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HomeMy WebLinkAbout2017-01-11 Planning & transportation commission Agenda Packet1.Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2.The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3.The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Updated: Planning & Transportation Commission Regular Meeting Agenda: January 11, 2017 Council Chambers 250 Hamilton Avenue 6:00 PM Call to Order / Roll Call Oral Communications The public may speak to any item not on the agenda. Three (3) minutes per speaker.1,2 Agenda Changes, Additions, and Deletions The Chair or Commission majority may modify the agenda order to improve meeting management. City Official Reports 1.Assistant Director's Report, Meeting Schedule and Assignments Study Session Public Comment is Permitted. Five (5) minutes per speaker.1,3 Action Items Public Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal. All others: Five (5) minutes per speaker.1,3 2.PUBLIC HEARING / QUASI-JUDICIAL MATTER. 670 Los Trancos Road [16PLN-00266]: Site and Design Review to Allow the Construction of a Single Family House and Guest House With a Total of 10,959 Square Feet. Environmental Assessment: Categorically Exempt From the California Environmental Quality Act (CEQA) Pursuant to Guidelines Section 15303 (New Construction or Conversion of Small Structures). Zoning District: OS 3.Recommendation to the City Council for the Adoption of an Ordinance Making Permanent Interim Urgency Ordinance 5330 (Limiting the Conversion of Ground Floor Retail and Retail Like Uses), With Some Modifications; Extending the Ground Floor Combining District to Certain Properties Located Downtown and in the South of Forest Avenue Coordinated Area Plan; Modifying the Definition of Retail; Adding Regulations to Improve Pedestrian Oriented Design Standards; and Related Changes. The Proposed Ordinance is Exempt from the California Environmental Quality Act (CEQA) Per Section 15308. Continued from 12/14/16 Meeting 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 11/30/16 Draft Minutes 12/14/16 Draft Minutes Approval of Minutes Public Comment is Permitted. Five (5) minutes per speaker.1,3 4. November 30, 2016 and December 14, 2016 Draft Planning & Transportation Commission Meeting Minutes Committee Items Commissioner Questions, Comments or Announcements Adjournment 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Palo Alto Planning & Transportation Commission Commissioner Biographies, Present and Archived Agendas and Reports are available online: http://www.cityofpaloalto.org/gov/boards/ptc/default.asp. The PTC Commission members are: Chair Michael Alcheck Vice Chair Asher Waldfogel Commissioner Przemek Gardias Commissioner Ed Lauing Commissioner Eric Rosenblum Commissioner Doria Summa Get Informed and Be Engaged! View online: http://midpenmedia.org/category/government/city-of-palo-alto or on Channel 26. Show up and speak. Public comment is encouraged. Please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Commission Secretary prior to discussion of the item. Write to us. Email the PTC at: Planning.Commission@CityofPaloAlto.org. Letters can be delivered to the Planning & Community Environment Department, 5th floor, City Hall, 250 Hamilton Avenue, Palo Alto, CA 94301. Comments received by 2:00 PM the Tuesday preceding the meeting date will be included in the agenda packet. Comments received afterward through 2:00 PM the day of the meeting will be presented to the Commission at the dais. Material related to an item on this agenda submitted to the PTC after distribution of the agenda packet is available for public inspection at the address above. Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service. Planning & Transportation Commission Staff Report (ID # 7605) Report Type: City Official Reports Meeting Date: 1/11/2017 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: City Official Report Title: Assistant Director's Report, Meeting Schedule and Assignments From: Hillary Gitelman Recommendation Staff recommends that the Planning and Transportation Commission (PTC) review and comment as appropriate. Background This document includes the following items:  2016 and 2017 PTC Meeting Schedule  PTC Representative to City Council (Rotational Assignments)  Tentative Future Agenda Commissioners are encouraged to contact Yolanda Cervantes (Yolanda.Cervantes@CityofPaloAlto.org) of any planned absences one month in advance, if possible, to ensure availability of a PTC quorum. PTC Representative to City Council is a rotational assignment where the designated commissioner represents the PTC’s affirmative and dissenting perspectives to Council for quasi- judicial and legislative matters. Representatives are encouraged to review the City Council agendas (http://www.cityofpaloalto.org/gov/agendas/council.asp) for the months of their respective assignments to verify if attendance is needed or contact staff. Prior PTC meetings are available online at http://midpenmedia.org/category/government/city-of-palo-alto/boards- and-commissions/planning-and-transportation-commission. The Tentative Future Agenda provides a summary of upcoming projects or discussion items scheduled to be heard before the PTC. These dates are tentative and may be adjusted. City of Palo Alto Planning & Community Environment Department Page 2 Attachments:  1/11/17 2017 PTC Meeting Schedule & Assignments-Attach (DOCX) Planning & Transportation Commission 2017 Meeting Schedule & Assignments 2017 Schedule Meeting Dates Time Location Status Planned Absences 1/11/2017 6:00 PM Council Chambers Regular 1/25/2017 6:00 PM Council Chambers Regular 2/8/2017 6:00 PM Council Chambers Regular 2/22/2017 6:00 PM Council Chambers Regular 3/8/2017 6:00 PM Council Chambers Regular 3/29/2017 6:00 PM Council Chambers Regular 4/12/2017 6:00 PM Council Chambers Regular 4/26/2017 6:00 PM Council Chambers Regular 5/10/2017 6:00 PM Council Chambers Regular 5/31/2017 6:00PM Council Chambers Regular 6/14/2017 6:00 PM Council Chambers Regular 6/28/2017 6:00 PM Council Chambers Regular 7/12/2017 6:00 PM Council Chambers Regular 7/26/2017 6:00 PM Council Chambers Regular 8/09/2017 6:00 PM Council Chambers Regular 8/30/2017 6:00 PM Council Chambers Regular 9/13/2017 6:00 PM Council Chambers Regular 9/27/2017 6:00 PM Council Chambers Regular 10/11/2017 6:00 PM Council Chambers Regular 10/25/2017 6:00 PM Council Chambers Regular 11/08/2017 6:00 PM Council Chambers Regular 11/29/2017 6:00 PM Council Chambers Regular Subject to Cancellation 12/13/2017 6:00 PM Council Chambers Regular 12/27/2017 6:00 PM Council Chambers Regular Subject to Cancellation 2017 Assignments - Council Representation (primary/backup) January February March April May June July August September October November December Subcommittees Comp Plan CAC: Planning & Transportation Commission Tentative Future Agenda Meeting: January 25, 2017 Meeting: February 8, 2017 Doc ID Short Title Placement 6748 Comprehensive Plan Update Study Session 7156 Review Downtown Parking Management Study Study Session Doc ID Short Title Placement 7316 Castilleja EIR Scoping Meeting Public Hearing 7619 693 Arastradero Prelim Map w/Exceptions Public Hearing Planning & Transportation Commission Staff Report (ID # 7451) Report Type: Action Items Meeting Date: 1/11/2017 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: 670 Los Trancos: New Single Family Residence Title: PUBLIC HEARING / QUASI-JUDICIAL MATTER. 670 Los Trancos Road [16PLN-00266]: Site and Design Review to Allow the Construction of a Single Family House and Guest House With a Total of 10,959 Square Feet. Environmental Assessment: Categorically Exempt From the California Environmental Quality Act (CEQA) Pursuant to Guidelines Section 15303 (New Construction or Conversion of Small Structures). Zoning District: OS From: Hillary Gitelman Recommendation It is recommended that the Planning and Transportation Commission (PTC) take the following action(s): 1. Continue the project to a date uncertain with guidance to the applicant regarding strategies to better comply with applicable findings. Report Summary The applicant proposes to construct a two-story single family house, detached guest house, and associated site improvements on the undeveloped property located at 670 Los Trancos Road. The site is located in the Open Space (OS) zoning district, which permits limited housing development. The proposed house is 9,363 square feet, not including approximately 2,100 square feet of exempt basement area, and the proposed detached guest house is 1,596 square feet. Development in excess of 1,000 square feet and requires PTC review of the Site and Design Review application. The Commission’s recommendation will be forwarded to the City Council. Attachment A provides four objectives included in Palo Alto Municipal Code (PAMC) Section 18.30(G).060 for Site and Design Review approval for the Planning and Transportation Commission to review and apply toward the project. City of Palo Alto Planning & Community Environment Department Page 2 In addition to these Site and Design Review objectives, PAMC Section 18.28.070 (p) codifies twelve Open Space Development Review Criteria that are applicable to the project. These criteria are also included in Attachment A. While the project does incorporate a variety of measures to be compatible with environmental and ecological objectives of the open space district, staff is concerned that the residence could be perceived as visually intrusive from public roadways and public parklands. Background Project Information Owners: Noa Grant and Guy Gecht Architect: Michael Anglisano; McClean Design Representative: N/A Legal Counsel: N/A Property Information Address: 670 Los Trancos Road Neighborhood: Palo Alto Hills Lot Dimensions & Area: 5.42 acres (235,898 sf) Housing Inventory Site: No Located w/in a Plume: No Protected/Heritage Trees: Yes, protected live and valley oaks are present across the property Historic Resource(s): No Existing Improvement(s): Vacant lot Existing Land Use(s): Vacant lot Adjacent Land Uses & Zoning: North: Arastradero Preserve, Public Facilities (Site and Design Combining) District West: Single Family Residence, Open Space District East: Vacant, Open Space District South: Single Family Residence, Open Space District Special Setbacks: Not applicable Aerial View of Property: City of Palo Alto Planning & Community Environment Department Page 3 Aerial Photograph Source: Google Maps Land Use Designation & Applicable Plans/Guidelines Zoning Designation: Open Space District (OS) Comp. Plan Designation: Open Space / Controlled Development Open Space Development Review Criteria Yes Context-Based Design: Not applicable Downtown Urban Design: Not applicable SOFA II CAP: Not applicable Baylands Master Plan: Not applicable ECR Guidelines ('76 / '02): Not applicable Proximity to Residential Uses or Districts (150'): Not applicable Located w/in AIA (Airport Influence Area): Not applicable City of Palo Alto Planning & Community Environment Department Page 4 Prior City Reviews & Action City Council: Variance 86-V-22, which provides a maximum impervious cover of 15,050 square feet on the subject site PTC: None HRB: None ARB: None Site and Project Description The subject site encompasses 5.42 acres (235,898 square feet) of vacant land currently covered by native grasses and oak forest. The topography varies greatly across the site, with a knoll rising near the southern front property line near the Los Trancos Road frontage. From the top of this knoll, the elevation drops over 100 feet towards the northern rear property line bordering the Arastradero Preserve. The top of knoll and most of the higher areas of the property are covered with grasses, while two large groves of live and valley oaks are located on either side of the property and in the northern, lower elevations. The site is located in the Hewlett Tract, a subdivision encompassing ten building sites of which five have thus far been developed. According to Santa Clara County records, the houses in the subdivision range from 3,344 to 8,911 square feet in floor area, and four of the five houses contain two stories. The applicant proposes to construct a 9,363 square foot two-story residence with a basement, as well as a 1,596 square foot detached guest house. Access to the main residence and guest house would be from a single entrance on Los Trancos Road. The main residence would be situated on the downslope, and would, to some extent, be tucked up against the hillside. The garage and two other single-floor elements totaling approximately 1,915 square feet of the gross floor area of the main residence contain green roofing systems that will support native vegetation, allowing these elements to be integrated with the post-grading contours of the hillside and lending the appearance of a subterranean structure from some vantage points. The guest house will be situated to the western side of the lot, and connected to the main residence by a dirt trail. For zoning purposes, the guest house is considered an accessory structure and use rather than a second dwelling unit due to the absence of a full kitchen with cooking facilities. As of the writing of this report, accessory dwelling units are only permitted in the Open Space District on properties in excess of 10 acres. However, it is understood that minimum lot sizes for accessory dwelling units may be subject to change in the future. The exterior siding materials include stone, plaster, and wood siding with muted colors, and the main elements of the roof would be a black standing seam metal. Development Standards The property is one of ten residential building sites which, in addition to two Common Areas, encompass a subdivision known as the “Hewlett Tract” (“Tract”). At the time that the Hewlett Tract tentative subdivision map was approved by City Council on August 18, 1980, the Open Space District restricted residential density to one dwelling unit for every ten acres, and City of Palo Alto Planning & Community Environment Department Page 5 required a corresponding ten-acre minimum lot size. However, due to the slope constraints present on the land encompassing the 129-acre Tract, the allowable density of the original parcel was transferred to ten clustered building sites ranging from 3.9 to 6.0 acres. The remaining areas of the Tract were then recorded as dedicated common open space areas (owned in common by the owners of the building sites), and another portion of the Tract was dedicated to the City of Palo Alto for parkland. The current code no longer has an explicit maximum residential density in the Open Space District, but does retain the ten acre minimum lot size requirement. When the Hewlett Tract subdivision was approved by the City Council in 1980, the most limiting development standard was a maximum impervious and building coverage standard of 3.5% of site area. As remains the case to the present, this impervious area standard included building coverage, retaining walls, patios, and other impervious areas. To incentivize the clustering concept of the Hewlett Tract, the impervious area allotments from Common Area A and the parkland dedication area were transferred to Common Area B (for a tennis court) and to the building sites. In effect, each of the ten building sites was treated as a 10 acre site for the purpose of applying the maximum allowable coverage, which was 15,246 square feet. Ordinance #3345, passed by the City Council in 1982, amended this standard to require the transfer of impervious coverage from open space-restricted areas of a “subdivision with clustered lots less than 10 acres in size” to the building sites in a proportional manner based on lot size. This code change increased the maximum impervious coverage on the subject site to 17,401 square feet. However, the original design intent with the Hewlett Subdivision had been to allocate equivalent impervious coverage across the ten building sites, and a variance was granted in 1986 to relieve the Hewlett Tract building sites from the proportional impervious requirement in favor of the equivalent impervious allocations that were originally intended. This variance thus provided the subject site with a maximum impervious coverage of 15,050 square feet, subject to revision through Site and Design Review. In 2009, Ordinance #5062 added a maximum Floor Area Ratio (FAR) standard for single family houses proposed in the Open Space District, allowing for a floor area bonus if the majority of native vegetation on the site is retained or replaced. Gross floor area for houses in the Open Space District is calculated using the same inclusion and exclusion methods for single family residential development in the R-1 Zoning Districts. Requested Entitlements, Findings and Purview: The following discretionary applications are being requested and subject to PTC purview:  Site and Design: The process for evaluating this type of application is set forth in PAMC 18.30(G). Site and design is intended to provide a review process for development in environmentally and ecologically sensitive areas, including established community areas which may be sensitive to negative aesthetic factors, excessive noise, increased traffic or other disruptions, in order to assure that use and development will be harmonious with other uses in the general vicinity, will be compatible with environmental and ecological objectives, and will be in accord with the Palo Alto Comprehensive Plan. If recommended for approval, the project is forwarded to the City Council for final action City of Palo Alto Planning & Community Environment Department Page 6 of all requested entitlements. Site and design applications are evaluated to specific findings. All findings must be made in the affirmative to approve the project. The findings to approve a site and design application are provided in Attachment A. Analysis1 Views, Neighborhood Setting, and Character The subject property is constrained by the down-sloping grade, which affords views of the Santa Clara Valley while also revealing some direct views of the site from the Arastradero Preserve, including from Meadowlark Trail. The degree of the visibility is somewhat muted by the placement of the main residence below the top of the knoll. However, story poles erected to simulate the building envelopes indicate that the main residence would be silhouetted against the sky from the perspective of the trail below. Additionally, some portions of the second story of the main house would also be visible from Los Trancos Road despite the siting of the house on the north side of the knoll. The project design has taken into account the slope constraints and utilized many strategies for minimizing the potential visual impact by presenting a horizontal orientation to the house, tucking portions of the house into the hillside, and hiding the guest house from the northern perspective. However, the absence of tree cover in the immediate vicinity of the main house leaves it more conspicuous than others in the Hewlett Tract, which contain oak forests along the northern face of the hill that screen the houses along the ridge. This relatively barren landscape on the subject site also limits the efficacy of limiting the total house height to that of the top of the knoll, as the house appears to protrude above the ridge when viewed from below. Commissioners are encouraged to review Attachment A, which contains the findings required to recommend approval of the project to Council. Tree Protection An arborist’s report was prepared with the application, and provides a survey of the species, diameter, and health of the trees in the vicinity of the construction. There are twenty-eight protected live and valley oaks on the property that would form the perimeter of an extended Tree Protection Zone, which would separate the construction activities from the oak and buckeye groves. One valley oak in the center of the site is proposed for removal due to decay and its precarious location near a portion of the home. As mitigation for the removal of the valley oak, ten blue oak trees are proposed to be planted on the perimeter of the property, including six downslope from the main residence. Each of the trees is required to be 6 feet in crown diameter at the time of planting. 1 The information provided in this section is based on analysis prepared by the report author prior to the public hearing. Planning and Transportation Commission in its review of the administrative record and based on public testimony may reach a different conclusion from that presented in this report and may choose to take an alternative action from the recommended action. City of Palo Alto Planning & Community Environment Department Page 7 Zoning Compliance2 A detailed review of the proposed project’s consistency with applicable zoning standards has been performed. A summary table is provided in Attachment B. As proposed, the project complies with all applicable codes, or is seeking through the requested permits permission to deviate from certain code standards, in a manner that is consistent with the Zoning Ordinance. The impervious cover area of 15,089 square feet shown in the project plans would exceed the amount permitted subject to Variance 86-V-22, which provides a maximum of 15,050 square feet for the site. However, it appears as though the water surface of the swimming pool has been included in the impervious calculation unnecessarily (PAMC 18.28.070(m)(6)), and therefore the project is compliant with the maximum impervious cover standard as designed. Consistency with the Comprehensive Plan, Site and Design Findings, and Open Space Development Criteria3 The Comprehensive Plan contains Goals, Policies, and Programs for the Open Space areas of the City. The applicable Comprehensive Plan sections, including the Open Space Development Criteria, are included in Attachment A. The story poles described on the previous page indicate that the house would be visible from certain points in the Arastradero Preserve, and accordingly, staff is concerned with the project’s consistency with the first Development Criterion, which seeks to minimize visual impacts. Additionally, while the project has been designed not to extend above the top of the knoll as suggested by the second Development Criterion, the second story of the house would be silhouetted against the sky when viewed from some locations in the Arastradero Preserve. These two criteria are related to the first Site and Design Review finding regarding the compatibility of uses of adjoining or nearby sites. Images of the site from various perspectives are provided in Attachment F. Additionally, it is anticipated that the applicant will provide a presentation showing the development in context to the surroundings. Environmental Review The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, the project is categorically exempt per Section 15303 of the CEQA Guidelines, which includes but is not limited to the development of one single family residence, or a second dwelling unit in a residential zone, as well as accessory or appurtenant structures including garages, carports, patios, swimming pools, and fences. Staff finds that the development of a single family house and guest house in a residential subdivision in the Open Space, which permits single family use, is substantially similar to the examples included in Section 15303 of the CEQA Guidelines. 2 The Palo Alto Zoning Code is available online: http://www.amlegal.com/codes/client/palo-alto_ca 3 The Palo Alto Comprehensive Plan is available online: http://www.cityofpaloalto.org/gov/topics/projects/landuse/compplan.asp City of Palo Alto Planning & Community Environment Department Page 8 Public Notification, Outreach & Comments The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper and mailed to owners and occupants of property within 600 feet of the subject property at least ten days in advance. Notice of a public hearing for this project was published in the Palo Alto Weekly on December 23, 2016, which is 19 days in advance of the meeting. Postcard mailing occurred on December 20, 2016, which is 22 days in advance of the meeting. Public Comments As of the writing of this report, three project-related public comments were received and are included with Attachment D. Two comments expressed support for the project. A third comment expressed concerns about the impacts of the house on the views from the Arastradero Preserve from the Acorn Trail, which is situated to the northeast of the site. Alternative Actions In addition to the recommended action, the Planning and Transportation Commission may: 1. Direct staff to prepare a draft Record of Land Use Action recommending approval of the project based on findings that the project is consistent with the Site and Design Objectives and Open Space Development Criteria; 2. Direct staff to prepare a draft Record of Land Use Action recommending denial of the project based on findings that the project is inconsistent with the Site and Design Objectives and Open Space Development Criteria. Report Author & Contact Information PTC4 Liaison & Contact Information Graham Owen, Associate Planner Jonathan Lait, AICP, Assistant Director (650) 329-2552 (650) 329-2679 graham.owen@cityofpaloalto.org jonathan.lait@cityofpaloalto.org 4 Emails may be sent directly to the PTC using the following address: planning.commission@cityofpaloalto.org Attachment A Page 1 of 2 Site and Design Review Findings 1. The use will be constructed and operated in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites. 2. The project is consistent with the goal of ensuring the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas. 3. Sound principles of environmental design and ecological balance are observed in the project. 4. The use will be in accord with the Palo Alto Comprehensive Plan. Applicable Policies in the Comprehensive Plan Policy L-1: The Comprehensive Plan encourages the preservation of undeveloped land west of the Foothill Expressway and Junipero Serra as open space, with allowances made for very low-intensity development consistent with the open space character of the area. Policy L-5: The Comprehensive Plan states to maintain the scale and character of the City. Avoid land uses that are overwhelming and unacceptable due to their size and scale. Policy L-69: Preserve the scenic qualities of Palo Alto’s roads and trails for motorists, cyclists, pedestrians, and equestrians. Policy N-7: All development in the foothill portion of the Planning Area should be consistent with the City of Palo Alto Open Space development Criteria. Open Space Review Criteria 1. The development should not be visually intrusive from public roadways and public parklands. As much as possible, development should be sited so it is hidden from view. 2. Development should be located away from hilltops and designed to not extend above the nearest ridgeline. 3. Site and structure design should take into consideration impacts on privacy and views of neighboring properties. 4. Development should be clustered, or closely grouped, in relation to the area surrounding it to make it less conspicuous, minimize access roads, and reduce fragmentation of natural habitats. 5. Built forms and landscape forms should mimic the natural topography. Building lines should follow the lines of the terrain, and trees and bushes should appear natural from a distance. Attachment A Page 2 of 2 6. Existing trees with a circumference of 37.5 inches, measured 4.5 feet above the ground level, should be preserved and integrated into the site design. Existing vegetation should be retained as much as possible. 7. Cut is encouraged when it is necessary for geotechnical stability and to enable the development to blend into the natural topography. Fill is generally discouraged and should never be distributed within the driplines of existing trees. Locate development to minimize the need for grading. 8. To reduce the need for cut and fill and to reduce potential runoff, large, flat expanses of impervious surfaces should be avoided. 9. Buildings should use natural materials and earthtone or subdued colors. 10. Landscaping should be native species that require little or no irrigation. Immediately adjacent to structures, fire retardant plants should be used as a fire prevention technique. 11. Exterior lighting should be low-intensity and shielded from view so it is not directly visible from of-site. 12. Access roads should be of a rural rather than urban character. (Standard curb, gutter, and concrete sidewalk are usually inconsistent with the foothills environment). 13. For development in unincorporated areas, ground coverage should be in general conformance with Palo Alto's Open Space District regulations. Hewlett Station 120.1' 67.8' 88.2' 67.8' 104.7' 445.0' 47.4' 217.8' 446.6' 235.2' 353.5' 473.1' 120.1' 104.7' 47.4' 182.0' 19.8' 119.7' 446.6' 235.2' 353.5' 291.7' 88.2' 217.9' 301.7' 58.6' 463.1' 77.7' 174.2' 222.5' 68.7' 156.6' 337.5' 291.7' 71.1'9.7'254.5'18.2'98.1'3.9' 591.6' 66.0' 212.4' 222.5' 19.1' 165.2' 150.0' 585.0' 304.0' 123.2' .9' 591.6' 95.7' 24.1' 57.3' 79.6' 58.4'39.8' 50.0' 733.2' 585.0' 150.0' 279.6' 100.8' 39.8'21.7' 58.6' 301.7' 217.9' 733.2' 36.7' 82.0' 57.3'24.1' 94.4 183.4' 432.3' 463.1' 165.2' 279.6' 100.8' 39.8'21.7'36.7'82.0' 57.3'24.1' 94.4' 95.7' 24.1' 57.3' 79.6' 58.4'39.8' 50.0' 183.4' 432.3' 77.7' 174.2' 222.5' 68.7' 156.6' 19.3' 182.0'19.8'19.1' 222.5' 212.4' 304.0' 240.6' 194.0194.0 240.6' 123.2' .9'3.9'98.1'18.2'254.5'9.7'71.1' 473.1' This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc Known Structures Zone Districts abc Zone District Notes abc Dimensions (AP) 670 Los Trancos Road abc Zone District Labels 40 ft Contour Line 0' 200' 670 Los Trancos Road CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2016 City of Palo Alto gowen, 2016-12-21 16:47:35 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) ATTACHMENT B ZONING COMPARISON TABLE 670 Los Trancos Road 16PLN-00266 Table 1a: COMPARISON WITH CHAPTER 18.28 (OS DISTRICT) OS Residential Development Standards Regulation Required Existing Proposed Minimum Site Area, Width and Depth Area: 10 acres Width: No standard Depth: No standard Area: 5.42 acres Width: 288 feet Depth: 628 feet No change Front Yard 30 feet N/A 130 feet for main house, 62 feet for guest house Street Side Yard 30 feet N/A N/A Rear Yard 30 feet N/A 224 feet for main house, 340 feet for guest house Interior Side Yard 30 feet N/A R: 58 feet, L: 176 for main house; R: 288 feet, L: 85 feet for guest house Max. Building Height 25 feet average height of the highest gable N/A 25 feet average height for the highest gable Maximum Impervious Coverage 15,050 sf (Per Variance 86-V-22) N/A 15,089 sf (to be reduced per Conditions of Approval) Max. Total Floor Area Ratio 4% (9,444 sf) for a 5.42 acre site, or 5% (11,804 sf) with FAR bonus N/A 4.6% (10,862 sf) with FAR bonus Native Vegetation Retained or Restored (for FAR bonus) ≥ 90% of site area N/A 91.4% of site area Table 1b: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) Single Family Residential Uses (Tandem Parking Allowed) Type Required Existing Proposed Vehicle Parking 4 spaces, of which one must be covered N/A 4 covered spaces From:Allan Alcorn To:Owen, Graham Subject:670 Los Trancos Rd project Date:Thursday, December 29, 2016 2:53:49 PM Dear Sirs and Madam, I am writing this in support of the proposed new home at 670 Los Trancos Rd. I live at 660 LosTrancos Rd directly adjacent to the proposed new home and welcome their project. The lot has beenvacant as long as we have been there and we knew that some day there would be a home built on thatsite. We have examined the plans and are pleased that such a beautiful home is going to be builtthere. It is clear that significant effort was spent in making the home have as little impact as possibleand will fit into the natural environment. I am a frequent visitor to Arastradero Open Space; I walk the trails about once a week and I am veryfamiliar with the views. Compared to the existing structures on the ridge, mine included, that can onlybe seen from the Martin’s trail I think this building will be less visible and blend in well. Much of thestructure will be hidden by trees and some of it is underground. I support this proposal and look forward to its approval. Sincerely, Allan Alcorn 660 Los Trancos Rd. Portola Valley, CA 94028 From:H. Grousbeck To:Planning Commission; Owen, Graham Subject:Fwd: Happy Holidays! Date:Wednesday, December 28, 2016 12:12:00 PM ---------- Forwarded message ----------From: H. Grousbeck Date: Wed, Dec 28, 2016 at 10:01 AM Subject: Fwd: Happy Holidays!To: "H. Grousbeck" ---------- Forwarded message ----------From: H. Grousbeck Date: Wed, Dec 28, 2016 at 9:59 AM Subject: Fwd: Happy Holidays!To: "H. Grousbeck" ---------- Forwarded message ----------From: H. Grousbeck Date: Wed, Dec 28, 2016 at 9:56 AM Subject: Fwd: Happy Holidays!To: "H. Grousbeck" Dear Palo Alto Planning Commissioners: As residents of Palo Alto abutting Arastradero Preserve for the last 30 years , w e havebeen strong advocates of Bay Area open space . For many years I (Susanne) was a member of the POST board of directors. It is against this background that we are writing in support of the Gechts' proposeddevelopment at 670 Los Trancos. We will be neighbors 2 lots away when (hopefully) theirproposed house is completed. Noa and Guy Gecht have engaged our entire neighborhood in their design process from the very beginning. It is clear that t hey were determined to spend the time and r esources to come up with an organicdesign that minimizes the impact to the Preserve as well as to the neighborhood.We are very impressed with their thoughtfulness: most of the house is tucked intothe knoll, and they placed as much of the construction as possible behind the trees.As a result the facade will be partially visible only from very small sections of thetrail paths. We respectfully encourage you to approve this responsible and considerate design. Kind regards, Susanne and H. Irving Grousbeck 706 Los Trancos Road From:Planning Commission To:Owen, Graham Subject:FW: Please do not allow new construction above Arastradero Preserve Date:Tuesday, December 20, 2016 10:27:04 AM Yolanda M. Cervantes Planning & Community EnvironmentCity of Palo Alto Yolanda.cervantes@cityofpaloalto.org650.329.2404 From: Kim Atkinson Sent: Thursday, December 15, 2016 5:05 PMTo: Planning CommissionCc: Dunn, CurtSubject: Please do not allow new construction above Arastradero Preserve Hello Palo Alto Planning Commission, I am a lifelong resident of Palo Alto, a homeowner, taxpayer, and we have raised our children here. We have supported the public schools, have led a Girl Scout troop, volunteered, and have been good community members. Ie, we have a long-term stake in this place, and hopefully may have a voice ! We are frequent hikers at Arastradero Preserve (as well as at Foothill Park). Recently at Arastradero, while hiking west towards the top of the hill, near a trail junction at the top of Acorn Trail, I noticed red construction marker flags higher up in the direction towards Foothill Park. Apparently a home is planned for construction there. Please see attached photos, taken from the top of Acorn Trail. As I understand it, this planned new house construction is in the 700 block of Los Trancos Road. I would like to oppose this new house construction. It will affect the view of the hills and of the skyline at Arastradero Preserve, when one is hiking uphill and west. A new building there will make the preserve feel more closed in, or hemmed in, whereas now it feels fairly open and natural, with a great sky view above the highest hills. There are a few existing houses in this area, but we are used to them being tucked in low among the trees and don't notice them. They are not very visible the way this new one will be. The preserve is already encircled by a golf course, existing homes, and has an occasionally-audible pump in it near the lake. When we hike up there, it is our chance to "get away" from urban stressors and traffic, and to enjoy nature and wildlife and sky views. If you allow that house to be constructed directly in our sight-line as we climb west up that hill, the natural feel of this wilderness preserve will be spoiled. This house will serve a very priviledged few, at the expense of many people who go up there to enjoy nature. Re Palo Alto's housing shortage-- this single family dwelling will not put a dent in the problem, but will affect many park users. Please do not allow this construction to go forward. Thank you for your time and attention to this letter, Kim Atkinson 1753 Middlefield Road Palo Alto 94301 Attachment E Project Plans Hardcopies of project plans are provided to PTC Members. These plans are available to the public by visiting the Planning and Community Environmental Department on the 5th floor of City Hall at 250 Hamilton Avenue. Directions to review Project plans online: 1. Go to: https://paloalto.buildingeye.com/planning 2. Search for “670 Los Trancos Road” and open record by clicking on the green dot 3. Review the record details and open the “more details” option 4. Use the “Records Info” drop down menu and select “Attachments” 5. Open the attachment named “12/12/2016 Project Plans” Planning & Transportation Commission Staff Report (ID # 7610) Report Type: Action Items Meeting Date: 1/11/2017 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: Retail Preservation Ordinance Title: Recommendation to the City Council for the Adoption of an Ordinance Making Permanent Interim Urgency Ordinance 5330 (Limiting the Conversion of Ground Floor Retail and Retail Like Uses), With Some Modifications; Extending the Ground Floor Combining District to Certain Properties Located Downtown and in the South of Forest Avenue Coordinated Area Plan; Modifying the Definition of Retail; Adding Regulations to Improve Pedestrian Oriented Design Standards; and Related Changes. The Proposed Ordinance is Exempt from the California Environmental Quality Act (CEQA) Per Section 15308 From: Hillary Gitelman Recommendation Staff recommends that the Planning and Transportation Commission (PTC) take the following action: 1. Recommend adoption to the City Council the attached ordinance (Exhibit A of Attachment A) Report Summary This report responds to comments and questions raised by the Planning & Transportation Commission at its hearing on December 14, 2016. This transmittal supplements the staff report and related attachments previously transmitted to the PTC on December 14, 2016 (Attachment A). Discussion The following discussion restates comments made by one or more commissioners and provides staff responses. 1. Conduct additional community outreach City of Palo Alto Planning & Community Environment Department Page 2 Response: The City Council directed staff to conduct informal outreach to solicit feedback on the interim ordinance and the Council’s direction on the draft ordinance. As a result, staff conducted a series of interviews and small group discussions with property owners, developers, brokers, retailers and other small business owners and managers, architects, and residents, as described in the December 14th report. These stakeholder meetings have provided an opportunity for individuals to provide candid feedback on this project that otherwise may not be feasible in larger group settings. Interviewees included three of Palo Alto’s largest commercial property owners and active developers Downtown and a commercial brokerage firm that represents over 90 properties in Palo Alto, in addition to retail business owners and managers. Staff and consultants have continued to meet with stakeholders; as of the published date of this report, interviews have been conducted with 20 individuals. The project also has an electronic mailing list and project website to keep interested parties up- to-date on the draft ordinance, meeting dates, and ways to stay involved: http://www.cityofpaloalto.org/gov/depts/pln/advance/downtown_retail_ordinance_.asp. Additionally, the retail ordinance has benefited from several other parallel community outreach initiatives in the city, including the intercept surveys completed Downtown as part of the Downtown Cap Evaluation and the Citizens Advisory Committee assembled for the Comprehensive Plan. 2. Simplify retail and retail-like definitions Response: As described in the December 14th staff report, the draft ordinance proposes to remove the extensive list of retail uses under the “retail services” definition and focuses instead on the intent of retail uses to be open to the public during typical business hours and with sales and services for customers and clients. The broader definition of retail seeks to respond to the changing nature of retail in Palo Alto which is expected to continue to shift towards restaurants, services, and experiences. For the purposes of retail protections, the list of retail-like uses has been retained from the interim ordinance to capture uses that are not defined as retail in the Zoning Ordinance, but which have similar architectural form, purposes, and publically- accessible services or sales. In this regard, as proposed, the definition of retail has been broadened as opposed to being overly prescribed. 3. Identify pipeline projects Response: The interim urgency ordinance and the draft ordinance contain a provision exempting any retail uses where a discretionary permit or entitlement application to convert such a retail use to a non-retail uses was submitted to the City on or before March 2, 2015 and is currently pending. This provision is intended to provide relief for projects that were underway prior to the adoption of the interim ordinance. 4. Clarify applicability to the PC zone Response: Properties designated as PC would not be affected by the draft ordinance. This reference is retained in the staff report under “future policy work” for staff to consider other ways PC-zoned parcels may in the future be aligned with the objectives of the ordinance. City of Palo Alto Planning & Community Environment Department Page 3 5. Proposed GF design standards additions are too narrow Response: The draft ordinance proposes to add design standards specifically promoting window transparency and restricting window coverings, since these issues were the focus of the Council’s concerns about retail-to-office conversions and a loss of “active” uses, particularly Downtown. The Architectural Review Board (ARB) reviewed the design standards in the Downtown Commercial (CD) and Pedestrian Shopping (P combining) districts, as well as the Downtown Design Guidelines at a study session on November 3, 2016. These districts regulations already contain a range of guidelines that address site planning, the building-to- street relationship, and architectural design and details that support active uses and window shopping. However, the existing guidelines do not contain any specific standards to support window transparency or prevent window coverings. (See the ARB report in Attachment B for a more complete analysis of these guidelines.) As described in the December 14th report, the ARB supported the continued implementation of existing design guidelines and development of new window transparency requirements. As a result of Council and ARB input, the proposed set of design standards and guidelines focus on window transparency. These are intended to supplement the existing set of design criteria, while maintaining focus on one of the purposes of the draft retail preservation ordinance: to prohibit extensive window coverings in new uses and to remove window coverings from non- conforming uses. 6. Waiver documentation of a 2,000-foot radius is burdensome; and waivers should be limited to a specific period of time Response: The proposed ordinance requests that property owners requesting a waiver submit a map identifying existing uses and the applicable zoning districts within a 2,000-foot radius. The intent is to help staff and decision-makers understand the context of uses within a 10-minute walk, and whether retail is viable based on the presence of other retail uses, residential uses, or other uses that may generate foot traffic. 7. Avoid being too prescriptive outside the core Response: The draft ordinance proposes new design standards for the GF district Downtown, only. The provisions of the Interim Ordinance are generally unchanged for areas outside the Downtown core. However, the draft ordinance does provide a path for relief from the ordinance for areas outside of the Downtown GF- and California Avenue R-combining districts. This provision allows property owners an opportunity to propose alternate uses that can demonstrate that they support the purposes of the underlying zoning district and encourage active pedestrian-oriented activity and connections. 8. Consider how medical office can be integrated into a retail area Response: Regulations around medical office as a retail-oriented use were considered and ultimately not supported by the Council as part of the Downtown retail protection discussions. As a way to restrict larger medical facilities, the SOFA II plan currently only allows medical office uses that are less than 5,000 square feet. City of Palo Alto Planning & Community Environment Department Page 4 Most medical offices require privacy as a basic tenet of their operations and therefore are not conducive to the purposes of the GF or R districts. However, some medical offices, such as chiropractors, dentists’ offices, and physical therapists have storefront windows that can remain uncovered and may generally be compatible with the active uses of a retail district. For example, optometrists are permitted and prevalent in Downtown; both exams and eyeglass sales are conducted in these businesses and storefront windows are generally transparent and inviting. Moreover, based on discussions with stakeholders, medical practitioners and patients enjoy being in locations that are convenient to other goods and services. The Commission may want to explore parameters for including certain types of medical offices uses in the Downtown or other districts in the city. 9. Provide prototypes for what is envisioned in the core Response: Generally, the City Council, ARB, and stakeholders have expressed support for the diversity of design and scale in the Downtown particularly. The draft ordinance does not intend to prescribe specific architectural design or details. Rather, in addition to preventing retail conversions, the ordinance seeks to expand storefront windows and window transparency requirements, and restrict tinted windows and opaque storefronts, as an additional design requirement for GF-designated parcels Downtown, including existing non-conforming uses. For additional information, the report (Attachment B) and presentation (Attachment C) to the ARB on November 3rd provide some details regarding desirable architectural design. 10. Provide more context for proposal, including traffic concerns and 2009 triggers to allow conversions Response: The GF district regulations were initially implemented in 1986. Over time, the district was modified to include a set of conditionally permitted uses in addition to the list of permitted retail uses, and to allow use exceptions when the vacancy rate for ground floor properties was 5 percent or greater, and the ground floor space had been vacant and available for six months or more. In 2001, the Council also applied restrictions on medical, professional, or general business offices from occupying ground floor uses in the CD commercial districts throughout the city. In November 2009, amidst the recession, retail vacancy rates approached 10 percent Downtown. A 2009 ordinance eliminated this 5 percent trigger as well as the restrictions in the CD district described above. The ordinance also modified the GF district boundaries to focus on the Downtown core area—adding parcels on Emerson Street and Hamilton Avenue, and removing parcels on Alma, High, Kipling, and Cowper streets. The purpose of these changes were to address concerns about the loss of revenue-generating retail. Additionally, the ordinance sought to retain a thriving retail sector by concentrating retail in higher foot traffic areas along University Avenue and the immediate vicinity and allowing more flexibility to lease ground floor space for either office or retail uses outside of the core area (i.e., outside of the GF district). The staff report and adopted ordinance from 2009 are provided as Attachment D. With the market rebounding in 2013 and the City again seeing low vacancy rates and high lease rates, additional changes were adopted to the GF district boundaries to extend the GF City of Palo Alto Planning & Community Environment Department Page 5 designation along Emerson Street between Hamilton and Forest Avenues. Subsequently, the 2015 interim urgency ordinance was adopted in response to a net loss of retail square footage citywide over the preceding 15 years, in part because of the increase in office rent and demand to locate in Palo Alto, and the pressure this put on retail uses to convert to office. Related to this dynamic, community members and City Councilmembers expressed concerns about the perceived impacts of office users (1) on traffic and parking, and (2) on changing the vibrancy of Downtown. With respect to item #1, in Downtown in particular, analysis prepared for the Downtown Cap Study in 2013 identified parking occupancy rates peaking at 78 percent weekday evenings (in on- and off-street public facilities), but exceeding 85 percent at high- demand Downtown locations. Traffic volumes at this time revealed congested conditions (level of service D or worse) at several locations throughout the city, though only one—El Camino Real at Rage Mill Road—was operating below acceptable levels. With respect to item #2, as office users replaced retail uses, they tended to install translucent films on storefront windows or covered windows to allow for privacy. These new office uses were seen as detracting from neighborhood quality of life and a Downtown that was generally publically-accessible and convenient for shopping, eating, and obtaining services. The interim urgency ordinance (which aimed to address these issues) and its findings can be found in Attachment A. 11. Provide a more expansive view of retail, such as financial services, and how retail can be supported. Response: See response to comment #2 above regarding the modifications to the definition of retail. Additionally, with respect to "financial services" in particular, the City’s definition (Section 18.04 of the PAMC) includes banks, savings and loan institutions, loan and lending institutions, credit unions and similar services. In the GF district, such uses would only be allowed with a Conditional Use Permit. Notably, when asked about how the City could support retailers to make their businesses more successful, retailers did not generally make any requests for their businesses per se. Rather, and as described in the December 14th staff report, they identified a need for parking for their employees and customers; investment in alternative travel modes to facilitate access to retail stores; and more housing to draw more foot traffic and to provide affordable housing for their workforces who tend to live outside of Palo Alto because they currently cannot afford housing within the community. 12. Provide explanation of how ordinance has expanded beyond the core to citywide Response: The intent of the ordinance from the outset was to establish regulations that would protect retail and retail like land uses citywide. To accomplish this, staff initially considered presenting two separate ordinances to address retail protections: first in Downtown, where they were seen as most needed, and second, citywide to prevent conversions throughout the city. Ultimately, staff abandoned this two separate ordinance approach in favor of one ordinance that would apply citywide for efficiency purposes. However, the proposed ordinance continues to propose different regulations for each area. In particular, modifications to the CD- C (GF) district require additional design standards that would not apply in any other district in City of Palo Alto Planning & Community Environment Department Page 6 the city and changes to allow a waiver for viable alternate uses would be possible citywide, except in the CD-C (GF) and R-combining districts. Notably, the draft ordinance also narrows the applicability of the retail protections by removing the provision from the existing interim ordinance that protected retail and retail like uses in districts where such uses are not permitted or conditionally permitted. 13. Form stakeholder working group to identify carrots (incentives) instead of sticks (regulations) to support retail Response: As described in the December 14th staff report and response to comment #10 above, the purpose of the ordinance, as directed by the Council, is by definition narrow: to prevent conversion of retail to non-retail uses. The report and response to comment #11 identify some of the ways that stakeholders have identified to better support their businesses. Additionally, there could be incentives, such as bonus floor area, for mixed use projects with ground-floor retail that could be addressed through the Comprehensive Plan or an area plan. As previously mentioned, the City Council directed staff to conduct informal outreach, as opposed to convening a formalized group. The intent of the stakeholder outreach efforts was to reach out to interested parties, including affected property owners, architects, and retailers. 14. Bring together representative stakeholder group to develop a specific plan for retail, housing, and employment Response: As described in the December 14th staff report and response to comment #13 above, the draft ordinance was intended to address retail conversions to non-retail uses specifically. The Comprehensive Plan and its Citizens Advisory Committee is looking at land use, including the interrelationship between uses. The draft Land Use and Transportation Element includes policies and programs that recommend public and private coordination and the use of a Coordinated Area Plan in areas where development is a concern. A Coordinated Area Plan may be the appropriate mechanism for developing a more comprehensive look at the relationship between retail, housing and employment in a more focused area with significant stakeholder involvement, and completing the necessary environmental review, consistent with CEQA. 15. Buildings proposed for GF designation may not be appropriately designed for retail Response: As described in the December 14th staff report, one of the consequences of restoring the GF designation to certain parcels near the University Avenue/Alma Street/Hamilton Street intersections is that some of these properties were designed as offices and do not have architectural features, such as storefront windows and doors, that make retail viable. Therefore, these property owners may be limited in the retailers that they can lease to and vacancies could result. The PTC may recommend modifications to the proposed GF boundaries, but the recommendation in the report is responsive to the Council’s prior direction. Report Author & Contact Information PTC1 Liaison & Contact Information Jean Eisberg, Consulting Planner Jonathan Lait, AICP, Assistant Director 1 Emails may be sent directly to the PTC using the following address: planning.commission@cityofpaloalto.org City of Palo Alto Planning & Community Environment Department Page 7 (415) 841-3539 (650) 329-2679 jean@lexingtonplanning.com jonathan.lait@cityofpaloalto.org Planning & Transportation Commission Staff Report (ID # 7487) Report Type: Action Items Meeting Date: 12/14/2016 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: Retail Preservation Ordinance Title: Recommendation to the City Council for the Adoption of an Ordinance Making Permanent Interim Urgency Ordinance 5330 (Limiting the Conversion of Ground Floor Retail and Retail Like Uses), With Some Modifications; Extending the Ground Floor Combining District to Certain Properties Located Downtown and in the South of Forest Avenue Coordinated Area Plan; Modifying the Definition of Retail; Adding Regulations to Improve Pedestrian Oriented Design Standards; and Related Changes. The Proposed Ordinance is Exempt from the California Environmental Quality Act (CEQA) Per Section 15308 From: Hillary Gitelman Recommendation Staff recommends that the Planning and Transportation Commission (PTC) take the following action: 1. Recommend adoption to the City Council the attached ordinance (Attachment A). Executive Summary To allow for continued retail protections following the expiration of the Retail Interim Urgency Ordinance in April 2017, the City Council has directed staff to prepare an ordinance that protects retail and retail like uses from conversion to non-retail uses; expands the GF district boundaries to reincorporate parcels that were previously removed from the district and create a continuous ground-floor retail environment; and adds design standards to the CD-C (GF) district that support active retail uses and pedestrian-oriented ground-floor architecture. Background Interim Urgency Ordinance for Retail Preservation In mid-2015, the City Council adopted an interim urgency ordinance prohibiting the conversion of ground floor spaces used for retail and retail like uses to office or other uses (Attachment C & City of Palo Alto Planning & Community Environment Department Page 2 D). The ordinance, which will sunset on April 30, 2017, was intended to protect retail spaces from converting to other uses while the City developed permanent zoning amendments to enhance retail preservations. The interim urgency ordinance prohibits the conversion of ground floor retail use “permitted or operating as of March 2, 2015 or thereafter” to any other non-retail use, and defines “retail use” as including the following:  retail service  eating and drinking service  hotels  personal services  theaters  travel agencies  commercial recreation  commercial nurseries  auto dealerships  day care centers  service stations  automotive services The ordinance currently applies to legal non-conforming uses, stating that such uses “shall remain… and shall not be subject to the change, discontinuance, or termination provisions of Chapter 18.70” of the Palo Alto Municipal Code (PAMC). The ordinance also applies to basements “currently in retail use or in use for retail support purposes,” and contains an exemption for “pipeline projects.” There are also provisions regarding “waivers and adjustments” (PAMC Chapter 18.85.104) which allow an applicant to request a waiver based on economic hardship by “showing that applying requirements [of the ordinance] would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property.” Recent Permanent Zoning Amendments Since the interim urgency ordinance was adopted, the City has adopted a permanent zoning amendment affecting the California Avenue Area (Ordinance No. 5358, adopted October 26, 2015) and closed a loophole affecting the Community Commercial (CC), Neighborhood Commercial (CN), and Service Commercial (CS) zoning districts (Ordinance No. 5373, adopted January 11, 2016). Downtown Ground-Floor Protections Since 2001 Originally implemented in 1986, the GF district regulations and boundaries have been modified several times in the last 15 years based on changes in market conditions Downtown: City of Palo Alto Planning & Community Environment Department Page 3  In November 2001, at the end of the first dot-com boom, the City Council adopted an ordinance that prohibited the conversion of neighborhood-serving retail uses to office uses in Downtown and several other commercial districts. The ordinance also required that where such a conversion had already taken place in Downtown or the California Avenue area, once the office use has been discontinued, it would be required to convert back to a conforming (retail) use. The purpose of the ordinance was to retain neighborhood-serving retail for residents, prevent the loss of sales tax revenue, and prevent the higher lease rates from office uses from driving up lease rates for retail uses.  In November 2009, amidst the recession, retail vacancy rates approached 10 percent Downtown. In an effort to concentrate retail activity in the core of Downtown, the City Council voted to remove the GF overlay on several parcels outside of the core that were identified as marginally viable for retail use: along Alma Street, portions of High Street (near Hamilton Avenue); along the circle ramps connecting University Avenue and Alma Street; and along Kipling and Cowper north of University Avenue. (See Attachment E for the GF map approved November 16, 2009 and the related staff report: http://www.cityofpaloalto.org/civicax/filebank/documents/17614)  In April 2013, with the market having rebounded, the City Council voted to extend the GF boundary on Emerson Street (generally between Hamilton and Forest Avenues). The intent was to prevent conversions of retail into office use. (See Attachment F for the map extending the GF boundaries approved April 8, 2013 and the related staff report: http://www.cityofpaloalto.org/civicax/filebank/documents/33817) City Council Direction The City Council discussed proposed retail protections citywide and in the Downtown and South of Forest Area (SOFA II) on August 22 and October 17, 2016 and provided feedback to staff’s proposed approach. At that time staff indicated its intent to present two ordinances to Council; one that addressed the citywide retail preservation objectives and a second focused on the Downtown. With respect to the citywide ordinance, staff communicated its intent to codify the interim regulations with minor amendments that clarified certain provisions and to modify the waiver requirements. The purpose of this ordinance was to prohibit retail and retail like uses from transitioning to other non-retail uses, citywide. Regarding the Downtown ordinance, staff received specific feedback from the City Council which is summarized below. Since the Council meeting, staff has decided to merge the two efforts into one ordinance. 