HomeMy WebLinkAboutStaff Report 312-06City of Palo Alto
Manager’s Repor
TO:HONORABLE CITY COUNCIL
FROM:
DATE:
SUBJECT:
CITY MANAGER
AUGUST 7, 2006
POTENTIAL STRATEGY
DEPARTMENTS: PLANNING AND
CITY ATTORNEY
CMR: 312:06
REGARDING RESTRICTIONS ON
CONVERSION OF COMMERCIAL USES TO RESIDENTIAL USE
RECOMMENDATION
Staff recommends that City Council consider the options outlined below and in the
attached memorandum from the City Attorney (Attachment A) and provide direction
regarding ordinance amendments or other strategies to pursue.
BACKGROUND
On June 5, 2006, the City Council discussed the work plan for the Comprehensive Plan
Amendment, tentatively scheduled to be completed within a two to three year timeframe.
One of the key components of the Amendment is to evaluate the environmental and fiscal
effects of the conversion of nonresidential land to residential Use and the subsequent loss
of neighborhood serving retail uses. The Council was concerned that between now and
completion of the Amendment, key properties currently in commercial use may redevelop
to housing. Several recent housing projects (DR Horton (Hyatt), Trumark, Classic
Communities; BUILD and CJL) have been approved on sites previously planned and
zoned for commercial or industrial development. In order to ensure that these conversions
do not adversely affect Palo Alto’s retail base, the Council requested that staff identify
interim or near-term strategies for retention of neighborhood serving uses. The Council
specifically directed staff to direct staff to return within 60 days to provide
recommendations on measures that might be adopted to retain commercial uses that are
not located on sites identified in the Housing Sites Inventory in the Housing Element of
the Comprehensive Plan (Attachment B).
DISCUSSION
This CMR has been developed jointly by the City Attorney and the Director of Planning
and Community Environment. An attached memorandum from the City Attorney
addresses legal constraints and opportunities in greater specificity.
CMR: 312:06 Page 1 of 5
Objectives
Based on Council’s direction, staff suggests the following set of objectives to develop and
evaluate options for limiting conversion of either existing or planned commercial uses:
Preserve revenue-generating commercial uses.
Provide local services for residential areas.
Assure compliance with the Housing Element (particularly the Housing Sites
Inventory) and State housing law.
Ensure consistency with Comprehensive Plan policies to provide for a mix of uses
in areas near transit and commercial centers.
Retaining Commercial Uses in Residential (Multi-Family) Zones
Staff has identified six residential sites in the City with existing commercial uses that are
designated and zoned for multi-family use. These sites are listed in Attachment C.
Inquiries to the Planning Department from the development community regarding the
potential redevelopment of two of the sites, the Mayflower Motel and the Palo Alto
Bowling Alley, indicate there is redevelopment pressure on these properties. The cmTent
uses on all six properties are considered non-conforming uses and would not be allowed to
continue when the sites are redeveloped. Staff has evaluated a variety of options to ensure
retention of nonresidential use on the sites, including zoning ordinance and/or rezoning
changes, a moratorium on redevelopment of these sites, and adoption of a growth control
ordinance. The City Attorney’s memorandum outlines several constraints that preclude
most of these options, and focuses on one realistic near-term alternative, rezoning the sites
to commercial zoning (CN, CS, CC, etc.), prohibiting "stand alone" housing, but allowing
for mixed use (residential/nonresidential) development. This option would allow
residential development in conjunction with retail or other commercial uses on the ground
floor street frontage. This approach would be consistent with Comprehensive Plan
designations and Housing Element policies. Housing would still be allowed but densities
and development would be restricted to enable the provision of urban services and
amenities. The rezoning would not apply to any site that is listed on the Housing
Opportunity Site Inventory of the City’s Housing Element.
Other approaches are either inconsistent with housing law and/or with the Comprehensive
Plan, may entail revision of the Housing Element through the State’s Department of
Housing and Community Development (HCD), and!or would require extensive CEQA
review. The City could also consider removing amortization obstacles for existing
commercial uses in the Zoning Ordinance. This would not, however, preclude conversion
to residential if the property owner desired.
Limiting Residential Development in Commercial Zones
Chapters 18.41 (Neighborhood Commercial), 18.43 (Community Commercial), 18.45
(Service Commercial), and 18.49 (Commercial Downtown) of the City’s Zoning
Ordinance specify allowable (permitted and conditional) uses in the commercial districts
(see Attachment D). All of the City’s commercial districts currently allow single-family
uses, two-family uses, and multiple-family uses as permitted uses, except that all
residential use is prohibited in the Charleston Shopping Center and Midtown Shopping
CMR: 312:06 Page 2 of 5
District. The zones similarly all allow mixed residential/nonresidential use on any site
(again excluding the Charleston and Midtown areas), subject to FAR limitations.
Virtually all of the commercial districts have requirements that restrict the ground floor to
use for retail, personal services, eating or drinking establishments, or other commercial
use, other than offices. Offices are only allowed in limited circumstances, generally
where the ground floor area has been in office or housing use or vacant since March 19,
2001.
To address concerns about residential uses that would replace or preclude commercial use
in these districts, staff and the City Attorney’s office have again evaluated several
approaches to limit conversions of existing nonresidential uses to residential use. These
approaches included 1) prohibition of housing in these zones, 2) requiring conditional use
permits for housing, 3) allowing only mixed nonresidential-residential uses, and 4) a
moratorium on new housing. The City Attorney’s memorandum outlines several
constraints that preclude most of these options, and focuses on two possible near term
alternatives:
Prohibiting .residential uses (except for designated Housing Inventory Sites) in all
commercial zones: This option would preclude all residential uses in the
commercial districts, including mixed use. This approach would, however, require
revisions to the Comprehensive Plan to be consistent with land use designations
(that allow residential uses in commercial zones) and with multiple policies that
emphasize housing over commercial uses.
