HomeMy WebLinkAbout1994-11-21 City Council Summary Minutes Regular Meeting November 21, 1994 ORAL COMMUNICATIONS ....................................... 74-161 1. Contract between the City of Palo Alto and California Building Specialties for Remodeling of Second, Third and Fourth Floors of Civic Center ..................... 74-161 3. Utilities Advisory Commission recommends to the City Council approval of Amendment No. 1 Service Agreement Form E (MD No. 923) between the City of Palo Alto and Mojave Pipeline Operating Company Applicable to Transportation Service Under Rate Schedule FT-2 ....... 74-161 AGENDA CHANGES, ADDITIONS, AND DELETIONS .................. 74-161 5. Finance Committee Recommendation re Approval of the funds obtained from the Public Employees Retirement System Assembly Bill 702 credit be maintained in an expendable trust fund (continued from 10/17/94) ....... 74-161 6. Mayor Liz Kniss, Vice Mayor Joe Simitian, and Council Members Ron Andersen and Micki Schneider re Report on League of California Cities Conference held October 23-25, 1994, in Long Beach, California ................... 74-162 7. Ordinance Amending Various Sections of Chapter 16.09 (The Sewer Use Ordinance) of the Palo Alto Municipal Code (continued from 11/14/94) ........................ 74-163 8. Planning Commission recommendation to approve in concept the acquisition of 753 Alma Street for the development of Single Room Occupancy (SRO) housing as described in the report to the City of Palo Alto from the Palo Alto Housing Corporation "Feasibility of SRO Housing Development at 753 Alma Street, Palo Alto, CA" dated October 14, 1994 ................................ 74-170 9. Contract between the City of Palo Alto and B & B Land-scaping Contractors Inc. for Landscape Improvements at Hansen Way Substation ................................. 74-195 10. Cooperative Agreement between the City of Palo Alto and the Santa Clara County Housing Authority to Allow the
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Housing Authority to Issue Tax-Exempt Bonds to Finance Acquisition of Arastradero Park Apartments ............ 74-196 ADJOURNMENT: The meeting adjourned at 11:30 p.m. .......... 74-196
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The City Council of the City of Palo Alto met on this date in the Council Chambers at 7:10 p.m. PRESENT: Andersen, Fazzino, Huber, Kniss, McCown, Rosenbaum, Schneider, Simitian (arrived at 8:30 p.m.), Wheeler ORAL COMMUNICATIONS Claudio Martinez, P.O. Box 273, Palo Alto, spoke regarding bones and tools of early man, diamonds, concert, Ohlone artifacts, and the Stanford Chapel Mosaic. Edmund Power, 2254 Dartmouth Street, spoke regarding communication with the public (letter on file in the City Clerk's Office). CONSENT CALENDAR MOTION: Council Member McCown moved, seconded by Fazzino, to approve Consent Calendar Item Nos. 1 and 3. 1. Contract between the City of Palo Alto and California Building Specialties for Remodeling of Second, Third and Fourth Floors of Civic Center; change orders not to exceed $25,000 3. Utilities Advisory Commission recommends to the City Council approval of Amendment No. 1 Service Agreement Form E (MD No. 923) between the City of Palo Alto and Mojave Pipeline Operating Company Applicable to Transportation Service Under Rate Schedule FT-2 MOTION PASSED 8-0 for Item Nos. 1 and 3, Simitian absent. AGENDA CHANGES, ADDITIONS, AND DELETIONS City Manager June Fleming announced that Item No. 2, the Finance Committee recommendation to approve prioritized categories of Storm Drain Capital Improvement Projects, and Item No. 4, Calibration of Storm Drain Computer Model, had been removed by staff. UNFINISHED BUSINESS 5. Finance Committee Recommendation re Approval of the funds obtained from the Public Employees Retirement System Assembly Bill 702 credit be maintained in an expendable trust fund (continued from 10/17/94) Council Member Wheeler said the Finance Committee had had several meetings to discuss the disposition of the Assembly Bill 702 funds received from the Public Employees Retirement System (PERS). The Finance Committee had returned to Council at one point with a recommendation of the criteria that would be used to determine the Committee's suggestions for those funds. The Committee had recommended the funds be applied toward funding that was currently
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an unfunded liability for post-retirement health benefits. The recommendation conformed to the four criteria established for the use of funds. The funds would not be used to fund or augment ongoing programs or recurring costs but would reflect the one-time nature of the receipt of the funds. The funds would be applied to existing post-employment obligations. The application of the funds would have the most positive budget impact over a five- to ten-year period. The Finance Committee also directed staff to discuss potential applications with the employee groups, which staff had done. The Committee also decided there were items that related to the general subject of post-employment benefits that needed further discussion. The motion retained those items in Committee for discussion during the next year. MOTION: Council Member Wheeler for the Finance Committee moved approval of the staff recommendation that the funds obtained from the Public Employees Retirement System Assembly Bill 702 credit be maintained in an expendable trust fund and utilized to supplement the City's increasing post-employment health benefit costs of future years. To the extent that retirees' health benefits exceeded a reasonable percentage of gross payroll costs (one and one-half percent), the Assembly Bill 702 funds should be drawn upon for such specific purpose. Depending on future post-employment health benefit cost increases, the Assembly Bill 702 funds should be available for such purpose until approximately the Year 2008. Further, that the subject of retiree health benefits be held in the Finance Committee and that staff be directed to report on the following issues: 1) Retirees eligible for Medicare, either because of employment in the private sector or the eligibility of a spouse signing up for Medicare; determine the procedures followed by the City and Public Employees Retirement System to ensure that eligible retirees enroll in Medicare; 2) What steps the City could take to contain future costs of retiree health benefits; 3) Determine whether the City should begin to pre-fund future health benefit costs just as it did for pension benefits; and 4) That staff would also raise issues of equity with regard to health benefits. MOTION PASSED 8-0, Simitian absent. 6. Mayor Liz Kniss, Vice Mayor Joe Simitian, and Council Members Ron Andersen and Micki Schneider re Report on League of California Cities Conference held October 23-25, 1994, in Long Beach, California (continued from 11/09/94) Council Member Andersen said items from the League of California Cities (LCC) Conference included environment, engaging the citizenry, emergency preparedness, law enforcement, and planning. The changing price structure in recycling was brought up. Indications showed that cardboard, newspaper, and plastic prices were up. The glass prices had dropped by 400 percent. The City of Brea had a "barn raising" concept in which its citizenry actually participated in the city process, which included actual physical labor. The concept that the community would gather together to bring about some change that was good for the community rather than just to bring about how the city could serve
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the community appealed to him. He was impressed by Cathedral City's emergency preparedness. Each neighborhood had a very specific plan and system designed for a big emergency. He believed Palo Alto needed to work more effectively in that area, and Palo Alto might draw suggestions and ideas from Cathedral City. A city that Palo Alto might be able to identify with was Moreno Valley, which received a Helen Putnam award for its approach to combat graffiti. Much of what Palo Alto had done had been very similar to what Moreno Valley had carried out. He had passed onto staff that might be useful for expanding the City's approach to graffiti which involved more volunteer work. Another session described how some cities were providing services through an office in a downtown mall. The mall concept gave people a place to pay bills, register, and sign up other than the hours of 9 a.m. to 5 p.m., and it made the mall a vital link to the city. It would be interesting to explore that in the context of Palo Alto's Downtown or the South of Forest Area (SOFA). Long Beach was proud of some of the progress it had made in its downtown, but the contrast was interesting compared to Palo Alto's vital Downtown. Council Member Schneider was impressed with the high regard in which Palo Alto was held by council members and city officials of California at the LCC. In particular, City Attorney Ariel Calonne was very well respected in the State of California. Pub-lic/private partnerships were occurring in many communities, and she looked forward to those types of partnerships in Palo Alto. Mayor Kniss's demonstration of the Internet was excellent. The workshop was well attended, and people stayed long after the workshop ended to ask specific questions. Mayor Kniss said the City Attorney had played a leadership role in the LCC, particularly in the area of the Brown Act. LCC had looked to him for interpretation of that complicated law, and the City Attorney had done an excellent job of leading the group forward. It was pre-election time, and a number of candidates spoke, including Kathleen Brown, Pete Wilson, and Dianne Feinstein. Overall themes that ran through the conference had to do with downtown development, what was happening in cities, and how cities protected their rights to monies in the state system. For cities to band together and know what the others had as problems was very valuable. The southern part of the state still was making efforts to move itself out of an economic hole. The conference was held in Long Beach, and Long Beach had redeveloped its downtown and put in extra effort to welcome attendees to its city. Long Beach was a shipping community. She and Council Member Schneider toured the entire shipping area, which was the fifth largest shipping community in the world. No action required. 7. Ordinance Amending Various Sections of Chapter 16.09 (The Sewer Use Ordinance) of the Palo Alto Municipal Code (contin-ued from 11/14/94) City Manager June Fleming said she would not participate in the
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issue because of her husband's employment. Director of Public Works Glenn Roberts said the staff report (CMR:494:94) summarized discussions that took place with Syntex Corporation representatives on three particular questions that they had raised and staff's response to those questions. Staff continued to meet with Syntex to discuss the issues. A continued difference between Syntex's desires and staff's recommendation became evident. The item returned to Council with staff's recommendation to approve the revision to the Sewer Use Ordinance in order to comply with regulatory requirements imposed by the Regional Water Quality Control Board (RWQCB) through a Cease and Desist Order and consistent with the CLEAN South Bay agreement for implementation of local limits. Council Member Rosenbaum said the rules were clearly for Palo Alto and the industrial cities which made use of Palo Alto's Regional Water Quality Control Plant (RWQCP). He asked whether the cities of Sunnyvale, Santa Clara, and San Jose, which had their own treatment plant and also put effluent into the Bay, had adopted similar rules and whether staff was familiar with what those cities had done with respect to the specific Syntex concern about the shutoff valve. Mr. Roberts replied yes. He understood that the ordinances being enacted by the three plants which discharged south of the Dumbarton Bridge were consistent. Manager of Environmental Compliance Phil Bobel had worked closely with representatives from Sunnyvale and San Jose to draft the Ordinance and ensure consistent language and consistent treatment of industry throughout the area. One of the main reasons the Ordinance was continued from its original first reading in August was to allow coordination with the other cities. Council Member Rosenbaum queried whether Syntex's concern was one which industries and the other cities had not made a point of. Mr. Roberts said the Ordinance clauses were common, but he was uncertain to what extent they may have been discussed or objected to in other cities. Council Member Rosenbaum asked whether the other cities had adopted their ordinances. Mr. Roberts said the other cities were in the process of doing so, but he was not certain of dates their councils would act on them. Council Member McCown asked about the timing of the City's obligation to adopt the Ordinance. City Attorney Ariel Calonne said staff report (CMR:494:94) stated the City had an extension through December 15, 1994, of the Cease and Desist Order requirement. The City would be at risk of incurring fines and penalties under the various CLEAN water laws after that date. The City had received a 60-day notice letter from the environmental groups under the CLEAN agreement indicating
