HomeMy WebLinkAboutStaff Report 2411-3839 Retail Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: December 18, 2024
Report #:2411-3839
TITLE
Recommendations to Council and Staff Following the Committee’s November Study Session
Addressing Retail Vacancies in the University Avenue Downtown, Including: (1) Enhanced
Cleanliness Efforts; (2) Revisions to the Parklet Program; and (3) Increasing Temporary Uses
RECOMMENDATION
Based on feedback from the Council and stakeholders during the November Study Session, staff
recommends the Ad Hoc Retail Committee provide feedback on:
a) efforts to enhance cleanliness in the downtowns
b) potential revisions to the ongoing parklet program
c) potential opportunities to better facilitate temporary uses
BACKGROUND
The Ad Hoc Retail Committee has met regularly since its creation in December 2023. It became
a Brown-Act body in March 2024 and has met monthly, with the exception of June and July.
Discussions about retail vacancies have arisen in multiple Committee meetings, and staff
identified a focused study session on this topic could help advance any recommendations from
the Committee to the full Council.
During the October Ad Hoc Retail Committee meeting, the committee and staff discussed how
to facilitate a study session in November to address retail vacancies in the University Avenue
downtown. The discussion included potential areas for consideration, such as the entitlement
(planning) and development process, uncertainty around plans and parking, trends in brick-and-
mortar retail, a potential vacancy tax, interim activation of vacant storefronts, and the business
improvement district. Potential structures, formats, and participant outreach for the study
session were also discussed.
After receiving direction at the October meeting, staff convened a study session to address
retail vacancies along University Avenue in Downtown Palo Alto on November 20, 2024. This
session focused on the City’s permitting process, the retail landscape, opportunities for greater
partnership with the private sector, and the activation of vacant storefronts.
During the November Study Session, the Ad Hoc Retail Committee held a panel discussion with
stakeholders to address retail vacancies along University Avenue in downtown Palo Alto. The
panel was facilitated by Aaron Aknin from the Good City Company and included:
•Brad Ehikian, Partner at Premier Properties;
•Matt Sweeney, Executive Director at The Econic Company;
•Steve Levy, Palo Alto resident and Director & Senior Economist for Center for Continuing
Study of the California Economy;
•John Shenk, with Thoits Bros., Inc.;
•Charlie Weidanz, CEO of the Chamber of Commerce; and
•Faith Bell, owner of Bell's Books.
There was also robust public engagement featuring perspectives from additional stakeholders,
including Elizabeth Wong, Roxy Rapp, Georgie Gleim, and Whitney Denson.
This report follows up on three key areas that emerged as particularly significant during the
study session: enhanced cleanliness efforts, revisions to the parklet program, and the expansion
of temporary uses.
ANALYSIS
This section provides context for the discussion about enhanced cleanliness efforts, potential
revisions to the ongoing parklet program, and potential opportunities to better facilitate
temporary uses.
Enhanced Cleanliness Efforts
Enhanced cleanliness efforts for the University Avenue commercial core emerged as an
important need in early 2024. Public Works began initial efforts to provide a greater level of
service in March 2024 and has since scaled efforts. Unfortunately, both the mechanism for
much of this enhanced cleaning (overtime of existing staff) and the funding source are not
resourced for long-term continuity. The following information provides an update on the base
level of services previously provided by Public Works, including costs, services, and delivery (in-
house or contractual) as well as the enhanced services that Public Works has provided since
March 2024. Whether and how to continue the enhanced cleaning efforts will need to be
discussed as part of the FY 2026 Operating Budget development, if not sooner.
Base Service Levels and Costs:
Cleaning activities and costs for the University Ave and California Ave downtowns are part of
the City’s operating budget. Public Works manages the cleaning activities, which includes
services delivered both through in-house staff and contracted vendors. Cleaning services
performed include: street sweeping, pressure washing, litter removal, emptying of garbage
containers, cleaning garbage can surfaces, lids, and liners, surface cleaning of news racks and
furniture, biohazard debris clean-up, and graffiti, poster, and sticker removal.
