HomeMy WebLinkAboutStaff Report 4944Carnahan, David
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Steve Levy <slevy@ccsce.com>
Monday, July 28, 2014 2:05 PM
Council, City
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14 JUL28 PH S: 37
Planning Commission; Gitelman, Hillary; Turner, Steven; Keene, James
Background and Ideas for Comp Plan
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Background and Ideas for Comp Plan.doc; Caltrain and PA Planning.doc; Services, Dining and
Retail in Downtown (l).doc
We are on vacation for the August 4th meeting so I have written my thoughts in the attached memo titled Background and Ideas
for the Comp Plan.
I am also attaching two related memos written earlier in response to the last PTC meeting.
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DATE: July 28, 2014
TO: Palo Alto City Council and PTC Members
FROM: Stephen Levy
SUBJECT: Background and Ideas for Camp Plan
Update on Regional Trends
Growth and strategies to address growth challenges in Palo Alto are influenced
byjob and population trends in the region.
Recent Job Tre.nds-Job Growth Surges Above Plan Bay Area Forecast
The region has added nearly 100,000 jobs per year since 2010 led by strong
growth in the San Jose and San Francisco metro areas, which have often been
among the five fastest job growth areas in the nation. Unemployment rates in the
region declined to 5.3% in June 2014 with lower rates in San Francisco and San
Mateo counties.
The recent job growth has outpaced the ABAG projected growth path to 2020 as
shown below. In four years since 2010 the San Jose metro area (Santa Clara
and San Benito counties) have recorded 75% of the job growth projected by
ABAG between 2010 and 2020 while the SF metro area added 84% of
anticipated 1 0-year growth and the region was 65% of the way to the ten year
forecasted growth. It is likely that job growth will slow somewhat over the rest of
the decade as discussed below but fears that the ABAG growth projections were
far too high have not been borne out by actual events.
Job Growth Projected Vs. To Date
700000 ~-------------------------------------,
600000+------------------------------
500000+----------------------------
400000+----------------------------
300000+----------------------------
200000+----------------------------
100000
0
SJ Metro SF Metro
• ABAG 2010-20 • Actual2010-14
Bay Area
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Recent Population Trends-Growth Accelerated in 2012 and 2013
The region added nearly 275,000 residents between 2010 and 2014 or 40% of
the ten-year growth anticipated in Plan Bay Area. It is very unusual for job growth
to outpace population growth (usually there are roughly 2 added residents for
every new job) but this was possible so far as many jobs were filled by existing
residents who were unemployed.
But a large share of recent population growth came in the last two years as
unemployment fell and more of the jobs required people moving to the region-a
trend that will continue now that unemployment is near 5%. In 2012 and 2013
the Bay Area was the fastest growing region in the state and Santa Clara County
was the fastest growing county.
Information Relevant to the Near Term Future and to 2030
Job growth will slow toward the end of the decade and beyond but that is already
anticipated in the Plan Bay Area forecasts, which now look low for the period to
2030. For the near term the outlook is for continuing strong job growth. The U.S,
and state job growth is expected to be strong through ~016. And the latest
venture capital data show that the Bay Area is receiving a record high share of
VC funding and 2014 shapes up as the second highest funding year after the
dot. com boom record in 2000 based on data for the first half of the year.
Bay Area VC Funding Trends
$40.0 ,--------------------------,-60.0%
$35.0 +-----------------------+-1
$30.0 +--------j~---------------J~
50.0%
$25.0 ~ 40.0%
$20.0 -1--~~~~~~---------------r-+-30.0%
$15.0 +------1----\------------'------~'---1
$10.0 -t----1---~.--------:;;;;;;;JII'~==~--==~~~=---------l
$5.0 +-----:::;;ao-=---------------------1
20.0%
10.0%
$0.0 +--.----.----.------.----.----.------,,--.---.---,---.-------.----,---r-----r----r-.--.-----+ 0.0%
1996 1998 2000 2005 2008 2010 1stH 2014
-$Billions -share of U.S. VC
In addition to normal economic activity the south bay will see extra activity
surrounding the new 49er stadium and soon to open BART stations.
Two years ago there was discussion in Palo Alto questioning the Plan Bay Area
population projections because they were much higher than those released by
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the California Department of Finance (DOF). DOF will release new Bay Area and
statewide projections for second review by regional/county planning agencies
this Friday. They will be similar to the levels expected in Plan Bay Area and
compared to previous ABAG and DOF projections have a) lower birth rates, b)
more growth in the Asian population and c) similar patterns of substantial growth
in the older population.
