HomeMy WebLinkAbout2001-02-20 City Council Summary Minutes
Regular Meeting
February 20, 2001
14. PUBLIC HEARING: The Palo Alto City Council will consider an Application for a Zone Change from Downtown Commercial (Service) Pedestrian Overlay (CD-S)(P) District to the Planned Community (PC) Zone for property located at 800 High Street, (Item No. 14 moved forward) ......................404
ORAL COMMUNICATIONS..............................................419
1. Gas Rate Increase - Refer to Finance........................420
2. Policy for the Use of Financial Instruments for Managing Price Risk of Electricity and Natural Gas Commodities - Refer to Finance............................................420
3. Risk Management Strategies: Approval of Energy Risk Management Policies - Refer to Finance Committee............420
4. Neighborhood Traffic Calming Program – Refer to Policy and Services ...................................................420
5. Resolution 8036 entitled “Resolution of the Council of the
City of Palo Alto Authorizing the City Manager to Submit to the San Francisco Baytrail Project a Grant Application for
Funds which the City Intends to Expend on Trail Improvements Located Along the Faber/Laumeister Tract in the Palo Alto Baylands”.....................................420
6. Ordinance 4682 entitled “Ordinance of the Council of the City Of Palo Alto Amending Section 18.08.040 of the Palo
Alto Municipal Code (the Zoning Map) To Change the Classification of Property at the Intersection of El Camino Real and Wells Avenue Known as 675-695 El Camino Real/Wells Avenue from PC Planned Community 4465 to PC Planned Community”..................................................420
7. Contract Between the City of Palo Alto and Power Engineering Contractors, Inc. in the Amount of $838,700 for the Ash Handling System Modification Project at the
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Regional Water Quality Control Plant (Wastewater Treatment Capital Improvement Program Project 8021)...................420
8. Ordinance 1st Reading entitled “Ordinance of the Council of the City of Palo Alto Amending Title 10, Chapter 10.04, Section 10.04.045 and Section 10.08.025 of the Palo Alto Municipal Code Relating to Police Community Service Officers”...................................................420
9. Three-Year Agreement Between the City of Palo Alto and the United States Geological Survey in the Amount of $230,251 for San Francisco Bay Monitoring ...........................420
10. Contract Between the City of Palo Alto and Power Engineers, Inc. in the Amount of $267,210 for Engineering and Design
Services for Park Boulevard Switching Station Reconstruction Electric Capital Improvement Program Project 0006........................................................421
11. Agreement Between the City of Palo Alto and Winzler & Kelly Consulting Engineers in the Amount of $64,400 for
Inspection and Testing of Hazardous Materials at Various City Facilities - Capital Improvement Program Project 10019.421
12. Resolution 8037 entitled “Resolution of the Council of the City of Palo Alto Supporting the Santa Clara Valley Water District’s Commercial Washing Machine Rebate Program”.......421
13. Conference with Labor Negotiator............................421
15. Ordinance Authorizing the City Manager or Director of
Utilities to Enter Into Long Term Contracts For The Purchase of Power and Energy (Electric Energy and Capacity In Anticipation of an Immediate and Substantial Loss of the
City of Palo Alto’s Power Now Furnished By The Western Area Power Administration and Declaring The Urgency Thereof To
Take Effect Immediately”....................................421
16. PUBLIC HEARING: The Palo Alto City Council will consider an
appeal by Truman Cross of the approval of Neighborhood Preservation Exceptions granted to Stan Hindman on behalf
of Brian Wilson for property located at 610 California Avenue, to allow placement of a garage in the rear yard setback, reduction of required parking from two covered spaces and one uncovered space to one covered space and one uncovered space, and a 4’1” encroachment into street side
yard where a 16’ street side yard setback is required 429
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7. PUBLIC HEARING: The Palo Alto City Council will review the Extension and modification of interim zoning to preserve
and encourage neighborhood serving retail uses and limiting office uses in ground floor locations in the Neighborhood Commercial (CN) District at Charleston Plaza (portions of the 3900 block of Middlefield Road) and the Midtown District (portions of the 2600, 2700, and 2800 blocks of
Middlefield Road and the 700 block of Colorado Avenue)......430
18. Resolution 8038 entitled “Resolution of the Council of the City of Palo Alto Scheduling the City Council Vacation for
Calendar Year 2001”.........................................436
ADJOURNMENT: The meeting adjourned at 12:05 a.m. to a Closed
Session.....................................................437
FINAL ADJOURNMENT: The meeting adjourned at 12:12 a.m............437
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The City Council of the City of Palo Alto met on this date in the Council Chambers at 7:10 p.m.
PRESENT: Beecham, Burch, Eakins, Fazzino, Kleinberg (teleconferencing from Miami, Florida), Lytle, Mossar, Ojakian, Wheeler BY UNANIMOUS MOTION on February 12, 2001, the City Council determined that Agenda Item No. 14 would be moved forward to the beginning of the meeting.
UNFINISHED BUSINESS (Item No. 14 moved forward) 14. PUBLIC HEARING: The Palo Alto City Council will consider an Application for a Zone Change from Downtown Commercial (Service) Pedestrian Overlay (CD-S)(P) District to the Planned Community (PC) Zone for property located at 800
High Street, to allow demolition of an existing 17,632-square-foot manufacturing building and construction of a new 48-foot-high, three-story mixed use building, including 26 residential units, 48,030 square feet of office space, 2,379 square feet of retail space, a subterranean parking
garage and related site improvements; and a variance for a portion of the third floor residential area that exceeds
the City’s height requirement. (Continued from 2/12/01)
Council Member Beecham would not participate in the item due to
a conflict of interest. His client had a financial interest in one of the properties.
Council Member Wheeler disclosed her position as an unpaid member of the Board of Directors of the Palo Alto Housing
Corporation. The City Attorney advised her that her position did not create a financial conflict of interest, so she did not have
to disqualify herself from voting on the matter. The Palo Alto Housing Corporation was a non-profit corporation and its primary functions included supporting the City’s Below Market Rate (BMR) housing programs. That meant that she was not financially interested in any manner in the outcome of the 800 High Street
project. Chop Keenan, 700 Emerson Street, said there was a need for
parking, housing, retail in the area as well as a need to be concerned about increased traffic. The opportunity to keep more
cars out of the neighborhood would benefit the neighborhood. The question became whether or not the project was a good tradeoff for the neighborhood and community at large. He urged Council approval of the project.
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Mark Sabin, 4274 Wilkie Way, Palo Alto Chamber of Commerce, said
the Chamber endorsed the 2001 version of the Peninsula Creamery project. The new proposal addressed and mitigated concerns. The
important part of the project was the addition of 152 parking spaces. The design of the project was attractive. The Council was urged to support the project.
Herb Borock, P.O. Box 632, said the Council should reject the
application for an 80,000 square foot project. Previous speakers talked about different proposals which were not properly set before the Council. The Council needed to have the Planning Department staff calculate the gross square footage of any proposal. A previous speaker said the applicant could build
under the existing zoning a commercial-only project. Mr. Rapp had no intention of doing that under the existing zoning. Staff’s figures of commercial entitlement indicated 6,000 square feet had to be retail because there was a maximum of 5,000 square feet of office space per lot. Everything else had to be
retail under the CD(S) zone. He did not believe the applicant was going to present a project that met the office limits under
the existing zoning. The mix of market rate and below market rate would determine whether the housing project fit within one of the general zoned districts or whether it was a project that
provided public benefits.
Wayne Swan, 240 Kellogg Avenue, said the PC zone brought more cars and the need for a signal at Alma Street and Channing Avenue. He pleaded with the Council to consider greater
consistency. Zoning regulations should be followed or changed, and a plan should be developed. He suggested the Council take
additional time and wait for the SOFA II plan to be adopted. Marlene Prendergast, 725 Alma Street, Palo Alto Housing
Corporation Executive Director, said the Corporation had administered the BMR housing program for the City since 1974 and
was interested in the proposed project because it added a new element to the housing program. Issues regarding income eligibility and fair housing were examined. The project was a
public benefit. The easiest way forward from an administrative standpoint, looking at a BMR program, was to include the units
into the normal BMR program. It would involve an income eligibility maximum for households earning no more than 80 percent of the area median income, which was currently between $48,000 and $70,000. The general preference was for persons who lived or worked in Palo Alto. Teachers, firefighters, and City
employees would meet the “Work in Palo Alto” preference. If the primary goal was to serve a particular occupational group, the issues became more complicated. The program had to be segregated in some way from the regular City program, and there might be problems that did not normally come up in the BMR program
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depending on which group was preferred. Most teachers’ salaries
would qualify within the income range, but most police or fire fighters’ would not because they earned too much in comparison
to the median income level. She was appalled at the mention in the staff report (CMR:135:01) of BMR housing funds being spent to redesign the project if it were necessary to accommodate
housing.
