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HomeMy WebLinkAbout2025-05-27 City Council Summary MinutesCITY COUNCIL SUMMARY MINUTES Page 1 of 29 Special Meeting May 27, 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, Veenker Veenker Arrived at 5:31 P.M. Present Remotely: None Absent: None Call to Order Mayor Lauing called the meeting to order. The clerk called roll and declared are present. Special Orders of the Day 1. Interview Candidates for the Vacancies on the Architectural Review Board; CEQA Status – Not a Project NO ACTION Deputy City Clerk Francesca Reyes announced that 8 candidates will be interviewed from the ARB extended recruitment to fill 3 full-term seats to end on March 31, 2028. Candidates will have 10 minutes to speak. Time will be allowed for Council members to ask questions. If time permits, candidates may share a closing statement. Matthew Kelly officially withdrew his application, but he shared that he was grateful for the opportunity and intended to apply for a future opening. Marton Jojarth noted that he lives and works in Palo Alto and is a member of the Rinconada Pool and Palo Alto libraries. He is the founder of Mindframe, Inc. His work focuses on the design and construction of single-family homes and landscapes. He does not have architectural degree nor is he a real estate developer, project manager, real estate agent, or investor. Since 2016, he has applied for over 20 building permits in Palo Alto and went through the individual review SUMMARY MINUTES Page 2 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 process 6 times. All the architectural drawings for the permits bear his signature. He drew the plans and architectural details and landscaping plans and created the electrical and plumbing plans. He has experience with commercial work and designed dormitory buildings for a private school in Portola Valley. He has followed many of the major development projects in Palo Alto, regularly reviewed the plans, read the findings by the Development staff, and studied discussion occurring in ARB meetings. The contextual design criteria and objective design standards written in the municipal code help projects clear a certain minimum bar in terms of architectural quality, and the projects taking the longest time to approve tend to stay at the minimum bar. One contributor to this is developers struggling to interpret the language of especially the contextual design criteria. He wants to address this issue on the ARB, better document what good architecture looks like in Palo Alto, provide more guidance to architects to enable them to create more attractive spaces, accelerate the approval process, and possibly reduce the workload of Planning staff. He spoke of the downtown housing plan being an opportunity to add housing that will benefit existing businesses while having limited impact on the traditional single-family residential areas. The development guidelines for this area need to address a myriad of critical elements, including how to leverage the proximity to Caltrain, creating facilities for childcare and healthcare, and ensuring sufficient greenspace. Increasing downtown residents will change the streetscape but it can be aesthetically appealing and uniquely Palo Alto. He is seeking appointment to the ARB as a passionate resident. He has enough knowledge in the field of architecture to be a highly effective ARB member. He knows when and how to contribute his skills. Mayor Lauing asked how he will enable the ARB to decide on proactive guidance to developers on what is expected and desired from new projects. Mr. Jojarth answered that a lot of the guidelines are already written in the municipal code. The project design awards contain many elements that make Palo Alto special. However, it is hard to find past award recipients on the internet, which limits architects in determining the kinds of projects desired. The ARB can publicize more the reasons for their decisions and recommendations. Councilmember Burt requested that he speak to commercial projects that are well suited for the City. Mr. Jojarth replied that he likes the new Mercedes-Benz dealership, which is using reclaimed wood, has a landscape wall, and provides bicycle access. It is a good example of the architect reconciling guidelines given by the external party, Mercedes, and the realities of Palo Alto and the Baylands. Ashutosh Gupta stated he is an architect with a design build company that mostly works on single-family home architecture. He has experience in tech and architecture and uses experiences from each to determine the best solutions. He is also Leed AP certified and has worked on sustainable designs. SUMMARY MINUTES Page 3 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Councilmember Lythcott-Haims requested that he speak to the efforts to bring a new neighborhood to the San Antonio Road corridor and to share his thoughts as to how to ensure that the new spaces will foster indoor and outdoor human connection. Mr. Gupta responded that high-rise buildings will be a stark contrast with nearby landscape. He spoke of scaling buildings down and gradually building the space so that the massing is not as apparent. He outlined ways to reduce massing and explained that there should be multiple levels of interaction and safe spaces for folks to congregate. Tree-lined streets are great. The Bay Area climate is unique and can be factored in. Councilmember Reckdahl queried how building houses relates to commercial real estate. Mr. Gupta commented that he likes modern, clean line architecture for houses, but the outcome will be a result of his and the homeowner’s personalities. Something traditional will have a modern hint to it. He has worked on many different styles. He has seen a shift in what homeowners’ want over the last 10 years and since COVID. Backyards are preferred over front yards. As for retail and offices, people work from home and in the office, so they want flexibility, so offices may have casual, collaborative, and entertainment spaces. There has been a shift from cubicles to open offices, which applies to interior planning. More open space and terraces are nice. He has designed a few commercial offices, but he does not have much experience and can speak to it more as a user. Residential and apartment buildings need open space, balconies, and community gardens. He has designed many single-family homes in Palo Alto. He likes that Palo Alto has a small-town vibe. He will be happy to help in any way. Khelan Bhatt expressed that he applied because he wants to set a good example of civic engagement for his sons and because he can offer a fresh perspective. He is not a designer, architect, or builder and has no affiliation with a design or construction firm. He is familiar with challenges faced in terms of sustainable growth, transportation, cost of living, energy use, conservation, and the relationship with nature. He is a proponent of the outdoors. He wants to give back to the community. He comes from a technical background with 2 computer science degrees and an MBA, and he wants to apply tech to whatever he does in life, including civic engagement. Automation and AI can be applied to streamline certain things. He has researched what other cities and communities are doing. For example, the Providence of British Columbia is looking at historical permitting approvals and violations to identify future areas where there could be friction with developers. If Palo Alto is doing that, the story needs to be told louder. Vice Mayor Veenker asked about his history of being a multifamily developer and how technologies could serve the City. Mr. Bhatt clarified that he was part of a family apartment developer business in Chicago. He has been a landlord, so he is familiar with those challenges. AI can help in determining the impact a structure will have on surrounding landscape. SUMMARY MINUTES Page 4 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Councilmember Lu inquired how he will contribute to ARB conversations as it relates to technical issues (such as where trash should be placed) and the best use of a site and how he will be able to structure conversations on topics of interest to him. Mr. Bhatt replied there is a well-defined body of standards and codes. Friction comes from misinterpreting something or not being able to balance varying opinions. He can be a voice of the community and a bridge between the development and nondevelopment community. He applied for the position because it appears that a certain number of non-architects and non- designers are desired. He can read the technical part well, but the problem is having human-to- human conversations about concerns and balancing that with the other side/multiple sides. Councilmember Reckdahl questioned what his experience was in applying for 2 housing permits and how it can be improved. Mr. Bhatt responded that it has improved a lot. There is now a streamlined process, which is instant and works well. It may be possible to use technology to streamline the process for repetitive things. Naveen Govid remarked that he has a bachelor’s degree in architecture from India and an urban planning degree from Texas A&M with an emphasis on urban design. He has over 20 years’ experience in the architectural industry working in the Bay Area and knowledge of design principles, construction techniques, and the California Building Code. He has worked on office building, hospital, and airport projects. He serves as a board member on the Historical Architectural Review Board for the City of Fremont reviewing projects