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their desire to discuss and negotiate portions of the local limits established in the Ordinance, not the parts that Syntex was concerned with. The 60-day notice essentially provided an off-ramp that could end the negotiated settlement if the City were unable to reach further agreement with the groups. Council Member McCown asked how the adoption or non-adoption of the Ordinance would affect the notice from the environmental groups. Mr. Calonne said they were not directly related and would not affect it. Council Member Fazzino asked whether staff had heard from the Santa Clara County Manufacturing Group (SCCMG), the Palo Alto Chamber of Commerce, Varian, Hewlett Packard, or other major companies in the area which might be impacted to the same degree that Syntex was. He also asked what staff's perspective was on the difference between the impact on Syntex and other companies and concerns represented by trade groups such as the SCCMG. Mr. Roberts said the process of developing the Ordinance had been ongoing for approximately two years, during which time staff worked closely with the companies and trade groups mentioned by Council Member Fazzino. They had all expressed concern from time to time about the topic. However, staff worked toward building a consensus with the understanding that it was an act that needed to be taken, and they had agreed it was the best course under the mandated circumstances. Syntex continued to be concerned that the Ordinance was more strict than what Syntex wanted to have in its corporate environment. Syntex believed the language could be written in a way that would satisfy its concerns. Staff, however, was concerned that a change in language to satisfy one company would raise issues that would be of concern to others. Ted Fowlks, Syntex Corporation, 3401 Hillview Avenue, offered three alternatives to passing the whole Ordinance: 1) adopt the Ordinance without Section 16.09.032, "New Sources," 2) adopt the Ordinance with an exemption for research facilities from that section, or 3) adopt the Ordinance without Section 16.09.032(b)(12) regarding holding tanks. Section 16.09.032, "New Sources," was not required as it was not related to heavy metals and the issues under the Cease and Desist Order, as confirmed by Mr. Bobel. The section was an additional regulation and a concern to Syntex and several other Stanford Research Park companies. He met with six other companies who had expressed concern about that section. The letter from Mr. Bobel characterized the costs generally as insignificant. He had been a spokesperson and engineer for the industry and had spent 26 years building facilities around the world. Therefore, he knew the costs were not insignificant. There was no demonstrated evidence that holding tanks would reduce excursions from spills, which was the intended purpose of holding tanks. Neither holding tanks nor valves would do that. Syntex did not believe laboratory spills were significant source of evidence. Therefore, Syntex did not see why the holding tanks and the "New Sources" section in general
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should be applied to laboratories. The cost to put in holding tanks would run hundreds of thousands of dollars per tank. He urged Council to consider adopting the part of the Ordinance needed to meet the Cease and Desist Order, delay action on Section 16.09.032, "New Sources," and allow the Stanford Research Park occupants to work further with staff to come up with alternative acceptable language. Franklin Rice, Genencor International, 180 Kimball Way, South San Francisco, wanted to make a very important distinction between comments made by Syntex and the fact that the Genencor project was actually a future project to be constructed at the site of the building at 925 Page Mill Road. The future Genencor research and development center would be comprised of 170,000 square feet and would be the future home of approximately 400 research and development people and support staff. Genencor was in the early stages of designing and constructing the facility and wanted to continue to work with City staff, but Genencor needed additional time to fully analyze and quantify what the ramifications of the Ordinance for a newly constructed facility might entail. Beth Concoby, Genencor International, 180 Kimball Way, South San Francisco, said Genencor first became aware of the Ordinance in late August 1994. Genencor had not prepared written comments but had attended the November 2, 1994, meeting. Genencor had discussed concerns with the Ordinance and had talked with the industry group. Genencor appreciated City staff's response and willingness to work with Genencor and make changes. Changes had been made from industry's comments; however, there were still several items in the "New Sources" section that needed further clarification. Genencor was in agreement with Syntex regarding the laboratory discharge points and wished to work further on that as well as the items on interior floor drains and sewer traps. Genencor wanted Council to remand that portion of the Ordinance and proceed with other portions to put the City into compliance with the Cease and Desist Order. The industry could then be able to work with City staff to improve the language in the area that the industry was still uncomfortable with. Andrea Sutherland, Affymax Research Institute, 4001 Miranda Avenue, said she had an opportunity to look at other cities' ordinances. Palo Alto was ahead of them in getting the ordinance approved. Affymax had been around for more than five years and was accustomed to working with the RWQCB. The RWQCB gave Affymax a bottom line, and Affymax modified its practices to get to that bottom line. Affymax had a problem with the "New Sources" section because the section was not as prescriptive in terms of defining how best to get to that bottom line. The add-on that Mr. Bobel wrote to the amendment was characteristic of the way the RWQCB wanted to work with the industry. Affymax had no difficulty with any of the limits set, but Affymax wanted to see the "New Sources" section taken out and to rework some items discussed previously. Julia Bott, representing the Sierra Club, 3921 East Bayshore Road, said the Sierra Club was a member of the CLEAN South Bay coali-tion. She believed staff to be conscientious, reasonable, and
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responsive to people's concerns, but staff did not bend totally to them. She urged the City Council to adopt the entire Ordinance as proposed by City staff. Kirk Willard, Lockheed Corporation, 3255 Hanover Street, said the effort to come up with an Ordinance had been a very prudent program. Lockheed's concerns had been given in written and verbal comments to the City. He understood the particular items that were of most concern from Syntex had been changed. The new Ordinance would impact Lockheed, but Lockheed could work and live within the constraints of the Ordinance as it was currently written. Council Member Andersen asked, in light of the possibility that some portion of the Ordinance would be removed for a period of time for further consideration, why staff felt strongly that the Ordinance should remain as proposed. Manager of Environmental Compliance Phil Bobel said many of the comments heard specifically related to Section 16.09.032(b)(12) on page 7 of the draft Ordinance. One of two goals was to have a method so that a spill in a laboratory could be caught. The other goal was for the laboratory to be able to run its system so that if there were a violation in a given area, it could be better monitored with a tank that would allow them to capture, test, and then release the material. Both goals would be met by having a tank installed. There was a comment that a tank could be very expensive, and staff responded that a shut-off valve would be an acceptable alternative. There was further comment that a shut-off valve might be impractical. To make a valve work could be difficult in certain configurations. A new section then was added in the Ordinance stating that if the valve proved to be impractical or if any part of the Ordinance proved to be impracti-cal, a waiver could be granted. A requirement to put a valve in was relatively a low expense and still had the goal of being able to capture certain types of spills. Section 16.09.032(b)(12) gave the City some control over spills which occurred in laboratories. One area that had caused confusion was that although the cost of the valve was small, when installed on an existing facility in a remodel situation, it could be expensive. Staff clarified the definition of a remodel so that it was clear people would not be asked to change the sewer line if the remodel involved the heating and air conditioning system. The combination of clarifying the remodel and allowing exceptions was not something that would cost businesses substantial dollars, and it still met the goal of being able to control spills. The Council could remove Section 16.09.032(b)(12) without damaging the rest of the Ordinance, but staff would not recommend that. Staff would consider other changes over the months if Section 16.09.032(b)(12) were removed and return to Council at a substantially later date. Council Member Huber asked, if the Council were to remove Section 16.09.032(b)(12) and/or the entire Section 16.09.032, "New Sources," whether the City would still be in compliance with the Cease and Desist Order.
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Mr. Bobel said the entire "New Sources" section was more difficult to sort out because it had linkages to other parts. Removing Section 16.09.032(b)(12) would not impact compliance with the Cease and Desist Order. He did not want the Council to delete the whole "New Sources" section when the problems were not with the entire section. Council Member Huber asked how the cities of Sunnyvale and San Jose dealt with a similar problem. Mr. Bobel said the other cities did not have Section 16.09.032(b)(12) as a requirement. Council Member McCown asked who made the interpretation on the issues of practicality and remodel affecting the subject that the Ordinance was trying to accomplish. Mr. Bobel said Environmental Compliance made the determination, but City staff made sure the various departments were used the same definition of remodel. Council Member McCown said Syntex had multiple buildings and presumably were hooked up to the same sewer line. She clarified that unless a change were actually affecting the interior space where the valve could be installed, there would be no requirement to install one at that time. Mr. Bobel said that was correct. The opportune time would essen-tially be when working on the sewer line in the particular building being affected. Council Member McCown clarified the time meant when working on the line within a laboratory space where the valve could be added. Mr. Bobel said that was correct. Council Member McCown asked about a comment in the letter from Syntex regarding Section 16.09.032(b)(12) that said those mecha-nisms were redundant because there were other provisions in the Ordinance that were trying to or were controlling the same behavior. Mr. Bobel believed what was meant by that comment was the quantitative limits applied to the discharge were the bottom line and anything else was redundant. Unfortunately, there were many violations that occurred. For quite some time, Palo Alto's Ordinance and other cities' ordinances had been a mixture of a bottom line discharge-type standard and a design standard. New design standards were being placed in the Ordinance, and if design standards in general were redundant, then that one would also be redundant. Council Member McCown asked whether a design standard like Section 16.09.032(b)(12) was in ordinances for the cities of Sunnyvale and San Jose or whether the ordinances used design standards of other types.
