HomeMy WebLinkAbout2001-11-13 City Council (3)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:NOVEMBER 13, 2001 CMR:416:01
SUBJECT:GROUND FLOOR RETAIL PRESERVATION - LIMITS ON
REPLACEMENT OF EXISTING RETAIL USES WITHI OFFICE
USES AND PHASE-OUT OF NONCONFORMING GROUND
FLOOR OFFICES IN DOWNTOWN AND CALIFORNIA AVENUE"
AREAS:
CITYWIDE RESTRICTIONS IN COMMERCIAL DISTRICTS
ON THE CONVERSION OF GROUND FLOOR RETAIL AND
SOME SERVICE USES TO OFFICE USES; AND
CHANGES TO THE NONCONFORMING USE SECTIONS OF
THE ZONING ORDINANCE FOR THE DOWNTOWN
COMMERCIAL GROUND FLOOR (CD)(GF), (18.50) AND
RETAIL (R) (18.46) DISTRICTS REQUIRING DISCONTINUED
AND NONCONFORMING USE TO BE REPLACED WITH
CONFORMING USES.
REPORT IN BRIEF
This report addresses two distinct aspects of a program to reduce replacement of
consumer-oriented retail uses with office, uses. The first of these would prohibit the
conversion of existing ground floor retail, personal service and automotive service uses to
office use in commercial districts citywide. This restriction would preserve existing
ground floor retail uses and other uses that are viewed as neighborhood serving in
commercial districts citywide. The second aspect would further strengthen the retail
environment in the two areas in the City that already have ground floor use restrictions:
Downtown and California Avenue. Although the two aspects of the issue are distinct,
they are both addressed in this report because they both relate to the overall vitality of the
retail environment in Palo Alto.
CMR:416:01 Page 1 of 16
Staff recommends amendment of specific sections of the Palo Alto Municipal Code
(PAMC) so that existing retail and other service uses in commercial districts citywide
would be retained and new ground floor office uses would be allowed on the ground floor
of commercial districts citywide only when:
1)
2)
3)
4)
The space involved was an office use on March 19, 2001;
The space involved was not used for retail, personal service or automotive service
on March 19, 2001;
The space involved was vacant on March 19, 2001; or
The site is covered by a specific plan or coordinated area plans that allows ground
floor office use.
Staff recommends thatchanges to the current ground floor regulations in the Downtown
and California Avenue areas be deferred to the Zoning Ordinance Update currently
underway so that more data can be gathered and considered. Conducting research and
public outreach for these areas would add several months to the timeline for the Zoning
Ordinance Update.
Seven alternatives to the staff recommendations are included in the report. They range
from allowing conditional use permit applications for conversions of existing retail space
to office uses in commercial districts citywide, to creating specific zoning categories for
preserving desired uses, to deferring or dropping all modifications to the existing
regulations.
CMR:416:01 Page 2 of 16
RECOMMENDATION
Staff recommends that the City Council:
Amend the Zoning Ordinance to prohibit the conversion in commercial districts of
ground floor retail uses, including personal and automotive service uses, to medical,
professional, administrative or general business offices. These changes would affect
neighborhood commercial (CN) districts, with the exception of Midtown Shopping
District and Charleston Center, which are addressed by Interim Ordinances; service
commercial (CS), community commercial (CC), and downtown commercial (CD)
zoning districts (Attachment A).
Defer amendments to the California Avenue retail district (CC(2)(R)(P)) and the
Downtown ground floor district (CD(GF)(P)) regulations to the Zoning Ordinance
Update so that complete information regarding vacancy rates and other land use data
can be assessed prior to making a final decision.
The Planning and Transportation Commission recommends that the City Council:
1. Amend the Zoning Ordinance to prohibit the conversion of any ground floor use to
office use in commercial districts citywide and add a six-month check-in process.
Amend the California Avenue and Downtown Ground Floor requirements so that
nonconforming office uses would be required to convert to conforming uses when the
office use vacates the space, and add a six-month check-in process.
BACKGROUND
There are two distinct aspects to potential restrictions on ground floor office uses. The
first is the preservation of existing ground floor retail uses and other uses that are viewed
as neighborhood serving. This aspect was raised in a March 15, 2001 memorandum from
four Council members to the entire City Council (see Attachment C). Until recently, there
has been considerable pressure on existing retail, personal service and other service-
oriented uses to convert to office use. These conversions have added more jobs to an
already job-rich environment and have eroded the existing retail base in many
neighborhood and service commercial districts. The erosion of the retail base leads to a
lack of goods and services for the surrounding residential areas and is contrary to the
intent and purpose of commercial zoning. It also leads to a loss of sales tax revenue for
the City’s general fund.
The second aspect of the issue is that in the Downtown and California Avenue areas there
are already ground floor use restrictions in place that allow existing non-conforming
ground floor offices to change from one type of office or non-conforming use to another
type of office or non-conforming use. This aspect was not raised in the colleagues
memorandum referenced above, but was commented upon by Council Members,
CMR:416:01 Page 3 of 16
residents and business owners as part of a general dialogue regarding the retail and
service use environment in the City.
Both of these situations undercut the sense of community in neighborhoods and impact
the ability of local residents to use local businesses. In addition, in those areas where
offices are permitted on the ground floor, the relatively more expensive lease rates for
office uses inflate the lease rates for retail businesses.
Although the ordinances presented with this report are separate and were generated from
different sources, they are presented together because they are both related to the overall
vitality of theretail environment in Palo Alto. Taking action on one aspect of the issue,
however, does not require action on any other aspect of the issue. The "Alternatives"
section of this staff report outlines several different actions and combinations of actions
that the City Council may take regarding this multi-layered issue.
DISCUSSION
Prohibiting the Conversion of Existing Retail and Service Uses to Office Use:
The City Council and community have been concerned about the loss of existing ground
floor uses that are considered retail or service-oriented in all commercial districts
citywide. The March 15 Council colleagues’ memorandum, presented while the City was
responding to concerns about retail preservation in the Midtown area, outlines seven
possible elements of an ordinance which would prohibit the conversion of existing
ground floor retail and service space to office use (Attachment C). These elements are
summarized below in italics, followed by clarification of staff’s understanding of the
intent of each element. Recommendations for action on each the elements follows the
Prohib# existing retail uses in commercial zones from converting to office use.
Staff understands the term "retail use" to include both retail uses as defined in the
PAMC and other uses such as personal services and automotive uses that
contribute to the retail vitality of an area. The first page of the memorandum refers
to the loss of Ellison’s Auto on Alma Street as one of the recent notable
conversions from retail to commercial office. Personal services, which included
businesses often viewed by the public as "retail," have been included in staff’s
analysis because they add to the pedestrian use of an area and operate similarly to
retail uses.
The prohibition would apply to those retail services operating as of March 19,
2001 and for which no application involving a change of use has been submitted
to the City by March 19, 2001. Staff proposes to exclude from any new
restrictions any building project for which a completed application for
Architectural Review or other planning entitlement was submitted prior to March
19, 2001. Conversions to office space which lawfully took place after March 19,
CMR:416:01 Page 4 of 16
2001 without the need for any planning entitlements and which are completed
before the effective date of a new ordinance would become lawful nonconforming
uses under the new ordinance.
The City shall establish an appeal process to allow conversion in cases of
financial hardship or showing that the facility is unsuited for successful retail use.
Existing retail service facilities can be rebuilt to include offices as long as the
retail square footage is not reduced or encompasses the entire ground floor.
Retail services that are grandfathered in as non-conforming or are in the process
of being amortized out are not to be protected under this ordinance.
o Specific Plans or Coordinated Area Plans will supercede this ordinance. As such
this ordinance will not take effect in the SOFA areas as that CAP is expected to be
completed soon. Phase I of the SOFA Coordinated Area Plan has been adopted;
formal public hearings on Phase II have not yet begun. Staff assumes that the area
in Phase II of the SOFA CAP will be covered by this ordinance until such time as
the Phase II Plan is in effect.
The basic definition of retail services in the PAMC would be continued. Staff
assumes that, along with the uses included in the definition of retail found in the
PAMC, personal services and automotive services would be included under this
ordinance as stated in item number 1 above.
In May 2001, staff provided the Planning and Transportation Commission with a five- to
seven-step work program about how the issue could be assessed (Attachment D, May 2,
2001 Planning and Transportation Commission (PTC) staff report and Attachment E,
Excerpt from the May 2, 2001 PTC minutes). Since that time, some City Council
Members asked for a simpler and shorter process, knowing that the issue would be
explored more fully as part of the Zoning Ordinance Update.
Given that direction, staff recommends that the seven elements in the March 15, 2001
memorandum be addressed in the following manner:
Elements numbers 1, 2 and 7: Amend the permitted uses section of the City’s four
commercial zones (CN, CS, CC, and CD) so that existing retail, personal services and
automotive spaces would be maintained and new office uses would be allowed on the
ground floor when:
1)The new ground floor office use replaces an office use in existence on March 19,
2001;
CMR:416:01 Page 5 of 16
2)
3)
4)
The new ground floor office use is in a space that was not used for retail, personal
service or automotive service on March 19, 2001 or thereafter;
The new ground floor office use is locating in a space that was vacant on March
19, 2001; or
A specific plan or coordinated area plan allows ground floor office use on the site.
The proposed ordinance changes that would allow these conversions is included in
Attachment A, in the sections addressing permitted uses. Additionally, an entitlement
application that had been submitted prior to March 19, 2001 which included the removal
of ground floor retail use and the replacement of that use with other permitted uses in the
district would also be allowed. This last provision regarding the entitlement process is
contained in the section of the ordinance concerning the effective date.
Element number 3: Staff does not recommend that an appeal process be established to
allow conversion in cases of f’mancial hardship; it does recommend a procedure to permit
conversion of retail space to office uses when the conversion would be "neighborhood
enhancing" and would not detract from the retail character of the area. The CUP would
evaluate the compatibility of the use with surrounding uses rather than financial hardship.
This option is discussed further in the "Alternatives" section of this staff report. Land Use
regulations are designed to encourage sound land use based on compatibility with
surrounding uses and Comprehensive Plan Goals for the City. While the City has
financial hardship exemption provisions when needed to assure the constitutionality of its
ordinances, that is not the case here. Retail zoning has long been recognized as a legal
land use classification and the City’s hearing processes are not well designed to evaluate
relative economic hardship, nor to ascertain when the hardship results from land use
regulations and when it is a result of other factors.
Since the ordinance only prohibits conversion of "retail" spaces to offices, staff believes
an additional exception for buildings that are not suited for retail use is not needed. Most
if not all of those buildings house office uses now.
Element number 4: The proposed ordinance permits rebuilding or remodeling of existing
retail buildings, with the addition of new ground floor office space, as long as the ground
floor retail space is not reduced. Alternatively, if the total ground floor area is reduced,
the previously existing retail space can be reduced as long as all ground floor space is
retail space.
Element number 5: Nonconforming retail uses that are located in zoning districts where
they currently would not be allowed, and those retail uses that will be amortized over
time, such as Fry’s Electronics, will not be protected by this ordinance. These uses will
continue to be governed by the nonconforming use section of the zoning ordinance
(18.94) or the use’s specific amortization schedule.
CMR:416:01 Page 6 of 16
Element number 6: Approved Specific Plans or Coordinated Area Plans will supercede
this ordinance. Specific Plans or Coordinated Area Plans that are adopted after
implementation of this ordinance will also supercede this ordinance.
Element number 7: See element number 1.
Public Input and Response to the Draft Ordinance:
The Planning and Transportation Commission held three public meetings on the potential
prohibition of converting retail, personal service and automotive service to office use:
May 2, 2001, August 8, 2001 and August 29, 2001 (see Attachments E, G, and H for
meeting minutes). The Commission unanimously passed a motion (with three
Commissioners not participating due to conflicts of interest) that recommended
prohibiting all ground floor non-office uses from converting to office use. The
Commission concluded that to only prohibit the conversion of retail, personal service and
automotive service uses would put more pressure on other types of uses to convert to
office, especially residential uses. It supported the draft ordinance presented at the time,
based on new ground floor offices not being permitted unless it was an existing office
converting to another office, or an office permitted by a Specific Plan or Coordinated
Area Plan. It did not include the other exceptions recommended by staff in this report to
Council. In addition, the Commission recommended that there be a six-month check-in to
evaluate how effective the changes are and that the SOFA II area be covered by the
ordinance until such time as Phase II of the Plan is adopted.
Since the Planning and Transportation Commission hearing, staff has modified the draft
ordinance to preserve only pre-existing retail, personal and automotive service uses, so
that it more accurately reflects the points identified in the colleagues’ memorandum and
would not expand the City Council direction.
A public meeting was held with property owners, business owners and interested parties
on October 30, 2001 (see Attachment I for full meeting minutes). Approximately 25
people attended the meeting. Generally, the property owners at the meeting were not in
favor of the ordinance changes. There was considerable discussion about how the
economic conditions had changed since March 15 of this year, with most of the concem
being a belief that an increased demand for office space no longer existed. The consensus
of the property owners that spoke was that the ordinance should not be pursued at this
time.
One attendee spoke in favor of the ordinance and stated that she hoped the concems
about the Neighborhood Commercial (CN) districts and the need for neighborhood
serving uses in those districts would not be lost in the overall process and that perhaps the
CN district could be dealt with separately from the other more intensive commercial
districts.
CMR:416:01 Page 7 of 16
Modifications to Existing Ground Floor Restrictions in Downtown and Califomia
Avenue Areas:
The second draft ordinance concerns the Downtown and California Avenue business
districts, which are both successful retail centers. This issue was not included in the
March 15, 2001 colleagues’ memorandum. It was raised by business owners and
residents along with earlier concerns raised about the Midtown Shopping District and
Charleston Center.
Land Use goal L-4 in the City’s Comprehensive Plan references retail centers as
"inviting, pedestrian-scale centers that offer a variety of retail and commercial services
and provide focal points and community gathering places for the City’s residential
neighborhoods and employment districts." The Downtown is defined in the
Comprehensive Plan as a regional center with commercial activity of citywide and
regional significance including a mix of shopping, office and some housing. Two- and
three-story buildings with ground floor shops characterize regional centers. The
California Avenue business district is identified in the Comprehensive Plan as a multi-
neighborhood center, which is a retail shopping center or district that serves more than
one neighborhood with a diverse mix of uses including retail, service, office and
residential. One- and two-story buildings with storefront windows, entries and outdoor
seating areas create a pedestrian friendly atmosphere. Plazas and parks provide public
gathering spaces around which retail uses are clustered.
To establish and maintain strong retail centers, ground floor retail restrictions are already
in place in parts of Downtown and in the California Avenue Business District (GF and R
zones, respectively). These overlay districts have resulted in the retention of a strong
retail and service presence that contributes to the stated goals of the City’s
Comprehensive Plan. The protection of the retail uses in these areas has become a critical
quality of life issue for local residents and businesses in Palo Alto and other cities in the
region.
One issue remains outstanding in both the Downtown and California Avenue business
districts, however. Existing nonconforming ground floor uses are currently allowed to
"roll-over" or change to another nonconforming use. This allowance for the continuation
of nonconforming uses prevents conforming retail and personal service and automotive
service uses from locating in appropriate ground floor spaces. The second draft ordinance
presented with this report (Attachment B) modifies the nonconforming use sections of the
Palo Alto Municipal Code (PAMC) for these two areas (Chapters 18.50 and 18.46) to end
such "roll-overs."
The effect of these modifications would be that as a ground floor office use vacates space
in the Downtown or California Avenue Business District, opportunities for retail growth
would occur, strengthening the retail and pedestrian-friendly character of the area. Retail
rents typically are less than office lease rates and artificial inflation occurs when a ground
CMR:416:01 Page 8 of 16
floor space can be either office or retail. Ordinarily, making changes of the sort described
above would result in increased opportunities for new ground floor retail and personal
service uses, and existing conforming ground floor uses would be maintained. In the
current economic situation, however, this is not the case. Retail rates are frequently equal
to office lease rates.
The specific changes in the PAMC for the Downtown and California Avenue business
districts that would be needed should the City Council decide to implement such action
include adding a provision which states that if there is a clear intent on the part of a
nonconforming business owner or property owner to abandon the nonconforming use
(e.g. an expired lease) the replacement use must be a conforming one. This would prevent
the replacement of a nonconforming office use that goes out of business with another
nonconforming office use. In addition, the twelve-month period now applicable to
discontinued uses would be shortened to 90 days. This means that if any nonconforming
ground floor use ceases for a continuous 90-day period, it would be considered
abandoned and can only be replaced with a conforming use (Attachment B).
Public Input:
The Planning and Transportation Commission held three public meetings on the potential
modifications to the Downtown and California Avenue: May 2, 2001, August 8, 2001,
and August 29, 2001 (see Attachments E, G and H for meeting minutes). The
Commission unanimously supported the proposed amendments as presented at that time
with the provision that there be a six-month check-in to evaluate how well the ordinance
was working. The Commission believed the six-month evaluation was especially
important given the changing economic conditions.
The potential changes to the existing GF and R district regulations were also discussed at
the October 30, 2001 public meeting (see Attachment I for full meeting minutes). Again,
the consensus of the property owners was that the vacancy rate is so high currently that
this is not the appropriate time to further limit ground floor non-retail uses. The
consensus of the property owners was that the market should be allowed to operate within
the existing parameters of the GF and R zones and that changes should either not be made
at all or should at least be carefully considered and discussed as part of the zoning
ordinance update currently underway.
It should be noted that due to changed economic conditions, staff is recommending that
the City Council defer adoption of the ordinance amendments for Downtown and
California Avenue whereas when the item was considered by the Planning and
Transportation Commission, staff recommended approval of the changes for those two
areas. Due to the changed economic conditions, staff now believes that the City Council
should defer the changes in these two areas to the Zoning Ordinance Update, so that
accurate land use data can be compiled and analyzed prior to the City Council making a
final decision.
CMR:416:01 Page 9 of 16
ALTERNATIVES TO STAFF RECOMMENDATION
One general concern raised by the property owners and developers is that the City could
become "over-retailed" if the above changes are implemented. Given the recent downturn
in the economy, the competition for retail space has diminished significantly. While the
preservation of ground floor retail space in selected business districts can be analyzed
fairly closely, it is more difficult to quantify the impacts when applied citywide. As a
result of the changed market, staff has outlined possible alternatives to the above
ordinance changes. These alternatives include:
Allow conditional use permit applications for the conversion of existing retail,
personal service and automotive service uses to office uses. This is a similar
approach to that used in the Midtown Shopping District earlier this year. A third
finding could be added to the two existing use permit findings, stating that if the
proposed office use is neighborhood serving and would not be detrimental to the
retail strength of the area and the City, it could be approved. This would allow
flexibility in considering uses that would complement an area and that would be
compatible with surrounding land uses.
Preserve specific desired uses such as auto services with specific zoning for these
types of uses. This approach would require development of one or more new zones
tailored to address specific uses and development standards for those uses. If this
is an approach the City Council chooses to pursue, staff recommends wrapping the
effort into the Zoning Ordinance Update currently underway. It may not be
possible to design an ordinance that protects all sites currently used for automotive
services.
o Exempt the SOFA Phase II area from any of the ordinance requirements prior to
the Phase II plan being officially adopted. This would allow conversion of
automotive service and other retail uses to continue until SOFA II is adopted.
Separate the CN zone from the rest of the commercial zones and address that zone
independently.
Immediately adopt modifications for the Downtown and California Avenue areas
regarding the conversion of nonconforming office uses to conforming retail and
personal service uses (Attachment B).
Defer to the Zoning Ordinance Update all of the proposed modifications for
preservation of retail and some service uses in all commercial zones as well as the
proposed modifications in the GF and R combining districts.
Adopt and implement various combinations of alternatives 1-6.
CMR:416:01 Page 10 of 16
RESOURCE IMPACT
There will be no significant impact on staff resources as a result of the proposed changes
to the PAMC as currently recommended by the Planning and Transportation Commission
or those recommended by staff. Training, conducted by existing in-house staff, will occur
to inform all planning staff of the new requirements. No new staff would be needed to
train existing staff or to implement the amendments.
If an exception or CUP process is included in the fmal PAMC amendments, staff time
will be required to evaluate and process applications for the exception or CUP, hold
public hearings and make required findings. Again, no new staff would be needed, but
time would need to be factored into existing staff workload to handle the exception or
CUP applications.
If all or some of the proposed modifications are deferred to the Zoning Ordinance Update
currently underway, additional analysis will be required and will add to the scope of the
update effort. Existing staff can absorb the additional work, although additional time will
be needed to complete the analysis and conduct public outreach. These efforts could add
several onto the Zoning Ordinance Update effort.
POLICY IMPLICATIONS
Prohibiting the conversion of existing ~round floor retail uses in all commercial districts
as well as changes for Downtown and the California Avenue Business District are
consistent with stated goals, policies and programs in the Comprehensive Plan.
Specifically, Land Use goal number 4 addresses the need for a variety of retail and
commercial services in all centers. Additionally, Policy L-19 calls for the encouragement
of a mix of land uses in all centers, including housing and an appropriate mix of small-
scale local businesses. Policy L-28 calls for maintaining the existing scale, character, and
functions of the California Avenue business district as a shopping, service, and office
center intermediate in function and scale between Downtown and the smaller
neighborhood business areas. Many of the other policies and programs that supplement
Land Use goal number 4, call for the preservation and enhancement of small-scale
pedestrian friendly local businesses in all commercial areas.
TIMELINE
If the City Council takes action to amend or add to existing ordinances on November 13,
2001, a second reading of the ordinance amendments would occur on December 3, 2001
and the changes would become effective 30 days later on January 2, 2002. It is important
to note, however, that the right to convert a retail, personal service or automotive service
use in commercial districts citywide would be based on the use existing in a specific
location on March 19, 2001 and not on the use in place on the date the ordinance
becomes effective.
CMR:416:01 Page 11 of 16
ENVIRONMENTAL REVIEW
The proposed modifications to the PAMC are exempt from the California Environmental
Quality Act pursuant to Section 15305 (Minor Alterations in Land Use Limitations) of
the CEQA Guidelines.