Rick Adams, 1265 Wilson Street, supported the project and the proposed units for teachers and public employees. No organization could perfectly plan going forward. Teacher recruiting and turnover was a serious issue in Palo Alto. During his conversations with new Palo Alto teachers, he found that the
likelihood of the project’s helping new teacher recruitment was high. The offer of teacher housing was a step in the right direction. To recruit new teachers and maintain quality education in Palo Alto, experiments such as the proposed project must be tried.
Barbara Gross, 729 Center Drive, said at the previous meeting,
Planning and Community Environment Director Ed Gawf, asked the Council for policy direction regarding the Peninsula Creamery project. Mr. Rapp presented his latest iteration of a negotiated
process that took more than five years and outlined the number of commercial, retail, and living square footage that was
designed to create a worthy and financially viable project. The Council was to evaluate the merits of a mixed use Creamery development in comparison to a purely commercial Creamery
development. The Council’s action would determine which project was constructed. The question was whether the merits of the
mixed-use project outweigh the negatives. That was a policy question for the Council to determine. She saw the opportunity for the City to permanently manage 30 housing units for
professionals, add 152 parking spaces in an area of the City that had no opportunity for public parking, and insert a transit
oriented project as outlined in the Comprehensive Plan (Comp Plan) with a density close to that of the projected SOFA on a property that would otherwise be used strictly for commercial
purposes. A letter to the editor of the local newspaper suggested that if employees of the Whole Foods Store took public
transportation to work, the parking issue in that part of the City would be solved. The City’s Commute Coordinator, Amanda Jones, worked with many businesses to address transportation issues including Whole Foods which runs a staff on an almost 24-hour basis. The Peninsula Project would be a public benefit to
the City. Stan Field, 3631 Evergreen Drive, stated the proposal was the first mixed-use development that the City would have and was a direct expression of the true demands of the market forces.
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Rarely did a city have the benefit of a public-spirited
developer whose ear was finely tuned to the vibration of his city. Planning was a precise art. Cities were made up of
immeasurable forces. Spirited developers who were in tune to the market forces made cities great.
Marilyn Calabrese, 707 Bryant Street, listened to the different perspectives on the proposed project and understood the concerns
and issues relating to housing, size of the building, parking, traffic, office and retail space, and the historic value of the building. Mr. Rapp would build something on the property that was beautiful and practical and could be enjoyed by everyone. She urged the Council to support the project.
Planning and Transportation Commissioner, Patrick Burt, 1249 Harriet Street, said the SOFA Working Group had not specifically addressed the project. The Working Group was strongly oriented toward a predominantly residential character to the SOFA II area. The emphasis was toward a greater residential area moving
toward Addison and Ramona Streets and a greater density in development moving away from those areas toward Alma Street and
Forest Avenue. The Working Group moved toward a build out plan with the concept of a specific housing to jobs ratio for the area. Because certain blocks might be zoned as entirely
residential, not all properties in the plan would have the same balance of housing and jobs. The concept was one of having
specific block areas that were adjacent to the residential area, being predominantly or entirely residential as the final build out would occur, and there would be some combination of
commercial and residential, including retail, on the Homer Avenue and Ramona Street corridors. The Working Group struggled
with a way to address the serious parking shortfall in the area. Steve Player, 1874 Guinda Street, supported the project. The
project. It would be an important asset to the community. The location of the project lent itself to the type of density
discussed in the project. It was near a transportation corridor. Mr. Rapp made an attempt to address the housing/jobs imbalance in the area. The design was pedestrian friendly with housing on
the first floor that welcomed people to walk to the Downtown. Mr. Rapp worked hard to come up with a project that met the
objectives of the SOFA area. Jim Byrnes, Alain Pinel Realtors, University Avenue, represented people who wanted to live in Palo Alto because of the diversified and vibrant Downtown, the architectural excellence
in the neighborhoods, and the quality of education. With education the most paramount of interest and desire for people, housing for teachers and service employees were necessary. The more parking the City had, the more retail activity there would be in the area. He urged the Council to support the project.
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Leslie Smith, 703 High Street, supported the project. She disagreed with comments made that additional parking would cause
an increase in traffic because Palo Alto already had a traffic problem. The project was needed and in particular the additional parking.
Connie Jo Cotton, 816 Cowper Street, Palo Alto Weekly employee,
said the Weekly employed 70 people and only 14 had parking places. Finding parking was a challenge. She wanted to see a building that would provide parking, a plaza area, and housing. Paul Kelleher, 426 Homer Avenue, said the development of a major
parcel in the area without the guidance of the SOFA II review process was unfortunate. The proposed 70,000 square foot structure was too large. He urged the Council to work toward the proposal put forward by the Planning Department staff which attempted to preserve the bulk of the public benefits while
shrinking the project. He applauded Mr. Rapp for coming forward with such a substantial package of public benefits in his recent
proposals; however, the benefits were not adequately defined in the package presented. Benefits were proposed but were ill defined in terms of specifics. Approving the 70,000 square foot
project in its current form would make it impossible for staff to negotiate appropriate measures to define the terms for use,
access, and the actual cost of some of the public benefits. Mr. Rapp took a “take it or leave it” stance on the public benefit portion of the project, which was not what a philanthropist
would do. Every step of the process should be treated like a development agreement.
Roxy Rapp, applicant, said he started the process in October 1995 and met new acquaintances, homeowners, merchants, and
property owners who favored his project. He had support from the City’s transportation officials during previous years, and it
was staff’s idea to have the City run the parking and sell the permits. His project would allow for City emergency personnel to live in Palo Alto. If the project were denied, he would build
24,000 square feet of commercial space. If the project were approved, he would develop a beautiful 3,000 square foot plaza
surrounded by retail. Mayor Eakins declared the Public Hearing closed. City Manager Frank Benest said the Council had before it a
letter dated February 20, 2001, that confirmed the negotiations that occurred during the previous few weeks with respect to some of the staff concerns. He was not ready to support the project fully, but his recommendation to the Council to approve the project as identified in the letter of February 20, 2001, was
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based on the following: 1) the project included the neighborhood
serving retail as well as the 33 units of BMR housing; 2) the office element was job neutral; 3) the project would return to
the Architectural Review Board (ARB) and Planning and Transportation Commission (P&TC) for design review; 4) staff had the opportunity to evaluate how a parking management plan would
be developed so that managing the additional public parking was without any significant new cost to the city; and 5) staff had
the opportunity to evaluate how the existing BMR program could be thoughtfully modified to accommodate the needs of teachers and other critical community service providers. Staff believed the units should be BMR units and needed time to develop a thoughtful plan and program to be brought back to the Council.
Council Member Fazzino clarified the rights of the developer if the City rejected the current proposal. He asked whether the applicant was able to return with a 24,000 square foot office development.
Planning and Community Environment Director Ed Gawf said the
applicant had a proposal before the City for development of two of the three lots consisting of approximately 15,000 square feet of commercial development. The Creamery building, on the third
lot, was an existing building of 7,700 square foot and could be used for commercial purposes under the City’s code. In addition,
if the applicant retained the Creamery building, he could ask for a 2,500 square foot historic bonus for preserving the building. The zoning of the property allowed a limitation of
5,000 square feet of office per lot, which meant a limitation of 15,000 square feet of office if each lot were developed
independently. The remainder of the space could be used as other types of commercial space such as retail or business service. Staff believed approximately 24,000 square feet of
nonresidential space could occur on the lots, assuming the 2,500 square foot historic bonus.
Council Member Fazzino clarified the action of the Council and whether the Council needed to reject the original proposal and
then give any direction to staff, in concept, to consider alternative proposals.