1. Protect existing ground floor retail and retail like uses from converting to non-retail uses; 2. Clarify the intent of the “retail services” definition to specify the business be open to the public (i.e., no door buzzers) during typical hours of operation, and removed the City of Palo Alto Planning & Community Environment Department Page 4 exhaustive list of examples used to describe a retail use; 3. Maintain the mix of existing uses allowed in the GF district, but preclude personal services uses on University Avenue 4. Add regulations to the GF district protecting basements used for retail and retail like uses in the Downtown; 5. Restore the prior GF boundaries and re-designate parcels that were removed from the CD-C (GF) district during the recession; 6. Eliminate an existing provision in the GF boundary that allows 25% of the ground floor space not adjacent to the street to be used for other permitted uses; 7. Prohibit reflective glass and require window transparency for non-conforming uses in the GF district in the Downtown; and 8. Develop design standards that support active uses and pedestrian-oriented ground- floor experience Downtown (note: the Council did not support additional design standards for SOFA II). Additional direction from the City Council that is not addressed by the draft ordinance is described in the “Subsequent Ordinances and/or Studies” section below. Architectural Review Board Direction The Architectural Review Board (ARB) discussed potential design standards (items #4, #6, and #8, above) in the CD-C (GF) district at a study session on November 3, 2016. Although the ARB did not take formal action, Board members generally supported the following types of standards/design features:  Encourage clear glass in storefront windows (vs. tinted or translucent windows) to increase visibility in and out of retail spaces.  Prioritize usable recessed areas in front of stores and/or entryways for outdoor seating and display areas, to support interaction between retail spaces and the public street.  Consider a minimum window transparency requirement (i.e., minimum length for openings—windows and doors—based on the linear frontage of the property)  Encourage pedestrian-oriented features such as public seating.  Continue to enforce the existing design guidelines in the Pedestrian Shopping (P) and Downtown Commercial (CD) zoning districts as well as the Downtown Urban Design Guidelines through the existing architectural review process. Community Outreach Staff and consultants conducted 17 informal interviews in November 2016 with community members and other stakeholders that live and/or work in the Palo Alto, including developers/property owners, small retail/personal service business owners or store managers, architects, and residents (see Attachment G for list of interviewees). The purpose of the conversations was to solicit feedback from a broad range of viewpoints on the interim urgency ordinance and the direction proposed by the City Council for the permanent ordinance. City of Palo Alto Planning & Community Environment Department Page 5 Interviewees expressed a variety of perspectives about retail development in Palo Alto, which are summarized below:  Consider the Future of Retail in Palo Alto. Stakeholders supported a broader definition of active uses in the existing neighborhood commercial districts, encouraging the City to be realistic about the future of retail. Retail product sales are shifting to online retailers. Palo Alto’s future is in restaurants and other food businesses, personal services and experiences, as well as arts, cultural, and quasi-public uses.  Need for More Affordable Businesses. The prices at retail businesses Downtown are expensive; ideally more affordable retailers would be available.  Mixed Opinions about Expanding the GF District. While some stakeholders supported the idea of extending the GF district (for example, to Alma Street or into the SOFA II district), others thought it was unnecessary and overly prescriptive for these lower quality retail streets. Several stakeholders identified the “middle” of University Avenue (roughly Emerson to Waverly Streets) as the most viable retail location. Hamilton Avenue and several side streets intersecting University Avenue (namely Ramona and Emerson Streets) were seen as secondary retail locations. Alma Street was identified as a poor retail location by several stakeholders because of Caltrain and vehicle traffic and noise, and the lack of foot traffic. Moreover, potential retail sites outside the Downtown core may be challenged by a lack of onsite parking and exclusion from the Downtown parking assessment district.  Mixed Opinions about the Moratorium on Conversions. Many stakeholders tend to favor more flexibility in finding tenants, based on current market conditions and expressed concern about a proliferation in vacant spaces. However, other interviewees tend to support policy interventions that support retail over office uses (which are seen as contributing to traffic congestion). Several stakeholders thought that if any protections are provided, they should only be on University Avenue and the intersecting side streets Downtown and potentially on California Avenue.  Consider Alternate Policy Mechanisms. A few stakeholders recommended using more typical policy mechanisms to regulate the quality and design of uses, specifically the conditional use permit process, specific finding requirements, and the precise/specific planning process to develop plans for individual neighborhood commercial areas.  Strength in Mix of Uses for Retailers. Retailers Downtown generally support the mix of uses in the core, with office workers and hotel guests serving as a strong customer base. Further from the Downtown core, retailers tend to rely on the local resident population as their customer base.  Private Schools and Medical Offices are Getting Squeezed. A few stakeholders acknowledged that there are some specific business types (such as private schools and after-school programs, and medical offices, including therapists and chiropractors) which are getting squeezed by the current market and moratorium. These businesses can locate either in retail storefront spaces or office spaces, but were (1) not included as a retail or retail-like use under the Interim Urgency Ordinance and (2) cannot generally afford the current office lease rates. City of Palo Alto Planning & Community Environment Department Page 6  Support for Waivers/Exceptions, if Reasonable. Generally, stakeholders support waivers and exceptions to allow certain low-quality retail sites to convert to other uses, while a moratorium is in place. Property owners/property managers would need to prove that a space is not economically viable. A few interviewees expressed concern that the threshold for an exception under the current Urgency Ordinance is too high and the requirements are confusing.  Some Support for Design Standards. Stakeholders were generally supportive of design standards that encourage active retail uses and pedestrian-oriented design through the use of clear glass and removing curtains and other window coverings. However, several stakeholders thought such standards were unnecessary and overly prescriptive. Other related comments:  Housing to Support Business. Many stakeholders expressed support for more housing Downtown and elsewhere in the city to support retail businesses and to provide more affordable housing for retail workers. Several retailers cited challenges in hiring and retaining workers because of the cost of housing locally.  Parking Constraints. Nearly all stakeholders, including residents, employers, customers, and developers expressed frustration about a lack of parking Downtown. At the same time, several stakeholders proposed removing on-street parking to create outdoor dining areas, seating or parklets to support more active use of the street and sidewalks.  Infrastructure and Transit Investments. Several stakeholders stated that the City and business associations need to invest in transit, alternate travel modes, and additional parking garages to make local retail shopping more convenient. Discussion The draft ordinance is based on City Council direction, as described in the Background section above. The draft ordinance creates the following policy changes and/or makes permanent the existing interim urgency ordinance policies. Analysis is provided in italics below and the subsequent subsections. Citywide Measures 1. Modify the Retail Services and Personal Service Definitions: a. Remove the extensive list of example uses from the Retail Services definition and define it more generally as use open to the public during typical business hours that is predominantly engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use. b. Clarify that personal service includes fitness and exercise studies, such as yoga or a martial arts studio (in addition to art and dance studios) and confirm that it is intended for an individual or small group instruction of 15 or fewer students/customers at one time. City of Palo Alto Planning & Community Environment Department Page 7 This provision removes the extensive list of retail uses and focuses instead on the intent of retail uses to be open to the public during typical business hours and with sales and services for customers and clients. The broader definition of retail seeks to respond to the changing nature of retail in Palo Alto which is expected to continue to shift towards restaurants, services, and experiences. These revisions also clarify that yoga studios of 15 students/customers is defined as personal service instead of commercial recreation, which requires a conditional use permit. 2. Protect existing ground-floor retail and retail like uses from converting to non-retail uses citywide: retail and retail like uses are interchangeable provided the use is permitted or conditionally permitted in the district. This provision continues the citywide moratorium on uses permitted or operating as of March 2, 2015, expressed in the Interim Urgency Ordinance in all zoning districts. The protections would be codified in the use classification tables of each zoning district with a note referencing a new subsection in Section 18.40 (General Standards and Exceptions) of the PAMC. 3. Modify the waiver/hardship provisions to include a process that is less stringent than the constitutional takings standard used in the interim ordinance. The proposed ordinance provides two paths for waivers: a. Maintain the existing economic hardship threshold that requires demonstration of an unconstitutional taking in the GF and R-Combining Districts. b. Provide an opportunity to consider an alternate viable active use, requiring the applicant to provide the following evidence to be considered by the Planning Director, or referred to the City Council.  Provide a 10-year history of the site's occupancy and reasons for respective tenants discontinuing their use of the site;  Provide a map that indicates all the existing surrounding uses, both residential and non-residential, within a 2,000-foot radius; include the corresponding zone district on the map;  Provide analysis that demonstrates the proposed use will support the purpose of the zoning district and Comprehensive Plan land use designation, and will encourage active pedestrian-oriented activity and connections. In addition to the economic hardship waiver to demonstrate a constitutional taking, the proposed ordinance provides a second exception. This exception offers property owners additional flexibility on sites where retail uses have shown not to be viable and where a proposed alternate use meets the intent of the base district. The purpose of the evidence requested is to understand the viability of existing and future uses on the site based on both the site characteristics and the surrounding uses; and to determine whether a substitute service, office or manufacturing use could be designed and/or conditioned to contribute to the goals and purposes of the zoning district. City of Palo Alto Planning & Community Environment Department Page 8 4. Expand the GF district purposes in Section 18.30(C) of the PAMC to extend beyond use classifications and reflect a desire for active pedestrian-oriented uses, with a high level of transparency and visual interest and the ground level. The current GF district purposes are focused on type of use and on the Downtown, specifically. The proposed revision seeks to: (1) capture the contribution of architectural form, such as transparency and pedestrian-orientation, that create a vibrant commercial district; and (2) clean up the Downtown-focused language to recognize that the GF district is currently applied as a combining district in the Midtown and Charleston commercial areas, in addition to Downtown. Downtown Measures 1. Protect all existing basement retail and retail like or retail support uses from converting to non-retail uses in the CD-C (GF) district. The draft ordinance continues the Interim Urgency Ordinance provision to restrict the conversion of basements—but only in the CD-C (GF) district. A forthcoming report as part of the Downtown Cap Evaluation studied existing basements Downtown to determine the impacts of retail to office conversion and estimate the potential for basements to serve as office space. Though a complete inventory was not feasible, the report found a substantial opportunity for office uses in basements which are currently being used as storage and ancillary retail functions. The proposed ordinance would help to prevent such conversions. 2. Modify the GF district where it is combined with the CD-C district to do the following: a. Allow yoga studios, dance studios, martial arts studios, and similar uses only on parcels that do not contain frontage on University Avenue. b. Require clear glass. Low-e glass or a minimal amount of tinting to achieve sun control is acceptable if the glass appears essentially transparent when viewed from the outside. Opaque and reflective glass shall not be used. c. Require 70% of any sidewalk-fronting frontage to have transparent window/door openings between 2.5 and 10 feet above grade. d. Prohibit window coverings in non-conforming tenant spaces fronting onto a sidewalk, during business hours. Require displays of merchandise, artwork or items of visual interest where customer privacy requires window coverings. Exceptions are permitted where operations preclude transparency (e.g., theaters). e. Remove provision 18.30(C).020(b) which allows 25% of the ground-floor area not fronting a street from being occupied by a use in the applicable underlying CD district (such as office) City of Palo Alto Planning & Community Environment Department Page 9 The draft ordinance proposes to regulate architectural form and transparency with items a through d above, in an effort to support active pedestrian-oriented uses that encourage window shopping and a high degree of visibility between the store interior and passersby on the street. Bullet e seeks to strengthen the retail core of the GF district by removing the provision that allows for ground-floor office. (This provision is currently suspended by the Urgency Ordinance). Yoga studios and similar uses up to 15 customers or students would be permitted by right, except on University Avenue; yoga studios with more customers at a time would be considered a commercial recreation use and subject to a conditional use permit. 3. Extend the GF boundary to Alma Street and Hamilton Avenue, re-designating the parcels that were withdrawn in 2009 and adding parcels to create a continuous ground-floor retail environment in the western portion of Downtown (Attachment B). The GF overlay would be added to the following parcels: 125, 124, 116, and 102 University Ave., 525, 529, 542 and 550 High St., 539 and 535 Alma St., 115, 150, 156, 158, and 164 Hamilton Ave. This map amendment is intended to expand the Downtown core area where ground-floor retail and the design standards identified above would be required to create a more continuous retail experience on the ground-floor. Some of these properties are currently occupied by uses that are not permitted in the GF overlay district—such as office, financial services, and real estate offices. As a result these properties (including 124, 116, and 102 University Ave., and 539 and 535 Alma St.) would become non-conforming uses until the existing use discontinues and they were required to comply with the GF provisions. However, some of these properties were designed as offices and do not have architectural features, such as storefront windows and doors, that make retail viable. Therefore, these property owners may be limited in the retailers that they can lease to. Subsequent Ordinances and/or Studies Remaining issues identified by the City Council will be addressed through subsequent ordinances and/or studies: 1. Comprehensive Plan (underway): f. Building Height Requirements: As part of the Comprehensive Plan Update (Comp Plan Update), a potential increase to the maximum building height, including an increase from 50 to 55 or 60 feet in the downtown, is being discussed. As part of this discussion, the Comp Plan Update could consider an increase in the minimum first floor height requirement as a method to encourage inviting and active retail uses. 2. Future Policy Work: g. Aligning the Planned Community (PC) Zone: Consider whether PC zoned parcels downtown could be aligned with GF and/or P combining district requirement (e.g., with respect to design standards and guidelines) City of Palo Alto Planning & Community Environment Department Page 10 h. Amortization for Non-Conforming Uses: Policies regarding amortization of non- conforming uses would be addressed separately and subsequent to approval of the permanent ordinance. Amortization ordinances can take significantly more time to complete, given the work required with affected property owners, and it will not be feasible to prepare such an ordinance prior to the upcoming expiration of the interim urgency ordinance. i. Transparency Additions to Title 9: Public Peace, Morals and Safety: A new subsection will be explored for Title 9 of the PAMC as this ordinance moves on to the City Council to regulate window transparency for existing nonconforming uses and future uses citywide. The Zoning Ordinance can freely regulate new development, but the Ordinance generally cannot require existing legal nonconforming buildings to change their building façades to conform with standards such as the window transparency and ground-floor building height requirements proposed above. Through Title 9, the City may regulate business conduct through the City’s inherent police power to support a healthy and safe retail environment. Pros and Cons of Continuing a Moratorium and Extending the GF Boundary The draft ordinance would modify, but continue the moratorium on the conversion of retail uses, as stated by in the current Interim Urgency Ordinance. The Interim Urgency Ordinance has been successful in that it has prevented the conversion of retail uses during the past 18 months. Continuing such a prohibition would help to ensure that discontinued retail spaces would continue to be available for new retail uses and would preclude office or manufacturing uses from occupying these spaces. However, a moratorium and extension of the GF boundary do not guarantee that retail uses would necessarily occupy these spaces. In Downtown, in 2016, the vacancy rate for retail uses remains very low (<2%), while the lease rates Downtown have increased to $6.50-$8.25 per square feet, suggesting that the retail market is competitive and potentially too expensive for smaller businesses to find space Downtown. (See the most recent Downtown Monitoring Report for details: http://www.cityofpaloalto.org/civicax/filebank/documents/51729.) Property owners and developers interviewed as part of this project and/or who have requested waiver/exceptions have identified challenges in leasing retail spaces in non-prime locations— further from the main corridors of University Avenue, El Camino Real, etc., despite at times lowering lease rates. Whether owners are holding out to lease to a tenant at a certain price or whether the market truly cannot bear a retail tenant in a sub-price location, the result is, at times, that a space will remain vacant for months or even years. Implications for SOFA II Zoning Districts The SOFA II RT-35 and RT-50 residential transition districts emphasize residential and mixed use development with residential districts. The retail uses in these districts tend to cater to local City of Palo Alto Planning & Community Environment Department Page 11 residential areas that have limited foot traffic compared with Downtown. Currently, the Plan prevents new ground-floor office in the Homer/Emerson Corridor1 which includes many of the retail tenant spaces in the Plan Area. The proposed ordinance would extend these protections to other retail and retail like uses in SOFA II. The waiver provisions would apply citywide. Other Administrative Changes Some provisions in the Interim Urgency Ordinance have proven difficult to administer. The proposed ordinance addresses these issues. Notably, staff has not included a provision from the existing interim ordinance that would have protected retail and retail like uses in districts where such uses are not permitted or conditionally permitted. Additionally, staff has clarified the ordinance does not have precedence over specific amortization language in the municipal code that may relate to specific properties. Nonconforming retail or retail like uses, when located in a district that permits or conditionally permits such uses, would continue to be protected with the proposed ordinance. Other Design Standards Considered and Rejected/Postponed Other design standards were discussed with decision-makers and stakeholders and were ultimately rejected or are recommended to be postponed:  Minimum First Floor Height: Staff recommended and the City Council discussed a potential minimum first floor height requirement, such as 15 feet. Based on feedback from the ARB, architects, and developers, such a standard is not feasible within the CD district’s existing 50-foot height limit, without reducing the feasibility of constructing a 4-story building. As mentioned in the Next Step section above, this standard will be reconsidered as part of the Comprehensive Plan Update.  SOFA II Design Standards: Staff recommended and the City Council discussed potential design standard amendments for SOFA II. The Council determined that additional design standards were not needed in this area.  SOFA II Medical Office Size Threshold: The Council requested a recommendation on medical office size in SOFA II. Per existing SOFA II district regulations, medical uses are capped at 5,000 square feet. No change is proposed in order to maintain this small- to mid-size medical office uses.  Lobby Sizes: The GF district allows lobby and reception areas serving non-ground floor uses (such as for office uses on upper floors), but does not regulate the width of the frontage or size of the lobby area. As lobbies serving tenants on upper floors tend not to be leasable areas, they are typically relatively small in size; further regulatory restrictions are not warranted. Comprehensive Plan Policy Implementation The draft ordinance supports land use and economic development policies envisioned by the City’s Comprehensive Plan. The Comprehensive Plan identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale “centers” with a mix of uses 1 The Homer/Emerson Corridor means all sites bordering Homer Avenue between Alma Street and Ramona Street and/or Emerson Street between Forest Avenue and Channing Street. City of Palo Alto Planning & Community Environment Department Page 12 as focal points for neighborhoods (Goal L-4). Policy L-20 suggests that the City “encourage street frontages that contribute to retail vitality…” and Policy B-5 calls on the City to “maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City’s economic base.” The draft ordinance also supports Comprehensive Plan policies in the Downtown and SOFA II, which seek to maintain “a mix of commercial, civic, cultural, recreational and residential uses” Downtown and “promote quality design that recognizes the regional and historical importance of the area and reinforces its pedestrian character” (Policy L-23) and “enhance the character of the South of Forest Area (SOFA) as a mixed use area” (Policy L-25). Environmental Review The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, the project is categorically exempt under CEQA Section 15308 as a regulatory action taken by the City pursuant to its police power and in accordance with Government Code Section 65858 to assure maintenance and protection of the environment. As a result of implementation of the ordinance, no substantially greater or more severe impacts are anticipated and no development is proposed, beyond what is currently allowed by the Zoning Ordinance and Comprehensive Plan. Public Notification, Outreach & Comments The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper. Notice of a public hearing for this project was published in the Palo Alto Weekly on December 2, 2016, which is 12 days in advance of the meeting. Timeline/Next Steps In addition to the recommended action, the Planning and Transportation Commission may modify the proposed ordinance language, by adding, removing or editing specific changes or requirements. Staff hopes to forward the PTC’s recommendation to the City Council for consideration at a meeting in February 2017. The ordinance would be effective 31 days following Council’s adoption (on second reading) just prior to April 30, 2017 which is when the urgency interim ordinance would cease to be in effect. Report Author & Contact Information PTC2 Liaison & Contact Information Jean Eisberg, Consulting Planner Jonathan Lait, AICP, Assistant Director (415) 841-3539 (650) 329-2679 jean@lexingtonplanning.com jonathan.lait@cityofpaloalto.org 2 Emails may be sent directly to the PTC using the following address: planning.commission@cityofpaloalto.org NOT YET APPROVED   1  November 23, 2015      Ordinance No. ____  Ordinance of the Council of the City of Palo Alto Limiting the Conversion of  Ground Floor Retail and “Retail Like” Uses Citywide     The Council of the City of Palo Alto does ORDAIN as follows:     SECTION 1.  Findings and Declarations.     A. The City of Palo Alto has long been considered the birth place of Silicon Valley.   With its proximity to Stanford University, its international reputation, its deep ties to  technology firms, its highly rated public school system and its ample public parks, open space  and community centers, Palo Alto continues to serve as a hub for technology based business.    B. Palo Alto is considered one of Silicon Valley's most desirable office markets,  leading to rapidly increasing rental rates for commercial property.  In particular, average  commercial rental rates have gone up significantly from 2013 to 2015.  In 2013 the average  monthly rental rate citywide for office was $4.57 per square foot. That rate increased to $5.12  in 2015.  While retail rents have also increased during this period, retail rents are considerably  lower than office rents.  The average monthly rental rate for retail in 2013 was $4.21 and in  2015 was $4.88.      C. These record high monthly rental rates for office and low vacancy rates have  created financial incentives to replace current retail use with office use where such conversions  are permitted by the City’s zoning ordinance.  These economic pressures are more severe in the  downtown and California Avenue commercial areas but exist throughout the City. In addition,  these trends place particular pressure on small and medium‐sized businesses.    D. Based on these trends, on March 2, 2015, the Palo Alto City Council asked staff  to consider whether zoning‐based protections for ground floor retail uses need to be  strengthened where they currently exist and expanded to areas of the City where they do not.    E. This direction is consistent with the City’s existing Comprehensive Plan, which  identifies the desirability of neighborhood serving retail (Policy L‐16) and envisions inviting,  pedestrian‐scale “centers” with a mix of uses as focal points for neighborhoods (Goal L‐4).   Policy L‐20 suggests that the City “encourage street frontages that contribute to retail vitality…”  and Policy B‐5 calls on the City to “maintain distinct business districts within Palo Alto as a  means of retaining local services and diversifying the City’s economic base.”       K.  The City of Palo Alto enacted Urgency Interim Ordinance 5325 on May 11, 2015  to prevent the conversion of ground floor space to office or other non‐retail uses, which was a  trend in the City’s commercial districts.    L. The urgency interim ordinance was extended through adoption of Ordinance  5330 on June 15, 2015, and is set to expire on April 30, 2017.    2     November 23, 2016                                                                                                                                                                                                                          M. The City’s land use data shows that there was a loss of approximately 70,000  square feet of retail‐type uses in the period from 2008 until the urgency interim ordinance was  adopted.  This loss of retail‐type uses coincided with an increase in commercial office rents,  such that property owners had an economic incentive to convert ground floor retail spaces to  office use where this was permitted by the City’s zoning regulations.    N. The economic conditions that favor conversion of retail space to office space  remain in place because office rents remain higher than retail rents.     O. Since the urgency interim ordinance was adopted, the City has adopted  permanent retail protections for the California Avenue business district, and has adopted an  ordinance closing a loophole in PAMC Section 18.16.050 that was allowing the loss of retail  space along El Camino Real.      P. In anticipation of the expiration of the urgency interim ordinance (Ordinance  5330), and in order to provide protections for the entire City, the City Council desires to adopt  permanent retail protections.     SECTION 2. Section 18.04.030 of Chapter 18.04 of the Palo Alto Municipal Code is  hereby amended to amend definitions 114, and 125 and to add definitions 125.1 and 125.2 as  follows:    (114) “Personal service” means a use providing services of a personal convenience  nature, and cleaning, repair or sales incidental thereto, including:    (A) Beauty shops, nail salons, day spas, and barbershops;  (B) Self‐service laundry and cleaning services; laundry and cleaning pick‐up  stations where all cleaning or servicing for the particular station is done  elsewhere; and laundry and cleaning stations where the cleaning or servicing  for the particular station is done on site, utilizing equipment meeting any  applicable Bay Area Air Quality Management District requirements, so long as  no cleaning for any other station is done on the same site, provided that the  amount of hazardous materials stored does not at any time exceed the  threshold which would require a permit under Title 17 (Hazardous Materials  Storage) of this code;  (C) Repair and fitting of clothes, shoes, and personal accessories;  (D) Quick printing and copying services where printing or copying for the  particular service is done on site, so long as no quick printing or copying for  any off‐site printing or copying service is done on the same site;  (E) Internet and other consumer electronics services;  (F) Film, data and video processing shops, including shops where processing for  the particular shop is done on site, so long as no processing for any other shop  is done on the same site; and    3     November 23, 2016                                                                                                                                                                                                                        (G) Art, dance or music studios, fitness or exercise studios, or similar uses  intended for an individual or small group of persons for 15 or fewer  students/customers at one time in a class (see “commercial recreation” for  other activities).    (125) “Retail service” means a use generally open to the public during typical business  hours and predominantly engaged in providing retail sale, rental, service, processing, or  repair of items primarily intended for consumer or household use, including but not  limited to the following: groceries, meat, vegetables, dairy products, baked goods,  candy, and other food products; liquor and bottled goods, household cleaning and  maintenance products; drugs, cards, and stationery, notions, books, tobacco products,  cosmetics, and specialty items; flowers, plants, hobby materials, toys, household pets  and supplies, and handcrafted items; apparel, jewelry, fabrics, and like items; cameras,  photography services, household electronic equipment, records, sporting equipment,  kitchen utensils, home furnishing and appliances, art supplies and framing, arts and  antiques, paint and wallpaper, carpeting and floor covering, interior decorating services,  office supplies, musical instruments, hardware and homeware, and garden supplies;  bicycles; mopeds and automotive parts and accessories (excluding service and  installation); cookie shops, ice cream stores and delicatessens.     (A) “Extensive retail service,” as used with respect to parking requirements,  means a retail sales use having more than seventy‐five percent of the gross  floor area used for display, sales, and related storage of bulky commodities,  including household furniture and appliances, lumber and building materials,  carpeting and floor covering, air conditioning and heating equipment, and  similar goods, which uses have demonstrably low parking demand generation  per square foot of gross floor area.  (B) “Intensive retail service” as used with respect to parking requirements, means  any retail service use not defined as extensive retail service.    (125.1) “Retail‐Like Use” means a use generally open to the public during typical  business hours and predominantly engaged in providing services closely related to retail  services, including but not limited to:    (A) Eating and drinking services, as defined in Section 18.04.030 (47);  (B) Hotels, as defined in Section 18.04.030 (73);  (C) Personal services, as defined in Section 18.04.030 (114);  (D) Theaters;  (E) Travel agencies;  (F) Commercial recreation, as defined in Section 18.04.030 (33);  (G) Commercial nurseries;  (H) Auto dealerships, as defined in Section 18.04.030 (12.5);  (I) Day Care Centers, as defined in Section 18.04.030 (42);   (J) Automobile Service Stations, as defined in Section 18.04.030(13); and    4     November 23, 2016                                                                                                                                                                                                                        (K) Automotive Services, as defined in Section 18.04.030 (14).       SECTION 3. Chapter 18.30(A) of Title 18 of the Palo Alto Municipal Code is hereby  amended to add section 18.30(A).055:    18.30(A).0A5   Design Standards    The following design standards shall apply in the R combining district:    (a) Exterior windows on the ground floor shall use transparent glazing.  Low‐e glass or  minimal tinting to achieve sun control is permitted, so long as the glazing appears  transparent when viewed from the ground level. Opaque or reflective glazing is  prohibited on the ground floor for ground floor exterior windows in the R combining  district.    (b) Window coverings are not permitted on the ground floor during typical business  hours.  Where operations preclude transparency (e.g., theaters) or where privacy  requires window coverings, sidewalk‐facing frontage shall include items of visual  interest including displays of merchandise or artwork.    SECTION 4. Chapter 18.30(C) of Title 18 of the Palo Alto Municipal Code is hereby  amended to read as follows:    18.30(C).010   Specific Purpose    The ground floor combining district is intended to provide design guidelines and modify  the uses allowed in the CD commercial downtown districts and subdistricts to allow only  retail, eating and drinking and other service‐oriented commercial development uses on  the ground floor promote active, pedestrian‐oriented uses, with a high level of  transparency and visual interest at the ground level. For the purposes of this chapter,  "ground floor" means the first floor which is above grade. Where the ground floor  combining district is combined with the CD a commercial district, the regulations  established by this chapter shall apply in lieu of the uses normally allowed in the CD  underlying district. Except for the regulations relating to uses set forth in this chapter, all  other regulations shall be those of the applicable underlying CD district.    18.30(C).020   Permitted Uses    (a) The following uses shall be permitted in the GF combining district, subject to  restrictions in section 18.40.160:    (1) Eating and drinking;  (2) Hotels;    5     November 23, 2016                                                                                                                                                                                                                        (3) Personal services, except for parcels with frontage on University Avenue,  where uses defined in 18.04.030(114)(G) are not permitted;  (4) Retail services;  (5) Theaters;  (6) Travel agencies;  (7) Entrance, lobby or reception areas serving non‐ground floor uses;  (8) All other uses permitted in the underlying district, provided such uses are not  on the ground floor.    (b) Notwithstanding subsection (a), elimination of or conversion of basement space  currently in Retail or Retail‐Like use or related support purposes is prohibited.  (b) Notwithstanding subsection (a), not more than twenty‐five percent of the  ground floor area not fronting on a street may be occupied by a use permitted in  the applicable underlying CD district.    18.30(C).030   Conditional Uses    (a) The following uses may be conditionally allowed on the ground floor in the GF  ground floor combining district, subject to issuance of a conditional use permit in  accord with Chapter 18.76 (Permits and Approvals) and with the additional  finding required by subsection (b), subject to restrictions in section 18.40.160:    (1) Business or trade school;  (2) Commercial recreation;  (3) Day care;  (4) Financial services, except drive in services;  (5) General business service;  (6) All other uses conditionally permitted in the applicable underlying CD  district, provided such uses are not on the ground floor.    (b) The director may grant a conditional use permit under this section only if he or  she makes the following finding in addition to the findings required by Chapter  18.76 (Permits and Approvals): The location, access or design of the ground floor  space of the existing building housing the proposed use, creates exceptional or  extraordinary circumstances or conditions applicable to the property involved  that do not apply generally to property in the same district.    (c) Any use conditionally permitted pursuant to this section shall be effective only  during the existence of the building that created the exceptional circumstance  upon which the finding set forth in subsection (c) was made.    18.30(C).035   Design Standards      6     November 23, 2016                                                                                                                                                                                                                        Where the GF combining district is combined with the CD‐C subdistrict, the following  design standards shall apply:    (c) Exterior windows on the ground floor shall use transparent glazing.  Low‐e glass or  minimal tinting to achieve sun control is permitted, so long as the glazing appears  transparent when viewed from the ground level. Opaque or reflective glazing is  prohibited on the ground floor for ground floor exterior windows in the GF  combining district.    (d) At least 70 percent of any sidewalk‐facing frontage shall have transparent  window/door openings between 2.5 and 10 feet above grade.    (e) Window coverings are not permitted on the ground floor during typical business  hours.  Where operations preclude transparency (e.g., theaters) or where privacy  requires window coverings, sidewalk‐facing frontage shall include items of visual  interest including displays of merchandise or artwork.    18.30(C).040   Annual Monitoring of Ground Floor Retail Use  A downtown retail vacancy rate survey shall be prepared annually in September of each  year, and a report shall be prepared conveying that information to the Planning and  Transportation Commission and City Council prior to the end of the year.  The purpose  of the survey is to assess changes in retail use in the downtown zones.  The vacancy rate  shall address all areas zoned CD‐C or GF in downtown.       SECTION 4. Sections 18.85.010 through 18.85.060 of Chapter 18.85 of Title 18 of the  Palo Alto Municipal Code are hereby deleted in their entirety.      SECTION 5. Section 18.40.160 of Chapter 18.40 of Title 18 of the Palo Alto Municipal  Code is hereby added to read as follows:    18.40.160 Retail Preservation    (a) Conversion of Retail and Retail‐Like Uses Prohibited.   (1) Any ground floor Retail or Retail‐Like use permitted or operating as of March 2,  2015 may be replaced only by another Retail or Retail‐Like use, as permitted in  the applicable district.    (2) The phrase ‘use permitted or operating’ as used in this section means:  (A) A lawfully established use conducting business, including legal non‐ conforming uses   (B) An established use conducting business without required city  approvals, but is a permitted or conditionally permitted use in district    7     November 23, 2016                                                                                                                                                                                                                        (C) For parcels vacant on March 2, 2015, the last use that was lawfully  established, or established without required permits, and permitted or  conditionally permitted in the district.    (b) Non‐conforming uses.  (1) The requirements imposed by subsection (a) shall not apply to Retail or Retail‐ like uses that are no longer permitted or conditionally permitted in the  applicable district.    (2) Nothing in this section shall modify the provisions of Chapter 18.70 regarding the  expansion, change, discontinuance, or termination of a non‐conforming use.    (c) Waivers and Adjustments.  (1) Grounds. The following shall be grounds for a request for waiver or adjustment  of the requirements contained in this section:    (A) Economic Hardship. An applicant may request that the requirements of  this section be adjusted or waived based on a showing that  applying the  requirements of this section would effectuate an unconstitutional taking  of property or otherwise have an unconstitutional application to the  property; or    (B) Alternative Viable Active Use. Except in the GF or R combining districts,  an applicant may request that the requirements of this Section 18.40.160  be adjusted or waived based on a showing the a permitted retail or retail‐ like use is not viable, that the proposed use will  support the purposes of  the zoning district and Comprehensive Plan land use designation and, and  that the proposed use will encourage active pedestrian‐oriented activity  and connections.    (2) Documentation. The applicant shall bear the burden of presenting substantial  evidence to support a waiver or modification request under this Section and  shall set forth in detail the factual and legal basis for the claim, including all  supporting technical documentation.  Evidence in support of a waiver under  subsection (c)(1)(B) must demonstrate the viability of existing and future uses on  the site, based on both the site characteristics and the surrounding uses;  specifically whether a substitute use could be designed and/or conditioned to  contribute to the goals and purposes of the zoning district. Examples of such  evidence include:    (A) A 10‐year history of the site's occupancy and reasons for respective  tenants vacating the site;  (B) A map that indicates all the existing surrounding uses, both residential  and non‐residential, within a 2,000‐foot radius; include the    8     November 23, 2016                                                                                                                                                                                                                        corresponding zone district on the map;    (3) Any request under this section shall be submitted to the Planning Director  together with any supporting documentation. The Planning Director, in his or her  sole discretion, may act on a request for waiver or refer the matter to the City  Council.  A decision by the Planning Direction may be appealed to the City  Council by written form in the manner prescribed by the Planning Director.    (d) Reconstruction.  Any ground floor Retail use existing on or after March 2, 2015 may be  demolished and rebuilt provided that the portion of square footage used as Retail use  on or after March 2, 2015 is not reduced except that Retail square footage may be  reduced by the minimum amount needed to provide access to any new upper floor  and/or lower level.    (e) Applicability to Current Requirements.  Nothing in this section shall alter requirements  of site‐specific Planned Community zoning ordinances or adopted conditions of  approval.  Nothing in the section shall be construed to waive the requirement for a  conditional use permit or other entitlement where such requirements currently exist.       SECTION 6. Section 18.13.030 of Chapter 18.13 of Title 18 of the Palo Alto Municipal  Code is hereby amended to read as follows:     USE TABLE TO BE UPDATED TO REFERENCE 18.40.160      SECTION 7. Section 18.16.040 of Chapter 18.16 of Title 18 of the Palo Alto Municipal  Code is hereby amended to read as follows:     USE TABLE TO BE UPDATED TO REFERENCE 18.40.160      SECTION 8. Section 18.18.050 of Chapter 18.18 of Title 18 of the Palo Alto Municipal  Code is hereby amended to read as follows:     USE TABLE TO BE UPDATED TO REFERENCE 18.40.160      SECTION 9. Section 18.20.030 of Chapter 18.20 of Title 18 of the Palo Alto Municipal  Code is hereby amended to read as follows:     USE TABLE TO BE UPDATED TO REFERENCE 18.40.160        9     November 23, 2016                                                                                                                                                                                                                        SECTION 10. The Zoning Map adopted pursuant to Section 18.08.040 of Chapter 18.08  of Title 18 of the Palo Alto Municipal Code is hereby amended to read as follows:    The Ground Floor (GF) combining district shall be extended to additionally include: 125,  124, 116, and 102 University Ave., 525, 529, 542 and 550 High St., 539 and 535 Alma St., 115,  150, 156,158, and 164 Hamilton Ave.  The revised boundaries of the (GF) combining district are  shown on the map labeled Exhibit “A,” attached hereto and incorporated herein by reference.       SECTION 11.  This Ordinance supersedes Ordinance Nos. 5325 and 5330, and any  provision of the Palo Alto Municipal Code inconsistent with the provisions of this Ordinance.   Additionally, this Ordinance shall supersede any conflicting provisions of the SOFA II  Coordinated Area Plan.       SECTION 12.  Severability.  If any provision, clause, sentence or paragraph of this  ordinance, or the application to any person or circumstances, shall be held invalid, such  invalidity shall not affect the other provisions of this Ordinance which can be given effect  without the invalid provision or application and, to this end, the provisions of this Ordinance  are hereby declared to be severable.      SECTION 13.  Effective Date.  This ordinance shall be effective on the thirty‐first date  after the date of its adoption and shall not apply to any project where a discretionary permit or  entitlement application, other than a “use and occupancy permit,” was submitted to the City  before March 2, 2015.  Nothing in this ordinance shall be construed to affect a vested right  existing before its effective date.       SECTION 14.  CEQA.  The City Council finds that this Ordinance falls under the California  Environmental Quality Act (CEQA) exemption found  in Title 14 California Code of Regulations  Section 15061(b)(3) and 15301 because it is designed to preserve the status quo.     INTRODUCED     PASSED:     AYES:     NOES:    ABSTENTIONS:    ABSENT:     10     November 23, 2016                                                                                                                                                                                                                          ATTEST:      APPROVED:    ______________________________    ____________________________  City Clerk      Mayor    APPROVED AS TO FORM:    ____________________________   City Manager  ______________________________  Senior Deputy City Attorney    ____________________________   Director of Planning and    Community Environment  934 - 9 4 4 927 932 233 281 93 3 - 9 3 7 943 327 1001 942 469 475 744 459 832 801 427-453 920 912 362 370 900 838 846 471 459 835 - 8 5 5 460 815 840836 834 845 400 803 928930 93 1 933 83 5 - 8 3 7 831 - 8 3 3 451453 802800 810 - 8 1 6 818 - 8 2 0 828 - 8 3 0 817 - 8 1 9 825 567-569 559563 521-529 531-539 541-547 556 596 904 926 561-567 569 84 527-533 543 551 510520 558-560 903 825 837 581 575940934 813-823 501-509 511-519 539541543 515-517 809 811 420 1001 1011 3 365 1010 376 370 1020 1022 345 331 329 10611033 1027 1017-1023 980960 990 342-352 354-362 326 1019 1027 1035-1037 405 409 427 1050 426-430 432-438 10551033 1043 4671042 1036 1018 1000 448 452 450 451 439 944 471 483948952 959947925 915 933 935 425-443 451449 463-465 936-940 458 460 440 428426 1028- 1030 536 526 1001 1011- 1015 1021 525 540 542 483 904 912 468 918 926 537 965-971 505-507 519-521 939-945 931-935 923-925 518-520 59 5851048 1044 5 56 1026 1022580 574 566 539 552548 546544 9999 136 610 116-122 150 535529525 542516140 102 116124 163 145 566556 167 528 643635 635 645- 685 660- 666 620 180 164 158156 624628632 636640 644 617621 151-165 171-195 203 642640636 200 151 115 125 135 514 101 440 444 436432 427 425 117119 630616 208 228220 240 575 530- 534536540 552 177 156 201209215225 595 229231 611-623 180 508500 625-631 170172174 542 544 538- 542536534 552548546 541- 547 230-238 734 723 721 702- 730220-244 744 701 731 755757 771 200 160 728-732 762- 776740-746 250 275 270 255741 265 724 730 651 221-225 227 668 707 205 201203451449 209 219 221 233235450460470 442444 400 420 430 411 425 429 185 165 181 412 250 420 245 171-169 441- 445 435- 439 346344 333335 342 344 431 460 450 235530 220220 B 222 240 514278 274270 250 545 540 251485255 271 281 300 310 301 581 259-267 533535 537 261267 518-526 532 520-526 530-536 271 281 252 270 240-248 202- 216 228226 234238 244 242 210- 216 228-234 223- 229 209215 247-259 240 232230 311-317 251 360 344 326 340 337339 323 317 400 420 332330 314 353 355 367 305 347 265272-278 418 319 321-341 328 330 300-310 431401 366 436 426 369 335 319 390 301 315 375 307-311 325330 332 1&2330 1-3 324 326316 318 373-377 416- 424 361 314 338 340 560 345 321325 315 529 285 555 650636628 385 365 375380 345 664 325650-654 661 635300 690 675 555541-549533 535- 539 318320322324326 352 425 439-441 435429425 415-419 405403453 461 383460 502 510 526 520 540 499 467 459 439 425 555 400 436-452 456 379 370-374 376380-382 384-396 550-552 364 360 431 440-444 423 499 475 421-423 431-433 432428 460-476 450 635 446 430 400 745 720706 385744734 724-730 720712704 360 351 315737 332 300 653 -681 683 685 512 501 619 609605 518 482486496 610 630 455 400 653-687 543-545 532534 542544 550 552 554556 558560562564 470 313 334 333 325326 342 303301 229 336 308 310 312 316 318 311 331 315 319 317 321 335 426-428 427-431 183 359357 341 343 228220 356-360 347-367 351357 369-379360 258- 296 193173169159 449Units 1-4 419 350 210 204176 365 375 381 181- 187 302-316 379310 320 328 332 340 437 412 311 A-B404 313 325 327 333 407401385 411 452 378-390 360 - 1A - 1C360 - 2A - 2C360 - 3A - 3C360 - 4A - 4C360 - 5A - 5C360 - 6A 344-348 418420 482 328 456 321 325 330204 218 236 240 250-252 477 475 467 457 453249235 225 221 201 460 275 505-509 239- 243 209- 213 210- 214 513-519 460 474472228- 230130 136-144 150 465 164 166 466 446 453 176 545 548 151 134 552 135-137 141-143 100 457-459 471-479 483-485 465-467 459-461 432 470-472 565 555 535 531174170 525 507505 189185179 160164152144 171A 171B 535 558 201 516512 520 209 215 223 231 521 580 239-245 530-540 544-554 212- 216 218-222 175 168160150 181177169 145 580 110 590 151155 190 194192 577575 333 335- 337 351 457451 465463 489-499360 530 480 420 430 480 463 451443437411405 419405401 441 480-498 347351 355 359 525 430 473 332- 342 425415 400 570568 556 550 543 327321315305 343 515 525 551 555 328 309-311 518-528 536-540 552-554 558-562 573 591-599 557-571 330-332 318-320 406-418 417 542548568 524 550 500-528 578 564 550 546 540 530 531-535 541 505 525 537 555 565 571 530 520 440-446 579 567 600 555 581 420-438 437 566 224 228 244 579 575 565 559 2 604 576 566 3422222222 505 610-616 678 676 674672 642 636-638 567 555 711 701705 725 525 759 730718704 734 738-740 760 746-750 71 8 89 850 530 6097760 1 18 1028 1036 1044 1052 1013 1021 1029 1037 1047 1057 10041000 1006 1020 1024 1030 1040 1048 251 10911085 1035 10271023 1017 1001 1060 1043 15 1090 1080 1040 1028 1053 1055 623 137 145 700 780 790 744 111150 753100 825805 33 51 75 63 841 44 675 49 41 711 799 703 100 101 139654 625 1019 1027 A B 1035 1052 1044 1061 10 10101045 1028 1020160 1001 1005 1009 1015 1027 1037 1010 1024 1004 930 975945929931 948 181 940 960 145900 955 999875 853 925 81 855 901-907 909 87 98 1038 1036 917921 925 735 849 707 847 842828 820248 230-232 212 825 829833 839 800 812818 882 165831 801 815 809801 841 791153 718 774 761 795745 201 209 834836 845 895 926 190 934 942 948 203 209 219 225 929200 240 904 910 926 270 935 904 909 909A 101 109 25 217 222 148 171 421 130 312 318 324 317 301 186 192 323 329 151 325 329 334 131 129 101 301 235 258 212 163 115 291247 131 141 145 150 210 201 207 164 202 158 180 165 147 143 125 149 101 150 170172 165167169171 101- 119 121 123 129 139 235 251249 252 247 244250 177220 261 251-257 205245231225213 205 170 172 206 234240 183 251 270 241-247 215- 237 210- 216 124 124A 132 144 152 147 221-243 275 220 246 250 260 166162130 129 160 154 116112180 - 180A 171 219 219 235 262 202 245 254 252 250 151 159 203 215 221 313-317318 220-224 238 319-323311-317 339327-335 197185 177 170 451 422422 A 429 437 121 151 187- 197 309167-169 165 135 143149155 302310 314320 161 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206 2 1032 1035 1037 453 167 739 260 840 650 642 351 451 551 375 530 643 415 12 700 55 802 99 89 87 901 560564568572576580584588592594 906908 910912914 916918920 922924 548 423 668 901 305-313 423 405 352354 611 320322 346 323 470 471 484 115 528 426 264 430 1001 508 756 - 760 940 930 544546 51 7 549 454-458 211213 151 160 257 433-457 482 330 349 117 401 539 440 691 755 67 312 202 651 443445 447 716 218 398 998 262 335 218 640-646506 119121 120 149 327469 469 261 263 201 303 401 403 254 401 91 40 101 150 819 301 725 595 705 363 541 321319 600 146 411 - 419 229 355365 111 121 548 597 143 127 602604 502 504506 432434436 HIGH STREET RAMONA STREET EMERSON STREET QUARRY ROAD EMERSON STREET HOMER AVENUE EL CAMINO REALL L EL CAMINO REAL BRYANT STREET PALO ALT O AVEN U PALO ALTO AVENUE HA W T H O R N E A V E N U E EMERSON STREET RAMONA STREET EMERSON STREET HA W T H O R N E A V E N U E HIGH STREET EVERETT AVENUE EVERETT AVENUE HIGH STREET ALMA STREET ALMA STREET ALMA STREET LYTTON AVENUE EL CAMINO REAL QUARRY ROAD ALMA STREET EMERSON STREET RAMONA STREET LYTTON AVENUE UNIVERSITY AVENUE RAMONA STREET BRYANT STREET HIGH STREET EMERSON STREET ALMA STREET EMERSON STREET HIGH STREET HIGH STREET HAMILTON AVENUE HAMILTON AVENUE EMERSON STREET HAMILTON AVENUE GILMAN STREET WAVERLEY STREET BRYANT STREET FOREST AVENUE FOREST AVENUE BRYANT STREET RAMONA STREET RAMONA STREET BRYANT STREET FLORENCE STREET KIPLING STREET LYTTON AVENUE WAVERLEY STREETWAVERLEY STREET EVERETT AVENUE EVERETT AVENUE BRYANT STREET WAVERLEY STREET HAWTHORNE AVENUE RAMONA STREET BRYANT STREET LYTTON AVENUE UNIVERSITY AVENUE COWPER STREET KIPLING STREET UNIVERSITY AVENUE UNIVERSITY AVENUE COWPER STREET WAVERLEY STREET HAMILTON AVENUE RUTHVEN AVENUE REET TASSO STREET RUTHVEN AVENUE WEBSTER STREET HAWT COWPER STREET COWPER STREET WAVERLEY STREET HAWTHORNE AVENUE HAWTHORNE AVENUE KIPLING STREET EVERETT AVENUE COWPER STREET WEBSTER STREET EVE WEBSTER STREET WEBSTER STREET LYTTON AVENUE TASSO STREET SCOTT STREET ADDISON AVENUE BRYANT STREET BRYANT STREET ADDISON AVENUE HAMILTON AVENUE COWPER STREET FOREST AVENUE FOREST AVENUE WAVERLEY STREET BRYANT STREET HOMER AVENUE WAVERLEY STREET CHANNING AVENUE RAMONA STREET RAMONA STREET WEBSTER STREET WEBSTER STREET COWPER STREET HOMER AVENUE HOMER AVENUE COWPER STREET KIPLING STREET CHANNING AVENUE WAVERLEY STREET ADDISON AVENUE LY WEBSTER STREET WAVERLEY STREET WEBSTER STREET ADDISON AVENUE COWPER STREET WEBSTER STREETWEBSTER STREET CHANNING AVENUE C COWPER STREET U N I V ER S I T Y C I R C L E EVERETT COURT LANE 39 LANE B EASTLANE 7 EASTLANE 5 EAST LANE 6 EAST LANE 20 EAST LANE 30 LANE 20 WEST LANE 21 MITCHELL LANE LANE 33 LANE 15 EAST BRYANT COURT PAULSEN LANE LANE 12 WEST LANE 11 WEST CENTENNIAL WALK LANE D EAST LANE D WEST PEAR LANE DOWNING LANE LANE 56 EL CAMINO REAL PALO AVENUE SHOPPING CENTER W AY PISTACHE PLACE PENINSULA CORRIDOR JOINT POWERS BOARDNINSULA CORRIDOR JOINT POWERS BOARD P ALM D RIV E PALO ROAD EMERSON STREET EMERSON STREET HIGH STREET HIGH STREET HIGH STREET ALMA STREET ALMA STREET ALMA STREET ALMA STREET ALMA STREETFOREST AVENUE CHANNING AVENUE HOMER AVENUE ADDISON AVENUE EL CAMINO REALEL CAMINO REAL EL CAMINO REALEL CAMINO REAL EL CAMINO REALEL CAMINO REAL EMBARCADERO ROAD WELLS AVENUE URBAN LANE URBAN LANE ENCINA AVENUE ENCINA AVENUE MEDICAL FOUN D ATION WAY LANE 7 WEST LANE 8 WEST LANE A WEST LANE B WEST CHANNING AVENUE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Transportation Station University Avenue/Downtown Business District - Commercial Center Existing Ground Floor (GF) Combining District Zoned Parcels Proposed Ground Floor (GF) Combining District Zoned Parcels SOFA II CAP 0'550' Pr o p o s e d G r o u n d F l o o r Co m b i n i n g D i s t r i c t Ad d i t i o n s re v . 