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HomeMy WebLinkAboutStaff Report 2410-3579 / Staff Report 2410-3603CITY OF PALO ALTO Retail Committee Regular Meeting Wednesday, October 16, 2024 9:00 AM     Agenda Item     1.Planning for November Study Session on Filling Retail Vacancies, Title Updated, Late Packet Report, Presentation Retail Committee Staff Report Report Type: ACTION ITEMS Lead Department: City Manager Meeting Date: October 16, 2024 Report #:2410-3579 TITLE Discussion of Future Study Session on Filling Retail Vacancies This report will be a late packet report published on October 10, 2024. 5 6 9 3 Retail Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: City Manager Meeting Date: October 16, 2024 Report #:2410-3603 TITLE Planning for November Study Session on Filling Retail Vacancies RECOMMENDATION Discuss and provide feedback for a study session in November 2024 on filling retail property vacancies. EXECUTIVE SUMMARY The Ad Hoc Retail Committee has expressed interest in further exploring options to address retail vacancies, especially in the city’s commercial cores of Downtown University Avenue and California Avenue. Addressing vacant spaces requires engagement and action by a variety of business stakeholders operating in these commercial cores. Through a study session, all parties can better understand the perspectives of stakeholders and perceptions of options for addressing retail vacancies. This report discusses how a study session could be organized to engage stakeholders and a potential outreach plan. BACKGROUND The Ad Hoc Retail Committee has met regularly since it was created in December 2023. It became a Brown-Act body in March 2024 and has met monthly since with the exception of June and July. The purpose of the ad hoc is to accelerate implementation of the Council-approved Economic Development Strategy. The ad hoc Retail Committee supports engagement with business and community stakeholders and facilitates feedback to staff on ongoing work. More information about the ad hoc Retail Committee can be found on its website1. Discussion about retail vacancies has surfaced in multiple ad hoc Retail Committee meetings; a focused study session on the topic could help advance the consideration of any recommendations from the Committee to the full Council. 1 Ad Hoc Retail Committee Website: https://www.cityofpaloalto.org/Departments/City-Clerk/City-Council-Committees/Retail-Committee 5 6 9 3 ANALYSIS This section provides information on potential areas for discussion, information for feedback on the structure of the study session, and information about outreach to stakeholders. Potential Areas for Discussion To engage stakeholders in a constructive conversation about addressing retail vacancies, staff would like to accurately promote the study session and encourage stakeholder involvement. This will require staff to clearly articulate the value of engagement to stakeholders so that they understand how they can participate and outcomes from their participation. Detailing areas for potential discussion will help stakeholders gauge their interest and willingness to participate. Given the substantive nature of each topic and the potential of robust engagement, staff requests feedback on the topics identified below to incorporate into the title of the study session. Incorporating specific areas of interest into the title of the noticing for the study session better orients stakeholders and the public about what may be discussed. This will help market the study session and ensure that it productively advances the conversation about filling retail vacancies. Potential areas for conversation are listed below with some context based on previous conversations with the Ad Hoc Retail Committee and business stakeholders. Entitlement (Planning) and Development Process: This sub-topic could further build on existing conversations held by the Ad Hoc Retail Committee and by Economic Development staff with brokers regarding perceived areas for improvement in the City’s development process. It could feature a conversation with brokers, property owners, and staff from the Planning and Development services department. This could identify priorities within work currently underway to revamp the City’s zoning code, consistent with prior discussion with the Ad Hoc Retail Committee, and work underway at the Development Center to enhance collaboration and streamline operations. Uncertainty of Plans and Parking: This sub-topic could discuss some of the barriers that brokers have identified regarding uncertainty due to plans for frontages and parking that deters potential tenants. This includes issues such as compatibility of parklets from neighboring businesses impacting retail frontage, conditions on the street, and consistent parking access for patrons. This topic could cover both parklets as well as parking demand at different times and different days. This conversation would benefit