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Mr. Bobel replied that Sunnyvale and San Jose did not have that standard in their ordinances. All of the cities called it different things. Sunnyvale called it "reasonable control measures" which were particular prescribed measures as opposed to bottom line requirements. Sunnyvale included the standards in its ordinance by reference, which appeared in another requirement. He was certain that a standard similar to Section 16.09.032(b)(12) was not in the referenced document either. MOTION: Council Member McCown moved, seconded by Andersen, to introduce the Ordinance. Ordinance 1st Reading entitled "Ordinance of the Council of the City of Palo Alto Amending Various Sections of Chapter 16.09 (The Sewer Use Ordinance) of the Palo Alto Municipal Code" Council Member McCown appreciated the concerns and the feedback about the attention and responsiveness of City staff on the issues. The City had to respond to the mandates of a legal Cease and Desist Order and the City's obligation as a discharger into the South Bay and balance that against the understandable economic concerns of the business community. She supported staff's recommendations on what the next steps were. Adoption of the Ordinance in its entirety would not cause staff to stop listening to the business community. She believed Council should move forward with the entire Ordinance. Council Member Fazzino said there should have been a clearer indication from the staff and members of the public that there was a legitimate disagreement before the issue reached Council. He would have felt more strongly about the arguments presented by Syntex, Genencor, and other companies if he had heard from the Palo Alto Chamber of Commerce, the SCCMG, and other interests who represented the companies. He was not suggesting that what the companies proposed that evening was incorrect. In fact, he might conclude that the companies were indeed on the right side of the argument and City staff needed to be better educated. He was uncertain about whether to leave in Section 16.09.032(b)(12) or whether to take it out because he suspected that if Council left it in, City staff would be very flexible and as accommodating as possible. However, he believed it was best to have staff meet with the companies over the next few months, address the issue, see if there were other less expensive ways to meet the spirit of the agreement, and then return to Council in three months' time for further discussion and action. AMENDMENT: Council Member Fazzino moved, seconded by Schneider, to defer Section 16.09.032(b)(12) for no later than 90 days to allow staff an opportunity to work with the businesses to see whether or not there were other ways to accomplish the intent of Section 16.09.032(b)(12). Council Member Schneider clarified the City would still be in compliance if Section 16.09.032(b)(12) were removed.
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Mr. Calonne said that was correct. Council Member Huber asked whether there was a time frame when Council would review more changes. Mr. Bobel said about every other year staff brought changes to Council. Council Member Huber asked, in the context of the amendment to the motion, whether staff believed there might be a means by which staff and the companies could come to an agreement so that Section 16.09.032(b)(12) could be worded or approached differently. Mr. Bobel said staff would attempt another idea if that were Council's direction. Much time had been spent discussing the issue and looking for another good idea. Council Member Andersen said the issue was highly technical, structured, and formal, and the subtleties were difficult to grasp. The Council had said it was supportive of staff's concerns and desire to have a fail-safe system in place. He was not persuaded by the testimony that evening that an agreement would be reached. He opposed the amendment. Council Member Rosenbaum supported the amendment. He referred to the first paragraph of the second page of the letter from Syntex dated November 7, 1994, in which Syntex spoke of having hundreds of laboratory discharge points and multi-storied buildings that might impose practical difficulties. The other reason why he supported the amendment came up in earlier comments that the cities of Sunnyvale and San Jose could get along without a requirement such as Section 16.09.032(b)(12). All the cities were discharging to the same Bay. Council Member Huber supported the amendment. He asked why there were three different jurisdictions and water quality plants writing three different ordinances if all were trying to comply with the same Cease and Desist Order. Mr. Roberts said the RWQCB gave each discharger the flexibility to structure its local limits through its sewer use ordinance to best meet local conditions. Staff attempted to focus on an area that was of a bigger preponderance in Palo Alto than it was in the cities of Sunnyvale or San Jose. Palo Alto had more of those kinds of facilities, so the risk to Palo Alto was proportionally greater in controlling spills in those facilities than it was for the other agencies. All the performance measures would not be seen consistently from city to city. They would be custom tailored to the type and nature of the individual discharger within those cities. AMENDMENT PASSED 5-3, Andersen, Wheeler, McCown "no," Simitian absent. MOTION AS AMENDED PASSED 8-0, Simitian absent.
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REPORTS OF COMMITTEES AND COMMISSIONS 8. Planning Commission recommendation to approve in concept the acquisition of 753 Alma Street for the development of Single Room Occupancy (SRO) housing as described in the report to the City of Palo Alto from the Palo Alto Housing Corporation "Feasibility of SRO Housing Development at 753 Alma Street, Palo Alto, CA" dated October 14, 1994. Senior Planner Catherine Siegel said the purpose of the public hearing was to consider the feasibility study which was prepared by the Palo Alto Housing Corporation (PAHC) under contract with the City regarding the proposed use of 753 Alma Street for Single Room Occupancy (SRO) housing. The PAHC prepared a conceptual design for 106 units of housing with two levels of parking. The PAHC had also done a preliminary assessment of the key land use and environmental issues. The conclusion of PAHC's study with which staff concurred was that development was feasible from both a design and financing standpoint. The SRO housing could be developed to be compatible with neighboring businesses, and environmental impacts of the housing could be mitigated. Staff would return to Council on December 19, 1994, with a request for authority to extend the option agreement to June 30, 1995, and a Budget Amendment Ordinance (BAO) for up $32,500 to provide funds for the cost of the extension should it be necessary to go the full six months. Staff would then proceed with the environmental studies necessary to permit exercising the option. Staff would return to Council with the funding and development agreement with the PAHC upon completion of that environmental process, including the proposal for the transfer of funds necessary to buy the site and to allow the PAHC to proceed with preparation of the entitlement applications discussed in the staff report (CMR:518:94). City Attorney Ariel Calonne believed "approve in concept" would be a stronger statement of suggested action than what would be advisable given the environmental review. Council should under-stand that it really meant staff would be directed to go forward and do the environmental work, and other documents would be necessary to complete the transaction. Planning Commissioner Kathryn Schmidt said the Planning Commission supported staff's recommendations. The vote was 3-2 with two commissioners absent that evening. Basic issues were discussed with good input from the audience including a representative from the ownership of two of the other similar types of hotels in Downtown Palo Alto and the architect of the facility who had designed similar facilities in San Diego. The Planning Commission did not believe the SRO would compete with the existing SROs in Palo Alto. The demand exceeded the supply and the SRO would fill a need in Palo Alto. The Planning Commission did believe that parking was a problem in that area, but it was not incumbent on the particular project to solve that parking need. Parking was a City problem. Parking requirements for that specific facility would be adequately taken care of by the parking suggested in the
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conceptual design. The site was not perfect, but it would work in the location and would be compatible with the other uses there. The auto uses in that part of the City were important, but there were other residential uses nearby, and the SRO would fit in. The SRO would be run by the PAHC. PAHC had 25 years of experience, and its process of selecting tenants for the facility would be different from the process for getting tenants in the other SROs in Palo Alto. The SRO on Alma Street would be likely for the working poor. There would be an application process versus the essential walk-in situation that existed at the other SROs. Another point was that the site was currently available. Council Member Fazzino was concerned that two Planning Commis-sioners did not participate in the SRO item. He asked whether there were conflicts of interest or whether the Commissioners were absent. Ms. Schmidt said they were absent. Council Member McCown asked what the parking requirements for current uses were in the area where the site was located which was not in the South of Forest Area (SOFA) assessment district. Director of Planning and Community Environment Ken Schreiber said most of the buildings in the area were constructed many years before the City had zoning and parking related standards as the City had had in the last 20 to 25 years. Under the City's zoning ordinance, if a site were deficient in on-site parking but the use had been in operation since before the regulations went into effect, that use could continue. For example, an existing use required 20 spaces; it had 5 spaces on site and historically did not provide the other 15. If there were a change in use and the new use had a higher parking requirement, e.g., 30 spaces rather than 20, the obligation of the property owner/user was to provide the increment between what would have been required for the previously existing use and the new use plus what was provided by the site. In other words the former use required 20 spaces and provided 5. The new use was 30, and so the new requirement would be 15, or 5 plus the difference between 30 and 20. What had happened over time between the historic development of the area and the City zoning regulations was that the intensity of activi-ties in the area significantly exceeded the amount of off-street parking that was available within the area. Use of on-street parking was compounded by the many cars brought about by well established, quite successful auto service uses. Council Member McCown clarified at some point property owners could be asked to vote to create a new parking assessment district, but otherwise the City did not have regulations that could increase the parking stock if uses did not change. Mr. Schreiber said that was correct. The City did not have any regulations that would require a use to reduce or eliminate a non-complying parking condition. Council Member McCown clarified in that particular area the City's
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current rules were that if an upgrade of a building or property were done and use were changed, the property owner/user would not have to provide all of the 30 spaces. Only the increment between what would have been required for the previously existing use and the new use plus what was provided by the site would be required. Mr. Schreiber said that was correct. The same rules applied to all properties in the City. Council Member Wheeler asked whether Whole Foods Market fell under the present regulations whereby there was a change in use of the building, and therefore, it was not required to provide suffi-cient parking to accommodate that total new use but was required to provide the incremental number of spaces when the Whole Foods Market opened up. Mr. Schreiber said that was correct. Whole Foods Market replaced the car dealership that was on the site, and its parking require-ment was 66 spaces which was satisfied in the lot across the street and was less than what would be required for a new standalone food store. Council Member Wheeler asked whether historically there had been any discussions with the property owners or business owners in that area around the potential formation of an assessment district. Mr. Schreiber said that issue had come up at a variety of public hearings and public discussions, but there had never been an assignment given to staff to explore the potential for that area to have enough square footage or valuation to support an assessment sufficient to carry the bonds necessary to do parking. Council Member Wheeler clarified not only had the City Council not given that kind of assignment but also there had not been support from the property owners from the area to do the same thing. Mr. Schreiber said it was an issue that came up periodically at a Council meeting or Comprehensive Plan meeting, but there was little if any follow-up interest expressed to staff. Staff had not heard interest from the private sector. Council Member Andersen clarified the 66 spaces at Whole Foods Market did not include the parking used at that time on the 753 Alma Street site. Parking on the Alma site was a standalone arrangement for its own employees. Mr. Schreiber said that was correct. Council Member Andersen clarified the arrangement did not comply with City demands. Mr. Schreiber said that was correct. The arrangement was for the private sector and depended upon the terms of the lease, which could be terminated by the property owner at any time consistent with the lease.
