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HomeMy WebLinkAbout2025-01-21 City Council Summary MinutesCITY COUNCIL SUMMARY MINUTES Page 1 of 19 Special Meeting January 21, 2025 The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M. Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone Present Remotely: Veenker Absent: None. Mayor Lauing called the meeting to order. The clerk called roll declaring seven present. Vice Mayor Veenker announced she would be invoking the just cause provision of AB 2449 because she was on travel while on business of City Council at the Northern California Power Agency Commission meeting in Sacramento. She stated there were no other adults, 18 or older, in the room with her. Special Orders of the Day 1. Review List of Applicants and Select Candidates to Interview for the Planning and Transportation Commission (PTC) Vacancies; CEQA Status: Not a project Mahealani Ah Yun, City Clerk, provided a slide presentation discussing the Planning and Transportation Commission interviews including vacancies and applications received, City Council direction and staff recommendation. Mayor Lauing added the process that was in place last time as summarized in the staff report said it would be equal to the number of vacancies plus 50 percent which would, in this case, be two votes for the partial term and three votes for the two full terms. They were allowed to have a different process. He asked if anyone wanted to change that in any way. Councilmember Burt wanted to ensure they had gone through and reflected on the policy they want if they were going to have a default policy. He discussed the unusual number of candidates they had to interview and the amount of time that would entail. He was inclined to interview more rather than fewer. He was interested in seeing how many candidates they would be considering and who they are and then make the decision on whether to adjust the process. Councilmember Lythcott-Haims agreed with Councilmember Burt's notion that it would be helpful to know how many people had received votes in the initial effort to put names forward. If it was a small number, she suggested interviewing in some proportionality. SUMMARY MINUTES Page 2 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 Vice Mayor Veenker suggested Council consider implementing a threshold. City Clerk Ah Yun indicated there were six candidates for the two full term vacancies Council selected with the votes of two votes for meeting the threshold for an interview. For the one partial term, there were three candidates to be interviewed. Three candidates for the full-term vacancies and seven for the partial term got only one vote. Six did not receive any votes. Councilmember Lu queried when aggregating the candidates that had two votes, if it was rolled together if someone got one vote for partial and one vote for full. City Clerk Ah Yun replied they did not roll them together. The way the direction was interpreted was per seat. Christine Prior, Deputy City Clerk, remarked seven candidates received two or more votes. City Clerk Ah Yun commented two candidates opted in to be considered for the full term. Mayor Lauing suggested going with 13. City Clerk Ah Yun reiterated for the partial term as well as for the full term, any candidate that received one vote would be moved forward to the next round. Councilmembers were able to cast two votes for the partial term position and three votes for the two full term positions. The Council selected the following candidates that received at least one vote to interview for the PTC vacancies; one (1) partial term, and two (2) full terms: • William Glazier: Lauing, Stone, Reckdahl, Veenker (Partial or Full) • Daniel Hekier: Lu, Lythcott-Haims (Partial or Full) • Terrance Holzemer: Lauing, Reckdahl, Stone (Partial Only) • Todd James: Burt, Lauing, Reckdahl (Partial or Full) • Kevin Ji: Burt, Lauing, Lu, Lythcott-Haims, Stone, Reckdahl, Veenker (Partial or Full) • Arthur Keller: Stone (Full or Partial) • Thomas Kellerman: Burt, Lauing, Veenker (Partial or Full) • Declan King: Reckdahl (Full Only) • Henrik Morkner: Veenker (Partial Only) SUMMARY MINUTES Page 3 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 • Salim Parak: Burt (Full or Partial) • Forest Peterson: Lu, Lythcott-Haims, Stone, Veenker (Partial or Full) • Michael Regula: Lu (Partial or Full) • Rika YeaKyung Yamamoto: Burt, Lu (Partial or Full) Agenda Changes, Additions and Deletions Ed Shikada, City Manager, indicated there were none. Public Comment 1. Ward T. noted some progress had been made on Boulware Park but they remained behind schedule. He requested monthly progress reports due to the City that he asked for previously and had not received. He urged Council to hold the contractor to account to get the park built as per the contract. 2. Jaya U. spoke on behalf of her mother, a City of Palo Alto employee. She emphasized the importance of maintaining medical costs at the current level so City employees can manage their regular expenses and save for retirement without the added burden of rising health care costs. 3. Val P. spoke on behalf of a friend and coworker, Andrew Joyce, Mitchell Park Community Center employee since 2006. He urged City Council to consider increasing city-paid medical costs to help employees and consider affordable health care for employees’ families. 4. Martin S., 30-year property owner in Palo Alto, described homeless transients sleeping in Parking Lot Q and breaking into his garage and truck. The police were called who claimed there was nothing they could do and advised him to talk to City Council. He requested locking down Parking Lot Q at night. 5. Amir A., electric power engineer for the City, asked for fairness, recognition of their value and the ability to live with dignity for the employees who serve the City. 6. Victor H. urged Council to consider a fair contract. 7. Jose B., tree department, thought all the City employees deserved a fair contract. 8. Margie C., City employee for 12 years, described how her health coverage would be doubling this year. She asked Council to strongly encourage the City to help families with their medical and to continue to make Palo Alto a desirable place to work. SUMMARY MINUTES Page 4 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 9. Jonathan E. played the cello. 10. Talya S., senior at Gunn High School and member of the Palo Alto Student Climate Coalition, urged Council to set climate change in the natural environment as a priority for 2025 in wake of the fires in Los Angeles. 