HomeMy WebLinkAboutStaff Report 2410-3587CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, November 18, 2024
Council Chambers & Hybrid
5:30 PM
Agenda Item
10.FIRST READING: Adoption of an Interim Ordinance Amending Chapters 18.04, 18.16,
18.30(A), and 18.30(C) of the Palo Alto Municipal Code to Implement High Priority Retail
Revitalization Measures and Direction; Adoption of an Identical Emergency Ordinance;
and Direction to Staff to Advance Other Initiatives Related to the City Council's Economic
Development and Transition Policy. CEQA Status: Exempt Pursuant to CEQA Guidelines
Section 15061(b)(3). Staff Presentation
City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: November 18, 2024
Report #:2410-3587
TITLE
FIRST READING: Adoption of an Interim Ordinance Amending Chapters 18.04, 18.16, 18.30(A),
and 18.30(C) of the Palo Alto Municipal Code to Implement High Priority Retail Revitalization
Measures and Direction; Adoption of an Identical Emergency Ordinance; and Direction to Staff
to Advance Other Initiatives Related to the City Council's Economic Development and Transition
Policy. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3).
RECOMMENDATION
The Retail Ad Hoc Committee, Planning and Transportation Commission, and Staff recommends
the City Council:
1. Adopt the attached emergency ordinance (Attachment A) and interim ordinance
(Attachment B);
2. Direct staff to work with the Planning and Transportation Commission on the following:
a. continued refinement of the definition of retail-like land uses to establish a
performance-based criteria that promotes pedestrian activity in commercial
areas
b. expansion of the permitted uses in the ground floor (GF) and retail (R) combining
districts and standards to allow non-retail like uses in certain circumstances;
c. review and recommend changes to the geographic extent or applicability of the
City’s retail preservation ordinance; and,
3. Direct staff to include a comprehensive update to the City’s zoning code as an objective
for Council consideration in 2025 work plan.
EXECUTIVE SUMMARY
The report and accompanying urgency ordinance propose changes to streamline zoning
regulations, increase flexibility in permitted land uses, and update parking policies to meet
current needs.
Key recommendations include modifying the formula retail definition, increasing flexibility for
“retail-like” uses, introducing practical waivers, and expanding permissible uses for ground-
floor spaces. Additional provisions address the inclusion of pet grooming, financial institutions,
and automobile showrooms as potential retail-like uses. Staff has also incorporated an
ordinance to allow for practical waivers, replacing the high threshold required for waivers with
a “practical difficulty” standard to facilitate space adaptations. This report seeks Council’s
direction on these recommendations to enhance the city’s commercial district vitality and
better meet evolving market demands.
These actions transmit the Planning and Transportation Commission and Retail Ad Hoc
recommendation for specific zoning code changes to advance the objectives of the City’s
Economic Development and Transition priority. The recommendations in this report are
informed by prior work prepared by the City related to its retail resiliency interests and
supplemented with professional services provided by Michael Baker International.
The Planning and Transportation Commission held multiple meetings from October 2023
through August 2024, examining various aspects of the Michael Baker International report.
These discussions led to prioritized recommendations for zoning code adjustments, which were
subsequently reviewed by the City Council’s Retail Ad Hoc Committee in September 2024.
BACKGROUND
Staff have been working with the Planning and Transportation Commission and professional
service contractor, Michael Baker International, to respond to the City Council’s Economic
Development and Transition priority. Specifically, implementation of Objective ED&T 12 to
conduct stakeholder outreach and present recommendations to Council for a citywide retail
zoning strategy and receive direction for ordinance implementation.
This work ties into earlier efforts, including the City Council’s reinstated economic development
position as part of the fiscal year 2023 budget and review of a comprehensive economic
development strategy report prepared by Streetsense and presented to the Council in August
2023. Michael Baker International expanded upon the Streetsense report conducting additional
local outreach, peer city reviews and policy review to identify strategies that support a more
robust retail environment at the land use regulatory level.
The Planning and Transportation Commission reviewed various components of the Michael
Baker International report at the following meetings and additionally formed an ad hoc group
to examine the strategies more deeply on four other occasions:
•October 25, 2023: Introduction/check in including reviewing the scope of work
•January 31, 2024: Peer cities comparison and stakeholder interviews results
•February 28, 2024: The PTC met to create a PTC Ad Hoc
•March 13, 2024: Presentation regarding strategies and policy recommendations
•March 27, 2024: Reviewed strategy recommendations
•April 24, 2024: Continued discussion on retail strategies
•May 8, 2024: Continued discussion and initial recommendation development
•August 14, 2024: Prioritization of recommendations to Council
The culmination of this work was presented to the City Council’s Retail Ad Hoc on September
18, 2024.1
The Michael Baker International report (Attachment C) highlights Palo Alto's high retail and
office vacancy rates, complex regulatory framework and market shifts as key factors impacting
the city’s retail resiliency and includes recommendations to streamline zoning regulations with
flexible land use definitions and updated parking policies to address these challenges. The
specific, prioritized, zoning recommendations are provided in Attachment D and were the focus
of the Retail Ad Hoc’s discussion in September.
The City Council’s Retail Ad Hoc met to consider the recommendations that would facilitate the
establishment of retail and retail-like uses in the City in support of the City’s Economic
Development and Transition Policy. The ad hoc voted unanimously to support the following
motion:
MOTION: Council Member Lythcott-Haims moved, seconded by Council Member Burt, to
recommend the City Council:
1. Direct staff to bring an urgency ordinance with the following recommendations:
a. Approve Recommendation # 2, raising formula retail threshold from 10 to 50
(based on number businesses in California)
b. Approve Recommendation #8 but excluding gyms directly on California Ave
c. Approve Recommendation #7.1 of retail-like definition
d. Approve Recommendation # 6
2. Direct staff to:
a. Analyze Recommendation #1 with analysis of AB 2097 and interchangeability of
uses and evaluate reactivation of parking assessment district.
b. Analyze Recommendation #3 to amend retail preservation ordinance and evaluate
geographic boundaries for its application and permitted uses for what remains
within potentially amended boundaries.
1 Staff Report, dated September 18, 2024:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=14948&compileOutputType=1
Action Minutes, dated September 18, 2024:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=14947&compileOutputType=1
Meeting Recording from September 18, 2024:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=14947&compileOutputType=1
c. Analyze Recommendation #7.2
d. Carry out Recommendation #5
e. Recommend dation #11 and 13 to merge with Recommendation #15
f. Carry out Recommendation #15
3. Reject the following recommendations:
a. Recommendation #4
b. Recommendation #9
c. Recommendation #10
This report advances components of the first multi-part portion of motion (#1) and provides an
update on the other recommendations.
ANALYSIS
The attached urgency and interim ordinances makes a few discrete changes to the City’s land
use policies as set forth in the zoning code, including:
•modification to the formula retail requirements;
•changes to the retail-like definition and addition of an automobile showroom definition;
•adjustments to the permitted land uses in the ground floor (GF) and retail (R) combining
districts; and,
•relaxed standards to request a waiver or adjustment from the requirement to establish
a retail or retail-like use in the GF and R combining districts.
Formula Retail (Recommendation 2, Attachment D)
The City’s formula retail requirements only apply to commercially zoned property on California
Avenue. The ordinance was established in 2015 with the intent to preserve the unique
character of the shopping district by restricting the proliferation of chain stores while also
supporting an environment conducive to small local business owners.
Formula retail is defined in the zoning code as a business with 10 or more locations in the
United States that share standardized characteristics such as menu, services, décor, uniforms,
architecture, façade, color schemes, signs, trademarks or servicemark. While formula retail is
not prohibitive, the requirement for a discretionary conditional use permit is a deterrent to
applicants seeking to establish these uses.
The Michael Baker International report recommends changes to the formula retail
requirements to increase flexibility and encourage a balance between local and franchise
businesses in this district. Specifically, the consultant recommends revising the definition of
formula retail to apply only to restaurant uses and raising the threshold from 10 to 50 United
States locations before a conditional use permit is required. The recommendation also
encouraged the City to go further and change the standard from a national perspective to just
California; the Retail Ad Hoc agreed and the attached ordinance has been drafted accordingly.
Adjust Conditional Use Permit Threshold From 1,800 to 3,000 Square Feet (Recommendation 8,
Attachment D
One of the recommendations in the Michael Baker International report was to relax the
threshold for when a conditional use permit was required for gyms. Throughout much of the
city where gyms are permitted, there is a requirement for a conditional use permit when the
space for the gym exceeds 5,000 square feet or at any size when fronting University Avenue.
Only on California Avenue itself is the threshold set to 1,800 square feet. The consultant
recommendation was to raise the 1,800 square foot threshold for gyms on California Avenue to
3,000 square feet. It is unclear from the Retail Ad Hoc’s motion if the intent was to eliminate
gyms from occupying any space on California Avenue or to not adjust the conditional use
permit threshold. Accordingly, there is no change in the attached ordinance. The City Council
can give direction to staff on what if any changes it would like to make concerning gyms and
conditional use permit thresholds for inclusion in the ordinance.
Retail-Like Definition and Changes to GF and R overlays (Recommendations 7.1 and 8,
Attachment D)
The Michael Baker International report recommends expanding the retail-like definition to
include uses that generate pedestrian activity. This change aims to allow greater flexibility filling
ground floor vacant spaces with businesses that contribute foot traffic and vibrancy, even if the
use does not fit traditional retail definitions. This approach is intended to help reduce persistent
vacancies, support a lively commercial environment, and adapt to evolving consumer behaviors
that may prefer a wider range of services and experiences in commercial shopping districts.
Providing increased flexibility however suggests moving away from detailed lists of land uses
that defines what is permitted at a given tenant space and enabling staff to exercise judgement
when deciding if a proposed use meets the intent of the code to generate pedestrian activity.
The Retail Ad Hoc supported the consultant recommendation to add language to the retail-like
definition to allow commercial uses that are accessible to the general public, generate walk-in
pedestrian clientele, and contribute to a high level of pedestrian activity. The Retail Ad Hoc did
not get into sufficient discussion to further define retail-like uses and this report and ordinance
provides an opportunity to do so. However, the staff recommendation in this report would
have the City Council make a minor but meaningful adjustment to the definition to allow
financial institutions and add a catch-all category. Staff recommends deferring a more in-depth
conversation to the Planning and Transportation Commission to review and recommendation.
Based on the Michael Baker International report, staff has also made some changes in the
proposed ordinances to allow pet grooming and financial institutions as permitted land uses in
the GF floor (University & Middlefield Avenues) and R (California Avenue) combining districts.
These changes were not explicitly discussed by the Retail Ad Hoc and are presented to the City
Council for deliberation and direction to staff.
Pet Grooming
Pet grooming services can attract regular foot traffic and contribute to activity within mixed-use
urban areas. These services bring consistent, repeat visits from pet owners who return for
routine grooming and care, which may increase nearby foot traffic. Customers often utilize
nearby retail or dining options while waiting, potentially benefiting surrounding businesses.
Additionally, pet grooming meets a practical need in urban environments, especially for
residents in apartments who may have limited space for pet care. This service aligns with
efforts to create a pedestrian-friendly, community-oriented downtown setting.
Pet grooming would also be permitted as a retail-like use in other parts of the City with the
proposed changes to that definition.
Financial Institutions
Financial institutions are also listed in the attached ordinance and recommended by the
consultant for inclusion in the retail-like definition and staff has also added it to the GF and R
combining districts. Historically, this City has resisted allowing financial institutions or banks in
the core retail zones for a number of reasons. While banks generate pedestrian traffic, it’s
clientele may be more limited generating less foot traffic than other retailers. It may also result
in less cross-shopping creating fewer synergistic opportunities with other land uses in the area.
Bank storefronts can be uninviting compared to the visual appeal of retailers with changing
storefronts. Bank hours are also not generally aligned with evening or nighttime activity
potentially reducing a retail area’s liveliness or appeal.
While banks may not have the dynamic storefront appeal of certain retailers, their presence in
a pedestrian retail area can bring stability, economic support, and a steady flow of potential
customers, fostering an environment where other businesses can thrive. The City Council could
consider concentration limits if there was concern about too many banks being located in an
area but this too begins to reduce some of the flexibility that brokers, property owners and
property managers have been seeking.
Automobile Showroom
A new definition is proposed in the ordinance to allow automobile showrooms as a retail-like
use. This definition is narrower than and replaces “automobile dealership” as a retail-like use.
This land use may enhance visual appeal and introduce some novelty and attraction while
potentially increasing foot traffic and complement other retailers in the area. Such a land use
may or may not generate sales tax revenue and may not be as appeal to all visitors to the area
but it creates additional opportunities to potentially fill vacant tenant spaces. As drafted, the
ordinances do not permit automobile showrooms in the GF and R overlay areas, but the Council
could direct their inclusion.
Practical Waivers and Hardships
The Michael Baker International report highlights that the City’s current waiver standard, which
allows the replacement of a retail space with a non-retail or retail-like use, is overly restrictive.
This standard requires property owners to prove an “unconstitutional taking of all economic
value” to qualify for relief, presenting a major obstacle to adapting spaces to evolving market
needs. This high threshold limits flexibility, contributing to increased vacancies as property
owners struggle to meet the stringent requirements for waivers.
To address this issue, Recommendation 6 in Attachment D proposes amending zoning
regulations for the ground floor and retail combining districts to incorporate more practical
waivers and adjustments. Key changes include replacing the high unconstitutional taking
standard with a more accessible “practical difficulty” standard, enabling property owners to
seek relief more easily. Additionally, it incorporates an existing provision from the retail
preservation ordinance to establish an Alternative Viable Active Use standard, permitting
alternative active ground-floor uses that promote pedestrian activity and align with district
goals. A request for a waiver is reviewed and approved by the City Council.
These adjustments aim to reduce vacancies, increase flexibility in space adaptation, and
ultimately support the economic vitality of commercial areas.
Other Retail Ad Hoc Recommendations
The Michael Baker International report included a number or other recommendations that the
Planning and Transportation Commission and Retail Ad Hoc reviewed. One of these items
related AB 2097 is already scheduled for Council review, discussion and direction. Two other
recommendations related to evaluating the retail preservation ordinance and exploring
opportunities to allow non-retail or non-retail-like uses in the back portion of an existing retail-
oriented tenant space requires further research and analysis. The recommendation in this
report is for staff to work with the Planning and Transportation Commission to further develop
these policies and report back to Council. Recommendation 5 in Attachment D does not require
Council action and staff will follow up by preparing a handout that provides clarity on what land
uses are permitted in the City’s various commercial zoning districts. There are three other
recommendations that are mid- to long-term work related to comprehensively updating the
City’s zoning code. This is an overdue, costly and time-consuming effort that staff intends
updating the Council further during the priority setting and budget update for next fiscal year.
Lastly, there three recommendations that were not supported by the Planning and
Transportation Commission or Retail Ad Hoc. One was related to the aforementioned state law
concerning AB 2097 (Recommendation 4). The other two recommendations (9 and 10) relate to
changes in long standing City policies concerning office floor area. Staff concurs and notes that
direction to follow up on these two recommendations represents a distinct planning initiative
that is not accounted for in the current department work plan and would compete with other
Council priorities in the upcoming priority setting discussion.
FISCAL/RESOURCE IMPACT
The recommendation in this report does not have any significant fiscal or resource impacts.
Preparation of the ordinance and implementing policies can be absorbed through existing
department funding.
STAKEHOLDER ENGAGEMENT
Michael Baker International and staff conducted stakeholder interviews with landowners,
businesses, the Chamber of Commerce, and interviewed peer cities. In addition to agendized
action item discussions, the PTC held six study sessions and held four PTC ad hoc meetings. As
discussed in this report, the City Council‘s Retail ad hoc committee also met to discuss this on
September 18, 2024.
ENVIRONMENTAL REVIEW
The recommended action is exempt from the California Environmental Quality Act (CEQA) in
accordance with CEQA Section 15061(B)(3) of the CEQA Guidelines in that it can be seen with
certainty that the project will not have a significant impact on the environment.
ATTACHMENTS
Attachment A: Emergency Interim Ordinance Implementing Near-Term Retail Items
Attachment B: Temporary Interim Ordinance Implementing Near-Term Retail Items
Attachment C: Final Retail Revitalization Report (May 2024)
Attachment D: Michael Baker International Report Prioritized Recommendations
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
*NOT YET APPROVED*
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Ordinance No. _____
Emergency Ordinance of the Council of the City of Palo Alto Amending Chapters
18.04, 18.16, 18.30(A), and 18.30(C) of the Palo Alto Municipal Code to
Immediately Implement High Priority Retail Revitalization Measures
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. Like many communities, the City of Palo Alto has experienced high vacancy rates in retail
districts, which have been compounded by challenges associated with the COVID-19
pandemic as well as ongoing retail trends. Accordingly, the City Council has included retail
revitalization as a Council priority for the past several years.
B. Throughout 2023 and 2024, City staff, the Planning and Transportation Commission (PTC),
and the City’s consultant Michael Baker International (MBI) worked together to develop a
Retail Study Report intended to inform a citywide retail zoning strategy.
C. On September 18, 2024, the City Council Retail Committee reviewed the Final Draft Retail
Study Report and provided direction to staff on several zoning amendments should be
implemented immediately to support retail and retail-like uses in the City.
D. Although the PTC held six hearings on the Retail Study (in addition to four meetings of the
PTC retail ad hoc committee), the PTC has not yet considered or recommended specific,
proposed amendments to Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC).
E. The City Council finds that there is insufficient time for the PTC to consider and recommend
those amendments identified by the City Council Retail Committee for immediate
implementation. The Council therefore finds that an interim ordinance pursuant to PAMC
Section 18.80.090 is an appropriate measure, pending consideration of a permanent
ordinance by the PTC. Upon recommendation of City Staff and the Planning and
Transportation Commission, the Council of the City of Palo Alto desires to adopt regulations
responding to and implementing these state laws.
F. In addition, the City Council finds that an emergency ordinance enacting the following
amendments to Title 18 of the PAMC is necessary to preserve the public peace, health, or
safety, because the measures contained herein are necessary to support a thriving retail
sector, which is an essential priority for the City.
//
//
*NOT YET APPROVED*
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SECTION 2. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18
(Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined;
deletions struck-through; text omitted but unchanged noted by bracketed ellipses):
18.04.030 Definitions
(a) Throughout this title the following words and phrases shall have the meanings ascribed in this
section.
[. . .]
(12.5) "Automobile dealership" means a use primarily engaged in sale, lease, service, or minor
repair of new and used automobiles and trucks. Other accessory services incidental and
supporting auto sales include service bays for engine, transmission, air conditioning, and minor
painting, body and fender repair, car wash, auto rental, and similar services.
(12.6) “Automobile showroom” means a use primarily engaged in the sale of new and used
automobiles and trucks, or the display and demonstration of automobiles and trucks for the
purpose of facilitating sales, but which does not involve on-site storage of inventory, except as
incidental to the showroom use. Automobile showroom serves primarily pedestrian clientele
and is distinct from Automobile Dealership.
[. . .]
(57.6) “Formula retail business” means an retail, personal, or eating and drinking service that
is one of ten (10) fifty (50) or more business locations in the State of California United States
required by contractual or other arrangement to maintain any of the following standardized
characteristics: merchandise, menu, services, decor, uniforms, architecture, facade, color
scheme, signs, trademark, or servicemark. For purposes of this definition:
(A) “Standardized merchandise, menu and/or services” means 50% or more of in- stock
merchandise from a single distributor bearing the same or similar markings; 50% or
more of menu items identical in name and presentation with other locations; or 50%
or more of services offered identical in name or presentation with other locations.
(B) “Decor” means the style of interior furnishings, which may include but is not limited
to, style of furniture, wall coverings or permanent fixtures.
(C) “Color Scheme” means the selection of colors used throughout, such as on the
furnishings, permanent fixtures, and wall coverings, or as used on the facade.
(D) “Uniforms” means standardized items of clothing including but not limited to
standardized aprons, pants, shirts, smocks or dresses, hats, and pins (other than name
tags) as well as standardized colors of clothing.
(E) “Facade” means the face or front of a building, including awnings, looking onto a
street or an open space.
(F) “Trademark” means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of the goods
from one party from those of others.
*NOT YET APPROVED*
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(G) “Servicemark” means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of a service
from one party from those of others.
[. . .]
(125.1) “Retail-like use” means a use generally open to the public during typical business hours
and predominantly engaged in providing services closely related to retail services, including but
not limited to:
(A) Eating and drinking services, as defined in subsection (47);
(B) Hotels, as defined in subsection (73);
(C) Personal services, as defined in subsection (114);
(D) Theaters;
(E) Travel agencies;
(F) Commercial recreation, as defined in subsection (33);
(G) Commercial nurseries;
(H) Automobile showrooms dealerships, as defined in subsection (12.5 12.6); and
(I) Day care centers, as defined in subsection (42). ;
(J) Financial services, as defined in subsection (56);
(K) Other commercial uses, services, or activities determined by the Director of Planning
and Development Services to be accessible to the general public, generate walk-in
pedestrian clientele, and contribute to a high level of pedestrian activity.
[. . .]
SECTION 3. Sections 18.30(A).040 (Permitted Uses) and 18.30(A).050 (Conditional Uses),
and 18.30(A).070 (Waivers and Adjustments) of Chapter 18.30(A) (Retail Shopping (R) Combining
District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are hereby amended as
follows (additions underlined; deletions struck-through; text omitted but unchanged noted by
bracketed ellipses):
18.30(A).040 Permitted Uses
Except to the extent a conditional use permit is required pursuant to Section 18.30(A).050, the
following uses shall be permitted in an R district:
(a) Eating and drinking services, except drive-in and take-out services.
(b) Personal services, except the following on California Avenue: beauty shops; nail salons;
barbershops; laundry and cleaning services as defined in Section 18.04.030(114)(B); fitness
or exercise studios exceeding 1,800 square feet in gross floor area; and learning centers
intended for individual or small group settings.
(c) Retail services.
(d) Financial services, except drive-in services.
(e) Pet grooming services.
(d)(f) All other uses permitted in the underlying commercial district, provided they are not
located on a ground floor.
*NOT YET APPROVED*
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18.30(A).050 Conditional Uses
The following uses may be conditionally permitted in an R district, subject to the issuance of a
conditional use permit in accord with Chapter 18.76 (Permits and Approval):
(a) Financial services, except drive-in services, on a ground floor.
(b) (a) All other conditional uses allowed in the underlying commercial district provided they are
not located on a ground floor.
(c) (b) Formula retail businesses on California Avenue.
(d) (c) Beauty shops, nail salons, barbershops, f Fitness or exercise studios exceeding 1,800
square feet in gross floor area on California Avenue; and learning centers intended for individual
or small group settings.
[. . .]
18.30(A).070 Waivers and adjustments.
(a) The following shall be grounds for a request for waiver or adjustment of this Ordinance Chapter:
(a) (1) Economic Hardship. An applicant may request that the requirements of this Ordinance
Chapter be adjusted or waived only upon a showing that strict application would result in
an unreasonable financial burden on the property. applying the requirements of this
Ordinance would effectuate an unconstitutional taking of property or otherwise have an
unconstitutional application to the property.
(2) Alternative Viable Use. An applicant may request that the requirements of this Chapter
18.30(A) be adjusted or waived based on a showing that: the permitted retail or retail-like
use is not viable; the proposed alternative use will support the purposes of the combining
district and Comprehensive Plan land use designation; and the proposed use will encourage
active pedestrian-oriented activity and connections.
(b) Documentation. The applicant shall bear the burden of presenting substantial evidence to
support a waiver or modification request under this section and shall set forth in detail the
factual and/or legal basis for the claim, including all supporting technical documentation. Any
request under this section shall be submitted to the Planning and Development Services
Community Environmental Director together with the fee specified in the municipal fee
schedule and an economic analysis or other supporting documentation. A request under this
section shall be acted upon by the City Council.
SECTION 4. Sections 18.30(C).020 (Permitted Uses) and 18.30(C).030 (Conditional Uses)
of Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations) of Title 18 (Zoning) of the
Palo Alto Municipal Code are hereby amended, and Section 18.30(C).050 (Waivers and
adjustments) is hereby added as follows (additions underlined; deletions struck-through; text
omitted but unchanged noted by bracketed ellipses):
18.30(C).020 Permitted Uses
(a) The following uses shall be permitted in the GF combining district, subject to restrictions in
Section 18.40.180:
(1) Eating and drinking;
*NOT YET APPROVED*
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(2) Hotels;
(3) Personal services, except for the following on parcels with frontage on University Avenue:
fitness and exercise studios exceeding 3,000 square feet in gross floor area, where uses defined in
Section 18.04.030(114)(B), (G),(H), and (I) are not permitted;
(4) Retail services;
(5) Theaters;
(6) Travel agencies;
(7) Commercial recreation up to 5,000 square feet in gross floor area, except for parcels with
frontage on University Avenue;
(8) Financial services, except drive-in services;
(9) Pet grooming services;
(8) (10) All other uses permitted in the underlying district, provided such uses are not on the
ground floor.
(b) Elimination or conversion of basement space currently in retail or retail-like use or related
support purposes is prohibited.
(c) Entrance, lobby, or reception areas serving non-ground floor uses may be located on the
ground floor to the extent reasonably necessary, provided they do not interfere with the ground
floor use(s), and subject to the approval of the Director.
18.30(C).030 Conditional Uses
(a) The following uses may be conditionally allowed on the ground floor in the GF ground floor
combining district, subject to issuance of a conditional use permit in accord with Chapter 18.76
(Permits and Approvals) and with the additional finding required by subsection (b), subject to
restrictions in Section 18.40.160:
(1) Business or trade school;
(2) Commercial recreation over 5,000 square feet in gross floor area or with frontage on
University Avenue;
(3) Day care;
(4) Financial services, except drive in services;
(5 4) General business service;
(6) Learning centers intended for individual or small group settings;
(7 5) All other uses conditionally permitted in the applicable underlying district, provided such
uses are not on the ground floor.
(b) The director may grant a conditional use permit under this section only if he or she makes the
following findings in addition to the findings required by Chapter 18.76 (Permits and Approvals):
(1) The location, access or design of the ground floor space of the existing building housing
the proposed use, creates exceptional or extraordinary circumstances or conditions
applicable to the property involved that do not apply generally to property in the same
district.
(2) The proposed use will not be determined to the retail environment or the pedestrian-
oriented design objectives of the GF combining district.
(c) Any use conditionally permitted pursuant to this section shall be effective only during the
existence of the building that created the exceptional circumstance upon which the finding set
forth in subsection (b) was made.
*NOT YET APPROVED*
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[. . .]
18.30(C).050 Waivers and adjustments.
(a) The following shall be grounds for a request for waiver or adjustment of this Chapter:
(1) Economic Hardship. An applicant may request that the requirements of this Chapter be
adjusted or waived upon a showing that strict application would result in an unreasonable
financial burden on the property.
(2) Alternative Viable Use. An applicant may request that the requirements of this Chapter
18.30(A) be adjusted or waived based on a showing that: the permitted retail or retail-like
use is not viable; the proposed alternative use will support the purposes of the combining
district and Comprehensive Plan land use designation; and the proposed use will encourage
active pedestrian-oriented activity and connections.
(b) Documentation. The applicant shall bear the burden of presenting substantial evidence to
support a waiver or modification request under this section and shall set forth in detail the
factual and/or legal basis for the claim, including all supporting technical documentation. Any
request under this section shall be submitted to the Planning and Development Services
Director together with the fee specified in the municipal fee schedule and an economic analysis
or other supporting documentation. A request under this section shall be acted upon by the
City Council.
SECTION 5. If any section, subsection, clause or phrase of this Ordinance is for any reason
held to be invalid, such decision shall not affect the validity of the remaining portion or sections of
the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each
section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses or phrases be declared invalid.
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SECTION 6. The Council finds that the Ordinance is exempt from the California
Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it can
be seen with certainty that there is no possibility that the foregoing amendments to reduce retail
vacancies will have a significant effect on the environment.
SECTION 7. This Ordinance shall be effective upon adoption by a vote of four-fifths of the
council members present and shall remain in effect until December 31, 2026 or upon adoption of
replacement legislation by the City Council, whichever occurs first.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
Assistant City Attorney City Manager
Director of Planning and
Development Services
*NOT YET APPROVED*
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Ordinance No. _____
Temporary Ordinance of the Council of the City of Palo Alto Amending Chapters
18.04, 18.16, 18.30(A), and 18.30(C) of the Palo Alto Municipal Code to
Immediately Implement High Priority Retail Revitalization Measures
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. Like many communities, the City of Palo Alto has experienced high vacancy rates in retail
districts, which have been compounded by challenges associated with the COVID-19
pandemic as well as ongoing retail trends. Accordingly, the City Council has included retail
revitalization as a Council priority for the past several years.
B. Throughout 2023 and 2024, City staff, the Planning and Transportation Commission (PTC),
and the City’s consultant Michael Baker International (MBI) worked together to develop a
Retail Study Report intended to inform a citywide retail zoning strategy.
C. On September 18, 2024, the City Council Retail Committee reviewed the Final Draft Retail
Study Report and provided direction to staff on several zoning amendments should be
implemented immediately to support retail and retail-like uses in the City.
D. Although the PTC held six hearings on the Retail Study (in addition to four meetings of the
PTC retail ad hoc committee), the PTC has not yet considered or recommended specific,
proposed amendments to Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC).
E. The City Council finds that there is insufficient time for the PTC to consider and recommend
those amendments identified by the City Council Retail Committee for immediate
implementation. The Council therefore finds that an interim ordinance pursuant to PAMC
Section 18.80.090 is an appropriate measure, pending consideration of a permanent
ordinance by the PTC. Upon recommendation of City Staff and the Planning and
Transportation Commission, the Council of the City of Palo Alto desires to adopt regulations
responding to and implementing these state laws.
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*NOT YET APPROVED*
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SECTION 2. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18
(Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined;
deletions struck-through; text omitted but unchanged noted by bracketed ellipses):
18.04.030 Definitions
(a) Throughout this title the following words and phrases shall have the meanings ascribed in this
section.
[. . .]
(12.5) "Automobile dealership" means a use primarily engaged in sale, lease, service, or minor
repair of new and used automobiles and trucks. Other accessory services incidental and
supporting auto sales include service bays for engine, transmission, air conditioning, and minor
painting, body and fender repair, car wash, auto rental, and similar services.
(12.6) “Automobile showroom” means a use primarily engaged in the sale of new and used
automobiles and trucks, or the display and demonstration of automobiles and trucks for the
purpose of facilitating sales, but which does not involve on-site storage of inventory, except as
incidental to the showroom use. Automobile showroom serves primarily pedestrian clientele
and is distinct from Automobile Dealership.
[. . .]
(57.6) “Formula retail business” means an retail, personal, or eating and drinking service that
is one of ten (10) fifty (50) or more business locations in the State of California United States
required by contractual or other arrangement to maintain any of the following standardized
characteristics: merchandise, menu, services, decor, uniforms, architecture, facade, color
scheme, signs, trademark, or servicemark. For purposes of this definition:
(A) “Standardized merchandise, menu and/or services” means 50% or more of in- stock
merchandise from a single distributor bearing the same or similar markings; 50% or
more of menu items identical in name and presentation with other locations; or 50%
or more of services offered identical in name or presentation with other locations.
(B) “Decor” means the style of interior furnishings, which may include but is not limited
to, style of furniture, wall coverings or permanent fixtures.
(C) “Color Scheme” means the selection of colors used throughout, such as on the
furnishings, permanent fixtures, and wall coverings, or as used on the facade.
(D) “Uniforms” means standardized items of clothing including but not limited to
standardized aprons, pants, shirts, smocks or dresses, hats, and pins (other than name
tags) as well as standardized colors of clothing.
(E) “Facade” means the face or front of a building, including awnings, looking onto a
street or an open space.
(F) “Trademark” means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of the goods
from one party from those of others.
*NOT YET APPROVED*
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(G) “Servicemark” means a word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs that identifies and distinguishes the source of a service
from one party from those of others.
[. . .]
(125.1) “Retail-like use” means a use generally open to the public during typical business hours
and predominantly engaged in providing services closely related to retail services, including but
not limited to:
(A) Eating and drinking services, as defined in subsection (47);
(B) Hotels, as defined in subsection (73);
(C) Personal services, as defined in subsection (114);
(D) Theaters;
(E) Travel agencies;
(F) Commercial recreation, as defined in subsection (33);
(G) Commercial nurseries;
(H) Automobile showrooms dealerships, as defined in subsection (12.5 12.6); and
(I) Day care centers, as defined in subsection (42). ;
(J) Financial services, as defined in subsection (56);
(K) Other commercial uses, services, or activities determined by the Director of Planning
and Development Services to be accessible to the general public, generate walk-in
pedestrian clientele, and contribute to a high level of pedestrian activity.
[. . .]
SECTION 3. Sections 18.30(A).040 (Permitted Uses) and 18.30(A).050 (Conditional Uses),
and 18.30(A).070 (Waivers and Adjustments) of Chapter 18.30(A) (Retail Shopping (R) Combining
District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are hereby amended as
follows (additions underlined; deletions struck-through; text omitted but unchanged noted by
bracketed ellipses):
18.30(A).040 Permitted Uses
Except to the extent a conditional use permit is required pursuant to Section 18.30(A).050, the
following uses shall be permitted in an R district:
(a) Eating and drinking services, except drive-in and take-out services.
(b) Personal services, except the following on California Avenue: beauty shops; nail salons;
barbershops; laundry and cleaning services as defined in Section 18.04.030(114)(B); fitness
or exercise studios exceeding 1,800 square feet in gross floor area; and learning centers
intended for individual or small group settings.
(c) Retail services.
(d) Financial services, except drive-in services.
(e) Pet grooming services.
(d)(f) All other uses permitted in the underlying commercial district, provided they are not
*NOT YET APPROVED*
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located on a ground floor.
18.30(A).050 Conditional Uses
The following uses may be conditionally permitted in an R district, subject to the issuance of a
conditional use permit in accord with Chapter 18.76 (Permits and Approval):
(a) Financial services, except drive-in services, on a ground floor.
(b) (a) All other conditional uses allowed in the underlying commercial district provided they are
not located on a ground floor.
(c) (b) Formula retail businesses on California Avenue.
(d) (c) Beauty shops, nail salons, barbershops, f Fitness or exercise studios exceeding 1,800
square feet in gross floor area on California Avenue; and learning centers intended for individual
or small group settings.
[. . .]
18.30(A).070 Waivers and adjustments.
(a) The following shall be grounds for a request for waiver or adjustment of this Ordinance Chapter:
(a) (1) Economic Hardship. An applicant may request that the requirements of this Ordinance
Chapter be adjusted or waived only upon a showing that strict application would result in
an unreasonable financial burden on the property. applying the requirements of this
Ordinance would effectuate an unconstitutional taking of property or otherwise have an
unconstitutional application to the property.
(2) Alternative Viable Use. An applicant may request that the requirements of this Chapter
18.30(A) be adjusted or waived based on a showing that: the permitted retail or retail-like
use is not viable; the proposed alternative use will support the purposes of the combining
district and Comprehensive Plan land use designation; and the proposed use will encourage
active pedestrian-oriented activity and connections.