Allowing only mixed residential/nonresidential uses (except for designated
Housing Inventory Sites) with non-residential uses on the ground floor and
residential on the upper floor(s) or behind street frontage commercial: This option
would preclude "stand-alone" housing projects, but would continue to allow for
residential use as part of a mixed use project, so long as retail or other commercial
uses occupy the ground floor street frontage (or the entire ground floor). Entrance,
lobby or reception areas for the upper floor uses, including residential, would also
be allowed on the ground floor, consistent with the Ground Floor (GF) regulations
of the Zoning Ordinance. The City Attorney has indicated that this approach is
acceptable in that it allows for continued residential use in commercial zones
without further discretionary permits.
Both options would continue to allow residential uses for sites designated on the Housing
Sites Inventory, consistent with the Housing Element. The City anticipates amending the
Housing Sites Inventory list with HCD prior to the end of this year to reflect residential
approvals on sites that are not currently on the list (e.g., Trmnark, Classic Communities).
If the update indicates that the City will then comply with its housing obligations for all
income categories, the City may at that time also consider an option requiring a
conditional use permit for housing in commercial zones.
CMR: 312:06 Page 3 of 5
RESOURCE IMPACT
Potential strategies for restricting conversion of commercial sites to residential use are
intended to preserve and/or enhance revenue sources for the City. Some additional staff
time will be required to prepare and process recommended ordinance revisions, but much
of this time may be reduced by incorporating the changes into the Zoning Ordinance
Update (ZOU) revisions to the commercial zoning districts.
POLICY IMPLICATIONS
Potential strategies for restricting conversion of commercial sites to residential use are
intended to further Council goals to preserve and/or enhance revenue generating land uses.
The various approaches may, however, also require modifications to the Housing Element
or other policies and programs in the Comprehensive Plan.
ENVIRONMENTAL REVIEW
Any proposed ordinance revisions or other commercial retention strategies are likely to be
subject to the environmental review provisions of the California Environmental Quality
Act (CEQA). The type of environmental review will depend on the extent of deviation
from current City codes and Comprehensive Plan designations, especially those included
in the Housing Element. The timeframe for environmental review typically ranges from 30
days (exempt project) to 60-90 days (Negative Declaration) to one year or longer
(Environmental Impact Report).
ATTACHMENTS
Attachment A:Memorandum from City Attorney
Attachment B:Housing Element Housing Inventory Sites
Attachment C:Existing Commercial Uses in Residential Zones
Attachment D:Commercial Zone Districts Tables of Allowable Uses (Re-Formatted)
COURTESY COPIES
Planning and Transportation Commission
Architectural Review Board
California Avenue Area Development Association
Chamber of Commerce
PREPARED BY:
CURTIS WILLIAMS
Chief Planning and Transportation Official
DEPARTMENT HEAD REVIEW: ~ ~0~’~
.~ STEVE EMSLIE
Director of Planning and Community Environment
DEPARTMENT HEAD REVIEW:G A~fkUM~’~
CityiA/tt0rney
CMR: 312:06 Page 4 of 5
CITY MANAGER APPROVAL:
HARRISON
Assistant City Manager
CMR: 312:06 Page 5 of 5
ATTACHMENT A
FROM CITY ATTORNEY
Council Meeting Date: August 7, 2006
Revised: July 31, 2006
##
THE HONORABLE CITY COUNCIL
Palo Alto, California
RE: Commercial-Residential Property Conversion
.Dear Members of the Council:
The City Council has asked for a report on possible
short-term strategies to limit the conversion of Commercial or
IndustrialI uses to.housing.
This memorandum first discusses potential solutions to
limit conversion. The solutions are followed by a review of a
series of alternative options that have outstanding legal or
practical problems. Finally, the memo provides background on
related legal concerns.
For purposes of simplifying the analysis and the
proposed solutions, the issue is divided into two fact patterns:
A. The first fact pattern is Commercial zoned property where
the potential for a residential project remains. Palo Alto’s
zoning permits housing in all zones, so these .properties are a
continuing concern.
B. The second fact pattern is Residential zoned property, not
on the Housing Inventory, where a commercial structure presently
exists. These sites are ripe for residential redevelopment.
This memorandum will address potential solutions for both
fact patterns. The two proposed solutions come closest to
IAII references in the memorandum that refer to Commercial uses or zones
include Industrial uses or zones. For purposes of simplicity only the word
"Commercial" will be used to refer to both zones or uses.
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RE: Commercial-Residential Property Conversion
addressing the issue presented while still being consistent with
State laws on housing.
QUESTIONS PRESENTED
In light of new legislative restrictions on a city’s
ability to limit housing, what are the legal options available
to Palo Alto to curb residential conversion of Commercial
properties to housing?
A. What
property?
is the proposed solution for Commercial zoned
B. What is the proposed solution .for Residential zoned
property that is currently used for commercial use, which may be
facing redevelopment as a new housing project?
C. Due to the possibility of the Anderson Initiative’s
passage, should the City Council pass any required zoning
changes before November 7, 2006?
SHORT ANSWERS
A. Residential Uses in Commercial Zones
The City Council may be able to pursue an ordinance
limiting residential development on sites not already listed in
the Housing Inventory, by removing housing as a potential use.
This type of ordinance can only be considered if Palo Alto can
meet State requirements for housing and ultimately incorporate
those plans into an updated and approved Housing Element of its
Comprehensive Plan, and successfully complete California
Environmental Quality Act ("CEQA") review.