11. Julianne W., Santa Clara Valley Bird Alliance, supported the Dark Sky Ordinance. She provided handouts that discussed information about the safety and energy benefits of this ordinance. Council Member Questions, Comments and Announcements Mayor Lauing commented two standing committees were appointed but they would be waiting until after the retreat to do ad hocs. Councilmember Lu was appointed to VTA Policy Advisory Committee. Councilmember Reckdahl would be taking the Santa Clara Valley Water District. Councilmember Stone would be taking the Local Policy Makers Group. He recapped his experience at the U.S. Mayor's Conference in D.C. He talked about the MLK Day event at Mitchell that occurred the day before. Study Session 2. Study Session on 2024 City of Palo Alto Suicide Prevention Policy and City Programs Supporting Community Mental Health; CEQA Status: Not a project NO ACTION Public Comment: 1. Ken H. suggested directing the Policy and Services Committee to look at a sugar beverage tax to fund mental health programs. He talked about the excessive sugar content and dangers of soda. 2. Vic O. spoke in support of the policy changes put in by the community services director. He mentioned the 988 phone number and the Gatekeeper program that Council had been trained in and offered that they were willing to train them again in the updated program and asked to be contacted if anyone was interested. 3. Leif E., retired executive director of Youth Community Service and current president of the Palo Alto University Rotary Club, was disappointed to see the staff revisions to the suicide prevention policy developed and revised without engaging the resource of partners who had learned to work together. SUMMARY MINUTES Page 5 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 4. Peter S., co-chair of Project SafetyNet, spoke about the priorities of reactivating the coalition. 5. Peying L., director of community partnerships at Project SafetyNet, provided a background of Project SafetyNet. 6. Shani K. expressed the importance of the impacts of exposure to nature in mental health and the detrimental effects of light pollution at night. Kristen O’Kane, Community Services Director, joined by Palo Alto Fire Chief Blackshire and Palo Alto Police Chief Binder, provided a slide presentation sharing current and upcoming initiatives the City had planned for supporting mental health including the purpose of the policy, why the City needed a suicide prevention policy, guiding framework to promote strategies and resources and mental health initiatives. City Manager Shikada provided context to the topic that was an expansion of a policy adopted on 2010. Councilmember Burt acknowledged the value of the addition of a focus on staff and broadening of the scope beyond the focus of youth. He recommended working on the policy leveraging the expertise and commitment of community partners to look at how they can strengthen it more. He advised the county policy needed an update in the data. He noted that a strong proportion of the impact of their teen suicide clusters appeared to be related to graduates of their public schools who took their lives after they left the community and were not being properly reported. Councilmember Stone agreed that the data did not properly collect suicides in in early 20s when people have left school. He liked the focus on safe storage at City facilities of dangerous materials and wanted to see those requirements extended beyond City facilities and wondered what protections were currently in place. He wanted to see a greater focus on creating more third spaces where teens would naturally want to hang out that were not designated as teen spaces. He thought this should be a goal of the City looking toward future zoning and growth. Director O’Kane was not aware of any other ordinances related to safe storage of materials other than the safe storage of firearms ordinance. She believed those would like be regulated by the county or another organization. She offered to look into that. She thought the City did a good job of ensuring they had chain of custody protocols and policies in place. Councilmember Lythcott-Haims appreciated the policy. She hoped they would move in the direction of addressing the City’s obligation and plans regarding all of its citizens. She thought they should have stakeholder conversation that would encompass more people they were in conversation with this time around. She advised consulting their nonprofit partners, clinicians, educators and youth. She wondered if what they were looking at should be called the City Employee Suicide Prevention Policy and focus on updating what they plan to offer or commit to citywide. She thought it was important to mention the youth in the policy. She wanted to see SUMMARY MINUTES Page 6 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 data on 2010 versus 2025 and the years in between with regard to the number of suicide and suicide attempts on the part youth and adults. She felt means restriction and upstream efforts were important components that were not included in the policy and she hoped they could continue to bring them into the conversation about suicide prevention. She mentioned a report on means restriction by Shashank Joshi from Stanford that she suggested everyone should read. She agreed with Councilmember Stone’s comments about creating opportunities for people of all ages to be well. She looked forward to additional conversation about this subject. Vice Mayor Veenker was glad to see this expanded beyond youth to all ages and to employees. She agreed with doing the means restrictions, being thoughtful about messaging and doing the things seen in the policy and more. She thought iterating places designed by and for youth and teens would be helpful. She agreed with the need for upstream mental health services. She shared that adolescence is too often framed as a problematic time in life and that they needed to change that narrative. They should not be forcing youth to adulthood too early. She mentioned a TED-Ed site with resources to promote good mental health and offered to share the link with anyone interested. Councilmember Lu appreciated the more inclusive policy and concise language. He was excited about more programs and clarity about the policy. He agreed with Councilmember Burt that the Council and community had