeting. It did not mean there could not be future discussions. Council Member Burt agreed with limiting the focus to specific districts/areas. Even if the focus was on University, how it applied to the others could be considered. Assistant to the City Manager Guagliardo thought the permitting process could be used a bit for marketing to remind people what was underway in terms of zoning changes being proposed to Council, and it would address what had been done and where the City was headed, and people could voice their perspective on what they viewed as current conditions, barriers, areas to improve, and how to accelerate. It would address accountability and the interest in continuing to move quickly. He thought current conditions, barriers, areas to improve, and how to accelerate was a useful frame moving forward regardless of topic area. He believed that retail demand, partnership, and district were tied together and that there was an opportunity to speak with brokers about what they were seeing in retail demand and opportunities for marketing and to speak with property owners, brokers, and retailers about partnership opportunities and the idea of district identify, not only in terms of customers but how they viewed themselves internally and what a successful marketing effort might be. He noted that Napa had a downtown business group contributing money and doing marketing together, which allowed them to compete with places like Stanford Shopping Center, etc., that had SUMMARY MINUTES Page 8 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 marketing budgets. As for a third topic, he felt there was an opportunity to discuss the tools the City could provide in terms of activations of vacant storefronts. He acknowledged the comment regarding popups, and voiced that standing up a program partnering with popups was an order of magnitude and more work than something near term, which could be Public Arts helping provide some assets, resources, and connections to brokers and property owners who might want to enliven a space a little without reaching full activation. He believed that applying areas for improvement, current conditions, and ways to accelerate to each of the three areas and narrowing it to University Avenue for the first meeting could be a good way to keep the conversation going. Chair Kou stated that the business improvement districts were important and that it needed to be reestablished by the businesses. Council Member Burt thought looking at near and medium term would build on success and gain enthusiasm by showing progress. He noted that downtown Palo Alto and its surroundings had international renown, and there was minuscule marketing based on that. He voiced that the Chamber of Commerce needed to be part of the stakeholder group to discuss their role and the City’s role, etc., and how to collaborate. Assistant City Manager Nose commented that the topics Assistant to the City Manager Guagliardo spoke of had immediate, mid, and long-term components embedded in them. There would need to be dialogue around implementation, time frames, etc. Council Member Lythcott-Haims discussed why popups should not be presumed to be orders of magnitude, and she did not want the idea to be squelched without first thinking a little more about it. Chair Kou wanted to keep in mind the greater benefit for Palo Alto residents who were also stakeholders. NO ACTION TAKEN 2. Economic Development Activity Report October 2024 Assistant to the City Manager Steve Guagliardo stated that the report was presented to the Committee to give an update on the work of Economic Development staff and its partners. They were trying to scale as they could. They included the Q3 updates for the 2024 objectives under the Council priority of Economic Development and Transition and a list of certificates of Use and Occupancy, which would be online. They had had conversations with brokers and property owners, and there were comments on the reputational concerns but they noted that things had gotten better and they were seeing a greater demand for retail-like uses in commercial cores and they affirmed the work underway from the Committee in terms of zoning changes, accelerating things, and addressing issues. He outlined that there was a lot of internal and external coordination occurring. SUMMARY MINUTES Page 9 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 Public Comments There were no requests to speak. Council Member Lythcott-Haims wondered if additional staff was needed with the midyear budget coming. Assistant City Manager Kiely Nose appreciated the questions. She thought what was important in adding resources was being clear on the desired outcomes. She did not want to say staff would not be in favor of adding resources at midyear, but she thought it was a matter of ensuring that resources would be aligned with expectations and creating an environment for success. She thought upcoming conversations would help inform the need for additional resources. Council Member Burt noted that the listed areas on Attachment A that were behind schedule did not have updated completion dates, and he requested the attachment be updated and sent to the Committee. He referenced ED&T 6 on Packet Page 19 and stated that the preapproved parklet completed did not say it was for University Avenue and that there was no permanent parklet yet for Cal Ave and he thought it needed to go to Council for approval. Assistant City Manager Nose explained that completion dates were noted for the areas behind schedule. Assistant to the City Manager Guagliardo responded, regarding ED&T 6 on Packet Page 19, that the work for California Avenue was underway. It was marked as complete. When initially scoped it was for University Avenue and the discussion about adding California Avenue followed the adoption of that objective. Staff would clarify that in future reports if necessary. Council Member Burt did not know what underway meant. He stated it was always a question and was not a new item but an unresolved one. He explained that it became an urgent matter over a year ago and now, going into another winter, outdoor dining would be lost, etc., and he wanted this brought forward so clear direction could be provided. There was a question whether the permanent parklet designs established for University could be applied to Cal Ave as they were or in some modified version. Council had not given clear direction to move this forward. He encouraged that the positive component of the summary of permitting activities be translated as a narrative to the business community, etc. Chair Kou asked what was meant by having a partnership with Good City Company. Assistant to the City Manager Guagliardo replied that the City was contracting with Good City Company. They were used to augment staff resources. He was happy to clarify the term in the future. Chair Kou wanted it to be clear that Good City Company was not in partnership with the City but that it was a consulting firm that the City had a contract with to augment resources. On the SUMMARY MINUTES Page 10 of 10 Retail Committee Meeting Summary Minutes: 10/16/2024 staff part, there needed to be a consistent reminder that this was for the benefit of residents, to bring in business, etc., but uses and zoning with enforcement needed to be kept in place in moving forward. Regarding Packet Page 14 and Palo Alto’s reputation of being difficult to work with, it should take into account that planning must be done correctly to place right businesses in the right locations, the type of vehicle traffic, and the use of older buildings, etc. She would continue to highlight Palo Alto being a prime location for a lot of retailers and restaurants. There should be a constant reminder that there were multiple owners of properties with varying objectives in the core business districts. She voiced why she believed retail zoning still required restrictions. She wanted to ensure that ground-floor retail would be protected on certain streets. Regarding constraints and barriers, she acknowledged that parklets were valuable but them extending into other storefronts and causing visibility issues needed to be reconsidered. She wanted to identify street by street in the downtown core the retail base needed for foot traffic and drive-by visibility. She suggested better lighting, plantings, and artwork in alleyways if foot and bicycle traffic were being encouraged. She added that Centennial way could use some lighting and highlighting. She suggested exploring with retailers their business hours coinciding with times when California and University avenues were busy. She explained that she wanted the Business Registry to be a connection tool. She asked if property owners registered with the Business Registry. She inquired if Real Estate Division Manager Sunny Tong could provide a list of property owners and provide them with updated communications. She wanted to ensure they would be included in communications moving forward, especially discussions on revitalizing downtown and California Avenue. She discussed why she thought the El Camino Real Repaving Project would be better referred to as El Camino Repurposing Project or some such. She wanted to see the operating food trucks and permitting process for consideration in a report. She would provide more comments to staff in writing. Assistant City Manager Nose replied that property owners did not fall within the parameters of the Business Registry Program. However, they would register if they had a business. The ownership of properties was available through public records with the County of Santa Clara, but she did not know if that had contact information. In general, they were aiming to leverage resources and information through the Business Registry, the business tax, permits, etc., to ensure robust outreach and increase contacts. NO ACTION TAKEN Future Meetings and Agendas Council Member Burt announced there was a tentative November 20 meeting for either the first or second meeting on this issue. The meeting would likely be three and one-half hours in length, from 9 AM to 12:30 PM. He suggested there be refreshments. Adjournment: The meeting was adjourned at 11:13 AM.