2 0 1 6 1 2 0 6 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo AltoRRivera, 2016-12-08 09:48:00 (\\cc-maps\gis$\gis\admin\Personal\RRivera.mdb) Exhibit A 934 - 9 4 4 927 932 233 281 93 3 - 9 3 7 943 327 1001 942 469 475 744 459 832 801 427-453 920 912 362 370 900 838 846 471 459 835 - 8 5 5 460 815 840836 834 845 400 803 928930 93 1 933 83 5 - 8 3 7 831 - 8 3 3 451453 802800 810 - 8 1 6 818 - 8 2 0 828 - 8 3 0 817 - 8 1 9 825 567-569 559563 521-529 531-539 541-547 556 596 904 926 561-567 569 84 527-533 543 551 510520 558-560 903 825 837 581 575940934 813-823 501-509 511-519 539541543 515-517 809 811 420 1001 1011 3 365 1010 376 370 1020 1022 345 331 329 10611033 1027 1017-1023 980960 990 342-352 354-362 326 1019 1027 1035-1037 405 409 427 1050 426-430 432-438 10551033 1043 4671042 1036 1018 1000 448 452 450 451 439 944 471 483948952 959947925 915 933 935 425-443 451449 463-465 936-940 458 460 440 428426 1028- 1030 536 526 1001 1011- 1015 1021 525 540 542 483 904 912 468 918 926 537 965-971 505-507 519-521 939-945 931-935 923-925 518-520 59 5851048 1044 5 56 1026 1022580 574 566 539 552548 546544 9999 136 610 116-122 150 535529525 542516140 102 116124 163 145 566556 167 528 643635 635 645- 685 660- 666 620 180 164 158156 624628632 636640 644 617621 151-165 171-195 203 642640636 200 151 115 125 135 514 101 440 444 436432 427 425 117119 630616 208 228220 240 575 530- 534536540 552 177 156 201209215225 595 229231 611-623 180 508500 625-631 170172174 542 544 538- 542536534 552548546 541- 547 230-238 734 723 721 702- 730220-244 744 701 731 755757 771 200 160 728-732 762- 776740-746 250 275 270 255741 265 724 730 651 221-225 227 668 707 205 201203451449 209 219 221 233235450460470 442444 400 420 430 411 425 429 185 165 181 412 250 420 245 171-169 441- 445 435- 439 346344 333335 342 344 431 460 450 235530 220220 B 222 240 514278 274270 250 545 540 251485255 271 281 300 310 301 581 259-267 533535 537 261267 518-526 532 520-526 530-536 271 281 252 270 240-248 202- 216 228226 234238 244 242 210- 216 228-234 223- 229 209215 247-259 240 232230 311-317 251 360 344 326 340 337339 323 317 400 420 332330 314 353 355 367 305 347 265272-278 418 319 321-341 328 330 300-310 431401 366 436 426 369 335 319 390 301 315 375 307-311 325330 332 1&2330 1-3 324 326316 318 373-377 416-424 361 314 338 340 560 345 321325 315 529 285 555 650636628 385 365 375380 345 664 325650-654 661 635300 690 675 555541-549533 535- 539 318320322324326 352 425 439-441 435429425 415-419 405403453 461 383460 502 510 526 520 540 499 467 459 439 425 555 400 436-452 456 379 370-374 376380-382 384-396 550-552 364 360 431 440-444 423 499 475 421-423 431-433 432428 460-476 450 635 446 430 400 745 720706 385744734 724-730 720712704 360 351 315737 332 300 653 -681 683 685 512 501 619 609605 518 482486496 610 630 455 400 653-687 543-545 532534 542544 550 552 554556 558560562564 470 313 334 333 325326 342 303301 229 336 308 310 312 316 318 311 331 315 319 317 321 335 426-428 427-431 183 359357 341 343 228220 356-360 347-367 351357 369-379360 258- 296 193173169159 449Units 1-4 419 350 210 204176 365 375 381 181- 187 302-316 379310 320 328 332 340 437 412 311 A-B404 313 325 327 333 407401385 411 452 378-390 360 - 1A - 1C360 - 2A - 2C360 - 3A - 3C360 - 4A - 4C360 - 5A - 5C360 - 6A 344-348 418420 482 328 456 321 325 330204 218 236 240 250-252 477 475 467 457 453249235 225 221 201 460 275 505-509 239- 243 209- 213 210- 214 513-519 460 474472228- 230130 136-144 150 465 164 166 466 446 453 176 545 548 151 134 552 135-137 141-143 100 457-459 471-479 483-485 465-467 459-461 432 470-472 565 555 535 531174170 525 507505 189185179 160164152144 171A 171B 535 558 201 516512 520 209 215 223 231 521 580 239-245 530-540 544-554 212- 216 218-222 175 168160150 181177169 145 580 110 590 151155 190 194192 577575 333 335- 337 351 457451 465463 489-499360 530 480 420 430 480 463 451443437411405 419405401 441 480-498 347 351 355 359 525 430 473 332- 342 425415 400 570568 556 550 543 327321315305 343 515 525 551 555 328 309-311 518-528 536-540 552-554 558-562 573 591-599 557-571 330-332 318-320 406-418 417 542548568 524 550 500-528 578 564 550 546 540 530 531-535 541 505 525 537 555 565 571 530 520 440-446 579 567 600 555 581 420-438 437 566 224 228 244 579 575 565 559 2 604 576 566 3422222222 505 610-616 678 676 674672 642 636-638 567 555 711 701705 725 525 759 730718704 734 738-740 760 746-750 71 8 89 850 530 6097760 1 18 1028 1036 1044 1052 1013 1021 1029 1037 1047 1057 10041000 1006 1020 1024 1030 1040 1048 251 10911085 1035 10271023 1017 1001 1060 1043 15 1090 1080 1040 1028 1053 1055 623 137 145 700 780 790 744 111150 753100 825805 33 51 75 63 841 44 675 49 41 711 799 703 100 101 139654 625 1019 1027 A B 1035 1052 1044 1061 10 10101045 1028 1020160 1001 1005 1009 1015 1027 1037 1010 1024 1004 930 975945929931 948 181 940 960 145900 955 999875 853 925 81 855 901-907 909 87 98 1038 1036 917921 925 735 849 707 847 842828 820248 230-232 212 825 829833 839 800 812818 882 165831 801 815 809801 841 791153 718 774 761 795745 201 209 834836 845 895 926 190 934 942 948 203 209 219 225 929200 240 904 910 926 270 935 904 909 909A 101 109 25 217 222 148 171 421 130 312 318 324 317 301 186 192 323 329 151 325 329 334 131 129 101 301 235 258 212 163 115 291247 131 141 145 150 210 201 207 164 202 158 180 165 147 143 125 149 101 150 170172 165167169171 101- 119 121 123 129 139 235 251249 252 247 244250 177220 261 251-257 205245 231225213 205 170 172 206 234240 183 251 270 241-247 215- 237 210- 216 124 124A 132 144 152 147 221-243 275 220 246 250 260 166162130 129 160 154 116112180 - 180A 171 219 219 235 262 202 245 254 252 250 151 159 203 215 221 313-317318 220-224 238 319-323311-317 339327-335 197185 177 170 451 422422 A 429 437 121 151 187- 197 309167-169 165 135 143149155 302310 314320 161 171 101 115 110 120 354 344 334 364 160- 164126 134 150 168 181 179 542-550 531-539 532 759 223-239 905 911-917907 188190 251- 293 202 206 208 210 212 216 220 1008 159 275 539 201 400 27 168 865857 302 324 340 795 848 918 903 903A 408412 440 483A - F 435 751 735 745 532 210 727 733 335 328 330 345 214 350 800 806 441 441A 230302306308 312316 301 303 305 307 309 325 251 807 821 829 801 818-824 420 424 430 832A 832 842A 842 852A 852 862A 862 872A 872 351A 351 355A 355 359A 359 363A 363 367A 367 425 911 943 951 918 936 940 944 271 253 241 301 319 919A919 935 949 928 936 940-946 353 264 367 361 310 1005 1010 1020 423425 457-467 469-471473-481 454 729 733-743 734-740 724-732 936 824 826828 920 949 943941 715 95 445 324 328 545547549 590 425447 827 565585595 904 315 507 561 706 536 200 100 280-290 150158 162 164 276 516 698 161 159 157777 132 127 180 528 120 247 372 524 548550 538 152 207 345 336 515 658 227 27 29 539 115 550 321 558 965 140 350 808 915 461 435433 945 1012 421 727 218 255 206 2 1032 1035 1037 453 167 739 260 840 650 642 351 451 551 375 530 643 415 12 700 55 802 99 89 87 901 560564568572576580584588592594 906908 910912914 916918920 922924 548 423 668 901 305-313 423 405 352354 611 320322 346 323 470 471 484 115 528 426 264 430 1001 508 756 - 760 940 930 544546 51 7 549 454-458 211213 151 160 257 433-457 482 330 349 117 401 539 440 691 755 67 312 202 651 443445 447 716 218 398 998 262 335 218 640-646506 119121 120 149 327469 469 261 263 201 303 401 403 254 401 91 40 101 150 819 301 725 595 705 363 541 321319 600 146 411 - 419 229 355365 111 121 548 597 143 127 602604 502 504506 432434436 HIGH STREET RAMONA STREET EMERSON STREET QUARRY ROAD EMERSON STREET HOMER AVENUE EL CAMINO REALL L EL CAMINO REAL BRYANT STREET PALO ALT O AVEN U PALO ALTO AVENUE HA W T H O R N E A V E N U E EMERSON STREET RAMONA STREET EMERSON STREET HA W T H O R N E A V E N U E HIGH STREET EVERETT AVENUE EVERETT AVENUE HIGH STREET ALMA STREET ALMA STREET ALMA STREET LYTTON AVENUE EL CAMINO REAL QUARRY ROAD ALMA STREET EMERSON STREET RAMONA STREET LYTTON AVENUE UNIVERSITY AVENUE RAMONA STREET BRYANT STREET HIGH STREET EMERSON STREET ALMA STREET EMERSON STREET HIGH STREET HIGH STREET HAMILTON AVENUE HAMILTON AVENUE EMERSON STREET HAMILTON AVENUE GILMAN STREET WAVERLEY STREET BRYANT STREET FOREST AVENUE FOREST AVENUE BRYANT STREET RAMONA STREET RAMONA STREET BRYANT STREET FLORENCE STREET KIPLING STREET LYTTON AVENUE WAVERLEY STREETWAVERLEY STREET EVERETT AVENUE EVERETT AVENUE BRYANT STREET WAVERLEY STREET HAWTHORNE AVENUE RAMONA STREET BRYANT STREET LYTTON AVENUE UNIVERSITY AVENUE COWPER STREET KIPLING STREET UNIVERSITY AVENUE UNIVERSITY AVENUE COWPER STREET WAVERLEY STREET HAMILTON AVENUE RUTHVEN AVENUE REET TASSO STREET RUTHVEN AVENUE WEBSTER STREET HAWT COWPER STREET COWPER STREET WAVERLEY STREET HAWTHORNE AVENUE HAWTHORNE AVENUE KIPLING STREET EVERETT AVENUE COWPER STREET WEBSTER STREET EVE WEBSTER STREET WEBSTER STREET LYTTON AVENUE TASSO STREET SCOTT STREET ADDISON AVENUE BRYANT STREET BRYANT STREET ADDISON AVENUE HAMILTON AVENUE COWPER STREET FOREST AVENUE FOREST AVENUE WAVERLEY STREET BRYANT STREET HOMER AVENUE WAVERLEY STREET CHANNING AVENUE RAMONA STREET RAMONA STREET WEBSTER STREET WEBSTER STREET COWPER STREET HOMER AVENUE HOMER AVENUE COWPER STREET KIPLING STREET CHANNING AVENUE WAVERLEY STREET ADDISON AVENUE LY WEBSTER STREET WAVERLEY STREET WEBSTER STREET ADDISON AVENUE COWPER STREET WEBSTER STREETWEBSTER STREET CHANNING AVENUE C COWPER STREET U N I V ER S I T Y C I R C L E EVERETT COURT LANE 39 LANE B EASTLANE 7 EASTLANE 5 EAST LANE 6 EAST LANE 20 EAST LANE 30 LANE 20 WEST LANE 21 MITCHELL LANE LANE 33 LANE 15 EAST BRYANT COURT PAULSEN LANE LANE 12 WEST LANE 11 WEST CENTENNIAL WALK LANE D EAST LANE D WEST PEAR LANE DOWNING LANE LANE 56 EL CAMINO REAL PALO AVENUE SHOPPING CENTER W AY PISTACHE PLACE PENINSULA CORRIDOR JOINT POWERS BOARDNINSULA CORRIDOR JOINT POWERS BOARD P ALM D RIV E PALO ROAD EMERSON STREET EMERSON STREET HIGH STREET HIGH STREET HIGH STREET ALMA STREET ALMA STREET ALMA STREET ALMA STREET ALMA STREETFOREST AVENUE CHANNING AVENUE HOMER AVENUE ADDISON AVENUE EL CAMINO REALEL CAMINO REAL EL CAMINO REALEL CAMINO REAL EL CAMINO REALEL CAMINO REAL EMBARCADERO ROAD WELLS AVENUE URBAN LANE URBAN LANE ENCINA AVENUE ENCINA AVENUE MEDICAL FOUN D ATION WAY LANE 7 WEST LANE 8 WEST LANE A WEST LANE B WEST CHANNING AVENUE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Transportation Station University Avenue/Downtown Business District - Commercial Center Existing Ground Floor (GF) Combining District Zoned Parcels Proposed Ground Floor (GF) Combining District Zoned Parcels SOFA II CAP 0' 550' Pr o p o s e d G r o u n d F l o o r Co m b i n i n g D i s t r i c t Ad d i t i o n s re v . 2 0 1 6 1 2 0 6 CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo AltoRRivera, 2016-12-08 09:48:00 (\\cc-maps\gis$\gis\admin\Personal\RRivera.mdb) Ordinance No. 5325 Urgency Interim Ordinance of the Council of the City of Palo Alto Adopting a Temporary Moratorium on the Conversion of Ground Floor Retail and "Retail Like" Uses to Other Uses Citywide FINDINGS A. The City of Palo Alto has long been considered the birth place of Silicon Valley. With its proximity to Stanford University, its international reputation, its deep ties to technology firms, its highly rated public school system and its ample public parks, open space and community centers, Palo Alto continues to serve as a hub for technology based business. B. Palo Alto is considered one of Silicon Valley's most desirable office markets. According to one study Class A office rates have climbed 49 percent since the start of 2010. The same study reported Class B office space increasing by 114.4% since 2010. C. In particular, average commercial rental rates have gone up significantly from 2013 to 2015. In 2013 the average monthly rental rate citywide for office was $4.57 per square foot. That rate increased to $5.12 in 2015. While retail rents have also increased during this period, retail rents are considerably lower than office rents. The average monthly rental rate for retail in 2013 was $4.21 and in 2015 was $4.88. D. Price increases have been even more significant in the downtown area. In 2013 the average downtown monthly office rent was $6.37. In 2015 the rate increased to $7.33. E. At the end of 2014, Palo Alto's downtown vacancy rate was a low 2.83 percent, according to a report prepared by Newmark Cornish & Carey. F. These record high monthly rental rates for office and low vacancy rates have created financial incentives to replace current retail use with office use where such conversions are permitted by the City's zoning ordinance. These economic pressures are more severe in the downtown and California Avenue commercial areas but exist throughout the City. G. The data submitted by the City to support the Valley Transportation Authority's Congestion Management Plan (CMP) each fiscal year suggests that there has been a loss of approximately 70,000 square feet of retail-type uses in the period from 2008 to the present. The CMP data is broad in the sense that it inclupes uses like automotive services in the "retail" category even though they are considered separate uses in the City's zoning ordinance. However any overstatement of the trend towards less retail is likely to be offset by the data's reliance on a list of discretionary applications processed by the City, since there have also been recent conversions of retail space to office space that did not require discretionary approvals and are not included in the 70,000 square foot number. 1 150429 cs 0131335 May 11,2015 H. City residents have seen this occurring in the City's commercial districts as the City's Architectural Review Board has considered projects like those affecting Spagos restaurant at 265 Lytton, lnhabiture at 240 Hamilton Ave, Palo Alto Bowl at 4301 El Camino Real, and Club Illusions Restaurant at 260 California Avenue. In addition, familiar retail businesses like the Zibibbo restaurant have closed and their spaces have been acquired and occupied by non-retailers. Likewise the old location for Fraiche Yogurt, which moved from Emerson Street to Hamilton Avenue, was immediately re-purposed as office space. I. Based on these trends, on March 2, 2015, the Palo Alto City Council asked staff to consider whether zoning-based protections for ground floor retail uses need to be strengthened where they currently exist and expanded to areas of the City where they do not. J. On April 6, 2015, the City Council discussed these issues in detail and directed staff to prepare an urgency ordinance that would preserve existing ground floor retail and retail-like uses until permanent zoning revisions can be prepared. K. This direction is consistent with the City's existing Comprehensive Plan, which identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale "centers" with a mix of uses as focal points for neighborhoods (Goal L- 4). Policy L-20 suggests that the City "encourage street frontages that contribute to retail vitality ... " and Policy B-5 calls on the City to "maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City's economic base." L. Palo Alto is in the process of updating its Comprehensive Plan, and it is expected that the updated Comprehensive Plan will contain additional policies and programs designed to preserve existing retail uses in the City. M. The public's health, safety and welfare are currently and immediately detrimentally affected as neighborhood-serving retail service and related uses are priced-out by rising rents and replaced by uses that do not provide similar services or activate the street frontage by creating pedestrian activity and visual interest (i.e. shop windows and doors). These changes affect neighborhood quality of life, and mean that local residents have to drive to similar retail destinations in other locations, diminishing the public health benefit when residents can walk to needed services and increasing traffic congestion, vehicle miles traveled and greenhouse gas emissions. N. Unless abated, the City's actions to approve conversion of ground floor spaces from retail to other uses will exacerbate the reduction of retail and changes described above, resulting in the need for the proposed interim ordinance. 0. The City Council desires on an interim basis to temporarily suspend conversions of retail and retail like uses to office throughout the City as such conversions may be in conflict with the City's Comprehensive Plan and zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study 2 150520 cs 0131335 May 11,2015 within a reasonable time. P. The possible extension of this interim ordinance beyond 45 days would not have a material effect on the development of projects with a significant component of multifamily housing because a specific exemption has been included to address this requirement of State law. Q. This urgency interim ordinance is adopted in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings. A 4/5 vote is required for adoption. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. The following Section 18.85.100 (Retail Preservation) is added to a new Chapter 18.85 entitled "Interim Zoning Ordinances" to the Palo Alto Municipal Code to read as follows: "18.85.100 Retail Preservation 18.85.101 Definitions. For the purposes of this Ordinance, the term "Retail" shall include a modified definition of "Retail Service" as well as the "Retail Like" uses defined below: (a) Retail Service: A use predominantly engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use, including but not limited to the following: groceries, meat, vegetables, dairy products, baked goods, candy, and other food products; liquor and bottled goods, household cleaning and maintenance products; drugs, cards, and stationery, notions, books, tobacco products, cosmetics, and specialty items; flowers, plants, hobby materials, toys, household pets and supplies, and handcrafted items; apparel, jewelry, fabrics, and like items; cameras, photography services, household electronic equipment, records, sporting equipment, kitchen utensils, home furnishing and appliances, art supplies and framing, arts and antiques, paint and wallpaper, carpeting and floor covering, interior decorating services, office supplies, musical instruments, hardware and homeware, and garden supplies; bicycles; mopeds and automotive parts and accessories (excluding service and installation); cookie shops, ice cream stores and delicatessens. 150520 cs 0131335 (b) Retail Like Uses including but not limited to: (1) Eating and drinking service as defined in Section 18.04 (47); (2) Hotels as defined in Section 18.04 (73); (3) Personal services as defined in Section 18.04.030 (115); (4) Theaters; 3 May 11, 2015 (5) Travel agencies; (6) Commercial recreation; (7) Commercial nurseries; (8) Auto dealerships defined in Section 18.040.030(a)(12.5); (9) Day Care Centers defined in Section 18.040.030(a)(42); (10) Service Stations; and (11) Automotive Services. To qualify as a Retail use under this definition, the use shall be generally open to the public. 18.85.102 Moratorium on Retail Conversions. The City Council hereby enacts this Urgency Interim Ordinance establishing a moratorium on the conversion of any ground floor Retail use permitted or operating as of March 2, 2015 or thereafter to any other non-Retail use anywhere in the City. (a) 25% Exemption Suspended. During the pendency of this Ordinance, Section 18.30(C).020 permitting not more than twenty-five percent ofthe ground floor area not fronting on a street to be occupied by a non-retail service use otherwise permitted in the applicable underlying CD district shall be suspended. (b) Conditionally Permitted Uses Suspended. During the pendency of this Ordinance, no ground floor Retail use operating as of March 2, 2015 may be replaced by any other non-Retail use, including uses for which Conditional Use Permits are currently allowed. (c) Legal Nonconforming Uses. During the pendency of this Ordinance legal nonconforming Retail use shall remain as a grandfathered use and shall not be subject to the change, discontinuance, or termination provisions of Chapter 18.70. (d) Conversion of Basements. During the pendency ofthis Ordinance, elimination of or conversion of basement space currently in Retail use or in use for retail support purposes shall be prohibited. 18.85.103 Exemptions. The following shall be exempt from this Ordinance: (a) Pipeline Projects. Any Retail use where a discretionary permit or entitlement application to convert such Retail use to a non-Retail use was submitted to the City on or before March 2, 2015 and is currently pending. For purposes of this Ordinance a 11Use and Occupancy" Permit Application shall not constitute a discretionary permit. (b) Vested Rights. Any Retail use for which an applicant has received a valid building permit from the City and performed substantial work and incurred substantial liabilities in good faith reliance on such permit as of the date ofthis Ordinance. 4 150520 cs 0131335 May 11,2015 18.85.104 Waivers and Adjustments. The following shall be grounds for a request for waiver or adjustment of this Ordinance: (a) Economic Hardship. An applicant may request that the requirements of this Ordinance be adjusted or waived based on a showing that applying the requirements of this Ordinance would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property. (b) Multi-family uses. Any project which (i) contains four or more housing units, (ii) the multi-family housing component constitutes at least one-third or more of the total square footage of the project and (iii) otherwise complies with all sections of the Zoning Code may apply for a waiver or modification from this Ordinance upon a finding that this Ordinance would have a material effect on the multi-family component of such project. (c) Documentation. The applicant shall bear the burden of presenting substantial evidence to support a waiver or modification request under this Section and shall set forth in detail the factual and legal basis for the claim, including all supporting technical documentation. Any such request under this section shall be submitted to the Planning and Community Development Director together with an economic analysis or other supporting documentation and shall be acted upon by the City Council. 18.85.105 Reconstruction. Any ground floor Retail use existing on or after March 2, 2015 may be demolished and rebuilt provided that the portion of square footage used as Retail use on or after March 2, 2015 is not reduced except that Retail square footage may be reduced by the minimum amount needed to provide access to any new upper floor and/or lower level parking. 18.85.106 Applicability to Current Requirements. Nothing in this ordinance shall alter requirements of site-specific Planned Community zoning ordinances or adopted conditions of approval. Nothing in the ordinance shall be construed to waive the requirement for a conditional use permit or other entitlement where such requirements currently exist." SECTION 3. Study. The City Council directs the Department of Planning & Community Environment to consider and study possible amendments to the Comprehensive Plan and zoning ordinance to preserve existing Retail uses. SECTION 4. Written Report. At least ten (10) days before this Urgency Ordinance or any extension expires, the City Council shall issue a written report describing the measures taken to alleviate the condition which led to the adoption of this Urgency Interim Ordinance. SECTION 5. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such 5 150520 cs 0131335 May 11,2015 invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 6. Effective Period. This Urgency Ordinance shall take full force and effect immediately upon adoption. In accordance with Government Code Section 65856, this Ordinance shall be in full force and effect for a period offorty-five (45) days from adoption. This Ordinance shall expire on June 25, 2015 unless this period is extended by the City Council as provided in Government Code Section 65858. SECTION 7. ~-The City Council finds that this Ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo. INTRODUCED AND PASSED: May 11, 2015 AYES: BERMAN, BURT, DUBOIS, FILSETH, HOLMAN, KNISS, SCHARFF, SCHMID, WOLBACH NOES: ABSTENTIONS: ABSENT: ATTEST: ~~ APPROVED: ~~~ City Clerk Mayor APPROVED AS TO FORM: ./~~- Senior Assistant City/.: t: 6 150520 cs 0131335 May 11,2015 Ordinance No. 5325 Urgency Interim Ordinance of the Council of the City of Palo Alto Adopting a Temporary Moratorium on the Conversion of Ground Floor Retail and "Retail Like" Uses to Other Uses Citywide FINDINGS A. The City of Palo Alto has long been considered the birth place of Silicon Valley. With its proximity to Stanford University, its international reputation, its deep ties to technology firms, its highly rated public school system and its ample public parks, open space and community centers, Palo Alto continues to serve as a hub for technology based business. B. Palo Alto is considered one of Silicon Valley's most desirable office markets. According to one study Class A office rates have climbed 49 percent since the start of 2010. The same study reported Class B office space increasing by 114.4% since 2010. C. In particular, average commercial rental rates have gone up significantly from 2013 to 2015. In 2013 the average monthly rental rate citywide for office was $4.57 per square foot. That rate increased to $5.12 in 2015. While retail rents have also increased during this period, retail rents are considerably lower than office rents. The average monthly rental rate for retail in 2013 was $4.21 and in 2015 was $4.88. D. Price increases have been even more significant in the downtown area. In 2013 the average downtown monthly office rent was $6.37. In 2015 the rate increased to $7.33. E. At the end of 2014, Palo Alto's downtown vacancy rate was a low 2.83 percent, according to a report prepared by Newmark Cornish & Carey. F. These record high monthly rental rates for office and low vacancy rates have created financial incentives to replace current retail use with office use where such conversions are permitted by the City's zoning ordinance. These economic pressures are more severe in the downtown and California Avenue commercial areas but exist throughout the City. G. The data submitted by the City to support the Valley Transportation Authority's Congestion Management Plan (CMP) each fiscal year suggests that there has been a loss of approximately 70,000 square feet of retail-type uses in the period from 2008 to the present. The CMP data is broad in the sense that it inclupes uses like automotive services in the "retail" category even though they are considered separate uses in the City's zoning ordinance. However any overstatement of the trend towards less retail is likely to be offset by the data's reliance on a list of discretionary applications processed by the City, since there have also been recent conversions of retail space to office space that did not require discretionary approvals and are not included in the 70,000 square foot number. 1 150429 cs 0131335 May 11,2015 H. City residents have seen this occurring in the City's commercial districts as the City's Architectural Review Board has considered projects like those affecting Spagos restaurant at 265 Lytton, lnhabiture at 240 Hamilton Ave, Palo Alto Bowl at 4301 El Camino Real, and Club Illusions Restaurant at 260 California Avenue. In addition, familiar retail businesses like the Zibibbo restaurant have closed and their spaces have been acquired and occupied by non-retailers. Likewise the old location for Fraiche Yogurt, which moved from Emerson Street to Hamilton Avenue, was immediately re-purposed as office space. I. Based on these trends, on March 2, 2015, the Palo Alto City Council asked staff to consider whether zoning-based protections for ground floor retail uses need to be strengthened where they currently exist and expanded to areas of the City where they do not. J. On April 6, 2015, the City Council discussed these issues in detail and directed staff to prepare an urgency ordinance that would preserve existing ground floor retail and retail-like uses until permanent zoning revisions can be prepared. K. This direction is consistent with the City's existing Comprehensive Plan, which identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale "centers" with a mix of uses as focal points for neighborhoods (Goal L- 4). Policy L-20 suggests that the City "encourage street frontages that contribute to retail vitality ... " and Policy B-5 calls on the City to "maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City's economic base." L. Palo Alto is in the process of updating its Comprehensive Plan, and it is expected that the updated Comprehensive Plan will contain additional policies and programs designed to preserve existing retail uses in the City. M. The public's health, safety and welfare are currently and immediately detrimentally affected as neighborhood-serving retail service and related uses are priced-out by rising rents and replaced by uses that do not provide similar services or activate the street frontage by creating pedestrian activity and visual interest (i.e. shop windows and doors). These changes affect neighborhood quality of life, and mean that local residents have to drive to similar retail destinations in other locations, diminishing the public health benefit when residents can walk to needed services and increasing traffic congestion, vehicle miles traveled and greenhouse gas emissions. N. Unless abated, the City's actions to approve conversion of ground floor spaces from retail to other uses will exacerbate the reduction of retail and changes described above, resulting in the need for the proposed interim ordinance. 0. The City Council desires on an interim basis to temporarily suspend conversions of retail and retail like uses to office throughout the City as such conversions may be in conflict with the City's Comprehensive Plan and zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study 2 150520 cs 0131335 May 11,2015 within a reasonable time. P. The possible extension of this interim ordinance beyond 45 days would not have a material effect on the development of projects with a significant component of multifamily housing because a specific exemption has been included to address this requirement of State law. Q. This urgency interim ordinance is adopted in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings. A 4/5 vote is required for adoption. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. The following Section 18.85.100 (Retail Preservation) is added to a new Chapter 18.85 entitled "Interim Zoning Ordinances" to the Palo Alto Municipal Code to read as follows: "18.85.100 Retail Preservation 18.85.101 Definitions. For the purposes of this Ordinance, the term "Retail" shall include a modified definition of "Retail Service" as well as the "Retail Like" uses defined below: (a) Retail Service: A use predominantly engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use, including but not limited to the following: groceries, meat, vegetables, dairy products, baked goods, candy, and other food products; liquor and bottled goods, household cleaning and maintenance products; drugs, cards, and stationery, notions, books, tobacco products, cosmetics, and specialty items; flowers, plants, hobby materials, toys, household pets and supplies, and handcrafted items; apparel, jewelry, fabrics, and like items; cameras, photography services, household electronic equipment, records, sporting equipment, kitchen utensils, home furnishing and appliances, art supplies and framing, arts and antiques, paint and wallpaper, carpeting and floor covering, interior decorating services, office supplies, musical instruments, hardware and homeware, and garden supplies; bicycles; mopeds and automotive parts and accessories (excluding service and installation); cookie shops, ice cream stores and delicatessens. 150520 cs 0131335 (b) Retail Like Uses including but not limited to: (1) Eating and drinking service as defined in Section 18.04 (47); (2) Hotels as defined in Section 18.04 (73); (3) Personal services as defined in Section 18.04.030 (115); (4) Theaters; 3 May 11, 2015 (5) Travel agencies; (6) Commercial recreation; (7) Commercial nurseries; (8) Auto dealerships defined in Section 18.040.030(a)(12.5); (9) Day Care Centers defined in Section 18.040.030(a)(42); (10) Service Stations; and (11) Automotive Services. To qualify as a Retail use under this definition, the use shall be generally open to the public. 18.85.102 Moratorium on Retail Conversions. The City Council hereby enacts this Urgency Interim Ordinance establishing a moratorium on the conversion of any ground floor Retail use permitted or operating as of March 2, 2015 or thereafter to any other non-Retail use anywhere in the City. (a) 25% Exemption Suspended. During the pendency of this Ordinance, Section 18.30(C).020 permitting not more than twenty-five percent ofthe ground floor area not fronting on a street to be occupied by a non-retail service use otherwise permitted in the applicable underlying CD district shall be suspended. (b) Conditionally Permitted Uses Suspended. During the pendency of this Ordinance, no ground floor Retail use operating as of March 2, 2015 may be replaced by any other non-Retail use, including uses for which Conditional Use Permits are currently allowed. (c) Legal Nonconforming Uses. During the pendency of this Ordinance legal nonconforming Retail use shall remain as a grandfathered use and shall not be subject to the change, discontinuance, or termination provisions of Chapter 18.70. (d) Conversion of Basements. During the pendency ofthis Ordinance, elimination of or conversion of basement space currently in Retail use or in use for retail support purposes shall be prohibited. 18.85.103 Exemptions. The following shall be exempt from this Ordinance: (a) Pipeline Projects. Any Retail use where a discretionary permit or entitlement application to convert such Retail use to a non-Retail use was submitted to the City on or before March 2, 2015 and is currently pending. For purposes of this Ordinance a 11Use and Occupancy" Permit Application shall not constitute a discretionary permit. (b) Vested Rights. Any Retail use for which an applicant has received a valid building permit from the City and performed substantial work and incurred substantial liabilities in good faith reliance on such permit as of the date ofthis Ordinance. 4 150520 cs 0131335 May 11,2015 18.85.104 Waivers and Adjustments. The following shall be grounds for a request for waiver or adjustment of this Ordinance: (a) Economic Hardship. An applicant may request that the requirements of this Ordinance be adjusted or waived based on a showing that applying the requirements of this Ordinance would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property. (b) Multi-family uses. Any project which (i) contains four or more housing units, (ii) the multi-family housing component constitutes at least one-third or more of the total square footage of the project and (iii) otherwise complies with all sections of the Zoning Code may apply for a waiver or modification from this Ordinance upon a finding that this Ordinance would have a material effect on the multi-family component of such project. (c) Documentation. The applicant shall bear the burden of presenting substantial evidence to support a waiver or modification request under this Section and shall set forth in detail the factual and legal basis for the claim, including all supporting technical documentation. Any such request under this section shall be submitted to the Planning and Community Development Director together with an economic analysis or other supporting documentation and shall be acted upon by the City Council. 18.85.105 Reconstruction. Any ground floor Retail use existing on or after March 2, 2015 may be demolished and rebuilt provided that the portion of square footage used as Retail use on or after March 2, 2015 is not reduced except that Retail square footage may be reduced by the minimum amount needed to provide access to any new upper floor and/or lower level parking. 18.85.106 Applicability to Current Requirements. Nothing in this ordinance shall alter requirements of site-specific Planned Community zoning ordinances or adopted conditions of approval. Nothing in the ordinance shall be construed to waive the requirement for a conditional use permit or other entitlement where such requirements currently exist." SECTION 3. Study. The City Council directs the Department of Planning & Community Environment to consider and study possible amendments to the Comprehensive Plan and zoning ordinance to preserve existing Retail uses. SECTION 4. Written Report. At least ten (10) days before this Urgency Ordinance or any extension expires, the City Council shall issue a written report describing the measures taken to alleviate the condition which led to the adoption of this Urgency Interim Ordinance. SECTION 5. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such 5 150520 cs 0131335 May 11,2015 invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 6. Effective Period. This Urgency Ordinance shall take full force and effect immediately upon adoption. In accordance with Government Code Section 65856, this Ordinance shall be in full force and effect for a period offorty-five (45) days from adoption. This Ordinance shall expire on June 25, 2015 unless this period is extended by the City Council as provided in Government Code Section 65858. SECTION 7. ~-The City Council finds that this Ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo. INTRODUCED AND PASSED: May 11, 2015 AYES: BERMAN, BURT, DUBOIS, FILSETH, HOLMAN, KNISS, SCHARFF, SCHMID, WOLBACH NOES: ABSTENTIONS: ABSENT: ATTEST: ~~ APPROVED: ~~~ City Clerk Mayor APPROVED AS TO FORM: ./~~- Senior Assistant City/.: t: 6 150520 cs 0131335 May 11,2015 DocuSign Envelope ID: D49C6B91-8428-4594-8DCD-3FD97FOAE507 Ordinance No. 5330 Ordinance of the Council of the City of Palo Alto Extending Urgency Interim Ordinance 5325 Adopting a Temporary Moratorium on the Conversion of Ground Floor Retail and "Retail Like" Uses to Other Uses Citywide FINDINGS A. The City of Palo Alto has long been considered the birth place of Silicon Valley. With its proximity to Stanford University, its international reputation, its deep ties to technology firms, its highly rated public school system and its ample public parks, open space and community centers, Palo Alto continues to serve as a hub for technology based business. B. Palo Alto is considered one of Silicon Valley's most desirable office markets. According to one study Class A office rates have climbed 49 percent since the start of 2010. The same study reported Class B office space increasing by 114.4 % since 2010. C. In particular, average commercial rental rates have gone up significantly from 2013 to 2015. In 2013 the average monthly rental rate citywide for office was $4.57 per square foot. That rate increased to $5.12 in 2015. While retail rents have also increased during this period, retail rents are considerably lower than office rents. The average monthly rental rate for retail in 2013 was $4.21 and in 2015 was $4.88. D. Price increases have been even more significant in the downtown area. In 2013 the average downtown monthly office rent was $6.37. In 2015 the rate increased to $7.33. E,. At the end of 2014, Palo Alto's downtown vacancy rate was a low 2.83 percent, according to a report prepared by Newmark Cornish & Carey. F. These record high monthly rental rates for office and low vacancy rates have created financial incentives to replace current retail use with office use where such conversions are permitted by the City's zoning ordinance. These economic pressures are more severe in the downtown and California Avenue commercial areas but exist throughout the City. G. The data submitted by the City to support the Valley Transportation Authority's Congestion Management Plan (CMP) each fiscal year suggests that there has been a loss of approximately 70,000 square feet of retail-type uses in the period from 2008 to the present. The CMP data is broad in the sense that it includes uses like automotive services in the "retail" category even though they are considered separate uses in the City's zoning ordinance. However any overstatement of the trend towards less retail is likely to be offset by the data's reliance on a list of discretionary applications processed by the City, since there have also been recent conversions of retail space to office space that did not require discretionary approvals and are not included in the 70,000 square foot number. H. City residents have seen this occurring in the City's commercial districts as the City's Architectural Review Board has considered projects like those affecting Spagos restaurant at 265 Lytton, lnhabiture at 240 Hamilton Ave, Palo Alto Bowl at 4301 El Camino Real, and Club Illusions Restaurant at 260 California Avenue. In addition, familiar retail businesses like the 150521 cs 0131444 1 June 15, 2015 DocuSign Envelope ID: D49C6B91-8428-4594-8DCD-3FD97FOAE507 Zibibbo restaurant have closed and their spaces have been acquired and occupied by non- retailers. Likewise the old location for Fraiche Yogurt, which moved from Emerson Street to Hamilton Avenue, was immediately re-purposed_ as office space. I. Based on these trends, on March 2, 2015, the Palo Alto City Council asked staff to consider whether zoning-based protections for ground floor retail uses need to be strengthened where they currently exist and expanded to areas of the City where they do not. J. On April 6, 2015, the City Council discussed these issues in detail and directed staff to prepare an urgency ordinance that would preserve existing ground floor retail and retail-like uses until permanent zoning revisions can be prepared. K. This direction is consistent with the City's existing Comprehensive Plan, which identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale "centers" with a mix of uses as focal points for neighborhoods (Goal L-4). Policy L-20 suggests that the City "encourage street frontages that contribute to retail vitality ... " and Policy B-5 calls on the City to "maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City's economic base." L. Palo Alto is in the process of updating its Comprehensive Plan, and it is expected that the updated Comprehensive Plan will contain additional policies and programs designed to preserve existing retail uses in the City. M. The public's health, safety and welfare are currently and immediately detrimentally affected as neighborhood-serving retail service and related uses are priced-out by rising rents and replaced by uses that do not provide similar services or activate the street frontage by creating pedestrian activity and visual interest (i.e. shop windows and doors). These changes affect neighborhood quality of life, and mean that local residents have to drive to similar retail destinations in other locations, diminishing the public health benefit when residents can walk to needed services and increasing traffic congestion, vehicle miles traveled and greenhouse gas emissions. N. Unless abated, the City's actions to approve conversion of ground floor spaces from retail to other uses will exacerbate the reduction of retail and changes described above, resulting in the need for the proposed interim ordinance. 0. The City Council desires on an interim basis to temporarily suspend conversions of retail and retail like uses to office throughout the City as such conversions may be in conflict with the City's Comprehensive Plan and zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time. P. The possible extension of this interim ordinance beyond 45 days would not have a material effect on the development of projects with a significant component of multifamily housing because a specific exemption has been included to address this requirement of State law. 150618 cs 0131444 2 June 15, 2015 \ DocuSign Envelope ID: D49C6B91-8428-4594-8DCD-3FD97FOAE507 Q. This urgency interim ordinance is adopted in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings. A 4/5 vote is required for adoption. R. The City Council adopted Interim Ordinance No. 5325 on May 11, 2015, by a four- fifths vote after a public hearing pursuant to Government Code Section 65858 and Ordinance 5325 will expire on June 25, 2015. S. The Council desires to extend Interim Ordinance 5325 in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 for an additional period of 22 months and 15 days. This extension is based on the need to protect the public safety, health and welfare as set forth in the above findings and a 4/5 vote is required for passage. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. Written Report. Government Code Section 65858(d) states that "ten days prior to the expiration of an interim ordinance or any extension, the legislative body [the City Council] shall issue a written report describing the measures taken to alleviate the conditions which led to the adoption of the ordinance. Pursuant to this provision, the City Council hereby reports that much of the factors which gave rise to Urgency Interim Ordinance No. 5325 still apply, namely increasing commercial rental rates; low office vacancy rates; retail service uses being priced out of market and being replaced by office and other uses; and increased traffic congestion, vehicle miles traveled and greenhouse gas emissions resulting from these changing land use patterns. The City Council has undertaken a number of actions since the adoption of Ordinance Number 5325, including directing staff to bring to the Planning and Transportation Commission a "backstop" ordinance to retain retail and retail like uses as well as directing staff to more closely study retail protection initiatives together with a formula retail ban in the California Avenue commercial district. Staff has also begun detailed reviews of regulatory schemes from other jurisdictions. In order to have adequate time to fashion and propose appropriate regulations, and to ensure that the current and immediate threat to the public safety, health and welfare continues to be forestalled, adoption of this ordinance is necessary. SECTION 3. Moratorium. The City Council hereby extends Interim Urgency Ordinance No. 5325 establishing a moratorium on the conversion of any ground floor Retail use permitted or operating as of March 2, 2015 or thereafter to any other non-Retail use anywhere in the City. SECTION 4. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this.Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. 150618 cs 0131444 3 June 15, 2015 DocuSign Envelope ID: D49C6B91-8428-4594-8DCD-3FD97FOAE507 SECTION 5. Effective Period. This extension ordinance shall take full force and effect ' immediately upon expiration of Interim Ordinance No.5325. In accordance with Government Code Section 65856, this ordinance shall be in full force and effect for an additional period of 22 months and 15 days following expiration of Interim Ordinance No. 5325. Thus the moratorium shall expire on April 30, 2017, unless this period is extended by the City Council as provided in Government Code Section 65858. SECTION 6. Supersedes Earlier Ordinances. During the time period that this Ordinance is effective, this Ordinance supersedes any provision of the Palo Alto Municipal Code inconsistent with the provisions of this Ordinance. SECTION 7. g,QA. The City Council finds that this ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo and therefore does not have the potential to significantly impact the environment. This ordinance is also categorically exempt under CEQA Section 15308 as a regulatory action taken by the City pursuant to its police power and in accordance with Government Code Section 65858 to assure maintenance and protection of the environment pending the evaluation and adoption of potential local legislation, regulation, and policies. Adoption of the proposed interim ordinance is categorically exempt from review under Section 15301 (Class One -Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines since it will temporarily perpetuate existing environmental conditions. INTRODUCED AND PASSED: June 15, 2015 AYES: BERMAN, BURT, DUBOIS, FILSETH, HOLMAN, KNISS, SCHARFF, SCHMID, WOLBACH NOES: ABSTENTIONS: ABSENT: ATIEST: /. ~~ City Clerk APPROVED AS TO FORM: re,;:s~ii:r LC2CEDQ84ABC3429 Senior Assistant City Attorney 150618 cs 0131444 APPROVED: ~tlL Mayor GDocuSlgned by: ~4~, 39E7298FB2064DB ... City Manager CaS:~ Director of Planning and Community Environment 4 June 15, 2015 B FireStation#1 BlockbusterVideo LyttonSquare SeniorCenter LanningChateau Downtown Library CityHall WilliamsProperty StThomasAquinasChurch Chase Bank CPAGIS DowningHouse CalifStateAutoAssn WaverleySurgeryCenter PostOffice94301 CedarTerracesCondominium CowperInn RoseLaneApts. EverettManor 7-11 EverettHouse WebsterHouse CPADev.Ctr Lytton Gardens Senior Residence CasaOlga A.G.Ferrari Gym ComericaBank ALMASTREET ALMASTREET HIGHSTREET FORESTAVENUE EMERSONSTREET HOMERAVENUE HOMERAVENUE AMONASTREET EMERSON STREET HIGH STREET EVERETTAVENUE EVERETTAVENUE HIGHSTREET ALMASTREET ALMASTREET LYTTONAVENUE ALMA STREET EMERSON STREET RAMONASTREET LYTTONAVENUE UNIVERSITYAVENUE RAMONASTREET BRYANTSTREET HIGHSTREET EMERSON STREET ALMASTREET EMERSONSTREET HIGHSTREET HIGHSTREET HA M I L T O N A V E N U E HA M I L T O N A V E N U E EMERSON STREET HAMILTONAVENUE GILMANSTREET WAVERLEY STREET BRYANTSTREET FO R E S T A V E N U E FORESTAVENUE BRYANTSTREET RAMONASTREET RAMONASTREET BRYANTSTREET FLORENCESTREET KIPLING STREET LYTTONAVENUE WAVERLEYSTREETWAVERLEYSTREET EVERETTAVENUE EVERETTAVENUE STREET AVERLEYSTREET RAMONASTREET BRYANTSTREET LYTTONAVENUE UNIVERSITYAVENUE COWPERSTREET KIPLINGSTREET UNIVERSITYAVENUE UNIVERSITYAVENUE COWPERSTREET WAVERLEY STREET HAMILTONAVENUE COWPERSTREET IPLINGSTREET EV E R E T T A V E N U E COWPERSTREET WEBSTER STREET EVERET WEBSTER STREET WEBSTERSTREET LYTTONAVENUE TASSOSTREET HAMILTONAVENUE COWPERSTREET FORESTAVENUE FORESTAVENUE WAVERLEYSTREET HOMERAVENUE WEBSTERSTREET WEBSTERSTREET COWPERSTREET HOMERAVENUE HOMERAVENUE LYTTO WEBSTERSTREET EVERETTCOURT LANE39 LANE7EAST LANE7WEST LANE5EAST LANE6EAST LANE20EAST LANE30 LANE20WEST LANE21 LANE15EAST BRYANTCOURT PAULSENLANE LANE12WEST LANE11WEST CENTENNIALWALK DOWNINGLANE PENINSULACORR PENINSULACORRIDORJOINTPOWERSBOARDPENINSULACORRIDORJOINTPOWERSBOARD 457451 465463 489-499360 530 480 420 430 480 463 451443 437411 405 419 405 401 441 480-498 347 351 355 359 525 430 473 332- 342 425 415 400 570568 556 550 543 327 321 315305 343 515 525 551 555 328 309-311 518-528 536-540 552-554 558-562 573A-E 591-599 557-571 330-332 318-320 406-418 417 542 548568 524 550 500-528 578 564 550 546 540 530 531-535 541 505 525 537 555 565 571 530 619-623 520 440-446 401 579 567 523610 600 555 581 420-438 437 224 228 A-F 244 579 575 565 559 251 355A-J 335 329 604 576 566 614 345-347 243 245 257 259 219 227 235 469 475 744 459 801APT1-5 427-453 460 803 802 800 567-569 559563 539541543 515-517 809 136 610 116-122 150 535529 525 542516140 102 116124 163 145 566 556 167 52 8 643 635 635 645- 685 660- 666 620 180 164 158156 624 628 632 636 640 644 617 621 151-165 171-195 203 642 640 636 200 151 115 125 135 514 10 1 440 444 436432 427 425 117119 630 616 208 228220 240-248 575 530- 534 536 540 552 177 156 201209 215 225 595 229231 611-623 180 508 500 625-631 170172-174 542 544 538- 542 552 548 546 54 1 - 54 7 230-238 734 723 721 702- 730220-244 744 701 731 755 757 771 200 160 728-732 762- 776 740-746 250 275 270 255741 265 724 730 651 221-225 227 668 707 205 201203451449 209 219 221 233235450 460 470 442 444 400 420 430 411 425 429 185 165 181 412 250 420 245 171-169 441- 445 435- 439 346 344 333 335 342 344 431 460 450 235530 220 220B 222 240 514278 274270 250 545 540 251485255 271 281 300 310 301 581 259-267 533 535 537 261267 518-526 532- 536 520-526 530-534 271 281 252 270 228 226 234 238 244 242 228- 234 223- 229 247-259 240 232 230 311-317 251 360 344 326 340 337339 323317 400 420 332330 314 353 355 367 305 347 265272-278 418 319 321- 341 328 330 300- 310 431401 366 436 426#1-7 369 335 319 390 301 315 375 307- 311 325330 332 1&23301-3 324 326 316 318 373- 377 416- 424 361 314 338 340 560 345 321325 315 529 285 555 650 636 6281-12 628A-E 385 365 375380 345 664 325650-654 661 635300 690 675 555541-549533 535- 539 318-324 326 352 425 439-447 435429 425 415-419 405403453 461 383460 502 510 526 520 540 499 467 459 439 425 555 400 436-452 456 379 370-374376380-382 384-396 550-552 364 360 431 440-444 423 499 475 421-423 431-433 432428 460-476 450 635 446 430 400 745 720 706 385744 734 724-730 720 712 704 360 351 315737 332 653 -681 683 685 512 501 619 609 605 518 482486496 610 630 455 400 651-687 543-545 532534 542544 550 552 554556 558560562564 635-637 643-645 601-619 470 313 333 5 303301 229 336 308 310 312 316 318 311 331 315 319 317 321 335 228220 347-367 351357 369-379360 258- 296 302- 316 379310 320 328 332 340 437 412 311A-B 404 313 325 327 333 407 401385 411 452 378-390 360-1A-1C360-2A-2C360-3A-3C360-4A -4C360-5A -5C360-6A 344-348 418420 482 328 456 321 325 330218 236 240 250- 252 477 475 467 457 453249235 225 221 275505-509 239- 243 513-519 460 474472228- 230 535 215 223 231 521 239-245 0 4 218-222 333 335- 337 351 505 610-616 727 678 676 674 672 642 636-638 567 555 711 701705 725 525 759 730 718704 734 738-740 760-770 746-750 701-71 721-725 6 5 609 759 751 753741-74 737-73 627 611 601 608600 623 137 145 700 780 790 744 111700 753 100 799 703 100 101 139654 735 707 248 230-23 212 800 812 801 801 791153 718 774 761 795745 201 209 217 222 171 421130 312 318 324 317 301 186 192 323 329 151 325 329 334 131 129 355301 235 258 163 115 291247 235 251 249 252 247 244 250 177220 261 251-257 205245 231 225 234 240 183 251 270 241-247 215- 237 216 219 235 245 221 13-317 220- 224 238 542-550 531-539 759 223-239 188190 251- 293 202 206 208 210 212 216 220 275 539 168 408 412 440 483A -F 435 751 735 745 210 727 733 335 328 330 345 214 350 806 409 419 230302 306 308 312 316 301 303 305 307 309 251 801 420 424 430 423425413-419 457-467 469-471473-481 454 729A-D 733-743 734-740 724-732 715 445 324 328 545547549 590 425447 565 585 595 507 561 706 536 200 280-290 150 158 164 276 516 698 161 159 157777 132 127 180 528 247 372 524 548550 152 345 336 515 658 227 539 115 135 321 558#200-202 558#C&D 140 461 435433 421 727A-C 218 255 206 739 26 650 642 351 451 551 375 530 643 415 700 802 548 423 668 305 -313 423 405 611 320 322 346 3 471 484 426 264 430 508 756- 760 544 546 515 151 160 257 433-457 482 330 349 401 539 440 312 202 651 443 445 447 716 398 262 335 218 640-646506 327 469 261 263 254 This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend CD-C (GF) (P) Zone CD-C (P) Zone Add to (GF) District Remove from (GF) District 0' 364' Downtown Zoning with Proposed Changes to (GF) CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2009 City of Palo Alto jcutler, 2009-09-23 14:55:00 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) Downtown Zoning 2009 Changes to GF District Lot RHigh StreetPkg Garage LyttonPlaza Undergroundarking Garage Civic C enter Plaza Parkin g W holM E-Trade 136 61 0 116-122 150 53 5 52 9 52 5 54 2 51 640 102 16 24 163 145 56 6 55 6 167 528 64 3 63 5 63 5 645- 685 660- 666 620 180 164 158 156 624 628 632 636 640 644 617 621 151-165 171-195 203 642 640 636 200 514 630 616 208 228 220 240 575 530- 534 536 540 552 177 156 201 209 215 225 595 229 231 611-623 80 508 500 625-631 170 172-174 542 544 538- 542 552 548 546 541- 547 230-238 734 723 721 702- 730220-244 701 731 755 757 160 728-732 762- 776740- 250 275 270 741 72 73 651 221-225 227 668 235530 22020 B 222 240 274 270 250 545 5 581 533 535 537 261 267 51 532- 536 520-526 53 555 623 137 145 700 780 744 1700 753 100 703 100 101 139654 735 707 718 761 795745 759 223-23 539 168 727 733 230 715 200 150 158162 164 698 161 159 157 777 132 528 247 658 539 115 135 739 650 551 548 668 539 202 716 218 725 705 541 600 EMERSON STREET RAMONA STREET ALMA STREET EMERSON STREET HIGH STREET HIGH STREET HAMILTON AVENUE HAMILTON AVENUE EMERSON STREET FO R E S T A V E N U E RAMONA STREET RAMONA STREET LANE 7 EASTLANE 5 EAST LANE 6 EAST LANE 12 WEST LANE 11 WEST CENTENNIAL WALK HIGH STREET ALMA STREET ALMA STREET FO R ES T A V E NU E This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Parcels on Emerson to be Rezoned to CDC & CDS (GF) (P) Tree 0'145' CD C ( P ) a n d C D S ( P ) P a r c e l s on Em e r s o n S t . an d Fo r e s t A v e pr o p o s e d t o b e r e z o n e d t o CD C ( G F ) ( P ) & C D S ( G F ) ( P ) CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2013 City of Palo Altorrivera, 2013-03-25 14:53:51 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) 20 1 3 G F C h a n g e s City of Palo ‐ Retail Preservation Ordinance   List of Stakeholders   Individuals and retailers interviewed in November 2016:   Neilson Buchanan   Brad Ehikian  Ken Hayes   Chop Keenan  Julia Moran  John McNellis  Randy Popp  Roxy Rapp  Beth Rosenthal  Jonny Satz  Lund Smith  Elaine Uang  Leaf & Petal | Cassis  Skin Spirit  Spot Pizza  Title Nine Sports  Vivre    Architectural Review Board Staff Report (ID # 7388) Report Type: Study Session Meeting Date: 11/3/2016 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: Downtown Pedestrian-Oriented Design Discussion Title: Discussion Regarding Existing Pedestrian-Oriented Design Regulations and Possible Modifications to Enhance the Retail/Pedestrian Experience in the Ground Floor Protection Areas Downtown. For Additional Information, Please Contact Elena Lee at elena.lee@cityofpaloalto.org From: Hillary Gitelman Recommendation Staff recommends that the Architectural Review Board (ARB) review and provide feedback on potential design standards for an ordinance strengthening retail protections in the Downtown and South of Forest Area (SOFA II). Report Summary Staff is requesting ARB feedback on design standards to strengthen the pedestrian-oriented retail environment for the Downtown and SOFA II areas. To allow for continued retail protections in Downtown and SOFA II following the expiration of the Interim Retail Urgency Ordinance in April 2017, the City Council has directed staff to prepare an ordinance that protects all retail uses Downtown from conversion to non-retail uses and adds design standards that support active retail uses and pedestrian-oriented ground-floor architecture. The purpose of this report is to solicit feedback from the ARB regarding design standards that would implement a proposed ordinance to protect the retail environment Downtown. Guidance from the ARB will help to refine proposed design standards that can effectively encourage pedestrian-oriented architectural design and active retail uses. Coupled with an outreach strategy that seeks feedback from decision-makers and Downtown and SOFA II stakeholders, staff proposes a work plan that aims to begin public hearings by December 2016 to enable adoption of the permanent ordinance prior to the expiration of the interim urgency ordinance. Background City of Palo Alto Planning & Community Environment Department Page 2 In mid-2015, the City Council adopted an interim urgency ordinance prohibiting the conversion of ground floor spaces used for retail and “retail like” uses to office or other uses (Attachment A). The ordinance, which will sunset on April 30, 2017, was intended to protect retail spaces from converting to other uses while the City developed permanent zoning amendments to enhance retail preservations. Since the interim urgency ordinance was adopted, the City has adopted a permanent zoning amendment affecting the California Avenue Area (Ordinance No. 5358, adopted October 26, 2015) and closed a loophole affecting the Community Commercial (CC), Neighborhood Commercial (CN), and Service Commercial (CS) zoning districts (Ordinance No. 5373, adopted January 11, 2016). An ordinance addressing the balance of the city is currently underway. City Council Direction The City Council discussed proposed retail protections in Downtown and SOFA II on August 22 and October 17, 2016 and provided staff with the following direction and feedback to staff’s proposed approach: 1. Protect all existing Downtown/SOFA II retail uses from converting to non-retail uses 2. Develop design standards that support active uses and pedestrian-oriented ground- floor experience Downtown (note: the Council did not support additional design standards for SOFA II) 3. Add regulations to the GF district protecting basements used for ancillary retail uses 4. Require window transparency for non-conforming uses in the GF district The boundaries of the Downtown and SOFA II ground floor protection areas that would be affected by this ordinance are shown in Attachment A. Discussion & Analysis The following discussion identifies existing design standards or context based criteria in the zoning ordinance (Title 20) that regulate architectural design Downtown. It also summarizes the recommendations for design standards generally supported by the City Council at their October 17th meeting and explores a few example buildings Downtown to generate a discussion about standards that can support retail uses. The purpose is to provide background information and to obtain ARB recommendations on design standards that would successfully encourage an active retail environment with a strong pedestrian emphasis. Staff has provided a list of potential standards at the end of this report to help facilitate the discussion. Existing Design Guidelines Supporting Ground-Floor Retail The following design guidelines in the Zoning Ordinance and Downtown Urban Design Guidelines affect ground-floor architectural design in the Downtown: CD District: As described in Attachment B, the Downtown Commercial (CD) District (Section 18.18.110) includes context based criteria and findings for Architectural Review, but stops short City of Palo Alto Planning & Community Environment Department Page 3 of identifying any standards. Criteria related to ground-floor facades and pedestrian-orientation include support for:  Compatibility with the context of adjacent development in terms of siting, scale, massing, materials, roof lines, orientation of bays and windows, and entryway treatments  Pedestrian-oriented design, including well-designed visibility and access features such as awnings and building projections that provide human scale and break up the building mass  Locating parking behind buildings or below-grade, and wrapped with habitable uses  Utilizing street trees and other landscaping to establish a pedestrian-oriented streetscape P District: As described in Attachment C, the Pedestrian Shopping (P) combining district (Section 18.30B) seeks to foster a healthy retail environmental that is visually interesting to pedestrians. It is currently applied to parcels in pedestrian-oriented areas in both Downtown and California Avenue. The district does not identify specific design standards; rather it requires, as determined by the architectural review board, the following design features:  Display windows  Pedestrian arcades and recessed entryways, with a minimum required area  Landscaping or architectural features to preclude blank walls  Pedestrian access and prohibition of curb cuts and driveways across sidewalks and pedestrian paths Downtown Urban Design: Adopted 1993, these Design Guidelines primarily pertain to urban design of the streetscape and public areas. However, in terms of private property, while the Guidelines do not identify standards they do encourage the following features:  Vibrant and eclectic four-sided architecture  Ground-floor treatments that allow pedestrians to see merchandise and displays inside and avoid the use of curtains and shades, and blank walls  Zero setback lines  Wind and weather protection and human-scale details such as awnings and canopies  Recessed doors, courtyards, and outdoor seating  Larger windows on the ground floor than upper floors to create a hierarchy of uses and reflect a difference in ceiling heights between the first floor and upper stories  Clear glass to provide visibility into retail spaces (as opposed to tinted or reflective glass) Recommended Design Standards Based on the City Council’s direction, staff is pursuing design standards and requesting the ARB’s input on appropriate standards for Downtown:  Taller 1st floor story heights (e.g., 15 feet) within the context of the CD district’s 50-foot height limit  High percentage of window transparency in sidewalk-fronting facades (e.g., 60%)  Prohibiting reflective glass City of Palo Alto Planning & Community Environment Department Page 4  Requiring window openings to have transparent glazing and provide views into display/sales areas, except where operations preclude them (i.e., theaters)  Restrict window coverings in non-conforming tenant spaces (e.g., offices and financial services) fronting onto a sidewalk, during business hours. Require displays of merchandise, artwork or items of visual interest where customer privacy requires window coverings. (Note that the Zoning Ordinance can freely regulate new development, but the Ordinance generally cannot require existing legal nonconforming buildings to change their building façades to conform with standards such as the window transparency and ground-floor building height requirements proposed above. It might be possible however to regulate business conduct through the City’s inherent police power to support a healthy and safe retail environment. These