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Home My WebLink About1981-11-23 City Council Summary MinutesCITY COUNCIL MINUT€S' Regular Meeting November23, 1981 CITY OF PALO ALTO ITEM PAGE Approval of Minutes 1 4 4 5 August 17, 1981 3 4 4 5 August 24, 1981 1 4 4 6_ Consent Calendar 1 4 4 6 Referral 1 4 4 7 Action 1 4 4 7 Resolution re Canvass of Elections 1 4 4 7 Members' Agreement with the Northern California 1 4 4 7 Power Agency -,Feather River Project Travel Services - Award of Contract 1 4 4 7 Animal Services - Award of Contract 1 4 4. 7 Two Ordinances re Northern California 1 4 4 7 Power Agency Bonds and Notes (2nd Reading) Ordinance re Industrial Waste (2nd Reading) 1 4 4 7 Agenda Changes, Additions. and Deletions 1 4 4 8 PUBLIC HEARING: Planning Commission 1 4 4 8 Recommendation re Denial of Application of. Barbara Turner for Approval of; a Tentative Subdivision Map for Six Condominiums for Property Located at 210, 218 A -B, 220 and 228 Waverley (Continued frcm October 26) Policy and Procedures Committee Recommendation 1 4 5 8 to Council that it Accept the Staff Recommendation (CMR :436 : 1) No. 1 that Council Not Act on the Friends of the Winter Club's Request for Greer Park Policy and Procedures Committee Recommendation to Council that it 1) Adopt the Staff Recommendation Policy Regarding Leased Use of City -Owned Land or Facilities,:,and 2) that Staff Continue to Gather and Analyze Data Regarding the Specific Friends of the Winter Club's Request for .use o.f the Geng Road Site Consistent with the Recommended Policy (CMR:503:1) 4 5 8 1 4 4 3 11/23/81 PAGE 1 4 6 6 1 4 6 6 1 4 7 1 1 4 7 3 1 4 7 5 1 4 7 5 1 4 7 5 ITEM Finance and Public Works Committee Recommendation to Council re the City's Soloar Financing Activities Final Agreement - ease Purchase of Terman Site Appeals of Architectural Review Board Decisions - Ordinance Amending_PAMC 16.46 Mortgage Revenue Bonds Program Mayor Henderson re Lytton Gardens III Ground Breaking Mayor Henderson re Palo Alto Adolescent Services Corporation (funding) Presentation Adjournment 1. .4 4 4 11/23/$1 Regular Meeting Monday, November 23, 1981 The City Council of the City of Palo Alto met on this date in the Council Chambers at City Hal l , 250 Hamilton Avenue, at 7:35 p.m. PRESENT: Bechtel , Fletcher, Henderson, Renzel, Levy, Witherspoon, Klein, Eyerly, Fazzino' Mayor Henderson announced the need for an Executive Session re litigation at some point during the meeting. MINUTES OF AUGUST 17, 1981 Councilrnember Witherspoon submitted the following corrections: Paoe 1170, third paragraph,.lst sentence, should read: Councilrnember Witherspoon said she felt that this was one of those seemingly ordinary Planning Commission items that came to the Council from time to time with some controversies from. the neighbors." Add the following sentence: "However, this one was in fact a landmark case." 5th sentence, delete: "as far as she was concerned"; and "on the. basis only" should read, "only on the basis." Then add the following sentence: "The zoning told one exactly what one could do with'one's property." 7th sentence should read, "She said she had always assumed that the zoning on one's property was it. On the -other hand, the pro- grams and policies in the Comprehensive Plan were only there to explain the land use policies that :were reflected in the zoning ordinance and map. They were there also to set the philosophical direction of the City, but they would not come into play unless one was trying to get a• -,rezoning or get something extraordinary done to one' -s land that affected the -zoning, and one was in effect asking for a favor." 11th sentence, beginning with "She said there was not really..." -.delete. 12th sentence should read, "Councilmertber Witherspoon said it could not be said that this project was greatly increasing den- sity, because there were only two net gain units. It could_ not be said that the properties would be kept as rents, because the property owner said that-they.would like to sell them and if- they could not sell them as a parcel to Mrs. Turner,- they would sell them separate-lyY" 13th _sentence should read, "No on•s would pay that kind of price for rental properties so they would be bought and fixed up into owner occupied single-family homes." Last sentence, change "and she found them" to read "and she found the text of the Comprehensive Plan" Page .1280, fourth paragraph, change "heating" to "heaving.': Page 1190, fifth paragraph, change to read "Councilmember Wtherspoon asked if it was..." 1 4 4 5 11/23/81 Councilrnember Menzel had the following corrections: Paae 1172, last paragraph, llth line from bottom, change the word "was" to "has.." 7th line from bottom, should read, "ordinance. There was often site and design review and other... Page 1185, first full paragraph, third 1 ne,`the word "title" should be "tidal." 9th line from bottom, word "Monday" should he "Mundy." Third paragraph from bottom, 7 lines from bottom, the word "filth" should be "silt." Page 1194, fourth paragraph, sixth line, after the words "in the,' insert the word "City's." Mayor Henderson had a correction as follows: Page 1176, third paragraph from the bottom, should read, "MOTION FAILED .for a lack of five 'rotes, Eyerly and Renzel voting "no," Fazzino, Klein, Levy absent." Page 1191, last paragraph, sixth, line from bottom, after "Unfor- tunately, in the" insert the word "Council's..." MOTION: Councilmember Fazzino moved, seconded by Fletcher, ap- proval of the minutes of August. 19, 1981 as. corrected. MOTION PASSED unanimously. MINUTES OF AUGUST 24 1981 Vice Mayor Fletcher had a correction as follows: Page 1214, third full paragraph, first line, the 'word "town" should be "City Nall..." Councilrnember Renzel had the following corrections: Page 1205, next to. last paragraph, 4th line, word "where" should be "whereas..." Page 1210, 1 ast paragraph, 4th l i ne, word "could" should be �good... ' 9th_ line from bottom, sentence beginning with "She thought„ should read,?She thought it was clear that the one to two acre lots such as.could be seen from Arastra in Portol.a Valley, which were not rural in the -visual sense, would basically urbanize Pale Alto's Foothillsa" MOTION: Cuuneilmenber Fazzint Moved,. seconded by Fletcher, ap- proval. Of the minutes of --August 2.4, 1981, as corrected. MOTION PASSED unanimously. CONSENT CALENDAR MOTION: Counci lmember Witherspoon moved, seconded by Levy, provai of the Consent Calendar. 1 Referral None Action RESOLUTION RE CANVASS OF ELECTIONS RESOLUTION 5973 entitled "RESOLUTION OF THE COUNCIL OF THE CITY OF .PALO ALTO.. DECLARING THE RESULTS OF THE CONSOLIDATED MUNICIPAL ELECTION HELD ON TUESDAY, NOVEMBER 3, 1981" MEMBERS' AGREEMENT WITH THE NORTHERN CALIFORNIA POWER AGENCY - H R R ER R CMR: Staff recommends that the City Council approve the revised agreement with the Northern California Power Agency for par- ticipation in the Feather River Project. AGREEMENT FOR FINANCING OF PLANNING AND DEVELOPMENT ACTIVITIES FOR RECAPTURE OF THE -FEATHER RIVER PROJECT Northern California Power Agency Members TRAVEL SERVICES - AWARD,OF CONTRACT (i MR : 525: i ) Staff recommends that Council authorize the Mayor to execute the eighteen -month contract with Gelco Travel Services. AWARD OF CONTRACT Gelco- Travel Sery iees ANIMAL SERVICES - AWARD OF CONTRACT (CMR:527:1) Staff recommends that Council authorize the Mayor to sign the contract with the Palo Alto Humane Society. AMENDMENT NO. 1 TO CONTRACT NO. 4130 Palo Alto Humane Society TWO ORDINANCES RE NORTHERN CALIFORNIA POWER AGENCY BONDS AND ti0TE5 2nd Reading _ ORDINANCE 3313 entitled "ORDINANCE OF THE CITY COUNCIL OE.THE CITY OF PALO ALTO AUTHORIZING THE ISSUANCE OF PUBLIC POWER REVENUE BONDS BY NORTHERN CALIFORNIA POWER AGENCY (NORTH FORK. STANISLAUS RIVER HYDROELECTRIC DEVELOPMENT POWER PROJECT" (lst Reading 11/9, Passed 6-1, Renzel Fazzino,' Levy absent) ORDINANCE 3314 entitled "ORDINANCE OF THE CITY COUNCIL OF THE CITY cF PALO ALTO AUTHORIZING THE ISSUANCE OF NOTES BY NORTHERN CALIFORNIA POWER AGENCY (NORTH FORK STANISLAUS RIVER HYDROELECTRIC DEVELOPMENT POWER PROjECT)° (lst Reading 11/9, Passed 6-1, Renzei "no," Fazzino, Levy absent) ORDINANCE RE INDUSTRIAL WASTE 2nd Readin ) ORDINANCE 3315 entitled "ORDINANCE 'OF THE COUNCIL OF THE CITY OF PALO AI:;TO AMENDING CHAPTER, 16..09 OF THE PALO ALTO MUNICIPAL CODE RELATING TO INDUSTRIAL WASTE" (1st -Reading 11/9, Passed 7-0, Fazzino, Levy, : bsent) MOTION, PASSED unanimously, Councilmember Renzel-voting "no,". on Item 15, Two Ordinances re Northern California Power Agency Bonds and Notes AGENDA CHANGES, ADDITIONS AND DELETIONS Councilmember Levy announced that, dependent upon the length of the Executive Session, he intended to move that Item #13, Appeal of ARB Decisions - Ordinance, be heard ahead of Item #12, Mort- gage Revenue Bond Program. PUBLIC HEARING: PLANNING COMMISSION UNANIMOUSLY RECOMMENDS it H L R B A R A uR N E R F R A P R L FA TENTATIVE SUBDIVISION MAP!F R Si ID MINIU F RPROPERTY :_ , 2 =1T" `770 -and -22-W RL ontinued from uc o er .o Chairperson of the Planning Commission, Jean McCown-Hawkes, said that the application was for the merger of three existing lots and subdivision of the merged property into six condominium units., In order to build the condominium units, the existing units on the property would have to be demolished, and the exist- ing units contained five presently rented units. She said the Planning Commission heard extensive testimony from the applicant concerning the condition of those units. On the evening of the Planning Commission hearing, they had a report from a City build- ing inspector, arranged for by the applicant. Before that night, the Planning Commission had no inforrnati n about any official' re- view of the condition of those buildings. by the City's Building Department. She said the -Planning Commission unanimously recom- mended denial of the application and made a series of findings. The Commission concluded that the project was not consistent with a number of the Elements of the Comprehensive Plan. For example, the project was not consistent with the goals of the Plan for the preservation of rental housing in Palo Alto; it was not consis- tent With the goals of the Comprehensive Man in that it seemed to maintain a diversity of types and a diversity of range of costs; the project was not consistent with the section of the Plan that sought to preserve older single-family housing and apartments; and the project was inconsistent with the existing character of the neighborhood. Zoning Administrator, Robert M. Brown, said that the subdivider presented a structural and termite report at the October 7, 1981 Planning Commission meeting. Since staff had not seen that report _previously, they, were not able to comment on it att that meeting. Since that meeting, with the permission of the property owner, three City staff members had the opportunity to inspect the property --Fred Herman, Chief Building Official; Jim Krokee, Manager, City Housing Rehabilitation Program; and former .:City Attorney, Don Maynor, had visited the property. Chief Building Official Fred Herman said it was unusual for a Bu\:lding Department to be put in the situation of re -inspecting after an inspection was performed, but they did so at Ole request of city staff. Don Ganschow, a City Structural Build1n inspece for was also. i nvol ved, and he was involved in setting up. the City's Rehabilitation Program, iand was;a private B-1 contractor. Mr. -Herman said the structures they looked at were all con- structed in the 1923, 1924,.1925 era. The main ,problems primarily related to the foundation, which was typical for houses con- structed prior eto_ 1935. He said the structures appeared to be well -maintained over the years, and in his .opinion, they were not substandard housing or unsafe. Regarding information and cost estimates submitted, he. lirnrted his corn: ents to those _ he felt were necessary in order, to --maintain safe and -:sanitary housing. He- did not question( the costs submitted or- -the amenities which were proposed. He, used the _ example of 218 Waveriey,: which Was a duplex Unit,. and he:d, a cost esti,ate for bringing the structure • to Code of $45,258:: " ie .said it would be 'easy to eliminate items such as -reglazing all windows as per fire marshall.'s request for $2,500 when no suet re.quir:erent existed; undergrou.nding the storm lilies to the street which was not required"- 6 -Yen _for new 1 single-family or duplex housing or providing new service and re- wiring as required for $2,250, when the City had a permit, on file and inspections were made on a new service change on that same structure in 1980. Stripping the interior walls for investiga- tion was not required. He said it __.was important to note that in Unit 2Vi-A, the. _unit was totally remodeled last year,incl uding a new kitchen, as well as the garage. He said Mr. Kr,okee felt that.a reasonable cost to rehabilitate the structures was approx- imately $10;000 per unit. In Mr. Herman.'s opinion, the report reflected a proposal to convert a 1924 house into a 1981 custom condominium,'and it could not be done, that there was no compari- son. The structures were in similar condition to other houses existing in Palo Alto that were close to 60 years old, and tended to show a little age, but were by no means substandard. Jeanne Smith, owner of the property, said in rebuttal to Mr. Herman that the service at 218' was changed for the downstairs unit because of the gas lino. They wanted to keep electric only in that uni t. The upstairs unit was not changed. She said that if Mr. Herman had gone into the unit and crawled underneath, he would have seen that the foundation was below the dirt. She said when she was asked if City staff could come out, she told Don Maynor that would be fine, that they should bring overalls and they should really go underneath the property. Mr. Maynor said that he and Mr. Herrman would