for compliance with state and city codes. He is a senior project manager with the City of Mountain View Public Works mostly managing capital improvement projects. He admires the high design standards in Palo Alto and the thoughtful city planning. It will be an honor if chosen to serve as an ARB member. Councilmember Lythcott-Haims queried what he sees as advantages and drawbacks in having a multi-municipality perspective. Mr. Govid answered that a right balance between growth and complying with city ordinances to maintain neighborhood character and safety is challenging for all cities, and he can help in striking that balance. Councilmember Stone asked how serving on the Historical Architectural Review Board informs his views on modern projects and growth. Mr. Govid spoke of the City of Fremont adopting the Housing Element and the process of altering buildings, doing expansions, and adding ADUs being streamlined, which helps customers. He has fewer projects to review because of that process. When it comes to new development and altering buildings, the key is making a conscious effort to match the character of the neighborhood. SUMMARY MINUTES Page 5 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Councilmember Reckdahl inquired what his general philosophy is for larger commercial and retail buildings and what he likes and does not like in such architecture. Mr. Govid replied that growth has to be promoted. For housing and commercial, it is important to keep in mind that it has to be pedestrian friendly and transient oriented. There should be slower speeds, more bike lanes, and safety in biking to school. There should be more all- inclusive parks and facilities catering to all people. If chosen, he will be honored to serve on the ARB. Bei Xu voiced that she is a licensed architect in California and that she has sustainable certificates in Well AP and Leed AP. She attended Berkeley for her undergraduate degree in architecture and Cornell for her master’s degree in architecture, and she minored in urban planning. She has about 8 years’ experience in architecture. She started her career mostly focusing on large scale projects and spearheaded the entitlement process for 88 Bluxome, which is 1 million square feet of office mixed-used buildings that has multiple community programs in the podium of the towers, and air rights are being granted to the City of San Francisco for a future affordable housing development. She joined BS Architects in 2021, where she started working on entitlements and the front end of projects doing preliminary and visibility design for multiple projects. She interfaced with many jurisdictions. She is somewhat new to Palo Alto, but she previously worked with Daly City and San Francisco with a little experience in Fremont, Union City, and Haywood. She enjoys handling entitlements and bonding the developers and stakeholders to move projects forward. She interned in Albany’s planning department for 1½ years working on bike lane and tree renovation projects. She enjoys public engagement and is why she wants to serve on the ARB. Councilmember Burt requested that she share thoughts on the differences in the context of Palo Alto compared to San Francisco and other cities she has worked in. Ms. Xu responded that it is common knowledge in the Bay Area that it is hard to get designs through Palo Alto. San Francisco is fairly open-minded and they want to get projects through. Palo Alto is holding on to traditional values, so there are challenges in design aesthetic review with new developments. She questions where the compromise should be to promote growth and to hold on to the values. As for the context of values compared to other cities, Palo Alto wants to promote a traditional value of honoring the existing context and work with a more cohesive design environment, which a lot of cities are doing, but Palo has a high and stringent standard in holding on to that design value. Councilmember Lu requested that she speak to her experience with bodies similar to the ARB in other cities and how it will inform her serving on the ARB. Ms. Xu answered that she has no experience with the ARB but she has experience with other planning departments. Working with constraints helps designers promote new thoughts in design innovations. SUMMARY MINUTES Page 6 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Councilmember Lythcott-Haims asked her to address a project being suitable for adaptive reuse as it relates to keeping structures versus building new. Ms. Xu responded that the first consideration should be the value of a building and what it means to the community. The core portion of the architecture should be preserved. She explained that the value of what should be reproduced versus what should be replaced is different. Designers should work with those who have historic preservation knowledge to preserve the key pieces if not the entire piece. She admired the High Line project in New York. Councilmember Reckdahl asked what specific impacts she had on the designs in her portfolio. Ms. Xu answered that the impacts she had on design depended on the project. Early in her projects and studios architecture, she mainly worked on 88 Bluxome, attended all planning meetings, and interfaced with folks to identify project value. She also handled detail, structure, and MEP coordinations. She was more senior in her DES position and did a lot of the designing and worked on the technical detail drawings. Councilmember Reckdahl questioned what aspect of design she worked on. Ms. Xu replied that it depended on the project but she worked on building skin but also everything holistically, including traffic circulation and landscape and civil planning. She thinks about how buildings will interact with the environment. In closing, she stated that she appreciates the opportunity. Grace Lee remarked that she studied architecture and planning in graduate school at Berkeley. Her professional background started in landscape architecture, which she consistently returned to. She spoke of working on a 180-foot boulevard building face to building face, and she participated in the community process and evaluated bicycle traffic and street crossings, and she learned lessons in architecture. Small buildings had been designed for the project. She later worked in affordable housing, with nonprofits, and in street façade improvements for small business owners. She then moved into the how-to design and drafting masterplan guidelines and consulting with cities. She later did work with mixed-use development and retail and planning for what could be. She learned to look the possibility of a site from a developer’s perspective, including environmental review. She worked on school campuses’ master plan updates as a volunteer. She helped to review acoustical studies, environmental habitats, traffic circulation, parking, service areas, and daylight plane. She works with Carrasco & Associates. The bulk of the work is commercial but there is a fair amount of housing. She has presented to boards in entitlement review, led neighborhood meetings, and spearheaded conceptual design taking it through design development, although she is not a construction documents person and relies on others for that. She has experience in laying out parking spaces, thinking about where there might be collisions, evaluating options in terms of neighborhood scale, considering sustainability goals, and understanding a neighborhood at different levels, not as just a building but in the context of an area plan. The comprehensive plan and a lot of the work Palo Alto has SUMMARY MINUTES Page 7 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 done is unrecognized in terms of breadth and scope. She likes to approach sites in thinking beyond the binocular write-up. Councilmember Burt requested her thoughts on how higher density housing and affordable housing projects can be integrated with transportation, egress issues, etc. Ms. Lee responded that the purview of an ARB member is to evaluate proposals that are generated by clients who hired consultants. A strong ARB member should evaluate those with faith in the design professional and the client. Each member needs to do research, which may need to be addressed more in training. In terms of densities, the ARB is tasked with findings in aesthetics and the program being used in an effective way. She stated that she returns to the findings. Putting one’s self at the eyelevel, vehicular, and bicyclists view can be effective. The listening period is important in gaining perspectives. In closing, she voiced that she wants to give back to the City. Community forestry is important. City Clerk Mahealani Ah Yun recapped that 6 of the 8 invited candidates were interviewed. Matthew Kelly withdrew his application. Staff will reach out to Danny Cao to find out why he was not in attendance, and staff will provide an update to Council. Appointments are scheduled for the June 2 Council meeting. Mayor Lauing declared that there will be public comment at that time. City Clerk Yun added that moving forward the public and Council will be provided an update on the process for the interview selection for the ARB, boards, and commissions. Councilmember Lythcott-Haims stated it is important to consider all applicants, and she asked the date of the meeting when 2 others had been interviewed for the board. City Clerk Yun responded that 3 candidates were initially interviewed at the March 24 Council meeting. Closed Session AA1. CONFERENCE WITH LEGAL COUNSEL—POTENTIAL LITIGATION (two cases) Subject: Initiation