Alternatively, the City Council could pass an
ordinance requiring ground floor retail in a mixed use project
with some housing included. This type of ordinance would be a
less drastic solution to the issue.
B. Conversion of Commercial Uses to Residential
For the six parcels the City has identified which
currently have Commercial uses and are zoned Residential, the
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RE: Commercial-Residential Property Conversion
City Council could rezone the properties to Commercial. This
rezoning will require CEQA review and changes to the
Comprehensive Plan.
C. Anderson Initiative’s Effect Upon the Timing of any
Zone Change
Yes, the City Council should pass any potential zone
change before November 7, 2006. Although the City has strong
arguments that these approaches are not downzoning and are not
implicated by the initiative, the most prudent course would be
to pass any zone changes before November 7, 2006 in order to
avoid any effect from the Anderson Initiative.
I.Proposed Solutions
A. Residential Uses in Commercial Zones
The following options are available to address
potential residential use of sites now zoned for commercial
uses:
Option AI. Council-passed ordinance modifying zoning to
eliminate housing in Commercial zones
The Council could pass an ordinance to eliminate
housing in commercial zones, excluding those commercial sites
already listed on the Housing Inventory. We are unaware of any
statutory authority or case law suggesting that this is not a
possibility. While this possibility provides no guaranty of
legality, this solution appears to be consistent with Land Use
case and statutory law in effect today.
It is worth noting that the ordinance would not be
characterized as a growth control ordinance, as it would merely
convert and shift where residential development is permitted.
However, this ordinance would still need to meet the CEQA
requirements, which are described in more detail in Section III.
Because the scope of the ordinance would not "deviate" from the
current, certified Housing Element, it would not be necessary to
resubmit our Housing Element to HCD. After the final form of an
ordinance is prepared we can review it to determine if HCD
review is required.
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RE: Commercial-Residential Property Conversion
The City must also update the Comprehensive Plan and
incorporate these ordinance changes to achieve consistency.
Although charter cities enjoy exemption from the requirement
that ordinances be consistent with the General Plan, under
section 65300.5 of the California Government Code and section
19.04.060of the Palo Alto Municipal Code, Palo Alto is
nonetheless required to maintain consistency within its
Comprehensive Plan and with respect to any rezoning matters. The
Comprehensive Plan was apparently drafted at a time where
residential growth was favored over commercial growth.
Option A2. Council-passed ordinance modifying zoning to
eliminate "stand-alone" housing in Commercial zones
(excluding those sites that are listed within the Housing
Inventory) but to continue to allow "mixed-use" housing
with commercial on the ground floor in those zones
The Council could pass an ordinance that eliminates
entirely residential uses on sites in Commercial zones
(excluding those sites listed on the Housing Inventory), but
that allows mixed-use housing (commercial on the ground floor
with residential above) in those zones.This option would
continue to allow housing in those zones,as outlined in the
Housing Element, but provide for commercial uses as well. This
relatively minor change from current allowed uses is more likely
to meet housing law and CEQA requirements than the blanket
prohibition of residential uses outlined in option AI. Updating
of the Comprehensive Plan would not be necessary, as the various
land use designations would continue to permit housing.
B. Conversion of Commercial Uses to Residential in Multi-
Family Residential Zones
The following option addresses the potential
redevelopment of existing commercial uses to residential use on
sites that are now zoned for multi-family use° This option
excludes sites designated on the City’s Housing Inventory. Six
parcels in the city currently meet these criteria.
Option BI. Council-passed
sites to Commercial use
ordinance rezoning these
The Council could pass an ordinance for each of the
six eligible parcels, rezoning the site to Commercial and then
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RE: Commercial-Residential Property Conversion
prohibiting or restricting the potential for residential use as
outlined in Option A1 or A2. This approach would require
environmental review and Comprehensive Plan changes. The City
may need to inform the State of these changes but would not need
to modify the current Housing Element so long as no Housing
Inventory sites are affected.
II.Alternative Solutions
A. Moratorium
One potential alternative solution is for the City
Council to pass a Moratorium on future housing development. This
moratorium would be limited to those sites which are not
currently in the Housing Inventory. However, it is very unlikely
that the City could arrive at findings that would allow the
imposition of a moratorium. Further, it is unlikely that a court
would uphold a lengthy moratorium based upon present
circumstances.
Authority for a city to impose moratoria stems from
police power to protect the health, safety, or welfare of the
public. California Government Code section 65858 permits
adoption of interim ordinances as urgency measures prohibiting
any uses that may be in conflict with a contemplated .general
plan or zoning plan, where the city intends to study the plan
within a reasonable time. Moratoria cannot be used to prohibit
the processing of a development application, and cannot be used
to halt a use already in existence.2 The temporary character of
moratoria is also critical, as courts tend to strike down
moratoria which attempt to enact permanent rather than interim
ordinances that are in conflict .with the General Plan or zoning
ordinances.~
The temporary moratorium statute has been amended to
significantly limit extensions of interim ordinances denying
approvals for projects that have a significant component of
multifamily housing. Extension is only permissible where the
legislate body (I) specifically identifies the adverse impact of
continued approval of such projects, (2) determines there are no
2 Building Indus. Legal Defense Found. v. Superior Court, 72 Ca. 4th 1410
(1999)
3 Silvera v. City of South Lake Tahoe, 3 Cal. 3d 554 (1970)
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RE: Commercial-Residential Property Conversion
feasible alternatives, and (3) makes other specified findings
based on substantial evidence.4 Thus, Council may run afoul of
this provision if a moratorium were adopted.
B. Growth Control Ordinance
Conceivably, the City Council could pass a Growth
Control Ordinance, limiting housing development within the City.
A growth control ordinance would need to conform to the
Comprehensive Plan; any inconsistency with the Comprehensive.
