Loading...
HomeMy WebLinkAbout1996-07-22 City Council (15)TO:HONORABLE CITY COUNCIL FROM: AGENDA DATE: SUBJECT: CITY MANAGER DEPARTMENT: Planning and Community Environment July 22, 1996 CMR:350:96 Development Project Preliminary Review Application at 525 University Avenue .for a Comprehensive Plan Amendment to the Urban Design Element, Policy 1, Program 1, a Zone Change from the CD-C (P) Commercial Downtown District and Pedestrian Shopping Combining District to a Planned Community (PC) District, and construction of an approximately 52,400-square-foot office/commercial space addition, and relocation of another approximately 22,200 square feet of basement retail above grade, to an existing office/commercial building and related site improvements. File Nos.: 96-DPR-1, 96-EIA-21. REOUEST This application is a Development Project Preliminary Review Application at 525 University Avenue for a Comprehensive Plan Amendment to the Urban Design Element, Policy 1, Program 1, a Zone Change from the CD-C (P) Commercial Downtown District and Pedestrian Shopping Combining District to a Planned Community (PC) District, and a major addition to an existing office/commercial building. RECOMMENDATIONS Staff recommends that the City Council take either of the two following actions, depending upon whether or not Council finds that the application would benefit by a preliminary review and public study session: 1.Decline to initiate the preliminary review and public study session; or Initiate the preliminary review process by referring the application for Development Project Preliminary Review to the Planning Commission and the Architectural CMR:350:96 Page 1 of 21 Review Board for "public study sessions" as idemified in Chapter 18.97 (Development Project Preliminary Review Procedures) of .the City’s zoning regulations, with the results of the study sessions to be reviewed by City Council in a study session. POLICY IMPLICATIONS The proposed project has been reviewed for consistency with the Palo Alto Comprehensive Plan, Zoning Ordinance, and the Downtown Urban Design Guide. The major policy issues pertinent to the proposal are as follows: Comprehensive Plan The site is designated for Regional Community Commercial use in the Comprehensive Plan, which provides for restaurants, specialty stores, and non-retail services such as offices, banks, and professional services. The proposed uses of retail and office are allowed within this Comprehensive Plan designation. The proposed project appears consistent with the following Comprehensive Plan objectives, policies, and programs: Policy Consistency Urban Design Element, Policy 1, "Maintain the present scale of the City, but modify those elements which by their massiveness are overwhelming and unacceptable." The proposed project would modify the perception of massiveness, by improving pedestrian amenities, and providing human-scale architectural features at the ground level. Urban Design Element, Objective, page 42, "Promote the orderly and harmonious development of the City and the attainment of the most desirable land use and improvements through the review of new development." The site is designated Regional Community Commercial and is well suited for this use. The site is surrounded by similar and compatible retail and office uses and is well served by public parking in the Downtown area. Urban Design Element, Objective, page 42, "Promote visual aesthetics through tree planting, landscaped areas, and removal of visually disruptive elements of major City streets." The project proposes to replace existing unhealthy trees along the Cowper Street public fight-of-way, and will improve the relationship between the ground floor architecture of this office complex with the pedestrian public realm. Urban Design Element, Policy 5: "Encourage rehabilitation of aging retail areas to keep them economically healthy." The addition of Class A office space, building improvements, and public amenities would improve the economic vitality of office and retail uses in the downtown area. CMR:350:96 Page 2 of 21 Urban Design Eleme.nt, Program 20: "Require street frontages that contribute to retail vitality in shopping districts." This building is one of the most inhospitable to pedestrians in all of Downtown Palo Alto. Although not within a ground floor retail (GF) district, the project is bordered by ground floor retail areas to the south and west. First floor street frontages would benefit from the list of architectural improvements that comprise the project description, including architectural retrofitting to add human scale features to the base of the building, with such measures as substitution of opaque paneling (on the Cowper frontage) and solar film windows (on the Tasso frontage) with clear windows to improve pedestrian visibility and visual interest. B. Policy Inconsistency The project is inconsistent or potentially inconsistent with the following policies: Urban Design Element, Policy 1, Program 1, "Discourage massive single uses through limitations on height and density to proteet surrounding uses and community values." The proposed project would add to the height and density of an existing massive single use. Comprehensive Plan policy would discourage the building additions that add more mass, height or density to a use which is already inconsistent with this policy. Staff finds that the office space addition portion of this proposal should be discouraged under this policy. Urban Design Element, Policy 6B: "Limit nonresidential development in the Downtown Area to ten pereent (350, 000 square feet of floor area) above the amount of development existing or approved in May 1986." The proposed addition of 52,396 square feet (44,639 square feet of building plus 7,757 square feet of atrium) and the intensification of use that would result from the conversion 22,200 square feet of basement retail to ground floor retail would still fall well within the Downtown floor area limit, but would constitute a large percentage (15 percent) of the total allocation of 350,000 square feet. The proposed addition would constitute an even larger percentage (17 percentage) of the remaining square footage (312,282 square feet as of August 31, 1995). Transportation Element, Policy 10: ’Tn the Downtown Area, new development should not increase the total weekday peak parking deficit beyond that expected from development existing and approved through May 1986." Parking is at a premium in ¯ the Downtown area, and the proposed addition would be deficient in on-site parking because it declines to include 31 spaces attributable to the atrium by the zoning ordinance. Also, the project relies entirely on valet parking, which raises questions about the intensity of this parking use, the number of cars that will be assigned parking at one particular location in Downtown Palo Alto, and the amount of local congestion and circulation difficulties that could result. Without providing further in- CMR:350:96 Page 3 of 21 lieu fees, the project would be inconsistent with this policy in the Comprehensive Plan. Land Use Element, City Council Resolution 7151: "The standards for building intensity for non-residential designated lands are derived from the floor area ratios allowed in underlying zoning districts and represent an expectation of the intensity of future development. Actual floor area ratios on individual sites vary." The existing zoning for the subject property is the Commercial Downtown District Which limits floor area ratios (FARs) to a maximum of 1.0, with allowances for existing and bonus square footage, not to exceed 3.0. Ifrezoned to the PC (Planned Community) District, the FAR limit does not apply, but the Comprehensive Plan standard does. The property is rare in Palo Alto in that it currently exceeds 3.0 FAR. It will exhibit an FAR of 4.3 with the proposed building addition. The Comprehensive Plan allows that project sites will vary above and below this standard. But, considered together with other policies, it is clear that the intent of the Comprehensive Plan was to discourage large, massive single uses. Project size limitations, CD-C, Commercial Downtown Regulations: "The Downtown regulations, per section 18. 