HomeMy WebLinkAbout1997-04-07 City Council (18)City of Palo Alto
City’Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:
AGENDA DATE:
SUBJECT:
CITY MANAGER DEPARTMENT: Planning and
Community Environment
April 7, 1997 CMR: 187:97
Budget Ordinance Amendment (BAO) and Fee Schedule
Modification to Process Transfer of Development Rights (TDR)
Applications and Prepare a TDR Brochure
This report forwards to Council a Budget Amendment Ordinance in the amount of $13,000
for contract planningserviees to process Transfer of Development Rights (TDR) applications
for the remainder of the 1996-97 fiscal year and to prepare a brochure explaining theCity’s
TDR program.
RECOMMENDATION
Staff recommends that the Council approve the attached BAO in the amount of $13,000 and
approve the proposed change to the fee schedule.
POLICY IMPLICATIONS
This report implements Council policy direction given to staff at the Council meeting of
November 18, 1996, to establish full cost-recovery fees to be charged to applicants
requesting approval of TDRs. In addition, $3,000 of the requested funds would be used to
develop a brochure explaining the City’s TDR program. "
DISCUSSION
On November 18, 1996, the City Council approved for first reading an ordinance
implementing a revised TDR program and modifying floor area bonus provisions in the
Commercial Downtown (CD) District. The Council also directed staff to return with a
Budget Amendment Ordinance and Fee Schedule establishing full cost-recovery fees for
applicants requesting Architectural Review Board (ARB) approval of projects proposed at
CMR:187:97 ..Page 1 of 3
TDR receiver sites. Staff estimates that $10,000 will be required to process TDR
applications for the remainder of the 1996-97 fiscal year. The estimate is based upon
approximately 90 hours of contract planning assistance to process applications during this
period. The fee for 100 percent cost recovery is shown in Attachment A and was originally
presented in a November 18, 1996 City Manager’s Report (CMR:470:96), Attachment 4.
Staff also requests $3~000for the preparation of a brochure explaining.the City’s TDR
program. The brochure would save time for staff and developers by clearly explaining the
TDR development regulations, application process, time frames and submittal requirements.
Contract staff assistance will be utilized to process the TDR applications and prepare the
brochure.
ALTERNATIVE
¯ An alternative to full cost-recovery fees would be to subsidize the program from the General
Fund and set the fee at less than 1 O0 percent cost recovery.
FISCAL IMPACT
The $10,000 for processing Architectural Review Board (ARB) applications for projects
proposed at TDR receiver sites will be recovered to whatever percentage of cost recovery fee
requirements the Council selects. If the Council reduces the cost recovery percentage, the
costs will only be recovered to the percentage that Council directs and the remainder will be
funded by the General Fund Budget Stabilization Reserves. The $3,000 for preparing a
brochure would be funded from the General Fund. Staff does not recommend that the cost
of preparing the brochure be subject to cost recovery because it would be an informational
document intended to make it easier for developers and the general publicto understand the
TDR process.
ENVIRONMENTAL ASSESSMENT
Hiring of contract planning assistance is not a project under CEQA.
STEPS FOLLOWING APPROVAL
Staff will seek the services of contract planning staff following adoption of the Budget
Amendment Ordinance.
CMR:187:97 Page 2 of 3
ATTACHMENTS
A.Budget Amendment Ordinance
B.Exhibit A: Fee Schedule
C.CMR:470:96, without attachments
PREPARED BY: Nancy Maddox Lytle
DEPARTMENT HEAD REVIEW:
CITY MANAGER APPROVAL:
KENNETH R. SCHREIBER
Director of Planning and
CMR: 187:97 Page 3 of 3
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING THE BUDGET FOR THE FISCAL YEAR 1996-97 TO
PROVIDE AN ADDITIONAL APPROPRIATION FOR COSTS ASSOCIATED
WITH THE REVISED PROCESSING OF TRANSFER OF DEVELOPMENT
RIGHTS (TDR) APPLICATIONS
WHEREAS, pursuant to the provisions of Section 12 of Article
III of the Charter of the City of Palo Alto, the Council on June
24, 1996 did adopt a budget for fiscal year 1995-96; and
WHEREAS, on November 18, 1996, the City Council approved for
first reading an ordinante implementing a revised TDR program; and
WHEREAS, the City Council also directed s£aff to return with
a Budget Amendment Ordinance and fee schedule establishing full cost
~recovery fees for applicants requestingapproval of TDRs; and
WHEREAS, the Planning Department is requesting $13,000 to
revise the TDR program, which consists of $’i0,000 for contract
planning services and $3,000 for the preparation of a brochure to
explain the program; and
WHEREAS~ it is anticipated that the cost of processing TDR
applications will be recovered by fees, with the exception of the
$3,000 for preparing the brochure which is not subject to cost
recovery; and
WHEREAS, City Council authorization is needed to amend the
1996-97 budget and ~the Municipal Fee. Schedule (Exhibit A) as
hereinafter set forth.
NOW, THEREFORE, the Council of the City of Palo Alto does
ORDAIN as follows:
SECTION i. The sum of Thirteen Thousand Dollars ($13,000) is
hereby appropriated to non-salary expenses in theDevelopment Review
Functional’ Area in the Planning and Community Environment
Department.
SECTION
$10,000.
2..Planning Department revenue is increased by
SECTION 3. This transaction will reduce the Budget
Stabilization Reserve from $16,270,196 to $16,267,196.
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. (appropriate new expenditures/CIP’s)
SECTION 5. The Council of the City of Palo Alto hereby finds
that the enactment of this ordinance is not a project under the~
California Environmental Quality Act and, therefore, no
environmental impact assessment is necessary.
SECTION 6. As provided in Section 2.04.350 of the Palo Alto
Municipal Code, this ordinance shall become effective upon adoption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:~
ABSENT:
ATTEST:APPROVED:,
City Clerk Mayor
APPROVED AS TO FORM:
Senior Asst. City Attorney
City Manager
Acting Director of
Administrative Services
Department
Director of Planning
TO:
City Manager’s
City of Palo Alto,
Summary Report
HONORABLE CITY COUNCIL 3
FROM:CITY MANAGER DEPARTMENT: Planning and Community
Environment
¯AGENDA DATE:
SUBJECT:
November 18, 1996 CMR:470:96
TRANSFER OF ~. DEVELOPMENT RIGHTS PROGRAM:
Comprehensive Plan Amendment, Urban Design Element- Program 6a,
and Zoning Ordinance Text Changes amending Section 18.49.060 and
adding Chapter 18.87 to implement a revised Transfer of Development
Rights (TDR) Program and to revise the floor area bonus program in
the Commercial Downtown (CD) District.
This report transmits a Comprehensive Plan Amendment and zoning ordinance text changes that
1) modify and implement a Transfer. of Development Rights (TDR) Program for qualified historic
and seismic qualified sender sites, and 2) revise the floor area bonus program in the CD (Commercial
Downtown) District. The TDR Program and associated floor area bonus ordinance revisions were
prepared in response to City Council direction on ~ber 12, 1994, and May 1, 1995. The revised
programs provide that bonus floor area granted for seismic or historic rehabilitation of buildings in
the Downtown may be transferred to eligible nonhistoric receiver sites in the Downtown.
RECOMMENDATIONS
The Planning Commission, Historic Resources Board (HRB), Architectural Review Board (ARB)
and staff recommend that the City Council:
1.Approve the attached Negative Declaration (Attachment 3);
Adopt the attached resolution (Attachment 1) amending the programs in the Comprehensive
Plan which establish Transfer of Development Rights;
Approve the attached zoning ordinance revisions implementing a revised Transfer of
Development Rights (TDR) Program (Attachment 2) and modifying floor area bonus
provisions in the Commercial Downtown (CD) District; and
ClVlR:470:96 Page 1 of 27 ..
Direct staff to return with a Budget Amendment Ordinance fee schedule amendment
(Attachment 4) establishing cost-recovery fees to be charged to applicants requesting
approval of TDP, s.
The Comprehensive Plan Amendment (Attachment 1) and ordinance (Attachment 2) contain all of
the recommendations of the Planning Commission, with one exception. At the May 1, 1995
meeting, the City Council directed staff to develop a TDR ordinance that did not bestow rights
retroactively. However, based upon testimony at the recent hearings, the ARB and Planning
Commission recommended that the program be revised to retroactively apply TDRs. The proposed
ordinance does not contain provisions to apply the program retroactively, reflecting Council’s
May 1, 1995 action.
POLICY IMPLICATIONS
Existing Policy Framework
The project before the Council is revisions to the TDR Program and the existing bonus floor area
provisions of the CD District regulations. ~
The existing TDR Program is contained in the Urban Design Element of the Comprehensive Plan.