ATTACHMENTS
A. Ordinance Restricting Conversion of Ground Floor Retail and Some Service Uses to
Office Uses in Commercial Districts Citywide
B. Ordinance Requiting Nonconforming Ground Floor Office Uses in the Downtown
and California Avenue Areas That Cease or Are Abandoned Be Replaced with
Conforming Ground Floor Office Uses
C. March 15, 2001 Memorandum from Council Members to the City Council Re:
Prohibition on Converting Retail Space to Office Space
D. May 2, 2001 Planning and Transportation Commission Staff Report
E. Excerpt Minutes from the May 2, 2001 Planning and Transportation Commission
Meeting
F. August 8, 2001 Planning and Transportation Commission Staff Report, without
attachments
G. Excerpt Minutes from the August 8, 2001 Planning and Transportation Commission
Meeting
H. Excerpt Minutes from the August 29, 2001 Planning and Transportation Commission
Meeting
I.Minutes from the October 30, 2001 Public Meeting with Property Owners, Business
Owners and Interested Parties
PREPARED BY:
Chief Planning Official
DEPARTMENT HEAD REVIEW:
LES WHITE
Director of Planning and Community Environment
CITY MANAGER APPROVAL:
EMIL~Y-HARRI SON
Assistant City Manager
CMR:416:01 Page 12 of 16
cc:Steve Quadro, Piazza’s Fine Foods, 3962 Middlefield Road, Palo Alto, CA 94303
Fred Alami, Charleston Cleaners, 3900 Middlefield Road, Palo Alto, CA 94303
Jerry Benton, Palo Alto Orthopedic Co., 3910 Middlefield Road, Palo Alto, CA 94303
Mark Sobin, Chamber of Commerce, 4274 Wilkie Way, Palo Alto, CA 94301
Hal Mickelson, P.O. Box 20062, Stanford, CA 94309
Matt Taylor, Knowhere Store, 2741 Middlefield Road, Palo Alto, CA 94303
Russ White, Yolke Corp., 2741 Middlefield Road, Palo Alto, CA 94303
Mike Haley, 79 Avalon Drive, Los Altos, CA 94022
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 943 03
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
JeffDeaton, 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 Sui.t~e 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 Car6, 2675 Middlefield Road, Palo Alto, CA 94306
Gary Flickinger, United Studio of Self Defense-Karate, 2675B Middlefield Road, 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
CMR:416:01 Page 13 of 16
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
Consumers Cooperative Society of Palo Alto, Inc., 2605 Middlefield Road, Palo Alto, CA
94306
Roxy Rapp, P O Box 1672, Palo Alto, CA 94306
Elizabeth Kuremin, 170 Rollingwood Drive, San Rafael, CA 94901
Gertrude Haley Trust, c/o 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
SouthlandCorp7-11#14315, P O Box 219077, Dallas, TX 75221
Mrs. Betty Zeh, 720 Colorado Avenue, Palo Alto, CA 94303
GeoffHicks, 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
GeoffProvo, 733 Colorado Avenue, Palo Alto, CA 94303
David Lyons, PayTrust 5675, P O Box 880418, San Francisco, CA 94188-0418
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
CMR:416:01 Page 14 of 16
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 Mgrnt. & 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 Middiefield 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 ShoppingCenter,
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
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
CMR:416:01 Page 15 of 16
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
Dorothy Bender, 591 Military Way, Palo Alto, CA 94306
Ron Theis, 507 Homer Avenue, Palo Alto, CA 94301
Joy Ogawa, 2305 Yale Street, Palo Alto, CA 94306
E. Gavenman and G. Gavenman, 321 Richelieu Court, Los Altos, CA 94022
A. Oeschger for Chilcote Trust Estate, P. O. Box 60058, Palo alto, CA 94306
Terry Shuchet, 290 California Avenue, Palo Alto, CA 94306
Jean Fiske, 3861 Corina Way, Palo alto, CA 94303
Steve Jarvis, 540 University Avenue, Palo Alto, CA 94301
Richard B. Reyes, 2417 Park Blvd., Palo Alto, CA 94306
Mark Sabin, 4274 Wilkie Way, Palo Alto, CA 94306
Stephanie Wansek, 235 Hamilton Avenue, Palo Alto, CA 94301
Mehmood Taqui, 3090 Middlefield Road, Palo Alto, CA 94306
Bruce Barry, 431 Florence Street, #220, Palo Alto, CA 94301
Donald Douglas, 101 California Avenue, Palo Alto, CA 94306
Nina Moore, 101 California Avenue, Palo Alto, CA 94306
Norman Weinstraub, 109 California Avenue, Palo Alto, CA 94306
Deborah Teixeira, 109 California Avenue, Palo Alto, CA 94306
Karen Holman, 725 Homer Avenue, Palo Alto, CA 94301
Jon Goldman, 172 University Avenue, Palo Alto, CA 94301
Jim Baer/172 University Avenue, Palo Alto, CA 94301
Bill Phillips, 2770 Sand Hill Road, Menlo Park, CA 94025
Carolyn Johnson, 660 Stanford Shopping Center, Palo Alto, CA 94304
Tracy Hutchison, Palo Alto Chamber of Commerce, 325 Forest Avenue, Palo Alto, CA
94301
Candace Peterson, Thoits Brothers, 629 Emerson Street, Palo Alto, CA 94301
CMR:416:01 Page 16 of 16
Attachment A
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO
ALTO AMENDING SECTIONS 18.04.030,18.41.030,
18.43.030, 18.45.030 and 18.49.050 OF THE PALO
ALTO MUNICIPAL CODE TO PROHIBIT THE CONVERSION
IN COMMERCIAL DISTRICTS OF GROUND FLOOR RETAIL
SERVICES TO MEDICAL,PROFESSIONAL,
ADMINISTRATIVE AND GENERAL BUSINESS OFFICES
The City council of the City of Palo Alto does ORDAIN as
fol!ows:
SECTION i.
A. The Planning Commission, after duly noticed hearing
held August 8, 2001, has recommended that the Pa!o Alto
Municipal Code be amended as hereinafter set forth in order to
prohibit the conversion in commercial districts of ground floor
retail servmces to medical, professional and genera! business
offices; and
B. The City Council, after due consideration of the
recommendation, finds that:
!. Retail service plays a vital role in the
livability of the City and is an essential element in providing
City residents with shopping convenience for their various
needs.
2. Retail service in the City’s numerous
commercial shopping areas is a critical component in the City’s
goa! of becoming a more walkable community.
3. The City is experiencing an unprecedented
sustained demand for office space. 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 commercia! areas. As a result,
buildings which traditionally have been used for retai! service
have been converted to office space.
4. This displacement of retail service imposes a
hardship on !ocal 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 quality of life.
011107 syn 0090863
5. Because existing retail service facilities
depend upon a concentration of such uses to maintain their
economic viability, continued loss of these uses would
jeopardize retail service in the City’s commercial districts.
6. The proposed amendments are in the public
interest and will promote the public health, safety and welfare.
SECTION 2. Section 18.04.030 of the Palo Alto Municipa!
Code is hereby amended to add subsection 18.04.030(a) (65.5) as
follows:
18.04.030 Definitions.
(a)
(65..5) "Ground f!oor" means the first floor which
is above qrade.
SECTION 3. Section 18.41.030 of the Pa!o Alto Municipal
Code is hereby amended as follows:
18.41.030 Permitted uses.
The following uses shall be permitted in the CN
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 homes, small day
care homes and residential care homes;
(d) Eating and drinking services, except drive-in and
take-out services;
(e) Home occupations,when accessory to permitted
residentia! uses;
(f) Lodging;
(g) Medica!, professional, and general business offices
!ocated on any floor other than the ground floor of a bui!dinq,
as limited by Section 18.41.050(i) ;
(.h) Medical, professiona!, and general business offices
!ocated on the qround floor of a buildinq, as limited by Section
2
011107 syn 0090863
18.41.050(1), which (I) have been continuously in existence in
that space since March 19, 2001, and, as of such date, were
neither non-conforminq nor in the process of beinq amortized
pursuant to Chapter 18.95 of this code; (2) occupy a space that
was not occupied by retail services; personal servicse, or
automotive service on March 19, 2001 or thereafter; (3) occupy a
space that was vacant on March 19, 2001; (4) are located, in new
or remodeled ~round f!oor areas built on or after March 19, 2001
if the qround floor area devoted to retail services personal
services, and automobile services does not decrease; or (5) are
on a site located in an area subject to a Specific Plan or
Coordinated Area Plan, which specifically allows for such ~roun~
floor medica!, professional and meneral business offices;
(i)Personal services;
(j)Retail services, excluding liquor stores;
(k) Reverse vending machines, subject to regulations
established by Chapter 18.88 of this code;
(1) Single-family uses, two-family uses, and multiple-
family uses; provided, residential uses shall not be permitted
in the Charleston Shopping Center or in the Midtown Shopping
District. For the purposes of this section, "Charleston
Shopping Center" is defined as all properties zoned CN and
bounded by East Charleston Road, Midd!efield Road, and Cubberly
High School; and "Midtown Shopping District" is defined as all
properties zoned CN in the vicinity of the intersection of
Co!orado Avenue and Middiefield Road which border Moreno, Bryson
and Colorado Avenues and San Carlos Court, or which border
Middlefield Road in the area extending from Moreno Avenue to San
Car!os Court;
(m) Neighborhood business services.
SECTION 4. Section 18.43.030 of the Palo Alto Municipal
Code is hereby amended as follows:
18.43.030 Permitted uses.
The following uses shall
community commercial district:
be permitted in the CC
(a) Accessory facilities
incidental to permitted uses;
and uses customarily
(b)
O11107 syn 0090863
Animal care, but excluding boarding and kennels;
3
(c)Business and trade schools;
(d)Churches and religious institutions;
(e)Convalescent facilities;
(f) Day care centers, large day care homes, small day
care homes and residential care homes;
(g) Eating and drinking services, except drive-in and
take-out services;
(h) Financial services, except drive-in services;
(i) Home occupations, when accessory to
residential uses;
permitted
(j)Hotels without kitchen facilities;
(k)Lodging;
(1) Medical, professional, and general business offices
!ocated on any floor other than the qround floor of a buildinq;
(m) Medica!, professional, and general business offices
located on the qround floor of a building, as limited by Section
18.45.070(f), which (I) have been continuously in existence in
that space since March 19, 2001, and, -as of such date, were
neither non-conformin~ nor in the process of bein~ amortized
pursuant to Chapter 18.95 of this code; (2) occupy a space that
was not occupied by retail services; personal service, or
automotive services on March 19, 2001 or thereafter; (3) occuDv
a space that was vacant on March 19, 200!;. (4) are located in
new or remodeled qround floor areas built on or after March 19,
2001 if the qround floor area devoted to retail services,
personal services, and automobile services does not decrease; or
(5) are on a site located in an area subject to a Specific Plan
or Coordinated Area Plan, which specifically allows for such
qround f!oor medica!, professional and qeneral business offices;
(n)Mortuaries;
(o)Personal services;
(p)Private clubs, lodges, or fraternal organizations;
(q)Private educational facilities;
O11107 syn 0090863
(r) Retail services and shopping centers;
(s) Reverse vending machines, subject to regulations
established by Chapter 18.88 of this code.
(t) Single-family uses, two--family uses, and multiple-
family uses.
SECTION 5. Section 18.45.030 of the Palo Alto
Municipal Code is hereby amended as follows:
18.45.030 Permit~ted uses.
The following uses shall be permitted in the CS service
commercial district:
(a) Accessory facilities and uses customarily
incidental to permitted uses;
(b) Administrative office services,as limited by
Section 18.45.070(f);
(c)
(d)
(e)
(f)
(g)small
family day care homes and residentia!care homes;
(h) Eating and drinking services, exceptdrive-in and
Anima! care, but excluding boarding and kennels;
Business and trade schools;
Churches and religious institutions;
Convalescent facilities;
Day care centers, large day care homes,
Financial services, except drive-in;
General business services;
Home occupations, when accessory to permitted
Hotels without kitchen facilities;
take-out services;
(i)
(j)
(k)
residentia! uses;
(l)
(m) Lodging;
Ol 1107 syn 0090863
(n) Medical, professional, and general business offices
located on any’ floor other than the ground floor of a buildinq,
as limited by Section 18.45.070(f);
.(o) Medical, professional, and qeneral business offices
!ocated on the qround floor of a buiidinq, as limited by Section
18.45.070(f), which either: (!) have been continuously in
existence since March 19, 2001, and, as of such date, were
neither non-conformin~ nor in the process of bein~ amortized
pursuant to Chapter 18.95 of this code, or (2) are located in an
area subject to a Specific Plan or Coordinated Area Plan, which
specifically allows for such qround floor medical, professional
and qenera! business offices;
(p)Mortuaries;
(q)Personal services;
(r)Private clubs, lodges, or fraternal organizations;
(s)Private educational facilities;
(t)Retail services;
(u) Reverse vending machines, subject to regulations
established by Chapter 18.88 of this code;
(v)Single-family uses, two-family uses, and multiple-
family uses.
SECTION 6. Section 18.49.050 of the Palo Alto Municipal
Code is hereby amended as fol!ows: The matrix entry for Medical,
professiona! and genera! business offices is hereby deleted in
its entirety and replaced with the fol!owing:
Uses
Medical, professional, and
general business offices
located on any floor other
than the ground floor of a
building
Medica!, professional, and
genera! business offices
!ocated on the qround floor
9f a .... buildinq, which (!)
have been continuously in
existence in that space
since March 19, 2001, and,
.~S of such date, were
neither non-conforming nor
CD-C CD-S CD-N
Permitted Permitted*Permitted**
Permitted Permitted*Permitted**
O11107 syn 0090863
in the process of beinq
amortized Dursuant to
ChaDter 18.95 of this code;
(2) occuDv a space that was
not occuDied by retail
services;Dersonal
servicse, or automotive
service on March 19, 2001
or thereafter; (3) occuDv a
sDace that was vacant .on
March 19, 2001; (4) are
located in new or remodeled
qround floor areas built on
or after March 19., 2001 if
the ground floor area
devoted to retai! services,
persona! services, and
automobile services does
not decrease; or (5) are on
a site located in an area
~ubject to a Specific Plan
or Coordinated Area Plan,
which specifically allows
for such ground floor
medical, professional and
qeneral business offices;
*As limited by Section i8.49.080(d) below.
** As limited by Section 18.49.090(d) below.
SECTION 7.The City Council finds that this
ordinance is exempt from the provisions of the California
Environmental Quality Act pursuant to Section 15305 (Minor
Alterations in Land use Limitations) of the CEQA Guidelines.
SECTION 8.If a completed application for
discretionary review, (or if no discretionary review is
required, for building permit), had been filed with the City
prior to March 19, 2001, for the conversion of groundfloor space
previously used for retail services, persona! services, or
automotive services to other uses, the converted space shal! be
treated as space occupied by uses other than retail services,
persona! services, or automotive services as of March 19, 2001.
SECTION 9.This ordinance shall be effective on the
thirty-first day after the date of its adoption. Any building
project for which a completed application was on file
Ol 1107 syn 0090863
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED:
Mayor
City Manager
Director of Planning and
Community Environment
011107 syn 0090863
Attachment B
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO
ALTO AMENDING SECTIONS 18.46.060 AND ADDING
SECTION 18.49.040(b) (3)OF THE PALO ALTO
MUNICIPAL CODE TO PROVIDE FOR THE IMMEDIATE
ELIMINATION OF DISCONTINUED NONCONFORMING USES
IN R RETAIL SHOPPING COMBINING AND GF COMMERCIAL
DOWNTOWN DISTRICTS
follows:
The Council of the City of Palo Alto does ORDAIN as
SECTION
A. The Planning Commission, after duly noticed hearing
held August 8, 2001, has recommended that sections 18.46.060 and
18.49.040(b) (3) of the Pa!o Alto Municipal Code be amended as
hereinafter set forth in order to provide for the immediate
elimination of discontinued nonconforming uses in R retai!
shopping combining and CD commercial districts.
B. The City Council, after due consideration of the
recommendation, finds that:
!. Nonconforming uses represent conditions which
should be brought into conformity as quickly as practicable
because the presence of such nonconforming uses undermines the
benefits to be derived from a comprehensive zoning plan.
2. The nonconforming use provisions of the Palo
Alto Municipa! Code recognize the right of a property owner to
continue a nonconforming use existent at the time the property
becomes subject to a new zoning ordinance, but prohibit any
expansion or extension thereof and contemplate the eventual
elimination of such uses through abandonment, obsolescence or
destruction.
3. With respect to R retail shopping combining
and CD commercial districts, the current provision requiring a
nonconforming use to be discontinued for a period of 12 months
before it is deemed abandoned is too !ong and does not
adequately fulfill the purpose of the Palo Alto zoning
ordinance, which is to achieve conformity and compatibility of
land uses.
4. it is in the best interests of the citizens of
the City of Palo Alto to shorten this time period and to phase
011107 syn 0090864
out immediately those nonconforming uses in R retail shopping
combining and CD commercial districts, which are discontinued
for any length of time.
5. The proposed amendment is in the public
interest and will promote the public health, safety and welfare.
SECTION2.Section 18.46.060 of the
Municipal Code is hereby amended to read as follows:
Palo Alto
18.46.060 Special requirements.
The following
apply in the R
district:
special requirements shall
retail shopping combining
Lawful conforming permitted uses or
conditional uses operating pursuant to a
conditiona!use permit which were existing on
April 26, 1984 may remain as grandfathered uses
and shal! not require a conditiona! use permit
or be subject to the provisions of Chapter
18.94. Such uses shall be permitted to remodel,
improve, or replace site improvements on the
same site for continual use and occupancy by the
same use; provided, that any such remodeling,
improvement or replacement shal! not result in
increased f!oor area, nor shall such remodeling,
improvement or replacement result in shifting of
building footprint or increased height, length,
building envelope, or any other increase in the
size of the improvement, or any increase in the
existing degree of noncompliance, except through
the granting of a design enhancement exception,
pursuant to Chapter 18.91. If a use deemed
grandfathered pursuant to this section is
discontinued for t~clvc consecutive months a
continuous period of ninety days, or if there is
otherwise evident a clear intent on the Dart of
the most recent prior user to abandon the
qrandfathered use,it shal! be considered
abandoned and may be replaced only by a
conforming use. A use deemed grandfathered
pursuant to this section which is changed to or
replaced by a conforming use shal! not be
reestablished, and any portion of a site or any
portion of a building, the use of which changes
from a grandfathered use to a conforming use,
Olll07 syn 009086~
2
shall not thereafter be
accommodate a conforming use.
used except to
SECTION 3.Paragraph (I) of subsection (a) of
Section 18.50.050 of the Pa!o Alto Municipal Code is hereby
added tO read as follows:
(3) If a grandfathered use deemed existing
pursuant to subsection 18.49.040(b) is
discontinued for twc!vc consccutive months a
continuous period of ninety days, or if there is
otherwise evident a clear intent on the part of
the most recent prior
qrandfathered use,it
abandoned and may be
conforming use. A use
pursuant to subsection
user to abandon the
shall be considered
replaced only by a
deemed grandfathered
18.49.040(b) which is
changed to or replaced by a conforming use shall
not be reestablished, and any portion of a site
or any portion of a building, the use of which
changes from a grandfathered use to a conforming
use, shall not thereafter be used except to
accommodate a conforming use. Notwithstanding
any intervening conforming use on a property
zoned CD and GF combining, any office use
existing on April 16, 1990, which also existed
as a lawful conforming use prior to August 28,
1986, may remain as a grandfathered use pursuant
to the provisions of ~subsection 18.49.040(b).
SECTION 4. The City Council finds that this ordinance
is exempt from the provisions of the California Environmental
Quality Ac~t pursuant to Section 15305 (Minor Alterations in Land
Use Limitations) of the CEQA Guidelines.
//
//
//
//
//
//
//
01 ! 107 syn 0090864
SECTION 5.This ordinance shall be effective on the
thirty-first day after the date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
Mayor
City Manager
Direcfor of Planning and
Community Environment
O11 I07 syn 0090864
MEM O:I~AND UlV!-
Attachment C
¯ C[~.Couno{l Coilea~s ’
Pr6hibitioz, on Conve~ing .~etail Sp~ce to..Of~.ce Spac~
May) ~d badk to ~e ~o~ a mon~ ~erea~er.(~d-I~e). T~s or~ancd process
nol ~tended to int~pt t~e ~dt~w~Ch~le~o~ ~o~d Floor ~et~ process.
be.conve~ed to c6~erdZ o~ceuse. .
Tb the extent legally pos~ibl% th~s p~ohtb[tionwould apply to those retail S~rvic~s
’ operatink as of March 19, 2001 and forwhich no application [uvol.vtug Ch~.u~e of
.use ha~ beefi submitted to.gae dty.1~y .March 19, 2001.. " ’
B. The City shall .establish ~ appo.~l" procesS. ~o allow, conv~on ~n o~ses of
-~ ~i~ h~ds~p or s~o~g th~ ~ fadl[~ ~s h~ed for such~s~ ret~l use.
4. E~g. r~ se~ces f~dl~ies b~ be rebuilt to ~clud~ o~ce~ as long ~
r~ squ=e f6otag~ is not reduged or encomp~ss~ ~e e~e~b~d floor..
of berg ~o~ed om (du~ to preious Co~dt a~on) ~e .no% tO be prote~d
compl~ted ~oon. ..’. ",’
: fo~ows: % use ~ngaged in pro~g r~g~’ s~e, ren*a~ s~ce, process~g, or
rep~. of items primly ~tend{d fov ~m~= or. ~ouse~01d qse," i.e:, ~ose
. sales ~or se~ee op.erafio~ whose p~ (not s01e) ougomer base is ~e end
user, ~ the cl~ca~on t~at "on-~e" sal~ ~e excluded ~om c6nsld~a~on..
Mayor Bakins intends to cal! a specia! meeting on this matter.
Attachment D
PLANNING DIVISION
STAFF REPORT
TO:PLANNING & TRANSPORTATION COMMISSION
FROM:Lisa Grote
Chief Planning Official
DEPARTMENT: Planning and
Community Environment
AGENDA DATE:
SUBJECT:
May 2, 2001
Discussion of groundfloor restrictions in all commercial zoning
districts Citywide.
RECOMMENDATION
This is a discussion item therefore no action is required by the Planning and Transportation
Commission (PTC) at this time. Staff recommends that the PTC review the information
outlined in this staff report and begin discussing the item, including a potential work
program and resource implications, at the May 2, 2001 special meeting.
PROJECT DESCRIPTION
The City Council would like the PTC to consider an ordinance prohibiting conversion of
retail services to commercial office uses in all commercial districts citywide. This
prohibition would apply to retail uses in the Neighborhood Commercial (CN), Service
Commercial (CS), Community Commercial (CC) and all Downtown Commercial (CD-C,
CD-S, and CD-N) zoning districts. It would not apply to retail uses that have been
grandfathered as non-conforming uses or are in the process of being amortized (see
Attaclunent A, City Council Memorandum from Mayor Eakins et al...) The City Council
referred this item to the PTC for its review and consideration prior to the City Council
taking final action.
SUMMARY OF SIGNIFICANT ISSUES
There are five essential aspects of this assigmr~ent:
1) Defining the scope of work;
2) Researching existing land uses and potential economic impacts;
Ciiy of Palo Alto Page ]
3)Outreach to property owners, business owners and residents at-large;
4)Evaluating impacts on staff resources;
5)Establishing a reasonable and achievable timeline for completion of the project.
The following outline summarizes the basic elements involved in each aspect. Each of these
will be modified and expanded as a result of the full PTC discussion on May 2, 2001.
Scope of Work
The problem that we are attempting to solve needs to be clearly defined and the terminology
used to discuss the problem needs to be clarified. The definition of retail services, personal
services and office uses will need to be clearly presented so that there is no confusion as to
the types of uses that are desired in commercial areas.
We will also want to identify a variety of ways to approach the problem. A simple
moratorium is one way to prevent further conversions. Allowing some use changes through
a conditional use permit process is another way to control conversions. A third potential
method is to prohibit certain uses in commercial districts, with some sort of relief
mechanism if specific conditions exist.
Research
We will need to create a database of existing land uses in all commercial districts citywide.
An existing database such as "MetroScan", which is a land use database created with Santa
Clara County information, is a starting point for such research. The level of accuracy of the
database is low, however, and must be verified through site visits. These site visits will
require that a staff pers0n be allocated to the effort. We will want to know how many retail
uses have been lost to commercial office use in the recent past. We wil! need to determine
how many years we want to collect this information for and create a method of actually
determining which uses have changed during that period of time. This task may be difficult
because Palo Alto does not have a business license or business-registry of any type. We can
potentially use "reverse directories", which list addresses and type of business at a specific
address as a substitute for business licenses.
In addition to land use information, we will need to collect economic information and gain
an understanding of the potential economic impacts of this type of action when
implemented on a citywide basis.
Outreach
Property owners, business owners and residents at-large will need to be notified of potential
prohibitions on conversions of retail uses to other uses in corm~aercial districts. Based on
the number of meetings that were required for the Midtown and Charleston areas when
outreach was conducted for that recent effort, a significant amount of time and staff
resources will be required to complete this part of the assi~marnent.
C[~y of Palo Alto Page 2
Resource Impact
Portions of approximately five staff members’ time will need to be allocated to this project.
A project manager will be assigned to coordinate the item. This should be someone at a
Planner or Senior Planner level because they will understand the existing zoning ordinance
and the potential ".tmpacts of land use changes. Because the potential change will eventually
be. incorporated in the updated Zoning Ordinance and will have land use policy
implications, the Chief Planning Official will also need to remain involved in the effort. A
Planning Technician or intern will be needed to assist with field visits and other types of
research. The Manager of Economic Resources Planning will also be involved in the effort
and will most likely need assistance from an economic consultant to estimate the type of
financial impacts that can be expected from such a change in uses. A more accurate
estimate of the needed resources can be made after the full scope of work is defined.
Thr~eline
An accurate timeline will be easier to establish once the scope of work is better defined. It
should be noted that undertaking this assignment now will impact the timeline of other
projects either currently underway or scheduled to begin in the near furore. The impact on
existing work in the Planning Division should be discussed at the May 2, 2001 PTC
meeting.
NEXT STEPS
Discuss the above items and recommend that staff either pursue the effort immediately or
conduct the assignment as part of the zoning ordinance update and forward that
recommendation to City Council.
