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HomeMy WebLinkAbout2018-02-14 Planning & transportation commission Agenda PacketAMENDED _______________________ 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. Planning & Transportation Commission Regular Meeting Agenda: February 14, 2018 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 Directors Report, Meeting Schedule and Assignments Study Session Public Comment is Permitted. Five (5) minutes per speaker.1,3 2. Update on the City Council's Discussion of the Planning and Community Environment's Housing Work Plan. 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 3. PUBLIC HEARING: Recommend that the City Council Adopt an Ordinance Amending Palo Alto Municipal Code (PAMC) Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) to Add a New Section Imposing an Annual Office Limit and Setting Forth Related Regulations, and to Repeal the Respective Regulations from Chapter 18.85 (Interim Zoning Ordinances). The Proposed Ordinance will perpetuate the existing annual limit of 50,000 square feet of new office/R&D development per year with modifications regarding the review process, unallocated area rollover provisions, and exemptions as discussed by the City Council on September 5, 2017. CEQA: This Ordinance is within the scope of the Comprehensive Plan Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council AMENDED _______________________ 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. Resolution Nos. 9720 and 9721. For More Information, Please Contact Clare Campbell at clare.campbell@cityofpaloalto.org. (Continued from January 31, 2018) 4.PUBLIC HEARING: Recommendation to the City Council Regarding the Adoption of an Ordinance Amending Palo Alto Municipal Code (PAMC) Title 18 (Zoning) to Add a New Chapter 18.30(K) (Affordable Housing Combining District) to Promote the Development of 100% Affordable Housing Projects Located Within One-Half Mile of a Major Transit Stop or High-Quality Transit Corridor, by Providing Flexible Development Standards and Modifying the Uses Allowed in the Commercial Districts and Subdistricts. CEQA: This Ordinance is Within the Scope of the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution Nos. 9720 and 9721. For More Information Contact Graham Owen at Graham.Owen@cityofpaloalto.org. Approval of Minutes Public Comment is Permitted. Five (5) minutes per speaker.1,3 5.January 10, 2018 Draft Planning & Transportation Commission Meeting Minutes Committee Items Commissioner Questions, Comments, Announcements or Future Agenda Items Adjournment January 10, 2018 Draft Meeting Minutes AMENDED _______________________ 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 Ed Lauing Vice Chair Susan Monk Commissioner Michael Alcheck Commissioner Przemek Gardias Commissioner William Riggs Commissioner Doria Summa Commissioner Asher Waldfogel 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 two Tuesdays 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 # 8785) Report Type: City Official Reports Meeting Date: 2/14/2018 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: City Official Report Title: Assistant Directors 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:  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. Attachments:  Attachment A: February 14, 2018 PTC Meeting Schedule & Assignments (DOCX) Draft Planning & Transportation Commission 2018 Meeting Schedule & Assignments 2018 Schedule Meeting Dates Time Location Status Planned Absences 1/10/2018 6:00 PM Council Chambers Regular Riggs, Waldfogel 1/17/2018 6:00 PM Council Chambers Special 1/31/2018 6:00 PM Council Chambers Regular 2/14/2018 6:00 PM Council Chambers Regular 2/28/2018 6:00 PM Council Chambers Regular 3/14/2018 6:00 PM Council Chambers Regular 3/28/2018 6:00 PM Council Chambers Regular 4/11/2018 6:00 PM Council Chambers Regular 4/25/2018 6:00 PM Council Chambers Regular 5/09/2018 6:00 PM Council Chambers Regular Riggs 5/30/2018 6:00PM Council Chambers Regular 6/13/2018 6:00 PM Council Chambers Regular Riggs 6/27/2018 6:00 PM Council Chambers Regular 7/11/2018 6:00 PM Council Chambers Regular 7/25/2018 6:00 PM Council Chambers Regular 8/08/2018 6:00 PM Council Chambers Regular 8/29/2018 6:00 PM Council Chambers Regular 9/12/2018 6:00 PM Council Chambers Regular 9/26/2018 6:00 PM Council Chambers Regular 10/10/2018 6:00 PM Council Chambers Regular 10/31/2018 6:00 PM Council Chambers Regular Riggs 11/14/2018 6:00 PM Council Chambers Regular 11/28/2018 6:00 PM Council Chambers Regular 12/12/2018 6:00 PM Council Chambers Regular 12/26/2018 6:00 PM Council Chambers CANCELLED 2018 Assignments - Council Representation (primary/backup) January February March April May June Ed Lauing Susan Monk Doria Summa Przemek Gardias Michael Alcheck Billy Riggs Asher Waldfogel Michael Alcheck Przemek Gardias Susan Monk Ed Lauing Doria Summa July August September October November December Asher Waldfogel Ed Lauing Przemek Gardias Susan Monk Michael Alcheck Asher Waldfogel Billy Riggs Michael Alchek Asher Waldfogel Doria Summa Przemek Gardias Ed Lauing Subcommittees Draft Planning & Transportation Commission 2018 Tentative Future Agenda February 7, 2018, 2018, 2018 Draft-All Dates and Topics Subject to Change The Following Items are Tentative and Subject to Change: Meeting Dates Topics February 28, 2018  Housing Element Update  Study Session on Traffic Safety and Operations Annual Report 2017 March 14, 2018  ADU Code Update March 28, 2018  Study Session: StreetLight Data Trip Visualization Tool Planning & Transportation Commission Staff Report (ID # 8955) Report Type: Study Session Meeting Date: 2/14/2018 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: PCE Housing Work Plan Title: Update on the City Council's Discussion of the Planning and Community Environment's Housing Work Plan. From: Hillary Gitelman Recommendation Staff recommends the Planning and Transportation Commission (PTC) take the following action(s): 1. Receive report. Background The City Council is reviewing a draft Housing Work Plan for the 2018 – 2019 Calendar year. The PTC previously received a copy of the draft housing plan. The City Council initiated and continued the discussion from February 5th to February 12th. Planning staff will update the PTC of the Council’s action and any changes to the draft housing plan. The City Council report from February 5th is available online: https://www.cityofpaloalto.org/civicax/filebank/documents/63054 Planning & Transportation Commission Staff Report (ID # 8926) Report Type: Action Items Meeting Date: 2/14/2018 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: Annual Office Limit - Replacement Ordinance Title: PUBLIC HEARING: Recommend that the City Council Adopt an Ordinance Amending Palo Alto Municipal Code (PAMC) Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) to Add a New Section Imposing an Annual Office Limit and Setting Forth Related Regulations, and to Repeal the Respective Regulations from Chapter 18.85 (Interim Zoning Ordinances). The Proposed Ordinance will perpetuate the existing annual limit of 50,000 square feet of new office/R&D development per year with modifications regarding the review process, unallocated area rollover provisions, and exemptions as discussed by the City Council on September 5, 2017. CEQA: This Ordinance is within the scope of the Comprehensive Plan Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council Resolution Nos. 9720 and 9721. For More Information, Please Contact Clare Campbell at clare.campbell@cityofpaloalto.org. (Continued from January 31, 2018) From: Hillary Gitelman Recommendation Staff recommends that the Planning and Transportation Commission (PTC) recommend the City Council adopt an ordinance (Attachment A) amending the Palo Alto Municipal Code to perpetuate the existing Annual Office Limit (AOL) regulations and make adjustments requested by the City Council, and find the action within the scope of the Comprehensive Plan EIR certified on November 13, 2017. Executive Summary City of Palo Alto Planning & Community Environment Department Page 2 The City of Palo Alto’s annual office limit regulations were adopted in September 2015 in an attempt to moderate the pace of office/R&D development in the fastest changing areas of the City (Council report #6045, http://www.cityofpaloalto.org/civicax/filebank/documents/48971 ). The regulations were originally adopted as an interim ordinance to expire in November 2017. These regulations were extended to a June 30, 2018 expiration date to align with the end of the fiscal year and allow for preparation of replacement ordinance. As part of this work effort, staff met with both the Planning and Transportation Commission (PTC) and City Council to get feedback and direction for the replacement Annual Office Limit (AOL) regulations. The Council direction provided on September 5, 2017, informed by the PTC’s input, has guided the proposed revisions shown in the draft ordinance (Attachment A). Background In the summer of 2014, as part of a discussion on the Comprehensive Plan update, the community expressed concern that the then-current Comprehensive Plan’s approach to growth management (i.e. an overall “cap” on non-residential development) had not been effective at moderating the pace of growth and development in the robust economic recovery following the great recession. This growth, in turn, had several impacts on Palo Alto residents, including traffic congestion/delay, parking demand, increased housing costs, and more. Based on these early communications, City staff began developing a growth management policy that moderated or metered the rate of development, rather than the overall amount of development in the City. Over the course of six meetings from January through June of 2015, the City Council discussed the concept of limiting the pace of new office/R&D development, which resulted in the adoption of the Annual Office Limit (AOL) interim ordinance in September 2015. Interim Ordinance The Council adopted interim Ordinance #53571 to establish an annual limit on new office/R&D development in the areas of the City experiencing the most rapid change.2 The ordinance applied to office development in fiscal years 2016 and 2017, established applicable land uses, designated the commercial areas affected, identified development exemptions, and outlined other procedural items. The Council also approved a review process for proposals once the 50,000 sq. ft. limit was reached. The ordinance was to be in effect for a limited duration, until November 26, 2017, to pilot the new interim procedures, and the results of which would then help guide in the refinement of the future regulations. In September 2017, Council adopted Ordinance #54173 to extend the existing AOL regulations until the end of fiscal year 2018 (June 30, 2018). This additional time was needed to prepare and bring forward an amended ordinance. AOL Project Activity 1 Ordinance #5357: https://cityofpaloalto.org/civicax/filebank/documents/51037 2 09/21/2015 City Council Staff Report #6045: https://www.cityofpaloalto.org/civicax/filebank/documents/48971 3 Ordinance #5417: https://cityofpaloalto.org/civicax/filebank/documents/61686 City of Palo Alto Planning & Community Environment Department Page 3 Subsequent to the implementation of the AOL ordinance, there has not been any significant office development proposed in the ordinance-affected areas. Although the time period has been relatively short, it appears that the interim ordinance has reduced the amount of applications for net new office projects. A list of the AOL applicable projects is provided in Attachment D. The first round of analysis for qualifying AOL projects was in March 2016 and the 50,000 sq. ft. limit was not exceeded; there were three projects proposed totaling 40,863 sq. ft. In March 2017, the 50,000 sq. ft. threshold was again not exceeded since there were no qualifying office projects ready for approval. For March 2018, there are three projects on file totaling 16,790 sq. ft. of new office development that may potentially be ready for approval. Discussion On March 29, 2017, the PTC conducted a Study Session4 to provide comments to staff regarding future amendments to the AOL regulations. There were a range of comments provided and those were summarized and forwarded to Council for consideration during their Study Session review. Some comments provided by members of the PTC included not allowing for small office projects to be exempt; include the Stanford Research Park in the applicable affected boundary; and, allow for rollover of unallocated area. The PTC’s summarized comments are provided in the attached Council staff report #8234 (Attachment G, pages 6-7) and detailed in the PTC’s meeting minutes (Attachment I). City Council conducted a Study Session on September 5, 2017 and provided direction on the key components of the AOL regulations, which are provided below. The Council report and verbatim minutes are also attached for reference. 1. Areas Subject to the Annual Office Limit The City Council directed the ordinance apply to Downtown, California Avenue and El Camino Real corridor. This boundary is unchanged from the interim regulations and a map showing this boundary is provided in Attachment C. The Council considered but rejected expanding the boundary citywide or to the Stanford Research Park. 2. Square Footage Limit The City Council directed staff to use a 50,000 square foot (sf) threshold for the annual limit for office development, based upon review of the VTA’s Congestion Management Program (CMP) office/R&D development data spanning 2001 through 2015. From 2001 through 2017, the CMP data shows there were six years when office/R&D development in the commercial districts affected by the interim ordinance exceeded 50,000 sf. 4 03/29/2017 PTC Staff Report #7799: https://www.cityofpaloalto.org/civicax/filebank/documents/56641 City of Palo Alto Planning & Community Environment Department Page 4 (FY2006, FY2007, FY2010, FY2012, FY2014, and FY2015). Within the three ordinance-affected areas, the average annual development over the 17 years was approximately 39,459 sq. ft., with a range from 0-106,829 sq. ft. A table summarizing this development activity is provided as Attachment E.5 The options considered by Council were to modify the threshold or retain the existing one; the Council selected the current threshold. 3. Unused Square Footage Allocations A related issue to the annual limit number is consideration of allowing the roll-over of unused floor area. The Council considered four options, one with no change and three that allowed rollover but with various criteria regarding an expiration time and a carryover cap on square footage. Ultimately, the Council directed the unallocated floor area to carry over for a maximum of one year only. 4. Exemptions Small office projects up to 2,000 sf and medical office less than or equal to 5,000 sf are exempt from the AOL regulations. The Council did not express concerns about the existing exemptions, but did want to see a provision added for nonprofit office use. Accordingly, the Council directed staff to include a provision to exempt deed-restricted nonprofit office uses less than 5,000 sf. 5. Review Process The current process under the interim ordinance requires a competitive approach when the 50,000 sf threshold is exceeded. There is a subjective evaluation that must occur for each of the projects for ranking purposes, which is then forwarded to Council for consideration. This process is untested because thus far the 50,000 sf threshold has not been exceeded. Staff anticipates that this process may be challenging to implement because of its subjective nature. This process is also time-intensive for the applicant and staff, and does not provide any assurances to the developer that their project will be approved now or in the future. The natural side effect of this ambiguity is the reluctance of developers to propose office projects in the City. An alternative to the competitive process is to approve projects on a first-come first-served basis. This approach would prioritize project approvals in order of when the application is ready for approval. Any number of projects could be approved, depending on their size, up to and until the 50,000 sf threshold is reached, plus any carry over floor area from the previous year. This approach would obviate the need for approvable projects to wait until March 30. If it happens that there is more than one office project ready to approve, and circumstances are such that not all can be approved due to reaching the annual limit, then the approval priority shall be given in order of the earliest project submittal date. The Council directed the ordinance implement the first-come first-served approach. 5 The CMP data includes all office and R&D development, including projects that are exempt from the AOL ordinance. This explains the square footage difference in the CMP data (Attachment E) and the approved AOL projects (Attachment D) for FY2016. City of Palo Alto Planning & Community Environment Department Page 5 Policy Implications Like the previous Comprehensive Plan, the newly adopted Comprehensive Plan 2030 includes a policy (Policy L-1.10) establishing an overall cap on commercial development. The new Comprehensive Plan policy establishes the cap at 1.7 million square feet, which is the amount remaining under the previous 3.2 million square feet cap, and modifies the cap to apply only to office and research-and-development (R&D) uses citywide. This means that for the first time, conversions of existing buildings from other uses (e.g. retail, warehouse) to office/R&D uses will count against the citywide cap.6 An AOL focused on a subset of the City will complement this citywide development cap. The Comprehensive Plan does not include an explicit policy about an annual limit on office/R&D, but was informed by City Council discussions on this topic. Specifically, during the City Council’s deliberations regarding scenarios for analysis in the Comprehensive Plan Environmental Impact Report (EIR), the Council elected to study and ultimately to select a scenario with limited job growth in large part because of their stated intention to establish the interim AOL as a permanent ordinance. Environmental Review This proposed ordinance is within the scope of the Comprehensive Plan Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council Resolution No. 9720. The Final EIR includes a discussion of using a limit for office/R&D development as a tool for growth management (Section 2.1.2, Chapter 2 “Preferred Scenario”). No additional environmental analysis is warranted at this time. For all projects that are proposed and are subject to the AOL regulations, project specific analysis would be completed 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 at least ten day in advance. Notice of a public hearing for this project was published in the Palo Alto Weekly on January 19, 2018. In order to inform the community about the efforts to prepare the replacement Annual Office Limit ordinance, staff informed various known developers, property owners, architects, and resident groups about this meeting via electronic notification. In addition, a project information page on the City’s website is maintained to keep the public up-to-date on meeting dates and staff reports. 6 Policy L-1.10: Maintain a citywide cap of 1.7 million new square feet of office/R&D development, exempting medical office uses in the Stanford University Medical Center (SUMC) vicinity. Use January 1, 2015 as the baseline and monitor development towards the cap on an annual basis. Require annual monitoring to assess the effectiveness of development requirements and determine whether the cap and the development requirements should be adjusted. Continue to exempt medical, governmental and institutional uses from the cap on office/R&D development. City of Palo Alto Planning & Community Environment Department Page 6 Next Steps Following recommendation from the PTC, staff will forward the draft ordinance to Council for review. The existing AOL interim regulations will expire on June 30, 2018, and in order to have a replacement ordinance in place by that time, Council would need to take action no later than early May. Staff anticipates going to City Council for review and action on the replacement ordinance in March 2018. Following the Council’s action, staff will update the Administrative Guidelines for the program to reflect Council’s decision. Alternative Actions In addition to the recommended action, the Planning and Transportation Commission may: 1. Recommend adoption of the draft ordinance to the City Council with modifications. 2. Continue the discussion to a future PTC hearing with the expectation that a recommendation to the City Council would be forwarded that time. Report Author & Contact Information PTC7 Liaison & Contact Information Clare Campbell, AICP, Senior Planner Jonathan Lait, AICP, Assistant Director (650) 617-3191 (650) 329-2679 clare.campbell@cityofpaloalto.org jonathan.lait@cityofpaloalto.org Attachments:  Attachment A: Proposed Draft Ordinance (PDF)  Attachment B: Existing Office Limit Regulations (PAMC 18.85) (PDF)  Attachment C: Map of Areas Affected by Annual Office Limit (PDF)  Attachment D: Approved and Pending Projects Subject to AOL (DOCX)  Attachment E: Office Development Summary FY 2001-2017 (PDF)  Attachment F: Annual Office Limit Administrative Guidelines (PDF)  Attachment G: Council Report #8234 w/o Attachments, September 5, 2017 (PDF)  Attachment H: Council Meeting Excerpt Verbatim Minutes, September 5, 2017 (PDF)  Attachment I: PTC Meeting Excerpt Verbatim Minutes, March 29, 2017 (PDF)  Attachment J: Public Comment (PDF) 7 Emails may be sent directly to the PTC using the following address: planning.commission@cityofpaloalto.org 1 Ordinance No. Ordinance of the Council of the City of Palo Alto Adding Section 18.85.200 (Annual Office Limit) to Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code Imposing an Office Annual Limit of 50,000 Net New Square Feet in Designated Areas of City, and Repealing Those Provisions Related to the Annual Office Limit in Chapter 18.85 (Interim Zoning Ordinances) The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: 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. D. As a result, prior to adoption of the interim annual office limit in 2015, the City saw a steady increase of new Office and Research and Development (R&D) projects. According to data submitted by the City to support the Valley Transportation Authority’s Congestion Management Plan (CMP), since 2001, the City has added 234,002 of net new square feet of office/R& D development in the California Avenue area; 315,586 in the downtown area, and 46,210 in the El Camino Real corridor. E. The rate of change has been faster than anticipated, resulting in changes in the character of the City’s commercial districts. The changes have also resulted in additional parking demand, traffic, and greenhouse gas emissions, and negatively impact the City’s jobs/housing ratio. F. Based on the CMP data, there have been six years since 2001 in which more than 50,000 net new square feet of Office/R&D development have been entitled in these districts combined, and these six years include the last two (fiscal years 2014 and 2015). G. Record high monthly rental rates for office space and low vacancy rates suggest that the rapid pace of development is likely to continue, putting pressure on sites that are not currently developed to their maximum potential, and contributing to a feeling in the community that the character of the City’s commercial districts are changing too fast. H. Based on the above findings, the City adopted interim annual office limit 2 regulations by Ordinance No. 5357, later extended by Ordinance No. 5417, which applied to three fiscal years (FY 2016-2018). Under these interim regulations, the pace of Office/R&D development in the covered areas has moderated. I. Continuing the annual office limit serves the public interest and general welfare, and is consistent with the Comprehensive Plan’s goals and objectives, including improving the jobs to housing imbalance by limiting the growth of employment-generating development. SECTION 2. A new Section 18.40.190 (Annual Office Limit) is added to Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code to read as follows: 18.40.190 Annual Office Limit (a) Applicability The regulations set forth in this Section shall apply to all Office Annual Limit Land Uses that are established by new construction or through the conversion of existing development (b) Definitions For purposes of this Section, the following terms shall have the definitions below: (1) “Office Annual Limit Area” means the area shown in Exhibit A (attached to Ordinance No. ______), comprising portions of the commercial districts of Downtown, the California Avenue Area and the El Camino Real corridor. (2) “Office Annual Limit Land Uses” shall include any of the following uses, each as defined in Section 18.04.030, in the Office Annual Limit Area: (A) Research and Development; (B) Administrative Office Services; (C) General Business Office; (D) Medical Office greater than 5,000 net new square feet; and (E) Professional Office. (c) Office Annual Limit No more than 50,000 net new square feet of Office Annual Limit Land Uses per fiscal year (July 1 to June 30) shall be approved by the City in the Office Annual Limit Area. (1) The 50,000 square foot limit imposed by this Section shall not apply to exempt projects as defined in subsection (d) of this Section and such projects shall not be counted towards this limit. However, if an exempt medical office project under subsection (d)(1) or exempt City office use under subsection (d)(3) is subsequently converted to a non-exempt Office Annual Limit Land Use, the associated square footage shall be counted toward the 3 50,000 square foot limit for the fiscal year in which the conversion is requested or occurs. (2) The 50,000 square foot limit shall apply to existing building area previously used by non-office uses and converted to any of the Office Annual Limit Land Uses. (3) The removal of existing Office Annual Limit Land Uses through demolition or conversion shall increase the amount of capacity available for allocation in that fiscal year by the amount of square footage removed. (4) Unallocated square footage of Office Annual Limit Land Uses shall be carried over to the next fiscal year and be available for allocation until the end of that fiscal year only. (5) Notwithstanding subsections (3) and (4) above, at no time shall the annual office limit for a single fiscal year exceed 100,000 square feet. (6) This restriction shall be in addition to any other applicable growth restriction including but not limited to Comprehensive Plan Policy L-1.10. In the event multiple policies apply to a project, the policy most restrictive of growth shall apply. (d) Exemptions The following projects shall be exempt from the Office Annual Limit established by this Section, provided that only one exemption shall be permitted per project site. (1) Small Projects. Projects comprised of 2,000 net new square feet or fewer of Office Annual Limit Land Uses, including accessory office space that is incidental to and customarily associated with a principal use or facility. This exemption shall be increased to 5,000 net new square feet or fewer where the net new square footage is devoted to Medical Office or nonprofit office use with a deed restriction to maintain the use for and by a nonprofit organization. (2) Self-Mitigating Projects. Projects that would both: (1) provide rental housing for more workers than would be employed in the project; and (2) provide substantial transportation demand management strategies (individually or in cooperation with other projects or programs) to improve the current parking and traffic conditions. (3) City Office Space. New office space used by the City of Palo Alto. (e) Economic Hardship Waiver or Adjustment 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. The applicant shall bear the burden of presenting evidence to support a waiver or modification request under this Section and shall set forth in detail the factual and legal basis 4 for the claim, including all supporting technical documentation. Any such request under this section shall be submitted to the Director together with an economic analysis or other supporting documentation and shall be acted upon by the City Council. (f) Allocation of Office Square Footage for Projects Subject to the Office Annual Limit (1) Office development capacity for Office Annual Limit Land Uses shall be allocated upon approval of a planning entitlement, or a building permit or Certificate of Use and Occupancy if no planning entitlement is required, in the order that the projects are approved. (A) If a planning entitlement approved by the Director is appealed to the City Council, the project shall be allowed to retain the office allocation provided that the Director’s approval decision is upheld by City Council. If the City Council overturns the Director’s approval decision and denies the project, the office allocation shall be forfeited and made available to other projects. (B) If the planning entitlement or building permit with which the project received an office allocation expires, the office allocation shall be forfeited and made available to other projects. A project that received an office allocation at issuance of a Certificate of Use and Occupancy for the purposes of converting existing developed non-office space to one or more Office Annual Limit Land Uses, shall forfeit its office allocation if the related building permit expires and the office allocation will be made available to other projects. However, if the expiration of the planning entitlement or building permit occurs in a later fiscal year than when the office allocation was made, the forfeited office allocation will only be made available to other projects if it would not cause the annual office limit for that fiscal year to exceed 100,000 square feet. (2) If more than one project will be considered for approval on the same day, then the project with the earliest initial submittal date shall have priority in receiving office allocation. (3) Projects that cannot be approved due to the Office Annual Limit being reached for that fiscal year shall be considered for approval the following fiscal year. (g) Implementation The Director shall have the authority to adopt rules or procedures for the efficient and equitable implementation of these regulations. SECTION 3. Sections 18.85.200 through 18.85.270, all of which pertain to the Annual Office Limit in Chapter 18.85 (Interim Zoning Ordinances) of Title 18 (Zoning) of the Palo Alto Municipal Code are hereby repealed. 5 SECTION 4. Supersede. This Ordinance supersedes any provision of the Palo Alto Municipal Code inconsistent with the provisions of this 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 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 Date. This ordinance shall be effective on the thirty-first date after the date of its adoption. SECTION 7. CEQA. The City Council finds that the environmental impacts of this Ordinance were disclosed, analyzed and evaluated as part of that certain Final Environmental Impact Report for the Comprehensive Plan Update considered and certified by the City Council on November 13, 2017, by Resolution Nos. 9720 and 9721 (“EIR”). The City Council considered the EIR prior to taking action on this Ordinance, in conformance with the California Environmental Quality Act (“CEQA”), together with state and local regulations implementing CEQA. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: ______________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: ____________________________ City Manager ______________________________ Assistant City Attorney ____________________________ Director of Planning and Community Environment CJL Stanford Shopping Center Downtown/Unniversity Area UniversityStation PAMF Town & Country California AvenueArea Fry's Site Stanford Research Park El Camino RealCorridor El Camino RealCorridor El Camino RealCorridor Alma Plaza Stanford MedicalCenter CharlestonCenter R-1 San AntonioArea San AntonioArea Midtown West BayshoreArea EdgewoodPlaza East BayshoreArea MSC Embarcadero EastArea SOFA I SOFA II R-1 R-1 (7000) East MeadowCircle s J u n i p e r o S e r r a B o u l e v a r d P a g e M i l l R o ad R o a d E l C a m i n o R e a l S a n A n t o n i o A v e n u e C h a r l e s t o n R oa d O re g o n E x p r e s s w a y M i d d l e f i e l d R o a d U niversity Avenue y 1 0 1 A l m a S t r e e t El Camino Real n e R o a d F o o t h i l l E x p r e s Hi l l vi e w E a st B a y s h or e W e st B a y s h o r e Fabian S a n d Hill R oa d E m b a r c a d e r o R o a d Wallis Ct Donald Drive Encina Grande Drive Cereza Drive Los Robles Avenue Villa Vera Verdosa DriveCampana DriveSolana Drive Georgia Ave Ynigo Way Driscoll Ct ngArthur' Maybell Way Maybell Avenue Frandon Ct Florales Drive Georgia AvenueAmaranta Avenue Amaranta Ct Ki sCourt Terman Drive Baker Avenue Vista Avenue Wisteria Ln Pena Ct Coulombe Drive Cherry Oaks Pl Pomona AvenueArastradero Road Abel Avenue Clemo Avenue Villa Real El Camino Way Curtner Avenue Ventura Avenue Maclane Emerson Street Ventura Ct Park Boulevard Magnolia Dr South El Camino Real Cypress Lane GlenbrookD Fairmede Avenue Arastradero Road Irven Court Los Palos CirLosPalosPl Maybell Avenue Alta Mesa Ave Kelly Way Los Palos Avenue Suzanne Drive Suzanne Drive rive El Camino Real Suzanne CtLorabelle Ct Mc Kellar 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CalcaterraPlace Ely Place Ely Place Adobe Place Nelson Court ByronStreet Keats Court Middlefield Road Duncan Place Carlson Court Duncan Place Mumford Place Charleston Road San Antonio Avenue East Meadow Drive Emerson Street Court BryantStreet RooseveltCircle RamonaStreet CarlsonCircle RedwoodCircle South Leghorn Street Montrose Avenue Maplewood Charleston Ct Charleston Road Seminole Way Sutherland Drive Nelson Drive El Capitan Place Fabian Street Loma Verde Avenue Bryson Avenue Midtown Court Cowper Street Gary Court Waverley StreetSouth CourtBryant StreetRamona Street Alma Street Coastland Drive Colorado Avenue Byron Street Middlefield Road Gaspar Court Moreno Avenue Coastland Drive El Carmelo Avenue RosewoodD Campesino Avenue Dymond Ct Martinsen Ct Ramona Street Bryant Street Towle Way Towle Place Wellsbury Ct AvalonCourt FlowersLane Mackall Way Loma Verde Avenue KiplingStreet Cowper Street South Court Waverley StreetEl Verano Avenue Wellsbury Way La Middlefield Road St Claire Drive Alger Drive Ashton Avenue St Michael DriveSt Michael Drive Maureen Avenue Cowper Court Rambow Drive East Meadow Drive Ashton Court Murdoch DriveCowperStreet Murdoch Ct St Michael Court MayCourt Mayview Avenue Middlefield Road Ensign Way Bibbits Drive Gailen CtGailen Avenue Grove Avenue San Antonio Avenue Commercial Street Industrial Avenue Bibbits Drive Charleston Road Fabian Way T East Meadow Drive Grove Avenue Christine Drive Corina Way Ross Road Corina W ay Louis Road Nathan Way Transport Street Ortega Court East Meadow Drive yneCourt alisman Loma Verde Avenue Allen Court Ross Court Loma Verde Pl Ames Avenue Richardson Court Holly Oak Drive Ames Avenue CorkOakWay Middlefield Road Ames Ct Ames Avenue Ross Road Rorke Way RorkeWay Stone LaneToyon Place Torreya Court Lupine Avenue Thornwood Drive DriftwoodDrive Talisman Drive Arbutus AvenueRoss Road Louis Road Aspen WayEvergreen Drive East Meadow Drive Corporation WayElwell Court Janice Way East Meadow Circle East Meadow Circle 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Kendall Avenue Tippawingo St Julie Ct Matadero Avenue Ilima Way Ilima Court Laguna Oaks Pl Carlitos Ct La CalleLaguna Avenue ElCerrit Paradise Way Roble Ridge (Private) LaMataWay Chimalus Drive Matader o Avenue oRoad Paul Avenue Kendall Avenue Whitsell Avenue Barron Avenue Los Robles Avenue Lagu na Way ShaunaLane La Para Avenue San Jude Avenue El Centro Street TimlottLa Jennifer Way Magnolia Dr North La Donna Avenue LosRoblesAvenue Rinc Manzana Lane onCircle Crosby Pl Georgia Av enue Hubbartt Drive Willmar Drive Donald Drive Arastradero Road Foothill Expres La Para Avenue San Jude Avenue Magnolia Drive Military Way Arbol Drive Orme Street Fernando Avenue Matadero Avenue Lambert Avenue Hansen Way El Camino Real Margarita Avenue Matadero Avenue Wilton Avenue Oxford Avenue Harvard Street California Avenue Wellesley StreetPrinceton StreetOberlin Street Cornell Street Cambridge Avenue College AvenueWilliams Street Yale Street Staunton Court Oxford AvenueEl Camino Real Churchill Avenue Park Boulevard Park Avenue Escobita Aven ue Churchill Avenue Sequoia Avenue Mariposa Avenue Castilleja Avenue Miramonte Avenue Madron o Aven u e Portola Avenu e Manzanita Avenue Coleridge Avenue Leland Avenue Stanford AvenueBirch Street Ash Street Lowell Avenue Alma Street Tennyson Avenue Grant Avenue Sheridan AvenueJacaranda Lane El Camino Real Sherman Avenue Ash Street Page Mill Road Mimosa Lane Chestnut Avenue Portage Avenue Pepper Avenue Olive Avenue Acacia Avenue Emerson Street Park Boulevard Orinda Street Birch Street Ash Street Page Mill Road Ash Street Park Boulevard College Avenue Cambridge Avenue New Mayfield Lane Birch Street California Avenue Park Boulevard Nogal Lane Rinconada Avenue Santa Rita Avenue Park Boulevard Seale Avenue Washington Avenue Santa Rita Avenue WaverleyStree Bryant Street High Street Emerson Street Colorado AvenueStreet Emerson Street Ramona Street Bryant Street South Court El Dorado AvenueAlma Street Alma Street HighStreet t Emerson Waverley Oaks Washington Avenue Bryant Street South Court Waverley Street Emerson StreetNevada Avenue North California Avenue Santa Rita Avenue Ramona Street High Street North California Avenue Oregon Expressway Marion Avenue Ramona Street Colorado Avenue Waverley Street Kipling Street South Court Cowper Street Anton CourtNevada Avenue Tasso Street Tasso Street Oregon Avenue Marion Pl Webster Street Middlefield Road Ross Road Warren Way El Cajon Way Embarcadero RoadPrimrose Way Iris Way Tulip Lane Tulip Lane Garland Drive Louis Road Greer Road MortonStreet Greer Road Hamilton Avenue Hilbar LaneAlannah Ct Edge Rhodes Drive Marshall Drive FieldinMoreno AvenueMarshallDrive Dennis Drive Agnes Way Oregon AvenueBlair Court Santa Ana Street Elsinore DriveElsinore CourtEl Cajon Way Greer RoadNorth California Avenue gDrive Colorado Avenue Sycamore Drive Amarillo Avenue VanAukenCircle Bruce Drive Colonial Lane Moreno Avenue Celia Drive Burnham Way Greer Road Indian Drive Elmdale Pl C Tanland Drive Moreno Avenue Amarillo 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Hamilton Avenue Webster Street Waverley Street Kipling Street Bryant StreetRamona Street Addison AvenueScott Street Byron Street Palo Hale Street Seneca Street Lytton Avenue Guinda Street PaloAltoAvenue Fulton StreetMiddlefield Road Forest Avenue Webster Street Kellogg Avenue Middlefield Road Byron Street Webster Street Cowper Street Tasso Street Cowper Street Addison Avenue Lincoln Avenue Boyce Avenue Forest AvenueHamilton Avenue Homer AvenueGuinda Street Middlefield Road Channing Avenue AltoAvenue Chaucer Street Chaucer Street University Avenue Channing Avenue Addison Avenue Lincoln Avenue Regent Pl Guinda StreetLincoln Avenue Fulton Street Melville Avenue Byron Street Kingsley Avenue Melville Avenue Hamilton AvenueHamilton Court Forest AvenueForest Ct Marlowe St Maple Stree Palm Street Somerset Pl Pitman Avenue Fife Avenue Forest Avenue Dana Avenue Lincoln Avenue University Avenue Coleridge Avenue Lowell Avenue Fulton StreetCowper Street Tennyson Avenue Seale Avenue Northampton Drive West Greenwich Pl Middlefield Road Newell RoadGuinda Street East Greenwich Pl Southampton Drive Webster Street Kirby Pl Kent Place Tevis Pl Martin Avenue Center Drive Harriet Street Wils o n S t r e e t Cedar Street Harker Avenue Greenwood Avenue Hutchinson Avenue Channing Avenue Hopkins Avenue Embarcadero Road Ashby Drive Dana Avenue Hamilton Avenue Pitman Avenue Southwood Drive West CrescentDrive C University Avenue Center Drive East Crescen Arcadia Place Louisa Court Newell Pl Sharon Ct Erstwild Court Walter Hays Drive Walnut Drive Newell Road Parkinson AvenuePine Street Mark Twain Street Louis RoadBarbara Drive Primrose Way Iris Way Embarcadero Road Walter Hays DriveLois Lane Jordan Pl Lois Lane Heather Lane Bret Harte Street Stanley Way De Soto DriveDe Soto Drive Alester Avenue Walter Hays Drive Channing Avenue Iris Way tDrive Dana Avenue Hamilton AvenueNewell RoadKings Lane EdgewoodDrive Island Drive Jefferson Drive JacksonDrive Patricia LaneMadison Way EdgewoodDrive Ramona Street Addison AvenueChanning Avenue Waverley Street Tennyson Avenue Seale Avenue Middlefield Road Byron StreetWebster Street Marion AvenueWelch Road Sedro Lane Peral Lane McGregor Way Monroe Drive Silva Avenue Silva Court Miller Court Briarwood Way Driscoll Place Paulsen Ln Community Lane Lane 15 E Court Madeline Ct David Ct Green Ct Oregon Expressway Oregon Expressway Sheridan Avenue Page Mill Road Page Mill Road Foothill Expressway Miranda Avenue Foothill Expressway Cerrito Way Emerson Street Miranda Avenue Lane 20 WLane 20 E Oregon ExpresswayUniversity Avenue Jacob's Ct CalTrain ROW CalTrain ROW CalTrain ROW CalTrain ROW Emerson Street Waverley Street Kipling Street Clark Way Durand Way Sand Hill Road Swain Way Clark Way Mosher Way Charles Marx Way Orchard Lane Vineyard Lane Oak Road Sand Hill Road Sand Hill Road Sand Hill Road Hillv Lane 66 Bryant StreetRamona Street Blake Wilbur Drive West Charleston Road Bayshore Freeway Bayshore Freeway Bayshore Freeway West Bayshore Road East Bayshore Road East Bayshore Road East Bays hore Road West Bayshore Road East Bayshore Road Bayshore Freeway Bayshore Freeway Fabian Way Bayshore Freeway Bayshore Freeway Palo Road Shopping Center Way Shopping Center Way Shopping Center Way London Plane Way Plum Lane Sweet Olive Wa y Pear Lane Lane 66 La Selva Drive Grove Ct Stanford Avenue Lane 12 WLane 5 E Lasuen Street Serra Mall Escondido Road Olmsted Road Phillips Road Pistache Place Santa Ynez Street Lane B Lane C El Dorado Avenue Oak Creek Drive Clara Drive Bellview Dr Everett Avenue Homer Avenue La Calle SAN ANTONIO AVENUE Matadero Ave Colorado Pl Los Robles Avenue Timlott Ct Vista Villa PaloAltoAvenu e Lane La Donna Avenue Cass Way Kenneth Drive Fabian Way Page Mill Road Middlefield RoadChristine Drive Louis Road Charleston Road Bayshore Freeway Bayshore Freeway Chimalus Drive Hanover Street Community Lane Greenwood Avenue Harker Avenue Parkinson Avenue Avenue Maplewood Pl Mackay Drive Santa Teresa Lane Byron Street Varian Way Quail DrQuail Dr Paloma Dr Paloma Dr Trinity Ln Heron Wy Feather Ln Stanislaus LnTuolu mne Ln Plover Ln Sandpiper Ln Curlew Ln Mallard LnEgret Ln Klamath Ln Deodar StAlder LnSpruce Ln Rickey's Ln Juniper Way Rickey's Wy Rickey's Wy Rickey's Wy Juniper Lane Emerson Street Boronda Lane Tahoe Lane Lake Avenue Donner Lane Almanor Lane Fallen Leaf Street Berryes sa Street Cashel StNoble St Hettinger Ln Pratt Ln Emma Court Galvez Mall Federation Way Abrams Court Allardice Way Alta Road Alvarado CtAlvarado Row Angell Court Arguello Way Arguello Way Avery Mall Ayrshire Farm Lane Barnes CourtBonair Siding Bowdoin Street Cabrillo Avenue Cabrillo Avenue Campus Drive Campus Drive Campus Drive Campus Drive Campus DriveCampus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus DriveCampus Drive Campus Drive Capistrano Way Casanueva Place Cathcart Way Cedro Way Cedro Way Churchill Mall Comstock Circle Aboretum Road Aboretum Road Blackwelder Court Campus Drive Cathcart Way Constanzo Street Cooksey Lane Coronado Avenue Cottrell Way Cottrell Way Cowell Ln Crothers Way Dolores Street Dolores Street Dudley Lane Duena Street Electioneer Road Escondido Mall Escondido Mall Escondido Road Escondido Road Escondido Road Esplanada Way Estudillo Road Fremont Road Frenchmans Road Frenchmans Road Galvez Mall Alvarado Row Galvez Street Galvez Street Galvez Street Gerona Road Gerona Road El Escarpado Gerona Road Hoskins Court Hulme Court JenkinsCourt Junipero Serra Boulevard Junipero Serra Boulevard Junipero