of litigation in two cases, American Federation of Government Employees v. Trump, US District Court for the Northern District of California, Case No. 25-CV-03698 and City and County of San Francisco v. Trump, US District Court for the Northern District of California, Case No. 25-CV-01350 Authority: Government Code Section 54956.9(d)(4) Public Comment: There were no requests to speak. SUMMARY MINUTES Page 8 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 MOTION: Councilmember Lu moved, seconded by Councilmember Reckdahl to go into Closed Session. MOTION PASSED: 7-0 Council went into Closed Session at 6:36 p.m. Council returned from Closed Session at 8:00 p.m. Mayor Lauing announced that the Council directed the City Attorney to take necessary steps to join the case of City and County of San Francisco v. Trump, US District Court for the Northern District of California, Case No. 25-CV-01350. This challenges federal executive orders and administrative directives that threaten to withhold federal funds and initiate enforcement action against state and local government entities which limit local cooperation with federal immigration enforcement. This is action taken in compliance with the California Values Act. Vote: 7-0 Agenda Changes, Additions and Deletions City Manager Ed Shikada declared there are no agenda changes. In anticipation of a full evening, he will dispense with the City Manager comments (that information is in the packet). Public Comment 1. Siosiua V. spoke on behalf of JobTrain. He is thankful that the organization’s nonprofit funding request application will be considered. JobTrain will celebrate 60 years this year. He spoke of their work and hopes. He looks forward to working with the City. 2. Reece G., a junior at Gunn, commented that he is advocating for lowering the voting age to 16 years for municipal elections. Many countries and cities had lowered the voting age to 16. He spoke of the statistical benefits of doing such. They are available for collaboration (the email is on the slip). 3. Sarit S. spoke of the 2 lives lost outside of the Jewish Museum in DC last week and certain slogans promoting violence. 4. Robin M. discussed violence and terrorist organizations. He supports free speech and the right to criticize government but not hostility and prejudice against people. 5. Lori M. opined that violence is being normalized in schools, which she elaborated on. SUMMARY MINUTES Page 9 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 6. Alan C. expressed his gratitude to the Mayor, to Council, and to the HRC for raising awareness about hate. He requested that City leaders take action against hate in Palo Alto by enforcing rules, not supporting events tied to hate groups, and reminding everyone that words matter. Consent Calendar 2. Approval of Minutes from May 12, 2025 Meeting 3. Approval of Professional Services Contract Number C25193676 With Franklin Energy Services LLC, in the Amount Not-to-Exceed $7,054,863 over a three-year term to Administer Turnkey Home Electrification Program as Part of the Advanced Single-Family Electrification Program and Amend the Fiscal Year Budget Appropriation for the Gas Fund; CEQA Status: -- Not a Project under CEQA Guidelines 15378(b)(5) 4. Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto Business Improvement District (BID) Assessment for Fiscal Year 2026; CEQA status – not a project. 5. Approval of Contract Amendment Number 4 to Contract #S20178065 with OIR Group, in the Amount of $40,000 and for a one-year extension to continue Independent Police Auditing Services in Palo Alto. CEQA Status – Not a Project. Public Comment: 1. Aram J. – Item 5 (Zoom) – stated that he supports having an independent police auditor. He requested that study sessions involving an independent police auditor address issues raised by residents, ACLU, etc., in order to have a well-rounded perspective on the issues. He asked what more the OIR will be taking on. MOTION: Vice Mayor Veenker moved, seconded by Councilmember Reckdahl to approve Agenda Item Numbers 2-5. MOTION PASSED: 7-0 Council Member Questions, Comments and Announcements Vice Mayor Veenker reported that she and staff had attended the NCPA Executive Committee and Commission meetings on May 22. The annual Wildfire Mitigation Plan, investment policy and personnel procedures, and contracts for electric and pipeline maintenance, etc., were approved. The Spicer Meadow Spillway Project for concrete patch maintenance on the dam moved forward. Work will be done with WAPA on projects for the Central Valley Project power SUMMARY MINUTES Page 10 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 plants, and NCPA members will do a transaction agreement amongst themselves for renewable energy credits. On Thursday, she will briefly speak at a 2-day conference at Stanford titled Climate Resilience and Local Government Policy. She explained why the City of Palo Alto had been removed from the list on the conference webpage. Last week she was in Washington, DC, in her capacity as Vice Chair of the Bay Area Air District Board. Unfortunately, the senate voted to reverse the California waivers, so Palo Alto will have to address air quality without the requirements of the regulations. There was conversation related to the dismantling of the EPA, Office of Research and Development, and environmental justice programs. The delegation was educated about the reduction in funding for EV infrastructure, etc. The delegation supports the climate efforts in Palo Alto and the Bay Area and they encourage the City to pursue all means of advocacy possible. City Manager Comments City Manager Ed Shikada did not make comments. Action Items 6. PUBLIC HEARING / QUASI-JUDICIAL. 4075 El Camino Way [23PLN-00202]: Recommendation on Applicant’s Request for an Amendment to a Planned Community Zone District (PC-5116) to Allow for Modifications to an Existing 121-Unit Assisted Living and Memory Care Facility. The Additions Would Include 16 Additional Assisted Living Units and 172 Square Feet of Additional Support Space. Environmental Assessment: Exempt from the Provisions of the California Environmental Quality Act (CEQA) in Accordance with CEQA Guidelines Section 15301 (Modifications to Existing Facilities). Zoning District: PC-5116 (Planned Community). (Continued from 5/5/2025 - On May 5, 2025, the Council Received Presentations and Public Testimony; the Item Will be Continued to May 27 for Council Deliberation and Action - No Public Testimony Will be Heard on May 27.) Mayor Lauing announced that there had already been public comment and questions from Council to staff. Questions and comments to staff will be readdressed. Councilmember Lu queried, related to the daylight plane, if the units along the back fence will meet the more restrictive 10-foot and 30-degree setback. Senior Planner Emily Kallas answered that she will find out if that information is available. Councilmember Stone inquired why staff disagreed with PTC commissioners who favored the more restrictive daylight plane and if there will be RHNA credits. SUMMARY MINUTES Page 11 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Senior Planner Kallas replied the ARB recommended approval of the plans as presented, and although the PTC recommendation differs, it can be approved by Council. Staff wants Council to make the ultimate decision. Planning and Development Services Director Jonathan Lait added that the staff decision factored in the recent work done on the Housing Element, the aging population, and the limited available resources. It is not defined as a residential unit in the code, and staff did not treat it as such. There is a question if these can be claimed as RHNA unit credits, which needs to be discussed with HCD on approval of the project. Councilmember Stone mentioned that he supports such a conversation. He queried if Palo Alto Commons will continue to pursue the project if they are allowed to only build on the portion of the building not facing Wilkie Way. The Applicant Representative stated they are not interested in only the 7 units suggested by the PTC, so they returned with 16 units. There is no realistic way to build the 16 units along the El Camino side. Councilmember Stone asked if it will be all or nothing and if there will be guarantees in the TDM to protect neighboring communities from vehicular intrusion. He is concerned about the applicant’s history of noncompliance with the original TDM and conditions of approval. Although staff states the property contains a sufficient number of spaces for the expanded use, the lived experiences of the Wilkie Way neighbors tells a different story. The Applicant Representative confirmed that it will be all or nothing. Director Lait acknowledged that there was a previous TDM requirement, which appears to have not been implemented. The City did not follow up to make sure it was completed, but there are now more improved TDM monitoring programs. He expects it to be on the forefront of staff’s radar. There will be annual monitoring and reporting, which should ensure compliance. Councilmember Stone queried if the existing TDM can be enforced. Senior Planner Kallas responded that the TDM Plan is new. It has been reviewed by the OOT, and it is ready for implementation. It intends to reduce the weekday peak-hour vehicle trips by at least 20 percent. Director Lait added it is his understanding that the prior TDM was not implemented. A TDM plan is needed as a part of the PC, which staff will continue to pursue regardless of the outcome of this application. Councilmember Burt requested that staff