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HomeMy WebLinkAboutStaff Report 14656 City of Palo Alto (ID # 14656) City Council Staff Report Report Type: Consent Calendar Meeting Date: 9/12/2022 City of Palo Alto Page 1 Summary Title: 215/217 Alma: Retail Preservation Waiver for Animal Care Use Title: QUASI-JUDICIAL. 215/217 Alma Street {22PLN-00164}: Ratification of Director's Approval of Waiver From the Retail Preservation Ordinance for an Alternative Viable Use to Allow for an Animal Care Provider (Modern Animal) to Occupy a 4,200 Square Foot Portion of the Site. Zone District: Commercial Downtown Neighborhood with a Pedestrian Combining District (CD-N[P]). Environmental Assessment: Exempt from CEQA in Accordance With Guidelines Section 15061(b)(3) and 15301. From: City Manager Lead Department: Planning and Development Services Recommendation Staff recommends that Council approve the Record of Land Use Action in Attachment B, ratifying the Director’s decision approving the subject waiver request. Background This report transmits the Planning & Development Services Director’s tentative approval for a partial waiver from the retail preservation ordinance adopted by Council on August 24, 2022, for the property located at 215/217 Alma Street. Pursuant to Section 18.40.180 of the Municipal Code, owners of properties outside the Ground Floor (GF) and Retail (R) combining districts may apply for an adjustment or waiver from ground floor retail protections. This waiver is based on showing that the permitted retail or retail-like use is not viable, that the proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation, and that the proposed use will encourage active pedestrian-oriented activity and connections. Applicants must provide substantial evidence to support their application and bear the burden of proof. The Director renders a tentative decision, which is then placed on the City Council’s Consent agenda. The Council may accept City of Palo Alto Page 2 this decision on Consent, or alternatively, three council members may pull this item and require a future City Council public hearing. Discussion The owner of the property at 215/217 Alma, in conjunction with the future proposed tenant, Modern Animal, requested a partial waiver from ground floor retail protections on May 17, 2022. A location map is included in Attachment A. The applicant provided supporting information about the tenant history over the past ten years; surrounding land uses; leasing efforts over the past seven years, including prospective tenant inquiries; information about the proposed new use; and other information to support their request (Attachment D). The last known tenant to occupy the building was a retail tenant, The North Face. When the interim ground floor retail protection ordinance was enacted in May and June of 2015, this retail use was legally operating at the address. The North Face left this space in April 2016 to occupy retail space at Stanford Shopping Center. The property owner began marketing the space in October 2015 to prospective tenants. Although other tenants expressed interest and one tenant even signed a lease and filed for a conditional use permit, which was approved, the tenant eventually chose not to open their business at this site. The Retail Preservation ordinance gives the Director the authority to waive the provision requiring the preservation of retail or retail-like use in a tenant space. This decision is based on a determination that a retail or retail-like use is not viable at the location, that an alternative use will support the purposes of the zoning district and comprehensive plan, and that the proposed use will encourage active pedestrian-oriented activity and connections. The Director reviewed the attached waiver request, including the supporting information that was provided, and believes that it meets the standards of Section 18.40.160(c)(1)(B). In accordance with the provisions of the ordinance, the Director’s decision letter is included with this report as Attachment C. The subject site is zoned Commercial Downtown Neighborhood with a Pedestrian Combining District (CD-N[P]) and has a similar designation in the Comprehensive Plan. The CD zone is intended “to be a comprehensive zoning district for the downtown business area, accommodating a wide range of commercial uses serving city-wide and regional business and service needs, as well as providing for residential uses and neighborhood service needs.” The identified replacement use, animal care, is a permitted use within the CD-N zone District. Surrounding land uses include public facilities to the north and west (Palo Alto Water Tower and a small parklet space to the north along Alma and Caltrain across