Serra Boulevard Junipero Serra Boulevard Knight Way Lagunita Drive Lane L L ane W Lasuen Mall Lasuen Mall Lasuen Mall Lasuen Street Lathrop Drive Lathrop Drive Lathrop Place Lathrop Drive Links RoadLinks Road Lomita Drive Lomita Drive Lomita Drive Lomita Drive Lomita DriveLomitaCourt Lom ita Mall Los Arboles Avenue Masters Mall Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue McFarland Court Mears CourtMears Court Memorial Way Mirada Avenue Mirada Avenue Museum Way N Service Road N Tolman Ln Nelson Mall Nelson Road North-South Axis Oberlin St Comstock Circle Escondido Mall Olmsted Road Olmsted Road Olmsted Road Olmsted Road Olmsted Road Palm Drive Palm Drive Pampas Lane Panama Mall Panama Mall Panama Street Panama Street Pearce Mitchell Pl Peter Coutts Circle Peter Coutts Road Peter Coutts Road Pine Hill Court Pine Hill Road Quarry Extension Quarry Road Quillen Ct Raimundo Way Rai mundo Wa y Raimundo Way Roble Drive Rosse Lane Roth Way Roth Way Roth Way Running Farm Lane Ryan Court S Service Road S Tolman Ln Salvatierra Street Salvatierra St Salvatierra W alk Samuel Morris Wy San Francisco Terrace San Francisco CourtSan Juan St San Juan St San Rafael Pl Santa Fe Avenue Santa Maria Avenue Santa Teresa Street Santa Teresa Street Santa Ynez Street Searsville Road Sequoia Wy Serra Mall Serra Street Serra Street Serra Street Sonoma Terrace Stanford Avenue Stanford Avenue Stock Farm Road Thoburn Court Tolman DriveValdez Place Valparaiso Street Vernier Place Via Ortega Via Palou Via Pueblo Mall Welch Road Wellesley St Wilbur Way Wing Place Yale St Alma Street Alma Street Alma Street Alma Street Alma Street Hawthorne Avenue Lytton Avenue Alpine Access Road Nathan Abbott Way Sam McDonald Road Sam McDonald Mall Vista Lane Bowdoin Lane Arguello Way Governors Avenue Governors Avenue Governors Avenue S Governors Lane Pasteur Drive Lagunita Drive Alma Village Lane Alma Village Circle R e s e r v oir R o a d Reservoir Road Reservoir Road Ranch Road Ryan Lane O'Connor Lane Gene CtBrassinga Ct Cole Ct Birch Street Arboretum Road Welch RoadPasteur Drive Pasteur Drive This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Commercial & RT Zoning Districts - Office is a Permitted Use w/ Possible GF & Size Limitations ROLM & RP Zoning Districts - Office and R & D is a Permitted Use MOR Zoning District - Medical Office is a Permitted Use PF Zoning District - Office is a Conditional Use GM Zoning District - R & D is a Permitted Use & Office is a Conditional Use Stanford Research Park Annual Office and R&D Cap Area Boundaries City Jurisdictional Limits abc Note: Other uses where Office may be an "accessory use" maybe conditionally permitted in Residential Zoning Districts 0'2200' Of f i c e a n d R & D An n u a l C a p B o u n d a r i e s Ar e a M a 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 2015 City of Palo AltoRRivera, 2015-10-01 11:54:38 (\\cc-maps\gis$\gis\admin\meta\view.mdb) Exhibit A Print Palo Alto Municipal Code Chapter 18.85 INTERIM ZONING ORDINANCES Sections: Annual Office Limit** 18.85.210 Definitions 18.85.220 Office Annual Limit 18.85.230 Exemptions 18.85.240 Economic Hardship Waiver or Adjustment 18.85.250 Procedures for Reviewing Qualifying Applications 18.85.260 Selection Criteria 18.85.270 Implementation **Editor’s Note: Sections 18.85.210 through 18.85.270 were added by Ord. 5357, which shall expire within two years of its effective date, 11-26-15 or upon City Council adoption of the Comprehensive Plan Update, whichever occurs first. ANNUAL OFFICE LIMIT 18.85.210 Definitions. For the purposes of this Ordinance, the following terms shall have the definitions below: (a) Office Annual Limit Area shall include the area shown in Exhibit A (attached to Ord. 5357), comprising the commercial districts of Downtown, the California Avenue Area, and the El Camino Real corridor. (b) Office Annual Limit Land Uses shall include any of the following uses in the Office Annual Limit Area: (1) Research and Development as defined in Section 18.04.030(123); (2) Administrative Office Services as defined in Section 18.04.030(6); (3) General Business Office as defined in Section 18.04.030(61); Page 1 of 5Chapter 18.85 INTERIM ZONING ORDINANCES xx 1/16/2018http://library.amlegal.com/alpscripts/get-content.aspx (4) Medical Office greater than 5,000 net new square feet as defined in Section 18.04.030 (95); and (5) Professional Office as defined in Section 18.04.030(116). (c) Qualifying Application shall mean an application for a permit or other planning entitlement for an Office Annual Limit Land Use which (1) has been determined to be complete, (2) has completed the necessary analysis under the California Environmental Quality Act and (3) has been reviewed by all required commissions and/or Planning Director, as applicable. (Ord. 5357 § 1 (part), 2015) 18.85.220 Office Annual Limit. During the pendency of this Ordinance no more than 50,000 net new square feet of Office Annual Limit Land Uses per fiscal year shall be approved by the City in the Office Annual Limit Area. (a) For purposes of this Ordinance, the fiscal year shall be defined as July 1 to June 30. (b) The 50,000 square foot limit imposed by this section shall not apply to exempt projects as defined in Section 18.85.230 and such projects shall not be counted towards this limit. (c) This restriction shall be in addition to any other applicable growth restriction including but not limited to Comprehensive Plan Policy L-8 and Section 18.18.040 of the Zoning Code. In the event multiple policies apply to a project, the policy most restrictive of growth shall apply. (Ord. 5357 § 1 (part), 2015) 18.85.230 Exemptions. The following shall be exempt from this Ordinance: (a) Small Projects. Projects containing less than 2,000 net new square feet or less of Office Annual Limit Land Uses and accessory office space that is incidental to and customarily associated with a principal use or facility are exempt from the Office Annual Limit. (b) Small Medical Office Projects. Projects containing 5,000 net new square feet or less of Medical Office are exempt from the Development Cap. (c) Self-Mitigating Projects. Projects that would both: (1) provide rental housing for more workers than would be employed in the project; and (2) provide substantial transportation demand management strategies (individually or in cooperation with other projects or programs) to improve the current parking and traffic conditions. (d) Pipeline Projects. Page 2 of 5Chapter 18.85 INTERIM ZONING ORDINANCES xx 1/16/2018http://library.amlegal.com/alpscripts/get-content.aspx Projects which have been approved, or which are considered "pipeline projects" as follows: (1) Projects which obtained a planning entitlement for an Office Annual Limit Land Use prior to the effective date of this ordinance. (2) Projects which are the subject of a planning entitlement application that was submitted to the City in 2013 or 2014 and deemed complete by the City on or before March 31, 2015. (e) City Office Space. New office space used by the City of Palo Alto. (Ord. 5357 § 1 (part), 2015) 18.85.240 Economic Hardship Waiver or Adjustment. 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. The applicant shall bear the burden of presenting 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. (Ord. 5357 § 1 (part), 2015) 18.85.250 Procedures for Reviewing Qualifying Applications. The following additional processing and approval requirements shall apply to Office Annual Limit Land Uses: (a) No Qualifying Application for an Office Annual Limit Land Use shall be acted upon by the Director or by the City Council between July 1 and March 31 of the following year. (b) If the combined square footage proposed by all Qualifying Applications that are pending on March 31 would not exceed the annual limit, the Qualifying Applications shall be acted upon using the Zoning Code's usual process immediately following March 31. (c) If the combined square footage proposed by all Qualifying Applications would exceed the annual limit, the Director shall rank all Qualifying Applications based on scoring criteria set forth in Section 18.85.260 and make a recommendation to the Council. The Council may accept the Director's recommendation or reevaluate the ranking based on the scoring criteria. Based on their review, the Council shall approve in ranked order one or more Qualifying Applications to achieve a maximum of 50,000 net new square feet. The Council may approve applications as proposed and recommended, and may require modifications of any project to reduce the proposed square footage in order to stay within the 50,000 square feet Office Annual Limit. The Page 3 of 5Chapter 18.85 INTERIM ZONING ORDINANCES xx 1/16/2018http://library.amlegal.com/alpscripts/get-content.aspx Council's action on all Qualifying Applications shall be made before the end of the fiscal year on June 30. (d) Any application which is subject to City Council evaluation and action pursuant to Section (c) above and which was not approved by the City Council shall be denied unless, at the request of the applicant, it is rolled over to the next fiscal year for processing in accordance with the terms of this Ordinance. Further, in lieu of modifications to the project's Office Annual Limit Land Use, the applicant can elect to roll over the application to the next fiscal year. The City and applicant may agree to extend any applicable processing time periods to effectuate this provision. (Ord. 5357 § 1 (part), 2015) 18.85.260 Selection Criteria. The City Council shall evaluate applications subject to the annual limit using the following criteria based upon weighting set forth in administrative rules or procedures which shall provide that projects meeting criterion (i) shall be selected first and weighted against each other: Impacts (a) The density of the development in the context of underlying zoning and the site surroundings; and (b) The ability to avoid or address potential impacts on traffic and parking; and Design (c) The quality of design, including the attention to human scale where the building(s) meet the street, the compatibility with surroundings, and the overall architectural quality; and Environmental Quality (d) Environmental quality; and Public Benefit (e) The value to the community of public benefits offered; and Uses (f) Mixed use projects including substantial housing; and (g) Mixed use projects including retail; and (h) Mixed use projects that provide space for cultural amenities such as but not limited to art galleries and studios; and Pipeline Projects (i) Any entitlement application involving an Office Annual Limit Land Use deemed complete by the City between March 31, 2015 and June 15, 2015. (Ord. 5357 § 1 (part), 2015) Page 4 of 5Chapter 18.85 INTERIM ZONING ORDINANCES xx 1/16/2018http://library.amlegal.com/alpscripts/get-content.aspx 18.85.270 Implementation. The Director has the authority to adopt rules or procedures to implement the efficient and equitable implementation of this Ordinance. (Ord. 5357 § 1 (part), 2015) Page 5 of 5Chapter 18.85 INTERIM ZONING ORDINANCES xx 1/16/2018http://library.amlegal.com/alpscripts/get-content.aspx CJL Stanford Shopping Center Downtown/Unniversity Area UniversityStation PAMF Town & Country California AvenueArea Fry's Site Stanford Research Park El Camino RealCorridor El Camino RealCorridor El Camino RealCorridor Alma Plaza Stanford MedicalCenter CharlestonCenter R-1 San AntonioArea San AntonioArea Midtown West BayshoreArea EdgewoodPlaza East BayshoreArea MSC Embarcadero EastArea SOFA I SOFA II R-1 R-1 (7000) East MeadowCircle s J u n i p e r o S e r r a B o u l e v a r d P a g e M i l l R o ad R o a d E l C a m i n o R e a l S a n A n t o n i o A v e n u e C h a r l e s t o n R oa d O re g o n E x p r e s s w a y M i d d l e f i e l d R o a d U niversity Avenue y 1 0 1 A l m a S t r e e t El Camino Real n e R o a d F o o t h i l l E x p r e s Hi l l vi e w E a st B a y s h or e W e st B a y s h o r e Fabian S a n d Hill R o a d E m b a r c a d e r o R o a d Wallis Ct Donald Drive Encina Grande Drive Cereza Drive Los Robles Avenue Villa Vera Verdosa DriveCampana DriveSolana Drive Georgia Ave Ynigo Way Driscoll Ct ngArthur' Maybell Way Maybell Avenue Frandon Ct Florales Drive Georgia AvenueAmaranta Avenue Amaranta Ct Ki sCourt Terman Drive Baker Avenue Vista Avenue Wisteria Ln Pena Ct Coulombe Drive Cherry Oaks Pl Pomona AvenueArastradero Road Abel Avenue Clemo Avenue Villa Real El Camino Way Curtner Avenue Ventura Avenue Maclane Emerson Street Ventura Ct Park Boulevard Magnolia Dr South El Camino Real Cypress Lane GlenbrookD Fairmede Avenue Arastradero Road Irven Court Los Palos CirLosPalosPl Maybell Avenue Alta Mesa Ave Kelly Way Los Palos Avenue Suzanne Drive Suzanne Drive rive El Camino Real Suzanne CtLorabelle Ct McKellar Lane El Camino Way James Road Maclane Second Street Wilkie Way Camino Ct West Meadow Drive Thain Way Barclay CtVictoria Place Interdale Way West Charleston Road Tennessee LaneWilkie Way Carolina LaneTennessee Lane Park Boulevard Wilkie Ct Davenport Way Alma Street Roosev Monroe Drive Wilkie Way Whitclem Pl Whitclem DriveDuluth Circle Edlee Avenue Dinah's Court Cesano Court Monroe Drive Miller Avenue Whitclem Wy Whitclem Ct Ferne Avenue Ben Lomond Drive Fairfield Court Ferne Avenue Ponce Drive Hemlock Court Ferne Court Alma Street Monroe Drive San Antonio Avenue NitaAvenue Ruthelma Avenue Darlington Ct Charleston Road LundyLane Newberry Ct Park Boulevard George Hood Ln Alma Street eltCircle LinderoDrive Wright Place StarrKingCircle Shasta Drive Mackay Drive Diablo Court Scripps Avenue Scripps Court Nelson Drive Tioga Court Creekside Drive Greenmeadow Way Ben Lomond Drive Parkside Drive Dixon Place Ely Place Dake Avenue Ferne Avenue San Antonio Court (Private) ChristopherCourt CalcaterraPlace Ely Place Ely Place Adobe Place Nelson Court ByronStreet Keats Court Middlefield Road Duncan Place Carlson Court Duncan Place Mumford Place Charleston Road San Antonio Avenue East Meadow Drive Emerson Street Court BryantStreet RooseveltCircle RamonaStreet CarlsonCircle RedwoodCircle South Leghorn Street Montrose Avenue Maplewood Charleston Ct Charleston Road Seminole Way Sutherland Drive Nelson Drive El Capitan Place Fabian Street Loma Verde Avenue Bryson Avenue Midtown Court Cowper Street Gary Court Waverley StreetSouth CourtBryant StreetRamona Street Alma Street Coastland Drive Colorado Avenue Byron Street Middlefield Road Gaspar Court Moreno Avenue Coastland Drive El Carmelo Avenue RosewoodD Campesino Avenue Dymond Ct Martinsen Ct Ramona Street Bryant Street Towle Way Towle Place Wellsbury Ct AvalonCourt FlowersLane Mackall Way Loma Verde Avenue KiplingStreet Cowper Street South Court Waverley StreetEl Verano Avenue Wellsbury Way La Middlefield Road St Claire Drive Alger Drive Ashton Avenue St Michael DriveSt Michael Drive Maureen Avenue Cowper Court Rambow Drive East Meadow Drive Ashton Court Murdoch DriveCowperStreet Murdoch Ct St Michael Court MayCourt Mayview Avenue Middlefield Road Ensign Way Bibbits Drive Gailen CtGailen Avenue Grove Avenue San Antonio Avenue Commercial Street Industrial Avenue Bibbits Drive Charleston Road Fabian Way T East Meadow Drive Grove Avenue Christine Drive Corina Way Ross Road Corina Way Louis Road Nathan Way Transport Street Ortega Court East Meadow Drive yneCourt alisman Loma Verde Avenue Allen Court Ross Court Loma Verde Pl Ames Avenue Richardson Court Holly Oak Drive Ames Avenue CorkOakWay Middlefield Road Ames Ct Ames Avenue Ross Road Rorke Way RorkeWay Stone LaneToyon Place Torreya Court Lupine Avenue Thornwood Drive DriftwoodDrive Talisman Drive Arbutus AvenueRoss Road Louis Road Aspen WayEvergreen Drive East Meadow Drive Corporation WayElwell Court Janice Way East Meadow Circle East Meadow Circle GreerRoad Bayshore Freeway rive Ellsworth PlaceSan Carlos Court Wintergreen Way SutterAvenue Sutter Avenue Clara Drive Price CourtStern Avenue Colorado Avenue Randers Ct Ross Road Sycamore Drive Sevyson Ct Stelling Drive Ross Road David Avenue MurrayWay Stelling DriveStelling Ct ManchesterCourt Kenneth Drive ThomasDriveGreer Road Stockton Place Vernon Terrace Louis Road Janice Way Thomas DriveKenneth Drive Loma Verde Avenue CliftonCourtElbridgeWay Clara Drive BautistaCourt Stockton Place Morris Drive Maddux Drive Piers Ct Louis Road Moraga Ct Old Page Mill Road D CoyoteHillRoad Hillview Avenue Porter Drive Hillview Avenue Hanover Street Foothill Expressway Miranda Avenue Stanford Avenue Amherst Street Columbia StreetBowdoin Street Dartmouth Street Hanover Street College Avenue California Avenue Hanover Street Ramos Way (Private) Page Mill Road Hansen Way Hanover Street Arastradero Road Miranda Avenue e Hill Avenue anuela Avenue Miranda Avenue Laguna Ct Barron Avenue Josina Avenue Kendall Avenue Tippawingo St Julie Ct Matadero Avenue Ilima Way Ilima Court Laguna Oaks Pl Carlitos Ct La CalleLaguna Avenue ElCerrit Paradise Way Roble Ridge (Private) LaMataWay Chimalus Drive Matadero Avenue oRoad Paul Avenue Kendall Avenue Whitsell Avenue Barron Avenue Los Robles Avenue Laguna Way ShaunaLane La Para Avenue San Jude Avenue El Centro Street TimlottLa Jennifer Way Magnolia Dr North La Donna Avenue LosRoblesAvenue Rinc Manzana Lane onCircle Crosby Pl Georgia Avenue Hubbartt Drive Willmar Drive Donald Drive Arastradero Road Foothill Expres La Para Avenue San Jude Avenue Magnolia Drive Military Way Arbol Drive Orme Street Fernando Avenue Matadero Avenue Lambert Avenue Hansen Way El Camino Real Margarita Avenue Matadero Avenue Wilton Avenue Oxford Avenue Harvard Street California Avenue Wellesley StreetPrinceton StreetOberlin Street Cornell Street Cambridge Avenue College AvenueWilliams Street Yale Street Staunton Court Oxford AvenueEl Camino Real Churchill Avenue Park Boulevard Park Avenue Escobita Avenue Churchill Avenue Sequoia Avenue Mariposa Avenue Castilleja Avenue Miramonte Avenue Madrono Avenue Portola Avenue Manzanita Avenue Coleridge Avenue Leland Avenue Stanford AvenueBirch Street Ash Street Lowell Avenue Alma Street Tennyson Avenue Grant Avenue Sheridan AvenueJacaranda Lane El Camino Real Sherman Avenue Ash Street Page Mill Road Mimosa Lane Chestnut Avenue Portage Avenue Pepper Avenue Olive Avenue Acacia Avenue Emerson Street Park Boulevard Orinda Street Birch Street Ash Street Page Mill Road Ash Street Park Boulevard College Avenue Cambridge Avenue New Mayfield Lane Birch Street California Avenue Park Boulevard Nogal Lane Rinconada Avenue Santa Rita Avenue Park Boulevard Seale Avenue Washington Avenue Santa Rita Avenue WaverleyStree Bryant Street High Street Emerson Street Colorado AvenueStreet Emerson Street Ramona Street Bryant Street South Court El Dorado AvenueAlma Street Alma Street HighStreet t Emerson Waverley Oaks Washington Avenue Bryant Street South Court Waverley Street Emerson StreetNevada Avenue North California Avenue Santa Rita Avenue Ramona Street High Street North California Avenue Oregon Expressway Marion Avenue Ramona Street Colorado Avenue Waverley Street Kipling Street South Court Cowper Street Anton CourtNevada Avenue Tasso Street Tasso Street Oregon Avenue Marion Pl Webster Street Middlefield Road Ross Road Warren Way El Cajon Way Embarcadero RoadPrimrose Way Iris Way Tulip Lane Tulip Lane Garland Drive Louis Road Greer Road MortonStreet Greer Road Hamilton Avenue Hilbar LaneAlannah Ct Edge Rhodes Drive Marshall Drive FieldinMoreno AvenueMarshallDrive Dennis Drive Agnes Way Oregon AvenueBlair Court Santa Ana Street Elsinore DriveElsinore CourtEl Cajon Way Greer RoadNorth California Avenue gDrive Colorado Avenue Sycamore Drive Amarillo Avenue VanAukenCircle Bruce Drive Colonial Lane Moreno Avenue Celia Drive Burnham Way Greer Road Indian Drive Elmdale Pl C Tanland Drive Moreno Avenue Amarillo Avenue West Bayshore Road Sandra Place Clara DriveColorado Avenue Greer Road Colorado AvenueSimkins Court Otterson CtHiggins PlaceLawrence Lane Maddux Drive Genevieve Ct MetroCircle MoffettCircle Greer Road East Bayshore Road ardinalWay Santa Catalina Street ArrowheadWayAztec Way Chabot Terrace Oregon Avenue Carmel Drive SierraCourt StFrancisDrive West Bayshore Road Tanland Drive East Bayshore Road woodDrive Edgewood Drive WildwoodLane Ivy Lane East Bayshore Road St Francis Drive Wildwood Lane Watson Court Laura Lane Sandalwood Ct O'Brine Lane (Private) Embarcadero Road FaberPlace Embarcadero Road Geng Road Embarcadero Way E Sand Hill Road Quarry Road Welch Road Arboretum Road Quarry Road Sand Hill Road Homer Avenue Lane 8 West Medical Foundation Way Lane 7 West Lane 7 East Embarcadero Road Encina Avenue El Camino Real Urban Lane Wells Avenue Forest Avenue High Street Emerson Street Channing Avenue Alma Street Alma Street PaloAltoA El Camino Real venue Mitchell Lane Hawthorne Avenue Everett Avenue Lytton Avenue Lane 15 E High Street Alma Street Bryant Street Lane 6 E Lane 11 W Lane 21High Street Gilman Street Hamilton Avenue University Avenue Bryant Court Lane 30 Florence Street Kipling Street Tasso Street Cowper Street Ruthven Avenue Hawthorne Avenue Lane 33PaloAltoAvenue Everett Avenue Poe Street Waverley Street Tasso Street Cowper Street Palo Alto Avenue Webster Street Everett Court Lytton Avenue Byron Street Fulton StreetMiddlefield Road Churchill Avenue Lowell Avenue Seale AvenueTennyson Avenue Melville Avenue Cowper Street Tasso Street Webster Street Byron Street North California Avenue Coleridge Avenue Waverley Street Bryant Street Emerson Street Kellogg Avenue Kingsley Avenue Portal Place Ross Road Oregon Avenue Garland Drive Lane A West Lane B West Lane B East Lane D West Lane 59 East Whitman Court Kellogg AvenueEmbarcadero Road Kingsley Avenue Lincoln AvenueAddison Avenue Lincoln Avenue Forest Avenue Downing Lane Homer Avenue Lane D East Lane 39 Lane 56 Hamilton Avenue Webster Street Waverley Street Kipling Street Bryant StreetRamona Street Addison AvenueScott Street Byron Street Palo Hale Street Seneca Street Lytton Avenue Guinda Street PaloAltoAvenue Fulton StreetMiddlefield Road Forest Avenue Webster Street Kellogg Avenue Middlefield Road Byron Street Webster Street Cowper Street Tasso Street Cowper Street Addison Avenue Lincoln Avenue Boyce Avenue Forest AvenueHamilton Avenue Homer AvenueGuinda Street Middlefield Road Channing Avenue AltoAvenue Chaucer Street Chaucer Street University Avenue Channing Avenue Addison Avenue Lincoln Avenue Regent Pl Guinda StreetLincoln Avenue Fulton Street Melville Avenue Byron Street Kingsley Avenue Melville Avenue Hamilton AvenueHamilton Court Forest AvenueForest Ct Marlowe St Maple Stree Palm Street Somerset Pl Pitman Avenue Fife Avenue Forest Avenue Dana Avenue Lincoln Avenue University Avenue Coleridge Avenue Lowell Avenue Fulton StreetCowper Street Tennyson Avenue Seale Avenue Northampton Drive West Greenwich Pl Middlefield Road Newell RoadGuinda Street East Greenwich Pl Southampton Drive Webster Street Kirby Pl Kent Place Tevis Pl Martin Avenue Center Drive Harriet Street Wils o n S t r e e t Cedar Street Harker Avenue Greenwood Avenue Hutchinson Avenue Channing Avenue Hopkins Avenue Embarcadero Road Ashby Drive Dana Avenue Hamilton Avenue Pitman Avenue Southwood Drive West CrescentDrive C University Avenue Center Drive East Crescen Arcadia Place Louisa Court Newell Pl Sharon Ct Erstwild Court Walter Hays Drive Walnut Drive Newell Road Parkinson AvenuePine Street Mark Twain Street Louis RoadBarbara Drive Primrose Way Iris Way Embarcadero Road Walter Hays DriveLois Lane Jordan Pl Lois Lane Heather Lane Bret Harte Street Stanley Way De Soto DriveDe Soto Drive Alester Avenue Walter Hays Drive Channing Avenue Iris Way tDrive Dana Avenue Hamilton AvenueNewell RoadKings Lane EdgewoodDrive Island Drive Jefferson Drive JacksonDrive Patricia LaneMadison Way EdgewoodDrive Ramona Street Addison AvenueChanning Avenue Waverley Street Tennyson Avenue Seale Avenue Middlefield Road Byron StreetWebster Street Marion AvenueWelch Road Sedro Lane Peral Lane McGregor Way Monroe Drive Silva Avenue Silva Court Miller Court Briarwood Way Driscoll Place Paulsen Ln Community Lane Lane 15 E Court Madeline Ct David Ct Green Ct Oregon Expressway Oregon Expressway Sheridan Avenue Page Mill Road Page Mill Road Foothill Expressway Miranda Avenue Foothill Expressway Cerrito Way Emerson Street Miranda Avenue Lane 20 WLane 20 E Oregon ExpresswayUniversity Avenue Jacob's Ct CalTrain ROW CalTrain ROW CalTrain ROW CalTrain ROW Emerson Street Waverley Street Kipling Street Clark Way Durand Way Sand Hill Road Swain Way Clark Way Mosher Way Charles Marx Way Orchard Lane Vineyard Lane Oak Road Sand Hill Road Sand Hill Road Sand Hill Road Hillv Lane 66 Bryant StreetRamona Street Blake Wilbur Drive West Charleston Road Bayshore Freeway Bayshore Freeway Bayshore Freeway West Bayshore Road East Bayshore Road East Bayshore Road East Bayshore Road West Bayshore Road East Bayshore Road Bayshore Freeway Bayshore Freeway Fabian Way Bayshore Freeway Bayshore Freeway Palo Road Shopping Center Way Shopping Center Way Shopping Center Way London Plane Way Plum Lane Sweet Olive Way Pear Lane Lane 66 La Selva Drive Grove Ct Stanford Avenue Lane 12 WLane 5 E Lasuen Street Serra Mall Escondido Road Olmsted Road Phillips Road Pistache Place Santa Ynez Street Lane B Lane C El Dorado Avenue Oak Creek Drive Clara Drive Bellview Dr Everett Avenue Homer Avenue La Calle SAN ANTONIO AVENUE Matadero Ave Colorado Pl Los Robles Avenue Timlott Ct Vista Villa PaloAltoAvenue Lane La Donna Avenue Cass Way Kenneth Drive Fabian Way Page Mill Road Middlefield RoadChristine Drive Louis Road Charleston Road Bayshore Freeway Bayshore Freeway Chimalus Drive Hanover Street Community Lane Greenwood Avenue Harker Avenue Parkinson Avenue Avenue Maplewood Pl Mackay Drive Santa Teresa Lane Byron Street Varian Way Quail DrQuail Dr Paloma Dr Paloma Dr Trinity Ln Heron Wy Feather Ln Stanislaus LnTuolu mne Ln Plover Ln Sandpiper Ln Curlew Ln Mallard LnEgret Ln Klamath Ln Deodar StAlder LnSpruce Ln Rickey's Ln Juniper Way Rickey's Wy Rickey's Wy Rickey's Wy Juniper Lane Emerson Street Boronda Lane Tahoe Lane Lake Avenue Donner Lane Almanor Lane Fallen Leaf Street Berryessa Street Cashel StNoble St Hettinger Ln Pratt Ln Emma Court Galvez Mall Federation Way Abrams Court Allardice Way Alta Road Alvarado CtAlvarado Row Angell Court Arguello Way Arguello Way Avery Mall Ayrshire Farm Lane Barnes CourtBonair Siding Bowdoin Street Cabrillo Avenue Cabrillo Avenue Campus Drive Campus Drive Campus Drive Campus Drive Campus DriveCampus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus Drive Campus DriveCampus Drive Campus Drive Capistrano Way Casanueva Place Cathcart Way Cedro Way Cedro Way Churchill Mall Comstock Circle Aboretum Road Aboretum Road Blackwelder Court Campus Drive Cathcart Way Constanzo Street Cooksey Lane Coronado Avenue Cottrell Way Cottrell Way Cowell Ln Crothers Way Dolores Street Dolores Street Dudley Lane Duena Street Electioneer Road Escondido Mall Escondido Mall Escondido Road Escondido Road Escondido Road Esplanada Way Estudillo Road Fremont Road Frenchmans Road Frenchmans Road Galvez Mall Alvarado Row Galvez Street Galvez Street Galvez Street Gerona Road Gerona Road El Escarpado Gerona Road Hoskins Court Hulme Court Jenkins Court Junipero Serra Boulevard Junipero Serra Boulevard Junipero Serra Boulevard Junipero Serra Boulevard Knight Way Lagunita Drive Lane L L ane W Lasuen Mall Lasuen Mall Lasuen Mall Lasuen Street Lathrop Drive Lathrop Drive Lathrop Place Lathrop Drive Links RoadLinks Road Lomita Drive Lomita Drive Lomita Drive Lomita Drive Lomita DriveLomita Court Lomita Mall Los Arboles Avenue Masters Mall Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue Mayfield Avenue McFarland Court Mears CourtMears Court Memorial Way Mirada Avenue Mirada Avenue Museum Way N Service Road N Tolman Ln Nelson Mall Nelson Road North-South Axis Oberlin St Comstock Circle Escondido Mall Olmsted Road Olmsted Road Olmsted Road Olmsted Road Olmsted Road Palm Drive Palm Drive Pampas Lane Panama Mall Panama Mall Panama Street Panama Street Pearce Mitchell Pl Peter Coutts Circle Peter Coutts Road Peter Coutts Road Pine Hill Court Pine Hill Road Quarry Extension Quarry Road Quillen Ct Raimundo Way Rai mundo Wa y Raimundo Way Roble Drive Rosse Lane Roth Way Roth Way Roth Way Running Farm Lane Ryan Court S Service Road S Tolman Ln Salvatierra Street Salvatierra St Salvatierra Walk Samuel Morris Wy San Francisco Terrace San Francisco CourtSan Juan St San Juan St San Rafael Pl Santa Fe Avenue Santa Maria Avenue Santa Teresa Street Santa Teresa Street Santa Ynez Street Searsville Road Sequoia Wy Serra Mall Serra Street Serra Street Serra Street Sonoma Terrace Stanford Avenue Stanford Avenue Stock Farm Road Thoburn Court Tolman DriveValdez Place Valparaiso Street Vernier Place Via Ortega Via Palou Via Pueblo Mall Welch Road Wellesley St Wilbur Way Wing Place Yale St Alma Street Alma Street Alma Street Alma Street Alma Street Hawthorne Avenue Lytton Avenue Alpine Access Road Nathan Abbott Way Sam McDonald Road Sam McDonald Mall Vista Lane Bowdoin Lane Arguello Way Governors Avenue Governors Avenue Governors Avenue S Governors Lane Pasteur Drive Lagunita Drive Alma Village Lane Alma Village Circle R e s e r v oir R o a d Reservoir Road Reservoir Road Ranch Road Ryan Lane O'Connor Lane Gene CtBrassinga Ct Cole Ct Birch Street Arboretum Road Welch RoadPasteur Drive Pasteur Drive This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Commercial & RT Zoning Districts - Office is a Permitted Use w/ Possible GF & Size Limitations ROLM & RP Zoning Districts - Office and R & D is a Permitted Use MOR Zoning District - Medical Office is a Permitted Use PF Zoning District - Office is a Conditional Use GM Zoning District - R & D is a Permitted Use & Office is a Conditional Use Stanford Research Park Annual Office and R&D Cap Area Boundaries City Jurisdictional Limits abc Note: Other uses where Office may be an "accessory use" maybe conditionally permitted in Residential Zoning Districts 0' 2200' Of f i c e a n d R & D An n u a l C a p B o u n d a r i e s Ar e a M a 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 2015 City of Palo AltoRRivera, 2015-10-01 11:54:38 (\\cc-maps\gis$\gis\admin\meta\view.mdb) * Providing projects are ready for approval by March 30, 2018. Updated by Planning Division, January 24, 2018 Projects Subject to the Annual Office Limit for FY2016-FY2018 Approved Office Projects Fiscal Year Address Project Description Location Net New Office Area 2016 2747 PARK BL R&D: New three-story 33,323 sq. ft. research and development building, replacing the existing 4,800 sq. ft. commercial building. Zoning District: General Manufacturing (GM). [14PLN-00388] California Avenue 28,523 sq. ft. 2016 3225 EL CAMINO REAL Mixed-use: New 29,249 sq. ft. mixed-use project, replacing the existing 7,000 sq. ft. retail building, which includes eight residential units and 11,984 sq. ft. of commercial space (retail & office). Zoning District: CS Service Commercial. [15PLN-00003] El Camino Real Corridor 2,932 sq. ft. 2016 2585 EL CAMINO REAL Mixed-use: New three-story mixed use building including 19,954 sq. ft. of commercial space (retail & office) and 13 residential condominium units. Zone Districts: CN, CC(2). [15PLN-00170] El Camino Real Corridor 9,408 sq. ft. TOTAL 40,863 sq. ft. Fiscal Year Address Project Description Location Net New Office Area 2017 NONE Pending Office Projects Fiscal Year* Address Project Description Location Net New Office Area 2018 3045 PARK BL R&D: New two-story 29,120 sq. ft. R&D building replacing the existing 17,956 sq. ft. commercial/office building and construct a. Zone District: GM(AD). [17PLN-00073] California Avenue 11,164 sq. ft. 2018 3585 EL CAMINO REAL Mixed-use: New three-story mixed use building including 3,126 sq. ft. of office and two residential condominium units. Zone Districts: CN. [17PLN- 00305] El Camino Corridor 3,126 sq. ft. 2018 400 EMERSON Conversion of a financial services use to office use on the ground floor. [17000-02763, U&O] Downtown 2,500 sq. ft. Total 16,790 sq. ft. Fiscal Year CalAve* Downtown* ECR* SRP Other Areas Total (sq. ft.) 2001 5,828 9,601 2,080 155,930 22,600 196,039 2002 4,490 42,210 1,191 32,433 9,950 90,274 2003 0 0 0 0 0 0 2004 0 0 0 4,198 492 4,690 2005 26,320 10,201 0 0 ‐85,639 ‐49,118 2006 1,860 76,268 6,185 0 ‐164,152 ‐79,839 2007 60,703 410 0 5,700 ‐248,958 ‐182,145 2008 0 10,535 0 0 ‐15,442 ‐4,907 2009 1,754 0 0 0 ‐66,000 ‐64,246 2010 0 17,510 33,979 0 0 51,489 2011 0 28,148 0 35,000 5,690 68,838 2012 58,473 48,356 0 26,745 ‐162 133,412 2013 0 26,739 2,775 49,000 0 78,514 2014 45,406 45,608 0 11,571 ‐43,040 59,545 2015 58,840 0 0 0 14,608 73,448 2016 42,189 ‐9,203 12,340 47,141 0 92,467 2017 0 0 0 36,357 0 36,357 Total (sq. ft.) 305,863 306,383 58,550 404,075 ‐570,053 504,818 AOL Area* Citywide Citywide w/o SRP Total Development (sq. ft.): 670,796 504,818 100,743 Average Annual Development (sq. ft.): 39,459 29,695 5,926 Summary of Office/R&D Development FY2001‐FY2017 Notes: 1. Data shown is from VTA's Congestion Management Program's (CMP) and reflects office and R&D uses that is  derived from Planning Entitlements from FY 2001‐ FY 2017.  2. Data excludes Stanford University Medical Center (SUMC) expansion and Mayfield Development Agreeement  Projects, which demolishes approximately 323k of non‐residential square feet and replaces 300k of demolished  square feet in Stanford Research Park (SRP). *The Annual Office Limit (AOL) affects primarily three commercial areas in the City: Donwtown, California Avenue  area, and the El Camino Corridor. Prepared by Planning Division August 2017 INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 1 CITY OF PALO ALTO INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE February 17, 2016 Pursuant to the authority granted by Palo Alto Municipal Code (“PAMC”) Section 18.85.208, the following Interim Office/R&D Annual Limit Program Guideline (“Guideline”) is hereby adopted and determined to be desirable for the implementation and enforcement of PAMC Section 18.85.200 (Annual Office Limit) of PAMC Chapter 18.85 (Interim Zoning Ordinances). All defined terms used in this Guideline shall have the meaning set forth in PAMC Section 18.85.201. Overview: The purpose of this Guideline is to implement the annual limit on Office/R&D development adopted by Ordinance Number 5357 on October 26, 2015. The annual limit was adopted on an interim basis for two years (until November 26, 2017) or until the Comprehensive Plan Update is completed, whichever occurs first. No more than 50,000 gross square feet of new Office/R&D development can be approved within a given fiscal year in the subset of the City shown in Attachment A and adopted as Exhibit A of Ordinance 5357. This Guideline is intended to implement the interim annual limit in Fiscal Year 2015/16 and Fiscal Year 2016/17. Program Guideline: A. Applicability. This Interim Office/R&D Annual Limit Program Guideline is applicable to all discretionary development applications proposing an increase in gross square footage devoted to one or more of the following uses,1 when the site is located within the area shown on Exhibit A of Ordinance 5357: • Research & Development as defined in PAMC Section 18.04.030(123) • Administrative Office Services as defined in PAMC Section 18.04.030(6) • General Business Office as defined in PAMC Section 18.04.030(61) • Medical Office as defined in PAMC Section 18.04.030(95) • Professional Office as defined in PAMC Section 18.04.030(116). Building permit applications and associated use and occupancy certificates are not discretionary and applications proposing use or reuse of existing building space via non-discretionary applications are not subject to the Interim Office/R&D Annual Limit. B. Exemptions. Exempted applications, as defined below, shall be processed in accordance with applicable sections of the PAMC without regard to the 1 The text of the cited definitions is included in Attachment B. INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 2 procedures established by this Guideline. The decision to approve or disapprove such applications shall be appealable to the City Council in accordance with existing provisions of the PAMC. An applicant may request in writing a formal determination that a pending application is exempt pursuant to one of the exemptions outlined below at any time. The resulting written determination shall be considered a code interpretation that is appealable to the City Council consistent with Section 18.01.025 of the PAMC. 1. Accessory office space that is incidental to and customarily associated with a principal use or facility. Examples include a small office space used in conjunction with a retail establishment, a hotel, a school, or a religious institution. 2. City office space. 3. Any application proposing less than 2,000 new gross square feet of Research & Development, Administrative Office Services, General Business Office, and/or Professional Office, where such application does not also involve the Medical Office exemption in item (4) below. 4. Any application proposing a project containing less than 5,000 new gross square feet of Medical Office, where such application does not also involve the exemption in item (3) above. 5. “Pipeline Projects” as follows: a. Projects which obtained a planning entitlement prior to the effective date of Ordinance 5357 (November 25, 2015). b. Projects which are the subject of a planning entitlement application that was submitted to the City in 2013 or 2014 and deemed complete by the City on or before March 31, 2015. C. “Self-Mitigating Projects” which provide rental housing for more members of the workforce than would be employed in the project, and which provide substantial transportation demand management (TDM) strategies either individually or in combination with other projects or programs such that parking and traffic conditions in the site vicinity would be improved. D. Economic Hardship Waiver or Adjustment. An applicant may request that requirements of Ordinance 5357 be adjusted or waived based upon showing that applying the requirements of Ordinance 5357 would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property. INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 3 1. The applicant shall bear the burden of presenting evidence to support a hardship-related waiver or modification and shall submit an economic analysis along with an explanation of the factual and legal basis for the claim to the Director of Planning. 2. The Director of Planning shall review the request and forward it to the City Council with a recommendation within 60 days. The City Council shall consider the request at a noticed public meeting, along with the economic analysis and the Director’s recommendation, and provide a final decision to grant or deny the request. E. Processing and review of applications subject to the Interim Office/R&D Annual Limit. 1. Applications subject to the Interim Office/R&D Annual Limit shall be processed in accordance with the PAMC and the California Environmental Quality Act (CEQA), except that neither the Director of Planning nor the City Council shall adopt the CEQA document or act upon any such applications between July 1 and March 31 of each year. 2. The Director of Planning shall review all such applications that are pending final action by the Director of Planning or City Council as of the close of business on March 31 of each year, and determine which applications are eligible for consideration. a. Pending applications only become eligible for consideration if they have been recommended for approval by the Architectural Review Board (ARB) and the Planning & Transportation Commission (PTC – for Site and Design and rezoning applications only), and if review pursuant to CEQA has been completed. For purposes of this section, subdivision requests accompanying entitlement applications do not need to be submitted or processed. b. Applications that are not eligible for consideration at the close of business on March 31 will be reviewed for eligibility in the following fiscal year unless the 50,000 square foot annual limit has not been reached as described in paragraph (c) below. In this case, additional applications may become eligible and be considered between March 31 and June 30, as long as the 50,000 square foot annual limit is not reached. 3. If the sum total of new square footage proposed by all eligible applications on the close of business on March 31 is 50,000 square feet or less, all of the applications will be acted upon by the approving authority established in the PAMC. For example, the Director of Planning would act upon Architectural Review applications, and that action would be appealable to the City Council. INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 4 The City Council would act upon applications requiring Site and Design or rezoning. 4. If the sum total of new square footage proposed by all eligible applications on the close of business on March 31 is greater than 50,000 square feet, the Director of Planning shall prepare the applications for hearing by the City Council as follows: a. At an initial hearing, the Director shall provide the City Council with all pending applications, including required CEQA documents, recommended findings and conditions of approval. Each applicant will be invited to present their project at the initial hearing, and the City Council may provide comments and direction regarding the recommended findings and conditions. The initial review of the eligible projects by the City Council may be spread over more than one meeting if time does not allow review of all projects on one meeting agenda. i. If the City Council is unable to support approval of the required CEQA document or the required findings for any of the eligible projects, it may direct staff to prepare findings for denial or impose conditions that will permit it to make the necessary findings. ii. Projects that are denied based upon not meeting required findings for approval are no longer eligible projects and the applicant must submit a new planning entitlement for a substantially different project for proposed development at the same site. b. At a second public hearing, the Director shall provide the City Council with a recommended ranking of the eligible applications using the scoring criteria included below. The Director may convene a panel consisting of the Chair of the ARB and the Chair of the PTC to assist in the ranking. At the second public hearing, the City Council shall review the Director’s recommendation and select the projects that shall receive an office/R&D allocation. The projects selected shall receive planning entitlement approval at the same hearing, which shall occur before the end of the fiscal year on June 30. The City Council shall approve, deny, or approve as modified the project(s) receiving an office/R&D allocation. c. Any application that is not approved by the City Council solely because it exceeds the office/R&D allocation shall be denied unless the applicant requests that the project be rolled over for consideration in the next fiscal year. In addition, the applicant may request his/her application be rolled over to the next fiscal year if the City Council INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 5 proposes to modify the project by reducing its square footage and the applicant declines to do so. A project can be rolled over only one time. F. Expiration of Office/R&D Allocation. Once a project has been approved, all applicable entitlement timelines apply to the project, including the expiration of approvals. If an entitlement expires, the approved allocation also expires. The allocation cannot be carried over to another development proposal; it must be used for the approved project or it will be lost. G. Review Criteria and Scoring. 