Plan would render that portion of the Growth Control Ordinance
invalid.
A Growth Control Ordinance is problematic for four
reasons. First, it is unlikely that the City can establish the
necessary findings to support a Growth Control Ordinance.
Second, an E.I.R. would likely be necessary in order to analyze
the environmental impacts appropriately. An E.I.R. would also
delay the implementation and could cost more than $500,000.
Third, HCD has strict standards for the adoption of a Growth
Control Ordinance; it is unlikely that Palo Alto could meet
those standards. Lastly, a Growth Control Ordinance does not
stop the conversion of commercial and industrial property to
residential uses, it merely delays the growth and spaces it out
over time by creating a system where a specific number of units
is permitted each year.
III.Other Issues of Concern
A. Recent Legislative Restrictions
Senate Bill 575, amending the Anti-NIMBY statute,5
became effective January i, 2006. S.B. 575 limits the City’s
ability to restrict housing and expands the category of people
who can bring suit to challenge the denial of affordable housing
projects.
This new legislation has a direct effect on the City’s
ability to require a Conditional Use Permit (C.U.P.) for housing
in non-residential zones. In order to deny or conditionally
approve a housing project that provides at least twenty percent
4§65858(f)
Cal. Gov’t Code §65589.5
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RE: Commercial-Residential Property Conversion
low or very low income housing or one hundred percent moderate
income housing, the City must make one of the following
findings:
i. The City has adopted an approved Housing Element
of the Comprehensive Plan and has met its share
of the Regional Housing Needs Allocation"
("RHNA").
2.The development "would have a specific, adverse
impact upon the public health or safety, and
there is no feasible method to satisfactorily
mitigate or avoid" the impact. In order to meet
the requirements for this finding, .the impact
must be "quantifiable, direct and unavoidable"
and the findings must be based on "objective
identified written public health or safety
standards, policies..."
3.The denial or condition is required in order to
comply with state or federal law.
4.The project is on land zoned for resource
conservation, and is surrounded by land used for
agricultural or resource conservation purposes.
5.The project is inconsistent with both the zoning
ordinance and the Comprehensive Plan land use
designation. However, this finding "cannot be
utilized to disapprove or conditionally approve a
housing development project if the development
project is proposed on a site identified as
suitable or available" for affordable housing
development in the Housing Element.6 In addition,
this finding cannot be made if the City has.not
identified sufficient sites in its Housing
Element to meet its share of the regional
affordable housing need (RHNA) .
Any findings must be made in writing on a record of
substantial evidence. The new statute has a significant impact
on Palo Alto. Essentially, it eliminates our ability to require
a Conditional Use Permit for housing, unless the City amends its
Housing Sites Inventory to show that the City will meet its
housing needs in all categories.
Cal. Gov’t Code §65583 c)(i)
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RE: Commercial-Residential Property Conversion
B. CEQA Requirement
The California Environmental Quality Act (CEQA)
requires a public agency to study the environmental impact of
any proposed project that may have a significant effect on the
environment and to provide a full, good faith disclosure of that
impact.7 The first step in CEQA analysis is deciding whether
something falls within the CEQA definition of "project": an
activity that may cause a direct physical change in the
environment (or reasonably foreseeable indirect change),
undertaken by a public agency or a person that is supported by
subsidies, loans, contracts, grants, or involves the issuance of
leases permits licenses, or certificate for use by a public
agency.8 Compliance with CEQA must occur before a public agency
approves a project.
The study and disclosure of the impacts of a project
is contained in an Environmental Impact Report (EIR) . The EIR
must also describe reasonable/feasible alternatives, mitigating
measures, and a "no project" alternative.9 If a public agency
feels that the project will have no impact, it may file a
negative declaration to seek exemption from full CEQA
requirements. Additionally, if the public agency feels that it
may successfully mitigate the impacts through other means, it
may file what is known as a "mitigated" negative declaration.
EIRs are presumed adequate. They are reviewed under a
low-level standard only for abuse of discretion,I° which is found
only if the agency has not complied with procedure and the
decision is not supported by substantial evidence. In Mira Mar
Mobile Community v. City of Oceanside, 119 Cal. App. 4th 477
(2004), plaintiffs alleged that an EIR considered an inadequate
range of alternatives (two lower density alternatives, which the
petitioners argued did not meet the primary objective of
developing high density housing). The court essentially said
that EIRs do not have to be perfect, and that the stated
alternatives need not satisfy all project objectives, they must
merely meet "most" of them.~I
7Pub. Resources Code, § 21100
Pub Res Code §21065, Guidelines§15378(a)
CEQA Guidelines, § 15126.6, subds. (a) & (b)
1°Pub. Resources Code, ~ 21168.5
CEQA Guidelines, § 15126.6, subd. (a)
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RE: Commercial-Residential Property Conversion
It is impossible to determine what level of
environmental review will be required for the proposed solutions
until an ordinance is drafted. If a mitigated negative
declaration may be adopted then the environmental process will
take 60 - 90 days. If an Environmental Impact Report is required
a minimum of one year will be needed for adequate compliance.
C. Housing Element/Inventory
Within its General Plan, a city must include a Housing
Element to be reviewed not less than once every five years.12
The Housing Element is subject to review by State Housing and
Community Development ("HCD") for compliance with statutory
guidelines. Effective October i, 2006, each planning agency,
after a General Plan (Comprehensive Plan .in Palo Alto) has been
adopted, must provide an annual report on or before April i of
each year, to the Office of Planning and Research ("OPR") and
HCD on the status of the general plan, its progress in meeting
the Regional Housing Needs Assessment ("RHNA"), and degree of
compliance with Office of Planning and Research ("OPR")
guidelines.~3
HCD, in consultation with the appropriate Council of
Governments (here, Association of Bay Area Governments "ABAG")
determines the existing housing needs .for each geographic region
statewide, and ABAG determines each city’s fair share of the
RHNA. The RHNA must be factored into the Housing Element of a
city’s General Plan.
