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HomeMy WebLinkAboutStaff Report 2304-1311CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, May 15, 2023 Council Chambers & Hybrid 5:30 PM     Agenda Item     5.QUASI-JUDICIAL. 151 S California Avenue {22PLN-00363}: Ratification of Director's Approval of Waiver from the Retail Preservation Ordinance for an Alternative Viable Use to Allow for a Medical Office Use to Occupy a 3,500 Square Foot Tenant Space. Zone District: CC(2). Environmental Assessment: Exempt from CEQA in Accordance with Guidelines Section 15061(b)(3) and 15301. City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Planning and Development Services Meeting Date: May 15, 2023 Report #:2304-1311 TITLE QUASI-JUDICIAL. 151 S California Avenue {22PLN-00363}: Ratification of Director's Approval of Waiver from the Retail Preservation Ordinance for an Alternative Viable Use to Allow for a Medical Office Use to Occupy a 3,500 Square Foot Tenant Space. Zone District: CC(2). Environmental Assessment: Exempt from CEQA in Accordance with Guidelines Section 15061(b)(3) and 15301. 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. EXECUTIVE SUMMARY 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 151 S California 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 this decision on Consent, or alternatively, three council members may pull this item and require a future City Council public hearing. BACKGROUND The proposed tenant space is located within an interior courtyard (Unit 101 of Building E) of the Palo Alto Central Mixed-Use Development. A location map is included in Attachment A and the Applicant’s Request Letter is included in Attachment C. In 2004 Council approved a rezoning for 50% of buildings C and D and all of building E to change the zoning designation for all or a portion of these buildings, removing the retail combining district from those specific buildings. This is reflected in Ordinance 4808, which is included in the supporting documentation in Attachment D. This change allowed for office uses on these ground floor spaces, while preserving the retail requirements for frontages along Park Boulevard and California Avenue. In 2016, Council adopted the retail preservation ordinance codified in 18.40.180 of the municipal code. Because this site was occupied by a retail-like use (eating and drinking) at the time, conversion to an office use on the ground floor was no longer permitted. Tenant History The current property owner for this 3,500 square foot tenant space acquired title in 2004 and proposed a restaurant use. From 2004 to 2022, three restaurant uses occupied this tenant space. Two of these restaurant tenants occupied the space (Orchid and China Delight). Although the property owner reports the tenants paid less than half of market rate for rent at the time, both left the site after two years each. Peking Duck occupied the space from 2010 to 2022 but reportedly paid approximately one-third of market rate for rent until 2020 and less than one- tenth market rate for rent between 2020 and 2021. The property owner states that the tenant was ultimately evicted in 2022 for failure to pay rent. Leasing Efforts Since April 2021 the owner indicates it has been attempting to lease the space to possible tenants. The supporting documents in Attachment D include a letter from Newmark Properties regarding the efforts to lease the space as well as a summary of 145 perspective tenants that Newmark marketed to but that ultimately indicated that the site would not work for their needs or otherwise stopped responding. These included a range of retail and retail-like uses such as personal service uses as well as eating and drinking uses. The applicant has heard more recently from three interested dental office tenants, but all three indicated that they were reluctant to commit with unknown factors that could be a barrier to their use of the site (i.e. the need for a waiver). Previous Application The applicant previously submitted a request in 2019 for a retail waiver request due to economic hardship. Staff denied the request because the site was still occupied and because the applicant failed to provide documentation to support the need for the waiver such as any information about rent reductions, concerns about the existing tenant, and/or efforts to lease the space to a different retail or retail-like use. The applicant withdrew their application prior to Council ratification of the Director’s decision. ANALYSIS Since the adoption of the Retail Preservation Ordinance in March 2016, three 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. Each request received is evaluated on its own merits and is subject to Council acceptance. The future use of the site by a medical office use that complies with the required conditions of approval would comply with applicable zoning regulations and the Comprehensive Plan. FISCAL/RESOURCE IMPACT The recommendation in this report has no significant budget or fiscal impacts. The site is currently vacant and therefore is not generating revenue. When it was occupied as an eating and drinking facility, the site generated marginal revenues for the City. Given the significant efforts to lease the space to a new similar tenant that would also generate revenue for the City without success, granting relief from the Retail Preservation Ordinance would have only marginal fiscal impacts on the City and may even result in an unquantifiable benefit to area businesses by avoiding vacancies in this commercial area. STAKEHOLDER ENGAGEMENT 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. 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 Attachment B: Draft Record of Land Use Action 151 S California Attachment C: Applicant's Request Letter Attachment D: Supporting documents Attachment E: 515 S. California Avenue Retail Preservation Waiver Determination 23PLN-00363 APPROVED BY: Jonathan Lait, Planning and Development Services Director dg 8 Bldg 7 Bldg F Bldg G Bldg H Bldg J Bldg K Bldg L Bldg M Bldg N Bldg P Bldg Q Bldg R Bldg Bldg O Bldg T Bldg D Bldg C Bldg B Bldg A Bldg E or location of ne boundary ee Ord. # 4848 130.0' 160.0' 381.6' 381.6' 140.0' 125.0' 92.0' 171.2' 157.6 95.3' 29.3' 95.0' 37.2' 95.0' 54.0'95.0' 54.0' 165.8' 69.6' 165.3' 83.3' 261.2' 99.4' 261.2' 100.4' 63.3' 89.0' 89.0' 89.0' 57.5' 67.5' 67.5' 01-7 133 151 153 155 157 159 00-108 154 2484 161 2555 2501 123 150 2401- 2585 2401 24332425 145 101- 125 2421 2441 250 2418- 2460 140 122 ENUE T PARK BOULEVARD SHERMAN AVENUE NDA LANE AVENUE GRANT AVENUE PENINSULA CORRIDOR JOINT POWERM-40 CC(2)(R) CC (2)(P) C This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Known Structures Tree (TR) Zone Districts Curb Edge abc Dimensions (AP) Sidewalk Underlying Lot Line abc Easement Water Feature Railroad abc Zone District Labels 0'81' Attachment A: Location Map 151 S California CITYOF PALO ALTOI N C O R P O R A T E D CAL I F OR N I A P a l o A l t o T h e C i t y o f A P R I L 1 6 1 8 9 4 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2016 City of Palo Alto chodgki, 2023-04-26 16:01:29 (\\cc-maps\Encompass\Admin\Personal\Planning.mdb) Area o f R e q u e s t Page 1 of 3 APPROVAL NO. 2023-____ RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 151 S. California Avenue: RETAIL PRESERVATION WAIVER REQUEST (23PLN-00363) On __________, 2023, the City Council of the City of Palo Alto Ratified the Director of Planning & Development Services Approval of a Retail Waiver Request for a 3,500 sf tenant space at 151 S. California, allowing for an Alternative Viable Use, Medical Office, 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 May 15, 2023, 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 the site’s 10-year history, documentation of the applicant’s efforts to lease the tenant space, information regarding the former tenant and eviction notice information, information showing significantly reduced rents offered to try to keep a tenant in the space, the surrounding land uses, previous actions and determinations related to this tenant space in accordance with Ordinance 4848, the visibility of the space from the street, and a support letter from the properties’ Home Owners Association. This information is detailed in the administrative record and reflected in the staff report (CMR 2304- 1311). This documentation supports 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 Medical Office use is consistent with the allowed uses within the Community Page 2 of 3 Commercial comprehensive plan land use designation and is a permitted use for tenant spaces less than 5,000 sf and that do not front California Avenue within the Community Commercial (2) Subdistrict (CC[2]) 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, medical office can serve as a draw, bringing users to the commercial district who may then take advantage of other nearby retail or retail-like spaces, such as eating and drinking or other traditional retail uses. 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 May 15, 2023 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 from the retail preservation ordinance for the proposed medical office use within a 3,500 sf portion of the existing tenant space, which has been determined to meet the City’s criteria as an approved Alternative Active Viable Use and is an otherwise permitted use within the CC(2) zone district for spaces less than 5,000 sf and that do not front California Avenue. Any future use of this tenant space for a land use that does not meet the definition of retail, retail-like, or medical office use, as defined in Chapter 18.04 of the municipal code and that meets the conditions of approval of this waiver would require a subsequent retail preservation waiver. 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. MEDICAL OFFICE USE REQUIREMENTS. To ensure that site modifications and use for any future medical office tenants comply with the requirements in PAMC Section 18.40.180(c)(1)(B) to encourage pedestrian-oriented activity, any medical office use within this space shall include a storefront/entry lobby design that is a minimum 500 sf and that is consistent with a retail environment, such as a reception desk or retail displays and display window. Additionally, medical office uses operating between the hours of of 10:00 p.m. and 6:00 a.m. are not permitted. Page 3 of 3 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. 