HomeMy WebLinkAboutStaff Report 285-06City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
1
FROM:
DATE:
SUBJECT:
CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
July 10, 2006 CMR:285:06
135 HAMILTON AVENUE AND CITY LOT P [06-PLN-00154]: CITY
COUNCIL PRELIMINARY REVIEW "PRESCREENING" OF CONCEPT
PLANS FOR A PLANNED COMMUNITY (PC) REZONING INCLUDING
DEVELOPMENT OF A FOUR-STORY RETAIL/OFFICE BUILDING ON
THE VACANT CORNER LOT AT HAMILTON AVENUE AND HIGH
STREET CURRENTLY ZONED CD-C(GF)(P) [DOWNTOWN
COMMERCIAL WITH GROUND FLOOR/PEDESTRIAN COMBINING
DISTRICTS], AND CONSTRUCTION OF A 146-SPACE, FIVE-STORY
PARKING STRUCTURE ON CITY LOT P, CURRENTLY ZONED PF
[PUBLIC FACILITIES].
REPORT IN BRIEF
The applicant, Charles J. (Chop) Keenan of Keenan Land Company, has requested a
preliminary screening of a planned development concept for the 10,000 square foot vacant lot
located on the northwest comer of Hamilton Avenue and High Street. The proposed development
includes 30,000 square feet of commercial space comprised of retail space on the ground and
second floors, office space on the third and fourth floors, and a 146-space parking structure on
the City Lot ’P’ to provide the required parking for the new building and as a public benefit. The
applicant proposes to change the zoning to Planned Community, described in Attachment B.
Staff has conducted a preliminary analysis of the suitability of the sites to accommodate the
proposed uses, as well as the consistency of the proposal with the policies of the Comprehensive
Plan. This report addresses some key considerations for redevelopment of the site and lists those
policies of the Comprehensive Plan that are aligned with the key considerations. The key
considerations are as follows:
1.City Lot P usage by private development to satisfy parking requirements,
2.Parking structure massing, height, uses and pedestrian amenities,
3.135 Hamilton Floor Area Ratio (FAR), and
4.Downtown urban design and street-level vibrancy.
CMR: 285:06 Page 1 of 8
RECOMMENDATION
Staff requests that the City Council review and comment on the proposed project concept at 135
Hamilton Avenue and provide direction to staff on a policy framework for considering the
appropriate land uses for the site. No formal action may be taken at a preliminary review;
comments made at a preliminary review study session are not binding on the City or the
applicant.
BACKGROUND
On June 19, 2006, the Council agreed to conduct the preliminary review "prescreening".
Pursuant to PAMC Section 18.97.040(a), one or more noticed public study sessions can be held
to accomplish the purposes of a preliminary review. As provided for by Chapter 18.97 of the
Zoning Ordinance, the purposes of a preliminary review are:
a) To maximize opportunities for meaningful public discussion of development projects, at the
earliest feasible time, for the guidance of the public, project proponents, and City decision
makers.
b)To focus public and environmental review of development projects on the issues of greatest
significance to the community, including, but not limited to, planning concerns,
neighborhood compatibility, Comprehensive Plan consistency, economics, social costs and
benefits, fiscal costs and benefits, technological factors, and legal issues. These procedures
are not intended to permit or foreclose debate on the merits of approval or disapproval of any
given development project.
c) To provide members of the public with the opportunity to obtain early information about
development projects in which they may have an interest.
d) To provide project proponents with the opportunity to obtain early, non-binding preliminary
comments on development projects to encourage sound and efficient private decisions about
how to proceed.
e) To encourage early communication between elected and appointed public officials and staff
with respect to the implementation of City policies, standards, and regulations on particular
development projects.
f) To facilitate orderly and consistent implementation of the City’s Comprehensive Plan and
development regulations.
