HomeMy WebLinkAbout2001-11-19 City Council Summary Minutes
Regular Meeting November 19, 2001
1. Joint City/School Library Proposal..........................94
2. PUBLIC HEARING: The Palo Alto City Council will consider Citywide restrictions in commercial districts which will protect existing retail uses by limiting the conversion of
ground floor retail and services uses to offices uses.......94
3. Approval of Appointment of Lisa Plank-Schwartz as Senior
Assistant City Attorney.....................................113
4. Contract Between the City of Palo Alto and Advanced Control
Systems in the Amount of $211,566 to Upgrade the Existing Supervisory Control and Data Acquisition (SCADA) System Capital Improvement Program Project 0210, SCADA System
Upgrades; and Request for a Budget Amendment Ordinance of $140,000 to Allow Acceleration of the Project...............113
5. Amendment No. 1 to Contract No. C9115650 Between the City of Palo Alto and Deloitte and Touche for Risk Management Services to Increase the Funding in the Amount of $215,000
to Continue to Provide Assistance in Implementing an Energy Risk Management Program for a Total Maximum Compensation of
$440,000....................................................113
6. Contract Between the City of Palo Alto and Akerman-Practicon in the Amount of $62,000 to Provide Design
Services for CIP Project 10027, Renovation and Upgrades to..113
7. Amendment to Contract No. C9100821 Between the City of Palo
Alto and Kimley-Horn and Associates, Inc., in the Amount of $205,265 for the Traffic Signal Upgrade Project, CIP Project 0117................................................114
8. Santa Clara County Property Tax Allocation Settlement Agreement and Release.......................................114
9. Amendment No. 2 to the Facility Lease at 1875 Embarcadero Road to Brad Lozares for Operation of a Golf Retail Shop....114
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10. Utilities Fiscal Year 2001-03 Demand Side Management and Public Benefits Plan........................................114
11. Cooperation Agreement Between the City of Palo Alto and the Redevelopment Agency of the City of Palo Alto...............114
AT THIS POINT IN THE PROCEEDINGS, THE CITY COUNCIL ADJOURNED AT 10:25 P.M. TO A SPECIAL MEETING AS THE PALO ALTO REDEVELOPMENT AGENCY...................................114
COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS...................114
12. Conference with City Attorney – Existing Litigation.........114
13. Conference with Labor Negotiator............................114
FINAL ADJOURNMENT: The meeting adjourned at 11:45 p.m............115
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The City Council of the City of Palo Alto met on this date in the
Council Chambers at 7:10 p.m.
PRESENT: Beecham, Burch, Eakins, Fazzino (teleconferenced at 7:30 p.m. from New York, NY), Kleinberg (arrived at 10:25 p.m.), Lytle, Mossar (arrived at 10:20 p.m.), Ojakian, Wheeler
REPORTS OF OFFICIALS
1. Joint City/School Library Proposal No action required.
PUBLIC HEARING
2. PUBLIC HEARING: The Palo Alto City Council will consider Citywide restrictions in commercial districts which will protect existing retail uses by limiting the conversion of
ground floor retail and services uses to offices uses (Item
continued from 11/13/01)
Council Member Beecham stated he would not participate on the
item due to conflict of interest because a client had a financial interest in one of the properties.
At the previous weeks regular City Council meeting, Council Member Kleinberg had stated that she would not participate in
the item due to a potential conflict of interest because of her husband’s involvement in Stanford law matters. At the previous weeks regular City Council meeting, Council Member Mossar had stated that she would not participate in the item due to a conflict of interest because her husband was employed by Stanford University.
Chief Planning Official Lisa Grote said there were two distinct aspects of the issue. The first aspect was prohibiting the
conversion of retail, personal service, automotive service, restaurant uses, and other uses that were considered
neighborhood-serving and pedestrian-oriented to office use. That aspect was raised in a Colleague’s Memo, dated March 15, 2001,
that outlined seven elements that could be considered when dealing with a conversion of one existing use to an office use. The second aspect was modifying or amending the existing
regulations that were in place in the GF (Ground Floor) Zone, which was Downtown, and the R (Retail) Combining districts along
California Avenue. That issue was not addressed in the Colleague’s Memo but was brought up six to eight months prior as part of overall conversations with business owners and residents
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about existing nonconforming uses in the two districts. Also, how the intent and health of the retail environment in Downtown
and along California Avenue were affected. The two aspects had separate recommendations but were related to the overall retail environment of the City. The concerns addressed in the Colleague’s Memo, and the seven elements that were raised arose from considerable pressure that occurred earlier in the year and
in prior years for existing retail and retail-related uses to convert to office use. The conversion resulted in additional jobs in an already job-rich environment and resulted in an
erosion of the retail base for surrounding neighborhoods. The impetus behind the potential modifications to the GF and R
Districts came from the additional issue of existing nonconforming office uses, which broke the pedestrian environment along a streetscape in Downtown and along California Avenue. Staff made several interpretations to address the seven elements in the Colleagues Memo. The first element was “Prohibit
existing retail uses in commercial zones from converting to office use.” The definition of retail use was not explicitly listed in the Colleague’s Memo, dated March 15, 2001. Some of the references made included automotive services, retail uses as defined by the Palo Alto Municipal Code (PAMC) Title 18,
personal services, and restaurants. The second element, “The prohibition would apply to those retail services operating as of
March 19, 2001, and for which no application involving a change of use has been submitted to the City by March 19, 2001.” Interpreted that meant that if an Architectural Review Board
(ARB) site and design application or a planned community zone were submitted prior to March 19, 2001, that involved the
removal of retail use and replacement with another permitted use in the zoning district, the applications would be exempt from the ordinance. Currently, there were four applications that fell