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 JOHN PAUL HANNA A PROFESSIONAL CORPORATION DAVID M. VAN ATTA A PROFESSIONAL CORPORATION WILLIAM R. GARRETT A PROFESSIONAL CORPORATION March 22, 2023 HANNA & VAN ATTA ATTORNEYS AT LAW A PARTNERSHIP OF PROFESSIONAL CORPORATIONS 525 MIDDLEFIELD ROAD, SUITE 210 MENLO PARK, CALIFORNIA 94025 www.hanvan.com DELIVERY BY HAND City of Palo Alto Department of Planning and Development Services 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Claire Raybould, AICP Senior Planner TELEPHONE (650) 321-5700 FACSIMILE (650) 321-5639 Email: jhanna@hanvan.com Re: Application to Preserve Zoning Change Previously Adopted by the City Council Dear Claire: This letter accompanies the Planning Review Application filed by our clients, Robert and Peggy Lee, owners of the property known and described as 151 S. California Avenue, Condominium Unit No. E101. The property is located on the ground floor of the Palo Alto Central mixed -use condominium project. The original project plan was created in 1983 with the recordation of the Palo Alto Central East Enabling Declaration and the Condominium Plan attached as Exhibit "A" to the Declaration. I worked with the original owner/developer of the Palo Alto Central project, Bill Cox (now deceased). Bill was a man of many talents. In addition to developing many projects including Palo Alto Central, Palo Alto Plaza and Forest Towers (a11 mixed residential/commercial projects), he was also a very successful restauranteur, owning and managing at one time: Mustard's in Napa County, Fog City Diner in San Francisco, and Rio Grill in Carmel. Bill wanted to have a restaurant in his new project in Palo Alto and thought that Palo Alto Central would be a good location for it. Perhaps his desire to open a restaurant in Palo Alto caused him to discount the handicap of operating a successful restaurant without visible street frontage. The unit he selected for the restaurant (Unit No. E101) was located on the interior of the ground floor of the main Palo Alto Central building. The initial buyers of Unit No. E101 attempted for many years to operate a restaurant or find a tenant that would operate it as a restaurant. During the 22 years of their ownership, the property went through, among other things, foreclosure, bankruptcy, abandonment, vacation, and change of ownership five or six times. In 2004, the then -owners of the Unit petitioned the City to amend the zoning ordinance to change the zoning from CC(2)(R)(P), that is Community Commercial Combined/Retail Shopping Combining/Pedestrian Combining Classification, to a new zone: CC(2), Community Commercial Combining Classification. The Planning and Transportation Commission T:\WPWIN60\LETTERS\JPH\City of Palo Alto - 151 S. California[03 22 23].doc City of Palo Alto Attn: Claire Raybould, AICP March 22, 2023 Page 2 staff recommended approval of an ordinance modifying section 18.43.030 of the ordinance in rezoning portions of Palo Alto Central to allow office uses within the rear 50% of Buildings C and D, and all of Building E. Under the proposal, office use should be allowed as a permitted use within the rear 50% of each Building C and D and within all of Building E. Section 18.46.040 (Retail Shopping Combining District (R) Regulations) would be modified to allow office as a permitted use. In adopting the resolution, the City Council made findings that the amendment was in accord with the purposes of the Palo Alto Comprehension Plan in that retail uses are preserved in the areas of Palo Alto Central facing the pedestrian ways of California Avenue and Park Boulevard and office uses are permitted facing the interior courtyard where they will "contribute to the vitality of the California Avenue commercial area without detracting from the retail and pedestrian -oriented character of the area." Our clients acquired title to the unit in 2004. At the time they purchased, the property was vacant and they happened to be able to get a restaurant tenant right away. The remodeling costs spent by the new tenants amounted to $300,000. That tenant did not make it and sold the restaurant business, together with the 6 -year extended lease, after two years. At that time, our clients did not have an office prospect to rent, and the cost to convert the newly remodeled restaurant to an office shell was significant, so they elected to continue trying to make a go of it with a restaurant as a tenant. They have tried ever since to obtain and keep a restaurant operator in the unit, and none of the restaurant operators were successful, including the most recent one, Peking Duck, who has vacated the property and owes unpaid rent of $250,000. During those years there were times when the Palo Alto Central East Owners Association complained to the owners about the restaurant operation which caused friction between the other owners of other commercial and residential units in the Palo Alto Central project. The Palo Alto Central East Commercial HOA Board has asked the City to support the conversion of the restaurant operation into office -type use as they believe it will be an improvement to their HOA community. A copy of their letter dated September 22, 2022 is attached to the Planning Review Application. The ordinance approving the change in the zoning has never been amended or repealed, and still stands. The City did enact Urgency Interim Ordinance No. 5325 on May 11, 2015, in an effort to prevent conversion of ground floor to office or other non -retail uses which was at that time a trend in the City's commercial districts. This led to the adoption of Ordinance No. 5407 in 2017 amending section 18.40.180 to state that any ground floor retail or retail -like use permitted or operating as of March 2, 2015 may be replaced only by another retail or retail -like use, as permitted in the applicable district. The ordinance provided for waivers, adjustments and exemptions, the grounds for which included, among other things, economic hardship or a showing that a retail or retail -like use is not viable. Documentation to support a waiver, adjustment or exemption included showing a ten-year history of the site's occupancy and the reasons for perspective tenants vacating the premises. In adopting that ordinance in 2015, there is no indication in the record that T:\WPWIN60\LETTERS\JPH\City of Palo Alto - 151 S. Califomia[03 22 23].doc City of Palo Alto Attn: Claire Raybould, AICP March 22, 2023 Page 3 any consideration was given to the prior action taken by the City in 2004, and/or the justification for that prior action. Nothing happened between 2004 and 2017 that would indicate any difference between the situation that existed when the modification of the zoning to permit office use in the subject premises was discussed and considered. Indeed, the same pattern of unsuccessful restaurant operations continued unabated for the entire time up to 2017 and including up until today. Our clients, Robert and Peggy Lee, applied for a waiver adjustment and exemption in 2020, and the Director of Planning and Development Services denied their application. The finding was that the applicant had provided insufficient evidence to support the assertion that retail or retail -like uses (specifically restaurant operations) were not viable at the site. The Director of Planning and Development Services was of the opinion that insufficient evidence had been shown that retail or retail -like uses are not viable at that site. That finding ignored the almost 40 -year history of the owners of the subject property trying in vain to successfully operate a restaurant within Unit No. E101. It's noteworthy that all during that period of time, the owners have leased or attempted to lease the property at a rental per square foot rate which is less than half of the market rate for such space. As part of their application, the owners have attached a letter from Newmark Cornish and Carey, the realtors who have been actively working trying to lease the restaurant space since April of 2019. The realtors had concluded after attempting unsuccessfully to find a tenant that the location of the unit is such that it does not receive the foot traffic and retail synergy or the traffic visibility necessary to successfully operate a restaurant, or for that matter, a "retail -like" use. The realtors concluded that a revision to allow office and medical uses is necessary to render the property "rentable." We respectfully submit that the conditions that existed in 2004, when Ordinance No. 4848, Section 1 was adopted, are the same today, and that the appropriate and equitable response to our clients' application can and should be either of the following: 1. To adopt a resolution stating that the adoption of Ordinance No. 5407 was not intended to and did not amend or revoke Ordinance No. 4848 which remains in effect; or 2. That based on findings that the applicant has presented sufficient evidence to support an alternative viable active use waiver for medical office. Very truly yours, John' ? h1-T1anna JPH:sm cc: Peggy Lee (pez, vlee1628@a gmaii. com) T:\WPWIN60\LETTERSVPH\City of Palo Alto - 151 S. Califomia[03 22 23].doc 9/27/22, 6:24 PM IMG-5253.PNG IlN ;Re111a111t161fiury _ Loud: Tom. Rua: NY- vs_ Ma-ket.PSF- Nuum: Roach fri Loat;ing Steakhouse N/A N/A Vacant 13uf1'et N/A N/A Bankrupt Coffee Shop NIA NIA Forclosed Japanese Restaurant N/A NIA Purchased .from Bank Indian Restaurant N/A N/A Vacant & Sold Frrtirirlll,rniillllisturw Nam: 4-11111111 1111111L- Lease Terris I Rota PSF vs. Market PSF T Rc;sUc list Leat•en Orchid 611104 - 1/30106 .$2.00 / $450 Tenants paid $300k to remodel w/ little traffic. China Delight 2/1106 - li3€1108 $2.00 i $5.00 Hidden cuurtyward restaurant & sold business w/ 6 year extended lease. No Traffic. Every 2 years sold business. Jade Palace 2/1/08 4%3(1108 $2.00 1 $5.00 No visibility, auto & pedestrian traffic. Sold Business w/another 6 year extended lease. Peking Duck 5/1110 - 03/30/20 $2.00 i $6.00 To convert office shell needed $200k. Decided to waif w/ the 'granted Office Ordinance. Refused to extend lease. Peking Duck 411120.4130/22 $0.00 - $0.