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HomeMy WebLinkAboutStaff Report 2505-4693CITY OF PALO ALTO Retail Committee Regular Meeting Wednesday, June 18, 2025 9:00 AM     Agenda Item     1.Economic Development Activity Report June 2025 and Review of Sewer Use and Stormwater Ordinance Updates Impacts to Business Presentation Retail Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: City Manager Meeting Date: June 18, 2025 Report #:2505-4693 TITLE Economic Development Activity Report June 2025 and Review of Sewer Use and Stormwater Ordinance Updates Impacts to Business RECOMMENDATION Staff recommends that the Retail Committee to receive this Economic Activity Report for the month of June 2025 including a presentation on current Sewer Use and Stormwater Ordinance updates underway and the impacts to business. BACKGROUND The Palo Alto City Council approved Palo Alto’s comprehensive Economic Development Strategy in August 2023. The full strategy is available on the City’s business website, www.paloalto.gov/business. As part of its 2025 priority setting process, the City Council once again selected Economic Development, updating the focus by removing “Transition” and adding “Retail Vibrancy”. In March 2025, the City Council discussed the workplan for this priority which consisted of thirteen objectives. These objectives were informed by the Economic Development Strategy and other community needs, and pending formal approval scheduled in May 2025, serve as the focus of the City’s economic development work for 2025. ANALYSIS Sewer Use and Stormwater Ordinance Updates The City of Palo Alto is seeking public comment on proposed updates to the existing Sewer Use and Stormwater Ordinances, and two new ordinances regarding Fats, Oil, and Grease and Liquid Hauled Waste. The updates will align with new state regulations, permit requirements, and formalize existing processes. Administrative revisions will also be made to simplify and organize the content into four separate Municipal Code chapters for easier use and reference: Sewer Use (Municipal Code Chapter 16.09), Stormwater (Chapter 16.11), Septic Hauler/Hauled Liquid Waste (proposed to be 16.66), and Fats, Oils and Grease (FOG) (proposed to be 16.13). Read the proposed revisions for each chapter here: https://www.paloalto.gov/Departments/Public-Works/Watershed-Protection/Sewer-Use-and- Stormwater-Ordinance-Updates The City is collecting comments until July 15, 2025. The City also accepted questions and comments through various public meetings. Following review of public comments, staff will finalize the draft language and bring proposed ordinance revisions to City Council for consideration in Summer 2025. All businesses must comply required best management practices; those with an on-site storm drain inlet have additional trash control requirements. For restaurants, they will need to: comply with new standards for grease control devices (GCDs) when opening a new restaurant, a remodel, or if a current grease control device no longer works. Restaurants with an existing functional grease control device do not need to make changes. Beginning in January 2026, restaurants will need to provide secondary containment for waste fryer oil. Below is a summary table of the changes and impacts: TOPIC CURRENT NEW Allowed GCD materials Concrete and some metals Only fiberglass, polyplastic, and anti-corrosive metals GCD sizing Based on flow rate Flow rate AND cuisine type and meals served Plumbing fixture connections to GCD Limited kitchen and prep area fixtures. Select service areas. All kitchen, prep and service area fixtures Secondary containment for waste oil (fryer oil) Not required Required for all outdoor waste oil containers Required BMPs Limited Codified and explicitly defined Onsite trash management Through housekeeping practices at all businesses In addition – businesses with onsite storm drain inlets, ALSO manage trash through capture devices or trash removal measures Mobile business Mobile businesses deemed responsible party for discharges or other stormwater violations Mobile businesses AND customers hiring the businesses are also responsible A question was raised at the June 11, 2025 California Avenue business stakeholders meeting whether proposed Outdoor Activations would trigger the need for food service establishments to make infrastructure upgrades. Staff responded that staff is not recommending upgrades be required at this time, but that more frequent inspections are expected given the significant increase in food preparation that may be involved with outdoor activation. Retail Business Report Attachment A to