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HomeMy WebLinkAboutStaff Report 3434 City of Palo Alto (ID # 3434) City Council Staff Report Report Type: Action Items Meeting Date: 4/8/2013 City of Palo Alto Page 1 Summary Title: Rezone Emerson Street Adding Ground Floor Combining District PUBLIC HEARING: Adoption of an Ordinance Amending the Zoning Map to Add the Ground Floor Combining District to the CD-C-P(and CD-S-P) Zoned Properties Fronting the 600 Block of Emerson Street From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends a Council MOTION to adopt the attached Draft Ordinance (Attachment A) amending the Zoning Map to add the Ground Floor (GF) Combining District (regulated under PAMC Section 18.30(C)) to properties on the 600 block of Emerson Street zoned CD-C-P (Commercial-Downtown Community with Pedestrian Combining District) and street fronting ground floor spaces zoned CD-S-P (Commercial-Downtown Service with Pedestrian Combining District), as listed on the ordinance’s Exhibits 1 and 2. Executive Summary On November 5, 2012, Council directed staff to pursue immediate rezoning of properties on the 600 block of Emerson Street to add the Ground Floor (GF) Combining District. The Colleagues’ Memo (Attachment B) and Council discussion (Attachment C, meeting minutes) satisfied the PAMC Section 18.80.020 requirement to describe, in general terms, the reasons for consideration of a change in district boundaries. The PTC considered and recommended a draft map and Ordinance in two public hearings, and determined the change of boundaries to add the GF zone is in accord with the Comprehensive Plan and purpose of PAMC Title 18. The attached draft Ordinance contains the requisite Approval Findings, as well as citations from the Zoning Code and Comprehensive Plan to support these findings. In the Ground Floor (GF) Combining District, use of the ground floor area of buildings is restricted by PAMC Section 18.30(C).010 to retail, eating and drinking, and other service- oriented commercial uses. The GF zone does not allow new office uses to be located on the City of Palo Alto Page 2 ground floor of existing or new buildings, but allows for the continuation of existing ground floor office spaces. There are five existing ground floor office spaces on the 600 block of Emerson. Staff’s recommendation had previously excluded three of these five spaces from the rezoning; the street-facing CD-S-P-zoned Forest Plaza Building ‘A’ commercial office spaces (698 Emerson, 171 and 175 Forest). These addresses were included in the hearing notices and were recommended for rezoning by the PTC on a 6-2 vote. The fourth ground floor office space in Forest Plaza’s Building A ground floor condominium is 195 Forest Avenue; this space is not street fronting and therefore excluded from the rezoning. Background GF Combining District The GF Combining District, implemented in 1986, is primarily applied to the Commercial Downtown-Community zone. The GF regulations were initially part of the CD zone chapter. In 1992, the regulations were placed into a separate “Combining District” and conditional uses, such as commercial recreation, daycare, and financial services, were later included. In 2009, Council (a) deleted the ‘Use Exception’ provision, (b) rezoned portions of the Downtown to add and remove the GF Combining District, (c) amended the CD district outside of the GF zone to allow greater flexibility for landlords to experiment with retail in former office space and to alternate between office and retail uses and (d) modified the development standards to ensure ground floor space is designed to “accommodate retail use” – but not require such use. The January 30, 2013 PTC report describes this in more detail. City Council Review The attached PTC reports provide background on the Council’s November 5, 2012 Colleagues memorandum, discussion and direction to staff. The memo arose in part from concern about recent use conversions in some areas of downtown, including Emerson Street. During Council discussion, it was noted that “Emerson Street needs to be protected quickly” since it connects Downtown with South of Forest Avenue; Council voted (8-1) to direct staff to “return to Council with a proposal to retain retail on Emerson Street between Hamilton Avenue and Forest Avenue.” Minutes of the Council meeting are provided as Attachment C. Public Outreach Staff held an outreach meeting in mid-December regarding Council’s direction; two property owners attended. Staff requested further outreach from a representative of the Downtown Business District to the Emerson Street property owners and merchants, to ensure all affected parties were aware of the pending action to rezone these properties. City of Palo Alto Page 3 Planning and Transportation Commission Review The PTC conducted two public hearings to discuss and recommend this rezoning. The staff reports and meeting minutes for these public hearings are attached to this report as Attachments D, E, F and G. On January 30, 2013, the PTC reviewed the Council direction for the rezoning and continued the public hearing, consistent with staff’s recommendation, requesting additional information for its consideration. In the report presented to the PTC (Attachment D), staff recommended exclusion of both corner properties from the rezoning, having heard from the property owner of 203 Forest Avenue and residents above the Forest Plaza Building ‘A’ offices who had expressed concern about the potential for living above a restaurant. The reasons for exclusion were stated in the staff report. These included that the buildings at the four corners of the intersection (1) do not currently contain retail uses, (2) are not well-designed for retail uses, and (3) the Forest Plaza condos were specifically excluded from the 2009 GF rezoning discussions. The report asked for PTC input on these exclusions and on how to treat non- conforming uses resulting from the rezoning. There were no public speakers at the first hearing, as reflected in meeting minutes (Attachment E). The additional information the PTC requested included parcel data, cost of rent, information about outdoor alcohol service, potential incentives to retain existing retail, and takings law including any previous discussion of takings related to rezoning property to GF. On March 5, 2013, the Planning and Transportation Commission (PTC) received the staff report (Attachment F) and voted 6-2 to recommend Council adoption of an ordinance adding the Ground Floor (GF) Combining District to all properties fronting the 600 block of Emerson Street and the street facing corner spaces fronting Forest Avenue. The corner properties the PTC recommended are now included in the Ordinance. There were three speakers addressing the PTC on March 5, 2013, as reflected in meeting minutes (Attachment G). The first speaker, a residential condominium owner in Forest Plaza Building ‘B’, noted his support of the PTC’s recommendation to include the ground floor condominiums in Forest Plaza’s Building ‘A’. The second speaker, the property owner of 203 Forest Avenue, expressed concern about the inclusion of his property in the rezoning. The third speaker, representing the property owner of 624-640 Emerson, clarified her opposition of the rezoning of these properties. The following table lists properties on the 600 Block of Emerson Street recommended by the PTC to receive the GF zoning: City of Palo Alto Page 4 Property Address Tenant West Side of Emerson Street (North to South) 180 Hamilton Avenue Casa Olga, under conversion to The Epiphany Hotel 620 Emerson Street Stanford Florist 624 Emerson Romi Boutique Retail Clothing 628 Emerson Richard Sumner Gallery Retail Art, Frames, Prints 632 Emerson Tacolicious Restaurant, previously Mantra 636 and 640 Emerson Gordon Biersch Restaurant 644 and 648 Emerson Street Buzz All Stars and Shift Offices Street Facing Spaces in Ground Floor Condominium of Building A, corner of Emerson and Forest (Forest Plaza)* 698 Emerson Street* Anna Eshoo's Office 171 & 175 Forest Avenue* Anheuser Busch Beer Garage Office East Side of Emerson Street, North to South 611-623 Emerson Street Vivre Fitness 625-631 Emerson Street multiple tenant office building 635 Emerson Street Acme Glass building, single tenant office 643 Emerson Street Buca di Beppo Restaurant 651 Emerson Street Empire Tap Room Restaurant 203 Forest Street * office tenant (originally drive-through cleaners) * The four property addresses located on the two corner parcels are noted with an asterisk above. Discussion Existing GF Zones in Downtown Palo Alto Attachment H to this report is a map showing the existing locations of the Ground Floor Combining District downtown. The GF combining district is proposed to be expanded from the intersection of Hamilton Avenue and Emerson Street down the 600 block of Emerson Street and around the corner properties with Forest Avenue addresses, as reflected on Exhibit 1 of the Draft Ordinance. Incentives for Retail Use One topic PTC requested staff to explore for the March 5, 2013 hearing was possible incentives to rent ground floor space to new retail uses rather than office uses. Staff noted that the GF and non-conforming use zoning code provisions may give property owners with existing office City of Palo Alto Page 5 tenants a disincentive to convert to retail use, because once space is rented to a retail tenant, the space can no longer be converted back to office. Staff noted that, if office rents are higher than retail rents, it is unlikely current office landlords will jeopardize this flexibility. Staff also reported that it was likely the Downtown Development Cap analysis would explore potential incentives for retail. Existing Ground Floor Office Use There are six addresses on this block of Emerson Street containing office space. Two properties have “Grandfathered” office uses; 625-641 Emerson and 635 Emerson, and four tenant spaces will have “Legal Non-Conforming” office use following the rezoning; these spaces are located in the two corner buildings; 203 Forest (formerly Cardinal Cleaners), and the street fronting spaces of Forest Plaza Building A Ground Floor commercial condominium (having the addresses 171 and 175 Forest and 698 Emerson). The office space located in the rear of Forest Plaza Building A is not street facing and is not proposed for inclusion in the rezoning. The March 5, 2013 staff report provided information regarding the differences between “grandfathered” and “legal non-conforming” uses. The report clarified that (1) the regulations for the CD-C and CD-S zones allow current ground floor office uses to continue, despite the proposed GF rezoning; (2) both non-conforming and “grandfathered” uses are subject to replacement with conforming uses following a vacancy of 12 months; (3) the GF Zone allows lobby area on the ground floor to serve upper floor offices, and allows office uses permitted in the underlying CD District to occupy up to 25% of the ground floor, as long as the office area is “not fronting on a street”; (4) buildings with ‘grandfathered’ or ‘non-conforming uses’ may be remodeled, improved, or replaced on the same site, for continual use and occupancy by the same use, provided such remodeling, improvement, or replacement does not increase floor area, shift the building footprint, or increase the building’s height length, building envelope, or any other increase in the size of the improvement. The report also described additional regulations for nonconforming uses that are not applied to “grandfathered uses”, information regarding existing buildings and uses (Attachment I), and applicable Zoning Code sections (Attachment J) regarding non-conforming uses (Chapter 18.70) and the Ground Floor Combining District (Chapter 18.30.C). Resource Impact There is no resource impact anticipated from implementation of this rezoning. Existing ground floor uses may remain as currently in place; if an office space is vacant for 12 months, the subsequent land use would need to be a conforming land use. The intent of the provisions is to preserve the revenue-producing uses on the street, and over time to encourage conversion of non-revenue-producing uses (offices) to revenue-generating uses. Such conversions could result in future increases in City revenues. City of Palo Alto Page 6 Policy Implications In addition to policies that support the retail vitality of the University Avenue/Downtown area, the Palo Alto Comprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: “Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University Avenue/Downtown area. Keep the Planning Commission and City Council advised of the findings on an annual basis.” Environmental Review This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. Courtesy Copies Property owners and tenants of Emerson Street Downtown Business District Representative, Russ Cohen Attachments:  Attachment A: Draft Ordinance 2013 GF Emerson (DOC)  Exhibit 1: Parcels on Emerson between Hamilton and Forest to be Rezoned (PDF)  Exhibit 2: List of Properties to be Rezoned (XLSX)  Attachment B: Colleagues Memo, 11-5-12 (PDF)  Attachment C: Council Minutes, 11-5-12 (PDF)  Attachment D: PTC Report January 30, 2013 w/o attachments (PDF)  Attachment E: PTC January 30, 2013 Excerpt Minutes (PDF)  Attachment F: PTC Report March 5, 2013 w/o attachments (PDF)  Attachment G: PTC March 5, 2013 Draft Excerpt Minutes (PDF)  Attachment H: Map of Existing GF in Downtown (2009) (PDF)  Attachment I: Emerson Street Statistics (PDF)  Attachment J: Code Section 18.30(c) and 18.70 (PDF) 1 Attachment A DRAFT ORDINANCE ____ ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SECTION 18.08.040 (THE ZONING MAP) OF THE PALO ALTO MUNICIPAL CODE TO ADD THE GROUND FLOOR COMBINING DISTRICT TO CERTAIN CD-C(P) AND CD-S(P) ZONED PROPERTIES ON EMERSON STREET BETWEEN HAMILTON AVENUE AND FOREST AVENUE The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. The City Council finds that: (a) The Planning and Transportation Commission, after duly noticed public hearings on January 30, 2013 and March 5, 2013, reviewed, considered, and recommended Palo Alto Municipal Code (PAMC) Section 18.08.040 (The Zoning Map) be amended to rezone certain CD-C(P) and CD-S-P zoned properties fronting Emerson Street between Hamilton Avenue and Forest Avenue to add the Ground Floor (GF) Combining District, as shown on the attached map (Exhibit 1) and set forth on the attached list (Exhibit 2). (b) The Council held a public hearing on April 8, 2013, and considered the recommendation by staff and the Planning and Transportation Commission. (c) The proposed Ordinance is in the public interest and will promote the public health, safety and welfare, in that it will encourage retail on Emerson extending the retail ambience of downtown, and is consistent with the City’s Comprehensive Plan. SECTION 2. Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by adding the Ground Floor (GF) combining district to the properties shown on Exhibit 1 (map) and listed in Exhibit 2. SECTION 3. This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. SECTION 4. This ordinance shall be effective on the thirty-first day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: 2 ABSTENTIONS: ABSENT: ATTEST: APPROVED: __________________________ City Clerk APPROVED AS TO FORM: __________________________ Assistant City Attorney __________________________ Director of Planning and Community Environment _________________________ Mayor _________________________ City Manager Lot RHigh StreetPkg Garage LyttonPlaza Undergroundarking Garage Civic Center Plaza Parking WholM E-Trade 136 61 0 116-122 150 53 552952 5 54 2 51640 102 16 24 163 145 566 556 167 528 643635 63 5 645- 685 660- 666 620 180 164 158 156 624 628 632 636 640 644 617 621 151-165 171-195 203 642 640 636 200 514 630616 208 228 220 240 575 530- 534 536 540 552 177 156 201 209 215 225 595 229 231 611-623 80 508 500 625-631 170 172-174 542 544 538- 542 552548 546 541- 547 230-238 734 723 721 702- 730220-244 701 731 755 757 160 728-732 762- 776740- 250 275 270 741 72 73 651 221-225 227 668 235530 22020 B 222 240 274 270 250 545 5 581 533 535 537 261 267 51 532- 536 520-526 53 555 623 137 145 700 780744 1700 753 100 703 100 101 139654 735 707 718 761 795745 759 223-23 539 168 727 733 230 715 200 150 158162 164 698 161 159 157777 132 528 247 658 539 115 135 739 650 551 548 668 539 202 716 218 725 705 541 600 EMERSON STREET RAMONA STREET ALMA STREET EMERSON STREET HIGH STREET HIGH STREET HAMILTON AVENUE HAMILTON AVENUE EMERSON STREET FO R E S T A V E N U E RAMONA STREET RAMONA STREET LANE 7 EASTLANE 5 EAST LANE 6 EAST LANE 12 WEST LANE 11 WEST CENTENNIAL WALK HIGH STREET ALMA STREET ALMA STREET FO R ES T A V E NU E This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Parcels on Emerson to be Rezoned to CDC & CDS (GF) (P) Tree 0'145' CD C ( P ) a n d C D S ( P ) P a r c e l s on Em e r s o n S t . and For e s t A v e pro p o s e d t o b e r e z o n e d t o CD C ( G F ) ( P ) & C D S ( G F ) ( P ) CITY OF PALO ALTOINCORPORATED CALI FORNIA P a l o A l t oT h e C i t y o f APRIL 1 6 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2013 City of Palo Alto rrivera, 2013-03-25 14:53:51 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) APN CURRENT TENANT/USE PARCEL STREET ADDRESS 120-27-027 Buzz All Stars, Shift (offices)644 EMERSON 120-27-026 Romi Boutique, Sumner Gallery, Tacolicious, Gordon Biersch624-640 EMERSON 120-27-025 Stanford Florist 620 EMERSON 120-27-007 Epiphany Hotel 180 HAMILTON 120-27-019 Empire Tap Room Restaurant 651 EMERSON 120-27-020 Bucca de Beppo Restaurant 643 EMERSON 120-27-021 120-27-022 Acme Glass' (offices)635 EMERSON 120-27-023 Multi-tenant office 625-631 EMERSON 120-27-024 Vivre Fitness 611 EMERSON 120-27-018 Offices 203 FOREST 120-61-001 Anna Eshoo's Office 698 EMERSON (street facing space) "Anheuser Busch Beer Garage 171 FOREST (street facing space) "Anheuser Busch Beer Garage 175 FOREST (street facing space) PARCEL OWNER OWNER'S ADDRESS OWNER'S CITYSTATEADDRESS 648 EMERSON INVRS LLC C/O VENTANA PROPERTY SERVICES 975 HIGH ST PALO ALTO CA 94301 PALO ALTO THEATRE CORPORATION 700 EMERSON ST PALO ALTO CA 94301 KRUCKER RUTH E TRUSTEE STANFORD FLORISTS CO.620 EMERSON ST PALO ALTO CA 94301 CASA OLGA 180 HAMILTON AV PALO ALTO CA 94301-1618 TSENG ALEXANDER A S AND MARTHA L TRUSTEE &1689 HAMILTON AV PALO ALTO CA 94303-2830 MAXWELL DONALD R AND THERESA M TRUSTEE & ET W MICHAEL SAVIN 4150 CRESTHAVEN DR WESTLAKE VILLAGE CA 91362 MELCHOR CORPORATION 635 EMERSON ST PALO ALTO CA 94301-1610 MELCHOR CORPORATION 635 EMERSON ST PALO ALTO CA 94301-1610 THOITS BROS INC 629 EMERSON ST PALO ALTO CA 94301 THOITS BROS INC 629 EMERSON ST PALO ALTO CA 94301 203 FOREST LLC c/o DAVE KLEIMAN 333 HIGH STREET PALO ALTO, CA 94301 BAER FOREST PLAZA 2 DELWR LLC/MORTGAGE INVESTORS VII LLC 3105 WOODSIDE ROAD WOODSIDE, CA """ """ PALO ALTO CA 94301-1618 PALO ALTO CA 94303-2830 WESTLAKE VILLAGE CA 91362 PALO ALTO CA 94301-1610 PALO ALTO CA 94301-1610 City of Palo Alto COLLEAGUES MEMO November 05, 2012 Page 1 of 2 (ID # 3282) DATE: November 5, 2012 TO: City Council Members FROM: Vice Mayor Scharff, Council Member Schmid, Council Member Holman SUBJECT: COLLEAGUES MEMO FROM VICE MAYOR SCHARFF AND COUNCIL MEMBERS HOLMAN AND SCHMID REGARDING RE-EVALUATION OF GROUND FLOOR RETAIL PROTECTIONS IN THE DOWNTOWN COMMERCIAL DISTRICT Recommendation Staff should return to Council with a detailed proposal to require retail retention in some or all of the Downtown Commercial (CD) district outside of the current Ground Floor (GF) Retail Overlay, and to extend the Downtown Ground Floor (GF) Retail Overlay to areas of Downtown that would form a pedestrian gateway to new developments and facilities in or around the transit station. The proposal should also examine bringing into compliance any non-conforming uses within the Downtown Commercial (CD) District within the Downtown Ground Floor (GF) Retail Overlay particularly on University Avenue. Furthermore staff should also examine the sites taken out of the Ground Floor (GF) Retail Overlay list in 2009 and recommend whether the designation should be extended to these and/or other properties in the area. Background On November 16, 2009, the City Council voted to remove Ground Floor retail protection from 13 properties along University, Alma, Hamilton and High. These were described as ‘on the periphery of the downtown’ and ‘outside of the retail core’ of University Avenue and its side streets. The ordinance change also included deleting requirements elsewhere in the Downtown Commercial (CD) zone that until that time mandated that existing retail and personal service uses could not be converted to office space. In the interim, several retail properties in the CD zone have converted to office space including Fraiche Yogurt and a shoe store on Emerson Street, the Blue Chalk Café, and Jungle Copy. Other stores, some long-standing Palo Alto retailers, are rumored to be under consideration for conversion to office. In particular, the Emerson Street corridor provides a rich retail-restaurant November 05, 2012 Page 2 of 2 (ID # 3282) corridor, including Gordon Biersch, Mantra, Empire Grill and Tap Room, Buca de Beppo, Stanford Florist, Richard Sumner Gallery and other establishments, all of which are now vulnerable to office conversion. In addition, at the November 2009 Council meetings, staff and Council members acknowledged that the sites removed from the GF overlay in the Hamilton/Alma/University block could become more attractive for retail use as the entry to the train station and connections with Stanford are enhanced. The Planning Director suggested that the proposed Ordinance changes “return to the City Council in a few years to discuss updates, benefits or unintended consequences, and make modifications, if necessary.” Given the approval of the Lytton Gateway project and desirability of better connections to the Stanford Shopping Center and the west side of El Camino Real as part of the Stanford Medical Center approvals and resultant Development Agreement funding to enhance that connection, and the potential for enhancements to the pedestrian tunnels at University Avenue and Lytton Avenue, the City should examine the pedestrian-retail environment in the Downtown Area and consider an extension of the GF Zone to the emerging ‘gateway’ areas of Lytton, University, Alma, Hamilton and High Streets. Conclusion Given the changes in the economic climate in Palo Alto and Silicon Valley, particularly recent and proposed substantial increases in Downtown office space, the City should examine options to assure a vital retail environment and services to support Downtown and the community. This is an appropriate time to re-evaluate the rules for Ground Floor Retail in the Downtown Commercial District. Council Approved Minutes from November 05, 2012 ACTION ITEMS 18. Colleagues Memo from Vice Mayor Scharff and Council Members Holman and Schmid Regarding Re-evaluation of Ground Floor Retail Protections in the Downtown Commercial District. Vice Mayor Scharff recalled in 2009 the Council determined the matter of Ground Floor Retail Protections in the Downtown Commercial District should return for further discussion at a later time. The