Site Information
The site includes the vacant lot on the corner of Hamilton Avenue and High Street and the City’s
parking facility, Lot P, located across from Lot R (the High Street Garage) between High Street
and Lane 5 East. The vacant parcel, at 10,000 square feet, is known as the Fasani lot, currently
zoned CD-C (GF)(P), which is the Commercial Downtown district with "C" subdistrict and
Ground Floor Pedestrian combining districts. Surrounding land uses include one-story retail
buildings to the west (529 and 535 Alma Street) and north (542 High Street), a four-story retail
and office building across High Street (575 High Street), one-story office buildings across
Hamilton Avenue, and a one-story building on the diagonal corner (150 -158 Hamilton)
containing both retail and personal services. The property has most recently been used as a
construction staging area. Lot P is an at-grade parking facility zoned PF, Public Facilities, on
City-owned land with two hour free "Purple Zone" parking monitored by City staff.
CMR: 285:06 Page 2 of 8
Prqiect Description
The applicant’s proposal is set forth in Attachment B. The applicant proposes a 30,000
square foot, four-story building to be developed as a planned community on the vacant lot at 135
Hamilton Avenue. The building would be comprised of retail space on the ground floor and
possibly the second floor, and office space on the third and fourth floors. The building would not
exceed the height limit of 50 feet. The building is intended to be a retail anchor point for High
and Hamilton with one or more major retail tenants and high-end offices. The applicant
proposes to change the zoning of the vacant lot to Planned Community. The Planned Community
process begins with preliminary review of the concept plans by the Planning and Transportation
Commission (P&TC), followed by environmental review pursu.ant to CEQA and Architectural
Review Board review of formal project plans, followed by P&TC review of the ordinance,
formal project plans and development schedule, prior to Council review and legislative action.
The applicant’s proposal includes the development of a five-story, 146-space parking structure
on City Parking Facility Lot P. City parking facility Lot P currently provides 52 surface parking
spaces. The applicant proposes to provide 52 parking spaces to replace the existing spaces, plus
94 additional spaces. The additional spaces would include 60 spaces on the top two floors
dedicated for the tenants of the proposed building at 135 Hamilton Avenue between 8 AM and 5
PM Monday through Friday via a parking easement. The remainder of the hours in the week,
those 60 spaces would be dedicated for public parking as a public benefit. The remaining 34
spaces to be constructed would be available continually to the public.
The applicant has stated an alternate proposal would be an application that follows existing
zoning using Transferable Development Rights and parking benefits to develop a building of
between 10,000 and 15,000 square feet.
The applicant has provided concept plans and a letter (Attachment A) for Council review.
DISCUSSION
The following is a list of Comprehensive Plan policies and programs to consider with regard to
the proposed project concept.
Hamilton Avenue District
Comprehensive Plan Program L-19 states, "support implementation of the Downtown Urban
Design Guide," which defines the Hamilton Avenue District goals as: (1) Promote Hamilton
Avenue as an active mixed use district which comfortably accommodates larger scale
commercial office, civic and institutional buildings, and (2) Maintain Hamilton Avenue as a
pleasing, tree-lined pedestrian environment with complementary outdoor amenities to offset the
urban intensity which naturally results from the provision of transit service and convenient
surface parking," with a bulleted statement "create vibrancy and activity on side streets."
Gateways
The applicant’s submittal describes a new western gateway to the Downtown that is evolving
along Alma Street at both University and Hamilton Avenues, and notes this site could be a part
of a successful gateway experience. Comprehensive Plan Policy L-71 states, "Strengthen the
CMR: 285:06 Page 3 of 8
identity of important community gateways, including ... the entrances to commercial districts."
The Downtown Urban Design Guide also suggests creation of a sense of entry at Alma Street
and Hamilton Avenue with landscaping, building comer setbacks, special lighting, public art and
other design amenities.
Parking lots
The Downtown Urban Design Guide states "provide pedestrian links from Hamilton Avenue to
University Avenue in conjunction with development of the alleys and parking lots."
Comprehensive Plan Policy L-75 states, "Minimize the negative physical impacts of parking lots.
Locate parking behind buildings or underground wherever possible," and "consider including
public art in parking lots and parking structures."