ATTACHMENTS:
Attachment A- Office of the City Council Memorandum, dated March 15, 2001
COURTESY COPIES:
Susan Arpan, Manager of Economic Resources Planning
Prepared by: Lisa Grote, Chief Planning Official
Department!Division Head Approval: ~ ~ ~
Lisa Grote, Chief Planning Official
City of Palo Alto Page 3
T6: ""
, Oiiic~ of the C~ty ¢ounc~l
M B M 0:I~ AN D UIVf
spread througho~ .the city, ’are an. essentia! eleni~nt in p’royiding 6"ur resl..dems yith¯
shopping, convemenoe for their.various n~e~. Smaller r~tall servioe.~ in our numerous
neighborhood shopping ~reas dr& "a .critical oomponen% in our goal of be~oming.a more
.wakable oommuni’~y..
T~. 1.a~gest.~hreat to our.r~tail ~e.rvices is demafid: for oomni~roia! 6file.a% vdfli a.
’o6rrespond’.mg ia~e.ase in lobs. ".c0mmonly;"o~ce ~i~e pmvi~es.two .6~..th..r. ee.thnes.the -
per-square, loSt lease.r~v.~nue ~s r~tail, While many 1...ai~dlord% developers ~ntl property:
¯ owaers "make efforts t6 protect’ onr somewhat fragiie r~ail, service% the pressuz.~ to
~onVert from retail to..commercial.offio~ cm be ov~rwhelming.
tn paralle!, we cantinu~ to stm.’ggle with o~r perennial jol~s-ho~sing im~a1~noe. We Work
"dilige.ntly ~o aohieve small inorease~ in h6using’but in troth make too little overall
¯ progres’.s in curing the imbalance. Iit part, this is b~cause we ~ave ye~ to acldres~ th.~
continued gro .v~a. ~ jobS: . .. -’
We have haft a number of notable oonvergons from retail.to commeroq~l ofiSce in r~.cent.
.years such as Sherba’s in Midtown and currently Blli~on’s Auto on Akna.
W~ believe it is ~ppr6p~a~e End ~ece.ssarY to ~.op thee
We recommend that the Counci! initiate action to’adopt, an ordinance to pr.ohibit
conv.ergon of retail-s~rvioes to cornm~roial office us~ pending completion of th~ Zoning
Ordinance Update,.¯ We recommend th~ Counoil direot %b.e Plm~.’ g and Transportation ¯
Comv~..’ssion (~&TC) to consider a.. draft ordinance to be’ pr~ar~d by staff, mak~
recommendations, and ietum the
"urg~noy" proces.s.,..
3. The’ City shall .establish an appe.al" prdces~, to a~ow. conversion in cases of
- fnmnoial hardship or sh’owing tha~ the facility is’unmked,for sucbemsfu! retail use.
4. Existing. retail services facilities ban be rebuilt to include offic~m as long as
retail square f6otage, is not redu~d or encompass.es the ent~.e’gr~tmd floor..
5,.. l%etail services ~Ja~.t are gmudfathered .in as non-conforming or are in the process
of being amortized om (due. to previous Council action) are .not tO be protected
undea" this ordinanoe.’"
completed s.oon....,
.. renews: "a use ~n~ged in pro~g ra~’ s~e, rental s~¢e, process~g, or
rep~. of ite~ p~y ~tend~d fo~ ~m~ or. household u~%"
..~ales ~or se~e op#rafio~ whose p~ (not sOle) customsr base is ~e end
user, ~h ~e ot~cation t~t "on-~s" s~l~ ~e excluded ~om
Mayor Eakins intends to c~ll a speoial m~eting on ttfis matter.
Attachment E
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MEETINGS AP,.E cABLECAST LIVE ON GOVERNMENT ACCESS CHANrNEL 16:
May 2, 2001
SPECIAL MEETING- 7:00 PM
City Council Conference Room
Civic Center, 1st Floor
250 Hamilton Avenue
Palo Alto, California 94301
ROLL CALL:
Commissioners:
Annette Bialson, Chairman
Patrick Burr, Vice-Chair
Owen Byrd-absent
Jon S chink
Kathy Schmidt
Phyllis Cassel - not participating for I~em 1
Bonnie Packer - not participating for Item 1
Staff."
Ed Gawf, Planning Director
Lisa Grote, CNef Plarming Official
Wyrme Furth, Senior Assist. City Attorney
Zariah Betten, Executive Secretary
Susan Arpan, Economic Resources Manager
Chain-nan Bialson: I’d like to call this meeting to order. I’d like the Secretary to call the
roll please.
That-tic you. The first item on our agenda is Oral Communications.
ORAL COMMUNICATIONS. Members of the public may speak to any item not on the
agenda with a limitation oftkree (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 orat commm~ications period .to
15 minutes.
Chainrmn Bialson: I have one speaker, Lyrm Chiapella. Lyrm, you have three minutes.
),!!s. Lxmn Chiapella. 651 Colorado. Pa!o Alto: Hi. I spoke before on the necessity for
some kind of a business license. I know it has been on the agenda for at least 30 years
starting in the 1960’s. So I?m hoping that by the ?,ear 2002 there is some resolution to
this item which probably was on the agenda 20 years before that. I’m not worried about a
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~out prioritization and what changes are needed because we just cannot add
il Is to our work plan.
Ms.I think there is probably also a fourth alternative. That would like to
discussion of goals and objectives throughout the next to six months in
order to a work plan for the coming years so that there i~effort.
Commissioner
Chairman Bial:
Can I put a motion on the floor?
lease.
MOTION
Commissioner Schink: I d move that we the work plan from the
Department of Planning and and the Transportation Division to
the City Council with our we as a Planning Commission set aside a
meeting in the month of July to and objectives which will help frame next
year’s work plan.
Chairman Bialson: Any seconds?
SECOND
Commissioner Burr: I’ll s/nd it.
/
C°mmissi°ner 7ilk: I think we have all said en°ugch"
_ NChaim~Bialson: All those in favor say aye. (ayes) That motion ca~Thank you.
/
I tl~e will g~)ck to Ite~ 1 now. Those Commissioners who wish to go ~he
a~ce~o wamh it may stay.but you may not speak. We _ " ~M Ci
A~omey"[o comeback aria join us.
Discussion of the CiO, Cottneil referral to the Planning and Transportation
Contmission of a ciO,wide prohibition of conversion of retail uses to other uses.
Mr. Gawf: I think you may have to leave the room.
Chairman Bialson: Why don’t we have Staff present Item !.
Ms. Grote: Okay, thank you very much. Very briefly, in the Staff report that was in your
packet we have identified essentially five elements to this assigTmaent. First is to define
Cio’ qf Pa!o Aho Page 13
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the scope of work. The second would be to identify research both economic and land use
that would be needed to accomplish the scope of work. To conduct outreach, to first of
all identify who should be contacted and notified mad conduct that outreach effort. Then
also to evaluate the impacts on Staff resources and what this means for the other work
items that we do have in the Plamaing Division, and then establising a reasonable and
hopefully achievable timeline for completion of the project.
The scope of work as we’ve started to identify it is to clearly define the problem, clearly
define the terms used to discuss the problem and that particularly refers to definitions.
What is meant by retail use? Do we really want to stop the conversion of just retai! use
or do we perhaps want to stop the conversion of other types of personal services as well?
Often times, as we found out in Midtown and in Charleston Center, it is not just retail
uses that contribute to a neighborhood environment or a neighborhood colamercial
environment it is alsoother types ofpersonaI services and business service uses. So we
would like to rather discuss those terms and those use categories.
Then to discuss ways to approach the problem. There are a mm~ber of different ways to
protect existing ground floor uses. An outright moratorium on the conversion is one way.
The use of Conditiona! Use Permits is another way to limit potential conversions. Then
there might be as yet unidentified ways to protect those uses. We, at Staff level, have
identified the need to establish a land use database in all of these commercial districts to
1,mow what types of retail uses are out there and what types of personal services are out
there, what types of other uses including existing office uses on the gound floor are in
those areas. That would also help to define the problem and the extent of the problem.
How many of those uses have changed over the last 12 months, 18 months, 36 months
whatever period of time we think should be evaluated. Also the potential economic
impacts. Susan Arpan has just joined us and she will definitely be a part of this effort.
We’ve indicated that we think consulting expertise arid services would be useful in
evaluating economic impacts. I think Susan has a little bit more to say about that. Doing
a market demand study for both retail and office uses and other types of uses. What
demand is there for those vmJous types of uses?
We took a look at the resource inapact within the divisions that would be affected. We
hage identified in your Staff report that time from five different Staff members would be
needed including Susan’s time, some of my time, some of the City Attonaey’s time and
Wyrm Furth has just joined us. So we need to evaluate what that means to the overall
organization. Then again a timeline is needed as to when this could be done and what is
an achievable timefranae. We did commit to going to the City Council with at least a
status report in June. So if we can get some of these issues defined and fleshed out we
can at least refer that to the City Council. So that concludes nay con~-nents.
Mr. Gawf: Just a couple of comments. You did receive the colleagues memo that
outlines the charge to us. That was to draft a ordinance that would prohibit the
conversion ofretait services to office use and return it to Council for action. They
indicated also seven elements that they would like such an ordinance to consider.
Normally, we would go a~vay do a little research on it as Staff, etc., we thought we would
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do it in this case. We haven’t really started on it. We got the same charge and we are
coming to you at the very beginning saying let’s discuss this, let’s make sure we know
what the problem is we are trying to define and work together in developing that work
pro~am. I think there is going to be some decisions or judgnr~ents to be made on how
extensive the outreach should be but also the kind of research we think might be helpful
in rnaking this important decision. So with that we are here to work with you and have a
discussion on the elements that Lisa mentioned. If it is okay, we will move up to the
table that way we don’t have to keep using the microphone.
Chain~an Bialson: That’s fine. I have two speaker cards On this item. There is a
limitation of five minutes per speaker. The first speaker is Dorothy Bender.
Ms. Dorothy Bender, 591 Military Way, Palo Alto: I live in the Ban-on Park area of Palo
Alto. My concern isthe loss of our retail in the South E1 Car~ino area and specifically
South E1 Camino and California Avenue. I was biking down E1 Camino today and I saw
another for lease sign at the comer of Curtner and E1 Carfino. A sign which read,
"office, medical, retail store." It was another Jim Baer property. It is the former Lee’s
Comic Book Store and formerly the Ban-on Park Pharmacy. I am concerned about those
properties. Tomorrow morning the ARB is going to be discussing Amondo’s Bar. I
don’t know if you are familiar with that. Armondo’s Bar has been condemned and closed
down. It is the area just south of Happy Donuts a~d north of the Blockbuster on South E1
Camino a little bit beyond the liquor store. It is still probably, I don’t want to ca!l it the
blighted area of E1 Camino, but it is Baron Park’s neighborhood commercial and we do
look for stores and retail that serve our community. That application is to convert that
bar and the residence in the back to offices. It is a small lot and I would hope in fact that
the Planning Commission will Nve some direction to the ARB tomorrow. It is also in the
flood zone and there are some other issues regarding the space but I’ll be talking
tomorrow morning on that.
You are probably aware about Palo Alto Square, the movie theaters and Printer’s Inc. and
what it is doing to our commercial viability. The way we feel about our community we
will probably lose our nightlife in that area when Printer’s Inc. and the movie theater go
away. There are several progams and policies in the Comp Plan which call for
maintaining neighborhood shopping areas that are accessible and convenient to nearby
residents and support the operation of small independent retail businesses. I’m glad that
Ed and Lisa have put the South E1 Camino Area Plan on the list. I hope that you will
work on that to study was to make South E1 Camino more pedestrian friendly and retail
serving the neighborhood.
The definition of the neighborhood corrwnercial in the Comp Plan says that it includes
shopping centers with off-street parking or cluster of street front stores that serve the
immediate neighborhood. Typica! uses include supermarkets, bakeries, drug stores,
variety stores, barber shops, restaurants, self service laundries, dry cleaners and hardware
stores. I refer you to Council Colleagues Memo of March 15. It says that the largest
threat to our retail services is demand for commercial offices with a corresponding
increase in jobs. I believe this is a very urgent matter and I ask that you fol!ow Council
. Cio, of Pa!o Alto Page !5
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Colleagues Memo and implement an ordinance for South E1 Camino and California
Avenue. The ordinance should direct that the CN Zone be modified to exclude offices as
pern~tted uses on the N-ound floor. A protective ordinance hr@emented i~maaediately
would prevent further loss of our neighborhood retail services and restore our sense of
con-mmnity. Thank you.
Chairman Bialson: Thamk you.
Commissioner Schink: May I ask a question? Dorothy, to give us a sense of our values,
along E1 Camino would you prefer that place to be vacant or have an office in there?
Ms. Bender: Probably vacant.
Commissioner Schink: Okay, and the theater and the bookstore are good examples of
community assets. Without saying anything discouraging to a lot of the other retailers
along there, I didn’t see a lot of businesses that I hold dear to my heart. Are there a
number of businesses along E1 Camino that you think are essential to the character of
Barton Park?
Ms. Bender: No. There is the weaving studio, there is the little seamstress on the con~er
of Barton. The liquor store is where I buy my milk ifI have to buy milk now. There is
the Laundromat and there is the dry cleaner. So it is neighborhood serving in some way.
There are restaurants, Happy Donuts.. I went out last night at 11:30 p.m. and Happy
Donuts was full. So that is our neighborhood retail, that little area.
Commissioner Schink: Okay.
Chairman Bialson: You mentioned Printer’s Inc. is it your understanding that that
business is being ousted because of rent or anything like that?
Ms. Bender: My understanding is that they can no longer pay their bills.
Chain~nan Bialson: So it is not just a rental issue?
Ms. Bender: It is not a rental issue right now. I think it is that the business owner, the
man that took over two years ago took over a huge debt but it is both Printer’s Inc. The
Printer’s Inc. in Momatain View they are trying very hard, they meaning the Chamber of
Con~nerce and the City Officials, are trying very, very hard to keep it. tt is a priority for
them on Castro. I wish it were that way here too, that the City would come in and do
what it can to keep Printer’s Inc.
Chairman Bialson: Thank you. The next speaker is Ron Theis.
Mr. Ron Theis. 507 Homer Avenue. Palo Alto: I live and work in Downtown Palo Alto,
in fact I work for a software company that is on second floor space right now. Our
landlord also owns the first floor space and we really need space. We would love to be
City of Pa!o Alto Page 16
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able to take that first floor area. I want my company to succeed but I don’t want to see
first floor space tuna into retail either. Long term it is not good for Palo Alto. So I would
like to see something like this pass. It is important to keep those first floor areas livable.
Offices can offer something that retail owners can’t which is in addition to more dollars
-is also the oppornmity to offer our landlord to come to us, they want to invest in the
company. There is a certain sexiness to be able to invest in a company that may very
well make it big. Not only can the landowner invest but there are friends involved too,
hey come on over and check this out. I’m doing this, maybe it fails, doesn’t matter, they
feel like they are doing something interesting. The comments that I can imagine coming
from owners are I should be able to charge what I want and whoever can come in the
space. I should be able to make as many dollars as I want and the downturn is the wrong
time to do this.
I would ask what allows a property owner to charge more rent in Palo Alto than
someplace else? It is because it is a more livable community. There are more interesting
things to do nearby. So what enables them to charge a higher rent to that very li.vability.
If that livability goes away they can’t charge as high a rent. So one way to look at it is
we are in fact protecting landowners from their neighboring landowners from not only
malting their space less interesting therefore forcing them to charge less. It is not as
interesting a space as office to me. If you have landowners A, B, C and D and A; B, C all
sell out to an office area then D can’t charge as much money. While the first few
landowners would probably protest this in a few years I imagine you would have the
remaining ones that hadn’t yet sold out to office spaces coming back and saying I can’t
charge as much rent anymore because the other guys have sold me up the liver.
A downturn is the wrong time for this. There will be an uptum again. What happens in
upturns and what we need to be prepared for when this happens x-years from now. So
what are the goals in something like this, this retail? I would suggest that in order to keep
E1 Cmnino’s commercial districts livable that includes things like retail but also beyond
that doctor’s offices, theaters. That is an interesting thing, that is something for the
community. There are probably other extensions to that too, things which don’t generate
dollars for the landowner but are interesting to the community such as a place to display
at. Is that h-~teresting to the community? I would suggest, yes it is. A blood donation
area, is that interesting? Yes. What if there was a way for property owners to offer those
services to the community but still be able to offer office space on the ground floor? For
instance, front Barron there were no windows but turn it over to a con~nunity art.where
you can display m’tists’ paintings, sculptures, etc. Is that interesting? Yes. Does it serve
the community? Yes. Local artists are going to be the ones using it. If there were both
the display area and the square footage restriction, i.e., you have to offer at least 50% of
your square footage to one of these community based services such as blood donation
center, artists, artists workshops or something like that, that might also solve the problem.
The landowner can take the other half of their space, bump the rent as much as they want,
put office in the front there, offer something that actually serves the community. I would
suggest offices don’t serve the community they serve someone outside of it. That is not
an easy solution. There are complexities that makes it tougher. It is not a slam dunk.
City of Palo Alto Page 17
Basically, this isn’t rent control it just makes two separate markets, one for livable
comxnunity areas and one for office space. Thal~ you.
Chairman Bialson: Thank you. Joy Ogawa.
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6 Ms. Joy Ogawa, 2305 Yale Street, Palo Alto: Good evening. I strongly support
7 protection for ground floor retail. However, I think that preventing conversions of retail
8 services does go far enough to protect our neighborhood commercial areas. Midtown and
9 Charleston neighborhood Commercial Districts have been protected by an interim
10 ordinaace since January ! 6. Iaa November when City Council singled out Midtown and
11 Charleston Plaza for the first phase of interina ordinance protections Council indicated an
lv_intention to pursue similar interim ordinance protection for remaining neighborhood
13 commercial districts along E1 Camino. On January 23 Staff held an outreach meeting
14 with property owners and occupants of these neighborhood commercial districts aIong E1
!5 Camino. I attended that meeting and actually I heard nobody voiced opposition to the
16 adoption of such an interim ordinance similar to the one at Midtown and Charleston.
17 There were a lot of questions that were asked but I was surprised nobody who attended
18 that meeting said they were against this ordinance. However, although Midtown and
19 Charleston’s interim ordinances have been extended by City Council twice since January
2o no visible progess has been made toward our extending similar protections to other
21 neighborhood conzanercial districts. Now four members of City Council have proposed a
22 different approached. Four members of Council have proposed freezing conversion of
23 retail services throughout the City. I thirtk that’s fine. I think that such an interim
24 ordinance would be a good tlsng. It would protect current retail services not only in
25 neighborhood commercial districts but in all commercial districts. This I prepared this to
26 try aad ask Council to protect other areas. For instance, this was just an illustration of
27 along E1 Camino. The geen ones, those were retail services along E1 Camino that are in
2s a CS zone. This is by my neighborhood so I am more familiar with that. I live in college
29 Terrace. Those were retail services on E1 Camino. This is by my neighborhood.
30 Preventing conversion of retail will extend protection to these other retail services
31 whether they are on E1 Camino or wherever, and this is good, to get protection in other
32 districts. However, it doesn’t protect all current neighborhood-serving uses in our
33 neighborhood commercial districts. It only protects current retiail services. One example
34 that Dorothy mentioned, a property that was proposed to be converted into office use. I
35 know of another example in my neighborhood, in our CN district, 555 College, was a
36 church. I think a neighborhood serving church. I used to vote there at election time.
37 Now, while 85% of this 8,000 plus square foot building will soon be used as office space.
38 Last I heard it was going to be used for a law firm that practices international law which
39 tO me is hardly a neighborhood serving use. Midtown and, with retail in Charleston’s
40 interim ordinance not that only protects conversion of existing retail and it also helps
41 assure that any new office use on the gound floor wil! be neighborhood serving. I think
42 that the CN districts on the other side of E1 Camino also deserve this same protection. I
43 showed this before Council. This illustrates the uses in nay neighborhood commercial
44 district. The red ones are office. A lot of those red spaces are two and three story
45 buildings currently. Whereas, all the geen retail neighborhood serving uses are one
46 story. So already the floor space in my neighborhood cotmnercial district is a vast
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majority or more than half is already office. We would like to have the same protections
that will help protect our neighborhood and make sure that the gound floor uses be
neighborhood serving not just protecting current [protected for] retail. The other thing
that I would hope that the Planning Commission mad Council would address is also new
development. I can give you an illustration. 2051 E1 Camino has been an empty lot for
something like 60 years. The first proposal was all ground floor parking, second floor
office. I spoke up at the ARB and yes, they did change it somewhat. Something needs to
be done to be sure that new development in neighborhood conm~ercial zones are
developed appropriately and not first floor parking .and the rest of office parking.
Thanks.
Cormr~issioner Schink: I have two questions and I’ll ask them both and you cm~ blend
your answer. First, if there was. office that moves out of these locations would you prefer
the space to be left vacant if.there is no retail available in it and are you familiar enough
with your local retailers to understand that most of those retailers appreciate the business
that comes from the local offices? They feel there is a synergy there.
Ms. Ogawa: Well, we are right next to Stanford Research Park there is plenty of business
coming from the employees of the Research Park. I don’t think out" neighborhood
cormnercial needs the additional. Maybe it is easier for people to walk across the street.
I’m sure JJ & F does see some deli business from these offices.
Cornmissioner Schink: The other part. of the question is would you like the spaces to be
left vacant if there were no retailer to come in?
Ms. Ogawa: Our impacts are mostly traffic type impacts or noise type impacts that really
I think come with the office use. So I would prefer and I thit~ everybody in nay
neighborhood would prefer to rather see it vacant. That would reduce the impacts.
Commissioner Schink: I just wanted to know what your value structure was.
Chairman Bialson: I have a question. That space you mentioned that was being
converted to office, was that diagonally across the street from JJ & F?
Ms. Ogawa: Yes.
Chairman Bialson: Are you familiar with the history of that property?
Ms. O~awa: It used to be a mortuary.
Chairman Bialson: It went through a lot of iterations and each of them failed.
Ms. O~awa: I don’t know about fai!. The church didn’t fail. It actually was so
successful that it had to move because they didn’t have enough space. The City wouldn’t
allow it to get any bigger.
Cio’ of Palo Alto Page i9
1 Chaim~an Bialson: Between the mortuary and the church I think it had tl~’ee iterations
2 and each of those failed.
3
4 The other question I have is do you buy all your groceries at JJ & F?
5
6 Ms. O~awa: No, I buy some of my groceries. I do not go to Safeway. I do not go to
7 Albertson’s. I go to Country Sun. Once in awhile, if I’m by the post office, I’l! stop by
8 Molly Stone’s. I usually go and pick up things at JJ & F but I do make a trip once in
9 awhile to Trader Joe’s.
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11 Chairman Bialson: Do you ever go to Costco or any of the other places for paper goods
1~_and things like that?
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14 Ms. Ogawa: I do buy stuffat Office Max.
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16 Chairman Bialson: Thal~k you. Do you buy all your books at Printer’s Inc.?
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~8 Ms. O~awa: I try to buy books at Printer’s Inc. The last time I ordered the book they
19 said it would come in t0 days. After two weeks I called and after four weeks I ordered
20 from someplace else. So, it’s a service problem.
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22 Chairman Bialson: Thank you.
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24 Commissioner Burt: Joy, do you think that in order for you mad the residents in your
25 neighborhood, I used to live in that neighborhood, to value mad find these retail
16 establislm-tents important to you that you would have to exclusively patronize them mad
27 not patronize any other stores?
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29 Ms. Ogawa: No, I don’t think so. It is interesting how it works out there. We have
3o bicycle shops galore there because it is close to Stmaford. That’s fine. There are other
31 places that have other retail shops that have something to do with the businesses or
32 whatever - Stanford, I ~tess is not a business but an institution - that are close by.
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34 Commissioner Butt: I patronize your bike shops rather than Palo Alto Bike Shop for
35 instance. I don’t think it devalues them if we don’t exciusively patronize them.
36
37 Chairman Bialson: Any more questions? ThaN,: you.
38
39 There are no other speakers so I will close the public hearing portion and bring it back to
4o the Commission now for comment by Commissioners.
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42 Co~mnissioner Schink: I have a question of Staff.
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44 Chaim~an Bialson: Sure.