It provides that bonus floor area granted for rehabilitation of historic buildings in the Downtown may
be transferred to eligible nonhistoric receiver sites in the Downtown. The Comprehensive Plan
program includes three general provisions: 1) the approval process for transferring floor area is the
Planned Community zone process; 2) a size limit of 0.5 to 1.0 of additional floor area above what
is otherwise permitted is established on projects that are receivers of transferred floor area; and
3) receiver sites must be at least 150 feet from residentially zoned property.
The existing Floor Area Bonus provisions are contained in the Zoning Ordinance. The CD District
regulations currently provide for floor area bonuses (2,500 square feet, or 25 percent of the existing
building, whichever is greatei’) to be granted for historic preservation of historic Category 1 and 2
buildings and for a qualified seismic rehabilitation of seismic Category I, II or III buildings. Double
-bonuses (5,000 square feet, or 50 percent of the existing.building, whichever is greater) can be
granted for buildings which undergo both historic and seismic rehabilitation, pursuant to Ordinance
4261 adopted by the City Council on December 12,. 1994~
Ci_ty Council Direction
on December 12, 1994, the City Council directed staffto develop a more streamlined TDR Program
to make it more useable, while keeping the existing program’s project size limits and required
distance of 150 feet from residentially-zoned property. On May 1, 1995, the City Council reviewed
a revised TDR Program, which was prepared by staff in response to the City Council direction on
December 12, 1994. Staff prepared the Draft TDR Program Ordinance for Council consideration
on May 1, 1995 to address only historic Category 1 and 2 properties as qualified sender sites. This
draft was consistent with the current TDR program inthe Comprehensive Plan, Urban Design
Element, Program 6A, but modified the program as described in the Comprehensive Plan to allow
transfers in the CD District without need for PC rezoning. The City Council continued the TDR
Program on May 1, 1995, primarily, to have it expanded to include allowing transfers of floor area
from seismic upgrade projects on qualified non-historic sender sites as well.
CMR:470:96 Page2 of 27
Proposed Revisions to the Densi _ty Bonus Program and the TDR Pro rg.r_~.
In general, the proposed project is consistent with, and provides further, support and incentives for,
existing City policies to encourage historic preservation and seismic safety as addressed in the
Comprehensive Plan Urban Design Element and Environmental Resources Element (i.e, Urban
Design Element, Policy 2, Programs 6a, 8, 10b, 10c and 11, and Environmental Resources Element,
Policy 14, Program 45). The following proposed revisions contained in the attached ordinance and
resolution represent changes to existing City policies.
Incentives through Streamlined Process_- Under the proposed TDR program ordinance, the decision-
making body for CD District development projects in which TDRs are granted and/or used in the
CD District would be the ARB/Planning Director rather than the City Council. As a streamlining
measure, the Plarming Commission and City Council would no longer be part of the review process,
as they now are in the Planned Community zone process. The Council would hear applications only
if the ARB/Planning Director decision were appealed. Therefore, the normal process will be
shortened. An exception to this overall statement is that Council would continue to have review
authority for the use of a double bonus on a qualified historic sender site which is also .transferring
a portion of the bonus off-site.
Allow Nonhistodc Seismic I. II or III Buildings to Transfer Development Right~, The City
Council’s direction on May 1, 1995 was to expand the current TDR program in the Comprehensive
Plan to include n0nhistoric, qualified seismic buildings as sender sites. The attached resolution and
ordinance have been amended to include qualified seismic buildings to participate in the TDR
program. The purpose in allowing buildings that are in need of seismic repair to participate in the
program is twofold. One is to provide incentives to property owners to reduce the threat to
life/safety which is presented by the seismic instability of these buildings. Many of these buildings
are constructed of unreinforced masonry and/or were constructed prior to 1935. Often, when
buildings are upgraded or refurbished to .improve.their marketability, some seismic sl~engthening
is completed, but for cost reasons the upgrade stops short of meeting the requirements of the City’s
seismi~ program. Allowing buildings in need of seismic upgrading to sell development fights
provides an incentive for building owners who would not otherwise be able to seismically
rehabilitate their buildings. The second reason for including seismic buildings is to encourage long-
term retention of older buildings that contribute to the character and quality of Downtown but are
not historic Category l’or 2.
Both Seismic and Historic Rehabilitation Reo_uira~[- In the existing CD District bonus regulations,
the owner of a building designated both seismic Category I, II or III and historic Category 1 or 2 can
elect to do either of these rehabilitations and receive the bonus without doing the other rehabilitation.
The proposed CD bonus ordinance, language has’been amended to require that both upgrades are
accomplished in all instances where either is desired. It is important to require both rehabilitations,
primarily because ’an historic building which has been rehabilitated could .be lost ~a major
earthquake if the structure were not seismically upgraded. Conversely, a seismic upgrade project
could adversely impact character of an historic building if the work did not include historic
restoration.
CMR:470:96 Page 3 of 27
Establish Maximum FARs at Receiver Sites - The proposed TDR ordinance establishes maximum
FARs at the.receiver sites which are different from the limitations in the current Comprehensive Plan
TDR Program (see Section 18~87.050(a-d) in Attachment 2). Under the current Comprehensive Plan
program, TDR may not exceed 0.5 to 1.0 above what would otherwise be permitted. Under the
proposed ordinance, for receiver properties within the downtown parking assessment district, the
maximum FAR would be increased to 1.0 to 1.0 above what exists or would otherwise be permitted
for the site, whichever is greater, provided that the total additional floor area does not exceed 10,000
square feet. For receiver properties located outside of the parking assessment district, the maximum
FAR would be 0.5 to 1.0 above what exists or would otherwise be permitted for the site, whichever
is greater, provided that the total additional floor area does not exceed 5,000 square feet. The higher
project size limit was recommended by the Planning Commission to provide additional incentives
to persuade applicants to commit to seismic upgrades. The proposed TDR ordinance also includes
overall FAR limits of 3.0 to 1.0 in the CD-C subdistrict and 2.0 to 1.0 in the CD-S and CD-N
subdistricts, identical to the existing FAR limits in the current floor area bonus program (Section
18.49.060(b)(2)).
Modify the 150-foot Residential Buffer - At the May 1, 1995 meeting, the City Council decided to
retain the 150-foot buffer between residentially zoned properties and receiver sites. Based on
testimony at the recent hearings, the Planning Commission and staff recommend that the 150-foot
residential buffer be revised to include a modification which complies with the intent of the 150-foot
buffer, while not meeting the precise distance requirement. Under the proposed TDR program, a
provision has ~been added which allows a property located both across the street and one parcel
away from a residential district to qualify as a receiver site.
Certification and Transfer of Develor~ment Bonuses - Instead of the development bonuses for
historic and seismic rehabilitation being granted and used only through the approval and construction
of a development project (i.e., under existing CD District regulations), the proposed TDR ordinance
will allow the City to certify that certain development rights have been granted based on the approval
of a qualified building rehabilitation. In cases where all of the development rights have not been
used on the site, those unused rights may be sold or otherwise transferred for use on an eligible site.
Bestow Transfer Rights Retroactively - At the May 1, 1995 meeting, the City Council directed staff
to develop an ordinance that did not bestow fights retroactively. Based upon testimony at the recent
hearings, the Planning Commission recommended that the TDR Program be revised to allow seismic
and historic projects, that were going through the building permit process or had an open building
permit prior to final inspection after May 1, 1995, to be eligible as TDR sender sites. Since the
Council action on May 1, 1995 was not to apply the TDR Program retroactively, the attached draft
ordinance does not contain any revisions to apply the program retroactively.
~MMARY’
P_r_o_p~_ ed Revisions to the ExigilagComprehensive Plan TDR Program
The attached resolution contains the following revisions to the Comprehensive Plan, Urban Design
Element, Program 6:
CMR:470:96 Page 4 of 27 .
Approval Process. Eliminates reference to the Planned Community Zone process as the
only implementation process for the TDR program.
Modification of 150-Foot Bufferl The current Comprehensive Plan 150-foot residential
buffer is modified. The purposeof the modification is to allow, properties which achieve the
"residential buffer" intent, through a separation by street and another commercially zoned
property, although they do not meet the exact distance parameter to be eligible for TDR.
