HomeMy WebLinkAbout2014-12-15 City Council Summary Minutes
11/15/2014 116- 227
Special Meeting
December 15, 2014
Special Orders Of The Day .......................................................................231
1. Proclamation for Waverley Writers. ...................................................231
2. Adoption of Three Resolutions of the Council Expressing Appreciation.
Resolution 9477 entitled “Resolution of the Council of the City of Palo
Alto to Arthur Keller for His Service on the Planning and Transportation
Commission,” Resolution 9478 entitled “Resolution of the Council of
the City of Palo Alto to Lee Lippert for His Service on the Architectural
Review Board,” and Resolution 9479 entitled “Resolution of the Council
of the City of Palo Alto to Clare Malone-Prichard for Her Service on the
Architectural Review Board.” ...........................................................231
Council Member Questions, Comments And Announcements ........................233
City Manager Comments .........................................................................233
Agenda Changes, Additions And Deletions .................................................234
Oral Communications ..............................................................................235
Consent Calendar ...................................................................................236
3. Resolution 9480 entitled “Resolution of the Council of the City of Palo
Alto Approving and Authorizing the City Manager to Execute a Meter
Maintenance Program Agreement with the Northern California Power
Agency for a Five Year Term with an Anticipated Total Cost of
$45,000.” ......................................................................................240
4. Approve a Contract with Goodland Landscape Construction, Inc. in the
Amount of $4,441,520.11; Authorize the City Manager or his Designee
to Negotiate and Execute One or More Change Orders to the Contract
with Goodland Landscape Construction, Inc., Not to Exceed $444,151;
Approve a Contract with NOVA Partners, Inc. in the Amount of
$319,880 for Construction Management Services; and Adopt a Budget
Amendment Ordinance 5292 entitled “Budget Amendment Ordinance
of the Council of the City of Palo Alto in the Total Amount of
$1,343,047 to increase the El Camino Park Restoration Project by
$1,343,047, offset by a $246,000 transfer from the Park Development
MINUTES
12/15/2014 116- 228
Impact Fee Fund, a $45,000 reduction to the Bicycle and Pedestrian
Transportation Projects capital project, and a reduction to the
Infrastructure Reserve (IR) by $1,052,047.” ......................................241
5. Grant of Easements to Santa Clara Valley Water District, Pacific Gas
and Electric Company, City of East Palo Alto and East Palo Alto
Sanitary District for the San Francisquito Creek Joint Powers
Authority’s (JPA) Initial Flood Protection Project (Highway 101 to San
Francisco Bay). ..............................................................................241
6. Approval of Amendment One to Contract with Tandem Creative, Inc. to
Extend the Contract Term Through December 31, 2016 and to
Increase the Total Compensation by $220,000 from $198,000 for a
Total Not to Exceed Amount of $418,000 to Provide Marketing Design
Services for the Utilities Department. ...............................................241
7. Approval of a Final Subdivision Map for the Previously Approved
Mayfield Agreement Housing Project at 1451-1601 California Avenue,
Including 68 Detached Single Family Residences and 112 Multi-family
Condo Units. Environmental Assessment: City of Palo Alto/Stanford
Development Agreement and Lease Project Environmental Impact
Report (State Clearinghouse No. 2003082103). .................................241
8. Approve a Blanket Purchase Order with Oldcastle Precast, Inc., as the
City's New Standardized Supplier of Certain Equipment for the Utility's
Electric Underground System, in an Annual Amount of $350,000 for a
Total Purchase Amount of $1,750,000 Over the Next 4.5 Years. ...........241
9. Approval of a Contract Amendment to CompuCom Systems, Inc., in
the Amounts of $194,470 for Annual Microsoft Licensing True-Up,
$70,147 for Office365, and $27,000 for a contract contingency -
Contract C12144913; and Adoption of a Budget Amendment Ordinance
5293 entitled “Budget Amendment Ordinance of the Council of the City
of Palo Alto in the Information Technology Fund in the Amount of
$291,617.” ....................................................................................241
10. 2755 El Camino Real Prescreening Request: Request by Hayes Group
Architects for Council Authorization to Schedule a City Council
Preliminary Review (“Pre-Screening”) of a proposed Rezoning from PF
(Public Facility) to CC2 (Community Commercial) and amendment to
the Comprehensive Plan land use designation for a vacant site at the
corner of El Camino Real and Page Mill Road (the vacated VTA parking
lot). ..............................................................................................241
11. Ordinance 5294 entitled “Ordinance of the Council of the City of Palo
Alto Establishing a Citywide Framework for Establishment of
Neighborhood-Specific Residential Preferential Parking (RPP) Districts
(First Reading: December 2, 2014 PASSED: 9-0).” ............................242
MINUTES
12/15/2014 116- 229
12. Recommendation from Policy and Services Committee: (a) Review
and Accept Inventory of Donated City Owned Properties; (b) Review
and Make No Changes to Policy and Procedure 1-11 (Leased Use of
City Land/Facilities). .......................................................................242
13. Review of a Proposed Conditional Use Permit (CUP) for a Verizon
Wireless Telecommunication Facility at the Palo Alto Little League Ball
Field, Zoned R-1 (8000), and an Appeal of the Director’s Architectural
Review Approval of the Facility, an 18-inch Diameter, 65-foot tall
Monopole/Light Pole Replacing a 12-inch Diameter, 60-foot Tall Light
Pole, and Associated At-Grade Equipment Enclosure at 3672
Middlefield Road and Approval of CEQA Exemption. ............................242
14. Park Improvement Ordinance 5295 entitled “Park Improvement
Ordinance of the Council of the City of Palo Alto Approving and
Adopting a Plan for Improvements to Bowden Park.” ..........................242
15. Proposed Changes in Development Impact Fees: Adoption of
Ordinance Amending Chapter 16.58 Implementing New Public Safety
Facility and General Government Facility Impact Fees And Direction
to Draft Resolution Setting Initial Impact Fee Rates at 75 Percent of
Levels Identified in Nexus Study. .....................................................242
16. Resolution 9481 entitled “Resolution of the Council of the City of Palo
Alto Amending Resolution No. 9296, Adopted November 13, 2012, to
Extend Statutory Exception for Soil Transfers by Truck on Oregon
Expressway until September 30, 2015.” ............................................242
17. Request for Authorization to Increase Existing Legal Services
Agreements with the Law Firms of: (1) Ginn & Crosby, LLP, by an
Additional $50,000 for Legal Services Relating to Construction of the
Mitchell Park Library and Community Center for a Total Not to Exceed
Amount of $250,000; and (2) Musick Peeler & Garrett, LLP, by an
Additional $20,000 for Palo Alto Baylands Golf Course Reconfiguration
Project and the San Francisquito Creek Flood Control Project for a total
Not to Exceed Amount of $85,000. ...................................................242
18. Adoption of First Amendment to the Lease with ADA’s Café and to
Modify the Term and Add $79,655 to Reimburse Tenant for Expenses
Related to Completion of Mitchell Park Library and Community Center. .242
Action Items ..........................................................................................243
19. PUBLIC HEARING: Approval of a New Fifty (50) Year Lease to
Avenidas for City-Owned Property at 450 Bryant Street to Allow the
Continued Use of the Building to Provide Senior Services. ...................243
20. Palo Alto History Museum’s Request for Funding and Approval of
Transfer of Development Rights for the Roth Building. ........................244
MINUTES
12/15/2014 116- 230
21. Approval of the Proposed Grocery Store Tenant (College Terrace
Market) Within PC 5069 (College Terrace Centre) Based on the Finding
that the Proposed Grocery Tenant Would Likely be Comparable in
Quality of Products and Services as JJ&F as It Existed and Operated on
December 7, 2009 at 2180 El Camino Real. .......................................263
22. Policy and Services Committee Recommendation to Council for
Adoption of an Ordinance Amending Chapter 9.14 (Smoking And
Tobacco Regulations) of the Palo Alto Municipal Code to Establish New
Smoking Restrictions for Outdoor Commercial Areas, Outdoor Eating
Areas, Public Events, Work Sites and Service Locations; Include
Penalty Escalation for Repeat Offenders; Require Cigarette Butt
Receptacles and Signage Immediately Adjacent and Within Areas
Covered by the Ban; and Include E-cigarettes. ..................................271
23. Colleague's Memo From Council Members Berman, Burt, and Klein
Regarding Climate Action Plan Implementation Strategy to Reduce Use
of Natural Gas and Gasoline Through “Fuel Switching” to Carbon-Free
Electricity. .....................................................................................275
24. Colleagues Memo from Vice Mayor Kniss and Council Members
Holman, Klein and Price Regarding Regulation of Short-Term Rentals in
Residential Neighborhoods (e.g., Airbnb and Related Businesses). ........278
Adjournment: The meeting was adjourned at 1:11 A.M. .............................280
MINUTES
12/15/2014 116- 231
The City Council of the City of Palo Alto met on this date in the Council
Chambers at 5:37 P.M.
Present: Berman, Burt, Holman, Klein arrived at 5:41 P.M., Kniss, Price,
Scharff, Schmid, Shepherd
Absent:
Special Orders Of The Day
1. Proclamation for Waverley Writers.
Council Member Price read the Proclamation into the record.
Mary Marsha thanked the Council for recognizing and honoring Waverly
Writers and poetry. Waverly Writers had been a haven for many poets. She
read a poem from the most recent edition of Fresh Hot Bread.
2. Adoption of Three Resolutions of the Council Expressing Appreciation.
Resolution 9477 entitled “Resolution of the Council of the City of Palo
Alto to Arthur Keller for His Service on the Planning and Transportation
Commission,” Resolution 9478 entitled “Resolution of the Council of
the City of Palo Alto to Lee Lippert for His Service on the Architectural
Review Board,” and Resolution 9479 entitled “Resolution of the Council
of the City of Palo Alto to Clare Malone-Prichard for Her Service on the
Architectural Review Board.”
Council Member Burt read the Resolution in recognition of Arthur Keller into
the record.
MOTION: Council Member Burt moved, seconded by Council Member
Holman to adopt the Resolution expressing appreciation to Arthur Keller for
his service on the Planning and Transportation Commission.
MOTION PASSED: 9-0
Arthur Keller expressed that he had learned a great deal about land use and
transportation issues while serving as a Planning and Transportation
Commissioner. He noted the loss of ground-floor retail businesses in the
Downtown area and suggested the Council reconsider the meaning of
commercial use. Palo Alto needed more housing for senior citizens and
younger adults.
MINUTES
12/15/2014 116- 232
Council Member Holman felt the Resolution spoke well to Mr. Keller's service.
She appreciated serving with Mr. Keller on the Planning and Transportation
Commission (P&TC).
Council Member Schmid thanked Mr. Keller for his thoughtful comments
while serving on the P&TC. He hoped Mr. Keller would continue to share his
analyses of issues.
Council Member Price read the Resolution in recognition of Lee Lippert into
the record.
MOTION: Council Member Price moved, seconded by Mayor Shepherd to
adopt the Resolution expressing appreciation to Lee Lippert for his service on
the Architectural Review Board.
MOTION PASSED: 9-0
Lee Lippert thanked the Council for the honor and pleasure of serving the
community for the past 17 years. He recalled Frank Alfonso's influence on
his decisions while serving on the Architectural Review Board (ARB).
Mayor Shepherd believed Mr. Lippert helped crystallize design debates. She
thanked Mr. Lippert for his contributions to the City.
Council Member Price indicated Mr. Lippert's service demonstrated his
commitment to the City.
Council Member Klein read the Resolution in recognition of Clare Malone-
Prichard into the record.
MOTION: Council Member Klein moved, seconded by Mayor Shepherd to
adopt the Resolution expressing appreciation to Clare Malone-Prichard for
her service on the Architectural Review Board.
MOTION PASSED: 9-0
Clare Malone-Prichard noted how she enjoyed working with Staff and
colleagues in an effort to make Palo Alto a better place to live and do
business. Navigating between development rights and the desire to
maintain Palo Alto's character was a delicate balance.
Mayor Shepherd expressed appreciation for the Architectural Review Board's
work and Ms. Malone-Prichard's service.
MINUTES
12/15/2014 116- 233
Council Member Questions, Comments And Announcements
Council Member Berman recorded a yes vote for the Resolution in
recognition of Lee Lippert.
Council Member Price inquired about the status of body cameras for the
Police Department.