45
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Corrnr~issioner Schink: In this I assume we are to comment on what you have outlined in
front of us but part of what you have delivered to us is also the Council Memorandum
directing this work. There are opinions stated in that memorandum about the thrust
behind what we are doing here. I guess the question I have is can we also con-maent on
whether we think some of those ideas or valid or are we to assmme that what the Council
has directed is fact and this work needs to support the fact that comes down? For
example, they say that the demand for office space is great that it is forcing retail out. If
we disagree with that conclusion or is there room for us to discuss that conclusion or has
that conclusion been made in where we are now looking at the study?
Mr. Gawf: There are two pats to it. One is the Council has asked us to prepare an
ordinance and bring it back. I think we need to do that. As we are doing it I think we can
also, we being the Planning Commission, look at the whole issue and make a
recommendation on it. One of the things that you may want to fred out one way or the
other is whether that staternent is supportable.
Ms. Grote: And that is one of the reason why we had identified some of the econornic
research and perhaps some rnarket study and evaluation that could be done to either
substantiate that or say perhaps no, it is not an issue.
Ms. Susan Arpan, Manager, Economic Resources Planning: Is the office demand what
people think it is or is the retai! demand what people think it is. I think that we ought to
have a clear picture of both sides of that. That is what we propose to do as part of
studying the issue.
Ms. Furth: From a legal point of view this is a legislative act. Of course, the Council
could simply say based on our experience in the conmmnity mad what we have heard
today this is what we are going to do. But they also really want to hear from the Pla1~aing
Commission on the leNstative proposal before it goes to them. This is the pre-meeting
before you have the hearing on the legislative proposal so that you can Nve them your
conmaents on the wisdom of the whole enterprise as well as the particulars of the
ordinance. So of course it is relevant if you believe that the some of the factual assertions
are incorrect. That is relevant to give advice to them on how they should proceed.
Comaaaissioner Schink: The reason that I asked that question is that I believe that the
world is changing so quickly and that circumstances have changed so much just since this
issue was first brought up that I don’t believe that we could properly direct you on where
you should go on the scope of work or a lot of aspects of that without stepping back and
rea!Iy challenging the oriNnal assertions. I am relatively certain with just a minor
amount of research what you will find is one, that the office demand is absolutely gone.
It is not going to be driving any retail out of this space in the foreseeable future. Coupled
with there just essentially is no demand for the retail to go into that space anyhow. So
you need to get your hands around both of those questions. I think that’s where the focus
should be before you do a lot of the other work. It could best be done with a proven
consultant that the City has used. I would reco~rm~end Gruen & Gruen that the City has
used in the past. I would recommend somebody reco~aized by the Urban Land Institute
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who works all over California. Someone like that should be brought in to Nve you a
realistic perspective because the situation is changing too quickly.
Chain’nan Bialson: It seems like that would be a basis on which we would proceed on
anything. That we would need to have that infol-mation and put all these other items,
especially given the resources that they are willing to commit, it doesn’t seem to make
any sense. We have fuli plates already. I want to second Jan’s comments because until
we get our hands arom-~d the problem we’ve got on which to proceed.
Mr. Gawf: I was just going to tag on because I think the other thing that should be done
concurrent is the inventory of our existing colma~ercial office land use. That is, go to all
of the commercia! zones and see what percentage of the existing uses are retail, personal
services, office so we have a benchmark. Part of the difficulty that we have right now is
that we don’t 1,mow, factually, what the change has been over the last 10 years. We kmow
something goes out and something else goes in but whether we are gaining or losing is
more sort of intuitive rather than we have facts to support it.
Commissioner Schmidt: Without tracldng the business licenses we just don’t know what
is happelsng.
Commissioner Schink: If you read the last Green & Gruen report that was done for the
City of Pato Alto you’ll fred that part of their scope of work was, they didn’t do a
complete inventory, they did a lot of inventory type work. If you endeavor to have Staff
do it you are only going to repeat what a consultar~t would be doing as part of the
research necessary. So a function against you jumping in to do that inventory if you put
out an RFP because they need to do that to their research.
Ms. Arpan: You may not know that we completed a retail Strategy of the 1 t retail
districts in Palo Alto not too long ago. We did do a portion of the inventory at that time
and do have a baseline of those particular business districts and what the uses were. To
follow up dn that I did call Gruen and Gruen and I spoke with Tim Kelley at Kaiser
Marsden just to get a feel for the issue and to get a feel for what they though the
unintended consequences might be and what it was that we needed to quantify and make
sure that the assumptions we were making were valid ones. They do sort of second that.
They said, yes, you have to qualify the office demand aad you have to qualify the retail
demand. We have to take a good look at what the unintended consequences might be in
terms of vacancy rates or properties sitting on the market longer than we anticipated.
Commissioner Schmidt: Unintended consequences of this ordinance?
Ms. Arpan: Of any action, yes.
Commissioner Schi~: Could I read to you what Gruen & Gruen said 10 years ago
because it is pretty applicable. I would just like to read a couple of sentences.
Ms. Aman: Certainly.
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Commissioner Schiltk: This is referring to El Camino.
Ms. Arpan: What page is it on?
Commissioner Schimk: This is on page 4 of that report. The Interplay Of The Applicable
Real Estate Economics is the subject. They say the relative lack of demand for the kind
¯ of space that exists today, essentially retail, along E1 Camino. That was 10 years ago.
The sithation has only gotten worse since over one million square feet of highly efficient
retail has been built arom~d the perimeter of Palo Alto in the form of Costco, Office Max,
Home Depot, and Orchard Supply where people are going. So the situation has only
gotten worse and if you look at the charts on the Land Institute website you wilt see that
while retail has grown in the last 10 years it has ali grown in the big box segnaent and it
has taken away from this. So this situation has only gotten worse.
Gruen & Gruen goes on to say and this is the unintended consequences that the
community should fear, however, a not insignificant portion of the property owners
within the area are likely to cut maintenance costs to the bone and permit their properties
to continue to deteriorate in an effort to wring some income out of what is a difficult
situation. The point is that you are going to drive these people to let the property get into
worse and worse shape. I think that’s the situation that you clearly saw in Midtown in the
1990’s and you are only going to end up in the same situation along E1 Camino if you
pursue this kind of ordinance.
Ms. Arpan: Can I show one piece of infom-tation from the most recent study? I think a
lot of what you are saying is tl-ae but I do think that we have seen some changes occur. I
would be glad to make this available to Conmaission members at some point if you’d like
me to. Basically, this is on sales trends, after a decline of 37% from $158 million in 1989
to $99 million in 1993 sales rose sharply to $130 million in 1996 where they have
hovered since. So we hit a plateau in 1996.
Chairman Bialson: Is that for all retail?
Ms. Arpan: Yes, on E1 Camino Real. There are four car dealers on E1 Ca-nino Real.
Chairman Bialson: I’d like to see that figure altered to see what is the small retail
excluding cars and other such larger items.
Ms. Arpan: I can do that.
Chairman Bialson: Please do that. I don’t mean just cars, there are other bush-~esses
along there that are business to business and that are also carpet shops, etc. that do large
jobs for con~ar~ercial establisltments.
Ms. Aroan: We have seen some fluctuation.
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Commissioner Schink: I was going to say that some of us who makeour living having
comn~ercial property understand that the rent component of the successful retailer is a
relatively small fig’ure. It is 10% or less if that retailer is successful in may way at all.
Rent is not a sig-nificant factor for successful retailers. That’s why you go to Stratford
Shopping Center and they will pay huge rents. Rent is not the issue that drives the
retailer. It is the quality of the location. The problem with M1 of these retail sites has
nothing to do with the rent. It has everything to do with the quality of the location.
There just isn’t enough synergy in that location to support the srnall retailer. That
synergy comes from a cornbination of residential, office and demand for their product.
Commissioner Burt: Jon, I think some of your points are well taken but I think they may
be overstated. We have numerous examples in the last yea- or so of retailers who are
thriving in this conmaunity and have had to move solely because their rents were
drastically increased in order be replaced with office tenants. I just don’t see how your
statement could be accurate across the board in light of al! these circumstances that we
have all seen in the community.
Commissioner Schink: I guess I’d like to hear what some of those examples are.
Commissioner Burt: In College Terrace we have Jose’s who was there for 20 years. We
had the comic book store, Lee’s Comics, right across from Barron Park. We have some
of the tenants that have been in jeopardy or moved out of Charleston Center. And there
are others that I am sure we could delve into but those alone show a trend that have
helped prompt this. I don’t dismiss some of the principles that you are stating. I simply
don’t think they are true to the de~ee that you are implying.
Chairman Bialson: That takes us back to needing information.
Mr. Gawf: The purpose of tonight’s meeting is to focus on what we should be doing. It
seems to me there are two things I hear coming out. One is the Council has asked us to
draft an ordinance, regardless of what we n-fight think about it, to draft an ordinance for
their consideration. The other thing that I hear is the Plamaing Comrnission needs to
make a recommendation on that ordinance. I’m hearing some discussion of here is some
of the information we think we need to have in order to make an intelligent
recommendation on this particular draft ordinance. I’ve gotten the econon~ic study, I’ i1
ca!l it that, that includes the land use if we can fold that into it I would certainly like it
from a Staff standpoint. Maybe we want to set up another time where we do some
drafting or look at some options on drafting the ordinance because that would be another
work item. Again, separate our personal feeling of whether we like something or not
from if we are going to have an ordinance for gound floor regulations what should it be
like.
Commissioner Schmidt: We have a gound floor regulation in Palo Alto.
Mr. Gawf: Right.
City of Palo A lto Page 24
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Commissioner Sclmaidt: It seems it would be useful how that relates and how that’s been
successful but I’m sure it had ups and downs during the times it has been in place in
ten,ns of vacancies and so on.
Ms. Grote: That is an interesting question. We did covet" a little of that for the
Charleston and Midtown studies. We have not lost, with the exception of one space
which is where Manpower had been and Ipex is now, we have not lost retail, personal
service or restaurant uses on the ground floor. It has been very steady for that 10 to 12
year period. So only at one point in that period do the City reach a 5% or greater vacancy
and that is when the Manpower use moved into that space.
Mr. Gawf: Also Lisa, it only applies to University and a little bit of the side streets.
Ms. Grote: It is a limited location. That’s right.
Ms. Furth: Maybe we should report to you what happened after your sent your
recormnendations to the Council. If you look at this Colleagues Memo that was
forwarded to you by the whole Council they raise a lot of issues and they make it clear
that they don’t want to proceed on an urgency basis. They are going to do this on a five
vote basis. But they also make it clear that they intend us to work on an expeditious
schedule and not study it to the point where it is mute. Either because we are in a major
depression or because there is no retail left in town. They basically accepted the
recommendations of this Corm=ission. We had two models that were discussed by the
Planning Commission. One was based on the ground floor retail district that we have
Downtown and one was based on the earlier ordinances. First of all you have to deal
with the issue of~vhat should be classified as retail and what should be classified as
neighborhood serving. Here they have dealt with a larger universe of retail if you think
about everytl~hag that generates sales tax plus retail services. So there is an economic
desire to protect the City’s retail revenue base along with everything else. So the debate
that you all struggled with about what is neighborhood serving and what isn’t is not as
much a part of this conversation. The debate would be what’s retail which obviously
includes both taxable goods and services and they have their suggestion. But the other
two dimensions that the part of the Commission that was concerning that ordinance,
which I realize is not the same Commission we have tonight, one of them was there are
always cases where the City Council that exceptions should be made. If you have a
blanket rule like this there are going to be cases where it doesn’t make sense. How do
you address those issues? The approach with the gound floor regulations Downtown is
you set a vacancy factor for that entire area, you set a vacancy requirement for the
particular si.te and if you meet that you automatica!ly get to go to an office use. You
don’t have to keep it retail anymore. The interim ordinance said conditional use pemaits
are the way to address tl~s on a case by case basis. There was substantial opposition to
that from some people who believed that the City is loose with its conditional use permits
and issues them when it shouldn’t and there were other objections from people saying it
takes a long time to get a conditional use permit.
Mr. Gawf: Some people believe we’re too tough.
City of Palo Alto Page 25
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Ms. Furth: So either we are doing everything wrong or something right. The Planning
Commission’s recon~-nendation was really that you need to do a conditional use permit
approach, it is too easy to mm~ipulate individual vacancies. There wasn’t a good universe
to look at to figure out an automatic trigger. Spaces need to be looked at and particularly
when you are focusing on a small neighborhood center you need to balance to a certain
extent the circumstances that lead you to say yes, this is an appropriate use here. So with
that, the Planning Conznission recommended that they go to the conditional use penrlit
approach and the City Council agreed. The second issue was when you have non-
confon~aing non-retaiI uses on the ground floor how assertive or aggessive should the
City be about requiring that when one non-conforming use, and by that I mean a
pm-ticular business, leaves. I don’t mean that the business is acquired. They view that as
a continuation of an existing business. So if a little retail company is swallowed up by a
big retail company or real estate company that is continuity. But if the dentist leaves and
the orthopedist wants to come in that is not continuity. They wanted it to be more
aggressive. The other Colleagues Memo on the Downtown ground floor retail says some
of these left over uses are just continuing way too long. They have been replaced three or
four times, they are really dead spots in our retail district, they ought to shift. We ought
to be more assertive. That is not an issue for this one because this is just talking about
retail preservation unless you all thought that they should expand it to somettSng more
aggressive which I don’t thilN you do. So that really needs a focus on what is retail use
that ought to be covered or excluded from this and what lchad of exception process should
there be. Those are two clear dimensions that we need your help and advice on in
drafting it. There maybe lots of others that you can tlsnk of.
Commissioner Schink: We could have a meeting just on those two subjects and do that
in the fairly near future.
Chairman Bialson: I don’t know how to approach this in terms of general philosophy. Is
that what you want fi’om us? Do you want us to say yes, tl’tis looks appropriate mad by the
way this amount of resources is drawing away from other projects?
Mr. Gawf: Tonight we need to identify what work needs to be done to get us to an end
point. We have identified so far tl~ree things, the business analysis, the land use analysis
and preparation of a draft ordinance. Are there other things? I thinl~ if we can identify
anything else that needs to be done then I think the next step is we see how long it is
going to take us to get any consulting help onboard and how long it will tulle them to do
that. We do have existing infom~ation on that. The other is to sit down and go tba’ough
what Wyrme was just talking about on components of the draft ordinance. My
understanding of this even if the Planning Commission recommends against such an
ordinance our charge is still to prepare such an ordinance, the best ordinance we can to ¯
send forward to Council for their final consideration. What I would suggest is that we
identify the work items tonight, if there are more than those three. We then find another
time to meet on specifics.
Chairman Bialson: So we can do this in stages is what you are saying?
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Mr. Gawf: I thil~k so. It does sound like you want more information.
Chairman Bialson: We are dealing with huge economic trends.
Mr. Gawf: We may even be able to bring someone in to have a discussion rather than
just preparation of the report. I’d like that, I think that would be helpfu!. I also think that
we can break out the components of an ordinance so that we can talk about those
components as well and we can be doing it concurrently.
Commissioner Schink: I was just going to say I wouldn’t feel comfortable making this
decision that is going to affect so many property owners and have such a financial impact
without getting some leading expert to come in and tell you what the economic
consequences of what you are doing are. You may not believe what I have to say but I
think it is important.
Chaimaan Bialson: I’m no so concerned about the property owners as I am with the
impact on the City of Palo Alto. I think it could really be devastating to the City.
Commissioner Schink: In the long run it will.
Ms. Furth: I was going to say there is enough in the Council Memorandum for us to
write an ordinance that did this. I think they believe that you kmow more about writing
ordinances or what essentially the ordhaance should be. You may not be able to make
any recommendations because you think the whole enterprise is so misguided. If that is
not the case then it would be good to have your thin!ring about, assuming this is a good
idea, what would be the best way to approach it.
Mr. Gawf: Let me say it slightly different. In my mind, I separate the two. One is
information and a recommendation on whether this should be adopted or not but I
separate that from whether it is a good idea or not we can prepare the best ordhaance to go
forward and Council can make that final decision.
Ms. Furth: The other thing is they have a clearly identified concern which is a feeling
that we have a housing shortage, that more office is not a good thing for the City for that
reason, a~d that we are losing retail that is important both to sustain vital office
neighborhoods and to sustain vital residentia! neighborhoods. That is another way of
defining the problem statement that they gave you. So if you don’t think that the sort of
ordMance that they proposed is the best idea then another question to you is okay, given
that they have said there is a problem and they want to address this issue m~d they want to
use zoning as a tool to do it, what do you think some useful ways to do that are?
Chairman Bialson: Pat.
Commissioner Burt: I think one of the points that Wsame quoted the Council on is
particulm-ly important and hasn’t been discussed. That is that we not only have the
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concen~ over the loss of retail, we have a second concem in the conmmnity over the
negative impact of an increase in office space on the jobs/housing imbalance. That has
been part of the Counci!’s consideration and I think that should be part of our
consideration as well. I would also like to see from Staff examples of ordinances in the
region that have been done. What has been successful and what hasn’t been successfu! in
addressing these same issues? Then I have a concern with whether we are addressh~g all
retail in the City equally. I’m not sure that it all has equal importamt to the community
and to the neighborhoods and that we very we!! may find from the economic analysis that
in order to make the most valued retail viable we may have to allow conversion of other
retail to other purposes. Those other purposes may in fact more appropriately be
residential than office. But nevertheless I would like to see us evaluate which areas are
of the most importm~ceand how we can create that retail critical mass that makes a retail
district truly viable. We have had a discussion about the totality of retail in the City but I
thi~ the reality of the economics of retail suggest that we need to look at retail in regions
of the City and how they are supported in different ways. I would also like to see us in
that same context look at whether there might be some efforts that can be made either
tl~-ough incentives or through other means to not only put emphasis on protecting retail in
those most valued retail areas but to perhaps look at circumstances where over the next
five or ten years we can correct some of the problems that have already occurred, where
we have lost retail in vital areas and maybe we don’t care as much about losing it in some
other areas. Maybe there are some mechanisms we can do to adjust it so we can create
the critical mass h~ the retail where it is most valued and lose some perhaps in areas
where it is less viable. I have a couple of other things but I will let other Commissioners
speak first.
Chaim~an Bialson: I’d like to add my vote to Pat’s. t was going to bring up the issue.
We need to be a little more specific about the retail we want to save. I t!snk whether you
call them neighborhood commercial areas or you find areas where the critical mass, as
Pat puts it, exists or that we think we can create that’s how it becomes viable. We can’t
do it with such a broad brush as Council seems to have in their attempt to preserve retail.
I think we set our battle lines where we think we can defend them, so to speak. That
would.be something I think would be very important. This area could get us into a lot of
huge items that the City gapples with the housing/jobs imbalance being one of them and
the other one being that most of our retailers who are the smal! retailers we all want to
preserve cannot find staff. We just are in a situation where staff is a large problem and
we have some of our retailers commuting huge distances to get here and they have to stay
here from 9:00 a.m. to 9:00 p.m. they burn out. fast. Having talked to two people who are
in that situation in closing up not because of rents but because they can’t find other
people to take over for them and they would like to have a home life. We need to take a
look at is there anything we can do about that. I don’t know what it is. I do like the
model of the U~Sversity Avenue process mainly because we create a market for those
small retailers by the existence of office or additiona! housing whether it be dense
housing or whatever. Maybe we can get some teenagers who want to work out of there.
That is one of my concerns. I’m just piggy-bacldng on Pat’s comments. Do you have
anything to say, Kathy?
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Commissioner Schmidt: I support the comments that Pat and Annette have made about
determining what works and focusing in those areas.
Chairman Bialson: I think we would all love to have something more targeted.
Commissioner Schmidt: Yes. We would love to have great little commercial areas that
we can walk to. Those are the kinds of things we supported in the Comprehensive Plan
but we need to be realistic about what will work too. Another thing that Pat mentioned is
to look elsewhere to see what other cities have done if there are other zoning ordinances
or ordinances that work or don’t work or is Downtown Palo Alto the only ground floor
ordinance around.
Mr. Gawf: No, but a lot of cities call us and say, you are so successful tell us how you
did Downtown.
Chairman Bialson: That is part of what we have to recognize. If we didn’t do it the
market forces as. such did.
Ms. Furth: Actually, we have had some very interesting workshops with the zoning
ordinance update group. It isn’t market forces alone. I’ll give you the version they gave
us, 25 to 30 years ago the Planning Director had a mandate to fix Downtown. They did it
by radically shrinking the commercial neighborhood. They pulled it in away from Forest
north, they pulled it up from Middlefield, they pushed it over from University north and
mostly they put it way down from 8:1 FAR. So that is radically shaped by zoning. It
came from that kind of analysis that you all are talking about, how much of this can you
support a~d then it has very specific zoning about what it does or doesn’t allow. I have
worked in two other cities which have, like Palo Alto, managed to maintain very vital
downtowns in traditional downtown areas. Your W-PA post office is still downtown or
the train station is still accessible to offices. In all cases this involved a combination of
very fine tuned zoning because we don’t manage downtowns the way malls are managed.
We don’t dd it through leases but it is done through not rezoning all the rest of the town’s
outlying areas for other kinds of commercial. We are limited by the fact that we are
surrounded by other cities. By tinkering with the zoning usually by changing parldng
standards from time to time, doing these various incentive programs you’ve done, and
doing this kind of ground floor restriction which is actually very common because of the
phenomenon that attractive places create by retail uses and restaurants become attractive
to office people who then move in. If they are upstairs or behind they are a resource and
if they start making gaps in the pedestrian frontage don’t. So the sane process that Palo
Alto went through with its ground floor retail of walking block by block looldng at use by
use and building by building apparently, that is the story they told us, I’ve done that in
two other cities. So it is not an unusual phenomenon.
Commissioner Schink: Could I add 30 seconds to that history since I was on that
Architectural Review Board 22 years ago. We had 25% vacancy on University Avenue.
No one could believe it. I think the ARB helped lead the charge in some of the changes
but the most important change that took place was when the City Manager made the
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decision to improve University Avenue and create good parking and a good pedestrian
enviromnent. That was the single most important thing followed by the fact that more
dense housing was built all around that area. Those two thflags did as much to drive
University Avenue as welI as just the national i.d. for the return of downtown. Then
some ordinance changes arid we were on our way.
I think Pat did a wonderful job of outlining the work program that needs to go forward.
In that outline there is one difficult little contradiction that we still have to confront. That
is we want to preserve the retail. We want to hold back on the office but there is a need
in some locations to have a sigazificant anaount of office that is walkable to that
imrnediate retail to support that retail or it won’t go. Therein is the contradiction and the
difficulty that we need to employ an expert, someone from the outside, to tell us what that
recipe is today to make small retail work. Neighborhood serving retail needs X amount
of office workers to keep it going so that we can defend that to the corrmaunity. There is
not that impression out there in the colra-nmaity but that is the reality.
Chai~Tnan Bialson: We need a recess to prepare to change the tape. Let’s recess for five
minutes.
Chairman Bialson: Ed, could you give us some direction as to where we go from here?
Mr. Gawf: I am going to ask Lisa to help me a little bit. What I’m hearing is you like the
idea of retain someone to help us do aa economic study of both the retail needs as well as
the office needs mad what the future might present on that. Doing a land use sm-vey and I
like the idea of that being incorporated into the retail economic analysis if we can do that.
I thine it is important to have a benchmark so we can see. how go in the future.
Ms. Arpan: Maybe go backwards and pick up what has already been done.
Mr. Gawf: Yes, so we can get some trend perhaps. Third is to look at the elements of an
ordinance. We start with !ookh~g at other cities. We have done some of that so we would
be prepared at the next meeting to give you a report on our ana!ysis of what other cities
have done.
Ms. Arpan: One problem that we did have was that I couldn’t find another city that was
doing it as a blanket, comprehensively. I could fred lots of other cities that were doing it
in specific areas. I searched and searched and searched to find just one and I couldn’t.
Ms. Furth: I’lI send out an e-mail. All the City Attorneys in the state are at a conference
right now but I’ll send out an e-mail to them and would know if their city has done this.
Chai~Tnan Bialson: I think the searching would something that the City Council should
hear about, that no one else has done this.