City Attorney Ariel Calonne said that was correct. The predicament the Council was in was that the Planned Community zone called for the ARB and P&TC to advise the Council on the specific proposal. Direction to the ARB and P&TC on what the
Council wanted to see was called for. Council Member Mossar was confused about how a conceptual project could be endorsed. She clarified the City Manager’s
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recommendation was to move forward in the direction outlined in
the memo presented to the Council.
Mr. Benest said yes. The process was unusual. Staff felt substantial progress was made in addressing staff’s concerns. He recommended the Council approve the general concept which would
go back to the ARB and P&TC with regard to design issues. Work needed to be done on the parking management plan and the BMR
program. Council Member Mossar said the proposal before the Council created challenges for the public. Comments were made about what the Council was reviewing. The project consisted of a sketchy
outline and was difficult for the public to understand and make comments on. If the Council were to proceed with staff’s advice, she questioned how the public would have confidence that they would have meaningful input into the final outcome.
Mr. Benest said the issues of housing, parking management plan, and final design would come back to the Council. The public
would also have an opportunity to address the issues at the ARB and P&TC meeting.
Mr. Calonne said the process was legislative and involved planned community zoning which meant the Council acted in the
classic legislative role of creating a new zoning district. The ordinance called for the ARB to give the Council unbiased review. The P&TC’s role in taking the ARB’s advice and giving
information to the Council remained undone. If the Council sent the item back to the ARB and P&TC, the Council would retain its
full responsibility as legislators to deal with the project when it came back. Mr. Rapp came to the Council during the initiation of the SOFA planning process and initiated a project
that was out of step with the SOFA planning process. The Council indicated to Mr. Rapp that he was proceeding “against the
current” and at his own risk. Mr. Rapp came to the Council for a prescreening prior to applying, and the Council gave him many cautionary comments about proceeding in that manner. The project
continued, went to ARB and P&TC, and changed in response to Council, staff, and community sentiments.
Mr. Benest said staff was asking for policy direction regarding five key points: 1) size of project including uses; 2) jobs/housing balance issue; 3) design considerations; 4) BMR units; and 5) public parking.
Mr. Calonne said the application before the Council that the ARB and P&TC passed on was the original version. The applicant and the staff did not want that project.
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Council Member Lytle did not want to give conceptual approval to
a project “as presented in the newspaper” as stated by a member of the public. She clarified the developer presented a 24,000
square foot office building in scale model to show what he was going to propose. She understood the applicant could preserve the Peninsula Creamery building and add on to it if were treated
as a historical building. He could then build a smaller office project on the other two parcels.
Mr. Gawf said that was correct. The three lots would have to be developed individually if the Creamery building were preserved. Council Member Lytle clarified the Peninsula Creamery building
was a historic building eligible for the California Register. Mr. Gawf believed the building was potentially eligible for the California Register.
Council Member Lytle asked how the Environmental Impact Report (EIR) treated the issue.
Senior Assistant City Attorney Wynne Furth said the draft EIR treated demolition of the building as an unmitigatable adverse
impact on the environment.
Council Member Lytle said statements of overriding consideration needed to be adopted. A question that was avoided in the staff recommendations concerned the issue of occupation housing. The
recommendation by staff was to study it. The Council would then be giving conceptual approval for a project without the
teacher/emergency worker housing provision. Mr. Benest said staff recommended the Council approve the
project in concept with 33 BMR units. If the Council wanted staff to look at how to accommodate some specific service
occupations of high concern to the community, staff was willing to do that, but staff wanted 33 units of BMR housing.
Council Member Lytle asked whether an assurance could be made to the public that the housing would be teacher and emergency
service worker housing. Mr. Benest said there were many issues related to providing targeted housing for certain occupations. There were ways to create systems to accommodate certain types of service
occupations that met the income criteria. Council Member Lytle asked whether assurance could be made that the housing would be for teachers and emergency workers.
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Mr. Benest said he was not ready to make that assurance. He was
ready to tell the Council that staff thought 33 BMR units was a large public benefit. If the Council wanted staff to look at how
to accommodate the needs of teachers and other critical service workers, staff could try to figure out how that could be done. If the Council approved in concept the program, he assured the
Council the housing would be below market housing.
Council Member Lytle said the letter dated February 20, 2001, was ambiguous about design considerations. Her concern was that the scale of the project was not consistent with Policy L-5 which said, “We must maintain the small rectangular parcels in the older gridded portions of town.” She questioned what the
promise in the conceptual proposal meant in terms of breaking down the scale of a 400 foot long, single monolithic project in an area that did not have buildings of that scale. Mr. Benest said the ARB evaluated and analyzed those issues. The
ARB and P&TC would be involved in reviewing the design to respond to a variety of policies.
Council Member Lytle asked whether staff would need direction from the Council to give the applicant specifics about the
issue, given that the ARB approved the project in a larger form.
Mr. Benest said if the Council had concerns in terms of design, the staff would present the issues to the ARB at the appropriate time.
Mayor Eakins clarified that was the type of policy direction
having to do with scale. Mr. Benest said yes. Mr. Gawf had pointed out that the issues
were identified in the presentation at the previous meeting.
Council Member Burch recalled Ms. Prendergast stating the salary range for people to qualify to live in the units would be $44,000 to $78,000, but Palo Alto’s current Police and Fire
personnel would not qualify under that range.
Mr. Benest said as the project was currently structured, Palo Alto’s Police and Fire personnel would not be able to take advantage of the BMR units. Mayor Eakins said the Council could give policy direction about
reworking the BMR program in order to meet the City’s policy goals without having to decide how it should be done at the current time.
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Mr. Benest said if the Council was serious, it should tell staff
to identify the need and how to try to accommodate the Police and Fire personnel.
Council Member Burch was in favor of breaking up the large scale look on the block.
Council Member Wheeler agreed with Council Members Burch and
Lytle. There were other Council Members who were interested in affordable housing for the designated occupations. Her ultimate decision on approval of the project was going to be contingent upon the answers she understood could not be given at the current meeting. The City should perform a needs assessment with
the employees to find out how many people desired to live in the type of units that would be provided. The Council needed to communicate with the Palo Alto Unified School District (PAUSD) to have it do a needs and interest assessment with its employees. Many of the speakers addressed the issue of PAUSD
teachers. The City had several nonprofit, private schools who might need the housing. She asked whether the Council could
designate preferences. Mr. Calonne said staff thought the Council could designate
preferences. The City had an existing BMR program which needed to be looked at before making decisions.
Vice Mayor Ojakian asked whether it was fair to say that the existing BMR program could not be used if the City wanted to
target occupation versus income.
Mr. Benest said the existing BMR program did not target certain occupations.
Vice Mayor Ojakian said the policy direction was to look at something different from income.
Mr. Benest said yes in order to accommodate that consideration within the program. Most BMR programs were income driven.
Vice Mayor Ojakian said the original project EIR talked about
certain traffic and transportation improvements that were needed, particularly on Alma Street. He asked whether those would be considered items that needed to be mitigated. Mr. Gawf said that would be part of the review process. The
issue would go back to the ARB and P&TC. Vice Mayor Ojakian asked whether a supplemental EIR would be needed for the original draft EIR.
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Mr. Gawf said the draft EIR was several years old.
Mayor Eakins said the Council heard repeatedly that it was being asked to consider the project in concept and the idea of a
project on the proposed location that was above the 1.0 density. Additionally, if the Council approved in concept a mixed-use project with higher than 1.0 density, the Council needed to give
policy direction in order to proceed. Policy issues were total size, jobs/housing, design, BMR, and public parking. The
discussion would form an explanatory, supportive record for carrying out policy direction in the future steps with respect to the project. Council Member Mossar asked whether staff was prepared to
discuss the workload impacts of a decision to move forward on the project and how it related to other commitments that the Council made to the community. Mr. Benest said the work of the Planning Division was driven in
large part by development projects. Staff was available to do the work in terms of moving the project through the process. The
Planning Division was overwhelmed and one of the most impacted divisions in the City. The project was important, particularly as it related to BMR housing and adding neighborhood serving
retail in the area.
Council Member Mossar said commitments were made to the community and Council priorities were set. Housing was a subset of the Zoning Ordinance update. The Council deserved information
about the workload impact.
Mayor Eakins clarified the project was in the project development section of the Planning Division and would not impact future planning where the Zoning Ordinance update was
going on.
Mr. Gawf said that was correct. Council Member Mossar was doubtful that pursuing the project
would not have implications for other project commitments that were publicly made by the Council.