Alma), an office use to the east, and a single-family residential use to the south. The site is deemed potentially eligible for the California Register of Historic Resources (CRHR); therefore, any application for demolition and reconstruction would require further analysis of the site’s eligibility. Any future improvements associated with animal care use would be required to comply with all applicable City of Palo Alto Page 3 municipal code regulations. Only internal tenant improvements are proposed at this time. Treatment along the front windows would be required to comply with the Pedestrian Combining District requirements. Policy Implications Since the adoption of the Retail Preservation Ordinance in March 2016, two other waiver requests were granted. It is unclear if this proposed waiver request will encourage others to similarly seek relief from the Retail Preservation Ordinance. The subject waiver approval is not precedent-setting, however, as each request received is evaluated on its own merits and is subject to Council acceptance. The future use of the site by Modern Animal would comply with applicable zoning regulations and the Comprehensive Plan. Resource Impact The recommendation in this report has no significant budget or fiscal impacts. However, granting relief from the Retail Preservation Ordinance is anticipated to address the long- standing vacancy of the site, which may have marginal fiscal benefits to the city and other unquantifiable benefits to area businesses. Timeline The Council’s approval of this determination, ratifying the Director’s decision, is effective immediately and is final. A request to pull this item of consent would result in scheduling a future public Council hearing. Stakeholder Engagement As of the writing of this report, no public comments were received on the proposed project. Environmental Review This determination is exempt from the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3) of the CEQA Guidelines in that it can be seen with certainty that there is no possibility the decision to waive this property from the city’s retail preservation ordinance would cause a significant effect on the environment. The project is also exempt in accordance with CEQA Guidelines Section 15301 (existing facilities). Attachments: Attachment A: Location Map (PDF) Attachment B: Record of Land Use Action (DOCX) Attachment C: Director's Tentative Approval of the Requested Retail Waiver (PDF) Attachment D: Applicant's Project Description and Supporting Documentation (PDF) Fire_Station # 1 Tower_ W ell 0 193.0' 19 112.5' 37.5' 112.5' 37.5' 112.5' 37.5' 112.5' 37.5' 112.5' 5 50.0' 112.5' 50.0 112.5' 50.0' 112.5' 50.0' 112.5' 50.0' 112.5' 50.0' 112.5' 50.0' 112.5' 100.0' 112.5' 25.0' 112.5'125.0' 225.0' 37.5 35.0' 112.5' 35.0' 112.5' 75.0' 37.5' 75.0' 37.5' 75.0' 37.5' 75.0' 37.5' 75.0' 37.5' 75.0' 37.5' 37.5' 112.5' 50 112.5' 50.0' 112.5' 75.0' 112.5' 75.0' 112.5'50.0' 1112 50.0' 112.5' 75.0' 112.5' 75.0' 112.5' 65.0' 112.5' 15.0'18.5' 50.0' 131.0' 50.0' 112.5' 50.0' 112.5' 50.0' 94.0' 50.0' 94.0' 50.0' 50.0' 112.5' 50.0' 112.5' 50.0' 112.5' 50.0' 112.5'50.0' 32.5' 5.0' 80.0' 112.5' 5.0' 80.080.0 50.0' 112.5' 50.0' 112.5' 100.0' 112.5' 100.0' 112.5' 75.0' 112.5' 75.0' 112.5'275.0' 77.1' 147.0' 35.4' 128.0' 112.5' 35.4' 147.0' 35.4' 147.0' 75.0' 37.5' 75.0' 37.5' 75.0' 75.0' 75.0' 75.0' 150.0' 112.5'150.0' 112.5' 112 50.0' 112.5' 112 50.0' 112.5' 112 50.0' 112.5' 112 50.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 150.0' 112.5'150.0' 112.5' 89.7' 60.0' 0' 125.0' 54.0' 125.0' 54.0' 54.0 37.5' 75.0' 37.5' 75.0' 37.5' 75.0' 37.5' 75.0' 75.0' 75.0' 37.5' 5.0' 37.5' 50.0' 52.5' 112.5' 112.5' 50.0' 112.5' 100.0' 112.5' 75.0' 112.5' 125.0' 77.6' 77.6' 232230 317 301 186 1 323 325 329 334 247 244 250 177 220 205 2 335 328 120 146 344 217 222 148 171 301 235 258 212 163 115 291 247 210 201 207 164 129 139 251249 234 240 183 251 270215- 237 188 190 275 201 324 315 355 365 11 121 215 TREET H A W T H O R NE A V EN U E HIG H STREET EVERETT A VE N UE HIG H STREET A L M A STREET AL M A 0 R M -30 CD-N (P) C D-N (P) PC-5158 This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Project Site 0'87' Attachment A: Project Site 215/217 Alma CITY O F PALO A L TO IN C O R P O R ATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2016 City of Palo Alto chodgki, 2022-08-25 09:18:36 (\\cc-maps\Encompass\Admin\Personal\Planning.mdb) PF Page 1 of 3 APPROVAL NO. 2022-____ RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 215/217 ALMA STREET: RETAIL PRESERVATION WAIVER REQUEST (22PLN-00164) On August 26, 2022, the City Council of the City of Palo Alto Ratified the Director of Planning & Development Services Approval of a Retail Waiver Request for a 4,200 sf tenant