Mr. Gawf! Either way that is useful information. So an economic study, land use study,
elements of a draft ordinance looking at other cities and also what elements should be in a
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draft ordinance. We have had that discussion already on the Midtown. Then fourth, I
thi~tk it would be important for us to do a map of the existing retail areas and us to have a
discussion of are there areas that are more important than others. I think that was a very
good comment that came out of tonight’s session, of stepping back and looking at
planning of the City’s retail future. The fifth one I have is outreach, k is not something
that we have to do right now maybe at the next meeting. At some point we need to
discuss how extensive the outreach program needs to be. There are a lot of property
owners that will be affected. I know that took a lot of time with the Midtown and
Charleston Center effort. So those are the five follow up elements that t have identified.
Commissioner Sct~’-nidt: Have we discussed or have you done work on what other things
are done to retain retail other than zoning ordinances.
Mr. Gawf: That is the sixth element of follow up is alternatives including incentives.
Ms. Arpan: It is not just alternatives but I really like your point. One of the things I was
!ooking for with the retail strategy was to have some marching orders about how to go
fo~’ard to make these retail centers that we have more viable. You can look at things
like fa¢ade improvement progrmns, you can look at business improvement districts, you
can take a look at those things that really stren~hen a business district. So that
comprehensive approach I think makes the most sense of all.
Chairman Bialson: I think that would-be very helpful. Just the corm~lent made by Jon, I
think it was the infrastructure changes.
Ms. A~-pan: Would you like to make a copy for the Plamaing Conm~ission members of
the retail strategy?
Chairman Bialson: Yes, absolutely.
Commissioner Schink: That would be helpful. Piease conmaent on the outreach
progam, briefly. I sort of felt that in the Midtown outreach program was difficult for a
lot of people to participate in because it was during the day time and if we are doing this
on a citywide basis I would prefer if we tried to make the outreach such that it would
bring the people to a Planning Corn.mission meeting so that it was part of the record and
incorporated in our discussions.
Mr. Gawf: We may have prior to the formal action on the draft ordinance there may even
be an administrative or Commission hearing just to get public comment.
Ms. Furth: Like a study session.
Chairman Bialson: Pat.
Commissioner Burt: I thiN( one of the reasons that the oriNnal marching orders from
Council have perhaps been too broad in scope and not focused enough, and they certainly
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have given us latitude to refocus them and hopefully with Staff’s recommendation in
June will come back and sculpt this a little bit more in terms of what they are requesting
of Staff and ourselves. But I think one of the things that is absent is that there hasn’t been
an adequate exploration to attempt to define the problems. We are leaping into solutions
a~d I think we need to spend an adequate amount of tirne defining the problems be~’ore
we move forward on solutions. Once we have defined the problems I would hope we
would !oNcally then move toward goals and objectives or what may be translated into the
final document, a pretty broad set of purposes and intents so that there is an overlying
content of what we are attempting to achieve in the ordinance in a conceptual manner as
opposed to having something that is so narrow and rind that we have written an
ordinance that has attempted to anticipate all circumstances in advance as opposed to
putting thoughtful purposes and intents which allow us to implement the ordinance in a
way that is thoughtful and a living document to some de~ee. It is the stone concept that
the Commission had when they were looking at the retail in Midtown and Charleston that
we thought the conditional use permit was a more appropriate way to go because we just
couldn’t in advance anticipate everything. Now I an going to offer something that to a
degee contradicts that concept. It demonstrates some of the struggle we will have and
that is to what extent should we pursue some of these definitions that we have talked
about. The need to update the definitions on different retail serving segments. Ed, do
you have some thoughts on that?
Mr. Gawf: I do and I was thinking as you were speaking, I was recalling Phyllis’
comments fiom about an hour and one-half ago about being frustrated because we get
pulled off on this thing and this thing when we are trying to do the zone code update
which is intended to cover these kind of issues in a more comprehensive fasl-tion. One of
the treats that we have in Pa!o Alto is that when we take on an issue we try to take it on
100% and do it perfect. So one of the things that we have to talk about as a Commission
and Staff is the two approaches of doing it very thorough and very well, and there may
not be an option to that, versus doing something on an interim basis that lasts for two
years for the Zoning Code Update. Maybe it is halfway between the two or something
but there is a workload issue. We are talking about a very exciting kind of planning study
here but it is time consuming. We now have seven elements to it. So I throw that out for
consideration. Maybe the next step for us now is to take this information and try to put it
into a one-page list of the issues and the elements of what we are going to do. Then
schedule another meeting of our quorum and we will have some things on the agenda.
Maybe we will start with defining th~ problem. I think that would be a good
brainstorming session. What should we do? What does the Council trying to do because
they didn’t do this just because they had nothing else to do? There is something
motivating the Councii and the community in this area. I think trying to fred the problem
would be a good start.
Chairman Bialson: I think defining the problem is very important. I also think having
Council prioritize where this belongs in the scope of things that it and we have to deal
with and Staff has to deal with.
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Mr. Gawf: You are not going to bring back feedback recommendation by June, I don’t
think. No, we are not. But we can bring back by the end of Mayfoegirming of June here
is the work program that we think we have to do in order to follow up on your direction
and here is the time commitment Here is the impact of it.
Commissioner Schink: Wil! you know whether you can use a consultant?
Mr. Gawf: Yes. I think we are going to check very quickly. I know if Susan you have
already started talking about how long it would take to get a consultant onboard, what
would the scope of work be, when could they have it worked up.
Ms.Arpan: I haven’t started that.
Mr.Gawf: We need to do that very quickly.
Ms.Arpan: Yes, I think we can.
Commissioner Burt: Ed, is it your intent to also evaluate the value of business licenses in
attempting to get a grasp .... ?
Mr. Gawf: No, because I think it is obvious what the value is mad it is just a political
decision of doing it.
Commissioner Schink: We have been dov, a~ that road so many times.
Mr. Gawf: I don’t think it is a debate issue anymore.
Ms. A_rpan: There is a report that is going to the Finance Committee on May 8 to talk
about revenue el~ancing strategies. The business license tax is being looked at as a part
o f that.
Commissioner Burr: In this context I wasn’t it meaning it as a revenue enhancement but
as a tool for data gathering.
Ms. Arpan: It is a little of both.
Chairman Bialson: Brought back to the Finance Conm’tittee that would be great.
Commissioner Burr: If the value for various purposes that the Planning Department has
been wortdng on, the value of business licenses you’ve seen that if you had that
information you and we would be able to make better jud=mnents on a variety of
circumstances then I would hope that would go into the discussion when the Council
considers it as a revenue source but also as a valuable information tool.
Mr. Gawf" Then I think especially in trying to get a handle of what is the degee of the
problem because I k.now in every community businesses go, they leave, they go out of
Cit3, of Palo ,-tim .Page 3.3
1 business. The question is are they being replaced in some way and is the net the sane or
2 are we just losing businesses? We don’t know that without a business license or some
3 other type of monitoring system.
4
5 Commissioner Schink: How exactly can you identify sales tax revenue?
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7 Chairman Bialson: By location.
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9 Ms. Furth: We can’t release the infom-~ation it leads to the gross revenues of the
10 business.
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12 Commissioner Schink: Right, so my question is how specific can you get in providing us
13 sales tax revenue without disclosing private information?
14
15 Ms. Arpan: We have it by business and we have geo areas and we could actually do a
16 geo area specific to other kinds of things that you want to get your hands around. But
17 basically, we pull the information by economic sector so it would be apparel, it would be
18 can-~eras. Ia~ an area like California Avenue and we have got Kemble and Schucat, they
19 have to ag~egate it a little more but we cannot give you the information that it’s a
20 camera shop and now you’re getting into a little bitmore so we wouldn’t give you
21 infom~ation on photo shops or something Iike thatl But we can provide it to you.
22
23 Commissioner Schink: Can you do it block by block for us?
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25 Ms. Furth: Not if it is too much infonr~ation.
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27 Ms. Arpan: No.
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29 Ms. Furth: Probably not is the answer.
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31 Ms. Arpan: I see what you are saying, aggegated.
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33 Commissioner Schink: I’m saying don’t give me apparel on the 500 block of University
34 Avenue just give me the 500 block on University Avenue.
35
36 Ms. Arpan: Then you run into a problem with that. If you do the area where Fry’s
37 Electronics is, then clearly you are going to know who the top sales tax generator is. So
;8 we have to be a little bit careful about how you pull the data.
39
40 Ms. Furth: We can only do it if doesn’t tell you anything you really want to ~ow.
41
42 Co~m-nissioner Schink: That is not altogether true. You could Nve us quarter mile strips
43 on E1 Cmnino and we could see the last ten years.
44
45 Ms. Furth: We could give you sectors. We could also give you trends without Nving
46 you numbers.
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Commissioner Schink: Yes, but the problem is that the absolute number will tell you
what the maximum rent is, you can back into it. You can determine whether rent is a
factor or not.
Ms. Furth: There is another issue to keep in mind. When you defme this problem it says
you don’t want to have retail replaced by office. Well, which retail and which office?
When people spoke on Midtown, when they say retai! some people, meant something they
either eat or put in their bag and carry out. Other people made a whole range of untaxed
both goods and services. So sales tax is like FAR, it is a proxy but it misses a lot. So that
is one complicated issue.
Ms. Arpan: I can tell you in a business district about where they are ebbing and flowing
and maybe that tells us a lot about those geo areas that we took a !ook at. We pulled
them for about eight business districts. So that would be a place to start anyway to see if
it told us anything. Then maybe we can decide from there how else we might be able to
provide the data.
Chairman Bialson: I would appreciate your sharing with the Commission any articles or
infonr~ation sources with regard to the general cormnercial retail trends that other cities,
not just in California but countrywide, are dealing with. There is probably something in
the American Planning hastitute and other such places as well as information that the
League of California Cities could give us. I think that would be helpful for us to compare
what is going on here to what is going on elsewhere. Also they tend to have a lot of the
information drawn from va-ious sources on that.
Commissioner Burt: That leads me to think about two factors that may exist in Palo Alto
that we also want to consider, disposable income trends as we have changing average
incomes per household in this community and also the income that is arriving.into this
corrmaunity as being a regionaI draw for retail and other services. Not only do we go and
spend our money at big box stores but people come in to spend their rnoney at our
restaurants and our boutiques mad all those things in ways that they don’t spend in their
own communities. So each of those trends would need to be !ooked at.
M_r. Gawf: Sotmds like we have three different markets, the residential who live here
market, we have the reNonal market that you described people coming fi-om other cities
to go Downtown and dance and eat, the third market is the office emp!oyee market that is
100,000 to 120,000 employees come in Monday through Friday 8:00-5:00. That is a
heck of a market.
Chairman Bialson: On California Avenue you can see them as they come offthe train. I
don’t condemn them for brining in traffic but they will come off the train and they will
hop skip down California Avenue and as they go home at night they will pick up things
to take home on the train. I think we have to acknowledge that is something that adds to
the retail environment of California Avenue.
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Mr. Gawf: It would be interesting to see our retail segment, how large it is, compared to
those three different markets. For 61,000 people do we have the right ratio of retail? For
the reNonal market it is harder to do. For the larger office market how does that play? I
don’t "know that is going to be interesting information.
Chairman Bialson: I think also just the fact that we have all the big box stores
sun’ounding us mad what does that do in terms of we don’t go to our local retailer for the
high margin items. People I talked to in Midtown acknowledged they don’t go to the
hardware store for a huge number of things. They go to Home Depot or they go to
Costco, etc. Then we are worried about the hardware store being forced out by high
rents. I said wait a second, what about money they can make just in those items you don’t
purchase from them. So to the extent you can, the information gathering is obviously
something we need to get.
Mr. Gawf: We have seven elements that I think we can put together in a one-page kind
of conceptual work plan. We can then talk about refining that. At the next session I
think we will also try to do an update on what other cities are doing and looking at the
existing retailers that we have and also look at the timetine for a consulting firm.
Con~nissioner Schink: Can I add one more element? Could you give us, maybe in a
chart form, what can go in places? I know in the past with some of these discussion there
is a misunderstanding that restaurants often times can’t jump in and fill the void mad sort
of why.
Ms. Furth: Like parking constraints.
Commissioner Schink: Yes, a food service has a higher parking demand so it generally is
more difficult to put in.
Ms. Furth: Lisa and I prepared the base matrix of identifying the uses in various districts
but this is another level of analysis.
Chairman Bialson: Does that provide everything for you?
Mr. Gawf: You provided everything for me about two hours ago. No, this is ~eat.
Commissioner Sclmaidt: I’d like to go back and emphasize defining the problem. I was
happy when I was reading the Staff report saying that that’s what you are starting out
with is looking to define the problem. Then Pat brought that up again and I think that is
important because now we have asked for the world here.
Mr. Gawf: I think that within that we can also discuss the approach of trying to do
something that is fairly quick versus a more long ten-n kind of study.
City of Pa!o A Ito Page 36
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Ms. Furth: We thought we had worked very hard and got very good advice from the
Commission on the Midtown and Charleston and basically the Counci! said this will do
for two years, it is not perfect, but it will do for two years and that is what they wanted.
Chairman Bialson: I tlzink Council understand the unintended consequences and the
harm that can be done. I think one of the first things we have to accept as a guidhag
principle is "do no harm."
I think I will close this item.
l~ports from Conmaittees,
COMMITTEES.
17 RE.PORTS FRDMNOFFICIALS.
11:Chairman Bialson: ~uestions, conaments or announceSfrom Conmaission
20 Members?
23 ANNOUNCEMENTS. -
26
2289 Chairman Bial~r next meyting_i~ going.to b~yhe regpt~~g of May 9,.2001,
~01 one week~ today. I will decl~e this meeting a6joume~. l~m~c yo~w much.
City qf Palo .4 lto Page 3 7
Attachment F
PLANNING DIVISION
STAFF REPORT
TO:PLANNING & TRANSPORTATION COMMISSION
FROM:Lisa Grote, Chief Planning Official
AGENDA DATES: August 8, 2001
SUBJECT:Ground Floor Use Restrictions including:
A)
B)
Changes to the Nonconforming Use Sections of the Zoning
Ordinance for the Downtown Commercial (CD), (18.49)
and Retail [R] (18.46) Districts requiring Discontinued
Nonconforming Uses to be Replaced with Conforming
Uses; and
Citywide Restrictions in Commercial Districts on the
Conversion of Ground Floor Retail Uses to Office Uses.
RECOMMENDATION:
Staff recommends that the Planning and Transportation Commission recommend that the
City Council:
Amend the California Avenue retail district and the Downtown commercial district
zoning regulation to require that nonconforming ground floor office uses that cease
or are abandoned be replaced with conforming ground floor uses. These changes
would affect the entire downtown area (zoned CD) and the California Avenue
Business District (zoned CC(2)[R](P) (Attachment A); and
Amend the Zoning Ordinance to prohibit the conversion in commercial districts of
ground floor retail uses to medical, professional, administrative and general
business offices. These changes would affect all neighborhood commercial (CN),
service commercial (CS), community commercial (CC), and downtown
commercial (CD) zoning districts (Attachment B).
In addition, staff will hire an economic consultant to conduct a study of office and retail
demand in commercial districts citywide so that the information can be used to develop a
City of Palo Alto Page 1
long-term approach to the question of regulating ground floor uses.
BACKGROUND:
Initially, City staff reviewed five business districts to determine the best course of action
for addressing the loss and retention of ground floor retail uses in Palo Alto. These areas
were: Midtown; Charleston Center; E1 Camino Real; Downtown; and the California
Avenue Business District.
City Council approved and extended an Interim Ordinance for Midtown and Charleston
Center on April 23,2001. E1 Camino Real is currently being reviewed and the
recommendation for an office and retail demand study will guide the approach that staff
proposes for the commercial segments of E1 Camino Real.
This staff report addresses the issues and recommendations affecting Downtown and
California Avenue Business District. Outreach meetings were held on January 26, 2001
for interested Downtown property and business owners and on January 30, 2001 for
California Avenue property and business owners. Minutes of these meetings are attached
for the Council’s information.
This staff report also addresses the City Council direction to staff to draft an ordinance
which prohibits the conversion of existing ground floor retail uses to office uses in all
commercial districts citywide (see Attachment C, Office of the City Council
Memorandum, dated March 15,2001). Individual Council members have reiterated that
direction since the item was initially brought to the Planning and Transportation
Commission on May 2, 2001.
DISCUSSION:
Modifications to Existing Ground Floor Restrictions:
The Downtown and the California Avenue Business District are both thriving retail
centers. Land use goal L-4 in the City’s Comprehensive Plan references retail centers as:
Inviting, pedestrian-scale centers that offer a variety of retail and commercial services and
provide focal points and community gathering places for the City’s residential
neighborhoods and employment districts.
The Downtown is defined in the Comprehensive Plan as a regional center with
commercial activity of citywide and regional significance including a mix of shopping,
office and some housing. Two and three story buildings with ground floor shops
characterize regional centers.
The California Avenue Business District is identified in the Comprehensive Plan as a
City of Palo Alto Page 2
Multi-neighborhood Center, which are retail shopping centers or districts that serve more
than one neighborhood with a diverse mix of uses including retail, service, office and
residential. One and two story buildings with storefront windows, entries and outdoor
seating areas create a pedestrian friendly atmosphere. Plazas and parks provide public
gathering spaces around which retail uses are clustered.
Ground floor retail retention issues that have emerged in other commercial districts
citywide have already been addressed by the ground floor retail restrictions in place
Downtown and in the California Avenue Business District. These overlay districts have
resulted in the retention of a strong retail and service presence that contributes to the
stated goals of the City’s Comprehensive Plan. The protection of the retail uses in these
areas has become a critical quality of life issue for local residents and businesses in Palo
Alto and other cities in the region.
One issue remains outstanding in both the Downtown and California Avenue Business
District and that is that existing nonconforming ground floor uses are currently allowed to
"roll-over" or change to another nonconforming use in the same land use category. This
allowance for the continuation of nonconforming uses prevents conforming retail and
personal service uses from locating in appropriate ground floor spaces. Modifying the
nonconforming use sections of the Palo Alto Municipal Code (PAMC) for these two areas
(Chapters 18.49 and 18.46) to state that nonconforming uses could not be changed to or
replaced by any use except a conforming use would insure that spaces vacated by
nonconforming uses would convert to conforming ground floor uses.
The effect of these modifications would be that as a ground floor office use vacates space
in the Downtown or California Avenue Business District, opportunities for retail growth
would occur, strengthening the retail and pedestrian-friendly character of the area. In
addition, since ~etail rents are typically less than office lease rates, the artificial inflation
that occurs when a ground floor space can be either office or retail, will not be a factor in
the siting of an appropriate tenant for the area. Making these changes to the Municipal
Code will result in increased opportunities for new ground floor retail and personal
service uses and existing conforming ground floor uses will be maintained.
The specific changes in the PAMC for both Downtown and the California Avenue
Business District include adding a provision which states that if there is a clear intent on
the part of a nonconforming business owner or property owner.to abandon the
nonconforming use, e.g. an expired lease, the replacement use must be a conforming one.
This will prevent the replacement of a nonconforming use that goes out of business with
another nonconforming use. In addition, the twelve-month period now applicable to
discontinued uses has been shortened to 90 days. This means that if any nonconforming
ground floor use ceases for a continuous 90-day period, it will be considered abandoned
and can only be replaced with a conforming use.
City of Palo Alto Page 3
Prohibiting the Conversion of Existing Retail Use to Office Use:
The City Council is also concerned about the loss of existing ground floor retail uses in
all commercial districts citywide. The March 15, 2001 memorandum from four of the
Council members to their colleagues outlines seven possible elements of an ordinance
which would prohibit the conversion of existing ground floor retail space to office use
(Attachment C). When staff originally brought this memorandum to the Planning and
Transportation Commission, a five to seven step work program was outlined about how
the issue could be evaluated (Attachment D, May 2, 2001 Planning and Transportation
Commission (PTC) staff report and Attachment E, Excerpt from the May 2, 2001 PTC
minutes).
Since May 2, 2001, Council members have emphasized that the intent of the
memorandum to colleagues and the direction given by the entire City Council was to keep
the effort straight-forward and relatively simple knowing that the issue would be explored
more fully as part of the zoning ordinance update. Given the direction to make the
potential changes simple, staff recommends that the permitted uses section of each of the
City’s four commercial zones (CN, CS, CC and CD) be amended so that new offices are
only allowed above the ground floor. In addition, only offices that have been continuously
in existence on the ground floor since March 19,2001 are allowed, provided that on such
date the office use was neither nonconforming or being amortized and was not located in
an area subject to a Specific Plan or Coordinated Area Plan, which specifically allows for
such ground floor offices. No existing ground floor retail use would be allowed to convert
to office use in any commercial district.
Staff does not recommend that an appeal process be established to allow conversion in
cases of financial hardship since land use decisions are not typically made based on
financial benefit or risk. Land use decisions are typically made based on compatibility
with surrounding uses and the long-term goals regarding the physical character of an area.
Staff is not recommending that the rest of the work items identified at the May 2, 2001
PTC meeting be completed at this time, with the exception of the retail/office demand
study. The retail/office demand study will aid staff during the zoning ordinance update
when discussing the possible long-term approaches to the issue of protecting and
expanding retail uses within the City.
POLICY IMPLICATIONS:
The changes proposed for Downtown and the California Avenue Business District as well
as those prohibiting the conversion of existing ground floor retail uses in all commercial
districts are consistent with stated goals, policies and programs in the Comprehensive
Plan. Specifically, Land use goal number 4, as stated in the Discussion section of this
City of Palo Alto Page 4
staff report, and the policies and programs that compliment the overall goal, call for the
preservation and enhancement of small-scale, pedestrian friendly local businesses in all
commercial areas.
RESOURCE IMPACT:
There will be no significant impact on existing staff resources as a result of the staff
proposed changes to the PAMC. If an appeal or exception process is included in the final
PAMC amendments, staff time will be required to process and evaluate applications for
an exception, hold public hearings and make required findings.
ENVIRONMENTAL REVIEW:
The proposed modifications to the PAMC are exempt from the Califomia Environmental
Quality Act pursuant to Section 15305 (Minor Alterations in Land Use Limitations) of the
CEQA Guidelines.
NEXT STEPS:
The attached proposed ordinances and Planning and Transportation Commission
recommendations will be forwarded to the City Council for consideration and action in
September 2001. A date for the City Council hearing has not yet been set. Legal and
display ads will be placed in the local newspapers at least twelve days prior to the City
Council hearing date once the date is known.
ATTACHMENTS:
Attachment A: Proposed ordinance amendments for Downtown and California Avenue
Business District.
Attachment B:
Attachment C:
Proposed ordinance amendments prohibiting the conversion of existing
ground floor retail uses in commercial districts to office uses.
Office of the City Council memorandum, dated March 15, 2001.
Attachment D:
Attachment E:
May 2, 2001 Planning and Transportation Commission staff report.
Excerpt from the May 2, 2001 Planning and Transportation Commission
minutes.