come, and she made arrangements with the tenants. Mr. Herman, Mr. Maynor, Mr.. Krokee, Mr. Ganschow, and a woman all came out. She had made arrangements for the ter- mite man to be there, who agreed to crawl with them underneath the property and report the various things he had seen, and answer questions. She said the City staff did not go under the property, they did not go into the basement, which would show that the foundation was cracked, and there was crumbling dirt. There were wood pillars going down into the soil. She was upset because she felt the City's inspection was not as thorough as it could have been. As the owner, she had gutted unit 218-A, the downstairs unit that had the new kitchen, and the wails were not good, there was nothing holding the corners and the building to the foundation. Mrs. Smith said she was concerned that if there were an earthquake, she would be hit .with lawsuits because she owned property that could slide off the foundations. Unit 210 had gone off the foundation. She asked if staff would like to come back again and crawl underneath the buildings. Regarding keeping low rentals and keeping_ the .neighborhood: in a -good condi- tion, right -now the rents were far be i ow the market-. If she had to take out a loan to make the improvements which must be made, the rents ,;would have to be increased to cover _the loan. Regard- ing the neighborhood's feelings, she felt that Palo Alto was a very special place. She had tried to keep' the property in the same condition for their tenants as they would like to have if they lived in them. She said that did not include doing major structural work. They had bent over backwards to make it easy for the tenants to stay with low rents. In going. with Ms. Turner's plan, they felt that her plan fit better with six units than if they had -gone with others who wanted to put more uni ys. on the property. She would have nothing to _do ---with the property after it was.solu°, and she could make more money if she sold each ,property - separately. There were definite -reasons that if the property was sold in one- piece, ..it was better for her, and it was better for ' the City rather than have someone -take over the. exist- ing small places and having to worry about them. If the property was going to` be developed ae condoriiniums, she thought everyone was aware that. there were parking problems, energy problems, .and there were- housing problems. She said it was true condominiums would, 'cost more_, money=, but there was -more space,, and = the .cUtrent trend was for people to _live together., in separate units.. Re- garding : the -neighborhood ,character, it was.,not --all little houses. Mrs. Smith' said she_ thought .there -:was such a thing as owner's r°lghts, she. -had tried,, to -do.,-a good job for Palo: Alto=,-- and they had hoped that this propert, would provid a fu-i ds for -their r.e- ti rement. .She could ..not understand why this .could not tie done. Clay McCullough, San Jose, the licensed contractor that was called in to prepare the report for Mrs. Smith, said he had worked in Palo Alto, and had been licensed to do business for about 32 years, and his specialty was refurbishing, restoration, and rebuilding fire damage and other type of .work. He was not a new builder, he was a reconstructer. }le said he felt comfortable when he prepared bids of this kind because he Went under the building and inside the attic --at least the. portions they could get parts of their body in. He and his assistant went thoroughly throughout the structure. He explained that the remodeling busi- ness was such that the minute a wall was opened up and. plaster .stripped off, if a wall was going to be patched, you can't simply patch it, you must go corner to corner. A small patch on a 60 -year old wall was not an effective way of making good cosmetic repairs. -When a wall was cracked and essentially not worth sal- vaging, one must go -at least wall to wall. When this was done, normally ene was, required to bring the electrical, insulation, mechanical and any other areas within that wall, up to Code. He did not know if the City had addressed the termite report. A responsible termite company had made a very valid inspection and his company reviewed the inspection and took it into considera- tion as part of their repair -estimate. He said banks required termite inspections when refinancing and preparing to arrange for -new construction loans. He said that if the Council directed their attention to the packet of information, they would find that a good deal of the repair costs were reflected in termite work. He said part of the:termite work meant to patch, cover-up, paint, floor and do other work after that. He said the figures he had put together were as reasonable as he could provide;in his experience. Barbara Turner, 424 Webster Street, Palo Alto, applicant, said she had not intended to get into the subject of whether the houses were ready to fall down. It was not a required part of the approval process, and she thought she had been forced'into discussing it. She felt she had shown that the properties in question were old houses and ,that they required a great deal of work. Mr. McCullough's figures indicated something like $68.75 a square foot to rehabilitate the properties. She thought that was a far more important question than the cost of rehabilitating versus the cost of new. On a $450 ,000 p.i ece of property, there was 3300 square feet of living space. The state of the property and necessary repairs was something that must be dealt with be- fore long. It was not desirable for a City -to have a housing stock -which was predominantly 60 - 75 years old. It was better to use the land for new construction that would be within the re- quired setbacks, that would be built to Code, and that would pro- vide underground parking spaces, where the street`, was now cur- rently used. She proposed to build six housing units at about 1800 sq;iare feet each; where five now stood at approximately 650 - square feet each. She proposed to provide 12 parking spaces where three currently exist, and provide housing for 12 adults and their children, where five single adults now live. She pro-, posedto do this all within the RM-2 zoning with site coverage_of_ less than; 35%. Their neighbor, Larry- Chu, owner of 204 Waverley spoke before the .Planning Commission on October 7, in favor of the project. They had not had a single property owner in the area speak against the proposed building plan. She understood. why the tenants wanted to maintain the status quo, however, she said they would not be appreciably upsetting the balance of tenants :_ to owners with the new project. The City's own study, released in January, 1981, by George Zimmerman, showed one-third of all the condominiums built in. Palo Alto between 1976 and 1981 became new rentals.; She was required -by City law to notice ?00 properties of which 56 were :owner --occupied .and 44 were tenant - occupied. With the proposed six units added, two rental and four owner occupied, the balance would be 60 -owners to 46 tenants. The ratio would-be 1.27 to 1, moving up to 1.30 to 1, which Was hardily any change in the status of that neighborhood. 1 4 5 0 11/23/81 Mrs. Turner said that the current real estate market had created a greater number of new, rentals than one-third. Approximately One-halfof all the new condominium construction in Palo Alto was currently rented.- Furthermore, she said they were investors not building to sell. She said they were doing what Jeanne Smith and here husband had done$ -they were building something for income. They had hoped to hold all six of the -un;ts, but with interest rates and building costs so high, she was not sure they ce-u1d.- She said that of the Webster Court's 9 units, they expected to hold three whole Ones and six half ones, because they were offer- ing equity sharing and it was turning out to beH a popular pro- yram. On -the Waverley project, they hoped to hold as many as they could afford to hold. From- their experience on Webster Street, they expected that the buyers would:be professional fami- lies now owning single-family homes. i_n Palo -Alto thus freeing up existing housing for first-time buyers. The site was currently single-family mixed with condominium and rental apartments, very similar in character to -431-441 College Avenue where the Council just approved a nine -unit condominium project. The College Avenue site was now occupied by 50.60 _year- old bungalows similar in character and :age to those on Waverley. She said that the Waverley site before the Council would have taken 15 units under its former zoning, which was changed five years ago from RM-4 to its present RM-2. Regarding fair play in the rules of the game, Palo Alto had given its: approval to zoning as the predominant criteria in approving a subdivision map by requiring Architec- tural Review Board (ARB) .approval and a negative declaration as the -first step in the approval process. She said the cost of securing ARB approval and a negative declaration, which she achieved in August, was in excess of $15,000 in architectural and engineering fees and City fees. If she had. submitted a project in conformance wieh the existing approval process, asking for no zoning changes and noavariances, and was then denied on the basis of policies which were not clearly stated up front and which were not equally applied to all subdivisions, she respectfully sug- gested that the City should either reimburse her as an applicant, for out-of-pocket costs, or change the approval process so that the policies were addressed prior to the spending of any money, Frank:Grist, Jr., Attorney who represented in part the owner, and in part the developer of the project, said he thought the gut issue was the clash between the well -deserved social policy of -trying to retain the rental housing element in the City, and that of recognizing the existing zoning on the property, and then taking into consideration the useful life of the buildings, and whether continuing the buildings in their current state would further the rental housing element, as compared to what could be done -with the property under the existing zoning, and taking a .. look at building new units now as opposed to building them 20 years from now when they fell down. He said the buildings Were_ built_in in 1924. The useful life -of a building normally was 40 years, and -these had been there substantiall/ longer than that. He said'ter€uites-had -infested not only the subterranean timbers, -but also up into the. walls, which lead him to ask Mr. McCullough to take a good hard look a# °the units -and what the cost to bring the existing dnits up, to standard would be. He said it was a trade- off. aTheyemight as welt have, five new units at a higher price than three, new units, if_;they were reconstructed at ..a high- er price. People_ wlo currently reside there wanted the rental element and wanted'to, keep their, rents at -the current rate, but that was not reali-stic. !;_ltiaately, the houses Would either fall down, or the -termite -damage would. haveN to - be repaired'. If it was repaired, then the horrendous remodeling costs would have to be faced.-- -Th.e policy for rental conf_iicted with the condition: of the building and that, had to be recognized when deciding whether to. go. -with= the existing "zoning or whether tC preserve :the rental houses. io!iq-term wise, it- made no sense to him, because in 10 or 24 dears from now, it would cost substantially more to' build., 1 4 5 1 11/23/81 and the rents would_be higher. He felt Council should make a l eng-term decision, and to him there was only one way to go, and that was to allow the five new units even at the higher price, which tomorrow would be the lower price. Marie O'Gara, 220 Waverley Street, said that when she collected signatures for the petition against the application to build con- dominiums on the 200 block of Waverley, she found over 85% sup- port. These were people who.knew how hard it was to find housing in Palo Alto. She said among the signers were two owners of apartment buildings who said the people had to live someplace. She said the tenants of the property would be displaced, perhaps totally out of Palo Alta, by the proposed condominium develop- ment, yet they worked in Palo Alto, participated .in community events-, they had ehigh living standards, and they had cultural interests, but were not in the financial position to buy property or pay the high rent of property devei oped to the scale of the proposed condomi n i ums. They were being pushed out of Palo Alto .into less attractive, less comfortable, less convenient but more affordable communities. The fabric of the neighborhood, its in- habitants and its intimate character would be torn apart by the new condominiums. The range and mixture of the - present inhabit- ants would be replaced by an upper income class of people. She did not know whether the zoning specifically allowed for condo- miniums, but she did know that even if the zoning allowed for condominiums, it was neither a -compelling reason nor a mandate to buildea condominium development. She felt that a new development should enhance an area. She said it had been shown that the little houses were inhabitable, sturdy and attractive, and if new condominiums must be built, let them replace delapitated struc- tures or buildings in bad repair, which could be found elsewhere than the 200 block of Waverley. Ms. O'Gara spoke on behalf of Nettie Sproul, 2.18 Waverley Street, who said she shared the concerns expressed by her neighbors. She felt lucky to be able to live in a charming apartment over a gar- age in a hospitable neighborhood convenient to downtown. One of the main reasons for choosing the apartment was because it was an older structure and was unique. She was opposed to demolishing the affordable housing on the three lots to make way for the uni - formity of the proposed condominium development Additionally, and of particular concern to the_`residents of Bryant Court, which adjoined the proposed development, was the increased traffic that would result from the addition`of 12 parking spaces to accommo- date the six units. She said that while the parking world be built under the units and would not encroach on the court, the only aceesee to the parking spaces would be by way of Bryant Court. She Said .the Court was a narrow, one-way lane without sidewalks. It was not designed to be used as a City street, Already it bore more traffic than intended. Mot of the cottages on ,the lane were not set back as were houses on standard City sci Bets, and the traffi c literally -passed through their :front yards.: None of the icurhent traffic was attributable.. to the tenants_`of the:. .five rental units since all had access frnr wavenley. Street The proposed ,development posed. a substantial threat ` to the =safety of the ..lane either by owners obeying the one-way Sign and thus iMposing an intol1erabla traffic burden on the lane, -.or by ignoring =the .one-way restrictions and using .the - exits nearest their parking facility. Virtually. all residents of .Bryant_ Court raised that objection as they signed the petition. She urged the Council to consider _:the foregoing when making -their decision. 