within the category. The third element was “The City shall establish an appeal proves to allow conversion in cases of
financial hardship or showing that the facility is unsuited for successful retail use.” Staff did not propose that an exception or appeal process be provided based on financial hardship. Land use decisions were typically not made on financial benefit or risk to an individual property owner. Staff suggested a
Conditional Use Permit (CUP) be used with a third finding, in addition to the two already in the ordinance, which would address whether or not the proposed office use was neighborhood-
oriented or would not reduce the vitality of the retail environment in the area. The fourth element, “Existing retail
service facilities can be rebuilt to include offices as long as the retail square footage is not reduced or encompasses the entire ground floor,” was specifically mentioned in the Colleague’s Memo for those situations where a new building might replace an existing building. The fifth element, “Retail
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services that are grandfathered in as nonconforming or are in the process of being amortized out are not to be protected under
this ordinance,” addressed the five or six uses that had sunset dates attached. The sixth element, “Specific Plans or Coordinated Area Plans (CAP) will supercede this ordinance. As such this ordinance will not take effect in the SOFA areas as that CAP is expected to be completed soon.” Staff assumed the
SOFA Phase II plan, which was approved, would supersede the ordinance. The seventh element, “The basic definition of retail services in the PAMC would be continued,” would include the
addition of automotive service, personal service, and restaurants. The seven elements led to the staff recommendations
before the Council. Staff recommended that the ground floor retail, personal services, automotive services, and restaurants in place as of March 19, 2001, shall not be allowed to convert to office use. There would be no exception for financial hardship, although the Council might choose to consider a CUP.
The recommendations did not apply to the Charleston Center or Midtown Shopping District because those interim ordinances were in place to a specific date. The staff recommendations were based on a close review of the Colleague’s Memo, and differed from what the Planning and Transportation Commission (P&TC)
heard. The P&TC recommended that a wider variety of uses be protected, specifically residential, churches, day care, and
other non-office use. The P&TC also recommended a six-month evaluation, in order for the P&TC and Council to evaluate the effectiveness of the ordinance and any issues that resulted from
its application.
Ms. Grote said the second aspect of the overall issue had to do with the ground floor and retail restrictions that were currently in place in portions of Downtown and along California
Avenue for the retail restrictions. Currently, restrictions allowed specific permitted uses on the ground floor such as
retail, personal service, and hotels and theatres. The current requirements for permitted uses allowed an existing nonconforming office on the ground floor to roll over or continue an office use, although the office uses might change. The recommendation was that as an office use vacated a site,
that site needed to be replaced with retail, personal service or other permitted ground floor use. Staff estimated there were currently approximately 25 nonconforming ground floor uses in
Downtown and approximately 15 on California Avenue, which were located primarily in buildings that were constructed as offices
or bank buildings. There was less than a 3 percent vacancy rate in the Downtown for many years. During the prior three to four months, staff estimated the vacancy rate increased to 12 percent or higher. Staff was in the process with the Downtown monitoring program to determine the vacancy rate. Staff recommended any
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changes to Downtown or California Avenue be deferred and rolled into the Zoning Ordinance update in order to get a better sense
of the vacancy rate. Council Member Fazzino clarified that staff’s recommendation was that the current procedures remain in place.
Ms. Grote said that was correct. Council Member Fazzino asked whether staff considered the
alternative of requiring property owners to go before the City for a hearing.
Ms. Grote said there was a procedure in the Downtown for an exception, if the vacancy rate exceeded 3 percent and the space was vacant for six or more months, to allow an office use on the ground floor for up to five years. Staff did not recommend the
change for Downtown but recommended as an alternative for the Citywide conversion that a CUP process might be used. Council Member Fazzino clarified that if a bank or similar office use lease expired; the owner was free to sign another
long-term lease for a similar use in the Downtown.
Ms. Grote said that was correct. Council Member Fazzino asked whether staff was open to the
possibility of requiring a hearing.
Ms. Grote said the Council might choose to require a hearing be added into the process.
Council Member Lytle said the exception in the GF district used a 5 percent vacancy rate and the use exception could last for
five years. Ms. Grote said that was correct. There was a five-year limitation.
Council Member Wheeler said she was one of the authors of the Colleague’s Memo. The authors of the memo assumed they would look at an ordinance by June 2001. She asked whether there was a
way to know what businesses that fit the broader definition of retail were actually in place on March 19, 2001.
Ms. Grote said staff needed to rely on a number of sources. Staff did research through a reverse directory and relied on property owners to provide documentation as to what use was in place on March 19, 2001.
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Council Member Wheeler asked whether staff thought the March 19,
2001, date created questions and concerns. Ms. Grote said March 19, 2001, was a valid date. Council Member Wheeler said the Colleague’s Memo envisioned that
the ordinance was short term and would remain in effect until there was a permanent rezoning, citywide, to implement the Comprehensive Plan (Comp Plan). A sunset date was not found.
Ms. Grote said the ordinance was not done on an urgency basis
and did not have a sunset date. The ordinance was permanent and would be in place until such time as it was officially modified. The expectation was that staff would continue to review the issue and refine it as part of the Zoning Ordinance update.