to play an ongoing role in strengthening the policies and programs. He echoed Councilmember Lythcott-Haims’ thoughts that the community should be assured that they were not losing focus or resources on youth problems. He wanted to know if they would get updated metrics about suicide trends and attempts at the City and county level as the policy is implemented. He thought getting a sense of which communities they needed to outreach to and how to think about the problem would be helped with data. He was curious how Council could help get more of that data to the public. He questioned how Council could best help in general. He wanted to understand if there were more programs they wanted to do or what needs or staffing they had. He was interested in seeing how technology could be better used and was curious to know if telehealth could be utilized. Director O’Kane replied they could consider and discuss providing updated metrics with the public safety team. She indicated that City employees and their families were offered online therapy through an app. There were free online apps for youth provided by the state which has been shared at a teen center. Palo Alto University has in in-person clinic and an e-clinic that provides low-cost therapy by referral. Councilmember Reckdahl discussed how the stigma associated with mental health issues needed to be addressed. Mayor Lauing thought they should find a way to circle this back at a time that would work for staff. He wanted to talk about how and when they activate the programs and services available from partner organizations, if they were being used in the right way and if they should be documented in a schematic as a future agenda item. SUMMARY MINUTES Page 7 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 Director O’Kane replied being the community convener and collaborator was one of the functions of Project SafetyNet and they could continue that conversation. Councilmember Burt suggested they could provide some direction at the upcoming retreat. He noted that the 2010 policy was titled Suicide Prevention and Mental Health Promotion and he would lead with Mental Health Promotion and Suicide Prevention to lead with the upstream. He noted two of the four guiding framework points were internally focused within their organization. He wanted to make sure they continued to look at all the dimensions in proportion to the risks. He added that data alone required a qualitative framing to it. He did not think firearms, medications and chemicals warranted elevation of their focus but expanding that into community-wide protections was a good theme. He talked about Caltrain’s initiative for corridor-wide best practices in safety and security. He noted that as the school system went from not focusing on the initiatives to having a strong focus, the relationship of shared efforts with the city diminished because they felt that they were really devoting resources and attention to this. He thought they would want to continue to strive for a deep collaboration with all schools. He remarked the community partners that had been part of Project SafetyNet were so exceptional in their commitment and expertise to make sure resources were leveraged. Consent Calendar Public Comment: Ken H. (Item 7), Health Advisory Commission for the county, felt the contract was unnecessary and hoped Council would not go forward with it. He opined the City spent too much time and money on consultants. He wanted to see the Policy and Services Committee look at all the consulting contracts that had been signed off on in the last two to three years. Councilmembers Burt, Lauing, Veenker requested to pull Agenda Item Number 7. City Manager Shikada indicated staff would schedule Item Number 7 for a future Council meeting. MOTION: Councilmember Lythcott-Haims moved, seconded by Councilmember Reckdahl to approve Agenda Item Numbers 3-6 and pull off consent agenda item number 7. MOTION PASSED: 7-0 3. Approval of Minutes from January 6, 2025 Meeting 4. Authorize the City Manager, or designee, to award a Conditional Funding Commitment of $5,000,000 in Housing In-Lieu Residential Funds, Commercial – Residential Impact Fee Funds, Residential – Housing Impact Fee Funds, and Local Housing Trust Fund Funds to, and enter into funding agreements with, Charities Housing for the Development of a 100% Affordable Housing Project at 3001 El Camino Real; CEQA status – previously studied in a Mitigated Negative Declaration. SUMMARY MINUTES Page 8 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 5. Approval for the City Manager or their Designee to Execute PO C25193331 with Carahsoft, Utilizing a General Services Agreement (GSA) Contract Number 47QSWA18D008F, to Procure SAP Signavio/LeanIX, SAP Governance, Risk, Compliance (GRC) and Identity Access Governance (IAG) Solutions for a 3-Year Term for a Total Not- To-Exceed Amount of $1,032,431; CEQA Status: Not a Project 6. Approval of Contract Amendment Number 1 to Contract C24188179 with Urban Field Studio in the Amount of $15,000 for a Revised Six-Month Contract Total Amount Not-to- Exceed $264,708 for the Project Management Costs for the Development of the Car- Free Streets Implementation Plan. CEQA Status – Exempt Under CEQA Guidelines Section 15262 7. Approval of Professional Service Contract Number C25192988 with Lloyd Consulting Group, LLC., in the Amount Not to Exceed $232,985 to Conduct a Comprehensive Turf Study for a Period Six Months; CEQA Status – exempt under CEQA regulations 15262 and 15306. Pulled from Consent Calendar (Date TBD) City Manager Comments City Manager Shikada provided a slide presentation discussing resources to provide support L.A. fire victims, upcoming Creek-Stream Corridor ordinance community meeting, upcoming library activities, the upcoming City Board, Commission and Committee recruitment and notable tentative upcoming Council items. Councilmember Burt wanted to know if it would be possible to couple the February 3 study session on Cal Ave with a subsequent action item on the same evening to allow them to move forward with permanent parklets. City Manager Shikada agreed to discuss that with staff as a referral. Action Items 8. FIRST READING: Adoption of an Ordinance Amending Title 18: Zoning Ordinance of the Palo Alto Municipal Code (PAMC) to Implement Programs 1.5A (Stanford University Lands), 3.6D (Expedited Project Review), 4.1A (Replacement Housing), and 6.5C-G (Alternate Housing) of the Housing Element 