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Home My WebLink About2013-04-08 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL Special Meeting Council Chambers April 8, 2013 6:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 April 8, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. * The agenda now includes time estimates for each section or item. These are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. Call to Order Closed Session 6:00-6:30 P.M. Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. CONFERENCE WITH CITY ATTORNEY/LEGAL COUNSEL Potential Litigation Relating to Water Service Charges, Palo Alto Hills Golf Country and Club Section 54956.9(c) - Potential Initiation of Litigation - 1 Case Special Orders of the Day 6:30-6:50 P.M. 2. Resolution of the Council Expressing Appreciation to Steven A. Emslie Upon his Retirement Agenda Changes, Additions and Deletions HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. 2 April 8, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. City Manager Comments 6:50-7:00 P.M. Oral Communications 7:00-7:20 P.M. Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Minutes Approval 7:20-7:25 P.M. March 4, 2013 March 11, 2013 Consent Calendar 7:25-7:30 P.M. Items will be voted on in one motion unless removed from the calendar by two Council Members. 3. Recommendation that City Council Approve Amendment No. 1 to a Contract with BASE Energy, Inc. for the Administration of a Third-Party Non-Residential New Construction Efficiency Program 4. Approval of Record of Land Use Action Approving a Request for Extension of a 2010 Site and Design Review Approval to May 2014 for the Hotel Project at 1700 Embarcadero Road (Mings Site) 5. Submittal of Mitchell Park Library and Community Center Bi-Monthly Construction Contract Report 6. Approval of Amendment to the Agreement Between Moldaw Family Housing and City of Palo Alto for the Below Market Rate (BMR) Units at 899 Charleston Avenue to Restructure the Repayment Options 7. Letter of Agreement Between Palo Alto Art Center Foundation and City of Palo Alto Memorializing Ongoing Financial Support of Children's Programs at the Palo Alto Art Center 8. Approval of Letter to Association of Bay Area Governments (ABAG) to Transfer 200 Housing Units of Regional Housing Allocation (RHNA) from City of Palo Alto to Santa Clara County for the 2014-2022 Planning Period 9. Appointment of Sandra Hirsh, John Melton, Dena Mossar, James Schmidt, and Alice Smith to the Library Bond Oversight Committee for Five Terms Ending on May 31, 2017 3 April 8, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 10. Appointment of David Bower, Beth Bunnenberg, and Patricia DiCicco to the Historic Resources Board for Three Terms Ending on May 31, 2016 Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 7:30-8:15 P.M. 11. Public Hearing: Adoption of an Ordinance Amending the Zoning Map to Add the Ground Floor Combining District to the CD-C-P(and CD-S-P) Zoned Properties Fronting the 600 Block of Emerson Street 8:15-8:45 P.M. 12. Approval of Amendment Number 2 to Contract #C10131396 in the Amount of $1,173,000 with CDM Smith Inc. to Provide Additional Services Associated With the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation Project WS- 08002, for a Total Not to Exceed Amount of $6,300,802 (Continued From April 1, 2013) 8:45-9:15 P.M. 13. Approval of a Water Enterprise Fund Contract with RMC Water and Environment, Inc. for a Total Not to Exceed Amount of $193,914 to Complete the Environmental Analysis of Expanding the City's Recycled Water Delivery System (Continued From April 1, 2013) 9:15-10:00 P.M. 14. Colleague's Memo From Mayor Scharff and Council Members Burt, Price, and Schmid Regarding Expansion of Percent for Art and Public Art in Private Developments and Appropriate Maintenance of Our Existing and Future Public Art Collection 10:00-10:15 P.M. Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. PUBLIC COMMENT Members of the Public are entitled to directly address the City Council/Committee concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council/Committee on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council/Committee, but it is very helpful. 4 April 8, 2013 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Policy and Services Committee Meeting Regional Housing Mandate Committee Meeting Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Fourth Semi-Annual Long-term Electric Acquisition Plan (LEAP) Update Public Letters to Council Set 1 Set 2 RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIATION TO STEPHEN ANTHONY EMSLIE UPON HIS RETIREMENT WHEREAS, Steve Emslie served the residents of Palo Alto as Director of Planning & Community Environment from February 4, 2002 to April 30, 2008 and as Deputy City Manager from May 1, 2008 to March 1, 2013; and WHEREAS, prior to the City of Palo Alto, Steve served in planning positions for the cities of Martinez, Rolling Hills Estates, Saratoga, San Leandro, and San Jose; and WHEREAS, Steve provided leadership in the nonprofit community by serving as director on the Board of InnVision from 2002 to 2006, and currently serves as a director for the Palo Alto YMCA, including as the Y’s President from 2011 to 2012 and receiving the Red Triangle Award in 2012, and also currently serves as a director and president-elect for the Palo Alto Rotary Club; and WHEREAS, Steve directed significant community projects in Palo Alto, such as the Forest Area Coordinated Area Plan, implementation of the 1998 Comprehensive Plan’s Zoning Ordinance update, Campus for Jewish Life, Opportunity Center, Bridge Housing at 901 San Antonio, Eden Family Housing at 801 Alma, Tree House at 488 W. Charleston, update to the 2004 Housing Element, Town and Country Center Expansion and Revitalization, Charleston-Arastradero Road Corridor Plan, Alma Plaza, Development Center Blueprint Initiative, Infrastructure Blue Ribbon Commission, and High Speed Rail; and WHEREAS, Steve collaborated with Stanford University to complete the Stanford/Palo Alto playing fields Mayfield Development Agreement, Stanford University Medical Center Development Agreement and several developments at the Stanford Research Park; and WHEREAS, Steve partnered with the Palo Alto Unified School District to lead the Cubberley Community Center Task Force and as staff liaison to the City-School Liaison Committee; and WHEREAS, Steve performed all of the aforementioned tasks in an intelligent, diplomatic and professional fashion, always seeking census and ensuring the greater good was always at the forefront of each discussion. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Palo Alto hereby recognizes Stephen Anthony Emslie, a Palo Alto resident, father, husband, mentor and great guy for his 11 years of public service and contributions to the City of Palo Alto. INTRODUCED AND PASSED: ATTEST: APPROVED: ___________________ ______________________ City Clerk Mayor APPROVED AS TO FORM: ____________________ ______________________ City Attorney City Manager City of Palo Alto (ID # 3565) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/8/2013 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Amendment One to the BASE Contract Title: Recommendation that City Council Approve Amendment No. 1 to a Contract with BASE Energy, Inc. for the Administration of a Third -Party Non- Residential New Construction Efficiency Program From: City Manager Lead Department: Utilities Recommendation Approve and authorize the City Manager or his designee to execute the attached Amendment No. 1 to a contract with Base Energy, Inc. (Attachment A) in the amount of $158,610 for two additional years. The contract will be increased from a three year contract with an original cost of $201,390 to a five year contract with a total cost of $360,000. The increase is necessary to complete a very large new construction project with significant energy savings potential. Executive Summary The City Council approved updated energy efficiency goals for the next 10 years (approved December 17, 2012 #3358). The City of Palo Alto Utilities department has a variety of efficiency programs designed to assist all customers in different types of situations. The most cost- effective time to make significant energy saving improvements to a facility is at the point of new construction or major retrofit; new construction programs for residents and for businesses were developed in 2011. The Business New Construction program administered by BASE (BASE) Energy, Inc. was developed to assist developers and architects to design and build the most efficient structures for commercial and industrial customers in Palo Alto. The contract originally approved on May 16, 2011 and executed on July 1, 2011 (#1538) had a limited budget and timeline, as the economy at that point in time was very slow, and the new business construction program was stagnant. City of Palo Alto Page 2 In addition to working with a number of businesses to provide energy efficiency results, BASE has been working with one large non-residential customer in town during the design of a new facility. Significant potential for energy savings has been found. However, that construction will exceed both the timeline and the budget for the current program. In order to complete this project and to continue to provide new construction service for businesses, Council is requested to approve and authorize the Amendment to the contract to increase both its time period from three to five years and its overall cost from $201,390 to $360,000. Background BASE delivers energy efficiency advice and recommendations to businesses completing a new construction or major retrofit in Palo Alto. The original contract was approved by Council on May 16, 2011 (#1530) and executed on July 1, 2011 for a period of three years. The contractor has been providing a new construction rebate and customer recommendation service for business customers since that time. Discussion Project Description BASE delivers energy efficiency advice and recommendations to businesses completing a new construction or major retrofit in Palo Alto. BASE completes a detailed engineering and economic feasibility study, describing the operation of design systems and equipment, along with the energy and water used by these systems. The study includes recommendations for alternative systems and equipment, including estimates of expected energy use and related savings, along with the incremental cost of these installations and the rebates to be provided by the utility. Once the construction project is completed, BASE verifies that the energy saving systems and equipment were installed. The customer is then paid incentives by the utility for the energy savings, while BASE receives an incentive for finding the savings and assisting the customer with the installation. Scope of Work and Timeline of the Proposed Contract The program originally began in July 2011 and was scheduled to end in December 2013. One very large construction project with significant energy savings potential was identified in 2012. In order for both the customer and BASE to complete the installation and verification of the efficient construction completion, the contract needs to be extended through the end of July 2016. In addition, to allow for BASE to be paid the contracted levels of payment for finding these savings, the contract needs to be Amended to increase the total authorized amount. City of Palo Alto Page 3 Extending the contract for an additional two years allows the completion of this particular customer efficiency project. Adding funds to the contract allows the contractor to be paid on a per kilowatt hour (kWh) and therm basis for the energy savings found in the project. Finally, enhancing the length and scope of the program will allow additional new construction projects to be assisted with efficient measure installation and for the contractor to be paid for this assistance. . Resource Impacts Funds for this program are included in the FY 2013 Demand Side Management budgets in the electric and natural gas operating funds. There are adequate funds in the FY 2014 and FY 2015 projected budgets to pay for the extension of the work in this contract. Policy Impacts The recommendation is consistent with Council policy and supports the electric and natural gas efficiency goals approved by City Council in December 2012. Environmental Review Authorization of the Amendment to the contract with BASE Engineering, Inc. does not meet the definition of a project pursuant to Section 21065 of the California Environmental Quality Act (CEQA), thus, no environmental review is required. Attachments:  Attachment A: BASE Amendment No 1 (PDF)  Attachment B: BASE Contract C11141002 (PDF) AMENDMENT ONE TO CONTRACT NO. C11141002 BETWEEN THE CITY OF PALO ALTO AND BASE ENERGY, INC. This Amendment No. One to Contract No. C11141002 (“Contract”) is entered into _______________, 2013, by and between the CITY OF PALO ALTO, a charter city and a municipal corporation of the State of California (“CITY”), and BASE ENERGY, INC., a California Corporation, located at Five Third Street, Suite 630, San Francisco, CA 94103 (“CONSULTANT”). R E C I T A L S: WHEREAS, The Contract was entered into between parties for the provision of third-party delivery of a business new construction program; and WHEREAS, the parties wish to amend the Contract; NOW, THEREFORE, in consideration of the covenants, terms, conditions and provisions of this Amendment, the parties agree: SECTION 1. Section 2. TERM is hereby amended to read as follows: “The term of this Agreement shall be from the date of its full execution through completion of the services in accordance with the Schedule of Performance attached as Exhibit ‘B’ unless terminated earlier pursuant to Section 19 of Agreement.” SECTION 2. Section 4. NOT TO EXCEED COMPENSATION is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit ‘A,’ including both payment for professional services and reimbursable expenses, shall not exceed Three Hundred Sixty Thousand Dollars ($360,000) for a potential five years.” SECTION 3. The following exhibit(s) to the Contract are hereby amended to read as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference: a. Exhibit “A” entitled “SCOPE OF SERVICES.” b. Exhibit “B” entitled “PROJECT SCHEDULE.” c. Exhibit “C” entitled “COMPENSATION.” SECTION 4. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written . APPROVED: BASE ENERGY, INC . City Manager ~~i' Name: By: Title: ___ DI-( ~r_L "---'n'-"'C.....,i--~tf"-'cJ"""-'=--- APPROVED AS TO FORM: Senior Asst. City Attorney Attachments : EXHIBIT "A": EXHIBIT "B": EXHIBIT "C": SCOPE OF SERVICES PROJECT SCHEDULE COMPENSATION EXHIBIT A: SCOPE OF SERVICES This document provides a proposal for a contract modification to Base Energy, Inc.’s (“BASE”) Business New Construction Program (BNC), Contract No. C11141002. The main intent of this proposal is to extend BASE’s program for an additional two year and provide funding for this extension to complete a large efficiency project at a major industrial customer in Palo Alto as well as to assist additional industrial and commercial projects that may be completed during this time frame. This will include modifications in the following items from Contract No. C11141002:  Increase the scope of work’s project energy savings from 2,436,669 kWh and 14,665 therms to 5,437,900 kWh and 89,496 therms over the life of the program.  Increase the not-to-exceed BASE amount from $201,391 to $360,000.  Increase the contract term from three to five years.  An alteration in performance payment in that 25% of the performance payment estimated in the customer’s “Detailed BNC Report” be paid at the time that the report is presented to the customer and the customer signs an agreement to complete the work.  An alteration in performance payment with the understanding that if a customer completes an approved project after the completion of the contract, that BASE be compensated for 75% of the performance payment estimated in the “Detailed BNC Report.” EXHIBIT B: PROJECT SCHEDULE Program work plan and timeline will continue as in Contract No. C11141002 with the understanding that the program will be continued until June 30, 2016 (an extension of two years), primarily to allow the completion of one large efficiency project. However, during that time other projects, scheduled to complete prior to June 30, 2016, may be completed in accordance with the scope of work and project schedule from the contract. EXHIBIT C: Compensation Table 1 below provides a cost proposal for the expansion of BASE’s BNC Program through the end of FY 2016 on June 30, 2016. The proposal includes costs for increasing the program length and continuing to deliver the services over the increased term. Table 1 Cost proposal for Extension of BNC through June 30, 2016 Item Amount Payment for identified savings to date, excluding large project $ 45,000 Incentive payment for large project $200,000 Payment for future savings $ 45,000 Time and Materials for Administration and Marketing $ 70,000 Total Payment for Contract Period $360,000 Compensation to be further amended as follows:  An alteration in performance payment in that 25% of the performance payment estimated in the customer’s “Detailed BNC Report” be paid at the time that the report is presented to the customer and the customer signs an agreement to complete the work.  An alteration in performance payment with the understanding that if a customer completes an approved project after the completion of the contract, that BASE be compensated for 75% of the performance payment estimated in the “Detailed BNC Report.” CITY OF PALO ALTO CONTRACT NO. CI1141002 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BASE ENGINEERING, INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this I st day of July 2011, ("Agreement") by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY'~, and BASE ENERGY, INC., a California corporation, located at 5 Third Street, Suite 630, San Francisco, CA 94103 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to provide third-party energy efficiency programs ("Project") and desires to engage a consultant to administer, manage and deliver a third-party non-residential new construction energy efficiency program in connection with the Project ("Services"). B. CONSULT ANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses andlor certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULT ANT to provide the Services as more fully described in Exhibit "A", attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perfornl the Services described in Exhibit "A" in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through completion of the services in accordance with the Schedule of Performance attached as Exhibit "B" unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit "B", attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY's agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. Professional Services Rev. June 2, 2010 SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit "A", including both payment for professional services and reimbursable expenses, shall not exceed Sixty Seven Thousand One Hundred Dollars per year ($67,130 / year) for a not-to-exceed amount of $20 1 ,390 for three years. The applicable rates and schedule of payment are set out in Exhibit "C", entitled "COMPENSATION," which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit "C". CONSULT ANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit "A". SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT's billing rates (set forth in Exhibit "C"). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT's payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City's project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. OUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or nuder CONSULTANT's supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever natnre that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSUL TANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLICIT ATIONS\CURRENT BUYER-eM FOLDERS\UTlLlTIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.ll\2, BASE\Cll141002.doc omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY's stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional ~ost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT's obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Ahmad Ganji as the Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval ofthe CITY's project manager. CONSULTANT, at CITY's request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. The City's project manager is Joyce Kinnear, Utilities Department, Marketing Services Division, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650)329-2652. The project manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSIDP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, Professional Services Rev. June 2, 2010 \\Cc-terra\Shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.l1\2. BASE\CI1 141002.doc other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT's records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indemnified Party") from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements ("Claims") resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party .. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT's services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance orlaw, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. Professional Services Rev. June 2, 2010 \\Cc-terra\Shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.l1\2. BASE\C 11141 002.doc 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best's Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subjectto the approval of CITY's Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification, CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY's Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereofto CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLlCITATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\13861I Third Party Energy\FINAL.CONTRACTS.l1\2, BASE\CI 1 141002.doc or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT's services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise ofhislher discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4,20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Govermnent Code of the State of California. 21.3. Ifthe Project Manager determines that CONSULTANT is a "Consultant" as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLICITATlONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.l1\2. BASE\C11141002.doc Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REOUIREMENTS. CONSULTANT shall comply with the City's Environmentally Preferred Purchasing policies which are available at the City's Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City's Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of30% or greater post-consumer content paper, unless otherwise approved by the City's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City's Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verifY that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fis9al year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the Professional Services Rev. June 2, 2010 \\Cc~terra\Shared\ASD\PURCH\SOLlClTATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROLYNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.ll\2. BASE\C11141002.doc parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions ofthis Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules 'that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and· any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant ·to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section l798.81.5(d) about a California resident ("Personal Information"), CONSULTANT shall maintain reasonable and appropriate security procedures to protect thai Personal Information, and shall inform City innnediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personallnforrnation for direct marketing purposes without City's express written consent. 25.9 The individuals executing this Agreement represent and warrant that they have the legal capacity and anthority to do so on behalf oftheir respective legal entities . . IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO BASE ENERGY, INC. :~.Zft~· City Manager APPROVED AS TO FORM: Title: fr'b n () '.p " e Senior Asst. City Attorney Attachments: EXHIBIT "A": EXHIBIT "B": EXHIBIT "C": EXHIBIT "D": SCOPE OF WORK SCHEDULE OF PERFORMANCE COMPENSATION INSURANCE REQUIREMENTS .. ;. Professional Services Rev. June 2, 20lO \\Cc-tcrra\Shued,\ASO\PURCH\SOLI(;IT ATIONS\CURRENT BUYER-CM FOLDERS\UTILITIES ~ CAROL YNN\RFPs\13B611 Third Party Energy\FTNAL.CONTRACTS.1I\2. BASE\K.CI"I141002.BASE.doc EXHIBIT "A" SCOPE OF SERVICES Consultant shall deliver energy efficiency program to non-residential customers served by the City of Palo Alto Utilities (CPAU) Department. Scope of Work -Task Description To successfully complete this project, BASE proposes dividing the work into the following tasks and sUb-tasks: Task 1 Program Marketing 1.1 Customer Recruitment 1.2 Project Development Task 2 Program Implementation 2.1 Project Feasibility Study 2.2 Process Program Application 2.3 Technical Assistance 2.4 Project Implementation Verification 2.5 Conflict Resolution Task 3 Program Administration 3.1 Meetings and Communications with City of Palo Alto 3.2 Program Set-Up 3.3 Progress Reporting 3.4 Invoicing 3.5 Develop Program Documentation 3.6 Program Closure A description of the tasks and sub-tasks follows. Task 1: Program Marketing The initial marketing objectives will include promoting program awareness and recruiting customers into the program. As the program progresses, the marketing objectives will slightly shift towards maximizing the number of identified projects that get implemented. To successfully complete this task, work will be subdivided into the following subtasks: Sub-Task 1.1: Customer Recruitment Various program marketing materials will be developed and/or purchased to help promote program awareness and recruit customers. Initial marketing materials that will be developed include: marketing plan, program website, brochure, case studies, and presentations. These materials will be disseminated by attending workshops, . organizing informational workshops, mail-ins, and through the program website. Initial program marketing activities will be targeted to: o Architects and Design Engineers: In conjunction with the City of Palo Alto, BASE will organize workshops targeted to architects and design engineers to promote the program and explain how we can collaborate to better serve the customer. Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.l1\2, BASE\C11141002.doc o City of Palo Alto Personnel: In conjunction with the City of Palo Alto BASE will organize workshops targeted to the City's Permitting Department to promote the program and explore ways in which the program can be incorporated (on a voluntary basis) into the new business permitting process. o City of Palo Alto Utility Customers: Existing City of Palo Alto Utility customers will be contacted directly or through their Utility Account Representatives to ensure that customers seeking to construct new buildings/facilities or those who seek to expand existing system capacity can do so in an energy, water, and cost efficient manner. Deliverables: Marketing Plan, Marketing Materials and Program Training Workshops Timeline: Ongoing throughout the program life Sub-Task 1.2: Project Development Potential program customers will be pre-screened through a short phone interview to ensure that the customer is seeking help under the correct energy efficiency program. If our program is not right for the customer, BASE staff will redirect the customer to other City of Palo Alto program that could best serve their needs. After completing the phone interview, BASE will schedule a project kick off meeting with the customer (owner and/or design engineer) to: 1) explain the program partiCipation process and 2) collect needed information to identify the potential energy and water efficiency opportunities. Once the information is collected and analyzed, BASE staff will develop a Technical Memorandum identifying the potential energy and water efficiency opportunities and provide the customer/designer with preliminary water, energy, demand, and cost savings as well as expected incentive amount. The Technical Memorandum will be presented and discussed with the customer. Deliverable: Customer Technical Memorandum Timeline: One week after all needed customer information is collected Program Implementation After reviewing the Technical Memorandum the customer will decide on the energy and water efficiency opportunities to implement. The selected measures will become the basis for developing and processing the Program Application. To successfully complete this task, work will be subdivided into the following sub-tasks: Sub-Task 1.3: Project Feasibility Study A detailed engineering and economic feasibility study will be developed for the customer. The study will describe operation of the designed systems and equipment considered, establish energy and water consumption baselines, estimate the proposed energy and water consumption and energy and water savings, estimate the expected . incremental measure cost, and estimate the potential financial incentive for implementing the recommended upgrades. The feasibility study will help the customer to further assess the economics of the proposed projects and at the same time serve as a basis to more accurately document projected savings. Professional Services Rev. June 2, 2010 \\Cc-terra\Shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.ll\2. BASE\CI1141002.doc Deliverable: Comprehensive Energy and Water Efficiency Feasibility Study Timeline: One month after all needed customer information is collected Sub-Task 1.4: Process Program Application Along with the Project Feasibility Study BASE staff will prepare a Signature-ready Program Application. The Program Application will commit BASE to reserve the estimated incentive amount and commit the customer to implement the selected projects. Deliverable: Signature-Ready Program Application Timeline: Program Application will be delivered to the customer in conjunction with the Project Feasibility Study Sub-Task 1.5: Technical Assistance While the customer moves forward with the project BASE staff will assist the customer with any technical questions regarding the recommended projects. BASE staff will work with the customer's system designers, contractors, and/or equipment vendors to ensure installed projects operate as intended. / Sub-Task 1.6: Project Implementation Verification After proposed projects are implemented and operational the customer will notify BASE of project completion. BASE will schedule a site visit with the customer to inspect the installed project. BASE staff will notify the customer of any deficiencies in implementation and recommended modifications (if needed). Once the implementation verification is approved, BASE will develop a Verification Report to document installed energy saVings. Deliverable: Verification Report Timeline: One week after completing a successful verification inspection Sub-Task 1.7: Conflict Resolution BASE recognizes that specific issues may arise from time to time. BASE will develop procedures for dealing with potential conflicts between BASE-Customer. In addition to developing procedures, BASE will record any outstanding issues and methods of resolution in a Conflict Resolution Log and submitted to the City Program Manager in a quarterly basis. Deliverables: Conflict Resolution Procedures and Log Timeline: Ongoing throughout the program life Task 2: Program Administration Program administration tasks include all activates related to setting up the program, processing incentives, and satisfying reporting requirements and procedures set by the City. To successfully meet City needs, program administration will be divided into the following sub-tasks: Sub-Task 2.1: Meetings and Communications with City of Palo Alto Professional Services Rev. June 2, 2010 \\Cc-terra\Shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.ll\2, BASE\CI 1 141002.doc A successful energy efficiency program implementation requires close collaboration between the program sponsor (City of Palo Alto Utilities) and program administrator (BASE). Most communication will be done through email or phone conversations, with in-person meetings scheduled on an as needed basis. Sub-Task 2.2: Program Set-Up In this task, BASE staff will attend meetings with the City for further training, familiarity with the City of Palo Alto Utility Organization, and develop all the necessary program documents such as: Program and Procedures Manual, Quality Control Plan, Conflict Resolution Plan, Invoicing Template, and Program Forms. Deliverables: Program Documents Timeline: 1 months after contract is awarded Progress Reporting BASE staff will develop monthly, quarterly, and annual reporting templates that satisfy City of Palo Alto reporting requirements. These reports will be developed and submitted within the timeframe specified by the City of PaloAlto. Deliverables: Monthly, Quarterly, and Annual Progress Reports Timeline: Ongoing through out the program life Sub-Task 2.3: Invoicing BASE will submit a monthly invoice to the City of Palo Alto for program accomplishments and installations performed in the preceding calendar month. Monthly invoices. and supporting documents will be submitted on a schedule specified by the City of Palo Alto. All submissions will adhere to City requirements. Deliverable: Monthly Invoice Timeline: Ongoing through out the program life Sub-Task 2.4: Develop Program Documentation On an as needed basis, BASE staff will develop new program documentation or modify existing program documents to ensure that documents are up to date with new program developments. New program documents may include: new program forms, expanding the portfolio of energy efficiency projects considered under the program, etc. Deliverables: Program Document Updates and/or New Program Documents Timeline: Ongoing throughout the program life (on an as needed basis) Sub-Task 2.5: Program Closure Program activities will start ramping down by October 2013, to ensure all customers can be fully served by the end of the program cycle (December 31, 2013). Prior to the ramp down date, BASE staff will ensure that all services are complete, projects and measures are installed, and all incentives are processed by BASE staff to assure that they can be paid by December 31, 2013. Program closure announcements will be made to the City and posted on the program website to alert program customers. Rev. June 2, 2010 \\Cc-terra\shared\A$D\PURCIDSOLICITATIONS\CURRENT BUYER-eM FOLDERS\UTILlTIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.l1\2. BASE\Cl1141002.doc EXHIBIT "B" SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Task 1 Program Marketing 1.1 Customer Recruitment Ongoing throughout the program life 1.2 Project Development Ongoing throughout the program life 1.3 Project Feasibility Study After interested customer located 1.4 Process Program Application After customer approves study 1.5 Technical Assistance After customer approves study 1.6 Implementation Verification After project completed 1.7 Conflict Resolution Ongoing throughout the program life Task 2 Program Administration 2.1 Meetings and Communication At least monthly 2.2 Program Set-Up One month after contract award 2.3 Progress Reporting Monthly 2.4 Invoicing Monthly 2.5 Program Documentation Monthly 2.6 Program Closure 2Q 2014 Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURcmSOLICITATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.ll\2. BASE\C 11141 002.doc EXHIBIT "D" INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE 'EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITHAM BEST'S KEY RA TINGOF A-,VII, OR IDGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. A WARD IS CONTINGENT ON COMPLIANCE WITB CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW, MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT EACH YES YES YES YES YES OCCURRENCE AGGREGATE WORKER'S COMPENSATION STATUTORY EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 $1,000,000 LIABILITY COMBINED, BODILY INJURY $1,000,000 $1,000,000 -EACH PERSON $1,000,000 $1,000,000 -EACH OCCURRENCE $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED PROPERTY DAMAGE $1,000,000 $1,000,000 BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED, CONTRACTOR, ATITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIIIED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSUREDS" A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS, B. CROSS LIABILITY Professional Services Rev June 2, 2010 \\Cc~terra\shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FINAL.CONTRACTS.l1 \2. BASE\CI1141 D02.doc THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION I. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THENON-PA YMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (lO)DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALOALTO,CA 94303 Professional Services Rev June 2, 2010 \\Cc-terra\Shared\ASD\PURcmSOLICITA TIONS\CURRENT BUYER-eM FOLDERS\UTILITIES -CAROL YNN\RFPs\138611 Third Party Energy\FlNAL.CONTRACTS.ll\2, BASE\C11141002.doc City of Palo Alto (ID # 3499) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: Mings Site and Design Permit Extension Title: Approval of Record of Land Use Action Approving a Request for Extension of a 2010 Site and Design Review Approval to May 2014 for the Hotel Project at 1700 Embarcadero Road (Mings Site) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve the Draft Record of Land Use Action (RLUA, Attachment A) approving a one-year, final extension of Council’s April 12, 2010 Site and Design Review approval for the Ming’s hotel project located at 1700 Embarcadero Road. Background On November 4, 2009, in response to a recessionary based decline in development activity, Council adopted an ordinance (Ordinance 5061, Attachment F) allowing extensions of permits approved before June 10, 2010. Council’s adopted Extensions table is below on this page, with table footnotes following: City of Palo Alto Page 2 Time Extensions for Valid Planning Entitlements Effective November 4, 2009 Table 1 (Revised per COUNCIL action) Time Extension – Permit Life Permit Type Current Code Requirements Ordinance Initial Permit Life Allowed Extension(s)2 Automatic Extension Additional Maximum Extension2 Permit Life 3 ARB, DEE, CUP, VAR, IR, HIE, NPE (no automatic for historic incl. potentially eligible) 1 year 1 year 1 year after allowed extension 1-year extensions by Director with findings GREEN BUILDING Up to 4 years unless associated with a Vesting Tentative Map Site and Design Review (not automatic for historic) 2 years unless associated with a Vesting Tentative Map 0 1 year after allowed extension One extension by Council after PTC - one additional year GREEN BUILDING Up to 4 years unless associated with a Vesting Tentative Map Planned Community (not automatic for historic) Per development schedule 1 year 1 year after allowed extension One extension by Council after PTC - one additional year GREEN BUILDING Up to 3 years + timeline in development schedule 1. The ordinance applies to column one permit types valid from ordinance adoption through June 30, 2010. 2. Project applicants must apply for any extension (except automatic) prior to the permit expiration date. 3. Maximum permit life may be acquired through a combination of initial permit life, allowed extensions, additional extensions and automatic extension. The proposed project received three discretionary permits: a variance allowing the building to vary from “build to” lines; a rezoning from Planned Community (PC) to Commercial Service with Design Review Combining District (CS(D)) by Ordinance and Site and Design review approval. In 2012, staff extended the project’s Variance approval allowing the building to vary from “build- to” lines. Council’s rezoning decision does not require an extension because it is not a PC. The Applicant is requesting an extension of its Site and Design Review Approval which was granted on April 12, 2010. Under Ordinance 5061, Site and Design Review Approval Extensions must be recommended by the PTC prior to Council approval. Council’s approval of the extension would result in a total permit life of four years, with commencement of construction by April 2014. City of Palo Alto Page 3 Existing Site and Context The project site is located at the intersection of Embarcadero Road and East Bayshore Road. The project site is approximately 2.5 acres and contains a single 15,180 square foot restaurant occupied by Ming's Chinese Cuisine & Bar with associated parking and landscaping. Most of the existing site is paved or occupied by the 25 trees on the site. The site is surrounded by office properties on all sides and across Embarcadero Road and East Bayshore Road. All surrounding properties are zoned ROLM(E)(D)(AD), except for one adjacent Planned Community (PC) zoned property to the east. The Comprehensive Plan designation for the site is Service Commercial. The project site was rezoned to Commercial Service (CS)(D) by Council in April 2010. It had been rezoned previously from LM(D) to Planned Community (PC Ordinance 2378) in 1967 and revised by resolution number 2491 in 1969. Project Description The existing Ming’s building will be demolished and replaced with a four story building containing 117,814 square feet containing 147 guest rooms, a restaurant of approximately 5,602 square feet, a small amount of retail (87 square feet), a small gym (541 square feet), one level of underground parking, and a new surface parking lot and landscaping. The maximum height of the building is 50 feet. The building form steps up and back from the corner of Embarcadero Road and East Bayshore Road. Facilities for 166 parking spaces include 90 spaces in one level underground and 76 surface parking spaces, located in front of and around the sides of the building. The hotel main entrance is accessed via East Bayshore Road and features a cantilevered porte-cochere. Visitors can also take a left when entering the site, to park in front of the restaurant entrance located closer to the intersection of Embarcadero Road and East Bayshore Road. This building corner will open into the central pool courtyard as the building height steps up and back. Garden terraces would be located above the second and third floors. Plan sets are provided to Councilmembers only. Summary of Land Use Action: In order to grant such an extension, the City Council must find that the project would not adversely affect public health or safety and would not substantially conflict with any applicable Zoning Code or Comprehensive changes that have been adopted by the City Council since the original application was deemed complete, and may otherwise adjust project conditions to address minor changes. These findings can be made as there have been no substantive zoning changes in this area. The applicant intends to move forward with hotel construction prior to the 2014 expiration of the extended Site and Design Review approval. City of Palo Alto Page 4 Planning and Transportation Commission Review On March 5, 2013, the Planning and Transportation Commission unanimously (on a 7-0 vote) recommended that Council extend its Site and Design Review Approval one additional year. Meeting minutes are provided as Attachment B to this report. Policy Implications This is the only request that has been received, pursuant to Ordinance 5061, for extension of a Council Site and Design Review Approval and the only extension request that has required PTC and Council review and action. Other extensions of Director’s decisions have been approved at the Director’s level and have not required PTC review and Council action. Comprehensive Plan The new hotel and restaurant will support the Comprehensive Plan goals, which encourage private property owners to upgrade commercial properties in ways that will support the City’s economic base. The 2010 Council report cited Palo Alto Comprehensive Plan Program Goals L- 71 (strengthen identity of important gateways) and Program T-57 (bike path and planting next to Embarcadero), and the 2010 RLUA also cited Goal L-1, Policy L-9, Policy T-1, Policy T-23, Policy B-2 and Goal B-3. Resource Impact The applicant will be required to pay development impact fees and other fees in place at the time of building permit issuance. This action does not result in payment of such fees at 2010 levels. The project will yield the City additional net annual revenues in the form of property taxes, sales taxes, utility user taxes, and transient occupancy taxes, estimated in 2010 in the $570,000 to $697,000 range. One-time revenues would include (2010 estimated) impact fees of approximately $2,204,000. On the expenditure side, the project’s additional hotel patrons will create additional demand for City services, but these will be offset by the developer impact fees and transient occupancy taxes mentioned above. Timeline The applicant notes that investors are poised to begin the project in 2013 and only needed to have the assurance of the extension to move forward. City of Palo Alto Page 5 Environmental Review A Negative Declaration for this project was adopted by the Council on April 12, 2010. Courtesy Copies Stoecker and Northway Architects Vicky and Wu-Chung Hsiang Attachments:  Attachment A: 1700 Embarcadero Road Record of Land Use Action (DOC)  Attachment B: Planning and Transportation Commission Excerpt Minutes, March 5, 2013 (PDF) 1 ATTACHMENT A DRAFT APPROVAL NO. 2013-____ RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE APPROVAL FOR 1700 EMBARCADERO ROAD: FILE 13PLN-00016, EXTENSION OF COUNCIL APPROVAL OF SITE AND DESIGN REVIEW (Extension of Site and Design Review Component of FILE 09PLN-00175) (Stoecker & Northway Architect, Inc, APPLICANT) On April 8, 2013, the Council approved the requested Extension of its Site and Design Review Approval for a new four- story hotel and restaurant, making the following findings, determination and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On November 12, 2010, City Council approved the Site and Design Review and Variance applications submitted July 29, 2009, by Stoecker & Northway Architects, Inc., on behalf of Wu- chung Hsiang & Vicky Ching, for construction of a four-story hotel and restaurant with one level of underground parking and associated surface parking and landscaping (“The Project”) (Exhibit 1, Record of Land Use Action 2010-02). A request for extension was filed January 14, 2013, to extend the Site and Design Review Approval for an additional, final year, in accordance with Ordinance 5061. B. The Request for Extension of the Variance to “build- to” requirements has been granted in accordance with Ordinance 5061. C. The Planning and Transportation Commission reviewed the extension request on March 5, 2013, and recommended approval of the extension. SECTION 2. Environmental Review. The project was subject to environmental review under provisions of the California Environmental Quality Act (CEQA). An Initial Study was completed, a Draft Negative Declaration was prepared and circulated for this project in accordance with the CEQA requirements, and a Notice of Determination was filed at the County of Santa Clara following Council action on the project applications. Topics discussed in the review included aesthetics, air quality, noise, and traffic, and expected impacts were noted as less than significant with implementation of standard conditions of approval and state and local requirements. 2 SECTION 3. Site and Design Review Findings The following Site and Design Approval Findings were adopted by Council for the prior approval of this project: 1. To ensure construction and operation of the use in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites. The project is designed for a hotel and related uses and incorporates a site layout that is comparable to the existing building and compatible with surrounding uses. Specifically, the hotel would be located on Embarcadero Road, adjacent to office and automobile sales facilities and the proposed building is situated on the site in a similar manner. City standards and regulations will help to ensure that the use, or operation, of the site would be conducted in a manner that is compatible with the existing uses located in the immediate area. During construction, it is expected that there would be temporary impacts to the area in terms of construction-related noise, dust/debris and traffic. These impacts would be addressed by applicable City construction standards, such as restrictions on hours of construction, the City’s noise ordinance, and the mitigation measures found in the draft Negative Declaration. 2. To ensure the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas. This site is designated for Service Commercial land use in the Comprehensive Plan, and is proposed to be rezoned to the Service Commercial zone district. It is surrounded by one and two- story office buildings. The replacement of an existing single story restaurant building with a new four story hotel and restaurant should not reduce the overall functionality of the immediate area. Hotel and restaurant uses are expressly permitted in the Palo Alto Municipal Code and are consistent with the Comprehensive Plan land use designation and help to support employment uses and revenue generation in the City. The proposed hotel location also provides easy access from State Highway 101. 3. To ensure that sound principles of environmental design and ecological balance shall be observed. The project would replace a disturbed area on the site, which is currently developed with a restaurant and surface parking lot areas. The project would increase the number of trees on the site and provide for enhanced landscaping and open space and comply with the requirements in the Baylands Master Plan for compatibility with the Palo Alto Baylands. Green building features would be incorporated to achieve LEED Silver compliance. This application was subject to an environmental impact assessment (EIA), and it was 3 determined that, as detailed in the Negative Declaration, there will be no significant environmental impacts associated with the proposed development. 4. To ensure that the use will be in accord with the Palo Alto Comprehensive Plan. The Comprehensive Plan designation is Service Commercial per the Palo Alto 1998 - 2010 Comprehensive Plan. The proposed project for rezoning from Planned Community to Service Commercial, and construction of a new hotel and restaurant is consistent with the land use designation. The project is also consistent with The Palo Alto Comprehensive Plan policies related to business and economics. The Comprehensive Plan encourages owners to upgrade or replace existing commercial properties so that these commercial areas are more competitive and better serve the community. The commercial properties could be redesigned to be more attractive and inviting for pedestrians. The applicable Comprehensive Plan policies are incorporated into the Draft Record of Land Use Action. SECTION 4. Site and Design Approval Granted. Site and Design Approval is granted for the project by the City Council under Palo Alto Municipal Code Section 18.82.070, subject to the conditions of approval in Section ___ of this Record. SECTION 5. Plan Approval. The plans submitted for Building Permit shall be in substantial conformance with those plans prepared by Stoecker & Northway Architects, Inc. titled 1700 Embarcadero Road, consisting of ___ pages, dated _______, revised _____, and received ______, except as modified to incorporate the conditions of approval in Section ___. A copy of these plans is on file in the Department of Planning and Community Development. The conditions of approval in Section ____ shall be printed on the cover sheet of the plan set submitted with the Building Permit application. SECTION 6. Conditions of Approval. The same conditions of Council approval in Exhibit 1 shall apply to the extended Approval (Exhibit 2). SECTION 7. Term of Approval. Site and Design Approval. In the event actual construction of the project is not commenced within one years of the date of council approval of the requested extension, the approval shall expire and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.82.080 and Ordinance 5061. SECTION 8. Indemnity Clause 4 Add this PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: 1. Those plans prepared by _____ titled “______”, consisting of ___ pages, dated _____, (revised ______), and received ______. 1 Planning and Transportation Commission 1 Draft Verbatim Minutes 2 March 5, 2013 3 4 EXCERPT 5 6 Extension of Council Approval of a Site and Design Review Application for a Hotel at 1700 7 Embarcadero Road 8 9 Chair Martinez: Ok. We shall resume the public hearing of Planning Transportation 10 Commission (PTC) and first we’ll start with closing the public hearing on the last item. Let’s 11 open the public hearing on Item Number 3. And this is, I have to recite it now; request for 12 extension of the Council approval of site and design review approval for a hotel at 1700 13 Embarcadero Road. We’ll begin with a staff report. 14 15 Amy French, Chief Planning Official: Yes, thank you. Amy French, Chief Planning Official, 16 once again. Staff does recommend Commission recommend Council approval of the draft 17 Record of Land Use Action, Attachment A. This would allow a one year final extension of the 18 Council’s April 12, 2010 site and design review approval for the Ming’s Hotel project at 1700 19 Embarcadero Road. 20 21 The extension would be in accordance with the ordinance that Council adopted on November 4, 22 2009, in response to a recessionary based decline in development activity. This ordinance, 23 Ordinance 5061 is Attachment F to the report. The table was included in the body of the report 24 to show you the range of projects, planning entitlements that could be extended through this 25 ordinance. So it allowed for extension of permits approved before June 10, 2010. As you can 26 see we’re near the sunset of this ordinance because this approval that’s being requested to be 27 extended was April of 2010. So we only have a couple of more months where this ordinance is 28 in effect. 29 30 So the applicant does have a presentation and there are project plans available, but there are no 31 changes to the projects the applicant will be presenting. You can see the map on the screen there 32 shows the site and the surrounding area context. And staff’s available for questions. So let me 33 call up the applicant’s presentation. 34 35 Commissioner Keller: Can I do a point of order please? 36 37 Chair Martinez: Commissioner Keller. 38 39 Commissioner Keller: Yes. Is this a quasi-judicial item? And if so should we declare any 40 contacts? 41 42 Cara Silver, Sr. Assistant City Attorney: Yes, thank you. Cara Silver, Senior Assistant City 43 Attorney. I was going to wait until the end of staff’s presentation and then it would be 44 appropriate to do disclosures. As it is a quasi-judicial item. 45 46 Chair Martinez: Fine. 47 48 Commissioner Keller: Thank you. 49 2 1 Chair Martinez: Ok, before you begin John. We are as a quasi-judicial item Commission is 2 required to disclose ex-parte communications. And Commissioner Keller, yes? 3 4 Commissioner Keller: Yes. I have seen Vicky Cheng at Ming’s several times and she asked 5 about this project and I didn’t talk about the substance of the project, but I did say that it was 6 possible to get an extension and she should talk to the staff about that. 7 8 Chair Martinez: So if we’ve eaten at Ming’s. Anyone else? Yes, Commissioner Alcheck. 