conduct-related regulations are generally codified in non-zoning chapters of the Code.) The graphics below explore some existing buildings and streetscapes Downtown and examples from comparable cities to generate a discussion about appropriate standards. This restaurant at the corner of University Avenue & Waverley Street has a ground-floor height of 15 feet. The 3 feet of stucco at the ground-level partially obscures dining tables—providing some privacy for diners—while the nearly 12 feet of window height provides visibility into and out from the restaurant at eye level, and natural light into the dining area. Window coverings allow staff and patrons to make adjustments for sunlight and glare. The storefront windows represent about 70% of the total building façade. City of Palo Alto Planning & Community Environment Department Page 5 In contrast, the Apple store at 340 University Avenue has a 24-foot tall glass façade that maximizes transparency. Customers have abundant natural light through the glass roof and front façade, while pedestrians are enticed to come inside to shop. With a limited amount of merchandise for sale, the front windows are not occupied by fixtures. For comparison, the following jurisdictions regulate window transparency in commercial mixed- use and/or downtown districts. The range of heights identified in the second column is intended to focus glazing at pedestrians’ eye level. Jurisdiction Minimum Transparency Requirement San Francisco 60% between 4 and 8 feet of the ground-floor façade San Carlos 60% between 2.5 and 7 feet, within 20 feet of a building entrance Santa Monica 70% between 2.5 and 8 feet City of Palo Alto Planning & Community Environment Department Page 6 Although the architectural design and uses of the street frontage vary along Hamilton Street, between High and Emerson Streets, the first floor storefront heights are fairly consistent. ARB Consideration Staff seeks ARB feedback on the following components and welcomes further suggestions to explore: 1. minimum first floor building height and how any changes would be compatible with existing development 2. Appropriateness of increased storefront heights on University Avenue as opposed to other areas Downtown 3. storefront systems with expanded glass and curtain walls as desirable features to encourage retail uses 4. Extent of transparency in ground-floor facades (minimum percentage) 5. Addressing non-conforming uses (such as financial services offices) with window coverings to encourage active pedestrian-oriented uses/spaces Outreach and Timing The table below identifies proposed timing for completion of the permanent Ordinance. As part of this timeline, staff and consultants propose to conduct comprehensive, but efficient outreach efforts over the next several months including meetings with stakeholders (including brokers, property owners, residents, Chamber of Commerce leaders), a project website, and public hearings. City of Palo Alto Planning & Community Environment Department Page 7 Task Timeline for Completion Community Outreach Stakeholder Meetings October – November 2016 City Council Study Sessions August 22, 2016, October 17, 2016 Website and Continued Outreach Ongoing Ordinance Development Analyze Available Data August – September 2016 Draft Framework September - November 2016 Draft Ordinance November - December 2016 Planning and Transportation Commission Hearing November/December 2016 City Council Hearings December 2016/January 2017 Policy Implications The City’s Comprehensive Plan identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale “centers” with a mix of uses as focal points for neighborhoods (Goal L-4). Policy L-20 suggests that the City “encourage street frontages that contribute to retail vitality…” and Policy B-5 calls on the City to “maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City’s economic base.” Environmental Review The ARB’s direction to staff does not constitute a “project” requiring environmental review, however the resulting ordinance will be reviewed in compliance with the California Environmental Quality Act (CEQA). Public Notification, Outreach & Comments The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper. Notice of a public hearing for this project was published in the Palo Alto Weekly on October 21, 2016, which is 12 days in advance of the meeting. Postcard mailing occurred on October 24, 2016, which is 9 days in advance of the meeting. Report Author & Contact Information ARB1 Liaison & Contact Information Jean Eisberg, Consulting Planner Jodie Gerhardt, AICP, Planning Manager (415) 841-3539 (650) 329-2575 jean@lexingtonplanning.com jodie.gerhardt@cityofpaloalto.org Attachments:  Attachment A - Downtown & SOFA II Map Boundaries (PDF)  Attachment B - Section 18.18.110 CD District Design Criteria (PDF) 1 Emails may be sent directly to the ARB using the following address: arb@cityofpaloalto.org City of Palo Alto Planning & Community Environment Department Page 8  Attachment C - Section 18.30(B) P Combining District Regs (PDF) 934 - 9 4 4 927 932 233 281 933 - 9 3 7 943 327 1001 942 469 475 744 459 832 80 1 A P T 1 - 5 427-453 920 912 362 370 900 838 846 471 459 835 - 8 5 5 460 815 840836 834 84 5 400 803 928930 931933 835 - 8 3 7 83 1 - 8 3 3 451453 802800 810 - 8 1 6 818 - 8 2 0 828 - 8 3 0 81 7 - 8 1 9 825 567-569 559563 521-529 531-539 541-547 556 596 904 926 561-567 569 8 527-533 543 551 510520 558-560 903 825 837 581 575940934 813-823 501-509 511-519 539541543 515-517 809811 420 1001 1011 1010 376 370 1020 1022 1033 1027 1017-1023 980960 990 342-352 354-362 326 1019 1027 1035-1037 426-430 432-438 1033 1042 1036 1018 1000 448 452 450 944 471 483948952 959947925 915 933935 425-443 451449 463-465 936-940 458 460 440 428426 1028- 1030 536 526 1001 1011- 1015 1021 540 542 483 904 912 468 918 926 537 965-971 505-507 519-521 939-945 931-935 923-925 518-520 1044 1026 1022580 574 566 552 548 546544 9 136 610 116-122 150 535529525 542516140 102 116124 163 145 566 556 167 528 643 635 635 645- 685 660- 666 620 180 164 158156 624628 632 636 640 644 617621 151-165 171-195 203 642640636 200 151 115 125 135 514 101 440 444 436432 427 425 117119 630616 208 228220 240 575 530- 534 536 540 552 177 156 201209 215225 595 229231 611-623 180 508500 625-631 170172174 542 544 538- 542536534 552548546 541- 547 230-238 734 723 721 702- 730220-244 744 701 731 755757 771 200 160 728-732 762- 776740-746 250 275 270 255741 265 724 730 651 221-225 227 668 707 205 201203451449 209 219 221 233235450460470 442444 400 420 430 411 425 429 185 165 181 412 250 420 245 171-169 441- 445 435- 439 346 344 333335 342 344 431 460 450 235530 220220 B 222 240 514278 274270 250 545 540 251485255 271 281 300 310 301 581 259-267 533 535 537 261267 518-526 532 520-526 530-536 271 281 252 270 240-248 202- 216 228226 234238 244 242 210- 216 228- 234 223- 229 209215 247-259 240 232 230 311-317 251 360 344 326 340 337339 323 317 400 420 332330 314 353 355 367 305 347 265272-278 418 319 321- 341 328 330 300- 310 431401 366 436 426 #1-7 369 335 319 390 301 315 375 307- 311 325330 332 1&2330 1-3 324 326316 318 373- 377 416- 424 361 314 338 340 560 345 321325 315 529 285 555 650636 628 1-12 628 A-E 385 365 375380 345 664 325650-654 661 635300 690 675 555541-549533 535- 539 318320322324326 352 425 439-441 435429425 415-419 405403453 461 383460 502 510 526 520 540 499 467 459 439 425 555 400 436-452 456 379 370-374376 380-382 384-396 550-552 364 360 431 440-444 423 499 475 421-423 431-433 432 428 460-476 450 635 446 430 400 745 720706 385744734 724-730 720712704 360 351 315737 332 300 653 -681 683685 512 501 619 609605 518 482486496 610 630 455 400 653-687 543-545 532534 542544 550 552 554 556 558560562564 470 313 334 333 325326 342 303301 229 336 308 310 312 316 318 311 331 315 319 317 321 335 6-428 427-431 183 359357 341 343 228220 356-360 347-367 351 357 369-379360 258- 296 193173 169 A-D 159 449Units 1-4 419 350 210 204176 365 375 381 181- 187 302- 316 379310 320 328 332 340 437 412 311 A-B 404 313 325 327 333 407401385 411 452 378-390 360 - 1A - 1C360 - 2A - 2C360 - 3A - 3C360 - 4A - 4C360 - 5A - 5C360 - 6A 344-348 418420 482 328 456 321 325 330204 218 236 240 250- 252 477 475 467 457 453249235 225 221 201 460 275 505-509 239- 243 209- 213 210- 214 513-519 460 474472228- 230 166 46 453 176 471-479 483-485 465-467 459-461 432 -472 565 555 535 531174170 525 507505 189185179 160164152144 171B 171A 535 558 201 516512 520 209 215 223 231 521 580 239-245 530-540 544-554 212- 216 218-222 17 168160150 181177169151155 190 194192 577575 333 335- 337 351 457451 465 463 489-499360 530 480 420 430 480 463 451443437411405 419405 401 441 480-498 347 351 355 359 525 430 473 332- 342 425415 400 570568 556 550 543 327321315305 343 515 525 551 555 328 309-311 518-528 536-540 552-554 558-562 573 A-E 591-599 557-571 330-332 318-320 406-418 417 542548568 524 550 500-528 578 564 550 546 540 530 531-535 541 505 525 537 555 565 571 530 520 440-446 579 567 555 581 420-438 437 566 224 228 A-F 244 579 575 565 559 576 566 505 610-616 678 676 674672 642 636-638 567 555 711 701705 725 525 759 730 718704 734 738-740 760 746-750 7 8 850 530 6096 1028 1036 1013 1021 1029 1037 10041000 1006 1020 1024 1030 1040 1035 10271023 1017 1001 103 1080 1040 1028 623 137 145 700 780 790 744 111150 753 100 825805 33 51 75 63 841 44 675 49 41 711 799 703 100 101 139654 625 1019 1027 A B 1035 1044 1045 1028 1020160 1001 1005 1009 1015 1027 1037 1010 1024 1004 930 975945929 931 948 181 940 960 145900 955 999875 853 925 81 855 901-907 909 87 98 1038 1036 917 921 925 735 849 707 847 842828 820248 230-232 212 825 829 833 839 800 812818 882 165831 801 815 809801 841 791153 718 774 761 795745 201 209 834 836 845 895 926 190 934 942 948 203 209 219 225 929200 240 904 910 926 270 935 904 909 909A 25 217 222 148 171 421 130 312 318 324 317 301 186 192 323 329 151 325 329 334 131 129 101 301 235 258 212 163 115 291247 131 141 145 150 210 201 207 164 202 158 180 165 147 143 125 149 170172 165167169171 129A - 129E 139A - 139E 235 251249 252 247 244250 177220 261 251-257 205245 231 225213205 170 172 206 234240 183 251 270 241-247 215- 237 210- 216 144 152 147 221-243 275 171 219 219 235 262 202 245 254 252 250 151 159 203 215 221 313-317318 220- 224 238 319-323311-317 339327-335 197185 170 A-F 187- 197 309 168 APT 1-10 181 179 542-550 531-539 532 759 223-239 905 911-917907 188190 251- 293 202 206 208 210 212 216 220 1008 159 275 539 201 400 27 168 865857 302 324 340 795 848 918 903 903A 408412 440 483A - F 435 751 735 745 532 210 727 733 335 328 330 345 214 350 800 806 441 441A 230302306308312 316 301 303 305 307 309 325 251 807 821 829 801 818-824 420 424 430 832A 832 842A 842 852A 852 862A 862 872A 872 351A 351 355A 355 359A 359 363A 363 367A 367 425 911 943 951 918 936 940 944 271 253 241 301 319 919A919 935 949 928 936 940-946 353 264 367 361 310 1005 1010 1020 423425 457-467 469-471473-481 454 729 A-D 733-743 734-740 724-732 936 824826828 920 949 943941 715 95 445 324 328 545547549 590 425447 827 565585595 904 315 507 561 706 536 200 100 280-290 150158 162 164 276 516 698 161 159 157777 132 127 180 528 120 247 372 524 548 550 538 152 207 345 336 515 658 227 27 29 539 115 550 321 558 #200-202 558 #C & D 965 140 350 808 915 461 435433 945 1012 421 727 A-C 218 255 206 1032 1035 1037 453 167 739 260 840 650 642 351 451 551 375 530 643 415 12 700 5 802 99 89 87 560564568572576580584588592594 906908 910 912914 916 918920 922924 548 423 668 901 305 -313 423 405 352354 611 320322 346 323 470 471 484 115 528 426 264 430 1001 508 756 - 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Legend University Avenue/Downtown Business District - Commercial Center Existing Ground Floor (GF) Combining District Zoned Parcels SOFA II Coordinated Area Plan (CAP) 0'500' Un i v e r s i t y A v e / D o w n t o w n Bu s i n e s s D i s t r i c t - C o m m e r c i a l C e n t e r wi t h Gr o u n d F l o o r ( G F ) Co m b i n i n g D i s t r i c t CITY O F PALO A L TO I N C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo AltoRRivera, 2016-10-26 15:34:24Commercial Downtown GF SOFA2 (\\cc-maps\gis$\gis\admin\Personal\RRivera.mdb) Attachment A Print Palo Alto Municipal Code 18.18.110   Context­Based Design Criteria (a) Contextual and Compatibility Criteria Development in a commercial district shall be responsible to its context and compatible with adjacent development, and shall promote the establishment of pedestrian oriented design. (1) Context (A) Context as used in this section is intended to indicate relationships between the site's development to adjacent street types, surrounding land uses, and on­site or nearby natural features, such as creeks or trees. Effective transitions to these adjacent uses and features are strongly reinforced by Comprehensive Plan policies. (B) The word "context" should not be construed as a desire to replicate existing surroundings, but rather to provide appropriate transitions to those surroundings. "Context" is also not specific to architectural style or design, though in some instances relationships may be reinforced by an architectural response. (2) Compatibility (A) Compatibility is achieved when the apparent scale and mass of new buildings is consistent with the pattern of achieving a pedestrian oriented design, and when new construction shares general characteristics and establishes design linkages with the overall pattern of buildings so that the visual unity of the street is maintained. (B) Compatibility goals may be accomplished through various means, including but not limited to: (i) the siting, scale, massing, and materials; (ii) the rhythmic pattern of the street established by the general width of the buildings and the spacing between them; (iii) the pattern of roof lines and projections; (iv) the sizes, proportions, and orientations of windows, bays and doorways; (v) the location and treatment of entryways; (vi) the shadow patterns from massing and decorative features; (vii) the siting and treatment of parking; and (viii) the treatment of landscaping. (b) Context­Based Design Considerations and Findings In addition to the findings for Architectural Review contained in Section 18.76.020(d) of the Zoning Ordinance, the following additional findings are applicable in the CD district and subdistricts, as further illustrated on the accompanying diagrams: (1) Pedestrian and Bicycle Environment    The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements such as: EXCERPT FROM DOWNTOWN COMMERCIAL (CD) DISTRICT Attachment B    A.   Ground floor uses that are appealing to pedestrians through well­designed visibility and access (Figure 1­1); Figure 1­1      B.   On primary pedestrian routes, climate and weather protection where possible, such as covered waiting areas, building projections and colonnades, and awnings (Figure 1­2); Figure 1­2      C.   Streetscape or pedestrian amenities that contribute to the area's streetscape environment such as street trees, bulbouts, benches, landscape elements, and public art (Figure 1­3); Figure 1­3      D.   Bicycle amenities that contribute to the area's bicycle environment and safety needs, such as bike racks, storage or parking, or dedicated bike lanes or paths (Figure 1­1); and    E.   Vehicle access from alleys or sidestreets where they exist, with pedestrian access from the public street.       (2)   Street Building Facades    Street facades shall be designed to provide a strong relationship with the sidewalk and the street(s), to create an environment that supports and encourages pedestrian activity through design elements such as:    A.   Placement and orientation of doorways, windows, and landscape elements to create strong, direct relationships with the street (Figure 2­1); Figure 2­1      B.   Facades that include projecting eaves and overhangs, porches, and other architectural elements that provide human scale and help break up building mass (Figure 2­2); Figure 2­2      C.   Entries that are clearly defined features of front facades, and that have a scale that is in proportion to the size and type of the building and number of units being accessed; larger buildings should have a more prominent building entrance, while maintaining a pedestrian scale;    D.   Residential units and storefronts that have a presence on the street and are not walled­off or oriented exclusively inward;    E.   Elements that signal habitation such as entrances, stairs, porches, bays and balconies that are visible to people on the street;    F.   All exposed sides of a building designed with the same level of care and integrity;    G.   Reinforcing the definition and importance of the street with building mass; and    H.   Upper floors set back to fit in with the context of the neighborhood.       (3)   Massing and Setbacks    Buildings shall be designed to minimize massing and conform to proper setbacks through elements such as:    A.   Rooflines that emphasize and accentuate significant elements of the building such as entries, bays, and balconies (Figure 3­1);    B.   Design with articulation, setbacks, and materials that minimize massing, break down the scale of buildings, and provide visual interest (Figure 3­1);    C.   Corner buildings that incorporate special features to reinforce important intersections and create buildings of unique architectural merit and varied styles (Figure 3­1); Figure 3­1      D.   Building facades articulated with a building base, body and roof or parapet edge (Figure 3­2); Figure 3­2      E.   Buildings set back from the property line to create an effective 12' sidewalk on El Camino Real, 8' elsewhere (Figure 3­4); Figure 3­3      F.   A majority of the building frontage located at the setback line (Figure 3­3); and Figure 3­4      G.   No side setback for midblock properties, allowing for a continuous street facade, except when abutting low density residential (Figure 3­3).       (4)   Low­Density Residential Transitions    Where new projects are built abutting existing lower­scale residential development, care shall be taken to respect the scale and privacy of neighboring properties through:    A.   Transitions of development intensity from higher density development building types to building types that are compatible with the lower intensity surrounding uses (Figure 4­1); Figure 4­1      B.   Massing and orientation of buildings that respect and mirror the massing of neighboring structures by stepping back upper stories to transition to smaller scale buildings, including setbacks and daylight planes that match abutting R­1 and R­2 zone requirements (Figure 4­2); Figure 4­2      C.   Respecting privacy of neighboring structures, with windows and upper floor balconies positioned so they minimize views into neighboring properties (Figure 4­3); Figure 4­3      D.   Minimizing sight lines into and from neighboring properties (Figure 4­3);    E.   Limiting sun and shade impacts on abutting properties; and    F.   Providing pedestrian paseos and mews to create separation between uses.       (5)   Project Open Space    Private and public open space shall be provided so that it is usable for the residents, visitors, and/or employees of a site.    A.   The type and design of the usable private open space shall be appropriate to the character of the building(s), and shall consider dimensions, solar access, wind protection, views, and privacy;    B.   Open space should be sited and designed to accommodate different activities, groups, active and passive uses, and should be located convenient to the users (e.g., residents, employees, or public)    C.   Common open spaces should connect to the pedestrian pathways and existing natural amenities of the site and its surroundings;    D.   Usable open space may be any combination of private and common spaces;    E.   Usable open space does not need to be located on the ground and may be located in porches, decks, balconies and/or podiums (but not on rooftops) (Figure 5­1); Figure 5­1      F.   Open space should be located to activate the street façade and increase "eyes on the street" when possible (Figure 5­1);    G.   Both private and common open space areas should be buffered from noise where feasible through landscaping and building placement;    H.   Open space situated over a structural slab/podium or on a rooftop shall have a combination of landscaping and high quality paving materials, including elements such as planters, mature trees, and use of textured and/or colored paved surfaces (Figure 5­2); and    I.   Parking may not be counted as open space. Figure 5­2         (6)   Parking Design    Parking needs shall be accommodated but shall not be allowed to overwhelm the character of the project or detract from the pedestrian environment, such that:    A.   Parking is located behind buildings, below grade or, where those options are not feasible, screened by landscaping, low walls, etc.;    B.   Structured parking is fronted or wrapped with habitable uses when possible (Figure 6­1); Figure 6­1      C.   Parking that is semi­depressed is screened with architectural elements that enhance the streetscape such as stoops, balcony overhangs, and/or art;    D.   Landscaping such as trees, shrubs, vines, or groundcover is incorporated into surface parking lots (Figure 6­2); Figure 6­2      E.   For properties with parking access from the rear of the site (such as a rear alley or driveway) landscaping shall provide a visual buffer between vehicle circulation areas and abutting properties (Figure 6­3); Figure 6­3      F.   Street parking is utilized for visitor or customer parking and is designed in a manner to enhance traffic calming;    G.   For properties with parking accessed from the front, minimize the amount of frontage used for parking access, no more than 25% of the site frontage facing a street should be devoted to garage openings, carports, or open/surface parking (on sites with less than 100 feet of frontage, no more than 25 feet);    H.   Where two parking lots abut and it is possible for a curb cut and driveway to serve several properties, owners are strongly encouraged to enter in to shared access agreements (Figure 6­4); and    I.   Parking is accessed from side streets or alleys when possible. Figure 6­4   Figure 6­5 ­­ Mixed­Use with Surface Parking   Figure 6­6 ­­ Mixed­Use with Podium Parking   Figure 6­7 ­­ Mixed­Use with Partial Sub­Grade Parking Podium   Figure 6­8 ­­ Mixed­Use with Below­Grade Parking Podium         (7)   Large (Multi­Acre) Sites    Large (in excess of one acre) sites shall be designed so that street, block, and building patterns are consistent with those of the surrounding neighborhood, and such that:    A.   New development of large sites maintains and enhances connectivity with a hierarchy of public streets, private streets, walks and bike paths (integrated with Palo Alto's Bicycle Master Plan, when applicable);    B.   The diversity of building types increases with increased lot size (e.g., <1 acre = minimum 1 building type; 1­2 acres = minimum 2 housing types; greater than 2 acres = minimum 3 housing types) (Figures 7­1 through 7­3); and    C.   Where a site includes more than one housing type, each building type should respond to its immediate context in terms of scale, massing, and design (e.g., Village Residential building types facing or abutting existing single­family residences) (Figures 7­2 and 7­3). Figure 7­1   Figure 7­2   Figure 7­3         (8)   Sustainability and Green Building Design    Project design and materials to achieve sustainability and green building design should be incorporated into the project. Green building design considers the environment during design and construction. Green building design aims for compatibility with the local environment: to protect, respect and benefit from it. In general, sustainable buildings are energy efficient, water conserving, durable and nontoxic, with high­ quality spaces and high recycled content materials. The following considerations should be included in site and building design:    A.   Optimize building orientation for heat gain, shading, daylighting, and natural ventilation (Figure 8­1). Figure 8­1      B.   Design landscaping to create comfortable micro­climates and reduce heat island effects.    C.   Design for easy pedestrian, bicycle, and transit access.    D.   Maximize onsite stormwater management through landscaping and permeable pavement (Figure 8­ 2). Figure 8­2      E.   Use sustainable building materials.    F.   Design lighting, plumbing, and equipment for efficient energy and water use.    G.   Create healthy indoor environments.    H.   Use creativity and innovation to build more sustainable environments. One example is establishing gardens with edible fruits, vegetables or other plants to satisfy a portion of project open space requirements.    I.   Provide protection for creeks and riparian vegetation and integrate stormwater management measures and open space to minimize water quality and erosion impacts to the creek environment.    J.   Encourage installation of photovoltaic panels (Figure 8­3). Figure 8­3   (Ord. 4923 § 3 (part), 2006) Print Palo Alto Municipal Code Chapter 18.30(B) PEDESTRIAN SHOPPING (P) COMBINING DISTRICT REGULATIONS Sections:  18.30(B).010   Special Purposes  18.30(B).020   Applicability of Regulations  18.30(B).030   Zoning Map Designation  18.30(B).040   Use Limitations and Site Development Regulations 18.30(B).010   Special Purposes    The pedestrian shopping combining district is intended to modify the regulations of the CN neighborhood commercial district, the CC community commercial district and the CD commercial downtown district in locations where it is deemed essential to foster the continuity of retail stores and display windows and to avoid a monotonous pedestrian environment in order to establish and maintain an economically healthy retail district. (Ord. 3792 § 1, 1988: Ord. 3098 § 1, 1978; Ord. 3048 (part), 1978) 18.30(B).020   Applicability of Regulations    The pedestrian shopping combining district may be combined with any CN, CC or CD district, in accord with Chapter 18.08 and Chapter 18.80. Where so combined, the regulations established by this chapter shall apply in lieu of, or in addition to, the provisions established by Chapter 18.16 or Chapter 18.18. (Ord. 3792 § 2, 1988: Ord. 3048 (part), 1978) 18.30(B).030   Zoning Map Designation    The pedestrian shopping combining district shall apply to any site adjacent to designated pedestrian frontage or pedestrian ways shown on the zoning map. (Ord. 3048 (part), 1978) 18.30(B).040   Use Limitations and Site Development Regulations  (a)   Pedestrian Design Features Required    On any site, or portion of a site, adjoining a designated pedestrian sidewalk or pedestrian way, new construction and alterations to existing structures shall be required as determined by the architectural review board, to provide the following design features intended to create pedestrian or shopper interest, to provide weather protection for pedestrians, and to preclude inappropriate or inharmonious building design and siting: Attachment C       (1)   Display windows, or retail display areas;       (2)   Pedestrian arcades, recessed entryways, or covered recessed areas designed for pedestrian use with an area not less than the length of the adjoining frontage times 1.5 feet;       (3)   Landscaping or architectural design features intended to preclude blank walls or building faces.    The specific nature and requirements of pedestrian design features shall be determined as part of architectural review pursuant to Chapter 18.76 (Permits and Approvals).    (b)   Parking and Vehicular Access Restricted    Vehicular access to sites adjoining designated pedestrian sidewalks or pedestrian ways which requires vehicular movement across such pedestrian sidewalks or pedestrian ways shall be prohibited, except where required by law or as may be authorized by a use permit in accord with Chapter 18.76 (Permits and Approvals). (Ord. 4826 § 88, 2004: Ord. 3792 § 3, 1988: Ord. 3108 § 18, 1979: Ord. 3098 § 2, 1978: Ord. 3048 (part), 1978) 11/3/2016 1 1 Pedestrian‐Oriented and Active  Retail Use Design Regulations in  Downtown Architectural Review Board November 3, 2016 2 Meeting Objective Review and provide feedback on potential  design standards for an ordinance  strengthening retail protections in the  Downtown and SOFA II 11/3/2016 2 3 Interim Urgency Ordinance Prohibits conversion of ground floor retail and  “retail like” uses citywide Expires April 30, 2017  4 Council Direction for Proposed  Ordinance 1. Protect all existing Downtown/SOFA II retail  uses from converting to non‐retail uses 2. Develop design standards that support  active uses and a pedestrian‐oriented  ground‐floor experience Downtown  3. Add regulations to the GF district protecting  basements used for ancillary retail uses 4. Require window transparency for non‐ conforming uses in the GF district 11/3/2016 3 5 Proposed Ordinance Boundaries 6 Existing Design Guidelines Primarily guidelines, not standards: CD District P District Downtown Urban Design Guidelines 11/3/2016 4 7 Recommended Design Standards Taller 1st floor story heights within the  context of the CD district’s 50‐foot height limit High percentage of window transparency in  sidewalk‐fronting facades  Prohibiting reflective glass Requiring window openings to have  transparent glazing and provide views into  display/sales areas, including in non‐ conforming uses (e.g., offices) 8 First Floor Heights 11/3/2016 5 9 First Floor Heights/Overall Heights PC Zone: •4 stories •50 feet (70 feet at corner) 10 First Floor Heights/Window  Transparency 11/3/2016 6 11 Window Transparency 12 Comparison Cities Minimum Transparency Requirements: San Francisco: 60% bet. 4 and 8 feet San Carlos: 60% bet. 2.5 and 7 feet, , within  20 feet of a building entrance Santa Monica: 70% bet. 2.5 and 8 feet 11/3/2016 7 13 Non‐Conforming Tenant Spaces Restrict window coverings at tenant spaces  fronting onto a sidewalk, during business hours Require displays of merchandise, artwork or  items of visual interest where customer privacy  requires window coverings Window CoveringsTransparency 14 Timing Task Timeline for Completion Community Outreach Stakeholder Meetings October – November 2016 City Council Study Sessions August 22, 2016; October 17, 2016 Website and Continued Outreach Ongoing Ordinance Development Analyze Available Data August – September 2016 Draft Framework September ‐ October 2016 Draft Ordinance  October ‐ November 2016 Planning and Transportation Commission November/December 2016 City Council Hearings December 2016/January 2017 11/3/2016 8 15 ARB Consideration 1. Minimum first floor building height and  compatibility with existing development and the  CD height limit 2. Appropriateness of increased storefront heights  on University Avenue vs. other areas Downtown 3. Storefront systems with expanded glass and  curtain walls as desirable features to encourage  retail uses 4. Extent of transparency in ground‐floor facades  (minimum percentage)   5. Addressing non‐conforming uses TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: NOVEMBER 9, 2009 CMR: 420:09 REPORT TYPE: ACTION ITEM SUBJECT: Adoption of an Ordinance Amending the Palo Alto Municipal Code Chapter 18.08.040 (the Zoning Map), Chapter 18.30(C) (the Ground Floor (GF) Combining District), and Chapter 18.18 (the Downtown Commercial Community (CD-C) Zone District) to Modify Restrictions on Ground Floor Uses in the Downtown Area EXECUTIVE SUMMARY . The purpose of these changes to the Zoning Ordinance is to address concerns about the loss of revenue generating retail and potential degradation of downtown economic vitality. Specifically, degradation resulting from an increase in ground floor office space in the downtown core due to dispersal of retail and personal service uses into the area outside the core. The existing Ground Floor Combining District regulations allow the Director to approve ground floor office use if a Use Exception is requested at a time when the City's annual downtown ground floor vacancy rate calculation is above 5% if allowed by the underlying CD-C regulations. Since a vacancy rate of approximately 10% is anticipated this year, the section of the code allowing Use Exceptions is recommended to be removed in order to ensure preservation of downtown retail uses. To balance this action, and concentrate retail in higher foot traffic areas, an amendment is proposed to relax existing restrictions in the CD-C zone outside the GF combining district, to allow the flexibility to lease ground floor space for either office or retail uses. Also recommended are adjustments to the boundaries of the Ground Floor Combining District to better reflect the critical areas of retail in the downtown core. RECOMMENDATION The Planning and Transportation Commission (P&TC) recommends that the City Council adopt the proposed ordinance (Attachment A) to include: • Removal of P AMC Section 18.30(C).040 eliminating the option for a Use Exception based on vacancy rate in the downtown core covered by the GF Combining District; CMR: 420:09 Page 1 of5 • Removal of PAMC Section 18.18.060(f)(1) providing an increase in flexibility for ground floor uses in the periphery of the downtown; and • Addition of GF Combining District to the existing properties on the south side of Hamilton Avenue (the 200 block between Emerson Street and Ramona Street) and to the Aquarius Theater and the two restaurant sites immediately to the north on Emerson, to protect these strong retail areas. Staff generally concurs with the P&TC recommendations, but continues to support adjusting the boundaries of the GF district to remove sites that are marginally viable for retail uses as described below: • Removal of GF protection from properties along Alma Street, and portions of High Street (near Hamilton Avenue); • Removal of GF protection from properties along the circle ramps connecting University Avenue and Alma Street; and • Removal of GF protection from three miscellaneous non-retail parcels along Kipling and Cowper north of University. BACKGROUND In order to address concerns about the vacancy rate of downtown ground floor retail spaces, the P&TC initiated the zoning ordinance changes on July 22, 2009, requesting that staff conduct outreach meetings with owners of property and businesses in the downtown core. City staff attended and hosted meetings as described in the P&TC staff report (Attachment E). On Septeluber 23, 2009, the P&TC reviewed the ordinance prepared by staff that was based on the P&TC comments at the initiation hearing and comments from property and business owners. The P&TC staff report provides additional background regarding the current Ground Floor Combining District (GF) and the Downtown Commercial Zoning District (CD-C) code which are included as Attachments B-D. DISCUSSION The draft ordinance (as recommended by the P &TC) is included as Attachment A. The proposed ordinance is intended to modify the land use regulations in the downtown based on a re- examination of current conditions and the efficacy of the existing regulations. The goal of these changes is to support the vitality of the downtown core of strengthening controls in the core and allowing more flexibility in the periphery. Based on the discussion at the initiation meeting on July 22,2009, and comments received dU11ng public outreach, staffmade four recommendations to P&TC of what areas of the downtown should be included in the core as described in the staff report dated September 23,2009, and in the discussion below. COMMISSION REVIEW AND RECOMMENDATIONS On July 22 and September 23, 2009, the P&TC held public hearings regarding the proposed ordinance. There were two speakers at the first hearing and three speakers at the second hearing. The P&TC staff reports, meeting minutes, and responses to Commissioners' questions are attached to this report as Attachments E-I and are available on the City's website at http://www.cityofpaloalto.orgicivica/filebank/blobdload.asp?BlobID=l7098 CMR: 420:09 Page 2 of5 The P&TC divided its recommendation into six separate votes. 1. The P&TC voted unanimously to recommend removal of PAMC Section 18.30(C).040 so that there will no longer be the option for a Use Exception based on vacancy rate. 2. The P&TC voted (4-3) to remove PAMC Section 18.18.060(f)(1) so that existing and future retail located in the CD-C zone outside the GF zone could become office in the future. 3. The P&TC voted unanimously to add GF protections to the existing retail on the south side of the block of retail on Hamilton Avenue (the 200 block between Emerson Street and Ramona Street) and to the Aquarius Theater and the two restaurant sites immediately to the north on Emerson. 4. The P&TC voted unanimously to not limit "uses of concern" (restaurants, financial institutions, etc.). 5. The P&TC voted unanimously to retain the existing zoning of University Avenue east of Cowper Street and the properties on Bryant between University Avenue and Hamilton Avenue. 6. The P&TC voted (4-3) to retain the existing zoning of properties on Alma, High Street, University Avenue, Kipling or Cowper. Attachment A is the revised draft ordinance as recommended by the P &TC at the September 23, 2009, hearing. In addition to the elements included in the formal recommendation other issues were discussed in depth by the P &TC at the meeting. These include the following: r.' Retaining the current restrictions on existing retail in the CD-C to apply to retail existing between March 19, 2001 and 2009. 2. Adding the GF combining district to the properties located on both sides of Emerson Street between Hamilton Avenue and Forest Avenue. ALTERNATIVES An alternative to the P &TC recommendation, as recommended by staff, would be to adjust the boundary of the GF combining district to remove several properties including: • Removal of GF combining district from properties along Alma Street, and portions of High Street (near Hamilton Avenue). (525, 529, 535-539 Alma Street, 115 & 135 Hamilton Avenue, 542 High Street) • Removal of GF combining district from properties along the circle ramps connecting University Avenue and Alma Street. (115-119, 102-116, 124, 125 University Avenue) • Removal of GF combining district from three miscellaneous non-retail parcels along Kipling and Cowper north of University. (440 Cowper Street and 437 & 443 Kipling Street) Staff supports this alternative in order to remove the ground floor restriction from sites that are not viable for retail uses. RESOURCE IMPACT The GF cornbining district does not ensure that businesses will provide a point of sale (personal service and service businesses which do not generate sales tax, are allowed in the GF), but focus CMR: Page on the core of the downtown retail district would add to the vibrancy and walkability of the business district. By clustering retail and personal service uses, retail studies show that foot traffic and additional sales will result. For example, in the recent studies by Gruen & Gruen Associates, retail experts in the Bay Area, found that "a critical mass of proximate and synergistic retail" is required for a successful downtown district. The additional proposed change recommended by the Planning and Transportation Commission, providing flexibility to property owners to change from retail to other uses (after March 21,2001 or thereafter), would also allow owners to bring in retail tenants into formerly non-retail spaces, by providing for reversion from retail to the former non-retail use. The potential economic impact of this primarily is in the occupancy of buildings that have been left vacant rather than locating a retailer that "locks in" the retail use forever. The lack of flexibility for marginal retail uses (e.g., 529 Alma) has resulted in vacancies for as long as 3 years. With the ability to alternate between retail and other approved uses, long term vacancies can be avoided and the economic vibrancy of the shopping district will be maintained. Allowing this type of flexibility will allow property owners to change from retail to other uses as the economy and demand for space fluctuates. POLICY IMPLICATIONS: In addition to Policies that support the retail vitality of the University AvenuelDowntown area, the Palo Alto Comprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University A venuelDowntown area. Keep the Planning Commission and City Council advised of the findings on an annual basis. ENVIRONMENTAL REVIEW: This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. PREPARED BY: DEPARTMENT HEAD: Director of Planning and Community Environment CITY MANAGER APPROVAL: CMR: 420:09 Page 4 ATTACHMENTS: Attachment A: Attachment B: Attachment C: Attachment D: Attachment E: Attachment F: Attachment G: Attachment H: Attachment I: CMR: 420:09 Draft Ordinance with Exhibits (Exhibit 1, property list, and Exhibit 2, map showing proposed revised locations ofGF combining district) Map showing existing location of CD-C zoning and GF combining Ground floor use restrictions for CD-C zoning district (pAMC Section 18. 18.060(f) GF zoning district regulations (P AMC Section 18.30(C).060) P&TC staff report dated September 23, 2009 (w/o attachments) P&TC staff report dated July 22,2009 (w/o attachments) Excerpt Minutes ofP&TC meeting September 23,2009 (Council only) Excerpt Minutes ofP&TC meeting July 22, 2009 (Council only) Commissioner Questions and Response to Questions Page 5 of5 NOTE YET APPROVED ATTACHMENT A Ordinance No. --Ordinance of the Council of the City of Palo Alto Amending Sections 18.30(C).040, 18.18.060(F), and 18.08.040 (The Zoning Map) of the Palo Alto Municipal Code Regarding Ground Floor Use Restrictions in the Downtown Area The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. The City Council finds that: (a) The Planning and Transportation Commission, after a duly noticed public hearing held September 23, 2009, reviewed, considered, and recommended that Sections 18.08.040 (the Zoning Map), 18.30(C), and 18.18.060(f) of the Palo Alto Municipal Code be amended to delete Sections 18.30(C).040 and 18.18.060(f)(1), and to rezone properties as listed in Exhibit 1 and shown on Exhibit 2. (b) The Council, held a public hearing on November 9, 2009, and considered the recommendation by staff and the Planning and Transportation Commission. ( c) The proposed ordinance is in the public interest and will promote the public health, safety and welfare, as hereinafter set forth, and is consistent with the City's Comprehensive Plan. SECTION 2. Section 18.08.040 of the Palo Alto Municipal Code, the "Zoning Map," is hereby amended by adding the Ground Floor (GF) combining district to the properties listed on Exhibit 1. SECTION 3. Section 18.30(C) (Ground Floor (GF) Combining District Regulations) of the Palo Alto Municipal Code is hereby amended to delete Section 18.30(C).040 (Use Exemptions). SECTION 4. Section 18.18.060(f) (Restrictions on Office Uses) of the Palo Alto Municipal Code is hereby amended to delete Section 18.18.060(f)(l) and rename Section 18. 18.060(f)(2) to 18. 18.060(f)(1 ). SECTION 5. This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQ A as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. II II 1 091103 syn 0120418 NOTE YET APPROVED SECTION 6. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney Director of Planning and Community Environment 091027 syn 0120418 APPROVED: Mayor City Manager 2 EXHIBIT 1 The following properties will be added to the Ground Floor (GF) Combining District: 200-228 Hamilton Avenue APN 120-27-008 230-238 Hamilton Avenue -APN 120-27-009 240-248 Hamilton Avenue APN 120-27-010 412 Emerson Street APN 120-26-106 420 Emerson Street APN 120-26-025 430 Emerson Street APN 120-26-026 EXHIBIT 2 ~ ---I 2SD !!I 2 I I w lO) I ~ iUEROON8T1fi:T 11 11 MIGHI :rAII!ET • I I: ! 1:' ~ 1132 ill! m I I i. 116-122 !-- HIO i '1 I Legend c:::J CD-C (GF) (P) Zone c::J CD-C (P) Zone ALMA STREET v .. = .. = .... = ..... = .. = ... = ...................... c.= .... =,.,-J!I,----,--,=== The City of Palo Alto JcuUer, 2009~18 15:48:30 Jc Downlown Zoning (\\oo-mapslgls$\glsladmln\PersonallPlamlng.mdb) ATTACHMENT 8 S01 COWPER STREET I-1--'-- -- ···························1 ~l!l I--J:~i h~ 457-4671 ! WAVERLEY STREET Downtown Zoning with Ground Floor Retail Protections This map is a product of the City of Palo Alto GIS -. 0' 3.58' This documanll. a graphIc "'p",senIaUon only of besl available SOIJrtes. The CIIy of Palo AIIo assumes no rSSPDnsiblll1y for any errors @1989102009 CIIy of Palo Alto j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j ATTACHMENT C 18.18.060 Development Standards (d) Hotel Regulations (1) Hotels, where they are a permitted use and generate transient occupancy tax (TOT), may develop to a maximum FAR of2.0: 1. (2) Hotels may include residential condominium use, subject to: (A) No more than 25% of the floor area shall be devoted to condominium use; (B) No more than 25%) of the total number of lodging units shall be devoted to condominium use; and (C) A minimum FAR of 1.0 shall be provided for the hotel/condominium building( s). (e) Exempt Floor Area When a building is being expanded, square footage which, in the judgement of the chief building officia~ does not increase the usable floor area, and is either necessary to conform the building to Title 24 of the California Code of Regulations, regarding handicapped access, or is necessary to implement the historic rehabilitation of the building, shall not be counted as floor area. (f) Restrictions on Office Uses (1 ) In all CD subdistricts, no medical, professiona~ or general business office shall be located on the ground floor, except such offices which: (A) Have been in continuously in existence in that space since March 19,2001, and, as of such date, were neither non-conforming nor in the process ofbeing amortized pursuant to Chapter 18.30(D; (B) Occupy a space that was not occupied by housing, retail services, eating and drinking services, personal services, or automotive service on March 19,2001 or thereafter; (C) Occupy a space that was vacant on March 19,2001; (D) Are located in new or remodeled ground floor areas built on or after March 19, 2001 if the ground floor area devoted to housing, retail services, eating and drinking services, personal services, and automobile services does not decrease; or (E) Are on a site located in an area subject to a Specific Plan or Coordinated Area Plan, which specifically allows for such ground floor medical, professional, or general business offices. (2) In the CD-S and CD-N subdistricts, the following requirements shall apply to office uses: (A) No new gross square footage of a medical, professional, general business, or administrative office use shall be allowed, once the gross square footage of such office uses, or any combination of such uses, on a site has reached 5,000 square feet. , (B) No conversion of gross square footage from any other use to a medical, professional, general business, or administrative office use shall be allowed once the gross square footage of such office uses, or any combination of such uses, on a site has reached 5,000 square feet. Ch. 18.18 -Page 9 (Supp. No 13 10/1/2007) j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j ATTACHMENT 0 18.30(C).030 Conditional Uses Chapter 18.30(C) GROUND FLOOR (GF) COMBINING DISTRICT REGULATIONS Sections: 18.30(C).010 Specific Purpose 18.30(C).020 Permitted Uses 18.30(C).030 Conditional Uses 18.30(C).040 Use Exception 18.30(C).010 Specific Purpose The ground floor combining district is intended to modifY the uses allowed in the CD commercial downtown district and subdistricts to allow only retail, eating and drinking and other service-oriented commercial development uses on the ground floor. For the purposes of this chapter, "ground floor" means the first floor which is above grade. Where the ground floor combining district is combined with the CD district, the regulations established by this chapter shall apply in lieu of the uses normally allowed in the CD district. Except for the regulations relating to uses set forth in this chapter, all other regulations shall be those of the applicable underlying CD district. (Ord. 4098 § 2 (part), 1992) 18.30(C).020 Permitted Uses (a) The following uses shall be permitted in the OF combining district: (1) Eating and drinking; (2) Hotels; (3) Personal services; (4) Retail services; (5) Theaters; (6) Travel agencies; (7) Entrance, lobby or reception areas serving nonground floor uses; (8) All other uses permitted in the underlying district, provided such uses are not on the ground floor. (b) Notwithstanding subsection (a), not more than twenty-five percent of the ground floor area not fronting on a street may be occupied by a use permitted in the applicable underlying CD district. (Ord. 4098 § 2 (part), 1992) 18.30(C).030 Conditional Uses (a) The following uses may be conditionally allowed on the ground floor in the OF ground floor combining district, subject to issuance of a conditional use permit in accord with Ch. 18.30 -Page 7 (Supp. No 13 -10/1I2007) 18.30(C).040 Use Exception Chapter 18.76 (permits and Approvals) and with the additional finding required by subsection (b): (1) Busmess or trade school; (2) Commercial recreation; (3) Day care; (4) Financial services, except drive in services; (5) General business service; (6) All other uses conditionally permitted in the applicable underlying CD district, provided such uses are not on the ground floor. (b) The director may grant a conditional use permit under this section only ifhe or she makes the following finding in addition to the findings required by Chapter 18.76 (permits and Approvals): The location, access or design of the ground floor space of the existing building housing the proposed use, creates exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district. (c) Any use conditionally permitted pursuant to this section shall be effective only during the existence of the building that created the exceptional circumstance upon which the finding set forth in subsection (b) was made. (Ord. 4826 §§ 94, 95,2004: Ord. 4098 § 2 (part), 1992) 18.30(C).040 Use Exception (a) Application may be made to the director of planning and community environment for an exception to the otherwise permitted or conditionally permitted ground floor uses, to allow a use permitted in the applicable underlying CD district, if the following conditions are met: (1) The initial application for the exception is made when the vacancy rate for ground floor properties within the GF combining district, as determined by city survey, is five percent (5%) or greater. (The city shall conduct the vacancy rate survey in September of each year.); and (2) The applicant can demonstrate that the ground floor space for which the application is being made has been vacant and available for occupancy six months or more at the time of the application. (b) Any exception granted pursuant to this section shall be for a specific use, and shall be effective for five years, or less time if requested by the applicant. (Ord. 4098 § 2 (part), 1992) {Supp. No 13 -10/1/2007 Ch. 18.30 -Page 8 ATTACHMENT E PLANNING & TRANSPORTATION DIVISION STAFF REPORT TO: PLANNING & TRANSPORTATION COMMISSION FROM: Jennifer Cutler Planner AGENDA DATE: September 23, 2009 DEPARTMENT: Planning and Community Environment SlTBJECT: Amendment of the Palo Alto Municipal Code Chapter 18.0S.040 (the Zoning Map), Chapter 18.30(C) (the Ground Floor (GF) Combining District), and Chapter 18.18 (the Downtown Commercial Community (CD-C) Zone District) to Modify Restrictions on Ground Floor Uses in the Downtown RECOMMENDATION: Staff recommends that the Planning and Transportation Commission (P&TC) recommend amendment of the Zoning Map and Text Changes to the Palo Alto Municipal Code Chapter IS.30(C) (Ground Floor (GF) Combining District) and Palo Alto Municipal Code Chapter IS.18 (Downtown Commercial Community (CD-C) District) to City Council for the purpose of modifying the restrictions on ground floor uses, as set forth in Attachment A with attached Exhibits. PURPOSE AND BACKGROUND: The purpose of these changes to the Zoning Ordinance is to address concerns about the loss of revenue generating retail and potential degradation of downtown vitality from an increase in ground floor office space in the downtown core and due to dispersal of retail and personal service uses into the area outside the core. The changes to the Zoning Ordinance were initiated by the P&TC on July 22,2009, with the request that staff conduct outreach meetings with owners of property and businesses in the downtown core to get feedback on the potential code changes. City staff attended meetings of the Chamber of Commerce and the Downtown Business Improvement District on August 5th and 12th, respectively. Following those meetings, staff sent out notice cards to downtown property and business owners for two meetings held at City Hall on August ISth and 25th, A follow-up meeting with interested parties to discuss potential map changes was held on September 2nd, City of Palo Alto Page 1 Ground Floor (GF) Combining District The regulations contained in the Ground Floor (GF) Combining District were initially implemented in 1986 with the creation of the CD zoning district as a subdistrict to that district. The GF combining district restricts ground floor uses, unless a conditional use permit is granted, to the following: (1) Eating and drinking; (2) Hotels; (3) Personal services; (4) Retail services; (5) Theaters; (6) Travel agencies; (7) Entrance, lobby or reception areas serving on ground floor uses. The only significant changes since the original 1986 code are the inclusion of conditional uses which include commercial recreation, daycare, financial services, and others (see Attachment C for the full list). This combining district also contains a section allowing for a request for a use exception when the vacancy rate for ground floor properties within the GF combining district is five percent (5%) or greater, and the ground floor space has been vacant and available for six months or more. Commercial Downtown (CD) District The restrictions on ground floor use in commercial districts throughout the City were implemented at a City Council Meeting on November 19, 2001. These restrictions bar medical, professional, or general business offices located on the ground floor except in certain situations, including existing offices, and locations that have not been occupied by housing, retail, restaurants, personal services or automotive services since March 19,2001 (Attachment B). These restrictions are different from the GF restrictions, in that they protect only existing ground floor retail by preventing ground floor office if there is or has been retail (or one of the uses listed above) in that location on or since March 19, 2001. These restrictions do not include a provision allowing the Director to issue Use Exceptions upon a determination that a specified vacancy rate has been exceeded, as is found in the GF district. Vacancy Rate Current estimates place the vacancy rate for ground floor spaces in the downtown core Ground Floor (GF) Combining District at approximately 10%. The formal calculation of the vacancy rate in the downtown core is conducted each September and reported to City Council shortly thereafter. It is calculated based on the square footage of ground floor space vacant at that time. This report outlines proposed changes to these existing zoning designations and the zoning map developed by staff, based on input from downtown property and business owners, to help address potential problems related to high vacancy rates. DISCUSSION: The predominate zoning classifications in the downtown area are CD-C(GF)(P) on both sides of University Avenue and north of Hamilton A venue between Alma and Waverley Streets, and CD- C(P) located on Lytton A venue between Alma & Kipling Streets to Forest Avenue between City of Palo Alto Page 2 Emerson & Waverley Streets. Attachment A shows a map of these zones. Most of the unmarked properties in the downtown core area are either Planned Community (PC) zones or Public Facility (PF) zones (Attachment B). The CD-C regulations, as well as those of the other commercial districts within the City, include restrictions on ground floor office uses. These restrictions focus mostly on protecting existing housing, retail, restaurants, personal services and automotive services in the ground floor space. These regulations do not provide any opportunity for sites with these uses to revert to office under any conditions but they do not prevent office from continuing where it currently exists. The intent of the OF restrictions is to modify the uses allowed in the CD commercial downtown district and subdistricts to allow only retail, eating and drinking, and other service-oriented commercial development uses on the ground floor. The OF code, Palo Alto Municipal Code (PAMC) Section 18.30(C).010, lists specific uses allowed on the ground floor, but allows for a Use Exception when the vacancy rate for ground floor properties within the OF combining district is five percent (5%) or greater and the applicant can show that the location has been vacant and available for six months or more. There is no provision for a Use Exception in the similar restrictions existing within the CD district (PAMC Section 18.18.060(f)). Business Outreach: Two meetings with downtown property and business owners were held at City Hall on August 18th and 25th to discuss four key questions. These meetings had an attendance of approximately 15-20 people each. A follow-up meeting with interested parties to discuss the specific map changes was held on September 2nd• The four questions addressed in these discussions were as follows: 1. Should the vacancy rate required for a use exception request to allow ground floor office in the Oround Floor (OF) combining district be increased (from its current 50/0), or should the use exception process be removed completely? 2. Should the restrictions in the Commercial Downtown Community (CD-C) district outside of the OF zone be revised to allow office space where retail currently exists? 3. Should the OF district boundaries be revised? If so, what areas should be added to the OF district, and which should be removed? 4. Are there certain uses that should be limited in quantity in the downtown core? Restaurants and financial institutions are two that have been discussed. If so, what limits might be set? The meetings revealed a high level of consensus between those who attended the meetings, as well as those who called in with comments. Attendees voiced strong support for removal of the use exception from the code (Item 1) so as to protect what was felt to be the essential continuity of retail in the downtown core. Item 2, the increased flexibility in ground floor uses outside of the OF Combining District, also received significant support, as long as the map boundaries were adjusted to include certain valuable retail areas, and provide relief for some OF-zoned sites that City of Palo Alto Page 3 are not desirable for retail (Item 3). Alma Street was called out as a particularly difficult location for retail, but the vitality of the Emerson Street retail corridor was discussed as a potential area for added protection. Attendees agreed that financial institutions that act like offices were inappropriate on the ground floor of buildings in the core where the continuity of the pedestrian environment is so important, but acknowledged that could be addressed through existing conditional use permit process. There was strong opposition to the idea of restricting other uses, such as restaurants, which support the vitality of downtown and are generally limited and controlled by economic factors. Staff Recommended Changes to Ground Floor (GF) Combining District Regulations: Staff recommends removal ofPAMC Section 18.30(C).040 so that there will no longer be the option for a Use Exception based on vacancy rate. Staff Recommended Changes to Downtown Comnlercial (CD-C) District Regulations: Staff recommends removal of PAMC Section 18.18.060(f)(1) so that loss of flexibility of ground floor uses in the downtown core covered by the OF Combining District will be balanced by an increase in flexibility for ground floor uses in the periphery of the downtown. Staff Recommended Revisions of Zoning Map: Staff recommends revisions to PAMC Section 18.08.040 (the Zoning Map) to remove from and add specific properties to the OF Combining District. The list of properties is provided as Exhibits 1 and 2 of Attachment A. The key changes and other considerations included: • Removal of OF protection from properties along Alma Street, and portions of High Street (near Hamilton Avenue). • Removal of OF protection from properties along the circle ramps connecting University A venue and Alma Street. • Added OF protections to the existing retail on the south side of the strongest block of retail on Hamilton Avenue (the 200 block between Emerson Street and Ramona Street) and to the Aquarius Theater and the two restaurant sites imnlediately to the north on Emerson. • Three miscellaneous non-retail parcels along Kipling and Cowper north of University are also proposed to be removed from the OF zoning. • No changes to University A venue east of Cowper Street. • No changes to Bryant between University A venue and Hamilton A venue. Staff believes-that these changes reflect the areas of downtown that are most valuable as retail assets and provide a logical retail core that is not just University Avenue, but the "t" created by University A venue and Emerson Street as it connects to the Aquarius Theatre in one direction and the SOFA district in the other. Discussion of the properties along Emerson Street between Hamilton Avenue and Forest Avenue resulted in the conclusion that those properties are not as strong candidates for the OF combining district as they are separated from the downtown core retail by Casa Olga on the comer of Hamilton Avenue and Emerson Street and likely to stay retail without additional restrictions. The retail emphasis is also focused only on one side (west) of Emerson Street. City of Palo Alto Page 4 Staff Recommended Limits on Businesses of Concern: Staff recommends no changes to the limits on specific businesses of concern. This recoriunendation in regards to financial institutions is based on the finding that financial institutions are currently restricted by a requirement for a Conditional Use Permit within the GF Combining District, and can therefore be required to provide an active pedestrian environment on the street prior to granting of any permit. In regards to a concern expressed by the P&TC about the number of restaurants, the public feedback received strongly supported the idea that economic forces would provide sufficient controls, and that the additional process and expense that would be imposed on potential new restaurants in order to limit their numbers would have a significant negative impact on the vitality of downtown. Planning & Transportation Commission Comments at Initiation: Minutes of the meeting to initiate these changes to the Municipal Code are included as Attachment E of this report. Staff has prepared a table of the comments received at that meeting and responses as Attachment F. POLICY IMPLICATIONS: In addition to Policies that support the retail vitality of the University AvenueIDowntown area, the Palo Alto Comprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University A venueIDowntown area. Keep the Planning Commission and City Council advised of the findings on an annual basis. ENVIRONMENTAL REVIEW: This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. ATTACHMENTS: A. Draft Ordinance with Exhibits (Exhibits 1 and 2, property lists, and Exhibit 3, map showing proposed revised locations of GF combining district) B. Map showing existing location ofCD-C zoning and GF combining C. Ground floor use restrictions for CD-C zoning district (PAMC Section 18.18.060(f» D. GF zoning district regulations (pAMC Section 18.30(C).060) E. P&TC Meeting Minutes, July 22,2009. F. Table showing PTC's Concerns and Staff's Responses Prepared by: Jennifer Cutler, Planner Reviewed by: Amy French, Current Planning Manager DepartmentiDivision Head Approval: __ C]~..I-~Z.lI"-~:oo.......;:~~~~~:..3w' ~~.