1. Eligible applications that were deemed complete by the City between March 31 and June 15, 2015 shall have priority over other projects and shall be evaluated against each other and granted an allocation before other eligible applications are considered 2. Review criteria are established in Ordinance 5347 as follows: Impacts a. The density of the development in the context of underlying zoning and the site surroundings; and b. The ability to avoid or address potential impacts on traffic and parking; Design c. The quality of design, including the attention to human scale where the building(s) meet the street, the compatibility with surroundings, and the overall architectural quality; and Environmental Quality d. Environmental quality Public Benefit e. The value to the community of public benefits offered; and Uses f. Mixed use projects including substantial housing; and g. Mixed use projects including retail; and h. Mixed use projects that provide space for cultural amenities such as but not limited to art galleries and studios 3. The Director’s recommendation shall be based on an evaluation of eligible applications weighting the review criteria as shown in the score card in Table 1, below. All projects will be ranked against each other according to the point totals they receive. 4. The City Council may accept the Director’s recommendation or modify it based on its independent review of the criteria, and shall determine which eligible applications will be approved, approved with modifications, or INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 6 denied, such that the total square footage approved does not exceed 50,000 new gross square feet of the uses listed in Section A, above. INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 7 Table 1. Interim Office/R&D Annual Limit Scoring (One Score Card Shall be Used to Evaluate Each Eligible Application) Project Address and APN: Net New Square Footage Requested: Brief Project Description: Scoring Criterion Total Possible Score Considerations for Each Criterion Project Score Explanation 1. Impacts 30 a. The density of the development in the context of underlying zoning and the site surroundings 10 Projects will be ranked against each other, with the most points awarded to the project that does not require variances or exceptions from applicable quantitative standards of the code and that is deemed to be most consistent in terms of its mass and scale with nearby buildings. 1 b. The ability to avoid or address potential impacts on traffic and parking 20 Projects will be ranked against each other, with the most points awarded to the project resulting in the least traffic and the least potential for unmet parking demand, regardless of whether these impacts are considered significant pursuant to CEQA. 2. Design 20 c. The quality of design, including the attention to human scale where the building(s) meet the street, the compatibility with surroundings, and the overall architectural quality 20 Projects will be ranked against each other, with the most points awarded to the project with the highest quality of design. Rankings will consider how the buildings address the street and their compatibility with surrounding buildings. INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 8 Scoring Criterion Total Possible Score Considerations for Each Criterion Project Score Explanation 3. Environmental Quality 20 a. Environmental quality 20 Projects will be ranked against each other, with the most points awarded to project that avoids significant environmental impacts under CEQA and that is designed to enhance the built and natural environment. Enhancements may include, but are not limited to, incorporation of energy conservation, storm water, and sustainability features above and beyond legal requirements, as well as incorporation of vegetation/landscaping and bird friendly design. 4. Public Benefit 20 b. The value to the community of public benefits offered 20 Eligible projects will be compared to each other in terms of their value to the community, with the top project receiving up to 20 points and other projects receiving lower rankings based on their relative benefits. For purposes of this section, the value of public benefits may be qualitative or quantitative.2 5. Uses 20 c. Mixed use projects including substantial housing 10 Projects will be ranked against each other with the most points awarded to the project with the greatest number of dwelling units.3 d. Mixed use projects including retail 5 Projects will be ranked against each other based on their mix of uses, including the quantity of ground floor retail.3 e. Mixed use projects that provide space for cultural amenities such as but not limited to art galleries and studios 5 Projects will be ranked against each other based on their mix of uses, including retail or personal services uses (galleries or studios) for use by artists, or space for other cultural uses. A project’s public art requirement does not count towards this.3 INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 9 Notes: 1. For purposes of this section, exceptions to the “Build to Line” standard and requests for parking reductions per PAMC Section 18.52.050 shall not be considered. Section 18.52.050 can be used to allow parking adjustments based on provision of on-site amenities, shared parking, senior housing, affordable housing, housing near transit, and TDM plans. 2. Benefits may be intrinsic to the project, such as affordable housing units, publicly accessible open spaces, publicly accessible off-street parking, community meeting space, or subsidized rent for community-serving non-profits. Benefits may also be extrinsic improvements or voluntary financial contributions to larger community initiatives. Some benefits may be quantifiable and some may not. 3. By rewarding provision of uses that may not be permitted in all zoning districts, this section effectively gives some priority to those projects that are proposed within districts that allow the desired uses (when those uses are incorporated into the proposed project). INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 10 Attachment A Map of Areas Subject to the Interim Office/R&D Annual Limit Attachment B Definitions of Relevant Office and R&D Uses from the Palo Alto Zoning Ordinance Land Use Code Section Definition Research & Development 18.04.030(123) "Research and development" means a use engaged in the study, testing, engineering, product design, analysis and development of devices, products, processes, or services related to current or new technologies. Research and development may include limited manufacturing, fabricating, processing, assembling or storage of prototypes, devices, compounds, products or materials, or similar related activities, where such activities are incidental to research, development or evaluation. Examples of "research and development" uses include, but are not limited to, computer software and hardware firms, computer peripherals and related products, electronic research firms, biotechnical and biomedical firms, instrument analysis, genomics, robotics and pharmaceutical research laboratories, and related educational development. Research and development may include the storage or use of hazardous materials in excess of the exempt quantities listed in Title 15 of the Municipal Code, or etiological (biological) agents up to and including Risk Group 3 or Bio Safety Level 3 classifications as defined by the National Institute of Health (NIH) or the Center for Disease Control (CDC). Higher classification levels of etiological (biological) agents are not allowed without express permission of the City Manager, Fire Chief, and Police Chief. Related administrative uses such as finance, legal, human resources, management, marketing, sales, accounting, purchasing, or corporate offices; provisions of services to others on or off-site; and related educational uses may also be included provided they remain primarily supportive of the primary uses of "research and development" and are part of the same research and development firm. Administrative Office Services 18.040.030(6) "Administrative office services" means offices and service facilities performing headquarters, regional, or other level management and administrative services for firms and institutions. General Business Office 18.040.030(61) "General business office" means a use principally providing services to individuals, firms, or other entities, including but not limited to real estate, insurance, property management, title companies, investment, personnel, travel, and similar services. Medical Office 18.04.030(95) "Medical office" means a use providing consultation, diagnosis, therapeutic, preventive, or corrective personal treatment services by doctors, dentists, medical and dental laboratories, and similar practitioners of medical and healing arts for humans, licensed for such practice by the state of California. Incidental medical and/or dental research within the office is considered part of the office use, where it supports the on-site patient services. Medical office use does not include the storage or use of hazardous materials in excess of the permit quantities as defined in Title 15 of the Municipal Code. Medical gas storage or use shall be allowed up to 1,008 cubic feet per gas type and flammable liquids storage and use shall be INTERIM OFFICE/R&D ANNUAL LIMIT GUIDELINE Revised February17, 2016 Page 12 Land Use Code Section Definition allowed up to 20 gallons total (including waste). Professional Office 18.04.030(116) "Professional office" means a use providing professional or consulting services in the fields of law, architecture and architectural design, engineering, accounting, and similar professions, including associated product testing and prototype development, but excluding product manufacturing or assembly and excluding the storage or use of hazardous materials in excess of permit quantities prescribed in Title 15 of the Municipal Code. City of Palo Alto (ID # 8234) City Council Staff Report Report Type: Action Items Meeting Date: 9/5/2017 City of Palo Alto Page 1 Summary Title: Annual Office Limit Ord Extension & Discussion for Replacement Ordinance Title: PUBLIC HEARING. Adoption of an Ordinance for an Extension of Interim Ordinance 5357 Imposing an Annual Limit of 50,000 Net New Square Feet of Office/R&D Uses in Designated Areas of City to June 30, 2018 as Recommended by the Planning and Transportation Commission on July 26, 2017 and Direction on a Replacement Ordinance. The Proposed Ordinance is Exempt From the California Environmental Quality Act (CEQA) in Accordance with CEQA Guidelines Section 15061(b)(3). From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council take the following action: 1. Find the proposed ordinance exempt from the provision of CEQA in accordance with CEQA Guidelines section 15061(b)(3); 2. Adopt an ordinance (Attachment A) to extend the existing interim Annual Office Limit Ordinance #5357 for an additional seven months to expire on June 30, 2018, allowing time for development and adoption of a replacement ordinance, as recommended by the Planning & Transportation Commission on July 26, 2017; and 3. Provide direction to staff regarding contents of a replacement ordinance for consideration at a future public hearing. At a minimum, City Council direction is needed to address the following issues and choices: A. Boundaries of the area that should be subject to the annual limit 1. Use the boundaries in the existing ordinance; 2. Make the ordinance apply citywide; or 3. Make the ordinance apply citywide, with the exception of the Stanford Research Park. City of Palo Alto Page 2 B. The quantitative annual limit 1. Continue to use 50,000 gross square feet (gsf) as the annual limit; or 2. Identify some other number of square feet as the annual limit. C. The fate of unused annual allocations 1. Do not roll-over unused allocations to future years; 2. Roll-over unused allocations for up to three years before they expire (or some other timeframe); 3. Roll-over unused allocations up to a numeric limit, such as 100,000 gsf per year; or 4. Allow allocations to roll over indefinitely. D. Uses that are exempt from the annual limit 1. Maintain the current list of exemptions for (a) office/R&D development less than 2,000 gsf; (b) medical office development less than 5,000 gsf; and (c) self-mitigating projects that propose sufficient housing to meet the housing demand of additional employment; or 2. Modify the current list of exemptions. E. The process for reviewing projects subject to the annual limit 1. Continue the current competitive process; 2. Use a first-come first-served process; or 3. Use some alternate or modified process. Executive Summary On September 21, 2015, the City Council adopted an interim ordinance establishing an annual limit on the amount of net new office/research and development (R&D) space that can be approved each fiscal year in specified areas of the City including Downtown, the California Avenue area, and the El Camino Real Corridor; this interim ordinance will expire on November 26, 2017. To allow sufficient time for staff to prepare the replacement ordinance and to assure no lapse in the regulations, an extension of the existing interim ordinance is proposed. In addition to the extension of the interim ordinance, staff also seeks direction from Council regarding the replacement ordinance for regulating office/R&D development. As indicated in the Recommendation above, items identified for Council’s comment and direction include the boundaries and quantitative size of the annual limit, as well as the fate of unused annual allocations, exempt uses, and the process for reviewing projects subject to the annual limit. More explanation is provided in the Discussion section below. Background The current City’s Comprehensive Plan contains an overall cap of 3.2 million square feet on the amount of non-residential development that can occur in Downtown and in “monitored areas” City of Palo Alto Page 3 of the City, but does not currently limit the pace of development.1 In the summer of 2014, conversations with the community, associated with early Comprehensive Plan update workshops, identified some frustration that the current Comprehensive Plan’s approach to growth management (i.e. an overall “cap” on non-residential development) has not been effective at moderating the pace of growth and development in the robust economic recovery following the recession. Based on these early communications, a growth management policy that moderated or metered the rate of development rather than the overall amount became the focus of discussions. This emphasis on the rate of development had its genesis in the impacts associated with increased employment in the City as experienced by Palo Alto residents. Impacts include traffic congestion/delay, parking demand, increased housing costs, and more. The objective of the annual limit is to moderate the pace of change by metering the rate of office/R&D development, thereby also reducing the rate of employment growth and related impacts. Over the course of six meetings from January through June of 2015, the City Council discussed the concept of limiting the pace of new office/R&D development, a discussion that resulted in the adoption of the Annual Office Limit (AOL) interim ordinance in September 2015. During the January 30, 2017 City Council hearing on the draft Land Use Element, Council directed staff to bring forward a replacement annual office limit ordinance separate from the Comprehensive Plan Update, affirming that the development limitations were to remain in effect on a continuing basis beyond the interim ordinance’s sunset date. Additional background information is available in earlier staff reports on this subject, including the Planning and Transportation Commission study session staff report dated March 29, 2017 (http://www.cityofpaloalto.org/civicax/filebank/documents/56641) and a City Council report for the approval of the original interim ordinance, dated September 21, 2015 (http://www.cityofpaloalto.org/civicax/filebank/documents/48971). Interim Ordinance (2015) In September 2015, Council adopted an ordinance to establish an annual limit on new office/R&D development in areas of the City experiencing the most rapid change. The ordinance applied to office development in fiscal years 2016 and 2017, established applicable land uses, designated areas affected, identified exemptions, and outlined other procedural items. The City Council also approved a process for proposals once the 50,000 sq. ft. limit is 1 The cap that applies to “monitored areas” of the City was established by Comprehensive Plan Policy L-8 and addresses all non-residential development, not just office/R&D. “Monitored areas” are illustrated in Comprehensive Plan Map L-6. The ongoing Comprehensive Plan Update is proposing to change this policy so it would place a cumulative cap on office/R&D uses citywide except at the Stanford University Medical Center (i.e. not just in “monitored areas”). The Comprehensive Plan Update does not contain a policy regarding an office/R&D annual limit, which the Council indicated it wished to adopt as a standalone ordinance. City of Palo Alto Page 4 reached. The ordinance was to be in effect for a limited duration to pilot the new, interim procedures and then determine future measures. As described later in this report, the 50,000 sq. ft. limit has not been exceeded during this pilot period. Below is a summary of the key elements of the ordinance. Please refer to Attachment B for additional details. Affected Area The interim ordinance applies to three primary commercial areas in Palo Alto: Downtown, California Avenue, and El Camino Real. These areas are delineated on the map (Attachment B, Exhibit A) included with the ordinance. Applicable Land Uses The following land uses, which are defined in Title 18 of the Palo Alto Municipal Code, are limited by the AOL Ordinance:  Research and Development  Administrative Office Services  General Business Office  Medical Office over 5,000 sq. ft.  Professional Office Exempt Projects There are three types of projects that qualify for an exemption from the limitations:  Small projects less than 2,000 sq. ft. and accessory office space that is incidental to principal use.  Small medical office less than or equal to 5,000 sq. ft.  Self-mitigating projects that provide rental housing to accommodate more workers than would be employed by the project and includes substantial transportation demand management strategies that improve current parking and traffic conditions. Process and Selection Criteria The interim ordinance requires the City to hold all approval-ready or “qualified” applications that are subject to the ordinance until March 31st each fiscal year. At that time, if the sum total of the applications does not exceed the 50,000 sq. ft. annual limit, the applications can be approved and the unused portion of the 50,000 sq. ft. limit expires at the end of the fiscal year. When the 50,000 sq. ft. limit is exceeded by the qualified projects pending on March 31st, the following criteria are to be analyzed and used by Council to evaluate and rank projects for approval or disapproval (projects that are identified for disapproval can be deferred to the next year at the request of the applicant): City of Palo Alto Page 5  Impacts: appropriate density of development; avoidance/mitigation of traffic and parking impacts.  Design: quality design and compatible with surrounding context.  Environmental Quality: degree of environmental impacts as determined in the California Environmental Quality Act (CEQA) analysis.  Public Benefit: meaningful public benefits included.  Uses: inclusion of mixed-use with substantial housing, retail, and cultural amenities. As shown in Figure 1, there are three primary steps that apply to office development. The first step in determining if the AOL thresholds apply is to inventory all qualifying projects on March 30 that are ready for action. Then, the second step is to calculate whether the 50,000 sq. ft. threshold has been triggered. If it has, then the projects would be evaluated based on the criteria listed above (e.g. impacts, design, public benefit, etc.) and ranked for Council review and action. If the threshold is not triggered, then the qualifying projects would follow the standard steps for review and action. Action on both categories of projects must be completed prior to the end of the fiscal year, June 30. Figure 1: Primary Decision Points in AOL Review Process Administrative Guidelines The administrative guidelines (Attachment C) were reviewed and approved by Council on February 8, 2016 and outline the procedural steps in more detail to streamline implementation. Additionally, the scoring process and “scorecard” for evaluation of projects are explained in finer detail. When qualifying projects exceed the 50,000 sq. ft. limit, each project will be City of Palo Alto Page 6 assigned points (based on criteria above) and then ranked; the Planning Director will provide Council with a recommended ranking for consideration. The guidelines also clarify that all Council approved entitlements would follow the standard review timelines (i.e. entitlement expiration, extensions, etc.) and if the applicant allowed the entitlement to expire, the approved square footage allocation associated with the project could not be rolled-over to another project; the approved project must use it or lose it. AOL Activity FY16-FY17 The first round of analysis for qualifying AOL projects was last year in March 2016 and the 50,000 sq. ft. limit was not exceeded; there were three projects proposed totaling 40,863 sq. ft. In March 2017, the 50,000 sq. ft. threshold was again not exceeded since there were no qualifying office projects ready for approval. For March 2018, there is one project on file so far with 11,164 sq. ft. of office that may potentially be ready for approval; it is not likely that another large office project, if submitted soon, would be ready for approval by March 2018. Staff’s observation is that projects proposed in the ordinance-affected areas of the City are either limiting their office use to less than 2,000 sq. ft. (to be exempt) or choosing to pursue other commercial and housing uses. Subsequent to the implementation of the AOL ordinance, there has not been any significant office development proposed in the ordinance-affected areas. Although the time period has been relatively short, it appears that the interim ordinance has reduced the amount of applications for net new office projects. A list of the AOL applicable projects referred to above is provided in Attachment F. Planning and Transportation Commission Review of Extension On July 26, 2017 the Planning and Transportation Commission (PTC) reviewed the proposed extension of the AOL ordinance and unanimously recommended approval. No changes were recommended for the extension ordinance. The PTC comments provided regarding the future replacement ordinance are discussed later in this report. The PTC meeting minutes are included as Attachment D, and the staff report is available online (https://www.cityofpaloalto.org/civicax/filebank/documents/58763 ). Planning and Transportation Commission Comments for Replacement Ordinance On March 29, 2017, the PTC discussed and provided a range of comments for the preparation of the replacement ordinance. The highlights of the comments are below:  AOL Intent: Several PTC members voiced strong concerns that the AOL was not the appropriate approach to address the concerns focused on traffic congestion and single occupancy vehicle (SOV) trips. One alternative approach that was suggested by one City of Palo Alto Page 7 commissioner included using both the AOL and traffic mitigation, and the AOL would sunset when effective mitigation measures were put in place (or the cap increased or restrictions lessened, etc.).  Competitive Process: The majority of the PTC expressed a preference for maintaining a competition; only two spoke against a competitive process and encouraged a first-come first-served approach. Additionally, it was suggested by one commissioner that for the formal evaluation process, the Architectural Review Board should be the judging panel and not a political body (i.e. City Council), so as to maintain a greater sense of impartiality.  FAR Exemptions: Two PTC members specifically mentioned that smaller office proposals should not be exempt from the regulations because cumulatively these smaller offices do add to the congestion impacts since these small businesses may be less likely to have a robust TDM program in place.  Boundary: Two PTC members specifically mentioned including Stanford Research Park (SRP) within the applicable boundary because the uses there generate the highest volume of SOV trips when compared to the other commercial areas in the City. It was also suggested that office development should be allowed or encouraged in areas that are most accessible by transit (i.e. Downtown and Cal Ave) and be more regulated in areas not well serviced by transit.  FAR Rollover: The majority of the PTC supported some type of rollover allowance but did not suggest specific criteria.  50,000 Square Foot Limit: It was suggested by one commissioner that the limit be reduced, but the majority of the PTC did not raise any concerns about the 50,000 sq. ft. threshold.  Self-Mitigating Projects: Several PTC members asked for information on examples of these types of projects. At the July 26, 2017 PTC meeting, two members of the public made comments directed towards the future replacement ordinance, not the interim ordinance extension. Both speakers stated that the 50,000 sq. ft. limit was too high; raised the concern about the jobs/housing imbalance; and thought the regulations should apply to the City as a whole, although one speaker specifically stated citywide minus the Stanford Research Park. The PTC minutes for March 29 are included in Attachment E; and the associated staff report is available online at (http://www.cityofpaloalto.org/gov/boards/ptc/default.asp). City of Palo Alto Page 8 Discussion The discussion items below are separated into those applicable to the existing interim ordinance extension and those focused on the replacement ordinance. A. Interim Ordinance Extension With the direction from Council in January 2017 to proceed in preparing on-going office limit regulations and with the interim ordinance due to expire in November 2017, staff is proposing an extension to the existing interim ordinance to provide staff sufficient time to complete the necessary preparation work; no changes are proposed. The interim ordinance extension would expire on June 30, 2018, which coincides with the end of the fiscal year. It is staff’s intent to have the replacement ordinance in place by this time so there is no lapse in the requirements. B. Future Replacement Ordinance In order to prepare an AOL ordinance to replace the interim ordinance, staff seeks direction from Council on any additions or modifications to the existing interim regulations. The discussion below is provided to facilitate focused feedback. At the time of the adoption of the interim ordinance in 2015 and in the recent January 2017 Council discussion, it was clear that Council intended to establish code changes to continue the development restrictions of the interim ordinance. On January 30, 2017, individual councilmembers commented on the AOL during their discussion of related Comprehensive Plan policies and indicated their support for expanding the affected area of the City (to the whole city minus the Stanford Research Park) and potentially dispensing with the competitive process (and transitioning to a first-come first-served system). The issues and options below have been highlighted to help guide the discussion for direction on the replacement ordinance. These issues reflect similar topics that the PTC commented on that are noted above. 1. Boundary The affected geographic boundary under the current interim ordinance includes areas in the City that have experienced the most rapid growth. Although the boundary does not precisely follow established business districts, it generally follows the Downtown, California Avenue, and El Camino Real commercial areas. The three suggested options include maintaining the current boundary or modifying it to apply the ordinance citywide, either including or excluding the Stanford Research Park (SRP). A map that indicates the areas within the entire City where office use is allowed is provided for reference as Attachment H.  Option 1: Maintain the existing boundary, which is limited to Downtown, California Avenue, and El Camino Real corridor. City of Palo Alto Page 9  Option 2: Apply Regulations Citywide. This option would encompass the SRP as well as all other parts of the city. The AOL regulations, if extended citywide, would apply only to new square footage not covered under the Mayfield Development Agreement (DA), an exception that could add some complexity to the program. Applying the AOL citywide would recognize there is additional development potential for office/R&D throughout the areas shown in Attachment H.  Option 3: Apply Regulations Citywide Excluding the SRP. This approach would apply the regulations to office development throughout the City with an exception for SRP. A potential reason to exclude the SRP is that it is a discrete geographic area with a development agreement in effect governing development. Also, with a single property owner, the City has a greater opportunity to negotiate agreements regarding development and the impacts of development. 2. Square Footage Limit On March 23, 2015, Council directed staff to use a 50,000 sq. ft. threshold for the annual limit for office development, based upon review of the VTA’s Congestion Management Program (CMP) office/R&D development data spanning 2001 through 2015. From 2001 through 2017, the CMP data shows there were six years when office/R&D development in the commercial districts affected by the interim ordinance exceeded 50,000 sq. ft. (FY2006, FY2007, FY2010, FY2012, FY2014, and FY2015). Within the three ordinance-affected areas, the average annual development over the 17 years was approximately 39,459 sq. ft., with a range from 0-106,829 sq. ft. A table summarizing this development activity is provided as Attachment G.2  Option 1: Maintain the existing 50,000 sq. ft. annual limit.  Option 2: Identify a new annual limit. 3. Unused Square Footage Allocations A related issue to the annual limit number is consideration of allowing the roll-over of unused floor area. The majority of the PTC supported the concept of rolling over unused floor area, but did not have any suggestions on how this should be managed. An indefinite roll-over (i.e. allocations roll over without restriction until they are used) could be seen as inconsistent with 2 The CMP data includes all office and R&D development, including projects that are exempt from the AOL ordinance. This explains the square footage difference in the CMP data (Attachment G) and the approved AOL projects (Attachment F) for FY2016. City of Palo Alto Page 10 the purposes of the AOL because it would defeat the goal of pacing the development and allow spikes to occur. Below are some options for consideration.  Option 1: Continue with no-rollover allowance.  Option 2: Allow floor area that is not allocated to a development project to carry over to subsequent years, but make it expire after three years (or another timeframe).  Option 3: Allow the roll-over of floor area that is not approved with a development project to carry over without expiration, but include a cap (e.g. 100,000 sq. ft.).  Option 4: Allow the roll-over of floor area that is not approved with a development project to carry over without expiration and continually add on to the yearly limit. 4. Exemptions As mentioned earlier, small office projects up to 2,000 sq. ft. and medical office up to 5,000 sq. ft. are exempt from the AOL under the interim ordinance. Several PTC members stated that all new office should count towards the 50,000 sq. ft. because, cumulatively, many smaller offices could have the same or more impacts as larger offices. The PTC discussion suggested that since these businesses are small, they potentially are less likely to have the resources or impetus to actively manage a Transportation Demand Management program for their individual businesses.  Option 1: Continue to exempt small projects (office/R&D development less than 2,000 gsf and medical office development less than 5,000 gsf) and self-mitigating projects that propose sufficient housing to meet the housing demand of additional employment.  Option 2: Modify the current list of exemptions. 5. Review Process The current process under the interim ordinance requires a competitive approach when the 50,000 sq. ft. threshold is exceeded. There is a subjective evaluation that must occur for each of the projects to rank them and forward to Council for consideration. This process is untested because thus far the 50,000 sq. ft. threshold has not been exceeded. Staff anticipates that this process may be challenging to implement because of its subjective nature. This process is also time-intensive for the applicant and staff, and does not provide any assurances to the developer that their project will be approved now or in the future. The natural side effect of this ambiguity is the reluctance of developers to propose office projects in the City. City of Palo Alto Page 11 An alternative to the competitive process is to approve projects on a first-come first-served basis. This approach would approve projects in order, based on the date the application is ready for approval. Any number of projects could be approved, depending on their size, up to and until the 50,000 sq. ft. threshold is reached. This approach would obviate the need for approvable projects to wait until March 30. This approach likely can be done in various iterations. Options for consideration are:  Option 1: Retain the existing competitive process.  Option 2: First-Come First-Served All projects follow the standard review steps as applicable to the project type (i.e. Architectural Review, Site & Design), but instead of sending projects to Council for action when the 50,000 sq. ft. threshold is exceeded, as required now, the applications would complete the applicable review, on first-come first-served basis3. Projects that cannot be approved for that fiscal year would be in the queue for approval in the following year.  Option 3: Consider an alternative or modified process. Staff would encourage the use of a first-come first-served process because it will be more straightforward to implement for both staff and property owners, while still achieving the purpose of metering office growth in designated areas of the City. Administrative Guidelines The current administrative guidelines will need to be modified based on the revised AOL ordinance. After receiving direction from Council, staff will prepare the revised guidelines and present then in tandem with a draft ordinance. Public Outreach In order to inform the community about the efforts to prepare the replacement Annual Office Limit ordinance, staff informed various known developers, property owners, architects, and resident groups about this meeting. Staff would welcome City Council input on the desired level of public outreach for the adoption of the replacement ordinance. At a minimum, staff will use electronic notification for interested parties and will maintain a project information page on the City’s website to keep the public up-to-date on meeting dates and staff reports. Policy Implications 3 The “first-come first-served” determination uses to the date a project is deemed complete according to the Permit Streamlining Act and not the date an application is filed with the City. Using the deemed complete date deters applicants from submitting incomplete application packages to simply secure an earlier filing date. City of Palo Alto Page 12 The proposed ordinance would seek to moderate the pace of development without changing the zoning regulations that affect land uses and densities. The annual limit program would complement and not replace growth management stategies in the current Comprehensive Plan, which consists of a cumulative cap on non-residential development Downtown and in “monitored areas” Citywide. In this way, the proposal would implement Comprehensive Plan Policy B-1 to “use a variety of planning and regulatory tools, including growth limits, to ensure that business change is compatible with the needs of Palo Alto neighborhoods.” Timeline The AOL interim ordinance (#5357), adopted on September 21, 2015, will expire on November 26, 2017. The approval of the attached extension ordinance would make the annual office limit effective for seven additional months, expiring on June 30, 2018. For the replacement AOL ordinance, staff anticipates returning to the PTC and City Council for review and final action in Spring 2018. 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 considered exempt under Title 14 California Code of Regulations Section 15061(b)(3) because it is a temporary measure designed to slow the rate of change in some commercial areas of the City. Attachments: Attachment A: Annual Office Limit Extension Ordinance (DOCX) Attachment B: Interim Ordinance #5357 Annual Office Limit (PDF) Attachment C: Interim Office/R&D Annual Limit Guideline (PDF) Attachment D: PTC Meeting Excerpt Minutes, July 26, 2017 (Ordinance Extension) (DOC) Attachment E: PTC Meeting Excerpt Minutes, March 29, 2017 (Comments on Permanent Ordinance) (PDF) Attachment F: Approved and Pending Office Projects Subject to the AOL Ordinance (DOCX) Attachment G: Office Development Summary FY 2001 to FY 2017 (PDF) Attachment H: Map Showing Where Office Use is Allowed in Palo Alto (PDF) CITY OF PALO ALTO CITY COUNCIL EXCERPT TRANSCRIPT   Page 1 of 85  Special Meeting September 5, 2017 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:08 P.M. Present: DuBois arrived at 5:24 P.M.; Filseth, Fine, Holman; Kniss arrived at 5:15 P.M.; Kou, Scharff, Tanaka, Wolbach 3. PUBLIC HEARING. Adoption of an Ordinance for an Extension of Interim Ordinance Number 5357 Imposing an Annual Limit of 50,000 net new Square Feet of Office/R&D Uses in Designated Areas of the City to June 30, 2018 as Recommended by the Planning and Transportation Commission on July 26, 2017; and Direction Regarding a Replacement Ordinance. The Proposed Ordinance is Exempt From the California Environmental Quality Act (CEQA) in Accordance With CEQA Guidelines Section 15061(b)(3). Mayor Scharff: Now, on to our first action item, which is the adoption of an ordinance for an extension of Interim Ordinance Number 5357 imposing annual limit of 50,000 net square feet of office/R&D use in designated areas. You want to take it away? Hillary Gitelman, Planning and Community Environment Director: Thank you, Mr. Mayor and Council. Hillary Gitelman, the Planning Director. While Claire is getting the presentation teed up, let me introduce her. This is Claire Campbell on our Staff, who I am sure you know already. The purpose of this item this evening is two-fold. One, we want to get the Council's action on an extension ordinance to extend the annual office limit ordinance a little longer to give us time to prepare a replacement ordinance. Then, secondly, we want the Council's direction on that replacement ordinance. Claire is going to go into the details here about the ordinance as it currently exists and what our proposals are. Claire Campbell, Senior Planner: Thank you. For a little bit of background, the—in the summer of 2014, during the Comprehensive Plan Update workshops, a concern was identified regarding the overall use of the development cap for regulating growth in the City. From these early discussions, focus shifted to a growth management policy that metered the rate of development rather than focused on the overall amount. By TRANSCRIPT    Page 2 of 85  City Council Meeting  Transcript:  9/5/17  metering development, the associated impacts such as increased employment, traffic congestion, and parking, etc., could also be better controlled. As a result of multiple Council discussions, the Office Limit Ordinance was adopted in September of 2015. It applied to two fiscal years, 2016 and '17. It currently will expire about halfway through fiscal year '18. The ordinance established a competitive process for evaluating office development including R&D within defined areas where office use is allowed. It also identified the annual development limit as 50,000 square feet of net new area. Soon after the ordinance was adopted, we established some administrative guidelines to facilitate the implementation of the ordinance. This map identifies the affected areas of the existing ordinance. We have the Downtown area including SOFA I. We have the California Avenue area and the El Camino Real Corridor. The current exemptions include small office projects that are less than 2,000 square feet and accessory office space, small medical office less than or equal to 5,000 square feet, and self- mitigating projects that provide rental housing to accommodate more workers than would be employed by the project and also includes substantial TDM strategies to improve current parking and traffic conditions. Another item that's also exempt but not listed here are City office spaces. That's listed in the ordinance. For the current review process, projects are submitted throughout the year for review, but no approval action can take place until the following steps have been accomplished. Step 1 is to establish a project list. On March 31st of the year, Staff will determine which projects are eligible for action. Ready for action means that the project has completed the Staff-level review, the environmental analysis, and also completed all of the public hearings with the exception of the Council review. That's all been completed, and now it's ready for moving forward. Once we have the project list, then we determine what the square footage is for these projects. If the projects are less than or equal to 50,000 square feet, then those projects would follow the standard review process. If those projects exceed the 50,000-square-foot threshold, those projects are then evaluated and ranked based on the criteria that's been adopted in the ordinance. That would be forwarded to Council for review and for action. This table provides a list of all of the projects that we've looked at so far, that are subject to the office limit for fiscal year 2016 and '17. You'll see that we don't have too many. For 2016, we had three projects, one R&D and two mixed-use, with a total of 40,800 square feet. For 2017, we did not have any projects. As of this time, we haven't yet exceeded the 50,000- square-foot threshold or implemented the competitive review process. This table provides an overview of the development within the ordinance-affected areas for the past 17 years. This is data that the City has provided to the VTA for the congestion management program. The line items that are highlighted in red show the 6 years where the office development has gone over the 50,000 square feet. We do have a range from 0 development to a TRANSCRIPT    Page 3 of 85  City Council Meeting  Transcript:  9/5/17  high of about 107,000 square feet. We have an average annual development of approximately 40,000 square feet. For those that may have noticed, there is a figure here for the 2016 development that's different from the previous slide. It's 45,326, and the previous slide had 40,863. It's roughly a 4,500-square-foot difference. This difference represents the net area of two projects. One of them was an approved pipeline project, and the second one was permanently removed office square footage. That is trying to hopefully explain that difference in the numbers. Now, we're moving on to the discussion for the replacement ordinance. The Planning and Transportation Commission conducted a study session earlier this year, in March 2017, and provided these comments. There was majority support for maintaining the competitive process for evaluating projects. There was a strong interest in establishing a rollover provision. Generally, there was no concern about the 50,000-square-foot limit. For these other items, there was limited support or mixed support for some of these issues. It was suggested that traffic mitigation measure was a better approach than the office limit to address traffic and congestion concerns. There was discussion about not exempting small projects because they cumulatively add impacts. The boundary should be Citywide and include the Stanford