9 10 Commissioner Alcheck: My assumption just off what our Planning staff said is that this is going 11 to be a very similar presentation to the last one. I’m wondering if we anticipate having a lengthy 12 discussion about this project with respect to the extension or if maybe we can forego the 13 representation of the exact same design discussion because this is not, this is sort of just an 14 extension of a permit. I’m wondering if we need to go through that. I’m curious to know if 15 people anticipate having a long discussion? 16 17 Chair Martinez: As part of disclosure the applicant did meet me outside and said that he’s 18 amenable to just requesting the extension and not making a presentation. It was at our pleasure 19 which we prefer. And related to that I was going to ask our counsel what’s our purview here? 20 21 Ms. Silver: This has been noticed for a very limited purpose. It’s just a request to extend the 22 entitlement permit and the applicant is not asking for any design plans or any additional 23 entitlements at this stage. It’s just a very limited area of inquiry. 24 25 Chair Martinez: So can the Commission request changes of the applicant or not? I’m not saying 26 we’re going to do that, I’m just trying to follow with what Commissioner Alcheck has said and 27 kind of limit what we’re focused on. 28 29 Ms. Silver: It hasn’t been noticed for any design changes. You can probably put some conditions 30 on the extension request that are not substantive in a way that would elicit public testimony. So 31 we would want to comply with the Brown Act in terms of noticing the public and allowing the 32 public to come out and talk about substantive changes to the overall project. But there could be 33 some sort of ministerial administrative types of conditions that you could consider under this 34 item. 35 36 Chair Martinez: Ok and the applicant now. You have up to 30 seconds. 37 38 John Northway, Stoecker & Northway: John Northway, Stoecker & Northway. I’m happy to say 39 nothing more except we would like the extension because the financing world has gotten better. 40 And I’m happy for you to vote and we can all go home. 41 42 Chair Martinez: Ok Commissioners do you have questions? Commissioner Panelli. 43 44 MOTION 45 46 Commissioner Panelli: I don’t see anything particularly controversial with this. I don’t think 47 we’ve had any substantive change. Well there’s no change in the project. I don’t think there’s 48 any change in sort of how we want to plan the City. Extending this for another year to me, this 49 3 seems almost like a consent vote type item. So I’m going to make the Motion now to, I’m going 1 to move that we approve the extension. 2 3 SECOND 4 5 Chair Martinez: Recommend approval of the extension? Ok, we have a Motion to recommend 6 approval of the one year extension and a second by Vice-Chair Michael. I take it you don’t want 7 to speak to this Motion, you’re ready to vote? 8 9 Commissioner Panelli: The only thing I’m going to say is if anybody’s opposed to this I want to 10 hear why. 11 12 Chair Martinez: Commissioner Alcheck, do you take that challenge? Ok. I did have some 13 questions of the applicant. What happens after a year? Things do take time. Is there a Plan B? 14 15 Mr. Northway: Well in talking with Amy if the year, the year extension as I read in here is final. 16 And I believe that we would, everything that I’ve been told by the owner is that he has two 17 people who are ready to finance him and basically they just want to make sure the City approval 18 is intact. We’re ready to start the construction documents. If for some reason that doesn’t 19 happen then it’s my understanding we’d have to go back through the site and design process 20 again, which we don’t want to do. We’re incredibly optimistic that this is going forward. But 21 you know the world out there and God knows what the sequester will do. So we’re cautiously 22 optimistic. 23 24 Chair Martinez: Ok, before you sit down. You’re aware of the golf course project. 25 26 Mr. Northway: Only what I’ve read in the newspaper. 27 28 Chair Martinez: Right. And so at a previous hearing the Commission has suggested the hotel at 29 Ming’s would be a great addition to what’s being planned for the golf course and I think we all 30 support that. Would that suggest any kind of changes or anything that if you were starting 31 planning now you would do differently or you believe it just sort of all falls into place? 32 33 Mr. Northway: I don’t think it would cause us to make any changes, no. Everyone’s happy with 34 the design and we’re just getting ready to execute it. 35 36 Chair Martinez: Ok, very good. It was really more informational for us than questioning the 37 logic of it. 38 39 Mr. Northway: I’m sure a better golf course might bring in more people to occupy the hotel so 40 that would be a good thing. 41 42 Chair Martinez: Yes. Maybe you don’t have enough rooms. Anyone else, comments? 43 Commissioner Keller, yes? 44 45 Commissioner Keller: So first of all this is exactly the kind of reason why the ordinance that was 46 for allowing extensions was put into place in 2009 so it’s good to see that this is being used to 47 good effect. I vaguely remember this as being a hotel that people would stay at for some time 48 and I’m wondering if there, what we decide in terms of whether the units would qualify or not 49 4 towards our, not Below Market Rate (BMR), but towards our Association of Bay Area 1 Governments (ABAG) housing requirements. Are there kitchens or anything like that or what 2 do they qualify? 3 4 Mr. Northway: I believe in the language of how this was approved, people can’t stay there for 5 more than 30 days. If they’re there for more than 30 days it questions whether you can collect 6 the hotel occupancy tax. So they are restricted to not, no one can stay for more than 30 days. 7 8 Commissioner Keller: Thank you. 9 10 Mr. Northway: So I don’t think it would help out with the housing allocation. Amy’s shaking 11 her head, so I think I remembered correctly. 12 13 Aaron Aknin, Assistant Director: That is correct. They don’t qualify as a unit under the state, or 14 a housing unit under the State code. 15 16 Commissioner Keller: Ok, thank you. Just figured I’d check with that. Thank you. 17 18 Chair Martinez: We’ll give them concessions. 19 20 Ms. Silver: By the way we did try and HCD rejected that argument, but we tried. 21 22 VOTE 23 24 Chair Martinez: Anyone else? Ok, we have a Motion to recommend approval of the extension, 25 the one year extension and it’s been seconded by Vice-Chair Michael and all those in favor of 26 the Motion say aye (Aye). Ok. The Motion passes unanimously and thank you all very much. 27 And let me just add for our Assistant Planning Director this doesn’t mean you can add a fourth 28 agenda item last time. We were lucky. 29 30 MOTION PASSED (7-0) 31 32 City of Palo Alto (ID # 3593) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: Mitchell Park Construction Contract Bi-Monthly Report Title: Submittal of Mitchell Park Library and Community Center Bi-Monthly Construction Contract Report From: City Manager Lead Department: Public Works Recommendation and Draft Motion: Draft Motion: I move that Council: 1)Accept this update on the Mitchell Park Library and Community Center (MPL&CC) construction project; and 2)Direct staff to continue to submit bi-monthly reports to Council and to take related actions which Council may direct. Executive Summary The MPL&CC construction is approximately 82%complete (based on expenditures)and it is anticipated that the three-building complex will be open to the public late in 2013. The estimated opening time frame has been changed from our earlier estimate (Spring 2013) to late 2013 due to delays caused by errors and omissions by the contractor and its subcontractors, the necessity to fully correct every deficiency, and to insure that the buildings are of the highest quality. It will also take six to eight weeks after construction is completed to move into the buildings, prepare the library collection and other materials for public use,and ready the staff and the space for opening. The percentage completion has increased from 81%to 82% since the last report. A major milestone, the completion of sheetrock, has been achieved since the last bi-monthly report.Several small areas of sheetrock still need to be done, but painting has commenced and the last two months have shown encouraging progress. Because of the delays, errors,and omissions by the contractor Flintco Pacific, the City has established a contract with another contractor, Big D Builders, which the City can use to correct City of Palo Alto Page 2 errors and finish work when Flintco Pacific fails to do so.The City plans to pass the Big D costs on to Flintco Pacific. Big D Builders is the firm that recently completed the successful Palo Alto Arts Center remodeling project. In the next bi-monthly report City staff will give an update on this contract and any specific tasks which have been assigned to Big D Builders. The maximum amount of the contract is $240,000, which is below the threshold for Council approval. Should it become necessary to increase this contract, an action will be brought to Council for approval. Costs have increased above the bid amount partially due to building complexities and partially due to the performance of the City’s contractors. To date, a total increase (Construction Contract Change Orders)of $3,188,668 has been approved by the City, or approximately 13% above the base construction contract amount.The bid amount was approximately 24% below the City Engineer’s estimate and Council has authorized a maximum increase of 20% above the bid amount in change orders.Thus,the project remains below budget, despite the unforeseen costs. Background At 56,000 square feet, MPL&CC is the City's largest construction project in four decades. Inside the state-of-the-art library building, teens, children, and those just wanting a quiet space will all have their own dedicated areas. The two-building Community Center complex will contain an expansive community room, kitchen, teen center, cafe,computer room and game room. The complex will be the City's model for an eco-friendly facility with extensive green roofs, solar water heating, night sky water cooling, photovoltaic panels, stormwater infiltration, and natural daylight utilization all wired with a state-of-the-art data feedback and control system. On September 12, 2011,Council authorized an increase in change order authority and a ceiling for the MPL&CC construction contract from 10% to 20% to cover unanticipated construction costs. Council also directed staff to provide Council with a monthly report (subsequently modified to bi-monthly)on change orders with Flintco, the general contractor.Council also requested the City Attorney to provide additional confidential briefings regarding potential claims against other responsible parties.Additionally, Council also directed staff to report on project milestones in the bi-monthly reports. Discussion Construction Progress On June 4, 2012, Council requested information on construction progress and set-backs since the last report and milestones that staff expects will be reached by the next report. Since the last bi-monthly report,which was submitted to Council on February 11, 2013,a major City of Palo Alto Page 3 milestone has been achieved: the completion of sheetrock.The attached “Schedule Milestones” page has been revised to show the 10 key building interior milestones which must be achieved well ahead of opening to the public.Staff will report on achievement of these milestones from this point forward. Many corrections to mechanical, electrical,and plumbing (MEP)work in the walls and above the ceiling were not completed on time. Some floor panels will have to be temporarily removed to allow for corrections and re-inspections. The number of corrections and re- inspections required is much larger than for a typical project. Another problem is that many corrections are still needed on the sliding glass doors and this issue has been outstanding since April 2012. Many of the windows failed water testing multiple times.The windows are now complete, however, the MEP work is not and therefore the ceiling cannot be completed. All of these problems were detected by the City’s building inspectors or construction manager Turner. The contractor is required to correct them. The City will pursue recovery of these costs from the contractor, either by way of withholding payment or through separate action.Sub- standard work will not be accepted. However,these corrections cause delays in the work of the next subcontractor and some could cause a delay in a critical path item,thus further delaying the project. City staff is proactively working with the general contractor and City consultants to avoid delays while not compromising quality.In addition, the City contracted with Big D Builders to perform work on an “as needed” basis to complete work that Flintco is unable or unwilling to do. Big D Builders is the construction firm that recently completed the Palo Alto Art Center renovations. Their work on this project was done on time and under budget. The amount of the Big D Builders contract is $240,000. Compounding problems, Flintco has recently undergone some significant organizational changes. The CEO of the company has been replaced and a portion of the Flintco organization has been sold. On one hand, this has caused internal distractions, but on the other hand, may open the possibility for new leadership approaches. The City has and will continue to meet with Flintco’s new CEO to discuss performance issues.The contract contains a liquidated damage provision for each day of contractor delay and the City expects to invoke this provision once the job is finally completed. Looking ahead to the next bi-monthly report, the key milestones that will need to be completed are the mechanical, electrical, plumbing (MEP)work and the Mechanical Room.These deadlines have been missed and rescheduled multiple times.The heating system cannot be started up and thoroughly tested because the MEP work is not done. Without a heating system woodwork cannot be brought into the buildings for installation. City of Palo Alto Page 4 Approved Construction Contract Change Orders To date, 37 change orders have been approved for a total amount of $3,188,668. This amount constitutes approximately 13%of the base construction contract amount. Since the last bi- monthly report, there have been six additional change orders issued. Council has authorized change orders up to 20% of the base contract amount;leaving about 7% remaining. A breakdown of the change orders and the key components of each are contained in Table 1 listed below with a brief description of each. Please recognize that change orders can include reductions and credits as well as new costs. You will see this, for example, reflected in Change Order #5 in Table 1 below. The shaded change orders have been issued since the last bi- monthly report. Table 1 Change Order Amount Change Order Summary 1 $41,725 Eight extra work items including the pruning of trees, clean- up of the old building, and removing conduit found during site clearing and grading. 2 $33,102 Four extra work items including the rerouting of a storm drain around tree roots and the addition of a new manhole that the drawings showed being present but wasn’t. 3 $215,501 10 extra work items including an adjustment needed due to tree root interference, an upgrade in wall insulation capability, and design coordination needed for steel installation. 4 $242,754 11 extra work items including the installation of dowels at additional locations, the installation of thicker glass railings to increase stability, increased gas transmission line coordination, and extra concrete water protection. 5 $4,436 24 extra work items including an extra light fixture cost, fire safety drawing coordination, and a variety of additional required supplies totaling $70,536 minus credit given for three of the 24 work items including spare fixtures no longer required and reimbursed City of Palo Alto dump fees totaling $66,100. 6 $25,123 Seven extra work items including additional gas main protection, curb strengthening, and deck support for the Building A green roof. City of Palo Alto Page 5 7 $74,304 19 extra work items including HVAC driven floor adjustments, electrical system adjustments, data cable rerouting, and a new load break cabinet totaling $109,965 minus credit given for two of the 19 work items including stones for the Arch provided by the artist and value engineering totaling $35,661. 8 $385,251 10 extra work items including additional fill, perforated metal panel ceiling work, various waterproofing, and conduit. 9 $195,706 18 extra work items including multiple curb installations, a basketball court slab, and an art sculpture foundation. 10 $78,514 13 extra work items including a Flintco field staff supplement, waterproofing, plumbing and electrical system alterations, and tree protection measures totaling $79,226 minus credit given for one of the 13 work items identified as plumbing fixture changes totaling $712. 11 $224,662 14 extra work items including beam strengthening, interior & exterior roof tank pipe supports, electric vehicle chargers, load break cabinet bollards, and additional steel. 12 $20,347 Seven extra work items including A/V work, electrical changes, and a roof access ladder. 13 $80,721 13 extra work items including metal stud framing, light fixtures, and miscellaneous electrical work. 14 $54,028 Five extra work items including a thickened roof edge, equipment curbs, a Building A ramp, signage support, and a book drop. 15 $176,586 12 extra work items including additional lighting, electrical work, soil for silva cells & planting areas, and HVAC work. 16 $53,256 Four extra work items including traffic signal modifications, construction recovery costs, and a tube steel base plate modification. 17 $278,710 Five extra work items including tube steel and supplemental exterior wall steel revisions. 18 $76,823 Seven extra work items including concrete floor sealer, wall short panels, leakage testing, pipe supports,and permit processing. 19 $36,526 Eight extra work items including building security, lighting, and electrical work. City of Palo Alto Page 6 20 $20,832 Seven extra work items including lighting and electrical work. 21 $122,071 Six extra work items including roof curbs, studs, and roof crickets. 22 $16,839 Six extra work items including duct, gutter, and ceiling work. 23 $122,472 Nine extra work items include occupancy changes, tube steel and the related work, and artwork preparation totaling $123,104 minus credit given for one of the nine work items for roof parapets, flashing, and crickets totaling $632. 24 $46,654 Three extra work items including night sky cooling tank repair work and parapet and roof details. 25 -$37,158 20 extra work items including glass changes and book drop and elevator improvements totaling $44,790 minus credit given for five of the 20 work items including deleted A/V work, geotextile fabric work, and storm drain/gas line cost savings totaling $81,948. 26 $28,056 Five extra work items including roof substrate revisions and curtain wall supports totaling $31,465 minus credit given for one of the five work items related to roof drain plumbing totaling $3,409. 27 $49,470 Eight extra work items including exhaust fan work, additional channels, and roof work. 28 $24,225 Nine extra work items including expansion joint work, kitchen equipment wiring, and roof and plumbing work. 29 $94,174 14 extra work items including exterior wall water proofing, bathroom work, plumbing work, and electrical work totaling $101,983 minus credit given for two of the 14 work items including a WAP reduction and book drop work totaling $7,809. 30 $32,331 Eight extra work items including power for signage and other outdoor expenditures. 31 $23,886 Eight extra work items including perimeter wall work, elevator shaft power and lighting, and electrical work. 32 $102,472 Five extra work items including demolition, reconstruction, and fire prevention work. 33 $73,172 10 extra work items including data, raised floor, electrical, and shelving work. City of Palo Alto Page 7 34 $37,090 Five extra work items including door, fire prevention, and signage work. 35 $59,002 10 extra work items including window shade, door, flooring, and electrical work. 36 $62,559 Seven extra work items including tile, landscaping, and electrical work. 37 $12, 446 Six extra work items including electrical and plumbing work. TOTAL $3,188,668 TOTAL CO’s 1-37 *For further information about each of the change orders see the attached corresponding Contract Change Order Scopes of Work (Attachment A). Change order requests submitted by the contractor are typically bundled together and summarized in one single change order. On September 12, 2011,Council further directed staff to submit any change order request which exceeds $85,000 to Council for approval. Staff is interpreting this to mean an individual change order line item more than $85,000. One may note that over the course of a period of time a number of on-site decisions are made, in order to not slow the project down, which can add up to more than $85,000 when compiled later. Bundled Change Order 11, for example, totals $224,662, but includes a series of change orders, none of which exceeds $85,000.Council has approved one change order to date (Change Order # 17)which contained line items exceeding $85,000. Related Council Directives for the Bi-Monthly Report Council further directed that staff report to Council on oversight activities. Therefore, attached is the most recent Library Bond Oversight Committee agenda (Attachment B)and Library Bond Oversight Committee minutes (Attachment C). On October 17, 2011, Council requested information on two other related topics and these are addressed below. 1)Expenditures for New Consultants The City Attorney’s Office has hired the following consultants to assist with the review of construction costs requested by Council. The table below shows the amount encumbered and the amount spent to date. City of Palo Alto Page 8 Contract Amount Amount Expended ZFA Structural Engineers $25,000 $19,581 Legal Counsel (Jarvis Fay)$75,000 $58,362 Reidinger Consulting (Scheduling)$85,000 $72,327 Legal Counsel (Otis & Iriki)$455,000 $440,113 Legal Counsel (Ginn & Crosby, LLP)$35,000 $1,704 David Neagley $275,000 $0 Project Controls & Forensics $100,000 $0 2)Outstanding Change Orders Proposed by the Construction Contractor (Flintco) In addition to knowing the amount of the change orders approved to date by the City (above), Council members asked the value of the outstanding change orders proposed by Flintco but not yet approved or rejected. This information is contained in Attachment D. The first graph on Attachment D shows both Potential Change Orders (PCOs), which is an internal list compiled by the City’s construction manager of certain work items that could eventually result in extra work claims,and actual Change Order Requests (CORs),a subset of the PCOs, which have been submitted by Flintco to date. A large batch of CORs was retracted by Flintco with the stated intention of modifying them. The City has informed Flintco that its retraction may jeopardize the ability of the City to act on these CORs. Due to the failure of Flintco to meet its self-imposed deadlines for resubmittal of the CORs, the City has resumed issuance of Unilateral Change Orders in order to ensure a cash flow for the subcontractors so they will not leave the job. Recently, Flintco began submitting CORs again. Many of the newly submitted CORs appear to be duplicative of,or inconsistent with,previous CORs. City staff and Turner will take extreme steps to ensure that Flintco is not double paid. The latest bi-monthly report concerning all Library Projects (“Palo Alto Library Projects”) is included as Attachment E. Resource Impact There are no resource impacts associated with providing the bi-monthly reports to Council. The approved change orders are within the Capital Improvement Program Project (CIP)Budget PE- 09006 for the MPL&CC project. City of Palo Alto Page 9 Policy Implications There are no policy implications in providing the bi-monthly reports to Council. Environmental Review Providing bi-monthly reports on this topic to Council does not constitute a project under the California Environmental Quality Act (CEQA). Attachments: ·A -MPL COs # 32-37 (PDF) ·B -LBOC Agenda_2-5-2013 (PDF) ·C -LBOC Minutes_10-30-2012 (PDF) ·D -MPL Financial Charts (PDF) ·E -PAL Bi-Monthly Report Jan-Feb 2013 (PDF) Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 , , ~ < ~ • x''. ,"~ ",' --;: ~ ,,,._,,.~ ":;"-" I" -:'-"".,,'YJ;''-• -"';-~_'''';'.' ,.!.~f';'>.~_·~-,~-,-",,""> ; '~ ,_-,',' "~--: • :~'':~ 'Of,," '.,.. '-:,,~,~,§,~ "r ,,-' '>~~"""'.\'~ : ~cintl:adt (:1man"!1e,@rClt¥r 7!Jiiirt'y'::fEwir~~: C(J)'lrtiifelef/; -,~ >;' ',., ,'<.: ,',' ",' :-,','-, ,'" ,., ':", ,:' 'c, ", '<:;j ;. <:" ~ ~> .~ .~~ ~ ~ , .~ "I ~,. ~ ':; .. ,/t-<;" ,_ -:,?~:, ~_. f'~ 1\! /~ ", _. ';, '~~~ _'; \.,' ", 1 ~ .\.~ "~<J.(,,,~,~iJJ CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejeCtisn, it may submit a Claim ursuant to Section 4.2 of the Contract General Conditions within thirt 30 da s of the date of this Chan e Order. Accepted for Contractor: Accepted for City of Palo Alto: By: Signature Declined By: Phil BoBel Assistant Director of Public Works Title: Andy Brophy Flintco -Project Manager Title: Date: Date: SCOPE OF WORK '0 N .., "t.. U) Q: 0 :i u: tn 0 0 Il. 0 a: <C u.. 0 Description Amount Stair 1 -Demolition and Reconstruction 389.11 539 062 1028.2 Walls, framing a'nd Mechanical work 38,252 T & M ALLOWANCE Stair 1 -Demolition / Reconstruction 389.12 539 062 1028.2 Electrical work 3,731 LUMP SUM Stair 1 -Demolition / Reconstruction 389.13 539 062 1028.2 Solar Water work 2,268 LUMP SUM ASI 145 Area of Refuge Fire Rating 389.14 539 1363.1 145 068 1028.2 Drywall and framing 1 hour wall assemblies 22,110 T & M ALLOWANCE ASI145 Area of Refuge Fire Rating 389.15 539 1363.1 145 068 1028.2 Spray on Fireproofing including clean up 36,111 v LUMP SUM Total for this change order 102,472. SCOPE OF WORK NOTES: 1. T&M Allowances will reconcile in a future Change Order when this work is complete using direct cost+15% mark up+2% bonds/insurance 2. T&M tickets must be completed at the end of each day. Each T&M worker must sign inand out at the CM office daily. 3. Clean up of spray on fireproofing is included in PCO 389.15 lump sum and is not allowed on T&M Allowance tickets. 4. T&M tickets for Flintco direct labor is limited to tasks specifically part of this work (direct cost+1 0% mark up+2%bonds/ins.) Key: 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect.'- ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim ursuant to Section 4.2 of the Contract General Conditions within thirt 30 da s of the date of this Chari e Order. Accepted for Contractor: Accepted for City of Palo Alto: By: Signature Declined By: Title: Andy Brophy Flintco -Project Manager Title: Date: , Date: SCOPE OF WORK ... ~ 0 '" '" 1... II) (.,) :Ii u: th 0 0 a. 0 0:: <C LL 0 Description Amount 067.2 514 1262 142 1068 ASI142 Library Shelving 4,854 161 225 059 018 147 ASI 059 Restroom Revisions (Bldg A&C) -Claim Adjustment 3,115 172.4 350 107 265 ASI107 Deleted AN in MPR (C139) -Claim Adjustment 14,245 332 445 1149 1056 RFI1149 Relays for Fire Alarm at Elevator Controllers -Entitlement 2,918 Decision Adjustment 349.1 477 1109.1 048 1059 RF11109.1 Lighting & Ceiling (A231) 18,072 - 399 521 1275 1060 RFI1275 NSC Tank Pump Mounting -Claim Adjustment 134 416.1 550 156.1 1079 ASI 156.1 Data and Raised Floor Coordination 25,339 417 551 157 1097 ASI 157 Illuminated Area of Refuge Signage 2,323 --467 615 1438 1137 RFI1438 Occupancy Sensor Power Pack Bikerrrash Enclosure 947 475 631 1452 1130 RFI1452 Discontinued C1 Type Light Fixture 1,225 Total for this change order 73,172 ..... V 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 i '.~l?lJ!ft:apt; epal[l§1~" ,<If:, J~r, JElijt!ft'J{;t '.~.li!rJ!-h. "~~~lil~!I!l,;tt#il,~,!,. ; " ,;, ,q. 'J " ;'::,';,1:/I,',"~ ';{';','1 ,,;:":", ';";~--:'n:,;'f "",~~, ;<"" ,"'" , " '! ,I', ,~ ,~f., .. "~~ , ,'~ ,~) '" j, ~ '.) ..r. -... ",;.,..>l,f;,~~~'" ,. ':i!:'~~~"';;'~~~N~""~>;".o>"':' .1, .'S:,_ ~"!;\vl:r."\' '<I.:{rn,'~· ::,,->l'-"""~,,"'\:;d";' "~~_,,,-"-I.'< ~.Ir;,J _~ (,~>",~,., ~. :>!p'.<",_. CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Accept~ol1' City of Palo Alto: By: Signature Declined By: i/t!Pf2r! ~:> Title: Andy Brophy Title: Phil Bobel Flintco -Project Manager ASSistant Director of Public Works Date: Date: Ij~3 , I SCOPE OF WORK '0 N ... "!:.. II) "a! u :IE u: UJ 0 0 Q.. 0 I:t! <C u. u Description Amount 163 227 062 020 1024 ASI 062 Carpet Revisions 2,596 455 598 178 1116 ASI 178 Signage Backing Bldg A 4,782 459 591 175.1 060 1122 ASI 175.1 Fire Rated Soffit Ceiling Bldg B 4,788 473 626 1449 1125 RF11449 Door Power Dry Contacts 2,596 479 644 182 1146 ASI 182 Sliding Doors Mitigation f Entrance Grates 22,328 Total for this change order 37,090. 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The,City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any Items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim ursuant to Section 4.2 of the Contract General Conditions within thirt 30 da s of the date of this Chan e Order. Accepted for ContractoR': Accepte Cit~ of Palo Alto: By: Signature Declined By: Title: Andy Brophy Title: Flintco -Project Manager Date: Date: SCOPE OF WORK (:) '" .., "!.. I/) 'Ix: (.) :! u:: tJ) 0 0 0-(.) 0::: « u. (.) Description Amount 190.2 428 114.1 1094.3 ASI 114 1114.1 Window Shades 26,875 200.2 538 1290 1163 RFI1290 Door Hardware, Power, & Security Bldg A & B 5,785 222 305 099 1047 ASI 099 Boards, Corner Guards, & Bumper Rails 3,713 235 376 913 1048 RFI913 VRF-2 UV Protection NE Terrace Bldg A 1,684 244.2 373 110.1 1021 ASI 110.1 Roll-Out Mats 1,469 265.2 613 1091 EFVM Retest Green Roof East Bldg A 1,294 333 532 146 1078 ASI146 Resilient Flooring to Carpet Tile Bldg A 5,786 357 492 1144 Submittal 08305-001 Stainless Steel Access Doors 4,504 402 534 150 053 1077.1 ASI 150 Fire Alarm Pull Station Covers 3,550 481 633 1465 1129 RFI1465 Power for Elevator Door Smoke Containment 4,342 Total for this change order 59,002. 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F 3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 if''';'", ,~.~~ /: i ~,' ,""." :-< "~~~.r;~;t:~~:'!~: ')'""~"~'~1~'~ ~{I~".t Lt~~:'l:~~~' :./1,,:: },,'t../,:,i", ~; '1 1 ,; -»'r~~", ~"~:7, ~,,\-':;".> ;':.::)l')"'~;:;~~H~>t) ~A~,?~r }-:t~ 1'~~ '~";~1'~f:"';~"-:T, '[':'.,1.:!1 L ~1!)"n~t''Pct €iharrge '@1fJtler!:7ihtlftJ!~c~J)f'-;e9,liI,tll!1J!JeCi " "" :' "",.~, ,: ;'. '''.'''n; ,:,',.:'" . '" '" .. , ,". j "!1rf""~ !~, ':."",,;_ .c ,," .'>~~" '.;-' ,,;!~ J',';j"". ;, ',;,;;'-<'; ,''''-!i-'.'--'~'J ,I .• 'JI>~<<'!w'.~"','\ ,', , _~-' ~' 1 ~'~,:~~r1~: 'L--"'/0 ~,: -,,',-' I.,! " 'i,q l"~\:\ ~'),~"'-'~':~) •• ~~,.,<~1¥1~ CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change' Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials. and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date. of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order. Accepted for Contractor: Accepted for City of Palo Alto: By: Signature Declined .~ '/~ ,(t" By:,. /<d.lu:"' ,·-tLi Title: Andy Brophy Title: Phil Bobel Flintco -Project Manager Assistant Director of Public Works Date: Date: Q!!5//3 I I SCOPE OF WORK .... 0 :e ... 't.. III "'0::: (.) u:: Ch 0 0 Il. 0 0::: « lL 0 Description Amount 127.6 372 109 1030 Traffic Signal Phasing Middlefield Rd Included 243.1 372 109 1030 ASI 109 Landscaping Middlefield Rd 11,135 324 441 1140.1 1039 RF11140.1 AHU & Temperature Control Panel Power 4,410 486 638 1469 199 1128.1 ASI 199 FF8 Type Light Fixtures Snack Bar (BiOi) 4,307 489.1 645 061 1135 Make-Up Air Unit MAU-1-C Bldg C (15860) 3,551 489.2 659 195 1167 ASI195 (revision 1) MAU-1-C Electrical 1,741 496 654 196 067 1156 ASI 196 Epoxy Grout for Ceramic Tile Bathrooms (Bldg A & C) 37,415 Total for this change order 62,559. 1. Potential Change Order 3. Request for Infonnation 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair arid prompt adjustment to the Contract Sum. In dOing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders, All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Contract Change Order City of Palo Alto Department: Public Works Engineering Contract Number: C11136473 CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete any additional work specified therein, for the consideration stated therein. CLAIM PROCEDURE: Any items in Contractor's Change Order Request that are not included in this Change Order are hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim ursuant to Section 4.2 of the Contract General Conditions within thirt 30 da s of the date of this Chan e Order. Accepted for Contractor: Accepte r City of Palo Alto: By: Signature Declined By: Title: Andy Brophy Title: Flintco -Project Manager Date: Date: SCOPE OF WORK .... il-: 0 ... .., "!:.. ., 0 :& u: tn 0 0 c.. 0 0:: <C u. 0 Description Amount 206.3 377 985.2 1031 RFI 985.2 Fire Treated Plywood Curtain Rail Bldg A 1,401 236 331 902 1033 RFI 902 Sink Vent at Window Jamb (B116) 1,223 307 397 1033.1 1063 RFI 1033.1 Furred Wall Light Switch Pull Station Bldg B 406 334 442 1077 282 RFI1077 1077.1 1077.2 Motor Starters EF-1A & 2A-2,698 Direct Negotiation Adjustment 416.2 559 160.1 1145.1 ASI160.1 Power & Furniture Coordination Bldg A 3,933 463 590 1405 1123 RFI1405 Exposed Plumbing Pipes MPR (C139) 2,785 Total for this change order 12,446. / 1. Potential Change Order 3. Request for Information 5. Field Order or Extra Work Authorization 2. Change Management 4. Architect's Supplemental Instructions 6. Change Order Request Note: This Change Order is being issued unilaterally by the City. The basis for the adjustment in the contract sum was determined by the City pursuant to Section 7.2.4 (iii). Contractor has indicated that it is unwilling to execute a Change Order because it does not wish to be bound by subsection 7.2.13 of the Contract General Conditions. The City's action in approving this unilateral Change Order is intended to ensure fair and prompt adjustment to the Contract Sum. In doing so, the City expressly disavows any intent to waive or any actual waiver of any of the Contract provisions regarding Change Orders. All provisions of the Contract Documents remain in full force and effect. ApPENDIX B -CONTRACT CHANGE ORDER PAGE20F3 Agenda Library Bond Oversight Committee Quarterly Meeting Tuesday, February 5, 2013 7th Floor Conference Room 4:00 PM – 5:30 PM Committee Members: Sandra Hirsh (Chair), Alice Smith (Vice-Chair), John Melton, Dena Mossar, James Schmidt Staff: Phil Bobel (Public Works), Brad Eggleston (Public Works), Debra Jacobs (Public Works), Richard Hackmann (Public Works), Monique leConge (Library), Joe Saccio (Administrative Services), Tarun Narayan (Administrative Services), Jim Pelletier (City Auditor’s Office), Cara Silver (City Attorney’s Office) Others: ROLL CALL ORAL COMMUNICATIONS APPROVAL OF MINUTES – October 30, 2012 AGENDA REVIEW & REVISIONS UNFINISHED BUSINESS 1. DISCUSSION – Construction Progress a. Mitchell Park Library & Community Center b. Temporary Main Library 2. DISCUSSION – Design Progress a. Main Library NEW BUSINESS 3. DISCUSSION - Update on Main Library Project a. Bidding and Construction Schedule b. Preparation of Bond Issuance 4. DISCUSSION - Draft Financial Report Summary from Administrative Services a. Expenditures to Date – Summary Spreadsheet 5. ACTION - Approval of Quarterly Report to Finance Committee 6. Next Steps a. Next Meeting – Tuesday, April 23, 2013 ADA: Persons with disabilities who require auxiliary aids or services in using City facilities, services, or programs or who would like information on the City's compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550. Sign language interpreters will be provided upon request with 72 hours in advance notice. Meeting materials will be provided at the meeting. Visit www.cityofpaloalto.org or call (650) 617-3174 for more information. 1 Minutes Library Bond Oversight Committee Quarterly Meeting October 30, 2012 7th floor conference room 4:00 p.m. – 5:30 p.m. Committee Members Present: James Schmidt (Chair), John Melton, Dena Mossar, Alice Smith Committee Members Absent: Sandra Hirsh (Vice-Chair) Staff Present: (Public Works) Brad Eggleston, Phil Bobel, Debra Jacobs, Richard Hackmann (Library) Monique leConge; (Administrative Services) Joe Saccio, Tarun Narayan, (Auditor) Jim Pelletier, (Attorney) Melissa Tronquet ROLL CALL  4:02 PM ORAL COMMUNICATIONS  None APPROVAL OF MINUTES – July 24, 2012  Approved AGENDA REVIEW & REVISIONS UNFINISHED BUSINESS 1. DISCUSSION – Construction Progress a. Mitchell Park Library & Community Center  Debra Jacobs said she wishes she had more to report on MPL since the last meeting but the only main thing she can say has been achieved is permanent power  Phil Bobel said that the City has limited rights under California law regarding contracts. The City must take the low bidder and then either use them or drop them and rebid  Staffs’ estimate is that going through a rebid process would take too long  Bobel staff is very disappointed with the construction delays 2  In response to a question about the time limits in which bond money must be spent, Joe Saccio said he did not feel the City was improperly acting o Saccio said as long as the City is spending the money in a good-faith time frame and as long as the City is trying to get the project done the City is OK  Bobel said he was disappointed with the way things had gone and was sad to say that when a temporary use and occupancy permit is issued some minor work will still be going on but hopes it is not intrusive to users and staff  Alice Smith said Bobel should speak with the head of Flintco, not the head of Flintco Pacific, about how poorly the project is going o Bobel agreed with this b. Temporary Main Library  Brad Eggleston said Main is at 95% design and is going well o The plans were sent to plan review as well  Eggleston also noted that staff has made a long list of things that have not gone well at MPL that they will use to enhance the contract for Main including a true not to exceed figure, prequalification of subcontractors, and more detailed provisions for the constructability review  Nova Partners is the construction manager for Main and will help staff work through the bid process and selection of a contractor. o Staff is looking to do this in March of 2013  John Melton said he wants to make sure that the Council’s CMR for the authorization of bond funds for Main is written differently  The Art Center Auditorium will serve as the temporary Main Library and is essentially ready  Staff is trying to minimize the time between when Main closes and when the temporary Main opens  Melton commented that the temporary library at Cubberley is working very well  Also, the Downtown and College Terrace libraries will be open extra days when Main is closed  Dena Moser requested the City have short term parking at the Downtown Library back lot instead of the colored zoned parking it currently has 2. DISCUSSION – Design Progress (Phil Bobel) a. Main Library  Included with the discussion of item # 1B above 3 NEW BUSINESS 3. DISCUSSION - GO bond assessment for FY 2012-13  Nothing further to report out since the last meeting 4. DISCUSSION - Update on reconciliation of Main Library costs (Phil Bobel)  Eggleston distributed a more detailed and updated Main Library cost estimate  Eggleston said Group 4 Architecture revised their estimated cost figure based on the 95% design and that Nova Partners would be independently checking that figure as well  Bobel said that he was taking into account the fact that reserves are lowering but is confident that the current reserves are sufficient even considering the fact that more MPL additional costs are going to occur in the future  Bobel said that additional funds were contributed to Main and that he is working hard to make sure that even in a worst case scenario (in terms of cost) that the City’s General Fund is not hit hard by this 5. DISCUSSION - Draft Financial Report Summary from Administrative Services (Tarun Narayan) a. Expenditures to date – summary spreadsheet  Tarun Narayan said there were $800,00 in additional expenditures and that those are consistent with what has been going on with the project  Narayan said there were minor increased legal and consultant costs but most of the increases are construction costs  Jim Pelletier asked it if was better to break down the contract costs versus projected costs of the budget history and projection figures o Narayan said that he understands the concern but feels this is the best presentation for clarity to the public  Moser asked about the variations in figures the LBOC sees versus the City Council sees o Staff explained that is only a matter of when the different groups meet and that for every report a cut-off date is required for data so they will never be exactly the same unless they are meeting on the same cycle  In the future staff wil communicate the difference between the figures in the bi- monthly report and the LBOC report  Melton asked if Council understood that the money is evaporating in the reserves and Bobel said the Council is very clear on that  Melton asked if the media ever asked about this report or if any citizens had ever inquired about it and the consensus was no 4 6. ACTION - Approval of Quarterly Report to Finance Committee  Approved 4-0 as amended (the removal of the box on page 3 and a change to the transmittal letter communicating the difference between the figures in the bi- monthly report and the LBOC report) 7. ACTION – Election of a new LBOC Chair and Vice-Chair  Hirsh elected as 2013 LBOC Chair 4-0 as nominated by Schmidt  Alice Smith elected as 2013 LBOC Vice-Chair 4-0 as nominated by Mosser 8. Next Steps a. Next meeting – January 22, 2013 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 Co s t Percent Completion Mitchell Park Library Approved Change Orders (CO's) and Outstanding Potential Change Orders (PCO's) Approved CO's Outstanding PCO's Flintco COR's 10% Contingency 20% Contingency 4.19 (DT) 5.21 (DT) 4 (DT) $44.6 (Mitchell) $49.04 (Mitchell) $50 (Mitchell) $22.66* (Main) $20.1 (Main) $18 (Main) 1.65 (Other) 1.65 (Other) 4 (Other) Cu r r e n t P r o j e c t i o n En g i n e e r ' s E s t i m a t e Bo n d E l e c t i o n Es t i m a t e Dollars (Millions) Library Bond Fund Utilization Projections (February 2013) Mitchell Park Library Main Library Temporary Libraries & Bond Costs $73.1M $76M *The Main Library Projection was increased following Council approval on July 25, 2011 (Staff Report #1438) of approximately $1.7M of design amendments and future building improvements related to deferred maintenance, code upgrades and service enhancements. Palo Alto Library Projects Bi-Monthly Progress Report January-February 2013 Mitchell Park Library & Community Center Main Library Mitchell Park Main Entry Table of Contents I. Mitchell Park Library & Community Center  Status Report  Management Summary  Schedule Milestones II. Main Library  Status Report III. Financial Summary Mitchell Park Library & Community Center 3700 Middlefield Road, Palo Alto The new Mitchell Park Library and Community Center is a highly sustainable joint-use facility that will be a vibrant destination for civic, cultural, social, educational, and recreational activities. The new center, which will replace undersized and aged facilities, is made possible through Measure N and the strong partnership between the city and the community. During construction, temporary library and teen center facilities are available at the Cubberley Community Center. WEB CAM LINK: http://173.164.239.206/view/viewer_index.shtml January-February 2013 PROJECT CONSTRUCTION CONSTRUCTION BEGAN: September 2010 ANTICIPATED OPENING: Late 2013 PROJECT TEAM OWNER: City of Palo Alto Public Works ARCHITECT: Group 4 Architecture GENERAL CONTRACTOR: Flintco Pacific, Inc. CONSTRUCTION MANAGER: Turner Construction Company FOR MORE INFORMATION www.cityofpaloalto.org/gov/topics/pro jects/facilities/library/default.asp KEY ACCOMPLISHMENTS  Drywall substantially complete UPCOMING ACTIVITIES  Stonework started  Exterior painting and trim  Interior ceilings in progress  Ornamental fencing  Pavers installation Mitchell Park Library Stonework Begins Library Roofing Started January-February 2013 The Mitchell Park Library Courtyard Photos Mitchell Park Library & Community Center Management Summary January-February 2013 Noteworthy Accomplishments  Drywall substantially complete with interior paint and ceiling work in progress  A replacement mechanical contractor is now on site  Mechanical room rework by the new mechanical subcontractor was done well Current Project Challenges:  Processing the high volume of change documentation and providing direction o Flintco reports submittal of 97 more change order requests is still pending o Weekly review meetings are in progress  The pace of work needs to pick up with more manpower assigned to critical path activities o April is anticipated as a busy month  Disputes over non-compliant work need resolution  Mechanical room work by plumber and electrician remains Safety  Public Safety is a priority outside the fence. No incidents reported to date. Quality Control  City and Special Inspection Work: o Work needs to be ready when inspection is requested o Work should pass inspection the first time  Quality Control Observation Reports: o Open reports for above ceiling work need to be signed off o Courtyard concrete bench finishes successfully repaired o Remedial sliding glass doors work is in progress o Window water testing is complete Costs:  The City issued 40 Change Orders dealing with 370 specific Change Order Requests.  An additional 120 change requests were closed at no cost and 101 were rejected. Mitchell Park Library & Community Center Schedule Milestones January-February 2013 Main Library 1213 Newell Road, Palo Alto Exterior View January-February 2013 2011 PROJECT CONSTRUCTION CONSTRUCTION BEGINS: Summer 2013 ANTICIPATED OPENING: Late 2014 PROJECT TEAM OWNER: City of Palo Alto Public Works ARCHITECT: Group 4 Architecture CONSTRUCTION MANAGER: Nova Partners FOR MORE INFORMATION www.cityofpaloalto.org/gov/topics/pro jects/facilities/library/default.asp KEY ACCOMPLISHMENTS  Completed prequalification of bidders  Plans submitted for building permit  Invitation for bids issued in March UPCOMING ACTIVITIES  Bids to be received in April  Main Library will close and Temp. Main Library will open in early May The Palo Alto Main Library renovation and addition is in the final phase of design “Better Libraries for Palo Alto” projects, funded by the passage of Measure N by voters in 2008. The project incorporates upgrades to the historic building’s structural, electrical and mechanical systems while preserving the integrity of architect Edwards Durrell Stone’s iconic design. The new addition includes a program room and additional restrooms to extend the services of this heavily-used branch. The project targets LEED certification. MEASURE N ENGINEER'S ESTIMATE PROJECTED RESERVES 09010 Cubberley Temporary Library 645,000 619,687 25,313 09005 Downtown Library 4,000,000 5,212,000 4,189,759 1,022,241 09006 Mitchell Park Library & C.C.50,000,000 49,043,000 44,597,041 4,765,959 11000 Main Library 18,000,000 20,100,000 22,660,263 -2,560,263 11010 Art Center Temporary Library 500,000 528,232 -28,232 Bonding and Financing Costs 4,000,000 500,000 500,000 0 BONDED AMOUNT 76,000,000 76,000,000 73,094,982 3,225,018 - - - January - February 2013 Update PALO ALTO LIBRARIES BOND MEASURE N PROJECTS FINANCIAL SUMMARY BUDGET COSTS The combined projects currently have projected cost reserves of just over $3,000,000. Notes on Projected Cost: Temporary Library at Cubberley finished below estimate. Balance is held for move out costs. Downtown Library is finished. Uncommitted Contingency of $228,352 is released.  Mitchell Park Library and Community Center bids were significantly below estimate. Recent Design and C.M. Contract amendments are included. Bond costs were reforecast and the financing budget was reduced to $500,000.  Main Library Budget increased $2,100,000 from financing budget reduction. Council increased Project Scope. Projected Cost includes current estimated cost increases. Projected Cost is based on CPA Public Works estimates. Projected Costs are based on contracts awarded to date with their full contingency authorization. Projected Costs for contracts not yet awarded are based on the current estimate. printed 4/3/2013 City of Palo Alto (ID # 3612) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: Moldaw BMR Amendment Title: Approval of Amendment to the Agreement Between Moldaw Family Housing and City of Palo Alto for the Below Market Rate (BMR) Units at 899 Charleston Avenue to Restructure the Repayment Options From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council approve and authorize the City Manager or designee to execute the amendment to the Agreement between 899 Charleston, a California Nonprofit Public Benefit Corporation, and the City of Palo Alto Requiring Provision of Below Market Rate Dwellings at 899 Charleston Road, to restructure the repayment option. Executive Summary In 2007, the Taube-Koret Campus for Jewish Life (TKJCL) developed its campus, which included the 899 Charleston Project, now known as the Moldaw Family Residences (Moldaw), a 193-unit senior care housing for independent and assisted living and dementia care. As part of the Planned Community (PC) rezone, TKJCL agreed to provide 24 Below Market Rate (BMR) units in Moldaw as a public benefit in which the BMR units receive a substantial discount in the entry fee and monthly fees. Since the opening of the facility, Moldaw’s management team has had considerable difficulty attracting residents for the BMR units, primarily due to the fact that the BMR resident, after five years of occupancy, does not receive back any of the entry fee, while a market-rate resident is allowed a refund on a portion of the entry fee (50% or 90% depending on the amount of the entry fee). The amendment to the BMR Agreement provides a second repayment option with a 50% refund of the entry fee. It is anticipated that this adjustment will better facilitate occupancy of BMR units. Background In September 2006, the City Council approved the Planned Community (PC) application City of Palo Alto Page 2 submitted by the TKCJL for the development of the former Sun Microsystems site. The Oshman Jewish Community Center, T’enna Preschool and Leslie Family Early Childhood & Family Education Department, the Schultz Cultural Arts Hall and the Moldaw Family Residences (Moldaw), formerly known as the 899 Charleston Project, constitute the TKJCL development. Moldaw offers 193 residential units of independent senior living, assisted senior living and dementia care. Of the 193 units, 170 units are independent living, 12 units are used for assisted living and 11 units for dementia care. The independent living residents of Moldaw pay an initial entry fee and monthly payments. The monthly payments allows access to the numerous services the TKJCL has to offer including the variety of activities offered by the Moldaw facility, the exercise facilities at the JCC, and events at the Arts Hall. As a public benefit, TKJCL agreed to provide 24 BMR units in the Moldaw development. As outlined by the executed BMR Agreement (Agreement), the BMR program is designed to provide 12 independent living units and 12 assisted living units. All 24 units are one bedroom units and are identified in the Agreement. The intent is that those BMR residents would reside in the independent living units until they were unable to live independently and that their unit would transition into an assisted living unit as part of the “aging in place” model. Discussion Moldaw began operations in 2007. From the inception, it was difficult to attract BMR residents for the units. Despite local and regional marketing efforts by Moldaw to advertise the BMR units, they are having difficulty finding residents for the BMR units. Currently, only 7 of the 24 BMR units are occupied. A number of factors have contributed to the high BMR vacancy rate: 1. BMR Amortization Rate - In the BMR program, the entry fee is amortized over a 60 month period. Every month, 1/60th of the entry fee is deducted and non-refundable. Therefore after the 60 month term, if the BMR unit is transferred, the BMR resident would not receive any of the entry fees back. If the unit is transferred prior to the end of the 60 month term, a pro-rated amount would be returned to the resident. In contrast, a market rate resident is offered two additional options: one with a 50% or guaranteed return on the entry fee and one with a 90% return on the entry, regardless of length of occupancy. For example, a BMR resident pays an entry fee of $250k and a market rate resident pays an entry fee of $500,000. After five years, the BMR resident would not receive any of their entry fee as a return while the market rate resident would receive a minimum return of $450,000. While there are a number of Moldaw amenities that were attractive to a potential BMR resident, the potential of not City of Palo Alto Page 3 recouping any of the entry fee after five years was an overriding consideration. 2. Housing Market Decline – Another factor in the high vacancy rate was the housing marking decline in 2008. This has not only affected the BMR units but the market rate units as well. The vacancy rate of the market rate units is not as high as the BMR units but higher than initially projected. With the market decline, many prospective BMR residents decided to remain in their current living conditions rather than relocating. 3. BMR Asset Requirement - In addition, some senior residents have been interested in the BMR units but were determined to be not eligible. To be eligible for a BMR unit, the household must meet certain income requirements. While the senior household may meet the annual income requirements, the BMR program guidelines also have a maximum asset limit. The program requires that the household assets cannot exceed twice the amount of the unit’s entry fee. Even with the market decline, some residents had gained a substantial amount of equity in their residence that they exceeded the City’s maximum asset limit. Amendment to the BMR Agreement Because of the concerns about the vacancy rate of both the BMR and market rate units, Moldaw staff met with PAHC and City staff to discuss possible options to address the issue. From the discussions, both parties agreed that: a) the BMR Amortization Schedule needed to be revised and b) there needed to be some flexibility in managing the BMR units. a. Amortization Schedule In discussion with the Palo Alto Housing Corporation (PAHC), administrators to the BMR units, and Moldaw, staff believes the biggest barrier in attracting residents to the BMR units is the 60 month amortization rate. In response, Moldaw has offered to provide a second amortization option that offers a lower discounted entry fee rate, 30% (instead of the current 47% discount) but guarantees a minimum 50% return of the entry fee to the BMR resident when the unit is transferred. b. BMR Unit Flexibility In addition not being able to occupy the BMR units, Moldaw was finding that there is a greater demand for market rate one bedroom units than the two and three bedroom units. However, all the market rate one bedroom units are occupied. In order to meet their occupancy requirements with their other lenders, Moldaw approached the City about possibly revising the Agreement to move from “fixed” BMR units to “floating” units. City of Palo Alto Page 4 Therefore, the amendment will revise the following sections of the Agreement: 1. 