The Housing Element must contain an inventory
identifying all adequate sites to provide for housing needs of
households at all income levels in satisfying a city’s share of
°the RHNA.14 It is also important to note that these sites will
actually (not just foreseeably) be available for development
during the planning period.~s This memo is based upon the
assumption that the City will meet its housing requirements for
all income categories following completion of an updated
Inventory, otherwise the City is precluded from adoption of a
Cal. Gov’t Code §65588(a), (b)
Cal. Gov’t Code §65400(b)(3)
Cal. Gov’t Code §65583(a)(3)
Hoffmaster v. City of San Diego, 55 Cal. App. 4th 1098,1111 (1997)
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growth control ordinance and most zoning modifications are also
precluded.
The Housing Element must also be consistent with the
other elements of a city’s General Plan (Palo Alto calls its
General Plan a "Comprehensive Plan."). While the requirement
that ordinances must be consistent with the Comprehensive Plan
does not apply to charter cities, there must still be internal
consistency within a charter city’s general plan.16
Prior to adoption of or amendment to the Housing
Element, a city must submit a draft to HCD for its review and
findings. Although the findings are considered advisory, the
city must consider them before taking action, and if the draft
does not comply with the law, the city can make changes or, if
chooses not to comply, must submit written findings explaining
how its Comprehensive Plan still complies with the law. An HCD
finding that certifies substantial compliance with the law
translates into a rebuttable presumption of validity of a
housing element or its amendment in the event of a challenge.
Should HCD fail to certify the Housing Element, either
the State or a private citizen or group could sue for the City’s
failure to provide housing. The penalty during the pendency of
the lawsuit is that all development in the City, including
residential and commercial construction, could be halted.All
building permits could be blocked, potentially even for
remodels.
Once HCD has certified a city’s Housing Element,the
city is limited in its ability to deviate from its Housing
Element. Under Government Code ~65863, a city is prohibited from
reducing density of a parcel unless it makes specific written
findings based on substantial evidence that there are
"sufficient, adequate, and available sites with an equal or
greater residential density in the jurisdiction so that there is
no net loss of residential unit capacity."17
Assuming Palo Alto.can successfully meet its share of
the RHNA, as reflected in an updated, HCD-approved Housing
~6 Cal Gov’t Code §65300.5, See Garat v. City of Riverside, 2 Cal. App. 4th at
259, 286 (1991).¯ 7 Cal. Gov’t Code ~65863(c)
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RE: Commercial-Residential Property Conversion
Element (if necessary), and achieves consistency in a revised
Comprehensive Plan, and CEQA is complied with, the City Council
may consider (i) passing an ordinance prohibiting further
residential development in commercial areas but excluding sites
already designated in the Housing Inventory, OR, in the
alternative (2) limiting residential development on commercial
sites to mixed use development.
D. Anderson Initiative’s Possible Effect Upon Timing
for Zone Changes
The Anderson Initiative’s (a.k.a. Proposition 90)
primary focus is the restriction of eminent domain. However, the
Initiative contains one provision that appears to make it
applicable to downzoning. The passage of ~concern is: ~ 19(b) (8)
"Except when taken to protect public health and safety, "damage"
to private property includes government actions that result in
substantial economic loss to private property. Examples of
substantial economic loss include, but are not limited to. the
downzoning of private property, the elimination of any access to
private property, and limitations on the use of private air
space. ..[Emphasis Added]"
The City has a strong argument that the rezoning
described in this memorandum is not downzoning. However, the
Anderson Initiative is brand new, confusingly drafted, and it is
impossible to predict how a court will interpret its ~rovisions.
The best course would be for the City to enact any zone changes
prior to November 7, 2006. The constitutional amendment found in
the Proposition will apply prospectively. It will not apply to
ordinances that may result in a substantial loss to the value of
private property if the ordinances are in effect on the date of
enactment of the amendment (November 7, 2006). The relevant
sections are quoted below.
IV. Conclusion
The City Council has requested potential solutions to
the problem of conversion of existing commercial or industrial
sites to housing. This memorandum divided the question into two
types of property: (A) Commercial zoned properties which are not
on the Housing Inventory, and (B) Residential zoned property
that currently contains commercial uses, but could face
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RE: Commercial-Residential Property Conversion
conversion to residential uses in the future.
potential solutions and drawbacks to both questions.
There are
There are two possible approaches for land already
zoned Commercial. One solution could be to amend the Commercial
zone to delete housing as a permitted use. This will only apply
to sites that are not listed on our current Housing Inventory.
This option will also require compliance with CEQA, a possible
update to the Housing Inventory, and changes to the
Comprehensive Plan. These steps could be concluded in relatively
short order, certainly long before a Comprehensive Update and
related EIR could be completed.
A second option for these properties is to rezone to
require ground floor retail and mixed use projects that would
incorporate additional housing. This solution will require CEQA
review, but would probably not require a revision to the
Comprehensive Plan.
The best method to address the second question,
existing Commercial or Industrial uses on properties zoned
residential, is to rezone the properties to reflect their
current Commercial or Industrial use.
If the Council wishes to rezone any property the
changes should be effective before November~ 7, 2006 in order to
avoid any issues with the Anderson Initiative.
Respectfully submitted,
GARY M. BAUM
City Attorney
GMB:cs
cc: Frank Behest, City Manager
Emily Harrison, Assistant City Manager
060731 cs 0110497
Site
No.