space at 215/217 Alma, allowing for an Alternative Viable Use, Animal Care, making the following findings, determinations and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. The permitted retail or retail-like use is not viable at this time. B. The proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation will encourage active pedestrian- oriented activity and connections. C. On September 12, 2022, the City Council held considered the matter on its consent calendar, at which time all persons were afforded an opportunity to be heard in accordance with the Palo Alto Municipal Code and the Council’s Policies and Procedures. SECTION 2. Environmental Review. This determination is exempt from the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3) of the CEQA Guidelines in that it can be seen with certainty that there is no possibility the decision to waive this property from the city’s retail preservation ordinance would cause a significant effect on the environment. The project is also exempt in accordance with CEQA Guidelines Section 15301 (existing facilities). SECTION 3. Retail Waiver Request Findings 1. The permitted retail or retail-like use is not viable The applicant’s supporting documentation shows efforts made over a seven-year period (since October 2015) to lease the property without success. The site has been vacant since April 2016 when the former retail tenant vacated the space. Supporting information included in the administrative record and reflected in the staff report (CMR 14656) regarding the former tenant, the surrounding land uses, the site’s proximity to other retail locations, and efforts to lease the space support the conclusion that a permitted retail or retail-like use is not viable in this space at this time. 2. The proposed use will support the purposes of the zoning district and Comprehensive Plan The proposed Animal Care use is consistent with the allowed uses within the Neighborhood Commercial comprehensive plan land use designation and is a permitted use within the Page 2 of 3 Commercial Downtown Neighborhood (CD-N) zone District. 3. The proposed use will encourage active pedestrian- oriented activity and connections The proposed use encourages active pedestrian-oriented activity and connections that are conducive to retail uses. Specifically, animal care encourages pet owners to walk their pet to provide services and can serve as a draw to other nearby retail or retail-like spaces. SECTION 4. Retail Waiver Request Granted. A retail waiver request is granted for the project by the City Council under Palo Alto Municipal Code Section 18.40.180(c), effective August 26, 2022 and subject to the conditions of approval in Section 5 of this Record of Land Use Action. SECTION 5. Conditions of Approval. 1. CONFORMANCE WITH APPROVED USE. This approval allows for a waiver for the retail preservation ordinance for the proposed animal care use within a 4,200 square foot portion of the existing tenant space, which has been determined to meet the City’s criteria as an approved Alternative Active Viable Use. Any future use of this tenant space for a land use that does not meet the definition of retail, retail-like, or animal care, as defined in Chapter 18.04 of the municipal code would require a subsequent retail preservation waiver. This approval does not allow for a retail preservation waiver for the portion of the building that is currently occupied by a retail use (Walgreen’s Pharmacy). 2. SITE MODIFICATIONS. This project does not include approval of any changes to the building or site. Any future changes to the building or the site would be subject to applicable approvals and permits in conformance with all applicable regulations depending on the scope of the proposed work. 3. SIGNAGE. This approval does not include any signage or modifications to the approved signs on site. New signage or modifications to existing signage would be required to submit for a separate review and approval by the Planning Department. 4. PERIMETER MAINTENANCE. The tenant shall have a staff member patrol the public area on the adjacent Tower Well site once every 24 hours to clean up any waste left by pets. The tenant shall provide reminders within the waiting room for clients to clean up after their pets as well as make bags available for cleanup. 5. INDEMNITY. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. Page 3 of 3 SECTION 6. Term of Approval. Retail Waiver Request Approval. In the event that the tenant space is not occupied within one year of the date of council approval, the approval shall expire and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.77.090. Application for a one-year extension of this entitlement may be made prior to the expiration. A written request for a one-year extension shall be submitted prior to the expiration date in order to be considered by the Director of Planning and Development Services. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Development Services APPROVED AS TO FORM: ___________________________ Assistant City Attorney 215/217 Alma Street; Application #22PLN-00164 August 24, 2022 Richard Hackman 530 Emerson Street Palo Alto, CA 94301 Subject: 215/217 Alma Street Retail Preservation Waiver Determination 22PLN-00164 Dear Mr. Hackman, In accordance with Palo Alto Municipal Code Section 18.40.180(c), your request for a waiver from the City's retail preservation ordinance to allow an Alternative Viable Active Use (animal care use) for a 4,200 sf portion of the property at 215/217 Alma Street has been tentatively approved with conditions, as shown in Attachment A. This determination will be placed on the City Council's September 12, 2022 consent calendar agenda. If three or more council members vote to pull the item from the consent agenda, you will be notified of a future public hearing regarding your request. If approved on the consent agenda, this decision will be final. This determination is based on information provided to the City, including effort over the last seven years (since October 2015) to lease the property, information regarding the former tenant, the surrounding land uses and the site’s proximity to other retail locations. The City also noted that the most recent tenant, a retail use (The North Face), discontinued their lease in April 2016 after 24 years at the site in order to occupy a retail space at Stanford Shopping Center. The proposed Animal Care use is consistent with the allowed uses within the Neighborhood Commercial comprehensive plan land use designation and is a permitted use within the Commercial Downtown Neighborhood (CD-N) zone District. The proposed use encourages active pedestrian-oriented activity and connections that are condusive to retail uses. In accordance with PAMC 18.40.180(c)(1)(B), the Director may issue a tentative decision to approve a retail waiver for an Alternative Viable Use based on a findings that he permitted retail or retail-like use is not viable; the proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation; and the proposed use will encourage active pedestrian- oriented activity and connections. Based on the aforementioned information, the undersigned finds retail and retail-like uses are not viable within this tenant space at this time and that the proposed animal care use supports the purposes of the zoning district and Comprehensive plan land use designation and encourages pedestrian-oriented activity. No modifications to the building are DocuSign Envelope ID: 1B62D501-DCEA-4357-9BFB-F05C36381903 215/217 Alma Street; Application #22PLN-00164 proposed as part of the proposed project. Any physical modifications to the site proposed by Modern Animal in the future would be required to comply with the other applicable provisions of the municipal code and be consistent with the City's Comprehensive Plan. If you have any questions regarding this determination, please do not hesitate to contact me. Sincerely, Jonathan Lait Director of Planning & Development Services Attachment A: Conditions of Approval DocuSign Envelope ID: 1B62D501-DCEA-4357-9BFB-F05C36381903 215/217 Alma Street; Application #22PLN-00164 Attachment A: Conditions of Approval (215/217 Alma Street; 22PLN-00164) 1. CONFORMANCE WITH APPROVED USE. This approval allows for a waiver for the retail preservation ordinance for the proposed animal care use within a 4,200 sf portion of the existing tenant space, which has been determined to meet the City’s criteria as an approved Alternative Active Viable Use.Any future use of this tenant space for a land use that does not meet the definition of retail, retail-like, or animal care, as defined in Chapter 18.04 of the municipal code would require a subsequent retail preservation waiver. This approval does not allow for a retail preservation waiver for the portion of the building that is currently occupied by a retail use (Walgreen’s Pharmacy). 2. SITE MODIFICATIONS. This project does not include approval of any changes to the building or site. Any future changes to the building or the site would be subject to applicable approvals and permits in conformance with all applicable regulations depending on the scope of the proposed work. 3. SIGNAGE. This approval does not include any signage or modifications to the approved signs on site. New signage or modifications to existing signage would be required to submit for a separate review and approval by the Planning Department. 