speak to the improvements being made. SUMMARY MINUTES Page 12 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Director Lait answered that the land-use database is being used to record the TDMs approved through the entitlement process. A tickler system is needed for calendering to check on the annual plans, which he is working on with the Code Enforcement team. Councilmember Burt asked if the tickler will send Code Enforcement out and if there is a pursuit for stronger self-certification by principals. He has concerns that such an approach is not being embraced. He discussed parking on El Camino Way and questioned if there should be a change in Council direction to authorize PATMA to offer transit passes and other tools to workers on El Camino Way in addition to El Camino Real. Director Lait responded that there is value in self-certification by principals. He wants to understand what administrative authority would implement that short of Council direction through ordinance, for example. Staff will look into it. He will return with information related to PATMA offering transit passes. Councilmember Burt mentioned that he is interested in such a motion no matter what project might be approved at this meeting. Councilmember Lythcott-Haims voiced her support to give PATMA passes to the employees of Palo Alto Commons and others very adjacent to El Camino if not directly on El Camino. She asked why there is often a bollard in front of the disabled parking spot in the front parking lot. The Applicant Representative noted that he sent a letter to Council last week related to parking policies they implemented. They are parking cars on site. The Applicant Representative stated there was bollard in front of the disabled parking spot because maintenance was occurring. Councilmember Lythcott-Haims noted that there has been an extended period of a lack of trust by some neighbors and that there is worry that whatever might be agreed upon at this meeting could be violated. She questioned why the disabled spot has been blocked lately and if it is likely to continue. Executive Director Li Li answered that in the past the entranceway was blocked during construction for safety. Staff will be educated and the management team will inspect the situation daily. They never purposefully occupied that parking spot. To her knowledge, the spot had been blocked only once. Moving forward, the handicapped parking will be available. Councilmember Reckdahl inquired why the Staff Report did not offer 2 options – PTC’s recommendation and staff’s recommendation. Director Lait replied that staff should have expanded further on the PTC recommendation. In the future, staff will bring forward the perspectives of boards and commissions. SUMMARY MINUTES Page 13 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Vice Mayor Veenker commented that there should be an enforcement mechanism with fines and policies. She addressed the daylight plane and requested that staff explain the reasoning behind the compliance referenced in the chart of Attachment D. She queried if the applicant approved of the daylight plane intrusion since a prior meeting with them and if glazing will occur for privacy issues. Senior Planner Kallas responded that, as this is a PC project, the adopted PC ordinance represents the development standards for the building and the property. The PC Ordinance is the zoning and the existing building is the development standard. The daylight plane measures 10 feet from grade and at 45 degrees, which is the appropriate development standard for the PC ordinance and for the property. It is essentially its own zoning district created by the PC. Regarding the applicant approving the daylight plane intrusion, the units on the second and third floors facing the neighbors have been pushed back 1 or 2 feet. For this project, obscured glazing is not included or considered necessary for privacy. Vice Mayor Veenker expressed that she is happy to hear that obscured glazing will not be included or considered. Mayor Lauing questioned why the front or side will not be built out, if there had been conversations to acquire the Goodwill property (to put more than 16 units there), what the rent ranges are for the health units for full care, how many units the Avant has, and if consideration had been given to putting in assisted-living units at the Avant. The Applicant Representative answered that the proposal is for 6 or 7 units on the front, some on the Goodwill side, and some adjacent to the Avant. There is not enough space to do more in the front. There had been conversations with Goodwill about acquiring property 10 or 15 years ago and they had no interest. He does not know if they might be interested now. The range of rents depends on the amount of care. The Avant has 44 independent living units. Consideration had not been given to putting in assisted-living units at the Avant. Executive Director Li answered that rents range from $6,800 to $15,000 per month, which could increase depending on the amount of care. Mayor Lauing stated that unit rents of $15,000 monthly would total almost $1.3M per year in revenue, which he encouraged the applicant to consider. He asked if Palo Alto residents will be given prioritization. The Applicant Representative discussed the policies from 1988. There is no policy to prioritize Palo Alto residents, but it serves Palo Alto residents. Any Palo Alto resident is welcome to move in tomorrow, which has always been the case. The Applicant Representative replied that 80 percent of residents are connected to Palo Alto. It is highly prioritized to serve Palo Alto. SUMMARY MINUTES Page 14 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Councilmember Lythcott-Haims stated that folks on Wilkie prefer that the exterior color be green or brown but the project proposes khaki, blue, and white. She queried if changing the paint color has been considered. The Applicant Representative answered that they are open to changing the paint color. Councilmember Burt inquired if the past conditions for approval will carry forward. Senior Planner Kallas responded that the existing PC Ordinance and the ordinance for the Avant are adopted by reference. Mayor Lauing remarked that the benefit defined by the application is 16 additional medical units. He spoke of issues residents have with parking and the lack of response from management. The PTC devised a very good position in their recommendation to put 7 units in the rear of the project. MOTION: Mayor Lauing moved, seconded by Councilmember Stone to approve the staff recommendations with the following changes: 1. Implement the Planning and Transportation Commission recommendation for the seven (7) new units - away from rear neighbors; 2. Create a tighter Transportation Demand Management program to ensure compliance and document the process and penalties for non-compliance; 3. Institute and enforce first-priority for occupants who are Palo Alto residents and specifically define this including length of prior residency (minimum one-year). Councilmember Stone stated the issue is not whether to have an assisted-living facility but instead whether expanding the project by 16 units will be a sufficient enough public benefit to offset the impacts on surrounding neighbors. He wants to fix some of the parking issues and preserve privacy interests and rights to natural sunlight, which this motion does. He questioned if “away from rear neighbors” is clear enough or it should specify “from Wilkie Way.” Director Lait responded that there should be a reference to the PTC recommendation. He thinks that documents which units will be supported. Councilmember Lu stated he worries about setting precedence in both directions. Parking, lights, and shadows will change along El Camino and other parts of the city with the Housing Element and plans for growth. He asked if there is information related to the units fitting within the 30-degree setback. Senior Planner Kallas answered she does not believe the proposed units facing Wilkie Way would comply with the lower daylight plane. The 7 units in the PTC recommendation does not represent an encroachment into the daylight plane. The only property line where the daylight SUMMARY MINUTES Page 15 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 plane applies is facing the Wilkie Way neighbors, and all of the proposed units would protrude into a 3:10 daylight plane if it should be applied. Vice Mayor Veenker asked if the applicant had expressed an opinion related to the economics of adding only 7 units. The Applicant Representative replied that adding only 7 units does not pencil out. The units will create virtually no additional traffic. What has been done in the parking garage has reduced parking in the neighborhood. Although he had not discussed it with his comrades, he proposed 13 units, removing 3 third-floor units facing the Wilkie neighbors. Councilmember Burt requested that Council comment on the revised proposal. Vice Mayor Veenker stated she supports the revised proposal. Councilmember Stone voiced that he is open to the revised proposal but he is not ready to make a decision at this meeting. He wants to hear from the residents and see the plan, which may need to return to the PTC. He is willing to put forward a motion and possibly include that and should it fall apart, this will be the plan. Mayor Lauing asked if Councilmember Stone wants to continue with the current motion but if the applicant wants to return with an alternative, then it will go through the process again. Councilmember Stone confirmed that is