office market was incredibly strong and there was strong economic pressure to convert retail space to office space. The Council needed to consider where retail space could be lost in Downtown. The primary corridor of concern was Emerson Street and it needed to be protected quickly. The Council also needed to review the flow of retail in Downtown. Retail business worked best when the flow was not broken by a non- retail use. He wanted to review non-conforming uses on University Avenue that interrupted the flow. There were other broader issues that needed to be examined but they were not as pressing. The near-term issue was protecting areas where retail space could be lost. Council Member Holman reported in 2009 she did not support the conversion of zoning to remove ground floor retail protections. The interruption of retail and service businesses was detrimental to the retail environment and the tax base. The block bordered by Hamilton Avenue and Forest Avenue did not have ground floor protections and connected the Downtown District with the South of Forest Avenue Phase II (SOFA II) District. The Council needed to focus changes to provide ground floor protections there. Adjacency was critical to retail and service businesses. In attempting to connect University Avenue and the Downtown District to the Stanford community, the Council needed retail and service businesses that attracted people. Some non- conforming uses should be reviewed. Council Member Schmid indicated the prior discussion of the issue occurred during a recession. Retail space was currently performing well throughout the Downtown area. Because commercial office space was performing better than retail space, there was an economic incentive to create or transform retail space into commercial space. The number of housing units expected from the Downtown area was a small portion of the total number of units for Palo Alto. With services and mass transit located nearby Downtown should be a center point of mixed uses. In exchange for the tremendous economic benefit given to Council Approved Minutes from November 05, 2012 the community there should be some public benefit. It made sense to enhance the vitality of the district by protecting ground floor retail. Council Member Burt was receptive to having Staff return with recommendations on methods for retaining retail uses on Emerson Street. Other elements of the Colleagues Memo should be considered as part of the Downtown Development Cap Study. He inquired whether Staff had the capacity to compile recommendations for all elements of the Memo versus dividing the elements as he described. Curtis Williams, Director of Planning and Community Environment, reported recommendations for all elements would be a large task. To focus initially on the Emerson Street corridor would be more manageable and would be a logical means to dividing the work. Part of the Downtown Development Cap Study would address some elements in any event. James Keene, City Manager, stated Staff could return to the Council prior to the end of the year with a schedule identifying a priority or hierarchy of elements. Including it with the Downtown Development Cap Study was logical. Remapping and rezoning uses was an added dimension to the Development Cap Study. Council Member Price felt the original intent of the Memo was too broad. She was somewhat interested in reviewing the Emerson Street corridor as part of the Downtown Development Cap Study. She expressed concern that it was a piecemeal approach and about the capacity of Staff to perform the work. Trying to define baseline economic conditions as well as the number of variables was problematic. Council Member Klein agreed with Council Member Price's comments. He did not see a problem and felt Downtown was remarkably vibrant. This was not a priority when compared to other assignments given to Staff. He could not support the recommendations set forth in the Memo. Council Member Espinosa wanted to understand the proposal. He inquired whether Staff interpreted the proposal to require a study or to state a requirement for retention. Council Approved Minutes from November 05, 2012 Mr. Williams stated a certain level of data analysis and some discussion of economic impact was needed before Staff could formulate recommendations. Staff had to follow the public process in terms of engaging the Downtown community and the Planning and Transportation Commission (P&TC). Council Member Espinosa asked Staff to discuss the involvement of the public and Downtown businesses and property owners in the process. Mr. Williams felt Staff would need to engage with businesses and property owners to determine impacts to them. The residents around the area would be interested in the issue and offer input. Staff's recommendations would be submitted to the public hearing process because there would be changes to the Zoning Code. Council Member Espinosa inquired when Staff might return to the Council with preliminary information. Mr. Williams indicated Staff could return to the Council in the spring if the work program allowed it. Staff could return sooner if they could focus on the Emerson Street corridor only. Council Member Espinosa felt the project was a massive undertaking for Staff. He wanted the Council to understand the project and the amount of work involved. Council Member Shepherd understood in 2009 Staff reviewed each building to determine whether or not retail was the best use for the building. She asked if that was the process Staff used and how much retail space was eliminated. Mr. Williams characterized the process as a block-by-block analysis with particular attention to blocks in the ground floor retail zone. The analysis had three components: 1) removing and adding blocks to the ground floor protection zone, 2) imposing restrictions on some blocks that they could not convert from retail space to office space, and 3) temporary allowances for conversion of retail space to office space once a certain vacancy rate was exceeded. With these changes, Staff hoped the core retail space would be strengthened with flexibility to change between retail space and office space on the perimeter of the District. Council Approved Minutes from November 05, 2012 Council Member Shepherd noted the efforts made in the analysis, and asked if the changes were intended to last only a few years. Mr. Williams indicated the changes were not intended to be for a few years only. Because zoning and circumstances change there could be good reasons for reviewing the zoning. In 2009, Staff noted the corridors to the train stations were not good retail spaces and it could be appropriate in the future to change that view. Mr. Keene reported in 2009 the City was at risk of losing important ground floor retail space to office space under existing policies. That process contained a series of trade-offs in restrictions and temporary allowances. The current proposal was not the same; it would extend retail space and require it in places that currently had flexibility. It was difficult to predict the scope of the work. If the Council accepted some incremental changes, Staff could manage that more easily. Council Member Shepherd inquired whether there had been any unintended consequences from the 2009 changes. Mr. Williams reported there were no unintended consequences from Staff's perspective. The most serious concern about use changes was the Emerson Street corridor. He believed the P&TC originally recommended including Emerson Street in the ground floor overlay. Because it was not included the corridor had been a point of contention. Russ Cohen, Executive Director of Downtown Association, stated peripheral retail businesses were struggling in 2009 and that resulted in zoning changes. An unintended consequence of changing zoning back could be vacated storefronts. The business community met with Staff to discuss zoning changes and concluded unanimously that no further changes were necessary. It was too soon to reevaluate the 2009 changes. Larry Jones enjoyed the hometown feel of Palo Alto and that was one reason people liked living in Palo Alto. Employee morale was better at Downtown businesses than at industrial parks. The Council had a responsibility to protect the retail businesses in Palo Alto. Faith Bell reported the corridor on Emerson Street had small businesses because the rents were less expensive. Chain stores could afford the rents charged on University Avenue. The City had to protect Council Approved Minutes from November 05, 2012 the small corridors with small buildings in order to have independent businesses. Robert Moss stated ground floor offices had problems such as high population density. Office space did not pay sales tax and did not attract foot traffic in the evenings or on weekends. He suggested the Council extend ground floor retail from Alma Street to Waverly Street and from Lytton Avenue to Hamilton Avenue for a two or three-year period to allow Staff time to make recommendations. Retail businesses in Downtown increased viability for fringe neighborhoods. Council Member Holman felt there was a misunderstanding in that the primary purpose of the Memo was to provide ground floor protections for the Emerson Street corridor between Hamilton Avenue and Forest Avenue. Studying one block should not take a great deal of time. The purpose of zoning was to enforce and support community values and uses. The marketplace would work within zoning. The Council's responsibility was to provide safeguards for the community. Local, independent businesses provided more revenue to the City in a variety of ways. The intention was to consider small areas initially and review the larger context. The Council should focus on the Emerson Street corridor and the connection of University Avenue to the train station. In the short term, the Council needed to address these two critical areas. MOTION: Council Member Burt moved, seconded by Vice Mayor Scharff to request Staff: 1) return to Council with a proposal to retain retail on Emerson Street between Hamilton Avenue and Forest Avenue and 2) as part of the review of the Downtown Development cap direct Staff to review the boundaries of the ground floor overlay and evaluate bringing into compliance non-conforming uses within the ground floor overlay area of the downtown Commercial District (CD). Council Member Burt inquired about including a reasonable timeframe in the first part of the Motion. Mr. Keene indicated the Motion was a directive for Staff to proceed. He did not believe there was a need to include a timeframe. If the Motion passed, Staff would work to effect the change and notify the Council when it could be done. The timeframe to return to the Council was effected by the second part of the Motion. Council Approved Minutes from November 05, 2012 Council Member Burt stated the Motion addressed the more pressing issue and provided guidance for a deliberate analysis of the remaining two issues. Vice Mayor Scharff felt the Motion prioritized the Emerson Street corridor. Once retail connections were broken, they could not be re- established. It was important for the Council to be proactive. Council Member Espinosa inquired about the process Staff would follow to develop the proposal. Mr. Williams reported Staff would hold conversations with property owners regarding concerns and then provide a draft Ordinance to the P&TC before returning to the Council. Council Member Klein felt there were three parts to the Motion. Council Member Burt indicated the two parts of Number 2 under the Motion would be performed as part of the Downtown Development Cap review. Council Member Klein asked if one part failed would both parts fail. Council Member Burt asked for clarification. Council Member Klein supported the first part of the Motion but not the second and third parts. The latter two parts created a vast work program. A problem had not been presented that justified that amount of work. He requested the Motion be separated for voting. Council Member Burt inquired why Council Member Klein requested the Motion be separated. Council Member Klein stated other Council Members might support portions rather than all of the Motion. Part 2 of the Motion created work when a problem had not been defined or identified. He recalled the Council considering Emerson Street in detail in 2009. AMENDMENT: Council Member Klein moved, seconded by Council Member Price, to delete from the main Motion number 2: “2) as part of the review of the Downtown Development Cap direct staff to review the boundaries of the ground floor overlay and evaluate bringing into compliance non-conforming uses within the ground floor overlay area of the downtown CD District.” Council Approved Minutes from November 05, 2012 Council Member Price agreed with Council Member Klein's comments. Part 2 of the Motion should be considered in the examination and creation of the Scope of Services for the Downtown Development Cap. It was premature to consider part 2 of the Motion. Vice Mayor Scharff felt the Motion included part 2 of the Downtown Development Cap Study. Council Member Price viewed the Motion as narrowly defining the Scope of Services when compared to the original Colleagues Memo. The Council had not given enough thought to part 2 and that could be done when the Council considered the scope of the Downtown Development Cap. Vice Mayor Scharff indicated the Motion stated the review would be part of the Downtown Development Cap. The perfect time to consider part 2 was when the Council reviewed the Downtown Development Cap. Bringing matters into compliance was a fairly narrow task. He did not support the Amendment because it was important to have a comprehensive review of retail space as part of the Downtown Development Cap Study. Council Member Schmid inquired whether the Downtown Development Cap reviewed the total commercial and retail space in Downtown. Mr. Williams reported it considered commercial and retail space in the CD zoning district in Downtown. Council Member Schmid asked if a review of the Downtown Development Cap included a review of the distribution between retail office and office space. Mr. Williams reported that was correct in a narrow construction. Staff anticipated reviewing the balance of the types of uses because one of the drivers was parking and each use had different implications for parking. Council Member Schmid indicated the Council was adding a new element to the review of the Downtown Development Cap. The most critical element was the City's Economic Development Program. The City generated considerably more revenue from retail uses than from office complexes; therefore, the City had a vested interest in a growing retail sector. In studying the Emerson Street corridor, the Council Approved Minutes from November 05, 2012 Council had to determine how to retain a vibrant retail sector. The wider issue was whether the City had a vested interest in building a vibrant and vital retail sector in Downtown. Council Member Holman did not support the Amendment. The Emerson Street corridor should be part of the work plan for Staff, who should review the retail component when evaluating an office cap in Downtown. Council Member Espinosa supported the Amendment. He supported the first part of the Motion because the process would engage stakeholders and assist the Council in evaluating the proposal. With regard to the second portion of the Motion, he did not disagree with the broader study; however, he did not believe it was the correct approach. Council Member Shepherd inquired about the composition of parking for retail space versus office space. Mr. Williams stated that issue would be included in the study. The Zoning Code requirements for parking within the Parking District were the same for retail space and office space. Outside the Parking District, more parking was required for retail space than for office space. However, the changing characteristics of office space was driving higher employee density. Retail space mixed with office space in the Downtown environment tended to promote walkability such that parking was not as much of an issue on the retail end. For those reasons, the Downtown Development Cap Study was necessary to study the reality of the parking situations. Council Member Shepherd supported the Amendment. Council Member Burt reported the primary Motion was not prescriptive with regard to outcome. In the process used to evaluate the Downtown Development Cap, Staff would also evaluate the relationship of retail space. The Motion asked Staff to evaluate new, appropriate boundaries and non-conforming uses. If the Motion stated boundaries for the entire Downtown area, then he would not support it. This was exactly where planning should occur. Mayor Yeh noted Agenda Item Number 21 concerned the Downtown Cap/Transportation Demand Management (TDM) Study. He inquired if Council Approved Minutes from November 05, 2012 Staff intended for the Scope of Services of that study to return to the Council or a Standing Committee. The Motion's intentions had to be vetted in the broader discussion of the Scope of Services of the Downtown Development Cap. Mr. Williams reported the specifics of the study were not outlined in the Staff Report. After evaluating the Parking Study and its importance, Staff needed to return to Council or the Policy and Services Committee with the scope of work for that study. It was a significant study regarding parking and land use. Mr. Keene felt the recommendation as written could be misconstrued. Staff could not issue a Request for Proposal (RFP), perform the Downtown Development Study, and provide results and recommendations in six months. A year would be a more appropriate timeframe. Mayor Yeh did not want to make a decision on the second half of the Motion without understanding the potential fiscal impacts and how they would influence the study. INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF MAKER AND THE SECONDER at the time of the Scope of Services review of the Downtown Development Cap / Traffic Demand Management (TDM) Study, Staff shall bring back costs associated with: “as part of the review of the Downtown Development Cap direct Staff to review the boundaries of the ground floor overlay and evaluate bringing into compliance non-conforming uses within the ground floor overlay area of the downtown CD District.” Council Member Klein felt the Council had approached the whole matter backwards. It could be misinterpreted by the downtown business community. He suggested Mayor Yeh support the Amendment and then add language to the original Motion. Mayor Yeh indicated his intention was to delete part 2 of the Motion and add his proposed language. He could not support the Motion, because it directed Staff to perform the action without first presenting the costs to the Council. Vice Mayor Scharff supported an Amendment to the Motion that Staff return to the Council with costs before performing the second part of the Motion. Council Approved Minutes from November 05, 2012 Council Member Holman stated the Amendment was to delete part 2 of the Motion. She asked how the Council could amend language that was proposed to be deleted. Mayor Yeh explained that his proposed Amendment was not to move forward on part 2, but to direct Staff to return with costs associated with part 2 at the time the Council discussed the Scope of Services. Council Member Holman suggested it was an Amendment to the Motion rather than an Amendment to the Amendment. Council Member Klein stated the Scope of Services Mayor Yeh was referencing was the Scope of Services for the Downtown Development Cap Study. He accepted the proposed Amendment. Council Member Price expressed concern that Staff would detail a Scope of Services, but she accepted the Amendment. Council Member Holman was unclear as to the intention. She asked the Mayor to vote on the Amendment and then amend the Motion. Mayor Yeh clarified that the Amendment would pass with his vote and then the Motion would be unnecessary. Council Member Klein felt the Council voted on language that was quite different from the Colleagues Memo recommendation. Mr. Keene suggested the Motion clearly state the Council's intentions. Council Member Klein stated the costs would be presented with the complete work plan for the Downtown Development Cap Study. Mr. Keene suggested the Motion clarify that presenting the costs would not automatically allow Staff to proceed. The real issue was how to review the scope of actions necessary for the Downtown Development Cap Study. He suggested the Council move on the first part of the Motion and then direct Staff to return with a comprehensive discussion of the Downtown Development Cap Study. Council Member Holman was confused regarding the language of the Amendment. Council Approved Minutes from November 05, 2012 INCORPORATED INTO THE MAIN MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to delete from the main Motion number 2 and at the time of the Scope of Services review of the Downtown Development Cap / Traffic Demand Management (TDM) Study, Staff shall bring back costs associated with: “2) as part of the review of the Downtown Development Cap direct staff to review the boundaries of the ground floor overlay and evaluate bringing into compliance non-conforming uses within the ground floor overlay area of the downtown CD District.” Council Member Burt clarified that Number 2 of the Motion was deleted as he had accepted the Amendment. MOTION AS AMENDED PASSED: 8-1 Shepherd no City of Palo Alto (ID # 3430) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 1/30/2013 City of Palo Alto Page 1 Summary Title: Rezone Emerson Street Fronting Properties on 600 Block Title: Rezoning to Apply the Ground Floor (GF) Combining District (Section 18.30(C) of the Municipal Code) To Properties in the 600 Block of Emerson Street From: Amy French, Chief Planning Official Lead Department: Planning and Community Environment Recommendation Staff recommends that the Planning and Transportation Commission (PTC) consider the attached draft ordinance (Attachment A) to amend Palo Alto Municipal Code Section 18.08.040 (Zoning Map) to add the Ground Floor (GF) Combining District (Section 18.30(C) of the Municipal Code) to the properties shown on Exhibit 1 and listed by address on Exhibit 2 of the Draft Ordinance, generally those with frontage on the 600 block of Emerson Street between Hamilton Avenue and Forest Avenue, take public testimony, discuss the staff recommendation, and continue the item to February 13, 2013 to allow for additional public testimony in a public hearing prior to voting on a recommendation on February 13, 2013. Background The GF combining district code section (Palo Alto Municipal Code (PAMC) Section 18.30(C).010) limits ground floor uses. Allowed uses include retail, eating and drinking, and other service- oriented commercial uses. This combining district is primarily used downtown but was also applied, in 2001, to properties along Middlefield Road in Midtown. The GF regulations were initially implemented in 1986 with the creation of the CD zoning district as a subsection within that code chapter, and was delineated separately in 1992 to become a combining district. The only significant text changes between 1986 and 2009 was the inclusion of conditional uses such as commercial recreation, daycare, financial services, and others (see Attachment E for full list of GF uses). City of Palo Alto Page 2 2009 Rezoning In 2009, the GF code was modified to remove the ‘Use Exception’ provision that was part of the original 1986 code language. This provision was triggered when the vacancy rate for ground floor properties within the GF combining district was five percent (5%) or greater. Before the 2009 change, an applicant could show that the location had been vacant and available for six months or more, and the Director could issue a Use Exception (which was different than a Use Permit). The vacancy rate reached that threshold in 2009, the first time that occurred since monitoring reports were prepared for the prior 20 years. Removal of the provision prevented potential conversions of retail and service uses to office use in this core area during the economic downturn. Along with the removal of the Use Exception provision, the Ordinance Council approved in 2009 rezoned portions of the Downtown to add and remove the GF Combining District (see Attachment D, map). Council added the “GF” overlay to three CD-C (P) zoned properties on the 400 block (Aquarius Theater block) of Emerson Street (412, 420 and 430 Emerson) and the properties fronting Hamilton Avenue on the south side of the street between Emerson and Ramona Streets (the Reposado restaurant block), to match the north side of Hamilton, which was already zoned CD-C (GF)(P). Council approved the removal of the GF combining district from 13 properties along University Avenue (near Alma), Alma Street, Hamilton Avenue (near Alma), and High Street (between Hamilton and University). The CD district outside of the GF zone was amended to allow greater flexibility to vary from office to retail and vice versa. The wording of the CD District Development Standards Section 18.18.060, item (f)(1), however, was modified to require that the design of ground floor space “accommodate retail use” – but not require such use - in the CD-C zone, as follows: “New construction and alterations in the CD-C zoning district shall be required to design ground floor space to accommodate retail use and shall comply with the provisions of the Pedestrian (P) combining district.” 