2023-2031, and Title 21: Subdivision and Other Divisions of Land to Incorporate Changes as Directed by Housing and Community Development (HCD). CEQA Status – Revised Addendum to Comprehensive Plan EIR approved November 2023 (SCH 2014052101). Vishnu Krishnan, Senior Planner, joined by Jonathan Lait, Planning and Development Director, provided a slide presentation of the proposed changes to the Municipal Code Titles 18 and 21 SUMMARY MINUTES Page 9 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 to implement the housing element programs including an overview, Title 18 amendments, 1.5A Stanford University lands, 3.6D: expedited project review, program 4.1A replacement housing, 6.5 alternate housing objectives, Title 21 changes, Council deliberation and recommended motions. Public Comment: Scott O. (Zoom) opined that 1.25 was a very low floor area ratio as referenced on code 18.40.060. He was concerned it might defeat the purpose of the amendment to allow housing especially on religious sites. Director Lait indicated the item in question would be section two of the ordinance dealing with a very discreet change in the zoning code to strike the CUP (conditional use permit) requirement for housing in the Research Park replacing it with a P for permitted use. They would still retain the CUP provisions for sites within a certain proximity of facilities that contain hazardous materials. Councilmember Burt expressed the need to make housing a bonus and not a subtraction to valuable office land stating it would require partnering between the City and the University. Veenker recused herself from Stanford related portions of this item. City Manager Shikada recused himself from Stanford related portions of this item. MOTION: Councilmember Burt moved, seconded by Councilmember Stone to adopt of Sections 1, 2, and 9 through 11, inclusive, of the proposed ordinance amending various chapters of Title 18 (Zoning) of the Palo Alto Municipal Code to implement the 2023-2031 Housing Element, regarding Housing Element Program 1.5A (Stanford University Lands). MOTION PASSED: 6-0-1, Veenker recused Councilmember Stone wondered if they had the legal ability to be able to require a right of first refusal to tenants who lived in the original housing who were being at least temporarily displaced while new housing was being constructed. He further wanted to know if they would be able to require rent caps for the returning residents. Director Lait replied they would have to get back to City Council with that information. He thought requiring a rent cap would be prohibited under state law but they would look into it further. He queried how HCD could condition the approval of a housing element on modifying the SB 9 regulations. Molly Stump, City Attorney, remarked the original Superior Court ruling down in Southern California applied only to the city or cities that were parties to that suit. That item was still on appeal but essentially the central argument on which the judge relied was reversed by the state legislature last year. The judge relied on the findings that the state legislature made. He found a mismatch between this state legislature stated purpose for the statute and its effect and the SUMMARY MINUTES Page 10 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 state legislature adopted new findings that were very broad meant that ruling would not be made today under the SB 9. Councilmember Burt asked for clarification on which of the changes were requirements based upon state legislation versus discretionary decisions and on the limitations of 65C. Director Lait replied they were all standards set forth in state law and just being codified and implemented as required by HCD through the housing element to make sure the local ordinance was trued up with state law provisions. They establish where they were permitted or making sure there were no barriers to the establishment of those types of facilities. Senior Planner Krishnan 65C only talked about the shared areas limited to kitchen, dining and living. It also included residential care homes the point being each unit had to have a kitchen with at least a hub. Councilmember Burt noted they would want to understand the ramifications of that in the extreme. It did not mean that every residential care home that would fall under that would push the boundaries but without any boundaries they could see things that were different from what the legislature and they were anticipating. Councilmember Reckdahl asked if there were regulation for FAR limits or other characteristics for the group homes. Albert Yang, Assistant City Attorney, responded that state law differentiates between group homes that are up to six residents and those that are six and more so homes up to six residents would be treated as single family homes while six or more residents were not in that category but they would still be subject to whatever the applicable development standards. MOTION: Councilmember Stone moved, seconded by Mayor Lauing to adopt sections 1 and 3 through 11, inclusive, of the proposed ordinance amending various chapters of Title 18 (Zoning) of the Palo Alto Municipal Code to implement the 2023-2031 Housing Element, regarding Housing Element Programs 3.6D (Expedited Project Review), 4.1A (Replacement Housing), and 6.5C-G (Alternate Housing), and amending Title 21 (Subdivision and Other Divisions of Land) to incorporate changes as directed by Housing and Community Development (HCD) related to Senate Bill 9 implementation. MOTION PASSED: 7-0 9. Selection of Non-Profit Development Partner to Construct a 100% Affordable Housing Project on the City-Owned Parking Lot Located at the Corner of Kipling Street and Lytton Avenue and Direction for Staff to Prepare an Exclusive Negotiating Agreement with Alta Housing to Establish a Partnership Process and Parameters; CEQA status — Not a Project. SUMMARY MINUTES Page 11 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 Julie Knight, Principal Planner, provided a slide presentation about partner selection for affordable housing on Lot T including an overview, staff recommendation, Lot T details, policy and process overview, preliminary development partner proposals, request for refined proposals parking scenarios, key considerations, scenario summaries and staff recommendations. Alta Housing Representative provided a slide presentation including an overview of Alta Housing, their team, the Wilton Court collaboration, four Alta communities within walking distance and robust resident services programs. Matt Franklin, MidPen Housing President, provided a slide presentation with an overview of MidPen, 2024 construction projects, creating new homes through partnership, proven track record securing state and regional and private resources. Public Comment: 1. Charlie W., Palo Alto Chamber of Commerce, expressed the Chamber’s support of adding housing Downtown but felt it should be accomplished without eliminating current public lots. He advised acknowledging and implementing a plan that would balance housing with parking the supports retail. 