(b) Documentation. The applicant shall bear the burden of presenting substantial evidence to
support a waiver or modification request under this section and shall set forth in detail the
factual and/or legal basis for the claim, including all supporting technical documentation. Any
request under this section shall be submitted to the Planning and Development Services
Community Environmental Director together with the fee specified in the municipal fee
schedule and an economic analysis or other supporting documentation. A request under this
section shall be acted upon by the City Council.
SECTION 4. Sections 18.30(C).020 (Permitted Uses) and 18.30(C).030 (Conditional Uses)
of Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations) of Title 18 (Zoning) of the
Palo Alto Municipal Code are hereby amended, and Section 18.30(C).050 (Waivers and
adjustments) is hereby added as follows (additions underlined; deletions struck-through; text
omitted but unchanged noted by bracketed ellipses):
18.30(C).020 Permitted Uses
(a) The following uses shall be permitted in the GF combining district, subject to restrictions in
Section 18.40.180:
*NOT YET APPROVED*
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(1) Eating and drinking;
(2) Hotels;
(3) Personal services, except for the following on parcels with frontage on University Avenue:
fitness and exercise studios exceeding 3,000 square feet in gross floor area, where uses defined in
Section 18.04.030(114)(B), (G),(H), and (I) are not permitted;
(4) Retail services;
(5) Theaters;
(6) Travel agencies;
(7) Commercial recreation up to 5,000 square feet in gross floor area, except for parcels with
frontage on University Avenue;
(8) Financial services, except drive-in services.
(9) Pet grooming services.
(8) (10) All other uses permitted in the underlying district, provided such uses are not on the
ground floor.
(b) Elimination or conversion of basement space currently in retail or retail-like use or related
support purposes is prohibited.
(c) Entrance, lobby, or reception areas serving non-ground floor uses may be located on the
ground floor to the extent reasonably necessary, provided they do not interfere with the ground
floor use(s), and subject to the approval of the Director.
18.30(C).030 Conditional Uses
(a) The following uses may be conditionally allowed on the ground floor in the GF ground floor
combining district, subject to issuance of a conditional use permit in accord with Chapter 18.76
(Permits and Approvals) and with the additional finding required by subsection (b), subject to
restrictions in Section 18.40.160:
(1) Business or trade school;
(2) Commercial recreation over 5,000 square feet in gross floor area or with frontage on
University Avenue;
(3) Day care;
(4) Financial services, except drive in services;
(5 4) General business service;
(6) Learning centers intended for individual or small group settings;
(7 5) All other uses conditionally permitted in the applicable underlying district, provided such
uses are not on the ground floor.
(b) The director may grant a conditional use permit under this section only if he or she makes the
following findings in addition to the findings required by Chapter 18.76 (Permits and Approvals):
(1) The location, access or design of the ground floor space of the existing building housing
the proposed use, creates exceptional or extraordinary circumstances or conditions
applicable to the property involved that do not apply generally to property in the same
district.
(2) The proposed use will not be determined to the retail environment or the pedestrian-
oriented design objectives of the GF combining district.
(c) Any use conditionally permitted pursuant to this section shall be effective only during the
existence of the building that created the exceptional circumstance upon which the finding set
*NOT YET APPROVED*
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forth in subsection (b) was made.
[. . .]
18.30(C).050 Waivers and adjustments.
(a) The following shall be grounds for a request for waiver or adjustment of this Chapter:
(1) Economic Hardship. An applicant may request that the requirements of this Chapter be
adjusted or waived upon a showing that strict application would result in an unreasonable
financial burden on the property.
(2) Alternative Viable Use. An applicant may request that the requirements of this Chapter
18.30(A) be adjusted or waived based on a showing that: the permitted retail or retail-like
use is not viable; the proposed alternative use will support the purposes of the combining
district and Comprehensive Plan land use designation; and the proposed use will encourage
active pedestrian-oriented activity and connections.
(b) Documentation. The applicant shall bear the burden of presenting substantial evidence to
support a waiver or modification request under this section and shall set forth in detail the
factual and/or legal basis for the claim, including all supporting technical documentation. Any
request under this section shall be submitted to the Planning and Development Services
Director together with the fee specified in the municipal fee schedule and an economic analysis
or other supporting documentation. A request under this section shall be acted upon by the
City Council.
SECTION 5. If any section, subsection, clause or phrase of this Ordinance is for any reason
held to be invalid, such decision shall not affect the validity of the remaining portion or sections of
the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each
section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses or phrases be declared invalid.
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*NOT YET APPROVED*
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SECTION 6. The Council finds that the Ordinance is exempt from the California
Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it can
be seen with certainty that there is no possibility that the foregoing amendments to reduce retail
vacancies will have a significant effect on the environment.
SECTION 7. This Ordinance shall be effective from the thirty-first day after the date of its
adoption until December 31, 2026 or upon adoption of replacement legislation by the City Council,
whichever occurs first.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
Assistant City Attorney City Manager
Director of Planning and
Development Services
Draft: May 2024
PALO ALTO RETAIL REVITALIZATION STUDY
Acknowledgements
City Council Members Commissioner Keith Reckdahl Thoits Bros., Inc. – John Shenk
Mayor Greer Stone
Vice Mayor Ed Lauing
Chamber of Commerce – Charlie Weidanz
Performance Gaines – Chris Gaines
Italico – Franco Campilongo
Ad Hoc Committee MembersCommissioner Allen Akin
Commissioner Bryna Chang
Commissioner Keith Reckdahl
Council Member Greg Tanaka
Council Member Julie Lythcott-Haims
Council Member Lydia Kou
Council Member Patrick Burt
Council Member Vicki Veenker
Taste Buds Kitchen – Scott Andersen
Peer City IntervieweesCity Staff City of Santa Monica: Jennifer Taylor- Economic Development Manager
City of Santa Monica: Roxanne Tanemori- Principal Planner
City of Los Altos: Nick Zornes- Development Services Director
City of Redwood City: Evelyn Garcia- Associate Planner
Jonathan Lait- Planning and Development Services Director
Amy French- Chief Planning Official
Bruce FukujiPlanning and Transportation Commission
Chair Doria Summa
Commissioner Allen Akin
Commissioner Bart Hechtman.
Commissioner Bryna Chang
Commissioner Carolyn Templeton
Commissioner George Lu
Steven Guagliardo- Assistant to the City Manager – Economic Development
Consultants
Michael Baker InternationalStakeholders
Premier Property Management – Jon Goldman, Brad Ehikia
Ellis Partners – Jim Ellis Cover Image Credit: Palo Alto online
Table of Contents
Executive Summary.................................................................................. 1
Introduction ............................................................................................ 2
Approval Process ........................................................................................14
AB 2097 Implications and Recommendations ..........................................15
Zoning Analysis and Recommendations...................................................18
Market Profile.......................................................................................... 7
Demographic Profile .................................................................................... 7
Purpose ........................................................................................................ 2
Relationship to Comprehensive Economic Development Strategy ............. 2 Top Tier.................................................................................................... 7
Urban Chic ............................................................................................... 7
Laptops and Lattes .................................................................................. 7
Zoning Review and Comparison.................................................................18
Zoning Recommendations..........................................................................18Guiding Principle 3 ................................................................................... 2
Strategy 9................................................................................................. 2
Action Items ............................................................................................. 2 Leakage and Surplus .................................................................................... 8
Leakage (Demand)................................................................................... 8
Surplus (Supply) ....................................................................................... 8
Stanford Shopping Center........................................................................ 8
List of AppendicesStudy Area............................................................................................... 3
Downtown/University Avenue..................................................................... 3
California Avenue......................................................................................... 3
Midtown....................................................................................................... 3
El Camino Real.............................................................................................. 3
Appendix A: Outreach Summary
Appendix B: Market Study
Appendix C: Implications of AB 2097
Appendix D: Zoning Review and Comparison
Summary...................................................................................................... 8
Vacancy Trends and Findings .................................................................... 9
Outreach ................................................................................................. 4
Stakeholders............................................................................................ 4
Peer Cities ............................................................................................... 4
Retail Space Trends and Findings ................................................................ 9
National Trends ....................................................................................... 9
Palo Alto Findings .................................................................................. 10
Comparison with Peer Cities.................................................................. 11City of Santa Monica .................................................................................... 4
City of Los Altos............................................................................................ 4
Redwood City ............................................................................................... 5
Office Space Trends and Findings.............................................................. 12
National Trends ..................................................................................... 12
Palo Alto Findings .................................................................................. 12
Comparison with Peer Cities.................................................................. 13
Changing Nature of Retail ........................................................................ 6
Rise of E-Commerce..................................................................................... 6
Palo Alto Specific Trend............................................................................ 6
Experience-based Retail............................................................................... 6
Best Practices......................................................................................... 14
Land Use and Zoning Ordinance................................................................ 14
Parking and Curb Management................................................................. 14
City of Palo Alto i
PALO ALTO RETAIL REVITALIZATION STUDY
Executive Summary
The City of Palo Alto seeks to retain, attract, and reinvigorate existing
commercial areas, particularly areas that provide retail services. The
purpose of this study is to recommend zoning strategies to help retain,
strengthen, and facilitate retail in the key commercial areas of Palo Alto.
This study complements and furthers the Comprehensive Economic
Development Strategy adopted by the City Council in August 2023.
There was a remarkably strong consensus among the stakeholders with
respect to the opinions about the problems and recommended
improvements. The zoning analysis revealed an extremely complex,
complicated, confusing, and difficult to comprehend and navigate set of
regulations, which poses significant challenges for staff, property owners,
and prospective businesses, alike. The code contains many overlapping,
redundant, and narrowly targeted provisions. Altogether, it creates a
negative, overly protective, and business-adverse regulatory environment.
The good news is that there are many opportunities to make improvements
that will reduce and eliminate deterrents and unreasonable constraints on
existing and future investments in retail uses in Palo Alto.
to provide the foundational analysis, policy, and strategic recommendations
to authorize and enable the development and adoption of future specific
zoning amendments.
This study contains approximately 20 recommendations organized around
the following 7 primary strategies:
1. Conduct a Comprehensive Zoning Cleanup of Mature, Complex
CodeThis study includes:
Several immersive reviews of the Palo Alto Zoning Code 2. Create Streamlined and Predictable Approval Processes
3. Limit the Retail Preservation Ordinance (RPO) (18.40.180)
4. Allow Non-retail Uses on Ground Floor with Limitations
5. Repeal the Office Conversion and Construction Limitations
6. Relax the Formula Retail Restrictions
Several rounds of stakeholder interviews, including business and
property owners, and property managers, peer city staff
Reviews and summaries of best retail revitalization practices The recommendations of this study reflect the overall consensus on the
following general principles:A review and summary of national and local retail and office market
trends 1. It is better to have occupied spaces, patrons, customers, and
services for the community than the deleterious effects of vacant
ground-floor spaces.
7. Ease the Parking Regulations
Market and demographic profile of Palo Alto Implementation of these recommendations will take time. Some may be
able to be implemented quickly, while others will require considerably more
time. It is important that the City take swift action to execute actions as soon
as possible. The recommended zoning strategies in this study provide a
coordinated framework to identify and implement individual and
coordinated sets of revisions in phases.
Review of past City planning efforts and correspondence, including
the recent Streetsense Comprehensive Economic Development
Strategy study and the Car-Free California Avenue Engagement
Reports
2. It is extremely difficult, if not impossible, and often
counterproductive to try to outsmart or manipulate the free
market.
Multiple meetings and workshops with the Planning and
Transportation Commission
This study recommends a variety of modifications to the Zoning Code to
eliminate or reduce regulatory constraints, conflicts, and outdated zoning
strategies that deter, discourage, or overcomplicate the attraction,
retention, and adaptation of retail business in Palo Alto.Multiple meetings and reviews with Palo Alto Planning and Economic
Development department staff
The trend analyses show significant and persistent vacancies in Palo Alto in
both office and retail spaces. Some of the vacancy trends are consistent with
larger regional and national trends, particularly the impacts of the COVID-
19 pandemic. However, some of the local trends and patterns appear to be
unique to Palo Alto.
The recommendations include strategies for future specific zoning
amendments. This study provides the background conditions,
understanding, best practices, community and stakeholder engagement,
and policy discussions and regulatory implications that led to the
development of the recommended zoning strategies. This study is intended
City of Palo Alto 1
PALO ALTO RETAIL REVITALIZATION STUDY
Introduction
Purpose
Action ItemsLike many retail districts throughout the United States, the City of Palo
Alto is struggling with high rental and vacancy rates in addition to
challenges elicited by the COVID-19 pandemic and emerging retail
trends. The City requested evaluation of its land use controls relative to
the evolving economic and market conditions for the City's major retail
areas and corridors. Regulatory and procedural complexities play a
significant role in the retail challenges for the City. The main focus of this
report is to analyze, understand, and recommend changes to these land
use controls and, to a lesser extent, discuss procedural hindrances.
strategies identified in the Comprehensive Economic Development
Strategy aim to reflect the delicate ecosystem that drives the vibrancy
of the City’s downtown and commercial centers with a focus on the
retail and hospitality sectors significantly affected by the COVID-19
pandemic and resulting hybrid work environment. Three guiding
principles emerged from this study.
Action 9.1 Consider removing or consolidating zoning overlays,
incorporating an at a glance permitted use table and design
standards, and an interactive online map with quick links to
relevant regulations.
Action 9.2 Consider amending Section 18.76.20, Architectural
Review, of the municipal code to enable more over the counter
approvals for minor changes.Each guiding principle has recommended strategies accompanied by
one or more distinct actions. Guiding Principle 3, Strategy 9, and action
items 9.1 – 9.4 of the Comprehensive Economic Development Strategy
report are directly relevant to the purposes of this study and noted
below.
Action 9.3 Reevaluate the city-wide Retail Preservation
Ordinance and consider refocusing its applicability to targeted
areas of existing retail concentration while also allowing
flexibility in non-street facing portions of buildings.
The report also reviews national and regional trends as well as best
practices. In addition, local business owners, City staff, and neighboring
communities were interviewed to understand the local trends and
climate. Appendix A includes the outreach summary and lists the
individuals and businesses/agencies that were interviewed.
Guiding Principle 3
Action 9.4 Enable growth in Neighborhood Goods and Services
along California Avenue by updating the Formula Retail
Ordinance and easing use restrictions on in demand
neighborhood serving uses that are currently heavily regulated
or prohibited.
Adopt policies that reflect changing market conditions by easing the
regulatory burden for businesses, removing outdating restrictions that
create hurdles to tenancy, and focus retail and retail like uses in places
where they are market-supported.
Relationship to Comprehensive Economic
Development Strategy
Strategy 9This study complements and furthers the Comprehensive Economic
Development Strategy adopted by the City Council in August 2023. The Streamline, update and/or remove unnecessary use restrictions and
pursue regulatory reform to enable tenancy and competitiveness.
City of Palo Alto 2
PALO ALTO RETAIL REVITALIZATION STUDY
Study Area
Four major retail areas and corridors were identified and analyzed to
understand the current retail trends and land use conditions across the retail
landscape of Palo Alto. The areas that were reviewed are Downtown Palo
Alto/University Avenue, California Avenue, Midtown, and El Camino Real.
These areas are depicted in Figure 1.
multifamily housing, auto dealerships, veterinary services, gas stations, banks,
fitness centers, public parks, and retail services.
Figure 1 Palo Alto Retail Study Area
Downtown/University Avenue
Downtown Palo Alto, defined by the boundaries of Alma Street, Lytton
Avenue, Hamilton Avenue, and Webster Street, is a mixed-use commercial
district consisting of a variety of service industry land uses, including hotel,
eating and drinking services, retail services, laundry services, theaters, beauty
salons, public parks, places of worship, fitness studios, single- and multifamily
housing, office, and parking.
California Avenue
California Avenue from El Camino Real to the California Avenue Train Station
is a four-block-long commercial corridor consisting of a large mix of
commercial and retail uses, including eating, and drinking services, banks,
optometrists, offices, retail, health and wellness services, fitness studios,
beauty salons, post office, hotel, and parking structures. The City Council
authorized California Avenue as a temporary car-free street early in the
COVID-19 pandemic as an economic recovery effort and to provide
community members with outdoor spaces to gather. In December 2023, City
Council determined California Avenue will permanently remain a car-free
street.
Midtown
The Midtown retail district is located along Middlefield Road between Sutter
Avenue and Moreno Avenue. Midtown is a traditional American horizontal
mixed-use retail complex comprising multiple buildings accessed largely by
vehicle trips intended to attract patrons from outside the immediate area.
Land uses include eating and drinking services, offices, civic/institutional,
barber shops, fitness studios, retail services, beauty salons, dance, and music
studios, and learning centers.
El Camino Real
El Camino Real is a 4-mile-long commercial highway corridor that runs the
entire length of Palo Alto from Sand Hill Road to Los Altos Road. The corridor
is a major thoroughfare supported by auto-oriented uses and large retail
complexes, including hotels, banks, medical and dental services, eating and
drinking services, learning centers, car rental shops, beauty salons,
City of Palo Alto 3
PALO ALTO RETAIL REVITALIZATION STUDY
City of Santa Monica City of Los AltosOutreach
The City passed an extensive list of emergency orders during the pandemic.
These included both planning and building/safety emergency orders, many
of which have been formally adopted or extended. The following are key
policy and zoning changes identified in the interview with City staff.
The following are key policy and zoning regulations and permitting
procedures identified in the interview with City staff.Outreach efforts included interviews with six stakeholders and three peer
cities. The outreach efforts are summarized in Appendix A of this document.
Los Altos has an active Chamber of Commerce that supports and
works with businesses. Using a Downtown Vacancy matrix, the
Chamber of Commerce tracks vacancies, allowed uses, and building
floor area/square footage.
Stakeholders
Changes in zoning included allowing a wider variety of uses by right
in areas that were historically more restrictive, such as pop-ups and
creative commercial uses.
Six stakeholders—landowners, businesses, and the Chamber of
Commerce—were interviewed in order to understand the restrictions or
hindrances to development; they then provided recommendations to
mitigate them. There was a strong consensus on many issues among all of
the stakeholders. Below are the main takeaways from these interviews.
The City’s streamlined permit processing via online submittals take
days, not months.The City eliminated the need for conditional use permits (CUP),
minor use permits, and other discretionary approvals for several
uses.
The City made alcohol sales an ancillary use allowed by right.
The City does not typically use CUPs; uses are either allowed or
prohibited.
Provide flexibility in the reuse of ground-floor space.
Rescind ground-floor Retail Protection Ordinance.
The City staff stressed the importance of City staff being a known,
visible, and trusted figure in the community.Figure 3 Los Altos - Downtown Triangle - Commercial Retail Sales (CRS)Figure 2 Third Street Promenade - Bayside Conservation District (BC)Remove ground-floor retail restrictions on side streets and blocks
away from the main commercial corridor.
Expand the definition of “retail-like use” to include uses that
generate pedestrian activity.
Remove restrictions on formula retail.
Make permitting process simple, quick, and predictable.
Reduce in-lieu parking fee to allow new development or
intensification.
Allow transfer between uses without requiring parking.
Peer Cities
To gain a broader understanding of Palo Alto's regulatory provisions and
procedures and inform the recommendations, three communities were
interviewed to identify gaps and differences in approaches to retail
development as well as to review the zone districts most similar to Palo Alto.
The jurisdictions were identified during the Planning and Transportation
Commission and stakeholder interviews as having flexible zoning codes,
efficient permit procedures and processing, and similar or desired retail
districts. These were the following:
City of Santa Monica (focus was on Third Street Promenade – Bayside
Conservation District)
City of Los Altos (focus was on Downtown Triangle – CRS Zone)
City of Redwood City (focus was on Downtown area)
City of Palo Alto 4
PALO ALTO RETAIL REVITALIZATION STUDY
Redwood City Figure 4 Redwood City Zoning Map
The following are key policy and zoning regulations and permitting
procedures identified in the interview with City staff.
Any changes to use in the downtown area, including retail, can be
done by right.
The City provides a floor area ratio increase if the applicant provides
housing or mixed uses in their development project.
The City has several vacancies in the downtown and they are trying
to attract other active uses, not just retail.
City of Palo Alto 5
PALO ALTO RETAIL REVITALIZATION STUDY
Changing Nature of Retail
Rise of E-Commerce Experience-based Retail
Retail has changed significantly over the last decade with the evolution of
online retailer platforms and flexible mixed-use spaces. The pandemic has
exacerbated this evolution, increasing the quantity of purchasing of goods
and services via a myriad of avenues, especially via e-commerce. This trend
is less of an anomaly and more of a paradigm shift in retail. As consumers
diversify the ways they purchase goods and services, the role of brick-and-
mortar establishments and traditional retail districts are transitioning.
While there are always consumers who prefer e-commerce, many
businesses remain important physical anchors in retail districts, such as
grocery stores, eating and drinking establishments, personal services,
exercise studios, medical services, and theaters.
The growth rate of e-commerce is significantly higher compared to the
growth rate of total retail sales in the US, indicating a strong preference for
online shopping versus brick-and-mortar stores. The US e-commerce grew
7.6 percent in 2023 and total sales grew 3.8 percent. This trend is projected
to continue and create competition for and innovation in local retail and
commercial spaces.
Experiential retail aims to provide customers with unique and memorable
experiences beyond traditional shopping. The desire for retail experiences
is on the rise with millennials saying that 52 percent of their spending goes
on experience-related purchases.2 “Retailtainment” is a subset of
experiential retail that elevates the customer experience through
entertainment by offering immersive retail experiences, where brands are
able to provide customers with fun, unique, and in-person experiences that
elevate shopping to new heights. Key features of experiential retail include:Palo Alto Specific Trend
While specific statistics on the share of e-commerce in Palo Alto may not be
readily available, it is important to recognize that national trends
significantly influence local communities. Palo Alto, like many other cities,
experiences the effects of broader economic shifts. The Comprehensive
Economic Development Strategy, done by Streetsense and adopted by the
Council in 2023, indicated that there is an oversupply of 460,000 square feet
of retail space in the City. While the shift to e-commerce is one of the
factors, the study also indicates that hybrid work has reduced the demand
for retail in Palo Alto by over 100,000 square feet.
Unique Spaces and Objects: Retail spaces that stand out, interesting
displays, and creative use of physical environments.
High Customer Engagement: Interactivity, personalization, and
emotional connections.E-commerce has and continues to grow as a percentage of total retail sales.
It grew from 8 percent to 19.1 percent of total retail sales from 2012 to
2021. The growth was significant during the pandemic. In 2022, US e-
commerce represented 21.2 percent penetration total retail sales and that
in 2023 was 22.0%, according to Digital Commerce 360 analysis of
US Department of Commerce data.1
Technology Integration: Leveraging tech to enhance customer
interactions.
According to a recent report from Forrester and Adobe, brands defined as
“experience-driven” are seeing an average growth rate of 19 percent per
year, compared to 13 percent for other types of retailers. That study also
found that retailers utilizing experiential tactics are driving repeat purchases
at rates nearly twice those of traditional retail.3
Figure 5: US E-commerce Sales as a Percentage of Total Sales
Source: Digital Commerce 360
1 Digital 360, US ecommerce sales penetration hits new high in 2023, accessed April 18, 2024,
https://www.digitalcommerce360.com/article/us-ecommerce-sales/.
2 Washington Post, “Shoppers are choosing experiences over stuff, and that’s bad news for retailers,”
accessed April 18, 2024, https://www.washingtonpost.com/business/economy/shoppers-are-choosing-experiences-over-stuff-and-thats-bad-news-for-retailers/2016/01/07/eaa80b5a-b4a7-11e5-
a76a-0b5145e8679a_story.html.
3 Experiential Retail: What You Need to Know in 2020, accessed April 18, 2024,
https://www.commercialsearch.com/news/experiential-retail-what-you-need-to-know-in-2020/.
City of Palo Alto 6
PALO ALTO RETAIL REVITALIZATION STUDY
Market Profile
Market research was conducted to understand the area's demographics and
office and retail market conditions, as well as retail demand and supply. ESRI
Business Analyst- demographic mapping software tool and CoStar- a real
estate information tool, were used for this research; the information was
supplemented by City staff and stakeholder interviews. The data used to
summarize the market study can be found in Appendix B
Top Tier
These are the residents of the wealthiest Tapestry market and earn more
than three times the median US household income. They have the
purchasing power to indulge in any choice. Aside from the obvious expense
for the upkeep of their homes, consumers select upscale salons, spas, and
fitness centers for their personal well-being and shop at high-end retailers
for their personal effects. They take lavish vacations and fill their weekends
and evenings with opera, classical music concerts, charity dinners, and
shopping. They mostly shop at high-end retailers such as Nordstrom, but
also at other meddle-end stores such as Target, Kohl's, Macy's, and Bed Bath
& Beyond. They also shop online.
This section is divided into three sections:
Demographic Profile: An understanding of demographics, their
purchasing power, and the products they consume helps businesses
located in the area to cater to these groups and, in turn, increase their
chances of success.Source: ESRIUrban ChicLeakage and Surplus: An analysis of leakage and surplus provides a
snapshot of the type of retail that is missing in the area. This
information, along with the demographic makeup of the areas, helps
business owners target the retail stores that will cater to the
population in the area.
Urban Chic residents are professionals that live a sophisticated, exclusive
lifestyle. Half of all households are occupied by married-couple families, and
about 30% are singles. These are busy, well-connected, and well-educated
consumers—avid readers and moviegoers, environmentally active, and
financially stable. This market is a bit older, with a median age of 43 years,
and growing slowly but steadily. They shop at stores such as Trader Joe's,
Costco, or Whole Foods. They like to eat organic foods, drink imported wine,
Summary: This section summarizes key observations and findings from
the market profile.
Demographic Profile and truly appreciate a good cup of coffee. They travel extensively
(domestically and internationally) and shop at upscale establishments. They
embrace city life by visiting museums, art galleries, and movie theaters for
a night out. In their downtime, they enjoy activities such as skiing, yoga,
hiking, and tennis.
ESRI provides a system of market segmentation built by using a large, well-
selected array of attributes of demographic and socioeconomic variables to
identify numerous unique consumer markets throughout the United States.
This system is called Tapestry Segmentation. The data can provide insight
on essential consumer variables, such as age, education level, the likeliness
of car or home ownership, a consumer's willingness to buy or purchase
certain products, and their overall economic purchasing power. This is an
important aspect of market research and helps create an understanding of
the types of land uses that will best serve the neighboring population in a
10-minute drive time.
Source: ESRI
Laptops and Lattes
These residents are predominantly single, well-educated professionals in
business, finance, legal, computer, and entertainment occupations. They
are affluent and partial to city living—and its amenities. Many residents
walk, bike, or use public transportation to get to work, a number work from
home. Laptops and Lattes residents are cosmopolitan and connected—
technologically savvy consumers. They are active and health conscious and
care about the environment. They spend money on nice clothes, dining out,
travel, treatments at day spas, and lattes at Starbucks. Physical fitness is a
priority, exercising at a club or other facility on a regular basis. They enjoy
sports such as jogging/running, biking, tennis, soccer, skiing, yoga, and
Pilates, as well as participating in fantasy sports leagues. They favor organic
food and purchasing groceries at higher-end markets.
More than 70 percent of the population living in the 10-minute drive time
of the commercial areas in Palo Alto falls in one of these three tapestry
segments:
Source: ESRI
City of Palo Alto 7
PALO ALTO RETAIL REVITALIZATION STUDY
Leakage and Surplus
ESRI's Retail MarketPlace database includes a leakage/surplus factor that
measures the balance between the volume of retail sales (supply) generated
by retail businesses and the volume of retail potential (demand) produced
by household spending on retail goods within the same industry. Analysis of
the data has led to the following results for supply and demand within a 10-
minute driving time of California Avenue and University Avenue (Trade
area).
restrictions, or City approval. All of this results in key advantages and
competition for Downtown and California Avenue.
Summary
There seem to be several gaps in the market based on the leakage/surplus
reports. These include personal services and grocery stores. At the same
time, the demographics of the area seem to use upscale salons, spas, and
fitness centers for their personal well-being and shop for groceries at Trader
Joe's, Whole Foods, and other organic stores. Hence, such retail and retail-
like uses, if provided in the area, have chances of success, and can help
lower vacancies indicated in the findings section. Based on such findings,
there are opportunities for possible code and regulatory changes to help
capture the market.
Leakage (Demand)
Leakage in an area represents a condition where demand exceeds supply.
In other words, retailers outside the market area are fulfilling the demand
for retail products; therefore, demand is “leaking” out of the trade area.
Such a condition highlights an opportunity for new retailers to enter the
trade area or for existing retailers to extend their marketing outreach to
accommodate the excess demand.
Trade area leakage includes- Auto parts, motor vehicle dealers, auto
accessories, building materials, lawn and garden equipment, other general
merchandise stores, florists, vending machine operators, direct selling
establishments, special food services, drinking places, used merchandise
stores, office supplies, stationery, and gift stores, gasoline stations, health
and personal care stores, specialty food stores, and grocery stores.
Surplus (Supply)
Surplus in an area represents a condition where supply exceeds the area’s
demand. Retailers are attracting shoppers that reside outside the trade
area. The “surplus” is in market supply. Brand positioning and product mix
are key differentiators in these types of markets.
Trade area surplus includes- Shoe stores, book, periodical, and music stores,
furniture stores, department stores, home furnishings stores, electronics
and appliance stores, jewelry, luggage, and leather goods store.
Stanford Shopping Center
It should be noted that the commercial areas along California Avenue and
University Avenue receive direct competition from the Stanford Shopping
Center due to being in its close vicinity. The Stanford Shopping Center is
successful and attracts clientele from the region. The retail areas in the City
can learn from the success of the professionally managed shopping center,
which does not have the same zoning constraints. The mall emphasizes
continuous pedestrian activation and comfort, and more non-exclusive
retail on the ground floor, such as spas, personal services, restaurants, and
food and convenience. It should also be considered that parking is set, and
tenants can change usage without triggering parking fees, construction,
City of Palo Alto 8
PALO ALTO RETAIL REVITALIZATION STUDY
Vacancy Trends and Findings
Retail Space Trends and Findings
National Trends
Figure 6: US Retail Vacancy Trend
According to a CoStar report, “The US retail market has demonstrated
remarkable resilience over the past three years, culminating in historically
tight availability at the end of 2023 with the national average vacancy rate
hitting a new low of just 4.0 percent. Current demand and supply-side
factors are likely to persist regardless of economic conditions. On the
demand front, the retail sector has benefited significantly from a marked
decrease in bankruptcies and large-scale store closures over the past three
years, resulting in a 20 percent reduction in the amount of retail space
vacated compared to pre-pandemic norms.
With retail tenants no longer moving out of spaces at the same robust clip
seen in 2017 through 2020 and demand supported by a historic surge in
consumer spending, the amount of available retail space tightened quickly
as less and less backfill space became available. Supply-side factors equally
drove the rapid contraction in vacancy, as very little new retail development
coupled with an active pace of demolitions resulted in the lowest levels of
net retail space deliveries seen in decades.” 4
This trend appears likely to remain in place for the foreseeable future based
on the current range of outcomes. In only the two most adverse scenarios,
the Depression and Severe Downside alternatives, does retail vacancy
increase above 5 percent.
The boost in consumption coming out of the pandemic, retail sales,
excluding e-commerce, stand 10 percent higher than pre-pandemic levels,
even after accounting for inflation. This increased sales potential suggests
closures will likely be limited to a select few underperforming stores and
those stemming from bankruptcies.Source: CoStar
4 CoStar reports, “Retail Supply and Demand Likely To Remain in Balance for Foreseeable Future,”
accessed April 18, 2024, https://www.costar.com/article/523238330/retail-supply-and-demand-likely-to-remain-in-balance-for-foreseeable-future.
City of Palo Alto 9
PALO ALTO RETAIL REVITALIZATION STUDY
Palo Alto Findings
An evaluation of recent changes in vacancy rates over the last year
(2023-2024) shows improvement in the California Avenue area and
Midtown areas.5
All areas except Midtown show an increase in period of months
vacant since the pandemic with some retail spaces being vacant for
20 to 30 months in the Downtown and California Avenue areas.Data derived from CoStar illustrates retail vacancy trends in Palo Alto.
Detailed ten-year trend tables and graphs for study areas in Palo Alto as well
as peer cities are documented in Appendix B. Below are key observations
and findings from the CoStar data.
Vacancy rates vary considerably quarterly, particularly in smaller
market areas where one vacancy represents a significant percentage
of the total.
Retail space vacancy in the Town and County area has increased
dramatically since the COVID-19 pandemic from an average of 4.5
months in 2019 and 2020 to over 40 months in Q1 of 2024.Retail and office vacancy rates have increased significantly in each of
Palo Alto's retail districts in the last decade, specifically in the
Downtown, California Avenue, and El Camino Real-Town and
Country area.
The Town and Country area was hit particularly hard by the COVID-
19 pandemic, with vacancy rates increasing from among the lowest
rates in Palo Alto to the second highest after Downtown.
Landowners seem to be willing to forgo rents and keep their
properties vacant for longer periods of time. According to a Harvard
study, “Why Do Urban Storefronts Stay Empty for So Long?”6
storefronts often remain empty for months or years at a time, even
in some of the world’s highest-rent retail districts. The study
concluded that, eventually, a primary driver of retail vacancy in
dense urban areas is the fact that landlords are willing to forgo rents
today to preserve the option to lease their space to someone else
(who might pay higher rents) tomorrow. The study found that while
a vacancy tax would decrease the vacancy rate and rents, it would
also lower tenant quality and lead to faster churn in the city’s
storefronts.
The rents for the retail spaces in the commercial areas that were
studied have been on a steady rise despite increases in the vacancy
rate, with the highest rent per square footage in the Downtown and
Town and Country areas.
Unlike national trends, the trend in Palo Alto shows a rise in vacancy
rates since the end of the COVID-19 pandemic.
Vacancies seemed to have been rising several years before the
pandemic began. This could be due to a combination of factors such
as changes in regulatory environment, rise of e-commerce, and a
continued and latent expression of weakness in the retail sector
following the Great Recession.
All retail areas still have vacancy rates greater than what they were
pre-COVID.
Midtown has performed well regardless of the COVID-19 pandemic,
likely due to being isolated and supported as local service to
surrounding residential areas with a strong customer base.
Table 1: Retail Vacancy Trends as of 2024 Q1
Vacancy Rate Change*
(2023-2024)Area Total Retail Space (SF)Vacant Retail Space (SF)Vacancy Rate Rent per Square Foot
Downtown 740,000
295,000
175,000
54,300
463,000
104,000
1,831,300
112,000
28,200
21,400
5,000
8,100
3900
15.1%
9.6%
12.2%
9.1%
1.8%
3.8%
9.8%
6.90%$77.11
$54.47
$76.70
$48.81
$53.65
$55.67
California Avenue
ECR - Town and Country
ECR - California Avenue
ECR - South
Midtown
TOTAL
-4.10%
0.50%
8.20%
0.20%
-0.4%
178,600
Source: February 2024 CoStar Group Analytical Reports
ECR = El Camino Real
* Indicates one-year change. A negative percentage indicates that the vacancy has reduced in a one-year period. Positive numbers indicate an increase in vacancy in one-year period.