5-01
5-06
5-21
5-28
5-30
5-31
8-06
09(a)
09(b)
8-11
10-02
12-01
Palo Alto Comprehensive Plan Chapter 4: Housing Element
ATTACHMENT B
Site Address
Bryant, Channing &
Ramona
800 High St.
657-663 Alma St.
(north corner of
Alma St. and Forest
Ave.)
3.3, 39 & 45 Encina
Ave. near E1 Camino
Real
841 Alma St.
901-925 High St.
2650 Birch St. at
Sheridan Ave.
2701 E1 Carnino
Real
2755 E1 Caminc;
Real
E. side Sheridan
Ave. btwn. SPRR
and Park Blvd.
901 San Antonio Rd.
4102 E1 Camino
Real at Vista
Housing Sites Inventory
Description Existing
Zoning
Oak Court AMF
(SOFA
affordable ’
housing)
Peninsula CD-S(P)
Creamery site
Former Craft CD-C(P)
and Floral CD-S(P)
building
Proposed CS
Opportunity
Center
Power PF
substation
Auto CD-S(P)
storage/parkin
g
2 vacant lots RM-40
and 4 houses
Former RM-40, CN
Greenworld
Nursery
VTA Park & PF
Ride Lot
Underutilized GM(B)
industrial
bldgs.; portion
. of.Page Mill
Rd. r.o.w.
Former Sun GM
Microsystems/
Future JCC
Former RM-30
Blockbusters
Proposed
Zoning.
AMF
PC Pending
(61 units
requested)
Mixed Use
PC pending
(90 units
requested)
TBD .-
Mixed Use
(Ap.plicatio
n pending
for 12 units)
RM-40
RM-40 or
Mixed Use
RM-40
RM-40
Mixed Use
Site
Size in
Acres
1,23
0.96
0.48
0.43
0.36
0.46
0.57
0.98
0.48
3.92
6.5
acres of
12,92
acre
site
0.65
Minimum
Dwelling
Unit Yield *
53
26.
10
90
10
10
15
3O
15
120 :
200
9
Palo Alto Comprehensive Plan Chapter 4: Housing Element
12-06
12-07
12-.09
12-11
Total
4219 E1 Camino
Real
Hyatt Rickey’ s CS(H)
Hotel
4249 E1 Camino
Real
4146 E1 Camino
Real
3445 Alma St.
Elk’ s Lodge
Vacant
Alma Plaza
RM-30,
RM-15, R-
1
RM-15
PC
CS(H)
(Applicatio
n pending
for 302
units)
RM-15, R-1
RM-15
PCpending
(10 units
requested)
7.5
acres of
15.98
acre.
site
8.08
0.77
1 acre
of 4.21
acre
site
i20
97
818
*New state legislation (A~32292) requires compensating changes in the inventory if fewer
.units are permitted on a site. A larger number of units may be approved on anysite when
consistent with the Comprehensive Plan, zoning and state law.
ATTACHMENT C
ATTACHMENT D o I
NEIGHBORHOOD, COMMUNITY, AND SERVICE
COMMERCIAL DISTRICTS
Land Uses
(a)Commercial Land Uses
Table 1 shows the land uses permitted in each commercial zone.
Table 1: CN, CC, and CS Permitted and Conditional Uses
Accessory facilities and activities customarily
associated with or essential to permitted uses, and
operated incidental to the principal use.
Drive-in services or take-out services associated
with permitted uses, so long as drive up facilities,
excluding car washes, provide full access to
pedestrians and bicyclists. A maximum of two
such services shall be permitted within 1000 feet,
and each use shall not be less than 150 feet from
one another.
Tire, battery, and automotive service facilities,
when operated incidental to a permitted retail
service or shopping center having a gross floor
area of more than 30,000 square feet.
Business and Trade Schools
Churches and Religious Institutions
Private Educational Facilities
Recycling Centers
Warehousing and Distribution
Administrative Office Services, as limited by
Section 18.16.060
Medical, Professional, and General Business
Offices, as limited by Section 18.16.060
P
CUP
CUP
CUP
CUP
P
CUP
CUP
P
P
P
CLIP
p Chapter
18.88
Chapter
18.88
Chapter
18.88
P
P
P
P 18.16.060
P 18.16.060
CLIP
CUP
CUP
P P
Land Uses
Utility Facilities essential to provision of utility
services but excluding construction or storage
yards, maintenance facilities, or corporation yards.
Commercial Recreation
Outdoor Recreation Services
Private Clubs, Lodges, or
Fraternal Organizations
Single-Family
Two-Family
Multiple-Family
Home Occupations, when accessory to permitted
residential uses
Lodging
Residential Care Homes
Eating and Drinking Services, excluding drive-in
and take-out services
Retail Services, excluding liquor stores
Liquor stores
Shopping Centers
Ambulance Services
Animal Care, excluding boarding and kennels
Boarding and Kennels
Automobile Service Stations, subject to site and
design review in accord with the provisions of
Current Code Chapter 18.82
Automotive Services
Convalescent Facilities
Day Care Centers
Small Day Care Homes
CUP CUP CUP
CUP CUP CUP
C~CUP CUP
CUP
P
P
P
P
P
P
P
P
CUP
CUP
P
CUP
P
P
P
P
P
P
P
P
P
P
P
CUP
P
CUP
P
P
P
CUP
P
P
P
P
P
P
P
P
P
P
P
P
CUP
P
CUP
CUP
cup
P
P
P
Chapter
18.88
Chapter
18.82
ZOU Draft
CN-CC-CS Uses 07 12 06.doc.doc
Land Uses
Large Day Care Homes
Financial Services
General Business Services
Hotels without kitchen facilities
Hotels providing not more than 10% of rooms
with kitchens
Hotels built after August 5, 1985, providing any
number of rooms with kitchens
Mortuaries
Neighborhood Business Services
Personal Services
Reverse Vending Machines
Farmer’s Markets
Temporary Parking Facilities, provided that such
facilities shall remain no more than five years.