2. Armando M., field representative for the Northern California Carpenters Union at Local 405, expressed the importance of choosing a partner who pay area standard wages to their skilled workers on every project to ensure the local workforce had jobs that would sustain their high cost of living. 3. Deborah G. opined this project should be a slam dunk for Alta. She hoped the City would consider building housing on parking lots in downtown Palo Alto. She mentioned a scandal in Marin County with a big non-profit housing company and wanted to find out what builder was involved before the decision was made. 4. Patty I. commented that the site being discussed would save hours of commute time for some workers in the community. She urged Council to approve and move these projects forward with expediency. 5. Amie A., executive director of Palo Alto Forward, asked Council to consider a faster route to approval of more housing at more sites downtown. 6. Scott O. (Zoom) encouraged Council to work backwards in thinking about urgency getting approved and getting the next wave underway. 7. John S. (Zoom), Thoits, described his organization’s concern by the proposed plan for Lot T development. He opined that targeting this public parking lot and others to be demolished would be detrimental to retail recovery. He was shocked that staff would SUMMARY MINUTES Page 12 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 describe a five to seven story structure across what was likely the most narrow street in all of downtown as being able to “fit in the neighborhood”. 8. John K. (Zoom) associated himself with the remarks of Amie A. and Scott O. He recommended choosing Alta. He advised asking both applicants about whether the financials and the nature of the proposal they had offered to the City and community would change materially if there were other sites downtown that were part of the negotiation. He urged Council to postpone their decisions as to the second part of the staff recommendation. Councilmember Reckdahl wanted more detail about what was and was not included in the City gap on slide 12. He commented if the gap did not mean the same thing for the two rows then it was difficult to interpret. He inquired if the 4.1 or the 10.1 numbers were just a guess. If there were two different levels of optimism, there may be more risk with one than the other. Principal Planner Knight explained both of the development respondents had looked at state tax credits and other sources they thought they could secure including. They would turn to the City to ask for a soft loan. The respondent had both indicated a lot of the traditional funding sources that had been available for these kind of projects were a little bit fallow. The development teams were making different assumptions about what they thought they could or could not secure for outside funding. That would impact what would be left for the City to fill the gap. She pointed out that one of the applicants had just indicated that they would consider their ability to fill the gap more. She did consider the two proposals apples to apples. They were asked to put forward the most feasible financial scenario and they asked for anywhere from $4 to $10 million in gap funding as a soft loan from the City. Director Lait replied these were conceptual plans. The 4.1 and 10.1 amounts were an educated best guess on what was being contemplated. He stated it was an order of magnitude they needed to be aware of. They did not know the full landscape of the resources that the City could bring or what funding opportunities might be available at state or other levels. Councilmember Burt was interested in the locations of parking demand, the parking occupancy level at the lots nearest to Lot T and in knowing the current housing fund balance. He thought it would be valuable to have the data on the pre-COVID and most recent occupancy levels moving forward. It was his understanding that it was their intention that they would not have a net loss in the publicly available downtown parking as a result of the various developments they did on these lots. He remarked the intent was to replace the parking but he also wanted to focus on looking how the locations were managed to make sure there was a rough correlation between where there is parking demand and where they provide it going forward. He construed that the lots in the area were similar in terms of their demand. Director Lait answered the current housing fund balance was currently about $2 million. Principal Planner Knight replied that as of 2023 only 45 percent of the downtown parking spaces that were permitted for garages and lots were occupied indicating the Lot T was SUMMARY MINUTES Page 13 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 consistent with its peer lots. She shared that only 13 percent of residential parking permits for zone 1 where Lot T was located had been sold. Nate Baird, Transportation Planning Manager, indicated generally the occupancy was busiest later in the afternoon and closer to University Avenue and the Transit Center. The surrounding garages typically had very good availability. They expected the automated parking guidance project that would be coming online soon to help advertise the availability in the nearby garages more widely. He remarked demand of lot permit sales was dynamic and tended to follow the economy. They looked forward to having more regular data but were not likely to have regular dynamic understanding of the parking occupancy right away. They were keen to managing the current supply better in the future. Assistant City Attorney Stump recalled there were a lot of pieces in flux in terms of available street parking, parking lots, etc. Caio Arellano, Chief Assistant City Attorney, was not familiar with any document or policy using the term no net loss with respect