5 CoStar Data Analytical Reports accessed February 9, 2024, https://www.costar.com/.6 Moszkowski, Erica and Daniel Stackman, “Why Do Urban Storefronts Stay Empty for So Long?”, 2023,
accessed February 7, 2024,
https://emoszkowski.github.io/ericamoszkowski.com/Moszkowski_JMP.pdf.
City of Palo Alto 10
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 7: Retail Vacancy Rate (2014 Q1 to 2024 Q1)Comparison with Peer Cities
As a part of the study, the retail vacancy trends were compared to peer cities
Santa Monica and Los Altos. Detailed graphs of these trend comparisons can
be found in Appendix B.
Similar to Palo Alto, unlike national trends, the vacancy rate significantly
increased in Santa Monica in both areas studied, i.e., the Third Street
Promenade and the Main Street area.
The Third Street Promenade was hardest hit, post-COVID-19, of all the
retail areas studied. One contributing factor could have been the
pedestrian nature, which became less favorable due to limited in-
person interactions during the pandemic. As a result, foot traffic and
business activity declined, impacting the Promenade’s overall
performance.
The vacancy rate in downtown Los Altos increased only slightly post-
pandemic but has showed signs of recovery since 2021. It remains below
3 percent.
Figure 8: Retail Rent per Square Foot (2014 Q1 to 2024 Q1)
City of Palo Alto 11
PALO ALTO RETAIL REVITALIZATION STUDY
Office Space Trends and Findings
National Trends According to Office News, Class A office space in highly prestigious and well-
connected locations is still in demand, especially where new or newly
renovated offices are concerned. Premiums for high-end offices have
increased nationwide by more than 30 percent since the onset of the
pandemic, although it has not affected demand.8
2023 Q4, reducing the vacancy by approximately seven percentage
points, the vacancy increased again in the last quarter. This could be
due to office closures or offices not reinstating lease agreements and
shrinking office space in a hybrid work environment.
The US office vacancy rate has reached an all-time high due to the impact of
remote work arrangements. It rose to a record-breaking 19.6 percent in the
fourth quarter of 2023. This is the largest quarterly increase since the first
quarter of 2021, and larger than the 19.3 percent level reached twice in 40
years. In conjunction, the new construction of office space has cooled to the
lowest levels since 2012.7
El Camino Real retail areas, except for Town and Country, show a
drop-in vacancy rate post-COVID-19 pandemic. A relatively small
amount of vacant office space in Town and Country (5,800 square
feet) could result in a high vacancy percentage due to limited overall
inventory.
Palo Alto Findings
Vacancy rate data derived from CoStar illustrates retail vacancy trends in
Palo Alto. Detailed ten-year trend tables and graphs for study areas in Palo
Alto as well as peer cities are documented in Appendix B. Below are the
findings.
The remote work trend is seen as the foremost reason for high vacancy
rates. The COVID-19 pandemic accelerated the adoption of remote work.
Many companies shifted to telecommuting, reducing the need for physical
office spaces.
Similar to Town and Country, Midtown shows a high vacancy rate
with actual vacant square footage of only 8,900 square feet.
Similar to national trends, the office vacancy rate has been increasing
in Palo Alto. Vacancy rates are greater than 10 percent in most areas,
post-COVID-19 pandemic.
Office rents have also dropped, with peak asking rents being right
before the COVID-19 pandemic. However, this has not helped with
net absorption. Overall, Downtown and Town and Country have the
highest rents per square foot in Palo Alto.
Industries like tech and finance have embraced remote work more readily,
affecting office demand. Sectors that rely heavily on in-person collaboration
(e.g., creative agencies, legal firms) may still require office space.Most office space in Palo Alto catered to tech companies. The
demand for office space has been impacted by tech companies
readily embracing remote work and lease expirations.Lease expirations also provide opportunities for companies to renegotiate
terms or explore alternative spaces. Some businesses choose not to renew
leases, contributing to higher vacancies. Sustainability and environmental
awareness are also influencing office design. Some companies prioritize
green buildings or energy-efficient spaces. Older, less efficient buildings
may struggle to attract tenants.
x Most office buildings in the four-district study area are older. There
is limited Class A building space in the study areas, the largest of
which is in the Downtown area with 85,000 square feet. However,
this is an older building, built in 1980s.9
Downtown has the highest overall inventory of office space and
highest square footage of vacancy. The vacancy rate has continued
to increase post-COVID-19 pandemic with no sign of recovery.
California Avenue has the highest vacancy rate as of February 2024.
While there has been some absorption of space from 2022 Q4 to
Table 2: Office Vacancy Trends as of February 2024
Vacancy Rate Change
(2023-2024) *Area Total Office Space (SF)
2,100,000
712,000
Vacant Office Space (SF)Vacancy Rate
16.0%
Rent per Square Foot
$93.77Downtown339,000
166,000
5,800
3.7%
1.0%
2.3%
-4.6%
-5.6%
-0.2%
California Avenue
ECR - Town and Country
ECR - California Avenue
ECR - South
23.4%$72.23
49,800 11.6%$87.63
192,000 15,500
20,900
8,900
8.1%$72.45
219,000 9.6%$66.11
Midtown 43,200 20.7%$65.13
TOTALS/AVERAGE 3,316,000 556,100 16.8%-1%$76.22
Source: February 2024, CoStar Group Analytical Reports
ECR=El Camino Real
* Indicates one-year change. A negative percentage indicates that the vacancy has reduced in a one-year period. Positive numbers indicate an increase in vacancy in a one-year period.
7 CNN Business, “Office vacancy rate hits record high,” January 8, 2024,
https://www.cnn.com/2024/01/08/economy/office-space-vacancies-hit-a-record-
high/index.html#:~:text=The%20national%20office%20vacancy%20rate,vacancy%20rate%20was%20ar
ound%2016.8%25.
8 Office News, US Office Market Trends 2022 – Statistics, Challenges and Outlook, February 24, 2022,
https://offices.net/news/us-office-market-trends-2022-statistics-challenges-and-outlook/.9 Commercial Café, Commercial Listings Palo Alto, accessed February 7, 2024, .
City of Palo Alto 12
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 9: Office Vacancy Rate (2014 Q1 to 2024 Q1)Comparison with Peer Cities
Similar to Palo Alto, the peer cities show increases in office vacancies post-
COVID-19 pandemic. Detailed graphs of these trend comparisons can be
found in Appendix B.
The vacancy square footage and the trend of increases in vacancy in
the Third Street Promenade area is similar to Downtown Palo Alto
but the vacancy rate is higher. For 2024 Q1, it is 27.1 percent for the
Third Street Promenade area compared to 16.5 percent in
Downtown Palo Alto.
Santa Monica Main Street also experienced a remarkably high
vacancy rate of 29.9 percent, as of 2024 Q1.
The vacancy rate has increased significantly in Los Altos since peaking
in 2021 Q3 at 24.3 percent to 13.7 percent in 2024 Q1. This is besides
the fact that the rents in Los Altos are comparable to California
Avenue and El Camino Real while being lower than Downtown Palo
Alto. This is also despite the fact that retail areas in Palo Alto have
closer proximity to regional transit facilities compared to Los Altos.
However, it should be noted that absorption of one office space in
Los Altos could result in a significant drop in the vacancy percentage
due to significantly lower overall inventory, compared to the
Downtown Palo Alto and California Avenue areas.
City of Palo Alto 13
PALO ALTO RETAIL REVITALIZATION STUDY
Best Practices
The best practices summarized here are derived from respected leading
industry resources such as the Urban Land Institute and the National League
of Cities. In addition, several jurisdictions in the state (Santa Monica, Santa
Cruz, and San Diego) that have adopted retail revitalization plans and
strategies were also studied. Some of these may already be in practice in
Palo Alto. The Recommendation Section provides detailed suggestions
specific to Palo Alto
services, museums/galleries, health/fitness, performing arts,
commercial recreation, and entertainment.
6. Create a parking relief program for businesses that have outdoor
dining, are undergoing a change of use, or currently have off-site
parking conditions.6. Encourage Complementary Uses. Non-retail complementary uses
such as professional services and restaurants attract and allow
people to stay in the area for longer and, in turn, support retail sales
and street and district vitality.
7. Designate strategic zones with clear signage for rideshare uses and
curbside delivery (e.g., Lyft, Uber, taxi).
8. Provide short-term and long-term bicycle parking at key locations
throughout the commercial district.7. Encourage New Office and Residential Uses. Office workers create
a demand for retail along the street, especially in the morning and
at noontime. Residential development in and adjacent to the
commercial areas also generate customers, pedestrian activity, and
retail demand. Office uses generate significantly more persons per
square foot than residential uses.
These best practices and principles are summarized and organized into the
following key categories:9. Use technology to provide parking signage indicating "where" and
"how many" spaces are available for parking.1. Land Use and Zoning Ordinance
2. Parking and Curb Management
3. Approval Process
Approval Process
Time, fees, complexity, and clarity/certainty of the approval process play a
vital role in a developer's or business owner's decision to locate or invest in
a particular area. Below are some best practices for improving the process
and creating a business-friendly environment in a community.
8. Extend Retail and Restaurant Hours. Longer hours equal strongerLand Use and Zoning Ordinance sales, and strong sales define a successful shopping street.
1. Attract and Retain People. Allow land uses that can attract and 9. Concentrate Retail on Blocks and Nodes. Shoppers typically willretain people throughout the day and evening hours.walk for only three or four city blocks.10 1. Work with property and business owners and applicants to allow
and make changes of uses and tenant improvements quickly to
adapt and respond to changing market demands.
2. Prioritize People. Focus longer-term land-use code adjustments on
efforts that put people's use (not vehicles or parking) of public space
first.
10. Create Attractive Spaces. Incentivize privately owned public spaces
and improve physical access to the public space.
Parking and Curb Management 2. Amend use regulations, development standards, and approval
processes to earn a reputation for quick, efficient, predictable, and
business-friendly service and approvals.
3. Create Flexible, Permissive Zoning. Eliminate restrictive zoning for
potential low-impact uses of vacant spaces and reduce regulatory
hurdles.
While the focus of this report is not specifically on parking ordinance reform,
parking is closely related to land use and retail recovery. Below are some
best practices for creating healthy commercial areas.3. Ensure that the business licensing and permitting process is not an
impediment to good retail activity.
Fill ground-floor vacant spaces by allowing the use of space
to incubate small or start-up businesses.1. Create a program to provide credits for municipal parking spaces to
reduce the overall development burden.Allow pop-ups, incubators, and temporary uses that can
operate with short-term leases.
4. Ensure that zoning regulations are designed with flexibility in mind
and that changes can happen administratively during times of need.2. Preserve on-street spaces for customers.
Allow artisan shops that create and sell products on site
such as handmade candle shops, hand crafted jewelry and
so on.
5. Allow most uses and improvements without discretionary approval
(i.e., by right or ministerially). Retail and supportive uses should be
allowed by right, without discretionary approval, to the extent
possible.
3. Promote shared parking that can support multiple different uses
throughout the day.
4. Create Certainty with Objective Standards. Replace vague and 4. Adjust (reduce) minimum requirements to better align with
demand and reduce construction costs for developers. Minimums
should be less than the actual demand.
subjective standards with objective development standards.6. Consider reducing or waiving fees associated with building
construction or redevelopment in the focus area.5. Include Active Use as a Part of Retail Use. Broaden the definition
of retail to include active uses—those that generate activity on the
street, such as eating and drinking, hotels, entertainment, personal
5. Create a flat rate for parking regardless of use to provide flexibility
in the change of use.
10 Urban Land Institute, “Ten Principles for Rebuilding Neighborhood Retail,” January 1, 2003, accessed
February 7, 2024, https://americas.uli.org/ten-principles-for-rebuilding-neighborhood-retail-2/.
City of Palo Alto 14
PALO ALTO RETAIL REVITALIZATION STUDY
AB 2097 Implications and Recommendations
The purpose of this portion of the study is to review the implications of
recently adopted Assembly Bill (AB) 2097 on the City of Palo Alto’s parking
regulations and management strategies, the adequacy of the existing
parking inventory and potential impacts on retail establishments. The full
AB 2097 analysis is contained in Appendix C.
Figure 10: AB 2097 Relief Areas
Effective January 1, 2023, AB 2097 prohibits public agencies from imposing
minimum automobile parking requirements on most types of development
within a half-mile of a major transit stop. However, this reduction does not
apply to projects that designate any portion of the project as a hotel, motel,
bed and breakfast inn, or other transient lodging use, or reduce parking
spaces designated for this purpose.
Exceptions are allowed in limited circumstances. The bill authorizes a city,
county, or city and county to impose or enforce minimum automobile
parking requirements on a housing development project if the public agency
makes written findings, within 30 days of the receipt of a completed
application, that not imposing or enforcing minimum automobile parking
requirements on the development would have a substantially negative
impact, supported by a preponderance of the evidence in the record, on the
public agency’s ability to meet its share of specified housing needs or
existing residential or commercial parking within 1/2 mile of the housing
development.
Figure 10 identifies the areas of Palo Alto that are affected by and subject
to the provisions of AB 2097.
There are approximately 6,677 public parking spaces across the four retail
districts in the study area. Of these, 2,125 are on-street spaces and 4,552
are off-street public parking spaces within the public parking lots and public
parking garages that existed at the time of this study. Based on the limited
data received from the City as well as on interviews with the City’s Office of
Transportation and stakeholders, there seems to be surplus parking in the
commercial core areas of the City, especially the Downtown and California
Avenue areas. The stakeholders did not express any concern related to
availability of parking. However, as development occurs, the adequacy of
the existing parking supply may be challenged from new or intensified land
uses without construction of new on-site parking due to AB 2097.
City of Palo Alto 15
PALO ALTO RETAIL REVITALIZATION STUDY
Below are some of the recommended strategies from the AB 2097 parking
and retail impact assessment.
Figure 11: Commercial Zoned (CD-C) Parcels Outside AB 2097
Impacted Areas- Downtown/University Ave
1. Extend AB 209 to Entire CD-C Zone for Equity. Within Downtown,
there are 16 parcels in the CD-C district on University Avenue that
lie just north of the half-mile radius from a high-quality transit stop
that are not exempted from the parking requirements by AB 2097.
Unless the provisions of AB 2097 are extended, these parcels will
remain subject to minimum parking requirements and the
Commercial Downtown Assessment District standards of 18.52 of
the PAMC. To ensure equitable development conditions for all
parcels in the Downtown area, it is recommended that uniform
regulations be applied to the entirety of the CD-C districts in the
Downtown area.
2. Allow Retail Flexibility Without Requiring Additional Parking: In
retail areas outside the influence of AB 2097, the conversion of
retail space to other retail or retail-like uses (for example, changing
a boutique store into a restaurant or art gallery) should not impose
restrictions on developers to provide parking in accordance with the
converted uses, as long as the square footage is not increased.
3. Parking Management & Optimization. Without the ability to
require on-site parking or require in-lieu payments toward public
parking, the City will need to focus primarily on management and
optimization of the existing parking supply. An optimal parking
threshold for commercial areas is typically around 85 percent
occupancy11. Beyond this point, parking availability becomes
strained, leading to inconvenience for visitors and potential
business impact. To address this, the City should actively monitor
and manage parking utilization. At some point, future growth and
intensification may challenge the adequacy of the existing supply.
4. Develop Ordinance to Unbundle Parking. The city should update
the parking ordinance to include provisions of AB 1317 that will go
into effect on January 1, 2025, which requires developers to
unbundle parking from residential developments. The benefits of
unbundling include more efficient use of existing parking spaces,
cost savings for non-drivers, and clearer market valuation of land
used for parking. It is especially helpful in areas not subject to
minimum parking requirements.
11 Shoup Donald, 2011, The High Cost of Free Parking, Routledge
City of Palo Alto 16
PALO ALTO RETAIL REVITALIZATION STUDY
5. Create Employee Parking Plan and Program. Business owners
should encourage employees to not park in the most convenient
customer parking spaces.
8. Enhance City’s Transportation Demand Strategy (TDM) Strategy.
The City has an ordinance granting the Planning and Development
Services Director the authority to require TDM strategies. However,
a developer’s influence is limited to the site. The City can be more
effective in implementing area-wide TDM strategies such as public
transit improvements, pedestrian-friendly infrastructure, and
promotion of active transportation and mixed-use development as
suggested by the Comprehensive Economic Development Strategy-
Guiding Principle 2.
10. Improve Signage and Wayfinding for Parking: Effective signage
ensures visitors can find their way without confusion. Palo Alto has
signage directing to the parking areas, but they don’t provide
information on parking availability in particular garages or lots or
directions to garage or lot. The existing APGS and emerging
technologies can be integrated with digital signage at strategic
locations, which can provide real time information on parking. This
will reduce the time spent to find parking in the retail areas.
6. Pursue Shared-Use Agreements. The City can facilitate a shared
parking between landowners by creating ready to use shared
parking agreements. The City can also enter into parking
agreements with the landowners to use private parking during
hours that it typically goes unused. These areas can be advertised
on-site and, on the website, as available parking spaces during
certain times of the day.
11. Curb Space Management. Increasing the opportunity to walk and
bike to various locations and to complete short distance trips can
alleviate pressure on parking. Adopting a micromobility program for
shared bicycles and/or scooters and providing adequate curb space
may also reduce the need for car for shorter trips.
9. Explore Emerging Technologies. As innovative technologies
emerge, it is advised that the City explore and implement
technologies that can deliver real time information via app or
website. These can be applicable to parking garages, lots and on-
street parking spaces and can help patrons find and receive
directions to the nearest available space.
7. Reevaluate City’s Paid On-Street Parking Program. The City could
implement incremental increase in rates instead of a flat $25 per
day for public parking garages and lots12. The City could also
evaluate implementing a paid on-street parking program instead of
moving the vehicle every
threshold is reached.
2 hours when a parking utilization
12 Parking Work Plan, https://www.cityofpaloalto.org/Departments/Transportation/Parking/Palo-Alto-
Parking-Action-Plan/Parking-Work-Plan, Accessed April 22, 2024
City of Palo Alto 17
PALO ALTO RETAIL REVITALIZATION STUDY
Zoning Analysis and Recommendations
Zoning Review and Comparison RECOMMENDATION 1.1 laundry and cleaning; art and dance studios; fitness or exercise studios, and
similar uses; learning centers.]The current state of the code suggests that a comprehensive review,
revision, and update is warranted to ensure the code functions efficiently,
equitably, and as intended.
A detailed review of the Palo Alto Zoning Ordinance was conducted to
review the permitted uses, development standards, and procedures. This is
documented in Appendix D. The purpose of the analysis is to identify likely
and potential constraints and opportunities to improve the health and
function of retail uses and the main commercial retail and commercial
corridors and provide recommendations for improvement. In addition, the
analysis and recommendations are derived from the interviews with
stakeholders, including developers, the Chamber of Commerce, and
business owners (refer to Appendix A). Following the interviews with the
cities of Santa Monica and Los Altos, the zoning for all commercial areas was
reviewed and compared with zoning for the Palo Alto study areas. Appendix
D contains excerpts and notes on the most relevant portions of the code.
CD-N Zone: "A conditional use permit is required for the following uses when
fronting on University Avenue: (A) Fitness or exercise studios, and similar
uses; and (B) Learning centers intended for individual or small group
settings."Examples of some symptoms and characteristics that suggest
comprehensive review and update are warranted include:
a
CS Zone: "A conditional use permit is not required for medical office, or
commercial recreation uses up to 5,000 square feet of gross floor area, with
the following exceptions, for which a conditional use permit is always
required: (A) medical office fronting on California Avenue and in the
Midtown Shopping District; (B) commercial recreation uses fronting on
California Avenue and in the Town and Country Village Shopping Center."
a. Many and overlapping combining districts.
b. Complex listings of permitted uses with multiple exclusions,
exceptions, and footnotes
c. Inconsistent language and many variations of similar
regulations
d. Reliance on subjective standards, findings, and determinations
e. Complaints and frequent requests from applicants
f. Lengthy processing times, difficult implementation, variable
application and interpretation, and errors
CC, CC(2) Zones: "A conditional use permit is required for the following uses
when fronting on California Avenue: (A) Fitness or exercise studios, and
similar uses exceeding 1,800 square feet in gross floor area; and (B) Learning
centers intended for individual or small group settings. A conditional use
permit is required for fitness or exercise studios and similar uses exceeding
1,800 square feet in gross floor area in Town and Country Village Shopping
Center."
Zoning Recommendations
The analysis resulted in the following findings, observations, and
recommendations.
It is recommended that the code be reviewed and revised to make it more
user-friendly. In an effort to understand and evaluate the use regulations
and development standards, comparative use tables for the commercial
districts and the combining districts were created. The tables make it easier
to see which uses are permitted in each district and improve the overall
understanding of the zones through the comparison of districts.
1. Conduct a Comprehensive Zoning Cleanup
of Mature, Complex Code.CD-C, S, N Zones: "A conditional use permit is not required for commercial
recreation uses up to 5,000 square feet of gross floor area, with the following
exceptions, for which a conditional use permit is always required: (A) medical
office fronting on University Avenue; (B) commercial recreation uses fronting
on University Avenue."RECOMMENDATION 1.2The Palo Alto Zoning Ordinance is complex and robust. It is a mature code
that reflects decades of cumulative modifications to address a variety of
concerns. However, the overall structure and organization have grown to be
intricate and complicated. As a result, it is difficult, even for a seasoned
professional planner, to navigate, understand, and implement the many
overlapping layers, sections, and exceptions, and unique, narrowly defined,
and targeted provisions. This is common with older codes. They accumulate
many targeted amendments and revisions over the years. This detracts from
the original organization and can impact the overall functional integrity. The
Zoning Ordinance is particularly complex with respect to the regulation of
retail and office uses. It appears that numerous individuals, specific
amendments to address many concerns over the years may now have the
cumulative effect of overregulating and preventing the healthy reuse and
improvement of sites and buildings.
The code could be made more user-friendly by integrating the use and
development standards of the combining districts into the use and
development standard tables.CN, CC, CC(2), CS Zones: "Medical, Professional, and Business offices shall
not be located on the ground floor unless any of the following apply to such
offices:Below are examples of some of the subtle differences and restrictions on
personal service uses that warrant evaluation of their need and effect on
protecting or restricting a healthy commercial corridor:"Occupy a space that was not occupied by retail services, personal services,
eating and drinking services.
R Retail Shopping Combining District: Permitted: "Personal services, except
the following on California Avenue: beauty shops; nail salons; barbershops;
laundry and cleaning services as defined in Section 18.04.030(114)(B);
fitness or exercise studios exceeding 1,800 square feet in gross floor area;
and learning centers intended for individual or small group settings."
"Are located in new or remodeled ground floor area built on or after March
19, 2001, if the ground floor area devoted to housing, retail services, eating
and drinking services, personal services."
These uses are typical and necessary components of a healthy commercial
corridor. The complexity of the many variations and different applications
suggests that these standards were created and adopted independently and
may not be necessary or are unnecessarily restrictive.
GF Ground Floor Combining District: Permitted: "Personal services, except
for parcels with frontage on University Avenue, where uses defined in
Section 18.04.030(114)(B), (G), (H), and (I) are not permitted." [Prohibits:
City of Palo Alto 18
PALO ALTO RETAIL REVITALIZATION STUDY
RECOMMENDATION 1.3 opinion and grievance could be favored or have a greater influence on the
decision than compliance with objective standards of the Zoning Ordinance.
Combined with the many subjective standards, the approval process for
even simple projects can easily become costly and cumbersome. In addition
to the cost and risk to project applicants, this can dramatically increase the
workload and resources on behalf of City staff as well as the PTC, City
Council, and supporting staff.
otherwise be preferable to extensive and prolonged vacancies that detract
from and impact the overall health and vitality of the larger district.A comprehensive review can streamline and standardize the standards
where possible and reevaluate the need and effect of the precise
standards and whether they are consistent with the broader goal of a
healthy commercial corridor.
As noted in the 2023 Comprehensive Economic Development Strategy,
there is a large amount of vacant commercial and retail space that exceeds
the current and foreseeable market demand for retail. Large proportions of
this space will remain vacant unless and until it is allowed to be converted
to uses other than retail. By preventing the conversion of former retail
spaces to non-retail uses, the RPO has contributed to the increasing
vacancies. Because the RPO is applicable to all retail uses citywide, the
restrictions also have the effect of interfering with the natural selection and
adaption of the market. It treats all retail areas as equally important. As a
result, there is no ability to adjust with and adapt to the market. Instead of
allowing the market to concentrate the limited demand for retail on core
areas of strength, the RPO effectively dilutes the limited retail demand
citywide.
2. Create Streamlined and Predictable
Approval Processes RECOMMENDATION 2.1
The approval processes should:
1. Create a ministerial approval process for certain projects (e.g., minor
tenant improvements, sign permits, minor changes of use, expansions,
or additions).Where possible, it is desirable to allow project approvals through a
ministerial, non-discretionary process subject to compliance with objective
standards. This saves time and money for applicants and staff and enables
timely improvement and investments in private property and the public
realm. Discretionary approval is necessary and appropriate where projects
have unique features and circumstances that are beyond purely objective
standards. In these cases, the decision-making authority should be kept at
the professional staff level to the extent possible. Approval by the City
Council should generally be limited to projects that involve policy and
legislative matters such as general plans, specific plans, or zone changes,
amendments, or deviations.
2. Keep the majority of typical discretionary approvals at the staff or
Planning and Development Services Director approval authority.
3. Limit projects that require City Council approval to those that involve
policy or legislative changes or formal appeals to the Planning and
Development Services Director's decision.
Further, it has been noted multiple times in interviews with property owners
and managers that the RPO (and the limitations on the creation and
conversion to office uses) has created traps for property owners. Once a
retail use is established, the property is effectively locked into only that
retail use. This dramatically limits the ability of the property owner to
manage and market the property and adapt to market conditions. This trap
may have the unintended consequence of discouraging establishment of
new retail uses for fear of the inability to ever change back to another use—
at least without great difficulty, time, and cost.
3. Limit the Retail Preservation Ordinance
(RPO) (18.40.180).The Palo Alto Zoning Ordinance allows for approval of many projects by the
Planning and Development Services Director. This is to be commended as
this approach can significantly shorten the approval period and reduce
processing costs. It also has the benefit of avoiding or minimizing
politicization of a particular project and decisions that are based on anything
other than the objective merits of the project. Keeping the approval decision
with professional staff and subject to objective standards and procedures is
preferable for most projects.
It is essential that restrictive regulations have standards and procedures to
obtain relief for hardships. The standard for relief of this section allows
waivers based on economic hardship. However, the current standard is
among the highest possible and most difficult thresholds to achieve—an
unconstitutional taking and deprivation of all economic value.
This section of the Zoning Ordinance is an example of the complexity and
extremely strict nature of the zoning regulations. It appears that the effect
of the regulations, standards, and process may, contrary to the implied
intent of the regulations, actually contribute to the erosion and decline of
the health of the prime retail corridors. While regulations are necessary and
can create great places and value, they also often have unintended
consequences. They need to be evaluated periodically to ensure that they
continue to function as intended.
This waiver threshold is disproportionate to the perceived potential threat
of allowing non-retail uses on the ground floor. It implicitly favors vacant
former retail space over non-retail use.
However, every approval by the Planning and Development Services
Director can be elevated to the City Council. While this is typical in the case
of a formal appeal of a decision, the Palo Alto Zoning Ordinance encourages
this elevation with a simple request from any party. This is allowed by
Planning and Development Services Director decisions on relief from the
Retail Preservation Ordinance (18.40.180[c][3]) and other normal staff
approvals (18.77.060[c-f]).
Change among ground floor and retail and similar uses is common and a
necessary part of a healthy commercial corridor. Without change, there is
less investment and updating of commercial spaces that typically occurs
with new tenant improvements. As noted, the nature of retail has been
changing, which has increased turnover and vacancies of many retail spaces
and commercial corridors. The COVID-19 pandemic accelerated some of the
shift to e-commerce and led to the failure of many retail and other
commercial businesses. The RPO regulations appear to have contributed to
the increasing vacancy rate by preventing alternative uses, which would
RECOMMENDATION 3.1
This standard should be reconsidered. A lower and easier threshold or
otherwise more permissive standards based on a simple finding of
practical difficulty and/or economic hardship would help increase the
occupancy of vacant former retail spaces, which would contribute to the
overall activity and vitality within the corridor.The process requires notification of all neighbors within 600 feet of the
project and a hearing and recommendation by the Planning and Section 18.40.180(c) Waivers and Adjustments; and Exemptions for the
RPO should be revised to delete the unconstitutional taking of all
economic value standard of subsection (A) Economic Hardship in favor of
the practical hardship standard of subsection (B) Alternative Viable Active
Transportation Commission (PTC). The PTC recommendation is forwarded
to the City Council for a final decision. This adds considerable time, cost, and
risk to every project. This process appears to create an environment where
City of Palo Alto 19
PALO ALTO RETAIL REVITALIZATION STUDY
Allow non-retail uses:Use. Further, it is recommended that subsection (B) be amended to delete
the exception of the applicability to the Ground Floor (GF) and Retail (R)
combining districts to allow Alternative Viable Active Uses in the
Downtown/University (GF) and California Avenue (R) areas.
balance of the City will allow the conversion of excess retail space over
time, as well as a concentration in the Downtown and California Avenue
areas. The changes should be clearly communicated with the business and
property owners. The effect of the changes should be monitored to
evaluate whether the focused RPO is having the desired effect.
In back office, not street-facing locations (i.e., behind retail or store
fronts)
On side streets, off University and California AvenuesParallel revisions are recommended for Section 18.30(A).070 Waivers and
Adjustments applicable to the R combining district. Section 18.30(C)
Ground Floor (GF) Combining District Regulations does not have any
waiver or adjustment provisions. It should be amended to also have a
practical difficulty standard as recommended for the RPO and R combining
district.
The relief and waiver provisions of the RPO and R and GF combining
districts should be eased to be based on achievable objective standards,
to keep the decision-making authority at the Planning and Development
Services Director level (unless formally appealed), and to allow the
practical difficulty standard of the alternative viable active use waiver
option.
When vacancies exceed threshold (by percentage and/or duration)
E.g., when vacancies exceed 10% in district for more than
12 months.
Subject to limits (concentration, size, proximity), e.g.:
Minimum 25% ground-floor commercial (Palo Alto Mixed-
Use standards)
The alternative waiver option requires the applicant to demonstrate
standards that are purely within the subjective determination of the City
and potentially impossible, and are at least very costly and difficult, to
prove:
Maximum 15% of total floor area (Town & Country office
standards)4. Allow Non-retail Uses on Ground Floor with
Limitations.Maximum 30% of all street frontage within 300-foot radius
(San Francisco)
"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 Maximum 50% of street frontage per building > 100-foot
frontage (Thousand Oaks)The proposed use will encourage active pedestrian-oriented
activity and connections."The Ground Floor (GF) and Retail (R) combining districts in the
Downtown/University Avenue and California Avenue core commercial
areas, respectively, add a level of complexity and regulation that may not
be necessary. The extensive and persistent ground-floor vacancies in these
areas suggest that alternatives or modifications to the restrictions may be
appropriate. The overall objectives and outcomes are to reduce vacancies,
increase occupancy, foot traffic and vibrancy.
Increase fitness, spas, exercise without a CUP from 1,800 to 3,000 square
feet to match the industry average!The subjective, uncertain, and expensive waiver process is likely to deter
many potential applicants from attempting the waiver or to give up before
obtaining a decision. This has a chilling effect on the marketplace and
contributes to a negative reputation for the City. This is particularly true for
local, small, and sole proprietor uses that do not have the depth of resources
and expertise to "fight City Hall."
Allow other viable active uses without a CUP:
Examples: pet grooming, beauty shops, nail salons, barbershops,
small learning centers, day care
Medical office with retail component, lifestyle, health services
Several strategies could be employed to allow more retail-supportive uses
on the ground floor, such as personal service uses and small professional
offices that bring employees and generate customers and foot traffic in the
area to the benefit of overall activity and vitality. This objective could
include a modification to the definition of “retail and/or retail-like” to allow
a broader range of uses. The list of permitted uses in the relevant zone and
combining district use tables can be amended.
If necessary, require a CUP for certain uses in excess of a maximum size (Palo
Alto for offices, commercial recreation; CN district uses)Such restrictions appear to favor the national franchises and "formula retail"
that Palo Alto has determined are problematic and should be restricted but
are among the few that can afford to navigate the code and approval
process. It is important to recognize that Palo Alto, while a strong and
desirable market, is very much part of the larger competitive market.
Existing and prospective businesses have the ability and choice to locate in
other cities where the regulatory environment is easier and more
welcoming and supportive of their large and risky investments. Many
suitable and desirable retail and other uses, even if allowed, may avoid
locating in Palo Alto based on the knowledge of the code, complex process,
and high costs and frustration that inevitably are experienced over the life
of use.
RECOMMENDATION 4.1
Amend the zoning code with one or more of the above methods to allow
more retail-supportive uses on ground floor. The selected methods should
be part of a coordinated package of amendments.
There are many methods and mechanisms to manage such uses, if
necessary, to ensure a balance of compatible and complementary uses and
to preserve and encourage active street frontages. The following are
examples of potential zoning strategies to permit non-retail or retail-like
uses:
5. Repeal the Office Conversion and
Construction Limitations.
Amend the definition of “retail-like” to include the following performance-
based uses: “commercial uses that are accessible to the general public,
generate walk-in pedestrian clientele, and contribute to a high level of
pedestrian activity.”
RECOMMENDATION 3.2
Consideration should be given to whether the RPO is beneficial or should
be modified or repealed. As an initial step, we recommend that the RPO
be limited to the essential core retail areas of businesses fronting on
Downtown’s University Avenue and California Avenue. Removal from the
There are two provisions of the code that limit office construction:
18.40.210 Annual Office Limit and 18.18.060 Development Standards for
City of Palo Alto 20
PALO ALTO RETAIL REVITALIZATION STUDY
the Downtown Commercial (CD) District. These are notable in their own
right, but also as they interact with the RPO.
facing façade to ensure a percentage for retail and retail-like uses. Ground-
floor office uses that do not front on University or California Avenues, i.e.,
behind retail frontages, should be allowed. There should be no limit to
upper-level office uses. Any limitation should be proportionate to the size
of the site or building to ensure an equitable impact. Section 18.40.210
Annual Office Limit should be revised to replace the unconstitutional
taking of all economic value standard of (e) Economic Hardship Waiver or
Adjustment, with a practical difficulty standard like that recommended for
the RPO, R and GF combining districts.
otherwise. The need to obtain a CUP is already a high standard and barrier,
but the required findings are again subjective, numerous, and must all be
met. Such standards make it easy to deny and prevent any use or applicant
for nearly any reason or perceived objection by staff or City Council (Section
18.76.015):
Section 18.40.210 limits the conversion of existing non-office uses to office
uses to 50,000 square feet per year. The annual limit serves as another
constraint to the loss or conversion of retail space and appears to lessen any
need for the RPO. Office workers represent a major portion of the retail
customers, sales, and market base. The dramatic loss of office uses, and
reduced occupancy and days workers spend in the office since COVID-19 has
had a proportionately significant reduction on retail demand in Palo Alto.