correct. Councilmember Lythcott-Haims commented that she is in favor of exploring 13 units. It is frustrating that the applicant did not take direction from the last session to put all additional units on the El Camino Way side. If the daylight plane is put to rest, then the issue will be parking and a significant breach of trust the community experienced at the hands of the applicant. She wants there to be tighter compliance with the City’s expectations in the manner of reporting on the part of the applicant on a regular basis to ensure that what may be agreed to will be adhered to. She requested that the rear paint be changed to what the neighbors desire. Such facilities are essential, and she supports a larger number of units if the other aspects are met. Councilmember Reckdahl asked if a parking lot is required or if they are required to have only certain parking spaces. Building 3 or 4 stories on a small portion of the parking would provide a significant number of units. He thinks there is room for additional units on the El Camino Way side, which should have been more thoroughly examined. Senior Planner Kallas replied that she thinks there are certain access requirements because it is an assisted-living facility. Councilmember Lu expressed that he is intrigued by the 13-unit concept. He inquired what the applicant needs to do to propose 13 units. SUMMARY MINUTES Page 16 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Director Lait responded that Council can decide to not make a decision on the project at this meeting. It can be requested that the applicant explore the 13-unit concept, and staff could return to Council with the revisions. If units on the third floor are eliminated, the total number of units would be 11, not 13. Council can direct staff to explore the revised project, which would not include third-floor units or units facing Wilkie Way. The applicant could elect to pursue that with revised plans, and staff would bring it back to Council. Mayor Lauing mentioned that he does not understand procedurally how that is different than voting on the motion. If it passes, the applicant can decide what they want to do, and if it is defeated, it will be over. Director Lait explained that Council could take action on the entitlement, at which point it would be an amendment. It could open up going through the process again. Council could give the director some level of authority to approve an increase between 7 and 11 or 13 units if it meets stipulated requirements, which he does not advocate for. Councilmember Lu remarked that he prefers to delay the item so the 13 units can be considered. Councilmember Reckdahl stated that he is skeptical of the 13 units. The issue is not just the third-floor units. Some of the first-floor units are 10 feet away from property lines. He supports the PTC decision and more units on the El Camino side, not the Wilkie side. Councilmember Burt noted that reduced units would reduce impacts to the daylight plane but not the impacts to the proximity to backyards. He queried how removing 3 units will address the problem if there are 5 units against the Wilkie fences. He does not assume that removing 3 units will address all the neighbors’ problems. There will still be issues with proximity, which he wants flushed out. The Applicant Representative answered that he recalls there being 6 units along Wilkie Way. The intent would be to remove the 3 with the closest setbacks. Councilmember Burt questioned if a revised proposal should go to the PTC how rapidly it would return to Council for final consideration. Director Lait responded that in the process he is considering it would not go back to the PTC. If it returns to the PTC, it would probably add 2 to 3 months to the process and a comparable amount of time for Council. MOTION PASSED/FAILED: X-X SUBSTITUTE MOTION: Councilmember Burt moved, seconded by Councilmember Lu to refer this project back to the Planning and Transportation Commission for a review of a project between 11 to 13 units that would eliminate the 3rd floor units adjacent to Wilkie Way backyards. SUMMARY MINUTES Page 17 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Councilmember Lu voiced the option should be considered and that he generally supports the spirit of the motion. He is unsure about it not being referred to the PTC and it just returning Council. Councilmember Lythcott-Haims commented she appreciates the spirit of the motion. She addressed it not being advisable that it be referred to the director, although he knows what the concerns are and may be able to determine the most nimble way to get the most number of units. She is in favor of anything that will enable a quicker resolution. She is comfortable vesting that authority in the director, but she will support the substitute motion if there is not agreement to do that. Mayor Lauing expressed he does not support the substitute motion as it could possibly take 6 months to address 3 units. He wants to vote on the original motion and for the applicant to return if they desire. Councilmember Burt mentioned that Council is not the right forum to fully vet a revised project. He understands that it would reduce by 3 to 5 units. Vice Mayor Veenker noted that the PTC is better situated to deal with this. She asked Director Lait to speak to the time estimate if it should return to the PTC. She wants the most units possible and that most of the neighbors’ concerns be addressed. Director Lait answered that it would return to Council from the PTC about 4 to 6 months from the point of receiving a complete set of revised plans. Vice Mayor Veenker spoke of trust needing to be rebuilt. She supports this approach. SUBSTITUTE MOTION PASSED: 4-3, Reckdahl, Lauing, Stone no 7. FIRST READING: Adoption of an Ordinance Amending Palo Alto Municipal Code Titles 18 (Zoning) and 16 (Building Regulations) to Modify the El Camino Real Focus Area, Implementing Program 3.4E of the Housing Element, and Updating the Housing Incentive Program. CEQA Status: the Addendum to the Comprehensive Plan Environmental Impact Report (EIR), Considered by the City Council on April 15, 2024, Analyzed Potential Environmental Impacts of the 6th Cycle Draft Housing Element Including Program 3.4E. Councilmember Lu recused as he has proposed and existing real property interests within 500- square feet of the El Camino focus area. Vice Mayor Veenker recused because she serves as outside patent counsel to Stanford, which has interest in the land. SUMMARY MINUTES Page 18 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 City Manager Ed Shikada recused because his spouse is employed by Stanford Medical Center, which the FPPC concluded represents a conflict of interest. Vice Mayor Veenker, Councilmember Lu, and City Manager Shikada recused from Agenda Item Number 7. Planning and Development Services Director Jonathan Lait voiced that Lexington Planning Jean Eisberg has been involved with the code updates from the inception of the initial housing focus area as well as the objective standards they are based on as part of the code reviews. Lexington Planning Jean Eisberg noted that the program started and was adopted in January 2024 and allows for an increase in development standards in exchange for providing 20 percent of residential units to lower income households on site. It was developed as an alternative to builder’s remedy projects and State Density Bonus Law. There have been several builder’s remedy applications and other multifamily, affordable, and office developments proposed in the area. The proposal in the draft ordinance is to expand the focus area, make changes to development regulations, and update the affordable housing requirements based on changes in state law. A slide was furnished showing the proposed additions to the focus area. The PTC and ARB supported further expansions beyond the sites, but the program in the Housing Element is fairly limited, so further expansions in general need to be part of a future action. The property owner at 2951 El Camino requested to be included in the focus area, which Council can choose to do. A slide was provided showing the changes to the development standards. A slide was shared showing 2 tiers of lot sizes, which in part is to incentivize lot consolidation. The sites proposed to be included in the focus area, in particular around California Avenue, are small, and larger sites are needed to allow parking and more development. There have been several changes to building massing and façade articulation – removing the height transition requirement and modifying the daylight plane and the upper story setback. It is proposed that the stair-step height transition be removed and that the daylight plane be changed. There is no hard and fast rule related to the daylight plane. The proposal in the draft ordinance indicates a 45-degree daylight plane starting at 16 feet. The PTC had a split motion recommending either a 45-degree plane or a steeper 30-degree plane. It is proposed that the upper story setbacks be a minimum of 10 feet. Stanford and the property owner at 3300 El Camino request that the special setback on the zoning map be reduced; however, it would constrain this potential development. Staff spoke with all the developers who proposed under the builder’s remedy and other property owners in the corridor. A slide was presented showing changes that would need to be made in the applications already submitted or adjusted in the City standards in order to have compliance and consistency between what the developers’ requests and what the zoning ordinance allows. In