60 month amortization. The original agreement provided a 47% discount from the market rate fees with the 60 month amortization schedule for the 24 BMR units. The agreement will be amended to offer the BMR resident a choice of one of two plans: a. A discount of 47% from the initial market rate Entry Fee with a 60 month amortization term. A prorated share of the Entry Fee will be deducted for each month of occupancy. After 60 months of occupancy, the BMR resident does not receive back any of the original Entry Fee; or b. A discount of 30% from the market rate fee but with a 50% refundable plan. The entry fee would be amortized by 2% over 25 months but the BMR resident is guaranteed a 50% refund on the entry fee. 2. Floating BMR units. To provide greater flexibility to Moldaw, staff proposes to revise the Agreement to have the 24 BMR units be “floating” instead of “fixed”. The Agreement will always require that at least 21 of the BMR units be one bedroom units but no longer shall there specific residences associated with the BMR units. The remaining 3 BMR units will be two bedroom units for the possibility of shared living situations. All other provisions in the Agreement and Summary shall remain in full force and effect. The public benefit of the BMR units is preserved through the 30% discount. Although the 30% discount is less than the original 47% discount, with the second amortization option, the BMR resident is guaranteed a 50% refund on the entry fee. Current BMR Entry Fees range from $238,000-$398,000. With the new amortization plan, a BMR resident would receive back a minimum of approximately $119,000-$198,000 as compared to the current plan where the BMR resident does not receive back any of the Entry Fee. Timeline If approved, the amendment will take effect immediately. Resource Impact There is no Resource Impact with this amendment to the existing BMR Agreement. City of Palo Alto Page 5 Policy Implications The actions recommended in this report implement the City’s Housing Element policies and programs supporting the City’s Below Market Rate program. The amendment will better enhance the effectiveness of the BMR program for this development. The 24 BMR units have already been counted towards the City’s Regional Housing Needs Allocation (RHNA) requirements when the project was entitled. This amendment does not affect the City’s RHNA numbers. Environmental Review On September 25, 2006, An Environmental Impact Report (EIR) was certified for the TKJCL development. The amendment does not trigger any CEQA review. Attachments:  Attachment A: First Amendment to BMR Agreement (PDF) This Document is Recorded for the Benefit of the City of Palo Alto and is Entitled to be Recorded Free of Charge in Accordance with Section 6103 of the Government Code After Recordation, Mail to: OFFICE OF THE CITY ATTORNEY 250 Hamilton Avenue Palo Alto, CA 94301 FIRST AMENDMENT TO THE AGREEMENT BETWEEN 899 CHARLESTON, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION AND CITY OF PALO ALTO REQUIRING PROVISION OF BELOW-MARKET -RATE DWELLINGS AT 899 CHARLESTON ROAD, PALO ALTO, CALIFORNIA This First Amendment ("First Amendment") to the Agreement titled above is made and executed this ~ day of MRtrC)/ , 2013 by and between the City of Palo Alto, a municipal corporation of the State of California ("City") and 899 Charleston, a California nonprofit benefit corporation ("899 Charleston"). RECITALS A. The Agreement was entered into on June 13, 2007 between the City and 899 Charleston and recorded on July 16, 2007 to set out the Below Market Rate ("BMR") public benefits of the 899 Charleston project for seniors developed as part of the Taube-Koret Campus for Jewish Life ("TKCJ L"); and B. 899 Charleston is required to set aside 24 one bedroom BMR units, but despite extensive marketing efforts has succeeded in selling only 10 of these in the last 7 years, and only 8 are currently occupied; and C. The City and 899 Charleston agree that changes in the administration of these units should result in more units being occupied, a benefit to BMR seniors seeking housing as well as to 899 Charleston. 1 MaCintosh HD: Users:charles: Desktop:Amend-1.agmt. doc NOW, THEREFORE, the parties hereto mutually covenant and agree as follows: 1. Paragraph 6 of the 899 Charleston Road Summary of Below Market Rate Program Agreement ("Summary") attached to the Agreement is hereby amended to read as follows: 6. Location and Physical Description of the 24 BMR Units: 899 Charleston shall have flexibility in using units in different locations for BMR units at different times, provided that at all times 24 units are either occupied BMR units or available as BMR units. Of these 24 BMR units, at least 21 units at all times shall be one bedroom units. To accommodate shared living situations and to further increase affordability, 899 Charleston may designate up to three BMR units as two bedroom units, provided at least 21 BMR units remain designated as one bedroom units. If the City determines that any of the three BMR units not designated as one-bedrooms are not marketable to BMR applicants, the City shall notify 899 Charleston in writing that it would like to re-designate such units as one bedroom units and 899 Charleston shall as soon as reasonably feasible reserve the requested number of one bedroom units for use as the BMR units. 2. Paragraph 7 of the Summary is hereby amended to read: 7. Discount for BMR Units: All 24 of the BMR units shall be offered for sale 'under one of two plans: (a) Plan A. A discount of 47% from the initial market-rate Entry Fees, but these BMR residents' Entry Fees will be amortized over 60 months with a prorated share of the Entry Fee deducted for each month of occupancy. Thus, after 60 months of occupancy, the BMR resident will not receive back any of the original Entry Fee. (b) Plan B. A discount of 30% from the initial market-rate Entry Fees, but these BMR residents' Entry Fees will be subject to a 50% refundable plan. The plan, similar to the 50% refundable plan for market rate units, amortizes down to a minimum of a 500/0 rebate over 25 months (2.00% per month). 3. This First Amendment and other provisions of the Agreement and Summary, which shall remain in full force and effect, are binding on the property described in Exhibit A attached hereto. [signature page to follow] 2 Macintosh HD:Users:Charles:Desktop:Amend-1.agml.doc IN WITNESS, WHEREOF, the parties hereto have caused this Amendment to be executed on the day and year first written above. CITY OF PALO ALTO, a California municipal corporation By: ________________________ _ Name: ----------------------- Title: ------------------------ Date: ______________________ __ APPROVED AS TO FORM: Cara Silver, Sr. Assistant City Attorney APPROVED AS TO CONTENT: Curtis Williams, Director of Planning and Community Environment 3 899 CHARLESTON, a California nonprofit public benefit corporation .... ,~I J By: {?\~?0~ Name: LA ~ Y jV1.4 R ;! ~' Title: BOARD 1:t1?/£S'I[}/21V7 MeLO/l-VV /<15sI0frll/c.~ )to Date: /'--1/7 I? c 1--1 CD, '2013 * fj99 CHtCJ(eL/rS7oN ~ Macintosh HD:Users:charles:Desktop:Amend-1.agmt.doc STATE OF CALIFORNIA ) S ~\A, \Fr &lI\u'X (j) ) ss: COUNTY OF SANTA-CLARA ), On Mdtrvh 0, ?-v1.3 ,before me, -re:ieJL kvJ!U' ,Notary Public, personally app~ared 1-(1 II'(~ Md O?5 .' who proved to me o'n the basis of satisfactory evidence to be the person whose name is subscribed fo the within instrument and acknowledged to me that he/~executed the same in his/hef authorized capacity, and that by his/t:ter-signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Signature <II Legal Description A CONDOMINIUM COMPRISED OF REAL PROPERTY situated in the City of Palo Alto, County of Santa Clara, State of CaJifomiB~ described·as follows: PABCELONE: Unit 899, as said unit is defined in that certain document entitled "Declaration of Conditions Covenants, and Restrictions of Taubu KoretCampus for Jewish Life. a Condominium Project", whlch shall hereafter be referred to as the "Declaration", said Declaration recorded At ~ US t I ~ • 2007 lIS Document No. " 5 'i"t s=T7 • Official Records; said 1IIli! being com sed oJ those areas designated 1&899" on that certain Condominium Plan entitled "Taube- Korct Campus for Jewish Life Condominiwn Plan", and attached as Attaclunent "B" to· the Declaration and which shall hereafter be referred to as the "Plan", as wen as the "Subdivided Units" as same are defined in the Declaration and shown on the PJan, said Unit beinS situated on Parce1 1 as said parcel is shown upon Chat certain Parcel Map filed in the Office of the Recorder, County of Santa Clara, State of Cali fomi a on July 16th, 2007, in Book 816 of Maps, at pages 16 and 17, Santa Clara County Records. EXCEPTING and RESERVING THEREFROM, for the benefit of the owners of "l1nit ALSJCCJ' and "the Associationn, and their successor's in interest, rights and easements for utilities, maintenance, construction, support, encroaclunents and other purposes over, under, upon and through said Unit 899 as such easements and rights are described and defined in the Declaration. PARCEL TWO: A 42% undivided interest in the Common Area as defined in the Declaration and depicted on the Plan. EXCEPTINO AND RESERVING FROM THE COMMON AREA THE FOLLOWING: I. 2. 3. 4. Unit ALSICC 8Ild Unit 899 as depicted on the Plan and defined in the Declaration. Easements for access, ingress, egress, support, utilities and other rights, as said easements and rights are defined in the Declaration. Exclusive Use Areas as defined in the Declaration. Exclusive Usc Area Improvements as defined in Ihe Declaration B-J -. ------,. --- PARCEL THREE: Easements and rights, appwtenant to . Parcel One above, for utilities, maintenance, construction, support, encroachments and other purposes over, under, upon and through said Unit ALSJCC and the Common Area as said easements and rights are described and definedin the Declaration. PARCEL FOUR: Those certain Exclusive Use Common Areas appurtenant to Parcel One as defmed in the Declaration and depicted on the Condo Plan as "EUCA "899". PARCEL FIVE: Exclusive fee ownership of those structures and improvements defined as Exclusive Use Area Improvements, in the Declaration and located or built upon those certain Exclusive Use Common Areas appurtenant to Parcel One as defined·jn the Declaration and depicted on the Condo Plan as "EUCA "899". B·l City of Palo Alto (ID # 3620) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: Letter of Agreement Between Palo Alto Art Center Foundation and City of Palo Alto Title: Letter of Agreement Between Palo Alto Art Center Foundation and City of Palo Alto Memorializing Ongoing Financial Support of Children's Programs at the Palo Alto Art Center From: City Manager Lead Department: Community Services Recommendation Staff recommends that Council approve a Letter of Agreement between the Palo Alto Art Center Foundation and the City of Palo Alto (Attachment A) and an associated Budget Amendment Ordinance (Attachment B) to memorialize the ongoing financial support the Foundation provides annually in the amount of $81,000 to support children’s educational programs at the Palo Alto Art Center. Executive Summary The City of Palo Alto and the Palo Alto Art Center Foundation (the Foundation) wish to mutually cooperate and support each other, as they have for many years, to enhance and sustain the capacity of the Palo Alto Art Center (the Center) to develop and provide art education opportunities and related services to the Palo Alto community. This Letter of Agreement supports the previously adopted public/private partnership agreement between the City and the Foundation and memorializes an annual payment of $81,000 (as outlined in this agreement, $72,029.15 only for this fiscal year) to support children’s programs at the Palo Alto Art Center for the entire community. Background The Palo Alto Art Center Foundation (Foundation) has played an integral role in the support and operation of the Palo Alto Art Center since its inception in 1973 (note that from 1973 to 2000 the organization was identified as the Palo Alto Cultural Center Guild). The mission of the Foundation is to expand the reach and impact of the Palo City of Palo Alto Page 2 Alto Art Center through fundraising and advocacy. In 2010, the public/private partnership between the Center and the Foundation was memorialized in an agreement for mutual cooperation and support (CMR 350:10). Discussion Historically, the Foundation has supported the Center in the area of children’s programs: the Project LOOK! school tour program; family days; Children’s Fine Arts class program. The Foundation has also historically made two annual payments to support these programs: one in the amount of $20,000 and one in the amount of $18,000. With this letter, the Foundation and Center intend to memorialize these annual support payments and expand the support by $43,000 annually to include another important children’s program: the Cultural Kaleidoscope artist-in-the-schools program. Resource Impact Funding from the Foundation was not anticipated during the budget planning process in Fiscal Year 2013. Included in this staff report is a budget amendment ordinance for $72,029 (Attachment B) to acknowledge the donation and increase the budget for Art Center temporary staff in support of children’s educational programs in the Fiscal Year 2013 budget. Ongoing annual funding of $81,000 as a result of the new agreement will be included in the Fiscal Year 2014 Budget. Attachments:  Attachment A - Letter of Agreement Between the Art Center Foundation and City of Palo Alto (DOCX)  Attachment B - BAO - Art Center Donation (DOCX) 130220 dm 00710169 February 20, 2013 Deborah Pappas, President Board of Directors Palo Alto Art Center Foundation c/o Palo Alto Art Center 1313 Newell Road Palo Alto, CA 94303 RE: Public-Private Partnership Dear Deborah: The City of Palo Alto and the Palo Alto Art Center Foundation wish to mutually cooperate and support each other, as they have for many years, to enhance and sustain the capacity of the Palo Alto Art Center (the “Center”) to develop and provide art education opportunities and related services to the Palo Alto community. In 2010, the City and Foundation signed a public-private partnership agreement to memorialize their understanding and agreement regarding their long-standing partnership and also identify their separate and joint roles and responsibilities within the partnership. By this letter, the City and Foundation intend to further memorialize their understanding and agreement regarding the nature and extent of the Foundation’s on-going financial support of the children’s programs at the Center. In order to enhance the impact of those programs, the City acknowledges and understands that the Foundation will make an annual donation of $81,000 in two equal installments of $40,500 on or before July 1 and December 31 of each fiscal year subsequent to fiscal year 2013 in order to defray costs of the children’s programs at the Center. For fiscal year 2013, the City would note that the Foundation has made a payment of $72,029.15 to be applied to the children’s programs at the Center. For fiscal year 2014, the City wishes to inform the Foundation that it intends to use the $81,000 amount to support the Project LOOK!, Children’s Fine Art, and Cultural Kaleidoscope programs at the Center. 130219 dm 00710169 The City wishes to acknowledge the generous donation of the Foundation for fiscal year 2014 and its invaluable assistance provided to City staff over the years in connection with the children’s programs offered at the Center. Sincerely, James Keene City Manager cc: Greg Betts, Director, Community Services Department Karen Kienzle, Palo Alto Art Center Director Grant Kolling, Senior Assistant City Attorney On behalf of the Palo Alto Art Center Foundation, I have read and understand, and agree to, the provisions of the understanding and agreement between the City and the Foundation, as stated above. Date: Palo Alto Art Center Foundation By: Title: Attachment B ORDINANCE NO. XXXX ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE COMMUNITY SERVICES DEPARTMENT BUDGET FOR FISCAL YEAR 2013 TO PROVIDE AN APPROPRIATION OF $72,029 FOR CHILDREN’S PROGRAMS AT THE PALO ALTO ART CENTER. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 18, 2012 did adopt a budget for fiscal year 2013; and B. The Palo Alto Art Center has worked collaboratively with the Community Services Department on educational art programs for the community since 1973; and C. This partnership was formalized in an agreement in 2010; and D. In financial support of this agreement, the Palo Alto Art Foundation has donated a total of $72,029 for Fiscal Year 2013; and E. The City’s Community Service Department will use this funding to support children’s educational art programs; and F. City Council authorization is needed to amend the 2013 budget as hereinafter set forth. SECTION 2. Grant revenue totaling Seventy Two Thousand and Twenty Nine Dollars ($72,029) is hereby received, and appropriated as such in the Community Services Department budget. SECTION 3. The Temporary Salaries budget of the Community Services Department is hereby increased by Seventy Two Thousand and Twenty Nine Dollars ($72,029). SECTION 4. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. Attachment B SECTION 5. The actions taken in this ordinance do not constitute a project requiring environmental review under the California Environmental Quality Act (CEQA). SECTION 6. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: _________________________ City Clerk __________________________ Mayor APPROVED AS TO FORM: _________________________ Senior Assistant City Attorney __________________________ City Manager __________________________ Director of Community Services __________________________ Director of Administrative Services City of Palo Alto (ID # 3694) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: RHNA Agreement with County Title: Approval of Letter to Association of Bay Area Governments (ABAG) to Transfer 200 Housing Units of Regional Housing Allocation (RHNA) from City of Palo Alto to Santa Clara County for the 2014-2022 Planning Period From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council authorize the Mayor to sign the attached letter (Attachment A) to the Association of Bay Area Governments (ABAG), concurring with Santa Clara County’s agreement to allow the transfer of 200 “moderate-income” housing units from the City to the County for the 2014-2022 Regional Housing Needs Allocation (RHNA). Background On July 25, 2012, the Association of Bay Area Governments (ABAG) notified cities and counties in the Bay Area of the proposed Regional Housing Needs Assessment (RHNA) for the 2014-2022 planning period. The City of Palo Alto’s RHNA allocation is proposed for 2,179 housing units. On September 11, 2012, the City requested that ABAG reduce the City’s allocation, based on several concerns. One of the City’s arguments was that the allocations neglected to reflect the extensive development and housing planned for the Stanford campus in Santa Clara County and the resultant low allocation (77 units) for the County. ABAG denied the revision request, after which the City appealed the decision on February 12, 2013 (Attachment C), requesting a reduction of 350 units from the City’s allocation. City staff has simultaneously been working with Santa Clara County staff to attain a voluntary transfer of units from the County to the City. County staff has been coordinating the effort with Stanford, whose representatives were concerned that any reallocation could affect their General Use Permit flexibility. On March 29, 2013, the County informally indicated to City staff that they would support a transfer of 200 “median-income” units from the City to the County (Attachment B). City staff noted that the appeals hearing was set for April 1 and that the City of Palo Alto Page 2 Council would need to approve the agreement. The ABAG RHNA Appeals Committee met on April 1 and denied the City’s request for the 350 unit reduction, but recommended the City and County continue to pursue a cooperative transfer. Discussion Staff believes that the County offer to accept a transfer of 200 “moderate-income” (80-120% of County median income) units from the City’s RHNA allocation is reasonable and should be accepted. The basis for the “moderate-income” designation is that Stanford, as a condition of its General Use Permit, already contributes substantial funding for affordable housing projects that support “low” and “very-low” income households. Affordable housing projects in Palo Alto have used the Stanford contributions as a key source of funding on more than one occasion. Stanford indicates that units anticipated for construction during the planning period are likely to meet the “moderate-income” household criteria. The City’s resultant allocation for the 2014-2022 planning period would be reduced to a total of 1,979 housing units (as compared to 2,860 units for the current planning period). The designation of the units to the “moderate-income” (80-120% of median County income) category is helpful to the City’s apportionment of income levels, as “moderate-income” housing is historically the most difficult for the City to attain. Upon approval by the Council, the County and City would convey their agreement to ABAG in advance of its April 19 transfer deadline. ABAG staff has previously indicated that it would support such an agreement between the two jurisdictions. The Executive Board for ABAG is expected to finalize the RHNA numbers in May. Policy Implications The agreement will help the City to develop a compliant housing element for the 2014-2022 planning period, and will be consistent with other City goals to address housing element policies. Environmental Review No environmental review is required for the transfer of units. Environmental review will be required for the 2014-2022 housing element. Attachments: City of Palo Alto Page 3  Attachment A: Letter to ABAG Requesting RHNA Transfer (PDF)  Attachment B: March 29, 2013 County E-Mail re: City of Palo Alto RHNA Transfer (PDF)  Attachment C: April 1, 2013 Appeal Review Form by ABAG (PDF)  Attachment D: February 12, 2013 City of Palo Alto Appeal to ABAG (PDF) City of Palo Alto Department of Planning and Community Environment Planning 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 650.329.2441 650.329.2154 Transportation 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 650.329.2520 650.329.2154 Building 285 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 650.329.2496 650.329.2240 April 9, 2013 Ezra Rapport, Executive Director Association of Bay Area Government Joseph P. Bort Metro Center P.O. Box 2050 Oakland, CA 94607-4756 Re: Transfer of RHNA Allocation from City of Palo Alto to Santa Clara County Dear Mr. Rapport: The City of Palo Alto requests that the Association of Bay Area Governments (ABAG) accept the transfer of 200 “moderate-income” housing units from the City’s RHNA allocation to Santa Clara County for the 2014-2022 planning period, in agreement with the County’s concurrence to ABAG. The City sincerely appreciates the cooperation and accommodation of Santa Clara County staff, Supervisor Joe Simitian, and Stanford University in reaching this agreement. We also thank ABAG staff, particularly Gillian Adams and Hing Wong, for their help and support. The City looks forward to ABAG’s Executive Board adoption of the final RHNA allocations in May, reflecting the City-County adjustment. If you have questions or need additional information, please contact Curtis Williams, the City’s Director of Planning and Community Environment, at (650) 329-2321 or curtis.williams@cityofpaloalto.org. Sincerely, H. Gregory Scharff Mayor cc: Joe Simitian, Supervisor, County of Santa Clara Kirk Girard, Planning Manager, County of Santa Clara Palo Alto City Council James Keene, City Manager, City of Palo Alto 1 Betten, Zariah From:Girard, Kirk <kirk.girard@pln.sccgov.org> Sent:Friday, March 29, 2013 12:09 PM To:Williams, Curtis; Aknin, Aaron Cc:Carter, Charles S; Gonzalez, Nash; Phillips, William T; Palter, Catherine; McNair, Whitney; Ross, Steve; Bill Shoe (bill.shoe@pln.sccgov.org) Subject:RE: City of Palo Alto RHNA allocation appeal Curtis and Aaron, Based on our internal discussions and information provided by Stanford University, we would not object to an increase in our RHNA allocation for the 2014-2022 Housing Element planning period of 200 moderate income units. This is the number of moderate income RHNA qualified housing units we believe can be reasonably expected to be constructed on unincorporated Stanford lands during the Housing Element planning period of 2012 to 2022. The 200 moderate income unit estimate is based on a rough extrapolation of the 75 RHNA housing units currently planned within Stanford’s three to five year capital improvement time frame (see correspondence below) to the end of the Housing Element planning period. As you know, the projected 200 RHNA qualified units will be a small fraction of the total number of housing units likely to be constructed during the planning period on the Stanford campus. The majority of housing production will be dorm units, which do not qualify as housing units for RHNA purposes. To illustrate this point, out of the 529 housing units planned for construction within the next three to five years, only approximately 75 of these units will qualify as RHNA housing units. We sincerely hope, a transfer in this amount will be satisfactory to Palo Alto and is sufficient to avoid a formal ABAG RHNA appeal process. If so, we’re prepared to make our position known to ABAG in whatever form would be most helpful to Palo Alto. Please let us know. Thank you. Kirk Kirk Girard, P.E. Planning Manager County of Santa Clara 70 West Hedding Street East Wing, 7th Floor San Jose, CA 95110 408-599-5772 kirk.girard@pln.sccgov.org 2 From:McNair, Whitney [mailto:wmcnair@stanford.edu] Sent:Thursday, March 28, 2013 9:26 PM To:Girard, Kirk Cc:Carter, Charles S; Gonzalez, Nash; Phillips, William T; Palter, Catherine Subject:RE: City of Palo Alto RHNA allocation appeal Kirk, Stanford University supports the City of Palo Alto and the County of Santa Clara in their efforts to come to agreement about the transfer of units from the City to the County for the 2014-2022 Regional Housing Needs Allocation (RHNA) planning period. Stanford has no objections to a transfer of units as long as it does not change Stanford’s entitlements under the 2000 General Use Permit or provide new or changed conditions or requirements relating to these entitlements. The 2014 Stanford University Capital Plan (Cap Plan) includes a plan for construction of three new housing projects. No further housing projects are being contemplated at this time. The Cap Plan proposes construction of 528 student units and 1 faculty/staff unit in the following projects: ·Manzanita (125 undergrad units, 1 grad unit, 2 visiting scholar units, and 1 faculty/staff unit) ·Lagunita (200 undergrad units) ·Schwab expansion (200 grad student housing units) The design of the Schwab expansion is in the preliminary stages. The unit design may be similar to the existing Schwab Residential Center, whereby two units share one kitchen, or it may be designed as individual studios. The unit count may range between 150 –200 units. Conservatively, there may be 150 units designed so that two units share one kitchen for a total of 75 RHNA qualified units. Manzanita has 1 faculty/staff unit, for a total of 76 RHNA qualified units proposed in the Cap Plan. The remainder of the units are being designed as dorm rooms with a common kitchen facility, which are group quarters. No further housing projects are proposed at this time. I hope this information helps you in your discussions with the City of Palo Alto. Please let me know if you need any further information. Sincerely, Whitney Whitney McNair, AICP, LEED AP |Associate Director STANFORD UNIVERSITY |Land Use and Environmental Planning 3160 Porter Drive, Suite 200 | Palo Alto, CA 94304 (650) 721-2749 –office | (650) 799-4380 –mobile | wmcnair@stanford.edu From:Girard, Kirk [mailto:kirk.girard@pln.sccgov.org] Sent:Tuesday, March 26, 2013 4:55 PM To:McNair, Whitney Cc:Carter, Charles S; Gonzalez, Nash Subject:RE: City of Palo Alto RHNA allocation appeal Hi Whitney, Supervisor Simitian expressed his interest in a practical outcome for the County, Stanford and Palo Alto. His views seem to reinforce an approach we had discussed earlier where a Palo Alto-to-County RHNA transfer would be no greater than 3 the number of “qualified” housing units reasonably expected to be constructed on unincorporated Stanford lands during the Housing Element planning period (2012 to 2022). By “qualified,” I’m referring to Housing and Community Development (HCD) definitions for housing units (bedrooms w/kitchen) and the classification of the units by RHNA affordability level. We have discussed our position with Palo Alto staff that we cannot accept a RHNA transfer of very-low or low income units. As you know, the Stanford General Use Permit (GUP) allows Stanford to provide affordable housing unit on the Stanford campus or make an appropriate cash payment in-lieu of providing the housing unit. In-lieu cash payments provide funding for affordable housing within a six- mile radius of the Stanford campus in surrounding local government jurisdictions. HCD rules preclude us from “counting” affordable units constructed with in-lieu funds outside of Santa Clara County’s jurisdiction. Even though the in-lieu program does not result in “countable” units within the County, it has been very successful in creating affordable housing. We don’t want to disrupt the in-lieu program and we don’t want to place a burden on the County to plan for additional affordable units elsewhere in the County should Stanford continue to make use of the in-lieu program. We believe Palo Alto staff understands this position, even though their current ABAG RHNA appeal is silent on the affordability categories of the proposed transfer. We also have discussed with Palo Alto staff your and our interest in avoiding specifying the location of the construction of any housing units accepted with a RHNA transfer. We understand Palo Alto has based their 350 unit transfer request to ABAG on the units planned on the Quarry/Arboretum (200 units) and Quarry/El Camino (150 units) sites but we do not want to inadvertently impose limitations on the future uses of these sites or restrict the flexibility the GUP provides for locating new housing construction on the campus. Given this background, we have two fundamental questions: Does Stanford concur with the general approach that a RHNA transfer would be no greater than the number of “qualified” housing units reasonably expected to be constructed on unincorporated Stanford lands during the Housing Element planning period (2012 to 2022)? If so, what do you anticipate to be the reasonably expected number of moderate and above moderate housing units to be constructed from 2014 to 2022? If you tell us the type of housing, we can do the conversion into HCD “qualified” units. We are prepared to write a letter to ABAG effectively saying that the County of Santa Clara does not object to the Palo Alto ABAG appeal and would be willing to accept an increase in the amount of moderate and above moderate housing units equal to the anticipated construction levels you provide. I know Palo Alto is eager to get a response from the County on this issue. ABAG is scheduled to begin hearing appeals at their April 1st meeting. I understand their deliberations are likely to extend into subsequent meetings but time is now of the essence. Please give me a call if you have any questions. Thank you. Kirk Kirk Girard, P.E. Planning Manager County of Santa Clara 70 West Hedding Street East Wing, 7th Floor San Jose, CA 95110 408-599-5772 kirk.girard@pln.sccgov.org 4 From:McNair, Whitney [mailto:wmcnair@stanford.edu] Sent:Monday, March 11, 2013 5:00 PM To:Girard, Kirk Cc:Carter, Charles S Subject:City of Palo Alto RHNA allocation appeal Kirk, I’m checking in to see how your meeting with Joe Simitian went on Thursday and to see what position the County may take on the City of Palo Alto’s appeal of their RHNA allocation. I can make myself available any time tomorrow to talk if that is easier than an e-mail update. Thanks, Whitney Whitney McNair, AICP, LEED AP |Associate Director STANFORD UNIVERSITY |Land Use and Environmental Planning 3160 Porter Drive, Suite 200 | Palo Alto, CA 94304 (650) 721-2749 –office | (650) 799-4380 –mobile | wmcnair@stanford.edu 1 Regional Housing Need Allocation Appeal Review Form Jurisdiction: City of Palo Alto Appellant: H. Gregory Scharff, Mayor (represented by Curtis Williams, Director of Planning and Community Environment) Date: February 12, 2013 Jurisdiction Background Information: Size (in square miles): 23.88 Effect of Methodology Factors: Households: 26,493 (2010 Census) RHNA Performance: ‐235 PDA Growth / (Share): 226 (0.17%) Employment: 525 Non‐PDA Growth / (Share): 1,763 (3.13%) Transit: 149 Subject to 40% Minimum? No 2007‐2014 RHNA: 2,860 Proposed Revision: The City of Palo Alto asserts that there was a misapplication of the RHNA methodology, that ABAG staff failed to consider information from the RHNA Factor Survey about the “housing needs generated by the presence of a university campus within a jurisdiction,” and an unforeseen change in circumstances. The City requests that 350 units be shifted from its RHNA to Santa Clara County’s RHNA. Issues/ Criteria Identified in the Appeal: Appeal Evaluation: 1. Stanford University's General Use Permit allows up to 1500 residential units to be built on Stanford lands within the RHNA housing element timeframe. Specifically, there are plans for approximately 350 planned units on two sites on Quarry Road just west of El Camino Real. While these units have not been otherwise assigned to Palo Alto, they would be very consistent with goals of SCS. 1. The RHNA is not site specific. The availability of sites for housing in Santa Clara County that would be consistent with the goals of the SCS does not indicate a misapplication of the RHNA methodology. 2. It appears to be an oversight in the designation of PDAs that these sites were not included in the Valley Transportation Authority(VTA) Cores and Corridors PDA and treated as a PDA under the RHNA methodology. The City notes that significant areas of Palo Alto, designated by VTA in the Cores and Corridors PDA have been treated as PDAs for the 2. The Palo Alto portion of the VTA Cores and Corridors PDA was not treated as a PDA for the purposes of RHNA because the City did not agree to designation of the areas as a PDA. Draft RHNA: 2,179 Requested Reduction: 350 Requested RHNA: 1,829 2 purposes of distributing housing units, even though the City did not agree to their designation as PDAs. 3. While it is generally appropriate to focus more intense growth in cities rather than open space or rural unincorporated county areas, these sites identified are different from others in unincorporated areas because they are located in an urban area, near transit, across from shopping, and adjacent to an extensive hospital expansion; Stanford's expansion and housing to support its growth are unique among counties in the Bay Area and ABAG has previously re‐adjusted the allocation between Palo Alto and the County in previous cycles to account for this anomaly; and a tri‐party agreement between Santa Clara County, Stanford University, and the City of Palo Alto precludes the City from annexing these potential housing sites (although the sites are served by the Palo Alto Unified school district). 3. The RHNA is not site specific. The availability of sites for housing in Santa Clara County that would be consistent with the goals of the SCS does not indicate a misapplication of the RHNA methodology. Staff Recommendation: The issues cited by the City of Palo Alto do not meet the requirements of State Housing Element law, which would warrant a revision.  The information provided by the City does not demonstrate that ABAG failed to apply the RHNA methodology correctly or that an unforeseen change occurred. Staff recommends that the Appeal Committee deny the proposed revision and supports the continued efforts of the City of Palo Alto, Santa Clara County, and Stanford University to reach an agreement about transferring the identified units prior to April 19, 2013. February 12, 2013 Ms. Gillian Adams, Regional Planner Association of Bay Area Government Joseph P. Bort Metro Center P.O. Bo x 2050 Oakland, CA 94607-4756 Ci!yof Palo Alto Office of the Mayor and City Council Re: City of Palo Alto Appeal of Adopted RHNA Methodology for the 2014-2022 Housing Cycle Dear Ms. Adams: We are in receipt of ABAG's Nove mber 15'h letter, in response to the City of Palo Alto request for a reduction to the Regional Housing Needs Assessment (RHNA) jurisdictional allocation for the 2014-2022 housing cycle. This letter denied the City of Palo Alto's request, briefly outlined the reasons for denial, and provided the schedule and findings necessary to appeal this determination. The required appeal template was also emailed to the City at a later date. With that in mind, pursuant to Government Code §65584.05, the purpose of this cove r letter and attached completed appeal template is to officially appeal the adopted RHNA Methodology determination for the City of Palo Alto. The following outlines the criteria for which this appeal is based. As noted in your letter, Government Code §65584.05 provides the following grounds for appeal: 1. ABAG failed to adequately consider the information submitted by the City of Palo Alto in the survey ABAG"administrated in January '1012, or a significant and unforeseen'change'in circumstances has occurred in the City of Palo Alto that merits a revision of the information; or 2. ABAG failed to determine its share of the regional housing need in accordance with the information described in, and the methodology established pursuant to Section 65584.04. The City of Palo Alto's "Request for Revision" letter outlined several reasons why the City of Palo Alto's housing allocation was overstated. The following appeal focuses on one of these items. The City of Palo Alto's grounds for appeal are as follows: The proposed RHNA allocation assigns 77 housing units to the County of Santa Clara (unincorporated), although Stanford University's General Use Permit with the County of Santa Clara County allows and plans for up to 1,500 residential units to be built on Stanford lands within the RHNA housing element timeframe. 1. Specifically, approximately 350 planned units on two sites on Quarry Road just west of EI Camino Real appear appropriate to include somewhere in the housing analysis in this timeframe (table and map attached). Indeed, there were active discussions with the property owner(Stanford University) in the recent past about housing development on those sites in connection with its current Medical Center expansion that was approved by the City in 2011. Printed wilh soy-bued ink$ on 100'10 r«ycled paper procen ed without chlorine. P.O. Box 10250 Palo Alto. CA 94303 650.329.2477 650.328.363\ fax Ms. Gillian Adams, Regional Planner Association of Bay Area Government Page 2 of 3 2. While the City acknowledges that these units have not been otherwise assigned to the City of Palo Alto, these two sites are proximate to EI Camino Real and the University Avenue Caltrain station, and would be highly consistent with the objectives of the SCS and sB375. The sites are located very close to developed land located within the City's boundaries. Furthermore, this land is not protected agricultural land, and therefore should not be discounted as a suitable area for growth. 3. It appears to be an oversight in the designation of priority development areas (PDAs) that these sites were not included in the Valley Transportation Authority's (VTA's) "cores and corridors" designation and thereby treated as a PDA under the RHNA methodology (attached map). The City notes that significant areas of Palo Alto, designated by VTA in "cores and corridors," have been treated as PDAs for the purpose of distributing housing units, even though the City did not agree to their designation as PDAs. 4. Lastly, the City of Palo Alto agrees that it is generally appropriate to focus more intense growth in cities rather than on open space or rural unincorporated county areas, and to encourage annexation of unincorporated areas proximate to transit stations and corridors. The Stanford owned lands subject of this appeal present an anomaly, however, in that a) these particular lands are located in an urban area, near transit, across from a vibrant Shopping Center and adjacent to a very extensive hospital expansion; b) Stanford's expansion and housing to support its growth are unique among counties in the Bay Area and ABAG has previously re-adjusted the allocation between Palo Alto and the County in previous cycles to account for this anomaly, and c)-a-tri~party agreement between Santa Clara C-ounty; stanford'UniversitY,-andthe (it yo! Palo ' Alto precludes the City from annexing these potential housing sites (although the sites are served by the Palo Alto Unified school district.). For these reasons, the City believes allocations should be adjusted accordingly. Once again, thank you for the opportunity to appeal the adopted RHNA Methodology for the 2014-2022 Housing Cycle and the City of Palo Alto's allocation. The required appeal template is attached. If you have questions or need additional information, please contact Curtis Williams, the City's Director of Planning and Community Environment, at (650) 329-2321 or curtis.williams@cityofpaloalto.org. Sincerely /J~ ~.l/"\---- H. Gregory Scharff MAYOR Attachments: A. Completed Appeal Template with Attachments Representing City and County Government s of the San Francisco Bay Area o ASSOCIATION OF BAY AREA GOVERNMENTS ABAG 2014-2022 Regional Housing Need Assessment (RHNA) Appeal Request All appeal requests must be received by ABAG Februaryl8, 20l3, 5 p.m. Late submissions will not be accepted. Send requests to Gillian Adams, ABAG RegIonal Planner: GillianA@abaq.ca.aovorP.O. Box 2050. Oakland, CA 94604-2050 Date: 2/13/13 Contact: Curtis Williams Phone: 650-329-2321 APPEAL AUTHORtZED BY: Name: H. Gregory Scharff Jurisdiction: The City of Pato Alto Title: Director of Planning and Community Environment Email: curtls.wllllams@cityofpaloalto.org PLEASE CHECK BELOW: iii Mayor 0 Chair, County Board of Supervisors o City Manager 0 Chief Administrative Officer o Other: ______________ _ BASES FOR APPEAL IGovernment Code Sectton 65584.0S(d))" [!J Misapplication of RHNA Methodology [!J Failure to Adequately Consider Information Submitted in the Survey Regarding RHNA Factors: o Exis ting or projected jobs-housing relationship o Sewer or water infrastructure constraints for additional development o Availability of land suitable for urban development or for conversion to residential use o Land s protected from urban development under existing federal or state programs o County policies to preserve prime agricultural land o Distribution of household growth assumed for purposes of comparable Regional Transportation Plan o Market demand for housing o County-city agreements to direct growth toward incorporated areas of county o L®.of llnits contained.in assisted.housing developments o High housing cost burdens o Housing needs of farmworkers [!J Housing needs generated by the presence of a university campus within a jurisdiction [!J Significant and Unforeseen Change in Circumstances Brief Descrlptton of Basis for Appeal Request and Desired Outcome: 11'1. ~ AHAA ~1Io<o1l<lt\ ... 11 .... 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CI!\IboI"lY •• __ "" ......... ~. List of Supporting Documentation Included In Submittal: 1. Relevant Pages from Stanford University General Use Permit (June 2011) 2. VTA Cores, COrridors, and Station Areas Map for Palo Alto 3. __________________________________________________________ __ ·Per Government Code Section 65584.05(d), appeals to the draft RHNA can only be made by jurisdictions that have prevIously filed a revision request and do not accept the revIsion request findings made by ABAG. Non- Building Cap Category Remaining 1989 GUP Square Foolage Temporary Surge Space Childcarel Community Center Housing Annual Report II. Development Overview TABLE 2 ANNUAL REPORT 10 OTHER SPACE CAPS -PROJECT SUMMARY Maximum Allowable Square Footage 92,229 50,000 40,000 ASA Building Cumulative Cumulative Total Balance Building Permits Approved Permit Approved (sq. ft.) Building Permits Remaining (sq. ft.) (sq. ft.) in Previous ARs Approved (sq. ft.) (sq. ft.) 0 0 92,229 92,229 0 0 0 28,085 28,085 21,915 7,895 0 27,947 28,144 11,856 The 2000 OUP allows for the construction of 3,018 net new housing units on campus, with allocations for faculty and staff, graduate and undergraduate students, and postdoctoral and medical students as shown in Table 3. The OUP identified potential housing sites for students, staff and faculty (Map 3, Appendix A). As with academic/academic support building space, the housing units will be distributed among the 10 devel()pment districts (~ee Table 3). Housing may also be developed on sites other than those shown on Map 3, and the estimated distribution of the type and location of housing among development districts may deviate from the locations described in the 2000 OUP pursuant to 2000 OUP Conditions F.2, F.3, and F.4. As explained under 2000 GUP Condition A (A. I.c, A. I.d, and A.3.b), the square footage of housing units constructed is tracked but does not count toward the 2000 GUP building area cap (see Table C-2, Appendix C). During the AR 10 reporting period, two housing projects (Olmsted Terrace Faculty Homes -File Number 9923, and Olmsted Road Staff Rental Housing -File Number 9792) were approved. For purposes of the housing linkage requirement, as provided in GUP Condition F.8, the housing requirement is counted at the time of the framing inspection. The Olmsted Terrace Faculty Homes and Olmsted Road Staff Rental Housing projects were framed during this reporting period. In addition, two student housing renovation projects resulted in a slight change in housing units. 9 June 2011 I I. Development Overview TABLE 3 ANNUAL REPORT 10 DISTRIBUTION OF RESIDENTIAL DEVELOPMENT ASA Final Framing Allowable 2000 Approved Inspection Development GUPNet Units but Not Pa,t Approved Districtl Additional Unit' Yet Framed CumulaHve2 Unit, Cumulative West Campus Stable Site 372 Faculty/Staff 0 0 0 0 Lathrop 0 0 0 0 0 Foothills 0 0 0 0 0 Lagunlta 195 Faculty/Staff Drlving Range 367 Graduate 0 0 0 0 Searsville Block 125 Undergradl Mayfield/Row Grad Campu, Center 352 Grad.ot. 0 35 1 0 351 Quarry Quorry/Arboretum 200 Postdoe 0 0 0 0 Ouarrv/EI Camino 150 Postdoc Arboretum 0 0 0 0 0 DAPER& Administrative 0 0 0 0 0 East Campu, -Manzanita -Escondido Village 100 Undergradl -Crothers Graduate 2 -Olmsted Rd Rental 1,043.Graduate 1-25 --Olmsted Terrace 75 Faculty/Staff 39 Ea,t Campu, Sublotal 0 937 66 1003 San Juan Lower Frenchman's 18 Faculty/Staff Gerona 12 Faculty/Staff 0 0 4 4 Mayfield 9 Faeulty/Staff 717 Dolores San Juan Subtotal 0 0 4 4 Total (l,OI8 AlloWeU' 0 1288 70 11,358 1. Housing may be developed on other sites and development may vary from the estimated distribution with regard to citller tllC type (student, postdoctoral, or faculty/stafi) or amount of housing on the site (2000 aup Conditions F.2, F.3, and FA). Redistribution occurred in AR 6. 2. Cumulative totals include results from previous annual reports. Sec Appendix C and/or previous annual reports for more delailerl background on these cumulative totals. Annual Report 11 June 2011 Fiscal Year Annual Report I (2000-0 I) Annual Report 2 (2001-02) Annual Report 3 (2002-03) Annual Report 4 _(2003-04) Annual Report 5 (2004-05) Annual Report 6 (2005-2006) Annual Report 7 (2006-2007) Annual Report 8 (2007-2008) Annual Report 9 (2008~009) Annual Report 10 (2009-200 I 0) KEY TO MAP C-2 Appendix C Cumulutive Projects ANNUAL REPORT 1 THROUGH ANNUAL REPORT 8 CUMULATIVE HOUSING PROJECTS Map Housing Square Annual No.