2012 Colleagues Memo and Council Direction On November 5, 2012, a Colleagues Memorandum from Vice mayor Scharff and Council members Holman and Schmid was presented to Council (Attachment B), expressing concern about recent conversions from retail to office in some areas of downtown (including Emerson Street) and other suggestions to preserve and enhance downtown retail. The memo noted that “the Emerson Street corridor provides a rich retail-restaurant corridor, including Gordon Biersch, Mantra, Empire Grill and Tap Room, Buca de Beppo, Stanford Florist, Richard Sumner Gallery and other establishments, all of which are now vulnerable to office conversion.” The memo concluded that “the City should examine options to assure a vital retail environment and services to support Downtown and the community.” City of Palo Alto Page 3 During Council discussion, Vice Mayor Scharff noted, “Emerson Street needs to be protected quickly.” The Planning Director noted that the Planning and Transportation Commission (PTC) had considered adding the GF combining district to Emerson Street fronting properties on the 600 block in the 2009 ordinance changes, but Council did not adopt that recommendation. Councilmember Holman noted the Colleagues Memo was intended to have Council focus on protecting retail on the Emerson Street block, which connected the Downtown District with the South of Forest Avenue Phase II (SOFA II) District. The motion Council approved on an 8-1 vote included that “staff return to Council with a proposal to retain retail on Emerson Street between Hamilton Avenue and Forest Avenue.” Minutes of the Council meeting are provided as Attachment C. Map Amendment Process Amendments to the Zoning Map and Zoning Regulations are regulated by PAMC Chapter 18.80. As in any rezoning process, Initiation of the rezoning by either the Planning and Transportation Commission or Council is required – in this case, by Council (Section 18.80.020 (b)) – the motion statement must describe in general terms, the reasons for consideration of a change in district boundaries. The Council memo and discussion served that purpose. The next step is consideration and recommendation of a draft map and associated Ordinance by the Planning and Transportation Commission in a public hearing (pursuant to Section 18.80.060). The PTC action is set forth in Section 18.80.070 (Attachment F). The PTC must determine that the change of boundaries as presented (or as modified) is in accord with the purpose of Title 18 and in accord with the Palo Alto Comprehensive Plan. If the PTC desires to modify the area to be rezoned such that additional properties are affected, the PTC must determine that the public interest will be served and additional notice would be required. A PTC recommendation would be followed by Council action on the ordinance. If Council approves the ordinance, a second reading of the ordinance would finalize the action and the ordinance would become effective 30 days later. Discussion Staff recommends that the following CD-C(P) zoned properties, located on both the west and east sides of Emerson Street between Hamilton Avenue and Forest Avenue, be rezoned to add the Ground Floor (GF) Combining District: West side of Emerson Street, north to south:  180 Hamilton Avenue (Casa Olga, under conversion to The Epiphany Hotel)  620 Emerson Street (Stanford Florist)  624-640 Emerson building: o 624 Emerson (Romi Boutique Retail Clothing) City of Palo Alto Page 4 o 628 Emerson (Richard Sumner Gallery Retail Art, Frames, Prints) o 632 Emerson (Tacolicious Restaurant, previously Mantra) o 636 and 640 Emerson (Gordon Biersch Restaurant)  644 and 648 Emerson Street (offices of Buzz All Stars and Shift) East side of Emerson Street, north to south:  611-623, Emerson Street (Vivre Fitness)  625-631 Emerson Street (multiple tenant office building)  635 Emerson Street (‘Acme Glass’ building, single tenant office)  643 Emerson Street (Bucca de Beppo Restaurant)  651 Emerson Street (Empire Tap Room Restaurant) Staff recommends the exclusion of two properties from the rezoning (698 Emerson Street and 203 Forest Avenue). The reasons for the exclusions are discussed in the Key Issues section below. Outreach Following the Council direction, staff invited all of the Emerson Street property owners and merchants to a meeting on December 18, 2012, to discuss the Council’s direction. Notice cards were sent to all property owners and merchants on the 600 block of Emerson Street. Only two of those invited attended, however:  Mr. David Kleiman, the property owner of 203 Forest Avenue.  Mr. Joseph Martinelli, the property owner of 644-648 Emerson Street. All affected property owners and tenants have been notified of the PTC’s hearing concerning the proposed rezoning. Summary of Key Issues The PTC is asked to review the draft ordinance to add the GF combining district to the CD-C (P) Emerson-fronting properties on the 600 block of Emerson Street, as indicated on Exhibit 1 of Attachment A (map) and listed on Exhibit 2. Key issues to be considered are 1) which properties to include or exclude, and 2) how to treat properties that will become non-conforming uses as a result of the rezoning. City of Palo Alto Page 5 Properties to be Rezoned GF As noted, the GF combining district code allows only specific uses on the ground floor: retail, eating and drinking, and other service-oriented commercial uses. Staff recommends that this block of Emerson be rezoned to add the GF Combining District to reflect the Council direction in the Colleagues memo. Council’s reasons are enumerated in the attached memo, minutes and quoted in the background section of this report. This block is known for its walkability and vitality, for its popular restaurants, and as a corridor or connection for pedestrians from the downtown core to Whole Foods and SOFA II area. The reason to apply the GF combining district to this block without further study or delay is that there are retail spaces vulnerable to conversion. Staff Recommended Exclusions The intersection of Emerson Street and Forest Avenue, however, is not a “retail” intersection, and therefore staff has excluded the following properties from the rezoning:  698 Emerson, Northwest corner of Emerson and Forest (Anna Eshoo’s office).  203 Forest, Northeast corner of Emerson and Forest (Kleiman, office). None of the buildings at this intersection was designed for retail use and all four properties are currently in office use (698, 700 and 701 Emerson Street, 203 Forest Avenue). 698 Emerson, zoned CD-S (P) with primary frontage on Forest Avenue, is included in an office building complex having primary frontage on Forest Avenue and High Street, and was excluded from the rezoning in 2009. 203 Forest, originally a drive-through dry-cleaning establishment (Cardinal Cleaners), turned fitness club (via CUP), is now office space. Though 203 Forest had been considered by the PTC for inclusion in 2009, staff does not recommend including it in the rezoning due to its location and the existing building’s features, including a design not conducive to retail use (solid walls, driveway in front). Creation of Non-Conforming Uses It is important to note that this rezone would create several “legal non-conforming” office uses. These office uses could continue as office use, according to Zoning Code requirements, as long as there is no lapse in occupancy for more than 12 months. If office use were to cease operation for 12 months or more, no new office use could be reinstated in the building, but any new use would need to comply with the uses allowed under GF zoning. Any proposal to demolish the building for new development would also be subject to the use restrictions of the GF combining district. One potential negative implication of the rezoning is that the lack of flexibility to convert from office to retail and back may encourage these property owners to City of Palo Alto Page 6 rent to office uses in the future, as they will not want to be “locked” into retail. One of the owners who attended the outreach meeting suggested that the City consider including a time period during which a property owner could try to find a tenant in order to retain a space as retail space, or to attempt to convert an office space to retail use. This alternative is similar to the Use Exception provision that was eliminated in the 2009 rezone. Staff did not consider this alternative further because the Council directed the block to be rezoned to GF. Therefore, properties would be treated the same as those on University Avenue, where there is no special Use Exception provision in place. Policy Implications In addition to policies that support the retail vitality of the University Avenue/Downtown area, the Palo Alto Comprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University Avenue/Downtown area. Keep the Planning Commission and City Council advised of the findings on an annual basis. Timeline Staff recommends the PTC continue the hearing to the PTC meeting of February 13, 2013, following initial discussion and public testimony on January 30, 2013, to allow for adequate public input and consideration prior to voting on a formal recommendation. The Council meeting of March 11, 2013 is targeted for first reading and adoption of the attached ordinance. Environmental Review This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. Courtesy Copies Property owners and tenants of Emerson Street Downtown Business District Representative Russ Cohen Attachments:  Attachment A: Draft Ordinance 2013 GF Emerson (PDF) City of Palo Alto Page 7  Attachment B: Council Colleagues Memo 11.05.12 (PDF)  Attachment C: Council Minutes 11.05.12 (PDF)  Attachment D: Commercial Downtown Map Indicating 2009 GF Zone Modifications (PDF)  Attachment E: GF Zone District Permitted and Conditional Uses (PDF)  Attachment F: Palo Alto Municipal Code Chapter 18.80 (Zoning Amendments) (PDF) 1 Planning and Transportation Commission 1 Verbatim Minutes 2 January 30, 2013 3 4 EXCERPT 5 6 Rezoning to Apply the Ground Floor (GF) Combining District (Section 18.30(C) of the 7 Municipal Code) To Properties in the 600 Block of Emerson Street 8 9 Chair Martinez: We are going to continue on with the Item 2, a public hearing to consider 10 rezoning to Ground Floor (GF) Combining District a portion of the 600 Block of Emerson Street. 11 And we are going to being with a staff report from our, what is your title now? 12 13 Amy French, Chief Planning Official: Chief Planning Official, please. 14 15 Chair Martinez: From our eminent Chief Planning Official. Thank you. 16 17 Ms. French: Good evening Chair and Commissioners. We have before you a proposal to rezone 18 the 600 Block of Emerson Street to add the Combining District called Ground Floor (GF). And 19 this came from the Council through a colleague’s memo that was discussed as reflected in 20 minutes provided to you in your report and summarized a bit in the report. The focus that the 21 Council wanted staff to go to was this Emerson Street, it was somewhat of an urgent request to 22 get right on it. There is some concern of some stores perhaps flipping to office. There’s been 23 one store that has gone that way Fraiche and that went to an office, office space. There’s another 24 store that’s the florist that is winding down and there’s some interest there. And so it is a vital 25 street. It provides restaurants and some retail shops. It’s a corridor that leads folks from the 26 parts of downtown to Whole Foods. It’s an active walking area. There’s a hotel on the way on 27 the corner there of Hamilton and Emerson. So it’s an exciting little strip of retail and restaurant 28 and some office. 29 30 So there’s an existing office there. One of the offices is 625 to 631 Emerson. That particular 31 address we did have a call from the property owner, Jim Thoits, who asked about what rights, 32 what does this mean, so I kind of explained that first of all that particular site is a Category 2 33 Historic Building. It has grandfathered office. Grandfathered is a term from our Zoning Code, 34 Chapter 18.18.120, that’s the section, and it allows continued use of office. If it goes 12 months 35 or more vacant then it’s subject to changing to a conforming use. So going with the Ground 36 Floor zoning if it were vacant for 12 or more months it would be subject to going to the allowed 37 or conditional uses in that district. Another concern that people might have of putting a GF 38 overlay would be if somebody decides to go from office to retail then you can’t go back to 39 office. So if a conforming use retail goes in there then it’s hard to go from, you can’t go from 40 retail back to office in the GF overlay. 41 42 There are provisions about replacing facilities that have nonconforming uses and you can 43 actually replace such facilities as long as you don’t increase the floor area for the nonconforming 44 uses: height, envelope, lot coverage, that sort of thing. So basically there’s a draft ordinance that 45 reflects tonight’s date that would be changed to the 13th. We were trying to get folks here from 46 the street. We did send out some notices. We had an outreach meeting where two property 47 owners attended. So we’re hoping the word gets out and some people might come to the meeting 48 on the 13th. So we were suggesting opening the public hearing and continuing to that date but 49 2 having a full discussion tonight on the thoughts you might have on the extent of the Ground 1 Floor overlay. The map that’s attached called Exhibit 1 to the draft ordinance shows the 2 properties that staff supports the Ground Floor overlay addition. 3 4 So I know at the pre-commission meeting there was a question about why is this not a taking. 5 And so if there’s an interest in that basically we did this back in 2009 so I’ll direct you to the 6 map. Up here we removed the Ground Floor overlay which was a lessening of restrictions on 7 these green reflected parcels. We added the Ground Floor overlay on these parcels and these 8 parcels. These parcels are abutting this Emerson block here. So that was not considered a 9 taking. Again, if a zoning district changes and there’s an existing legal nonconforming use 10 created from that zone change that use can remain. So it’s not a taking in that sense because it’s 11 not, we’re not amortizing the uses. And I’m here for questions. I’m sad that we don’t have any 12 of the property owners that I thought might be coming tonight. 13 14 Chair Martinez: So we don’t really have to make any recommendation or vote or anything 15 tonight. 16 17 Ms. French: That’s correct. 18 19 Chair Martinez: We’re going to give you some feedback. 20 21 Ms. French: Please. 22 23 Chair Martinez: And hopefully we’ll get some property owners either to write in or to come and 24 give us their view on how this would affect them. Could you talk about other blocks downtown 25 where there’s a Combining District and how well that is served property owners and the City and 26 residents? 27 28 Ms. French: Sure. Well again I go back to the 2009, where if you see here on this map that’s up 29 on the screen that we have the pink properties which are the Ground Floor Combining Districts. 30 This is the core of the downtown where in 2009 it was decided that this was the important area 31 that should remain primarily retail and services and not have those ground floor offices. 32 Whereas it was determined that these outer yellow areas were kind of on the boundaries of that 33 core and could, the market forces could come and go and have some flexibility. I think if 34 answering your question that darker pink that was added, the GF was placed that was, that’s a 35 movie theatre and that was something that was seen as important to retain that movie theatre 36 certainly and not have that go office. It’s a value in the community and its serving the 37 neighborhood. Some other areas that were seen as important to add the GF overlay was this area 38 here which is across from some other retail and a GF Zone. 39 40 I think ground floor retail, personal services the list is attached to the ordinance of allowable 41 uses, permitted uses, and conditionally permitted uses. The conditionally permitted uses in the 42 GF Zone include gyms, commercial service, and commercial recreation. So a yoga studio, a 43 gym might also fit nicely with retail and personal services, that kind of thing. I’m not sure if that 44 answered that. 45 46 Chair Martinez: Not exactly, but I’ll ask it again later on in a slightly different way. Let’s open 47 the public hearing. Do we have any speaker cards? 48 49 3 Acting Vice-Chair Keller: No we don’t have any speaker cards for tonight. 1 2 Chair Martinez: Fine, then I’m going to close (interrupted) 3 4 Acting Vice-Chair Keller: No, we keep it open till next time. 5 6 Chair Martinez: Till when? 7 8 Acting Vice-Chair Keller: I think we’re supposed to keep the public hearing open and then 9 continue it for next week. When it comes back before us. 10 11 Chair Martinez: Oh, yes. 12 13 Acting Vice-Chair Keller: So we don’t close it at all. 14 15 Chair Martinez: That’s an exception. City Attorney, please? 16 17 Cara Silver, Sr. Assistant City Attorney: Yes, at the conclusion of your discussion I’m assuming 18 that you’ll want to just make an announcement that this is being continued to February 13th and 19 the public hearing will remain open until that time. 20 21 Chair Martinez: Ok, excellent. Ok then Commissioners, comments. I’m going to start with 22 Commissioner Alcheck. 23 24 Commissioner Alcheck: Ok, so I have a few, some questions and comments so maybe we can 25 engage. Ok, so obviously the determination of the best use for a parcel is subjective to some 26 extent and doesn’t therefore coincide with the highest value that you could obtain per square foot 27 for that parcel. I’m assuming that the Council Members who sort of wrote that memo have made 28 this subjective decision about how they feel about what the best use is for those ground floor 29 square feet. One of the thoughts that I had was that and I know there’s a legal definition for a 30 taking, but one of the thoughts I had was that if we restrict the use here in a way that we 31 subjectively feel is preferred we are in a sense taking some value away if that use doesn’t reflect 32 the use that could command the highest dollar on the market. So if office space is going to get 33 their property owners $7 a square foot and retail is only going to get them $5.50 to some extent 34 it’s a taking. 35 36 And I understand that they can be legal non-conforming and if they can get a tenant in every 12 37 months they can continue for the rest of their lives I’m assuming, but one thing I’m wondering is 38 if it would be possible the next time we review this, to have information regarding how many 39 square feet each one of these parcels has on the ground floor versus other floors. Are these 40 single story buildings? Are they second and third floor buildings? I think it would be also 41 helpful if we to some, I know this is very subjective too, but I would sort of like to know the age 42 of these parcels or the buildings on these parcels. Because if they’re exceptionally old and 43 they’re single story and these individuals have the intention of redeveloping, I’m just sort of 44 curious to know if this change will likely encourage a lot of development because now an owner 45 is sort of interested in increasing his office space and he can’t do it on the ground floor so he’s 46 going to build another couple stories. I’m just curious. So I think it would be interesting to 47 know the age of the various buildings. 48 49 4 I guess kind of a greater discussion about why it’s not a taking would be helpful. I’m sure that 1 there are a lot of intricacies to that discussion, but I think we can handle it. I think we can handle 2 that level of detail. At least I know that if we can’t handle it you’ll be able to distill it in a way 3 that we can so… (trails off) 4 5 Chair Martinez: Are you done? 6 7 Commissioner Alcheck: Yeah, I mean unless you think that would be possible? 8 9 Ms. French: I have no problem providing the data that you’re asking for and I think if we can 10 provide a handout on the takings and a clarification as to how that applies in this case hopefully 11 that will address your questions. 12 13 Commissioner Alcheck: And I guess drawing on my fellow Commissioners’ experience and 14 yours that anybody can really comment on this is this perceived to be something that’s going to 15 be highly contentious? Do we expect a lot of… (trails off) 16 17 Ms. French: I think, we’ve sent out notice cards for outreach meetings. We sent notice for this 18 meeting. The Council has pretty much initiated this change and so my, I suspect that it’s not 19 controversial otherwise we would see a few people here and we’ll wait till next time and see if 20 somebody comes next week at the point of decision, but… (trails off) 21 22 Chair Martinez: Alright. Commissioner Tanaka, questions or comments or do you want us to 23 come back? 24 25 Commissioner Tanaka: So I guess one thing I was thinking about as and your deliberation about 26 it is whether this is a taking of property rights or not is, can there be a concept of having a bonus 27 for having retail on the bottom? Some sort of incentive? 