to parking. He indicated the housing element stated that as the City considers redeveloping surface lots, it shall include redevelopment shall include replacement public parking and provide 100 affordable housing units. He explained the term replacement parking to be interpreted as analyzing updated data around what parking inventory would be and making a judgment as to what the appropriate level of replacement parking would be. Vice Mayor Veenker echoed Councilmember Reckdahl’s curiosity about the funding gap. She wanted an explanation of what a soft loan was. She inquired if both applicants mentioned project labor agreements. She wanted to know the thoughts on being able to have staggered or staged negotiations on multiple projects on surface parking lots. Principal Planner Knight explained the idea of a soft loan was that the City would provide that money up front and have some fairly flexible terms for paying it back as the development gets built out. Director Lait added it was a favorable terms so there would not be added payments of interest. The money would come from the City’s Affordable Housing Fund. He indicated project labor agreements could be explored further with the applicants. He agreed staggered or staged negotiations on multiple projects on surface parking lots was a possibility. The intent was to initiate the process so they could get traction on moving forward on the housing element program. Nothing would preclude City Council from direction staff to explore other options. He described a couple of other policy considerations in play in the near term release to be worked through that would factor into the discussion. Councilmember Lythcott-Haims wanted to know what the City felt was most needed in terms of bedroom units and apartment size. She wondered if the City had articulated a particular preference regarding providing housing for unhoused people. She wanted to understand why somebody might choose the bigger, out-of-town organization. SUMMARY MINUTES Page 14 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 Director Lait pointed out some policy documents in the housing element that identifies a need for larger family housing. Various incentives exist with respect to parking and floor area that lean toward studio-type developments. He noted there would be many opportunities for Council to decide which avenue it would like to pursue. He noted both responders had both indicated a strong interest in continuing to work with the City and noted that the conceptual designs presented was still open for dialog. The intent was to respond to the City’s request in order to advance the conversation. Both firms would be able to respond to any direction the City would like to proceed in. Principal Planner Knight explained one of the biggest benefits of potentially partnering with MidPen Housing was that they were offering the highest density of housing units, they would bring learnings in from other communities they had worked in and their portfolio was 10x Alta’s. She thought partnering with the larger organization might help reach the goals faster if it was decided to pursue other phases of the project. Councilmember Stone queried what time of the day the point in time study showed was the peak. Principal Planner Knight replied the peak tended to be toward the end of the day. In response to Councilmember Burt’s question, she added that as of 2023 only 45 percent of the downtown parking spaces that were permitted for garages and lots were occupied indicating the Lot T was consistent with its peer lots. She shared that only 13 percent of residential parking permits for zone 1 where Lot T was located had been sold. Mayor Lauing questioned if the reason lifts were not mentioned was because there was no room for them. He explained why he opined they would have to put replacement parking downtown. He discussed why the proposed parking solutions did not provide adequate parking. Principal Planner Knight replied there could be room for lifts but applicants had indicated they did not prefer that especially if they wanted to do replacement public parking. Director Lait thought if they were trying to replace the existing public parking spaces and park the development at 0.5 per unit, there would be more cost to the project. The responders were asked to submit a financially feasible development and he guessed that tipped the scales significantly out of favor unless the City was willing to provide that delta and that had not been a part of their analysis, which was not to say it could not be. He mentioned there may be a combination of unit sizes and population served that, given the location and proximity to retail, jobs, parks and transit, may not need additional parking beyond that but other populations and unit sizes would require more parking. Councilmember Reckdahl asked how parking permits worked down there. Principal Planner Knight replied the parking permits were generally by zone. She indicated that at Lot T about half the spaces were flagged for permit parking and about half for general hourly parking for the public. SUMMARY MINUTES Page 15 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 Transportation Planning Manager Baird interjected the RPP permits were sold by zone. There were only so many employees allowed per residential zone. In the University Avenue Assessment District, X number of permits were available in each of the lots. There were a number of permit only spaces in the lots and garages where permit holders were allowed to park. The permits were good only for Lot T. He agreed to double check on how many permits were sold. Councilmember Reckdahl queried if incorporating public parking in with the residents would complicate the ability to get affordable housing financing. Carlos Castellanos, Alta Housing Vice President of Real Estate Development, explained they were instructed through the RFP to not assume there would be City financing available to replace the public parking so they had to look at sources they could find that had been available the last year. From that, they were able to figure out how much they could ask those sources. It would impact the ability to just using housing financing sources to get to full replacement of the public parking. They would work with the City on looking at some other financing sources but based on what they knew had been available to date from the housing financing side, it would impact their ability to finance the