0ouglas--Leadenha lS 218-B.., waverl ey. Str"eet, renter .of a da,wnstal rs apartment,. spoke in opposition, to the proposal -to build condomin- Awns,- He -sail the present units were:pleasant and affordable' to young professionals. They could -hot rece mend demolition of the nice residencese in favor. of: condominiums which would cost about three- to four t'''ones more than they were now" paying in rent.e He said it was not unreasonable to think -that 1800. Square foot con-_ domini.ums, such a.s the proposed,. would cost 52,000 per month in 1 4 5 2 11/23/61 1 1 1 order for the owners to pay the mortage on them, assuming they could come up with the downpayment if they wanted to stay in the neighborhood. It would require most of the tenants to earn be- tween $5,000 and $6,000 per month take-home salary. He said it was certain that under the type of proposed development, none of the residents could stay in the condominium units as much as they would like to. He could not recommend this type of proposal be- cause he did npt feel it was a reasonable use of the land. Iry Brenner,.250 Byron Street, said the Planning Commission staff found that the project did not meet the requirements of the Com- prehensive Plan on numerous points and rejected it. He said the points included neighborhood changes and loss of rental units. The Comprehensive Plan was an enforceable document which repre- sented a considerable investment of time, effort and money on the part of the City. He said that the previous, adjacent project proposed by this developer was the first to be considered under the new 1.980 document, and was rejected because the rental and economic issues described in the Plan guidelines reflected dras- tic changes which had occurred since the 1977 Comprehensive Plan was written. He said the developer referred to the zoning and presumably had met zoning requirements. T`.e project site was zoned RM-2 and required a merger of property not yet granted. He pointed out that all zoning designations other than RM-2 were quite specific as to the type of property which may exist there- in, but only RM-2 allowed for flexibility and required a decision to be made based on factors related to the surrounding neighbor- hoods. He quoted the zoning regulations for RM-2, "...is intend- ed to create, preserve and enhance areas for a mixture of single and multiple -family housing which is compatible with lower densi- ties nearby including single-family use, but can also serve as a transition to higher density multiple -family districts." In other words, a decision could be made by the Planning Commission and Council, depending upon the tenant goals of the City with respect to that neighborhood. With respect to rentals, many current condominium projects had been on the market for months;: and he could not imagine what benefit the proposed units would provide. More importantly, five medium priced rentals would be lost from an already critically low rental stock. The vacancy rate in Palo Alto was less than 1%, and . new condominium units only added to an already saturated marketplace., He did not think the issue was low versus high rentals, but rental of any cost versus condominiums. He thought that it did not matter what the actual rental costs were --if a person could not come up with a $50,000 downpayment or qualify for a loan, it was a moot point.' The current tenants had expressed a willingness to pay higher rents if the places were repaired and higher rents were required, but simply could not afford under any circumstances to buy a condominium. He quoted Barbara Turner as saying, when stating her opposition to a proposed project near one of her Webster properties, "our only aim is to retain the residential character of the neighborhood." The neighbors of this project could not have said it better. Mary Liederer, 197 Bryant, said she underscored the fact that she wanted to be able to . afford to live in Palo Alto, and no matter what the statistics showed, it would change the quality of life to have condominiums right _in her backyard. May Henderson declared the public hearing closed. Mr. Herman said that the comparison: he- did was based on Mr. McCullough's report, the Uniform Housing Code, and the Palo Alto Municipal _Code. He was not looking at new structures or bringing the, buildings up to safe code. The reason..for- not going Oder the crawl space was that the City staff assumed the foundation was doing the Work, it was obvious from the exterior and from the crawl _ hole. There W4S no need to go underneath to verify. They did go under the house with a basement. - The : foundations were included in the $10,000 estimate given by Mr. Krokee. He had actually received a bid from a contractor who did- business 1 4: 5 3 11/23/81 continually with -the Housing Rehabilitation Program, and could still operate under the $10,000 cost. -The other point was that a house was not required to be completely rewired for a kitchen remodel. Regarding the termite work, they did not go into that in detail. He added that `he had never seen the complete stripping of an exterior of a building and all the stucco in order to inspect. The typical way of doing that was to drill holes and see how far the damage : went, -_not to completely remove the exterior and interior walls. Director of Planning and Community Environment, Ken Schreiber, said that Mrs. Smith had indicated that in selecting the particu- lar developer, consideration was given to other developers who would have provided higher -density or more units. He noted that the proposed six units were the maximum permitted under the RM-2 zones for these parcels in combination. He said any higher den- sity would have taken a zone change which w -as a separate process,. and in this area, the City would have been reluctant to entertain a higher density. He said the factor related back to the nature of the RM-2 zones_. The RM-2 zone was-` a _ 10 w -density multiple - family residential zoning, intended to apply_ to areas of a mix- ture of a single and multiple -family units. On individual par- cels, especially in an older part of town, many of the individual parcels were single-family units, that unit was compatible with the RM-2 zone. The conformance of the project to the RM-2 zone in terms of density was an issue, but the existing development's use of the property was compatible with the RM-2 zone. Vice Mayor Fletcher said there was a comment -made by Commissioner Cullen that the City was under no legal obligation to issue a subdivision. The current owner ryas all of the development and compatibility in the existing zoning unless something was done to change the subdivision. She felt that the impact of destruction of the structures in order to put in new high priced condominiums created a problem on Bryant Court, where the additional traffic far outweighed the benefits. MOTION: Vice .Mayor Fletcher moved, seconded by Klein, to adopt the Planning Commission recommendation finding that the project, including the design and improvements, is , not consistent with certain policies and objectives of the Palo Alto Comprehensive Plan (such consistency is required by Government Code Sections 66473.5 and 66474 and Palo Alto Municipal Code Section 21.12. 090(b)), and that the subdivision be denied for the following reasons: 1) The project, together with its design and improve- ments, is inconsistent with Housing Policy 2 (Palo Alto Compre- hensive Plan, P.9), "Preserve older single-fan'ily homes and small apartment buildings," in that this project would remove four older residential structures containing five units. The existing five units have a density within the parameters of the multiple - family zoning and are less expensive than the project's proposed six new multiple -family units. The proposed development would undesirably alter the neighborhood character in the vicinity of said project. The fact that some of the existing units may require some repaie, as is the case of .many alder homes in the City, does riot justify their removal for purposes of the proposed project. 2) The project, together with its design and improve- ments, is inconsistent with'Housing Policy No. 8 (Palo Alto Com- prehensive Plan, p.14), "Maintain at least the present number of multiple -family rental units," in that the project would :elimi- nate the five rental units presently located on such property and replace these units with an almost equal number of condominium units for ':sale. (3) The project, together with its design and improvements, is. inconsistent with Housing Policy No. 10 (Palo Alto Comprehens i ve Plan, p.15), "Foster the provision of some new and existing units dispersed throughout the City, for ownership and .rental by households of low and moderate income," in. that the project would replace existing low-priced rental units, capable of being rented by low and moderate income households, with an almost equal number of expensive multiple -family units. (4) The project,_ together with- its design and improvements, is -inconsis- tent with the Palo Alto Comprehensive. Plan Housing Objective (p.5), "It is important to maintain the character and physical quality of residential neighborhoods...to avoid drastic changes in neighborhood character .. . to protect. neighborhood quality .,. to improve visual quality," in that the physical design.;of the proposed project 1s massive in comparison with the surrounding structures and would result in a drastic change (demolition) and an undesirable alteration of the character '-and physical quality of this _older residential neighborho©d. (5) The project, to- gether with its design and improvements, is inconsistent with the Palo Alto Comprehensive Plan Housing Objective (p.5), "It is im- portant to maintain a diversity of housing opportunities," in. that the proposed project would eliminate from this community, which has an extremely low rental vacancy rate, five much -needed - moderate -cost rental units. (6) Each -of the -findings stated herein serves as an independent basis for the denial of this project. Councilmember Eyerly said he opposed the motion. He thought that the process by which the City staff and the Planning Commission made their recommendation of denial. was a process after the fact. He said the City went through a process of zoning within the City and that zoning to hint was inviolate as long as the developer or someone who wanted to change housing element was within the scope of the zoning. He believed the policies and the suggestions within the Comprehensive Plan had conflicting goals, and if the Council were to take them and apply tnem to certain` areas Of zoning, whether segments of the zone or to an entire zone, they needed to take the time to do that physically and have the Council support those -Comprehensive goals and aspirations for a certain area. If they were not supportable for an area or if the Council did not want to allow it continue in,the zone,' -thee they needed to go to a rezoning, He thought that' on this particular request for a 'subdivision, the Council had not done that, the zoning was there, and the. Council was going for those plans after - the fact, Counci lmember Witherspoon said that in addition to her comments made in August, on page 1170 of the Council minutes, she found it even more difficult to find a rationale for denying this new project on the basis .of the policies in, the Comprehensive Plan. On page 5 of the staff recommendation, giving the findings staff suggested the Planning Commission adopt, she could not find that this project violated those policies any more than any other project approved recently by the Council. Regarding the finding that this project was inconsistent with Policy No. 8, if the en- tire policy were read, the rest of .the Policy talked about the condominium conversion ordinance. Regarding Housing Policy No. 10, that policy went on to talk about the Government assistance programs for . helping people subsidize their rentals. Regarding the proposal being inconsistent with the Comprehensive Plan Hous= my Objectives, :on page 5, one objective was to prevent deterior- ation. Regarding it being inconsistent with the Housing Object- ives because it was important to maintain a diversion of opportu- nities, it went on to say that it meant a mixture of ownership. and rental housil.g at a full., range of housing prices. She did not think the foregoing justified denying the project. She could not make those findings, and she thought ; it was shaky to -start denying projects in the piddle of the game before the Council had set. the real poi ie