(18 I $5.00 Tenants w! side trading business to sustain. Cannot sell business . Peking Duck 5,1x'22 - Present $0.00 / Vacant No drive-thru or street dining. Unpaid rent & vacated. https:Ilmail.google.comlmaillu101?tab=wm#inbox?projector=1 1/1 3 -DAY NOTICE TO PAY RENT OR QUIT (California Code of Civil Procedure section 1161(2)] ReSident(S): Jeff Wei Szeto & Linda Cen (All Adult Occupants and Ali Others in Possession) Pv-a Premises:: 151 S California Ave E101, Palo Alto CA 9430 (Address, Apt #, City, State, Zip Code) TO RESIDENT(S): PLEASE TAKE NOTICE that within three (3) days after service upon you of this Notice you are hereby required to PAY to the undersigned the rent for the above described premises, of which you now hold possession, amounting to the sum of ($ 256310, dollars, enumerated as follows: 8262oDUE FROM 04101 ,202(TO 121011 90840DUE FROM ,01101. .... , 202.1 TO 12/01 37s5oDUE FROM 01101 , 2022 TO 05/01 2020 2021 2022 or QUIT and deliver up possession of the premises. YOU ARE FURTHER NOTIFIED that the Landlord does hereby elect to declare a forfeiture of your rental agreement under which you now hold possession of the above -described premises, and if you fail to perform or otherwise damply with this Notice, will institute legal proceedings to recover rent and possession of the premises which could result in a judgment against you including rent, hod -over rent damages, costs and attorney fees together with treble damages as allowed by law. SECTION 594 OF THE PENAL CODE OF CALIFORNIA PROVIDES THAT EVERY PERSON WHO MALICIOUSLY INJURES, OR DES II-XIYS ANY REAL PROPERTY NOT HIS OWN ... IS GUILTY OF VANDALISM." (A FELONY OR MISDEMEANOR) AS REQUIRED BY LAW: YOU ARE HEREBY NOTIFIED THAT A NEGATIVE CREDIT REPORT REFLECTING ON YOUR CREDIT RECORD MAY BE SUBMITTED TO A CREDIT REPORTING AGENCY IF YOU FAIL TO FULFILL THE TERMS OF YOUR CREDIT OBLIGATIONS., California Civil Code. section 1785.26(c)(2), date: 06/29 22 Robert Lee 408-306-1833 Name of Person or Entity rent is payable to: Peoz�'� Lee Telephone number: Name of Person or Entity rent is delivered to: Address for payment: "If payment may be made in person, the usual hours and days for payment: 12-3 pm Mondav-Friday in Gerson (Payment • may be made by Certified Funds and/or Cash a Check, pursuant your Rental Agreement.) UNAUTHORIZED USE PROHIBITED For Members Canty Apartment Association, California Southern Cities Approved Farm #F70 — 1/06 41.1.0Frititti araizsok Newmark Cornish & Carey Josh Shumsky CA RE License #01883266 September21, 2022 City of Palo Alto Planning Department 285 Hamilton Ave., 1st. Floor Palo Alto, CA 94301 Re: 151 S. Caliornia Avenue, Palo Alto, CA - Retail Leasing Efforts Dear City Planner: My name is Joshua Shumsky, and I have been actively working to lease the —3,500 square feet current restaurant space at 151 S. California Avenue in Palo Alto since April of 2019. I have been a retail leasing specialist for the last 9 years, with a prior four and a half years working within the retail companies themselves. Through my leasing of downtown -focused properties in downtown Los Gatos, Mountain View, and the newly created downtown in Cupertino (Main Street Cupertino), I have developed a broad list of fitness, restaurant, and retail tenants as well as a strong leasing outreach program to target established and newly expanding groups, alike. The Palo Alto address and local/regional mix of tenants along California Ave has historically been a strong selling feature for restuarants, fitness/retail uses, and continues to create a real buzz in the market. Upon execution of the listing agreement, our marketing efforts began immediately, with a focus on the following items: visibility to potential tenants online (Co -Star, Loopnet, Marketing Blasts to the brokerage community and retail users) and finally targeted direct submittals via email as well as phone calls to potential tenants. Based on the limited availability in the core downtown markets of Palo Alto we expected and initially received interest from groups such as Orangetheory Fitness, who would have a been a potential fit for the full 3,500 square feet space, as well as other like users. These inquiries were primarily informational, and what we determined were that few if any were for retail uses. The majority of the calls were for Office /Medical space, which is currently not approved within the existing unit. Furthermore, the fitness and retailer users with which we connected were concerned about the lack of street visibility of the space, due to the location within the courtyard, as well as the unconvential layout of the unit. This particular space has multiple jogs and step backs that make a traditional retail layout challenging. The space has been vacanted by Peking Duck for three (3) months now. We have re -focused our efforts on leasing the space as a turn key restaurant. We have had interest from various restauranters such as Taishoken Ramen, Ail That Shabu, Silverlake Ramen, Yuk Dae Jang, and Chubby Cattle . The feedback that we have received is that the courtyard location lacks visibility. This is a huge negative because there is no car or foot traffic which is vital for restuarants. In addition, there is no street dining area of drive through capabilities. Furthermore, the space is triangular in shape and would be extremely difficult to demise into two smaller units. The restroom core would be impossible to use by a front tenant as it is located to the rear of the space. Additionally, I created a robust marketing campaign complete with a marketing brochure, marketing e -blast, and prominent listing placement on both Costar and Loopnet as well as on the Newmark Knight Frank website. The feedback we received from this more robust marketing exposure was also initially strong, and with the available 3055 Olin Avenue Suite 2200 San Jose, CA 95128 T 408.727.9600 F 408.988.6340 www.ngkf.com September 21, 2022 Page 2 of 2 information on the websites the users looking for ±3,500 square feet space were able to see the property understand that this could be a target opportunity. There was some potential interest in demising the premises, but based on the layout of the space and the access point from the courtyard this would be challenging. This marketing effort led to Tenant's such as Orangetheory driving/touring the site, which provided direct tenant feedback regarding the trade area, the space itself, and the perceived barriers for these types of tenants to lease the property. It also helped to validate which tenant groups are actively expanding in today's retail market. The direct feedback we received on 151 S. California Avenue was that the location is far enough from the core University Avenue downtown to not receive the foot traffic and retail synergy that provides, yet it is close enough to have limited drive by traffic and visibility, sitting off of El Camino Real. 11 was my perspective that a destination oriented use was the only potentially viable retail target for this property. As mentioned with Orangtheory Fitness, while a few of these fitness groups took a long look at the site, the general consensus remained. With the concern about the limited visibility and challenging configuration, none were willing to take the risk on the property. Throughout the process we have worked collaboratively with the properties owners to adjust various marketing elements such as price, and ultimately deciding to focus on a "negotiable" pricing structure which was designed to garner the greatest level of interest. We have ultimately come to the conclusion that a revision to the allowed uses is warranted to include office and medical uses. Although we have never actively targeted that use for the property, we have received multiple office and medical user inquiries for every one retail inquiry. I appreciate your time in reviewing this letter, and would be happy to address any further questions you may have, upon request. Sincerely, CA RE License #01883266 jshumsky@ngkf.com T 408.982.8490 #Tenant Name Use Type Genre Size Closest Location Last Contact Commments 1 Starbird Restaurant Chicken 2,000 Sunnyvale 12/23/2022 Tenant is negotiating a deal within the trade area. 2 Koi Palace Restaurant Dim Sum/Asian Noodle 5,000 Cupertino 12/23/2022 Tenant has recently opened in Cupertino. Looking for 5,000 S.F. sites in higher traffic areas. 3 SMUV Lagree Fitness Fitness Fitness 1,800 San Jose 12/23/2022 Tenant going to proceed with a new location in Fremont. 4 Carbon Health Medical Health/Wellness 2,500-3,500 Sunnyvale 12/23/2022 Active Category. Site does not have enough visibilty for Tenant, with lack of convenient parking 5 Pizza My Heart Restaurant Pizza 2,000 Palo Alto 12/21/2022 Tenant is located on University Avenue. No interest in relocating to California Ave. 6 Huckleberry's Restaurant Breakfast/Lunch 3,500 Livermore 12/20/2022 Tenant likes the location, but was concerned with parking. Has an active offer in Sunnyvale, which would cover the trade area. 7 Peet's Coffee Restaurant Coffee 2,000 Palo Alto 12/13/2022 Located in Town and Country Village. Not interested in this site or size. 8 Phil'z Restaurant Coffee 1,500 Palo Alto 12/13/2022 Site on Alma. Not interested in a space on California Ave at this time. 9 Reveille Restaurant Coffee 1,800 San Francisco 12/13/2022 Submitted to broker. Tenant had been quiet during the pandemic as we had seen with many specialty coffee shops. 10 Verve Restaurant Coffee 2,000 Palo Alto 12/13/2022 Great Third Wave coffee purveyor. Not interested in locating so close to University Ave. 11 Tech CU Financial Financial 2,000 Palo Alto 12/13/2022 Per Broker, Tenant is not currently expanding. 12 US Bank Financial Financial 3,500 Menlo Park 12/13/2022 Tenant had been exploring growth via their Union Bank subsidiary. They have been quiet as of late. 13 Blink Fitness Fitness FItness 15,000 N/A 12/9/2022 Tenant is under the equinox umbrella and needs a larger club type setting. Tenant's minimum requirement is 15k S.F. 14 Hapas Brewing Restaurant Brewery/Brewpub 4,500 San Jose 11/18/2022 Current brewery is large, in San Jose. Expansion would be in taproom format, and would not need this amount of space. 15 Silverlake Ramen Restaurant Ramen 2,500 N/A 11/15/2022 Space is too big 16 Bamboo Asia Restaurant Asian QSR 2,000 San Francisco 11/15/2022 Looking to expand, but space is too large. 