Council Member Wheeler clarified staff indicated several months would be added to the already in process Zoning Ordinance update in order to affect the second group of changes, Ms. Grote said that was correct. Staff needed to do extensive
property owner, resident, and stakeholders outreach, which would take time to orchestrate, implement, and complete. Four to six
months added to the timeframe was estimated. Planning and Transportation Commissioner Karen Holman referred
to page 3 of the staff report (CMR:426:01) that stated the P&TC recommended that the Council amend the Zoning Ordinance to
prohibit the conversion of any ground floor use to office use in commercial districts citywide and with a six-month check-in process. The P&TC also recommended that the SOFA II area be
covered until the SOFA II plan was adopted. The P&TC understood that a study was to be conducted for the Zoning Ordinance
update. The P&TC recommended the second ordinance related to nonconforming uses be passed and added a six-month check-in period. Substantive changes should go back to the P&TC for review and recommendation.
Council Member Wheeler said the authors of the Colleague’s Memo were thinking in modest terms. The result of the interpretation of the memo was clearly annunciated in the first ordinance. The
second ordinance was a subject the colleagues did not address was a more complex subject worthy of discussion, debate, and
future action by the Council. The nature of the public discussion at the current meeting might be different if the Council indicated deferring discussion of the second ordinance until a later time.
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City Attorney Ariel Calonne said the Council would need to make a motion to table consideration of the second ordinance.
MOTION TO TABLE: Council Member Wheeler, seconded by Lytle, to
table the ordinance amending sections 18.46.060 and 18.49.040(B)(3) of the Palo Alto Municipal Code to provide for the immediate elimination of discontinued nonconforming uses in
R Retail Shopping Combining and CD Commercial Downtown Districts. MOTION TO TABLE PASSED 6-0, Beecham, Kleinberg, Mossar “not
participating.”
Mayor Eakins declared the public hearing open at 7:50 p.m. Chop Keenan, 700 Emerson Street, expressed concern that the proposal before the Council involved a complex question that had
different ramifications for different parts of the City depending on the existing circumstances of the particular areas. The economics of a recently enacted $45 million parking district assessment was a concern. Decisions were made by property owners based on existing zoning. Discussion at SOFA II meetings
included much discussion about ground floor retail. The closest accord was that design in the ground floor would accommodate
either office or retail, and the market decided the answer as to the right use. Offices were part of the lifeblood of retail. During the SOFA II discussions, he heard that retail without
customers and cars was desired. The best way to accommodate that was to have a retail customer who was already parked and going
to work in an office. Staff needed to include a study of potential retail nodes such as Ricky’s, SOFA areas, Edgewood Plaza, and the front of the Varian property on El Camino Real. A
number of retail opportunities needed to be studied. There was no emergency for the ordinance.
Dorothy Bender, 591 Military Way, urged the Council not to react to pressure from property owners for office uses due to the recent downturn in the economy. The current economic client or vacancy rate should not be used when considering the ordinance.
The Council should zone for the long-term vision as set forth in the Comp Plan for neighborhood-serving walkable retail. Two-story structures with retail-oriented street frontage and rear
parking should be encouraged. The Colleague’s Memo recommended the Council initiate action to adopt an ordinance to prohibit
conversion of retail services to commercial services pending the completion of the Zoning Ordinance update. Diverse retail services spread throughout the City was an essential element in providing residents with shopping convenience. The P&TC held several meetings and developed a set of thorough recommendations
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for the preservation of ground floor retail. The latest modified staff recommendation that a space vacant on March 19, 2001,
could become an office, violated the Council direction to protect ground floor retail and violated the P&TC’s recommendations and public’s input. The Downtown was shaped by zoning, not by market forces. If an ordinance was not passed to protect neighborhood retail, there was a high likelihood that
the City would see the erosion of retail in the neighborhoods and a surplus of destructive office. The Council was asked to take a long-term view with an eye to retail, personal service
and friendly, walkable neighborhoods. The Council was urged to direct staff to be proactive and to seek a reasonable balance of
retail use in the neighborhoods. An ordinance should be passed that prevented ground floor spaces from becoming offices. Jon Goldman, 172 University Avenue, said as a real estate broker, he had not seen any interest on behalf of prospective
office tenants to lease retail spaces. Prospective tenants had choices of dozens of beautiful, remodeled, upper floor spaces from Internet companies that went out of business. There was not much incentive for landlords to convert retail to office. Retail rents in Downtown and on California Avenue had surpassed office
rents, which made leasing to retailers more profitable for landlords.
Stephany McGraw, 3303 Thomas Drive, spoke on behalf of Annette Ashton, who was not at the meeting, and read a letter from the
Midtown Residents Association. The letter was in response to the ground floor retail preservation staff report (CMR:416:01). The
Midtown Residents Association was concerned about the recommendation because it might set a precedent for the update of the Zoning Ordinance with negative effects for the Midtown
commercial area. Although the staff recommendations primarily addressed El Camino Real, the alternative recommendations
addressed other zones. The Midtown Residents Association was concerned that zoning could be put into place that treated all commercial zones together in a similar fashion. The Council should not overreact to pressure from property owners for increased office usage in the current time of market downturn.