¸3. "Project Size Limits. Under the cun’ent Comprehensive Plan program, TDR may not exceed
0.5 to 1:0 above what would otherwise be permitted. Under the proposed TDR Program
Comprehensive Plan amendment, receiver properties within the downtown parking
assessment district would have a higher project size limit. The maximum FAR would be
increased to 1.0 to 1.0 above what exists or would otherwise be permitted for the site,
whichever is greater, provided that the total additional floor area does not exceed 10,000
square feet. For receiver properties located outside of the parking assessment district, the
project size limit.is further constrained. The maximum FAR would remain at 0.5 to 1.0
above what exists or would .otherwise ~be permitted for the site, whichever is greater,
provided that the total additional floor area does not exceed 5,000 square feet.
Proposed TDR Ordinance.
The attached TDR ordinance establishes a TDR program with the following provisions:
Implements Comprehensive Plan Programs for Historic Preservation and Seismic
Safety. The draft TDR ordinance implements the above provisions of the TDR resolution
and extends the TDR program to qualified seismic properties.
Terms Defmed. The following terms are def’med: "Certification", Receiver Site", "Sender
Site", and Transferable Development Right" (see Section 18.87010 in the attached draft
ordinance).
Transfer Procedure. Under the draft TDR ordinance, procedures are.established for
transferring and purchasing development rights.
Transfers to Sites within Planned Community (PC) Zones. The draft TDR ordinance
allows a PC zoned property to be a receiver site if the site was formerly located in the CD
District, and the ordinance rezoning the property to PC approves the use of TDR.
The attached ordinance contains the following revisions to the existing floor area bonus program:
Historic Rehabilitation Defined. The ~ "historic rehabilitation" is defined as "returning
a property to a state of utility, through repair or alteration which makes possible an efficient
contemporary use while preserving those portions and features of the property which are
significant to its historic, architectural and cultural values" (see Section 1 g.49.060(a)(1) of
CMR:470:96 Page 5 of 27
the attached draft ordinance). This definition is consistent with Council action in adopting
the Double Bonus Ordinance 4261 on December 12, 1994.
Both Rehabilitations Required. Currently, the owner of a building designated both seismic
Category I, II or III and historic Category 1 or 2 can elect to do either of these rehabilitations
and take the bonus without doing the other rehabilitation. This would no longer be permitted
under the revised floor area bonus program (see Section 18.49.060(b)(2) and (3)(A)).
o Rehabilitation Work Must Be Included in Project. The attached ordinance clarifies what
is self-evident, but was not stated: that an expansion of a historic building would not qualify
for a floorarea bonus unless any needed historic and seismic rehabilitation is included in the
project (see Sections 18.49.060(b)(3) and 18.49.060(b)(3)(A) in the attached draft
ordinance).. This is a "technical clean’up" amendment.
Record Keeping Process. A process is established for the City to certify that certain
standards have been met and that development bonuses have been granted, used and/or
available. These administrative requirements are consistent with Council’s actions in
adopting the Double Bonus Ordinance on December 12, 1994. They are needed in order to
allow sale of a right to a third party.
FISCAL IIVIPACT
While the precise fiscal impacts to the City cannot be determined, it seems likely that they would
not be significant. Additional costs would be incurred by formalizing the process of City
eertifi~tion that development bonuses have been granted and/or transferred, since this would require
minor modifications to application forms and additional record keeping. It is recommended that
cost-recovery fees for the cost ofproeessingspeeific applications can be charged to applicants and
that a municipal fee schedule amendment return to Council.
ENVIRONMENTAL ASS~SSMEJNT
An Environmental Impact Assessment and a Negative Declaration have been prepared for the TDR
Program and the revised bonus floor area provisions, and is attached (see Attachment 3).
PREPARED BY: Robert Schubert, Contract Project Planner
KENNETH R. SCHREIBER
Director of Planning and ’
Community Environment
CMR:470:96 Page 6 of 27
CITY MANAGER APPROVAL:
CMR:470:96 Page 7 of 27
.I
CMR:470:96 Page 8 of 27
.
\
City of Palo Alto
Manager’s Report
SUBJECT:TRANSFER OF DEVELOPMENT RIGHTS PROGRAM:
Comprehensive Plan Amendment, Urban Design Element - Program 6a,
and Zoning Ordinance Text Changes amending Section 18.49.060 and
adding Chapter 18.87 to implement a revised Transfer of Development
Rights (TDR) Program and to revise the floor~ area bonus program in
the Commercial Downtown (CD) District.
REouEST
This report transmits a Comprehensive Plan Amendment and zoning ordinance text changes that
1) modify and implement a Transfer of Development Rights (TDR) Program for qualified historic
and seismic sender sites, and 2) revise the floor area bonus program in the CD (Commercial
Downtown) District Th~ TDR Program and associated floor area bonus ordinance revisions were
prepared in response to City Council direction on December 12, 1994, and May 1, 1995. The revised
programs provide that bonus floor area granted for seismic or historic rehabilitation of buildings in
the Downtown maY be transferred to eligible nonhistodc receiver sites in the Downtown.
RECOMMENDATIONS.
The Planning Commission, Historic Resources Board (HRB), Architectural Review Board (ARB)
and staff recommend that the City Council:
Approve the attached Negative Declaration (Attachment 3);
Adopt the attached re~olution (Attachment 1) amending the programs in the Comprehensive
Plan which establish Transfer of Development Rights;
Apprdve the attached zoning ordinance revisions implementing a revised Transfer of
Development Rights (TDR) Program (Attachment 2) and modifying floor area bonus
provisions in the Commercial Downtown (CD) District; and
Direct staff to .return with a Budget Amendment Ordinance fee schedule amendment
(Attachment 4) establishing cost-recovery fees to be charged to applicants requesting.
approval of TDRs.
The Comprehensive Plan Amendment (Attachment 1) and ordinance (Attachment 2) contain all of
the recommendations of the Planning Commission with one exception. At the May 1, 1995 meeting,
the City Council directed staffto develop a TDR ordinance that did not bestow rights retroactively.
However, based upon testimony at the recent hearings, the ARB and Planning Commission
recommended that the program be revised to retroactively apply TDRs. The proposed ordinance
CMR:470:96 Page 9 of 27
does not contain provisions to apply the program retroactively, reflecting Council’s May 1, 1995
action.
BACKGROUND
On February 21, 1995, the City Council approved an ordinance allowing seismic and historic
bonuses to be cumulative. The Double Bonus Ordinance also provides that a cumulative bonus
cannot be used on the historic site unless the City Council approves the project and makes certain
fmdings that the historic preservation of the building is not compromised.
As a related matter, atthe December 12, 1994 meeting, the City Council directed staffto develop
a more streamlined TDR Program, while keeping the existing program’s project size limits and
required distance of 150 feet from residentially-zoned property. On May 1, 1995, the City Council
reviewed a revised TDR Program which was prepared by staff in response to the City Council
direction on December 12, 1994. The Council continued the TDR Program in order to expand it to
include TDR for seismic upgrades and requested staff to recommend any modifications necessary
to address 11 questions.
Historic Resource Board (I-IRB) Recommendation
The HRB reviewed the revised TDR Program on June 19, 1996 (see attached HRB minutes). ~One
member of the public spoke. Chris Dressel representing the President Apartments, 480 University
Avenue, requested that the TDR Program be revised to allow the property to participate in the TDR
Program as a sender site. The site.is currently an ineligible receiver site because the existing floor
area exceeds the maximum 3.0 to 1.0 floor area ratio (FAR). The HRB, on a unanimous (5-0-2-0) .
vote, with Carol Murden and Roger Kohler absent, recommended approval of the proposed TDR
Program. The HRB also recommended that the program be revised to allow sites with buildings that
are Historic Category 1 or 2 and that currently exceed the maximum permitted FAR to obtain floor
area bonuses and transfer the floor area. The HRB’s specific reeornmendations are summarized
below under the Discussion section of this report.
Architectural Review Board (ARB) Recommendation
During the public hearing on June 20, 1996, Chris Dressel spoke on behalf of the President
Apartments, requesting that the property be allowed to participate in the TDR Program as a sender
site (see attached AR.B minutes). The ARB, on a unanimous (4-0-1-0) voW, with Juiie Maser absent,
recommended approval of the revised TDR Program. The ARB’s specific recommendations are
summarized below under the Discussion section of this report. ..
~ Commission Recommendation
During the public hearing on June 26, 1996, testimony was received from four members of the
public (see the testimony by Jim Baer, John Northway, Robert Konevieh and John Hanna in the
attached minutes from the June 26, 1996 Planning Commission). The Planning Commission
continued the item, and referred three questions (Questions 6, 9 and 10) to a TDR Committee,
consisting of Commissioners Cassel, Sehmidt and Sehink, for further review. On August 6, 1996,
the TDR Committee met to discuss the questions which were referred from the Planning
Commission, One member of the public, Jim Baer, attended the meeting. On September 11, 1996,
the Planning Commission recommended approval of the. negative declaration and the revised TDR
CMR:470:96 Page 10 of 27
program, including changes recommended by the Committee (see attached minutes from the
September 1 I, 1996 Planning Commission meeting). Public testimony was provided by Jim Baer
and Tricia Watd-Dolkas. The Planning Commission’s specific recommendations are summarized
below under the Discussion section of this report.