17 Sauced BBQ & Spirits Restaurant BBQ 5,000 San Jose 11/15/2022 Space is too small for Tenant. Sister concept to Plucked Chicken & Beer. Located at Santana Row 18 Madison Reed Color Bar Personal Service Beauty 1500 San Francisco 11/15/2022 Submitted sites to broker. Tenant is actively expanding, but looking at shopping centers and highly visible Downtown Sites. Space is too large. 19 Bike Dog Brewing Co Brewery/Tap room Brewery/Taproom 1,800 Sacramento 11/15/2022 No response. 20 Chromatic Coffee Restaurant Coffee 1,500 San Jose 11/15/2022 Current location is a roastery and café in San Jose. Tenant has toyed with expanding to additional cafes, but is not currently active. 21 Temple Coffee Roasters Restaurant Coffee 2,000 Sacramento 11/15/2022 Multi Unit operator. They showed interest in expanding into the Bay area, but then pulled back during the Pandemic 22 Verizon Wireless Retail Communications 2,500-3,000 Palo Alto 11/15/2022 Submitted to broker. 23 F45 Fitness Fitness 2,000 Mountain View 11/15/2022 Expansion is strategic and based on franchisees within the market. 24 Ben's Barketplace Pets Pet Supply 3,000 Campbell 11/15/2022 Tenant signed a lease in Mountain View. No longer holds a need in the market. 25 Sliver Restaurant Pizza 2,000 Berkeley 11/15/2022 Great local restaurant serving vegetarian pizza. 26 Tasty Pizza Restaurant Pizza 2,000 Sunnyvale 11/15/2022 Similar to Curry Pizza House. Strong local operator. Site is too much for them. 27 Hot 8 Yoga Fitness Yoga 3,500 San Jose 11/15/2022 Open in Santana Row. Tenant had been looking up the Peninsula. Space too small/buried. Not enough parking. 28 RNG Lounge Restaurant Chinese 4,000 San Francisco 11/14/2022 Broker toured space, but did not feel it to be a fit for his client 29 Firewings Restaurant Chicken 2,500 San Mateo 10/12/2022 Tenant is looking to grow rapidly. Prefers shopping centers. 30 Xfinity Retail Communications 3,000 Palo Alto 10/12/2022 Existing location on Oregon Expy. No interest in a relocation to our site. 31 AT&T Retail Communications 1,500 Palo Alto 10/12/2022 Tenant had closed many locations during the pandemic. Open to strategic growth, but focused on small format high traffic locations. 32 Bushido Izakaya Restaurant Japanese 3,000 N/A 9/19/2022 Broker toured space, but did not feel it to be a fit for his client 33 Rumble Fish Restaurant Japanese 2,500 Mountain View 9/19/2022 Tenant was looking to relocate their location, and toured space with their broker. They decided not to pursue the space due to visibility as well as space square footage. 34 Yucca de Lac Restaurant Asian Fusion 3,000 Palo Alto 9/19/2022 Broker toured and took video. Following client discussions, they elected not to pursue 35 House of Pancake Restaurant Noodle 3,500 San Francisco 9/19/2022 Broker toured and took video. Following client discussions, they elected not to pursue 36 Aqui Cal Mex Restaurant Cal-Mex 3,500 Cupertino 9/19/2022 Tenant is focused on higher foot traffic/visibility with patio 37 Taishoken Ramen Restaurant Ramen 2,500 N/A 9/19/2022 Space is too big 38 Daeho Galbi Jjim & Beef Soup Restaurant Korean 3,500 N/A 9/19/2022 Submitted. Broker was evaluating for Tenant. Liked the trade area, but concerned with visibility 39 Chubby Cattle by the X Pot/Wagyu House Restaurant Hot Pot 6,000 N/A 9/19/2022 Space is too small 40 All That Shabu Restaurant Shabu Shabu 5,000 N/A 9/19/2022 Space is too small 41 Yuk Dae Jang Restaurant Korean 2,500 N/A 9/19/2022 Space is too big 42 Creator Restaurant Burger 1,500 San Francisco 9/15/2022 Interesting concept. Needs heavy foot traffic and glassline to the street. Robotic Burger Tenant. 43 Poke House Restaurant Poke 1,500 Palo Alto 9/15/2022 Existing location is too close. Space is larger than Tenant needs. 44 Pizza Rev Restaurant Pizza 2,000 Turlock 8/15/2022 Concept has halted growth 45 Pizzeria Delfina Restaurant Pizza 3,000 Palo Alto 8/15/2022 Great concept. Not interested as they are already in Palo Alto on Forest. 46 Rosie's New York Pizza Restaurant Pizza 3,500 San Jose 8/15/2022 Great local operator, not expanding at this time. 47 Subsalicious Restaurant Sandwich 1,500 San Jose 8/12/2022 Not a player. They are focused on low cost expansion by targeting 2nd gen sandwich shops 48 Trailhead Cyclery Bicycles Bike Shop 2,000 Cupertino 7/5/2022 Opened a flagshiop location in Cupertino. Not interested in another large space. May explore hub and spoke strategy go-forward. 49 Gott's Roadside Restaurant Burger 2,500 Palo Alto 6/23/2022 Located at Town & Country Palo Alto. No interest in relocating. 50 Urban Plates Restaurant American 4,000 Dublin 6/15/2022 Focused on Whole Foods/Mall anchored sites. 51 Shake Shack Restaurant Burger 2,000 Stanford 6/15/2022 Location at Stanford Shopping Center. No interest in another location in the trade area. 52 Pelicana Chicken Restaurant Chicken 1,500 Cupertino 6/15/2022 Location open in Cupertino. 53 Barefoot Coffee Restaurant Coffee 1,500 Campbell 6/15/2022 Tenant struggled during the Pandemic with limited wholesale/office roasting contracts. Not expanding 54 The Woodhouse Personal Service Health/Wellness 6,000 Walnut Creek 6/15/2022 Space is too small for Tenant. They also prefer 2nd level space in high income areas due to rent sensitivity. 55 Locanda Restaurant Italian 2,500 Campbell 6/15/2022 Strong East Bay Operator. Just opened space in Campbell. Focused on strategic growth. Will follow up 56 Halal Guys Restaurant Mediterranean 1,800 Redwood City 6/12/2022 Great concept. Space is too big. Passing on site. 57 Doppio Zero Restaurant Pizza 3,500 Mountain View 6/12/2022 Tenant shut down location in Cupertino during the pandemic. Not in expansion mode. 58 Pizza Bocca Lupo Restaurant Pizza 2,000 San Jose 6/12/2022 Located in the San Pedro Square market. Tenant prefers market hall settings. 59 Out of the Barrel Restaurant Brewery/Taproom 1,500 Campbell 6/10/2022 Great operator in Los Gatos/Campbell. Needs a smaller space with large patio 60 Burgers & Brew Restaurant Burger 4,000 Davis 6/10/2022 Not focused on the Bay Area for now. 61 Twisted Dougnuts and Coffee Restaurant Doughnuts 1,800 San Francisco 6/5/2022 No interest in expansion at this time. 62 Zocalo's Restaurant Mexican/Tapas 5,000 Sacramento 6/5/2022 Pushing Tenant to expand into the Bay Area. Not confirmed yet. 63 Curry Pizza House Restaurant Pizza 1,800 Palo Alto 6/5/2022 On University Ave. Great operator. Space too large. Focusing on 2nd generation pizza locations. 64 The Growler Guys Restaurant Brewery/Taproom 3,000 Reno, NV 6/1/2022 Tenant opened a site in San jose, but it subsequently closed. 65 Blue Bottle Restaurant Coffee 1,500 - 2,000 Palo Alto 6/1/2022 Location is too close to this site. Concerned about foot traffic compared to their current site in University Ave. 66 Equator Coffees Restaurant Coffee 1,500 Burlingame 6/1/2022 Site is not a target. Space is too big 67 Huskins Restaurant Coffee 1,500 Santa Ana 6/1/2022 Tenant was exploring an expansion into Santa Clara County. Not pursuing at this time. 68 Ijava Cafe Restaurant Coffee 1,500 Santa Clara 6/1/2022 Not expanding at this time. 69 Cinnaholic Restaurant Dessert 1,200 San Jose 6/1/2022 Tenant is looking to sublease location in DT San Jose. Not expanding with that franchisee. 70 Restore Hyper Wellness Personal Service Health/Wellness 2,500 - 3,000 Texas 6/1/2022 Broker feedback is that Tenant is focused on a PA location, but will need other core demand drivers, such as grocery/fitness. 71 Dish Dash Restaurant Mediterranean 1,800 Sunnyvale 6/1/2022 Great operator. Focusing on their smaller format Dish N Dash concept due to labor shortage. Site too large. 72 Healthy Spot Pets Pet Supply 3,000 San Francisco 6/1/2022 LA Based concept. Focusing on higher visibility/traffic space. 73 Pizza Chicago Restaurant Pizza 2,500 Palo Alto 6/1/2022 Tenant is not interested in relocating from El Camino Real. Space is too big/buried. 74 UPS Store Restaurant Professional Services 1,500 Palo Alto 6/1/2022 Space too large for Tenant. 75 Ramen Hiroshi Restaurant Ramen 2,000 San Ramon 6/1/2022 No interest in expansion at this time. 76 AOPS (High Level Learning)Education Tutoring 6,000 Santa Clara 6/1/2022 Tenant doing a deal in Mountain View. Too close to site. Site was too small for Tenant. 77 Poki Bowl Restaurant Poke 1,500 Sunnyvale 3/12/2022 Tenant paused expansion until office population returns for lunch business. 78 Bluemercury Retail Beauty 1,800 Los Altos 1/15/2022 Not enough co-tenancy for Tenant. Space is too large for Tenant's use. 79 Godfather's Burger Lounge Restaurant Burger 3,500 Belmont 1/15/2022 Not actively expanding. 80 The Everest Momo Restaurant Indian 2,000 Sunnyvale 1/15/2022 Tenant operates out of their food truck. Great food, but no interest in brick & mortar. 81 The Bird Restaurant Chicken 1,500 San Francisco 1/12/2022 Not interested in the space. 82 Veggie Grill Restaurant Plant-Based 2,500 Mountain View 11/18/2021 Space is too large for Tenant's requirement. Focused on high visibility shopping center/mall sites. 83 Brew City Burgers Restaurant Burger 2,500 Campbell 11/15/2021 Great local operator. Needs high visibility. Located in Campbell. 84 Afters Ice Cream Restaurant Dessert 1,200 Oxnard 11/15/2021 Not looking at Northern California at this time. 85 Sidecar Doughnuts Restaurant Doughnuts 1,800 Santa Monica 11/15/2021 Per broker, Tenant's expansion to Norther California was put on hold due to the Pandemic. They have not re-engaged on Northern California opportunities. 86 Ramen Dojo Restaurant Ramen 1,800 San Mateo 11/15/2021 Space is too large 151 S. California Ave., Palo Alto - Tenant Outreach Report (12/27/2022) 87 Pedego Bicycles Bike Shop 1,500 Palo Alto 10/21/2021 Electric Bikes. Already in market. Site is too big to pursue. 88 Hops & Scotch Restaurant Craft Cocktail 2,500 Walnut Creek 10/12/2021 Tenant was exploring a South Bay opportunity, but put that effort on pause. 89 85 C Restaurant Dessert 2,500 - 3,000 Cupertino 10/12/2021 Tenant needs high visibility end cap units. 90 Mendocino Farms Restaurant Sandwich Salad 2500 Palo Alto 10/12/2021 Tenant has a location on Hamilton Ave. No intererst in a space this close. 91 C&C Curry House Restaurant Vietnamese 1,500 Burlingame 10/12/2021 Space is too large. Prefer smaller units with street visibility 92 Chicken Meets Rice Restaurant Vietnamese 1,500 Santa Clara 10/5/2021 Tenant not yet ready to expand. 93 Blue Line Pizza Restaurant Pizza 3,000 Mountain View 9/28/2021 Great operator. Looking for heavier foot traffic. 