from engagement with property owners, brokers, and parklet owners. Trends in Brick-and-Mortar Retail: 5 6 9 3 This sub-topic could discuss national, state, regional, and local trends that brokers are seeing in brick-and-mortar retail. Through conversations with staff, brokers have reiterated points that more and more retail-like uses are seeking to locate in commercial cores. This aligns with recent discussions with the Ad Hoc Retail Committee about zoning and what uses can be sited where, but additional focus on this sub-topic would facilitate greater engagement from brokers and property owners about the types of businesses they view as complementary to the commercial cores. This could then lead to further refinement of the City’s entitlement process. Potential Vacancy Tax The Ad Hoc Retail Committee has expressed interest in further discussing a vacancy tax. This topic was also discussed at the Planning and Transportation Committee meetings on zoning changes to enhance retail throughout the City, the most recent of which was August 14, 20242. This topic would provide a forum for property owners, brokers, and others to provide their perspective on the advantages and disadvantages that a potential commercial vacancy tax might have. This discussion would necessarily be preliminary but could provide an important flow of communication and conversation on the topic between the City and stakeholders. Following this discussion, the Committee might recommend that Council make evaluation of this concept a priority objective for 2025. Interim Activations of Vacant Storefronts: This sub-topic could feature a conversation with brokers, property owners, and city staff (such as staff from Public Art) on ways to site temporary art or other aesthetic enhancements in vacant storefronts. This would focus on ways to improve upon some of the current treatments seen in vacancies, such as clear windows with empty interiors, plain window coverings, or “For Lease” signs. Examples could include temporary art installations, more visually compelling window treatments, or spotlights on community attractions to help activate the space. This conversation could be complemented by a discussion of temporary pop-ups with property owners and brokers. Business Improvement District The general purpose of a Business Improvement District (BID) is to provide funding for activities within a defined geographic area that sustain and enhance commercial activity. For example, BIDs in neighboring jurisdictions sponsor events and concert series as ways of drawing people to commercial cores. The inactive Business Improvement District for University Avenue downtown was administered by the Palo Alto Downtown Business and Professional Association (PADBPA). PADBPA ceased operating during the COVID-19 pandemic. The City Council has expressed interest in reactivating the BID, but this takes 2 Planning and Transportation Committee Meeting: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13695 5 6 9 3 willing partners from the business community to step into stewardship of assessed funding. This sub-topic could explore what is needed to reactivate a BID. Competing commercial centers in Palo Alto, such as Town and Country, centralize promotions and activations to reach better outcomes than outreach and advertising from individual stores. Structure & Format of the Study Session The ad hoc Retail Committee is governed by the Brown Act, but there is still potential for greater dialogue than the standard structure of the meeting. At the regular ad hoc Retail Committee meetings, public comment allows the speaker to make points, but it typically is not used to have a conversation between Ad Hoc members and those speakers. Given the critical need for dialogue with business stakeholders on a topic like addressing retail vacancies, a different format that fosters interaction could contribute to a better flow of information. To achieve this, staff recommends a semi-structured discussion to receive testimony and facilitate dialogue between members of the ad hoc Retail Committee and stakeholders. This could feature a specific set of questions for discussion that the ad hoc Retail Committee might want to explore or pose to stakeholders to hear their feedback. Conversation could still flow back and forth enabling discourse and two-way communication between individual stakeholders and the ad hoc. If the ad hoc Retail Committee wants to focus on specific areas for discussion, identifying those in advance would also contribute to productive conversations. While the structure would not permit stakeholders to chime in whenever they like, it would still represent a more robust engagement than the standard format. An alternative that is not recommended by staff could be a panel conversation. While a panel conversation would also enable testimony and conversation it would be on a far more limited scale than the recommended option. The two-way dialogue and