ies to- change the rules. Council ' hadj always maintained that if you had the zoning, you were allowed ; to do what was allowed under that zoning, and: that the policies and programs in the Comprehensive =Plan,. came into play only when nego- tiating to do something special with the :property, such as asking. for a zoning change` or some kind of variance. She paraphrased her understanding of the consensus of last Monday night's meeting with the Planning Commission was that Council would stay with the zoning being the criteria of what one could do with one's proper- ty, and that some kinds of mitigation procedures would be devel- oped where there were problems, such as in this proeerty, and some rules --made that everyone could follow. She thought it would he inconsistent to deny the uoject "in the middle of the game." Counci lrnember Klein said he would vote in favor of the motion. He was Concerned that the City was losing rental housing eeite and this project would add to that tendency. He thought it was appropriate- for the Council and the Planning Commission to take the rental housing issue into account because this was not strictly a zoning matter. If it was, it would net be before the Council, it would be before the Architectural Review Board. If no one appealed `it, it would have been automatically .in effect. He thought the applicant was asking for something from the City because subdivisions required for condominiums were different than the rental housing units that could be built -under the existing zoning. He did not think that was a mere formality, but rather significant. He said he thought there was -a significant difference between condominiums and rental units in Palo Alto, and he thought the law wisely gave its discretion, once that re quest had_been nude, to the City. eWith that discretion in hand, he did not think the project was appropriate because rental hous- ing units would be lost to the extent that they would be far higher priced. He did not think it was a good trade-off for the City, and .as one charged with the responsibility .of trying to do something about Palo Alto' -s housing problem, he thought the decision should be no; and thus, one small thing to maintain the City's rental housing stock would have been done. Councilreinber Bechtel said she believed that the denial as recom- mended by the Planning Commission was appropriate. The projecte. the design, and the improvements were not consistent with the policies and objectives of the Palo Alto Comprehensive Plan. She. argued that Policy No. 10, which discussed the maintenance of rental and ownership for low and.moderate income persons, did not refer only to government programs providing such housing, and reminded the Council that the government programs were not enough and they were too few. She thought that with the current Admin-- i stration policies, they would be even fewer, and low arid moder- ate income rental housing was needed. Regarding the housing ob- jective in Finding No. 5, "tce maintain a diversity of housing opportunities," _ she thought that the present housing being con- -str-ucted was in the $150,000 and up range.' She had not seen, other than belowemarketerate programs under construction, eany other projects that provided .the. diversity -of opportunities, not jest for those people with incomes that would enable them to pur- chase housing at $150,000 plus. She thought the Council needed to'deny the project because it -was inconsistent with the Compre- hensi ve. Plan, Councilmember Fazzino said he would support the Planning Commis- sion reco'nendation. He said the push in this area_ An toward°condo- - iniums reminded him of the efforts; n the late 1960's in the Downtown South area with respect to building of apartment homes and condominiums. He did not want to see the same kind of whole- sale development occur in this important area. He thought this area was a physical jewel in the City of Palo Alto and that perhaps it should be considered an historical district in and of itself. It was the oldest area in town, and deserved the City's attention, to preserving homes in that area. He ' was _di sburbed - by recent efforts to change the_ physi 1 character of the area. He said others spoke to the issue of rental housing, but ; he was concerned with the physical issue. The facts.. provided -by the City's Chief >Building- Official assured ' him 'that rehabilitation could occur in those homes without significant economic loss. ''He believed that the existing units could be rehabilitated to the 1 4 5 b 11/23/81 point of providing tremendous economic gain to the .owner if the owner wished. He did not want the structures to be last. He wanted to see more creative and imaginative ways to preserve the structures rather than placing new and sterile structures in that area. 1 1 Councilmember Levy said he would support the Planning Commission recommendation. He also fel t that the owner was not entitled to a subdivision, and that was something the Council could give or withhold at. its discretion, He agreed with Councilmember Fazzino, and said he thought the issue was one of scale and the character of the neighborhood. He did net _think it was an issue of. rental versus owner -occupied housing. The units were rental only because the owner of the -property chose to rent them; and, in fact , three of the units -Were single-family homes and could become owner -occupied. He thought the Council should not, take any steps to force owners, once they were in a rental mode, to stay .ln--a rental mode. He thought it _would drastically discour- age owner -occupied housing from become rental housing -if there was no way it could go back to owner -occupied. Regarding the issue of lower, middle and upper income housing, the current units were not'- Lower and middle income persons. The present occupants were younger, mobile singles, and there were no fami- lies with children. He setid each unit was. occupied by. only one individual. Obviously, any new housing was more expensive than old housing, but that was not an argument for keeping older hous- ing in a permanent mode, and not spending money on i t . The major issue to him was that by combining the lots and building a 35 -foot condominium across the three lots, the scale, character and physical quality of the neighborhood would be drastically changed. To him, that was an overwhelming element, and he agreed with the Planning Commission that the Council's discretion shouid be used and the requested subdivision not granted. Councilmember Renzel thought that changing the neighborhood char- acter was the most important Comprehensive Plan element in con fl•ict. She could not make, the finding that this project was not in conflict with the Comprehensive Plan, and would, therefore, support the Planning Commission recommendation. Mayor Henderson re-emphasized that the area was zoned RM-2 be- cause of the mix which existed in that area and specifically the preponderance of single-family homes, both owned and rented. --The Council had wanted to retain single-family housing as much as possible, and RM-2 zoning gave the Council that alternative. He said he would be going against all of the Council's purposes and desires for the area to give in to the condominium type develop- ment. MOTION PASSED by a vote of 7-2, zyerly and Witherspoon voting "no." Councilmember Witherspoon said that in light of the obvious sen- timent of the Council and Planning Commission and the direction it is taking on this, she would like to ask the City, Managerfor an indication of the type of follow-up last Monday night's meet- ing would have. She thought that if this was the policy the Council wanted to set, some rules had to be made by which people. could interpret the Council better. City Manager Bill Zaner said staff had indicated to the Council at the work session that they would need to pull together the comments that were made, and that staff meeting was'schedul ed for tomorrow. Following that, staff would return to the Council. Counci_lmember Witherspoon asked if there were any similar proj- ects to this one in the pipeline? 1 4-S 7 11/23/81 Councilmember Witherspoon clarified by saying that she thought the Council could best be productive by deciding whether they were concerned about this neighborhood only- or whether they were - concerned with setting' a City-wide policy. She thought perhaps it might be simple to do something with this neighborhood if that was the Council's main concern. She thought it was only fair to warn_d.evelopers that the- Council might be thinking of a morato- rium or something. Mayor Henderson expressed. that as the Council Moved on in the Agenda, they _needed to take the, Winter Club matters in three steps: First, Item S, would be the formality of discussing .the request for the Winter Club to be established at Greet Park. Second, -Item 9 should be discussed in two parts: 1) the policy regarding leased use of City -owned land or facilities; and, once that policy was:determined by the Council and approved, discuss the data regarding the Winter Club's request to use the Geng Road site. POLICY AND PROCEDURES COMMITTEE RECOMUUENDS TO COUNCIL THAT IT ACCEPT THE STAFF RECoMMENDATIor CM-R:43G:1 NO. 1 THAT "COUNCIL NOT AC •3' iH_ R N S _ li f Ll; a PARK." Vice Mayor Fletcher, for the Policy and Procedures Committee, said that the Policy- and Procedures Committee had met on September 15., by which time significant neighborhood opposition had surfaced to the location of an ice skating facility at Greer Park. She said that at that meeting, the Friends of the Winter Club Andicated that they.'would not pursue that particular loca- tion for the facility. MOTION: Vice Mayor Fletcher moved, for the Policy and Procedures Committee, that the Council not act on the Friends of the Winter Club's request for Greer Park. MOTION PASSED unanimously. POLICY AND PROCEDURES COMMITTEE RECOMMENDS TO COUNC4 THAT IT 1) ADOPT TiTE sT rf RECOMMENDATION POLICY REGARDING LEASED USE OF CITY-OWNI"O LAND OR FACILITIES. ADD 2) THAT STAFF CONTINUE f0 WINTER (CLUB' S RE O UEST FOR USE ANALYZING THE S'ECIFrC RE EST IN ACCOREAN'`T WITH WE RECOMMtNDED S TRANSMITTED TO H UNC U R S ._.SOON IE ELF ER AS POS I'L L E . ('C 4R : 5 :1 ) Vice Mayor Fletcher said the Policy and Procedures Committee met on October 20, and they reviewed the proposed policy regarding. the leased use of City lands and facilities. The Committee agreed with the staff that such a policy was needed, and was satisfied with some minor modifications with the policy as recommended by staff. She said that the proposed policy would not apply to interim uses which would make no significant changes in the existing property. Further, she said there was an error on page 5, section 2, last line,' -and that the word "notified" should be "satisfied." MOTION: Vice Mayor Fletcher moved, for the Policy and Procedures Committee, that the Council adopt staff recommendation Policy Regarding Leased Use :of City -Owned Land or Facilities. Vice Mayor Fletcher said . that some, of the highlights of the pro- posed -policy were that the proposed leased use must: be compatible with, incidental to, and/or supportive of 'the'primary public use of the City -owned -property, and : shall become_ consistent with the provisions of the - park dedication ' requirements, which 'requires that the use of the parts dedicated land be park, playground recreation or conservation and related uses. In all cases 1 1 where there were significant approval requirements, the Council shall award an option to lease setting forth all preconstruction operation conditions as preconditions to the tenants obtaining the lease. That applications for such use shall provide various types of information, such as, that the purpose of the lease was to,fill a public need for the proposed services or uses, that the consistency- of the proposed use with the existing City goals and objections be made, consistency oft the proposed use with the existing plans for the property facility, the impact of the proposed use, the'degree of public access, and the fees charged for Palo Alto citizens in'keeping with the policies for public facilities. In the case of parkland, any fees or charges should be minimal, that the City shall provide reasonable and appropriate opportunities to other groups or entities,to respond .to possible use of City facilities. The procedures would be that a notice of intent to award an option to lease would be published daily for oie week in the Peninsula Times Tribune and twice in the Palo Alto Weekly, that the notice shall- provide at least thirty days notice prior to a public hearing for Council action to award the option to lease. - in addition, copies of the notice shall be mailed to residential property owners as it was done in normal notification.procedures. A -request for proposals will he sent to groups or entities likely to have an interest in submitting a proposal Subsequent to a public hearing_ and notice of intent to request proposals. Copies of the notice shall be mailed to residential property owners in the affected are&'. The cost of the above procedures shall be borne by the successful proposer. Construction shall take place after having received Council approval of plans of such tenants proposed construction. Tenants shall be required to provide City with adequate compensation for the rights granted by the City to the tenants. Generally, improvements to the real property shall become the property of the City uron termination of the lease. Vice Mayor Fletcher said that the foregoing were some of the highlights of the Committee's discussion, which pointed out that there would be a very open procedure followed, that the public would have adequate notice and opportunity to appear at public hearings, and generally, the public would have an opportunity to have adequate say through the Council in anything that took place in that regard. Councilmenrher