MOTION: Council Member Fazzino moved, seconded by Ojakian, to
reject the original proposal, and to approve in concept the proposal for approximately 37,000 square feet of office use, 2,500 square feet retail, public benefit of 33 housing units,
and 275 parking spaces, of which 123 shall be City spaces. Council Member Fazzino appreciated the work that went into the proposal by the developer, the Council, the neighborhood, staff, and other interest groups. The issues were complex and boiled
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down to one argument which was that for 10,000 additional square
feet of office, the City would receive 33 affordable housing units. The need for affordable housing in the community was
great enough that the 10,000 additional square feet was a cost he was willing to bear. If the Council rejected the conceptual proposal, the developer was able to pursue a 24,000 square-foot
commercial development. Putting the developer on hold for five years was unfair. The Council should have made a decision
several years before. The housing should be used for teachers, with priority to PAUSD teachers. The project did not have a jobs/housing imbalance. It was jobs/housing neutral. Parking was desperately needed in the neighborhood. The project would park neighboring businesses and would take many cars off the street
in the adjoining neighborhood. The ARB was pleased with the retail aspect of the proposal. A number of issues needed to be addressed. Vice Mayor Ojakian said during the recent Council interviews, he
characterized a project such as the one being discussed as a choice between a large project with big benefits or a project
within the zone with fewer impacts. A middle ground was found where a project balanced benefits and impacts. The project should stay within the 70,000 square foot amount that Mr. Rapp
proposed in his letter of February 20, 2001, in terms of the number of units that were made available. Staff should determine
what the BMR program was. Every effort should be made to provide “permit parking” for the employees who lived in the area. A statement of overriding consideration needed to be made because
there was an item in the original EIR that was unmitigatable.
Council Member Mossar did not have a problem providing housing for teachers or public safety personnel, but the project was a waste of a transit-oriented location because the teachers and
public safety workers would not take advantage of the train station. The parking benefit was odd. Free parking was a block
away from the project. The possibility existed that there would be 123 parking spaced dedicated to the City of Palo Alto that remained virtually empty during the day because there was no
incentive for anyone to pay to park in those places. The staff report (CMR:135:01) mentioned the advantage of having the public
parking spaces in the evening. That parking garage was one block away from a small scale, historic fabric residential R-1 neighborhood. The neighborhood provided access to Embarcadero from Downtown and provided access to Highway 101. A statement of overriding considerations could be done to say that the old
Creamery building, although historic, might not be that significant and not that great a loss. The old Creamery building was the right scale, size, and block pattern. People complained about Alma Place being big and ugly, but it was not a whole block. The proposed building blocked her view of the hills and
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did not match the historic fabric of the area. The area had
redeveloped almost in total within the previous 18 months and redeveloped in scale with itself. The proposed project did not
match the neighbors across the street. She recalled during the Comp Plan conversation much discussion about transition. One side of High Street consisted of several buildings that
converted to office that were the right size, scale, fabric, and pattern. The proposed project would be obvious and needed to
meet the standard that was established by all of the redevelopment that occurred in the area. She suggested that in terms of design considerations, staff be asked to look for opportunities to reconfigure the building to take advantage of the patterns that were established by other developments in the
area. Council Member Lytle recommended the motion be amended to direct the conceptual project to break down the scale in order not to read as a single building but rather as several different
buildings, per Policy L-5. The height and massing of the project did not concern her. The market kept the project alive, and
office lease rates made it too tempting to look at other options. The project had a nice mix of uses. The underground parking, component of housing, and retail space was a good
balance, particularly if it created a neutral effect on the jobs/housing issue. The four issues she wanted addressed prior
to supporting the motion were the breaking down of the scale of the project, reexamining the historical building and incorporating it into the design of the project, directing staff
to look at the legal aspect of teacher housing, and that no public money would be included in the public benefit portion of
the project, either for the BMR, redesign, or ongoing maintenance/administration of the public parking.
Council Member Burch said the Council had a choice between approving the 33 BMR units and letting the applicant develop
24,000 square feet. He would like to have seen a project that included 60 or 65 residential, affordable units next to the transit corridor. He supported the proposed concept but would
continue pushing for affordable housing until the City had a decent ratio of jobs/housing.
Mayor Eakins said spouses of City employees or teachers might be able to use the transit facilities to get to work. Workers in the commercial spaces might also be able to use the transit facilities.
Council Member Kleinberg was pleased to see that the Council and staff worked hard to give the developer an opportunity to bring the concept before the Council. The Council was presented with tough choices. She was not an advocate of more offices in Palo
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Alto or huge office buildings. The developer worked hard to
reduce the total commercial while increasing the affordable housing and parking benefits and adding retail. The mix was
intriguing and presented the Council with a creative opportunity. How the Council voted on the project would set the tone for how the Council approached development in the future.
The benefits were real and would be subject to City oversight. The project would allow the chance to bring residential and
retail life back into the Downtown and address a number of challenges that the community asked the Council to solve. The P&TC and ARB should be given the opportunity to work with the developer to bring the project back to the Council and public for additional review and final policy decisions.
Council Member Lytle suggested directing staff and the applicant to look into, as part of the redesign of the project, what appeared to be different buildings, incorporating the historic elements of the Peninsula Creamery building, directing that
staff do whatever was possible and legal to pursue teacher housing as a component of the BMR, and assure that no public
money went into the benefits returned to the Council for either redesign of the BMR units or administration of the parking.
Vice Mayor Ojakian clarified there would be some dollar involvement in maintenance of the parking facilities.
Mr. Gawf said the concept was that staff would manage the permits but that would be done at a cost recovery basis. The
property owner would maintain the garage and staff would enforce and issue permits.
Council Member Lytle said she would accept the cost recovery program as long as there was no other involvement of
administration out of the General Fund administrative expenditures.
Vice Mayor Ojakian suggested leaving that in the form of a policy statement that allowed staff and the applicant to look at
that issue.
Council Member Lytle understood from Mr. Gawf that there might be a gap from the normal cost recovery program and that the developer would share that. Mr. Gawf said his definition of cost recovery was that City
money would not be expended in an area that would not be recouped. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to include the following changes: 1) in terms of design
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considerations, direct staff to look for opportunities to
reconfigure the building to take advantage of established patterns by other developments in the area; 2) direct staff and
applicant to break down the scale of the project not to read as a single building but as several different buildings; 3) review and consider incorporating the historic element of the Peninsula
Creamery building into the project; 4) direct staff to do all that is possible and legal to pursue teacher and emergency
worker housing as a component of the City’s Below Market Rate (BMR) program; and 5) assure that no public money be included in the public benefit portion of the project, either for the BMR design or the ongoing maintenance administration of the public parking. Further, to include the following policy directions: 33
BMR units, neighborhood-serving retail, send the proposal to the Architectural Review Board and the Planning and Transportation Commission for design review, provide staff with the opportunity to develop a parking management plan so there is no significant cost to the City for managing public parking, and provide staff
with the opportunity to modify thoughtfully the BMR proposal to accommodate the existing needs of teachers and other critical
service workers. Council Member Mossar clarified the action for conceptual
approval was for a project that no one had seen or reviewed. She wanted to be clear to the public concerning what the action was.
By taking action to approve the project conceptually, the Council did not set standards for development it wanted to see in the area. The Council relied on the completion of the SOFA II
study to dictate the development patterns in the area. The decision did not usurp the authority of the SOFA II study. She
was awestruck by the Association of Bay Area Governments (ABAG) Job Count for Palo Alto, which was more than 98,000 jobs. She recalled approximately 50,000 to 60,000 jobs ten years
previously. Much time was spent talking about the jobs/housing balance and building housing to meet the number of jobs in the
City. Questions that needed to be answered were what the City’s goals were, did the City want more job growth, and how did projects fit in with the vision of the community.
Council Member Wheeler believed that when Council Member Lytle
talked about public monies being expended, she was talking about the parking issue and the BMR redesign. The concept about using BMR or housing funds to fund any of the redesign would not be permitted.
Council Member Kleinberg asked about City policy and whether something different was being done with this development. Mr. Gawf said the normal course of action was that the developer would bear the cost of the design expense. In this particular
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case, because the units were designed for work/live, staff
looked at it differently. The same purpose would be achieved through the review process.