94 Koja Kitchen Restaurant Asian QSR 2,500 San Mateo 9/21/2021 Tenant paused on expansion during the pandemic. 95 Base Color Bar Personal Service Beauty 1,500 - 2,000 Los Angeles 9/20/2021 Space is too large for Tenant's need. 96 Dry Bar Personal Service Beauty 1,500 Stanford 9/20/2021 Space too large for Tenant. Would require demising. Tenant is also concerned about visibility. Looking for a more dynamic/Grocery anchored property. 97 Fieldwork Brewing Restaurant Brewery/Taproom 2,000 San Mateo 9/20/2021 Tenant has used all of their taproom/tasting room licenses from their existing brewery. Unable to further expand for the time being. Tenant also required ±1,500 S.F. of patio. 98 The Bar Method Fitness FItness 1,800 Palo Alto 9/20/2021 Space is too large for Tenant need. Current location in Town & Country. 99 CrossFIT Fitness FItness 3,500 Palo Alto 9/20/2021 Tenant needs significant outdoor space for their workout programs. The site will not work. ##Arctic Restore Personal Service Health/Wellness 2,500 Alamo 9/20/2021 Tenant showed interest in expanding and then pulled back during the pandemic. ##Float Station Personal Service Health/Wellness 1,800 Campbell 9/20/2021 No feedback. ## Reboot Float & Cryo Spa Personal Service Health/Wellness 1,800 San Francisco 9/20/2021 Tenant not currently growing. ##Senspa Personal Service Health/Wellness 2,000 San Francisco 9/20/2021 Not interested. ##Falafel Drive In Restaurant Mediterranean 1,500 San Jose 9/20/2021 Tenant is unable to support a Palo Alto location. ##Meso Restaurant Mediterranean 6,000 San Jose 9/20/2021 Located at Santana Row. Concept from the owner of Left Bank. Space is too small for Tenant's format. ##C Casa Restaurant Mexican/Tapas 3,000 Emeryville 9/20/2021 Focused on market halls over freestanding restaurant spaces. ## Luna Mexican Kitchen Restaurant Mexican/Tapas 3,000 Campbell 9/20/2021 Two current locations on The Alameda (San Jose) and in the Pruneyard (Campbell). Looking for strategic growth. Need to create a presence, and are concerned with the space locatino in the central courtyard. ##Tac-Oh Restaurant Mexican/Tapas 1,500 San Jose 9/20/2021 Concept not expanding ##Yoga 6 Fitness Yoga 3,000 Mountain View 9/20/2021 Located over at the Village at San Antonio Mountain View. Not interested in expansion in this zone. ##Kebab Shop Restaurant Mediterranean 1,800 Santa Clara 9/18/2021 Tenant had contracted and is exploring strategic expansion. Space is too large ##Tacolicious Restaurant Mexican/Tapas 1,800 N/A 9/17/2021 Palo Alto location permanently closed. Concept shut down at Santana Row. Not expanding. ##Sephora Retail Beauty 5,000 Palo Alto 9/15/2021 Existing Palo Alto location. No interest. ## Temescal Brewing Restaurant Brewery/Taproom 1,500 Oakland 9/15/2021 No Interest. ##Pure Barre Fitness FItness 1,800 Palo Alto 9/15/2021 Space is too large for Tenant need. No interest in relocating down Cal. Ave. ##Dog Haus Restaurant Hot Dog 3,500 San Carlos 9/15/2021 Tenant was starting to look for new opportunities mid-pandemic, but then went back on pause. ##Curry Up Now Restaurant Indian 1,500 - 3,000 Palo Alto 9/15/2021 On Hamilton Ave. Focusing on higher foot traffic locations. Tenant does have a larger format operation including bar at ±3,000 S.F. Passing on site. ##Bevri Restaurant Mediterranean 2,500 - 3,000 Palo Alto 9/15/2021 Tenant looking to relocate, but is not interested in California Ave. Focusing on San Mateo County/San Francisco markets. ##Blaze Pizza Restaurant Pizza 3,500 San Jose 9/15/2021 Tenant has stopped expansion during the pandemic. ## Plucked - Chicken & Beer Restaurant Chicken 2,000 Pleasanton 9/12/2021 Concept paused on expansion during the pandemic and has not restarted. (Sister concept to Sauced BBQ in Santana Row/Livermore) ##Asian Box Restaurant Asian QSR 1,500 Palo Alto 9/7/2021 Located at Town and Country. No interest in relocating. Space too big. ##Summit Bicycles Bicycles Bike Shop 4,000 Palo Alto 9/7/2021 Pushing for Relocation. Tenant not expanding due to inventory shortage, and has no interest in relocating. ## The Bike Connection Bicycles Bike Shop 3,000 Palo Alto 9/7/2021 Located down the street. No interest in relocating. ## True REST Float Spa Personal Service Health/Wellness 1,800 Napa 9/7/2021 Space is too large. ##100% Pure Retail Beauty 2,000 Santa Clara 9/1/2021 Not enough co-tenancy for Tenant. Space is too large for Tenant's use. ##Stacks Restaurant Breakfast 3,000 Menlo Park 9/1/2021 Menlo Park location covers this trade area. ## Bare Bottle Brewing Restaurant Brewery/Taproom 2,000 - 3,500 Santa Clara 9/1/2021 Incredible operator. Needs more synergy/visibility. ##Stein's Restaurant Brewery/Taproom 3,500 Mountain View 9/1/2021 Tenant was closing locations during the pandemic. Not expanding. ##Eureka Restaurant Burger 4,000 Mountain View 9/1/2021 Concept struggled financially during the pandemic, and was focused on finishing out existing spaces under construction and keeping current stores afloat. No interest. ##ROAM Restaurant Burger 2,000 San Mateo 9/1/2021 Likes Palo Alto, but not a fan of California Ave. ## Bird Rock Coffee Roasters Restaurant Coffee 1,800 Del Mar 9/1/2021 Tenant not looking in Northern California at this time. ##Blvd Coffee Restaurant Coffee 1,500 Los Gatos 9/1/2021 Not expanding at this time. ##Rooster & Rice Restaurant Dim Sum/Asian Noodle 1,500 Redwood City 9/1/2021 Tenant was in rapid expansion mode pre-pandemic, but pulled back. Focus has been office/daytime adjcent locations. ##Serious Dumpling Restaurant Dim Sum/Asian Noodle 1,500 San Jose 9/1/2021 Founder of Sino/Straits in Santana Row. Concept was in its infancy when the pandemic hit. Tenant working to open San Jose site before returning to growth opportunities. ##Capital One Financial Financial 6,000 Santa Clara 9/1/2021 Focusing on highly visble/mall locations. Space is also too small (Capital One Café) ##Ramen Nagi Restaurant Ramen 2,000 Palo Alto 9/1/2021 Already in DT Palo Alto. No interest in relocating ##La Dolce Velo Bicycles Bike Shop 2,000 San Jose 8/17/2021 Great local bike shop. Tenant not expanding due to inventory shortage. ##Mo's Restaurant Breakfast/Burgers 3,000 Campbell 8/17/2021 Need a strong restaurant co-tenancy and foot traffic ## Mela Tandoori Kitchen Restaurant Indian 2,000 San Francisco 8/17/2021 Not expanding at this time. ##Tomatina Restaurant Italian 3,500 Santa Clara 8/17/2021 Concept expansion is on hold. ##Pho Tastic Restaurant Vietnamese 2,000 San Jose 8/13/2021 Tenant not expanding at this time ## Saigon Alley Kitchen & Bar Restaurant Vietnamese 2,500 Sacramento 8/13/2021 No current interest in a Palo Alto location ##Ramen Parlor Restaurant Ramen 2,000 San Mateo 7/13/2021 Tenant is not look to expand at this time. ##Lee Sandwiches Restaurant Vietnamese 1,800 Sunnyvale 7/13/2021 Space too large. Tenant unable to pursue. ##Umami Burger Restaurant Burger 2,000 N/A 6/12/2021 Tenant not expanding. Location in DT Palo Alto (University Ave) closed. ##Poke Bar Restaurant Poke 1,500 Mountain View 4/18/2021 Tenant paused expansion until office population returns for lunch business. Ay PALO ALTO CENTRAL EAST COMMERCIAL HOA BOARD Christison Company - Community Management 7901 Stoneridge Drive, Ste 222 Pleasanton, CA 94588 925-371-5700 www.christisoncompany.com September 22, 2022 To: City of Palo Alto Planning Dept. On Behalf of: Robert and Peggy Lee P.O. Box 3183 Los Gatos, CA 94024 Owner of Commercial Unit: 151 California Ave., Unit E101, Palo Alto, CA 94306 Dear City of Palo Alto Planning Managers: The Board of the Palo Alto Central East Commercial HOA has been asked by the owners of Unit E101, Robert and Peggy Lee, to write a letter to support their petition to allow their unit to be converted into medical office use. They have been renting to restaurant tenants for many years and the last tenant operated the Peking Duck restaurant. The Board supports this conversion to an office type use as it is believed that it will be an improvement to the HOA community. If you have any questions or concerns, please contact our property management company listed above. Sincerely, Rosemary Selby President, Palo Alto Central East Commercial HOA Board AGREEMENT In consideration for the promises, warranties, and/or covenants set forth in this Agreement, the Parties agree as follows: 1. Recitals. The Parties acknowledge the truth of the above -stated Recitals and incorporate them into this Agreement by this reference. 2. Settlement Terms. In full and complete satisfaction and settlement of the Dispute, and subject to the Parties' mutual obligations under this Agreement, the Parties agree to the following terms: 2.1. Lees' Pa) ment of Assessments. The Lees hereby agree to pay Fourteen Thousand Five Hundred Six Dollars and Seventy -Four Cents ($14,506.74) to Commercial within thirty (30) calendar days of the receipt of a fully executed copy of this Agreement, as full and final satisfaction of the Assessments. 2.1 (a) The Lees' payment to Commercial shall be made by check made payable to Palo Alto Central East Commercial Association and sent by certified mail or overnight mail to Commercial at PACE — Commercial, C/O Christison Company, 7901 Stoneridge Drive, Suite 222, Pleasanton, CA 94588. 2.2 Commercial's Settlement Payment to Lees. Commercial, through its insurance carrier, hereby agrees to pay the Lees a settlement payment of five thousand dollars ($5,000), within thirty (30) calendar days of the Commercial's counsels' receipt of a fully executed copy of this Agreement. 2.2(a) Commercial's payment will be paid to the Lees by check made payable to "Peggy Lee "and sent to 5736 N. Gladys Ave, San Gabriel, CA 91775. Lees' counsel shall provide a completed W-9 form to process the payment of the Settlement Sum. 2.3 Grease Trap Remediation. Within thirty (30) business days of receipt of this fully executed Agreement, the Lees hereby agree that they will provide Commercial with a copy of a written bid containing a full scope of work from a licensed and bonded remediation company to fully remediate the crawlspace under the Property and to pay for the cost of remediating the same. The Lees further agree to provide seventy — two (72) hours written notice to Commercial of the date remediation work is to begin and agree that Commercial is allowed to observe and inspect the work performed. Commercial hereby agrees to not unreasonably withhold their approval of the Lees' bid for remediation services, but reserves the right to reject the bid. If Commercial rejects the bid, Commercial and the Lees will obtain a bid from a third remediation company to perform the work of remediating the crawlspace. If the Lees fail to obtain a bid within Page 3 of 9 thirty (30) business days, Commercial will arrange to have Restoration Management Company remediate the crawl space, pursuant to the bid obtained by Commercial for the same, and the Lees hereby agree to pay Commercial for the cost of Restoration Management's remediation within ten (10) business days of receipt of notice of completion of remediation. 