* Project Units Footage Units I Mirrielees -Phase I 102 0 102 2 Escondido Village Studios 5 & 6 281 139,258 3 M irrie lees -Ph ase II 50 0 331 Branner Student Housing Kitchen 0 1,596 N/A None N/A N/A 0 N/A None N/A N/A 0 N/A None N/A N/A 0 Drell l-iouse (conversion to -I (-906) academic) 579 Alvarado I 3,258 (-8) Casa Zapata RF Unit 4 Replacement -8 (-691 ) None N/A N/A 0 5 Munger Graduate Housing 349 267,683' 349 5 Munger Graduate Housing 251 192,517 Schwab Dining Storage N/A 464 511 6 Blackwelder/Quille,,-Dorms 130 N/A 7 Crothers Renovation 133 N/A 8 717 Dolores 4 0 9 CrOlhors 2 0 10 Olmsled Terrace Facully. Housing 39 103,127 70 II Olmsled Staff Rental HOll,inll 25 53,83 1 Arrillag. Family Dining Commons N/A 28,260 Cumulative Net Contribution toward 2000 GUP Housing 1,358 788,397 1,358 Units "'Map C-2 illustrates the locations of housing projects that add more than one unit. Individual housing projeets are not shown on Map C-2. I. Based on an average of767 square feet per unit constructed for the Munger Graduale Student Housing projecl. C-s CITY OF PALO ALTO OFFICE OF THE CITY CLERK April 8, 2013 The Honorable City Council Palo Alto, California Appointment of Sandra Hirsh, John Melton, Dena Mossar, James Schmidt, and Alice Smith to the Library Bond Oversight Committee for Five Terms Ending on May 31, 2017 On Monday, April 1, 2013, the City Council voted unanimously to place on the consent calendar for Monday, April 8, 2013, the appointment of the incumbents of the Library Advisory Bond Oversight Committee for Five Terms Ending on May 31, 2017. The incumbents are: Sandra Hirsh, John Melton, Dena Mossar, James Schmidt, and Alice Smith. Staff respectfully requests approval of these appointments. Department Head: Donna Grider, City Clerk Page 2 CITY OF PALO ALTO OFFICE OF THE CITY CLERK April 8, 2013 The Honorable City Council Palo Alto, California Appointment of David Bower, Beth Bunnenberg, and Patricia DiCicco to the Historic Resources Board for Three Terms Ending on May 31, 2016 On Monday, April 1, 2013, the City Council voted unanimously to place on the consent calendar for Monday, April 8, 2013, the appointment of the incumbents of the Historic Resources Board for Three Terms Ending on May 31, 2016. The incumbents are David Bower, Beth Bunnenberg and Patricia DiCicco. Staff respectfully requests approval of these appointments. Department Head: Donna Grider, City Clerk Page 2 City of Palo Alto (ID # 3434) City Council Staff Report Report Type: Action Items Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: Rezone Emerson Street Adding Ground Floor Combining District PUBLIC HEARING: Adoption of an Ordinance Amending the Zoning Map to Add the Ground Floor Combining District to the CD-C-P(and CD-S-P) Zoned Properties Fronting the 600 Block of Emerson Street From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends a Council MOTION to adopt the attached Draft Ordinance (Attachment A) amending the Zoning Map to add the Ground Floor (GF) Combining District (regulated under PAMC Section 18.30(C)) to properties on the 600 block of Emerson Street zoned CD-C-P (Commercial-Downtown Community with Pedestrian Combining District) and street fronting ground floor spaces zoned CD-S-P (Commercial-Downtown Service with Pedestrian Combining District), as listed on the ordinance’s Exhibits 1 and 2. Executive Summary On November 5, 2012, Council directed staff to pursue immediate rezoning of properties on the 600 block of Emerson Street to add the Ground Floor (GF) Combining District. The Colleagues’ Memo (Attachment B) and Council discussion (Attachment C, meeting minutes) satisfied the PAMC Section 18.80.020 requirement to describe, in general terms, the reasons for consideration of a change in district boundaries. The PTC considered and recommended a draft map and Ordinance in two public hearings, and determined the change of boundaries to add the GF zone is in accord with the Comprehensive Plan and purpose of PAMC Title 18. The attached draft Ordinance contains the requisite Approval Findings, as well as citations from the Zoning Code and Comprehensive Plan to support these findings. In the Ground Floor (GF) Combining District, use of the ground floor area of buildings is restricted by PAMC Section 18.30(C).010 to retail, eating and drinking, and other service- oriented commercial uses. The GF zone does not allow new office uses to be located on the City of Palo Alto Page 2 ground floor of existing or new buildings, but allows for the continuation of existing ground floor office spaces. There are five existing ground floor office spaces on the 600 block of Emerson. Staff’s recommendation had previously excluded three of these five spaces from the rezoning; the street-facing CD-S-P-zoned Forest Plaza Building ‘A’ commercial office spaces (698 Emerson, 171 and 175 Forest). These addresses were included in the hearing notices and were recommended for rezoning by the PTC on a 6-2 vote. The fourth ground floor office space in Forest Plaza’s Building A ground floor condominium is 195 Forest Avenue; this space is not street fronting and therefore excluded from the rezoning. Background GF Combining District The GF Combining District, implemented in 1986, is primarily applied to the Commercial Downtown-Community zone. The GF regulations were initially part of the CD zone chapter. In 1992, the regulations were placed into a separate “Combining District” and conditional uses, such as commercial recreation, daycare, and financial services, were later included. In 2009, Council (a) deleted the ‘Use Exception’ provision, (b) rezoned portions of the Downtown to add and remove the GF Combining District, (c) amended the CD district outside of the GF zone to allow greater flexibility for landlords to experiment with retail in former office space and to alternate between office and retail uses and (d) modified the development standards to ensure ground floor space is designed to “accommodate retail use” – but not require such use. The January 30, 2013 PTC report describes this in more detail. City Council Review The attached PTC reports provide background on the Council’s November 5, 2012 Colleagues memorandum, discussion and direction to staff. The memo arose in part from concern about recent use conversions in some areas of downtown, including Emerson Street. During Council discussion, it was noted that “Emerson Street needs to be protected quickly” since it connects Downtown with South of Forest Avenue; Council voted (8-1) to direct staff to “return to Council with a proposal to retain retail on Emerson Street between Hamilton Avenue and Forest Avenue.” Minutes of the Council meeting are provided as Attachment C. Public Outreach Staff held an outreach meeting in mid-December regarding Council’s direction; two property owners attended. Staff requested further outreach from a representative of the Downtown Business District to the Emerson Street property owners and merchants, to ensure all affected parties were aware of the pending action to rezone these properties. City of Palo Alto Page 3 Planning and Transportation Commission Review The PTC conducted two public hearings to discuss and recommend this rezoning. The staff reports and meeting minutes for these public hearings are attached to this report as Attachments D, E, F and G. On January 30, 2013, the PTC reviewed the Council direction for the rezoning and continued the public hearing, consistent with staff’s recommendation, requesting additional information for its consideration. In the report presented to the PTC (Attachment D), staff recommended exclusion of both corner properties from the rezoning, having heard from the property owner of 203 Forest Avenue and residents above the Forest Plaza Building ‘A’ offices who had expressed concern about the potential for living above a restaurant. The reasons for exclusion were stated in the staff report. These included that the buildings at the four corners of the intersection (1) do not currently contain retail uses, (2) are not well-designed for retail uses, and (3) the Forest Plaza condos were specifically excluded from the 2009 GF rezoning discussions. The report asked for PTC input on these exclusions and on how to treat non- conforming uses resulting from the rezoning. There were no public speakers at the first hearing, as reflected in meeting minutes (Attachment E). The additional information the PTC requested included parcel data, cost of rent, information about outdoor alcohol service, potential incentives to retain existing retail, and takings law including any previous discussion of takings related to rezoning property to GF. On March 5, 2013, the Planning and Transportation Commission (PTC) received the staff report (Attachment F) and voted 6-2 to recommend Council adoption of an ordinance adding the Ground Floor (GF) Combining District to all properties fronting the 600 block of Emerson Street and the street facing corner spaces fronting Forest Avenue. The corner properties the PTC recommended are now included in the Ordinance. There were three speakers addressing the PTC on March 5, 2013, as reflected in meeting minutes (Attachment G). The first speaker, a residential condominium owner in Forest Plaza Building ‘B’, noted his support of the PTC’s recommendation to include the ground floor condominiums in Forest Plaza’s Building ‘A’. The second speaker, the property owner of 203 Forest Avenue, expressed concern about the inclusion of his property in the rezoning. The third speaker, representing the property owner of 624-640 Emerson, clarified her opposition of the rezoning of these properties. The following table lists properties on the 600 Block of Emerson Street recommended by the PTC to receive the GF zoning: City of Palo Alto Page 4 Property Address Tenant West Side of Emerson Street (North to South) 180 Hamilton Avenue Casa Olga, under conversion to The Epiphany Hotel 620 Emerson Street Stanford Florist 624 Emerson Romi Boutique Retail Clothing 628 Emerson Richard Sumner Gallery Retail Art, Frames, Prints 632 Emerson Tacolicious Restaurant, previously Mantra 636 and 640 Emerson Gordon Biersch Restaurant 644 and 648 Emerson Street Buzz All Stars and Shift Offices Street Facing Spaces in Ground Floor Condominium of Building A, corner of Emerson and Forest (Forest Plaza)* 698 Emerson Street* Anna Eshoo's Office 171 & 175 Forest Avenue* Anheuser Busch Beer Garage Office East Side of Emerson Street, North to South 611-623 Emerson Street Vivre Fitness 625-631 Emerson Street multiple tenant office building 635 Emerson Street Acme Glass building, single tenant office 643 Emerson Street Buca di Beppo Restaurant 651 Emerson Street Empire Tap Room Restaurant 203 Forest Street * office tenant (originally drive-through cleaners) * The four property addresses located on the two corner parcels are noted with an asterisk above. Discussion Existing GF Zones in Downtown Palo Alto Attachment H to this report is a map showing the existing locations of the Ground Floor Combining District downtown. The GF combining district is proposed to be expanded from the intersection of Hamilton Avenue and Emerson Street down the 600 block of Emerson Street and around the corner properties with Forest Avenue addresses, as reflected on Exhibit 1 of the Draft Ordinance. Incentives for Retail Use One topic PTC requested staff to explore for the March 5, 2013 hearing was possible incentives to rent ground floor space to new retail uses rather than office uses. Staff noted that the GF and non-conforming use zoning code provisions may give property owners with existing office City of Palo Alto Page 5 tenants a disincentive to convert to retail use, because once space is rented to a retail tenant, the space can no longer be converted back to office. Staff noted that, if office rents are higher than retail rents, it is unlikely current office landlords will jeopardize this flexibility. Staff also reported that it was likely the Downtown Development Cap analysis would explore potential incentives for retail. Existing Ground Floor Office Use There are six addresses on this block of Emerson Street containing office space. Two properties have “Grandfathered” office uses; 625-641 Emerson and 635 Emerson, and four tenant spaces will have “Legal Non-Conforming” office use following the rezoning; these spaces are located in the two corner buildings; 203 Forest (formerly Cardinal Cleaners), and the street fronting spaces of Forest Plaza Building A Ground Floor commercial condominium (having the addresses 171 and 175 Forest and 698 Emerson). The office space located in the rear of Forest Plaza Building A is not street facing and is not proposed for inclusion in the rezoning. The March 5, 2013 staff report provided information regarding the differences between “grandfathered” and “legal non-conforming” uses. The report clarified that (1) the regulations for the CD-C and CD-S zones allow current ground floor office uses to continue, despite the proposed GF rezoning; (2) both non-conforming and “grandfathered” uses are subject to replacement with conforming uses following a vacancy of 12 months; (3) the GF Zone allows lobby area on the ground floor to serve upper floor offices, and allows office uses permitted in the underlying CD District to occupy up to 25% of the ground floor, as long as the office area is “not fronting on a street”; (4) buildings with ‘grandfathered’ or ‘non-conforming uses’ may be remodeled, improved, or replaced on the same site, for continual use and occupancy by the same use, provided such remodeling, improvement, or replacement does not increase floor area, shift the building footprint, or increase the building’s height length, building envelope, or any other increase in the size of the improvement. The report also described additional regulations for nonconforming uses that are not applied to “grandfathered uses”, information regarding existing buildings and uses (Attachment I), and applicable Zoning Code sections (Attachment J) regarding non-conforming uses (Chapter 18.70) and the Ground Floor Combining District (Chapter 18.30.C). Resource Impact There is no resource impact anticipated from implementation of this rezoning. Existing ground floor uses may remain as currently in place; if an office space is vacant for 12 months, the subsequent land use would need to be a conforming land use. The intent of the provisions is to preserve the revenue-producing uses on the street, and over time to encourage conversion of non-revenue-producing uses (offices) to revenue-generating uses. Such conversions could result in future increases in City revenues. City of Palo Alto Page 6 Policy Implications In addition to policies that support the retail vitality of the University Avenue/Downtown area, the Palo Alto Comprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: “Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University Avenue/Downtown area. Keep the Planning Commission and City Council advised of the findings on an annual basis.” Environmental Review This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. Courtesy Copies Property owners and tenants of Emerson Street Downtown Business District Representative, Russ Cohen Attachments:  Attachment A: Draft Ordinance 2013 GF Emerson (DOC)  Exhibit 1: Parcels on Emerson between Hamilton and Forest to be Rezoned (PDF)  Exhibit 2: List of Properties to be Rezoned (XLSX)  Attachment B: Colleagues Memo, 11-5-12 (PDF)  Attachment C: Council Minutes, 11-5-12 (PDF)  Attachment D: PTC Report January 30, 2013 w/o attachments (PDF)  Attachment E: PTC January 30, 2013 Excerpt Minutes (PDF)  Attachment F: PTC Report March 5, 2013 w/o attachments (PDF)  Attachment G: PTC March 5, 2013 Draft Excerpt Minutes (PDF)  Attachment H: Map of Existing GF in Downtown (2009) (PDF)  Attachment I: Emerson Street Statistics (PDF)  Attachment J: Code Section 18.30(c) and 18.70 (PDF) 1 Attachment A DRAFT ORDINANCE ____ ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SECTION 18.08.040 (THE ZONING MAP) OF THE PALO ALTO MUNICIPAL CODE TO ADD THE GROUND FLOOR COMBINING DISTRICT TO CERTAIN CD-C(P) AND CD-S(P) ZONED PROPERTIES ON EMERSON STREET BETWEEN HAMILTON AVENUE AND FOREST AVENUE The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. The City Council finds that: (a) The Planning and Transportation Commission, after duly noticed public hearings on January 30, 2013 and March 5, 2013, reviewed, considered, and recommended Palo Alto Municipal Code (PAMC) Section 18.08.040 (The Zoning Map) be amended to rezone certain CD-C(P) and CD-S-P zoned properties fronting Emerson Street between Hamilton Avenue and Forest Avenue to add the Ground Floor (GF) Combining District, as shown on the attached map (Exhibit 1) and set forth on the attached list (Exhibit 2). (b) The Council held a public hearing on April 8, 2013, and considered the recommendation by staff and the Planning and Transportation Commission. (c) The proposed Ordinance is in the public interest and will promote the public health, safety and welfare, in that it will encourage retail on Emerson extending the retail ambience of downtown, and is consistent with the City’s Comprehensive Plan. SECTION 2. Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by adding the Ground Floor (GF) combining district to the properties shown on Exhibit 1 (map) and listed in Exhibit 2. SECTION 3. This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. SECTION 4. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: 2 ABSTENTIONS: ABSENT: ATTEST: APPROVED: __________________________ City Clerk APPROVED AS TO FORM: __________________________ Assistant City Attorney __________________________ Director of Planning and Community Environment _________________________ Mayor _________________________ City Manager Lot RHigh StreetPkg Garage LyttonPlaza Undergroundarking Garage Civic C enter Plaza Parkin g W holM E-Trade 136 61 0 116-122 150 53 5 52 9 52 5 54 2 51 640 102 16 24 163 145 56 6 55 6 167 528 64 3 63 5 63 5 645- 685 660- 666 620 180 164 158 156 624 628 632 636 640 644 617 621 151-165 171-195 203 642 640 636 200 514 630 616 208 228 220 240 575 530- 534 536 540 552 177 156 201 209 215 225 595 229 231 611-623 80 508 500 625-631 170 172-174 542 544 538- 542 552 548 546 541- 547 230-238 734 723 721 702- 730220-244 701 731 755 757 160 728-732 762- 776740- 250 275 270 741 72 73 651 221-225 227 668 235530 22020 B 222 240 274 270 250 545 5 581 533 535 537 261 267 51 532- 536 520-526 53 555 623 137 145 700 780 744 1700 753 100 703 100 101 139654 735 707 718 761 795745 759 223-23 539 168 727 733 230 715 200 150 158162 164 698 161 159 157 777 132 528 247 658 539 115 135 739 650 551 548 668 539 202 716 218 725 705 541 600 EMERSON STREET RAMONA STREET ALMA STREET EMERSON STREET HIGH STREET HIGH STREET HAMILTON AVENUE HAMILTON AVENUE EMERSON STREET FO R E S T A V E N U E RAMONA STREET RAMONA STREET LANE 7 EASTLANE 5 EAST LANE 6 EAST LANE 12 WEST LANE 11 WEST CENTENNIAL WALK HIGH STREET ALMA STREET ALMA STREET FO R ES T A V E NU E This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Parcels on Emerson to be Rezoned to CDC & CDS (GF) (P) Tree 0'145' CD C ( P ) a n d C D S ( P ) P a r c e l s on Em e r s o n S t . an d Fo r e s t A v e pr o p o s e d t o b e r e z o n e d t o CD C ( G F ) ( P ) & C D S ( G F ) ( P ) CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2013 City of Palo Alto rrivera, 2013-03-25 14:53:51 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) APN CURRENT TENANT/USE PARCEL STREET ADDRESS 120-27-027 Buzz All Stars, Shift (offices)644 EMERSON 120-27-026 Romi Boutique, Sumner Gallery, Tacolicious, Gordon Biersch624-640 EMERSON 120-27-025 Stanford Florist 620 EMERSON 120-27-007 Epiphany Hotel 180 HAMILTON 120-27-019 Empire Tap Room Restaurant 651 EMERSON 120-27-020 Bucca de Beppo Restaurant 643 EMERSON 120-27-021 120-27-022 Acme Glass' (offices)635 EMERSON 120-27-023 Multi-tenant office 625-631 EMERSON 120-27-024 Vivre Fitness 611 EMERSON 120-27-018 Offices 203 FOREST 120-61-001 Anna Eshoo's Office 698 EMERSON (street facing space) "Anheuser Busch Beer Garage 171 FOREST (street facing space) "Anheuser Busch Beer Garage 175 FOREST (street facing space) PARCEL OWNER OWNER'S ADDRESS OWNER'S CITYSTATEADDRESS 648 EMERSON INVRS LLC C/O VENTANA PROPERTY SERVICES 975 HIGH ST PALO ALTO CA 94301 PALO ALTO THEATRE CORPORATION 700 EMERSON ST PALO ALTO CA 94301 KRUCKER RUTH E TRUSTEE STANFORD FLORISTS CO.620 EMERSON ST PALO ALTO CA 94301 CASA OLGA 180 HAMILTON AV PALO ALTO CA 94301-1618 TSENG ALEXANDER A S AND MARTHA L TRUSTEE &1689 HAMILTON AV PALO ALTO CA 94303-2830 MAXWELL DONALD R AND THERESA M TRUSTEE & ET W MICHAEL SAVIN 4150 CRESTHAVEN DR WESTLAKE VILLAGE CA 91362 MELCHOR CORPORATION 635 EMERSON ST PALO ALTO CA 94301-1610 MELCHOR CORPORATION 635 EMERSON ST PALO ALTO CA 94301-1610 THOITS BROS INC 629 EMERSON ST PALO ALTO CA 94301 THOITS BROS INC 629 EMERSON ST PALO ALTO CA 94301 203 FOREST LLC c/o DAVE KLEIMAN 333 HIGH STREET PALO ALTO, CA 94301 BAER FOREST PLAZA 2 DELWR LLC/MORTGAGE INVESTORS VII LLC 3105 WOODSIDE ROAD WOODSIDE, CA """ """ PALO ALTO CA 94301-1618 PALO ALTO CA 94303-2830 WESTLAKE VILLAGE CA 91362 PALO ALTO CA 94301-1610 PALO ALTO CA 94301-1610 City of Palo Alto COLLEAGUES MEMO November 05, 2012 Page 1 of 2 (ID # 3282) DATE: November 5, 2012 TO: City Council Members FROM: Vice Mayor Scharff, Council Member Schmid, Council Member Holman SUBJECT: COLLEAGUES MEMO FROM VICE MAYOR SCHARFF AND COUNCIL MEMBERS HOLMAN AND SCHMID REGARDING RE-EVALUATION OF GROUND FLOOR RETAIL PROTECTIONS IN THE DOWNTOWN COMMERCIAL DISTRICT Recommendation Staff should return to Council with a detailed proposal to require retail retention in some or all of the Downtown Commercial (CD) district outside of the current Ground Floor (GF) Retail Overlay, and to extend the Downtown Ground Floor (GF) Retail Overlay to areas of Downtown that would form a pedestrian gateway to new developments and facilities in or around the transit station. The proposal should also examine bringing into compliance any non-conforming uses within the Downtown Commercial (CD) District within the Downtown Ground Floor (GF) Retail Overlay particularly on University Avenue. Furthermore staff should also examine the sites taken out of the Ground Floor (GF) Retail Overlay list in 2009 and recommend whether the designation should be extended to these and/or other properties in the area. Background On November 16, 2009, the City Council voted to remove Ground Floor retail protection from 13 properties along University, Alma, Hamilton and High. These were described as ‘on the periphery of the downtown’ and ‘outside of the retail core’ of University Avenue and its side streets. The ordinance change also included deleting requirements elsewhere in the Downtown Commercial (CD) zone that until that time mandated that existing retail and personal service uses could not be converted to office space. In the interim, several retail properties in the CD zone have converted to office space including Fraiche Yogurt and a shoe store on Emerson Street, the Blue Chalk Café, and Jungle Copy. Other stores, some long-standing Palo Alto retailers, are rumored to be under consideration for conversion to office. In particular, the Emerson Street corridor provides a rich retail-restaurant November 05, 2012 Page 2 of 2 (ID # 3282) corridor, including Gordon Biersch, Mantra, Empire Grill and Tap Room, Buca de Beppo, Stanford Florist, Richard Sumner Gallery and other establishments, all of which are now vulnerable to office conversion. In addition, at the November 2009 Council meetings, staff and Council members acknowledged that the sites removed from the GF overlay in the Hamilton/Alma/University block could become more attractive for retail use as the entry to the train station and connections with Stanford are enhanced. The Planning Director suggested that the proposed Ordinance changes “return to the City Council in a few years to discuss updates, benefits or unintended consequences, and make modifications, if necessary.” Given the approval of the Lytton Gateway project and desirability of better connections to the Stanford Shopping Center and the west side of El Camino Real as part of the Stanford Medical Center approvals and resultant Development Agreement funding to enhance that connection, and the potential for enhancements to the pedestrian tunnels at University Avenue and Lytton Avenue, the City should examine the pedestrian-retail environment in the Downtown Area and consider an extension of the GF Zone to the emerging ‘gateway’ areas of Lytton, University, Alma, Hamilton and High Streets. Conclusion Given the changes in the economic climate in Palo Alto and Silicon Valley, particularly recent and proposed substantial increases in Downtown office space, the City should examine options to assure a vital retail environment and services to support Downtown and the community. This is an appropriate time to re-evaluate the rules for Ground Floor Retail in the Downtown Commercial District. Council Approved Minutes from November 05, 2012 ACTION ITEMS 18. Colleagues Memo from Vice Mayor Scharff and Council Members Holman and Schmid Regarding Re-evaluation of Ground Floor Retail Protections in the Downtown Commercial District. Vice Mayor Scharff recalled in 2009 the Council determined the matter of Ground Floor Retail Protections in the Downtown Commercial District should return for further discussion at a later time. The office market was incredibly strong and there was strong economic pressure to convert retail space to office space. The Council needed to consider where retail space could be lost in Downtown. The primary corridor of concern was Emerson Street and it needed to be protected quickly. The Council also needed to review the flow of retail in Downtown. Retail business worked best when the flow was not broken by a non- retail use. He wanted to review non-conforming uses on University Avenue that interrupted the flow. There were other broader issues that needed to be examined but they were not as pressing. The near-term issue was protecting areas where retail space could be lost. Council Member Holman reported in 2009 she did not support the conversion of zoning to remove ground floor retail protections. The interruption of retail and service businesses was detrimental to the retail environment and the tax base. The block bordered by Hamilton Avenue and Forest Avenue did not have ground floor protections and connected the Downtown District with the South of Forest Avenue Phase II (SOFA II) District. The Council needed to focus changes to provide ground floor protections there. Adjacency was critical to retail and service businesses. In attempting to connect University Avenue and the Downtown District to the Stanford community, the Council needed retail and service businesses that attracted people. Some non- conforming uses should be reviewed. Council Member Schmid indicated the prior discussion of the issue occurred during a recession. Retail space was currently performing well throughout the Downtown area. Because commercial office space was performing better than retail space, there was an economic incentive to create or transform retail space into commercial space. The number of housing units expected from the Downtown area was a small portion of the total number of units for Palo Alto. With services and mass transit located nearby Downtown should be a center point of mixed uses. In exchange for the tremendous economic benefit given to Council Approved Minutes from November 05, 2012 the community there should be some public benefit. It made sense to enhance the vitality of the district by protecting ground floor retail. Council Member Burt was receptive to having Staff return with recommendations on methods for retaining retail uses on Emerson Street. Other elements of the Colleagues Memo should be considered as part of the Downtown Development Cap Study. He inquired whether Staff had the capacity to compile recommendations for all elements of the Memo versus dividing the elements as he described. Curtis Williams, Director of Planning and Community Environment, reported recommendations for all elements would be a large task. To focus initially on the Emerson Street corridor would be more manageable and would be a logical means to dividing the work. Part of the Downtown Development Cap Study would address some elements in any event. James Keene, City Manager, stated Staff could return to the Council prior to the end of the year with a schedule identifying a priority or hierarchy of elements. Including it with the Downtown Development Cap Study was logical. Remapping and rezoning uses was an added dimension to the Development Cap Study. Council Member Price felt the original intent of the Memo was too broad. She was somewhat interested in reviewing the Emerson Street corridor as part of the Downtown Development Cap Study. She expressed concern that it was a piecemeal approach and about the capacity of Staff to perform the work. Trying to define baseline economic conditions as well as the number of variables was problematic. Council Member Klein agreed with Council Member Price's comments. He did not see a problem and felt Downtown was remarkably vibrant. This was not a priority when compared to other assignments given to Staff. He could not support the recommendations set forth in the Memo. Council Member Espinosa wanted to understand the proposal. He inquired whether Staff interpreted the proposal to require a study or to state a requirement for retention. Council Approved Minutes from November 05, 2012 Mr. Williams stated a certain level of data analysis and some discussion of economic impact was needed before Staff could formulate recommendations. Staff had to follow the public process in terms of engaging the Downtown community and the Planning and Transportation Commission (P&TC). Council Member Espinosa asked Staff to discuss the involvement of the public and Downtown businesses and property owners in the process. Mr. Williams felt Staff would need to engage with businesses and property owners to determine impacts to them. The residents around the area would be interested in the issue and offer input. Staff's recommendations would be submitted to the public hearing process because there would be changes to the Zoning Code. Council Member Espinosa inquired when Staff might return to the Council with preliminary information. Mr. Williams indicated Staff could return to the Council in the spring if the work program allowed it. Staff could return sooner if they could focus on the Emerson Street corridor only. Council Member Espinosa felt the project was a massive undertaking for Staff. He wanted the Council to understand the project and the amount of work involved. Council Member Shepherd understood in 2009 Staff reviewed each building to determine whether or not retail was the best use for the building. She asked if that was the process Staff used and how much retail space was eliminated. Mr. Williams characterized the process as a block-by-block analysis with particular attention to blocks in the ground floor retail zone. The analysis had three components: 1) removing and adding blocks to the ground floor protection zone, 2) imposing restrictions on some blocks that they could not convert from retail space to office space, and 3) temporary allowances for conversion of retail space to office space once a certain vacancy rate was exceeded. With these changes, Staff hoped the core retail space would be strengthened with flexibility to change between retail space and office space on the perimeter of the District. Council Approved Minutes from November 05, 2012 Council Member Shepherd noted the efforts made in the analysis, and asked if the changes were intended to last only a few years. Mr. Williams indicated the changes were not intended to be for a few years only. Because zoning and circumstances change there could be good reasons for reviewing the zoning. In 2009, Staff noted the corridors to the train stations were not good retail spaces and it could be appropriate in the future to change that view. Mr. Keene reported in 2009 the City was at risk of losing important ground floor retail space to office space under existing policies. That process contained a series of trade-offs in restrictions and temporary allowances. The current proposal was not the same; it would extend retail space and require it in places that currently had flexibility. It was difficult to predict the scope of the work. If the Council accepted some incremental changes, Staff could manage that more easily. Council Member Shepherd inquired whether there had been any unintended consequences from the 2009 changes. Mr. Williams reported there were no unintended consequences from Staff's perspective. The most serious concern about use changes was the Emerson Street corridor. He believed the P&TC originally recommended including Emerson Street in the ground floor overlay. Because it was not included the corridor had been a point of contention. Russ Cohen, Executive Director of Downtown Association, stated peripheral retail businesses were struggling in 2009 and that resulted in zoning changes. An unintended consequence of changing zoning back could be vacated storefronts. The business community met with Staff to discuss zoning changes and concluded unanimously that no further changes were necessary. It was too soon to reevaluate the 2009 changes. Larry Jones enjoyed the hometown feel of Palo Alto and that was one reason people liked living in Palo Alto. Employee morale was better at Downtown businesses than at industrial parks. The Council had a responsibility to protect the retail businesses in Palo Alto. Faith Bell reported the corridor on Emerson Street had small businesses because the rents were less expensive. Chain stores could afford the rents charged on University Avenue. The City had to protect Council Approved Minutes from November 05, 2012 the small corridors with small buildings in order to have independent businesses. Robert Moss stated ground floor offices had problems such as high population density. Office space did not pay sales tax and did not attract foot traffic in the evenings or on weekends. He suggested the Council extend ground floor retail from Alma Street to Waverly Street and from Lytton Avenue to Hamilton Avenue for a two or three-year period to allow Staff time to make recommendations. Retail businesses in Downtown increased viability for fringe neighborhoods. Council Member Holman felt there was a misunderstanding in that the primary purpose of the Memo was to provide ground floor protections for the Emerson Street corridor between Hamilton Avenue and Forest Avenue. Studying one block should not take a great deal of time. The purpose of zoning was to enforce and support community values and uses. The marketplace would work within zoning. The Council's responsibility was to provide safeguards for the community. Local, independent businesses provided more revenue to the City in a variety of ways. The intention was to consider small areas initially and review the larger context. The Council should focus on the Emerson Street corridor and the connection of University Avenue to the train station. In the short term, the Council needed to address these two critical areas. MOTION: Council Member Burt moved, seconded by Vice Mayor Scharff to request Staff: 1) return to Council with a proposal to retain retail on Emerson Street between Hamilton Avenue and Forest Avenue and 2) as part of the review of the Downtown Development cap direct Staff to review the boundaries of the ground floor overlay and evaluate bringing into compliance non-conforming uses within the ground floor overlay area of the downtown Commercial District (CD). Council Member Burt inquired about including a reasonable timeframe in the first part of the Motion. Mr. Keene indicated the Motion was a directive for Staff to proceed. He did not believe there was a need to include a timeframe. If the Motion passed, Staff would work to effect the change and notify the Council when it could be done. The timeframe to return to the Council was effected by the second part of the Motion. Council Approved Minutes from November 05, 2012 Council Member Burt stated the Motion addressed the more pressing issue and provided guidance for a deliberate analysis of the remaining two issues. Vice Mayor Scharff felt the Motion prioritized the Emerson Street corridor. Once retail connections were broken, they could not be re- established. It was important for the Council to be proactive. Council Member Espinosa inquired about the process Staff would follow to develop the proposal. Mr. Williams reported Staff would hold conversations with property owners regarding concerns and then provide a draft Ordinance to the P&TC before returning to the Council. Council Member Klein felt there were three parts to the Motion. Council Member Burt indicated the two parts of Number 2 under the Motion would be performed as part of the Downtown Development Cap review. Council Member Klein asked if one part failed would both parts fail. Council Member Burt asked for clarification. Council Member Klein supported the first part of the Motion but not the second and third parts. The latter two parts created a vast work program. A problem had not been presented that justified that amount of work. He requested the Motion be separated for voting. Council Member Burt inquired why Council Member Klein requested the Motion be separated. Council Member Klein stated other Council Members might support portions rather than all of the Motion. Part 2 of the Motion created work when a problem had not been defined or identified. He recalled the Council considering Emerson Street in detail in 2009. AMENDMENT: Council Member Klein moved, seconded by Council Member Price, to delete from the main Motion number 2: “2) as part of the review of the Downtown Development Cap direct staff to review the boundaries of the ground floor overlay and evaluate bringing into compliance non-conforming uses within the ground floor overlay area of the downtown CD District.” Council Approved Minutes from November 05, 2012 Council Member Price agreed with Council Member Klein's comments. Part 2 of the Motion should be considered in the examination and creation of the Scope of Services for the Downtown Development Cap. It was premature to consider part 2 of the Motion. Vice Mayor Scharff felt the Motion included part 2 of the Downtown Development Cap Study. Council Member Price viewed the Motion as narrowly defining the Scope of Services when compared to the original Colleagues Memo. The Council had not given enough thought to part 2 and that could be done when the Council considered the scope of the Downtown Development Cap. Vice Mayor Scharff indicated the Motion stated the review would be part of the Downtown Development Cap. The perfect time to consider part 2 was when the Council reviewed the Downtown Development Cap. Bringing matters into compliance was a fairly narrow task. He did not support the Amendment because it was important to have a comprehensive review of retail space as part of the Downtown Development Cap Study. Council Member Schmid inquired whether the Downtown Development Cap reviewed the total commercial and retail space in Downtown. Mr. Williams reported it considered commercial and retail space in the CD zoning district in Downtown. Council Member Schmid asked if a review of the Downtown Development Cap included a review of the distribution between retail office and office space. Mr. Williams reported that was correct in a narrow construction. Staff anticipated reviewing the balance of the types of uses because one of the drivers was parking and each use had different implications for parking. Council Member Schmid indicated the Council was adding a new element to the review of the Downtown Development Cap. The most critical element was the City's Economic Development Program. The City generated considerably more revenue from retail uses than from office complexes; therefore, the City had a vested interest in a growing retail sector. In studying the Emerson Street corridor, the Council Approved Minutes from November 05, 2012 Council had to determine how to retain a vibrant retail sector. The wider issue was whether the City had a vested interest in building a vibrant and vital retail sector in Downtown. Council Member Holman did not support the Amendment. The Emerson Street corridor should be part of the work plan for Staff, who should review the retail component when evaluating an office cap in Downtown. Council Member Espinosa supported the Amendment. He supported the first part of the Motion because the process would engage stakeholders and assist the Council in evaluating the proposal. With regard to the second portion of the Motion, he did not disagree with the broader study; however, he did not believe it was the correct approach. Council Member Shepherd inquired about the composition of parking for retail space versus office space. Mr. Williams stated that issue would be included in the study. The Zoning Code requirements for parking within the Parking District were the same for retail space and office space. Outside the Parking District, more parking was required for retail space than for office space. However, the changing characteristics of office space was driving higher employee density. Retail space mixed with office space in the Downtown environment tended to promote walkability such that parking was not as much of an issue on the retail end. For those reasons, the Downtown Development Cap Study was necessary to study the reality of the parking situations. Council Member Shepherd supported the Amendment. Council Member Burt reported the primary Motion was not prescriptive with regard to outcome. In the process used to evaluate the Downtown Development Cap, Staff would also evaluate the relationship of retail space. The Motion asked Staff to evaluate new, appropriate boundaries and non-conforming uses. If the Motion stated boundaries for the entire Downtown area, then he would not support it. This was exactly where planning should occur. Mayor Yeh noted Agenda Item Number 21 concerned the Downtown Cap/Transportation Demand Management (TDM) Study. He inquired if Council Approved Minutes from November 05, 2012 Staff intended for the Scope of Services of that study to return to the Council or a Standing Committee. The Motion's intentions had to be vetted in the broader discussion of the Scope of Services of the Downtown Development Cap. Mr. Williams reported the specifics of the study were not outlined in the Staff Report. After evaluating the Parking Study and its importance, Staff needed to return to Council or the Policy and Services Committee with the scope of work for that study. It was a significant study regarding parking and land use. Mr. Keene felt the recommendation as written could be misconstrued. Staff could not issue a Request for Proposal (RFP), perform the Downtown Development Study, and provide results and recommendations in six months. A year would be a more appropriate timeframe. Mayor Yeh did not want to make a decision on the second half of the Motion without understanding the potential fiscal impacts and how they would influence the study. INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF MAKER AND THE SECONDER at the time of the Scope of Services review of the Downtown Development Cap / Traffic Demand Management (TDM) Study, Staff shall bring back costs associated with: “as part of the review of the Downtown Development Cap direct Staff to review the boundaries of the ground floor overlay and evaluate bringing into compliance non-conforming uses within the ground floor overlay area of the downtown CD District.” Council Member Klein felt the Council had approached the whole matter backwards. It could be misinterpreted by the downtown business community. He suggested Mayor Yeh support the Amendment and then add language to the original Motion. Mayor Yeh indicated his intention was to delete part 2 of the Motion and add his proposed language. He could not support the Motion, because it directed Staff to perform the action without first presenting the costs to the Council. Vice Mayor Scharff supported an Amendment to the Motion that Staff return to the Council with costs before performing the second part of the Motion. Council Approved Minutes from November 05, 2012 Council Member Holman stated the Amendment was to delete part 2 of the Motion. She asked how the Council could amend language that was proposed to be deleted. Mayor Yeh explained that his proposed Amendment was not to move forward on part 2, but to direct Staff to return with costs associated with part 2 at the time the Council discussed the Scope of Services. Council Member Holman suggested it was an Amendment to the Motion rather than an Amendment to the Amendment. Council Member Klein stated the Scope of Services Mayor Yeh was referencing was the Scope of Services for the Downtown Development Cap Study. He accepted the proposed Amendment. Council Member Price expressed concern that Staff would detail a Scope of Services, but she accepted the Amendment. Council Member Holman was unclear as to the intention. She asked the Mayor to vote on the Amendment and then amend the Motion. Mayor Yeh clarified that the Amendment would pass with his vote and then the Motion would be unnecessary. Council Member Klein felt the Council voted on language that was quite different from the Colleagues Memo recommendation. Mr. Keene suggested the Motion clearly state the Council's intentions. Council Member Klein stated the costs would be presented with the complete work plan for the Downtown Development Cap Study. Mr. Keene suggested the Motion clarify that presenting the costs would not automatically allow Staff to proceed. The real issue was how to review the scope of actions necessary for the Downtown Development Cap Study. He suggested the Council move on the first part of the Motion and then direct Staff to return with a comprehensive discussion of the Downtown Development Cap Study. Council Member Holman was confused regarding the language of the Amendment. Council Approved Minutes from November 05, 2012 INCORPORATED INTO THE MAIN MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to delete from the main Motion number 2 and at the time of the Scope of Services review of the Downtown Development Cap / Traffic Demand Management (TDM) Study, Staff shall bring back costs associated with: “2) as part of the review of the Downtown Development Cap direct staff to review the boundaries of the ground floor overlay and evaluate bringing into compliance non-conforming uses within the ground floor overlay area of the downtown CD District.” Council Member Burt clarified that Number 2 of the Motion was deleted as he had accepted the Amendment. MOTION AS AMENDED PASSED: 8-1 Shepherd no City of Palo Alto (ID # 3430) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 1/30/2013 City of Palo Alto Page 1 Summary Title: Rezone Emerson Street Fronting Properties on 600 Block Title: Rezoning to Apply the Ground Floor (GF) Combining District (Section 18.30(C) of the Municipal Code) To Properties in the 600 Block of Emerson Street From: Amy French, Chief Planning Official Lead Department: Planning and Community Environment Recommendation Staff recommends that the Planning and Transportation Commission (PTC) consider the attached draft ordinance (Attachment A) to amend Palo Alto Municipal Code Section 18.08.040 (Zoning Map) to add the Ground Floor (GF) Combining District (Section 18.30(C) of the Municipal Code) to the properties shown on Exhibit 1 and listed by address on Exhibit 2 of the Draft Ordinance, generally those with frontage on the 600 block of Emerson Street between Hamilton Avenue and Forest Avenue, take public testimony, discuss the staff recommendation, and continue the item to February 13, 2013 to allow for additional public testimony in a public hearing prior to voting on a recommendation on February 13, 2013. Background The GF combining district code section (Palo Alto Municipal Code (PAMC) Section 18.30(C).010) limits ground floor uses. Allowed uses include retail, eating and drinking, and other service- oriented commercial uses. This combining district is primarily used downtown but was also applied, in 2001, to properties along Middlefield Road in Midtown. The GF regulations were initially implemented in 1986 with the creation of the CD zoning district as a subsection within that code chapter, and was delineated separately in 1992 to become a combining district. The only significant text changes between 1986 and 2009 was the inclusion of conditional uses such as commercial recreation, daycare, financial services, and others (see Attachment E for full list of GF uses). City of Palo Alto Page 2 2009 Rezoning In 2009, the GF code was modified to remove the ‘Use Exception’ provision that was part of the original 1986 code language. This provision was triggered when the vacancy rate for ground floor properties within the GF combining district was five percent (5%) or greater. Before the 2009 change, an applicant could show that the location had been vacant and available for six months or more, and the Director could issue a Use Exception (which was different than a Use Permit). The vacancy rate reached that threshold in 2009, the first time that occurred since monitoring reports were prepared for the prior 20 years. Removal of the provision prevented potential conversions of retail and service uses to office use in this core area during the economic downturn. Along with the removal of the Use Exception provision, the Ordinance Council approved in 2009 rezoned portions of the Downtown to add and remove the GF Combining District (see Attachment D, map). Council added the “GF” overlay to three CD-C (P) zoned properties on the 400 block (Aquarius Theater block) of Emerson Street (412, 420 and 430 Emerson) and the properties fronting Hamilton Avenue on the south side of the street between Emerson and Ramona Streets (the Reposado restaurant block), to match the north side of Hamilton, which was already zoned CD-C (GF)(P). Council approved the removal of the GF combining district from 13 properties along University Avenue (near Alma), Alma Street, Hamilton Avenue (near Alma), and High Street (between Hamilton and University). The CD district outside of the GF zone was amended to allow greater flexibility to vary from office to retail and vice versa. The wording of the CD District Development Standards Section 18.18.060, item (f)(1), however, was modified to require that the design of ground floor space “accommodate retail use” – but not require such use - in the CD-C zone, as follows: “New construction and alterations in the CD-C zoning district shall be required to design ground floor space to accommodate retail use and shall comply with the provisions of the Pedestrian (P) combining district.” 2012 Colleagues Memo and Council Direction On November 5, 2012, a Colleagues Memorandum from Vice mayor Scharff and Council members Holman and Schmid was presented to Council (Attachment B), expressing concern about recent conversions from retail to office in some areas of downtown (including Emerson Street) and other suggestions to preserve and enhance downtown retail. The memo noted that “the Emerson Street corridor provides a rich retail-restaurant corridor, including Gordon Biersch, Mantra, Empire Grill and Tap Room, Buca de Beppo, Stanford Florist, Richard Sumner Gallery and other establishments, all of which are now vulnerable to office conversion.” The memo concluded that “the City should examine options to assure a vital retail environment and services to support Downtown and the community.” City of Palo Alto Page 3 During Council discussion, Vice Mayor Scharff noted, “Emerson Street needs to be protected quickly.” The Planning Director noted that the Planning and Transportation Commission (PTC) had considered adding the GF combining district to Emerson Street fronting properties on the 600 block in the 2009 ordinance changes, but Council did not adopt that recommendation. Councilmember Holman noted the Colleagues Memo was intended to have Council focus on protecting retail on the Emerson Street block, which connected the Downtown District with the South of Forest Avenue Phase II (SOFA II) District. The motion Council approved on an 8-1 vote included that “staff return to Council with a proposal to retain retail on Emerson Street between Hamilton Avenue and Forest Avenue.” Minutes of the Council meeting are provided as Attachment C. Map Amendment Process Amendments to the Zoning Map and Zoning Regulations are regulated by PAMC Chapter 18.80. As in any rezoning process, Initiation of the rezoning by either the Planning and Transportation Commission or Council is required – in this case, by Council (Section 18.80.020 (b)) – the motion statement must describe in general terms, the reasons for consideration of a change in district boundaries. The Council memo and discussion served that purpose. The next step is consideration and recommendation of a draft map and associated Ordinance by the Planning and Transportation Commission in a public hearing (pursuant to Section 18.80.060). The PTC action is set forth in Section 18.80.070 (Attachment F). The PTC must determine that the change of boundaries as presented (or as modified) is in accord with the purpose of Title 18 and in accord with the Palo Alto Comprehensive Plan. If the PTC desires to modify the area to be rezoned such that additional properties are affected, the PTC must determine that the public interest will be served and additional notice would be required. A PTC recommendation would be followed by Council action on the ordinance. If Council approves the ordinance, a second reading of the ordinance would finalize the action and the ordinance would become effective 30 days later. Discussion Staff recommends that the following CD-C(P) zoned properties, located on both the west and east sides of Emerson Street between Hamilton Avenue and Forest Avenue, be rezoned to add the Ground Floor (GF) Combining District: West side of Emerson Street, north to south:  180 Hamilton Avenue (Casa Olga, under conversion to The Epiphany Hotel)  620 Emerson Street (Stanford Florist)  624-640 Emerson building: o 624 Emerson (Romi Boutique Retail Clothing) City of Palo Alto Page 4 o 628 Emerson (Richard Sumner Gallery Retail Art, Frames, Prints) o 632 Emerson (Tacolicious Restaurant, previously Mantra) o 636 and 640 Emerson (Gordon Biersch Restaurant)  644 and 648 Emerson Street (offices of Buzz All Stars and Shift) East side of Emerson Street, north to south:  611-623, Emerson Street (Vivre Fitness)  625-631 Emerson Street (multiple tenant office building)  635 Emerson Street (‘Acme Glass’ building, single tenant office)  643 Emerson Street (Bucca de Beppo Restaurant)  651 Emerson Street (Empire Tap Room Restaurant) Staff recommends the exclusion of two properties from the rezoning (698 Emerson Street and 203 Forest Avenue). The reasons for the exclusions are discussed in the Key Issues section below. Outreach Following the Council direction, staff invited all of the Emerson Street property owners and merchants to a meeting on December 18, 2012, to discuss the Council’s direction. Notice cards were sent to all property owners and merchants on the 600 block of Emerson Street. Only two of those invited attended, however:  Mr. David Kleiman, the property owner of 203 Forest Avenue.  Mr. Joseph Martinelli, the property owner of 644-648 Emerson Street. All affected property owners and tenants have been notified of the PTC’s hearing concerning the proposed rezoning. Summary of Key Issues The PTC is asked to review the draft ordinance to add the GF combining district to the CD-C (P) Emerson-fronting properties on the 600 block of Emerson Street, as indicated on Exhibit 1 of Attachment A (map) and listed on Exhibit 2. Key issues to be considered are 1) which properties to include or exclude, and 2) how to treat properties that will become non-conforming uses as a result of the rezoning. City of Palo Alto Page 5 Properties to be Rezoned GF As noted, the GF combining district code allows only specific uses on the ground floor: retail, eating and drinking, and other service-oriented commercial uses. Staff recommends that this block of Emerson be rezoned to add the GF Combining District to reflect the Council direction in the Colleagues memo. Council’s reasons are enumerated in the attached memo, minutes and quoted in the background section of this report. This block is known for its walkability and vitality, for its popular restaurants, and as a corridor or connection for pedestrians from the downtown core to Whole Foods and SOFA II area. The reason to apply the GF combining district to this block without further study or delay is that there are retail spaces vulnerable to conversion. Staff Recommended Exclusions The intersection of Emerson Street and Forest Avenue, however, is not a “retail” intersection, and therefore staff has excluded the following properties from the rezoning:  698 Emerson, Northwest corner of Emerson and Forest (Anna Eshoo’s office).  203 Forest, Northeast corner of Emerson and Forest (Kleiman, office). None of the buildings at this intersection was designed for retail use and all four properties are currently in office use (698, 700 and 701 Emerson Street, 203 Forest Avenue). 698 Emerson, zoned CD-S (P) with primary frontage on Forest Avenue, is included in an office building complex having primary frontage on Forest Avenue and High Street, and was excluded from the rezoning in 2009. 203 Forest, originally a drive-through dry-cleaning establishment (Cardinal Cleaners), turned fitness club (via CUP), is now office space. Though 203 Forest had been considered by the PTC for inclusion in 2009, staff does not recommend including it in the rezoning due to its location and the existing building’s features, including a design not conducive to retail use (solid walls, driveway in front). Creation of Non-Conforming Uses It is important to note that this rezone would create several “legal non-conforming” office uses. These office uses could continue as office use, according to Zoning Code requirements, as long as there is no lapse in occupancy for more than 12 months. If office use were to cease operation for 12 months or more, no new office use could be reinstated in the building, but any new use would need to comply with the uses allowed under GF zoning. Any proposal to demolish the building for new development would also be subject to the use restrictions of the GF combining district. One potential negative implication of the rezoning is that the lack of flexibility to convert from office to retail and back may encourage these property owners to City of Palo Alto Page 6 rent to office uses in the future, as they will not want to be “locked” into retail. One of the owners who attended the outreach meeting suggested that the City consider including a time period during which a property owner could try to find a tenant in order to retain a space as retail space, or to attempt to convert an office space to retail use. This alternative is similar to the Use Exception provision that was eliminated in the 2009 rezone. Staff did not consider this alternative further because the Council directed the block to be rezoned to GF. Therefore, properties would be treated the same as those on University Avenue, where there is no special Use Exception provision in place. Policy Implications In addition to policies that support the retail vitality of the University Avenue/Downtown area, the Palo Alto Comprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University Avenue/Downtown area. Keep the Planning Commission and City Council advised of the findings on an annual basis. Timeline Staff recommends the PTC continue the hearing to the PTC meeting of February 13, 2013, following initial discussion and public testimony on January 30, 2013, to allow for adequate public input and consideration prior to voting on a formal recommendation. The Council meeting of March 11, 2013 is targeted for first reading and adoption of the attached ordinance. Environmental Review This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. Courtesy Copies Property owners and tenants of Emerson Street Downtown Business District Representative Russ Cohen Attachments:  Attachment A: Draft Ordinance 2013 GF Emerson (PDF) City of Palo Alto Page 7  Attachment B: Council Colleagues Memo 11.05.12 (PDF)  Attachment C: Council Minutes 11.05.12 (PDF)  Attachment D: Commercial Downtown Map Indicating 2009 GF Zone Modifications (PDF)  Attachment E: GF Zone District Permitted and Conditional Uses (PDF)  Attachment F: Palo Alto Municipal Code Chapter 18.80 (Zoning Amendments) (PDF) 1 Planning and Transportation Commission 1 Verbatim Minutes 2 January 30, 2013 3 4 EXCERPT 5 6 Rezoning to Apply the Ground Floor (GF) Combining District (Section 18.30(C) of the 7 Municipal Code) To Properties in the 600 Block of Emerson Street 8 9 Chair Martinez: We are going to continue on with the Item 2, a public hearing to consider 10 rezoning to Ground Floor (GF) Combining District a portion of the 600 Block of Emerson Street. 11 And we are going to being with a staff report from our, what is your title now? 12 13 Amy French, Chief Planning Official: Chief Planning Official, please. 14 15 Chair Martinez: From our eminent Chief Planning Official. Thank you. 16 17 Ms. French: Good evening Chair and Commissioners. We have before you a proposal to rezone 18 the 600 Block of Emerson Street to add the Combining District called Ground Floor (GF). And 19 this came from the Council through a colleague’s memo that was discussed as reflected in 20 minutes provided to you in your report and summarized a bit in the report. The focus that the 21 Council wanted staff to go to was this Emerson Street, it was somewhat of an urgent request to 22 get right on it. There is some concern of some stores perhaps flipping to office. There’s been 23 one store that has gone that way Fraiche and that went to an office, office space. There’s another 24 store that’s the florist that is winding down and there’s some interest there. And so it is a vital 25 street. It provides restaurants and some retail shops. It’s a corridor that leads folks from the 26 parts of downtown to Whole Foods. It’s an active walking area. There’s a hotel on the way on 27 the corner there of Hamilton and Emerson. So it’s an exciting little strip of retail and restaurant 28 and some office. 29 30 So there’s an existing office there. One of the offices is 625 to 631 Emerson. That particular 31 address we did have a call from the property owner, Jim Thoits, who asked about what rights, 32 what does this mean, so I kind of explained that first of all that particular site is a Category 2 33 Historic Building. It has grandfathered office. Grandfathered is a term from our Zoning Code, 34 Chapter 18.18.120, that’s the section, and it allows continued use of office. If it goes 12 months 35 or more vacant then it’s subject to changing to a conforming use. So going with the Ground 36 Floor zoning if it were vacant for 12 or more months it would be subject to going to the allowed 37 or conditional uses in that district. Another concern that people might have of putting a GF 38 overlay would be if somebody decides to go from office to retail then you can’t go back to 39 office. So if a conforming use retail goes in there then it’s hard to go from, you can’t go from 40 retail back to office in the GF overlay. 