4. PERIMETER MAINTENANCE. The tenant shall have a staff member patrol the public area on the adjacent Tower Well site once every 24 hours to clean up any waste left by pets. The tenant shall provide reminders within the waiting room for clients to clean up after their pets as well as make bags available for cleanup. 5. INDEMNITY. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. 6. PERMIT EXPIRATION. The project approval shall be valid for a period of one year from the original date of approval. In the event that the proposed use does not occupy the space within a period of one year within the time limit specified above, the approval shall expire and be of no further force or effect. A written request for a one-year extension shall be submitted prior to the expiration date in order to be considered by the Director of Planning and Development Services. DocuSign Envelope ID: 1B62D501-DCEA-4357-9BFB-F05C36381903 1 Date: April 15, 2022 From: Modern Animal To: City of Palo Alto Subject: Cover Letter for Application for Retail Preservation Ordinance Waiver at 217 Alma Street, Palo Alto, CA To Whom It May Concern: I hope this letter finds you well. I’m writing to you today regarding our application for a retail preservation ordinance waiver at 217 Alma Street. This letter is intended to provide context and supporting information for our request that a retail preservation ordinance waiver be granted for Modern Animal use of the site. Below is information as to why we believe this is an appropriate action that’s in the best interest of the community. Site Modern Animal is proposing to occupy the vacant space at 217 Alma Street, Palo Alto, CA. This building is commonly referred to as the “former North Face store.” 217 Alma Street was home to the North Face store from March 1, 1992 until April 30, 2016 when North Face left the site for a space at Stanford Shopping Center. Since April 30, 2016 the building as remained vacant. The total size of 217 Alma Street is 7,771 square feet. There are eight parking spaces on-site. About Modern Animal Modern Animal is a membership based general practice veterinary care provider that has enhanced both the consumer and practitioner experiences by making meaningful improvements in veterinary technology and design. Pet ownership continues to skyrocket, and a Modern Animal location at 217 Alma Street will provide meaningful benefits to Palo Alto residents. A Modern Animal clinic will: • Offer high-quality pet care to an area with meaningful pet ownership. • Enhance the look and feel of the building at 217 Alma Street, which now sits vacant. • Generate new pedestrian activity in the area which is essential for vibrant retail. • Provide a new general practice veterinary clinic for canine and feline veterinary services including wellness, procedures, dental and urgent care. A Modern Animal clinic will not: • Provide any boarding or kenneling of any pets overnight. • Serve as an animal hospital. Modern Animal partners with select animal hospitals and will refer patients, if required. • Have staff at the facility overnight. 2 • Host special events or other things not normally associated with a veterinary clinic. The estimated number of patients to be present at any given time is approximately eight. Patients will visit for individual appointments which are spread evenly throughout the day. Appointments typically last 30-45 minutes. Standard hours of operation are 8:00 AM to 6:00 PM Monday through Sunday. Staff typically arrives about 45 minutes prior to opening (7:15 AM) and leaves about 60 minutes after closing (7:00 PM). Below are a few pictures of existing Modern Animal locations that give you a sense of what they look like: 3 As demonstrated in the above pictures, Modern Animal locations present a clean, modern look. Zoning 217 Alma Street is zoned Commercial Downtown District-Neighborhood with a Pedestrian Shopping Combining District, or CD-N (P). Palo Alto Municipal Code section 18.18 titled Downtown Commercial District governs the zoning for this site. According to Table 1 contained within Palo Alto Municipal Code Section 18.18.050, animal care, excluding boarding and kennels, is a permitted use at this site, however, because of the retail preservation ordinance, Modern Animal is not permitted to occupy the site without a waiver, despite being a permitted use. 4 Retail Preservation Ordinance Waiver Palo Alto Municipal Code Section 18.40.180 governs the retail preservation ordinance, including the waiver process. There are two grounds on which an applicant can apply for a retail preservation ordinance waiver: Economic Hardship or Alternative Viable Active Use, except in GF or R combining districts. Under the Economic Hardship waiver, “An applicant may request that the requirements of this section be adjusted or waived