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HomeMy WebLinkAbout2001-04-23 City Council (2)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: SUBJECT: APRIL 23, 2001 CMR: 203:01 EXTENSION OF INTERIM ZONING REGULATIONS TO PRESERVE AND ENCOURAGE NEIGHBORHOOD SERVING USES IN GROUND FLOOR LOCATIONS IN THE NEIGHBORHOOD COMMERCIAL (CN) DISTRICT AT CHARLESTON CENTER (PORTIONS OF THE 3900 BLOCK OF MIDDLEFIELD ROAD) AND THE MIDTOWN SHOPPING DISTRICT (PORTIONS OF THE 2600, 2700, AND 2800 BLOCKS OF MIDDLEFIELD ROAD AND PORTIONS OF THE 600 AND 700 BLOCK OF COLORADO AVENUE), AND ADDING THE PEDESTRIAN SHOPPING REGULATIONS TO THE MIDTOWN SHOPPING DISTRICT. RECOMMENDATION Staff and the Planning and Transportation Commission recommend that the city Council modify and extend the interim r.egulations for Charleston Center (as defined in Exhibit A of Attachment A) and the Midtown Shopping District (as defined in Exhibit A of Attachment B). For both areas, staff recommends deleting the. definition of neighborhood-serving use and substituting a more general reference to the Comprehensive Plan definition of a neighborhood center. Staff and the Planning and Transportation Commission (PTC) also recommend adopting Pedestrian Shopping Combining District (P) regulations (Chapter 18.47 of the Palo Alto Municipal Code) for the Midtown Shopping District. Both interim ordinances would be in effect until March 2, 2003. BACKGROUND The full staff evaluation of the interim ordinances and an alternative approach for Midtown based on the ground floor restrictions as applied to parts of downtown is in the attached Planning and Transportation Commission report (see Attachment C). This City CMR:203:01 Page 1 of 8 Council report primarily summarizes the Planning and Transportation Commission review on March 28, 2001. On November 20, 2000 the City Council directed staffto return on January 16, 2001 with a recommendation for an interim ordinance for the Midtown Shopping District and Charleston Center, which would restrict uses on the ground floor in each of the two areas. Council indicated that the retail base in both of these areas was threatened and that an interim solution should be found to address this problem. The interim solution would be in place until the zoning ordinance update is completed and a permanent solution can be developed. On January 16,2001 the City Council approved interim regulations for both areas, which limited new office use on the ground floor. These interim regulations were reaffirmed on February 20, 2001 with modifications and direction from Council for staff to return with an analysis of how the ground floor regulations that are currently in place in parts of the Downtown could be adapted and applied to the Midtown Shopping District (see Attachment D for this alternative approach for Midtown). " BOARD/COMMISSION REVIEW AND RECOMMENDATIONS Planning and Transportation Commission On March 28, 2001 the PTC reviewed and discussed the interim regulations currently in place for the Midtown Shopping District and Charleston Center. They also reviewed an alternative ordinance that kept most provisions of the Charleston Center interim ordinance but applied ground floor use restrictions similar to those used in portions of the Downtown to Midtown. The PTC rejected that alternative and recommended extension of the interim regulations, 4-0-2-1 (Schink and Bialson stepped down due to a stated conflict of interest and Byrd was absent) with the modification that the definition of neighborhood serving use be removed from both interim ordinances and further discussed as part of the overall zoning ordinance update. The Commission generally agreed with staff that the term was not yet sufficiently defined and would not be particularly helpful when determining if a specific use was neighborhood serving or not. Because the Charleston Center ordinance still requires that new offices be certified as "neighborhood serving," staff has replaced that definition with a finding that the new office is Consistent with the Comprehensive Plan definition of a Neighborhood Center (see Section 18.41.035(d) of Attachment A). Similarly, the additional conditional use permit finding for ground floor offices in Midtown now references Neighborhood Centers (see Section 18.41.037(e) of Attachment B). The PTC indicated that it fully supported the concept of protecting existing retail and personal services on the ground floor of neighborhood centers and limiting office use in those locations and in general. The PTC favored moving assertively to replace ground CMR:203:01 Page 2 of 8 floor offices with conforming uses when a business or leasehold changed hands, instead of permitting replacement of one non-conforming business with another. It should be noted that the interim ordinance currently in place for Midtown allows a nonconforming us to continue only when it is purchased by another owner who intends to operate it exactly as the previous owner. The PTC also fully supported the application of the Pedestrian Shopping District (P) regulations to Midtown. The four Commissioners who were able to participate in the issue unanimously recommended extension of the Charleston Center interim ordinance since there is one property owner and one property manager and the interim ordinance was specifically designed to respond to uses existing in the center currently. In Midtown, a central question for the Commission was whether, and how, to permit office uses on the ground floor. The interim ordinance allows offices through the conditional use permit process, with special findings. The Ground Floor Combining District Regulations automatically allow offices when certain vacancy rates occur. The PTC stated that for Midtown, a complete ban on ground floor offices is not desirable. The Commission believed that some creativity and flexibility was needed for the continued health of Midtown through changing economic conditions, and thdt a conditional use permit is the best available mechanism. The Commission was concerned that with such a relatively small area, approximately 121,000 square feet, a vacancy rate trigger could be manipulated to the detriment of Midtown. Thirteen people spoke at the PTC hearing. Of those 13, ten spoke in favor of regulations, which would limit office uses on the ground floor. Most of those ten favored the alternative approach for Midtown, which would be modeled after the existing ground floor regulations in parts of Downtown. Two of the speakers own buildings or represent building owners in the Midtown Shopping District that want to be exempt from any interim regulations. One speaker wanted a different approach to be used, which would address overall problems in the district including parking and circulation. After accepting public testimony and discussing the issues, the PTC recommended extension of the interim ordinances currently in place with the deletion of the definition of neighborhood serving uses. In.addition, the PTC recommended that all required public notices for projects within the Midtown Shopping District be sent to all property owners and occupants within 300 feet of the edge of the district boundaries and that the Neighborhood Association be included on all required noticing lists. Staff recommends that these requests become part of current procedures and practices, but not be included in the text of an ordinance (see Attachment E for verbatim minutes of the March 28, 2001 PTC meeting). CMR:203:01 Page 3 of 8 When reviewing the attached Planning and Transportation Commission report, the following points should be noted: o The notes from the business owner/property owner meetings referenced as "public" meetings were actually meetings where attendees were invited. Meetings referenced as being with Midtown Residents Association were really with representatives from many neighborhood associations. The reference on page 7 should read: "Continuation of the same non-conforming use. ’~ The word non-conforming in Item #3 on page 7 should actually be conforming. ATTACHMENTS: A.Proposed Ordinance for Charleston Center B.Proposed Ordinance for Midtown Shopping District C.March 28, 2001 Planning and Transportation Commission staff report D.Alternative approach for Midtown Shopping District E.Verbatim minutes of the March 28, 2001 Planning and Transportation Commission meeting PREPARED BY: Lisa Grote, Chief Planning Official DEPARTMENT HEAD REVIEW: G. EDWARD GAWF Director of Planning and Community Environment CITY MANAGER APPROVAL EMIL 3N Assistant City Manager CMR:203:01 Page 4 of 8 COURTESY COPIES: Steve Quadro, Piazza’s Fine Foods, 3962 Middlefield Road, Palo Alto, CA 94303 Fred Alami, Charleston Cleaners, 3900 Middlefield Road, Palo Alto, CA 94303 Rick Stem, Palo Alto Chamber of Commerce, 638 Middlefield Road, Palo Alto, CA 94302 Jerry Benton, Palo Alto Orthopedic Co., 3910 Middlefield Road, Palo Alto, CA 94303 Mark Sobin, Palo Alto Chamber of Commerce, 4274 Wilkie Way, Palo Alto, CA 94301 Hal Mickelson, P.O. Box 20062, Stanford, CA 94309 Matt Taylor, K, nowhere Store, 2741 Middlefield Road, Palo Alto, CA 94303 Russ White, Yolke Corp., 2741 Middlefield Road, Palo Alto, CA 94303 Mike Haley, 1579 Avalon Drive, Los Altos, CA 94222 David Lee, University Florist/Midtown Photo, 2717 Middlefield Road, Palo Alto, CA 94303 Sarah Tull, 711 Colorado Avenue, Palo Alto, CA 94303 Roger Kohler, 721 Colorado Avenue, Palo Alto, CA 94303 Babak Kahrobaie, Gate Cleaners, 2576 Middlefield Road, Palo Alto, CA 94303 Linda Jensen, WinterLodge, 3009 Middlefield Road, Palo Alto, CA 94303 Tony Carrasco, 120 Hamilton Avenue, Palo Alto, CA 94301 Sandy Destro, 2635 Middlefield Road, Palo Alto, CA 94306 Jeff Deaton, 2600 E1 Camino Real, #100, Palo Alto, CA 94306 Annette Ashton, 2747 Bryant Street, Palo Alto, CA 94306 Myllicent Hamilton 4014 Ben Lomond, Palo Alto, CA 94302 Charles G. Osborne, 255 Edlee Court, Palo Alto, CA 94306 Karen White, 146 Walter Hayes Drive, Palo Alto, CA 94306 Marge Speidel, 3059 Louis Road, Palo Alto, CA 94303 Cornelia Pendleton, University Art, 267 Hamilton Avenue, Palo Alto, CA 94301 Lynn Chiapella, 631 Colorado Avenue, Palo Alto, CA 94306 Brenda Ross, 1521 Escobita Avenue, Palo Alto, CA 94301 Ronna Devincenzi, 2600 E1 Camino Real #100, Palo Alto, CA 94306 Pria Graves, 2130 Yale Street, Palo Alto, CA 94301 Debbie Mytels, 2824 Louis Road, Palo Alto, CA 94303 Will Beckett, 4189 Baker Avenue, Palo Alto, CA 94306 Tracy Price, Price Design, 715 Colorado Avenue, Palo Alto, CA 94306 Darrell Benatar, Surprise.com, 719 Colorado Avenue, Palo Alto, CA 94303 Mike Cobb, Cobb Hogue Creative, 721 Colorado Avenue, Suite 103, Palo Alto, CA 94306 Kyle Sheridan, MD Expert.com, 721 Colorado Avenue, Suite 200, Palo Alto, CA 94306 Lincoln A. Brooks, Brooks & Raub, 721 Colorado Avenue, Suite 101, Palo Alto, CA 94303 Bob Drogavich, VITE, 721 Colorado Avenue Suite 202, Palo Alto, CA 94303 Tom Foy, Midtown Realty, 2775A Middlfield Road, Palo Alto, CA 94306 Brian Irvine, Slamm’n Juice, 2717 Middlefield Road, Palo Alto, CA 94306 Matthew Pangalos, Longs Store, 2701 Middlefield Road, Palo Alto, CA 94306 Wilson Nicholls, Midtown Video, 2655 Middlefield Road, Palo Alto, CA 94306 Kevin Kermanshahi, Palo Alto Caf~, 2675 Middlefield Road, Palo Alto, CA 94306 Gary Flickinger, United Studio of Self Defense-Karate, 2675B Middlefield Road, CMR:203:01 Page 5 of 8 Palo Alto, CA 94303 Larry Wells, Larry Wells Salon, 2685 Middlefield Road, Palo Alto, CA 94306 Victoria Emmons, Victoria Emmons Catering, 2699 Middlefield Road, Palo Alto, CA 94306 Victoria Emmons, Victoria Emmons Restaurant, 2695 Middlefield Road, Palo Alto, CA 94306 Wilson Nicholls, Baskins-Robbins, 2625 Middlefield Road, Palo Alto, CA 94306 Henry Buckholdt, Let’s Draw, 2635 Middlefield Road, Palo Alto, CA 94306 Pam Golden, Score Kaplan, 2645 Middlefield Road, Palo Alto, CA 94306 Duane Bay, Sr., Palo Alto Coop Market, 2605 Middlefield Road, Palo Alto, CA 94306 Siamak Badiee, Starbucks, 2775 Middlefield Road, Palo Alto, CA 94306 Mike Cobb, 721 Colorado Avenue, #101, Palo Alto, CA 94303 M J Fisher, Trustee, 3861 Corina Way, Palo Alto, CA 94303 Thomas & Patricia Foy, Midtown Realty, 2775 Middlefield Road, Palo Alto, CA 94306 Paul Drapkin, Trustee, Drapkin Realty Trust, 2741 Middlefield Road, Palo Alto, CA 94306 David H & Alice A. Lee, et al, 712 Holly Oak Drive, Palo Alto, CA 94303 Duca & Hanley Properties, Inc., 19312 Athos Place, Saratoga, CA 95070 Gertrude Haley Trust, c/o 156 Peacock Drive, San Rafael, CA 94901 Consumers Cooperative Society of Palo Alto, Inc., 2605 Middlefield Road, Palo Alto, CA 94306 Roxy Rapp, P O Box 1672, Palo Alto,.CA 94306 Betsy Kulemin, 170 Rollingwood Drive, San Rafael, CA 94901 Kathleen Haley, 1473 Dana Avenue, Palo Alto, CA 94301 Gregory M & Phyllis C Aiura, 689 Colorado Avenue, Palo Alto, CA 94306 T & T Kanazawa, 702/705 Colorado Avenue, Palo Alto, CA 94303 Round Table Pizza, .906 Golden Way, Los Altos, CA 94024 Southland Corp7-11#14315, PO Box 219077, Dallas, TX 75221 Bay Area Cellular Tel Co; 651 Gateway Blvd., S. San Francisco, CA 94080 Mrs. Betty Zeh, 720 Colorado Avenue, Palo Alto, CA 94303 Geoff Hicks, 722 Colorado Avenue, Palo Alto, CA 94303 Lincoln A. Brooks, Brooks & Raub, 721 Colorado Avenue, Palo Alto, CA 94303 Kyle Sheridan, MD Expert.com, 721 Colorado Avenue, Suite 200, Palo Alto, CA 94306 Philippe Masseron, 723 Colorado Avenue, Palo Alto, CA 94303 Elliot Brown, 724 Colorado Avenue, Palo Alto, CA 94303 Andrew Krend, 726 Colorado Avenue, Palo Alto, CA 94303 Tari Vickery, 727 Colorado Avenue, Palo Alto, CA 94303 Wan Ling Chen, P O Box 50281, Palo Alto, CA 94303 Bill Preucel, 728 Colorado Avenue, Palo Alto, CA 94303 Kevin V Lemley, 729 Colorado Avenue, Palo Alto, CA 94303 JeffHoel, 731 Colorado Avenue, Palo Alto, CA 94303 Geoff Provo, 733 Colorado Avenue, Palo Alto, CA 94303 David Lyons, PayTrust 5675, P O Box 880418, San Francisco, CA 94188-0418 CMR:203:01 Page 6 of 8 Mary Longo, 735 Colorado Avenue, Palo Alto, CA 94303 Jeff & Laurie Gamelsky, 737 Colorado Avenue, Palo Alto, CA 94303 Benjamin Diament, 738 Colorado Avenue, Palo Alto, CA 94303 Patricia Bottorff, 739 Colorado Avenue, Palo Alto, CA 94303 Susan K Kertson, 744 Colorado Avenue, Palo Alto, CA 94303 Brian Keefe and Jian H Zhou, 747 Colorado Avenue, Apt. C, Palo Alto, CA 94303 Generosa Stables, 747 Colorado Avenue, Apt. B, Palo Alto, CA 94303 Robert & Lenore Cavallero, University Investments, 2799 Middlefield Road, Palo Alto, CA 94306 Safeway (1682), P O Box 39, Sun Valley, CA 91353 A Touch of Home, P O Box 297, San Lorenzo, CA 94580 Mike Carey, CC Trust, 2782 Woodbark Court, CA San.Jose, CA 95117 Delia’s Cleaners, 2790 Middlefield Road, Palo Alto, CA 94306 Midtown Mart, 2796 Middlefield Road, Palo Alto, CA 94306 Cornish & Carey, 2762 Middlefield Road, Palo Alto, CA 94306 Midtown Beauty Shop, 2786 Middlefield Road, Palo Alto, CA 94306 Cornish & Carey, 2754 Middlefield Road, Palo Alto, CA 94306 Mark Kousnetz, c/o Wayne Mascia Assocs., 3945 Freedom Circle, Suite 350 Santa Clara, CA 95054 Murphy’s Pizza, 2710 Middlefield Road, Palo Alto, CA 94306 Best Video, 2710 Middlefield Road, Palo Alto, CA 94306 Peninsula Hardware, 2676 Middlefield Road, Palo Alto, CA 94306 Mike’s Caf6, Etc., 2680 Middlefield Road, Palo Alto, CA 94306 DJM Capital Partners, 2570 W E1 Camino Real, Apt. 500, Mountain View, CA 94040 Alhouse-Deaton Mgmt. & LSE, 2600 E1 Camino Real, Apt. 100, Palo Alto, CA 94306 Dr. Cynthia Dutro, 2635 Middlefield Road, Palo Alto, CA 94306 Dirk Bergstrom, 2620 Middlefield Road, Palo Alto, CA 94306 Washington Mutual, 2846 Middlefield Road, Palo Alto, CA 94306 Dieter L & Eva, 2720 Middlefield Road, Palo Alto, CA 94306 Edwards Company, 2778 Middlefield Road, Palo Alto, CA 94306 CW Carey & Parks, LP, 2846 Middlefield Road, Palo Alto, CA 94306 Meyer & Hannah Scher, 2688 Middlefield Road, Palo Alto, CA 94306 Gregory M & Phyllis C Hura, 869 Colorado Avenue, Palo Alto, CA 94306 Midtown Cleaners, 2740 Middlefield Road, Palo Alto, CA 94306 Midtown Retail Partners LP A CA LP, 3902 Middlefield Road, Palo Alto, CA 94303 Famille Chen Corporation, Neighborhood Liquor & Video, Charleston Shopping Center, 3918 Middlefield Road, Palo Alto, CA 94303 Sophia Omar, Caf6 Sophia Roasting Co., Charleston Shopping Center, 3904 Middlefield Road, Palo Alto, CA 94303 Deb Glerum, Serra Park Dental, Charleston Shopping Center, 3920 Middlefield Road, Palo Alto, CA 94303 Nancy Chan, PT RD, Back to Fitness, Charleston Shopping Center, 3906 Middlefield Road, Palo Alto, CA 94303 CMR:203:01 Page 7 of 8 Stephanie Spencer, Gymboree Play & Music Palo Alto, Charleston Shopping Center, 3908 Middlefield Road, Palo Alto, CA 94303 Laleh Jones, Laleh Hair Design, Charleston Shopping Center, 3942 Middlefield ¯ Road, Palo Alto, CA 94303 Greg/Ann, Rick’s Rather Rich Ice Cream, Charleston Shopping Center, 3946 Middlefield Road, Palo Alto, CA 94303 Tony Nicosia, Charleston Barber Shop, Charleston Shopping Center, 3966 Middlefield Road, Palo Alto, CA 94303 Jennifer Lee, Feng Yuan Restaurant, Charleston Shopping Center, 3950 Middlefield Road, Palo Alto, CA 94303 Amanda J Martin, State Farm Insurance, Charleston Shopping Center, 3968 Middlefield Road, Palo Alto, CA 94303 Tom Fehr, Feshback Bros., 2700 Middlefield Road, Palo Alto, CA 94303 Gregory & Phyllis Hiura, 689 Colorado Avenue, Palo Alto, CA 94303 Audrey Jacob, Thoits Bros., 245 Lytton Avenue, Suite 300, Palo Alto, CA 94301 D John Miller, 333 W. Santa Clara Street, #610, San Jose, CA 95113 CMR:203:01 Page 8 of 8 Attachment A (Italicized sections February 20, 2001. ) vary from Ordinance 4684 adopted ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO PRESERVING AND SUPPORTING NEIGHBORHOOD-SERVING USES IN THE NEIGHBORHOOD COMMERCIAL (CN) DISTRICT AT ,CHARLESTON CENTER (PORTIONS OF THE 3900 BLOCK OF MIDDLEFIELD ROAD) ON AN EXTENDED INTERIM BASIS PURSUANT TO GOVERNMENT.CODE SECTION 65858 BY AMENDING AND EXTENDING ORDINANCE NO. 4684 ADDING SECTION 18.41.035 TO THE PALO ALTO MUNICIPAL CODE TO TAKE EFFECT IMMEDIATELY on follows: The City Council of the City of Palo Alto does ordain as SECTION I.Findings.The Council finds and declares that: A.The Council held noticed public hearings on an interim measure to conserve and promote neighborhood.serving and retail uses in the Charleston Center on January 16, 2001 and February 20, 2001. It adopted interim Ordinance 4675 on an urgency basis on January 16, 2001 and modified and extended that ordinance by adopting interim Ordinance 4684 on February 20, 2001. The Planning and Transportation Commission held a noticed public hearing on the ordinance on March 28, 2001. The Council held an additional noticed public hearing on April 23, 2001. B.The Council hereby reaffirms and incorporates by reference findings A through G of Ordinance No. 4675 adopted January 16, 2001, which findings are attached hereto as Exhibit A. C.Based on the findings set forth in Exhibit A and the record before the Council, the Council finds that there is a current and immediate threat to the public health, safety or welfare if this ordinance limiting new non-neighborhood serving businesses -in the Charleston Center CN district is not extended pursuant to Government Code Section 65858 while the City completes its zoning ordinance update. If the interim ordinance is not extended additional non-neighborhood serving businesses and other uses may enter into long-term tenancies in the Center, limiting the ability of businesses to provide.needed neighborhood-serving retail stores and services to City residents. This displacement of retail and service uses imposes a hardship on local residents, particularly those with reduced mobility, increases already serious traffic congestion, exacerbates an already significant surplus of 010418 syn 0090823 1 jobs over housing, and leads to a decline in quality of life. Because existing retail and neighborhood-serving uses depend upon a concentration of such uses to maintain their own economic viability, continued loss of these uses would seriously jeopardize the entire shopping district. SECTION 2. Ordinance 4684 of the City of Palo Alto is .hereby extended and amended to read as follows: Section 18.41.035 of Chapter 18.41 of the Palo Alto Municipal Code is hereby added to read as follows: 18.41.035 Charleston Center Ground Floor Regulations. The regulations in this Section 18.41.035 apply to the ground floor of the Charleston Center as defined in section 18.41.030(k) and shown on Exhibit B attached."Ground floor" shall mean the first floor which is above grade. (a) Permitted Uses. Notwithstanding the provisions of Sections 18.41.030, 18.41.050 and 18.94.030(b), only the following uses shall be permitted without a conditional use permit: (I) Accessory facilities and uses customarily incidental to permitted uses; (2) (3) Animal care, but excluding boarding and kennels; Day care centers; (4) Eating and drinking services, except drive-in and take-out services; (5) Neighborhood-serving offices that do not exceed 2,500 square feet in floor area. "Neighborhood-serving offices" are medical offices, professional offices, travel agencies, and insurance agencies that meet the certification requirements of Section 18.41. 035 (d) below. (6)Personal services; (7)Retail services, excluding liquor stores; (8) Reverse vending machines, subject to regulations established by Chapter 18.88 of this code; (9)Neighborhood business services. 010418 syn 0090823 Uses lawfully existing on January 16, 2001 may be continued as non- conforming uses but may only be replaced with uses permitted or conditionally permitted under this section 18.41.035. (b) Conditionally Permitted Uses. The following uses may be conditionally allowed, subject to issuance of a conditional use permit in accord with Chapter 18.90: (i)Ambulance services; (2) Automobile service stations, subject to site and design review in accord with the provisions of Chapter 18.82; (3)Churches and religious institutions; (4)Convalescent facilities; (5)Financial services; (6)Mortuaries; (7)Neighborhood-serving offices over 2,500 square feet in total floor area. No such conditional use permit shall be granted unless the City makes the additional findings in Section 18.41.035(f). (8)Private clubs, lodges, or fraternal organizations; (9)Private educational facilities; (I0)Utility facilities essential to provision of utility services ~to the neighborhood, but excluding construction or storage yards, maintenance facilities, or corporation yards; (Ii) Liquor stores; (12) Temporary parking facilities, provided that such facilities shall remain no more than five years; (13) (14) (15) (16) (c Farmer’s markets; Commercial recreation; Outdoor recreation service; Recycling centers. Prohibited Uses. 010418 syn 0090823 3 (1)Residential uses of any nature. (2) Administrative office uses and general business office uses (except neighborhood-serving travelagencies and insurance agencies) other than those legally in existence at Charleston Center on January 16, 2001. (d) Certification of New Office Uses. Any office use first occupying space at the Center on or after January 16, 2001, shall obtain a written determination from the Director of Planning and Community Environment that its location and operation at Charleston Center is consistent with and contributes to the viability of Charleston Center as a Neighborhood .Center as that term is defined in the Comprehensive Plan of the City of Palo Alto. The applicant shall submit such information as the Director shall reasonably require in order to make the determination, and the Director shall issue the determination within 30 days of receiving a complete application. Failure to submit the required information shall be grounds for determining that a business may not operate at Charleston Center. (e) Center-wide Limit on Office Space. No more than 7,850 .square feet of total floor area at the Center shall be occupied by office space at any time. (f) Additional Conditional Use Permit Findings for Offices over 2,500 Square Feet. , Before approving a conditional use permit for neighborhood-serving offices larger than 2,500 square feet in total floor area, the City shall find that the proposed use will be conducted in a manner that will enhance and strengthen the Center as a Neighborhood Center as that term is defined in the Comprehensive Plan of the City of Palo Alto and that it will not diminish the retail strength of the Center. SECTION 3. CEQA Exemption. The Council .finds that this project is. exempt from the provisions of the Environmental Quality Act ("CEQA") because it can be seen with certainty that there is no possibility that this project will have a significant effect on the environment, and because-this ordinance falls within the exception to CEQA set forth in Section 15268 of the CEQA Guidelines. SECTION 4. Effective Date. This ordinance was passed bya four-fifths vote after a public hearing pursuant to Government Code Section 65858 and shall be effective immediately. SECTION 5. Expiration Date. This ordinance shall remain in effect until March 2, 2003 unless repealed or amended by the Council before that date: 010418 syn 0090823 SECTION 6. Independent Authority. This ordinance is adopted under the, Council’s authority under the Charter of the City of Palo Alto as well as pursuant to Government Code Section 65858. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney Mayor City Manager Director of Planning and Community Environment 010418 syn 0090823 5 EXHIBIT A The Council finds and declares that: A.The City of Palo Alto reaffirmed in its Comprehensive Plan a goal of fostering "an enhanced sense of Community with development designed tofoster public life and meet City-wide needs." (Goal L-2, adopted July 1.998). TO implement - that policy, the City adopted Policy L-10, "maintain a citywide structure of Residential Neighborhoods, Centers, and Employment Districts..." and Policy L-II, "promote increased compatibility, interdependence, and support between commercial and mixed use centers and the surrounding residential neighborhoods." B. Basic to the City’s land use pattern is t~e availability of shopping and services within walkihg distance of residential neighborhoods. (Goals L-3 and L-4.) The Comprehensive Plan identifies four Neighborhood Centers: small retail centers with a primary trade area limited to the immediately surrounding area; often anchored by a grocery or drug store and may include a variety of smaller retail shops and offices oriented toward the everyday needs of surrounding residents (Comprehensive Plan, p. L-18.) Neighborhood serving uses are those that contribute to a Neighborhood Center. C. The City .is experiencing an unprecedented sustained demand for office space from businesses which are not neighborhood- serving and instead primarily serve other businesses. The demand for office space comes, toa large extent, from the well-financed and often highly profitable businesses that typify the Silicon Valley. These enterprises are willing and able to pay high rents to locate within the City’s residential areas. As a result, buildings which had been used for neighborhood-serving uses have been removed from the retail space market and converted to office, "business to business" uses. This has led to a significant decrease in neighborhood-serving businesses in Neighborhood Centers. D.Charleston Center is a Neighborhood Center. It operates under the CN Neighborhood Commercial standards first adopted by the City. in 1978. While the zone was intended to accommodate uses of a moderate size serving the immediate neighborhood, it was not at that time necessary to exclude non- 010418 syn 0090823 6 neighborhood-serving uses in order to assure space for a variety of neighborhood-serving uses. It now is. E. The Center consists of two parcels under a single ownership. It is an important neighborhood and city resource, containing an anchoring supermarket and a mix of associated uses, most if not all of which are neighborhood-serving businesses. F. The Neighborhood Centers are relatively small. Charleston Center has approximately 50,000 square feet of built area and serves a large residential area. The City has a number of other commercial districts zoned for businesses that are not neighborhood-serving. G. In response to the Comprehensive Plan and citizens’ concerns about replacement of neighborhood-serving uses with offices that do not serve the neighborhood, and in some cases do not serve consumers at all, and as part of the comprehensive update of the zoning ordinance, the City’s Department of Planning and Community Environment is studying modification of CN standards to better implement the intent of the Comprehensive Plan .and the district itself. It is very likely that "neighborhood-serving" uses will be more fully defined and other uses limited in the CN District when the zoning ordinance update is completed. However, that comprehensive zoning ordinance update will not be completed within the next twelve months. 010418 syn 0090823 CN Distri’ct ,Charleston Center! [~cN zone .. Designatio.n ¯ CN District Chalelston Shopping Center (1993 build, ing f,ootprints). Attachment B (Italicized sections vary from those in Ordinance 4685 adopted on February 20, 2001. ) ORDINANCE NO. ORDINANCE OF THE COUNCILOF THE CITYOF PALO ALTO PRESERVING AND SUPPORTING GROUND-FLOOR NEIGHBORHOOD-SERVING USES IN THE NEIGHBORHOOD COMMERCIAL (CN) DISTRICT AT MIDTOWN SHOPPING DISTRICT (PORTIONS OF THE 2600, 2700 AND 2800 BLOCKS OF MIDDLEFIELD ROAD, 700 BLOCKS OF COLORADO AVENUE, MORENO AVENUE, AND SAN CARLOS COURT) ON AN EXTENDED INTERIM BASIS PURSUANT TO GOVERNMENTCODE SECTION 65858 BY AMENDING AND EXTENDING ORDINANCE NO.4685 ADDING SECTION 18.41.037 TO THE PALO ALTO MUNICIPAL CODE TO TAKE EFFECT IMMEDIATELY The City Council of the City of Palo Alto does’ ordain as follows: SECTION I. Findings. The Council finds and declares t~hat: A.The Council held noticed public hearings on an interim measure to conserve and promote retail and neighborhood- serving uses in the Midtown Shopping District on January 16, 2001 and February 20., 2001. It adopted interim Ordinance 4676 on an urgency basis on January 16, 2001 and modified and extended it by adopting Ordinance No. 4685 on February 20, 2001. The Planning and Transportation Commission held a noticed public hearing on March 28, 2001. The Council held an additional noticed public hearing on April 23, 2001. B.The Council hereby .reaffirms and incorporates by reference findings A through G of Ordinance No. 4676 adopted January 16, 2001, which findings are attached hereto as Exhibit A. C.Based on the findings set forth in Exhibit A and the record before the Council, the Council finds that there is a current and immediate threat to the public health, safety or welfare if the interim ordinance is not extended pursuant to Government Code Section 65858 limiting new non-neighborhood serving businesses in the Midtown CN district while the City completes its zoning ordinance update. If the interim ordinance is not extended, additional non-neighborhood serving businesses and other uses may enter into long-term tenancies in the Center, limiting the ability of businesses to provide needed neighborhood-serving retail stores and services to City residents. This displacement of retail and service uses imposes a hardship on local residents, particularly O10222 syn 0090824 1 those with reduced mobility, increases already serious traffic congestion, exacerbates an already significant surplus of jobs over. housing, and leads to a decline in quality of life.Because existing retail and. neighborhood-serving uses dependupon a concentration of such uses to maintain their owneconomic viability, continued loss of these uses would seriously jeopardize the entire shopping district. SECTION 2. Ordinance 4685 of the City of Palo Alto is ~hereby extended and amended to read as follows: Section 18.41.037 of Chapter 18~41 of the Palo Alto Municipal Code is hereby added to read as follows: 18.41.037 Midt0wn Shopping District Ground Floor Regulations. The regulations in this Section 18.41.037 apply to the ground floor of that part of the Midtown Shopping District as shown on Exhibit B attached."Ground floor" shall mean the first floor which is above, grade. (a)Permitted Uses. Notwithstanding the provisions of Sections 18.41.030, 18.41.050, and 18.94.030(b), only the following uses shall be permitted without a conditional use permit: (i) Accessory facilities and uses customarily incidental to permitted uses; (2)Animal care, but excluding boarding and kennels; (3)Day care centers; (4) Eating and drinking services, except drive-in and take-out services; (5)Personal services; (6)Retail services, excluding liquor Stores; (7) Reverse vending machines, subject to regulations established by Chapter 18.88 of this code; (8)Neighborhood business services. Uses lawfully existing on January 16, 2001 may be continued as non- conforming uses but may only be replaced with uses permitted or conditionally permitted under this Section 18.41.037-. 010222 syn 0090824 2 (b) Conditionally Permitted Uses. The following uses may be conditionally allowed subject to issuance of a conditional use permit in accordance with Chapter 18.90 and paragraph (e) of this Section 18.41.037: (i)Ambulance services; (2) Automobile service stations, subject to site and design review in accord with the provisions of Chapter 18.82; (3)Churches and religious institutions; (4)Convalescent facilities; (5)Financial services; (6)Mortuaries; (7)Medical offices not exceeding 2,500 square feet in area, professional offices, travel agencies, and insurance agencies. No conditional use permit shall be granted unless the City makes the additional findings in Section 18.41.037(e), (including the finding that the office is neighborhood serving). (8)Private clubs, lodges, or fraternal organizations; (9)Private educational facilities; (i0)Utility facilities essential to provision Of utility services to the neighborhood, but excluding construction or storage yards, maintenance facilities, or corporation yards; (ii) Liquor- stores; (12) Temporary parking facilities, provided that such facilities shall remain no more than five years; (13 (.14 (15 (16 (c) (1) Farmer’s markets; Commercial recreation; Outdoor recreation service; Recycling centers. Prohibited Uses. Residential uses of any nature. 3 010222 syn 0090824 (2)Administrative office uses and general business office uses (other than neighborhood-serving travel agengies and insurance agencies), other than those lawfully in existence on January 16, 2001. (d)Exception for Continuation of Practice or Business An existing ground floor office may be replaced with another office if (i) the new tenant or owner will continue the existing business or practice; or (ii) a conditional use permit is issued for the new office use. (e) Additional Conditional Use Finding for New Offices. No conditional use permit shall be issued for any new office use on the ground floor unless, in addition to the findings required by Chapter 18.90, the City finds that the proposed use will be conducted in a manner that will enhance and strengthen the Midtown Shopping District as a Neighborhood Center as that term is defined in the Comprehensive Plan of the City of Palo Alto and that it will not diminish the retail strength of the District. (f)Pedestrian Design Features Required. On any site or portion of a site adjoining a designated pedestrian sidewalk or pedestrian way, new construction and alterations to existing. structures shall provide, as determined by the architectural review board, the following features intended to .create pedestrian or shopper interest, to provide weather protection for pedestrians, and to preclude inappropriate or inharmonious building design and siting: (i) Display windows, or retail display areas; (2) Pedestrian arcades, recessed entryways , or covered recessed areas designed for pedestrian use with an area no less than the length of the adjoining frontage times 1.5 feet; (3) Landscaping or architectural design features intended to preclude blank walls or building faces. The specific nature and requirements of pedestrian design features shall be determined by the architectural review board under the standards of Chapter 16.48. The designated pedestrian sidewalks ¯ and pedestrian ways are shown on Exhibit C attached. (g)Exclusion of Certain Office Buildings. 