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
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
City of Palo Alto Page 5
Matt Taylor, Knowhere Store, 2741 Middlefield Road, Palo Alto, CA 94303
Russ White, Yolke Corp., 2741 Middlefield Road, Palo Alto, CA 94303
Mike Haley, 79 Avalon Drive, Los Altos, CA 94022
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
Rorma 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.corn, 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,
Palo Alto, CA 94303
Larry Wells, Larry Wells Salon, 2685 Middlefield Road, Palo Alto, CA 94306
City of Palo Alto Page 6
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 943O6
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
Consumers Cooperative Society of Palo Alto, Inc., 2605 Middlefield Road,
Palo Alto, CA 94306
Roxy Rapp, P O Box 1672, Palo Alto, CA 94306
Elizabeth Kuremin, 170 Rollingwood Drive, San Rafael, CA 94901
Gertrude Haley Trust, c/o Kathleen Haley, 1473 Dana Avenue, Palo Alto, CA 94301
Gregory M &PhylIis 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, P O 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.corn, 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
Taft 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
Jeff Hoel, 731 Colorado Avenue, Palo Alto, CA 94303
Geoff Provo, 733 Colorado Avenue, Palo Alto, CA 94303
City of Palo Alto Page 7
David Lyons, PayTrust 5675, P O Box 880418, San Francisco, CA 94188-0418
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 Caf~, Etc., 2680 Middlefield Road, Palo Alto, CA 94306
DJM Capital Parmers, 2570 W E1 Camino Real, Apt. 500, Mountain View,
CA 94040
Alhouse-Deaton Mgrnt. & 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, Caf~ Sophia Roasting Co., Charleston Shopping Center, 3904
City of Palo Alto Page 8
Middlefield Road, PaloAlto, CA 94303
Deb Glerum, Serra Park Dental, Charleston Shopping Center, 3920 Middlefield
Road, Palo Alto, CA 94303
Nancy Chan, PT RD, Back to Fimess, Charleston Shopping Center, 3906
Middlefield Road, Palo Alto, CA 94303
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, Paio 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
Prepared by:Lisa Grote, Chief Planning Official
Susan Arpan, Manager, Economic Resources Planning
Department/Division Head Approval:
Lisa Grote, Chief Planning Official
City of PaIo Alto Page 9
Attachment G
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MEETINGS ARE CABLECAST LIVE ON GOVERNMENT ACCESS CHANNEL 16’
August 8, 2001
REGULAR MEET1-NG - 7:00 PM
City Council Chambers
Civic Center, 1st Floor
250 Hamilton Avenue
Palo Alto, CaliforT~ia 94301
ROLL CALL: 7.’05 PM
Commissioners:
Annette Bialson, Chair
Patrick Burt, Vice-Chair
Karen Hohnan
Kathy Schmidt
Michael Griffin
Phyllis Cassel
Bonnie Packer
Staff:
Lisa Grote, Chief Planning Official
Sue Case, Senior Asst. City Attorney
John Lusardi, Current Planning Manager
Chandler Lee, Consultant Planner
Susan Arpan, Economics Resource Manager
Zariah Betten, Executive Secretary
Chair Bialson: Will the Secretary please take the roll.
Thank you. The first item is Oral Communications.
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 fi-om the secretary of the Commission.
The Planning Commission reserves the right to limit the oral communications period to
15 minutes. None.
Chair Bialson: I have not received any cards on that and I see no one who wishes to
speak so I will close that item. Next is Agenda Changes, Additions and Deletions.
AGENDA CHANGES, ADDITIONS AND DELETIONS. The agenda may have
additional items added to it up until 72 hours prior to meeting time. None.
Chair Bialson: We don’t seem to have any. No Consent Calendar.
City of Palo Alto Page 1
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SECOND
Commissioner Packer: Second.
MOTION PASSES
Chairman Burt: All in favor? (ayes) Unanimously approved.
At this time we would like to open public comments on Item 3 of the agenda.
Citywide Restrictions in Commercial Districts on the Conversion of Ground Floor
Retail uses to Office uses.
Chairman Burt: Commissioner Bialson.
Commissioner Bialson: I will not be able to participate due to a conflict from a client.
Commissioner Cassel: I can’t participate due to fact that I work for Stanford. Apparently
this includes that. This is very frustrating because you are talking about very general
issues which I wish I could comment on.
Commissioner Packer: I also cannot participate and I’m very frustrated because my
conflict is based on a tuition discount for my son from Stanford. So I will not be
participating either.
Chairman Burt: Thank you Commissioners, we will miss your participation.
At this time we’d like to ask for a brief Staff report followed by comments from the
public. I’d like to say that we are intending to leave the public comment period open.
We wanted to get public comments tonight for those people who have hung in here this
long to be able to participate but also people who wish to comment at our August 29th
meeting will have an opportunity to do so. Lisa.
Ms. Grote: Thank you, Chairman Burt and Commissioners. This is Item 3 in your
packet. It involves prohibiting existing retail uses from converting to office use. That
would be applicable in all commercial districts. So that’s the Neighborhood Commercial
Districts, Service Commercial, Community Commercial and Downtown Commercial.
This was generated by Council Memorandum on March 15th, it was a colleagues memo to
the Council and it was preliminarily presented to this Commission on May 2nd with a five
to seven step work program associated with it and how we could and would approach the
issue. Since May 2nd additional Council direction has been given to keep the
modifications simple, that the issue would be again evaluated more completely as part of
the Zoning Ordinance Update but that there was a need to take quick action. So instead
of proposing the seven step work program we are recommending again fairly
straightforward changes to wording in the Zoning Ordinance that would protect existing
Cio’ of Palo Alto Page 41
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retail uses in all commercial districts. That wording would actually only permit medical,
professional, administrative and general business office on floors above the ground level
for new uses and then would only permit medical, professional and general business
offices and administrative offices on the ground floor that have been continuously in
existence since March 19th of this year and were either nonconforming or in the process
of being amortized out on that date or are located in specific plan or coordinated area plan
areas that specifically allow those uses on the ground floor. So in other words, if you
have an existing retail use you could not replace it with an office use on the ground floor
because office uses would no longer be permitted on the ground floor in commercial
districts. That concludes the Staff report.
Chairman Burt: Thank you. Any questions from Commissioners at this time? Seeing
none, our first speaker is Pria Graves to be followed by Joy Ogawa who have up to five
minutes to speak. Please state you name and address for the record.
Ms. Graves: I am also very much in support of this change to the ordinance. One of the
problems we have in the CN Zone in particular is that currently it allows 5,000 square
feet of office by right, I understand. So we are seeing more and more of this turning into
office. There was an example in our neighborhood at the present time at 550 College.
There are two buildings, one which faces onto College and one which faces onto Stanton,
but it truly is one parcel. Up until April of last year they were used as a design studio
employing four people, an R & D facility that employed about four people and built
electric car controllers and things like that and a Klutz Press environment that did some
of their catalog work employing two people. At the present time it has been empty since
the existing tenants were evicted in April of 2000. The current owners have installed 22
cubical facilities in there, it is still empty but it has four off-street parking spots if people
park in tandem. The implication of that kind of an office density would be enormous. It
also is inconsistent with the other kinds of uses along that stretch. We have Klutz, we
have a laundromat and we have JJ&F and we are going to have common ground across
the street, which we are delighted to see. This kind of prohibition of this type of creeping
offices is I think, really critical to keeping these smaller areas vibrant and lively. I’m
very supportive of allowing offices upstairs. We do need the office workers to help
support the retail businesses but let’s keep them off the ground floor and keep it a
friendly retail centered environment for pedestrians and for street level users. Thank you
so much.
Chairman Burt: Thank you. Joy Ogawa to be followed by Yoriko Kishimoto.
Ms. Ogawa: I was one of the three members of the public who spoke at the May 2nd
Special Meeting on this subject and I wanted to submit a corrected version of the minutes
for that meeting. It is corrected for the part where I spoke. I just want to point out that
the third sentence of my comments should read, "However I think that preventing
conversions of retail services does not go far enough to protect our neighborhood
commercial areas." The word ’not’ was left out of the minutes and it totally changes the
meaning of that sentence.
Cio’ of Palo Alto Page 42
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Actually, I think that the approach that has been recommended by Staff now may address
some of the concerns that I expressed at the May 2na meeting. They may address it but
I’m not totally sure about that and I’d like some clarification. I’d like clarification about
how this ordinance will apply to specific properties. I have two examples and actually
Pria talked about the first. I didn’t realize that building was not used as offices prior to
now. I had assumed that it was offices so maybe you could go through this example as a
theoretical example thinking that it was office. In that case, if it was used as office
previously, then the tenants were evicted, then it was remodeled but now it is empty with
a ’For Lease’ sign on it. It has been empty for the better part of a year so it has not been-
continuously used as an office since March 19th. So the I guess the question is, under that
circumstance, where theoretically if was being used as office before but then has been
empty since March 19th would new office tenants be allowed to move in under the
proposed ordinance? I hope not but I’d like clarification on that.
The second example was a property that used to be a church, 555 College, last year a
remodeling began for 85% office use, 15% retail use. The office tenants did not move in
until the end of June of this year. Therefore, this building was never used as an office
until June of this year. Is this a permitted office use under the proposed ordinance? Can
I hope that the office tenant who moved in in June will be forced to move out? If not,
will a rollover of the office use to a new office tenant be allowed in the future? I’d like
that clarified.
While I do like the approach that Staff has recommended because it protects all current
permitted uses other than new ground floor office uses I would still prefer to have the
provisions that were included in Midtown and Charleston’s interim ordinance. Their
ordinances protect them from the rollover of current office use to new non-neighborhood
serving office tenants. This proposed ordinance does not.
Finally, I’m glad to hear that Staffwould be moving ahead on proposals from
commercial districts along E1 Camino. I hope that can move ahead expeditiously.
Midtown and Charleston have been protected by an interim ordinance since January and
we are still waiting for protection for our El Camino CN Districts. Thank you.
Chairman Burr: Thank you. Yoriko Kishimoto to be followed by Dorothy Bender.
Ms. Kishimoto: I’m here to strongly support this item. I wish it had come along 18
months ago and prevented the loss of many of our long term Midtown tenants. I also
wanted to make a couple of comments about its application to SOFA II area. I am
assuming it does cover the SOFA II Plan, if adopted. But even for that period after it is
adopted, my fear is that our vision and some direction for this may fall between the
cracks because I do see members of the Working Group, hesitating to require retail along
Homer and Emerson because there is a City-wide ordinance coming along. Then the
citywide process is also deferring to the specific coordinated area plan coming along. So
the Planning Commission or Council, it may be appropriate for you to provide some
policy direction as to what you would like to see there as part of the Staff study or the
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Council direction and to really encourage the SOFA group to develop a strong retail
vision for our area. Thank you.
Chairman Burt: Thank you. Dorothy Bender to be followed by Emily Renzel.
Ms. Dorothy Bender. 591 Military Way, Palo Alto: Welcome Commissioner Griffin and
Holman. I support the proposal. I’m mostly concerned about the economic consultant
study on E1 Camino and how that may delay any expeditious result of ground floor retail
protection on E1 Camino. There is a statement in here that says E1 Camino Real is
currently being reviewed and the recommendation for an office and retail demand study
will guide the approach that Staff proposes. I think over the last five, six, seven, eight
years the Barron Park Association has conducted local surveys and we all know that
neighborhood serving retail is absolutely essential to our community. South E1 Camino
also has a lot of motels and people are walking around looking to shop and buy things
and there are fewer and fewer places for them to purchase just the basic items. There is a
lot of ’For Lease’ signs and I am concerned about those businesses going to offices. So I
welcome anything that will stop that immediately. I want to support Annette Glenkoff’s
suggestion that we have a business registry so that we can keep track of these business. I
don’t know if it is this Commission, or which body will be looking at the types of uses
that come into our neighborhoods. We know that on El Camino we have a Blockbuster
and a Hollywood Video across the street from one another. On Middlefield Road we will
have two drag stores. Is there any way in which this type of ordinance could be creative
and do something about quotas? Then just fmally I want to remind the Commission, I
thank you for putting this on the agenda tonight, and remind you that the Council has
urged you to move on an expeditious schedule. So don’t study this to death. Thank you.
Chairman Burt: Thank you. Emily Renzel to be followed by Herb Borock.
Ms. Emily Renzel, 1056 Forest Avenue. Palo Alto: I too would like to welcome
Commissioners Griffin and Holman to the Planning Commission. It is nice to see you up
there. I just have one question, which I probably should know the answer to after all my
years on Planning Commission and Council but, the intent is to prevent retail conversion
but how auto repair uses considered? Are they considered retail or are they just
considered service industry and do they get swept into this conversion system? Maybe
that is just a question that I’ll leave lying there. I think that we’ve certainly seen in the
SOFA area several automotive buildings get converted to office buildings. Now we are
fiddling while Rome bums with our SOFA II plan and I think if we are going to be
effective at all with the SOFA II plan, we’ve got to somehow get that under control until
the plan is completed. I know that many years ago there was a sentiment and we left the
service commercial zone on some of those areas in order to keep the automotive uses in
place. The effect has been to put one of our most intensive zonings on areas that are now
the target of office developers. Because of this telescoping nature of the zoning they
allow all the uses of the mixed zone down until you get down to residential. So I think it
is important if you are trying to protect retail and encourage retail to determine whether
those automotive uses and that kind of service industry use is also going to prevent
offices. Thank you.
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Chairman Burt: Thank you. Our last speaker is Herb Borock.
Mr. Herb Borock, P.O. Box 632, Palo Alto: Good evening, Chairman Burt and
Commissioners. I also want to congratulate and welcome the two Cormnissioners and
congratulate Chairman Burt on his election as well.
I have been following all the changes in the zoning code that have been going on. I did
notice a reference toChapter 18.95 and that was a new one to me. My recollection was
that the nonconforming non-complying use chapter is 18.94 rather than 18.95. So unless
this is a new chapter I would hope that the reference would be corrected. Thank you.
Chairman Burt: Thank you. Before we adjourn this evening would Stafflike to respond
to any of the issues raised by speakers?
Ms. Grote: Thank you very much, yes. Automotive services are actually their own use.
They are not considered retail uses. In fact, in the retail definition, if you sell accessories
for automobiles, yes that is retail but it excludes service and installation of accessories or
parts. So automotive service is its own use.
The question about rolling over of office uses, that would still be permitted. The Council
direction to date has been to preserve existing retail uses in commercial districts. So if it
is an existing retail use it couldn’t convert to an off~ce use. If it’s an existing office use
which was conforming and continuously in place as of March 19th of this year then it
could continue and it could actually rollover to a different office use. The question about
whether or not in a particular case that didn’t become an office until June, I am going to
have to look into further and come back on August 29th.
Chairman Burt: Thank you. Any other questions from Commissioners at this time?
Karen.
Commissioner Holman: I do have a few.
Chairman Burt: Just so that Commissioners know, we will have an additional
opportunity at-our next meeting as well. Go right ahead.
Commissioner Holman: I’m certainly supportive of taking this action but I do have a
couple of questions. To give a little background on this, when the interim ordinance was
put in place for originally stopping the monster home and protecting historic homes there
was a great burden put on South Palo Alto and so developers went there. I have some
concern, I don’t want to bollix this up or delay it, but I do have some concern about
housing that is in these areas. Is the pressure then, if you can’t convert retail space to
office, is there going to be undue pressure put on housing in these areas to become
office? Would it be simple enough to deter that from happening? I’ll stop there for the
moment.
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Ms. Grote: That is an interesting question. I really would need to look a little further into
it but I don’t know that there is much ground-floor housing in commercial districts. We
have seen many more housing units recently as part of mixed-use projects but the housing
is typically on a second or third floor rather than a ground floor. So I don’t know that
you’d see a lot of pressure to convert that and it wouldn’t be applicable anyway since it is
not on a ground floor. Also it is more difficult to convert housing to a retail use than it
would be retail to office. They are very different types of internal circulation systems and
there are different requirements as far as the building code is concerned. So it is a
difficult transition to make from housing to office. So I don’t believe we would get that
same pressure. We can discuss that further on August 29th if you’d like but I don’t
believe we would get that pressure.
Commissioner Holman: I would actually like to have a little bit more information about
that. What is makingme go there is I see houses Downtown, for instance, that have been
converted to office. It evidently wasn’t too difficult for those to become office and there
are various other examples too but certainly in Downtown, those situations exist. So that
is one question.
Also another thing I was wondering if we could look at adding, again I don’t want to
delay this but it is a little thing, because to keep retail areas viable they have to be
inviting and welcoming and not broken. So would it be simple enough to add something
that would prohibit opaque window coverings on retail spaces or office spaces that exist
in retai! areas? I have two examples in my head and I don’t know if you want the
specifics or not but there are examples of where this happens. It really causes a break in
the enjoyment of a retail area. It seems like that might be a really simple thing to put into
place. Again, trying not to hold this up.
Ms. Grote: I believe the opaque window coverings and the general design would be more
appropriately dealt with as part of a design review. When applicants come in for
potential changes to any storefront or building it goes through an Architectural Review. I
think that’s where we would look, either at Staff level or the Board level, at what the
window treatment might be, what the lighting is going to be, what materials are used. I
wouldn’t recommend mixing design issues in with use issues. I think the opaque
covering is a design related issue and would be more appropriately dealt with as part of a
design review at the Architectural Review Board.
Commissioner Holman: I also would like to recommend that the business license be put
into place and again not hold this up for that. Also that the demand study on E1 Camino
not hold this up on E1 Camino.
Ms. Grote: I did want to address that too, thank you. The business or retail demand
study would actually be citywide for all commercial districts. It would be something that
we are going to do as part of an adjunct to the Zoning Ordinance Update to enable us to
address this issue in a more detailed way. Not having that retail demand study done, does
not exclude any of E1 Camino Real from any of these changes. So E1 Camino Real is still
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covered by these changes because it is in a CN and CS Zoning District. So it is still
covered.
Commissioner Holman: One more if you’ll bear with me here. The automotive issue,
because of working with SOFA that is something I am sensitive to, you answered one of
my questions which was I was thinking about a tire shop on E1 Camino. It sounds like
that would be protected. The tire shop would and the automotive wouldn’t. The same
scenario applies about not wanting unintentionally to put pressure on housing to become
office. We’ve seen a lot of pressure that has been implemented on the automotive uses.
Is there anything that we can do in SOFA II in the interim until the Coordinated Area
Plan is completed to protect the automotive uses?
Ms. Grote: That hasn’t been part of Council direction to date. So that is not included in
your packet of information that is before you tonight. It is not proposed at this point. I
think it is more appropriately dealt with as part of the overall SOFA plan rather than
pulling it out to be dealt with separately.
Chairman Burr: Alri~ht, seeing no other questions at this time I’d like to thank the public
for sticking it out this evening. We will continue this item until August 29, 2001. The
public hearing will be reopened at that time and we will have a more full discussion of
these issues.
At this time I would like to adjourn the meeting.
NEXT MEETING: Regular Meeting of August 29, 2001
City of Palo Alto Page 47
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:MEETINGS ARE CABLECAST LIVE ON GOVERNMENT ACCESS CHANNEL 16 ........
August 29~ 2001
REGULAR MEETING - 7:00 PM
City Council Chambers
Civic Center, 1st Floor
250 Hamilton Avenue
Palo Alto, California 94301
ROLL CALL: 7.’IO PM
Commissioners:
Patrick Burt, Chair
Bonnie Packer, Vice-Chair
- in conflict with Items 1 & 2
Karen Holman
Kathy Schmidt
Michael Griffin
Phyllis Cassel- in conflict with Items 1 & 2
Staff:
Lisa Grote, Chief Planning Official
Wynne Furth, Senior Assist. City Attorney
Susan Arpan, Economic Resources Manager
Joseph Kott, Chief Transportation Official
Zariah Betten, Executive Secreta~3~
Annette Bialson - absent and in conflict with Item
Chair Burt: At this time we would like to take the roll.
For the record I would like to state that Commissioners Packer, Bialson and Cassel all
have conflicts on Item 1 tonight which is the Citywide Retail issue. Commissioners
Packer and Cassel have conflicts on Item 2 which is the Inter-modal Transit Center. So
they will not be able to join us on those issues.
At this time we ordinarily have Oral Communications which is related to any speakers
from the public who wish to speak on items that are not on the agenda. I do not have any
cards at this time. So it looks like we will not have Oral Communications this evening.
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 Colrmaission reserves the right to limit the oral communications period to
15 minutes.
City of Palo Alto Page 1
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Chair Burr: Do we have any Agenda Changes, Additions or Deletions?
AGENDA CHANGES, ADDITIONS AND DELETIONS. The agenda may have
additional items added to it up until 72 hours prior to meeting time.
Ms. Lisa Grote, Chief Planning Official: You may want to discuss this later but, the
deletion of the library special commission representatives. We won’t be considering that
because there won’t be a joint commission formed.
CONSENT CALENDAR. None.
Chair Burt: Thank you.
At this time we will continue an item that we began at our last meeting. That is the
Citywide Restrictions in Commercial Districts on the Conversion of Ground Floor Retail
uses to Office uses. Would the Staff like to Nve us some additional information at this
time?
UNFINISHED BUSINESS.
Public Hearings:
1. Citywide Restrictions in Commercial Districts on the Conversion of Ground Floor
Retail uses to Office uses.
Ms. Grote: Thank you Chairman Burr and Commissioners. I did want to follow up with
just a couple of points. You had asked where this Citywide Restriction would apply. It
would be in all commercial districts. It would be CN which is Neighborhood
Commercial, CS which is the Service Commercial District, CC which is Community
Commercial and then CD which is the Downtown Commercial District. CC Districts are
California Avenue, the Stanford Shopping Center and also the Town & Country
Shopping Center. CN Districts, with the exception of Midtown and Charleston Centers,
would be covered. That would leave Alma Plaza and the Edgewood Plaza. Charleston
and Midtown would not be covered because they are already dealt with as part of interim
ordinances. There are other segments of CN, which is the Neighborhood Commercial
District, along E1 Camino Real and then much of the remainder of E1 Camino Real is
Service Commercial. There is some residential along there but the residential would not
be covered by this ordinance. Then Downtown is anything that is zoned CD and that
included CDN, which is the Neighborhood Combining District, and CDS which is the
Service Combining District, which does include Phase II of the SOFA, South of Forest
Area. So it would be covered by this ordinance.
Very simply, what we have done is made a language change or a wording change to those
districts which would not prohibit office use on the ground floor. Another question that
had come up last time is would this prevent all permitted uses from converting to office,
and yes, it would. So it would not just prevent retail uses from converting to office use it
City of Palo Alto Page 2
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would also prevent automotive service uses from converting to office, it would prevent
other personal services or business services from converting to office. It simply
disallows office on the ground floor. So that was a clarification that I did want to make
from two weeks ago.
With that, that concludes the Staff report. I did want to make sure to introduce Susan
Arpan who has been very instrumental in this whole process. Thank you.
Chair Burt: Thank you. At this time do Commissioners have any questions of Staff prior
to hearing additional cormnents from the public? Karen.
Commissioner Holman: Yes, I have one for clarification. Let’s presume that there are
some housing units in one of these districts and it is not a perrnitted use but we don’t
want to be eliminating housing units. Maybe it is a minor point, but would it be able to
be converted to office?
Ms. Grote: If it is housing on the ground floor it would not be permitted to convert to
office because housing actually is a permitted use in all of our commercial districts. It is
actually a permitted use in every single district in the City. So if you had a ground floor
residential unit and someone came in to convert that to office, office wouldn’t be allowed
so they could not convert it.
Chair Burr: At this time we do not have any additional speakers scheduled for this item.
So we will return to the Commission for discussion. Who would like to lead off?.
Michael.
Cormaaissioner Griffin: On the second page of the Staff report you talk about a discussion
on doing the study of the economic areas and.the impacts that would take place and you
say that this would be deferred for ultimate implementation in our zoning review that will
take place later on this year. Can you elaborate a little bit on that and tell us just exactly
how you see this playing out?
Ms. Grote: I think I will refer that to Susan, but yes, that would be a study that looks at
office demand and retail demand Citywide in all of the commercial districts. We would
use that as part of our zoning ordinance update to come up with a long-term solution or
strategy for dealing with the demand question.
Commissioner Griffin: So then there would be details then that would spin out of this
study, is that right?
Ms. Susan Arpan, Economic Resources Manager: Yes. If we went ahead and did this
study we would probably align it with the retail strategy that was completed about a year
ago. And we would take a took at the same business districts. We would track trends in
those business districts, we would track vacancies in those business districts and we
would come up with an idea of how much office could be accommodated in that district,
how much retail could be accommodated in that district. Rather than continuing to make
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policy without the kind of information that you need to do that policy we would have
baseline information and we’d be able to track this not only for this period of time but
we’d probably go back about five years so we would have baseline data that we could
build upon for future decision-making. We would also take a look at the oppommities
and challenges too with doing office in certain areas, with doing retail in certain areas.
We know now that the office demand has diminished quite a bit and I think that we are
going to see a real slowdown of some of the office that were actually planned not too
long ago. We need to figure out what to do with the new vacancies that are going to
emerge and what makes make good planning policy sense for the City. I think that you
need baseline data to do that.
Chair Burr: Kathy.
Commissioner Schmidt: I was essentially going to ask the same question but would that
then mean that even though this is not called an interim ordinance that we might come
back and make some changes to what is proposed tonight?
Ms. Arpan: In the Downtown area, for example, one of the things that is often talked
about is expanding the Ground Floor Retail Overlay. It may or may not make sense to do
that if we don’t have the retail demand to have that make some sense. So at least in that
instance it would make some sense to have the kind of information that would lead us to
make good policy.