Research Park. Examples of self-mitigating projects was requested for a better understanding of what these would look like. Just for information, Commissioner Summa is here tonight if you have any questions. She can help follow up with anything. To organize our discussion tonight, we've highlighted five items to focus on. We're looking for Council direction on the boundary, the square footage limit, the disposition of unused floor area allocation, project exemptions, and the review process. This map is provided to show you all of the areas within the City where office use is allowed. The red outlined areas, of course, are the areas that are affected by the existing ordinance. We have areas in the Baylands off Embarcadero. There's West Bayshore, East Meadow Circle, San Antonio, and then we have Midtown in the middle, and we have Stanford Research Park. The idea of this is to give you the big picture view of all areas in the City where office can occur. This slide shows all of the office and R&D development Citywide for the past 17 years. I'm just going to focus on these bottom figures to give a summary. The existing annual office limit area. Over these last 17 years, there's been about 700 [sic] square feet of new office developed with an average annual development of about 40,000 square feet. Citywide this includes the Research Park and all of the other areas shown in that previous map. We've got approximately 500,000 square feet of new office development with an annual average of about 30,000 square feet. The last figure, if you take out the Research Park, you've got total development of 100,000 square feet with an annual average of about 6,000 square feet. Now, we're moving on to our first item. The first one is should the boundary be modified. Option 1 is to maintain the existing boundary, which is limited TRANSCRIPT    Page 4 of 85  City Council Meeting  Transcript:  9/5/17  to the Downtown, California Avenue, and the El Camino Real Corridor. Option 2 is to apply regulations Citywide, and this option would encompass the Research Park as well as other parts of the City. Option 3 is to exclude the Research Park from the Citywide total. The next issue is the 50,000- square-foot threshold. Option 1 is to maintain the existing 50,000-square foot limit. The second is to identify a new limit. The next item is the disposition of unused floor area allocation. Option 1 is to continue with the current process where the floor area does not roll over. Option 2 is to allow the unallocated floor area to roll over with a 3-year expiration. Option 3 is to allow the unallocated floor area to roll over without expiration but have a cap. Option 4 is to allow the unallocated floor area to roll over without expiration and continually add on to the yearly limit. The fourth item is whether or not the current project exemptions should be changed. Option 1 would be continue with the current exemptions for the small projects and the self-mitigating projects. Option 2 would be to modify the current list of exemptions. Lastly is the review process. Option 1 is to retain the current competitive process. Option 2 would be to use a first-come-first-serve process. This is Staff's recommendation. Option 3 is to consider an alternative process. For our next steps, the interim ordinance extension, if adopted, would be effective 31 days after the second reading, and it will expire on June 30, 2018. For the replacement ordinance, Staff will return to the Planning Commission with a draft ordinance in early spring next year and then return to Council shortly thereafter for review and action. We're going to summarize the motion here. Staff recommends that the Council find the proposed ordinance exempt from the provisions of CEQA; you adopt an ordinance to extend the existing interim office limit ordinance; and, three, provide direction to Staff regarding the contents of the replacement ordinance for consideration at a future hearing. That concludes the formal presentation. Staff has also developed five slides of the five discussion items along with the related options for you to reference during your discussion tonight. I can have those up as you do your talk. Thank you. Mayor Scharff: Thank you very much. That was a great presentation. Now, we have a couple of public speakers. The first speaker is Hamilton Hitchings, to be followed by Judy Kleinberg. You'll each have 3 minutes. Public Hearing opened at 6:39 P.M. Hamilton Hitchings: Job growth in Santa Clara is limited by the availability and affordability of housing. Ironically, I have seen a rapid building spree of office in Downtown Palo Alto. In fact, about 20 new office buildings have been completed recently and almost no apartment buildings. This is because the profit per square foot from building office space is higher than the profit from building multiunit housing. When housing is rarely built, the TRANSCRIPT    Page 5 of 85  City Council Meeting  Transcript:  9/5/17  higher cost is passed on to those most needing the housing units. In addition, this rapid office development has significantly worsened traffic and parking Downtown. Has the office cap helped? According to the Staff Report, subsequent to the implementation of the ordinance there has not been any significant office development proposed in the ordinance-affected areas. Projects proposed in the ordinance areas of the City are either limiting their office use to less than 2,000 square feet to be exempt or choosing to pursue other commercial and housing uses. During the same period, I have seen a number of multiunit housing projects proposed in Palo Alto and am optimistic we are in the process of seeing more of those. When we look at the availability of housing types in Palo Alto, multiunit is disproportionately low relative to the anticipated need. I believe that the area of the ordinance should be expanded to all of Palo Alto except for Stanford Research Park. The existing exemptions for small office and self- mitigating projects should be retained. If a rollover is added, it should be combined with a reduction of the annual office limit. Otherwise, this effectively negates the purpose of the ordinance in the first place, which is to limit the rate of growth. The Architectural Review Board should be the ones who make the selection process. We should eventually implement a housing overlay for the affected areas. Thus, the ordinance effectively addresses many of Palo Alto's top concerns as measured by the Citizens Survey. Thank you. Mayor Scharff: Thank you. Judy Kleinberg to be followed by Tiffany Griego. Judy Kleinberg: Good evening, Council. I'm representing the Palo Alto Chamber of Commerce. The fundamental reason for creating the annual office limit, to rein in office development, no longer applies. Office development did not reach the 50,000-square-foot number in either of the cap's 2 years of existence. It's unclear it was effective. Whether the cap reduced the appetite for building in Palo Alto or developers are looking at more receptive communities in which to invest or the market is softening, which developers have all reported, it's clear that there is no building boom here requiring a permanent cap. In addition, limiting office development creates added incentive to raise office rental rates on the existing supply. Three City-sponsored surveys confirm that the impacts on traffic are not from office workers, but rather retail and service workers. A cap won't solve this problem. Local housing of different sizes and affordability will. The business community and residents agree on this: we want more housing. Proposals for housing or mixed-use with housing near transit should be green lighted and put on a fast track for approval. These are the points I want to leave you with as you go through what the Staff has asked you to consider tonight. If you insist on a cap, leave the cap boundaries where they are now. There's no reason to extend it Citywide. Continue the TRANSCRIPT    Page 6 of 85  City Council Meeting  Transcript:  9/5/17  exemption for small projects to encourage small property owners to upgrade their properties that serve small businesses. They shouldn't be put into the same basket with the big developments. Do rollover the unused development allocation. There should be no beauty contest or compatibility contest, however you want to put that. This is really not properly put into the hands of the Council or the ARB. It should just be first-come-first serve. Focus on mixed-use near transit. Multiunit housing with some office and retail incentivizes developers to invest in our community. The cap is the wrong tool to solve the traffic and parking problems. The TMA is working. Support and expand the TMA to deal with traffic and parking problems. Let it mature for a few more years and see how it mitigates our current problems. Thank you. Mayor Scharff: Thank you. Tiffany Griego to be followed by former Vice Mayor Greg Schmid. Tiffany Griego: Good evening. My name is Tiffany Griego; I'm Managing Director of Stanford Research Park. Tonight, my goal is to give you a bit of background on why Council decided to exclude the Stanford Research Park from the annual office limit in 2015. I also want to make myself available to answer any questions about the Stanford Research Park. The first thing I noticed when I was looking at this chart is our numbers don't match. I'd like to sync up with you because I don't recognize the growth in the years 2014, 2016, or 2017. I'm speculating that that's maybe transferrable development rights from the Mayfield Agreement. I'd like to square away our numbers. Thank you. I wanted to say the pace of growth in the Research Park did not worry Council in 2015 because the growth had been so modest in the Research Park since the recovery of the dot com bust. The letter we provided you this evening shares our data that we have and demonstrates the growth trends that we've seen in the Research Park since about 2004. In 2015, when Council discussed the annual office limit, Council's primary interest was in seeing us serve as a catalyst to bring together the companies in the Research Park and develop a comprehensive, standard, ongoing TDM program. We've brought that to fruition. They also felt in 2015 that the annual office limit was not the right tool to address traffic congestion in the Research Park. Tonight, we respectfully urge that you maintain the existing boundaries of the annual office limit and continue to exclude Stanford Research Park. We continue to be equally concerned about traffic congestion in the Research Park, and our TMA is working together and privately funding a very robust TDM program. We have branded our program SRP Go. We have made huge strides over the last couple of years. I'd like to share some of these accomplishments with you. We have built up a direct-to-user marketing campaign in which we are now in regular contact with 10,000 commuters in the Research Park. In fact, we would like all of TRANSCRIPT    Page 7 of 85  City Council Meeting  Transcript:  9/5/17  you to subscribe to our newsletter so that you can see real-time the activities that we are launching for people. To sign up, just go to srpgo.com and click on a link called subscribe to receive monthly SRP Go commuter news in the red banner at the top of that page. That's at srpgo. Our stanfordresearchpark.com website has also been updated on the transportation page with a video of commuters telling real stories about their commutes and why they're interested in the services we offer. I encourage you to check that out as well. WE are continuing to gather data. In August, we hit the 1 million miles saved mark with our carpool app alone. We have also distributed VTA passes to over 15,000 people in the Research Park. We have launched a long-distance shuttle that we're privately funding to the west side of San Francisco. We've launched a new Marguerite shuttle to serve the California Avenue Caltrain station and to support the Cal. Ave. businesses there. We also actively advocate. We feel that we worked hard to save the VTA 89 bus from the chopping block. We also advocate on behalf of Palo Alto and the Research Park with Caltrain, SamTrans, Silicon Valley Bicycling Coalition, MTC, and ATC. We are eager to report back to you in March 2018 on our ongoing efforts and accomplishments. I thank you again for valuing Stanford Research Park in Palo Alto. Thank you. Mayor Scharff: Council Member Kniss has a question. Vice Mayor Kniss: Tiffany, before you go, you don't have to answer this, but we did discuss it at one other point. What is your vacancy rate running in the Park? Ms. Griego: Our vacancy rate has climbed in the past 12 months from 1.8 percent to about 9.3 percent. Vice Mayor Kniss: To what? Ms. Griego: 9.3 percent as of August 2017. Vice Mayor Kniss: 9.3 percent vacancy. Thank you. Mayor Scharff: Former Vice Mayor Schmid to be followed by Bob Moss. Greg Schmid: Thank you. I would encourage the Council to vote to extend the 50,000-square-foot limit. I would also recommend that it be extended to all monitored areas in Palo Alto, allowing current approved exemptions to continue. Start with some data. Since 1989 when the City started monitoring all commercial areas in Palo Alto, the average growth rate in square footage over that time has been 57,000 square feet. By putting a 50,000 limit only in three areas, you're in essence increasing that dramatically. It's important to recognize that we have a current crisis in TRANSCRIPT    Page 8 of 85  City Council Meeting  Transcript:  9/5/17  parking and traffic. If you look at your annual Citizens Survey, take the last 10 years, compare the last 2 years over the previous 8, questions on traffic concern has grown by 25 percent. Concern over public transportation has grown by over 50 percent. They've had a question on parking only 3 years. In those 3 years, concern has grown by 15 percent. In addition, we know that the Stanford Medical Center, exempted as it is, is going to add 1.3 million square feet of new workers commuting. It's going to start hitting us in 2018. Note also Stanford is negotiating with the County to add 2.3 million new square feet of buildings. Transportation mitigation must prove their worth dealing with existing traffic and parking problems before we add more. Vote for a 50K limit and vote to extend that limit to all monitored areas. Thank you. Mayor Scharff: Thank you. Bob Moss to be followed by Simon Cintz. Bob Moss: Thank you, Mayor Scharff and Council Members. I would like to see the ordinance extended and modified (inaudible) that are making some suggestions on changes. One of the ones I wanted to explain was I suggested reducing the exceptions for medical and office buildings slightly. The reason is the occupancy rates in those types of uses are higher now than they were a couple of years ago. You're going to have more intensive use if you have the same size building exempted. I suggest scaling it down slightly. In terms of development Citywide, this chart was interesting. In the last 16 years, if you only look at the three areas that are currently covered, El Camino, Downtown, and California Avenue, six times in 16 years we exceeded 50,000 square feet. If you add the Stanford Research Park in, that 50,000 square feet would have been exceeded 11 times, almost twice as often in 16 years, which is one of the reasons I think it's important to extend this Citywide and include the Research Park. Another thing I found interesting was over 500,000 square feet of office space was removed in other parts of the City. I was wondering where did that go to. My suggestion is that most of that went to housing. We're converting a lot of office space in other areas in the City into housing. Overall, the total office space, if you exclude Stanford, didn't increase that much in the last 16 years. Stanford plus the three areas that are covered was over 1 1/2 million square feet. That's quite a bit. Even after you reduce the 570,000 square feet that was removed all (inaudible) the City, we still added net about 650,000 square feet, which is a lot of office space. We have to start putting some controls on. We have to look at where we want to build offices. It's simpler and more rational to do it Citywide and not limit it to just those three areas. Particularly, excluding the Stanford Research Park is going to leave the door open for a lot more office development. Mayor Scharff: Thank you. Simon Cintz. TRANSCRIPT    Page 9 of 85  City Council Meeting  Transcript:  9/5/17  Simon Cintz: Good evening. My name is Simon Cintz. My family owns four small commercial properties in Palo Alto. These properties have been in our family since the 1950s. The largest building of these properties is two stories on El Camino with a total of 4,600 square feet. The bottom half is retail, and the top floor is office. It's been this way for over 50 years. The Council is considering removing the exemption for small office less than 2,000 square feet and the medical/dental exemption less than 5,000 square feet. I hope the Council will continue to preserve these exemptions for small projects. The Council sometimes forgets that not all commercial property owners who want to add office space are not developers or large corporations. There are a number of commercial property owners, much like our family, who own small properties that contribute to the Palo Alto community. To be clear, our family has no plans to convert any of our buildings to increase office space, but I felt it was important that someone speak for small commercial property owners like myself. Many small business owners and doctors and dentists in solo practice own their own buildings here in Palo Alto. By removing the exemption for small projects and throwing them into the same category as large projects, you have created an unfair burden on small property owners. Large developers may or may not find the office limit requirements economically bearable, but individual owners like our family would find them as insurmountable obstacles for small projects that don't have the economy of scale of large projects. I asked Ms. Claire Campbell what impact removing this exemption would have on small property owners. She answered that it's unclear at this point because the office limit ordinance is not final. However, I can guarantee that there will be no unfair impact on small property owners if these small projects continue to be exempt from the ordinance requirements. The Staff Report refers to people downsizing their projects to meet the small project exemption. If you want to limit office development, that's a good thing. Think about it. Also, do you really think the developer who wants to build 20,000 square feet of office is going to downsize to 2,000 square feet? It's more likely that those that chose to downsize were building projects that were slightly above 2,000 and decided to downsize to 2,000. Please remember that not all commercial property owners in Palo Alto are big developers. Please keep the current exemption for small projects. Thank you. Public Hearing closed at 6:57 P.M. Mayor Scharff: Thank you. Now, we return to Council. The way I want to break this up is to actually take the first two items first, which is find the proposed ordinance exempt and extend the ordinance. Then, we take three. I wanted to break it up into four separate votes, which would be the A, B, C, D, and E. Is that four or five? It's five. Into five separate votes on each of TRANSCRIPT    Page 10 of 85  City Council Meeting  Transcript:  9/5/17  those items, so we have a focused discussion as we go through the process. The first thing we'll talk about is Items 1 and 2. We can make Motions and have comments and ask questions. Council Member Wolbach. Council Member Wolbach: First, I just want to take the opportunity to thank Staff for a very excellent presentation. I thought the slides and the presentation really helped set us up for a good conversation tonight. The Mayor's suggestion of breaking up how we're going to go through this is a wise one. Thank you to everybody who came and spoke. I'd like to move the Staff recommendation for Items 1 and 2. Mayor Scharff: Do we have a second? I'll second it. Vice Mayor Kniss: Second. Mayor Scharff: Vice Mayor Kniss will second that. Would you like to speak to your Motion? MOTION: Council Member Wolbach moved, seconded by Vice Mayor Kniss to: A. Find the proposed Ordinance exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15061(b)(3); and B. Adopt an Ordinance to extend the existing interim Annual Office Limit Ordinance Number 5357 for an additional seven months to expire on June 30, 2018, allowing time for development and adoption of a replacement Ordinance, as recommended by the Planning and Transportation Commission on July 26, 2017. Council Member Wolbach: I don't think there's a need. Mayor Scharff: Vice Mayor Kniss. Vice Mayor Kniss: I'd echo what Council Member Wolbach just said. It's pretty self-explanatory. Mayor Scharff: Council Member DuBois. Council Member DuBois: I actually have some questions. Mayor Scharff: On those two items? Council Member DuBois: Yeah. On Slide Number 13, it's looking at the areas and the impacts. Could you explain the—right now, the Stanford … TRANSCRIPT    Page 11 of 85  City Council Meeting  Transcript:  9/5/17  Vice Mayor Kniss: Can you tell us what pages you're going on? Council Member DuBois: It's 13 of the presentation. Right now, the current annual office limit area does not include Stanford Research Park. Correct? These totals you have at the bottom, are these incremental totals? It says Citywide without Stanford Research Park. Is that the AOL area plus 100,000, so it's actually 770,000? Is that how I read that? Ms. Campbell: If you would follow the column down for the subtotal for the annual office area limit, you'll see that there's 670,000 for that total. Council Member DuBois: My point is that these … Mayor Scharff: If you could speak up a little bit. Council Member DuBois: My point is this Citywide should be a greater total than the AOL area total, but it's less. Ms. Campbell: That's because of the—there's a significant amount of demolition. Council Member DuBois: I see. Does that total include—it's 670 minus the 570, is what you're saying. Ms. Campbell: Yes, exactly. Council Member DuBois: The Stanford Research Park is not shown in—that's shown in the Citywide numbers, so that's also negative. When you look at the Stanford Research numbers, it's a positive total. Ms. Campbell: If you were to follow the total along the bottom, just don't look at the 670. When you add up the Cal. Ave. area, the Downtown, El Camino Real, Stanford Research Park and other areas, you're going to get a total of 504,000 square feet. Council Member DuBois: Got it. Thank you. Thanks for clarifying that. I just had a question, again, on impacts of the current ordinance. Have we seen submissions outside the boundary areas differing from inside the boundary areas in the last 2 years? Ms. Campbell: No, there hasn't been anything significant. Council Member DuBois: That's my question on these two items. I'll wait for the rest. TRANSCRIPT    Page 12 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: Anyone else want to comment on these two items? I see no other lights. I'm going to take a vote on it unless someone wants to talk on it. If we could vote on the—Tanaka. Sorry. Council Member Tanaka: Just a quick question. Does Staff know what the office rental rates are right now in terms of—we heard from Stanford it went from 1 percent to 9 percent vacancy. Do we know what the office vacancy rates have been in Palo Alto and how that's trended? Ms. Gitelman: We don't know offhand. We can certainly look that up. Mayor Scharff: If we could vote on the board now. That passes unanimously. MOTION PASSED: 9-0 Mayor Scharff: Now, we'll move on to Item Number 3. Vice Mayor Kniss: Mr. Mayor, might I just interrupt at this point? Mayor Scharff: Jump right in. Vice Mayor Kniss: If I might ask Judy Kleinberg if she knows what the vacancy rate is as head of the Chamber of Commerce. If you don't, it's fine. It's a figure we should have. Ms. Kleinberg: I don't know, but I can tell you that it will be hard to figure it out because there are some empty office buildings where some of our corporate members have moved out, and they are not up for re-rent. It's hard to say what's really empty and what isn't. We don't have an actual count. Vice Mayor Kniss: No one's in them, but they are still paying rent. Ms. Kleinberg: That's right. They're empty; that's right. Vice Mayor Kniss: Thanks. Mayor Scharff: the next Item is Item Number 3.A, which is the boundaries of the area that should … Vice Mayor Kniss: Wait. Should we vote on that? Mayor Scharff: We did and that passed unanimously. Boundaries of the area that should be subject to the annual limit. Seeing no lights, I will just TRANSCRIPT    Page 13 of 85  City Council Meeting  Transcript:  9/5/17  then say that I will move that we keep the existing boundaries in the City ordinance. Vice Mayor Kniss: Second Council Member DuBois: Second. Mayor Scharff: That's by Council Member DuBois. MOTION: Mayor Scharff moved, seconded by Council Member DuBois to direct Staff to include in the replacement Ordinance that the boundaries in the existing Ordinance should be subject to the Annual Limit. Mayor Scharff: I just want to say that there's no reason really to extend it to the Stanford Research Park. These are the critical areas, so we should just keep them where they are. Council Member DuBois. Council Member DuBois: We have our Planning Commission there to give us advice. I thought the Minutes were quite interesting. Appreciate the work the PTC did. I don't really see a reason not to follow their advice. One of the comments was interesting. If we have this apply to the current areas and we have Stanford Research Park not under this constraint, it gives us a real good kind of AB test comparison about the effects of an annual limit versus relying on TDM programs. I think it's a good comparison point, to actually keep them separate and see how it goes. Mayor Scharff: Council Member Holman. Council Member Holman: Related to this, the other areas that are on Slide 13—two things. One is could Staff respond to Tiffany Griego's comments about the development numbers in the SRP that are differing between their numbers and Staff's numbers in the chart. Ms. Gitelman: Yes. Thank you, Council Member Holman. I want to get together with Ms. Griego and make sure my assumption is correct. I think the numbers we're presenting reflect what we report to the VTA as the net increase in office/R&D. I think we've developed some kind of work-around for the square footage that was entitled through the Mayfield Development Agreement. What you're seeing is a difference based on how we do or don't report that square footage since it's already been entitled, but it's going to be metered out over time. I'll confirm that with Ms. Griego before we come back with a revised ordinance. Council Member Holman: Under other areas, the square footage that's been demolished, there are some pretty large numbers there. I'm not quite sure TRANSCRIPT    Page 14 of 85  City Council Meeting  Transcript:  9/5/17  where that would be, if it's other areas. Some of it could be the SOFA area. In SOFA I which is not included in the Downtown. Is that where that would be? Ms. Campbell: The bulk of that was related—I'll just rattle them off for you. We had 900 East Meadow, where it demo'd 85,000 square feet. We've had a couple more at 101 East Meadow and on Bayshore, which had another 164,000, and on San Antonio. We've definitely had—that was almost 250,000 square feet of demolition. That's 901 San Antonio, 2300 East Bayshore. It's definitely not within the annual office limit boundaries. It's those areas near San Antonio and off on that side of town. They went to housing. Council Member Holman: What was that? Ms. Campbell: It went to housing. Council Member Holman: That's what I would have thought also about the SOFA area because there was some office that was demolished there, that went to housing. I can support this, but I would ask that when this comes back for a permanent office Staff provide us any updates on any bubbles that we're seeing popping up in these other outside areas, so we can have an updated analysis of what we need to be mindful of at the time that we're considering the permanent ordinance. Ms. Gitelman: Thank you, Council Member Holman. We prepared this report for every fiscal year, so we'll have data for the—I'm not sure we'll have updated data by the time we bring this back to you. We do this report and report to the VTA every August or something like that. Council Member Holman: If that's the case, then I'll give it a shot that we include Citywide—in other words, it'd be Option 3.3, that the ordinance would apply Citywide except Stanford Research Park. That would be my Substitute. Mayor Scharff: Is there a second or are we waiting for the … Seeing no second, we'll move on. SUBSTITUTE MOTION: Council Member Holman moved, seconded by Council Member XX to direct Staff to include in the replacement Ordinance that the Annual Limit should apply citywide, with the exception of the Stanford Research Park. SUBSTITUTE MOTION FAILED DUE TO THE LACK OF A SECOND TRANSCRIPT    Page 15 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: Council Member Kou. Council Member Kou: I'd like to make a Substitute Motion too. I'd like the ordinance to apply Citywide with Stanford Research Park. Mayor Scharff: Say that again, Council Member Kou. Council Member Kou: Make the ordinance apply Citywide including Stanford Research Park. Mayor Scharff: Do we have a second for that? Hearing no second, that fails as well for lack of a second. SUBSTITUTE MOTION: Council Member Kou moved, seconded by Council Member XX to direct Staff to include in the replacement Ordinance that the Annual Limit should apply citywide, including Stanford Research Park. SUBSTITUTE MOTION FAILED DUE TO THE LACK OF A SECOND Mayor Scharff: Now, if we could vote on the board on the original Motion. Do you want to read the original Motion? Council Member Kou: Yeah. Mayor Scharff: There it is. That passes unanimously. MOTION PASSED: 9-0 Council Member DuBois: Can you clarify the process we're using here? We're taking this piecemeal, and I think it'd be good maybe—you said it very quickly. I'd like to understand how we're going to address the rest of this. Mayor Scharff: We're going to take each one of these and discuss them one-by-one and make a motion on each of them. Council Member DuBois: Some of these could be tradeoffs between components. Voting on them individually is a little tough. Mayor Scharff: Everyone thinks about it differently. I think it's better to have individual motions. If there's something at the end that you felt you want to come back and do it … Council Member DuBois: If we have a discussion of the overall ordinance at the end … TRANSCRIPT    Page 16 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: After we've had that vote, I don't want to re-vote it. If you wanted to make a Motion where there was a tradeoff or something, I would allow it. It seems like it's a much more focused discussion that way, and we get to the heart of the matter. The next one is the quantitative annual limit, which is B. Vice Mayor Kniss: I would move approval. Mayor Scharff: Vice Mayor Kniss, would you like to speak? Go ahead. Vice Mayor Kniss: Did you get a second? Council Member DuBois: Second. Mayor Scharff: Wait. You move approval of what? 50,000 square feet. Vice Mayor Kniss: Yes, the 50. Do you want me to read the whole thing? Continue to use the 50,000 gross square feet as the annual limit. MOTION: Vice Mayor Kniss moved, seconded by Council Member DuBois to direct Staff to continue to use 50,000 Gross Square Feet (GSF) as the Annual Limit. Vice Mayor Kniss: Frankly, given that there doesn't seem to be … Mayor Scharff: I think that's a second from Council Member DuBois. Is that correct? Council Member DuBois: (inaudible) Mayor Scharff: I heard you first. You can withdraw your second if you want. Vice Mayor Kniss now. Vice Mayor Kniss: Given that we're looking back at the last 2 years and not seeing that we're even pushing up against the 50,000 square feet, it would seem—an odd word—sensible to leave it at this. I can't see any reason for altering it at this point. I don't see thousands of citizens in here looking for a different answer than the one I think we're headed for tonight. That's it. Mayor Scharff: Council Member DuBois. Council Member DuBois: For the newer Council Members, we had extensive discussions about this. For me, a big part of it is making space for housing, trying to offset some of the competition between office construction and housing construction. I think Council Member Schmid brought up some older data. When we looked at the averages, several of us wanted to TRANSCRIPT    Page 17 of 85  City Council Meeting  Transcript:  9/5/17  actually see a lower annual limit. 50,000 is quite high. The way this ordinance is structured now, it's really just a governor on massive spikes of construction, which have huge impacts. The intent was that it would probably not happen very often, and that's what we've seen. Just the fact that it hasn't been triggered I don't think is a knock against the ordinance. I actually think it was part of the point of the ordinance. Mayor Scharff: Council Member Fine. Council Member Fine: Thank you. A quick question for Staff. I was a little struck by the demolition totals you have here, about half a million square feet over the 16 years. That's Citywide, including in the ordinance area to some cases. Just for my colleagues, a quick calculation. That's about 36,000 square feet on average being taken off the market each year in our City. I would make an amendment that we use 50,000 net new square feet as the annual limit. Mayor Scharff: I think it already is net new square feet. Council Member Fine: Is this gross instead of net new? Ms. Campbell: It's net new. Council Member Fine: We're treating it as net new. Mr. Keene: (inaudible) Mayor Scharff: Council Member Wolbach. Council Member Wolbach: I'll be supporting this Motion. Also, I just wanted to check. There was a line in the Staff Report about the Comprehensive Plan. I just wanted to seek clarity. I may as well ask it now; it seems as good a time as any. It's on the last page of the Staff Report, Page 12 of the Staff Report, Packet Page 23, the very top paragraph talking about the cumulative cap on nonresidential development Downtown. I think we had some back-and-forth on that. Does Staff remember—did we end up keeping that or scrapping that in the upcoming, revised Comprehensive Plan? Ms. Gitelman: The Council's direction with regard to these growth management measures were different, depending on which one you're talking about. About the cumulative cap Citywide? Council Member Wolbach: I'm looking again on Page 12 of the Staff Report. The cumulative cap on nonresidential development Downtown. TRANSCRIPT    Page 18 of 85  City Council Meeting  Transcript:  9/5/17  Ms. Gitelman: I think the Council's direction was to eliminate that measure because we had this annual limit in its place. On the cumulative cap, even the cumulative cap Citywide we changed it to the office/R&D only, not all other nonresidential uses like retail and warehousing. Council Member Wolbach: That's one place where the Staff Report is maybe—I was just a little bit confused by it. Again, really good Staff Report all over. For me, that is one of the reasons among several why I'm really supportive of continuing the office cap. Just to speak on this project in general, it really is one of several tools that working in conjunction are designed to address multiple concerns. I agree with those who say that this isn't necessarily the best tool to address single occupancy vehicle trips, but this isn't the primary tool to address that. This is about addressing several concerns including spikes as Council Member DuBois pointed out, the challenges around the jobs/housing imbalance, and trying to encourage development of housing or retail and other things that our community is in more need of than office and R&D space. I wanted to point out—I think Hamilton pointed it out too. On Packet Page 17, page 6 of the Staff Report, Staff's interpretation of what we've seen in the last couple of years is developers are focusing on pursuing other commercial, such as retail—that's the implication—and housing uses. I would consider that a resounding success for this program. I'm very supportive of the office cap in general. As we go through this and we get onto the next couple of items within this, we maybe will discuss a couple of minor tweaks. I would just encourage that, as we are considering tweaks one way or another, we keep those tweaks judicious and moderate. I'm glad for this one, that we're sticking with what we have. Mayor Scharff: Council Member Kou. Council Member Kou: As Vice Mayor Kniss said, we haven't really reached the 50,000 square feet in the last couple of years, since this interim ordinance went in. Obviously, it's being successful at what it's intended to do. I'd like to make a substitute motion here, which is to reduce the square footage to 40,000. That way we can ensure—the reason why we're doing this is to ensure that we produce more housing. Even at the 40K square feet, it still means that's about 160 more people that are going to be needing housing if we use the rule of thumb of four employees per 1,000 square feet. We still need to work on housing on that. If we reduce the number—even that is a great number at 160 people. I'd really like to see it reduced to 40 [sic] square feet and make it even more robust and work at housing even more. Can I get a second? Mayor Scharff: Do we have a second? TRANSCRIPT    Page 19 of 85  City Council Meeting  Transcript:  9/5/17  Council Member Holman: I'd second it. Mayor Scharff: Seconded by Council Member Holman. Council Member Kou, would you like to speak further to your Motion? SUBSTITUTE MOTION: Council Member Kou moved, seconded by Council Member Holman to direct Staff to use 40,000 Gross Square Feet (GSF) as the Annual Limit. Council Member Kou: I think I spoke to it. Thank you. Mayor Scharff: Council Member Holman. Council Member Holman: I would support this. If you look at the chart, there are only 2 additional years that would have been affected by this, 2002 and 2016, which were in the 40s. I agree with Council Member Kou. One of the purposes of this is to not have—there are a few purposes of this. Not to have spikes in office development that create housing demand and create more traffic and parking demand, but it's also to make way for more housing development. If we try to focus—use this tool to try to help focus our development community on creating housing, this is one tool that could help steer us in that direction. For that reason—as Council Member DuBois mentioned earlier, we did talk about having different numbers, and we landed at 50. Fifty was a compromise; that may be where we end up tonight too. As we look at the impacts of development and we look at the impacts of what kinds of development we want to support, it is housing over office. That's why I support the substitute motion. Mayor Scharff: Council Member Filseth. Council Member Filseth: I think I'll pass. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: Just briefly, I appreciate the intent of the substitute motion. I'll be not supporting the substitute; I will support the main motion. On the question of how we can additionally incentivize housing, Hamilton—I'm giving him a lot of shout-outs today—mentioned the idea of maybe a housing overlay for those areas affected by the office cap. That's not really agendized tonight, so I don't think we can get too deeply into it. If we have a chance to take up something like that in the future, that would be a good supplement to this discussion. I think 50,000 has worked well for the last couple of years, and we can continue that for now. TRANSCRIPT    Page 20 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: Briefly, I'll be supporting the main Motion and not the Substitute Motion. If we could vote on the board. This is on the Substitute Motion. The Substitute Motion fails on a 5-4 vote with Council Member DuBois voting against his own Motion and Council Member Kou voting yes and Council Member Filseth voting yes and Council Member Holman voting yes. SUBSTITUTE MOTION FAILED: 4-5 DuBois, Filseth, Holman, Kou yes Mayor Scharff: If we could vote on the main Motion now. The main Motion passes on a 8-1 vote with Council Member Kou voting no. MOTION PASSED: 8-1 Kou no Mayor Scharff: Now, we'll move on to the fate of the unused allocations. Vice Mayor Kniss: You want to go first? Mayor Scharff: No, I want to go first. The fate of unused allocations is an interesting thing. The purpose of this ordinance is to meter the overall pace of development. We do have zeroes at times, and other times we've had 100,000 square feet. That's really what we want to do, meter it and spread it out. We should basically go ahead and rollover the unused allocations, but only roll it up for up to 2 years, which means you'd roll it up 1 more year. Roll it over, not roll it up. The most you'd have is 100,000 square feet in any 1 year. That would require a zero the year before, which is possible. On the whole, those kind of spikes are actually rare. That would be my Motion, that we rollover the unused allocation for up to 2 years before they expire. Council Member Wolbach: I'll second that. MOTION: Mayor Scharff moved, seconded by Council Member Wolbach to direct Staff to include in the replacement Ordinance to roll-over unused allocations for up to two years before they expire. Mayor Scharff: I'll just briefly speak a little bit more to it. Having the flexibility of that is really important for people to have that, so we don't have these huge queues that could get backed up after you go through a recession where we have no office space developed, and then you have a large queue where it takes a long time to work through that. What you want to do is meter it over an average as opposed to one particular year or the other. We still meet the whole thing of only having no more than 100,000 square feet. Council Member Wolbach. TRANSCRIPT    Page 21 of 85  City Council Meeting  Transcript:  9/5/17  Council Member Wolbach: I'm going to support this. I'm interested in what my Colleagues think as well. What's the phrase we heard at our second retreat? I'll stay open to persuasion, but this is a good balance. If you look at the four options that Staff laid out on Page 2 of the Staff Report—we're in Item C now. Item 1 is essentially what we've been using for the pilot, and it's worked. It's definitely worked. Item 2 as it was originally suggested of 3 years is too permissive. This motion rolls that back from a 3-year rollover to a 2-year rollover. Item 3 would guarantee that you'd end up getting up to the 100,000 of leftover that could be used. I'm not a fan of that. This would just allow it occasionally. Item 4 is far too permissive. If we went with Option 4, it would frankly undermine the entire intent of the office cap. If there's 40,000 one year and 60,000 the next, that's still moderating the pace. This is the right balance, so I'll support it. Mayor Scharff: Vice Mayor Kniss. Vice Mayor Kniss: Since I seem to be the one who's usually willing to go a little further than a lot of you, I actually would have gone up to 3 years on this. I missed some of the comments that former Vice Mayor Schmid made. My recollection is, looking back over the period of time since '89, the average was about 50,000 square feet a year. Do you remember that at all, Hillary? I'm pretty sure it was right in that. I know what they started with was maybe 258, and we still hadn't hit the cap that was set in 1989. Am I correct? Ms. Gitelman: That's right. I'd have to go back and check those numbers, though. It's such a different data set than the one we've presented here (crosstalk). Vice Mayor Kniss: Trust me. I went over those a lot. I remember in the late '80s, either '86 or '89, they looked at the number of square feet Downtown and said when it hits an additional 10 percent—which is what you indicated to me last year; we thought we were getting close to that—then we would look at it again. That's a long period of time to add just 10 percent to the total Downtown. I'm going to support this. As I said, I would have gone up to three. There will be some point in the future where we may want to use this in a variety of different ways. For now, I'm happy supporting the 2 years that the Mayor moved. Mayor Scharff: Council Member Holman. Council Member Holman: Again, I'm going to offer a Substitute Motion. That would be to do C.1, which is not to roll over the unused allocations for future years. With a second, I'll explain why. TRANSCRIPT    Page 22 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: Do we have a second. Council Member Kou: Second. Mayor Scharff: Seconded by Council Member Kou. Speak to your Motion? SUBSTITUTE MOTION: Council Member Holman moved, seconded by Council Member Kou to direct Staff to include in the replacement Ordinance that unused allocations do not roll-over to future years. Council Member Holman: It really is counterintuitive to what we're trying to do here. What we're trying to do is eliminate the spikes and to moderate the impacts of development. Rolling over such that—as the Mayor had indicated, in 2019, for instance, there could basically be 105,000 square feet of development if the market continues to be soft, and we don't get applications this next year. That's exactly what we're trying to forestall. It also makes way for more office development when what we're supposed to be promoting is housing development to offset the amount of office square footage that we have now. If we're going to be promoting and supporting development, it should really be towards those kinds of development that serve the public and our quality of life, including housing, retail, and community services, not office. That's why the Substitute Motion. I see your support. Mayor Scharff: Council Member Kou. Council Member Kou: The other purpose of this ordinance is also with the no rollover is to ensure that our transportation with traffic congestion as well as parking is mitigated. It has a little bit of success where the TMA was implemented. It's not in its full successful phase yet. I really think that we need to see more time dedicated to ensuring that this ordinance does do its full intent. Traffic, as you know, has been—there was the report that came out on one of the news media that said the TMA is working in Downtown. There's less people using their cars. That's not so for the entire City. I would really like to see a longer period to ensure that it is successful in what it's implemented to do. I also have a correction to make here with regards to the TMA. On one of the news media, it did indicate—the reporter is Alejandro Reyes Villardi [phonetic] with the San Francisco Time News. It says here the Chamber says that the TMA implemented the parking as well as the shuttles as well as the solutions for traffic and the parking RPPs. I don't think they did that. I think it was actually the City who implemented all of that. I just want to make sure that that correction is put in place where the right person gets the credit. That's my reasons for wanting to see this no rollover. TRANSCRIPT    Page 23 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: Council Member Fine. Council Member Fine: Just a question for Staff about these annual caps and how they may play out over different years. I'm looking to you, Hillary, and Jim as well. Do you have any examples of other cities implementing these multiyear caps and what timeframe they're using? Do they do it 1 year or are they trying to affect the curve over 2 of 3 years? I'm just wondering how we get that balance. Why did we choose 1 over 50 or 2 or 3 over 50 versus 40 over 3? Ms. Gitelman: We did look at a number of different cities when we first brought the idea of the annual limit forward and adopted the interim ordinance. I'm going by memory here. I think we looked at San Rafael. We looked at Walnut Creek or another city in that area. Then, we looked at San Francisco. San Francisco has a program that was adopted by the voters, I believe, and it has a small cap and an ADM cap. Those allocations do roll forward if unused. In the other cases, there were different constraints or different parameters around the limit. I'd have to research them again and get back to you on the details. Council Member Fine: Thank you. Mayor Scharff: Council Member DuBois. Council Member DuBois: I think the other one was Mountain View. They have prioritization projects with performance metrics for large projects. I remember that carried a lot of weight with me when we had that discussion. I just want to clarify between the two motions. I think I would support the motion I heard you make, but I don't think it's reflected here. You said that it would roll over if it was zero (crosstalk). Mayor Scharff: No, I didn't. I was probably just being inarticulate for the moment. Council Member DuBois: To me, that would make more sense if there was a recession and it was zero and we allowed it to roll over. If that's not your Motion, then … Mayor Scharff: That's my Motion. It's captured adequately. Council Member DuBois: I would support the Substitute Motion. Again, a question is what problem are you trying to solve here with this rollover. The point of the ordinance was to set a fairly high limit that we rarely hit, six times in the last 16 years, and just smooth out those spikes. If it just rolls over all the time, then we basically have just—the ordinance is really doing TRANSCRIPT    Page 24 of 85  City Council Meeting  Transcript:  9/5/17  nothing at that point. This is not a cap; it's an annual growth limit. It's very different from a hard cap. It's kind of smart. We haven't really talked about the performance metrics, but to me those go hand-in-hand with this. The point of it was we have a list of projects in a year and we have a means to score those projects against criteria that we value. Otherwise, we'd just use our normal process. Adding the rollover really eliminates a large part of the point of the ordinance. I'd like to see us continue with no rollover. If we do get into a recession, Council can always adjust. It feels like we're trying to solve a nonexistent problem right now. Mayor Scharff: Vice Mayor Kniss. Vice Mayor Kniss: One of the things that I'm struggling with because we haven't brought it up is—Hillary, describe the process. I am someone who wants to build a smallish building in the Downtown. I begin that process this year; this is now 2017 in the fall, heading toward fall. About when do you think that building is going to actually come to fruition? Ms. Gitelman: I think your point is a good one. It can take a while to get through the City's entitlement and permitting process. Then, a project applicant will typically, once they have approvals in hand, still have to go through financing and can take a while to get it into the ground and to complete construction. It's hard to predict with certainty exactly what all those timeframes are. They vary depending on the property in question and the developer and their expertise. Vice Mayor Kniss: We can be talking about a number of years. Ms. Gitelman: Yes. Vice Mayor Kniss: In fact, if I look at JJ&F, which finally opened, I think it was approved in—looking at Karen, who's got a good memory—2010 perhaps. Mayor Scharff: 2009 because I wasn't on the Council. Vice Mayor Kniss: 2009. Council Member Holman: That sounds right, 2009. I believe it was before we … Mayor Scharff: We were not on the Council. Council Member Holman: It was before we were on Council, yes, or it would have been better. TRANSCRIPT    Page 25 of 85  City Council Meeting  Transcript:  9/5/17  Vice Mayor Kniss: If it predates you two … It tells you how long it takes for this to actually get on paper, so that we're looking at it tonight. If you take a look at this, I thought initially it would be quite easy to tell when the recessions were, but even at that it's a little hard to tell, except maybe 2003, which was the bottom of the dot com boom. You can tell 2001 is the top of the dot com boom. Even at that, that doesn't make much sense because you can't simply decide in '01 that you're going to put that up. Probably a lot of those were approved in '96 and '97. Even at that, that would be moving it along pretty fast. As we look at this, one of my objections to not allowing rollover is that defies our economy. Our economy does go up and down. Case in point right now, I hear from some that there's a glut of apartments on the market because so many apartments have been built. As I think back through the years, I can think of when lots and lots of apartments were built, went on the market, and then the market fell. Putting up a building to begin with is really an act of faith going through our whole process. We're considered to be one of the hardest cities on the Peninsula to do that. Going through that entire process means that you're probably looking at, at least 5 years. By the end of that time, you must almost wonder if it's still worth it to do it. To not have the rollover really does defy us being able to look at the economy and see what a difference it makes as to whether we're in a recession or whether we're really in a boom time. I'm just not sure that we can have this as such a totally predictable outcome. Again, I'm staying with supporting the original Motion. Mayor Scharff: Council Member Filseth. Council Member Filseth: Like most of us here, I really think that the annual office growth limit looks like it's been effective at what it set out to do, which was slow down the pace of office growth. That was the objective, and it has not prevented any office expansion or anything like that. By and large, this is one of the more successful things that the Council's done in the last couple of years. Up to now, the motions we've made have been basically to recognize that and continue it because that's what we're here to do. However, much of what we're going to go into in the next two or three Motions, including this one, basically relaxes the ordinance that we have had up until now. As we talk about why would we want to dilute or relax the ordinance we have now, you need to look at this through the lens of what's good for residents because that's who we work for. One way to look at this is—I'm going to start from the Palo Alto view as opposed to the regional view, which I'll get to in a second. The Palo Alto view. The fact is the developers of these projects don't pay the full impact cost of bringing more jobs into the City in terms of housing, transportation, parking, and a whole host of further downstream and, in many cases, less tangible effects. Some people want to focus exclusively on mitigation, but you never get 100- TRANSCRIPT    Page 26 of 85  City Council Meeting  Transcript:  9/5/17  percent mitigation on everything. Particularly some of the less tangible things you simply can't mitigate. We fixate a lot on traffic, but there's a lot of stuff. I can tell you that a lot of people ask for better traffic in town. Very few ask for worse traffic but not as bad as it could have been. Those costs get socialized to residents. Every time we do a nexus study on some impact or other—there are a lot of things we don't do nexus studies on, but some we do. Invariably, we don't set the impact fee at the true impact. Instead, we look around at all our neighboring cities, and they don't set it there either, so we don't either. The net-net is that the developers don't pay the full social costs of doing this. Any cost that doesn't get picked up by the developer gets socialized to residents. In that light, it's hard to argue how diluting or weakening the annual limit ordinance is good for Palo Altans. As Council Member DuBois said, doing the rollover defeats a lot of the purpose of doing that. That's the Palo Alto resident view. From the regional view because you have to look at these land use things in terms of regional issues, these kinds of costs, transportation, housing, parking, lots of intangibles and so forth, they are significantly lower in a place like Diridon Station, which has less expensive housing, a big local workforce, much richer transit infrastructure options than we do in the mid-Peninsula. It's hard to make a case to dilute or weaken the annual limit from a regional perspective as well. I don't think we have a clear explanation—it'd have to be really contorted—why going to a 2-year rollover or a more-year rollover is good for the overwhelming majority of Palo Alto residents who aren't directly financially interested in this. I'm going to support the Substitute Motion. We'll probably have a similar discussion when we come the competition and performance scoring issue as well. Mayor Scharff: Council Member Holman. Council Member Holman: Just really quickly. Before I forget it, I do want to thank Staff for what I consider to be a really superior Staff Report. It provides options. It lays it all out. It very clearly identifies what the Planning Commission positions were. I have to say I think it's one of the more excellent Staff Reports that I've seen in a very long time. Appreciate that very much. To speak to why not to do a rollover as consistent with the Motion, just one thing that Vice Mayor Kniss brought up. I appreciate the perspectives as this Council usually has at least two perspectives, at least. It's sort of like trying to time the stock market. Projects take a certain amount of time. Some take more than others depending on how complex, how contentious, that sort of thing. Council Member DuBois said if we have a real downturn every 15, 20 years, then we could go back and address this in the climate at the time. To do it ahead of time is premature and really playing the stock market, sort of roulette wheel. What we've had in place TRANSCRIPT    Page 27 of 85  City Council Meeting  Transcript:  9/5/17  has been very helpful, very useful, and moderates our growth, which is the intention of this to begin with. Appreciate support for the substitute motion. Mayor Scharff: I just want to say it actually does help residents. It creates a moderate environment, which takes the swings from recession. It's most likely to do what Council Member Wolbach started with, which was in those years you could have 40 and in other years you could have 60. I was intrigued that Council Member DuBois liked the idea of going from zero and then rolling that over. That's the other. Those are the two cases that both argue for strong support of it. What we're looking to do here is say to people, "In these areas, you are not going to average more than 50,000 feet. At any one time, you're not going to have more than 100,000 square feet under development." That creates the right business environment, and it doesn't say we are so restrictive that if through a timing issue—Vice Mayor Kniss' point was really well articulated. These development projects take a really long time. You can miss the window; it's really easy. You could have an EIR issue that just knocks you over into the next one. If two people get knocked over into the EIR issue, you could have two people at the same time, and then one of their projects can go forward and one cannot. By having the window basically be a 2-year window, it allows more flexibility, and it will have a better outcome. We can blithely sit up here and say it's okay if someone's project gets delayed a year. The cost to that person and the uncertainty involved is huge dollars. By having that flexibility of a 2- year window roughly, I don't think hurts residents in the least. Traffic, parking, all those issues are not really relevant to it. We've said you could have up to 50,000 a year. What we're doing is mitigating the most difficult aspects of this ordinance, which is the timing, if you go through the process and you get stuck and can't have your project for a whole year. That's really what this does. It takes out the worst excesses. I would hope that we'd support the original motion and not the substitute motion. Council Member Wolbach. Council Member Wolbach: As seconder of the original Motion, I figured I'd weigh in. I'll try to keep it brief. On the Substitute Motion—I actually first want to recognize the questions and the ideas raised by those supporting the substitute motion are really strong. You can vote your conscience on either of these. I don't think the result of going in either direction of this will be radically different. Government regulation should not be more onerous than is necessary to achieve the goals of that regulation. As far as the goal of smoothing things out and having averages, we're saying over a 3-year— even if you go with the original motion—period—it'd be actually with either one. Over a 3-year period, you're not going to have 150,000 in development. Over a 4-year period, you're not going to have more than 200,000 square feet of development. That would be the same over a couple TRANSCRIPT    Page 28 of 85  City Council Meeting  Transcript:  9/5/17  of years with either one. It does allow a little more flexibility. If Council Member DuBois is comfortable with one year having zero and the next year having 100, then that means we're comfortable with having 100 one year. Anything above that is an uncomfortable spike. Above that is an uncomfortable spike. If you look over the course—we're talking about the cumulative impacts. The average over 5 years, over 10 years is the other issue that we need to look at. With either of these motions, either the main or the substitute, you achieve those goals. I'm fine with everyone voting their conscience on this. I will be voting for the main Motion. They're both valid. Mayor Scharff: Council Member Kou. Council Member Kou: Basically, in terms of the length of time for a project to be approved, it can be very easily approved very quickly within the timeframe if the developer didn't ask for extras, like over-developing on the lot or in zoning that it's not capable of doing, certainly with the mass and the compatibility, etc. Of course, if they provide sufficient parking, there will be no problem going through the pipeline and going through Planning and getting the permit. Also, with JJ&F, if I remember correctly, it was due to financing that they were taking a longer time in order to get to where they needed to be. With the rollover and extra square footage, the concern is for another 429 University to come through when it only provides three housing units with over 11,000 square feet of office space. Actually, it's 20,407 square feet of commercial space with only 34 parking spaces within the building, and the rest going to the Assessment District. This is what we're trying to avoid over here with the no rollover, so that we can actually mitigate our traffic problems and help the Transportation Management folks. They have a hard enough job. I'd really like to—I hope we'll get support for this Substitute Motion. Thank you. Mayor Scharff: If we could now vote on the Substitute Motion, not the main motion. The Substitute Motion fails on a 5-4 vote with Council Members DuBois, Kou, Filseth, and Holman voting yes. SUBSTITUTE MOTION FAILED: 4-5 DuBois, Filseth, Holman, Kou, yes Mayor Scharff: Now, if we could vote on the main Motion. Council Member DuBois: (inaudible) Mayor Scharff: Sure, go ahead. Council Member DuBois: I just want to understand this wording. We're saying it rolls over for up to 2 years. Is the intent that you could go … TRANSCRIPT    Page 29 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: The intent is really 1 year. Council Member DuBois: You don't mean 0-0-150? Mayor Scharff: No. Council Member DuBois: That's the way I read this. Mayor Scharff: That's the way Staff did it when they said 2 years. Council Member DuBois: Could we say it rolls over for up to 1 year? Mayor Scharff: I'm happy to clarify that. Shall we just say "up to 1 year"? would that give clarity to Staff and give clarity to you, Council Member DuBois? Council Member DuBois: Yeah. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to amend the Motion to state, “up to one year before they expire.” Council Member Wolbach: Thanks for catching that. Mayor Scharff: Council Member Filseth. Council Member Filseth: I understand the arguments in favor of the rollover that we're about to vote on. I think they're by and large developer-centric. We need to look at resident-centric. I'm going to vote no on the main motion. Mayor Scharff: Council Member Fine. Nope. MOTION AS AMENDED RESTATED: Mayor Scharff moved, seconded by Council Member Wolbach to direct Staff to include in the replacement Ordinance to roll-over unused allocations for up to one year before they expire. Mayor Scharff: Now, if we could vote on the main Motion. That passes on a 5-4 vote with Council Members Wolbach, Kniss, Scharff, Tanaka, and Fine voting yes. MOTION PASSED: 5-4 DuBois, Filseth, Holman, Kou no TRANSCRIPT    Page 30 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: On we go. The next portion of this is the uses that are exempt from the annual limit. Does anyone want to address that issue? Council Member Fine. Council Member Fine: Just a quick question to Staff. How many of these exemptions have we given in these different categories over the past year and a half or so? Ms. Gitelman: I think we have had applicants take advantage at least in their conversations and in shaping applications of the small exemptions, the 2,000-square-foot and the 5,000-square-foot. I don't know if we've actually processed any to completion. Council Member Fine: So a couple of them. Ms. Gitelman: The development community is aware of them and making use of them. Council Member Fine: This may be more of a ballpark in your knowledge. For the medical office developments, what is the general size of those? Are they generally under 5,000 or do some of them … Ms. Gitelman: It really varies if you're talking about one sole proprietor, one dentist, one therapist. It could be 5,000 square feet or even less. Someone could be developing a building with a lot of medical office space that could be much larger. Council Member Fine: Do we have any data of the distribution of these medical offices, how large they are? Ms. Gitelman: We'd have to do some research. Council Member Fine: That would be helpful coming back here. The reason I'm bringing this up for my colleagues is I was just trying to think about what kind of offices are 2,000 square feet or less, what kind of medical offices are 5,000 or less. I can think of some that are. I can think of some that are above that. If the purpose is specifically to exempt medical offices, then 5,000 may be too low. If our purpose is that we specifically want smaller medical offices, then we may be getting that here. I would just put it to my colleagues. I wasn't exactly clear what the policy purpose was, whether it's the use or the size of these on these exemptions. Mayor Scharff: Was that a question? Council Member Fine: For Staff. TRANSCRIPT    Page 31 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: I think we're looking at you. Ms. Gitelman: As I indicated to Council Member Fine, we'll have to research that issue and get back to him. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: I was going to offer—I also have a couple of questions here. To address Council Member Fine's question, it really is the question of use and the question of size. If you build a big hospital, I don't think that's something we'd want to just make an exemption for. We'd want to have a conversation about that. The size of 5,000 was very intentional. I actually had a question for Staff about the definition of medical offices. We've known for several years and it's been exacerbated over the last couple of years, the concern about space in our community for sole practitioners who provide psychological services, therapists, psychologists. I was wondering are therapists and psychologists considered medical. If it's not clear, then we—if it's up to basically Staff interpretation or Council interpretation, then I'd suggest we clarify that they would be. I want to hear from Staff if it's clear one way or the other or if it's ambiguous. Ms. Campbell: The medical office use is what we have defined in our 18.04 section of the Zoning Code. Maybe I can just read you that first sentence or so. Medical office means a use providing consultation, diagnosis, therapeutic, preventative, or corrective personal treatment services by doctors, dentists, medical and dental laboratories, and similar practitioners of medical and healing arts for humans, licensed for such practice by the State of California. Council Member Wolbach: Would Staff say that clearly and unambiguously includes psychologists and therapist? Was that an affirmative yes? Looks like that was an affirmative yes from Staff. Ms. Campbell: Yes, yes. Council Member Wolbach: I want to get that on the record. Thank you. In that case, I'm comfortable with that definition not needing any modification. There is one thing I would like to suggest we add to this. I would suggest we actually just add one thing within "b." We're in Item D.1, subsection b. My Motion is to do that, but under "b" it would read "medical office and/or nonprofit." Vice Mayor Kniss: I'm glad to second it when you get done with it. TRANSCRIPT    Page 32 of 85  City Council Meeting  Transcript:  9/5/17  Council Member Wolbach: I want to make sure it's clear. That's the Motion. I'll speak to it after I get a second. Vice Mayor Kniss: I will second. MOTION: Council Member Wolbach moved, seconded by Vice Mayor Kniss to direct Staff to maintain the current list of exemptions for (a) Office/R&D development less than 2,000 GSF; (b) Medical office and/or deed restricted non-profit office development less than 5,000 GSF total; and (c) Self- mitigating projects that propose sufficient housing to meet the housing demand of additional employment. Mayor Scharff: You should clarify that it's not cumulative. You couldn't do 5,000 of medical office and 5,000 of nonprofit. It's within that 5,000. Council Member Wolbach: That is correct. Any changes we make to this, we should be gentle. That's why I want to be really clear with the language here. This would say that within that 5,000-square-foot exemption, if you're proposing a development, you're applying for that exemption, you could say, "We have 5,000 square feet of medical," or you could say, "We have 5,000 square feet of nonprofit space." That space can only be used for nonprofits or you could do some mix. You could say half of it's going to be for medical, and half of it's going to be nonprofit, or some other ratio. It wouldn't change the size. It wouldn't expand the size of the exemption. It would merely expand the allowed uses to include nonprofits. I hope that's very clear. I hope others will support it. Mayor Scharff: Vice Mayor Kniss. Vice Mayor Kniss: Yes, I support it. One thing I want to ask Staff is what is our definition of a nonprofit. Ms. Gitelman: Thank you for that question, Vice Mayor Kniss. I think we're going to have to work with the City Attorney's Office, if this is the Council's direction, to develop a definition and a way to frankly administer something like this. We'll have to give it quite a bit of thought. Vice Mayor Kniss: Sometimes it's somewhat complicated to really identify the nonprofit even with their status. That would be helpful. Ms. Gitelman: It might be one thing to identify it on Day 1 when the office space opens. Imagine 30 years from now evaluating future tenants. It could be a challenge. TRANSCRIPT    Page 33 of 85  City Council Meeting  Transcript:  9/5/17  Vice Mayor Kniss: It can get messy, right. One other thing. I'm seconding this, so I'm really speaking to it at the same time. Self-mitigating projects that propose sufficient housing to meet the housing demand of additional employment, have we ever had anything like that apply? Ms. Gitelman: We have not had any applications using this exemption. I have talked to one developer who was interested in trying it out, but we've never seen an application. Vice Mayor Kniss: I remember us having this very extensive discussion on this before and including that. It's always interesting when you visit something a year or so later to say did this ever come up, is this something that really is a need. I don't suggest taking it out, but it would be very interesting if one of these projects actually did come to us. With that, it has my support. Mayor Scharff: Council Member Filseth. Council Member Filseth: Again, the existing ordinance has generally worked pretty well including the current exemptions. I support those. I don't see anything wrong with the one that's here. My inclination is to support it. The only thing I would say is I hope we're not going to get a whole string of more exemptions that go on, so that by the end of the night we've got 20 of them or something like that. That's not how we should do that as a process here. My inclination is I'm happy to support this. If there's another dozen, I'm probably going to vote against them. Mayor Scharff: With that comment, can we vote? I'm just kidding. Council Member Holman. Council Member Holman: I would like to offer an Amendment to this, Council Member Wolbach. Part of it is for clarity and part of it is out of a concern. "B," the way it reads currently is medical office and/or nonprofit development less than 5,000 square feet. I think the intention would be more clearly stated if it was "b, medical office," as previously stated, and add a "d" that is nonprofit development. Right now, it looks like it could be a combination of—I'm not quite sure what it means. I can't imagine a medical office and a nonprofit joining together. On this end of the dais, there was a little bit of confusion. Does that mean together they're going to be 10,000 square feet of a combination of medical office and nonprofit? The other thing I would suggest—for me, it would be to add a new part d that is for nonprofit space less than 3,000 square feet and amend "b" to be just medical office as it currently is. The reason for that is because I don't think what we want is to see new development projects—as much as I'm supportive of nonprofits and everybody up here and many people in the TRANSCRIPT    Page 34 of 85  City Council Meeting  Transcript:  9/5/17  community understand that, I don't want to see development projects come forward and ask for an exemption for a very well-funded nonprofit as many in this community are and exempt the 5,000 square feet. What we're trying to support as a community and what needs our support are the smaller nonprofits that need smaller square footage and won't be "used" to make a development larger. That is why I'm asking to change "b" back to medical office of less than 5,000 square feet as it was, and to add a new part d that's for nonprofit development less than 3,000 square feet. I look to the maker to see if he would accept this for both purposes of clarity and also to help direct the nonprofit spaces to be smaller. Council Member Wolbach: A couple of thoughts. I'm not going to accept it as a friendly Amendment. I'd like to explain why. Your points are well taken, and I appreciate them very much. There are two reasons why I'm not going to accept the amendment. One is I did not want to expand the potential size of an exempt project where the overall size of an exempt project could be 5,000 square feet of medical plus 3,000 square feet of nonprofit. Then, you could add 2,000 square feet of office—1,999. You could have a 9,999-square-foot development that would be exempt if we were to move forward with that amendment. I don't want to do that. We are making a couple of changes here from the existing ordinance, including the last one which was pretty controversial. I just don't want to go that far. Just like the medical offices, if the development says this is going to be 5,000 square feet of nonprofit space, that doesn't mean it has to be all for one nonprofit. They could say this space is nonprofit space, and then have several suites within that to lease out to different nonprofits as need arises. I won't accept the amendment, but I do understand the intention behind it. It's not friendly, but you might get a second for it. Council Member Holman: Hearing what you're saying, maybe I could offer an Amendment that would be acceptable to you, and we can move on. To clarify "b," it would be a … Mayor Scharff: Wait. Are you withdrawing your Amendment? Council Member Holman: If he would accept this, I think I would. Mayor Scharff: Offer your Amendment, but it's not really a negotiation. Council Member Holman: It was after hearing him speak and what his intention is that's causing me to say this. "B" would read, if I'm interpreting what you're saying correctly, either medical office or nonprofit less than 5,000 square feet. That would capture what you just said. Either medical office or nonprofit development less than 5,000 square feet. It's one or the other. As you said, not to bloat a project, to make a project larger. TRANSCRIPT    Page 35 of 85  City Council Meeting  Transcript:  9/5/17  Council Member Wolbach: The main Motion without the amendment captures that, but it does allow the potential if, say—if you're proposing a development, you could say, "We're going to have 5,000 square feet that's exempt, and 2,500 of it we're going to make for therapists or psychologists or medical, and the other half we're going to make for nonprofits." I can see that actually being an appealing use that would be beneficial to the community. I won't accept the amendment because it's redundant. Council Member Holman: Perhaps this. In "B," if you take the word "and" out, then it also clarifies what your intention is and I would withdraw my amendment. Mayor Scharff: Council Member Holman, your concern is unclear. Am I correct in believing that your concern is simply that you think it implies that it's additive and you could do 10,000 square feet? Council Member Holman: That's correct. I'm not the only one up here that thinks that. Mayor Scharff: We stated that it's not additive. Medical office and/or nonprofit development less than 5,000 square feet. You want to add something like "for both uses"? Would that … AMENDMENT: Council Member Holman moved, seconded by Council Member XX to add to the Motion a new Part D “non-profit development less than 3,000 GSF”; and to amend Part B to state “either medical office or non- profit development less than 5,000 GSF” Council Member Wolbach: You could add the word "total" after 5,000. Council Member Wolbach: That's clear to Staff, right? Ms. Gitelman: If I could offer a clarification here. We can certainly change this if it's the Council direction. Currently, the way the program is administered, you could have one exemption or the other. You can have the 2,000-square-foot office or the 5,000-square-foot medical office. You can't combine them. With the way you're writing this, that would remain the case. You could have 2,000 square feet of office and 5,000 square feet made up of either medical or nonprofit or a combination of both of them. Council Member Wolbach: Thank you for the clarification. Forgive me, colleagues and public, for misrepresenting. I misunderstood that. I'm fine with that clarification, and I'm fine with, just to be extra clear for colleagues, adding the word, if Vice Mayor Kniss will accept it, "total" after 5,000 in the motion. TRANSCRIPT    Page 36 of 85  City Council Meeting  Transcript:  9/5/17  Ms. Gitelman: Mr. Mayor, if I … Council Member Holman: If you do that, then I'd withdraw the amendment. AMENDMENT WITHDRAWN BY THE MAKER Ms. Gitelman: Mr. Mayor, if I could ask for one more clarification. Currently it reads nonprofit development. I was hoping that we could say "nonprofit office development" because the ordinance is really about office uses. Nonprofits have a wide variety of … Council Member Wolbach: That's fine. Let's add that. I think we were just pulling the language from the Staff recommendation. Thank you. Thank you, Council Member Holman, for seeking clarification. Mayor Scharff: Council Member DuBois. Council Member DuBois: It's been a while since Council Member Fine started. I just wanted to clarify when we talk about size. This is net new square feet, so you could demolish a medical building that was 15,000 square feet and make it 20,000 square feet? In terms of using these exemptions, we haven't really seen much use of this ordinance in the last 2 years, so I don't think we have data points. I'm a little bit concerned about the comment about how we define a nonprofit. In our zoning, medical is defined. We want to support small nonprofits, but there are huge, big money nonprofits. More the issue of you develop a building and you say you have a nonprofit tenant, and then they move out, what happens? I wondered if you'd be open to—I'd like to hear if Staff has other ideas— saying "medical office and/or deed restricted nonprofit office development" or something to ensure it's actually being used for a nonprofit. Council Member Wolbach: I'd probably be comfortable with it. All of this is going to come back to us; we're just giving direction for Staff to investigate and draft something. I'll look to Council Member Kniss and see if she has any opposition to that. I'd be okay with changing that. Vice Mayor Kniss: I don't think it changes it substantially. Mayor Scharff: Staff, you're comfortable with that? Council Member Wolbach: Just like with the prior amendment offered by Council Member Holman, after the discussion I'm fine with that. Council Member DuBois: Thank you. Mayor Scharff: If we could vote on the board. That passes unanimously. TRANSCRIPT    Page 37 of 85  City Council Meeting  Transcript:  9/5/17  MOTION PASSED: 9-0 Mayor Scharff: Now, we're at "E," which is the process for reviewing projects. We have three choices: continue the current competitive process; use a first-come-first-serve process, which is the Staff recommendation; or consider some other alternative or modified process. Vice Mayor Kniss. Vice Mayor Kniss: I'm going to make the Motion for Number 2. Just saying in advance that fair is fair. When you look at our current process, where we have a competitive process, the words we've usually used are a "beauty contest." I've given up over the years that I've served of trying to decide whether a building is attractive or unattractive. I swear, to somebody it's going to be absolutely gorgeous, and to somebody else it is going to be an unattractive elephant. For me, the fairest way to go about this, instead of somebody trying to decide which is the more beautiful building, is to do it on a first-come-first-serve basis. As I recall, we haven't had to do this because we haven't had enough projects in the pipeline. We don't know how a beauty contest would work. This is a fairer way to go. As I've read about it, other cities who have—I should have waited for a second. I apologize. Mayor Scharff: Do we have a second for … Cory, did you second it? No. Council Member Fine: I'll second. Mayor Scharff: Council Member Fine. MOTION: Vice Mayor Kniss moved, seconded by Council Member Fine to direct Staff to include in the replacement Ordinance a first-come first-served process for reviewing projects subject to the Annual Limit. Vice Mayor Kniss: Was that a second? Mayor Scharff: Yes. Vice Mayor Kniss: I can continue. Other cities that have come up against this have ended up dropping their beauty contest. I know it was appealing to us initially. We thought of it as a—I don't know. Maybe we'd put together some sort of three-person committee that would decide whether or not it met the beauty contest rules and could they pass the ballet or whatever it was that they had to pass to qualify. This is easy, fair. First- come-first-serve really works. Mayor Scharff: Council Member Fine. Council Member Fine: Thank you. I agree with what Vice Mayor Kniss said about the fact that no one, especially not us, is a good judge of buildings for TRANSCRIPT    Page 38 of 85  City Council Meeting  Transcript:  9/5/17  this entire community. More importantly, there are other things here. Currently, the qualification process does include things like housing contribution, transportation impact. Those are important for us to consider in terms of a new building project or development in this City. I don't believe this ordinance is the right place to do them. Instead of valuing these different buildings within this ordinance on their housing contributions or their transportation contributions, we should be looking at those more holistically at a City level. We should be looking at things like a housing overlay or figuring out is the TMA working for the City, where is it, where is it not working, and how do we reinforce that. To do that, I do believe it is more "fair" to have a first-come-first-serve process. Thank you. Mayor Scharff: Council Member DuBois. Council Member DuBois: I'd like to make a Substitute Motion, that we continue the current competitive process. Council Member Filseth: Second. SUBSTITUTE MOTION: Council Member DuBois moved, seconded by Council Member Filseth to direct Staff to continue the current competitive process for reviewing projects subject to the Annual Limit. Mayor Scharff: Would you like to speak to your Motion? Council Member DuBois: Yeah. I really think we're mischaracterizing it to say we're going to have a three-person panel of judges. I don't think that was the process at all. Staff can correct me if I'm wrong. Vice Mayor Kniss: I don't know if we even had a process. Council Member DuBois: We defined a set of scoring metrics. Calling it a beauty contest also denigrates it. It was really about, in years that we had a huge demand for development, being able to prioritize projects that met our policy objectives as a Council. We assigned points based on sustainability, which I don't understand why we wouldn't support that. We assigned points based on environmental quality, public benefit, the ability to mitigate any impacts to the neighborhood. There are a lot of cities that do this. Mountain View does it quite well. It only applies in those years where you have a lot of development. To me, this idea of performance metrics and having a competition in a year where you have a lot of development makes a lot of sense. Those metrics are important to us. If we have first-come- first-serve in those peak years, Council is giving up the ability to encourage the policies that we want to see implemented. Giving points for the inclusion of mixed-use with housing is a good lever for us. We have enormous TRANSCRIPT    Page 39 of 85  City Council Meeting  Transcript:  9/5/17  housing pressures. I feel like we're completely diluting this ordinance where we're not going to get what we intended, which was to incentivize moving from office construction to housing construction. The overall purpose was not just single occupancy trips or parking. It was really about job growth and the impacts on the City. These metrics were designed to measure that and incentivize projects. By removing that, we're completely diluting the purpose of this ordinance. I would just strongly—I'd love to hear my colleagues' comments on this, but I'd really urge you guys to consider what we're left with if we take this out. Mayor Scharff: It already has a second from Council Member Filseth, I believe. Council Member Filseth: I pretty much concur with what the maker of the Motion just said. The performance metrics idea is a good idea. We haven't had any—it's been 18 months or something like that. We haven't really had enough time to see how it really works. We haven't had a year in which we had a lot more projects coming in than we could afford. I think it's premature to eliminate it after whatever it's been. On the discussion of fairness, the net-net today is—the producers of office developments don't pay the entire social cost of those. One of the ways to look at the scoring ordinance is that by producing higher quality projects, which is a good idea and premature to eliminate, we