28 29 Ms. French: There could be. In the CD District there is currently the capacity for receiving 30 transferable development rights that are in the code now and currently those carry with them up 31 to 5,000 square feet per site free of parking spaces associated. So there is, and there is kind of a 32 one-time bonus as well. There’s some Americans with Disabilities Act of 1990 (ADA) bonuses 33 for making existing facilities into ADA compliant. So there are some bonuses currently 34 available to any CD owned property that isn’t over its maximum Floor Area Ratio (FAR). 35 36 Commissioner Tanaka: Ok because I think from the public point of view I think having retail on 37 the bottom, having a very vibrant downtown is to the benefit of the public, but from the property 38 owner point of view I understand that that could be viewed as a taking because they get less rent 39 perhaps. So perhaps one way to kind of balance it is to have perhaps these Transportation 40 Demand Management (TDR) rights that allow them to in some ways get compensated for that so 41 that they benefit and the public benefits by having a more vibrant downtown. So perhaps that 42 could be contemplated and some sort of structure can be proposed that might work. 43 44 Ms. French: Sure and I’d be happy to clarify in a report what bonuses there are available to these 45 properties and the bonuses that wouldn’t change by this action. 46 47 Commissioner Tanaka: Yeah or what bonus might, what new bonus might be necessary to 48 actually let’s say there’s currently an office there to incentivize the owner to convert or if we do 49 5 have this overlay what would be fair for the affected property owner. I actually don’t know what 1 rents are in downtown Palo Alto, but that would be actually interesting to have a list of what is 2 the retail rental rate and what is the office rental rate. I know this is a little bit always in flux, but 3 it would be good to understand what is the value difference between the two. Thank you. 4 5 Commissioner Alcheck: If I could just quickly add something I think it would also be 6 (interrupted) 7 8 Chair Martinez: You have to be recognized by the Chair. I’m actually going to come back to 9 you. Commissioner Panelli. 10 11 Commissioner Panelli: Thank you Mr. Chair. First I want to say I understand why Council or 12 some Members of the Council brought this up. There are aesthetic reasons for it; there are 13 vibrancy reasons for it. Office space generally isn’t alive in the evenings and it’s hard to have a 14 thriving downtown area if you don’t have life on those ground floors. Totally makes sense. 15 Also makes sense economically from the City’s perspective. Most offices don’t generate sales 16 tax. Storefronts do. So I understand that and I understand what the concerns about property 17 rights and taking. I’m definitely sensitive to that, but what I, the point I’m going to try to make 18 here is that this is where we are looking at things through a microscope yet they are so 19 interconnected. 20 21 When we talk about things like building height and density if you talk to some of these retailers 22 and I have, a lot of their complaints are that their businesses are Friday and Saturday businesses 23 and they don’t have enough business on those other four or five days a week to sustain their 24 business. And so I think the real answer is, is there a way that the highest and best use for these 25 properties that we want to maintain as retail storefronts is there a way for us to make those the 26 highest and best use? And I think one of the only ways to do that is to have a much more vibrant 27 life downtown so that you have a vibrant daytime weekly activity. Restaurants serving the 28 working public and then you also have a vibrant nighttime activity, nighttime activity seven days 29 a week. And the only way to do that is to get certain kinds of people, probably singles or 30 childless couples to live downtown and spend downtown and keep these businesses alive. And 31 so I hate having this kind of a conversation about this one block of a street when we’re not really, 32 when I think planning I want to think big and I want to, I want us to make decisions holistically. 33 And so I, this is where I struggle because I think there’s a way to make the retail use the highest 34 and best use, but the only way to do that is to have a better master plan that somehow allows us 35 to have more dwelling density downtown. Thanks. 36 37 Chair Martinez: Assistant Director, you had some comment in this regard. 38 39 Aaron Aknin, Assistant Director: Yes, good point Commissioner Panelli. I think what we have 40 here is both kind of a short term action and then a longer term vision that has to develop. The 41 Council when they were initially discussing it they had this discussion should this be a broader 42 ground floor protection ordinance passed or should it just be focused on this one area. I think 43 they made the decision and the recommendation to move forward that this one stretch was the 44 most susceptible to conversion in the short term and that something needed to be done now in 45 order to stop that. 46 47 Phase two is the Downtown Development Cap Study, which the Commission provided input on 48 earlier in January and that’s going to take a more comprehensive look at a number of things, 49 6 everything from building heights to economic studies on what is the amount of retail that is 1 viable in the downtown area? What’s the amount of housing that’s viable and how are they all 2 connected? You take out too much office you’re not going to have that daytime population in 3 order to support the retail. You don’t have enough housing you don’t have the nighttime support 4 of businesses. So you’re correct, they all interplay together and I think really taking a look at a 5 comprehensive approach is going to be key over the next year. In the short term though the 6 direction was hey, let’s take a look at this one block and let’s make a recommendation to change 7 this on this one block and then we’ll also include this one block in our overall study as well in 8 the long term, but in the short term to stop conversions let’s do this now. Thank you. 9 10 Ms. French: I’d also like to add something in that. That hotel that’s coming on the corner might 11 help a little bit with some of those restaurants during the rest of the week. I’m just guessing. 12 13 Commissioner Panelli: My point wasn’t necessarily just for that stretch of Emerson. I’m talking 14 about all the businesses downtown and especially the places where you see a high amount of 15 turnover. You know Mantra’s gone and it didn’t, it lasted not quite as long as it could have so 16 I’m talking about more holistically. Anyway, thank you. 17 18 Chair Martinez: Vice-Chair. 19 20 Acting Vice-Chair Keller: Thank you. So firstly on the block of Emerson we’re referring to on 21 one side of the street there are two restaurants, Mantra’s being replaced by a new restaurant, 22 Tacolicious that’s under construction and there’s also the Gordon Biersch that’s a restaurant 23 that’s bringing vibrant, these restaurants do bring some foot traffic. I also notice that there’s 24 actually I’m not sure the status of this but in front of what used to be Mantra/Tacolicious there’s 25 actually the sidewalk is cordoned off with, and I’m not sure the status of that whether it’s 26 supposed to be cordoned off or that going away? 27 28 Ms. French: I can answer that. That’s the tenant improvement for Tacolicious. That’s under 29 construction. 30 31 Acting Vice-Chair Keller: No I’m not talking about that. There’s, when Mantra was there, part 32 of the sidewalk, approximately a third was enclosed in barricade (interrupted) 33 34 Ms. French: Yeah that was, if I may? Outdoor seating for Mantra. I believe they had because 35 they had service of alcohol they were doing some kind of Alcoholic Beverage Control (ABC) 36 required barrier in order to have service outside. 37 38 Acting Vice-Chair Keller: And that’s going to continue or not? 39 40 Ms. French: Well Tacolicious would have to go through that review with the City and the ABC 41 to provide an alcohol barrier and have the tables and chairs looked at, encroachment permit. 42 43 Acting Vice-Chair Keller: So there are other, the restaurants on University Avenue don’t have 44 barriers and are they prohibited from serving alcohol on the street? On the sidewalk? 45 46 Ms. French: Yeah, some of them do and some of them are on the property itself, the private 47 property. There’s not a lot of places where they are actually on City right of way, but there’s a 48 whole process for that. City right of way encroachment permits, ABC barriers, and there’s 49 7 certain things that they can and can’t do so it’s kind of a conversation that I’m not ready for all of 1 that right now. 2 3 Acting Vice-Chair Keller: Ok well La Strada and Joya are on the sidewalk and I believe they 4 serve alcohol to the tables on the sidewalk so I’m not sure why there’s barricade on Emerson and 5 no barricade on University. So perhaps when this comes back you can explain that. 6 7 Mr. Aknin: Yeah we can do that. I mean a lot of these permits are issued through the 8 Department of Alcoholic Beverage Control so we’ll check on what their standards are, but my 9 understanding is that you need at least I think a three and a half foot barrier between where you 10 serve alcohol and where the public right of way is so it might be dependent on where the chairs 11 are, whether they’re on private property or not, but yeah, we could look into that. 12 13 Acting Vice-Chair Keller: And on the other side there is Buca di Beppo and Empire Tap Room 14 so there is some degree of foot traffic generated by these. And when you have gaps in this then 15 it sort of kills the foot traffic because foot traffic doesn’t like going in front of things that are not 16 retail. People like walking by retail and that’s one of the reasons if I understand correctly that 17 CDC Zone requires that the buildings be pedestrian friendly, that they be ground floor friendly 18 and does that mean they be capable of having ground floor retail or does it mean that they just 19 have to be compatible with people walking by? 20 21 Ms. French: Yes so the CDCP regulations without the GF require that the design of the building 22 accommodate retail. In other words we don’t want to see people blocking things off and shutting 23 away from the street and the pedestrian visibility. So even if you had an office the P Combining 24 Districts requirements and the CDC requirements are that there’s some exposure, there’s some 25 display windows even if there’s office or something else besides retail there. 26 27 Acting Vice-Chair Keller: And so for example when 180 Hamilton if that goes forward that’s in 28 CDCP, but no longer in CDC GFP and therefore the ground floor has to be compatible with 29 retail. Is that the idea? 30 31 Ms. French: So 180 Hamilton is the Hotel and they’re going to have a restaurant at the ground 32 floor. I’m not sure which one you’re (interrupted) 33 34 Acting Vice-Chair Keller: So maybe I’m wrong. I mean 135 Hamilton or is it 125 Hamilton? 35 The parking lot that’s (interrupted) 36 37 Ms. French: That doesn’t have the GF overlay that has the CDC. So yes they do have display 38 windows even if it’s office on the ground floor. 39 40 Acting Vice-Chair Keller: And if you, the former Waterworks which was an office until, it looks 41 like it’s vacant now, the former Diddams, these were in CDC GFP so how did they get turned 42 into office for a couple of years? 43 44 Ms. French: That’s an anomaly and was not portrayed as a conversion to office. That’s a long 45 story, but they were not authorized to have office. That’s color, yeah. 46 47 8 Mr. Aknin: And I could actually add to that. We, it’s vacant now. The leasing agent put up an 1 advertisement for that and we actually made contact with the leasing agent in order to basically 2 have them revise their listing to show that there are ground floor requirements. 3 4 Acting Vice-Chair Keller: Ok, thank you. So what kind of issue in terms of taking happened 5 when the property along Hamilton that was converted from, as to which the Ground Floor was 6 added in 2009 from Fraiche to I guess Inhabiture? 7 8 Ms. French: Yes, so if I may the properties from 200 to 240 Hamilton that received Ground 9 Floor Combining District in 2009, that’s the stretch you’re referring to, so I’m sorry now what is 10 your question about that? 11 12 Acting Vice-Chair Keller: What considerations were done at that time in terms of what was 13 required in order to do that and in terms of potential takings issues? 14 15 Ms. French: I don’t recall the questions about takings at that time in 2009. I can come back with 16 minutes as to what the conversations were on that. 17 18 Acting Vice-Chair Keller: Were the property owners complaining about it or were they ok with 19 it? 20 21 Ms. French: Well the Thoits brothers own 200 to 228. That stretch was designed as retail on the 22 ground floor with office above. The 230 to 238 is the Reposado and so that was a restaurant at 23 the time and is today. The only kind of, the only site that’s been a bit of a question on that is 240 24 Hamilton. It was a retail shop as well there was this Waze thing next to it (interrupted) 25 26 Acting Vice-Chair Keller: Waze is there now. 27 28 Ms. French: So that, before the GF that was whatever it is and remains so. Again if it’s 29 nonconforming it continues to be nonconforming in the GF category. There is an application on 30 file for the 240 Hamilton property if that’s an interest. 31 32 Mr. Aknin: But in terms of what the previous concerns, we could bring those back to you in our 33 next report. We could do a little research. 34 35 Acting Vice-Chair Keller: Thank you that would be helpful because obviously the issues we 36 dealt with for that addition should be similar to the issues we deal with now so to the extent that 37 it wasn’t an issue then it may or may not be an issue now. So I’ll close with two things. One is 38 could you explain why the property that used to contain the cleaners at the corner of Forest and 39 Emerson why that property isn’t being added? 40 41 Ms. French: Yes. So that property I enumerated some of the reasons in the staff report. It is at a 42 corner where all four corners are currently office use. So that’s not a retail use that needs 43 protecting at this time. It was designed as a drive thru dry cleaner. It was converted to a 44 conditional use, through Conditional Use Permit (CUP) to a recreation facility, commercial 45 recreation. They moved on and then it went to office. And I think the property owner who did 46 come to the outreach meeting and was talking about coming tonight was concerned and asked 47 that we not include that in the Ground Floor restrictions. I think for the same reason staff 48 enumerated in the report. It’s not really a retail corner; all four corners are not retail. It’s not a 49 9 building that’s conducive to retail as currently configured. It’s likely to have a historic aspect to 1 it, so modifying the building is going to be, you know I don’t think the owner plans to modify 2 the ground floor of the building. And there may be some other reasons, but we did have some 3 input from a couple of property owners and that was one of the property owners that came. 4 5 Acting Vice-Chair Keller: Well I, just let me finish this and then I’ll move on. Yes, I would 6 prefer that if this project, if this property is redeveloped with a bigger some multistory building 7 that it be ground floor retail because it would connect will all the stuff next to it and if it’s not 8 redeveloped and it continues as office, it can continue that way because it’s a legal 9 nonconforming use. So I would suggest that that be included in the future. Thank you. 10 11 Chair Martinez: Ms. City Attorney I would like you to brief us on the City’s right to provide 12 zoning for its parcels. 13 14 Ms. Silver: Sure. Cara Silver, Senior Assistant City Attorney. The City has very broad police 15 powers in this area. It’s very common for cities to adjust zoning ordinances as time goes by. 16 Cities frequently upzone to further allow development and likewise downzone to reduce 17 development potential on properties. It’s rare that a zoning decision such as this rises to the level 18 of an actual taking that would be compensable under the Constitution. Generally what courts 19 look at when they decide whether a zoning regulation constitutes a taking is whether the 20 regulation would deprive the property owner of all economically viable uses on the property. So 21 it’s a pretty, it’s a pretty tough standard to meet and we don’t think that this particular zoning 22 action gives rise to a taking but we will come back at your request with additional information on 23 the taking principles. 24 25 Chair Martinez: Thank you. I don’t believe that the proposed rezoning is either subjective nor is 26 it a taking. It’s not subjective in that I don’t believe that we are deciding something that is quite 27 arbitrary. I believe the staff’s consideration for the retail uses of the street are quite well 28 founded. That as an urbanist you just have to walk down the street and you feel it’s one of 29 potentially the best retail centers downtown. There is so much that could be done on a street like 30 this, you know, lighting of the trees, festivals, closing of the street, making it more of a 31 pedestrian place. 32 33 The retail is there. The retail is an important element of downtown. It may be this year that 34 office rents are higher than retail. It may be in two years that offices slump like they did five 35 years ago and throughout the Bay Area and retail values are higher. I objected when we first 36 considered allowing offices in ground floor retail because I don’t think we can project what the 37 economy is going to want to do with the space, but I think we can make good land use decisions 38 about what the downtown, what creates this great retail downtown as Commissioner Panelli 39 pointed to, based on the adjacencies, the quality of the nearby retail, the connections from one 40 place to another. And this one makes absolutely good sense to continue on the path of the 41 ground floor retail overlay. 42 43 I would like to second Commissioner Keller’s point. You can make the case that every building 44 on this block is historic. And to single out this former dry cleaning building as not appropriate, I 45 think is a mistake. We’re getting into sort of spot zoning for the purpose of accommodating an 46 individual owner or a current use that I think is totally inappropriate. As we walked by there this 47 evening we saw the possibility of outdoor dining on the corner under that triangle, the removal of 48 these ugly parking spots, creating a gateway from, what direction is that, south? To this really 49 10 potentially vibrant downtown area. Our Economic Development Director’s talked about a place 1 for to attract young people that don’t want to live in the City because there’s nothing like this for 2 them. This is a perfect kind of place and it doesn’t have to be a beer garden on the top of 160 3 foot high building. It could be right in what we have right now. 4 5 So I would like us in our next round, perhaps our final round to get back to looking at not these 6 esoteric legal issues about what’s being proposed, but really considering what staff has and the 7 Council has asked us to consider and comment on. And that’s the idea of rezoning the 600 8 Block, one block, a few buildings, to ground floor retail and get comments on whether what the 9 staff has proposed could be enhanced as Commissioner Keller has suggested or really there are 10 things that really should limit the amount of ground floor retail in this area. I haven’t heard that 11 yet, but I’d like us since it’s coming back to us in two weeks to offer some comments to staff to 12 consider like Commissioner Keller did, that suggest that maybe the plan needs, can be refined to 13 make it an even stronger or more reasonable plan as it can be. So I’d like to go back to 14 Commissioner Alcheck. You want to give a round of comments? 15 16 Commissioner Alcheck: First I apologize for speaking out of turn. 17 18 Chair Martinez: I do it all the time. 19 20 Commissioner Alcheck: Ok. My quick addition that I wanted to say earlier was please add to 21 this report specifics about each parcel as to which ones are legal, would be legal nonconforming 22 as a result of this decision. And like I said earlier I’d like to know how many floors each of these 23 parcel’s buildings have. So if for example it would be helpful to know how many would actually 24 be put in that position. 25 26 Just since we’re making our last round here I do think this is, I mean I think there is subjectivity 27 to this. And to be clear as a land use attorney I’m extremely familiar with the takings concepts. 28 I just think that including that sort of analysis in these reports which we make public and we give 29 to the public helps them understand why it’s not. And if a public individual makes a very 30 dramatic or passionate statement about how this is extremely burdensome on themselves we can 31 sort of refer to material that reflects that. So that’s why I think that was important to include and 32 really it’s for everyone’s benefit. 33 34 And then I want to agree with Chair Martinez and Commissioner Keller. I think it’s sort of odd 35 that that corner is, because it’s nonconforming now or would not, if we included that it would be 36 a legal nonconforming use and it’s sort of odd that we’re not including it. And I think they have 37 a very strong point that it would be the preferred zone even for that corner if it wasn’t for the 38 individual who’s not happy with the idea. And I guess I want to say that if we, if you come back 39 and say all the ones that we’re considering are actually already retail, so we’re really just 40 protecting it, then I would argue that to some extent if we included the ones that are not currently 41 retail like this corner unit, we’re sort of increasing the value of office ground floor on that street 42 for any unit. Because they have to go 12 months with a vacancy and it sort of artificially 43 increases the value of office space on that street because there’s no other option, right? 