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HomeMy WebLinkAboutStaff Report 2503-4399CITY OF PALO ALTO CITY COUNCIL Monday, May 19, 2025 Council Chambers & Hybrid 4:30 PM     Agenda Item     3.788-796 San Antonio Road [25PLN-00062]. Request for Council Prescreening to Rezone the Subject Property from Commercial Services to Planned Community/Planned Home Zoning and to Allow Construction of 168 Rental Units in an Eight-Story Structure on a 43,414-Square-Foot (One-Acre) Site. CEQA Status: Not a Project. Staff Presentation, Applicant Presentation, Public Comment   City Council Staff Report From: City Manager Report Type: STUDY SESSION Lead Department: Planning and Development Services Meeting Date: May 19, 2025 Report #:2503-4399 TITLE 788-796 San Antonio Road [25PLN-00062]. Request for Council Prescreening to Rezone the Subject Property from Commercial Services to Planned Community/Planned Home Zoning and to Allow Construction of 168 Rental Units in an Eight-Story Structure on a 43,414-Square-Foot (One-Acre) Site. CEQA Status: Not a Project. RECOMMENDATION Staff recommends that Council conduct a prescreening and provide informal comments on the applicant’s request to rezone 788 San Antonio Road from Service Commercial (CS) to a Planned Home Zoning (PHZ).1 Comments provided during the prescreening process are not binding on the City nor the applicant. EXECUTIVE SUMMARY This prescreening is a request by the applicant to rezone the subject property, which is currently zoned Service Commercial (CS) to Planned Community (PC)/Planned Home Zoning (PHZ).1 The project site consists of two parcels totaling 43,414 square feet, and includes construction of a 189,884-square-foot building with 168 residential rental units. The site currently has an approved planning entitlement for 102 housing units and 1,803 square feet of commercial space. A location map of the proposed site is included in Attachment A. In accordance with Palo Alto Municipal Code (PAMC) Section 18.79.030(A), a prescreening review is required for legislative changes, including Rezoning, prior to submittal of a formal application. Prescreenings are intended to solicit early feedback on proposed projects and, like all study sessions, cannot result in any formal action. Since this proposal may return to the City Council as a formal application, Councilmembers should refrain from forming firm opinions supporting or opposing the project. 1 Referred to in this report as "Planned Home Zoning" to emphasize the focus on housing as the benefit to the community. PAMC Section 18.38, which outlines the requirement and process for Planned Community (PC) Zoning, remains the underlying code supporting application of this policy. Following this prescreening, the applicant may choose to file a formal application to amend the zoning for the site. Planned Community Rezoning applications require an initial review by the Planning and Transportation Commission followed by a formal recommendation from the Architectural Review Board, a formal recommendation from the Planning and Transportation Commission, and Council’s final decision as set forth in PAMC Chapter 18.38. BACKGROUND On February 3, 2020, Council unanimously endorsed using the Planned Community (referred to here as Planned Home Zoning (PHZ)) for housing and mixed-use housing development projects to help spur housing production. In exchange for deviation from certain standards as allowed under the rezoning, if approved by Council, a PHZ application must meet two initial qualifying criteria established by the City Council: 1) provide 20% of the total units as affordable housing selected from a prescribed menu of options, and 2) provide housing units that meet or exceed the demand generated by any net new jobs. Approved Entitlement In 2020 Council approved a four-story, 86,614-square-foot mixed-used project with 102 condominium dwelling units, 1,803 square feet of commercial, and 102 parking spaces (19PLN- 00079). For informational purposes, Attachment D includes a comparison of the required zone standards, the approved entitlement project, and the proposed project. As detailed in the Project Description letter (Attachment C), the applicant states that the approved entitlement is no longer viable, and the property owners desire to build a denser project.2 The planning entitlement is valid through July 6, 2025, and is entitled to an additional 18-month extension in accordance with Assembly Bill (AB) 2729. Project Description The preliminary schematic drawings, included in Attachment D, are conceptual, as is appropriate at this stage of project consideration. As shown in these schematic drawings, the applicant is proposing an approximately 189,884-square-foot multi-family residential building with 168 rental units. The units would be a mix of studio (47), one-bedroom (90), and two- bedroom (31). As part of the project, two parcels currently addressed 788 San Antonio Road and 796 San Antonio Road would be merged. The proposed project would have a lot coverage of 29,467 square feet, consistent with the approved entitlement. The footprint of the building complies with the special setbacks. The proposed development would be eight stories of residential wrapping two levels of above grade parking, with a proposed height of 85 feet. This does not include the height of the rooftop mechanical equipment, which may add up to 15 feet in height and is not included in the 2 The applicant has repeatedly stated that entitled project’s viability was negatively impacted by an increase in Park Impact Fees in 2022. This is incorrect, as the entitled project has never been subject to Park Impact Fees. Rather, the entitled project is subject to Parkland Dedication In-Lieu fees, which did not experience a similar increase in recent years. conceptual plans. A pedestrian entrance to the building would be provided from San Antonio Road. Access to the parking garage would be provided along Leghorn Street from a single entrance/exit. The above- grade parking structure would include 73 