2.4 Grease Trap Inspection. The Lees hereby agree that they shall provide City Inspector with a written documentation as required by law of cleaning and inspection of all grease traps within the Property on a quarterly basis. Said proof and reports shall be provided Commercial twice annually. With the first proof of reports for the first two quarters due on or before June 30, and proof of reports for the third and fourth quarters due on or before December 31, of each year. The Lees hereby understand and agree that failure to timely provide proof of cleaning and inspection of grease traps will result in fines assessed on those dates following per Commercial's Fine Policy for Major Infractions and Violations. The Lees further agree that the Grease Trap inspections shall be kept at the restaurant and may be inspected by Commercial upon seventy two (72) hours prior notice. If and when the Property is no longer used as a restaurant no further grease trap inspection will be required. 2.5 Repair of Damaged Floor Supports. The Lees hereby agree that the wooden structural support beams located under the area of the Property that was previously occupied by an industrial freezer have not been repaired or replaced since the August 20, 2020, inspection by the City of Palo Alto Planning & Development Services' inspector Kyle Shea. The Lees hereby further agree that within thirty (30) calendar days of the execution of this Agreement, the Lees will retain a licensed contractor. The Lees further agree that within thirty (30) days of remediation of the Property as detailed in Paragraph 2.3 above, said contractor will apply for a permit from the City of Palo Alto Planning & Development Services, or any other governmental entity then responsible for construction related permitting, for work of repair and/or replacement of structural support beams located under the area of the Property where the industrial freezer was previously located. The Lees further agree to provide seventy-two (72) hours written notice to Commercial of the date of commencement of any construction, repair, replacement work that is to be performed pursuant to this Paragraph. The Lees further agree that Commercial will be allowed to observe and inspect any work performed pursuant to this Paragraph. The Lees further agree that within one -hundred eighty days (180) days from the date of issues of the permit that the construction and repair work will be completed. The Lees further understand and agree that the Lees and Lees alone will be responsible for all costs incurred related to permitting, inspections, construction, repair, and/or replacement of said structural support beams. In the event that the City of Palo Alto Planning & Development Services' inspector determines that no permit is required, the Lees hereby agree that they will obtain written confirmation from the City of Palo Alto Planning & Development Services that no permit is needed and no further action is necessary or required. 2.5(a) Summary of Timing: Page 4 of 9 Zoning Districts near 151 California Avenue Parcel Rep ort for APN: 124-37-043 Can not assess due to Net Lot Size: parcel type Zone Dist: RM-40; CC (2)(P); CC (2} Comp Plan Des: MF;CC Flood Zone: X LOMk no FEMA Map Panel: 0017H HMP Request: no Parking District, none SCCA" YR Built: 1982 SCCA' Eff YR Built: 1982 Historic Status: none Traffic Imp. Dist: non e Easeme nts: no Near Cree k: no Substandard: Cannot assess for this zon e. Flag Lot: no ADU/JADU: See Ord # 5412 Ma x Floor Area. Cannot assess for this zone. Max Lot Coverage Canno t assess fo r this zone. Max Height to Ridge: Canno t a ssess fo r this z on e. Special Setbacks: no ne Minimum Setbacks: Front: Cann ot assess fo r this zo ne. R ear Canno t assess fo r this zo ne. Interio r Side(s): Canno t a ssess fo r this zo ne . Street Side: Cannot assess for this zone. Comments; n/a * Source of year built dale is the Santa Ciara CountyA sse ssor CI lckhsrs for data details or navigate to itilij. If ^_i.clh'�rr�! Io _/y� 1'eofpiN cur t1r`i! =i_rarrlrts. tap Creek or Waterway Sidewalks: E seme rtts. Und tr;ying Lot Lines: Tres: rre, 21118-04.2808:53:51 arcalReport°nfira 0 7 69 4:1n •4.4 �p Lsyyy il*rt 4.0 Tit •I� !.1 This map is a pr od uct of the City of Palo Alto GIS iltis docenntio agr®phi c repres en'a9 ononlY lbeslavaiIables ources, The City WNW P o as s uns no rosponsibility for any errors. e198910 7016 City of Palo aro 50' LU1'4LJUrl.LI' l UI'i fL - IY PALO ALTO CENTRAL EAST CONOOMINIUN UNITS — TRACT NO . 7237 CITY OF PALO ALTO CALIFORNIA itMH 1 NICOFIPa ATECI NOTES; I. DIMENSIONEDOLI E 0 THE COHHERCIAL UNI, AS PARALLEL WITH . PERPENDICULAR 10 , OR ARE DEFLECTED 45. OR 135' FROM THE HEARING N. 58'29'43' W., UNLESS NOTED OTHERWISE . ti h ▪ H56I39163'11" $4.93. H56'29.'43'1 58 .69' 56.23' o 1��// .1 /' TJ 1 . sh 2 �p . '' ,'1', / TC. AREA • 3201 sq. f! COMMERCIAL E 101 N56.29'43'W 43.17' 0 n'• 1 4• o. 0 f HJg y �- iB.95' 1 V *.?I' x56.29'13'M 13.77 ' 3? 03` 5 .19r!, 2 .51' 2A FFU56'29' 43•x 23.56' 25.f6' tot 4 1 1 1 BLDG. E 9127122, 6:23 PM Gmail - John Wallace 2004 Summary Study on Bldg E Gmail A-1 John Wallace 2004 Summary Study on Bldg E 1 message peggy c lee `peggylee1628@gmail.com> peggy c lee <peggyleo1628@gmail.com> Tue, Sep 27 2022 at 2:45 PM To: peggy c lee <Peggylee1628@gmail.com> John Wallace and (Stichen) 2004 Summary Study on 151 California Ave Building E, Palo Alto Basically the study was focused on Building E which is the 3200 square -foot building that is interior to the courtyard. It stated that since the 1980s that space has either been a restaurant or vacant. In that time it has been five (5) different restaurants and hard to survive and be successful. The reason the Wallace Study concludes that retail is not appropriate for the building is because it lacks the four basic elements of successful retail. That is visibility, vehicle traffic, pedestrian traffic and a synergistic relationship with other types of retail or personal service uses. It notes that the visibility is nonexistent from California Avenue into the courtyard. The vehicle traffic is much less in that location than it is on the rest of California Avenue. It is located towards the edge of that retail district. The pedestrian traffic is poor again because people don't walk into the courtyard area. It appears that it is private property and so there is nothing to entice people into that area. Therefore, it lacks a synergistic relationship with the rest of California Avenue. So because it lacks those four elements the study really concluded that the most appropriate use would be for office. They also noted that there are some condominium regulations which require the business to close at 10:00 PM makes it difficult for a restaurant in particular to operate but other types of retail use as well. So they do conclude that office is a more appropriate use for Building E. They believe that those same elements are lacking in at least portions of the rest of the business in that project. So that is what led to the current recommendation. One of the findings and conclusions of the retail report was that the design the impediments to retail use can't be solved with design changes. The design challenges, the design flaws are so great in terms of a retail use that they can't be fixed. There isn't a way to make that interior space more visible from the street that the design flaws are not fixable. John J. Wallace Real Estate Expert Wallace & Steichen, Inc.San Francisco State University Palo Alto, California, United States 39 followers 39 connections Join to connect About John J. Wallace CRE, FRICS is an expert in real estate. During his 40+ years working in the real estate industry he has acquired extensive expertise in real estate economics, appraisal, brokerage, management, acquisition, finance, and planning. He has been retained as a real estate expert witness on more than 50 occasions. His experience has resulted in a thorough understanding of most facets of the real estate industry, with special expertise in retail real estate. He has held a California Real Estate Brokers license since 1975 and has been an appraiser since 1972 and a licensed California Certified General Appraiser since the inception of appraisal licensing in 1985. He is a member of the Counselors of Real Estate (CRE) and is Fellow of the Royal Institute of Chartered Surveyors (FRICS). https://mail,google.comlmaillu101?ik=22dddbed3d&view=pt&search=all&permthid=thread-a%3Ar-7220796811309061638&simpl=msg-a%3Ar30279301... 1/2 Hi Judy — Thanks for sending me your thoughts regarding the Douglas/Moore request to change the commercial owners' zoning designation. 