41 42 There are provisions about replacing facilities that have nonconforming uses and you can 43 actually replace such facilities as long as you don’t increase the floor area for the nonconforming 44 uses: height, envelope, lot coverage, that sort of thing. So basically there’s a draft ordinance that 45 reflects tonight’s date that would be changed to the 13th. We were trying to get folks here from 46 the street. We did send out some notices. We had an outreach meeting where two property 47 owners attended. So we’re hoping the word gets out and some people might come to the meeting 48 on the 13th. So we were suggesting opening the public hearing and continuing to that date but 49 2 having a full discussion tonight on the thoughts you might have on the extent of the Ground 1 Floor overlay. The map that’s attached called Exhibit 1 to the draft ordinance shows the 2 properties that staff supports the Ground Floor overlay addition. 3 4 So I know at the pre-commission meeting there was a question about why is this not a taking. 5 And so if there’s an interest in that basically we did this back in 2009 so I’ll direct you to the 6 map. Up here we removed the Ground Floor overlay which was a lessening of restrictions on 7 these green reflected parcels. We added the Ground Floor overlay on these parcels and these 8 parcels. These parcels are abutting this Emerson block here. So that was not considered a 9 taking. Again, if a zoning district changes and there’s an existing legal nonconforming use 10 created from that zone change that use can remain. So it’s not a taking in that sense because it’s 11 not, we’re not amortizing the uses. And I’m here for questions. I’m sad that we don’t have any 12 of the property owners that I thought might be coming tonight. 13 14 Chair Martinez: So we don’t really have to make any recommendation or vote or anything 15 tonight. 16 17 Ms. French: That’s correct. 18 19 Chair Martinez: We’re going to give you some feedback. 20 21 Ms. French: Please. 22 23 Chair Martinez: And hopefully we’ll get some property owners either to write in or to come and 24 give us their view on how this would affect them. Could you talk about other blocks downtown 25 where there’s a Combining District and how well that is served property owners and the City and 26 residents? 27 28 Ms. French: Sure. Well again I go back to the 2009, where if you see here on this map that’s up 29 on the screen that we have the pink properties which are the Ground Floor Combining Districts. 30 This is the core of the downtown where in 2009 it was decided that this was the important area 31 that should remain primarily retail and services and not have those ground floor offices. 32 Whereas it was determined that these outer yellow areas were kind of on the boundaries of that 33 core and could, the market forces could come and go and have some flexibility. I think if 34 answering your question that darker pink that was added, the GF was placed that was, that’s a 35 movie theatre and that was something that was seen as important to retain that movie theatre 36 certainly and not have that go office. It’s a value in the community and its serving the 37 neighborhood. Some other areas that were seen as important to add the GF overlay was this area 38 here which is across from some other retail and a GF Zone. 39 40 I think ground floor retail, personal services the list is attached to the ordinance of allowable 41 uses, permitted uses, and conditionally permitted uses. The conditionally permitted uses in the 42 GF Zone include gyms, commercial service, and commercial recreation. So a yoga studio, a 43 gym might also fit nicely with retail and personal services, that kind of thing. I’m not sure if that 44 answered that. 45 46 Chair Martinez: Not exactly, but I’ll ask it again later on in a slightly different way. Let’s open 47 the public hearing. Do we have any speaker cards? 48 49 3 Acting Vice-Chair Keller: No we don’t have any speaker cards for tonight. 1 2 Chair Martinez: Fine, then I’m going to close (interrupted) 3 4 Acting Vice-Chair Keller: No, we keep it open till next time. 5 6 Chair Martinez: Till when? 7 8 Acting Vice-Chair Keller: I think we’re supposed to keep the public hearing open and then 9 continue it for next week. When it comes back before us. 10 11 Chair Martinez: Oh, yes. 12 13 Acting Vice-Chair Keller: So we don’t close it at all. 14 15 Chair Martinez: That’s an exception. City Attorney, please? 16 17 Cara Silver, Sr. Assistant City Attorney: Yes, at the conclusion of your discussion I’m assuming 18 that you’ll want to just make an announcement that this is being continued to February 13th and 19 the public hearing will remain open until that time. 20 21 Chair Martinez: Ok, excellent. Ok then Commissioners, comments. I’m going to start with 22 Commissioner Alcheck. 23 24 Commissioner Alcheck: Ok, so I have a few, some questions and comments so maybe we can 25 engage. Ok, so obviously the determination of the best use for a parcel is subjective to some 26 extent and doesn’t therefore coincide with the highest value that you could obtain per square foot 27 for that parcel. I’m assuming that the Council Members who sort of wrote that memo have made 28 this subjective decision about how they feel about what the best use is for those ground floor 29 square feet. One of the thoughts that I had was that and I know there’s a legal definition for a 30 taking, but one of the thoughts I had was that if we restrict the use here in a way that we 31 subjectively feel is preferred we are in a sense taking some value away if that use doesn’t reflect 32 the use that could command the highest dollar on the market. So if office space is going to get 33 their property owners $7 a square foot and retail is only going to get them $5.50 to some extent 34 it’s a taking. 35 36 And I understand that they can be legal non-conforming and if they can get a tenant in every 12 37 months they can continue for the rest of their lives I’m assuming, but one thing I’m wondering is 38 if it would be possible the next time we review this, to have information regarding how many 39 square feet each one of these parcels has on the ground floor versus other floors. Are these 40 single story buildings? Are they second and third floor buildings? I think it would be also 41 helpful if we to some, I know this is very subjective too, but I would sort of like to know the age 42 of these parcels or the buildings on these parcels. Because if they’re exceptionally old and 43 they’re single story and these individuals have the intention of redeveloping, I’m just sort of 44 curious to know if this change will likely encourage a lot of development because now an owner 45 is sort of interested in increasing his office space and he can’t do it on the ground floor so he’s 46 going to build another couple stories. I’m just curious. So I think it would be interesting to 47 know the age of the various buildings. 48 49 4 I guess kind of a greater discussion about why it’s not a taking would be helpful. I’m sure that 1 there are a lot of intricacies to that discussion, but I think we can handle it. I think we can handle 2 that level of detail. At least I know that if we can’t handle it you’ll be able to distill it in a way 3 that we can so… (trails off) 4 5 Chair Martinez: Are you done? 6 7 Commissioner Alcheck: Yeah, I mean unless you think that would be possible? 8 9 Ms. French: I have no problem providing the data that you’re asking for and I think if we can 10 provide a handout on the takings and a clarification as to how that applies in this case hopefully 11 that will address your questions. 12 13 Commissioner Alcheck: And I guess drawing on my fellow Commissioners’ experience and 14 yours that anybody can really comment on this is this perceived to be something that’s going to 15 be highly contentious? Do we expect a lot of… (trails off) 16 17 Ms. French: I think, we’ve sent out notice cards for outreach meetings. We sent notice for this 18 meeting. The Council has pretty much initiated this change and so my, I suspect that it’s not 19 controversial otherwise we would see a few people here and we’ll wait till next time and see if 20 somebody comes next week at the point of decision, but… (trails off) 21 22 Chair Martinez: Alright. Commissioner Tanaka, questions or comments or do you want us to 23 come back? 24 25 Commissioner Tanaka: So I guess one thing I was thinking about as and your deliberation about 26 it is whether this is a taking of property rights or not is, can there be a concept of having a bonus 27 for having retail on the bottom? Some sort of incentive? 28 29 Ms. French: There could be. In the CD District there is currently the capacity for receiving 30 transferable development rights that are in the code now and currently those carry with them up 31 to 5,000 square feet per site free of parking spaces associated. So there is, and there is kind of a 32 one-time bonus as well. There’s some Americans with Disabilities Act of 1990 (ADA) bonuses 33 for making existing facilities into ADA compliant. So there are some bonuses currently 34 available to any CD owned property that isn’t over its maximum Floor Area Ratio (FAR). 35 36 Commissioner Tanaka: Ok because I think from the public point of view I think having retail on 37 the bottom, having a very vibrant downtown is to the benefit of the public, but from the property 38 owner point of view I understand that that could be viewed as a taking because they get less rent 39 perhaps. So perhaps one way to kind of balance it is to have perhaps these Transportation 40 Demand Management (TDR) rights that allow them to in some ways get compensated for that so 41 that they benefit and the public benefits by having a more vibrant downtown. So perhaps that 42 could be contemplated and some sort of structure can be proposed that might work. 43 44 Ms. French: Sure and I’d be happy to clarify in a report what bonuses there are available to these 45 properties and the bonuses that wouldn’t change by this action. 46 47 Commissioner Tanaka: Yeah or what bonus might, what new bonus might be necessary to 48 actually let’s say there’s currently an office there to incentivize the owner to convert or if we do 49 5 have this overlay what would be fair for the affected property owner. I actually don’t know what 1 rents are in downtown Palo Alto, but that would be actually interesting to have a list of what is 2 the retail rental rate and what is the office rental rate. I know this is a little bit always in flux, but 3 it would be good to understand what is the value difference between the two. Thank you. 4 5 Commissioner Alcheck: If I could just quickly add something I think it would also be 6 (interrupted) 7 8 Chair Martinez: You have to be recognized by the Chair. I’m actually going to come back to 9 you. Commissioner Panelli. 10 11 Commissioner Panelli: Thank you Mr. Chair. First I want to say I understand why Council or 12 some Members of the Council brought this up. There are aesthetic reasons for it; there are 13 vibrancy reasons for it. Office space generally isn’t alive in the evenings and it’s hard to have a 14 thriving downtown area if you don’t have life on those ground floors. Totally makes sense. 15 Also makes sense economically from the City’s perspective. Most offices don’t generate sales 16 tax. Storefronts do. So I understand that and I understand what the concerns about property 17 rights and taking. I’m definitely sensitive to that, but what I, the point I’m going to try to make 18 here is that this is where we are looking at things through a microscope yet they are so 19 interconnected. 20 21 When we talk about things like building height and density if you talk to some of these retailers 22 and I have, a lot of their complaints are that their businesses are Friday and Saturday businesses 23 and they don’t have enough business on those other four or five days a week to sustain their 24 business. And so I think the real answer is, is there a way that the highest and best use for these 25 properties that we want to maintain as retail storefronts is there a way for us to make those the 26 highest and best use? And I think one of the only ways to do that is to have a much more vibrant 27 life downtown so that you have a vibrant daytime weekly activity. Restaurants serving the 28 working public and then you also have a vibrant nighttime activity, nighttime activity seven days 29 a week. And the only way to do that is to get certain kinds of people, probably singles or 30 childless couples to live downtown and spend downtown and keep these businesses alive. And 31 so I hate having this kind of a conversation about this one block of a street when we’re not really, 32 when I think planning I want to think big and I want to, I want us to make decisions holistically. 33 And so I, this is where I struggle because I think there’s a way to make the retail use the highest 34 and best use, but the only way to do that is to have a better master plan that somehow allows us 35 to have more dwelling density downtown. Thanks. 36 37 Chair Martinez: Assistant Director, you had some comment in this regard. 38 39 Aaron Aknin, Assistant Director: Yes, good point Commissioner Panelli. I think what we have 40 here is both kind of a short term action and then a longer term vision that has to develop. The 41 Council when they were initially discussing it they had this discussion should this be a broader 42 ground floor protection ordinance passed or should it just be focused on this one area. I think 43 they made the decision and the recommendation to move forward that this one stretch was the 44 most susceptible to conversion in the short term and that something needed to be done now in 45 order to stop that. 46 47 Phase two is the Downtown Development Cap Study, which the Commission provided input on 48 earlier in January and that’s going to take a more comprehensive look at a number of things, 49 6 everything from building heights to economic studies on what is the amount of retail that is 1 viable in the downtown area? What’s the amount of housing that’s viable and how are they all 2 connected? You take out too much office you’re not going to have that daytime population in 3 order to support the retail. You don’t have enough housing you don’t have the nighttime support 4 of businesses. So you’re correct, they all interplay together and I think really taking a look at a 5 comprehensive approach is going to be key over the next year. In the short term though the 6 direction was hey, let’s take a look at this one block and let’s make a recommendation to change 7 this on this one block and then we’ll also include this one block in our overall study as well in 8 the long term, but in the short term to stop conversions let’s do this now. Thank you. 9 10 Ms. French: I’d also like to add something in that. That hotel that’s coming on the corner might 11 help a little bit with some of those restaurants during the rest of the week. I’m just guessing. 12 13 Commissioner Panelli: My point wasn’t necessarily just for that stretch of Emerson. I’m talking 14 about all the businesses downtown and especially the places where you see a high amount of 15 turnover. You know Mantra’s gone and it didn’t, it lasted not quite as long as it could have so 16 I’m talking about more holistically. Anyway, thank you. 17 18 Chair Martinez: Vice-Chair. 19 20 Acting Vice-Chair Keller: Thank you. So firstly on the block of Emerson we’re referring to on 21 one side of the street there are two restaurants, Mantra’s being replaced by a new restaurant, 22 Tacolicious that’s under construction and there’s also the Gordon Biersch that’s a restaurant 23 that’s bringing vibrant, these restaurants do bring some foot traffic. I also notice that there’s 24 actually I’m not sure the status of this but in front of what used to be Mantra/Tacolicious there’s 25 actually the sidewalk is cordoned off with, and I’m not sure the status of that whether it’s 26 supposed to be cordoned off or that going away? 27 28 Ms. French: I can answer that. That’s the tenant improvement for Tacolicious. That’s under 29 construction. 30 31 Acting Vice-Chair Keller: No I’m not talking about that. There’s, when Mantra was there, part 32 of the sidewalk, approximately a third was enclosed in barricade (interrupted) 33 34 Ms. French: Yeah that was, if I may? Outdoor seating for Mantra. I believe they had because 35 they had service of alcohol they were doing some kind of Alcoholic Beverage Control (ABC) 36 required barrier in order to have service outside. 37 38 Acting Vice-Chair Keller: And that’s going to continue or not? 39 40 Ms. French: Well Tacolicious would have to go through that review with the City and the ABC 41 to provide an alcohol barrier and have the tables and chairs looked at, encroachment permit. 42 43 Acting Vice-Chair Keller: So there are other, the restaurants on University Avenue don’t have 44 barriers and are they prohibited from serving alcohol on the street? On the sidewalk? 45 46 Ms. French: Yeah, some of them do and some of them are on the property itself, the private 47 property. There’s not a lot of places where they are actually on City right of way, but there’s a 48 whole process for that. City right of way encroachment permits, ABC barriers, and there’s 49 7 certain things that they can and can’t do so it’s kind of a conversation that I’m not ready for all of 1 that right now. 2 3 Acting Vice-Chair Keller: Ok well La Strada and Joya are on the sidewalk and I believe they 4 serve alcohol to the tables on the sidewalk so I’m not sure why there’s barricade on Emerson and 5 no barricade on University. So perhaps when this comes back you can explain that. 6 7 Mr. Aknin: Yeah we can do that. I mean a lot of these permits are issued through the 8 Department of Alcoholic Beverage Control so we’ll check on what their standards are, but my 9 understanding is that you need at least I think a three and a half foot barrier between where you 10 serve alcohol and where the public right of way is so it might be dependent on where the chairs 11 are, whether they’re on private property or not, but yeah, we could look into that. 12 13 Acting Vice-Chair Keller: And on the other side there is Buca di Beppo and Empire Tap Room 14 so there is some degree of foot traffic generated by these. And when you have gaps in this then 15 it sort of kills the foot traffic because foot traffic doesn’t like going in front of things that are not 16 retail. People like walking by retail and that’s one of the reasons if I understand correctly that 17 CDC Zone requires that the buildings be pedestrian friendly, that they be ground floor friendly 18 and does that mean they be capable of having ground floor retail or does it mean that they just 19 have to be compatible with people walking by? 20 21 Ms. French: Yes so the CDCP regulations without the GF require that the design of the building 22 accommodate retail. In other words we don’t want to see people blocking things off and shutting 23 away from the street and the pedestrian visibility. So even if you had an office the P Combining 24 Districts requirements and the CDC requirements are that there’s some exposure, there’s some 25 display windows even if there’s office or something else besides retail there. 26 27 Acting Vice-Chair Keller: And so for example when 180 Hamilton if that goes forward that’s in 28 CDCP, but no longer in CDC GFP and therefore the ground floor has to be compatible with 29 retail. Is that the idea? 30 31 Ms. French: So 180 Hamilton is the Hotel and they’re going to have a restaurant at the ground 32 floor. I’m not sure which one you’re (interrupted) 33 34 Acting Vice-Chair Keller: So maybe I’m wrong. I mean 135 Hamilton or is it 125 Hamilton? 35 The parking lot that’s (interrupted) 36 37 Ms. French: That doesn’t have the GF overlay that has the CDC. So yes they do have display 38 windows even if it’s office on the ground floor. 39 40 Acting Vice-Chair Keller: And if you, the former Waterworks which was an office until, it looks 41 like it’s vacant now, the former Diddams, these were in CDC GFP so how did they get turned 42 into office for a couple of years? 43 44 Ms. French: That’s an anomaly and was not portrayed as a conversion to office. That’s a long 45 story, but they were not authorized to have office. That’s color, yeah. 46 47 8 Mr. Aknin: And I could actually add to that. We, it’s vacant now. The leasing agent put up an 1 advertisement for that and we actually made contact with the leasing agent in order to basically 2 have them revise their listing to show that there are ground floor requirements. 3 4 Acting Vice-Chair Keller: Ok, thank you. So what kind of issue in terms of taking happened 5 when the property along Hamilton that was converted from, as to which the Ground Floor was 6 added in 2009 from Fraiche to I guess Inhabiture? 7 8 Ms. French: Yes, so if I may the properties from 200 to 240 Hamilton that received Ground 9 Floor Combining District in 2009, that’s the stretch you’re referring to, so I’m sorry now what is 10 your question about that? 11 12 Acting Vice-Chair Keller: What considerations were done at that time in terms of what was 13 required in order to do that and in terms of potential takings issues? 14 15 Ms. French: I don’t recall the questions about takings at that time in 2009. I can come back with 16 minutes as to what the conversations were on that. 17 18 Acting Vice-Chair Keller: Were the property owners complaining about it or were they ok with 19 it? 20 21 Ms. French: Well the Thoits brothers own 200 to 228. That stretch was designed as retail on the 22 ground floor with office above. The 230 to 238 is the Reposado and so that was a restaurant at 23 the time and is today. The only kind of, the only site that’s been a bit of a question on that is 240 24 Hamilton. It was a retail shop as well there was this Waze thing next to it (interrupted) 25 26 Acting Vice-Chair Keller: Waze is there now. 27 28 Ms. French: So that, before the GF that was whatever it is and remains so. Again if it’s 29 nonconforming it continues to be nonconforming in the GF category. There is an application on 30 file for the 240 Hamilton property if that’s an interest. 31 32 Mr. Aknin: But in terms of what the previous concerns, we could bring those back to you in our 33 next report. We could do a little research. 34 35 Acting Vice-Chair Keller: Thank you that would be helpful because obviously the issues we 36 dealt with for that addition should be similar to the issues we deal with now so to the extent that 37 it wasn’t an issue then it may or may not be an issue now. So I’ll close with two things. One is 38 could you explain why the property that used to contain the cleaners at the corner of Forest and 39 Emerson why that property isn’t being added? 40 41 Ms. French: Yes. So that property I enumerated some of the reasons in the staff report. It is at a 42 corner where all four corners are currently office use. So that’s not a retail use that needs 43 protecting at this time. It was designed as a drive thru dry cleaner. It was converted to a 44 conditional use, through Conditional Use Permit (CUP) to a recreation facility, commercial 45 recreation. They moved on and then it went to office. And I think the property owner who did 46 come to the outreach meeting and was talking about coming tonight was concerned and asked 47 that we not include that in the Ground Floor restrictions. I think for the same reason staff 48 enumerated in the report. It’s not really a retail corner; all four corners are not retail. It’s not a 49 9 building that’s conducive to retail as currently configured. It’s likely to have a historic aspect to 1 it, so modifying the building is going to be, you know I don’t think the owner plans to modify 2 the ground floor of the building. And there may be some other reasons, but we did have some 3 input from a couple of property owners and that was one of the property owners that came. 4 5 Acting Vice-Chair Keller: Well I, just let me finish this and then I’ll move on. Yes, I would 6 prefer that if this project, if this property is redeveloped with a bigger some multistory building 7 that it be ground floor retail because it would connect will all the stuff next to it and if it’s not 8 redeveloped and it continues as office, it can continue that way because it’s a legal 9 nonconforming use. So I would suggest that that be included in the future. Thank you. 10 11 Chair Martinez: Ms. City Attorney I would like you to brief us on the City’s right to provide 12 zoning for its parcels. 13 14 Ms. Silver: Sure. Cara Silver, Senior Assistant City Attorney. The City has very broad police 15 powers in this area. It’s very common for cities to adjust zoning ordinances as time goes by. 16 Cities frequently upzone to further allow development and likewise downzone to reduce 17 development potential on properties. It’s rare that a zoning decision such as this rises to the level 18 of an actual taking that would be compensable under the Constitution. Generally what courts 19 look at when they decide whether a zoning regulation constitutes a taking is whether the 20 regulation would deprive the property owner of all economically viable uses on the property. So 21 it’s a pretty, it’s a pretty tough standard to meet and we don’t think that this particular zoning 22 action gives rise to a taking but we will come back at your request with additional information on 23 the taking principles. 24 25 Chair Martinez: Thank you. I don’t believe that the proposed rezoning is either subjective nor is 26 it a taking. It’s not subjective in that I don’t believe that we are deciding something that is quite 27 arbitrary. I believe the staff’s consideration for the retail uses of the street are quite well 28 founded. That as an urbanist you just have to walk down the street and you feel it’s one of 29 potentially the best retail centers downtown. There is so much that could be done on a street like 30 this, you know, lighting of the trees, festivals, closing of the street, making it more of a 31 pedestrian place. 32 33 The retail is there. The retail is an important element of downtown. It may be this year that 34 office rents are higher than retail. It may be in two years that offices slump like they did five 35 years ago and throughout the Bay Area and retail values are higher. I objected when we first 36 considered allowing offices in ground floor retail because I don’t think we can project what the 37 economy is going to want to do with the space, but I think we can make good land use decisions 38 about what the downtown, what creates this great retail downtown as Commissioner Panelli 39 pointed to, based on the adjacencies, the quality of the nearby retail, the connections from one 40 place to another. And this one makes absolutely good sense to continue on the path of the 41 ground floor retail overlay. 42 43 I would like to second Commissioner Keller’s point. You can make the case that every building 44 on this block is historic. And to single out this former dry cleaning building as not appropriate, I 45 think is a mistake. We’re getting into sort of spot zoning for the purpose of accommodating an 46 individual owner or a current use that I think is totally inappropriate. As we walked by there this 47 evening we saw the possibility of outdoor dining on the corner under that triangle, the removal of 48 these ugly parking spots, creating a gateway from, what direction is that, south? To this really 49 10 potentially vibrant downtown area. Our Economic Development Director’s talked about a place 1 for to attract young people that don’t want to live in the City because there’s nothing like this for 2 them. This is a perfect kind of place and it doesn’t have to be a beer garden on the top of 160 3 foot high building. It could be right in what we have right now. 4 5 So I would like us in our next round, perhaps our final round to get back to looking at not these 6 esoteric legal issues about what’s being proposed, but really considering what staff has and the 7 Council has asked us to consider and comment on. And that’s the idea of rezoning the 600 8 Block, one block, a few buildings, to ground floor retail and get comments on whether what the 9 staff has proposed could be enhanced as Commissioner Keller has suggested or really there are 10 things that really should limit the amount of ground floor retail in this area. I haven’t heard that 11 yet, but I’d like us since it’s coming back to us in two weeks to offer some comments to staff to 12 consider like Commissioner Keller did, that suggest that maybe the plan needs, can be refined to 13 make it an even stronger or more reasonable plan as it can be. So I’d like to go back to 14 Commissioner Alcheck. You want to give a round of comments? 15 16 Commissioner Alcheck: First I apologize for speaking out of turn. 17 18 Chair Martinez: I do it all the time. 19 20 Commissioner Alcheck: Ok. My quick addition that I wanted to say earlier was please add to 21 this report specifics about each parcel as to which ones are legal, would be legal nonconforming 22 as a result of this decision. And like I said earlier I’d like to know how many floors each of these 23 parcel’s buildings have. So if for example it would be helpful to know how many would actually 24 be put in that position. 25 26 Just since we’re making our last round here I do think this is, I mean I think there is subjectivity 27 to this. And to be clear as a land use attorney I’m extremely familiar with the takings concepts. 28 I just think that including that sort of analysis in these reports which we make public and we give 29 to the public helps them understand why it’s not. And if a public individual makes a very 30 dramatic or passionate statement about how this is extremely burdensome on themselves we can 31 sort of refer to material that reflects that. So that’s why I think that was important to include and 32 really it’s for everyone’s benefit. 33 34 And then I want to agree with Chair Martinez and Commissioner Keller. I think it’s sort of odd 35 that that corner is, because it’s nonconforming now or would not, if we included that it would be 36 a legal nonconforming use and it’s sort of odd that we’re not including it. And I think they have 37 a very strong point that it would be the preferred zone even for that corner if it wasn’t for the 38 individual who’s not happy with the idea. And I guess I want to say that if we, if you come back 39 and say all the ones that we’re considering are actually already retail, so we’re really just 40 protecting it, then I would argue that to some extent if we included the ones that are not currently 41 retail like this corner unit, we’re sort of increasing the value of office ground floor on that street 42 for any unit. Because they have to go 12 months with a vacancy and it sort of artificially 43 increases the value of office space on that street because there’s no other option, right? 44 45 And I think we’re going to kind of hit a wall in how much office space there is so office space is 46 just going to continue to get more and more expensive. And so I just want to argue that if we 47 allow these ground floor spaces to continue to be office under this zone by allowing them to have 48 this sort of 12 month period that they can, if they can find office they can keep doing it. I don’t 49 11 know if we’re ever going to really achieve that result that we want because again we’re 1 artificially increasing the value of office space by ensuring that none of the competitors when 2 they go vacant on that street who are currently retail can have office space. So I just, I wonder to 3 myself how effective this is. If we include that corner property he never has a vacancy that’s 4 greater than 12 months it’ll never be a retail. If he can get more dollars per square foot than 5 retail and I imagine that office space will get more valuable there as a result of the fact that we’re 6 going to have less and less available office space. So I just want to throw it out there and the 7 reason why I mentioned that is because at the end of the day if we decide that we want this to be 8 retail, are we really not accomplishing that goal by having that “loophole” for existing parcels. 9 So I think that would be good to have kind of a greater discussion on that. 10 11 Chair Martinez: Commissioner like I said I always, I interrupt all the time myself. And I, that 12 corner property is a one story building. To me it looks vulnerable to be demolished with a new 13 multilevel building of offices above it. If we rezone it, the ground floor will be retail. So I think 14 there are other aspects to this. I think we’re in an office boom in this community right now that 15 hasn’t always been the case. It may not always be the case. And you know we think that office 16 is in such demand that it will just always be that way, but 10 years ago that wasn’t the case. 17 18 So we can’t zone and then rezone back and then rezone again. We made that mistake before and 19 now we’re trying to correct for some of these mistakes I think. This is a solid location for retail. 20 It can get even better with some public improvements like we talked about on the last item and 21 the strength of retail downtown is probably the most vulnerable thing we have going for us right 22 now in another very strong downtown. Commissioner Tanaka. 23 24 Commissioner Tanaka: So I just want to start off saying that I also agree that these two parcels 25 that were excluded I think makes a lot of sense to have it be continuous and to actually include 26 them in this proposal for all the same reasons that were mentioned before. 27 28 And I guess my last comment really is about so this may not legally be taking, but I think to what 29 Commissioner Alcheck’s been saying in terms of well, because of this loophole it’ll never 30 change to the desired retail use. And so I think that’s also why I was speaking earlier and I 31 wasn’t really thinking about it from the legal point of view whether we have to compensate 32 people, but it was more to give people incentive to say, well look if we actually put retail there 33 then we could get some sort of bonus, some sort of incentive so there’s some sort of mechanism 34 that would encourage this change to retail versus people indefinitely keeping it office. So that’s 35 what I think at the next time this comes around to us, I think for staff to think about what kind of 36 incentives can be made to encourage this use or this conversion back to retail I think would be a 37 good thing. Thanks. 38 39 Chair Martinez: Thank you Commissioner. Commissioner Panelli. 40 41 Commissioner Panelli: Yeah I want to just pick up on where Greg left off and actually ask my 42 esteemed colleagues here, if the comments you made about the corner property that used to be 43 the drycleaner also applies to Congressperson Eshoo’s office, because we didn’t talk about that. 44 But I think Commissioner Tanaka just mentioned it. 45 46 I’d also just like to reiterate my comments from before which is I think the best way for us to 47 avoid any contentious issues and solve the problem is to just make sure that we have such a 48 vibrant daytime and nighttime seven day a week viable traffic, sufficient traffic, viable traffic for 49 12 these retail establishments to do well and make that effectively the highest and best use. I think 1 that’s the best way for us to accomplish these goals. 2 3 And then the last point I wanted to make was simply for Chair Martinez. I think when 4 Commissioner Alcheck said it was subjective I don’t think he meant that the idea of a ground 5 floor retail zone was subjective or extending it is subjective. But where I do think there is 6 subjectivity right now because we don’t have any data is how big should that GF Combining 7 District be? How many blocks, how many streets should it be? And I do think that’s subjective 8 because we don’t know, we don’t have the data to say what the right economic balance is. And 9 it sounds like we’re going to try to do something on that order, but we don’t have that today. So 10 I think that’s, that’s how I interpreted his comments. Thanks. 11 12 Chair Martinez: Good point. Vice-Chair. 13 14 Acting Vice-Chair Keller: Thank you. So the first comment I’m going to make is that 15 contiguous retail is the most likely to be vibrant retail. And when you have retail that’s isolated 16 it means that people have to take a special trip to get there; they’re not going to be, it’s not going 17 to be as pedestrian friendly. So it seems to me important to retain the retail we have because 18 every, of the properties that converts from retail to office puts pressure on the other properties to 19 be converted from retail to office because it makes those other properties less viable as retail. So 20 for me the issue is not let’s convert all the retail. For me the issue is let’s retain the degree of 21 vibrancy that we already have by making sure that if it’s retail it stays as retail and if ever, and 22 the office if it ever becomes retail it stays as retail. 23 24 Now I understand that Commissioner Alcheck being in the real estate business understands this 25 much more than me. I’m just a computer scientist, but I’m curious about the idea that if a 26 property is, if somebody doesn’t want their property to be vacant for 12 months in order for it to 27 turn into retail that they raise the rent on it? It seems that if the rents are too high then it will stay 28 vacant for 12 months and therefore you need to keep, if the property owner wants to keep it as 29 office they have to keep the rents low enough so that it stays as office because otherwise when it 30 gets vacant for 12 months it will have to be retail. So maybe I don’t understand that, but that’s 31 what I think is there. On the other hand what it does do is it says it may put more demand for 32 office because there’s a limited amount of it. But the fact that it can’t be vacant for more than 12 33 months puts some limitation on that. 34 35 The next thing is I don’t know whether GF is compatible with CDS. Can you apply GF overlay 36 to CDS? 37 38 Ms. French: It would be the first CDS GF downtown property if you went with that in Eshoo’s 39 office, but it does allow Chapter 18.30(C) is the Ground Floor Combining District and it does say 40 it’s intended to modify the uses allowed in the CD Commercial Downtown District and sub 41 districts, so the CDC is the district we usually see it applied to. The CDS is another such 42 downtown commercial district. So it can be. This would be the first. 43 44 Acting Vice-Chair Keller: Ok, thank you. So, clearly with 203 I think is a no brainer for that to 45 be added from my perspective for that to be added to the GF Zone. I don’t think that there’s any 46 justification for that makes sense. I think that that should be, if it gets redeveloped and I don’t 47 see how that, I’m not sure that it would be a historic building, but if it were redeveloped and it 48 13 was office it could stay office, right? So I think that that being ripe for redevelopment and even 1 useable as a ground floor restaurant should be added to Ground Floor. 2 3 With respect to the other side I am sympathetic with the idea of making, adding that. The fact 4 that it would be a new precedent adding GF to CDS means that it requires a little bit more 5 thought. But on the other hand those storefronts are pedestrian friendly in the sense and 6 therefore at one point in time more of those offices all the way around were retail or so they were 7 designed as retail. They were retail. So on the basis of that I think it’s worthwhile considering 8 them as being retail, as adding them to GF. I do think that at least the half of the block that’s in 9 the corner as opposed to the part that’s on High, but I do think that it makes sense to add that. 10 But they as long as they stay office use they would stay that way so I’m not sure we need to 11 incentivize things to become retail. It’s just that we don’t want to go the other way because that 12 loses retail. And I am curious to hear from Commissioner Alcheck after the Chair recognizes 13 him. But I would say that I am very supportive of the idea of doing the Ground Floor overlay. I 14 think it retains this as a vibrant district otherwise it’s in danger of being lost. Thank you. 15 16 Chair Martinez: Ok, I’m going to allow Commissioner Alcheck to have the last word here. 17 18 Commissioner Alcheck: I don’t want to labor on, but I guess if I can be concise and clear, I’m 19 not against this idea. I just piggyback on Commissioner Panelli’s statement is these 20 “restaurants” need lunchtime traffic. Lunchtime traffic is generated not by local residents 21 because they are at work probably elsewhere or in downtown Palo Alto. So there needs to be 22 sort of this mix of office and ground floor retail service/restaurant. And one of the issues here is 23 how many of these parcels are single story. When you have sort of this multistory environment 24 then we have all these office workers coming to lunch on the ground floors of all these office 25 buildings. I guess I want to say I support this, but I want to also suggest that we can’t be against 26 growing up and also hope that these restaurants do well. 27 28 As someone in the business I think you could probably appreciate this even not being in the 29 business you cannot will a restaurant. That’s the hardest business there is. The person who 30 manages a restaurant has to be all in. It’s tremendous work. There’s even in the best locations 31 they have tremendous turnover. So I would love it if we had a greater diversity of restaurants. 32 We have seven yogurt shops. So there are uses at work and in the marketplace there’s demand 33 and it gets met. And my point earlier was that if we limit office space, existing office space 34 becomes more valuable and to some extent existing retail becomes more valuable because if 35 office space grows those people need a place to eat and existing restaurants in some degree 36 become more viable. And so there is sort of this marketplace that determines which restaurants 37 should survive and which shouldn’t and which retail should survive and which shouldn’t. So I 38 support this. I think we need to create this, but I also support kind of greater density and I think 39 that’s what Commissioner Panelli was suggesting to you and I think they go hand in hand. 40 41 Chair Martinez: Thank you. A great city has great pedestrian spaces and that’s assuming 42 restaurants alone. So I really support this proposal. I would support it if every parcel on this 43 block was to be included in the GF overlay including those precious Victorians because I think in 44 other cities we’ve seen like along Union Street in San Francisco, Victorians being very special 45 kind of boutiques and jewelry stores and things like that, not restaurants. So I would support 46 really a strong overlay for this block and I think it really has the opportunity to not only protect 47 what we have there, but really help be a model for other streets, Waverly and some others that 48 are really at a very similar situation where we have these blank spaces along our walks to, that 49 14 are being filled by something other than retail. So with Commission consent we’d like to 1 continue this to February 13th. 2 3 MOTION 4 5 Acting Vice-Chair Keller: So moved. 6 7 SECOND, VOTE 8 9 Chair Martinez: Second? All in favor, aye (Aye). Passes unanimously. Thank you on that. 10 Yeah, with Commissioner Keller making the Motion and Commissioner Alcheck seconding. 11 Thank you for the record. 12 13 MOTION PASSED (5-0, Vice-Chair Michael absent and one open chair) 14 City of Palo Alto (ID # 3532) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 3/5/2013 City of Palo Alto Page 1 Summary Title: Rezone of Emerson Street Properties on the 600 Block Title: Recommendation of a Draft Ordinance to Rezone all CD-C and CD-S zoned properties fronting Emerson Street on the 600 block to add the Ground Floor Combining District From: Amy French, Chief Planning Official Lead Department: Planning and Community Environment Recommendation Staff recommends that the Planning and Transportation Commission (PTC) receive the report, re-open the public hearing and recommend that the Council adopt the attached draft ordinance (Attachment A) amending the Palo Alto Municipal Code (PAMC) Section 18.08.040 (Zoning Map) to add the Ground Floor (GF) Combining District (Section 18.30(C) of the Municipal Code) to the properties shown on the revised Exhibit 1 and listed by address on the revised Exhibit 2 of the Draft Ordinance. The subject properties generally front the 600 block of Emerson Street between Hamilton Avenue and Forest Avenue. Staff’s recommendation excludes Forest Plaza Building A’s three (3) ground floor non-residential parcels from Exhibits 1 and 2. These parcels (698 Emerson, 171 and 175 Forest) were included in the hearing notice, however, in the event PTC and Council still wish to include them in the properties to be rezoned. Exhibits 1 and 2 would need to be revised to add these if so adopted. Background At this November 5, 2012 Council meeting, the Council initiated the rezoning of Emerson Street properties on the 600 block to add the “Ground Floor (GF) Combining District”. The GF Combining District generally requires that ground floor tenant space be primarily dedicated to retail uses, and does not allow new office uses. The Council initiated the zoning for this particular block of Emerson Street because the block is known for its walk-ability and vitality, for its popular restaurants, and as a corridor or connection for pedestrians from the downtown core to Whole Foods and SOFA II area. Given the high rents for office space in this area that currently exists, the Council directed this re-zoning to move forward without further study or delay as existing retail spaces are vulnerable to conversion. City of Palo Alto Page 2 The following table outlines the properties under discussion: Property Address Tenant West Side of Emerson Street (North to South) 180 Hamilton Avenue Casa Olga, under conversion to The Epiphany Hotel 620 Emerson Street Stanford Florist 624 Emerson Romi Boutique Retail Clothing 628 Emerson Richard Sumner Gallery Retail Art, Frames, Prints 632 Emerson Tacolicious Restaurant, previously Mantra 636 and 640 Emerson Gordon Biersch Restaurant 644 and 648 Emerson Street Buzz All Stars and Shift Offices Ground Floor Condominiums at corner of Emerson and Forest (Forest Plaza)* 698 Emerson Street* Anna Eshoo's Office 171 & 175 Forest Avenue* Anheuser Busch Beer Garage Office East Side of Emerson Street, North to South 611-623 Emerson Street Vivre Fitness 625-631 Emerson Street multiple tenant office building 635 Emerson Street Acme Glass building, single tenant office 643 Emerson Street Bucca de Beppo Restaurant 651 Emerson Street Empire Tap Room Restaurant 203 Forest Street * office tenant (originally drive-through cleaners) The PTC considered this re-zoning proposal at the January 30, 2013 PTC. The PTC opened the public hearing, though there were no members of the public in the Chambers to speak to the item meeting. The PTC requested that the corner parcels not originally included in staff’s recommendation be added to the re-zone proposal. The three property addresses located on the two corner parcels are noted with an asterisk above). The PTC also requested that additional information be brought back for further consideration. Although this meeting was originally scheduled for February 13th, notice cards were sent out alerting affected property owners that this public hearing for this re-zone was re-scheduled for March 5, 2013. Draft Excerpt PTC Minutes of January 30, 2013 are provided as Attachment C . City of Palo Alto Page 3 Discussion PTC Requests At the January, 30, 2012 meeting, the PTC suggested that two buildings: 203 Forest Street on the northeast corner Forest Avenue and Emerson Street and the Forest Plaza Building on the northwest corner of Forest Avenue and Emerson Street be included on the list of properties receiving the GF combining district designation. The PTC also requested the following additional information: 1. Specific data for each parcel to be rezoned, including: the number of floors, ground level floor area, age of property, and which properties would become non-conforming following Council action to rezone the properties; 2. The cost of rent for office and retail space on this block of Emerson; 3. Information regarding the State Office of Alcoholic Beverage Control rules regarding outdoor/sidewalk service of alcohol; 4. Information related to potential incentives to establish or retain retail uses; and 5. An analysis of the rezoning with respect to land use law, specifically “Takings” 6. Summary and meeting minutes from the 2009 rezoning discussions with respect to this taking issue. The requested information is provided below: 1. Property Data Specific data for each property proposed to be rezoned is provided in Attachment B, and the data is summarized below. The three “Forest Plaza, Building A” office condominiums (NW corner of Forest Avenue and Emerson Street), are considered one property for the purpose of this analysis.  Number of floors: Of the 11 developed properties to be rezoned, there are: five (5) one- story buildings, three (3) two-story buildings (two of these are mezzanine buildings), one (1) three story building, one (1) five story building (Forest Plaza Building ‘A’), and one (1) 8 story building (Casa Olga).  Ground floor area: The total ground floor area on the block is approximately 54,000 square feet.  Age of properties: Of the 11 properties to be rezoned: Seven (7) buildings were constructed prior to the 1950’s, four (4) of which are listed on the City’s local historic inventory, and two (2) properties are listed as eligible for listing on the California Register of Historic Resources.  Properties with existing office uses that would become legal non-conforming uses following rezone: There are two (2) properties having office uses considered City of Palo Alto Page 4 “Grandfathered Uses” pursuant to PAMC Section 18.18.120, and three (3) properties having office uses considered “Legal Non-Conforming Uses” subject to the regulations of PAMC Chapter 18.70. The applicable sections are provided as Attachment D to this report and the differences between “grandfathered” and “legal non-conforming” uses is discussed below. In summary, the Code allows the current use of these properties to continue, despite a change in zoning. 2. Cost of Rent on Emerson Street On Emerson Street, office rents are estimated to be between $5 to $6 per square foot. On Emerson Street, retail rents are estimated to be between $3 to $4 per square foot. 3. Alcoholic Beverage Control Regulations and Pedestrian Access Only one restaurant on this block of Emerson Street had gone through the City’s process to place an Alcoholic Beverage Control-standard barrier to provide on sidewalk dining. The Mantra restaurant (closed, now Tacolicious) obtained architectural review approval that included an ABC barrier and required a certain amount of clearance between the barrier and curb, to a degree that is not always available on some streets. This can be a real issue for businesses that would otherwise like to serve alcohol, since the barrier is always required. Mantra’s condition of ARB approval stated, “An Encroachment Permit, to be issued by Public Works, shall be obtained prior to the placement of the tables and chairs on the public sidewalk. A minimum clearance of eight feet between the fencing and the curb must be maintained at all times (Ref. CPA Municipal Code, Section 12.12.020).” 4. Retail Incentives There are currently no code provisions that give property owners incentive to rent to new retail uses rather than other uses. Landlords will generally rent to a use that is allowed under the code and gives them the best return on their investment. The Downtown Development Cap analysis, however, can look into potential retail incentives. The GF and non-conforming use zoning code provisions may, however, give property owners with existing office tenants a disincentive to convert to retail use. This is because once space is rented to a retail tenant; the space can no longer be converted back to office. As long as office rents stay are higher than retail rents, it is unlikely current office landlords will jeopardize this flexibility. 5. Summary of Takings Law The Planning and Transportation Commission requested additional written information on the current state of “takings” law. This is an area of law which has evolved over the years and is a fundamental precept of land use law. The City’s ability to regulate land use and City of Palo Alto Page 5 adopt zoning ordinances derives from the government’s police power. The police power is extremely broad and allows the City to regulate for the public health, safety and welfare of its citizens. This power, however, is limited by the Fifth Amendment to the U.S. Constitution, which states in part, “nor shall private property be taken for public use, without just compensation.” The California Constitution contains a similar provision. Thus, if a land use regulation becomes so unduly restrictive that it causes a “taking” of a landowner’s property for public use, just compensation must be paid. Current takings jurisprudence recognizes three major types of takings (also referred to as “inverse condemnation”): (1) permanent physical invasions (for instance a law requiring landlords to permit cable companies to install cable facilities on privately owned apartment buildings); (2) denials of all economically beneficial use (for instance a downzoning from commercial to open space allowing no development whatsoever); and (3) partial regulatory takings.1 The first two categories of takings are relatively rare and most taking disputes fall into the third category. To determine whether a partial regulatory taking applies, the court applies a three-part test articulated by the United States Supreme Court in Penn Central Transportation Company v. City of New York. Under the Penn Central test, three factors to be considered are: (1) the economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfered with distinct investment backed expectation, and (3) the nature of the governmental actions. The California Supreme Court has adopted the Penn Central test for generally regulatory takings, but has expanded it to include ten additional non-exclusive factors.2 In summary, determining whether a particular ordinance constitutes a “regulatory takings” must be done on a case by case basis. In general, zoning ordinances which apply prospectively and which contain a reasonable “grandfathered or legal non-conforming use” provision allowing the current use or building to continue have been found by courts to be a valid exercise of the police power and do not constitute a taking. Applying the current takings law, staff does not believe the proposed ordinance would constitute a taking. Both Planning and Legal staff proactively ensures that any action recommended to the Commission complies with takings law and will alert the Commission if any action poses risk in this area. ------- 1 A fourth category of takings consists of land use exactions. This category involves the dedication of land or payment of fees as a condition of development. This fourth category is not applicable to this zoning ordinance. 2 Other relevant factors may include (1) whether the regulation interferes with interests that are sufficiently bound up with the reasonable expectations of the claimant to constitute "property" for Fifth Amendment purposes, (2) whether the regulation affects the existing or traditional use of the property, (3) the nature of the state's interest in the regulation, (4) whether the property owner's holding is limited to the specific interest the regulation abrogates or is broader, (5) whether the government is requiring resources to permit or facilitate uniquely public functions, (6) whether the regulation permits the owner to profit and obtain a reasonable return on the investment, (7) whether the regulation provides the owner benefits or rights that mitigate the burdens of the City of Palo Alto Page 6 regulation, (8) whether the regulation prevents the best use of the land, (9) whether the regulation extinguishes a fundamental attribute of ownership, and (10) whether the government is demanding the property as a condition for the granting of a permit. 