parking spaces (.43 spaces per dwelling unit). Sheet A0.3 compares the proposed development standards to the approved entitlement. This project provides 66 more units than the prior entitlement, in a building with approximately double the floor area. Surrounding Uses This property is located within the boundaries of the proposed San Antonio Road Area Plan, as well as the Housing Incentive Program area. It is adjacent to the approved projects at 800 San Antonio Road (which also recently applied for a new prescreening) and 824 San Antonio Road to the north, as well as a proposed builder’s remedy development at 762 San Antonio Road. In addition to those projects, other nearby zoning and uses include other CS zoned parcels to the north (Enterprise and Hertz car rentals) and south (service station). To the west, across San Antonio Road, are commercial uses within the GM Zone District, and a multi-family residential use within a PC zone (the Greenhouse) at the intersection of Leghorn and San Antonio Road. The property abuts industrial land uses in the City of Mountain View to the east. Adjacent buildings are generally single-story buildings; however, the approved and pending residential projects are four-to-seven stories tall. ANALYSIS Staff will prepare a thorough analysis of the Zoning Code and Comprehensive Plan compliance upon submittal of a formal application, if filed. A review of the conceptual plans, below, summarizes staff’s preliminary review of the proposal and highlights key policy considerations associated with the applicant’s request. Comprehensive Plan Compliance The Comprehensive Plan designation is Service Commercial. High-density housing is identified as an allowed use in some locations within this land use designation. These properties are not Housing Element sites; however, the approved project is included as 102 “Entitled Units” in the City’s 2023–2031 Housing Element to demonstrate the adequacy of the Residential Sites Inventory. While the properties contributed to the City’s planned capacity to meet its Sixth Cycle RHNA obligations, no RHNA credit has been claimed, as such credit is only granted upon building permit issuance. The newly submitted application, which includes 66 additional units beyond the previous entitlement, would increase the City's available site capacity buffer. San Antonio Road Area Plan The San Antonio Road Area Plan was initiated by the City Council on March 10, 2025, and is scheduled to be completed in late 2027/early 2028. It is currently in the initial stages of community outreach and assessing current conditions. The plan will seek to transform 275.3 acres along the Palo Alto and Mountain View border, creating an opportunity for cohesive mixed-use neighborhoods with safe access to transportation, employment, community services, and recreation. This will be achieved by a holistic approach to the plan area, including examining allowed land uses, increasing housing capacity, and improving mobility and interconnectivity within the plan area, as well as to the San Antonio CalTrain station and city amenities such as the Cubberley Community Center and Baylands Nature Preserve. To allow the plan the maximum flexibility in designing streets, bikeways, sidewalks, and related facilities to meet the demands of existing and new residents and visitors, it is important to maintain the existing special setbacks along San Antonio Road as much as possible during this time prior to plan adoption by the City Council. Council may consider how the pending area plan may impact this project, and vice versa. Major considerations include transportation improvements and placemaking needs within the easement area and public right of way. Zoning Compliance In 2020 as a part of the original planning entitlement, Council amended the Zoning Code to encourage housing within several blocks of San Antonio Road, and modified the Palo Alto Municipal Code (Ordinance 5512) to enable the Housing Incentive Program (HIP) to apply to housing projects within these blocks. This code was updated in April 2024. The HIP incentives include a 2.0 FAR, no maximum density or lot coverage, and reduced parking requirements. For PHZ rezoning projects, Council has the authority to set the parameters for most development standards, which would be reflected in the tailored ordinance for the new PHZ District. However, for informational purposes, Attachment B compares the development standards under the current CS zone district with HIP with the proposed project in order to assist Council in considerations of how these deviations relate to the proposed public benefits of the project. In comparison to the existing zoning, the applicant is requesting that the new PHZ zone allow for the following. A full zoning code comparision is in Attachment B: •A 3.31:1 Floor Area Ratio (FAR) where 2.0 FAR is allowed (as a housing incentive program compliant project); •85 foot height where 50 feet is allowed; •100 square feet per unit of private and common useable open space where 150 square feet per unit is required; •No commercial space, where 1,500 square feet of commercial open space is required; •73 parking spaces where 199 parking spaces are required; •The project currently does not include a loading space, where one is required for multi- family buildings with 50 or more units. The loading space is intended to serve ride share vehicles, delivery vehicles, and moving trucks. The project is also encouraged to meet the Objective Design Standards in PAMC Chapter 18.24. Some notable diviations from the Objective Standards include: •The building massing is not stepped back where it is more than 20 feet taller the average height of an adjacent building. This step back would start within two vertical feet of the height of the adjacent building. The step back would be a minimum depth of six feet along both the façade on the primary building frontage and the facing façade of the adjacent building, and the step shall occur for a minimum of 70% of each façade length. •Privacy requirements within 