So the bottom line, which should not be surprising to residents, policy
makers or staff, is that the Bay Area is experiencing substantial growth and
remains desired by business and prospective residents alike as a great
place to live and work.
Implications and Ideas for the Comp Plan
1) The Comp Plan horizon is 2030. The new DOF projections should give a
good picture of the age and ethnic population trends for the region and
peninsula. I appreciate how difficult it is to think about and plan for the
future but I hope that the Council and PTC can incorporate the
perspective of our 2030 residents and the kind of city they would like. That
perspective will include that of existing residents and the substantial aging
that will take place but also, I hope, reflect what newer residents will be
like and want. One challenge we face with these incredibly rising home
prices is maintaining diversity as much as realistically possibl~.
2) Staff has outlined four broad alternatives for the initial Comp Plan
discussion. One difference among the alternatives is in the amount of
growth that is planned for. I urge the staff, Council and PTC to include an
alternative that at least matches the amount of growth envisioned in Plan
Bay Area. My discussions with staff indicate that they may adjust one of
the alternatives to achieve this broader range of growth alternatives for
consideration.
I am well aware of the current mood of many residents about growth but
have also seen at the PTC and at the Our Palo Alto meetings that many
residents want to see the city offer a broader range of new housing. In
addition I am concerned that there are legal risks in preventing discussion
of plans that at least study the Plan Bay Area anticipated growth.
3) Staff has identified six areas within the city for studying future growth
alternatives while trying to steer growth away from existing residential
areas except for possible additional retail opportunities. I think this is a
good framework for proceeding. In all of the meetings I have attended
residents have worked constructively and seen opportunities in all of
these locations. While we will not have exact numbers until the
alternatives are fleshed out more, it may well be that these six areas can
handle the housing growth without any densification of existing R1
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neighborhoods. So what has been a controversy about housing growth in.
the abstract may be easier to find agreement if we get specific about
these six areas.
4) I am encouraging staff to provide rough numbers as soon as possible as
to how much growth is allowed under current zoning. I am worried that the
current upset about recent growth is encouraging residents to have
unrealistic expectations about how much growth can be limited apart from
the Camp Plan question of what is desirable for Palo Alto. I am hoping
that staff including the city attorney can clarify what is in the discretion of
Council (certainly there is a lot and I expect vigorous analysis of public
benefits for zoning change applications) and what is less or not
discretionary-for example, the changes planned at the Yoga Center and
CPK sites in downtown.
One factor for all to consider is that office use for tech companies and
start-ups is much denser that the way office space was used ten or twenty
years ago. This means that a considerable (I hope staff can get an
estimate) amount of job growth can occur even if no more buildings are
approved. There are solid cost (space is expensive) and productivity {tech
workers get benefit from working closely together) for these changes.
Our offices downtown have seen two such changes-1) the way Palantir
is using the space that our office and the adjacent training ceriter used
space before we had to move, 2) the way that the main tenant in our
current building has gone from 10 to 40 employees in the same space
and 3) we saw the same trend in our visit last week to our son's new
workplace in Irvine where four or five people work in each office--40+
people working in a space that previously might have had 10 to 15.
5) There has been a lot of back and forth about what uses are good near
transit. My understanding of the best thinking on these issues (which is
supported by the Caltrain usage data) is
--for reducing commuting trips the best approach is to locate jobs near
transit
--for reducing travel by households apart from commuting (most rips are
not for commuting) the best locations are near services and often used
retail.
So it is good to locate housing near downtown or Cal Ave, not primarily
because they are near Caltrain stations but because they are near places
residents go often and can now not need a car.
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As a result the goal of locating housing within x miles of transit should be
replaced by the goal of locating new housing near services and often used
retail. There are places like T&C and Stanford Shopping Center for other
needs. We cannot eliminate car use but can reduce the need for it by
these measures.
I am attaching a memo on Caltrain usage. As readers can see Palo Alto
ridership is in a strong uptrend and by far the largest use is riders who
come to PAin the morning in contrast to those who leave from the city
confirming that it is access to jobs that is boosting ridership the most.
6) I am attaching a long memo on retail/dining/services demands and
locations. There are three bottom lines
--for downtown what we have is what one would expect given the
customer base
--growth in the customer base downtown and in many PA locations is
driven by jobs and visitors (from afar, from neighboring communities and
from other parts of PA). The customer base is not dominated by nearby
residents (although we feel well served living downtown) and one should
expect prospective tenants to think about the needs of their primary
cu~tomer base.
--many of the residents who call for more retail also call for limiting
housing and job growth putting them in a logical disconnect from the
perspective of prospective retail/dining/service owners.