While there has been some recovery, the long-term trend and reduced
office occupancy is expected to persist for the foreseeable future. Office
vacancy rates in Palo Alto have increased dramatically since COVID-19 to
over 556,000 square feet, an average of 17 percent of all office space in Palo
Alto. The total vacancy is project to increase over the next five years
according to CoStar.
"A conditional use permit shall not be granted in an R-Combining
district for a formula retail business, or a beauty shop, nail salon,
barbershop, or financial services use, unless it is found, in addition
to the findings required by section 18.76.010, that:
"(1)The retail or personal service business will offer
merchandise and/or services that meet the underserved needs of
the City's residents and visitors.6. Relax the Formula Retail Restrictions.
"(2)The type of retail or personal service business will
enhance the balance and diversity of businesses in the district and
in the City as a whole.The rationale for limiting “formula retail” on the basis of the franchise and
standardized merchandise and branding on California Avenue is not clear
and should be stated explicitly. The assumptions and perceived threats of
ten or more of the same uses, standardized merchandise, décor, color
scheme, uniforms, façade, and trademark use has been evaluated for
current relevance and necessity. Research of and interviews with peer cities
and business and property owners indicated only limited concern over such
uses and a desire to limit and relax the formula retail restrictions. It was
noted that formula retail or franchise businesses often represent and bring
new innovations and trends and foot traffic that benefit other businesses in
the vicinity.
The perceived threat of office outcompeting and converting ground-floor
retail spaces to office uses, which was the basis of the regulation, is
extremely low and effectively no longer exists. Conversion of vacant,
formerly retail ground-floor spaces to personal service and office uses that
generate customers for nearby retail is preferable to extensive and
persistent vacancies that create a sense of failure and blight that remaining
retail uses must combat. Occupancy of the vacant office spaces should be
encouraged. Conversion of excess vacant retail spaces, particularly by uses
that generate potential customers and pedestrian foot traffic, and those
that do not front on University or California Avenues, should be allowed.
"(3)The retail or personal service business will enhance
the economic vitality of the district where the business is
proposed to be located and of the City as a whole. In considering
this finding, the director or city council may consider existing
retail vacancy rates within the district and in the City as a whole.
"(4)The retail or personal service business is consistent
with the character of the district where the business is proposed
to be located.
It is also noted that concerns over the impact of a standard and generic
corporate franchise design can be regulated more directly and objectively
through design standards rather than limiting or preventing use on the basis
of the characteristics of formula retail. The regulation appears to prevent
otherwise appropriate and desirable uses and occupancy of vacant spaces
without a clear or superseding public benefit.
"(5)The design of the retail or personal service businessIt appears that Section 18.40.210 could be repealed as the conditions and
circumstances and rationale for its existence no longer exist.will be compatible with the architectural and aesthetic character
of the district where the business is proposed to be located."
Section 18.18.060 limits the total amount of office to a total of 5,000 square
feet per site in the CD-S and CD-N zones. The rationale, purpose, and public
benefit of this limitation are not clear. It appears to establish an arbitrary
limitation that may cause more harm than good. This provision is not
proportionate to the size of the site or building—the larger the site, the
greater the constraint and loss of development potential. Further, this
provision appears to apply to all office spaces, both ground floor and upper
floor. Upper-floor office space is supportive of ground-floor retail and other
commercial uses. It is not clear why there should be a limit on an upper-
floor commercial on any given site. Rather, such uses should be encouraged.
While always a best practice and feature of the best land use codes, an
increasing number of cities have initiated the review and revision of their
development codes in recent years to reduce and replace subjective
standards with objective standards and certain and efficient approval
processes. They recognize that such regulations allow and encourage
desirable and necessary growth, as well as a continuous cycle of renewal
and improvement, and are important to the overall health of the City.
RECOMMENDATION 6.1
Consideration should be given to modifying or eliminating this restriction.
Any restrictions should be demonstrated to be the minimum necessary to
advance a legitimate public purpose. It is recommended that the threshold
to qualify as a “formula retail” use be increased from 10 to 50 such
businesses. It is also recommended to limit formula retail to restaurant
uses. Another option the City may consider is to limit the number of
formula retail establishments in certain areas. This method can ensure a
balance between formula and non-formula uses.
RECOMMENDATION 6.2
The Palo Alto Zoning Ordinance and existing and future property owners,
businesses, and uses would benefit from objective development standards
and a streamlined approval process program.RECOMMENDATION 5.1
The purposes, assumptions, and impacts of these provisions should be
evaluated. If any limits are found to be necessary, they should be designed
to minimize the restriction to the extent possible. They should only apply
to ground-level office spaces, such as a maximum percentage of the street-
Similar to the waiver provisions for the RPO, the code assumes that formula
retail and certain other personal service uses are detrimental unless proven
City of Palo Alto 21
PALO ALTO RETAIL REVITALIZATION STUDY
RECOMMENDATION 7.2
Reduce Minimum Requirements
and California Avenues as well as portions of El Camino Real. This requires
Palo Alto to change its approach to parking in these areas. It will require a
change from a regulatory approach to provide adequate parking to the
active management and optimization of existing public and private parking
spaces to meet the existing and projected long-term growth and parking
needs in the affected areas. The areas not directly affected by AB 2097 and
still subject to minimum parking requirements should still be evaluated for
the parking relief and modifications described in this section.
7. Ease the Parking Regulations.
A parking use survey and approach should be evaluated to reset standards
to appropriate levels. For example, the minimum of 16 to 30 spaces per
1,000 square feet of gross floor area for eating and drinking services is
punitively high. It may be used to effectively prohibit fast-food franchises
and drive-through facilities. These standards are based on the outmoded
concept that restaurants are destination uses that operate and need to be
parked independently of all other uses with no sharing of trips or parking.
This is inconsistent with the actual and preferred operation of most urban
commercial districts and most certainly exceeds actual parking demand.
While not a major focus of this analysis, as a major development cost,
design, and spatial constraint, excess parking supply and excessive
minimum parking standards are among the most common deterrents to a
healthy and vibrant commercial district. Many municipalities continue to
rely on outdated parking standards that, more often than not, were based
on reference to other adopted standards as opposed to actual demand and
occupancy studies. Most standards are also based on low-density suburban
land use patterns, not the more dynamic urban patterns like those in Palo
Alto. The following are a few high-level observations and recommendations
related to zoning code. See Appendix C for more comprehensive analysis
and recommendations.
RECOMMENDATION 7.3
Allow Change of Use
If adequate parking is available in the vicinity of the use, allowing a change
of use for existing spaces without a requirement to provide additional
parking could be considered. Existing buildings and outdoor spaces could be
exempted from providing parking for a change of use.
There are three typical approaches to improving downtown and main street
parking standards:
i. Reduce outdated minimum requirements to require fewer spaces
than the cumulative demand for the district.RECOMMENDATION 7.1
Promote Public Shared Parking Over Off-Street/On-Site Parking.RECOMMENDATION 7.4
Incentivize Priority Usesii. Eliminate minimum parking standards and let business and property
owners provide the parking deemed necessary to support the uses.Private, off-street/on-site parking is the most inefficient type of parking. It
generally is not appropriate for dense, pedestrian-oriented commercial and
mixed-use districts where the majority of properties are developed with
buildings and have little or no room for efficient parking. On-site parking is
least likely to be shared. Shared public parking is most appropriate for such
districts. It allows maximum access, utilization, and effective management
to respond to changing conditions.
Reducing requirements for desired or priority uses like restaurants could be
taken into consideration. Incentives could also be provided, such as
increased credits and/or reductions in minimum requirements for shared
parking.
iii. Establish maximum parking standards to limit and prevent
oversupply and inefficient use of land at the expense of buildings
and uses.
Recently adopted AB 2097 effectively codified these best practices by
eliminating minimum parking requirements within one-half mile of High-
Quality Transit Stop. As discussed in greater detail in Appendix C of this
report, this exemption applies to the core commercial areas on University
City of Palo Alto 22
PALO ALTO RETAIL REVITALIZATION STUDY
a. Retail zones and corridors are not 100 percent retail but rely on
a mix of complementary uses (office, restaurants, personal
services, professional services, residential and retail use). These
uses provide the clientele for retail uses and allow people to
spend time in the commercial areas, in turn supporting retail.
commercial recreation and other uses that create pedestrian
activity.
6. Rescind "Formula Retail" Ordinance on California Avenue.
7. Increase height limits on El Camino Real and in other areas.Stakeholder Interview Summary
8. Restaurant owner could not reduce the square footage from 8,000
square feet to 5,000 square feet.Stakeholder interviews were conducted with developers and the Chamber
of Commerce to understand how the City can support the retail
revitalization efforts in the study area. The stakeholders discussed issues
and recommended changes related to the zoning ordinance, parking, and
administrative processes. Below is the list of stakeholders that were
interviewed.
b. Need to repair and reverse the City's reputation with the
industry (e.g., business/property owners, agents, etc.).
Businesses need predictability, and currently, they don't have
that.
City Permit Process
1. Businesses are avoiding locating to Palo Alto as the permitting
process is lengthy and unpredictable.6. Many retailers in Palo Alto are amazing but often time people are
not aware of events/businesses.2. Difficult to get a permit even for simple changes such as restriping,
signage, and small additions (e.g., 3-6 months to receive a sign
permit – AT&T).
•
•
•
•
•
•
•
Premier Property Management – Jon Goldman, Brad Ehikia
Ellis Partners – Jim Ellis
Thoits Bros., Inc. – John Shenk
Chamber of Commerce – Charlie Weidanz
Performance Gaines – Chris Gaines
Italico – Franco Campilongo
a. Businesses need a large online presence to attract customers.
7. Street closure on California Ave has improved business (up 40
percent). However, several retailers left the area due to street
closure.a. Delay in signage permits can hurt the business even before it
starts.
8. Important to understand customer behavior and how it has
changed over the last four years (2019-2023).3. The determinations of code and process are inconsistent and, at
times, conflicting among the staff.Taste Buds Kitchen – Scott Andersen 9. Window shopping is down, everything is destination based.
a. Need to provide incentives for customers to visit.
4. There is a lack of staff continuity or institutional knowledge.
Discussion Summary 5. Fees are excessive (e.g., conditional use permit $15,000; sign permit
$4,000).10. The City has been very helpful since business operations have
begun, partnering with the City is the most important thing that a
local business can do.
These interviews revealed several issues that the stakeholders viewed as
restrictions or hindrances to development and provided recommendations
to mitigate them. There was a strong consensus on many issues among all
of the stakeholders. These discussions are categorized and summarized
below based on common themes.
6. All permits go through the City Council which takes away power and
undermines staff recommendations/determinations.
11. Times of business activity more inconsistent now, people are not
coming in for lunch anymore from nearby offices.7. Permitting process is not clearly described.
8. There is a stigma against national chains (e.g., Pete’s Coffee), yet
the zoning and process do not make it easy for smaller local
businesses to locate in the City.
12. Disconnect between the businesses that exist and what businesses
are desired (e.g., medical retail/office)General
Retail Preservation Ordinance 9. Difficult to navigate the process as a single business/property
owner.1. Important to create an ecosystem of uses that generate trips and
keep people downtown.1. Rescind ground floor Retail Protection Ordinance (2009, 2017
amendment). It has created the very problems that it was intended
to prevent.
10. Sentiment that City staff are disconnected from or understand the
community they are working in (e.g., live outside Palo Alto)a. Services will drive people downtown.
b. There are fewer workers downtown due to transition to remote
work.11. The process makes it difficult to do any business in/startup a
business in Palo Alto.2. Leave it to the market to thrive, don’t force retail. Focus on the
c. There has been a loss of office space, which is hurting retail.existing retail district.
12. Long permitting processing times (e.g., up to 18 months to get
through the planning process for an event space).2. Need to actively attract and support growth and investment,
renewal and maintenance, and improvement of existing buildings.
3. Ground floor retail restrictions on side streets and blocks away from
the main commercial corridor are not practical as retail will not
locate in these areas.13. Needed a conditional use permit for beer and wine license
($11,000).3. There are significant assets downtown, the loss of retail is not a
physical design issue.4. Code is too rigid, very narrowly defined, and complex. The older
system worked better and allowed for more flexibility.14. Signage permit took longer than demolition and construction
permit for event venue business.4. There needs to be more flexibility in the reuse of ground floor space.
Allowed uses should be flexible to accommodate the changes in the
market in order to reduce vacancies.
5. ‘’The definition of “retail” is too restrictive on use. Expand it to be
more inclusive and nuanced to include uses like personal services,
medical professional/office, spas, fitness, insurance, restaurants,5. Perception of retail in Palo Alto:
City of Palo Alto Appendix A, Page 1
PALO ALTO RETAIL REVITALIZATION STUDY
Parking City Interviews:
Palo Alto and Neighboring Communities
exactly into the existing use categories, including new alcohol services and
pickleball. The City eliminated the restrictions on the number of restaurants
per block on Main Street and expanded opportunities for outdoor dining.1. In-lieu parking fee is a hard cap on any new development or
intensification.The City has traditionally been very restrictive in requiring retail uses on the
ground floor; however, due to the changing market and feedback from the
community, the City has been re-evaluating what mix of uses will work in its
retail areas. This is also in response to an increased focus on housing and
the City’s larger efforts in its Housing Element. The City noted that being
open to a wider mix of uses is important in serving the needs of residents.
To gain a broader understanding of Palo Alto's regulatory provisions and
procedures and to also inform the recommendations, three communities
were interviewed to identify gaps and differences in approaches to retail
development. The jurisdictions were identified during the Planning and
Transportation Committee and stakeholder interviews as flexible and
efficient with permit processing. These include the Cities of Santa Monica,
Los Altos, and Redwood City.
2. Reinstate the California Avenue Parking Assessment District.
a. The City should allow transfer between uses.
b. Can't change uses currently and can't add parking for change in
uses. This is making it difficult to fill the vacancies in the
changing market conditions.
c. The City requires additional parking to comply with parking
requirements. Many/most buildings cover the entire site and
have no space for on-site parking.
Streamlined Permitting
Santa Monica The City eliminated the need for conditional use permits, minor use permits,
and other discretionary approvals for several uses including childcare,
cinemas and theaters, general retail sales (medium size), hotels and motels,
medical and dental offices, food halls, and general personal services, among
others. The City removed the public hearing requirements for a change of
use from a restaurant to a different use. This streamlined permitting
expedites and simplifies the permitting process. This provides certainty and
predictability to existing businesses and prospective businesses considering
locating in Santa Monica. As of July 2023, there are 38 new development
projects in downtown Santa Monica comprised mostly mixed-use and
housing, including affordable housing.
d. Buildings already paid for the parking garages, which were to
support the district. Since it was paid off in 2017 and no longer
charges payment fees, the City has reverted back to requiring
on-site parking to comply. Fees were based on deficiency of
parking. But the developers are not getting credit when
changing uses or adding space.
Making COVID-Related Changes Permanent
The City discussed an extensive list of emergency orders during the
pandemic. These include both planning and building/safety emergency
orders, including time extension on open permits of up to four years. In
October 2022, the City permanently adopted two zoning ordinance
amendments with the intent of reducing regulatory barriers for small
businesses, as described below. The economic recovery ordinance was
extended for five years in September of 2023. In summary, the following
proposed zoning changes focus on the Third Street Promenade area.
e. The City created a parking fee if they cannot provide parking =
$150,000 per space. This is excessive and not affordable.
f. The City moved staff parking from on-street to the garages.
Now customers have to park in the neighborhoods instead of
the garages.1. allowing greater flexibility for restaurants that provide
entertainment within the Third Street Promenade Area District,Communication and Outreach with Business Owners
3. A new, more flexible parking policy is needed as most customers
(office workers, shoppers) are already in the district.
The interviewees discussed the importance of educating the public through
comprehensive, consistent communication and outreach efforts. They
stressed the importance of City staff being a known, visible, and trusted
figure in the community. The City of Santa Monica highlighted a number of
outreach efforts including working with community groups, business
improvement districts, City staff, and City council. Efforts included an “open
for business flyer,” blog, e-mail blasts, broker’s round table event, and a 3-
1-1 system where anyone can e-mail or call with questions. The City offers
online planning services, and virtual counter reviews, and hosts an online
appointment system to increase the number of permitting activities that can
be done online.
2. expanding Alcohol Exemption (AE) permits to additional uses to
further streamline the review of alcohol permits while also
correcting and refining existing AE permit conditions,4. Hard for employees to get permits for the parking garages in
California Ave.3. allowing the Director of Community Development or designee to
consider commercial uses that are not clearly defined in the Zoning
Code,
a. Make it easier for employees who need to park – especially 2+
hours but not all day.
b. Pricing does not make sense for employees to invest in permits.4. allowing a longer term for Temporary Use Permits, and5. No parking issues in California Ave, there is enough parking to
support all businesses and events at a variety of times (for lunch or
dinner, weekends, and during the farmer’s market).
5. allowing outdoor rooftop commercial uses on public parking
structures owned by the City.
Relaxing Restrictions on Uses
The City has extensively documented and advertised these zoning and
regulatory changes on its City website1 and provides comprehensive data
regarding vacancies and employment on the Downtown Santa Monica
website2.
Changes in zoning included allowing a wider variety of uses by right in areas
that were historically more restrictive, including in the downtown and Third
Street Promenade areas. Efforts highlighted by City Staff included allowing
new uses such as pop-ups and creative commercial uses that do not fit
1 City Council Makes Pandemic-Era Zoning Changes Permanent to Support
Business Success in Santa Monica.
pandemic-era-zoning-changes-permanent-to-support-business-success-in-
santa-monica
2 Downtown Santa Monica, Third Street Promenade.
https://downtownsm.com/downtown-data#section-8666
https://www.santamonica.gov/press/2022/10/12/city-council-makes-
City of Palo Alto Appendix A, Page 2
PALO ALTO RETAIL REVITALIZATION STUDY
Interview Questions and Responses focusing on making it a food, art, and entertainment
district/hub.
(~8 million visitors/year prior to COVID, now 4.5-5 million
visitors/year)1. Have you evaluated the impact of COVID and/or online shopping on retail
in Santa Monica?o The City is seeing alcohol licenses being paired with innovative
and creative uses. (e.g. Pickleball).
▪Residential is integrated and embedded in all commercial districts.
6. Are there any restrictions on the usage of ground floor space in the
commercial areas?▪The City started to see the impact of e-commerce prior to COVID-
19.▪The City is focusing on food establishments and assisting
applicants through the permitting process.▪The City has historically been very restrictive on the ground floor
with a focus on retail and restaurant.▪The City created a “Buy Local” campaign in 2010 and increased
messaging during COVID-19 to educate the public on the
importance of supporting local businesses.
•Where and how to allow business to expand into the
right-of-way to not access and circulation issues.▪The City has been rethinking strategy to allow more uses in certain
configurations while still promoting retail and restaurant – the
office is still restricted.Through the campaign the City identified and informed people
which retailers had gift cards and how businesses were
operating during the Holidays.
•Restaurant owners voiced the need for expanded
permanent outdoor space to sustain business.o
▪
▪
The City is trying to be flexible as property owners figure out the
right mix of uses – having the choice is positive for all parties.3. How did the City work with the business owners during the zoning
changes?▪During COVID the City supported businesses through a variety of
strategies which included:The City has utilized interim ordinances as an experimentation to
see how effective/successful an ordinance can be (up to five (5)
years). The economic recovery ordinance was extended for five
years in September of 2023.
▪The City along with Downtown Santa Monica Inc. (Property Based
Assessment District) asked property owners and businesses what
kind of new uses they were interested in and what challenges they
were facing with the permitting process, the City then identified
opportunities on how the emergency orders and interim zoning can
start to address the issues.
o
o
Established pick-up and delivery zones,
Connected business owners with the Los Angeles Small Business
Development Center for education and technical support,7. Have developers used the provisions of AB 2097 in developments for
parking? How is the City ensuring there will be parking for visitors and
residents in the wake of AB 2097?
o
o
Waived fees (e.g. loading and pick-up zones),
Encouraged shopping locally through informing customers
which businesses support gift cards during Holiday shopping,▪Held collective meetings with Business Improvement District (BID)
leaders (Main Street, Montana Ave, and Pico Boulevard) to talk
through zoning changes.
▪
▪
▪
State law has changed the City’s parking practices since a majority
of the City exists within ½ mile of a major transit stop.▪The City can track online versus in-store sales reports through a
sales tax report and can track by geographic area and by sector.Before state law the City eliminated minimum parking requirements
for a majority of active uses Downtown in 2017.▪
▪
The City created an “Open for Business” flyer.o Art gallery pivoted to online, had high sales, and started artists'Implemented a 3-1-1 system for businesses to ask questions to City
staff regarding zoning.
talks and other events/features they didn’t have before.The City has major parking investment in the form of ten (10) City-
owned public parking structures in the Downtown District – “well-
served to over-served.”
o The city has anecdotal data that shows an increase in sales
activity but is hard to isolate.4. What types of metrics does the City utilize to track changes in business?
▪The City tracks occupancy rates and pedestrian counts in
association with Downtown Santa Monica Inc. (see Downtown
Santa Monica data below)
2. What, if any, efforts did you undertake to preserve retail as a response
to COVID-19?o Parking structures were funded through bond financing in the
70’s – all but one (1) are paid off.
▪The City passed several emergency orders during the pandemic
related to both planning and building and safety.o Parking structures were funded by revenue generated by
parking and transportation impact fees (in-leu fee for
businesses) – the City has since eliminated this impact fee.
▪The City also monitors sales tax data and business license permits.
5. Does the City allow residential Downtown or in other commercial
districts?o The City provided time extensions on open permits – up to 4
years in some cases.o
o
Parking structures have active ground floor retail space which
the Economic Development Department manages (3 tenants) –
provide revenue to the City.
▪Downtown is a true mixed-use district – residential is permitted
everywhere but particularly seen from 2nd Street to 7th Street.o The City allowed more uses to be permitted by right in the
Downtown and Third Street Promenade areas.
▪Several current Downtown housing projects (thousands of units)
are in development to create a “24/7 community.”
The city is working to bring in a rooftop cinema company to
lease the top floor of one of the parking garages (made possible
by the interim temporary use ordinances).
▪Allowed flexibility for creative and temporary uses that
don’t fit the prescribed use categories in the Downtown and
Third Street Promenade.o Downtown previously saw affordable housing and now a trend
to mixed-income housing.▪Positive feedback from stakeholders resulted in the interim ▪The City has no parking requirements for businesses going into
existing footprints.ordinances becoming permanent – codified in August 2023.Change in demand in the Downtown to more local serving useso
like restaurants – previously tourism drove development trends The City prefers that there is no more parking built in the
Downtown, they would like the business to invest in other ways.
o One block in the Third Street Promenade had high vacancy
rates, so the City has loosened the use restrictions – they are
o
City of Palo Alto Appendix A, Page 3
PALO ALTO RETAIL REVITALIZATION STUDY
o In terms of new mixed-use housing development, the City is
seeing both zero (0) parking and proposed projects with parking
– Projects tend to be dependent on lender and financing
strategy to make the project marketable.
2. What, if any, efforts did you undertake to preserve retail as a response
to COVID-19?
5. Is change of use by right or do you require discretionary approval?
▪
▪
It is by right unless it’s a major tenant improvement (i.e. structural).
▪
▪
▪
Small non-residential footprint, emphasis was focused on
restaurants.Only in rare instances are CUPs used, it’s either allowed or
prohibited.
o
o
The City has a cap on parking in the Downtown that can’t be
exceeded.Los Altos has an active Chamber of Commerce that supports and
works with businesses.▪The City has an online submittal process and a change of use permit
can be processed in a couple of days – everything is pretty
streamlined.The City has worked with developers to look at shared parking,
shared mobility programs, bike parking, EV charging, carshare,
automated driving companies (Waymo), and the integrations of
the bike infrastructure as an alternative to parking.
Los Altos Village Association (LAVA) worked with downtown
businesses to facilitate resiliency during COVID.6. Who is the approving authority for the following and typical permit time
for each of these?3. Have you made any changes to the zoning code during post-Covid? Are
these changes permanent? Can you describe how some of these changes
have helped maintain and encourage retail?▪
▪
▪
If something had to go to a hearing body it would go to the planning
commission which could be a 4 - 5 month process, especially due to
incomplete applications.
8. Do you have recommendations for jurisdictions looking to
preserve/encourage retail uses?▪The City is undergoing rezoning downtown to allow all mixed-use
and to allow additional height; driven in part by the Housing
Element.
▪Review the zoning ordinance, permitting procedures, and how
those factors affect the cost of doing business.The City hasn’t had any new commercial development in 10+ years
– Housing Element rezonings will allow for a lot of newer
commercial square footage allowed in tandem with residential.▪Determine how your jurisdiction can support businesses operating
outdoors.o Nothing in the rezoning that is explicit for commercial but it will
provide opportunity for new and existing commercial.Signage has never been beyond an administrative design review –
o The City reviewed and contacted several jurisdictions for best
practices regarding parklets and expanded outdoor dining.o Much of the downtown is currently old commercial in old
buildings. We haven’t had new development in many years, just
renovations. We expect new mixed-use developments in near
future.
no issues.
7. Have developers used the provisions of AB 2097 in developments for
parking? How is the City ensuring there will be parking for visitors and
residents in the wake of AB 2097?
o Where possible, make operating outdoors permanent.
▪
▪
Provide certainty to businesses so they know what they can and
can’t do.▪The City made alcohol an ancillary use allowed by right and made it
permanent post covid. A business just needs an ABC license from
state.
▪Does not apply to downtown but does apply to an extremely small
area on El Camino Real – mostly redeveloped with entirely
residential.
Due to the small size of Santa Monica, City staff has seen the
importance of relationship building, being visible, known, and a
trusted figure in the community so people know who to contact for
questions or issues.
4. Were there any other zoning changes that were considered but not
made and why?▪The City is going to be conducting a comprehensive downtown
parking ratio update for residential and commercial uses through a
parking study.Important for jurisdictions to work together regionally and throughout the
State to become competitive as whole (i.e. align programs and fees) – don’t
try and steal from business.
▪Office/administration uses on Main Street and State Street are not
allowed on the ground floor.8. Do you have a municipal public parking/parking district or any
exemptions for parking?o The City wants this area to be the retail and restaurant core,
there are some existing non-conforming uses like banks.▪The City has public parking plazas in addition to small parking lots -Los Altos ▪The City is exploring an option of requiring use like hair and nail
salons to get a CUP.
6 acres of parking lot to the north and south of Main Street and
State Street.Interview Questions and Responses
o There is a proliferation of these uses in downtown competing
with one another.
▪In the 1950s downtown property owners passed a measure that any
existing commercial square footage does not have to park their
business use.
1. Have you evaluated the impact of COVID and/or online shopping on retail
in Los Altos?
o The City does not need as many as they currently have – in some
instances there are two next to each other.▪Yes, because of the physical limitations in the early/middle portion
of COVID.9. Do you have any other improvement districts such as the Business
Improvement District (BID), Community Facilities District (CFD), or
Enhanced Infrastructure Financing District (EIFD)?▪
▪
The City is looking to address vacancy in terms of empty display
windows and pop-up shops through a zone text amendment.▪Main commercial area in Los Altos is similar to California Ave in Palo
Alto.▪The City doesn’t have a BID but will be exploring the creation of a
Property Business Improvement District in the upcoming year
(assessed against property owners not businesses).
Vacancies downtown last for 6-9 months outside of three (3)
properties where businesses have closed due to ADA lawsuits.o No major commercial retail or national retailers – mom-and-
pop and small businesses
o Businesses open quite easily in Los Altos but the length of
occupancy is varied.o “Downtown Triangle” is restaurant heavy with passive
businesses.
City of Palo Alto Appendix A, Page 4
PALO ALTO RETAIL REVITALIZATION STUDY
o
o
There are three (3) big property owners who want to see major
infrastructure improvements to improve the public realm.
the business owner- personal services and pet stores are active
uses.
▪Community development incentives for open space include an
increase in height or FAR.
Looking to reorient parking to be parallel to recapture half
depth of angle parking to expand the sidewalks – property
owners would like to see the expansion of the public realm in
front of their properties to create more usable space.
o There is a stretch in the Downtown where office is not allowed
on the ground floor.
6. Does the City have any parking programs to help reduce parking
requirements?
2. How does the City process change of use permits, by-right or
discretionary approval?
▪No formal programs. If a use is converted to retail, they don't need
to provide extra parking based on new retail use.
10. Does the City have any programs or incentives to attract retail?▪Any changes to use in the downtown, including retail, can be done
by-right. No approval is needed, only a building permit from the
building division is required.
▪The City is currently exploring reductions to minimum parking.
▪Some businesses may actually need to close to allow new uses, they
are holding usable space for redevelopment.7. Does the City have a municipal public parking/parking district or any
exemptions for parking?
▪The City probably would have lost most of the restaurants if they
hadn’t deployed the parklet program.
3. Please identify the approving authority and typical permit time for the
following:▪The City has municipal garages and lots. Also, visitors can park in any
other retail parking lot. Offices open up their garages to visitors on
the weekends. All parking garages are fee based.11. Are there best practices or efficient permitting and flexibility that your
City follows and that have helped you retain and attract retail uses?
▪
▪
▪
Depends on complexity. Generally approved by Planning Staff (2
to 4 months) and building division (4 to 6 weeks).▪New technology installed around downtown to inform where and
how many spaces are available.▪Downtown Vacancy matrix created by the Chamber of Commerce
to identify where the vacancies are located, what is allowed in those
spaces, and what is the footprint.
New construction (permitted uses). Planning staff: 3 to 4 month
planning approvals; Building division: 4 to 6 weeks.8. Does the City provide information for developers explaining permitting
process/timing expectation?New construction (CUP uses). Planning Commission if they exceed
height limit or CUP outside DT. Within the DT, CUP can be approved
by staff. 3 to 4-month planning approvals, building division 4 to 6
weeks.
▪The Chamber of Commerce works to connect property owners with
interested businesses, there are a lot of older buildings and old-
school property owners and old school in how they lease space.
▪The City has meetings with the developers and has a submittal
checklist for new construction. If it is an existing building, they go
directly to the building division.
12. Any recommendations for jurisdictions looking to preserve/encourage
retail uses?
▪
▪
▪
Major remodeling/tenant improvement. Planning Staff:
Depending on the complexity, it can be done over the counter.9. Has the City seen any trends in retail as it relates to permit applications?
▪Parklet Program – had a sunset date to either make permanent or Minor Changes. Planning Staff: Depending on the complexity, it can
be done over the counter.▪None for retail. Lately, the interest has been in daycares,
restaurants, and offices.revisit and revamp.
o The City didn’t want the temporary COVID program to be the New Signage/Signage Change. Over the counter generally. If
existing space is part of the Master sign program (3 or more
retail/commercial generally have a master sign program), if it is a
part of a commercial strip, then they just need a permit from the
Building division. If not, they need to apply with planning and then
to the Building division (3 to 4 months).
10. Please add any other information related to best practices or efficient
permitting and flexibility your City follows that has helped you
retain/attract retail.
permanent one.
▪The City identified what has been working and what hasn’t
been working.▪
▪
▪
There is a lack of retail in the downtown, there are several vacancies
including World Market which has been vacant for four years.▪
▪
The City also didn’t want mismatch parklets.
The permanent program goes into effect in January with a
new set of standards.
There are more retail vacancies but the City is open to attracting
other active uses in those spaces.4. Does the City track and report permit approval times for development
projects (submittal to approval)?o
o
The City conducted outreach with several business owners and
restaurant groups to discuss issues and needs.
The downtown retail task force is helping with attracting, educating,
and retaining retail uses.▪The City has a tracking system to input dates, but they don't really
track processing times.Some were very receptive and some pushed back because of
the cost to change parklets.o They try to follow the Permit Streamlining Act. Review within 30
days and 60 days for a decision.
Redwood City 5. Does the City have other programs or incentives to attract retail?
Interview Questions and Responses ▪
▪
▪
FAR increase if the applicant provides housing/ mixed-use.
The retail task force helps to attract retail.1. Does the City have ground floor use restrictions?Retail outreach efforts are conducted via the economic
development office.▪Ground floor active uses are encouraged, not required. Active use
definition: Uses that allow the public to walk in and interact with
City of Palo Alto Appendix A, Page 5
ESRI Report Data
California Avenue
•
•
•
•
•
Total sales: $301,350,000
Total employees: 1,562
Total businesses: 235
Retail: 6.5% businesses; 6.4% employees
Accommodation and food services: 10.4% businesses; 11.9% employees
Demographic Summary
Population
Households
Families
Median Age
2021 2026 (Projected)
146,566
57,798
33,552
37.5
141,015
55,632
32,242
37.5
Median Household Income $161,252 $176,564
Top Tapestry Segments
Top Tier (1A)
Urban Chic (2A)
Laptops and Lattes (3A)
Trendsetters (3C)
Percent
25.5%
24.2%
21.1%
8.1%
Enterprising Professionals (2D)5.8%
See reports at the end of this Appendix for detailed profiles of Top Tier, Urban Chic, and Laptops and Lattes. Other profiles can be found at https://doc.arcgis.com/en/esri-demographics/latest/regional-data/tapestry-segmentation.htm.
Retail Leakage
•
•
•
More than 40%: Auto parts, motor vehicle dealers, auto accessories, drinking places, direct selling establishments, florists, vending machine operators
20% to 40%: Lawn and garden equipment, healthcare stores, gasoline stores, used merchandise
10% to 20%: Grocery stores, specialty food stores, and services
Retail Surplus
•
•
•
More than 40%: Shoe stores, book, periodical, and music stores
20% to 40%: Furniture stores
10% to 20%: Department stores, home furnishings stores, electronics and appliance stores
Downtown/University Avenue
•
•
•
•
•
Total sales: $1,871,207,000
Total employees: 8,322
Total businesses: 1,063
Retail: 7.5% businesses; 4.6% employees
Accommodation and food services: 8.4% businesses; 14.0% employees
PALO ALTO RETAIL REVITALIZATION STUDY
Demographic Summary
Population
Households
Families
Median Age
2021 2026 (Projected)
21,195
9,441
5,015
43.7
20,938
9,370
4,950
43.0
Median Household Income $186,084 $200,001
Top Tapestry Segments
Laptops and Lattes (3A)
Top Tier (1A)
Urban Chic (2A)
Social Security Set (9F)
Dorms to Diplomas (14C)
Percent
46.4%
34.6%
10.8%
8.2%
0.1%
See reports at the end of this Appendix for detailed profiles of Top Tier, Urban Chic, and Laptops and Lattes. Other profiles can be found at https://doc.arcgis.com/en/esri-demographics/latest/regional-data/tapestry-segmentation.htm.
