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2002-03-04 City Council (5)
City of Palo Alto City Manager’s Report TO: ’HONORABLE REDEVELOPMENT AGENCY BOARD FROM:CITY MANAGER DEPARTMENT: CITY MANAGER DATE: SUBJECT: MARCH 4, 2002 CMR:158:02 AUTHORIZATION FOR STAFF TO CIRCULATE THE PROPOSED REDEVELOPMENT PLAN FOR THE EDGEWOOD REDEVELOPMENT PROJECT (REDEVELOPMENT PLAN) FOR REVIEW AND COMMENT AND REFERRAL OF THE PROPOSED REDEVELOPMENT PLAN TO THE PLANNING COMMISSION AND AFFECTED TAXING ENTITIES, APPPROVAL OF THE PRELIMINARY REPORT FOR THE ADOPTION OF THE REDEVELOPMENT PLAN FOR THE EDGEWOOD REDEVELOPMENT PROJECT AREA (PRELIMINARYREPORT)AND REFERRAL TO EACH AFFECTED TAXING ENTITY, AND AUTHORIZATION FOR STAFF TO CIRCULATE FOR REVIEW AND COMMENT THE DRAFT ENVIRONMENTAL IMPACT REPORT FOR THE EDGEWOOD REDEVELOPMENT PROJECT (DEIR) RECOMMENDATION ¯Staff recommends that the following actions be taken by the Redevelopment Agency at its annual meeting on March 4, 2002: Authorize staff to circulate the proposed Redevelopment Plan for the Edgewood Redevelopment Project (Redevelopment Plan) for review and comment and refer the proposed Redevelo ~ment Plan to the Planning Commission and affected taxing entities, CMR:158:02 Page 1 of 7 o Approve the Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Area (Preliminary Report) and refer to each affected taxing entity,-and Authorize staff to circulate for review and comment the Draft Environmental Impact Report (DEIR) for the Edgewood Redevelopment Project. BACKGROUND On July 9, 2001, the Palo Alto City Council adopted an ordinance declaring the need for a redevelopment agency in Palo Alto. The Council also declared the City Council to be the governing body for the .redevelopment agency and made the finding that the formation of a redevelopment agency "will serve the public interest and promote the public safety and welfare in an effective manner" in accordance with the Health and Safety Code section 33200. Staff returned to the Redevelopment Agency with the documents and actions necessary to organize and operate the Agency. On September 19, 2001, the Edgewood Redevelopment Project Area was designated as a Survey Area and the procedures for adoption of the Redevelopment Plan were initiated. An informal Neighborhood Advisory Committee (NAC), appointed by the City Manager, was also formed. The NAC is composed of retail tenants, property owners and neighborhood representatives in or near the Project Area who provide input to the City Manager on the Preliminary Plan, the Redevelopment Plan for the Edgewood Redevelopment Project Area (Redevelopment Plan), the Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Area (Preliminary Report), and the Draft Environmental Impact Report for the Edgewood Redevelopment Project (DEIR). DISCUSSION The next steps in the redevelopment plan adoption process require three actions by the Redevelopment Agency. It is important to note that the Redevelopment Agency is only being asked to authorize the Redevelopment Plan and DEIR for circulation, review and referral to appropriate entities. The Agency’s approval of the Preliminary Report will allow referral of the document to each affected taxing entity. The first action is the authorization for circulation and review of the Redevelopment Plan. The Redevelopment Plan acts as the charter for a redevelopment agency and is the fundamental document that governs its activities. It is the framework that authorizes the CMR: 158:02 Page 2 of 7 City of Palo Alto City Manager’s Report use of particular financing tools by the redevelopment agency. A redevelopment plan is a very general document that provides flexibility to the agency and enhances its ability to respond to market conditions, redevelopment opportunities and the desires and abilities of owners and tenants. As stated in the Redevelopment Plan, the goals for the revitalization of Edgewo0d include the preservation .of neighborhood serving retail businesses, provision of more affordable-attainable housing for individuals and/or families of low- to moderate income, and the elimination of blight within the Project Area. The Redevelopment Plan provides for the following proposed redevelopment actions: ¯owner and business participation opportunities; ¯property acquisition rights in the project area; ¯relocation assistance to tenants and business owners; ¯demolition and removal of buildings and improvements; ¯installation, construction or reconstruction of streets, utilities or other public improvements; ¯land uses in complianc_e with the City’s Comprehensive Plan; ¯.redevelopment of land by private enterprise or public agencies ¯financing tools to pay for the public costs of redevelopment activities (including bond financing); and tax increment allocation for low- and moderate-income housing As a part of this action to authorize circulation and review, the Redevelopment Agency Board will also transmit the Redevelopment Plan to the Planning and Transportation Commission (P & TC). The P & TC will review the Redevelopment Plan and make a determination that it is in compliance with the City’s Comprehensive Plan. The secorid action is approval of the Preliminary Report. The Preliminary Report describes the types of physical and economic blighting conditions that exist in the Project Area including: substandard design features including insufficient parking and limited visibility and access; inadequately sized parcels under multiple ownership; declining sales; and crime CMR:158:02 Page 3 of 7 The Preliminary Report also describes public improvement deficiencies, most notably flooding, which contribute to the cost of development. Additionally, the Preliminary Report identifies reasons fdr selecting the Project Area and includes a preliminary analysis of the proposed .method for financing the redevelopment of the Project Area. The Preliminary Report finds that the land value supported by mixed-use development cannot support the cost to purchase the existing center. Therefore, the private sector acting on its own will not redevelop the Project Area with a new grocery store and supporting retail space. Based on a cash flow analysis that compares the anticipated costs to implement a program of revitalization in the Project Area to projected resources expected to be generated over the life of the Redevelopment Plan, the Preliminary Report establishes economic feasibility of the Edgewood Project Area. Once approved by the Agency, staff will transmit the Preliminary Report to the taxing entities affected by the proposed Edgewood Redevelopment Project. The third action is to authorize public circulation and review of the DEIR for the Edgewood Redevelopment Project. The DEIR describes the existing environmental conditions in the project area, assesses the environmental impacts of the Redevelopment Plan and recommends mitigation measures. (The full DEIR document is included as Attachment 4 in the staff report received by City Council members. Additional copies of the DEIR are available for review at the Civic Center in the Clerk’s Office on the 7th Floor and at the Public Information Counter on the 1st Floor as well as at the following City of Palo Alto library branches: Main, Downtown, Terman Park, College Terrace and Mitchell Park.) The DEIR is an informational document; it must describe the project, list technical and environmental characteristics, and dis(uss the following subjects: ¯significant environmental effects that Cannot be avoided; ¯mitigation measures proposed to minimize the significant effects; ¯alternatives to the project; ¯the relationship between short-term uses and long-term productivity environment; ¯significant irreversible enVironmental changes; and ¯growth-inducing impacts. of the CMR:158:02 page 4 of 7 The DEIR for the Edgewood Redevelopment Project concludes that the Redevelopment Project will result in two significant unavoidable impacts resulting from traffic and the loss of historic resources. Traffic from the project will create a significant impact at the signalized Embarcadero/West Bayshore intersection during the AM and PM peak hours. Mitigation for this impact would be to reduce the width of the intersection at Embarcadero Road and West Bayshore and modify the high-speed off-ramp from southbound US 101 to a "T" into Embarcadero Road. While the Agency would strongly pursue these traffic-related mitigations, these mitigations would require the approval of CalTrans and may be economically infeasible for the project. Therefore, these traffic- related mitigations have not been included in the project. These impacts are considered significant and unavoidable. The project also includes the demolition of the existing Edgewood Shopping Center. Based on an historic report prepared for the project, the Edgewood Shopping Center buildings appear to be eligible for the California Register of Historic Resources. Edgewood Plaza was constructed as part of the Edgewood tract developed by Joseph Eichler in 1956-57 and may be the only retail center designed and constructed by Eichler in conjunction with an Eichler residential development. The report finds that the retail and office buildings retain historic integrity since various character-defining features, such as the narrow vertical wood siding, large areas of glazing held by narrow wood mullions, and wide roof eaves with over-scaled exposed rafters are still intact. Following the Council action to release the DEIR for its ~required review period, the DEIR will circulate for 45 days, during which time the NAC, taxing entities, residents, property owners, businesses and any other interested parties can comment. After the circulation period has ended, all comments will be responded to by the EIR consultant and City staff and integrated into the final EIR. Following completion of the final EIR, the Redevelopment Agency may certify the EIR for the Edgewood Redevelopment Project. INPUT FROM NAC The NAC has held three meetings (October 9, 2001, November 1, 2001 and February 20, 2002) and thus far has reviewed and commented on the Preliminary Plan, the Redevelopment Plan, and the Preliminary Report. On February 20, the NAC reviewed and commented on the Redevelopment Plan and the Preliminary. Report and supported moving forward with the next steps in the redevelopment process. CMR: 158:02 Page 5 of 7 Several comments by the NAC were noted, and issues such as the pass-through of incremental revenues to other taxing agencies were addressed in presentations made by City staff. Two additional comments raised, by the NAC are being explored with the redevelopment consultants for possible revisions to the Preliminary Report and DEIR during the circulation and review period. These are concerns about the possibility of three stories of mixed-use (apartments over retail) in the middle of the center and the assumptions used for financial projections. (The DEIR assumes maximum build-out at the center while the Preliminary Report focuses on a moderate build-out proposal of units to gauge possible revenues). NEXT STEPS IN THE REDEVELOPMENT PROCESS ¯Preliminary Report and Redevelopment Plan transmitted to taxing entities ¯Public information meeting regarding Redevelopment Plan and Owner Participation Rules ¯Planning Commission reviews Redevelopment Plan and DEIR and reports recommendations to Agency ¯Agency adopts Final Report to City Council on Redevelopment Plan (Final Report) and transmits the Final Report, Redevelopment Plan and Final EIR to City Council ¯Agency adopts Owner Participation Rules ¯Joint public hearing on Redevelopment Plan and Final EIR ¯Agency/City Council adopt Redevelopment Plan and Final EIR RESOURCE IMPACT No additional resources are required at this time. POLIC~g IMPLICATIONS The recommended actions will continue the process initiated by the Redevelopment Agency to adopt a Redevelopment Plan for the Edgewood Redevelopment Project. The proposed revitalization of the Edgewood Redevelopment Project Area conforms to Comprehensive Plan policies. ENVIRONMENTAL REVIEW This action by the City Council is not considered a project under the California Environmental Quality Act. CMR: 158:02 Page 6 of 7 PREPARED BY:S SAWN ARP~ Resources Planning Manager Advance Planning Manager CITY MANAGER APPROVAL: BENEST, City Manager ATTACHMENTS Attachment 1" Attachment 2: Attachment 3" Attachment 4: Attachment 5: Redevelopment Plan for the Edgewood Redevelopment Project Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Area Draft Environmental Impact Report Preface .and Summary for the Edgewood Redevelopment Project Draft Environmental Impact Report for the Edgewood Redevelopment Project (Available for review at the Civic Center on the 7th Floor in the Clerk’s Office and on the 1st Floor at the Public Information Counter as well as at the following City of Palo Alto library branches: Main, Downtown, Terman Park, College Terrace and Mitchell Park.) Summary of Redevelopment Documents CMR:158:02 Page 7 of 7 ~ttachment ~ REDEVELOPMENT PLAN FOR THE EDGEWOOD REDEVELOPMENT PROJECT Prepared by the PALO ALTO REDEVELOPMENT AGENCY JANUARY 2002 TABLE OF CONTENTS I1. [,~100] INTRODUCTION ....~ .....................~ ...........................................................................................1 [§200] DESCRIPTION OF PROJECT AREA ......................................................................................2 II1~[.~300] PROPOSED REDEVELOPMENT ACTIONS ...........................................................................3 11. [§3011 GENERAL ...........................................................................................................................3 [§302] PARTICIPATION OPPORTUNITIES; EXTENSION OF PREFERENCES FOR REENTRY WITHIN REDEVELOPED PROJECT AREA ...............................................................4 [§3031 Opportunities for’Owners and Business Occupants .....................................................4 [§3041 Rules for Participation Opportunities, Priorities, and Preferences ................................4 [.~3051 Participation A.qreements ..............................................................................................4 [§306~ Conforming Owners .......................................................................................................5 [§307] COOPERATION WITH PUBLIC BODIES .........................................................................5 [§308] PROPERTY ACQUISITION ...............................................................................................6 [,~309~ Real Property .................................................................................................................6 [.~310] Personal Property ...........................................................................................’ ........" .......6 [§311] PROPERTY MANAGEMENT ............................................................................................7 [§312] PAYMENTS TO TAXING AGENCIES ...............................................................................7 [§313] RELOCATION OF PERSON, BUSINESS CONCERNS, AND OTHER DISPLACED BY THE PROJECT ........................................................................................................................7 [,§314~ Assistance in Findinq Other Locations ................., ........................................................7 [§3151 Relocation Payments .................................................. ....................................................7 r§3161 DEMOLITION, CLEARANCE, AND BUILDING AND SITE PREPARATION ....................8 [,~3171 Demolition and Clearance ...........................................................................................i. 8 [§3"181 Preparation of Buildinq Sites .........................................................................................8 r§3191 PROPERTY DISPOSITION AND DEVELOPMENT .......’ ...................................................8 f.~3201 Real Property Disposition and Development .................................................................8 a_=.[§321] General ..................... ......................................................................................................8 b_=.[§3221 Disposition and Development Documents ..............................................................: .....9 9=.[§323] Development by the A.qency.. .........................................................................................9 d~[§324.] Development Plans .....................................................................................................10 f.~325~ Real Property Disposition and Development ...............................................................10 [§326] REHABILITATION, CONSERVATION, AND MOVING OF STRUCTURES ...................11 /,~3271 Rehabilitation and Conservation .................................................................................11 f§328~ Moving of Structures ....................................................................................................11 [§329] LOW- AND MODERATE-INCOME HOUSING ................................................................11 Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment’Agency PAO201005.PA:CK:gbd 17175.002.008101111102 Pagei 4_. C.~. 2. 3. 4_. 5. 6. 7_. 8. 9. 10. 11. 12. D. E. [§401] REDEVELOPMENT LAND USE MAP ..............................................................................12 [§402] OTHER LAND USES .......................................................................................................12 L~4031 Public Riqhts-of-Way .....................................................................: .................:i ..........12 [,~4041 Other Public, Semi-Public. Institutional, and Non-profit Uses ..................................... f§4051 Interim Uses ......................................................: ......................................................... [§406! Non-conforminq Uses ..................................................................................................13 [§4071 GENERAL CONTROLS AND LIMITATIONS ..........i .......................................................13 f§4081 Construction ................................................................................................" ................14 f§4091 Rehabilitation and Retention of Properties ..................................................................14 [§4101 Limitation on the Number of Buildinqs .. ........14 [§4111 Number of Dwellinq Units ......................................: .................................i ...................14 f§4121 Limitation on Type, Size. and Hei.qht of Buildin,qs ...............................................14 [§4131 Open Spaces. Landscaping, Li.qht, Air. and Privac’y ..................’ .................................14 [.6414 Si(lns ............. ...............................................................................................................15 L{4151 Utilities ................................................................................................................." ........15 L~4161 Incompatible Uses .......................................................................................................15 f§4171 Non-discrimination and Non-seqre.qation ........’ ............................................................15 f§4181 Subdivision of Parcels .................................................................................................1.5 f419/ Minor Variations .............................................................................................................16 [§420] DESIGN FOR DEVELOPMENT ......................................................................................16 [§421] BUILDING PERMITS .......................................................................................................17 V~ r§500] METHODS OF FINANCING THE PROJECT .....................................:. ................................17 A’..=.[§501] GENERAL DESCRIPTION OF THE PROPOSED FINANCING METHOD ................" .....17 B_~.[§502] TAX INCREMENT FUNDS ..............................................................................................18 C_.=.[§503] OTHER LOANS AND GRANTS ...............................’ ........................................................20 VI~[.~600] ACTIONS BY THE CITY ....~ ......................................................................................: ...........20 VII.__[,~700] ENFORCEMENT.: ....................................i .......: ................., ..................................................21 Vlll~[.~8001 DURATION OF THIS PLAN .............~ .....................................................~ .......~ ......................21 IX__=.[_~900] PROCEDURE FOR AMENDMENT .......................................................................................22 Attachments Attachment No. 1 Attachment No. 2 Attachment No. 3 Attachment No. 4 Legal Description of the Project Area Boundaries ProjectArea Map Redevelopment Land Use Map Proposed Public Improvements Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO2OIO05.PA:CK:gbd 17175,002.008101111102 Page ii REDEVELOPMENT PLAN FOR THE EDGEWOOD REDEVELOPMENT PROJECT I.[§100] INTRODUCTION This is the Redevelopment Plan (the "Plan") for the Edgewood Redevelopment Project (the "Project") in the City of Palo Alto (the "City"), County of Santa Clara, State of California; it consists of the text, the Legal Description of the Project Area Boundaries (Attachment No. 1), the Project Area Map (Attachment No. 2), the Redevelopment Land Use Map (Attachment No. 3), and the Proposed Public Improvements (Attachment No. 4). This Plan was prepared by the Palo Alto Redeyelopment Agency (the "Agency") pursuant to the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.), the California Constitution, and all applicable local laws and ordinances. The proposed redevelopment of the area within the boundaries of the Project (the "Project Area") as described in this Plan is consistent with the Comprehensive Plan for the City of Palo Alto (the "Comprehensive Plan"). This Plan is based upon a Preliminary Plan formulated and adopted by the Planning Commission of the City of Palo Alto (the "Planning Commission") by Resolution No. 283 on November 7, 2001. This Plan provides the Agency with powers, duties, and obligations to implement and further the program generally formulated in this Plan for the redevelopment, rehabilitation, and revitalization of the area within the Project Area. Because of the long-term nature of this Plan and the need to retain in the .Agency flexibility to respond to market and economic conditions, property owner and developer interests, and opportunities from time to time presented for redevelopment, this Plan does not present a precise plan or establish specific projects for the redevelopment, rehabilitation, and revitalization of the Project Area. Instead, this Plan presents a process and a basic framework within which specific plans will be presented, specific projects will be established, and specific solutions will be proposed and by which tools are provided to the Agency to fashion, develop, and proceed with such specific plans, projects, and solutions. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005.PA:CK:gbd 17175.002.008/01/11/02 Page 1 The purposes of the Community Redevelopment Law will be attained through, and the major goals and objectives of this Plan are: Re-planning, re-design, clearance and reconstruction of poorly developed and underutilized buildings. Elimination of.blight and deterioration at Edgewood, and redevelopment of the Project Area in accordance with the City’s Comprehensive Plan and local codes and ordinances. Participation of tenants and owners in the revitalization of their properties. Development of modern, integrated pedestrian and vehicular circulation. Strengthening of the economic base of the Project Area by redevelopment and rehabilitation of structures and installation of needed site improvements. F.Promotion of new private sector investment within the Project Area. G.Improvement through improved signage, access and orientation of the site. H.Preserve and enhance neighborhood-serving retail businesses. Provision, through new construction, of increased housing units for individuals and/or families of low to moderate income. Installation of public improvements that will address any current or future inadequacies at the site. II.[§200] DESCRIPTION OF PROJECT AREA The boundaries of the Project Area are described in the "Legal Description of the Project Area Boundaries," attached hereto as Attachment No. 1 and incorporated herein by reference, and are shown on the "Project Area Map," attached hereto as Attachment No. 2 and incorporated herein by reference. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005.PA:CK:gbd 17175.002.008/01/11102 Page 2 III.[§300] PROPOSED REDEVELOPMENT ACTIONS A. [§301] General The Agency proposes to eliminate and prevent the spread of blight and deterioration in the Project Area by: 1.Permitting participation in the redevelopment process by owners of properties located in the Project Area consistent with this Plan and rules adopted by the Agency; 2.The acquisition of real property; 3.Providing relocation assistance to displaced persons and business concerns; 4.The demolition or removal of certain buildings and improvements; 5.Providing for participation by owners presently located in the Project Area and the extension of preferences to business occupants desiring to remain or reenter into business within the redeveloped Project Area; 6.The installation, construction, or reconstruction of streets, utilities, and other public improvements; 7.The disposition of property for uses in accordance with this Plan; 8.The redevelopment of land by private enterprise or public agencies for use in accordance with this Plan; 9.The rehabilitation of structures and improvements by present owners, their successors, and the Agency, and; 10.Providing for the retention of controls and the establishment of restrictions or covenants running with the land so that property will continue to be used in accordance with this Plan. In the accomplishment of these purposes and activities and in the implementation and furtherance of this Plan, the Agency is authorized to use all the powers provided in this Plan and all the powers now or hereafter permitted by law. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA02OIO05.PA:CK:gbd 17175.002.008/01111/02 Page 3 B__ [§302] Participation Opportunities; Extension of Preferences for Reentry Within Redeveloped Project Area 1.[§303] Opportunities for Owners and Business Occupants In accordance with this Plan and the rules for participation adopted by the Agency pursuant to this Plan and the Community Redevelopment Law, persons who are owners of real property in the Project Area shall be given a reasonable opportunity to participate in the redevelopment of the Project Area consistent with the objectives of this Plan.. The Agency shall extend reasonable preferences to persons who are engaged in business in the Project Area to remain or reenter into business within the redeveloped Project Area if they otherwise meet the requirements prescribed in this Plan and the rules adopted by the Agency. 2.[§304] Rules for Participation Opportunities, Priorities, and Preferences In order to provide opportunities to owners to participate in the redevelopment of the Project Area and to extend reasonable preferences to businesses to reenter into business within the redeveloped Project Area, the Agency shall promulgate rules for participation by owners and the extension of preferences to business tenants for reentry within the redeveloped Project Area. .3.[§305] Participation A.qreements The Agency may require that, as a condition to participation in redevelopment, each participant shall enter into a binding agreement with the Agency by which the participant agrees to rehabilitate, develop, use and maintain the property in conformance with this Plan and to be subject to the provisions hereof. In such agreements, participants may be required to join in the recordation of such documents as may be necessary to ensure the property will be developed and used in accordance with this Plan and the participation agreement. Whether or not a participant enters into a part!cipation agreement with the Agency, the provisions of this Plan are applicable to all public and private property in the Project Area. In the event a participant fails or refuses to rehabilitate, develop, and use and maintain its real property pursuant to this Plan and a participation agreement, the real property or any interest therein may be acquired by the Agency and sold or leased for rehabilitation or development in accordance with this Plan. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO2OIO05.PA:CK~gbd 17175.O02.008/01/11/02 Page 4 4.