based on a showing that applying the requirements of this section would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property.” Under the Alternative Viable Active Use waiver, “Except in the GF or R combining districts, an applicant may request that the requirements of this Section be adjusted or waived based on a showing that: the permitted retail or retail-like use is not viable; the proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation; and the proposed use will encourage active pedestrian-oriented activity and connections.” Since 217 Alma Street is zoned CD-N (P), and therefore doesn’t include either a GF or R combining district, it’s permitted to apply for an Alternative Viable Active Use waiver for this site. Case for Retail Preservation Ordinance Waiver Modern Animal is applying for a retail preservation ordinance waiver under the alternative viable active use clause. The Palo Alto Municipal Code states the following, “Alternative Viable Active Use. Except in the GF or R combining districts, an applicant may request that the requirements of this Section 18.40.160 be adjusted or waived based on a showing that: the permitted retail or retail-like use is not viable; the proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation; and the proposed use will encourage active pedestrian-oriented activity and connections.” As stated above, there are three primary requirements to obtaining a retail preservation ordinance waiver under the alternative viable active use clause. 1. Demonstrating that the permitted retail use is not viable. 2. Demonstrating that the proposed use will support the zoning district and comprehensive plan. 3. Demonstrating that the proposed use will support pedestrian activity. Regarding the first point, demonstrating that the permitted retail use is not viable, there is strong evidence to support the conclusion that retail use is no longer viable at this location. The most telling sign is the length of vacancy at this site. As of April 30, 2022, this site will have been vacant for six years, despite being actively listed on the market. 5 The challenges with leasing this space include but are not limited to: 1) its direct competition with Stanford Shopping due to its close proximity as evidenced by North Face moving there; 2) its location set back from a main retail corridor; and 3) the overall shift within the retail industry from a focus on brick & mortar to online sales. Additionally, the COVID-19 pandemic has brought additional uncertainty to the retail market which only makes identifying and signing prospective tenants for the space more difficult. Regarding the second point, demonstrating that the proposed use will support the zoning district and comprehensive plan, Modern Animal is a perfect candidate to occupy this space. The proposed use will support the purposes of the zoning district and comprehensive plan land use designation by providing a valuable community service (i.e. veterinary care) that also generates new retail and pedestrian activity. Regarding the third point, demonstrating that the proposed use will support pedestrian activity, the proposed use will encourage active pedestrian-oriented activity and connections as Modern Animal will be operating a business that will bring a significant number of customers to the location each day that can then shop at other nearby retailers. Additionally, because many of the veterinary customers will be dog owners, there is a stronger than usual likelihood that customers will access the location by walking, which is great for retail. We feel that Modern Animal is a perfect tenant for 217 Alma Street based on the above criteria. Our occupancy of the site will remove a vacant building from the community and bring new life to the site with a community serving use. Additionally, Modern Animal will help achieve the objectives of both the zoning code and comprehensive plan by facilitating pedestrian orientated activity that supports the overall retail landscape of downtown Palo Alto. Conclusion According to the American Society for the Prevention of Cruelty to Animals (ASPCA), more than 23 million American households, nearly one in five, adopted a pet during the COVID-19 pandemic. The result of that is an increased need for veterinary care across the United States, and Modern Animal is doing our part to address that need. Part of the reason we are so interested in expanding to Palo Alto is because of how much this community values their pets. Palo Alto’s long history of investing in pet and animal care is well documented and our hope is that Modern Animal can be the next chapter in that history. We truly believe that this proposal is a win-win-win-win in that our use of the site will