711, 719 and 721 Colorado Avenue, and 689 Colorado Avenue, buildings not fronting on Middlefield Avenue, designed and used for office 010222 syn 0090824 purposes, and not well suited to other uses are exempt from the provisions of this Section 18.41.037. SECTION 3. The Council finds that this project is exempt from the provisions of .the Environmental Quality Act ("CEQA") because it can be seen with certainty that there is no possibility that this project will have a significant effect on the environment, and because this ordinance falls within the exception to CEQA set forth in Section 15268 of the CEQA Guidelines. SECTION 4. Effective Date. This ordinance was passed by a four-fifths vote after a public hearing pursuant to Government Code Section 65858 and shall be effective immediately. SECTION 5. Expiration Dat, e. This ordinance shall remain in effect until March 2, 2003 unless prior to that date it is repealed or modified by the City Council. SECTION 6. Independent Authority. This ordinance is adopted under the Council’s authority under the Charter of the City of Palo Alto as well as pursuant to Government Code Section 65858. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Senior Asst. City Atto[ney Mayor City Manager Director of Planning and Community Environment 010222 syn 0090824 5 EXHIBIT A A.The City of Palo Alto reaffirmed in its Comprehensive Plan .a goal of fostering "an enhanced sense of Community with development designed to foster public life and meet City wide needs." (Goal L-2, adopted July 1998). To implement that policy, the City adopted Policy L-10, "maintain a citywide structure of Residential Neighborhoods, Centers, and Employment Districts..." and Policy L-II, "promote increased compatibility, interdependence, and support between commercial and mixed use centers and the surrounding residential neighborhoods." Basic to the City’s land use pattern is the availability of shopping, and services within walking distance, of residential neighborhoods. (Goals L-3 and L-4.) The Comprehensive Plan identifies four Neighborhood Centers: small retail centers With a primary trade area limited to the immediately surrounding area; often anchored by a grocery or drug store and may include a variety of smaller retail shops and offices oriented toward the everyday needs of surrounding residents (Comprehensive Plan, p. L-18.) Neighborhood serving uses are those that contribute to a Neighborhood Center. C.Two of the Neighborhood Centers, Edgewood Plaza and Alma Plaza, are developed under site-specific PC Planned Community zonin~ regulati0ns~ However,. Midtown and Charleston Center operate under the CN Neighborhood Commercial standards first adopted by. the City in 1978. Both centers are valued neighborhood and city resources, .containing anchoring supermarkets and drug stores and a mix of associated neighborhood-serving businesses.. However, the CN district allows uses which are not neighborhood-serving in certain circumstances. Charleston Center is addressed in a separate ordinance. D.A "neighborhood-serving use" is one that primarily serves individual consumers and households, rather than other businesses;is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number 010222 syn 0090824 6 of customers and clients travel, instead of the provider travelling off site. E.The City is experiencing an unprecedented sustained demand for office space from businesses which are not neighborhood- serving and instead primarily serve other businesses. The demand for office space comes, to a significant extent, from the well- financed and often highly profitable businesses that typify the Silicon Valley. These concerns are willing and abl~ to pay high rents to locate within the Neighborhood Centers which are intended to serve the City’s residential areas. As a result, buildings which had been used for neighborhood-serving uses have been removed from the retail space market and converted to office or "business to business" uses. F.The Neighborhood Centers are small, and conversion of some of their ground floor commercial space to non-neighborhood serving uses not only removes valuable neighborhood serving uses but can adversely effect those that remain. Unless the CN standards are changed to protect neighborhood-serving uses in Midtown, they will be displaced by non-neighborhood serving uses. G.The City has zoned a significant portion of its land for non-neighborhood serving uses. It has substantially more jobs than housing, and use of CN district properties for non- neighborhood serving uses worsens this jobs/housing imbalance at the same time that it leads to loss of quality of life in the neighborhoods and increases in driving. H.In response to the Comprehensive Plan and citizens’ concerns about replacement of neighborhood-serving uses with offices that do not serve the neighborhood, and in some cases do not serve consumers at all, and as part of the comprehensive update of the zoning ordinance, the City’s Department of Planning and Community Environment is studying modification of CN standards to better implement the intent of the Comprehensive PSan. and the district itself. It is very likely that "neighborhood-serving" uses will be more fully defined and other uses limited in the CN District when the zoning ordinance update is completed. However, that comprehensive zoning ordinance update will not be completed within the next twelve months. O10222 syn 0090824 Exhi b Interim CN Combining Distridt at Midtown Shopping Center Interim CN Combining District Overlay Pedestrian Sidewalks and Pathways ! \// // / ’~" ~’Interimo ~ --. -.’a o -aCN Combining District Overlay o = ,,at Midtown Shopping Center _.9_ ~(1993 building footprints) Attachment C PLANNING DIVISION STAFF REPORT TO:PLANNING & TRANSPORTATION COMMISSION FROM: AGENDA DATE: SUBJECT: Lisa Grote, Chief Planning Official March 28, 2001 EXTENSION OF INTERIM ZONING REGULATIONS TO PRESERVE AND ENCOURAGE NEIGHBORHOOD SERVING USES IN GROUND FLOOR LOCATIONS IN THE NEIGHBORHOOD COMMERCIAL (CN) DISTRICT AT CHARLESTON CENTER (PORTIONS OF THE 3900 BLOCK OF MIDDLEFIELD ROAD) AND THE MIDTOWN SHOPPING DISTRICT (PORTIONS OF THE 600,2600, 2700, AND 2800 BLOCKS OF MIDDLEFIELD ROAD AND THE 700 BLOCK OF COLORADO AVENUE), AND ADDING THE PEDESTRIAN SHOPPING COMBINING DISTRICT (P) REGULATIONS (CHAPTER 18.47 OF THE PALO ALTO MUNICIPAL CODE) TO THE MIDTOWN SHOPPING DISTRICT. RECOMMENDATION: Staff recommends that the Planning and Transportation Commission (Commission) review and recommend to the City Council that the interim regulations for the Midtown Shopping District be modified and extended to limit office uses on the ground floor of the district (as defined in Exhibit A of Attachment A) and the interim regulations for the Charleston Center be extended with minor modifications to allow a limited amount of office use in the Center (as defined in Exhibit A of Attachment B). The modification staff recommends for both interim ordinances is to delete the definition of neighborhood-serving use. Both interim ordinances would be in effect until March 2, 2003. Staff also recommends that the Pedestrian Shopping Combining District (P) regulations (Chapter 18.47 of the Palo Alto Municipal Code) be adopted for the Midtown Shopping District. City of Palo Alto Page 1 BACKGROUND: On November 20,2000 the City Council directed staff to return on January 16, 2001 with a recommendation for an interim ordinance for the Midtown Shopping District and Charleston Center, which would restrict uses on the ground floor in each of the two areas. Council indicated that the retail base in both of these areas was threatened and that an interim solution should be found to address this problem. The interim solution would be in place until the zoning ordinance update is completed.and a permanent solution can be developed. Three business and property owner Outreach meetings were held for Midtown in December 2000, February and March 2001. A business and property owner meeting was held for Charleston Center in December 2000. The purpose of the meetings was to inform business and property owners that the City was considering changes to the zoning requirements in these areas such that new office uses would either be prohibited or significantly restricted on the ground floor. The meetings were also a forum for business and property owners to state their concerns regarding potential changes to the zoning requirements. Notes from all four of the meetings are attached to this staff report (see Attachments C, D, E and F). Staff also met twice with the Midtown Neighborhood Association. On January 16, 2001 the City Council approved interim regulations for both areas, which limited new office use on the ground floor. These interim regulations were reaffirmed on February 20, 2001 with modifications and with the direction from Council for staff to retum with an analysis of how the ground floor regulations that are currently in place in parts of the downtown could be adapted and applied to the Midtown Shopping District. This report presents the requested analysis and recommendations for the final versions of the interim regulations for both the Midtown Shopping District and Charleston Center. The interim regulations for both areas would be in place until March 2, 2003. DISCUSSION: Midtown Shopping District Currently, the Midtown Shopping District (as identified in attachment A) is approximately 121,047 square feet of built space. Of this space, the three largest buildings comprise 49,677 square feet or 41% of total leasable space available. Office rental rates are significantly higher than retail rental rates. Recent changes in the uses within the Shopping District have caused residents to feel the loss of retail uses. Within the past two years, the conversion of three key retail spaces has City of Pale Alto Page 2 added to the sense of urgency about the loss of neighborhood serving businesses. These three uses are: Harmony Bakery Scherba’s site (converted to Feshback Investments) Video Store (converted to University Investment Real Estate) 2750 Middlefield Road 2700 Middlefield Road 2799 Middlefield Road 1932 Square Feet 5000 Square Feet 1976 Square Feet Current Interim Ordinance for Midtown The interim ordinance that is currently in place in the Midtown Shopping District was intended to protect existing retail uses by making it more difficult to locate an office use on the ground floor than it had been under the standard Neighborhood Commercial (CN) zoning district. The primary elements of the interim regulations for Midtown include the following: !) 2) 3) 4) The need for a Conditional Use Permit (CUP) for any new office on the ground floor (with the exception of transfer of space in connection with the transfer of the existing business); The inclusion of a third finding for the CUP, in addition to the two findings in Chapter 18.90 of the Palo Alto Municipal Code (PAMC), which requires that the’ office use would be neighborhood serving, that it would be conducted in a.manner that would enhance and strengthen the Midtown Shopping District as a neighborhood resource and that it would not diminish the retail strength of the District; The inclusion of a definition of"Neighborhood Serving Use", which states that a neighborhood serving use is one that primarily serves individual consumers and households rather than businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood serving use is also one to which a significant number of customers and clients travel, including neighborhood residents, rather than the provider of the goods or services travelling off-site; The exemption of the following four addresses, which are offices not facing on Middlefield, from all of the interim regulations: 689, 711,719 and 721 Colorado Avenue. City of Palo Alto Page 3 The interim ordinance is intended to address the Comprehensive Plan language that designates theseareas as small retail centers with "a variety of smaller retail shops and offices which are oriented toward the everyday needs of surrounding residents." (Comp Plan p. L- 18). The interim ordinance is intended to acknowledge that to maintain a strong retail and personal service presence at the Midtown Shopping Center, property and business owners require a certain degree of flexibility in allowed uses so that their buildings and business can adapt to changing market conditions. See Attachment A for the complete current interim ordinance for the Midtown Shopping District. The modification staff is recommending to the interim ordinance for Midtown is to delete the definition of neighborhood serving use. The definition as written in the Ordinance is not complete and should be further developed as part of the Zoning Ordinance Update. Downtown Ground Floor Combining District Regulations As stated above, the City Council requested that staff retum with an analysis of the Ground Floor Regulations currently in place in portions of the downtown and with an analysis of how those regulations could be adapted for the Midtown Shopping District. In the two months that have passed since the adoption of the interim ordinance, staff has been able to complete that analysis. The Ground Floor regulations are outlined in Chapter 18.50 of the City of Palo Alto Municipal Code (PAMC) and basically limit the types of new uses that can locate on the ground floor. The essential elements of the ground floor restrictions in the downtown include the following: J o Limited new uses on the ground floor including: restaurants, hotels, personal services, retail services, theaters, travel agencies, entrances, lobbies or reception areas serving nonground floor uses; Allowance for 25% of the ground floor area to be in office or other permitted use in the Commercial Downtown (CD) district provided that the office use is not located on a street facing fagade; The possibility of a conditional use permit (CUP) for the following uses on the ground floor: business or trade schools; commercial recreation; day care; financial services, except drive in services; and general business service; The need for a third CUP finding, in addition to the two findings required in Chapter 18.90 of the PAMC, to approve a CUP, which states that the ground floor space of the existing building housing the proposed use creates exceptional or extraordinary City of Pale Alto Page 4 0 circumstances or conditions applicable to the property involved that do not apply generally to property in the same district; The right to an exception allowing office uses on the ground floor if the following two conditions are met: the initial application for the exception is made when the vacancy rate for ground floor properties within the GF combining district is five percent or greater; and the applicant can demonstrate that the ground floor space for which the application is being made has been vacant and available for occupancy six months or more at the time of the application; and A five-year time limit for the exception. Another section of the PAMC, specifically 18.49.040(b) allows existing nonconforming uses to remain or convert to another nonconforming use as long as the nonconforming use has not been discontinued for 12 months or longer. The existing ground floor restrictions ¯ were adopted in 1992 and have been very successful in the downtown area. The continuation of nonconforming use regulations were adopted in 1986. The City Council has asked staff to reconsider the existing liberal rules of replacement of nonconforming uses with other nonconforming uses as part of the evaluation of ground floor restrictions in the downtown area, which will most likely return to Council for review and action in summer 2001. See Attachment G for the complete GF restrictions. There are approximately 234 parcels in the downtown area that are subject to the ground floor restrictions (CD-C(GF)(P)). Of those parcels, 90 have retail uses on the ground floor, 64 have restaurants on the ground floor, 20 have personal services on the ground floor, 17 are used for surface level parking (primarily operated by the City of Palo Alto), 14 have office uses on the ground floor (either medical, professional or general business office), 11 are vacant, 9 have general business services on the ground floor, 5 have financial services on the ground floor, 2 are residential uses, 1 is a government office (the Development Center on Hamilton Avenue), and 1 is a theater. In addition, 29 of the 234 sites have entrances or lobby areas to access nonground floor uses above. There are no unpermitted uses on the ground floor in the area controlled by the ground floor restrictions. All of the space devoted to the 14 office uses and 5 financial uses was devoted to these uses at the time the ground floor regulations were adopted and all were permitted to remain in operation as nonconforming uses. The ground floor combining district regulations have been very effective at controlling, the loss of retail space in the downtown. Ground Floor Restrictions adapted for the Midtown Shopping District (see Attachment H for a complete draft ordinance) City of Palo Alto Page 5 Based on the success of the ground floor restrictions in the downtown, staff evaluated how those restrictions could be modified to fit the Midtown ShoppingDistrict. The intent of the changes would be to prohibit new office uses on the ground floor. The following element would need to be added to a new ground floor combining district or new zone for Midtown: Modify the allowed uses on the ground floor of the area defined as the Midtown Shopping District so that new office use of any kind would only be permitted above the ground floor. This change would mean that new office uses would be prohibited on the ground floor in the Midtown Shopping District and that office uses on the second floor would be limited in size in the same manner as they are currently. Using the GF restrictions in the downtown as a model, an exception process may be desired. A section could be added to a new zone, which would provide that: Application may be made to the director of planning and community environment for an exception to the otherwise permitted or conditionally permitted ground floor uses, to allow a use otherwise permitted in the district, if the following conditions are met: a.The initial application for the exception is made when the vacancy rate for ground floor properties within the Midtown Shopping District is five percent or greater. b.The applicant can demonstrate that the ground floor space for which the application is being made has been vacant and available for occupancy six months or more at the time of the application for an exception. c. If the five percent vacancy rate for the Midtown Shopping District is created by the vacancy of only one building, then that building shall be vacant for a period of twelve months or more before an application for an exception can be made. d.Any exception shall be for a specific use, and shall be effective for five years or less time if requested by the applicant. No more than one exception may be granted on a parcel. The Downtown GF "exception" process, does not have a public hearing process, apparently because once the basic facts are established, the Director has no discretion to deny the request. Instead, this is a ministerial act like issuing a building permit. Staff recommends that this same informal process be used in the Midtown Shopping District unless the Council concludes that there should be some discretion in issuing these exceptions. Midtown is a much smaller district than downtown, with far fewer owners and spaces, and the downtown formula may not be as successful in Midtown, where a small number of vacancies can create the circumstances under which an exception must be granted. The City Council may want to consider incorporating a use permit public hearing and findings into the process for granting an exception. Requiring a CUP for an exception would insure that property owners and City of Palo Alto Page 6 occupants within 300 feet of a site would be notified and could comment on exception requests. While the above restrictions a- d address the conversion of permitted uses to office uses, they do not address the continuance of existing office or financial uses or the replacement of existing businesses with new nonconforming uses. To encourage faster replacement of nonconforming uses with conforming uses, a section would need to be added to a new zone, to provide that: An existing nonconforming business could continue to operate, (though its expansion would be prohibited by existing CN regulations). °If an existing business or practice was transferred to a new owner altogether, the new enterprise could continue as a nonconforming use, even if under a new name. In all other cases, when an existing nonconforming business vacated a space, the new use would have to be a nonconforming use. These new restrictions would ensure that as nonconforming businesses and professional practices vacate a site or building conforming uses would take their place. See Attachment H for the complete draft of such a new zone for Midtown. Pedestrian Shopping Combining District Regulations (P) for Midtown An associated concern with the conversion of one use to another is that now when a building is upgraded or remodeled it does not have to be designed with a pedestrian orientation. Applying the Pedestrian Shopping Combining District (P) regulations to Midtown Shopping district would insure that all remodels and new buildings regardless of the use would be designed to include pedestrian features. These features include: ° ° Display windows or retail display area; Pedestrian arcades, recessed entryways or covered recessed areas designed for pedestrian use; Landscaping or architectural design features intended to preclude bland walls or building faces; and Restricted parking and vehicular access so that sidewalks or pedestrian-ways shall be minimally disrupted. See Attachment I for the complete P regulations. City of Palo Alto Page 7 These pedestrian .features would be subject to review by staff and the Architectural Review Board (ARB) and would need to meet the ARB standards for review prior to approval by the Director of Planning and Community Environment or his/her designee. Staff recommends that these regulations be adopted for Midtown whether the current interim use regulations are extended or alternative interim regulations are adopted. Current Interim Regulation’s for Charleston Center The current interim regulations for Charleston Center are intended to acknowledge the existing office uses in the Center and the fact that these uses have contributed to the economic vitality of the Center over time. The primary elements of the current interim regulations for Charleston Center are: A maximum of 7,850 square feet of ground floor office use allowed for the entire Center. A maximum of 2,500 square feet allowed for each individual office use. Allows only "neighborhood serving" office uses, which include medical offices, professional offices, travel agencies and insurance agencies. Includes a definition of neighborhood serving use identical to that in the current interim regulations for Midtown. Includes a certification process for those office uses that do not require a CUP stating that the Director of Planning and Community Environment must certify in writing that the proposed ground floor office use meets the requirements of the Center and is a neighborhood serving office use. ¯ Includes the possibility of a CUP for an individual office use that exceeds 2,500 square feet if the total office square footage in the Center would not exceed 7,850 and a third CUP finding can be made. Includes the third CUP finding identical to that included in the current interim regulations for Midtown. Charleston Center is fundamentally different than the Midtown Shopping District in that it is owned and managed by one property owner who can easily monitor the amount and type of office use in the Center. For that basic reason, in addition to the fact that the existing office uses have been in the Center for a long period of time and have contributed to the vitality of the Center, staff is recommending that the current interim regulations for the Center remain in. place with one minor modification. That modification would be to delete the definition of neighborhood serving use. That deletion would be for the same reasons as stated above for the Midtown District and would allow staff and the community at large to discuss a possible definition as part of the overall Zoning Ordinance update. City of Palo Alto Page 8 See Attachment B for the cpmplete interim regulations for Charleston Center. Comparison amongst the possible approaches Attachment J presents a table, which compares the basic differences in allowed uses amongst the standard CN zone, the current interim regulations for Charleston Center and Midtown and the possible modified ground floor restrictions for Midtown. RESOURCE IMPACT: Existing Planning Division staff has been reassigned to develop proposed PAMC changes regarding the Midtown Shopping District and Charleston Center. The same staff will be assigned to continue the evaluation needed along E1 Camino Real, Downtown and California Avenue. As estimated in the November 20,2000 City Manager’s Report, the total number of hours required to complete the assignment will be approximately 225 hours. Approximately 25 to 30 hours per year will be required to monitor the square footage of office use in Charleston Center. A baseline will need to be established and then monitored annually to ensure that the maximum office square footage is not exceeded. The Economic Resources Planning staff will coordinate the monitoring with assistance from Planning Division staff. Another 25 to 30 hours per year will also be required to monitor the uses in the Midtown district. A baseline of existing uses will need to be established in the area and then an annual survey would be conducted to identify changes that have been made and whether or not ordinance provisions have been violated. This monitoring effort would be greatly assisted by the establishment of a business license or business registry within Palo Alto. The monitoring could then occur prior to uses actually changing and would help prevent the need for code enforcement action if uses change in violation of the ordinance. Approximately 50 to 60 hours total would be required each year to monitor both areas. The Economic Resources Planning staff would be responsible for the monitoring and would be assisted by the Planning Division staff. POLICY IMPLICATIONS: There are many policies in the Comprehensive Plan that support strengthening and enhancing Palo Alto’s neighborhoods and shopping centers. These include: Policy L-4, Program L-6, Program L-9, Policy L-11, Policy L-20, Policy L-37, Program L-36, Policy L- 40 and Policies B-4 through B-7. City of Palo Alto Page 9 ALTERNATIVES: The alternatives for the Planning and Transportation Commission to consider include: Recommend approval of the modified interim regulations as outlined in the Recommendation and Discussion section of this staff report; Recommend approval of the current interim regulations without modifications for both Midtown and Charleston Center; Recommend modifications to the interim regulations for Midtown, which would adopt Ground Floor restrictions specifically for Midtown; Recommend that the two areas revert back to standard CN zoning. ENVIRONMENTAL REVIEW: Exempt from the provisions of the Califomia Environmental Quality Act (CEQA), per section 15061(3) of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the project will have a significant effect on the environment. NEXT STEPS: City Council Hearing scheduled for April 23, 2001. The City Council must take action on the interim regulations, by April 30, 2001 or the regulations will become invalid and the two areas will revert back to standard CN zoning regulations. ATTACHMENTS: Attachment A:Current Interim Regulations for the Midtown Shopping District Attachment B:Current Interim Regulations for Charleston Center Attachment C:Notes from December 14 Midtown Meeting Attachment D:Notes from December 13 Charleston Center Meeting Attachment E:Notes from February 15 Midtown Meeting Attachment F:Notes from March 1 Midtown Meeting Attachment G:Ground Floor Regulations (18.50 of the PAMC) Attachment H:Possible Ground Floor Regulations Adapted for the Midtown Shopping District Attachment I:Pedestrian Shopping Combining District (18.47 of the PAMC) Attachment J:Table Comparing uses allowed in Standard CN zone with uses allowed under the current interim regulations and proposed ground floor interim regulations Please Note: Attachments A, B City of Pale Alto and H are included as part of the Page 10 whole City Manager’s Report. MIDTOWN NEIGBORHOOD RETAIL MEETING Mitchell Park Community Center, Main Room December 14, 2000 Attachment C Comments and Questions raised by participants: How to deal with buildings not designed for retail? Reversion vs. prospective changes. burden if reversion is treated the same as prospective changes How to define "neighborhood serving use"? how different from ’-personal service’/"neighborhood business service"? Should businesses facing major streets (Middlefield) be limited to retail but others not? How to understand what "neighborhood serving" means in this era? Relationship between office/retail in same center needs to be taken into account. "Office uses provide significant support for retail in Midtown". Market forces vs. regulation. Things are changing and regulation can’t anticipate what may come in 5 years. "Midtown will attract what it wants to support." "Would we consider leaving well enough alone?" How many complaints? From whom? Get dialogue going re what is truly wrong with new uses vs. old ones. What do people really mean by neighborhood serving? Avoid a standoffbetween business/residents. Charleston Neiqborhood Retail Meetin_~ December 13, 2000 Cubberley Community Center, Room A-2 Notes: Attachment D Current uses include about 85% retail, 15% services or office uses Issues in CN zones overall: ¯Retail being displaced ¯Lack of goods/services for nearby residents ¯Retail not growing ¯Should office be prohibited or should a use permit be required for offices? ¯Need definitions for: -office use -personal services -retail uses Need to address a change of ownership -state farm, as example can continue if lease remains -use permit guidelines/criteria -could consider a vacancy rate exception to allownew uses, but that gets complicated Is retail threatened? retail not growing due to cost/rent All centers have "non-retail" space. Charleston typical of centers with some non-retail space. Some office square-foot should be allowed. Would elimination of office be detrimental? Yes, if no offices were allowed. Most ’CN’ zoned centers are one-story. Two stories are allowed. Parking key retail issue .- quota/percentage a possibility for Charleston. Midtown Meeting - February 15~ 2001 1:00 PM Mitchell Park Community Center - Room 1 Attachment E Susan Arpan, Economic Resources Manager, welcomed members of the public and provided comments on the purpose of this meeting to the public in attendance. Members of the public were asked to introduce themselves. Ms. Arpan provided a briefing on why these meetings are taking place and what the City Council had directed staff to do which was to talk about the ordinance that was proposed on January 16, changes that were made at this meeting and other City Council directions that were received. Ms. Arpan also indicated that staff would like to receive additional input from the business and property owners present and what they would like to see addressed. Staff will in turn provide this information to the City Council. She had also mentioned the proposal ~hat will be brought forward on February 20 and that would be to talk about a proposed interim ordinance for Midtown. There were ~ve basic components of that ordinance. 1) Ground floor restrictions were proposed for the entire area; 2) The main street would be treated differently than the side streets which are Colorado, Morena, and Bryson; the use on the main. street if they wanted to change from a neighborhood serving office use would be required to obtain a Conditional Use Permit (COP); 3) Only neighborhood serving offices would be considered as part of the use permit process and these include professional medical, which includes dental, insurance agencies and travel agencies. Professional uses which included law, advertising, architecture, design, engineering, accounting and other similar profession. 