James Keene, City Manager, reported the City had video cameras in police
cars. Staff began to utilize COPS funding to purchase body cameras initially
for all patrol officers not in vehicles. Currently eight or nine body cameras
were in operation. More cameras would be purchased.
Council Member Price encouraged the public to read the informational report
regarding Project Safety Net and Health and Safety Funds from the Stanford
University Medical Center Development Agreement contained in the Council's
packet.
Mayor Shepherd advised that she and the City Manager had reorganized the
process for developing Agendas. The City Manager met with the Agenda-
setting team prior to the pre-Council meeting and eliminated a meeting later
in the day. This reorganization allowed Staff to accomplish more work
during the day.
City Manager Comments
James Keene, City Manager, announced Palo Alto children who wrote to
Santa received a stuffed Palo Alto Fire Dalmatian dog. Beginning January
2015, Agenda packets for the Council and Council Committees would be
released on Thursdays, 11 days prior to meetings. The new Palo Alto Green
Gas Program, a voluntary program, would launch during the week. The City
hosted a free community water use forum the prior week to discuss drought-
proof water supply resources. He thanked Staff and the community for their
response to the prior week's storm warnings. Flintco executed the
settlement agreement with the City, and the surety needed to execute it as
well.
Mayor Shepherd recalled the Council spent many hours in Closed Session
regarding the contract with Flintco. She asked if no further Closed Sessions
would be needed.
Mr. Keene answered yes.
MINUTES
12/15/2014 116- 234
Agenda Changes, Additions And Deletions
Council Member Holman reported California Avenue businesses did not feel
they had been consulted regarding Agenda Item Number 22: Policy and
Services Committee Recommendation to Council for Adoption of an
Ordinance Amending Chapter 9.14 (Smoking And Tobacco Regulations) of
the Palo Alto Municipal Code to Establish New Smoking Restrictions for
Outdoor Commercial Areas, Outdoor Eating Areas, Public Events, Work Sites
and Service Locations; Include Penalty Escalation for Repeat Offenders;
Require Cigarette Butt Receptacles and Signage Immediately Adjacent and
Within Areas Covered by the Ban; and Include E-cigarettes, or extended
parking hours for the holidays.
MOTION: Council Member Holman moved, seconded by Council Member
Burt to continue Agenda Item Number 22: Policy and Services Committee
Recommendation to Council for Adoption of an Ordinance Amending Chapter
9.14 (Smoking And Tobacco Regulations) of the Palo Alto Municipal Code to
Establish New Smoking Restrictions for Outdoor Commercial Areas, Outdoor
Eating Areas, Public Events, Work Sites and Service Locations; Include
Penalty Escalation for Repeat Offenders; Require Cigarette Butt Receptacles
and Signage Immediately Adjacent and Within Areas Covered by the Ban;
and Include E-cigarettes, to a date uncertain.
Mayor Shepherd requested clarification as she had spoken with a
representative who did not indicate any issues to her.
Council Member Berman requested Staff provide information regarding
outreach to California Avenue businesses.
Council Member Klein reported Agenda Item Number 22 had to be moved
forward for the Council to consider any aspect of it.
Mayor Shepherd asked if the item could be continued once it reached the
Agenda.
Molly Stump, City Attorney, advised that the Council could consider the
Motion to continue under Agenda Changes, Additions and Deletions or
address the request for continuation when the item was called in the
Agenda.
Mayor Shepherd noted the Motion was to continue the item. The Council
could take the item up again when the item was reached in the normal order
of the Agenda.
MINUTES
12/15/2014 116- 235
Ms. Stump clarified that if the Council voted to continue Agenda Item
Number 22 at the current time, it would be continued to a later date.
Mayor Shepherd preferred to discuss continuation within the order of the
Agenda.
Council Member Holman noted the Council received an email from the
President of the California Avenue Business Association.
Mayor Shepherd stated discussion was not allowed at the current time, but
could be held when Agenda Item 22 was reached on the Agenda.
Council Member Holman noted neither she nor Council Member Burt, maker
and seconder of the Motion, were allowed to address the Motion.
Mayor Shepherd wanted to postpone the vote on the Motion until Agenda
Item 22 was reached in the order of the Agenda in order to hold a
discussion.
James Keene, City Manager, concurred with awaiting the item in the Agenda
so that Staff could clarify what had happened prior to the Council
rescheduling the item.
Mayor Shepherd tabled the item until its natural order on the Agenda.
Oral Communications
Jim Wang reported the Planning Department spent a great deal of time
meeting with him; however, the Planning Department took no action to
proactively address the issues of privacy, noise and odor.
Robert Moss thanked Mayor Shepherd and Council Members Klein and Price
for their service on the Council. They worked to improve the City and the
community.
Lisa Henderickson introduced Amy Andonian as the next President and Chief
Executive Officer of Avenidas.
Amy Andonian looked forward to working with the community and
continuing Avenidas' work in the community.
Ronna DiVincenzi appreciated the improvements being made to California
Avenue. The crosswalks were much safer. However, pedestrians along the
sidewalk were suffering lacerations from the glass in the exposed aggregate.
The new sidewalks were slippery when wet and collected dirt.
MINUTES
12/15/2014 116- 236
Consent Calendar
Mayor Shepherd noted an at-places memo that indicated Agenda Item
Number 18 should state $87,356.00 rather than $79,000.00.
Herb Borock spoke regarding Agenda Item Number 10. He did not believe a
prescreening for a development proposal was appropriate when another
application was pending for the same property. Also, it was inappropriate to
place the item on the Consent Calendar as the item should first be presented
to the Planning and Transportation Commission.
Council Member Schmid requested comment from the City Attorney
regarding Agenda Item Number 10.
Molly Stump, City Attorney, advised that the item was presented on the
Consent Calendar to allow it to be scheduled for prescreening. Staff
reviewed all relevant Code sections and believed the Council could act on
Agenda Item Number 10.
MOTION: Council Member Schmid moved, seconded by Council Member
Holman, third by Council Member XXX to pull Agenda Item Number 13:
Review of a Proposed Conditional Use Permit (CUP) for a Verizon Wireless
Telecommunication Facility at the Palo Alto Little League Ball Field, Zoned R-
1 (8000), and an Appeal of the Director’s Architectural Review Approval of
the Facility, an 18-inch Diameter, 65-foot tall Monopole/Light Pole Replacing
a 12-inch Diameter, 60-foot Tall Light Pole, and Associated At-Grade
Equipment Enclosure at 3672 Middlefield Road and Approval of CEQA
Exemption, to be heard at a later date.
Mayor Shepherd noted that absent support from a third Council Member the
item would remain on the Consent Calendar.
MOTION FAILED DUE TO THE LACK OF A THIRD
Richard Brand spoke regarding Agenda Item Number 11. He saluted the
Council for its support of the Residential Parking Permit (RPP) Ordinance. He
had not heard any negative comments regarding the RPP Program.
James McLaughlin spoke regarding Agenda Item Number 13. He supported
Item Number 13 and urged the Council to approve it. The item would
improve cellular communications and support the baseball program.
Paul Albritton, counsel for Verizon Wireless, spoke regarding Agenda Item
Number 13. He encouraged the Council to retain the item on the Consent
Calendar. It would improve service coverage in southern Palo Alto. The
MINUTES
12/15/2014 116- 237
Planning and Transportation Commission (P&TC), Architectural Review Board
(ARB), and the Planning Director and Staff approved the project. Verizon
addressed many of the issues raised by opponents to the project.
Ken Allen, President of the Adobe Meadow Neighborhood Association, spoke
regarding Agenda Item Number 13. A vast majority of the residents
supported the cell tower. The Council would have opportunities to review
any changes to the project. He urged the Council to support the item.
Gerald V. Lucha spoke regarding Agenda Item Number 13. After attending
many presentations from both AT&T and Verizon, he urged the Council to
support the item.
Joe Caporaletti spoke regarding Agenda Item Number 13. Opposition to the
project raised many imaginative fears, which were baseless. Improved
cellular coverage was needed.
Rod Creason spoke regarding Agenda Item Number 13. Verizon was
attempting to finalize the project prior to implementation of the City's
comprehensive wireless plan. He urged the Council to remove Agenda Item
Number 13 from the Consent Calendar and consider the illegality of the
previous Conditional Use Permit (CUP).
Gen Isayama spoke regarding Agenda Item Number 13. Residents hired a
planning and wireless expert and an attorney to evaluate the Verizon
application. Their reports were included in the briefing packet. City Staff
had not replied to residents' concerns. The item should not be on the
Consent Calendar.
Grace Zhao spoke regarding Agenda Item Number 13. Parents of young
children were concerned about radiation from the cell tower. She related
information that had been provided to her regarding the City's ability to
deny the application.
Charlene Liao spoke regarding Agenda Item Number 13. She requested the
Council remove Agenda Item Number 13 from the Consent Calendar and
hold a public hearing. The tower would be taller than trees in the location
and more visible than other cell towers in Palo Alto. The Council should
consider new information.
Jason Yotopallos spoke regarding Agenda Item Number 13. Moving the
tower a quarter mile away to an industrial location should not be an
inconvenience for Verizon. Verizon had technology other than DAS it could
utilize. The Council should remove the item from the Consent Calendar.
MINUTES
12/15/2014 116- 238
Ann Xu spoke regarding Agenda Item Number 13. She favored a public
hearing for further discussion of the cell tower. The proposed cell tower
posed serious health and safety issues.
Willy Lai spoke regarding Agenda Item Number 13. He opposed locating the
cell tower in a location close to schools, child care and youth athletic fields.
He urged the Council to remove the item from the Consent Calendar.
Barbara Cooley spoke regarding Agenda Item Number 13. She did not
support the location of the cell tower. In her own survey of residents, 90
percent of respondents preferred an industrial or commercial location; 75
percent preferred another location.
Kim Amsbaugh, Palo Alto Little League Board Member, spoke regarding
Agenda Item Number 13. She encouraged the Council to approve the CUP.
The ARB, P&TC and the Planning Director and Staff showed that opponents'
arguments were misguided, misinformed and misleading.
John Markevitch spoke regarding Agenda Item Number 13. He supported
approval of Agenda Item Number 13. Verizon attempted to accommodate
residents' concerns.
Don Amsbaugh, Palo Alto Little League Board Member, spoke regarding
Agenda Item Number 13. He urged the Council to retain the item on the
Consent Calendar. Palo Alto Little League worked with Verizon, City Staff
and Boards, and the community to present the proposal to the Council.
There were no grounds to deny the proposal.
Daryn Reicherter, Palo Alto Little League Board Member, spoke regarding
Agenda Item Number 13. The tower would not change the ball park. The
item should remain on the Consent Calendar.
Mark Priestley spoke regarding Agenda Item Number 13. Issues raised by
opponents to the cell tower were addressed and resolved. Postponing the
discussion would not benefit anyone.
Kristin Foss, Palo Alto Little League President, spoke regarding Agenda Item
Number 13. The focus of the ball park would not be the cell tower, as
claimed by opponents, but the games being played on the field. She
requested the item remain on the Consent Calendar, so that Palo Alto Little
League Board Members could return to providing baseball to kids.
Helen Li spoke regarding Agenda Item Number 13. She opposed the
location of the cell tower. She believed Verizon would add more equipment
at a later time. The item deserved a public hearing with the Council.
MINUTES
12/15/2014 116- 239
Fred Balin spoke regarding Agenda Item Number 7. He recalled the history
of his appeal of the project and the Council's action. Residents were
amassing baseline data of traffic and would have a valid determination of
traffic impacts from the project.
Christopher Woothman, Stanford University Project Manager, spoke
regarding Agenda Item Number 7. Stanford University staff remained
sensitive to residents' concerns; however, the project was in compliance
with mitigation measures.
Council Member Burt understood that the cell tower in Agenda Item Number
13 would become a co-location facility after approval of the project and that
the Council would have CUP discretionary approval of subsequent co-located
functions. He inquired about the Council's discretionary authority.
Cara Silver, Senior Assistant City Attorney, reported a new Federal
regulation would govern co-locations, but it was currently not in effect. The
regulation would allow the City to regulate the aesthetic impact of a co-
location. Because the application was filed prior to the regulation taking
effect, the City required the condition that the applicant would go through a
full CUP process in order to co-locate functions at that particular site.
Council Member Burt inquired whether the full CUP would apply even with
the new regulation.