Project Description
The project before the Council is revisions to the TDR Program and the existing bonus floor area
provisions of the CD District regulations.
Proposed Revisions to the Existing Comprehensive Plan TDR Program
The attached resolution contains the following revisions to the Comprehensive Plan, Urban Design
Element, Program 6:
Approval Process. Eliminates reference to the Planned Community Zone process as the
only implementation process for the TDR program.
Modification of 150-Foot Buffer. The current Comprehensive Plan 150-foot residential
buffer is modified. The purpose of the modification is to allow properties which achieve the
"residential buffer" intent, through a separation by street and another commercially zoned
property, although they do not meet the exact distance parameter, to be eligible for TDR.
Project Size Limits. Under the current Comprehensive Plan program, TDR may not exceed
0.5 to 1.0 above what would.otherwise be permitted. Under the proposed TDR Program
Comprehensive Plan amendment, receiver properties within the downtown parking
assessment district would have a higher project size limit. The maximum FAR would be
increased to 1.0 to 1.0 above what exists or would .otherwise be permitted for the site,
whichever is greater, provided that the total .additional floor area does not exceed 10,000
¯ square, feet. For. receiver pr0pem’es located outside of the parking assessment district, the
project size limit’is further constrained. The maximum FAR would remain at 0.5 to 1.0
above what exists or would otherwise be pemfitted for the site, whichever is greater,
provided that the total additional floor area does not exceed 5,000 square.feet.
Proposed TDR Ordinance
The attached TDR ordinance establishes a TDR program with the following provisions:
Implements Comprehensive Plan Program for Historic Preservation and Seismic
Safety. The draft TDR ordinance implements the above provisions of the TDR resolution
and extends the TDR program to qualifed seismic properties.
Terms Defined. The following terms are def’med: "Certification", Receiver Site", "Sender
Site"~ and Transferable Development Right" (see Section 18.87010 in the attached draft
ordinance).
.3.Transfer Procedure. Under the draft TDR ordinance, procedures are established for
transferring and purchasing development rights.
CMR:470:96 Page 11 of 27
.4.Transfers to Sites within Planned Community (PC) Zones, The draft TDR ordinance
allows a PC zoned property to be a receiver site if the site was formerly located in the CD
District, and the ordinance rezoning the property to PC approves the useof TDR.
Proposed Revisions to the Existing Floor Area Bonus Pro_re’am
The attached ordinance contains the following revisions to the existing floor area bonus program:
Historic Rehabilitation Defmed. The term "historic rehabilitation" is defined as "returning
a property to a state of utility, through repair or alteration which makes possible an efficient
contemporary use while ’preserving those portions and features of the property which are
significant to its historic, architectural and cultural values" (see Section 18.49.060(a)(1 ) of
the attached draft ordinance). This definition is consistent with Council action in adopting
the Double Bonus Ordinance 4261 on December 12, 1994.
Both Rehabilitations Required.~ Currently, the owner of a building designated both seismic
Category I, II or III and historic Category 1 or 2 can elect to do either of these rehabilitations
and take the bonus without doing the other rehabilitation, This would no longer be permitted
under the revised floor area bonus program (see Section 18.49.060(b)(2) and (3)(A)).
Rehabilitation Work Must Be Included in Project. The attached ordinance clarifies what
is self-evident, but was not stated: that an expansion of a historic building would not qualify
for a floor area bonus unless any needed historic and seismic rehabilitation is included in the
project (see Sections 18.49.060(b)(3) and 18.49.060(b)(3)(A) in the attached draft
ordinance). This is a "technical clean-up" amendment.
o Record Keeping ProcesS. A process is established for the City to certify that certain
standards have been met and that development bonuses have been granted, used and/or
available. These administrative requirements are consistent with Council’s actions in
adopting the Double Bonus Ordinance on December 12, 1994. They are needed in order to
allow sale of a fight to a third party.
OLI P
Existing Polity_ Framework
The project before the Council includes revisions to the TDR Pm~ and to the existing bonus
floor area provisions of the CD District regulations.
The existing TDR Program is contained in the Urban Design Element of the Comprehensive Plan.
It provides that bonus floor area granted for rehabilitation of historic buildings in the Downtown may
be transferred to eligible nonhistofic receiver sites in the Downtown. The Comprehensive Plan
program includes three general provisions: 1) the approval process for ~ferring floor area is the
Planned Community zone process; 2) asize limit of 0.5 to 1.0 of additional floor area above what
is otherwise permitted is established on projects that are receivers of transferred floor area; and
3) receiver sites must be at least 150 feet from residentially zoned property.
CMR:470:96 Page 12 of 27
The existing Floor Area Bonus provisions are contained in the Zoning Ordinance. The CD District
regulations currently provide for floor area bonuses (2,500 square feet, or 25 percent of the existing
building, whichever is greater) to be granted for historic preservation of historic Category l and 2
buildings and for a qualified seismic rehabilitation of seismic Category I, II or Ill buildings. Double
bonuses (5,000 square feet, or 50 percent of the existing building, whichever is greater) can be
granted for buildings which undergo both historic and seismic rehabilitation, pursuant to Ordinance
4261 adopted by the City Council on December 12, 1994.
City Council Direction
On December 12, 1994, the City Council directed staff to develop a more streamlined TDR Program
to make it more useable, while keeping the existing program’s project size limits and required
distance of 150 feet from residentially-zoned property. On May 1, 1995, the City Council reviewed
a revised TDR Program which was prepared by staff in response to the City Council direction on
Decembei" 12, 1994. Staff prepared the Draft TDR Program Ordinance for Council consideration
on May 1, 1995 to address only historic Category 1 and 2 properties as qualified sender sites. This
draft was consistent with the current TDR program in the Comprehensive Plan, Urban Design
Element, Program 6A, but modified the program as described in the Comprehensive Plan to allow
transfers in the CD District without need for PC rezoning. The City Council continued the TDR
Program on May 1, 1995, primarily tohave it expanded to include allowing transfers of floor area
from seismic upgrade projects on qualified non-historic sender sites as well.
Proposed Revisions to the Density Bonus Pro_~,ram and the TDR Program
In general, the proposed project is consistent with, and provides further support and incentives for,
existing City policies to encourage historic preservation and seismic safety as addressed in the
Comprehensive Plan Urban Design Element and Environmental Resources Element (i.e., Urban
Design Element, Policy 2, Programs 6a, 8, 10b, 10c and 11, and Environmental Resources Element,
Policy t4, Program 45). The following proposed revisions contained in the attached ordinance and
resolution represent changes to existing City policies.
Incentives through Streamlined Process - Under the proposed TDR program ordinance, the decision-
making body for CD District development.projects in which TDRs are granted and/or used in the
CD District would be the ARB/Planuing Director rather than the City Council. As a streamlining
measure, the Planning Commission and City Council would no longer be part of the review process,
as they now are in the Planned Community zone process. The Council would hear applications only
if the ARB/Planning Director decision were appealed. Therefore, the normal process will be
shortened. An exception to this overall statement is that Council would continue to have review
authority for the. use of a double bonus on a qualified historic sender site which is also transferring
a portion of the bonus off-site.
-- l-:w ---- ,-:_ _" /-=" __ - - -: "uildin-_--_ --.--- : :- -el~:lL]~,h~ - The City
Council’s direction on May I, 1995 was to expand the current TDR program in the Comprehensive
Plan to include nonhistoric, qualified seismic buildings as sender sites. The attached resolution and
ordinance have been amended to include qualified seismic buildings to participate in the TDR
program. The purpose in allowing buildings that are in need of seismic repair to participate in the
program is twofold. One is to provide incentives to property owners to reduce the threat to
CMR:470:96 Page 13 of 27
life/safety which is presented by the seismic instability of these buildings. Many of these buildings
are constructed of unreinforced masonry and/or were constructed prior to 1935. Often, when
buildings are upgraded or refurbished to improve their marketability, some seismic strengthening
is completed, but for cost.reasons the upgrade stops short of meeting the requirements of the City’s
seismic program. Allowing buildings in need of seismic upgrading to sell development fights
provides an incentive for building owners who would not otherwise be able to seismically
rehabilitate their buildings. The second reason for including seismic buildings is to encourage long-
term retention of older buildings that contribute to the character and quality of.Downtown but are
not historic. Category 1 or 2.