The total amount spent on cleaning services at the base level is approximately $94,000 per
month: $56,000 for contractors and $38,000 for in-house staff. This is broken down by service
and delivery below:
•$30,000 is the monthly cost for contracted street sweeping, which takes place three
times a week in the University Avenue and California Avenue downtowns1 and once per
week in garages.
$17,000 is the monthly cost for the 80 in-house staff hours per week sweeping in
parking lots not covered by contracts and manual blowing to supplement the
contracted sweeping.
•$11,000 is the cost per month for pressure washing, which takes place monthly on
University Avenue and monthly for part of the year (May through October) on California
Avenue
There is no in-house support for pressure washing
•$15,000 per month is the cost for surface cleaning and litter removal through the
Downtown Streets Team, which includes 104 hours of labor week on these cleaning
activities
There is an additional $17,000 per month spent on in-house staff for these
activities.
There is an additional 20 hours of in-house staff time per week spent on graffiti,
poster, flyer and sticker removal at a cost of approximately $4,000 a month.
Enhanced Service Levels and Marginal Costs:
Public Works has been able to leverage overtime and reassign staff to enhance services and
accomplish a greater level of downtown cleanliness since March 2024. These enhanced service
levels include additional litter removal, surface cleanings, and additional manual leaf-blowing.
The City has also worked with its pressure washing contractor to add an additional cleaning per
month, doubling the cleanings per month from one to two. The total amount spent on these is
1 The Car-Free portion of California Avenue is swept once a week; the rest of the California Avenue commercial
core is swept three times a week.
an additional $28,500 per month broken down by service and task, the majority of which is
overtime labor hours of in-house staff.
•$25,000 in marginal costs for in-house staff to provide enhanced litter removal and
surface cleaning of trash cans, news racks, furniture, and biohazard debris clean-up
•$1,000 in marginal costs for in-house staff for additional blowing
•$2,500 in marginal costs for the contractor to provide an additional pressure washing of
University Avenue
Staff is closely monitoring the funding and sustainability of these efforts and may bring forth
recommended budget adjustments for FY 2025 if appropriate and needed. Ongoing
conversations with downtown stakeholders about their desire to maintain enhanced cleaning
services will inform potential options and the policy discussion to follow about what levels of
service the City can provide at what cost.
Potential Revisions to Ongoing Parklet Program
Balancing the competing interests of restaurants and retailers as part of the ongoing parklet
program was a recurring topic at the November study session. The Ad Hoc Retail Committee
heard from brokers, property owners, and retailers on the importance of ‘certainty’ when it
comes to the frontage of their properties and stores. In previous parklet discussions,
restauranteurs have described how parklets have been an effective means of attracting and
retaining customers.
As part of the ongoing parklet program2, parklets are allowed to extend beyond their store’s
frontage without a letter of consent from the neighboring store so long as they do not have a
roof. Constructing a roofed parklet beyond a stores’ frontage requires a letter of consent from
the neighboring business. This represented an approach that attempted to minimize visibility
impacts on neighboring retailers.
At the November study session, stakeholders and partners from the private sector voiced their
perspective that this approach did not do enough to minimize adverse impacts on retailers.
Retail stakeholders said they were concerned about the visibility impacts of parklets extending
into their frontage, regardless of whether there was a roof or not. Brokers and property owners
cited the prospective uncertainty about a parklet, even unroofed, extending into a frontage as a
barrier for siting tenants in vacant storefronts. They noted that ‘visibility’ and certainty of that
visibility is a key issue for many prospective tenants that they talk to.
