HomeMy WebLinkAbout2001-04-23 City Council Summary Minutes
Special Meeting April 23, 2001
1. Status Update on San Francisquito Creek Joint Powers Authority's Proposed Levee Restoration Project............. 4
ADJOURNMENT: The meeting adjourned at 6:54 p.m.................. 5
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Regular Meeting April 23, 2001 1. Results of Community Dialogues on Budget and Infrastructure 5
2. PUBLIC HEARING: The 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 600 & 700 block of Colorado Avenue).............................. 7
3. Resolution 8047 entitled “Resolution of the Council of the City of Palo Alto Adopting a Disadvantaged Business Enterprise (DBE) Program for Federally Funded City Transportation Projects”.................................................. 30
4. Ordinance 4691 entitled “Ordinance of the Council of the City of Palo Alto Approving the First Amendment to the Development Agreement Between the Board of Trustees of the Leland Stanford Junior University and the City of Palo Alto Dated August 14, 1997”...................................................... 30
5. Ordinance 4692 entitled “Ordinance of the Council of the City of Palo Alto Amending and Reorganizing Chapter 2.04 of the Palo Alto Municipal Code [Council Organization and Procedure] to establish New City Council Procedures”.................. 30
6. Finance Committee recommends that the City Council approve the Accelerated Energy Efficiency Program (AEEP) to provide incentives for Palo Alto residents and businesses to deploy targeted, cost-effective energy conservation measures before June 30, 2001, and approve a Budget Amendment Ordinance providing an appropriation in the amount of 3.5 million from the Electric Fund Supply Rate Stabilization Reserve to the Electric Fund Public Benefit Program operating budget...... 31
8. Contract Between the City of Palo Alto and Montgomery Watson in the Amount of $370,778 for the Wastewater Collection System Master Plan................................................ 31
9. Contract Between the City of Palo Alto and Carollo Engineers in the Amount of $100,000 for Provision of a Grade-Three Water Treatment Operator......................................... 31
10. Contract Between the City of Palo Alto and Acme Security Systems in the Amount of $86,964 for the Purchase and
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Installation of a New Video Surveillance System for the City of Palo Alto Municipal Services Yard....................... 31
11. Contract Between the City of Palo Alto and K.J. Woods Construction, Inc in the Amount of $243,840 for Water/Wastewater Operations Contract Services (IFB #133401) 31
12. Finance Committee recommends that the City Council approve the proposed amendment to the Palo Alto Municipal Code and the proposed policy for the use of financial instruments for the purpose of hedging price risk for electricity and natural gas commodity purchases as indicated in the staff report (CMR:111:01)............................................... 31
12A. (Old Item No. 7) Finance Committee recommends that the City Council approve the staff recommendations to: (1) authorize the Mayor to execute the contract with Planergy International in the amount of $375,000 for the emergency, short-term rental of 5-Megawatts (MW) of diesel Back up generators and related engineering and installation services; (2) authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Planergy International for related, additional but unforeseen work that may develop during the project for an additional amount that will not exceed $30,000; and (3) approve the Budget Amendment Ordinance in the amount of $525,000 from the Electric Supply Rate Stabilization Reserve...................................... 32
13. Council Consideration and Direction on a Resolution of Intent to Dedicate Parkland at the Palo Alto Medical Foundation/South of Forest Area (PAMF/SOFA) Park Site....................... 38
14. Conference with City Attorney—Existing Litigation.......... 41
ADJOURNMENT: The meeting adjourned at 11:55 p.m................. 41
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The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:10 p.m. ROLL CALL PRESENT: Beecham, Burch, Eakins, Lytle, Mossar, Ojakian, Wheeler ABSENT: Fazzino, Kleinberg COMMITTEE OF THE WHOLE 1. Status Update on San Francisquito Creek Joint Powers Authority's Proposed Levee Restoration Project Assistant Director of Public Works Kent Steffens gave a PowerPoint presentation on the status of the San Francisquito Creek Joint Powers Authority’s (JPA) proposed levee restoration project. The project primarily involves the restoration of earthen levees to their 1958 as-built elevation along San Francisquito Creek downstream of Highway 101. The project is to be funded by the member agencies of the JPA, including the cities of Palo Alto, Menlo Park, and East Palo Alto, the Santa Clara Valley Water District, and the San Mateo County Flood Control District. Mr. Steffens’ presentation described the project background, recent changes to the project scope, unresolved design and cost-sharing issues, and next steps to be taken by the JPA. Mr. Steffens explained that several issues have arisen since the JPA’s initiation of the project in early 2000 that have necessitated changes to the scope and cost of the levee restoration project. The primary changes include upstream mitigation measures, right-of-way requirements, and increased project costs. It has been determined that the levee restoration will cause increased water levels upstream of Highway 101 during storm events. Staff believes that this impact should be mitigated by raising the floodwalls upstream of Highway 101 to prevent any net loss of flood protection. Floodwall construction will necessitate the acquisition of temporary construction and long-term maintenance easements from adjacent property owners. The estimated cost of the project has increased from $650,000 to approximately $2.5 million as a result of the changes to the project scope. The JPA Board of Directors has not yet determined whether to proceed with final design and construction of the levee restoration project nor how the additional project costs would be split amongst the JPA member agencies. The JPA Board is scheduled to vote on whether to proceed with the project at its May 2001 meeting. Mary Carey Schaefer, 742 DeSoto Drive, said it was just a repair of what existed, and she hoped the City was not doing it at the expense of another project.
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No action required. ADJOURNMENT: The meeting adjourned at 6:54 p.m.
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Regular Meeting April 23, 2001 The City Council of the City of Palo Alto met on this date in the Council Chambers at 7:03 p.m. ROLL CALL PRESENT: Beecham, Burch, Eakins, Kleinberg, Lytle, Mossar, Ojakian, Wheeler ABSENT: Fazzino REPORTS OF OFFICIALS
1. Results of Community Dialogues on Budget and Infrastructure
City Manager Frank Benest presented a video entitled Community Values: Shaping Our Financial Priorities, which showed the dialogue experience, conclusions from the dialogues, and identification of the next steps. Eleven dialogues were held, with over 300 participants. The focus was on the budget, financial priorities of the City, and the infrastructure challenge. The format included brief presentations, discussions, and dialogues. There was consensus that the City needed to take care of what it already owned. Beyond the basics, Palo Alto had many priorities. There was a high level of priority on libraries, recreation, open space, cultural facilities, utilities, land use, and transportation. As a key conclusion, 74 percent of those who participated in the dialogues stated it was important to increase funding for infrastructure. The Council created a 10-year program to erase the existing backlog on infrastructure maintenance and rehabilitation. The City identified and projected $78 million for that program. Therefore, there was a $22 million problem over the next 10 years. The desire was to solve the problem with existing resources. Staff created a $22 million solution that had three principal elements. The first was to cap spending on services over the next 2-year budget and slow the growth in services over 10 years. The second part was to restructure the General Fund reserves. There was a 26 percent General Fund reserve, which was more than what the City needed. The third was to recapture aggressively tax dollars sent by Palo Altans to the federal and state governments. The $22 million solution would be presented to the Finance Committee as part of the proposed budget for 2001-2003. The next steps were to invest over $14 million on infrastructure during 2001-2003, which was a significant ramping of the money spent on capital improvements. Once the existing problem was solved, the City would return to the community to explore other priorities and the funding for some of the new infrastructure projects, such as libraries, storm drains,
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and the police building. People could find out more about the major challenge facing the Palo Alto community. A CityWorks Festival would be sponsored, which would be an opportunity for families in Palo Alto to have an interactive, hands-on experience with pipes, machines, and buildings at the Municipal Services Center on May 12, 2001, from 10 a.m. to 2:30 p.m. A summary of the dialogues appeared in the first issue of CityPages and on the City’s web site. No action required. PUBLIC HEARINGS 2. PUBLIC HEARING: The 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 600 & 700 block of Colorado Avenue) Chief Planning Official Lisa Grote said there were four key issues. The first was whether or not there should be an ordinance to protect ground floor retail uses and other personal services in Charleston and Midtown. If so, the second issue was questions of how aggressive the ordinance should be, and whether there should be relief mechanisms built into the ordinance, constituted by conditional use permits (CUPs) or vacancy rate triggers as used in the Downtown area. The third issue was how aggressive the City should be in requiring replacement of nonconforming with conforming uses. The fourth issue was whether there should be a pedestrian overlay for Midtown as there was in the Downtown and California Avenue areas. In an attempt to address the issues, staff would review the ground floor interim regulations that were currently in place, discuss a potential modification or an alternative approach for Midtown based on the ground floor regulations in Downtown, and review the effectiveness of the Downtown regulations over the past 10 or 12 years. Finally, staff would discuss whether or not the interim regulations should be continued or modifications made. The presentation focused on Midtown rather than Charleston because that was where most of the questions and comments had been raised. There was information on the Charleston Center as well. Currently, the interim regulations for Midtown required CUPs for any new office use on the ground floor within the defined district. The exception was the transfer of ownership only. There was a third CUP, which required the office use be shown to strengthen or enhance the Midtown Shopping District as a neighborhood resource. Staff was required to review the overall mix within the Shopping District, the location and nature of the proposed office use, and the design of the structure or the space that it would be located within. Examples were dental offices, small real estate offices, and travel