Ms. Silver replied yes.
Council Member Burt asked if the Council had full discretion regarding the
type of rezoning and if the Council could make that known at the
prescreening concerning Agenda Item Number 10.
Ms. Silver advised that the Council had full authority to weigh in at the
prescreening.
Hillary Gitelman, Director of Planning and Community Environment, added
that the prescreening section of the Code indicated nothing that transpired
at that hearing would be binding. The Council would be free to offer
opinions, ideas, insights, and questions at that time; however, those
comments would not be binding on any final decision on the proposal.
Council Member Holman remarked that the City Attorney's responses
regarding Agenda Item Number 13 made her feel more comfortable with
approving the CUP. Agenda Item Number 10 was listed as a prescreening
for proposed rezoning, but the recommendation indicated a preliminary
review of the proposed project. She asked if the item would be on Consent.
MINUTES
12/15/2014 116- 240
Ms. Gitelman indicated Staff was requesting the Council concur with Staff
placing the item on the Agenda for Council consideration.
Council Member Holman inquired whether the rezoning and Comprehensive
Plan amendment or the preliminary review of the project would be placed on
the Agenda.
Ms. Gitelman reported in the context of the rezoning and Comprehensive
Plan amendment, the Council could discuss the project proposed under both
of those amendments. The prescreening request was related to rezoning
and the Comprehensive Plan amendment.
Council Member Holman asked if the project would be presented as
conceptual at the time of the prescreening.
Ms. Gitelman believed the section of the Zoning Ordinance related to
prescreening provided for conceptual review if an application had not been
filed, and a more detailed review if an application had been filed. She would
need to review that if the Council approved Staff placing it on a future
Agenda.
MOTION: Vice Mayor Kniss moved, seconded by Council Member Berman
to approve Agenda Item Numbers 3-18 with the at-place memorandum
change to Agenda Item Number 18 to change the dollar amount from
$79,655 to $87,356.
Council Member Schmid registered a no vote on Agenda Item Number 13.
3. Resolution 9480 entitled “Resolution of the Council of the City of Palo
Alto Approving and Authorizing the City Manager to Execute a Meter
Maintenance Program Agreement with the Northern California Power
Agency for a Five Year Term with an Anticipated Total Cost of
$45,000.”
4. Approve a Contract with Goodland Landscape Construction, Inc. in the
Amount of $4,441,520.11; Authorize the City Manager or his Designee
to Negotiate and Execute One or More Change Orders to the Contract
with Goodland Landscape Construction, Inc., Not to Exceed $444,151;
Approve a Contract with NOVA Partners, Inc. in the Amount of
$319,880 for Construction Management Services; and Adopt a Budget
Amendment Ordinance 5292 entitled “Budget Amendment Ordinance
of the Council of the City of Palo Alto in the Total Amount of
$1,343,047 to increase the El Camino Park Restoration Project by
$1,343,047, offset by a $246,000 transfer from the Park Development
Impact Fee Fund, a $45,000 reduction to the Bicycle and Pedestrian
MINUTES
12/15/2014 116- 241
Transportation Projects capital project, and a reduction to the
Infrastructure Reserve (IR) by $1,052,047.”
5. Grant of Easements to Santa Clara Valley Water District, Pacific Gas
and Electric Company, City of East Palo Alto and East Palo Alto
Sanitary District for the San Francisquito Creek Joint Powers
Authority’s (JPA) Initial Flood Protection Project (Highway 101 to San
Francisco Bay).
6. Approval of Amendment One to Contract with Tandem Creative, Inc. to
Extend the Contract Term Through December 31, 2016 and to
Increase the Total Compensation by $220,000 from $198,000 for a
Total Not to Exceed Amount of $418,000 to Provide Marketing Design
Services for the Utilities Department.
7. Approval of a Final Subdivision Map for the Previously Approved
Mayfield Agreement Housing Project at 1451-1601 California Avenue,
Including 68 Detached Single Family Residences and 112 Multi-family
Condo Units. Environmental Assessment: City of Palo Alto/Stanford
Development Agreement and Lease Project Environmental Impact
Report (State Clearinghouse No. 2003082103).
8. Approve a Blanket Purchase Order with Oldcastle Precast, Inc., as the
City's New Standardized Supplier of Certain Equipment for the Utility's
Electric Underground System, in an Annual Amount of $350,000 for a
Total Purchase Amount of $1,750,000 Over the Next 4.5 Years.
9. Approval of a Contract Amendment to CompuCom Systems, Inc., in
the Amounts of $194,470 for Annual Microsoft Licensing True-Up,
$70,147 for Office365, and $27,000 for a contract contingency -
Contract C12144913; and Adoption of a Budget Amendment Ordinance
5293 entitled “Budget Amendment Ordinance of the Council of the City
of Palo Alto in the Information Technology Fund in the Amount of
$291,617.”
10. 2755 El Camino Real Prescreening Request: Request by Hayes Group
Architects for Council Authorization to Schedule a City Council
Preliminary Review (“Pre-Screening”) of a proposed Rezoning from PF
(Public Facility) to CC2 (Community Commercial) and amendment to
the Comprehensive Plan land use designation for a vacant site at the
corner of El Camino Real and Page Mill Road (the vacated VTA parking
lot).
11. Ordinance 5294 entitled “Ordinance of the Council of the City of Palo
Alto Establishing a Citywide Framework for Establishment of
MINUTES
12/15/2014 116- 242
Neighborhood-Specific Residential Preferential Parking (RPP) Districts
(First Reading: December 2, 2014 PASSED: 9-0).”
12. Recommendation from Policy and Services Committee: (a) Review
and Accept Inventory of Donated City Owned Properties; (b) Review
and Make No Changes to Policy and Procedure 1-11 (Leased Use of
City Land/Facilities).
13. Review of a Proposed Conditional Use Permit (CUP) for a Verizon
Wireless Telecommunication Facility at the Palo Alto Little League Ball
Field, Zoned R-1 (8000), and an Appeal of the Director’s Architectural
Review Approval of the Facility, an 18-inch Diameter, 65-foot tall
Monopole/Light Pole Replacing a 12-inch Diameter, 60-foot Tall Light
Pole, and Associated At-Grade Equipment Enclosure at 3672
Middlefield Road and Approval of CEQA Exemption.
14. Park Improvement Ordinance 5295 entitled “Park Improvement
Ordinance of the Council of the City of Palo Alto Approving and
Adopting a Plan for Improvements to Bowden Park.”
15. Proposed Changes in Development Impact Fees: Adoption of
Ordinance Amending Chapter 16.58 Implementing New Public Safety
Facility and General Government Facility Impact Fees And Direction
to Draft Resolution Setting Initial Impact Fee Rates at 75 Percent of
Levels Identified in Nexus Study.
16. Resolution 9481 entitled “Resolution of the Council of the City of Palo
Alto Amending Resolution No. 9296, Adopted November 13, 2012, to
Extend Statutory Exception for Soil Transfers by Truck on Oregon
Expressway until September 30, 2015.”
17. Request for Authorization to Increase Existing Legal Services
Agreements with the Law Firms of: (1) Ginn & Crosby, LLP, by an
Additional $50,000 for Legal Services Relating to Construction of the
Mitchell Park Library and Community Center for a Total Not to Exceed
Amount of $250,000; and (2) Musick Peeler & Garrett, LLP, by an
Additional $20,000 for Palo Alto Baylands Golf Course Reconfiguration
Project and the San Francisquito Creek Flood Control Project for a total
Not to Exceed Amount of $85,000.
18. Adoption of First Amendment to the Lease with ADA’s Café and to
Modify the Term and Add $79,655 to Reimburse Tenant for Expenses
Related to Completion of Mitchell Park Library and Community Center.
MOTION PASSED for Agenda Item Numbers 3-12, 14-18: 9-0
MINUTES
12/15/2014 116- 243
MOTION PASSED for Agenda Item Number 13: 8-1 Schmid no
Council Member Schmid felt it was important for the community to reach
closure regarding Agenda Item Number 13. The Council's approval of the
item on Consent did not heal or resolve problems.
Action Items
19. PUBLIC HEARING: Approval of a New Fifty (50) Year Lease to
Avenidas for City-Owned Property at 450 Bryant Street to Allow the
Continued Use of the Building to Provide Senior Services.
Lalo Perez, Chief Financial Officer, reported Staff requested the Council
approve a 50-year lease with Avenidas. Staff issued notice on July 18 and
25, 2014 and November 7 and 14, 2014 in the Palo Alto Weekly. As
required, Staff notified owners of property located within 300 feet of the site.
Public Hearing opened at 7:49 P.M.
Bill Blodgett, La Comida Board President, supported and urged the Council to
approve the new long-term lease with Avenidas. He was confident La
Comida could work with Avenidas through the planning process to arrive at a
plan that met the needs of both organizations.
Herb Borock felt the expansion and proposed lease were one project and
should have been presented to the Council simultaneously.
Public Hearing closed at 7:53 P.M.
MOTION: Mayor Shepherd moved, seconded by Vice Mayor Kniss to
authorize the City Manager to approve a new, fifty (50) year lease
agreement between the City of Palo Alto and Avenidas and cancel the
existing lease for the City-owned property at 450 Bryant Street, Palo Alto.
Mayor Shepherd was pleased Avenidas would continue its service to the
community with a modern facility.
Vice Mayor Kniss congratulated Avenidas for its plans and wished it luck in
the future.
MOTION PASSED: 9-0
MINUTES
12/15/2014 116- 244
20. Palo Alto History Museum’s Request for Funding and Approval of
Transfer of Development Rights for the Roth Building.
Mayor Shepherd noted the Palo Alto History Museum Board (Board) had
worked with Staff to begin fundraising efforts in order to renovate the Roth
Building and operate a history museum. She reviewed strategies presented
to the Council.
Lalo Perez, Chief Financial Officer, advised that the Council last received an
update on March 24, 2014, when the Board requested a one-year extension
of the option to lease. The Council extended the option to June 30, 2014.
As planning approvals were set to expire at the end of December 2014, the
Board requested time in December for the Council to consider a funding
request.
James Keene, City Manager, had heard that a potential respondent to the
Transfer of Development Rights (TDR) sale had a project that was just
beyond the 500-foot boundary from his residence. While the project was
outside the radius from his residence, he felt it best to recuse himself from
the item.
Mayor Shepherd was unclear whether she could ethically participate in some
aspects of the discussion as the California Fair Political Practices Commission
(FPPC) had not responded to her question. She requested clarification from
the City Attorney.
Molly Stump, City Attorney, reported Council Members having questions
about conflicts of interest would need to make a judgment. Perhaps Council
Members would want to make a conservative judgment if they felt there
could be an issue.
Mayor Shepherd inquired whether Council Members felt they had a conflict of
interest.
Council Member Burt understood the item concerned a potential receiver for
the TDRs. He did not understand why the City or the Board would not utilize
an open bidding process. In that sense, he did not believe the Council was
determining that a given project within a geographic vicinity would be the
recipient of the TDRs. In all likelihood, the recipient would be located in
Downtown.
Ms. Stump indicated the City had a published policy and procedure on the
sale of City-owned TDRs. The policy and procedure called for a competitive
process; however, it allowed the City to set aside the results of that process
to select any bidder in the public interest.
MINUTES
12/15/2014 116- 245
A second provision allowed for an oral up-bidding process after closed bids
were initially opened. The City always could cancel all bids and rebid. If the
Council wished to obtain the best price, it could instruct Staff to issue a
Request for Proposal (RFP) that disavowed those options and accepted the
highest bidder. Council Members' assessment of the situation should be
considered in their conflict situations. Steps could be taken to insulate
anyone in terms of the selection of a particular responder. Timing of the
issuance of TDRs could have an impact on financial interests.
Council Member Burt understood from the City Attorney's clarification why
conflicts of interest could exist.
Council Member Berman recused himself from Agenda Item 20 due to
ownership of real property located just outside the 500-foot boundary from
property that could be a receiver of the TDRs.
Mayor Shepherd recused herself from Agenda Item Number 20 due to her
husband leasing offices within the 500-foot boundary.
Mr. Perez clarified that the extension expired on June 30, 2015 rather than
June 30, 2014.
Rich Green, Palo Alto History Museum President, provided updated financial
information to the Council.