4) General business uses would not be allowed with the exception of insurance and travel agencies. New administrative offices would not be allowed at all and the side streets were included at the time. Any non-office use on the side streets that wanted to change would be required to obtain a CUP. 5) Any office use on the side streets that are existing at the time of the ordinance on January 16, that wanted to remain in the same type of office use or convert to another type of neighborhood serving type of office use could do so without a CUP. She also mentioned some changes that were made at the time of the ordinances that were proposed for the Midtown area. The first change was that the office buildings at 711, 719 and 721 Colorado Avenue would be excluded as well as the medical/dental building at 689 Colorado from the ground floor office restrictions. The reason behind this is that they were designed for office use and has always been office use and that they were not good retail spaces. The second change was that all existing ground floor non-office uses in the district would be treated the same requiring CUP for conversion to office. All existing ground floor office would be grandfathered uses until a change in tenant or usage. Ms. Arpan stated that staff was directed to provide a review of ground floor restrictions that currently applied to a portion of Downtown. Staff will review the impact of the restrictions and how we propose to do that in the Midtown area and compare that to how the Ordinance is as it stands. Ms. Arpan also indicated that on February 20, staff would recommend to Council to extend the Interim Ordinance an additional 22 months and 15 days. This would expire on April 30 should Council not take any action. The interim regulations need to comply with the law. Ed Gawf, Planning Director explained that the Interim ordinance would expire in 45 days from January 16 on March 2. At the City Council meeting, which is on February 20, staff recommends changing the Ordinance to reflect Council’s changes. In order to incorporate these changes, there will not be enough time to meet the February 20 meeting, therefore, staff is asking Council to extend the regulations to April 30 with staff.returning to Council on April 9. The regulations will then expire should Council not take any action. Members of the public that were present indicated that they were confused with the dates and extensions and expiration of the interim regulations to the restrictions. They had asked for clarification with regards to what will take place at the February 20 meeting versus the April 30 date and what is meant by the 22 months and 15 days extension. Mr. Gawfprovided detailed explanation as to how the Ordinance is presently in existence and what had taken place at the Council meeting on January 16. State law allows interim ordinances, which requi.res a 4/5 vote of the Council to approve it. It indicates that you can adopt an ordinance for 45 days and within that 45 days, if you so wish, you can extend it to a total of 24 months or an additional 22 and a half months. This is in the State procedure. A member of the public had asked what or who made up the 45 days and when did it take place and Mr. Gawf explained that the adoption took place on January 16 and that on February 20, Council may extend it for a period of time. The 45-day timeframe is a legal issue. On April 9, Council will take a more in depth look at the Ordinance. A question was raised on the Feb.20 meeting that should 2 or more Council members vote against this Ordinance, that it would no longer exist. Mr. Gawf indicated that this is so. Mr. Cobb and Mr. Haley indicated that with all the decisions and discussions that are taking place, no one has seen the ordinance that is in effect nor were they able to make comments based on a document that they had not seen. Most of them said that they did not receive the ordinance prior to the decision making on January 16 and no materials were provided at the meeting. Mr. Gawf indicated that prior to the next meeting all attendees would receive a copy of the ordinance. From a question posed by Mr. Haley, Ms. Arpan provided a brief synopsis of what started the whole proceeding for the interim ordinance and explained that it was a Council direction to City staff to come back with recommendations and comments on the loss of retail in the Midtown, Charleston area. Mr. Gawf explained parts of the ~ontents of the Ordinance to the attendees. Staff is trying to make it work. Some issues were raised at the Council meeting especially the concept of neighborhood serving. Mr. Gawfproceeded to explain to the attendees what the interim ordinance applies to with regards to ground floor restrictions, what you can and can’t do with the ground floor space during the interim ordinance and what the CUP process involves. Mr. White asked on expansion issues. What if you want to expand? Mr. Gawf indicated that if any support or ancillary office is intended, they can stay as office use and do not require any permit process and if it’s a retail use, they can expand. Any office use that is on the ground floor needs a CUP. If it is an existing office use that wants to sublease to an office use, this question needs to be researched but would probably need a CUP because its considered as a new use. For example, if a dental office use moves out and the space becomes a law office, a CUP is required. A question was raised that if presently a florist/juice/photo retail store is existing, can a medical office come in and remain as retail? Ms. Arpan indicated that this is what the Council had asked the staff to research on the ground floor retail overlay as it exist in the Downtown because they had concerns as to how a medical office can move in and be determined as retail because of the way we define neighborhood serving office use. Mr. Haley indicated that because of this there are a lot of inconsistencies and who should make that judgement on what should be allowed. He also indicated that five years from now he can come in with a medical office client with frosted windows and what is to prohibit him from putting a medical building in that area but have no appearance to the outside as a medical building? Mr. Gawf indicated that judgement need to be made on what can be used on the ground floor. Any medical office use is allowed up to 2500 sq.ft, with a CLIP. The concept is that ground floor uses are smaller in scale and therefore emphasize preserving existing retail uses and allowing office use through a CUP. Mr. Haley indicated that what he felt that what is triggering this is a small business, Harmony Bakery. The predominant use in Midtown is retail, he said, so what is the problem here? Mr. Cobb asked whether professional buildings are excluded from this Council action? One issue is that the idea of neighborhood serving professional office is very few. That definition should be neighborhood serving, which is flawed in itself and impossible to apply. Ms. Arpan indicated that neighborhood serving office definition came about to address changes in the economy. We could have the same vacancies that we had a long time ago. With all good intentions, staff did take a look at what other ways to look at those ancillary uses that fit well in the neighborhood serving district. We are however starting to back off from that definition because it is so cumbersome and could have some unintended consequences. Mr. White asked about the parking requirements to meet the 2500 square foot after the existing retail leaves. Mr. Gawf indicated that a developer can put in one or 2 retail offices but the parking is by square footage and not by use. Mr. White asked that whether that is enough and whether it makes a differenc~ on what people can do with that space if the area cannot support a change of use. Mr. Gawf indicated that multiple uses can go into that space and it does not necessarily incur more traffic. ITE calculations indicate that the parking and traffic management is based on the square footage. Mr. Joel asked why is the new property owner stuck with the retail use when Harmony Bakery was built originally for a bank? He thinks that the new owner should be provided with a pass in this case. Mr. Kousnetz, the new owner, stated that he is a first time property owner. He said the Midtown Residents Association is a very vocal very loyal group of individuals to the retail groups but he purchased this building based on the office performance then he read about this retail restriction. He has marketed buildings for 18 years and he has received 2 retail requests but every month of this extension is a huge financial burden to himself and his family. Mr. Cobb stated that big developers can stay and play in the game but smaller investors get squashed and it is not fair. Protect downtown retail but if the existing use wants to convert, have simple guidelines to be applied in a discretionary manner. It is the complex language that makes it tough. Mr. Joel stated that he believes in free market. There were obviously reservations at the Jan. 16 Council meeting. Why the emergency ordinance? Please convey at the Feb. 20 meeting, no materials were provided, no unanimity for overlay, there is a big difference between Midtown and Charleston. University and Midtown are as different as night and day. Who is it that is actually for this overlay? Mr. Gawf indicated that there are people who supports the Ordinance and that there will be people at the Feb. 20 meeting who will support this. Staff is soliciting comments and thoughts from the property owners to forward to Council. The recommendation that was provided from the attendees was that the Interim Ordinance is a bad idea. Mr. Gawf stated that City Council mandated staff to take a look at this. This is a fairly common regulation to have. Mr. Haley indicated that they Will stand up and oppose this. There was a 40% vacancy factor in Midtown five years ago. When you take all the square footage into consideration there were 13,000 space available. One thing that needs to be done is to have a historical perspective - document the past and suggest that the present situation is OK. Unfortunately this one building is being used as the example of the way the situation looks. Everyone else is on a long-term lease, who else does it effect? Ms. Jacobs cautioned on existing office use on what the ordinance says on subleasing to office use. What is the permitted use long term. Mr. Kousnetz indicated that in 1973 the space was built for North California Savings and Loan and in 1994 Harmony Bakery came in but by 1999 it was faltering. It closed because they were evicted and Sherba’s went bankrupt. The Midtown Residents Association is great but these opposing views need robe known. Dictating the use is one thing but changing people’s outlook is another. .Mr. Gawf indicated that the Midtown Business Association is not very strong. They tried to get visual improvements in the area and better parking but it did not happen. There was a group but not very effective. Mr. Joel stated that back when there was an ebb in the Midtown area and people were thrilled because this acted as a catalyst to get the dollars into the area. Before April 9, some economic study on retail use in these modern times, need to be done. Buying things can be done via computers, etc. you can get cheaper items in other cities, what is missing on retail use in the area? Why do we buy things i,n the area? Ms. Jacobs asked that if office use is restricted what would be considered permitted use for office? Ms. Arpan indicated that a study was done on all the retail areas and will share the information on this study. Mr. Cobb stated that that report was not made part of the Council report. How many people are raising this issue. Saving the gas station and the store required thousands of signatures but how many came forward regarding this restriction. Ms. Arpan indi.cated that staff have received emails, phone calls and letters regarding this issue. City Council has responded to this numerous concerns and directed sta.ff to look into this. Mr. Gawf indicated that there would be another follow up meeting on March 1 to receive comments and recommendations upon receiving the Ordinance. Midtown Meeting - March 1~ 2001 1:00 PM Mitchell Park community Center - Room I Attachment F Attendees:Lisa Grote, Susan Arpan, Mirella Leong, Zariah Betten, and Councilmember Bern Beecham, Members oft he Public Lisa Grote, Chief Planning Official, provided opening remarks regarding the Interim Ordinance. The ordinance is different than the original that was discussed on January 16. The major change however, is that as a result of those exemptions, there is no longer a difference between a building that fronts on Middlefield with a building, that fronts on Colorado or Bryson or Moreno. If you want to convert from retail office, you are required to obtain a conditional use permit and with that CLIP there is a third and new finding where the office use not be detriment to the retail nature of the retail area. Mr. Kousnetz asked whether he could apply for a CLIP with regards to his situation and indicated that his whole application will be weighed and decided upon by just one person. " Ms. Grote indicated that he couldapply for a CUP but that he must state his case and the association that the specific use be not detriment to the area. His application would seem to be the first test case but the fimeline would be that it w.ould go to the Director’s Hearing and that the decision will be made at this hearing which can be appealed to the Planning.Commission and then to City Council. A project planner will be assigned to the application and will make the necessary recommendations whereby the Current Planning Manager will then make the decision based on all findings. Mr. Kousnetz inquired as to the duration of this process and Ms. Grote indicated that it would take about 2~ 1/2 months, which would include the noticing, review of the application as well as the hearing itself. Should there be an appeal to the decision made, it would take about 3 to 4 months to process the appeal. Mr. Kousnetz stated that if it took about 6 to 7 months for the application process, the tenant would have to wait during that duration. Ms. Grote indicated that there have been cases where applicants have placed contingencies on their options to a CLIP to leave. If the CUP is successful then the space will be leased but if it’s not, they don’t lease it out. Mr. Kousnetz indicated that this option is not significant because it’s hard on the owner but Ms. Grote stated that prospective tenants have entered into these lease agreements with property owners in full knowledge of the process and they have complied in the past. This has happened in the CS and CN zones on E1 Camino, other neighborhood centers and commercial areas Citywide. A member of the public indicated that this prospective landlord would not want to wait 6 to 7 months. They cannot afford to wait that long. What retail use is not available in the Midtown/Charleston area that we would like to see? The intent was to protect retail use and so the fact that it’s very difficult to pursue a CUP is not contrary to the Ordinance. The intent of the ordinance is to make it more attractive and better for retail uses and harder for office use in neighborhood business districts. One speaker indicated that the Midtown area is all retail and the existing commercial uses are grandfathered in except for the Co-Op. Virtually all are retail users. One or more persons can get hurt in this process. Ms. Grote indicated that the old Ordinance would allow you to have 5,000 sq.ft, of office outright. You get up to 5000 sq.ft, and you get 25% of your overall site and office use but a minimum of 2500 sq.fl, and this has always, been the case. There weren’t any additional restrictions on your office capabilities but is more restricted now under the interim ordinance. One side of this discussion is saying that its not strict enough that even allowing a CLIP is-too ambiguous, too open and too lenient. Applicants need to provide documentation as part of the project description and application and relationship to other retail uses, showing neighborhood serving. This is not easy but can be done. The applicant needs to make this case. Another public speaker reiterated the fact that only one man would be making this decision (Zoning Administrator) but Ms. Grote did indicate that this decision is based on public input, staff recommendations, applicant’s presentation for any Variances/HIEs/CUPs and is doing so presently and has not changed. Councilmember Beecham was asked whether this is suitable to the Council that one man makes this decision. He indicated that he was not here to make any clarification but to find out the comments and opinions of attendees at this meeting. He wanted to know the process that is in place and whether it is adequate. He also indicated that Mr. Kousnetz had made an impact with the Councilmembers. Ms. Grote also indicated that staff will take into consideration and factor in all concerns and comments from property owners and business owners about outright prohibition on office use on the ground floor. In addition, options are being explored to provide a relief valve or the possibility of a CUP. This would allow some opportunity to make a case that this particular office could be neighborhood serving and an asset to the neighborhood center. This was a big part of the reason why a CUP was included in the overall process. Mr. Kousnetz indicated that with all that time spent on the process just to go before a hearing only to perhaps have it appealed and to go through yet another process and incurring more time is way too much of a risk and energy to take for just an office use of 2200 square feet. Councilmember Beecham indicated that the CUP is not just waiting 6-1/2 months, the number of months is the uncertainty of whether or not you will be able to go ahead in that length of time. Mr. Kousnetz indicated that in reality, you are asking to freeze the market for that length of time and its not going to happen. Ms. Grote provided examples of when an application has applied for a CUP and was granted, like Manpower Services on E1 Camino Real. There was a possibility of an appeal but it did not take place after the applicant and other tenants and neighbors met and worked among themselves on some changes. There was another application, which was a former church, which had their application denied and the applicant appealed but withdrew it since their chances were slim that it would be approved. Mr. Kousnetz indicated that there is a big difference between the examples provided and where his situation is with 2700 Middlefield Road. Ms. Grote indicated that it would only be a harder case to make and to be specific with its use. Its difficult to say without looking at the merit and specifics of the proposal what decision will be made. Mr. Kousnetz asked for some direction about how he should proceed and Ms. Grote indicated some other options. For example if there is prohibition on the ground floor, a relief valve for 6 months of vacancy and a local 5% vacancy, exception for an office use for a limited . period of time but no renewal and thls implies that after five years your office use needs to be changed. Ms. Grote also indicated that some parties may indicate that this is too lenient to leave a space vacant for such a time but we need to point this out to Council that this may not protect retail if that is the true intent. In the Downtown area, you do have a 6 month vacancy rate but also an overall vacancy in that area, about 5%. Ms. Grote also indicated the options that are being prepared for the April 9 are: To retain ’the Interim Ordinance as written. To modify it so that its more like the ground floor retail restriction in the Downtown area which talks, about the overall vacancy rate rather than site specific vacancy. To have a modification of that which would take out the overall vacancy rate and just looks at site-specific vacancies or revert back to the CN zone. Ms. Arpan stated that she had made some calculations on the total square footage of retail which is 121,000 square feet so about 6,000 square feet overall is vacant. Residents were concerned when these retail spaces which represents 12% of the vacated space started disappearing. A speaker indicated that it was important to go back in history and look at the situation then. Ordinances cannot dictate uses of property. It was the marketplace that dictated the changes before certain retail stores came in. Longtime leasees who have not converted are unlimited with no requirement in the Ordinance that the neighborhood supports in the Center. No reciprocity in there. No support for the stores at all. The market should make these determinations. It was financial difficulties that forced some of the retail uses out and where was the information on this? Ms. Grote stated that zoning determines the specific types of uses in the area and does not get down to the level of who that user is. The Zoning does not get into the detail but more general use. It does not talk about the type of a grocery store rather than what is in that .space. Whatever use is allowed as long as it’s generally compatible and does not cause a detriment to the neighborhood. This Ordinance does not control the market. Staff is considering the neighborhood serving definition because there is no continuing support for it. Although this will not solve the problem, this will be recommended to Council. The Zoning Ordinance Update is in the process of being prepared whereby this portion as a whole will be discussed and will resurface for all to be involved which will also apply to commercial businesses. Ms. Arpan indicated that if the Coop was to close that will be another 15% and that would add to the loss. Ms. Grote stated that the language of "current and immediate threat" does apply due to our Comp. Plan goals which talk about the value of neighborhood centers and immediate welfare to the area which can subtlely change. CC Beecham also stated that the threat of losing retail use is not necessarily specific. The City Council is uncomfortable to do emergency ordinances but this loss of space warranted the issuance of the emergency ordinance but on April 9 they will look into it in more detail. Ms. Grote indicated that financial institutions are not strictly considered office use. The building did convert to retail use and that is the type of use that is being promoted in that area. Those buildings that have not converted and never have been retail need a CUP. Non-retail, non-personal service and some had extensive interior remodeling done to them and turned into an office but never retail. One speaker indicated that there has not been a commercial user that had approached them and that all have been retail users. There is a sense of what the neighborhood wants in terms of retail mix and that there have been no tenants moving out and having to go into the commercial mode. He stated that this ordinance is not necessary. Ms. Grote indicated that there are other instances that could change like the Co-Op for example. The ordinance on April 9 will be in place for up to 22 months and when the Zoning Ordinance Update is completed this issue will be discussed again. A member of the public stated that we do not need to go backwards but instead go forwards. This ordinancehad failed twice on January 16 and should not likely be reviewed again. However, Ms. Grote indicated that City Council had a strong belief to have something in place to protect retail and personal services uses but how strong it should be on whether a CUP is required, how its going to be done is the real question and not whether we should do it. Ms. Arpan added that 3 of the Councilmembers wanted to see the language changed and Ms. Grote stated that there were a couple of things that were articulated and that was the majority of the members reopened it and approved it even if there were 1 or 2 that said do we really want it at all and .there were others that said no. A member of the public indicated that the restrictions are totally negative against the property owners. If you want retail there should be a positive buy out like an easing of certain limitations, parking, construction, etc. The purpose of zoning is to benefit all and if you want retail, some considerations should be made. This Ordinance is not suitable for the kinds of uses that are asked for. Most of the need is restaurants but not one person want to take it up because of these restrictions. Ms. Grote indicated that the change use of existing to a more intense use, unless you can provide that parking onsite you cannot open that use there. There is a requirement for one parking space for every 250 square feet of retail space but for restaurant you need one space for every 60 square feet. Ms. Arpan agreed that this is a valid point that if City Council wants more retail, reasonable incentives should be considered. A public speaker added that restriction on the parking area should be included to keep Midtown growing. Ms. Grote indicated that a spillover of parking would make the circulation awkward so it needs to be kept under control. Mr. Kousnetz mentioned that if he does not get retail use he may go with a restaurant but it will need parking. Ms. Grote stated that as part of an ARB. review, at the Director’s hearing, the Director can vary the requirement, he can talk first about it before doing it. Ms. Arpan added that there are some uses that are not viable to the area. Ms. Grote indicated that Downtown is dealt with differently than Midtown. It is one space per 250 square feet no matter what use of floor area it is. The Parking Assessment District was created in the mid-80’s with one combined trip meaning parking once but doing several things. For example, going back and forth from retail to personal service to retail to restaurant and back to retail in the Downtown area. Similarly in Cal. Ave. area that allows you as you-change use, you change your assessment so if you go from retail to restaurant you would increase your assessed amount so ybu’ll pay more into the parking district but if you change to retail you pay less. Those are the two assessment districts and they were viewed as special cases. In the E1 Camino area you would need to provide parking onsite if you change the use. Ms. Grote was asked for her comment on this ordinance and she indicated that she was for an ordinance and recommends that it to be more inline with Downtown. The City’s perspective is that something needs to be done. There is a prohibition on office use downtown but not in Midtown. Mr. Kousnetz indicated that this is two different worlds. The response is to a small group but he has a very small area to work with. 2200 square feet for a restaurant just cannot happen. Ms. Arpan indicated that the marketplace generates the retail use. The offices are driving out the retail space. Ms. Grote added that the Ordinance may affect E1 Camino Real as well. City Council recognized in November 5, 5 areas of concern which are Midtown, Charleston, E1 Camino Real, California Avenue and Downtown but just to be reviewed is Midtown. The initial review with ECR was done as well as with Cal. Ave. A public speaker asked whether the existing office leases in Downtown would revert to retail when they leave and Ms. Grote indicated that they will not under the current Ordinance which is what the Council is asking to look at, changing that section of the current ordinance, that would then require the space converting to retail or personal service use as the office moves. A public speaker indicated that the marketplace does cause these things to happen and Ms. Arpan stated that when the rents quadruple, small businesses cannot afford to pay so the Council had requested some method or some form of protection for these retail uses. Ms. Grote thanked the attendees for coming to the meeting and will provide all necessary information when the Ordinance moves forward to the next stage. Ms. Arpan added that the City is very appreciative of all their efforts and comments towards this project. Meeting adjourned at 2:35 PM. Document Attachment G Palo Alto Municipal Code ¯Chapter 18.50 GROUND FLOOR COMBINING DISTRICT (GF) REGULATIONS Sections: 18.50.010 18.50.020 18.50.030 18.50.040 Specific pttrpose. Permitted uses. Conditional uses. Use exception. 18.50.010 Specific purpose. The ground floor combining district is intended to modify the uses allowed in the CD commercial downtown district and subdistriets 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 isabove 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) 18.50.020 (a) (1) (2) (3) (4) (5) (6) (7) (8) Permitted uses. The following uses shall be permitted in the GF combining district: Eating and drinking; Hotels; Personal services; Retail services; Theaters; Travel agencies; Entrance, lobby or reception areas serving nonground floor uses; 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 permi.tted in the applicable underlying CD district. (Ord. 4098 § 2 (part), 1992) 18.50.030 Conditional uses. (a) The following uses may be conditionally allowed on the ground floor in the GF ground floor combining district, subject to issuance of a conditional use permit in accord with Chapter 18.90 and with the additional finding required by subsection (b): ~/~m-isapi~d~?c~ient~D=145399&hitsperheading=~n&inf~base=pr~c~de-3&jump=18~5~&s~ftp~3/23/~1 Document Page 2 of 10 (1) (2) (3) (4) (5) (6) Business or trade school; Commercial recreation; Day care; Financial services, except drive in services; General business service; All other uses conditionally permitted in the applicable underlying CD district, provided such uses are not on the ground floor. (b) The zoning administrator may grant a conditional use permit under this section only if he or she makes the following finding in addition to the findings required by Section 18.90.060: 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. 4098 § 2 (part), 1992) 18.50.040 Use exception. (a) Application may be made to the director of planning and community environment for an exception to the otherwise permitted or conditionally permitted ground floor uses, to allow a use permitted in the applicable underlying CD district, if the following conditions are met: (1) The initial application for the exception is made when the vacancy rate for ground floor properties within the GF combining district, as determined by city survey, is five percent (5%) or greater. (The city shall conduct the vacancy rate survey in September of each year.); and (2) The applicant can demonstrate that the ground floor space for which the application is being made has been vacant and available for occupancy six months or more at the time of the application. (b) Any exception granted pursuant to this section shall be for a specific use, and shall be effective for five years, or less time if requested by the applicant. (Ord. 4098 § 2 (part), 1992) ~Applicability °f regulati°ns.~~- . 18.55.07 Special requirements.’ ~0 .Recycling storage.-. .../om_isapi.dll?clientID=145399&hitsperheading=on&infobase=procode-3&jump=l 8.50&softp 3/23/01 Document Attachment I Pale Alto Municipal Code Chapter 18.47 PEDESTRIAN SHOPPING COMBINING DISTRICT (P) REGULATIONS Sections: 18.47.010 18.47.020 18.47.030 18.47.040 Special purposes. Applicability of regulations. Zoning map designation. Use limitations and site development regulations. 18.47.010 Special purposes. The pedestrian shopping combining district is intended to modify the regulations of the CN neighborhood commercial district, the CC community commercial district and the CD commercial downtown district in locations where it is deemed essential to foster the continuity of retail stores and display windows and to avoid a monotonous pedestrian environment in order to establish and maintain an economically healthy retail district. (Ord. 3792 § 1, 1988: Ord. 3098 § 1, 1978; Ord. 3048 (part), 1978) 18.47.020 Applicability of regulations. The pedestrian shopping combining district may be combined with any CN, CC or CD district, in accord with Chapter 18.08 and Chapter 18.98. Where so combined, the regulations established by this chapter shall apply in lieu of, or in addition to, the provisions established by Chapter 18.41, Chapter 18.43 or Chapter 18.49. (Ord. 3792 § 2, 1988: Ord. 3048 (part), 1978) 18.47.030 Zoning map designation. The pedestrian shopping combining district shall apply to any site adjacent to designated pedestrian frontage or pedestrian ways shown on the zoning map. (Ord.3048 (part), 1978) 18.47.040 Use limitations and site development regulations. (a) Pedestrian Design Features P~equired. On any site, or portion of a site, adjoining a designated pedestrian sidewalk or pedestrian way, new construction and alterations to existing structures shall b~ required as determined by the architectural review board, to provide the following design features intended to create.pedestrian or shopper interest, to provide weather protection for pedestrians, and to preclude inappropriate or inharmonious building design and siting: (1)Display windows, or retail display areas; (2)Pedestrian arcades, recessed entryways, or covered recessed areas designed for pedestrian use with an area not less than the length of the adjoining frontage times 0.5 meters (1.5 feet); .../om_isapi. dll ? clientID= 145399 &hitsp erheading=on&in fob ase=pro co de-3 &jump= 18.47 &softpe3/23/01 Document Page 2 of 8 (3) Landscaping or architectural design features intended to preclude blank walls or building faces. The specific nature and requirements of pedestrian design features shall be determined by the architectural review board, in accord with design guidelines prepared by that board pursuant to Chapter 16.48. (b) Parking and Vehicular Access Restricted. Vehicular access to sites adjoining designated pedestrian sidewalks or pedestrian ways which requires vehicular movement across such pedestrian sidewalks or pedestrian ways shall be prohibited, except where required by law or as may be. authorized by a use permit in accord with Chapter 18.90. (Ord. 3792 § 3, 1988: Ord. 3108 § 18, 1979: Ord. 3098 § 2, 1978: Ord. 3048. (part), 1978) Sections: 18.48.010 Specific proposes. 1. 8.48.020 Applicability of regulations. 18.48.030 Zoning map desiga~ation." 18.48.040 Site development regulations. 18.48.050 Special requirements. 18.48.010 Specific purposes. The hotel combining district is intended to modify the regulatjgfis of the service commercial and community commercial districts to permit ho-te~n the service commercial and community commercial districts,, to developjel5 to a 0.6to 1 floor area ratio, with a conditional use permit, and subject to site an~cd’esign review. (Ord. 3890 § 14 (part), 1989) 18.48.020 Applicability of regulations. The combining district may be combined~ith a service commercial &’strict or a community commercial district, in accord ~,l~h Chapters 18.08 and 18.98. Where so combined, the regulations established b~Ahis chapter shall apply in lieu of the comparable provisions established by/~fie service~istrict or community commercial district. (Ord. 3890 § 14 (part), 1989)/ . 18.48.030 Zon The service co the zoning map (CS) or eo(Ord. 3890/~ (part), 1989) 18. ichever is applicable, shall apply except for th~ f--~o~ing: " (a) Floor Area Ratio. .../om__isapi.dll?clientID=145399&hitsperheading=on&infobase=procode-3 &jump=18.47&soflp 3/23/01 Attachment D ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CfTYOF PALO ALTO PRESERVING AND SUPPORTING GROUND-FLOOR NEIGHBORHOOD-SERVING USES IN THE CORENEIGHBORHOOD COMMERCIAL (CN) DISTRICT AT MIDTOWN SHOPPING DISTRICT (PORTIONS OF THE 2600,2700 AND 2800 BLOCKS OF MIDDLEFIELD ROAD AND 700 BLOCKS OF COLORADO AVENUE AND MORENO AVENUE)AND CHARLESTON CENTER (PORTIONS OF THE 3900 BLOCKOF MIDDLEFIELD ROAD) ON AN EXTENDED INTERIM BASIS PURSUANT TO GOVERNMENT CODE SECTION 65858 BY AMENDING AND EXTENDING ORDINANCE NO. 4676 ADDING CHAPTER 18.42 TO THE PALO ALTO MUNICIPAL CODE TO TAKE EFFECT IMMEDIATELY The City Council of the City of Palo Alto does ordain as. follows: SECTION I. Findings. The Council finds and declares that: A.The Council held noticed public hearings on an interim measure to conserve and promote retail and neighborhood- serving uses in the Midtown Shopping District and Charleston Center on January 16, 2001, February 20, 2001 and April 23, 2001. The Planning and Transportation Commission also held a public.hearing on March 28, 2001 on this subject. B.The Council hereby reaffirms~ and incorporates by reference findings A through H of Ordinance No. 4676 and A through H of Ordinance No. 4675 adopted January 16, 2001, which findings are attached hereto as Exhibits A-I and A-2. C.Based on the findings set forth in Exhibits A-I and A-2 and the record before the Council, the Council finds that there is a current and immediate threat to the public health, safety or welfare if this ordinance is not adopted pursuant to Government Code Section 65858 limiting new ground floor office uses in the Core Midtown CN district and Charleston Center while the City completes its zoning ordinance update. If an interim ordinance is not adopted, additiona! non-neighborhood serving businesses and other uses may enter into long-term tenancies in these areas, limiting the ability of businesses to provide needed neighborhood- serving retail stores and services to City residents. This displacement of retail and service uses imposes a hardship on local residents, particularly those with reduced mobility, increases already serious traffic congestion, exacerbates an already significant surplus of jobs over housing, and leads to a decline in 010323 syn 0090819 1 quality of life. Because existing retail and neighborhood-serving uses depend upon a concentration of such uses to maintain their own economic viability, continued loss of these uses would seriously jeopardize the entire shopping district. D.This ordinance extends interim regulations in the Core Midtown Shopping District and Charleston Plaza until March 2, 2003, as provided in Government Code Section 65858. SECTION 2. Ordinances 4675 and 4676 of the City of Palo Alto are hereby amended and extended to adopt Chapter 18.42 of the Palo Alto Municipal Code to read in full as follows: Chapter 18.42 CNG NEIGHBORHOOD COMMERCIAL CHARLESTON PLAZA AND CORE MIDTOWN SHOPPING DISTRICT REGULATIONS Sections: 18.42.010 Specific purposes. 18.42.020 Applicabilityof regulations. 18.42.030 Permitted uses. 18.42.040 Conditional uses. 18.42.050 Site development regulations. 18.42.060 Parking and loading. 18.42.070 Special requirements. 18.42.080 Recycling storage. 18.42~090 Use exception for ground floor offices in Midtown District 18.42.100 Nonconforming office uses in the Midtown District 18.42.010 Specific purposes. The CN~ neighborhood commercial Charleston Plaza and Core Midtown Shopping District is intended to create and maintain neighborhood shopping areas primarily ahcommodating personal serviceT .and retail sales uses, as well as office uses above the ground floor, of moderate size serving the irm~ediate neighborhood, under regulations that will assure maximum compatibility with surrounding residential areas. 18.42.020 Applicability of regulations. The specific regulations of this chapter and the additional regulations and procedures established by Chapters 18.83 to 18.99, inclusive, shall apply to the Core Midtown Shopping District and Charleston Plaza as shown on Exhibits B-I and B-2 attached to this ordinance and a part of it. 010323 sy. 0090819 2 18.42.030 Permitted uses. The following uses shall be permitted in the CNG neighborhood commercial district: (a) Accessory facilities and uses customarily incidental to permitted uses; (b)Animal care, but excluding boarding and kennels; (c)Day care centers, large day care hcmcc, .........~ c~rc ...............................