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agencies that generated pedestrian traffic and a consistent amount of activity within the center. There was a suggestion to attach a 2,500-square-foot limit to office uses. Council Member Mossar clarified that Ms. Grote was presenting what was in the current interim ordinance, which would sunset if Council took no action. Ms. Grote said that was correct. There were four buildings on Colorado Avenue excluded from the ordinance because they were on the edges of the Shopping District, and they had been designed and used primarily for either financial services or office uses for the majority of the buildings’ life spans. Staff and the Planning and Transportation Commission (PTC) recommended deleting the definition of neighborhood service use, which was not complete, and that the definition be replaced with a reference in the third use permit finding to the definition of a neighborhood center as currently defined in the Comprehensive Plan. Then when a CUP was applied for, staff would evaluate whether or not it contributed to or complied with the definition of neighborhood center. Neighborhood centers were defined in the Comprehensive Plan as small retail centers with primary trade area limited to the immediately surrounding area with a variety of smaller retail shops and offices oriented toward every day needs of surrounding residents. As an alternative approach, Council asked staff to review the ground floor regulations in Downtown. In the Downtown area, there was a ground floor combining district that applied mostly to University Avenue and some side streets. There was a specific list of allowed uses on the ground floor, including restaurants, hotels, personal service, retail uses, theaters, travel agencies, and entrances and lobbies to non-ground floor uses. In addition, up to 25 percent of ground floor space was allowed to be occupied by office use if it were not a street-facing façade. A third conditional use finding was required for conditional uses on the ground floor. An example was when Q Café requested a commercial service be located on the ground floor of its building. The third finding required that the space be uniquely suited for that kind of use, not as appropriately suited for a traditional retail or personal service use. If two conditions existed--a five percent or greater vacancy rate for the entire ground floor defined area and a specific ground floor space within that area had been vacant for six months or longer--an office use could be located automatically in the space without a formal City public hearing. There was a five-year time limit to that exception. In evaluating how effective the ground floor combining district had been, staff reviewed the number of parcels in the ground floor area. There were approximately 234 parcels in the ground floor combining district, including 90 retail, 64 restaurant, 14 office, 5 financial service, and one government use. When the ground floor restrictions were applied to Downtown, the 14 office spaces and 5 financial services were all in place, and so permitted uses had not been lost in the Downtown area over the 12-year period. Staff
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believed the ground floor restrictions had been effective in retaining desired uses on the ground floor. If the City were to use the model and modify it, staff recommended modifying the allowed uses in the commercial neighborhood (CN) zoning district that would prohibit offices on the ground floor and would allow them only on above-ground floor space. Staff also recommended retaining other permitted and conditionally permitted uses as currently stated in the CN district. There would be the inclusion of an exception process, which would require a 5 percent vacancy district-wide and a 6-month vacancy rate for an individual property. If the vacancy rate were created by one building only, that building would need to be vacant for 12 months or longer. There were five or six buildings in Midtown that exceeded the five percent of the total square footage on the ground floor. The exception could be effective for five years, but staff recommended that no more than one exception be granted for a site. Currently, that was not explicit in the Downtown. Rather than have the exception be automatic, if the two vacancy triggers were met, a CUP could be required at that point, which would then require a public hearing. The final modification that could be considered was a change in the nonconforming use and the regulations around nonconforming uses. As in the Downtown area, existing nonconforming uses could continue. Existing uses could be sold or transferred to new owners, but in all other cases when existing nonconforming uses vacated a site, they would need to be replaced with conforming uses. That was different from the ground floor regulations currently in the Downtown. However, it was one of the aspects that Council asked staff to look at in evaluating Downtown ground floor regulations. In the CN district, there were size restrictions that permitted ground floor office outright as a permitted use. In the interim ordinance, a CUP was required to have ground floor office. In the ground floor modified restrictions, ground floor office was allowed only when vacancy rates were triggered. The final recommendation that staff made was that the pedestrian shopping district be applied to Midtown. It would be slightly modified but would require physical changes as storefronts were upgraded. Staff recommended that the physical improvements be required whether CUPs or a prohibition on ground floor office were the chosen approach. In summary, the PTC and staff recommended extending the interim ordinances for Midtown and Charleston Center with the deletion and replacement of the definition of neighborhood-serving use with a reference in the third use permit finding to the neighborhood center as defined in the Comprehensive Plan. PTC and staff recommended the adoption of the pedestrian combining district for Midtown. PTC and staff recommended adopting the interim ordinances with minor modifications, which were Attachments A and B of the staff report (CMR:203:01). The alternative approach was the modified ground floor restrictions, which was Attachment D of the staff report. Any of the interim ordinances would be in place until March 2, 2003. By that time, the Zoning Ordinance update would be completed.
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Planning and Transportation Commission Member Bonnie Packer said the PTC wanted to preserve the retail and other permitted uses in both Midtown and Charleston Center by limiting office space on the ground floor. PTC recommended an ordinance to protect the ground floor retail uses. There was much discussion on how aggressive the ordinance should be and whether there should be a relief mechanism to allow office space either by using a CUP or the vacancy rate trigger that was in the Downtown ground floor combining district. Midtown was a much smaller area with fewer parcels, and the vacancy rate could be manipulated in order to have office space. A CUP would allow more input from people about what type of office space would work, and it was a more democratic process. In terms of the aggressiveness, anytime there was a vacancy and a nonconforming use would change, only a conforming use should be allowed, unless the applicant went through the CUP process. The PTC struggled with the issue of deleting the definition of neighborhood-serving, but the PTC realized the definition was not perfect. The reference to the Comprehensive Plan gave more of a basis for people to evaluate whether an office would serve the neighborhood. The PTC agreed there should be a pedestrian overlay for the design of the retail uses. Regarding the definition of the boundaries of Midtown, the PTC accepted the excluded addresses, which were currently office space, because they were not facing Middlefield Road. If Midtown was predominantly retail and there was a small amount of office space, there might not be enough support for the retail uses. Council Member Mossar asked whether the PTC’s discussion was only about office uses, not retail uses, when it made its decision to refer to the Comprehensive Plan for the uses of Midtown rather than the ordinance defining neighborhood-serving uses. Ms. Packer believed the definition was designed to define which office uses could be neighborhood-serving. Council Member Mossar clarified it was the PTC’s intent that the retail uses defined in the current ordinance would be the allowable retail uses and that when the CUP process were used to consider office uses, that would be compared to the language in the Comprehensive Plan. Ms. Packer said that was correct. Council Member Kleinberg said that in reading the PTC minutes, there seemed to be a need to take a vote because of Council’s deadline. She asked whether that did not overwhelm a thoughtful and in-depth examination right up until the last moment of the meeting because there were unanswered questions and some conversation about needing another meeting, which did not happen. Ms. Packer said expectations that people had for a retail neighborhood shopping center made sense 20 years prior but might be
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different currently and could be different in five years. Those were larger, theoretical issues that were peripheral to the task of getting the interim ordinance in place. There was a sense of urgency because of the timeline to meet. The PTC felt strongly about preserving retail uses, and was aware that in a year and a half, the new Zoning Ordinance would be in place. Much of the discussion and some of the questions that the PTC raised could then be included. Council Member Lytle said the PTC discussed excluding four properties in Midtown and applying the regulations to the remaining properties. She wanted to address it from a different direction, because she believed the four questions that staff raised could be answered differently when discussing the retail heart of Midtown, the periphery of the CN district, or the potential or existing second floors of that district or the backs of the core area. She asked whether there was any attempt at the PTC meeting to draw or define the retail core or heart where a ground floor restriction would be applied. Ms. Packer said the PTC worked with the boundary that was in the staff report presented to the PTC. Council Member Lytle asked whether it were the entire CN district. Ms. Packer said no. It was the boundary to which the interim ordinance would apply, which excluded the four addresses. Council Member Lytle clarified the PTC determined that it was the retail heart or core of the Midtown Shopping District. Ms. Packer said that was correct. The PTC discussed it in that sense because the rest of the parcels were either facing Middlefield Road or a busy parking area. Council Member Wheeler said the suggestion to delete the “neighborhood-serving” had something to do with the definition not being perfect. On the other hand, she heard from the community that the reference to verbiage out of the Comprehensive Plan was a significant weakening of the protections for retail. She asked whether it was a weakening of the ordinance, and if so, whether the stated goal of protecting the ground floor retail was protected. Ms. Grote said it did not weaken the ordinance because it gave the opportunity to evaluate the nature of the use, the activity that would occur as a result of the use, and how it fit into the overall mix of the center, which were all part of the evaluation with the third CUP finding. Although the definition was more general in nature, it gave control and evaluation possibilities.
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Council Member Wheeler asked about the CUP process, noticing, and citizen participation. Ms. Grote said the district ended up being defined so that the City would send notices to everyone within 300 feet of the edge of the district. Citizens wanted any CUP notices to be sent from the edge of the district, which was possible. However, staff preferred to make that part of the City’s procedures and practices rather than have it written into the ordinance. Staff would automatically send notices to neighborhood associations or residents’ associations such as Midtown or any residents’ associations around the Charleston Center. Anytime a new office use were applied for in a ground floor space, the noticing requirement would be triggered, and the CUP hearing would occur in front of the Planning Manager of the Planning Division. It was a decision that could be appealed to the PTC and the Council. Essentially, it was the same CUP process currently in place, except noticing would be slightly different and there would be the third finding for further control and evaluation. Ms. Packer said the explanation of the process helped the PTC realize it could live without the definition of neighborhood-serving for the next year and a half. CUP applications could help in having a good definition in the Zoning Ordinance. Council Member Wheeler asked whether anyone had gone through the exception process in the Downtown with a use for five years. Ms. Grote believed there was one, which was the former Manpower offices. Council Member Wheeler asked whether it reverted to a conforming use. Ms. Grote said she would need to check on the current use, but she believed it was still nonconforming. Council Member Wheeler clarified it might have been there in excess of five years. Ms. Grote said that was correct. Council Member Wheeler said it indicated that the City’s enforcement powers were not being exercised. Ms. Grote said the City needed to investigate it. Council Member Kleinberg asked how long it would take for a CUP plus appeal process to run following the six-month vacancy trigger.