[§306] Conform, infl Owners The Agency may, at its sole and absolute discretion, determine that certain real property within the Project Area presently meets the requirements of this Plan, and the owner of such property will be permitted to remain as a conforming owner without a participation agreement with the Agency provided such owner continues to operate, use, and maintain the real property within the requirements of this Plan. However, a conforming owner shall be required by the Agency to enter into a participation agreement with the Agency in the event that such owner desires to construct any additional improvements or substantially alter or modify existing structures on any of the real property described above as Conforming. C. [§307] Cooperation with Public Bodies Certain public bodies are authorized by state law to aid and cooperate, with or without consideration, in the planning, undertaking, construction, or operation of this Project. The Agency shall seek the aid and cooperation of such public bodies and shall attempt to coordinate this Plan with the activities of such public bodies in order to accomplish the purposes of redevelopment and the highest public good. The Agency, by law, is not authorized to acquire real property.owned by public bodies without the consent of such public bodies. The Agency, however, will seek the cooperation of all public bodies which own or intend to acquire property in the Project Area. Any public body which owns or leases property in the Project Area will be afforded all the privileges of owner and tenant participation if such public body is willing to enter into a participation agreement with the Agency. All plans for development of property in the Project Area by a public body shall be subject to Agency approval. The Agency may impose on all public bodies the planning and design controls contained in this Plan to ensure that present uses and any future development by public bodies will conform to the requirements of this Plan. To the extent now or hereafter permitted by law, the AgencY is authorized to financially (and otherwise) assist any public entity in the cost of public land, buildings, facilities, structures, or other improvements that are or would be of benefit to the Project. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005.PA:CK:gbd 17175.002.008101111102 Page 5 D. [§308] Property Acquisition 1~ [§309] Real Property Except as specifically exempted herein, the Agency may acquire, but is not required to acquire, any real property located in the Project Area by any means authorized by law. It is in the public interest and is necessary in order to eliminate the conditions requiring redevelopment and in order to execute this Plan for the power of eminent domain to be employed by the Agency to acquire real property in the Project Area which cannot be acquired by gift, devise, exchange, purchase, or any other lawful method. Eminent domain proceedings, if used, must be commenced within twelve (12) years from the date of adoption of this Plan. The Agency shall not acquire real property to be retained by an owner pursuant to a participation agreement if the owner fully performs under the agreement. The Agency is authorized to acquire structures without acquiring the land upon which those structures are located. The Agency is authorized to acquire either the entire fee or any other interest in real property less than a fee. The Agency shall not acquire real property on which an existing building is to be continued on its present site arid in its present form and use without the consent of the owner unless:. (a) such building requires structural alternation, improvement, modernization, or rehabilitation; (b) the site, or lot on which the building is situated, requires modification in size, shape, or use; or (c) it is necessary to impose upon such property any of the controls, limitations, restrictions, and requirements of this Plan and the owner fails or refuses to execute a participation agreement in accordance with the provisions of this Plan. The Agency is not authorized to acquire real property owned by public bodies which do not consent to such acquisition. The Agency is authorized, however, to acquire public property transferred to private ownership before redevelopment of the Project Area is completed, unless the Agency and the private owner enter into a participation agreement and the owner completes his responsibilities under the participation " agreement. 2. [§310] Personal Property Generally, personal property shall not be acquired. However, where necessary in the execution of this Plan, the Agency is authorized to acquire personal property in the Project Area by any lawful means, including eminent domain. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO201OO5,PA:CK:gbd 17175.002.O08101/11102 Page 6 E. [§311] Property Management During such time as property, if any, in the Project Area is owned by the Agency, such property shall be under the management and control of the Agency. Such property may be rented or leased by the Agency pending its disposition for redevelopment, and such rental or lease shall be pursuant to such policies as the Agency may adopt. [§312] Payments to Taxing A.qencies Pursuant to Section 33607.5 of the Community Redevelopment Law, the Agency is required to and shall make payments to affected taxing entities to alleviate the financial burden and detriment that the affected taxing entities may incur as a result of the adoption of this Plan. The payments made by the Agency shall be calculated and paid in accordance with the requirements of Section 33607.5. G.._~. [§313] Relocation of Person, Business Concerns, and Other Displaced by the Proiect 1.[§314] Assistance in F ndin.q Other Locations The Agency shall assist all persons, business concerns, and others displaced by the Project in finding other locations and facilities. In order to carry out the Project with a minimumof hardship to persons, business concerns, and others, if any, displaced by the Project, the Agency shall assist such persons, business concerns and others in finding new locations that are within their respective financial means, in reasonably convenient locations, and otherwise suitable to their respective needs. 2_.[§315] Relocation Payments The Agency shall make relocation payments to persons, business concerns, and others displaced by the Project for moving expenses and direct losses of personal property and additionalrelocation payments as may be required by law. Such relocation payments shall be made pursuant to the California Relocation Assistance Law (Government Code Section 7260 et seq.) and Agency rules and regulations adopted pursuant thereto. The Agency may make such other payments as may be appropriate and for which funds are available. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO2OIOO5.PA:CK:gbd 17175.002.008/01 I11/02 Page 7 H_=. [§316] Demolition, Clearance, and Buildinq and Site Preparation . 1. [§317] Demolition and Clearance The Agency is authorized to demolish and clear buildings, structures, and other improvements from any real property in the Project Area as necessary to carry out the purposes of this Plan. 2..=. [§318] Preparation of Buildinq Sites The Agency is authorized to prepare, or cause to be prepared, as building sites any real property in the Project Area owned by the Agency. In connection therewith, the Agency may cause, provide for,- or undertake the installation or construction of streets, utilities, parks, playgrounds; and other public improvements necessary to carry out this Plan. Prior consent of the City Council is required for the Agency to develop sites for commercial or other use by providing streets, sidewalks, utilities, or other improvements which an owner or operator of the site would otherwise be obligated to provide. I_ [§319] Property Disposition and Development 1_.[§320] Real Property Disposition and Development a_. [§321] General For the purposes of this Plan, the Agency is authorized to sell, lease, exchange, subdivide, transfer, assign, pledge, encumber by mortgage or deed of trust, or otherwise dispose of any interest in real property. To the extent permitted by law, the Agency is authorized to dispose of real property by negotiated lease, sale, or transfer without public bidding. Property acquired by the Agency for rehabilitation and resale shall be offer.ed for resale within one (1) year after completion of rehabilitation or an annual report concerning such property shall be published by the Agency as required by law. Real property acquired by the Agency may be Conveyed by the Agency without charge to the City and, where beneficial to the Project Area, without charge to any public body. All real property acquired by the Agency in the Project Area shall be sold or leased to public or private persons or entities for development for the uses permitted in this Plan. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Page 8 PA02OIO05.PA:CK:gbd 17175.002.008/01/11/02 All purchasers or lessees of property acquired from the Agency shall be. obligated to use the property for the purposes designated in this Plan, to begin and complete development of the property within a peried of time which the Agency fixes as reasonable, and to comply with other conditions which the Agency deems necessary to carry out the purposes of this Plan. b~ [§322] Disposition and Development Documents To provide adequate safeguards to ensure that the provisions of this Plan will be carried out and to prevent the recurrence of blight, all real property sold, leased, or conveyed by the Agency, as well as all property subject to participation agreements, is subject to the provisions of this Plan. The Agency shall reserve such powers and controls in the disposition and development documents as may be necessary t,o prevent transfer, retention, or use of property for speculative purposes and to ensure that development is carried out pursuant to this Plan. Leases, deeds, contracts, agreements, and declarations of restrictions of the Agency may contain restrictions, covenants, covenants running with the land, rights of reverter, conditions subsequent, equitable servitudes, or any other provisions necessary to carry out this Plan. Where appropriate, as determined by the Agency, such documents, or portions thereof, shall be recorded in the office of the Recorder of Santa Clara County. All property in the Project Area is hereby subject to the restriction that there shall be no discrimination or segregation based upon race, color, creed, religion, sex, marital status national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of property in the Project Area. All property sold, leased, Conveyed, or subject to a participation agreement shall be expressly subject by appropriate documents to the restriction that all deeds, leases, or contracts for the sale, lease, sublease, or other transfer of land in the Project Area shall contain such non-discrimination and non-segregation clauses as required by law. c_. [§323] Development by the A,qency To the extent now or hereafter permitted by law, the Agency is authorized to pay for, develop, or construct any publicly-owned building, facility, structure, or. other improvement either within or outside the Project Area, for itself or for any Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO2OIOO5.PA:CK:gbd 17175.002.008101111/02 Page 9 public body or entity, which buildings, facilities, structures, or other improvements are or would be of benefit to the Project Area. Specifically, the Agency may pay for, install, or construct the buildings, facilities, structures, and other improvements identified in Attachment No. 4, attached hereto and incorporated herein by reference, and may acquire or pay for the land required therefore. In addition to the public improvements authorized under Section 318 and the publicly-owned improvements identified in Attachment No. 4 of this Plan, the Agency is authorized to install and construct, or to cause to be installed and constructed, within or outside the Project Area, for itself or for any public body or entity for the benefit of the Project Areal public improvements and public utilities, including, but not limited to, the following: (1) sewers; (2) natural gas distribution systems; (3) water distribution systems; (4) parks, plazas, and pedestrian Paths; (5) parking facilities; (6) landscaped areas; (7) flood control improvements; and (8) street improvements. The Agency may enter into contractsl leases, and agreements with the City or other public body or entity pursuant to this Section 323, and the obligation of the Agency under such contract, lease, or agreement shall constitute an indebtedness of the Agency which may be made payable out of the taxes levied in the Project Area and allocated to the Agency under subdivision (b) of Section 33670 of the Community Redevelopment Law and Section 502 of this Plan or out of any other available funds. d.=. [§324] Development Plans All development plans (whether public or private) shall be submitted to the Agency for approval. All development in the Project Area must conform to City design review standards. 2~[§325] Real Property Disposition and Development For the purposes of this Plan, the Agency is authorized to lease’, sell, exchange, transfer, assign, pledge, encumber, or otherwise dispose of personal property which is acquired by the Agency. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO201OO5.PA:CK:gbd 17175,002.008101111102 Page 10 J_ [§326] Rehabilitation, Conservation, and Moving of Structures [§327] Rehabilitation and Conservation The Agency is authorized to rehabilitate and conserve, or to cause to be rehabilitated and conserved, any building or structure in the Project Area owned by the Agency. The Agency is also authorized and directed to advise, encourage, and assist in the rehabilitation and conservation of property in the Project Area not owned by the Agency. 2_.[§328] Movin,q of Structures As necessary in carrying out this Plan, the Agency is authorized to move, or to cause to be moved, any standard structure or building or any structure or building which can be rehabilitated to a location within or outside the Project Area. K.~. [§329] Low- and Moderate-Income Housing Pursuant to Section 33334.2 of the Community Redevelopment Law, not less than twenty percent (20%) of all taxes which are allocated to the Agency pursuant to Section 33670 of the Community Redevelopment Law and Section 502 of this Plan shall be used by the Agency for the purposes of increasing, improving, and preserving the City’s supply of housing for persons and families of very low, low, or moderate income unless certain findings are made as required by that section to lessen or exempt such requirement. In carrying out this purpose, the Agency may exercise any or all of its powers. The funds for this purpose shall be held in a separate Low and Moderate Income Housing. Fund until used. Any interest earned by such Low and Moderate Income Housing Fund shall accrue to the Fund. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005.PA:CK:gbd 17175.002.008101/11102 Page 11 |V.[§400] USES PERMITTED IN THE PROJECT AREA A_.:. [§401] Redevelopment Land Use Map The "Redevelopment Land Use Map, " attached hereto as Attachment No. 3 and incorporated herein by reference, illustrates the location of the Project Area boundaries, major streets within the Project Area, and the land uses authorized within the Project by the City’s current Comprehensive Plan. The City will from time to time update and revise the Comprehensive Plan. It is the intention of this Redevelopment Plan that the land uses to be permitted within the Project Area shall be as provided within the City’s Comprehensive Plan, as it currently exists or as it may from time to time be amended, and as implemented and applied by City ordinances, resolutions and other lawsl B..=. [§402] Other Land Uses 1.[§403] Public Riqhts-of-Way As illustrated on the Redevelopment Land Use Map (Attachment No. 3), the major public streets within the Project Area include Embarcadero Road, Bayshore Road West, Channing Avenue and Saint Francis Drive. Additional public streets, alleys, and easements may be created in the Project Area as needed for proper development. Existing streets, alleys, and easements may be abandoned, closed, or modified as necessary for proper development of the Project. Any changes in the existing interior or exterior street layout shall be in accordance with the Comprehensive Plan, the objectives of this Plan, and the City’s design standards, shall be effectuated in the manner prescribed by state and local law, and shall be guided by the following criteria: ao The requirements imposed by such factors as topography, traffic safety and aesthetics, and; The potential need to serve not only the Project Area and new or existing developments but to also serve areas outside the Project by providing convenient and efficient vehicular access and movement. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005.PA:CK:gbd 17175.002.008/01/11/02 Page12 The public rights-of-way may be used for vehicular and/or pedestrian traffic, as well as for public improvements, public and private utilities, and activities typically found in public rights-of-way. 2~ [§404] Other Public, Semi-Public, Institutional, and No.n-profit Uses In any area shown on the Redevelopment Land Use Map (Attachment No. 3), the Agency is authorized to permit the maintenance, establishment, or enlargement of public, semi-public, institutional, or non-profit uses, including park and recreational facilities, libraries, educationall fraternal, employee, philanthropic, religious and charitable institutions, utilitiesl railroad rights-of-way, and facilities of Other similar associations or organizations. All such uses shall, to the extent possible, conform to the provisions of this Plan applicable to the uses in the specific area involved. The Agency may impose such other reasonable requirements and/or restrictions as may be necessary to protect the development and use of the Project Area. 3= [§405] Interim Uses Pending the ultimate development of land by developers and participants, the Agency is authorized to use or permit the use of any land in the Project Area for interim uses that are not in conformity with the uses permitted in this Plan. 4_.. [§406] Non-conformin,q Uses The Agency may permit an existing use to remain in an existing building in good condition which use does not conform to the provisions of this Plan, provided that such use is generally compatible with existing and proposed developments and uses in the Project Area. The owner of such a property must be willing to enter into a participation agreement and agree to the imposition of such reasonable restrictions as may be necessary to protect the development and use of the Project Area. The Agency may authorize additions, alterations, repairs, or other improvements in the Project Area for uses which do not conform to the provisions of this Plan where such improvements are within a portion of the Project where, in the determination of the Agency, such improvements .would be compatible with surrounding Project uses and. development. C.~. [§407] General Controls and Limitations All real property in the Project Area is made subject to the controls and requirements of this Plan. No real property shall be developed, rehabilitated, or otherwise changed Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005.PA:CK:gbd 17175.002.008/01/11/02 Page 13 after the date of the adoption of this Plan, except in conformance with the provisions of this Plan. 1. [§408] Construction All construction in the Project Area shall comply with all applicable state and local laws and codes in effect from time to time. In addition to applicable codes, ordinances, or other requirements governing development in the Project Area, additional specific performance and development standards may be adopted by the Agency to control and direct redevelopment activities in the Project Area. [§409] Rehabilitation and Retention of Properties Any existing structure within the Project Area approved by the Agency for retention and rehabilitation shall be repaired, altered, reconstructed, or rehabilitated in such a manner that it will be safe and sound in all physical respects and be attractive in appearance and not detrimental to the surrounding uses. [§410] Limitation on the Number of Buildinqs The number of buildings in the Project Area shall not exceed the number of buildings permitted under the Comprehensive Plan. 4_. [§411] Number of Dwellinq Units At the time of adoption of this Plan, there are no dwelling units within the Project Area. The number of dwelling units permitted in the Project Area shall not exceed the number of dwelling units permitted under the Comprehensive Plan as it now exists or may be amended. [§412] Limitation on Type, Size, and Heiqht of Buildin.qs Except as set forth in other sections of this Plan, the type, size, and height of buildings shall be as limited by applicable federal, state, and local statutes, ordinances, and regulations. [§413] Open Spaces, Landscapin.q, Li.qht, Air, and Privacy The approximate amount of open space to be provided in the Project Area is the total of all areas which will be in the public rights-of-way, the public ground the space around buildings, and all other outdoor areas not permitted to be covered by buildings. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005,PA:CK:gbd 17175.002.008/01/11/02 Page14 Landscaping shall be provided to enhance open spaces in the Project Area and create a high-quality aesthetic environment. Landscaping may include, in addition to trees, shrubs and other living plant materials, such materials as paving, landscape containers, plaza furniture, and landscape and pedestrian lighting. -Sufficient space shall be maintained between buildings in all areas to provide adeqL~ate light, air, and privacy. 7_.[§414 Si.qns All signs shall conform to City sign ordinances and other requirements as they now exist or are hereafter amended. Design of all proposed new signs shall be submitted to the Agency and/or the City prior to installation for review and approval pursuant to the procedures of this Plan. 8_.[§415] Utilities The Agency shall require that all utilities be placed underground whenever physically and economically feasible. 9~.[§416] Incompatible Uses No use or structure which by reason of appearance, traffic, smoke, glare, noise, odor, or similar factors, as determined by the Agency, would be incompatible with the surrounding areas or structures shall be permitted in any part of the Project Area. 10.[§417] Non-discrimination and Non-seqre.qat on There shall be no discrimination or segregation based upon race, color, creed, religion, sex, marital status, national origin, or ancestry permitted in the sale lease, sublease, -transfer, use, occupancy, tenure, or enjoyment of property in the Project Area. 11.__~[§418] Subdivision of Parcels No parcel in the Project Area, including any parcel retained by a participant, shall be subdivided without .the approval of the Agency. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005.PA:CK:gbd 17175.002,008/01111/02 Page 15 12._=. [419] Minor Variations Under exceptional circumstances, the Agencyis authorized to permit a variation from the limits, restrictions, and controls established by this Plan. In order to permit such variation, the Agency must determine that: The application of certain provisions of this Plan would result in practical difficulties or unnecessary hardships inconsistent with the general purpose and intent of this Plan; There are exceptional circumstances or conditions applicable to the property or to the intended development of the property which do not apply generally to other properties having the same standards, restrictions, and controls; do Permitting a variation will not be materially detrimental to the public welfare or injurious to property or improvements in the area, and; Permitting a variation will not be contrary to the objectives of this Plan or of the Comprehensive Plan. No variation shall be granted which changes a basic land use or which permits other than aminor departure from the provisions of this Plan. In permitting any s.uch variation, the Agency shall impose such conditions as are necessary to protect the public peace, health, safety, or welfare and to assure compliance with the purposes of this Plan. Any variation permitted by the Agency hereunder shall not supersede any other approval required under applicable City codes and ordinances. D._:. [§420] Design for Development Within the limits, restrictions, and controls established in this Plan, the Agency is aut.horized to establish heights of buildings, land coverage, setback requirements,- design criteria, traffic circulation, trafficaccess, and other development and design controls necessary for proper development of both private and public areas within the Project Area; No new improvement shall be constructed, and no existing improvement shall be substantially modified, altered, repaired, or rehabilitated, except in accordance with this Plan and any such controls and, in the case of property which is the subject of a disposition and development or participation agreement with the Agency and any other property, at the discretion of the Agency, in accordance with architectural, landscape, Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO201OO5.PA:CK:gbd 17175.002.008101111102 Page16 and site plans submitted to and approved in writing by the Agency. One of the objectives of this Plan is to create an attractive and pleasant environment in the Project Area. Therefore, such plans shall give consideration to good design, open space, and other amenities to.enhance the aesthetic quality of the Project Area. The Agency shall not approve any plans that do not comply with this Plan. E. [§421] Buildinq Permits No permit shall be issued for the construction of any building or for any construction on an existing building in the Project Area from the date of adoption of this Plan until the application for such permit has been approved by the Agency as consistent with this Plan and processed in a manner consistent with all City requirements. An application shall be deemed consistent with this Plan if it is consistent with the Comprehensive Plan, applicable zoning ordinances and any adopted design for development.- The.Agency is authorized to establish permit procedures and approvals in addition to those set forth above where required for the purposes of this Plan. Where such additional procedures and approvals are established, a building permit shall be issued only after the applicant for same has been granted all approvals required by the City and the Agency at the time of application. V.[§500] METHODS OF FINANCING THE PROJECT A. [§501] General Description of the Proposed Financinq Method The Agency is authorized to finance this Project with financial assistance from the City, the State of California, the federal government, tax increment funds, interest income, Agency bonds, donations, loans from private financial institutions, the lease or sale of Agency-owned property, or any other available source, public or private. The Agency is also authorized to obtain advances, borrow funds, and create indebtedness in carrying out this Plan. The principal and interest on such advances, funds, and indebtedness may be paid from tax increments or any other funds available to the Agency. Advances and loans for survey and planning and for the operating capital for nominal administration of this Project may be provided by the City until adequate tax increment or other funds are available, or sufficiently assured, to repay the advances and loans and to permit borrowing adequate working capital from sources other than the City. The City, as it is able, may also supply additional assistance through City loans and grants for various public facilities. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO201005.PA:CK:gbd 17175.002.008101111102 Page 17 The City or any other public agency may expend money to assist the Agency in carrying out this Project. As available, gas tax funds from the state and county may be used for street improvements and public transit facilities. B._=. [§502] Tax Increment Funds All taxes levied upon taxable property within the Project A~ea each year, by or for the benefit of the State of California, the County of Santa Clara, the City, any district, or any other public corporation (hereinafter sometimes called "taxing agencies"), after the effective date of the ordinance approving this Plan shall be divided as follows: That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of said taxing agencies upon the total sum of the assessed value of-the taxable property in the Project as shown ¯ upon the assessment roll used in connection with the taxation of such property by such taxing agency, last equalized prior to .the effective date of such ordinance, shall be allocated to and when collected shall be paid into the funds of the respective taxing agencies as taxes by or for said taxing agencies on all other property are paid (for the purpose of allocating taxes levied by or for any taxing agency or agencies which did not include the territory of the Project on the effective date of such ordinance but to which such territory is annexed or otherwise included after such effective date, the assessment roll of the County of Santa Clara, last equalized on the effective date of said ordinance, shall be used in determining the assessed valuation of the taxable property in the Project on said effective date). Except as provided in subdivision 3, below, that portion of said levied taxes each year in excess of such amount shall be allocated to and when collected shall be paid into a special fund of the Agency to pay the principal of and interest on loans, moneys advanced to, or indebtedness (whether funded, refunded, assumed, or otherwise) incurred by the Agency to finance or refinance, in whole or in part, this Project. Unless and until the total assessed valuation of the taxable property in the Project exceeds the total assessed value of the taxable property in the Project as shown by the last equalized assessment roll referred to in subdivision 1 hereof, all of the taxes levied and collected upon the taxable property in the Project shall be paid into the funds of the respective taxing agencies as taxes on all other property are paid. That portion of the taxes in excess of the amount identified in subdivision 1, above, which are attributable to a tax rate levied by a taxing agency which was approved by the voters of the taxing agency on or after January 1, 1989, for the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0201005.PA:CK:gbd 17175.002.008/01/11102 Page 18 purpose of producing revenues in an amount sufficient to make annual repayments of the principal of, and the interest on, any bonded indebtedness for the acquisition or improvement of real property shall be allocated to, and when collected shall be paid into, the fund of that taxing agency. The portion of taxes mentioned in subdivision 2, above, are hereby irrevocably pledged for the payment of the principal of and interest on the advance of moneys, or making of loans or the incurring Of any indebtedness (whether funded, refunded, assumed, or Otherwise) by the Agency to finance or refinance the Project, in whole or in part. The Agency is authorized to make such pledges as to specific advances, loans, and indebtedness as appropriate in carrying out the Project. The Agency is authorized to issue bonds from time to time, if it deems appropriate to do so, in order to finance all or any part of .the Project. Neither the members of the Agency nor any persons executing the bonds are liable personally on the bonds by reason of their issuance. The bonds and other obligations of the Agency are not a debt of the City of the state, nor are any of its political subdivisions liable for them, nor in any event shall the bonds or obligations by payable out of any funds or properties other than those of the Agency, and such bonds and other obligations shall so state on their face. The bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. The amount of bonded indebtedness to be repaid in whole or in part from the allocation of taxes described in subdivision 2 above which can be outstanding at any one time shall not exceed seven million, five hundred and twenty thousand dollars ($7,520,000). The Agency shall not establish or incur loans, advances, or indebtedness to finance in whole or in part the Project beyond twenty (20) years from the date of adoption of this Plan. Loans, advances, or indebtedness may be repaid over a period of time beyond said time limit. This time limit shall not prevent the Agency from incurring debt to be paid from the Low and Moderate Income Housing Fund. Further, this time limit shall not prevent the Agency from incurring debt to be paid from the Low and Moderate Income Housing Fund. Further, this time shall not prevent the Agency from refinancing, refunding, or restructuring indebtedness after the time limit if the indebtedness is not increased and the time during which the indebtedness is to be repaid is not extended beyond the time limit for repaying indebtedness set forth immediately below in this Section 502. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO2OIOO5.PA:CK:gbd 17175.002.008/01/11/O2 Page19 The Agency shall not receive, and shall not repay loans, advances, or other indebtedness to be paid with the proceeds of property taxes from the Project Area pursuant to Section 33670 of the Community Redevelopment Law and this Section 502 beyond forty-five (45) years from the date of adoption of this Plan. C.~. [§503] Other Loans and Grants Any other loans, grants, guarantees, or financial assistance from the United S{ates, the State of California, or any other public or private source will be utilized if available. VI. [§600] ACTIONS BY THE CITY The City shall aid and cooperate with the Agency in carrying out this Plan shall take all actions necessary to ensure the continued fulfillment of the purposes of this Plan and to prevent the recurrence or spread in the area of conditions causing blight. Actions by the City shall include, but not Be limited to, the following: Institution and completion of proceedings for opening, closing, vacating, widening, or changing the grades of streets, alleys, and other public rights-of- way and for other necessary modifications of the streets, the street layout, and other public rights-of way in the Project Area. Such action by the City shall include the requirement of abandonment, removal, and relocation by the public utility companies of their operations of public rights-of-way as appropriate to . carry out this Plan provided that nothing in this Plan shall be construed to require the cost of such abandonment, removal, and relocation to be borne by others than those legally required to bear such cost. Provision of advances, loans, or grants to the Agency or the expenditure of funds for. projects implementing this Plan as deemed approp~’iate by the City and to the extent funds are available therefore. Institution and completion of proceedings necessary for changes and improvements in private and publicly-owned public utilities within or affecting the Project Area. Revision of zoning (if necessary) within the Project Area to permit the land uses and development authorized by this Plan. Imposition wherever necessary (by conditional use permits or other means) of appropriate controls within the limits of this Plan upon parcels in the Project Area to ensure their proper development and use. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Page 20 PAO201005,PA:CK:gbd 17175.OO2.008K)1/11102 Provision for administrative enforcement of this Plan by the City after development. The City and the Agency shall develop and provide for enforcement of a program for continued maintenance by owners of all real property, both public and private, within the Project Area throughout the duration of this Plan. Performance of the above actions and of all other functions and services relating to public peace, health, safety, and physical development normally renderedin accordance with a schedule which will permit the redevelopment of the Project Area to be commenced and carried to completion without unnecessary delays. The undertaking and completing of any other proceedings necessary to carry out the Project. The forgoing actions to be taken by the City do not involve or constitute any commitment for financial outlays by the City unless specifically agreed to and authorized by the City. VII.[§700] ENFORCEMENT The administration and enforcement of this Plan, including the preparation and execution of any documents implementing this Plan, shall be performed by the Agency and/or the City. The proVisions of this Plan or other documents entered into pursuant to this Plan may also be enforbed by court litigation instituted by either the Agency or the City. Such remedies may include, but are not limited to specific performance, damages, reentry, injunctions, or any other remedies appropriate to the purposes of this Plan. In addition, any recorded provisions which are expressly for the benefit of owners of property in the Project Area may be enforced by such owners. VIII. [§800] DURATION OF THIS PLAN Except for the non-discrimination and non-segregation provisions which shall run in perpetuity, the provisions of this Plan shall be effective, and the provisions of other documents formulated pursuant to this Plan may be made effective, for thirty (30) years from the date of adoption of this Plan by the City Council; provided, however, that subject to the limitations set forth in Section 502 of this Plan, the Agency may issue bonds and incur obligations pursuant to this Plan which extend beyond the termination date, and in such event, this Plan shall continue in effect to the extent necessary to permit the full repayment of such bonds or other Redevelopment Plan for the Edgewood IRedevelopment Project Palo Alto Redevelopment Agency Page 21 PA0201005.PA:CK:gbd 17175.002.008/01/11/02 obligations. After the termination of this Plan, the Agency shall have no authority to act pursuant to this Plan except to pay previously incurred indebtedness and to enforce existing covenants or contracts. IX.[§900] PROCEDURE FOR AMENDMENT This Plan may be amended by means of the procedure established in Sections 33354.6 and/or 33450 et. seq. of the Community Redevelopment Law or by any other procedure hereafter established by law. Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA02010OS.PA:CK:gbd 17175.002.008/01 I11/02 Page 22 ATTACHMENT NO. 1 LEGAL DESCRIPTION OF THE PROJECT AREA BOUNDARIES The description of the land within Redeve!.opment Project Area No. 1 -Sep 10, 2001 All that certain real property situated in ~he City of Palo Alto, Cotmty of Santa Clara, and the State of California more particularly described as follows’ Parcel 1 Beginning at a point on the centerline of Edgewood Drive (N 1990154.4381 E 6089851.1248 pt#8181) which is North 00° 36’ 47" East 161 feet from the intersection of the centerlines of Edgewo~d Drive ¯ and ChanningAvenue (N 1989993.4473 E 6089849.40.25 pt# 8083) as shown on the Tract Map No. 1641 recorded in Bbok 66 Pages 10 .and 11 on December 16, 1955.in the Office of the o,,.,.unty ReC.~der; 2.Thence. South 89° 23’ l_3".Ea~{ 3~ feet.to the.easterly ~ight of ~ay line of Edgewood Drive (60.feet. wide) as shown on said Tract Map No. 1641; Thence along said easterly right of way line of said.Edgewood Drive, South 00° 36’ 47" West 110.00 feet to the begimaing of a tangent curve, concave northeasterly and having a radius, of 20 feet with a long chord of -.28.28 feet; 4~Thence along Saidcurve through a central angle of 90.0 an arc distance-of 31.42 feet to a line tangent also being on the northerly right of way line of Charming Avenue as shown on said Tract Map No. 1641; Thence along said northerly right of way. line of Channing Avenue, South 89° 23’ 13" East 65.00 feet to the beginning of a tangent curve, concave northwesterly and having a radius of 20 feet with a long chord of 28.28 feet; 8 Thence along said curve through a central angle of 90° an arc distance of 31.42 fe~t to a line tangent also being on the westerly right of way lind of West Bayshofe as shown on saidTract 1641; 7.Thence North 000 36’ 4~/’’ East 130.00 feet along the westerly right of Way of West Bayshore Road; Thence leaving the wegterly right of way of said West Bayshore Road South 89° 23’ 13’: Easel 46 feet (per right of way map 224-2101,003) to the easterly line of said West Bayshore Road (46 feet wide) as shown, on Page 1 of 6 file name; redev0 l,word The description of the land within Redevelopment Proj.ect Area No. 1 Sep 10, 2001 the map filed with the City of Pal, Alto Public Works Engineering office tiffed ~Division of Highways District IV - Relinquishment to the City of Pal, Alto No 22095" file number 224-2101:003;. ’10 Thence South 00° 36’ 47" West 369.00 feet along the easterly right of way line 0f West Bayshore Road to the beginning of a t~gent c.u_w, e, concave northwesterly and having a radius of 206.01 feet with a long chord Of 206.72 feet; .Thence along sald curve through a central angle of 60° 13" 37,2 an arc distance of 216.55 feet to a line tangent; 11.Thence South 60° 50’ 24" West 67.53 feet to the beginning of a tangent curve, concave, southeasterly and having a.radius of 194.01 feet with a long chord of 85.52 feet; " 12 13 .Thende along said curve thi:ough a central angle of 25° 27’ 51’? an arc distance of 86.22 feet to the beginning of a compound curve, concave easterly and having a radius of 19 feet with a long chord of 16.97 feet; .Thence along said cuvve through a central angle of 53s 03’ 29",an arc distance of 17.59 feet; 14 15 16 .-Thence leaving said easterly right of way of said West Bayshore Road- South 72° 19’ 12" West 63.00 feet; ,Thence Sou£h 17° 40’ 56" East 22.76 feet (22.70feet) to the beginning of a tangent curve, concave westerly and having a radius of 13,91 feet (14feet) with a long chord of i3.12 .feet; ,Thence along said curve through a central angle of 56° 17’ 33" an arc distance of 13.6.6 feet to the beginning of a compound curve, concave northwesterly and having a radius of 184.01 feet with a long cord of 71, l’0 ’feet; 17.Thence along said curve through a central angle of 22° i6’ 47" a~ arc distance of 71.55 feet to a line tangent; 18.Thence Soi~th 60° 53~ 24" West 202~32 feet; Tl~e description of the land within RedevelOpment Project A#ea No. !. - Sep 10, 2001 1.9.Thence South 18° 45’ 51" East 68.02 feet to the soUtherly right .of way of Embarcadero Road; 20.Thence along said soutt~erly right of way of Embarcadero Road as shown on Tract 282 reco.rded inBook 10 Pages.43 and 44., South 71° 14’ 09" West 24.50 feet to the beginning of a tangent curve, ’ concave southeasterly and having a radius of 15 feet with a long chord of 21.21 feet; 21 .Thence along said curve through a central, angle, of 90° an arc distance of 23.56 feet to a line ’~angent; 22 .Thence along the easterly right of way of St. Francis Drive (6.0 feet wide) as shown on said-Tract Map No. 282, South 18° 45’ 51" East 75.00 feet; 23.Thence leaving said easterly !~igh.t of way of said St. Fr~cis Drive South 71° 14’ 09 West 60 feet to the westerly right.of way of said St Francis Drive; 24.Thence northerly along said westerly right of way of St Francls Drive. North 18° 45’ 51" West 75 feet to the beginning of tangent curve, concave southwesterly and having a radius ofl.5 feet with a long chord of2l ~21 feet; 25.Thence along said curve through a central angle of 90° an.arc distance of 23.56 feet to a line tangent als0 being On the southerly right of waY of Embm’cadero Road as shown on said Tract Map No. 282; 26 27 28 .Thence along.the southerly right of way of said .Embarcadero Road South 71° 14’. 09" West 130.86 feet; .Thence leaving said the southerly right of way of said Embarcadero Road North 1-8° 45’ 51" West .88.00 feet to the northerly right.ofwap line of Embarcadero Road as shown on the said Tract Map No~ 1641; ,Thence easterly long the said northerly right of vcay of Embarcadero Road as shown on Tract Map NO, 1641 recorded in Bool~ 66 Pages 10 and 11, North 71° 14’ 09" East 169.81 feet to the beginning of a tangent The description of the land within Rede-celopment Project Area No. 1 - Sep 10, 2001 curve, concave northwesterly and .having a radius of 20 feet with.a long chord of 23.07 feet;. ’ 29.Thence along said curve througha central angle of 70° 25’ 44" an arc ’ distance of 24,58 feet to a line tangent also being the westerly fight of way !ine of St. Francis Drive (62 feet wide) as shown on said Tract Map 3o.Thence along the westerly right of way line of said St. Francis Drive North 00° 48’ 25" East 433.85 feet to the beginning of a tangent curve, concave southerly and having a radius of 20 feet ¯with a long chord 29.77 feet; 31.Thence along said curve t.hrough a central, angle of.96° 10" 21" an arc distance of 33.57 feet to the beginning of a tangent reverse curve, doncave northerly and having a radius 166.00 t’eet with a long chord 17.87 feet, point also being the southerly right.of way line of Channing- Avenue (62 feet wide) as shownon Tract Map No. 1641; 32. Thence along the southerly right of way line said Channing Avenue, along said curve ~hrough a centrhl angle of 6° 10’ 21" anarc distance of 17.. 88 feet to a line tangent; 33.Thence along said southerly right of way line of said Channing Avenue North 89° 11’ 35" West 60 feels; 34.Thence leaving said southerly right of way line of Cham~g Avenue North 00° 48’ 25" East 62 feet to the northerly right of way line.of Channing Avenue (62 feet wide) as shown on said Tract Map No. 1641; 35.Thence along said northerly-right of way of said Channing Avenue South 89° 11’ 35" East 60 feet to the beginnm_g of a.taiigent curve, concave northerly and having a radius of 104 feet with a long chdrd of 83.77 feet ; 36.Thence along said curve through a central angle of 47° .30’ 00" a~ arc distance of 86.22 feet to a line tangent; ’The description of the land within Redevelopment Project Area No. 1 : Sep 10, 2001 .37.Thence North 43° 18’ 25" East .95.16 feet to the beginning of a tangent curv~, concave westerly and having a radius of 20 feetwith a long chord of 23.08 feet; 38 39 40 .Thence along said curve through a central angle Of 70° 29’ 48" an arc distance of 24.61 feet to the begi.rming of reverse curve, concave northeasterly and having a radius of 132.76 feet with a long chord of 63.79 feet to a point on the westerly right.of way line of Sandalwood Court as shown on said Tract Map No. 1641; .Thence along said curve through a central angIe of 27° 48’ 10" an arc distance of 64.42 feet to a line tangent; .. .Thence leaving said westerly line of said Sandalwood Court South 89° 23’ i3" East 50.00 feet tothe easterly right of way of said Sandalwood Court and the beginning of a non-tangent &urve; concave easterly and having a radius of 82.76 feet with a long chord of 10.42 feet and a ~adial bearing of North 89° 23’ 13" West; 41 42 .Thence along said Curve through a centre/1 angle 7° 12’ 58". an arc .distance Of 10:42 feet to the beginning of a compound curve, concave northeasterly and having a radius of 20 feet with a long chord of 32.76 feet;. .Thence along said curve through a central angle of 109° 59’ 34" an arc distance of 38.39 fe~t to the beginning of a tangent reverse curve, concave southerly and having a radius of. 153.87 feet with a 10ng chord of 72.39 feet, said point also being on the northerly right of way line of Channing Avenue; 43.Thence along said curve through a central angle of 27 o 12’ 32" an arc -distance of 73.07 feet to line tangent; 44.Thence South 89° 23’. 13" East 105.00 feet to the beginning of a tangent curve, concave northwesterly and having a radius of 20 feet witha long chord of 28.28 feet; Thg description of the land within Redevelopment Project Arek No. 1 - Sep !0, 2001 45.Thence al6ng said curve through a central angle 90° an arc distance of 31.42feet to aline tangent, also being on the Westerly right of way line of Edgewood Drive (60 feet wide) as shown on said Tract Map No 1641; 46.Thence. along said westerly right of way line of said Edgewood Drive, North 00° 36’ 47".East 110.00 feet; 47.Thence leaving said westerly right of way line of said Edgewood Drive South 89° 23’ 13 East 30 fe6t to the POINT OF BEGINNING; Said described lands contain 344,829. square feet ( 7.92 acres) more or less. Requested by: Bill Fellman Checked by; Jay E. Remley, Sr. Checked by: James.T. Bourquin Approved / Created By: James David Kiehl LS 7152 Notes / References/Index: A. ( )Tract No. t641 Book 66 Page 10 and 11, December 16, 1955 B. [ ] Tract No.282 Book 10 Page 43 and 44, April -26, I946 C.. { } Right.gf Way Map Record Map File No 224-2101-014 and 224-2101- " 003, February 1959.-On file with Public Works Engineering, City of Palo Altol D.Record of Survey Book 663 page 26 - 29, March 1, 1995 E.Values shown to the accuracy as stated on record and filed maps. F.Basis ofBear~g is North 00° 48’ 25" East along the Centerline of St. Francis Drive as cent6rline is shown on said Tract.No. t641 Assessors ParcelNumber 003:018~016 003-018-021 003-018-022 003-018-023 TkleRepo~ OrderNumber 26335953 26335954 26335955 26335956 D~e May17,2001 May17,2001 May17,2001 May17, 2001 BLOCK 2 Za# 34 / / //~////// II//I/f //.///’/~ ///// /// // / ///////// //// //// //// ///~// ////// ///// ///// //// BLOC~ 3 ///// ////// //~//// //////// /////// /// ~///// //// i~/// "//,///~,////// ,///1/// ////////// ////////// / /’/ / / / / / / / / /////////// ////////// ///////// ////f/// //11/ Lot 23 -014 £. ATTACHMENT NO. 2 PROJECT AREA MAP Wildwood Lane Saint Francis Drive Sandalwood Ct. ATTACHMENT NO. 3 REDEVELOPMENT LAND USE MAP Wildwood Lane Saint Francis Drive Bayshore Road West Edgewood Dr. ATTACHMENT NO. 4 PROPOSED PUBLIC IMPROVEMENTS ATTACHMENT NO. 4 PROPOSED PUBLIC IMPROVEMENTS The following public improvements are anticipated to be provided in the Project Area. The public improvements identified below may not all be implemented by the City through tax increment financing. Streets and Roadways ¯Reconstruct existing curbs, gutters and sidewalks on site, install where there are none, address Americans with Disabilities Act improvements necessary for access and circulation. ¯Reduce width of Embarcadero Road in this area to slow traffic exiting from Highway 101 off-ramp at Embarcadero Road ¯Modify southbound 101 exit off-ramp so it meets Embarcadero Road at about a right angle for slow turnsinto Palo Alto ¯Consolidate access to Edgewood Center and surrounding businesses ¯Address circulation issues involving many entry/exit points including St. Francis, Shell gas station driveways, West Bayshore Road and Highway 101 - off-ramp and Frontage Road ¯Work with Caltrans and other stakeholders to address noise issues from Highway 101 at Embarcadero Road ¯Add traffic lights, other improvements to address traffic flow Water, Sewer, Gas Flood Control and Hazardous Materials Mitigation ¯Increase size of water mains to address increased capacity at the site, and if necessary for adequate fire flow ¯Upgrade other utilities as necessary ¯Improve storm drain capacity and flow, if necessary ¯Provide flood control improvements to prevent future site flooding and building damage in accordance with the Federal Emergency Management Agency (FEMA) standards including as necessary raising the site elevation above the flood plain ¯Assist as necessary in mitigating soil and groundwater contamination Parking Facilities ¯Increase on site parking at the site Streetscape, Signage and Street Lighting ¯Improve street lighting at Edgewood and near the center ¯Improve visibility and signage at the center which will also identify the location as a gateway to the neighborhood and city ¯Underground utilities ¯Add open space green space for residents and businesses ¯Work with the Valley Transportation Authority (VTA) to address transportation, shelter needs for commuters, and other public transportation improvements Attachment 2 PRELIMINARY REPORT for the ADOPTION OF THE REDEVELOPMENT PLAN ..for the EDGEWOOD REDEVELOPMENT PROJECT AREA Prepared for: PALO ALTO REDEVELOPMENT AGENCY FEBRUARY 2002 Prepared by: Keyser Marston Associates, Inc. PRELIMINARY REPORT for the ADOPTION OF THE REDEVELOPMENT PLAN for the EDGEWOOD REDEVELOPMENT PROJECT AREA Prepared for:- PALO ALTO REDEVELOPMENT AGENCY FEBRUARY 20O2 Prepared by: Keyser Marston Associates, Inc. PRELIMINARY REPORT for the ADOPTION OF THE REDEVELOPMENT PLAN for the EDGEWOOD REDEVELOPMENT PROJECT AREA Prepared for: PALO ALTO REDEVELOPMENT AGENCY FEBRUARY 2002 Prepared by: Keyser Marston Associates, Inc. 500 South Grand Avenue, Suite 1480 Los Angeles, California 90071 1660 Hotel Circle North, Suite 716 San Diego, California 92108 Golden Gateway Commons 55 Pacific Avenue Mall San Francisco, California 94111 TABLE OF CONTENTS I.INTRODUCTION ........................................................................................." ...........................................1 II. REASONS FOR SELECTION OF THE PROJECT AREA ....................................................................4 A. BACKGROUND ..................................................................................................................................~ B. CITY OBJECTIVES AND THE NEED FOR REDEVELOPMENT .......................................................4 III. EXISTING PHYSICAL AND ECONOMIC CONDITIONS IN THE PROJECT AREA ............................8 BLIGHTED AREA ................................................................................................................................8 1. Urbanization Status of the Project Area ........................................................................................8 2. Blighting Characteristics .................................................................................................................11 SOURCES AND METHODOLOGY ...............................................P. ..................................................12 PHYSICAL CONDITIONS THAT CAUSE BLIGHT ...........................................................................12 1. Factors that Prevent or Substantially Hinder the Economically Viable Use or Capacity of Buildings or Lots. This Condition Can be Caused by a Substandard Design, Inadequate Size Given Present Market Conditions, Lack of Parking, or Similar Factors ......................................................................12 a. Substandard Design ................................................................................................................12 i, Definition ...................................................................................................................................12 ii. Shopping Center Orientation and Layout ................................................................................13 iii. Tenant Space Layout .............................................................................................................15 iv. Shopping Center Size Requirements ....................................................................................18 v. Tenant Space Size Requirements ..........................................................................................21 w. Parking and Vehicle Circulation .............................................................................................23 vii. Edgewood Access ................................................................................................................26 viii. Pedestrian Access ................................................................................................................27 2. The Existence of Subdivided Lots of Irregular Form and Shape and Inadequate Size for Proper Usefulness and Development That are in Multiple Ownership ...........................................................28 a. Definition .....................................................................................................................................28 b. Edgewood ...................................................................................................................................28 c. Comparison Centers .............................................................................: .....................................28 ECONOMIC CONDITIONS THAT CAUSE BLIGHT .........................................................................29 1. Depreciated or Stagnant Property Values or Impaired Investments, Included but Not Limited to, Those Properties Containing Hazardous Wastes That Require the Use of Agency Authority ........... 29 a. Stagnant Property Values ............................................................ ...............................................29 b. Decline in Retail Sales ............................~ ........................................i ..........................................31 c. Low Grocery Store Sales Volume ..............................................................................................33 2. Abnormally High Business Vacancies, Abnormally Low Lease Rates, High Turnover Rates, Abandoned Buildings, or Excessive Vacant Lots Within an Area Developed for Urban Use and Served by Utilities ................................................................................................................................35 3. A High Crime Rate That Constitutes a Serious Threat to the Public Safety and Welfare ...............37 INFRASTRUCTURE DEFICIENCIES - FLOOD CONTROL ............................................................39 SUMMARY OF BLIGHTING CONDITIONS .......................................................................................41 LACK OF PROPER UTILIZATION ............................................... .....................................................46 BURDEN ON THE COMMUNITY ......................................................................................................46 INABILITY OF PRIVATE SECTOR TO REDEVELOP PROJECT AREA - WITHOUT AGENCY ASSISTANCE ............................................................. ..................." ....................................................47 F. G. H. I. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page I PA0202007.PA:CK:gbd 17175.002.005/02/19/02 J.’NEED FOR TAX INCREMENT FINANCING .....................................................................................50 IV. DESCRIPTION OF THE SPECIFIC PROJECTS PROPOSED BY THE AGENCY AND HOW THE PROJECTS WILL IMPROVE OR ALLEVIATE THE CONDITIONS DESCRIBED IN PART III ..........51 REQUIREMENT AND APPROACH ..........................................................................: ................~1 .....51 PROPOSED PROJECT, REDEVELOPMENT PROGRAMS, AND RELATION TO BLIGHT ELIMINATION ....................................................................................................................................51 1. Proposed Project ............................................................................