development in a reasonably quick timeframe if they had to also finance the full replacement of the public parking. President Franklin mentioned previous projects with similar issues and how they managed them. He stated if doing X number of public parking spaces is a requirement of the contribution of the land, then it becomes a project cost. He explained condo parking that might be a solution. In this location with the transportation and job opportunities, he did not believe there would be spillover in the surrounding area if things were done right. They would be clear in the marketing who would or would not be getting a stall. He explained they make people register their cars. They had success with promoting transit passes. He indicated 0.5 was not uncommon in a setting like this but 0 was. Mayor Lauing mentioned both responders were different in their estimate of cost for above or below ground parking. He asked if they put in another whole story of just parking, how many cars would that be on that size of building. Vice President Castellanos indicated Alta was currently managing a mixed residential parking lot downtown. The terms of being able to finance with just affordable housing financing would be difficult. They could ask for more City money but that was not the intention. If there was a difference in terms of construction costs, it might a difference in the contractors they spoke to. It was just a snapshot in time. He remarked they would have to go back and work with the architect to see how many more cars. They could go underground and two stories above. It would be more or less about 25 or 26 additional spaces on that lot. Felix AuYeung, MidPen Housing Vice President of Business Development, added thought the design challenge of replacing the existing parking applied to both proposals. He indicated that right now they had a surface parking lot at its maximum utilization in terms of how it was SUMMARY MINUTES Page 16 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 striped and circulated. If a building was put there having to have a lobby, elevator and ground floor space, that footprint would be taken away. On one single story, it would be impossible to replace all the existing parking. Because of the lot dimensions, when added an extra layer would require a ramp that would eat up more space on both stories. He thought both scheme A2 and B offered the two decks in their proposal. In B they were both above ground. In A2, one was semi subterranean to try and leverage a half ramp in both decks. Councilmember Lythcott-Haims wanted to know how confident Alta was that they were the team that would achieve working with the community to get the project done and for them to address the implication that the financing stack was not as robust artificially putting the City gap lower than it would be and the reverse from MidPen. Vice President Castellanos explained in preparing the proposal, they looked at how they had the synergy of other properties downtown. They felt that made their ability to provide services for those future residents to hone in on additional services already being provided plus the new ones they would provide. They would have a resident service coordinator for this particular development plus the access of the other four properties downtown. They had also embarked on the wellness navigation program and the residents could fully take advantage of that opportunity. He pointed out they were intentional and transparent in the application in terms of what the other sources would be. They looked at what they thought was a reasonable amount for the City balancing with what would be competitive at the state sources they included. They tried to limit the number of sources they would go to and kept them to ones they knew were available. They tried to keep it the same amount because they figured there was an amount the City would be able to finance this project and use that money to go after the state sources. President Franklin did not think Alta Housing misrepresented the true City gap but that it was a difference in presentation and decisions. He acknowledged that the financing system was complicated and provided an explanation about it. He stated whoever they chose, job one would be to chase all other sources to make their contribution as little as possible. He discussed different ways each organization presented. He indicated how his team embraced community engagement work. Councilmember Lu asked them to talk more about the assumptions that go into the cost per unit. He asked if he was correct that both developers would pay prevailing wages for labor. He wanted more understanding of the Rapid Rehousing Vouchers. He asked questions about soft loans. Vice President Castellanos explained when they put this together, it was a conceptual plan. They based it on what they heard about and escalated the numbers to future numbers. It went all the way from what they assumed as interest rates as well as for other operating costs, soft costs, hard costs and construction costs. They felt they had access to the same financial institutions and that was how they got a sense of what the escalation was and looking at it with general contractors. They wanted to work with the City, the community and with Council to SUMMARY MINUTES Page 17 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 look at the assumptions and how they could do that to move the project and development through as quickly as possible. If they wanted to go up two stories, they would consider doing that. They had a baseline of what they were assuming and that was how they came up with the numbers. He felt they could both provide the same type of product at similar cost. He agreed they pay state prevailing wages as well as working closely with the Carpenter’s Union. He added that looking at the summaries, their average unit sizes tended to be smaller except for A because they wanted to provide dignified family housing. He indicated they would look for direction from City staff from the neighborhood on how to proceed with rapid rehousing and work with the Office of Supportive Housing from the county to see how they could serve the homeless in the City of Palo Alto. President Franklin stated in addition to the economies, the cost containment strategy and investment in expertise and help to develop that strategy was a huge part of their work. They had their own building guidelines they develop through a council of