7) I commend the city for the three part approach to parking and traffic
downtown and wish all participants well. From my perspective there are
no villains here and solutions need to respect the perspectives of
residents, businesses and workers to solve the problem for everyone and
not just move it around. Probably some kind of pricing oriented to
incentives to use existing non street parking will be helpful along with
capacity increases.
8) I am worried about two potential "mistakes" in the Comp Plan process and
associated activities-
--a) that residents may underestimate the amount of growth that is
coming, which is why I have stressed providing such information and
associated legal opinions
--b) that as a result of these underestimates or wishful hopes, we may not
go as aggressively as I think we need to in improving infrastructure,
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expanding school capacity, finding approaches to deal with the expanded
parking and traffic challenges
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CENTER FOR CONTINUING STUDY OF THE CALIFORNIA ECONOMY
575 MIDDLEFIELD ROAD SUITE 110 • PALO ALTO • CALIFORNIA • 94301
TELEPHONE: (650) 321-8550
FAX: (650) 321-5451
www.ccsce.com
DATE: July 28, 2014
TO: Palo Alto City Council and PTC Members
FROM: Stephen Levy
SUBJECT: Caltrain and PA Planning Issues
Some Caltrain Trends
Average Weekday Ridership
The Palo Alto (downtown) station remains the second busiest system wide and
shows above average growth since 2010. Interestingly, while the Cal Ave
ridership is much lower, the rate of growth exceeds that at the downtown station.
Since these are total trips, the number of unique riders is roughly half of the
ridership totals. So, for example, the growth of 2,574 boardings at PA represents
nearly 1,300 additional riders.
Average Weekday Trips To and From Station
Growth 2010-14
2010 2011 2012 2013 2014 Number Percent
PA 3582 4028 4664 5469 6156 2574 71.9%
Cal Ave 777 865 1069 1294 1408 631 81.2%
MtView 3049 3368 3670 3876 4274 1225 40.2%
Total 34120 37779 42354 47060 52611 18491 54.2%
Source: Caltrain
Average Peak Morning Ridership
These trends are interesting and shed light on two discussions-1) the priority
for downtown housing and jobs relative to transit and 2) parking and shuttle
service relative to ridership trends.
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Average MORNING PEAK Weekday Trips to and From Palo Alto Station
Going North Going South Total
On Off On Off On Off
2010 659 790 161 1399 820 2189
2011 382 826 150 1538 532 2364
2012 726 1037 186 1803 912 2840
2013 746 1333 214 2139 960 3471
2014 820 1493 246 2459 1066 3952
2010-14 161 703 85 1060 246 1763
24.4% 89.0% 52.8% 75.8% 30.0% 80.5%
The first point to note is that the station is used by many more coming here than
leaving from here. In 2014 in the morning peak hour 3,952 riders got off at PA
station and 1,066 got on. The number of riders getting off at PA increased by
80.5% since 2010 while the departing riders increased by just 30.0%.
More riders (2,459 in 2014) got off coming from the north than from the south
(1 ,493) but there are large numbers and% increases from both directions.
Potential Implications
Palo Alto is a major destination for jobs for Caltrain morning riders. The increase
since 2010 has been 1 ,763. It would be interesting to know the split between
those going downtown, to Stanford and perhaps to other locations. I know that
many walk downtown after getting off as I see them but I do not have numbers.
Perhaps Stanford has and would share shuttle ridership trend information.
Each of these arriving passengers eliminates a parking demand. It would be
interesting to know how the increase in riders getting off at PA compares to job
increases in downtown and Stanford.
I had thought the increase on people getting on at PA would have been larger
and might have been a larger component of the increase in parking pressure.
This looks less likely given the ridership numbers and 1) that PA has the second
largest on board bikers (732), 2) some people walk to the station and 3) some
are dropped off.
I think these data support the idea that locating jobs near transit is the more
effective way to reduce auto commute use while locating housing near
downtowns remains the most effective way to reduce non co~ mute travel.
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575 MIDDLEFIELD ROAD SUITE 110 • PALO ALTO • CALIFORNIA • 94301
TELEPHONE: (650) 321-8550
FAX: (650) 321-5451
www.ccsce.com
DATE: July 28, 2014
TO: Palo Alto City Council and PTC Members
FROM: Stephen Levy
SUBJECT: Shopping, Dining and Services in Downtown
There has been considerable discussion about trends in retail development
downtown in the media, on Town Square and somewhat in the Camp Plan
update discussions. Neilson Buchanan has continued this discussion in the
email that I am forwarding with this memo.
Introduction
I am not a retail expert nor am I a city planner. My expertise is in regional
economic analysis and I am familiar with Bay Area economic and demographic
trends, Plan Bay Area and the concepts of "smart growth" in these contexts.