Comprehensive Plan Policy L-77 states, "Encourage alternatives to surface parking lots to
minimize the amount of land that must be devoted to parking, provided that economic and traffic
safety goals can still be achieved." Comprehensive Plan Program L-76 states, "Evaluate parking
requirements and actual parking needs for specific uses. Develop design criteria based on a
standard somewhere between average and peak conditions."
Comprehensive Plan Program L-78 states, "Encourage the use of PC zoning for parking
structures Downtown..." and Policy L-78 states, "encourage development that creatively
integrates parking into the project by providing for shared use of parking area."
Parkin~ Structure and Lane 5 East
The purpose of this alley is not automobile circulation but rather pedestrian circulation, garbage
collection, hand-truck deliveries, etc, and the City would want to retain it as such. The parking
structure appears to accomplish this. There are City street trees along High and parking lot trees
that would likely be removed for a parking structure.
Floor Area
The Comprehensive Plan land use designation for the project site is Re~onal/Community
Commercial, which states, "Larger shopping centers and districts that have wider variety goods
and services than the neighborhood shopping areas. They rely on larger trade areas and include
such uses as department stores, bookstores, furniture stores, toy stores, apparel shops,
restaurants, theaters, and non-retail selMces such as offices and banks. Non-residential floor area
ratios (FAR) range from .35 to 2." There is precedent in the Downtown for non-residential FAR
to exceed the 2.0 to 1 FAR under the current Comprehensive Plan. In these cases, the additional
floor area above 2.0 to 1 FAR has been achieved using Transfer of Development Rights, which is
"not recognized" as floor area with respect to the Comprehensive Plan FAR limit. Another
approach may be to consider the two sites jointly for FAR purposes, which would result in an
overall FAR of less than 2.0 to 1.
The Planned Community Rezone is requested because the maximum floor area ratio in the CD-C
District is 1.0 to 1 (10,000 square feet for this parcel) for non-residential uses. Also, the
maximum non-residential project size allowed is 25,000 square feet of floor area (PAMC
CMR: 285:06 Page 4 of 8
18.49.040(a)), regardless of parcel size. Floor area may be increased with seismic or historic
bonus area, notto exceed a FAR of 3.0 to 1.
RESOURCE IMPACT
Building at 135 Hamilton Avenue
The proposed project would generate additional General Fund revenues in the form of sales,
property and utility user taxes. The four story building would have one floor of retail with
the possibility of a second floor for retail. The remaining stories would consist of office and
other space. Based on the estimated value of the building, anticipated utility usage for a
30,000 square foot structure, and estimated retail sales comparable to "high end" outlets at
the Stanford Shopping Center, the following are ranges of projected new annual revenue
streams:
City Revenues
One Floor of Retail Range Low Range High
Sales Tax $30,000 $45,000
Property Tax $10,000 $12,000
Utility Users Tax $ 2,000 $ 3,000
Totals $42,000 $60,000
Two Floors of Retail
Sales Tax $59,000 $88,000
Property Tax $10,000 $12,000
Utility Users Tax $ 2,000 $ 4,000
Totals $71,000 $104,000
Based on the best available information to date and depending on the configuration of retail
space in the building, General Fund revenues could increase by $42,000 to $104,000 annually as
a result of this project. According to the applicant, additional sales tax revenues could flow from
this project as other buildings are upgraded along Alma and High Street. Strictly in terms of
enhancing the City’s sales tax and revenue base, the project appears to fulfill recent Mayoral
Business Task Force goals.
Should a 10,000 square foot building dedicated to retail be developed, staff roughly estimates
that General Fund revenues would increase in the range of $29,000 to $35,000, annually. It is
unclear at this time what type of retail wood occupy a smaller building, so a lower sales per
square foot estimate (compared to the 30,000 proposal) was used to calculate sales tax revenues.
City Costs
The City would incur additional street and sidewalk maintenance costs over time as a result of
additional traffic. Given the long life of streets and sidewalks, there is not a significant cost
impact from additional trips, although such trips could result in additional congestion. Costs
CMR: 285:06 Page 5 of 8
associated with issuing permits, performing planning review, and building inspections would be
recovered through permit processing fees.