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Ms. Grote said it generally took about two and a half to three months for a CUP decision, which included the hearing and a 10-day appeal period. If it were appealed, it took 90 days to schedule in front of the PTC. Within 30 days of the PTC’s decision, it needed to go to Council. Overall, it could take about seven months if it were an appealed decision. Council Member Kleinberg clarified the seven months followed the six-month vacancy, which could mean that a property owner could have vacant space for more than year. Ms. Grote said that was correct. Senior Assistant City Attorney Wynne Furth said the ordinance as proposed did not combine the vacancy trigger and a CUP. The ordinance as proposed just had a CUP process. A second alternative to consider was an automatic entitlement to offices if a vacancy standard were met for Midtown, and a third alternative was to combine the two. Council Member Kleinberg said there was a difference in the definition of neighborhood-serving offices between the Charleston Center and Midtown draft ordinances. She asked why the ordinance covering Charleston limited neighborhood-serving offices to 2,500 square feet no matter what that type of neighborhood-serving office was. Section 18.41.037(b)(7) of the Midtown ordinance stated that “Medical offices not exceeding 2,500 square feet in area, professional offices, travel agencies, and insurance agencies...” Those three types of uses could be over 2,500 square feet. She wondered if there was a really important reason behind the difference. Ms. Grote said in the Charleston Center, the office square footage was limited to 7,850 square feet, which was roughly 15 percent of the overall square footage. Staff thought 2,500 square feet for an individual office was a reasonable amount. There was a CUP provision for an individual office to exceed 2,500 square feet as long as the total did not exceed 7,850 square feet. The limit was a way to make office uses proportional to the overall amount of office allowed in the center. In Midtown some of the ground floor spaces were already larger than 2,500 square feet, and so it was not as practical or as reasonable to cut in half some of those spaces that might be 3,500 square feet. It was a size restriction that could be reconsidered. Council Member Kleinberg asked why the medical offices would be limited. Ms. Grote said specifically in Charleston Center there was concern about the larger existing medical offices and whether they were doing lab work or whether they were accepting appointments from
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neighborhood residents or other residents. There was a concern that some of the existing medical related uses were becoming too large. Council Member Kleinberg asked what the impact would be if CUPs for all neighborhood-serving offices in the Midtown area, except for those that were existing, were limited to 2,500 square feet. Ms. Grote said there would be some physical spaces that would be divided differently from the way they were currently. Spaces would be smaller. Council Member Kleinberg asked whether there was a process to handle that. Ms. Grote said it would be the issuance of a building permit. Building owners needed to be aware of the square footage limit for certain types of office use, and the remainder of their space would need to be in a different type of allowed retail or other ground floor use. Council Member Kleinberg was concerned about a professional office taking up 5,000 or 6,000 square feet and asked how the variety of neighborhood-serving offices could be controlled. Ms. Grote said a size limit could contribute to that control. Council Member Kleinberg asked whether staff had considered mixed uses where there was some type of housing built into the new construction. Ms. Grote said the existing CN zone specifically prohibited housing in both Midtown and Charleston. If Council wanted to include housing as a permitted use on the second floor or above-ground level, it would need to come back as a follow-up action because staff did not notice the public hearing or previous public hearings around that type of ordinance change. Mayor Eakins asked, in regard to controlling types of uses, whether that was part of what the third finding was about. Ms. Grote said in large part that was what the third finding was about; It did not attach a size limit to it. Mayor Eakins clarified the size limit was in the other conditions. Ms. Grote said the size limit currently applied to medical office use only. It did not apply to professional office or the small number of general business offices that were allowed. Mayor Eakins clarified the third finding was about controlling the mix and nature so as not to have too many of any one thing.
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Ms. Grote said that was correct. Mayor Eakins declared the Public Hearing open. Annette Ashton, 2747 Bryant Street, Chairperson of the Midtown Residents’ Association (MRA), said the MRA supported the extension of the interim ordinance until March 2, 2003, with some options. The MRA urged Council to remove CUP Item No. 7, which would remove all offices from the Shopping District. It would be in sync with Council direction. If not, it was imperative to include the original definition for a neighborhood-serving use, found in Midtown Attachment B of CMR:203:01, Exhibit A, Paragraph D, as the third CUP finding. The MRA wanted all offices to be limited to 2,500 square feet. She urged Council to save retail shopping. Karen White, 146 Walter Hays Drive, thanked Council for the interim ordinance to preserve and encourage neighborhood retail. The Comprehensive Plan incorporated myriad policies aimed at strengthening and enhancing neighborhoods and their shopping opportunities. Policy B-1 advocated the use of zoning to ensure that business change was compatible with the needs of Palo Alto neighborhoods. Policy B-6 ensured that the City would maintain distinct neighborhood shopping areas that were attractive, accessible, and convenient to nearby residents. CN districts, including Midtown, were designated shopping centers or a cluster of street front stores that served the immediate neighborhood. Typical uses included supermarkets, bakeries, drugstores, variety stores, barbershops, restaurants, and hardware stores. It was the strong remaining retail tenant mix that created vitality at Midtown. Conversion of retail space to offices through CUP exception or development agreement as a special favor would undermine Midtown’s retail mask and violate the intent of the Comprehensive Plan and the interests of Palo Altans. She asked whether it was the City’s task to shield risk takers from poor investment choices or from transitory dips that were part of broad economic cycles. She urged Council to uphold the City’s land use constitution by extending interim zoning protections first approved on January 16, 2001. In doing so, Council would preserve and enhance the CN districts as the pedestrian friendly retail districts they were intended to be. Mark Heyer, 726 Marion Avenue, member of a steering committee of the MRA, said retail was not dead in the Midtown Shopping District. Midtown was a neighborhood center on the rise. The Co-op was never a strong anchor tenant, and with its passing, there was a golden opportunity to continue the revitalization of Midtown. Strong anchor locations for retail needed to be preserved. The MRA’s vision of the future was that Midtown would be a vital, prosperous retail corridor accessible by bike or foot and providing the right products at the right price. MRA asked the property owners and Council to join the residents in creating a vision of Midtown to
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attract the type of retailers who would provide a win-win situation for everyone concerned. For example, Trader Joe’s would be a wonderful anchor tenant. He urged Council to give the residents the tools to protect the retail spaces, and residents would enthusiastically work with the property owners to continue the progress to build Midtown into a thriving and profitable retail center. Ron Wolf, 745 San Carlos Court, said it was clear that retail was successful in Midtown. The MRA endorsed the CUP process because after speaking with property owners, retail owners, and everyone else involved, MRA realized there needed to be flexibility, the ability to make decisions, and the ability to adapt as changed came about. Notification was important so the neighbors continued to be involved in the decisions. There was also a vision of a full retail shopping area, including not only the Middlefield frontages but also the frontages on the parking lot. MRA hoped that through the CUP process, those ideas could be pushed forward over the time the interim ordinance was in place. The CUP process simplified the ordinance, which was important. He urged Council to adopt the ordinance, with the few modifications that MRA suggested. Sylvia Gartner, member of the MRA, 824 Moreno Avenue, supported the extension of the interim ordinance protecting ground floor retail in Midtown. She was concerned about the increasing loss of retail. If she could not go inside and eat it or put it in a paper bag and carry it out, it was not retail. D. John Miller, President of DJM Capital Partners, 333 West Santa Clara Street #610, San Jose, said DJM acquired the 2700 Middlefield Road building in June 1999, which was previously vacant for about three years and had a 50 percent vacancy. DJM made all the appropriate applications to the City to do a complete renovation. The property was one of the major eyesores in Midtown. DJM had the property on the market for lease for approximately six months without any activity, with the exception of office use by Feshback Bros., which raised concern in the Midtown neighborhood. Feshback Bros. was a local firm that had been in Palo Alto for over 30 years. Feshback Bros. relocated to Midtown because it wanted to be in an attractive neighborhood environment. Council’s decision to modify the ordinance did not seem to be appropriate considering there was nothing wrong with the existing ordinance. Adopting the ordinance February 20, 2001, affected property owners who just expended a tremendous amount of time and energy in renovating and eliminating a major eyesore in Midtown. Exhibit A of the ordinance stated that the City was experiencing an unprecedented sustained demand for office space. The office space available in the Midtown market was approximately 121,000 square feet. The staff report (CMR:203:01) stated the three main converted uses from retail to office were Harmony Bakery, the space that was currently occupied by Feshback Bros., and the former video store. The total was
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approximately 8,900 square feet or 7.5 percent. The property owners were not trying to eliminate retail from the market. They supported revitalization of the Midtown area. He urged Council not to support the ordinance. John K. Abraham, 736 Ellsworth Place, said the CUP process would not adequately prevent Feshback Bros. from moving in under the proposed ordinance. Council constructed a memorandum dated March 15, 2001, which discussed in detail a more aggressive stance that he supported. He hoped that Council would adopt the ordinance. Myllicent Hamilton, 4014 Ben Lomond Drive, was concerned about a trend seen at the Charleston Center. Spaces that were neighborhood-serving had been moved out. The spaces north of Piazza’s, with the exception of Café Sophia Roasting Company, had much less traffic than the previous businesses. Stevenson House, which was across the street, had many senior residents who did not have cars. There currently was no bank, post office, or pharmacy. The Charleston Center should be neighborhood-serving retail because it was a small plaza. Just one office made a big difference. Louise Herring, 3945 Nelson Drive, urged Council to keep ground floor neighborhood-serving stores and services at Charleston Center. The CAR Center and the Achieve Center had programs aimed at helping clients learn independent living skills. As part of the programs, a counselor accompanied five or six learners to the Charleston Center. There were many public and private schools in the neighborhood as well. After school, many students ended up at the Charleston Center. The sharing of the streets by adult and student pedestrians was a plus as a safety for the children. Furthermore, doctors urged patients to walk more for good health, and a neighborhood shopping center served as an alluring destination. During discussions leading to the development of the Comprehensive Plan, Charleston Center was frequently pictured. Those who lived in the Greenmeadow neighborhood and used the Charleston Center knew that there were many good services, but a drugstore and a bank were lost. There would be much to lose if any business offices replaced the remaining local neighborhood-serving stores. Deborah Webb, 2579 Greer Road, said the MRA supported the interim ordinance to be extended to March 2003. The MRA and the neighbors in the area believed the largest threat to retail services was the demand for commercial offices, which would cause a corresponding increase in jobs and another jobs/housing imbalance. Midtown needed more retail, not offices. David Bubenik, 420 Homer Avenue, was glad that Council skeptically greeted propositions throughout the City to convert to office use. He hoped Council would adopt the ordinances.