Retail Leakage
•More than 40%: Auto parts, motor vehicle dealers, auto accessories, building material, lawn & garden equipment, other general merchandise stores, florists, vending machine operators, direct selling establishments, special food services,
drinking places
•20% to 40%: Used merchandise stores, office supplies, stationery, and gift stores, gasoline stations, health and personal care stores, specialty food stores, grocery stores
Retail Surplus
•
•
More than 40%: Furniture stores, shoe stores, books, periodicals, and music stores
10% to 20%: Department stores, jewelry, luggage, and leather goods stores
Midtown Shopping
•
•
•
Total sales: $101,684,000
Total employees: 451
Total businesses: 116
Demographic Summary
Population
Households
2021 2026 (Projected)
30,639
11,401
30,295
11,318
7,917Families 8,006
Median Age 44.0 44.0
Median Household Income $200,001 $200,001
Top Tapestry Segments
Urban Chic (2A)
Top Tier (1A)
Laptops and Lattes (3A)
Enterprising Professionals (2D)
Trendsetters (3C)
Percent
45.8%
38.9%
8.8%
5.5%
1.0%
See reports at the end of this Appendix for detailed profiles of Top Tier, Urban Chic, and Laptops and Lattes. Other profiles can be found at https://doc.arcgis.com/en/esri-demographics/latest/regional-data/tapestry-segmentation.htm.
City of Palo Alto Appendix B, Page 2
PALO ALTO RETAIL REVITALIZATION STUDY
CoStar Retail and Office Summary (February 2024)
Retail
Table 1: Retail Overview - Palo Alto, Los Altos, and Santa Monica (2024 Q1)
Palo Alto
El Camino Real –
Town & County
(CC)
Palo Alto
El Camino Real
– California Ave
(CN, CS)
Palo Alto Palo Alto
California Ave
(CC2/R)
295,000
0
Palo Alto
El Camino
Real – South
463,000
0
Palo Alto
Midtown
(CN/GF)
104,000
0
Total/Average
Palo Alto
1,831,300
0
Downtown
(CD-C/GF)
740,000
0
112,000
-51,300
Los Altos
CRS Zone
433,000
0
11,074
-282
Santa Monica
Main Street
461,000
0
Santa Monica
3rd Street
1,300,000
50,000
Retail
INVENTORY SF 175,000
0
21,400
54,300
Under Construction Square Feet
Vacant Square Feet
12 Month Net Absorption Square Feet
12 Month Net Absorption Square Feet
(one year change)
0
178,600
-44,851
28,200
12,200
5,000
-4,500
8,100
-832
3,900
434
47,700
-12,800
340,000
-32,800-853
-1543%
9.8%
-381%
15.1%
6.90%
504%
9.6%
-158%
12.2%
0.50%
-9277%
9.1%
-110%
1.8%
164%
3.8%
27%
2.6%
0.10%
-35%
10.3%
2.80%
33%
VACANCY RATE
Vacancy Rate
(one year change)
25.9%
2.50%1.9%-4.10%8.20%0.20%-0.40%
Market Asking Rent/ Square Feet
Market Asking Rent/ Square Feet (one year change)
Market Sale Price/ Square Feet
Market Sale Price/ Square Feet
(one year change)
$61.07
-0.52%
$828
$77.11
-0.50%
$1,129
$54.47
-0.70%
$788
$76.70
-0.40%
$593
$48.81
-0.30%
$913
$53.65
-0.70%
$797
$55.67
-0.50%
$748
$49.05
-0.40%
$767
$67.56
1.30%
$916
$79.85
-1.80%
$909
-0.83%-2.00%-0.80%0.20%-1.60%-1.20%0.40%-0.70%2.10%-0.80%
Market Cap Rate
Market Cap Rate (one year change)
4.45%
0.85%
4.20%
0.10%
4.50%
4.50%
5.00%
0.20%
4.20%
0.10%
4.50%
0.10%
4.30%
0.10%
4.60%
0.10%
4.60%
0.10%
4.90%
0.10%
City of Palo Alto Appendix B, Page 3
PALO ALTO RETAIL REVITALIZATION STUDY
Table 2: Retail Vacancy Rate - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
Palo Alto Palo Alto
El Camino Real –
California Ave(CN, CS)
Palo AltoDowntown
(CD-C/GF)
Palo AltoCalifornia Ave
(CC2/R)
Palo AltoEl Camino Real –
South
Palo AltoMidtown
(CN/GF)
El Camino Real –
Town & County(CC)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rdPERIODStreet
INVENTORY SF
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
740,000
15%
14%
14%
14%
9%
8%
10%
9%
12%
10%
8%
11%
9%
295,000
10%
9%
175,000 54,300 463,000
2%
2%
1%
1%
1%
2%
2%
3%
3%
3%
3%
2%
2%
3%
2%
1%
1%
1%
1%
1%
1%
1%
1%
1%
1%
1%
0%
1%
1%
1%
1%
0%
1%
2%
1%
2%
2%
1%
1%
1%
2%
104,000
4%
5%
5%
5%
5%
4%
4%
4%
4%
3%
3%
3%
1%
1%
1%
1%
1%
1%
1%
1%
2%
0%
0%
0%
0%
0%
0%
1%
2%
1%
4%
0%
0%
0%
0%
3%
3%
3%
3%
3%
3%
433,000
3%
3%
2%
2%
2%
3%
2%
3%
2%
2%
4%
3%
2%
3%
4%
3%
3%
2%
1%
1%
0%
0%
1%
0%
0%
0%
2%
2%
3%
2%
1%
2%
2%
2%
2%
3%
2%
0%
1%
1%
1%
461,000
10%
11%
10%
8%
11%
5%
6%
8%
6%
5%
8%
11%
9%
11%
11%
7%
1,300,000
26%
25%
26%
24%
23%
23%
22%
24%
22%
19%
22%
21%
12%
12%
12%
11%
12%
9%
12%
12%
12%
12%
13%
10%
10%
11%
12%
13%
14%
12%
12%
14%
11%
7%
6%
3%
0%
2%
2%
3%
1%
2%
2%
0%
1%
0%
4%
1%
1%
1%
1%
1%
1%
0%
0%
1%
1%
0%
9.1%
9.1%
0%9%
13%
15%
13%
14%
15%
13%
15%
13%
12%
12%
11%
11%
9%
9%
6%
6%
6%
6%
3%
3%
1%
2%
6%
1%
7%
6%
0%
2%
1%
3%
4%
0%
2%
2%
2%
2%
0%
0%
0.00%
1.6%
2%
2%
2%
0%
0%
0%
0%
4%
4%
4%
4%
17%
19%
0%
1%
0%
0%
0%
0%
0%
0%
0%
0%
2%
2%
0%
0%
0%
0%
0%
0%
0%
6%
5%
4%
4%
4%
4%
5%
4%
5%
3%
3%
3%
4%
4%
4%
6%
2%
3%
1%
3%
1%
1%
1%
2%
1%
0%
3%
1%
5%
5%
6%
2%
4%
4%
5%
5%
6%
5%
4%
4%
3%
2%
3%
2%
2%
1%
1%
1%
1%
0%
1%
1%
9%
8%
10%
9%
7%
8%
7%
4%
4%
3%
3%
4%
5%
3%
4%
5%
5%
4%
4%
5%
6%
6%
4%
0%
0%
16%1%0%4%
City of Palo Alto Appendix B, Page 4
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 1: Retail Vacancy Rate - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
30%
25%
20%
15%
10%
5%
0%
Palo AltoDowntown
(CD-C/GF)
Palo AltoCalifornia Ave
(CC2/R)
Palo AltoEl Camino Real – Town & County
(CC)
Palo AltoEl Camino Real – California Ave
(CN, CS)
Palo AltoEl Camino Real – South Palo AltoMidtown
(CN/GF)
Los AltosCRS Zone Santa MonicaMain Street Santa Monica 3rd Street
City of Palo Alto Appendix B, Page 5
PALO ALTO RETAIL REVITALIZATION STUDY
Table 3: Retail Vacancy Square Footage - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
Palo Alto
El Camino Real –
Town & County
(CC)
Palo Alto
El Camino Real –
California Ave
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
Midtown
(CN/GF)
Total Square Feet
Palo Alto
Palo Alto
El Camino Real – South
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd StreetPERIOD
(CN, CS)
TOTAL SF 1,831,300
178,597
173,194
155,957
168,361
143,381
127,229
146,933
152,945
168,125
160,156
140,829
149,691
133,446
114,225
98,700
77,103
71,609
68,273
64,283
61,946
56,015
53,397
34,381
31,228
36,373
51,354
32,545
57,323
74,259
25,103
34,582
17,374
37,919
24,547
12,725
27,143
34,214
18,344
20,198
29,786
36,931
740,000
111,905
105,375
100,547
101,016
67,478
56,165
73,475
69,354
86,236
73,735
58,301
82,789
69,048
44,786
39,340
32,350
29,528
32,146
32,578
35,423
26,552
35,982
19,785
20,830
22,483
29,687
26,296
33,513
43,793
15,915
20,515
10,500
23,261
4,350
295,000
28,235
27,999
26,293
38,228
43,128
38,353
41,897
43,158
39,326
44,743
39,325
34,225
33,721
29,321
29,573
25,526
23,666
17,349
17,349
17,149
17,149
9,250
9,465
3,017
6,317
17,651
2,797
18,832
18,332
-
5,191
2,986
175,000
21,425
21,425
20,493
20,493
23,606
17,732
17,830
19,652
21,032
22,812
24,337
21,761
21,761
24,340
19,554
12,541
10,967
5,226
-
54,300
4,960
4,960
463,000
8,132
8,132
3,321
3,321
4,241
10,164
8,916
15,316
16,066
15,866
15,866
7,916
7,916
12,716
7,321
3,774
4,536
3,300
3,300
5,100
5,640
2,830
3,220
3,670
3,236
3,236
1,300
3,688
3,538
4,962
2,738
1,788
4,871
7,171
3,588
9,488
7,513
3,512
6,992
6,492
10,813
104,000
3,940
5,303
5,303
5,303
4,928
3,940
3,940
4,590
4,590
3,000
3,000
3,000
1,000
1,000
850
850
850
850
850
850
1,600
-
433,000
11,074
13,710
9,107
9,753
10,178
11,274
6,696
13,825
10,651
10,248
15,648
11,339
6,789
13,349
15,605
12,040
14,077
9,964
5,667
2,913
1,383
-
461,000
47,714
48,409
48,227
36,496
52,416
21,180
26,681
34,620
26,314
24,212
38,160
49,132
41,828
50,688
49,298
31,726
25,024
22,153
26,343
11,286
19,971
20,559
24,870
23,992
27,425
23,648
16,706
17,421
15,621
11,311
13,268
9,427
1,300,000
339,654
326,979
337,217
312,798
305,582
307,835
293,504
310,164
291,790
261,303
298,801
283,694
158,202
158,302
161,951
143,160
157,851
122,571
126,847
109,811
127,702
114,843
94,342
111,338
92,497
54,170
47,270
46,153
37,648
55,410
60,582
42,179
51,035
65,780
67,286
54,211
59,104
72,902
80,946
83,840
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
-
-
-
875
875
875
875
-
-
-
-
2,062
2,062
2,062
2,062
9,402
10,206
3,424
4,324
5,335
1,911
3,711
4,337
780
-
750
-
-
-
-
-
-
-
-
-
-
-
3,100
-
250
1,800
7,344
8,344
11,280
9,944
4,290
10,500
9,990
10,172
9,515
11,428
10,092
1,000
2,500
3,200
5,124
2,152
-
-
1,290
1,845
915
3,999
-
6,751
2,436
1,264
2,100
2,429
2,429
2,429
329
-
875
875
-
-
-
-
-
-
7,358
10,597
1,358
6,158
6,158
4,800
4,800
310
2,200
-
-
-
9,142
6,166
3,150
3,322
5,350
8,084
17,459
5,226
3,600
3,084
3,084
3,084
3,084
3,084
3,084
-5,172
1,722
1,722
-
-
-
-
-
4,260
6,175
18,144
19,900
10,402 -10,432 57,548
City of Palo Alto Appendix B, Page 6
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 2: Retail Vacancy Square Footage - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
-
Total Square Feet
Palo Alto
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rd Street
City of Palo Alto Appendix B, Page 7
PALO ALTO RETAIL REVITALIZATION STUDY
Table 4: Retail Market Asking Rent Per Square Foot - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
Palo Alto
El Camino Real –
Town & County
(CC)
Palo Alto
El Camino Real –
California Ave
(CN, CS)
54,300
$49
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real –
South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rdPERIODStreet
TOTAL SF 740,000
$77
$78
$76.8
$77.1
$77.7
$77
$77
$77
$76
$76
$76
$75
$74
$74
$74
$74
$73
$73
$72
$72
$71
$71
$70
$70
$69
$69
$68
$68
$67
$67
$66
$65
$65
$64
$63
$63
$62
$61
$61
$60
$60
295,000
$54
$55
$54.3
$54.5
$54.9
$55
$54
$54
$54
$54
$53
$53
$53
$52
$52
$52
$52
$52
$51
$51
$51
$50
$50
$50
$49
$49
$49
$48
$48
$47
$47
$46
$46
$45
$45
$44
$44
$44
$43
$43
$42
175,000
$77
463,000
$54
$54
$53.3
$53.6
$54.1
$54
$54
$53
$53
$53
$53
$52
$52
$51
$51
$51
$51
$50
$50
$50
$49
$49
$49
$48
$48
$47
$47
$47
$46
$46
$45
$45
$44
$44
$43
$43
$42
$42
$41
$41
$40
104,000
$56
$56
$55.2
$55.6
$56.0
$56
$56
$55
$55
$55
$54
$54
$53
$53
$53
$53
$52
$52
$52
$51
$51
$51
$50
$50
$49
$49
$49
$48
$48
$47
$47
$46
$46
$45
$44
$44
$43
$43
$42
$42
$41
433,000
$49
$49
$49.0
$49.2
$49.3
$49
$49
$49
$49
$48
$48
$48
$47
$47
$47
$47
$46
$46
$46
$46
$45
$45
$44
$44
$44
$43
$43
$43
$42
$42
$42
$41
$41
$40
$40
$39
$39
$39
$38
$38
$37
461,000
$68
$68
$67.3
$67.0
$66.8
$67
$66
$66
$65
$65
$64
$64
$64
$64
$64
$64
$64
$64
$64
$63
$63
$63
$62
$62
$62
$61
$61
$60
$60
$59
$59
$59
$58
$57
$57
$56
$55
$55
$54
$54
$53
1,300,000
$80
$81
$80.9
$81.2
$81.4
$82
$81
$81
$79
$79
$79
$78
$78
$78
$79
$79
$80
$80
$81
$81
$80
$80
$78
$78
$78
$77
$79
$80
$80
$80
$79
$75
$73
$72
$71
$70
$69
$68
$67
$66
$66
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
$77 $49
$75.7
$76.4
$77.1
$77
$77
$76
$75
$75
$74
$74
$73
$73
$73
$73
$72
$71
$71
$70
$69
$69
$68
$68
$67
$66
$65
$65
$65
$64
$63
$62
$61
$60
$59
$59
$49.0
$48.8
$49.1
$49
$49
$48
$48
$48
$48
$48
$47
$47
$46
$46
$46
$46
$46
$45
$45
$45
$45
$44
$44
$43
$43
$43
$43
$42
$42
$41
$41
$40
$40
$39
$58
$57
$57
$56
$39
$39
$38
$38
$55 $37
City of Palo Alto Appendix B, Page 8
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 3: Retail Market Asking Rent Per Square Foot - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
$90
$85
$80
$75
$70
$65
$60
$55
$50
$45
$40
$35
$30
Palo AltoDowntown
(CD-C/GF)
Palo AltoCalifornia Ave
(CC2/R)
Palo AltoEl Camino Real – Town & County
(CC)
Palo AltoEl Camino Real – California Ave
(CN, CS)
Palo AltoEl Camino Real – South Palo AltoMidtown
(CN/GF)
Los AltosCRS Zone Santa MonicaMain Street Santa Monica 3rd Street
City of Palo Alto Appendix B, Page 9
PALO ALTO RETAIL REVITALIZATION STUDY
Table 5: Retail Vacancy by Months - Palo Alto, Los Altos, and Santa Monica (2014 - 2024 Q1)
Palo Alto
El Camino Real – Town
Palo Alto
El Camino Real –
California Ave
(CN, CS)
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
Midtown
(CN/GF)
Palo Alto
El Camino Real – South
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rdPERIOD& County
(CC)
175,000
40.6
39.2
32.1
27.8
24.8
23.4
19.1
16.3
15.9
12.8
13.3
12.2
9.2
Street
TOTAL FA 740,000
8.5
11.5
13.0
11.5
295,000 54,300
2.3
0.9
463,000
23.1
21.7
18.7
15.6
12.6
9.7
12.4
11.5
8.5
104,000 433,000 461,000 1,300,000
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
15.1
22.3
2.2
11.1
20.8
6.4
15.1
0.5
2.4
6.8
12.6
4.8
10.9
4.0
23.1
3.8
12.1
10.0
16.5
10.5
2.1
29.2
5.1
5.8
29.6
6.8
15.5
6.3 10.9
7.9
4.8
5.7
5.7
4.9
13.6
17.4
6.0
14.6
7.6
14.2
11.4
2.6
10.2
10.4
5.7
6.1
1.8
7.4
4.4
16.9
31.0
7.48.3 13.3
10.3
17.4
14.4
11.4
8.4
7.4
4.4
18.8
3.8
0.9
13.3
4.26.3
5.2
4.1
2.0
4.4
1.8
3.2
1.7
17.2
14.2
11.2
8.2
5.2
2.2
17.4
3.9
8.2
5.06.0
17.8
3.8
9.4
5.015.1
7.0
4.0
4.1
3.5
5.1
2.5
3.0
4.0
8.0
2.7
6.0
2.0
8.8
10.1
4.3
2.9
4.7
1.1
3.4
8.1
6.5
3.6
3.1
1.0
0.4
6.2
16.4
5.2
5.3
6.4 5.5
4.1
9.5
5.5
3.6
2.1
10.2
7.2
3.2
6.7
6.7
3.7
6.9
3.9
0.9
3.3
0.2
15.5
2.9
19.2
8.9
9.4
10.2
7.2
4.2
4.1
8.6
6.4
6.1
7.4
4.3
1.8
7.6
5
2.5
5.5
16.5
2.3
13.8
6.3
4.2
2.4
12.0
6.5
1.6
15.4
6.7
4.8
6.5
0.3 16.1
5.5
10.0
0.5
4.4
3.8
7.0
6.9
11.5
6.9
7.0
4.6 5.3 6.2
3.2
7.0
9.3
5.0
5.0
34.6
4.9
5.6
1.6
2.7
3.9
2.9
6.1
3.3
0.317.1
3.5
6.0
18.1
9.0 1.4
4.5
4.0
5.8
10.1
4.3
17.0
3.9
8.5
2.1
5.1
3.8
5.1
1.4 1.8
4.5
9.3
9.8
5.0
6.0
0.9
City of Palo Alto Appendix B, Page 10
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 4: Retail Vacancy by Months - Palo Alto, Los Altos, and Santa Monica (2014 - 2024 Q1)
24
22
20
18
16
14
12
10
8
6
4
2
0
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd Street
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Linear (Palo Alto
Downtown
(CD-C/GF))
Linear (Palo Alto
California Ave
(CC2/R))
Linear (Palo Alto
El Camino Real – South)
Linear (Palo Alto
Midtown
(CN/GF))
Linear (Los Altos
CRS Zone)
Linear (Santa Monica
Main Street)
Linear (Santa Monica
3rd Street)
Linear (Palo Alto
El Camino Real – Town & County
(CC))
Linear (Palo Alto
El Camino Real – California Ave
(CN, CS))
City of Palo Alto Appendix B, Page 11
PALO ALTO RETAIL REVITALIZATION STUDY
Office
Table 6: Office Overview - Palo Alto, Los Altos, and Santa Monica (2024 Q1)
Palo Alto Palo AltoPalo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real
– South
Palo Alto
Midtown
(CN/GF)
Santa
Monica
Main Street
Total/Average El Camino Real – El Camino Real –
Town & County
(CC)
Los Altos
CRS Zone
Santa Monica
3rd StreetOfficePalo Alto California Ave
(CN, CS)
INVENTORY SF
Under Construction Square Feet
Vacant Square Feet
12 Month Net Absorption Square Feet
12 Month Net Absorption Square Feet
(one year change)
3,316,000
-
556,100
(59,913)
2,100,000
0
339,000
-77,600
712,000
0
166,000
-6,500
49,800
0
5,800
-1,100
192,000
0
15,500
8,800
219,000
0
20,900
16,400
43,200
0
8,900
87
188,000
0
24,300
-4700
247,000
0
77,400
-26,800
1,300,000
0
364,000
-122,000
42%
17%
-1%
8.8%
16.0%
3.7%
89.5%
23.4%
1.0%
69.2%
11.6%
2.3%
26.4%
8.1%
-46.5%
9.6%
102.7%
20.7%
-0.2%
-126.2%
12.9%
2.5%
-164.0%
31.4%
11.0%
-89.8%
28.3%
9.5%
VACANCY RATE
Vacancy Rate
(one year change)-4.6%-5.6%
Market Asking Rent/ Square Feet
Market Asking Rent/ Square Feet (one year change)
Market Sale Price/ Square Feet
Market Sale Price/ Square Feet
(one year change)
$76.22
-1%
$928
$93.77
-0.8%
$1,077
$72.23
-1.6%
$894
$87.63
-1.0%
$1,149
$72.45
-1.6%
$969
$66.11
-1.3%
$749
$65.13
-1.8%
$727
$71.82
-0.5%
$679
$59.36
0.6%
$840
$66.34
0.4%
$734
-7%-6.4%-7.4%-8.3%-7.9%-7.1%-7.8%-7.0%-5.6%-7.2%
Market Cap Rate
Market Cap Rate (one year change)
5.9%
0%
5.9%
0.4%
5.8%
0.4%
5.7%
0.4%
5.7%
0.4%
5.9%
0.4%
6.5%
0.4%
6.1%
0.4%
5.7%
0.3%
5.8%
0.3%
City of Palo Alto Appendix B, Page 12
PALO ALTO RETAIL REVITALIZATION STUDY
Table 7: Office Vacancy Rate - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
Palo Alto Palo Alto
El Camino Real –
California Ave
(CN, CS)
192,000
8.1%
Palo Alto California
AvePalo Alto Downtown
(CD-C/GF)
El Camino Real –
Town & County
(CC)
Palo Alto
El Camino Real – South
Palo Alto Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
3rd StreetPeriodSanta Monica Main Street
(CC2/R)
INVENTORY SF
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2,100,000
16.0%
17.6%
16.8%
16.2%
14.0%
10.8%
9.6%
8.6%
7.8%
8.7%
9.4%
11.7%
10.7%
11.6%
9.3%
5.1%
4.8%
3.5%
2.9%
2.1%
1.9%
2.0%
2.3%
2.1%
3.2%
4.4%
3.4%
3.0%
5.1%
3.9%
3.6%
3.2%
2.1%
1.6%
3.0%
3.4%
3.4%
3.2%
3.2%
3.0%
2.7%
712,000
23.4%
17.6%
18.2%
23.4%
25.1%
20.0%
26.4%
15.5%
16.3%
17.7%
14.8%
14.8%
10.0%
9.6%
49,800
11.6%
11.6%
11.6%
11.6%
11.6%
7.2%
0.0%
0.0%
0.0%
3.8%
3.8%
3.8%
3.8%
3.8%
5.6%
7.8%
5.9%
219,000
9.6%
43,200
20.7%
20.7%
20.0%
19.8%
22.0%
19.9%
19.1%
19.6%
19.6%
7.7%
188,000
12.9%
13.4%
13.7%
13.0%
10.2%
10.6%
17.5%
17.9%
19.5%
20.4%
24.3%
13.3%
14.2%
13.7%
14.1%
14.6%
11.8%
13.3%
2.7%
2.7%
2.0%
1.5%
0.9%
1.0%
2.7%
3.4%
4.2%
4.2%
3.3%
5.1%
5.5%
2.7%
4.7%
4.7%
5.9%
247,000
31.4%
30.1%
26.2%
23.0%
24.0%
17.2%
18.6%
19.9%
15.3%
14.4%
15.7%
22.5%
15.8%
16.7%
15.2%
5.2%
3.9%
5.1%
3.8%
0.6%
0.5%
0.5%
2.2%
2.2%
5.2%
3.2%
9.6%
11.1%
4.5%
6.4%
3.7%
6.3%
3.1%
3.4%
1.2%
1.7%
2.1%
2.6%
5.3%
2.7%
8.5%
1,300,000
28.7%
26.6%
21.9%
21.4%
19.2%
18.5%
21.1%
16.4%
13.0%
14.5%
12.6%
12.4%
10.8%
9.2%
9.7%
7.6%
4.7%
4.0%
6.3%
5.2%
4.5%
2.8%
2.9%
7.6%
5.7%
7.6%
7.2%
7.3%
8.4%
8.0%
8.1%
7.0%
6.1%
7.7%
10.3%
9.4%
7.8%
7.2%
7.1%
4.6%
6.0%
6.0%
8.1%
14.9%
14.3%
13.9%
14.4%
16.0%
17.5%
29.5%
29.2%
29.9%
22.1%
18.9%
17.4%
9.2%
13.3%
16.5%
14.7%
6.7%
6.6%
6.9%
5.4%
4.8%
4.5%
10.4%
3.7%
4.1%
2.2%
5.3%
4.7%
16.9%
12.3%
12.3%
15.3%
17.4%
16.2%
15.8%
17.7%
14.8%
14.8%
13.9%
3.7%
8.8%
14.7%
26.6%
26.6%
12.3%
7.7%
8.5%
5.2%
4.6%4.6%
4.6%6.9%
4.0%
5.7%
8.3%
7.5%
7.5%
3.5%
11.0%
9.6%
8.2%
5.9%
5.6%
4.5%
3.4%
1.5%
2.4%
3.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.0%
2.0%
2.0%
2.0%
5.8%
4.7%
4.7%
0.0%
0.0%
0.9%
0.9%
0.9%
0.9%
0.0%
0.0%
0.0%
3.2%
5.7%
3.7%
3.7%
2.9%
6.9%
33.3%
3.2%
6.3%
8.3%
7.3%
7.6%
5.9%
9.8%
6.5%
7.0%
9.2%
5.0%
3.5%
13.1%
13.1%
13.1%
14.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4.6%
3.6%
1.3%
2.9%
1.3%
4.3%
4.7%
2.1%
1.5%
5.3%
10.6%
6.3%
5.8%
3.5%
4.5%
4.0%
10.1%
16.8%
5.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
1.7%
6.5%
14.1%
0.0%
0.0%
4.0%
12.9%
15.9%
9.6%
3.7%
4.5%
3.6%
1.3%
9.2%
7.5%0.0%
City of Palo Alto Appendix B, Page 13
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 5: Office Vacancy Rate - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
35%
30%
25%
20%
15%
10%
5%
0%
Palo Alto
Downtown(CD-C/GF)
Palo Alto
California Ave(CC2/R)
Palo Alto
El Camino Real – Town & County(CC)
Palo Alto
El Camino Real – California Ave(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd Street
City of Palo Alto Appendix B, Page 14
PALO ALTO RETAIL REVITALIZATION STUDY
Table 8: Office Vacancy Square Footage - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
Palo Alto
El Camino Real – Town &
Palo Alto
El Camino Real –
California Ave
(CN, CS)
192,000
15,473
8,914
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
Midtown
(CN/GF)
Palo Alto
El Camino Real – South
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd StreetPeriodCounty
(CC)
49,800
5,768
5,768
5,768
5,768
5,768
3,600
-
INVENTORY SF
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2,100,000
338,980
373,997
356,287
343,975
296,317
228,762
204,888
182,597
166,536
183,733
200,319
249,472
227,481
246,443
198,350
108,452
102,288
75,003
60,668
45,072
39,774
41,800
48,961
44,085
67,447
93,961
72,062
63,375
106,579
81,137
75,143
67,517
43,012
32,332
60,015
67,695
67,094
63,266
63,406
59,714
52,525
712,000
166,439
125,480
129,448
166,543
178,598
142,548
195,380
115,147
120,902
130,842
109,783
109,639
74,063
71,183
62,618
38,263
34,426
51,261
29,639
42,238
61,431
55,749
55,552
25,221
79,176
68,883
58,663
42,736
40,027
32,422
21,830
9,857
219,000
20,880
32,472
31,271
30,435
30,775
34,099
37,370
62,987
62,363
63,940
47,138
40,471
37,202
19,680
28,531
35,197
31,497
14,396
14,206
14,773
11,621
10,271
9,678
43,200
8,939
8,939
8,653
8,533
9,499
8,583
8,253
8,461
8,461
3,326
3,810
6,359
11,471
11,471
5,315
3,315
2,000
2,000
5,671
5,671
5,671
6,203
188,000
24,340
25,297
25,884
24,435
19,192
20,027
33,036
33,642
36,703
38,424
45,703
25,046
26,801
25,741
26,599
27,434
22,155
24,972
5,146
5,052
3,804
2,910
1,624
1,944
5,010
6,451
8,006
8,006
6,251
9,671
10,448
5,109
8,950
8,950
11,154
3,186
12,328
26,489
-
247,000
77,431
74,240
64,601
56,739
59,219
42,506
45,998
48,241
36,982
34,829
38,130
54,411
38,412
40,470
36,802
12,606
9,504
12,476
9,324
1,470
1,195
1,195
5,217
5,217
12,484
7,733
23,331
26,922
11,000
15,459
8,946
15,248
7,480
8,110
2,942
4,023
4,942
6,319
1,300,000
369,593
342,659
281,799
274,774
246,795
237,438
271,948
211,668
167,152
186,772
157,999
156,037
135,137
115,644
121,745
94,942
59,198
50,570
79,541
65,206
56,110
35,511
36,305
95,083
72,085
95,575
91,024
91,771
105,311
101,340
102,816
88,763
77,429
98,179
130,653
119,298
98,873
91,257
90,162
11,514
11,514
15,488
32,520
23,713
23,713
29,313
33,353
31,153
30,313
34,056
28,380
28,380
26,713
4,743
4,743
4,759
3,775
8,959
61,500
6,000
11,650
15,364
13,423
14,058
10,856
18,051
12,038
12,938
17,017
9,158
-
-
1,881
1,881
1,881
1,881
1,881
2,803
3,872
2,950
-
-
-
-
-
--
-
-
-
-
-
-
-
-
-
-
-
1,006
1,006
1,006
1,006
2,878
2,337
2,337
-
22,255
7,977
8,834
4,729
11,262
10,110
7,730
2,870
6,170
2,870
9,217
9,951
4,516
3,224
8,560
27,325
33,604
20,112
-
15,710
19,032
34,390
70,579
41,829
36,802
22,370
23,692
28,587
464
464
464
464
-
6,199
8,019
7,166
19,238
36,015
11,684
7,773
2,000
-
-
-
-
-
-
-
-12,848
6,471
20,364
1,595
2,859
-
-
117,272
95,6592,865
City of Palo Alto Appendix B, Page 15
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 6: Office Vacancy Square Footage - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd Street
City of Palo Alto Appendix B, Page 16
PALO ALTO RETAIL REVITALIZATION STUDY
Table 9: Office Market Asking Rent per Square Foot - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
Palo Alto Palo Alto
El Camino Real –
California Ave
(CN, CS)
192,000
$72
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
Midtown
(CN/GF)
El Camino Real – Town
& County
(CC)
Palo Alto
El Camino Real – South
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd StreetPeriod
INVENTORY SF
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2,100,000
$94
712,000
$72
$72
$72
$73
$73
$74
$76
$76
$76
$78
$78
$77
$77
$78
$80
$80
$82
$82
$82
$82
$82
$80
$80
$80
$79
$77
$75
$76
$77
$78
$78
$77
$79
$77
$76
$73
$70
$67
$64
$61
$60
49,800
$88
219,000
$66
$66
$66
$67
$67
$67
$68
$70
$69
$71
$71
$70
$70
$72
$75
$76
$78
$79
$78
$78
$79
$78
$79
$80
$79
$77
$76
$77
$77
$78
$77
$76
$78
$76
$75
$73
$69
$66
$63
$60
$61
43,200
$65
$65
$65
$66
$66
$67
$67
$68
$68
$69
$69
$68
$68
$68
$70
$71
$73
$73
$73
$73
$74
$72
$72
$73
$73
$70
$69
$70
$71
$73
$72
$72
$74
$71
$71
$68
$65
$62
$59
$56
$56
188,000
$72
$72
$72
$72
$72
$72
$73
$74
$74
$75
$75
$74
$75
$78
$78
$79
$79
$80
$79
$78
$78
$77
$76
$73
$72
$71
$71
$71
$70
$71
$71
$70
$69
$67
$66
$65
$62
$60
$57
$55
$53
247,000
$59
$59
$59
$59
$59
$59
$59
$59
$59
$58
$58
$58
$59
$59
$60
$62
$63
$63
$63
$62
$62
$61
$62
$61
$59
$59
$59
$59
$58
$57
$56
$56
$55
$54
$53
$51
$50
$49
$48
$47
$46
1,300,000
$66
$66
$66
$67
$66
$66
$66
$65
$65
$64
$63
$63
$64
$65
$66
$69
$71
$72
$71
$69
$68
$67
$67
$67
$66
$65
$64
$64
$63
$62
$62
$61
$60
$58
$58
$56
$55
$53
$52
$51
$51
$94
$94
$94
$94
$95
$96
$97
$97
$99
$99
$98
$98
$88
$88
$88
$88
$89
$90
$92
$92
$95
$94
$92
$93
$72
$72
$73
$73
$74
$76
$77
$78
$80
$80
$79
$79
$80
$82
$82
$84
$84
$84
$84
$84
$83
$83
$83
$82
$80
$79
$80
$80
$81
$80
$79
$81
$99 $96
$102
$103
$106
$105
$104
$104
$104
$103
$104
$104
$103
$100
$99
$100
$103
$105
$107
$105
$104
$105
$103
$106
$107
$107
$104
$102
$102
$101
$102
$100
$97
$101
$97
$97
$93
$88
$84
$80
$76
$76
$99
$100
$102
$101
$100
$105
$101
$99
$96
$92
$88
$85
$78
$77
$75
$71
$68
$66
$64
$63
$82
$81
City of Palo Alto Appendix B, Page 17
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 7: Office Market Asking Rent per Square Foot - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
$110
$105
$100
$95
$90
$85
$80
$75
$70
$65
$60
$55
$50
$45
$40
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd Street
City of Palo Alto Appendix B, Page 18
PALO ALTO RETAIL REVITALIZATION STUDY
Table 10: Office Vacancy by Months - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1)
Palo Alto
El Camino Real –
Town & County
Palo Alto
El Camino Real –Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real –
South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd StreetPeriodCalifornia Ave
(CN, CS)
192,000
11.6
10.2
7.0
(CC)
49,800
15.3
13.9
10.9
7.9
INVENTORY SF
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2,100,000
9.5
712,000
11.0
4.4
219,000
5.5
43,200 188,000 247,000
4.3
1,300,000
4.7
10.7
10.1
3.9
32.0
3.2
7.6
9.8
25
6.2 6.2
2.8
2.3
1.4
9.2
1.9
4.4
12.4
1.0
5.1
2.6
21.6
10.6
16.9
5.6
9.1
15.9
15.0
14.4
12.8
13.6
19.0
7.6
3.9
4.6
2.2
24.2
17.7
14.7
9.7
6.7
7.4
5.0
5.04.4
1.9
10.9
17.7
16.8
15.8
12.8
12.3
12.2
11.3
10.4
7.6
6.0
8.8
19.0
18.9
6.1
8.7
3.5
5.4 15.0
13.8
17.4
3.5
3.3
9.5
7.4
3.6
3.7
11.9
6.1
5.0
2.7
4.2
4.8
6.6
6.3
5.6
3.7
7.6
4.5
3.9
5.8
2.0
0.5
8.5
5.3
4.6
15.2
7.1
2.7
4.2
5.7
3.5
10.4
10.5
16.5
11.2
5.3
21.3
18.2
15.2
12.2
9.3
2.1
16.9
11.1
14.3
8.1
7.3
12.4
19.8
9.5
10.36.2
7.2
4.1
6.1 20.1
11.5
3.7 12.0
1.85.5 4.6 2.3
12.2
6.7
5.1
8.5
6.2
4.8
6.4
4.6
4.3
3.1
8.4
4.6
3.7
2.5
7.7
3.6
5.6
10.1
2.7
0.2
3.7
1.4
3.4
0.8
3.6
0.9
18.8
15.8
1.3
9.8
6.8
4.1
2.6
7.9
5.3
5.0
2.2
8.3
17.9
7.5
4.4
6.8
4.4
2.9
2.5
1.2
2.8 4.7
3.4
12.2
8.8 13.7
10.1
6.1
7.1
2.9
5.2
2.6
5.8
4.5
2.4
5.3
3.7
5.6
5.4
11.8
4.1
5.7
5.7
4.6
5.6
4.0
3.2
4.2
4.5
1.3
7.4
3.3
6.8
3.5
3.9
6.7
4.1
7.1
4.3
9.6
6.4
5.2
7.4
9.1
3.3
4.4
1.9
3.9
4.7
3.7
9.4
9.8
2.4
7.0
6.4
31.1
2.2
5.4
3.4
4.2
3.8
0.8
12.7
9.8
6.8
3.8
4.5
4.1
1.1
4.0
3.7
4.8
5.3
6.9
3.9
0.9
1.8
0.8
41.9
11.7
6.0
6.1
4.0
6.7
10.9
3.0
2.6
1.8
11.0
2.9
4.4
3.6
2.5
3.3
2.9
2.3
6.1
4.5
1.6
22
10.6
7.4
6.2
2.8
3.4
4.6
1.6
4.0
2.2
4.8
5.03.0
9.2
City of Palo Alto Appendix B, Page 19
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 8: Office Vacancy by Months - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1
12
10
8
6
4
2
0
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Linear (#REF!)Linear (Palo Alto
Downtown
(CD-C/GF))
Linear (Palo Alto
El Camino Real – California Ave
(CN, CS))
Linear (Palo Alto
El Camino Real – South)
Linear (Palo Alto
Midtown
(CN/GF))
Linear (Los Altos
CRS Zone)
Linear (Santa Monica
Main Street)
Linear (Palo Alto
California Ave
(CC2/R))
Linear (Palo Alto
El Camino Real – Town & County
(CC))
City of Palo Alto Appendix B, Page 20
PALO ALTO RETAIL REVITALIZATION STUDY
development projects, including those with specific income thresholds or
fewer than 20 dwelling units.