communication would be limited to panelists, staff, and the members of the ad hoc retail committee, which could limit engagement from additional stakeholders and limit the breath of feedback resulting in a process of selecting the panel, potentially leaving key stakeholders feeling left out. Regardless of which style is selected, compliance with the Brown Act will still be required. This means the discussion will need to stay within the agendized topics, and each member of the public must be given an opportunity to speak during public comment irrespective of their viewpoint on an agendized topic. In any style, a facilitator would also be helpful to serve as a moderator of the conversation. The City’s Economic Development Coordinator can serve this role, which may benefit from existing relationships with stakeholders. Participant Outreach An open invitation to stakeholders presents the best option to engage with a variety of sectors on the topic of addressing retail vacancies. This includes property owners, commercial real estate brokers, existing retailers as external stakeholders. Staff will also work to coordinate 5 6 9 3 internally within the City organization depending on which sub-topics the committee would like to focus on. For example, if the committee would like to discuss options for enhancing vacant storefronts through public art, staff from the City’s public art program can discuss options for short-term installations in partnership with property owners and brokers. Next Steps Following the October 16, 2024, discussion, staff will conduct outreach to stakeholders. This outreach effort will take place through various channels, including e-mails, conversations, and information on the City’s website. To the extent specific areas for discussion can be identified, that will help staff better promote the study session. Staff will also prepare a report laying out the structure for the study session that complies with the Brown Act and encourages stakeholder engagement, as well as areas for potential discussion, based on the October 16, 2024 conversation. This report will be used as an additional marketing tool to encourage participation from stakeholders. Staff will work to agendize this study session for the November 20, 2024, Ad Hoc Retail Committee Meeting. FISCAL/RESOURCE IMPACT The development of a November study session would not have any resource nor fiscal impacts beyond resources already approved for focus on priority goals for economic development activities in FY 2025. STAKEHOLDER ENGAGEMENT This outline has been informed by conversations with stakeholders such as property owners, brokers, businesses, and the Chamber of Commerce. Further stakeholder engagement will occur to solicit active contributions to a study session based on discussion with the Ad Hoc Retail Committee about purpose, format, participants, and potential sub-topics. ENVIRONMENTAL REVIEW The discussion of a November study session does not qualify as a project under CEQA. ATTACHMENTS None. APPROVED BY: Ed Shikada, City Manager October 16, 2024 www.cityofpaloalto.org/business Steve Guagliardo, Assistant to the City Manager Planning for November Study Session on Filling Retail Vacancies Retail Committee November Study Session ▪Focus of the study session:addressing retail vacancies especially in commercial cores of Downtown University Avenue and California Avenue ▪Study session scheduled for the November 20th Ad Hoc Retail Committee meeting ▪Goal is to better understand the perceptions of stakeholders around retail and options for addressing retail vacancies Downtown University Avenue California Avenue 2 3 Potential Areas of Discussion ▪Entitlement (Planning) and Development Process ▪Uncertainty of Access and Parking ▪Trends in Brick-and-Mortar Retail ▪Potential Vacancy Tax ▪Interim Activations of Vacant Storefronts ▪Business Improvement District 4 Structure and Format ▪Brown Act applies to the Ad Hoc Retail Committee ▪Structure can be altered somewhat to enhance participation and engagement with stakeholders through this study session ▪Staff recommends a semi-structured discussion between Ad Hoc Retail Committee members and stakeholders ▪Enables testimony from stakeholders and dialogue between Retail Committee and stakeholders ▪Alternative Option: Panel Conversation ▪Not Recommended since the engagement is narrower 4 Participants ▪Participants: ▪External Stakeholders: ▪Property Owners ▪Commercial Real Estate Brokers ▪Existing Retailers (including Parklet Operators) ▪Internal Stakeholders (will be based on potential areas of discussion): ▪Economic Development Staff ▪Public Art Staff ▪Planning & Development Services Staff 5 NEXT STEPS ▪Following discussion, staff will: ▪Conduct outreach to stakeholders to encourage participation in November 20 study session ▪Prepare report including structure and areas of discussion Steve Guagliardo Assistant to the City Manager Steve.Guagliardo@CityofPaloAlto.org 650-329-2261