~~~.--____ _ Curtis Williams, Director City of Palo Alto Page 5 j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j ATTACHMENT F PLANNING & TRANSPORTATION DIVISION STAFF REPORT TO: PLANNING & TRANSPORTATION COMMISSION FROM: Jennifer Cutler Planner AGENDA DATE: . July 22, 2009 DEPARTMENT: Planning and Community Environment SUBJECT: Initiation of Zoning Map and Text Changes to Palo Alto Municipal Code Chapter 18.30(C) (the Ground Floor (GF) Combining District) and Palo Alto Municipal Code Chapter 18.18 (Downtown Commercial Community (CD-C) Zone District) to Modify Restrictions on Ground Floor Uses RECOMMENDATION: Staff recommends that the Planning and Transportation Commission (P&TC) initiate changes to the Zoning Ordinance to modify the restrictions on ground floor uses in Palo Alto Municipal Code Chapter 18.30(C) (the existing Ground Floor (GF) Combining District) and Palo Alto Municipal Code Chapter 18.18 (Downtown Commercial Community (CD-C) District), and direct the Director of Planning and Community Environment (Director) to prepare the proposed zoning ordinance text and potential zone district boundaries. PURPOSE AND BACKGROUND: The purpose of these changes to the Zoning Ordinance is to address concerns about the revenue generating retail and downtown vitality of downtown through increased office uses on ground floor in the downtown core and due to dispersal of retail and personal service uses. Ground Floor (GF) Combining District The regulations contained in the Ground Floor (GF) Combining District were initially implemented in 1986 with the creation of the CD zoning district as a subsection to that district. The text of the regulation, which stays essentially intact from the original 1986 regulations, was converted as a combining district separate from the CD zones in 1992. The only significant changes since 1986 are the inclusion of conditional uses which include commercial recreation, daycare, financial services, and others (see Attachment C for full list). This combining district also contains the use exception wording from the original ground floor section of the CD zone. City of Palo Alto Page 1 This section allows for request for a use exception when the vacancy rate for ground floor properties within the GF combining district is five percent (5%) or greater, and the ground floor space has been vacant and available for six months or more. Commercial Downtown (CD) District The restrictions on ground floor use in commercial districts throughout the City were implemented at a City Council Meeting on November 19, 2001, in response to a Colleague'S Memo dated March 15, 2001. These restrictions bar medical, professional, or general business offices located on the ground floor except in certain situations, including existing offices, and locations that have not been occupied by housing, retail, restaurants, personal services or automotive services since March 19, 2001 (Attachment B). These restrictions do not include a provision allowing the Director to issue Use Exceptions upon a determination that a specified vacancy rate has been exceeded, as is found in the GF district. Vacancy Rate Current estimates place the vacancy rate for ground floor spaces in the downtown core Ground Floor (GF) Combining District between 10 and 15 %. The formal calculation of the vacancy rate in the downtown core is conducted each September and is calculated based on the square footage of ground floor space vacant at that time. With the vacancy rate potentially above the 5% threshold, there are also concerns that areas on the edge of the CD-C and GF areas may not be strong retail locations and therefore detract from the vitality of the downtown core. Some examples include spaces at 265 Lytton, and 530 University. This report outlines potential changes to these existing zoning designations and the zoning map to help address potential problems related to high vacancy rates. If the P &TC agrees that this issue should be addressed, it should initiate the zone change and staff will return with a proposed ordinance. DISCUSSION: The predominate zoning classifications in the downtown area are CD-C( GF)(P) on both sides of University Ave and north of Hamilton between Alma and Waverley, and CD-C(P) located on Lytton between Alma & Kipling to Forest between Emerson & Waverley. Attachment A shows a map of these zones. Most of the unmarked properties in the downtown core area are either Planned Community (PC) zones or Public Facility (PF) zones (Attachment A). The CD-C regulations, as well as the other commercial districts within the City, include restrictions on ground floor office uses. These restrictions focus mostly on protecting housing, retail, restaurants, personal services and automotive services that exist in the ground floor space. These regulations do not provide any opportunity for sites with these uses to revert to office under any conditions. The intent of the GF restrictions is to modify the uses allowed in the CD commercial downtown district and subdistricts to allow only retail, eating and drinking, and other service-oriented commercial development uses on the ground floor. This combining district is primarily used on properties in the downtown but since 2001, also applies to properties along Middlefield Road in Midtown. The GF code, Palo Alto Municipal Code (FAMC) Section 18.30(C).010, lists specific City of Palo Alto Page 2 uses allowed on the ground floor, but allows for a Use Exception when the vacancy rate for ground floor properties within the GF combining district is five percent(5%) or greater and the applicant can show that the location has been vacant and available for six months or more. There is no provision for a Use Exception in the similar restrictions existing within the CD district (PAMC Section 18.18.060(1). Revisions to the CD-C and GF zones that have been suggested for potential discussion include (but are not restricted to) the following: 1. Increase the vacancy rate (to 15 or 20%) required in the GF combining district applied to the downtown core before a Use Exception may be considered and issued by the Director (P AMC 18.30(C).040). This revision to the code would strengthen the downtown retail core by preventing significant requests for use exceptions when the City is in an economic downturn. 2. Allow office on the ground floor of buildings within the CD-C district outside of the GF downtown core, regardless of their previous use. This revision to the code would encourage property owners to allow retail without excluding the possibility of converting back to office at some future date. This revision to the code would encourage concentration of retail use to those locations covered by the GF combining district. Alternatively, this flexibility could be limited to certain sites only. 3. Revise the boundary of the downtown GF combining district to expand or contract the boundary to better reflect the current downtown core, and to Include the most viable CD-C retail areas. 4. Differentiating between retail use and restaurant use. This might be a method for limiting the number of restaurants within the downtown core, to maintain and encourage a greater variety of retail use. Since the City no longer limits the number of downtown restaurants serving alcohol on a block by block basis, the number of conversions from retail use to restaurant use in the GF area has increased and that number could increase further in the future. It is generally true for Palo Alto's downtown core that once a commercial space has converted to restaurant use, with all of the associated tenant improvements, it is less likely convert back to retail use. Business Outreach: On July 8,2009, city staffmet with developers, owners and managers of downtown properties, and representatives from the Downtown Business Improvement District and Chamber of Commerce, to solicit their reactions to the proposals listed above, as well as to receive any recommendations they might have on the subject. The comments received at that meeting included the following: 1. It is a misconception that more retail floor area means more sales tax, as the level of retail quality can decline. 2. A certain amount of office space is needed because office tenants support the retail and make the downtown active during the daytime. City of Palo Alto Page 3 3. Restaurants are the anchor tenants for Palo Alto's downtown and extend the active hours of downtown. 4. Downtown areas not covered by the GF combining district should have more flexibility of uses including office, similar to SOFA II restrictions. 5. Dentists and walk-in service banks are also good uses in a downtown because their clients also support nearby retail shops. 6. Removal of the use exception provision contingent upon a 5% vacancy rate in GF district was generally supported, but support was not unanimous. 7. Removal of GF combining district from certain properties along Alma Street, and 'from properties on University Avenue north of Cowper Street. POLICY IMPLICATIONS: In addition to Policies that support the retail vitality of the University A venuelDowntown area, the Palo Alto Conlprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University AvenuelDowntown area. Keep the Planning Commission and City Council advised of the findings on an annual basis. ENVIRONMENTAL REVIEW: This action (initiation of zoning changes) by the Planning and Transportation Commission is not considered a project under the California Environmental Quality Act (CEQA). Any subsequent zoning map amendment would be subject to review under CEQA. ATTACHMENTS: A. Map showing location of CD-C zoning and GF overlay B. Ground floor use restrictions for CD-C zoning district (PAMC Section 18.18.060(f)) C. GF zoning district regulations (p AMC Section 18.30(C).060) D. Commercial Downtown (CD) Monitoring Report CMR, May 18,2009. Prepared by: Jennifer Cutler, Planner Reviewed by: Amy French, Current Planning Manager Department/Division Head Approval: __ Q~~E.Z...::...........,;.~_UJ.-;......;=-..;:om~~L_~.w:;.""'::...-~:--____ _ Curtis Williams, Interim Planning Director City of Palo Alto Page 4 ATTACHMENT G 1 Planning and Transportation Commission 2 Verbatint Minutes 3 September 23, 2009 4 5 EXCERPT 6 7 Ground Floor Retail Vitality and Protection Ordinance: Review and recommendation to 8 city Council to amend the Zoning Map and Text of Palo Alto Municipal Code Chapter 9 18.30(C) (Ground Floor (GF) Combining District) and Palo Alto Municipal Code Chapter 10 18.18 (Downtown Commercial Community (CD-C) Zone District) to Modify Restrictions 11 on Ground Floor Uses. 12 13 Ms. Jennifer Cutler, Planner: Yes. Good evening Commissioners. This item is a City initiated 14 action. In the Staff Report for this item we have provided a draft ordinance, which includes 15 changes to both the CD-C zoning district and the GF Combining District, as well as the map 16 where these zones apply. 17 18 These changes are recommended by Staff based on extensive research and public outreach since 19 our last meeting on this item when it was initiated. The public outreach included attending 20 meetings of the Chamber of Commerce, the Downtown Business Improvement District, as well 21 as three separate meetings at City Hall to which property and business owners in the CD-C and 22 GF Districts were invited by custom notice cards that were sent to all listed property owners and 23 business owners. The intent of these recommended changes are to modify the ground floor use 24 rules in the Downtown, to enhance and protect the vitality of the Downtown core. 25 26 The existing GF District covers the core of Downtown, which you can see in orange on the map 27 up above here. In these code sections there is a list of seven permitted uses and five 28 conditionally permitted uses on the ground floor level. None of these uses are office. This 29 district also has a provision in it that allows a use exception when the City's calculated vacancy 30 rate of the ground floor area in this Ground Floor District grows above five percent. The current 31 estimate is approximately ten percent, though the official count for 2009 has not yet been 32 completed. So the previous count of 4.21 percent still stands. So at this time use exceptions are 33 not currently available. 34 35 The CD-C Zone covers all of Downtown and is shown in yellow where it is not combined with 36 the GF Combining District. This district has a greater number of allowed uses including office, 37 but there is a section of this code, which prevents office on the ground floor if the space has been 38 occupied by housing, retail services, restaurants, personal services, or automotive services since 39 March 2001. This protects existing retail but Staffs outreach has told us that it also prevents 40 some cautious property owners from taking a chance on retail if there is a chance that they might 41 want to switch back to office in the future. The fact that the CD-C District does not have 42 flexibility for ground floor uses once it has been retail also has the effect of spreading the 43 Downtown retail thin rather than allowing it to concentrate in the core orange section of the map 44 for the Downtown. 45 46 Staff s recommendation included in the Staff Report and draft ordinance are based on comments 47 fron1 the Commission at the initiation of this zone change in July and the public outreach 48 meetings. The recommendations include, first to strengthen the ground floor retail protections in 49 the GF core by removing the provisions for the use exception and vacancy rate calculation. Page 9 1 Second, to balance this increased restriction by loosening the restrictions on ground floor uses in 2 the periphery of Downtown, in the areas that are yellow covered by the CD-C District but not the 3 GF. Three, revisions to the map so that the GF District is adjusted to include some areas that 4 should continue to have protection on ground floor uses but remove it from those areas that are 5 not part of that essential Downtown core. 6 7 The public outreach also involved a discussion of possible limits on restaurants and other uses of 8 concern. The public feedback that was received strongly supported the idea that economic 9 factors would provide sufficient controls and that additional process and expense that would be 10 imposed on potential new restaurants in order to limit their numbers would have a significant 11 negative effect on the vitality of Downtown. 12 13 The next steps in this process will include additional outreach and then review by the City 14 Council. We expect the additional outreach will include sending additional custom notice cards 15 to all property and business owners within the CD-C and GF Districts as well as making specific 16 calls to the owners of those properties who are proposed to be specifically added to or removed 17 from the GF District. 18 19 Several questions were received by Staff from the Commissioners and responses have been 20 provided at places. Staff is available to answer any additional questions. Thank you. 21 22 Chair Garber: Commissioners, we will go directly to public comments. If you would I would 23 like you to hold any questions of those members of the public that may be speaking but we will 24 leave the public comment period open so that if we have questions of them when it comes back 25 to us for questions and comment we can ask people to approach and ask them directly at that 26 time. After we get through the public comments my proposal here is that we give each of us five 27 minutes to ask questions and/or comments so we can get through one row of comments. Then 28 potentially I would suggest that we do some straw polls querying the Commissioners specifically 29 on the recommendations by Staff and then we can open it up to further discussion. Ideally we 30 would get through this item in about an hour and a half or so under that plan. Is that acceptable? 31 I am seeing general nods of heads. Okay. 32 33 Let us invite the public to come and speak. We have three cards. The first is Jim Thoits 34 followed by Chop Keenan. You will have three minutes. 35 36 Mr. Jim Thoits, Palo Alto: Thank you very much. I am with Thoits Brothers. First of all I 37 would like to thank Staff and Curtis for the outreach to the business community and the property 38 owners on this process. We have attended the meetings and had a very good session and I 39 commend them for their work on this. 40 41 We have added some properties into the GF zone and we feel we have a good relationship with 42 what is being presented. There is one exception I would like to address and that is the property 43 at 285 Hamilton. We built this in 1969 as Thoits Brothers. It was designed around an office "Use. 44 Originally Great Western was in there for quite a few years if you remember. They left to move 45 across to 300 Hamilton. When they moved there Cornish & Carey occupied that space and was a 46 realty office for some time. When Cornish & Carey vacated your own developmental center 47 showed interest in it and they have been there since. 48 Page 10 1 We feel that the configuration of the building lends itself to an office use. It has a deep eave 2 setback. The retail accessibility and visibility is limited at that building. The use of the building 3 since inception has been office. We have enjoyed the office community there. I think it brings 4 vitality to the comer in its use. The use as a bank, the Cornish & Carey office, and now your 5 Development Center is an area that does see vitality. It sees a lot of activity back and forth. So 6 we feel that we would like to exclude this one property from the GF zone. I would like the 7 Commission to give this some consideration. Thank you very much for that. If there are any 8 questions I can answer now I can do that. 9 10 Chair Garber: There ~s a distinct possibility that you may be asked questions once we get 11 through the rest of the pUblic. Thank you. Chop Keenan followed by Faith Bell. 12 13 Mr. Chop Keenan, Palo Alto: Good afternoon. Well, I too want to echo Jim on the Staff 14 outreach on this. It has just been a delight to engage. It has been a lot of fun, a lot of arm 15 wrestling. There was no fait a complete, here is what we are going to do. It was really to gather 16 our input in huge contrast to maybe the Measure A output. Sorry, I couldn't help myself 17 18 So I know Jennifer walked every block in town. She had her walking shoes and so did the 19 people in my office. So we looked at every single property. We want to see the core 20 strengthened. The safety valve of the vacancy rate has been important, but hasn't been relevant 21 because it has been pretty vibrant for a long time. That vacancy rate is well in excess often 22 percent. There are spaces that are paying rent but that are vacant such as the old Magnolia's. 23 My guess is this is well north of 15 percent right now. 24 25 The other point I want to make is that these are symbiotic uses, office and retail. Those office 26 workers are customers so it is important that it be viewed that way and not as something that is 27 mutually exclusive. 28 29 I own the Aquarius Theater. It is one of those that is being proposed for GF on Emerson. I don't 30 have a big problem with it. I have turned down a lot of other alternatives for that property 31 because I just like to have the theater Downtown. I think it brings some vibrancy. Although 32 theaters don't pay a lot of rent it adds to our other holdings and so I would say that it is a little 33 deep, and I am not going to worry about it. Ifwe want to do something different there we will 34 come forward and talk about it then but it is way too deep to be all retail. Maybe the first 60 feet 35 would be more appropriate. 36 37 The ability to flip in and out of office in the yellow CD-C zone is essential. It is in my opinion 38 the quid pro quo here. We do not, when we have an office vacancy, even consider retail because 39 it is a one-way street. Once it goes to retail you can't flip back to office. The market has a funny 40 way of figuring these things out. Retail buildings, we get retail users and so I would encourage 41 you that that is a critical part of our endorsement of this densification of the GF zone. Thank 42 you. 43 44 Chair Garber: Thank you. Faith Bell, our last speaker. 45 46 Ms. Faith Bell, Bell's Books, Palo Alto: Hello once again. I would just like to lend my support 47 to the idea of the ground floor retail being extended along Emerson Street. I think that is 48 historically a retail district and has grown a lot in that way recently. I am distressed to think 49 about the circle at the end of University Avenue not being retail. I am also distressed to think Page 11 1 . about High Street not staying with a retail orientation. I think that to exclude that end of town 2 from a retail requirement will deaden it. I think that traditionally and historically it has been 3 retail. My father had a business going on the circle in 1935, and I would like to see that end of 4 town stay vibrant. I think that once you let it all revert to office spaces that won't happen. 5 6 I would also like to make a quick comment about the process here. While there are many people 7 in the development community who I respect I am somewhat concerned that it seems as if they 8 are the people who are primarily asked to give input to this process. I would have hoped that 9 there were some kinds of present legal parameters for determining which buildings count as 10 more suitable to retail application rather than people whose financial interests are so very strictly 11 tied to it. I would have thought that the master plan or some such document would have had 12 some guidelines to that and I would certainly like to see that brought to bear on it. So thank you 13 for your attention. 14 15 Chair Garber: Thank you. Commissioners, let's give ourselves each five minutes to ask 16 questions andlor make comments. We will get through one round of that and then we will do a 17 couple of straw polls to find out where the sensitive points are and then try and focus our 18 remaining discussion on those particular points. Commissioner Holman would you like to go 19 first? 20 21 Commissioner Holman: Sure, and I won't initially take five nlinutes. One question is a 22 procedural question. I do see that Susan Barnes, the Economic Development Planner, is here and 23 I was wondering if she might be asked to sit at the table because I am sure there are going to be 24 questions. 25 26 Chair Garber: Perfectly happy to have your five minutes start now. 27 28 Commissioner Holman: Okay. I had asked a question about SOFA II because my recollection, 29 and I did not have time to look it up, but my recollection of SOF A II is that ground floor retail is 30 required on the street fronts on Emerson Street. Could Staff give that indication, please? 31 32 Ms. Cutler: Yes, there is a specific section of SOFA II for sites on the Homer/Emerson corridor, 33 which is defined as Homer Avenue between Alma and Ramona, so I believe that is three blocks, 34 and Emerson Street between Forest Avenue and Channing, which I believe is two blocks that are 35 under restrictions that are very similar to what the CD-C has at the moment as well. Protection 36 for ifit has existing retail, eating and drinking, personal service, automotive services now or 37 since March 19, 2001. 38 39 Commissioner Holman: You said between Homer and Addison, right? What were the streets? 40 41 Ms. Cutler: Channing and forest. 42 43 Commissioner Holman: Okay. So what consideration was given to connecting those retail 44 requirements or was that considered? 45 46 Mr. Curtis Williams. Planning Director: There was much consideration. I would say that that's 47 probably the -although I have to say that we didn't focus on the fact that SOFA had that down 48 there but more the fact that there was retail down there and particularly that this is sort of a 49 corridor to Whole Foods and that node. So there was a lot of discussion about that. I think Page 12 1 ultimately the reason it wasn't was it starts to make that GF corridor start to stick out in a 2 different direction then and it is not sort of clustered together and separated by I guess it is Casa 3 Olga there too. That is certainly an issue for the Commission to discuss. There is logic to that 4 kind of connection but again starting to extend fingers of the GF down seemed somewhat 5 contrary to trying to sort of focus on it and compress it between Lytton and Hamilton. So 6 certainly we heard opinions on both sides of that issue and they both have some valid points. I 7 think you can probably ask for some of the folks out here to comment about their perspectives 8 because you will get both from them. 9 10 Commissioner Holman: I had hear, and I only heard this, I am not trying to start a rumor it is 11 just something I heard, that Casa Olga was going to be redeveloped, the property is going to be 12 redeveloped. Has Staffheard anything about that? 13 14 Mr. Williams: I have heard that from time to time but there has not been any kind of 15 presentation to us about any change on that site, not that I am aware of. 16 17 Commissioner Holman: A question for Susan Barnes. When I look at the circle and removing 18 the ground floor requirements there what pops into my mind is the situation that we have at 19 California Avenue where the train station is. It is not too dissimilar to the situation that we have 20 here. One of the things that are really problematic about California Avenue is leaving that train 21 station there are just dead walls there. While this wouldn't be dead walls I would like your 22 feedback on the impact of people again coming from the Stanford side, people coming from the 23 train station. They are coming along and they are not going to see the interface with retail and 24 services there but potentially offices. Could you comment on that and compare it to California 25 Avenue if you might? 26 27 Ms. Susan Barnes, Economic ResourceslRedevelopment Program Manager: We talked quite a 28 bit about that and what we were hearing from a number of the businesses and property owners 29 there is that the configuration of the buildings specifically on the south side there was not very 30 conducive to retail uses, and what was happening was people were walking directly from the 31 train station and were not stopping at those businesses. There had been a lot of turnover and that 32 type of thing. 33 34 I actually kind of like that circle and I kind of often gave the position that if we really did have a 35 walkable comnlunity that those places were accessible and the parking wasn't as difficult and 36 things like that. But really what we heard from property owners and a number of businesses was 37 they didn't think it was very conducive, especially in those first few spaces there. 38 39 I think it is a little bit different than the California Avenue area just by virtue of the types of 40 businesses that are there. The Plantation Cafe tried very, very hard to make it there and had a lot 41 of difficulty. So I don't know. I think it is one of those areas that we had kind of want to ..... 42 43 Mr. Williams: If I could add, I think also one of the difficulties was that isn't, unlike the other 44 streets here where you are up on a flat surface and it is easily walkable and connectable, you 45 have the vehicular traffic coming under there and up, and just is kind of a mess and sort of 46 difficult to anticipate particularly a highly viable retail space but celiainly there have been retail 47 spaces there. They have not been too long lasting but they continue to pop up there. So like 48 Susan said, it is another one of those areas that there was a lot of discussion about. 49 Page 13 1 Commissioner Holman: I will pass now of course because of the five nlinutes but I am going to 2 have some follow-ups to that line of questioning. 3 4 Chair Garber: Sure. Commissioners, someone else? Commissioner Fineberg. 5 6 Commissioner Fineberg: I would like to follow up on Commissioner Holman's question about 7 Casa Olga. If one is to believe what one sees in the newspaper the intermediate care facility that 8 located at that site is being closed. The folks that called that home are moving out in a very short 9 period of time, and I believe there was a quote from Jim Baer talking about working with the 10 developers to determine an advantageous way to redevelop the property that would benefit the 11 public. Again, I understand that until there is something concrete they are not going to come to 12 Staff but that plants a seed in my mind that more than any time in the last 30 years that property 13 is likely to be redeveloped. So I don't necessarily know what the answers are for that block on 14 Emerson but I think we ought to consider what happens with Emerson with the assumption that 15 there is high likelihood that in a short period of tinle it will be developed. We need to zone for 16 what we want, the community, what gets built will be what we allow. So the community needs 1 7 to have some discussion and thought as to what should be there when it is, if it is indeed 18 redeveloped. Again, I am going from what I read in the press, it is likely to be redeveloped more 19 so than in the past. That's it. 20 21 Mr. Williams: Excuse me, Chair Garber. First of all, Ijust want to let you all know, I apologize, 22 but I need to go next door to the Council Candidate orientation. I will probably be running back 23 and forth during this meeting. So if you see me get up and leave I will probably be back. 24 25 I did want to point out that one of the things we want to stress here is that just because something 26 or a site is in this yellow area, which wouldn't have the same protection as before, does not nlean 27 that it would not be retail. There is nothing that says that it now has to be office. There are lots 28 of areas around the perimeter of this that either developed as retail before we had these 29 regulations or even outside the yellow and have developed as retail. So it is just a matter of is 30 there flexibility to go in and out. Maybe Casa Olga is a location that it is a criticallynchpin and 31 you feel like that needs to have that protection. I just want to be sure we are not assuming that 32 everything in yellow is automatically office just because it doesn't have that same level of 33 protection. 34 35 Chair Garber: Thank you. I failed to inform the Commission that the Planning Director is going 36 to be flipping between meetings. The other thing to note is that both the Planning Director and 37 the City Attorney will have to leave early this evening in preparation of arriving here very early 38 tomorrow with the anticipated furlough issue. So take advantage of them while we have them. 39 40 Commissioner Fineberg, did you have a follow up? Okay. Commissioner Tuma and then 41 Keller. 42 43 Vice-Chair Tuma: I want to delve into a little bit about the input from the community and 44 various components of the community because I think this is a situation where obviously Staff 45 highly valued the input from the business community. They are probably better well situated 46 than Staff or the Planning Commission for that matter to really understand the nuances of the 47 business climate. So I am very inclined to rely on that information as well but I want to make 48 sure that we have an adequate cross-section of different players who have had not only the 49 opportunity which was through the invitations that were extended by Staff but who actually did Page 14 1 come in and talk to you folks. So there are a couple of specific areas in the Staff Report where it 2 sounds like you are relying fairly heavily on that input. 3 4 One of those has to do with whether or not there should be any limits put on restaurants. So that 5 is by way of example, but I think it would be helpful for us and the public to understand, and 6 there was one comment made by one of our speakers as to who all was involved in these 7 discussions, not only who was invited but who was actually involved and formed the basis for 8 some of the recommendations that we have here. I did see the list that was provided in response 9 to Commissioner Martinez's question but that didn't really sort of identify for me on the 10 particular issues that were relying on this input, who were the players that were given that input. 11 So if you could give us a little bit more background on that that would be great. 12 13 Ms. Cutler: One of the other attachments that I included with our responses to Commissioner 14 Martinez's questions was the list of questions and kind of the outline we provided at each of 15 these meetings. We started with a meeting that was mostly property owners. The second 16 meeting we had property owners and business owners were both invited. We held it here. That 17 meeting was really a useful because we did have a good mix, a number of different business 18 owners or managers as well as property owners. Also in addition to that Curtis and Susan 19 attended the Downtown Business Improvement District meeting, the Chamber of Commerce, so 20 we got some more feelers out there to the business owners. We covered all of these topics as 21 best we could in those discussions with all of them. 22 23 Vice-Chair Tuma: I know sometimes with outreach we ask for participation and we don't get it, 24 or we get it but it only comes from sort of one perspective or a couple of perspectives. Do you 25 feel that through the discussions that you have had that the various different perspectives are all 26 reflected in the recommendations that you have made or were some of the recommendations that 27 you have made in the absence of input from certain sectors? 28 29 Ms. Cutler: From the diversity of people that we had I feel that we did have representatives of 30 small business owners, people who owned just one property, larger property owners. So we had 31 representatives from each of those sectors. While there are different opinions between the 32 different people we had good discussion and at the end of these meetings I feel like in general the 33 consensus was of support of these recommendations. 34 35 Vice-Chair Tuma: Okay. Could you comment on Mr. Thoits' request regarding 285 Hamilton? 36 37 Ms. Cutler: At the moment I believe our recommendation is to keep that block of Bryant in the 38 GF overlay. While it has some difficulties at the moment with the new development on the 39 comer of University and Bryant I think it is important to hold onto to trying to keep that a good 40 strong retail. Removing that comer from the GF might be of concern because it breaks up 41 potential future continuity but I think part of what he has to say about it not being conducive to 42 . future retail use because of the design of the building does have some merit as well. 43 44 Vice-Chair Tuma: Okay, but just be clear, we are not changing anything there. 45 46 Ms. Cutler: Correct. Weare not proposing any changes for that site. 47 48 Vice-Chair Tuma: Okay. 49 Page 15 1 Chair Garber: Go ahead. 2 3 Ms. Barnes: I think that Bryant Street has been problematic for a while. We have had sonle 4 concerns about the amount of turnover of businesses on Bryant Street. We also recognize the 5 fact that with the revitalization of the Walgreen's comer that that street is going to yet change 6 again. There has been an awful lot of construction there. It has been problematic for those 7 businesses that have been located there. The reason that we have kind of kept that particular 8 piece in is for the kind of continuity that Jennifer is talking about. There are a number of small 9 businesses across the street there and the synergy seenlS to work, but she is right also about, and 10 Jim is also right about the configuration of the business and it is problematic. 11 12 Vice-Chair Tuma: Okay. One last question again related to outreach. For the properties that are 13 being changed either in or out has Staffhad discussions with every single owner and business 14 operator of those properties to make sure they understand that this is going on and to get their 15 feedback on it? 16 17 Ms. Cutler: I don't believe that we have had individual discussions with everyone of them. I 18 believe our goal would be once we have a recommendation from the Planning Commission we 19 would do outreach to them so they are aware of what that final recommendation from the 20 Planning Commission is to Council before the Council sees this issue. 21 22 Vice-Chair Tunla: Okay, thank you. 23 24 Chair Garber: Commissioner Keller and then Lippert. 25 26 Commissioner Keller: Thank you. First of all I would assume that there is universal agreement 27 with respect to eliminating the potential of the use exception, which is the Staff recommended 28 change to Ground Floor, the first change. I think we will probably see that in the straw vote. 29 30 Secondly, with the second item I hear a concern about the idea of there being two-way -in other 31 words, right now going to retail is a ratchet. Ifit becomes retail it has to stay retail. I understand 32 that that is a concern for property owners to go to retail. So firstly I think we don't want to lose 33 the existing retail that is there and reducing the protection for the existing retail uses if there is 34 some property that becomes vacant then there might be a desire to make it not retail, and that 35 would cause some sort of discontinuities in whatever retail exists. So I think there is a desire to 36 strengthen retail. I agree with the members of the public, the property owners that office uses do 37 enhance retail, but office uses on second or upper floors enhance retail more than office uses on 38 the ground floor. So office uses above retail is much more synergistic than office uses down on 39 the ground floor that cause a breakup of the retail uses and cause the pedestrian flow to be 40 broken up. An example of that if you will is that with the Wells Fargo Bank at University and 41 Bryant sort of breaks that up in a way that is not desirable. The Union Bank at Waverley is not 42 quite as problematic because there is nothing on Waverley that is there that you would really 43 walk to, but still that one is somewhat problematic. In contrast the American Express office, 44 which is a financial services office, is really small. It doesn't break things up, it looks like a 45 retail establishment, and it behaves like an ordinary retail establishment in the sense that people 46 go there for travel and things like that as opposed to -and even Union Bank is sort of open to the 47 public while the Wells Fargo is a private bank. 48 Page 16 1 In terms of flipping in and out of office I think that there are a couple of ideas that we could 2 have. One idea is either having a CUP to go into office from retail or to require the existing 3 retail stay as retail not to relax that, but if new retail then either allow that to go back and forth or 4 allow a CUP for new retail. So I would like us to consider more flexibility in terms of this than 5 simply deregulating the non-ground floor rules portion of the CD-C zone. 6 7 I also want to draw attention to Attachment D, 18.30(C).020. In particular it says permitted uses 8 and there is a big loophole in terms of letter (a)(7), entrance, lobby or reception areas serving 9 non-ground floor uses. There are examples of that that work reasonably well, if you look for 10 example, there is a small lobby area next to the Lululemon Athletica, there is a small lobby area 11 next to the CVS for example that works reasonably well, it is not intrusive. On the other hand, if 12 you look at the lobby area that has been put on the University Avenue circle, the circle portion, it 13 takes up the whole space, and it is much bigger than is needed for a lobby area. So I would 14 suggest that we constrain the size of the lobby/reception area. In fact by allowing that full floor 15 lobby area we have essentially de facto broken up that space along the curve. I would like us to 16 think more carefully before deleting things from the Ground Floor protection particularly if there 17 is no protection at all about ground floor. If it is completely deregulated that seems to me overly 18 problematic with that. 19 20 With respect to Bryant Street I think that the fact that the current building at, I think it is, 285 21 University sort of sticks out and sort of makes it uncomfortable to walk around the comer on 22 Bryant Street makes that retail on the logical west side of Bryant hard to get to. One of the 23 reasons I was in favor some time ago about having the full seven-foot setback would be to 24 enhance the pedestrian traffic going down Bryant Street. I think that whatever is built there I 25 would hope that it be done in such a way that it enhances that pedestrian traffic. 26 27 Finally, I would like to say thank you for keeping the Aquarius the way it is. I appreciate that 28 and I am sure that a lot of other people do. 29 30 Chair Garber: Commissioner Lippert followed by Commissioner Martinez, and myself. 31 32 Commissioner Lippert: I have several questions and then I would like to make a couple of 33 statements. Looking at the map here I would like to follow up on Commissioner Holman's line 34 of questioning with regard to the areas around University circle that are going to be taken out of 35 the GF District. With the construction that is going on there isn't it a little premature to be 36 looking at that and saying we don't think it is going to function as a retail space? It really has 37 not come into the public domain. In fact, I remember what was there previously was a 38 Blockbuster video, and we know what happened to Blockbuster, and there was a luggage store 39 that was there for awhile. Then there was a travel agency that was there and they all seemed to 40 be doing moderately well until they were closed down for the construction work. Adjacent to 41 that where the E*Trade is that used to be NBBJ, an architecture firm, so that obviously fell under 42 office use. Then on the flip side or the backside looking at the comer I guess the comer of High 43 Street and Hamilton is the Fazani parking lot. The Fazanis' have never really done anything 44 with that lot. Isn't it a little premature to take a blank lot and then takeaway something that it 45 hasn't even had an opportunity to build a building? The Fazani's in fact have been very reluctant 46 to have landscaped it or made it into viable parking following our regulations. So that is the 47 question. 48 49 Ms. Cutler: Would you like an answer and discussion? Page 17 1 2 Commissioner Lippert: Yes, please. 3 4 Ms. Cutler: Part of what this really gives us the opportunity to do is to think conceptually about 5 the Downtown and what the important retail areas are, and which areas based on traffic patterns, 6 existing buildings, but also future desires for the area might work better or worse for retail, might 7 be more or less important to the Downtown core and the vitality. Spreading retail throughout the 8 entirety of Downtown, there isn't enough retail to do that, and so thinking about where it is is 9 really important and is really viable for retail. These ends are often more difficult because if you 10 are not a destination retailer then you don't get as much foot traffic because you are right at the 11 end there. When you are over by the train station that is slightly different because you do have 12 people coming from the train so you get a bit of that, so that was some of the discussion of those 13 over there in terms of the viability there. Also some of the discussion of some of the other side 14 streets and continuing it along, keeping all of the existing retail, part of this discussion of 15 loosening up the regulations in CD-C is a recognition that we want to focus our protection and 16 our attention on what areas of Downtown we think are really important for retail. Then let the 17 others follow economic factors. 18 19 Commissioner Lippert: One of the bright spots focusing on retail is that we do have Patagonia in 20 there and they are benefiting from the fact they are next to a parking structure. On the flip side 21 of that we have the last remaining full service copy shop in the Downtown. They are really 22 supported by traffic from I guess Stanford University, jobs that they have through people that do 23 large-scale printing. Doesn't it make sense with University circle being a gateway to the city to 24 think of it in terms of perhaps future mixed use where you wound up with ground floor retail and 25 it could even be housing above it because it is right near a transit center? Does that not make 26 sense? 27 28 Ms. Cutler: I think that is a valuable discussion for the Commission to have this evening about 29 what areas are going to be valuable and useful, being aware of those areas that are difficult in 30 terms of visibility as cars come through, as I believe Curtis mentioned earlier, as they come up 31 from underneath Alma along University they kind of miss the first few buildings on University, 32 so there is a loss there of visibility, and then also the connection to the train station and to 33 Stanford. That is traffic that goes through there. 34 35 Commissioner Lippert: I will pick up my line of questioning on the other side. 36 37 Chair Garber: Commissioner Martinez. 38 39 Commissioner Martinez: As a relatively new comer to Palo Alto I thought it was important to 40 listen to the comments and sort of get a sense of the history of this problem. When I first looked 41 at it I thought about one of the reasons why I wanted to live in Palo Alto, and that is because I 42 felt the Downtown was so vibrant that it was pedestrian friendly and encouraged us to walk, all 43 of those things as an urban designer that I really care about. So I had to ask myself well, what is 44 driving this problem? Is it from an economic perspective that we want to encourage retail that is 45 long lasting? To support the retail that we have that could benefit from having those vacancies 46 filled with retail that brings additional customers Downtown? Is it an urban design perspective 47 where we want to enhance the pedestrian experience? I anl sure there is a truth to all of this. So 48 I still was not sort of satisfied that I had reached the ultimate reason why we want to do this. 49 Page 18 1 2 3 4 5 6 7 Certainly when I look at the map I agree with your recommendations for those changes. I have seen in other cities that retail that is located along high-speed or faster speed streets for some reason doesn't do well. Maybe people are not drawn to it because of the traffic noise and the idea of safety. Maybe there is something else to it, but I feel I can support your recommendations that on the circle we don't have retail or give it as an option that office would probably be as equally supported. 8 I do have some concerns about what we characterize and what-we have included as retail. I am 9 also sympathetic for those property owners that have buildings that are not suitable for retail. I 10 think we definitely have to take that into consideration. I remember when I was working in New 11 York there was a ban on travel agencies because the Planning Department felt they were kind of 12 boring to the pedestrian experience. Granted at the time there were a lot of them on 5th Avenue. 13 It also calls into question sort of our assumption about what is good retail and what we have 14 included. I think a design office like the former NBBJ was as vibrant as a travel agent, maybe a 15 little bit more. So I would really ask that we look hard at what we are including in this list of 16 ,acceptable retail. I think even financial institutions, I think the banks we have were designed a 17 long time ago before we invented urban design. I think if we looked at it from a pedestrian/retail 18 experience now, and even the banks would design them in a different way that they became more 19 pedestrian friendly. So just in closing I would really like us to take a hard look at what we have 20 included as acceptable retail before we go forth with what we include and exclude in ground 21 floor retail. Thank you. 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 Chair Garber: Thank you. Although I have been here slightly longer than Commissioner Martinez I was not at this last meeting that this was discussed. I was out of town so I am benefiting from a lot of the discussion here. Thank you. A couple of quick questions. There is a property at the comer of Cowper and University, which is not included as one of the colors. Is there a reason for that or is there supposed to be a color there that is not shown? Ms. Cutler: The properties that are within the Downtown that don't have a particular color to them generally are either Planned Communities, PC zones, or are Public Facilities, PF, so are not part of the CD-C and don't have the GF. Chair Garber: So that one comer is probably a PC? Ms. Cutler: Yes. Chair Garber: I had one other question. I don't recall but I don't believe there has ever been an ordinance written in this way in this community. I am curious if the Staff is familiar with other communities that may have created ordinances around the amount of storefront that can be dedicated on a block to a singular use or occupancy. It may be all owned by a single landowner but it may have different occupancies or there may be percentages applied to that in order to establish the vitality that particular community is interested in. Is the Staff familiar with that sort of an approach? I am not recommending it I am just curious. Mr. Williams: I understand. You are talking about an amount of storefront for a particular use. Page 19 1 Chair Garber: Yes, so for a community that would seek to avoid for instance the B of A problem 2 that we have on that particular block where it is all one use. 3 4 Mr. Williams: Yes, but suppose that use were in three different buildings scattered throughout 5 the block that is not what you are talking about. Maybe you are talking about continuous .... 6 7 Chair Garber: Contiguous. 8 9 Mr. Williams: One use in one building. 10 11 Chair Garber: Yes. 12 13 Mr. Williams: I think there are cities that have done that at least for anything new coming in, 14 they probably have grandfather provisions for things that are there, that do try to set frontage 15 widths for businesses if they are narrower they tend to encourage more doors, more windows, 16 nlore retail probably than if they are larger spaces that might handle a larger retail. Then again, 17 that might be more difficult to get in and you end up with banks or offices or something like that. 18 I believe, I don't know what comes to mind right now, but I have seen in some locations where 19 they do that from more a design perspective maybe than the use, and say you have to have a 20 maximum width. 21 22 Chair Garber: For instance in like a PTOD zoning you might create that. 23 24 Mr. Williams: Yes, sure. 25 26 Chair Garber: Okay. That is all I have. Commissioners, lets do a couple of quick straw polls. 27 What I am going to be doing is walking down the Staff recommendations here. We will do these 28 quickly so that we can spend ..... 29 30 Commissioner Holman: Commissioner Garber, I am really not comfortable we have had enough 31 discussion yet to do straw polls unless your straw poll is just an initial ..... 32 33 Chair Garber: I think it is just an initial here because I am thinking it might help us focus our 34 conversation. 35 36 Commissioner Holman: Okay, as long as we can revisit. 37 38 Chair Garber: Yes, I am not precluding. 39 40 Commissioner Holman: Okay. All right. 41 42 Chair Garber: In addition to you I think there are some other Commissioners that want to 43 continue lines of questions. 44 45 Commissioner Holman: All right thank you. 46 47 Chair Garber: Abstaining is fine too, yes. It is just a straw poll. So let me just ask the 48 Commissioners, if the Commissioners would raise a hand to tell me if they would support the 49 Staff recommended changes to Ground Floor Combining District regulations where the Staff Page 20 1 recommends the removal of P AMC Section such that there will no longer be the option for the 2 use exception based on vacancy rate. All those in favor? Okay, that is all of us. 3 4 Do the Commissioners support generally the Staff recommended changes to Downtown 5 Commercial Districts so that the loss of flexibility on the ground floor uses in the Downtown 6 core are covered by GF Combining District will be balanced by an increase in the flexibility in 7 the ground floor uses in the periphery of the Downtown? All those in favor? Four, so there is 8 some discussion there. Good. 9 10 Let me break the next one into three pieces. The Staff recommended revisions of the zoning 11 map. First let me ask if there is support for the Stafr s recommendation of the removal, the three 12 bullets that remove the GF protections. These are for the properties along Alma Street, portions 13 of High Street near Hamilton Avenue, removal of the GF protection properties along the circle 14 ramps connecting University Avenue and Alma Street, and then the three miscellaneous non- 15 retail parcels along Kipling and Cowper north of University. Support for those? One, two, three. 16 1 7 Then let's see if there is support for the addition to the GF protections to the existing retail on the 18 south side of the strongest block of retail on Hamilton Avenue and to the Aquarius Theater and 19 the two restaurants immediately to the north on Emerson. Support for that? That is six. 20 21 Then finally is there support to not change University A venu~east of Cowper and not change 22 Bryant between University and Hamilton Avenue. Support? One, two, three, four, five. 23 24 Okay, Commissioners, Commissioner Holman, and then Lippert. 25 26 Commissioner Holman: Yes, and I guess first I will make my argument for the circle. The 27 purpose of that is we talk a lot in this community about connectivity. That was a four-three 28 straw poll so I am going put out my best effort here, or hopefully. We talk a lot about 29 connectivity and I think what is similar to the California Avenue train station issue is that there is 30 that blank wall. I understand the restaurant there has had a hard time surviving but there is that 31 blank wall that leads you down there. It is really problematic. That building, I am not 32 particularly for demolishing buildings, but that building should just be blown up and start over. 33 It is terrible from a pedestrian and connectivity and retail vibrancy. It just loses it big time. I 34 don't want to create that same thing here. 35 36 When people come from Stanford campus, when they come offEl Camino, when they come 37 from the train station there really needs to be a vibrant comer there. There is a parking garage 38 right behind it so there is adequate parking. Along with Commissioner Lippert, I have been here 39 a long time 34 years I think it is, and there have been long-term uses, successful uses, there. 40 There was a sporting goods store there forever. I think it was Bungee Travel or somebody was 41 there for a very long tinle. Blockbuster was there for a very long time. There have been some 42 long-term surviving businesses there. 43 44 I guess I have a problem with the development on the south side of the circle not getting much 45 traction because in zoning we say that you can't create your own disadvantage, basically. That 46 building that new building is designed such the whole ground floor is basically a lobby. So it 47 seems to me that what we have allowed there with the design of that building is a difficult 48 building to rent as retail. So you have created your own challenge. 49 Page 21 1 Chair Garber: Commissioner, help me because I am either not following or slightly confused, 2 both of which are entirely possible. Are you relating that to this second Staff recommendation or 3 is that just specific to the changes to the map where we are removing things and that was the 4 item that was ...... ? 5 6 Commissioner Holman: I am currently talking about the removal of the properties on the circle. 7 That is what I am talking about. 8 9 Chair Garber: Okay. 10 11 Commissioner Holman: So that is one issue. I think they have created their own challenge 12 there. 13 14 I would agree with Commissioner Keller, and there have been proposals and opportunities that 15 have been presented down Alma and at the comer of Hamilton and High Street, so I just don't 16 see the logic in taking that out. So I could hit several different points here. 17 18 As far as Emerson Street and adding, it may be a finger but it is one block, all we are talking 19 about is one block being added to connect to the SOFA II district. It is one block. So I would 20 want to add that. 21 22 I don't want to confuse us by covering a whole lot of points at once so I will probably stop there 23 for the moment. 24 25 Chair Garber: Thank you. Commissioner Lippert and then Keller. 26 27 Commissioner Lippert: I just want to follow up on Commissioner Holman's comment with 28 regard to University circle. Again, I can see it being problematic but that is an area that has just 29 been born. There are many things that are going to be happening in that area over the years it 30 just hasn't been given a chance. Even though we are in an economic downturn tum right now 31 whatever happens there is vital to the transit center. The dream team plan is to make that a major 32 plaza and entry into the city. So in some ways if that ever turned to ground floor office and 33 remained that way we would be stuck with that if ever we were to enhance or improve the transit 34 center, and that connectivity with Palm Drive. So I think it is something that we dearly need to 35 hold onto in terms of it being a gateway to the city. 36 37 Chair Garber: Commissioner, forgive me Commissioner Tuma has a question related to that. 38 Sorry, never mind. 39 40 Commissioner Lippert: I had one other question in there. Once you demolish a building does it 41 revert back to the underlying Ground Floor Retail zoning or does that go with the previous use 42 that was there? So an example is an office that moved into a retail space. Let's say it was one of 43 the small retail shops on Bryant Street, which aren't doing particularly well, the gallery spaces. 44 Ifwe were to intensify what could be built there, and those were demolished, would that office 45 space remain with that property on the ground floor or would it then revert back to it having to 46 be leased as retail with whatever uses above it? 47 48 Mr. Williams: I believe that if it were demolished and start over that it would need to conform 49 then to the use which if the GF exists there then it would have to be a retail ground floor use that Page 22 1 comes back. Differentiate that from just changing the tenant but leaving the existing building 2 there that can continue to go as office, like 285 Hamilton has done, go from office to office to 3 office. If you scraped it and built a new building then our code as far as nonconforming uses 4 basically says that if you construct something anew that then you have to comply with the use 5 that is the basic use for the site. 6 7 Commissioner Lippert: So basically what I am looking at is there would be a viable life to it 8 because as smaller buildings came into wanting to take advantage of the land and the 9 intensification of that land there would be an opportunity for rebirth. So there would be in some 10 ways a self-fulfilling death to that ground floor office use with intensification of that land. 11 12 Chair Garber: Commissioner, forgive me one more time. I apologize. I am thinking that the 13 topic of the University circle is a particularly hot one and maybe what we should do is draw out 14 any other comments that are specific to it before we move on and then we can come back to you. 15 Would that be acceptable? 16 17 Commissioner Lippert: Yes, except I keep losing my line of thought on this. 18 19 Chair Garber: Your choice. 20 21 Commissioner Lippert: Why don't we go ahead and I will come back to my thought. 22 23 Chair Garber: I know that Commissioner Tuma had a comment about that. Commissioner 24 Fineberg and Martinez, and then we will come back to Lippert and then Keller. Commissioner 25 Fineberg followed by Martinez. 