Council Member Kleinberg clarified the Council was not setting a different rule for the developer.
Mr. Gawf said the City was not setting a different rule.
Council Member Wheeler assumed that the motion pertained to the thoughtful consideration of the redesigned BMR process and would look at the issue she raised about defining who was a teacher. Council Member Mossar urged the Council to not consider the
project as being precedential for the neighborhood concerning the rest of the SOFA decision. She did not want those who struggled with the study of SOFA II to be turned off their enthusiastic approach by anything they heard at the present meeting. The SOFA Working Group should keep working and finish
the study. The growth of jobs needed to slow down, and development in the housing area should be accelerated.
Mayor Eakins wanted to refer the Homer Street façade treatment to the Historic Resources Board (HRB). She recalled a good
discussion about the original Creamery building in the HRB. The concern was about the structure and the nature of the Homer
Street corridor. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to refer the Homer Street façade treatment to the
Historic Resources Board.
MOTION PASSED 8-0, Beecham “not participating.”
RECESS: 9:32 p.m. to 9:47 p.m.
ORAL COMMUNICATIONS Edie Keating, 3511 Waverley Street, spoke regarding defending
the City.
Deborah Ju, 371 Whitelen Drive, spoke regarding growth limits. Stephanie Munoz, 101 Alma Street, spoke regarding office space and development rights.
Larry Mitchell, 3888 Grove Avenue, spoke regarding jobs and housing imbalance. CONSENT CALENDAR
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MOTION: Council Member Mossar moved, seconded by Ojakian, to
approve Consent Calendar Item Nos. 1 and 3 – 12, with Item No. 2 removed at the request of staff.
1. Gas Rate Increase - Refer to Finance
2. Policy for the Use of Financial Instruments for Managing Price Risk of Electricity and Natural Gas Commodities - Refer to
Finance 3. Risk Management Strategies: Approval of Energy Risk Management Policies - Refer to Finance Committee
4. Neighborhood Traffic Calming Program – Refer to Policy and Services Committee (continued from 1/16/01) 5. Resolution 8036 entitled “Resolution of the Council of the
City of Palo Alto Authorizing the City Manager to Submit to the San Francisco Baytrail Project a Grant Application for Funds which the City Intends to Expend on Trail
Improvements Located Along the Faber/Laumeister Tract in the Palo Alto Baylands”
6. Ordinance 4682 entitled “Ordinance of the Council of the City Of Palo Alto Amending Section 18.08.040 of the Palo
Alto Municipal Code (the Zoning Map) To Change the Classification of Property at the Intersection of El Camino
Real and Wells Avenue Known as 675-695 El Camino Real/Wells Avenue from PC Planned Community 4465 to PC Planned Community” (1st Reading 2/5/2001, PASSED 6-0)
7. Contract Between the City of Palo Alto and Power
Engineering Contractors, Inc. in the Amount of $838,700 for the Ash Handling System Modification Project at the
Regional Water Quality Control Plant (Wastewater Treatment Capital Improvement Program Project 8021)
8. Ordinance 1st Reading entitled “Ordinance of the Council of the City of Palo Alto Amending Title 10, Chapter 10.04, Section 10.04.045 and Section 10.08.025 of the Palo Alto Municipal Code Relating to Police Community Service Officers”
9. Three-Year Agreement Between the City of Palo Alto and the
United States Geological Survey in the Amount of $230,251 for San Francisco Bay Monitoring
10. Contract Between the City of Palo Alto and Power Engineers, Inc. in the Amount of $267,210 for Engineering and Design
Services for Park Boulevard Switching Station Reconstruction Electric Capital Improvement Program Project
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0006
11. Agreement Between the City of Palo Alto and Winzler & Kelly
Consulting Engineers in the Amount of $64,400 for Inspection and Testing of Hazardous Materials at Various City Facilities - Capital Improvement Program Project 10019
12. Resolution 8037 entitled “Resolution of the Council of the
City of Palo Alto Supporting the Santa Clara Valley Water District’s Commercial Washing Machine Rebate Program” MOTION PASSED 9-0 for Item Nos. 1 and 3-12.
CLOSED SESSION
This item may occur during the recess or after the Regular Meeting. 13. Conference with Labor Negotiator
Agency Negotiator: City Manager and his designees pursuant to the Merit Rules and Regulations (Jay Rounds, Charles Perl and Scott Bradshaw)
Represented Employee Organization: Services Employees
International Union (SEIU), Local 715 Authority: Government Code Section 54957.6
UNFINISHED BUSINESS
15. Ordinance Authorizing the City Manager or Director of Utilities to Enter Into Long Term Contracts For The Purchase of Power and Energy (Electric Energy and Capacity In Anticipation of an Immediate and Substantial Loss of the
City of Palo Alto’s Power Now Furnished By The Western Area Power Administration and Declaring The Urgency Thereof To Take Effect Immediately” (Continued from 2/12/01)
Director of Utilities John Ulrich said the previous week’s Council meeting included a request from the Utilities Director and the City Manager to allow staff to enter into long-term
contracts for the purpose of power and energy. Only the Council was able to authorize negotiations on contracts exceeding three
years. Because of the unprecedented nature of the concern staff had for Pacific Gas and Electric (PG&E) potentially going bankrupt and/or a contract that the Western Area Power
Administration (WAPA) had with PG&E, there was a strong potential that the contract could be changed significantly or
voided. With that concern, it was imperative to request the Council’s permission to allow staff to negotiate contracts for up to 75 megawatts and up to 10 years. At the request of the Council and the Utility Advisory Commission (UAC), he was asked
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to discuss the matter and get recommendations from the UAC.
Staff met with the UAC the prior week and reviewed the recommendations. With the concurrence of the UAC, staff made
recommended changes which were listed in the staff report (CMR:147:01) as follows:
1. Lower the authorized quantity of energy from 75 megawatts to 50 megawatts. Also, the energy contracts portfolio
shall be diversified across time, quantity, and price. Staff should endeavor to make each necessary purchase for a quantity less than 50 megawatts, and the contract start dates should be staggered within the authorization period.
2. Protect the City from potential economic loss if Palo Alto’s large retail customers are able to purchase power from alternative energy suppliers while the City has previously committed to long-term power supply contracts
on their behalf. Such protection may involve changes to customer choice under the electric Direct Access Program,
retail pricing policies, and utility rules and regulations.
3. Add Council committee oversight and concurrence prior to signing long-term contracts. The oversight committee
should be composed of a subset of the Council, with at least one UAC member in an advisory role.
Staff believed the recommendations were appropriate. Flexibility was needed to negotiate in the market. The action was not a
solution but an insurance policy to assure that the City would not have major rate spikes to the customers.
Mayor Eakins declared the Public Hearing Open.
Utilities Advisory Commission (UAC) Chairperson Rick Ferguson, 1037 Hanker Avenue, said the UAC had spent many hours reviewing the issue. On a 5-0 vote, the UAC supported the ordinance before
the Council at the present meeting. Prior to the recent energy crisis, Utility staff and the UAC enjoyed the luxury of time,
planning a diversified energy portfolio to fill the energy hole that appeared at the contract expiration in 2004. The UAC thought it had two or three years to learn how to manage risks and develop a diversified energy portfolio. The good news was the Utility staff had organized a process for educating the UAC
and Council. The emergency ordinance was not new. The plan for developing a diversified portfolio past the year 2004 included the UAC’s writing long-term contracts for 25-50 megawatts of power. The UAC supported giving staff enough additional
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authority to negotiate credibly and effectively with energy
suppliers in the extremely volatile short-term environment.
UAC Commissioner George Bechtel, 458 Lowell Avenue, said the Council should support and adopt the emergency ordinance. His concern was with the operation of the oversight committee. The
Council committee would understand that some of the negotiations and issues needed to be dealt with quickly. Some of the
negotiations needed to be kept in confidence which was an issue the Council had to deal with. R. Digumarthi, 3744 Starr King Circle, attended the UAC meeting and felt how Palo Alto Utilities bought power was an interesting
process. Most of the citizens in Palo Alto did not know the breakdown of power purchases. The citizens should receive a copy of the presentation showing how Palo Alto got its power. Flexibility was needed to find a solution. He heard that City of Palo Alto Utilities wanted to stop the direct purchase power by
the customers. He asked what was the effect on Palo Alto’s green power program. The agreed limit of power purchase of 25
megawatts was large, and a balanced action should be found. Richard Cassel, 621 Wellsbury Way, said the public should be
aware that the purchase would not change the blackout situation. If 50 megawatts was purchased at $06.5, that money was what the
City currently paid for 150 megawatts. The commitment would be doubled. If power costs went down at the rate it went up, the City would be stuck with an 80 percent increase in rates. A
surcharge should be instituted rather than buying at a high price.