terms of process, there are 2 options that developers and applicants can pursue under the focus area. They can propose the projects to meet objective design standards, which will be subject to 1 study session with the ARB through the City’s review process, or they may choose to meet the more subjective context-based criteria and go through architectural review. She outlined the proposed changes to the affordable housing requirement. The projects already submitted under builder’s remedy could meet one of the options she outlined. Future projects submitted under the focus area standards will need to SUMMARY MINUTES Page 19 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 meet the 20 percent lower income requirement. She explained how the draft ordinance allows for exemptions from development impact fees for low-income units. Staff is requesting feedback on the changes to development regulations; the proposed expansion areas, including the request from the North Ventura property owner; the affordable housing requirements; the specific standards, including the daylight plane and the special setbacks on Hansen Way; and the ordinance. Mayor Lauing mentioned that he is seeing success in what is happening. He asked if 4 votes are needed. City Attorney Molly Stump responded that passage of an ordinance requires a minimum of 4 votes regardless of the recusals. Councilmember Burt asked what the height and the FAR are of the Acclaim Project. He asked why the draft ordinance is indicating 85 feet and if the housing focus sites are exempt from ground-floor retail. He stated that he supports 85 feet if there is retail, but he does not know why there would be 85 feet without retail, and he thinks the ordinance can indicate that, which will give incentive to retail. He wants to incentivize lot consolidation, affordable housing, and retail and requested that such be built in. He questioned if staff is suggesting the Hansen setback be less than 50 feet. He asked what the property behind 2951 and 2999 El Camino will be zoned as. Lexington Planning Eisberg answered that the Acclaim Project FAR is 4.0 and the height is 79 feet. She explained why the draft ordinance indicates 85 feet. The housing focus sites are not exempt from ground-floor retail. Retail is not necessarily required by the base district, but the Retail Preservation Ordinance could go into effect or retail might be proposed as part of the development. Director Lait added he believes the Acclaim Project is 7 stories. Retail is not required. It can be 100-percent housing developments. The Hansen setback is a policy question. Staff has no specific plans identified. He does not think doing away with the special setback will be prudent. He voiced that staff thinks 25 feet is acceptable. He believes the representative for that leased property is advocating for 20 feet. He does not have data related to 20 versus 25 feet. An analysis has not been done to determine the zoning for the property behind 2951 and 2999 El Camino in the eventuality of a project. He thinks the PTC expressed an interest in exploring options. As there was not an application before them, there was no desire to incorporate it into Tier 1. Councilmember Burt asked if Council can give direction to pursue rezoning and request that the PTC and staff determine the appropriate zoning to achieve the transition. Director Lait replied that Council can give direction to pursue rezoning and request that the PTC and staff determine the appropriate zoning to achieve the transition or it can be through the Council’s dialogue to create an invitation for the property owner to submit a text amendment application. SUMMARY MINUTES Page 20 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Mayor Lauing addressed a letter from Creekside and asked what the process is to average the encroachment on the daylight planes; what was discussed related to an open space credit; and if the Transportation Department has weighed in on Hansen Way. Director Lait replied that the process to average the encroachment on the daylight planes has not been identified. He does not believe an open space credit was discussed. He thinks it is recognition of some creek restoration work and an interest to tie that open space requirement into that space. Staff had spoken with the OOT about Hansen Way, and there was not a recommendation on what the reduction should be, if any. Councilmember Lythcott-Haims stated she is in favor if eliminating the Hansen Way special setback. She queried what limits will be applied to the nonresidential use if a residential building includes other uses in the El Camino focus area. She is concerned about inhibiting the height of a hotel that will have residential as part of the parcel. She queried if in the past Council encouraged the applicant to retain the hotel at Creekside. Director Lait replied there is an open question in the report related to the extent commercial components take advantage of the increased floor areas or heights. It is not reflected in the Staff Report, but there might be a way to distinguish between standards for commercial office and perhaps giving greater incentives for height or FAR for hotels. In the last prescreening application, Council encouraged the applicant to retain the hotel at Creekside Lexington Planning Eisberg added that for a mixed-use project for a site that is more than 10,000 square feet the FAR can be 4.0. As the ordinance is written, the nonresidential component is limited to whatever base district zoning allows. The height limit of 85 feet will not extend to the nonresidential component. As written, a standalone office or hotel will be limited to 50 feet. Councilmember Reckdahl questioned, regarding the special setback, if Transportation cares, if Council can do whatever it wants, or if it should not be addressed because there will be an assessment returned later. Director Lait replied that Transportation cares. It is difficult for staff to make informed policy decisions about a special setback when there are no written policies in place. Roadway changes might be of interest along Hansen. There is not enough in the record for staff to make a definitive recommendation at this time. Councilmember Reckdahl asked what that means for Council’s action at this meeting and if Council should recommend a number or if staff should further refine it. Director Lait replied that staff does not have clarity on how the special setback is intended to be used other than bus access and bike lanes and improvements to those. He thinks the OOT would concur that 50 feet is more than needed. No action can be taken at this meeting on the special setback. If there is interest in redevelopment/more housing units at the corner of Hansen and El Camino Real, Council should give staff direction to reduce the special setback to SUMMARY MINUTES Page 21 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 20 feet, which can be left open for staff to further study and refine it. He thinks planners, Transportation, and representatives of Stanford would agree that reinforcing the edge at Hansen and El Camino with a building would be beneficial, which can only be achieved by reducing the special setback. Councilmember Reckdahl voiced that it seems reasonable to have some kind of pedestrian refuge island there and maybe a left turn lane. He thinks 50 feet is excessive, but he wants Transportation’s feedback. He inquired if there should be action at this meeting. Director Lait replied that staff welcomes feedback and requests that the Council motion address the special setback on Hansen to study a reduction to that special setback at or around 20 feet, which staff would study further and return with a recommendation, although it may not give perfect resolution to the development interest at, he thinks, 3300 El Camino. It will require an amendment to the zoning. Councilmember Reckdahl voiced he is comfortable with 30 feet and that it may be reduced later. He inquired if bringing it down to an intermediate number will be helpful. Director Lait replied that the long-term lease holders of the property indicated that 30 feet will not be sufficient to result in a structure at the location. Councilmember Lythcott-Haims noted that there is a Utilities easement cutting across diagonally about one-third of the way down the property to the south. Public Comment: 1. Mark J. commented that he represents 3150 El Camino Real. They support the proposed amendments especially as they relate to the exemption of below-market fees related to development impact fees, which is critical. The updates being considered strike an important balance for developers. They hope to start the project before year end, which will include 74 inclusionary affordable units. They encourage Council to broaden the BMR fee exemption policy so other housing projects can contribute to inclusive living in Palo Alto. 2. Thomas A. requested that Council extend the housing focus area to include 2951 El Camino Real and the adjacent parcels to promote high-density multifamily development as recommended by the Department of Planning and Transportation. He discussed the need for more housing in Palo Alto. 3. Ted O., Consulting Project Executive for the Creekside Inn, wants to work within the confines of the El Camino Focus Area Plan, although there are a couple elements in the draft ordinance that will not work for them. They need the 60-degree daylight plane for only 1 side of the creek, not for the whole property line. By reducing the hotel to what is allowed by existing zoning, about 40 percent of the proposed hotel would be lost. He requested there be latitude for a hospitality use versus an office or a retail use. SUMMARY MINUTES Page 22 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Mayor Lauing noted that Council has the letter submitted by Ted O. 4. Winter D. (Zoom) explained caution should be taken if the focus area south of Matadero is extended. She expressed that the area has the lowest vacancy rate in Palo Alto. She requested that Matadero to Los Robles Avenue be excluded from focus area expansion and that an additional node be designated across from the triangle node to include Tesla, McLaren, and Walgreens and that there be an increase from 1,500 to around 2,500 square feet when replacing ground-floor retail. 