Both Seismic and Historic Rehabilitation Required - In the existing CD District bonus regulations,
the owner of a building designated both seismic Category I, II or III and historic Category 1 or 2 can
elect to do either of these rehabilitations and receive the bonus without doing the other rehabilitation.
The proposed CD. bonus ordinance language has been amended to require that both upgrades are
accomplished in all instances where either is desired. It is important to require both rehabilitations
primarily because an historic building which has been rehabilitated could be lost in a major
earthquake, if the structure were not seismically upgraded. Conversely, a seismic upgrade project
could adversely impact character of an historic building if the work did not include historic
restoration.
Establish Maximum FARs at Receiver Sites - The proposed TDR ordinance establishes maximum
FARs at the receiver sites which are different from the limitations in the current Comprehensive Plan
TDR Program (see Section 18.87.050(a-d) in Attachment 2). Under the current Comprehensive Plan
program, TDR may not exceed 0.5 to 1.0 above what would otherwise be permitted. Under the
proposed ordinance, for receiver properties within the downtown parking assessment district, the
maximum FAR would be increased to 1.0 to 1.0 above what exists or would otherwise be permitted
for the site, whieheveris greater, provided that the total additional floor area does not exceed 10,000
square feet. For receiver properties located outside of the parking assessment district, the maximum
FAR would be 0.5 to 1.0 above what exists or would otherwise be permitted for the site, whichever
is greater, provided that the total additional floor area does not exceed 5,000 square feet. The higher
project size limit was recommended by the Planning Commission to provide additional incentives
to persuade applicants to commit to seismic upgrades. The proposed TDR ordinance also includes
overall FAR limits of 3.0 to 1.0 in theCD-C subdistriet and 2.0 to 1.0 in the CD-S and CD-N
subdistriets, identical to the existing FAR limits in the current floor area bonus program (Section
18.49.060(b)(2)).
Modify_ the 150-foot ~ - At the May 1, 1995 meeting, the City Council decided to
retain the 150-foot buffer between residentially zoned properties and receiver sites. Based on
testimony at the recent hearings, the Planning Commission and staffreeommend that the 150-foot
residential buffer be revised to include a modification which complies, with the intent of the 150-foot
buffer, while not meeting the precise distance requirement. Under the proposed TDR program, a
provision has been added which allows a property located both across the street and one pared away
from a residential district to qualify as a receiver site.
CMR:470:96 Page 14 of 27
Certification and Transfer of Develot~ment Bonuses - Instead of the. development bonuses for
historic and seismic rehabilitation being granted and used only through the approval and construction
of a development project (i.e., under existing CD District regulations), the proposed TDR ordinance
will allow the City to certify that certain development fights have been granted based on the approval
of a qualified building rehabilitation. In cases where all of the development fights have not been
used on the site, those unused rights may be sold or otherwise transferred for use on an eligible site.
Bestow Transfer Rights Retroaetive~ - At the May 1, 1995 meeting, the City Council directed staff
to develop an ordinance that did not bestow fights retroactively. Based upon testimony at the recent
hearings, the Planning Commission recommended that the TDR Program be revised to allow
seismic and historic projects, that were going through the building permit process or had an open
building permit prior to final inspection after May 1, 1995, to be eligible as TDR sender sites. Since
the Council action on Mayl, 1995 was not to apply the TDR Program retroactively, the attached
draft ordinance does not contain any revisions to apply the program retroactively.
DISCUSSION
On May 1, 1995, the City Council continued the TDR program and requested staffto recommend
any modifications necessary to address the questions listed below. Each question is followed by a
summary of the discussion and recommendations from the HRB, ARB, Planning Commission and
staff.
1..Should the 15,000- or 25,000-square-foot project size limits in the CD District be
included in the TDR ordinance?
Section 18.49.040(a) of the Zoning Ordinance limits nonresidential projects in the CD District to
25,000 square feet total or 15,000 square feet above the existing building square footage, whichever
is greater. Comments by Chop Keenan at the hearings last year suggested that the TDR ordinance
should be more general in reference to the 15,000 and 25,000 square foot maximum downtown
project size limits (see page 75-453 in the attached minutes from the May-l, 1995 City Council
meeting, Attachment 6). The concern was that if the project size limits were revised in the future,
the TDR ordinance would need to be amended accordingly. However, Section 18.87.050(b) of the
draft ordinance presented at the previous meetings already contained a cross-reference to the project
size limits as provided in the CD District regulations (i.e., it refers to "development limitations set
forth in Sections 18.49.030 and 18.49.040(a) of this Title").
~: The HRB, ARB, Planning Colm’aission and staff recommend that the 15,000-
and 25,000-square-foot project size limits, currently contained in the CD District regulations, be
retained but by cross-reference rather than specific reference in the TDR ordinance. These size
limits have been effective in assuring that the pedestrian scale of Downtown Palo Alto is retained.
Without them, parcels could be consolidated and large scale projects could be constructed,
potentially damaging the qualities which make downtown a traditional pedestrian-oriented "Main
Street".
CMR:470:96 Page 15 of 27 .:
2.Should the 150-foot residential buffer apply to the TDR Program?
At the May 1, 1995 meeting, the City Council decided to retain the 150-foot, buffer between
residentially zoned properties and receiver sites. The purpose of this buffer is to provide a transition
to residentially-zoned property from commercial development, as potentially massive as 3.0 to 1.0
FAR. Projects of this intensity are difficult to make compatible with Palo Alto’s residential
neighborhoods unless they are separated by a sufficient distance.
However, it is unclear in the existing TDR Program whether the 150-foot residential buffer applies
to PC and commercial zones where residential uses are allowed. In addition, at the Planning
Commission meeting on June 26, 1996, public testimony supported a recommendation that the TDR
Program be revised to provide a modification to the 150-foot buffer for any property located both
across the street and one parcel away from a residential district.
Recommendations: The Planning Commission and staff recommend that the ordinance include the
following language (see Section 18.87.040(c) in the ordinance, Attachment 2):
"The receiver sites shall be (i) at least 150 feet from residentially-zoned properties (not
including residential property in Planned Community zones or in Cornmereial Zones within
.the Downtown boundaries where mixed-use projects are permitted); or (ii)separated-from
residentially-zoned property by a city ~street with a~width of at least 50 feet;and,separated
from residentially-zoned property by an intervening property~zoned. CD~-C, CD~S orCD-.N,
which intervening property has a width of not less than~fifiy ~50 feet."
The HRB, ARB, Planning Commission and staff recommend language in the draft ordinance
providing that the term "residentially-zoned properties" does not include residential PC and mixed-
use projects within the downtown boundaries. Since downtown residential projects with PC or CD
zoning are already adjacent.to existing commercial development, they would not benefit from the
150-foot buffer: In addition, due to the number and distribution of residential PC and mixed use
projects downtown, a significant number of potential receiver sites would be eliminated ffthe buffer
were applied, to those properties.
Can/should previously completed projects be able to receive the bonus square footage
retroactively?
During the hearings in 1995 on the revised TDR Program, Phyllis Muusey requested that the
program be applied retroactively to the seismic and historic upgrade project at 520 Ramona Street,
which occurred prior to May 1, 1995. However, at the May 1, 1995 meeting, the City Cotmeil
decided not to retroactively apply the revised TDR program (see attached City Council Minutes).
At the recent Planning Commission meetings, Jim Baer requested that the Ordinance be revised to
allow 340 University Avenue (Z Gallerie) and 401 University Avenue (Taxi’s) to receive the bonus
square footage retroactively for the recent seismic upgrade projects. Robert Konevieh also requested
that the program be applied retroactively to 401 University Avenue.
CMRi470:96 Page 16 of 27
Recommendations: The Council action on May 1, 1995 was not to apply the TDR Program
retroactively. Therefore, the attached draft ordinance does not contain provisions to apply the
program retroactively. However, the Planning Commission and the ARB recommend that the
ordinance be revised to apply the program retroactively. The Planning Commission recommended
that the TDR Program be revised to allow seismic and historic projects that were going through the
building permit process after May 1, 1995 to be eligible TDR sender sites. The Commission
suggested that seismic upgrades are in the public interest and the City should do what itcan to
reward the property owners who have been responsible and invested in seismic upgrades, even as
an example to others.
The Commission provided the rationale that any developer or investor who had relied on a City
commitment for a speedy legislative response should not be penalized for moving forward with
projects in advance of the ordinance adoption. Staffwould caution against the use of this rationale.