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Mayor Kniss clarified the feasibility study mentioned the possibility of adding more underground parking at a greater expense. Mr. Schreiber said that was correct. Mayor Kniss clarified another level could possibly be established, but there was premium on that basis. Mr. Schreiber said the question became how that possibility could be financed and whether the spaces, given the cost per space, would be an appropriate, economical way of providing parking in that area. Sally Probst, representing the League of Women Voters of Palo Alto, 735 Coastland Drive, said the League of Women Voters (LWV) agreed with the high priority given to low-income SRO housing in the Housing Element of the City's Comprehensive Plan and in the Comprehensive Housing Affordability Strategy (CHAS) documents. Palo Alto, like any other city, needed people to work in its retail stores, restaurants, and health care and child care facilities. Many of the jobs were low paying and filled by single people, and the City did not have affordable housing for those people, requiring them to commute from neighboring communities. Surveys showed that many people preferred to live near their workplaces for economic and other reasons. The 753 Alma Street site met many of the criteria for low-income SRO housing. The site was also close to food, drugstore, and medical facilities and public transit. The site was available. The PAHC had completed the feasibility study that the Council had requested. The PAHC held public meetings where interested citizens could present their concerns. LWV members attended some of these public meetings. The PAHC hired an architect who had experience in designing and building SROs in an urban community, and PAHC had consulted with acoustical, air quality, and parking experts. The resulting report was thorough and answered the concerns raised about noises and odors. Sufficient parking was planned with the double underground parking to serve the facility, and the SRO would not impact the neighborhood any more than with any other development of the site. Pleasant, healthful, economical and feasible housing could be built at the site, and the noise and odor concerns could be met. The City staff had agreed with the report and recommended proceeding. SRO housing could successfully coexist with the neighborhood auto uses. LWV urged the Council to exercise its option and to proceed with the appropriate steps necessary so that low-income SRO housing could be built at the site. Jim Christenson, 2441 Bryant Street, said Palo Alto was a drive-through, drive-to city. The result was bumper to bumper traffic on the streets. His son lived in a Downtown Palo Alto hotel for more than a year without a car, and the room was expensive but substandard. The San Jose Mercury News published a favorable editorial about a possibility of SRO housing on Alma Street. He envisioned Palo Alto with broad walkways and bikeways connecting Stanford Shopping Center with Downtown, more Downtown places to
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buy groceries, and people living in Palo Alto without having to own a car. Now was the time to seize the moment and secure the property on Alma Street to build an SRO to allow more people who worked in Palo Alto to live there, which could mean 100 less cars driving to Palo Alto to work each day. Owen Byrd, 173 Waverley Street, said when Lee Wieder and he appeared before Council several months before to present a report on the myths and realities of affordable housing, Council Member Andersen urged them then to return when specific projects were being considered. He had spent some time studying and writing on housing and planning issues and was there that evening to speak in favor both of siting the SRO housing at that location and of preserving the adjacent commercial use. The CalTrain tracks were the development spine of the Peninsula, from a regional growth management perspective. The closer a development was to those the tracks, the greater the allowable density and intensity should be for economic, environmental, and community-building reasons. Palo Alto had done a commendable job of siting new multi-unit housing near that transit line, but more affordable housing was needed as demonstrated by the crisis in Silicon Valley. The 753 Alma Street site was one of the best. It was only seven walkable blocks from a train station. It was sited within a vibrant commercial district, offering a variety of employment opportuni-ties. That type of housing at that location made good planning sense. The health of future residents could not be compromised, but he trusted the PAHC to protect the health of the people, and he believed the technical challenges to the project could be met. Ellison's Body Shop next door was rightly concerned about the affect of any development at that site on its ability to continue its business. Ellison's was a valuable business that was an important part of the City's commercial mix. He had taken his car to more than one of the car repair shops in that area, and he hoped they all continued to prosper. Those who subscribed to the "new urbanist view" that cities were improved by blending residential and commercial uses bore the burden of reassuring existing land owners and businesses when new uses were proposed next to them. Ellison's had two potential threats that had to be addressed: 1) the City would eventually zone it out of business and 2) the new neighbors would complain the existing activity was a nuisance. The City could explore two methods to protect Ellison's interest if that SRO were built. 1) Ellison's could be protected against rezoning by a development agreement with the City that guaranteed the existing use for a specific period of time. The technical changes to Ellison's that would be needed to accommodate the residential use next door would qualify. The threat from the City would disappear with such an agreement. 2) Ellison's could be protected against a nuisance claim by its new neighbors by a covenant running with the land on which the SRO was sited. Such a covenant would give notice to all current and future owners and tenants that Ellison's use was valued by the community and protected from challenge, as long as the health of residents was not being impacted. The City could require such a covenant as a condition of approving the project. Neither of the two options should delay Council from deciding that evening to proceed with the project but could be considered as Council moved
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forward. The Council had an opportunity that evening with that project to show that Palo Alto could meet the needs of people who had to have housing and the needs of the business community. Marlene Prendergast, Executive Director, Palo Alto Housing Corporation, 540 Cowper Street, said the PAHC had been in business for 25 years, and it was proud of the affordable housing that it produced for Palo Alto. PAHC believed it had done a thorough feasibility study, given the design was preliminary and conceptual at that point, and had concluded that the SRO housing was feasible and worked well on that site. PAHC had found the technical issues of noise and smells could be solved without major effort or expense. Therefore, the housing use was compatible with the adjacent commercial uses, and the construction of new affordable housing at 753 Alma Street was financially feasible with the City's help. PAHC's comments took a cue from the Palo Alto Weekly's favorable editorial that the project was a redefinition of SRO housing. PAHC would address four points to stress the redefinition of SRO housing. 1) Housing was for low-income wage earners, a group that was not adequately served at the moment. They were workers in fields such as food, health, and customer service who wished to live closer to their jobs and earned between $5.50 and $11 per hour. They were people who wanted more privacy, convenience, and safety. Experiences with the new SROs in San Diego, Santa Cruz, San Jose, and Sunnyvale indicated that many residents or applicants were employed in restaurants, shops, transportation, and security services with incomes between $7,000 and $16,000 per year. Tenant outreach would be through employers, and tenant selection would be based on usual procedures for permanent rental housing, such as credit and landlord references, security deposit, and month-to-month tenancy. 2) The project provided mini-studio housing units with kitchen and bath, 9-foot ceilings, adequate light, fresh air, some community space, and adequate parking. PAHC had been working with Rob Quigley, an architect nationally known for his work with the new type of SRO housing. 3) The location was appropriate for the new type of SRO housing because it was exactly where that type of housing was intended to be. The housing would be in a downtown commercial area close to services, jobs, and transportation. Potential SRO residents would not be bothered by noise and fumes by designing the project to mitigate the issues of Alma Street. The project would provide adequate parking for its use. 4) The financing of such a project through the use of low-income tax credits, a private mortgage, and a sizable City subsidy was feasible. To obtain an allocation of tax credits was becoming more competitive, but having a target population and a significant local financial commitment was the most positive case for tax credits. Mayor Kniss asked about the market niche in comparison to the Barker and Craig Hotels and how the SRO would be different from the other dwellings the PAHC controlled. Ms. Prendergast said the target population was workers and low-income wage earners. PAHC had discovered in its research that when a target population was there, outreach and marketing was done to that target. PAHC had discovered that was what worked to
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fill up SRO housing. The Barker Hotel, which the PAHC was currently renovating and would soon reopen, did not have kitchens and individual bathrooms and had historically been targeted to people on social security. They generally went into the Barker Hotel through the Urban Ministry. Mayor Kniss clarified redefined SRO would be a step up from what had been the accustomed SRO view. Ms. Prendergast said the redefined SRO was very different. Council Member Huber said the staff report (CMR:518:94) indicated the possibility that students could qualify. Palo Alto had a fairly large student population. He asked how a student could qualify, what the criteria would be, and how PAHC would ensure that the residents were not all students. Ms. Prendergast said under the low-income housing tax credit program, a student was very rigidly defined and was a subject of great debate. There were many high-priced lawyers studying the issue across the land. Generally, a full-time student whose tuition was paid by somebody else did not qualify. However, a student who might be part-time or full-time and a single working parent was very specifically defined in the regulation. There were different definitions under the HOME program, but students were defined in a way that a full-time student at Stanford, for example, whose parents were paying tuition did not qualify. Council Member Schneider clarified employment was not a requirement for residency. Ms. Prendergast said that was correct. Council Member Schneider asked how often incomes would be verified so that residents would not go above the maximum. Ms. Prendergast said normally PAHC did verification once a year. Rob Quigley, 660 Kendall Avenue, reviewed the size of the project so that Council would have an image of what was being discussed. He presented slides of people living in SRO projects in San Diego, which gave a visual representation of people whom Ms. Prendergast described. He showed a room plan of the J Street Inn in San Diego, which had an enclosed separate bath, a kitchenette, a hallway with an entrance door, a bed, couch, and television set. He showed slides of the Island Inn in San Diego. The SROs that were built with that room plan did not get at the core issue, which was how to provide economical, low-end housing for working people who deserved dignity in his/her living environment. The problem was the feeling of living in a bedroom with the bed as the dominant feature. It really was a redefinition of SRO because the SRO proposed a quantum leap in the evolution of what the room was. He showed slides of the unit. The goal was to provide the amenity not of a studio apartment but of a 250-square-foot one-bedroom apartment with the definition of the various areas. He showed slides of the site on Alma Street. The lower floor, half
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below grade, had 42 parking spaces accessed from Alma Street. The two trees that existed on the site had been saved. The second level, half above grade, would also have 30 parking spaces. The upper level would be accessed from the alley, and the alley, which would serve the parking, would have less traffic on it by virtue of the project. There were two levels of parking, a lobby and commercial space, and three levels of wood frame studio rooms above that. The courtyards were special. He voted that the SRO units were laid out remarkably well on that particular site. The lighted courts were more generous than what he had been able to put in the other projects. There was light at the end of the corridors, which were relatively short for a project of that type. There was a library. The upper floor had an open deck to allow sunlight into the solar collectors on the roof. A generous and substantial manager's unit was important to have high quality help. He showed slides with a sky view of Ellison's on the corner, the BMW Service next door, and activity along the street frontage. Council Member McCown asked whether Mr. Quigley had experience in terms of how residential uses could fit together with uses that were potentially of concern to residential neighbors so as to not be incompatible with one another. Mr. Quigley said he had been involved in projects built in downtown areas that were more urban than Palo Alto. There was a certain noise level involved. Projects had not been built directly adjacent to an auto body shop. The project in San Diego had been built directly adjacent to a Greyhound facility for washing and cleaning buses, and there had not been a problem there. The sound issues could be handled technically by spending more money on acoustically higher grade windows. The building had been designed so there would be no openable windows on the north side adjacent to where the painting took place. The odors, which were not toxic, could be vented through a pipe and discharged above the project. People could be placed in quieter rooms if they were hypersensitive to the issues. Council Member Fazzino clarified the windows would not be openable. Mr. Quigley said that option was being considered. The sound noise criteria could be met, but windows could be opened if residents desired. A portion of the windows would need to be sealed in some places in a worst case scenario. It depended partly on the funding requirements; there were different criteria. Council Member Fazzino asked how high the proposed smokestack would be to resolve the fumes issue. Mr. Quigley said about 20 to 30 feet. Council Member Fazzino said the design approach Mr. Quigley proposed for the site was somewhat different from what was done in San Diego. He asked whether the proposal was appreciably more expensive.