5. Amie A. (Zoom) with Palo Alto Forward commented they submitted a letter in strong support of the focus area zoning changes, especially extending them even beyond the 20 or so parcels being considered. She opined that daylight planes of 45 degrees, prescriptive upper-floor setbacks, lack of flexibility in open space, and retail requirements are barriers to housing. 6. Laura B. (Zoom) with Sand Hill Property Company remarked that they are working on developing a mixed-use project at 3300 El Camino using the focus area. They support the proposed revision to the focus area. They suggest removing the Hansen Way setback and that the rear and interior setbacks apply to above-grade structures only. She discussed a residential height of 85 feet being necessary. They want at least 50 feet in height to be allowed for office for 3300 El Camino. She requested that Council revisit the 20-percent BMR onsite requirement and that the focus area be allowed to pay an in- lieu fee for affordable housing, that they be held to the same standard as everyone else. 7. Manuel S. (Zoom) spoke on behalf of SV@Home and discussed the benefits of the draft ordinance and suggested that staff’s recommendations be adopted. Councilmember Lythcott-Haims spoke of a developer/applicant wanting to include their property south of Matadero, and she queried if that is included. She is in favor of removing the Hansen Way special setbacks entirely. She wants step backs to be determined on a case-by-case basis, rather than 10 feet being required, as she is concerned that it may affect the number of housing units. She wants the 3 El Camino and the 1 Olive NVCAP parcels to be added to the El Camino Focus Area. It is critical that the open space credit be examined for the property that includes the creek. The creek should count for the open space credit. Director Lait responded that those properties south of Matadero are included. Mayor Lauing voiced that he wants the hotel to be carved out of commercial or specified as an allowable use. He is comfortable reducing the setback to 25 feet. He questioned what has to be done to move forward with 2951, 2905, and 2991 and if 3 PTC members recommended a 45- degree daylight plane and 3 PTC members recommended 30 degrees. Director Lait answered that Council can direct staff to incorporate the properties flagged as Tier 2, and upon return for a second reading, it can be incorporated. Staff needs direction on how to incorporate the R1 property with the vacant commercial shell if it is to be incorporated into SUMMARY MINUTES Page 23 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 that area. He questioned if rezoning is necessary to R1 or if the development can be subsumed under the housing focus area. Assistant City Attorney Albert Yang answered that, as written, the focus area does not apply. It has not been specified how it will apply to the R1, but it could be modified to that. Regarding Tier 2, he asked if additional CEQA clearance is necessary before effectuating the rezoning. Lexington Planning Eisberg replied that the sites could be included as part of the buildout and part of the assumption of what has already been evaluated under the Housing Element, so adding the 3 sites fronting El Camino in the NVCAP would work. The map would be revised. Three PTC members recommended a 45-degree daylight plane and 3 PTC members recommended 30 degrees. The proposal is to standardize the daylight plane when adjacent to R1 or R2. Staff recommends 45 degrees. Councilmember Burt commented that hotels should be allowed to be the same height as housing. From a fiscal standpoint, hotels are tremendously valuable to the City. If zoning should be developed that would allow the parcel on Olive to be a transition between the housing incentive zone and R1, he asked if it would have to abide by the 45 degrees on that parcel down to the R1. Lexington Planning Eisberg answered that if zoning should be developed allowing the parcel on Olive to be a transition between the housing incentive zone and the R1 it would have to abide by the 45 degree on that parcel down to the R1. That parcel would have a side yard daylight plane requirement. Councilmember Burt expressed that he is hearing support to do that. He supports a 20-foot setback for Hansen, which will not be restrictive for a bike lane. He discussed top-floor step backs being important for urban design. Councilmember Stone inquired if the Housing Element deadline for Program 3.4 is in June. If 2951, 2905, and 2999 El Camino are incorporated, the deadline will not be met. He is interested in expanding Tier 2 and looking at the 3 additional properties, although there seems to be significant impacts on some of the R1 zones. He supports incorporating those 3 properties and the other Tier 2 in a future area plan. The below-grade setbacks should be removed if within the property, as he wants to encourage underground parking. Hotels should be treated differently than office and nonhousing uses and should be allowed to be as tall as housing. He supports the Hansen Way setback as Councilmember Reckdahl addressed it and the ARB and staff recommendation of the 45-degree daylight plane. He discussed it being unfortunate that the City has to respond to new state law around the builder’s remedy. He wants to keep the upper story setbacks because it is important to massing and scale. Director Lait responded that the 3 Tier 2 properties could possibly be incorporated within the deadline. Irrespective of the deadline, the outcome of the program will be achieved because of the Tier 1 properties. SUMMARY MINUTES Page 24 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Mayor Lauing queried if the open-space credit will come back for the second reading. Director Lait responded that staff needs direction on what should be done with the open-space credit. He thinks it will apply to only the 1 property with the creek running through it, so it may need to be focused to that property. There should be consistency across the board. Different zoning should not be created for each parcel. That site is different because of its proximity to R1 zoning and because of the creek. It will not be prudent to think of that contextually in a different way from the other properties if Council is supportive of giving some kind of credit, though it may not be for the reasons laid out by the applicant, but perhaps there should be recognition of a property constraint or the natural amenity associated with the creek. If Council provides clear direction, it will be easier for staff to come back with the second reading. Assistant City Attorney Yang clarified that items returning on second reading, if there are changes to the proposed ordinance, should be items Council provides clear direction for so there will not be unanswered questions for staff to address. If staff needs to exercise independent judgment, it generally requires a new first reading to allow for dialogue on the staff proposal. Mayor Lauing asked if that will impact deadlines. Director Lait responded that it could potentially impact deadlines. He explained that it could potentially return on Council’s consent calendar as a first reading, but it would not qualify if there needs to be a new body of analysis and work. There can be a conversation if it makes it into a motion and there is ambiguity. MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to adopt an ordinance amending Chapters 18.14 and 16.58 of the Palo Alto Municipal Code (PAMC) (Attachment A) to implement Program 3.4E of the Housing Element regarding the El Camino Real Focus Area expansion and modification of development standards with the additional amendments: 1. Modification to the Hansen Way setback to 20-foot; 2. Inclusion of Tier 2 properties at 2905, 2951, and 2999 El Camino Real; a. Direct staff to return to Council with a proposal for Rezoning the property behind 2999 from R1 to an appropriate transition for housing below-grade setbacks 3. Allow below-grade encroachments to PR zone properties within the Focus Area that are subdivided by parcel map; 4. Height for the El Camino Focus Area would be 80-feet for development for housing only or 85-feet for housing with ground-floor retail or hotel development SUMMARY MINUTES Page 25 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Councilmember Reckdahl asked if the below-grade parking setback referred to a setback from one parcel to the next or from a parcel to the roadway and if there could be vehicular traffic on top of below-grade parking. Director Lait answered that the below-grade parking setback refers to within a parcel to property lines/boundaries. He believes a special setback would be carved out so below-grade parking would not exist under a roadway. He discussed that it would affect the property seeking the adjustment, which he does not believe would impact to the overall