~ ....................: .......................51 2. Redevelopment Program ......................: .......................................................................................52 a. Targeted Public Improvements ................................................................................................52 i.Land Assembly, Demolition and Relocation ................................: ........................................52 ii.Flood Control Improvements ................................................................................................53 iii.Improved Visibility and Signage ...........................................................................................53 iv.Other Capital Improvements .................................................................................................53 b.Discretionary Improvements ............: ........................................................................................54 Capital Improvements ............................................................................................................54 Owner Participation ..............................................................................................................54 Business Attraction and Retention .......................................................................................55 Commercial Rehabilitation ................................: ...................................................................55 Affordable Housing .................................................................................................................55 Residential Rehabilitation .....................................................................................................55 Affordable For Sale Housing ................................................................................................56 PRELIMINARY ASSESSMENT OF THE PROPOSED METHOD OF FINANCING, ECONOMIC FEASIBILITY, AND REASONS FOR INCLUDING DIVISION OF.THESE PURSUANT TO SECTION 33670 ....................................................................................................................................................57 A. ASSESSMENT OF THE PROPOSED METHOD OF FINANCING THE REDEVELOPMENT OF THE PROJECT AREA .......................................................................................................................57 B. ESTIMATED TOTAL PROJECT COSTS ..........................................................................................57 1. Affordable Housing Program ..........................................................................................................58 2. Administration .................................................................................................................................58 3. Net Debt Service Cost - Tax Allocation Bonds/Other Debt ....................................." .......................59 4. Net Debt Service Cost - Other Loans .............................................................................................59 C. FINANCING METHODS AVAILABLE TO THE AGENCY .................................................................59 1.Tax Increment Revenues ............................................................................................................60 2.Proceeds from Bonds..: .......... ..............................i .......................................................................61 3.Loans, Grants and Contributions .................................................................................................61 D. PROPOSED FINANCING METHOD, ECONOMIC FEASIBILITY, AND REASONS FOR INCLUDING TAX INCREMENT FINANCING ...................................................................................61 E. INDEBTEDNESS LIMIT .....................................................................................................................62 APPENDIX A: NEIGHBORHOOD CENTERS SURVEY APPENDIX B: PHOTOGRAPHS OF EDGEWOOD Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA020200~.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page II PALO ALTO - EDGEWOOD List of Figures Figure 1: Edgewood Project Area ......................................................................................................2 Figure 2: Aerial View of Edgewood .......................................................................... .........................3 Figure 3: Edgewood Parcel Size, Building Size, and Ownership ....................................................10 Figure 4: Typical Floor Plan for "L" Shaped Neighborhood Center .................................................14 Figure 5: Prototypical Tenant Space Dimensions ..............: ..............................................................16 Figure 6: Edgewood Layout and Shop Dimensions .........................................................................17 Figure 7: Vehicle and Pedestrian Circulation ...................................................................................25 Figure 8: Area Subject to Flooding ...................................................................................................40 Figure 9: Composite Blight Map .......................................................................................................44 List of Tables Table 1: Organization of the Preliminary Report ................................................................................1 Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11 : Edgewood Characteristics ....................................................................................................5 Urbanization Analys~s ...........................................................................................................9 ULI Neighborhood Shopping Center Size Comparison ............................................:...,...... 19 Comparable Shopping Center Rank~ngs ............................................................................20 Tenant Space Size Standards by Use Type ......................................................................22 Assessed Value Trends for Palo Alto Neighborhood Shopping Centers - (1995-2000)_.30 Taxable Sales Figures at Palo Alto Neighborhood Shopping Centers- (1989-1999) .......32 Supermarket Survey Profile ...............................................................................................34 Lease Rates for Comparable Shopping Centers ..............................................................36 Part I Crimes Edgewood and City of Palo Alto (1993- 2000) .........................................38 Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007. PA:CK: gbd 17175.002,005/02/19/02 Keyser Marston Associates, Inc. Page II Table 12: Summary of Blighting Conditions ..............................................’ .......................................42 Table 13: Table t 4: Table 15: Table 16: Table 17: Table 18: Feasibility Cash Flow - Project Fund ................................................................................63 Public Improvements and Programs ........................................................................~ .......66 Feasibility Cash Flow- Housing Fund .............................................................................69 Tax Increment Revenue Projection ...................................................................................72 Real Property Value Added ..............................................................................................73 Personal Property Value Added ................................................................................i ....1.77 Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page IV INTRODUCTION The Preliminary Report (the "report") for adoption of the Redevelopment Plan (the "Plan") for the Edgewood Redevelopment Project Area (the "Project") has been prepared for the Palo Alto Redevelopment Agency (the "Agency") to fulfill the requirements of Section 33344.5 of the California Community Redevelopmen,t Law (Health and Safety Code Section 33000 et seq. or the "CRL"). The area proposed for inclusion within the Project consists of the Edgewood Shopping Center (the "Project Area" or "Edgewood") located at the northwest corner of the Highway 101 and Embarcadero Road (see Figure 1). The Project Area consists of approximately eight acres (7.92 acres). An aerial view of the Project Area is shown on Figure 2. As part of the process of adopting a redevelopment plan, the CRL requires that specific information be provided to taxing agencies and officials (the "affected taxing entities") prior to adoption of the plan. Such information includes, but is not limited to, the reasons for adopting the redevelopment plan, a description of existing conditions in the project area, and a preliminary assessment of the proposed method of financing the redevelopment of the Project. This report contains the above information, and other required information per Section 33344.5 of the CRL in sections as outlined below in Table 1. Table 1: Organization of the Preliminary Report 33344.5(a). 33344.5(b). 33344.5(c). 33344,5(d). The reasons for selection of the Project Area. A description of the physical and economic blighting conditions in the Project Area. A description of the Project Area that is sufficiently detailed for a determination as to whether the Project Area is predominantly urbanized. A preliminary assessment of the proposed method of financing the redevelopment of the Project Area, including an assessment of the economic feasibility of the Project and the reasons for including a provision for the division of taxes pursuant to Section 33670 in the Redevelopment Plan. Section II Section III Section III Section V 33344.5(e).A description of the specific projects and programs proposed by the Agency.Section IV 33344.5(f).A descript’ion of how the project~ and programs to be pursued by the Agency in the Section V Project Area will improve or alleviate the blighting conditions described in 33344.5(b). Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 1 ~soAk pgo~! .I I 1 / ©© I1.REASONS FOR SELECTION OF ]’HE PROJECT AREA A. BACKGROUND Edgewood, originally called the "Embar.c.adero Shopping Center" was developed in the mid-1950s. The shopping center was designed as a neighborhood-serving center and was anchored by a supermarket (Lucky), drugstore, and professional office building. The shopping center included 248 parking spaces plus 23 spaces for the office building. The shopping center is developed on 4.49 acres and consists of four parcels under four separate ownerships. The remaining 3.4 acres of the 7.92-acre Project Area consists of public rights-of-way. There are five separate buildings (gas station, professional office space, two separate strip shopping center buildings and a supermarket) totaling 48,512 square feet. Table 2 provides a breakdown of the building sizes and the gross leasable area (GLA) for each of the 13 tenants. The GLA for Edgewood is 47,593. Edgewood is part of an adjoining residential subdivision, referred to as the "Embarcadero-Wildwood Annexation". The developer of the center, Eichler, included in the deed, conditions, covenants and restrictions ("CC&R’s"), a provision that the residents of the subdivision be given approval over any proposal to change in use in the center from retail to non-retail, such as developing housing on the site. Although the center was developed approximately 50 years ago, the only known or approved changes to the center have been a small addition to the supermarket in 1970, the reconstruction of the gas station in 1986, the installation of two free standing signs for the Shell station in 1995 and 1996 and annex to the Maharishi Vedic School, for which the construction date is unknown. B.CITY OBJECTIVES AND THE NEED FOR REDEVELOPMENT Edgewood is one of four neighborhood centers in Palo Alto (the "city"). The other three include Midtown, Alma Plaza, and Charleston. As described in the Land Use and Community Design Element of the Palo Alto Comprehensive Plan, one of the objectives of the Comprehensive Plan is to increase the economic competitiveness and vitality of these centers. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/" 02/19/02 Keyser Marston Associates, Inc. Page 4 Table 2: Edgewood Characteristics 003018016 003018021 003018022 003018023 .35 acres ~15,246 sq.ft. 1.67 acres ,72,745 sq.ft. .57 acres 24,829 sq.ft. 1.9 acres 82,764 sq.ft. 6x22 and 7x20 132 and 140 3 1957 (272 combined) 95x154 17,500 6 1956 72x175 12,600 3 1959 70x110 and 7,700 and 90x116 10,440 (18,140 combined)- Shell Oil 2~2’3 .... A!bertson’s 17,500 6 Professional office space 12,600 3 occupied by Maharishi Center 1956 BuildingA 40x40 1,600 Countryside Deli 1,556 4 23x70 1,610 House of Wigs 1,600 15x44 660 TEC Hair Care 650 15x44 660 Palo Alto Shoe Repair 640 47x66 3,102 El Jacalito Grill 3,0i5 4 4 4 4 S U BTOTAL 7,632 7,461 1956 Building B 29x90x49 4,410 Century Liquors 4,000 30x45 1,350 Quick Wash Laundry 1 ,350 4 4 30x45 1,350 Moon’s One Hour Cleaners 1,050 4 20x20 400 "African City Alive!5 37x90 3,330 Brothers ProdUce 3,360 4 SUBTOTAL 90x116 10,840 9,760 ~ Source: Metroscan parcel maps (FY 2000-01) 2 Dimensions are estimates only based on exterior survey. Therefore, in some instances, leaseable area may exceed gross area and the total building area and the sum of the tenant areas may not match. 3 Source: KMA Field survey, January 2002. 4 Based on leasable area provided by Ruegg & EIIsworth, Edgewood Plaza owners 5 African City Alive! is a subtenant of Century Liquors. 6 Source: Thompson Associates, Potential Sales Survey, June 1999. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 5 The city has been concerned about the loss of neighborhood retail uses and more specifically the decline of neighborhood centers. Neighborhood centers are viewed in Palo Alto as vital community areas that serve to promote walkable neighborhoods, reduce automobile dependence and provide public gathering places. Of the four neighborhood centers, Edgewood is the most deteriorated.and has experienced the greatest decline in retail sales. In response to the decline in retail uses citywide, the city hired The Sedway Group to prepare a retail strategy, for the retention and expansion of retail uses. In their study dated June 2000, The Sedway Group identified several barriers to revitalization of the center including crime, lack of visibility of the center (the center cannot be seen from Highway 101 and the Shell Station obscures visibility from Embarcadero Road), and a tenant mix that is neither complementary nor attractive to potential catalyst tenants. The Sedway Group identified four priorities for the center: Attract commercial tenants that will add vitality to the center, serve the community, attract a wider range of the market area’s demographic groups, and compliment the supermarket. ¯Identify a means of utilizing the lots more intensely and/or effectively. ¯Encourage the renovation and revitalization of the existing building, parking lot, and landscaping. ¯Improve the signage and visibility of the center. The Sedway Group study stated that the two obvious tenants that could attract shoppers to the center are a drugstore and video rental store. Itwas again stated that the ability to attract such key tenants is limited, given the current condition and performance of the center (retail sales are down 57 percent from $6.0 million in 1989 to $2.6 million in 1998). The high cost of land, demand for housing, and low return on neighborhood retail uses has resulted in a disincentive to rehabilitate the center. The varying interests of the owners further complicate this problem. Most of the owners want to maintain the existing uses and structures with some interest in expansion, butone of the major owners would like to see substantial redevelopment. More specifically, owners of Albertsons would like to maintain the store and possibly expand. The properties where the "shops" owners are located would like to demolish the shops and build single-family housing or possibly a mixed-use development. The owners of the Maharishi Vedic School expressed some desire to expand their facility at the present location, but are not closed to the possibility of moving to a new location. The owners of the Shell Oil station Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202OO7.PA:CK:gbd 17175.002.005/02J19/02 Keyser Marston Associates, Inc. Page 6 have not yet responded to the city’s attempt at contact, but it is anticipated that it is Shell’s intention to continue its current business. As stated above, to maintain a well-rounded community with the appropriate balance of residential and commercial uses, the Agency would like to assist in the retention of this neighborho~)d-serving center. Redevelopment Law provides different methods for assisting in the revitalization of deteriorated areas including, to name a few, assembling sites,, preparing sites for new development including demolition, and providing public improvements such as road closures, improved access, flood control improvements and new signage within the public right-of-way. These types of assistance will make the center more attractive to investors who might not otherwise consider reinvesting in the center or maintaining the retail component. The type of assistance that the Agency may ultimately provide will be dependent on the merits of the development proposals that are submitted to the Agency as well as the financial feasibility of the proposed developments and potential for long-term revitalization of the area, Preliminary Report for the Adoption of the Redevel.opment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 7 III.EXISTING PHYSICAL AND ECONOMIC CONDITIONS IN THE PROJECT AREA BLIGHTED AREA In order for an area to be included in a redevelopment project, it must be predom!.nately urbanized and have at least one or a combination of physical blighting conditions, and one or a combination of economic blighting conditions. The combination of the blighting conditions must be so prevalent and substantial that it causes a reduction or lack of proper utilization of an area to such an extent, that it constitutes a serious physical and economic burden on the community that could not be alleviated without redevelopment. 1. Urbanization Status of the Project Area Predominately urbanized means that not less than 80 percent of the land in the project area: ao Has been or is developed for urban uses; or Is characterized by lots of irregular shape and inadequate size under multiple ownership; or Is an integral part of one or more areas developed for urban uses, which are surrounded or substantially surrounded by parcels, which have been or are developed for urban uses. Furthermore, Section 33344.5(c) states that the Preliminary Report shall provide a description of the project area, which is sufficiently.detailed for a determination as to whether the project area is predominately urbanized. The description shall include at least the following Information: d° fo h° The total number of acres within the project area; The total number of acres that are characterized by parcels of irregular shape and inadequate size; The total number of acres in agricultural use; The total number of acres that is an integral part of area that is predominately urbanized; The percent of the property within the project area that is predominately urbanized, and; A map of the project area that identifies the properties described in a, b, and c above. (See Figures 2 and 3) Preliminary Repod for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Aito Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 8 The urbanization analysis is summarized in Table 3 below and is organized pursuant to CRL Section 33320.1(c). Table 3: Urbanization Analysis Total Number of Acres in the Project Area Acres 7.92 100.0% Total Number of Acres Characterized by the Existence of Subdivided Lots of rregular Form and Shape and Inadequate Size for Proper Usefulness and Development that are in Multiple Ownership 4.49 55% Total Number of Acres in Agricultural Use O% Total Number of Acres that is an Integral Part of an Area Developed for Urban Uses 7.92 100.0% Vacant Land o% Percent of Property that is Predominately Urbanized 7.92 100.0% The total number of acres in the Project Area was derived from the legal description prepared for the Project Area.. As described earlier, the Project Area is composed of four parcels under separate ownership ranging in size from .35 acres to 1.9 acres. As a group, the combined size of the Project Area is of adequate size for a neighborhood center. However, the Maharishi Vedic School is an educational use and not a retail use. When this use is removed from the total acreage, the center is below the standard size for a neighborhood center. Furthermore, the shopping center site is triangular in shape resulting from the diagonal direction of the Embarcadero Road. For these reasons all four parcels (totaling 4.49 acres) are considered inadequately .sized and irregularly shaped. Figure 3 shows parcel ownership and site size. The remaining 3.4 acres consists of public rights-of-way. As shown on the aerial map (Figure 2) the Project Area is completely surrounded by developed land including residential development to the north, south and west. To the east, the Project Area adjoins Highway 101. Furthermore, the shopping center and the City of Palo Alto in general, are a part of long established and urban area on the Bay peninsula. For these reasons the Project Area is considered an integral part of an urbanized area. All four parcels of land that compose the Project Area are developed with structures and with the exception of the Maharishi Vedic School include surface parking. There are no vacant parcels or unimproved areas within the Project Area or parcels that are in agricultural use. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 9 8 2. Blighting Characteristics The CRL defined blighting conditions are outlined below: Physical Blighting Characteristics Buildings in which it is unsafe or unhealthy for persons to live or work. Serious building code violations, dilapidation and deterioration, defective design or physical construction, faulty or inadequate utilities, or similar factors can cause these conditions: Factors that prevent or substantially hinder the economically viable use or capacity of buildings or lots. This condition can be caused by substandard design, inadequate building size given present standards and market conditions, lack of parking, or other similar factors. Adjacent or nearby uses that are incompatible with each other and which prevent the economic development of those parcels or other portions of the Project Area. The existence of subdivided lots of irregular form and shape and nadeq~Jate size for proper usefulness and development that are in multiple ownership, Economic Blighting Characteristics Depreciated or stagnant property values or impaired investments, including but not necessarily limited to, those properties containing hazardous wastes that require the use of agency authority. Abnormally high business vacancies, abnormally low lease rates, high turnover rates, abandoned buildings, or excessive vacant lots within an area developed for urban use and served by utilities.. A lack of necessary commercial facilities that are normally found in neighborhoods, including grocery stores, drug stores, and banks and other lending institutions. 4.Residential overcrowding or an excess of bars, liquor stores, or businesses that cater exclusively to adults that has led to problems of public safety and welfare. Preliminary Report for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 11 Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 5.A high crime rate that constitutes a serious threat to the public safety and welfare. ~ B.SOURCES AND METHODOLOGY The following discussion regarding blighting conditions within the Project Area is based, in part, on a field survey of the Project Area and comparable shopping centers within a five-mile radius of the center. Appendix A includes a description of the survey methodology and summary of findings. The five-mile radius was selected to achieve a large sample area and is not reflective of the service area of a neighborhood center which is generally accepted to be a three-mile radius.1 When appliCable, the characteristics of Edgewood and the neighborhood centers in the vicinity were compared to each other and to-the Urban Land Institute standards for contemporary neighborhood shopping centers.2 Secondary data sources related to characteristics and sales performance for the Edgewood and comparable neighborhood centers within the same market area were also consulted. Two of the primary sources included two recent market studies, the 1999 "City of Palo Alto Supermarket Distribution, Potential, and Food -at-Home Leakage Analysis..." prepared by Thompson Associates and the 2000 "Palo Alto Retail Strategy" prepared by The Sedway Group, are referenced in this analysis. Data sources also included interviews with retail leasing agents, review of city archival information on Edgewood, assessor data, and property transaction data. C. "PHYSICAL CONDITIONS THAT CAUSE BLIGHT Factors that Prevent or Substantially Hinder the Economically Viable Use .or Capacity of Buildings or Lots. This Condition Can be Caused by a Substandard Design, Inadequate Size Given Present Market Conditions, Lack of Parking, or Similar Factors. a. Substandard Design i. Definition The term "substandard design" refers to building or property conditions that do not provide for the needs of contemporary uses. These conditions prevent or substantially hinder the economically viable use of parcels, and contribute to i A 10-mile radius was selected for lease rate information only to provide a significant sampling of lease rates.2 The Urban Land Institute (ULI) is an independent, non-profit, education and research organization. Preliminary Repor~ for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 12 Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 obsolescence in facilities. In turn, these conditions discourage investment by property owners to modernize and improve their property. Age is frequently a factor that contributes to substandard design. Without expansion or modernization, older properties often become obsolete. When-there are older buildings that have not been maintained or modernized, this can indicate a lack of reinvestment within the area. ii. Shoppin,q Center Orientation and Layout ¯ndustry Standards The International Counci of Shopping Centers (ICSC), which publishes retail guidelines, statistics and trends, defines the basic layout of a neighborhood shopping center as one that is oriented around the anchor tenant(s), which must be positioned to draw shoppers between them and past other tenants.3 Centers are generally I-shaped orL-shaped, with the major tenants and shops oriented parallel to the adjacent streets for better visibility. The "1" shape ’Is used for smaller centers. Larger centers are arranged in an "L" shape to avoid walking distances between shops that are too long (typically up to 400 feet).4 The "U" shaped center (both ends turned at 90 degrees) is used for larger centers on larger sites. A typical example of an "L" shaped neighborhood center is shown on Figure 4. Freestanding (pad) buildings are also accommodated in centers. These buildings are suited to stores that require nearby parking, quick turnover and fast customer service. They are generally placed as close to the street as possible and away from the areas of parking influence of the anchor tenants. The building(s) in a center are typically tied together by a canopy over the sidewalk that runs along the front of the stores. The design theme of a center is often most clearly defined by the design of the canopy and supporting columns. The signage for the shops is located along the canopy. Most centers will have design requirements and size limitations for the canopy signage to make the center more attractive and uniform in appearance. 3 Shopping Center Development Han~lbook (Washington D.C: Urban Land Institute, 1993), page 97. 4 Shopping Center Development Handbook, ULI, 1999, page 100 Preliminary Report for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 13 Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Figure 4: Typical Floor Plan for "L" Shaped Neighborhood Center LOADING/SERVICE AREA MAJOR/ANCHOR TENANT DOUBLE ~OADED BAYS ’ t PARKING- -- PARKING BAY SPACING I SINGLE LOADED BAY 2~ t MAJOR/ANCHOR TENANT Source: MCG Architects ¯Edgewood Edgewood follows the prototype for neighborhood shopping centers in that it is an "L" shape, is anchored by a major tenant (Albertsons) and incorporates a freestanding pad for a high-volume use (Shell gas station). However, there are critical elements of the design that are not typical of a neighborhood shopping center and which contributes to the dysfunction and declining sales at Edgewood. First, the prototypical neighborhood center positions the buildings to the far edge of the site with parking .at the intersection of the "L". Edgewood "floats" on the site with parking on all sides. This configuration might work if access and visibility from commercial streets were provided equally on all sides, but this is not the case at Edgewood. The primary orientation of Edgewood is to Embarcadero Road, with secondary access provided by Saint Francis Drive and additional access provided from Channing Avenue. Although the primary access is from Embarcadero Road, only four tenants within the shopping center (excluding the gas station and Maharishi Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 14 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Vedic School) front onto the parking lot that is visible from Embarcadero Road (A.Ibertsons, Brothers Produce, Moon’s Cleaners and.Century Liquors). With the exception of the House of Wigs, which is oriented to Channing Avenue with access from a pedestrian walk and El Jacalito Grill which is also accessed from a pedestrian walk, the remaining uses (TEC Hair Care, Palo Alto Shoe Repair, African City Alive! and Quick Wash Laundry) are oriented towards Saint Francis Drive. Only those uses that front on Embarcadero Road have any visibility from a major collector road, and as a result, the other uses do not have the advantage of attracting potential customers driving by the center. The House of Wigs is at a particular disadvantage because it is visually isolated from the other uses and is only visible from the rear of the center. Poor visibility affects patronage, which in turn, reduces retail sales. Given the close proximity to Highway 101, the natural assumption is that the center would be visible from the highway. However, a large stand of trees that borders the center obscures the view of the center from the highway. The visibility of the center from its primary access along Embarcadero Road is obscured by the Shell gas station. Additional or improved sign.age that is visible from Embarcadero Road would help to compensate for the center’s p.oor visibility. iii. Tenant Space Layout ¯Industry Standards The desired layout for tenant spaces is to provide primary entrances and exits at the front of the store, with delivery/loading areas at the rear or on one side, depending upon the site. The goal is to keep loading activities separated from the main entrances and customer c~rculation. Delivery trucks have large turning radii, often requiring that significant area be devoted to truck circulation. Figure 5 shows the prototypical tenant space layout for a commercial use. Tenants generally prefer rectangular spaces with the shop space in the corner of an L- shaped center considered the least desirable since it has the least visibility. Preliminary Repor~ for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 15 Figure 5: Prototypical Tenant Space Dimensions 60’ Typ. Min. TYP. RESTROOM L I 80’ - 120’ Typical ¯Edgewood The Edgewood shops Consist of two buildings of generally the same size totaling 18,140 square feet or more specifically two buildings of 10,440 and 7,700 square feet. One ofthe buildings is approximately 116 feet in length by 90 feet in width, while the other building has a width of 70 feet and a length of 110 feet. Only the Century Liquor Store and Brothers Produce occupy spaces that include the entire width of the building and have store depths of 90 feet. The remaining tenants occupy spaces that are between approximately 20 feet (African City Alive!) and 70 feet (House of Wigs) in length. As described above, a 60-foot long tenant space is considered the minimum depth for a retail tenant space in a neighborhood shopping center with 80 to 120 feet considered typical. Therefore, a portion of the tenants, which occupy approximately 17 percent of the leasable area of the shops, are in spaces that have less than the minimum depth of a standard tenant space. Furthermore, approximately 30 percent of tenant spaces are below the low end for depth of a typical tenant space as shown in Figure 5. This is a blighting issue because the small size o,f the spaces limits the type of tenants that can be accommodated at the center, Figure 6 provides the dimension of the shopping center buildings. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 16 -! iv. Shopping Center Size Requirements ¯Industry Standard Based on standards as published in the ICSC, contemporary neighborhood shopping centers are typically built on three to’15 acre sites with a building area ranging from 30,000 to 150,000 square feet.5 Edgewood is developed on a 4.49- acre site and has a total building area of 48,512 square feet and therefore is at the low end of the acceptable range for a neighborhood retail center. Furthermore, the leasable retail area is below the low end of the range for neighborhood centers. The leasable floor area for the Edgewood amounts to approximately 47,593. However, included within the total building area is the 12,600 square foot Maharishi Vedic School, which is not a retail use and does not contribute to the performance of the center. Therefore, the actual retail floor area is approximately 34,993 square feet. ¯Edgewood As shown in Table 4, Edgewood has a significantly lower square footage than the averageand median square footage for shopping centers in the United States. This is also true when reviewing size standards for neighborhood centers in the western region of the Country, and for shopping centers over 20 years old. As an example, Edgewood, excluding the Maharishi Vedic School, has 44 percent less retail square footage then the average shopping center in the United States. Surprisingly, Edgewood has less retail space (43 percent less) than the average shopping centers that are over 20 years old. The percentages are similar for the median squai-e footage shown in Table 4, As shown in Table 4, Edgewood is six percent below the low end for square footage of retail space for a shopping center in the United States while the upper end shopping centers are 158 percent larger than Edgewood. The percentages are similar for comparisons with shopping centers in the western region and for centers over 20 years old. 5 ICSC website, ICSC shopping center definition, 1999. Neighborhood Centers range in size from 30,000 to 150,000 sq. ft. developed on 3 to 15 acre sites. They include one or more anchor supermarkets. The anchor ratio is 30 to 50% and the primary trade area is 3 miles. Preliminary Report for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 18 Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Table 4: ULI Neighborhood Shopping Center Size Comparison Center Standard Edgewood Average Sq, Ft, NA Median Sq. Ft: NA Lower ~ ¯ Sq. Ft: .... NA Upper NA Actual 48,512 35,912 (w/out Maharishi) US ,63,734 62,531 38,038 92,784 NA Western Region 64,765 67,160 36,513 93,875 NA Centers 20 years 62,634 61,645 37,272 93,495 NA and older Source: Dollars and Cents of Shopping Centers; Urban Land Institute 2002, pgs. 201,206, and 213. ¯Comparable Shopping Centers As described above, Edgewood falls shod when compared to neighborhood centers nationally and to the standards as reported by ICSC and ULI. Table 5 summarizes the findings of the survey of comparable centers within a five-mile radius of Edgewood and indicates Edgewood’s ranking in the major categories. When comparing Edgewood to other comparable neighborhood centers in the vicinity, Edgewood would seem to be one of the larger centers. However, all of these centers only have retail uses. When the Maharishi Vedic School is excluded from the total, only one of the eight centers has less I~asable retail space. This is relevant because part of the success of a neighborhood.centeris the ability to attract patrons based on a variety of uses. The fewer the uses, the less opportunity there is for cross marketing. The lack of leasable retail area makes Edgewood less desirable. Edgewood does not have sufficient retail area to house the range of retail and service tenants to reach a critical mass of uses to adequately attract patrons. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 19 C C C C 9,0 v. Tenant Space Size Requirements -, ¯Industry Standard The Urban Land Institute gathers information nationally on tenant size standards for uses in neighborhood center tenants. This information is organized in three categories "Lower Decile, Median Decile and Upper Decile". Median Decile would reflect the norm with lower and upper Signifying the ends of the spectrum. ¯Edgewood As mentioned earlier, the predominance of small tenant spaces limits the range of tenants that can be accommodated at the center and therefore the viability of the Edgewood. As shown in Table 6, three of the 12 retail shops (Maharishi Vedic School excluded) are occupying spaces that are below the lower end of spectrum ("Below Lower Decile") for the use type and three are occupying space below the average ("Median Decile"). Specifically, African City Alive!, which is a subtenant of Century Liquor is in a very small space for even the low end of its group type. It is 85 percent below the desired median square footage for an Arts and Crafts store. The three stores that are above the lower end but lower than the median include Moon’s One-Hour Cleaners, African City Alive! and Shell Oil. Moon’s One-Hour Cleaners is 10 percent below the desired median square ¯ footage, African City Alive! is 85 percent below, and Shell Oil is 86 percent below the upper decile square footage (excluding pumps). When aggregating the tenant space on a square foot basis, the combined tenant space at Edgewood (36,244 square feet) is actually lower than the national median of 5,701 square feet for like uses by approximately 35 percent and significantly lower than the cumulative total for higher end space averaging 71,903 square feet by 50 percent. In a competitive market, the goal is not to achieve the average or median but to exceed the base standard, thereby attracting a broader if not higher end range of tenants. Because Albertsons is the largest use and anchor, its size deficiency is worth specific note. The Aibertsons grocery store is approximately 17,500 square feet, which is small for supermarkets. The median supermarket size for 2000 was 44,600 according to the Food Marketing Institute. As mentioned earlier, the Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 21 .TABLE 6 Tenant Space Size Standards by Use Type Edgewood Tenants 1 Total Tenant Sq. Ft. ULI Averages For Neighborhood Center Tenants (Sq. Ft.) Lower Median Upper Use Category Decile Decile Decile Countryside Deli 1,600 TEC Hair Care 660 Palo Alto Shoe Repair 660 House of Wigs 1,610 Century Liquors 4,410 Quick Wash Laundry 1,350 Moon’s One Hour Cleaners 1,350 Brothers Produce 3,330 AIbedsons 17,500 African City Alive!400 She Oil 272 Independent Delicatessen independent Unisex Hair Independent Shoe Repair independent Cosmetic/Beauty Supplies Local Chain Liq uor/Wine Independent Laundry Independent Dry Cleaner Independent Specialty Food National Chain Supermarket n/a 869 508 1,031 1,475 ~ 3,540 n/a 4,372 :n/a 1,440 I 1,600 3,000 El Jacalito Grill 3,102 Arts & Crafts National Service Station Independent Restaurant w/Liquor 1,075 ~. ~I 1,500 2,396 n/a 2,490 ~1 n/a 24,239 I 33,408 54,406 n/a I~ 2,688[n/a n/a ~i~’~’.:~ 1,900 n/a TOTAL 36,244 30,757 =55,701 71,903 Note: Grey boxes indicate where Edgewood tenants rank based on the ULI lower, median and upper deciles. ~ Marahishi Vedic Center is not a retail use and therefore has been excluded from the analys~s.2 For comparison purposes, the median for independent delicatessen and National service station was added to the total. Source: Dollars & Cents of Shopping Centers: 2002, Urban Land Institute, p. 220-249 Prepared by: Keyser Marston Associates Inc. Filename: Prel Rpt Tables; TABLE 6: 2/19/2002: cb owner would like to expand the store to 20,000 square feet with an additional 4,000 square foot pharmacy.6 Even with the proposed expansion, the Albertsons would be approximately half the size of a new contemporary supermarket. ¯Comparable Centers Data was not available on the size of the tenant spaces within the seven comparable centers within a five-mile radius of Edgewood. Based upon the number of stores, Edgewood would appear to be comparable. However as mentioned before, the other centers were exclusively retail centers This would indicate that overall, the shop space in Edgewood is significantly smaller than the comparable centers with the exception of Midtown, which is the smallest. Furthermore, as shown in Table 5, of the eight comparable centers (including Fdgewood) only two centers, Alma and Marsh Manor, had grocery stores that were sma ler than the Albertsons at Edgewood. vi. Parkinq and Vehicle Circulation ¯Parking Standard The act Of parking is usually a customer’s first contact with a shopping center, and the experience should be pleasant. Parking that is inadequate or poorly laid out will inconvenience shoppers and. encourage them to shop elsewhere. Based upon recent parking studies, the ULI recommends that four (4) spaces be planned for each 1,000 square-feet of GLA7 for centers with a GLA of 25,000 to 400,000 square feet.8 This is merely a good rule of thumb; the actual number of spaces will be dictated by local zoning and building codes and the needs of tenants. For example, fast food and other restaurant tenants may require more spaces per 1,000 square feet. Typically, the aisles for the parking spaces are at 90 degrees to the shop fronts to facilitate access from parked automobiles. If there is more than one major tenant, each will want a large field of parking oriented at 90 degrees for use by their customers. Due to the high costs of land and construction, most centers attempt to maximize the amount of useable building area and the number of parking spaces on a site. 6 City of Palo Alto Zoning Code has a 20,000 square foot limitation for grocery stores in neighborhood commercia centers:7 GLA refers to gross leasable area and is the most common measure of square footage for shopping centers. It includes all of the area leased by tenant but excludes common areas (loading areas, public toilets). 8 Shopping Center Development Handbook, LLI, 1999, page 107. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 23 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Parking aisles are generally double-loaded, thus providing auto access from each direction, and each bay of parking will be two autos wide, except for aisles along the outer "edges" of the site where there may only.be room for a single bay of parking. ¯Edgewood Parking According to city’s development history on Edgewood Plaza, 1955 perspective sketches of the center showed the center providing 248 parking spaces plu~ 23 cars for the Eichler office building (a total of 271 spaces) for a ratio of 7.29 cars per 1,000. Based upon current aerials there appears to be 249 parking spaces or slightly less than originally planned for ratio of 5.3 cars per 1,000. Based on the criteria of providing 4 cars per 1,000 square feet of leasable area Edgewood would appear to exceed the standard. However, as discussed below in terms of the eight comparison centers, Edgewood is at or below the average in terms of providing parking spaces. The parking issue for Edgewood is not so much adequate parking but rather convenient adequate parking. The main access to Edgewood is from Embarcadero Road. Once in the center, the parking is divided into three quadrants. The main parking lot in front of Albertsons, which is accessed from Embarcadero Road, actually has the fewest spaces with a total of 53 spaces or 21 percent of the total parking spaces. To further.complicate parking circulation, truck loading and customer parking are mixed. For these reasons circulation at the center is inefficient and the tenants who do not face the Albertsons parking area are at a disadvantage. Figure 7 illustrates the circulation pattern for Edgewood. ¯Comparable Centers Edgewood ranks six out of eight in available parking for the shopping centers surveyed (six centers had a greater number of parking spaces).9 In terms of parking per 1,000 Edgewood provides 5.2 spaces per 1000 or ranks five out of eight for parking per square foot. Baity Park Plaza provided the most parking per square foot of leasable area at 12.7 parking spaces per 1,,000. Marsh Manor provided the fewest parking spaces at 2.7’ spaces per 1,000 square feet (see Appendix A). 9 National Research Bureau Shopping Center Directory, 2002. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 24 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 vii. Edqewood Access As stated above, vehicular access to the center is provided from Embarcadero. Road (via Bayshore Road West), Saint Francis Drive and Channing Avenue. Although the center has access from three streets, Channing Avenue and Saint Francis Drive are residential streets that border the side and rear of the shopping center. To exit the shopping center, the drivers must exit onto Saint Francis Drive or Channing Avenue. Saint Francis Drive is a signalized intersection at Embarcadero and therefore a significant portion of the traffic going westbound toward Highway 101 collects on Saint Francis Drive. Alternatively, drivers may make a left hand turn from the center onto Embarcadero Road but they must cross oncoming traffic exiting from or entering the highway, which is at high speeds. By virtue of being signalized, Saint Francis Drive provides a major exit for westbound traffic. However, Saint Francis Drive is not convenient for shoppers who must circle around the rear of the Shell station and the Maharishi Vedic School to access Saint Francis Drive. Also, the use of Saint Francis Drive as an exit from the center negatively impacts the residents living on that street who. must cope with the commercial traffic. Bayshore Road is a frontage road along the highway. Because the road circulates to the side of Albertsons where there is no customer access, the road is lightly traveled. In fact the fa£ade of AIbertsons, which faces Bayshore Road, is where trucks are loaded and the trash bins are stored. As identified by ULI, the common practice for an "L" shaped center is to park in. the leg or intersection of the building. Neighborhood centers are not large enough to segregate parking into separate areas. -There are not enough shops to warrant the perceived inconvenience. The inefficient vehicular access and circulation is probably due in part to the irregular triangular shape .of the center site (almost kidney shaped). Surrounding the building with parking as currently designed has not increased shopping opportunitie.s; rather it has created inconvenient parking area with areas that are unused. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, inc. Page 26 viii. Pedestrian Access ¯Industry Standard As mentioned earlier, neighborhood shopping centers are typically oriented around the anchor tenant(s), to draw shoppers between them and past other tenants. In newer centers pads are integrated to house uses that are intended for quick turnover. ¯Edgewood Similar to vehicle access, from the perspective of the pedestrian the center functions as three separate uses. The service station and the office building (Maharishi Vedic School) are designed to function independently with no relationship to each other, the shops or the supermarket. Several shops (6) only have access from the side or rear of the ~enter, which are not directly visible from Albertsons. As a result, these shops do not benefit from cross shopping from the anchor patrons who might otherwise see the shops and decide to stop and shop. Another aspect of the center that is substandard is the two pedestrian walks. As described above, the shops are divided into two buildings, which are connected to each other and the market by pedestrian walks. However, the pedestrian walks tend to be dead spaces because only two shops front on these spaces. The pedestrian access along the northern building provides access to the wig shop and the access to the southern building provides entrance to the Mexican restaurant. This is not enough pedestrian traffic to activate these spaces and they lack amenities. The only furniture in this space are vending machines outside the grocery store and three potted plants in the area adjoining the Mexican restaurant. The reduced visibility to the shop spaces and lack of pedestrian access is directly related to long-term vacancies at these two spaces. The Mexican restaurant just recently moved into the shop space, which had been vacant for over a year. Prior to the leasing to the wig shop, this space was vacant for three to four months.~° 10 Palo Alto Retail Strategy, Sedway Group, June 2000, page 10. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 27 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 The Existence of Subdivided Lots of Irregular Form and Shape and Inadequate Size for Proper Usefulness and Development That are in Multiple Ownership a. Definition Appropriate parcel size and dimension is necessary if land is to be effectively utilized. In order for prOperty to be attractive to investors, parcels must be large enough to accommodate a structure that not only meets building code standards but current industry expectations. This also applies as well to parcels of relatively large size that are triangular or otherwise odd shape and therefore cannot accommodate the desired structure and parking needs. Adequate parcel size and dimension are necessary if land is to be effectively developed and used. Certain minimum lot sizes are required not only for code compliance but also to make development and redevelopment attractive to investors. Parcels must be large enough to accommodate the building, setback area, parking, and circulation requirements of development. b. Edgewood As stated earlier, as a group the combined size of the Project Area (4.49 acres excluding streets) is at the small end for a neighborhood center, which typically ranges between three and fifteen acres. Furthermore as previously noted, the .57-acre Maharishi Vedic School is not a related retail use to the shopping center. When th~s use is removed, the remaining acreage totals 3.92 acres. The small size of the shopping center is further impacted by the triangular shape of the site resulting from the diagonal direction of the Embarcadero Road. For these reasons, all four parcels are considered to be inadequately Sized and irregularly shaped. c. Comparison Centers Of the seven centers surveyed, only one (Midtown) was smaller than Edgewood. Three of the centers were between two and three times the size of Edgewood. The largestcenter was Sharon at 15.4 acres, followed by Charleston at 13.1 acres, Bailey at 10 acres. Including Edgewood, three of the eight centers were approximately the same size. Alma is 5.6 acres, Mountain is 4.7 acres and Edgewood is 4.5 acres. Midtown is exceptionally small at 2.3 acres. This would indicate as stated earlier, that the combined parcel size of the Edgewood is within mid- range for neighborhood center size. Howev6r, although the acreage of Edgewood was comparable with other neighborhood centers in the region, the Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 28 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 gross leasable building area (GLA) is substantially lower. The median GLA of the five centers (excluding Sharon and Midtown, which are the extremes) is approximately 40,000 square feet compared to Edgewood at 34,993 square feet (excluding the Maharishi Vedic School). In other words, Edgewood has 13 percent less leasable area than the median of the centers. It would appear, based on the survey that the irregular shape ~f the Edgewood parcel was the likely reason why the site is underutilized. Furthermore, as mentioned earlier, the conflicting interests of the various owners in the shopping center makes intensification or better utilization of the site problematic. D.ECONOMIC CONDITIONS THAT CAUSE BLIGHT Depreciated or Stagnant Property Values or Impaired Investments, Included but Not Limited to, Those Properties Containing Hazardous Wastes That Require the Use of Agency Authority. The following sections describe the stagnation of property values and demonstrates mpaired investments through a decline in retail sales and a low grocery store sales volume. a. Stagnant Property Values Depreciated or stagnant property values are a reflection of the lack of reinvestment in the shopping center. The relative growth in assessed value within the Project Area has bagged compared to the city and the County of Santa Clara. As shown in Table 7, the total assessed valuation for the Project Area in 1997-98 was $4,681,484 and in 2001-02 is $4,968,155. Thus, for the five-year period, this represents a six percent increase or on the average 1.5 percent annually. Therefore, the Project Area growth rate is similar to the allowable increase imposed by Proposition 13, in which, assessed valuation cannot increase by more than two percent annually without a property transaction or improvements. In comparison, during this same time period, the city asa whole had a total assessed valuation of $8,856,822,853 in 1997-98 and $11,379,837,955 in 2001-2002 for an overall growth rate of 28 percent or on the average seven percent annually. In other words, the growth rate in the city was 367 percent higher than the Project Area. Furthermore, the County as a whole had a total assessed valuation of $133,247,621,419 in 1997-98 and $173,034,086,009 in 2001-2002 for an c~verall growth rate of 30 percent. This averages 7.5 percent annually;, which is 400 percent higher than the Project Area. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO202007.PA:CK:gbd 17175:002.005/02/19/02 Keyser Marston Associates, Inc. Page 29 ’~- o b. Decline in Retail Sales The amount and growth of taxable sales is a primary indicator of the economic health of a retail center. Declining taxable sales, in particular, are indicative of declining sales, business closure, or a combination thereof. ’ In the June 2000 Palo Alto Retail Strategy prepared by The Sedway Group, Sedway analyzed retail sales for a 10-year period from 1989 to 1999. The analysis was prepared for eight retail centers/districts in Palo Alto including Alma Plaza, Edgewood, Town & County, Midtown, California, El Camino Real, Charleston Center, and University Avenue/Downtown. The purpose of the study was to identify the constraints and potentials for each of the areas, Because of the varying size of the areas and their different position in the market, ranging from neighborhood centers such as Edgewood to the regional Stanford Shopping Center, a comparison of all the center/districts is not meaningful. However, a comparison of the retail sales of the four neighborhood centers does reveal the relative health of the centers. Of the four neighborhood centers (Alma Plaza, Edgewood, Midtown, and Charleston), Edgewood had the lowest retail sales and experienced the second highest decline in retail sales (Alma Plaza had the greatest decline in retail sales and plans have been submitted for the revitalization of the center). As shown in Table 8, at the end of 1998, Edgewood generated $2.6 million in sales tax compared to Alma at $2.7, Charleston at $3.8 and Midtown at $15.8 million. In 1989 sales tax from Edgewood’ totaled $6.0 million, which dropped to $4.7 million in 1990, recovering somewhat in 1991 and 1992 at $5.2 and $5.5 million, respectively. Since 1993 sales taxes have declined every year except from 1995 to 1996. The total retail sales for Edgewood, over the 9-year period (1989-1998), have declined by 57 percent. This.compares to a 61 percent decline in Alma Plaza, which is also struggling, while Charleston has increased by 40 percent and Midtown has increased, by 4 percent. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 31 Edgewood and Alma both have a large percentage of small independent " businesses that are service related. Also, both centers are substandard in design. It can be assumed these shared characteristics contribute to low retail sales at these centers, c.Low Grocery Store Sales Volume Thompson Associates, in a letter to Mr. Kevin Nolan of American Properties, Inc., dated July 7, 1999, summarizes an analysis of grocery store sales in the City of Palo Alto and the competitive market (trade area), which includes areas outside of the city. The purpose of the analysis was to provide American Properties, Inc., which owns the Albertsons in Alma Plaza, with an indication if there was sufficient market demand to support the expansion of Albertsons at Alma Plaza. The results of the analysis indicated that there was approximately a 32 percent leakage in grocery sales to stores outside of the city. As further discussed in the Thompson Associates Study, a total of 16 stores were analyzed (10 of which were located in Palo Alto) in the Thompson grocery store sales analysis. A summary of the sales for the 16 grocery stores analyzed is presented in Table 9. The results indicated that Edgewood ranked number 11 of 16 stores in total sales per week. In other words, 10 stores had higher sales volume and five had lower sales volume, than was achieved at the Albertsons at Edgewood. Sales volume varied greatly with a low of $45,000 per week to a high of $650,000 per week. The Lucky’s (now Albertsons) at Edgewood earned $165,000 per week id sales volume This would mean that Edgewood has 33 percent below the combined average sales volume of the 16 stores ($247,812). Edgewood ranked 10 out of 16 in sales price per square foot, which ranged among the 16 stores from $4.74 to $18.52 per square foot. The retail sales per square foot at the Albertsons at Edgewood ($9.43 per square foot).was 10 percent lower than the average sales per square foot ($10.47) among the 16 grocery stores. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA02O2O07.