Retail vibrancy in the City’s commercial cores is an important part of the City’s economic
development strategy and of the City Council’s priority of Economic Development and
2 Ongoing Parklet Program: https://www.cityofpaloalto.org/Departments/Public-Works/Engineering-
Services/Ongoing-Parklet-Program
Transition. In response to the issues raised by retailers and other stakeholders during the
November Study session, staff proposes revising the ongoing parklet program to better balance
the competing needs of restaurants and retailers.
Revising what space parklets can use is a policy decision last decided by Council, and staff seeks
feedback from the Retail Committee on the potential for revision. If revisions are pursued,
certain key dimensions of the future policy discussion could include:
•Should parklet extension in front of adjacent frontages be more limited, such only with
adjacent owners’ consent?
•If so, should existing parklets be allowed to remain until permit renewal, or other date?
•How should this affect the development of outdoor dining guidelines for the car-free
street portions of Ramona Street and Cal. Ave?
Potential Opportunities to Better Facilitate Short-Term Activations
Encouraging short-term activations of vacant tenant spaces or opportunities for startup
companies to engage patrons to demonstrate or receive feedback on a product or service was
another topic that emerged at the November study session. Currently, the City has limited
regulatory tools available currently to facilitate such activations.
A Temporary Use Permit (TUP), can typically be issued for certain uses or activities, but the
duration is limited to 45 days. Processing these applications also takes two or more weeks
depending on what is proposed and costs about $1,800 to process. These constraints preclude
this process from being the most effective means to advance a pop-up store or similar
temporary startup space, but it is a mechanism that is currently available.
Establishing regulations that better facilitate short-term activation requires consideration of
several components including:
Duration:
Defining a maximum time period and potential allowances for extension is an important part of
any program to encourage temporary uses that don’t otherwise comply with existing zoning
requirements.
Application Requirements and Fee Level:
This needs to scale with the extent of the activation and the need for tenant improvements,
while balancing the desire for applicants to move quickly with low fees.
Building and Safety Codes:
The state building code does not distinguish between temporary and long-term uses or
occupancies. Pop-ups must adhere to building codes, including fire safety, occupancy limits,
plumbing and emergency exit requirements. Electrical work or other trade work, even
temporary installations, require a permit. The change in occupancy from how the tenant space
was designed to how it is intended to be used on a temporary basis will influence the
permitting requirements, application processing time and costs, which all escalate based on
complexity. Establishing temporary food uses raises other regulatory requirements from the
County Health Department.
Signs and Aesthetics:
Through a TUP application, a temporary sign can be placed on a site, however, for longer
duration uses, changes to the City’s local regulations would be required. Signage and other
aesthetic considerations, such as product placement in the public right-of-way are key
considerations to draw attention to a temporary use. Evaluating how these requirements apply,
or differ, from those for long-term uses requires careful consideration to avoid adverse impacts
on the commercial environment.
Implementing a pop-up / startup program will require some time but could be initiated more
quickly through a pilot program. This would require an interim ordinance and policy direction
on some of the issues above. During this time, staff can continue to evaluate implications
related to the building code and other technical requirements. The intent would be to create a
program that facilitated the ease and transition of temporary uses in vacant storefronts and at
a low cost.
This effort is not currently programed into the Planning and Development Services department
workplan and if directed by Council, will require reprioritization of other policy work when
discussed early next year as part of the Council annual prioritization process.
FISCAL/RESOURCE IMPACT
The discussion of the items in this report does not require additional funding. Any additional
costs arising from feedback and discussion with the Retail Committee will be further refined
and brought forward for consideration by the City Council, either as discrete items or as part of
the development of the FY 2026 Operating Budget.
STAKEHOLDER ENGAGEMENT
Staff conducted outreach to business in the downtown commercial core along with specific
outreach to parklet operators and outreach to retailers and participants in the November Study
Session panel. This Retail Committee meeting was also promoted through the City’s monthly
‘Business Connect’ newsletter.
ENVIRONMENTAL REVIEW
The discussion does not qualify as a project under CEQA.
ATTACHMENTS
None.
APPROVED BY: Ed Shikada, City Manager