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Debbie Mytels, 2824 Louis Road, supported the MRA’s suggestion for Council to support an extension. There needed to be a CUP process, a third finding that the proposed use be a neighborhood-serving one, and a 2,500 square foot limit on office space. She wanted to underscore the problem about the erosion of the public trust. That was one reason why a CUP process was very important. She heard more from the community about not trusting the City Council and staff. Staff decisions were being made with no public input in some cases. There needed to be openness in the public process with clear definitions, even if it took more time, and time took more money. It was not appropriate when it was perceived by someone in the community that staff and Council Members were open to personal appeals from business owners who might have made bad business decisions. Lynn Chiapella, 631 Colorado Avenue, presented a copy of the CN regulations, which were the foundation for the establishment of all CN districts. She agreed that retail was not dead. It was the zoning that had created part of the problem. In 1978 the complete basis for the Midtown Shopping District was thrown out, and a new set of rules, which brought in offices up to 7,000 square feet, was established. Someone needed to review the simple two pages of CN regulations for the Zoning Ordinance update. She was concerned about 16,000 square feet of office that Council intended to grandfather in for the benefit of three property owners. Parking was deficient by 58 to 62 spaces for their long-term parking. It discriminated against two property owners who owned less than 2,500 square feet of office and who had been there longer than at least one of the property owners. She asked that Council not grandfather office space and that the offices be limited to 2,500 square feet. Property owners were not affected. The CUP was available. She supported the interim ordinance. Jean Fisher, 3861 Corina Way, owned 715, 711, and 719 Colorado for many years and had lived in Palo Alto for 62 years. She welcomed Midtown residents to put money in Midtown. It was a nice small neighborhood shopping center with a few businesses. Businesses brought in many customers that usually planned to stay 10 to 15 years. With a five year limit, businesses did not like to upgrade and settle in, which made leasing extremely difficult. She did not like the CUP process in a Palo Alto and the idea to add more to it. Stephanie Muñoz, 101 Alma Street, Apt. 701, said Council should speak with all the businesses in the City. Businesses were not there as just a convenience or an enhancement to the quality of the neighborhood. The business owner was there to make a living. An arrangement that demanded a place be vacant for six months was not reasonable. There was one owner at the Charleston Center, and therefore, Council could apply what it applied with Landmark Theaters. If owners made it on many well-paying businesses, they could afford to subsidize a bakery, a used bookstore, a childcare
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center, or a nonprofit. Stanford Shopping Center charged the back stores less because the stores were a neighborhood convenience. Council should not impose another restriction until Council lifted the ban on residential. There should be an understanding that the ban on residential at Midtown was meant to be a ban on residential in the surrounding shopping center. Before Council put anymore bans on the ground floor, she asked Council to allow mixed use of retail and housing. Lin Miller, 2530 South Court, grew up in Palo Alto, lived in Midtown, and spent the past 20 years in the real estate business. There were traffic problems. Crossing the intersection of Middlefield and Colorado was frightening. Buildings there were old and would not work for retail. Mixed uses seemed to be the alternative. He served on a committee three to five years prior that reviewed what Midtown could be like, and it was an interesting process. However, he realized it would never happen because there was not the political will from the City Council, and there was no incentive for the property owners to redevelop. His neighbor, Mark Kousnetz, owned a building in Midtown that was difficult for retail because of the way it was shaped and formatted. Mr. Kousnetz was paying the price of many years of inattention from the Council and the people of Midtown. Someone earlier had mentioned Trader Joe’s, but it would generate too much traffic. Roxy Rapp, P.O. Box 1672, 375 University Avenue, spoke on behalf of Tom Foy of Midtown Realty, who was a longtime property owner in Midtown. Mr. Foy finished a remodel job the previous year and asked the Council to extend his permit for an office use for Midtown Realty another 10 to 15 years. Mr. Foy was due to retire in the next couple of years and wanted to be able to sell his business. The property faced Colorado and did not make a good retail location as it faced out into the parking lot. Mr. Foy asked the boundary be redrawn to the back of Starbuck’s. For successful retail in any neighborhood shopping area, a 60- to 80-foot depth should be the maximum. He asked the boundary be redrawn and cautioned Council that in retail, parking was the key. The parking report showed that in the early morning, it was 74 percent full, and by 4:30 p.m., it was 96 percent full. The City needed to add more parking to the area to make it more viable. Mark Kousnetz, 2475 South Court, was the new owner of the former Harmony Bakery building at 2750 Middlefield Road. Originally built in 1974 for Northern California Savings & Loan, the building in 1985 also housed Fox & Carskadon. For 20 of its 27 years, the building had been an office. It was not designed or intended for retail use. He proposed a 10- to 15-year amortized exemption period. During that time, he would design a retail-oriented project that would fulfill the City’s vision and contribute to Midtown’s retail vitality. It would feature a pedestrian-scaled, retail-oriented first floor, with a second floor office component. The
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building storefront, parking, and street orientation would reflect the need of the retailer and its pedestrian-based customers. Council’s decision should reflect the way the building was originally designed. He committed to the building November 15, 2000, prior to the urgency ordinance of January 16, 2001. Therefore, he asked that Council allow him to lease to users based on the previous ordinance. Herb Borock, P.O. Box 632, said the definition of neighborhood-serving should be kept in the ordinance. He did not believe staff told the PTC of the legislative history. Originally, staff proposed a definition with two sentences, and only one of the sentences needed to be satisfied. He proposed, and the Council agreed, to require both sentences by adding the word “also” to the second sentence. Twenty years prior, when a major revision to the Comprehensive Plan was happening, the former planning director provided commissioners with the definitions of policy and program and pointed out that implementation of policies was normally not in the Comprehensive Plan. There should not be a reference to the Comprehensive Plan. Instead, an ordinance should be created that implemented the Plan. The existing office uses on Colorado should be included in the ground floor retail only use. The normal way was to amortize existing office uses out based upon a certain minimum time, year of construction, and type of construction. The number of employees should not define the retail market in a neighborhood center because it was by definition for neighborhood residents. There were areas with retail that served workers, such as Downtown and California Avenue. When retail served workers, it drove out the neighborhood-serving retail. A five percent vacancy rate was a normal vacancy rate in a normal commercial market, and so it should not be a trigger. Regarding the future, mixed use was mentioned. The CN zone had a 0.4 floor area ratio (FAR) for commercial and 0.5 FAR for residential, except at the Charleston and Midtown Centers where there was only 0.4 FAR for commercial. There were too many areas zoned commercial to keep it retail in the long run. One parking lot block could be for retail and the other block for residential at a comparable FAR. Yoriko Kishimoto, 251 Embarcadero Road, president of University South, supported the neighbors at Midtown and Charleston. She thanked Council for taking strong action to preserve ground floor neighborhood-serving retail. It was a critical part of preserving walkable neighborhoods. The South of Forest Area (SOFA) II process had been dragging on for a while, and it was partially due to a struggle within the group of whether neighborhood-serving retail and services should be required in the neighborhood. Most neighborhood-serving uses moved out of Downtown because of high rents, and SOFA was the last place left. During the long working group process, many of the small retail and neighborhood-serving services had been converted rapidly to offices. Council’s strong action would give the working group courage to preserve and restore
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neighborhood-serving retail and services to the SOFA neighborhoods. Regarding the 6- to 12-month vacancy rate, there was a major difference between office and retail rents. A property owner would probably wait to lease at $6 per square foot for office use rather than $3 per square foot for retail. A substantial buffer was necessary. Bob Moss, 4010 Orme, said in the years that there had been ground floor retail in Downtown, there was one occasion when a five percent vacancy was exceeded for a six-month period. The reason was that there was a number of buildings being renovated at the same time and were not available for rent. Palo Alto had the second highest office rents. Sand Hill Road was higher. Palo Alto’s office rents were higher than downtown Manhattan and downtown Tokyo. Vacancy rates would not be a burden for property owners. He did not think the City should guess what was going to be neighborhood-serving in five years. The City should go with the CUP process and take it on a case-by-case basis. The 5,000-square-foot limit in CN zones for offices was designed for El Camino at a time when the vacancy rate was over 40 percent. That condition did not currently exist, and so 2,500 square feet was adequate. An example of a business willing to sign a lease for only five years was Fry’s, which was located on a site that would be amortized and become residential. He asked Council to adopt the staff recommendation. Pria Graves, 2130 Yale Street, member of the College Terrace Residents’ Association, supported the neighbors of Midtown and Charleston. Her neighborhood was also concerned about loss of retail. She was in support of the mixed use as a long-range goal, but it should not be included with the current need to protect retail. She was also concerned about the vacancy as a trigger. Retail rents were at $3 to $4 per square foot and office rents were at over $10 per square foot. There was a huge incentive to allow property to remain empty in anticipation of higher rent for office space. The CUP process was the right approach. Mayor Eakins declared the Public Hearing closed. She suggested that the Council consider Charleston and Midtown separately. MOTION: Council Member Beecham moved, seconded by Mossar, to approve the staff recommendation to modify and extend the interim regulations for Charleston Center by adopting the ordinance attached as Attachment A of CMR:203:01. Ordinance 4689 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 by Amending and Extending Ordinance No. 4684
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adding section 18.41.035 to the Palo Alto Municipal Code to Take Effect Immediately” Council Member Lytle contacted Jeffrey Booth, the retail development director of the Urban Land Institute (ULI), which was a nonprofit research and education organization that set development standards of excellence in development practice and planning. ULI had 16,000 members in 60 countries and represented a broad spectrum of land use and development disciplines, including builders, developers, property owners, investors, architects, planners, public officials, real estate brokers, appraisers, attorneys, and financers. There were five things cities had to do to create successful pedestrian retail or a memorable shopping and entertainment experience where people would return, spend, and gather. 1) There needed to be critical retail mass or the amount and placement of retail space required to create a retail heart. The core was street level and had to present an impression of retail abundance. It had to be laid out to preserve the important view to the next shopping experience. Interrupting the retail heart with intermittent office destroyed the line of sight. 2) Office space should not be allowed anywhere in the heart. There had not been the exercise of defining where the retail heart of Midtown or Charleston was. She did not believe there was such a thing as a neighborhood-serving office. No matter how noble the office use was, how large or small the office was, or whether it was for profit or nonprofit, office use could not be allowed. 3) There had to be a strong retail tenant mix. The uses that were redundant were a problem for the retail centers. 4) There had to be great parking, calm traffic, and wonderful pedestrian strolling. 5) There had to be a unique brand of marketing and a campaign for the area that would make it stand out and be special. She believed there was work to do in the retail areas. The proper job of defining where the retail heart was for Midtown and Charleston Center was not done. There might be some outskirt office use. Office usually worked behind, on the fringe of, and above the retail heart. If the exercise of defining the retail core was not done and the ordinances passed, she hoped staff would take time and invite some local experts to do so. The boundary needed to be drawn because issuing a use permit in the middle of core would take away the viability. Putting office around, above, and at the fringes of the retail heart, as Mr. Rapp was starting to draw, was appropriate. Defining the retail heart or core needed to happen before granting any use permits or exceptions for office use in those areas. Council Member Wheeler said Charleston Center was her neighborhood center. She observed the changes that had taken place there. Some changes were wonderful, such as the supermarket, but much of the center had become semi-dysfunctional. The proposed ordinance was a band-aid or an attempt to hold the line while the ultimate solution and larger questions and visions were realized in the Zoning Ordinance. Regarding the “imperfect” definition of neighborhood-
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serving, she questioned staff’s recommendation, which worked on perfecting the language. However, she suggested keeping the neighborhood-serving definition so that it could be tested to find out what the imperfections of the language were. Ms. Furth asked whether the intention was to use the definition of neighborhood-serving use both in the CUP finding for an office of more than 2,500 square feet and in the finding that an office was a neighborhood-serving office.