1 agree wholeheartedly that the commercial units should maintain the (P) designation. However, .they should have the option to convert to office space. Over the five years when I was President of the Homeowners Association and served as President of the Plaza Committee, I heard numerous residents wish these commercial properties were office rather than retai .s ac a e. spoke about itratiring oar ee ings an once our Association wrote a recommendationto the Planning Commission supporting Laura Rasmussen's request to convert her restaurant property. I know I'd be very happy to see these commercial owners have the flexibility to convert from retail to office space. If the whole first floor was converted to office space, the property would be more aestl i.i.Lnow. For example, it appears that Douglas and Miiore may now be out of compliance with the ®.designation —Nina rents office space for her real estate brokerage and they rent out office space to others. However, I don't view their office properties as eyesores or as any other reason for concern to homeowners. To the contrary, their office space looks much more professional than a couple of the retail activities with tacky advertisements aimed at pedestrians. And, Nina'.s brokerage is a service to homeowners who want to sell their properties. In general, I don't think many of the first floor commercial owners would convert their properties to office space anyway. Even if they did, there are plenty of other retail amenities on .California Avenue and homeowners wouldn't miss much if a handful of owners converted to office space. Also, I think .of rye space would -be -more complementar\ to homeowners interests and lifestyles: Residents and offices work during the day and at night, 'when people are home, the offices would be emp;v. 1f d ie:more quiet and there rni ht befewer conflicts between commercial owners and residents. The Residential and Commercial Associations might realize.a savings in:their Liability Policy if some ,businesse --- converted., I'd think that offices would beless risky than'restaurarn and a tanning salon, which are potential fire and health hazards. There'd likely be less foot traffic from people walking in and out of the courtyard area. Also, if one or both of the restaurants converte d, there'dcertainly be far less garbage, noise and odors. Probably, the Association would spend a lot less money for garbage pick-ups. And, there would be fewer concerns expressed to the State Alcohol Beverage Control Board about possible violations of one of the restaurants' Conditional Use Permit. Members of the Planning Commission might feel differently if they lived at Palo Alto Central. Chances are they live in residential neighborhoods, such as Midtown, and don't live in a mixed use area. As multi -use properties become more commonplace in the California Avenue neighborhood, the Planning Commission needs to understand the real -world issues faced by residents in our community. Anyway, thanks again for keeping me in the loop. I left a phone message with Chris Riordan telling him my opinions. Warren Warren K. Beer Manager, Computer Operations U.S. Environmental Protection Agency 13,15 - Lo TO: PLANNING DIVISION STAFF REPORT PLANNING & TRANSPORTATION COMMISSION FROM: Christopher Riordan, AICP DEPARTMENT: Planner Planning and Community Environment AGENDA DATE: April 14, 2004 SUBJECT: 240L 2409. 2417 Park Blvd and 101 California Avenue #0101: Application by Richard & Sharon Reyes, Eldad & Charlotte Matityahu, Donald Douglas & Nina Moore, and Nortman Weintraub & Deborah London on behalf of Palo Alto Central for a Zoning Ma_p amendment from CC(2)(R)(P), Community Commercial Combining/Retail Shopping Combining/Pedestrian Shopping Combining classification to CC(2) Community Commercial Combining Classification. Environmental Assessment: A Negative Declaration is proposed in accordance with CEQA guidelines. File: Numbers: 02-ZC-6, 03-EIA-13. RECOMMENDATION Staff recommends that the Planning and Transportation Commission (Commission) recommend proval of an ordinance modifying PAMC Section 18.43.030 and rezoning portions of Palo Alto Central to allow office uses within the rear 50% of Buildings C & D and all of building E (Attachment A). BACKGROUND The Commission previously reviewed this project to rezone properties at 2401, 2409, 2417 Park Boulevard and jp1 California Avenue #D101 from CC(2)(R)(P) to CC(2) at their meeting of October 8, 2003 and again on February 11, 2004. At the October 8, 2003 meeting, the Commission reviewed three possible project options as recommended by Staff. The Commission reviewed the three options and requested additional information be provided for further consideration of the third option. City of Palo Alto Page 1 At the February 11, 2004, the Commission reviewed and recommended approval, on a 5-0-0-11 vote, of the following Staff recommendation (Attachment D): • Retain the (R)(P) Combining District for all of Palo Alto Central to ensure the front 50% of each building with street frontage on Park Boulevard and California Avenue (Buildings C&D) is maintained for uses conforming to the (R)(P) Combining district, such as personal service, retail, and restaurants. Any existing office in the front 50% of a street facing space would become legal nonconforming as of the effective date of City Council adoption of such code amendment. If a legal nonconforming use were to be discontinued for at least twelve consecutive months, it would be considered abandoned and could only be replaced by a conforming use. • Office use would be allowed as a permtted use within the rear 50% of each Building C&D, and within all. of Building E. PAMC Section 18.46.040 (Retail Shopping ._ Combining District (R) Regulations) would be modified to allow office as a permitted use DISCUSSION The Commission's action was consistent with, Staff's recommendation to modify. PA MC Section 18 46.040 (Retail Shopping Combining District (R) Regulations) to allow office as a permitted use. During preparation of the Ordinance, the City Attorneys office suggested an alternative that would accomplish the same objective. Instead of modifying the Retail Shopping Combining District (R) Regulations as discussed above, the Community Commercial Zone (PAMC Section 18.43,030) could be changed to include offices at Palo Alto Central as a permitted use within the rear 50% of each Building C&D and within all of Building E. Staffagrees th the changes as recommended by the e Attorneys Off ce and is of the opinion that it is consistent with the Commission's recommendations. A draft ordinance to modify PAMC Section 18.43.030 and amend the zoning map to delete the (R) Combining District on portions of Palo Alto Central to allow office uses within the rear 50% of Buildings C & D and all of building E is attached to this report (Attachment A). ATTACHMENTS/EXHIBITS: Attachment A: Draft Ordinance with Zoning Map revisions modifying Section 18.43.030 of the PAMC and Rezoning Portions of the property at 2401, 2409, 2417 Park Blvd and 101 California Avenue #D101 to allow office usesin parts of the ground floor of three buildings on that site. Attachment 13: Negative Declaration and Environmental Impact Assessment Attachment C: PAMC 18.43 (Excerpt, Commission Only) City of Polo Alto Page 2 A-9 City of Palo Alto Department of Planning and Community Environment California Environmental Quality Act MITIGATED NEGATIVE DECLARATION I. DESCRIPTION OF PROJECT Date: April 6, 2004 Application Nos.: 03-ZC-06, 03-EIA-13 Address of Project: 2401, 2409, 2417 Park Blvd. & 101 California Avenue #D101 Assessor's Parcel Number: 124-37-22,25 28,29 Applicant: Property Owner: Richard & Sharon Reyes, Eldad & Charlotte Matityahu, Donald Douglas & Nina Moore, and Nortman Weintraub & Deborah London Palo Alto Central c/o Nina Moore 101 California Avenue Palo Alto, CA 94306 Project Description and Location: The application for zone change applies to: roperty constructed in 1983 as a portion of the mixed -use commercial/residential) project known as Palo Alto Central, in the California Avenue business district. The CC(2)(R)(P) designation was applied to this property in 1984 as a result of the California Avenue Study. Three of the units, 2401, 2409, and 2417 front on Park Boulevard are occupied by a nail salon, title company, and tanning salon, respectively, and 101 California Avenue #D101 is occupied by both a real estate office and a restaurant. The existing business offices are not perzniti sin the ground floor under current zoning. All of the units are relatively isolated from the main retail -shopping district California Avenue making it difficult for retail businesses to succeed in these locations due to lack of pedestrian traffic. The commercial condominium owners have experienced hardship due to difficulty of attracting retail tenants and are prohibited from renting their spaces to office uses due to the existing zoning. The project would modify PAMC Section 18.43 (Community Commercial Zone District) to include offices at Palo Alto Central as a permitted use within the rear 50% of each Building C&D and withinalLof Building E VCC•TERRAIShared1PLAMPLADDACurrem PlanninglEIAlNeg.Dec52401, 2409 Park Bivd(mod'sf. ed):doc DETERMINATION In accordance with the City of Palo Alto's procedures for compliance with the California Environmental Quality Act (CEQA), the City has conducted an Initial Study to determine whether the proposed project located at 2401, 2409, 2417 Park Blvd. & 101 California Avenue #D101 may have 'a significant effect on the environment. On the basis of that study, the City makes the following determination: X The proposed project COULD NOT have a siinifcant effect on the environment, and a NEGATIVE DECLARATION is hereby adopted Although the project, as proposed, could have a significant effect on the environment, there will not be a significant effect on the environment in this case because mitigation measures have been added to the project and, therefore, a MITIGATED NEGATIVE DECLARATION is hereby adopted. The attached initial study incorporates all relevant information regarding the potential environmental effects of the project and confirms the determinafion that an Ell . is not required for the project. Project Planner Current Planning Planning Manager 0CC•TERRAl5hared1PLAMPLADW4CurrpR Pianning\E1A9eg.De62401, 2409 Park BSvd( dified).d0c Date Dalt Attachment D: Minutes of the February 11, 2004 Planning Commission Meeting (Commission Only) Attachment E: Letters from Applicants (Commission Only) Attachment F: Email from Judy Glaes, received October 10, 2003 (Commission Only) COURTESY COPIES: Richard & Sharon Reyes Eldad & Charlotte Matityahu Donald Douglas & Nina Moore Norman Weintraub & Deborah London Laura Rasmussen, Silk Road Cafe Owner Montoya Jewelers' Chuck Marsh Joy Ogawa Herb Borock Prepared by: Christopher A. Riordan, AICP, Planner Reviewed by: . mv French, AICP, Manager of Current Planning Department/Division Head Approval: Lisa Grote, Chief Planning Official City of Palo Alto Page 3 ORDINANCE NO. 4848 ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO MODIFYING SECTION 18.43.030 OF THE PALO ALTO MUNICIPAL CODE AND REZONING PORTIONS OF THE PROPERTY AT 2401, 2409, 2417 PARK BOULEVARD AND 101 CALIFORNIA AVENUE #D101 TO ALLOW OFFICE USES IN PARTS OF THE