49. 040, limit the size of any single nonresidential project to 25, 000 square feet or 15, 000 square feet above the existing floor area, whichever is greater, provided the 1.0 and 3.0 FAR limitations are not exceeded" This project size regulation resulted from policy developed during the Downtown Study, adopted in 1986. This study and resultant downzoning accomplished three very important things for Downtown Palo Alto which have been instrumental in its success. First, the traditional and human scale of the historic lotting pattern of Downtown was preserved by discouraging consolidation of parcels and limiting the .building sizes through project size limits. Properties, such as 525 University, had already been consolidated from several smaller parcels into a single large parcel. The buildings constructed on the resultant large lots are inconsistent with the scale and pattern of the Downtown and are "unfriendly" to pedestrians. The Downtown regulations were revised to discourage further scale changes of this magnitude by limiting project size, encouraging retention of the traditional pattern. The other two regulatory interventions that have been most successful in causing Palo Alto’s Downtown to become a thriving place are the imposition of ground floor use restrictions and the downzoning to 1.0 FAR, which resulted in the preservation of many of the original buildings and architecture. Urban Design Guide While the Downtown Urban Design Guide is considered an incentive and guide for redevelopment, rather than policy, it call~ for strengthening pedestrian activity and uses in the vicinity of the project. One of the goals of the Cowper Center District directly applies CIVIR:350:96 Page 4 of 21 to this project: promote lively and active destination points utilizing the Pal. Alto Office Center Plaza. Specific recommendations call for redeveloping the ground floor with retail or restaurant uses that open onto the street, providing wind and weather protection, and improving the pedestrian character of the ground floor plaza. Other suggestions include humanizing the scale of the building through use of awnings and canopies and adding color, vendors, kiosks and other pedestrian activities to the plaza. The applicant’s proposal responds to many of the suggestions made in the Urban Design Guide. EXECUTIVE SUMMARY If public study sessions on the preliminary review application are to be held, the significant issues staff recommends to be addressed at the hearing are the following: Public Benefit: Is the public benefit (some of which can be quantified in terms of dollar value and some of which are intangible) commensurate with the scope of the project? Floor Area: Is it consistent with Downtown policies and equitable to other property owners to allow 52,396 additional square feet and an FAR of 4.3 on this site compared to other sites within the Downtown area? Downtown Growth Limits: Should one project consume 17 percent of the remaining Downtown allocation, or should the allocation be distributed more uniformly among a greater number of projects and distributed among various Downtown locations? Traffic: The proposed addition would generate 838 new trips per day in the Downtown area and could potentially add cut-through traffic on nearby residential streets. These increases alone would not be significant or discernable to residents, according to the traffic analysis and Transportation Division staff. However, City monitoring of the University Avenue corridor has experienced traffic increases which exceed the predictions in the 1989 Citywide EIR, while the floor area added Downtown has fallen short of the growth curve predicted. Until the Comprehensive Plan EIR is released and adopted, a recent evaluation of cumulative traffic impacts in the corridor is not available. Staff recommends that if this project proceeds to the formal application phase, a focussed EIR be prepared to address the potential significant cumulative traffic impacts issue. CMR:350:96 Page 5 of 21 Parldng: The desirability of relying on valet parking and a method for ensuring an adequate number of parking attendants should be discussed~ Also, the property owner is required to pay an in, lieu parking fee to compensate for not provided parking for the on-site atrium. Not complying is inconsistent with City zoning regulations. FISCAL IMPACT Should the applicant pursue project applications following the preliminary review process, the costs of processing the applications will be subject to the full cost recovery fee schedule and will not result in any fiscal impact on the City. A fiscal analysis will be prepared for the project since it requires a significant zone change and amendment to the Comprehensive Plan. An outline of the issues to be covered in the fiscal assessment is included in the attached long-form CMR, Fiscal Impact Section. ENVIRONMENTAL ASSESSMENT Should the applicant pursue project applications, a focussed EIR will be required by staff. The EIR will evaluate the cumulative traffic and circulation impacts that result from a concentration of floor area in this portion of Downtown Palo Alto with other growth expected in the area, updating assumptions as to what was modeled in the Citywide Land Use and Transportation Study EIR. Visual and shadow impact assessment are other topics to be covered. PREPARED BY: DEPARTMENT HEAD REVIEW: KENNETH R. SCHREIBER Director of Planning and Community Environment CITY MANAGER APPROVAL: City Manager CMR:350:96 Page 6 of 21 City of Palo Alto City Manager’s Summary Report SUBJECT:Development Project Preliminary Review Application at 525 University Avenue for a Comprehensive Plan Amendment to the Urban Design Element, Policy 1, Program 1, a Zone Change from the CD-C (P) Commercial Downtown District and Pedestrian Shopping Combining District to a Planned Community (PC) District, and construction of an approximately 52,400-square-foot office/commercial space addition, and relocation of another approximately 22,200 square feet of basement retail above grade, to an existing office/commercial building and related site improvements. File Nos.: 96-DPR-1, 96-EIA-21. REQUEST This application is a Development Project Preliminary Review Application at 525 University Avenue for a Comprehensive Plan Amendment to the Urban Design Element, Policy 1, Program 1, a Zone Change from the CD-C (P) Commercial Downtown District and Pedestrian Shopping Combining Districtto a Planned Community (PC) District, and a major addition to an existing office/commercial building. RECOMMENDATIONS Staff recommends that the City Council take either of the two following actions, depending upon whether or not Council finds that the application would benefit by a preliminary review and public study