this report provides information about Certificates of Use and Occupancy issued to retailers between December 2024 and June 2025. The Certificate of Use and Occupancy is required for all businesses operating within commercial tenant spaces. This enables the City to review the proposed land use and assign occupancy limitations based on factors such as usage, square footage, and exiting. The requirement for the Certificate of Use and Occupancy can be triggered by several factors, including a new business, a name change, a change in ownership of the business or property, or a modification to the size of the tenant space. A Certificate of Use and Occupancy does not confer permission to occupy, which is granted when the building permit is 'finaled'. Based on this report, staff are now tracking and engaging with proposed new businesses, such as Yummy Future Coffee, at the former site of American Apparel. Through a separate report, staff are also able to track all businesses that apply for a Certificate of Use and Occupancy. This report allows Economic Development staff to connect with businesses before going through the process. 2025 City Council Priorities The City Council reviewed the 2025 priority objectives in March and are expected to review and adopt the final list in May. For Economic Development there are 12 priority objectives, of which seven will need additional funding to implement. Below provides highlights of progress made on some of the objectives underway. •Council approval of outdoor activation guidelines for California Avenue – the Outdoor Activation Guidelines have been presented to various groups, including the California Avenue Merchants and the Ad Hoc Retail Committee. Guidelines are scheduled to be presented to the full City Council for approval on June 17. The timing is intended to support an implementation timeline that aligns with preparations for the upcoming winter season. •Resume work on new parking garage structure in Downtown core – On April 14, 2025, the City Council directed staff to proceed with preliminary design and environmental review for Option 1a1, a new 274-space parking garage, featuring six levels of above- ground parking with a reserved area to allow for future construction of affordable housing on the site with separate access on Waverley Street. •Complete build-out of fiber-to-the premises pilot Phase 1 with grid modernization –An initial rate structure for the internet service provider services was reviewed with the Utilities Advisory Commission and Finance Committee, adoption of the rates is scheduled for City Council June 16th. 1 New Parking Structure Staff Report: https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=0e41aabf-074b-49ce-a26f-7cb360262171 •Council consideration of an ordinance restoring subjective wireless communication facility regulations – This item was approved by the City Council on June 9, 2025. •Enhance partnerships with private-sector stakeholders - Meetings with business districts are scheduled in June with both Cal Ave. and Downtown districts. •Council approval of Ramona Street design and funding appropriations ($) – A consultant contract for near-term street improvements and outdoor activation standards was approved in December 2024 and work is underway. Funding for implementation of the streetscape improvements is included in the proposed CIP budget; completion is targeted for December 2025, contingent on Council approval of the funding. •Council approval of a design option for Cal Ave. ($) – Staff are in the process of finalizing design alternatives and engaging with the business and community on these alternatives prior to bringing them forward to the Retail Committee for review. Significant financial investment will be necessary for a new design, and financial support and feasibility will be an important variable for consideration. •Propose and implement outdoor activation guidelines for car-free Ramona St. ($) – outdoor activation guidelines are under development and scheduled for Retail Committee review at this June 18th meeting. •Refine destination marketing efforts and enhance Palo Alto’s reputation ($) – The City with the support of Good City Company and in partnership with the Chamber of Commerce is working with hotels to assess desire for establishing organized destination marketing efforts. FISCAL/RESOURCE IMPACT No additional funding is needed at this time for the information provided in this report. The City’s Economic Development and Retail Vibrancy efforts may result in changes to revenues, which will be incorporated into future projections and budgets as appropriate. STAKEHOLDER