~; (d) Eating and drinking services, except drive-in and take-out services; ~e3-~(e) Medical, professional, and general, business offices not on the qround floor, subject to the following size limits: Total floor area of office uses on a lot, including any g.round floor office uses, shall.not exceed twenty-five percent of the lot area, provided: (i) A lot shall be permitted to have at least a total gross floor area of two thousand five hundred square feet of office uses, provided the uses meet all other zoning regulations. (2) No lot shall be permitted to have more than a total gross floor area of five thousand square feet of office uses. (3) If all the office uses are above the ground floor, such uses may be allowed to exceed the maximum size limit, subject to issuance of a conditional use permit in accord with Chapter 18.90. The maximum size for .any conditional use shall be established by the zoning administrator and specified in the conditional use permit for such~ use. (~) Medical and professional offices, travel agencies, and insurance agencies on the ground floor of Charleston Plaza provided that (i)the total gross floor area of ground floor office use at Charleston Plaza does not exceed 7,850 square feet; (ii) no individual office exceeds 2,500 square feet in gross floor area; 010323 syn 0090819 3 (iii) the office is "neighborhood serving" as defined in Section 18.42.070(h) and certified as such by the city. (~)Personal services; (h=~)Retail services, excluding liquor stores; (i~) Reverse vending machines, subject to regulations established by Chapter 18.88 of-this code; (i~) Neighborhood business services. (km) Entry or lobby areas for second floor uses not exceeding 15% of the ground floor square footage. 18.42.040 Conditional uses. The following uses may be conditionally allowed in the CNG district, subject to issuance of a conditional use permit in accord with Chapter 18.90: (a)Ambulance services; (b) Automobile service stations, subject to site and design review in accord with the provisions of Chapter 18.82; (c)Churches and religious institutions; (d)Convalescent facilities; (e) Drive-in services or take-out services, associated with permitted uses, so long as drive-up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such services shall be permitted within one thousand (I000) feet and each use shall not be less than one hundred fifty (150) feet from one another, (f) .Financial services; O10323 syn 0090819 (g) Mortuaries; (h)Private clubs, lodges, or fraternal organizations; (±)Private educational facilities; (j) Utility facilities essential to provision of utility services to the neighborhood, but excluding construction or storage yards, maintenance facilities, or corporation yards; (k)Liquor stores; (i) Temporary parking facilities, provided that such facilities shall remain no more than five .years; (m)Farmer’s markets; (n)Commercial recreation; (o)Outdoor recreation service; (p)Recycling centers. (q) Medical and professional offices, travel aqencies and insurance aqencies over 2,500 square feet at Charleston Center provided the CUP finding in Section 18.42.070(q) can be met in addition to the two findings listed in .Chapter 18.90 of the Pa!o Alto Municipal Code and the total office square footaqe at the Center does not exceed 7,850. 18.42.050 Site development regulations. The following site development regulations shall apply in the CNG neighborhood commercial district, provided that more restrictive regulations may be recommended by the Architectural Review Board and approved by the Director of Planning and Community Environment, pursuant to Chapter 16.48: (a)Site Area. No requirement is established. (b)Site Width. No requirement is established. (c)Site Depth. No requirement is established. (d) Front Yard. The minimum front yard shall be ten (i0) feet. The minimum front yard shall be planted and maintained as a landscaped screen excluding areas required for access to the site. (e)Rear Yard. No requirement is established. 010323 sy. 0090819 5 (f) shall apply: Side Yards. The following side yard regulations feet. (1) (2) Interior Side Yard. No requirement is established. The minimum street side yard shall be twenty (20) (g) Floor Area Ratio. The maximum floor area ratio 4~^~4ai "s^- shall be 4 to 1 residential uses shall bc .5 to I. (h) Site Coverage. The maximum site coverage shall be fifty percent of the site area. (i)Height. The maximum height shall be twenty-five (25) feet r,~^~^ ~^ ~4~^4~ ~.’~4~,.~ ............. ~ ......w .........~ has cnc or mcrc ......;n (j) Accessory Facilities and Uses. Regulations governing accessory facilities and uses, and governing the application of site development regulations in specific instances are established by Chapter 18.88. (k)Size of Establishment. Permitted commercial uses other than offices shall not exceed the floor area per individual use or business establishment shown in the following table. Such uses may be allowed to exceed the maximum establishment size, subject to issuance of a conditional use permit in accord with Chapter 18.90. The maximum establishment size for any conditional 010323 syn 0090819 6 use shall be established by the Zoning administrator and specified in the conditional use permit for such use. Use Maximum Gross Floor Area Personal services 2,500 square feet Retail services, except grocery stores 15,000 square feet Grocery stores 20,000 square feet Eating and drinking services 5,000 square feet Neighborhood business services 2,500 square feet (i)$i-- of Office "-^~ Total floor ....of ....4~^~ (I)A i^~ -~-~I be permitted to ~ ....at least ~ ........."~ square feet of ~f~4ce ....~ross .....area of ~"--~ ~k ..... (3)..... -~^s,.,,.,,_. akove~ t~c- qrcund floor may. ~^ ~,,~~ ~ ..... ~ to ......... ~ ..........anyn accord for (l=m) Outdoor Sales and Storage. All permitted-office and commercial activities shall be conducted within a building, except for: 010323 syn 0090819 7 (i) Incidental sales and display of plant materials and garden supplies occupying not more than 46.5 square meters (five hundred square feet) of exterior sales and display area, (2) Farmers’ markets which have obtained a conditional use permit, and (3) use permit. Recycling centers which ha~e obtained a conditional (e~) Special Setbacks. Where applicable, setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code shall be followed for the purpose of determining legal setback requirements. 18,42.060 Parking and loading. (a) Off-street parking and loading facilities shall be required ~ for all permitted and conditional uses in the CNG neighborhood commercial district, in accord with Chapter 18.83. All parking and loading facilities on any site, whether required as minimums or optionally provided in addition to minimum requirements, shall comply with the regulations and design standards established by Chapter 18.83. (b) Location of Parking and Loading Spaces. No parking or loading space, whether required or optional, shall be located in the first ten (I0) feet adjoining the street property line of any required yard. 18.42.070 Speciai Requirements. The following special requirements shall apply in the CNG neighborhood commercial district: 010323 syn 0090819 8 use on any site, the sct in ($~) Sites abutting or having any portion located within -one hundred fifty (150) feet of any RE, R-l, R-2 or RM district, or any PC district permitting single-family development or multiple-family development shall be subject to the following additional height and yard requirements: (I) On any portion of a site in the CNG district ’which abuts a site in any RE, R-l, R-2, RM or applicable PC district, a minimum interior yard of ten (I0) feet shall be required, and a solid wall or fence of between five (5) and eight (8) feet in height shall be constructed and maintained along the common site line. The minimum interior yard shall be planted and maintained as a landscaped screen. (2) On any portion of a site in the CNG district which is opposite from a site in any RE, R-l, R-2, or RM or applicable PC district and separated therefrom by a street, alley, creek, drainage facility, or other open area, a minimum yard of ten (I0) feet shall be required. The minimum yard shall be planted and maintained as a landscaped screen, excluding areas required for access to the site. (~e) Sites sharing any lot line with one or more sites in any RE, R-I, R-2, RM, or any residential PC district shall be subject to a maximum height established by a daylight plane beginning at a height of ten (i0) feet at the applicable side or rear site lines and increasing at a slope of one meter for each two meters of distance from the side or rear site lines until intersecting the height limit otherwise established for the CNG district. (~4) Sites which are opposite a site in any RE, R-I, R-2, RM or any residential PC district and separated by a street, alley, creek or drainage facility shall be subject to @ maximum height established by a daylight plane beginning at a height of ten (I0) feet at the applicable RE, R-l, R-2, RM or residential PC district side or rearsite line and increasing at a slope of one foot for each two feet of distance from the site line until intersecting the height otherwise established for the CNG district. (de) All uses, whether permitted or conditional, shall be conducted-in such a manner so as to preclude nuisance, hazard, or commonly recognized offensive conditions or characteristics, including creation or emission of dust, gas, smoke, noise, fumes, odors, vibrations, particulate matter, chemical compounds, electrical disturbance, humidity, heat, .cold, glare, or night 010323 syn 0090819 9 illuminations. Prior to issuance of a building permit, or occupancy permit, or at any-other time, the building inspector may require evidence that adequate controls,- measures, or devices have been provided to ensure and protect the public interest, health, comfort, convenience, safety, and general welfare from such nuisance, hazard, or offensive condition. ($~) Employee shower facilities shall be provided for any new building constructed or for any addition to or enlargement of any existing building in compliance with the following table: Use Medical, professional, general business offices and financial services Gross Floor Area of New Construction 0-9,999 square feet I0,000-19,999 square feet 20,000-49,999 square f~et 50,000 square feet and up Number Showers Required None 1 2 4 Retail, personal and eating and .drinking services 0-24,999 square feet 25,000-49,999 square feet 50,000-99,999 square feet 100,000 square feet and up None 1 2 4 of (~) On any portion of a site which is located within one hundred fifty feet of any RE, R-l, R-2, RM or PC district permitting single-family or multiple-family development, additional site development regulations and guidelines shall apply as set forth in Chapter 18.64 of the Palo Alto Municipal Code. (g) Additional Conditional Use Permit Findings for Offices over 2,500 Square Feet at Charleston Center. Before approvinq a conditional use permit for neiqhborhood-servinq offices larqer than 2,500 square feet in total floor area at Charleston Center, the City shall find that the proposed use will be neiqhborhood serving, that it will be conducted in a manner that will enhance and strengthen the Center as a neiqhborhood resource, and that it will not diminish the retail strenqth of the Center. (h) Certification of New Neiqhborhood-Servinq Office Uses at Charleston Center. Any office use first occupying space at Charleston Center on or after January 16, 2001, shall obtain a written determination from the Director of Planning and Community Environment that it qualifies as a neiqhborhood-serving use before occup¥inq its premises. The applicantshall submit such information 010323 syn 0090819 I0 as the Director shall reasonably require in order to make the determination, and the Director shall issue the determination within 30 davs of receiving a complete application. Failure to submit the required information shall be grounds for determining that a business is not neighborhood-serving. (i) Definition of Neighborhood-Serving Use.A neighborhood-serving use primarily serves individual consumers and households, not businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local .customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, rather than the provider of the goods or services travelling off-site. 18.42.080 Recycling storage. All new development, including approved modifications that add thirty percent or more floor area to existing uses, shall provide adequate and accessible interior areas or exterior enclosures for the storage of recyclable materials in appropriate containers. The design, construction and accessibility of recycling areas and enclosures shall be subject to approval by the Architectural Review Board, in accordance with design guidelines adopted by that board and approved by the City Council pursuant to Section 16.48.070. 18.42.090 Use exception for ground floor offices in Midtown Shopping District. (a) Application may be made to the Director of Planning and Community Environment for an exception to the otherwise permitted or conditionally permitted ground floor uses, to allow a use permitted in the CNG district, if the following conditions are met: (i) The initial application for the exception is made when the vacancy rate for ground floor properties within the Midtown Core Shopping District, as determined by city survey is five percent (5%) or greater. (The city shall conduct the vacancy rate survey in September of each year.) (ii) The applicant can demonstrate that the ground floor space for which the application fs being made has been vacant and available for occupancy .six months or more at the time of the application. (iii) If the 5% vacancy rate is created b~ only one building, that building has been vacant for at least 12 months or longer prior to the filing of the application for an exception. 010323 syn 0090819 11 (b) An exception shall be qranted if the City finds that the conditions listed in subsection (a) above have been met~ The exception shall be for a specific use and shall be effective for no more than fiveyears or such lesser period as the applicant may request. (c) Consecutive or more than one exception will not be qranted for buildinqs at Midtown. Only one exception can be qranted and it can be for up to five years and then the use must cease. 18.42.100 District. Nonconforming Office Uses in Midtown Shoppinq. (a) All legally permitted office uses in the Midtown Shoppinq District above the qround floor existing as of August I, ~, January 16, 2001 on sites e~4--which, as of such date, has office uses exceeding five thousand square feet in size or twenty- five percent of lot area shall be permitted to remodel, improve, or replace site improvements in accordance with applicable site development regulations, provided that any such remodeling, improvement or replacement shall not result in increased floor area devoted to such office uses. (b) A le~ally permitted qround floor office use existin~ as of January 16, 2001 in the Midtown Shoppin~ District may be continued by the business or practice occupyinq that space as of that date and it may remodel, improve or replace improvements in accordance with site development regulations if such chanqes do not result in an increase of floor area devoted to office uses. However, an office use may not be continued by another business or ]9ractice unless the new tenant or owner has acquired and will continue the existin~ business or practice. Otherwise, it may only be replaced with a permitted or conditionally permitted use. SECTION 3. The Council finds that this project is exempt from the provisions of the Environmental Quality Act (~CEQA") because it can be seen with certainty that there is no possibility that this project will have a significant effect on the environment, and because this ordinance falls within the exception to CEQA set forth in Section 15268 of the CEQA Guidelines. SECTION 4. Effective Date. This ordinance was passed by a four-fifths vote after a public hearing pursuant to Government Code Section 65858 and shall be effective immediately. SECTION 5. Expiration Date. in effect until March 2, 2003. This ordinance shall remain 010323 syn 0090g19 12 SECTION 6. Independent Authority. This ordinance is adopted under the Council’s authority under the Charter of the City of Palo Alto as well as pursuant to Government Code Section 65858. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney Mayor City Manager Director of Planning and Community Environment Oi 0323 syn 0090819 13 EXHIBIT A-I A.The City of Palo Alto reaffirmed in its Comprehensive Plan a goal of fostering "an enhanced sense of Community with development designed to foster public life and meet City wide needs." (Goal L-2, adopted July 1998). To implement that policy, the City adopted Policy L-10, "maintain a citywide structure of Residential Neighborhoods, Centers, and Employment Districts..." and Policy L-II, "promote increased compatibility, interdependence, and support between commercial and mixed use centers and the surrounding residential neighborhoods." B.Basic to the City’s land use p~ttern is the availability of shopping and services within walking distance of residential neighborhoods. (Goals L-3 and L-4.) The Comprehensive Plan identifies four Neighborhood Centers: small retail centers with a primary trade area limited to the immediately surrounding area; often anchored by a grocery or drug store and may include a variety of smaller retail shops and offices o~iented toward the everyday needs of surrounding residents (Comprehensive Plan, p. L-18.) C.Two of the Neighborhood Centers, Edgewood Plaza and Alma Plaza, are developed under site-specific PC Planned Community zoning regulations. However, Midtown and Charleston Center operate under the CN Neighborhood Commercial standards first adopted by the City in 1978. Both centers are valued neighborhood and city resources, containing anchoring supermarketsand drug stores and a mix of associated neighborhood-serving businesses. However, the CN district allows uses which are not neighborhood-serving in certain circumstances. Charleston Center is addressed in a separate ordinance. D.A "neighborhood-serving use" is one that primarily serves individual consumers and households,, rather than other businesses; is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, instead of the provider travelling off site. E.The City is experiencing an unprecedented sustained demand for office space from businesses which are not neighborhood- serving and instead primarily serve other businesses. The demand for office space comes, to a significant extent, from the well- 010323 s)m 0090819 14 financed and often highly profitable businesses that typify the Silicon Valley. These concerns are willing and able to pay high rents to locate within the Neighborhood Centers which are intended to serve the City’s residentia! areas. As a result, buildings which had been used for neighborhood-serving uses have been removed from the retail space market and converted to office or "business to business" uses. F.The Neighborhood Centers are small, and conversion of some of their ground floor commercial space to non-neighborhood serving uses not only removes valuable neighborhood serving uses but can adversely effect those that remain. Unless the CN standards are changed to protect neighborhood-serving uses in Midtown, they will be displaced by non-neighborhood serving uses. G.The City has zoned a significant portion of its land for non-neighborhood serving uses. It has substantially more jobs than housing, and use of CN district properties for non- neighborhood serving uses worsens this jobs/housing imbalance at the same time that it leads to loss of quality of life in the neighborhoods and increases in driving. In response to the Comprehensive Plan and citizens’ concerns about replacement of neighborhood-serving uses with offices that do not serve the neighborhood, and in some cases do not serve consumers at all, and as part of the comprehensive update of the zoning ordinance, the City’s Department of .Planning and Community Environment is studying modification of CN standards to better, implement the intent of the Comprehensive Plan and the district itself. It is very likely that "neighborhood-serving" uses will be more fully defined and other uses limited in the CN District when the zoning ordinance update is completed. However, that comprehensive zoning ordinance update will not be completed within the next twelve months. 010323 syn 0090819 15 EXHIBIT A-2 The Council finds and declares that: A.The City of Palo Alto reaffirmed in its Comprehensive Plan a goal of fostering "an enhanced sense of Conamunity with development designed to foster public life and meet City-wide needs." (Goal L-2, adopted July 1998). To implement that policy, the City adopted Policy L-10, "maintain a citywide structure of Residential Neighborhoods, Centers, and Employment Districts..." and Policy L-II, "promote increased compatibility, interdependence, and support between commercial and mixed use centers and the surrounding residential neighborhoods." B. Basic to the City’s land use pattern is the availability of shopping and services within walking distance of residential neighborhoods. (Goals L-3 and L-4.) The Comprehensive Plan identifies four Neighborhood Centers: small retail centers with a primary trade area limited to the immediately surrounding area; often anchored by a grocery or drug store and may include a variety of smaller retail shops and offices oriented toward the everyday needs of surrounding residents (Comprehensive Plan, p. L-18.) C. A "neighborhood-serving use" is one that primarily serves individual consumers and households, rather than other businesses; is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, instead of the provider travelling off-site. D. The City is experiencing an unprecedented sustained demand for office space from businesses which are not neighborhood- serving and instead primarilY serve other businesses. The demand for office space.comes, to a large extent, from the well-financed and often highly profitable businesses that typify the Silicon Valley. These enterprises are willing and able to pay high rents to locate within the City’s residential areas. As a result, buildings which had been used for neighborhood-serving uses have been removed from the retail space market and converted to office, "business to business" uses. This has led to a significant decrease in neighborhood-serving businesses in Neighborhood Centers. 010323 syn 0090819 16 E.Charleston Center is a Neighborhood Center. It operates under the CN Neighborhood Commercfal standards first adopted by the City in 1978. While the zone was intended to accommodate uses of a moderate size serving the immediate neighborhood, it was not at that time necessary to exclude non- neighborhood-serving uses in order to assure space for a variety of neighborhood-serving uses. It now is. F. The Center consists of two parcels under a single ownership. It is an important neighborhood and city resource, containing an anchoring supermarket and a mix of associated uses, most if not all of which are neighborhood-serving businesses. G. The Neighborhood Centers are relatively small. Charleston Center has approximately 50,000 square feet of built area and serves a large residential area. The City has a number of other commercial d±stricts zoned for businesses that are not neighborhood-serving. H. In response to the Comprehensive Plan and citizens’ concerns about replacement of neighborhood-serving uses with offices that do not serve the neighborhood, and in some cases do not serve consumers at all, and as part of the comprehensive update of. the zoning ordinance, the City’s Department of Planning and Community Environment is studying modification of CN standards to better implement the intent of the Comprehensive Plan and the district itself. It is very likely [hat "neighborhood-serving" uses will be more fully defined and other uses limited in the CN District when the zoning ordinance update is completed. However, that comprehensive zoning ordinance update will not be completed within the next twelve months. 010323 syn 0090819 17 ON Dietrmt.Char!eston Cente’r. D ON Zone .. Designatio.n. EXHIBIT’~-I ~ ’ Chalelston Shopping Center ~ (1993 building footprints) EXhibit Interim CN ~ombinlng Distridt at Midtown Shopping.Center Interim ON Combin.lng District Overlay "Interim CN Combining District¯ Overlay at Midtown Shopping Center (1993 building footprints) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 ROLL CALL: March 28, 2001 REGULAR MEETING - 7:00 PM City Council Chambers Civic Center, 1st Floor 250 Hamilton Avenue Palo Alto, California 94301 Attachment E Commissioners: Annette Bialson, Chairman-absent Patrick Burt, Vice-Chair Owen Byrd-absent Jon Schink-absent Kathy Schmidt Phyllis Cassel Bonnie Packer Staff: Ed Ga.wf Planning Director Lisa Grote, Acting, Chief Planning Official Wynne Furth, Senior Assist. City Attorney Susan Arpan, Economic Resources Manager Zariah Betten, Executive Secretary Commissioner Burr: Members of the public are invited to speak on items that are not on the .agenda tonight. If there is anyone wishing to speak to an item that is not on the agenda they need to submit an application to speak at this time. Before beginning that, we will have the roll call. ORAL COMMUNICATIONS. Members of the public may speak to any item not on the agenda with a limitation of three (3) minutes per speaker. Those who desire to speak must complete a speaker request card available from the secretary of the Commission. The Planning Commission reserves the right to limit the oral communications period to 15 minutes. Commissioner Burr: I see no speakers on items that are not on the agenda. Excuse me we have one. Lynn Chiapella, 631 Colorado Avenue, Palo Alto: This is related but not on the issue of the Midtown Ordinance. In the report you mentioned about the business license, this is something to do down the road. I will submit this letter but basically it says without a business license or registration submitted on a regular basis there is really no way to track what is moving into any storefi:ont or office building. Staff is then required to approve plans without knowing what actually is going into a building. This has led to a situation where a fitness gym replaced a dentist in residential, a corporate office replaced a doctor’s office, a training center described itself as a retail store, a dentist request and got approval I guess from Staff for a liquor license which he then didn’t need. I don’t know what a dentist in a residential area needs a liquor license for. There are several different kinds of cases like this that have come up and the Staffis at a big disadvantage. Applicants are becoming very adept at giving the fight answer especially if it is only an oral answer and even when the plans are different than what is described orally they are pretty well bound to take the applicant’s words and approve it. So this is how these .unusual uses came into being. So I would ask for leadership from Planning Commission, City Council and City Manager to established a reasonable method to determine prior to building permits and building applications being approved what is actually going in there and how many City of Palo Alto 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3O 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 people work there to get some kind of a motion. We are building two Downtown garage for I don’t know how many millions of dollars but it only fulfills half the need. Part of that is you don’t really know for sure how many people are working and in which business. So I would ask the Planning Commission to take a lead on this rather than always waiting and having to wait for City Council or the City Manager. I think you have the ability to take an active part, to take a lead, and to figure out a way to do this. It doesn’t have to be an onerous process. I don’t think it has to be complicated. Thank you. Commissioner Burt: Thank you. I might note that the Planning Commission is going to be having a upcoming sub-committee meeting on goals, objectives and work plans. Perhaps this would be a topic for discussion. Next we have any Agenda Changes, Additions and Deletions. AGENDA CHANGES, ADDITIONS AND DELETIONS. The agenda may have additional items added to it up to 72 hours prior to meeting time. Commissioner Burt: Are there any changes that Staffhas at this time? Ms. Lisa Grote, Chief Planning Official: None. Thank you. Commissioner Burr: Thank you. CONSENT CALENDAR. Commissioner Burt: There is nothing on the Consent Calendar. UNFINISHED BUSINESS. Public Hearings:None. Other Items:None. Commissioner Burt: There is no Unfinished Business. We did at our last meeting have the discussion of the R-1 housing and since that is in a way an unfinished business item can Staff comment on the status of that. Mr. Ed Gawf, Planning Director: Yes. We did have our study.session last week. As the Planning Commission always does you provided us very good comments, advice and thoughts. We originally scheduled to come back to you on April 11th with a public heating, however, we. feel that we need a little additional time and maybe another study session. Part of our goal is to finish up the draft of the Design Guidelines and Checklist so we can bring back that as part of the study session. So the April 11 public hearing has been cancelled and we will schedule a date, probably towards the end of April. We will check everyone’s calendar for a study session on the Design Guidelines. Commissioner Burr: Thank you. City of Palo Alto 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2o 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 NE W BUSINESS. Public Hearings: Retaining Retail Uses in Charleston Center and the Midtown Shopping District: Review of extension and modification of interim zoning regulations to preserve and encourage neighborhood serving retail uses and limiting office uses in ground floor locations in the Neighborhood Commercial (CN) District at Charleston Plaza (portion of the 3900 block of Middlefield Road) and the Midtown District (portions of the 2600, 2700 and 2800 blocks of Middlefield Road and the 700 block of Colorado Avenue). Commissioner Burr: At this time we would be moving on to the primary discussion tonight which is Retaining Retail uses in the Charleston center and the Midtown Shopping District. Before proceeding to the Staff report, this is a quasi-judicial item and at this time members of the Commission would be invited to disclose any meetings that they have outside of this meeting that would be appropriate to disclose. Commissioner Packer: I had a telephone conversation with Mr. Kousnetz and a impromptu conversation with Mike Cobb in Safeway this afternoon. Commissioner Butt: I had a telephone discussion with Mike Cobb regarding his property. At this time would Staff like to make the presentation of their report? Ms. Grote: Thank you very much Vice-Chair Burr and Commissioners. As you mentioned this is an item to recommend continuation of two interim ordinances, one for the Midtown Shopping District and one for the Charleston Center. The intent of the ordinances is to protect existing retail uses and prevent the additional loss of existing retail and personal service uses in both of those areas. The Council is scheduled to hear this on April 23, 2001. I would like to go over first our recommendations then the content of the existing interim ordinances as currently in place and adopted on February 20 by the City Council then the potential options for other approaches particularly in the Midtown area that the Council did ask us to look at and then also some comments on the Staff report that is in front of you tonight. To begin with, the recommendations as summarized in the Staff report are to extend both the interim ordinances for the Midtown Shopping District and for the Charleston Center with the modification that the definition of neighborhood serving use be deleted from both of those ordinances. We are recommending the deletion of that definition because it at this point is incomplete. It is not quantified and is not necessarily helpful to a decision-maker trying to determine if a use is neighborhood serving or not. There is an option to that deletion that includes modification that I’ll present towards the end of the presentation and open that up for your discussion but that is currently our recommendation, for deletion of that definition. We are also recommending adoption of the P-Shopping District for the Midtown area. The P-Shopping District is Pedestrian Shopping District. It is a current zoning district, it is in 18.47 of the ordinance currently and I will talk a little bit more about that later in the presentation but we are City of Palo Alto 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 recommending that for the Midtown Shopping area. Both of the interim ordinances would be in place until March 2, 2003. They would then be replaced by whatever is developed as part of the Zoning Ordinance update overall. That effort is scheduled to be completed by roughly the same date. So the interim ordinances would sunset on March 2, 2003 and then the permanent ordinances would take their place. Those are currently being discussed as part of the Zoning Ordinance update. The interim ordinance that is currently in place for the Midtown Shopping District requires that a conditional use permit be obtained for any new office use on the ground floor. There is an exception to that when an existing non-conforming use changes ownership only that that does not require a conditional use permit. Any other new office use does require a conditional use permit if it is on the ground floor. There is the inclusion of a third finding for the conditional use permit that is in addition to the two findings that are currently in the Zoning Ordinance under Chapter 18.90. The third finding requires that the office use be an enhancement or help strengthen the Midtown Shopping District and that it would not detract fi:om or diminish the retail character of the District. So in order to obtain the conditional use permit the applicant would have to show that they meet all three of the conditional use permit findings. There is an inclusion again of the neighborhood serving use, which we are recommending deletion of. Basically that definition states that the use serves primarily individuals and households rather .than businesses, that it is designed in a pedestrian oriented manner and that people travel to it rather than the provider of the goods traveling away from the site. There is currently an exemption in the ordinance for addresses 689, 711,719 and 721 Colorado Avenue. We recommend that those exemptions be continued primarily because they are not on the major street, they are on side streets, and they do not relate to the core or the focal point of the District. They are more removed in their location. So we are recommending that those exemptions be continued. The current interim ordinance now in place for the Charleston Center has basically seven primary points. First, that there is maximum 7,850 square feet of 0ffice use allowed in the Center, that no individual office be allowed to exceed 2,500 square feet, and that the allowed office uses on the ground floor consist of medical offices, professional offices, travel agencies and insurance agencies. That there is again the same neighborhood serving definition included in the ordinance that we are recommending deletion of. That there is a certification process that allows the Director of Planning and Community Environment to verify that any new ground floor office use is in fact neighborhood serving. That is an administrative procedure where the applicant would bring forward documentation that they are primarily neighborhood serving and then the Director would verify that and allow the use if they were truly neighborhood serving to locate in the Center. There is a possible conditional use permit if an applicant wants to exceed the 2,500 square feet maximum for an individual office. The conditional use permit would hav.e the same third finding as referenced in the Midtown area and could only be approved if the overall square footage in the Center did not exceed the 7,850 square feet for office use. Just to reiterate, our recommendations before I go into options, we recommend that both of these interim ordinances, for the Midtown District and Charleston Center, be extended with the deletion of the neighborhood serving use definition and the adoption of the pedestrian overlay district for the Midtown area. City of Palo Alto 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 4! 