can reduce that gap a little bit. In terms of fair, who are we talking about being fair to? The current system is unfair to residents, and it's unfair to residents to dilute this ordinance after however long we've had it, less than 2 years. The Substitute Motion is the way to go. Mayor Scharff: I'm going to speak to this briefly too. First of all, it's a bit of hyperbole to say that we're diluting this ordinance dramatically. The ordinance is pretty much staying the way it is. The purpose of the ordinance is to meter the pace of growth. Whether or not we have a beauty contest or not has no effect on any of that. No one's come forward into the beauty contest. Part of that is because it is unfair, the ordinance. Staff recognizes that this is not a good process. That's why in their Staff Report it says Staff recommends the first-come-first-serve process. When you ask people in business what do they want most from a city, from their government, what they want most is certainty. It's hard to invest millions of dollars, go through a lengthy EIR process, and then have something as vague as the beauty contest. This is probably the most pernicious part of this ordinance. This is the part that investors and developers and residents really have problems with. When you say it's unfair to residents … Council Member Filseth: Residents don't have problems with it. TRANSCRIPT    Page 40 of 85  City Council Meeting  Transcript:  9/5/17  Mayor Scharff: Sure they do. What residents also want is some certainty in the process. What we don't really want this to be is a political favoritism, choice where you don't know where it's going to go, where it depends on who's making the decision. When it comes to Council, you want some certainty. That doesn't get you there. When I look at most of the new buildings Downtown, most of them are an improvement over what's there. Yes, I have my pet peeves about some of the architecture, but we have an Architectural Review Board. I may not agree with the choices the Architectural Review Board makes, but I have no understanding of why, if we have this beauty contest, we will get better architecture. I don't believe we will. I don't quite see how that could change at all. We have incredibly strong green building ordinances and sustainability measures. If we want to continue to push on those, which we should, we should apply those to all buildings, which we continue to do. I don't think this helps residents in any way frankly, to keep this beauty contest in here. It creates all sorts of uncertainties, which is what our residents don't want. In fact, if anything it feels a bit like a PC process when we go through it. That's really what our residents were complaining about. What I've heard a lot of people on this Council say is we should have rules, and the rules should be followed, and we should have certainty in those rules. What this does is create a whole sense of uncertainty that hangs around this process. Not to mention the whole March thing. I went with extending the ordinance frankly, but I did ask myself the question—right now, you're stuck with a March date where we collect the stuff without moving forward. That also slows down the process in a way that was unnecessary when we know that we're not going to have more than 50,000 square feet this year. What this does is create delay and uncertainty, which are the two biggest things that create unfairness in the process. I am not going to support the Substitute Motion. Council Member Kou. Council Member Kou: I actually think that calling it a beauty contest is rather insulting. What we have right now, to continue the current process, provides for the performance measures. Staff has really put together and thought out very carefully what their criteria are. It's on Packet Page 38, and it has the review criteria and scoring. It has everything laid out. Staff, is this process given to the applicant to have them understand that this is the method that we'll be scoring when they go through this process? Ms. Campbell: This is something that's available to the public to review. The applicants would review this when they're putting their application together. Council Member Kou: It's not really sprung on the applicant. It's there for them to understand that this is what we're looking for in performance TRANSCRIPT    Page 41 of 85  City Council Meeting  Transcript:  9/5/17  criteria to ensure that we have buildings that will fit into the community. Further, residents would like to know what to expect, as you say. Also, they would like to see less exceptions and variances, if anything, or using DEEs and so forth. That would expedite the process for the applicant too. There is a thought-out process for all of this already. I will be supporting the Substitute Motion. Mayor Scharff: Vice Mayor Kniss. Vice Mayor Kniss: Tom, I appreciate what you have said. I really do understand it. It's too bad we haven't had to use this process at all yet, which we haven't. I don't think we have. It looks very objective but, when we get into, we're going to find it's somewhat subjective. Certainly "c," which is the design, is once again—I'm on the same page, looking at design, which is "c" under Number 2. That once again gets into that area that I hope ARB has really weighed in on. Environmental quality, we absolutely demand that. I don't think that's a choice any more. Public benefit, I'd have to suggest that what the Mayor said was pretty straightforward. It does sound a little like an old PC, heading us down a bumpy road again. I am delighted that this is actually put in here, but I still don't see this as being an easy process to complete and one where you could come up with a numeric answer. I am continuing to support my own Motion. Thanks, Tom, for bringing that up. Mayor Scharff: Council Member Holman. Council Member Holman: We're maybe not looking at this in the right framework. It's been referred to a few times as a beauty contest. That's absolutely a misnomer. If you look at the things that are on the list, either on Packet Page 16 or on Packet Page 38, it's not that. It's what project contributes most to the community and which project least negatively affects the community. That's what the criteria are, that are listed. I wish we had had a project to review at this point in time. Until we do use this, we won't know how it works. I wish we could finally get over a hurdle. With all due respect, it's like we have a pretty darned good Architectural Review Board. Until we can get over the hurdle of thinking of design criteria as being 100- percent subjective, we're not ever going to get anywhere with delivering better projects to this community, either in selecting who our ARB members are or if a project comes to the Council on appeal, looking at a project in preliminary screening, whatever. Compatibility is not just picking straws out of the air. There are specific, professional criteria that determine that. They are the charge of the ARB, our Planning Staff, and the Council. That's just one element of this. The impacts and the uses have great potential for adding very positively to the community. These criteria encourage the TRANSCRIPT    Page 42 of 85  City Council Meeting  Transcript:  9/5/17  applicant, an applicant, a developer to come forward with their best effort, not trying to get in under a deadline but to bring forward their best effort. I would suggest that—I ended up voting for it—I can't remember for sure—the 1-year carryover. It makes this criteria even more important because it means we might have a larger project that goes over the 50,000-square- foot limit. If we're looking at a larger project, it makes these criteria so very, very important to the community, to the public. Before you vote on this substitute motion or make up your mind to vote for the original motion, think about what kinds of comments we hear from the public, what do they like and not like about our existing development. I dare say that these criteria address many of the objections that we hear from the community over and over and over again. I argue for your support for the Substitute Motion. Mayor Scharff: Council Member Wolbach. Council Member Wolbach: First, I want to say this is a really good conversation. As with the prior items where we had controversy, people can really vote their conscience on this one and go either way. I'll be supporting the main motion, not the substitute. To share my reasons why, Council Member DuBois' points are well taken, so I would like to address them. He asked what are our thoughts on why we want to make this change, why we want to review the design criteria. I will not use the term beauty contest; I will refer to it as design criteria. I appreciate that. The review criteria or evaluation criteria are well intentioned. They're about as good as they could get. That's why I'm not going to support tweaking them. They're pretty good. The public benefit one bothers me. The biggest one that's central is not a criteria issue but the process issue. If you look at Packet Page 38, Page 5 of 3.C, Item 4 at the end, the City Council may accept the Director's recommendation—that's the Planning Director—or modify it based on its independent review of the criteria and shall determine which eligible applications will be approved, approved with modifications or denied, etc. That leaves a lot of leeway, whether you want to call it objective or subjective. It does leave a lot of leeway for this body to make determinations. Maybe we'll make good decisions; maybe we won't. We all have a great deal of confidence in our own ability to judge according to those criteria. To be honest, I'm not sure how much confidence I have in this body, based on who knows what the future makeup will be, to apply that review criteria and scoring in a fair way. To address the question of fairness that Council Member Filseth raised, it is important to be clear that the role of government in a constitutional democracy is not merely to be fair to the majority, but to be fair as the rule of law applies to all, even those we may have a bias against. It's important that our laws, our rules are fair. Just to address that question of why we use the word fair even if we're TRANSCRIPT    Page 43 of 85  City Council Meeting  Transcript:  9/5/17  talking about a process for a group that we're not necessarily big fans of. We may agree that we're not big fans of them. We do have to have a fair process. That's a rule I will always try and apply. I hope we will all try and apply it no matter what topic we're talking about. If I had confidence that this body would be capable of doing this fairly and doing this well in the future, I'd feel more comfortable with it. Secondly, the right place to pursue reducing impacts, the right place to pursue design, environmental quality, etc. are, as others have mentioned, in other ordinances. We do a pretty darned good job of that. I would like to see us continue to improve upon those. I'd like to see us continue to improve our ARB and its processes and its criteria that it uses. I'd like to see us continue to improve and push the State and the country forward on our green building codes. The impacts, the design, the environmental quality are really important things, absolutely, but that's not what this ordinance is supposed to be about. I don't think government regulations should be broader or more complex than they need to be to get the job done. Lastly, Staff recommended the original motion, not the substitute. Because of my low confidence in this body's capabilities to be fair. Secondly because these things can and should be addressed other places. Third, because of the Staff recommendation, I will be supporting the main motion, not the substitute. Again, people can vote their conscience, and I'll respect them for that. Mayor Scharff: Let's vote on the Substitute Motion first. The Substitute Motion fails on a 5-4 vote with Council Members DuBois, Kou, Filseth, and Holman voting yes. SUBSTITUTE MOTION FAILED: 4-5 DuBois, Filseth, Holman, Kou yes Mayor Scharff: Still seeing no lights, let's vote on the main Motion. That passes on a 5-4 vote with Council Members Wolbach, Kniss, Scharff, Tanaka, and Fine voting yes. MOTION PASSED: 5-4 DuBois, Filseth, Holman, Kou no Mayor Scharff: Does that conclude the item? Council Member Filseth: (inaudible) Mayor Scharff: I was looking to see if we had any lights. Vice Mayor Kniss: That concludes the item. Mayor Scharff: I just wanted to make sure there was no one who wanted to say something further. Can we take a 5-minute break? _______________________ 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. Planning & Transportation Commission 1 Meeting Minutes 2 March 29, 2017 3 Excerpt 4 5 6 7 Study Session 8 Public Comment is Permitted. Five (5) minutes per speaker.1,3 9 3. Discussion and Comments for City Council Consideration Regarding Development of 10 an Ordinance to Perpetuate an Annual Limit on Office/R&D Development Following 11 Expiration of Interim Ordinance #5357 Restricting Such Land Uses in Certain Parts of 12 the City to 50,000 Square Feet per Year. Environmental Analysis: This Discussion is 13 not a Project Pursuant to the California Environmental Quality Act (CEQA). For More 14 Information, Please Contact Clare Campbell at clare.campbell@cityofpaloalto.org. 15 16 Chair Alcheck: To bring to order this meeting again and begin with Agenda Item 3. Staff would 17 you kick us off? 18 19 Commissioner Lauing: Chair can I just ask a procedural question? 20 21 Chair Alcheck: Yes (interrupted) 22 23 Commissioner Lauing: This is obviously characterized as a study session not an action item. 24 25 _______________________ 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. Chair Alcheck: That's correct. 1 2 Commissioner Lauing: Right, but I know that Council has already opined because they were 3 asked at the January 30th Council meeting to give their opinions on precisely this issue along 4 with a number of other large ones. So for us to come up with discussions that are just… our 5 only action item tonight is to come up with comments that are going to just be sent over to 6 Council. Wouldn’t it be more productive if we had a session, a subsequent sessions that 7 actually analyzed this issue in light of the Council direction apropos of Chair [Note-Vice-Chair] 8 Waldfogel’s comment in the last item so that we could maybe wrestle with this and come up 9 with a recommendation if that's something the Council has an interest in or we do? Rather 10 than just discuss it and ask questions and just send over 30 random comments that may be not 11 be pertinent or that they're interested. So I'm not saying that there aren't questions that we 12 could ask about what's in your staff report, but it doesn't seem productive if we aren’t going to 13 get into a situation where we're going to recommend something. I don’t know if other 14 colleagues have comments on that, but... 15 16 Chair Alcheck: That's an interesting question. My perspective here… what I would like to do is I 17 would like to give staff the opportunity to present and 18 19 Commissioner Lauing: Certainly, certainly. 20 _______________________ 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. 1 Chair Alcheck: I appreciate the sense that there's not really a defined objective here. And that 2 there's a lot of unknowns, but I let's follow protocol and then we why don’t you circle back to 3 this concept in our first round of comments. 4 5 Commissioner Lauing: Sure, no I look forward to that (interrupted) 6 7 Chair Alcheck: [Unintelligible] we can kind of determine to what extent that might be an 8 appropriate. And we don't have to go through it for two hours. You'll have a chance I think to 9 speak in the first half an hour and then we can kind of figure out (interrupted) 10 11 Commissioner Lauing: That was part of my point is I don't think we need to discuss this 12 necessarily for two hours if we're going to come back with an action item at some later point 13 and we don't need to go on for two hours because we don't know what Council concluded at 14 the end of January because we didn't get a separate staff report on that. 15 16 Hillary Gitelman, Planning Director: Maybe I can offer just a little (interrupted) 17 18 Chair Alcheck: Why don’t you? Yeah, would you? 19 20 _______________________ 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. Ms. Gitelman: Context on that. So the only question that the Council really weighed in on at 1 that meeting in January was whether they wanted to perpetuate an annual limit on office 2 Research and Development (R&D) and they said they did want to. They want a permanent 3 ordinance to replace the temporary ordinance and that's really all they decided. Each of the 4 Council Members offered their own thoughts, individual thoughts about what it would look like. 5 Some of them said oh, we don't want the beauty contest anymore, we want first come first 6 serve. Some said oh, we want the allocate, unused allocation to roll over, but there was no 7 action or unanimity about those characteristics of what the program would look like. And so 8 we thought before going back to Council we would seek the Commission's insights and input if 9 you have any. Again, we're not asking you to take any action, but we're interested in your 10 individual thoughts about how this program could be structured in the future and we will come 11 back to you for a more organized and formal action item at some point in the future. So I mean 12 I appreciate you might want to not want to spend a ton of time tonight, but I thought we 13 thought your comments would be useful (interrupted) 14 15 Chair Alcheck: And allow me just to also sort of suggest that our obligation, our I think chief 16 responsibility here is to review items and provide feedback on Council directed matters, but 17 also a lot of times we can provide insight and shape the discussions the Council has without 18 necessarily their direction and input in advance. And so I would encourage us to look at this 19 particular opportunity as a many of you were not on this Commission when we first dealt with 20 _______________________ 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. this cap. And it was a very interesting dialogue that we had last time we reviewed it. Here it's 1 coming to us again and there is a real opportunity here to figure out whether there are ways to 2 improve upon it. And I think we're all in a position to provide some insight and I think that that 3 will help this moving forward. And I know it's going to come back to us, but at least this way we 4 have an opportunity to see some of the questions that we might have get answered in that 5 follow up session, so. 6 7 Ms. Gitelman: Yeah and I apologize there's one thing I forgot about the Council's dialogue. So 8 they talked about the their desire to adopt a permanent ordinance. They also talked about 9 their preference that the annual limit area that's included be extended from what it is currently 10 to the whole City minus the Research Park. So they actually I think they did include that in their 11 Motion, but they didn’t include anything else about the process or exemptions or any of the 12 other details that will have to be figured out during the rewrite. And we'd love your thoughts 13 on those things so that maybe we can get let staff go with the presentation and then hear from 14 you on those elements. 15 16 Clare Campbell, Senior Planner: Ok great, thank you; Clare Campbell, Senior Planner. So tonight 17 we're going to be talking about the Annual Office Limit Ordinance. The purpose of our 18 discussion today is we're going to provide you with an update of the office development since 19 _______________________ 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. the implementation of the interim ordinance and ask for feedback and comments for 1 developing the permanent ordinance. 2 3 So the interim ordinance was adopted in September 2015 and the intent was to meter the pace 4 of development in the City regarding office and R&D development. The City had been 5 experiencing substantial development of office and R&D projects and concerns and had 6 concerns about the rapid growth and how that may exacerbate traffic congestion and parking 7 conditions existing already in the City as well as some negative impacts potentially on existing 8 neighborhood character. So the ordinance established a 50,000 square foot limit for new office 9 R&D development and it focused its focus on the Downtown California Ave area and the El 10 Camino corridor. And the ordinance is due to expire in eight months on November 26, 2017. 11 So here's a map showing where the area applies, the area that the ordinance applies to. So we 12 have a section here in the Downtown including South of Forest Avenue (SOFA) I along the El 13 Camino corridor and this whole section here is called the California Avenue area. 14 15 So give you a brief summary of our ordinance. So basically it applies to five different land uses. 16 We have R&D, administrative office services, general business office, medical office, and 17 professional office. We have included some exempt projects from the ordinance and they're 18 basically small projects that are less than 2,000 square feet (sf), small medical office that's 19 5,000 sf or less, and self-mitigating projects. So those are projects where the housing 20 _______________________ 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. component provides more housing than the number of workers that would be employed by the 1 project. And also self-mitigating projects include projects that have a really strong robust 2 Transportation Demand Management (TDM) program that helps to improve the parking and 3 traffic conditions. 4 5 So the ordinance also established selection criteria for evaluating projects and we have five of 6 them here. So basically the first one is impacts and does the project include appropriate 7 development density, does it avoid or mitigate traffic and parking impacts. Design, does the 8 quality and is the design quality compatible, is the design quality good, and is it compatible with 9 the surrounding neighborhoods? The environmental quality, does the project have impacts as 10 determined by our California Environmental Quality Act (CEQA) evaluation? And for public 11 benefits does the project include meaningful public benefits that the City can utilize and 12 appreciate? And the uses, so does the project include a mix of uses with substantial housing, 13 ground floor retail, and cultural amenities? 14 15 So to facilitate the implementation of the ordinance some administrative guidelines were 16 developed and this document basically reflects the ordinance requirements, but it includes 17 some more detailed procedures to streamline the implementation of the ordinance. It includes 18 the scoring process and the evaluation scorecard and that scorecard reflects the points which 19 we use for the ranking. The guidelines also reiterate the review timelines for projects and that 20 _______________________ 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. projects approved cannot roll over their square footage to another project. If you don't use it 1 you're going to lose it basically. 2 3 All right so I'm going to walk you through the basic steps of the existing process. So the first 4 thing is that it is based on a fiscal year and the projects as you know are submitted year round 5 for us to take a look at. During the time from July 1st through March 31st no qualifying projects 6 can be approved by the Planning Department. So the first step is we need to establish a project 7 list. So on March 31st staff will determine which office and R&D projects are ready for final 8 action. And ready means that they've been deemed complete, that we've done all the 9 environmental review, and all the boards and commissions except for Council have to have 10 done their review and all the required reviews have been completed and the project is ready 11 for action. The second step once we have our project list is to determine whether or not the 12 office square footage goes over the 50,000 sf. So on the bottom line here if the projects do not 13 go over 50,000 sf then those projects would get approved following the standard review 14 process. So for the other scenario if the projects do exceed the 50,000 sf those projects are 15 forwarded to Council for their review and determination of the project. So that kind of that 16 affects our first beauty contest review, but both scenarios must be completed by June 30th of 17 the year. So then after June 30th passes we start the process over again for the following fiscal 18 year. 19 20 _______________________ 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. Ok so in the two years that we've had our ordinance we have not yet had the opportunity to try 1 out or test our process that we've put in place. So we actually don't have any real information 2 to report back to you on the effectiveness of our process. So since the implementation of the 3 ordinance though there appears to be some conscious efforts made by some of the applicants 4 to avoid triggering this ordinance and what they've done is they've either just taken office out 5 of their project or they've reduced the amount of office in the project so it becomes exempt 6 and doesn't trigger any additional review. 7 8 So here I'm going to go over our pending projects. So this is a list of all the projects that we 9 have currently on file that are open that have some office component to it. So the first two 10 3045 Park and 411 Lytton these two projects count towards the 50,000 square foot limit. The 11 next project 4115 El Camino I've included this even though it's a preliminary architectural 12 review just to illustrate what I had just mentioned that some projects really keep the square 13 footage down so they become exempt from the process. So this project is only proposing to 14 have 2,000 sf so then it's not part of the projects that we would review as part of the annual 15 office limit. The next one down is 3251 Hanover and this project is located in the Research Park 16 so the office limit doesn't apply for this particular project for two reasons: it's outside the 17 boundary that we've defined under the ordinance and it's also replacement square footage so it 18 doesn't account it doesn't count towards the limit. So the next one is 380 Cambridge and again 19 _______________________ 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. this one is exempt because it's less than 2,000 feet and 2600 El Camino is also exempt because 1 the 62,000 sf is replacement square footage. 2 3 So here you'll kind of get a sense that the total the figure at the very bottom here the 17,260 4 that's the number the square footage of projects that would count towards the 50,000 sf for 5 this ordinance. So even though you see several projects on our lists those would be the only 6 two that would count towards this ordinance. So for next year if it were just these two projects 7 that we're showing here to consider on March 31st then we would have left over square 8 footage. In this case it's approximately 32,000 thousand sf so that 32,000 sf can be approved 9 for other types of office projects long as it's done before June 30th. And again that's the hard 10 cutoff date for the process to start over again for the next fiscal year. 11 12 Ok so tonight we're looking to get your comments and basically they can be on any aspect of 13 this ordinance. It can be focused on the boundary, the square footage cap amount, the 14 selection process, first come first serve versus the competition, and the review process, but any 15 other part of this can be reviewed. We just know that we need to move forward with some 16 type of annual office limit. So next steps staff will continue with our public outreach and we 17 will forward your comments to Council for feedback and discussion and later of course this year 18 we’ll return with our draft ordinance for you to review. And the ordinance expires on 19 _______________________ 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. November 26th though Council action is needed by early October. And that concludes staff’s 1 presentation. Thank you. 2 3 Chair Alcheck: Thank you, staff. Ok I’d like to begin this oh, wait, we have a speaker card. Just a 4 minute, sorry. 5 6 Vice-Chair Waldfogel: [Unintelligible]. 7 8 Simon Cintz: Ok, thank you. My name is Simon Cintz. I'm actually going to decline to speak 9 now because I think what was pointed out before this is a study session and I would sort of also 10 be interested in seeing how you folks look at things and whatever and will reserve my 11 comments for later. So I've never been in here when I've been the only speaker in, but so but I 12 do want to thank the person from the City handling this for reaching out to the business 13 community. I did get an email. That was really important that we knew this was going on 14 although I didn't really quite understand what the details of it and look forward to hearing what 15 your comments are. Thank you. 16 17 Chair Alcheck: Ok. Yeah just so we're clear the next opportunity for public comment would be 18 the next time we see this item, not later tonight. Just in case. 19 20 _______________________ 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. Vice-Chair Waldfogel: [Unintelligible-off mic]. 1 2 Chair Alcheck: I suspect it is. Ok, so what I'd like to do right now is I hope we're comfortable 3 with 10 minutes? I’ll give everybody sort of hopefully it's less than 10 minutes and I'd like to 4 start at the other end of the table for this item so Commissioner Rosenblum will you kick us off? 5 Questions/comments. 6 7 Commissioner Rosenblum: Sure. 8 9 Chair Alcheck: However you’d like to start. 10 11 Commissioner Rosenblum: First just want start with a question. So you made the statement 12 that regardless of what the discussion or comment is tonight we have to move forward with 13 some kind of office cap. And I want to just ask you why is that? My understanding was this 14 ordinance expired either two years from adoption or upon adoption of the new Comprehensive 15 Plan whichever is sooner. So we’re coming against the two year mark which is the sooner. 16 There's nothing in those says we have to have an office cap so I'm curious about that comment. 17 You seem to want us to continue this policy maybe with modifications, but I wonder if you 18 could respond to that. 19 20 _______________________ 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. Ms. Gitelman: Sure, I'd be happy to respond to that. When the Council had that meeting on 1 January 30th where it was talking about the Comp Plan one of the questions we asked in the 2 context of a discussion of land use policies was whether they wanted to include a policy about 3 metering the pace of growth or a program related to the office cap. And the response was well 4 we don't really need to put this in the Comp Plan, but we would like to update the ordinance 5 about the annual limit. Maybe make some changes to it, but we would like to continue that. 6 So as you point out the current ordinance expires either in two years or when the Comp Plan is 7 adopted whichever is sooner. There is a potential that we could simply just extend it if we need 8 more time until the Comp Plan is adopted, but we are thinking based on the Council's direction 9 on January 30th that they will want a replacement ordinance and so we thought it was wise to 10 start thinking about what that might look like and this was an obvious first stop to get some 11 input. 12 13 Commissioner Rosenblum: Ok, great. In that case I have two parts to this. So the first is should 14 this ordinance be continued with improvements or should we allow it to expire. And regardless 15 of which way we think as a body I think that we do have to answer Council’s question which are 16 what are the parts of this ordinance that you’d want to adjust. But I think it's worth weighing in 17 to them is it a good thing to have a cap and as you know from the Our Palo Alto Summit there 18 were three different modes considered. There was metering, there was a hard cap, and there 19 was mitigations. And our Council ultimately went with a cap. But I think it's worth our body as 20 _______________________ 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. an independent advisory body first weighing in do we think that's the right mechanism, but 1 second to answer their direct question which is let's if we assume they do want to continue 2 with this current mode what are the changes that one would make. 3 4 So in terms of using my slot I would say first in terms of whether or not this is the right 5 mechanism I would argue it's never been the right mechanism. Now we're two years into it and 6 we know it literally didn't do anything. We've never hit the 50,000 number. So it took a lot of 7 staff time, it took like four Council meetings, it took three Planning and Transportation 8 Commission (PTC) meetings, it's taken all of our time quite a lot, but it hasn't actually done 9 anything. And all that time I think could have been more valuable if we had worked on 10 mitigation measures and had really focused on making a Transportation Management 11 Association (TMA) more effective. Now part of the reason why I never thought this would, was 12 the right approach was it's kind of the horse is already out the barn. A lot of the problems 13 we’re trying to address have to do with buildings that were constructed even before the 14 Ninety's which were under parked. So working on new construction doesn't really address this 15 problem of traffic and indeed again despite put this measure into place I don't think that there's 16 been a corresponding reduction in traffic that we would have wanted from this measure. 17 18 So also finally when we did the Our Palo Alto Summit I think there were like 300 people in 19 attendance seventy percent of people in attendance voted to work on mitigations and only five 20 _______________________ 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. percent for hard caps. So even the people that were most involved always said this was the 1 wrong approach. So I would argue pretty strongly that people that citizens involved the process 2 said it was the wrong approach, the analysis would say it was the wrong approach, and 3 hindsight suggested it didn’t do anything. So it feels like a weird thing to continue. 4 5 Having said that if we are going to continue my observations based on the way we have it are 6 the following. I think the first big problem with it that Stanford Research Park (SRP) is left out 7 of it. I think SRP is the biggest source of traffic through our community. And the reason is they 8 have most of the large employers and it's very difficult for them to have any kind of transit 9 program. And so I think it's something like 73 percent of SRP employees still take Single 10 Occupancy Vehicles (SOV) whereas the Downtown number I think was something like 57 11 percent and Stanford's number is something like 47 percent. And so whereas in other places 12 they've been able to get people out of their cars SRP has not and they have the big employers. 13 And so it's a bit of an odd thing that we have this program that exempts them from this. If 14 there's any place we want people to build it's actually here where people don't drive their car 15 as much it's not there, but this program as you saw in your pipeline the largest building I think 16 was 110,000 sf is not part of this because it's built there. And I think it would be much more 17 attractive now to build there because you’re not counting the cap. You don't have to go 18 through this beauty contest, etcetera. 19 20 _______________________ 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. Second, I do think there should be some mechanism for banking unused credit so if we build 1 very little this year, if there's a downturn and we stop building that upon recovery there is cap 2 relief. Now in terms of how many years the credit can be built based on the analysis that you 3 gave us it takes anywhere between two years and five years after recession for us to start 4 building again. But any rate Council can come up with their own mechanism, but I would be in 5 favor of somehow banking these credits on a go forward basis. 6 7 And my final comment around the ordinance itself is that some of the exceptions seem 8 counterintuitive. So there's a real kind of love small projects meaning they don't count against 9 the cap. So offices below 2,000 sf, medical offices below 5,000 sf and again if part of our point 10 is that we're trying to cap office space to mitigate traffic impact which was I think one the 11 drivers of this having multiple small places just seems like it's counter to the goal of trying to 12 get a more efficient use of space. Meaning given X number of employees you want to have 13 fewer cars and if you're subdividing into multiple small places it doesn't seem like there's a 14 public interest in that or at least it's counter to the goal of the whole ordinance. So that's on 15 the general ordinance. 16 17 The last couple comments I'll make are on the beauty contest itself. I love the idea of beauty 18 contest so if we’re going to have this again I hate this whole, this whole ordinance, but if we're 19 going to have it I do like the that if we do have it that the beauty contest idea is kind of cool. I 20 _______________________ 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. like that then Mayor Burt had proposed it. I’ve always been in the context of this a fan. The 1 heuristic is a bit odd. It's very skewed towards penalizing density. So there's 110 points I think 2 that are allocated of which about 50 are related to density or impacts of density and 20 are 3 related to use. So do you have housing or do you have mixed use, etcetera of which 10 of the 4 points are those that feature housing and I would personally think that in terms of if we're 5 using beauty as one of our criteria one of our great community needs is more housing. And so 6 the beauty contest is heavily skewed towards weight sort of density verses use. And so my 7 personal preference would be to skew towards those who are helping us to relieve our housing 8 crisis. 9 10 So that's the sum of my comments. So just to sum it up first I'd say I would love this body to say 11 that this was the wrong mechanism we should go for a mitigations focus mechanism, A. But if 12 we're to go with this mechanism then my three big points are put SRP in as part of it, consider 13 banking credits, the exceptions we should not be skewed towards small. If anything if you're 14 trying to traffic mitigation normally having some kind of scale is better so you shouldn’t give 15 incentives to go smaller. And then finally the beauty contest should be skewed towards things 16 that we want and so I think housing is a big one. That’s it for me. 17 18 Commissioner Summa: So I actually don't think this is a bad ordinance I guess. I also I just don't 19 like the word beauty contest. I wish we could call it something else because it's kind of 20 _______________________ 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. offensive. But anyway I was going to ask couple questions and then I’ll make some comments. 1 Have we had any self-mitigating projects? No and ok, and then so couple of things. 2 3 There was a lot of talk at the Citizens Advisory Committee (CAC). I think this should be citywide 4 for sure and there was a lot of talk on the CAC about including the Research Park, but maybe 5 allowing the Research Park to roll over square footages annually that they don't use and the 6 idea was that because there's such bigger buildings there. So I would say I favor a citywide 7 program and I would encourage the Council to look at a way to include the Research Park that 8 lets the Research Park be the Research Park, but also we'd have more control. I have a concern 9 about replacement square footage not being included and maybe this is a legal issue it can't be. 10 And one of the reasons is because replacement square footage is often replaced with a much 11 denser use which just has more people and more cars, more SOV trips, more greenhouse gas 12 emissions. So I would look at a way of maybe if it's legal including replacement square footage 13 with some, in some way. 14 15 And I was especially struck in the findings by Finding B about the huge, huge increase in Class B 16 office space. And I know we have a lot of concern about displacing those kind of uses so and 17 they've actually increased exponentially in price much more than Class A office rates. So that 18 was interesting to me. So I oh, and then I would like to give… I think it's interesting that this 19 ordinance not only… well, it did two things. It wanted to meter the pace of growth, office and 20 _______________________ 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. R&D growth, but it also wanted to give the Council a chance to look at projects and prioritize 1 them through the non-beauty contest, the merit contest, and it didn't do that. And I think that 2 was because 50,000 is too high a threshold. I think if we lower the threshold and I'm not sure 3 what the magic number would be we could get more projects into that prioritization and which 4 would also have the benefit of including projects that were better for the public. It may be 5 prioritized housing also so let's see… Yeah, so those are my comments for now. 6 7 Commissioner Monk: Ok so in looking at what the rationale was for creating the ordinance and 8 looking at the outcome of the ordinance I'm wondering why we would need to continue it 9 based on what the findings were on Page 33 and also in your presentation you were [sitting] 10 that in the end of the very first paragraph of the top of Page 33 that the projects really haven't 11 come forward and you believe that a lot of it was to avoid the potential of additional rigors 12 required by the interim [AOL] ordinance. I don't know if you wanted to provide any additional 13 input on that or feedback as to why the ordinance has reduced the amount of applications for 14 new office projects. 15 16 Ms. Campbell: I think basically applicants don't want to have to go through this additional 17 review. And it's very unsure for them to kind of go through this process and it can be very I’m 18 not finding the right word, but basically I think what's happening is that our review process is 19 well known. And it takes a lot to get through even a normal application process, but when we 20 _______________________ 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. have to add this additional contest for this evaluation I think it makes it much more 1 unpredictable for applicants to project forward and to invest time and energy to do something 2 here in Palo Alto. So I think that could definitely be something that adds to why we're not 3 seeing anything happen. 4 5 Commissioner Monk: Ok, so instead of it actually pacing growth it sounds like it's halting 6 growth. Does that sound correct under what we've seen in the last two years? 7 8 Ms. Campbell: I think honestly that the two year timeline might be a little bit short for us to 9 kind of make a full determination on that. 10 11 Commissioner Monk: Ok. 12 13 Ms. Campbell: Certainly just based on the numbers that are coming in for applications we 14 definitely have seen a decline in applications. 15 16 Commissioner Monk: And has this ordinance had a benefit on traffic in any way? Have we seen 17 any changes in traffic as a result of this ordinance? 18 19 Ms. Campbell: Not that I'm aware of. 20 _______________________ 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. 1 Commissioner Monk: OK. What was the reason to not have a rollover? And if you don't want 2 to answer that I would just say that I would support a rollover with some sort of oversight or 3 timeline for it to expire. 