6. Recap 2009 PTC Discussion At the January 30, 2013 PTC hearing, there were questions related to the 2009 recommendation to add the GF combining district to certain properties and remove the provision of the “Use Exception” from the GF chapter (PAMC Chapter 18.30 C). The 2009 PTC meeting minutes (Attachment E) do not reflect any discussion regarding “Takings”. The PTC and Council determined that the public interest would be served by the proposed rezoning and made the findings for the rezoning. Findings for the rezoning are discussed below. Other Key Issues Ground Floor Office Use in CD-C and CD-S Even with a GF zone combining district, some ground floor office use is allowable. The GF Zone allows lobby area on the ground floor to serve upper floor offices, and allows uses permitted in the underlying CD District to occupy up to 25% of the ground floor, as long as this area is “not fronting on a street.” Grandfathered Uses 625-641 Emerson and 635 Emerson qualify as “Grandfathered Uses” because the buildings contained ground floor office space as of August 28, 1986. Therefore, PAMC Section 18.18.120, Grandfathered Uses and Facilities, applies (Attachment D). This code section states that the grandfathered uses are not subject to the nonconforming use regulations (PAMC 18.70). However, a “grandfathered” use must be replaced with a conforming use following a vacancy of 12 months. Additionally, when a building converts to a conforming use, it must remain conforming. The code section also allows buildings with grandfathered uses to be remodeled, improved, or replaced on the same site, for continual use and occupancy by the same use, provided such remodeling, improvement, or replacement does not increase floor area, shift the building footprint, or increase the building’s height length, building envelope, or any other increase in the size of the improvement. The improvements can also not increase the degree of non-compliance with the code, except as allowed under the exceptions to floor area ratio regulations set forth in Section 18.18.070. Finally, in the case of professional, general business or administrative office uses of a size exceeding 5,000 square feet in the CD-S or CD-N district, remodeling, improvement, or replacement shall not result in increased floor area devoted to office. Please refer to Attachment D for additional details and the full text of the applicable PAMC section. Legal Nonconforming Uses The three (3) office condominiums in Forest Plaza, Building A, appear to have been become office space in the 1990’s. The office use in 203 Forest was established in 1998, replacing the City of Palo Alto Page 7 Cardinal Cleaners; a Financial Institution occupied the space in 2000; a Conditional Use Permit was issued for a Commercial Recreation use in 2002, and office was reestablished more recently. Since these office uses were established after 1986, they are not considered “Grandfathered” but instead are subject to the Non-Conforming Use regulations of PAMC Chapter 18.70 which provide similar protection. For Non-Conforming Uses in the CD Zone District, many of the same requirements as set forth in Item Grandfathered Uses code section apply, such as:  Both non-conforming and “grandfathered” uses are subject to replacement with conforming uses following a vacancy of 12 months.  Facilities for both use types may be remodeled or replaced as long as there is no increase in floor area for that use, building footprint shift, building height or size, or degree of noncompliance. Furthermore, there are additional regulations for nonconforming uses that are not applied to “grandfathered uses”. PAMC Section 18.70.030(b) allows a non-conforming use “to be changed to or replaced by another nonconforming use which would have been permitted under the most recent zoning classification of the property under which the nonconforming use was a conforming use and which is of no higher occupancy rating than the existing nonconforming use”. A nonconforming use cannot be replaced with another nonconforming use unless the Building Official determines the building “is not reasonably capable of conversion to accommodate use and occupancy by a conforming use, without substantial reconstruction or remodeling.” The Building Official is to consider the following factors as he or she makes the determination: (A) Whether changes in the nature of the building or a portion of the building would be required by Title 16 or similar regulations in order to convert the use of the building, or portion of the building, to a conforming use (B) Whether any reconstruction or remodeling necessary to convert the use and occupancy of the building, or a portion of the building, involves structural alterations; (C) Whether the building, or portion of the building, was originally designed and constructed for the particular existing non-conforming use or uses of similar character. Please refer to Attachment D for additional details and the full text of the applicable PAMC section Findings for Map Amendment As noted in the January 30, 2013 staff report, the Council initiated the rezoning by voting to direct staff to pursue immediate rezoning of Emerson Street 600 block, supported by the Colleagues’ Memo and statements made during the Council discussion on November 5, 2012, to satisfy the requirement set forth in PAMC Section 18.80.020 (b) for the motion statement to describe, in general terms, the reasons for consideration of a change in district boundaries. The PTC staff report of January 30, 2013 included PAMC Chapter 18.80 as an attachment. The draft Ordinance contains the requisite Findings, and staff has added citations from the Zoning Code and Comprehensive Plan to support these findings. Essentially, the PTC need only determine that the change of boundaries as presented (or as modified) is in accord with the purpose of City of Palo Alto Page 8 Title 18 and in accord with the Palo Alto Comprehensive Plan. The purposes of Title 18 are set forth in PAMC Section 18.01.020 is as follows: “The purposes of this title shall be to promote and protect the public health, safety, peace, morals, comfort, convenience, and general welfare, including the following more particularly specified purposes: (a) To further, promote, and accomplish the objectives, policies, and programs of the Palo Alto Comprehensive Plan; (b) To lessen congestion and assure convenience of access; to secure safety from fire, flood, and other dangers; to provide for adequate public health, sanitation, and general welfare; to provide for adequate light, air, sunlight, and environmental amenities; to promote and encourage conservation of scarce resources; to prevent overcrowding of land and undue concentration of population, to facilitate the creation of a convenient, attractive and harmonious community; to attain a desirable balance of residential and employment opportunities; and to expedite the provision of adequate and essential public services to the community.” Outreach Notice cards for the December 18, 2012 outreach meeting and PTC public hearings were sent to the merchants and owners of properties on the 600 Block of Emerson Street. Additionally, notice cards were sent to owners of property within 300 feet of the properties to be rezoned, as prescribed in PAMC Chapter 18.80. Staff had emailed Russ Cohen of the Downtown Business District of the outreach meeting and hearings. Mr. Cohen had reached out to the owners, as did the City’s Economic Development Manager, to ensure awareness of the hearings and proposal to rezone these properties. Finally, notices were emailed and hand carried to Emerson Street merchants. Policy Implications In addition to policies that support the retail vitality of the University Avenue/Downtown area, the Palo Alto Comprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University Avenue/Downtown area. Keep the Planning Commission and City Council advised of the findings on an annual basis. City of Palo Alto Page 9 Timeline The Council meeting of March 18, 2013 is tentatively targeted for first reading and adoption of the attached draft ordinance. Environmental Review This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. Courtesy Copies Property owners and tenants of Emerson Street Downtown Business District Representative, Russ Cohen Attachments:  Attachment A: Draft Ordinance 2013 GF Emerson (PDF)  Attachment B: Copy of Emerson Street Building Stats (XLSX)  Attachment C: 01 30 13_Draft_Excerpt (PDF)  Attachment D: Nonconforming and Grandfathered Uses Sections (PDF)  Attachment E: PTC Excerpt Minutes 7 22 09 (DOC)  Attachment F: PTC Excerpt Minutes 9 23 09 (DOC) 1 Planning and Transportation Commission 1 Draft Verbatim Minutes 2 March 5, 2013 3 4 EXCERPT 5 6 Recommendation of a Draft Ordinance to Rezone all CD-C and CD-S zoned properties fronting 7 Emerson Street on the 600 block to add the Ground Floor Combining District. 8 9 Chair Martinez: And go directly to our open our public hearing into our first agendized item, 10 which is to reopen the hearing of, what was the date? February? January 30th, when we heard… 11 I think it’s on the second page. January 30, 2013, where we continued the hearing and 12 recommendation for staff for the Commission to recommend to Council approval of the Ground 13 Floor Combining District of 600 block of Emerson Street to replace the current CD-C and CD-S 14 zoning. 15 16 Now I remember Assistant Director what I was going to speak with you about. I thought it 17 might be a good idea to start with an overview from your perspective before we go into the staff 18 report on this item and how this relates to other things that we’re pursuing in the City. Sorry to 19 spring that on you, but we’ve talked about that in the past. 20 21 Aaron Aknin, Assistant Director: Sure. Aaron Aknin, Assistant Planning Director. For the sake 22 of background this subject of ground floor retail protection and this block in particular came out 23 of a colleague’s memo that the Council had back on November 5th. In that initial colleague’s 24 memo it was, the thought wasn’t just for Emerson, but wider spread protection for ground floor 25 retail within the downtown area. At that night the Council decided that the Emerson Street 26 corridor was the area which was most susceptible to immediate turnover from retail to office 27 space so the focused on that one particular area. However, there was a general discussion that 28 we need to take a look at uses in our overall downtown area. Which uses are most, what uses do 29 we want as a City and which uses are most susceptible to market forces that would turn them in a 30 direction that we don’t want our downtown to go to? So, for tonight focusing on that one block 31 stretch. 32 33 However, as the Commission knows you’ve recently reviewed a downtown development scope, 34 Development Cap scope and even though that one particular policy of the Downtown 35 Development Cap is the subject of it there are a number of other sub policies that relate to that 36 and that includes which areas have ground floor retail protection. Which areas do we want to see 37 office in? What type of parking exemptions should we have in our downtown areas? So while 38 tonight you’re focusing on this one particular block, we’re going to have a chance to take a step 39 back during the downtown development scope RFP and take a look at the broader picture of 40 what type of uses do we want to see in the downtown area and where are those uses most 41 suitable. 42 43 Chair Martinez: Ok, thank you that’s exactly what I was looking for. And now for our staff 44 report. 45 46 Amy French, Chief Planning Official: Ok, I’ll try to reduce my verbiage here. The 600 block of 47 Emerson Street is known for its walkability and vitality, for its popular restaurants, and as a 48 2 corridor or connection for pedestrians from the downtown core to Whole Foods and South of 1 Forest Avenue (SOFA) 2 area. As Aaron noted, the City Council directed this rezoning to the 2 Ground Floor Combining District to move forward without further study or delay since existing 3 retail spaces are vulnerable to conversion. The Ground Floor Combining District does not allow 4 new offices to replace retail uses. 5 6 Staff recommends the Commission reopen the public hearing and recommend Council adoption 7 of the attached draft ordinance, Attachment A, adding the Ground Floor Combining District to 8 the properties shown on the revised Exhibit 1 displayed on the screen. You’ll note that in the 9 January 30th discussion by Commission the map was requested to be revised to add the corner 10 properties. Staff studied it and added just the 203 Forest property on the top end of the map there 11 and not the Forest Plaza Building A ground floor properties. As described in the staff report 12 those were included in the hearing notice for tonight’s hearing should the Planning and 13 Transportation Commission (PTC) wish to include both of those in their recommendation to 14 Council. We would have to go ahead and amend Exhibits 1 and 2 to add the Forest Plaza 15 building if that is the recommendation. 16 17 So the Commission had requested some additional data and information and staff complied and 18 provided that in the report for tonight. And we are available for questions regarding this 19 information. I notice we do have at least one property owner here tonight from the Emerson 20 Street. So it would be great to have some public feedback on this. That concludes my 21 presentation as Chief Planning Official Amy French. 22 23 Chair Martinez: Ok, thank you. We don’t have any speaker cards for this item if you do care to 24 speak. 25 26 Vice-Chair Michael: So the first speaker will be Gary Herman for three minutes to be followed 27 by David Kleiman. 28 29 Gary Herman: Hi, I’m Gary Herman. I live in a residential condominium at 165 Forest, which is 30 probably what you think of as the “B” building at Forest Plaza. The owner’s association is called 31 Palo Alto Plaza, so I’ll probably use that when I talk about that complex. I just wanted as 32 resident of that building for the last nine years, I wanted to thank you guys for advancing this 33 proposal for all the reasons that are contained in the report. That area is from a residential point 34 of view of increasing walkability. The number of residents one sees on the block of Forest and 35 on Homer has increased significantly over the 10 years and the residential density south of Forest 36 has increased also. I think that’s great. 37 38 The one thing that I didn’t understand having listened to the last meeting and read the notes of 39 the last meeting is why the Forest Plaza A building wasn’t included in the proposal. It’s true that 40 mixed use condominium complexes as ours have a tension between the residential use and the 41 commercial use, but given when the conversion was made to business use and largely unutilized 42 area of the plaza for that complex and the fact that down the street at the corner of High and 43 Forest is a widely successful coffee shop much to my surprise, I don’t know what it would hurt 44 to include that in the proposal. I wouldn’t expect there would be a conversion to retail unless 45 there were economic incentives put in place, but I don’t think it is necessary to sort of give up on 46 that block and kind of interrupt the flow south from University and Hamilton. Thank you. 47 48 Chair Martinez: Thank you. 49 3 1 Vice-Chair Michael: Next speaker is David Kleiman for three minutes followed by Joyce 2 Yamagiwa. Yamagiwa, excuse me. 3 4 David Kleiman: Good evening Chair and Commissioners, my name is David Kleiman and I’m 5 the owner of 203 Forest, which is I think you know by now is at the corner of Forest and 6 Emerson. As you know I’ve requested and staff previously agreed and recommended that my 7 property be excluded from the proposed rezoning of the 600 block of Emerson. There are 8 several reasons for my request, some legal others practical. First let me state that I fully 9 understand the reasons for supporting retail along this block and in the downtown area. I do 10 support actually the rezoning of the balance of the block. I think it makes for good urban 11 planning. In order of the hours spent during the day, I am an architecture professor, a real estate 12 developer, and a real estate lawyer. So I’m quite familiar with the issues at hand and certainly 13 those affecting my property. But with respect to my property I feel that it should not be included 14 because of the economic harm that I’m quite sure that I would endure as a result. 15 16 My building is simply not conducive to retail uses. It’s over 40 years old, actually it’s over 50 17 years old and over the years other than acting as a cleaner’s, which was frankly unsuccessful for 18 most of its years as a retail use it has been an office use or some modified use that you could say 19 bridges the gap between office and retail. But for the last many years it’s been an office use. 20 And the reason why, is because the building is virtually devoid of window openings. There are 21 no window openings whatsoever on both the Forest and the Emerson side. None. As contrasted 22 with all the other properties that are subject to the rezoning which are virtually 100 percent 23 windows facing those facades. The only windows on my building are in the drive through and 24 those are basically the door openings and the side light. There’s a single window facing the 25 driveway that’s approximately 4 feet square. And the reality is that if you start walking down 26 that block and think about this building becoming retail and having a retailer in it, if you can 27 think of a tenant who would take it certainly let me know. I don’t think one exists. 28 29 So the limitation really speaks to the most important aspect of my position. Rezoning my 30 property in my opinion will effectively deprive me of viable economic uses since my only option 31 will be to attempt to rent the property to prospective retailers and without windows I just don’t 32 feel that that can occur. When I bought the property I made my investment based on a 33 reasonable expectation of the use as zoned and I think that given the nature of both those 34 expectations and the reality of the physical limitations of the property that a rezoning is 35 inappropriate. Thank you very much. 36 37 Chair Martinez: Before you leave, one of the Commissioners has a question for you. 38 39 Mr. Kleiman: Certainly. 40 41 Chair Martinez: Commissioner Keller. 42 43 Commissioner Keller: So since you’re a real estate attorney I assume you understand that as long 44 as the building retains its use of office space that that can continue. It’s only when it’s vacant for 45 more than a certain period of time that it might have to become retail. 46 47 Mr. Kleiman: Yes and actually I was quite open, Amy French and I discussed in some detail 48 some ways that we could kind of bridge the gap. And I would say that if I redeveloped the 49 4 property, which is a certain, not a certainty, but 30-40 percent probability in the next 10 years, I 1 would be open to, you know, because I could go to an all glass façade and attract retailers that 2 might be appropriate. But the current idea of leaving it vacant for a year would mean that 3 instead of me owning it, Wells Fargo Bank would own it as my lender. I mean if there was a 4 shorter period of time, and I suggested 90 days might be appropriate that’s something that would 5 be painful, but I could live with it. As an empty trying to rent to a retailer (interrupted) 6 7 Commissioner Keller: I think that there’s a misunderstanding and that is that as long as you 8 continue to rent to office occupancies, in other words if there’s a vacancy of an office occupancy 9 and you keep it vacant for less than a year you can continue to rent it to an office occupancy. 10 11 Mr. Kleiman: Yes, I’m fully aware of that. 12 13 Commissioner Keller: Right. However, you’re talking about the potential for redeveloping the 14 property. How can the City ensure that the property if it’s redeveloped has ground floor retail on 15 it without having that ground floor retail overlay? 16 17 Mr. Kleiman: I think that’s a good idea, a good question. I think for the same reasons that you 18 decided for example, not to include the, I forget, Forest Plaza? The condominium building that’s 19 been excluded. It was excluded initially then it was going to be included and now I think as of 20 tonight maybe it’s not going to be included. I think it would be appropriate to come back at a 21 later date when it’s being redeveloped and pose a zoning change or requirement that it conform 22 to what’s happening on the rest of the block, but I think at present again, given the physical 23 limitations (interrupted) 24 25 Commissioner Keller: So do I get you correct, let me see if I understand this. You have no 26 objection to if the property gets redeveloped having a ground floor retail requirement on the 27 redevelopment. 28 29 Mr. Kleiman: I do not. 30 31 Commissioner Keller: Thank you. 32 33 Chair Martinez: And thank you for speaking. 34 35 Vice-Chair Michael: And the final speaker is Joyce Yamagiwa. Thank you. For three minutes. 36 37 Joyce Yamagiwa: Joyce Yamagiwa, property owner of 624 through 640 Emerson, the largest 38 affected property. We are opposed to the rezoning. In our opinion this is a micromanagement of 39 the real estate. The City is, the development of Emerson has gone on for well over 20 years and 40 we have owned this property for well over 20 years. During that period of time we’ve had 41 office, we’ve had retail, we’ve had office, we’ve had retail. It comes and it goes. And the 42 market is very efficient. When somebody steps in from a zoning standpoint and makes a 43 requirement that it must be retail, you’re taking a piece of the market away. And in our opinion 44 it ends up not being as healthy a market because there is this contrived situation. 45 46 A few years ago, I think maybe even a year ago the whole zoning, retail zoning was under 47 discussion and we all agreed that University Avenue should not have an escape back to potential 48 office based on vacancy. So that went away, but in return the reversibility of the use of your 49 5 property was instituted. So with that you could be office, you could be retail, you could go back 1 and forth and we strongly supported that because it allowed us to operate our properties in the 2 healthiest fashion. Nobody wants vacancies. That can create a huge problem. And when you 3 start requiring certain uses which are maybe contrary to what the market is telling you, you end 4 up with vacancies. 5 6 So it’s very disturbing at this point that the City has now come back after we went through all 7 this discussion and negotiation about the zoning and this has focused on the Emerson block. So 8 again, we are opposed and would appreciate reconsideration. Thank you. 9 10 Chair Martinez: And thank you for speaking tonight. Commissioners let’s start a discussion on 11 this. Commissioner Panelli. 12 13 MOTION 14 15 Commissioner Panelli: Thank you Mr. Chairman. While I’m sympathetic to the concerns that 16 the property owners, the two property owners have expressed, I believe that there’s enough 17 flexibility built in to the use that allows you if you have it as office, you get to continue to use it 18 as office. If it’s never vacant, that’s great. You can use it forever as office even though it’s 19 zoned as ground floor overlay. And you said that the market speaks. Well if your property’s 20 empty for an entire year the property’s speaking that it’s not viable as an office space. So I 21 actually don’t think this is a particularly contentious issue. We debated it at length at the January 22 30th meeting. So I’m going to go ahead and actually put out the Motion right now to adopt 23 staff’s proposal. 24 25 SECOND 26 27 Chair Martinez: Ok. We have a Motion. Is there a second at this time? Commissioner Tanaka, 28 second. Would the maker care to speak to his Motion? 29 30 Commissioner Panelli: Well I sort of did that via my preamble, but like I said this does not 31 require property owners to change the use that they have today. If the highest and best use of 32 those properties is office they’ll continue to enjoy that. I think what Council’s concern here was, 33 we have situations where we started losing ground floor retail and trying to protect against 34 potentially that occurring. Anyway I have nothing more to say about it. Some people have 35 expressed concern about the property across the street from 203 Forest, the Anna Eshoo office 36 and I forget what the other office is. I’m sort of; I could go either way on that so I’m not 37 particularly feeling strong one way or the other. 38 39 Chair Martinez: Commissioner Tanaka would you care to speak on your second? 40 41 Commissioner Tanaka: Well I think Commissioner Panelli spoke about all the reasons why I also 42 support it, but I do believe that there should be some Friendly Amendments and I think while 43 we’re starting the Motion early, I there should be some discussion about that. I do have some 44 Friendly Amendments in mind, but I think we should have a little more of a discussion so I’m 45 going to hold them for right now. Thank you. 46 47 Chair Martinez: Commissioner Alcheck. 48 49 6 Commissioner Alcheck: So before we close the discussion on this, I’d like to say a few things. 1 The first is on Page 4 staff quotes rental rates on retail versus office space and this is the sort of 2 information that I think should always be accompanied by a source. I’d like to know if a broker 3 provided that information. If so, which broker? If it was property owners that provided you that, 4 I’m talking about $4 a square foot for retail versus the $5 to $6 per square foot for office. I think 5 it helps give a little credibility to those numbers. 6 7 And then I also sort of want to thank you guys for the discussion on takings. I think that’s very 8 helpful. On the fourth paragraph of Page 5 staff states that in general zoning ordinances, which 9 apply prospectively and which contain a reasonable grandfathered or legal nonconforming use 10 provision allowing the current use for a building to continue have been found by courts to be a 11 valid exercise of the police power and do not constitute a taking. I would argue that there is a 12 question about reasonableness when the grandfathered use provision only lasts for 12 months. 13 So this is not a situation where we’re allowing these buildings to operate indefinitely as 14 commercial spaces or have that flexibility. This is sort of if you test the water you’re all in. 15 There may be case law to support it, but from my position on the spectrum I would argue that 16 I’m very sympathetic to the property owners who are uncomfortable with the notion that their 17 use could be limited if they pursue what the market is demanding at a very specific time. 18 19 And so while I do think that there are significant benefits to creating a retail corridor there and I 20 can imagine that the Whole Foods property would be much more, would be very excited if there 21 was more walkability on that street and more draw for retail, I do think that this is a big deal. 22 And I sort of mentioned this last time that I would like a takings discussion and I’m a little more 23 sensitive I think to the notion that these owners are not necessarily in favor of this very 24 permanent change. 25 26 Chair Martinez: Anyone else? Commissioner Keller, please. 27 28 Commissioner Keller: So firstly with respect to the property at 203 Forest, that property can 29 remain office space indefinitely as long as the building remains standing and as long as no 30 vacancy lasts longer than 12 months. As long as he continues to rent the property to office space 31 with no vacancy, he can keep it office space for the next 50 years under the current zoning. It’s 32 only if there is a 12 month vacancy then does it revert to retail. Ok? And if it stays vacant as 33 office space for 12 months the market has spoken from my point of view. 34 35 Secondly, the issue is that if the property is redeveloped at 203 Forest, the owner has indicated 36 that he would be willing to have it be ground floor retail and that’s what this ordinance does. 37 And it’s much harder to impose ground floor retail after the fact when a development proposal is 38 already submitted. Then it becomes problematic to do a rezoning in the midst of a 39 redevelopment. And therefore it actually works much better to do the rezoning in advance. And 40 my understanding is that at least for 203 Forest we don’t have that problem. He can keep it as 41 office space as long as that use is continuous and he can keep, and it becomes ground floor retail 42 once a long vacancy or redevelopment. Both of those are reasonable and consistent with what 43 the property owner indicated. Things are slightly different in terms of the property on, that is, 44 the long section of low building, one story buildings that is now retail, because that has to stay as 45 retail. 46 47 And I’m not suggesting that we change anything with respect to the ordinance at this time. 48 However, in concert with a larger view of downtown retail I think that the way we accommodate 49 7 the market ebb and flow and basically it’s the market demand for retail that ebbs and flows. 1 Because essentially, because office space is more valuable than retail space office space can 2 crowd out retail space if the owners of the property allow it to. So allowing for market dictates 3 in terms of demands of office is not quite appropriate. On the other hand talking about market 4 dictates in terms of the availability of retail and whether somebody wishes to rent the retail, to 5 me that’s a more interesting question that could be addressed. 6 7 And one of the things that I proposed in terms of the 2009 ordinance, which was not adopted, 8 was the idea of allowing a Conditional Use Permit (CUP) for temporary office space when they 9 couldn’t rent it to retail. And I don’t want to have that for this block alone because I think that 10 that’s something that we should consider when we look at downtown overall and I would be 11 supportive of that as the escape valve rather than rezoning properties. As for example, Natalie 12 Salon is becoming office space. The Dragon Theatre is becoming office space and it will 13 probably become permanent office space because of the rezoning that we did in 2009 even 14 though arguably retail is viable there. So to me the issue is by having a Conditional Use Permit 15 it gives us the power to allow it, the flexibility of allowing and yet make it so that it reverts when 16 retail is more viable. And to me that’s the appropriate way of handling it. And so I’m not going 17 to suggest amending it at this time, but that’s something that I did bring up last time and I’ll 18 consider that in terms of the broader view in downtown overall. But in any event I’ll be 19 supporting this Motion and thank you. 20 21 Chair Martinez: Thank you. And now the moment we’ve all waited for, Commissioner King. 22 23 Commissioner King: Thank you. I don’t really have anything to add other than to appreciate, 24 offer appreciation for a thorough staff report and a thorough discussion. I do tend to support 25 Commissioner Keller’s belief that it’s important to protect the retail in this viable corridor and 26 that I agree that the way to address it is by having some form of in the event that retail does drop 27 off in demand such that there are vacancies then we can address it at that time. Thank you. 28 29 Chair Martinez: Vice-Chair Michael. 30 31 Vice-Chair Michael: I’m sorry that I missed the meeting when this first came up and also I want 32 to appreciate the members of the public who spoke, the property owners and the staff. I think 33 overall I’m a very, very strong supporter of ground floor retail. And I think this is really an 34 enhancement of the environment in downtown generally and I think in this street that would be a 35 good thing. However, I was struck by the comments from the property owners. In one instance 36 that this was a good idea, but it didn’t go far enough. In another instance that it perhaps should 37 exclude the one property because of the lack of windows that would be required by retail 38 business to be viable. And then the comment overall about the ability to have flexibility for 39 responding to market forces that in recent times as 2008, 2009 we saw very, very different 40 conditions than we have now. 41 42 But I’m also struck by the commitment that the Council has to make the downtown overall one 43 of the top three priorities. I’m a little bit concerned that by zoning Emerson Street now in 44 advance of coming forward with the entire plan that that will not be seen in the proper light, not 45 get the proper support from the public, and maybe not be executed in a completely reasonable 46 and nondiscriminatory fashion. 47 48 8 I like the logic of many of my colleagues, in particular Commissioner Keller in terms of the 1 flexibility if you incorporate the zoning ordinance with the Conditional Use Permit tool available 2 when needed. But I’m inclined to vote against this this evening, notwithstanding my support for 3 this ultimately because I think it’s not coming before the Planning Commission or to the Council 4 at the right time. I think that the Council is working on the downtown plan overall and this 5 should be part of that overall plan, which I think is important. And I think at that time it should 6 be zoned ground floor retail. I think it should allow for the flexibility Commissioner Keller 7 outlined in terms of the Conditional Use Permit if needed. And I think, although I can easily see 8 scenarios where the 12 month period really would be a problem; you get a late notice from a 9 tenant of vacating, you have to do some remodeling, the contractor’s held up, you need a permit, 10 something happens with your financing, somehow you just go over the time and then you put it 11 up for lease and you don’t find a tenant and it takes 13 months. So I mean, it doesn’t, I’m not 12 comforted by that year. Although it seems like a long time I can easily see that it might not be. 13 14 But I am thinking that as we did with the California Avenue Street Improvements ahead of the 15 California Avenue Concept Plan I would prefer that we start from the basis of the overall plan, 16 the Concept Plan for California Avenue and the University, the Downtown Plan for this. And 17 although I support it very strongly in principle, I think it’s the wrong time. 18 19 Chair Martinez: Would staff care to comment on why the Council has asked us to consider this at 20 this time? 21 22 Mr. Aknin: Sure. Aaron Aknin, Assistant Planning Director. There was that exact same 23 discussion when the Council was discussing this in November. And I think the conclusion that 24 was come to at that time was, yes we shouldn’t extend this ground floor protection widely 25 without doing more of a comprehensive look at the downtown area, but this one block has 26 critical importance because of the connection from downtown down to the Whole Foods area and 27 because that it is so susceptible to turning over to office. So because of those two factors they 28 went forward and asked staff to initiate this rezone. So I think there was an acknowledgement 29 that we need to take a step back and take a comprehensive look at the downtown area and where 30 retail is most important to the City, but there was also the realization that right now we need to 31 take some action for this particular corridor because it is the most susceptible. 32 33 FRIENDLY AMENDMENT 34 35 Chair Martinez: This afternoon one of the Commissioners described the land use planning as 36 “feeling.” I think he’s blowing his cover right now. And it’s my feeling that this block of 37 Emerson really feels like retail. The scale, the charm, the life, the pedestrian movement, it really 38 belongs in retail zoning. The fact that there are pressures that make it not the first choice of 39 property owners is a problem. And really is a problem that doesn’t go to serve the residents of 40 this area, the downtown, which is losing retail space, or even the property owners themselves in 41 the large scheme of things. Because I think once the City embraces the idea that this is one of 42 the important retail blocks of downtown, the City then has the responsibility to put some 43 resources behind it. To plant new trees, to improve the streetscape, to work with property 44 owners to make retail more attractive. And I see that coming as part of the Downtown Study and 45 the aspects of the Development Cap that the Assistant Director described earlier. 46 47 I would even go so far as to say that the Forest Plaza property should also be included in this 48 retail combining district because it’s really a large segment of the street. Although it looks very 49 9 office like right now, you could see that underneath that, that tile roof that retail could be 1 extended out towards the sidewalk. That it could be a very engaging part of the retail life of that 2 street and of downtown. So I would actually, and I don’t like authoring Friendly Amendments, 3 but I’d offer a Friendly Amendment that that property, Forest Plaza should be included in the 4 overlay district. So to the maker of the Motion? 5 6 Commissioner Panelli: I’d accept it. 7 8 Chair Martinez: And to Commissioner Tanaka? 9 10 Commissioner Tanaka: I accept it too. 11 12 Chair Martinez: Alright. One for one. Commissioners any further comment? Staff do you have 13 anything to say? Yes, pardon? Commissioner Panelli? Anybody? Oh, yes. Oh, Commissioner 14 King first. 15 16 Commissioner King: I had a question regarding that potential worst case scenario for the 12 17 month period. How is that defined? Is that, so if you assume somebody does get a short 30 day 18 notice on the lease and so they’ve effectively got 13 months. At what point are we determining, 19 what are the triggers for the occupancy having changed? 20 21 Cara Silver, Sr. Assistant City Attorney: I’ll take this one Amy. Cara Silver, Sr. Assistant City 22 Attorney. We would look at the period where the property is actually vacant and if there are 23 some extenuating circumstances in the lease arrangement, I think that would be taken into 24 account. There is some flexibility in the 12 month period. 25 26 Chair Martinez: Commissioner Tanaka and then Alcheck. Did you have a comment to make? 27 Ok, Commissioner Alcheck. 28 29 Commissioner Alcheck: So I’d like to state for the record that I support ground floor retail and 30 I’d like to encourage it on this street, but I don’t support this Motion. I don’t like the idea that 31 we’ll create an incentive for property owners to, I don’t even know the right word, monkey 32 business. I mean, I don’t think it’s going to be 12 months. Right? It’s not so much that they 33 won’t be able to rent to an office for 12 months it’ll just be that they’ll have to rent for less. And 34 if I was a property owner that preferred commercial space I would find the tenant at the 11th 35 hour. 11th hour? And till I could find the tenant I wanted. You don’t necessarily need to occupy 36 space to lease it. I’m sort of uncomfortable with putting the City in the position of figuring out 37 what’s going on and who’s, where we are and 12 months has past, now you’re retail. And it’s 38 incorrect to say that the only way this flexibility is lost, actually it’s not flexibility. The only way 39 you’re forced into the retail is if there’s a 12 month vacancy. The truth is, is that if you dabble in 40 retail leasing you lose your commercial option. 41 42 So the issue here isn’t that we’re restricting commercial leasing in the event that there’s a 12 43 month vacancy. The issue is that we are restricting flexibility. It is the option to have; it is the 44 flexibility of choosing commercial or retail depending on your preference. And they are very 45 different. Retail tenants are very different than commercial tenants. And the market cycles can 46 be longer than 12 months. They can be 12 years. And I support ground floor retail. I don’t, I’m 47 not that comfortable with this pick and choosing of the properties on a very specific street. 48 49 10 I agree with Commissioner Michael in that there should sort of be an approach where we 1 encourage ground floor retail all over the University area and I’m a little uncomfortable with the 2 notion that we are essentially going to encourage potentially, I don’t know, faux leasing for those 3 owners that certainly don’t want to change to commercial. And maybe that doesn’t seem like a 4 possibility because if retail rents were so much higher they would go for them, but if retail rents 5 are so much higher than commercial rents then we don’t even need this. So, that’s all I’m going 6 to say. 7 8 Chair Martinez: Commissioner Keller. 9 10 Commissioner Keller: So two quick things. One is a point of clarification and that is I assume 11 for the Forest Plaza that you’re only referring to 698 Emerson, 171 Forest, and 175 Forest, not 12 the properties on the other half of the building towards High Street. 13 14 Multiple Speakers: Yes. 15 16 Commissioner Keller: Yes, I just wanted (interrupted) 17 18 Chair Martinez: I think he was asking the Friendly Amendment maker. Yes, I agree with that. I 19 think the others will follow, but for the sake of this Amendment that was my intention. 20 21 Commissioner Keller: Yes because those are the only ones that are noticed. 22 23 Commissioner Panelli: And yes as the Motion maker I accept that clarification. 24 25 Commissioner Keller: Thank you. Just trying to keep the record clean. Thank you. The second 26 thing is that I’m sympathetic with Commissioner Alcheck’s notion that property owners who 27 currently have office space will be loath to convert their space to retail because it’s sort of the 28 one way ratchet. Once it becomes retail it has to stay as retail and I think that that’s one of the 29 drawbacks of this approach without having potential CUP to go the other way, which is why I 30 advocated CUP in 2009 as opposed to a complete removal of the ground floor overlay. On the 31 other hand the question is what happens with the fresh, former Fresh space that’s now office and 32 the former Bay Area Lock Doctor space that is even better retail than it was when Bay Area 33 Lock Doctor had it. They remodeled it to look like retail and it was retail for a little while and it 34 stopped being retail. So I think that the issue is that if we don’t do this it’s likely, it is a chance, I 35 can’t talk about the probability, but there’s a significant chance that other properties will desire 36 to take the higher rent and we’ll lose the connectivity of retail which is critically important. 37 Thank you. 38 39 Chair Martinez: Anyone else? Yes, Commissioner King. 40 41 Commissioner King: Yes, a clarification. So I don’t see on the list of current uses, I don’t see the 42 Forest Plaza that has now been added back in the Amendment to the Motion. Can staff help with 43 current uses for those parcels? 44 45 Ms. French: Yes, I’d be happy to, one moment. The current uses that are now in the building? 46 Ok, yeah. There’s a table we provided in the staff report. It’s the Anheuser Busch Beer Garage 47 Office and warehousing. 48 49 11 Commissioner King: Which page would that be? I’m looking at Exhibit 2. 1 2 Ms. French: It’s Page 2 of the staff report, and it’s listed down under the Forest Plaza in the 3 middle there, middle section. Anna Eshoo’s office is 698 Emerson. 171, 175 are both the 4 Anheuser Busch Beer Garage Office. So warehousing and distribution is allowed in CD-S. It’s 5 not an allowed use in CD-C, but… 6 7 Commissioner King: Ok and so those are, Beer Garage office that is an office use? Anheuser 8 Busch Beer Garage Office? 9 10 Ms. French: It may have warehousing and distribution function as well; I haven’t knocked on the 11 door to talk about their business. 12 13 Commissioner King: Ok, but in general we believe these are current office use so then they 14 would have the 12 month period as well. 15 16 Ms. French: Yes. They look like office. 17 18 Commissioner King: Thank you. 19 20 Chair Martinez: Commissioner Alcheck. 21 22 Commissioner Alcheck: Yeah, just really quickly I want to go back to that cost to rent on 23 Emerson Street question. The reason why I asked you about sort of sources is because 24 commercial retail space is sort of advertised at a specific rate and the person who is willing to 25 pay that rate takes it whether they’re commercial or retail. So it sort of, it was sort of confusing 26 to me because it sort of sounds like if you’re a retailer, rents are $3 or $4 and if you’re an office 27 user rents are $5 or $6. There should be really one number. Space per square foot on this street 28 is X. If you’re a retailer and you can afford it you pay X. If you’re an office user and you can 29 afford it you pay X. They don’t distinguish between the two and so that’s sort of part of the 30 reason why I highlighted that as (interrupted) 31 32 Chair Martinez: What is your point though Commissioner? 33 34 Commissioner Alcheck: I just think we are talking like it’s a given that office rents are so much 35 higher, or that office users can pay so much more. I think the underlying implication is that 36 retailers can’t. I don’t think that’s true and the right retailer who can successfully perform in the 37 space will. And I, that’s, it’s like there’s a case here that we need to protect the retailer. We 38 don’t have to protect a successful retailer. You have to protect an unsuccessful retailer. That’s a 39 major point. So that’s all. 40 41 Chair Martinez: Anyone else care to speak before we call for the vote? Ok. Yes, Commissioner 42 Panelli. 43 44 Commissioner Panelli: I’m actually supportive of Commissioner Keller’s CUP concept. Is there 45 some way that we can make sure that gets on our agenda in the next six months? What would be 46 the right process for us to say we really want that call it “relief valve,” I’ll call it the “relief 47 valve” proposal in the instance that we hit some kind of major event that needs it. 48 49 12 Mr. Aknin: So I think the most appropriate as part of the Downtown Development Cap process 1 we’re going to have several check-ins with the Commission as well as with the Council. So in 2 one of those early check-ins I suggest, well it’s duly noted now so we can communicate that to 3 whatever consultant comes onboard, but also I would say to bring that up in one of the early 4 sessions that we have. 5 6 Commissioner Panelli: And what’s the current schedule for? 7 8 Mr. Aknin: And I’ll touch on this later, but we’re going to the Council coming up to release the 9 RFP on March 18th. Probably take about two months or so to get it somewhat onboard and say 10 we’ll have the first check-in sometime this summer. 11 12 Commissioner Panelli: Sometime, I’m sorry. 13 14 Mr. Aknin: Sometime this summer. 15 16 Commissioner Panelli: This summer? 17 18 Mr. Aknin: Yeah. 19 20 Commissioner Panelli: Ok. 21 22 Chair Martinez: Ok, staff can you read the Motion? Did you have it noted? 23 24 Ms. French: Well the Motion by excuse me, Motion by Commissioner Panelli, seconded by 25 Commissioner Tanaka to adopt the staff proposal to recommend that Council adopt the staff 26 proposal with a Friendly Amendment accepted by both the Mover and the Seconder to include as 27 well the 698 Emerson, 171 and 175 Forest condominium ground floor units in the rezoning. 28 29 VOTE 30 31 Chair Martinez: Very good. Commissioners let’s vote. Those in favor of the Motion say aye 32 (Aye). Those opposed? The Motion passes six to one with Commissioner… Oh, sorry. Five to 33 two with Commissioner Keller, Commissioner Panelli, Chair Martinez, Commissioner King, 34 Commissioner Tanaka voting in favor and Vice-Chair Michael and Commissioner Alcheck 35 voting against. 36 37 MOTION PASSED (6-2) 38 120-26-110 120-26-091 120-26-111 120-26-109120-26-043 120-26-039 120-26-038 120-73-004 120-27-008 120-27-009 120-27-010 120-26-106 120-26-025 120-26-026 Senio r C enter Fir e Sta. N o.1 D o w nto w n Library Palo Alto M edical F o unda tio n H eritage P ark L ytto n Plaza Cogswell Plaza S cott P ark Joh nso n P ark William s P ark City Hall 469 475 744 459 832 801 A P T 1 - 5 427-453 3 3 838 84 6 471 459 83 5 - 8 5 5 460 815 84 0 83 6 834 84 5 80 3 835 - 8 3 7 83 1 - 8 3 3 451453 80 2 80 0 81 0 - 8 1 6 81 8 - 8 2 0 82 8 - 8 3 0 81 7 - 8 1 9 82 3 - 8 2 5 567-569 559563 483 539541543 515-517 809 811 82 5 837 813-823 501-509 511-519 521-529 531-539 541-547 845 847 136 61 0 116-122 150 53552 9 52 5 542 51 6140 102 116124 163 145 566 556 167 528 643 635 635 645- 685 660- 666 620 180 164 158156 624628 632 636 640 644 617621 151-165 171-195 203 642 640 636 200 151 115 125 135 514 1 01 440 444 436432 427 425 117119 630 616 208 228220 240 575 530- 534 536 540 552 177 156 201209215 225 595 229231 611-623 180 508 500 625-631 170 172-174 542 544 538- 542 552 548 546 541- 547 230-238 734 723 721 702- 730220-244 744 701 731 755757 771 200 160 728-732 762- 776740-746 250 275 270 255741 265 724 730 651 221-225 227 668 707 205 201203 451449 209 219 221 233235450 460 470 442 444 400 420 430 411 425 429 185 165 181 412 250 420 245 171-169 441- 445 435- 439 346 344 333 335 342 344 431 460 450 235530 220220 B 222 240 514278 274270 250 545 540 251485255 271 281 300 310 301 581 259-267 533535537 261 267 518-526 532- 536 520-526 530-536 271 281 252 270 240-248202- 216 228 226 234 238 244242 210- 216 228- 234 223- 229 209 215 247-259 240 232 230 311-317 251 360 344 326 340 337339 323 317 400 420 332330 314 353 355 367 305 347 265272-278 418 319 321- 341 328 330 300- 310 431401 366 436 426 #1-7 369 335 319 390 301 315 375 307- 311 325330 332 1&2330 1-3 324 326 316 318 373- 377 416- 424 361 314 338 340 560 345 321325 315 529 285 555 650 636 628 1-12 628 A-E 385 365 375380 345 664 325650-654 661 635300 690 675 555541-549533 535- 539 318-324 326 352 425 439-441 435429425 415-419 405403453 461 383460 502 510 526 520 540 499 467 459 439 425555 400 436-452 456 379 370-374376380-382 384-396 550-552 364 360 431 440-444 423 499 475 421-423 431-433 432428 460-476 450 635 446 430 400 745 720706 385744 734 724-730 720 712 704 360 351 315737 332 300 653 -681 683 685 512 501 619 609 605 518 482486496 610 630 455 400 651-687 543-545 532534 542544 550 552 554556 558560562564 635-637 643-645 601-619 470 313 334 333 325326 342 303301 229 336 308 310 312 316 318 311 331 315 319 317 321 335 31 359 343 228 220 356-360 347-367 351357 369-379360 258- 296 193 49ts 1-4 9 350 210 204 365 375 381 187 302- 316 379310 320 328 332 340 437 412 311 A-B 404 313 325 327 333 407401385 411 452 378-390 360 - 1A - 1C360 - 2A - 2C360 - 3A - 3C360 - 4A - 4C360 - 5A - 5C360 - 6A 344-348 418420 482 328 456 321 325 330204 218 236 240 250- 252 477 475 467 457 453249235 225 221 201 460 275505-509 239- 243 209- 213 210- 214 513-519 460 474472228- 230 53 71-79 483-485 67 61 565 555 535 531174 525 507505 189 535 558 201 516512 520 209 215 223 231 521 580 239-245 530-540 544-554 212- 216 218-222 21 611 175 194 192 7775 333 335- 337 351 457451 465463 489-499360 530 480 420 430 480 463 451443 437411 405 419405401 441 480-498 347 351 355 359 525 430 473 332- 342 425 415 400 570568 556 550 543 327321315305 343 515 525 551 555 328 309-311 518-528 536-540 552-554 558-562 573 A-E 591-599 557-571 330-332 318-320 406-418 417 542548568 524 550 500-528 578 564 550 546 540 530 531-535 541 505 525 537 555 565 571 530 619-623 520 440-446 401 579 567 625 523 5 610 600 616 624 555 581 420-438 437 566 224 228 A-F 244 579 575 565 559 2 2 2 251 355 A-J 335 329 33 3 604 626 576 566 614 345-347 623 643 243 245 257 259 209 219 227 235 22 602 22 505 610-616 727 678 676 674672 642 636-638 567 555 711 701705 725 525 759 730 718704 734 738-740 760 746-750 701-717 721-725 620618 600 827 835 899 615 619 850 530 609 759 751 753 617-619 741749 628 737-739 627 611 601 608600 620 623 137 145 700 780 790 744 111700 753100 825805 33 51 75 63 841 44 675 49 41 711 799 703 100 101 139654 625 875 853 81 87 735 849 707 847 842828 820248 230-232 212 825 829 833 839 800 812 818 882 165831 801 815 809 801 841 791153 718 774 761 795745 201 209 834 836 845 895 2 904 217 222 148 171 421 130 312 318 324 317 301 186 192 323 329 151 325 329 334 131129 101301 235 258 212 163 115 291247 210 201 207 164 202 180 65 125 170 167169171 29A - 129E 39A - 139E 235 251249 252 247 244250 177220 261 251-257 205245 231 225 213 205 170 172 206 234 240 183 251 270 241-247 215- 237 210- 216 171 219 219 235 262 202 245 254 252 250 203 215 221 313-317318 220- 224 238 319-323 339 197 309 542-550 531-539 759 223-239 188190 251- 293 202 206 208 210 212 216 220 275 539 201 400 27 168 865857 3 3 34 795 848 903 408 412 440 483A - F 435 751 735 745 532 210 727 733 335 328 330 345 214 350 800 806 409419 441 441A 230302 306 308 312 316 301 303 305 307309 325 251 807 821 829 801 818-824 420 424 430 832A 832 842A 842 852A 852 862A 862 872A 872 351A 351 355A 355 359A 359 363A 363 367A 367 425 2 423425411 - 419 457-467 469-471473-481 454 729 A-D 733-743 734-740 724-732 824-828 715 95 445 324 328 545547549 590 425447 827 565 585 595 315 507 561 706 536 200 280-290 150 158164 276 516 698 161 159 157777 132 127 180 528 120 247 372 524 548550 152 207 345 336 515 658 227 27 29 539 115 135 321 558 #200-202 558 #C & D 140 35 808 461 435433 421 727 A-C 218 255 206 739 260 840 650 642 351 451 551 375 530 643 415 12 700 802 99 89 87 548 423 668 305 -313 423 405 3535 611 320 322 346 323 470 471 484 115 528 426 264 430 508 756 - 760 544546 515 743 745 74 7 549 211213 151 160 257 433-457 482 330 349 401 539 440 691 67 312 202 651 443 445 447 716 218 398 262 335 218 640-646506 91 327 469 261 263 303 401 403 254 401 91 40 101 819 301 725 595 705 541 321319 600 146 EMERSON STREET HOMER AVENUE AMINO REAL AMINO REAL HAWTHORNE A VENUE RAMONA STREET EMERSON STREET HAWTHORNE A VENUE HIGH STREET EVERETT AVENUE EVERETT A VENUE HIGH STREET ALMA STREET ALMA STREET LYTTON A VENUE EL CAMINO REAL UARRY ROAD ALMA STREET EMERSON STREET RAMONA STREET LY T T O N A V E N U E UNIVERSITY AVENUE RAMONA STREET BRYANT STREET HIGH STREET EMERSON STREET ALMA STREET EMERSON STREET HIGH STREET HIGH STREET HAMILTON AVENUE HAMILTON AVENUE EMERSON STREET HAMILTON AVENUE GILMAN STREET WAVERLEY STREET BRYANT STREET FOREST AVENUE FOREST AVENUE BRYANT STREET RAMONA STREET RAMONA STREET BRYANT STREET FLORENCE STREET KIPLING STREET LYTTON AVENUE WAVERLEY STREETWAVERLEY STREET EVERETT AVENUE EVERETT AVENUE BRYANT STREET WAVERLEY STREET HAWTHORNE AVENUE RAMONA STREET BRYANT STREET LYTTON AVENUE UNIVERSITY AVENUE COWPER STREET KIPLING STREET UNIVERSITY AVENUE UNIVERSITY A VENUE COWPER STREET WAVERLEY STREET HAMILTON AVENUE HAWTHORNE ET COWPER STREET HAWTHORNE AVENUE HAWTHORNE AVENUE KIPLING STREET EVERETT AVENUE COWPER STREET WEBSTER STREET EVERETT A WEBSTER STREET WEBSTER STREET LYTTON AVENUE TASSO STREET HAMILTON AVENUE COWPER STREET FOREST AVENUE FOREST AVENUE WAVERLEY STREET BRYANT STREET HOMER AVENUE WAVERLEY STREET CHANNING AVENUE RAMONA STREET WEBSTER STREET WEBSTER STREET COWPER STREET HOMER AVENUE HOMER AVENUE COWPER STREET KIPLING STREET CHANNING AVENUE WA UNIV LYTTON AV WEBSTER STREET HAM FORE HOME WEBSTER STREET CHANNING AVENUE CHANNIN U N I VER S I T Y C I R C L E EVERETT COURT LANE 39 LANE 7 EASTLANE 5 EAST LANE 6 EAST LANE 20 EAST LANE 30 LANE 20 WEST LANE 21 MITCHELL LANE LANE 15 EAST BRYANT COURT PAULSEN LANE LANE 12 WEST LANE 11 WEST CENTENNIAL WALK DOWNING LANE LANE 56 EL CAMINO REAL PENINSULA CORRIDOR JOINT POWERS BOARDS BOARD EMERSON STREET HIGH STREET HIGH STREET ALMA STREET ALMA STREET ALMA STREET FOREST AVENUE CHANNING AVENUE HOMER AVENUE EL CAMINO REALEL CAMINO REAL WELLS AVENUE URBAN LANE URBAN LANE ENCINA AVENUE ENC MEDICAL FOUN D ATION WAY C S PC-2967 PC - 3266 RM-15 P C- 4182 PC- 3 7 0 7 PC-4283 P F R T-35 C S CS PC-4465 CS C D -C (P) RM -3 0 AMF (M UO) CD-S ( P ) A M F PC-4612 P F PF PF RM-30 PC-4063 PC-3872 P F P F P C-2130 P F CD-C (P) P F PF P F C D-C (P ) C D-C (P) C D-N (P) P F PC-3111 PC-3007 PC - 3 9 7 4 PF PF PC-4262 P C-4243 PC-4238 PC-4195 R M -1 5 RMD(NP) R M - 4 0 PC-3429 CD-N (P) C D-C(GF)(P) R M-40 C D -C (P) C D -C (P) P F A M F DHS D H S PF PC-4611 PC-4053 R M D (NP) RMD(NP) RM-30 PF PC-3102 2 M -1 5 30 PC-4339 R M-30 RM-30 P F PC-4052 P F P C- 2 545 R M -4 0 PC-2145 R PC-3995 PC- 4782 CS R T-50 CD- S ( P ) RT-50 R T-3 5 R T-50 PC-4779 R M -3 0 C D -C (P) PC-4296 PC-4436 PC- 3437 R M -1 P C -8 6 5 9 R M -3 0 C D-C(GF)(P) Senio r C enter Fir e Sta. N o.1 D o w nto w n Library Palo Alto M edical F o unda tio n H eritage P ark L ytto n Plaza Cogswell Plaza S cott P ark Joh nso n P ark William s P ark City Hall This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend CD Zoning District CD-C (GF/P) Zoning District Removed from GF Overlay 2009 Added GF Overlay 2009 SOFA II CAP Multi-modal Station 0'450' Commercial Downtown Zoning Districts Area Map 2009 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2013 City of Palo Alto RRivera, 2013-01-22 13:54:02CD GFRezone add remove 2009 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) Emerson Street Properties Proposed for GF Combining District Address 611-623 Emerson 625-631 Emerson 635 Emerson 643 Emerson 651 Emerson 203 Forest 698 Emerson/171-175 Forest644 Emerson 624-640 Emerson 620 Emerson 180 Hamilton Year Built 1924 1902 1939 1947 1920 1958 1981 1962 1922 1940 1975 Historic Cat Category 2 Category 2 Category 4 Pot. Eligible Not listed Not listed Not listed Not listed Category 3 Pot. Eligible Not listed Lot Dimensions 65' x 102'50' x 103'30' x 103'40' x 100'59' x 85'50' x 100'3 ground floor condos in 45' x 102'102' x 125'40' x 103'85' x 100' "Forest Plaza" Lot Area 6,475 s.f.5,992 s.f.3,075 s.f.4,100 s.f.5,000 s.f.5,000 s.f.4,600 s.f.4,003 s.f.8,500 s.f. Building Area 7,558 s.f.6,690 s.f.4,140 s.f.4,000 s.f.1,760 s.f.3,020 s.f.g.f. approx 3,000 s.f.8,336 s.f.12,875 s.f.4,000 s.f.53,450 s.f. # Floors 1 floor + mez 3 floors 1 floor + mez 1 floor 1 floor 1 floor 1 floor of 5 2 floors 1 story 1 story 8 stories Ground Area 6,000 s.f.1,290 s.f.2,400 s.f.4,000 s.f.1,760 s.f.3,020 s.f.approx. 