I prepared the regional growth forecast that was the foundation for Plan Bay
Area and have done similar work for four other regional planning agencies in
California as well as for energy and transportation planning. I do not prepare
EIRs but have recently reviewed major economic/environmental analyses related
to AB 32 for the Air Resources Board and the Southern California air quality
district. I serve on the technical advisory committee related to preparation of the
new State Housing Element. I served on the PA infrastructure commission.
Nor am I an expert in Palo Alto data beyond what I have shared with the council
and planning staff. I can guess at what the data will show but to the extent
possible staff or PlaceWorks/Joanna Jansen should collect the data I discuss in
the Comp Plan update.
I lived for 14 years with roommates in College Terrace and then near 101 Alma.
Nancy and I lived in two homes in the near Duveneck for 28 years and we have
lived downtown in a condo for the past 9 years. I have worked downtown since
1969. I have never driven a car (poor eyesight).
I have never represented a developer in a public de~ision process and own no
property besides our condo and a week timeshare in Tahoe.
Is it just Retail or do Residents Really Mean Retail and Services?
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Most people "shop" downtown for restaurants/coffee/desert places, services and
traditional retail stores that sell goods.
My sense is that people mean to include services and eating/drinking places in
the discussion of what they want downtown to serve people who live and /or
work downtown. At least for our family once you get beyond restaurants/coffee
places, Whole Foods, CVS, Walgreens and T Js (we walk-thank you Palo Alto
for the Homer tunnel), most of our purchases downtown are of services:
I think we need to develop a common understanding that retail really means
places that residents, workers and visitors regularly use for dining, shopping and
services.
The Competitive Environment
Downtown retail in the narrow sense of shopping for goods faces a daunting
competitive environment, which probably explains most of the recent trends.
Here are some trends that affect the environment for retail downtown, but much
less so or not at all for many services and eating/drinking establishments.
1) Downtown is adjacent to a major regional shopping center. It is a good
walk or short drive and has what most residents would call a full range of
retail opportunities.
2) There is a substantially revitalized Town and Country shopping center
with, again, a wide variety of smaller retail establishments sprinkled with a
few services and a market (T Js) that all appear to be thriving. This
competition for downtown is a relatively new occurrence and I would ask a
retail expert how this changes what is possible downtown.
3) Both Stanford and T&C have two other competitive advantages: a) they
operate under coordinated management and b) they have free onsite
parking. One of the challenges of retail "planning" downtown is that we
deal with individual owners; not a single management entity.
4) There has been a major increase in online shopping for items that folks
use to get at stores. When I came home today, in our 17 unit condo there
were 8 packages from Amazon and the like. I feel confident that the
increase in online shopping affects the possibilities for downtown in what
potential shoppers want. Again, Amazon does not deliver services, just
goods.
5) I now get books and ·music on my I Pad. A while back I would go to
Borders but no more. I am sure many residents no longer need (or need
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as many) bookstores, places to get COs or places to rent movies in a
Netflix world.
6) Downtown rents and land prices are expensive-very expensive and that
will affect who wants to locate there.
7) What remains and what we use and walk to from our downtown condo
include
Medical care-at PAMC and Stanford
Our dentists are downtown
Dry cleaning
Shoe repair (I also buy shoes at Footwear but this is not a frequent
purchase)
Clothes alteration (for our son's wedding)
Eyeglasses and repair (Nancy walks to T&C)
Chico's
Watch repair and small purchases
Banking (I still do not do mobile banking)
Haircuts (Nancy drives to Mt. View)
The UPS store (and the post office while it lasts)
The Apple, Sprint and Verizon stores which are a mixture of goods and
services
Extensive use of Whole Foods, CVS, and Walgreens for food, home
supplies, prescriptions,
Lots of visits to restaurants, places to get frozen yogurt, coffee and
goodies-we find lots of places that are not too expensive and mostly they
are all jammed.
I am interested in what other downtown residents use in the way of
shopping or services downtown.
So we are quite satisfied as residents and rarely use the car.
Who are the Principal Customers?
I don't have the data but I have to believe that the largest daytime customers are
people who work downtown.
I think the customers downtown establishments (and we should) focus on are
1 ) Downtown residents
2) Downtown workers
3) Stanford students and workers
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4) Visitors
It would be interesting to know the numbers in each group. Whatever the
numbers I suspect the growth recently has been in downtown workers and
associated visitors.
The Palo Alto residents who do not live downtown have no real need to get into
the downtown retail/services discussion. They have closer better options. They
do have an interest in downtown dining or perhaps going to the movies or unique
places but in general for everyday shopping, downtown is not needed for them.