Each ground floor office conversion would result in a loss of tax dollars and an opportunity for residents to shop in Palo Alto. Property owners would select office every time over retail
because tenant improvements cost less and office use would produce a longer term tenant and not the day-to-day demand for
service. Every conversion to office usage added to the jobs/housing imbalance, and traffic was increased. Every nonconforming use should revert to conforming when turnover occurred. If space was vacant prior to March 19, 2001, only a conforming use should be allowed. Zoning should not be created
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to allow any housing unit to convert to office. The Council should take a long-term view with an eye to retail, personal
services, for friendly, walkable neighborhoods. Jim Baer, 172 University Avenue, encouraged adoption of the revised staff recommendation to protect any retail in existence
on March 19, 2001. There would not be a gain in bringing the date of March 19 forward. ARB applications as of March 19, 2001, should be reviewed as the applications that were considered in
the March 15, 2001, Colleague’s Memo. California and University Avenues should be viewed as special study zones. Retail in Palo
Alto was increased by 300,000 square feet since 1986. During the prior years, the City lost sight that there was a relationship between civil rights and property rights. Bill Garlock, 645 High Street, owned the Forest Plaza
Condominium Commercial space, made up of approximately 15,000 square feet. He said the project had one retail use that required no parking and little walk by traffic. Finding another retail use for the site would be difficult.
Tony Carrasco, 4216 Darlington Court, said the idea of the P&TC’s blanket retail only was ill conceived and not feasible
from an economic point of view. He supported staff’s recommendation. The areas that were retail should stay retail, which was the intent of the Colleague’s Memo. The ordinance
might be better thought out during the zoning process. A sunset clause should be included in the ordinance.
Alex Edelstein, 355 Santa Rita Avenue, said tabling the ordinance and using the normal zoning process was a good idea.
The current proposal as modified with the staff recommendations was acceptable as a compromise blend, which he supported.
Kurt Reitman, 9 Campbell Lane, Menlo Park, said he owned two buildings in Palo Alto that were impacted by the proposed zoning: 151 Lytton Avenue and 3501-3525 Alma Street. Both properties were one-story structures designed and built for
professional medical offices. The buildings were not conducive for retail use due to lack of window lines. The 90-day vacancy period recommended requiring vacant offices to be converted to
retail use, asked for economic disaster. Existing regulations should be left alone. The City should prepare an economic
supply/demand study to identify areas that were conducive for retail-type uses. Glenda Gavenman, 321 Richelieu Circle, Los Altos, said the Council affected properties along El Camino Real corridor by passing the ordinance. She owned property at El Camino Real and
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Olive Street, an area that was not a walking retail location or a commercial area serving a neighborhood. The area was not
likely to become residential. The ordinance would restrict the possible retail tenants who had any interest in her site. The Council was urged to wait until further review of the City plan before altering the area that was zoned CS on El Camino Real south of Page Mill Road since that area was not compatible with
many retail uses that required foot traffic. Winter Dellenbach, 859 Lapara Avenue, said during the prior
years, Palo Alto lost many businesses. If the quality of life in Palo Alto was adversely affected by the loss of defining retail
businesses, her property value went down because it was a less desirable place to live. The subject of values was a complex issue that could not be dealt with in a form such as the proposed ordinance. The Council was urged to take the opportunity to pass strong protections that would not take
forever to enact and would provide protection into the future. Wayne Martin, 3687 Bryant Street, said he prepared a table that included properties listed in Mr. Baer’s handout that listed rental amounts for the properties. The table was designed to
show the impact of the takings of the properties based on real and presupposed data. Another table included traffic generated
properties by land use. The trip counts were high on the retail uses.
Sally Probst, 735 Coastland Drive, said the ordinance was only permanent until the zoning update. The Council was asked to
consider maintaining flexibility. A trend in cities throughout the state was for mixed use. The opportunity existed along El Camino Real to consolidate various parcels for advantageous
mixed-use parcels. The ultimate effect was to provide more residential than currently existed.
Ashley Mozart, 1068 East Meadow Circle, said her property had a vested right to conduct its uses, which was office space. The City did not have a legal authority to change the use.
Cornelia Pendleton, 267 Hamilton Avenue, agreed with Ms. Dellenbach’s comments about retail in Palo Alto. The City lost viable retail during the prior five years to rents that were
beyond what the normal retail market could handle.
Bill Phillips, Stanford University, said he heard that zoning for an economic down cycle or an economic up cycle was not a good idea. The proposed ordinance said the City was experiencing an unprecedented sustained demand for office space. The demand for office space came from the well financed and highly
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profitable businesses that typified Silicon Valley. Those enterprises were able to pay high rents to locate within the
City’s commercial areas. None of those statements were true at the current time. A difficulty with the ordinance was what it did to the “CC zone.” The “CC” zone was primarily a regional or subregional shopping center concentration. To preclude any office use in the one-story environment was a mistake and did a
disservice to the retail center and to the people it tried to serve.
Mayor Eakins asked whether Mr. Phillips was referring to Stanford Shopping Center.
Mr. Phillips said with the exception of the anchor stores, the shopping center was essentially one story. Mayor Eakins clarified the Colleague’s Memo limited the
flexibility to move as tenants changed. Mr. Phillips said that was correct. Council Member Wheeler asked what ground floor office type uses
existed in Stanford Shopping Center.
Mr. Phillips said there were none except for the Stanford Hospital library.