ENGAGEMENT Stakeholder engagement is a critical component of the City’s economic development function. Economic Development staff continues to meet frequently with business stakeholders through individual conversations, Business Connect, meetings with business districts, regular communication with the Chamber of Commerce, and through various other communication channels. ENVIRONMENTAL REVIEW Receipt and acceptance of this report is not a project under CEQA. ATTACHMENTS Attachment A: Permits (Retail) By Type APPROVED BY: Ed Shikada, City Manager Retail Building Permits By Type: December 2024 - June 2025 Retail Permit by Type Description Permit No Date Issued Address Record Status Tenant Name Proposed Use Category Proposed Use Classification Use & Occupancy only 25BLD-00647 12/05/2024 195 PAGE MILL RD, STE# 117 Permit Issued The Rendezvous Retail Eating and drinking service Use & Occupancy only 25BLD-00736 12/16/2024 855 EL CAMINO REAL, STE# 103 Permit Issued Wilby Optical Retail Shopping center Use & Occupancy only 25BLD-01143 01/13/2025 448 CALIFORNIA AV Permit Issued Terun Pizzeria Retail Eating and drinking service Use & Occupancy only 25BLD-01153 01/23/2025 405 UNIVERSITY AV Permit Issued Pho Bang Mi Retail Eating and drinking service Commercial Remodel/Repair 23BLD-00451 03/24/2025 180 EL CAMINO REAL, STE# 110 Finaled STANFORD Retail Shopping center Commercial Remodel/Repair 24BLD-01803 03/26/2025 443 EMERSON ST Permit Issued TASTY POT RESTAURANT Retail Eating and drinking service Commercial Remodel/Repair 24BLD-03292 03/31/2025 222 UNIVERSITY AV Permit Issued VERIZON Retail Retail service Commercial Remodel/Repair 24BLD-03446 04/08/2025 201 HAMILTON AV 209 Permit Issued Scher Holdings LLC Retail Retail service Commercial Remodel/Repair 24BLD-03530 04/09/2025 180 EL CAMINO REAL, STE# D101 Permit Issued REFORMATION D101B Retail Shopping center Commercial Remodel/Repair 24BLD-03531 04/10/2025 180 EL CAMINO REAL, STE# DD1301 Permit Issued CEDAR &SAGE DD1300B Retail Eating and drinking service Commercial Remodel/Repair 25BLD-00011 04/18/2025 855 EL CAMINO REAL, STE# 158 Finaled SUSHI HOUSE Retail Eating and drinking service Commercial Remodel/Repair 25BLD-00085 04/28/2025 855 EL CAMINO REAL, STE# 98 Finaled FRAMEBRIDGE Retail Shopping center Commercial Remodel/Repair 25BLD-00114 04/29/2025 2515 EL CAMINO REAL, STE# 110 Permit Issued WOW TEA Retail Eating and drinking service Commercial Remodel/Repair 25BLD-00200 04/30/2025 170 UNIVERSITY AV Permit Issued Yummy Future Coffee Retail Eating and drinking service Commercial Remodel/Repair 25BLD-00370 05/12/2025 535 BRYANT ST Permit Issued PENG'S KITCHEN RESTAURANT Retail Eating and drinking service Commercial Addition & Remodel 24BLD-03211 05/16/2025 180 EL CAMINO REAL, STE# P450 Permit Issued RIVIAN HUB Retail Shopping center Commercial Addition & Remodel 24BLD-03224 05/19/2025 855 EL CAMINO REAL, STE# 157 Permit Issued ROOST AND ROAST Retail Shopping center City of Palo Alto Ordinance Updates for Food Facilities and Other Businesses Meeting Goal: Share resources to learn more about proposed new ordinance requirements for fats, oil and grease management for restaurants, and stormwater pollution prevention requirements for all businesses. Presenters: Karin North-Public Works Assistant Director—Environmental Services Julie Weiss – Watershed Protection Program Manager Gaba Stauffer — Fats, Oil, and Grease Inspector June 18, 2025 www.cityofpaloalto.org City of Palo Alto Public Works-Environmental Services Watershed Protection Mission: Keep pollutants out of creeks and San Francisco Bay from our service area. •Work with business, industry and residents to prevent pollution entering sanitary sewer system and storm drain system •Program guided by State permits and regulations codified in the City’s Municipal Code (Ordinances) and City Council direction Restaurants will need to: •Comply with new standards for grease control devices (GCDs) when opening a new restaurant, doing a remodel, or if a current grease control device no longer works. Restaurants with an existing functional grease control device do not need to make changes. •Provide secondary containment for waste fryer oil. All businesses must comply required best management practices; those with an on-site storm drain inlet have additional trash control requirements. Ensure Compliance by referring to: •Best Management Practices •Ordinance Regulations •Watershed Protection - Contact us! Summary of Ordinance Requirements MORE INFORMATION: www.paloalto.gov/SewerStormOrdinanceUpdate CleanBay@PaloAlto.gov 650-329-2122 Best Management Practices Proposed Ordinance and