Myron Freedman, Palo Alto History Museum Executive Director, had
reviewed renovation plans and costs for the Roth Building with the architect
and the contractor, and looked forward to meeting with potential donors.
The goal of the History Museum was to serve the community by making
history relevant, accessible, and useful. A history museum was the
community resource for engaging the past, and a place to encounter and
discuss common heritage. Utilizing the latest exhibit-design and technology,
the Museum would tell the City's story to inspire, to provoke questions, and
to invite participation. The Museum would have special galleries with an
array of changing exhibits, would be a destination for tours and talks, would
serve as the home of City archives, and would be an innovative resource for
teachers and students. A café and book store would enhance visits to the
Museum.
Mr. Green indicated the Board hosted a website and received significant
donations. The Board had raised more than $200,000; $168,000 from 57
new donors. In total the Museum had more than 500 donors who had given
more than $3.5 million. The Board had a fully engaged donor pool capable
of strong, ongoing funding for the Museum. The Board developed a pro
forma operating cost budget through to the year 2020.
MINUTES
12/15/2014 116- 246
Comparing revenue and donations against expenses, the Museum would be
cash positive year over year. Phase 1 of renovations would rehabilitate the
Roth Building so that it could be occupied. The Board estimated receiving $1
million from the sale of TDRs, if the Council approved a sale. The Library
Impact Fee would generate $300,000. Pledges in-hand totaled $2.5 million,
and gifts in-hand totaled $400,000. Total available funding was $4.2 million,
leaving a gap of $4.3 million. Phase 2 of renovations would build exhibits
and programs and finish archives, with a budget of $9 million. Because the
Board was reviewing methods to phase in the opening, the actual amount to
open the Museum would be less than $9 million. Operating costs were
estimated at $1.9 million through 2017. The total campaign goal was $20
million. The Board requested the Council initiate a TDR sale at market
value, consider funding repairs to the back wall in the amount of $1 million,
and consider funding 50 percent of the gap as a challenge grant.
Vice Mayor Kniss remarked that the Council would discuss designating the
Roth Building as a "Sender Site", a one-time contribution of $1 million, and a
funding challenge.
Council Member Klein asked if the City had previously agreed that funding
from the Library Impact Fee would be designated for the History Museum.
Mr. Perez advised that Staff reviewed the request. Funding from the Library
Impact Fee would support the City's archives materials; therefore, funds
could be used for that purpose.
Council Member Klein asked if the Council or Staff approved that.
Mr. Perez believed it was before the Council for approval.
Council Member Klein inquired whether the amount was correct.
Mr. Perez needed to double check the amount.
Council Member Klein asked if that amount of funds was available.
Mr. Perez answered yes.
Council Member Klein recalled that the Council had several requests for
funding of repairs to the Roth Building just after he joined the Council in
2006. Mr. Borock estimated a total amount of $1.3 million was approved for
repairs. After three or four requests for funding, he seemed to recall that
Staff indicated to the Council that no additional funds would be needed to
repair the building.
MINUTES
12/15/2014 116- 247
Mr. Perez recalled the Council placed a cap on the amount of funds, in the
range of $150,000.
Council Member Klein inquired about the need for repairs to the back wall of
the Roth Building. He had not heard of repairs being needed until Council
Member Holman or Burt mentioned it. He questioned whether Staff knew if
additional repairs were needed and, if so, why they did not inform the
Council.
Mr. Perez could not answer Council Member Klein's questions as he was not
a part of the discussions at that time. He became aware that additional
repairs were needed when Staff prepared for the March 2014 Study Session.
Council Member Klein inquired whether Staff believed the City was obligated
to repair the wall and, if so, whether the amount was correct.
Mr. Perez believed the prior Council made a decision not to fund repairs
further and to place responsibility for repairs on the Palo Alto History
Museum.
Council Member Klein asked if Staff believed the $1 million repair estimate
was reasonably accurate.
Mr. Perez did not know, and had not initiated an estimate of needed repairs
without Council guidance.
Stephanie Munoz believed the Palo Alto Historical Museum was worthy of
support. The proposal to sell TDRs seemed to be outrageous, because the
City had already given away those development rights to Palo Alto Medical
Foundation.
Herb Borock believed the regulations of the FPPC required Council Members
to state with specificity the nature of their conflicts of interest, i.e., name the
party that created the conflict of interest. The $1 million item in his memo
to the Council was part of the development agreement with the developer.
The City was responsible for buying the parcel and then demolishing the
wings. The City budgeted $415,000 to address drainage and leaks into the
basement, after which the History Museum would be responsible for repairs.
Another request of $300,000 for repairs was presented to the Council in
2007; however, Staff did not recommend the Council approve it. The
Council chose to fund $150,000 with the intention not to expend further
funds. He suggested the Council direct Staff to present a Park Dedication
Ordinance for the parcel in order to be eligible for grants from the County of
Santa Clara (County).
MINUTES
12/15/2014 116- 248
John Shenk, Thoits Brothers, supported the Museum and hoped the Council
would support it. The TDRs represented a good portion of funds needed for
the Museum.
Council Member Scharff inquired whether the History Museum would be
required to utilize prevailing wage if the City agreed to fund repairs of $1
million.
Ms. Stump reported additional research was needed as the law had changed.
A few weeks previous, the Council suspended its policy that prevailing wage
not be required for locally funded projects in response to State
requirements. Staff needed to better understand the extent to which the
Council chose to fund a construction project and the structure of that
funding in order to determine requirements. Staff would review the issue
once the Council structured the project.
Council Member Scharff found it difficult to make a decision regarding the $1
million without that information. He inquired whether the bid would be with
or without prevailing wage.
Mr. Green did not know. The cost estimate increased because of various
contingencies.
Council Member Scharff remarked that selling the TDRs would commit the
City to renovating the building according to the Secretary of Interior's
Standards. He inquired whether it was the City's practice not to do that until
it was ready to sign a construction contract.
Ms. Stump indicated there was not a lot of actual history to report. Various
people had pointed out that the City made statements of its intention to
restore the historic resource in a way that was consistent with requirements.
It was another matter to create a TDR that was constructed in another
project and created a binding commitment for historic renovation and
seismic work. A statement of intent could have more flexibility in terms of
interpretation, application, and timing.
Council Member Scharff asked if the City could refuse to sell the TDRs so as
not to lock the community into retaining the Roth Building as a historic
structure and not have to renovate it to the Secretary's standards.
Ms. Stump did not have an example where the City had made this type of
commitment this early in a project. One other City-owned project was
renovated using a private entity; the Sea Scout Building. That question was
not raised until late in the project. She did not believe those TDRs had ever
been transferred.
MINUTES
12/15/2014 116- 249
Council Member Scharff asked if proceeds from the sale of TDRs would be
placed into a fund and not used for maintenance or operating expenses.
Ms. Stump reported the Code provided proceeds would be placed in a fund
and the funds would be directed to the site that generated them in the first
instance. Leftover funds could go elsewhere.
Council Member Scharff felt something had to be done with the building.
The disadvantage of selling TDRs would be a commitment to renovate the
building.
Gail Woolley commented that the building was listed on the National Register
and had to be renovated.
Council Member Scharff reiterated that the commitment would be to
renovate the building to the Secretary's standards.
Ms. Stump explained that Staff described a series of issues and factors for
the Council to consider. Those were policy questions. Staff did not make a
recommendation or provide a set of options. The History Museum requested
the item be presented to the Council. Perhaps questions were best directed
to them.
Council Member Scharff wanted to understand the City's options.
Mr. Green advised that the requirement to renovate the Roth Building was
established in the SOFA 1 (South of Forest Avenue) agreement.
Council Member Scharff remarked that if the Board raised sufficient funds
through the challenge grant, it would have a shell of a building and would
need to raise an additional $9 million to develop exhibits and programs. The
Board did not have a record of being able to raise $9 million, let alone
another $9 million.
Mr. Green had strong support from the donor community, some of whom
were eager to see the outcome of the Roth Building. Calculations based on
resources of the donor pool indicated the Board could raise more than $10
million. The Board felt comfortable that they could raise the money.
Council Member Scharff inquired about a projected opening date for the
Museum.
Mr. Green responded September 2016.
Vice Mayor Kniss understood the building was listed as a historic building
and would have to be renovated to the Secretary's Standards.
MINUTES
12/15/2014 116- 250
Council Member Price asked if there had been an update of the structural
engineering and architectural estimates.
Mr. Green reported the estimates were refreshed that day. Estimates were
realistic and based on escalation of fees and costs as estimates were first
prepared two years previously.
Council Member Price requested a description of the formula and
assumptions used in projecting increases in operating costs.
Mr. Freedman advised that the Board established its fundraising capability in
the early going while working with consultants to develop historical
resources and connections to the educational community. As the project
proceeded, the Board would be more specific about taking care of collections
and obtaining resources for storage and registration of collections. The
Board structured it to identify support, develop resources of history and
education, and then identify people and resources to execute exhibits.
Council Member Price inquired about options for funding in addition to the
request to the City.
Bob Woods, Development Counsel for the Palo Alto History Museum,
explained that donors were interested in the building and in the Museum. Of
the approximately 500 donors, 115 made multiple gifts over multiple years.
These people were good prospects for planned giving. Several planned gifts
were needed to help an organization build its operating costs, and then build
planned gifts into an endowment. If philanthropists made a gift to the
campaign, they would protect that gift by assuring ongoing support for
several years.
Council Member Price commented that the value of TDRs were a function of
market value, which changed over time. She inquired whether the City
could set a threshold amount for a TDR square footage fee.
Mr. Perez replied yes. The City set $90 as the minimum the last time it
attempted to sell TDRs.
Council Member Price asked if Staff could provide a range for a square
footage TDR fee at the current time.
Hamid Ghaemmaghami, Real Estate Manager, reported the Municipal Code
required the City to perform an appraisal and set a price before marketing
TDRs.
MINUTES
12/15/2014 116- 251
Council Member Price asked if it would be a while before tangible numbers
were known.
Mr. Ghaemmaghami could conduct some research into the market to identify
a preliminary number. An appraisal could take some time.
Council Member Holman inquired whether the demolition of the wings at the
back of the building was part of the SOFA 1 plan, before a potential tenant
was identified.
Mr. Ghaemmaghami answered yes.
Council Member Holman was not aware of the City allowing any TDRs for the
site or the block. She asked if her knowledge was correct.
Mr. Ghaemmaghami replied yes. The City last sold TDRs in 2006. Those
TDRs belonged to the Children's Library and sold for about $95 per square
foot.
Council Member Holman did not believe County grants were available for the
History Museum.
Gail Woolley indicated County grants were available. The problem was the
requirement that a project be completed within the following year. The
amount of grants was not large, perhaps $50,000-$100,000. The Museum
was not in a position to apply for County grants at the current time.
Council Member Holman noted the City did not have an estimate for repairs
and Staff did not have restoration plans that met the Secretary's Standards.
She inquired whether the Museum's cost estimates and plans would suffice
to answer Staff's concerns and questions.
Ms. Stump reported the plans that were approved through City processes
would satisfy the legal requirements. Whether they formed a basis to
proceed was a policy discussion for the Council.
Council Member Holman asked if the Museum's plans had been approved by
the Historic Resources Board.
Mr. Ghaemmaghami concurred the plans had been approved. However, the
Conditional Use Permit (CUP) expired at the end of the year. The Museum
would need to go through the process again to regain the CUP.
Council Member Holman inquired about the effect of restoring the building
on Phase 2 fundraising.
MINUTES
12/15/2014 116- 252
Mr. Freedman stated restoration would provide momentum for fundraising.
Restoration plans were drawn in a way that would allow the Museum to
occupy and utilize the building fairly quickly. Once the Board began building
programs, it would be able to demonstrate to the donor community the use
of the building and its future as a museum.
Mr. Witts reported prospective donors indicated that if the Board could
complete the building, then they would fund the Museum. Because the
Board had always planned in phases, the idea of phased fundraising would
work.
Council Member Holman asked about the source of the $1 million estimate
for repairs at the back of the building.
Mr. Freedman advised that the contractor provided the estimate for that
work. The actual estimate was in the range of $700,000 prior to
contingencies.
Council Member Burt inquired whether at least one project, the Thoits
project, was already approved but could not proceed without obtaining
TDRs.
Mr. Perez did not know.
Ms. Stump understood a project on University Avenue was approved
contingent upon obtaining TDRs.