session: o Decline to initiate the preliminary review and public study session; or Initiate the preliminary review process by referring the application for Development Project Preliminary Review to the Planning Commission and the Architectural Review Board for "public study sessions" as identified in Chapter 18.97 (Development Project Preliminary Review Procedures) of the City’s zoning regulations, with the results of the study sessions to be reviewedby City Council in a study session. BACKGROUND CMR:350:96 Page 7 of 21 The project site is located at 525 University and is one of the most prominent buildings in Palo Alto. The site is presently occupied by three office/commercial buildings (one 15-story and two 2-story office buildings) totaling 202,600 square feet. The adjacent Bank of America building is on a separately owned parcel and is not part of the project. The site is surrounded by streets and commercial buildings within the Downtown area. The site is level and bordered on the north by the Bank of America building and Lytton Street; on the south by University Avenue; on the east by Tasso Street; and on the west by Cowper Street. The property is designated as "Regional/Community Commercial" in the existing Comprehensive Plan and is zoned "Commercial Downtown District & Pedestrian Shopping Combining District (CD-C (P))". The applicant is applying to rezone the property to the Planned Community (PC) zoning district, which is required since the proposed addition to the existing structure would exceed the CD-C maximum allowable floor area ratio of 3.0. The proposed FAR is 4.3. The downtown commercial limit of 350,000 square feet of floor area over and above that which then existed was adopted by the City Council on July 14, 1986. The majority of the Downtown area is zoned CD-C and is subject to the square footage limit. Additional properties in the Downtown area are zoned PC, PF, or RM and are also subject to the limit. POLICY IMPLICATIONS The proposed project has been reviewed for consistency with the Palo Alto Comprehensive Plan, Zoning Ordinance, and the Downtown Urban Design Guide. The major policy issues pertinent to the proposal are as follows: Comprehensive Plan The site is designated for Regional Community Commercial use in the Comprehensive Plan, which provides for restaurants, specialty stores, and non-retail services such as offices, banks, and professional services. The proposed uses of retail and office are allowed within this Comprehensive Plan designation. The proposed project appears consistent with the following Comprehensive Plan objectives, policies, and programs: Policy Consistency Urban Design Element, Policy 1, "Maintain the present scale of the City, but modify those elements which by their massiveness are overwhelming and unacceptable." The proposed project would modify the perception of massiveness, by improving pedestrian amenities, and providing human-scale architectural features at the ground level. Urban Design Element, Objective, page 42, "Promote the orderly and harmonious development of the City and the attainment of the most desirable land use and improvements through the review of new development." The site is designated CMR:350:96 Page 8 of 21 Regional Community Commercial and is well suited for this use. The Site is surrounded by similar and compatible retail and office uses and is well served by public parking in the Downtown area. Urban Design Element, Objective, page 42, "Promote visual aesthetics through tree planting, landscaped areas, and removal of visually disruptive elements of major City streets." The project proposes to replace existing unhealthy trees along the Cowper Street public fight-of-way, and will improve the relationship between the ground floor architecture of this office complex with the pedestrian public realm. Urban Design Element, Policy 5: "Encourage rehabilitation of aging retail areas to keep them economically healthy." The addition of Class A office space, building improvements, and public amenities would improve the economic vitality of office and retail uses in the downtown area. Urban Design Element, Program 20: "Require street frontages that contribute to retail vitality in shopping districts." This building is one of the most inhospitable to pedestrians in all of Downtown Palo Alto. Although not within a ground floor retail (GF) district, the project is bordered by ground floor retail areas to the south and west. First floor street frontages would benefit from the list of architectural improvements that comprise the project description including, architectural retrofitting to add human scale features to the base of the building with such measures as substitution of opaque panelling (on the Cowper frontage) and solar film windows (on the Tasso frontage) with clear windows to improve pedestrian visibility and visual interest. B. Policy Inconsistency The project is inconsistent or potentially inconsistent with the following policies: Urban Design Element, Policy 1, Program 1, "Discourage massive single uses through limitations on height and density to protect surrounding uses and community values." The proposed project would add to the height and density of an existing massive single use. Comprehensive Plan policy would discourage the building additions that add more mass, height or density to a use which is already inconsistent with this policy. Staff finds that the office space addition portion of this proposal should be discouraged under this policy. Urban Design Element, Policy 6B: "Limit nonresidential development in the Downtown Area to ten percent (350, 000 square feet of floor area) above the amount of development existing or approved in May 1986." The proposed addition of 52,396 square feet (44,639 square feet of building plus 7,757 square feet of atrium) and the intensification of use that would result from the conversion 22,200 square feet of CMR:350:96 Page 9 of 21 basement retail to ground floor retail would still fall well within the Downtown floor . area limit, but would constitute a large percentage (15 percent) of the total allocation of 350,000 square feet. The proposed addition would constitute and even larger percentage (17 percentage) of the remaining square footage (312,282 square feet as of August 31, 1995). Transportation Element, Policy 10: ’Tnthe Downtown Area, new development should not increase the total weekday peak parking deficit beyond that expected from development existing and approved through May 1986. ’~ Parking is at a premium in the Downtown area and the proposed addition would be deficient in on-site parking because it declines to include 31 spaces attributable to the atrium by the zoning ordinance. Also, the project relies entirely on valet parking, which raises questions about the intensity of this parking use, the number of cars that will be assigned parking at one particular location in Downtown Palo Alto, and the amount of local congestion and circulation difficulties that could result~ Without providing further in- lieu fees, the project would be inconsistent with this policy in the Comprehensive Plan. Land Use Element, City Council Resolution 7151: "The standards for building intensity for non-residential designated lands are derived from the floor area ratios allowed in underlying zoning districts and represent an expectation of the intensity of future development. Actual floor area ratios on individual sites vary." The existing zoning for the subject property is the Commercial Downtown District which limits floor area ratios (FAILs) to a maximum of 1.0, with allowances for existing and bonus square footage, not to exceed 3.0. Ifrezoned to the PC (Planned Community) District, the FAR limit does not apply, but the Comprehensive Plan standard does. The property is rare in Palo Alto in that it currently exceeds 3.0 FAR. It will exhibit an FAR of 4.3 with the proposed building addition. ~The Comprehensive Plan allows that project sites will vary above and below this standard. But, considered together with other policies, it is clear that the intent of the Comprehensive Plan was to discourage large, massive single uses. Project size limitations, CD-C, Commercial Downtown Regulations: The Downtown regulations, per section 18.49. 