42 43 44 45 46 There is an alternative approach that the City Council asked us to look at and that is to apply the ground floor restrictions that are currently in place Downtown in some sort of a modified form to the Midtown area. Also to look at the Downtown ground floor restrictions to see how successful they have been over the last ten years or so. Basically the ground floor restrictions which are found in Section 18.50 of the Municipal Code limit the new uses on the ground floor of specific areas in the Downtown. Those uses are limited to restaurants, hotels, personal services, retail ~ uses, theater, travel agencies and then entrances and lobbies to the non-ground floor uses. It does allow for 25% of the ground floor space to be occupied by an office use if that office use is not on a street-facing fagade. That means either a main street or a side street-facing faqade. There is the opportunity for specific conditional uses to be permitted on the ground floor other than those that I just listed if a third conditional use permit finding is approved. Those uses would be business and trade schools, commercial recreation, daycare, general business services. The third finding that needs to be approved states that there is something .unique about the physical space on the ground floor that lends itself especially well to those types of uses, commercial, recreation, or other types of uses. There has to be something unique about that physical space in order to approve the use permit. There is the fight to an automatic exception allowing office use on the ground floor if two criteria are met. The first is that there is a 5% vacancy in the District overall and second that the individual space asking for the exception has been vacant for at least six months. So if both of those conditions are present an exception is automatically granted. That exception is good for up to five years. Specifically in the Downtown area the Council had asked us to look at how well this is working. We looked at how many parcels were addressed in the Downtown Ground Floor District. There are about 234 parcels. 90 of those have retail uses on the ground floor, 64 have restaurants, 20 have personal services, 17 are used for parking primarily administered by the City of Palo Alto, 14 offices are located on the ground floor, 11 spaces are vacant, 9 have general business services, 5 have financial services, 2 are residences, there is one government office, the Development Center across the street, and there is one theater. There are also 29 entrances or lobbies to above ground uses. Currently there are no un-permifted uses on the ground floor. The 14 office spaces and the 5 financial services were devoted to those uses when the Ground Floor Combining District was attached to the Downtown area. They may have changed office type or financial institution but they were in those uses at the time the Ground Floor Combining District was adopted. In order to modify that Ground Floor District to address Midtown in particular several changes would need to be made to the Neighborhood Commercial Zone. The first of those would be to change the allowed uses in the Commercial Zone such that office uses are only permitted above ground level. The other permitted and conditionally permitted uses would remain as currently. stated. That would assure that they are neighborhood commercial in character. In other words, we wouldn’t be allowing hotels or theaters such as are allowed Downtown in a Neighborhood Commercial Zone. It Would be those other permitted uses and other conditionally permitted uses that are currently allowed in Neighborhood Commercial Zones. In addition all references to residential uses would be removed since currently in the Zoning Ordinance residential uses are not permitted in either Midtown or Charleston Center. So we would be removing those cross- references to residential use. There would be the possibility of including an exception process City of Palo Alto 5 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 1 that would be modeled again after the Downtown exception process with a couple of differences. 2 First of all there would be a 5% vacancy rate for the overall district and an individual space 3 vacancy rate of six months or longer. However, if that 5% vacancy rate was created by one 4 building only, there are several buildings in the District that by themselves equal more than 5% 5 of the square footage of the District, if that were to be the case then the building would have to 6 be vacant for 12 months or longer rather than for six months. Then also, the exception would 7 still be good for five years however, we would make it clear that only one exception would be 8 granted per space. Currently in the Downtown area the code is silent on that issue. There is an 9 option to this exception approach, which would require a conditional use permit to be applied for if these two criteria are met. So in other words, if you have the 5% vacancy rate district-wide and an individual vacancy for six months or more you would then be eligible to apply for a condition use permit to locate a use otherwise not permitted on the ground floor. In addition, the non-conforming use section could be modified which would state that only existing non-conforming uses could continue or only those that transfer ownership exclusively could continue. So if it is one travel agent to another travel agent it could remain. However, in all other cases as non-conforming uses vacate a site they would have to be replaced with a conforming use. Then, again, the pedestrian shopping combining district regulations could be attached to Midtown, which would ensure that as physical changes are made as businesses remodel and upgrade their physical environment, those changes would need to include display windows, arcades, recessed entryways, landscaping and design features and the minimal disruption of pedestrian ways for either parking or access. Finally, in general I want to make a couple of comments on the report. As you read through it you probably noticed that as Attachments, the notes from the businesses owner and property owner meetings were referenced as public meetings. I did want to make clear that the attendees of those meetings were invited. They were not public meetings in that this is a public meeting, or our Council meetings are public. Those meetings were specifically targeted for property owners and business owners and they were invited to attend those meetings. Likewise meetings were referenced as being held with the Midtown Residence Association. Those meetings were attended by other neighborhood association representatives not just Midtown. So there were representatives of neighborhood associations throughout the City, primarily south Palo Alto and mid Palo Alto. There is a correction on page 7 of the report. On the first number three where it says, "In all cases when an existing non-conforming business vacated a site the new use would have to be a non-conforming use." That should actually read: would have to be a conforming use. Number two right above that, "If an existing business or practice is transferred to a new owner all together the new enterprise could continue as the same non-conforming use." Just to. make clear that it couldn’t be another type of non-conforming use. It would have to be the same non-conforming use. There is an alternative that I mentioned earlier to deleting the neighborhood serving use definition and rather than deleting it modifying it in some manner. It has been suggested that perhaps a modification that used the Comprehensive Plan definition of neighborhood center or City of Palo Alto 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 something similar to that could be used. That is an option for you to discuss and we would be happy to discuss that with you during the comment period. Many neighborhood associations have asked us to notify them of land use changes. We can certainly do that. We would prefer to make that part of our practices and procedures rather than written into any ordinance. With the exception of distance requirements, the ordinance doesn’t usually address who is notified of different application types. So we would definitely do that but as part of our practices and procedures rather than part of the ordinance. Finally, just to reiterate our recommendations. It would be to extend the interim ordinances for Midtown and Charleston with the deletion of the neighborhood serving use and to adopt pedestrian overlay requirements for Midtown. That concludes the Staff report. Commissioner Burr: Thank you. Commissioners, do you have questions for Staff prior to hearing public comments? Kathy. Commissioner Schmidt: A clarification. The recommendation to delete the definition of neighborhood use means purely the definition and Neighborhood Use as described here would still apply, is that correct? Ms. Grote: It would mean the written definition that is part of the interim ordinance now would be deleted. There would still be the third use permit finding which talks about strengthening the neighborhood character and the retail nature of the center or the district. We would still have that. The other types of uses, yes, that are referenced in the text of the report and that we have been talking about would still be used as a way to evaluate whether something is neighborhood serving or not. But the definition itself would be deleted. Commissioner Schmidt: Okay, thank you. Commissioner Burt: Phyllis. Commissioner Cassel: You have in here in a five-year limit on change of use when you make an exception. I don’t quite understand that because the exception to the building is still going to be an exception to the building. I don’t understand how a business would opt into a space that it knows it is going to be out of in five years. Ms. Grote: That five year timeframe was originally attached in order to address certain market conditions or certain conditions in an area, knowing that the conditions would then most likely change again. If the real intent is to.have retail uses on the ground floor of any area, then the five year limitation allows for other uses temporarily if the market changes. Five years would be enough to allow a business to operate in that shorter period of time and then revert back to retail. Commissioner Cassel: That means that those businesses have to move out of that area and your economic consultants here indicate that a business would move into an area with the idea that it was apt to move out in five years. City of Palo Alto 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32- 33 34 35 36 37 38 39 40 41 42 43 44 45 Ms. Grote: It has worked in the Downtown. There have been very few periods of time where the 5% vacancy rate has been met or reached in Downtown, but yes, that would be the criteria. Commissioner Burr: Bonnie. Commissioner Packer: In the Charleston Ordinance you are recommending a percent of the total square footage to use as office space. I wondered if you could address whether or not that would work in Midtown. And related to that, if there are any studies or guides that Planners use.in terms of how much non-retail space is needed an area to support the retail business, retail restaurant, those kinds of things. Ms. Grote: Yes, thanks. First of all, we recommended a different approach in Charleston Center because it is owned by one property owner and managed by one property manager. To regulate office uses was much simpler in Charleston. We used the Town & Country model, which allows a 15% office component for that center because it too is owned and managed by one property owner. So we used that as a more similar situation for Charleston. That accounts for a large part of the difference between the two areas discussed tonight. For Midtown it would be much harder to do since there are many, many owners. I apologize for this, I neglected to introduce Susan Arpan who is our Economic Resources Planning Manager. We worked on this report jointly and this has been a joint effort between the two divisions. She may be able to comment on the retail character and how much retail and office use makes for a good relationship. Certainly in Charleston we heard from the property owner and business owners that the current mix seems to be working well. That the retail business owners feel that some of the their daily customer base comes from those people who come to work in those business offices. So there was a relationship there that they wanted to maintain. Susan may be able to comment further on that. Susan Arpan, Economic Resources Planning Manager: Good evening. We did run some numbers on the amount of retail space that is in the Midtown area and also the number of offices that are there. I didn’t actually run a number on the percentage although I could give you one. There seems to be a very good balance in the Midtown area at the present time. We also modeled what we were doing in the Charleston Center after what was done at Town & Country where there is also an 85% retail to 15% office ratio in place there. If you would like specifics I can run some numbers while we are sitting here. Commissioner Burt: Susan, how many square feet are at Charleston? Ms. Arpan: The property owner told us that it was 50,000 square feet. Then after we took a look at the property profiles we found it was a little bit less. We c.an get that number for you, it is about 45,000 square feet though. In the Midtown area when you take a look at the retail on Colorado and the retail on Middlefield Road that we are including there is about 121,000 square feet. Commissioner Burr: Phyllis had asked earlier whether there were businesses that would consider. leases that were five years or less for offices, if I understood the question correctly. Are you City of Palo Alto 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2o 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 aware of whether office space in Palo Alto and these areas is being leased for periods of five years or less in certain circumstances? Ms. Arpan: That does occur. Businesses like to get as long a term lease as they can get. To have options beyond that, I think it is more difficult to lease space when it is five years or less. Commissioner Burr: Thank you. Commissioner Cassel: Let me do a follow up on that. Businesses take a five years lease, it is a very standard lease, however, the question here is that you cannot do a re-lease. The hope is that you would re-lease based on that your business has gone well and they are still there, etc. What you are doing is saying, you can have the lease for five years but you can’t lease again. So your business is going to have to move even if you are successful. Ms. Wvnne Furth, Senior Assistant City Attorney: This ordinance assumes that the spaces that are subject to it should be in retail and that for the health of that street or shopping area they should be retail uses. It is a hardship exception, essentially, that says if the situation is so grave that retail uses are unavailable and all you can find is office tenants then we think it is appropriate to make an exception but we don’t want those exceptions to then hold over though the next cycle when retail enterprises won’t be able to find space in the areas reserved for them. So you would only do it if you believe that this space should be retail. Ms. Grote: We would also like to point out that that’s only the case if you take the option of adapting or using the ground floor restrictions that are presently Downtown. So with the conditional use approach that is in the current ordinance that five year period.is not applicable. That only shows up in the option. Ms. Furth: I think probably because this is a hardship exception and there are always lots of complicated facts that we can’t know, by putting a five year limit on it, I think they were consciously discouraging shifts in this direction. They were trying to discourage what was going to be essentially a long term shift that might pay itself back so quickly that considerable vacancy period would make economic sense anyway. Commissioner Burr: Bonnie. Commissioner Packer: Did you consider a hybrid of using the Downtown Ground Floor rules and a conditional use permit process instead of using the vacancy, the 5% and the five years, as a trigger for evaluating whether an exception can be made for office on ground floor? Ms. Grote: We did consider something like it. What we ended up recommending was that we have the conditional use permit as the initial opportunity. If someone cannot rent their space to a retail user that they would then have the opportunity to apply for the conditional use permit and make the case that they are in fact enhancing the area and not detracting from the retail character of it. Then’ there is the modification in the option; the modification that we looked at, was for the exception process to include the provision that if that if those criteria are met then you can apply for a conditional use permit to locate your non-retail or non-personal service use on the ground City of Palo Alto 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 floor. We didn’t specifically look a the hybrid that you just mentioned but that is another possibility. Commissioner Burt: When is this scheduled to return to Council? Ms. Grote: April 23, 2001 Commissioner Burt: Phyllis. Commissioner Cassel: In the Downtown District you say we now have 90 businesses in retail. How many retail businesses did we have when the ordinance started and at some interim point in the middle? What has been the shift? Ms. Grote: Ed was just mentioning that the ground floor regulations on!y apply to certain streets Downtown. I do have a map and I can show that to you but it is not the entire Downtown area. As far as the uses, we don’t have a record of how many uses have gone from retail to restaurant or how they have shifted amongst the permitted uses themselves. Along with those 90 uses that are retail there are also 64 restaurants, there are also other types of permitted uses that I listed. I can look those up again. There are only 14 office uses and five financial institutions. So 19 uses that weren’t permitted at the time, that were existing non-conforming, those uses are still existing non-conforming. They haven’t increased. So we haven’t lost permitted uses. We haven’t lost retail or restaurants or other permitted uses. Commissioner Burr: Any other questions before hdaring from the public? Ms. Furth: I just have one additional comment. I’m not sure I was clear as to which alternatives you were asking if we’d studied with respect to when should offices be allowed in retail spaces. The Ground Floor Downtown triggers it on vacancies. Somebody asked if we considered conditional use permits. The existing ordinance that we prepared, that the Council adopted on an interim basis, does have that provision. It has no vacancy triggers. It simply says that if you have space on a ground floor that you believe should be office you can apply for a conditional use permit and you have to make the three basic conditional use permit findings and then you would have to make an additional finding that having this space as office rather than retail would strengthen Midtown as a shopping district rather than weaken it. Commissioner Burr: Bonnie. Commissioner Packer: Maybe I’m not quite understanding. In the revised ordinance that is before us now, for Midtown it appears as though the option for conditional use permit application for the ground floor office is not there. Ms. Furth: That’s right. It has been removed. Commissioner Packer: Okay, so what I asked was whether you considered having that in there just to give more flexibility. Otherwise it would seem that for somebody who really wants to do office they are going to keep it vacant for six months in order to get their office in there. City of Palo Alto 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Ms. Furth: Staff’s original proposal was to say that a conditional use permit is an appropriate tool because it is so case specific and fact specific to decide if ground floor spaces at Midtown should be converted to retail. But it provides enough opportunity to consider a full range of facts. There are those who believe that conditional use permits are not an effective way of regulating land use. So we were asked to think about other approaches as well. The principle other approach that was suggest was the trigger mechanism for Downtown. The interesting thing about the trigger mechanism for Downtown is it seems to be automatic once you establish there is a vacancy rate of 5% and that your particular building has not been rented for six months then you are entitled to it as a right. There isn’t any discretion. So an interesting question is when you have a much smaller pool of buildings how do you make that work in an effective way also. Ms. Grote: Also if it helps to clarify, the two interim ordinances are Attachments A and B. Those do still have the conditional use permit process included. Attachment H is the option, which talks about the prohibition of ground floor office uses. So Attachment H is an option to either A or B. Commissioner Burt: If we were to consider this Downtown option where we have a trigger of a 5% vacancy and it has been available for six months or more that seems like in Downtown where we have a great deal of square footage something that is not open to market manipulations, shall we say. But in a smaller center is there something that would prevent a property owner from merely asking for a lease rate that is not viable for any retail and thereby triggering the vacancy of 5% for six months and then qualifying for the exception merely on the basis of essentially the property having been technically available but not for an economically viable rate? Is there something that prevents a property owner from doing that? Ms. Grote: There isn’t anything that regulates rental rates that the City has recommended at this point. What we try to do and how we tried to address that question is that. for the larger businesses, the larger square footages, we said if only one business creates the 5% vacancy that they in fact have to be vacant for 12 months or longer, not the six months. So it is a longer period of time. However, that doesn’t prevent three or four or five smaller uses from being vacant for six months creating the 5% vacancy rate overall and then they all become eligible for an exception. The way we tried to address that is that you could require a conditional use permit then to be applied for. So if all five of those mid-sized businesses have been vacant for six months they could then come in and apply for a conditional use permit and try to make the case that their proposed uses were in’fact neighborhood serving. So’we tried to address it that way rather than regulating rental rates. Commissioner Burt: Susan. Ms. Arpan: The 5% basically represents about 6,000 square feet and in the Midtown area there are about eight properties that are over 6,000 square feet. There are about three properties that have much more square footage. Long’s is about 12,000 square feet or a little bit more. Knowhere Stores about 11,000 plus. Co-Op is 18,647 and Safeway is over 18,000. So those four properties are the really large properties that made us take another look and say that one City of Palo Alto ’ 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 property can’t trigger this, then it leaves us with only four other properties that are over 6,000 square feet that would trigger by themselves the 5% vacancy rate. Commissioner Burt: Charleston Center is owned by one property owner. So does this apply to a single property owner that would have to wait 12 months or a business? Ms. Grote: We didn’t actually apply the option to Charleston. So it wouldn’t be applicable there. Commissioner Burt: One more question. Commissioner Packer: This is related to the definition area. It might be a little bit beyond what is fight before us. One of the issues is have we ever looked at defining retail as neighborhood serving? The neighborhood serving definition that you are looking at is focusing only on office and there is retail and there is retail. Something to put somewhere in the Zoning Ordinance update that we may want to consider in terms of talking about neighborhood serving maybe we also have to have a process to evaluate whether retail is neighborhood serving. Ms. Furth: An interesting thing about the existing definition of retail is that it basically concentrates on the distinction between business to household versus business to business. It says that retail basically is a use that provides retail sale, rental, service, etc., primarily intended for consumer or household use. So it doesn’t focus on necessarily the neighborhood but it does focus on residential customers rather than other businesses back in the days when residences weren’t businesses as often. Mr. Gawf: If I can make one other clarification on the vacancy issue. As I understand it if there is a large space vacant, let’s say 11,000 square foot area building, and a second building or use space of 1,000 square feet is vacant so the six-month rule applies not the one-year rule. So if there was just one use creating the vacancy it requires the one year wait but if there happens to be another vacancy in the area then you fall into the six month rule rather than the 12 month rule. I just wanted to make sure that was clear. Commissioner Burt: Thank you, Ed. I think at this time we’d like to move forward to the public comments. We have about a dozen speakers so far. Each speaker will be limited to five minutes. The first speaker is Louise Herring to be followed by Deborah Ju to be followed by Ron Wolf. Ms. Louise Herring, 3945 Nelson Drive, Palo Alto: I moved here in November of 1978. The Charleston Shopping Center is one long block away and my husband and I felt that we had found the perfect location for meeting most day-to-day needs by walking when we purchased our home. Charleston Center had a good drug store with a post office, a hardware store with house wares, a barbershop, a bank, a grocery, a florist, Nick’s Ice Cream, a liquor store and a laundry mat. But things have changed. We have lost the drug store and the post office in favor of a dental office. We have lost the bank in a favor of plumbing fixtures store. We have lost the hardware and house ware store in favor of sick rooms and orthopedic supplies. The net effect of these changes is that we now drive two and a half miles or more for prescription drugs, for City of Palo Alto 12 1 banking, for house wares and hardware, for mailing packages. These are all things that we do 2 frequently. In contrast we patronize each of the new tenants in the Charleston Center once a year 3 or less. Since this Commission is concerned with getting people out of cars and developing a 4 walkable village concept I believe that just using the words "neighborhood serving retail" in 5 pending legislation might fall short. For example, is a retail jewelry store or a piano store or a 6 candy store neighborhood serving? I believe that it is going to be necessary to define more 7 clearly what mix of day-to-day services we ought to have in each of our neighborhood centers. 8 Then require that each center devote a high proportion of the floor space to the needed services. 9 Each center could then also have a low proportion like maybe 25% of less essential services or 10 dental or medical offices. A cultural city like Palo Alto does want specialty shops and offices but they should not be allowed to crowd out and destrqy the usefulness of our neighborhood hubs for the majority of the residents. Thank you. Commissioner Burr: Thank you. Deborah Ju. 11 12 13 14 15 16 Ms. Deborah Ju, Palo Alto: Good evening. I thought Louise’s letter was excellent. I live in 17 Charleston Meadows and I’m at the Charleston Center most every day to shop at Piazza’s. 18 Charleston has a terrible traffic problem. For the people in the neighborhoods along Charleston 19 being able to walk to services that they need on a day-to-day basis will greatly enhance the 20 .quality of our lives and would help to lessen the traffic problems. I think that this is goal that is 21 expressed throughout the Comp Plan and we have an opportunity here to really try to make our 22 center that is designated as a neighborhood center in the Comp Plan a truly neighborhood serving 23 retail center. Right now what we have there is a coffee shop, a grocery store, and an ice.cream 24 store and really nothing else that has to do with the day-to-day lives of the people in the 25 neighborhoods. It is a real lost opportunity. We don’t need two insurance agencies there. There 26 is a huge retail space for orthopedic supplies. These do not serve the day-to-day needs of the 27 majority of the people that live in the neighborhoods. I do agree with Louise that that language 28 needs to be worked on, it needs to be strengthened otherwise we are not going to end up with the 29 intended results. I just want to echo her. We used to have services there, we used to have a post 30 office, we used to have a place where you could mail parcels, we used to have a card shop/gift 31 shop. All of these things are sorely missed by the people in our neighborhood. I note that in the 32 processes have been divergent for Midtown and Charleston. While I appreciate that there is an 33 effort made to work on the Charleston Center I regret that there wasn’t neighborhood outreach as 34 there was in Midtown. Talking to the property owner of that shopping center is not a good. way 35 to get information. For example, his sense as to whether the mix works well or not I think is of 36 limited value. I worry about the economic health of the small businesses that we do have there 37 like the caf~. They need foot traffic. Does a small insurance agency bring in foot traffic like a 38 retail store would? Regardless of what the owner of that plaza says I really don’t think that it’s 39 credible that it does. If you want to make sure that the retail businesses that are there stay 40 healthy and continue to serve the neighborhood you need to worry about that. We are comparing 41 Charleston Center to Town & Country in working out this language and I don’t think that is a 42 good idea. Town & Country is much bigger than Charleston Center. So with so many more 43 shops you can have a lot that is neighborhood serving and still have a lot that is not. You end up 44 with a good number that is dedicated to the day-to-day needs of the people. At Charleston 45 Center there are so few stores there that siphoning off the same percentage that you would for 46 Town &Country ends up with a different result. So I think we need to look at Charleston Center City of Palo Alto 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 as a unique place. It is very small, it serves a lot of neighborhoods, it is a really important resource and we need to make sure that it serves the day-to-day needs of the people in those neighborhoods. Commissioner Burt: I have a question. The Staff report said that the existing office uses in the Charleston Center have been there for some time and have contributed to the economic vitality of the Center over time. You and the last speaker seem to be disagreeing with that. Is that correct? Ms. Ju: I disagree with that. I don’t think that that’s true. I don’t know anybody in the neighborhood that patronizes those businesses so they are not serving us. Nor do they generate a lot of foot traffic to benefit the businesses that are there. So I’m not sure how you could say they do benefit that center or the neighborhood. Commissioner Burr: Phyllis. Commissioner Cassel: Do you know why the card shop left? Do you know why the post office left? Ms. Ju: No. Commissioner Cassel: What reasons did they leave? Ms. Ju: I don’t know that. Commissioner Burt: Thank you. Commissioner Cassel: Later on when other speakers speak they can probably answer that. Commissioner Burt: by Annette Ashton. you. We will answer that in order, thank you, Phyllis. Ron Wolf to be followed If the speakers would continue to state their names and addresses, thank Mr. Ron Wolf, 745 San Carlos Court, Palo Alto: I’m the Business and Public Relations Chair of ttie Midtown Residents Association and a founding member. Annette, our Chair, is passing out to you the goals of the Midtown Residents Association. I’m sure you all have seen this list before because we have been in front of you before. The important thing about the list is to focus on neighborhood serving needs is a belief that a vital local shopping area is an important part of life in Midtown Palo Alto and throughout Palo Alto. These goals have been consistent . goals of the Residents Association since 1994. That is quite a long time in these turbulent times and I hope that you will respect that and understand that we are very proud of this consistent goal. We have been part of the shopping area. We have worked closely with many businesses in the area, Safeway, Starbucks, with Tom Foy who is sitting behind me. We are very supportive of a vital retail shopping area. When we started to see a dramatic shift to commercial office space use which accelerated quite a bit last summer with the conversion of the Sherba’s Store and turning it into a closed door brokerage. Nobody in the neighborhood knows any these City of Palo Alto 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 people and they don’t frequent any of the businesses I’ve asked about. We began to be fearful for the vitality of the retail shopping area because retail supports other retail by generating foot traffic into the area. We were very encouraged therefore when we met with the City Manager last fall and found out that he was also very interested in this issue and was very supportive of our coming forward and creating some momentum and working with Council to define and ordinance that would help retail to stay in the area. We all know the economics. There is no way that you can run a normal retail business. I don’t know very much about jewelry stores or businesses like that. But I know a lot about normal retail because my family business was a hardware business. There is no way that a normal retail can sustain a rent of $7.00 per square foot and we know that this marketplace is commanding rents for commercial office space far in excess of that. We are not coming forward and asking for rent control that would be a pretty silly thing to do in this community. We are asking for protections that will help retail businesses remain in the area so that there is a critical mass of retail supporting one another. I’m very concerned that we are about to slip away from that. If one more business converts to office space that we will be over the line and retail will no longer be at all viable in Midtown. I’m not going to speak too much to the specifics here. Annette has a presentation that is more oriented to that. I do want to say that I think it is great that we are before the Planning Commission, this is the proper process for something like this. This is the proper way to consider this. We first worked with Council partly because it seemed likethere was an emergency. There was an emergency and the umbrella that the interim ordinance has put over the retail area has been a very welcome umbrella. One important thing in any ordinance that is passed is that business owners and property owners have very clear guidelines for what is in and what’s out. We are concerned with the ordinance as proposed and is currently on the books that it is not clear enough. That is one of the reasons that we support an adoption of a possibly modified form of the Downtown ordinance. It is clear in its writing, it is very clear in its guidelines and it is clear in its practices having something that the City has practiced on for many years. We are less positive about the interim ordinance as currently defined. However, I will say that it is certainly much, much better than not having an ordinance at all. The other comment that I’ll make is that the neighborhood serving definition in some form I think is an important step to take. I would like to see it taken in this ordinance. There is a lot of work to do in determining what is neighborhood serving and what’s not. You can find people who will say having a pizza place is neighborhood serving and having a candy store isn’t. Everybody has their own kind of distinctions here. It is important that it take a stab at defining neighborhood serving and we think it should be in there. Thank you. Commissioner Burt: Thank you. Annette Ashton to be followed by Lynn Chiapella. Ms. Annette Ashton, 2747 Bryant Street, Palo Alto: Good evening. I’m Chairman of the Midtown Residents Association. Thank you for spending the time to review this ordinance and give us your feedback. Thanks to you Lisa for your additional comments. This is urgent for us. Midtown has six properties in transition, several in pivotal locations, the Harmony Building, Co- Op, although we hear it might be Walgreen’s but without the correct zoning we fear for this location. Best Video is split into two locations, 1,300 square feet, Gate Cleaners is moving across the isle to Larry Wells who will be vacating 800 square feet, subdividing the property with another 1,000 square feet, Victoria Emmons just changed hands. This is serious and we are concerned about the future of retail in Midtown. To this end we feel the better option is Staff City of Palo Alto 15 1 recommendation three, that the City of Palo Alto adopts a ground floor restriction specifically 2 designed for Midtown. It is imperative to add, however, a conditional use permit for offices. 