Council Member Burt reiterated that the 500 University project had been
approved, but it did not have the TDRs that would allow it to build the
square footage as approved.
Hillary Gitelman, Director of Planning and Community Environment, noted
the project was approved conditioned upon obtaining 10,000 square feet of
TDRs.
Council Member Burt asked if the non-historic wings of the Roth Building
were razed to complete the space for Heritage Park.
Mr. Perez concurred.
Council Member Burt asked if the same repairs would be needed if the
building was returned to the City.
Mr. Ghaemmaghami responded yes.
MINUTES
12/15/2014 116- 253
Council Member Burt inquired whether the Council should consider the
recommendations individually or as a group.
Vice Mayor Kniss preferred to consider them individually.
MOTION: Council Member Burt moved, seconded by Vice Mayor Kniss to
direct Staff to initiate designating 300 Homer Street, known as the Roth
Building, to be eligible as a “Sender Site” in the Transfer of Development
Rights (TDR) program.
Council Member Burt recalled Mr. Green's statement that in May 2012 the
City designated the Roth Building as a "Sender Site."
Ms. Stump noted according to Mr. Green the document being referred was a
draft and had not been executed. Designating the property as a "Sender
Site" was before the Council. If the Council adopted the recommendation,
the next step would be to perform an appraisal and place an authorization to
initiate the sale on the Council's Consent Calendar.
Mr. Ghaemmaghami clarified that Staff would return to the Council for
approval of a Resolution designating the location as a "Sender Site" prior to
performing an appraisal.
Council Member Burt inquired whether that could occur expeditiously.
Mr. Ghaemmaghami would need to place the Resolution on the Council's
Agenda.
Vice Mayor Kniss believed the location was clearly a "Sender Site" in terms
of the Ordinance. She asked if the City could negotiate a minimum amount
for the TDRs.
Mr. Ghaemmaghami reported Staff would need to perform some market
research to set a minimum in the process of the RFP.
Vice Mayor Kniss asked if the TDRs would go out to bid.
Mr. Ghaemmaghami advised that the RFP would set the minimum price that
Staff believed was appropriate.
Vice Mayor Kniss inquired whether the bid process would be open to many
people.
Mr. Ghaemmaghami indicated the TDR sale had to be open bidding.
MINUTES
12/15/2014 116- 254
Vice Mayor Kniss asked if the City preferred the location be designated as a
"Sender Site" rather than the History Museum utilize the building.
Ms. Stump remarked that determining the location to be a "Sender Site" was
a policy question for the Council. The Council did not have to designate it as
a "Sender Site."
Vice Mayor Kniss commented that the historical building would need to be
brought up to the Secretary's Standards in order to use it.
Ms. Stump advised that was a separate issue from the sale of TDRs.
Council Member Schmid understood that the TDR market had been very
active. He inquired whether the City kept records of TDR sales and their
values.
Mr. Stump reported Staff had made some efforts to compile a complete
record. The Code contained requirements to document both sending and
receiving sites for TDRs. Staff was being careful about recording those now.
Council Member Schmid noted TDR sales were registered with the Planning
Department, and asked about the time period Staff had been documenting
sales.
Ms. Stump did not know historically. Current Staff was very careful about
documenting and recording TDRs.
Mr. Ghaemmaghami added that the value of TDRs exchanged in the
marketplace probably had not been reported to the City. People did not
disclose the sale price of TDRs.
Council Member Schmid commented that Staff might have the number of
square feet transferred but not the value. He inquired whether there was a
list of qualified sites even if they had not been approved.
Mr. Perez could not answer that.
Council Member Schmid asked if Staff could estimate the market for TDRs
with no information.
Mr. Perez indicated Staff had received a few calls over the past few years
inquiring about the City going to market with TDRs. Therefore, Staff knew
there was some demand for TDRS.
MINUTES
12/15/2014 116- 255
Mr. Ghaemmaghami had heard from private developers that they were
having a hard time locating TDRs. People who had TDRs were not selling
them. He believed there was an active market for TDRs.
Council Member Schmid inquired whether the City controlled; in any way,
the private eligibility for TDRs.
Mr. Ghaemmaghami was not aware of any City controls.
Council Member Schmid asked if it was a private decision to provide a TDR.
Mr. Ghaemmaghami replied yes, to provide or to sell them.
Council Member Schmid inquired whether the City had a list of sites eligible
to provide TDRs.
Mr. Ghaemmaghami was not aware of such a list. The Planning Department
did research the issue, and he could provide an answer at a later time.
Council Member Schmid found it difficult to estimate a value without
knowing the market. He asked if there was currently a hold on TDRs.
Mr. Ghaemmaghami clarified that the City was holding its TDRs. There had
been a few transactions involving privately owned TDRs. People were
looking for TDRs and having a hard time finding them.
Council Member Schmid recalled the Council changed TDRs to exclude
parking exemptions. He inquired about the impact of that change on the
value of TDRs.
Mr. Ghaemmaghami reported TDRs that applied to parking had a much
higher value. TDRs currently in the marketplace would be used for
additional square footage, not parking. The market had driven the price for
those high as well.
Council Member Schmid requested Staff provide some background
information as to TDR value.
Mr. Ghaemmaghami would do so.
Council Member Klein asked why Ms. Gitelman was in the audience rather
than at the table answering questions.
Hillary Gitelman, Director of the Planning and Community Environment, did
not have a lot of experience or information about the current project or with
the TDR program.
MINUTES
12/15/2014 116- 256
The City permitted the creation of development rights from certain
categories of historic resources. She could not provide any additional
information regarding TDRs.
Council Member Klein asked if anyone in the Planning Department had
additional information.
Ms. Gitelman stated additional Staff was not present.
Council Member Klein suggested Ms. Gitelman call or text the appropriate
Staff.
Ms. Gitelman could not reach Staff at 9:20 in the evening.
Council Member Klein viewed the History Museum's requests as a
comprehensive list of demands and preferred to respond to those requests
comprehensively rather than individually. The requests were contrary to the
previous agreement negotiated with the History Museum. The History
Museum was requesting a considerable amount of financing which was
neither appropriate nor in line with the previous agreement. Funding for the
History Museum ranked very low in polling conducted for the Infrastructure
Plan. He was not impressed with the amount of funds raised by the Board in
2014. He was concerned that this would not be the Board's last request to
the City for funds and could not support any of the three requests. Perhaps
the Museum of American Heritage should be involved, as they had a record
of success. The Council should not designate the property as a "Sender
Site." Selling development rights meant an increase in density at a
particular site. The Council and public had indicated there should be less
building. An appropriate Motion would be to deny the requests and instead
grant the History Museum Board an additional 12 or 18 months to develop a
program.
Council Member Holman stated the Ordinance was passed to support the
retention, restoration, and rehabilitation of historic buildings. The Ordinance
was conceived because it was a way to take advantage of private money to
promote a public good. Comprehensive Plan Policies L-51, L-52, L-53, and
L-57 encouraged preservation and rehabilitation of historic resources.
Selling TDRs did not increase already allowed density. A prior Council set a
minimum sale price for City-owned TDRs of $90 per square foot when the
Ordinance came forward. With respect to lack of public support for the
History Museum in polling, it was often difficult to obtain funding for the
arts.
Council Member Scharff expressed concern that the City would not receive
fair value for the TDRs because the market was not transparent.
MINUTES
12/15/2014 116- 257
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to set a minimum of not less than $200 per
square foot for the TDRs.
Council Member Burt asked if Council Member Scharff was confident the City
could obtain $200 per square foot.
Council Member Scharff replied yes.
Council Member Schmid calculated the current market value per square foot
as approximately $8 million for 10,000 square feet; therefore, $200 per
square foot seemed reasonable.
Council Member Klein felt the Council was doing exactly what it criticized
developers for doing: attempting to maximize its real estate interests. The
Council did not have to sell TDRs to fund repairs to the Roth Building. The
Motion set a dangerous precedent and was inconsistent with the Council's
ideas of limiting development.
Council Member Price would support the Amended Motion even though there
was a great deal of uncertainty.
Council Member Holman reiterated that the TDRs would return to the City if
the sale price did not meet the minimum of $200 per square foot.
MOTION AS AMENDED PASSED: 6-1-2 Klein no, Berman, Shepherd not
participating
Vice Mayor Kniss indicated the next item for consideration was a one-time
contribution of $1 million toward the cost of rehabilitation and seismic
retrofitting of the building. She inquired whether rehabilitation and seismic
retrofitting was needed whether or not the History Museum project came to
pass.
Mr. Ghaemmaghami responded yes.
Vice Mayor Kniss recalled Mr. Green's statement that the cost estimate for
repairs was closer to $700,000 and contingencies increased the estimate to
$1 million.
Mr. Green clarified that the $1 million estimate applied to repairs for the
back wall of the building. It did not apply to rehabilitation and seismic
upgrades of the entire building.
Vice Mayor Kniss assumed the back wall would have to be repaired.
MINUTES
12/15/2014 116- 258
Mr. Green explained that the back wall supported the entire building.
MOTION: Council Member Burt moved, seconded by Vice Mayor Kniss to
make a one-time contribution of up to $1,000,000 toward the cost of
rehabilitation of the back wall including the seismic rehabilitation of the City
owned Roth Building located at 300 Homer Avenue, in conformance with
historic standards.
Ms. Stump inquired whether the Council wished to state in the Motion that if
rehabilitation work was completed for less than $1 million, then the balance
of funds would be returned to the City or expended on the remainder of
needs for the facility.
Vice Mayor Kniss indicated the amount would be up to $1 million.
Council Member Schmid inquired about the source of funds should the
Council choose to supply them to the History Museum.
Mr. Perez suggested the Council could reprioritize the Capital Improvement
Program (CIP) to accommodate funding for the History Museum or withdraw
approximately $661,000 from the Budget Stabilization Reserve (BSR) Fund.
Council Member Schmid asked if either of those alternatives would affect the
Council's recent pledge to expend a certain amount for infrastructure
projects.
Mr. Perez advised that the Council would have to reprioritize the projects not
contained on the list of infrastructure projects.
Council Member Schmid requested examples of projects not on the list.
Mr. Perez needed to review that information and get back to Council.
Council Member Klein believed the Motion would withdraw funds from
projects carefully considered for funding or from the Budget Reserve. The
Council did not have to fund repairs at the current time. The previous
arrangement was for the History Museum to pay for any repairs after 2007-
2008.
Council Member Price would support the Motion. She questioned whether
the Motion should include the source of funding.
Vice Mayor Kniss understood Staff addressed funding sources.
Mr. Perez provided options for Council consideration.
MINUTES
12/15/2014 116- 259
Vice Mayor Kniss asked if Council Member Price wished to include a specific
funding source.
Council Member Price answered yes. She requested Staff repeat the
options.
Mr. Perez indicated funds could be taken from the BSR Fund if the Council
changed the goal from 18.5 percent. If the goal remained at 18.5 percent,
approximately $661,000 would be available. A second source could be
infrastructure funds; however, Staff would have to reprioritize projects
included in the Infrastructure Plan for Council approval.
Council Member Price preferred not to withdraw funds from the
Infrastructure Reserve Fund. She inquired whether $500,000 could be
withdrawn from the Operating Reserve and $500,000 from another source.
Mr. Perez replied yes, a combination of sources was possible.
Council Member Burt advised that the City owned the building and would
realize appreciation of the asset resulting from improvements. Mr. Perez
had clarified that funds would not be taken from the Infrastructure Funding
Plan. Council Member Klein's arguments were inconsistent with his previous
support of City Hall renovations.
MOTION PASSED: 6-1-2 Klein no, Berman, Shepherd not participating
Vice Mayor Kniss advised that the next topic for discussion was a funding
challenge including City funds of $1.65 million. She inquired about the
source of City funds for the $1.65 million.
Mr. Perez explained that the Infrastructure Funding Plan did not address all
infrastructure projects. In addition, there were concerns about the accuracy
of cost estimates for infrastructure projects. The Council would have to
reprioritize infrastructure projects in order to fund the $1.65 million. He was
concerned about lowering reserve thresholds as the City prepared to issue
significant debt.
Mr. Green noted the $1.65 million amount would be reduced by a high
valuation of the TDR sale. The Museum requested the City fund 50 percent
of the gap, not a specific amount of $1.65 million.