26 27 Commissioner Fineberg: When I am thinking about the area on University circle the question 28 comes to mind why are we considering making the changes, and what are we trying to 29 accomplish? In my mind, there are multiple factors that affect that area that come into play. So 30 it hinges to me on then what are we trying to accomplish? The multiple factors that come into 31 play are the economics. Right now we are in a recession. Retail tenants are hard to find. It 32 might be more profitable for a landowner to rent to an office use, office tenants. There are what 33 I will call safety issues. When a person is shopping in the neighborhood how safe do they feel? 34 Is there a vital environment with lots of people? Or is it dirty or unoccupied and dark, or light 35 and clean and open and vital? There is convenience. There is either parking or hard to find 36 parking. There are public bathrooms or not There are either lots of cars and traffic or it is easy 37 to get to. There are also profit motives of both landowners who want to maximize their income 38 streams, there are profit motives from business owners who would prefer probably paying less 39 rent and having more customers, and there are also the residents who live and work and shop or I 40 should say people who live and work and shop and who will be customers in those stores. They 41 don't all have consistent goals and desires. So what are we trying to accomplish? Are we 42 reacting and changing zoning because there is a short-term economic downturn? Are we going 43 to rezone and then regret it if the economy picks up or are these re-zonings things that will stand 44 the test of time that five and ten years later will serve us well? I am not sure on that University 45 Avenue area that I know the answer to that right now. I am not sure I know the answer to what 46 is going to make it vital for the people who are in the area. We have talked about the City's 47 outreach to the business owners and the landowner and property owners. This is actually a 48 question for Staff. Do we have any sense of what is it that people want there? Is it that the 49 businesses would need lower rents? Is there some type of business that we can say that is what Page 23 1 would attract people to come to University circle? Then what zoning would support that if it is 2 retail or have we simply come to the conclusion that we are giving up, it can't be retail, it needs 3 to be office? So if Staff could address that. 4 5 Mr. Williams: Well, first of all we are not saying anything needs to be office and we don't 6 believe that we are going to see some wholesale change by making that change. There are lots of 7 areas down here again that -this ordinance in the yellow that requires retail to remain retail is 8 now eight years old. There were lots of retail spaces in those areas before we had that provision 9 that required that. Now there are surely some properties where it may be found to be beneficial 10 to convert to office but there are also properties that I know I have fielded phone calls about 11 somebody wanting to put retail into one of those yellow areas that is office now. When they find 12 out that they can't ever convert that back to office they don't do it. So we don't have some retail 13 spaces come in that might otherwise. 14 15 I think your question is a good question as far as what we are trying to do. I think what we are 16 trying to do generally is assure that we don't begin to have, first and foremost, incursions of even 17 the flexibility for incursions of office into the primo core of Downtown retail, ground floor retail. 18 So that is what the first and obviously there is pretty good consensus there on that first issue of 19 the vacancy rate. 20 21 Then the others are I think not as clear-cut. The second recommendation relates more to a sense 22 but perhaps not a highly quantified one of having that flexibility and that being advantageous to 23 accommodate some retail in spaces that are not going to get it now, and by the same token not 24 sort of diluting retail by requiring it in outlying areas where maybe it could better be focused in 25 the core. 26 27 Then relative to the mapping I think again that is trying to look at are there spaces that are more 28 marginal where retail doesn't seem to be particularly strong to sort of rate the core restriction but 29 we still would anticipate that a lot of those areas are still going to remain retail, some of them 30 probably won't. I think those are the grayest areas you have already discussed. We have heard 31 and seen discussed arguments on both sides of those for University circle, for Emerson, and for 32 Cowper on the far end was one we discussed quite a bit and left it in, and Bryant at High Street 33 as well. So those are grayer areas and I guess there don't have to be chang~s to the map but we 34 think that these can help strengthen again identifying where that GF zone really goes and 35 providing more flexibility to the other sites. 36 37 Chair Garber: Please go ahead. 38 39 Ms. Barnes: If I could follow along, as we started to talk about this and got more concerned 40 about the retail vacancy in the Downtown I contacted Economic Development Directors in about 41 20 other Silicon Valley cities. We talked about our five percent threshold and whether or not 42 that five percent threshold made sense, and what their vacancy rates were like, and what numbers 43 they were looking at. Almost exclusively in the downtowns that were vital we found out that 44 there was no flexibility in that downtown core. That it was retail, however they defined retail, 45 and that they intensified that core. 46 47 The kinds of fluctuations that we did see were they had concerns about types of businesses. For 48 example in Los Gatos they were really concerned about chains. So they went about defining 49 what they thought a chain was and some place with seven or more establishments was Page 24 1 considered a chain according to their rules and that kind of goes along with the conversation that 2 we had about restaurants. People talked about restaurants but almost unanimously we heard 3 from both business owners and property owners that the market would dictate that and that was 4 part of why we were are as vital as we are was because the market had dictated good uses in the 5 spaces that we had. But we did actually try to get some more information from other cities that 6 had vital districts and were concerned about maintaining those districts as well. 7 8 Chair Garber: Okay. Commissioners, Tuma, Martinez, Keller let's try and keep our comments 9 brief because we need to try and nl0ve this along. 10 11 Vice-Chair Tuma: Okay. So here is my thinking on the circles. I think when we look at what 12 Planning Director just told us about what we are trying to do here, which I think I agree with, 13 strengthen the core, keep it solid that area right there - I go Downtown for a lot of things and I 14 come up Alma Street from where I live down in Barron Park or I am coming from Stanford I 15 spend almost no time as a consumer at that end of University. That doesn't mean that there 16 aren't viable businesses that could be there from time to time but I am not convinced that that is 1 7 integral to strengthening the core. I think if you could have some from time to time office space 18 there with the proximity to transit it would make a lot of sense to be able to have that flexibility. 19 So to me keeping it only as ground floor retail isn't as big a driver and I think you could get 20 some benefit by having some ground floor office there. The people who work in those offices 21 then could shop and contribute to the retail. I don't know, I just think it is not necessarily that 22 accessible from a retail perspective. There may be certain businesses that it works for there. The 23 proximity to transit in a way says let's allow more office there. The strength of the office there 24 could participate in the retail. So I don't think removing this restriction is necessarily a bad 25 thing. I think it is actually a good thing. I think it would contribute to the flexibility and the 26 viability. 27 28 Chair Garber: I am going to interrupt just briefly. Do any of the public speakers that have 29 spoken like to speak to this particular issue? Mr. Keenan. 30 31 Mr. Keenan: Cicero said not knowing your history is like looking at the world through the eyes 32 of a child. In 1984 when we built the 300 and 400 office buildings there, Wells and now Chase, 33 the biggest grossing restaurant in Downtown was the Burger King where Pizza My Heart is. 34 Retail is a very fragile business. You see them come and they go. Frankly, no change is fine. 35 The impetus for this was gee, we have a vacancy factor that is starting to be meaningful, and 36 those protections are now the release valve is operative. The fact of the matter is that there is no 37 big rush. They don't get people saying we want to put offices in that core retail. It is not the 38 issue. But, we are almost unanimous, and you were unanimous on keeping that core solid. The 39 "best of' we really want to be restrictive. 40 41 There is a quid pro quo from a property owner's point of view and that is flexibility on the CD- 42 C, the yellow up there, to flip in and out depending on what the market is telling you. I can tell 43 you retail pays more than office right now but demand shifts. I own the Fazani parking lot. It is 44 just a terrible retail comer. I have a little jewel box of a retail building approved there and I am 45 not going to build it. It is just not a good retail location. Where Pampas is right now, that is my 46 first baby, my first building. We bought it from Earl Scheib for $70,000. He had all those auto 47 painting deals for $1995. I left that building three years vacant because I couldn't do anything 48 else but retail. My first use in there was an architect and then it switched to retail and now it is 49 retail forever. I don't want to look, if I ever lose that tenant, that I am going to have to go dark Page 25 1 three years waiting for the next retailer. I think Patagonia is doing okay so it flips in and out, and 2 the restaurant is doing okay. It is a tough market right now so I think they have more runway in 3 front of them. The Fazani building on the comer is not a good retail comer. Somebody said 4 high-speed traffic really affects those areas in terms of retail viability, they are not walkable, and 5 so I would encourage you to take that into consideration. 6 7 Then Karen Holman's comment that one block, just give me that one block on Emerson, I defer 8 that I am the daddy of the Emerson resurgence. I will let Faith be the grandmother of the 9 resurgence because she was there first, and she was the true pioneer. Coming down to Whole 10 Foods, which we developed, and the Little Bijou Theater and redeveloping all that into retail that 11 was us. You have Anna Eshoo's office on the comer there of Forest and Eme:t;.son, that's office. 12 My office is on the other comer. You have a skin guy. It is eclectic. These pure lifestyle 13 centers, retail, are dying all over America that are a lot better done than this with a lot better 14 parking. So the idea of really burnishing our golden geese here, which is University Avenue and 15 what you see in orange there, I think, is great but we need a little more flexibility to hard lining 16 those changes. 17 18 Chair Garber: Thank you. Commissioner Martinez and Keller. I am sorry, you have a question . 19 from Commissioner Keller, and then we will go to Comnlissioner Martinez. 20 21 Commissioner Keller: Thank you Mr. Keenan. My question is the proposal by Staff is to have 22 no controls on the non-GF portion of CD-C. I am wondering whether some sort of control like a 23 CUP or something on the new experimental retail could go back or is there some sort of 24 approach that you think would work and allow you to experiment with retail and not have a one- 25 way ratchet that would be more than simply no control at all. 26 27 Mr. Keenan: It kind of gets to be more fashionable than the rule of law. The dirty little secret 28 about Palo Alto that I don't like to spread is that historically, it has changed but historically you 29 have zoning, you stay in the zoning box, you go to ARB, you are compelling at ARB. We don't 30 see you guys. We don't see the City Council. It is beautiful. The PC has sort of changed that. 31 You have never seen me do a PC. I stay in the zoning box. So I want to go and be compelling to 32 the Architectural Review Board contextually, what does this building look like, but the CUP 33 process, which incidentally everything in Menlo Park is a CUP. Everything is a use permit, and 34 everything is politicized. Decisions are not made in Palo Alto time they are made in commercial 35 time. So CUPs I think are a significant hurdle that is not enough to give up my safety valve on 36 really what is important in the GF. 37 38 Commissioner Keller: I realize this perhaps going too far but what I am wondering is suppose 39 what we did is we say any new retail in the CD-C you could go anyway you want, you could go 40 back and forth, and any of the existing retail that is over there in order to go from that that's 41 existing presumably for some period of time would require a CUP to go the other way? 42 43 Mr. Keenan: Well, I am always trying to find the middle of the table and I appreciate your 44 gesture but I will give you an example. The Thoits Brothers own, they have a gym in there on 45 Emerson and it is sort of on Karen's block. That was the Chronicle. They had their news bureau 46 in there, an office use, and it went to retail. These things get too theoretical. You are not going 47 to see that yellow all go to office tomorrow. It is like when we did the down zone in Downtown 48 Palo Alto from 3: 1 FAR to 1: 1 FAR. Everybody took the ground floor square footage and 49 multiplied it times three and said do you realize we could have 4.0 million feet of new buildings Page 26 1 in Downtown Palo Alto? The fact of the matter is that there is economic value in all of these 2 buildings that preclude that. It becomes too theoretical. I think this is that case. You are not 3 going to see any wholesale changes. You nlight see a little around the edges but from a property 4 owner's point of view flexibility and meeting the market and getting good retailers that is just 5 what helps us keep it vital. It focuses your good stuff where you do have good parking. We 6 work hard, spent $42.0 million on new parking structures Downtown. So I think keeping the GF 7 strong, stronger without a relief valve nobody here is arguing for a relief valve, but there is that 8 flip. 9 10 Commissioner Keller: If the Chair will indulge me I will just ask you one more question. 11 Sometimes on the Commission there have been discussions about the idea, which was mentioned 12 by Susan Barnes the idea of basically chain stores versus non-chain stores. Do you have 13 thoughts in terms of what kinds of restrictions we might consider sometime in the future? As 14 long as you have the floor. 15 16 Mr. Keenan: You want to go San Francisco? Retail is fragile and I will just leave it at that. You 17 eliminate chain stores which is where they get the capitalization and that would be a disaster, as 18 would eliminating restaurants or constraining restaurants. We don't have many anchors here. 19 Our biggest anchor is now Apple. It is a huge store. It is remarkable. The second biggest is 20 probably Borders. It is one of their very top stores. We are not going to get Urban Outfitters 21 where Magnolia went. I just heard that today. So it is a very fragile item. If we had to take 22 those stores off of the table what do we have left? 23 24 Commissioner Keller: I am not suggesting that we eliminate chain stores but if we limit them in 25 some way so that we have more of mix, do you have any thoughts on that? 26 27 Mr. Keenan: I think it is a huge nlix now and the pejorative chain I think is really misused. It 28 usually just means that somebody who is in that business doesn't want a new competitor. 29 30 Commissioner Keller: Okay, thank you. 31 32 Chair Garber: Okay, let's interrupt and get refocused back on University circle. Comnlissioner 33 Martinez. I'm sorry, Commissioner Holman. 34 35 ConlIDissioner Holman: You asked for members of the public and there is another member of 36 the public who wishes to speak. 37 38 Chair Garber: Please, Faith Bell. 39 40 Ms. Bell: I appreciate the opportunity to speak. First I want to say that it is significant to me 41 that the landowners and merchants of the affected buildings are not being informed at this point 42 in the process. I think that is really a mistake. 43 44 Second, I would like to say that the owner of Jungle Digital Copy has spoken to me and is 45 strongly opposed to the lapse of the Ground Floor zoning for his building. I think that is 46 significant. 47 48 Third, I would like to note that there is the relatively new parking structure there in that location. 49 When we were discussing it at previous meetings people were saying that parking was Page 27 1 problematic there because there wasn't something visible at the street. I think that with proper 2 signage that could be really encouraged. 3 4 Fourth, I would like to remind everyone that the last figure I heard on empty office space vacant 5 in town was 110,000 square feet. I don't know if that is true or not but if that is the case we 6 certainly don't need more ground floor office space. 7 8 I would like to support Commissioner Lippert's comments regarding the potential of the 9 buildings that are under construction now. I know that the designer of the building that is on the 10 circle there spoke at one of the previous meetings where I was with you, saying that he had 11 dreams of a really vibrant retail for the bottom of that building. He had designed it with that in 12 mind. I would also like to mention that the rents could be a significant factor in this and if the 13 landlords were willing to bring the rents to within something more manageable we could get a 14 more vibrant retail mix that was not just chains. Ifwe want to bring a town into place here that 15 draws people to something other than what the Stanford Shopping Center looks like then maybe 16 we need to be looking at that. When the developers cry hard times maybe they need to be 17 looking at the rents too. I don't know because I am not in that business. I rent to myself. 18 Thanks for designating me the grandmother job. 19 20 Chair Garber: Commissioner Martinez. 21 22 Commissioner Martinez: If I understand this correctly we are not precluding retail on the ground 23 floor of University circle. 24 25 Ms. Cutler: No, it would just be removing the Ground Floor overlay. So it would be reverting 26 back to the CD-C, just those allowed uses, which include all of the uses that are allowed in the 27 GF District as well as a number of others. 28 29 Commissioner Martinez: So we can just allow the market forces to do what they are going to do. 30 31 Ms. Cutler: Precisely. 32 33 Commissioner Martinez: Okay. From my point of view whether it is retail or something else, 34 office, on the circle is less important than the circle itself. It feels like it could be a grand 35 gateway to University Avenue. The buildings with due respect could have been a little bit more 36 vigorous to reinforce that. Unfortunately we have what we have. That doesn't preclude public 37 improvements to street trees and street furniture and lighting and paving as a way to make a 38 grand sense of entrance to the Downtown. I think that is far more important than what type of 39 use occurs on the ground floor. 40 41 I think high-tech offices reflect greatly on Palo Alto as do sort of unique retail. There is no 42 guarantee that retail there would be more than a nail salon or a dry cleaners or anything else. So 43 I think to insist that it can only be retail is really putting the cart before the horse, and really 44 imagining something which may not come to fruition. 45 46 I just wanted to say on the plan that is being proposed when I first looked at it I thought well, 47 why are we imposing restrictions at this point in this recession? Then I looked at it again and I 48 asked why are we imposing restrictions at this point in the recession? I think in the latter way of 49 looking at it what I was thinking was that with vacancies of ten, 15, one speaker even said up to Page 28 1 20 percent we have the potential of having vulnerable retail spaces converted to office. This is 2 not for the duration of a recession this is five, ten, 15 years, who knows. That doesn't contribute 3 to the vitality of Downtown, not to the core. So I am very much in support of the planning 4 ordinance for the Downtown core and really looking at ways of enhancing our commercial 5 district. Thank you. 6 7 Chair Garber: Commissioners, before we go on we need to finish up with Commissioner Lippert 8 and I have not taken straw polls on the final two Staff reconunendations, which we need to do, 9 which will bring us into a conversation about restaurants. Commissioner Lippert. 10 11 Commissioner Lippert: One more line of questioning here real quick. With regard to the five 12 percent threshold that we currently have in place if we were to relax and allow for the conversion 13 of ground floor retail into commercial office because of this threshold that we hit, is it the 14 differential or the delta? Say we are at ten percent so it would be the difference between that ten 15 percent and the five percent that would be permitted to be converted to ground floor office or 16 would it be the whole ten percent? 17 18 Ms. Cutler: My understanding of the way that it works, and if I get this wrong you can correct 19 me, is that the City does a calculation of what percentage of the square footage in the GF zone is 20 vacant. Based on that calculation that is done once a year in the fall, around this time, then it is 21 either over the five percent or not. If it is over the five percent then people can request a use 22 exception to allow office on the ground floor given certain conditions, the six month vacancy and 23 available being one of the primary ones. Once that calculation is done in the fall we don't 24 recalculate it again until the following fall. So that use exception is available until it is 25 recalculated again and determined to be less than five percent. 26 27 Commissioner Lippert: So that would be available to any ground floor retail space even if we 28 were to exceed, let's say we were fill all of that ten percent square footage with office space it 29 could even gobeyond that. 30 31 Ms. Cutler: If space could be shown to have been vacant for six months and available for six 32 months they could request that use exception until we recalculated the vacancy rate again the 33 next fall and determined that it was less than five percent. 34 35 Commissioner Lippert: Okay. I would like to make some comments here if I might? 36 37 Chair Garber: Go ahead. 38 39 Commissioner Lippert: I think that Commissioner Martinez really hit the nail on the head in 40 what he was saying in terms of preserving the Downtown. I would like to put some legs on this 41 if I might. By that what I mean is I think we have an opportunity here in the relaxation in the 42 yellow area. We are in a very, very, very difficult economic time right now. The idea that I see 43 or maybe this is what Staffwas trying to get across here is that because we have reached this 44 threshold trying to get more offices into the Downtown area and by relaxing that standard 45 eventually at some point we are going to see the economy return and there really is a symbiotic 46 relationship between office and retail. You cannot have one without the other. If you have only 47 office space you wind up with a Downtown Dallas. Dallas' zoning is two zones office and 48 parking. That is it. Sorry, there is one more zone, there is a retail zone. It is the Neiman Marcus 49 department store. Off in a small comer is a food court. That is what you wind up with. It is a Page 29 1 deadly downtown. It doesn't work. You need to have office and retail in order for the two of 2 them to be able to survive and they need to be symbiotic. So by relaxing I think the yellow area 3 and allowing for ground floor office uses in that conversion we will see a critical mass eventually 4 return and strengthen the retail core to our city. 5 6 I also feel that we must draw a line in the sand and preserve those retail uses. So I am in support 7 of what I see here today. I am not, however, in support of taking the area around University 8 circle and simply taking the Ground Floor overlay off of that, the Ground Floor retail overlay. 9 So those are my comments. 10 11 Chair Garber: Thank you. Commissioners, to keep things moving here lef me poll you on the 12 last StaffreconIDlendation, which was the Staff recommendations on Limits on Businesses of 13 Concerns, in which the Staff is recommending that we do not limit. Commissioner Holman. 14 15 Commissioner Holman: Before polling don't you think we ought to have at least one round of 16 just comments on that one topic. 17 18 Chair Garber: Sure, we can do that. Would you like to start us off? 19 20 Commissioner Holman: Sure. I found the language in the Staff Report interesting because it 21 says in regards to a concern expressed by the PTC about the number of restaurants and public 22 feedback received strongly supported the idea that economic forces would provide sufficient 23 controls and that the additional process and expense that would be imposed on potential new 24 restaurants, so I am a little bit unclear on what that means the cost imposed on potential new 25 restaurants that is unclear to me, in order to limit their numbers would have a significant negative 26 impact on the vitality of Downtown. What is missing for me in these comments is but what does 27 good zoning practice say. That seems to be missing. The comments that are indicated here are 28 just from public and property owners. 29 30 There is a reason why, and I would Staff to comment, there is a reason why for instance Los 31 Gatos, I am not proposing this but, Los Gatos limits chain stores or doesn't allow chain stores. 32 There is a reason why Burlingame restricts the number of restaurants. So can Staff conIDlent on 33 that, please? 34 35 Ms. Cutler: I would say that in terms of what good zoning practice that we took into 36 consideration and maybe didn't mention in the Staff Report was more about a concern about 37 over-restriction. That in providing a list of allowed uses on a site providing flexibility rather 38 than narrowing it too much. Also, I have heard from the Planning Commission a strong interest 39 in supporting new businesses that want to come in and allowing them a process that is no over- 40 burdensome. So when we heard a lot of comments and concerns about that that seemed a very 41 important part of evaluating this option. If there was some sort of additional process that had to 42 keep track of how many restaurants for instance there were in the Downtown that that adds a 43 whole other layer whenever a new business is coming in. It wouldn't affect existing businesses 44 because they wouldn't need to be asking for pennission to·come in if they are existing. So we 45 definitely take into consideration both the input from the outreach as well as just a general 46 zoning practice of providing flexibility of what is or is not working because we can't as planners 47 dictate what types of uses really are going to survive in a certain location. 48 Page 30 1 Commissioner Holman: I guess what is still missing for me is the discussion about what creates 2 a good shopping and dining sector. It isn't an exact science, understood, but I have heard 3 retailers talk about people who come to eat don't necessarily come to shop. People who come to 4 shop eat. There is that. I have also heard developers say that once a building is converted to a 5 restaurant that it is going to be there for a very long period of time because of the capital 6 investment. I have also heard both members of Staff, members of the community, developers, 7 you have heard this Commission say too that restaurants, and I am not trying to pick on 8 restaurants or restaurant owners it is land use that is what it is about is uses. That restaurants are 9 parking hogs. They don't have the biggest return on sales tax dollars per square foot, and once 10 they are in place they are going to be there for a long time. So we are not going to get retail in 11 those locations. One of the major businesses Downtown that has left I went in after the 12 Thanksgiving big sales held this last year. They don't know I am on the Commission. They 13 don't know me from Adam. I was in shopping and asked how was it? Their immediate 14 comments from two people at the counter were well, it was okay but it really wasn't what it 15 could have been if we had more retail around here. There is no place for people to come 16 shopping for children's clothing or toys, and they named a few other things. And, he mentioned 17 that there are too many restaurants. That is one indication. I think there is serious consideration 18 for the impacts of restaurants specifically, and market forces are necessary but I think it is also 19 important to decide as best we can what is appropriate and what is most desirable in our retail 20 districts. So that is I guess what I find nlissing in the Staff Report and in that discussion, impacts 21 and benefits. I just don't see that here. So I am hoping the Commissioners will hopefully take to 22 heart some of these comments if you find value in them and we can discuss them. 23 24 Chair Garber: Commissioner Tuma, Keller, Fineberg, and then Lippert. 25 26 Vice-Chair Tuma: Did you say that you had reached out to the other Econonlic Development 27 Coordinators 20-odd so in the area, and you talked about this topic about restaurants? Could you 28 give us a little bit more detail about what the feedback was from other cities? 29 30 Ms. Barnes: Sure. What we did when we initially began to sort of explore this situation, I 31 belong to a group called Silicon Valley Economic Development Alliance, so what I did was I 32 reached out to the Economic Development Directors in all of these other cities and asked them a 33 couple of questions. One of the questions was if you had a restriction on your ground floor retail 34 and whether or not there was a threshold at which other kinds of uses could locate there. Like I 35 said, almost completely across the board they said now we don't have a threshold percentage. 36 Some of them were considering a threshold percentage. 37 38 Vice-Chair Tuma: Sorry, let me just for expedience sake, did you specifically discuss the 39 restaurant issue? 40 41 Ms. Barnes: I am trying to think. We asked if there were restrictions because that is how I got 42 the question answered about the chains. We asked if there were restrictions on restaurants and 43 Burlingame was not one of the cities that we reached out to. It was more sort of San Mateo and 44 south. That is where I got the answer back about chains and that was the only restriction that I 45 heard back from anyone in that group that responded. 46 47 Vice-Chair Tuma: Okay, so of the 20 that you did talk to none of them that you know of have 48 restrictions on restaurants? 49 Page 31 1 Ms. Barnes: The only mention that I got back and I could explore it in further conversations a 2 little bit more deeply, from those that I got responses from that is where that information on 3 chains came. 4 5 Vice-Chair Tuma: In the discussions that Staff has generally had around in the various different 6 meetings and discussions have you had any input from anybody in those discussions that 7 indicated that limiting restaurants was a good idea? 8 9 Ms. Cutler: I did not hear that. There definitely was agreement that the capital investment in a 10 new restaurant is a significant one. There was definitely agreement to that but there seemed to 11 be a lot of enthusiasm for the importance of the restaurants and the vitality of the Downtown, 12 that it meant that businesses were open later, had more activity longer say in comparison to Los 13 Altos where most of the businesses close at five or six o'clock because there are so few 14 restaurants. 15 16 Vice-Chair Tunla: Okay. I am not in favor of putting a limit on restaurants. When I think about 17 just in the last couple of years the little bit of evening activity that I see on California Avenue it 18 generally comes out around the restaurants, and in particular having the counter and the Indian 19 restaurant and the Starbuck's, all those are starting to add some vitality and some presence of 20 residents in the evenings. I do think that the economy and the business trends will sort of take 21 care of this. I realize that for larger scale restaurants you do put in infrastructure, and they are 22 there, and they are there to stay. I think they add a lot of vitality to a district so I would not be at 23 all in favor of putting any kind of limits. I think we let the marketplace do that. 24 25 Chair Garber: Commissioner Keller, Fineberg, and then Lippert. 26 27 Commissioner Keller: So let nle make some observations by way of comparison. If you look at 28 Castro Street in downtown it is essentially restaurants. There is hardly anything else there in 29 downtown. Basically, you go there for restaurants. I would say it is 80 or 90 percent restaurants, 30 there are a handful of other stores, there is a little market, the Mountain View Market, and a few 31 other uses like the Odd Fellows things, but essentially it is restaurants. There is hardly any other 32 retail. I think that shows the problem of having too many restaurants that essentially it is a 33 restaurant designation and nothing else. There are some office uses on top but that is basically it. 34 35 If you look at downtown Menlo Park it is a mix of restaurants. There are somewhat fewer 36 restaurants than in Downtown Palo Alto but there are a lot of other more healthy mix of retail. It 37 doesn't seem to go that much into evening, which does speak to Commissioner Tuma's point. 38 On the other hand the idea is that there is a lot more retail going on there, mixed kinds of retail in 39 downtown Menlo Park than there is in Downtown Palo Alto. Interestingly enough Menlo Park is 40 going through its own process of how much increased density that they want there. That may 41 wind up converting that entirely into who knows what. 42 43 I am also familiar with say downtown Los Gatos. There are a couple of streets in the Old Town 44 where there is a mixture of restaurants and other uses that seems to be a reasonably healthy use. 45 Downtown Los Gatos seems to have a lot going on there in the evening. Downtown San Mateo I 46 am familiar with 3rd and 4th Street, B Street around there. That has more restaurants but there is a 47 mixture of uses. There is a grocery store there that seems to do pretty well and a couple of other 48 uses like that. 49 Page 32 1 So it seems to me if you think about this it may be seen that there is an optinlal amount of 2 restaurants that one might have. If you have not enough then you get something which sort of 3 rolls up the sidewalks at night. I remember when I was a grad student here in the late 1970s and 4 early 1980s Downtown Palo Alto rolled up its sidewalks. Now the amount of restaurants that we 5 have now seems to have created a night life and a little bit more flow and that to keep more hours 6 as contrasted as was mentioned with Los Altos where there is hardly a soul there any time at 7 night. On the other hand, when you have too many restaurants you crowd all the other uses and I 8 think that is a problem. So just like in a shopping center one would have a reasonable mix. You 9 want a little bit of this and a little bit of that and a little bit of this in a shopping center or a 10 neighborhood center. You don't want one grocery store and two restaurants you want a mixture 11 of uses in a shopping center or neighborhood center. You similarly want a mix of uses 12 Downtown. I think that we don't know have the information to be able to make the decision 13 whether to limit restaurants to 30 percent, 50 percent, 70 percent because we don't have the data. 14 15 What I would recommend that we do is in ternlS of limits on Business of Concern is to get that 16 data. Find out what the uses are in terms of restaurants and what the uses are in terms of other 17 kinds of retail, and find out what the mixture is in Downtown. That will give us a sort of a better 18 idea of where we are in that threshold. 19 20 One thing that certainly affects the amount of businesses and the kinds of businesses there is 21 rents. In Palo Alto the rents are considerably higher than in some surrounding areas. Partly the 22 redevelopment and intensification of uses tends to increase the rents and there is a tradeoff 23 between rents and what kind of retail can go there. Particularly, as was mentioned, chain stores 24 can afford to pay higher rents and that can also crowd out local retail uses in some ways. For 25 example at one point in time Continental Chrome was Downtown and now moved to a side street 26 where it is a smaller space and the rent is cheaper. So I think we need to understand that a little 27 bit better to do that. 28 29 I do think that we are not actively proposing to kill retail by removing retail protections. Weare 30 more passively doing it. If we believe totally in market forces then we wouldn't have put the 31 CUP on housing in RLM districts, where market forces were causing large-scale conversions of 32 RLM on East Meadow Circle and on West Bayshore and the Hyatt to convert to housing. We 33 felt that was the pendulum moving too far in one direction. So the idea that market forces 34 themselves are good enough I think is not necessarily the case. We have seen the economic 35 downturn we are in is exactly as a result of market forces. So I don't think that in and of itself is 36 sufficient. We don't want Downtown to become Swiss cheese. I am really pleased that the 37 landowners are keen on allowing us to eliminate the potential for the use exception. I appreciate 38 that greatly but I do think that we need to think about what the optimal kind of relationship of 39 different kinds of businesses there and try to create that for our Downtown for the long-term 40 health of the Downtown. My understanding before I came here is that when the Stanford 41 Shopping Center came about Downtown basically died because all the retail traffic went to the 42 Stanford Shopping Center. That was before my time but I am hoping that we can nurture it back 43 to health through appropriate and judicious zoning rules. Thank you. 44 45 Chair Garber: Commissioner Fineberg, then Lippert, Martinez, Garber, and Holman. 46 47 Commissioner Fineberg: The question of how to consider restaurants in the Downtown mix to 48 me absolutely begs for consideration viewed through the eyes of our Comprehensive Plan. I 49 have to admit I didn't drag my binder here to the meeting tonight so I can't look down at all the Page 33 1 policies and programs and see what it says. I do have a copy of the Vision Statements thanks to 2 Staff because it is going to be the third item on our agenda tonight. I would agree with 3 Commissioner Keller that we don't have enough information now to determine what the 4 Comprehensive Plan says and what that mix should be based on prevailing wisdom of what 5 makes a vital neighborhood retail district. 6 7 I want to read though part of the Vision Statement, I am sorry I shouldn't say it is a Vision 8 Statements it is one of the seven themes of our Comprehensive Plan. It talks about meeting 9 residential and commercial needs. The last sentence of that theme is, "The City is committed to 10 retaining existing businesses, nlaintaining vital commercial areas, and attracting quality new 11 businesses." So if I can construe from that a business district that is 1 00 percent restaurants is 12 too much. What that threshold should be less than 100 percent I don't know. I think that is the 13 question we are trying to answer and we need more information to answer that. 14 15 Given that we know that usually once a business has significant tenant improvements and it 16 won't revert back from being a restaurant, given that we know that if we are trying to build 1 7 walkable neighborhoods, if we are adding families in the PTOD districts, if we are adding family 18 housing near University that is walkable to the train, I would think it is assumed that we need to 19 have services that would meet the daily needs, the neighborhood serving retail services for those 20 residents. Things like restaurants. Things like dry cleaners, grocery stores, book stores, 21 children's clothing stores. There is that whole wonderful mix so that the residents who live there 22 can walk, that things can be attainable to them within a IS-minute walk. There are needs that go 23 beyond the restaurants. So I think we need to understand more what that mix would be before 24 we start either imposing or removing things that would change that mix. 25 26 Chair Garber: Thank you. Commissioner Lippert, Martinez, and then Garber. 27 28 Commissioner Lippert: I begin by saying that I am not inclined to support putting any 29 limitations on restaurants. I will begin by saying that restaurants are probably the most intensive 30 retail uses that you can possibly have. I will back that up with talking about the occupant load 31 based on the Building Code. For a restaurant it is an occupancy load, which is one per 15 square 32 feet. A retail load is one per 150 square feet. What they take into account is that you are going 33 to have merchandise in that store. So from that point of view you have a ten times greater 34 occupant load with a restaurant use than you do with a standard retail use. Now that is just a rule 35 of thumb I am using and it is just from the Building Code, but from that point of view in order to 36 have an economic and viable Downtown you really want to have a lot of bodies there. You want 37 to have a lot of people, you want to have a lot of activity, and that is what a Downtown is really 38 all about, having activity on the street. 39 40 Mountain View I think is an excellent example. You can walk down that street on a weekend 41 and you run into people because the sidewalks are so packed. Yes, they are lacking certain retail 42 functions, but they have one of the most successful brick and mortar bookstores on the peninSUla 43 in terms of people visiting it. The reason why they have that is because they have a 44 concentration of people. They also have a used bookstore that is also one of the most successful 45 brick and mortar used bookstores on the peninSUla. They also have a theater for the performing 46 arts in their downtown, again another reason for having restaurants is that people can dine and 47 eat before and after going to the theater. So if you look at downtown Mountain View and Castro 48 Street as being a negative I wish that we had their problems right now in terms of a critical mass 49 of people. Page 34 1 2 So I don't see any reason to limit the number of restaurants in the Downtown area. I think: it is 3 like any other retail use. It is something that we need and especially if we want to have a viable 4 workforce and people working in our Downtown in office space, these people need to eat and the 5 best thing that we can do is provide them a wealth of wonderful places and not put any 6 restrictions on that. 7 8 In closing, I just want to say one other thing. When I moved to Palo Alto, Palo Alto was not a 9 destination for restaurants. You went out to dinner, yes you went our for Chinese food, you went 10 out for some other ethnic foods, but when you thought about it you didn't say oh, I really want to 11 eat at a wonderful restaurant. You went to San Francisco for that. Today we have some 12 wonderful restaurants that stand on their own that draw people from other communities here 13 rather than San Francisco. I am thinking of Junoon, Tamarind, and Chocolat. Those are all 14 wonderful restaurants. We are also beginning to see them crop up on California Avenue. By 15 putting a restriction on the number of restaurants we are beginning to say, you know something 16 Palo Alto isn't thought of as a destination any more in the way of people wanting to come here to 17 dine. 18 19 Chair Garber: Commissioner Martinez, then myself, and then Holman, and then I would like to 20 move to motions and we can work through them one by one. 21 22 Commissioner Martinez: I think we are all feeling kind of intuitively that we are kind of 23 reaching an upper limit on the number of restaurants. I know we are not in agreement of how 24 many that should be or if you could ever have too many. I am' sure as Commissioner Lippert 25 says that Mountain View is a wonderful place for having so many restaurants of so many 26 different kinds that no matter what kind of mediocre food you want you can find it there. 27 28 Palo Alto is different. Despite the nunlber of restaurants, going to Commissioner Fineberg's 29 point, we are still kind of a mixed retail area lacking in some businesses that provide family 30 retail. I was struck by the comments about the importance of chain stores. I thought that was a 31 fascinating insight into sort of what is driving a lot of our local economy. I think there needs to 32 be a greater emphasis on Gap, Gap Kids, stores of that nature Downtown. That also supports 33 some of the smaller retail. I don't think it is a time to put limits on restaurants but I think it is a 34 time to look at what we can do to invigorate the rest of the retail economy. Thank you. 35 36 Chair Garber: A couple of comments but let me first, because I did not weigh in on the 37 University circle conversation. In particular I want to align myselfwith some of the thoughtful 38 comments that Commissioner Martinez has mentioned. When I look at the map it makes sense 39 for me for the core protections to extend all the way down to Alma. I think Commissioner 40 Martinez really hit it on the head in that is the gateway and what really matters there, if I am 41 understanding his conmlents correctly, is that the expression and the streetscape create an 42 invitation, a gateway, to the rest of that street. What happens behind that really has far less 43 impact. This is and will become even more so, more important, hopefully as this whole area is 44 developed over the next ten to 15 years with the development of Stanford, etc., and will become 45 a very important entryway as well as linkage to the other side of El Camino. So I think the 46 comments that talk about how the street and how the city as opposed to what those specific uses 47 are, which are actually relatively small compared to the overall impact has caused me to think 48 differently about that. 49 Page 35 1 Regarding the general marketplace, I have spent a good portion of nly professional life dealing 2 with very large retail centers and malls, etc. I appreciate the public's comment about retail being 3 delicate. Getting a retail store into someplace and keeping them there for even three-quarters of 4 a year to get them going is not an easy thing and requires a tremendous amount of gumption, and 5 a tremendous amount of luck. The same thing is even more true with restaurants. I think one of 6 the key things that Palo Alto has going for it is a dramatically different demographic that 7 supports the retail that occurs along University Avenue than these other communities, certainly 8 something like Mountain View, to a lesser extent Menlo Park, but certainly nowhere near what 9 the demographic is for Palo Alto. Mountain View is much more of a destination although there 10 are residents of Mountain View that would argue with me. The demographic really supports a 11 lot more than restaurants and that is in large part why we have things, which are not restaurants 12 there. 13 14 I don't think, and I don't think anybody else here believes, that we would every get anywhere 15 close to 100 percent restaurants. Even if we did, about seven out often of them would die out in 16 that first year anyway and the luck of trying to get them back into place is pretty low. So I align 17 myself with Commissioner Tuma's observations. The marketplace structures a tremendous 18 amount of the activity and the urban vibrancy that occurs on that street despite the way that we 19 may want to zone it, which is not to say that we shouldn't. I think the concept of strengthening 20 the core is. spot on and should be rigorously supported by both the business community, which it 21 sounds like it is, as well as the Planning Staff and this Commission. 22 23 It makes sense to me that there is this little wing or fmger that begins to extend down Emerson 24 and ties that in. I don't necessarily have a sense as to whether it should be - I don't feel it is 25 necessary that it do that right now. I am really much more interested in focusing on University 26 Avenue. I really like that area of Palo Alto and it is in large part because the businesses are 27 small and you end up with all these different storefronts some of which are businesses, some of 28 which are retail, but seeing that mix and that vibrancy is working now. Knowing that the 29 ownership along those streets is so cut up into all these individual lots the likelihood of those 30 being accumulated and that sort of vibrancy going away is pretty low for many years to come. 31 So I am not as worried about trying to create a statement there and a policy around that just yet. 32 It is imaginable to me that we could come back and visit that in five or seven years or something 33 of that sort, but again I think the focus this evening is really around University Avenue. 34 35 The last thing I was going to mention is regarding restaurants. Again, I do not believe in the 36 short-term or the long-term that limiting restaurants is a key issue here. Ifwe suddenly find that 37 in five year's time the percentage of restaurants is 75 percent of the street or even 40 or 30 38 percent of the street I would say that there is probably reasonable cause to say what is going on 39 and we should be doing something there. Given what we have now and the sort of dynamic 40 environment that we want have where there is going to be a lot of change, and we talk about 41 dynamism, and the urban experience it is not just people on the street, but it is getting new 42 retailers on the street. There is a lot of give and play to that. The changing out of retailers 43 moving be it for rent or for market or because they have outgrown a space and they want to get 44 into a better marketplace and they take it upon themselves to move into a different marketplace 45 adds to the vitality and the renewal that has to occur on streets like this, and is I think unique for 46 Palo Alto, one of the great strengths that we do have a lot of things not just people but also 47 retailers and businesses moving through the community. So those are just some general 48 comments. 49 Page 36 1 Commissioner Holman, you had some final comments and then I propose that we take each one 2 of the Staff recommendations as a motion and then we can amend it as we go. I would like to do 3 those as separate motions so that we don't lose ourselves trying to get all the details into one 4 giant motion. Commissioner Holman. 5 6 Commissioner Holman: Yes, maybe three or four comments. I agree that the restaurants are an 7 important part of a vital shopping district. Commissioner Tuma's comments I absolutely agree 8 about California A venue but we are not talking about California Avenue we are talking about 9 University Avenue. 10 11 I think frankly we have gotten either to the tipping point or very close to the tipping point in 12 Downtown. Restaurants whether they last a year and then trying to get another one in there 13 might be difficult but nevertheless the capital investment is there. There is an inclination and a 14 drive to try to get another restaurant there not another use. So that is another thing. 15 16 Market forces playa huge force. They are a big force, and a huge part in creating a good retail 17 sector for any kind of shopping experience. Again, I am a zone for what you want person. We 18 need to look at what the parameters are within which we want the market forces to operate. 19 20 I am going to make one more pitch for the circle there. It is, I agree with our new Commissioner 21 but I look at that in a little different way. I think that gateway and the continuation of the retail, 22 and now that we have that parking garage right there it seems all the more reason why retail 23 would succeed there. So I am not inclined to remove that. I do note also that it is not just a hard 24 economic time for the business community. We are compassionate about the challenges that the 25 community is facing. I hope we are also compassionate about the challenges that the City faces. 26 If you just do simple math, and I don't have the square footages here, but if you just do simple 27 nlath we are looking to remove 12 properties from the GF and add six. So are we reducing the 28 amount of retail square footage that we have that will contribute to the City's bottom line? 29 30 Commissioner Keller's comment also about we are not requiring these properties to convert from 31 retail to office but we are allowing it. The whole reason that the GF zoning was put into place to 32 begin with was because there was a large movement that was converting ground floor to office. 33 In a retail section you don't have to have a whole lot of conversions to office before you break 34 that synergy. The one thing I am disappointed about in the Staff Report is it doesn't really talk 35 about those synergies and the importance of them, and the connectivity like from Emerson, from 36 Forest to Hamilton that one block. Yes, there are, Mr. Keenan is absolutely correct and we owe 37 a lot to Mr. Keenan because he has done a lot of revitalization in this community. That said, I 38 think there is a great amount of flexibility within the GF zoning allowances service, retail, hotels. 39 There is a good amount of flexibility there and I think we need to be looking out for the public's 40 best interest even ahead of looking out for the private property interests, not being unsympathetic 41 to that in any means. 42 43 One thing that I had asked Mr. Williams if we could talk about tonight is I think the City ought 44 to be, and I am very interested in doing some things for the business community like working to 45 get the sidewalks clean like Mr. Keenan and I talked about beforehand. I know he is very, very 46 interested and I have watched it over time. It is one of my big frustrations. Like allowing the 47 sandwich boards that help promote business. We have now I think just one cross street sign 48 Downtown that leads people from University Avenue down the side streets. There are a lot of 49 things we need to do to help the businesses survive and thrive that we are not doing. I did ask Page 37 1 Mr. Williams to see if we could talk about that a little bit this evening and he said yes. So I hope 2 we will and this isn't just a matter of putting constraints on property owners. They seem to be 3 amenable to that but it is also not a quid pro quo swap. We need to be making best land use 4 decisions in the public's best interests. 5 6 Chair Garber: At the suggestion of Commissioner Fineberg let me read Policy B-20, which talks 7 about the University Avenue Downtown. The Policy states support and enhance the University 8 AvenuelDowntown area as a vital mixed use area containing retail, personal service, office, 9 restaurant, and entertainment uses. Recognize the importance of an appropriate retail mix 10 including small local businesses to the continued vitality of Downtown. Then there are a couple 11 of sentences of description here. The University Avenue Downtown area is a regional retail and 12 entertainment attraction, and a professional office and service commercial center for Palo Alto. 13 Its historic buildings, architectural variety, and public improvements contribute to its economic 14 success. In the past the City has taken steps to maintain the area's strong retail function by 15 limiting the amount of first floor office space. To protect the area's scale and character the total 16 amount of nonresidential floor space allowed is also regulated. 17 18 So Commissioners, let's take these, and I apologize that this has gone on longer than we had 19 hoped here. Let us work through potentially four motions here. We will take the first two 20 recommendations as motions one and two, and then we will do the last recommendation the 21 Limits on Businesses of Concern as motion number three. Then motion number four will be the 22 recommended revisions to the zoning map and I am putting that last only because I think there 23 will be the most amount of discussion around that particular piece. 24 25 May I ask the Vice-Chair to make the motion here? 26 27 MOTION 28 29 Vice-Chair Tuma: Sure. Move that the Planning and Transportation Commission follow the 30 Staff recommendation with respect to changes to the Ground Floor Combining District 31 regulations, removal ofPAMC Section 18.30(C).040. 32 33 SECOND 34 35 Commissioner Keller: Second. 36 37 Chair Garber: The motion is seconded by Commissioner Keller. Any discussion by the maker? 38 39 Vice-Chair Tuma: No. 40 41 Chair Garber: The seconder? 42 43 Commissioner Keller: No. 44 45 MOTION PASSED (7-0-0-0) 46 47 Chair Garber: All those in favor of the motion say aye. (ayes) All those opposed? That motion 48 passes unanimously. 49 Page 38 1 Commissioner Tuma, a motion on number two? 2 3 MOTION 4 5 Vice-Chair Tuma: Sure. Move the Planning and Transportation Commission recommend the 6 Staff recommendation for removal ofPAMC Section 18.18.060(:t)(1). 7 8 SECOND 9 10 Chair Garber: I will second the motion. Any discussion by the maker? 11 12 Vice-Chair Tuma: No. 13 14 Chair Garber: None by the seconder. Any discussions by Con1ll1issioners? Commissioner 15 Keller and then HolnlaJ.l. 16 17 Commissioner Keller: I think that it makes sense to have some flexibility on CD-C but not 18 complete decontrol. In particular with respect to the potential for taking some of the green 19 parcels, namely the ones that are being rezoned from what is now nlandatory retail to no control 20 on that, the combination of those is particularly problematic. 21 22 It seems to me that the City can do things to enhance retail. The biggest thing the City can do to 23 enhance retail is to fix the permit process. I have heard from a lot of retailers and potential 24 retailers the process for getting permits out of our Development Office is worse than pulling 25 teeth and getting a root canal on the other ones. In particular I have heard before a lot of the 26 collapse of retail on Bryant that they wished that there was more lighting on Bryant. So before 27 we go through the process of allowing decontrol on that, complete decontrol, I think we should 28 take particular measures to figure out what we can do to strengthen the retail in this district at the 29 times when the economy does come back. In particular that we provide some flexibility in 30 particular in things that have not historically been retail to allow experimentation without it being 31 a one-way ratchet. Thank: you. 32 33 Chair Garber: Are those just general comments or was there an amendment that you were 34 proposing? 35 36 SUBSTITUTE MOTION 37 38 Commissioner Keller: Well, if I were to make a motion what I would recommend is to amend 39 Section 18.18.060(:t)(1) in such a way that existing retail uses have to stay as retail uses and new 40 retail uses can revert back to non-retail. That is something that I would float as a trial balloon as 41 a companson. 42 43 Perhaps I should make that as a substitute motion that existing retail uses according to Section 44 18. 18.060(:t)(1 ) stay as retail and new uses that are converted to retail could become retail and 45 revert back. 46 47 Chair Garber: Is there a second to the substitute motion? I am seeing none. That motion dies. 48 Is there any further discussion on the primary motion? Commissioner Holman. 49 Page 39 1 Commissioner Holman: Just kind ofa reiteration of what I stated before about removal of the 2 restrictions and working towards the City's and publics best interest. So it is comments I have 3 already made before. 4 5 Commissioner Keller: Are you going to make a motion? 6 7 Commissioner Holman: Well, I think the way that we could go is a substitute motion would just 8 be the counter of this. 9 10 Commissioner Keller: I am wondering if you would simply not want any changes or if you 11 would allow some sort of flexibility? 12 13 Commissioner Holman: It is easier I think if we can point to locations on the map that you 14 would be referring to in terms of flexibility. I think that would be helpful. 15 16 SUBSTITUTE MOTION 17 18 Commissioner Keller: What I am simply saying is that things that are currently retail would stay 19 as retail that is what my substitute motion was, and things that are not currently retail which are 20 not covered by the restrictions on retail could experimentally be placed as retail, and if it didn't 21 work out it could revert back to office. So that was my motion because there were comments by 22 the Staff and by some members of the public that they were unwilling to convert existing office 23 uses to retail uses and have it forever stay as retail if it did work that way. That was what I was 24 proposing. 25 26 Chair Garber: Commissioners, I need you to either nlake an amendment, a substitute motion, or 27 otherwise we shouldn't be discussing. 28 29 SECOND 30 31 Commissioner Holman: I will second that. There is a little discomfort with that though because 32 there is no City Attorney here to comment on if we can kind of do this mish-mash. I will second 33 the motion and see what happens. 34 35 I do have one comment that actually plays into this that I meant to ask earlier and apologize that 36 this didn't come at actually the appropriate time. In the Staffpresentation ..... 