3 We are a little confused about the vacancy rate and the comments before me speak to this. We 4 feel that the offices must be neighborhood serving and certified as stated in the original 5 ordinance by the City. We do absolutely need a definition of neighborhood serving. Perhaps the 6 one that Millie Davis of Charleston Meadow, page L-11 of the Comp Plan would serve with the 7 additional comment: a neighborhood serving usefor an establishment is also one for which a 8 majority of its customers and clients physically enter the establishment and which serves the 9 needs of a significant number of nearby neighbors. The exception process must include a public 10 hearing. We also, as Lisa stated earlier, request the appropriate notification to the neighbors and 11 to the Midtown Residents Association. We feel more broadly across the City that every 12 neighborhood association should be notified for key permits and changes of use in our centers. 13 We feel it is imperative at this time to require business licenses and a City business registry. 14 That part was explicitly highlighted by Commissioner Cassel with her excellent question. In 15 context Midtown is joined by citizens all over Palo Alto who are concerned about saving retail 16 and implementing the Comp Plan’s vision for the Center. Your commission has as a key mission 17 the requirement to develop and implement the Comp Plan. To this end, I’d like to highlight 18 several of the goals and program and policies that support our recommendation, I know two of 19 you have this ingrained in your memories since you designed the Comp Plan. I passed out the 20 key points that absolutely support retail only use in Midtown. I’ll let you read that and keep it 21 yourself. We feel as well, with the current Council Colleague Memo and the community interest 22 in the job/housing imbalance it is even more imperative to embrace the Ground Floor Retail 23 Ordinance, retail only no offices on the ground floor. I highlight one sentence from that 24 Colleagues Memo. The largest threat to our retail service is the demand for commercial offices 25 with a corresponding increase in jobs. As Chair of the Midtown Residents Association our 26 organization feels that the Ground Floor Ordinance with the modifications we suggested fully 27 supports our Residents Association vision so nicely stated by Ron Wolf, our Business and Public 28 Relations Manager. In closing, let’s focus on South Palo Alto’s vision for our neighborhood 29 centers as vibrant, diverse, walkable, retail centers. Then let’s move on to do the same for the 30 other neighborhood centers in our City. Thank you. 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Commissioner Burt: Annette, we have a question for you. Commissioner Cassel: You listed quite a list of spaces that are coming available. Does that make you fear for this 5% limit and the automatic trigger to allow people to move in other kinds of temporary uses? Ms. Ashton: We don’t have the experience to really understand that, Phyllis. I thank you very much for the question. Also, I think the point that was brought up earlier by one speaker actually Commissioner Burr highlights this, what happens if a property owner has artificially high rents for some period of time to drive the vacancy rate to the point where the City has to grant them some sort of hearing. So the vacancy is something that does concern us. There are a lot of properties right now that are up for rent. Commissioner Cassel: There have been a lot of properties in the last five to ten years that have been up for rent. City of Palo Alto 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Ms. Ashton: One point that I would like to make. We all look back to the 1990’s and we say gee, there were all these properties vacant. The market, the pharmacy and Bergman’s I was at the Co-Op closing on Saturday where they had the shareholders meeting. It was absolutely critical that the Co-Op has not changed to be a vital center any more and I look back to the 1990’s and I feel that the three major properties that disappeared did so because they didn’t keep up with the times. So when we look at that, it is not that there isn’t retail in Midtown, it is that we need the right kind of retail. Does that answer your question? Commissioner Burt: Thank you. Lynn Chiapella to be followed by Steve Schoper. Lynn Chiapella, 631 Colorado Avenue, Palo Alto: I don’t know about the Charleston Center, Phyllis, but I do know that Harmony Bakery’s rent was doubled and the little bakery can’t make it with a doubled rent. I do know that a large number of people came by for the Bergrnan site but could not afford the rent that was asked, such as Wild Bird and there was a nursery school. They could not afford the kind of rents that were being asked because at that time they were looking for office types of rent. Eventually they did get that. The building had no taxes, the taxes were practically zero, it was owned for 40 years, etc. So people can afford to sit on an empty building and wait for the money. That has happened in Midtown to a large degree on all those properties have been owned since the 1950’s by the same people. Bonnie’s question about the office needed to support retail in the Downtown in the Cal. Ave. area that specifically is a good point. However in neighborhood commercial it is not meant to be an area that office supports the retail. It is meant to be an area where the local residential supports the retail and it may or may not always work. I don’t know that. I do know that as long as you are converting to offices especially we have had three financials come in and take over 7,000-10,000 square feet in the last six months. That makes a very large difference in those shopping centers. It makes both of the shopping centers less viable on my side of the street, which is the south side. I know you received my comments about favoritism. I hope you certainly saw that I was being ironic in recommending that you approve more offices in Midtown. As someone pointed out you may have not caught that. I hope I was very clear. I think the point I am making is if you decide you are going to have special status for certain people that are politically powerful or whatever the reason was that was chosen for those three properties, I don’t know the reasons, but I do know that contrary to the Attachments that 689 Colorado was designed as a duplex in the transition from neighborhood commercial to residential. I do know that 721 was an open planned bank which was perfect for a restaurant and through loops and this and that was converted to an office use. I don’t know much about the 711 and 719 except that they have gotten some exceptions to expand internally their offices by moving garbage into the landscape area and putting things outside that used to be inside only a year or two ago. So I am recommending that you create a. level playing field by Ground Level Retail and eliminate page 4, paragraph G of Ordinance 4685, which says we will have special favors. These are no doubt economic favors. You are in a position of granting economic favors by preferring office over retail. Commissioner Schink isn’t here but we also know that Mark Cruznet’s office has been an office far longer than that office at 721. We also know that Tom Foy’s office who requested that same special favor has been there for 40 years. So if you are going to be granting special favors you should be granting them to City of Palo Alto 17 1 2 3 4 5 6 7 8 9 10 Coldwell Banker. You should grant it to everybody who has been there longer. This is really a very unfair and biased proposition to grant special favors. The second area that I am concerned about is the Comp Plan and that you do eliminate neighborhood serving use because I think we need a strong definition. You are probably right, retail maybe needs a definition too. That part I hadn’t thought about and it is a good point to think about. The small business owners, I feel, honestly weren’t consulted or included at all. You can’t invite the property owner who controls your daily life and expect a small business owner to speak up honestly and fairly. I do not believe they were honestly and fairly ever consulted. They have told me this in previous meetings. They can’t sit with their landlord and say this, this and this. So this group has been completely excluded from any of this process as far as I know. So I will ask that you support the pedestrian shopping combining district which I thought was a very good idea. I ask that you support the modified Ground Floor Combining District. I thought that that was a good compromise that was thought up by Staff. I don’t know why you want to throw out residential on the second floor. It doesn’t make sense to me. Commissioner Burt: Thank you. Steve Schoper to be followed by John Abraham. 11 12 13 14 15 16 17 18 19 Mr. Steve Schaper, Stanford Nissan, 3001 E1 Camino Real, Palo Alto: I live in Los Altos and I 20 own Stanford Nissan. I was raised in Palo Alto. I remember having buses in Palo Alto and two 21 elementary schools. I am speaking as a tenant. I can speak first hand of what has actually 22 happening. There is no question you have two diametrically opposed groups involved in this. 23 You have the property owners who are entitled to the best use which equates to the maximum 24 rent and you have retailers like myself who have lived here actively involved and it is a question 25 of economics. What is sure is, in my opinion, in negotiations if it doesn’t pencil out retail 26 doesn’t come back to a city once it leaves. Palo Alto can look around, my next door neighbor 27 used to be Mrs. Liticoat, of Liticoat Market in Downtown Palo Alto. What an appropriate place 28 for a market. Driving over here today there used to be Cardinal Cleaners right here on the 29 comer. Now it is a bank. I think it is time to look at the big picture of long term. I’m interested 30 to know that we really don’t have any permit process in this Town to tell us how many retail 31 businesses we have. How many we are losing? How many office are replacing retailers? We 32 have reasonable guesses and depending on whom you talk to they will say there isn’t a problem. 33 We haven’t converted that many Downtown. Well you can take the devil’s advocate and go the 34 other way. There is more involved here. I think you also have, once you decide to keep retail 35 which I hope you do, I think you have a memo from the Mayor and some City Council members 36 saying until we can settle some things let’s put a moratorium on this whole thing. Let’s figure 37 this out. IfMidtown and Charleston have a debate on what is going to be retail and trust me, 38 from a businessman’s standpoint ifI own this property I can certainly afford to have it vacant for 39 six months, trust me. The retumis that great. Five years from now reminds me of what 40 happened to school properties that we had in this Town that were converted to what? Homes. 41 They were deemed surplus. So five years from now when there might be a change in Staff and 42 someone comes here to argue their case under hardship it might be an office, it might be difficult 43 to say, well we have to leave. All I’m saying is this is real for me. This is something that is 44 happening. The landlords believe that office is their alternative and the return is just to great not 45 to pursue it. What we have to decide in this City is what do we want it to be. My concern is that 46 if we take the short-term notice and you lose retail it is not coming back. I’ll take my dealership City of Palo Alto 18 1 2 3 4 5 to a number of towns that would love to have my services and my revenue. So I see this memo that was handed to me and there were some great speakers before me who did a marvelous job. I certainly cannot elaborate on what they said, I think they said it best. But apart from the whole Town let’s take a deep breath, step back, see where we are. Where something that we did to the schools 15 years ago when we had a smaller City and more elementary schools than we do today. You can’t build them again. I appreciate your time. Finally, do some preliminary homework. Get the permits and find out what you really have in this Town before we know what we really lost. Again, thank you for your time. I’m sorry for the impromptu ness of my speech but I’m speaking as a person who gets to go up to bat very soon regarding this very issue. Apply it Citywide. Why do you have to discriminate against me, I’m south of Page Mill. I’d like to have that for the whole City. Thank you very much. Commissioner Burt: Thank you. John Abraham to be followed by Audrey Sullivan Jacob. 6 7 8 9 10 11 12 13 14 15 Mr. John K..Abraham, 736 Ellsworth Place, Palo Alto: I’m interested in retail certainly in 16 Midtown. The issue has gotten quite complicated to say the least. I would hope that you will all 17 keep in mind that the idea is to save retail. That is what we as residents are interested in. I 18 certainly feel that the response that has developed has gotten excessively bureaucratic at this 19 point. I’m rather dismayed at all the cumbersome machinery, complications and continual 20 development of interpretations, questionable definitions, enough so that it has become quite 21 difficult.to decide whether or not somebody’s project really fits in with the ordinance. I know 22 Mr. Rapp has asked for a three month time period in looking at the Co-Op property just to figure 23 out what the City would say about that property. So there is a lot to be said for simple. One of 24 the things that is not so simple is the conditional use permit (CUP). I object to a CUP on a 25 Couple of grounds. One, residents are not really a part of the process. We are invited to attend 26 the heating after the decision has been made to go ahead. Residents really don’t have a say so in 27 the nitty-gritty of the issue, is this particular project appropriate to the area. The second problem 28 is that the conditional use process does not consider at all the impact of a particular use on the 29 community. That’s what we are here for. This is why we are in this mess. We are losing the 30 retail uses that are so important to us and the conditional use process is more for the City. It 31 doesn’t do the residents much good. My suggestion is to take into account that for Midtown 32 there are actually two retail markets, properties less than 5,000 square feet and those that are over 33 5,000 square feet. In the past despite who has been interested and so forth, the smaller properties 34 have been able to take care of themselves. They rent pretty quickly, within a few weeks or a few 35 months and we know something about who is coming in. The larger properties are a different 36 marketplace. They sit there for years. We’ve got plenty of examples of that. It is a whole 37 different place. What I’m asking and suggesting is that you take account of this fact and give 38 retail an extra boost by asking to revert to retail for all property uses less than 5,000 square feet. 39 And, if you want to do these complicated conditions for the larger properties that would be 40 appropriate. But for the smaller properties we don’t have a market problem. We really have a 41 problem in allowing retail to compete in the market. That’s why I am asking for a very simple 42 change that would go in Section 1-8.41.050 among all the other regulations. Simply saying that 43 on Middlefield Road that all uses revert to retail when they come up for the next lease. I’m not 44 even sure that we should make exceptions for Colorado. Mr. Cobb’s building was a bank 45 already. I don’t understand why he doesn’t admit that. He’s grandfathered, he’s covered. I 46 don’t see what the problem is, including all of the stores in Midtown and allowing the City of Palo Alto 19 1 2 3 4 5 6 marketplace to work in favor of retail. It would involve an extra commitment to give retail first dibs on the smaller properties. Thank you very much. Commissioner Burr: Thank you. Audrey Sullivan Jacob to be followed by Roxy Rapp. Ms. Audrey Sullivan Jacob, 245 Lytton Avenue, Ste 300, Palo Alto: Good evening 7 Commissioners. I am a land use attorney with Lloyds~ Love, Hershberger & McClain. I’ve been 8 asked to represent Mr. Mark Cuznets who has sent you a letter dated March 23, 2001. I’m 9 honored tonight to be here this is my first appearance in Palo Alto. Prior to being affiliated with 10 Lloyds I practiced land use law in San Francisco for ten years, took a break to have my children 11 and I’m just getting back into practicing here in Palo Alto. So I look forward to future 12 presentations before you. On behalf of Mr. Kousnetz I am just going to highlight his letter to 13 you of March 23, 2001 and his request for an exemption from this ordinance. As you may know,. 14 Mr. Kousnetz purchased the building that had housed Harmony Bakery. He was in the middle of 15 this transaction in fact his deposit became non-refundable the day after the City Council 16 recommended that the Staff come back with a proposed interim ordinance. He purchased the 17 building under the assumption that office uses were permitted. That is what he did his 18 calculations on,. He paid value based on those assumptions. So I would argue for this location 19 which is 2750 Middlefield Road that an exemption be granted in the ordinance based on the three 20 following reasons. First, the history of use of the building. The building was built and designed 21 tobeabank. It was used as office for 20 ofits 27 years. I just want to say in response to one of 22 the other speakers that Harmony Bakery was evicted for non-payment of rent for a period of in 23 excess of 18 months. Secondly, the design of the building and the layout is not really suitable for 24 retail at this time. Finally, this is creating a financial hardship on the purchaser of the property 25 who did so prior to the enactment of the ordinance. I know that the City Council members and 26 the Mayor have circulated a memo that talks about creating an ordinance City-wide and in that 27 they do propose an exception in cases of financial hardship where a property owner might be in 28 the middle of a transaction. So I would ask you to consider that concept here. In addition, the 29 Staff has continued to encourage Mr. Kousnetz that he can use the conditional use process but 30 even that set of parameters is going to make it very difficult for him to lease the space as he’s 31 outlined in his letter. Alternatively to a fiat out exemption as has been granted to the properties 32 owned by Mr. Cobb, Mr. Kousnetz would request you to consider an exception to a situation so 33 that he could have office uses, as he indicated in his letter,, for up to 15 years. We think that he 34 would also consider a time period different than that if he could obtain an exception to get on his 35 feet financially after entering this transaction. Thank you for your time. 36 37 38 39 40 41 42 43 44 45 Commissioner Burt: Excuse me, I have a question. I believe you stated that Mr. Kousnetz’ deposit became non-refundable the day before Council acted. Ms. Sullivan Jacob: Actually the day after. His deposit became non-refundable on November 21st and Council referred this recommendation at its meeting on November 20th. Commissioner Burt: Mr. Kousnetz’ letter to us stated that Shortly after our deposit on the property became non-refundable a Palo Alto Daily article appeared suggesting a likelihood that certain uses in the CN Zoning might be disallowed. So this letter is saying that his deposit was City of Palo Alto 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 non-refundable before there was even discussion in the news, which I believe preceded the Council action. So I am just unclear as to which was the sequence. Ms. Sullivan Jacob: As far as I know, Mr. Kousnetz first became aware of it in the papers after November 21st that is according to his account. Commissioner Burr: Thank you. Mr. Rox¥ Rapp, P.O. Box 1672, Palo Alto: IfI had a tenant that didn’t pay rent for 18 months I want them to leave too. I’d like to talk about Midtown. If you go back eight years ago you had Midtown Pharmacy that vacated. You had Midtown Market that vacated. You had Bergman’s Department Store that vacated. Then I think a year or two after that the bank that was where Starbuck’s is went out and was vacant for three years. I know for sure that Midtown Market which now is Long’s was vacant for four years. Bergman’s which I purchased was vacant for four years. I think you have to keep that in mind in your decision. Especially if you look at Midtown today and how vital it is. It is a wonderful shopping area. I don’t know if you’ve seen this traffic report. Have you had access to the traffic report on the parking report? It was done by a consulting group I believe the City hired on March 28th. Commissioner Cassel: It came out today? Mr. Rapp: I guess it was just handed out at today’s meeting. I guess you haven’t seen it yet. Commissioner Cassel: No. Mr. Rapp: I’ll give it to you to look at. Basically it says the parking lots starting in the morning at 7:30 a.m. to 4:30 p.m. they range all the way from 76% full, at 4:30 to 91% full, at 2:30 they are 90% full. Another study showed that at 4:30 they are 94% full. So my point to you is to have successful retail, because I was in retail for 40 plus years, you have to have parking. Retail survives on its customer and traffic. If you don’t have the parking retail can’t survive. One of the things I want you to be careful about and what I’m telling you tonight is that we are full on the parking. I think that we have an opportunity coming up here with Co-Op that I really think you should wait on your decision and see what happens there. That is a large piece of property. It could be mixed use, it could be retail, it could be retail and housing. But it could be a great opportunity for Midtown. Let me give you an example. The Knowhere building which I own. I don’t own Knowhere. They have five full time employees on the ground floor. If they were to move out, let’s assume they were to move out, that floor space is big enough that I’ could put in three restaurants. If I were to do that it would hurt all the other retailers because the parking couldn’t support it. I would take away from Long’s, I would take away from the flower shop, . the camera shop, the coffee store, Starbucks. It would hurt the area. So I think you really need to study this well and be careful of your decision because you have such a great thing going down there. Believe me I don’t like Sherba’s either but it happened there. I would love to see those blinds open, it is ridiculous. I’m for retail, I believe in retail, but retail is tough. To look at retail and to find help it is tough. For retail to survive it takes a lot of hard work, long hours, dedication and to find a need and to fill it. It is really tough. Tom is here tonight and he will probably talk about his building being vacant. It was vacant for almost three years where City of Palo Alto 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Starbucks went. They are not pounding down the doors. I’m sure you guys are aware, we are in a recession and it is going to get worse. I have two big vacancies right Downtown Palo Alto right now where office space is. There is not a big demand for office space like there was. Thank you. Commissioner Burt: One question, Roxy. If we such a parking problem how for so long did Bergrnan’s and Midtown support their parking needs? Mr. Rapp: Good question because Bergman’s was a department store. It had a great coffee shop which I loved. I think if you go back in time, I lived on Ross Road and we had one car, mymom stayed home. She walked to Midtown and she shopped when my father worked at the shoe store. We didn’t have a lot of cars. The whole family didn’t have cars in those days. We had cars but we didn’t have as many cars as we have today. I don’t know how to really answer it. I can tell you this also, I think that to operate in those days it wasn’t as .expensive to run a business. Your insurance, your taxes, your lighting, your electricity, your salaries, what you pay an employee weren’t as high as today. So you didn’t need to do the volume of business. Do you follow me? Bergman’s didn’t need to do the volume, or the drug store didn’t need to do the volume, or the shoe repair shop, or the clothing store, or the sporting goods store didn’t need to do the volume of business to be able to survive. Where today it is volume. If you don’t do volume you can’t stay in the business. I think that is the answer. Commissioner Burr: Thank you. One more question from Bonnie. Commissioner Packer: Roxy, in addition to parking and getting volume what do you think could be done at Midtown to create the volume in order to support the retail so that those retail uses can stay? Mr. Rapp: A lot of things could be done. We as property owners hired, about two or three years ago, John Northway to do a study on our parking and the traffic and what we can do. Some of the things are to slow down Middlefield Road right there. It doesn’t create a great shopping district in front of there with those.cars zooming by. When I go to Mike’s to have lunch and I want to run over to Long’s I am taking my life in my hands to get across that street. It is akiller. I think that is one area. I think looking at creating an assessment district if that needs to be done like we did Downtown Palo Alto and double deck a parking garage because you do need more parking. I think Co-Op is a great opportunity. Maybe there could be underground parking for employees that work in that area. That would relieve some of the parking for customers. So I think all those things need to be studied. As.a matter of fact, that is what I would suggest is to have the City hire someone like John that has the background in that area and knows it really well and to study it better and come up with some solutions. Thank you. Commissioner Burt: Thank you. Mark Heyer to be followed by Tom Foy. Mr. Mark Heyer, 726 Marion, Palo Alto: I want to first concur with Roxy’s observations on what could be done for Midtown. Clearly parking is a serious, serious issue. On the other hand ’ there is one place in Midtown that doesn’t have a parking problem and that’s Co-Op and that’s why they aren’t there anymore. That’s why Bergrnan’s isn’t there anymore because they didn’t City of Palo Alto 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 have enough people there. Just to follow up with that idea, I think that what would draw people to Midtown is a key store. If Co-Op was Trader Joe’s you’d have plenty of people in Midtown. So the ideal for me would be, as Roxy suggested, underground parking, Trader Joe’s and restaurants on top. That would be a wonderful keystone for Midtown to bring people in and create people there. As it is now the traffic circulation is terrible. The parking is terrible. It is dangerous. It is too fast. If you want to put a roundabout in put one at Colorado and Middlefield to slow down the traffic coming down Middlefield in that area and create turn pockets and do the things that were discussed for Embarcadero and that would be a much better area. What I really came here to talk about specifically was just the vacancy rate issue. I want to focus on that for a second. I think that what is happening here is applying a percentage to such a small number of businesses as we have in Midtown yields statistical aberrations which we are seeing. You have to decide well, let’s create exceptions because one tenant could be bigger and one could be small and so things are going to revert and it gets very complicated and very difficult. Let me just suggest a different way of looking at it. One simpler way since we have a small number of businesses, we know how many there are and they are relatively stable, we just pick a number and say no application for an exception would be considered unless x number of businesses had been vacant in that area for x amount of time. So if five businesses had been vacant in there for six months or more or a year or more then you would allow a landlord to apply for an exception. I also agree with the previous speaker who suggested that I would say businesses under 6,000 square feet should just be set aside for retail, period, end. There should be no option for those to become office space. The larger properties, that’s up to negotiation. Those are my suggestions for tonight. Thank you. Commissioner Burt: Thank you. Tom Foy to be followed by Stephanie Munoz. Mr. Tom For, 2775 A Middlefield Road, Palo Alto: The A in the address is emphasized because it faces Colorado Avenue and I’ll get to that in a minute. Can I respond to your question about parking? I’ve been on this comer since 1964 so I feel like I really know quite a bit about Midtown. Mr. Bergrnan came over and knocked on my door the week prior to Thanksgiving and say, "It’s that time of year again, I don’t want to see any of your cars." He felt at the time his parking plus my parking was essential for him to make his year. So we cooperated on that on a long-term basis. In a sense here we have a bit of a problem with Starbucks, Midtown and the Knowhere store. As a matter of fact, we just agreed last week to kind of meet and hopefully have civilized people work Out problems. It is a little more difficult this time because there is certainly a lot of parking. Anyhow we are going to make the effort to do that. Again, Roxy has suggested already, but I want to reiterate that it wasn’t that long ago that Midtown was a war zone. It was awful. During that period of time I had Home Federal Savings & Loan who bought out by Cal Fed and they moved out over to California Avenue. For a period of time, about three plus years, that property was vacant. During that period of time I’d been talking with Starbucks but they moved very slowly. So I had ample opportunity to attempt to talk to other people regarding the space there. I have to tell you when a property is vacant, now you talk about some people killing a year, I don’t believe in that. I don’t think so at all. So we tried to look for people to come in and take our space. Granted the building was old and it needed a lot of work but nevertheless we really only had one persistent person and that was a used bookstore. They were really persistent. You’re right they couldn’t afford the space nor could I afford to have City of Palo Alto 23 1 2 3 4 5. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 them in the space. So we never went any place with that. A pizza parlor was kind of interested but didn’t have the zoning or the parking for that. So there were a few other things like that but by and large there wasn’t anybody knocking on the door for Tom Foy to start negotiations with them. We went to the Starbucks situation and we had to do a lot of remodeling which is going to bring me to the reason why I’m here. I’ve been at that location since 1964 and with the exception of a period of time, I think, this is where I am in the back of the building I encourage you all to go look at it because I’m really proud of the way we have upgraded that that’s to Cynthia at John Northway’s office. With the exception of probably a small pet store and a storage for some sprinkler systems that portion of the building has been an office area since that period of time. So I’m here to request an exemption for the same reasons that are outlined in the document that you have in front of you, that it has always been an office. If you are aware of it, and I’m looking around and I don’t see any of you as my customers so I’ll invite you over some time to take a look at Midtown Realty. My front entrance is about five feet from the parking lot. So there really is no access or eye-appeal to entice, at least from my standpoint, anybody in the retail business. Now I am not so na’~ve to say that ifI had a retail customer that I wouldn’t take them. I don’t think I’m of that ilk yet. But there is no question in my mind after being there all that period of time and going through some ups and downs in this town that my space deserves and should be office area. Again, I’d like you to come down and take a look at it. I’ve gone to 14-foot ceilings. It is beautiful. I’ve got separate computers. It is really first-class. So I hate to think in terms of putting a pet store in there at some time in the future. Good bye. Commissioner Burr: Thank you. Stephanie Munoz to be followed by Joy Ogawa. Ms. Stephanie Munoz, 101 Alma, Palo Alto: I don’t live in Midtown and am somewhat diffident about commenting. I believe that you need more input not just from me but from all the residents. I understand that you get a rather small turnout at Planning Commission meetings and it is a process that feeds on itsel£ Because you get a Small turnout you don’t bother notifying the residents and residents don’t bother coming because they don’t feel they are paid attention to. I " believe that you should have something like a working group that should go on for several weeks. There should be give and take. When Ms. Cassel asks a question there should be somebody to answer it immediately and somebody to comment on it and bring to bear the full resources of all the people who could be helpful in the process. That is particularly important. I also think you should put the notice out in the utility bills. There should be a little slip of paper the size of an index card and it should say "City of Palo Alto Notice. We are planning the future of Midtown on such and such a date. If you are interested in what goes in the shopping center come to this meeting or call or write. The decisions will be made by the people who are there and not by the people who are not there." In Midtown that is particularly important because you have a very peculiar situation there. You have a ban on housing in Midtown. The reason for the ban on housing is often given is the neighbor’s request or the neighbor’s desire. I suspect although I am not absolutely sure, I suspect that that’s because the last time that Palo Alto decided that they would arbitrarily get rid of commercial to put in housing the people really objected to losing their veterinarian, their liquor store, their gas station. So there was a sort of a major reaction and the housing was banned. But I suspect that the people in Midtown are not all that much against a certain kind of multiple. For instance, market rate small senior housing of well behaved, well bred, people with no motorcycles and preferably no cars and it seems to me they could be very well integrated on Middlefield Road as there indeed apartment complexes. City of Palo Alto 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 They could add to the critical mass that makes a retail store go. Retail isn’t going to stay there by your saying it must. Retail comes because people can make a profit there. There are only a couple of kinds of retail, there is neighborhood serving and there is not neighborhood serving. If you bring people from all over town you can make more money on the other hand the businesses that bring people from all over town I don’t think the people will appreciate. I don’t think they want Wal-Mart, I really don’t. So I think that you should look into the history, you should first of all immediately get the Council to remove the outright ban on housing and then you should give yourselves a chance to see housing might work. What it would do. For one thing we just heard Mr. Roxy Rapp and he had a wonderful idea. He said, I’ll put some housing in if you’ll give me some offices. I believe that you will get more houses if that is what you want by saying you may make the money on this less valuable retail by adding houses. Houses will make money if you put them where you are going to have something else. If, on the other hand, you say we’ll give you extra offices anyway then you don’t have a bargaining point. I believe that you have to use the possibility of making more money to have people put in some kind of housing that you like. I do not mean enormous single-family houses that are the size of hotels. I don’t think anybody else wants that either. The parking, I think number one that there is a parking problem and I don’t see why we can’t have paid parking in Palo Alto. I don’t see why Roxy Rapp shouldn’t charge for his parking. Thank you. Commissioner Burr: Thank you. Joy Ogawa. Ms. Joy Ogawa, 2305 Yale Street, Palo Alto: Good evening. I support a good ground floor retail ordinance for Midtown and Charleston as well as all the neighborhood commercial zones in Palo Alto. I think there have been some really excellent comments tonight from the neighbors in Midtown and Charleston. I guess I would like to especially echo Annette Ashton’s comments that there be public input when a determination is made as to whether an office use is appropriately neighborhood serving. I guess a requirement for a conditional use permit would allow for this. What brought me in here tonight to speak is Attachment H of the Staff report. As far as I can make out it is a draft by Staff of a new zone for Midtown. What I find alarming about Attachment H is that medical, professional and general business offices found on the ground floor are listed as permitted uses not as conditional uses as is the case in the current interim ordinance. Not only that, there is no requirement in Attachment H that the office use in Midtown be neighborhood serving. So as I was reading Attachment H I though to myself that there is nothing here that would prevent Wilson Sonsini from moving into second floor offices in Midtown. So that is really just what I wanted to point out to you. Just be aware of the language in Attachment H. Thanks. Commissioner Burr: Thank you. Would it be appropriate at this time to take our break? This is the last of our public speakers. At this time we will take a ten-minute break. Thank you. Commissioner Burt: The meeting will now reconvene. Will the audience please return to their seats. Thank you. At this time I think the Commission would like to give Staff an opportunity to first respond and expand on any of the questions or comments that were raised by the public, if you would care to. City of Palo Alto 25 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 1 Ms. Grote: Thank you very much, yes. Briefly, there were several comments made about our 2 recommendation for the removal of the definition of neighborhood serving use. I did want to 3 revisit that and say that the reason we are at this time recommending removal of that definition is 4 that we do consider it to be incomplete and that when we ran test cases through it, it hasn’t been 5 helpful in determining whether or not a particular type of use would be neighborhood serving. 