Council Member Scharff understood Mr. Perez to indicate the City did not
have sufficient funds to expend $1.65 million. He asked when the History
Museum expected to receive funds from the City.
MINUTES
12/15/2014 116- 260
Mr. Green planned to raise funds prior to expiration of the lease option on
June 30, 2015, unless the option was extended.
Council Member Scharff inquired whether the Board would prefer $1 million
for repairs to the back wall or $1.65 million for a challenge grant.
Mr. Green would prefer funding for the challenge grant. Perhaps funds for
repair of the wall could be bound into a challenge grant.
Council Member Scharff questioned whether the Council or the Museum
needed to incorporate funds for wall repairs into a challenge grant.
Vice Mayor Kniss asked if Council Member Scharff meant the challenge grant
was not due until the History Museum had raised necessary funds.
Council Member Scharff understood under the previous Motion that City
funds would have to be utilized for repair to the back wall.
Mr. Green explained that the challenge grant was intended to close the
remaining funding gap. The gap would be determined by the value of the
TDR’s.
Council Member Burt advised that the History Museum Board could
determine the best method to frame marketing of funds received from the
City.
MOTION: Council Member Burt moved, seconded by Vice Mayor Kniss to
direct Staff to defer consideration of Staff Recommendation Number 3:
Issue a funding challenge where Palo Alto Historical Museum (PAHM) would
solicit private matching donations if the City offered an additional $1.65
million toward the project cost.
Council Member Burt looked forward to Staff's determining whether
additional funding for the History Museum could be included in the Fiscal
Year 2016 CIP.
Council Member Holman believed the Staff Report lacked clear information
regarding potential funding sources.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to direct Staff to return with potential funding
sources that would be within FY 2016 Capital Improvement Program (CIP),
and to add that Staff is to also provide an update on the TDR sale, and
update on the status of History Museum fundraising.
MINUTES
12/15/2014 116- 261
Council Member Scharff inquired whether Staff was directed to return with
potential funding sources.
Council Member Burt wanted Staff to provide alternatives including not
funding the History Museum's request.
Vice Mayor Kniss reiterated that the Council could choose not to fund the
request.
Council Member Schmid requested Staff be directed to provide an
assessment of the value of TDRs along with potential funding sources. As
discussed earlier, the value of TDRs could be greater than $1 million.
Mr. Perez inquired whether the Council would also like an update on History
Museum fundraising when Staff returned with information regarding TDRs
and funding sources.
Council Member Burt answered yes.
Council Member Price would support the Amended Motion. She expressed
concerns regarding the History Museum's assumptions for long-term funding
strategies. With the additional information provided by Staff, the Council
could better assess the situation.
MOTION RESTATED: Council Member Burt moved, seconded by Vice
Mayor Kniss to direct Staff to:
Defer consideration of number 3: Issue a funding challenge where Palo
Alto Historic Museum (PAHM) would solicit private matching donations
if the City offered an additional $1.65 million toward the project cost;
and to direct Staff to return with potential funding sources for FY 2016
CIP for consideration, an update on the TDR sale, and an update on
the status of the History Museum fundraising.
MOTION AS AMENDED PASSED: 7-0 Berman, Shepherd not participating
Council Member Holman explained that preparation of the FY 2016 Budget
would begin in early 2015. The Roth Building was designed by Birge Clark,
whose sons had been present at the meeting.
The Council took a break at 10:05 P.M.
James Keene, City Manager, inquired whether he could release Staff present
to provide information for Agenda Item Number 22 as he could provide
information for Council discussion.
MINUTES
12/15/2014 116- 262
If the Council felt discussion of Agenda Item Number 21 would require only
15-20 minutes, then Staff for Agenda Item Number 22 could remain.
Mayor Shepherd asked if the City Manager was recommending the Council
postpone Agenda Item Number 22.
Mr. Keene answered no. He was requesting permission for Staff to leave the
meeting.
Council Member Burt suggested postponing Agenda Item Number 22 to
January 2015. In that time, Staff could perform outreach to California
Avenue businesses.
Council Member Scharff wanted to discuss Item Number 22.
MOTION: Council Member Burt moved, seconded by Council Member
Schmid to move Agenda Item Number 22: Approval of the Proposed
Grocery Store Tenant (College Terrace Market) Within PC 5069 (College
Terrace Centre) Based on the Finding that the Proposed Grocery Tenant
Would Likely be Comparable in Quality of Products and Services as JJ&F as it
Existed and Operated on December 7, 2009 at 2180 El Camino Real, to
January 2015.
Council Member Holman felt outreach to California Avenue businesses was
appropriate.
Council Member Berman requested Staff comment on outreach to the
California Avenue Business District.
Mr. Keene believed Staff did perform outreach; however, few if any
businesses responded to that outreach. The Council wanted to feel satisfied
that it had heard from California Avenue businesses. Changes to parking
were not relevant to the item.
Council Member Berman clarified that Staff did attempt outreach to the
California Avenue Business District.
Council Member Scharff reported the owner of the Cuban restaurant wished
to provide a smoking area for his employees and requested a provision be
included in the Ordinance. He believed California Avenue businesses were
provided with outreach.
Mr. Keene advised that an at-places memo corrected the Ordinance to
extend beyond shopping centers to include shopping districts. Outreach to
business owners located on El Camino Real or other areas that could be
affected by the Ordinance had not been performed.
MINUTES
12/15/2014 116- 263
Council Member Price believed the Council had sufficient information to
make a decision.
Council Member Klein concurred with comments made by Council Members
Scharff and Price. In addition, continuing an item because someone
indicated he had not received notice was a bad precedent.
MOTION FAILED: 4-5 Holman, Burt, Berman, Schmid yes
Mayor Shepherd reported Agenda Item Number 22 would remain on the
Agenda. The question was whether Staff could be released.
Mr. Keene requested Mr. Bobel remain and determine any other Staff that
should remain.
21. Approval of the Proposed Grocery Store Tenant (College Terrace
Market) Within PC 5069 (College Terrace Centre) Based on the Finding
that the Proposed Grocery Tenant Would Likely be Comparable in
Quality of Products and Services as JJ&F as It Existed and Operated on
December 7, 2009 at 2180 El Camino Real.
Mayor Shepherd indicated the item would complete the Planned Community
(PC) Ordinance granted in January 2010. On December 1, 2014, the Council
determined the proposed tenant would not be comparable in quality of
products and services to the former JJ&F Market. Also the Council requested
modifications so that the owner and applicant could contract with an
experienced grocer, and the Council imposed daily penalties should the
grocer/operator cease operations.
Hillary Gitelman, Director of Planning and Community Environment, reported
the College Terrace Centre Project (Project) was approved in January 2010
as a PC Zoning project. The outstanding issue was whether the City would
approve the grocery store tenant as being comparable in quality of products
and services to JJ&F. On December 1, 2014, the Council explicitly stated its
requirements to make the findings that the proposed tenant was
comparable. Staff recommended the Council adopt the current tenant
proposal and authorize the City Manager to execute the Covenant regarding
penalties. The at-places memo did not make any substantive changes.
Brian Spiers, Applicant, advised that funds were available to complete the
Project. Brian Spiers Development was the managing member of College
Terrace Centre LLC. The Applicant clearly understood that the grocery
tenant must be operating prior to any other allowed commercial uses. A
letter from the City Attorney's Office dated December 13, 2013 indicated the
grocery store lease was approved for purposes of obtaining building permits.
MINUTES
12/15/2014 116- 264
On December 1, 2014, the Council rejected the proposed operator for the
grocery space. The Applicant assigned the lease to Miki Werness and his
investor team. Mr. Werness was an experienced grocery store operator who
could provide a grocery store comparable to or better than JJ&F Market. The
Applicant reviewed Mr. Werness' personal financial statements as well as pro
forma information for the store and determined that he was a great choice.
Mr. Werness' business plan focused on products and services to be provided
to the community. Ultimately College Terrace Centre LLC's responsibility
was to maintain a grocery tenant on the property in accordance with the PC
Ordinance. The Applicant believed it was presenting a grocery tenant that
exceeded the requirements of the PC Ordinance. Further delays could result
in significant financial burdens for the Applicant.
Miki Werness remarked that the landlord supported the tenant with
reasonable rent. Other advantages included a smaller store footprint,
frontage on El Camino Real, and outdoor space for seating. The grocery
store would provide conventional products, organic products, a deli, meats,
fish, a bakery, and a variety of produce. Management staff had experience
in independent markets.
Nancy Peters wished to ensure a public gathering space continued should
the grocery store fail. She questioned whether the Covenant could include
language that the lease would revert to the City at no cost if the space
remained vacant after a specified period of time.
William Ross suggested Staff perform due diligence with respect to the
current proposed tenant. The provision that the filing of a lawsuit rendered
the Covenant unenforceable defeated the purpose of the Covenant. The
appropriate measure of security for the deal was a performance bond or a
letter of credit in the amount of rent realized on an annual basis without
discount.
Robert Smith expressed concern regarding changes taking place in the
business. He understood the PC would exist in perpetuity, but that should
be clarified.
Robert Moss urged the Council not to approve the proposed tenant because
of the lack of information. Approving a large office structure in exchange for
a business was a lousy idea. A $2,000 per month penalty was trivial.
Stephanie Munoz agreed it was a poor idea to have a grocery store as a
public benefit. She recommended the Council scrutinize the language of the
Covenant.
MINUTES
12/15/2014 116- 265
Margaret Heath wished to ensure that the public received a fair return on the
PC; that return was a solid replacement for JJ&F. She questioned Mr.
Werness' grocery experience.
Fred Balin stated more information was needed from Mr. Werness and
questioned whether the Restrictive Covenant was enforceable. The Council
should consider a letter of credit. The Council should not approve the
proposed tenant until the Covenant was corrected.
Annette Portello Ross suggested the Council ask thoughtful, community-
sensitive questions about College Terrace Centre. The Council needed
updated financial information.
Doria Summa questioned the relationship among Mr. Werness, his partners,
and the Applicant; whether the Applicant could provide and maintain a
grocery store equivalent to the community benefit; and the amount of time
that penalties would be accepted in lieu of a public benefit. The Council
should provide a plan for expending penalty fees if such were collected and
should link penalties to the Consumer Price Index.
Diane Finkelstein was concerned about the City enforcing the comparability
provision of the Ordinance and the lack of financial information. The
language of the Covenant was unrealistic and unenforceable.
Jeff Lewinsky suggested the Council better define "fully ceases to operate."
The penalty clause did not define grocery operations required to avoid the
penalty. The Covenant should contain language that the grocery store
would not convert to a private workspace for employees of the office
complex. The proposed penalty should increase with inflation and should be
due whether or not the City collected it. The City should inspect more than
once a year. The agreement was invalid if a court entered an order against
the grocery store.
Lydia Kou noted Staff recommended approval of the proposed tenant; yet,
residents hesitated to embrace Mr. Werness. The Applicant did not search
for or propose a lease with successful Chinese, Korean, Persian, or Indian
grocers.
Ms. Gitelman explained that the PC Project had been approved with a public
benefit of a grocery store and some BMR units. The City could only change
the public benefit by changing the PC Ordinance. The Covenant
memorialized a voluntary condition of approval. The penalty was intended
to be a significant disincentive for leaving the tenant space vacant if the
market went out of business. Collecting a penalty of $2,000 per day did not
seem fair if a court enjoined the market from operating.
MINUTES
12/15/2014 116- 266
The PC Ordinance stated the market had to serve the neighborhood and
could not degenerate into a convenience mart.
Cara Silver, Senior Assistant City Attorney, clarified that the provision
regarding a court enjoining the grocery store from operating did not
invalidate the entire agreement. It only set aside the penalty if the grocery
store went out of business due to a court injunction. This type of provision
applied at the beginning of implementation of a Covenant. The provision
could be modified. The question of a substitute public benefit should a
grocery store fail was not before the Council.
Mayor Shepherd recalled that the first public speaker wanted guarantees of
a public benefit if the grocery store ceased operations. She asked if the
Covenant would remain in effect in perpetuity or until the Council changed
zoning.
Ms. Silver clarified that the Covenant remained in effect for the useful life of
the improvements, not in perpetuity.
Mayor Shepherd inquired whether the Applicant could request another use
for the site if improvements failed.
Ms. Silver explained that the Covenant would go away at the end of the
lifespan for improvements to the buildings.