AB 2097 does not prohibit off-street parking from being built if that is
desirable. Voluntary parking may be provided at a ratio less than what
would otherwise have been required by the Zoning Ordinance.
Introduction
Purpose
AB 2097 Parking Relief AreasThe purpose of this study is to review the implications of the recently
adopted Assembly Bill (AB) 2097 on the City of Palo Alto’s parking
regulations and management strategies, the adequacy of the existing
parking inventory and potential impacts on retail establishments.
The study areas subject to relief from enforcement of minimum parking
standards provided by AB 2097 are shown in Figure 1 and described below.
Detailed maps for each area can be found in Attachment 3.
This parking review was conducted for the four major retail areas and
corridors in Palo Alto: Downtown Palo Alto/University Avenue, California
Avenue, Midtown, and the El Camino Real corridor. The study area
boundaries are shown in Figure 1. Parking supply and occupancy data is
based on limited city survey data from 2018 and 2019. The study areas
included public on- and off-street parking. Downtown and California Avenue
have the majority of the parking capacity, which resulted in their being the
primary focus of the analyses and recommendations.
Downtown/University Avenue: The Downtown/University Avenue study
area is within a half-mile of the Palo Alto Caltrain Station and the Palo Alto
Transit Center and hence is subject to AB 2097. This High-Quality Transit
Area nearly encompasses all but a half-block with 16 parcels of the
Downtown/University Avenue commercially zoned (CD-C) study area.
California Avenue: The entire California Avenue study area is within a half-
mile of the California Avenue Caltrain Station, a High-Quality Transit Stop,
and hence is subject to AB 2097 provisions.
AB 2097 Summary Midtown: Midtown is not within a half-mile of a High-Quality Transit Stop
and therefore is not impacted by AB 2097. Development in this area is
subjected to the parking standards set forth in the City’s zoning code.AB 2097 was signed by Governor Gavin Newsom in September 2022, and
went into effect January 1, 2023. AB 2097 prohibits public agencies from
imposing minimum automobile parking requirements on most types of
development within a half-mile of a major transit stop. AB 2097 does not
apply to projects that designate any portion of the project as a hotel, motel,
bed and breakfast inn, or other transient lodging use, or reduce parking
spaces designated for this purpose. AB 2097 does not reduce, eliminate, or
preclude the enforcement of any requirement for parking spaces that are
accessible to persons with disabilities or electric vehicle spaces and supply
equipment for new multifamily residential or nonresidential development
that is located within one-half mile of public transit. Additionally, AB 2097
does not affect event center parking requirements for employees and other
workers as required by local ordinance.
El Camino Real Corridor: The northern portion of the El Camino Real
corridor, north of Acacia Avenue which includes Town and Country and
areas around California Avenue, is within a half-mile of the California
Avenue Train Station, a High-Quality Transit Stop, and hence is subject to AB
2097 provisions. AB 2097 is not applicable to the rest of the corridor. There
are over 200 commercial parcels where the City can continue to impose
minimum parking requirements, between Acacia Avenue and Los Altos
Avenue.
The bill authorizes jurisdictions to impose or enforce minimum automobile
parking requirements on a housing development project if the public agency
makes written findings, within 30 days of the receipt of a completed
application, that not imposing or enforcing minimum automobile parking
requirements on the development would have a substantially negative
impact, supported by a preponderance of the evidence in the record, on the
public agency’s ability to meet its share of specified housing needs or
existing residential or commercial parking within 1/2 mile of the housing
development. These findings cannot be made against certain housing
City of Palo Alto Appendix C, Page 1
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 1: AB 2097 Parking Relief & Study Areas
City of Palo Alto Appendix C, Page 2
PALO ALTO RETAIL REVITALIZATION STUDY
Existing Conditions
Parking Supply
At the time of this study, there are approximately 6,677 total public parking
spaces, which includes public parking lots, public parking garages and on-
street spaces within the four retail districts in the study area. Of these, 2,125
(32%) are on-street spaces and 4,552 (68%) are off-street public parking
spaces. Detailed maps and tables for each area can be found in Attachment
2. These are summarized in the following table.
Table 1: Study Area Public Parking Supply
Public Parking
Study Area On-street Parking*Off-street Parking Total per Study Area
4,255
Notes
76 percent of off-street parking is provided by structured parking.
Excludes 14 spaces as a result of permanent vehicular closure of a segment of
Ramona Street, between Hamilton Avenue and University Avenue. Parking data
received from Office of Transportation based on 2019 survey data.
62 percent of off-street parking is provided by structured parking.
Excludes 65 spaces as a result of permanent vehicular closure of California Avenue,
between El Camino Real and Birch Street). Parking data received from Office of
Transportation based on 2019 survey data.
Downtown/ University Avenue 1,035 3,220
California Avenue
Midtown
756
25
1,239
93
1,995
118 All off-street parking spaces are provided by parking lots. Parking data has been
counted manually from Google Earth (February 2024).
One public parking lot was identified; however, it provides parking for the
Stanford/Palo Alto Community Playing Fields and was not counted. It should be
noted that the Palo Alto City Council is considering a resolution to remove parking
on El Camino Real to install bike lanes as a part of the upcoming repaving project
per Caltrans’ request. Parking data derived for the study area from April 1, 2024
El Camino Real 309 0 309
staff report (item 11)presented to City Council,
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14217.
Total per Parking Type 2,125 4,552 6,677
City of Palo Alto Appendix C, Page 3
PALO ALTO RETAIL REVITALIZATION STUDY
Outreach
about parking supply, adequacy, regulatory approach, impacts and
responses to AB 2097, and recommendations.
x
x
Costs of issuance or debt service associated with bonds, notes or
other security instruments issued to fund transportation
improvements identified.
Reimbursement for administrative costs incurred by the City in
establishing or maintaining the transportation impact fee reserve
account required by this Chapter, including, but not limited to, the
cost of studies to establish the requisite nexus between the fee
amount and the use of fee proceeds and yearly accounting and
reports.1
This study included outreach to business owners and peer cities to obtain
input on parking issues and regulatory approaches and recommendations
to inform this study.Santa Monica, CA
The City of Santa Monica has developed a robust parking program that
maintains the walkable character of the downtown while providing ample
parking for those who need it. Prior to the adoption of AB 2097, the City
eliminated minimum parking requirements for a majority of active uses in
the downtown. The City also developed 10 public parking structures in the
downtown district funded by in-lieu fees for businesses, which provide
plenty of parking for the area. The following describes a few of Santa
Monica’s parking demand management strategies.
Stakeholder Input Summary
Interviews were conducted with six business/property owners who operate
their businesses in Palo Alto to identify any regulatory constraints they have
experienced. The list of business and property owners that were
interviewed can be found in Appendix A of this report. The following is a
summary of the comments, issues, and concerns regarding parking.It should be noted that the City of Palo Alto also has a Citywide
Transportation impact fee (Chapter 16.59 of Municipal Code). These funds
are expended only on the installation, acquisition, and construction of
eligible citywide transportation enhancement including but not limited to
bicycle and pedestrian improvements, and roadway and intersection
improvements. Citywide transportation enhancements do not include
intersection improvements designed primarily to accommodate increased
traffic generated by a specific development or the addition of through-
traffic lanes designed for primary use by private motorized vehicles.
1. Excessive in-lieu parking fees.
2. Allow parking transfer between uses.Unbundling Parking: One parking strategy Santa Monica uses is unbundling
parking. The municipal code requires that parking spaces be leased or sold
separately from residential or commercial structures. This way, non-drivers
are not required to pay for parking they do not need, and the parking spaces
that exist will be used more efficiently. For commercial developments,
requiring that parking be unbundled helps facilitate the State’s Parking
Cash-Out Program.
3. Unable to add parking for a change in use.ꢀ ꢀ
4. City staff parking is occupying valuable off-street parking spaces.
Customers have to park on-street in the neighborhoods instead of
the garages.
5. Need more flexible parking regulations when it is not feasible to
provide required on-site parking.Transportation Demand Management Plan Requirements for New
Developments: The City of Santa Monica also requires Transportation
Demand Management (TDM) plans for new developments with 16 or more
residential units or at least 7,500 commercial square feet.2 Strategies to
reduce vehicle travel may include both programmatic measures and site
improvements.
6. There is ample parking in California Avenue.
7. On-street parking time limit is a hindrance for employees.
8. Hard for employees to get permits for the garages due to limited
number of permits available.
Transportation Impact Fees: Santa Monica has a transportation impact fee
program that requires developers to pay a fee based on the number of
residential units or on the amount of square footage for nonresidential
developments. Establishing this program required a nexus study9. Provide range of times for pricing to accommodate a mix of users.demonstrating the relationship between the expected transportation
impacts of new developments and the fees required to address those
impacts through transportation improvements and trip reduction
strategies. Santa Monica utilizes the funds from transportation impact fees
for projects that reduce vehicle traffic which also helps manage parking
demand. Such expenditures may include, but are not necessarily limited to
the following:
It should be noted that the comments 1, 2, 3 and 5 summarized in the list
above are no longer applicable for AB 2097 implications areas. Also permit
availability was an issue pre COVID-19 pandemic. Since then, the demand
has decreased for parking permits.
Palo Alto also has TDM requirements per Section 18.52.050 (d) of Municipal
Code that grants the Director of Planning and Development Services the
authority to require including TDM strategies for any project requesting a
reduction in parking or generating 50 or more net new weekday (AM or PM
peak hour) or weekend peak hour trips.Peer City Parking Management Best Practices Los Altos, CAxReimbursement for all direct and indirect costs incurred by the City
to construct transportation improvements pursuant to this Chapter,
including, but not limited to, the cost of land and right-of-way
acquisition, planning, legal advice, engineering, design,
construction, construction management, materials, and equipment.
The following are parking management best practice strategies identified
from the following jurisdictions through staff interviews (Cities of Santa
Monica and Los Altos) and research (City of Pasadena). City staff were asked
The City of Los Altos has a three-block by three-block downtown with two
parallel commercial corridors, referred to as the Downtown Triangle. This
retail district includes mostly single-story retail and restaurants, which is
comparable in scale and character to California Avenue in Palo Alto. The City
1 Santa Monica Municipal Code- Section 9.66.070, Accessed May 1, 2024,2 Transportation Demand Management: a set of strategies aimed at improving
transportation efficiency, reducing congestion, and promoting sustainable travel
options.https://ecode360.com/42752344#42752425
City of Palo Alto Appendix C, Page 4
PALO ALTO RETAIL REVITALIZATION STUDY
owns six acres of parking in the form of parking plazas and smaller lots (10
total) located north and south of the two commercial streets, which along
with on-street parking provide all of the parking for the existing uses. The
following describes a few of Los Altos’ parking strategies.
Parking Maximums and Public Parking in Transit-Oriented Development
Areas: Pasadena’s Municipal Code establishes maximum parking
requirements for new development in its transit-oriented development
areas. The strategy of limiting parking provision is meant to help the City
achieve long-term sustainable mobility goals and reduce private vehicle
ownership and use. The City allows an exception for commercial parking in
excess of the maximum, provided that the parking is available for public use,
that signs advertise the availability of public parking on the property, and
that rates do not exceed the City garage rates by more than 150 percent. In
this way, parking maximums can help incentivize the provision of publicly
available parking3.
Customer Parking Permits - "Yellow Book Passes": Los Altos offers
downtown businesses the option to purchase a book of 25 all-day parking
permits at a $25 fee, to be used in any of the 10 downtown parking plazas.
Parking is free downtown, but is subject to time limitations ranging between
20 minutes and 3 hours. The passes allow customers to exceed the time
limits in the respective off-street parking lots. Permits are expected to be
provided to customers free of charge and are not to be resold to customers.
Downtown Employee Parking Permit Program: This program provides all-
day parking for downtown business owners and employees in designated
spaces on an annual and quarterly basis at $100 and $40 fee respectively.
Pasadena, CA
The City of Pasadena has a thriving business district, Old Pasadena, which
includes shopping and dining establishments. The following describes a few
of Pasadena’s parking demand management strategies.
Park and Walk: Pasadena parking rates are more expensive for on-street
parking than for its Park and Walk garages. The Park and Walk garages were
intended to provide those more convenient on-street spaces for customers
visiting specific businesses. The following lists the City’s parking rates.
x
x
x
The on-street metered rate in Old Pasadena is $1.25 per hour and
$0.75 per hour on the edges of Old Pasadena.
The Park and Walk garages are $1 for the first 2 hours; $2 per hour
thereafter; $12 daily max.
Visitors can use the Passport Parking app, which allows a driver to
pay for the metered parking, extend the parking sessions from
anywhere, and get reminders for time limits.
3 Transit Oriented Development Amendment, Accessed May 1, 2024,https://www.cityofpasadena.net/Planning/Transit-Oriented-Development-Amendment/
City of Palo Alto Appendix C, Page 5
PALO ALTO RETAIL REVITALIZATION STUDY
Findings Table 2 provides the parking supply and occupancy ratio for the study areas.
The following findings listed here are relative to 2024 data received from
the City.
average of 50% leaving many buildings underutilized. The lack of
office utilization has also led to a decrease in overall parking
demand.” 41. Parking Availability
There is significant public parking availability in the study areas. The
stakeholders that were interviewed expressed no concern regarding parking
availability. Data received from City’s Office of Transportation (2023) show
that the average sale of parking permits per month in Downtown was 1,989
out of 3,878 available permits (51 percent) and for California Avenue they
sold 510 out of 1,075 available permits (47 percent). A parking occupancy
study conducted in 2019 (pre-COVID-19) by the Palo Alto Office of
Transportation indicated occupancy of 47 to 76 percent in the Downtown
area for off street public parking spaces, with the highest occupancy around
noon. The same study indicated on California Avenue area ranged between
35 to 88 percent with peak occupancy during noon. A majority of this
occupancy can safely be assumed to be from office workers in the pre-
COVID-19 era. Hybrid schedules and vacant office space has significantly
reduced the parking demand post-COVID-19. While a parking demand study
has not been done for the commercial areas in Palo Alto post-COVID-19
except for El Camino Real, the interview with the Office of Transportation
indicated that there is ample availability of parking of more than 40 percent
in parking garages in both Downtown and California Avenue area.
x There is excess capacity in the Downtown even during the peak hour
with 76% occupancy and a 3.7% vacancy rate in 2019. Hence, there
is a growth potential of 9% in Downtown. Note that the vacancy rate
in Downtown in 2024 is 16.5% compared to 3.7% in 2019.
x There may be the possibility of growth in both Downtown and
California Avenue areas without building new parking since the
potential lack of office utilization may have led to a decrease in
overall parking demand. More up-to-date data is required to
determine change in parking demand.x There was optimum parking capacity during the peak hour with 88%
occupancy and 6.7% vacancy in 2019. Parking management
strategies can be applied to manage parking to keep it at an
optimum level. Note that the vacancy rate in Downtown in 2024 is
11% compared to 6.7% in 2019.
2. Parking Assessment Districts
AB 2097 essentially invalidates the Downtown/University Avenue Parking
Assessment District regulated by Section 18.52.070 of the Palo Alto
Municipal Code. Since the commercial and residential uses in the affected
area are no longer required to meet the minimum one parking space for
each 250 gross square feet of floor area requirement provide parking,
rendering the parking assessment district in the affected areas not
enforceable or applicable. Downtown/University Avenue has a Parking
x It should be noted that the data is from 2019 when hybrid work was
not prevalent. The shift towards hybrid work and flexible
workspaces due to the pandemic has led to a decrease in overall
parking demand. As employees split their time between home and
the office, fewer people are commuting daily, resulting in less
pressure on parking spaces while occupying office space.
"According to a survey by Leesman, 66% of employees expect to
work from their organization’s workplace two days or less per week.
While many companies are still perfecting and evolving their
working models, office occupancy hovers around a nationwide
Assessment District regulated by Section 18.52.070 of the Palo Alto
Municipal Code5, which states that,
“Any new development, any addition or enlargement of existing
development, or any use of any floor area that has never been
assessed under any Bond Plan G financing pursuant to Title 13, shall
provide one parking space for each 250 gross square feet of floor
Table 2: Parking Supply and Occupancy Ratios
Growth Potential at
85% 0ccupancy
(2019)
Floor Area
Vacancy Rate
2019*
Floor Area
Vacancy Rate
2024*
Total Public
Parking
(2024)
Public Parking
Supply Ratio
per 1,000 SF
(2019)
Public Parking
Occupancy Ratio
per 1,000 SF
(2019)
Total Floor Area-
(SF)*
Off-Street Public On-Street PublicArea Peak Hour Public
Parking
Occupancy***
Parking Parking
Downtown/
Avenue**
University 2,900,000 3.7%16.5%3,220 1,035 4,255 76%1.47 1.12 9%
California Avenue
El Camino Real
Midtown
1,000,000
1,306,000
149,000
6.7%
2.2%
1.9%
11.0%
9.9%
8.6%
1,239
0
756
309
25
1,995
309
88%
47%
2.00
0.24
1.76
0.11
-3%
NA****
93 118
Notes: * Floor area and vacancy rates are for all property types based on CoStar classification and include office, retail, multi-family, hospitality, health care, specialty, industrial, sports, and entertainment.
** In 2019, 52 percent of total Downtown off street parking spaces were restricted to permit-only parking. Eight of the 19 parking facilities did not have any permit-only parking. The percentages of permit parking spaces in the remaining 11 facilities varied
between 32 and 98 percent.
***Peak hour occupancy for both Downtown and California Avenue area was during noon based on 2019 data received from the City. Hence, the worst-case scenario is analyzed. Due to lack of data availability peak hour occupancy for off-site spaces was applied
to on-street spaces for Downtown and California Avenue. Data for El Camino Real is from Staff Report #2403-2745 which refers to data collected on Saturday February 24, 2024, from 1pm-2pm. No occupancy data is available for Midtown area.
**** Growth potential cannot be calculated confidently since off-street parking is unknown and on-street parking is a very small proportion of the total parking demand.
4 How Hybrid Work has Impacted Parking, January 23, 2024, Accessed April 24,2024, https://www.vendpark.io/post/how-hybrid-work-has-impacted-parking
5 Palo Alto Municipal Code, Accessed February 7, 2024,https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-81074.
City of Palo Alto Appendix C, Page 6
PALO ALTO RETAIL REVITALIZATION STUDY
area, except as may be exempt from such requirement… In
connection with any expansion of the supply of public parking spaces
within the CD commercial downtown district, the city shall allocate
a number of spaces for use as "in-lieu parking" spaces to allow
development to occur on sites which would otherwise be precluded
from development due to parking constraints imposed by this
chapter. Off-site parking on such sites may be provided by payment
of an in-lieu monetary contribution to the city to defray the cost of
providing such parking.”
The RPPP areas in the Downtown study area are shown in Figure 2. RPPP
requires all vehicles to have a permit to park on designated streets for more
than two hours between 8 a.m. and 6 p.m., Monday through Friday. A
permit is not needed to park for less than two hours. AB 2097 does not
directly impact the existing RPPP areas because it specifically targets
minimum parking requirements for new developments near transit stops.
Existing residential permit parking regulations can remain unaffected by AB
2097.
Installing conspicuous signage is essential. There are several signs indicating
RPPP zone in Downtown. However, some signs are not visible due to the
vegetation growth. Signs are also small, and some information is displayed
in small fonts that can easily be missed (refer to Figure 3). Enhanced design
and proper placement can make these signs more visible. It is also important
to indicate the consequences on the signs. Additionally, educating both
residents and visitors about the RPPP hours and consequences is crucial.
Effective communication ensures that visitors understand the rules and
potential repercussions.Figure 2: Downtown Permit Parking AreasBased on stakeholder interviews, the participants were more concerned
with parking regulations and fees than availability of existing parking
needed to support business.
It should be noted that a pending SB 834 that was introduced during the
2023-2024 legislative session, if passed, will prohibit local authorities from
issuing permits for preferential parking privileges to residents or vendors of
developments within 1/2 mile of public transit and exempt developments
from parking minimums. The bill would require the local authority to revise
the boundaries of any such preferential parking district to exclude all
preferential parking within 1/2 mile of public transitǤ6
3. Curb Parking Space Management
It is expected that AB 2097 will reduce the creation of new off-street parking
spaces. This reduction may create more competition for limited on-street
parking spaces. Among other things, reducing the number of parking spaces
increases competition for the curb space from residents that may want to
use on-street parking spaces, employees and visitors looking to park, and
rideshare drivers dropping off the passengers. In addition, curb space is used
for bike parking, parklets, landscaped islands and so on.
Figure 3: Downtown Permit Parking Signage
While there may be parking spaces in garages and lots, there will always be
competition for on-street spaces that are be more convenient. The City
currently regulates the long-term use of curb space in Downtown and
California Avenue areas by imposing a two-hour time limit. The City also has
designated bike spaces allocated along University Avenue and California
Avenue.
Curb space is also covered by parklets- outdoor dining area using parking
spaces. These have become prevalent during COVID-19 pandemic and are
well received by the patrons. These also create much needed vibrancy in the
area. However, they reduce the number of spaces available for parking.5. Retail Locations Outside of the AB 2097 Areas
Retail locations outside the designated AB 2097 areas are not subject to the
parking reduction requirements specified by this law. These areas can
continue to follow existing parking regulations without the constraints
imposed by AB 2097. Additionally, sixteen parcels in Downtown area are just
outside the AB 2097 radius and will need to comply with parking regulations
per zoning code. These parcels are at a disadvantage compared to rest of
4. Residential Permit Parking Program
The Palo Alto Residential Permit Parking Program (RPPP) aims to provide
parking availability for residents and employees living and working in RPPP
areas. The RPPP allows residents and employees to obtain permits for on-
street parking. These permits grant permit holder a priority access to on-
street parking spaces within designated zones for certain time periods.
However, despite the RPPP designating specific hours for residents, visitors
may still choose to park in these zones due to the lack of alternative options
or lack of knowledge of RPPP zones. The City must actively enforce RPPP
regulations to discourage unauthorized parking. Regular patrols, ticketing,
and penalties can serve as deterrents.
6 SB 834: Vehicles: preferential parking: residential, commercial, or otherdevelopment project. Accessed May 1, 2024,https://digitaldemocracy.calmatters.org/bills/ca_202320240sb834
City of Palo Alto Appendix C, Page 7
PALO ALTO RETAIL REVITALIZATION STUDY
the parcels within Downtown. For equity purposes, it is advised that the City
consider extending the provisions of AB 2097 to these parcels.
maximums to incentivize public parking provision, instituting employee
parking programs, and implementing demand-based pricing.
parking reductions as a tool to incentivize desired uses or improvements.
This possible tool will be very limited or not otherwise available in areas
covered by AB 2097 provisions.6. Peer City Management Strategies 7. Eliminates Possible Incentive Tool
Parking management strategies from peer cities include integrating parking
with TDM development standards, unbundling parking, establishing parking
By removal of the parking requirements, AB 2097 creates and incentive for
new development within the affected areas. However, many cities use
City of Palo Alto Appendix C, Page 8
PALO ALTO RETAIL REVITALIZATION STUDY
Recommendations Figure 4: Downtown / CD-C Zoned Parcels Outside AB 2097
AB 2097 will dramatically limit and reduce the creation of new privately
constructed or funded parking spaces associated with new or expanded
development within the affected areas. This will require a shift from
creation of new parking with development projects to a focus on
management and optimization of the existing parking inventory to balance
the supply of parking with the demand for parking from existing and future
uses and development.
Management and optimization will require ongoing monitoring of the use
of the existing supply. The supply includes not only public parking garages,
surface lots and on-street spaces, but also the private off-street parking.
This section will discuss a number of the tools and methods to manage and
optimize parking both in and outside of areas affected by AB 2097.
Based upon the findings of this report, the following section provides further
detail of specific recommendations for the identified impacts on parking for
retail business in the four study areas of Palo Alto.
1. Extend AB 2097 to Entire CD-C Zone for Equity
Within Downtown, there are 16 parcels in the CD-C district on University
Avenue that lie just northeast of the half-mile radius from a high-quality
transit stop that are not exempt from the parking requirements by AB 2097
(refer to Figure 4). Unless the provisions of AB 2097 are extended, these
parcels will remain subject to minimum parking requirements and the
Commercial Downtown Assessment District standards of 18.52 of the
PAMC. To ensure equitable development conditions for all parcels in the
Downtown area, it is recommended that uniform regulations be applied to
the entirety of the CD-C districts in the Downtown area.
2. Allow Retail Flexibility Without Requiring Additional Parking
In retail areas outside the influence of AB 2097, restrictions on retail
conversion to retail or retail-like uses (for example, changing a boutique
store into a restaurant or art gallery) can be removed due to provision of
parking in accordance with the new use as long as the square footage is not
increased. This will remove restrictions on developers and allow them to
experiment with new uses to fill in vacancies.
City of Palo Alto Appendix C, Page 9
PALO ALTO RETAIL REVITALIZATION STUDY
3. Parking Management & Optimization The City can use time limits and parking fees to manage and balance the use
and occupancy of the parking supply at or near the optimum levels. Shorter
parking periods can encourage more turnover and higher hourly parking
fees are generally increased in the most popular areas while longer parking
periods and lower parking fees are allowed in less popular areas.
unused, it will reduce the perception of a parking shortage and need to
oversupply parking. The City could collaborate with business owners and
employees to understand parking needs and work schedules.Based on the initial findings, there is currently an ample supply of parking to
absorb significant new development and to fill existing vacancies in both
Downtown and California Avenue. However, as redevelopment occurs, the
combination of intensification and the lack of parking requirements due to
AB 2097 will begin to impact the existing parking supply. Optimum parking
occupancy is approximately 85%. This ensures excellent utilization of a
precious resource, but adequate availability to ensure reasonable access
without excessive search and delay7. Beyond this point, parking availability
becomes strained, and visitors may find it challenging to locate suitable
parking spaces. When parking spaces are consistently occupied beyond this
threshold it can lead to:
During interviews, the stakeholders expressed concerns about employees
encountering challenges when obtaining permits for parking garages. These
permits come in various types (three-month, six-month, and annual) and
can be purchased during specific periods of the year. In addition, the City
charges flat $8 daily rate for garages and lots beyond the free 2-to-3-hour
parking. Their suggestion is that the City should offer a variety of pricing
options for different time periods. It is recommended that the City work
with business owners to find solutions that are acceptable to both City and
business owners.
Recommendations 3 to 9 listed in this section include other methods to help
manage and optimize the parking resources.
4. Develop Ordinance to Unbundle Parking
AB 1317, passed in October 2023, focuses on unbundling parking in
California, requiring owners of qualifying residential properties8 to separate
parking costs from rent, i.e., renting or selling parking separately rather than
automatically including it with the price of building space. The law goes into
effect on January 1, 2025. Unbundling parking is the set of policies and
actions to create a balance between the supply and demand of parking,
reducing the inefficiencies that result in both high concentrations of
localized parking demand in some areas and underutilized spaces in other
areas.
x
x
Inconvenience: Visitors may struggle to find available parking spots.
Reduced Foot Traffic: High parking demand might discourage
potential customers.
Stakeholders also expressed that the time limit for on-street parking poses
challenges for employees. As previously recommended, employees should
refrain from using on-street parking spaces, reserving them instead for
visitors. Educating business owners about the impact of employee use of
on-street parking could foster an understanding of the necessity for parking
in off-site garages and parking lots.
x Business Impact: Commercial areas could lose business due to
parking constraints.
In order to understand this impact, it is recommended that the City conduct
a parking supply and demand study of these areas at least once a year or as
significant development or changes to mobility options occur in these areas.
Below are some parking trends and factors to explore in such a study.
Benefits of unbundling include:6. Pursue Shared-Use Agreementsx
x
x
The parking spaces that exist will be more efficiently used.
Non-drivers are not required to pay for parking they don’t need.
The market value of land used as parking becomes clear.
Owners of private parking facilities may be willing to enter an agreement
that allows public parking outside of certain established hours. For example,
if adequately compensated, offices may be willing to allow public parking in
the evenings and on weekends, or religious institutions may be willing to
allow public parking on weekdays. The City can facilitate shared parking
between landowners by creating ready-to-use shared parking agreement.
On-Street and Off-Street Parking
Unbundling is especially helpful in areas that are not subject to minimum
parking requirements, which now includes most of the Downtown and all of
California Avenue study areas, due to their proximity to High Quality Transit
Stop as defined by AB 2097. The success of this strategy also hinges on
parking management, which seeks to ensure that concentrated locations of
high parking demand are efficiently disbursed to locations where parking
availability is plentiful.
x
x
What is the supply and demand of on street and off-street parking
conditions during the peak hours, on weekdays, and on weekends?
Who are the parking user groups using these spaces—customers,
business owners, employees, delivery drivers, or others?The City can enter into parking agreements with the landowners to use
private parking during hours that it typically goes unused. These areas can
be advertised on-site and, on the website, as available parking spaces during
certain times of the day.
Peak Parking Demand
x
x
What time does peak parking demand occur on a typical weekday
and on a typical weekend?
What is the overall parking occupancy rate for the study area on
these typical days?
5. Create an Employee Parking Plan and Program 7. Paid Parking Program
Businesses can encourage employees not to park in the most convenient
customer parking spaces. If patrons must drive around the block several
times to find parking, they could potentially leave to seek another similar
business with better parking space options. This situation often arises
because employees use the on-street and off-street spaces that are most
convenient to business patrons. If employees are encouraged to not park in
these parking spaces and instead use the spaces that would otherwise be
Paid on-street parking can effectively increase turnover rates and the supply
of convenient parking spaces. Both California Avenue and University Avenue
offer free on-street parking for the first two hours and then the visitors mustTurnover of Parking Spaces move their vehicle. Downtown has a system of color zones-x How long are cars staying and how often are spaces turning over
and where?
purple, coral, lime, and blue, once the time limit expires in a given color
7 The High Cost of Free Parking, Donald Shoup.
8 The bill would define “qualifying residential property” as any dwelling or unitthat is intended for human habitation that (1) is issued a certificate of occupancy
on or after January 1, 2025, (2) consists of 16 or more residential units, and (3) is
located within the County of Alameda, Fresno, Los Angeles, Riverside,Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta, or Ventura.
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1
317, Accessed April 29. 2024.
City of Palo Alto Appendix C, Page 10
PALO ALTO RETAIL REVITALIZATION STUDY
zone you must move your vehicle out of that zone. Reparking is not allowed
in the same zone on same enforcement day once the time limit expires9.
alternative source of access to the single occupant vehicle as well as a first,
last, and/or only mile link to destinations, especially for locals. These are
essential ingredients of TDM strategy. The report found that there is a
robust regional bus network, but there is a lack of bus redundancy in parts
of the City around neighborhood serving districts. This gap is being
addressed to some degree with the recently instated on-demand transit
service pilot program. While there is a robust bicycle network, some critical
routes connecting commercial districts with neighborhoods and other
destinations lack adequate signage and lane markings. Lastly, there is no
micro mobility program for shared bicycles and/or scooters, which are now
common and widely used services for people of vastly ranging ages and
socioeconomic status.
As new technologies emerge, it is advised that the City explore and
implement technologies that can deliver real time information via an app or
website. These can be applicable to parking garages, lots and on-street
parking spaces and can help patrons find and receive directions to the
nearest available space.