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Mr. Quigley said all the figures that PAHC was working with included the room. The cost was about the same. There were more windows and an extra corner in the proposed design, which were more expensive, but the cost was minimized by making every room identical. Rooms varied in most of the SROs built in the Palo Alto area, and that cost money. In the project, the focus was in the amenity of the room rather than in different types of spaces. Council Member Fazzino noticed that all the individuals pictured were men. He asked what percentage of individuals living in the San Diego project were women and what the expectation was with respect to the possible gender breakdown in Palo Alto. Mr. Quigley said pictures were mostly of men because he was more confident asking men if he could go into their rooms to take their pictures. He said 25 to 30 percent of the residents were women in the existing projects in San Diego. Vice Mayor Simitian understood Council was looking at a project which had been submitted as a feasibility model, not a proposed project. Environmental assessment work would be done as the City moved forward with a real project that deserved consideration. He did not want people to become uncomfortable because what was being discussed was something that was designed to show whether or not it was feasible. He did not have questions because he was antici-pating that a real project would be seen at a later date. Council Member Huber asked, if windows were designed so that they could be opened yet when closed were relatively soundproof, whether over time those windows would lose their ability to keep sound out, thus potentially increasing complaints. Mr. Quigley said he did not know. Council Member Huber asked whether those types of windows were used in the projects in San Diego. Mr. Quigley said yes. Special windows for other projects had been used when the sound ratings were too high for traffic noise. Council Member Huber asked what types of standards would be met in the inside. Mr. Quigley said Mr. David Easton would discuss that in more detail in his presentation. Council Member Wheeler appreciated Vice Mayor Simitian's reminder that Council was discussing the concept, not the final solution. The stack would appear to be the most feasible from a technical standpoint and from a monetary standpoint. She asked Mr. Quigley whether a stack could be done in an aesthetic or pleasing way. Mr. Quigley said there was a particular spot that was correct for a stack of that kind. The stack could be a flagpole or a spire. The symmetry of the building built up to a fire stair would need
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to be elevated at the rear to provide code required access to the roof, and if the stack were located right at that point, it would actually look very purposeful with the overall design. He liked the stack solution. Council Member Schneider asked the age of the oldest building that Mr. Quigley had worked on. Mr. Quigley said the first one was finished and occupied in 1987. Council Member Schneider clarified that was in San Diego. Mr. Quigley said that was correct. Council Member Schneider asked what inherent problems Mr. Quigley had learned from that building that he had been able to apply to subsequent projects. Mr. Quigley said the project on Alma Street would be the sixth project, and he had learned more with each one. Fortunately, recent architectural graduates had lived in some of the SROs and had told him exactly what he had done right or wrong. He had also stayed in each of the projects for research purposes and had talked to a number of residents. A user survey had been done on the first project which showed people wanted a library or a quiet place for studying and reading. He also learned about creating a community so the circulation in the buildings was designed for people to meet one another. The corner rooms were always the ones that people wanted because they had light from two sides and a special ambience; that was what inspired the Alma project. Parking of course was an issue. The parking need for all of the projects in San Diego, which was different from Palo Alto's, was about 0.2 spaces. David Easton, Palo Alto Housing Corporation, 540 Cowper Street, said architecturally Mr. Quigley knew more about the new type of SRO housing than probably anybody in the country and had been a tremendous help in the development of the concept and of the actual project. PAHC had also studied the site with a number of experts in the fields of parking and traffic, acoustics, air quality, financial analysis, and construction estimation. All of the consultants had concluded that SRO housing could be constructed on the site. The environmental and land use issues had been identified and could be mitigated at a reasonable expense. He would not discuss in detail all the technical aspects of the feasibility, but the project team was available to elaborate on any of the areas that the Council wanted more information on. The project team could, however, elaborate on the parking study that indicated the mixed use area did not have adequate parking. The SRO could not solve the parking problems of the SOFA area. The SRO would provide all the required parking on site for its tenants, their guests, and the office use. SRO housing by its very nature with access to transportation and jobs in the Downtown was intended to reduce the reliance on the automobile by its tenants. That reduction of auto use was consistent with the desire to reduce traffic in the community and
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in the region. The project team could elaborate on the acoustical environment at the site which was affected by CalTrain, Alma Street traffic, and the surrounding commercial uses. The proposed use of acoustical windows would dramatically reduce the interior noise to acceptable levels based on State of California standards, and that level was a weighted average required for all types of housing. The air quality at the site and surrounding areas could be discussed at length, including the potential affect of paint fumes on future tenants. Any potential health risk to SRO tenants would disappear by eliminating the odors associated with the adjacent painting operation. The orientation of the SROs away from the paint source could provide a fume free room. Additional-ly, the design included an exhaust stack extension to disperse the emissions higher in the atmosphere. Fresh air would be provided to each room by mechanical ventilation from a clean source. In that way SRO tenants would not be affected by the painting operation next door. Finally, the project team could elaborate on the funding of the project through equity generated by tax credits, conventional mortgage financing, and City contribution. The project would take a large commitment of the Housing Reserve or other funds from the City, but it could benefit from the $4 million of tax credit funding currently available and proposed for the site. Technically, the project was feasible from all areas studied. SRO housing on Alma Street was truly an opportunity to provide housing close to jobs and transportation for service workers in Palo Alto. Council Member Huber said with regard to tax credits, political changes were occurring in Washington, and he asked whether there could be effects on the housing aspects that could impact the Alma Street project. Mr. Easton understood the tax credit program was a permanent program, which was renewed annually without consideration, but certainly political changes could modify that status. Ms. Prendergast believed the tax credit program was permanently in place as long as people did not abuse it. Actually, she believed the Federal Department of Housing and Urban Development (HUD) funding was in more trouble. Joe Martignetti, Palo Alto Housing Corporation, 540 Cowper Street, said financing was a topic he believed made most city councils squirm in their seats because eventually it reached a subsidy question. The 106 units proposed that evening would cost approxi-mately $7,500,000, and that would also include $650,000 for the cost of land. Layered financing would be needed, based on PAHC's experience and knowledge of that type of housing program, which was similar to taking building blocks and stacking them on top of each other until ultimately there was enough money to build the project. There would be three components: 1) tax credit, 2) conventional mortgage through a conventional lender, and 3) some form of gap financing which PAHC was recommending would come from the Commercial Housing Reserve Fund. PAHC essentially started with the tax credit component set the ground work for the other two components of financing. The federal and state housing tax
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credit programs would be the primary source of funding. PAHC would have to apply to the state for allocation of tax credits, and that would be both from a state and a federal standpoint. The state had a point system with which it evaluated all the projects. The one with the most points won. PAHC tried to design a project that would capitalize on all of those points. A maximum amount of points depended on the population that was served, and so PAHC hoped to serve a low-income population or 40 percent of median income. Another way to gain points was to have amenities such as libraries, laundry rooms, etc. Competition was high for tax credits. Ultimately, PAHC wanted to make the application as appealing as possible. PAHC would form a partnership with an investor after applying and receiving credits. That investor would basically have enough of a tax burden in which the credits would become very valuable. The investor would basically buy the credits typically at 55 cents on the dollar. That equated to 50 to 60 percent of the value of the project. PAHC hoped to attract an investor that would contribute approximately 53 percent of the cost of the project which would equate to about $4 million. The next component would be to take a look at the expenses and the income that the property would generate and compare that to under-writing from a conventional lender, which was similar to getting a mortgage on a home. PAHC looked at conventional underwriting criteria which would include 5 percent reserves and mortgage rates somewhere between 9 and 1/2 and 9 and 3/4 percent. The conventional mortgage of about $1.5 million could be put on the Alma Street property. The last component would bridge the gap of about $1.3 million to $1.5 million worth of funds. PAHC wanted to request Council to consider using the Housing Reserve Fund. PAHC believed that would be the appropriate source. The fund was established to provide new housing to try to offset the hous-ing/jobs imbalance. Obviously, PAHC would take advantage of other programs, if any, that would minimize use of the Housing Reserve Fund. Currently, PAHC had seen more complexities with HUD and some of the other funding sources. There were some problems with the site, but the problems were similar with any site that would be used for SRO housing. Conflicts could be mitigated and were solvable. The population was a redefined SRO. PAHC was not talking about a conventional SRO that would be seen in larger cities but was talking about housing people who lived in, worked in, and contributed to the City. He asked Council to support staff to move forward with the actual purchase of the site and the environmental work. Vice Mayor Simitian clarified the Housing Reserve Fund was the only source of City funds that the PAHC would use for the project. Mr. Martignetti said yes. Vice Mayor Simitian asked what the source of the funds in the Housing Reserve Fund was. Ms. Siegel said Mr. Martignetti referred to the Commercial Housing Reserve Fund, and the source of fees on commercial and industrial projects was for housing mitigation.