Council Member Scharff believed the Applicant followed the Council's
instructions set forth on December 1, 2014.
MOTION: Council Member Scharff moved, seconded by Vice Mayor Kniss
to:
1. Approve the grocery store tenant of the development at 2180 El
Camino Real, finding that the proposed tenant is likely to be
comparable in quality of products and service to the former JJ&F
Market as it existed and operated on December 7, 2009; and
2. Authorize the City Manager or his designee to execute the Restrictive
Covenant (Attachment C) to ensure the continued viability of the
grocery store community benefit.
Council Member Scharff felt Mr. Werness could provide the type of grocery
store the community sought. Penalties were severe at $2,000 per day. The
Applicant met its obligation, and the Council should approve the proposed
tenant.
MINUTES
12/15/2014 116- 267
Vice Mayor Kniss noted the PC Ordinance was valid, even though the current
Council probably would not have approved it. She hoped that the
determination of both the neighborhood and Mr. Werness would result in
success.
Council Member Klein remarked that the proposal met the requirements of
the PC Ordinance. He proposed the penalty be indexed for inflation.
Council Member Scharff asked if the Applicant would accept the change.
Mr. Spiers accepted the change.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER that the penalty described in Paragraph Number 2
of the Covenant be appropriately indexed for inflation on an annual basis,
the precise language to be determined by the City Attorney.
Council Member Holman wanted to focus on whether the proposed tenant
was valid. There was a lack of information regarding Mr. Werness and his
ability to attract vendors because of his prior bankruptcy case. Nothing in
the documents committed the developer to providing 40 parking spaces
dedicated to the grocery store. The Covenant should include a description of
JJ&F Market rather than merely describing it as a full-service grocery store.
The Council needed to review a business plan. She questioned whether the
provision regarding fully ceasing operations would ensure that the public
benefit remained in place. She inquired about the reason for not including
the language for a full service grocery comparable to JJ&F in the penalty
provision. She inquired about the purpose of the language regarding a
lawsuit. She would not support the Motion.
Harry Fox, Applicant's Counsel, reported Paragraph 2 of the Covenant
specifically stated that the penalty applied each day after each six-month
period that the grocery store was not in operation in accordance with the
terms of the PC Ordinance. The Covenant specifically referred to the terms
of the PC Ordinance. The intent was to capture the language of the PC
Ordinance regarding comparability to JJ&F.
Council Member Holman felt the Covenant should require the ongoing
operation consistent with JJ&F as the PC Ordinance did not have that
language.
MINUTES
12/15/2014 116- 268
Mr. Fox believed the PC Ordinance did require that. The PC Ordinance
specifically stated the limitations on land use were a grocery store within the
development for the useful life of the improvements; a neighborhood
grocery store rather than a convenience market, and the tenant was subject
to prior approval of the City.
Council Member Holman remarked that there was a big gap between a
grocery store and a convenience market. The other language concerned
approval for the building permit, not for the ongoing operations being
consistent with JJ&F.
Mr. Fox indicated the language of consistent with JJ&F did not reference the
building permit. It was not a condition of the building permit. It was a
reference to any grocery tenant that was a party other than JJ&F.
Ms. Silver interpreted the continuing obligation to have a grocery store as
the tenant would function as a grocery store and not revert to a convenience
mart. Mr. Werness wanted to provide a market that would respond to
changing community needs. Including language in the Covenant to require
the grocery store to be modeled on JJ&F might not serve the Project well
over time. However, that was a policy decision for the Council.
Mr. Spiers had dedicated 40 parking spaces to the market space, and that
information was contained in documents with the grocery store. The
viability of the grocery store was important to the Applicant for many
reasons. The grocery store would pay approximately $250,000 a year in
rent once it was open and successful. If it is closed, the Applicant would be
fined $2,000 a day or $720,000 a year in addition to the loss of $250,000 in
rent. The Applicant had tremendous incentives to keep the grocery store
open and to vet the proposed tenant. The only permitted use for the space
was a grocery store; therefore, the Applicant had no other options.
Mr. Werness accepted full responsibility for the failure of his previous
grocery store. He had done business with the same vendors for over 30
years. After he filed bankruptcy, those vendors told him they would
continue to do business with him. He received a letter from one of the
largest wholesalers in California, stating it would be happy to do business
with him again.
Council Member Schmid could not approve the proposed tenant. The
Applicant accepted responsibility for the public benefit and had the same
incentive as the City to provide a successful grocery store. The City
Attorney indicated the Covenant was acceptable with respect to
enforcement. He supported a cost of living increase for the penalty.
MINUTES
12/15/2014 116- 269
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to add to the terms of the PC Ordinance that
there will only be six months of non-penalty every five years.
Mayor Shepherd inquired whether the Applicant would accept the additional
provision.
Mr. Spiers requested clarification of the provision. He asked if a subsequent
tenant would need to sign a minimum five-year lease.
Council Member Schmid explained that if one grocery tenant went out of
business, the Applicant would have six months to replace the tenant. A
penalty would not be imposed during that six-month period. The City would
provide only one-six-month period every five years free of penalty. He
wanted to ensure the Applicant was confident a subsequent tenant would be
successful.
Mr. Spiers inquired whether Council Member Schmid was suggesting the
Applicant utilize the full six months to select another tenant.
Council Member Schmid indicated the Applicant could utilize two, three, or
six months.
Mr. Spiers reiterated that the store could be vacant without a penalty only
six months in one five-year period. That sounded reasonable; however, he
hesitated to add more safeguards to the ones already in place.
Mr. Fox inquired whether the Applicant could utilize three months to find a
second tenant and, should the second tenant fail, another three months to
find a third tenant.
Council Member Schmid replied yes.
Mr. Spiers accepted the provision.
Council Member Berman found no provision for the use of penalty funds,
should any be collected. He asked if Staff considered whether penalty funds
could benefit the College Terrace area.
Ms. Gitelman assumed penalty funds would be used for Code enforcement
efforts. The Council could make that decision.
Council Member Berman asked how funds would be utilized for Code
enforcement.
MINUTES
12/15/2014 116- 270
Ms. Gitelman advised that penalty funds could subsidize the time and energy
spent inspecting and enforcing Zoning Ordinances.
Council Member Berman did not agree with utilizing funds for Code
Enforcement. The grocery store was intended to be a benefit for the
neighborhood, and penalty funds should be utilized for the neighborhood.
He did not wish to prescribe expenditures for a future Council.
Molly Stump, City Attorney, advised that Council Member Berman's concerns
should not be addressed in a contractual commitment with the Applicant.
Council Member Berman could provide a separate Motion directing Staff to
segregate penalty funds and return to the Council for direction on expending
those funds. Staff would most likely follow that process without a specific
Motion; however, a Motion could clarify the Council's intent.
Vice Mayor Kniss suggested the Council provide directions to Staff after it
voted on the pending Motion.
Ms. Stump indicated that method would also record directions to Staff in the
meeting minutes.
Council Member Berman commented that many businesses in Silicon Valley
failed and to hold a business failure against an individual was not
appropriate. He would support the Motion.
Council Member Burt inquired whether the Applicant was receptive to the
parking agreement being part of the Covenant.
Mayor Shepherd clarified that 40 parking spaces would be dedicated to the
market.
Mr. Spiers accepted the provision.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to add 40 dedicated grocery parking spaces to the
Covenant.
Mayor Shepherd felt the Applicant had listened carefully to the Council and
the community. Parking for the market was accessible. She would support
the Motion.
Council Member Holman was encouraged by the new information but needed
even more information to support the Motion.
MOTION AS AMENDED PASSED: 8-1 Holman no
MINUTES
12/15/2014 116- 271
MOTION: Council Member Berman moved, seconded by Council Member
Scharff that any funds collected due to future violations of the grocery store
be brought to Council for guidance on expenditure of funds.
Council Member Berman preferred penalty funds be utilized for the benefit of
the College Terrace neighborhood.
Council Member Scharff felt expenditure of the funds should be more visible
than Code Enforcement.
MOTION PASSED: 9:0
22. Policy and Services Committee Recommendation to Council for
Adoption of an Ordinance Amending Chapter 9.14 (Smoking And
Tobacco Regulations) of the Palo Alto Municipal Code to Establish New
Smoking Restrictions for Outdoor Commercial Areas, Outdoor Eating
Areas, Public Events, Work Sites and Service Locations; Include
Penalty Escalation for Repeat Offenders; Require Cigarette Butt
Receptacles and Signage Immediately Adjacent and Within Areas
Covered by the Ban; and Include E-cigarettes.
Council Member Price noted Staff proposed a modification to the Smoking
Restriction Ordinance after distribution of the Staff Report.
Kirsten Struve, Manager of Environmental Control Programs, reported in
2013 there was an effort to expand the No Smoking Ordinance to include
parks and to expand the buffer zone around buildings to 25 feet. The
Council approved a ban on smoking in all parks effective October 9, 2013.
In November 2013, a Colleague's Memo proposed including University
Avenue and California Avenue. Staff discussed benchmarking with the Policy
and Services Committee (Committee) in June 2014. The Committee
recommended expanding the proposal to commercial areas rather than
specific streets and to include e-cigarettes. Staff conducted outreach to
businesses. Staff recommended the Ordinance include outdoor commercial
areas and allow designated smoking areas.
Phil Bobel, Public Works Assistant Director, indicated the proposed Ordinance
included streets, sidewalks, businesses and parking lots behind businesses.
A member of the California Avenue community expressed concern about a
designated smoking area within the commercial area for employees. The
change noted in the at-places memo would allow Staff to work with
California Avenue businesses to identify a designated smoking area within
the no-smoking zone.
MINUTES
12/15/2014 116- 272
Ms. Struve advised that unenclosed areas were part of the existing
Ordinance; however, those provisions needed some clean-up language
because smoking was allowed in 50 percent of unenclosed dining areas. The
Committee directed all outdoor dining areas, public events, work sites, e-
cigarettes, and a penalty escalation be included in the Ordinance.
Jan Parcel stated studies were providing evidence in favor of the safety of e-
cigarettes and indicating young people were quitting smoking in
unprecedented numbers. E-cigarettes should not be included in the
proposed Ordinance.
Omar Chatty noted the number of deaths on Caltrain tracks. He hoped the
Council would support replacing Caltrain with Bay Area Rapid Transit (BART)
in order to save lives.
Council Member Price reported that the Committee's discussion included the
importance of expanding the smoking ban and modifying boundaries. The
discussions focused on the issue of public health risks associates with
smoking. Other communities commonly included e-cigarettes in the
definition of cigarettes. She proposed modifying Item 2 in the Committee's
recommendation to include examination of potential banning of smoking in
multifamily residential units that had a shared ventilation system.
Mr. Bobel did not have any concerns about including the proposed language.
Council Member Price felt the proposed language clarified the Committee's
intent.
MOTION: Council Member Price moved, seconded by Vice Mayor Kniss to
Adopt an Ordinance Amending Chapter 9.14 (Smoking and Tobacco
Regulations) of the Palo Alto Municipal Code to:
1. Establish New Smoking Restrictions for Outdoor Commercial Areas,
Outdoor Eating Areas, Public Events, Work Sites and Service
Locations; and
2. Include Penalty Escalation for Repeat Offenders; refer further
investigation to the Policy & Services Committee on tobacco retailers
licensing and indoor smoking, including examination of potential
banning of smoking in multifamily residential units that have a shared
ventilation system; and
3. Require Cigarette Butt Receptacles and Signage Immediately Adjacent
to and Within Areas Covered by the Ban.
MINUTES
12/15/2014 116- 273
Council Member Klein supported the Motion. A Cable News Network (CNN)
article indicated kids who used e-cigarettes migrated to use of cigarettes.
Council Member Burt inquired whether cigar rooms were prohibited under
the proposed Ordinance.
Mr. Bobel answered no.
Council Member Burt inquired whether smoking on the patio at The Nut
House was prohibited.
Mr. Bobel answered yes.
Ms. Struve added that smoking on the patio was prohibited under the
existing Ordinance as it was located within 25 feet of the building.
Council Member Burt did not believe the Council had sufficient information to
include e-cigarettes in the proposed Ordinance. If the Council's objective
was to discourage smoking by teens, then e-cigarettes should be included in
the proposed Ordinance. If the Council was concerned about the impact of
secondhand smoke on others, then evidence was not clear whether e-
cigarettes should or should not be included in the proposed Ordinance. He
inquired whether the objective was to discourage smoking among teens or
to protect non-smokers or both.