Lynn Chiapella, 631 Colorado Avenue, said there was a potential loss of between $2 million and $5 million if prices dropped. The
venture seemed risky, and the Council might need to recoup and look at the prices it charged to big users. The prices should
increase rapidly in the beginning to encourage everyone to turn off lights and conserve energy.
Herb Borock, P.O. Box 632, said the Council should provide the oversight by having the decision made in open and public
meetings. The suggestion was that the decision be made by a committee that was not subject to the Brown Act. Staff was asked what the cost would be for that type of decision-making. The example suggested by UAC member Dexter Dawes was a five-day delay, that is, getting a contract on a Wednesday and putting a
staff report in the Council’s packet for a Monday decision. The cost to residential customers for the Council oversight to look at a contract would be $.50 per month on a utility bill. Assuming residents paid 20 percent of the price of energy uses, the amount was $.73 per month. If the Council decided it did not
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want the oversight, the ordinance should be amended so staff was
directed to place the contract or a summary of the contract in the next Council agenda packet. The UAC recommendation was to
separate the decision of committing the City to pay a certain amount of money for the extra power capacity from the decision of committing the largest customers to agree to purchase the
power. If the price went down in the market, the larger customers would have the option to purchase the power elsewhere,
and the City would be stuck with the higher cost. Stephanie Munoz, 101 Alma Street, concurred with the people who intimated that large users should pay more than small users proportionally. She asked the Council to discuss seriously the
possibility of owning its own generating plant. Mayor Eakins declared the Public Hearing closed. Council Member Beecham said the ordinance was reviewed that day
to provide better clarification of the intent and to adjust how the standing oversight committee worked and was specified in the
ordinance. The corrected ordinance was distributed to the Council. Section 2 of the Ordinance was formatted differently. Section 2. A. clarified terms and conditions and specified, as
recommended by the UAC, that 50 megawatts was the maximum. The time period was limited to 10 years and, to the extent possible,
there should be a portfolio of different amounts and terms. Part 2.B. defined the obligations of the standing oversight committee. The following changes were read, “The three members
of the City Council shall be appointed by the Mayor and approved by the City Council to serve as the standing oversight
committee. The committee shall have the authority and duty to promulgate, review, and approve the supplemental terms and conditions under which the City Manager shall exercise the
authority granted by this ordinance. The committee shall meet regularly, as often as necessary, and shall approve one or more
written statements of the supplemental terms and conditions under which the City Manager shall exercise the authority granted by this ordinance." There was a penalty for delays.
Conditions could change rapidly in ways that could not be readily anticipated. The Governor came out with a core plan on
how the State would approach the current crisis. A key purpose for the committee was that it would be able to approve a contract quickly, but could also work with staff on a close basis to respond to major changes in the environment.
Council Member Wheeler said one of the UAC recommendations was to have a UAC member serve in an advisory capacity. She asked if that would happen.
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Council Member Beecham said the oversight committee consisted of
the elected officials of the City and as such would be a Brown Act committee. Meetings would be posted and open to the public.
Section 2.C. referred to internal review and specified that “The City Manager shall use the advice of the City Auditor in looking at the contracts.”
Council Member Fazzino recognized Palo Alto was in a unique
situation as a public jurisdiction that ran its own utility system. Meetings had to be held according to the Brown Act but the flexibility and speed of a private enterprise was needed. He was willing to go some distance to provide staff with the flexibility to enter into contracts in order to provide a
reliable level of service at the lowest possible cost to Palo Altans. At the same time, he was intrigued by the idea of an oversight committee, but questioned how many times the staff would be in a position to act quickly when someone brought in a proposal and the staff would not have the opportunity to appear
at the next Council meeting for review and consideration. He did not foresee many occasions when a proposal would not be able to
be brought to the full Council to ratify the action of the City Manager, Utility Director, and oversight committee.
Mr. Ulrich said it would be difficult to get a party to negotiate a contract if it were not sitting down with a party
that could negotiate a contract. Council Member Fazzino’s idea was that the Council would have to actively participate in the negotiations and say yes or no. Staff asked for authorization to
represent the City in the market to buy power.
Council Member Fazzino said the contract would have to be ratified by the full Council.
Council Member Beecham said staff had the authority to do contracts for not more than three years. The change in the
ordinance was that the length of time was changed to not more than 10 years. At the present time, staff had the authority to enter into contracts for three years for needed energy.
City Manager Frank Benest said the oversight committee would set
general parameters, and staff would have to act under those parameters. If an offer was received on Wednesday, there was no way under the current system to get it to the Council the following Monday.
Council Member Fazzino clarified action needed to be taken immediately on a five to ten year proposal. Mr. Ulrich said the reason for taking action to such a high level was because of the considerable concern and risk of PG&E’s
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going bankrupt. Counsel was retained to look at the potential
for PG&E bankruptcy. If PG&E went bankrupt, staff wanted the option to move quickly.
Council Member Beecham said being prepared to act quickly when something happened would give the City an advantage over others
who would be in the market as well.
City Attorney Ariel Calonne said as Mr. Ulrich mentioned, the primary motivator was anticipating PG&E’s bankruptcy and being in a position to get into the market to buy power possibly to replace power that might be lost. That was the foundation for the urgency findings that gave the Council the power to change
rules overnight, which was what staff asked the Council to do. The scenario was that the Council would not have to sign a contract overnight but would pay a premium to induce someone to hold the price open for the week or more that it might take the Council to approve it. There was a pricing penalty for delays.
The risk management features were before the Council because the venture was new. The City Manager would be the one with the
authority to sign contracts, and the oversight committee would approve supplemental conditions. The oversight committee would essentially created a mini-tariff that the City Manager would
use to prove the contract was in his authority to bind the City. The Council needed to be clear about what it was buying with the
ordinance. His understanding was the Council was buying a leveling of price spikes rather than having Palo Alto rate payers absorb market spikes in the immediate term.
Council Member Fazzino clarified that no standing committee of
the Council had formal authority, and ultimately the only authority in the ordinance resided with the City Manager.
Mr. Calonne said the ordinance empowered two bodies: the City Manager and the oversight committee. The ordinance did affect
the delegation of authority to the oversight committee and empowered the committee to establish supplemental terms and conditions that would inform a contract.
Mr. Benest said the oversight committee would establish certain
types of parameters, given the market place. The parameters might change as the market changed. Staff tried to balance the need for authorized, quick action to take advantage of the market place with some legitimate oversight by elected officials.
Council Member Lytle saw a compromise between the original recommendation that was set out to assist the Council in moving decisively, flexibly, and quickly in a time of urgent changing of the environment with some of the input heard from the public
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and UAC for political accountability and public consumer
oversight. She was pleased to hear that the meetings would be subject to the Brown Act and that the full Council would approve
the composition of the committee. She was thrown off by the insertion of the City Auditor’s role which appeared to run counter to the idea of the City Manager being able to work
quickly. She questioned what would happen with disagreement between Auditor, Manager, or oversight committee.
Council Member Beecham said the City Auditor was important as a Council Appointed Official (CAO) to represent the Council’s concerns. The City Auditor was an advisor to the City Manager and provided advice but not approval. The City Auditor was
welcome to advise the committee of issues, but the committee ultimately set the terms and conditions. Council Member Lytle asked about disagreement between the City Auditor, City Manager, or committee.
Council Member Beecham said the committee set the policy, and
there was no way the City Manager could execute a contract in violation of set policy. The committee would arbitrate between a difference of opinion between the City Auditor and City Manager.
Mr. Benest said many people would advise the City Manager. The
City Auditor, Director of Administrative Services, Utilitis Department, and City Attorney would be involved. The committee would set the general parameters. He did not see a problem.
Mr. Calonne said acquiring the chunk of power committed the City
to sell chunks of power in the future. There were many unanswered questions about how the buying and selling of surplus power fit with standard investment policies. Getting into new
financial transactions without the advice of the person responsible for fiscal management would be imprudent.