4 5 Ms. Gitelman: I think originally the discussion was about a mechanism to meter the pace of 6 growth and so in the original deliberations I think the Council felt like if the allocation could 7 rollover then you're really not having that effect of metering growth because you'll continue to 8 have the spikes. The leftover allocation will all be used in a future year. What they were trying 9 to solve for was the spikes where some years you’d have a ton of growth and in the next year 10 you wouldn’t. 11 12 Commissioner Monk: Ok. Well I see that on Page 31 that you talk about the six years where 13 there was in excess of the 50,000 sf, but you didn't really detail how far the growth was beyond 14 the 50,000. So it's hard to know what those spikes were from just my reading of what was 15 presented in the packet. Is that information that you have or? 16 17 Ms. Gitelman: Yeah. We have a different data set that's a little harder to use that goes back 18 much further and it's we can represent it and really show the spikes. There are years in which 19 we see a lot of growth and we were trying to solve for that problem. 20 _______________________ 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. 1 Ms. Campbell: And just to add to that in the staff report from September 21, 2015, when the 2 ordinance was adopted there was a hand out that was provided as an attachment that basically 3 showed all of the development over the last 15 years and it illustrated what the square footage 4 numbers were. 5 6 Commissioner Monk: That’s on this? 7 8 Ms. Campbell: No, in the September 21, 2015, Council report. 9 10 Commissioner Monk: Ok. And when it I just have one more question and then I have a few 11 comments on to the ordinance itself. When it comes to mixed use does the square footage 12 that could be occupied by a retail or residential use go towards that cap or is that kept outside? 13 14 Ms. Campbell: No. It’s just office only. 15 16 Commissioner Monk: Ok. So I wanted to look at Page 36 where it's talking about any 17 contradictions between our Comp Plan and the ordinance in the event that the ordinance does 18 remain in effect I would advise to look at the last sentence and consider making a change that 19 the policy most instead of the policy most restrictive of growth shall apply that that be further 20 _______________________ 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. qualified to the policy most restrictive of R&D growth or office growth or whatever people 1 agree with on the Council. Or it could say the policy least restrictive of housing shall apply. 2 That would be a recommendation that I would make because it's broad the way it's written by 3 just saying growth in general. 4 5 And then in regards to the self-mitigating projects I did send an email to Jonathan Lait on this 6 one because I was curious about whether or not any of those had been accomplished and you 7 confirmed now that it would had not. Has there are any examples ever of this ever being 8 attainable any point in time? On that's on Subparagraph C on Page 37. 9 10 Ms. Gitelman: Yeah, I'm not aware of any although we have had inquiries from developers who 11 are interested in this concept. So I think people saw this in the ordinance and thought it was an 12 intriguing idea. So I've had at least one local developer talk to me about how they might go 13 about something like this. 14 15 Commissioner Monk: Ok so what I would love to see is some follow up from the developer and 16 whomever to find out what we can do to make it more attainable and encourage development 17 because I think that self-mitigating projects that would increase our housing stock are in 18 compliance with the City's objectives of increasing housing. So I don't know if it's putting a 19 percentage in there rather than saying that it has to be more than the number of workers or 20 _______________________ 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. something like that. So I would like to see that looked at in a deeper level. And I think that's 1 my last comment. Thank you. 2 3 Chair Alcheck: Ok before I dive in I there’s this allegory I'm sure most of you are familiar with. 4 This individual, two individuals come into work and one is always too hot, they open the 5 window and the other individual is annoyed because they're freezing and so they close the 6 window and it's the same thing every hour one opens it, one closes it, one opens it and finally 7 someone’s like hey why don’t you put a sweater on? And then I and don't sit next to the 8 window and I'll sit next to the you know. That's not really how it goes, but you understand, you 9 appreciate my sentiment. 10 11 So I just want to acknowledge Commissioner Rosenblum’s comments. There is I always find 12 your analysis just to be incredibly valuable and it's not hard to understand how this ordinance 13 came about. It is it seems to just reek of a response that is politically driven. The overwhelming 14 growth that we experienced in Downtown the just the… we got the residential parking permit 15 program, we have so many, we have the difficulty these neighborhoods have in absorbing the 16 amount of office growth it's such a foreseeable sort of result, right? But we're capping office 17 growth that's it. Whether or not that actually achieves the goal of reducing so many of the 18 issues that the Downtown is suffering from is the sort of question that I think Commissioner 19 Rosenblum is highlighting tonight which is that at our at the Our Palo Alto event individuals 20 _______________________ 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. spent a great deal of time sort of evaluating options and the community felt that there were 1 some options that were more valuable than a cap. We currently have a cap in an area where 2 we the impacts are more mitigated than in areas that we don't have a cap which suggests a just 3 incredible iron, not I don't know if irony is the right, inconsistency with what are we actually 4 trying to do and what are we doing. 5 6 The best I should say the best or the only part of this ordinance that I like is that we get to re-7 review it because it's an interim. And I want to just commend staff and Council for operating in 8 that framework. There's a real there's a wonderful reason for using interim ordinances like this 9 one. It gives us a chance to look at it a couple years later. I felt the same way about the 10 ordinance we reviewed a couple weeks ago. I feel the same way about this one. I would never 11 encourage as a Planning Commissioner this City Council to adopt this ordinance in any other 12 way but in an interim fashion. So even if they proceeded to adopt this ordinance I would 13 encourage them to do it for either another two years or if they were uncomfortable with that 14 limit for four years, but to not necessarily adopt it permanently because I personally share the 15 view that this is not the correct solution for the subset of problems that we are attempting to 16 address. 17 18 I have heard really what I would describe as strong arguments for why a beauty contest despite 19 potentially the challenge of that name being divisive, but I've heard positive arguments for it, 20 _______________________ 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. arguments that I can relate to. Why not have a process in this City where we have architects 1 compete for projects that really demonstrate just tremendous architecture. The problem is is 2 in who's eyes, right? Who makes that determination, right? And then we created a framework 3 and my main concern is that the application of the point system or the decision… I don't I would 4 suggest that I'm uncomfortable with the decision of or the judges of the beauty contest to be in 5 a political body. I'd be much more comfortable if the Architectural Review Board (ARB) for 6 example evaluated the judged the beauty contest then the City Council because it depends how 7 you feel your Council member reflects whether you think they're pro-growth or you think 8 they’re a residentialist or however you feel they situate if you believe that they can be bought 9 or influenced in a political way then there's so there's it’s such a the system is sort of fraught 10 with potential problems. 11 12 So despite this beautiful, this I shouldn’t say beautiful. Despite this aspirational goal of having a 13 contest a system that pushes the best to the top I think the biggest problem with that is we’re 14 familiar with the saying you get what you pay for? I believe that applies in architecture and in 15 development. So if you're going to spend a significant amount of money developing a concept 16 for development and applying only to be slotted in with maybe 10 other projects that may or 17 may not that may exceed the thing and then to have absolutely no certainty as to whether or 18 not your project it we are discouraging individuals in my opinion from investing the sort of 19 money that would produce the best result because that's too much risk. Now if the goal of the 20 _______________________ 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. ordinance is to do just that we actually want to discourage developers from developing in this 1 town commercial office space not just literally with a cap, but also by creating a process that 2 involves so much ambiguity and uncertainty that developers won't even want to participate 3 then this is a great tool for that. And so from that perspective if that's the goal City Council's 4 within its right to make that determination and whether or not that's the right goal is a… but if 5 the goal is to discourage development because of ambiguity then I believe that this is the right 6 tool. So if that's the goal this is the right tool. I think that the lack the reason why we have not 7 hit the cap is not simply because there's been a slowdown in office. I believe it's already having 8 an impact of discouraging applications in office space because of this I don't want to say 9 unintended outcome because it could be the intended consequence. 10 11 I we just had a discussion about the Environmental Impact Report (EIR) and I wondered during 12 that discussion whether the office cap affects the economic analysis that was inherent to the 13 scenarios. And I guess there was a part of me that believed that our when we adopted this 14 interim ordinance that the Comp Plan would actually come before it expired and somehow it 15 would incorporate policies and programs that furthered the stated goals of this interim 16 ordinance. So I guess one of my suggestions to Council would be to evaluate whether or not 17 they really would like to accomplish their objectives whatever they may be in an ordinance like 18 this one or whether there is a way for us to incorporate them within the Comp Plan that 19 _______________________ 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. prioritize… I'm not sure. If they if the Council decides to expand this ordinance citywide I think 1 that there should be a consideration for rollover. 2 3 And finally if the Council determines that they want to continue this ordinance permanently I 4 would suggest my recommendation to Council would be to eliminate the beauty contest 5 entirely. Right now we choose March 31st as just an arbitrary date. So any project that got 6 let's say the office cap had been hit and just at the right amount that didn't trigger a beauty 7 contest because it was only 50,000 projects, but it got hit in May of 2017 then any applicant 8 who is ready to go after May 2017 would in essence have to wait till March 31st. They could be 9 they could have spent two years getting through the process on May 1st, but they have to wait 10 till March 31st to participate in this process. And I would suggest that a much more investor 11 friendly or I should say maybe the right term is developer friendly way to do this would be to 12 treat it as a first come first serve process. Which is to say that no that you can't start you can’t 13 we can't green light your project on May 1st because you're in a calendar year where we've 14 exceeded the number of you exceed the cap, but come January one you're permitted to begin 15 your project. 16 17 And you may find that between May 1st of 2017 and November 1st of 2017 we already hit our 18 50,000. And so the projects that are slated for 2018 are all determined in those months 19 between May and November of the previous year, but at least there would be some ladder. 20 _______________________ 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. And if you were a if you were out in the community and you were and attempting to gauge 1 whether a development project was worth your time you could very easily say ok wow, there 2 are 11 projects before me. The earliest I could possibly go would be 2019. That is the sort of 3 certainty that would encourage developers to go ok if I can get in line for 2019 then I'm going to 4 hire the best architect I have. I'm going to get the best design I can. I'm going to throw 5 everything at this because I get one shot possibly every four years and I want it to be brilliant. 6 And I think that will encourage that sort of dollars that will create the sort of results that we 7 want. 8 9 So again I would be in favor of eliminating the beauty contest and I'm not suggesting that we 10 don't create a framework that encourages the goals of the beauty contest, but we do in a way 11 that doesn't discourage investment. And I don't know what that is yet, but I know that this 12 doesn't accomplish that goal for me. Ok, that's those are my comments. 13 14 Vice-Chair Waldfogel: My turn? Thank you. I've heard some speculation both among my 15 colleagues and from staff that the cap produced office growth within the boundaries, but do 16 you have any interpretation on why we haven't seen significant net new office group growth 17 outside of the cap boundaries? 18 19 _______________________ 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. Ms. Gitelman: We don't really and I'm not sure as Clare indicated that we've had a long enough 1 test of this idea to really draw conclusions and I think we need to study not just our local 2 conditions, but regionally what's happening in the office market. I don't know whether we 3 adopted this ordinance just at the time that something was changing here. I think we should 4 hesitate to draw (interrupted) 5 6 Vice-Chair Waldfogel: Ok, so yes so it's pretty speculative about cause and effect and I get that. 7 Also there's some discussion about traffic and was there ever any intent that the office cap 8 would remediate existing traffic? 9 10 Ms. Gitelman: No. I think the Council was very clear when this was adopted that they were 11 attempting to address the pace of change in neighborhoods that people felt were changing 12 most rapidly. 13 14 Vice-Chair Waldfogel: Ok, so we wouldn't expect to see traffic reductions over the last couple 15 years as an effect of this interim ordinance? 16 17 Ms. Gitelman: That’s right. 18 19 _______________________ 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. Vice-Chair Waldfogel: Yeah, ok. Great. Yeah and I mean I've seen some speculation that it's 1 really higher office density that's above the code assumptions of four or five employees per 2 thousand that's really a causal factor. I’m going to… we all had anecdotes about this, but this 3 probably isn't the right place to share them. 4 5 So I support extending the cap at 50,000 feet. I feel like a bit of an odd man out here, but I 6 don't support extending it outside the current boundaries. I think that using mitigations in the 7 Research Park versus metering in the boundary districts gives us a really interesting local A/B 8 test on what works. And I think that both these approaches are valid and having a local running 9 a local experiment maybe making a decision in the future that one of the other is preferable 10 may be an interesting exercise. I don't support rollover although I could be persuaded that 11 rollover I mean well, if we only keep it within the current districts I don't support rollover. And 12 rollover isn't an issue outside of the current districts or in the office park. 13 14 I do support continuing I'll call the bake off process because I like the idea of the City having a 15 seat at the table to get good projects. I appreciate my colleague Commissioner [Note-Chair] 16 Alcheck’s comments about great architecture. I haven't seen great architecture regularly 17 committed in areas outside of the development cap boundaries. And I'm not too worried that a 18 bake off process will deter good design. I mean I think that we need to be cognizant that we 19 have to design processes as if our objective is to improve the quality of design we have to 20 _______________________ 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. design processes that will achieve that, but I'm not I'm not concerned that a the City having a 1 seat at the table will deter good design and will deter good projects. 2 3 Commissioner Lauing: I want to go back to that top of Page 33 again. Again if we’re going to 4 make decisions we like to have data and I think you're saying that we haven't had much time to 5 get much data in fact none so it's not indicative of anything really. So I just think we should all 6 kind of understand that. Were there any even anecdotal developers saying I don't like this 7 ordinance so I'm not going to submit or is this just sort of a presumption or speculation? 8 9 Ms. Campbell: I think so the project list that I gave you some examples we definitely saw some 10 projects where the applicant has reduced the amount of square footage and we had some 11 projects that were already like under review when we first adopted the ordinance where 12 they've actually they had planned for office and they've switched it to retail or yeah and 13 housing, yeah. So we’ve… but again we haven't really seen this enough to really make any real 14 determinations on a trend. 15 16 Commissioner Lauing: That latter example might turn out to be a plus. 17 18 Ms. Campbell: Yeah. 19 20 _______________________ 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. Commissioner Lauing: If they’re putting in more housing and retail than office. 1 2 Ms. Gitelman: That’s right. I mean there’s only a few examples, but we have had projects that 3 were in our shop for review as office projects the cap was adopted and they have since changed 4 to be residential projects. 5 6 Commissioner Lauing: Ok. So I also appreciate Commissioner [Note-Vice-Chair] Waldfogel’s 7 point that there's not been sizable building anywhere, but there certainly hasn't been in the 8 restricted area so to that extent it's been “successful” given very little data. I also wanted to 9 get clarification on what is the real assignment here? The words you put in the front here is 10 that they made a Motion, Council made a Motion that directed staff to bring forward a 11 permanent annual limit ordinance and it’s separate from the Comprehensive Plan update. Is 12 that separate in terms of timing? Because they want to get it done quickly by this date even if 13 the Comprehensive Plan is not available? I mean it certainly isn’t going to be in contradiction to 14 the Comprehensive Plan so I’m still looking kind of for clarity of what the assignment is. 15 16 Ms. Gitelman: Yeah I think they're there they meant separate to mean separate. That we were 17 asking them at that time whether they wanted to include a policy framework in the Comp Plan 18 for an annual process like this and they said no. We I mean obviously we don't want to 19 contradiction, but what we’d prefer is to refine this through an ordinance process. 20 _______________________ 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. 1 Commissioner Lauing: Instead of a policy in the Comp Plan? 2 3 Ms. Gitelman: That's right. 4 5 Commissioner Lauing: Ok, that's helpful. Yeah I think we could use some more debate on if we 6 expanded to certain areas would they be just the office park or would they be other areas and I 7 don't know that tonight’s the night for that. So that's all. 8 9 Commissioner Gardias: Thank you. So I believe definitely that the room proper place for this 10 policy it's not a separate regulation, but the Comp Plan. And I'm not sure what's the 11 mechanism here is this is it either a representative of this Commission should speak at the 12 meeting of the City Council or maybe we could ask the staff or the Director to recommend if 13 that would be agreement maybe among ourselves to put a recommend the Council to 14 reconsider their suggestion and include this regulation in the Comprehensive Plan. And there is 15 a the reason is that a Comprehensive Plan should address housing and office balance. And then 16 specifically here there is no greater topic then that. This policy addresses this balance in a 17 significant way. So excluding that from the Comprehensive Plan somehow negates the purpose 18 of the Comprehensive Plan. So it's not very logical for me for this reason I would like somebody 19 there to from this Commission to recommend the Council to reconsider or maybe staff would. 20 _______________________ 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. 1 In terms of how this should work so 50,000 annual limit cap it is the number that doesn't 2 explain itself. It's like with any other numbers that we reviewed here at this Commission and 3 the impact fees was recent topic. We are given the numbers and we need to somehow which 4 are artificial they mean nothing. They are prescriptive as opposed to performance based and in 5 this way they just don't work with variety of other regulations. They are just pretty much 6 artificially created. We know why because at the time when this regulation was created there 7 was a pressure to limit the office cap and then for the time being it worked so there was 8 nothing wrong with this interim regulation that Council passed at this time, but now we are 9 approaching discussions on the Comprehensive Plan so maybe we can just approach it 10 differently. 11 12 I think that the way to approach it is to define and to commit to a ratio which you already 13 presented to us when we were talking about EIR. Where we have jobs, employed, and resident 14 ratio of 3.3 and then this cap may be expressed with this ratio. We can maybe in the 15 Comprehensive Plan we can have a statement that this City that the vision of the City is to drive 16 towards a narrower or is to minimize the today’s differentiator or the ratio that is pretty much 17 high, it's very high maybe the objective of the City is to drive toward lowering this ratio. And 18 inclusion of the statement in the Comprehensive Plan would address this issue totally. We can 19 also assume that there is a variance that from the ratio, let's say 3.0. There can be variance 20 _______________________ 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. annual or quarterly variance of 0.05 which it would be a standard deviation from the mean and 1 then as long as the City marches with the development between those two parameters we’re 2 fine. So then we would not need to have any other review, any beauty contests or any other 3 first come first serve as long as there is a metric and this metric should be naturally maintained. 4 5 This discussion would resolve itself, but of course we would have to have understanding and 6 agreement and then maybe the agreement that City Council is trying to express with the recent 7 discussion maybe it’s the target ratio that we should have. And then if we have it as I said, 8 right, we would not need to have this cap. As I said 50,000 doesn't say anything to me? I was 9 trying just to do some numbers and then excluding I think we have 3.2 million sf which are in 10 the Comprehensive Plan out of this 1.3 million were already taken by the Stanford Medical 11 Center which leaves us with 1.7 so give or take. Now there is a question how much of this 1.7 12 will go to the toward the outside areas, how much will be left for the City and that remainder 13 should be pretty much allocated towards the 2030 horizon of the Comprehensive Plan. So if 14 you do if you discount the growth of the area outside of the… if you discount the growth of the 15 areas like SRP you are left with some office area that may be allocated toward the City if you 16 drive from 3.2 million sf number. Other ways to approach it as I said is to just pretty much look 17 around this ratio. One method or the other method it just give us the greater direction and we 18 don't need this regulation. 19 20 _______________________ 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. But however my colleagues talk about this that we need to answer this question what if we're 1 left out with this specific regulation so for this reason my propensity would be like this: I don't 2 believe that there should be any beauty contests because I don't really think that it serves 3 anything. I'm sure that it would not self-serve better architecture just knowing that higher is 4 the that higher burden of the regulation equates to a mediocre architecture. So architects are 5 busy with resolving the issues around the zoning and regulations and they don't design and we 6 know that. So I would be against the beauty contest. 7 8 I think that it should be on the first come and first serve basis and it should be within the rolling 9 timelines. So as long as there is a cap for the 12 months and if that amount of the area is 10 unattained, the office area designated within this 12 months it should keep, going. Of course 11 there is a question that you may ask what's going to happen if there's a large project on the 12 horizon that will automatically go above this cap,? So then of course we would have to just kick 13 in some other review, but then as long as this is below that cap that pretty much the 14 applications should be rolling in. That's how I think about this. I agree with colleagues of mine 15 that suggested to include all the office area regardless so I think that the medical offices all 16 should be included and then all the areas below 2,000 should be included in this cap as well. So 17 those are my comments. Thank you. 18 19 _______________________ 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. Chair Alcheck: Ok Commissioners our the light system does not really work right now because it 1 doesn't reflect the news, the addition of our newest member so just signal me if you have some 2 additional comments. Any order. 3 4 Commissioner Lauing: I was just going to circle back to what I said before we had this 5 conversation and I think the conversation illustrates there are a lot of different opinions. 6 There's a lot of different levels of knowledge about this because of when it came up. And if 7 Council wants us to do something besides just tweak this ordinance which we certainly can do 8 then I think it needs more study. Perhaps even a two or three person ad hoc committee in 9 advance of the next meeting with people that we know have maybe a different opinions so we 10 get something done so we could reestablish the Waldfogel/Rosenblum couple there and see 11 what comes out of that one because there's various opinions that I heard up here so. 12 13 Chair Alcheck: It's an interesting idea. I think to what extent we can affect... So your tasked 14 with the process of bringing an ordinance to City, to the to us and then from us it will go to City 15 Council. So this is in essence like a study session before the development of an ordinance 16 which we’ll review and then either recommend or revise or theoretically recommend revisions 17 because it we may not see it twice on its way to Council, right? 18 19 _______________________ 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. Ms. Gitelman: Right. I think we'd like an opportunity to think a little further about the process 1 after tonight's discussion. We did hear a wide variety of opinions if we had to develop an 2 ordinance based on tonight's discussion I think we would be hard pressed to do that. So I think 3 we want to regroup a little and maybe we'll sit down with the City Manager and talk about his 4 impressions of how this fits into the Council work program this year. We do always have the 5 option with this ordinance to just extended it or let it lapse for a little while we take a little bit 6 longer. So I guess what I'm asking is let's if you have any further thoughts tonight that be 7 terrific and why don't you let us assimilate the input we've received and come back to you with 8 some suggestions and an updated process. 9 10 Chair Alcheck: Ok, I'm going to make a comment and I hope that it serves as a quick example of 11 I think some things that might work out for us. So I'm going to let all of you have an 12 opportunity, but I want to just make a quick comment. I think this will help further the process. 13 14 I think when we come back or in the in your next step this self-mitigating projects exclusion I 15 think it would be very helpful if you could demonstrate how this would be achieved in a 5,000 16 or 10,000 square foot office project. How many housing units would have to be built based on 17 our assumptions for how 10,000 sf of office space is allocated or 5,000 sf or actually 2,100 sf 18 because one of my concerns is that this paragraph about self-mitigating projects is completely 19 unattainable. There is no 2,500 square foot office that within five stories could house enough 20 _______________________ 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. people to mitigate the jobs/housing imbalance. And so one of the questions that I would like to 1 explore down the road is ok well what how much, how what is reasonable? Like a half, could a 2 project a accommodate half of the housing units versus jobs that it creates? Because otherwise 3 this paragraph is essentially a impossible feat, right? 4 5 That's basically one of the questions that I have. So when, if we explore this further and if the 6 next version of this or what however this works I'd love to sort of figure out whether there is 7 such a thing as a self-mitigating project. Alright, so that's one example of potentially something 8 that could inform this discussion later and I encourage all of you if you have questions since this 9 is a very open ended return to go ahead. Ok. Commissioner Summa. 10 11 Commissioner Summa: So I mean it may not be a perfect ordinance I agree with that, but it 12 seems like it's been successful in doing something that was sort of a consensus moment on the 13 Comp Plan group and that is incentivizing mixed-use that's retail and housing. To respond to 14 people's concerns about housing and also address the jobs/housing imbalance or at least not 15 making it work. So I see it as having been sort of successful understanding that there's only 16 been a very short time to look at it. And yeah I think it’d be very interesting to have an example 17 of the self-mitigating project. Thanks. 18 19 Chair Alcheck: Commissioner Rosenblum. 20 _______________________ 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. 1 Commissioner Rosenblum: Thanks. So a couple reactions; first, I don't think this is that well 2 suited for like an additional subcommittee and the reason is the history of it which is that 3 Council had many sessions on this. We had many sessions on this. And part of the reason I 4 think you sense passion at least on my part for this is that I never actually thought this would do 5 very much. My opposition to it is that it keeps us from doing things I think will do quite a lot. 6 And just to say well this at least accomplished something I don't think, I think the best thing you 7 can say is we don't know. There just hasn't been enough time or who knows, but after hours 8 and hours and hours of Council debate and hours and hours and hours of PTC debate and public 9 input I think we could have done something much better. 10 11 And specifically I think what the community has always been interested in is the impacts of 12 office, the impacts of people. So where do people put their cars? How do they get into our 13 community? And there are effective ways of dealing with that. And so when I suggest to let 14 this ordinance lapse what I really mean is to choose one of the other options that were on the 15 table. So one of the options on the table was to work extensively on mitigation, so cap is not a 16 mitigation. To work on in our community that would be getting a funding source for our TMA, 17 getting proper leadership in place, getting proper oversight. So when I think of those however 18 many hours nine hours of Council meetings on this and all the hours that we had on this and 19 _______________________ 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. could have been spent productively trying to find a funding source for example for TMA I find it 1 kind of tragic. 2 3 But if we are going to do this again the thing that to me is one of the biggest examples of why 4 this is strange is that the place that leads to a lot of our traffic which is SRP in terms of the total 5 square footage of office and the fact that 73 percent of them drive alone. This is a known issue. 6 This has been an issue for years. They've been working on trying to get people out of their cars. 7 It's a difficult place for people not to drive to. That we've actually just flipped everything on its 8 head. The places where people are reducing their reliance on cars we've put a cap in place. In 9 a place where people can’t get out of their cars we’ve put no cap in place. It’s just the whole 10 thing is very strange. 11 12 And so when I suggest we let this lapse I'm not saying not replace it with anything I'm saying to 13 work on something that we would feel good about which is a program to really reduce the 14 reliance on cars in the Downtown area where that ability exists. And to me again it would be 15 it’s the Stanford plan. Stanford did an amazing job over the last decade plus of getting people 16 out of their cars, but it’s by focusing on this and not just putting a cap in place. I think if they 17 had just put a cap in place and not focused on all the programming they did around the shuttle 18 program, the go pass program, the education program, the marking program. That took work 19 _______________________ 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. and they focused on that. If they had just said a cap will accomplish what we want I think they 1 would have been short changed. 2 3 So anyway so my suggestion given this process would be I think additional like subcommittees 4 in this case is probably not the best use, but I do hope that we at least come up with some 5 consensus. I have my view. I may be outvoted on this one. I expect I would be, but at least I 6 think we should give guidance to Council that we support this ordinance being extended or we 7 don't we think it should be replaced with something different. And then hopefully some 8 consolidation of our feedback if we decide that this ordinance is really well actually, either way; 9 even if we say we should replace it with something they can just ignore us. And then I think we 10 still owe them some pointers on things that we think should be changed. 11 12 Commissioner Lauing: So a process wise would you say bring it back in a month and have 13 another debate and then vote on something? 14 15 Commissioner Rosenblum: Yeah, something like that. I mean I may be strong of will on this 16 one, but I'd be willing to do that right now. But I'm also happy to bring it back if people feel like 17 they need more time to digest and again this is maybe something where this all came during my 18 tenure and so maybe I feel like (interrupted) 19 20 _______________________ 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. Commissioner Lauing: You’ve got a lot of history. 1 2 Commissioner Rosenblum: Yeah. So it's possible that given the composition of this Commission 3 if people want more time to absorb and talk to folks then I'm open to that. But yeah I think we 4 should we owe Council some kind of direction and answer on this. 5 6 Commissioner Lauing: Yeah unless they've already told us otherwise. I'd like to see the exact 7 Motion actually if we could get that sent to us. 8 9 Ms. Gitelman: Yeah we'd be happy to do that and one of the things that we are talking about is 10 whether we should go to the Council and have this same kind of open ended discussion. We 11 really just scratched the surface because there were so many other issues on the agenda on 12 that June 30 that January 30th date. And so we're kind of figuring out can we fit a study session 13 into the Council schedule, should we just draft an ordinance and bring it to you and bring it to 14 them, we really have to strategize after hearing the wide variety of thoughts expressed this 15 evening. 16 17 Chair Alcheck: Look, I’ll say this: new, old, it doesn't really make a difference. I think everybody 18 on this Commission is sensitive to the impacts that have occurred as a result of the growth that 19 I think most of us have seen as residents. And I don't want to take away here to be Commission 20 _______________________ 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. split on whether to continue to develop office or not. I think or I at least I speak for myself 1 when I say this is not I'm not opposed to the office cap because I would like more office in our 2 City. I and one of the I think most valuable comments you're making is how much more time 3 are we going to spend on a potentially flawed approach? That is something that we need to 4 address. We can have another two meetings and debate office caps and I think one question is 5 are we continuing to waste time and I think there maybe even Commissioners that don't think 6 we would be and there's a lot of uncertainty involved here. So I don't know that we're ready to 7 even make a Motion to… I don't know. I shouldn’t say make a, I don't know that what we... 8 please. Why don’t? 9 10 Vice-Chair Waldfogel: So Commissioner Rosenbaum raises an interesting point that mitigation is 11 really at the bottom of this is the objective and maybe the way to split the difference is for the 12 time being I really think we need to extend this office cap, but perhaps what we do is we sunset 13 it around demonstrably effective mitigation. That when we show that we have TDM that works 14 or other mitigations that work that we increase the cap or we relieve the restrictions, but I 15 mean for the time being I think this is the best tool that we have in our or the best tool that we 16 have in our tool kit. We don't have reliable funding sources for TMA yet and perhaps that 17 would be an incentive for the private sector to adequately fund TMA. Who knows, you know 18 that's pure speculation, but maybe we come up with some tool like that. I don't know is an 19 interesting? 20 _______________________ 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. 1 Chair Alcheck: I guess my I'm sort of curious to know how you would respond to this exclusion 2 of the SRP. I mean that being potentially the largest generator of the impacts that the TDM 3 measures that you're waiting for would address. So why wouldn't you use the best tool that 4 you have to address an area that is creating the largest problem that you are hoping will be 5 solved? 6 7 Vice-Chair Waldfogel: Well I partially because I think that the 73 percent and what is it, 54 8 percent numbers are slightly deceptive. Until we actually look at the occupancy per square foot 9 basically how many trips are generated per square foot of building in those districts. I don't 10 have those numbers, but at least historically the Research Park has had lower occupancy 11 density. So I think that if we knew that we could say something smarter about this. I mean we 12 know that for better for worse we know that Cal Ave. has more trips now than it had some time 13 in the past because we're seeing demand for Residential Preferential Parking (RPP), we're 14 seeing a serious discussion about a new parking ramp. So I mean we know that affects have 15 happened, but I don't know enough to agree or disagree that the Research Park is a bigger 16 causal issue than other districts. 17 18 Chair Alcheck: I just want to follow up, I'm curious. So let's assume for a minute the numbers 19 are the same. Let’s say it was 54 and 54. Still why wouldn't you include that area? What would 20 _______________________ 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. be the rationale to not… what would how would we encourage TDM measures in that area if 1 there was no cap? Or the development of [unintelligible]. I get (interrupted) 2 3 Vice-Chair Waldfogel: Well I’m not sure what you're, are you arguing that the cap should be 4 extended to the Research Park? 5 6 Chair Alcheck: I'm trying to suggest that the exclusion in your mind, in your… you suggested 7 that you want to continue the office cap, but you want to exclude the… its expansion citywide 8 seems inconsistent and I was trying to I was trying to pick your brain as to how that made 9 sense. I appreciate that there's information that you're that you would like to obtain so. 10 11 Vice-Chair Waldfogel: Well and I'd like to see mitigations in the Research Park. I mean I'm not 12 saying we shouldn't do anything in the Research Park. I'd like to see mitigations. I'd like to see 13 that perhaps as a local experiment on mitigations versus metering, but that but I'm trying to 14 suggest there may be a middle ground here which is this isn't a calendared interim item this is a 15 this is interim until we show that we can actually achieve what we say we want to achieve. And 16 we just haven't done that yet. So let's show that we can do it and let's create some incentives 17 for them for the private sector to respond. 18 19 Chair Alcheck: Commissioner Rosenblum. 20 _______________________ 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. 1 Commissioner Rosenblum: Yeah I guess it’s I think it's all well and good for us to say well it's not 2 ideal, but let's continue and then we also really care about mitigation so hopefully something 3 good happens there. To me it’s exactly the opposite which is what we really should care about 4 is mitigation. This is a program that has been shown to work by our neighbor at Stanford. It's 5 something that we've seen examples on individual building levels. So one building that really 6 struck me was this body presided over a proposal where the proposal was fully parked or they 7 offered Option 2 where they get rid of 10 spaces, but offer Caltrain Go Passes for every person 8 working in the building and it was near the Caltrain Cal Ave. station. And that really struck me. 9 They had something like a 10 percent reduction in number of spaces, but because it cost them 10 $60,000 per space that funded Caltrain passes for everyone. And we considered those two 11 options and one was they’re dramatically different. One you fit ten more cars in the other I 12 forget the number of people it was like 110 people work in the building would all get Go Passes. 13 14 And what I realize is we only have so much time and Council only has so much time and we do 15 what we spend time on and so this particular issue has taken up a lot of time and if we ranked 16 issues that in the last two years have taken Council time this would be a top five item talking 17 office cap, multiple sessions that went on for hours. And so my rejoinder to this is it hasn't 18 really done much. Removing it probably won't do much either. I actually like I said I don't 19 actually think this is that important a measure one way or the other, but I know it takes time 20 _______________________ 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. and it takes our focus off of what I think is the most important thing which is I think we right 1 now really ineffective TMA at the moment frankly. And I would love to see us and Council start 2 to spend a lot of time understanding why that is and all the different options we could have for 3 funding and staffing that body and doing it well. 4 5 Now the only objection I have to this again is I think it's a really blunt instrument, but at least if 6 we’re going to use the blunt instrument and let's apply it consistently so if we’re going to have 7 a blunt instrument then at least let's apply it to SRP, let's get rid of these exceptions that don't 8 make sense. But I think that we have much better instruments that we should spend our time 9 on. And so that’s it. I just feel sad that we keep discussing this cap which I don't think really 10 does much one way or the other. 