In reviewing the minutes from the May 1, 1995 City Council meeting, staff finds that Council
directed staff to return with a TDR ordinance to include seismic bonus incentives, but not a
retroactive rights provision (see the attached May 1, 1995 City Council minutes, pages 75-460, 5-1
vote against including retroactive rights, withAndersen against and Fazzino and Kniss absent). Staff
stated that they would "try to return before Council’s vacation in August 1995" with an ordinance
that would follow Council direction. Both applications for seismic upgrades at 340 University and
401 University were in process prior to the target date that staff tmsuceessfully attempted to meet,
and prior to the May 1, 1995 Council action to include seismic bonuses in the TDR Program.
The ARB recommended that, dueto the length of time which has transpired since the City Council
originally directed staff to revise the TDR Program for historic upgrades, the Council should
consider allowing previously approved projects to transfer any unused bonus square footage
retroactively. The ARB suggested that if projects are allowed to transfer development fights
retroactively, a specific retroactive date should be established. One ARB member expressed concern
regarding applying the program retroactively, noting that such applicants made decisions to proceed
knowing that the revised TDR Program was not in place, and the outcome of the ordinance was yet
to be determined.
In the opinion of staff, a reasonable ease call bemade that retroactivity for historicprojeets back to
December 12, 1994, the effective date of the prior double bonus ordinance, is possible, based upon
ordinance language allowing transferability of bonuses for historic preservation. However, no such
language exists for seismic bonuses. Applying the TDR Program to historic buildings retroactively
accomplishes a public purpose by preventing future additions to the buildings. If rights are to be
bestowed retroactively, a rationale should be provided for the public purpose which would be served
by granting retroactive rights to properties that. have previously been seismiely upgraded. This
rationale would be needed because zoning ordinances are not intended as tools for rewarding past
accomplishments, but can be used to provide incentives for meeting public objectives. Should the
City Council decide to approve transferrable bonuses for previous seismic upgrades through zoning
ordinance mechanisms, staff recommends that it would be preferable to.do so through a specific PC
zone versus a general zone district in order to limit the applicability of this unusual use of zoning.
CMR:470:96 Page 17 of 27
Should the right to transfer development rights "vest" upon completion of the project
or upon receipt of the building permit?
The floor area bonus program was revised to discourage a TDR from being s01d and then the sender
site’s seismic repair and/or historic upgrade project not being carried out. For a property owner
transferring floor area, a written certification of bonus floor area entitlement would be issued by the
City when the sender site project is completed. The basic steps in the review process for floor area
bonuses are as follows:
An owner of a potential sender site would file an application requesting a bonus. The
application would indicate the extent to which the bonus would be used on-site and/or
transferred to a receiver site.
Upon review of the application, the City would issue a written determination of the eligibility
for the bonus, based on the following:
Seismic rehabilitation bonus - the Chief Building Official would determine whether
the City’s seismic standards are met.
Historic rehabilitation bonu~ - the ARB, taking into account the recommendations
of the HRB, would determine whether the project complies with the Secretary of
Interior’s Standards for Rehabilitation and Guidelines for Rehabilitation of Historic
Buildings. The City would have the ability to retain a historic rehabilitation expert,
at the applicant’s expense, to provide an evaluation of the project’s eortformity with
the rehabilitation standards.
Bonus for combined seismic and hi~- the City Council, taking into
consideration the reeommendatious of the Chief Building Official, HRB and ARB,
word determine whether the project complies with the City’s standards.
o Once a project has been completed in the manner approved, a written certification of bonus
floor area entitlement would be issued by the City.
~: The HRB, ARB, Planning Commission and staff suggest that the proposed TDR
Program, as currently drafted, adequately addresses the issue of when the right to transfer exists.
The right to transfer a bonus would not occur until the work at the sender site is completed (i.e., the
right should notbe granted until the public purpose is accomplished). Many entitlement permits are
granted but not executed.
Should the TDR Program be expanded to include Public Facilities (PF), Planned
Community (PC) and residentially-zoned properties within the area generally zoned
Commercial Downtown (CD)?
Under the proposed TDR Program, both sender and receiver sites must be zoned CD. To provide
information in determining whether .the program should be expanded to include properties in other
CMR:470:96 Page 18 of 27
districts, an inventory of potential sender and receiver sites was recently prepared. The invemory
includes downtown properties within residential zoning districts, with CD zoned properties on’at
least three sides, andPC and PF zoned properties (see Tables.l- 6, attached).
Based upon the information provided by the inventories, it is not recommended that the TDR
program be expanded to include PF, PC or residentially zoned properties as sender sites. There are
no downtown PC or residentially zoned sites which would currently qualify as TDR sender sites.
In addition, there are only three downtown PF sites: the senior center, post office and the electrical
substation at 841 Alma, with a total of 7,973 square feet of potential bonus floor area, if tbey were
included as sender sites (see Tables 3A and 3B, attached). Thus, there are not a significant number
of PF properties that could benefit fi’om the TDR Program..This does not mean that these properties
are ineligible as receiver sites, but the process for modifications to buildings zoned PC (Planned
Community) is a PC zone process.
Recommendations: The HRB, ARB, Planning Commission and staff recommend that: 1) the TDR
ordinance should notbe revised to include downtown PF, PC and residentially-zoned properties; and
2) the Comprehensive Plan should include language explaining that downtown sites with existing
or proposed PC zoning are eligible to be receiver sites, provided that the PC review process is
followed. PC zoned properties could be receiver sites provided the PC zone process is followed
rather than the ARB process. It is not recommended that the TDR ordinance be expanded to include
PF or residentially zoned properties as receiver sites for several reasons. First, residential sites
cannot qualify as receiver sites due to the 150-foot buffer requirement. Second, there is an adequate
supply of potential CD District receiver sites to create a market for TDR’s. There are a total of 165
potential receiver sites within the CD Dislrict which could receive at oral of 741,765 square fegt (see
Table 4A attached). If PC District and PF District properties were allowed to receive development
rights, there would be only 17 additional receiver sites. Third, PC sites would not necessarily benefit
as receiver sites because any building expansions on those sites would be subject to the PC process,
i.e., additional square footag.e could be approved without the need to purchase.TDRs. Finally, with
the exception of the electrical substation at 841 Alma, all of the potential PF receiver sites are
parking lots which should .mnain in parking use long into the future. The public policy questions,
regarding City participation in selling development rights from PF zoned property to private parties
for downtown redevelopment and intensification, would likely lead to administration requirements
too cumbersome to justify public participation in the program.
o Should the TDR Program be expanded to include seismic upgrades of nonhistoric
buildings?
In order to address the question of whether the TDR Program should be expanded to include seismic
upgrades of nonhistorie buildings, an inventory of potential TDR sender sites was prepared (see
Tables 1-3, attached). Below is a list of the 23 downtown sites that have nonhistorie buildings that
qualify for seismie rehabilitation and bonus floor area.
ClV1Ri470:96 Page 19 of 27
Downtown Properties With Nonhistoric Buildings That Oualify for Seismic Bonus Floor Area
403-405 University
411 High
705 Alma
400 University
539 Alma
544 Emerson
171 University
663 Alma
380-382 University
542 High
820 Ramona
435-41 Emerson
611-23 Emerson
340 University
530-32 Emerson
230 Homer
233 University
150 Hamilton
310-14 University
270 University
160 Forest/701-05 High
281 University
610 High/132 Hamilton
Summary_ of Potential Sender Sites Under Proposed TDR Pro rgr_.~_
Type of Existing
Building(s)
Seismic (Nonhistoric)
Historic (Not seismic)
Both Seismic and Historic
Total
Potential Sender Sites Floor Area BonusSq. Ft. at
Potential Sender Sites
23
14
8
45 sites
59,116
41,440
27,182
127,738 square feet
Percentage of Total
Bonus Floor Area
46%
33%
21%
100%
Recommendations: The HRB, ARB, Planning Commission and staff recommend that the TDR
program include seismic upgrades of nonhistoric buildings, as proposed in the attached .draft
ordinance (Section 18.87.010(a), Attachment 2, includes buildings that are classified as Seismic
Category I, II or III as TDR sender sites). Including these properties as sender sites almost doubles
the total square footage available to be transferred under the proposed TDR Program, i.e., the total
amount of floor area which could be.transferred is increased from 68,622 to 127,738 square feet (see
attached Tables 1 - 3, for information regarding the individual sender sites). Increasing the
transferrable floor area does not change the downtown’s 350,000 square for total development cap
adopted in 1986.
o Should building owners be required to complete both seismic and historic upgrades to
receive bonuses for buildings that are in both categories?