Ms. Grote: Yes, we do have the opportunity to either fine tune this as part of the Zoning
Ordinance Update or come up with a different approach during that review or to keep it
as is currently. So we have all of those options. This can either be in place permanently
or if we decide as part of the Zoning Ordinance Update to change it we can do that.
Chair Burt: Kathy.
Commissioner Schmidt: When we talked about this a few months ago, the minutes are
included with this, we talked about a whole variety of things that we might want to do to
help really define the problem, some of them to help figure out what the problem is and
therefore how to fix it. Is that what is intended? Some of these things would be done but
we can’t do all of them again with the Zoning Ordinance Update.
Ms. Arpan: I think that’s true. I think it is going to help us to set priorities too. For
example, along the E1 Camino Real we may come up with some information that leads us
to realize that, hypothetically, we might come up with some information that tells us that
there really isn’t enough retail demand for the whole E1 Camino Real. So what we want
to do is really focus it in areas that support neighborhoods. So we would come to those
kinds of conclusions with this study. I think that part of the study would include
recommendations from the consultant who does the study, taking a look at what the
challenges are and what the opportunities are. Does that answer your question?
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Commissioner Schmidt: Sort of. With the study you are trying to do a broad- enough-
based piece of work that will help define where retail should be and what makes it work
mad what doesn’t make it work and some of the things that we identified in our previous
discussion that would really help define the problem.
Ms. Grote: That’s correct. We are anticipating that most of that will be wrapped into the
retail study or into other parts of the Zoning Ordinance Update were we will be going out
into the community with focus groups and workshops and discussions about different
types of uses, how to approach that, the interface between commercial and office and
retail uses with residential uses. So that problem will get defined through the Zoning
Ordinance Update as well as the retail demand study. So yes, we will be covering those
issues.
Commissioner Schmidt: So you will be sort of interpreting this as a kind of quick fix to
hold things as they are until we can really determine where we want to go, what the
problems are, etc.
Ms. Grote: That’s correct. Right.
Chair Burt: Karen.
Commissioner Holman: One little thing, maybe it is a matter of clean up. On
Attachment B, the first page, number 3, it says the City is experiencing an unprecedented
sustained demand for office space. Just for a little bit of clean up should it not say that at
times the City experiences unprecedented and sustained demand just so this isn’t dated
down the road?
Ms. Grote: Yes, we can make that modification and say that it consistently or frequently,
I think we can use those words.
Commissioner Holman: Anything of that nature just so it doesn’t date the document.
Ms. Grote: Sure.
Commissioner Schmidt: I was going to suggest the same thing. I agree completely.
Chair Burt: Just a couple of questions regarding where we might go after adoption of this
ordinance. Has Staff any thoughts on whether there should be a review of this ordinance,
in essence it is an interim ordinance although not officially being titled that way, but it is
a p!aceholder ordinance until we finish the Zoning Ordinance Update, correct?
Ms. Grote: That’s correct.
Chair Burt: Do we think that there may be a need to review this between now and the
completion of the Zoning Ordinance Update to look for any unforeseen consequences
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that we may want to respond to and to allow for that kind of input from the community if
those things occur?
Ms. Grote: You could make that recommendation that you might want t a checkpoint
every six months to come back and either reaffirm that yes, this ordinance is working that
there haven’t been unintended consequences or yes, there are some obvious ones and we
need to recommend some modifications. You could include that in a recommendation to
the Council.
Chair Burt: Then as we are proceeding on the Zoning Ordinance Update and this
segment of it of what to do in the retail area, does Staff have an intention to solicit
stakeholders input throughout the process?
Ms. Grote: Yes we do. That would come through focus groups as well as community
forums and workshops. So’ yes, we will be making a concerted effort to outreach to those
people.
Chair Butt: A minor detail, I saw in the ordinance section that they several times
prohibited take-out foods. I notice that we have a couple places in town where there are
bake your own pizzas for instance. How would places like that be treated because I think
they are in retail areas where they are thought of as being part of the ordinary retail sector
but I didn’t "know whether technically they would not be allowed under this ordinance.
Ms. Grote: We haven’t proposed any changes to that section. So ifa take-out place is
p.ermitted now it would continue to be permitted. Usually what we limit are the drive
thru establislvnents and do not permit those.
Chair Burr: So for instance, if there is a deli that doesn’t have its own seating is that
something that is intended to be prohibited?
Ms. Grote: That would not be intended to be prohibited. Delis that don’t have seating
would be considered retail and they can remain and would be permitted to come in as
new delis as well.
Ms. Wynne Furth. Senior Assistant City Attorney: This may be a matter that you want to
think about when you are looking at the commercial zones as part of the Zoning
Ordinance Update. What you are reading is just what it says now.
Chair Burt: It kind of goes to that question we had when we were looking at Midtown
and Charleston which is at what point in time do we need to look at the definitions and
clean them up and update them.
Ms. Furth: Definitely as part of the Zoning Ordinance Update.
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Chair Butt: Right. Any other questions from Commissioners? Then why don’t we enter
our discussion or entertain a motion at this time or after we have discussed it further.
Kathy.
MOTION
Commissioner Schmidt: I will move Staff recommendation for the ordinance with
Citywide Restrictions in Commercial Districts, the Conversion of Ground Floor Retail
uses to Office uses with the change in wording that Karen suggested to B-3 and with
some sort of checkpoint as well. Is six months a good time or is that too soon?
Ms. Grote: I think that would be up to the Commissioners but six months appears
reasonable.
Commissioner Schmidt: Okay, then with a six month check-in point.
SECOND
Commissioner Holman: I would second and also offer, I don’t know if this would be
specifically an amendment or a clarification. I would support Kathy’s motion with the
following two things: this does say supporting ground floor retail uses, we’ve clarified
that means basically any non-office use, and then also to say that this would include the
South of Forest Area. I understand that you said that because of the way it is zoned it
would be covered but I wanted to point it out specifically because the Colleagues Memo
said that it would be excluded. So I just wanted to clarify that. Other than that I second.
So it probably doesn’t require an amendment to the motion.
Ms. Grote: That’s correct. It would be clarification but not an amendment.
Commissioner Holman: Thanks.
Chair Burt: Kathy, did you want to speak any more to your motion?
Commissioner Schmidt: Just that I look forward to getting the analysis of what is going
on. I think this is an interim quick fix approach and we’re probably wishing that we
would have looked at doing quick fix awhile ago before a lot of the conversions that have
already happened happened. So even though the economy has definitely slowed down I
think it is reasonable to put this in place now and work with it through the Zoning
Ordinance Update and change it as required.
Chair Burr: Michael, any conm~ents?
Commissioner Griffin: I just reiterate the same points here. I think I am a little queasy
about doing this in the teeth of an economic downturn. On the other hand there is no
good time to do this sort of thing. I thought your motion having to do with the check
Cio: of Palo Alto Page 7
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backs is a good idea. We’ll get a little reality check as to what is really going on out
there so that we can fine tune this all encompassing ordinance.
Chair Burt: My concerns have been addressed. I had wanted to make sure that the
commercial services such as automotive were protected, that SOFA II was included and
that we have an opportunity to reappraise for unforeseen consequences which is always a
worry when we have something that is broad in scope like this. I think we have
adequately met all of those concerns and I anticipate that because of the current economic
condition this will be met with enough receptivity initially that it will give us a chance to
appraise it.
With that said, all those in favor? (ayes)
Karen, did you wish to speak further on the motion?
Commissioner Holman: I’m fine. I spoke most of my piece last week and Lisa has
clarified the issues I had so I’m fine voting on the motion.
MOTION PASSES
Chair Burt: So once again, all those in favor? (ayes) That passes unanimously with
Commissioners Bialson, Cassel and Packer not participating.
So our next item is discussion of the review of a proposed re-designa of the Inter-modal
Transit Center at University and Alma. We have Transportation Director Kott joining us.
Joe, would you like to make an initial presentation?
NEW BUSINESS.
Public Hearings:
Review of a proposed re-design of the area surrounding the Caltrain terminal at
University Avenue and Alma including the following majoroelements:
a) A new rail bridge over University Avenue.
b) A four track, two-center platform config~lration at the terminal.
c) Creation of an at-wade intersection at Alma and University.
d) Provision of a public park through division of University Avenue between Alma
and E1 Camino Real into two one-way sections.
e) An expanded bus transfer center, either at-grade adjacent to the terminal or below
the proposed rail passenger platforms.
Mr. Joe Kott. Transportation Director: Yes, Cormnissioner Burt. Thank you very much
and good evening Commissioners. It is very good to be back here before you.
Chair Burt: Nice to have you.
"City of Palo Alto Page 8
Attachment I
GROUND FLOOR PUBLIC MEETING
OCTOBER 30, 2001
11:00 AM
COUNCIL CHAMBERS
Verbatim Minutes
Staff:
Speakers:
Lisa Grote, Chief Planning Official
Susan Arpan, Economic Resources Manager
Jim Baer
Tony Carrasco
Steve Jarvis
Jean Fisher
Nina Moore
Terry Shuchat
Joy Ogawa
Bill Phillips
Alice Oeschger
Gene Gavenman
Candace Peterson
Deborah London
Lisa Grote, Chief Planning Official: Okay. I think we’re going to go ahead and get
started. I want to thank you all very much for coming today. We’re starting a couple of
minutes late. My name’s Lisa Grote. I’m the chief planning official for the City of Palo
Alto, and also with me today is Susan Arpan, who’s the manager of Economic Resources
Planning.
So, today is meant to be informal. What we’d like to do is talk about the draft ordinances
that the council will be considering on November 13th. What those ordinances do, and I
think all of you received them in a packet of information that was mailed to you, and if
you didn’t, we have extra copies over here on the table, but what those ordinances do are
two different things.
One is, to look at ground floor retail uses and other types of what are considered personal
service uses, on a city-wide basis in CN, which are neighborhood commercial zones, CS
which are service commercial zones, and CC which are community commercial zones,
and look at the protection of those retail uses such that if you were an existing retail use
on March 19th of this year, you would not be allowed to put in an office use in its place.
So, that’s Part A of what we’re here to talk about.
Page i
Part B has to do with the University Avenue area. It’s the downtown GF zone, which is
ground floor retail, which has existing ground floor restrictions on it, as well as California
Avenue, which has an R combining district which is a retail zone attached to it. And
what those ordinance changes would consider is that if there is a non-conforming office
use on the ground floor in either of those two areas, when that non-conforming use
vacates the site, a conforming use, which would be retail or a personal service related use,
would need to go in its place.
These are two separate ordinances. One, the first one that we were talking about, the city
wide restrictions, came from four council members who wrote what was called a
Colleagues’ Memo or Memorandum to the rest of the council saying, we ought to
consider these types of changes, and that then turned into direction to Staff to start
considering those types of changes.
The second aspect that we were talking about on California Avenue and University did
not come from the Colleagues’ Memo. It came from concern raised by property owners,
tenants, as well as residents in and around those two areas downtown, as well as
California Avenue.
So, although they’re related items, they are very distinct. When it goes to the Council,
they will have the opportunity to either adopt both of those alternatives, neither one of
them, or one and not the other. So, there are a range of options for them to consider, and
what we’d like to do today is get your questions, opinions, concerns. We have heard from
several people already that the economic situation has changed in the last couple of
months to the extent that the ground floor restrictions as applied to downtown and
California Avenue, in particular, may not make sense to change at this point, that maybe
we should be waiting to see what happens with the economy, to see what happens with
another parallel effort that’s going on, which is called the Zoning Ordinance Update,
which would Nve us more time to study this in detail. So, those are comments that have
come forward already.
The other is that, you’ll see some wording in one of the draft ordinances that deal with the
city wide potential restrictions on conversion that should probably be changed. It’s on the
bottom of page 2, and it goes to the top of page 3. This is the ordinance that deals with
sections 18.04.030, 18.49.050 and 18.41.030. There should be wording added there,
which clearly states that if a space was not occupied by a retail or personal service use on
March 19th that then it could convert to office, so that there is more flexibility in
potential conversions. So, the only thing that we would be protecting are those retail uses
and personal service uses that were in place on March 19th of this year. So, that’s a
clarification that needs to be pointed out to the CityCounci!.
Steve Jarvis: It modifies Section 2.
Ms. Grote: Yes. Let me give you the section number. It modifies, it’s actually Section 1.
Hold on. I’m sorry. You’re right. It’s Section 2. It’s 18.41.030 (h) under penr~itted uses.
Page 2
So, it’s the bottom of page 2, top of page 3. And that would more clearly protect the uses
that the Colleagues’ Memo referenced, which was retail services and personal services
that are retail-related or pedestrian-oriented.
So now I would like to open it up for discussion. Unfortunately, we have to use this
microphone, so we’re going to have to pass it around to people as you make comments.
And if you could state your name, and your business and/or address, that would be
helpful, so then we can get these minutes transcribed and send them on to the Council, so
theill get your comments directly, as well as summarized in a Staff Report. So, if we
could do that, we’ll need to pass it around as we go.
Jim Baer, 172 Universi _ty Avenue, Palo Alto: Jim Baer, Premiere Properties. We’re
involved as an owner or a property manager for owners of about 35 or 40 properties in the
downtown, in the California Avenue district about 10 properties and on E1 Camino, about
15.
Chop Keenan and I, and John Goldman of my office had a productive meeting with Lisa
Grote and Les White, interim planning director, last night, and I just want to report on
some of the points we made, so that if those of you who are in agreement that we have an
ordinance that’s gone beyond what the Council directive was and beyond what’s
appropriate for current economic conditions, that you may be able to use some of the
reference points that I point out.
The Council directive pointed out two things. If you’re a retail use in a C zone, CS, CN,
CC, CD on March 19th, the goal was not to have another Harmony Bakery problem
where high rent office would eliminate low rent retailer, and so, on March 19th, if you’re
a retailer, the goal was to not allow an owner to replace that retailer with a non-retail use
or personal service use until the new zoning ordinance was done, and we all as
stakeholders get to participate in that, hopefully.
The second was, they made exceptions for projects under either specific plans,
specifically referencing SOFA, or projects for which an application involving a change of
use had been submitted as of March 19th, 2001.
Staff ordinance greatly exceeds the directive. One that Lisa pointed out. As drafted, what
it says is, if you weren’t an office on March 19th, and have not continuously operated as
that same office use, then you will lose your right to be office anywhere in the city and
have to be a retail use. That’s an inversion with dramatic impacts.
All vacancies that existed on March 19th, whether they had never been retail or not,
would now be forced to be retail, and any vacancy that has occurred since March 19th
couldn’t be replaced because you wouldn’t have operated continuously since March 19th,
and this probably impacts as many as a hundred or 150 properties throughout the city,
contrary to the Councit intention.
Page 3
The second is, that this discussion of elimination of non-conforming uses in the CCR
zone of California Avenue and the GS zone of downtown, creates a problem that was
never raised by Council, but was raised anecdotally by neighbors without substance.
Union Bank, Citibank, Wells Fargo Bank, all of these would become non-conforming
uses that we eliminate because we’re taking, because the Staff as drafted is taking a very
value-laden position that if it involves money, it’s bad. If it involves failing restaurants,
it’s good. And this just isn’t what the Council intended. The GF boundaries and the R
boundaries were extensively debated with stakeholders and with members of the
community when they were established and they were.
As, data point. Currently, in the GF zone, there are 20 vacancies on the ground floor.
Throughout the entire downtown and all we did was analyze the downtown, there are 60
ground floor vacancies
Third data point is, there are 70 retail uses in the ground floor or personal service uses
outside of the GF boundary in the downtown. We didn’t incl-ude automotive services in
that, or that would increase the number probably to closer to 90 or a hundred. So, we
have an economic circumstance that works.
We have 70 retailers dotted throughout the downtown, outside of the GF zone. We have
50 ground floor vacancies, which would impose competition for retail users. There aren’t
in demand for 50 retail uses in the downtown, and there are already 20 vacancies in the
GF zone at the ground floor level. This is a disastrous economic circumstance. The
economics have worked over all and the Council were very wise and surgical when they
directed Staff to protect the loss of another Harmony Bakery, but not to do a far sweeping
ordinance. And with my respect to Staff, I think they have an agenda that’s infused with
something other than Council direction. I can tel! you, having talked with each of the
four Council Members who are authors of the memo, that they thought this way exceeded
anything that they had requested.
Recommended changes. One, drop the thing, and say, we had a perceived emergency
circumstance with the loss of [Sure Bizzarros]. If you want to throw Jose’s Pizza in that,
that’s okay, too, and Harmony Bakery that the sense that the village retailer would lose
out to dot.corn paying $10 a foot of rent was a legitimate concern when the debate first
started about 18 months.
By the time, the Council adopted the March 19th ordinance, we’d already started to see a
shift in economics. We now have a circumstance where in the downtown, vacancy is
about 20% throughout city wide. If you look on Cambridge Avenue, and I know Steve
Jarvis is here, and we represent four or five properties on Cambridge, we don’t even get
phone calls to lease Cambridge Avenue. That’s not a circumstance that’s going to correct
right away. Something like Printer’s Inc. bookstore can be marketed for a year without
getting a legitimate retail use of interest.
Page 4
So, the first is to say, Staff, ask your Council, whether due to changed economic
circumstances, whether they’d like to wrap this in to the full ordinance update and do a
meaningful stakeholder outreach to see what can work, understanding that many of the
owners of commercial properties live and make Palo Alto their home and are willing to
look at appropriate land use planning, which may mean some limitation of rights for
those.
Alternatively, eliminate the non-conforming use stuff. It hasn’t been analyzed. It isn’t a
problem that we have banks. Banks get a lot more customers during the day on
University Avenue than do the Noodle Shop. We have a national retail crisis, not a Palo
Alto rent-created retail crisis, so eliminate that.
The other is to recognize that when the Council talked about specific plan, such as SOFA,
the downtown GF zone and the R zone in the California Avenue evolved out of what was
the equivalent of a specific plan. So we should exempt, and by that I mean, Tony
Carrasco, Steve Jarvis have two sad little spaces on Hamilton between Alma and High,
which should be exempted. I mean, this ordinance would require that they become retail,
and that we should treat as exempt the CD zone and the CC-2 zone, because they went
through extensive debate and they have highly protected retail.
The next is to recognize that the Council who said, if you have an application for change
of use as of March 19th, then this doesn’t apply to you. There is no such application as a
change of use in any C zone because at the ground floor, you’re permitted to be office or
retail. What the Council intended was, if you have an ARB application submitted as of
March 19th, there is a process in the works, and you should be exempt from the ordinance
in reliance on the previous zoning.
I think that’s about it, and that’s probably more than you all wanted. IfI get a list of who’s
here today that Staffwill have, we will have prepared a notebook which includes a
schedule with photographs of all the vacancies in the GF zone, a schedule showing all the
vacancies in the ground floor, including the GS zone of which there are 60, a schedule
showing all the retail outside of the boundaries of the GF of which there are 70, and the
last one that we’ll be putting together is a list of all the vacancies in the downtown
showing how upside down we are economically. And I’d be glad to get those to you
because we should ask of our Staff not to be reactionary to information that’s gone by but
be very empirical when they make this kind of economic change.
Last comment. Land use engineering to protect an oak tree doesn’t require great empirical
information and analysis. This kind of land use planning is the most dangerous. To have
a sense that Staff or a group of zealous residentialists have the right view of what our
property should be, regardless of the quality of information leading to that conclusion, is a
similar disaster to the Historic Ordinance, that being, we addressed 2500 properties for a
20 property problem under the Historic Ordinance.
Page 5
We have a 10 property problem with cooperative landlords if the staff and neighbors will
work with them, who are trying to solve it with a thousand property ordinance that will
lead to vacancies like you’ve never seen, fold it up, move on, because there will not be the
capital to renovate any of the obsolete inventory in town under this kind of ordinance
anyway. You can tell we spent a lot of time on this, and I just wanted you to hear that
those of you who are not alone, we can be organized. We can have a hundred people at
council, to understand that this was a misstep, and we need to do that.
Ms. Grote: Okay. Some of the questions that Jim raised will be outlined in the Staff
Report, so it will give the Council an opportunity to comment on each of those questions
themselves, without their trying to speculate on what they meant. I think you had a
comment.
Tony Carrasco, 120 Hamilton Avenue~ Palo Alto: This is Tony Carrasco, 120 Hamilton
Avenue in Palo Alto. Firstly, I second what Jim Baerjust said. I think, initially, when
this ordinance came before the Chamber Board and the neighborhood admit town and
other outreach groups, the idea was as outlined earlier with what Jim spoke about, which
is existing retail and the conditions of existing retail should be retained.
That ordinance has now mushroomed into something that was not described to any of our
groups, and that’s sort of bad process. I think we need to go back to those groups and say,
here’s the modified ordinance, which is all retail all over the city. Now, that brings me to
the second point.
Many of these buildings that this ordinance would hit are buildings that are not designed
for retail. They’re sitting back. They’re designed for office. They have office lobbies.
You cannot make those kinds of buildings, turn those buildings into retail buildings.
They’re just not possible. And as I understand it from Council Members who wrote the
memo, didn’t intend to have those buildings included in this ordinance.
So, lastly, I think the ordinance was put in place because of a crisis that affected probably
two buildings and then maybe, as Jim says, affect 10, and we’re supposed to solve just
that little crisis. That crisis doesn’t exist any more. It’s a different market. It’s a different
time, and so I would recommend that we abandon this ordinance. Writing an ordinance
for a crisis time doesn’t make good policy.
Suan Arpan. Manager of Economic Resources Planning: The things that we’re doing are
motivated with good intent and with the desire to be as honest with people as possible.
There have been two processes that have gone forward, and I can’t remember all of the
dates, but, initially, we, as Staff, were looking at five areas based on Council direction.
Midtown, Downtown, California Avenue, Charleston Plaza, and the E1 Camino Real. We
came forward with recommendations for two of those areas, Charleston Plaza and
midtown.
Page 6
And then, as we were moving forward with our plans to address the other three areas,
there was a Colleagues’ Memo in March, and the Colleagues’ Memo proposed something
a little bit different.
So, there were two separate processes, so, in terms of going out to the Chamber of
Commerce and those other groups, we went out with the first process and that’s what we
talked about. And then a second situation came about as a result of the Colleagues’
Memo, which we’re now talking about. So I want to be real clear. There was this step
and then that step, and somehow or another, people aren’t differentiating too much. Does
that make it more clear?
Ms. Grote: I think her point was just that there were two parallel efforts going on and
they have become confused. So. Why don’t you start with your name?
Steve Jarvis. 540 UniversiW Avenue~ Palo Alto: Steve Jarvis, 540 University Avenue,
Palo Alto. I’m a building owner in Palo Alto. I’m a lifelong resident of Palo Alto, and I’m
an active Democrat. I believe in an active role of government, but an appropriate one.
I think that this ordinance proposes to kill a horse that’s dead. I second what Jim Baer and
Tony Carrasco have said.
The reality out there is office rents have dropped more than 50% in the last nine months.
I’m very painfully aware of this. In fact, retail rents, when you get them, are higher than
office rents right now. There is no incentive for any property owner to rent office on the
ground floor. We went through an incredible, unprecedented run up in rents that has
never been seen before, and I don’t think we’ll ever see it again. It was part of this big
bubble of the dot com business, which was gravity was in and around Palo Alto.
What we don’t want to see is a return to downtown Palo Alto and, to some extent,
California Avenue of the 1950s and ’60s, especially the ’60s and ’70s. It was a ghost
town. And the market forces usually adapt to changed circumstances.
We have changed circumstances right now. I think that it’s very important to maintain the
flexibility that the market can respond to the core needs. I’m not saying that we shouldn’t
have retail protection. There are core retail areas that should be retail only, and I include
banks and travel agencies, and that sort of thing as retail uses. The little old ladies who
come to my bank want to park and walk into the bank and not go up to the third floor or
park underground or what have you.
The next point is that all retail is not created equally. I own the last building on
University Avenue in the retail district, which is next to Perry’s. We built this building
approximately 20 years ago. It has had a very difficult time as a retail space because you
don’t get the foot traffic there. The restaurants next door even have difficulty. Perry’s is
the fourth one, I think, in the last ten years.