Council Member Wheeler said yes. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND THE SECONDER that the third finding for the Conditional Use Permit (CUP) process be replaced with the definition of “neighborhood-serving use” from Ordinance No. 4684. That definition is: a neighborhood-serving use primarily serves individual consumers and households, not businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, rather than the provider of the goods or services traveling off-site. Council Member Burch lived in the Charleston area and recalled that there were a small hardware store and a small drugstore that did not make it. A market was happening. Palo Alto citizens had to take responsibility for the impact on the concept of neighborhood retail when they no longer went to a neighborhood store but instead went to Home Depot, Costco, and Wal-Mart. It was not just Council’s changing the law. Citizens had to make it work too if there were to be neighborhood-serving stores. He supported the amended motion.
Vice Mayor Ojakian was one of the Council Members who voted against the definition of neighborhood-serving use because that particular definition and topic deserved a wider community discussion. He was concerned that with the incorporation into the motion for a particular area like Charleston, people might ask why it was not being used for another area. He hoped that the discussion would be incorporated into the Zoning Ordinance update so that it would be fully discussed. His preference all along was to vote for the ordinance on the Charleston Center. However, with the incorporation, he would not support the motion.
Council Member Wheeler understood Vice Mayor Ojakian’s dilemma, but said the Charleston and Midtown Centers had another uniqueness about them, which was the prohibition on housing. There was a history and a reason for the prohibition. Others had not asked
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about prohibition on housing for their neighborhoods. Also, neighbors of the Charleston and Midtown Centers had not asked why they were the only ones with the housing ban nor did they try to change it. The City tended to look at neighborhood shopping centers from the beginning within their own unique context within their own neighborhoods. The ordinance was clearly an interim ordinance and only applied to the two centers. It was not setting a precedent for any of the other shopping areas in the City. The other areas would be addressed in a different fashion. She did not share the concern that others would be rushing in and asking for the definition of neighborhood-serving in the other centers. It was a very unique and unprecedented situation.
Mayor Eakins preferred the Comprehensive Plan definition. There was no need to worry about absolute perfection when moving in the right direction. She was satisfied with using the staff recommendation especially because of the third CUP finding which allowed flexibility for the problem buildings. She understood Council Member Lytle’s remarks, but she supported the motion with the incorporation. She clarified the urgency ordinance only required five votes to pass. Ms. Furth stated a 4/5’s vote was required to extend the interim ordinance. MOTION PASSED 7-1, Lytle “no,” Fazzino absent. MOTION: Council Member Kleinberg moved, seconded by Beecham, to approve the staff recommendation to modify and extend the interim regulations for the Midtown Shopping District by adopting the ordinance set forth as Attachment B of CMR:203:01 with the following changes: 1) modify Section 18.41.037(b)(7) to limit all offices, not just medical offices, to a total floor area of 2,500 square feet; 2) modify the prohibited uses list in Section 18.41.037(c)(1) to read “Residential uses of any nature on the ground floor”; and 3) replace the third finding of the Conditional Use Permit (CUP) process with the definition of neighborhood-serving use contained in Ordinance No. 4685 which is: a neighborhood-serving use primarily serves individual consumers and households, not businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, rather than the provider of the goods or services traveling off-site. Ordinance 4690 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,
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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 65858 by Amending and Extending Ordinance No. 4685 adding section 18.41.037 to the Palo Alto Municipal Code to Take Effect Immediately” Council Member Kleinberg agreed with all the comments her colleagues made in support of the importance of vitality of the neighborhood centers. The CUP process would clarify what she believed was a vagueness in the law, which could allow a very large office to come in and make a case for enhancing the vitality of the center. She was concerned about overwhelming the center with one dominating use. She believed it made it stronger, clearer, and more certain that there was variety built into the CUP process. With respect to the residential uses, the City was in need of more transient-oriented development housing. Being explicit about prohibiting residential uses on the ground floor did express, in its own way, the City’s desire to encourage developers of ground floor retail to incorporate mixed uses and housing above if possible. The City wanted to see more people living in the Midtown area and supporting the needed ground floor retail. Council Member Beecham said the motion was a major step in preserving ground floor retail in the area. However, it did not address the key issues of parking and circulation, which were areas that were longtime problems and remained to be solved. The City made efforts four or five years before to work on them, but conditions improved and property owners felt they no longer had to work on those areas. He encouraged staff, his colleagues, and citizens to begin the process again of working on circulation and parking in the near future. That in the long run along with the proposed ordinance would help preserve retail in the area. He supported the motion. Council Member Mossar said the goal of protecting retail in neighborhood centers was important. She believed the pedestrian combining district was important. The item was very complex, and she did not believe there was an understanding of what would be achieved by passing the ordinance. The economic impacts were not understood, and the problem was not defined. The City panicked and led with a solution, but leading with solutions was a bad way to get what was wanted. The CUP process was a technique that had value and flexibility, and it gave the community a chance to provide input on changes. The process raised many questions but did not answer them. She would not be able to participate on citywide retail protection because Stanford University had retail, and she had a conflict with Stanford. She was very comfortable, however, with the concept at Midtown and was attracted to the simplicity. She encouraged her colleagues to replace the proposed ordinance with something more simple and straightforward. There was much work
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to do as a community to change the Zoning Ordinance and to define what it wanted Midtown to be. The proposed ordinance would create unintended consequences, and the City would struggle with it to make it work or make it fit. She did not see that as a positive outcome and would not support the motion. Council Member Lytle agreed with Council Member Mossar. The ordinance envisioned in the colleague memo of March 2001 had more protection for retail in Midtown than the proposed ordinance. Council gave original direction to define the problem and put into place a holding pattern so that a more intricate study could be done, hopefully with experts to assist on how the City could hang onto the neighborhood retail districts. That expert knowledge could be applied to the zoning map with mixed use regulations that would include housing above retail at the centers, which were defined in the workshops as needing additional density. Experts could also help the City define things that could not be done in zoning that needed to be done, which were the traffic circulation and parking issues and the branding and marketing. The three things that could be done in the proposed ordinance, however, were creating critical retail mass, defining the heart and core, and keeping office out of the retail experience. With the interim set of regulations, the City confused itself and the community that it was possible to apply rules evenly to all properties throughout the areas as a matter of equity. That simply was not the case, and the City knew that before the ULI experts came to that conclusion when it adopted the ground floor district in Downtown. Citizens, not experts, defined the boundaries of that retail heart and core. Despite market forces that said the City had to have financial institutions in the Downtown or the City would go bankrupt, the City took the brave move of putting in place what made Downtown Palo Alto the model that ULI referred to when it applied its standards in other cities. She did not support the motion. Council Member Burch said the property owners had a responsibility to think about not only what the best, most profitable use was but also what the best use was for the well being of the whole shopping center. The viable retail element needed to be there. He heard for a long time discussion about business licenses, and he asked the City Manager the status of business licenses. The item was proceeding forward, and he hoped that it could be in place as quickly as possible without any delay. He did not want another drugstore at Midtown, but he was not sure if Council could control that. He supported the motion. Council Member Wheeler said the City had not done anything to change the permissible FAR on the Midtown property. The City had not done anything to change what Council Member Beecham had correctly identified as a very poor traffic circulation pattern and parking situation. Much of the parking woes of the Midtown area had been exacerbated by the change in uses. People were parking all day
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for some of the changed uses in a center that had inadequate parking for the uses. Putting in any significant amount of housing or perhaps insignificant amount of housing would exacerbate the issue of long-term parking. On the whole, it was something that the City needed to do for the shopping area, and she would support the motion. Council Member Beecham recommended changing the ordinance from an urgency ordinance to a non-urgency ordinance, which meant it would need to come back for a second reading and become effective thirty days later. Council Member Lytle raised an important question of how much thought was given to a project. Either the City rushed through something, did not think about it, and got there too soon or the Palo Alto process took years to get something done. It was clear that the ordinance was interim and would last a few years, but he feared that it would be painful to some of the owners and might not bring some benefits that otherwise would have been achieved. The ordinance would enhance the good of the community at not a substantial risk. As one of the authors of the March 19, 2001, memo on ground floor retail preservation ordinance, he believed those concepts were not as comprehensive as what was being discussed that evening regarding enhancing and preserving retail in Midtown and Charleston. He hoped good conversations would come up on that memo later on. It would be great to control what went into the Co-op, but the City bureaucrats were not the right people to do that. The art and science of operating a mall was an art. Regarding the Co-op change, it was time for the City to work with the owners of the area to fix the circulation and the parking. Those problems were long-term and needed to be addressed. Vice Mayor Ojakian understood that the emphasis was to have an area that had retail. He understood Council Member Lytle’s comments, but finance people were sometimes skeptical about different economic theories. Even without an extensive study, the desire was to end up with retail. He supported the pedestrian zone piece of the ordinance, which was important. He supported the CUP and believed that the properties considered to be exempt were important. He agreed with Council Member Beecham that the main issues in Midtown were parking and circulation which was not addressed. They were fundamental issues that needed to be addressed, and then the City could go a long way toward improving the vitality of the area. The ordinance would be in place for about a year and a half. In that period of time and when the City did the Zoning Ordinance update, there would be a good opportunity to discuss all types of theory. Council Member Kleinberg said Council represented the neighbors and their interests and desires. There needed to be a balance with the property owners’ needs, which were also important, and their rights. Council needed to get a proper mix in that area. What Council was doing was almost as important to think about as what Council was not doing. Council was not passing a zoning update.