11 12 Chair Alcheck: Is it, do, is there any baring other comment or go ahead. 13 14 Commissioner Monk: So looking first of all I just want to say that with what Commissioner 15 Rosenblum was saying I do agree that if it's about mitigation then the time should be spent on 16 doing the hard work to figure out how to really reduce the traffic and those things that impact 17 our quality of life. Although Director Gitelman said that this was more about the pace of 18 change and that's why it was enacted. So getting some clarity on that and addressing that 19 specific would be really important. And also looking at what our objective is tonight this is a 20 _______________________ 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. study session and as you mentioned you did hear of a variety of a range of opinions and I think 1 that is exactly what we were tasked to do tonight and I think we've successfully met our 2 objective for tonight. So I don't know what the additional conversation needs to continue on so 3 I just want to say that I think we've met our objective and I appreciate all of the interesting 4 commentary. 5 6 Chair Alcheck: Yeah I agree that I think we met our objective. I wonder if there is a way that I 7 can, we can and I'd love to hear if there is support for this empower staff to bring us an 8 agendized item this summer where we delve into TMA. Or if there is a way for us to begin a 9 discussion about effective TMA solutions that address the challenges that may or may not be 10 effectively addressed by this tool. I think that it would be we've talked about this a lot this 11 notion of proposing an item of interest on the Planning Commission that the staff would help 12 facilitate an opportunity to put it on the agenda. I mean I've had that conversation with 13 Assistant Director Lait a few times. And I don't know that I am following the right protocol 14 here, but I guess my question and I'd love if follow Commission Members feel strongly about 15 this I mean there is maybe an interest here in pursuing that. I'd much rather create a 16 subcommittee to talk about TMA than to talk about this ordinance. And is there a way we can 17 accomplish that goal in this calendar year? 18 19 _______________________ 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. Ms. Gitelman: I think we can find a way to do that. I should mention that we have scheduled a 1 discussion with the City Council on April 11th. So coming up in fact the packet goes out 2 tomorrow on parking management strategies Downtown which does offer some potential for 3 funding the TMA in the long term. And what and our recommendation to the Council on the 4 11th is not to take any action just to receive a study that we've been working on and basically 5 instruct us to go and get some additional input and potentially work with the Commission on a 6 further evolution of kind of an implementation strategy if they're interested in pursuing the 7 recommendations of the study. So I'd encourage you to pay attention to the Council meeting 8 on the 11th. It's a Tuesday meeting rather than a Monday meeting, but that may evolve into a 9 Commission agenda item just like the one you're saying you're suggesting and even if it doesn't 10 we can find a way to bring the TMA related issues back to the Commission this year. 11 12 Chair Alcheck: Maybe one of the most constructive thing that we can do at this point would be 13 to encourage staff when they go for that meeting to communicate the passion and interest 14 among Commission Members to explore this and if they're so interested empower us that in 15 our discussion of the cap we had some discussion about delving into this further and if as part 16 of their review they consider that opportunity. Does anybody else have some? Commissioners 17 Summa. 18 19 _______________________ 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. Commissioner Summa: So I think it would be great to discuss a TMA, but unless TMA gets 1 significant funding that’s it's never going to get off the ground. It's a totally different thing than 2 Stanford’s academic success with reduction of trips because they own all the land. So it's very 3 different Downtown and that's why they have a harder time in the Research Park. Even though 4 they own the land there's these long term lease holders and they can't make all the rules. So I 5 appreciate my colleagues’ passion on the topic of the this item, but I think the fact that there 6 has been so much time spent on it is evidence of the passion on both sides around it. So I 7 would suggest it's perfectly appropriate for us to spend time on it because it just elicits a lot of 8 passionate responses. So yeah let's go for trying to improve the TMA, but we've got to figure 9 out who's going to pay for it because it needs professional people running it in my opinion. 10 Thanks. 11 12 Chair Alcheck: Any other comments? Commissioner Gardias. 13 14 Commissioner Gardias: Does the light system work or? 15 16 Chair Alcheck: Not really. 17 18 Commissioner Gardias: I just wanted to make a comment about this what Director Gitelman 19 said. So you said you were wondering how to approach this ordinance with the City Council 20 _______________________ 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. and some other items. My general thought is like this that Comprehensive Plan that we would 1 be approaching very soon gives us this opportunity to comprehensively review all the 2 ordinances like this one. I think that once we're going to approach summer or the 3 Comprehensive Plan discussion we should just have the laundry list of all the ordinances and 4 then see if they can be incorporated into Comprehensive Plan. Or if a Comprehensive Plan 5 pretty much invalidates them or replaces them in some way. 6 7 Ms. Gitelman: Certainly your review of the Comprehensive Plan is going to be an opportunity 8 for you to review the land use policies that involve growth management strategies and other 9 approaches to growth in the City. And once the Comprehensive Plan is adopted we will have to 10 undertake some changes to our zoning ordinances to implement the new policies in the plan. 11 12 Chair Alcheck: Ok I want to make one more suggestion when this does come back to us in 13 whatever form it comes back to us. I think we've talked about this last time I think it would be 14 very instructive if we could review any other American city’s approach to an office cap that 15 potentially involved a beauty or bake sale or whatever you want to call it. I think we talked 16 about this last time and we were does anybody else do this and how are they doing it and how 17 if because we don't really have a lot of data maybe there's a way we can analyze their results. 18 So barring any other comments by Commissioners I think we can sort of complete (interrupted) 19 20 _______________________ 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. Commissioner Lauing: Do we want to agendize this for the next meeting? 1 2 Chair Alcheck: I don't know that it will be ready in time. 3 4 Ms. Gitelman: Yeah. I think we'd like some time to think about it maybe we prepare an 5 ordinance so you have something to react to, something more concrete, but maybe we have to 6 go to Council first. We just have to give it a little thought, but we'll keep working on this. We 7 do know there is some urgency to this because the expiration date of the current ordinance. 8 9 Chair Alcheck: Time is on our side and this is different than the last interim ordinance 10 (interrupted) 11 12 Commissioner Lauing: That’s what I was just going to say. 13 14 Chair Alcheck: We’ve got a few months here. 15 16 Commissioner Lauing: I’m happy to get a little bit more extra time on this one. 17 18 Chair Alcheck: Yeah. 19 20 _______________________ 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. Commissioner Lauing: It would be a great though if we could see the text of the Motion so that 1 we know what the direction is to you guys and effectively to us right now even if we want to 2 push back on that we’d like to know what the status is. Thank you. 3 4 Chair Alcheck: Ok. 5 6 Ms. Gitelman: Well thank you all for the input tonight. It's really helpful. 7 8 Chair Alcheck: Yeah this is really very effective. I'd like to close the study session now and move 9 to the approval of the minutes from the March 8th meaning. 10 11 MOTION: There was no Motion. 12 13 _______________________ 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 1 Commissioner Biographies, Present and Archived Agendas and Reports are available online: 2 http://www.cityofpaloalto.org/gov/boards/ptc/default.asp. The PTC Commission members are: 3 4 Chair Michael Alcheck 5 Vice Chair Asher Waldfogel 6 Commissioner Przemek Gardias 7 Commissioner Ed Lauing 8 Commissioner Susan Monk 9 Commissioner Eric Rosenblum 10 Commissioner Doria Summa 11 12 Get Informed and Be Engaged! 13 View online: http://midpenmedia.org/category/government/city-of-palo-alto or on Channel 26. 14 15 Show up and speak. Public comment is encouraged. Please complete a speaker request card 16 located on the table at the entrance to the Council Chambers and deliver it to the Commission 17 Secretary prior to discussion of the item. 18 19 Write to us. Email the PTC at: Planning.Commission@CityofPaloAlto.org. Letters can be 20 delivered to the Planning & Community Environment Department, 5th floor, City Hall, 250 21 Hamilton Avenue, Palo Alto, CA 94301. Comments received by 2:00 PM two Tuesdays preceding 22 the meeting date will be included in the agenda packet. Comments received afterward through 23 2:00 PM the day of the meeting will be presented to the Commission at the dais. 24 25 Material related to an item on this agenda submitted to the PTC after distribution of the 26 agenda packet is available for public inspection at the address above. 27 Americans with Disability Act (ADA) 28 It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a 29 manner that is readily accessible to all. Persons with disabilities who require materials in an 30 appropriate alternative format or who require auxiliary aids to access City meetings, programs, 31 or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing 32 ada@cityofpaloalto.org. Requests for assistance or accommodations must be submitted at least 33 24 hours in advance of the meeting, program, or service. 34 From:Hamilton Hitchings To:Planning Commission Cc:Hamilton Hitchings Subject:Office Cap Date:Monday, January 29, 2018 9:24:32 PM Dear PTC, Below are my comments for the office cap ordinance you plan to discuss on Wednesday: One of the reasons for the office cap is the need to create more housing and the number impediment to creating multi-unit housing is that office has been more profitable so office has been growing, which has increased jobs and thus the demand for housing without a commensurate increase in housing. Other reasons include the fact that traffic has grown faster than transportation infrastructure and mitigations due to the increase in office space and employee densities. University Ave is only one lane in each direction and is not only partially gridlocked during rush hour but parallel residential streets like Hamilton Ave are now becoming gridlocked during rush hour and residents can no longer get out of their driveways. Lastly Palo Alto is one of the only cities in the Bay Area to park employee vehicles in residential neighborhoods due to the lack of parking provided for employees by employers. The rapid development of office buildings while underparking these new buildings has created this problem. Office Cap SECTION 1: Please add: In addition, during this same time very little new housing has been added to either California Ave or University Ave due to the high demand for office space. As a result the price for housing has increased by X percent. This was reflected in the Palo Alto Citizen’s Survey conducted for the city where availability of affordable housing had the lowest satisfaction of any area in the annual report with just 6% of residents rating it good or excellent in 2016. The city desires to increase multi-unit housing within walking distance of these areas and public transportation hubs. Remove #3 which counts removal of existing Office Annual Limit Land Uses to increase the capacity. The goal is to make more room available for housing. Carrying over housing to the next year waters down the effectiveness of the office cap and creates more scarcity of housing. Strengthen the self mitigating projects to ensure net zero new car trips and that parking for any increase in cars is provided and no in-lieu of fees. I don't think city office space should be exempt if the city is renting out any of its existing office space as that is essentially a loophole. I worry that submitting economic hardship request to the Planning Director is not a sufficient judicial forum to decide if something is unconstitutional. I think to get a waiver the landowner should have go to court. Hamilton Hitchings Palo Alto Resident Planning & Transportation Commission Staff Report (ID # 8862) Report Type: Action Items Meeting Date: 2/14/2018 City of Palo Alto Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2442 Summary Title: Affordable Housing (AH) Combining District Draft Ordinance Title: PUBLIC HEARING: Recommendation to the City Council Regarding the Adoption of an Ordinance Amending Palo Alto Municipal Code (PAMC) Title 18 (Zoning) to Add a New Chapter 18.30(K) (Affordable Housing Combining District) to Promote the Development of 100% Affordable Housing Projects Located Within One-Half Mile of a Major Transit Stop or High-Quality Transit Corridor, by Providing Flexible Development Standards and Modifying the Uses Allowed in the Commercial Districts and Subdistricts. CEQA: This Ordinance is Within the Scope of the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution Nos. 9720 and 9721. For More Information Contact Graham Owen at Graham.Owen@cityofpaloalto.org. From: Hillary Gitelman Recommendation Staff recommends the Planning and Transportation Commission (PTC) take the following action(s): 1. Find the proposed draft ordinance within the scope of the Comprehensive Plan Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council Resolution Nos. 9720 and 9721; and 2. Recommend to the City Council adoption of an ordinance (Attachment A) amending Chapter 18.30 of Title 18 of the Municipal Code to add a new chapter establishing an Affordable Housing (AH) Combining District and related regulations. Report Summary This report transmits a proposed ordinance to add a new chapter to Chapter 18.30 (Combining Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC). This ordinance would City of Palo Alto Planning & Community Environment Department Page 2 create a new Combining District to encourage the construction of 100% affordable housing development projects by providing flexible development standards for such projects when located on commercially-zoned sites within ½ mile of major transit stops and high-quality transit corridors. As proposed, qualifying 100% affordable housing projects located within the Affordable Housing (AH) Combining District could include ground floor retail uses as permitted in the underlying commercial zoning district. The AH Combining District would not apply to any specific sites unless a separate legislative action is taken. Property owners or project applicants would need to apply for a site-specific Zoning Map Amendment, a legislative process subject to PTC review and Council’s approval, before applying the AH Combining District to their property. Background The proposed code amendment originates from two sources. In May 2017 Palo Alto Housing (PAH), a local non-profit housing developer, submitted a prescreening application with the Planning Department for a mixed use development at 3703-3709 El Camino Real incorporating 61 affordable housing units as well as 2,412 square feet of ground floor commercial space. On August 28, 2017 the City Council reviewed the prescreening application at a public hearing, during which several Council members expressed general interest in a new affordable housing combining district in order to enable such a project to move forward. The ordinance is also a component of the Housing Work Plan (Attachment D), and implements “near term” policies and programs of the Comprehensive Plan Update and Housing Element which encourage the construction of affordable housing. The proposed ordinance would create the Affordable Housing (AH) Combining District, but does not amend the Zoning Map to apply the Combining District to any specific site or sites. Instead, the ordinance sets the criteria for evaluating which sites could be eligible for the application of the combining district. A map showing the areas of the City that meet the eligibility criteria is included in Attachment (B) of this report. After adoption of the ordinance, such eligible sites could be rezoned to include the AH Combining District through a Rezoning Map Amendment application. Such an application would return to the Planning and Transportation Commission for a recommendation prior to a decision by the City Council. Discussion The Comprehensive Plan includes a number policies and programs that are directly related to the proposed code amendment (Attachment C). These policies include general support for increasing opportunities for multi-family housing near transit, and incentivizing affordable housing in particular with development standards that are more flexible than base zoning would otherwise allow. Development Standards The draft ordinance (Attachment A) retains several of the development standards that would otherwise apply to a commercially zoned site to retain basic patterns of site planning, such as City of Palo Alto Planning & Community Environment Department Page 3 setbacks, build-to lines, and daylight plane requirements when adjacent to low-density residential districts. The standards that are “relaxed” relative to base commercial zoning standards include lot coverage, usable open space, required parking, and maximum residential density, the last of which would be eliminated in favor of a 50 foot height limit and maximum residential FAR of 2.0:1. Application to Commercial Zones The Comprehensive Plan identifies seven commercial land use designations intended to provide a mixture of commercial uses at various intensities. These land use designations are Neighborhood Commercial, Regional/Community Commercial, Service Commercial, Mixed Use, Commercial Hotel, Research/Office Park, and Light Industrial. With the exception of the Commercial Hotel designation, each of these commercial designations also supports higher density multi-family housing near transit centers and corridors. In practice, sites located within Neighborhood Commercial, Regional/Community Commercial, and Service Commercial designations also tend to have base commercial zoning (CN, CC and CC(2), CS, and CD) and which permit mixed use development. Attachment B provides a map showing these four base zones in pink, with the additional eligibility requirement of transit proximity in purple. Only those sites meeting both eligibility requirements would qualify for a rezoning to apply the AH Combining District. Conformance to Other Combining Districts and Retail Preservation From a use perspective, the largest change enabled by the AH Combining District is that it removes the current prohibition on residential-only projects in the base commercial zone. The AH Combining District is intended to enable both mixed use (residential and ground floor retail) as well as residential-only projects, except as otherwise limited by the standards of other applicable combining districts or retail preservation requirements. In those instances, such as a site located Downtown with Retail Shopping (R Combining District) or Ground Floor (GF Combining District) requirements, the application of the AH Combining District’s development standards would work in tandem with, and not undermine, the ground floor retail requirements. However, for sites not located within the R or GF Combining Districts, an applicant could request a reduction or waiver of the of the City-wide retail preservation requirements. In those instances, such as with CN and CS base-zoned sites along El Camino Real with existing retail, the AH Combining District standards would allow for a reduction or waiver from the square footage that would otherwise be required to be replaced, with the Council’s approval and determination that it would be in the public interest. Additional Considerations The draft ordinance contained in Attachment (A) limits the applicability of the AH Combining District to transit-served commercial bases zones only. However, there are other zones, such as the Research Park (RP) and General Manufacturing (GM) that are transit-served and that align with land use designations where the Comprehensive Plan generally indicates support for increased multi-family housing. The Planning and Transportation Commission is invited to discuss in particular the appropriateness of including these two zones in the list of eligible, “combinable” zones for application of the AH Combining District. City of Palo Alto Planning & Community Environment Department Page 4 Additionally, the Comprehensive Plan does indicate support for limited exceptions to the 50- foot height limit for Housing Element sites within one-quarter mile of fixed rail stations (Housing Element Program H2.1.1). As drafted the AH Combining District would apply to areas near both major transit stations and high-quality transit corridors, but would maintain the 50- foot height limit in all situations. The Planning and Transportation Commission may wish to discuss this issue. 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 consistent with and implements several policies and programs previously reviewed in the Environmental Impact Report (EIR) for the Comprehensive Plan Update, which was certified and adopted on November 13, 2017 by Council Resolution Nos. 9720 and 9721. No additional environmental analysis is warranted at this time. All future development that may be impacted by the proposed Code change will be subject to a project specific CEQA analysis as part of the required planning entitlement review (e.g. Rezoning, Architectural Review, Subdivision, etc.) to determine if there are any environmental impacts. Public Notification, Outreach & Comments The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper and at least ten days in advance. Notice of a public hearing for this ordinance was published in the Palo Alto Weekly on February 2, 2018, which is 12 days in advance of the meeting. Public Comments As of the writing of this report, no project-related, public comments were received. Alternative Actions In addition to the recommended action, the Planning and Transportation Commission may: 1. Recommend approval of the draft ordinance with modifications; 2. Continue the ordinance to a date (un)certain; or 3. Recommend denial of the draft ordinance. Report Author & Contact Information PTC1 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 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 5 Attachments:  Attachment A: AH Combining District Regulations Ordinance (PDF)  Attachment B: Commercial Zoned Parcels Within 1/2 Mile of Transit (PDF)  Attachment C: Comprehensive Plan Policies w/ Analysis (DOCX)  Attachment D: Housing Work Plan (DOCX) Not Yet Adopted 180206 SL/PCE Planning/AH Combining District Page 1 of 5 Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Amending Chapter 18.30 of Title 18 (Zoning) of the Palo Alto Municipal Code to Add a New Chapter 18.30(K), Affordable Housing (AH) Combining District Regulations The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Chapter 18.30 (Combining Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended to add Section 18.30(K) as follows: New Chapter 18.30(K) AFFORDABLE HOUSING (AH) COMBINING DISTRICT REGULATIONS Sections: 18.30(K).010 Specific Purpose 18.30(K).020 Applicability of Regulations 18.30(K).030 Definitions 18.30(K).040 Zoning Map Designation 18.30(K).050 Site Development Review Process 18.30(K).060 Conformance to Other Combining Districts and Retail Preservation 18.30(K).070 Permitted Uses 18.30(K).080 Conditional Uses 18.30(K).090 Development Standards 18.30(K).010 Specific Purpose The affordable housing combining district is intended to promote the development of 100% affordable housing projects located within one-half mile of a major transit stop or high-quality transit corridor, as defined in subdivision (b) of Section 21155 of the Public Resources Code, by providing flexible development standards and modifying the uses allowed in the commercial districts and subdistricts. 18.30(K).020 Applicability of Regulations (a) The affordable housing combining district may be combined with the CD, CN, CS, and CC districts set forth in Chapters 18.16 and 18.18 of this Title, in accord with the Chapter 18.08 and Chapter 18.80. Where so combined, the regulations established by this Chapter shall apply for 100% affordable housing projects in lieu of the uses allowed and development standards and procedures applied in the underlying district. A property owner may elect to use the site consistent with the underlying district, in which case the applicable regulations in Chapter 18.16 and 18.18 for the commercial districts shall apply. Not Yet Adopted 180206 SL/PCE Planning/AH Combining District Page 2 of 5 (b) The affordable housing combining district provides flexibility in development standards that allow for a density increase that would in most cases exceed density bonuses under state law, Government Code Section 65915. Therefore, a project applicant may utilize the affordable housing combining district and the provisions of this Chapter as an alternative to use of the state density bonus law implemented through Chapter 18.15 (Density Bonus) of this Title, but may not utilize both the affordable housing combining district and density bonuses. If an applicant utilizes state density bonus law, the regulations in Chapter 18.16 or 18.18 for the applicable underlying commercial district shall apply. 18.30(K).030 Definitions For purposes of this Chapter, the following definitions shall apply. (a) “100% affordable housing project” means a multiple-family housing project consisting entirely of Affordable Units as defined in Section 16.65.020(f) of this code. 18.30(K).040 Zoning Map Designation The affordable housing combining district shall apply to properties designated on the zoning map by the symbol “AH” within parentheses, following the commercial designation with which it is combined. 18.30(K).050 Site Development Review Process All projects shall be subject to architectural review as provided in Section 18.76.020 and shall not be subject to the requirements of site and design review in Chapter 18.30(G). 18.30(K).060 Conformance to Other Combining Districts and Retail Preservation The following requirements shall apply to projects in the AH affordable housing combining district: (a) Where applicable, the requirements of Chapter 18.30(A) (Retail Shopping (R) Combining District Regulations), Chapter 18.30(B) (Pedestrian Shopping (P) Combining District Regulations), and Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations), and Pedestrian Shopping (P) Combining Districts shall apply. (b) Where applicable, the retail preservation requirements of Section 18.40.180 shall apply except as provided below. i. Waivers and Adjustments Except in the R or GF combining districts, the City Council shall have the authority to reduce or waive the amount of retail or retail like gross floor area required in Section 18.40.180 for any 100% affordable housing project if the City Council determines that it would be in the public interest. Any such reduction or waiver shall not be subject to the waiver and adjustments requirements in Section 18.40.180(c). In the R and GF combining districts, any reduction or waiver in retail or retail like gross floor area shall remain subject to the requirements of Section 18.40.180(c) or the combining district as applicable. 18.30(K).070 Permitted Uses The following uses shall be permitted in the AH affordable housing combining district: (a) 100% affordable housing projects; Not Yet Adopted 180206 SL/PCE Planning/AH Combining District Page 3 of 5 (b) In conjunction with a 100% affordable housing project, any uses permitted in the underlying district, provided the uses are limited to the ground floor. 18.30(K).080 Conditional Uses The following uses may be permitted in the AH affordable housing combining district in conjunction with an 100% affordable housing project, subject to issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approvals), provided that the uses are limited to the ground floor: (a) Business or trade school. (b) Adult day care home. (c) Office less than 5,000 square feet when deed-restricted for use by a not-for-profit organization. (d) All other uses conditionally permitted in the applicable underlying zoning district. 18.30(K).090 Development Standards The following development standards shall apply to projects subject to the AH affordable housing combining district in lieu of the development standards for the underlying zoning district, except where noted below: Table 1 Development Standards AH Combining District(1) Minimum Site Specifications Subject to regulations in: Site Area (ft 2 ) None required Site Width (ft) Site Depth (ft) Minimum Setbacks Setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code may apply Front Yard (ft) Same as underlying district Rear Yard (ft) Same as underlying district Rear Yard abutting residential zoning district (ft) Same as underlying district Interior Side Yard if abutting residential zoning district (ft) Same as underlying district Street Side Yard (ft) Same as underlying district Build-to-Lines Same as underlying district Permitted Setback Encroachments Same as underlying district Maximum Site Coverage None Required Landscape/Open Space Coverage 20%(2) Usable Open Space 25 sq ft per unit for 5 or fewer units (2), 50 sq ft Not Yet Adopted 180206 SL/PCE Planning/AH Combining District Page 4 of 5 Notes: (1) These developments shall be designed and constructed in compliance with the performance criteria outlined in Chapter 18.23, as well as the context-based design criteria outlined in Section 18.13.060 for residential-only projects, Section 18.16.090 for mixed use projects in the CN, CC, and CS districts, and Section 18.18.110 for mixed use projects in the CD district, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and community environment, pursuant to Section 18.76.020. (2) Landscape coverage is the total area of the site covered with landscaping as defined in Chapter 18.04. For the purposes of this Chapter 18.30(K), areas provided for usable open space may be counted towards the landscape site coverage requirement. Landscape and open space areas may be located on or above the ground level, and may include balconies, terraces, and rooftop gardens. SECTION 2. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. per unit for 6 units or more (2) Maximum Height (ft) 50’ Daylight Plane for lot lines abutting one or more residential zoning districts Daylight plane height and slope shall be identical to those of the most restrictive residential zoning district abutting the lot line Maximum Residential Density (net) None Required Maximum Residential Floor Area Ratio (FAR) – Residential Portion of a Project 2.0:1 Maximum Non-Residential FAR 0.4:1 Vehicle Parking 0.5 per unit. The Director may modify this standard based on findings from a parking study that show fewer spaces are needed for the project. The required parking ratio for special needs housing units, as defined in Section 51312 of the Health and Safety Code shall not exceed 0.3 spaces per unit. Adjustments to the required ratios shall be considered per Chapter 18.52 (Parking). For Commercial Uses, See Chapters 18.52 and 18.54 (Parking). TDM Plan A transportation demand management (TDM) plan shall be required pursuant to Section 18.52.050(d) and associated administrative guidelines 18.52.050(d) Not Yet Adopted 180206 SL/PCE Planning/AH Combining District Page 5 of 5 SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. The City Council finds that the environmental impacts of this Ordinance were disclosed, analyzed and evaluated as part of that certain Final Environmental Impact Report for the Comprehensive Plan Update considered and certified by the City Council on November 13, 2017, by Resolution Nos. 9720 and 9721 (“EIR”). The City Council considered the EIR prior to taking action on this Ordinance, in conformance with the California Environmental Quality Act (“CEQA”), together with state and local regulations implementing CEQA. SECTION 5. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ _____________________________ Assistant City Attorney City Manager _____________________________ Director of Planning and Community Environment J u n i p e ro S e r r a B o u l e v a r d a d Road E l C a m i n o R e a l S a n A n t o n i o A v e n u e C har l es ton Roa d O r e g o n Ex p r e s s w a M i d d l e f i e l d R o a d University A v e n u e A l m a S t r e e t F o o t h i l l E x p r e s swayHillvie West Bayshore F a b i a n Sand Hill Road E m barcadero Road CC(2) C S (A S1)C N CC(2)(R) CC(2) CC(2)(R) CC(2)(R) C C(2) (R)(P) C S CS C NCS(H) C S CN CC C C(2)(R) CN CSCS C SCS CN C N (G F/P) CS CC C N CS CS CS C D-C(P) CD-S(P) C C C C CN(L)(GF/P) CD-C (P) C D-C (P) CD-C(P) CD-N (P) CD-N (P) CD-C(GF)(P) C D-C (P) C D-C (P) C C(L) CN C N C S C S(H) C S CS(L) CS(L) CS CS CS CS(H) CS(L) CN CS CD-S(P) CC(2)(P) CS(AD) C S CS C S(AD) CS C S(A D) C D-C(P) CS CS(A D) C S C N (G F/P) C N CD-C(GF)(P) CN (R) C N CS(L)(D) CC(2)(R) CC(2)(R) CS(D) CD-C(P) CD-C(GF)(P) CD-S(GF)(P) CC(2) CC(2) CC(2) This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend ½ mile from Transit Corridor or Major Transit Stop CC, CD, CN, & CS Zone Districts City Jurisdictional Limits 0' 1700' DR A F T Af f o r d a b l e H o u s i n g C o m b i n i n g D i s t r i c t O r d i n a n c e Ar e a M a 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 2016 City of Palo AltoRRivera, 2018-01-18 11:53:19AffordableHousingOverlay Analysis DRAFT (\\cc-maps\Encompass\Admin\Personal\RRivera.mdb) ATTACHMENT C COMPREHENSIVE PLAN TABLE Affordable Housing Combining District Comprehensive Plan Policies and Programs Land Use and Community Design Element Policy L-1.3: Infill development in the urban service area should be compatible with its surroundings and the overall scale and character of the city to ensure a compact, efficient development pattern. The ordinance increases the maximum allowable floor area ratio for 100% affordable housing projects, while retaining other basic site planning development standards such as setbacks, build-to lines, and daylight plane requirements. The ordinance would require that 100% affordable housing projects be reviewed through the City’s Architectural Review process, which will ensure that projects are compatible with its surroundings and the overall scale and character of the City. Policy L-2.5: Support the creation of affordable housing units for middle to lower income level earners, such as City and school district employees, as feasible. The ordinance specifically incentivizes the creation of housing units for lower income level earners by eliminating the maximum density development standard. Policy L-2.7: Support efforts to retain housing that is more affordable in existing neighborhoods, including a range of smaller housing types. The ordinance would allow apply only to commercially zoned sites close to public transit, and would not apply to the residential districts. Accordingly, the ordinance would not displace existing housing units in residential neighborhoods. Program L2.4.7: Explore mechanisms for increasing multi-family housing density near multimodal transit centers. The ordinance would specifically incentivize multi- family housing at higher densities when combined sites are located near transit centers and along high-quality transit corridors. Program L2.4.5: Update the municipal code to include zoning changes that allow a mix of retail and residential uses but no office uses. The intent of these changes would be to encourage a mix of land uses that contributes to the vitality and walkability of commercial centers and transit corridors. The ordinance would allow for mixed use projects that include 100% affordable housing units as well as ground floor retail uses. Office uses would only be permitted as a conditional use when under 5,000 square feet in floor area and deed restricted for use by not-for-profit organizations. Policy L-2.6: Create opportunities for new mixed use development consisting of housing and retail. The ordinance would specifically encourage the construction of mixed use projects incorporating 100% affordable housing and ground floor retail. Policy L-3.1: Ensure that new or remodeled structures are compatible with the neighborhood and adjacent structures. The ordinance would require that 100% affordable housing projects be reviewed through the City’s Architectural Review process, which will ensure that projects are compatible with the neighborhood and adjacent structures. Policy L-4.2: Preserve ground-floor retail, limit the displacement of existing retail from neighborhood centers and explore opportunities to expand retail. Projects using the provisions of the ordinance would be required to adhere to the retail preservation requirements, except when adjusted or waived by the City Council after determining that doing so would be in the public interest. Policy L-4.7: Maintain and enhance the University Avenue/Downtown area as a major commercial center of the City, with a mix of commercial, civic, cultural, recreational and residential uses. Promote quality design that recognizes the regional and historical importance of the area and reinforces its pedestrian character. The ordinance would encourage the construction of 100% affordable housing in the commercial districts, including in the Downtown Commercial (CD) district. Projects utilizing the provisions of the ordinance would be subject to architectural review, which would ensure the pedestrian character of the downtown is respected with future development. Policy L-4.15: Recognize El Camino Real as both a local serving and regional serving corridor, defined by a mix of commercial uses and housing. The ordinance would allow for a mix of 100% affordable housing and ground floor commercial uses in the commercial zones along El Camino Real with a subsequent rezoning application. Policy L-6.7: Where possible, avoid abrupt changes in scale and density between residential and non- residential areas and between residential areas of different densities. To promote compatibility and gradual transitions between land uses, place zoning district boundaries at mid-block locations rather than along streets wherever possible. The ordinance specifically eliminates the maximum unit density standard for 100% affordable projects in the commercial zones. There are areas where commercial districts near transit (qualifying parcels) abut residential districts, and in those cases, the ordinance requires that projects adjacent to residential districts must utilize the same daylight plane requirements that apply to the adjacent residential district. This will establish a building “step-back” for higher floors of qualifying projects. Housing Element Policy H2.1: Identify and implement strategies to increase housing density and diversity, including mixed-use development and a range of unit styles, near community services. Emphasize and encourage the development of affordable and mixed income housing to support the City’s fair share of the regional housing needs and to ensure that the City’s population remains economically diverse. The ordinance will allow for increased housing for lower income households in both residential-only and mixed use building types. By eliminating the density standard, the ordinance will allow future applicants to propose a range of housing unit sizes. This flexibility will also provide the ability for future applicants to contribute to the City’s RHNA requirements. Program H2.1.1: To allow for higher density residential development, consider amending the Zoning Code to permit high-density residential in mixed use or single use projects in commercial areas within one-half a mile of fixed rail stations and to allow limited exceptions to the 50-foot height limit for Housing Element Sites within one- quarter mile of fixed rail stations. The ordinance provides for no maximum density requirement for 100% affordable housing projects located near transit stops and high-quality transit corridors. The Planning and Transportation Commission is invited to discuss allowing exceptions to the 50-foot height limit for qualifying projects, including those on Housing Element Sites near transit stops and corridors. Program H2.1.2: Allow increased residential densities and mixed use development only where adequate urban services and amenities, including roadway capacity, are available. The ordinance would allow 100% affordable housing projects when combined with the commercial zones, all of which are located in areas of the city with adequate urban services. Roadway capacity would be analyzed when future applicants propose to rezone a site to allow for the application of the AH Combining District. Program H2.1.4: Amend the Zoning Code to create zoning incentives that encourage the development of smaller, more affordable housing units, including units for seniors, such as reduced parking requirements for units less than 900 square feet and other flexible development standards. The ordinance specifically incentivizes the creation of housing units for lower income level earners by eliminating the maximum density development standard. Housing for individuals with special needs are further incentivized through the establishment of a maximum parking requirement for units housing these individuals. Program H2.1.6: Consider density bonuses and/or concessions including allowing greater concessions for 100% affordable housing developments. The ordinance relaxes certain development standards for 100% affordable housing developments located in the commercial zones and near transit services. Program H2.1.10: As a part of planning for the future of El Camino Real, explore the identification of pedestrian nodes (i.e. “pearls on a string”) consistent with the South El Camino Design Guidelines, with greater densities in these nodes than in other areas. The ordinance would allow for a mix of 100% affordable housing and ground floor commercial uses in the commercial zones along El Camino Real with a subsequent rezoning application. The ordinance eliminates the density standard in order to incentivize the production of more housing units. Program H2.2.6: On parcels zoned for mixed use, consider allowing exclusively residential use on extremely small parcels through the transfer of zoning requirements between adjacent parcels to create horizontal mixed use arrangements. If determined to be appropriate, adopt an ordinance to implement this program. The ordinance would allow for residential-only projects when combined with a base commercial zone, except as limited by the provisions of other combining districts (GF, R, etc.) or city-wide retail preservation requirements. Attachment D Housing Work Plan Hardcopies of the Housing Work Plan are provided to Commission members. This document available to the public online and/or by visiting the Planning and Community Environmental Department on the 5th floor of City Hall at 250 Hamilton Avenue. Direct Link to Housing Work Plan Webpage: https://www.cityofpaloalto.org/civicax/filebank/documents/63027