040, limit the size of any single nonresidential project to 25, 000 square feet or 15, 000 square feet above the existing f!oor area, whichever is greater, provided the 1.0 and 3.0 FAR limitations are not exceeded This project size regulation resulted from policy developed during the Downtown Study, adopted in 1986. This study and resultant downzoning accomplished three very important things for Downtown Palo Alto which have been instrumental in its success. First, the traditional and human scale of the historic lotting pattern of Downtown was preserved by discouraging consolidation of parcels and limiting the building sizes CMR:350:96 Page 10 of 21 through project size limits. Properties such as 525 University had already been consolidated from several smaller parcels into a single large parcel. The buildings constructed on the resultant large lots are inconsistent with the scale and pattern of the Downtown and are "unfriendly" to pedestrians. The Downtown regulations were revised to discourage further scale changes of this magnitude by limiting project size, encouraging retention of the traditional pattern. The other two regulatory interventions that have been most successful in causing Palo Alto’s Downtown to become a thriving place are the imposition of ground floor use restrictions and the downzoning to 1.0 FAR, which resulted in the preservation of many of the original buildings and architecture. Urban Design Guide While the Downtown Urban Design Guide is considered an incentive and guide for redevelopment, rather than policy, it calls for strengthening pedestrian activity and uses in the vicinity of the project. One of the goals of the Cowper Center District directly applies to this project: promote lively and active destination points utilizing the Palo Alto Office Center Plaza. Specific recommendations call for redeveloping the ground floor with retail or restaurant uses that open onto the street, providing wind and weather protection and improving the pedestrian character of the ground floor plaza. Other suggestions include humanizing the scale of the building through use of awnings and canopies and adding color, vendors, kiosks and other pedestrian activities to the plaza.. The applicant’s proposal responds to many of the suggestions made in the Urban Design Guide. DISCUSSION Existing Conditions The existing three buildings were constructed in 1964 on. a parcel comprising the entire block. The parcel was subdivided in 1972 to allow construction of the three-story Bank of America building, which was completed in 1974. No major improvements have been made to the subject parcel since then, with the exception of planter boxes which were added along the University Street frontage in 1991. The existing buildings contain mostly office tenants and a few retail and personal service tenants, e.g., a small cafe and barber shop on Level A of the parking structure located under the buildings. The building is 99 percent occupied and there is a waiting list for space. The property is level and bordered on the north by the Bank of America building and Lytton Street; on the south by University Avenue; on the east by Tasso Street; and on the west by Cowper Street. A new mixed office/retail building is currently under construction at 483 University, directly across Cowper Street from the project. CMR:350:96 Page 11 of 21 Proposed Use The proposed addition to the Palo Alto Office Center is intended to meet the demand for more Class A office space in Downtown Palo Alto, while creating a more pedestrian-friendly facade. The project will also add public activity to the underutilized plaza area by creating an enclosed atrium space and adding a large restaurant facility. The project also includes monetary contributions to Downtown parking and urban design improvements as public benefits. The specific features of the proposal are described in the applicant’s project narrative, and are summarized as follows: o o o Add a third floor to each of the two existing, two-story wings which flank the main 15-story tower and construct a new three-story structure connecting the two existing wings; Create an enclosed, three-story atrium in place of the current outdoor plaza; Add two arcades on either side of the office tower in place of the existing open ¯ spaces along the University frontage; Relocate the existing side entrances of the tower to front onto University Avenue and add canopies over each entry; Replace the existing tenants beneath the tower with galleries on either side for the display of art; Locate art, in the form of four cast glass pyramids, on the sidewalk in front of the tower; 7.Provide a comer element at the University/Cowper intersection; o Replace the opaque facade with five art display windows on the Cowper Street frontage; Provide a columned arcade as an entryway to the atrium from each of the side streets; 10. 11. Construct a split level restaurant which will open up onto the ground floor of the atrium; Add parking to serve the 44,639 square feet of new space (the proposal does not provide parking for the 7,757 square foot atrium) with the addition of 46 CMR:350:96 Page 12 of 21 12. 13. 14. new self-parking spaces and 137 valet spaces for a total of 628 spaces, of which 526 (84 percent) would be valet parking only; Construct street fumiture, paving and other improvements to the Tasso and Cowper street intersections; Contribute $150,000 to the Palo Alto Downtown Urban Design Improvement Project for the University/Cowper intersection; Contribute $100,000 to the Downtown Parking Assessment District; and 15.Contribute toward the development of a shuttle bus service, such as the Marguerite Shuttle system, and provide a bus stop. The result of these improvements is the relocation of 22,120 square feet of office/retail space from below .ground to above ground, the construction of 34,544 square feet of new office space, the construction ofa 10,095-square-foot restaurant, and the addition of a 7,757-square- foot atrium, two 1,832-square-foot galleries, and two open air arcades. The total square footage to be added above ground is 74,516 square.feet. Rezoning to PC (Planned Community District.) and Statement of Public Benefit Since the subject project involves a rezoning from the CD-C to the PC District, the project applicant is required to present a statement identifying the proposed uses, the development schedule and the public benefits of the project. The project description presented by the project sponsor proposes a permitted use of retail/office. The construction schedule states that development would begin in August 1997, with completion by December 1998. Public Benefit Package A PC zone is required for this project because