44 45 And I think we’re going to kind of hit a wall in how much office space there is so office space is 46 just going to continue to get more and more expensive. And so I just want to argue that if we 47 allow these ground floor spaces to continue to be office under this zone by allowing them to have 48 this sort of 12 month period that they can, if they can find office they can keep doing it. I don’t 49 11 know if we’re ever going to really achieve that result that we want because again we’re 1 artificially increasing the value of office space by ensuring that none of the competitors when 2 they go vacant on that street who are currently retail can have office space. So I just, I wonder to 3 myself how effective this is. If we include that corner property he never has a vacancy that’s 4 greater than 12 months it’ll never be a retail. If he can get more dollars per square foot than 5 retail and I imagine that office space will get more valuable there as a result of the fact that we’re 6 going to have less and less available office space. So I just want to throw it out there and the 7 reason why I mentioned that is because at the end of the day if we decide that we want this to be 8 retail, are we really not accomplishing that goal by having that “loophole” for existing parcels. 9 So I think that would be good to have kind of a greater discussion on that. 10 11 Chair Martinez: Commissioner like I said I always, I interrupt all the time myself. And I, that 12 corner property is a one story building. To me it looks vulnerable to be demolished with a new 13 multilevel building of offices above it. If we rezone it, the ground floor will be retail. So I think 14 there are other aspects to this. I think we’re in an office boom in this community right now that 15 hasn’t always been the case. It may not always be the case. And you know we think that office 16 is in such demand that it will just always be that way, but 10 years ago that wasn’t the case. 17 18 So we can’t zone and then rezone back and then rezone again. We made that mistake before and 19 now we’re trying to correct for some of these mistakes I think. This is a solid location for retail. 20 It can get even better with some public improvements like we talked about on the last item and 21 the strength of retail downtown is probably the most vulnerable thing we have going for us right 22 now in another very strong downtown. Commissioner Tanaka. 23 24 Commissioner Tanaka: So I just want to start off saying that I also agree that these two parcels 25 that were excluded I think makes a lot of sense to have it be continuous and to actually include 26 them in this proposal for all the same reasons that were mentioned before. 27 28 And I guess my last comment really is about so this may not legally be taking, but I think to what 29 Commissioner Alcheck’s been saying in terms of well, because of this loophole it’ll never 30 change to the desired retail use. And so I think that’s also why I was speaking earlier and I 31 wasn’t really thinking about it from the legal point of view whether we have to compensate 32 people, but it was more to give people incentive to say, well look if we actually put retail there 33 then we could get some sort of bonus, some sort of incentive so there’s some sort of mechanism 34 that would encourage this change to retail versus people indefinitely keeping it office. So that’s 35 what I think at the next time this comes around to us, I think for staff to think about what kind of 36 incentives can be made to encourage this use or this conversion back to retail I think would be a 37 good thing. Thanks. 38 39 Chair Martinez: Thank you Commissioner. Commissioner Panelli. 40 41 Commissioner Panelli: Yeah I want to just pick up on where Greg left off and actually ask my 42 esteemed colleagues here, if the comments you made about the corner property that used to be 43 the drycleaner also applies to Congressperson Eshoo’s office, because we didn’t talk about that. 44 But I think Commissioner Tanaka just mentioned it. 45 46 I’d also just like to reiterate my comments from before which is I think the best way for us to 47 avoid any contentious issues and solve the problem is to just make sure that we have such a 48 vibrant daytime and nighttime seven day a week viable traffic, sufficient traffic, viable traffic for 49 12 these retail establishments to do well and make that effectively the highest and best use. I think 1 that’s the best way for us to accomplish these goals. 2 3 And then the last point I wanted to make was simply for Chair Martinez. I think when 4 Commissioner Alcheck said it was subjective I don’t think he meant that the idea of a ground 5 floor retail zone was subjective or extending it is subjective. But where I do think there is 6 subjectivity right now because we don’t have any data is how big should that GF Combining 7 District be? How many blocks, how many streets should it be? And I do think that’s subjective 8 because we don’t know, we don’t have the data to say what the right economic balance is. And 9 it sounds like we’re going to try to do something on that order, but we don’t have that today. So 10 I think that’s, that’s how I interpreted his comments. Thanks. 11 12 Chair Martinez: Good point. Vice-Chair. 13 14 Acting Vice-Chair Keller: Thank you. So the first comment I’m going to make is that 15 contiguous retail is the most likely to be vibrant retail. And when you have retail that’s isolated 16 it means that people have to take a special trip to get there; they’re not going to be, it’s not going 17 to be as pedestrian friendly. So it seems to me important to retain the retail we have because 18 every, of the properties that converts from retail to office puts pressure on the other properties to 19 be converted from retail to office because it makes those other properties less viable as retail. So 20 for me the issue is not let’s convert all the retail. For me the issue is let’s retain the degree of 21 vibrancy that we already have by making sure that if it’s retail it stays as retail and if ever, and 22 the office if it ever becomes retail it stays as retail. 23 24 Now I understand that Commissioner Alcheck being in the real estate business understands this 25 much more than me. I’m just a computer scientist, but I’m curious about the idea that if a 26 property is, if somebody doesn’t want their property to be vacant for 12 months in order for it to 27 turn into retail that they raise the rent on it? It seems that if the rents are too high then it will stay 28 vacant for 12 months and therefore you need to keep, if the property owner wants to keep it as 29 office they have to keep the rents low enough so that it stays as office because otherwise when it 30 gets vacant for 12 months it will have to be retail. So maybe I don’t understand that, but that’s 31 what I think is there. On the other hand what it does do is it says it may put more demand for 32 office because there’s a limited amount of it. But the fact that it can’t be vacant for more than 12 33 months puts some limitation on that. 34 35 The next thing is I don’t know whether GF is compatible with CDS. Can you apply GF overlay 36 to CDS? 37 38 Ms. French: It would be the first CDS GF downtown property if you went with that in Eshoo’s 39 office, but it does allow Chapter 18.30(C) is the Ground Floor Combining District and it does say 40 it’s intended to modify the uses allowed in the CD Commercial Downtown District and sub 41 districts, so the CDC is the district we usually see it applied to. The CDS is another such 42 downtown commercial district. So it can be. This would be the first. 43 44 Acting Vice-Chair Keller: Ok, thank you. So, clearly with 203 I think is a no brainer for that to 45 be added from my perspective for that to be added to the GF Zone. I don’t think that there’s any 46 justification for that makes sense. I think that that should be, if it gets redeveloped and I don’t 47 see how that, I’m not sure that it would be a historic building, but if it were redeveloped and it 48 13 was office it could stay office, right? So I think that that being ripe for redevelopment and even 1 useable as a ground floor restaurant should be added to Ground Floor. 2 3 With respect to the other side I am sympathetic with the idea of making, adding that. The fact 4 that it would be a new precedent adding GF to CDS means that it requires a little bit more 5 thought. But on the other hand those storefronts are pedestrian friendly in the sense and 6 therefore at one point in time more of those offices all the way around were retail or so they were 7 designed as retail. They were retail. So on the basis of that I think it’s worthwhile considering 8 them as being retail, as adding them to GF. I do think that at least the half of the block that’s in 9 the corner as opposed to the part that’s on High, but I do think that it makes sense to add that. 10 But they as long as they stay office use they would stay that way so I’m not sure we need to 11 incentivize things to become retail. It’s just that we don’t want to go the other way because that 12 loses retail. And I am curious to hear from Commissioner Alcheck after the Chair recognizes 13 him. But I would say that I am very supportive of the idea of doing the Ground Floor overlay. I 14 think it retains this as a vibrant district otherwise it’s in danger of being lost. Thank you. 15 16 Chair Martinez: Ok, I’m going to allow Commissioner Alcheck to have the last word here. 17 18 Commissioner Alcheck: I don’t want to labor on, but I guess if I can be concise and clear, I’m 19 not against this idea. I just piggyback on Commissioner Panelli’s statement is these 20 “restaurants” need lunchtime traffic. Lunchtime traffic is generated not by local residents 21 because they are at work probably elsewhere or in downtown Palo Alto. So there needs to be 22 sort of this mix of office and ground floor retail service/restaurant. And one of the issues here is 23 how many of these parcels are single story. When you have sort of this multistory environment 24 then we have all these office workers coming to lunch on the ground floors of all these office 25 buildings. I guess I want to say I support this, but I want to also suggest that we can’t be against 26 growing up and also hope that these restaurants do well. 27 28 As someone in the business I think you could probably appreciate this even not being in the 29 business you cannot will a restaurant. That’s the hardest business there is. The person who 30 manages a restaurant has to be all in. It’s tremendous work. There’s even in the best locations 31 they have tremendous turnover. So I would love it if we had a greater diversity of restaurants. 32 We have seven yogurt shops. So there are uses at work and in the marketplace there’s demand 33 and it gets met. And my point earlier was that if we limit office space, existing office space 34 becomes more valuable and to some extent existing retail becomes more valuable because if 35 office space grows those people need a place to eat and existing restaurants in some degree 36 become more viable. And so there is sort of this marketplace that determines which restaurants 37 should survive and which shouldn’t and which retail should survive and which shouldn’t. So I 38 support this. I think we need to create this, but I also support kind of greater density and I think 39 that’s what Commissioner Panelli was suggesting to you and I think they go hand in hand. 40 41 Chair Martinez: Thank you. A great city has great pedestrian spaces and that’s assuming 42 restaurants alone. So I really support this proposal. I would support it if every parcel on this 43 block was to be included in the GF overlay including those precious Victorians because I think in 44 other cities we’ve seen like along Union Street in San Francisco, Victorians being very special 45 kind of boutiques and jewelry stores and things like that, not restaurants. So I would support 46 really a strong overlay for this block and I think it really has the opportunity to not only protect 47 what we have there, but really help be a model for other streets, Waverly and some others that 48 are really at a very similar situation where we have these blank spaces along our walks to, that 49 14 are being filled by something other than retail. So with Commission consent we’d like to 1 continue this to February 13th. 2 3 MOTION 4 5 Acting Vice-Chair Keller: So moved. 6 7 SECOND, VOTE 8 9 Chair Martinez: Second? All in favor, aye (Aye). Passes unanimously. Thank you on that. 10 Yeah, with Commissioner Keller making the Motion and Commissioner Alcheck seconding. 11 Thank you for the record. 12 13 MOTION PASSED (5-0, Vice-Chair Michael absent and one open chair) 14 City of Palo Alto (ID # 3532) Planning & Transportation Commission Staff Report Report Type: Meeting Date: 3/5/2013 City of Palo Alto Page 1 Summary Title: Rezone of Emerson Street Properties on the 600 Block Title: Recommendation of a Draft Ordinance to Rezone all CD-C and CD-S zoned properties fronting Emerson Street on the 600 block to add the Ground Floor Combining District From: Amy French, Chief Planning Official Lead Department: Planning and Community Environment Recommendation Staff recommends that the Planning and Transportation Commission (PTC) receive the report, re-open the public hearing and recommend that the Council adopt the attached draft ordinance (Attachment A) amending the Palo Alto Municipal Code (PAMC) Section 18.08.040 (Zoning Map) to add the Ground Floor (GF) Combining District (Section 18.30(C) of the Municipal Code) to the properties shown on the revised Exhibit 1 and listed by address on the revised Exhibit 2 of the Draft Ordinance. The subject properties generally front the 600 block of Emerson Street between Hamilton Avenue and Forest Avenue. Staff’s recommendation excludes Forest Plaza Building A’s three (3) ground floor non-residential parcels from Exhibits 1 and 2. These parcels (698 Emerson, 171 and 175 Forest) were included in the hearing notice, however, in the event PTC and Council still wish to include them in the properties to be rezoned. Exhibits 1 and 2 would need to be revised to add these if so adopted. Background At this November 5, 2012 Council meeting, the Council initiated the rezoning of Emerson Street properties on the 600 block to add the “Ground Floor (GF) Combining District”. The GF Combining District generally requires that ground floor tenant space be primarily dedicated to retail uses, and does not allow new office uses. The Council initiated the zoning for this particular block of Emerson Street because the block is known for its walk-ability and vitality, for its popular restaurants, and as a corridor or connection for pedestrians from the downtown core to Whole Foods and SOFA II area. Given the high rents for office space in this area that currently exists, the Council directed this re-zoning to move forward without further study or delay as existing retail spaces are vulnerable to conversion. City of Palo Alto Page 2 The following table outlines the properties under discussion: Property Address Tenant West Side of Emerson Street (North to South) 180 Hamilton Avenue Casa Olga, under conversion to The Epiphany Hotel 620 Emerson Street Stanford Florist 624 Emerson Romi Boutique Retail Clothing 628 Emerson Richard Sumner Gallery Retail Art, Frames, Prints 632 Emerson Tacolicious Restaurant, previously Mantra 636 and 640 Emerson Gordon Biersch Restaurant 644 and 648 Emerson Street Buzz All Stars and Shift Offices Ground Floor Condominiums at corner of Emerson and Forest (Forest Plaza)* 698 Emerson Street* Anna Eshoo's Office 171 & 175 Forest Avenue* Anheuser Busch Beer Garage Office East Side of Emerson Street, North to South 611-623 Emerson Street Vivre Fitness 625-631 Emerson Street multiple tenant office building 635 Emerson Street Acme Glass building, single tenant office 643 Emerson Street Bucca de Beppo Restaurant 651 Emerson Street Empire Tap Room Restaurant 203 Forest Street * office tenant (originally drive-through cleaners) The PTC considered this re-zoning proposal at the January 30, 2013 PTC. The PTC opened the public hearing, though there were no members of the public in the Chambers to speak to the item meeting. The PTC requested that the corner parcels not originally included in staff’s recommendation be added to the re-zone proposal. The three property addresses located on the two corner parcels are noted with an asterisk above). The PTC also requested that additional information be brought back for further consideration. Although this meeting was originally scheduled for February 13th, notice cards were sent out alerting affected property owners that this public hearing for this re-zone was re-scheduled for March 5, 2013. Draft Excerpt PTC Minutes of January 30, 2013 are provided as Attachment C . City of Palo Alto Page 3 Discussion PTC Requests At the January, 30, 2012 meeting, the PTC suggested that two buildings: 203 Forest Street on the northeast corner Forest Avenue and Emerson Street and the Forest Plaza Building on the northwest corner of Forest Avenue and Emerson Street be included on the list of properties receiving the GF combining district designation. The PTC also requested the following additional information: 1. Specific data for each parcel to be rezoned, including: the number of floors, ground level floor area, age of property, and which properties would become non-conforming following Council action to rezone the properties; 2. The cost of rent for office and retail space on this block of Emerson; 3. Information regarding the State Office of Alcoholic Beverage Control rules regarding outdoor/sidewalk service of alcohol; 4. Information related to potential incentives to establish or retain retail uses; and 5. An analysis of the rezoning with respect to land use law, specifically “Takings” 6. Summary and meeting minutes from the 2009 rezoning discussions with respect to this taking issue. The requested information is provided below: 1. Property Data Specific data for each property proposed to be rezoned is provided in Attachment B, and the data is summarized below. The three “Forest Plaza, Building A” office condominiums (NW corner of Forest Avenue and Emerson Street), are considered one property for the purpose of this analysis.  Number of floors: Of the 11 developed properties to be rezoned, there are: five (5) one- story buildings, three (3) two-story buildings (two of these are mezzanine buildings), one (1) three story building, one (1) five story building (Forest Plaza Building ‘A’), and one (1) 8 story building (Casa Olga).  Ground floor area: The total ground floor area on the block is approximately 54,000 square feet.  Age of properties: Of the 11 properties to be rezoned: Seven (7) buildings were constructed prior to the 1950’s, four (4) of which are listed on the City’s local historic inventory, and two (2) properties are listed as eligible for listing on the California Register of Historic Resources.  Properties with existing office uses that would become legal non-conforming uses following rezone: There are two (2) properties having office uses considered City of Palo Alto Page 4 “Grandfathered Uses” pursuant to PAMC Section 18.18.120, and three (3) properties having office uses considered “Legal Non-Conforming Uses” subject to the regulations of PAMC Chapter 18.70. The applicable sections are provided as Attachment D to this report and the differences between “grandfathered” and “legal non-conforming” uses is discussed below. In summary, the Code allows the current use of these properties to continue, despite a change in zoning. 2. Cost of Rent on Emerson Street On Emerson Street, office rents are estimated to be between $5 to $6 per square foot. On Emerson Street, retail rents are estimated to be between $3 to $4 per square foot. 3. Alcoholic Beverage Control Regulations and Pedestrian Access Only one restaurant on this block of Emerson Street had gone through the City’s process to place an Alcoholic Beverage Control-standard barrier to provide on sidewalk dining. The Mantra restaurant (closed, now Tacolicious) obtained architectural review approval that included an ABC barrier and required a certain amount of clearance between the barrier and curb, to a degree that is not always available on some streets. This can be a real issue for businesses that would otherwise like to serve alcohol, since the barrier is always required. Mantra’s condition of ARB approval stated, “An Encroachment Permit, to be issued by Public Works, shall be obtained prior to the placement of the tables and chairs on the public sidewalk. A minimum clearance of eight feet between the fencing and the curb must be maintained at all times (Ref. CPA Municipal Code, Section 12.12.020).” 4. Retail Incentives There are currently no code provisions that give property owners incentive to rent to new retail uses rather than other uses. Landlords will generally rent to a use that is allowed under the code and gives them the best return on their investment. The Downtown Development Cap analysis, however, can look into potential retail incentives. The GF and non-conforming use zoning code provisions may, however, give property owners with existing office tenants a disincentive to convert to retail use. This is because once space is rented to a retail tenant; the space can no longer be converted back to office. As long as office rents stay are higher than retail rents, it is unlikely current office landlords will jeopardize this flexibility. 5. Summary of Takings Law The Planning and Transportation Commission requested additional written information on the current state of “takings” law. This is an area of law which has evolved over the years and is a fundamental precept of land use law. The City’s ability to regulate land use and City of Palo Alto Page 5 adopt zoning ordinances derives from the government’s police power. The police power is extremely broad and allows the City to regulate for the public health, safety and welfare of its citizens. This power, however, is limited by the Fifth Amendment to the U.S. Constitution, which states in part, “nor shall private property be taken for public use, without just compensation.” The California Constitution contains a similar provision. Thus, if a land use regulation becomes so unduly restrictive that it causes a “taking” of a landowner’s property for public use, just compensation must be paid. Current takings jurisprudence recognizes three major types of takings (also referred to as “inverse condemnation”): (1) permanent physical invasions (for instance a law requiring landlords to permit cable companies to install cable facilities on privately owned apartment buildings); (2) denials of all economically beneficial use (for instance a downzoning from commercial to open space allowing no development whatsoever); and (3) partial regulatory takings.1 The first two categories of takings are relatively rare and most taking disputes fall into the third category. To determine whether a partial regulatory taking applies, the court applies a three-part test articulated by the United States Supreme Court in Penn Central Transportation Company v. City of New York. Under the Penn Central test, three factors to be considered are: (1) the economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfered with distinct investment backed expectation, and (3) the nature of the governmental actions. The California Supreme Court has adopted the Penn Central test for generally regulatory takings, but has expanded it to include ten additional non-exclusive factors.2 In summary, determining whether a particular ordinance constitutes a “regulatory takings” must be done on a case by case basis. In general, zoning ordinances which apply prospectively and which contain a reasonable “grandfathered or legal non-conforming use” provision allowing the current use or building to continue have been found by courts to be a valid exercise of the police power and do not constitute a taking. Applying the current takings law, staff does not believe the proposed ordinance would constitute a taking. Both Planning and Legal staff proactively ensures that any action recommended to the Commission complies with takings law and will alert the Commission if any action poses risk in this area. ------- 1 A fourth category of takings consists of land use exactions. This category involves the dedication of land or payment of fees as a condition of development. This fourth category is not applicable to this zoning ordinance. 