6 An architect’s office came up frequently. How would you determine whether or not that is truly 7 a neighborhood use using this definition. Sometimes people do travel to an architect’s office but 8 an architect often times go out on a site visit or many site visits. They don’t necessarily only 9 have individual or household clients. They often times have business and corporate clients as 10 well but that doesn’t necessarily mean that they aren’t neighborhood serving in some capacity or to some degree. So the definition as currently written wasn’t as helpful as we hoped it would be in determining specific uses and whether or not they were neighborhood serving. So we are recommending taking that out for the interim ordinances and continuing that discussion and trying to refine a definitibn as part of our zoning ordinance update which is a separate biit parallel effort. So I did want to elaborate on our reasons for recommending at this time that we take it out. There were also some comments made about the exceptions that we have proposed in the interim ordinances. We are recommending removing those particular addresses from the ordinance because they are in a unique location that does not address the core of the Midtown area. The other possibilities for exceptions that were raised tonight are on comer locations that although some of the fronts may face Colorado the bulk of the building relates to Middlefield. They are central to the Midtown District. Whereas the four address that we recommend exempting are not central to the District. So we saw that as a fundamental difference in their location. Then finally a comment had been made about the altemative Ordinance H in your packet and that it did not have a conditional use permit requirement in it. We used the Downtown Ground Floor restrictions or regulations as the model for Attachment H, which currently do not have a conditional use permit component to them. We said that as an option a conditional use permit component could be factored into an ordinance of that type. So we used pretty closely the Downtown as a model for Attachment H. I think the key questions before you that can help frame your conversation or discussion are: Should there be an ordinance protecting retail uses and other personal service uses at all? If there should be, should any office use be allowed on the ground floor? How aggressive would you want to be in seeing the conversion of non-conforming uses to conforming uses? What types of office would be allowed or could be allowed and in what kinds of combinations or locations, above ground floor or on the ground floor? I think those are some of the key points that you may want to discuss or address. What types of offices, if any, should be allowed and in what locations? Meaning above ground floor versus ground floor. Commissioner Burt: Lisa, could you also summarize the way that the Staff report has presented the major options that are both in Attachment A and in the body of the report? Ms. Grote: Attachment J provides a matrix of the different types of approaches and compares them as far as uses are concerned and what types of uses are permitted in each option. It City of Palo Alto 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 compares the CN District which is the current Neighborhood Commercial District with the interim ordinance for the Charleston Center, the interim ordinance for Midtown and then the Ground Floor Restrictions as modified for Midtown or CN area. If you notice, the primary difference is pretty much in the middle of that first page of the chart where it is dealing with medical offices, professional offices and general offices. In the CN District there are size restrictions on those uses but they are allowed currently in CN on the ground floor. In the Charleston area the interim ordinance permits them up to a certain size, which would be 2,500 square feet and up to a certain square footage total for the center, which is the 7,850 square feet. Then it limits general offices to travel agencies and insurance agencies. Then for the interim ordinance for Midtown it requires a conditional use permit for any new office use on the ground floor. Then for the ground floor restrictions it prohibits .office use on the ground floor and only allows office use above ground floor levels. So that is kind of the basics of the differences in the allowed uses. We are again recommending that the two interim ordinances for both Midtown and Charleston be extended with the deletion of the neighborhood serving definition for the reasons I mentioned earlier. Then also Midtown have the P overlay requirements attached to it. Commissioner Cassel: So that should be a fifth item here where you talk about the list of things we should discuss. We should discuss the P Overlay Zone. Ms. Grote: That’s correct. Commissioner Burt: Yes, Bonnie. Commissioner Packer: Since you were just talking about the uses, under the CN District for Midtown if the place where the [Feshback] Investment is in 10,000 square feet, how did they get in? Ms. Grote: I meant to comment on that before. That was an error in the chart. It really is only 5,000 square feet that is occupied by Feshback’s and that is the maximum allowed and that is within the CN requirements which were in place when Feshback’s went into that location. Commissioner Packer: I just have one other question on use. There is a little kid art store in Midtown, Let’s Draw, under what category would thatfall? Ms. Grote: I could be a combination. If they are selling any products it would, at least partially, fall under retail. It could also be considered commercial recreation which is a conditionally permitted use in CN. I would need to know exactly what it is they do there though. Commissioner Packer: It is art classes for kids. Ms. Grote: Probably be retail. If they sell supplies it would be retail. Commissioner Burt: If they sell supplies. It is not their primary business. They provide art classes and art parties for birthdays and whatnot. City of Palo Alto 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 !8 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Ms. Grote: Let me look at some of our definitions and see how that would fit. I may need more information about what they actually do. Commissioner Burt: Just ifI might follow up on Bonnie’s question, that prompts some of my thoughts on what some of the speakers, including Annette Ashton, had mentioned. Part of what we really have to be considering is what is the evolution of what is viable neighborhood serving retail and services. I think we need to make sure that we are not primarily looking backward for our definitions but forward at what is emerging as viable services that the community values. This example, I think, is perhaps a good one. We are seeing more and more of these sorts of services that draw people there that are valued by the community. As we are looking at that definition issue that you mentioned earlier I think we really need to look at emerging trends as well as our past definitions. Ms. Grote: I agree. I also think that in thinking about that specific example of the kid’s store it could be considered as a personal service much like any other kind of service where you walk in and you do whatever it is there onsite. You don’t necessarily take something away from the store with you but they have provided you a service that you’ve participated in it onsite. So I would be inclined to say it is either a combination of retail and personal service or something along those lines. But also, I do agree that we need to look forward and as part of the Zoning Ordinance Update we are definitely talking about definitions, not only neighborhood serving, but many other types of definitions and uses that have evolved over time. This particular set of ordinances is geared towards conserving or retaining what is in place now for the relatively short term knowing that we will be continuing these discussions as part of the Zoning Ordinance Update. This was to respond to an immediate need to preserve uses that are directly related to neighborhood centers. Commissioner Burr: Wyrme. Ms. Furth: One of the things that complicates the discussion is that the City has a definition of retail services and also a definition of personal services. A lot of the time when consumers use the term retail include in retail what we call personal service. That does include art, dance or music studios, presumably karate too. Commissioner Cassel: Because that building has SCORE, it has art, it has karate, and you could list those as private educational. There are a lot of definitions that falls under but that is a predominate use in that building. Ms. Grote: That’s why they have been allowed to locate there. They were seen as personal service to some degree. Some of them have an educational component but it is more than just a retail definition or just a retail restriction. Commissioner Burr: On the same subject, in Midtown we have those shops that face Middlefield and are prime front footage and then we have the other articulations of that shopping center. Has there been any discussion about breaking up these allowed services between some of the educational related, some of the other services versus retail, and allowing them not as conditional uses but having subsets essentially of the zoning within Midtown so that the most important City of Palo Alto 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 retail strip remains purely or predominantly retail and yet these other valued services are allowed elsewhere in the shopping center? Ms. Grote: We had not considered that as part of this interim approach. We had really attempted to keep it as simple as we could and as straightforward as we could knowing yet again that we would be discussing this further as part of the zoning ordinance update. As part of that effort if we come up with a better solution, something that is realistic and allows for a greater response to neighborhood needs as well as market needs, that we could then do that as part of the zoning ordinance update. One of our real goals here was to keep it as straight forward and simple as possible for this interim period. Commissioner Burt: Susan.. Ms. Arpan: One of the considerations early on was’to look at Middlefield Road as kind ofa main street and so we did start to do that. When we began to get more into the area we saw the 7-11, the small strip mall that was on Colorado Avenue and that a main street concept didn’t really work for us. So we went back to taking a look at uses again and sort of fitting the ordinance around those uses as opposed to looking at a main street or trying to get into more detail here know that that would happen in the zoning ordinance update. Commissioner Burt: Kathy. Commissioner Schmidt: Lisa, you were just saying this is an interim extension of an interim ordinance and tweaking it is one way to look at this and that you tried to keep it as simple as possible. We were all just saying that this seems very complicated. Is there a simple way, a real simple way, to do this since it is still an interim ordinance? Are there any just real straightforward simple ways to do it? Ms. Grote: I think that what we’ve proposed is what we would recommend as a straightforward approach. There is an option to that which is the Ground Floor Restrictions which are also fairly straightforward with certain modifications. So I think in the interim this is what we would recommend as a relatively simple approach. Mr. Gawf: If I could follow on. It seems to me the policy question is fairly simple. Do you want to limit office use in this area? If you do, do you want to provide any relief mechanism? And we’ve recommended two approaches. Either one I think would work or a combination. One is a CUP and the other is the vacancy approach. I think that is the basic policy question. Should we limit office use in this area? Commissioner Burt: At this time we could either go into those basic issues or allow Commissioners to air some accumulated questions and then focus on the principle issues. How would you like to proceed? Do you folks have some remaining miscellaneous questions? Kathy. Commissioner Schmidt: I don’t think we addressed this after the public comment but we might have. Parking was mentioned as an issue for retail vitality. Obviously if we limit uses in these centers and we want them to be vital and we want them to live up to the neighborhood’s City of Palo Alto 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3o 31 32 33 34 35 36 37 38 39 40 41 42 .43 44 45 46 expectations, this is a sort of two-fold question, do you think that parking issues need to be addressed to do that and if we make strong limitations of what can be there in the evolution of Palo Alto’s uses can small or large retail tenants can survive the new situations? Mr. Gawf: Let me address the first part of your question. Looking at the parking, we last summer initiated a review of parking in the Midtown area. That is the study that Mr. Rapp was referring to. The study looked at parking as well as what I think is also an equal issue and that is circulation. It is the combination of the two. So we initiated that from City funds but I think any solution is going to probably involve some type of partnership but it is certainly requires the participation of the property owners in the area. It is always difficult when you have the multiple property owners’ kind of retail environment or commercial area that you have here. I think regardless of what we do I think we felt that we needed to look at the parking and circulation issue. We are doing that. I think the report that came out today was just an initial dra~ report. You will see as the Planning and Transportation Commission the final work and be able to make comments on that. Again, we are doing that regardless of what we may do on the zoning issue. Ms. Grote: IfI could, I would like to also add that parking for retail and personal services is used differently than parking for office. People are coming and going so parking spaces free up on a fairly regular basis and they are not occupied for such a great length of time. Whereas with office uses people really take the parking for the entire day. So there is a different kind of use of the parking. Ms. Arpan: I want to mention that there is a difference in those two uses but also to mention that the City hasn’t been enforcing that parking lot for quite a long time. Part of the reason for the parking and circulation study was to determine what kind of an approach we wanted to take to that. It is posted for two hour parking and it is being parked all day, as Lisa said, for some office uses. So part of looking at the whole issue is to really ascertain what we want to do with that. If we get more intense with retail we can determine that that enforcement is an important thing to US. Commissioner Schmidt: The other part of my question is Susan, do you have comments about retail surviving in those locations? Ms. Arpan: We recently completed a study that took a look at the 11 business districts, the neighborhood shopping districts in Palo Alto, and we took a closer look at Midtown. We do think that there is an opportunity for some growth in the Midtown area. I think it is important what type of retail that locates there but we do think that Midtown is a prime area for the establishments that have gone in recently have really increased sales tax revenues for the City. Long’s has done that and we have some data to support that although I didn’t bring that with me tonight. I would be more than glad to furnish that to you specifically about the Midtown area. We do think that there is a good opportunity for a good retail mix. We do have some plans that we’d like to move forward with in terms of developing retail there. We may want to look at a business improvement district. We may want to look at assisting local merchants with forming a business association so that there is a point of contact within that business district. So we do have some plans and we will be bringing some recommendations to City Council probably in May. City of Palo Alto 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Commissioner Schrnidt: Thank you. Commissioner Cassel: This is interesting. I was part of the previous attempt at getting part of this Town to work together and sat through a lot of these meetings. As will other parts of Town when the neighborhood wants something there is a great deal of conflict. It isn’t as easy as it looks on the surface. So one of the issues in parking is yes, we want a vital retail area, that brings more cars. We want a neighborhood so people walk but the reality is we aren’t walking and that brings more traffic. Then people complain about the traffic. The last traffic study I saw had Middlefield Road the busiest day is Saturday morning. It seems unbelievable and it has been a couple of years since we did that study but Saturday morning turned out to be the very heaviest use. I have to get out onto Middlefield Road to get anyplace and it is the hardest day to get out of the street onto Middlefield Road. So we have this conflict. We put in more retail and we intensify it that is going to bring us more traffic. How do we handle that balance? Ms. Arpan: I don’t have a simple answer for you. I think that we need to work together with the business and property owners to come up with solutions. I heard what Mr. Foy said about Bergman’s telling him that he needed to open up his parking lot to them during the Christmas season. I think the City would like to participate in facilitating some of these discussions and trying to move forward with some solutions. But I do think we have some plans for ways to help revitalize or to continue the revitalization in Midtown. Commissioner Burr: First I presume that the circulation issue will have a new opportunity to be revisited with the changes at Co-Op. That presents some new opportunities there. The parking requirements for the office versus retail, how would you compare both what the code requires and what we think is the reality? Mr. Gawf: Lisa is looking up the code requirement. My general rule of thumb is four per 1.000 for office and three per 1,000 or so for retail. It has been awhile since I actually looked at the numbers. I don’t believe that is the zoning requirement but that is just how it sort of works in real life. It also depends on how successful the retail is much more so than the office. The office tends to be fairly consistent. The retail if you are very successful clearly you need more parking and then we’ve seen the other side of the retail. Commissioner Burr: As you’ve pointed out in Downtown it is not just the success level but the type of retail. Restaurants generating more parking than others. Mr. Gawf: With restaurants I did mention that and we figured it is somewhere around 10 to 20 stalls per 1.000. The ratio is significantly higher but it also tends to have peaks. You can see that in Midtown. Mike’s Car6 at noon is hard to find a parking space right there but not very hard at 2:00 p.m. So there are peaks and valleys and that’s why quite often when you look at parking in an area like this you step back and look at the combination of uses and see how much sharing can occur with parking. Ms. Grote: To specifically answer your question, retail has a requirement of one parking space for every 200 square feet and office is one parking space for every 250 square feet. Restaurant City of Palo Alto 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 actually has yet again a different rate and that is one parking space for every 60 square feet of seating area or public area and then one space for every 200 square feet of non-public area like the kitchen or bathrooms or storage areas. Mr. Gawf: So the retail is five per 1,000 and the office is four per 1,000 and the restaurant must be figured out. Ms. Grote: You need to know the square footage of the actual uses in the restaurant. Commissioner Burr: The office spaces that exist in Midtown I think Susan had said that the common parking lot there is two hour parking. Is there other off-street parking that those offices possess? Ms. Arpan: I know that the Knowhere store when they are doing large events actually has a relationship with St. Anthony’s and they park people there. Let me take a look at the other office uses that are there. I’m not aware of what the situation is with Feshbach. I don’t know where they are getting their parking from. Clearly some of it is in that parking lot in front there. I would guess that there is some parking in the neighborhoods fxom that particular use. I know that 711,719 and 721 Colorado are parking in the two hour parking that the is the City parking lot and along Midtown Court because we have anecdotally been told by those businesses that that is where they and their clients are parking. Ms. Grote: There is a limited amount of onsite private parking for most of the uses out there, maybe not all of them, but most of them. When new uses go in that is something that we look at. If they have a higher parking requirement then they need to find a way to provide that additional parking onsite which is virtually impossible in the Midtown District. Some of it can be achieved through re-striping, going from standard stalls to uni-stalls which have a smaller dimension, but not many more could be achieved there. So that is something that currently controls uses. Commissioner Burr: One thing I was not clear about was on the potential for second s~ory office. There had been discussion about the Co-Op site potentially having second story office. What does zoning allow, currently, for second story office? Ms. Grote: It is currently allowed. Under the interim ordinance which is in place you could have second story offices. They would be limited in size, however, to up to 5,000 square feet or 25% of the lot area but you could have them on the second floor. Commissioner Cassel: My question is the reverse of that. My understanding is that most of that particular comer where the Knowhere store is now over the floor area ratio that is allowed. So - no additional second story space can be built in most of that area because of the square footage that is already there and there is very little second story space existing now. Ms. Grote: That is probably correct. I don’t know the exact numbers on all of the square footages. We would need to check those but there probably is a limited amount of second story that could be built. City of Palo Alto 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2o 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Commissioner Cassel: I think in that study in Midtown I think those numbers were available at that time. Commissioner Burt: When you say it is limited, I understand the comer of Colorado and Middlefield being over-built but we have the rest of Midtown. Is the only constraint on preventing somebody rebuilding and put second story office on all those strip shops and above Co-Op the parking restriction? Ms. Grote: There are other site development requirements that would have to be met. There is a height limit and there is floor area ratio and there are site coverage and landscaping requirements. So all of those requirements would need to be met. We would need to evaluate how much square footage could actually be built on any particular site based on those other requirements and how much they needed to add as far as landscaping and how much additional height they could have, things like that. Mr. Gawf: Lisa, don’t you think parking would be the prime restriction? Ms. Grote: I think parking and FAR are probably the two prime restrictions. Commissioner Cassel: The FAR in that area is only .4. That is less than a house. Ms. Grote: It is .4 but the parcels are larger than single-family residential sites for the most part so the total square footage on a parcel is usually greater than for a house. Commissioner Burt: I see that in the overall summary we have about 300,000 square feet of lot area on the first page. So on the first page 300,000 square feet of which 115,000 is built. So it is moderately below the .4 FAR currently. Not too much below actually, 120,000. So it is only 5,000 below the FAR. So the FAR would limit this. Although on a parcel by parcel basis if we actually have a number of parcels that are over-built then the average doesn’t actually tell the true picture. Those parcels that are under-built would have available FAR provided they could provide for the parking and the other issues that you mentioned. Any other questions at this time or should we move forward to the broad issues? Ed, I think you had framed the issues for us. Would you be so kind as to repeat them as you see them and we will proceed on that basis? Mr. Gawf: I think that the basic question is do we want to limit office use in this area? That would be the first policy question. If you do, then how do we want to do that? I mentioned two options. One, if you want to provide some kind of relief for the limitation of offices both the vacancy approach and the other is the CLIP or a combination. So the first is, do you want to limit office? Second, if you do, do you want to have a relief for it? Then the third would be do you want to consider some kind of design consideration such as pedestrian zone? Then the final fourth one would be how do we want to treat non-conforming uses in this regard? Commissioner Burt: Okay, maybe we can get rid of the first one fairly easily. City of Palo Alto 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Commissioner Schmidt: Lisa, initially mentioned should there be an ordinance protecting retail use or uses in the first place. That was maybe the very first issue to address. Commissioner Burt: I understood that to be the inverse of what Ed was saying. Should we limit office use or should we have an ordinance to protect retail? Wynne. Ms. Furth: When the Council directed us to start working on this one of the points they made was that they perceive that these things were intertwined, that the reason that there was an interest in preserving retail is because it is perceived to be threatened by office uses. Office uses paying a higher rent. So that’s why preserving retail has focused on office uses. Commissioner Burr: So do we favor an ordinance that ~vould help preserve retail by restricting office use? Commissioner Cassel: My natural instinct is to say, absolutely. Then I go dead because then I start to look at these definitions. So many of these office uses appear to be what I consider retail. I can’t imagine putting a bank on a second floor. So we are having problems now with definition of what is a financial institution. The old fashion bank is on the first floor. The one we have there I presume will be preserved because it is there. Ms. Grote: Any existing use, yes, would be allowed to remain if they remained in the same kind of use. Financial institutions are different uses than offices and they are defined differently in the zoning ordinance and they are treated differently. They would still remain as conditionally permitted uses as they currently are in that area. So you could still apply for a conditional use permit for a bank. Even if you recommend the option that limits ground floor office use banks would still be eligible for a conditional use permit because they are different than office uses. Commissioner Burt: I have a clarifying question on that. We use the term financial institutions. We used to have neighborhood banks and now we have different financial institutions of various sorts in this town that are proliferating. They are not what we traditionally thought of neighborhood banks. Are we making any distinctions between those types of financial institutions and which ones would be allowed under the conditional uses and which ones would not? Ms. Grote: The term financial service as currently defined in the Zoning Ordinance includes banks, savings & loan institutions, loan and lending institutions, credit unions and similar services. It also says that a financial service means a use providing those types of services to individuals, firms or other entities. So it is a fairly broad definition. Mr. Gawf: It is but let me also say I think it has a clear meaning. That is that it is what I would calla traditional bank or banking services. It is not an investment firm. It is intended to be a bank, savings & loan that provide services to the community. Commissioner Burr: Do you feel that the wording provides you with the proper latitude to be able to differentiate between those two types of financial service companies. City of Palo Alto 34 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 1 Mr. Gawfi Yes. First you have the CUP as Wyrme mentioned. Secondly, I would say in 2 practice we have that task almost weekly and we’ve held firm. I think the definition is actually 3 pretty good because it uses similar types of examples that are clearly walk-in kind of traditional 4 banking services. So we have stayed the course on that. I think given the two factors, the fact 5 that we have a track record of being consistent with that and secondly we would review it on an individual basis, we are fine. Commissioner Schmidt: I would definitely love to see the neighborhood centers be thriving vital places that are useful to the neighborhoods that people can walk to the uses there. I think we probably do at this point need to have some kind of ordinance. We are talking about extending an interim ordinance. It generally still seem complicated to me but. we are aiming toward the zoning ordinance updates and looking at bigger picture things. So having something like this is probably going to be the best way to go as an interim measure. Commissioner Burt: Bonnie. Commissioner Packer: I think we should have this ordinance that restricts office uses on the ground floor in Charleston and Midtown. I’ve lived in that area since 1974 and I’ve seen the changes in Midtown. One of the things that we need to think about in doing the zoning ordinance update is really looking at some of the definitions in the zoning ordinance about uses. It would be nice to waive a magic wand and say wouldn’t it be nice to have shopping centers like they were 20 years ago where you had all these personal services but the economics are changing and the kinds of things that people go to neighborhood commercial areas for are different. Such as that little drawing store or SCORE, places where people can go and do things, Petroglyph. Those kinds of places are happening and so that would be a great thing to look at. The interim ordinance restricting offices on the ground floors of buildings that are facing Middlefield because we want to promote that sense of pedestrian scale and open windows, open friendliness. We want to discourage the closed blinds on these front-facing storefronts that were builtto be retail. Commissioner Burr: I certainly concur that we want an ordinance and I think a strong ordinance to maintain and even reverse some recent trends that have occurred. I’m going to be looking for what mechanisms we might be able to use in the upcoming years, I don’t presume we can do it immediately, be able to reverse some of the adverse trends that have recently been occurring. I would like to ask for one clarification from Staff on the Charleston Center. The preamble there said that the office uses in the Center have contributed to the economic vitality of the Charleston Center over time. That is contrary to a lot of statements we’ve heard both in this meeting and ones I’ve heard outside this meeting, and personal perceptions. Where did that come from and what is the basis for that statement which seems to then be an-overriding basis for a lot of the other recommendations that follow? Ms. Grote: I think that we did hear that from again the property owner and business owner meeting. I think we have heard it informally in comments that people have given us throughout the last couple months. I think it was an assumption based on the Downtown area where the Ground Floor Restrictions are only applied to a certain number of streets and in certain locations knowing that the office and other types of uses in the rest of Downtown that are zoned CD but City of Palo Alto 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 not GF contribute to the retail and personal service success of the GF area. So I think we heard it anecdotally and we use the Downtown as an example of where office and retail, personal service work together. Commissioner Burr: How does that reconcile with the concept of the need for a c~itical mass of retail for a retail center to be truly viable? Ms. Grote: That is why we limited it to roughly 7,800 square feet. That does happen to be the existing square footage of office use but it still leaves the vast majority of the square footage available for retail and other types of personal service use. So you still have that critical mass. Commissioner Burr: Phyllis. Commissioner Cassel: Part of the problem I think is our perception of what was retail local using and what wasn’t and some of the problems with change of uses. So we aren’t apt to have another bank come into Midtown because those services are changing more and more to online ¯ and the number of up front places where you can go is becoming extremely limited. We have always included office as medical office. Who ever thought of a travel agency as a danger to a retail