Parking Structure on Lot P
This project includes the construction of a new parking structure on lot P by the applicant at no
financial cost to the City. Parking space and policy implications associated with a new garage on
Lot P are explored in the next section of this report. A new garage with 146 spaces is proposed
(52 spaces currently available in Lot P); however, the proposed 30,000 square foot commercial
development would result in a shortfall of 26 required spaces (146 - 52 = 94; 94 - 120 = -26).
Based on the current Downtown Parking In-Lieu fee, the 26 spaces are valued at $1.45 million.
After office hours, all 94 additional public parking spaces would become available, and this
number of spaces is valued at $5.25 million. This information is important as Council weighs
the benefits and disadvantages of the garage proposal.
POLICY IMPLICATIONS
The project is in line with several Mayoral Committees that have and are still seeking to preserve
and enhance the City’s business/retail base for sales tax revenues as noted in the above section of
this report.
The following key considerations are outlined for Council input and direction:
1.City Lot P usage by private development to satisfy parking requirements
a.Should the City a!low private development to provide its parking on public land zoned Public
Facilities?
b.Do the public benefits of the added parking and retail justify a 20% reduction in required
parking for the project without in-lieu parking contributions for the 26 additional required
spaces?
2.Parking structure massing, height, uses and pedestrian amenities
a.Should the five-story parking structure be lowered or partially below grade to minimize its
mass?
b.Should the structure include pedestrian amenities at the alley and/or street and/or storefront at
ground floor level?
c. Should more than 60 reserved spaces plus 34 additional new spaces be provided to meet the
parking requirement for the new building or should payment of parking in-lieu fees be
required for the remaining 26 spaces?
d. Would employees of the retail use some of the 60 designated private use parking spaces on
upper floors on weekends?
3. Floor Area Ratio (FAR)
a. Do the applicant’s proposed public benefits and downtown revitalization proposal warrant a
proposed 3.0 to 1 FAR for commercial use?
b. Should Transfer of Development Rights be required to achieve compliance with the
Comprehensive Plan 2.0 to 1 FAR?
CMR: 285:06 Page 6 of 8
c.Could the two sites be considered together for FAR purposes, with a resultant FAR less than
2.0 to 1?
4. Downtown urban design and street-level vibrancy
a. Does the proposal conform to the Downtown Urban Design Guide?
b. What type of amenities are desired along High Street and Hamilton Avenue frontages to
achieve street level vibrancy and activity?
ENVIRONMENTAL REVIEW
No environmental review is required for this Preliminary Review application, as it is not
considered a project under the California Environmental Quality Act (CEQA). When a project
application is filed, staff will develop the Initial Study in compliance with CEQA guidelines.
The outcome of this Initial Study will determine the type of environmental document staff will
produce to evaluate this proposal in regards to CEQA guidelines.
Potential environmental impacts to be analyzed include impacts upon traffic, housing, public
facilities and services. As mitigation towards these impacts, the project would, at a minimum, be
subject to requisite Development Impact Fees intended to offset capital costs for the increased
demand.
ATTACHMENTS
Attaclxrnent A: Applicant’s Project Description
Attachment B: Concept plans (Councilmembers only)
PREPARED BY:
Manager of Current Planning
DEPARTMENT HEAD REVIEW:
Director of Planning and Environment
CITY MANAGER APPROVAL:
CMR: 285:06 Page 7 of 8
COURTESY COPIES:
Charles J. (Chop) Keenan, Keenan Land Company
Jim Baer
CMR: 285:06 Page 8 of 8
Attachment
June 5, 2006
Members of the Palo Alto City Cotmcil
Re: Pre-Screening Request for PC Zone for Hamilton/High
Dear Council Members:
The pro’pose of this letter is to request that you schedule a Preliminary Hearing for my
proposed project at Hamilton/High that will require a PC Zone. With early Cotmcil
direction, I will be able to choose between (i) a more complex development as a PC Zone
that provides substantial public benefits, or (ii) a simpler development trader current
zoning.
THE PROPOSED PROJECT AND PC ZONE
Hamilton/High is the tmdeveloped lot at the northwest comer of High and Hamilton
known as the Fasani lot. The Fasani lot is 10,000 square feet and is currently zoned
CD(C)-(P)(GF).