37 38 Chair Garber: Actually, if I may if .... 39 40 Commissioner Holman: It is very relevant to this motion. 41 42 Chair Garber: Okay, so you would be seconding the Substitute Motion so I will remove the fact 43 that I said it had died. Weare moving on and the speaker therefore has no comments but the 44 seconder does. 45 46 Commissioner Holman: I do, again with the caveat that I don't know what the City Attorney 47 would say about that. The other thing is I am a little concerned because in the Staff presentation 48 there was a comment that said that there would be additional outreach after the Planning and 49 Transportation Commission meeting. Apologies to everybody, I did mean to ask this question Page 40 1 earlier because is that going to be as a result of our actions, and so we are not going to have 2 feedback on that, and then it is going to go to Council based on the outreach comments? What is 3 the purpose of that? It seems like all of that outreach should have happened before the Planning 4 Commission meeting unless I am missing something. 5 6 Ms. Cutler: I believe the goal of further outreach between now and the City Council meeting 7 would be to make sure that all of the affected members of the Downtown are aware of what the 8 Planning Commission's final recollunendation to the Council is. So if there are changes from 9 what Staff had been discussing that they are aware of that and able to speak to Council about 10 that. 11 12 Commissioner Holman: Thank you for that clarification. 13 14 Chair Garber: Discussion from the Commissioners. Comnlissioner Tuma, did you have a 15 comment relative to the planners? Okay. Commissioner Keller. 16 1 7 Commissioner Keller: One comment with respect to outreach to the pUblic. I believe that there 18 was a member of the public who pointed out that there was not sufficient outreach to the 19 business owners of the parcels that were being rezoned from the mandatory GF. I realize that is 20 not part of this motion but I believe that one member of the public had made that comment. I am 21 not sure how much outreach was made in terms of the people who are business owners in the 22 non-GF portion that are retail for which they might be at risk for raising rents at some point in 23 time and losing that as a retail use. 24 25 Chair Garber: Commissioner Fineberg and Martinez and then we will call the question. 26 27 Commissioner Fineberg: I support the substitute motion because I think it honors the goals of 28 the Comprehensive Plan to retain mixed use and a diverse amount of varied businesses 29 Downtown. It protects the existing retail, which is in place but then provides the flexibility for 30 the areas to have that two-way ratchet if they are currently office space. I think it also honors the 31 goals that City Council has had of preserving retail. 32 33 Chair Garber: Commissioner Martinez. 34 35 Commissioner Martinez: I have a question about the substitute motion. Arthur what do you 36 mean when you say retail will stay retail? 37 38 Commissioner Keller: What I mean is that the provisions of Section 18.18.060(f)(1) apply only 39 to those parcels for which the provisions now apply. 40 41 Chair Garber: If you would give us an example. 42 43 Commissioner Keller: Basically my understanding of this Section is that there are some parcels' 44 within the CD-C District, non-GF portion, which have retail uses now on the ground floor. 45 According to this provision those uses require that they remain retail. If the motion as originally 46 proposed, to which I am making a substitute motion, if that motion is passed then those parcels 47 could become non-retail use, could become office use. There was at least one member of the 48 public who .said that he has chosen not to take an office use and experiment with the retail use 49 because he has been concerned that if he did that it would have to stay office, it would be Page 41 1 ratcheted in one direction. So I am basically limiting the 18.18.060(f)(1) only to apply to those 2 uses that are currently forced to remain retail and to allow experimentation on the uses that are 3 not currently retail, to allow the offices use to become retail and to revert back, back and forth at 4 will. 5 6 Chair Garber: So, Commissioner Keller if I understand you correctly, and forgive me 7 Commissioner Martinez the properties, which are currently brown or orange up there, would 8 remain retail. 9 10 Commissioner Keller: No, I am refeni.ng to the yellow properties. We are talking about the 11 yellow properties for CD-C. The brown properties are CD-C with GF. So the yellow properties 12 currently are partially retail and partially non-retail. Anything that is retail now under this 13 current ordinance has to stay as retail and anything that is not retail if it becomes retail it ratchets 14 and stays as retail from now on. What I am simply saying is I am freezing it so that those things 15 that are forced to be retail now remain as retail and anything in the future that becomes retail that 16 is currently non-retail doesn't have to stay retail and can go back and forth. 17 18 Chair Garber: Let's see if Commissioner Martinez is satisfied with his question. 19 20 Commissioner Martinez: Yes, I think I get it. 21 22 Chair Garber: Commissioner Lippert. 23 24 Commissioner Lippert: The only concern I have is that what you have described, and I think 25 Commissioner Holman hit on is I think there might be some legal issues which could represent a 26 taking in that you have one zone and two disparate policies in terms of how to interpret that 27 zone. That runs into legal land use questions. 28 29 Chair Garber: Planning Director, forgive me and welcome back. Thank you for your ping-pong 30 game. Weare in the midst of a question here which I don't think you were in the room to hear 31 the beginning of. We are taking each of the recommendations bullet by bullet and making 32 motions around them. There was a motion made to support the Staff recommendation to change 33 the Downtown Commercial District regulations, bullet point nUlTlber two. A substitute motion 34 was made to create a -how would you describe it Commissioner Keller? The yellow properties 35 if they currently are occupied by retail they would have to remain retail. If they are not occupied 36 by retail they could be changed to retail but then would have to remain retail. 37 38 Commissioner Keller: The current ordinance if they are changed to retail they have to remain 39 retail forever. Under my proposal places that are not retail that become retail in the existing 40 building those could revert back. However existing retail uses have to remain as retail. In other 41 words, essentially what would happen is that certain sections would have a date of March 19, 42 2001 through some date in 2009 when the ordinance took effect. 43 44 Chair Garber: Essentially you would have a map where the yellow is and there would be some 45 of the brown or orange inside that yellow. 46 47 Commissioner Keller: No it wouldn't be brown or orange because it wouldn't have the GF 48 designation by zoning. It would have the GF designation. by continuation of the current 49 restriction. Therefore we are not taking from the current property owners because it is already Page 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 GF. We are simply allowing new properties that do not have the GF restriction to not have to have it in the future. \ Conm1issioner Lippert: My point is that you are giving property rights to one group but not the other. Chair Garber: Planning Director, any advice for the Commissioners? Mr. Williams: I don't think: there is a legal reason you can't make that distinction. I think: it is a little bit of a bookkeeping thing for us to keep a record of what is retail now. It wouldn't be our recommendation that you go there but that is obviously the Commission's determination. The reason we wouldn't recommend it is we have talked about some properties that currently are in that yellow area, they are retail, but we don't think: it makes a lot of sense to require them to remain retail, or at least not to the extent that they are already. So do you really want to do that and just give the flexibility to the new ones but that is your call. Vice-Chair Tuma: Commissioner Tuma. Vice-Chair Tuma: To me this is completely arbitrary. We are picking this time because this happens to be -we are not doing this based on a policy that we are trying to effectuate. Weare doing this because well, as of right now those are in and those are out. It just seems completely arbitrary to me. The other thing is having the flexibility in these outlying buildings, having a good vibrant Downtown is partly having enough office space and whether that is ground floor or not when you are outside of the core CD-C seems to me to be good policy. Again I go back to the marketplace will help this area resolve that. These are feeder areas. So the substitute motion to me just doesn't fundanlentally the problem I have with it is it just seem arbitrary. Those that are in now are in, those that aren't aren't, and that just seem inappropriate. Chair Garber: Just before I go to Commissioners Keller, Holman, and Lippert I will likely not support the substitute motion only because I believe that again the focus should be on University Avenue and anchoring that ground floor retail there, and to ,allow these sort of bits and pieces to exist outside of that doesn't support the overall concept of trying to focus our energies on University Avenue, it still allows these other occupancies to use but if there is greater diversity and change in those I think: that is fme. That is the way that those zones should work. Commissioner Keller. Commissioner Keller: So I notice that Planning Director had specified that he was' aware of some properties that are currently retail for which retail doesn't make as much sense. I am wondering if it would help the discussion if you could cite a property without being problematic. Mr. Williams: The one we have cited before is Spago at 265 'Lytton property, a very large space that has worked sometimes as a restaurant. It is probably maybe the only thing it could work as given the way it is configured. It has been vacant for some time. There is a small retail taking up a small part of that right now. It is out at the mid-block on Lytton where there just really is not the kind of foot traffic to support that and that is why a Stars or Spago or something has to be a destination that goes there. So it could sit vacant for a long time. So some of these at the periphery like that mid-block on Lytton or Hamilton, the sort of far reaches it seems counter Page 43 1 productive to require them just because they have most recently been retail to remain forever in 2 that designation. 3 4 Commissioner Keller: So let me just quickly say that here we are allowing retail to become non- 5 retail perhaps by neglect if you will, allowing them to have anything. At least this is much better 6 than what the City deliberately did 20-some years ago where the City prior to my involvement 7 deliberately killed retail in South El Camino Real and forced it to become housing. So this is not 8 nearly as bad but I am wondering if some Planning Conlmissioner 20 years hence might wish we 9 hadn't done this sinli1arly. 10 11 Chair Garber: Well, every new Planning Commissioner is smarter than all the others by 12 definition. Commissioner Holman and then Lippert and then let's get to the question. 13 14 Commissioner Holman: I am actually going to remove my second but I sort of wish that this 15 topic and the next one were considered together because I do have comments and suggestions on 16 the GF where it goes and where it doesn't go. So I really think these go hand in glove but I think 17 this one as a standalone motion doesn't have the merit that I would hope that it might. 18 19 Chair Garber: Okay. In that case if Commissioner Lippert will allow let me call the question of 20 the primary motion, which is supporting the Staff s recommendation. 21 22 Commissioner Holman: Excuse me but for me these go hand in glove. I am not going to be able 23 to vote up or down on this without also having the consideration of the next bullet point. They 24 go absolutely hand in glove. 25 26 Chair Garber: The next bullet point being the zoning map or the order that I had suggested 27 which is that we go to Recommended Limits on Businesses of Concern? 28 29 Commissioner Holman: The zoning map. Sorry, but I am sure you can understand why. 30 31 Chair Garber: So let me see if I am understanding what you are suggesting the Commission do 32 here. To no longer support the substitute motion but create another substitute motion where we - 33 well we could do it that way too but what I anl hearing is there is a substitute motion to say let us 34 consider Staff recommendations bullets number two and three together. 35 36 Commissioner Holman: That is correct. It could be a series of amendments it doesn't have to be 37 a substitute motion. It could be a series of amendments either to the main motion or independent 38 amendments, or we could table the current motion. There are a number of ways to address it. 39 40 The reason being depending on what we do with the zoning map is going to absolutely determine 41 what I do in regard to the current motion. 42 43 Chair Garber: So let's just table the motion. Do you think we can get through the Limits of 44 Businesses of Concern topic and then go to the zoning map topic? My recommendation is that 45 we create a motion supporting the Staff s recommendation here and then take an inlmediate vote 46 on that to just see if we can get through that. 47 48 Commissioner Lippert: I call the question. I have called the question you have to do it. 49 Page 44 1 Commissioner Keller: Actually sir, calling the question requires a vote and tabling is priority 2 over calling the question. I move to table. 3 4 Commissioner Lippert: But we have a main motion and I was recognized to speak after 5 Commissioner Holman and you were not. 6 7 Chair Garber: Okay, now I am completely confused. Any help, Mr. Planning Director? 8 9 Mr. Williams: I think you should either vote on the main motion or vote to table. I think the 10 result is the same way, I assume it is going to reflect the same position. If there is a majority of 11 you that is not supportive of the substitute motion right now then that majority would vote to 12 table if you vote on tabling. Ifnot, then I don't know I just see it coming out the same way. So 13 whichever vote you take first but I do think it is appropriate to vote on either the motion or 14 tabling. I think that is the Chair's prerogative as far as who was first in line. 15 16 Chair Garber: Okay. I think that what we should do is go back to the primary motion and either 17 get that up or out and then we will move forward from there. 18 19 So without further comment. 20 21 Commissioner Keller: You can't. I object. 22 23 Chair Garber: Planning Director ... 24 25 Commissioner Keller: According to Robert's Rules of Order .... 26 27 Chair Garber: Which we do not follow. 28 29 Commissioner Keller: Calling the question is a motion that requires a vote and it is not simply 30 an un-voted motion. 31 32 Chair Garber: Okay, rather than debating the issue. All those in favor of calling the question to 33 the original motions, all those in favor of supporting an immediate vote say aye. (ayes) 34 Opposed? (nay) That passes four to three. 35 36 Mr. Williams: Now you vote on the motion. 37 38 MOTION PASSED (4-3-0-0, Commissioners Holman, Keller, and Fineberg against) 39 40 Chair Garber: The primary motion. So let's vote on the primary motion which is to support 41 Staff's recommendation that removes PAMC Section 18.18.060(f)(1) so that the loss of 42 flexibility of ground floor uses in the downtown core covered by the GF Combining District will 43 be balanced by an increase in flexibility for ground floor uses in the periphery of the Downtown. 44 All those in favor say aye. (ayes) All those opposed? (nays) The motion passes four to three 45 with Commissioners Martinez, Garber, Tuma, and Lippert supporting it and Commissioners 46 Holman, Keller, and Fineberg not supporting it. 47 48 MOTION Page 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Okay, we will go to a motion that supports the Staffreconunendation on Limits of Business of Concern. Do I hear a second to that motion? SECOND Vice-Chair Tuma: Second. Chair Garber: Seconded by Commissioner Tuma. The maker has no comments. Does the seconder? Vice-Chair Tuma: No. Chair Garber: None. Is there discussion regarding this? Commissioner Holman and then Keller. Commissioner Holman: I really ask Commissioners to consider what the consequence of this is and what the consequence is to the City and the public. So what we just did by majority vote was say that existing retail that is required to remain in place can convert to non-income producing, non-retail use. If we also take out 12 properties and add but six we are further exacerbating the loss of retail generating properties to the City. Am I not understanding the motion? Chair Garber: We are talking about bullet point number four as opposed to the map, restaurants primarily. Commissioner Holman: Oh, I am sorry. I thought you were looking at bullet point number three. My apologies. Skipped one on me. Chair Garber: I apologize. Are there comments regarding? Commissioner Keller. Commissioner Keller: Briefly. I am going to support this motion just because we don't have any time to deal with this. I believe that the proper time for dealing with this is when we are doing the Comprehensive PIal.} Update, when we are talking about retail mixes and we are talking about retail in general. That is the proper venue and I hope we get the data back that I have requested one that so we can do the appropriate analysis at that time. \ Chair Garber: So noted. Any other discussion? Commissioner Holman. Commissioner Holman: If I might, Ms. French do you know if we are going to have opportunity to address this under the Zoning Ordinance Update? The primary focus has not been Downtown. Ms. Amy French, Current Planning Manager: We are done with the Zoning Ordinance Update. Do you mean the Comprehensive Plan? Commissioner Holman: I am sorry, the Comprehensive Plan Update, yes. Ms. French: I thought I saw Julie blow through here and maybe she is on her way back, I don't know. So I don't know the answer to that. Could somebody just state what the actual motion is about, it is something about business restaurants, that one? Page 46 1 2 Vice-Chair Tuma: Yes, the motion I believe was to adopt the Staff recommendation to make no 3 changes to the limits on specific businesses of concern. 4 5 Ms. French: Thanks, that's great for the record. 6 7 Chair Garber: With that let us .... 8 9 Commissioner Holman: I am going to oppose the motion because I don't know that we can 10 address this during the Conlprehensive Plan Update. I have no information that indicates we will 11 be able to and I think it is something that needs more study. So sorry. 12 13 Chair Garber: Commissioner Fineberg. 14 15 Commissioner Fineberg: In preparing for tonight's nleeting I renlember reading something that 16 amendments to the Comprehensive Plan can be initiated at any time by the Planning 17 Commission, I believe it was Staff, or project applicants. So is there a mechanism that we can 18 bring this back on our agenda whether it be concurrent with the Comprehensive Plan Update or 19 in advance of it or after it so that it as an item can get the consideration that it warrants? The 20 answer to that would influence how I would vote on this. 21 22 Chair Garber: If I may prompt Staff there just happens to be on November 18, under Future 23 Agenda Items, a review of business and economics chapter in the Comprehensive Plan. 24 25 Ms. French: That looks promising. 26 27 Chair Garber: Thank you for your optimism. Commissioner Fineberg, does that help. you? 28 29 Commissioner Fineberg: Yes it does and I think we can satisfy our needs then. 30 31 Chair Garber: Commissioner Holman. 32 33 Commissioner Holman: With that assurance I can support the nl0tion. 34 35 MOTION PASSED (7-0-0-0) 36 37 Chair Garber: All those in favor of the motion as stated say aye. (ayes) All those opposed? 38 That motion passes unanimously. 39 40 Let us go to bullet point number three. Let us first state the motion. Conlmissioner Keller. 41 42 MOTION 43 44 Commissioner Keller: I move the third bullet of the third item, which is added GF protections to 45 the existing retail on the south side of the strongest block of retail on Hamilton Avenue (the 200 46 block between Emerson Street and Ramona Street) and to the Aquarius Theater and the two 47 restaurant sites inlmediately to the north on Emerson. That is a single motion separate from any 48 other thing we consider on this item. 49 Page 47 1 SECOND 2 3 Vice-Chair Tuma: Second 4 5 Chair Garber: Would the maker like to speak to their motion? 6 7 Commissioner Keller: I think that this is a clear area where retail is certainly contiguous with 8 existing retail and it certainly strengthens to add GF protection to these identified parcels that 9 Staff recommends. 10 11 Chair Garber: Seconder? 12 13 Vice-Chair Tuma: No. 14 15 Chair Garber: Discussion? 16 17 Commissioner Holman: Could the motion please be restated? I am sorry. 18 19 Commissioner Keller: The motion is if you look at Staff recommendation on the Zoning Map I 20 am making the revision to the PAMC Section 18.08.040 to add the properties that are listed on 21 the third bullet, added GF protection to that whole section, that whole paragraph. That is it for 22 this motion. It is just the entire third bullet of this. I am not doing deletions. I am not doing the 23 no changes at this time. 24 25 MOTION PASSED (7-0-0-0) 26 27 Chair Garber: Does that help? I see no lights for discussion. All those in favor of the motion as 28 stated say aye. (ayes) All opposed? The motion passes unanimously, thank you. 29 30 May I have another motion for the remainder or some portion of the remainder? 31 32 MOTION 33 34 Commissioner Keller: I am going to make the motion that we make no further changes, no 35 removals, and no further changes to the Zoning Map at this time. 36 37 SECOND 38 39 Commissioner Lippert: I will second that. 40 41 Chair Garber: Would the maker like to speak to their motion? 42 43 Commissioner Keller: I think in particular with the way that the second motion went earlier 44 tonight that this is not the time to remove controls on these parcels. If the second motion had 45 gone differently I might have felt differently but not under these circumstances. 46 47 Chair Garber: The seconder? 48 49 Commissioner Lippert: I don't need to say anything. Page 48 1 2 Chair Garber: I see a light from Commissioner Holman. Commissioner Holman. 3 4 Commissioner Holman: I would like to add a friendly amendment to the motion, hopefully a 5 friendly amendment to the motion to continue Emerson from Hamilton to Forest both sides of 6 the street. There are a couple of other places but I would like to add those as an initial thought. 7 8 Commissioner Keller: Let me restrict my motion simply to not recommending the first two 9 removals and let Commissioner Holman's proposals be separately voted on, is that okay? 10 11 Chair Garber: Okay, so that does not limit Commissioner Holman from making motions to make 12 other additions separately. 13 14 Commissioner Keller: Yes that is correct. 15 16 AMENDMENT (SUBSTITUTE MOTION) 17 18 Commissioner Holman: So I will make a separate amendment motion to add .... 19 20 Chair Garber: This would be a substitute motion. 21 22 Commissioner Holman: No it is a separate amendment to the motion. 23 24 Chair Garber: I see, thank you. 25 26 Commissioner Holman: To add Emerson between Hamilton and Forest to connect the South of 27 Forest Avenue area and the Downtown GF District to be protected by the GF zone. 28 29 Commissioner Keller: May I inquire whether you are also referring to --there are some 30 residential or non-retail properties along there, are you including those? On the logical east side 31 of Emerson. 32 33 Commissioner Holman: There is a combination of uses. Again this doesn't require that they 34 change. 35 36 SECOND 37 38 Commissioner Keller: Okay, well I will accept your amendment. 39 40 Chair Garber: Seconder? 41 42 Commissioner Lippert: No. 43 44 Ms. Cutler: May I ask for clarification? 45 46 Chair Garber: Yes. 47 48 Ms. Cutler: I would like to clarify that you mean both sides of the street along that entire block. 49 Page 49 1 Commissioner Holman: Yes. 2 3 Ms. Cutler: Thank you. 4 5 Chair Garber: I believe that is understood by the maker and seconder as well. So that 6 amendment fails unless you make it a substitute motion. 7 8 Commissioner Holman: It is an amendment as a separate nlotion. I believe Commissioner 9 Keller seconded it. It is a motion. 10 11 Chair Garber: You were offering it as? 12 13 Commissioner Holman: As a separate amendment motion. 14 15 Commissioner Lippert: Excuse me the first time around she was making a friendly amendment. 16 I was not accepting it. The second time she was making it a formal amendment where we would 1 7 have to vote on it. 18 19 Commissioner Holman: So I already made the motion and I believe there was a second. 20 21 Commissioner Keller: I am seconding it. 22 23 Chair Garber: Okay. Commissioner Holman would you like to speak to your motion? 24 25 Ms. French: I have to step in because there is no attorney here. We have not advertised this 26 portion of the map as proposed changes so I am a little bit concerned if we are adding tonight. 27 The first motion was that no further map changes would be added and now it is a substitute 28 motion saying oh yes, further map changes are being made and these are not ones that we had 29 put forward tonight. 30 31 Chair Garber: Commissioner Tuma. 32 33 Vice-Chair Tuma: We can't do this. This has not been noticed. These owners, these business 34 members have no idea this is going on. I just don't see how we could just throw this into the 35 mIx. 36 37 Commissioner Lippert: We would need to initiate first and notice that this was going to happen 38 and then we would have to have a formal hearing on it. That is my reason for saying no to the 39 amendment. I should have spoken up. 40 41 Chair Garber: Commissioner Keller. 42 43 Commissioner Keller: I appreciate the Commission's predicament that we are in. Unfortunately 44 the motion that we made number two where we removed retail protection from there that 45 essentially removed retail protection from a large swath, which is much too broad and that is 46 why I was opposed to that. I realize that as a losing party to the second motion if we were to 47 limit that geographically so that the removal did not apply to these parcels along Emerson then 48 we wouldn't need this motion. But because the second motion essentially eliminated all 49 protection to Emerson, a thriving retail district that connects with the retail district in SOFA this Page 50 1 is problematic. So if somebody on the prevailing side would move for reconsideration on the 2 second motion so that we could amend it to eliminate that we wouldn't have this problem. 3 4 Chair Garber: Let's not make it more complex than it is. Commissioner Holman. 5 6 Commissioner Holman: This shouldn't be this hard. The Commission is very challenged 7 because we don't have legal representation, which is exceedingly frustrating. I am prone to say, 8 and I don't know if this is legally allowed either, is that we move the first motion. Somebody on 9 the prevailing side retract the second motion and we continue the whole rest of this until another 10 meeting when we can have proper legal representation and authority. 11 12 What I recall from past is because this is a recommending body, what I recall Attorney saying is 13 that we aren't restricted to exactly what was noticed because it is a recommending body. If we 14 were the City Council then it absolutely would not be allowed. Again, I am going from memory. 15 I am not the attorney. So I think if we could just get off the dime and move the first motion 16 forward and continue the rest of it to a date certain when we can have proper legal guidance I 17 would be most comfortable with that. Sorry for the challenges but we are in the situation that we 18 are in and it is most unfortunate. 19 20 Chair Garber: Commissioners? Full stop is what I am hearing. 21 22 Commissioner Lippert: I am going to call the question. 23 24 Vice-Chair Tuma: I think you are hearing none of the Commissioners on the prevailing side are 25 willing to reopen those motions. 26 27 Chair Garber: That is true. I am uncertain at the moment what question is actually on the table 28 to be voted on. Thank you. Wouldn't you know it would be the one evening that our attorney is 29 not here? 30 31 Ms. French: I have to agree with Commissioner Holman that I don't think it is absolutely illegal 32 because as she says it is a recommending body. So you certainly can do what you would like to 33 that extent because it is not an actionable legislative act. However, we have done a certain 34 amount of outreach and we are going to be doing more I guess. Do you want to weigh in? Julie 35 is here to weigh in. 36 37 Chair Garber: So Commissioners let's do this let's take action on the motion that Commissioner 38 Holman has posited, the amendment. Then let's see if we can move forward as best we can. 39 40 Commissioner Holman: I have one question I apologize, like I said this really shouldn't be this 41 hard. Was there no discussion at all at that the Commission might do something different than 42 what the Staff recommendation is or what the discussions were? We do have that purview. We 43 do have that possibility. So was there no discussion that the outcome might be different than 44 what is recommended here? 45 46 Ms. French: In the outreach meetings there was discussion about Emerson as a possibility and 47 through those outreach discussions it seemed that things were just fine on Emerson so Staff did 48 not recommend it. It had been brought up as a possibility in the outreach sessions. It just is not Page 51 1 identified as a Staff recommendation so I think you can make statements and see where your 2 motion goes. 3 4 Ms. Julie Caporgno, Chief Planning and Transportation Official: I haven't been involved with 5 this that much but my understanding is that you would be able to make a recommendation on 6 anything within the area that you currently looked at in conjunction with this. Now if you are 7 expanding beyond that area then you would have a problem. I think Staff would not be 8 supportive even if it is legally possible to proceed with something that wasn't noticed that was 9 outside the area I think for disclosure purposes and to make sure that there was an appropriate 10 public process we would definitely encourage you to come back and revisit that at a subsequent 11 meeting if it is beyond the scope of the area that was identified. 12 13 Ms. French: Technically it is not beyond the scope because it is in the CD-C. We are not 14 beyond the yellow. If we were beyond the yellow we would have real problenls. 15 16 Chair Garber: Okay. So the question has been called let us vote. All those in favor of the 17 amendment as stated, and forgive me would you please just restate the content of that? 18 19 Commissioner Holman: The GF Zoning District be extended on Emerson between Hamilton and 20 Forest. 21 22 Chair Garber: Commissioner Keller. 23 24 Commissioner Keller: Just so we don't have a problem, I assume you are referring to the portion 25 ofCD-C that is between Hamilton and Forest, and excludes the property on the comer of Forest 26 and Emerson that is not part of the CD-C currently. In other words, we are restricting it to 27 yellow. The portion of which Congresswonlan Anna Eshoo's office is in is not part ofCD-C as 28 far as I can tell from the map. 29 30 Commissioner Lippert: That property is a PC. 31 32 Commissioner Holman: I think that is a PC so that is fine. 33 34 Commissioner Keller: Thank you. 35 36 MOTION PASSED (4-3-0-0, Commissioners Garber, Tuma, and Lippert opposed) 37 38 Chair Garber: All those in favor of the motion as stated say aye. (ayes) All those opposed? 39 (nays) That motion passes with Commissioners Holman, Martinez, Keller, and Fineberg 40 supporting the motion and Commissioners Garber, Tuma, and Lippert not supporting it. 41 42 Ms. French: Who seconded that? We are trying to keep track. 43 44 Chair Garber: Commissioner Keller. Okay, we are back to the main motion, which had been 45 attempted by Commissioner Keller. Would the Commissioner like to try that again? 46 47 Commissioner Keller: Is this the add voting? 48 49 Chair Garber: This would be the add voting, yes. Page 52 1 2 Commissioner Keller: So then it is the adds that we are doing I think. We didn't vote on the 3 adds yet. Sorry, we voted on the adds already that was unanimous. I think what we are voting 4 on is the removals. 5 6 Chair Garber: You are right it is the removals. 7 8 Commissioner Keller: This is the no removals and the only change is Emerson between the CD- 9 C between Forest and Hamilton. 10 11 Ms. French: I am sorry to interrupt this might be out of order. Can we just make sure there is 12 focus? The three miscellaneous non-retail parcels, they are not retail now, on Kipling and 13 Cowper north of University. They are kind of out there on their own. You are saying you are 14 not interested in touching those. 15 16 Commissioner Keller: We are not touching those at this time. 17 18 Chair Garber: Do I hear a second to that motion? I'm sorry that is already in place~ Remind me 19 who actually did second that. 20 21 Commissioner Lippert: I seconded it but then they amended it. 22 23 Chair Garber: Okay, so' I am assuming that speaker that made the motion has nothing more to 24 say. The seconder? 25 26 Commissioner Lippert: I am not going to be supporting the nlotion because I was not in support 27 of the amendment. You can't withdraw the second so I am just not going to support it. I am just 28 not going to vote in support of the motion. 29 30 Commissioner Holman: I will second then. 31 32 Commissioner Lippert: No. I have already seconded it. You can vote on it I am just not going 33 to be supporting it. 34 35 Chair Garber: He is just not going to be supporting it. 36 37 Commissioner Holman: I thought you were withdrawing your second. I apologize. 38 39 Chair Garber: No. So is there discussion by the Commissioners? Commissioner Fineberg. 40 41 Commissioner Fineberg: One issue that was just brought up that I don't know if it is going to 42 warrant a friendly amendment and maybe I will know from a show of smiles or thumbs down. 43 The question of whether we need to deal with whether any of these amendments apply to PCs. 44 We just talked about that one particular parcel. In our previous study session there had been 45 comments about whether we should address PC so that if they were ever redeveloped whether 46 the GF would apply to those PCs. I think if we do not do a friendly amendment now or a 47 substitute amendment then we will be deciding that PCs stay off on their own with no coverage 48 with the GF overlay. So how do we sort of thumbs up or thumbs down that? 49 Page 53 1 Chair Garber: Commissioner Tuma. 2 3 Vice-Chair Tuma: My recollection is that the discussion and the feedback that we had from the 4 Planning Director was that PC is its own zone with its own zoning and it has its own parameters. 5 So if you are going to change anything there that PC would have to be revisited so there would 6 be essentially no effect whatsoever about having this overlay on it or not. I am not even sure that 7 you could do it but even if you did it wouldn't change it because the zoning is its own legislation, 8 its own PC, and has its own parameters. 9 10 Ms. French: Yes, I believe that you would have to individually each separate parcel, parcel-by- 11 parcel, go to add such a PC-GF legislatively. You could not do it blanket all PCs shall have or 12 all PCs in this area shall have. 13 14 Commissioner Fineberg: I will take that then as an absolute thumbs down on considering that at 15 this time and I would support the motion. 16 17 Chair Garber: Conunissioner Martinez. 18 19 Commissioner Martinez: I just wanted us to restate the motion. 20 21 Chair Garber: Commissioner Keller. 22 23 Comnlissioner Keller: The motion is with respect to the Staff recommended revisions of the 24 zoning map we are not doing the first bullet removal, we are not doing the second bullet 25 removal, we are not doing the fourth bullet removals, we are not making changes with respect to 26 the last two bullets, however we are adding the CD-C portions of Emerson between Forest and 27 Hamilton are being added to the GF Overlay protection. 28 29 Ms. French: Both sides of the street. 30 31 Commissioner Keller: Both sides of the street with the exception of the PC portion that is not 32 currentl y CD-C. 33 34 Chair Garber: May I ask Staff to take the laser pointer and point to these areas? 35 36 Ms. Cutler: Let's see, the first bullet point is removal ofGF from properties along Alma and 37 portions of High Street near Hamilton so that is down here, which we are not doing according to 38 the current motion. The second bullet point is removal of GF protection from properties along 39 the circle ramps connecting University Avenue and Alma Street, which is here, which again 40 based on the current motion I believe you are not proposing. Bullet point four we skip down to 41 the three miscellaneous properties that are not retail currently but are currently in the GF zone 42 the current nlotion proposes to leave them as they are in the GF zone. Number five is that no 43 changes would be made to University Avenue east of Cowper Street so that is these properties 44 here, and the motion I believe is to go with that recommendation and not make any changes 45 there. Bullet point number six is no changes to Bryant Street between University Avenue and 46 Hamilton, which is right here this block, and I believe the motion currently on the table is to 47 leave that as it is in the GF zone. 48 Page 54 1 The amendment I believe was to take the block of Emerson between Hamilton and Forest on 2 both sides of the street where it is yellow in this picture in the CD-C and add those to the GF. 3 4 MOTION FAILS (3-4-0-0, Commissioners Martinez, Garber, Tuma, and Lippert opposed) 5 6 Chair Garber: Thank you. With that let's call the question. All those in favor of the motion as 7 stated say aye. (ayes) All those opposed? (nays) That motion fails with Commissioners 8 Martinez, Garber, Tuma, and Lippert opposed and Comnlissioners Holman, Keller, and Fineberg 9 supporting the motion. 10 11 So let me just ask the Commissioners if there is any other discussion or motion that needs to be 12 added to this particular item. Commissioners Tuma, Keller, and Holman. 13 14 MOTION 15 16 Vice-Chair Tuma: Okay. I am going to make a motion that with respect to bullet points five and 17 six, the no changes to University Avenue east of Cowper and no changes to Bryant between 18 University and Hamilton. 19 20 SECOND 21 22 Chair Garber: I will second that. Would the maker like to speak to their motion? 23 24 Vice-Chair Tuma: What I am trying to do here is knock off items that I think we have violent 25 agreement on. Those two bullet points seem to fall into that category. My sense is that at least 26 the vast majority of the Commission is fine with that and I just want to try to knock those off. 27 28 MOTION PASSED (7-0-0-0) 29 30 Chair Garber: Commissioner Holman? Okay. All those in favor of the motion as stated say aye. 31 (ayes) All those opposed? The motion passes unanimously. 32 33 Commissioner Holman. I apologize Commissioner Holman. Con1missioner Keller was ahead of 34 you. Commissioner Keller. Commissioner Keller is giving you precedence Commissioner 35 Holman. 36 37 Commissioner Holman: There are other things I would like to do but I think out of frustration I 38 shan't. I don't want to let the opportunity pass without mentioning that this Commission I hope 39 would support expeditious activities on the part of the City and the City Staff to work with 40 property owners to make improvenlents such as an improvement to the I know actually that the 41 City Manager is looking at and working towards getting rid of the multi-tentacled process for 42 approvals and looking at improvements to the Downtown Business District including signage, 43 cleaning the sidewalks and such. So I am hoping the Commissioners would help support 44 Council in directing improvements in that area to support the business districts including plaques 45 and sandwich boards. 46 47 Chair Garber: So your recommendation here is not necessarily to make it a motion but we can 48 make that something that we ask Staff to revisit and we can agendize that separately. 49 Page 55 1 Commissioner Holman: Absolutely. If we could have a straw poll. It is not a motion because it 2 is not before us as an action but again Mr. Williams, Planning Director, did say that we could 3 comnlent on that this evening. 4 5 Chair Garber: Okay. I am happy to do a straw poll. Are the Commissioners in favor of asking 6 Staff to agendize that item for a discussion at a later time? Seeing nods around the table. 7 Commissioner Keller and then Tuma. 8 9 Commissioner Keller: I would like that to be done particularly if there were size limitations. 10 There are some sandwich boards off of Downtown that I noticed that are overly large, 11 particularly one on Alma Street. 12 13 MOTION 14 15 I move that we do not do bullets one, two, and four of the Staff recommended provisions of the 16 zoning map. 17 18 Chair Garber: Do I hear a second for that? 19 20 SECOND 21 22 Commissioner Lippert: I will second that. 23 24 Commissioner Fineberg: Point of clarification. What do you mean by do not do? The opposite 25 of what is stated? 26 27 Conlmissioner Keller: We do not accept Staff recommendation for the removal of GF protection 28 on any of the parcels that has recommended. 29 30 Chair Garber: Bullet points one, two, and four. 31 32 Commissioner Lippert: I will support that. 33 34 Chair Garber: That is seconded by Commissioner Lippert. Would the maker like to speak to 35 their motion? 36 37 Commissioner Keller: No. 38 39 MOTION PASSED (4-3-0-0, Commissioners Martinez, Garber, and Tuma opposed) 40 41 Chair Garber: If there is no more discussion, Commissioners in favor of the motion as stated say 42 aye. (ayes) All those opposed? (nays) The motion passes with Commissioner Holman, Keller, 43 Fineberg, and Lippert in support and Commissioners Martinez, Garber, and Tuma not supporting 44 it. 45 46 Conlmissioners, anything else? Thank you. I will close the public hearing and we will take a 47 five-minute break. 48 49 Commissioners, let us start item number two. Page 56 ATTACHMENT H 1 Planning and Transportation Commission 2 Verbatim Minutes 3 h~~WM 4 5 EXCERPT 6 7 Initiate Zoning Map and Text Changes to the Ground Floor (GF) Combining District and 8 Downtown Commercial Community (CD-C) Zone District. 9 10 Ms. Jennifer Cutler, Planner: Good evening Commissioners. This item is a City initiated action. 11 The intent tonight is for the Commission to consider the initiation of possible zone map and text 12 changes for the Ground Floor Combining District and for the Downtown Commercial 13 Community, the CD-C, zone district, and to hear discussion of what these changes might include. 14 Since this is an initiation the issue will return to the Commission for additional discussion once a 15 draft ordinance has been prepared and which time they will make a reconunendation to Council. 16 17 A map of the existing CD-C zoning Downtown as well as the location of the Ground Floor 18 Combining District is available on the wall and we have actually put it up on the screen as well. 19 Both the CD zone and the GF Combining District zone text in relation to ground floor 20 restrictions are included in the attachments to the Staff Report. 21 22 One important element of tonight's discussion is to keep in mind that there are two places in the 23 code where ground floor uses are restricted. So we ask everyone to try and state clearly whether 24 their comments pertain to the Ground Floor Combining District or to the restrictions to ground 25 floor uses which can be found in the CD-C District because those are slightly different but there 26 are a lot of similarities and I know there is often confusion between those. 27 28 Staff has prepared several possible items that could be included in an ordinance revision and 29 welcomes additional suggestions. Tonight we are requesting input on the four changes that were 30 listed in the Staff Report. Those changes are one, increase in the vacancy rate, which is required 31 in the GF Combining District. Two, is the possibility of allowing office and other uses on the 32 ground floor of buildings within the CD-C District, but those that are located outside the GF 33 Downtown core. Number three is to revise the boundary of the Downtown Ground Floor 34 Combining District either expanding or contracting in places where appropriate. Number five is 35 a discussion of differentiating between retail uses and restaurant uses and whether there should 36 be a differentiation of those. 37 38 Staff is available to answer any questions and follow up with any additional research if 39 requested. 40 41 Vice-Chair Tuma: Thank you. We have just one card from the public. I see we now have two 42 cards from the public. So we will go to the public first before we come to Commissioners. You 43 will have three minutes to speak. The first speaker is Herb Borock followed by Bob Moss. Mr. 44 Borock. 45 46 Mr. Herb Borock, Palo Alto: Thank you Vice-Chair Tuma. I was in these Council Chambers 47 when the use exception of five percent vacancy rate was included in the CD zone district 48 regulations many years ago. I recall Council Member Levy opposing it because he said a five Page 9 1 percent vacancy rate is a normal vacancy rate. The idea of permitting an exception at a normal 2 rate didn't make sense. 3 4 I don't believe you should initiate any changes based on the Staff Report. This isn't something 5 that is being brought to you because you asked for the Staff to bring it to you or the Council 6 asked the Staff to bring it to you. It is coming from the Staff. Instead what you get on page 3 in 7 the passive voice saying that somebody has recommended changes and this is some of those 8 changes. I believe and if they are coming from people in the community there would be a letter 9 attached as to whoever it is that is making the proposal. If you are being given examples I would 10 like to see what the other suggestions are. If Staff itself has a recommendation as to what 11 specific things should be changed that is what should be appearing in the report. There is a 12 suggestion that this has something to do with preserving retail yet it has recommendations for 13 areas that would make it easier for offices on the ground floor. 14 15 You had a discussion earlier this evening about how long it would be taking to do a 16 Comprehensive Plan revision. Suddenly you are being asked on two items, this item and the 17 next item, to make very specific changes in what seems to me a hurry, especially since the 18 economic conditions at least in the minds of the property owners don't appear to be particular 19 long-term, otherwise they would be lowering the rents enough to fill those spaces. So I don't see 20 any particular reason or any crisis that requires us to suddenly change any of this. In any event, 21 ifStaffbelieves changes are warranted I would like to see a more specific recommendation with 22 the authorship of the proposers. Thank you. 23 24 Vice-Chair Tuma: Thank you. Bob Moss will be our last speaker on this item. 25 26 Mr. Robert Moss, Palo Alto: Thank you Vice-Chair Tuma and Commissioners. I also remenlber 27 when this first was enacted more than 20 years ago. Initially surveys were made Downtown of 28 the vacancy rates on a regular basis. I can only recall one instance in the last 23 or 24 years 29 when the vacancy rate was over five percent and that was a very brief spike and it went back 30 down to about three and a half or four percent in about four or five months. So this is unusual. 31 The other thing I found unusual about it is I have been tracking vacancy rates along EI Camino 32 partiCUlarly in the Barron ParklVentura area since the mid 1970s. The last census I took was a 33 few months ago and the vacancy rate was approximately 12 or 14 percent. That includes several 34 properties that have been vacant for 25 or 30 years so you really shouldn't be counting them. In 35 the last four months there have been three additional vacancies where people have closed 36 businesses and gone out, which is not a huge amount even though there are something like 150 37 or 160 businesses along EI Camino and El Camino Way. 38 39 Where Downtown seems to be having a significant problem I am not seeing it citywide. I am not 40 seeing it on EI Camino and South Palo Alto so I am kind of puzzled about this. I think it is a 41 good idea to try to retain retail on the ground floor. It might be useful at least initially to put in a 42 temporary increase in the allowed vacancy rate to maybe ten or 15 percent. But have it expire in 43 two or three years when the economy has gotten better and go back to the five percent we have 44 now because this is a very unusual situation. As I say, we have had very rare occasions where 45 we have had over five percent. As Herb said full occupancy is usually considered a vacancy rate 46 of three or four percent. So we have been better than that consistently. 47 48 The one thing the Staff Report has that I find interesting although I am not sure I would 49 implement it is the problem with excessive restaurants. If you go into Downtown Mountain Page 10 1 View Castro is very heavily restaurant oriented. There are very few shops to shop in. There are 2 some down the side streets but it is overwhelmed with restaurants. This is not good for trying to 3 get a business type environment. So if we are getting a lot of restaurants we ought to look at 4 putting in some kind of limitation so we don't have restaurants taking over the temporary retail 5 vacancies and driving retail out in the future. So that is something you can consider. 6 7 The other aspect is this is revising the boundary and I am not sure whether that is really 8 something you want to do now. I anl not sure whether you want to make it bigger or smaller or 9 where you would change it and why you would want to revise it. So without a compelling 10 reason for adding or removing blocks I think it probably ought to, be left the way it is. 11 12 Finally, the office on the ground floor, if you are going to allow that it should be done very 13 carefully and very cautiously. Office uses will drive out retail. One of the biggest problems you 14 have with an office use is they close at five 0' clock and they go home and they leave a vacant 15 building and it kills the vitality of Downtown. So if you have too many offices on a block it is 16 really bad for retail. I would be very careful about allowing additional office on the ground 17 floor. Thank you. 18 19 Vice-Chair Tuma: Thank you. 20 21 Mr. Williams: Mr. Chair can I make a couple of comments please before you deliberate? 22 23 Vice-Chair Tuma: Yes, please go right ahead. 24 25 Mr. Williams: Thank you. I just wanted to respond to a couple of questions and add a little bit 26 more to the Staff presentation. First of all as far as the initiation of the ordinance goes this is 27 something that has come upon us not in the last few days but in the last year certainly. Jim 28 Keene in his new role as City Manager and I, as well as Steve Emslie and the Staff you see here, 29 have met several times on this issue and our concern about the amount of vacancy that is in 30 Downtown. Downtown is one of our major sales tax generators and we have had a couple of 31 inquiries from property owners who have looked at this section of the code on the Ground Floor 32 Retail and the five percent vacancy and asked what is it now and how can I request putting in an 33 office use? I have somebody on the second floor in my building and I would like to extend them 34 down. They are ready to jump down and take that office space if they can. We have basically 35 told them we don't do the count until the end of the year, that is what the code says, and then we 36 will talk about it. So we have had a lot of concern that we are going to get more and more of 37 those kinds of requests as the vacancy rate, we know and when we come back to you we will 38 provide a better inventory of this, but right now it is approximately 15 percent, triple the five 39 percent number. So it is going to probably be awhile before it is back down to five percent. It is 40 not just a matter of it is 15 percent and in six months it is going to be back down to five percent. 41 So we are facing this issue right now. 42 43 We are also facing some issue about some of the properties on the perimeter of the Downtown 44 area that have not ever really functioned very well as retail but they have had retail there, but 45 they have been vacant for some tinle now and have not had retail replacements. Some of the 46 properties on Alma and Lytton and that do not appear to be very good, particularly when they are 47 mid block, very good retail spaces. To some extent that detracts from sort of the concentration 48 that we have on University Avenue and the side streets there. So that raised our concern about is Page 11 1 there a need to really look here at the fringe areas and providing more flexibility there and 2 providing less flexibility on the ground floor of University Avenue and the GF zoning area. 3 4 Then we have certainly talked to some of the major landowners and businesses Downtown and 5 our fear was that there would be a lot of resistance to raising this rate because they generally 6 want to have a lot of flexibility for what to do, but actually we have gotten sort of the reverse. I 7 think most of them are interested in preserving the retail. They know it is sort of synergistic with 8 the rest of the properties they have there so there doesn't seem to be much objection in the OF 9 area to doing that. 10 11 So in any event we thought it was important to bring this forward"and try to do it. It is not a rush 12 type thing where it needs to be done in the next month or even two months but certainly as we 13 get into fall we would like to be able to get something to the Council so they can consider this 14 and hopefully have something in place about the time or shortly after we do our next required 15 survey and report out to them. 16 17 As I mentioned, there is the sales tax generation aspect of the Downtown. There is also sort of 18 the question of if we do modify the vacancy rate what is the right number? I heard Mr. Borock 19 and Mr. Moss talking about five percent was adopted awhile ago that is a standard number. I 20 think we have to ask should there be any nunlber? Should there even be a vacancy rate outlet 21 here or should we basically be saying we want ground floor retail and it doesn't really matter 22 how high that vacancy rate goes. I think someone said once that office gets established there 23 then it is very difficult to move it out. The current language says that it is supposed to move out 24 in five years. I wouldn't relish being the person to try to tell that office user that might bea very 25 successful office user there that they now have to leave because the vacancy rate is back down to 26 five percent and it was only a five-year approval in the first place. 27 28 So I think we really do need to look at these things in a timely way. We certainly are willing, as 29 mentioned in the report, willing to look at the restaurant issue as well. That is something I think 30 the people we have talked to Downtown are very resistant to change. They would like to have 31 the flexibility to do restaurants and feel like that is almost the anchor of Downtown is I think 32 what one of them said is that is what really brings a lot of people to Downtown. By the same 33 token it does have, as Mr. Moss says, the effect to some extent of once you get a restaurant in 34 somewhere there is a lot of infrastructure that goes into that in terms of equipment and tenant 35 improvenlents that are often hard to undo to get retail reestablished in that place. So it is 36 something we would certainly be willing to look at as part of this effort as well. Thank you. 37 38 Vice-Chair Tuma: Thank you. So procedurally just a couple of questions to clarify with Staff. 39 The only thing we can do tonight is initiate or not initiate. 40 41 Mr. Willianls: Correct. 42 43 Vice-Chair Tuma: We are not actually giving any specific direction on what the components of 44 the changes would be. Although you have asked for guidance on not only the items you have 45 listed as one through four but any other thoughts that the Conlffiission has. You will be coming 46 back with a draft ordinance if we were to initiate. 47 48 Mr. Williams: That is right. 49 Page 12 1 Vice-Chair Tuma: Okay, great. So I have a question 'for Commissioners procedurally_ It seems 2 to me that we need to come to some consensus on whether we are going to initiate or not to make 3 the discussion about what the recommendations would be with respect to what those changes 4 might be. I would rather come to that consensus sooner rather than later in the discussion but I 5 don't think people would necessarily be prepared to do that now. Again, I intend to do that with 6 a straw poll and then assuming that we are inclined to move forward with initiation test each of 7 the various components of what the recommendations might be also with straw polls to give 8 some more concrete guidance to Staff. Does that make sense to folks? 9 10 If at any point people feel like we are there I think we should focus the first part of the discussion lIon to initiate or not to initiate and once we get there then let's get into the substance. 12 13 Mr. Larkin: Just to clarify the initiation itself takes a motion but in terms of any guidance on 14 what would actually go into the changes that would just be done with a straw poll because the 15 Commission can't really act on that tonight. 16 17 Vice-Chair Tuma: Okay, just to clarify that. We wouldn't necessarily want a motion that was 18 voted on prior to getting into getting into the discussion about the other items, correct? 19 20 Mr. Larkin: I don't know that it matters what order it is done. I think obviously if you are not 21 going to initiate it is not worth getting into the other items. 22 23 Vice-Chair Tuma: That is what I was trying to avoid. I want to make sure that everyone is or I 24 don't want to have a whole big long discussion about topics if we are not going to initiate. 25 26 Mr. Larkin: I think rather than do a straw poll and then a vote you can just vote to initiate and 27 then talk more about what you would want to see come back. 28 29 Vice-Chair Tuma: Okay, fair enough. Great. Commissioner Holman. 30 31 Commissioner Holman: We have had some other items that have come to us for initiation and 32 sometimes we end up getting into a lot of fine grain detail about what would actually be coming 33 back to us. So what I am hoping we can avoid is getting into the arguments pro or con, different 34 aspects of what might come back to us but rather focus on the kinds of things that we would be 35 interested in seeing in what would come back to us. 36 37 Vice-Chair Tuma: I would concur with that completely. So with that I have lights from 38 Commissioners Keller, Fineberg, and Lippert in that order. Commissioner Keller. 39 40 Commissioner Keller: Thank you. I believe we have had problems in the past of making a 41 motion, which was voted on, and then having comments follow the close of the motion. We 42 have been told in the past that once we make a motion we may not comment further on it. We 43 were once told that. 44 45 Mr. Larkin: I don't know why that has been a problem. Because of the way that this was 46 agendized it is agendized in a way that would allow you to make comments. What you can't do 47 is direct what goes into the motion until that is in front of you because tonight you are just 48 initiating. I think you can make suggestions as to things that the Staff should be coming back 49 with as items to explore. Page 13 1 2 MOTION 3 4 Commissioner Keller: So with the understanding that we can make a motion, at some point vote 5 on the motion, and continue to make comments I am going to kick it offby making a motion that 6 we initiate. Then after that I would like to come back and make some comments. 7 8 SECOND 9 10 Commissioner Holman: Second. 11 12 Vice-Chair Tuma: Okay, motion by Commissioner Keller and seconded by Commissioner 13 Holman that we initiate. Would you like to speak to the motion? 14 15 Commissioner Keller: Yes. Firstly I take credit or blame for this particular item. When we 16 talked about the retail report for the Comprehensive Plan discussion a few months ago and that 17 was coincident with the Report to Council based on the study that was done in 2008. At that 18 point I specifically mentioned that we need to consider bumping up the threshold. There was a 19 member of the public that commented that this did not come from the Commission and in fact it 20 came from me and I don't remember if there were any other comments from Commissioners 21 about it but I do specifically remember having nlentioned that. 22 23 My thought or rationale at the time was that if we were to allow because of a there is a 24 difference between a blip, which this is essentially a blip. We hope that this is not a long-term 25 trend. We hope this is a temporary thing because of a deep recession. If it were a long-term 26 trend then you might consider allowing office to creep in but essentially that would be the death 27 of Downtown because you would be getting Swiss cheese. You would essentially have offices 28 creeping in creating holes in the retail of Downtown and thereby losing the vibrancy of the mix 29 of kinds of measures. 