Bob Moss, 4010 Orme Street, said the current time was an excellent time to pass the ordinance because there were no
pressures of a booming economy. The comment that the ordinance was engendered only by the bustling office development was false. When the CN zone was created in 1976, an effort was
consciously made to limit office uses in the retail zone to prevent displacement of retail uses. Allowing existing office
uses to be grandfathered in to what was once viable retail was wrong. There were a number of such uses on El Camino Real. They were viable retail, squeezed out for office uses, and should be returned to viable retail. If something were not done at the current time, the same problem would occur in a few years. The
purpose of zoning and land use was for the benefit of the entire community rather than a narrow segment.
Gail Sredanovic, 2161 Ashton Avenue, Menlo Park, said the ordinance protected business owners. In the area where she
bought her home, there was a grocery store, pharmacy, and hardware store. The grocery store closed and was replaced by an office building; the hardware store was forced out when the landlord tripled the rent; and the pharmacy closed and remained vacant for years.
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Stephanie Munoz, 101 Alma Street, applauded the work of the P&TC
and staff in the part that spoke for more housing and more mixed use, which was needed in Palo Alto. The congestion in reference to the jobs/housing imbalance applied as well to retail as offices. The more successful the retail was, the more congestion there was. The purpose and value of ground floor retail was to
help the community by helping the merchants. The City could not tell the property owner what he must do with his property.
Steve Pierce, 209 Cowper Street, supported protecting retail but not the means to protect that were before the Council. The
Council had three options: 1) do not pass the proposal; 2) take a longer look at the issue; or 3) pass the proposal. The Council was urged not to pass the ordinance. Planning and Transportation Commissioner Patrick Burt had said, “One of the things that is absent is that there has not been an adequate exploration to
attempt to define the problem. We are leaping into solutions, and I think we need to spend an adequate amount of time defining the problems before we move forward on solutions.” What was before the Council was a wholesale zoning change by virtue of locking in particular uses. Adequate regard was not given to a
number of important issues such as suitability of locations and structures, changing nature of retail, areas in transition, and
impacts on historic structures. The differentials that were established in the General Plan to differentiate between the “CN,” “CS,” and “CC” zones were disregarded. Staff indicated the
goal was to preserve a neighborhood serving commercial, yet “CN” and other zones were included.
David Bubenik, 420 Homer Avenue, said the City saw many retail conversions to office during the prior years. The City was again
being asked to permit that conversion, regardless of the cost to the community on the basis of property rights. The City needed a
mix of commercial, office, and retail. Joy Ogawa, 2305 Yale Street, said the ordinance was not recommended for approval by the P&TC. She would have opposed staff’s recommended ordinance at the P&TC hearing if the staff
had proposed the same ordinance as was presented at the current meeting. Areas such as College Terrace, Evergreen Park, Barron Park, Ventura, and Charleston Meadows waited for the Council to
provide the same type of protection for their neighborhood commercial districts. Staff held outreach meetings about
neighborhood commercial in January 2001, and in March 2001, the Colleague’s Memo, dated March 15, 2001, changed directions. If the staff recommendations were approved, new ground floor offices might be built along El Camino Real, replacing gas stations, churches, hotels, and buildings that once held retail.
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The one size fit all ordinance did not work for the neighborhood commercial and did little to keep the neighborhood commercial
districts for neighborhood serving uses. The CN zone should be separated from the rest of the commercial zones. Faith Bell, 536 Emerson Street, said Chimara Books left Palo Alto after nearly 30 years in business because of increased
rents. The space the bookstore occupied was vacant for two years. A neighboring business opened a business with a one-year lease. When the business owner went to renew the lease, the
lease was doubled with an additional 20 percent added. If developers bought into a market that was high, they needed to
pay the price. The staff report (CMR:416:01) altered the carefully considered recommendations of the P&TC. The P&TC unanimously passed a motion to keep all non-office uses non-office except under specific and limited conditions.
Chris Storer, 536 Emerson Street, said much discussion centered on the issue being the result of the dot com explosion. Palo Alto had increasingly created a competition for space between retail and office. Palo Alto rents were among the highest in the United States. One impact was that old, community-based business
was lost. Offices did not need to be on first floors. A strong statement about the direction Palo Alto was going needed to be
made. The Council was urged to go back to the original recommendations from the P&TC.
Steve Reyna, 840 Kipling Street, said protection of ground floor retail was needed. The City saw a down turn, but the rents had
not dropped much. The economy would come back, and the pressures would come back. The Council had the opportunity to set up the situation to not lose the fabric of the community that was
embedded in the retail. A process issue existed. The P&TC was given something to review, and it gave a considered opinion on
what was before it. Substantial changes came in since then that were not reviewed by the P&TC. An alternative of not including SOFA II was mentioned in the staff report (CMR:416:01). That would be a mistake. The SOFA II process needed to be restarted.
Jack Morton, 2343 Webster Street, said the Council needed to sort out what was being done. He questioned whether the City tried to preserve sales tax or preserve neighborhood retail
businesses. The CN zone might have to be handled completely different, and perhaps legislating in a smaller area, retail
only in certain areas made sense. The Council was encouraged not to zone something blanketly so that offices supporting sales tax became nonconforming uses. If the recession continued, the City did not want to discourage occupancy on the main floor.
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Herb Borock, P.O. Box 632, said many speakers argued against the measures before the Council because there was no emergency. The
issue was not brought to the Council as an emergency ordinance. The P&TC advised the Council and should have seen the new staff recommendation. The ordinance should be applied to the “CC” zone as well. There was a history on El Camino Real of changing zoning for residential, and the property owners went on strike
and hoped there would be another Council over the years to change the zoning back. The Council stayed with the zoning and residential existed on many parcels on El Camino Real.