Both the previously proposed ordinance and the attached ordinance require building owners to
complete both seismic and historic upgrades to receive bonuses for buildings that are in both
categories (see subsections 18.49.060(b)(2) and (3)(a) in the ordinance, Attachment 2). There are
several reasons for this requirement. The threat to life and safety presented by the seismic instability
of historic buildings often warrants requiring that seismic rehabilitation be accomplished
concurrently with historic rehabilitation. Seismic rehabilitation projects can be so extensive that it
would be difficult to do the seisrnie strengthening while at the same time not addressing the historic
features of the building. Frequently, when a building is upgraded to improve its marketability, some
seismic strengthening is done, but for cost reasons, stops short of meeting the requirements of the
City’s seismic program. While seismic rehabilitation can be costly, historic rehabilitation may cost
no more, or even less, than modern facade improvements tO the building, yet both types of
rehabilitation offer the same floor area bonus. Without the joint improvement requirement, a
CMR:470:96 Page 20 of 27
building owner could make relatively inexpensive historic rehabilitation improvements and request
bonus development rights, while making only limited or no seismic improvements. On-the other
hand, seismic rehabilitation could be undertaken at the expense of protecting the historic integrity
of the structure.
Recommendations: The HRB, ARB, Planning Commission and staffrecommend that the provisions
of the draft ordinancerequiring both seismic and historic upgrades to occur in order to receive
bonuses for buildings in both categories, should remain.
8.What is the difference between historic preservation and historic rehabilitation?
This question was raised because it was unclear why the previous draft ordinance used both terms.
The attached draft "ordinance was revised to use only the term "historic rehabilitation," which is
defined in the Secretary of the Interior’s Standards of Rehabilitation and Guidelines for
Rehabilitating Historic Buildings as follows:
Historic Rehabilitation - ".the process of returning a property to a state of utility, through
repair or alteration, which makes possible an efficient contemporary use while .preserving
those portions and features of the property which are significant to its historic, architectural
and cultural valueS."
The term "historic preservation" is defined in the Secretary of Interior’s Standards for Treatment "
of Historic Properties as follows:
Historic Preservation - "the act or process of applying measures necessary tosustain the
existing form, integrity, and materials of an historic property. Work, including preliminary
measures to protect and stabilize the property, generally ’focuses upon the ongoing
maintenance and repair of historic materials and features rather than of extensive replacement
and new construction. New additions are not within the scope of this treatment; however,
the limited and semitive upgrading of mechanical, electrical and plumbing systems and other
code-related work to make properties functional is appropriate within a preservation project."
Recommendations: The HRB, ARB, Planning Commission and staff recommend use of the term
"historic rehabilitation" exclusively, as shown in the attached draft ordinance (Attaehrnent 2). ¯
The current TDR Program does not allow bonus square footage beyond the maximum
allowable FAR - 3.0 to 1 FAR in theCD-C District and 2.0 to 1 in the CD-S and CD-N
Districts. Should sender sites be able to transfer bonus square footage above the
maximum allowable FAR?
Under existing Code requirements, bonus square footage is granted if all other Code requirements,
including the maximum allowable FAR with the bonus, i.e., 3.0 to 1.0 in the CD-C District and 2.0
to 1.0 in the CD-S and CD-N Dislriets, are satisfied. If the maximum allowable FAR restriction
were removed, all of.the potential TDR sender sites which meet the other zoning require.merits would
CMR:470:96 ..Page 21 of 27
be able to utilize the full bonus, by transferring the bonus square footage above the maximum FAR
to a receiver site.
The attached inventory of sender sites shows the bonus square footage that would be available if the
maximum allowable FAR was removed as a restriction on the bonus square footage (see Tables 1B,
C and D., Attachment 4). A total of 11 sites within the CD District could benefit by removing this
restriction, including 8 properties that are currently at or exceed the maximum allowable FAR (see
attached Tables 1B and c). If this restriction were removed, the total number of potential sender sites
within the CD District would be increased to from 45 to 53 and the total floor area that could
potentially be transferred would be increased from 127,738 square feet to 267,926 square feet, a 48
percent increase.
The Planning Commission was concerned that including all 8 properties as sender sites would
significantly increase the mount of TDR floor area on the market, which could make the sale of
TDR’s at the other 45 sender sites more difficult. However, the Commission suggested that there
may be merit in allowing sender sites to transfer bonus square footage above the maximum allowable
FAR, if the TDR Program is expanded in the future to include certain properties outside of the
downtown area.. For example, if the properties within the Stanford Research Park were allowed to
be receiver sites, there would be a greater demand for receiving the TDR square footage from the
additional sender sites.
Recommendations: The HRB, ARB and Planning Commission made different recommendations
regarding transferring bonus floor area above the maximum allowable FAR. Staff’s recommended
draft ordinance (Attachment 2) is consistent with the Planning Commission’s recommendation that
sender sites should not be allowed to transfer bonus square footage above the maximum allowable
FAR. Table 1C (attached) shows that there are 8 properties downtown, which are unable to
participate in the program as sender.sites because they currently exceed the maximum FAR. If the
maximum FAR limits were eliminated (for transferability purposes only) and all 8 properties were
allowed to become TDR sender sites, the total amount of floor area that could be transferred under
the program would be almost doubled.
The HRB recommended that the program be revised to allow sites with buildings that are Historic
Category 1 or 2 and that currently exceed the maximum permitted FAR to obtain floor area bonuses
and transfer the floor area. The site(s) which currently exceed the FAR should not be allowed to use
the bonus floor area on’site. The transferred floor area from the site(s) should be limited to 50
percent ofthe maximum permitted FAR with the bonus (i.e., up to 3.0 to 1.0 in the CD-C subdistdct
and 2.0 to 1.0 in the CD-S and CD-N subdi~cts). The HRB noted that, currently, 480 University
is the only site Which would benefit by the recommended revision (see Table 1 C, attached). The
site is 9,425 square feet in area with a 55,362 square foot building, or a5.87 FAR. If the site(s) were
permitted to transfer 50 percent of the maximum permitted FAR with a double bonus ( i.e., 50
percent of a 3.0 to 1.0 FAR), it could transfer 14,137 square feet to an eligible receiver site.
The ARB recommended that the program be revised to allow sites with buildings that are both
historic Category 1 or 2 and seismic Category I, II or III and that currently exceed the maximum
permitted floor area ratio (FAR), to obtain floor area bonuses and transfer the bonus floor area to
CMR:470:96 Page 22 of 27
eligible receiver sites. The site(s) which exceed the FAR should not be allowed to use the bonus
floor area on-site. The transferred floor area from the site(s) should be limited to 50.percent of the
maximum permitted FAR with the bonus (i.e., up to 3.0 to 1.0 in the CD-C subdistrict and 2.0 to 1.0
in the CD-S and CD-N subdistdets).. Currently, 480 University Avenue is the only site which would
benefit by the recommended revision.
10.Should the current restriction on new floor area at receiver sites be increased above the
.5 FAR maximum?
The purpose of increasing the maximum .5 to 1.0 FAR at receiver sites would be to ensure that there
is an adequate incentive for the receiver sites to purchase TDRs. There are a total of 165 potential
receiver sites located within the CD District which could receive a total of 741,765 additional square
feet. Since the maximum TDR square footage which could be transferred from the 45 sender sites
is 127,738 square feet, there is an adequate, supply of potential receiver sites to create an adequate
demand for the TDRs.. Thus, increasing the FAR would not necessarily result in any additional
seismic or historic rehabilitation at the sender sites.
The Planning Commission referred this question to their Committee for further review. At the
Committee meeting, Jim Baer requested that the Committee consider recommending increasing the
maximum transferrable FAR. He suggested that since most properties within the CD-C subdistriet
are currently built-out to the property lines, restricting the transferrable floor area to a maximum of
.5 FAR.would often result in the construction of a new second-story addition coveting only half of
the building. If, as a result of the transferred floor area, the entire building is required by the City
to comply with current building codes, the additional costs are considerable in relation to the mount
of additional floor area. He suggested that it would be more cost-effective if projects at receiver sites
were allowed to construct a second floor above all or a greater portion of the existing building (i.e.,
a .75 FAR or 1.0 FAR-maximum increase in floor area). ~
However, at least two downtown properties have recently proposed second-story additions covering
less than 50 percent of the existing first story (i.e., 401 High Street and 901 University Avenue).
Thus, although staff has not conducted a complete inventory of recently proposed projects, it appears
that there are circumstances when it is cost-effective to construct a second floor above less than 50
percent of an existing first floor.