none of the City’s conventional zoning districts accommodate the existing and proposed square footage on the site, unless a significant variance were granted. Approval of the requested PC zone change would require that public benefit findings be made. The public benefits should go beyond the minimum zoning ordinance requirements and compliance with the Comprehensive Plan. Public policy in PC Zone change approvals has generally included the assumption that benefits should be commensurate or proportional with the request to exceed normal regulatory requirements. In this case, the applicant is requesting an additional 52,396 square feet above the existing ¯ square footage. The public benefit, according to the applicant, includes the following: The inherent public benefit of the project is the transformation of the underutilized plaza area by creating an enclosed atrium space and adding a large restaurant facility. Such a provision is called for in the Downtown Urban Design Guide. This benefit has CMR:350:96 Page 13 of 21 both an economic component (the tax revenues accruing to the City from the restaurant) and an intangible benefit (the use of the atrium for public functions and the multiplier effect of increased activity at the eastern end of the Downtown area). An additional inherent public benefit is the retrofit of an existing automobile-oriented building with architectural features that provide greater pedestrian appeal (retail store fronts, art gallery space, display windows, pedestrian arcade, street-facing entry). The project also includes monetary contributions to the Downtown Parking Assessment District and to Downtown Urban Design improvements. The public benefit package offered by the applicant can be broken down into component parts and analyzed in a future study, as follows: Value of the Atrium: The applicant estimates that the cost of adding the covered atrium is $300,000 and estimates that the value of public use of the space for 17 events per year is $408,000 over a ten-year period. There is also the intangib!e value of eliminating the wind tunnel effect in the existing plaza and providing an inviting space that will attract activities to this underutilized area. Value of the Restaurant: The cost of the restaurant improvements would be more than offset by the future revenue stream to theapplicant. However, the City would benefit from increased sales tax revenue from the restaurant and from the intangible value of increasing activities in the east end of the Downtown area. , Value of Converting Ground Floor Space to Retail: The costs of converting the ground floor of this large building designed for office use into ground floor retail space is considerable as is the value to the owner of lease payments for the new office space. Some of the conversion of ground floor space from office to retail use would constitute a public benefit and some of the space appears to be logical retail space, with its retail use having less public benefit value. In order to maximize the potential public benefit, in exchange for all or a portion of the new office space, the property owner may wish to provide incentives (such as reduced rents) to encourage certain publicly desirable uses that are lacking in this part of Downtown to locate in this building. On the revenue side, retail uses generally would generate greater tax revenues to the City than would office uses. As with the restaurant, the City would benefit from increased sales tax revenue from the retail uses and CMR:350:96 Page 14 of 21 from the intangible value of increasing activities in the east end of the Downtown area. Value of New Office Space: The applicant states that the cumulative value of public benefits generated by the project adequately compensates for the added private benefit gained from the lease value of the new office space. Conceivably, a similar public benefit package could be supported with the addition of less new space. The less the square footage added at this site, the more remains for other projects to build within the 350,000 square foot Downtown limit. Value of Ground Floor Pedestrian Improvements: The applicant estimates that the cost of providing 4,000 square feet of art gallery space that could otherwise be rented is $1.4 million overa ten-year period. The cost of the four glass pyramids is estimated at $180,000. With these improvements, the City would benefit from the. intangible value of improving the pedestrian environment in this part of the Downtown area. Value of contribution to Downtown Parking Assessment District: ’ The applicant is proposing to contribute $100,000 toward the Downtown Parking Assessment District. The $100,000 is proposed to be paid in yearly installments of $10,000. The net present value of this income stream is less than $100,000 in current dollars. This public benefit does not meet the in-lieu parking fees for the atrium space. In-lieu fees are required to be paid in one lump sum prior to the issuance of a building permit. If the valet parking proposals were determined to be unacceptable in this location or at this intensity, the parking deficit and normal in-lieu contribution would be sizable. Value of contribution to the Downtown Urban Design Improvement. Project: The applicant is proposing to contribute $150,000 to the Palo Alto Downtown Urban Design Improvement Project for the University/Cowper intersection. The $150,000 is proposed to be paid in yearly installments of $15,000. The net present value of this income stream is less than $150,000 in current dollars. If this application is pursued by the applicant, staff recommends that the project does not provide sufficient benefit. The possibility of providing additional public benefits should be considered by the applicant. These additional public benefits might include such items as: 1. Opening up part of the parking garage for public use during evening hours. CMR:350:96 Page 15 of 21 o o Donating the use of the atrium for public events on more than 17 occasions per year. Requiring retail uses on all or part of the ground floor space. Subsidizing ground floor rents for certain uses that are lacking in the area. Changing the type of Ground Floor Pedestrian Improvements to be consistent with the upcoming Downtown Improvement Committee recommendations. Increasing the contribution to the Downtown Parking Assessment District to reflect net present value and to pay an in-lieu fee to compensate for the parking spaces required for the atrium. Providing on-going funding for shuttle bus service between the University Avenue CalTrain station and the Downtown. Increasing the contribution toward Palo Alto Downtown Urban Design Improvement Project for the University/Cowper intersection to reflect net present value and to be consistent with the upcoming Downtown Improvement Committee recommendations. o Improve the existing method of freight loading (see attached memo from Carl Stoffel). Staffhas inventoried all the major PC (Planned Community) projects that have been adopted by the City over the past ten years in order to assess the relationship between square footage added and public benefit produced. The results of this study are summarized in Table 1. Generally, the greater the square footage added, the more significant the public benefit offered by the applicant. However, because of the varied nature of the projects that have been rezoned to PC and the variety of public benefits produced, it is difficult to make a statistical