Mayor Eakins said she asked for the City Auditor’s role because she wanted a separate independent voice. Better decisions would
be made with more information and sources.
Vice Mayor Ojakian asked for Mr. Ulrich’s thoughts about the possibility of a surcharge as opposed to buying more energy and charging more for the energy. Mr. Ulrich said cost increases needed to be looked at and dealt
with through a mix of options. One of the options was the long-term contract. Reserve reductions and aggressive conservation could be looked at to mitigate the impact on rates. An earlier speaker referred to the idea that prices were higher at the current time, short-term contracts should be written, and power
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would be bought at a higher price and passed on to the customer.
The recommendation was to move ahead with long-term contracts and negotiate them to see if that was the best thing for the
City do. Vice Mayor Ojakian said the Finance Committee took action in
December 2000 to extend the Western contract. He asked about the length of the contract.
Mr. Ulrich said the Finance Committee’s action extended the hydro portion of the current contract for an additional 20 years. MOTION: Council Member Beecham moved, seconded by Burch, to adopt the revised ordinance, to take effect immediately and remain in effect for one year, authorizing the City Manager to enter into long-term contracts, either directly or indirectly, for the sale and purchase of electric commodities with revised
ordinance discussed at meeting.
Ordinance 4683 entitled “Ordinance of the Council of the City of Palo Alto Authorizing the City Manager to Enter Into Long Term Contracts For The Purchase of Power and
Energy (Electric Energy and Capacity In Anticipation of an Immediate and Substantial Loss of the City of Palo Alto’s Power Now Furnished By The Western Area Power Administration and Declaring The Urgency Thereof To Take Effect Immediately”
Council Member Kleinberg clarified the ordinance was being
passed as an emergency matter to take effect immediately but triggered by an event that might not happen, that is, the bankruptcy of PG&E.
Council Member Beecham said the ordinance was in consideration
of events that might happen. Council Member Kleinberg said, should PG&E be rescued by some
type of government or other arrangement, the ordinance might become moot at that point.
Council Member Beecham said there were other options even if PG&E were rescued. PG&E had the right to make a filing with the Federal Energy Regulatory Commission (FERC) to revise the terms of the contract, which would be to the City’s detriment.
Council Member Kleinberg asked whether there should be an escape hatch if circumstances changed enough that the ordinance was not needed.
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Council Member Beecham said that was the ultimate purpose of
having the oversight committee.
Council Member Kleinberg suggested the oversight committee, together with staff and the UAC, come back to the Council on a regular basis to report at the Council level what was happening
with the PG&E situation and with the utilization of the power to buy contracts.
Council Member Beecham said the oversight committee would keep the Council updated and insure that the public was kept aware of the situation. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER that the standing committee should be required to
report back to the Council at next regular Council meeting, and the committee should be composed of four Council Members rather than three.
MOTION PASSED 9-0.
MOTION: Mayor Eakins moved, seconded by Fazzino, that the
committee be composed of Mayor Eakins, Vice Mayor Ojakian, and
Council Members Beecham and Mossar. MOTION PASSED 9-0. PUBLIC HEARINGS
16. PUBLIC HEARING: The Palo Alto City Council will consider an
appeal by Truman Cross of the approval of Neighborhood Preservation Exceptions granted to Stan Hindman on behalf of Brian Wilson for property located at 610 California
Avenue, to allow placement of a garage in the rear yard setback, reduction of required parking from two covered
spaces and one uncovered space to one covered space and one uncovered space, and a 4’1” encroachment into street side yard where a 16’ street side yard setback is required.
Environmental Assessment: Exempt from the provisions of the California Environmental Quality Act. Zone District: RMD
(NP). Item withdrawn at the request of the appellant.
17. PUBLIC HEARING: The Palo Alto City Council will review the Extension and modification of interim zoning to preserve and encourage neighborhood serving retail uses and limiting
office uses in ground floor locations in the Neighborhood Commercial (CN) District at Charleston Plaza (portions of the 3900 block of Middlefield Road) and the Midtown
District (portions of the 2600, 2700, and 2800 blocks of
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Middlefield Road and the 700 block of Colorado Avenue)
(Continued from 2/12/01) City Manager Frank Benest said the Council adopted the interim zoning ordinance to protect ground floor retail in Charleston
Center and Midtown Shopping District on January 16, 2001. Staff recommended extending the interim ordinance until April 20, 2001, with cleanup language as indicated in the staff report (CMR:142:01). Many discussions with neighborhood groups, merchants, and property owners were held that dealt with issues
to modify the interim ordinance and get the best interim protection for ground floor retail for the Palo Alto community.
Staff was not ready to discuss any issues of substance, but would be ready to return on April 9, 2001.
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Council Members Fazzino, Mossar, and Kleinberg left the Council
meeting at 11:20 p.m.
Annette Ashton, 2747 Bryant Street, urged the Council to support the staff recommendations. The Council’s approval would keep the interim ordinance in place and continue to protect retail
services in Midtown. The Council would have an opportunity in April 2001 to see and evaluate alternatives. Immediate
protection for retail was needed. Retail space needed to be preserved and not eroded by office space. She was not unsympathetic to the needs of building owners to attract financial, feasible businesses to their locations. Midtown should be a prosperous, vital retail area. Loss of retail
diminished what was left of the current retail. Karen White, 146 Walter Hays Drive, said the Council’s January 16, 2001, passage of an interim ordinance to preserve and encourage ground floor retail uses in neighborhood shopping
centers was a strong step toward implementing Palo Alto’s Comprehensive Plan (Comp Plan). Action to extend the ordinance,
pending further fine-tuning, would avert the current and immediate threat to the public welfare if the ordinance were not extended. The findings in Attachment A & B to the staff report
(CMR:142:01) encapsulated the threat that faced Midtown and Charleston Plaza. Given the promises of protection articulated
throughout the Comp Plan, residents should not be asked to shoulder the damaging impacts of further office conversions in areas that were defined as neighborhood shopping centers, nor
should investors advance their economic interest by asking the Council to weaken neighborhood protections. Palo Altans needed
retail protection before one more Midtown merchant was ousted to make room for a ‘dot com”. She urged the Council to uphold the Comp Plan’s vision for the Midtown and Charleston Plaza
neighborhood centers and to vote unanimously to extend the amended ordinances.
Deborah Ju, 371 Whiteglen Drive, said the Charleston Meadows Neighborhood Association Board supported the extension of the
interim regulations for ground floor retail and hoped that permanent regulations would be forthcoming. She urged the
Council to tailor the regulations to make the retail use as neighborhood serving as possible because people would get out of their cars and walk to retail uses. Charleston Plaza was allowed more office space than Midtown. Charleston Plaza did not have much to offer as neighborhood serving. Another important issue
for retail was that it was more neighbor friendly and gave people a gathering spot. John K. Abraham, 736 Ellsworth Place, said the ordinance was not strong enough and urged the Council to strengthen it to preserve
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retail more explicitly. Loss of retail was the problem. The
ordinance was written to be extra sensitive to the wishes of the owner. Outreach meetings with the owners were held on December
13 and 14, 2000, and February 15, 2001, but it was impossible to determine from reading the ordinance which of the owners asked for what. The staff report (CMR:142:01) was in error when it
implied that Mr. Cobb’s building was always office use. A Wells Fargo Bank was at that location for many years. The manager of
CSI asked for commercial recreation and outdoor recreation services. Despite the many letters and emails, the issue was not as sensitive to retail or residents as it was to owners. The owners had high increase in property values. The neighbors were stuck with offices. He urged the Council to give more attention
to saving retail and if possible force reversion to retail from the stores on Midtown at the current time. Mark Kousnetz, 2475 South Court, felt the Council tried hard to make the right decision. The amount of vacancy in Midtown
historically had to be taken into consideration with the decision. He had ambitious long-term plans for his 2,200 square
foot building which would most certainly be a neighborhood serving use. He had not had much success with retail showing up for his marketing efforts. He wanted to see a flourishing
Midtown but had not found the retail tenant that fit his building.
Russ White, 181 Bryant Street, opposed the ordinance because it was foolish to think that an ordinance was going to keep retail
in Midtown. The ordinance stated that if the Council decided to extend it, the Council had until April 30, 2001, to change its
mind and, if the Council did not change its mind, no vote was necessary to continue it, and the ordinance would stay in effect for an additional 22 months.