The proposed project requiring a PC Zone is a 4 story, four-sided architectural jewel box
desig-ned by Brayton & Hughes of San Francisco. This building is intended to energize
the retail vitality of Downtown and, more specifically, the High/Hamilton corridor at
the west end of the Downtown where buildings and tenants have been unsuccessful. As
we have experienced in the Downtown over the last twenty years, high quality comer
projects stimulate investment and upgrading of nearby buildings and greatly improves
the quality of tenants.
The b~,~lding would be 30,000 gross square feet -- a 3:1 F.A.R. and is within t_he
maximttm area allowed in the CD-C Zone. The buflding would be 4-stories and would
remain within the height limit of 50-feet. Of the 30,000 gross square feet, there will be
24,640 square feet of business rentable space after deducting stairways and elevator core.
Building Plans and Elevations are attached.
The ground floor and possibly the second floor would be retail with the remainder of
the building used as high-end offices. We are confident that we will be able to attract
one or more major retail tenants.
The Public Benefit would include construction, at not cost to the City, of a new 146 space
parking structure on Lot P (between University- and Hamilton and on the east side of
High). The parking structure would be dedicated to the Downtown Parking Assessment
District. Keenan would be granted a parking easement for the top two floors of 60 spaces
between the hours of 8:00 am to 5:00 pm Monday-Friday only. Evenings and weekends
700 EMERSON STREET ¯PALO ALTO~ CALIFORNIA 94301 ¯TELEPHONE {650} 326-2244 "TELECOPY {6501 326-2920
the entire parking sh~ick~re would be open to ~he public. Parking demand on weekends
and evenings has become great at h~s west part of the Downtown because of the success
of nearby retail and dining operators. 86 parking spaces are available exclusively for
the City. Using the City’s in lieu parking fee the cost for the 146 parking spaces would
exceed $50 million and would provide overwhelming public benefit. A Parking Plan for
Lot P is attached
This project presents the opportunity to create a retail anchor point for High and
Hamilton. The urban design and tenant success will be similar to the success we started
15 years ago with the Emerson Street corridor. Whole Foods, Peet’s Coffee, Gordon
Beirsch, and Keenan Land offices were the early ing-redients that sthnulated other
property owners to upgrade their buildings and to attract quality retailers in the SOFA 2
Area. There have been similar successes in the Downtown where several blocks have
been revitalized following development of a few spectacular new btHldings.
A new western gateway to the Downtown is evolving: the Vanderworts have nearly
completed upg-rading their historic building at 524 Alma; renovation of my historic
building at 529 Alma is tmderway; last year 124 University was renovated, attracting
ETrade in what had been a difficult block; Joe Bellomo is building a new signature
building on the "Circle" at University and Alma; and Parking Lot R has changed the
dynamics of this part of town. A spectacular btulding at 155 Hamilton with 146 parking
spaces will change the arc of success for this part of the Downtown.
As you may -know, I have made it a principle in Palo Alto to stay within existing zoning
because of the challenges of obtaining complex land ttse approvals. Nevertheless, if the
Cotmcil strongly encottrages Staff and me to proceed with this PC Zone Project, I will
immediately undertake ~ effort.
ALTERNATIVE PROJECT UNDER EXISTING ZONING
If the Council does not strongly encourage Staff and me to proceed with the PC Zone
Project, we will prepare an application under existing zoning. With Transferable
Development Rights and parking benefits trader the Zoning Code for undeveloped
parcels, we should be able to develop a building of between 10,000 and 15,000 square
feet without needing to provide any parking. Under existing zoning we would also
develop a "jewel box" building that wilt revitalize this part of town - but without the
benefit of the 146 parking spaces.
Thanks for your early observations on these alternatives.
Sincerely,
Charles J. (Chop) Keenan,
700 EMERSON STREET ¯PALO ALTO~ CALIFORNIA 94301 -TELEPHONE (650) 326-2244 ¯TELECOPY 16501 326-2920