place? We used to into the office do our business and leave the office .where today we do it all on the telephone or e-mail. You went into the real estate office. So they were part of their vitality. You didn’t think of them as dangerous to your community or your center. We had three banks in Midtown on the comers. We had two when I came to Town. We had gas stations on comers and didn’t think of them as bad for the vitality. We forgot about gas stations, they are pretty ugly. So I think some of it is perception that suddenly these places are dangerous to us where they weren’t before. I think it is this coming to the business and that’s what is making it so hard for us because we aren’t going to those businesses. Yet they still may be vital businesses. Commissioner Burt: Bonnie. Commissioner Packer: I would like to address this concept of a mix of office use and other retail restaurant type uses. I think we have to look at any business district as kind of like an ecosystem. You need a certain amount of variety for things to inter-relate and feed offone another. The reason I support the Midtown the way it is drafted is that is the way the lines are drawn. There are office buildings outside the parameters. There is a dentist building, the Midtown professional building just south of Safeway and then there are the buildings that were exempt. I think the workers in those offices probably provide some of the customer traffic to that retail area. So by limiting the ground floor to retail in the areas that are defined by the ordinance you are not really excluding all office from the general overall Midtown area. I think that knowing that we can live with this because it isn’t so heavy handed and saying we don’t like any business and we don’t want them because they don’t sell anything. We are not saying that. We are just looking at mostly the street facing stores that have inviting entranceways and wanting them to not close their blinds. ¯Commissioner Cassel: Are you saying you agree with the lines that the Staff drew for this district? City of Palo Alto 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Commissioner Packer: Yes, that is what I’m saying. I support those businesses on Colorado as listed that are not part of it. The dentist offices behind the Harmony building and the professional offices to the south were never included. Ms. Grote: Right. That is 689 Colorado. Commissioner Burt: Before diving into the particulars of where we Ought to draw the lines on this I’d like to offer a few comments and show my cards on this overall concept of the role of office in the neighborhood serving centers and how the Comp Plan addresses those concepts. I think that in business districts like Downtown and California Avenue the synergy between the office occupancy and the vitality of the Downtown is appropriate and functioning. I don’t think that that’s predominantly the concept that we have for neighborhood serving centers. There may be exceptions to that, there may be grandfathered conditions to that that we may want to allow. But as a broad concept I don’t think that that’s the vision that was articulated in the Comp Plan and I don’t think it is what is really appropriate and what we want to try and strive for. What we talked about earlier, we have some contradiction between existing zoning which excludes the concepts promoted in the Comp Plan. If we want to help revitalize these centers the Comp Plan talks about providing incentives for mixed use, retail and residential. If we want to give people bonuses then we need to look creatively on how we might be able to achieve that and work responsibly with the property owners there to help revitalize these centers. We’ve already done good things. As much as there is criticism about the slow pace at which Midtown has been revitalized it is in better condition than it was a few years ago. I think the City needs to have a proactive roll in that and continue to but I frankly, want to look at ways that we not only can preserve the ground floor retail but I don’t want to see an increase in office upstairs in these areas if we can instead promote a different vision that is more aligned with what I believe the Comp Plan is looking for. Commissioner Schmidt: In terms of office use I agree with Pat that it is different in these situations. I think that it is reasonable to have some way to have some relief but I would also want to discourage a lot more office in the centers. In fact I would love to see some residential happen, some mixed use situations in these centers. That is possibly a different issue. Commissioner Cassel: I think it is probably important for tonight that we don’t try focusing on what we would like to see in every neighborhood center in Town and go back and try to focus on what we are going to do with this ordinance. We are struggling with the theoretical issues. I easily wrote a 10-minute talk on the theoretical stuffthat all of us have been debating for hours and could for many more hours. I think we better get back to the basic issue. Are we going to continue this interim ordinance? If so, are we going to put any limits on it? Actually I think it. would be easier to do since we all agree that there are some ordinances there and it would probably be easier to do the Pedestrian Overlay Zone, unless any of you disagree with that. That was for me a no-brainer. Even if it is an office space it can have some of these amenities. I suspect that what has made us so angry and done a lot of this triggering is not some of the small offices that have gone in but as everyone keeps pointing out this one large change that felt like an iron box sitting there. Even though the building has improved, it looks better everything in that space looks better except that it is so closed. They finally got a sign on it. You don’t know what City of Palo Alto 37 1 is going on inside but you know what the name of it is. So I think that would be the easiest 2 thing. Do we all agree on that? 3 4 Commissioner Burt: Do you need us to have motions on these individual recommendations? 5 6 Ms. Furth: I think it would be very helpful to have motions on where you have a specific 7 directive. The Council very much wants to know your view as a Commission. 8 9 MOTION 10 11 Commissioner Cassel: I move that we support the Pedestrian Overlay Zone as stated in the Staff 12 report. 13 14 SECOND 15 16 Commissioner Schmidt: Second 17 18 MOTION PASSES 19 20 Commissioner Burt: All in favor? (ayes) 21 22 We did not have a motion regarding support of the concept of an ordinance. 23 24 MOTION 25 26 Commissioner Schmidt: I’ll move supporting the concept of having an ordinance. 27 28 Ms. Furth: Could you define that? 29 30 Commissioner Schmidt: That the ordinance that would protect retail uses and limit office use. 31 32 Mr. Gawf: On the first floor? 33 34 Commissioner Schmidt: Yes on the first floor but I would also just say limit office use in 35 general as well. 36 37 SECOND 38 39 Commissioner Burt: All in favor? (ayes) 40 41 Commissioner Cassel: How about discussion? 42 43 Commissioner Burt: Discussion. 44 45 Commissioner Cassel: I still have some concerns about this five-year time limit when the 46 exception has been made. City of Palo Alto 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38. 39 40 41 42 43 44 45 Commissioner Burt: We will hit that issue as a subset of this. Any other discussion? Commissioner Packer: Yes, I believe we are just talking about the concept of the ordinance and not the specific A, B or H. MOTION PASSES Commissioner Burr: Correct. All in favor? (ayes) Which item would you like us to address next? Mr. Gawf: It seems like the next issue might be, should there be any relief from the first floor office limitation. I mentioned two alternatives or options, the vacancy approach, CUP approach. I think under this also a discussion of the boundary because exempting buildings is part of, as Bonnie indicated, providing some relief from this particular ordinance. Ms. Furth: One question would be with respect to Midtown do you support the boundaries proposed for the overlay district for this. Commissioner Burt: Why don’t we take each shopping center one at a time, break it up between Charleston and Midtown. Which one would you like to go for first? Charleston is easier. Discussion on Charleston or a motion. MOTION Commissioner Schmidt: I would move the Staff definition for the Charleston Shopping Center area as depicted on the map included in our packet. Commissioner Burt: You are moving the Staff definition, can you point us to exactly what it is that your motion is addressing? Commissioner Schmidt: Agreeing with the description of where the area is. Commissioner Burt: The boundaries of it. Commissioner Schmidt: The boundaries, yes. SECOND Commissioner Packer: Second. Commissioner Burt: Perh.aps this would be a time to ask about a conceptual issue of Staff. If we are looking at relief, has Staff considered distinguishing between street facing uses versus breaking that up into the back portion of shopping centers? On the Charleston I don’t know City of Palo Alto 39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 whether there is a potential to allow office to be retained in the rear portion of that shopping center and retail uses on the street face. Is that a viable alternative? Ms. Grote: That could be an alternative. It is not one that we had explored in any det.ail at this point. There is the opportunity. We are here to recommend the option that is more along the lines of the Downtown Ground Floor Restrictions. The Downtown Ground Floor Regulations allow for 25% of the ground floor area to be in office use if it is non-street facing. You could include a recommendation that would incorporate that kind of a concept. Commissioner Cassel: Are you talking about the Charleston Center? Commissioner Burt: At this moment we are talking about the Charleston Center. Commissioner Cassel: We are talking about offices not street facing? Commissioner Burt: The question is if we were to have something that would sunset the office uses that were there might we want to consider having a limited sunset where we might have one trigger at a certain point in time at which they would revert to retail,on the street facing and provide the option for continued office us for some longer period of time. I’m not sure that’s viable that’s what I was asking. Is that any kind of a viable option for there? Mr. Gawf: I haven’t talked to the property owner with that question. In fact I haven’t talked to the property owner Lisa and Susan have. Let me say this is one where there is one owner for a center. I think the owner is in agreement with our proposed recommendations. It seems like it is one that gives them a little bit of flexibility, recognizes that there are office uses that may serve the neighborhood, but still retains the predominant retail orientation of the facility. So my recommendation would be to support the boundary that we suggested with the other limitation and conditions that we have included in that particular ordinance. Commissioner Cassel: I think we need to proceed with discussion amongst us to come to some conclusion of where we are going. We are going back and forth to Staff and starting our discussion and going back and forth to Staff. While we need to do some of that we are going around in circles here. This is an interim ordinance. We are not passing the final ordinance. We are not asking people to change the orientation of their buildings. We keep getting into a theoretical discussion but there is a discussion amongst us about whether we could do something in the future but this is only going to be for two years. It is only a two-year ordinance. You’re talking about sun setting people’s current use of facilities over the next two years. Commissioner Burt: No. Commissioner Cassel: That’s what is before us, the interim ordinance. Commissioner Burt: No, the interim ordinance has discussed a longer period of time for conditions. Is that correct? Ms. Grote: No, the interim ordinance would only be in place for two years, until March 2, 2003. City of Palo Alto 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Commissioner Burt: So nothing carrying over past that. Ms. Grote: That’s correct. Ms. Furth: We didn’t talk about any kind of exception at Charleston because we just were talking about a fiat square footage limit. When you get to Midtown then your issue does come up. Commissioner Burt: I see. So is there discussion or recommendation from the Commission on the Staff proposal on Charleston? The boundary issue. Do we want to break up the boundary issue and then discuss the other aspects of Charleston? Commissioner Schmidt: I believe I made a motion. MOTION PASSES Commissioner Burr: Any other discussion? All in favor? (ayes) Now, on Charleston any other issues as far as the Staff recommendations within the boundaries what the specific recommendations would be. Commissioner Packer: I think the Staff recommendation to limit the office space on the ground floor to 7,850 square feet is reasonable. It is just a two-year ordinance. It reflects what’s in place and it will keep the rest of the space focused on retail. It seems reasonable to me. MOTION Commissioner Cassel: I’ll move the Staff recommendation. SECOND Commissioner Schmidt: I’ll second it. Commissioner Burt: Discussion? I guess on the two-year interim basis I think I would be willing to support it. My long-term goal would be to see a return to a greater retail orientation for Charleston from what it is evolved toward in recent years. MOTION PASES Commissioner Burt: All in favor? (ayes) Moving on to Midtown. First the boundary question. Ms. Grote: Excuse me. Did you want to cover the other issues in the Charleston Center? You moved to cover them all? Fine. City of Palo Alto 41 1 2 3 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Mr. Gawf: That was the easy one. 4 Ms. Furth: Chairman Burr, we could answer your question with respect to Midtown on whether 5 we thought about defining what was street facing and what was not in more detail. We did start 6 out by looking at the map with the buildings and the boundaries. In thinking about this one of 7 the differences between Midtown and Downtown is that Midtown has aspects of a shopping 8 center, Downtown has everything virtually fronting on streets. Midtown has buildings that front 9 on parking lots, buildings that are set back behind other buildings. The initial Staff 10 recommendation to the Council was to include all those buildings that you see that are parcels that front Middlefield and we did not try. to figure out where buildings might be broken up. How different suites might be formed within them with access to the back or the front. Planning Staff also decided that it was important to include the back buildings as well as the front buildings. So it was thought about and that was the conclusion that was reached. The Council made some modifications to exclude office buildings fronting on side streets pointing out that that wasn’t essential to the retail core. Mr. Gawf: I think it also achieved the purpose that you’ve indicated and that is trying to focus the activities on the Middlefield frontage. Also trying to preserve the existing retail that’s in the Midtown area. Commissioner Packer: I have a question about that one back building. The one that Larry Wells and Victoria Edmonds which doesn’t face anything except a parking lot. Isn’t that an easement through there? Ms. Grote: There is a small parcel which is a private parcel then there is also a landscape combining district that is adjacent to part of that building, part of Victoria Edmonds. The landscaping combining district in that location limits the use of that access-way to only access or landscaping. They can’t have deliveries or things like that occur within that area. So that may be the easement that you are referring to, directly adjacent to the residential. That is the only thing I am aware of. Commissioner Packer: Just something I remember from years back, some kind of weird easement that is in through there. Maybe it is a drainage. Ms. Grote: Also the uses in that building currently are all conforming uses. They are all retail or personal service uses. So we did want to protect that and continue that. So that was part of the reason for including them in the district. Ms. Arpan: The drainage piece that you are talking about is about 20,000 square feet of land. All of the addresses, Victoria Emmons and Larry Wells are all Middlefield Road addresses as well. Commissioner Cassel: I like the layout of the pieces that you decided to include. It allows some office space outside that immediate area and most of these either face onto Middlefield or they face into the parking lot where the circulation is. Did we move this? City of Palo Alto 42 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 1 2 Commissioner Schmidt: 3 4 MOTION 5 Commissioner Cassel: Staff. No. I’ll move that we accept the outline for this district as proposed by the SECOND Commissioner Schmidt: I’ll second it. Commissioner Packer: I’ve already said I support it. MOTION PASSES Commissioner Burr: Further discussion or comments on it? All in favor? (ayes) Next aspects? Mr. Gawf: I think the next one is probably the toughest one. The way I think of it is the issue between using vacancy as the determinant of potential relief or CUP. Again it could be a combination too. The way the interim ordinance is worded it provides for a conditional use permit to be the mechanism but it does recommend adding a third condition to the CUP findings that does make sure that any use that goes in does support the area. So that is one approach that is in the interim ordinance. In the modified Ground Floor Ordinance from Downtown what we have done is taken the vacancy rate of six or a year and the 5%. Commissioner Cassel: I prefer the conditional use permit approach. I think this area is small enough that if we use a trigger mechanism it is going to be very hard to follow. I know there are a lot of people who feel uncomfortable with the conditional use permit process for a number of reasons however, it does give some flexibility, many of these issues are not clear-cut and those of us who are sitting here hearing these cases when they come to us know how difficult it is to look to one side or the other. I think there are just too few properties to use the same mechanism that they use Downtown where there is a large number of properties. When you talk about a shift of a percent or two in vacancy rate you are talking about a significant number of properties or space. So I think we should use the conditional use permit process. Commissioner Packer: I agree because the conditional use permit process will also allow more creativity and flexibility. As our economics change there may even become very fuzzy areas between retail and office as times change. So it is just a lot more flexible. The numbers with the vacancy rate is just too mechanical and it may not give people a hearing process. With a conditional use permit you also have a chance to involve more people in what is going on and it reflects reality more. City of Palo Alto 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3O 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Ms. Grote: As.a suggestion, there has been some discussion about who should hear the conditional use permit. If you want to discuss and perhaps recommend that these conditional use permits come to the Planning Commission for their review and recommendation then you can include that. Commissioner Cassel: Every one of them? Ms. Grote: In Midtown. Ms. Furth: It would only be Midtown’s. Commissioner Cassel: I wouldn’t. It’s two years.. The appeal process comes to us, correct? Ms. Grote: That is correct. Commissioner Cassel: Many of these are very small projects or changes. Commissioner Schmidt: I would say that I support also the conditional use permit process as having flexibility and less mechanical. I think the vacancy rate is okay for Downtown but less applicable here. I also support the addition of the third condition that was recommended by Staff. MOTION Commissioner Packer: I move that we use a conditional use permit process to determine whether there should be ground floor office space in Midtown with the addition of the third condition that the use be neighborhood serving. Ms. Furth: We understand that this would be an occasion where either a retail space is proposed for conversion to an office use or an existing office use left and a new one wanted to come in. In both cases they would be coming for a CUP. Commissioner Packer: Yes. SECOND Commissioner Cassel: I’ll second it. Commissioner Burt: Discussion? I would like to have clarification on the process by which the conditional use permit would be reviewed. Lisa had mentioned the alternative of having these limited number of conditional uses which are conversion to office, or change of ownership as being the only ones that would prospectively come before the Planning Commission in this alternative approach of the Commission reviewing them. Is that correct? City of Palo Alto 44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Ms. Grote: The process currently as in the interim ordinance would be that if you have an existing office and it is a change of ownership only it doesn’t need a conditional use permit. However, if it is a new office use either one kind of ~ffice going to a different kind of office or a retail or personal service wanting to convert to an office use, both of those cases would require a conditional use permit.. At this point that would be heard by the hearing officer and is a Director’s decision with the appeal coming through the Planning Commission and then on to City Council. Commissioner Burr: Who can initiate the appeal? Ms. Grote: Any interested party. Commissioner Burr: So if there were no objection then there would not be a need to go before the Planning Commission but that one person appealing it would trigger going before the Planning Commission? Ms. Grote: And the City Council, that is correct. Commissioner Burr: In that case I would agree with that process being adequate to meet the concerns of the surrounding neighborhood. Commissioner Packer: I believe the notice process is for owners 300 feet. Ms. Grote: It is owners and residents or occupants within 300 feet of all edges of the site. Commissioner Packer: You had suggested that including in your practices that neighborhood associations would be notified? Ms. Grote: That’s correct. Commissioner Packer: So if we could make that part of the motion. If you don’t want to put that in the ordinance that’s fine but if it is part of your practices that the neighborhood associations be notified I’d like to amend my motion. Ms. Grote: That’s fine. Commissioner Cassel: I have one other clarification that I’d like. It is 300 feet from the business property edge, right? So that if you would check and make sure there isn’t a three hundred foot space that doesn’t hit any residences. Does it make sense that it is possible? It may not be possible I’m not looking at the map at the moment. Ms. Grote: We can check but also if we are notifying the neighborhood associations then they would have the opportunity to comment and to pass the word. City of Palo Alto 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Commissioner Cassel: Neighborhood associations have very great value but they do not represent all of the neighbors in an area. There is a lot of value to what they do but they represent a certain segment only. Ms. Grote: As an alternative we could look at 300 feet from the edge of this district rather than the property itself. Commissioner Cassel: If that’s allowed it would be more helpful, I think. Ms. Grote: You could make that a recommendation. MOTION AMENDED Commissioner Packer: I’ll accept that as being added to my motion. Commissioner Cassel: As a friendly amendment. Commissioner Packer: As a fi’iendly amendment. Thank you. .Commissioner Burt: Any other discussion? Commissioner Cassel: I think I needed to make some comments because what we say here actually does go on to City Council. Just passing so we could go home would be nice but not enough. My concern here has been that the definition of office is very restrictive. I think the CUP will give us a chance to look at this to make sure that this definition is broad enough to include new or different ideas of offices. It may only be for two years but just the same life is changing fairly rapidly. We look at this definition that you were using and we haven’t quite looked at people coming to the service as an important aspect. I know that’s hard to judge but on the other hand I found those limits very limiting and very narrow. That was my feeling.: That this process needs to look at what really does serve the neighbors. Commissioner Burt: Lisa, can you briefly review the criteria you had used for what is an office use? Ms. Grote: The third finding that would be included in the conditional use permit would require the applicant to show that the use would enhance the center or the district as a neighborhood resource and would not diminish the retail strength or character of the district. So yes, it is a statement that requires the applicant to bring forward that kind of information. Commissioner Burt: Phyllis, you think that is too narrow of a definition? Commissioner Cassel: I want to make sure that that’s what they are using. It is very easy to interpret these things more tightly. So I just wanted to make a comment that it needs to be in that vein. I just keep running into these uses that I consider neighborhood uses that other people don’t seem to. Charleston Center is a good example. They have a medical supply place that some people don’t consider neighborhood serving. Boy I have been glad, more than once, that City of Palo Alto 46 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 1 that was there. I often use that shopping center. I don’t go by foot. Yes it serves the region and 2 I don’t think we have any shopping centers in Town that serve only the neighborhood. I think 3 that is what we are going run into. The trophy shop over in Alma Plaza doesn’t generate a lot of 4 traffic, it serves every baseball and football team in Town but it also serves every baseball and 5 football team up and down the Peninsula. It’s the same case with that. So I’m concerned that our definition looking at that we recognize that some uses serve the area and some uses at the same time serve us as neighbors. We are very fortunate if you’ve never had to use that store. Commissioner Packer: Phyllis, one of the problems that I think we are having with the definition of neighborhood serving isthat it is focusing on the offices and we are not having to struggle with the definition of these retail services because that is already in the zoning ordinance. Commissioner Cassel: I keep going back to retail because I keep being concerned that stuff gets determined as office and region and not as neighborhood serving. Commissioner Burt: I want to make sure I’m understanding it right. The sorts of retail services Phyllis was describing would not require a conditional use permit, correct? Ms. Grote: That’s correct. They would not require a conditional use permit. They are considered retail uses so we wouldn’t be in a discussion as to whether or not they are neighborhood serving. Commissioner Burr: So my concern is actually in the other direction. That the definition that would be at Staff’s discretion is actually quite broad. I feel that the Staff has articulated a strong sense of what really would constitute serving that neighborhood center and that the appeal mechanism would afford the neighborhood an opportunity to challenge any decision that they thought was too broad on what was being allowed in an office use or one of these other conditional uses. So I do have concerns about the language as it is written but I think that the process provides the safeguards that would allow me to support the proposal. Any other discussion? MOTION PASSES Commissioner Burt: All in favor? (ayes) Commissioner Packer: Do we need to have a discussion on whether or not to include a definition of neighborhood serving? Ms. Grote: Yes, I think that would be a good discussion to have. Just to reiterate that it is different than the third CUP finding. The third finding you’ve just recommended approval of talks about enhancing the district and not diminishing the retail strength of the district. Now the other question is do you want a neighborhood serving definition. Our recommendation has been to delete that because it is not complete at this point but that’s the discussion you probably want tO have now. City of Palo Alto 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Commissioner Packer: It is difficult because if we delete it I don’t know if it will make it harder to evaluate the conditional use permit. So I don’t know if it is better to have something that is somewhat incomplete in the interim that is only for two years. Maybe enhance it as you mentioned earlier with some language from the Comp Plan. I picked up a phrase that isn’t in the definition here that the businesses oriented toward every day needs. I don’t know. But having no definition in the ordinance could be a hole that you might be sorry you don’t have filled. Commissioner Burr: I felt that we’ve needed an update to this definition for some time. As an alternative to essentially deleting a definition for the next two years what does Staff think about their ability to come back with a preliminary update or that we have something that well precedes the entire zoning code update to try and put some greater definition into what we mean by neighborhood serving? Mr. Gawf: A couple of thoughts and I’m sure others will have some too. One is if it was relatively easy to do we would already have done it. We’ve struggled with this and that is where we started, we wanted to do it. As Lisa, I think very well, explained in her presentation when we started applying it in real life situations it became very difficult. I put a lot of weight on that additional finding that you’ve added to the CUP review. I think that is where it is going to capture some of it. The other is we’ve raised the issue. This is one that I think as we work on the zoning code over the next couple of years that will be something that we will continue to think about and look at as we review projects. That will give us a better opportunity to come up with something more definitive. The final comment I’d make is one of the things that I keep cautioning us as Staff and would ask you as the Commission is the more tangential projects we get the less Staff time and effort we can put on updating the zoning code itself. So, that’s our focus and that’s why we’ve recommended what we have. MOTION Commissioner Cassel: I’ll move that we delete the neighborhood serving definition as recommended by Staff. SECOND Commissioner Schmidt: Second. Commissioner Burt: Ed, if you were to spend Staff time on updating the definition prior to the zoning code wouldn’t that then replace the need to spend that time within the zoning code update? Mr. Gawf: It does but it is out of sequence.. These issu6s are going in a pattern and we’re doing them a step at a time. What we’d be doing is again be out of sequence. Whether that is a huge difference or not, it is just one that I’m constantly reminding myself and Planning Staff that we need to make sure that we continue to be focused on the zoning code update. ¯Commissioner Burr: If we were to recommend that Staff include an updated neighborhood serving definition how would that fall in line in the chronology of this ordinance? It seems like City of Palo Alto 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 you might not be able to achieve that before Council would adopt this. Would there still be a means to adopt this ordinance and then in some specified period of time after that, three months or whatever, come back to Commission and Council with a update to the neighborhood serving definition? Ms. Grote: Because these are interim ordinances the Council needs to take final action on them by the 30th of April of this year. The 23rd is the date that they will do that. There isn’t then an opportunity for them to go back in within that 22 or 24 months and change the ordinances again. So their action on the 23rd will be final. Commissioner Burr: If they were to adopt within the ordinance that the businesses will be reviewed according to a definition of neighborhood serving services are you saying that legally they could not change that definition after that time? Ms. Furth: It is highly undesirable not that it is impossible. Commissioner Cassel: Can I call the question? Do we need to vote on calling the question? Commissioner Burr: Yes. All in favor of calling the question? (ayes) Opposed? The question has been called. MOTION PASSED Commissioner Burr: All in favor of the motion? (ayes) Opposed? (nay) 3-1 Ms. Furth: One possible way of addressing this concern is that we sometimes write policy statements as background for things like conditional use permits. So while the test proposed for the conditional use permit isn’t is this business neighborhood serving, it is how would this business fit into the effectiveness of the area as a neighborhood center. That is a possible format and forum in which to talk about what you think the relevant criteria are. Commissioner Burt: I think that sounds appealing. If we were to want to incorporate a future policy statement on that, does that need to be included in our motions this evening? Mr. Gawf: Yes. My suggestion is you vote on the motion that has been made and then if someone would like to make a conditional motion. Commissioner Burr: We already voted on the motion. Mr. Gawf: I thought it was just calling the question. Okay. I think it does require then a separate action. Commissioner Burr: How do Commissioners feel about supporting a separate policy statement on defining neighborhood serving? City of Palo Alto 49 1 Ms. Furth: A policy statement to assist the City in deciding whether or not to issue a use permits 2 for new offices in this center. 3 4 Commissioner Cassel: I am really unable to grasp anything more this evening than what I have 5 already grasped. So any new stuff needs to come up to another session. It is 11:00 p.m. and I 6 need to be sure we’ve finished what is on the agenda for tonight and go home. If we have new 7 items we want to discuss to put them on an agenda for the next time. I feel like I’m not prepped 8 to think through that process that you are suggesting at this time. 9 10 Commissioner Burr: Any other Commissioners wish to comment on that? 11 12 Commissioner Packer: I think it is a new item. I don’t have the energy to discuss it now. 13 14 Commissioner Burt: I’ll go along with the rest of the Commission then. What other remaining 15 issues do we have to address, if any? 16 17 Ms. Grote: I think you have completed the item. Thank you very much. 18 19 Commissioner Burr: Thank you. 20 21 Wrapping up the meeting, any Reports From Committees? 22 23 REPORTS FROM COMMITTEES. 24 25 Commissioner Burt: Any Report From Officials? 26 27 REPORTS FROM OFFICIALS. 28 29 Commissioner Burt: We have minutes f~om January 31, 2001 for approval. 30 31 APPROVAL OF MINUTES. 32 33 Commissioner Packer: I can’t vote I wasn’t there. 34 35 Commissioner Cassel: I can only vote on half of it so we may have to move this to the next 36 meeting. 37 38 Commissioner Burr: Why don’t we carry that over to the next meeting. 39 40 The next meeting has been postponed. 41 42 Ms. Grote: Actually there are a couple of items on that tentative agenda. One is the 43 Comprehensive Plan status report update. The other is a tentative map for 300 Homer. So there 44 are two items on the April 11, 2001 meeting. 45 46 NEXT MEETING. City of Palo Alto 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Commissioner Burt: Okay our next meeting will be April 11, 2001 Anything else? Mr. Gawf." Yes. Let me just summarize what I think you’ve done on Midtown. As I understand it you’ve recommended basically in support of the interim ordinance with two modifications. One is to delete the neighborhood serving definition and the other is to change the noticing requirement. Basically, you recommend to the Council endorsement of the interim ordinance with the CUP. Commissioner Burr: Yes. Thank you. The meeting is adjourned ADJOUNED: 11:00 P.M. City of Palo Alto 51