Witherspoon asked Mr. Diaz if it was the Council's intention that the -proposer would pay Architectural Review board (ARB) fees or whatever even -_if the proposed construction were not approved? Real Property Administrator, Jean Diaz, said that was correct. ape of the standard conditions in the Option Agreement was that the proposer was responsible for those costs. Councilmember Eyerly said he was impressed with the policy as presented by staff. i{e thought it solved a lot of problems that had been hanging, or could possibly occur in the future. He said that in Section C, which started on page 3, regarding inclusions for people who might lease facilities or property, he thought the. Council should ask for a yearly profit and loss statement from anyone who had the use of public facilities. He realized that on page _4 the recommendation on, was that fees . be charged to, Palo Alto citizens, and that the intent of ,the ,.C ty was to provide public access to the facilities at prices and/or fees that were fair and reasonable- to the public. He thought that in order to substant i ate that the fees were what they ought to be, the Council needed A profit and loss. He asked staff for 'their comments as to why that was not asked. for. Mr. Diaz said that in essence that was the kind of information that a proposer would have to put -together in order to. address all :� the concerns represented. in the criteria the proposed fees to be charged, the expenses of the operation, and the economics of the operation were all looked at in assessing the concerns as well as' monetary considerations to be provided by the City. He thought that in order to properly address the criteria set forth in the proposed policy, that kind of statement or analysis would have to be performed . as part of the application and analysis. Councilmember Eyerly said the reason he raised it was that. in the golf course, the City did not have access to the figures oh the profit and loss statement on:the coffee shop. He was-- concerned that unless the profit and loss statement were spelled out spe- cifically, the City would not get it. Mr. Diaz said that in terms of leases, the City's typical policy was to very thoroughly audit -financial statements, In the case of the golf course coffee shop, the Council made a decision toe modify -that particular requirement for that particular operation He said that the standard clauses that were put into the .City's leases, especially those that provided a percentage kind of lease, clearly required economic information about the -income -and expenses of those operations. Bob Moss, 4010 0rme, said he was opposed: to the ;notion as cur- rently drawn because as both an actual and potential user, as an officer of organizations that presently do and may in the future use City facilities, he thought there Were a number of deficien- cies in the report. First, it ' did not say whether it was for on- going or only future lease. He said that if this were opened up to people who had existing leases, there would be a real problem. Second, there was no threshold either in square footage, value of the lease, or dollar amount, which meant that if an organization of which he was an officer were to go to the City and want a lease or use a couple of hundred square feet as an office, they would have to go through the whole rigmarole. Thirdly, it did not talk about sublessees. Would an organization which currently subleased City facilities from another organization which had a direct lease from City have to go through the entire function? Regarding the pur- h.ase of Merman, did it mean that the new ' com- munity center had to go into the bucket with everyone else who might wish to go in and lease the facility. Unless there was a statement delineating how the policy was applied, he thought the answer. was yes. Further, he was an officer of an organization that sublet on City property to other' organizations. He said that Organization might move to City -owned property, and they might wish to continue as a sublessee to that organization. It would be a new sublease --not an existing one. Would they; as a sublessee, have to go through the whole operation. If the answer was yes, he would not do it. He thought the basic thrust was there, but a lot of clarification was needed. Mr. Diaz said he thought Mr. Moss' concerns could be taken care of quickly. The policy could not be applied retroactively be- cause it would trot be practical or feasible, and it was not the staff's intent. He said it was the intent for this to apply to future, applications beginning with the Winter Club's request, which was on the agenda tonight, With regard to subleases, the City's leases provided conditions for the rights of tenants to sublease and not- to sublease. He thought that consistent with that policy, if there were subleases consistent with those leae provisions, they would not have to go through the notice process. Regarding the Jewish Community Center (JCC) since it ` was an agreement the basics of which had already been approved by the City Council, and had been an integral part of the entire Lerman. acqui si t i on; the policy would not apply to them since he thought it would be a retroactive application, which was not the intent. Mayor Henderson said he thought -Mr Moss referred to A situation where school property was now being rented and the lessee might wish to move tc City property, and in that case would have to yo through the policy. Mr. Diaz said yes, if under the policy they were going to be a_ direct tenant of the City. Councilmember Levy asked Mr. Diaz to respond to Mr. Most' ques- tion regarding whether there was a threshold i n terms of the size of the facility being rented. 1 Mr. Diaz said there was no threshold with regard to size, only that it would not apply to interim uses where no significant change in the use was proposed. Councilmember Levy asked if it would make sense to have a thresh- old so that smal3 leases would not have to go through a long process. Mr. Diaz said if the Council desired. Councilmember Witherspoon responded that inexpensive space was very tight -An Palo Alto, and that many nonprofit groups were com- peting for it. She thought -that if it were not opened up to some kind of competition even if it were only 100 square -feet, the Council would be looked at as favoring one group over another. Councilmernber,Renzel said that regarding the matter of consistent subleases that would not need to go. through the process, would it be desirable to put explicit language in the policy to that effect. Mr. Diaz said he did not think that was necessary ---that it was pretty clear in the policy. He said they were dealing with the award of the leases themselves, and as long as subleases were consistent with that, he did not see any problem. MOTION PASSED unanimously. Vice Mayor Fletcher said she wanted to mention that the Policy and Procedures Committee was willing to consider the location ell ,. an ice skating facility at .the Geng Road si te, and asked staff to provide an analysis regarding it. MOTION: Vice Mayor Fletcher moved, for the Policy and Procedures Committee, to adopt the staff recommendation: 1) Instruct staff to initiate the Notice of Intent to Award an Option to Lease procedure and set a:public hearing for the Council on Janaury 18; 2) Instruct staff to negotiate a proposed option to lease and lease,during the public notice period=.and 8) Provide. staff with any specific instructions regarding i tuns to be included uded in- the agreement. Councilmember Witherspoon said she remembered that in tie staff analysiseof the proposal, itssaid that only entrance and exit to the site'\wouid be on Embarcadero, which she thought was inappro- priate because with entrance and exit on Geng Road', they would at least have a traffic signal. She asked if 'that was the type of recommendation staff wanted now, or was it too specific. Mr. Diaz said that would be an item the proposer would have to keep in mind as they proceed through the option process. Me thought that if the Council had significant strong concerns along those areas it . would be helpful to know of them and allow the proposer to try and deal with those issues in the design process. Councilmember Witherspoon asked why it was a requirement? Mr. Mr. Diaz responded that through the environmental assessment process, the Planning Department indicated ` that due to some. projects which existed and had been approved that provided a traffic load onto Geng Road, that the additional parking and 1 .4 6 1 11/23/81 circulation added to that might overtax that particular intersec- tion from the Geng Road site. Councilmember Witherspoon said that even. so, if one was trying to get in and out on Embarcardero Road, there was the same problem on Geng Road. She thought the problem was not alleviated by try- ing to make one get out on Embarcadero Road without a signal. She preferred any proposers to return to Council with a good cir- culation plan, but not lock them into having to enter and exit off Embarcadero. Director of Planning and Cormmunity Environment, Ken Schreiber said that the Director of Transportation had reviewed the matter in considerable depth. The Geng and Embarcac'ero intersection was going to be presenting any number of potential problems, and the Director of Transportation felt very strongly that the access to this site would :be facilitated off Embarcadero, that ttv put the access through that Geng-left-turn movement, would result in con- siderable increase 'in congestion. The:: easiest access was off_ Embarcadero, and that a left -turn pocket or a restriping of that part of the road would be put in, but would be put in as p- •t of the project. Duncan Williams, 650 La Mesa Drive, Portola Valley, Owner of the Winter Club, said that the pr_-os l came from skaters who had long u ed the Winter Club and who felt that the . facility should be coe,,need `n Palo Alto if possible. Although he would only be involveo in the `;rro stages of this project, he was sympathetic to what they were trying to do. Marvin Lee who was the coordina- tor of the Friends of the Winter Club and who was making the proposal, felt that the Council needed to know a little about the present Winter Club before they could act properly. Mr. Williams said his experience was with ice skating as it was offered by community recreation departments as an outdoor seasonal, generally natural, ice facility. He thought that although such facilities were not offered in most of the mild climate parts of the country, it'was now technically feasible that they should be available and that they were completely appropriate for a community like Palo Alto. The Winter Club operated just during the fall and winter, and he thought they had been able to offer as dependable and reliable a facility as was offered anywhere in the country, certainly better than in most natural ice areas. He said they had an average of about 40,000 skating attendance during the fall and winter season. He said the majority of skaters were from Palo Alto, and the majority were elementary or junior hi gh school students, and their parents. He thought the Winter Club had been a very significant part of Palo Alto's total recreation program during the past 26 years. He was proud of the part it had played and wanted to see it continue. He understood that at the particular moment there might be some questio _as to whether:,. the Club was an extravagant user of energy. Their 'experience had shown that they were not extravagant, that they had with their 40,000 attendance per year a- usage of about 400,000 kilowatt hours per season. - They 'felt it could be demonstrated that this was probably a smaller energy. use . per participant than the average user consumed going to, and from the Winter Club. The Winter Club ` felt it had been a wel 1 -used and effective; facil ity as far as young people were concerned, and it had been about as problem free as any facility attracting anything , like the number of people that had used:- the Winter Club. He was proud of -the Winter CLub and urged Council -support. Mayor Henderson .. said his., children had enjoyed the. Wi nter Cl ub for a number of years.' They . lived about :, a mile or so away ; and could go by bicycle orwalk to and from the facility, and he felt fair- ly comfortable about it even though they;: had to cross Oregon Avenue. To go out Embarcadero and cross Bayshore into an entire- ly different type of area would have been a great concern to him, and he did not think he would have allowed his children to db it. 1 1 1 He asked if that was unusual, or if it might not be_ a fairly severe impact having the Club located in that area. Mr. Wi 1 1 i ams _ responded yes. The Winter Club had operated pretty .much as a neighborhood playground and he thought a substantial number of children did come on their bikes or by bus. He said it alas a unique situation to be located in:the aeenter of residential Palo Alto. He could not think of any possible site that would make At poSsible to continue that. He had looked favorably upon :the Greer Road site. A couple of neighbors felt there was a potential .attraction to crime in the neighborhod, and that while - he could understand that, he thought the Winter Club`s experience did not support that thought. . He thought thati most of the crime for which the Winter Club had been responsible were the crimes that did not happen because many hundreds of Palo Alto young people.