P
CUP
CUP
P
P
P
CLIP
CUP
Parking as a principal use
Transportation Terminals
P = Permitted Use CLIP = Conditional Use Permit Required
(1) except drive-in services.
P
p(1)
P
CUP
CUP
P
P
P
CUP
CUP
CUP
CUP
P
pO)
P
P
CUP
CUP
P
P
P
CUP
CUP
cup
cuP
Chapter
18.88
(b)Conversion of Housing and Non-Office Commercial to Office
Medical, Professional, and Business offices shall not be located on the ground
floor, unless such offices either:
(1)have been continuously in existence in that space since March 19, 2001, and,
as of such date, were neither non-conforming nor in the process of being
amortized pursuant to Current Code Chapter 18.95;
(2)occupy a space that was not occupied by housing, retail services, personal
services, eating and drinking services, or automotive service on March 19,
2001 or thereafter;
(3)occupy a space that was vacant on March 19, 2001;
(4)are located in new or remodeled ground floor area built on or after March 19,
2001 if the ground floor area devoted to housing, retail services, eating and
ZOU Draft
CN-CC-CS Uses 07 12 06.doc.doc
Land Uses
(c)
drinking services, personal services, and automobile services does not
decrease; or
are on a site located in an area subject to a Specific Plan or Coordinated Area
Plan, which specifically allows for such ground floor medical, professional,
and general business offices.
CN District: Special Use Requirements in the Charleston and Midtown
Shopping Centers
The following regulations shall apply to the areas of the Charleston Center and the
Midtown Shopping Center shown in Exhibit B, attached to the ordinance codified
in this section.
(1)Table 2 shows the uses permitted and conditionally permitted on the ground
floor of the applicable areas of the Charleston Center and Midtown Shopping
Centers. The permitted and conditional uses specified in subsection (a) of
this section shall not apply to the ground floor of the areas of the Charleston
and Midtown Shopping Centers shown in Exhibit B. Uses lawfully existing
on January 16, 2001 may be continued as non-conforming uses but may only
be replaced with uses permitted or conditionally permitted under this
subsection (1).
Table 2: Charleston and Midtown Centers Ground Floor Uses
iA~ESSOR¥:, ~ S~POI~:USESi::. i
Accessory facilities and uses customarily
incidental to permitted uses.P Chapter 18.88
Churches and Religious Institutions CUP CUP
Private Educational Facilities CUP CUP
Recycling Centers CUP CUP
Neighborhood-serving offices that do not Pexceed 2,500 square feet in floor area.
Neighborhood-serving offices exceeding CUP2,500 square feet in floor area.
ZOU Draft
CN-CC-CS Uses 07 12 06.doc.doc 7
Land Uses
Administrative office uses and general
business office uses (other than
neighborhood-serving travel agencies and
insurance agencies) other than those legally in
existence on January 16, 2001
Medical offices not exceeding 2,500 square
feet in area, professional offices, travel
agencies, and insurance agencies, as limited
by subsection (3)
Utility Facilities essential to provision of
utility services but excluding construction or
storage yards, maintenance facilities, or
corporation yards.
Commercial Recreation
Outdoor Recreation Services
Private Clubs, Lodges, or
Fraternal Organizations
Residential uses of any nature
Eating and Drinking Services, excluding
drive-in and take-out services
Retail Services, excluding liquor stores
Liquor stores
Ambulance Services
Animal Care, excluding boarding and kennels
Automobile Service Stations, subject to site
and design review in accord with the
provisions of section Current Code Section
18.82
Convalescent Facilities
Day Care Centers
Financial Services
X
CUP
CUP
CUP
CUP
X
P
P
CUP
CUP
P
CUP
CUP
P
CUP
X
CUP
CUP
CUP
CUP
CUP
X
P
P
CUP
Cup
P
CUP
CUP
P
CUP
ZOU Draft
CN-CC-CS Uses 07 12 06.doc.doc
Land Uses
Mortuaries
Neighborhood Business Services
Personal Sei’vices
Reverse Vending Machines
CUP
P
P
P
Farmer’s Markets CUP
Temporary Parking Facilities, provided that
such facilities shall remain no more than five CUP
years.
P = Permitted Use CUP = Conditional Use Permit Required
X =.Prohibited Use
cUP
P
P
P
CUP
CUP
Chapter 18.88
(2)Charleston Shopping Center: Additional Use Restrictions
(A)
(B)
(c)
Any office use first occupying space at the Center on or after January
16, 2001, shall obtain a written determination from the director of
planning and community environment that it qualifies as a
neighborhood serving use, as defined in this chapter, before occupying "
its premises. The applicant shall submit such information as the
director shall reasonably require in order to make the determination,
and the director shall issue the determination within 30 days of
receiving a complete application. Failure to submit the required
information shall be grounds for determining that a business is not
neighborhood-serving.
No more than 7,850 square feet of total floor area at the Center shall be
occupied by office space at any time.
Before approving a conditional use permit for neighborhood-serving
offices larger than 2,500 square feet in total floor area, the city shall
fred that the proposed use will be neighborhood-serving, that it will be
conducted in a manner that will enhance and strengthen the Center as a
neighborhood resource, and that it will not diminish the retail strength
of the center.
Midtown Shopping Center: Additional Use Restrictions
(A)An existing ground floor office may be replaced with another office if
(i) the new tenant Or owner will continue the existing business or
practice; or
(ii) a conditional use permit is issued for the new office use.