My observation is that many, if not most, of the new workers downtown are
relatively young. I see that in the people getting off Caltrain, the people where
our offices have been and the people we see in restaurants and coffee/yogurt
places and observe in bars. We also see a lot of families with children downtown
in the evening and where we eat.
If I were a retailer I would target these folks. I think there is a lot of nostalgia in
these retail discussions, often by people who do not live or work downtown. Our
favorite not here anymore places are Hobee's, Good Earth and Machismo
Mouse. But we do not suffer for places to eat and if our children were still of that
age, we would easily find new places (Lyfe Kitchen, Sprouts, Plutos and others)
that meet our needs. ·
But I am reminded often that I am no longer a typical or in demand customer for
many goods and services. TV networks routinely cancel shows we love but I do
not pretend they are acting irrationally. My trainer had an office next to mine but
we both got moved out when Palantir took over the building and offered so much
that the our landlords also moved on. Life goes on and we are surviving.
What do we make of the Empty Retail Places Downtown?
I observe retail places that remain vacant for long periods. The Borders site is
one. The Waterworks site is another. There are two on Bryant-the almost
kosher restaurant and the restaurant site next to Monique's (vacant seemingly
forever). The retail site next to Simply Be has been vacant forever. I am sure
there are others. We do not walk around counting vacant sites.
I assume this means that the demand for retail space at the rents offered is not
sufficient to fill these spaces.
This leads to the "you can bring a horse to water but you cannot make her drink"
dilemma. These vacant spaces are all ground floor in good locations. So I
suspect enforcing more ground floor retail space is not any guarantee that it will
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be filled and certainly no guarantee that it will be filled by the kind of places the
nostalgia folks wish for.
What's Not Coming Downtown
Big box stores, a giant cheap supermarket (nor any other places in PA with our
zoning and land costs).
I am interested in hearing from folks what is missing that is realistic to expect and
how that might occur through city action.
The Palo Alto Contradiction
Many of the people who speak to the PTC and council and write on Town
Square are indulging in illogical thinking.
They want more retail downtown while restricting the growth of the two largest
customer bases (workers and residents) and, inferentially by opposing new
hotels, restricting the growth of some tourism.
Next they want more retail in a parking constrained area while opposing the
growth of traffic or spending money for new parking lots and simultaneously
wanting to restrict parking on neighborhood streets without as yet any offsetting
investments. I AM sympathetic to the downtown parking issues and am just
pointing out that wanting the growth or retail while restricting the cu'stomer
base and only solving part of the parking challenges is a bit illogical.
Conclusions
My perspective is that downtown shopping, restaurants and services are serving
the main customer bases well. I observe lots of people in Whole Foods, CVS,
Walgreens, and the many restaurants and desert/coffee places we frequent and
lots of people downtown in general.
There are plenty of mainstream shopping options for people who do not live or
work in downtown and their voices are not much to be trusted relative to future
downtown retail. My perspective in listening to the complaints is that they see
retail as a way to block more office growth and not because they are injured by
the transitions going on.
I am unclear what kind of planning can be done given the many uncoordinated
individual property owners or where there is market failure. But expert voices on
downtown retail might see other options that are within the city's powers.
Two Other Factors Worth Noting
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I will write more about these but wanted here to get the ideas out.
1) The Comp Plan is to 2030. That means a) going beyond the current
RHNA time period ending and anticipating the needs of the next eight
year period which will be within the Comp Plan horizon and 2) anticipating
the implications of the large demographic changes in the decade 2020-
2030.
2) We should rethink the notion in the current alternative that seeks to locate
housing within %mile of transit. To minimize the travel impacts .of new
housing it should be located close to services, dining and shopping. The
main trips eliminated are non-work trips. Some residents have suggested
trying to reduce school driving trips-and interesting idea.
Most people (I don't know for sure but this must be right) who take
Caltrain drive, walk, bike or get dropped off but most do not live within a
half mile of the stations.
On the other hand smart growth does suggest placing job sites near
transit. Look at the success of the downtown Caltrain station, Stanford
shuttle combination. Watch as I do who the folks are getting off the trains
and where they go.
In the other hand this may be a distinction with only a slight difference in
that the train stations are located near services, dining and shopping.
But once you shift from thinking housing will reduce commute trips to the
concept of reducing not commute trips and associate parking, the half
mile from transit is not the right criterion. For example, where Neilson and
Eric live are in .the right location for convenient walking trips but are not
within a half mile of transit. Our place might make the % mile criterion but
a block away might not although in terms of downtown use they are
identical.
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