2 Other relevant factors may include (1) whether the regulation interferes with interests that are sufficiently bound up with the reasonable expectations of the claimant to constitute "property" for Fifth Amendment purposes, (2) whether the regulation affects the existing or traditional use of the property, (3) the nature of the state's interest in the regulation, (4) whether the property owner's holding is limited to the specific interest the regulation abrogates or is broader, (5) whether the government is requiring resources to permit or facilitate uniquely public functions, (6) whether the regulation permits the owner to profit and obtain a reasonable return on the investment, (7) whether the regulation provides the owner benefits or rights that mitigate the burdens of the City of Palo Alto Page 6 regulation, (8) whether the regulation prevents the best use of the land, (9) whether the regulation extinguishes a fundamental attribute of ownership, and (10) whether the government is demanding the property as a condition for the granting of a permit. 6. Recap 2009 PTC Discussion At the January 30, 2013 PTC hearing, there were questions related to the 2009 recommendation to add the GF combining district to certain properties and remove the provision of the “Use Exception” from the GF chapter (PAMC Chapter 18.30 C). The 2009 PTC meeting minutes (Attachment E) do not reflect any discussion regarding “Takings”. The PTC and Council determined that the public interest would be served by the proposed rezoning and made the findings for the rezoning. Findings for the rezoning are discussed below. Other Key Issues Ground Floor Office Use in CD-C and CD-S Even with a GF zone combining district, some ground floor office use is allowable. The GF Zone allows lobby area on the ground floor to serve upper floor offices, and allows uses permitted in the underlying CD District to occupy up to 25% of the ground floor, as long as this area is “not fronting on a street.” Grandfathered Uses 625-641 Emerson and 635 Emerson qualify as “Grandfathered Uses” because the buildings contained ground floor office space as of August 28, 1986. Therefore, PAMC Section 18.18.120, Grandfathered Uses and Facilities, applies (Attachment D). This code section states that the grandfathered uses are not subject to the nonconforming use regulations (PAMC 18.70). However, a “grandfathered” use must be replaced with a conforming use following a vacancy of 12 months. Additionally, when a building converts to a conforming use, it must remain conforming. The code section also allows buildings with grandfathered uses to be remodeled, improved, or replaced on the same site, for continual use and occupancy by the same use, provided such remodeling, improvement, or replacement does not increase floor area, shift the building footprint, or increase the building’s height length, building envelope, or any other increase in the size of the improvement. The improvements can also not increase the degree of non-compliance with the code, except as allowed under the exceptions to floor area ratio regulations set forth in Section 18.18.070. Finally, in the case of professional, general business or administrative office uses of a size exceeding 5,000 square feet in the CD-S or CD-N district, remodeling, improvement, or replacement shall not result in increased floor area devoted to office. Please refer to Attachment D for additional details and the full text of the applicable PAMC section. Legal Nonconforming Uses The three (3) office condominiums in Forest Plaza, Building A, appear to have been become office space in the 1990’s. The office use in 203 Forest was established in 1998, replacing the City of Palo Alto Page 7 Cardinal Cleaners; a Financial Institution occupied the space in 2000; a Conditional Use Permit was issued for a Commercial Recreation use in 2002, and office was reestablished more recently. Since these office uses were established after 1986, they are not considered “Grandfathered” but instead are subject to the Non-Conforming Use regulations of PAMC Chapter 18.70 which provide similar protection. For Non-Conforming Uses in the CD Zone District, many of the same requirements as set forth in Item Grandfathered Uses code section apply, such as:  Both non-conforming and “grandfathered” uses are subject to replacement with conforming uses following a vacancy of 12 months.  Facilities for both use types may be remodeled or replaced as long as there is no increase in floor area for that use, building footprint shift, building height or size, or degree of noncompliance. Furthermore, there are additional regulations for nonconforming uses that are not applied to “grandfathered uses”. PAMC Section 18.70.030(b) allows a non-conforming use “to be changed to or replaced by another nonconforming use which would have been permitted under the most recent zoning classification of the property under which the nonconforming use was a conforming use and which is of no higher occupancy rating than the existing nonconforming use”. A nonconforming use cannot be replaced with another nonconforming use unless the Building Official determines the building “is not reasonably capable of conversion to accommodate use and occupancy by a conforming use, without substantial reconstruction or remodeling.” The Building Official is to consider the following factors as he or she makes the determination: (A) Whether changes in the nature of the building or a portion of the building would be required by Title 16 or similar regulations in order to convert the use of the building, or portion of the building, to a conforming use (B) Whether any reconstruction or remodeling necessary to convert the use and occupancy of the building, or a portion of the building, involves structural alterations; (C) Whether the building, or portion of the building, was originally designed and constructed for the particular existing non-conforming use or uses of similar character. Please refer to Attachment D for additional details and the full text of the applicable PAMC section Findings for Map Amendment As noted in the January 30, 2013 staff report, the Council initiated the rezoning by voting to direct staff to pursue immediate rezoning of Emerson Street 600 block, supported by the Colleagues’ Memo and statements made during the Council discussion on November 5, 2012, to satisfy the requirement set forth in PAMC Section 18.80.020 (b) for the motion statement to describe, in general terms, the reasons for consideration of a change in district boundaries. The PTC staff report of January 30, 2013 included PAMC Chapter 18.80 as an attachment. The draft Ordinance contains the requisite Findings, and staff has added citations from the Zoning Code and Comprehensive Plan to support these findings. Essentially, the PTC need only determine that the change of boundaries as presented (or as modified) is in accord with the purpose of City of Palo Alto Page 8 Title 18 and in accord with the Palo Alto Comprehensive Plan. The purposes of Title 18 are set forth in PAMC Section 18.01.020 is as follows: “The purposes of this title shall be to promote and protect the public health, safety, peace, morals, comfort, convenience, and general welfare, including the following more particularly specified purposes: (a) To further, promote, and accomplish the objectives, policies, and programs of the Palo Alto Comprehensive Plan; (b) To lessen congestion and assure convenience of access; to secure safety from fire, flood, and other dangers; to provide for adequate public health, sanitation, and general welfare; to provide for adequate light, air, sunlight, and environmental amenities; to promote and encourage conservation of scarce resources; to prevent overcrowding of land and undue concentration of population, to facilitate the creation of a convenient, attractive and harmonious community; to attain a desirable balance of residential and employment opportunities; and to expedite the provision of adequate and essential public services to the community.” Outreach Notice cards for the December 18, 2012 outreach meeting and PTC public hearings were sent to the merchants and owners of properties on the 600 Block of Emerson Street. Additionally, notice cards were sent to owners of property within 300 feet of the properties to be rezoned, as prescribed in PAMC Chapter 18.80. Staff had emailed Russ Cohen of the Downtown Business District of the outreach meeting and hearings. Mr. Cohen had reached out to the owners, as did the City’s Economic Development Manager, to ensure awareness of the hearings and proposal to rezone these properties. Finally, notices were emailed and hand carried to Emerson Street merchants. Policy Implications In addition to policies that support the retail vitality of the University Avenue/Downtown area, the Palo Alto Comprehensive Plan specifically directs evaluation of the ground floor retail requirements through Program L-9: Continue to monitor development, including the effectiveness of the ground floor retail requirement, in the University Avenue/Downtown area. Keep the Planning Commission and City Council advised of the findings on an annual basis. City of Palo Alto Page 9 Timeline The Council meeting of March 18, 2013 is tentatively targeted for first reading and adoption of the attached draft ordinance. Environmental Review This action is categorically exempt (per Section 15305 (Class 5) of the CEQA Guidelines) from the provisions of CEQA as they comprise minor alterations to land use limitations and can be seen to have no significant environmental impacts. Courtesy Copies Property owners and tenants of Emerson Street Downtown Business District Representative, Russ Cohen Attachments:  Attachment A: Draft Ordinance 2013 GF Emerson (PDF)  Attachment B: Copy of Emerson Street Building Stats (XLSX)  Attachment C: 01 30 13_Draft_Excerpt (PDF)  Attachment D: Nonconforming and Grandfathered Uses Sections (PDF)  Attachment E: PTC Excerpt Minutes 7 22 09 (DOC)  Attachment F: PTC Excerpt Minutes 9 23 09 (DOC) 1 Planning and Transportation Commission 1 Draft Verbatim Minutes 2 March 5, 2013 3 4 EXCERPT 5 6 Recommendation of a Draft Ordinance to Rezone all CD-C and CD-S zoned properties fronting 7 Emerson Street on the 600 block to add the Ground Floor Combining District. 8 9 Chair Martinez: And go directly to our open our public hearing into our first agendized item, 10 which is to reopen the hearing of, what was the date? February? January 30th, when we heard… 11 I think it’s on the second page. January 30, 2013, where we continued the hearing and 12 recommendation for staff for the Commission to recommend to Council approval of the Ground 13 Floor Combining District of 600 block of Emerson Street to replace the current CD-C and CD-S 14 zoning. 15 16 Now I remember Assistant Director what I was going to speak with you about. I thought it 17 might be a good idea to start with an overview from your perspective before we go into the staff 18 report on this item and how this relates to other things that we’re pursuing in the City. Sorry to 19 spring that on you, but we’ve talked about that in the past. 20 21 Aaron Aknin, Assistant Director: Sure. Aaron Aknin, Assistant Planning Director. For the sake 22 of background this subject of ground floor retail protection and this block in particular came out 23 of a colleague’s memo that the Council had back on November 5th. In that initial colleague’s 24 memo it was, the thought wasn’t just for Emerson, but wider spread protection for ground floor 25 retail within the downtown area. At that night the Council decided that the Emerson Street 26 corridor was the area which was most susceptible to immediate turnover from retail to office 27 space so the focused on that one particular area. However, there was a general discussion that 28 we need to take a look at uses in our overall downtown area. Which uses are most, what uses do 29 we want as a City and which uses are most susceptible to market forces that would turn them in a 30 direction that we don’t want our downtown to go to? So, for tonight focusing on that one block 31 stretch. 32 33 However, as the Commission knows you’ve recently reviewed a downtown development scope, 34 Development Cap scope and even though that one particular policy of the Downtown 35 Development Cap is the subject of it there are a number of other sub policies that relate to that 36 and that includes which areas have ground floor retail protection. Which areas do we want to see 37 office in? What type of parking exemptions should we have in our downtown areas? So while 38 tonight you’re focusing on this one particular block, we’re going to have a chance to take a step 39 back during the downtown development scope RFP and take a look at the broader picture of 40 what type of uses do we want to see in the downtown area and where are those uses most 41 suitable. 42 43 Chair Martinez: Ok, thank you that’s exactly what I was looking for. And now for our staff 44 report. 45 46 Amy French, Chief Planning Official: Ok, I’ll try to reduce my verbiage here. The 600 block of 47 Emerson Street is known for its walkability and vitality, for its popular restaurants, and as a 48 2 corridor or connection for pedestrians from the downtown core to Whole Foods and South of 1 Forest Avenue (SOFA) 2 area. As Aaron noted, the City Council directed this rezoning to the 2 Ground Floor Combining District to move forward without further study or delay since existing 3 retail spaces are vulnerable to conversion. The Ground Floor Combining District does not allow 4 new offices to replace retail uses. 5 6 Staff recommends the Commission reopen the public hearing and recommend Council adoption 7 of the attached draft ordinance, Attachment A, adding the Ground Floor Combining District to 8 the properties shown on the revised Exhibit 1 displayed on the screen. You’ll note that in the 9 January 30th discussion by Commission the map was requested to be revised to add the corner 10 properties. Staff studied it and added just the 203 Forest property on the top end of the map there 11 and not the Forest Plaza Building A ground floor properties. As described in the staff report 12 those were included in the hearing notice for tonight’s hearing should the Planning and 13 Transportation Commission (PTC) wish to include both of those in their recommendation to 14 Council. We would have to go ahead and amend Exhibits 1 and 2 to add the Forest Plaza 15 building if that is the recommendation. 16 17 So the Commission had requested some additional data and information and staff complied and 18 provided that in the report for tonight. And we are available for questions regarding this 19 information. I notice we do have at least one property owner here tonight from the Emerson 20 Street. So it would be great to have some public feedback on this. That concludes my 21 presentation as Chief Planning Official Amy French. 22 23 Chair Martinez: Ok, thank you. We don’t have any speaker cards for this item if you do care to 24 speak. 25 26 Vice-Chair Michael: So the first speaker will be Gary Herman for three minutes to be followed 27 by David Kleiman. 28 29 Gary Herman: Hi, I’m Gary Herman. I live in a residential condominium at 165 Forest, which is 30 probably what you think of as the “B” building at Forest Plaza. The owner’s association is called 31 Palo Alto Plaza, so I’ll probably use that when I talk about that complex. I just wanted as 32 resident of that building for the last nine years, I wanted to thank you guys for advancing this 33 proposal for all the reasons that are contained in the report. That area is from a residential point 34 of view of increasing walkability. The number of residents one sees on the block of Forest and 35 on Homer has increased significantly over the 10 years and the residential density south of Forest 36 has increased also. I think that’s great. 37 38 The one thing that I didn’t understand having listened to the last meeting and read the notes of 39 the last meeting is why the Forest Plaza A building wasn’t included in the proposal. It’s true that 40 mixed use condominium complexes as ours have a tension between the residential use and the 41 commercial use, but given when the conversion was made to business use and largely unutilized 42 area of the plaza for that complex and the fact that down the street at the corner of High and 43 Forest is a widely successful coffee shop much to my surprise, I don’t know what it would hurt 44 to include that in the proposal. I wouldn’t expect there would be a conversion to retail unless 45 there were economic incentives put in place, but I don’t think it is necessary to sort of give up on 46 that block and kind of interrupt the flow south from University and Hamilton. Thank you. 47 48 Chair Martinez: Thank you. 49 3 1 Vice-Chair Michael: Next speaker is David Kleiman for three minutes followed by Joyce 2 Yamagiwa. Yamagiwa, excuse me. 3 4 David Kleiman: Good evening Chair and Commissioners, my name is David Kleiman and I’m 5 the owner of 203 Forest, which is I think you know by now is at the corner of Forest and 6 Emerson. As you know I’ve requested and staff previously agreed and recommended that my 7 property be excluded from the proposed rezoning of the 600 block of Emerson. There are 8 several reasons for my request, some legal others practical. First let me state that I fully 9 understand the reasons for supporting retail along this block and in the downtown area. I do 10 support actually the rezoning of the balance of the block. I think it makes for good urban 11 planning. In order of the hours spent during the day, I am an architecture professor, a real estate 12 developer, and a real estate lawyer. So I’m quite familiar with the issues at hand and certainly 13 those affecting my property. But with respect to my property I feel that it should not be included 14 because of the economic harm that I’m quite sure that I would endure as a result. 15 16 My building is simply not conducive to retail uses. It’s over 40 years old, actually it’s over 50 17 years old and over the years other than acting as a cleaner’s, which was frankly unsuccessful for 18 most of its years as a retail use it has been an office use or some modified use that you could say 19 bridges the gap between office and retail. But for the last many years it’s been an office use. 20 And the reason why, is because the building is virtually devoid of window openings. There are 21 no window openings whatsoever on both the Forest and the Emerson side. None. As contrasted 22 with all the other properties that are subject to the rezoning which are virtually 100 percent 23 windows facing those facades. The only windows on my building are in the drive through and 24 those are basically the door openings and the side light. There’s a single window facing the 25 driveway that’s approximately 4 feet square. And the reality is that if you start walking down 26 that block and think about this building becoming retail and having a retailer in it, if you can 27 think of a tenant who would take it certainly let me know. I don’t think one exists. 28 29 So the limitation really speaks to the most important aspect of my position. Rezoning my 30 property in my opinion will effectively deprive me of viable economic uses since my only option 31 will be to attempt to rent the property to prospective retailers and without windows I just don’t 32 feel that that can occur. When I bought the property I made my investment based on a 33 reasonable expectation of the use as zoned and I think that given the nature of both those 34 expectations and the reality of the physical limitations of the property that a rezoning is 35 inappropriate. Thank you very much. 36 37 Chair Martinez: Before you leave, one of the Commissioners has a question for you. 38 39 Mr. Kleiman: Certainly. 40 41 Chair Martinez: Commissioner Keller. 42 43 Commissioner Keller: So since you’re a real estate attorney I assume you understand that as long 44 as the building retains its use of office space that that can continue. It’s only when it’s vacant for 45 more than a certain period of time that it might have to become retail. 46 47 Mr. Kleiman: Yes and actually I was quite open, Amy French and I discussed in some detail 48 some ways that we could kind of bridge the gap. And I would say that if I redeveloped the 49 4 property, which is a certain, not a certainty, but 30-40 percent probability in the next 10 years, I 1 would be open to, you know, because I could go to an all glass façade and attract retailers that 2 might be appropriate. But the current idea of leaving it vacant for a year would mean that 3 instead of me owning it, Wells Fargo Bank would own it as my lender. I mean if there was a 4 shorter period of time, and I suggested 90 days might be appropriate that’s something that would 5 be painful, but I could live with it. As an empty trying to rent to a retailer (interrupted) 6 7 Commissioner Keller: I think that there’s a misunderstanding and that is that as long as you 8 continue to rent to office occupancies, in other words if there’s a vacancy of an office occupancy 9 and you keep it vacant for less than a year you can continue to rent it to an office occupancy. 10 11 Mr. Kleiman: Yes, I’m fully aware of that. 12 13 Commissioner Keller: Right. However, you’re talking about the potential for redeveloping the 14 property. How can the City ensure that the property if it’s redeveloped has ground floor retail on 15 it without having that ground floor retail overlay? 16 17 Mr. Kleiman: I think that’s a good idea, a good question. I think for the same reasons that you 18 decided for example, not to include the, I forget, Forest Plaza? The condominium building that’s 19 been excluded. It was excluded initially then it was going to be included and now I think as of 20 tonight maybe it’s not going to be included. I think it would be appropriate to come back at a 21 later date when it’s being redeveloped and pose a zoning change or requirement that it conform 22 to what’s happening on the rest of the block, but I think at present again, given the physical 23 limitations (interrupted) 24 25 Commissioner Keller: So do I get you correct, let me see if I understand this. You have no 26 objection to if the property gets redeveloped having a ground floor retail requirement on the 27 redevelopment. 