Mayor Eakins declared the Public Hearing closed at 9:12 p.m.
Council Member Lytle asked staff to summarize the changes in the staff recommendation that came between the P&TC review and the current evening’s meeting.
Ms. Grote said the change was that the uses proposed to be protected more closely reflected the Colleague’s Memo, dated March 15, 2001. The changes were narrower in focus and included retail uses, personal services, automotive services, and restaurants. The recommendation did not include the more
extensive protection for any non-office use which was what the P&TC heard and considered.
Council Member Lytle clarified when the P&TC had an ordinance before it, the ordinance was broader in terms of not preventing
office conversion and narrowed in terms of recommendation to the Council to a subset of uses.
Ms. Grote said that was correct. The rationale was that the staff recommendation more closely reflected given by the
Colleague’s Memo.
Interim Director of Planning and Community Environment Les White said he came in late in the process. In reading the Colleague’s Memo, it struck him that staff’s interpretation was too broad. The Colleague’s Memo did not alter the P&TC’s recommendations. The P&TC recommendations were intact and before the Council.
Staff upheld the integrity of the process and presented to the Council considerable recommendations.
Vice Mayor Ojakian clarified the P&TC’s recommendations were in the staff report (CMR:416:01) but not necessarily the staff
recommendations. Mr. White said that was correct.
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City Manager Frank Benest said the P&TC and staff were advisory to the Council, and it was okay to be upfront about the
differing views. Comments were made about different perspectives from different interest groups in the community. Residents, property owners, tenants, Planning Commissioners, and staff all had different views and perspectives, and all views were valid.
Council Member Lytle asked whether the Chamber of Commerce Government Action Committee take a position.
Tracy Hutchison, Chamber of Commerce President, said the Chamber had not taken a position.
Vice Mayor Ojakian asked for a definition of personal uses. Ms. Grote said personal uses involved businesses such as barber shops, beauty shops, day salons, and teeth whitening services.
Vice Mayor Ojakian asked whether there was a mention of banks. Ms. Grote said banks were not proposed to be covered by the protections in the ordinance.
Vice Mayor Ojakian asked if the ordinance were applied across
the board, would there be no banks on ground floor levels. Ms. Grote said if the Council did not allow continuously rolling
over existing nonconforming uses, banks would need to vacate. There was a provision for financial services as a CUP Downtown.
Vice Mayor Ojakian said the ordinance was written for retention rather than conversion.
Ms. Grote said if there was an existing bank in a commercial
district, the business could continue to be a bank and could continue to roll over to another type of bank or converted to an office use. Vice Mayor Ojakian asked whether any of the ordinance applied to
the SOFA II area. Ms. Grote said the ordinance applied to the SOFA II area until
such time as the CAP was approved. The CAP would supersede the ordinance.
Vice Mayor Ojakian referred to Ms. Probst’s comments about mixed use and flexibility, especially as related to specific plans.
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Ms. Grote said the current ordinance did not affect mixed use, either vertical or horizontal, and was not intended to prohibit,
prevent or inhibit mixed use. Council Member Burch asked about the term “ground floor retail.” Ms. Grote said the term became a way to identify restricted uses
that were on the first floor because that was the floor that related most directly to the street and to pedestrians.
Council Member Burch asked whether there were any examples in the City of retail on the second or third floor.
Ms. Grote said Stanford Shopping Center was an example, and there were some examples on California Avenue. Council Member Wheeler asked what would happen if the Health
Care Library came in as a new proposal and what type of zoning category would it be classified. Ms. Grote said the Health Library was an uncommon use and could be considered a personal service. If it were to move somewhere,
it would be allowed as a personal service.
Council Member Wheeler was interested in the comments made about the protections along El Camino Real for conversions from uses such as hotels/motels and residential. She understood that Ms.
Grote made the changes in the recommendations because the changes followed more closely the Colleague’s Memo. If one part
of the area was constricted, certain properties might become more vulnerable as targets for conversion.
Ms. Grote said she did not know whether hotels/motels would become more vulnerable. Hotels/motels were not designed to
easily convert to an office use. Some ground floor housing might be subject to that type of pressure. Housing could be written into one of the protected uses in the draft ordinance. Council Member Wheeler asked why the concept of the six-month
check-in dropped out of the staff recommendation. Ms. Grote said the six-month check-in was not included in the
ordinance because staff considered that to be an administrative practice.
Mayor Eakins said Mr. Carrasco talked about the effect on all the yellow areas listed on the Downtown District map contained in the staff report (CMR:416:01). She clarified that the yellow area was commercial.
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Ms. Grote said that was correct. Property zoned “CD-C” or “CD-S”
was shown in yellow. Properties with a ground floor overlay were shown in brown. Mayor Eakins asked about the thought process staff applied to the yellow areas.
Ms. Grote said the yellow areas were subject to the same type of restrictions that all other commercial districts were as far as
“CN,” “CC,” “CS.”
Mayor Eakins asked what staff’s response had been to Mr. Carrasco’s concern. Ms. Grote believed the existing retail uses were more likely to continue if the protections were in place. Mr. Carrasco said the
existing staff recommendation was supportable; however, he recommended the entire Downtown area be deferred to the Zoning Ordinance update. If it were deferred, staff could put more study into it to determine what the uses in the area were.