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Vice Mayor Simitian clarified all the City monies that would be used for the project were paid by developers specifically for housing mitigation. Mr. Martignetti said yes. PAHC would also need $650,000 for the land. He did not know what fund that came from. Vice Mayor Simitian clarified the funding came from the same source. Ms. Siegel said yes. Currently, there was a $2.7 million balance in the Commercial Housing Reserve Fund, and the cost of purchasing the site would come out of that fund. In addition, staff would apply to the state for federal HOME funds. Staff could possibly obtain up to a million dollars in those funds, which would lessen the drain on the City's Housing Reserve Fund. Vice Mayor Simitian clarified that if the City stayed with the Housing Reserve Fund, then there would be no additional monies paid by the general tax paying population in Palo Alto and it would be all developer fee money. Ms. Siegel said no General Fund monies would be used. Council Member Rosenbaum said parking was a big concern. There had been mention that there might be a surplus, i.e., tenants might not want to use or not have any demand for all the spaces. He asked whether the spaces could be made available to the adjacent businesses and whether the financing would allow that. Mr. Martignetti said when tax credits were used to finance a project, there was a basis to determine how much the credits would provide in terms of financing. Tax credit money could not be used to pay for part of the project that did not solely serve the residents of that project. For example, tax credit money could not be used to pay for added parking if that parking were not used to serve the residents. He believed there would be restrictions on other sources such as HOME. Council Member Rosenbaum said his intent was not to add a third floor of parking. He asked, if the 72 spaces proposed turned out to be a surplus, whether there was a way in which the City could finance or private mortgage could pay for the parking spaces as opposed to the tax credit financing. Mr. Martignetti said PAHC believed approximately half of the 72 spaces would be needed. PAHC had to be careful that no tax credit money would be used to build spaces that would not be used by the residents. Application of City subsidy to those spaces could be considered. PAHC had not done an in-depth study on that. Rose Thoits, 744 High Street, said she owned property located 300 feet of the proposed SRO site. The City did not notify the property owners of its intentions with the 1050 Arastradero property and rezoning that piece from residential to research and development, and the 753 Alma Street site was purchased on a lease
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option to mitigate the loss of housing. The rezoning of 1050 Arastradero directly affected all the businesses. Business owners found out about it through a newspaper article in the San Jose Mercury News several months after the City considered the proposed rezoning of the Arastradero property with the Keenan Land Company. Parking was a major concern. While Whole Foods Market and Ace Hardware had been a phenomenal success and had generated much needed revenue to the City, both had more employees than originally anticipated. Their employment agreements were to not use any of their on-site parking that were used for their consum-ers. Currently, the lot at 753 Alma could not house all the cars that parked for Whole Foods Market. The newly proposed color coded parking zones developed by the Palo Alto Chamber of Commerce and the City traffic planners would cover Downtown zones from Alma Street east to Webster Street and from Lytton to Forest Avenues. She asked about SOFA and where the SROs were proposed. The sleeper parkers would overflow into the neighborhood. There had been no consideration to those who tried to conduct a business and had parking needs. A huge parking deficit already existed which had yet to be addressed or resolved. The tremendous project should be put on hold until parking issues were resolved, even though the City had already expended over $149,000 to option the 753 Alma Street site and to investigate its suitability for SRO housing. There had been no environmental impact report (EIR) in the feasibility study for the SROs. That had to be done before a project of that magnitude could proceed. At its meeting of October 26, 1994, the Planning Commission was approached about the purchase of both the Craig and Palo Alto Hotels. Parking was not needed because there was the parking district. The City could come up with a solution to purchase and convert the Craig and Palo Alto Hotels into SRO housing if the City could rezone 1050 Arastradero Road and purchase the 753 Alma site on an option to suit the PAHC needs. She asked how the 753 Alma site could be considered upscale from the Barker Hotel for the very lowest of poor. Council Member Andersen said the property was not zoned for a parking lot. The same kind of issue would be there regardless of use and would still displace those cars. He asked if Ms. Thoits were interested in Council's pursuing the potential for an assessment district. Ms. Thoits said yes. The University Park Neighborhood Group held meetings, which Chief Planning Official Nancy Lytle and other City staff members attended. She had brought that issue up with Ms. Lytle at one of the meetings. Palo Alto Medical Foundation (PAMF) representatives came to one of the meetings and talked about moving the PAMF across the railroad tracks and possibly putting in a foot bridge at the corner of Homer Avenue and Alma Street so that people could walk to the clinic rather than drive their cars. She said it was a better place to put a parking structure for people who could utilize that parking structure and walk over to the clinic. The project would affect all of SOFA. RECESS: 9:45 P.M. - 10:00 P.M.
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Pearl Yarkin, 152 Homer Avenue, was opposed to the SRO proposal at 753 Alma Street because she felt it was a very poor location for any housing. The site was surrounded on three sides by auto repair shops, a main thoroughfare, and the railroad, making it totally unacceptable for housing. Palo Alto had recently taken the position that it wanted to preserve and maintain the auto repair shops in the SOFA, and now the City was faced with plans to develop 106 housing units in the center of those auto repair shops. There had been slow but orderly growth of that commercial district along the Alma Street corridor. There were the hardware store on Channing and Alma and the remodeled commercial building next door. To now place 106 housing units with a potential of 2 persons per unit would in effect place approximately 200 people on a lot that was 17,640 square feet or a little over a third of an acre in size. There was the probability that most people using cars either living, visiting, or servicing the building would be using Alma Street for ingress and egress. That would add to the already heavy traffic flow and increase the potential hazardous driving conditions on Alma Street. The property did not back up to High Street but to an alley. To say that some traffic generated by the occupants or others would use the alley failed to acknowledge that the alley was very narrow in sections and was used by heavy commercial users. She did not believe the City could restrict a single parent with a child from living there. She did not believe the commercial neighborhood on Alma Street to be a suitable place to raise a family. It was time for the City to cut its losses and drop plans to develop 753 Alma Street. Mayor Kniss clarified the alley was a City alley heavily used by those who lived or worked in that particular area. Mr. Schreiber said that was correct. Earl Ellison, 236 Galli Drive, Los Altos, owned and operated Ellison's Body Shop and Towing Service in Palo Alto. Ellison's had been in business in Palo Alto for over 65 years, and he supplied its own parking for employees and customers. The City had zoned out many of the businesses in the South El Camino Real area and in the Downtown area in favor of housing. The commercial and service areas were extremely small for Palo Alto's size, which also encompassed Stanford University. He believed the City should save what was left of the businesses and services. The City should ask the neighbors what they thought about the project. He submitted a petition (copy on file in the City Clerk's Office) signed by the business owners. They all expressed emphatic concern over the effect of displacing approximately 50 cars into the already overcrowded community per day. The petition repre-sented at least an excess of 90 percent of the SOFA business community, which meant 95 percent or more were against the high density housing for that site and were for retaining that property as a parking facility. He asked why Palo Alto was supplying the parking mitigation for a big office building on the Stanford property when Stanford owned thousands of acres. Council Member Andersen said Mr. Byrd mentioned a couple of points with regard to potential mitigations for Mr. Ellison's business,
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if the project should proceed. One was a development agreement and another was a nuisance covenant. He asked whether Mr. Ellison had given any thought or had any reaction to those suggestions. Mr. Ellison said he was interested, but he thought about an example that people would buy houses next to the airport, and then they would complain about the airplanes. Council Member Andersen said the suggestions would protect him in that regard. Mr. Ellison said that was a good idea. The City had zoned out so many of the businesses in favor of building houses of that nature that some people had to go to Menlo Park or Mountain View to get their car repaired. Council Member Andersen said his intent was not to put Mr. Ellison out of business. He asked whether Mr. Ellison was interested in exploring the potential for an assessment district. Mr. Ellison said yes. Council Member Wheeler said Mr. Ellison obviously had made many personal contacts as he went around with the petition. She asked whether he and his neighbors talked in terms of their willingness to form an assessment district and tax themselves to provide parking. Mr. Ellison said no, but his neighbors' main concern was parking, and he was certain that many people would be interested in an assessment district. Earl Schmidt, 201 Homer Avenue, said Council action for a positive commitment to use the 753 Alma Street site for SRO housing seriously contravened the ongoing constructive development of the new Comprehensive Plan. On March 4, 1994, Council's direction that the SOFA would not be an area for a CPAC workshop until after the Palo Alto Medical Foundation Redevelopment Plan was considered made sense. That disappeared in the Planning Commission hearing on that action a few weeks prior. That did not mean all the other Comprehensive Plan policies and issues would be voided and ignored for properties in the SOFA. Parts of the Comprehensive Plan should apply equally to SOFA and citywide. There was a statement in the Community Design Section of the Comprehensive Plan regard-ing improvement of the functional relationship between commercial and residential uses, preparation of a coordinated plan for SOFA that addressed land use compatibility transitions/adjacencies between residential and commercial uses, and preservation of the auto service district. A statement in the Business and Economics amplified business parking within the business area and preserva-tion of the automotive services district. Under the Transporta-tion Element, the need for controlled parking in surrounding neighborhoods for business and commercial areas was stressed. In the Transportation Element, there was an emphatic statement that in the Downtown area new development should not increase the total parking deficit beyond 1,600 spaces. SOFA was a part of Downtown
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whether acknowledged or not. The entire area suffered from the City's current parking deficit. The newly adopted color coded parking zones would only increase the parking pressures to the south and to the north. The PAHC's feasibility study findings for 753 Alma Street bore directly on the area's parking problems. The parking consultant stated specifically that "the general parking conditions indicate that there are no available spaces in the immediate area to accommodate overflow SRO parking. Therefore, it would be prudent for the SRO to supply sufficient parking for its tenants so as not to exacerbate these existing conditions." The study appendix used false reverse logic to state the existing auto ownership of rented households that justified the low proposed 0.50 parking space provision. The auto ownership characteristics of the 1990 census which were also in the appendix for the immediate SOFA blocks told the story differently. Eighty percent of the renters in that area owned an auto. Twenty-nine percent had two or more. Only 51 percent had one. That hardly justified the assumption that based on the selected 0.50 parking ratio, only half the units, or 53, would own vehicles. The potential tenants who expressed interest currently lived in the cities of Palo Alto, East Palo Alto, Redwood City, San Jose, Sunnyvale, Mountain View, and Belmont and commuted by single car or by public transit to their work in Palo Alto. The addition of the 40 or more vehicles owned by employees of Whole Foods Market currently parked on the 753 Alma site was totally ignored in the study and by the Planning Commission on the basis that it was zoned residential. The area lost a great deal of property by the way in which the transfer of that property was arranged and the Whole Foods Market development was established. There was more than adequate parking in the area, and there could still be adequate parking in the area. He urged Council not to add to the parking problem by removing 40 spaces and putting in less. Elsie Begle, 1319 Bryant Street, said the project would cost $7.5 million which was about $70,000 per unit. She had no idea how that compared with other SRO housing, but she believed that was very expensive. It meant $4 million of tax credits. El Camino Real had motels that could be refurbished for a lot less than $7 million and could provide reasonable housing. At the Planning Commission discussion, the Barker and Palo Alto Hotels were concerned that the rates of the proposed SRO would be 30 percent less than what they charged which would be a serious threat to their business. They suggested that the PAHC should buy both of their units. She believed the PAHC had done a wonderful job, but it was time to consider a more regional approach. Palo Alto had money but no land. The problem of SRO housing extended far beyond Palo Alto's boundaries. She found it unconscionable to throw out the 40 spaces used by Whole Foods Market's employees for parking. The 72 spaces might not be needed, and yet they could not be rented out. She believed the site was not right. Cheri Ellison, 236 Galli Drive, Los Altos, said the area had many driveways and averaged about eight cars parked tail to tail on one side of a street block. Approximately six city blocks would be needed to accommodate the displaced cars. She asked how that overflow would be handled in the decision-making process. People