Page 7
We have an optometrist there that has survived and the other space, we’ve had people
come and go. We’re trying to get the new tenant up and operating now so the building
looks good. And, you know, we gave him a really soft rent because we wanted the space
occupied, knowing that it wasn’t a good retail space. The property that Mr. Carrasco and I
have on the south side of the last block of Hamilton that Jim Baer referred to has never
been a retail block, and it’s not developed as retail space, and it wouldn’t be. It would be
empty. It would be part of the ghost town of Palo Alto.
I own a building on Cambridge, comer of Cambridge and Birch that was built as an office
building. It has a lobby. It doesn’t have windows to show merchandise. It’s built out as
office use. To say that the ground floor there would be retail would be a taking. There
would be no question.
This ordinance would propose to put the determining factor in the hands of the tenant and
both Mr. Baer and I previously practiced law. We’d love to litigate the clear intent of the
user to abandon a grandfathered use. I mean, this is so vague, it’s unenforceable.. And the
property rights of the owner under no ordinance should be or can be transferred to the
user. This is to me, you know, totally ludicrous.
I think, not to go on and on, but with the vacancy, with the market factors, I think that the
present situation should be left a!one so that we can all try to survive, get through this real
period of national emergency. We haven’t even seen the bottom. Things continue to go
down. All the economic news is such. This is not just in the commercial real estate. The
retailers are hanging on by the skin of their teeth. The restaurants are doing the same.
Several of them are about ready to go out of business that would surprise you, that have
been in Palo Alto for a long, long time.
You just walk around and look in at night, you know, they’re empty. We have to maintain
the most greatest flexibility to encourage the market forces to struggle through and
survive at this time. So, I think this maybe well conceived 18 months ago, but it’s not
something that we need at this point. Thank you.
Jean Fisher. 3861 Corina Way, Palo Alto: Unfortunately, I don’t think this was even a
very well conceived plan. My name is Jean Fisher. I have no real monetary interest in
this since the building I own is covered very nicely and will never be a matter of
contention. What I do think is when buildings, when little morn and pop shops have gone
out of fashion, when they can no longer find it feasible and profitable to stay in business,
then an owner is told he can’t rent it to anyone but another or a little person who will be in
for a while and then be out. I think common sense should be used more than a bunch of
laws that are so strict and so unbending and so unwieldy that it kills a place.
I happen to be in midtown. I’ve watched that, the decline, and what do we have now. We
have coffeehouses. We have three of them. I imagine, before long, we’ll see most of
them go. What’s going to take their places? Nothing else. When Long’s wanted to go in,
it took them almost three years to get the city and the people to agree to it.
Page 8
Safeway. You’re saying retail, yet who helped them? Who said, certainly. Safeway
needs to be bigger, so they can stay in business. Most of us went down the street three
miles to Mountain View and went to the nice Safeway there.
Palo Alto lost business. They’re still losing business. It’s ridiculous. I think common
sense should be more than a dye in the wool paper that can’t be changed. I think that
common sense should be used far more. Thank you.
NinaMoore, 101 California Avenue, Palo Alto: Nina Moore, 101 California Avenue,
and rm also the President of the Palo Alto Central Commercial Association. And we
have what you call morn and pop little condominiums that we rent out, and prior to the
bubble, let’s go back to before we had all these crazy raises.
Part of our complex is zoned retail, part of it is offices. For myself, I have a retail, and
when I tried some five years ago to rent it out as retail, I put it on the market and I did not
determine the price. Gmbb & Ellis did. They are a commercial realtor. They determined
what my rent would be. It was on the market for one year prior to my getting someone to
rent it, and the only person that I could rent it to was office. And that was prior to all of
what? I go back and say, you know what? We the owners, whether it’s a small or big, we
have to determine what is feasible for us. There are certain areas, of course, that are,
obviously retail downtown University Avenue, but we are somewhere at the very end, by
the train station. No one goes there. It’s not a heavy traffic area. So, I think we should be
allowed to do what we need to do to survive.
And also, I go back to the point that this is a mute time to come up with any kind of
ordinances or any kind of restrictions. We’ve been told that we cannot extend options to
renew. Can you imaNne having somebody that is there and wants to stay, and you’re
asking them to leave because the city says, well, no, it’s not a conforming use at a time
when everybody’s sinking? And you’re talking about concern, protecting the mom and
pop. We are the owners of very smal! concerns. We have been here forever, and we
would like to stay, but we are being driven out.
Terry Shuchat, 290 California Avenue. Palo Alto: I’m Terry Shuchat. I own a camera
store on California Avenue, and also some other properties on California Avenue. And
being in the retail business there, as I have been for 36 years, I’d really like to see it
remain a retail area. However, I think that the city really needs to look at each building as
it exists and really determine whether a building is suitable for office space or for retail.
And the businesses that are retail spaces now, I firmly believe should remain retail.
However, as we’ve heard, there are many buildings, both on California Avenue and other
areas of Palo Alto, that would absolutely die as retai! space. They were never built as
retail space, even though they’re on a retail street, so, basically, developer~ took advantage
of the !ocation to perhaps tear down an existing retail space and put up a new building
that was mainly office space. And it’s really not fair to expect those developers to attempt
to bring a retail firm into a space that was designed as office space.
Page 9
However, I would hate to see the conversion of any more existing retail space. My idea
of a retail space is a place that is inviting to retail something that has large windows.
Something that basically, beckons for people to come inside, and when you have a
building that has a single door, very small windows or non-existent windows, it’s just
impossible for a retail store to survive there. So I would certainly like to see any existing
retail space remain that as far as converting other space back into retail, I would certainly
question that.
Joy Ogawa~ 2305 Yale Street, Palo Alto: My name is Joy Ogawa, and I live in a CN
zone, which is why I got the notice for this meeting. I guess, one thing I’m concerned
about is that, because the CN zone is being lumped together with the CF and CC here,
and there seems to be a lot of resistance to what’s being proposed for CC and CS, rm
concerned that the CN is going to lose out here and also get dumped in this process, and
the CN zone is for neighborhood serving uses.
Neighborhood serving retail primarily, and midtown and Charleston Plaza were recently
protected with an Interim Ordinance, and the rest of R-CN zones for our other
neighborhoods outside of midtown and Charleston, haven’t gotten that protection. We’ve
been kind of left out in the cold, waiting for something to come up for us, and in the
meantime, we’re seeing more development proposed for offices. There have been offices
that have, while they’re waiting to get turned into offices, in some places.
I certainly know of at least two retailers near my area, who, in the past few months have
moved out, have been forced out because their rents were increased and they were not
able to negotiate lower rents. So, I mean, you’re talking about this economic bubble has
burst thing, and there is that that. retailer is not going to be forced out any more while it
still seems to be happening, and it still seems the developers are proposing to develop
office in R-CN, and I want to see.
It’s important, very important that R-CN be used for what it’s meant to be used for, which
is neighborhood serving uses and so, if it’s necessary to pull out the CN from the rest of
this ordinance, in order to give protection to R-CN, which I believe is what Council
wanted to happen, then I’d like to see that. I don’t want to just go down the drain because
it’s being lumped to a CCN-CS, and, anyway, I guess that’s pretty much what I wanted to
say.
Ms. Grote: Before I give people a second chance to talk, is there someone who would
like to speak who hasn’t spoken?
Bill Phillips. 2770 Sand Hill. Menlo Park: Bil! Phillips with Stanford. And I just wanted
to make a comment about the general situation and also a couple of comments about our
specific situation at Stanford.
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First of all, the ordinance as it’s proposed right now is very inappropriate to th~
circumstances that exist today. As others have mentioned, the big mn up in office
demand and office rents was for a very short time and very short-lived. And what we’re
seeing right now, as Mr. Jarvis pointed out and as Jim Baer pointed out, is that retail
demand and retail rents are probably comparable with office demand and office rents, and
there’s probably not a whole lot of demand for either, on either side of that.
I looked at Attachment B and under sort of the recital section, Section 1 .B.3, if you read
that statement, I think it really points out how dramatically conditions have changed
because that’s a recital that reflected the urgency and need to do something. Every
statement in there now doesn’t apply to the circumstances today.
I was going to mention a couple of things about the shopping center. One is, that we have
our CN zone to it, the shopping center. It’s across Quarry where the Bank of America is
right now, so that neighborhood serving little section would have a non-conforming use
with the Bank of America the way this is currently read. I think that CN zone is
inappropriate. It’s really an adjunct to the CC zone of the shopping center.
The shopping center also, as a regional unit, under one ownership, is really designed to be
and try to work as a zone marketing unit. In doing so, the flexibility to have some office
or other service types of uses that would be office like is important. We need to introduce
those things for the customer, for the other tenants. We don’t have second stories that we
can shift them to. Most of the second story space is held by the major tenants and they
use it as retail. So things like the Stanford Hospital Health Library are one of the office
uses that we would have that would become a problem under the way this is now written.
Financial services would not be a problem for the CC zone of the shopping center
because that zone, in particular, does allow financial service uses.
So, I would encourage everyone to look at the current situation, see how dramatically it’s
changed, see whether this is an appropriate response, which I think it isn’t. And if they
feel it’s no longer an appropriate response, then put it back and deal with the market
situation that is going to be a challenge for all of us.
Ms. Grote: Okay.
Jim Baer: I promise this will be a very few seconds. This is an opportunity to take back
the city and its land use parameters. This is such a mis-step that it’s an opportunity for us
to get 500 people who are long-term residents with long-term business interests, and I
want to speak to the notion of what the CN means. There are a lot of single family homes
in RN-30 and RN-40 districts, and we have a comprehensive plan goal to increase
housing. Tear ’em down. Put in multiple family. That’s equivalent. I guess my real
statement is to say, and why I say take it back.
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In the last three or four years, we’ve had a shift where certain elements of the community
think they have property rights, but you don’t have property rights. I have rights; you
don’t. And it’s been a breakdown of dialogue. There’s a zealousness that is anti-
democratic. It lives on not having dialogue and exchange of information, and I think this
is just such a wonderful vehicle, because we could get 500 people around this saying, it’s
time to bring back in moderation how you make land use. We’re all good guys. We all
want what’s right in the mix of a healthy economy and increased housing and public
services and retail services, but we can’t be dictated by a small angry element of the
community who think they have the right answer.
Emanuel Kant, the philosopher said, "God help us from those who are in the right." And
we have been in that circumstance, and let’s not kid ourselves that it’s time to take it back
and get leadership who understand having capital and property doesn’t make you the
enemy of the policy objectives of the city.
Ms. Grote: I did want to just point out a clarification that in the ordinance as it would be
presented to the City Council, if you’ve got an existing retail use, or personal service, it
would be protected. It would not be able to convert to office, but if you’ve got an existing
office, you could remain office or change to another use.
Bill Phillips: Understood.
Ms. Grote: We will make that further dlarification to that first section, so that’s absolutely
clear, that the only uses that would be protected are retail and personal service. Other
cbmments? I know there was someone in the back who wanted to make a second
comment. Is there somebody who hasn’t spoken yet who would like to comment? Yes.
Alice Oesch~er. 2100 E1 Camino Real, Palo Alto: I’m Alice Oeschger. I’m representing
the Chilcote Trust Estate, 2100 E1 Camino Real. The property has been non-retail use.
Much of the property, not all of it, obviously, with J.J. Knapp, but much of the property
has been non-retail for over 40 years or more.
Main concern is that the way the ordinance seems to be written encompasses an area that
has several buildings or opportunities that would not be viable for retail. I echo the
comments that perhaps we need to look at individua! buildings and individual pieces of
property, rather than making blanket ordinances, especially the back side of this particular
property is definitely not viable for retail property, retail use, and because of the one
block Stratton Court address. So, it just is not to us viable, and it restricts any future use
of the property, which definitely needs to be considered.
Ms. Grote: Any other first comments? Knot, we’ll go around. Okay. For a second.
Jean Fisher: I think at this time, we all seem to be in agreement about dropping all these
ordinances and allowing people to survive. I don’t know how to go about making that the
case. I mean, it’s like right now we are meeting informally. What’s the next step?
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Ms. Grote: The next step is that these minutes will be transcribed and they’ll be attached
to a Staff Report that is included for the City Council’s consideration on November 13th,
and that is a Tuesday because Monday’s a holiday. But the issue will be taken up with the
City Council on November 13th, and they will then have a number of options. Either to
adopt the ordinances as currently presented in draft form or to take part of those
ordinances and either modify them or eliminate them altogether.
So there are a variety of options that they have. It would be important for you to come to
the November 13th meeting to express your opinions, and if you do have the time to write
something down beforehand, I’d encourage you to do that as well, so it can get into the
packet before they actually come to the meeting on the 13th. k gives them more time to
consider it. I think there’s a couple of first comments and then we’ll get back to Steve.
Gene Gavenman, 321 Richelien Court, Los Altos: My name is Gene Gavenman. 1 live in
Los Altos, but we have property in Palo Alto. And a lot of people here obviously have
vested interests, as do we. I would like to tell you a little anecdote of something that has
happened recently to explain and give a specific example of how the market has changed.
My mother-in-law passed away a little over a year ago. The lawyers handling her estate,
including property in Palo Alto, had to hire an appraiser. Well, a year ago when he did
his appraisal of property, our best and highest use which he has to appraise to, was for
office space, so we were thinking of converting our property to office space. Made sense.
An appraiser who has no interest other than doing his job agreed with that.
However, the inheritance process also says that you can look six months later and do an
appraisal and submit whichever one you want for inheritance tax purposes. Well,
obviously, we felt there was a downturn and so did the lawyers and so did the appraiser.
So he did another appraisal in the spring and summer of this year, and now, the best use is
retail. Lo and behold! The market forces actually work. And this is a specific example,
and nobody can argue that I have a bias in saying this. It’s an actual fact, and it was done
by an appraiser who has no axe to grind.
Ms. Grote: Did you have anything more? Okay. State your name.
Candace Peterson. Thoits Bros Inc, 629 Emerson St., Palo Alto: I’m Candace Peterson
with Thoits Bros, Inc. and Warren couldn’t be here today, but he asked me to state his
opinion, which is similar to Jim Baer, Tony Carrasco, and Steve Jarvis, and the gentleman
who just spoke. Let the market forces do what they do.
Steve Jarvis. 540 University Avenue. Palo Alto: Just want to respond to the question the
lady in the rear had. Where do we go from here? What do we do? We participate in the
democratic process. Call council members. Write letters. Get out like-minded people.
Appear at the meetings and participate. This is a representative. It should be a
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representative democracy, and I’m sure it will be. But the voices have to be heard, not
just of developers, but of small property owners. That’s very important.
It’s easier to use us as targets, but there’s lots of small property owners whether estates, or
this lady, Ms. Peterson, has a property. And it is really important for this whole economic
welfare and vitality of Palo Alto.
Ms. Grote: Okay. If there are no other comments or questions?
Jean Fisher: Just a couple of comments because. I’m sorry. I don’t know the lady’s name
there, but she was talking about protecting retail in a residential area and their wanting to
have, to protect retail there, and she said that very recently, they’ve had two instances
where retail was forced out and office space replaced them.
And, again, I’d say that anyone with space at this point of time, who can rent it out as
anything, they will grab on it. So, this is again, market forces. I’m sure everybody here
knows Micki Schneider. She was a Council Member and she owns Spirals downtown,
and when there was bubble, they actually forced her out, and that’s in the middle of retail
amongst retail. So, it’s just normal competition. So, when you have office space or retail
space, the owners will just have to rent it. It’s just such a hard market.
Ms. Grote: I think we’ll finish up with a few last comments, and then we’ll be finished by
12:00.
Alice Oeschger, 2100 E1 Camino Real, Palo Alto: Number one, price controls the
market. Need controls the market. If the city feels and deems it right to set these
standards, they then also should accept the responsibility for the people who are going to
lose money. There should. If they take, then they should be willing to give, and there
should be a repayment for any losses that are incurred.
Deborah London, (no address): My name is Deborah London, and we also own a
commercial condominium in Palo Alto Central, which is a completely different animal
than the mainline streets in the area like University. And I have to agree with what she
said, because we have a lease coming up that is now office, and we went back and forth
with the city, and we kind of received the nasty letter saying that when it ends in three
months, we must have retail or they were going to fine us $500 a day. So, it’s like, excuse
me? We have to do whatever we have to do to stay in business, and furthermore, they
wanted an additional penalty, and so, it’s crazy. Pardon me.
Nina Moore: I have a copy.
Deborah London, (no address): Pardon me? I’ve searched all over this morning for that
letter.
Nina Moore: I’ve got it.
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Deborah London, (no address): You do?
Nina Moore: I received one like it.
Deborah London, (no address): Okay. So that’s what we have to say. And one more
thing. I also have to say that we’ve owned that commercial condominium since 1984, and
the only thing we have ever been able to lease that with, to fill that space with has been
office. We have had a history of however many years it’s been, 17 years of office use in
that space, even though it’s retail.
Ms. Grote: I would like to just clarify before Joy speaks again, that that is an enforcement
case, a code enforcement case under existing zoning, rather than something that would be
affected necessarily by this ordinance.
Joy Ogawa, 2305 Yale Street, Palo Alto: Yeah, I guess I’m not really, I’m not a candidate,
so I’m not really well versed and prepared to speak on market forces versus zoning. But I
think we all benefit from zoning, and Palo Alto is the way it is because it’s a good place to
live because of zoning, and I mean, we want to keep our residential, residential. We want
to keep, we want to have. We have commercial areas and then we have areas that are
spelled out to be neighborhood commercial, and to say that, well, I’m sorry, but we can’t
make enough money unless we lease it out to office use that is not neighborhood serving,
that we should be allowed to do that because the market forces give us more money that
way. We could probably make a lot of money by converting residential areas into 1600
foot buildings, but the whole point of zoning is to be able to preserve the kind of quality
of life that makes this place a good place to be and a good place to live, and a good place
for businesses to have their business.
Ms. Grote: We need to let everybody speak and not have a response here at this point.
Joy Ogawa, 2305 Yale Street, Palo Alto: Someone addressed me, so I’m just trying to
respond. And I’m saying neighborhood commercial has a very specific purpose, and we
just want to have the ordinance reflect that purpose, and recently, it has. Our
neighborhood commercial has basically been taken over by non-neighborhood serving
office uses, and I’d like to see that stopped.
Ms. Grote: Okay.
Deborah London, (no address): I just have to say to that, that that’s all well and good, but
what is the point of a bunch of empty store fronts. I mean, I’m from a small town back
east, and it’s a whole other thing, but it’s like, it’s a ghost town. I mean, it’s ridiculous.
Anything that we can get in these spaces to make the town alive is what we need to do
and so that we can survive.
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Karen Holmam 725 Homer Avenue, Palo Alto: Okay. I have a question actually for
staff, which would include Lisa and Susan, and if somebody else wants to respond to it. I
have a question, an edification question, which is, when the market is in an upsurge, some
people and rm not pointing fingers at anybody here or anybody not here, some people
don’t want any zoning change or any restriction because they want to be able to get the
highest rent. You mentioned highest and best purpose, and that’s how appraisers would
look at property, so if you can get the highest rent, then some people don’t want any new
restriction or any ordinance then. And then in a down market, people have to, we all have
to survive, and so people don’t want a restriction placed then, so from a livability, and
from an everybody’s best interest perspective, how do you balance those from a zoning
perspective? And I know this ordinance is a proposal, but if you could just respond.to
that because there is a balancing of interests and survival for everybody, neighborhood
interests and commercial interests.
Ms. Grote: From a Planning and zoning perspective, we usually make recommendations
based on compatibility of uses and that has to do with the physical compatibility as well
as the operational compatibility, so we’ll look at densities, we’ll look at FARs, we look at
height limits, we look at the physical structure, how many hours during the day that
would be occupied and what kind of impact that has on a surrounding group of uses. So,
we don’t base it on finances. We don’t base it on whether it’s a good economic time or a
bad economic time. We look at the compatibility of the uses.
Part of what is behind the proposed modifications is that the compatibility of office with
those surrounding uses wasn’t as strong, didn’t contribute to the surrounding uses as much
as retail or other personal services could, so it was irrespective of how much money
somebody might make if it was an office use or a retail use.
So that’s from a zoning or a planning perspective. We try actually to keep the financial
aspect of it out of the decision making process, and I know for property owners, you can’t
do that, but for land use, livability, compatibility issues, it’s almost imperative that you do
do that, that you keep those kinds of considerations out of it, to make it a fairer decision
overall. And I don’t know if, Susan, you want to add anything?
Susan Arpan, Manager of Economic Resources Planning: I guess I’d just like to articulate
a little bit why I enjoy this effort from an economic development perspective. And that
had to do with spending a lot of time in the community with small businesses and talking
from time to time with developers and others, and noticing the character of some of the
smaller community businesses leave. And I hate to bring out specifics, because when I
do, then people say, well, it’s just that specific situation that you were looking at, but we
were looking at Printer’s Inc. going out. There were reasons for that.
We were taking a look at Harmony Bakery is certainly one of them. We were looking at
other small businesses like Phyllis, when others that were being threatened because they
thought that an office space could move into their area, and it turned out that they
couldn’t. But I was getting lots and lots of calls from small businesses that were leading
Page 16
me to the conclusion that maybe there was some city intervention needed, at least in the
small business districts, and that’s the kind of responsiveness I felt was a part of my job.
And so that’s why I began to start asking some of the questions that I did and getting
involved in this effort, so I think it’s the responsiveness I was trying to deal with. Karen?
Karen Holman, 725 Homer Avenue, Palo Alto I’d like to make one comment about the
service commercial areas, particularly those that are along the E1 Camino. Those .are not
foot traffic areas, and there really is limited types of retail that you can put on El Camino.
People don’t walk up and down E1 Camino, looking into shops. They do that on
University. They do it to a limited extent on California Avenue, but they certainly do not
do it on E! Camino, and yet they have taken the CS zoning that exists on E1 Camino and
incorporated it into that, and that does bother us a little bit as property owners there.
Mark Sabin: E1 Camino was a point that I wanted to make, too. I mean, long ago, there
were some decisions made in regards to E1 Camino that weren’t really grounded in
economic reality, and it really took this incredible bubble before anything started
happening south of Page Mill on El Camino, simply because there wasn’t anything else
available.
I’d hate to see the same thing that happened to E1 Camino try to be happening in other
parts of the community. In terms of a retail commercial mix as well, I think it would be
very interesting to know the impact once the Palo Alto Medical Foundation left on what
happened, what impact the foot traffic had on that as well.
So ,when I think ofmidtown, I think of some of the commercial that it is actually
supporting midtown, which enables those retail establishments to be available for the
neighborhood community as well. So, whatever decisions are made, I think they have to
be grounded in some semblance of economic reality rather than a district as somebody
thinks it should be.
Ms. Grote: Okay. One final comment. In the back there.
Jean Fisher: I just want to point out one thing. Economically, we’ve seen the bubble go
through the roof and burst in 1989 and then we’ve seen it again happening in the year
2000. I mean, it’s like we can’t run into emergency throughout when we just have a
bubble every once, every ten years, so that’s just kind of a point to just kind of leave out
there for people to think about as, right now, is the normal way of life, wh~re we have to
do the everyday stuffuntil we get another surge of something that will come around in
another five, six years.
Ms. Grote: Be more than happy to do that. And I do encourage you ifY0u haven’t signed
up to take a couple of minutes after the meeting, then sign up. It’s sitting here. I’ll have it
on the front bench, and I will mail it to everybody, so you have it.
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Jean Fisher~ 3861 Corina Way~ Palo Alto: I am Jean Fisher. I do own a building. It is
not of any part. I’m not endangered. I’m outside the pale. I’ve lived here 62 years. I’ve
watched this city grow. I’ve watched good Councils. l?ve watched some very bad
Councils. Very bad decisions. One of them you just mentioned. But Pve loved Palo
Alto, but l?d like to see more common sense used. We must grow. You either grow or
you slide back. I can understand the need for neighborhood retail, but you’ve got to
understand those neighborhood retailers have to make a living.
rve had years when my business building was not rented, because business was bad. Did
anyone say, "Oh, my goodness. That poor lady needs help." No! But when business is
good, and you can get rents and sort of recoup a little of your losses, all of a sudden,
you’re a bad guy. And I don’t think this is right. I do think the law of supply and demand
takes care of a lot of the problems.
Ms. Grote: Okay. I think that sums it up and thank you all for coming, and we will mail
you the mailing list and do come on November 13th. Thanks.
ADJOURNED: 12:05 PM
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