3,000 s.f.4,153 s.f.12,875 s.f.4,000 s.f.8,500 s.f. Current Use(s)Fitness & Offices Offices Gen'l Bus Office Restaurant Restaurant Office Office Office Rest./retail Retail Hotel/rest. Use(s) Est.2002 CUP 1983 1982 1995 CUP 1975 CUP 2000 Bank 1981-93-98 - 09-11-12 1965 1986 1993 1975 1991 CUP 2002 CUP Fitness Remodel year 1916 1970 1990 1997 1991 1998 general office 1983 1960 na 2012-13 aka birge clark victorian Acme Glass Bucca de Beppo Empire Tap former Cardinal Eshoo office, Anheuser Busch Buzz All Stars Gordon Biersh etc Florist Casa Olga cleaners Offices Owner Thoits Thoits Melchor Maxwell Tseng Kleiman Various Martinellli Palo Alto Theater Krucker Joie de Vivre 171-175 Forest 1588 s.f. lot 1285 s.f. bldg Forest Plaza:632: office 1993 32 du's mix commercial 4-5 stories 31,525 sf lot 120-61-001 is 4,319 s.f. 120-61-005 is 1,285 s.f. ATTACHMENT E except where required by law or as may be authorized by a use permit in accord with Chapter 18.76 (Permits and Approvals). (Ord. 4826 § 88,2004: Ord. 3792 § 3,1988: Ord. 3108 § 18, 1979: Ord. 3098 § 2,1978: Ord. 3048 (part), 1978) Chapter 18.30(C) GROUND FLOOR (GF) COMBINING DISTRICT REGULATIONS Sections: 18.30(C).010 Specific Purpose 18.30(C).020 Permitted Uses 1"8.30(C).030 Conditional Uses 18.30(C).040 Annual Monitoring of Ground Floor Retail Use 18.30(C).010 Specific Purpose The ground floor combining district is intended to modify the uses allowed in the CD commercial downtown district and subdistricts to allow only retail, eating and drinking and other service-oriented commercial development uses on the ground floor. For the purposes of this chapter, "ground floor" means the first floor which is above grade. Where the ground floor combining district is combined with the CD district, the regulations established by this chapter shall apply in lieu of the uses normally allowed in the CD district. Except for the regulations relating to uses set forth in this chapter, all other regulations shall be those of the applicable underlying CD district. (Ord. 4098 § 2 (part), 1992) 18.30(C).020 Permitted Uses (a) The following uses shall be permitted in the GF combining district: (1) Eating and drinking; (2) Hotels; (3) Personal services; (4) Retail services; (5) Theaters; (6) Travel agencies; http://www.amlegal.com/alpscripts/get-content.aspx 12/18/2012 Page 6 of 19 (7) Entrance, lobby or reception areas serving nonground floor uses; (8) All other uses permitted in the underlying district, provided such uses are not on the ground floor. (b) Notwithstanding subsection (a), not more than twenty-five percent of the ground floor area not fronting on a street may be occupied by a use permitted in the applicable underlying CD district. (Ord. 4098 § 2 (part), 1992) 18.30(C).030 Conditional Uses (a) The following uses may be conditionally allowed on the ground floorin the GF ground floor combining district, subject to issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approvals) and with the additional finding required by subsection (b): (1) Business or trade school; (2) Commercial recreation; (3) Day care; (4) Financial services, except drive in services; (5) General business service; (6) All other uses conditionally permitted in the applicable underlying CD district, provided such uses are not on the ground floor. (b) The director may grant a conditional use permit under this section only if he or she makes the . following firiding in addition to the findings required by Chapter 18.76 (Permits and Approvals): The location, access or design of the ground floor space of the existing building housing the proposed use, creates exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district. (c) Any use conditionally permitted pursuant to this section shall be effective only during the existence of the building that created the exceptional circumstance upon which the finding set forth in subsection (b) was made. (Ord. 4826 §§ 94, 95, 2004: Ord. 4098 § 2 (part), 1992) 18.30(C).040 Annual Monitoring of Ground Floor Retail Use . A downtown retail vacancy rate survey shall be prepared annually in September of each year, and a report shall be prepared conveying that information to the Planning and Transportation Commission and City Council prior to the end of the year. The purpose of the survey is to assess changes in retail use in the downtown zones. The vacancy rate shall address all areas zoned CD-C or GF in downtown. http://www.amlegal.com!alpscripts/ get -content.aspx 12118/2012 / 18.70.050 Nonconforming Use -Maintenance and Repair of Facility (A) Whether changes in the nature of the building or a portion of the builling would be required by Title 16 or similar regulations in order to convert the use of the building, or portion of the building, to a conforming use; (8) Whether any reconstruction or remodeling necessary to convert the use and occupancy of the building, or a portion of the building, involves structural alterations; (C) Whether the building, or portion ofthe building, was originally designed and constructed for the particular existing noncmforming use or uses of similar character. @ A nonconforming me which is changed to or replaced by a conforriJing use shall not be reestablished, and any portion of a site or any portion of a building, the use of which changes from a nonconforming toa conforming use, shall not thereafter be used except to accommodate a conforming use. (Ord. 3048 (part); 1978) 18.70.040 Nonconforming Use -Discontinuance (a) On any site having facilities thereon valued at less than one thousand dollars, any nOl1confonning use, other than a residential use, which is discontinued or abandoned or otherwise ceases operation and use of the site for a period of six months or longer shall not be resumed, reestablished, or continued, and all subsequent use of such site and facilities thereon shall conform to this title. (b) On any site not subject to subsection (a), a nonconforming use offacilities designed and constructed for nonresidential purposes which is discontinued or abandoned or otherwise ceases operation and use of the site for a period or one year or more shall not be resumed, and all subsequent use of such site and facilities thereon shall conform to this title. (c) Notwithstanding the prOVisions of Section 18.70.030, or the provisions of subsections (a) and (b) of this section,jn any residential district, a nonresidential, nonconforming use occupying facilities originally designed and constructed for residential use which is discontinued or abandoned or otherwise ceases operation and use of the site for a period of ninety days or greater shall not be continued or recommenceq, and any subsequent use of the site and facilities shall conform to this title. This provision shall not be construed to prevent a change of ownership or management of such nonconforming use; provided, that any cessation of operation of the use is solely in connl!:tion with the transfer of ownership or management to a specificallydesignated person or entity and is solely for the purpose of accomplishing any transfer oftitle, equipment, operational control, or similar purpose. (Ord. 4016 § 43, 1991: Ord. 3048 (part), 1978) 18.70.050 Nonconforming Use -Maintenance and Repair of Facility Facilities occupied or used by a noncmforming use permitted by this chapter shall be subject to the following provisions governing maintenance, repairs, alterations, or replaement: eh. 18.70 -Page 3 (Supp. No 13 -101112007) JI Nonconforming Use -Replacement of Facility Normal and routine maintenance of any structure for the purpose of preserving its existing condition, retarding or eliminating wear and tear or physical depreciation, or complying with the requirements of law, shall be permitted. Incidental alteration shall be permitted, provided the value of the incidental alterations in anyone-year period shall not exceed twenty percent of the value of the facility prior to such alterations. Structural alterations or enlargement oflhe facility shall be permitted only to accommodate a conforming use, or when made to comply with the requirements oflaw. Nonconforming Use -Replacement of FaciJirLl' used or occupied wholly or partly by one or more nonconforming uses, which is damaged "U~{~U by any means except ordinary wear and tear and deprecation, may be reconstructed or, ;.I:Y..ua'J for occupancy or use by a conforming use, except in the following instances: Where none of the nonconforming uses is subject to termination as provided by Section 18.70.070, reconstruction or replacement for continued occupancy or use by such nonconfonning use shall be pennitted only in accord with the following limitations: (I) The extent of nonconformity. or the inte!1~~of activity. PI the site area or floor area occupied by the nonconforming use silisequent to reconstruction or replacement of the facility shalll!.0t exceed that existing prior to reconstruction or replacement. (2) Reconstruction or replacement shall be subject to all applicable laws, regulations, and procedures otherwise governing construction on the site. When one or more of the nonconfonning uses. is subject to termination as pnvided by Section 18.70.070, reconstruction or replacement for continued occupancy or use by such nonconforming use shall be permitted only in accord with the following limitations: (I) During the first one-third ofthe applicable termination period of such use, the Dcility may be reconstructed or replaced; provided the value of such reconstruction or replacement shall not exceed seventy-five pcecent of the value of the facility prior to damage or destruction . . I' (2) During the second one-third of the applicable termination period of such use, the . facility may be reconstructed or replaced; provided the value of such reconstruction or replacement shall not exceed fifty percent ofthe value of the facility prior to damage or destruction. (3) During the last one-third of the applicable tennination period of such use, the facility may be reconstructed or replaced; provided the value of such reconstruction or replacement shall not exceed twenty-five percent of the value of the facility prior to damage or destruction. (4) Any reconstruction or replacement permitted in this chapter shall not extend or otherwise modify the required termination date established by Sectionl8.70.070 and applied to the nonconforming use prior to such reconstruction or replacement. Said . c. 101112007) Ch.18.70-Page4 i I I " " , 18.70.070 Nonconforming Use -Required Termination tennination date shall apply to all portions of the site or structure, including those portions reconstructed or replaced. (Ord. 4016 § 44,1991: Ord. 3048 (part), 1978) 18.70.070 Nonconforming Use -Required Termination (a) In any district, a nonconfonning, nmresidential use occupying a site having facnlies thereon valued at less than one thousand dollars, shall be tenninated within five years from the effective date of this section, or within five years from the date such use becomes nonconfonning, whichever date is later, and within such time the improvements shall either be removed, or converteq or modified to accommodate a confonning use. (b) ...-In any district, a nonconfonning, nmresidential use of a site not subject to subsoction (a) of this section shall be tenninated in accord with the following provisions and schedules: (1) When occupying or using facilities al:signed and built for residential use, the nonconfonning use shall be tenninated within ten years from July 20, 1978, or within J ten years from the date such use becomes nonconfonning, whichever date is later, and within such time the improvements shall either be Itmoved, or converted or modified to accommodate a confonning use. (2) When occupying or using facilities al:signed or built for nonresidential use, the nonconfonning use shall be tenninated, and the facilities shall be converted or modified to accommodate a confonning use, or shaH be emoved at or before the time limit prescribed in subdivision (3) of this subsection; provided, however, that no such tennination, removal, or conversion shaH be required within fifteen years from July 30, 1978, or within fifteen years from the date such use became noncQnforming, whichever date is later; provided, however, that uses which were made non- confonning as a result of the 1974 Fire Zone I Study, by Ordinance No. 2777, adopted March 25, 1974, shall tenninate on November 23, 1990; and provided, further, that any use made nonconfonning by said Ordinance No. 2777, the primary purpose of which is to prepare and deliver food to senior citizens, shut-ins and others with limited mobility may remain and shall not be subject to tennination pursuant to this section. Such uses shaH be pennitted to remodel, improve or replace site improvements in accordance with applicable site ttvelopment regulations, provided that any such remodeling, improvement or replacement shall not result in any increased floor area. Notwithstanding the dates of tennination of uses required by this subsection (b )~), the required tennination dates ofthe following uses shaH be as hereinafter set forth: (A) The nonconforming use(s) ofthe prqJerty at 440-460 Page Mill Road for nonprofit orthomolecular and molecular medical esearch functions shall tenninate on or before July 20, 1998. (B) The nonconfonning use ofthe property at 464 Colorado Avenue for a dance studio and associated parking shaH tenninate on or before July 20, 2003. Ch. 18.70-Page 5 (Supp. No 13 -10/112007) I ~l 1 City of Palo Alto (ID # 3420) City Council Staff Report Report Type: Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: El Camino Park/Mayfield Pump Station Amendment #2 Title: Approval of Amendment Number 2 to Contract #C10131396 in the Amount of $1,173,000 with CDM Smith Inc. to Provide Additional Services Associated With the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation Project WS-08002, for a Total Not to Exceed Amount of $6,300,802 (Continued From April 1, 2013) From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council approve Amendment Number 2 to Contract #C10131396 in the amount of $1,173,000 with CDM Smith Inc. to provide additional services associated with the reservoir, pump station, and well at El Camino Park and Mayfield Pump Station Augmentation Project WS-08002 for a total revised contract-not-to exceed amount of $6,300,820. Amendment Number 2 no longer includes the El Camino Park predesign work originally proposed to evaluate the possible relocation of the Julia Morgan building to El Camino Park. Staff may return to Council to separately seek approval of the predesign work for the possible relocation of the Julia Morgan building. Additional detail on the project delay and schedule have been added to this report, updating the report originally submitted to Council for its April 1, 2013 meeting. Background On November 9, 2009, Council awarded a contract to CDM Smith Inc. (CDM Smith) for the Design and Construction Management of El Camino Park Reservoir, Pump Station and Well and Mayfield Pump Station Augmentation Project (CMR 424:09). Council approved a total budget of $3,190,566 and a contingency amount of $638,114 for this project. City of Palo Alto Page 2 This design contract supports the ongoing effort to improve the ability of the City’s water system to supply water during emergency periods when the traditional supply is not available. The California Department of Public Health (CDPH) recommends that water systems have the ability to supply an 8 hour peak demand during periods of traditional supply curtailment. On September 10, 2012, Council approved Contract Amendment Number 1 (Staff Report #2979) in the amount of $1,299,122 for three major elements including the incorporation of: 1) additional design features to minimize legacy operations and maintenance impacts in response to recent changes to the CDPH requirements; 2) a Community Services Department (CSD) request to include further upgrades to El Camino Park upon completion of the utility work; and 3) a study that would consider expanding the use of our emergency water well at El Camino Park. Amendment Number 1 was approved by Council and all work associated with this amendment has begun. Currently, both the El Camino Park Reservoir, Pump Station and Well, and the Mayfield Pump Station Augmentation Project have experienced delays. Discussion Three large projects comprise the bulk of the Emergency Water Supply project for which $35 million of bond financing was obtained. The three projects are:  El Camino Park Reservoir and associated Lytton Pump Station re-build and new Well Project (all located in El Camino Park),  Mayfield and Boronda Reservoir renovations, and  The “Wells Project” comprising 2 new wells and the rehabilitation of five existing wells. CDM is the construction manager for the first two projects listed above. Construction of the El Camino Park Reservoir, Pump Station and Well Project began in October 2011 and, at that time, was estimated to be completed in December 2012. Construction of the Mayfield Pump Station Augmentation Project began in August 2011 and, at that time, was estimated to be completed in November 2012. As a result of unforeseen delays at each site, construction at the El Camino Park site is not expected to be completed until December 2013 and construction at the Mayfield Pump Station site is not expected to be completed until April 2013. Due to the extended time needed for the contractors to complete the work on these sites, the design and construction management contract with CDM Smith must be amended to add time and funding to continue design support services and supervision of the site work. City of Palo Alto Page 3 Project Progress and Delays El Camino Park Reservoir Construction on this project is currently behind schedule. At this time, the construction of the concrete reservoir is nearly complete and the site is in the process of being back-filled. The new well on the site has been drilled and tested. Construction of the pump station is just starting and will continue until completion. To date, no major design oversights or un- corrected, major deficiencies in the facilities have been identified. With the goal of completing the project by the new schedule of December 2013, the City is in dialog with the construction contractor on the reasons for the delays experienced to date. The construction contractor has made a number of assertions as to the reasons for the delay and the City is doing its due diligence in managing to the contract in order to keep the project on track to the December completion date. Some of the reasons asserted by the contractor included changes in temporary piping design, delays in shutting off the pre-existing water supply, delays in obtaining approval to work adjacent to the Caltrain right of way, and extra time and costs for excavation of the reservoir and underground piping and compaction of the fill during the rainy seasion. As required by the construction contract, the City asked the construction contractor for supporting documents to be be able to evaluate the assertions. Mayfield Reservoir The construction on the project is nearly complete with final acceptance expected to occur at the end of April. The Construction Manager and the City are evaluating requests from the construction contractor to extend the contract completion date. To date, there have not been any major design oversights or construction errors on the project. Related Projects Julia Morgan Building Relocation Associated work for the possible relocation of the Julia Morgan building, previously included in the contract amendment request submitted to Council on April 1, 2013, has been removed from the current contract Amendment Number 2. Staff may return to Council to separately seek approval of a third amendment to this contract for an amount of $20,000 for this work. If so, we expect the Council will want a separate discussion on this matter. Wells Project City of Palo Alto Page 4 A different contract manager was hired for the Wells Project. Similar to the El Camino Park and Mayfield/Boronda Reservoir projects, the Wells Project is also experiencing some unanticipated delays and depending on the extent of the delays, staff may seek a contract amendment on the Wells Project at a future date. El Camino Park Restoration following completion of the new reservoir and pump station Staff plans to return to Council at some future date to seek approval of a contract to complete restoration and improvement work of El Camino Park once all the work on the reservoir, well and pump station are done. (This will occur regardless of any decision on the Julia Morgan building design work amendment). Exhibit A – Design and Construction Management Services for the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation Exhibit A includes all additional design and construction management efforts that will be needed to complete the project by the revised completion date. Amendment Number 2 includes some additional design efforts associated with activities under Amendment Number 1 for facility upgrades to El Camino Park. Amendment Number 2 also provides the additional contract time and monies needed to complete the project. The work scope in Exhibit A increases the budget for these services by $1,173,000 and includes increased submittal review activities, additional site visits and meeting attendance during the extended construction period, increased change order preparation and review, increased on-site construction management services during the extended construction period, development of Operations and Maintenance Manuals for both El Camino Park and the Mayfield Pump Stations. The items in Exhibit A will be paid through Amendment Number 2 and accounts for the additional $1,173,000 that is requested. All work items listed in Exhibit A are originally or previously scoped items per Amendment Number 1 and these costs need to be increased in order to achieve a project completion date of December 2013. The total cost of the contract including Amendment Number 2 is $6,300,802, which is comparable to other local projects of this magnitude (e.g. Graham Reservoir in Mountain View). Resource Impact The attached Amendment Number 2, Exhibit A, requests an additional appropriation of $1,173,000 for the contract titled Design and Construction Management of El Camino Park Reservoir, Pump Station and Well and Mayfield Pump Station Augmentation Project. There is sufficient budget in the Emergency Water Supply Project (WS-08002) to fund the additional work under this contract. Current staffing levels and the need to maintain continuity with City of Palo Alto Page 5 construction prevent City staff from performing this additional work. Amendment Number 2 will allow for additional construction management work needed to finish the project by the expected completion date. The total cost of the project after Amendments 1 and 2 is summarized in the following table: Exhibit Summary Breakdown Total Cost Exhibit A (Amendment 2 Net Total) $1,173,000 Amendment 1 (Net Total) $1,299,122 Original Contract Total w/ Contingency (CMR:424:09) $3,828,680 Revised Contract Grand Total $6,300,802 Staff is currently working with the construction contractor and the City’s construction manager to guide the project through to a reasonable completion date based on adjustments made to the schedule due to unforeseen conditions. Staff is also continuing to work with the City Attorney’s Office and outside counsel to monitor the contractor’s performance and compliance with the construction contract requirements. Policy Implications Amendment Number 2 does not represent a change to existing policies. This recommendation is consistent with the Council-approved Utilities Strategic Plan, especially Key Strategy No. 1, “Ensure a high level of system reliability in a cost effective and timely manner”. Environmental Review Council certified an Environmental Impact Report (EIR) for this project in March 2007. The environmental aspects of the work contemplated by this Amendment Number 2 present no new significant environmental effects nor a substantial increase in the severity of previously identified significant effects beyond those discussed in the March 2007 EIR. Attachments:  Attachment A: AMENDMENT TWO Contract C10131396 (PDF)  Exhibit A of Amendment 2 (PDF) 1 Revision April 3, 2013 AMENDMENT NO. TWO TO CONTRACT NO.C10131396 BETWEEN THE CITY OF PALO ALTO AND CDM SMITH INC. PREAMBLE: This Amendment No. Two to Contract No.C10131396 (“Contract”) is entered into April 8, 2013, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and CDM SMITH INC., a Massachusetts corporation, located at 100 Pringle Avenue, Suite 300, Walnut Creek, CA 94596 (“CONSULTANT”). CITY and CONSULTANT are collectively referred to in this Amendment No. Two as the “Parties”. RECITALS: WHEREAS, the Contract was entered into between the Parties for the provision of design and construction management services for the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation; and WHEREAS, the Parties wish to amend the Contract; AGREEMENT PROVISIONS: NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment No. Two, the Parties agree: SECTION 1. The Preamble and Recitals are incorporated herein by this reference. SECTION 2. Section 1 of the Contract, SCOPE OF SERVICES, is hereby amended to read as follows: “CONSULTANT shall perform the Services described in Exhibit “A”. SECTION 3. Section 4 of the Contract, NOT TO EXCEED COMPENSATION, is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed Six Million Three Hundred Thousand Eight Hundred Twenty Dollars ($6,300,820)” SECTION 4. The following exhibit to the Contract is hereby amended to read as set forth in the attachment to this Amendment No. Two, which is incorporated in full by this refer- ence: a. Exhibit A To Supplemental Contract Revision No.6 SECTION 5. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. 2 Revision April 3, 2013 IN WITNESS WHEREOF, the Parties have, by their duly authorized representatives, executed this Amendment on the date first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: _____________________________ Senior Asst. City Attorney CDM SMITH INC. Attachments: EXHIBIT A To Supplemental Contract Revision No.6 EXHIBIT A TO SUPPLEMENTAL CONTRACT REVISION NO. 6 Scope of Services for Additional Professional Services Design and Construction Management Services for the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation City of Palo Alto BACKGROUND This Supplemental Contract Revision No. 6 amends the scope of professional services initiated in the Agreement between the City of Palo Alto (CITY) and CDM Smith Inc. (CONSULTANT) dated November 18, 2009. This amendment was prepared at the request of the City to provide additional professional engineering services during construction of the Reservoir, Pump Station, and Well at El Camino Park and Mayfield Pump Station Augmentation Project. The Agreement was developed prior to commencement of the project design. At that time, it was assumed that the construction of the two projects would be completed by the end of 2012. Final completion of construction of the Mayfield and El Camino Park – Phase 1 projects are now estimated to occur in May and December 2013, respectively. Supplemental Contract Revision No. 6 will amend and extend the period of professional engineering support services provided under ‘Task 3 – Construction’ and ‘Task 4 – Post- Construction Services’ of the Agreement as a result of the projected Final Completion dates for both the Mayfield and El Camino Park – Phase 1 projects noted in the paragraph above. The tasks below are numbered to correspond to the tasks identified in the Agreement, as modified by Amendment No. 1. ADDITIONAL PROFESSIONAL SERVICES Subtask 3.1.1.2: Increased Submittal Review Activities The purpose of this subtask is to increase the budget allocation for shop drawings, product data, and samples requiring engineering review for the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 projects. Approach: Equitably adjust CONSULTANT budget to reflect number of submittals received to date and projected number of total submittals anticipated through project completion. Assumptions: None Deliverables: One copy of review comments for each submittal. Justification: The nature of the Contractors’ assembly of submittal information and total number of submittals/resubmittals for both the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 exceeds the original budget allocation. Subtask 3.1.2.1: Site Visits and Meeting Attendance During Extended Construction Periods The purpose of this subtask is to extend the scope and period of site visits and meeting attendance identified in Subtask 3.1.2 of the Agreement to cover the period through December 31, 2013. Approach: As per Subtask 3.1.2 of the Agreement. Assumptions: • CONSULTANT’s engineering staff will participate in weekly construction meetings for each of the Mayfield and El Camino Park projects. Engineering staff attendance will generally be via conference call. • CONSULTANT shall send one engineer to attend up to 8 weekly construction progress meetings, or other project-related meetings, in person as-requested by City. Deliverables: Minutes of weekly construction meetings will be generated by CONSULTANT’s Construction Manager per Subtask 3.2 of the Agreement. Minutes of non-construction meetings will be drafted by CONSULTANT for review by City. Justification: The duration and associated quantity of work to support the Mayfield and El Camino Park Phase 1 projects have increased compared to the level of effort anticipated by City and CONSULTANT at the time the Agreement was developed. Subtask 3.1.4.1 Increased Change Order Preparation and Review The Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1 have experienced an increased number of change orders as a result of changes either proposed or identified as necessary by Contractor, City, or CONSULTANT during construction. Approach: As per Subtask 3.1.4 of the Agreement. Assumptions: • As per Subtask 3.1.4 of the Agreement. • ‘Change orders’ includes ‘requests for proposals’, ‘designer clarifications’, and claims support. • The number of project change orders increased by 24, from 16 to a new total of 40. Deliverables: As per Subtask 3.1.4 of the Agreement. Justification: Although the dollar volume of approved change orders for the projects to date has been less than 3 percent of the total contract value, the number of change orders and associated development, review, processing and negotiations have exceeded the budget allocation provided in the Agreement. Subtask 3.2.1 Construction Management Services During Extended Construction Periods The purpose of this subtask is to extend the scope and period of on-site Construction Management in Subtask 3.2 of the Agreement, as modified below, to cover the period of Mayfield and El Camino Park Phase 1 project construction through December 31, 2013. Assumptions: • CONSULTANT’s Construction Manager and field-inspector shall remain at the Mayfield and El Camino Park Phase 1 project sites full-time through December 19, 2012. • Subsequent to December 20, 2012, CONSULTANT’s Construction Manager will monitor the work and perform inspection at both project sites. • No additional CONSULTANT staff is anticipated to be needed on a full- or part-time basis at the sites. Justification: The duration of Construction Management work to support the Mayfield and El Camino Park Phase 1 projects has increased beyond the budget provided in the Agreement. Subtask 4.3: Operations and Maintenance Manuals for New Facilities The purpose of this subtask is to develop Operations and Maintenance (O&M) Plans for the new facilities constructed by the Mayfield and El Camino Park – Phase 1 projects. Approach: • CONSULTANT will develop two separate O&M Manuals, one document for the Mayfield Reservoir and Pump Station, and one document for the El Camino Park Reservoir and Lytton Pump Station. Each Manual, including all tables and figures, is anticipated to be on the order of 20-30 pages in length. • • Each of the manuals will present, in a summarizing fashion, the following information for each facility: • o List of major components and equipment and intended purpose/function, • o Facility layout/orientation drawing (plan view), • o Typical equipment settings, • o Pump station operations in ‘Normal’ and ‘Emergency’ modes, • o Proposed reservoir operations, • o Control strategy overview, • o Pumping characteristics and pump curves, • o SCADA monitoring system, • o Generator operation, • o Well operation (El Camino site only) • o Chemical storage and feed (El Camino site only) • o Vendor-suggested and City-desired O&M activities and frequency, • o Emergency contact information, • o Safety, • o Alarms. • A total of two O&M coordination meetings (one kickoff and one follow-up if/as needed) will be held with Utility and Operations staff to discuss document outline, ‘normal’ and ‘emergency’ operating conditions, and City-desired O&M activities and frequency. The first meeting will be held with City staff approximately 2-3 weeks after CONSULTANT’s receipt of Notice to Proceed. • A draft of each manual will be submitted for Utility and Operations staff review prior to finalization. The draft of the Mayfield PS O&M Manual will be submitted for City Staff review approximately 7-8 weeks after the first O&M coordination meeting. • The comments by all City staff will be reviewed by City and integrated into one tabulated set of review comments on each draft Plan. Comments will be provided to CONSULTANT in a Microsoft Excel spreadsheet and CONSULTANT shall respond to comments by making entries into this spreadsheet. • The final version of each manual will be provided approximately 2 weeks after receiving City Staff comments. Assumptions: • The O&M Manuals will focus on presenting the information needed to operate the new facilities only; the documents will not be a comprehensive evaluation of all possible operating conditions associated with the City’s distribution system or discrete pressure zones of the distribution system. • Equipment information, P&IDs, and detailed O&M information already compiled and presented in either the Contractor-generated construction documents, or contained in Conformed Drawings, may be referenced, but will typically not be contained in the O&M Manuals. • Proposed outlines for each of the O&M manuals are included as Attachments 1 and 2. CONSULTANT assumes that the final outline and information presented in each manual will be similar in nature and content to that proposed in Attachments 1 and 2. • This task does not include or rely on any additional distribution system modeling. Deliverables: • Three paper copies of each draft document for City Staff review • Five paper copies of each final document, • One copy of each of the final documents in Word and Adobe “pdf” format on CD-ROM. Justification: This additional task is being added at the City’s request. Task 5.1: Additional Services The purpose of this item is delete the text associated with Task 5.1 – Additional Services from Amendment No. 1 to the original Agreement, and replace it with the revised paragraphs below: Approach: CONSULTANT shall provide the following additional services: • Identification of possible leaks at Mayfield Reservoir by underwater inspection of the completed new work within the reservoir by Aqua Video, with a not-to-exceed total allowance of $10,000. • A portion of the additional engineering and design services during construction and additional CONSULTANT project management during 2013 as a result of the extended periods of construction at the Mayfield and El Camino Park sites. These tasks are authorized under Task 5.1 with the not-to-exceed cost of $35,000, but can be performed in conjunction with, and billed under Consultant’s normal billings associated with Tasks 1-4 on the original contract. Subtask 5.2: Additional Services Approach: CONSULTANT shall provide the following additional services on an if-and as- requested basis within the limits of the available Subtask 5.2 Additional Services budget: • Noise testing or acoustic consultation. • Additional on-site inspection and support during construction beyond the estimated meetings to discuss construction progress and technical issues. • Additional engineering and design services during construction, additional Construction Management, and additional CONSULTANT project management should the construction contract extend beyond that budgeted in Task 3 per the Agreement, as revised by Amendment No. 1 and this document. • Additional construction testing and ICC inspection beyond the scope of services added by Subtask 3.2.1 of Amendment No. 1 to the Agreement. • Additional project management and QA/QC related to any Additional Service assignment. • Additional claims-related support. • Additional construction submittals, resubmittals, and RFIs for the Mayfield Pump Station Augmentation Project and El Camino Park Reservoir, Lytton Pump Station, and Well Project – Phase 1. Use of any portion of the Additional Services budget shall require written direction from the City’s Project Manager prior to proceeding with any of the services noted above. The City may, at its sole discretion, decline to authorize any or all work described in Task 5.2. SCHEDULE The contract time for all Phase 1 and Phase 2 work to be completed (including an extra allowance for contract closeout activities), is extended to June 30, 2015. COMPENSATION Compensation for Supplemental Contract Revision No. 6 services will be on a time and materials basis according to CONSULTANT’s Billing Rate Schedule attached to the Agreement. The cost for the services described herein is summarized below. Tasks Amount Additional Engineering--Sum of all additional activities under Subtask 3.1 $550,000 Additional Construction Management--Sum of all additional activities under Subtask 3.2 $348,000 Subtask 4.3: Operations and Maintenance Plans for New Facilities $75,000 Subtask 5.1: Additional Services (No monetary changes to the subtask amount of $35,000 approved in Amendment No. 1 to the Agreement) $0 Subtask 5.2: Additional Services $200,000 TOTAL $1,173,000 City of Palo Alto (ID # 3328) City Council Staff Report Report Type: Meeting Date: 4/1/2013 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Recycled Water Project Contract Title: Approval of a Water Enterprise Fund Contract with RMC Water and Environment, Inc. for a Total Not to Exceed Amount of $193,914 to Complete the Environmental Analysis of Expanding the City's Recycled Water Delivery System From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council approve a contract with RMC Water and Environment, Inc. (RMC) to complete the environmental analysis of an expanded recycled water project to serve the Stanford Research Park for $176,286, plus a contingency of $17,628, for an amount not to exceed $193,914. Staff also recommends that Council approve this contract as a “sole source” exemption from the City’s competitive bidding process under its authority in Palo Alto Municipal Code Section 2.30.360(d). Executive Summary Staff continues to prepare the environmental documents for the proposed project to extend the recycled water distribution system to customers in the Stanford Research Park area. Due to unforeseen delays largely related to completion of the project’s environmental impact report (EIR), the project has extended beyond the consultant’s contract termination date. Staff requests approval of a new contract with RMC to complete the work. The expiration date for the new contract is December 2014. Funds remaining from the expired contract will be re- authorized for the new contract, so there is no funding increase included in this request. A contract extension will allow the City to capture the remaining grant funds from the Bureau of Reclamation. Of the $193,914 associated with this new RMC contract, 50% will eligible to be recovered through grants once the environmental documents are complete. The total net amount associated with the new RMC contract after incorporation of grants will be $ $96, 957 (or less if the contingency is not needed). City of Palo Alto Page 2 Staff continues to work on various water alternatives in light of rising costs of water from the San Francisco Public Utility Commissions’ Hetch Hetchy system. The recycled water distribution system is one of the portfolio options identified for future evaluation in the Preliminary Assessment of Water Resource Alternatives. Other alternatives under review include groundwater and access to the Santa Clara Valley Water District treated water system. Background On April 16, 2007, the City Council authorized the City Manager to execute a contract with RMC for preparation of a recycled water Facility Plan and associated environmental documents for Capital Improvement Project WS-07001 (CMR 191:07). RMC completed the Facility Plan for the project in June 2008, and staff has been working on the Federal and State environmental documents since then. Since execution of the original contract, Council has approved three amendments to the contract. The project cost and approval chronology are provided in Table 1 along with actual expenditures to date. Table 1: RMC Budget and Cost Summary1 Approved Budgeted Costs Actual Expenditures Original RMC Contract April 16, 2007 (CMR: 191:07) $242,700 $242,700 Amendment No. 1 June 2, 2008 (CMR: 255:08) $25,000 $25,000 Amendment No. 2 Nov. 8, 2008 (CMR: 431:08) $35,000 $35,000 Amendment No. 3 April 12, 2010 (CMR: 207:10) $372,000 $161,848 Total RMC Contract with all amendments $674,700 $464,442 1These are gross costs, and do not include grants. Project costs net of grants are discussed below Discussion The Water Integrated Resource Plan was last updated in 2003. In preparation for updating the plan, staff has been reviewing various water resource alternatives. A recycled water distribution system extension has been one of the alternatives that staff has initiated over the past several years. In February 2013, staff began a Water Integrated Resource Plan update with a Utilities Advisory Commission discussion of the Preliminary Assessment of Water Resource City of Palo Alto Page 3 Alternatives. The recycled water project was included with other portfolio options for future evaluation. The UAC provided feedback and conceptual support for the next steps identified by staff on resources that merit further evaluation, including the recycled water project. The recycled water project has experienced significant delays since completion of the Facility Plan in June 2008, and the RMC contract expired in June 2011. While staff has addressed many issues regarding a future recycled water project, the replacement of high quality potable water with recycled water remains a concern for the landscape community and has required staff and RMC to complete additional work in preparation of the project’s EIR. These additional studies and consultations were a major factor in pushing the project completion date beyond the deadline in the RMC contract. Staff has also re-directed efforts on several occasions to activities unrelated to the preparation of the environmental documents, but critical to position the recycled water project project for success (i.e. grant funding pursuits). Completion of the environmental document is essential for securing Federal or State grant or loan funding for the construction of the project. Staff is recommending that Council approve a new contract with RMC to extend the time to complete the work required. The tasks and scope of work – completion of the environmental documents - are substantially the same with minor modifications to the deadlines and individual tasks to ensure they are consistent with current information and the new project schedule. The scope has also been updated to reflect work already completed and to ensure that updated NEPA requirements from the US Bureau of Reclamation are included. The City selected RMC through a competitive bidding process for the original contract. Staff has consulted with Purchasing and recommends that the Council approve this new contract with RMC as a sole source contract. This project qualifies for an exception to the competitve bidding process under Palo Alto Municipal Code Section 2.30.360(d) since there is no adequate substitute for this consultant’s services given the substantial work done to date on this complex project. The City has completed significantly more than half of the work required on this project and has been using the same consultant for these professional services throughout. Staff anticipates the remaining funds in the expired RMC contract will be sufficient to complete both the Federal and State environmental documents. The project received a $75,000 grant from the State Water Resources Control Board (SRWCB) to complete the Facility Plan. Since Amendment #3 to the prior contract with RMC, staff applied for and received an additional planning grant. The new grant is a 50% cost share planning grant administered by the Federal Bureau of Reclamation (Reclamation) under the Title XVI recycled water program. Staff has submitted and received reimbursement for approximately 2/3 of the grant. Table 2 illustrates the net project cost (total projected cost less grants). The total RMC cost for the expired contract and the new proposed contract has been lowered from $674,700 City of Palo Alto Page 4 (as shown in Table 1) to $658,336 (as shown in Table 2) due to a lower contingency amount in the new contract. Table 2: Project costs and grants Staff costs included in CIP Budget $42,300 Total RMC Cost (including new contract) $658,336 Total CIP Budget $700,636 Less SWRCB Planning Grant (State) ($75,000) Less Bureau of Reclamation Planning Grant (Federal) ($326,000) Total Net CIP Cost $299,636 The Reclamation grant is a cost share agreement, so the City must first incur the costs in order to get reimbursement. The City has already received about $210,000 from Reclamation. Once the environmental documents are complete, staff will submit invoices to Reclamation for reimbursement of the remaining grant amount of approximately $116,000. Reclamation has strict grant administration guidelines, and the new RMC contract is important to ensure staff can resume progress on the project and capture the remaining grant funds. Timeline City of Palo Alto Page 5 Following approval of the contract extension, Staff will resume work on the EIR. The tentative schedule for EIR preparation and presentation to City Council is provided below: Task Start End Draft EIR Preparation April 2013 August 2013 Public Review/Community Meeting August 2013 October 2013 Final EIR/Response to Comments October 2013 December 2013 Final EIR Presented to UAC December 2013 January 2014 Final EIR presented to City Council February 2014 March 2014 Staff is also working with the Bureau of Reclamation to prepare NEPA documents for the project. Federal agency environmental review is required for the City to secure a future construction grant application for 25% of the project costs, or $8.25 million. Resource Impact The proposed contract does not require any additional funds to complete all necessary work. There is approximately $210,000 remaining in Capital Improvement Project WS-07001 funds originally budgeted for the expired contract to complete the environmental work for the project. The $193,914 needed for the new contract will be reauthorized in this request, and the balance will return to the Water Fund reserves. The federal grant associated with this contract will provide 50% of the contract cost reducing the City’s cost, after the grant funds are received, to $96,957 (or less if the contingency is not needed). The new contract funding requirement is lower than that of the expired contract due to a reduction in the contingency amount. Policy Implications Executing the proposed contract is consistent with Council policy. This project is consistent with the Council-adopted Water Integrated Resource Plan Guideline 3: “Actively participate in development of cost effective regional recycled water plans.” The project is also consistent with Council direction to reduce imported water supplies and limit or reduce diversions from the Tuolumne River. City of Palo Alto Page 6 Environmental Review The project is undergroing Federal and State-mandated environmental review. Attachments:  Attachment A - Contract (PDF) Professional Services Rev. June 2, 2010 CITY OF PALO ALTO CONTRACT NO. C13148958 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND RMC WATER AND ENVIRONMENT, INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this 4th day of March, 2013, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and RMC WATER AND ENVIRONMENT, INC., a California corporation, located at 2290 North First Street, Suite 212, San Jose, CA 95131 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to study the water quality impacts of irrigation with recycled water (“Project”) and desires to engage a consultant to prepare a single-issue EIR to address the water quality impacts with recycled water in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through December 31, 2014 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. Professional Services Rev. June 2, 2010 CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A”, including both payment for professional services and reimbursable expenses, shall not exceed One Hundred Seventy Six Thousand Two Hundred Eighty Six Dollars ($176,286). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed One Hundred Ninety Three Thousand Nine Hundred Fourteen Dollars ($193,914). The applicable rates and schedule of payment are set out in Exhibit “C”, entitled “COMPENSATION ” which is attached to and made a part of this Agreement. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described in Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. Professional Services Rev. June 2, 2010 SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY’s stated construction budget, CONSULTANT shall make recommendations to the CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Suet Chau as the Project Supervisor to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. Professional Services Rev. June 2, 2010 The City’s project manager is Nicolas Procos, Utilities Department, Resource Division, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650)329-2214. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. Professional Services Rev. June 2, 2010 C13148958 SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification, CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Purchasing Manager during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid Professional Services Rev. June 2, 2010 C13148958 for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, Professional Services Rev. June 2, 2010 C13148958 weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the City’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements:  All printed materials provided by Consultant to City generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by the City’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks.  Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Office.  Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 25.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that Professional Services Rev. June 2, 2010 C13148958 action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 25.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 25.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 25.9 All unchecked boxes do not apply to this agreement. 