ZOU Draft
CN-CC-CS Uses 07 12 06.doc.doc
Land Uses
(B)
(c)
No conditional use permit shall be issued for any new office use on the
ground floor unless, in addition to the findings required for a
conditional use permit as specified in Chapter 18.76.010, the City finds
that the proposed use will be neighborhood serving, that it will be
conducted in a mamaer that will enhance and strengthen the Midtown
Shopping District as a neighborhood resource, and that it will not
diminish the retail strength of the District.
Exclusion of Certain Office Buildings. 711,719, and 721 Colorado
Avenue, and 689 Bryson Avenue, buildings not fronting on Middlefield
Avenue, designed and used for office purposes, and not well suited to
other uses are exempt from the provisions of this subsection (b).
ZOU Draft
CN-CC-CS Uses 07 12 06.doc.doc 10
ATTACHMENT ~)-2
DOWNTOWN COMMERCIAL DISTRICT
Land Uses
The permitted and,conditionally permitted uses for the CD district are shown in Table 1:
Table 1: CD Permitted and Conditionally Permitted Uses
Accessory facilities and activities
customarily associated with or essential to
permitted uses, and operated incidental to
the principal use.
Drive-in or Take-out Services associated
with permitted uses, so long as drive-up
facilities, excluding car washes, provide
full access to pedestrians and bicyclists.
A maximum of two such services shall be
permitted within one thousand feet and
each use shall not be less than 150 ft from
one another
Tire, battery, and automotive service
facilities, when operated incidental to a
permitted retail service or shopping center
having a gross floor area of more than
30,000 square feet.
Business and Trade Schools
Churches and Religious Institutions
Colleges and Universities
Private Educational Facilities
Private Clubs, Lodges, or
Fraternal Organizations
P
CUP
CUP
P
P
P
CUP
P
P
P P
P P
P
CUP
CUP
CUP
CUP
Chapter 18.88
Recycling Centers
Warehousing and Distribution
CUP C~CUP
C~
Administrative Office Services, as limited
by Section 18.18.040(a)P 18.18.040(a)
Land Uses
Medical, Professional, and General
Business Offices on any floor other than
the ground floor of a building, subject to
the exceptions and provisions of Section
18.18.040(a)
Utility Facilities essential to provision of
utility services but excluding construction
or storage yards, maintenance facilities, or
corporation yards.
P
CUP
P
CUP
P 18.18.040(a)
Commercial Recreation
Outdoor Recreation Services
CUP
CLIP
CUP
CUP
CLIP
CUP
Single-Family
Two-Family
Multiple-Family
Home Occupations, when accessory to
permitted residential uses.
Lodging
Residential Care Homes
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Chapter i 8.88
Retail Services, excluding liquor stores
Shopping Centers
Liquor Stores
P
P
P
P
P
P
CUP Chapter 18.88
Animal Care, excluding boarding and
kennels
Ambulance Services
Automobile Service Stations, subject to
site and design review in accord with the
provisions of Current Code Chapter 18.82
Automotive Services
Convalescent Facilities
Day Care Centers
Day Care Homes, Small
Day Care Homes, Large
Eating and Drinking Services, except
drive-in or take-out services
Financial Services, except drive-up
services
P
CUP
CUP
P
P
P
P
P
P
P
CUP
CUP
CUP
P
P
P
P
P
CUP
CUP
P
P
P
P
CUP
ZOU Draft
AttachC2 CD Uses ZOU 7.12.doc.doc
Land Uses
PGeneral Business Services
Hotels without kitchens
Hotels providing kitchens to not more
than 10% of rooms
Hotels providing unlimited kitchens, if
constructed after August 5, 1985
Mortuaries
Personal Services
Reverse Vending Machines
Parking as a principal use
Passenger Transportation Terminals
CUP
P P
P P P
CUP CUP
P P CUP
P P P
Cun’ent Code ChapterPPP18.88
CUP CUP
CUP
Indoor Farmer’s Markets CUP CUP
Temporary Parking Facilities, provided
that such facilities shall remain no more CUP CUP CUP
than five years.
P = Permitted Use CUP = Conditional Use Permit Required
cuP
(a)Restrictions on Office Uses
(1)In all CD subdistricts, the no medical, professional, or general business office
shall be located on the ground floor, except such offices which:
(A) have been in continuously in existence in that space since March 19,
2001, and, as of such date, were neither non-conforming nor in the
process of being amortized pursuant to Current Code Chapter 18.95;
(B)occupy a space that was not occupied by housing, retail services, eating
and drinking services, personal services, or automotive service on
March 19, 2001 or thereafter;
(c)
(D)
occupy a space that was vacant on March 19, 2001;
are located in new or remodeled ground floor areas built on or after
March 19, 2001 if the ground floor area devoted to housing, retail
services, eating and drinking services, personal services, and
automobile services does not decrease; or
(2)
(E)are on a site located in an area subject to a Specific Plan or Coordinated
Area Plan, which specifically allows for such ground floor medical,
professional, or general business offices.
In the CD-S and CD-N subdistricts, the following requirements Shall apply to
office uses:
ZOU Draft
AttachC2 CD Uses ZOU 7.12.doc.doc 6
Land Uses
(B)
No new gross square footage of a medical, professional, general
business, or administrative office use shall be allowed, once the gross
square footage of such office uses, or any combination of such uses, on
a site has reached 5,000 square feet.
No conversion of gross square footage from any other use to a medical,
professional, general business, or administrative office use shall be
allowed once the gross square footage of such office uses, or any
combination of such uses, on a site has reached 5,000 square feet.
ZOU Draft
AttachC2 CD Uses ZOU 7.12.doc.doc 7