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc, Page 33 TABLE 9 Supermarket Survey Profile Estimated Sales Gross Area Sales per ~q. Location Grocery Store Volume Ranking (sq.ft.)ft.Ranking (Midtown) SEC Middlefield Rd; I Colorado Ave. Palo Alto Safeway $295,000 5 19,000 $15.53 4 (Mountain View) NWC Rengstorff Ave./Middlefield Wy Mountain View Albertsons $240,000 7 32,100 $7.48 12 (Charleston) SWC Middlefield Rd./ Charleston Rd. Palo Alto Piazza’s Foods $185,000 10 18,000 $10.28 (Alma Plaza) NEC Alama Rd./ Meadow Dr. Palo Alto (San Antonio) SWC Calif. St./ Showers Dr. Mountain View Albertsons $120,000 14 17,168 $6.99 14 Albertsons $210,000 8 41,100 $5.11 15 NWC El Camino/College Ave. Palo Alto JJ & F Foods $80,000 15 8,000 $10.00 NWC El Camino/Middle Road. Menlo Park Safeway $650,000 1 37,000 $17.57 SEC Calf. St./San Antonio Rd. Mountain View Safeway $410,000 3 42,400 $9.67 NEC Middlefield Rd/Moreno Ave. Palo Alto CO-OP $130,000 12 18,500 $7.03 13 NEC El Camin~/Embarcadero Palo Alto Johns Town & County $125,000 13 13,000 $9.62 NWC Quarry Rd./Arboretum Rd. Palo Alto Andronicos $285,000 6 25,000 $11.40 5 SEC Santa Cruz Ave./University. Dr. Menlo Park Draegers $500,000 2 27,000 $18.52 1 NEC Willow RdJDurham St. Menlo Park Mario’s Fine Foods $45,000 16 9,500 $4.74 16 NWC Homer Ave./Emerson St. Palo Alto Whole Foods $325,000 4 20,800 $15.63 NWC Calif. Ave./Park Blvd. Palo Alto Mollie’s Stones $200,000 9 23,400 $8.55 Total $3,965,000 $167.55 Average $247,813 $10.47 3 11 $oume: Thompson Associates Potential Sales Survey, June 1999 Note: The three supermarkets in the Bailey, Marsh Manor and Sharon Heights Shopping Centers were not included in the above study. Prepared by: Keyser Marston Associates, Inc. Filename: Prel Rpt Tables; TABLE 9; 2/19/2002; pa Abnormally High Business Vacancies, Abnormally Low Lease Rates, High Turnover Rates, Abandoned Buildings, or Excessive Vacant Lots Within an Area Developed for Urban Use and Served by Utilities. Related to commercial vacancies is abnormally .low lease rates, relative to other local locations, which are often indicative of 1 ) weak demand for lease space; 2) an excess of supply of lease space; or 3) the substandard physical condition of space offered for lease. In the case of the Project Area, there is a demand for lease space but certain building and site conditions combined with the mix of tenants affects the marketability ofthe space. The relative quality of a building in terms of the lease rate market is weighed by taking a number of characteristics into account, including its age, amenities, lease rates and terms, occupancy, and tenant profile. Edgewo6d isLIocated in the northern Santa Clara County sub-region. REIS, a commercial real estate service company, identified thirteen (13) comparable shopping centers within a 10-mile radius of Edgewood. A 10-mile radius was chosen to provide a significant analysis sampling of leasing rates. Of these 13 centers, five of the seven shopping centers that were previously cited in this report in relation to physical characteristics were included inthe REIS lease rate comparables. Marsh Manor and Midtown Shopping Centers were excluded.11 Based upon the information provided by REIS, Edgewood has significantly lower lease rates for anchor and non-anchor retail spaces than the other shopping centers in the sub-region. The current asking rent for the anchor space at Edgewood (Albertsons) is $0.71 per square foot, which is 60 percent lower than the average lease rate for anchor space of $1.78 per square foot in the sub- region. Of the 11 comparable shopping centers, six contained available information on lease rates for anchor spaces. As shown in Table 10, all six shopping centers achieved higher lease rates for anchor space ranging between $0.91 - 2.65/SF/MTH, which is between 28 - 273 percent higher than $0.71/SF at Edgewood. The current asking rent for a non-anch0r space at Edgewood is $1.35/SF/MTH, which is 49 percent lower than the average lease rate for non- anchor space in the region of $2.66/SF/MTH. As shown in Table 10, 6f the 13 comparable shopping centers, all provided lease rate information for non-anchor spaces which are significantly higher than Edgewood, ranging from $1.50 - 3.68/SF/MTH, or between 11 - 173 percent higher than at Edgewood. 41 The exclusion of these two centers is likely attributed to the fact that IREIS excludes smaller shopping centers or centers for which leasing rate information is not available. Preliminary Report for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 35 Palo Alto Redevelopment Agency PAO202007.PA:CK:gbd 17175.002.005/02/19/02 TABLE 10 Lease Rates for Comparable Shopping Centers within 10-mile Radius Percent Non-Percent Above Anchor Above Anchor Edgewood Alma Plaza 1.50 11%n/a Mountain View Lucky S.C.1.75 30%0.91 28% Dick’s .Lakewood Shopping Center 1.84 36%n/a Charleston Shopping Center 2.25 67%n/a Civic Square Shop Center 2.30 70%1.45 104% Grant Park Plaza (Mountain View)2.38 76%2.23 214% Clarkwood Shopping Center 2.50 85%n/a Bailey Park Plaza 2.52 87%1.70 139% Mountain View S.C.2.70 100%2.33 228% Town & Country Village (Sunnyvale)2.75 104%n/a Village Corner 3.00 122%n/a Sharon Heights Shopping Center 3.25 141%n/a Town & Country Village (Palo Alto)3.68 173%2.65 273% Average 2.66 97%1.78 151% Note: Marsh Manor and Midtown Shopping Center did not have available lease rate information as provided by REIS. REIS’ database of shopping centers excludes smaller centers or centers for which there may be no dedicated management or the local broker is unwilling or able to provide leasing information. Prepared by: Keyser Marston Associates. Inc. Filename: Prel Rpt Tables: TABLE 10; 2/19/2002; cD Most shopping centers would prefer prospeptive tenants to be a known franchise retail or service provider rather than a "mom& pop" shop because of the risk of a failed business. The most important aspect a prospective tenant is looking for is good location, a strong economically viable shopping center, and good amenities, which Edgewood is lacking. According to one real estate broker in the area, a pristine shop with all of the amenities in a shopping center located in the sub-region would go for about $3.25/square foot.12 However, a more realistic lease rate would be $2.80/SF if the shopping center were economically viable. The lease rate would be lower if numerous vacancies exist, or the shopping - center is considered obsolete 6r is semi-active. As mentioned above, the lease rate for Albertsons is $0.71 per square foot and $1.35 for the non-anchor tenants. 3. A High Crime Rate That Constitutes a Serious Threat to the .Public Safety and Welfare Edgewood is perceived to,be impacted by crime. Based upon Part I Crimes reported by the City of Palo Alto Police Department, which includes homicide, rape, robbery, aggravated assaults, burglary, auto theft, and larceny, Edgewood- had a total of 97 Part I crimes reported between 1993 and 2000 (see Table 11). .From 1993 to 2000, crime at the Edgewood Shopping Center increased by 150 percent. In 1993, there were a total of eight criminal incidences which were primarily related to aggravated assault and larceny. In 2000, there were a total of. 20 criminal incidences, which similarly to 1993 consisted primarily Of aggravated assault and larceny (which is a form of robbery that does not involve the use of force or fear of personal injury). As shown in Table 11, between 1993-2000 crimes related to larceny accounted for 53 percent of total Project Area crimes and aggravated assault accounted for 30 percent of the crimes. According to the Police Department, in addition to the Part I crimes, problems at the shopping center include shoplifting at Albertsons and drug related crime (persons were using drugs in the Edgewood parking lots.) These types of crimes have reduced, but are still an issue for the shopping center. 12 Telephone interview with Carla Wilkey, U.O. Limited Partnership. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 37 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Ol 0 E.INFRASTRUCTURE DEFICIENCIES - FLOOD CONTROL Edgewood is subject to flooding from the San Francisquito Creek. The san Francisquito Creek is a non-channelized creek that is considered the primary flood control outlet that is adjacent to .the Project Area. The Project Area has been designated by the Federal Emergency Management Agency (FEMA) as being within a 100-year flood zone. An area within a 100-year flood zone is statistically susceptible to one major flooding occurrence every 100 years. The 100-year flood zone is broken down into differen{ zones, which describe the severity of the potential flooding in terms of flood depths and average depths. The Project Area is located in Zone AH, which encompasses the area west of Highway 101 and north of Embarcadero Road. The AH Zone takes on the characteristics of other flood zones in that this zone consists of both stationary ponding and water flows down a gentle slope. The AH Zone flood area has flood depths; of one to three feet (usually areas of ponding). Figure 8 shows the area within the vicinity of Edgewood that is subject to flooding. The Project Area was last subject to flooding from the San Francisquito Creek in 1998 and prior to 1998 major flooding occurred in 1955 and to lesser degree flooding also occurred in 1958 and 1982. The winter of 1997-98 produced some of the fiercest storms in recent memory. The Project Area and city were inundated by rainfall on February 2 and 3, 1998, in which, ,during a 24-hour period the.region experienced approximately 4.5 inches of rainfall. The flooding caused extensive damage to residential properties and .businesses within three communities (Palo Alto, Eas.t Palo Alto and Menlo Park). Based upon estimates provided by the Santa Clara Water District ("District")i approximately $28.1 million in damage occurred as result of the 1998 flooding. Although most of the damage was at residential properties, the District estimates that approximately $1.1 million worth of damages impacted the local commercial establishments. According to reports issued by the city’s Public Works Department, the primary effect of the substantial rainfall was the creek banks being overtopped in 15 different locations. This was the result of the ground being saturated by previous storms, which increased the run-off into local creeks and increased the likelihood of flooding. The buildings within the Project Area did not sustain damage due to water entering the establishments, however, losses were incurred at Edgewood because the parking lot surrounding the shopping center was flooded, making many of the businesses inaccessible to staff and ’ customers.13 In addition, the Embarcadero Road - Highway 101 junction was closed for several hours on February 3’d, further impeding access to the businesses. According to the District’s report, most of the businesses in the Project Area were closed for one-half to one day and sustained a revenue loss of between $100-1,500 per business. 13 After the Flood Waters Recedes: Assessing the Economic Impacts of San Francisquito Creek’s February 1998 Flooding prepared for the U.S. Army Corps of Engineers, San Francisco District and the Santa Clara Valley Worker District by Katherine Kao Cushing, Ph.D., March 1999. Preliminary Report for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 39 Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Although the District did extensive work as a result of the 1998 flood in order to reduce -, the amount of area within the 100-year flood zone, to this day the Project Area and most of the surrounding areas still remain within the 100-year flood zone. F.SUMMARY OF BLIGHTING CONDITIONS The Project Area ~s prevalently impacted by both physical and economic blighting conditions as discussed in detail in Part III of this report. These blighting conditions are summarized on Table 12. Figure 9 provides a.composite of the blighting conditions. In summary, Edgewood is too small in terms of retail building area and site size to be economically viable. These physical limitations are further impacted by small tenant spaces, which cannot accommodate a wide range of retailers. Most of the retail uses are service oriented with only a single anchor tenant. This is not a sufficient tenant mix to attract chain or national retailers to the shopping center, which act as catalysts for retail activity. Limited visibility from Embarcadero Road results in missed opportunities to attract shoppers and the inefficient parking layout and difficult access further discourages patronage. The ability of the private sector to affectively redevelop the site is hindered by multiple ownership with conflicting goals. The economic effect of the physical blighting conditions is evident in low lease rates, decline n retail sa es and stagnant property values. These issues are compounded by high instances of crime. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 41 Table 12: Summary of Blighting Conditions PHYSICAL BLIGHTING CONDITIONS Factors that Prevent or Substantially Hinder the Economically Viable Use or Capacity of Buildings and Lots. This Condition Can be Caused by a Substandard Design, Inadequate Size Given Present Market Conditions, Lack of Parking, or Similar Factors. Substandard Design Orientation and Layout Tenant Space Layout Shopping Center Size Requirements Tenant Space Size Requirements The convention for an "L" shaped shopping center, such as Edgewood, is to provide parking at the intersection of the "L" with all shops facing onto the parking area with visibility from the street. Furthermore, the shops should be either physically or visually connected to the anchor tenant to encourage patronage of the shops. At Edgewood the parking is divided into three quadrants with only the smallest parking area visible from the major road (Embarcadero), and only seven of the 13 tenants (including the Maharishi Vedic School) have visibility from Embarcadero. Furthermore, depending on where the patrons of the anchor (Albertsons) park, they may pass by as few as two stores. The desired layout for tenant spaces is to provide primary entrances and exits at the front of the store, with delivery/loading at the rear or on the side. Tenants prefer rectangular spaces with depths between 60 and 120 feet. At Edgewood, truck loading and service is mixed with the entrances to the stores and customer parking. Only the Century Liquor Store and Brothers Produce occupy spaces that are the entire width of the buildings or 90 feet. The remaining tenants are housed within space ranging from approximately 20 to 70 feet deep. Contemporary shopping centers typically range from 30,000 to 150,000 square feet. Edgewood totals 48,512 square feet which includes the 12,600 square feet non-retail Maharishi Vedic School. The actual leasable floor area is approximately 47,593 square feet. Compared to the average and excluding the Maharishi Vedic School, Edgewood has 44 percent less gross retail shopping area. Comparing Edgewood (excluding the Maharishi Vedic School) to similar shopping centers in a five-mile radius, Edgewood is the second smallest.. Six of the 12 shop spaces are below the average size f~r their use type nationally as tracked by International Council of Shopping Centers. When aggregating the tenant shop space on a square footage basis, the combined tenant space (36,244 sq. ft.) at Edgewood is 35 percent below the national median ( 55,701 sq. ft.) for similar uses and 50 percent below the high range for the use types. Albertsons is approximately 17,500 square feet. The median supermarket size for 2000 was 44,600 square feet accc~rding to ihe Food Marketing Institute. Thus Edgewood is 61 percent smaller than the median supermarket in the U.S. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 42 PA0202007.PA:CK:gI~d 17175.002.005/02/19/02 PHYSICAL BLIGHTING CONDITIONS Continued Parking and Circulation Vehicle Access Pedestrian Access Ample and convenient parking is a key factor to the success of a shopping center. The main parking area in front of Albertsons has the fewest pa[king spaces with a total of 53 spaces, or 21 percent of the total parking spaces. Furthermore, truck loading and customer parking are mixed. Edgewood ranks six out of eight in the total number of parking spaces for the shopping centers surveyed. The primary access point from Embarcadero is unsignalized. This is a particular problem given the high speed of traffic exiting Highway 101 onto Embarcadero. The closest signalized intersection is at Frances Drive. Besides being inconvenient, Frances is a residential street which means commercial traffic is being routed down a .residential street rather than from the major commercial corridor. Some shops only have access to the side and rear of the shopping center. Customers of the anchor (Albertsons) do not necessary pass by the shops and therefore they do not have the advantage of "spin off" or cross shopping which is one of the primary advantages of being located in a shopping center. Furthermore, two shops have entrances on the pedestrian walks (House of Wigs and El Jacalito Grill) which furtherreduces their visibility.. The Existence of Subdivided Lots of Irregular Form and Shape and Inadequate Size for Proper Usefulness and Development in Multiple Ownership. .Size Shape Ownership The shopping center is 4.49 acres which is small for neighborhood centers which range from three to fifteen acres. Furthermore, the .57-acre Maharishi Vedic School is not a related retail use. When this is excluded, the retail area totals 3.92 acres. Furthermore, Edgewood has 16 percent lessretail area than the average square footage of the eight comparable shopping centers surveyed. The small size of the center and triangular or kidney shape is likely the reason why the buildings are placed in the center of the .site which results in underutilized space such as the space to the rear of the center. There are four parcels and four owners with differing objectives ranging from maintaining status quo to demolishing the buildings. The conflicting interests makes intensification and better utilization of the sites difficult. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02_/19/02 Keyser Marston Associates, Inc, Page 43 ECONOMIC BLIGHTING CONDITIONS Depreciated or Stagnant Property Values or Impaired Investments, Including but not Limited to, Those Properties Containing Hazardous Wastes that Require the Use of Agency Authority as Specified in Article 12.5. --- Stagnant Property Values Decline in Retail Sales Low Grocery Store Sales From 1997/98 to 2001/02 there was a six percent increase in assessed value at the shopping center or 1.5 percent annually which is consistent with the automatic two percent increased allowed under Proposition 13. During this same period the assessed value citywide increased by 28 percent and in the County by 30 percent. In the 9-year period from 1989 to 1998, retail sales declined at Edgewood by 57 percent. In a survey of 16 supermarkets which are considered to be in the Palo Alto trade area, Edgewood ranked 11 of 16 in total sales per week. The volume of Edgewood was 33 percent below the combined average for the 16 centers. Abnormally High Business Vacancies, Abnormally Low Lease Rates, High Turnover Rates, Abandoned Buildings, or Excessive Vacant Lots within an Area Developed for Urban Uses and Served by Utilities. Low Lease Rates Within a 10-mile radius of Edgewood, lease rate data was available for 13 shopping centers. Anchor space at Edgewood leases for $0.71 per sq. ft. compared to an average of $1.78 (60 percent lower) per sq. ft. for six of the shopping centers that provided lease rate information for anchor stores. The asking price for non-anchor (shop) space at Edgewood is $1.35 per sq. ft. compared to an average of $2.49 (46 percent lower) at the 13 comparable centers. A High Crime Rate that Constitutes a Serious Threat to the Public Safety and Welfare.. Crime From 1993 to 2000, crime at the Edgewood increased by 150 percent. INFRASTRUCTURE DEFICIENCIES The Project Area is within the 100-year flood plain that last flooded in 1998. Although there was no direct damage, the flooding caused businesses to close for half a day, and as a result the businesses sustained revenue losses between $100 to $1,500 per business. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO202007,PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 44 LACK OF PROPER UTILIZATION The physical conditions found within the Project Area combined with the economic conditions cause a reduction of and lack of proper utilization of the Project Area. These conditions combined, and over time, have caused the shopping center to be underutilized and deteriorated. The lack of utilization of the shopping center is evident in long-term vacancies and loss of major tenants. The space now occupied by the wig shop was previously vacant for three to four months and the space recently rented by the Mexican restaurant was vacant for over a year. These long-term vacancies not only indicate a lack of utilization but an inability to attract tenants to the center. Furthermore, the center has lost it draw to larger retailers. Former tenants included two hardware stores (Crescent Hardware and Menalto Hardware.), a pharmacy (Edgewood Pharmacy)and several restaurants (Piccadilly Caf6, V.I.P. Restaurant, Fiorillo’s Restaurant and Pizza and Round Table Pizza). H.BURDEN ON THE COMMUNITY A goal of the community as described in the city’s Comprehensive Plan is to preserve neighborhood centers. Neighborhood centers are essential to maintaining walkable neighborhoods to reduce automobile dependence and promote community interaction. If the city loses its neighborhood centers, residents will have to travel outside the area and potentially the city to meet basic needs. Although Edgewood has not been abandoned, developer interest is in redeveloping the site for housing and not in maintaining and improving the shopping center. The increase in housing and loss of neighborhood services affects the desired balance between residents and retail serving uses. As indicated above, the shopping center has already lost needed neighborhood services including a pharmacy and hardware store. Besides the loss of needed retail service, significant revenues have been lost to the-city. As mentioned earlier, at a time when investment has been increasing in the city as evidenced by a 28 percent growth in assessed values, the value of Edgewood has remained flat. Furthermore, retail sales have declined by 57 percent from 1989 to 1998. Although revenues to the city from the center have been declining, the need for public services has not. In fact, crime at Edgewood is notably high, which requires additional police service. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelcpment Project Palo Alto Redevelcpment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 46 INABILITY OF PRIVATE SECTOR TO. REDEVELOP PROJECT AREA - WITHOUT AGENCY ASSISTANCE The conditions described in this report cannot-be expected to be reversed or alleviated by private enterprise or governmental action, or both, without the authority Of redevelopment. The approach .to testing feasibility (the ability of the private sector acting on its own to redevelop the center) is to estimate the price that the private sector would be willing to pay for the right to develop a program that achieves the redevelopment objectives and to compare that price with the estimated cost to purchase the land and existing improvements. If the cost to purchase land and existing improvements is greater than the estimated price that the private sector would pay with the obligation to develop a specific development program and satisfy the objectives of the Redevelopment Plan, then the private sector acting on its own cannot privately redevelop the Property Area. The first step is to establish a conceptual redevelopment program, which must include a renovated or reconstructed grocery store. It should be noted that a grocery store would require a large surface parking lot to serve its customers and the customers of adjoining retail space. When the land area for parking is included, it is expected that the retail land area could be as large as 125,500 sq. ft. In KMA’s experience, without a large surface parking field to provide adequate parking to serve all retail tenants, a grocery store will not commit to the major new investment required at this location. The reason is that the shopping center will be under parked and inadequate parking will ultimately have a negative impact on sales volumes. Therefore, a project in which the primary land use is residential or a project in which retail parking is below grade or "n a parking structure will not be acceptable to a 20,000 sq. ft. major grocery store and will not meet the Redevelopment Plan objectives By contrast, in KMA’sjudgment, the private sector acting on its. own would prefer to redevelop the Project Area primarily With a for sale residential project because, as will be discussed further below, residential land values are substantially higher than land values supported by retail; but such a plan would not meet the city Comprehensive Plan goals nor Redevelopment Plan objectives. A mixed- use development would meet these goals and objectives as well as being environmentally viable. Therefore, the conceptual program tested is a mixed-use project including both commercial and residential development. We would expect that the construction would be essentially all new construction given the site requirements of the grocery store and the need to maximize development potential of the site. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO202007.PA:CK:gbd 17175.002.005/02/19/O2 Keyser Marston Associates, Inc. Page 47 For the purpose of this analysis, the conceptual program evaluated includes: 1.Retail parcel that provides for the reconstruction of the existing grocery store, shop space and an adequate parking field. The parking field must also provide for the 1614 spaces serving the existing office building. 2.Residential parcel that allows for sale project to be developed. 3.Two most expensive parcels, the office building and the gas station, would remain and exterior of bui dings and the landscaping could be upgraded. More specifically, the conceptual redevelopment program is: Conceptual Redevelopment Program Retail Reconstruction of existing space: Grocery Store 20,000 SF Pharmacy 4,000 SF Shop Space 15,000 SF Residential- For Sale Homes Office Building Parking on Retail Pamel - 16 spaces Existing Office Building and Gas Station 125,500 SF (Approximate) Approximate Land Area 30,000 SF (Approximate) Included in Retai Parcel Remain with upgrades to fagade and landscaping To estimate the cost to purchase the existing retail center, KMA reviewed a COMPS, Inc. summary report on sales data for sales in 2001 of approximately 100 retail properties in Santa Clara County. The data indicated that the average price (cost) was $190 per sq. ft. of building area and the median pnce was $235. The existing grocery store and shop improvements contain approximately 35,970 sq. ft. The median price of 14 Based upon information provided by the Maharishi Vedic School. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 48 PA0202007.PA:CK:gbd 17175.002.005/02/1’9/02 $235 is used, recognizing the location of the property in Palo Alto. KMA would estimate the cost to be approximately $8..45 million ($235 times 35,970 sq. fL). The price the private sector would be willing to pay for the right to substantially renovate or reconstruct the existing grocery store and shop spaceand to develop a residential parcel is then compared with the cost to purchase. However, because of the phy..sical obsolescence of the existing retail buildings and the need to maximize new development in the Project Area, the existing improvements have little value and the property is essentially valued as if all new construction mu,st occur. For retail, KMA is currently in negotiations with major grocery stores and neighborhood shopping center developers in the Bay Area. It is the experience of KMA that approximately $25 per sq. ft. of land area is the highest land value that is being proposed by developers and grocery stores. For the conceptual redevelopment program, the price would be approximately $3.14 million (125,500 sq. ft. of land at $25). For residential land upon which for sale units (single-family, town homes, and condominiums), recent sales data indicate that land prices of approximately $100 to $125 per sq. ft. of land area are. being achieved. Ultimately, the value of residential-land is determined by the number of units that are entitled for development and the conditions imposed on the development. For the conceptual redevelopment program, the price would be approximately $3.75 million (30,000 sq. ft. at $125). In conclusion, for the conceptual mixed-use redevelopment program, the price the priv.ate sector would be willing to pay, provided that a major grocery store must be developed with supporting shop space, would be approximately $6.89 million. A further impediment to development is the covenant restrictions that require a majority Of the nearby resident (the "Eichler Covenants") approval for a change in land use at the Center. The price that the private sector would be willing to pay presumes that on- and off-site development costs are typical. If there were financial obligations imposed on the project for on- and off-site work related to flooding or reconstruction or widening of streets, then the price would be adjusted downward accordingly. Also, as identified in the Environmental Impact Report for the proposed Project, there is currently a contaminated groundwater plume under site caused by past leakage.from the gas station. Dependi.ng on the extent of the contamination, some form of remediation activities may have to " occur prior to new development on site. In summary, the land value supported by the retail and iresidential components of the conceptual redevelopment program of $6.89 million cannot support the cost.to purchase the existing center, which is estimated to be $8.45 million. Therefore, the private sector acting on its own will not reconstruct the Project Area with a major new grocery store and supporting retail space. Preliminary Repor~ for the Adoption of the Redevelopment Plan for theEdgewood Redevelopment Project Palo Alto Redevelopment Agency PAO202007.PA:CK:gbd 17175.002.005/02/19102 Keyser Marston Associates, Inc. Page 49 J.NEED FOR TAX INCREMENT FINANCING Parts IV and V of this report identify the programs and costs that are needed to alleviate the conditions that cause blight within the Project Area. As stated in Part V Section C, Economic Feasibility and Reasons for Including Tax Increment Financing, neither of the funding sources may be available, nor feasible for the Agency to use in financing the anticipated costs and revenue shortfalls. The city relies heavily on sales tax to fund the city’s budget. As stated in the 2001-03 Budget: "Sales tax, the city’s largest revenue source, represents approximately 20 percent or $25.6 million of total 2001-02 General Fund revenues. Sales tax receipts are expected to-rise a relatively modest 5.8 percent over projected 2000-01 revenues. In ¯ comparison to prior year double-digit percent ’ncreases, a 5.8 percent increase reflects emerging weaknesses in the economy. The slowing technology sector, demise of dot-com firms, lower consumer confidence, and the growing number of layoffs are expected to impact sales during 2001-02 In particular, new auto, electronic equipment, and retai sales are expected to decline in the near future." As mentioned earlier, retail sales declined at Edgewood by 30 percent between 1989 and 1999. The use of tax increment financing from the Project Area is necessary to cover portions of the extensive program costs that will be ’ncurred in implementing the redevelopment program and land acquisition to create a developable site. There is a limited amount of alternative funding sources available that could correct the existing blighting conditions within the Project Area. For these reasons, private enterprise acting alone cannot eliminate the blight and revitalize the center. The size and scope of deficiencies found.within the Project Area require the combination of public and private resources and effort to reach a successful conclusion. The proposed improvement projects and programs for the comprehensive redevelopment of the Project Area are discussed in Section IV of this report. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002,005/02/19/02 Keyser Marston Associates, Inc. Page 50 IV.DESCRIPTION OF THE SPECIFIC PROJECTS PROPOSED BY THE AGENCY AND HOW~THE PROJECTS WILL IMPROVE OR ALLEVIATE THE CONDITIONS DESCRIBED IN PART III A.REQUIREMENT AND APPROACH The CRL requires that a Preliminary Report include a description of the specific projects and programs to be undertaken by the Agency and how such projects and programs will alleviate blight in the Project Area. This section describes the Agency’s proposed program of redevelopment and its relationship to blight alleviation in the Project Area. The program of redevelopment presented in this section is conceptual in nature and may change due to the specific development project that will be proposed, input from the community, review by city staff and approval by the Agency and City Council. Due tothe lengthy time frame for implementing the Redevelopment Plan, the redevelopment program needs to be flexible and provide the capability to respond to changes and private sector interest in the Project Area. The strategy to attain the goals and objectives outlined in the Redevelopment Plan is to use public investment to attract and stimulate private investment thereby creating an investment environment to allow modernization of Edgewood. The following projects and programs are be!ng considered as part of the redevelopment of the shopping center. Bo PROPOSED PROJECT, REDEVELOPMENT PROGRAMS, AND RELATION TO BLIGHT ELIMINATION 1. Proposed Project The following is a description of the maximum development currently anticipated n the Project Area. The redevelopment project proposes to revitalize the Edgewood by demolishing all or a portion of the existing facilities and replacing them with retail and housing. The existing Albertsons supermarket would be renovated, expanded or replaced with a new, modern facility that would be approximately 20,000 square feet. In addition a 4,000 square foot pharmacy would be developed. The retail shops would be replaced or by a new 15,000 square foot building that would accommodate 10 to 12 small retail businesses. Current retail tenants that cannot afford to remain on site would be relocated in accordance with redevelopment law. n addition, the project would include 38 to 49 housing units Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 51 PAO202007.PA:CK:gbd 17175.002.005/02/19/02 on site. Approximately sixteen apartments are anticipated to be built above the new retail facilities; the remaining residential units would consist of townhouses located at grade around the site. To comply with redevelopment lav~, a percentage of the new residential units would qualify as low-income housing. Parking for on-site residents would be at grade For purposes of the financial feasibility analysis as presented in Part V of this report, a moderate development proposal was assumed which included retaining and rehabilitating the gas station and office building (Maharishi Vedic School). The remainder of the shopping center would be purchased by the Agency, or the Agency would assist a developer in acquinng the property and the shops would be demolished and reconstructed. In total, 15 townhomes would be constructed on-site. The following ist of specific projects and programs would relate to either development scenario because they address potential redevelopment activities and not specific development characteristics. 2. Redevelopment Program To imp.lement the proposed Project, the Agency may undertake a variety of activities based upon the private sectors needs and the ultimate development that will be implemented. The following programs are intended to describe the range of activities that the Agency may undertake. For purposes of this analysis the activities are group, into three categories: 1 ) targeted public improvements which anticipates implementing the public ~mprovements identified in the Redevelopment Plan; 2) discretionary public improvements which would allow the Agency to assist in financing less specific public improvements and projects that would be defined during project implementation; and 3) housing development which would assist in the construction and preservation of affordable housing on-site or citywide, depending on the specific development that is implemented in the Project Area. a. Targeted Public Improvements Land Assembly, Demolition and Relocation To facilitate new development on the site, it is anticipated that site assembly may be necessary. Currently, there are four owners and four separate sites. It may be necessary to acquire land to assemble the multiple parcels into a suitable site for new development, and to thereafter sell and/or lease property for private development. The Agency may assist in the land assembly through voluntary purchase, negotiated purchase, or eminent domain. The program Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02219/02 Keyser Marston Associates, Inc. Page 52 may also include site preparation activities such as demolition and clearance, and assistance for environmental remediation (if necessary). The Agency will provide relocation assistance as required by California State Housing and Community Development Regulations and Agency Guidelines. This will ensure that uniform, fair, and equitable treatment is afforded to displaced businesses as a result of the Agency’s land assembly and relocation program. Specific details will be provided in the actual Relocation Plan to be adopted by the City Council. ii.Flood Control Improvements The Project Area and surrounding residential area is subject to flooding from the San Francisquito Creek. As part of larger effort to protect the Project Area and surrounding residential neighborhoods from flooding, the Agency may contribute toward flood control improvements in compliance with FEMA including raising the site level above the flood plain, creek stabilization and enhancements. It may also be necessary to improve drainage on the site to divert, or more effectively catch and divert runoff into the city’s storm drainage system. -J-hese types of ’mprovements are costly and because they address problems that extend beyond the boundaries of the site, cannot necessarily be expected to be borne by a prospective developer. However, these improvements are needed to assure that private and public investment on the site will be protected. iii.Improved Visibility and Si.qna.qe The shopping center has no visibility from the Highway 101. This diminishes the economic viability of the site. To attract more patrons to the shopping center the Agency may participate in providing additional signage to identify the center as wel as a gateway to the neighborhood. Increased patronage means increase sales tax which wil help to offset the Agency’s financial assistance in the redevelopment of the Project Area. These improvements may be combined with dr coordinated with gateway features to identify the surrounding neighborhood and entrance to the city. iv.Other Capital Improvements Capital or infrastructure improvements will be necessary to redevelop the shopping center. There are many traffic improvements needed to make access to the shopping center easier and to reduce impacts to the surrounding residents. These projects may include reconfiguring and providing additional parking. Other improvements may include reducing the width of Embarcadero Preliminary Report for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 53 Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Road to slow traffic exiting from Highway 101, reconfiguring and consolidating entrance points, improving circulation around the center and providing additional traffic light(s). These activities will likely include reconstructing curbs, gutters or sidewalks. Additionally, the Agency will work with the Santa Clara Valley Transportation Authority to improve public transportation in the area including bus shelters for commuters. Related to this issue, the Agency will meet with Caltrans and other stakeholders to address noise issues from Highway 101 at Embarcadero Road. Other public works projects are anticipated including increasing the size of water mains to increase capacity at the site and if necessary fire water flow. The Agency also anticipates improving streetlights and undergrounding utilities. Related to the provision of housing on the site, the Agency may assist in creating open green space. This will also be of benefit to the businesses and help to improve the asethics of the shopping center. Improving the infrast[ucture will help to make development of the site financially feasible for continued retail use by eliminating costs that might otherwise be borne by the private sector. This will also improve property values which will generate tax increment that will be used to fund improvements to the Project Area. b. Discretionary Improvements i.Capital Improvements The Agency has attempted to anticipate and provide for all possible public improvements and other assistance that may be needed to redevelop the site. However as mentioned above, the type of assistance will ultimately depend on the final project that is approved. Also, over the 30-year duration of the Redevelopment Plan, issues and needs may arise at the shopping center that cannot currently be anticipated. The Agency will need to respond to these currentiy undefined issues. The cash flow analysis in Section V of this report provides discretionary revenues to respond to unanticipated costs. ii.Owner Participation Through an Owner Participation Agreement or Disposition and Development Agreement, the Redevelopment Agency may grant or loan money to assist new development or expansion of existing facilities. This program may fund construction, landscaping, fa£ade upgrades, or parking lot improvements which Preliminary Repod for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02218/02 Keyser Marston Associates, Inc. Page 54 ,will ultimately depend on the development project that is approved and the type of assistance needed. -~ iii.Business Attraction and Retention The Agency will assist in the attraction of new tenants and the retention of existing tenants as feasible. These objectives can be achieved through a number of activities that might include public relations, direct marketing and advertising. Additional activities may include outreach to retailers in surrounding areas, assistance with select’ion of retail space and small business assistance for retailers. Through these activities the shopping center would experience increased rents and leases that would enhance property values and the viability of the center. iv. Commercial Rehabilitation As part of the overall coordinated revitalization effort for the shopping center, the Agency anticipates it might assist in the rehabilitation of the office building and possibly the gas station. The Agency may offer financial assistance in the form of low interest or zero-interest participatory loans. By providing these loans the Agency will make rehabilitation feasible without which improvement would not be considered possible because of the unlikelihood of an adequate return on the investment. c.Affordable Housing As required by State law, 20 percent of the gross tax increment funds received by the Agency must be deposited into a fund that assists in improving, preserving and increasing the community’s supply of affordable housing. This money may be spent within the Project Area or citywide. The Agency may spend all of its affordable housing money in creating and preserving affordabie housing Within the Project Area. However, if this is inconsistent with the ultimate development project for the Project Area, the Agency may spend money outside of the Project Area. The following are examples of programs that may be implemented to fulfill the Agency’s housing obligations. Residential Rehabilitation The Agency may offer low-interest loans and grant programs to assist low- and moderate-income homeowners and owners of rental properties within or outside of the Project Area to make repairs to affordable housing. Different offerings may be made available to income-qualifying homeowners, and owners of rental , Preliminary Report for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 55 Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 (single-family, duplex, and larger) properties whose tenants are income- qualified. Additionally, grants are available to repaint the exterior of owner- occupied .single-family homes, and qualifying rental properties. This program will help to reduce deterioration and poor site conditions. This will also help to impr6ve the living experience for residents in the city. Affordable For Sale Housinq A first-time homebuyer program may be implemented to assist very low to moderate ncome families, using HUD’s ncome limitations for Santa Clara County, with the down payment and closing costs for the purchase of a home in the city. This takes the form of a deferred loan with a low interest rate. Where infill development is feasible, the Agency may also provide subsidies to close the gap between the cost of building and operating market rate housing and the amount that a low- and moderate-income family can afford to pay. These programs will make housing available to more low- and moderate-income residents. By making more ownership housing available the Agency will be providing incentive for residents to rehabilitate deteriorated properties. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 56 PRELIMINARY ASSESSMENT OF THE PROPOSED METHOD OF FINANCING, ECONOMIC FEASIBILITY, AND REASONS FOR INCLUDING DIVISION OF THESE PURSUANT TO SECTION 33670 ASSESSMENT OF THE PROPOSED METHOD OF FINANCING THE REDEVELOPMENT OF THE PROJECT AREA Section 33352(e) of the CRL provides that the Preliminary Report for the redevelopment project contain an analysis/description of the proposed method of financing the Project, including an assessment of economic feasibility and the reasons for including a provision for the division of taxes pursuant to Section 33670 of the CRL. Economic feasibility, for purposes of this analysis, is defined to be a comparative analysis of anticipated costs for implementation of the proposed Redevelopment Plan to the resulting revenues expected to be generated by the Project. Under existing redevelopment law, the effectiveness of the Plan is limited to 30 years (except for payment of indebtedness and the enforcement of covenants). These assumptions have been incorporated in the economic feasibility cash flow. This analysis is intended to provide a preliminary assessment of the proposed method of financing the redevelopment of the Project Area as authorized under existing law. This Report is also intended to provide an assessment of the economic feasibility of the Project and reasons forincluding tax increment financing and other financing sources in the proposed Plan. This section of the report contains a general discussion of the costs associated with the proposed redevelopment program d activities, and an evaluation of the general financing methods that may be available to the Agency. Economic feasibility is determined through a summarized feasibility cash flow analysis for the general fund for the Project as summarized on Table 13. It should be noted that the fiscal projections presented in this report are estimates based on information available at this time. Actual tax increment growth and project costs will depend upon future interest rates, inflation rates, local and regional market conditions, and actual levels of public and private investment activity. B.ESTIMATED TOTAL PROJECT COSTS A determination of economic feasibility requires an identification of the potential costs associated with redevelopment of the Project Area. Redevelopment will require Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 57 PAO202007.PA:CK:gbd 17175.002.005/02/19/02 significant participation from the Agency in activities to promote and achieve the goals and objectives of the Plan and to address blighting conditions. These activities are described in Section IV of this report. The estimated cost of these programs over the life of the Plan, as projected in the feasibility analysis, is as follows (see Tables 13, 14 and 15): Targeted Public Improvements Discretionary Public Improvements Affordable Housing Program Administration Interest Costs - TA Bonds/©ther Debt $3,838,000 $414,000 $2,055,000 $414,000 $3,200,000 TotalProjed Costs (rounded) $9,920,000 In addition to.funding the programs, the Agency anticipates other costs associated with meeting the obligations for implementing an effective redevelopment program including costs for personnel, administration, net interest costs on future bonded indebtedness, and, if applicable, interest on third-party loans. These costs and the Affordable Housing Program are described below. 1. Affordable Housing Program The Agency is required to deposit 20 percent of gross tax increment revenues allocated to the Agency into a Low- and Moderate-Income Housing Fund for the purposes of increasing, improving and preserving the community’s supply of low- and moderate-income housing. As shown on the Table 15 projection of tax increment revenues, the cumulative contribution to the Agency’s Housing Fund is projected to be approximately $1.60 million over the 30-year term of the Plan. Additional deposits beyond Year 30 which result from additional tax increment allocations to repay Agency indebtedness from Years 31 through 44 are projected to total approximately $.46 million. 2. Administration Ongoing administration costs of the redevelopment program are estimated to approximate 10% of the annual net tax increment. After Year 30 of the Plan, administration costs will no longer be incurred as all redevelopment programs will be completed as mandated by the CRL. A nominal cost is associated with loan administration for the 15 additional years allowed to pay down existing debt. Total projected cost to administer the redevelopment program over the life of the Plan has been projected to be $.41 million. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 58 PAO202007.PA:CK:gbd 17175.002.005/02/19/02 3. Net Debt Service Cost - Tax Allocation Bonds/Other Debt The Agency intends to finance the anticipated redevelopment programs discussed above and will consider all funding alternatives available under the CRL. The Agency may utilize tax increment revenues generated in the Project to secure the debt service of tax allocation bonds to assist in the financing of project costs. The illustrated cash flow assumes that the Agency will issue a tax allocation bond in year 20 of the Plan in order to establish debt thus maintaining the eligibility of the Agency to receive tax increments for the 45-year full term. 4. Net Debt Service Cost - Other Loans The feasibility cash flow assumes that no third party loans will be required to finance public capital improvements. If the Agency elects to assume third party loans in the future, it could secure such loans from the city, other governmental agencies or private entities. FINANCING METHODS AVAILABLE TO THE AGENCY The Plan is prepared with the intent of providing the Agency with the necessary legal authority and flexibility to implement the revitalization of the Project. The Plan authorizes the Agency to finance the Project with financial assistance from any or all of the following sources: (1) City of Palo Alto; (2) State of California; (3) federal government; (4) tax increment funds in accordance with provisions of the existing CRL; (5) Agency bonds; (6) interest income; (7) loans from private financial institutions; (8) lease or sale of Agency- owned property; (9) donations; and (10) any other legally available public or private sources. The CRL provides authority to the Agency to create indebtedness, issue bonds, borrow funds or obtain advances ’in implementing and carrying out the specific intents of a redevelopment plan. The Agency is authorized to fund the principal and interest on the indebtedness, bond issues, borrowed funds or advances from tax increment revenue and any other funds available to the Agency. To the extent that it is able to do so, the city may also supply additional assistance through city loans or grants for various public facilities or other project costs. Potential revenue sources to fund project costs, as assumed in the illustrative cash flow, include, but are not limited to the following: (1) tax increment revenues; and, (2) proceeds from tax allocation bonds. The estimated resources available to finance the proposed redevelo oment programs are summarized as follows: Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 59 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Net Tax Increment Revenue Housing Set Aside Net Bond Proceeds Interest Earnings Total Project Revenues (rounded) ¯ 1. Tax Increment Revenues $5,968,000 $2,055,000 $1,760,000 $150,00Q - $9,933,000 A summary d the projection of the incremental taxable values and resulting tax increment revenues for the Project over the term of the Plan is shown on Table 16. The gross total tax increment revenues for the Project over a 30-year period amounts to $7.99 million, of which $1.60 million would be’ required for deposit into the Housing Fund, $1.02 million would be allocated to affected taxing entities under the mandatory pass through formula required under the existing CRL, and another $1.22 million would be allocated to the Palo Alto School District (basic aid school district). The net tax increment.revenues available to the Agency over the 30-year term totals $4.15 million. Tax increments generated from the Project could be allocated to the Agency for up to an additional 15 years after the Plan termination date to repay indebtedness incurred from tax allocation bonds and other debt. The Table 13 projection assumes that an additional allocation of $1.83 million in Years 31 through 44 would be required to repay outstanding indebtedness. As a result of the additional allocation, the Agency will also deposit an additional $.46 million to the Housing Fund. Cumulative net tax increment revenues incorporated on the Table 13 feasibility projection amount to $5.97 million and cumulative deposits to the Housing Fund total $2.06 million. Tax increment revenues’are based upon increases in the annual incremental assessed valuation of the Project which result from (1) transfers of property ownership or new construction activities, and (2) annual inflationary increases (maximum of 2%) allowable under Article XIIIA of the California Constitution. The potential new development value estimated for the Project is summarized in Tables 17 and 18 (Real Property Value Added and Personal Property Value added respectively) and is based upon various improvements and additions proposed for Edgewood. The tax increment revenue projection shown on Table 16 incorporates an assumed valuation growth scenario for the Base Year value of 2.5% in the first four years, 3% Preliminary Report for the Adoption of the Redevelopment Plan Keyser Marston Associates, Inc. for the Edgewood Redevelopment Project Page 60 Palo Alto Redevelopme’nt Agency PAO2020O7.PA:CK:gbd 17175.002.005/02/19/o2 in years five through nine, and 3.5% per year for the remaining term of the Plan Specific new projects and investment anticipated for the Project Area following Redevelopment Plan adoption are listed on Tables 17 and 18. As shown, it is estimated that approximately $17.1 million in additional real property investment will occur by the year 2009. These projections were prepared solely for inclusion in the feasibility cash flow summarized on Table 13. Actual tax increment revenues in future years will be subject to variables currently not known to the Agency, including real estate market conditions and demand, the availability of developer financing, the impact of assessment appeal filings by property owners, and assessment practices and policies of the county assessor. The Agency’s actual financing program will be detailed by the current priorities, market, conditions and economic factors. 2. Proceeds from Bonds The Agency may pledge tax increment revenues to secure the pnncipal and interest payments of tax allocation bonds issued to finance anticipated program costs. The economic feasibility of the financing plan summarized on Table 13 assumes that the Agency will consider tax allocation bonds as a financing alternative. Actual financing options will be at the sole discretion of the Agency. 3. Loans, Grants and Contributions Various revenue sources from public agencies and private parties may be available to assist in the funding of the redevelopment program. Advances, grants or loans from state and federal government agency funds could be used to assist in the timely implementation and completion of the Agency’s redevelopment activities and programs. Similarly, the Agency may enter into a development agreement for the redevelopment of real property at the shopping center. An agreement such as this one may include a grant or advance from a private party to the Agenc~j. This type of third party financing could be utilized in order to undertake the proposed programs and meet the desired schedule for completing the projects. The cash flow projection assumes that no debt will be raised from third parties. PROPOSED FINANCING METHOD, ECONOMIC FEASIBILITY, AND REASONS FOR INCLUDING TAX INCREMENT FINANCING The anticipated costs to implement a program of revitalization in the Project will require significant participation from the Agency as it implements activities, which promote and achieve the stated goals and objectives of the Plan. Economic feasibility of the Plan has Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agenqy Keyser Marston Associates, Inc. Page 61 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 been determined based upon a comparative cash flow analysis of the anticipated costs for, implementation of the proposed redevelopment program to the resulting projected resources expected to be generated over the life of the Plan. The economic feasibility cash flow summarized on Table 13 was created t~ represent one scenario of economic feasibility. At the discretion of the Agency, other funding sources discussed above may also represent viable funding alternatives for economic feasibility of the Plan. Although the Agency may consider other funding sources permitted in the Plan, not all of the funding sources may be available or be feasible for the Agency to use in financing the anticipated costs and revenue shortfalls. In the event that other financial resources alone can not fully bear the costs associated with revitalization of the Project, the implementation of a redevelopment program utilizing tax increment revenues must be considered as a necessary financing tool. E.INDEBTEDNESS LIMIT Based upon the financing method discussed above, the following indebtedness limit, as required by the CRL for inclusion in the Plan, has been determined. The total debt supported in whole or in part by tax increment revenues, which may be outstanding at one time, may not exceed $7.52 million. This amount has been determined based on the program and administrative costs discussed above. Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 62 o 8 o o o o o o 00 o o o~O o o oooo o o o o o o~oo o~oo o~oo o~oo o~oo o~oo o~oo o~oo o~oo o~oo o~oo oo oooo oooo oooo oooo oooo oooo 00000 0 00000 0 00000 0 00000 0 00000 0 00000 0 00000 0 Z 0 n 0 rn n >o o]-- o o o 8 ooo ooo ooo o ooo ooo ooo o 0 ooo ooo ooo ooo ooo ooo ooo ooo ooo ooo ooo ooo o o ooo ooo oo~. o~ o~ o~ o~ iI o o o o ~ APPENDIX A NEIGHBORHOOD CENTERS SURVEY Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency Keyser Marston Associates, Inc. Page 76 PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Shopping Center Survey Methodology and Findings KMA compiled a list of all neighborhood shopping centers within a five-mile radius of Edgewood using CACl Marketing Systems, who generates market and demographic reports, and the shopping center database on ICSC’s website. Within this radius, twenty n&ighborhood shopping centers were identified. These shopping centers were the focus of a field-survey to collect data on comparable centers to Edgewood. Based on field survey observations, seven of the twenty centers were determined to be comparable to Edgewood Center. Comparable centers were those centers with a grocery store anchor. Of the 12 centers that did not qualify, three centers no longer existed (demolished), three centers were community centers (typically larger centers containing personal serving uses), two of which were anchored by pharmacies (Longs Drugs, Walgreens). There were also two specialty shopping centers which did not have traditional anchors such national or regional chain stores, and consisted primarily of shops and restaurants that provide high end services or luxury items such as a tobacco store and full service restaurants. The table below identifies the 20 centers that were identifi&d in the five-mile radius of Edgewood, their location, which ones were comparable centers and how the remaining centers were categorized. The table on the following page summarizes the characteristics of the shopping center. Neighborhood Centers Surveyed COMPARABLE CENTERS: Edgewood Alma Plaza Bailey Park Plaza Charleston Center Marsh Manor Shopping Center Midtown Shopping Center Mountain View Shopping Center Sharon Heights Shopping Center CITY: Palo Alto Palo Alto Mountain View Palo Alto Redwood City Palo Alto Mountain View Menlo Park DEMOLISHED CENTERS/CENTERS UNDER RENOVATION: Palm Plaza University Village Village Shopping Center COMMUNITy ~ENTERS: Stanford Barn Shopping Center Ramona Plaza Rengstead Center CONVENIENCE CENTERS: Super Duper Shopping Center Two unnamed Shopping Centers (Gordon/Pulgas) One unnamed Shopping Center (Moreno/Middlefield) Mountain View Palo Alto E. Palo Alto SPECIALTY CENTI=RS: Village Court Shopping Center The Menlo Center Palo Alto Palo Alto Mountain View Preliminary Report for the Adoption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PAO202007:PA:CK:gbd 17175 002.005/02/19/02 Keyser Marston Associates, Inc. Page 77 Los Altos Menlo Park Mountain View Menlo Park Palo Alto o 0 // ii" APPENDIX B PHOTOGRAPHS OF EDGEWOOD Preliminary Report for the Ado ption of the Redevelopment Plan for the Edgewood Redevelopment Project Palo Alto Redevelopment Agency PA0202007.PA:CK:gbd 17175.002.005/02/19/02 Keyser Marston Associates, Inc. Page 78 EDGEWOOD PLAZA View of main entrance from Embarcadero Road View of shops and pedestrian w~lk on west side of shopping center from the St. Francis Drive parking lot Filenarne: Photos1 .ai EDGEWOOD PLAZA View of shops (Quick Wash Laundry and rear entrance of Brothers Produce) on west side of shopping center View of parking around east side of Albertsons parallelling Bayshore Road West Filename: Photos2.ai EDGEWOOD PLAZA View north of El Jacalito Grill (before opening) and the Albertson’s parking lot Entrance to Albertsons Filename: Photos3.ai EDGEWOOD PLAZA Parking lot in front of Albertsons off of Embarcadero Road View west of pedestrian walk from Albertsons parking lot Filename: Photos4.ai EDGEWOOD PLAZA View west of pedestrian walk towards St. Francis Drive between Century Liquors and El Jacalito Grill from Albertsons parking lot View north of pedestrian walk between El Jacalito Grill (left) and Albertsons (right) Filename:Photos5.ai EDGEWOOD PLAZA View south of shops (’Century Liquors, Moon’s One-Hour Cleaners, and Brothers Produce) tOwards Embarcadero Road F//enarne: Photos6.ai Attachment 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary PREFACE This document has been prepared by the City of Palo Alto Redevelopment Agency as the Lead Agency with the assistance of the City of Palo Alto Department of Planning and Community Environment, to consider the environmental impacts of the proposed Edgewood Center Redevelopment Project in conformance with the California Environmental Quality Act (CEQA). The City of Palo Alto has determined that a program level Environmental Impact Report (EIR) is required to discuss and assess the impacts of the project on the environment. Under CEQA, an EIR is required to discuss and assess the impacts of the project on the environment. CEQA defines an effect on the environment as "a substantial or potentially adverse change in the environment." The term "environment" means the physical conditions that exist within the area which will be affected by a proposed project, including land, air, water, flora, fauna, noise, objects of historic or aesthetic significance. This EIR provides environmental review to assist the City of Palo Alto in considering the approval or denial of the proposed Redevelopment Plan and the actions involved in establishing the project.. These actions include: the adoption of the Edgewood Redevelopment Plan, the formation of the Edgewood Redevelopment Project Area, and the future implementation of public and private development projects. The level of specificity of analysis included in this Program EIR is adequate for the purpose of considering adoption of the Redevelopment Plan and establishment of the Edgewood Redevelopment Area. Without specific development information about individual projects that might be developed within the scope of the Redevelopment Plan over its duration, it is not possible to adequately address project level impacts that would Occur with future specific development projects. Such analysis would be speculative. Therefore, it may be necessary to conduct further analysis at the time specific development is proposed within the Edgewood Redevelopment Area. In accordance with CEQA, the EIR provides objective information regarding the environmental consequences of the proposed project to the decision makers. The CEQA Guidelines provide the following statements to clarify the role of an EIR. ’ Section 15121(a). Informational Document. An EIR is’an informational document, which will inform public agency decision makers, and the public of the significant environmental effects of a project, identify possible ways to minimize the significant effects, and describe reasonable alternatives to the project. The public agency shall consider the information in the EIR, along with other information that may’ be presented to the agency. Section 15151. Standards for Adequacy of an EIR. An EIR should be prepared with a sufficient degree of analysis to provide decision-makers with information that eriables them to make a decision that intelligently considers environmental consequences. An evaluation of the environmental effects of the proposed project need not be exhaustive, but the sufficiency of an EIR is to be reviewed in light of what is reasonably feasible. Disagreement among experts does not make an EIR Al-l-ach rn rrl- 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary inadequate, but the EIR should summarize the main points of disagreement among the experts. The courts have looked not for perfection, but for adequacy, completeness, and a good-faith effort at full disclosure. An EIR is intended to focus on physical changes in the environment, An EIR is not required to discuss or assess economic or social effects of a proposed project which do not, in themselves, result in significant physical effects on the environment. An EIR may consider economic and social effects if such effects cause physical effects not otherwise analyzed, or if such consideration would assist in determining the significance of physical changes caused by the project. The City is required to consider economic and social effects of the Redevelopment Plan only in assessing whether mitigation measures or changes in the project can .feasibly reduce the significant effects in the physical environment of the project (CEQA Guidelines Section 15131). Economic and social effects often caused by the adoption and implementation of a redevelopment plan typically include (1) potential changes in the distribution of property tax revenue among affected, taxing entities resulting from adoption of the redevelopment plan, and (2) increased demand for services to project area residents provided by the City and other public agencies. Where such revenue or service effects do not result in "substantial or potentially adverse changes in the environment", i.e. physical effects on the environment, an EIR is not required to discuss those revenue or service effects. Further, in establishing the system of statutory pass-through payment~ to affected taxing entities pursuant to AB 1290, the Community Redevelopment Law Reform Act of 1993, the Legislature made an important substantive limitation on mitigation measures required to be taken with respect .to affected taxing entities in the adoption and implementation of a redevelopment plan. In enacting specified pass-through payments, the Legislature expressly found and declared that: "The payments made pursuant to this section are the exclusive payments that are required to be made by a redevelopment agency to affeeted taxing entities during the term of the redevelopment plan." (Health and Safety Code Section 33607.5 (f) (1) (b)) To emphasize this point, the Legislature further stated: "Notwithstanding any other provision of law, a redevelopment agency shall not. be required, either directly or indirectly, as a measure to mitigate a. significant environmental effect or as part of any settlement agreement or judgement brought in any action to contest the validity of a redevelopment plan pursuant to Section 33501, to make any other payments to affected taxing entities, or to pay for public facilities that will be owned or leased by an affected taxing entity." (Health and Safety Code Section 33607.5 (f) (2)) This EIR is prepared in accordance with the CEQA Guidelines Section 15180 pertaining to redevelopment projects. Under this section all public and private activities or undertakings ii Al--I-achrn ni- 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary pursuant to or in furtherance of a redevelopment plan constitute a single project, which shall be deemed approved at the time of adoption of the redevelopment plan by the legislative body. The EIR for the redevelopment plan shall be submitted in accordance with Section 33352 of the Health and Safety Code. Section 15180 (b) states that an EIR on a redevelopment.plan shall be treated as a program EIR with no subsequent EIR required for individual components of the redevelopment plan unless a subsequent EIR or a supplement to an EIR would be required by Section 15162 or 15163. On November 7 2001, the Palo Alto City Planning Commission adopted the Edgewood Preliminary Plan. The Preliminary Plan describes the boundaries of the Project Area; summarizes existing redevelopment standards; describes the redevelopment purposes and objectives to be achieved by the Redevelopment Plan; assesses conformance with the City’s General Plan; and outlines neighborhood impacts. Concurrently with distribution ofthis Draft EIR, the Agency has prepared and sent to the affected taxing agencies receiving property tax revenue from the project~ area, a draft of the Redevelopment Plan (see Appendix A) and the Preliminary Report on the Redevelopment Plan prepared pursuant to Health and Safety Code Section 33344.5. The Preliminary Report contains the following components: (1) the reasons for the selection of the project area; (2) a description of the physical, social, and economic conditions existing in the project area, (3) documentation of the project area’s qualification as a predominantly urbanized area; (4) a preliminary assessment of the proposed method of financing the redevelopment of the project area, including an assessment of the economic feasibility of the project and the reasons for including .a provision for tax increment financing in the Redevelopment Plan; (5) a description of the specific project or projects proposed by the Agency in the Redevelopment Plan; and (6) a description of how the projects of the Redevelopment Plan will improve or alleviate the blighting conditions in the project area (see Appendix B). Distribution of the Preliminary Report, the draft Redevelopment Plan, and this Draft EIR will provide the background information for consultation by the AgencY with the affected taxing entities in accordance with Health and Safety Code Section 33328. Those Consultations provide an appropriate forum for discussion of various economic and social impacts of the proposed Redevelopment Plan (in addition to the physical effects discussed in the Draft EIR), such as revenue and service impacts to the affected taxing entities, as well as any permissible mitigation measures or appropriate adjustments to the Redevelopment Plan. The results of these consultations will be set forth in the report to the City Council on the Redevelopment Plan prepared pursuant to Health and Safety Code Section 33352. In conclusion, the Community Redevelopment Law provides a parallel consultation process with the affected taxing entities to address any potential economic and social effects of the Redevelopment Plan not directly addressed in this DEIR. Together with the analysis of physical impacts on the environment addressed in the DEIR, the CRL consultation process ensures that all effects upon the affected taxing entities will be addressed. In this manner, the City and the Agency have used, and will continue to employ, the complementary processes of CEQA and the CRL to provide a comprehensive decision making framework for consideration of the Redeveloprhent Plan. iii Aitachment 3 Draft Environmental Impact Report for tile Edgewood Redevlopment Project (DEIR) Preface and Summary TABLE OF CONTENTS PREFACE PAGE i SUMMARY vi I.DESCRIPTION OF PROJECT PROJECT OVERVIEW PROJECT LOCATION DETAILED PROJECT DESCRIPTION PROJECT OBJECTIVES USES OF THE EIR CONSISTENCY WITH GOALS AND POLICIES 1 1 1 4 5 5 II.ENVIRONMENTAL SETTING, IMPACTS AND MITIGATION MEASURES 10 A.LAND USE 10 B.GEOLOGY AND SOILS 15 C.HYDROLOGY AND WATER QUALITY 18 D.VEGETATION AND WILDLIFE 22 E.HAZARDOUS MATERIALS 27 F.CULTURAL RESOURCES 29 G.VISUAL AND AESTHETICS 33 H.TRANSPORTATION AND TRAFFIC 39 I.AIR QUALITY 48 J.NOISE 53 K.UTILITIES 60 L.POPULATION & HOUSING 62 III. PUBLIC SERVICES 64 IV. CUMULATIVE IMPACTS 68 V.ALTERNATIVES TO THE PROPOSED PROJECT 70 VI.SIGNIFICANT UNAVOIDABLE IMPACTS OF THE PROJECT 73 VII.IRREVESIBLE ENVIRONMENTAL CHANGES AND IRRETRIEVABLE COMMITMENT OF RESOURCES 74 VIII. GROWTH INDUCING IMPACTS OF THE PROJECT 75 Jv Attachment 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary IX. LIST OF PREPARERS X.REFERENCES XI.PERSONS CONSULTED TECHNICAL APPENDICES A B C D E F G H Redevelopment Plan Tree Survey Phase 1 Site Assessment Archaeological Archival Search Historic Architecture Assessment Traffic Impact Analysis Environmental Noise Assessment Notice of Preparation and Comments FIGURES Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Regional Map Vicinity Map Aerial Photograph Tree Map Conceptual Intersection Improvements - Alternative 1 Conceptual Intersection Improvements - Alternative 2 Noise Measurement Locations TABLES Table Table Table Table Table Table Table 1 2 3 4 5 6 7 Table 8 Table 9 Table 10 Table 11 Soils Present at the Project Site Tree Survey LOS Definitions for Signalized Intersections LOS Definitions for Unsignalized Intersections Existing Level of Service Summary Background and Project Level of Service Summary Number of Ambient Air Quality Standards Violations and Highest Concentrations 1998-2000 Palo Alto Land Use Noise Standard Existing Noise Levels Typical Noise Levels of Construction Equipment Pending Projects PHOTOS Photo 1 Photo 2 View of the entrance of the project site View of the project site from the southwest 76 77 78 Attachment 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary Photo 3 Photo 4 Photo 5 Photo 6 Photo 7 View of Maharishi Vedic School View of Albertson’s Grocery Store southwest View of central pedestrian passage View of storefronts on the project site View of storefronts, roof eaves and exposed beams on the project site vi Attachment 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary SUMMARY The proposed project is the establishment of a redevelopment project for the purpose of redeveloping and revitalizing the 4.5-acre Edgewood Shopping Center. The redevelopment project proposes to revitalize the Edgewood Center by demolishing the existing facilities and replacing them with new retail development and housing. The existing Albertson’s Supermarket would be replaced with a new, modern facility that would be approximately 20,000 square feet. A 4,000 square foot drug store will also be constructed adjacent to the grocery store. The redevelopment project proposes to construct up to 18,000 square feet of retail space for small retail businesses. Between 38 and 49 residential units are pr6posed. The project may include public improvements such as street re-striping, possible abandonment of the frontage road, project signage, and street widening or relocation of right of way, as necessary. The following is a brief summary of the significant project impacts and mitigation measures addressed within this EIR. The complete .project description and discussion of impacts and mitigations can be found in the EIR text that follows. SIGNIFICANT ENVIRONMENTAL IMPACTS Land Use Impacts Construction activities would result in significant physical disturbance, and could cause temporary disruption to adjacent land uses. (Significant Temporary Impact) MITIGATION MEASURES The developer would implement a Construction Management Plan approved by the City to minimize impacts on the surroundir~g sensitive land uses to the fullest extent possible. The Construction Management Plan would include the following measures to minimize impacts of construction upon adjacent sensitive land uses: measures to control dust, noise and water pollution resulting from construction activities; measures to keep all streets and public ways clean of debris, dirt, dust and other undesirable outcomes of construction; measures to control noise by limiting hours of operation of construction activities, avoiding more sensitive early morning and evening hours, and scheduling equipment selection. Less Than Significant Impact with Mitigation. Hydrology and Water Quality Impacts Implementation of the redevelopment plan could expose people and structures to flood hazards. (Significant Impact) All construction will comply with the City of Palo Alto Flood Hazard Ordinance, including elevation of habitable spaces above anticipated flood levels. Implementation of the project will comply with all FEMA regulations. Less Than vii Attachment 3 I Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary SIGNIFICANT ENVIRONMENTAL IMPACTS MITIGATION MEASURES Significant with Mitigation. Construction activities could increase the pollutant load flowing into local waterways. (Significant Temporary Impact) Burlap bags filled with drain rock will be installed around storm drains to route sediment and other debris away from the drains. Earthmoving or other dust-producing activities would be suspended during periods of high winds. All exposed or disturbed soil surfaces would be watered at least twice daily to control dust. Stockpiles of soil or other materials that can be blown by the wind would be watered or covered. All trucks hauling soil, sand, and other loose materials would be covered and all trucks would be required to maintain at least two feet of freeboard. All paved access roads, parking areas, staging areas and residential streets adjacent to the construction sites would be swept daily (with water sweepers). Vegetation in disturbed areas would be replanted as quickly as possible. Less Than Significant Impact with Mitigation. Hazardous Materials Impacts Construction of the proposed project could expose groundwater and subsurface soils contaminated by gasoline.(Significant Impact) Remediation actions necessary to make the site safe for the proposed retail, residential, and park uses will be implemented based upon the recommendations of hazardous materials contamination testing and confirmation (Phase II site assessment) that will be conducted for implementation of the Redevelopment Plan. The Department of Toxic Substances Control and the Regional Water Quality Control board are responsible for overseeing cleanup of contaminated soil and water and for overseeing development activities on contaminated sites. A Clearance Letter outlining site history and requirements for further site assessment and cleanup will be required by the City of Palo Alto prior to approval of the residential development. Less Than Significant with Mitigation. CulturalResources Impacts viii Attachment 3 Draft Environmental Impact Report for the Edgewood Redev!oplnent Project (DEIR) Preface and Summary SIGNIFICANT ENVIRONMENTAL IMPACTS Demolition of Edgewood Center and the adjacent office building would result in the loss of a historic resource, (Significant Impact) MITIGATION MEASURES Materials and features of the buildings will be salvaged prior to demolition. Representatives of the Palo Alto Planning Department, the Palo Alto Historical Commission, and other citizen groups and parties interested in historic resources should be given the opportunity to examine the buildings and provide suggestions for salvaging and relocating elements of the buildings. The project impacts will be reduced commensurate with the percentage of the existing buildings that canbe incorporated into the design for any new buildings, or otherwise preserved. Historic documentation of the buildings will be completed prior to demolition or salvage. This documentation shall be according to the Outline Format described in the Historic American Buildings Survey Guidelines for Preparing Written Descriptive Data (Pacific Coast Basin Regional Office, U.S. National Park Service, 1993) and the Photographic Specifications - Historic American building Survey (U.S. National Park Service, 1989).The documentation will include original archival quality photo prints, archival negatives or historic views, and the original building drawings, if available. The documentation will be placed in a historical collection accessible to the general public (e.g., Palo Alto Historical Society archives at the Palo Alt0 Main Library. Implementation of the proposed mitigation measures will reduce the impact to historic resources, but not to a less than significant level. Implementation of the proposed mitigation measures will reduce the impact to historic resources, but not to a less than significant level. Significant Unavoidable Impact. Transportation Impacts The proposed project would significantly Possible mitigation measures have been increase traffic congestion at the identified that could reduce impacts at the Embarcadero/West Bayshore intersection,Embarcadero/West Bayshore intersection. No Attachment 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary SIGNIFICANT ENVIRONMENTAL IMPACTS which currently operates below the City of Palo Alto’s acceptable level of service. (Significant Impact) MITIGATION MEASURES mitigation is proposed for this Significant Unmitigated Impact. impact. Construction activities implementation of the proposed project could increase local pollutant levels of PM10 and carbon monoxide. (Significant Impact) Air Quality associated with Impacts Earthmoving or other dust-producing activities would be suspended during periods of high winds. All exposed or disturbed soil surfaces.. would be watered at least twice daily to control dust. Stockpiles of soil or other materials that can be blown by the wind would be watered or covered. All trucks hauling soil, sand, and other loose materials would be covered and all trucks would be required to maintain at least two feet of freeboard. All paved access roads, parking areas and staging areas at construction sites would be swept daily (with water sweepers). Vegetation in disturbed areas could be replanted as quickly as possible. Less Than Significant Impact with Mitigation. Noise Impacts Proposed residential uses would be exposed to noise levels in excess of the levels identified as acceptable in both the City of Palo Alto Comprehensive Plan and State Title 24. (Significant Impact) Noise levels associated with the operation of the shopping center could exceed current levels on site and could occur during noise sensitive hours. (Significant Impact) All residential units will be subject to a design specific noise analysis prepared prior to issuance of building permits in conformance with State Title 24. Mitigation included in building design could include sound rated windows and mechanical ventilation. All development will comply with Site and Design Regulations in the Municipal Code Section 18.64 that address noise impacts. Less Than Significant with Mitigation. During demolition and construction activities, noise levels will exceed the maximum residential levels allowed in the City’s noise ordinance. (Significant Temporary Impact) Construction will be allowed between tl~e hours of 8:00 AM to 8:00 PM, Monday through Friday; 9:00 AM to 8:00 PM on Saturday; and 10:00 AM to 6:00 PM on Sundays and holidays per the City ordinance. Construction times will not be restricted further as long as no individual piece of equipment produces a noise level exceeding 110 dBA at a distance of 25 feet or that the noise level at any point outside of the property plane does not exceed 110 dBA. Signs must be posted at all entrances to the x Attachment 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary SIGNIFICANT ENVIRONMENTAL IMPACTS MITIGATION MEASURES construction site informing all workers and residents of the requirements of the City’s noise ordinance, including construction hours. Less Than Significant with Mitigation Cure ulative Impacts With or without implementation of the proposed project, _the intersection at East Bayshore Road and Embarcadero Road will have a significant cumulative impact during the PM peak hour. (Significant Cumulative Impact) There is no mechanism currently in place to achieve mitigation of cumulative impacts at this intersection. No mitigation is proposed at this time. Significant Unmitigated Impact SUMMARY OF ALTERNATIVES The CEQA Guidelines specify that an EIR should identify alternatives to the proposed project which could attain most of the project objectives but avoid or reduce the significant effects of the project. The significant impacts identified in this EIR as resulting from the proposed project include: incompatible land uses, water quality, vegetation and wildlife, hazardous materials, cultural resources, air quality, and noise. This EIR analyzes three alternatives to the proposed project, as well as a "No Project" alternative. These alternatives are summarized below. A.PROJECT ALTERNATIVE 1 - NO PROJECT ALTERNATIVE The No Project alternative would continue current operations of the Edgewood Center under the existing deteriorating conditions. No changes in the environment would occur under this alternative. The No Project alternative would avoid all significant, unavoidable historic building impacts and traffic impacts. Bo PROJECT ALTERNATIVE 2 -REVITALIZATION OF THE EXISTING FACILITIES WITHOUT RESIDENTIAL Alternative 2 consists of establishing the Edgewood Redevelopment Project and rehabilitating and restoring the existing buildings (the Albertson’s Grocery Store, Maharishi Vedic School, and the small retail shops) on the site and adaptively reusing them for the proposed project uses. Under this alternative, no residential units would be constructed on the site and the grocery store would not be expanded. Alternative 2 is environmentally superior to the proposed project because it avoids or reduces the historic resources impacts and traffic impacts, as well as most of the lesser impacts associated with the implementation of the Redevelopment Plan. Alternative 2 meets two of the four project objectives. xi Al-i-achm nt 3 Draft Environmental Impact Report for the Edgewood Redevlopment Project (DEIR) Preface and Summary Co PROJECT ALTERNATIVE 3 - EXPANSION, REVITALIZATION AND ADAPTIVEREUSE OF THE EXISTING FACILITIES Alternative 3 consists of rehabilitating and restoring the existing buildings (The Albertson’s Grocery Store, Maharishi Vedic School, and the small retail shops) on the site and adaptively reusing them for the proposed project uses. Under this alternative, 38 residential units would be constructed on the site with integrated parking and the grocery store would be expanded by a maximum of 3,000 square feet and a 4,000 square foot pharmacy would be added to the site. Alternative 3 is environmentally superior to the proposed project because it avoids or reduces the historic resources impact and most of the lesser impacts associated with the implementation of the Redevelopment Plan. The traffic impacts will still remain significant with this alternative. Alternative 3 meets all of the project objectives. D.PROJECT ALTERNATIVE 4 - INCORPORATION OF FRONTAGE ROAD Alternative 4 consists of implementing the project as proposed and incorporating West Bayshore Road into the project site. In this alternative West Bayshore Road would be abandoned adjacent to the shopping center and the abandoned right of way would be developed as part of the shopping center. This would cause approximately 90 percent of the through traffic on West Bayshore Road to be diverted to St. Francis Drive and Charining Avenue. Alternative 4 is avoids the significant unavoidable traffic impact of the proposed project. However, it creates a new significant traffic impact on St. Francis Drive and Channing Avenue. All of the lesser impacts associated with the implementation of the Redevelopment Plan will be the same as the proposed project. The historic resources impacts will still remain significant and unavoidable with this alternative. Alternative 4 meets all of the project objectives. xii Attachment 4 Attachment 4 Draft Environmental Impact Report (DEIR) for the Edgewood Redevelopment Project Area The preface and summary section of the DEIR is included as Attachment 3. Copies of the complete DEIR document are available for review at the following locations: Civic Center, 250 Hamilton Ave., Palo Alto, CA 94301 7th Floor in the Clerk’s Office 1st Floor at the Public Information Counter City of Palo Alto Main Library, 1213 Newell Rd. City of Palo Alto Downtown Library, 270 Forest Ave. City of Palo Alto Terman Park Library, 661 Arastradero City of Palo Alto College Terrace Library, 2300 Wellesley ¯ City of Palo Alto Mitchell Park Library, 3700 Middlefield For additional information about the availability of the DEIR, please contact Susan Arpan, City of Palo Alto Economic Resources Planning Manager at 650-329-2604 or Allis Rodelli, City of Palo Alto Economic Resources Planning Specialist at 650-329-2452. Attachment 5