Regulations •Door-to-door outreach in “FOG Hotspots” (e.g., Cal Ave, Downtown, and El Camino Real) •Business Utility Bill Insert notifying of upcoming ordinance changes and public comment period •Mailed flyers to ~320 Food Facilities and other businesses •Newsletters: Business Connect, Sustainability, Uplift Local •Public meetings for FOG and Stormwater ordinance language; presentations posted online, several options for in-person and remote public comment •Emailed follow-up to food facilities after public meeting providing link to meeting recording •City calendar and website Food Facility Outreach TITLE 40 FONT BOLD Subtitle 32 font What is Fats, Oil and Grease (FOG), and How Does it Enter the Sanitary Sewer System? Fats, Oils, and Grease (FOG) Management Protects Your Business, Public Health and our Creeks •FOG backups are costly, interrupt business operations, and corrode pipes •Protect Public Health (e.g., rodent control, smells, slipping) •Addresses cleanliness requests in business districts •Creek protection from FOG-related overflows into storm drains and creeks •Compliance with Bay Area Regional Stormwater and Wastewater Permits FOG blockages can cause sanitary sewer overflows. TITLE 40 FONT BOLD Subtitle 32 font •Grease control device specifications •Construction Material •Sizing •Connected fixtures •Waste/Fryer Oil Secondary Containment •Alternate compliance options may be available Proposed FOG Ordinance Overview and Major Changes New ordinance Chapter 16.13 New Requirements for Grease Control Devices (GCDs) May Apply If: •A restaurant is new and does not have a GCD •A restaurant undergoes a kitchen remodel, expansion, or adds a bar •A grease control device is not operating properly •A restaurant contributes to backups in its building or in the street Most ordinance requirements are not triggered for existing restaurants with a functional GCD TITLE 40 FONT BOLD Subtitle 32 font •Proposed effective date 1/1/2026: outdoor waste oil bins must be stored in secondary containment, to be approved and inspected by City staff •Addresses business concerns about improving cleanliness of business areas •Outdoor containers must be locked and labeled •Typical cost ~ $1,000--varies by site needs. Worked with Fire Dept to avoid permitting and associated costs •City will collaborate with businesses in space-constrained locations Secondary Containment Requirements for Fats, Oil, and Grease Stormwater Pollution Prevention Requirements (Updated Ch. 16.11) Codifies requirements for all Bay Area businesses per Regional Stormwater Permit •Properties that have a storm drain onsite are required to prevent trash from entering the City storm drain via trash removal or by installing/maintaining a trash capture device (~$2,000 plus regular maintenance) •Mobile businesses •Required Best Management Practices Required Stormwater Operational Best Management Practices (BMPs) •Required BMPs to limit pollutants from leaving the property via stormwater runoff and wind •Examples include: •Cleaning and maintenance of outdoor areas, parking lots, loading docks, sidewalks, etc. •Containing washwater outdoors (if, for example, washing vehicles or equipment) •Storing materials appropriately, whether hazardous or not (e.g., out of the rain) SUMMARY OF NEW REQUIREMENTS Topic CURRENT NEW Allowed GCD materials Concrete and some metals Only fiberglass, polyplastic, and anti- corrosive metals GCD sizing Based on flow rate Flow rate AND cuisine type and meals served Plumbing fixture connections to GCD Limited kitchen and prep area fixtures. Select service areas. All kitchen, prep and service area fixtures Secondary containment for waste oil (fryer oil) Not required Required for all outdoor waste oil containers Required BMPs Limited Codified and explicitly defined Onsite trash management Through housekeeping practices at all businesses In addition – businesses with onsite storm drain inlets, ALSO manage trash through capture devices or trash removal measures Mobile business Mobile businesses deemed responsible party for discharges or other stormwater violations Mobile businesses AND customers hiring the businesses are also responsible Next steps •Let us know your Questions/Comments/Concerns by July 15 •City Council consideration after Council summer break •Dates for first and second Council readings will be posted on the website •Outreach will be sent after ordinance adoption www.paloalto.gov/SewerStormOrdinanceUpdate CleanBay@paloalto.gov 650-329-2122 Best Management Practices Proposed Ordinance and Regulations For more information Help protect human health, Palo Alto, and local creeks and San Francisco Bay!