28 29 Mr. Kleiman: I do not. 30 31 Commissioner Keller: Thank you. 32 33 Chair Martinez: And thank you for speaking. 34 35 Vice-Chair Michael: And the final speaker is Joyce Yamagiwa. Thank you. For three minutes. 36 37 Joyce Yamagiwa: Joyce Yamagiwa, property owner of 624 through 640 Emerson, the largest 38 affected property. We are opposed to the rezoning. In our opinion this is a micromanagement of 39 the real estate. The City is, the development of Emerson has gone on for well over 20 years and 40 we have owned this property for well over 20 years. During that period of time we’ve had 41 office, we’ve had retail, we’ve had office, we’ve had retail. It comes and it goes. And the 42 market is very efficient. When somebody steps in from a zoning standpoint and makes a 43 requirement that it must be retail, you’re taking a piece of the market away. And in our opinion 44 it ends up not being as healthy a market because there is this contrived situation. 45 46 A few years ago, I think maybe even a year ago the whole zoning, retail zoning was under 47 discussion and we all agreed that University Avenue should not have an escape back to potential 48 office based on vacancy. So that went away, but in return the reversibility of the use of your 49 5 property was instituted. So with that you could be office, you could be retail, you could go back 1 and forth and we strongly supported that because it allowed us to operate our properties in the 2 healthiest fashion. Nobody wants vacancies. That can create a huge problem. And when you 3 start requiring certain uses which are maybe contrary to what the market is telling you, you end 4 up with vacancies. 5 6 So it’s very disturbing at this point that the City has now come back after we went through all 7 this discussion and negotiation about the zoning and this has focused on the Emerson block. So 8 again, we are opposed and would appreciate reconsideration. Thank you. 9 10 Chair Martinez: And thank you for speaking tonight. Commissioners let’s start a discussion on 11 this. Commissioner Panelli. 12 13 MOTION 14 15 Commissioner Panelli: Thank you Mr. Chairman. While I’m sympathetic to the concerns that 16 the property owners, the two property owners have expressed, I believe that there’s enough 17 flexibility built in to the use that allows you if you have it as office, you get to continue to use it 18 as office. If it’s never vacant, that’s great. You can use it forever as office even though it’s 19 zoned as ground floor overlay. And you said that the market speaks. Well if your property’s 20 empty for an entire year the property’s speaking that it’s not viable as an office space. So I 21 actually don’t think this is a particularly contentious issue. We debated it at length at the January 22 30th meeting. So I’m going to go ahead and actually put out the Motion right now to adopt 23 staff’s proposal. 24 25 SECOND 26 27 Chair Martinez: Ok. We have a Motion. Is there a second at this time? Commissioner Tanaka, 28 second. Would the maker care to speak to his Motion? 29 30 Commissioner Panelli: Well I sort of did that via my preamble, but like I said this does not 31 require property owners to change the use that they have today. If the highest and best use of 32 those properties is office they’ll continue to enjoy that. I think what Council’s concern here was, 33 we have situations where we started losing ground floor retail and trying to protect against 34 potentially that occurring. Anyway I have nothing more to say about it. Some people have 35 expressed concern about the property across the street from 203 Forest, the Anna Eshoo office 36 and I forget what the other office is. I’m sort of; I could go either way on that so I’m not 37 particularly feeling strong one way or the other. 38 39 Chair Martinez: Commissioner Tanaka would you care to speak on your second? 40 41 Commissioner Tanaka: Well I think Commissioner Panelli spoke about all the reasons why I also 42 support it, but I do believe that there should be some Friendly Amendments and I think while 43 we’re starting the Motion early, I there should be some discussion about that. I do have some 44 Friendly Amendments in mind, but I think we should have a little more of a discussion so I’m 45 going to hold them for right now. Thank you. 46 47 Chair Martinez: Commissioner Alcheck. 48 49 6 Commissioner Alcheck: So before we close the discussion on this, I’d like to say a few things. 1 The first is on Page 4 staff quotes rental rates on retail versus office space and this is the sort of 2 information that I think should always be accompanied by a source. I’d like to know if a broker 3 provided that information. If so, which broker? If it was property owners that provided you that, 4 I’m talking about $4 a square foot for retail versus the $5 to $6 per square foot for office. I think 5 it helps give a little credibility to those numbers. 6 7 And then I also sort of want to thank you guys for the discussion on takings. I think that’s very 8 helpful. On the fourth paragraph of Page 5 staff states that in general zoning ordinances, which 9 apply prospectively and which contain a reasonable grandfathered or legal nonconforming use 10 provision allowing the current use for a building to continue have been found by courts to be a 11 valid exercise of the police power and do not constitute a taking. I would argue that there is a 12 question about reasonableness when the grandfathered use provision only lasts for 12 months. 13 So this is not a situation where we’re allowing these buildings to operate indefinitely as 14 commercial spaces or have that flexibility. This is sort of if you test the water you’re all in. 15 There may be case law to support it, but from my position on the spectrum I would argue that 16 I’m very sympathetic to the property owners who are uncomfortable with the notion that their 17 use could be limited if they pursue what the market is demanding at a very specific time. 18 19 And so while I do think that there are significant benefits to creating a retail corridor there and I 20 can imagine that the Whole Foods property would be much more, would be very excited if there 21 was more walkability on that street and more draw for retail, I do think that this is a big deal. 22 And I sort of mentioned this last time that I would like a takings discussion and I’m a little more 23 sensitive I think to the notion that these owners are not necessarily in favor of this very 24 permanent change. 25 26 Chair Martinez: Anyone else? Commissioner Keller, please. 27 28 Commissioner Keller: So firstly with respect to the property at 203 Forest, that property can 29 remain office space indefinitely as long as the building remains standing and as long as no 30 vacancy lasts longer than 12 months. As long as he continues to rent the property to office space 31 with no vacancy, he can keep it office space for the next 50 years under the current zoning. It’s 32 only if there is a 12 month vacancy then does it revert to retail. Ok? And if it stays vacant as 33 office space for 12 months the market has spoken from my point of view. 34 35 Secondly, the issue is that if the property is redeveloped at 203 Forest, the owner has indicated 36 that he would be willing to have it be ground floor retail and that’s what this ordinance does. 37 And it’s much harder to impose ground floor retail after the fact when a development proposal is 38 already submitted. Then it becomes problematic to do a rezoning in the midst of a 39 redevelopment. And therefore it actually works much better to do the rezoning in advance. And 40 my understanding is that at least for 203 Forest we don’t have that problem. He can keep it as 41 office space as long as that use is continuous and he can keep, and it becomes ground floor retail 42 once a long vacancy or redevelopment. Both of those are reasonable and consistent with what 43 the property owner indicated. Things are slightly different in terms of the property on, that is, 44 the long section of low building, one story buildings that is now retail, because that has to stay as 45 retail. 46 47 And I’m not suggesting that we change anything with respect to the ordinance at this time. 48 However, in concert with a larger view of downtown retail I think that the way we accommodate 49 7 the market ebb and flow and basically it’s the market demand for retail that ebbs and flows. 1 Because essentially, because office space is more valuable than retail space office space can 2 crowd out retail space if the owners of the property allow it to. So allowing for market dictates 3 in terms of demands of office is not quite appropriate. On the other hand talking about market 4 dictates in terms of the availability of retail and whether somebody wishes to rent the retail, to 5 me that’s a more interesting question that could be addressed. 6 7 And one of the things that I proposed in terms of the 2009 ordinance, which was not adopted, 8 was the idea of allowing a Conditional Use Permit (CUP) for temporary office space when they 9 couldn’t rent it to retail. And I don’t want to have that for this block alone because I think that 10 that’s something that we should consider when we look at downtown overall and I would be 11 supportive of that as the escape valve rather than rezoning properties. As for example, Natalie 12 Salon is becoming office space. The Dragon Theatre is becoming office space and it will 13 probably become permanent office space because of the rezoning that we did in 2009 even 14 though arguably retail is viable there. So to me the issue is by having a Conditional Use Permit 15 it gives us the power to allow it, the flexibility of allowing and yet make it so that it reverts when 16 retail is more viable. And to me that’s the appropriate way of handling it. And so I’m not going 17 to suggest amending it at this time, but that’s something that I did bring up last time and I’ll 18 consider that in terms of the broader view in downtown overall. But in any event I’ll be 19 supporting this Motion and thank you. 20 21 Chair Martinez: Thank you. And now the moment we’ve all waited for, Commissioner King. 22 23 Commissioner King: Thank you. I don’t really have anything to add other than to appreciate, 24 offer appreciation for a thorough staff report and a thorough discussion. I do tend to support 25 Commissioner Keller’s belief that it’s important to protect the retail in this viable corridor and 26 that I agree that the way to address it is by having some form of in the event that retail does drop 27 off in demand such that there are vacancies then we can address it at that time. Thank you. 28 29 Chair Martinez: Vice-Chair Michael. 30 31 Vice-Chair Michael: I’m sorry that I missed the meeting when this first came up and also I want 32 to appreciate the members of the public who spoke, the property owners and the staff. I think 33 overall I’m a very, very strong supporter of ground floor retail. And I think this is really an 34 enhancement of the environment in downtown generally and I think in this street that would be a 35 good thing. However, I was struck by the comments from the property owners. In one instance 36 that this was a good idea, but it didn’t go far enough. In another instance that it perhaps should 37 exclude the one property because of the lack of windows that would be required by retail 38 business to be viable. And then the comment overall about the ability to have flexibility for 39 responding to market forces that in recent times as 2008, 2009 we saw very, very different 40 conditions than we have now. 41 42 But I’m also struck by the commitment that the Council has to make the downtown overall one 43 of the top three priorities. I’m a little bit concerned that by zoning Emerson Street now in 44 advance of coming forward with the entire plan that that will not be seen in the proper light, not 45 get the proper support from the public, and maybe not be executed in a completely reasonable 46 and nondiscriminatory fashion. 47 48 8 I like the logic of many of my colleagues, in particular Commissioner Keller in terms of the 1 flexibility if you incorporate the zoning ordinance with the Conditional Use Permit tool available 2 when needed. But I’m inclined to vote against this this evening, notwithstanding my support for 3 this ultimately because I think it’s not coming before the Planning Commission or to the Council 4 at the right time. I think that the Council is working on the downtown plan overall and this 5 should be part of that overall plan, which I think is important. And I think at that time it should 6 be zoned ground floor retail. I think it should allow for the flexibility Commissioner Keller 7 outlined in terms of the Conditional Use Permit if needed. And I think, although I can easily see 8 scenarios where the 12 month period really would be a problem; you get a late notice from a 9 tenant of vacating, you have to do some remodeling, the contractor’s held up, you need a permit, 10 something happens with your financing, somehow you just go over the time and then you put it 11 up for lease and you don’t find a tenant and it takes 13 months. So I mean, it doesn’t, I’m not 12 comforted by that year. Although it seems like a long time I can easily see that it might not be. 13 14 But I am thinking that as we did with the California Avenue Street Improvements ahead of the 15 California Avenue Concept Plan I would prefer that we start from the basis of the overall plan, 16 the Concept Plan for California Avenue and the University, the Downtown Plan for this. And 17 although I support it very strongly in principle, I think it’s the wrong time. 18 19 Chair Martinez: Would staff care to comment on why the Council has asked us to consider this at 20 this time? 21 22 Mr. Aknin: Sure. Aaron Aknin, Assistant Planning Director. There was that exact same 23 discussion when the Council was discussing this in November. And I think the conclusion that 24 was come to at that time was, yes we shouldn’t extend this ground floor protection widely 25 without doing more of a comprehensive look at the downtown area, but this one block has 26 critical importance because of the connection from downtown down to the Whole Foods area and 27 because that it is so susceptible to turning over to office. So because of those two factors they 28 went forward and asked staff to initiate this rezone. So I think there was an acknowledgement 29 that we need to take a step back and take a comprehensive look at the downtown area and where 30 retail is most important to the City, but there was also the realization that right now we need to 31 take some action for this particular corridor because it is the most susceptible. 32 33 FRIENDLY AMENDMENT 34 35 Chair Martinez: This afternoon one of the Commissioners described the land use planning as 36 “feeling.” I think he’s blowing his cover right now. And it’s my feeling that this block of 37 Emerson really feels like retail. The scale, the charm, the life, the pedestrian movement, it really 38 belongs in retail zoning. The fact that there are pressures that make it not the first choice of 39 property owners is a problem. And really is a problem that doesn’t go to serve the residents of 40 this area, the downtown, which is losing retail space, or even the property owners themselves in 41 the large scheme of things. Because I think once the City embraces the idea that this is one of 42 the important retail blocks of downtown, the City then has the responsibility to put some 43 resources behind it. To plant new trees, to improve the streetscape, to work with property 44 owners to make retail more attractive. And I see that coming as part of the Downtown Study and 45 the aspects of the Development Cap that the Assistant Director described earlier. 46 47 I would even go so far as to say that the Forest Plaza property should also be included in this 48 retail combining district because it’s really a large segment of the street. Although it looks very 49 9 office like right now, you could see that underneath that, that tile roof that retail could be 1 extended out towards the sidewalk. That it could be a very engaging part of the retail life of that 2 street and of downtown. So I would actually, and I don’t like authoring Friendly Amendments, 3 but I’d offer a Friendly Amendment that that property, Forest Plaza should be included in the 4 overlay district. So to the maker of the Motion? 5 6 Commissioner Panelli: I’d accept it. 7 8 Chair Martinez: And to Commissioner Tanaka? 9 10 Commissioner Tanaka: I accept it too. 11 12 Chair Martinez: Alright. One for one. Commissioners any further comment? Staff do you have 13 anything to say? Yes, pardon? Commissioner Panelli? Anybody? Oh, yes. Oh, Commissioner 14 King first. 15 16 Commissioner King: I had a question regarding that potential worst case scenario for the 12 17 month period. How is that defined? Is that, so if you assume somebody does get a short 30 day 18 notice on the lease and so they’ve effectively got 13 months. At what point are we determining, 19 what are the triggers for the occupancy having changed? 20 21 Cara Silver, Sr. Assistant City Attorney: I’ll take this one Amy. Cara Silver, Sr. Assistant City 22 Attorney. We would look at the period where the property is actually vacant and if there are 23 some extenuating circumstances in the lease arrangement, I think that would be taken into 24 account. There is some flexibility in the 12 month period. 25 26 Chair Martinez: Commissioner Tanaka and then Alcheck. Did you have a comment to make? 27 Ok, Commissioner Alcheck. 28 29 Commissioner Alcheck: So I’d like to state for the record that I support ground floor retail and 30 I’d like to encourage it on this street, but I don’t support this Motion. I don’t like the idea that 31 we’ll create an incentive for property owners to, I don’t even know the right word, monkey 32 business. I mean, I don’t think it’s going to be 12 months. Right? It’s not so much that they 33 won’t be able to rent to an office for 12 months it’ll just be that they’ll have to rent for less. And 34 if I was a property owner that preferred commercial space I would find the tenant at the 11th 35 hour. 11th hour? And till I could find the tenant I wanted. You don’t necessarily need to occupy 36 space to lease it. I’m sort of uncomfortable with putting the City in the position of figuring out 37 what’s going on and who’s, where we are and 12 months has past, now you’re retail. And it’s 38 incorrect to say that the only way this flexibility is lost, actually it’s not flexibility. The only way 39 you’re forced into the retail is if there’s a 12 month vacancy. The truth is, is that if you dabble in 40 retail leasing you lose your commercial option. 41 42 So the issue here isn’t that we’re restricting commercial leasing in the event that there’s a 12 43 month vacancy. The issue is that we are restricting flexibility. It is the option to have; it is the 44 flexibility of choosing commercial or retail depending on your preference. And they are very 45 different. Retail tenants are very different than commercial tenants. And the market cycles can 46 be longer than 12 months. They can be 12 years. And I support ground floor retail. I don’t, I’m 47 not that comfortable with this pick and choosing of the properties on a very specific street. 48 49 10 I agree with Commissioner Michael in that there should sort of be an approach where we 1 encourage ground floor retail all over the University area and I’m a little uncomfortable with the 2 notion that we are essentially going to encourage potentially, I don’t know, faux leasing for those 3 owners that certainly don’t want to change to commercial. And maybe that doesn’t seem like a 4 possibility because if retail rents were so much higher they would go for them, but if retail rents 5 are so much higher than commercial rents then we don’t even need this. So, that’s all I’m going 6 to say. 7 8 Chair Martinez: Commissioner Keller. 9 10 Commissioner Keller: So two quick things. One is a point of clarification and that is I assume 11 for the Forest Plaza that you’re only referring to 698 Emerson, 171 Forest, and 175 Forest, not 12 the properties on the other half of the building towards High Street. 13 14 Multiple Speakers: Yes. 15 16 Commissioner Keller: Yes, I just wanted (interrupted) 17 18 Chair Martinez: I think he was asking the Friendly Amendment maker. Yes, I agree with that. I 19 think the others will follow, but for the sake of this Amendment that was my intention. 20 21 Commissioner Keller: Yes because those are the only ones that are noticed. 22 23 Commissioner Panelli: And yes as the Motion maker I accept that clarification. 24 25 Commissioner Keller: Thank you. Just trying to keep the record clean. Thank you. The second 26 thing is that I’m sympathetic with Commissioner Alcheck’s notion that property owners who 27 currently have office space will be loath to convert their space to retail because it’s sort of the 28 one way ratchet. Once it becomes retail it has to stay as retail and I think that that’s one of the 29 drawbacks of this approach without having potential CUP to go the other way, which is why I 30 advocated CUP in 2009 as opposed to a complete removal of the ground floor overlay. On the 31 other hand the question is what happens with the fresh, former Fresh space that’s now office and 32 the former Bay Area Lock Doctor space that is even better retail than it was when Bay Area 33 Lock Doctor had it. They remodeled it to look like retail and it was retail for a little while and it 34 stopped being retail. So I think that the issue is that if we don’t do this it’s likely, it is a chance, I 35 can’t talk about the probability, but there’s a significant chance that other properties will desire 36 to take the higher rent and we’ll lose the connectivity of retail which is critically important. 37 Thank you. 38 39 Chair Martinez: Anyone else? Yes, Commissioner King. 40 41 Commissioner King: Yes, a clarification. So I don’t see on the list of current uses, I don’t see the 42 Forest Plaza that has now been added back in the Amendment to the Motion. Can staff help with 43 current uses for those parcels? 44 45 Ms. French: Yes, I’d be happy to, one moment. The current uses that are now in the building? 46 Ok, yeah. There’s a table we provided in the staff report. It’s the Anheuser Busch Beer Garage 47 Office and warehousing. 48 49 11 Commissioner King: Which page would that be? I’m looking at Exhibit 2. 1 2 Ms. French: It’s Page 2 of the staff report, and it’s listed down under the Forest Plaza in the 3 middle there, middle section. Anna Eshoo’s office is 698 Emerson. 171, 175 are both the 4 Anheuser Busch Beer Garage Office. So warehousing and distribution is allowed in CD-S. It’s 5 not an allowed use in CD-C, but… 6 7 Commissioner King: Ok and so those are, Beer Garage office that is an office use? Anheuser 8 Busch Beer Garage Office? 9 10 Ms. French: It may have warehousing and distribution function as well; I haven’t knocked on the 11 door to talk about their business. 12 13 Commissioner King: Ok, but in general we believe these are current office use so then they 14 would have the 12 month period as well. 15 16 Ms. French: Yes. They look like office. 