The off-street parking is free for first 2 to 3 hours depending on the lot or
garage. It jumps to a flat rate of $8 per day after that. The City could
implement incremental increase in rates instead if a flat $8 per day10. This
recommendation was brought to the PTC in 2019. At the time of
recommendation, the flat rate was $25 per day. This was reduced to $8
during COVID 19 pandemic.
This strategy is also applicable for areas not covered by AB 2097.
10. Improve Signage and Wayfinding for Parking
Effective signage ensures visitors can find their way without confusion. Palo
Alto has signage directing to the parking areas, but they don’t provide
information on parking availability in particular garages or lots or directions
to particular garage or lot.
It is recommended that the City evaluate implementing a paid metered on-
street instead of moving the vehicle every 2 hours when a parking utilization
threshold is reached. While colored zones system may be a financially viable
option for frequent turnover it requires familiarity and can be confusing for
the visitors who may not be aware of the zones.The report recommended several strategies under Guiding Principle 2, all of
which will help the City enhance its TDM strategy and reduce the need for
parking.
Figure 5: Downtown Parking Signage
Similar to Pasadena, the City of Palo Alto can also implement higher rates
for on-street parking and lower rates for public garages and lots to
encourage long-term visitors and employees to park in the off-site garages
and lots and leave more convenient parking for short-time visitors.
Guiding Principle 2: Improve accessibility by embracing walking
and biking solutions to/from/within all of the City's commercial
districts and addressing parking policies and systems.
8. Enhance the City’s Transportation Demand Management (TDM)
Strategy This strategy is also applicable for areas not covered by AB 2097.
9. Explore Emerging TechnologiesTDM refers to a set of strategies aimed at improving transportation
efficiency, reducing congestion, and promoting sustainable travel options.
These strategies encourage a shift away from single-occupancy vehicle trips
and prioritize alternative modes of transportation, thereby reducing the
need for parking spaces.
Palo Alto actively embraces technology to manage parking efficiently and
enhance urban mobility.Palo Alto has deployed
automated parking guidance system (APGS) in its Downtown and California
Avenue area garages. These systems feature ceiling-mounted multi-
function camera sensors that monitor and display the status of up to six
parking spaces per aisle. Integrated LED indicators indicate space availability
and permitted parking types. This real-time information helps drivers find
available parking spots more efficiently.
Palo Alto’s Municipal Code Section 18.52.050 (d) grants the Director of
Planning and Development Services the authority to require including TDM
strategies for any project requesting a reduction in parking or generating 50
or more net new weekday (AM or PM peak hour) or weekend peak hour
trips. While the developer is limited to the project site for the
implementation of a TDM program/strategy the City can implement a TDM
program/strategy at neighborhood or citywide scale which can have a more
significant impact on the parking impacts in Downtown and California
Avenue.
In 2015, Palo Alto installed 545 Internet of Things (IoT) sensors throughout
the city most of which were installed in Downtown11. These sensors are
equipped to provide real-time data via website and app on vacant parking
spots in the Downtown area. The goal is to reduce congestion and enhance
the overall parking experience. However, there is no information on the
data received by these sensors on the website and there is no app available
to find parking spaces. Currently these sensors are nor active.An assessment by Comprehensive Economic Development Strategy
adopted by the City Council in August 2023 focused on city-wide access and
connectivity of transit and bike networks as these systems provide an
9Downtown Color Zone Parking,
https://www.cityofpaloalto.org/Departments/Transportation/Parking/Parking-
10 Parking Work Plan,
https://www.cityofpaloalto.org/Departments/Transportation/Parking/Palo-Alto-
11 Government Technology, California Cities Turn to Internet of Things to Solve
Parking, Traffic Problems, October 27, 2015,
Programs/Downtown-Color-Zone-Parking, Accessed April 29, 2024 Parking-Action-Plan/Parking-Work-Plan, Accessed April 22, 2024 https://www.govtech.com/fs/california-cities-turn-to-internet-of-things-to-solve-parking-traffic-problems.html
City of Palo Alto Appendix C, Page 11
PALO ALTO RETAIL REVITALIZATION STUDY
Most garages in Downtown and California Avenue area have APGS as
discussed in previous recommendation. Hence, once the patron reaches the
garage, they can have the information on availability of parking. The existing
APGS and emerging technologies can be integrated with digital signage at
strategic locations, that can provide real time information on parking. This
will reduce the time spent to find parking in the retail areas.
11. Curb Space Management will reduce the burden on curb space. Lastly, paid parking effectively
increases turnover rates and the supply of convenient parking spaces.
Leveraging technology to provide real-time information on parking
availability can play an important role in efficient parking management
These strategies are discussed in the Recommendation section of this
report.
Increasing the opportunity to walk and bike to various locations and to
complete short distance trips can alleviate pressure on parking. Adopting a
micromobility program for shared bicycles and/or scooters and providing
adequate curb space may also reduce the need for car for shorter trips.
Other strategies, such as encouraging employees to not park in the most
convenient customer parking spaces and instead use the off-street parking,This strategy is also applicable for areas not covered by AB 2097.
City of Palo Alto Appendix C, Page 12
PALO ALTO RETAIL REVITALIZATION STUDY
Attachment 1 - Parking Requirements
The following are the minimum off-street parking requirements for retail establishments.
Table 3: Minimum Off-Street Parking Requirements
Use Parking Requirement
Retail
Intensive (retail not defined as extensive)1 per 200 sq. ft. of gross floor area
1 per 350 sq. ft. of gross floor area
Extensive (retail with more than 75% of gross floor area
used for display, sales, and related storage, with
demonstrably low parking demand generation per
square foot of gross floor area)
1 space for each 500 square feet of sales, display, or
storage site areaOpen lot
Shopping Center 1 per 275 sq. ft. of gross floor area
Table 4: Minimum Off-Street Parking Requirements for Parking Assessment Districts
Use Parking Requirement
Downtown University Avenue Parking Assessment District
All uses (except residential) 2 1 per 250 square feet
City of Palo Alto Appendix C, Page 13
PALO ALTO RETAIL REVITALIZATION STUDY
Attachment 2 - Existing Parking
Downtown/University Avenue
Figure 6: Off-Street Parking - Downtown/University Avenue Figure 7: On-Street Parking - Downtown/University Ave
City of Palo Alto Appendix C, Page 14
PALO ALTO RETAIL REVITALIZATION STUDY
Table 5: Downtown/University Avenue Public Parking Supply California Avenue
Type Parking Spaces Size (Acres)Figure 8: Off-Street Parking - California AvenueOff-Street Structure
High/Alma South Garage (R)
High/Alma North Garage (Q)
Ramona/University Garage (B)
Bryant/Lytton Garage (SL)
Webster/Cowper Garage (WC)
Civic Center Garage (CC)
Total Off-Street Structure
Off-Street Lot
210
130
0.5
0.8
0.5
1.1
1.4
2.0
6.3
133
681
587
721
2,462
Emerson/Ramona Lot (N)
Cowper/Hamilton (H)
High/Hamilton Lot (P)
Lytton/Kipling Lot (T)
Lytton / Waverley Lot (K)
Hamilton/Waverley Lot (D)
Gilman/Waverley Lot (G)
Gilman/Bryant Lot (E)
Florence/Lytton Lot (F)
Ramona/Lytton Lot (C)
Emerson/Lytton Lot (A)
Emerson/High Lot (O)
Total Off-Street Lot
48
93
0.4
0.6
0.4
0.4
0.7
0.7
0.3
0.9
0.4
0.5
0.5
0.5
6.3
12.6
-
52
52
97
84
53
35
47
52
68
77
758
3,220
1,035
4,255
Total Off-Street
Total On-Street
Grand Total 12.6
City of Palo Alto Appendix C, Page 15
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 9: On-Street Parking - California Avenue Table 6: California Avenue Public Parking Supply
Type Parking Spaces Size (Acres)
Off-Street Structure
Lot 5 - Cambridge E/Garage (A)
Lot 3 - Cambridge W/Garage (B)
350 Sherman Garage (C)
157
182
627
966
0.7
0.7
1.0
2.4Total Off-Street Structure
Off-Street Lot
Lot 9 - Birch/Cambridge (D)
Lot 1 - Cambridge/Park (E)
Lot 2 - Cambridge/Birch (F)
Lot 8 - Sherman/Ash Lot (G)
Lot 4 - Cambridge/Birch (H)
Total Off-Street Lot
28
27
0.2
0.2
0.2
0.8
0.5
1.9
4.3
-
28
103
87
273
1,239
756
1,995
Total Off-Street
Total On-Street
Grand Total 4.3
City of Palo Alto Appendix C, Page 16
PALO ALTO RETAIL REVITALIZATION STUDY
Midtown
Figure 11: On-Street Parking - MidtownFigure 10: Off-Street Parking - Midtown
Table 7: Midtown Public Parking Supply
Type Parking Spaces Size (Acres)
Off-Street Lot
Colorado/Midtown Ct Lot (A)
Total Off-Street Lot
Total On-Street
93
93
0.7
0.7
-25
Grand Total 118 0.7
City of Palo Alto Appendix C, Page 17
PALO ALTO RETAIL REVITALIZATION STUDY
El Camino Real
Figure 12: On-Street Parking - El Camino Real Table 8: El Camino Real Public Parking Supply
Type Parking Spaces Size (Acres)
PAMF Drive to Galvez St. /
Embarcadero Rd.26 -
-Serra St./ Park Blvd. to College Ave.
Sheridan Ave. to San Antonio Rd.
Total On-Street
61
222
309
309
-
-Grand Total
City of Palo Alto Appendix C, Page 18
PALO ALTO RETAIL REVITALIZATION STUDY
Attachment 3 - AB 2097 Relief Areas
Figure 13: AB 2097 Relief Area - Downtown/University Avenue and El Camino Real- Town and Country Figure 14: AB 2097 Relief Area - California Avenue
City of Palo Alto Appendix C, Page 19
PALO ALTO RETAIL REVITALIZATION STUDY
Figure 15: AB 2097 Relief Areas - Midtown Figure 16: AB 2097 Relief Area - El Camino Real s
City of Palo Alto Appendix C, Page 20
PALO ALTO RETAIL REVITALIZATION STUDY
Downtown Commercial (CD)Combining Districts
The CD district is designed to cover the entirety of downtown Palo Alto and
support a wide variety of uses to support local and regional businesses with
the following key objectives:
Retail Shopping (R)
Modifies the CN, CC, and CD districts to allow only retail, eating, and service-
oriented commercial on the ground floors.Introduction •
•
•
•
•
Control the rate and size of commercial development
Preserve and promote ground-floor retail
Enhance pedestrian activity
Pedestrian Shopping (P)A detailed review of the Palo Alto Zoning Ordinance was conducted to
review the permitted uses, development standards, and procedures. The
purpose of the analysis is to identify likely and potential constraints and
opportunities to improve the health and function of retail uses and the main
commercial retail and commercial corridors and provide recommendations
for improvement.
Modifies the CN, CC, and CD districts to require pedestrian site design
amenities, including:Create transitions from commercial to retail uses
Preserve historic buildings •
•
Display windows or retail display areas
The CD district includes the following subdistricts:Pedestrian arcades, recessed entryways, or any covered pedestrian
areas•
•
•
CD-C (Community)
CD-S (Service)Zone Districts •
•
Landscaping or architectural design features
Vehicular restriction on pedestrian areasThere are five primary zone districts with several subdistricts and combined
districts layered on the base districts, as follows:CD-N (Neighborhood)
Neighborhood Commercial (CN)
Figure 1: Palo Alto Layers of RegulationThe CN district is designed to create neighborhood shopping areas primarily
accommodating retail sales, personal service, eating and drinking, and office
uses of moderate size serving and compatible with the immediate
neighborhood.
Community Commercial (CC)
The CC district is designed to create major commercial centers
accommodating a wide range of uses intended to support the greater Palo
Alto and regional community identified in the General Plan.
Community Commercial 2 (CC[2])
The CC (2) subdistrict is designed to modify the site development
regulations of the CC district and has a different approval process compared
to the CC district.
Service Commercial (CS)
The CS district is designed to accommodate local and regional services that
generally require vehicular access and convenience.
Source: Streetsense
City of Palo Alto Appendix D, Page 1
PALO ALTO RETAIL REVITALIZATION STUDY
Ground Floor (GF)Definitions
The district provides design standards when combined with the CD-C
subdistrict and permits the uses allowed in the commercial districts and
subdistricts to promote active, pedestrian-oriented uses, with a high level
of transparency at ground level. Office not allowed.
Formula Retail Business
Retail, personal, or eating and drinking service that has more than 10
locations throughout the United States and are standardized in character
and function, typically known as a franchise or chain. Standardized
merchandise, menu and/or services are defined as having 50 percent or
more of in-stock merchandise from a single distributor bearing the same or
similar markings, and 50 percent or more of menu items identical in name
and presentation with other locations.
Pedestrian and Transit Oriented Development (PTOD)
The PTOD district permits a mix of uses and densities through development
standards as well as providing context-based design criteria standards
aimed to activate and create an attractive pedestrian-level environment
along the California Avenue corridor. The objectives of the PTOD district
include:Retail Service
Retail service in Palo Alto is defined as open to the public during typical
business hours and relates to retail sale, rental, service, processing, or repair
of items intended for consumer or household use. Retail services are further
separated into two categories:
•
•
Supporting use of public transportation
Encouraging a variety of housing types, commercial retail, and
limited office uses
•
•
Encouraging context-based project design •Extensive retail service: A retail sales use that has more than 75
percent of the gross floor area used for display, sales, and related
storage.
Requiring streetscape design elements that support pedestrian and
bike infrastructure
•Intensive retail service: Any retail service use that is not defined as
extensive retail service, including limited food services such as
premade food and packaged items.
Retail-like Use
Retail services and closely related services are open to the public during
typical business hours, and include the following type of uses: eating and
drinking services, hotels, personal services, theaters, travel agencies,
commercial recreation, commercial nurseries, auto dealerships, and
daycare centers.
City of Palo Alto Appendix D, Page 2
PALO ALTO RETAIL REVITALIZATION STUDY
Permitted Uses
The following table details the permitted retail uses for each district, subdistrict, and combining district.
Table 1: Permitted Uses by Area and Zone Dsitrict
PALO ALTO RETAIL ZONING STUDY
Land Use
El Camino Real, Midtown California Ave University Ave El Camino Real Combining Districts
GFR PTOD
(Cal Ave)CN(1)CC, CC(2)CD-C CS (ground floor use restrictions)(ground floor use restrictions)
(Cal Ave)(Univ Ave)
Retail Use
Eating and Drinking Service, except drive-in or take-out
services
Retail Service
Shopping Center
Liquor Store
P
P
P P P
P
P
P
P
P
P
PP
P
P
P
P
PCUP
P
P
Retail-like Services
Hotel
Personal Services
Travel Agency
P
P(6)
P
P(4)
P
P
P
P(3)
P
P
PP(2)
Commercial Recreation
Less than 5,000 sf
Over 5,000 sf
Day Care Centers
CUP(5)
P
CUP(5)
P
P(7)
CUP(7)
P
P
P
CUP
CUP(5)
P
P P
P
P
CUP
CUP
CUP
CUP
CUP
CUP
Business or Trade School
Financial Services (no drive-in)
General Business Service
Learning Center (small)
Formula Retail on California Avenue
Beauty Shops, Nail Salons, Barbershops, Fitness Studios >
1,800 gfa, Small Learning Centers
Professional, and General Business Offices
CUP
CUP
CUP
(6)(4)CUP
P*
CUP(5)
P*
CUP(5)
P
P
P*
CUP(5)Medical Offices
NOTES:
California Ave R Combining District in conflict with this footnote - R Combining District doesn't list and therefore prohibits where explictly allowed with a CUP in CC(2) zone.Conflicts between GF and underlying zone - Combining/overlay supersedes base zone.
PTOD is limited to approximately 2 small properties on/near CalIfornia Ave.FOOTNOTES:
(1) For properties in the CN and CS zone districts, businesses that operate or have associated activities at any time between the hours of 10:00 p.m. and 6:00
a.m. require a conditional use permit (CUP).
(2) Personal services, except the following on California Avenue:
(6) A CUP is required for the following uses when fronting on California Avenue:
(A) fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area; and
(B) learning centers intended for individual or small group settings.
Beauty shops; nail salons; Barbershops; Laundry and cleaning services as defined in Section 18.04.030(114)(B); Fitness or exercise studios exceeding 1,800
square feet in gross floor area; and Learning centers intended for individual or small group settings.
(3) Personal services, except for parcels with frontage on University Avenue, where uses defined in Section 18.04.030(114)(B), (G),(H), and (I) are not permitted.(4) A CUP is required for the following uses when fronting on University Avenue:
A CUP is required for fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area in Town and Country Village Shopping
Center.
(7) A CUP is not required for commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a CUP is alwaysrequired:
(A) fitness or exercise studios, and similar uses; and (A) medical office fronting on University Avenue;(B) learning centers intended for individual or small group settings.(B) commercial recreation uses fronting on University Avenue.
(5) A CUP is not required for medical office or commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which aCUP is always required:* Per 18.16.050(a), Medical, professional, and business offices shall not be located on the ground floor, unless any of the following apply to such offices:1. Occupy a space that was not occupied by retail services, personal services, eating and drinking services.
2. Are located in new or remodeled ground floor area built on or after March 19, 2001, if the ground floor area is devoted to housing, retail services, eating and
drinking services, personal services.
(A) medical office fronting on California Avenue and in the Midtown Shopping District;
(B) commercial recreation uses fronting on California Avenue and in the Town and Country Village Shopping Center.
City of Palo Alto Appendix D, Page 3
PALO ALTO RETAIL REVITALIZATION STUDY
Development Standards an unconstitutional taking of property or otherwise have an
unconstitutional application to the property; orGrandfathered Uses
CN District Office Uses CN, CC, CC(2), CS, and CD districts have development standards for
exclusively nonresidential and mixed-use and residential. The following
table identifies the maximum size of retail establishments by type. A
comprehensive list of the development standards for the CD district can be
found in Table 4.
b. Alternative Viable Active Use. Except in the GF or R combining
districts, an applicant may request that the requirements of the
retail ordinance be adjusted or waived based on a showing that: the
permitted retail or retail-like use is not viable; the proposed use will
support the purposes of the zoning district and Comprehensive Plan
land use designation, and the proposed use will encourage active
pedestrian-oriented activity and connections.
In the CN district, all office uses existing as of August 1, 1989, which were
conforming permitted uses or conditional uses operating subject to a
conditional use permit and exceeding 5,000 square feet in size or 25 percent
of lot area, may remain as legal nonconforming uses and shall not require a
conditional use permit.Table 2: Maximum Size of Retail Establishment by Type
Maximum Size of Establishment (sq ft)CS District Office Uses 4. Exemptions.Type of Establishment
Personal Services
Retail Services, except grocery stores
Grocery Stores
Eating and Drinking Services
Neighborhood Business Services
CN CD
3,000
15,000
20,000
5,000
-
a. A 100% affordable housing project not within the Ground Floor (GF)
and/or Retail (R) combining districts or on a site abutting El Camino
Real (households with income levels at or below 120% of the area
median income).
b. A 100% affordable housing project on a site abutting El Camino Real
in the CN and CS zone districts outside the Retail (R) combining
district(households with income levels at or below 120% of the area
median income and where the average household income does not
exceed 80% of the area median income level).
In the CS district, medical, professional, or general business or
administrative office uses existing on August 1, 1989, and which, as of such
date, were lawful conforming permitted uses or conditional uses operating
subject to a conditional use permit may remain as nonconforming uses and
shall not require a conditional use permit or be subject to termination.
3,000
15,000
20,000
5,000
3,000
Retail Preservation Ordinance 18.40.180
(Relevant portions excerpted)c. A high-density residential or mixed-use project in the CS zone
district, but not within the Ground Floor (GF) or Retail (R) combining
districts, shall be required to replace only 1,500 square feet of an
existing retail or retail-like use. For the purposes of this partial
exemption, high-density shall mean 30 or more dwelling units per
acre.
d. Reconstruction. Any ground floor Retail use existing on or after
March 2, 2015 may be demolished and rebuilt provided that the
portion of square footage used as Retail use on or after March 2,
2015 is not reduced except that Retail square footage may be
reduced by the minimum amount needed to provide access to any
new upper floor and/or lower level.
1. Conversion of Retail and Retail-Like Uses Prohibited.
a. 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.
2. Non-conforming Uses.
a. The requirements imposed by the retail ordinance do not apply to
Retail or Retail-like uses that are no longer permitted or
conditionally permitted in the applicable district.
3. Waivers and Adjustments; and Exemptions.
a. Economic Hardship. An applicant may request that the
requirements of this section be adjusted or waived based on a
showing that applying the requirements of this section would force
City of Palo Alto Appendix D, Page 4
PALO ALTO RETAIL REVITALIZATION STUDY
Parking Requirements
Table 3: Minimum Off-Street Parking Requirements by Use
Minimum Off-Street Parking Requirements Minimum Off-Street Parking Requirements for Parking
Assessment Districts
Use Vehicle Parking Requirement (# of spaces)
For Downtown University Avenue Parking Assessment
District:
All uses (except residential)1 per 250 sf
For California Avenue Parking Assessment District:
Retail Uses1
Intensive 1 per 200 sf of gross floor area 1 per 240 sf of gross floor area
Extensive 1 per 350 sf of gross floor area 1 per 350 sf of gross floor area
Open lot 1 space for each 500 sf of sales, display, or storage site area 1 for each 500 sf of sales, display, or storage site area
Eating and Drinking Services
With drive-in or take-out 3 per 100 sf of gross floor area
facilities
3 per 100 sf of gross floor area
1 per 450 sf of gross floor area
All others 1 space for each 60 gross sf of public service area, plus 1 space 1 per 155 sf of gross floor area
for each 200 gross sf for all other areas.
Personal Services
Hotel/Motel/Inn
1 per 200 sf of gross floor area
1 space per guestroom; plus the applicable requirement for
eating and drinking, banquet, assembly, commercial or other as
required for such uses, less up to 75% of the spaces required for
guestrooms, upon approval by the director based on a parking
study of parking generated by the mix of uses.
1 For residential mixed-use developments in the CD-C zone, CC(2) zone, on CN and CS zoned sites abutting El Camino Real, and on CS zoned sites abutting San Antonia Road between Middlefield Road and EastCharleston Road, the first 1,500 square feet of ground-floor retail uses shall not be counted toward the vehicle parking requirement.
Parking Regulations for CD Assessment District 18.52.070
(Relevant portions excerpted)
residential use. Conversion must not eliminate any existing on-site
parking.
In-lieu parking
2. In connection with any expansion of the supply of public parking spaces
within the CD commercial downtown district, the city shall allocate a
number of spaces for use as "in-lieu parking" spaces to allow
development to occur on sites which would otherwise be precluded from
development due to parking constraints imposed by this chapter. Off-site
parking on such sites may be provided by payment of an in-lieu monetary
contribution to the city to defray the cost of providing such parking.
Criteria to be eligible for in-lieu parking program:
c. Vacant parcels shall be exempt from the requirements at the time
when development occurs. Development shall be exempt to the
extent of 0.3 parking spaces 1,000 square feet of site area, provided
that such parcels were at some time assessed for parking under a
Bond Plan E financing or were subject to other ad valorem
assessments for parking.
On-site parking
1. On-Site Parking Requirement
a. Any new development, addition, or any use of any floor area that has
never been assessed under any Bond Plan G financing pursuant to
Title 13, shall provide one parking space for each 250 gross square
feet of floor area.Off-site parking a. On site parking would impact historic structure
b. Site is >10,000 sf
c. Site is located in an area where curb cuts are prohibited
d. Physical constraints
2. Exceptions 1. Must be within a reasonable distance of the site using it or, if the site is
within an assessment district, within a reasonable distance of the
assessment district boundary and approved in writing by the director of
planning and community environment. Any development occurring on
the site where parking is provided shall not result in a net reduction of
parking spaces provided, considering both the parking previously
provided and the parking required by the proposed use.
a. Square footage for handicapped access, which does not increase the
usable floor area, and square footage for at or above grade parking,
though such square footage is included in the FAR calculations
b. A conversion to commercial use of a historic building shall be exempt
from the on-site parking requirement in subsection provided that the
building is fifty feet or less in height and has most recently been in
City of Palo Alto Appendix D, Page 5
PALO ALTO RETAIL REVITALIZATION STUDY
Table 4: Palo Alto Zoning Comparison Matrix - Santa Monica and Los Altos
SANTA MONICA
ZONING STANDARD/Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#APPROACH PALO ALTO LOS ALTOS
1 Level of regulation – Zone Districts Downtown Districts Zone Districts Zone Districts
Zone Districts
Downtown Commercial (CD)
Neighborhood Commercial (CN)
Community Commercial (CC)
Bayside Conservation (BC) – Third Street
Promenade Area
Neighborhood Commercial (NC)
Commercial Downtown (CD)
•
•
•
•
Main Street Commercial Retail Sales (CRS)
Mixed-Use Boulevard (MUB)
Neighborhood Village (NV)
Transit Adjacent (TA)
Pico Boulevard Commercial Retail Sales/Office (CRS/OAD)
•Community Commercial 2 (CC[2])Ocean Park Boulevard
Montana AvenueService Commercial (CS)
Ocean Transition (OT)
Mixed-Use Boulevard Low (MUBL)
Mixed-Use Boulevard (MUB)
General Commercial (GC)
Wilshire Transition (WT)
Lincoln Transition (LT)
Design Guidelines
2 Overlay Districts Combining Districts Neighborhood Conservation (NC)Loyola Corners Specific Plan (LCSP)
Retail Shopping (R)Purpose of identifying, conserving, maintaining, strengthening, and enhancing a neighborhood’s
cohesive and distinctive architectural or physical characteristics.
LC/SPZ overlay (14.42) applies to CN zoned areas
surrounding Miramonte Ave and Fremont Ave.
Special requirements in addition to base zoning.Pedestrian Shopping (P)
Ground Floor (GF)Off-Street Parking (A)
Intended to provide adequate parking facilities to support important commercial corridors and
neighborhood commercial areas.
Certain restrictions on expansion of existing
office/administrative and retail uses under a
master use permit
Pedestrian and Transit Oriented Development
(PTOD)
Parking requirements encourage of non-
conforming uses to turn over to conforming
uses
Ground floor retail uses encouraged in
LC/SPZ overlay through restricting new net
square footage of other ground floor uses
City of Palo Alto Appendix D, Page 6
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
Active Uses3Ground floor use
regulations/restrictio
ns
Combining Districts
Restaurants, bars/nightclubs/lounges, car
showrooms, offices, personal services,
food and beverage sales, and instructional
services allowed with CUP or specific
limitations.
Active Ground Floor Use and Design 9.11.030(A)
Ground Floor (GF) - The district provides
design standards when combined with the CD-
C subdistrict and permits the uses allowed in
the commercial districts and subdistricts to
promote active, pedestrian-oriented uses,
with a high level of transparency at ground
level.
Active Use Requirement Active uses and active ground floor uses are
required/encouraged in certain commercial
districts.Active use requirements on the ground floor
street frontage on Main Street and Montana
Ave.
Design guidelines to promote active ground
floor uses (e.g. transparency requirements)
Office and residential limited to upper
floors or behind ground floor tenants.•
•
•
•
•
•
•
Cultural facilities;
Sites over 5,000 sq. ft. with existing retail or
restaurant space on the ground floor must
retain the existing sq. ft. of those uses (CD
district)
Food and beverage sales;
Eating and drinking establishments;
Grooming and pet stores;
Banks and credit unions;
Business services;
Franchise restaurants (+150 locations)
prohibited on the ground floor.•Prohibits ground floor office Downtown
and Midtown unless grandfathered.
Retail Shopping (R) - Modifies the CN, CC, and
CD districts to allow only retail, eating, and
service-oriented commercial on the ground
floors.
Office uses restricted to upper floors (CN,
except for new development)
Commercial entertainment, recreation,
and Instructional Services;
Housing restricted to upper floors (CD,
CRS/OAD districts)•Prohibits ground floor office on California
Ave.•General personal services and personal
physical training;
Trade schools restricted to upper floors (CRS,
CRS/OAD districts)Retail Preservation Ordinance (RPO) (18.40.180)•
•
General retail sales; and
Childcare facilities.
Certain uses restricted on ground floor on
Main Street or State Street (CRS district)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.
Minimum ceiling height on ground floor to
promote active uses (CT, CD/R3 districts)Active Commercial Design
Design standards (i.e., façade) for ground floor
street frontage active uses.Retail expansion limited, but more
encouraged than office/administrative uses
in LC/SPZ overlay districtPedestrian-Oriented Design
Design standards to improve the ground floor
level environment for pedestrians.
City of Palo Alto Appendix D, Page 7
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
4 Change of Use/
Intensification
process
Change from retail use prohibited in Ground Floor
(GF) and Retail Shopping (R) combining districts.
Minor Use Permits and Conditional Use Permits (9.41)Certain districts allow commercial expansion only
under specific circumstances or of specific sizes.
Certain districts encourage turn-over of non-
conforming uses in active use areas.
All Minor Use or Conditional Use Permits must meet the following criteria:
•The proposed use is conditionally allowed within the applicable Zoning District and complies
with all other applicable provisions of this Ordinance and all other titles of the Municipal Code.
•
•
•
The proposed use is consistent with the General Plan and any applicable specific plan.
The subject parcel is physically suitable for the type of land use being proposed.
The proposed use is compatible with any of the land uses presently on the subject parcel if the
land uses are to remain.
•
•
The proposed use is compatible with existing and permissible land uses within the district and
the general area in which the proposed use is to be located (e.g. size, intensity, hours of
operation, number of employees, or the nature of the operation).
The physical location or placement of the use on the site is compatible with the surrounding
neighborhood.
•
•
No significant environmental impacts
Not deemed detrimental to the public interest, health, safety, convenience, or general welfare.
5 Retail Definition Retail Service Retail Sales Use Classification 9.51.030 Retail Uses
Retail service in Palo Alto is defined as open to the
public during typical business hours and relates to
retail sale, rental, service, processing, or repair of
items intended for consumer or household use.
Retail services are further separated into two
categories:
General Retail Sales, Small-Scale. The retail sale or rental of merchandise not specifically listed
under another use classification. This classification includes retail establishments with 25,000
square feet or less of sales area; including department stores, clothing stores, furniture stores, pet generally for consumer or household use. Retail
Defined as: uses that predominantly sell products
rather than services, directly to the public, and
supply stores, small hardware, and garden supply/nurseries stores (with 10,000 square feet or less uses are designed to attract a high volume of walk-
of floor area), and businesses retailing goods including, but not limited to, the following: toys,
hobby materials, handcrafted items, jewelry, cameras, photographic supplies and services
(including portraiture and retail photo processing), medical supplies and equipment, pharmacies,
electronic equipment, sporting goods, kitchen utensils, hardware, appliances, antiques, art
galleries, art supplies, and services, paint and wallpaper, carpeting and floor covering, office
supplies, bicycles, video rental, and new automotive parts and accessories (excluding vehicle
service and installation). Retail sales may be combined with other services such as office machines,
computers, electronics, and similar small-item repairs.
in customers and have floor space that is devoted
predominantly to the display of merchandise to
attract customers. Retail businesses may also
provide incidental after-sales services, such as
repair and installation, for the goods sold.
Extensive retail service: A retail sales use that
has more than 75 percent of the gross floor
area used for display, sales, and related
storage.“Extensive retail” as used with respect to
parking requirements, means a retail use
primarily selling large commodities such as
home or office furniture, floor coverings,
stoves, refrigerators, other household
electrical and gas appliances, including
televisions and home sound systems, and
outdoor furniture, such as lawn furniture,
movable spas and hot tubs.
Intensive retail service: Any retail service use
that is not defined as extensive retail service,
including limited food services such as
premade food and packaged items.
General Retail Sales, Medium-Scale. Retail establishments with more than 25,000 square feet -
80,000 square feet of sales area.
General Retail Sales, Large-Scale. Retail establishments with over 80,000 square feet of sales area.Retail-like Use
Retail services and closely related services are open
to the public during typical business hours, and
include the following types of uses: eating and
drinking services, hotels, personal services, theaters,
travel agencies, commercial recreation, commercial
nurseries, auto dealerships, and daycare centers.
“Intensive retail” as used with respect to
parking requirements, means any retail use
not defined as an extensive retail use.
City of Palo Alto Appendix D, Page 8
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
6 Approval Processes
(ministerial, principal
permitted use, CUP,
Special Permits,
Review Procedures – Summary (18.77.050)Administrative Approval (9.39)Design and Transportation Review—Multiple-
Family, Public and Community Facilities, Office
and Administrative, and Commercial Districts
(14.78)
Variance, Conditional Use Permits, and
Neighborhood Preservation Exception
Required for non-housing projects of more than 1,000 square feet, all new construction, and new additions
to existing buildings that do not exceed the following:
•
•
•
Staff - Review
Tier 1 maximum limits;variances, deviations)Staff level review (Director or designee); or
Planning Commission review if larger than
500 sq. ft., 50% increase in size, or increasing
height.
Director – Tentative Decision In Neighborhood Commercial and Oceanfront Districts, 7,500 square feet;
In the Pico Neighborhood Area 7,500 square feet.Planning Commission – Hearing and
Recommendation (upon request)Chapter 9.40 Development Review
•City Council – Final Decision (upon
request)Intended to allow the construction of certain projects for which the design and siting could result in an
adverse impact on the surrounding area.
Required if the following thresholds are met:
Director can require administrative design
review based on special circumstances.
Major Architectural Review Multimodal transportation review (14.78.090)
•Architectural Review Board - Hearing and
Recommendation
Tier 1 maximum limits;Required for projects subject to Planning
Commission design reviewIn Neighborhood Commercial and Oceanfront Districts, 7,500 square feet;
In the Pico Neighborhood Area 7,500 square feet.•
•
Director – Decision Complete Streets Commission review at
public meeting and recommendation to
Planning Commission
City Council – Final Decision on Appeal Chapter 9.42 Variances
Minor Architectural Review Mechanism for relief from the strict application of zoning code where it will deprive the property Variances (14.78.070)
Variances reviewed by Planning Commission
•
•
Staff – Tentative Decision owner of privileges enjoyed by similar properties because of the subject property’s unique and
special conditions.Architectural Review Board - Hearing and
Recommendation (upon request)
at public hearing based on special
circumstances of the property
Property owner must provide required findings to prove special conditions.
•
•
Director – Decision (if ARB hearing is
requested)
Waivers (9.43.40)Use Permits (14.80)Waiver may be granted from the following requirements.
Director or designee initial reviewCity Council – Final Decision on Appeal
Upper-story stepbacks.Use permits reviewed by Planning
Commission at public hearingBuild-to lines.
Active commercial design standards, including transparency.
Active use requirement.Appeals or call-ups to City Council
Unit mix.