Council Member Price indicated the objective was both.
Ms. Struve also understood the objective was both. Staff reviewed studies
that indicated e-cigarette use led to the increased use of cigarettes by teens.
There was not sufficient information to determine whether secondhand
smoke from e-cigarettes impacted health.
Council Member Burt remarked that the proposed Ordinance would prohibit
adults from using e-cigarettes.
Mr. Bobel advised that the Council would need to make a policy decision
whether to prohibit adult e-cigarette use.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to refer the issue of e-cigarettes to the Policy and
Services Committee for additional consideration.
Council Member Holman would support the Motion. She clarified her earlier
comments that Staff performed outreach but did not engage the business
community. She did not intend to contradict Staff's statement that they
performed outreach.
MINUTES
12/15/2014 116- 274
Mr. Bobel reported the Development Manager attended a meeting with the
California Avenue Business Association in June 2014. Several members also
emailed Staff.
Council Member Schmid noted the Ordinance stated smoking was prohibited
in commercial areas. Commercial areas as defined in the Ordinance were
large areas. He asked if employees in commercial areas would have to leave
the area in order to smoke.
Ms. Struve advised that business owners could propose smoking areas that
were at least 25 feet away from an opening.
Council Member Schmid asked if any business owner could propose a
smoking area.
Ms. Struve indicated business owners in the commercial area would need to
make one proposal as the smoking area would likely be on City property.
Mr. Bobel would work with business associations in Downtown and California
Avenue and Stanford Shopping Center to determine designated smoking
areas.
Council Member Schmid noted the Ordinance stated a shopping center could
establish a designated smoking area, and asked if that included smaller
commercial sites.
Mr. Bobel referred to the change in the at-places memo which would include
any commercial area covered by the smoking ban. It would include
neighborhood commercial centers.
Council Member Schmid asked if Staff would work individually with those
groups.
Mr. Bobel would contact the small shopping centers.
Council Member Schmid was thinking of Charleston Center, where the only
neighboring site was Cubberley Community Center. The City did not want to
establish a smoking area at Cubberley.
Ms. Struve believed smoking was banned at Cubberley as it was a park. It
would be difficult to establish a designated smoking area at Charleston
Center because of the 25-foot buffer zone.
Council Member Schmid asked if Staff would work individually with each
area.
MINUTES
12/15/2014 116- 275
Mr. Bobel stated he would work with them individually.
Council Member Scharff was pleased to support the Motion as it would have
a positive impact on public health. He inquired whether someone would
have to complain about someone smoking or whether officers could cite
smokers on sight.
Mr. Bobel reported the Police Department was not in the habit of ignoring
Code violations.
Council Member Scharff felt an advantage to the proposed Ordinance would
be the clear delineation of designated smoking areas. Police Officers would
no longer have to determine if smokers were inside the 25-foot buffer zone.
Smoking at bingo games was not prohibited.
Ms. Struve clarified that smoking would be allowed only in a bingo game
area with less than five employees or run by volunteers.
Council Member Berman concurred with referring the e-cigarette issue to the
Committee for additional review. He related information from studies he
found online regarding teen use of e-cigarettes.
Mayor Shepherd suggested the Committee consider a sunset provision for e-
cigarettes. She would support the Motion.
Molly Stump, City Attorney, clarified that the Council wished to delete e-
cigarettes from the proposed Ordinance.
Mayor Shepherd was not amending the Motion.
AMENDMENT: Council Member Klein moved, seconded by Council Member
XXX to include e-cigarettes in the Ordinance.
AMENDMENT FAILED DUE TO LACK OF A SECOND
MOTION AS AMENDED PASSED: 9-0
23. Colleague's Memo From Council Members Berman, Burt, and Klein
Regarding Climate Action Plan Implementation Strategy to Reduce Use
of Natural Gas and Gasoline Through “Fuel Switching” to Carbon-Free
Electricity.
Council Member Burt advised that the Colleague's Memo did not determine
any action by the Council, but it did move the Council toward evaluation of
future initiatives. Future initiatives would be essential for the City to fulfill
the objectives of the Climate Action Plan.
MINUTES
12/15/2014 116- 276
The City's carbon-free electricity portfolio was a foundation for moving
toward an energy form that would gradually reduce and eventually eliminate
carbon emissions. Zero carbon emissions was an ambitious goal.
Bruce Hodge stated the City's move to a carbon-free electricity portfolio
reduced the carbon footprint of the entire City by approximately 20 percent.
Next steps were to determine methods to drastically reduce consumption of
natural gas and gasoline. The Colleague's Memo along with the Climate
Action Plan were the beginning of a crucial next phase in the decarbonization
of energy use in Palo Alto.
Walt Hays believed this was the Council's first opportunity to take concrete
action. The Council was asking Staff to investigate the opportunities and
constraints of fuel switching and return with a reasonable recommendation.
He urged the Council to support the Colleague's Memo.
Craig Lewis remarked that fuel switching was difficult but important in
reducing carbon emissions. He encouraged the Council to support the
Colleague's Memo.
Council Member Berman recalled that the Council discussed the Climate
Action Plan and the importance of moving aggressively to reduce carbon
emissions the prior week. This was an amazing opportunity to implement
fuel-switching measures.
MOTION: Council Member Berman moved, seconded by Council Member
Klein to direct the City Manager to prepare a report for the City Council
outlining:
1. Prospective programs and incentives that would result in the use of
electrical devices to replace those using natural gas; and
2. Possible building code changes to require, where feasible, the use of
electrical appliances rather than natural gas appliances in the
construction and renovation of residential and commercial buildings;
and
3. Possible changes to utility rate structures that would not penalize fuel
switching; and
MINUTES
12/15/2014 116- 277
4. Evaluation of additional strategies to support adoption of electric
vehicles. The report should consider and take into account applicable
legal requirements, and identify potential legal, code or regulatory
barriers that would need to be changed to facilitate fuel-switching. The
City Manager will return to the Council by the first meeting in February
with an initial report to Council on the timeframe required to research
and develop this report, and the staff and related resources that will
be necessary, as this initiative would be an important component in
the 2015 Work Plan.
Council Member Klein agreed this was an important first step. Cities around
the world were pioneering efforts to reduce carbon emissions.
Council Member Scharff inquired about the meaning of Item 3 in relation to
Proposition 218.
Council Member Klein believed a rate structure was a means to incentivize or
disincentivize behavior. He did not want people who switched fuels to be
penalized through rate structures.
Council Member Scharff understood it was illegal to incentivize fuel switching
under Proposition 218. He hoped the Council would carefully consider such
issues and not waste time on efforts that were not allowed.
Molly Stump, City Attorney, reported the Colleague's Memo included a
reference to review of the regulatory system. That would be incorporated in
the report to the Council.
Council Member Scharff asked if Staff would be able to return with a report
in 30 days.
James Keene, City Manager, indicated Staff's report in February 2015 would
advise the Council of actions needed to report on those four points.
Ms. Stump added that the initial report would have to be generated in the
next few weeks to meet the deadline for inclusion in the Council packet.
Mayor Shepherd inquired whether Staff would provide an information or
action item.
Mr. Keene believed it would be an action item.
Council Member Burt clarified that the City Manager would report on the
timeframe required to research and develop the full report.
MINUTES
12/15/2014 116- 278
Council Member Scharff indicated it was illegal to incentivize fuel switching;
the Colleague's Memo indicated the City would review rate structures that
did not penalize fuel switching.
Ms. Stump reported structuring rates consistent with Propositions 26 and
218 was very complicated. Staff would perform quite a bit of work in this
area in order to meet policy goals.
Mayor Shepherd inquired about integration of the Colleague's Memo with
work performed by the Chief Sustainability Officer, Gil Friend.
Mr. Keene felt the Colleague's Memo aligned with the general direction of the
Climate Action Plan. When Staff returned in February 2015, the Council
could hold a focused discussion regarding integration of fuel-switching
measures with the Climate Action Plan.
MOTION PASSED: 9-0
24. Colleagues Memo from Vice Mayor Kniss and Council Members
Holman, Klein and Price Regarding Regulation of Short-Term Rentals in
Residential Neighborhoods (e.g., Airbnb and Related Businesses).
Council Member Klein attended the National League of Cities meeting in
November 2014 where a panel discussed the "shared economy." The
discussion indicated short-term rentals were a problem for communities.
The City was losing Transient Occupancy Tax (TOT) revenue through these
businesses. The Cities of San Jose and San Francisco had negotiated
agreements with Airbnb regarding zoning rules and collection of TOT. The
Council should direct Staff to schedule a Study Session no later than March
31, 2015 to inform the Council of issues and potential actions.
MOTION: Council Member Klein moved, seconded by Vice Mayor Kniss to
direct Staff to conduct a Study Session with City Council no later than March
31, 2015, on the various questions posed by businesses that facilitate short-
term rentals of rooms, apartments or houses in residential neighborhoods
(e.g., Airbnb, VRBO, etc.), what actions the City has taken, and what
actions, if any, the City should take.
Vice Mayor Kniss advised that such businesses were economically
successful; however, they did not provide any revenues to the cities in which
they operated. The Council should learn of actions taken by other cities as
well as review the new business model that did not benefit the City.
MINUTES
12/15/2014 116- 279
Council Member Scharff noted the issue was included in the Policy and
Services Committee work plan. The Planning Director stated to the Policy
and Services Committee that Staff did not have sufficient resources to take
on the issue as well as other pressing matters until mid-2015. This issue
was not a priority in relation to traffic, parking, and other planning
initiatives.
AMENDMENT: Council Member Scharff moved, seconded by Council
Member Schmid to remove the verbiage of returning no later than March 31,
2015.
Council Member Scharff did not oppose the Council reviewing the issue, but
was concerned about Staff resources.
Council Member Schmid wanted to provide Staff with the flexibility to
determine when they could return with a Study Session.
Council Member Burt suggested Staff review actions taken by other cities
and present that information to the Council. An important first step would
be adopting an Ordinance. The Council could then consider methods to
enforce the Ordinance.
Molly Stump, City Attorney, reported the larger issue was a community
discussion regarding what should be allowed in R-1 neighborhoods. Staff
could quickly provide information on actions taken by other cities.
Council Member Burt believed there were two aspects to the issue. One was
that regulations for these businesses aligned with regulations for traditional
short-term rentals. The second aspect was what the Council and community
wanted to allow. Adoption of an Ordinance could be done quickly, followed
by a prolonged discussion of what to allow.
Ms. Stump advised that the TOT Ordinance presented to voters in November
2014 clarified the language. Council Member Burt's first aspect was
accomplished.
Council Member Klein was disappointed by the Planning Director's comments
to the Policy and Services Committee and felt the problem was larger than
Council Member Scharff believed. Without clear policies for collection of tax
revenues, the problem would grow. These businesses were negatively
affecting Palo Alto's hotel industry. It would be a mistake not to include a
date for Staff to return to the Council.
Council Member Price would support the Amendment. She too was
concerned about Staff's workload.
MINUTES
12/15/2014 116- 280
Vice Mayor Kniss would not support the Amendment. The City was losing
money every day it did not collect tax revenues.
Mayor Shepherd understood the topic was included in the Policy and
Services Committee's work plan. She would support the Amendment. The
topic should remain on the Policy and Services Committee's work plan and
discussed within the Comprehensive Plan Update.
AMENDMENT PASSED: 5-4 Burt, Holman, Klein, Kniss no
Council Member Holman indicated short-term rentals impacted the
availability of housing as well as safety. The Council should address the
issue.
Council Member Burt viewed short-term rentals as a large part of the
broader issue of commercialization of residential neighborhoods. The other
dimension of commercialization was homes being utilized for full-scale office
businesses. This dimension should be included in the work plan as well.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to refer to Policy and Services Committee the
review of how to contend with the increased commercialization of
residences.
MOTION AS AMENDED PASSED: 9-0
Adjournment: The meeting was adjourned at 1:11 A.M.
ATTEST: APPROVED:
City Clerk Mayor
NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto
Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing
Committee meeting tapes are made solely for the purpose of facilitating the
preparation of the minutes of the meetings. City Council and Standing Committee
meeting tapes are recycled 90 days from the date of the meeting. The tapes are
available for members of the public to listen to during regular office hours.