Recommendations: The Planning Commission and staff reeo~end that the provisions regarding
allowable new floor area at receiver sites be modified, as follows: 1) for properties within the
downtown parking assessment district, the l~ansferred floor area would be limited to a 1.0 to 1.0
FAR above what exists or would otherwise be permitted for the site, whichever is greater, provided
that the total additional floor area does not exceed 10,000 square feet; 2) for properties located
outside of the parking assessment district, the transferred floor area would be limited to a .5 to 1.0
FAR above what exists or would otherwise be permitted for the site, whichever is greater, provided
that the total additional floor area does not exceed 5,000 square feet; and 3) for all receiver sites, the
maximum FAR for the existing and new floor area would be 3.0 to 1.0 in the CD-C subdistriet and
2.0 to 1.0 in the CD~S and CD-N subdistricts. The draft ordinance (Attaehraent 2) and Negative
CMR:470:96 Page 23 of 27
Declaration (Attachment 3) have been revised to reflect the Planning Commission and staff
recommendation (the HRB and ARB did not discuss this issue).
11.Council Member Simitian suggested that the following be considered:
Establish a cap. on the amount of potential new floor area which could be
transferred.
Under Section 18.49.030 of the Palo Alto Municipal Code (PAMC), there is an existing 350,000
square foot cap on additional development downtown. Under Section 18.18.49.060(b)(3), the bonus
floor area counts toward the cap.
Recommendations: The HRB, ARB, Planning Commission and staff recommend that the TDR
program should not be revised to include a cap on TDR square footage because 1) there is no
indication that the program will be used extensively; and 2) bonus square footage is already counted
against the existing downtown cap of 350,000 square feet. Future downtown monitoring reports will
highlight TDR square footage so that it can be monitored by the City Council.
Establish a sunset date in the ordinance in order to encouragethat the seismic
upgrades are accomplished before the next major earthquake.
The purpose of including a sunset date in the ordinance would be to encourage seismic upgrades
of buildings to be completed sooner, rather than later. However, it is uncertain whether a sunset date
would actually encourage property owners to seismically rehabilitate their buildings at an earlier
date. If the sunset date expired and there were a significant number of remaining properties that
could benefit from the TDR Program, there would be a basis for the City to extend the sunset date.
The process of using TDRs is likely to be complieated,.and adding a further artificial time constraint
does not appear to be warranted. In addition, a sunset date eouid.ereate apparent inequities for
downtown property owners who are committed to long-term leases.
Recommendations: The HRB, ARB, Planning Commission and staff recommend that the TDR
Program should not be revised to establish a sunset date.
Co Research the cap on the downtown parking deficit in relation to any additional
parking required for projects participating in the program.
To ensure that the downtown parking deficit does not increase beyond the deficit of 1,600 spaces
that existed in 1986, the Downtown Plan included, a monitoring program and a cap of 225 parking
space exemptions, which represents one-half of the number of spaces deemed necessary for the
Construction of a new public parking garage. If the parking exemptions exceed 225 spaces, a review
of the exemption regulations would be conducted and the construction of a new parking garage
would be considered. Between September 1, 1986 and August 1, 1995, a total of 108 parking
spaces had been exempted from parking requirements, an average of approximately 12 spaces/year.
CMR:470:96 Page 24 of 27
The City recently began a study to determine the need for a new downtown parking structure. The
project is organized into two phases. Phase 1, which is currently underway, focuses on the feasibility
and schematic design of the parking structure. Phase 2 will focus on the final design, construction
documents and contract administration.
A total of 133 sites of the 165 potential redeiver sites are located within the downtown parking
assessment district. Any projects within the assessment district are exempt from parking
requirements. Projects at the 32 potential receiver sites which are located outside of the assessment
district must provide any required additional parking for floor area transferred under the TDR
program. Under a "worst case" scenario, if all of the 64,116 square feet of potential bonus square
footage under the revised TDR Program were transferred only to the receiver sites which are located
within the parking assessment district, a total of 256 parking spaces at those sites would be exempted
from the City’s parking requirements, based upon 4 parking spaces/I,000 square feet of floor area.
Thus, the proposed project could affect the time at which the total number of exempted parking
spaces reaches the cap of 225 spaces. However, the actual increase in parking demand would be
expected to be gradual and distributed geographically.
Recommendations: The HRB, ARB, Planning Commission and staff recommend that the TDR
Program should not be revised to require parking for transferred floor area. The parking exemption
is one of the primary incentives for completing historic and seismic upgrade projects and transferring
floor area.
The alternatives include the following:
Allow previously completed projects to receive the bonus square footage retroactively
(Question #3)
2.Expand the program to include PF, PC and residentially zoned properties (Question #5)
Allow sender sites to transfer bonus floor area above the maximum allowable FAR
(Question #9)
4.Establish a cap on the total transferrable floor area under the program (Question # 11 .a)
o Establish a sunset date for sender sites with buildings requiring seismic rehabilitation
(Question #11.b)
While the precise fiscal impacts to the City cannot be determined, itseems likely that they would
not be significant. Additional costs would be incurred by formalizing the process of City
certification that development bonuses have been granted and/or transferred, since this world require
minor modifications to application forms and additional record keeping. It is recommended that
cost-recovery fees can be charged to applicants and that a municipal fee schedule amendment be
adopted by the Council (see Attachment 4).
CMR:470:96 Page 25 of 27
~NMENTAL ASSESSMENT
An Environmental Impact Assessment and a Negative Declaration has been prepared for the revised
floor area bonus program and TDR Program and is attached (Attachment 3).
STEPS FOLLOWING APPROVAL
After the revised TDR Program is adopted, steps required.for implementation include:
Development of a handout for property owners and the general public explaining the TDR
Program;
Modification of existing forms for processing .development projects;
o Development by the City Attorney’s office of new forms for recording and transmitting
information about granting and transferring property rights; and
Staff training in the new TDR process:
ATTACHMENTS
Attachment 1:
Attachment 2:
Attachment 3:
Attachment 4:
Attachment 5:
Attachment 6:
Attachment 7:
Attachment 8:
Attachment 9:
Attachment 10:
Attachment ! 1:
Attachment 12:
Attachment 13:
Attachment 14:
Attachment 15:
Attachment 16:
Attaehrnent 17:
Attachment 18:
Attachment 19:
Draft Resolution Amending Program 6A and Text of the Palo Alto
Comprehensive Plan Relating to Density Transfer
Draft Ordinance Amending Section 18.49.060 and Adding Chapter 18.87
Regarding Transferable Development Rights
Negative Declaration
Draft Fee Schedule Modification
Tables 1; 2 & 3 (TDR Sender Simms)
Tables 4, 5 & 6 (TDR Receiver Simms)
Minutes from May 1, 1995 City Council Meeting
Minutes from June 19, 1996 HRB Meeting
Minutes from June 20, 1996 ARB Meeting
Minutes from June 26, 1996 Planning Commission Meeting
Minutes from September 11, 1996 Planning Commission Meeting
Comprehensive Plan Urban Design Element, Program 6a
Map of Downtown CD Zone District
Urban Design Guide, Building Volumes Diagram
Letter from James E. Baer dated September 11, 1996
Letter from James E. Baer dated June 24, 1996
Letter from James E. Baer, Premier Properties, dated April 12, 1995
Letter from John Paul Hanna dated June 26, 1996
Letter from Charles J. Keenan llI, dated April 6, 1995
Planning Commission
Historic Resource Board
Architectural Review Board
CMR:470:96 Page 26 of 27
Chamber of Commerce, 325 Forest Avenue, Palo Alto CA 94301
Tricia Ward-Dolkas, 412 Everett Street, Palo Alto, CA 94301
Russ Flyrm, 3165 California, San Francisco CA 94115
Jim Baer, Premier Properties, 172 University Avenue, Palo Alto CA 94301
Charles Keenan, Keenan Land Company, 700 Emerson, Palo Alto CA 94301
Roxy Rapp, P.O. Box 1672, Palo Alto CA 94302
Robert Konevieh, 5150 E1 Camino Real, .Suite A-22, Los Altos CA 94022
Warren Thoits, P.O. Box 21, Palo Alto CA 94301
John Northway, 437 Lytton Ave., Palo Alto CA 94301
Chris Dressel, 2995 Woodside Road, Suite 400, Woodside CA 94062
John Paul Hanna, Hanna & Van Atta, 525 University Ave., Suite 705, Palo Alto CA 94301
William Keller, Real Estate Investment Corp., 664 Gillman Street, Palo Alto CA 94301
Phyllis Munsey, 520 Ramona Street, Palo Alto CA 94301
CMR:470:96 Page 27 of 27