correlation between square footage and public benefit. Floor Area Precedent The proposed FAR of 4.3 is 43 percent above the CD Zone FAR limit of 3.0. Conceivably, the precedent set by this increase in FAR could encourage other property owners to seek rezonings to the PC district at higher FARs. The cumulative effect of this precedent, given the Downtown square footage limit, could be a perceived or real shift in policy toward concentrating future building activity within a few large projects at the expense of numerous smaller projects in the Downtown area. CMR:350:96 Page 16 of 21 Downtown Growth Limits The proposed addition of 52,396 square feet (44,639 square feet of building plus 7,757 square feet of atrium) would be well within the Downtown floor area limit but would constitute a large percentage (15 percent) of the total allocation and an even larger percentage (17 percent) of the remaining square footage. The central issue here isthe large amount of square footage being allocated to a single, large project rather than dispersing future square footage among many projects and locations. A central focus of the Downtown Urban Design Guidelines is to encourage pedestrian scale building and activities. On one hand, this proposal dramatically improves the pedestrian environment within this part of Downtown. On the other hand, the 52,396 square feet of new space at this location reduces the opportunity of other property owners to add smaller amounts of square feet within the Downtown growth limit. The latest Downtown Monitoring Report prepared in December of 1995 inventories building activity within the CD (Commercial Downtown) District from mid-1986 through mid-1995. During that period, there was a net addition of 37,718 square feet within the CD District compared to the 350,000-square-foot limit. Of the 32 construction and demolition projects, only two (250 University and 245 Lytton) exceeded 20,000 square feet of new space. The majority of projects added 5,000 square feet or less. Excluding the two years of the Downtown Moratorium from September 1984 through September 1986, building activity averaged about 4,200 square feet per year. At this rate, the remaining Downtown allocation: of 312,282 square feet would last 62 years. Even at a heightened pace of 10,000 square feet per year, the remaining Downtown al!ocation represents a 30-year supply. The main policy issue posed by this project is: Should one project consume 17 percent of the remaining Downtown allocation or should the allocation be distributed more uniformly among a greater number of projects and distributed among various Downtown locations? Traffic and Circulation This project is.within the study area of the Downtown Study and Citywide Land Use and Transportation Study Environmental Impact Reports. These reports evaluated impacts and mitigations for traffic impacts up to 350,000 square feet of development in the Downtown area. This project fits within the 350,000-square-foot cap in the Downtown area. But traffic monitoring for the University/Middlefield intersection shows that the counts for University Avenue fall slightly above those assumed in the Citywide EIR. On the other hand, the floor area monitoring for nonresidential development shows that added floor area is considerably below what was anticipated in the growth projections. Because the proposed project will add 15 percent of the allowable floor area to the Downtown, it raises questions that. smaller projects have not raised about the datedness of assumptions in the Citywide Study EIR for cumulative growth impacts along the University Avenue corridor. Staff finds that a more current environmental evaluation and model should be utilized in a focussed environmental CMR:350:96 Page 17 of 21 impact report for this project, or the project can be delayed until after the Sand Hill and Comprehensive Plan EIRs are adopted and the project proposal can rely on that updated traffic model for Downtown. The primary issue is not that of the impacts of this single project, which staff concludes are not significant, but the cumulative impacts of this project and others that will affect the University Avenue corridor through time. A traffic study was prepared by the applicant to identify traffic impacts of the project and should be evaluated in a focussed EIR prior to any consideration of this project. The applicant’s traffic study estimates that the current office building generates about 2,393 trips per day, whereas the proposed addition would generate 838 trips per day for a total of 3,231 trips. Peak hour trips Would increase from 331 to 379 in the morning and from 313 to 393 in the afternoon. The study concluded that there isthe potential for increased cut-through traffic on nearby residential streets, such as Everett and Hawthorne, north of the site; Webster and Cowper, north and south of the site; and Lytton and Guinda, east of the site. If as much as 50 percent of predicted traffic from this project were to leave the arterials and use the above streets, daily traffic volumes ranging from 80 to 100 vehicles would be added to the existing traffic volumes on these streets, which currently range from approximately 1,100 to 1,400 vehicles per day. According to the analysis in the study, the TIRE index (a measure of subjective impact of traffic flows on residents of residential streets), these increases would not be discernible to residents. The potential traffic impacts of the 7,757-square-foot atrium were not analyzed in the traffic study as it is difficult to estimate, prior to City review, when and how this facility will be used. Parking The traffic study also evaluates the need for additional parking generated by the building addition. Currently, there are 445 spaces allocated to the three buildings on three levels located underground (an additional 82 spaces are leased to Bank of America). The applicant calculates that 44,639 square feet of additional space (at one space per 250 square foot) generates the need for 179 additional spaces, minus 10 for shared parking, for a total of 169 spaces. The proposal suggests two alternate schemes for meeting this requirement, both of which rely heavily on valet parking.. Alternative 1 provides 183 new spaces and requires no more than three autos to be moved in front of a given space. Alternative 2 provides 191 spaces in a more orderly configuration, but requires four or five cars tobe moved in front of a given space. In either case, over 84 percent of spaces are valet spaces and the remainder. are self-park. Level A1 would remain a self-park area and the remaining floors will be a mix of valet and self-parking spaces. Although valet parking is currently used in a few facilities in Palo Alto (e.g., the Garden Court Hotel), the traffic consultants could not find a facility in the City that relied as CMR:350:96 Page 18 of 21 extensively on this scheme as the project proposal. Interviews were conducted with valet parking providers in San Francisco and determined that parking for 526 (or 534 in Alternative B) is feasible and works well in other cities. The additional time required to retrieve the car is compensated for by the convenience of being able to park within the building, rather than off-site. An issue not addressed by the study is the potential need to provide parking for the 7,757 square feet of atrium space. The Off-Street Parking Regulations require all uses within the Downtown University Avenue Parking Assessment