Pedestrian-oriented design standards
7 Approving Authority New construction (permitted uses)
Zoning Conformance Review — Director
Conditional Use Permit — Planning
Commission& Approval Times
(Ministerial/Building
department, Planning
Staff, PC, City Council)
Director — Varies
New construction (CUP uses)
Director — Varies
Major remodeling/tenant improvement
Director — Varies
Minor changes
Administrative Approval — Director
Design & Transportation review (minor) —
DirectorConditional Use Permit — Planning Commission
Development Review Permit — Planning Commission
Minor Use Permit — Director Hearing (Zoning Administrator)
Temporary Use Permit — Director
Design & Transportation review (major) —
Planning Commission (with Complete Streets
Commission recommendation)
Minor Modification — Director
Temporary Use Permit — Director
Variance — Planning CommissionDirector — 6+ Months Major Modification — Director Hearing - (Zoning Administrator)
Waiver — Director Hearing (Zoning Administrator)
Variance — Planning Commission
New signage/signage change
Director — 6+ months
City of Palo Alto Appendix D, Page 9
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
8 Permitted Uses Downtown Commercial (CD-C)Bayside Conservation (BC) - Third Street
Promenade Area
Neighborhood Commercial (NC) – Main St, Pico Blvd, Commercial Retail Sales (CRS) – Main St, State St
Montana AveRetail Use
Business, professional, and trade schools
Office-administrative services
Personal services
Commercial Uses Commercial UsesEating and Drinking Services, except drive-in
or take-out services
Animal Care, Sales, and Services
Grooming and Pet Stores
Commercial Entertainment and Recreation
Eating and Drinking Establishments
Retail Service
Shopping Center
Liquor Store
••Restaurants, Full-Service, Limited Service &
Take-Out (2,500 – 5,000 square feet and
smaller, including Outdoor Dining and
Seating)
Private clubs, lodges, or fraternal
organizations
•
•
Cinemas & Theaters
Restaurants, excluding drive-through services
Retail-like Services Convention and Conference Centers Retail
Hotel
Eating and Drinking Establishments
Food Hall (up to 175 seats)
Food and Beverage Sales
Cocktail lounges
Personal Services •Uses which are determined by the
community development director to be of
the same general characterCommercial Recreation – Day Care Centers
Business or Trade School
Financial Services (no drive-in)
Professional, and General Business Offices
Medical Offices
•
•
Farmer’s Market
Liquor Stores
Lodging
•
•
Bed and Breakfast
Hotels and MotelsCommunity Commercial (CC, CC(2))
Retail Use
Personal Services
General Personal Services
Retail Sales
General Retail Sales, Small- and
Medium-Scale
Eating and Drinking Service, except drive-in or
take-out services
•
Retail Service
Shopping Center
Liquor Store
•
Retail-like Services
Hotel
Personal Services
Commercial Recreation – Day Care Centers
Professional, and General Business Offices
City of Palo Alto Appendix D, Page 10
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
9 Conditional/
Limited Uses
Downtown Commercial (CD-C)Bayside Conservation (BC) - Third Street
Promenade Area
Neighborhood Commercial (NC) – Main St, Pico Blvd, Commercial Retail Sales (CRS) – Main St, State St
Montana AveRetail-like Services
New building >7,000 sf
Commercial recreation
Day care centers
Commercial Uses Commercial Uses
Commercial Recreation – Over 5,000 sf
Automobile/Vehicle Sales and Service Eating and Drinking EstablishmentsGeneral Business Service
•
•
Automobile Rental L(10)•Restaurants, Full-Service, Limited Service &
Take-Out (greater than 5,000 square feet,
including Outdoor Dining and Seating)
(10)(11)
Community Commercial (CC, CC(2))Hotels
New Automobile/Vehicle Sales and
Leasing L(8), L(5)Retail-like Services Housing
Commercial Recreation – Less than 5,000 sf Medical and dental clinics or offices >5,000 sf
Business Services L(15)Medical Offices Uses which are determined by the planning
commission to be of the same general
character.
Food Hall (up to 175 seats)
Food and Beverage SalesCommercial Entertainment and Recreation
•
•
Large-Scale Facility L(21)
Small-Scale Facility L(5)•
•
•
•
Convenience Market
Farmers Markets
General Market L(12)
Liquor Stores
Eating and Drinking Establishments
•
•
Bars/ Nightclubs/ Lounges
Restaurants, Full-Service, Limited
Service & Take-Out (2,500 square feet
and smaller, including Outdoor Dining
and Seating) L(22)
Instructional Services L(17)
Live-Work L(14)
Maintenance and Repair Services L(2)
Nurseries and Garden Centers L(17)
Offices
•
•
Restaurants, Full-Service, Limited
Service & Take-Out (2,501 -5,000
square feet and smaller, including
Outdoor Dining and Seating) L(22)•
•
•
•
Business and Professional L(21)
Creative L(21)Restaurants, Full-Service, Limited
Service & Take-Out (greater than
5,000 sq ft, including Outdoor Dining
and Seating) L(22)
Medical and Dental L(21)
Walk-In Clientele L(21)
Retail SalesFood and Beverage Sales •General Retail Sales, Small-Scale L(2)
•
•
Convenience Market
General Market
Instructional Services L(1), L(5)
Live-Work L(1), L(13)
Offices
•
•
•
Business and Professional L(1)
Creative L(1)
Walk-In Clientele L(1)
Personal Services
•Physical Training L(17), L(5)
City of Palo Alto Appendix D, Page 11
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
10 Major remodeling/
tenant improvement
process, limits
N/A Major Modifications (9.43.030)N/A
For uses permitted by right or by discretionary review.
May be granted relief on no more than 2 of the following.
•
•
•
•
•
•
Setbacks
Build-To Line
Parcel Coverage
Height
Ground Floor (Floor-to-Floor) Height
Landscaping. Up to 10% of the required landscaping
May not be granted for the following.
•
•
•
•
•
Parcel area, width, or depth;
Maximum number of stories;
Minimum or maximum number of required parking spaces;
Residential density; or
Maximum floor area ratio (FAR).
11 Minor change
process,
requirements
Design Enhancement Exception (DEE)Minor Modifications (9.43.020)N/A
Granted to site development and parking and
loading requirements to enhance the design
of commercial development – subject to
architectural review.
For uses permitted by right or by discretionary review.
May be granted relief on no more than 2 of the following.
•
•
•
•
•
•
•
•
•
Setbacks
Build-To Line
Design enhancement include minor
architectural elements and design features.Parcel Coverage
HeightExceptions limited to minor changes to the
setback, daylight plane, height, lot coverage,
parking lot design and landscaping
Transparency
Parking, Loading, and Circulation
Outdoor Living Area
Bicycle Parking
Parcel Lines
configuration, and additional flexibility in the
required proportion between private and
common open space.
May not be granted for the following.
•
•
•
•
•
Parcel area, width, or depth;
Maximum number of stories;
Minimum or maximum number of required parking spaces;
Residential density; or
Maximum floor area ratio (FAR).
City of Palo Alto Appendix D, Page 12
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
12 New signage process, Signs (16.20)Signs (9.61)Signs on Private Property (Chapter 14.68)
requirements
Design review required by Architectural
Review Board.
Sign Permit application requirements include:Initial review by Director. Successive reviews:
(1) Staff (2) Architectural and Site Review
Committee and/or Board of Adjustments (3)
Planning Commission (4) City Council
•
•
•
•
Site Plan.
Master sign program for multiple signs as part
of one building project.Existing Building Elevation.
Proposed Building Elevations.
Sign Illustration.Master Sign Program required for all multiple
tenant sites, nonresidential projects and
buildings
Prohibited signs include flashing or moving
signs and roof signs that have not been
grandfathered.
Sign permit application reviewed by The Secretary of the Architectural Review Board
The Planning and Community Development Director can administratively approve sign permits if
the type of sign is permitted.
Regulations vary by district.
Signs are prohibited on public property.
Sign Permit not required for certain sign face
changes, wayfinding/informational signsSpecific requirements for fuel price signs,
freestanding signs, wall signs, projecting signs,
and awning signs.
Prohibited signs include:
•
•
•
•
Animated signs Prohibited signs: animated, upper floors,
emitting, billboards, A-frames (unless
permitted in Downtown Outdoor Display
Permit Guidelines)
Emitting signs
Miscellaneous signs
Paper, Cloth, or Plastic Streamers and Bunting Digital signs permitted in windows of stores
in the downtown commercial district under
certain circumstances
Total sign area regulated by District.
Provisions for portable signs and upper-level signs in the Bayside Conservation District (Third Street
Promenade).
City of Palo Alto Appendix D, Page 13
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
13 Parking strategy -
minimum
requirements?
Parking Regulations for CD Assessment District
(18.52.070)
No minimum off-street parking
requirements for all land uses within the
Downtown Community Plan area.
Parking, Loading, and Circulation (9.28.40)Off-Street Parking and Loading (Chapter 14.74)
Projects Outside of One-Half Mile of a Major
Transit Stop (minimum parking required)
Regulations vary for commercial vs.
residential uses in districts which allow
mixed-use
Minimum Off-Street Parking Requirements
Retail Sales (Maximum parking allowed)Retail Uses •
•
•
Retail, less than 2,500 sq. ft.- 1 space per
300 sq. ft.•
•
5,000 SF or less = 1 space per 500 SF
5,001 SF or more = 1 space per 300 SF
Public Parking District: allows participating
properties not to require parking for new or
changed uses for the first 1.0 of floor area
ratio. Parking required if square footage
exceeds lot area.
•
•
•
Intensive - 1 per 200 sf of gross floor area
Retail, 2,500 – 5,000 sq. ft. - 1 space per
300 sq. ft.Extensive - 1 per 350 sf of gross floor area
Open Lot - 1 space for each 500 sf of
sales, display, or storage site area.Retail, 5,000 sq. ft. or more - 1 space per
300 sq. ft.Minimum Off-Street Parking Requirements for
Parking Assessment Districts If not subject to Public Parking District
regulations the following ratios apply:
Projects Within One-Half Mile of a Major
Transit Stop: no minimum parking required.Retail Uses •
•
Office: 1/300
CommercialLocation of Parking for Mixed- Use and
Nonresidential Districts above ground
restricted to Interior Side and Rear Setbacks
and Rooftops except in Neighborhood
Commercial Districts.
•
•
•
Intensive - 1 per 240 sf of gross floor area
Extensive - 1 per 350 sf of gross floor area ▪
▪
Intensive: 1/200
Extensive: 1/500Open Lot - 1 space for each 500 sf of
sales, display, or storage site area.•Bars, cafes, nightclubs, restaurants: 1 per
3 employees and 1 per 3 seats
Provisions for required setbacks, openings, and
parking podium heights for subterranean and
semi-subterranean parking structures.•
•
Assembly/recreation uses: varies
Residential (in mixed-se commercial
district): 1-2 depending on size, and 1
visitor per 4 units
All off-street parking spaces associated with
new nonresidential projects in the
Neighborhood Commercial District require
unbundled parking.
City of Palo Alto Appendix D, Page 14
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
14 Improvement
Districts
(BID/Promotion/
Economic
Development
Programs/
Departments)
Palo Alto Downtown Business Improvement
District
Downtown Santa Monica, Inc.
Improvement district mechanism in place for
neighborhoods, however this seems to have
limited applications.
Bayside and Downtown Mall Operations & Maintenance District
Central Business District - Business Promotion Assessment
Colorado Avenue Property Based Assessment District PBAD Overlay Zone
Downtown Santa Monica Property-Based Assessment District (PBAD)
Lincoln Boulevard Property-Based Assessment District
Downtown BID feasibility study considered in
2018, but not ultimately funded.
Main Street
Main Street Business Assessment
Main Street Light and Sidewalk Cleaning Assessment Area
Montana Avenue
Montana Avenue Assessment
Pico Boulevard
Pico Boulevard Assessment
Santa Monica Alliance
The Santa Monica Alliance is a collaborative effort of the City of Santa Monica and the Santa Monica
Chamber of Commerce dedicated to nurturing a vibrant, healthy, and profitable business climate in Santa
Monica working to attract, retain, and to help grow Santa Monica businesses.
15 Housing - allowed?
Min. max.;
Residential not allowed in Ground Floor (GF)
or Retail (R) Combining districts.
Residential limited to upper floors on Third
Street Promenade.
Residential limited to upper floors for parcels
located on Main Street, Montana Avenue, Pico
Boulevard, and Ocean Park Boulevard.
Varies by district:
CD/R3: Permitted useencouraged?100% affordable housing projects are exempt
from the Retail Preservation Ordinance, but
can’t be within the Ground Floor (GF) and/or
Retail (R) combining districts or on a site
abutting El Camino Real.
If development is approved above the
base FAR and height, it must be
accompanied by a range of community
benefits from 4 priority categories:
Affordable Housing, Trip Reduction and
Traffic Management, Community Physical
Improvements, and Social and Cultural
Facilities.
CN and CT: Mixed-use residential
conditionally permittedPermitted on all floors for all other parcels.
CD, CRS, CRS/OAD: Residential above ground
floor conditionally permitted
Not permitted in LC/SPZ
City of Palo Alto Appendix D, Page 15
PALO ALTO RETAIL REVITALIZATION STUDY
SANTA MONICA
ZONING STANDARD/
APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)#PALO ALTO LOS ALTOS
16 Formula (i.e.
Franchise) retail
regulations
Conditional use permit required for formula retail
business in a R-Combining district - five required
additional findings.
Regulations in place before the pandemic.N/A No limit on chain stores in our downtown area. The
City doesn’t have chain stores in the downtown
currently. They would like to attract some through
new redevelopment projects in downtown to help
facilitate some bigger companies and retailers to
come to town which will in turn support the other
businesses.
Restaurant, Limited-Service, and Take-Out
establishments with frontage on the Third Street
Promenade are prohibited if:Formula retail business - one of ten (10) or more
business locations in the United States.
More than 150 locations nationwide; and
Restaurants where orders are placed at a
walk-up window, counter, or machine;
payment prior to food consumption; and
food served with disposable, one-time, or
limited-use wrapping, containers, or
utensils.
Regulation in place for 5 years and can be
updated or continued after that by council
approval.
Neighborhood Commercial NC
(2) Limitation shall only apply to new construction and alterations to existing buildings that result in a combination or enlargement of tenant spaces: Limited to facilities with no more than 7,500 square feet of floor area and/or 40 linear feet of ground floor street
frontage; greater area and/or width requires approval of a Conditional Use Permit.
(10) Limited to restaurants with 50 or fewer seats.
(11) Limited to 2 restaurants greater than 5,000 square feet per block along Main Street. A block is defined as both sides of Main Street and the adjacent sides of adjoining side streets. Portions of Main Street to be designated a “block” for the purpose of this Section
are as follows:
•
•
•
•
•
•
•
•
•
•
Block 1: South City limits to Marine Street.
Block 2: Marine Street to Pier Avenue.
Block 3: Pier Avenue to Ashland Avenue.
Block 4: Ashland Avenue to Hill.
Block 5: Hill to Ocean Park Boulevard.
Block 6: Ocean Park Boulevard to Hollister Avenue (total of 4 restaurants and bars permitted in this block). Block 7: Hollister Avenue to Strand.
Block 8: Strand to Pacific.
Block 9: Pacific to Bicknell.
Block 10: Bicknell to Bay.
Block 11: Bay to Pico Boulevard.
(12) General markets greater than 15,000 square feet require a Conditional Use Permit. In the Neighborhood Commercial District, establishments shall not exceed 25,000 square feet of floor area.
(14) If the commercial use requires a MUP or CUP, an application shall be required in accordance with Chapter 9.41. Even if the commercial use would otherwise be permitted, no such use shall be approved where, given the design or proposed design of the live-work
unit, there would be the potential for adverse health impacts from the proposed use on the people residing in the unit. An example of a potential health impact is the potential for food contamination from uses that generate airborne particulates in a unit with an
unenclosed kitchen.
(17) Limitation shall only apply to new construction and alterations to existing buildings that result in a combination or enlargement of tenant spaces: No individual tenant space in the NC District shall occupy more than 7,500 square feet of floor area and/or exceed
50 linear feet of ground floor street frontage without the approval of a Conditional Use Permit.
(21) Permitted if within buildings existing as of July 24, 2015, subject to the active use requirement set forth in Section 9.11.030(A)(1), except:
•All new construction, including new additions of 50% or more additional square footage to an existing building at any one time, or incrementally, after the effective date of this Ordinance, requires approval of a Conditional Use Permit.
City of Palo Alto Appendix D, Page 16
PALO ALTO RETAIL REVITALIZATION STUDY
•
•
•
In the NC District, ground floor, street-fronting, tenant space occupied by non-media production, support facility uses shall not be changed to an individual office use or media production, support facility use occupying more than
12,500 square feet of floor area and/or exceeding 75 linear feet of street frontage without the approval of a Conditional Use Permit.
In the NC District, no non-medical or non-dental office use tenant space shall be changed to an individual medical or dental office use anywhere in an existing building occupying more than 7,500 square feet of floor area and/or
exceeding 50 linear feet of ground floor street frontage without the approval of a Conditional Use Permit.
In the MUBL, MUB, and GC Districts, no non-medical or non-dental office use tenant space shall be changed to an individual medical or dental office use anywhere in an existing building occupying more than 12,500 square feet of
floor area and/or exceeding 75 linear feet of ground floor street frontage without approval of a Conditional Use Permit.
Bayside Conservation (BC) Third Street Promenade Area
(1) Limited to upper floors, and on the ground floor where the entire tenant space shall be located at least 25 feet from the front property line, except for residential units shall be limited to upper floors only.
(5) Permitted if within buildings existing as of the date this Ordinance effective. Permitted in new buildings, except:
(a) No individual ground floor tenant space shall occupy more than 7,500 square feet of floor area and/or exceed 50 linear feet of ground floor street frontage without a Conditional Use Permit.
(b) Ground floor tenant spaces in the Santa Monica Place are not subject to size limitations.
(10) Permitted as an ancillary use to support a primary use.
(13) If the commercial use requires a MUP or CUP, an application shall be required in accordance with SMMC, Chapter 9.41. Even if the commercial use would otherwise be permitted, no such use shall be approved where, given the design or
proposed design of the live-work unit, there would be the potential for adverse health impacts from the proposed use on the people residing in the unit. An example of a potential health impact is the potential for food contamination from
users that generate airborne particulates in a unit with an unenclosed kitchen.
(15) Limited to the ground floor with frontage along 2nd Court and 3rd Court alleys or to upper floors.
(21) No individual Fitness Center tenant space shall exceed 100 linear feet of ground floor street frontage without the approval of a Conditional Use Permit.
(22) Restaurant, Limited-Service and Take-Out establishments with frontage on the Third Street Promenade and the following characteristics shall be prohibited:
(a) More than 150 locations nationwide at the time that the application for the establishment is deemed complete by the City; and
(b) Characteristics, including, but not limited to, orders placed at a walk-up window, counter, or machine; payment prior to food consumption; and food served with disposable, one-time, or limited-use wrapping, containers, or utensils.
Palo Alto Retail – Zoning Comparison with Santa Monica Summary/Key Takeaways
1. Level of regulation – Zone Districts
a. Santa Monica’s primary retail/commercial areas are Downtown (Third Street Promenade), Main Street, Pico Boulevard, Ocean Park Boulevard, and Montana Ave.
b. The Downtown Community Plan provides development standards as well as design guidelines for new development projects.
c. Zone districts are very prescriptive but clear in intent and procedure.
2. Overlay Districts
a. Santa Monica has two primary overlay districts but aren’t applicable in the established retail/commercial corridors.
3. Ground floor use regulations
a. Santa Monica allows for a variety of uses other than retail on the Third Street Promenade, however there are specific limitations per use.
b. Santa Monica also provides active ground floor use and design provisions for the Mixed Use and Commercial Districts.
4. Change of Use/Intensification process
a. Santa Monica doesn’t prohibit change of use from retail.
5. Retail definition
a. Santa Monica defines Retail Sales as any establishment that allows the retail sale or rental of merchandise.
6. Approval Processes
a. Santa Monica has administrative review and development review (discretionary) and provides the option for variances and waivers from development standards.
7. Approving Authority
a. All Planning related permits are approved by either the Planning and Community Development Director or the Planning Commission, the Director has approval authority in Palo Alto unless appealed in which case the final approval
is from City Council in Palo Alto.
City of Palo Alto Appendix D, Page 17
PALO ALTO RETAIL REVITALIZATION STUDY
8. Permit Process
a. New construction (permitted uses and CUP uses)
i. Santa Monica allows by right and conditionally allows a variety of uses in their Downtown and Mixed Use and Commercial Districts.
b. Major remodeling/tenant improvement and Minor changes
i. Santa Monica allows for relief on up to two development standards.
c. New signage
i. Santa Monica’s sign standards are very prescriptive.
9. Parking strategy
a. Santa Monica has parking maximums for Downtown and minimum parking requirements for projects outside of one-half mile of a major transit stop.
10. BID/Promotion/Economic Development Programs / Departments
a. Santa Monica has property based assessment districts for all of their commercial/retail corridors.
11. Housing
a. Residential is limited to upper floors along the Third Street Promenade and along the primary retail corridors.
12. Formula retail regulations
a. Restaurants with 150 locations are prohibited on the Third Street Promenade.
City of Palo Alto Appendix D, Page 18
Palo Alto Retail Revitalization – Zoning Recommendations August 6, 2024
1
NUMBER ZONING RECOMMENDATION RATIONALE AND JUSTIFICATION START-COMPLETION TIME
1 Amend Parking Regulations (18.52.030)
Amend 18.52.030(d) Additions or Changes of Use to
allow/exempt change of use or conversion of existing floor area
to retail or retail-like uses from minimum parking requirements.
Removes a major constraint on changes of use to respond to market demands.
Effectively incentivizes retail and active, popular, retail-supportive uses.
Sites are already developed. Increased parking would come at expense of building area, desired uses, or amenities.
Demand in excess of parking capacity is largely self-regulating in urbanized environments. People will use more distant alternative parking
or not patronize the location. Becomes a business decision for the property owner.
Provides relief for areas outside the applicability of AB 2097.
Allows property owners to experiment with new uses to fill in vacancies.
Near-term
(within 6 months)
2 Relax the Formula Retail Restrictions (18.04 Definitions)
1. “Formula retail ” definition (57.6) should be revised from
applicability to all franchise uses to apply only restaurant uses,
and to increase the threshold to qualify as a Formula Restaurant
without requiring a CUP should be increased from 10 to 50 such
businesses in the United States. Consider limiting to 50 in
California.
2. If additional control over such uses is deemed necessary,
the City could consider limiting the number of formula retail
establishments in certain areas to ensure a balance between
formula and non-formula uses.
10 or fewer in U.S. and requirement for CUP effectively limits nearly all franchise businesses.
Limits innovation, successful and attractive businesses from contributing to overall health and vibrancy.
Assumes (without evidence) that franchises are harmful.
Proposed revisions and limits allow best of such uses and avoid worst aspects of large franchises.
Many cities have established limits on the number of formula uses in certain areas to balance with non-formula uses.
Near-term
(within 6 months)
3 Repeal the Retail Preservation Ordinance (RPO) (18.40.180)The nature of retail has been changing, which has increased turnover and vacancies of many retail spaces and commercial corridors. The
COVID-19 pandemic accelerated some of the shift to e-commerce and led to the failure of many retail and other commercial businesses.
RPO (c. 2015) effectively extended the provisions of and is redundant with GF and R Combining District limits for University and California
Avenues, and Midtown. This leads to confusion, complication, excess floor retail floor area, and vacancies.
RPO is not needed beyond University and California Avenues. There is a need to allow a reduction of excess retail space city-wide. The 2023
Comprehensive Economic Development Strategy Study indicated that there is a large amount of vacant commercial and retail space that
exceeds the current and foreseeable market demand for retail.
RPO contributes to increased and prolonged vacancies and blighting effects by preventing alternative uses.
RPO substantially limits normal adjustments and responses to market demand and substantially limits natural concentrations and
groupings of complementary uses.
RPO severely limits options for business and property owners.
Relief is effectively nonexistent and could be impossible via entirely subjective standards and criteria and virtually impossible standard of
unconstitutional taking of all economic value of the property.
Contributes to frustration, negative and punitive results, and the perception and reputation of Palo Alto as hostile to business.
Near-term
(within 6 months)
Palo Alto Retail Revitalization – Zoning Recommendations August 6, 2024
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4 Amend Parking Regulations
Extend AB 2097 exemption to Entire CD-C Zone
Within Downtown, there are 16 parcels in the CD-C district on University Avenue that lie just northeast of the half-mile radius from a high-
quality transit stop that are not exempt from the parking requirements by AB 2097.
Unless the provisions of AB 2097 are extended, these parcels will remain subject to minimum parking requirements and the Commercial
Downtown Assessment District standards of 18.52 of the Palo Alto Municipal Code.
To ensure equitable development conditions for all parcels in the Downtown area, it is recommended that uniform regulations be applied
to the entirety of the CD-C districts in the Downtown area.
Near-term
(within 6 months)
5 Create Comparative Zoning Use Table
Prepare comprehensive comparative zoning use tables to clarify
what and how uses are allowed in each zoning and combining
district. ("What Uses Allowed Where")
There are subtle differences and restrictions on allowed uses that warrant evaluation of their need and effect on protecting or restricting a
healthy commercial corridor. A comparative use table improves understanding and ease of use for all stakeholders: staff, applicants,
property owners, residents.
The table will help identify internal conflicts, inconsistencies, gaps and opportunities to simplify and clarify the code.
The table will help identify opportunities to consolidate, simplify, or eliminate excessive or redundant provisions.
Near-term
(within 6 months)
6 Revise 18.30 Combining Districts to allow Practical Waivers
and Adjustments
1. Amend Section 18.30(A).070 of the R Combining District for
California Avenue to:
A. Eliminate the unconstitutional taking standard of section
(a) Economic Hardship; and
B. Add the Alternative Viable Active Use standard from
18.40.180(c)(1)(B) of the RPO.
2. Amend Section 18.30(C) GF Combining District Regulations
to provide a practical difficulty standard the same as the R
Combining District:
A. Add the Alternative Viable Active Use standard from
18.40.180(c)(1)(B) of the RPO.
Unconstitutional taking of all economic value standard is unreasonable and is a disproportionate and unrealistic standard.
Proposed practical difficulty standard is a common best practice.
The proposed method of relief is proportionate to the potential impact.
Near-term
(within 6 months)
Palo Alto Retail Revitalization – Zoning Recommendations August 6, 2024
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7 Allow Non-retail Uses on Ground Floor with Limitations (part
1)
1. Amend the definition of “retail-like” (125.1) to include the
following performance-based uses: “commercial uses that are
accessible to the general public, generate walk-in pedestrian
clientele, and contribute to a high level of pedestrian activity,
including but not limited to include retail shops, eating and
drinking establishments, commercial recreation and
entertainment, personal and convenience services, financial
institutions, cultural institutions, galleries, and hotel lobbies.”
2. Amend the use tables to allow non-retail uses:
▪ In back office, not street-facing locations (i.e., behind retail
or storefronts)
▪ On side streets, off of University and California Avenues
▪ When vacancies exceed threshold (by percentage and/or
duration, e.g., when vacancies exceed 10% in district for more
than 12 months)
▪ Subject to limits (concentration, size, proximity), e.g.:
▪ Minimum 25% ground-floor commercial
▪ Maximum 15% of total floor area
▪ Maximum 30% of all street frontage within 300-foot
radius
▪ Maximum 50% of street frontage per building > 100-foot
frontage
The extensive and persistent ground-floor vacancies suggest that alternatives or modifications to the restrictions may be appropriate.
There is a need to allow more retail-supportive uses on the ground floor.
The proposed amendments allow more complementary uses on the ground floor while preserving the optimal street-facing spaces for
active, pedestrian-oriented uses.
The proposed amended definition is based on the desired outcome, allowing new or innovative uses that are not otherwise listed or
defined.
NOTE: Supplementary mechanisms can provide additional flexibility to allow and encourage use of persistent and extensive ground floor
vacancies.
Conditional objective standards are not likely to be "gamed" if set at levels that reflect and justify the need for action and are not met
easily or can be manipulated unilaterally by an individual business or property owner (e.g., if vacancies in the zoning district exceed 10% for
12 months or more).
Removes extra cost and delay of CUP for uses that are not obviously detrimental to the district's vitality, or uses whose potential
operations and impacts do not vary greatly and are dependent upon the particular unique operation.
Near-term
(within 6 months)
Possibly Mid-term
(up to 18 months)
for additional limits
8 Allow Non-retail Uses on Ground Floor with Limitations (part
2)
3. Increase fitness, spas, exercise without a CUP from 1,800 to
3,000 square feet to match the industry average.
4. Allow other viable active uses without a CUP:
▪ Examples: pet grooming, beauty shops, nail salons,
barbershops, small learning centers, day care
▪ Medical office with retail component, lifestyle, health
services
5. If necessary, require a CUP for certain uses in excess of a
maximum size.
Adjusts to allow the 3,000-square-foot industry standard size of exercise and fitness studios without a CUP.
These uses generate strong foot traffic and sales to nearby uses.
Near-term
(within 6 months)
Palo Alto Retail Revitalization – Zoning Recommendations August 6, 2024
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9 Repeal or Amend the Office Conversion and Construction
Limitations
1. Repeal Section 18.40.210 Annual Office Limits; OR
2. Relax Section 18.40.210 Annual Office Limits:
A. Repeal limits on upper-level office uses; Retain only
office use conversion limits on ground level. Consider maximum
percentage of the street-facing façade to ensure a minimum
percentage for retail and retail-like uses; AND
B. Allow ground-floor office uses behind retail frontages;
AND
C. Section 18.40.210 Annual Office Limit should be revised
to replace the unconstitutional taking of all economic value
standard of (e) Economic Hardship Waiver or Adjustment, with
a practical difficulty standard like that recommended for the
RPO, R and GF Combining Districts.
No longer necessary. Excessive vacancies (400,000+ square feet) of office uses are not a realistic or significant threat of forcing out retail.
GF and R combining districts retain limits on office uses on ground floor on University or California Avenues.
Retaining and relaxing options would retain the limit of 50,000 sf of new or converted office per year.
Ensures balance of complementary uses. Similar technique used for the CN and CS Districts per 18.16.050(b)(1)(A).
Upper-level office uses and workers are primary customers of University and California Avenues.
Unconstitutional taking of all economic value standard for relief is too high, punitive, virtually impossible to achieve, and disproportionate
to the real or perceived threat.
Lack of reasonable relief creates negative results, impression, and reputation that deters investment and desired results.
Mid-term
(within 18 months)
10 Amend 18.16.050 Office Use Restrictions (CN, CS Districts):
Eliminate or amend the 5,000-square-foot maximum office floor
area per lot.
This standard has no proportionality to the size of the lot and hence creates potential inequities. The standard is only equitable if all lots
are the same size.
Any limitation of office use floor areas should be proportionate to the size of the site or building to ensure an equitable impact as allowed
by the 25% FAR in section (b)(1)(A).
Landlords may be deterred from converting vacant ground-floor office space to retail because the 5,000 sf max office limit may prevent
converting the space back to office.
Mid-term
(within 18 months)
11 Amend Parking Regulations
1. Reduce the minimum parking requirements.
2. Conduct parking use surveys as a basis to reset standards to
appropriate levels based on the actual need and demand.
Proposed amendment eliminates wasteful, underutilized, or excessive parking.
Standards should be based on actual demand.
Minimum standards do not need to accommodate 100% of the projected or peak demand.
Mid-term
(within 18 months)
12 Amend Parking Regulations
Amend the parking requirements to implement the AB 2097
exemption of minimum parking requirements within a half-mile
of transit.
Codifies state law. The law still applies without amendments. Codifying AB 2097 will allow to provide equity for properties outside AB 2097
influence per Recommendation 4.
Provides clarity to users, applicants, property owners, staff.
Mid-term
(within 18 months)
13 Amend Standards for Specified Retail Uses
Amend Section 18.76.015 to replace subjective additional CUP
approval criteria with objective standards or performance
criteria.
Provides certainty, accuracy, shorter and predictable approval processes and timelines.
Existing standards are entirely subjective. These are fine as reasons to approve, but not as reasons to deny an application. They make
proving compliance nearly impossible.
Mid-term
(within 18 months)
Palo Alto Retail Revitalization – Zoning Recommendations August 6, 2024
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14 Amend Parking Regulations
Develop ordinance to unbundle parking from residential
development.
AB 1317, passed in October 2023, focuses on unbundling parking in California, requiring owners of qualifying residential properties in
Counties of Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta, and Ventura to
separate parking costs from rent, i.e., renting or selling parking separately rather than automatically including it with the price of building
space.
Benefits of unbundling include:
• Existing parking spaces will be more efficiently used.
• Non-drivers are not required to pay for parking they don’t need.
• The market value of land used as parking becomes clear.
Long-term
(up to 3 years)
15 Conduct a Comprehensive Zoning Ordinance Update
1. Conduct a comprehensive review, revision, and update of
the zoning code to ensure it functions efficiently, equitably, and
as intended.
2. Integrate the use and development standards of the
combining districts into the use and development standard
tables.
3. Reduce, simplify, and standardize the many and
unnecessarily subtle differences and restrictions on personal
service uses between the R and GF Combining Districts and the
CD-C, CD-N, CS, and CC zones.
4. Streamline and standardize the standards. Reevaluate the
need and effect of the precise standards and whether they are
consistent with the broader goal of a healthy commercial
corridor.
5. Amend the code to replace subjective criteria with
objective standards.
The code should be clear, well-organized, intuitive, and user-friendly.
The existing code is virtually unknowable, overly complex, internally inconsistent, and hard to understand, implement, and enforce. This
sometimes results in lengthy processing times, difficult implementation, variable application and interpretation, and errors.
An updated code is important to overall understanding, implementation, and enforcement.
An updated code is important to the ease of use and reputation of the City within the business community.
Long-term
(up to 3 years)
https://mbakerintl-my.sharepoint.com/personal/dwery_mbakerintl_com/Documents/Desktop/Baker/Palo Alto/2024-8-14 PTC/2024-8-6 Zoning Recommendations for 8-14 PTC.docx
8/6/2024
November 18, 2024 www.cityofpaloalto.org
Retail Revitalization
Interim Ordinance
1
Background
Retail Revitalization Efforts
•Economic Development and Transition Priority
•Streetsense Report
•Michael Baker International
o Prioritized Recommendations
•Planning & Transportation Commission / Retail Ad Hoc
1
Proposed Ordinance
•Relax formula retail CUP requirement (California Avenue)
•Adjust Retail-Like definition
o Adds financial institutions (including GF and R combining)
o Showroom (new definition – not in GF and R)
o Pet grooming
o Uses that generate walk-in pedestrian clientele
o Removes restrictions on beauty shops, salons, barbershops
o Retains fitness/exercise studios 1,800 SF or less w/o CUP
•Waivers/Adjustments: Adds alternative viable use
1
Future Efforts
Near Term
Work with Planning and Transportation Commission
•Review/Update Retail Preservations geographic boundaries
•Allow non-retail uses in portions of retail or retail-like spaces
Long Term
•Zoning code update
1
Recommendation