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Council was not passing the perfect answer to all of the problems of the City’s boom. Council was trying to stem the flow of retail from an important neighborhood area and keep the vitality in that area from disappearing. She was asking her colleagues again to consider a very short-term interim ordinance to help the neighborhood. Council Member Mossar would change her vote and support the motion. It did not matter to her whether or not the ordinance was an urgency ordinance. She stood by her earlier comments and believed the City would have regrets in the next year and a half to two years. Council Member Lytle did not see the point of having the ordinance return for a second reading. When the next set of regulations came forward, she asked Council to keep an open mind as to how protective the ordinance might be in the interim. She believed it might offer greater protection in the long run. Mayor Eakins asked for a vote on the main motion and then discuss a separate motion. MOTION PASSED 7-1, Lytle “no,” Fazzino absent. MOTION: Council Member Beecham moved, seconded by Burch, to add a condition to the approved urgency ordinance to allow an arrangement with the owner of the Harmony building to have office uses for ten years. After that the building must be demolished and rebuilt for retail uses. Council Member Wheeler said Council had just set a CUP process in place by which Mr. Kousnetz could apply to have a non-retail use in the building. The CUP process was by far the most even-handed way to approach the situation. Midtown Realty had been in business in that location for at least 35 or 40 years. There were equally compelling reasons to accept them, but she believed it would be the beginning of the unraveling of the ordinance that was just passed. She opposed the motion. Council Member Kleinberg said it was one of the tougher issues she had to face. She spoke at length with Mr. Kousnetz about his property and visited the property. She spoke with neighbors, the Planning Department, and the Economic Resource Planner about it. She was sympathetic to a property owner who was facing potential financial hardship based on what Council had just done. However, for the exact same reasons Council Member Wheeler just mentioned, she felt there was a fair and equitable process available to Mr. Kousnetz. She hoped it would not be a lengthy process. In addition, a well-priced retail rental rate was also available to Mr. Kousnetz. The City was trying to fashion something that would enhance the neighborhood, and Mr. Kousnetz had the opportunity to
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be that keystone and to be the signature corner in Midtown. She did not want to make specific exclusions for one major corner. It was bad planning. Reluctantly, she would not support the motion. Vice Mayor Ojakian said the building was built as a bank building. In some ways, that would be a beneficial use to the people who lived in the neighborhood. It was unfortunate to become caught up in some definitional questions about exactly what was or was not serving the people in the area and how that related to retail versus some of the other uses. He supported the motion. Council Member Beecham said Midtown Realty had existed in Midtown for 35 to 40 years, which was exactly what he wanted to avoid with the motion.
Mayor Eakins agreed that it was difficult to decide. There were those who thought the building on the corner absolutely had to be retail to protect vitality. However, it was not a retail building. She agreed with Council Member Wheeler that the CUP process should be used. There was also the possibility of having a retail tenant there. She would not support the motion.
MOTION FAILED 3-5, Beecham, Burch, Ojakian “yes,” Fazzino absent. Mayor Eakins announced that Closed Session Item No. 14 was removed at the request of staff. ORAL COMMUNICATIONS Gary Wesley, 707 Continental Circle, Mountain View, spoke regarding fluoridation of water. David Bubenik, 420 Homer Avenue, spoke regarding SOFA process. Lynn Chiapella, 631 Colorado Avenue, spoke regarding business licenses and parking spaces. Randy Adams, 2649 Alma Street, spoke regarding the arts feasibility study. Herb Borock, P.O. Box 632, spoke regarding unintended consequences. Stephanie Muñoz, 101 Alma Street, Apt. 701, spoke regarding housing/mixed uses. Deborah Webb, 2579 Greer Road, spoke regarding the traffic and circulation at Midtown. Yoriko Kishimoto, 251 Embarcadero Road, spoke regarding Embarcadero Road traffic calming or residential arterial traffic calming.
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APPROVAL OF MINUTES MOTION: Council Member Beecham moved, seconded by Ojakian, to approve the Minutes of March 12 and 19, 2001, as submitted. MOTION PASSED 8-0, Fazzino absent. CONSENT CALENDAR Council Member Mossar stated she would not participate in Item No. 4 due to a conflict of interest because her husband worked for Stanford University. Council Member Kleinberg stated she would not participate in Item No. 4 due to a potential conflict of interest because of her husband’s involvement in Stanford law matters. Mayor Eakins announced that due to the number of speaker cards for Item No. 7, it would be removed from the Consent Calendar to become Item No. 12A. MOTION: Council Member Beecham moved, seconded by Ojakian, to approve Consent Calendar Item Nos. 3-6 and 8-12. LEGISLATIVE 3. Resolution 8047 entitled “Resolution of the Council of the City of Palo Alto Adopting a Disadvantaged Business Enterprise (DBE) Program for Federally Funded City Transportation Projects” 4. Ordinance 4691 entitled “Ordinance of the Council of the City of Palo Alto Approving the First Amendment to the Development Agreement Between the Board of Trustees of the Leland Stanford Junior University and the City of Palo Alto Dated August 14, 1997” (1st Reading 4/09/01, Passed 6-1, Kleinberg, Mossar “not participating”) 5. Ordinance 4692 entitled “Ordinance of the Council of the City of Palo Alto Amending and Reorganizing Chapter 2.04 of the Palo Alto Municipal Code [Council Organization and Procedure] to establish New City Council Procedures” (1st Reading 4/09/01, Passed 9-0) 6. Finance Committee recommends that the City Council approve the Accelerated Energy Efficiency Program (AEEP) to provide incentives for Palo Alto residents and businesses to deploy targeted, cost-effective energy conservation measures before June 30, 2001, and approve a Budget Amendment Ordinance providing an appropriation in the amount of 3.5 million from
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the Electric Fund Supply Rate Stabilization Reserve to the Electric Fund Public Benefit Program operating budget. Ordinance 4693 entitled “Ordinance of the Council of the City of Palo Alto Amending the Budget for the Fiscal Year 2000-01 to Provide An Additional Appropriation of $3.5 Million from the Electric Fund Supply Rate Stabilization Reserve to the Electric Fund Public Benefit Program Operating Expense” ADMINISTRATIVE 8. Contract Between the City of Palo Alto and Montgomery Watson in the Amount of $370,778 for the Wastewater Collection System Master Plan 9. Contract Between the City of Palo Alto and Carollo Engineers in the Amount of $100,000 for Provision of a Grade-Three Water Treatment Operator 10. Contract Between the City of Palo Alto and Acme Security Systems in the Amount of $86,964 for the Purchase and Installation of a New Video Surveillance System for the City of Palo Alto Municipal Services Yard 11. Contract Between the City of Palo Alto and K.J. Woods Construction, Inc in the Amount of $243,840 for Water/Wastewater Operations Contract Services (IFB #133401) COUNCIL COMMITTEE RECOMMENDATION 12. Finance Committee recommends that the City Council approve the proposed amendment to the Palo Alto Municipal Code and the proposed policy for the use of financial instruments for the purpose of hedging price risk for electricity and natural gas commodity purchases as indicated in the staff report (CMR:111:01) MOTION PASSED 8-0 for Item Nos. 3, 5, 6, and 8-12, Fazzino absent. MOTION PASSED 6-0 for Item No. 4, Kleinberg, Mossar “not participating,” Fazzino absent. 12A. (Old Item No. 7) Finance Committee recommends that the City Council approve the staff recommendations to: (1) authorize the Mayor to execute the contract with Planergy International in the amount of $375,000 for the emergency, short-term rental of 5-Megawatts (MW) of diesel Back up generators and related engineering and installation services; (2) authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Planergy International for related, additional but unforeseen work that may develop 04/23/01 92-31
during the project for an additional amount that will not exceed $30,000; and (3) approve the Budget Amendment Ordinance in the amount of $525,000 from the Electric Supply Rate Stabilization Reserve. Ordinance 4694 entitled “Ordinance of the Council of the City of Palo Alto Amending the Budget for the Fiscal Year 2000-01 to Provide an Additional Appropriation of $375,000 for the Short-Term Rental of Back-Up Generators and Associated Services; and $150,000 for Capital Improvement Project Number 9803” Contract Between the City of Palo Alto and Planergy International in the Amount of $375,000 for Lease of 5-Mega Watt Backup Generator Terry Trumbull, 1011 Lincoln, said on behalf the American Lung Association, he opposed any use or purchase of diesel generators. He referred to a fax from the Bay Area Air Quality Management District (BAAQMD) sent to City Council earlier that day. The third paragraph stated, “It is fair to say that the potential increased cancer risk to the individual from the diesel engine could be comparable to the increased risk of a resident near a major petroleum refinery or chemical plant.” Staff was requesting four diesel generators. In addition, the proposal by staff had no environmental analysis, no environmental impact report, no consideration of environmental effects, and no discussion of alternatives, which would happen normally in the environmental process. The air quality in the area already violated state and federal health standards. He did not see any offsets. There did not seem to be any limit to guaranteed power purchasers. The problem was that many companies who had paid much lower rates for interruptible power were presumably the only ones that would need to purchase diesel generators. It was interesting that the City staff proposed no toxic risk assessment. Cities were exempt from Proposition 65, and so the employees on site would not receive warnings. Employees and residents normally would be entitled to warnings if a private company were doing it. Diesel fuel spewed many toxins, and he noted that the contractor promised to do site mitigation afterward. On behalf of the American Lung Association, he urged the Council either not to purchase the diesel generators or to adopt reasonable protections for the City’s residents and employees. Deborah Webb, 2579 Greer Road, said there were suggestions to use a soybean-based diesel to mitigate the diesel fumes that would be produced by the diesel generators. There was a website (www.biodiesel.org) that discussed soybean-based diesel, which could be up to 80 percent soybean-based and 20 percent petroleum-based. Modifications to ordinary car or bus engines were not necessary. The only requirements was to change the oil filter once per month for the first three months, and that drove the sludge out