- each week_ were invol-ved at the Winter Club. lie had inspected the Geng Road rite and it had some attractive aspects to it. Some"of his customers had expressed that they would find it extremely convenient to get there. He said that while- he initially had some negative reactions, they had been somewhat moderated as he had considered the matter. Councilmember Levy asked about the need for the facility to be on public land." If satisfactory private land were available, would it be a successful -commercial enterprise on private land? Mr. Will i..a.ms responded that the Winter Club needed all the hel p it could get. He thought that the real :costs were not greater than the real costs of swi nming'at the --community pool oe some of the other recreation facilities offered by the City. He did not think it was practical to ask the City to add the Winter Club to the community recreation program. On the other -hand-, with land prices -as they were, he thought that would be a considerable imposition to any successful facility and would certainly elevate the fees that would have to be charged, and perhaps reduce the broad spectrum of people who were able to use it. Councilmember Levy asked if the Berkeley and Santa Rosa facili- ties which were private, were successful? Mr. Williams said he did not know about the finances of either of them in detail, but the facility in Santa Rosa he did not think was self-supporting. It was built by the Peanuts Cartoonist Charles Schultz, and he thought Mr. Schultz was probably pouring back some .if his money to the community in a constructive way in an area he was interested in. Mr. Schultz had always used Snoopy on skates and carried the theme out in his rink, which he thought was a marvelous_ monument to his generousity. Councilmember Renzel asked Mr. Williams if it turned out that the East Bayshore location was tot attractive to children,- how major a portion of the revenue picture were the children skating in terms of having it be a success out there? Mr. Williams $aid the Winter Club had been a chi 1 drens' facility and many of the : children came in cars. He thought that the num- ber of bicycle spaces they had needed had declined heavily over the year's. He said, they used to have three times as many bicycle slots as they now have so maybe people were more in the habit of transporting their children by . car. He _ suspected there would be some detriment,:' but could not say what the impact would be. He thought that an extremely attractive facility could be built over there which would have some real advantages over", the current facilety, and that many people might find it very attractive. Its location on City land and adjacent to the ;golf course might make people.: aware of it in the sense that they were not aware of the hidden . location in the town now. Alison Lee, 1241 Harker Avenue, said she was appreciative of the amount of staff, time which had gone into preparation of the proposal- and, all of , the help which : had been given to the 1 4 6 3 11/23/81 Friends of the winter Club. She said that the point about the difficulty with the site across Bayshore, was one which they wanted to attack in a positive way in the sense that they wanted to commence good relations with the neighboring East P110 Alto. She thought the Winter Club wanted to meet the needs of the young skaters, and .that they might, have to initiate some sort`- of bus service that picked up at the junior high schools. She thought the'-problerm must be faced. She reminded the Council how impor- tant the Winter Club was to the families, the children, and the young people and to the adult skaters. The Friends of the Winter Club urged that the Council join with the Winter Club to keep the facility going. Marvin Lee, 1241 Harker Avenue, pointed out that tonight culmi- nated- a long siege of trying to figure out what would be' best to save the Winter Club for Palo Alto and for surrounding communi- ties. -He said that a year from April, 1982, Mr. Williams' lease would expire and his intention to retire would coincide. e In June, 1981, this matter was first presented to the Council, and it was now well into the end of the year, and if the Councir adopted the recommendation tonight, the Winter Club- -would still. have to come back January 18, 1982, which left a year and a half to raise the funds to build -the facility. If the Council could 1iyhten the burden on the Winter Club, it would be very helpful. Mark Yost, 1031 Crestview, Mountain View, said he. found the Winter Club about five years ago, and that no one had ,Mentioned the fact that during lunchtime he has gone down to the Winter -- Club and` been turned down because Mr. Williams had invited men- tally and physically handicapped children and let them askate and have some fun. He said from experience of being out en the ice with those- children, it was a sight one had to see to appreciate seeing their eyes light up while they were out there having fun. He thought the Winter Club was the kind of facility that had the potential to be something Palo Alto could really be proud of. Counci lmember Bechtel said she had been a member of the Winter Club and supported the activities of the supporters :of the Winter Club. She thought the Friends of the Winter Club should be ap- plaud'ed and commended, and also staff should be for the amount of work they had done so far. Regarding the particular location chosen, -`she thought that most of the very young children, and certainly any child under 11 or 12 would not be riding a bicycle to. the Winter Club in its present location especially if they were going home near dark._ She reminded the Counc i l members that the City had a fire bicycle bridge over Bayshore Freeway,. con- structed in part with City funds, which provided safe access to_. the location. She said the realized that with -the policy that had just beeir adopted, there was -a thirty day noticing period, and she asked why the motion was to set a public hearing ,on January 18, Mr. Diaz said that particular date was chosen because of the holidays. One of the important factors to remember was that the City was stretching the policy a little so that the process could be expedited. Typically, if one went through the policies, the, City would have an option to lease negotiated before staff came to Council and asked for publication of ,intent to set a "public hearing. In this case, recognizing the importance of trying to. expedite the process, staff had background information with the analysis and:..:staff, recommendation 'to proceed if the Council wanted to go ahead. During this time period, staff- will have to negotiate the option to 'lease, as well as satisfying the.;. public hearing notice process. Further, the noticing process was to be sure that people got the message thirty days prior to the public hearing, not thirty days from when the Council acted. 1 4 6 4 11/23/81 1 1 Councilmember Bechtel said she realized there were holidays during that period and she realized staff's ' time constraints and the many other projects. She asked if it would be possible to move the hearing date up one week? AMENDMENT: Councilmember Bechtel moved, seconded by Fazzino, that the public hearing be set for January 11, 1982. City Manager Bill Zaner advised the Council that other work may have to be put aside in order to meet the January 11 date. Councilmemoer Eyerly asked what other business might have to be delayed? Mr. Zaner said there were several items to come back the early part of January, i.e., Gamble House; the- balance of Ternan; the golf pro contract; the Santa Clara County Airport Master Plan was due back that night; and the theater improvement contracts were due back that night. Councilmember Eyerly said he must take the staff's recommendation because he was sure they had looked at the item and realized that time was important. Scheduling of the other matters mentioned by staff seemed equally important to him, and. he had trouble going against staff's Wishes. t He supported the Winter Club, but felt they had to fall into step with the other City problems. He would oppose the motion. Councilmember Witherspoon could not see that one week would make that much difference to the Winter Cl ub, but obviously it would make a difference in the quality of work staff did. Councilmember Renzel agreed. AMENDMENT FAILED by "aye." a vote of 7-2, Fazzino and Bechtel voting Vice Mayor Fletcher commented that the bus route along Embarcadero Road over to Eest Bayshore had been part of the County's plans for a long tine and she was assured that "`it would be implemented by next summer. Even though those plans may be put off, she was confident that eventually there would be a bus route. - Councilmember Renzel asked if it •was staff's intention to have a profit and loss statement showing projected revenues and oper- ating;costs by the time the lease was presented to Council. Mr. Diaz said there was considerable information in the packet with regard to the fee structure and the anticipated operating expenses. As part of the lease staff would negotiate, and since they would be recommending a rent significantly below "expected or maxi -mum market" rent the City could get, there would be condi- tions in the lease to insure that it was a nonprofit operation, and that the fees were fair and reasonable. MOTION PASSED unanimously. Director of Social and Community Services, Carleen Dedwell , : in- troduced Paul Thiltgen, the :new Director of Recreation for _ the City of. Palo Alto. She said that while . he had :been silent, he had a great deal to do with the development of the policy that the Council approved and also ' with the staff-work on the Winter Club. Mr. Thiltgen came from the City of Santa Cruz and the Mariani Company. Mayor Henderson welcomed Paul: Thiltgen, the City's new Director of Recreation. l 4-6 5 11/23/81 RECESS TO EXECUTIVE SESSION 9:40 p.m. to 10:00 FINANCE AND PUBLIC WORKS COMMITTEE RECOMMENDS TO COUNCIL RE THE C IVI o rove t e ex.an.e o ar lnanc1ny rouam as ou . ine': in e s .a repor an recommend that _Council- authorize the Ma or to execute tale loan a reemeni ..rove an .. recommen ' ounci aut or zation or t e Crt on ro er o es a' is a separate fund to rece f pt and it an ITV S SOLAR earninc,,s to tyre fund lased on lts avers a cas prove and recommend 'unci au on za ion o e u get men men to advance the an s oan ori xnat1on ee• 4 Ap'rove and recommen ounce au oriza on o raise e interest rate e interest). ('4ote: C arse on so ar owls to ten percent nnualized percentage rate interest will vary -on i 77117s to the loan amount-.' (C ik: 1 Councilmember Eyerly said that the Finance and Public Works Com- rrittee (F&Pw) u -&cussed the solar financing program and how suc- cessful it had been. He reminded the Council that they had given the program $550,000 for loans 'in December, 1980, which had all been comrni tted ' now, and -that the staff had gone: to work to 'find means of providing further financing to carry the program along. The key development was a tax exempt bank line of credit, and at the appropriate tine to go for a revenue bond issue for further financing. - He said the F&PW Committee did not find any fault with the proposals and commended the staff for -corning up with a way to continue the prograrn. The F&PW Committee discussed the rate of interest, and the only item of concern was the returning of the interest from the funds to the fund itself, rather than back to the General Fund of the` City. He said the Committee was convinced that for this particular program, the procedure which was in conflict, with the current procedure on other interest ,monies, should go foward because the money was needed to cut down on the cost of the program and to further the program and the number of loans that could be made. He said the Council did not have the ability to approve the resolution and some of the papers tonight, on advice of the bond- counsel, because the actual loan documents were not ready to go before the Council yet. MOTION: Councilme€riber Eyerly for the Finance and Public Works Cvmmi-ttee moved to approve' the Committee recommendation in concept only,, and staff to .bring this matter back on -Consent: Calendar -when the documents are ready for Items 1) and 3) . Director of Utilities, Edward Aghjayan explained that the bond counsel was working with the Bank of America to secure the actual loan documents. They were not rea"dy, and bond counsel advised Council not to pass either the resolution or ordinance that went with the item until the loan documents were secured and brought before the Council. ,Staff hoped that Council would pass items 2) and 4) of the recommendations, and approve the program in con- cept,. and that<'when the loan documents and everything were .in, -the item could be placed .on the Consent Calendar and no :further discussion would be- necess-ary. r MOTION PASSED unanimously. M01 ION: Councilmember Eyerly for the Finance and Public Works Committee moved approval of Items 2) and 4) above. MOTION PASSED unanimously. FINAL AGREEMENT - LEASEZFURCHASE OF TERMAN SITE (CMR:510: Real Property Administrator, Jean Diaz, thought it would be helpful for him to give the Council a brief background. He said that - some time =ago, the Council approved a tentative outline for 1 f the Terman agreement, The .outline was provided in the Council packet, and in going through that, the basic purchase price for the Terman property was $9 million with an initial payment of $1 million. The balance was to be secured by a deed of trust and promissory note with interest accruing equal to the District's rate of return. on invested funds on the. balance. Passage of ti- tle would be consummated upon execution of the agreement and close of escrow, and, thereforee maintenance would transfer at that time. Sta.ff.included in the -outline some options toe termi- nate. The first date was on or before November 30, .1981, if the Council chose to rescind the agreement prior to that date, the entire initial payment would be returned. The second period for rescission was subsequent to November 30, 1981, but prior to June 30, 1982. If the Council --chose to rescind the agreement within that, period of time, 95% of the initial payment would.be returned to the City ,He said there was also a provision incorporated into rthat regarding the Utility .User`s Tax,- if the City used a Utility User's Tax or similar tax as a revenue