17 18 Commissioner King: Thank you. 19 20 Chair Martinez: Commissioner Alcheck. 21 22 Commissioner Alcheck: Yeah, just really quickly I want to go back to that cost to rent on 23 Emerson Street question. The reason why I asked you about sort of sources is because 24 commercial retail space is sort of advertised at a specific rate and the person who is willing to 25 pay that rate takes it whether they’re commercial or retail. So it sort of, it was sort of confusing 26 to me because it sort of sounds like if you’re a retailer, rents are $3 or $4 and if you’re an office 27 user rents are $5 or $6. There should be really one number. Space per square foot on this street 28 is X. If you’re a retailer and you can afford it you pay X. If you’re an office user and you can 29 afford it you pay X. They don’t distinguish between the two and so that’s sort of part of the 30 reason why I highlighted that as (interrupted) 31 32 Chair Martinez: What is your point though Commissioner? 33 34 Commissioner Alcheck: I just think we are talking like it’s a given that office rents are so much 35 higher, or that office users can pay so much more. I think the underlying implication is that 36 retailers can’t. I don’t think that’s true and the right retailer who can successfully perform in the 37 space will. And I, that’s, it’s like there’s a case here that we need to protect the retailer. We 38 don’t have to protect a successful retailer. You have to protect an unsuccessful retailer. That’s a 39 major point. So that’s all. 40 41 Chair Martinez: Anyone else care to speak before we call for the vote? Ok. Yes, Commissioner 42 Panelli. 43 44 Commissioner Panelli: I’m actually supportive of Commissioner Keller’s CUP concept. Is there 45 some way that we can make sure that gets on our agenda in the next six months? What would be 46 the right process for us to say we really want that call it “relief valve,” I’ll call it the “relief 47 valve” proposal in the instance that we hit some kind of major event that needs it. 48 49 12 Mr. Aknin: So I think the most appropriate as part of the Downtown Development Cap process 1 we’re going to have several check-ins with the Commission as well as with the Council. So in 2 one of those early check-ins I suggest, well it’s duly noted now so we can communicate that to 3 whatever consultant comes onboard, but also I would say to bring that up in one of the early 4 sessions that we have. 5 6 Commissioner Panelli: And what’s the current schedule for? 7 8 Mr. Aknin: And I’ll touch on this later, but we’re going to the Council coming up to release the 9 RFP on March 18th. Probably take about two months or so to get it somewhat onboard and say 10 we’ll have the first check-in sometime this summer. 11 12 Commissioner Panelli: Sometime, I’m sorry. 13 14 Mr. Aknin: Sometime this summer. 15 16 Commissioner Panelli: This summer? 17 18 Mr. Aknin: Yeah. 19 20 Commissioner Panelli: Ok. 21 22 Chair Martinez: Ok, staff can you read the Motion? Did you have it noted? 23 24 Ms. French: Well the Motion by excuse me, Motion by Commissioner Panelli, seconded by 25 Commissioner Tanaka to adopt the staff proposal to recommend that Council adopt the staff 26 proposal with a Friendly Amendment accepted by both the Mover and the Seconder to include as 27 well the 698 Emerson, 171 and 175 Forest condominium ground floor units in the rezoning. 28 29 VOTE 30 31 Chair Martinez: Very good. Commissioners let’s vote. Those in favor of the Motion say aye 32 (Aye). Those opposed? The Motion passes six to one with Commissioner… Oh, sorry. Five to 33 two with Commissioner Keller, Commissioner Panelli, Chair Martinez, Commissioner King, 34 Commissioner Tanaka voting in favor and Vice-Chair Michael and Commissioner Alcheck 35 voting against. 36 37 MOTION PASSED (6-2) 38 120-26-110 120-26-091 120-26-111 120-26-109120-26-043 120-26-039 120-26-038 120-73-004 120-27-008 120-27-009 120-27-010 120-26-106 120-26-025 120-26-026 Seni or Cente r Fire Sta. 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129E 39A - 139E 235 251249 252 247 244 250 177220 261251-257 205245231225213205 170 172 206 234 240 183 251 270 241-247 215- 237 210-216 171 219 219 235 262 202 245 254 252 250 203 215 221 313-317318 220- 224 238 319-323 339 197 309 542-550 531-539 759 223-239 188190 251-293 202 206 208 210 212 216 220 275 539 201 400 27 168 865857 3 3 34 795 848 903 408 412 440 483A - F 435 751 735 745 532 210 727 733 335 328 330 345 214 350 800 806 409 419 441 441A 230302306308312316 301 303 305 307 309 325 251 807 821 829 801 818-824 420 424 430 832A 832 842A 842 852A 852 862A 862 872A 872 351A 351 355A 355 359A 359 363A 363 367A 367 425 2 423425411 - 419 457-467 469-471473-481 454 729 A-D 733-743 734-740 724-732 824-828 715 95 445 324 328 545547549 590 425447 827 565 585 595 315 507 561 706 536 200 280-290 150 158164 276 516 698 161 159 157777 132 127 180 528 120 247 372 524 548550 152 207 345 336 515 658 227 2729 539 115 135 321 558 #200-202 558 #C & D 140 35 808 461 435433 421 727 A-C 218 255 206 739 260 840 650 642 351 451 551 375 530 643 415 12 700 802 99 89 87 548 423 668 305 -313 423 405 3535 611 320322 346 323 470 471 484 115 528 426 264 430 508 756 - 760 544546 515 743 745 747 549 211213 151 160 257 433-457 482 330 349 401 539 440 691 67 312 202 651 443445 447 716 218 398 262 335 218 640-646506 91 327 469 261 263 303 401 403 254 401 91 40 101 819 301 725 595 705 541 321319 600 146 EMERSON STREET HOMER AVENUE AMINO REAL AMINO REAL HAWTHORNE AVENUE RAMONA STREET EMERSON STREET HAWTHORNE AVENUE HIGH STREET EVERETT AVENUE EVERETT AVENUE HIGH STREET ALMA STREET ALMA STREET LYTTON AVENUE EL CAMINO REAL UARRY ROAD ALMA STREET EMERSON STREET RAMONA STREET LY T T O N A V E N U E UNIVERSITY AVENUE RAMONA STREET BRYANT STREET HIGH STREET EMERSON STREET ALMA STREET EMERSON STREET HIGH STREET HIGH STREET HAMILTON AVENUE HAMILTON AVENUE EMERSON STREET HAMILTON AVENUE GILMAN STREET WAVERLEY STREET BRYANT STREET FOREST AVENUE FOREST AVENUE BRYANT STREET RAMONA STREET RAMONA STREET BRYANT STREET FLORENCE STREET KIPLING STREET LYTTON AVENUE WAVERLEY STREETWAVERLEY STREET EVERETT AVENUE EVERETT AVENUE BRYANT STREET WAVERLEY STREET HAWTHORNE AVENUE RAMONA STREET BRYANT STREET LYTTON AVENUE UNIVERSITY AVENUE COWPER STREET KIPLING STREET UNIVERSITY AVENUE UNIVERSITY AVENUE COWPER STREET WAVERLEY STREET HAMILTON AVENUE HAWTHORNE ET COWPER STREET HAWTHORNE AVENUE HAWTHORNE AVENUE KIPLING STREET EVERETT AVENUE COWPER STREET WEBSTER STREET EVERETT A WEBSTER STREET WEBSTER STREET LYTTON AVENUE TASSO STREET HAMILTON AVENUE COWPER STREET FOREST AVENUE FOREST AVENUE WAVERLEY STREET BRYANT STREET HOMER AVENUE WAVERLEY STREET CHANNING AVENUE RAMONA STREET WEBSTER STREET WEBSTER STREET COWPER STREET HOMER AVENUE HOMER AVENUE COWPER STREET KIPLING STREET CHANNING AVENUE WA UNIV LYTTON AV WEBSTER STREET HAM FORE HOME WEBSTER STREET CHANNING AVENUE CHANNIN U N I VERS I T Y C IR C L E EVERETT COURT LANE 39 LANE 7 EASTLANE 5 EAST LANE 6 EAST LANE 20 EAST LANE 30 LANE 20 WEST LANE 21 MITCHELL LANE LANE 15 EAST BRYANT COURT PAULSEN LANE LANE 12 WEST LANE 11 WEST CENTENNIAL WALK DOWNING LANE LANE 56 EL CAMINO REAL PENINSULA CORRIDOR JOINT POWERS BOARDS BOARD EMERSON STREET HIGH STREET HIGH STREET ALMA STREET ALMA STREET ALMA STREET FOREST AVENUE CHANNING AVENUE HOMER AVENUE EL CAMINO REALEL CAMINO REAL WELLS AVENUE URBAN LANE URBAN LANE ENCINA AVENUE ENC MEDICAL FOUNDATION WAY CS PC-2967 PC- 3266 RM-15 PC- 4182 PC-3 7 0 7 PC-4283 PF RT-35 CS CS PC-4465 CS CD-C (P) RM-30 AMF (MUO) CD-S ( P ) AMF PC-4612 PF PF PF RM-30 PC-4063 PC-3872 PF PF PC-2130 PF CD-C (P) PF PF PF CD-C (P) CD-C (P) CD-N (P) PF PC-3111 PC-3007 PC-3 9 7 4 PF PF PC-4262 PC-4243 PC-4238 PC-4195 RM-15 RMD(NP) RM- 40 PC-3429 CD-N (P) CD-C(GF)(P) RM-40 CD-C (P) CD-C (P) PF AMF DHS DHS PF PC-4611 PC-4053 RMD (NP) RMD(NP) RM-30 PF PC-3102 2 M-15 30 PC-4339 RM-30 RM-30 PF PC-4052 PF PC- 2545 RM-40 PC-2145 R PC-3995 PC- 4782 CS RT-50 CD- S ( P ) RT-50 RT-35 RT-50 PC-4779 RM-30 CD-C (P) PC-4296 PC-4436 PC- 3437 RM-1 PC-8659 RM-30 CD-C(GF)(P) Seni or Cente r Fire Sta. No.1 Downtown Library Palo Alto Medical Founda tion Heritage Park Lytton Plaza Cogswell Plaza Scott Park Johnson Park Williams Park City Hall This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend CD Zoning District CD-C (GF/P) Zoning District Removed from GF Overlay 2009 Added GF Overlay 2009 SOFA II CAP Multi-modal Station 0'450' Commercial Downtown Zoning Districts Area Map 2009 CITY OF PALO ALTOINCORPORATED CALI FORNIA P a l o A l t oT h e C i t y o f APRIL 1 6 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2013 City of Palo Alto RRivera, 2013-01-22 13:54:02CD GFRezone add remove 2009 (\\cc-maps\gis$\gis\admin\Personal\Planning.mdb) Emerson Street Properties Proposed for GF Combining District Address 611-623 Emerson 625-631 Emerson 635 Emerson 643 Emerson 651 Emerson 203 Forest 698 Emerson/171-175 Forest644 Emerson 624-640 Emerson 620 Emerson 180 Hamilton Year Built 1924 1902 1939 1947 1920 1958 1981 1962 1922 1940 1975 Historic Cat Category 2 Category 2 Category 4 Pot. Eligible Not listed Not listed Not listed Not listed Category 3 Pot. Eligible Not listed Lot Dimensions 65' x 102'50' x 103'30' x 103'40' x 100'59' x 85'50' x 100'3 ground floor condos in 45' x 102'102' x 125'40' x 103'85' x 100' "Forest Plaza" Lot Area 6,475 s.f.5,992 s.f.3,075 s.f.4,100 s.f.5,000 s.f.5,000 s.f.4,600 s.f.4,003 s.f.8,500 s.f. Building Area 7,558 s.f.6,690 s.f.4,140 s.f.4,000 s.f.1,760 s.f.3,020 s.f.g.f. approx 3,000 s.f.8,336 s.f.12,875 s.f.4,000 s.f.53,450 s.f. # Floors 1 floor + mez 3 floors 1 floor + mez 1 floor 1 floor 1 floor 1 floor of 5 2 floors 1 story 1 story 8 stories Ground Area 6,000 s.f.1,290 s.f.2,400 s.f.4,000 s.f.1,760 s.f.3,020 s.f.approx. 3,000 s.f.4,153 s.f.12,875 s.f.4,000 s.f.8,500 s.f. Current Use(s)Fitness & Offices Offices Gen'l Bus Office Restaurant Restaurant Office Office Office Rest./retail Retail Hotel/rest. Use(s) Est.2002 CUP 1983 1982 1995 CUP 1975 CUP 2000 Bank 1981-93-98 - 09-11-12 1965 1986 1993 1975 1991 CUP 2002 CUP Fitness Remodel year 1916 1970 1990 1997 1991 1998 general office 1983 1960 na 2012-13 aka birge clark victorian Acme Glass Bucca de Beppo Empire Tap former Cardinal Eshoo office, Anheuser Busch Buzz All Stars Gordon Biersh etc Florist Casa Olga cleaners Offices Owner Thoits Thoits Melchor Maxwell Tseng Kleiman Various Martinellli Palo Alto Theater Krucker Joie de Vivre 171-175 Forest 1588 s.f. lot 1285 s.f. bldg Forest Plaza:632: office 1993 32 du's mix commercial 4-5 stories 31,525 sf lot 120-61-001 is 4,319 s.f. 120-61-005 is 1,285 s.f. ATTACHMENT E except where required by law or as may be authorized by a use permit in accord with Chapter 18.76 (Permits and Approvals). (Ord. 4826 § 88,2004: Ord. 3792 § 3,1988: Ord. 3108 § 18, 1979: Ord. 3098 § 2,1978: Ord. 3048 (part), 1978) Chapter 18.30(C) GROUND FLOOR (GF) COMBINING DISTRICT REGULATIONS Sections: 18.30(C).010 Specific Purpose 18.30(C).020 Permitted Uses 1"8.30(C).030 Conditional Uses 18.30(C).040 Annual Monitoring of Ground Floor Retail Use 18.30(C).010 Specific Purpose The ground floor combining district is intended to modify the uses allowed in the CD commercial downtown district and subdistricts to allow only retail, eating and drinking and other service-oriented commercial development uses on the ground floor. For the purposes of this chapter, "ground floor" means the first floor which is above grade. Where the ground floor combining district is combined with the CD district, the regulations established by this chapter shall apply in lieu of the uses normally allowed in the CD district. Except for the regulations relating to uses set forth in this chapter, all other regulations shall be those of the applicable underlying CD district. (Ord. 4098 § 2 (part), 1992) 18.30(C).020 Permitted Uses (a) The following uses shall be permitted in the GF combining district: (1) Eating and drinking; (2) Hotels; (3) Personal services; (4) Retail services; (5) Theaters; (6) Travel agencies; http://www.amlegal.com/alpscripts/get-content.aspx 12/18/2012 Page 6 of 19 (7) Entrance, lobby or reception areas serving nonground floor uses; (8) All other uses permitted in the underlying district, provided such uses are not on the ground floor. (b) Notwithstanding subsection (a), not more than twenty-five percent of the ground floor area not fronting on a street may be occupied by a use permitted in the applicable underlying CD district. (Ord. 4098 § 2 (part), 1992) 18.30(C).030 Conditional Uses (a) The following uses may be conditionally allowed on the ground floorin the GF ground floor combining district, subject to issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approvals) and with the additional finding required by subsection (b): (1) Business or trade school; (2) Commercial recreation; (3) Day care; (4) Financial services, except drive in services; (5) General business service; (6) All other uses conditionally permitted in the applicable underlying CD district, provided such uses are not on the ground floor. (b) The director may grant a conditional use permit under this section only if he or she makes the . following firiding in addition to the findings required by Chapter 18.76 (Permits and Approvals): The location, access or design of the ground floor space of the existing building housing the proposed use, creates exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district. (c) Any use conditionally permitted pursuant to this section shall be effective only during the existence of the building that created the exceptional circumstance upon which the finding set forth in subsection (b) was made. (Ord. 4826 §§ 94, 95, 2004: Ord. 4098 § 2 (part), 1992) 18.30(C).040 Annual Monitoring of Ground Floor Retail Use . A downtown retail vacancy rate survey shall be prepared annually in September of each year, and a report shall be prepared conveying that information to the Planning and Transportation Commission and City Council prior to the end of the year. The purpose of the survey is to assess changes in retail use in the downtown zones. The vacancy rate shall address all areas zoned CD-C or GF in downtown. http://www.amlegal.com!alpscripts/ get -content.aspx 12118/2012 / 18.70.050 Nonconforming Use -Maintenance and Repair of Facility (A) Whether changes in the nature of the building or a portion of the builling would be required by Title 16 or similar regulations in order to convert the use of the building, or portion of the building, to a conforming use; (8) Whether any reconstruction or remodeling necessary to convert the use and occupancy of the building, or a portion of the building, involves structural alterations; (C) Whether the building, or portion ofthe building, was originally designed and constructed for the particular existing noncmforming use or uses of similar character. @ A nonconforming me which is changed to or replaced by a conforriJing use shall not be reestablished, and any portion of a site or any portion of a building, the use of which changes from a nonconforming toa conforming use, shall not thereafter be used except to accommodate a conforming use. (Ord. 3048 (part); 1978) 18.70.040 Nonconforming Use -Discontinuance (a) On any site having facilities thereon valued at less than one thousand dollars, any nOl1confonning use, other than a residential use, which is discontinued or abandoned or otherwise ceases operation and use of the site for a period of six months or longer shall not be resumed, reestablished, or continued, and all subsequent use of such site and facilities thereon shall conform to this title. (b) On any site not subject to subsection (a), a nonconforming use offacilities designed and constructed for nonresidential purposes which is discontinued or abandoned or otherwise ceases operation and use of the site for a period or one year or more shall not be resumed, and all subsequent use of such site and facilities thereon shall conform to this title. (c) Notwithstanding the prOVisions of Section 18.70.030, or the provisions of subsections (a) and (b) of this section,jn any residential district, a nonresidential, nonconforming use occupying facilities originally designed and constructed for residential use which is discontinued or abandoned or otherwise ceases operation and use of the site for a period of ninety days or greater shall not be continued or recommenceq, and any subsequent use of the site and facilities shall conform to this title. This provision shall not be construed to prevent a change of ownership or management of such nonconforming use; provided, that any cessation of operation of the use is solely in connl!:tion with the transfer of ownership or management to a specificallydesignated person or entity and is solely for the purpose of accomplishing any transfer oftitle, equipment, operational control, or similar purpose. (Ord. 4016 § 43, 1991: Ord. 3048 (part), 1978) 18.70.050 Nonconforming Use -Maintenance and Repair of Facility Facilities occupied or used by a noncmforming use permitted by this chapter shall be subject to the following provisions governing maintenance, repairs, alterations, or replaement: eh. 18.70 -Page 3 (Supp. No 13 -101112007) JI Nonconforming Use -Replacement of Facility Normal and routine maintenance of any structure for the purpose of preserving its existing condition, retarding or eliminating wear and tear or physical depreciation, or complying with the requirements of law, shall be permitted. Incidental alteration shall be permitted, provided the value of the incidental alterations in anyone-year period shall not exceed twenty percent of the value of the facility prior to such alterations. Structural alterations or enlargement oflhe facility shall be permitted only to accommodate a conforming use, or when made to comply with the requirements oflaw. Nonconforming Use -Replacement of FaciJirLl' used or occupied wholly or partly by one or more nonconforming uses, which is damaged "U~{~U by any means except ordinary wear and tear and deprecation, may be reconstructed or, ;.I:Y..ua'J for occupancy or use by a conforming use, except in the following instances: Where none of the nonconforming uses is subject to termination as provided by Section 18.70.070, reconstruction or replacement for continued occupancy or use by such nonconfonning use shall be pennitted only in accord with the following limitations: (I) The extent of nonconformity. or the inte!1~~of activity. PI the site area or floor area occupied by the nonconforming use silisequent to reconstruction or replacement of the facility shalll!.0t exceed that existing prior to reconstruction or replacement. (2) Reconstruction or replacement shall be subject to all applicable laws, regulations, and procedures otherwise governing construction on the site. When one or more of the nonconfonning uses. is subject to termination as pnvided by Section 18.70.070, reconstruction or replacement for continued occupancy or use by such nonconforming use shall be permitted only in accord with the following limitations: (I) During the first one-third ofthe applicable termination period of such use, the Dcility may be reconstructed or replaced; provided the value of such reconstruction or replacement shall not exceed seventy-five pcecent of the value of the facility prior to damage or destruction . . I' (2) During the second one-third of the applicable termination period of such use, the . facility may be reconstructed or replaced; provided the value of such reconstruction or replacement shall not exceed fifty percent ofthe value of the facility prior to damage or destruction. (3) During the last one-third of the applicable tennination period of such use, the facility may be reconstructed or replaced; provided the value of such reconstruction or replacement shall not exceed twenty-five percent of the value of the facility prior to damage or destruction. (4) Any reconstruction or replacement permitted in this chapter shall not extend or otherwise modify the required termination date established by Sectionl8.70.070 and applied to the nonconforming use prior to such reconstruction or replacement. Said . c. 101112007) Ch.18.70-Page4 i I I " " , 18.70.070 Nonconforming Use -Required Termination tennination date shall apply to all portions of the site or structure, including those portions reconstructed or replaced. (Ord. 4016 § 44,1991: Ord. 3048 (part), 1978) 18.70.070 Nonconforming Use -Required Termination (a) In any district, a nonconfonning, nmresidential use occupying a site having facnlies thereon valued at less than one thousand dollars, shall be tenninated within five years from the effective date of this section, or within five years from the date such use becomes nonconfonning, whichever date is later, and within such time the improvements shall either be removed, or converteq or modified to accommodate a confonning use. (b) ...-In any district, a nonconfonning, nmresidential use of a site not subject to subsoction (a) of this section shall be tenninated in accord with the following provisions and schedules: (1) When occupying or using facilities al:signed and built for residential use, the nonconfonning use shall be tenninated within ten years from July 20, 1978, or within J ten years from the date such use becomes nonconfonning, whichever date is later, and within such time the improvements shall either be Itmoved, or converted or modified to accommodate a confonning use. (2) When occupying or using facilities al:signed or built for nonresidential use, the nonconfonning use shall be tenninated, and the facilities shall be converted or modified to accommodate a confonning use, or shaH be emoved at or before the time limit prescribed in subdivision (3) of this subsection; provided, however, that no such tennination, removal, or conversion shaH be required within fifteen years from July 30, 1978, or within fifteen years from the date such use became noncQnforming, whichever date is later; provided, however, that uses which were made non­ confonning as a result of the 1974 Fire Zone I Study, by Ordinance No. 2777, adopted March 25, 1974, shall tenninate on November 23, 1990; and provided, further, that any use made nonconfonning by said Ordinance No. 2777, the primary purpose of which is to prepare and deliver food to senior citizens, shut-ins and others with limited mobility may remain and shall not be subject to tennination pursuant to this section. Such uses shaH be pennitted to remodel, improve or replace site improvements in accordance with applicable site ttvelopment regulations, provided that any such remodeling, improvement or replacement shall not result in any increased floor area. Notwithstanding the dates of tennination of uses required by this subsection (b )~), the required tennination dates ofthe following uses shaH be as hereinafter set forth: (A) The nonconforming use(s) ofthe prqJerty at 440-460 Page Mill Road for nonprofit orthomolecular and molecular medical esearch functions shall tenninate on or before July 20, 1998. (B) The nonconfonning use ofthe property at 464 Colorado Avenue for a dance studio and associated parking shaH tenninate on or before July 20, 2003. Ch. 18.70-Page 5 (Supp. No 13 -10/112007) I ~l 1