project design. It is one large lease hold that will be subdivided into new parcels to keep the residential and commercial entities separate. The creation of a property line between the 2 uses would create a setback boundary. Staff is trying to keep the special setbacks free and clear of encroachments. Mayor Lauing asked if that will be workable and if 80 feet would discourage development. Director Lait replied that the current housing focus area allows 85 feet in height. Councilmember Burt explained why he built into the motion 80 feet for housing developments and 85 feet for housing with ground-floor retail or hotel development. Director Lait voiced that he believes that will be workable. He thinks the reason for the 85 feet relates to allowing retail use on the ground floor. Retail would probably not cover the full floor plate on the first floor, so he questioned if the provision for the 85 feet should extend if there is any amount of retail or if it should be over just the retail portion. Councilmember Burt asked if a certain amount of retail requirements has been set or if a ratio of the ground floor is needed. Director Lait replied that he does not believe there is a minimum set amount for retail. Councilmember Burt mentioned that he is in favor of that height for the whole building provided that it will include whatever will be established as the appropriate amount of ground- floor retail. He asked if staff can return that percentage to Council on a second reading. Director Lait explained that will be difficult to establish and he does not know if it could be established by the second reading. Councilmember Burt inquired how to move forward if an incentive for retail will be retained without giving them 85 feet if there is no retail. Director Lait mentioned that he is struck by how much 5 feet (between 80 and 85 feet) will be recognized with upper-level step backs. There may be other ways to incentivize retail. Councilmember Burt noted that he envisions a conflict because there could not be a top-floor step back and the extra 5 feet for ground-floor retail with the height limit, which may not incentivize retail. If that is the case, he would withdraw Number 4 from the motion. SUMMARY MINUTES Page 26 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Councilmember Reckdahl stated he agrees with withdrawing Number 4, although there could be another 3 feet if there is to be retail. Councilmember Burt stated retail is required in certain locations, so maybe that covers it well enough. Mayor Lauing inquired if the need to have contactual discretion could be given to the Planning Director to define open-space credit where the natural environment could be enhanced. Director Lait questioned if Council wants to allow such. Councilmember Lythcott-Haims remarked that her understanding is that it is 100 feet of open space per unit or resident, which the applicant is close to, but there is a naturalized creek running through the property. The creek should count. Director Lait stated that if 3 Council members agree with that concept, it will be sufficient direction for staff to return on second reading. If the sentiment is that a naturalized creek should count for up to 50 percent of the open space required for a project, staff could work with that. Councilmember Reckdahl stated that is reasonable. Mayor Lauing noted that 4 Councilmembers agree with that concept. There should be constraints that it has to be exposed for the public to see it, etc. 4. WITHDRAWN FROM THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER FINAL MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to adopt an ordinance amending Chapters 18.14 and 16.58 of the Palo Alto Municipal Code (PAMC) (Attachment A) to implement Program 3.4E of the Housing Element regarding the El Camino Real Focus Area expansion and modification of development standards with the additional amendments: 1. Direct staff to pursue modification to the Hansen Way special setback to 20-feet; 2. Inclusion of Tier 2 properties a 2905, 2951, and 2999 El Camino Real; a. Direct staff to return to Council with a proposal for Rezoning the property behind 2999 from R1 to an appropriate transition for housing 3. Allow below-grade encroachments to RP Zone properties within the Focus Area that are subdivided by parcel map; 4. Up to 50% of open space can be fulfilled by area of a natural creek space; SUMMARY MINUTES Page 27 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 5. Direct staff to allow provisions of up to 85-feet hotel development and increased FAR and to allow hotel on RM Zones within the Focus Area. Director Lait noted that language related to restoration will be tied in if the creek should be restored. He questioned if Item 1 should direct staff to amend the zoning map to reduce the special setback to 20 feet, which would not return on second reading. Assistant City Attorney Yang answered that staff needs direction to pursue that. It is a separate modification to Title 21. He asked if 50 percent of the creek space should be counted as open space or if 50 percent of the creek space should be counted as 50 percent of the open-space requirement. Director Lait replied he thinks it is the latter. Councilmember Burt inquired if there will be a definitional requirement on creek boundaries. He noted that it is usually the top of the embankment. Councilmember Lythcott-Haims commented she is concerned with below-grade encroachments as it is another thing being put in place because of a specific applicant. Number 3 does not address the toward-Hansen piece. Director Lait asked if a below-grade parking garage is problematic at Hansen Way. Councilmember Lythcott-Haims remarked they want to go into the setback with the underground parking. Director Lait responded that will get into complications with respect to what the special setback might be used for in the future, if anything. He wonders how impactful that might be relative to lost parking spaces and whether it would be problematic. Councilmember Burt questioned if staff can return with a specific exception to address that if it is appropriate. Director Lait answered that he has to consider how to write the language for the second reading. Councilmember Reckdahl expressed that engineers will address it being strong enough for cars to maneuver on top of it. He does not want underground parking to constrain transportation. Mayor Lauing declared that it will return for a second reading. Lythcott-Haims discussed why she appreciates the 85-80 feet clarification. Councilmember Stone inquired if PTC has reviewed Tier 2 sites. SUMMARY MINUTES Page 28 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Director Lait replied that PTC looked at all the sites and broke them up into different tiers. Tier 2 sites will return under a separate initiative. Councilmember Stone questioned how the Tier 2 properties referenced in the motion will move forward in the process and how much vetting the PTC provided, etc. Director Lait stated that the 3 Tier 2 lots can be incorporated with tonight’s action. He stated the PTC discussed those properties and correspondence was turned in, but there was hesitancy because it was unknown what would happen with the R1 property. With no project before them, the PTC was not prepared to support it. Lexington Planning Eisberg added that the PTC supported including the entire Tier 2 within the focus area. Upon starting the CEQA analysis, the entirety of all Tier 1 and 2 sites could not be accommodated. The PTC looked at Tier 2, but she does not recall there being a discussion related to the 3 particular sites. When they saw the actual ordinance, they looked at only the Tier 1 properties. Director Lait asked if it is Council’s intent to allow hotels as a part of the housing focus area. Some of that site in particular is located in residential zoning, which may not allow for hotel uses. He asked if within the project boundary on the housing focus area site a hotel would be allowed to have a FAR up to 2.0 and a height up to 85 feet on the whole site. Councilmember Burt stated that his intention is that it be the same FAR and height as residential, 4.0 and 85 feet for hotels. Director Lait inquired if it is intended for existing and proposed hotels to stay and to allow for provisions up to 85 feet in height. Councilmember Burt acknowledged that is correct. Director Lait does not know if 4.0 is the correct number because it still needs to be a housing development. Currently 2.0 is allowed for hotel overlay zones. The project anticipates 1.0 FAR. Councilmember Burt noted he is thinking about the zone, not a specific project. Director Lait commented that hotels should be allowed throughout the housing focus area. Councilmember Reckdahl queried if there is a CEQA problem. Director Lait replied there is not a CEQA problem with the changes and the scope of work staff has done. Councilmember Burt added that including all Tier 2 was a CEQA trigger. SUMMARY MINUTES Page 29 of 29 Sp. City Council Meeting Summary Minutes: 05/27/2025 Lexington Planning Eisberg stated that the draft ordinance limits nonresidential uses to the 50- foot height limit and the FAR limit from the base district. If hotel or retail development should not be limited, the limitation should be just to the office use. Councilmember Burt confirmed confidence that staff understood the intent of Item #5 for the motion, and that they would return with specific proposals. FINAL MOTION PASSED: 5-0-2, Veenker, Lu recused Mayor Lauing thanked everyone who worked on this. Adjournment: The meeting was adjourned at 11:23 p.m.