source an appro-,. priate provision would be made to assure that the school district was not -taxed for the -sale of the property and in effect paying a .double credit for that particular revenue source. Mr. Diaz said that in essence, the final agreement in the Council. packet this evening was consistent with the basic outlines approved by the Council earlier. As the School District's Counsel indicated in his analysis to the School Board, the changes were more of form than substance. As the changes were discussed, it would be seen what was, indicated by that statement. Mr. Diaz said that the changes were necessitated by the require- ments of the California Constitution which had a debt limitation provision with regard to financing for public entities. He said he had gone through the options to rescind which were adopted in the initial outline, and they were the same. The financial terms were essentially the same --they were categorized differently. For example, initial rent was $1 million due upon execution of the agreement. The $1 million as contemplated from the outset woold come from housing funds --$675,000 from Community Develop- ment Block Grant Funds, and the remainder from the Reserve for Special In -Lieu Housing. He said the base rent was 19 payments of $421,000, which was the same as the principal payment approved by the Council in the initial outline. In addition, there would be an additional rent component which was equal to 19 payments, equal to the remaining balance of principal payment times the School District's rate of return for the previous fiscal year. He said the maintenance and operation provisions were consistent with the approved Council outline. The School District would continue to maintain and be responsible for full operation of the building until June 30, 1982 or some earlier date if the City decided it was ready to commit to the entire agreement at an earlier time. The City would immediately, upon execution of the agreement, assume responsibility for landscaping and turf area maintenance thatwas also consistent with the outline approved by Council earlier. He said there was an attached budget amendment ordinance to reflect funds necessary for the remainder" of the fiscal year to assume the obligation. Some of the basic changes required by changing from a direct sale to . a lease purchase agreement were : rent abatement and rent continuation: insurance. In order for the agreement to be properly construed as, a lease and not a sale,_. agreement, there has to be some provision for a proportionate abatement- of rent should there be damage or. _de- struction to parts of the property, which was a significant con- cern for .the District in that, especially in the early years, they would count on .a significant payment due ahem„ from the ac- quisition. They.were concerned that a significant..loss'vf that income could have ? °=:severe adverse, effect on their budget. pro- cess.. Mr. Diaz said that an acceptable mechanism to handle" the situation was, for the '`City to provide rent continuation insur- ance. Basically, that was insurance that insured' the' income stream. Should the rent abatement provisions be required throughout the lease,: the insurance would step in ;and provide, the balance of the payments to the School District. He said it hadbeenagreed that 50% of any one year's rental payment was the maximum risk to the School District. If the City agreed to pay the premiums, staff estimates it would be about $1,600 in the first year. That was not a significant expense, however, insur- ance premiums would fluctuate from time to time. He said one of the ways in which it could be mitigated even further was to re- quire the same insurance provisions when negotiating the final lease agreement with the Jewish Community Center. It would not eliminate the rent continuation or insurance premiums, but would help the City. Councilmernber Fazzino said he thought the staff had done an excellent job, and everything being said was contained in the report. Mayor -Henderson said he. -also felt staff had done an excellent job, and that all of the tinformati on being presented was already contained in the- staff report. Mr.. Diaz said that the only other item Don Maynor had suggested staff cover was the non --use payment obligation. The State im- posed a tax on School Districts if they Aid not dispose of sur- plus property within a five-year period of time. He said that had been a concern of the District that it-, .:gay be' construed as not a sale and. not a proper disposition of surplus property, and they did not want to be obligated for such payments. Staff agreed not' to hold the School District liable for those payments, but the School District had agreed to assist the City in whatever was necessary to try and have it excluded or exempted from the provisions or to contest any adverse determination on the City's part. In essence, -:the rest of the agreement was consistent with what the Council had approved. Counci1nember Klein asked why staff was _so confident that the City would be able to avoid the tax levied on the School District for not disposing of .the property within five years? Mr. Diaz said he thought it was important not to mislead the Council. Staff indicated that they intended to do what they could to seek an exemption and to fight as hard as possible so that nothing would have to be' paid. It was very likely, espe- cially given State finances, that�the State would not give up anything they had. Staff would continue to fight it and do what they could to mitigate or eliminate those payments. Don Maynor said it was a 1i` tax on the original value, and it only applied, in the City's situation,----to the building itself. Mr. Diaz said it was hard to estimate scow the payment would be determined.`';:, He said they knew that., parts of the site would be exempt and .Staff' .estimated .that Alt could be between .. $15;000 and $20,000 the first year: -it world apply in {-1984-85:}.. It• could, be lower if the -State made the proper _ deterrinations, and itCo ld be zero if the Statet-agreedt to an exemption. He said title would transfer at---the:end of the agreement. Counci]member-:,Kle.in said. that - if .the City ran into trouble., -and i a source were "identified which;; was ..,earrparked for the acquisi ti on- of the site, then the City could go ahead and exercise its option to purchase. Mr. Diaz said that was correct. The agreement provided for an option to purchase the entire .site if the City could establish a reserve account with sufficient funds to cover . the remaining principal payment. r. Maynor, said that was subject to the approval consent of . the School District as well, that the City could not unilaterally exercise the option to purchase the whole thing. 1 :4 6-8 11/23/81 Councilmember Klein said he recalled the language stating that the School District could not unreasonably withhold the approval. Mr. Maynor said that was correct. Mr. Diaz said that the basic consideration the School District had was to have the same payment stream - coming to them, and acceptable language had been worked out for that. He did not think it would be a problem: Councilmember Levy asked if the $1.5,000 to $20,000 payment was per year, or just a One-time thing. Mr. Diaz said it was w s per year. Councilmember asked if it Levy- was likely to go up after. 1984-85? Mr. Diaz said there was an adjustment factor based on changes in assessed value, so it was likely to go up. Since Proposition 13, the rate of assessed value was held fairly low. Councilmember Levy said that as he -understood the costs involved, the action tonight Was to take, up an option, the cost of which would be essentially $50,000 until June 30, with an 'additional $20,000 for maintenance of the land. • He asked if that .was correct. Mr. Diaz said that was the extent of the Council's exposure by acting `on the. agreement._ If Council did not rescind its option on or before -June 30, 1982, they would_ incur the remaining costs as part of the agreement, Councilmember Levy asked about the probabilities of the $15,000 to $20,000 per year being levied against the City. He thought it sounded pretty high. Mr.. Diaz said he_.had no way of telling the probability of getting an exemption. He -had _no way of knowing what determination the State would give on how much would be. applicable and how much would not. They knew for sure that the Naylor Bill acreage would not be subject to the tax, -which was approximately 4.3 acres. The staff would argue for the entire open space as a minimum position, and ,argue -- to exempt the entire transaction from the payment. Councilmember Levy asked if the Council did not go through and exercise the option and :acquire the land, would the City be com- promising its rights under the Naylor Act to acquire a portion of the lands Mr. Diaz said no; and, in fact, there was specific wording that - indicated if the City Council rescinded, there was nothing to preclude them from further negotiations to acquire a portion of the site Councilmember Levy asked if the non-use payment applied only to the hui l d-i ng--thedeveloped portion of the site, Mr. Diaz responded that under the agreement, the City would have exercised, its option to purchase the houising part fairly early on --before the 1984-85 year; It would not apply to that.. It also did not apply to the Naylor Bill acreage. Staff felt that by extension of ;the argument, it would not apply to all of the property the City :intended- to use for park, -.recreation and open: space purposes, which , left approximately 7-9 acres devoted to building area Vice Mayor Fletcher said she felt the City was getting the short end of the stick, assuming the insurance costs, by taking on the property tax. The School District had a fail safe agreement and the .Cit'y was taking on added costs. She realized the School District needed a ulanimous vote on their part and to upset the agreement now would probably kill 'it. Mr. Diaz said it was also important to remember that under a direct sale agreement the costs would- not be incurred by. anyone. The School District's position was that they had bargained on a direct sale, and if the City could not do a direct sale .at this point, it was fair for the City to assume the relatively small costs. Mr. Maynor said there was one advantage to -the lease, that if damage was done to the property, the City had a. provision called "abatement," so to the extent the property was damaged and the City could not use it, the rental payments were abated, ;and the City would not have i.o pay them. If the City bought the prop- erty, At would have to make those payments regardless of whether there was damage done or not. The City did have a positive feature SO if there was damage to the property, it did not have to make those payments. To that extent he tought it was awash, the City was insuring the risk which now existed. The only additional thing he thought was different from the purchase itself was the tax. MOTION: Councilmember- Fazzino moved, seconded by Klein, to authorize the Mayor to execute the lease/purchase agreement to acquire control of,- and ultimate title to, the Terman school' site. LEASE - Palo Alto Unified School District ORDINANCE 3316 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL _YEAR 1981-82 TO PROVIDE FUNDING FOR LANDSCAPE AND GARDENING SERVICES AT -THE TERMAN SITE" ORDINANCE 3317 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR i981-82 TO ESTABLISH CAPITAL, IMPROVEMENT PROJECT NO. 81-92 'ACQUISITION_ OF TERMAN SCHOOL SITE' AND TO PROVIDE FUNDING FOR THE IN I T I,,AL PAYMENT OF THE TERMAN SCHOOL SITE" RESOLUTION 5974 entitled "RESOLUTION OF THE COUNCIL OF TiE CITY OF PALO ALTO DECLARING ITS INTENTION TO COMMIT FIFTY-ONE PERCENT OF THE HOUSING PARCEL OF THE TERMAN SCHOOL SITE TO DEVELOPMENT OF HOUSING FOR PERSONS OF. LOW AND MODERATE INCOME" MOTION PASSED unanimously. Mayor, Henderson asked if the School Board had, to take any further action. Mr. Diaz said that last Monday night the School Board, by a unanimous vote, adopted a resolution of intent to lease consis- tent with the terms of the agreement approved by the Council tonight. By law, they could not act on the agreement itself until after they had complied with the proper notice proceedings. It appeared that it would be on the Board's agenda for final action on or before January 5, 1982. Councilrnember Levy said that he could not participate in Item #12, Mortage Revenue Bond Program. MOTION Councilmember Levy moved, seconded by Fletcher, to bring forward Item #13, Appeal of Architectural' Review Board. decisions., 1 1 ahead of Item #12, Mortage Revenue Bond Program. MOTION PASSED unanimously. APPEALS OF ARCHITECTURAL REVIEW BOARD DECISIONS - ORDINANCE D i $ P.MC 16.4$ Vice Mayor Fletcher said that thestaff report made a very signi- ficant point --that the amendments which .the Council had .directed the City Attorney's office to draft, which would change the pro- cedure re Architectural Review Board (ARB) appeals from going directly to the Council to going to the Planning Commission, while broadening who shall review an appeal from an ARB decision, did not broaden what shall be considered in that review. S.he said that the ARB ordinance set forth standards for review all of which pertain to design. The same standards, and only those standards, should be applied by the Planning Commission and the City Council when they consider an appeal. She said that pointed out that design standards and only design standards were what the ARB . was charged with reviewing. She .intended to make a referral to the Policy and Procedures Committee that the Committee review what .the ARB parameters were, and determine if there was a threshold where a project should be referred to the Planning Com- mission and then to the Council. Bob Moss, 4010 Orme,.said he thought Vice Mayor Fletcher had hit the nail on the head in her observation of