30 31 I will basically want to come back after we vote on this make more detailed comments but 32 essentially I think that we need to do this in order to prevent making Downtown into a Swiss 33 cheese of retail with holes of office. Thank you. 34 35 Vice-Chair Tuma: Commissioner Holman, would you like to speak to your second? 36 37 Commissioner Holman: Just briefly. I appreciate Staff bringing this forward and appreciate the 38 proactive aspect of it. I think we should initiate for a few reasons but among those primarily 39 would be the preservation of existing and ongoing retail uses. We need to support them with the 40 continuation and the synergy, as you mentioned Curtis, of other retail uses. So that is why I 41 seconded the motion. 42 43 Vice-Chair Tuma: Okay, would anybody else like to speak on the motion? Commissioner 44 Fineberg. 45 46 Commissioner Fineberg: I have a question for Staff that goes specifically to the need for 47 whether or not to initiate. It relates specifically to the discretion that the Director has when 48 reviewing and approving an exception. Weare now in a condition where we are it?-excess of the 49 five percent vacancy and a property owner may bring forward an application for the exception. Page 14 1 Does the Director have the discretion to simply say no? Can the Director say no sometimes? If 2 they say yes sometimes must the Director say yes in all similar cases? 3 4 Mr. Williams: Well, I think there are some findings and determinations that need to be made. It 5 says an application for uses permitted if the application is made and the vacancy rate is five 6 percent or greater, demonstrate that the ground floor space has been vacant/available for six 7 months, and then it is limited. Are there other findings? 8 9 Ms. Amy French. Current Planning Manager: We had a little discussion the other day at the pre- 10 Commission meeting and Curtis was not available for that portion of it. Basically we discussed 11 how there really are not findings here as you would normally see for a use permit or such. It just 12 basically said if these conditions are met five percent and they can demonstrate then there are no 13 other findings. So it would be rather difficult for the Director to say you haven't met the third 14 finding because there isn't a third finding. 15 16 Mr. Williams: Yes. 17 18 Mr. Larkin: It would be a quasi-judicial decision by the Director. The only way that the 19 Director would be able to deny the request is ifhe felt that it didn't meet the six-month standard 20 or there wasn't the vacancy rate or they weren't actually trying to market the property. So there 21 are areas where the Director would have discretion but it wouldn't be because we don't like this 22 particular office use or anything like that. 23 24 Vice-Chair Tuma: I am going to chime in on this just for a second because we did discuss this at 25 some length at the pre-Commission meeting and one of the suggestions at that point is part of 26 what we certainly are in a position to do is to suggest that findings be developed. We may have 27 some thoughts on what those might be but one of the possibilities coming out of tonight's 28 meeting would be that findings should be developed, put together, and brought back as part of 29 the ordinance where there are specific findings that need to be made. So that is certainly one of 30 the opportunities that is before us tonight. 31 32 Commissioner Fineberg: Okay. So if the findings are met that the vacancy rate is greater than 33 five percent or it has been vacant for six months the Director could not decide that it is not 34 consistent with the goals of the Comprehensive Plan for retail retention, it is not consistent with 35 Council's mandate to preserve neighborhood serving retail, so those policies and co~es or 36 programs I should say wouldn't be sufficient to support the Director in a no decision. Is that 37 correct? 38 39 Ms. French: The first point is it is an 'and' not an 'or.' The second thing is there are other 40 permits in the Title 18 like a Conditional Use Permit or other permits usually one of the first 41 findings is that it is consistent with the Comprehensive Plan. So that would be one of the things 42 we could consider adding into a finding but it is not there now. 43 44 Commissioner Fineberg: So without that the Director has no discretion and the answer is a yes 45 and so we would be adding those controls. Okay, thank you. 46 47 Vice-Chair Tuma: Commissioner Lippert on the topic of initiation. 48 Page 15 1 Commissioner Lippert: Yes. I would definitely support initiation. One of the reasons why I 2 moved to Palo Alto, actually the area where we live is Downtown North, is because we are in 3 proximity to the Downtown. One of the things that we really love about being near the 4 Downtown is all the wonderful retail and restaurants and other services that there. Weare able 5 to leave our house, not take our car, and walk down University Avenue and treat it like it is a 6 neighborhood shopping center. I wish that there were some other uses that were defined when 7 we moved here to Palo Alto there were bookstores and movie theaters, which seem to have 8 evaporated. I think that it is hard to regulate bookstores but they surely are missed in terms of 9 the quality and character of Palo Alto. When we first moved here I think there were four or five 10 movie theaters in the Downtown all within walking distance. Those would have been desirable 11 uses to have preserved as well. 12 13 So I think that the crux of any smart growth and livable community is that we have a mix of uses 14 and that includes the preservation of retail and commercial. So I would definitely support 15 initiation of what is being proposed here. 16 17 Vice-Chair Tuma: Okay, great. Just to round out the crowd I am very supportive of this as well. 18 My wife and I from time to time, because we live in South Palo Alto, we go over to California 19 Avenue in the evenings. There are a couple of restaurants at one end but the rest of it has 20 nothing going on and we talk about this from time to tinle. It is generally because they have a lot 21 of office or the types of retail that close down early. So it is not a very vibrant section of town. 22 We certainly don't want that sort of result. 23 24 MOTION PASSED (5-0-2-0, Commissioners Garber and Rosati absent) 25 26 So with that I am prepared to call the question and ask for a vote. All those in favor of the 27 motion, which was to initiate these changes say aye. (ayes) All those opposed? That passes 28 unanimously five to zero. 29 30 What I think would make the most sense here is to go down the line. If each Commissioner is 31 prepared to when you get to your comments and questions address the four items that are on 32 page 3, and if you don't have any comments or a position on any of those that is fine as well. 33 Then add to that any additional items that you want to see considered. I will try to keep track of 34 these and then we will do some quick polling in the end to make sure we give some clear 35 guidance to Staf£ 36 37 Mr. Larkin: Sorry to interrupt. You had asked me at one point to do the time checks and I was 38 just going to point out it is nine o'clock. I think you are well on track but there is one other itenl 39 tonight. 40 41 Vice-Chair Tuma: Right, thank you for that. That's great. We do have one other item and we 42 would need to sort of make a decision as to whether we would start that item after ten o'clock if 43 we don't think we can get through item three by ten. So Commissioner's thoughts, can we get 44 through all four of these items tonight and be done by eleven? Okay, very good point. So with 45 that let's go down the list here. I have in this order Commissioners Keller, Fineberg, Lippert, 46 and Holman, and then me if there is anything left. 47 48 Commissioner Keller: I guess I am next. So the first thing is that essentially we have an 49 anomaly. I guess there are a couple of anomalous situations. First of all we have a very deep Page 16 1 recession. It is interesting that the term depression came along because people were fearful of 2 calling the Great Depression a recession so they created a new term called a depression, which 3 turned out to be far worse. A little history for you. 4 5 So hopefully it is a big recession and not a depression this time. We also have the situation that 6 essentially what has happened over the last ten or 20 years is that retail rental rates have gone up 7 dramatically squeezing out things like bookstores, and essentially making it hard for nl0vie 8 theaters and other uses that provide a mix of uses Downtown. These rental rates have gone too 9 high and it may be tliat the desires of landlords/property owners for how much rent they should 10 charge are excessive and they need to recalibrate that to base market. 11 12 The reason I start offwith those comments is essentially if you charge a huge amount of money 13 you can keep a property open for six months. If somebody owned more than five percent of the 14 Downtown retail, which probably exists, there are probably a nurrlber of property owners that 15 own more than five percent of the retail Downtown. They could deliberately raise the prices on 16 their properties, keep their properties vacant, and trigger this situation. Thereby allow 17 themselves to get office space down there. Now I am not suggestion anybody would be as 18 nefarious as to do that but it essentially indicates that there is problem with our current 19 ordinance. Creating findings would go a long way towards reducing that but it seems to me that 20 one of the findings if we were to have findings should be that based on the vacancy and the rent 21 being asked in some sense is consistent with rents being chosen. 22 23 Now am I allowed to talk about specific properties as exemplary? 24 25 Mr. Williams: I think so as long as there is not any kind of permit in front of you for that 26 property. 27 28 Commissioner Keller: Great, thank you. so the first thing I am not going to mention a particular 29 property but there was a recent opening of a restaurant Downtown that replaced a restaurant that 30 closed. I am not going to mention which particular restaurant it is. I happen to go in there to eat 31 and asked the owner, so you are new here. This particular restaurant moved from an off 32 University Avenue location to a University Avenue location and I asked how is the rent 33 compared to the old place? The restaurateur basically mentioned that the rent is killing them and 34 he or she hopes that they will be able to increase business sufficient to cover that rent. So it is 35 pretty clear that rents are not being accommodated significantly in order to be able to accomplish 36 fuller occupancy of these units. 37 38 Similarly, Bob & Bob off of Downtown on High and Forest was forced from Downtown because 39 of the rents being too high. They relocated over to Los Altos on El Camino to essentially the 40 middle of nowhere if you will. That business failed in part because of that relocation. Instead of 41 lowering the rent, which could have been done to that owner and retail establishment, and 42 keeping that retail establishment the rent is too high. In fact, since Bob & Bob moved out which 43 I believe was over a year ago that location is still vacant. So instead of the owner receiving some 44 rent for that place, which would have been lower in order to be able to keep that establishment, 45 we have a rent that is for this location that is effectively zero because nobody's paying it. So I 46 think that is a consideration. 47 48 Vice-Chair Tuma: Commissioner Keller, if I may. We just collectively agreed we were going to 49 try to get through this item and the next item by eleven 0' clock. That gives us approximately ten Page 17 I minutes each to get through all the comments that are directly related to items that would or 2 wouldn't go in a potential modification of the ordinance. So if you stick to focusing on those 3 that would be great. 4 5 Commissioner Keller: I appreciate that. I think that that is important prefatory material for us to 6 really understand what the impact of vacancies are and how they can be caused and not caused. 7 8 I think that it would be useful to increase the vac~cy rate formula perhaps 20 percent with the 9 understanding that we would revisit this in the future. In any event we should create findings, 10 that is item one. 11 12 Item two I don't really understand the issue here because in some sense if you allow office use 13 regardless of the previous use I am not sure I understand that. So I just request that that 14 reasoning be clarified because it doesn't quite make sense to me. Do you want to respond to 15 that? 16 1 7 Ms. Cutler: The issue there is the distinction between the area that is in the core of Downtown 18 that on the map is in orange, those are the areas that are covered by the Ground Floor Combining 19 District, and that is where we have the five percent vacancy rate as part of the code., The 20 distinction that we were making in item number two is about all of the properties that are in 21 yellow which are in CD-C but do not have the ground floor overlay. Since those areas are 22 farther from the core there has been discussion that maybe a concentration of the retail uses 23 along the center of this core is more important, and that maybe the fringes are not as appropriate 24 for retail all the time. That we would strengthen the ground floor retail restrictions for that core, 25 the orange area in the Ground Floor Combining District, but maybe loosen them some for the 26 yellow area which is just the CD-C with no combining district. 27 28 Commissioner Keller: What restrictions do we currently have for the yellow area? 29 30 Ms. Cutler: They are very similar. The precise code is attached to your Staff Report. They do 31 not contain this five percent vacancy rate. 32 33 Ms. French: I was just going to add specifically on number two what we are trying to get at 34 there, the flexibility is right now if somebody were to go in there and it had been office and a 35 retailer wanted to come in and occupy that space our code dis-incents allowing that retail to 36 come in because we are going to forever hold them to keeping a retail use there. Getting some 37 flexibility would mean they could have a retail use come in there and then they could at some 38 point maybe go back to office. So that is the kind of flexibility as an example. 39 40 Commissioner Keller: Thank you. So this is something that is referred to as a ratchet in that 41 sometimes you can go one way but you can't go the other way. So essentially what you are 42 allowing is to go both ways. 43 44 Mr. Williams: Right. So the real difference is the Ground Floor Retail District requires retail on 45 the first floor, period. I mean a retail, restaurant, personal service type business. The CD-C 46 District in general doesn't require those uses. It allows office and some other uses on the first 47 floor as well except if you already have retail then you can't do anything else with it, like Amy 48 said. Then if something right now is an office use, it is vacated, there is a change for retail to 49 come in, I know there have been instances I have heard of where they ask if there is any Page 18 1 flexibility and they end up not leasing it for retail because they don't want to get boxed in to 2 where they can't convert it back to office in three years or so if the retail doesn't work out. So 3 that really sort of frees the retail ifit is there but ifit is not there already then it isn't bound the 4 way the Ground Floor Retail (GF) District is. 5 6 So this would look at that area and there are a wide range of options that we could look at as far 7 as either just taking away that requirement so you had the flexibility to do either one, or we 8 might define it in a specific way so maybe if it is at comers it would still be restricted to retail. 9 Maybe we take the GF District and we extend it up to certain areas where we think that there are 10 really viable retail pockets but other areas aren't restricted. So those are the kind of things we 11 would be looking at and coming back to you with recommendations on. 12 13 Commissioner Keller: Another thing you can consider is in terms of the findings is whether 14 there has historically been retail there, could be one of the findings to consider. That might be 15 another way of handling it. So in terms of that now I understand what number two is. 16 17 With respect to number three I just want to make sure that we don't have islands of retail 18 separated by office because that can be problematic. Even if you have a restaurant for example 19 there is the Tamarind Restaurant on University Avenue at the intersection of Tasso. If you 20 essentially make an island of that that may harm that restaurant if you don't have retail 21 continuing up through there. 22 23 With respect to number to four I do think it makes sense to think about limitation of restaurant 24 use. I think we have talked about that in the past. I realize that restaurants in some sense 25 collectively make an anchor to the Downtown hut there is another term for anchor, which is 26 something that makes something sink. If we have too many restaurants Downtown could sink in 27 the process of that and essentially become largely what Downtown Mountain View is which is a 28 place to eat and then leave, or go eat and then go to the Theater Works and essentially nobody 29 does anything else there as far as I can tell. 30 31 A couple of other quick comments. I am sympathetic with your issue that the use exception 32 being a limited duration in some sense is problematic. The issue is that leases might be aligned 33 with that use exception and you can make sure that the leases do not get renewed. People 34 typically amortize their tenant improvements along the lease duration. 35 36 Also with respect to office on the ground floor I observe that if you look at 18.30(C).020(a)(7), 37 which is Attachment C, it says entrance, lobby, or reception areas serving non-ground floor uses. 38 There appears to be no limitation to that. I would suggest that you consider a conditional use 39 permit to the extent that an entry, lobby, or reception area exceeds a certain square footage. For 40 example, the property on University Circle, if you understand what I mean by that, there is a new 41 building that went in there which is a facebook building and the entire ground floor is an entry, 42 lobby, or reception area for what used to be Bungee Travel that was a retail use. So by using this 43 exception that retail use was essentially converted into an office use. So I think that is a loophole 44 that should be covered by a ClTP since it is more than simply a certain square footage. 45 46 Finally, I would like to reiterate my comment earlier about the retail rental rate being somewhat 47 related to nlarket rate under some discretionary thing should be considered one of the fmdings so 48 that landlords can't charge excessive rental rates in order to obtain the six month vacancy that 49 they should charge market rates. If this brings down rental rates to the extent that we can Page 19 1 actually have new businesses thriving Downtown then we may get more of the mix of businesses 2 that we had ten or 15 years ago as opposed to the ones we have now, which are essentially . 3 restaurants and high-end retailers, so more people in Palo Alto would find it desirable to shop 4 there. 5 6 Vice-Chair Tuma: Commissioner Fineberg. 7 8 Commissioner Fineberg: I would like to start with a moments worth of prefatory comments. 9 The situation that we are seeing with redevelopment on University Avenue in my mind is more 10 complicated than simply a temporary economic downturn. Up until last September we had what 11 I call a lot of funny money in the economy. Money that was being used to develop properties 12 that were not viable, money that people were putting forward because there was no risk with the 13 development. The financial collapse that happened and subsequent reregulation that is coming 14 into play at the federal level is dramatically changing that landscape and that funny money at 15 least until we have our next colossal mess is gone. When we have properties on University 16 where landlords don't have tenants and landlords don't have lenders it is not the recession that is 17 causing it. It is simply not a viable redevelopment. That development is not going to happen in 18 six months. It is not going to happen in a year. They are going to have to have tenants. They 19 are going to have to have financing and the econonlies in the project are going to be completely 20 different. That is not Palo Alto process causing it. That is not residents causing it. It is not the 21 Staff. It is just how the world is now and it is going to change slightly in six months or two 22 years. 23 24 In order for developers, in order for property owners to plan they need a consistent set of 25 predictable conditions. Right now they know they can come to our Planning Director and with a 26 'vacancy rate in excess of five percent they can convert to offices. If offices pay rent in excess of 27 retail that is what they are going to plan on doing. They will run the numbers and if they can 28 make more money holding it vacant for six months, they will do that, take the short-term hit, and 29 then for however many more years they will have the increased revenue. So it is a simple 30 economic calculation that a landowner will do in his or her best interest. 31 32 So we have the option of changing the regulations that change the behaviors that change the 33 conditions that those landowners will use in making their decisions. On the first item I would be 34 curious to have more discussion on whether 15 to 20 percent is the correct amount to trigger an 35 exception process or whether no condition triggering that exception process would be a better 36 state. Should itsimply be an absolute it is GF that's that it will remain retail? I don't know what 37 the impacts of either path would be. Do we have two landowners that own 30 percent of 38 Downtown that could easily trigger it? Do we have such a disparate ownership that no one could 39 trigger a 15 or 20 percent vacancy rate? So we need to know what the concentration of 40 ownership is. 41 42 I would also wonder if we have no condition under which there can be a conversion to office, do 43 we then not need to have findings. I don't want to make it a simpler process just so it is a 44 simpler process but if we have it as an absolute condition that there be no exception we don't 45 have to go through the fine grain analysis of what are findings. If we want that flexibility to 46 allow exceptions when appropriate then those findings become critical and I would want input 47 from both the business community, Staff, and Commission in future discussions for what is 48 going to work. 49 Page 20 1 On the second point, thank you Staff for your comments because to be frank what was written in 2 the Staff Report I did not understand the intent of what the second item is and with the additional 3 comments from Staff it seems like a very reasonable incentive not just a giveaway. One question 4 with that is would there be wisdom in adding some kind of a starting date for when it would 5 become a two-way flow? So if it was retail prior to X date there is no converting to office so you 6 don't lose from you have now and that would not penalize people that made the right decisions 7 in the past. I think that is how that one would work. Then you won't lose the retail that you do 8 have in your CD-C. 9 10 On the third one I would want to get some information about, I am kind of trying to ask you to 11 predict the future, but is there any estimate of how many of those buildings in the CD-C would 12 convert from retail to office or raise rents on retail to drive retail out? I don't have any sense of 13 what those impacts might be. I would agree with previous comments that we don't want to tum 14 it into Swiss cheese. 15 16 On the fourth item I would be in favor of a mechanism to limit the number of restaurants. When 17 I go to Castro Street in Mountain View it is absolutely clear that it is a restaurant destination. 18 Our University corridor is trending in that same direction. I would also want to see some 19 discussion on if there are other categories of businesses. Do we want nlore nail salons and hair 20 shops? I don't what other and maybe off University on the side streets are there other categories 21 of businesses we are also seeing too many of? Would there be a way to make that something 22 that could change as distortions develop? And is there mechanism to build in that if there is a 23 distortion we could react quickly? That I think would be a good tool. That's it. 24 25 Vice-Chair Tuma: Thank you. Commissioner Lippert. 26 27 Commissioner Lippert: Well, the restrictions that were put on back in 2001 were based on the 28 dot.com bubble or pre-dot.com bubble. At that time there were really significant high tech 29 ventures that were poaching retail space and converting it into office space. That is why that was 30 implemented. I would gladly welcome those times back at this point. 31 32 The truth is that when it comes to point number one what is important is that we have a blend of 33 uses and mixes. That 15 percent, 20 percent, or five percent really doesn't mean very much. 34 What is important is in order to have a viable Downtown you need to have commercial office, 35 you need to have professional services, you need to have financial services, and you need to have 36 retail, and they all need to be able to work together. Having ground floor retail really makes our 37 Downtown vibrant and alive, and it makes it a livable, walkable, usable community. To take 38 retail space and convert it into more office space at a time when we have a vacancy in office 39 space just doesn't make any sense. We have a glut of office space, empty commercial office 40 space. I just don't see us having when the vacancy rate number trips being able to open up and 41 make more retail space available for office space how that really benefits us. What we really 42 need is a viable blend of retail, office space that is going to work and make the Downtown area 43 vibrant. 44 45 So in some ways I was listening to what Curtis said and I almost support the idea of just 46 forgetting about what that vacancy rate is completely and shoving it out the door, and saying 47 look ground floor in that area is retail, we need it. 48 Page 21 1 With regard to the second, allow offices on the ground floor of buildings. When you think about 2 the Downtown it isn't just University Avenue, it is the fingers of streets that come off of 3 University Avenue. In the tin Ie that I have been in Palo Alto we have seen how Emerson, the 4 Emerson corridor, has become another almost like intersection of Broad Street and Market where 5 we now have an annex down in the SOFA area, which is a viable retail district. So what I would 6 want to see I guess is University Avenue and at least the first block on each side of University 7 Avenue to be viable ground floor retail. What it does is begin to then expand the Downtown into 8 other areas and begins to create a more viable Downtown. So I would entertain definitely 9 looking at being able to expand and contract that boundary and looking at what that means. 10 11 With regard to differentiating between retail uses and restaurant uses I don't think so. I don't 12 have a fear of Downtown Palo Alto becoming like Castro Street. In fact, Castro Street has 13 benefited from Palo Alto. Book Buyers used to be in Downtown Palo Alto. Book Buyers is now 14 on Castro Street. They have been there the last ten years. That is one of my favorite bookstores. 15 I go to Castro Street to go browsing through used bookstores and CDs and whatever. I don't see 16 a differentiation between retail uses and restaurants. I think it is whatever the market brings that 17 makes us into a viable wonderful Downtown for being able to spend time. 18 19 Lastly, the only other thing that I really want to make a comment on, and now that it is on the 20 table looking at this are banks. Banks are great activity killers. What I mean by that is banks are 21 only open from nine to four. They generally in these days and times turn their backs on the 22 street. They want to be secure themselves so they are not watching the street. They are closing 23 themselves off from the street. My bank, which is Union Bank, has frosted their windows on one 24 whole side. It used be that you could stand in the bank and look out across the street and you 25 can't do that any more. Wells Fargo bank now has three branches on University Avenue. They 26 have their private services, they have taken over the bank on Cowper, and they also have the 27 other bank on Hamilton. How much market share does a bank need in order to remain viable? 28 All that it does is kill those blocks from after four o'clock and in the early morning hours. So if 29 anything I wouldn't limit restaurants I would limit banks maybe, financial institutions. So that is 30 my two cents. I look forward to looking at the initiation and having more substantive things to 31 bring back. 32 33 Vice-Chair Tuma: Great thanks. Commissioner Holman. 34 35 Commissioner Holman: Thank you. One quick nod to Commissioner Lippert. Bijou, Festival, 36 Biographic, Aquarius, Varsity, and Stanford those were the theaters here in the early 1980s. 37 38 Commissioner Lippert: Not to mention the one that used to be at EI Maghrib, Moroccan 39 restaurant. 40 41 Commissioner Holman: That's right. That may have been the Biographic I am not sure. At any 42 rate as to item number one I have been known to say in the past zone for what you want so I 43 appreciate Curtis's comment about not having a percentage but just make it a ground floor 44 requirement. Other Commissioners have commented to that effect too and I would support that. 45 I think to answer Commissioner Fineberg if I might I think would of course eliminate the need 46 for findings. 47 48 Allowing ground floor in the CD-C district outside the GF regardless of previous use I think that 49 is a possibility in combination with number three. Number three from my perspective there are Page 22 1 some areas where again akin to some of Commissioner Lippert's comments, I think there are 2 some areas were we ought to expand the GF and I think there are probably a couple of areas 3 where we ought to remove it. Alma has been mentioned as a location to remove it and I think 4 that is probably very likely. 5 6 Differentiating between retail use and restaurant use, as Curtis knows I have been concerned for 7 a long time about how much restaurant use we have Downtown and how it displaces other uses 8 long, long, long term. Because of the capital investment once a restaurant goes in it doesn't 9 convert back to other retail for nlany, many years. They also have large parking impacts, not the 10 highest retail sales return. There are a lot of good things about them but they also in too large a 11 proliferation they have some pretty significant negative impacts as well. 12 13 Commissioner Lippert did however mention something else I had in my notes, which was 14 putting limits on financial institutions. 15 16 I was interested in the business outreach because as I read the comments I didn't see any 17 comments that looked like they came from retailers. They looked like they came from property 18 owners, and maybe larger property owners. So I would be curious to know what the PAd had to 19 say and what individual business owners, if there was outreach to them, I would be interested in 20 knowing what they have to say going forward. Some of the things that I think we could do to 21 help sonle of these owners and businesses is we have needed I think for a long time to do 22 something to improve the process. I hear so many complaints of people who don't want to go 23 public because they don't want to literally, valid or not valid, basis or no basis, they don't want 24 to go public with their complaints of getting permits to open a new business because they are 25 worried that if they want to expand or do any other revisions to their businesses or expand that 26 this would be held against them. Businesses just go through arduous process, at least as it is 27 described to me, to get permits. That may seem a little disparate from this but it really isn't from 28 my way of seeing this because I think if we are going to add some restrictions I think we ought to 29 also look at what we can do to make life easier to after all attract more retail business which is 30 what this is all about anyway, attracting and retaining. So that is one. 31 32 Just a couple of other comments about this, again in these conversations with these businesses 33 what else can be done to support the businesses. I know recently there has been an allowance, 34 rather than businesses just doing it I think there has been a trial allowance maybe it is to allow 35 sandwich boards. That is my understanding anyway. So perhaps there are other things like that 36 that are no cost but that really help promote the businesses. If they have to present something 37 then it can be done in a well-designed fashion rather than things just popping up. 38 39 The other thing is permitting for events. I have also heard just kind of torturous processes that 40 people have to go through for that. The other thing I would be interested in looking at is those of 41 us up here and sitting at the table down there are well familiar with the advantages to 42 communities of local independent businesses. So perhaps there is something we can do to 43 promote or incentivize the local independent businesses. They tend to stay longer, put more 44 back into the community, more likely to stay because of their investment in the comnlunity, and 45 they are more likely to stay in ups and downs in an economy. 46 47 While we are doing this if it is not going to delay things there have been issues that have come 48 up in the past having to do with hours of operation. One particular case on Ramona between 49 University and Hamilton for instance that I can recall they satisfy the literal definition of retail Page 23 1 but their hours of operation were very, very limited and then by appointment. So it really caused 2 a break in that retail synergy that we have long talked about. 3 4 The other thing again, if this isn't going too far and doesn't cause delays, is window coverings 5 and type of glass because that is another issue that has come up over time. Transparency of the 6 window materials is important if it is going to be retail and again keep people going from shop to 7 shop to shop. 8 9 It is important to have office. You do need a nlix but we have two, three, four story buildings 10 and offices can be located other than on the ground floor. 11 12 A question about PCs. Is it possible to initiate changes to PCs that might not have ground floor 13 retail? Again, not saying that it would have to change immediately but such that if the use ever 14 changed that it would have to convert to retail. We do have some PCs in this area. 15 16 Mr. Larkin: I think that would probably be possible. You can rezone it so that if it redeveloped 17 it would have to redevelop as ground floor retail. 18 19 Commissioner Holman: Redevelop is one thing. I am not talking about redevelopment I am 20 talking about a change of use. 21 22 Mr. Larkin: Or otherwise you could amortize the zoning and require them to -well, without a 23 specific example it is difficult. But you could amortize it and make sure they get full use out it 24 and after a period of years they would be required to change the use. I don't think you can do it, 25 pass the zoning ordinance to say tomorrow now you are ground floor retail. 26 27 Commissioner Holman: That was not what I was after. 28 29 Mr. Larkin: Or tomorrow if they change tenants. You would have to amortize that use. 30 31 Commissioner Holman: Okay, Staff if you could come back with some information about that 32 maybe perhaps which locations that might apply to. 33 34 The other thing again, I alnlost hate to mention this but I will-I won't. I think I will stop there. 35 It is just one other thing which is signage. I think there is something that in hard economic times 36 we tend to look at how we can cut back on expenditures and attract new dollars or generate new 37 dollars and sometimes I think we get in kind of a gather the wagons around and kind of restrict 38 our thinking. I think there are some opportunities that might exist where the City could spend 39 perhaps a little bit of money to help make the retail environment more attractive. Clean 40 sidewalks are one thing I would absolutely mention. Doing something about some of those 41 things are an expenditure of funds that I think would be helpful to attract a long-term financial 42 benefit to everybody involved. So I will stop there. Thank you. 43 44 Vice-Chair Tuma: Okay. So before I go through the four items one of the things that is going to 45 be extremely important when this comes back is a fair level of detail on the outreach to the 46 business community. I would offer by way of suggestion things like -well first of all, not just 47 going to the usual suspects but rather making sure that we are talking to some of the smaller 48 building owners, we are talking to the Chamber of Commerce, we are talking to the Downtown 49 Business Association, a real spectrum, and offering a variety of opportunities or avenues for Page 24 1 input from those folks. Not just hey let us know, but holding some open forums for discussion 2 and things like that. So what is going to be real important is sort of the level of outreach and the 3 feedback from that. Everybody who is involved in this and who would be impacted by this 4 because I think that collective wisdom is I think very, very important to making sure we are 5 making the right decisions here. I think we all have the same goals in mind but these are people 6 that this is what they do every day. So I think we need to make sure we get that feedback. 7 8 That being said, on items one through four I anl supportive of looking at all of those. I think it is 9 all-important. Those are all important discussions to have. On item one I am not necessary open 10 or closed to it being zero as opposed to having some threshold. I think that is one of the key 11 issues for me in terms of input from the community. I want to make sure we don't have some 12 unintended consequence of doing that. 13 14 With respe,ct to the other three, I think having flexibility in the CD-C(P) District makes a lot of 15 sense. I think we definitely should reexanune the boundaries. I am supportive of differentiating 16 between retail use and restaurant use. 17 18 I did have a question. On the map there are a series of, I think there are five or six buildings on 19 University Avenue that are white. In other words they don't appear to be part of this district. Is 20 there some reason? Should those be reexanlined? Maybe the existing uses are not necessarily 21 but should that be looked at is the question for Staff 22 23 Ms. Cutler: Those locations that are not colored in by the orange or the yellow but are kind of 24 within that area, most of those are Planned Community, PC, Districts so they were developed 25 with individual zoning regulations, and therefore are not covered by these zoning designations. 26 Or they are Public Facilities. So they are plazas and Downtown parking lots, etc. 27 28 Vice-Chair Tuma: Okay. So if it is a parking lot and if at some point that parking lot was 29 converted to a building in that process would we look at whether it should be included? Is that 30 how that would work as a matter of course? 31 32 Mr. Williams: Well, they are generally right now public parking lots. So they are PF zoning. 33 So to be developed as private developments they would require a zoning change and in that 34 zoning change if it were to a PC you could consider the specific use otherwise it would be 35 probably to a CD-C or GF zoning that would require, especially ifit is on University Avenue, it 36 would be GF. 37 38 Vice-Chair Tuma: Okay. One of the other things that I think is worth looking at or exploring in 39 this process is if we do go down a route of continuing to have a trigger, I don't know whether we 40 actually would put it in the code or not, but somehow an opportunity to reexamine this in three to 41 five years or some sort of timeframe like that. Where if the economy significantly changes, not 42 if someone just thinks about it, but we actually have a trigger that says we will look at this again 43 in some period of time to make sure that it is doing what we want it to do. So again not to be left 44 to the memories of those involved but rather actually make it part of the ordinance that in sonle 45 relevant amount of time we would look at this again. I think that is worth discussing as to 46 whether that would be in there or not. 47 48 It looks like we have a few more comments. Let's go through the rest of the comments. I think 49 Commissioner Fineberg was first. Page 25 1 2 Commissioner Fineberg: On the fourth point, and I appreciate this extra round of comments 3 because sometimes other Commissioner's comments spur additional thoughts. On the fourth 4 point would it be worthwhile approaching the idea of differentiating restaurant use by looking at 5 it in terms of a regulation of single purpose uses? So that when lenders for instance loan money 6 to businesses for tenant improvements they have a different set of criteria when the tenant 7 improvement is a single purpose use, nleaning a restaurant. That may be a way to approach how 8 to regulate rather than as a class of businesses. Banks might fall under that too if they are a kind 9 of a bank that builds a vault. The cash vault tends to be very single purpose use. You are either 10 going to be cash or jewelry or it is going to be a really cool conference room with thick walls. 11 12 The idea of regulating banks made me think about what is a bank? It used to be we could all 13 define what a bank was and it was a place that people went in with cash, there were teller 14 windows, and now we have things that are called banks that are really offices where you go in 15 and get mortgage paperwork, or offices where you meet with an investment broker and you are 16 trading securities over the internet. They are really office uses that are owned by the institution 17 that is legally registered as a bank. So is there a way to look at the actual use in the space rather 18 than what is the form of ownership? The might trigger a way to reduce the amount of office 19 space that is owned by banks that are not behaving like a bank. So kind of looking at what the 20 purpose of the business is rather than the form of ownership, and then what the build out is. I 21 don't know whether you would control that through the regulations in zoning or at the place 22 where you issue the building permit for the single purpose uses. I will leave that to you to 23 explore. Thanks. 24 25 Vice-Chair Tuma: Commissioner Lippert. 26 27 Commissioner Lippert: Just a couple more comments. We have also lost a number of real 28 important services. The Downtown really doesn't have a viable copy shop. I know that there is 29 one. I use it when I have to but we don't have a Kinko's. I have to drive to Menlo Park. I have 30 to drive to California Avenue for Kinko' s. We used to have three or four copy shops in the 31 Downtown area. We used to have a cobbler in the Downtown area. So we have lost a lot of 32 those, they are not really retail they are personal services. So that would be something that I 33 would be interested in seeing that we try to retain or preserve. 34 35 Then with regard to theaters I used to go to Century 16 but now I go to Redwood City because I 36 can take the train up to Redwood City and then I can walk around, and I can eat dinner, and then 37 I can go to a movie in Redwood City. If I decide to drive because there are a lot of us we get 38 free parking. The preservation of our theaters, they are really puny, but they are inlportant art 39 house theaters. In the preservation of theaters, I hate to say this, but if there is some way to have 40 some sort of a TDR program where rather than seeing them get converted into bookstores or 41 some other retail use they were preserved and even added onto and get bonus floor area, that 42 would be something I think would be a positive thing. 43 44 Vice-Chair Tuma: Commissioner Keller. 45 46 Commissioner Keller: Thank you. A couple of comments. I am in support of the idea of 47 mandatory ground floor without exception. The way to handle exceptions could be by rezoning 48 it to non-ground floor. We have the ability to do that so that might be the best way of doing that 49 process if you will. Page 26 1 2 With respect to a trigger for CD-C for number two perhaps there might be findings in terms of 3 dealing with that so that you have a little bit more discretion in terms of that and also give some 4 more direction in that issue. 5 6 We might think in terms of density for particular uses like restaurants and such. I think that there 7 is a difference between a bank that behaves like a bank, although sonle people may have some 8 criticism, the Wells Fargo Bank on Hamilton and Waverley behaves like a bank. People walk in 9 there, they walk out, they see tellers and such. The Union Bank on Waverley and University 10 behaves like a bank. The Wells Fargo on University and Bryant does not behave like a bank it is 11 really an office. It should be treated as an office and we should make that distinction. I think the 12 Fidelity on Ramona and University doesn't really behave like a bank either. First of all it is a 13 brokerage house. So that should be more considered office. I don't see people have much of an 14 issue going to the second floor. So I would be in favor of amortizing those uses out to encourage 15 ground floor retail in both of those locations. I am not nearly as concerned with the E*Trade that 16 is on University Avenue between High and Alma because that is not necessarily that viable a 1 7 location for retail. It is sort of on the fringe. 18 19 I am wondering with the future transitions of what is going on with high-speed rail whether or 20 not there is a train station there for high-speed rail, what transitions are happening there. I think 21 that may make major transitions to what happens on Alma Street. So I would be leery of making 22 major changes to the zoning on Alma Street away from retail depending on what happens there. 23 If for example some of the proposal for under-grounding high-speed rail involve, even if we 24 don't have a station, involve more intensity of uses that may make Alma Street more viable. So I 25 want us to consider that more carefully. 26 27 I am in support of Commissioner Lippert's suggestion of theater TDR. 28 29 Vice-Chair Tuma: Okay. Commissioner Holman. 30 31 Commissioner Holman: I have just a couple of things. The parking lots, I think they are all 32 public parking lots but the question is could we go ahead and extend for instance the GF overlay 33 on them even though they are probably zoned PF. Could we have a PF FG? The reason is 34 because I guess I have been around long enough that people come up with very clever ways to 35 get around requirements. I think if we had a GF overlay the intention would be very, very clear 36 as to what the purpose is should they ever be rezoned. So if Staff could come back with 37 something about that. 38 39 I am not sure of the best way to preserve the theaters is TDRs but I think other communities do 40 look at ways to preserve their theaters. So I am also interested in that and thank Commissioner 41 Lippert for bringing that up. 42 43 Then in the near distant future we are also going to be looking at basements, which would 44 include the Downtown area in basements. Do you want us to keep those issues separate or 45 combine? Keep them separate? We are talking about ground floor here. So keep the issues 46 separate I would presume. 47 48 Mr. Williams: I would think so, yes. 49 Page 27 1 Commissioner Holman: Okay. That's it. Thank you. 2 3 Vice-Chair Tuma: Okay. I am going to take a stab instead of doing everything by straw poll I 4 am going to take a stab at summarizing where I think the Commissioners are on various items. If 5 I get it wrong then tell me I get it wrong. I think we can get the bulk of this out because there 6 seems to be quite a bit of consensus. 7 8 So here is what I heard. On items one through three the unanimous consensus of the 9 Commission was that all three of those items should be investigated and potentially part of an 10 ordinance that comes back. On item four what I heard was with the exception of Commissioner 11 Lippert who is not in favor of differentiating the others were. I also heard that the Commission 12 would like Staff to look at whether there should be other categories of businesses to limit 13 including banks, and that seemed to be unanimous across the Commission. Then the other thing 14 that I heard was that there should be an examination of theater preservation efforts, whether that 15 is TDR or otherwise. I hadn't comnlented on that and I would be in favor of it. The only other 16 Commissioner I think who had not commented on it would be Commissioner Fineberg who is 17 indicating to me she would also be supportive. Did I get that part right so far, Commissioners? 18 Commissioner Holman. 19 20 Commissioner Holman: I anl not sure if the comment was specifically intended to be banks or 21 fmancial institutions, because there is a difference. 22 23 Vice-Chair Tuma: Financial institutions, right, good point. I think the consensus was other 24 categories including but not limited to financial institutions. So that being said what I heard 25 beyond that were a host of other ideas, which I saw Staff diligently taking notes on. if there are 26 any other suggestions that Commissioners made that they would like us to straw poll on I am 27 happy to do that or if there is any other issues that Staff would like us to straw poll on I am 28 happy to do that. Otherwise, you could simply take the comments that have been made on board 29 as things to look at. Commissioners, any need to straw poll on specific items? Commissioner 30 Keller. 31 32 Commissioner Keller: I think it might be worthwhile straw polling on the idea of mandatory 33 ground floor versus a threshold trigger. 34 35 Vice-Chair Tuma: Okay. Don't want to run afoul of any procedures here but I assume that we 36 do this simply by a show of hands and then I read that into the record. 37 38 Mr. Larkin: I think that is fine as long as you are recognizing that you are not committing 39 yourselves to anything. Staffwill come back with a recommendation and Commissioners are 40 free to change their minds because it is a straw poll and not a vote. 41 42 Vice-Chair Tuma: Okay. So I guess the Commissioners who would favor essentially a 43 prohibition on anything other than ground floor retail. 44 45 Mr. Larkin: It is really in favor of exploring the concept because there still needs to be outreach. 46 47 Vice-Chair Tuma: Thanks for that clarification. So by a show of hands those that would support 48 basically a prohibition on anything other than ground floor retail. 49 Page 28 1 Mr. Williams: So elinlinating the threshold. 2 3 Vice-Chair Tuma: Better said, eliminating the threshold. Commissioner Lippert. 4 5 Commissioner Lippert: Just a clarification on that. That would also include personal services as 6 well, correct? 7 8 Mr. Williams: Personal services are allowed like retail is allowed so that would be allowed still. 9 So this is essentially prohibiting the threshold for office. 10 11 Vice-Chair Tuma: Okay. Commissioner Keller. 12 13 Commissioner Keller: I think the way to think about it is essentially eliminating the exception 14 process independent of vacancy rate. 15 16 Vice-Chair Tuma: Okay. Commissioner Fineberg. 17 18 Commissioner Fineberg: This is just that we would be in favor of exploring this process. 19 20 Vice-Chair Tuma: They are going to explore it either way. I think the direction was they are 21 going to explore the various different options but whether there is more of a preference towards 22 essentially eliminating the threshold. So those who would be in favor of that conceptually raise 23 their hands. That is Commissioners Lippert, Fineberg, Holman -that would be four 24 Commissioners in favor of that and one opposed. 25 26 Is there anything else that we should straw poll on before we close this item? Commissioner 27 Holman. 28 29 Commissioner Holman: Just a clarification. Tonight's Chair did a nice job of encapsulating 30 those things that there were numerous comments on. Some of us make other comments about 31 other things that people didn't comment on. Will Staff come back with responses and 32 investigation of those additional comments, like for instance local independent business 33 incentive or promotion? 34 35 Mr. Williams: We will definitely look at all of those. I am not saying we will have any -some 36 of them I think are ones that probably are outside the scope of being able to do something 37 quickly on and we will let you know that. Others we will probably be able to handle. So we will 38 look at all of them and let you know why we did or did not address them. 39 40 Commissioner Holman: Appreciate that thank you. 41 42 Vice-Chair Tuma: Okay. Commissioner Keller, one last comment before we go on? 43 44 Commissioner Keller: Yes. Two other issues. I am assuming we don't need a straw poll for the 45 issue of whether there should be findings for item two that Staff raised. You will just consider 46 that and that is not the kind of thing we need to go into. 47 Page 29 1 I am wondering whether we need to straw poll or not the issue of the potential for amortization 2 out from uses that are not retail essentially on University Avenue or whether that is something 3 that we shouldn't weigh in on at this point. 4 5 Mr. Larkin: That is outside the scope of what we are doing tonight. So that requires separate 6 notice so you should not be straw polling on that. 7 8 Commissioner Keller: Okay, thank you. 9 10 Vice-Chair Tunla: Okay. With that we will close item three and move onto item four. Page 30 Planning & Transportation Commission September 23,2009 Item 1: Questions from Commissioner Keller: ATTACHMENT I 1. Instead of deleting 18.18.060(1)(1), could a CUP be used to temporarily allow non- retail uses, so as not to lose long-standing retail outside the (GF) district? (There is successful retail on Emerson between Hamilton and Forest that wouldn't be protected otherwise. A Conditional Use Permit (CUP) may be an option, but the ClTP process provides a lack of certainty to the potential lessee, which could be problematic, and CUPs are not tied to a specific time period. They may require review, but do not expire, so they could not be used to temporarily allow office. There are many examples in the periphery of downtown that show that successful retail will remain even when not required to do so. Staff is recommending for those locations where retail is an important part of the City's vision for downtown that the GF zone be extended. lfthe Commission feels that the block of Emerson between Hamilton and Forest should be included then that could be discussed. Planning & Transportation Con1IDission September 23,2009 Item 1: Questions from Commissioner Martinez: 1. The Downtown vacancy rate has been stated to be 10 -15%. That approaches 1 in 7 properties. Are those vacancy rates including all rentals downtown, including offices and non-retail and space above the groundfloor? The formal calculation of vacancy rate for 2009 has not yet been calculated, but staff estimates it to be at approximately 10% for the total ground floor area ( square footage) within the Ground Floor (GF) Combining District, regardless of current or past use. Space above the ground floor is not included. 2. I am trying to understand the magnitude of the problem. How many non-conforming ground floor offices exist in the Downtown area under consideration? How much has that number increased in the last year? The Use Exception allowed when the vacancy rate rises above 5% has not yet been used within the downtown GF Combining District, so there has been no increase in the last year. The calculation is prepared by the City in the fall of each year and though it is estimated to be above 5% at this time, no Use Exception may be requested until the official count has been completed and reported to City Council. Additionally, a Use Exception would only be allowed at that time if there is a space that has been vacant and available for at least 6 months. The problem is that, if the vacancy rate kicks in, staff will receive requests for conversions to office, and it may be very difficult to then require reversion to retail when the economy improves. Staff has received at least two inquiries regarding potential conversions. 3. Is there any distinction among Planning's definition offinancial services'? For example, are Chase and Wells Fargo, Fidelity, and American Express and E*TRADE all lumped into this category? No, there is not a particular distinction in the definition, which states that 'financial services' means a use providing financial services to individuals, firms, or other entities. The term "financial service" includes banks, savings and loan institutions, loan and lending institutions, credit unions and similar services. Within the GF COITlbining District this use would only be allowed with an application for a Conditional Use Permit. The Use Permit process allows staff to distinguish between each type of financial service relative to its appropriateness as a pedestrian-oriented use. 4. Planning's meetings with Downtown business and property owners unfortunately weren't well attended. Are there any documents that provide more insight into how businesses and property owners are being affected by the unprecedented vacancies and ground floor offices? The outreach meetings held by staffwere publicized with notice cards sent to all property owners for properties within the CD-C and (GF) districts and to all business owners whose contact information was taken from the most recent membership of the downtown business improvement district. Staff also attended meetings of the Chamber of Commerce and Downtown Business Improvement District to discuss these issues. These two meetings had approximately 12 and 6 attendees, respectively, some of whom were not in attendance at the outreach meetings at City Hall. Attendees of these City Hall meetings included some representatives from the Downtown Business Improvement District, the Chamber of Commerce, as well as large and small property owners, and multiple local business owners. The following people signed in to one or more of these City Hall meetings: RoxyRapp John McNellis Sherry Bij an Bruce Barry Cornelia Pendleton Don Douglas Chop Keenan Anne Senti-Willis Ron Nunan Sam Arsan Ed Hoffacken Annie Nunan Jon Goldman Faith Bell Jim Nunan Jim Thoits Leilani Merrill Rick Barry Fred Thoits Joyce Yamagina Phyllis Munsey Jim Baer Jeff Selzer Abraham Khalil Attached you will find a copy of the handout provided at these meetings which included a list of questions asked of these attendees in order to receive feedback and input into the development of the ordinance revisions proposed by staff. 5. There are acceptable GF uses that are quasi-offices, such as travel agents. Is there a rule of thumb that it's retail if it's open to the public, and it's offices if has little or no foot traffic? The definitions (PAMC 18.04.030) of retail services (definition (125)) and offices (definitions (6), (61), (95), and (116)) provide guidance to staff on this issue, and include many examples that show the intent of the use categories. For instance, "Retail service" means a use engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use. The definition then goes on to list the types of items that might be sold and a few specific types of retail stores. When an unusual use is presented that is not specifically included in one or the other definition staff will discuss which use category it most closely resembles and where it might best meet the intent of the zoning district. In these cases the amount of foot traffic would likely be an element considered. In addition there are other uses beyond retail which are allowed, including "personal service" which means a use providing services of a personal convenience nature, and cleaning, repair or sales incidental thereto. This definition also includes a list of example uses, including beauty salons, copying services, film processing, art and music studios. Downtown Retail Vitality and Protection August 25, 2009 Purpose Statement: To Enhance and Protect Downtown Retail Vitality Through Modified Ground Floor Retail Regulations. Problem Statement: Existing regulations may allow conversion of ground floor retail space in the downtown core with vacancies in excess of 5%, possibly to the detriment of the vitality of retail throughout the downtown. Also, preserving seemingly marginal retail sites on the perimeter of downtown may detract from the retail core and/or result in long tenn vacancies. Potential Changes: 1. Should the vacancy rate required for use exception request to allow ground floor office in Ground Floor (GF) combining district be increased (from its current 5%), or should the use exception process be removed completely? 2. Should the restrictions in the Commercial Downtown Community (CD-C) district outside of the GF zone be revised to allow office space where retail currently exists? 3. Should the GF district boundaries be revised? If so, what areas should be added to the GF district, and which should be removed? 4. Are there certain uses that should be limited in quantity in the downtown core? Restaurants and financial institutions are two that have been discussed. If so, what limits might be set?