Mayor Eakins clarified the ground floor retail overlay was in the parking assessment district.
Ms. Grote said that was correct.
Mayor Eakins asked how much of the yellow area was in the parking assessment district.
Ms. Grote said she needed to review the Zoning Map.
Council Member Lytle was curious about the parking assessment district versus the ground floor retail boundaries in the
Downtown and how the regulations affected the “CD-C” outside the “GF.” The ordinance would not prevent the more detailed study that people called for. Council Member Wheeler assumed studies would take place as a
matter of course during the Zoning Ordinance update. Council Member Lytle said some members of the public asked her
why the March 19, 2001, date was selected. She understood the date was selected because it was the date of the Colleague Memo
authorship. Council Member Wheeler said March 19, 2001, was the date of the Council meeting.
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Council Member Lytle said the idea of allowing the applications that were in process to go through made sense to her. She
understood staff amended its recommendation to include all vacant properties and asked how many properties might be vacant but not have any applications in process. Ms. Grote said staff did not have the data on how many
properties were actually vacant as of March 19, 2001. Vacant properties were included because they were not existing retail, personal service, automotive service, or restaurants, and
therefore were not subject to being protected. Staff interpreted the Colleague’s Memo to protect existing uses.
Council Member Burch asked about the four applications that were in the process. Ms. Grote said the applications were for 250 and 270 Homer
Avenue, which came in on December 21, 2000; 150-158 Hamilton Avenue, which came in on October 26, 2000; 820 Ramona Street which came in on August 10, 2000; and 1730 Embarcadero. There were portions of the “CD-P” that were in the parking assessment district but not in the “GF” area, which included the area
between Hamilton Avenue and Forest Avenue, between Waverley Street and Alma Street.
MOTION: Council Member Wheeler moved, seconded by Ojakian, to
introduce for first reading the ordinance amending sections
18.04.030, 18.41.030, 18.43.030, 18.45.030 and 18.49.050 of the Palo Alto Municipal Code to Prohibit the Conversion in
Commercial Districts of Ground Floor Retail Services to Medical, Professional, Administrative and General Business Offices and approve the staff recommendation as follows:
• Amend the Zoning Ordinance to prohibit the conversion in
commercial districts of ground floor retail uses, including personal and automotive service uses, to medical, professional, administrative or general business
offices. These changes would affect neighborhood commercial (CN) districts, with the exception of Midtown
Shopping District and Charleston Center, which are addressed by Interim Ordinances; service commercial (CS) community commercial (CC), and downtown commercial (CD)
zoning districts (Attachment A of CMR:416:01).
• Defer amendments to the California Avenue retail district (CC(2)(R)(P)) and the Downtown ground floor district (CD(GF)(P)) regulations to the Zoning Ordinance Update so
that complete information retarding vacancy rates and
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other land use data can be assessed prior to making a final decision.
Further, to amend the following: 1) as of March 19, 2001, add housing to protected uses along El Camino Real; 2) add an administrative item to return for a six-month review by the Planning and Transportation Commission and the City Council; and
3) change wording in section 1., B.3, “The City at times has experienced an unprecedented sustained demand for office space. The demand for office space comes, to a large extent, from the
well-financed and often highly profitable businesses that typify the Silicon Valley. These enterprises are willing and able to
pay high rents to locate within the City’s commercial areas. As a result, buildings which traditionally have been used for retail service have been converted to office space”.
Ordinance 1st Reading entitled “Ordinance of the Council of
the City of Palo Alto Amending sections 18.04.030, 18.41.030, 18.43.030, 18.45.030 and 18.49.050 of the Palo Alto Municipal Code to Prohibit the Conversion in Commercial Districts of Ground Floor Retail Services to Medical, Professional, Administrative and General Business
Offices”
Ordinance 1st Reading entitled “Ordinance of the Council of the City of Palo Alto Amending Sections 18.46.060 And 18.49.040(B)(3) of the Palo Alto Municipal Code to Provide
for the Immediate Elimination of Discontinued Nonconforming Uses in R Retail Shopping Combining and CD Commercial
Downtown Districts” Council Member Fazzino asked what type of information would the
Council have in six months. A mandated review of the ordinance should be required, but he questioned how much helpful data the
Council would have in six months as opposed to one year. Ms. Grote said staff would have the number of applications that were submitted, and there might not be a great number at the end of six months.
Council Member Wheeler asked what type of applications.
Ms. Grote said there would not be any applications to change uses. Staff might be able to report back to the Council on the
number of inquiries. Council Member Wheeler suggested the report might be on the vacancy situation, such as how many retail spaces were vacant, had become vacant, or were unrented for certain periods of time.
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Ms. Grote said staff did not have that data but would obtain
that information if that were the direction of the Council. Mr. Benest suggested staff identify the kind of data it could readily get when the ordinance returned for a second reading.
Mayor Eakins suggesting adding the exclusion of parking assessment district areas.
Council Member Fazzino asked whether the Council would be precluded from doing something in the Downtown at a later time.
Mayor Eakins said no. Council Member Wheeler said what was before the Council was faithful to the proposal that the authors of the Colleague’s
Memo, dated March 15, 2001, had proposed to the Council. The ordinance was not envisioned as the final zoning product that would ultimately implement the 1995 Comp Plan. The intent was to protect those uses that on March 19, 2001, were retail uses.