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of the engine. She corresponded with BAAQMD, who said it had no infrastructure to support the soybean-based diesel. There was a local West Coast distributor who would ship 55-gallon drums of soybean diesel. An e-mail sent by David Coale, a board member of Bay Area Action and Peninsula Conservation Center Foundation, discussed bio-diesel. Council Member Beecham’s response to Mr. Coale’s e-mail was that City staff had discussions with both bio-diesel suppliers and representatives for the generators, and unfortunately, the City had to modify the equipment. She asked how much it would cost to make the modifications so as not to have to use 100 percent petroleum-based diesel. David Bubenik, 420 Homer Avenue, spoke with the Director of Utilities John Ulrich, who answered all his questions fully and directly. Unfortunately, the answers confirmed his fears. It put the City in the generating business, but the City would not be able to keep all the electricity that it generated. Most of the power would go on the grid, not to Palo Alto. He asked Mr. Ulrich if an analysis had been done, and the answer was no. The City would receive a reduction in the apparent load that the grid saw, but when he asked Mr. Ulrich whether it counted toward points to reducing the load during times of rolling blackouts, the answer was no. Regarding pollution, the rate of capacity was 5.4 megawatts, about 7,000 horsepower, which was equivalent to two large railway locomotives. In summary, the City would spend $500,000 for a system that generated power the City would not be able to keep entirely, that would not necessarily prevent rolling blackouts, and that would generate pollution out in the Baylands. Mark Watson, 464 Tennessee Lane, asked why, if the City were to procure natural gas-fueled generators anyway, there was a rush to spend money on dirty diesel generators. If diesels had to be used, then every effort should be made to use bio-diesel fuel. Caterpillar engines could run on bio-diesel. Kirk Miller from Utilities Department was interested in using bio-diesel in the generators. The Berkeley recycling program ran its trucks with it. He asked about the possibility of using bio-diesel instead of the dirty diesels so that Palo Alto could maintain its reputation as a leader in innovative, environmentally acceptable solutions to those types of challenges. Herb Borock, P.O. Box 632, understood that if the City were to put 5 megawatts of generating capacity as a backup generator, then the City would get all the 5 megawatts on top of what ever else the City had. According to Mr. Bubenik, that was not true. He believed Council should explore that further. Two weeks prior, there was a public forum held where he learned that even if the City had the 5 megawatts the previous summer, the City still would have had blackouts. There was discussion of keeping both the diesel and the natural gas generators, depending on the situation. In any event, he understood that the City’s power lines could not handle the
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power from both of them. The changes to the contract that were approved the previous week related to the private generator using the gas from the landfill. He understood that the Utilities Department had been looking at that generator as another possibility, either using it or becoming the customer, to the General Fund. He wanted to hear more about that on the record. Finally, there was a question of whether the City should be participating in the blackouts. The sequence of events that occurred was that the Independent System Operator (ISO) told Pacific Gas & Electric (PG&E) to cut back power, and then PG&E, through the Northern California Power Agency (NCPA) and down to the municipalities, issued the order to cut back. The reason the City was tied into PG&E was that the City used PG&E’s transmission lines, and the City was supposed to cut back when there was an emergency even though the City owned enough generating capacity. It was a policy question for the Council, not staff, as to whether the City would participate. Stephanie Muñoz, 101 Alma Street, Apt. 701, said she was not a very well informed person on the subject of the pollution of generators. However, Mr. Trumbull was, and Council should take his comments very seriously about the deleterious effects of generators. She recommended the benefits of having photovoltaic generators for City buildings and requiring them in all new development in Palo Alto. Director of Utilities John Ulrich said there were several public meetings on the matter, which was something new and different. Staff wanted to make sure there was public input on the benefits and risks. The whole objective was to provide a means of having emergency power available during the times of rolling blackouts. Staff’s expectation was that the generator would be operated only during the times the ISO ordered rolling blackouts. The alternative was that if the City could provide massive amounts of energy conservation and load management, the City could have a 5 percent load reduction. The City was making extremely good efforts, and all of it was paid for by ratepayers to reduce energy consumption. Having the 5-megawatt generator in place, after the 20 percent load reduction plans, was an additional level of insurance to keep people from having rolling blackouts. For many customers, having the power off for one hour would not be traumatic. However, if it went on day after day, customers might turn on a generator of their own, which was legal. Having a generator in place might keep customers from doing that. It was far better to have a coordinated effort that helped everyone in Palo Alto from having rolling blackouts. He also received a copy of the document that came from Kenneth Lim, the principal engineer of the Air Toxics section, BAAQMD. A couple of things that needed to be cleared up was that was that the diesel generators were licensed for use in California and met the air quality requirements as portable generators, so they had a license that went along with each unit, and they could be moved throughout California and placed in a location. The
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requirements of the BAAQMD were met. The last paragraph stated, “It is my understanding that the City of Palo Alto Utilities intends to lease the diesel-fired backup generators with certified particulate emissions that were even better than the district’s minimum TBACT level of 0.1 glbhp-hr. They intend to register the engines under the State Portable Equipment program which will require that the engines be removed before 12 months pass. The District strongly urges that the City follows the State guidance to limit the use of these engines to emergency backup use under blackout conditions. The District is encouraged that the City intends to pursue cleaner gas-fired generation as a preferred longer solution.” Staff would bring to the Finance Committee and Council a recommendation for the natural gas engines. Staff had done extensive review and believed that it was obtaining the most clean diesel portables available. Staff looked into the bio-diesel, wanted to use it, and was discussing it with the potential supplier and manufacturer. The units were not set up to use bio-diesel. The generators might require modification, which could void the warranty on the equipment. At the same time, staff aggressively pursued approval so that staff could move ahead and install the generators. He had a discussion with Mr. Bubenik, whose conclusion was significantly different from his. Where the electrons flowed out of the generator was immaterial. If the City were not able to receive power from its own hydro-plants, the City could reduce the generation proportionately to the loads that would be reduced. There was no difference between what the City produced and what the City saved. If the City received power, per the contract with Western Area Power Agency (WAPA), the energy would go to another member. The primary reason the City would not be able to get the power was that the City was conforming to and assisting the state with the power shortage. When everything else was exhausted, the generator would be turned on so that customers continued to have electricity. The ISO did not see any difference and saw a load reduction. Regarding photovoltaic, he wanted to be able to install them. They were installed at Palo Alto Hardware and produced 32KW, which was a significant amount of photovoltaic generation. Installing them, however, before the rolling blackouts would be impossible. Another unfortunate part was that the photovoltaics were designed to be fed into the grid, and when the sun went down and power could not be generated, power would have to be obtained from someplace else. Council Member Mossar spoke with Peter Hess of the BAAQMD, who complimented the Utilities Department staff on all the work it had done to end up with the diesel generators. The BAAQMD saw very little diligence. People were willing to rush out and purchase anything. The diesel generators being purchased were licensed to operate and did not require any mitigation or environmental impact study. The diesel generation was a short-term problem resolution. A letter from the American Lung Association indicated that the health risks of one diesel generator in the area were 6 to 10 cases of cancer. The number really was 5 to 10 in a million based on
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exposure 24 hours per day, 7 days per week over a 70-year lifetime. A gas station was equally toxic as a diesel generator, and people lived in the vicinity of the gas station 24 hours per day, 7 days per week. She did not like the idea of generators because there were issues of air quality, public health, and water quality. MOTION: Council Member Mossar moved, seconded by Beecham, to accept staff recommendations as follows: 1. Approve and authorize the Mayor to execute the contract with Planergy International in the amount of $375,000 for the emergency, short-term rental of 5-Megawatts (MW) of diesel back up generators and related engineering and installation services; 2. Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Planergy International for related, additional but unforeseen work that may develop during the project for an additional amount that will not exceed $30,000; and 3. Approve the attached Budget Amendment Ordinance (BAO) in the amount of $525,000 from the Electric Supply Rate Stabilization Reserve. Council Member Beecham said the Utilities Advisory Commission (UAC), the Standing Oversight Committee, and the Finance Committee applauded the aggressiveness of staff to find the appropriate ways to minimize blackouts throughout the City. Council Member Burch clarified that if a company bought a generator as a standby, the company would turn it on and generate electricity that the company would use. Mr. Ulrich said that was correct. Generators were purchased when the law required companies to have them because of the nature of their business, or companies had them to protect their vital equipment. The generators were allowed to be used up to 200 hours per year for that purpose. Council Member Burch clarified if the ISO said to go to stage 3, the City would not turn the generator on at that point. He asked whether the City waited for ISO to call for a 5 percent cutback. Mr. Ulrich said that was correct. Stage 3 was formerly when rolling blackouts started. There was a stage prior to the rolling blackout order. The ISO did not specifically tell the City that it had to do a rolling blackout. The ISO gave an order for a reduction in percentage or in megawatts.