the way staff had. interpreted this. He said the basic problem had been that the ARB was not just looking at design, they had been looking at things like •locating traffic signals on adjacent streets, putting in traffic barriers as much as a half a mile away, . traffic circu- lation off the site, mitigated negative declarations of environ- mental impacts, etc. He said if one took the narrow 'interpreta- tion of what staff was saying, the ARB could then decide that something off the site was a design standard, and that then neither the Planning Commission nor the City Council could review it. he thought that was absurd. He thought that the staff recommendation . should be looked at in conjunction with the ini- tiative petition which was being circulated. He quoted, "in con- sidering an appeal, the Planning Commission shall include consi- deration of impact upon adjacent residential and commercial areas and neighborhoods, as well as upon the Comprehensive Plan of the City. In addition, the Commission shall make an effort to evalu- ate the effectiveness of the existing Comprehensive Plan in pre- venting serious impacts upon these areas and neighborhoods." The whole -purpose ,of the appeal was for the Planning Commission to look at the project and at the decision of the ARB "i n relation to the Comprehensive. Plan and to City policy --not- just the design, although the design would be one element. He said it was impor- tant to have that concept incorporated in any appeal. There were some other things in the initiative which were useful that he thought should be considered. One thing was that a time limit was set for the Planning Commission to act within 40 days, and second, during .the appeal proces-s, everything was held in abey- ance, It :d ti d not makesense to file an appeal and . have .,the Proj- ect go forward' during -the pendency of the appeal. Obviously, ,a ` c l ever r devel oper with a creative lawyer Could stretch the appeal process : until the project was well under °way and " it all became moot. Further,'; he sa d -there was a provision in the -initiative which = said that the Planning Commission may recommend that ' the City Council affirm, modify or alter in any way the action of the ARB which had .been -'appealed. The City Counc-1 , in : considering the-VPlanning''_Commission recommendation, shall take action at its discretion._, I,n: Ogler :.words, it did not have to be bound by des`i gn or whit:. the ARB detided. He felt that if the -Council was not -able to digest these, changes or add them to _ the: ordinance tonight,- then Vice' Mayor Fletcher':s proposal - to send the matter to the Policy and, .Procedures=-Committee far :refinement was a' good idea. 1 4 1 1 11/23/81 1 R. J. Debs, 3145 Flowers Lane, addressed himself to a letter he had received today from Assistant City Attorneys Sloan and Prendergast. He said it suggested an appeal be considered .by the Planning Commission and Council only as to design. He said that the ARB was designed and accepted by the Council to lighten the load of the Planning Commission for relatively trivial details, architectural details, but it was not designed to examine the long-range impacts of projects especially the larger ones .= He said that once in a while the ARB finds that it has approved a project whose ramifications impact both:: corhrnercial and/or resi- dential areas considerably. This was where the ARB exceeded its expertise. When this occurred, the Planning Commission must re- view it because it should be compared with what the Comprehensive Plan had suggested for the City, for the neighborhood, and for the commercial areas. He thought the ARB should make an effort to flag the possible problems for that area. Counci1member Witherspoon asked if Mr. Debs was concerned that the ARB was exceeding its authority or was he concerned that the Planning Commission did not review everything. She said the ARB was advisory to the staff and only came into play on its own when the developer had the zoning, etc. Mr. Debs said he was concerned that the ARB got into long-range planning without the background that the Planning Commission has. Councilmember Eyerly said he knew that Mr. Debs was at odds with the California Avenue/Park Boulevard development and asked what other developments the ARB had approved he had problems with. Mr. Debs said there was .something done on E1 Camino .that he thought the ARB handled. He said the Planning Commission had made certain recommendations and the ARB had changed those recom- mendations . He said it did not happen often. J , D. Sutor.i us, 2030 Waverl ey, Chairman of the Architectural Review Board, said the reason for his formally standing was to anz ounce his .availability for comments or questions by the Coun- cil. He thought that Vice Mayor Fletcher's recommendation for referral rather than action was prudent. He hoped that if the matter was referred, it was referred in a manner not too restric- tive as far as the things that could be looked at and considered. He thought that if there was a proposal to go through a formal ordinance process making a change, the changes ought to capture anything else that needed clarification and understanding. Councilmember Witherspoon said she gathered. the ARB h4J the right to send to the Planning Commission anything that seemed compli- cated or where they felt further advice was necessary. Mr. Sutorius .said there was nothing in the enabling ordinance that establ i shed the ARB that speci f icelly referred to that authority. He thought that lacking a specific statement about it, . the ARB could make that ` referral, but perhaps _ the applicant could challenge the ARB on its ability to -make that referral. City Attorney, Diane Lee said that under the 'present ordinance, there was no authority for a "referral" to the Planning Commis- sion. She said, even if there were that option, the ARB would not have to exercise it. The appeal ., procedure was one that allowed others to bring that before another body. Mayor Henderson said he was sure there . were probably mperfec- tions., in the ordinance, and thought the point. was to_ follow Vice Mayor Fletcher's suggestion and refer it to the Co ittee to look at the entire ordinance, When that was decided, then appeals could. be worried ,about, Vice Mayor Fletcher said. that the `issue of when there were matters larger than pure design, that. the ARB be given the au- thority to refer those projects to the Planning Commission for recommendation to tLe Council, was referred to the Policy and Procedures Committee.a few weeks ago, She wanted to broaden that assignment to encompass both the appeals procedure and the para- meters for review by the ARB.. MOTtON. Vice Mayor Fletcher moved, seconaed.by Levy, that the matter of appeals from the Architectural Review Board be referred to Policy and Procedures Committee and that the Committee also consider the charge to the ARB as it relates to issues larger than design, including E1R's. 1 MOTION PASSED by a vote of B-1, Witherspoon voting "no." Councilmember Levi left the meeting at 10:50 p.m. MORTGAGE REVENUE BONDS PROGRAM CMR:526:1) Councilmember Bechtel said she ;ryas `very_ excited about the pro- posal and strongly urged that Palo Alto participate in the pro- gram. She said there were "a number of reasons for. Palo Alto to participate, including the fact that this was a way of making home ownership available to those who would not qualify other- wise. There would be thirty year, fixed interest loans made available to first time home buyers. The units could not cost more than $110,000 nor could the home buyer's income be higher than 120% of County median income. The loans would be approxi- mately tvo to three points less than conventional market loans. Palo Alto could not do this type of bond issue alone, unlike other bond issues which had been done by the City, because econo- mies of scale --a fairly large bond issue of at •least a minimum $25 to $30 million, and because of the restrictive state and federal regulations. The total amount that was possible at this point for Palo Alto participation was in the range of $13.7 million, which was not enough for a viable bond issue. The proj- ect must be sufficiently far enough along and detailed in the bond perspectus, and the only e.rojects at that stage were those listed in the staff report. She said they were tax exempt mort- gage revenue bonds and ,rust adhere to the very strict state and. federal regulations that were recently passed. These would be the first such bond issues following these particular regula- tions. If the .regulations were violated, they would lose their tax exempt status which was why the bond committee had made very sure that a competent underwriter's team, as well as bond coun- sel, had been interviewed. She said it was a good way of involv- ing a variety of people --the developer's were involved, lenders, and °'government and private people. Councilmember Bechtel said that Palo. Alto made a very negligible financial commitment for participatioir in this program and ,if the issue :failed to sell then, : in the worst cases'the City might be out $12,000. She ,pointed -out that first -the Council must decade.. whether to _participate in the program, which she urged; and second, the Council needed to approve the proposals before them. She explained that the reason for the proposals was that devel- opers in. the. Palo Alto area had been invited to find out more about the program . if they were were interested. There were no fail' market projects under $.110,000 in Palo Alto currently, un- like' other cities with a Mortgage revenue bond program. There- fore, the - very few projects .: which were,: eligible were- 'the below -market -rate projects under the- sponsorshlpe:_of the Palo Alto Housing Corp -Oration, as well as the Palo Alto Housing Corpora t on projects at Birch and Grant which were hoped to' get off the ground in time to be part of the project. At- this point these were for single-family projects and it was hoped that there __would be further issuances, if. Possible, which would include multi- , family.: 1 MOTION: Councilmember Bechtel moved, seconded by Witherspoon, to approve staff recommendations that Coencil adopt: 1) Cooperative Agreement; 2) The three proposals_ to be included in the County- wide Mortgage Revenue Bond Program, a) Palo Alto Housing Corpora- tion 35 Below Market Rate Units, b) Palo Alto Housing Corpora- tion - Birch/Grant Project, c) Oak Creek Associates - Oak Creek Apartment Conversion; 3) Budget Ordinance, 4) that the City Mana- ger or his designated representative be authorized to make neces- sary adjustments to Below Market Rate unit prices COOPERATIVE AGREEMENT BETWEEN THE COUNTY OF ,SANTA CLARA AND THE CITY OF PALO ALTO FOR PARTICIPATION IN MORTGAGE REVENUE BOND PROGRAM County of Santa Clara ORDINANCE 3318 entitled "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1981-82 TO PROVIDE AN APPROPRIATION FOR THE ESTABLISHMENT OF CAPITAL IMPROVEMENT PROJECT NO. 81-30 'BMR HOUSING/MORTGAGE REVENUE BOND PROGRAM' AND TO APPROPRIATE SPECIAL IN LIEU HOUSING FUNDS" Vice Mayor'FleLcher said that to her Oak Creek was a multi -family project. Councilmember Bechtel said that condominiums were considered single-family under this bond issue. Councilmember Eyerly said he was pleased to see this come through, and he thought it looked like they had a good thing going. He was happy to hear that developers in the City had been asked if they desired to participate, but wondered if the City had done any actual advertising or whether it had just been phone calls, in view that there might beother people with ideas of how to use revenue bonds in the City who .were not now actively en- gaged. in development. Further, with regard to movement of the bond market, he wondered what input Palo Alto had with the under- writer and bond counsel as far as being a member of the Commit- tee, which he presumed advised them as to when the bands would go for sale. He wanted assurance that the City had input and that they were not free to sell them when they got ready, and that the market was properly scrutinized so that the City got the best price. He also asked what the long range plans were. Glenn Miller, City Planner, said the total issue was expected to be in the neighborhood of $60 to, $70 million, and could vary dependent upon a number of different decisions. Regarding the underwriters, they_„ would ' be making a recommendation as to the most opportune time to go to market, and the final decision would be made by the County Board of Supervisors upon a recommendation by the Bond Advisory Committee, of which Councilmember Bechtel\ was a member. He said the program was in reliance of the bond', market. Mr. Miller said that developers had not only been con- tacted by mail, but that advertisements in trade journals were ,Placed, and he thought a general advertisement in the San Jose Mercury had been made. Councilmember Eyerly asked if there was : long-range thinking on .. this. If the sale were successful, would: there be others? Mr. Miller said if it were successful, it was currently antici- pated that there would be further issues; however, there was a sunset provision in the law which would disallow any issues after December 31, ,1983 Mr:: - Hiller said it had to be approved by the cities involved, well as the County. 1 MOTION PASSED unanimously, Levy absent. MAYOR HENDERSON RE LYTTON GARDENS III GROUND BREAKING Mayor Henderson reported that the ground was officially broken for Lytton Gardens Phase III. MAYOR HENDERSON RE PALO ALTO ADOLESCENT SERVICES CORPORATION Mayor Henderson reported that there was a meeting of the Palo Alto Adolescent Services Corporation in which a check for $5,000 was given by the Peninsula. Foundation. Also, a second check for $5,000 was given by a particular donor to the Peninsula Foundation. ADJOURNMENT Meeting was adjourned at 11:05 p.m. ATTEST: APPROVED: f /7 Mayor