help the City of Palo Alto by re-tenanting a long vacant building, the retailers of Palo Alto by bringing new life and customers to a currently vacant site, the residents of Palo Alto by providing a much needed community service and, of course, the pets of Palo Alto by ensuring they get the high-quality veterinary care they deserve. Granting this waiver and allowing Modern Animal to occupy 217 Alma Street represents an amazing opportunity for everyone involved and we couldn’t be more excited about the chance to expand into Palo Alto. 6 In advance, thank you for your time and consideration of this application. If there is any additional information you would like from us, we are happy to provide it. Thank you again and please let us know if you have any questions. Respectfully, Joe Pantano Head of Real Estate & Development, Modern Animal Attachments: Modern Animal Slide Deck Modern Animal Plan Set Drawings for 217 Alma Street Palo Alto Water Tower (Open Space) Step (Business) Space For Lease (Business) Peninsula Open Space Trust (Non-Profit) Newmark (Business) ULU Ventures (Business) Vacant or Unclear Use Vacant or Unclear Use 1 Premier Properties 539 Alma Street Palo Alto, CA 94123 Date: June 22, 2022 From: Premier Properties To: City of Palo Alto Subject: Letter from Premier Properties on Modern Animal’s Retail Preservation Ordinance Waiver Application To Whom It May Concern, My name is Brad Ehikian and I’m with Premier Properties. We represent and manage the property located at 217 Alma Street, Palo Alto, CA. This letter is intended to provide the City of Palo Alto with additional information in support of Modern Animal’s application for a retail preservation ordinance waiver at 217 Alma Street. Background In May 2022, Modern Animal submitted their application for a retail preservation ordinance waiver at 217 Alma Street. 217 Alma Street is commonly referred to as the “Former North Face Store” or “Former North Face Site,” as this building was home to a North Face store from March 1, 1992 until April 30, 2016, when North Face left the site for a space at Stanford Shopping Center. The total size of 217 Alma Street is 7,771 square feet and there are eight parking spaces on-site. Since April 30, 2016, the approximately 4,200 square foot portion of the building that Modern Animal is seeking to occupy has remained vacant. The remaining approximately 3,500 square foot portion of the building has been occupied by Walgreens RX since January 2018. This location is used primarily for prescription refills and does not include the retail components traditionally found at a Walgreens. Leasing History Aware of the impending departure of the North Face store, we started marketing this site for retail tenants in October 2015. Almost immediately, the reasons why the North Face left became the same challenges to re-tenanting the space: a lack of pedestrian foot traffic and a lack of parking. For example, in September 2016 a restaurant group approached us and was interested in leasing the entire 7,771 square foot space for a restaurant use. Since restaurants require more parking than traditional retail, the City of Palo Alto told us that we would have to fully park the space for a restaurant to occupy it. So we developed a plan to install a 32 car mechanical parking system. However, to install a 32 car mechanical parking system for the restaurant, we would have had to 2 demolish a portion of the building to make space. But because this building is subject to the retail preservation ordinance, we weren’t permitted to remove any portion of the building, even if it was to facilitate the addition of parking for a retail restaurant use. Further complicating matters, because 217 Alma Street is not a part of Palo Alto’s downtown parking assessment district, there is no way to satisfy the parking requirement off-site in Palo Alto’s downtown garages. This ultimately led the restaurant group to walk away from this site, and the same requirements have dissuaded other prospective restaurant tenants as well. Another example, in May 2018 we signed a lease with a company that wanted to open a float station studio in the approximately 4,200 square foot portion of the building that Modern Animal is seeking to occupy. For the next 16 months, the float station studio worked with the City of Palo Alto on their conditional use permit (CUP) application, which was necessary for them to occupy the space. That CUP was ultimately granted by the City of Palo Alto in September 2019. From September 2019 to March 2020, the float station studio worked on obtaining their building permit for the space, however, as we all know, in March 2020 the COVID-19 pandemic struck which caused major upheaval in the brick & mortar retail