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who lived in the community were already frustrated. People did not want to visit their friends in the community because parking was unavailable. The Council did not truly understand the impact that the project would have on the community. Council had stated several years before that auto repair and housing did not mix. Therefore, Council made the decision to create SOFA, but permeating into the SOFA was SRO housing. The City Council realized that housing and auto repair did not mix, so Council had zoned out auto repair. Her father was baffled at the thought of putting SRO housing among five auto repair shops when the mission statement of the Planning Commission was to find a location in which the facility blended into the community. She did not believe the project blended into the community. The paint fumes that went up the stack and out the doors should be considered. The site had been used as a parking lot for 20 years and served the community well. She urged those from whom Ellison's had personally heard to write to the City Council and express their true response. Council Member McCown asked how many parking spaces Ellison's provided on its property for employees and customers. Ms. Ellison said 45 spaces. Council Member McCown asked where those spaces were located. Ms. Ellison said Ellison's rented the lot across Alma Street. Council Member McCown mentioned the buildings that were on the other side of the alley that faced High Street and asked how much parking those businesses were able to provide. Ms. Ellison said she could not answer that. Council Member McCown clarified that Ellison's dealt with parking by renting spaces available across the street. Ms. Ellison said that was correct. Mayor Kniss asked what the actual zoning was on the property. Mr. Schreiber said the zoning was CD-S which allowed a range of retail office uses and residential use. Edward Hope, 24571 Jeremiah Drive, Dana Point, said he had been a developer of real property, land use decisions, and private/public partnerships on real property for over 20 years throughout California and the United States involving over $1 billion of real estate transactions. He had studied PAHC's feasibility study. He had prepared approximately 120 feasibility studies and had noticed from both the planning and the developing standpoints that it was a very neatly packaged process. Those who had studied PAHC's report would notice the design fit the maximum number of rooms with the exact number of parking spaces that could be provided on the one partially subterranean level in order for it to be financially feasible. The study said the development was required
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to provide parking for its own use. Most of the people who responded to a brief survey of the marketplace indicated that the people who would come and take advantage of that facility would live in the areas of Palo Alto, East Palo Alto, Redwood City, Sunnyvale, etc. He referred to page 43 of the feasibility study in which the Barton-Aschman Associates study included a cross section of the 1990 Census which showed the number of vehicles owned per renting individual in the various communities. There were certain percentages of people who rented homes in those communities. The communities were Palo Alto, East Palo Alto, and a special group called the Alma Street SRO Block Group. The range of those not owning vehicles went from 10 percent to 20 percent. The study used the 20 percent figure, the most aggressive, which said that 80 percent of those people owned cars. The average was 1.18 cars per household per renter in the Block Group. In Palo Alto 90 percent owned cars, and in East Palo Alto 86 percent owned cars. The Alma Street area could be accepted as the guideline from a planning perspective. That meant, with 106 units and 20 percent not owning cars, 21 rooms did not need any parking. There were 85 rooms that needed 1.18 spaces for each room. If it were 1, then 85 spaces would be needed. He saw 53 plus 12 for guests. That was 20 short of the 85. He referred to page 40 of the study which said San Jose had an ordinance requiring one space per unit when a property was within 2,000 feet of transit, which that site was, with a partial or full kitchen and full bath, which the units had. He did not know where the findings were for the San Jose study that made San Jose come up with that ruling. San Jose had more SRO housing than Palo Alto did. He referred to page 42 regarding SRO parking experience which showed the St. George Hotel in Santa Cruz had spaces leased to others. The spaces were leased because there was a city parking garage right next door to that facility as stated in the report. Studio 819 in San Diego had an excessive number of spaces. There was no data on what the adjacent parking was in San Diego, but San Diego had parking available throughout the city. San Diego was not Palo Alto, and to say the cities were similar and comparable was in error. He said the Alma Street project was at least 20 spaces underparked. Bill Thoits, 744 High Street, said the solar access his business had would be lost. The people who installed the solar system did a siting on the roof. He was concerned that the SRO which was about 15 feet behind his business would close off the sun. The business used the heat and would have neither light from the skylights nor any windows at the back of the building. Irene Sampson, 3992 Bibbits Drive, was a long-time resident and was very proud of Palo Alto's planning goals which included ensuring that the City had a broad range of housing opportunities available. Market forces took care of most of the middle- and upper-income ranges, but that was not true of housing for lower-income persons. SRO housing was one model for providing such housing, and the Alma Street site was an important opportunity. She understood that the studies done to date showed it was a good site near public transportation, shopping, job possibilities, etc., and that the building design could minimize problems for residents and allow it to co-exist with current businesses in the
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area. No site was perfect, but if the City continued to pass up good sites in Palo Alto, waiting for something perfect, the City would lose the good sites as well. She urged the City Council to approve the Planning Commission's recommendations and to take the next steps involved for the project to move forward. Ruth Lacey, 2340 Cowper Street, believed the City needed housing for those who did not make enough money. She understood the fear people had about the type of individual in SRO housing. A number of years ago she was a graduate student and lived in a 12-foot-by-20-foot room that had a little kitchen area and bathroom. She paid $45 per month. SROs did not exist then, but affordable housing was housing that would suit somebody trying to get into the business world and improve his/her lot. She supported SRO housing in Palo Alto. Patricia Saffir, 2719 Bryant Street, was delighted to hear that 753 Alma Street was being offered to the City for SRO location. The site fit all the criteria for SRO housing. It was near transportation, services, and recreation. She saw potential problems for the site and, therefore, was happy when the City Council ordered a feasibility study. She believed the study was thorough, and she was convinced that housing could co-exist in the neighborhood. She understood Ellison's concerns and those of the other neighbors. Mr. Ellison mentioned people who bought a house next to the airport and then proceeded to complain about the airport noise. However, as she read the PAHC study, the noise and odor complaints could be mitigated. The fumes were not known to have a potentially hazardous effect. She would not be convinced if somebody who moved into the housing complained later to the City. She believed Palo Altans had spoken loudly and clearly that they wanted auto uses to stay in their convenient location. Some possible legal ways could be investigated that would guarantee Mr. Ellison and the other neighbors that they would not be forced out. She did not believe the decision should be postponed until the SOFA study was completed. The housing was needed now, and she did not believe that the impact of one building on one lot could change in any major way the outcome of a SOFA study. She urged Council to approve the project. Bonnie Packer, 768 Stone Lane, was a member of the housing committee of CPAC. The objections heard that evening and the complaints from the neighbors were real, and she believed they could be mitigated. Solutions could be found through the EIR. Hopefully, Council would look at ways to solve the parking problem for the larger neighborhood. It was a wonderful opportunity to encompass a real mixed use idea for a wonderful purpose. She emphasized the importance of the SRO housing and the fine design that Mr. Quigley had brought forth, but as Council would see in the CPAC proposal, there was much discussion of well-designed mixed use to accommodate all the social things the City wanted to accomplish. A residential use next to auto uses would make the whole Alma area look more appealing and create more vitality. Council should embrace the opportunity to explore a well-designed project in such a place. From her experience it was acceptable to live near auto uses.
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Ellen Christensen, 4217 Los Palos, said two years before she opposed the redesignation of the 1050 Arastradero site from housing to research and development use. Council made the decision to move forward with that designation. The one positive outcome of that redesignation was that Palo Alto would get a piece of land upon which needed low-income employee affordable housing would be built. Council had an opportunity that evening to move forward and make that outcome a reality, and it had become clear in the last two years redesignating the industrial site did not produce a productive research and development use. Neither national economic forces nor private business decisions of particular corporations could be controlled. Council could control the fate of a much needed affordable housing project for the City. She reminded Council of some of the things she said two years ago. During the 1980s more than 8,400 new jobs were added to Palo Alto's economic base, while fewer than 1,200 new housing units were built, some of which were for senior housing. During the 1980s numerous extensive efforts were undertaken to identify many new housing sites. Some sites were even rezoned for housing, but since that time Council's actions had been a steady retreat from actually ever acquiring, requiring, or promoting housing on identified sites. The Council was considering abandoning housing on several sites near Page Mill, the Linus Pauling Institute, the Mayfield School, gas station property, and the Maximart site. The City had lost or had tied up the Urban Lane and the PAMF sites. Downtown parking lots had been declared off limits to housing, and many other identified sites had grandfathered existing uses with little likelihood for housing on them in the next 15 years. Once again the Comprehensive Plan process scrambled to identify sites. There was an opportunity to make affordable housing happen for which there was a demonstrable, desperate need. The site had been shown to be suitable for housing. Hopefully, the Council would have the fortitude and foresight to make housing happen. The Comprehensive Plan, CHAS, the new Comprehensive Plan, and Council talked about housing, but affordable housing needed more action, not talk. Making a decision to vote for affordable housing was like making a decision to have a baby. There were always many good reason not to do it, and yet when proceeded with, even with all of the arguments on the contrary, there was a result that was special. Human Relations Commissioner Trina Lovercheck, 1070 McGregor Way, conveyed for Janet Stone the Human Relations Commission's (HRC) support for the general concept of building an SRO in the Downtown area. The HRC had not studied the specific proposal and, there-fore, could not speak at that time about the merits of PAHC's proposal. However, Ms. Stone's experience in working with another nonprofit housing developer pointed to the fact that such SRO housing could work and could be an asset to the community. Ms. Stone assisted Mid-Peninsula Housing Coalition (MPHC) in the ground work for its SRO development in downtown Sunnyvale. The 123-unit complex was currently under construction and scheduled for completion in December 1994. The MPHC targeted service and other lower wage working people in its outreach effort to publicize the availability of the units. MPHC went to local