Area to provide parking at the ratio of 1 per 250 square feet. The 7,757 square feet of atrium space, therefore, would require an additional 31 spaces above that provided in the application. Although the current proposal provides 14 spaces (in Alternative 1) or 22 spaces (Alternative 2) above that required for the office space, the additional spaces required to provide parking on-site for the atrium could not feasibly be accommodated within the existing structure, according to the applicant. Currently, the property owner is credited with providing 452 parking spaces on-site (of the 790 spaces required) and pays into the Downtown University Avenue Parking Assessment. District for the remaining 338 vehicles or 85,500 square feet ofbuilding floor area. The zoning ordinance requires that the applicant either provide the parking on-site or pay an in- lieu parking fee of $302,600 rather than the $100,000 that.is included in the application. The parking fee would be applied toward the construction of additional off-site parking instead of providing the parking on-site, pursuant to Chapter 16.57, In-Lieu Parking Fee for New Nonresidential Development in the Commercial Downtown (CD) Zoning District, of the Palo Alto Municipal Code (PAMC). Of note is that meeting the requirements of City regulations is not considered as part of the public benefit for a planned community zone. Currently, 16 Class III bicycle racks are provided in the parking garage. The Off-Street Parking Ordinance requires the provision of bicycle parking equal to 10 percent of the total number of parking spaces required or’61 bicycle spaces, of which 25 percent can be deferred. Of these, 40 percent shall be Class I and 60 percent shall be Class III racks. The number of spaces proposed is considerably less or will have to be increased to meet the required number. Most Class II and II parking should be distributed at the various public entrances on the ground level. Class I parking (lockers) may be located in the garage. ALTERNATIVES The altematives to the two presented in the staffrecommendation, per Section 18.97,040 of the Palo Alto Municipal Code, are that the City Council: Direct that the application retum to the City Council for a public study session, without prior Planning Commission and/or Architectural Review Board review; or CMR:350:96 Page 19 of 21 o Direct that the application return to the City Council for a joint public study session with the Planning Commission and/or any other City board, commission or committee whose participation is deemed desirable by the City Council. FISCAL IMPACT Should the applicant pursue project applications following the preliminary review process, the costs of processing the applications will be subject to the.full cost recovery fee schedule and will not result in any fiscal impact on the City. A fiscal analysis will be prepared for the project since it requires a significant zone change and amendment to the Comprehensive Plan. An outline of the issues to be covered in the fiscal assessment is included in the attached long-form CMR, Fiscal Impact Section. ENVIRONMENTAL ASSESSMENT Should the applicant pursue project applications, a focussed EIR will be required by staff. The EIR will evaluate the cumulative traffic and circulation impacts that result from a concentration of floor area in this portion of Downtown Palo Alto with other growth expected in the area, updating assumptions as to what was modeled in the Citywide Land Use and Transportation Study EIR. Visual and shadow impact assessment are other topics to be covered. STEPS FOLLOWING APPROVAL If the Council elects to initiate the preliminary review process, staff recommends that the application be scheduled, for a noticed public study session with the Planning Commission and the Architectural Review Board. Following completion of the public study sessions, the ’ application Will be scheduled for a study session by the City Council. No formal action will be taken by the City. City comments and feedback to the applicant will be summarized and presented in the Planning Commission and City Council minutes. If, following the preliminary review process, the applicant chooses to proceed, a zone change from CD-C (P) Commercial Downtown District & Pedestrian Shopping Combining District to the Planned Community (PC) District would be required. Staff recommends that a Comprehensive Plan text amendment would also be required for this proposal, as well as a focussed environmental impact report. ATTACHMENTS/EXHIBITS 1.Site Location Map 2.Memo from Carl Stoffel, Transportation Division, dated June 28, 1996 3.Table 1: Summary of Non-Residential PC Projects 4.Site Plan and Application Submittal Materials (Council Members only) CMR:350:96 Page 20 of 21 CC:Architectural Review Board Planning Commission Henry Gaw, 525 University Avenue, Palo Alto, CA 94301 Steve Player, 2600 E1 Camino Real #410, Palo Alto, CA 94306 Julie Maser, Hoover Associates, 1900 Embarcadero Road #200, Palo Alto, CA 94303 Chamber of Corr~merce Downtown North Neighborhood Association University Park Association University South Neighborhoods Group Crescent Park Neighborhood Association Downtown Urban Design Steering Committee Downtown Parking Structure Feasibility Study Steering Committee CMR:350:96 Page 21 of 21 Projeot: 525 Univereity Avenue Development Project Preliminar~y Review (Presereening) for a possible Comp. Plan Amendment, Zone ebange fro~ Commereial Downtown & Pedestrian Shopping District (CD-C(P)) to Planned Community (PC) & ’.onstruction of approx. 52,400sq.ft. office/com- mercial space addition & relocation of 22,200sq.ft of basement retail above grade to .an existing office/commercial building & related site improvements. 3437 PC PC-3499 File #: 96-DPR-1; 96-EIA-21 Date: 7-22-96 North 400 ft 5~ale: 1 inch = 200 ft M E M"O RAN D U M June 28, 1996 TO: FROM: Chandler Lee/Planning Division Carl Stoffel/~ransportation Division SUBJECT: Project ReviewComments for 525 Universi .ty Bicycle. parking is required at the rate of ten percent of the total number of parking spaces required, or 61 spaces, of which 25 percent can be deferred. The number of spaces proposed is considerably less. Most Class II and III parking should be distributed at the various public entrances on the ground level. Class I parking (lockers) may be located in the garage. Some of the Class I and II parking might be able to be located in public areas along nearby street frontages, where space is available, in order to serve other nearby businesses. The public benefit of funding extension of the noontime Marguerite service is a ’valuable offering. Some issues that need further analysis as part of possible implementation of this proposal are: locating a bus stop, matching the cost of extending the se~ice to the amount the applicant will provide, and working with the operator (Stanford University) to verify that such an extension is workable and is beneficial tO them. There are other shuttle-related options that might be desirable (for example, a shuttle to/from the CalTrain station or the Stanford Shopping Center), but these would likely cost more than extension of the existha, g midday Marguerite se~wice. The location of .the existing freight elevator on Tasso creates problems both for the eleva(or user(s) and the public stTeet users. As part of this project, a desirable public benefit would be to have the applicant design an improved way to load and unload freight. One possibility that involves