25.10 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. Professional Services Rev. June 2, 2010 C13148958 CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: __________________________ Senior Asst. City Attorney RMC WATER AND ENVIRONMENT, INC. By:___________________________ Name:_________________________ Title:________________________ Attachments: EXHIBIT “A”: SCOPE OF WORK EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “D”: INSURANCE REQUIREMENTS Professional Services Rev. June 2, 2010 EXHIBIT “A” SCOPE OF SERVICES RMC will prepare a single-issue EIR to address water quality impacts of irrigation with recycled water. The EIR will be based on the same pipeline alignments and pump station sites as evaluated in the Initial Study/Mitigated Negative Declaration (IS/MND) published by the City in March 2009. RMC will, in consultation with the City, determine the alternatives to be analyzed upon reinitiation of the project. RMC will evaluate the No Project Alternative, Proposed Project, and one other alternative (e.g. additional treatment). This approach is preliminary; the scope of the CEQA alternatives analysis would be confirmed and may require revision following the public scoping period and conclusion of the water quality impact evaluation. RMC will also prepare environmental documents that meet the Bureau of Reclamation National Environmental Policy Act requirements. Each task is described below. Environmental Impact Report Notice of Preparation and Scoping Meeting This task has been completed. Draft EIR Preparation The Draft EIR will focus on the water quality analysis of impacts of irrigation on landscape plants in the project area, with particular emphasis on redwood trees. The Initial Study (IS) Checklist, which includes the analysis for the remaining environmental topic areas, will be included as an appendix. Other Draft EIR-related sections not specific to an environmental resource area, including the Summary, Introduction, Project Description, and Alternatives will be presented in the upfront sections of the EIR. Tasks for completion of the EIR are described below. Administrative Draft EIR The RMC team began work on the Project starting April 2010 and had prepared, to varying degrees, different sections of the Administrative EIR. RMC will resume work on the Administrative Draft EIR upon completion of the Project Description. Project Description RMC previously submitted a draft Project Description to the City. Upon receipt of requested details and comments by the City, RMC will revise the project description. The City will confirm the strategy for addressing redwood trees and other vegetation, If necessary, the Adaptive Management Program that was included in the original project description will be modified to include any recommendations developed as part of the water quality analysis. RMC will update the project description that is included in the EIR. Water Quality Analysis The Water Quality section will focus only on salinity issues, with particular emphasis on effects on redwood trees/vegetation. Other topics relating to hydrology and water quality have already been addressed in the IS, which will be included as an appendix. The EIR will describe the existing environmental and regulatory setting relevant to evaluation of salinity impacts, state where relevant the impact significance criteria, describe the impacts of the proposed project, assess their significance, and develop feasible mitigation measures as applicable to reduce or eliminate identified impacts. The EIR will identify any cumulative and unavoidable impacts associated with use of Professional Services Rev. June 2, 2010 recycled water for irrigation. HortScience, Inc. completed an investigation in June 2011 to evaluate impacts on plants of irrigation with recycled water. The investigation consisted of the following: 1) collecting and sampling of soils; 2) identifying plant species present and rating their appearance; 3) inspecting and describing soil profiles within root zones; 4) mapping the 12 locations where such activities occurred; 5) performing a survey-level soil landscape evaluation; 6) identifying constraints in using recycled water on plants; and describing the effects of irrigation with recycled water. A summary report was prepared following the above work activities. The findings of the HortScience report will be incorporated into the EIR as appropriate. Initial Study Update RMC will update the IS/MND to reflect comments made during public review of the March 2009 IS/MND, and to meet new Bay Area Air Quality Management District (BAAQMD) requirements for quantification of construction-period emissions. A new CNDDB search and a new NWIC search were conducted in 2011 to determine if new, sensitive biological and cultural resources occur in the project area. Beside the searches, field work and analysis had been initiated in 2011 on these subjects, and more than 90 percent of the biological resources work and approximately 20 percent of the cultural resources work had been done. The City will provide additional details requested in the Project Description to complete the biological and cultural resources efforts. Due to the delays in the project, there may be changes in the regulatory environment that warrant new searches be conducted and revisions to the work already completed. This scope does not include such efforts. The biological and cultural resources reports previously prepared for SWRCB will be updated as necessary for submittal to the SWRCB. Please refer to Exhibits C, D and E regarding the scope and budget for the biological and cultural resources tasks conducted by Christopher Joseph and Associates (now Environ) and William Self Associates, respectively. CEQA Required Analyses Most of the CEQA required analyses can be based on the analysis contained in the IS/MND. This section will include evaluation of growth inducing impacts and cumulative impacts, and identification of any significant irreversible environmental changes or significant unavoidable adverse impacts. The EIR will also include a summary and evaluation of alternatives, including identification of the environmentally superior alternative. With the exception of the cumulative analysis, the other sections will be integrated in the upfront portion of the EIR. The cumulative analysis will be included in the IS Checklist. Document Preparation RMC will prepare a concise, clearly written, and easily understandable Administrative Draft EIR (ADEIR) summarizing the information developed in the above tasks. RMC will prepare all CEQA Mandated Sections. RMC will include tangible (i.e., quantifiable) performance objectives for all identified mitigation to the extent feasible, identification of appropriately timed monitoring, identification of agency or staff responsible for monitoring, and mitigation or measures to be implemented should the performance objectives not be met. RMC will submit the ADEIR to the City for internal review and comment. Screencheck Draft EIR The City will provide comments on a single annotated comment copy of the ADEIR that provides clear direction for revisions. Upon receipt of comments from the City, RMC will hold a meeting to review comments and discuss the approach for revising the document. RMC will prepare a Professional Services Rev. June 2, 2010 Screencheck Draft EIR incorporating necessary revisions and refinements based upon comments received from the City on the ADEIR. RMC will ensure that all City comments are addressed thoroughly. Deliverables: RMC will submit an ADEIR to the City. City staff will have up to three (3) weeks to review the ADEIR and provide comments. Following receipt of comments from the City, RMC will submit a Screencheck Draft within three (3) weeks. The City will have up to one (1) week to review the Screencheck Draft EIR. Public Review of Draft EIR RMC will prepare a Draft EIR, incorporating necessary revisions and refinements based upon the City’s final edits on the Screencheck Draft EIR. RMC will submit the Draft EIR in hard copy (20 bound copies, one unbound copy, and 20 CD copies) and electronic format ready for posting on the City’s website. RMC will also submit a draft Notice of Availability and Notice of Completion (NOC) to the City so that the City can advertise in the local newspaper and file the NOC at the State Clearinghouse (along with 15 CD copies of the Draft EIR), respectively. RMC will submit 8 hard copies of the Draft EIR and supporting documentation to the SWRCB. RMC will work with the City to refine the NOP distribution list to produce a distribution list for the EIR. RMC will work with the City to plan and conduct a public meeting to answer questions regarding the Draft EIR. The public meeting may include an open house format to allow the maximum opportunity for the public to ask questions and get information about the project. Deliverables: RMC will prepare a Draft EIR within one (1) week of receipt of comments from the City on the Screencheck Draft EIR. RMC will submit a NOA and NOC to the City. RMC will assist the City in preparing for and conducting a public review meeting during the EIR public comment period. Final EIR and Associated Documents RMC will meet with the City at the close of the comment period during the final EIR phase to identify and develop approaches for key issues raised. If appropriate, RMC may use master responses for topics of greatest interest to local agencies and the surrounding community. The scope of work assumes 78 hours of staff time to determine with the City the approach to respond to public comments, bracket the comments, and provide written response to the comments; should the estimated level of effort for preparing responses exceed the hours assumed, additional work would need to be authorized through a contract modification. Draft Final EIR (Response to Comments document), MMRP, and Findings The Final EIR will consist of the Response to Comments (RTC) document and Public Draft EIR. RMC will prepare an a RTC document that includes: 1) all letters received on the Draft EIR and summaries of all substantive comments made on the Draft EIR at the public meeting, 2) responses to each comment, and 3) text revisions to the Draft EIR shown in errata format. RMC will also prepare a Draft MMRP, which will consolidate all required and recommended mitigation measures into one table. In addition, RMC will prepare draft Findings. RMC will submit the Draft Response to Comments document, Draft MMRP, and Draft Findings to the City for review. Screencheck Final EIR (RTC document), MMRP, and Findings RMC will revise the Draft RTC document, Draft MMRP, and Draft Findings per City recommendations and a screencheck will be submitted for review. Professional Services Rev. June 2, 2010 Final EIR (RTC document), MMRP, and Findings RMC will submit the Final Response to Comments document, MMRP, and Findings to the City in electronic format. RMC will provide 20 bound copies and one unbound copy of the final Response to Comments document. RMC will attend the certification hearing and will be prepared to answer questions from the City Council. RMC will prepare a Notice of Determination for the City to file with the State Clearinghouse. Deliverables: RMC will prepare a Draft Response to Comments document, draft and Final MMRP, and draft and Final Findings. RMC will also prepare a Notice of Determination. The City will have up to two (2) weeks to review and provide comments. Following receipt of comments, RMC will submit a Screencheck Response to Comments Document, MMRP, and Findings to the City within one (1) week. The City will have one (1) week to review and provide comments. Following receipt of comments, RMC will submit the Final EIR, MMRP, and Findings within one week. NEPA Documentation RMC will assist the City in obtaining NEPA clearance from the U.S. Bureau of Reclamation (USBR), so that the project can qualify for federal funding. Previously, it was assumed that an EA would be required for USBR compliance. As such, preparation of the EA had occurred in parallel with the EIR. However, based on communication with USBR in July 2011, a new strategy has been identified. USBR recommended preparation of a brief Supplemental Information Document. Combined with the CEQA EIR, the Supplemental Information Document would lead to a Finding of No Significant Impact (FONSI). USBR has suggested that the Supplemental Information Document would be prepared close to the completion of the EIR (during the latter part of the Final EIR preparation stage), so that all issues have been dealt with adequately in the EIR process. RMC will complete the tasks identified below. Please refer to Exhibits C, D and E regarding the scope and budget for the biological and cultural resources tasks conducted by Environ and William Self Associates, respectively. Administrative Draft Supplemental Information Document RMC will prepare Administrative Drafts of a Supplemental Information Document to submit to USBR. The Supplemental Information Document will be brief (less than 20 pages) and would include additional topical analysis required by NEPA, including socioeconomics and environmental justice. Deliverables: RMC will submit an Administrative Draft Supplemental Information Document to USBR. It is assumed that USBR staff will require up to four (4) weeks to review and comment on the Administrative Draft Supplemental Information Document and associated documents. Screencheck Draft Supplemental Information Document USBR will provide comments on a single annotated comment copy of the Administrative Draft Supplemental Information Document that provides clear direction for revisions. Upon receipt of comments from USBR, RMC will revise the document and prepare a Screencheck Draft Supplemental Information Document, incorporating necessary revisions and refinements based upon comments received from USBR on the supplemental document . RMC will ensure that all USBR comments are addressed thoroughly. Deliverables: Following receipt of comments from USBR, RMC will submit a Screencheck Draft within three (3) weeks. USBR will have up to one (1) week to review the Screencheck Draft EA. Professional Services Rev. June 2, 2010 Final Supplemental Information Document RMC will prepare the Final Supplemental Information Document, incorporating necessary revisions and refinements based upon USBR final edits on the Screencheck Draft Supplemental Information Document. RMC will submit the Final Supplemental Information Document to USBR in hard copy (10 bound copies and one unbound copy) and electronic format. Deliverables: RMC will prepare a Final Supplemental Information Document within one (1) week of receipt of comments from USBR on the Screencheck Draft Supplemental Information Documents. Project Management / Meetings RMC will coordinate with the City, USBR, RMC’s subconsultants and internal staff on all CEQA and NEPA items related to the project. This task also includes two conference calls / one meeting with the City and/or USBR to discuss CEQA / NEPA issues at key junctures of the process. This task also covers preparation of monthly invoices and progress reports. It should be noted that as the project timeframe has been extended well beyond the anticipated 10 months (although a portion of time the project was on hold), and project management tasks (including conference calls and meetings) were still being conducted to address outstanding issues (e.g., salinity approach), the remaining budget for this task is limited. Deliverables: RMC will submit monthly status reports to the City. Optional Services The following tasks are optional tasks that will require authorization by the City before can be initiated. It should be noted that portions of the optional tasks have been authorized for both Environ and WSA. NEPA Documentation USBR may have additional consultation requirements related to Section 7 and Section 106 consultation. The need for and level of consultation have not been determined and will be determined based on discussions with USBR. The optional tasks include both Sections 7 and 106 consultations. Please refer to Exhibits C, D and E regarding the scope and budget for the biological and cultural resources tasks conducted by Environ and William Self Associates, respectively. The current strategy related to Section 7 consultation (to address biological resources effects) is to include biological resources-related environmental commitments (Avoidance Measures) in the Project Description so the City can proceed with informal consultation with the USFWS (rather than formal consultation). We will need the City’s confirmation to commit to these measures. It should be noted that the final determination for formal or informal consultation has not yet been determined and will be determined by USFWS. Assumptions  Additional outreach beyond the EIR preparation is not assumed in this scope of work / budget.  No new substantive issues (beyond those the City has already encountered during the public comment phase of the IS/MND) are assumed to arise.  The Project Description is assumed to be generally complete, with the exception of additional details that will require City input. Once the City responds to the requested information on the Project Description and provides direction on salinity strategy, the project Professional Services Rev. June 2, 2010 will be reinitiated. Currently, the project is anticipated to reinitiate on March 4, 2013. For the purposes of the Microsoft schedule the initiation date is assumed to be March 4, 2013.  The City will provide comments (including requested information) on all deliverables promptly.  Other sections of the EIR that will be developed include: Summary, Introduction, Alternatives, and Cumulative Impacts. With the exception of the Cumulative Impacts, the other sections will be included in the upfront portion of the EIR.  One public meeting is assumed during the public comment period for the Public Draft EIR. RMC will provide support (presentation preparation) and attend the Public Meeting (4 hours for two staff members). The City will coordinate the meeting planning, present at, and facilitate the meeting.  ODCs for the Public Draft EIR covers printing, mailing, and travel expenses. Graphics in the document will be printed in black and white only. A maximum of 28 hard copies will be printed (which includes 20 copies for the City and 8 copies for SWRCB), a maximum of 50 copies of a CD will be burned if needed (15 will be sent to SCH), and a maximum of 100 notices (NOA) if needed will be printed. The City will be responsible for publishing the notice in the local newspaper and/or posting the notice at the project sites.  Preparation of the Response to Comments document is based on hours, which may increase depending on the number of comments received. Should the estimated level of effort exceed the hours assumed, additional work would need to be authorized through a contingency release or other appropriate contract modification.  The City will prepare and send response letters to responsible agencies commenting on the EIR.  The Draft EIR and the Response to Comments (with errata) constitutes the Final EIR document; RMC will not print an Integrated EIR.  For all deliverables, only one administrative draft and one screencheck are proposed. If additional deliverables are included, then the work effort will increase.  For all CEQA-related deliverables, we assume one set of consolidated, non-conflicting comments from the Utilities and Planning Departments.  For all NEPA-related deliverables, we assume they will be reviewed by the USBR only (not the City). Thus, the hours identified for preparation of NEPA deliverables are based on two rounds of comments from USBR only, and not additional comments from the City.  For NEPA deliverables, we assume one set of consolidated, non-conflicting comments from the USBR.  USBR will be responsible for all noticing of NEPA documents.  The City will file the Notice of Determination with the State Clearinghouse.  It is assumed that the NEPA Supplemental Information Document would be published after the publication of the EIR, such that any issues arising from the EIR will have been resolved. The EIR, in combination with the Supplemental Information Document, is the basis of the FONSI. Professional Services Rev. June 2, 2010  Project management includes coordination with the City, USBR, and the internal team. It is possible that the schedule as shown will be delayed if the initiation date is delayed, the salinity approach requires further refinement beyond RMC’s control, or the NEPA process takes longer than expected.  We assume that protocol-level surveys for special-status plants or animal species or formal delineation of waters and wetlands will not be conducted. The Environ biological team can conduct such studies if required and requested; however, an expanded scope and cost estimate would be required for such services. Professional Services Rev. June 2, 2010 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Task Name Duration Start Finish Project Reinitiated / City provides all outstanding items on PD 1 day Mon 3/4/13 Mon 3/4/13 1.2 DEIR Preparation 176 days Tue 3/5/13 Mon 11/11/13 RMC Prepares ADEIR 80 days Tues 3/5/13 Tues 6/25/13 City reviews ADEIR 45 days Wed 6/26/13 Wed 8/28/13 RMC prepares Screencheck DEIR 25 days Thu 8/29/13 Thu 10/3/13 City reviews Screencheck DEIR 25 days Fri 10/4/13 Fri 11/8/13 Meeting with City to discuss City comments on Screencheck EIR 1 day Mon 11/11/13 Mon 11/11/13 1.3 Public Review of Draft EIR 55 days Tue 11/12/13 Mon 2/3/14 RMC prepares Draft EIR, NOA, and NOC 25 days Tue 11/12/13 Wed 12/18/13 DEIR publication 0 days Wed 12/18/13 Wed 12/18/13 DEIR public review period 47edays Wed 12/18/13 Mon 2/3/14 Public Meeting 0 days Mon 1/13/14 Mon 1/13/14 1.4 Final EIR and Associated Documents 129 days Tue 2/4/14 Wed 8/6/14 Meeting with City to discuss public comments on DEIR 1 day Tue 2/4/14 Tues 2/4/14 RMC prepares Draft RTC, MMRP, Findings 30 days Wed 2/5/14 Wed 3/19/14 City reviews Draft RTC, MMRP, Findings 30 days Thu 3/20/14 Wed 4/30/14 RMC prepares screencheck RTC, MMRP, and Findings 20 days Thu 5/1/14 Thu 5/29/14 City reviews screencheck RTC, MMRP, and Findings 20 days Fri 5/30/14 Thu 6/26/14 RMC prepares Final RTC, MMRP, and Findings 20 days Fri 6/27/14 Fri 7/25/14 EIR Certification/Project Approval (2nd and last Weds of the month) 1 day Tue 8/5/14 Tue 8/5/14 File NOD 1 day Wed 8/6/14 Wed 8/6/14 2 NEPA Documentation 128 days Fri 6/27/14 Wed 12/31/14 RMC prepares Administrative Draft Supplemental Information Document 30 days Fri 6/27/14 Fri 8/8/14 USBR reviews Administrative Draft Supplemental Information Document 30 days Mon 8/11/14 Mon 9/22/14 RMC prepares Screencheck Draft Supplemental Information Document 20 days Tue 9/23/14 Tue 10/21/14 USBR reviews Screencheck Draft Supplemental Information Document 20 days Wed 10/22/14 Wed 11/19/14 RMC prepares Final Supplemental Information Document 8 days Thu 11/20/14 Tue 12/2/14 Supplemental Information Document and FONSI Publication/signatures 20 days Wed 12/3/14 Wed 12/31/14 Professional Services Rev June 2, 2010 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule as in Exhibit C up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Basic Services”) and reimbursable expenses shall not exceed $176,286. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $193,914. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, does not exceed $176,286 and the total compensation for Additional Services does not exceed $17,628. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $97,778 (Environmental Impact Report) Task 2 $31,507 (NEPA Documentation) Task 3 $8,601 (Project Management) Task 4 $38,400 (Optional Tasks) Sub-total Basic Services $176,286 Total Basic Services and Reimbursable expenses $176,286 Additional Services (Not to Exceed) $17,628 Maximum Total Compensation $193,914 REIMBURSABLE EXPENSES Professional Services Rev June 2, 2010 The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manage and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement Professional Services Rev June 2, 2010 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY Professional Services Rev June 2, 2010 THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 City of Palo Alto COLLEAGUES MEMO April 08, 2013 Page 1 of 2 (ID # 3713) DATE: April 8, 2013 TO: City Council Members FROM: Council Member Schmid, Mayor Scharff, Council Member Burt, Council Member Price SUBJECT: COLLEAGUE'S MEMO FROM MAYOR SCHARFF AND COUNCIL MEMBERS BURT, PRICE, AND SCHMID REGARDING EXPANSION OF PERCENT FOR ART AND PUBLIC ART IN PRIVATE DEVELOPMENTS AND APPROPRIATE MAINTENANCE OF OUR EXISTING AND FUTURE PUBLIC ART COLLECTION Recommendation: 1 To extend the current One Percent For Art Policy to new and or remodeled private large commercial developments and housing projects with the details of the Policy to be developed by staff and considered by the Policy and Services Committee. Single-family homes, duplexes, triplexes and four-plexes and historical preservation sites would be exempt. The Policy at a minimum should provide that 1) the applicant may choose to pay the 1% in-lieu fee to the Public Art Commission rather than commission artwork at the site; 2) That the care and appropriate maintenance of the artwork will be the responsibility of the private developer; 3) The care and maintenance plan will be reviewed and monitored by the City staff; and 4) The artwork must not be demolished, removed or destroyed without City approval. 2 That City Staff be directed to develop a robust plan for consideration by the Policy and Services Committee and then the full Council that evaluates the current modest General Fund contributions and considers a possible administrative fee and or set aside of a portion of the funds received under the current Percent for Art Policy to account for ongoing and future maintenance of the existing and future artworks commissioned under the Percent for Art Policy based on a realistic assessment of the maintenance needs of the Cities Public Art Collection and administration needs of that collection. The goal should be a transition to a self-sustaining robust program that does not rely on general fund contributions. 3 The City should welcome and encourage a variety of art experiences including interactive art, sculptures, murals, mosaics, innovative spaces or facades that engage the public and signature architectural features. April 08, 2013 Page 2 of 2 (ID # 3713) Background: Public art creates a sense of place and personality while fostering the kind of innovative thought that Palo Alto is known for. The City of Palo Alto approved a Percent for Art Policy in September 2005 that earmarks 1% of the construction costs of municipal projects for public art. This policy (1-45/CSD) funded the Jeff Petersen mural at the Children’s Library, the Ceevah Sobel piece at the pump station on East Bayshore Road and the Bruce Beasley piece scheduled for installation at the Mitchell Park Library and Community Center as well as other pieces. Cities across the country are including a percent for art policy for private developments and having positive results. On-site public art enhances the quality of a space and infuses it with character while becoming a notable landmark for the neighborhood. It is not just good citizenship, it is good for business. As Palo Alto continues to develop, the availability of space for public art becomes more limited. With landmark public art, we build our City’s identity and engage the public, which is the power of public art. It is important that developers coming to Palo Alto positively impact the development, look and feel of our city. Some of the other California cities with percent for art policies in private developments include Brea, Burbank, Cathedral City, Emeryville, Sunnyvale, Laguna Beach, Walnut Creek, and of course San Jose, San Francisco, San Diego, and Oakland. The City of Santa Monica, with a very comparable population to Palo Alto and a lower median income, recently initiated a 2% percent for art program for private developments. The policy applies to commercial projects over 7,500 square feet, residential developments of 5 units or more, and remodels over 25,000 square feet. Santa Monica, along with more than 24 other California cities, does offer the option for private developers to pay the percentage to the public art office in-lieu of commissioning a piece of public art. These funds can be used to foster other public art projects and maintain the works in the current Art in Public Places collection. Under the current policy, there is no provision for the costs associated with the management or maintenance of the artworks commissioned under the Percent For Art Policy. A major issue in public art is funding maintenance and conservation as well as adequate funding to administer the Public Art program. Numerous other cities, including neighboring Berkeley, Emeryville, San Jose, Oakland and Santa Cruz have increased their percentage in municipal projects to 1.5% or even 2% in order to set aside funds dedicated for the routine maintenance of the artwork. Conclusion Palo Alto has fallen behind other cities in fostering public art and providing a dedicated funding source for maintenance of our public art collection. It’s time for Palo Alto to take the modest step of extending its Percent for Art Policy to private developments and to provide for a dedicated source for maintenance and administration of our public art collection. City of Palo Alto (ID # 3637) City Council Staff Report Report Type: Informational Report Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: 4th Semi-Annual LEAP Update Title: Fourth Semi-Annual Long-term Electric Acquisition Plan (LEAP) Update From: City Manager Lead Department: Utilities This fourth and final semi-annual update of the Long-term Electric Acquisition Plan (LEAP) is provided as information only. The purpose of the update is to keep the City Council apprised of staff’s efforts towards implementing the Council-approved LEAP Objectives, Strategies and Implementation Plan (Attachment B). Executive Summary Since the last LEAP update in September 2012, significant progress has been made towards several key LEAP implementation items including: Council approval of the Carbon Neutral Plan in March 2013; Council approval of the Brannon Solar power purchase agreement, bringing the City’s Renewable Portfolio Standard in 2015 from 29.7% to 34.5% within the 0.50 cent/kWh rate cap; evaluation of new long-term renewable energy proposals submitted in response to the Fall 2012 RFP; Council authorization to execute Electric Master Agreements with nine new electric suppliers in March 2013; and initiation of the process to revamp the PaloAltoGreen program. Since the LEAP Implementation Plan was approved in March 2011, 34 of the original 38 tasks have been completed, are in process, or are ongoing. The remaining four projects are on hold or delayed, but will be completed. Therefore, staff will no longer provide updates related to the implementation of the LEAP Implementation Plan. LEAP will be reviewed in the context of the recently approved Carbon Neutral Plan and staff may recommend modifications to Council as needed to effectively implement both plans. Attachments:  Attachment A: LEAP Update March 2013 (PDF)  Attachment B: LEAP April 2012 (PDF) Attachment A Page 1 of 8 Long-term Electric Acquisition Plan (LEAP) Semi-annual Update -- April 2013 LEAP Implementation Plan Item Estimated Completion in LEAP April 2013 Update Status Strategy #1 - Resource Acquisition 1. Adjust planning and portfolio models to include an integrated and least cost planning perspective which evaluates demand and supply side resources in an integrated manner and includes time of delivery, locational and environmental costs and benefits. Dec. 2010 Completed 2. Evaluate the impacts of energy efficiency, demand reductions and electric vehicle penetration in Palo Alto in the annual development of the electric load forecast. Dec. 2010 Completed Strategy #2 – Electric Energy Efficiency and Demand Reduction 3. Provide quarterly updates on electric efficiency program achievements including tracking against 10-Year Energy Efficiency goals to the UAC and annual updates to the City Council. quarterly No update* On-going 4. Develop Energy Efficiency Implementation Plan for the 2010 10-Year Electric EE Plan addressing certain items identified in the May 2010 Council Colleagues Memo and identification of resources and funding needed to achieve EE goals. Apr. 2011 Completed 5. Evaluate fuel switching energy efficiency measures and include them, if cost-effective, in the Electric and Gas EE Implementation Plans. Feb. 2011 Completed 6. Develop a pilot Demand Response Program for large commercial industrial customers for implementation in summer 2011. Apr. 2011 Completed Attachment A Page 2 of 8 LEAP Implementation Plan Item Estimated Completion in LEAP April 2013 Update Status 7. Assess the feasibility and cost-effectiveness of using current and potential thermal energy storage (TES) systems to shift load from on-peak periods to off-peak periods, for use in a demand response program, or for meeting any energy storage needs. Coordinate with task 21 to develop targets, if appropriate. Dec. 2011 In the summer of 2012, an intern helped analyze the applicability of storage systems within Palo Alto and found no compelling business case to do so. A more detailed distribution feeder based analysis is expected to be undertaken during the summer of 2013, and both findings are expected to be discussed with the UAC by November 2013. Report to UAC by Nov 2013 8. Fully integrate the effects on energy efficiency in the long-term electric load forecast. Nov. 2010 Completed Strategy #3 – Renewable Portfolio Standard (RPS) 9. Evaluate the merits of implementing a feed-in-tariff (FIT) and the potential to meet RPS goals through local renewable resources. Jan. 2011 Completed 10. Seek UAC recommendation and Council approval of the policy elements of a FIT to encourage local renewable resource projects. May 2011 Completed 11. Continue working with NCPA to identify opportunities, including joint-ownership, for developing qualifying renewable resources. On-going Joint ownership options being investigated include a geothermal project (see item #13) and the installation of micro-turbines at the Calaveras Hydroelectric Project. On-going 12. Evaluate the use of renewable energy credits (RECs) to meet a portion of the City’s RPS goal and/or greenhouse gas emission reduction goals and monitor the regulations and requirements regarding the use of RECs to meet RPS goals. On-going On March 4, 2013, Council approved the Carbon Neutral Plan, which allows the use of RECs to neutralize GHG associated with market purchases. Completed Attachment A Page 3 of 8 LEAP Implementation Plan Item Estimated Completion in LEAP April 2013 Update Status 13. Evaluate a proposed geothermal project being considered by NCPA, including a pre-pay option and the benefit, costs, and risks of a pre-pay structure. June 2011 This project has been delayed due to development issues. Staff and NCPA are monitoring key contract milestones and will make an assessment whether or not to terminate the PPA with Western Geo. In process 14. Conduct a Request for Proposals for eligible renewable resources including RECs and evaluate alternative renewable resource technologies and contracting mechanisms. RFP in June 2011 Staff issued a Request for Proposals for eligible renewable resources in September 2011. A total of 65 project proposals were submitted. Staff negotiated a Power Purchase Agreement (PPA) for the 20 MW Brannon Solar project with the finalist, Trina Solar. Council approved this agreement in November 2012. Staff issued another RFP for eligible renewable resources in August 2012. A total of 92 project proposals were received in September 2012. Staff is now finalizing negotiations on three PPAs for solar projects with the finalists in this process and anticipates bringing these agreements to Council for consideration by June 2013. In process Strategy #4 – Local Generation 15. Provide an update of past local generation feasibility studies and actions to UAC and Council Dec. 2010 Completed Attachment A Page 4 of 8 LEAP Implementation Plan Item Estimated Completion in LEAP April 2013 Update Status 16. Assess the potential for and feasibility of small local distributed and non-distributed, renewable and cogeneration projects, including using a FIT to encourage these projects. Jan. 2011 Renewable projects are being evaluated as part of the City’s FIT program (see item #19). An assessment of cogeneration will be part of evaluation of the City’s PLUG-In program. See item #18. In process 17. Assess the potential, benefits and costs of developing and/or joint ownership of a 25 to 50 MW gas-fired power plant located in or near Palo Alto to meet load, reliability and local capacity needs. Jun. 2011 Completed 18. Evaluate the City’s PLUG-In Program to encourage cogeneration including rules, regulations, and buy back rates and recommend modifications as needed. December 2011 Staff proposal is being developed. In process 19. Following receiving Council direction from Implementation Plan Initiative #10, develop a FIT proposal including rate, rules, regulations, standard contract form and limits. To be deter- mined Completed 20. Assess the economics and potential of the anaerobic digester as a local generation resource for CPAU Sep. 2011 In January 2013 Council approved an energy purchase policy for waste to energy projects in Palo Alto. Further evaluation will be performed by the Public Works Department with the Utilities Department advising as necessary. Completed Attachment A Page 5 of 8 LEAP Implementation Plan Item Estimated Completion in LEAP April 2013 Update Status 21. Assess the need for and value of energy storage to support local renewable distributed generation resources. Determine any appropriate energy storage targets to be achieved by December 31, 2016, and December 31, 2021. Report back to the Council regarding what procurement targets, if any, are deemed to be appropriate so that the Council may adopt such procurement targets, if determined to be appropriate, by October 1, 2014. Oct. 2014 As directed by Public Utilities Code Section 2836, staff will bring to UAC/Council a report with recommended energy storage targets, if any, for potential council adoption in Winter of 2013. See task #7 in support of this task. November 2013 Strategy #5 – Climate Protection 22. Promote the City’s Plug-in program to encourage development of cogeneration systems. On-going Staff continues to provide information to interested applicants under the City’s existing PLUG-In program. Also see item #18 above. On-going 23. Analyze electric vehicle (EV) charging patterns and evaluate rates to incent nighttime EV charging. Jun. 2011 Council adopted a TOU rate for the CustomerConnect pilot program on December 10, 2012. Up to 100 customers with EVs will be allowed to participate in the pilot program. Planned for Fall of 2012 to Fall of 2013 24. Meet AB32 mandated annual reporting requirements to California Air Resources Board on annual volumes of electricity purchases by resource. Annually, next in Jun. 2013 Completed 25. Track and report annually on 6 major greenhouse gas emissions (CO2, CH4, N2O, SF6, HFCs, PFCs) for all of the City’s municipal operations and calculate electric portfolio’s overall emissions coefficients (lbs of CO2, CH4, and N2O per MWh of purchases). Annually, next in Sep. 2012 Report with emissions data for calendar year 2010 submitted to The Climate Registry in December 2011. Utilities and Public Works staff is coordinating efforts to submit calendar year 2011 and 2012 reports to The Climate Registry by April 2013. On-going Attachment A Page 6 of 8 LEAP Implementation Plan Item Estimated Completion in LEAP April 2013 Update Status 26. Evaluate the costs, benefits and impacts of the implementation of an electric portfolio carbon neutral policy and the setting of quantitative goals (e.g. carbon intensity, total GHG emissions). Jan. 2012 Council approved carbon neutral definition in November 2012 and the Carbon Neutral Plan in March 2013. Completed 27. Evaluate PaloAltoGreen program design and recommend modifications, as appropriate, including constructing PaloAltoGreen to assist in meeting Renewable Portfolio Standard goals. Jun. 2012 The UAC discussed potential PaloAltoGreen redesign options in December 2012, and the Council held a study session on potential redesign options in February 2013. Recommendations are expected to be provided to the UAC in April, Finance Committee in May and Council in June of 2013. In process Strategy #6 – Hydro Resource Management 28. Evaluate potential rate adjustment mechanisms that would adjust electric rates based on hydrologic year type and develop a recommendation for a rate. Apr. 2011 Implementation has been delayed pending development of new rate policies and reserves policies, which are expected to be completed in FY 2014. On hold 29. Assess the value related to Palo Alto’s participation in the CAISO’s Metered Subsystem Agreement and the use of the Calaveras hydroelectric project for load following. On-going No update * On-going 30. Identify long-term opportunities to maximize the value of the Calaveras hydroelectric project as an energy storage resource. On-going Staff is working with NCPA to understand new flexible ramping requirements to be proposed CAISO capacity needs for intermittent resources and the role Calaveras will play. Additionally, staff intends to explore hydro energy storage in the context of meeting the requirements set forth in AB 2514 (see item #21). On-going Attachment A Page 7 of 8 LEAP Implementation Plan Item Estimated Completion in LEAP April 2013 Update Status 31. Work with NCPA to seek opportunities to increase the efficiency of the Calaveras hydroelectric project and implement operational value maximizing strategies. On-going No update * On-going Strategy #7 – Market Price Exposure Management 32. Evaluate a block purchase of up to 25 MW to meet base load needs for Jan-Mar and Nov-Dec for a term of up to 5 years. Feb. 2011 No Update * On hold 33. Conduct an RFP for new electric master agreement counterparties. Dec. 2011 In March 2013, Council authorized the City Manager to finalize and execute nine electric master agreements and carryout transactions under the agreements. Completed 34. Explore opportunities with NCPA, other municipal utilities and/or third party suppliers to reduce scheduling and/or operating costs. On-going No update * On-going 35. Continue to implement a 3-year laddering strategy to manage market price uncertainty. On-going No update * On-going Strategy #8 – Transmission and Reliability 36. Investigate transmission connection voltage upgrade from 115 to 230 kV, and the potential for a transmission reliability connection to west side. On-going CPAU and Stanford are working on a memorandum of understanding and a firm proposal for SLAC and the Department of Energy (DOE). Currently CPAU’s consultant is rerunning the load flow studies to incorporate new load assumptions for SLAC and Stanford. CPAU and Stanford are also moving forward on right-of-way, land use, and routing options. On-going 37. Explore transmission opportunities and strategies to meet long-term renewable portfolio objectives beyond 2020. On-going No Update * On-going Attachment A Page 8 of 8 LEAP Implementation Plan Item Estimated Completion in LEAP April 2013 Update Status 38. Evaluate joint efforts for power plant ownership opportunities or long-term agreements to meet the City’s Resource Adequacy Program requirements. On-going No Update * On-going * No update – For these items, there is no update since the September 2012 semi-annual LEAP update Key for Acronyms: AB – Assembly Bill AB32 – Assembly Bill for Greenhouse Gas Emissions Reduction AB 2514 – Assembly Bill for Energy Storage CAISO – California Independent System Operator CARB – California Air Resources Board CH4 – Methane CO2 – Carbon Dioxide CPAU – City of Palo Alto Utilities DOE – Department of Energy EE – Energy Efficiency EV – Electric Vehicle FIT – Feed-in-tariff GHG – Greenhouse Gas Emissions HFCs – Hydrofluorocarbons kV – Kilo volt kWh – Kilowatt-hour MSSA – Metered Subsystem Agreement MW – Mega Watt MWh – Mega Watt hour N2O – Nitrous Oxide NCPA – Northern California Power Agency PFCs – Perfluorocarbons PLUG-In – Power from Local Ultra-clean Generation Incentive PPA – Power Purchase Agreement RFP – Request for Proposal RPS – Renewable Portfolio Standard SB2 1X – California Senate Bill for 33% RPS SF6 – Sulfur Hexafluoride SLAC – SLAC National Accelerator Laboratory TES – Thermal Energy Storage TOU – Time-of-Use UAC – Utilities Advisory Commission WAPA – Western Area Power Administration 1 Attachment B Long-term Electric Acquisition Plan (LEAP) Objectives, Strategies and Implementation Plan Approved March 7, 2011 (Resolution No. 9152) Modified by Council March 19, 2012 (Staff Report No. 2581) Modified by Council April 16, 2012 (Staff Report No. 2710) LEAP Objectives: 1. Meet customer electricity needs through the acquisition of least total cost energy and demand resources including an assessment of the environmental costs and benefits 2. Manage supply portfolio cost uncertainty to meet rate and reserve objectives. 3. Enhance supply reliability to meet City and customer needs by pursuing opportunities including transmission system upgrades and local generation. LEAP Strategies and Implementation Plan Steps: 1. Resource Acquisition – Pursue the least total cost resources including an assessment of environmental costs and benefits to meet the City’s needs in the long term by: a. Evaluating each potential resource on an equal basis by evaluating rate impacts and establishing costs and values for location, time of day and year, carbon, value of renewable supplies and any secondary benefits attributed to the resource; and b. Including all resources – conventional energy, local and remote renewable energy supplies, energy efficiency, cogeneration, and demand reduction – in the evaluation. Implementation Plan Items for Strategy #1 – Resource Acquisition Estimated Completion 1. Adjust planning and portfolio models to include an integrated and least cost planning perspective which evaluates demand and supply side resources in an integrated manner and includes time of delivery, locational and environmental costs and benefits. Dec. 2010 2. Evaluate the impacts of energy efficiency, demand reductions and electric vehicle penetration in Palo Alto in the annual development of the electric load forecast. Dec. 2010 2. Electric Energy Efficiency and Demand Reduction – Fund programs that maximize the deployment of cost-effective, reliable and feasible energy efficiency and demand reduction opportunities as the highest priority resources by: a. Every three years, preparing a ten-year energy efficiency plan that identifies all cost- effective energy efficiency opportunities; 2 b. Using the cost of long-term renewable energy resources adjusted for time of day factors and location as the avoided cost when evaluating cost effectiveness of energy efficiency measures; c. Designing and making energy efficiency programs available to all customers; and d. Considering the impacts (costs, benefits and GHG emissions) of substituting electricity-using appliances for natural gas-using appliances and vice versa in the ten- year energy efficiency plan. Implementation Plan Items for Strategy #2 – Electric Energy Efficiency and Demand Reduction Estimated Completion 3. Provide quarterly updates on electric efficiency program achievements including tracking against 10-Year Energy Efficiency goals to the UAC and annual updates to the City Council. quarterly 4. Develop Energy Efficiency Implementation Plan for the 2010 10-Year Electric EE Plan addressing certain items identified in the May 2010 Council Colleagues Memo and identification of resources and funding needed to achieve EE goals. Apr. 2011 5. Evaluate fuel switching energy efficiency measures and include them, if cost- effective, in the Electric and Gas EE Implementation Plans. Feb. 2011 6. Develop a pilot Demand Response Program for large commercial industrial customers for implementation in summer 2011. Apr. 2011 7. Assess the feasibility and cost-effectiveness of using current and potential thermal energy storage (TES) systems to shift load from on-peak periods to off-peak periods, for use in a demand response program, or for meeting any energy storage needs. Coordinate with task 21 to develop targets, if appropriate. Sep. 2011 3. Renewable Portfolio Standard (RPS) – Reduce the carbon intensity of the electric portfolio by acquiring renewable energy supplies by: a. Pursuing a minimum level of renewable purchases of at least 33% of retail sales by 2015 with the following attributes: i. The contracts for investment in renewable resources shall not exceed 30 years in term. ii. Pursue only renewable resources deemed to be eligible by the California Energy Commission (CEC). iii. Evaluate use of Renewable Energy Certificates (RECs) to meet RPS. b. Ensuring that the retail rate impact for renewable purchases does not exceed 0.5 ¢/kWh on average; and c. Performing an ongoing evaluation of the Palo Alto Clean Local Energy Accessible Now (CLEAN) program. 3 Proposed Implementation Plan Items for Strategy #3 – Renewable Portfolio Standard (RPS) Estimated Completion 8. Fully integrate the effects on energy efficiency in the long-term electric load forecast. Nov. 2010 9. Evaluate the merits of implementing a feed-in-tariff (FIT) and the potential to meet RPS goals through local renewable resources. Jan. 2011 10. Seek UAC recommendation and Council approval of the policy elements of a FIT to encourage local renewable resource projects. May 2011 11. Continue working with NCPA to identify opportunities, including joint- ownership, for developing qualifying renewable resources. On-going 12. Evaluate the use of renewable energy credits (REC) to meet a portion of the City’s RPS goal and/or greenhouse gas emission reduction goals and monitor the regulations and requirements regarding the use of RECs to meet RPS goals. On-going 13. Evaluate a proposed geothermal project being considered by NCPA, including a pre-pay option and the benefit, costs, and risks of a pre-pay structure. June 2011 14. Conduct a Request for Proposal for eligible renewable resources including RECs and evaluate alternative renewable resource technologies and contracting mechanisms. RFP in June 2011 4. Local Generation – Promote and facilitate the deployment of cost-effective local resources by: a. Using the renewable market price referent (MPR) adjusted for time of day factors and location as the avoided cost when evaluating cost effectiveness of local resources; b. Considering energy delivery cost uncertainty and strategic value options when evaluating opportunities; c. Evaluating a Feed-in-Tariff to promote locally sited renewable resources; d. Evaluating cost-effective energy storage resources; and e. Evaluating the feasibility of developing a 25 to 50 MW generating facility connect to the City’s distribution system. Proposed Implementation Plan Items for Strategy #4 – Local Generation Estimated Completion 15. Provide an update of past local generation feasibility studies and actions to UAC and Council Dec. 2010 16. Assess the potential for and feasibility of small local distributed and non- distributed, renewable and cogeneration projects, including using a FIT to encourage these projects. Jan. 2011 17. Assess the potential, benefits and costs of developing and/or joint ownership of a 25 to 50 MW gas-fired power plant located in or near Palo Alto to meet load, reliability and local capacity needs. Jun. 2011 4 Proposed Implementation Plan Items for Strategy #4 – Local Generation Estimated Completion 18. Evaluate the City’s PLUG-In Program to encourage cogeneration including rules, regulations, and buy back rates and recommend modifications as needed. Dec. 2011 19. Following receiving Council direction from Implementation Plan Initiative #10, develop a FIT proposal including rate, rules, regulations, standard contract form and limits. To be determined 20. Assess the economics and potential of the anaerobic digester as a local generation resource for CPAU Sep. 2011 21. Assess the need for and value of energy storage to support local renewable distributed generation resources. Determine any appropriate energy storage targets to be achieved by December 31, 2016, and December 31, 2021. Report back to the Council regarding what procurement targets, if any, are deemed to be appropriate so that the Council may adopt such procurement targets, if determined to be appropriate, by October 1, 2014. Jun. 2012 5. Climate Protection – Reduce the electric portfolio’s carbon intensity by: a. Supporting the City municipal government’s climate protection goals; b. Promoting the use of technologies (e.g. incentives for cogeneration systems, promotion of EVs, in-home energy displays) and programs that will reduce the community’s carbon footprint at a cost of up to the City’s value of carbon; c. Continuing to offer a renewable resource-based retail rate for all customers who want to voluntarily select an increased content of non-hydro renewable energy; and. d. Evaluating quantitative goals for possible future implementation. Proposed Implementation Plan Items for Strategy #5 – Climate Protection Estimated Completion 22. Promote the City’s Plug-in program to encourage development of cogeneration systems. On-going 23. Analyze electric vehicle (EV) charging patterns and evaluate rates to incent nighttime EV charging. Jun. 2011 24. Meet AB32 mandated annual reporting requirements to California Air Resources Board on annual volumes of electricity purchases by resource. Annually, next in Jun. 2011 25. Track and report annually on 6 major greenhouse gas emissions (CO2, CH4, N2O, SF6, HFCs, PFCs) for all of the City’s municipal operations and calculate electric portfolio’s overall emissions coefficients (lbs of CO2, CH4, and N2O per MWh of purchases). Annually, next in Sep. 2011 26. Evaluate the costs, benefits and impacts of the implementation of an electric portfolio carbon neutral policy and the setting of quantitative goals (e.g. carbon intensity, total GHG emissions). Jan. 2012 5 Proposed Implementation Plan Items for Strategy #5 – Climate Protection Estimated Completion 27. Evaluate PaloAltoGreen program design and recommend modifications, as appropriate, including constructing PaloAltoGreen to assist in meeting Renewable Portfolio Standard goals. Jun. 2012 6. Hydro Resource Management – Actively monitor and manage cost uncertainty related to variations in hydroelectric supply and maximize value of hydro resources by: a. Planning for an average hydro year on a long-term basis; b. Utilizing cost effective hydro resource management products; and c. Implementing opportunities to maximize benefits and reduce costs of the Western Base Resource and Calaveras hydroelectric resources. Proposed Implementation Plan Items for Strategy #6 – Hydro Resource Management Estimated Completion 28. Evaluate potential rate adjustment mechanisms that would adjust electric rates based on hydrologic year type and develop a recommendation for a rate. Apr. 2011 29. Assess the value related to Palo Alto’s participation in the CAISO’s Metered Subsystem Agreement and the use of the Calaveras hydroelectric project for load following. On-going 30. Identify long-term opportunities to maximize the value of the Calaveras hydroelectric project as an energy storage resource. On-going 31. Work with NCPA to seek opportunities to increase the efficiency of the Calaveras hydroelectric project and implement operational value maximizing strategies. On-going 7. Market Price Exposure Management – Actively monitor and manage operational, counterparty and wholesale energy price risk in the short-term (up to three to five years) by: a. Maintaining an adequate pool of creditworthy suppliers; and b. Diversifying supply purchases across commitment date, start date, duration, suppliers and pricing terms in alignment with rate stability objectives and reserve guideline. Proposed Implementation Plan Items for Strategy #7 – Market Price Exposure Management Estimated Completion 32. Evaluate a block purchase of up to 25 MW to meet base load needs for Jan- Mar and Nov-Dec for a term of up to 5 years. Feb. 2011 33. Conduct an RFP for new electric master agreement counterparties. Dec. 2011 34. Explore opportunities with NCPA, other municipal utilities and/or third party suppliers to reduce scheduling and/or operating costs. On-going 35. Continue to implement a 3-year laddering strategy to manage market price uncertainty. On-going 6 8. Transmission and Reliability – Pursue the reliability of supply at fair and reasonable transmission and delivery costs by: a. Actively participating through collaborative efforts with other entities, in local, regional, statewide and federal regulatory and legislative forums; b. Participating in transmission and reliability market design forums to ensure that adopted market designs result in adequate reliability, workably competitive markets and equitable cost allocation; c. Evaluating interconnection options to the City to increase service reliability and lower delivery costs; and d. Exploring transmission opportunities and strategies to meet long-term renewable portfolio objectives beyond 2020. Proposed Implementation Plan Items for Strategy #8 – Transmission and Reliability Estimated Completion 36. Investigate transmission connection voltage upgrade from 115 to 230 kV, and the potential for a transmission reliability connection to west side. On-going 37. Explore transmission opportunities and strategies to meet long-term renewable portfolio objectives beyond 2020. On-going 38. Evaluate joint efforts for power plant ownership opportunities or long-term agreements to meet the City’s Resource Adequacy Program requirements. On-going