space that was already undergoing a shift due to the success of online retail. Recognizing the uncertain future, the float station studio handed back the keys and walked away from their lease in Spring 2020. These two examples illuminate the different types of challenges we’ve faced trying to re-tenant the space with a conforming retail use. In the first example, the use conformed but because it was a restaurant, the use required additional parking. We attempted to install that parking but were prevented from doing so as the installation of the parking would have required the demolition of a portion of the retail space, which is protected. In the second example, we actually leased the space and had a tenant working on their building permit to occupy the space, but they walked away from the deal after the COVID-19 pandemic struck. While these are just two examples, they reflect the general mix of challenges that exist in leasing this space for retail use. Just to give you a sense of who has shown interest in this space, below is an image of our tour log since 2019: 3 As the above table demonstrates, the space that Modern Animal is seeking to occupy is not vacant for a lack of trying. It’s vacant due to a combination of both the current brick & mortar retail environment and City of Palo Alto requirements. It should also be noted that when we had this site listed there was not a required minimum rental rate associated with the vacant space. Since 2015 we have been open to a variety of deal structures and rates but, despite that, we have still struggled to find an interested and code compliant tenant. When Modern Animal came to us in July 2021 and said they would like the space, we immediately began working on a lease. Once that was completed, Modern Animal then began the process of preparing an application for a retail preservation ordinance waiver to occupy the space. Despite the need for a retail preservation ordinance waiver, we believe Modern Animal reflects what Palo Alto residents want as a part of their business community and presented a unique opportunity that would be openly embraced. So far that has proved true, as the reception to the prospect of this site being used for animal care has been very positive thus far. Additional Considerations Another thing to note is that with the retail preservation ordinance in effect, and animal care services unable to occupy formerly retail sites unless they have a waiver, there are extremely limited options within the city for where an animal care facility can be located, making the ability 4 of new animal care providers to serve Palo Alto much more difficult than many people realize. According to an American Society for the Prevention of Cruelty to Animals (ASPCA) article published in May 2021, “close to one in five households acquired a cat or dog since the beginning of the COVID-19 crisis, which would account for approximately 23 million American households based on the 2019 U.S. Census.”1 Due to Palo Alto’s restrictive zoning code, finding places to locate the animal care services necessary for all of the pandemic cats and dogs is proving extremely difficult. When you really dig-in on this issue, the retail preservation ordinance has effectively resulted in a moratorium, or close to it, on new animal care facilities in the city. This is especially true if someone seeks to open an animal care facility in the city’s most retail heavy areas such as downtown. Additionally, it’s important to highlight is that Modern Animal is not asking for the base zoning to change. Rather, Modern Animal is asking for retail preservation ordinance waiver. This is important to highlight because animal care, such as that being proposed by Modern Animal, is a permitted use on this site. Therefore, Modern Animal isn’t asking for something that’s incompatible with the existing environment, rather they’re just asking to change from one permitted use (retail) to another permitted use (animal care). If this building had been previously occupied by a permitted non-retail use, there would be no zoning issue with Modern Animal occupying the space. In closing, we’d just like to reiterate that we have been actively trying to lease this space since 2015. We’ve been active, not passive, in our efforts to re-tenant this space but a range of factors has made accomplishing that difficult. We hope this additional information has been helpful and informative. If there is any additional information we can provide you please let us know. We are happy to do so. Thank you for your time. Respectfully, Brad Ehikian Premier Properties 1 ASPCA article Link: https://www.aspca.org/about-us/press-releases/new-aspca-survey-shows-overwhelming- majority-dogs-and-cats-acquired-during