changes only in the public right-of- way, is to have the applicant work with the City to fund and install a new parking and loading zone arrangement on Tasso StTeet, whereby a large loading zone would be created on the west side of Tasso next to the elevator. Another option C:\Wt~P RC\UNIV525,WPD 525 University Expansion June 28, 1996 Page 2 would be for the applicant to move the elevator to another more accessible location. If feasible, ADA-standard curb ramps are needed on the corner of Tasso and University, and perhaps other locations. This project is within the study area of the Downtown Study and Citywide Land Use and Transportation Study EIRs, which evaluated and considered impacts and mitigations for traffic impacts of up to 350,000 square feet Of development in the downtown area. This project fits within the 350,000 square-foot envelope and, therefore, requires no further environmental ta’affic analysis. Nevertheless, a traffic study was done to identify traffic impacts of the project. No significant impacts were found, either at intersections or on nearby residential streets. The study concluded that there is the potential for increased cut-ttu’ough traffic on nearby residential streets, such as Everett and Hawthorne north of the site, Webster and Cowper north and south of the site, and Lytton and Guinda east of the .site. If as much as 50 percent 0fpredicted traffic fi’om this project were to leave the arterials and use the above streets, daily ta’affic volumes ranging from 80 to. 100 vehicles would be added to the existing traffic volumes on these streets, which cun’ently range from approximately 1100 to 4000 vehicles per day. According to the analysis in the study, using the TIRE index (a measure of the subjective impact of ta’affic flows on residents of residential streets), these increases would not be discemable to residents. Valet parking is proposed to increase the parking capacity of the garage, and thus provide the required amount of parking. As valet parking is not pe~anitted by the zoning ordinance, special approval will be required. Valet parking has the advantage that it can substantially increase the number of parked cars in a given space. A disadvantage is that it is difficult for the City to be sure that the required number of spaces are actually being provided. Also, some people may not wish to park in a valet facility due to cQncems about cost and Security of the vehicle. These and a number of other issues will need to be discussed among staff.and with the applicant regarding this approach, before valet parking for this project can be finalized and approved: ao The success of this approach depends, in part, on having the proper number of valet parking attendants present. The applicant will have to workout an C:\W~PRC~UNIV525.WPD 525 University Expansion June 28, 1996 Page 3 agreement with the City that will insure, that this occurs. The agreement will include a monitoring program and reporting procedure to be conducted by a ta’affic engineer. The purpose of this program is to insure that all the parking spaces proposed and required are, in fact, available. bo Two valet parking schemes are offered.. Upon this first review, it appears that both are workable, and the final decision should be made once further discussion takes place on the valet parking issue. Co The applicant needs to show how the number of self-park spaces on Level A1 can be so greatly increased (from 56 to 102, without valet parking). A ~ drawing is needed that clearly shows the existing and proposed parking layouts onthis level. do The ta’affic study provides data showing that the parking demand of the existing office center is substantially less than what is required by the City code (page 23). Thus, without monitoring by the City, it is possible that the applicant could provide only the number of valet attendants sufficient to park the Office Center demand, but not to make available the remainder of the required spaces. It is in the City’s and public’s interests, to have all the required spaces available for use, even if they are not used by the Office Center, in order for the unused portion to be rented out to the public for short or long term parking. eo Pay parking, whether by a set fee char.ged, or tlu’ough tipping of valet attendants, is a desirable way to discourage driving, and is generally supported by the City. However, some employees and customers of the Office Center may be buying permits in City lots because it is cheaper to park there, and others may choose to park flee in residential areas. Future valet pat’king may als9 discourage some,people fi’om parking in the Office Center garage. This is another reason that it is important that all required spaces be accessible by having a properly-operated valet facility--other downtown employees and customers who may have difficulty finding spaces on-street or in City lots, could make use .Of the unused Office Center spaces, thus offsetting the impact of Office Center parkers not parking in their own facility. CS C:\WI~P RC’~UN 1V525.W P D Table 1: Summary of Non-Residential PC Projects, Square Footage Added, and Public Benefit Received 1986 - 1996 Project 483 University (PC4296) "former Cottonworks" Passed: October 2, 1995 400 Emerson (PC4238) Passed: October 11, 1994 4156-4160 & 4164 E1 Camino Real (PC4190) "Townhouse Motel" Passed: December 13,’ 1993 625 E1 Camino Real Holiday Inn (PC4182) Passed: November 8, 1993 531 Cowper (PC4052) Passed: SePtember 3, 1991 Square Footage Added 16,305 total s.f. 9,950 exist s.f. 6,305 new s.f. 3,467 s.f. above CD-C zoning 8,110 total s.f. (5,833 new s.f. plus one residential unit) All of the square footage would be allowed in the CD Zone 15 new motel units Retention of 343 motel units; No new s.f. added 15,942 total s.f. 7,508 existing 7,917 s.f. above CD zone Public Benefit Received 1. Architectural statement on comer of University/Cowper 2. Sidewalk brick pavers along Cowper frontage 3. $100,000 to University/Cowper intersection street furniture 4. Art work on building exterior 1. Addition of one residential unit in a mixed use building 2. Public drinking fountain and art niche 1. Parcel merger improves site 2. Retains MF zoning for future housing 3. Closing the driveway improves traffic flow 1. Upgrading of Cowper Street entry to garage 2. $150,000 to Child Care Trust fund 1. Tax revenue 2.13 kitchenettes worth $1,900 3. Multiplier effect to adjacent businesses 4. Public parking for downtown Table 1: Summary of Non-Residential PC Projects, Square Footage Added, and Public Benefit Received 1986 - 1996 529 Bryant & 251 University "Fidelity Building" (PC3974) Passed: August 6, 1990 250, 262, 266 University (PC3872) "Plaza Ramona" Passed: May 15, 1989 45,600 total s.f. 43,100 existing 2,520 new s.f. 2,520 s.f above CD-C zoning 41,500 total s.f. 20,000 new s.f. 8,500 s.f. above CD-C zoning 1. Improvements to Civic Center Plaza 2. Preservation of two historic buildings 3. Elimination of 3,300 sf of floor area at 251 University 3. Street trees, tree grates and alley improvements 4. Recycling containers for downtown businesses 1. Addition of 23 public parking spaces in the Downtown area above that required 2.62 space underground public parking level 3. Upgrading Ramona/Bryant/Hamilton alleys with pedestrian amenities (paving, lighting, landscaping) 4. Central public plaza at intersection of the alleys 5. Spanish Colonial Revival project consistent with Ramona Street Architectural District