Vice Mayor Ojakian said the action taken was a moderate approach to what was going on with the retail situation in Palo Alto. The
Council did not ask for wholesale conversions but rather retained what it had.
Council Member Burch was concerned about the long-term view of the City and what the Council was trying to do. He supported the
Comp Plan and its idea of neighborhood serving. Council Member Lytle thanked the authors of the Colleague’s
Memo, dated March 15, 2001, which defined the problem well and gave the Council an interim solution until more thorough studies
could be done. She questioned if there was no need to stop conversion, why were so many people protesting an ordinance to prevent conversion. She agreed with Mr. Morton that the 60,000 residential population did not only support the local retail. The client base that the Council had to support with retail was
three to four times the size of the residential population. The P&TC’s nonconforming conversion proposal was good but needed more study. Vacant buildings should not be excluded.
Council Member Fazzino said the Council had a responsibility to
establish an appropriate mix of retail, office, housing, and other uses. The proposal before the Council did a good job of retaining current retail, preserving rights for current uses, and establishing an appropriate balance of uses. The focus was on retention.
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MOTION PASSED 6-0, Beecham, Kleinberg, Mossar “not
participating.” CONSENT CALENDAR Council Member Burch requested that Item No. 10 be removed from
the Consent Calendar and referred back to staff for inclusion of sustainability.
City Attorney Calonne announced that Item No. 5, contract with Deloitte and Touche was not signed, and he had every assurance
that it would be signed. MOTION: Vice Mayor Ojakian moved, seconded by Mossar, to approve Consent Calendar Item Nos. 3-9 and 11.
ADMINISTRATIVE
3. Approval of Appointment of Lisa Plank-Schwartz as Senior Assistant City Attorney
4. Contract Between the City of Palo Alto and Advanced Control Systems in the Amount of $211,566 to Upgrade the Existing
Supervisory Control and Data Acquisition (SCADA) System Capital Improvement Program Project 0210, SCADA System Upgrades; and Request for a Budget Amendment Ordinance of
$140,000 to Allow Acceleration of the Project
Ordinance 4723 entitled “Ordinance of the Council of the City of Palo Alto Amending the Budget for Fiscal Year 2001-02 to Provide an Additional Appropriation of $140,000 to
allow Acceleration of Capital Improvement Program Project 0210, SCADA System Upgrades”
5. Amendment No. 1 to Contract No. C9115650 Between the City of Palo Alto and Deloitte and Touche for Risk Management Services to Increase the Funding in the Amount of $215,000 to Continue to Provide Assistance in Implementing an Energy
Risk Management Program for a Total Maximum Compensation of $440,000
6. Contract Between the City of Palo Alto and Akerman-Practicon in the Amount of $62,000 to Provide Design
Services for CIP Project 10027, Renovation and Upgrades to Data Management Systems 7. Amendment to Contract No. C9100821 Between the City of Palo Alto and Kimley-Horn and Associates, Inc., in the Amount of
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$205,265 for the Traffic Signal Upgrade Project, CIP Project 0117
8. Santa Clara County Property Tax Allocation Settlement Agreement and Release 9. Amendment No. 2 to the Facility Lease at 1875 Embarcadero
Road to Brad Lozares for Operation of a Golf Retail Shop 10. Utilities Fiscal Year 2001-03 Demand Side Management and
Public Benefits Plan
11. Cooperation Agreement Between the City of Palo Alto and the Redevelopment Agency of the City of Palo Alto MOTION PASSED 7-0 for Item Nos. 3-9 and 11, Fazzino, Kleinberg
absent.
COUNCIL MATTERS
AT THIS POINT IN THE PROCEEDINGS, THE CITY COUNCIL ADJOURNED AT 10:25 P.M. TO A SPECIAL MEETING AS THE PALO ALTO REDEVELOPMENT AGENCY THE CITY COUNCIL RECONVENED AS THE CITY COUNCIL AT 11:10 P.M.
COUNCIL COMMENTS, QUESTIONS, AND ANNOUNCEMENTS
Council Member Lytle expressed concern about the Hoover Park
bathrooms issue, which was to return to Council in September. CLOSED SESSION
The meeting adjourned to a Closed Session at 11:10 p.m.
12. Conference with City Attorney – Existing Litigation Subject: Wei Wang and Weyyi Wang v. City of Palo Alto, et al., Santa Clara County Superior Court No.: CV802799
Authority: Government Code Section 54956.9(a)
13. Conference with Labor Negotiator
Agency Negotiator: City Council Ad Hoc Personnel Committee (Vic Ojakian, Bern Beecham, Jim Burch, Sandy Eakins) Unrepresented Employees: City Attorney Ariel Calonne, City Auditor Sharon Erickson, City Clerk Donna Rogers, City Manager Frank Benest
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Authority: Government Code section 54957.6
The City Council met in Closed Session to discuss matters involving Existing Litigation and Labor Negotiations as described in Agenda Item No. 12 and 13. Mayor Eakins announced that no reportable action was taken on Agenda Item No. 12 and 13
FINAL ADJOURNMENT: The meeting adjourned at 11:45 p.m.
ATTEST: APPROVED:
City Clerk Vice Mayor NOTE: Sense minutes (synopsis) are prepared in accordance with
Palo Alto Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing Committee meeting tapes are made solely for
the purpose of facilitating the preparation of the minutes of the meetings. City Council and Standing Committee meeting tapes are recycled 90 days from the date of the meeting. The tapes are
available for members of the public to listen to during regular office hours.
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