architects and general contractors. They have in-house design and construction expertise that can afford to be tracking on the latest by way of materials and finishes maintaining high quality with better sustainability, durability and lower cost. He indicated they pay prevailing wage on everything and were supporters of AB 2011. He explained a soft loan as structured like a loan for enforceability. It would give order in the liens. It would be paid through residual receipts and a portion of surplus cash over time. Interest might be deferred so long as they do what they said they would do. When they sign up, they will get a 55-year regulatory agreement like the tax credit program. Somewhere in those 55 years, they would probably need to recapitalize and get another 55-year regulatory. Vice Mayor Veenker wanted MidPen to comment on the flexibility of parking scenarios. She wanted comments about the difference in numbers of stories in the proposals. She asked if Alta agreed that if they took out the vouchers and tax credits, there would be a $13 to $14 million gap. President Franklin commented they had flexibility on parking scenarios. That would come from deeper dialog with all the stakeholders and they would put substantial time and money into a number of different alternatives for consideration. He explained in scenario B, incorporating public parking would be inefficient and require height. In scenario A, he could imagine a collective decision, input and guidance from Council and the community, to lower the building. They read the guidance which gave the guidance of two floors above the five and went with that. It was not something they viewed as an absolute. He added they both do prevailing wages and both support AB 2011 but PLAs are different and they do not typically do those. The county did not typically require them. Vice President Castellanos did not agree about the $13 to $14 million gap. He believed without the vouchers it could be an $8 or $9 million gap. Mayor Lauing wanted to know thoughts about bedroom counts, building heights, etc. SUMMARY MINUTES Page 18 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 Councilmember Reckdahl thought option A for parking was the best option. He wanted to skew heavily toward family size units. He advised making it as high as possible until they run out of parking. Mayor Lauing commented that the concern with A was that they would be abandoning 100 percent parking there and their initial direction was to do replacement parking and they did not know where they would do that. He thought it would be better to work harder on B including what another story of parking would cost. In terms of the gap situation, if they went back to the developers with a number to cap it at, they would have to see if they reacted to it. He would not mind cutting back on the repurposing of homeless because they have another shelter for that. One option would be to have them go back with a 1.1 and see if they could fix B to get more parking compared to A. City Manager Shikada pointed out they framed the requested direction as preliminary direction to staff. Any Council feedback would inform the next iteration. Mayor Lauing wondered if it would be productive for all parties if they had them take another shot given they heard whether they are debating themselves on things like cap funding. Councilmember Burt thought they tentatively had scenarios at Lot D for replacement parking. For that reason, he was less concerned with the onsite parking. He was glad to hear discussion about TDM programs in order to mitigate parking demand. They need to make sure low income residents have transit passes and real support toward emerging micromobility uses that take the place of expensive parking spots. He noted that going from scenario A to B in the Alta alternative, they would be looking at adding $200,000 per unit from adding parking. He was inclined to support the parking scenario A looking at height only if it reduced the cost per unit. He found it interesting that MidPen had a lower cost per unit and a higher total City gap. He wanted to give the direction that whatever scenario they chose, it be incorporated with a very robust TDM program which may be in partnership with the City. Councilmember Lythcott-Haims did not want residents to feel they were given less with the loss of parking. She was in favor of A and intended to vote with the majority. Councilmember Lu concurred that seven stories was reasonable. He found option B relatively appealing on parking although it made compromises. In his mental model, Alta had potentially better services from adjacent properties and programs and MidPen had potentially lower cost per unit. Vice Mayor Veenker continued to lean toward option A. She did not want to see the new project burdened with replacement parking onsite when they could do it elsewhere and do the TDM. She asked Alta if they were to zero in on A, could they do more stories and units. She asked if there were thoughts on how the fires in L.A. would affect the project. Vice President Castellanos explained they would work with the community and City to determine the right mixture of different unit types. They could go up to seven stories and could SUMMARY MINUTES Page 19 of 19 Sp. City Council Meeting Summary Minutes: 01/21/2025 add another 25 to 28 units. They would look at different alternative building types. They would bring in a general contractor and construction manager to get a sense of what was going on in the building industry and what they could project to the future. President Franklin added that the damage the fires did to the already broken insurance market would affect them most. He was less concerned about supply or labor. Councilmember Burt requested Alta come back with data on the reduced parking requirement for the project and current parking utilization. MOTION: Councilmember Stone moved, seconded by Councilmember Reckdahl to: 1. Direct staff to enter into an exclusive negotiating agreement with Alta Housing. 2. Preliminary direction to staff on key project components that will guide partner design focus for future development and to come back to Council with the following plan: a. Parking scenario A; and b. Up to a 7-story plan and to maximize the total units maintaining the current ratio of family housing. AMENDMENTS INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER MOTION PASSED: 7-0 Adjournment: The meeting was adjourned at 11:17 P.M.