GROUND FLOOR OF THREE BUILDINGS ON THAT SITE The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares that the amendments to section 18.08.040 (the zoning map) and chapter 18.43 (Community Commercial District (CC) Regulations) of Title 18 [Zoning] of the Palo Alto Municipal Code are in accord with the purposes of that title and the Palo Alto Comprehensive Plan, in that retail uses are preserved in the areas of Palo Alto Central facing the pedestrian ways of California Avenue and Park Boulevard, and office uses are permitted facing the interior courtyard, where they will contribute to the vitality of the California Avenue commercial area without detracting from the retail- and pedestrian -oriented character of the area. SECTION 2. Subsection (m) of section 18.43.030 of Chapter 18.43 (Community Commercial District (CC) Regulations) of Title 18 [Zoning] of the Palo Alto Municipal Code hereby reads as follows: (m) Medical, professional, and general business offices located on the ground floor of a building, as limited by Section 18.45.070(f), which (1) have been continuously in existence in that space since March 19, 2001, and, as of such date, were neither non -conforming nor in the process of being amortized pursuant to Chapter 18.95 of this code; or (2) occupy a space that was not occupied by housing, retail services, eating and drinking services, personal services, or automotive services on March 19, 2001 or thereafter; or (3) occupy a space that was vacant on March 19, 2001; or (4) are located in new or remodeled ground floor areas built on or after March 19, 2001 if the ground floor area devoted to housing, retail services, eating and drinking services, personal services, and automobile 012104jea 6030031 1 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 ground floor medical, professional and general business offices;. or (6) are located anywhere in Building E or in the rear 50% of Building C or D of the property at the southeast .eaarner•of the intersection of Park Boulevard and California Avenue, as shown on sheet A2 of the plans titled "101 California Avenue Townhouse/Commercial/Off ice, Palo Alto, CA" by Crosby, 'Thornton, Marshall Associates, Architects, dated June 14, 1982, revised November 23, 1982, and on file with the Planning Department. As used in this subsection (m)(6), "rear 50%" means a maximum of 50% of the square footage of the building, none of which faces Park Boulevard or California Avenue.; SECTION 3. Section 18.08.040 of the Palo Alto Municipal Code, the "Zoning Map," is hereby amended by changing the zoning of portions of a certain property known as 2401, 2409, 2417 Park Boulevard .and 101 California Avenue #D101 (the "subject property") from "CC(2)(R)(P). Community Commercial District With Combining District (2) ;. Retail, and Pedestrian Overlays" to "CC(2)(P) Community Commercial District with Combining District (2) and Pedestrian Overlay." The portions of the property to be rezoned are the rear 50% of the buildings labeled "Building C and Building D" and all of the building labeled "Building E," as those three buildings are shown on sheet A2 of the plans titled "101 California Avenue Townhouse/Commercial/Office, Palo Alto, CA" by Crosby, Thornton, Marshall Associates, Architects, dated June 14, 1982, revised November 23, 1982, and on file with the Planning Department. The subject property, as rezoned by this ordinance, is shown on the map labeled Exhibit "A," attached hereto and incorporated herein by reference. SECTION 4. The City Council finds that the changes effected by this ordinance are exempt from the provisions of the California Environmental Quality Act (CEQA), per section 15061 of CEQA Guidelines, because it can be seen with certainty that there is no possibility that the project will have a significant effect on the environment, // // // // 012104jea 6030031 2 SECTION 5. This: ordinance shall be effective 30 days after the date of its adoption. INTRODUCED: September 20, 2004 PASSED: October 4, 2004 AYES: BEECHAM, BURCH, CORDELL, KLEINBERG, MORTON, MOSSAR NOES: FREEMAN, KISHIMOTO ABSENT: ABSTENTIONS: OJAKIAN NOT PARTICIPATING: e i rs2a. City Ati!torney ;11e9c642 1-6f1117466 Let. Mayor yDi-fit-- of Planning & Community Env'ronment Director of - 'nistrative Services 0121Q4jea 6030031 3 EXHIBIT "A" For location of zone boundary see Ord. The City cF Palo Alto PF i Date: Project Address: Application Files: Proposal: 2401 Park Blvd. April 1, 200,4 2401 Park Bivd. 02-ZC-6 and 03-EiA-13 Zone change from CC(2)(R)(P) to CC(2)(R) for a portion ofan ex- isting mixed use site This map is a product of the City of Palo Alto GIS 0' 100' me ab.; rlohl 115. .nu#v].til Thlc document is a graphic reprgsenlallon only of boar aveilabie sources, The Clly nI Palo Alto ascumes no msponsirlfy Ior any errors. 151 S. California Avenue; Application #23PLN-00363 May 3, 2023 Peggy C. Lee PO Box 3183 Los Altos, CA 94024 Subject: 151 S. California Avenue Retail Preservation Waiver Determination 23PLN-00363 Dear Ms. Lee, 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 (medical office use) for a 3,500 commercial space located within the interior courtyard (Building E) of Palo Alto Central at 151 S. California Avenue has been tentatively approved with conditions. The conditions of approval are provided in Attachment A. This determination will be placed on the City Council's May 15, 2023 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 the site’s 10-year history, documentation of the applicant’s efforts to lease the tenant space, information regarding the former tenant and eviction notice information, the surrounding land uses, previous actions and determinations related to this tenant space in accordance with Ordinance 4848, the visibility of the space from the street, and a support letter from the properties’ Home Owners Association. The proposed Medical Office use is consistent with the allowed uses within the Community Commercial Comprehensive Plan land use designation and is a permitted use within the CC[2] Zone District. The proposed use, as conditioned, would encourage active pedestrian-oriented activity and connections that are condusive to adjacent 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 findings 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. 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 medical office 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 proposed as part of the proposed project. Any future physical modifications to the site would be required to comply with the other applicable provisions of the DocuSign Envelope ID: 73E81070-1B3C-4773-BD8D-17149885E7CA 151 S. California Avenue; Application #23PLN-00363 Municipal Code, be consistent with the City's Comprehensive Plan, and will likely require permits from the City’s Planning and/or Building Division. If you have any questions regarding this determination, please do not hesitate to contact me or your Project Planner, Claire Raybould at claire.raybould@cityofpaloalto.org or (650) 329-2116. Sincerely, Jonathan Lait Director of Planning & Development Services Attachment A: Conditions of Approval DocuSign Envelope ID: 73E81070-1B3C-4773-BD8D-17149885E7CA 151 S. California Avenue; Application #23PLN-00363 Attachment A: Conditions of Approval (151 S. California; 23PLN-00363) 1. CONFORMANCE WITH APPROVED USE. This approval allows for a waiver from the retail preservation ordinance for the proposed medical office use within a 3,500 sf existing tenant space, which has been determined to meet the City’s criteria as an approved Alternative Active Viable Use and is an otherwise permitted use within the CC(2) zone district for spaces less than 5,000 sf and that do not front California Avenue. Any future use of this tenant space for a land use that does not meet the definition of retail, retail-like, or medical office use, as defined in Chapter 18.04 of the municipal code and that meets the conditions of approval of this waiver would require a subsequent retail preservation waiver. 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. MEDICAL OFFICE USE REQUIREMENTS. To ensure that site modifications and use for any future medical office tenants comply with the requirements in PAMC Section 18.40.180(c)(1)(B) to encourage pedestrian-oriented activity, any medical office use within this space shall include a storefront/entry lobby design that is a minimum 500 sf and that is consistent with a retail environment, such as a reception desk or retail displays and display window. Additionally, medical office uses operating between the hours of of 10:00 p.m. and 6:00 a.m. are not permitted. 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: 73E81070-1B3C-4773-BD8D-17149885E7CA Certificate Of Completion Envelope Id: 73E810701B3C4773BD8D17149885E7CA Status: Completed Subject: Complete with DocuSign: 2023-0503 Retail waiver Tentative Approval Letter 151 S California Fina... Source Envelope: Document Pages: 3 Signatures: 1 Envelope Originator: Certificate Pages: 2 Initials: 0 Jodie Gerhardt AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Jodie.Gerhardt@CityofPaloAlto.org IP Address: 199.33.32.254 Record Tracking Status: Original 5/3/2023 5:31:18 PM Holder: Jodie Gerhardt Jodie.Gerhardt@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Jodie Gerhardt jodie.gerhardt@cityofpaloalto.org Manager Planning COPA Security Level: Email, Account Authentication (None) Completed Using IP Address: 199.33.32.254 Sent: 5/3/2023 5:34:04 PM Viewed: 5/3/2023 5:34:26 PM Signed: 5/3/2023 5:34:30 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Jonathan Lait jonathan.lait@cityofpaloalto.org Interim Director Planning and Community Environment City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Uploaded Signature Image Using IP Address: 199.33.32.254 Signed using mobile Sent: 5/3/2023 5:34:31 PM Viewed: 5/4/2023 4:39:16 PM Signed: 5/4/2023 4:39:51 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Claire Raybould Claire.Raybould@CityofPaloAlto.org Senior Planner Security Level: Email, Account Authentication (None) Sent: 5/4/2023 4:39:52 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 5/3/2023 5:34:05 PM Certified Delivered Security Checked 5/4/2023 4:39:16 PM Signing Complete Security Checked 5/4/2023 4:39:51 PM Completed Security Checked 5/4/2023 4:39:52 PM Payment Events Status Timestamps