Alex Edelstein, 355 Santa Rita, favored the extension. The
evaluation of retail protection on El Camino was delayed. He encouraged the Council to consider trying to make sure that area did not continually get serialized beyond the ongoing
Midtown/Charleston project. Fragile retail was found on El Camino and there was no neighborhood group championing those
businesses. Lynn Chiapella, 631 Colorado Avenue, questioned page 3 of the Midtown ordinance, item 7, where the first few words should be last, noting that changes were suggested by Tom Ashton. She
supported the concept of the ground floor retail, which should be applied fairly and consistently to all. There were currently special exceptions for two properties with office buildings, and a third was proposed at 689 Colorado Avenue. If that was added,
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677 and 675 should be added because they were ancillary uses to
689 Colorado Avenue.
Jay Chesavage, 3833 Middlefield Road, supported the extension and wanted to see sections of Midtown reverted to retail uses that they were historically.
Katherine Lose′, 724 Coastland Avenue, said the problem with
making the ground floor retail occurred when the space was not rented and the spaces remained vacant. Flexibility in the overlay was needed so that buildings did not stay boarded up
waiting for retail. She hoped the Council considered Midtown’s history and allow flexibility.
Ron Wolf, 745 San Carlos Court, said a strong retail was good for Midtown residents and the City. It was obvious that retail
was being replaced by commercial until the Council’s action earlier in the year. Office use put pressure on rents that could
not be sustained by typical retail use. Retail uses could not generate $10 per square foot per month and be a sustainable business. The pressure was enormous and hurt retailers. He worked with many of the successful businesses in Midtown. The ordinance needed to be extended and time was needed for the
property owners to work with the City and retail businesses to construct a fair ordinance.
Herb Borock, P.O. Box 632, said when the ordinance was before the Council in January 2001, the map of Midtown omitted one
property in the CN District, which was the property at 689 Colorado Avenue. At that time, he sent the Council a letter
indicating that omission. During the meeting of January 16, 2001, staff displayed a different map that included that property. He was surprised when he saw the published ordinance
and it omitted 689 Colorado Avenue. The current draft ordinance would treat that property differently than most other
properties. There was no reason to do that because the exemptions for existing offices said they could continue as the same type of business or become an office with a conditional use
permit (CUP). The dental office at 689 Colorado Avenue could continue as a dental office under the ordinance. He requested
the Council correct the map and include 689 Colorado Avenue within the area covered by the retail only with the exception for existing offices on the ground floor. Two additional reasons
for including 689 Colorado Avenue were that the ordinance mentioned 689 Bryson Avenue rather than 689 Colorado, and the
posted agenda for the current item did not include that block of Colorado Avenue within any exemptions. He did not understand why 689 Colorado Avenue was continually treated differently. The
real property with vacancies was the amount of rent that was charged.
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Stephanie Munoz, 101 Alma Street, Apt. 701, was sympathetic with the housing preservation type ordinance. Commercial property was
different. When a person spent $1 million for a property, that property was immediately reassessed. It seemed unreasonable to make an ordinance apply to recently purchased properties. The
Council should look ahead and allow for a CUP.
Tom Foy, 2775A Middlefield Road, requested an exemption from the ordinance as it applied to 689, 711, 719, and 721 Colorado Avenue. Midtown Realty was at its location since 1964 and was remodeled the prior year. His concern was that if he chose to retire, he wanted someone else to be able to take over in a
rental capacity. Council Member Beecham said the decision of the Council was to extend the ordinance for 20.5 months with a check date of April 30, 2001.
Council Member Wheeler said there were several existing real
estate offices in the Midtown District that had long-standing relationship with the District. She asked how that was handled in the interim ordinance.
Chief Planning Official Lisa Grote said the real estate offices
were allowed to continue and were able to be sold if the new owner continued the business exactly as the previous owner had. A change do a different type of office use would require a CUP.
Council Member Wheeler clarified the businesses were
grandfathered in. Ms. Grote said the use would be grandfathered.
Council Member Wheeler looked forward to the permanent ordinance
as being more aggressive in maintaining the existing retail and dealing with the issue of those properties along Middlefield Road that had converted to office use.
Council Member Lytle supported extending the ordinance only to
keep some protections in place until the ordinance returned in April. The inconsistent message being sent with the ordinance alarmed her. The ordinance did not protect retail but provided a new mechanism for small offices in Midtown. Offices were extremely detrimental to retail core. The offices on the edges
of the retail core were not detrimental to the core. The exceptions were buildings that were placed outside the shopping district. Council directed staff in November 2000 that the Council wanted existing retail protected and offices prohibited. What came back to the Council was the result of outreach, but
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the explanation of policy shift was missing in what came back.
Existing retail needed to be protected from further erosion until a further study of mixed-use zoning regulations was done.
Staff needed policy direction as to simplifying and clarifying the Council’s purpose and should go back to the motions made in November to pare the ordinance down in order to focus on the
original objectives.
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Vice Mayor Ojakian said the main intent of the ordinance was to
try to retain retail in a simplistic manner.
Council Member Burch asked whether there was anything the Council could do for Mr. Kousnetz to give him relief in the interim.
Council Member Lytle said when a similar retail protection move
was made in the 1980s for the Downtown, a vacancy provision was adopted because there was concern that properties would sit vacant. Mayor Eakins said that would be an item on April 9, 2001. MOTION: Council Member Beecham moved, seconded by Wheeler, to
adopt, with a four fifths vote, the two ordinances extending previously adopted Ordinances No. 4675 and 4676 until April 30, 2001, modifying the Neighborhood Commercial (CN) zoning
districts for the Charleston Center and Midtown Shopping District pursuant to Government Code Section 65858. Further, to
change Section 18.41.037 (g) from 689 Bryson to 689 Colorado.
Ordinance 4684 entitled “Ordinance of the Council of the
City of Palo Alto Preserving and Supporting Neighborhood-
Serving Uses in the Neighborhood Commercial (CN) District at Charleston Center (Portions of the 3900 Block of
Middlefield Road) on an Extended Interim Basis Pursuant to Government Code Section 65858 Amending and Extending Ordinance No. 4675 Adding Section 18.41.035 to the Palo
Alto Municipal Code to take effect immediately”
Ordinance 4685 entitled “Ordinance of the Council of the City of Palo Alto Preserving and Supporting Ground-Floor Neighborhood-Serving Uses in the Neighborhood Commercial
(CN) District at Midtown Shopping District (Portions of the 2600, 2700 and 2800 Blocks of Middlefield Road, 700 Blocks
of Colorado Avenue, Moreno Avenue, and San Carlos Court) on an Extended Interim Basis Pursuant to Government Code Section 56858 By Amending and Extending Ordinance No. 4676
Adding Section 18.41.037 To The Palo Alto Municipal Code To Take Effect Immediately”
MOTION PASSED 6-0, Fazzino, Kleinberg, Mossar absent.
COUNCIL MATTERS
18. Resolution 8038 entitled “Resolution of the Council of the City of Palo Alto Scheduling the City Council Vacation for Calendar Year 2001”
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MOTION: Council Member Beecham moved, seconded by Ojakian, to
adopt the resolution scheduling the City Council vacation for Calendar Year 2001 for August 7 to September 7, 2001.
MOTION PASSED 6-0, Fazzino, Kleinberg, Mossar absent.
19. Mayor Eakins re Cancellation of the February 26, 2001, Regular City Council Meeting
MOTION: Council Member Beecham moved, seconded by Ojakian, to
cancel the February 26, 2001, regular City Council meeting. MOTION PASSED 6-0, Fazzino, Kleinberg, Mossar absent.
ADJOURNMENT: The meeting adjourned at 12:05 a.m. to a Closed Session. The City Council met in Closed Session to discuss matters
involving Labor Negotiations as described in Agenda Item No. 13. Mayor Eakins announced that no reportable action was taken on Agenda Item No. 13.
FINAL ADJOURNMENT: The meeting adjourned at 12:12 a.m.
ATTEST: APPROVED:
City Clerk Mayor
NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing Committee meeting tapes are made solely for the purpose of facilitating the preparation of the minutes of the meetings. City Council and Standing Committee meeting tapes
are recycled 90 days from the date of the meeting. The tapes are available for members of the public to listen to during regular office hours.
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