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Council Member Burch asked that, if the City fired up its generators, it meant the City would cut back less as a result of those generators. Mr. Ulrich said yes. If ISO ordered 2.5 percent, and the City was at 200 megawatts, the City would then turn the generators on, and the transmission grid system would see the 2.5 percent reduction. Council Member Burch clarified that in effect, the generators were producing power for Palo Alto. Mr. Ulrich said that was correct. Council Member Burch said that people talked about $500,000 but a good part of that money would be used when the City put in the gas. He saw an item of interconnection equipment for $125,000. He asked if that was a one-time use or whether it would be used when the gas generators were in place. Mr. Ulrich said some of the equipment that would be used for the diesel generator would also be usable for the natural gas generator. There were some things that would not be shared because staff wanted to be able to install the gas generator, have it on, parallel it, and operate it prior to turning off and removing the diesel generator. Council Member Lytle did not like the idea of generators. She spoke with Mr. Ulrich about mass conservation objectives to avoid the blackouts. She liked the idea of photovoltaics. The crisis was an opportunity for the City to search for a way of backing up the City’s power needs with a much more sustainable alternative. She did not expect the idea of generators as a response to the energy crisis and preferred to see the City jump very strongly into conservation alternatives. Council Member Beecham said the City worked strongly on conservation. At theoretical peak load of 200 megawatts, if the City conserved 25 percent, consumption would be at 150 megawatts. If the ISO said the City needed to cut 10 percent, the City would have to cut 15 megawatts. The City was working to conserve. In addition, staff was working on demand-side management, which would achieve part of that 15-megawatt reduction. However, the way the ISO worked, conservation did not count when it came to sharing in the blackout. The City spoke with Assemblyman Joe Simitian, who submitted a bill that would give the City credit if it could show certified conservation. Vice Mayor Ojakian supported the motion. The diesel generator was an acceptable idea given the short-term usage. He saw Mr. Ulrich as a professional who operated under trying circumstances and did a heroic job. It was unfortunate that there were not many people asking Council to pull Item No. 6. The item was the one in which
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the City would ask the ratepayers to pay for a $5 million program to reduce the load. The strategy that staff set out was to have that and other things happen long before having to use the generators occasionally. MOTION PASSED 7-0, Fazzino, Kleinberg absent. COUNCIL MATTERS 13. Council Consideration and Direction on a Resolution of Intent to Dedicate Parkland at the Palo Alto Medical Foundation/South of Forest Area (PAMF/SOFA) Park Site City Attorney Ariel Calonne said the matter was for Council to give staff direction on what would go into a resolution of intent to dedicate parkland. The resolution of intent was preliminary action to show Council’s good faith that at some point in the near future, the land would be dedicated by ordinance. Deborah Webb, 2579 Greer Road, asked why it was a resolution of intent to dedicate a one-acre park. The South of Forest Area (SOFA) process promised a two-acre park. The Comprehensive Plan gave a minimum park size of two acres. She asked why some of the parkland would be used as a parking lot, which was in direct conflict with the City Charter and the Palo Alto Municipal Code (PAMC). David Bubenik, 420 Homer Avenue, was surprised about the 1-acre park. There was 1.4 acres subject to financial consideration. Beyond that, the 0.41 acres was the footprint of the Roth building. If that building were sold, there would be an encumbrance on the parkland for a parking facility for the occupant. Throughout the process, the City promised a provision of 2.0 acres for a park. He did not believe the City could do an intent to dedicate. PAMC Section 22.08 called for dedication of land intended to be park. The intention for the land to be park was well documented. PAMC 22.08 also stated it had to be done without delay. The development agreement provided that the land could be used as a parking lot. He believed that was improper because it was a conflict with the City Charter and the PAMC. In case of a conflict, the PAMC required that the most restrictive provision be applied, which was the dedication of the park. Dedication of the park would go a long way toward restoring the neighborhood’s trust in the City government. The beneficiaries of the SOFA plan were the developers, who did not live and vote in Palo Alto; the City, which bought the Roth building; and finally, the residents. He asked the City to keep its promises, follow its own law, and dedicate 2.0 acres for a park. Steve Reyna, 840 Kipling Street, appreciated the intent to dedicate. He was surprised that the bulk of the land was in an unknown state. The park was at the heart of the various extraordinary benefits of the development agreement. For the
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donation of the park, Summerhill was granted the maximum allowable floor area ratio (FAR). A commercial building was introduced into the SOFA cap after the final draft of the working group. The neighborhood was told that the commercial building was introduced in such a way that made the park a reality, yet the park was not a reality. The park was the only substantial public benefit that was a result of the development agreement. He urged Council to make the two-acre park a priority. Karen Holman, 725 Homer Avenue, said time had come for citizens of Palo Alto to hire attorneys to review all coordinated area plans (CAP), ordinances, and development agreements to see where inconsistencies were between intent and the law. As time went on, more was learned about the inconsistencies. The neighborhood was told that the Summerhill development, with its FARs, was what enabled the park. The neighborhood was additionally told that the office that was added to the SOFA CAP post-working group was what guaranteed the park. The Working Group did not put office in, it was all housing. Sometime later, she learned the bond the City considered floating included funding for the SOFA park. She assumed it was for the design and development of that park. She learned that it was only a one-acre park that was guaranteed, but the promise in the plans was for two-acres of park. It was a disservice to the community. The Palo Alto Medical Foundation (PAMF), pre-working group, had promised four-tenths of an acre to the City. Some of the promises from Summerhill were pass-through from the PAMF. Stephanie Muñoz, 101 Alma, Apt. 701, said three years prior, she asked Council to expropriate the Lee building because it seemed ideal for senior housing. The City waited until the state made preemptive legislation so that it could not be done because the state law required seismic upgrade of a building when there was a change in use. She then suggested the Lee building could be used for office space. That was not satisfactory because the neighbors wanted the whole block for a park. She believed the neighbors deserved a park. They did not get the whole park, which was unreasonable. Yoriko Kishimoto, 251 Embarcadero Road, said there was small print in the development agreement, which was not brought to the public Working Group or the Council at the time. The City Attorney stated “To my knowledge, staff had not prepared a feasible private reuse that you can identify which portion of the 1.4 acres should be reserved for potential resale.” However, in the staff report presented at that time, it said “implementation of the development agreement between the City of Palo Alto and the Palo Alto Medical Foundation would provide the following: 1) provision for a two-acre park site along Homer Avenue and 2) City purchases of the historic Roth building and the site 0.41 acres for potential development as a public facility or alternative use if a public facility is not
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feasible.” That was presented to the public and to the Council for its decision-making. Mr. Calonne said the City had one acre that was ready to be dedicated as parkland. Staff was currently doing engineering studies on how the Roth building should be protected. The expectation was that a feasible financing plan would be developed and that the 2.41 acres would end up dedicated parkland with a public building. However, the financing mechanism had not been set up to accommodate renovation of the Roth building. Renovating the Roth building would take cash. The Council could indicate its intention to dedicate all 2.41 acres that would not bind successor Councils. As soon as the Council was ready to commit financially to the renovation of the Roth building, the parcel was ready to go. It seemed to be presented as a public trust issue, but that was not the case. The Council could indicate its intention, which would serve to motivate staff to make the park a reality. Council Member Mossar said there was nothing in the report from the City Attorney that said the park would not happen. It just acknowledged that there were some missing pieces, and so the actual dedication could not be made. The Council could wait until all the issues were worked-resolved. The resolution would be done to reassure the community of the Council and staff’s intention to provide a park. MOTION TO LAY ON THE TABLE Council Member Mossar moved, seconded by Eakins, to table Item No. 13. MOTION TO LAY ON THE TABLE PASSED 4-3, Lytle, Burch, Ojakian “no,” Fazzino, Kleinberg absent. Council Member Lytle stated she saw both perspectives in the situation. The neighbors felt let down. There was testimony in determining the park design and alignment including outside expert testimony concerning the advantage of having the Roth building as part of the park. As legitimate and clear as the legal memo was stated, it looked as if Council had reserved the option to reduce the park acreage. A promise was implicit in all the material, and yet Council did not seem able to fully commit to it legally. Council Member Burch stated he did not believe the City intended to pull back from designing a two-acre park; however, the people asked the Council to initiate a dedication, which had been their goal. As City Attorney Calonne had previously stated, a park dedication was all that could happen currently. It did not change the fact there would be a two-acre park. It would be a tremendous betrayal of the Council to not provide the park. Council Member Beecham asked the City Attorney if there was an ability to reconsider items that had not passed.
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Mr. Calonne stated that a motion by two Council Members could return an item off the table to be reagendized. Council Member Beecham asked whether the motion had to be made by the two participates who were not present that evening. Mr. Calonne stated no. The motion to lay an item on the table could be returned from the table at any time. Mayor Eakins stated the City Attorney’s Report dated April 19, 2001, explained the distinction between the 1.00 acres, which were dedicated without revenue outlay, and the 1.41 acres, which would include the historic Roth Building and required acquisition through purchase. Mayor Eakins asked, by a show of hands, if any persons attempted to contact the City Attorney’s Office. She stated when there were serious sets of issues, staff should be contacted as early as possible. The park dedication, initiated by Council Member Kleinberg and unanimously supported, was now tabled. CLOSED SESSION 14. Conference with City Attorney—Existing Litigation Subject: Juana Briones House: Jaim Nulman and Avelyn Welczer v. City of Palo Alto, SCC #CV779831 Authority: Government Code Section 54956.9(a) Item removed at the request of staff. ADJOURNMENT: The meeting adjourned at 11:55 p.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. 04/23/01 92-41