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employers to distribute applications for tenancy and enlisted the support of the Sunnyvale Chamber of Commerce and other community organizations. There was no reason why PAHC could not make a similar effort to ensure that the proposed SRO would serve lower income workers in Palo Alto. Ms. Stone was confident the PAHC would be able to effectively deal with any concerns about the Alma site that had been raised by neighbors and neighboring businesses. Ms. Stone urged Council support for proceeding with the process. She believed there was a definite need for low-income housing in Palo Alto. The site was not perfect, but none was. She believed the technical issues that had surfaced in the proposal could be solved. The City could not continue to say that the need for low-income housing should be recognized and supported and then turn down every specific project that came along. Her own child was a possible occupant of SRO. He lived in New York City, worked in a retail business, and earned $7 per hour. If he lived in Palo Alto, the SRO would be a viable option for him. Many other people in Palo Alto had children who worked in service jobs and needed affordable housing. PAHC managed many properties and had a good track record. PAHC would use appropriate screening processes to select tenants for the proposed project. She asked the Council to support the proposal and allow the process to continue. Bob Moss, 4010 Orme Street, supported the concept of SRO housing, and he believed the site was workable. He lived for two years in the President Apartments, four days per week while commuting from Southern California. That was fairly close to SRO housing. The 250-square-foot unit was smaller than his living room and his family room. The size should be increased by 50 to 150 square feet, and the total number of units should be reduced accordingly. There was a difference between a student living there for only three or four years and someone living there longer. Increasing the size of the units and reducing the total number by 25 or 30 percent reduced the parking requirements. Parking was a problem in the area. There also should be more open space with the units on the site. Reduced density and increased unit size also would reduce impacts on the neighborhood, and there should be more flexibility in the building design so the compatibility with the automotive uses nearby could be improved. The building could be set back more. He would be very concerned if the project and the parking issue seriously damaged the viability of Whole Foods Market. Council should be very sensitive to the overall impact the project would have. Council could approve the concept, but the issues had to addressed up front, not as afterthoughts. Fran Wagstaff, 2601 Cowper Street, worked for MPHC, and MPHC would be finished with the 119-unit SRO in Sunnyvale at the end of December 1994. She believed the demographics in Sunnyvale were not that different from Palo Alto's. MPHC always premarketed the units. The site was at 174 Carroll Street, which was a couple of blocks from the train station. The surrounding uses were a church, a roofing business, and a plumbing business, very similar to the 753 Alma site, although they were not auto service uses. The City of Sunnyvale required 30 percent parking for the develop-ment. The project actually had 34 percent parking. MPHC received about 600 applications, and 170 were over income, so MPHC ended up
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with 430 eligible applicants. The 430 eligible applicants had a total of 97 cars, which represented 23 percent car ownership. MPHC had found that the major source of income among the applicants was social security, about $7,000 to $7,500 per year. The second major source of income was local blue collar employment, about $12,000 to $14,000 per year. Those were primarily younger workers who worked at Macy's, McDonald's, Montgomery Wards, and some of the businesses on Murphy Street. The other characteristics of the 430 applicants were that there were 25 to 30 couples, and the rest were singles. Approximately 150 of the applicants were from Sunnyvale. There were about 25 percent seniors who applied, which surprised MPHC. There were 12 homeless individuals who were newly employed. There were eight single moms each with one child, with the age of the children ranging from one year to nine years. Two of the moms were currently homeless. MPHC believed that represented a sample of what Palo Alto should expect. The units in Sunnyvale were smaller than the ones being proposed by the PAHC. They ranged from 165 square feet to 300 square feet. The rents of $256 to $355 per month were lower. The financing package was very similar to what was being proposed. MPHC was planning to hire residents for desk coverage and would not require staff parking except for the manager. She invited the Council to look at the units. Gee Gee Williams, 340 Churchill Avenue, said in 1992 Sylvia Seman, former Executive Director of PAHC, asked her to survey potential employees in Palo Alto who would want to live in an SRO that was being looked at for Lot R. She interviewed 67 employees working for 22 employers in the area for over two months. Some of the employers included Alza Corporation, Hewlett Packard, Stanford University Hospital, Whole Foods Market, Walgreen Drugstore, Lytton Gardens, Palo Alto Nursing Center, and the Post Office. She met with the individuals one on one and presented the project as a one-room dwelling between 170 and 240 square feet in Downtown Palo Alto. Respondents had to make less than $12 per hour. She told them that the rents would be $250 to $400. The average length of time the employees had worked in the City was 3.5 years, and their average pay was $9.11 per hour. She interviewed a California nursing assistant at Casa Olga who had worked for Casa Olga for 7 years and for a total of 3 Palo Alto nursing facilities uninterrupted for 14 years. She made $7 per hour. She could not afford a car, and she walked to and from her East Palo Alto home every day down University Avenue. She found the kitchenette attractive about the proposed SRO. She wanted a place to do her laundry, and the walk to work would be shorter. The second person she spoke with was a 47-year-old Hewlett Packard technician who lived with his mother in Palo Alto. He made $9.07 per hour, approximately $1,600 per month. He sent one-fourth of his salary to Oregon for child support. He found living alone and having privacy attractive about the proposed SRO. The final profile was a nursing assistant from the Palo Alto Nursing Center, just a few blocks from the proposed site. She lived in a hotel in Redwood City and made $6.09 per hour. Her commute cost her $4 per day. She wanted to lessen the expense of her commute. She also talked with social workers at Stanford Hospital, and at any given time there were about 173 who lived in Palo Alto who were waiting for
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heart/lung transplants and oncology treatments that exceeded 6 months. Stanford offered only 40 places for those people to live. As a resident of Palo Alto for the past 22 years, a member of CPAC, and a neighbor who lived within less than a mile of the proposed SRO on Alma site, she wanted to voice her support for the project. She welcomed the fiscal and cultural diversity such a project would bring to Palo Alto. The people were hardworking, low wage earners who wanted the same pride and comfort in their living situation that many Palo Altans enjoyed. They could appreciate parks, libraries, a safe walk downtown, and a community that accepted people from all walks of life. Robert Morgan, 1150 Byron Street, considered it a privilege to live in a city that had a sincere interest in providing housing at a reasonable price for persons who had limited income. However, he suggested an alternate solution to the problem. He was not surprised PAHC favored the proposal because it was the only way for PAHC to improve the housing situation. Nothing better had been offered to them, but because it was the best deal, PAHC had not made as good a deal for the City. The City's biggest problem was insufficient parking, and the project would make the situation worse. The parking provided in the plan would be used by the tenants. The cars that were currently parked at the site would have to be parked in front of people's houses. It did not seem reasonable to consider any development for any purpose that would exacerbate the parking problem. Argument was used that the City paid for the option to buy the property, and so the plan should proceed, but that was not a valid argument. He suggested the City could provide an equivalent of inexpensive housing by relaxing the building regulations that made it difficult to build cottages on one's property. There were 15,200 single-family dwellings in Palo Alto. Rooms could be provided for the 106 people of the proposal if 7/10 of 1 percent of those houses had such units. That would be 1 unit for every 143 houses or 1 unit about every 1.4 miles along the street. The character of the City would not change. The government sometimes could solve problems by doing less, not more. The approach would have the incidental advantages of using local architects, contractors, and suppliers in solving the problem and could provide some homeowners with additional income. The concentration of people who would need a certain amount of administrative supervision would be eliminated. Moreover, the PAHC would have additional time to explore alternate plans that would have a more benign effect on the Downtown area. Urban Cummings, 1231 Parkinson Street, moved to Palo Alto approxi-mately 30 years ago because the quality of life in Palo Alto was the kind of environment in which he wanted to raise his family. The changes that had taken place in Palo Alto within the last 30 years had been for the good. However, the quality of life in some areas had not changed for the good, e.g., the business part of Downtown Palo Alto. He supported the idea of high density housing for low-income people, but he believed the location was suited to parking. The business community needed more support. The talk about mitigating the problems of noise, fumes, etc., was much easier said than done. Council would be dealing with a serious problem in the long run, and the airport example that had
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been given that evening was true in the case of Reid Hillview Airport in San Jose. He urged Council to vote against the project and find a more suitable location. Carol Lamont, 618 Kingsley Avenue, was extremely impressed with the analysis of the issues and the options available to address the housing need at 753 Alma Street. She supported the conclusion that an SRO development was feasible on the site given the proposed design, mitigation measures, and financing strategy. Palo Alto was fortunate to have an opportunity to address the need through an experienced local development corporation with a known track record for excellent management. The site at 753 Alma was an excellent location, given the limited options and benefits of locating the use next to public transit and employment opportunities. The use with the mitigation measures proposed was compatible with the adjacent auto related uses. As a resident of the Downtown area, she was very supportive of the plan to build SRO housing in Palo Alto. Many young people who had grown up in the area were having trouble getting started on their own with or without a degree because of the high cost of housing and the low pay of many service and office jobs. The people who sold books, coffee, and groceries, and those who served in restaurants and nursed at hospitals needed the housing opportunity. Pay for many jobs was simply too low for young people to afford decent housing on their own. The City needed to provide housing in Palo Alto for people at all economic levels, including those who grew up and worked in Palo Alto. A proposal like the SRO Alma site brought out fear in many people. Years before she was at Council meetings when Webster Woods development was proposed for very low-income families. Many people in the neighborhood expressed their fears then too. Webster Woods provided quality affordable housing without disrupting the neighborhood. The PAHC had developed the project according to its plan. She urged the City Council to rely on the feasibility report and PAHC's excellent track record. She urged Council to create the excellent quality of life in Palo Alto for people who could not afford to live there on their own and approve the development of 106 SRO housing units at 753 Alma Street. Vice Mayor Simitian clarified staff's intention would be, if the staff recommendation were approved, to return with an extension request on the option and a BAO at the December 19, 1994, meeting. City Manager June Fleming said that was correct. Vice Mayor Simitian asked whether it was possible to bring the item back on November 28, 1994, so that the issues could be considered. He said there would be at least two or three Council Members absent at the December 19, 1994, meeting and at least six votes were required for BAO approval. He did not know which way the voting would go on the main motion in a week. Ms. Fleming understood Vice Mayor Simitian's concern, but she did not believe staff would be able to prepare the BAO because it was a short week. On December 5, 1994, the Hughes, Heiss & Associates organizational review was on the agenda. She proposed that the
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item be put on that agenda. Vice Mayor Simitian said that was acceptable. Council had been down that path before with BAOs and short-handed Council. MOTION TO CONTINUE: Mayor Kniss moved, seconded by Simitian, to continue Item No. 8 to the November 28, 1994, regular City Council meeting. MOTION TO CONTINUE PASSED 9-0. ORDINANCES 9. Contract between the City of Palo Alto and B & B Landscaping Contractors Inc. for Landscape Improvements at Hansen Way Substation MOTION TO CONTINUE: Mayor Kniss moved, seconded by Simitian, to continue Item No. 9 to a future City Council meeting. MOTION TO CONTINUE PASSED 9-0. REPORTS OF OFFICIALS 10. Cooperative Agreement between the City of Palo Alto and the Santa Clara County Housing Authority to Allow the Housing Authority to Issue Tax-Exempt Bonds to Finance Acquisition of Arastradero Park Apartments MOTION TO CONTINUE: Mayor Kniss moved, seconded by Simitian, to continue Item No. 10 to a future City Council meeting. MOTION TO CONTINUE PASSED 9-0. ADJOURNMENT: The meeting adjourned at 11:30 p.m. ATTEST: APPROVED: City Clerk Mayor NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto Municipal Code Sections 2.04.200 (a) and (b). The City Council and Standing Committee meeting tapes are made solely for the purpose of facilitating the preparation of the minutes of the meetings. City Council and Standing Committee meeting tapes are recycled 90 days from the date of the meeting. The tapes are available for members of the public to listen to during regular office hours.
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