30 feet of a residential use (800 San Antonio), including landscape screening, obscured glazing, angled or high silled windows, etc. •The building lacks façade articulation at least 4 feet deep that extends the full height of the building. •Certain streetscape improvements such as street trees and bike racks may need additional consideration with the San Antonio Road Area Plan. Special Setback This project fully complies with the 24-foot San Antonio Road Special Setback and the 25-foot Leghorn Street Special Setback. Height The 85-foot proposed height is significantly taller than other buildings in the area, and is taller than the proposed Builder’s Remedy project at 762 San Antonio Road. The project complies with the required CS setbacks, including a proposed 10-foot setback from the 800 San Antonio Road site. A building of this height in this context might be expected to provide stepbacks on the upper floors to transition from the neighboring building height(s). Floor Area Ratio (FAR) The proposed FAR of 3.31 is more than the allowed FAR of 2.0 in the CS Zone. Special Standards The project would be subject to the special standards for PCs as set forth in PAMC Section 18.38.150, as a result of it now being adjacent to a residential PC. This condition did not exist when the project was previously entitled. The proposed project exceeds the 50-foot height limit, and the code would require, unless modified by the PC ordinance, landscape screening adjacent to 800 San Antonio. Other special requirements for setbacks and daylight plane are met as shown in the conceptual plan. Multi-Modal Access & Parking Valley Transit Authority (VTA) bus line 21 and ACE transit orange line are the nearest bus lines to the project site. The San Antonio Road Caltrain Station is located approximately 1.4 miles from the project site. This project has not yet been analyzed for consistency with the City’s Bicycle and Pedestrian Transportation Plan and other transportation policies such as Council’s Local Transportation Impact Analysis Policy adopted on June 15, 2019 (CMR 11256). This analysis would be conducted as a part of any formal application and reviewed by the Office of Transportation. Parking The building would include two levels of above-grade parking. Access to the parking garage would be provided from Leghorn Street from a single entrance/exit, consistent with the prior approval. The parking garage would include 73 stalls. Under the Zoning Code, 199 stalls would be required based on the sizes of the housing units, representing a 63% reduction. While the code allows for up to a 30% maximum reduction using combined measures such as a Transit Demand Management Plan, off site parking, or other measures, a 63% reduction would not be allowed under the zoning code without approval of a PHZ application. Bicycle parking is currently shown within the ground level parking garage, with access from within the garage and outside of the building in the utility corridor. The proposed bike parking area holds 132 bikes, where 199 long term bike spaces is required. The bike room meets or can be designed to meet the requirements of a Restricted-Access Bicycle Enclosure as defined in PAMC 18.54.060(a)(2)(B). Eighteen short term bicycle racks will also be available. Inclusionary Requirement and Jobs Housing Imbalance The intent of limiting PHZ projects to residential and residential mixed-use is to address the job/housing imbalance. PHZ projects are required to provide more housing than jobs on site. As this is a 100% residential project, no new jobs would be created. The project is required to provide 20% of the units at Below Market Rate at an average of 80% AMI in accordance with Council’s requirements for projects seeking to rezone using the PHZ process. The applicant is currently proposing 15% (24 unit) at an unspecified affordability level. While the entitled project was for condominiums, the proposed project is for rental units. A rental project is not required by code to provide BMR units on site, and could instead pay development impact fees, however the established PHZ requirements include 20% of the 120 units (24 units) be provided onsite as BMR units, per the set formula. POLICY IMPLICATIONS Pre-screenings are intended to solicit early feedback on proposed projects and, like all study sessions, cannot result in any formal action. Therefore, informal comments from Councilmembers would not impact policy. The San Antonio Road Area Plan is also in its initial planning stages. The projects that are pending or approved during the preparation of the plan may impact some of the policies of the plan. FISCAL/RESOURCE IMPACT The proposed project would eliminate planned ground-floor retail space, resulting in the loss of potential sales tax revenue. However, the increase in residential units would likely generate higher property tax revenue. The prescreening and any future formal application are funded by applicant fees. The project would also be subject to impact fees to address its effects on public services and infrastructure. STAKEHOLDER ENGAGEMENT The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper and mailed to owners and occupants of property within 600 feet of the subject property at least ten days in advance. Notice of a public hearing for this project was published in the Daily Post on May 9, 2025, which is 10 days in advance of the meeting. Postcard mailing occurred on May 7, 2025, which is 12 days in advance of the meeting. As of the writing of this report no project-related public comments were received. The prior entitlement also included the HIP Ordinance. At those public hearings, there were comment letters in support, and well as a couple expressing concern about vehicle circulation and traffic on San Antonio Road. These comments noted that San Antonio Road does not have bus service, lacks bike safety features, and is gridlocked at certain times of day. ENVIRONMENTAL REVIEW The prescreening is a preliminary review process in which Councilmembers may provide comment, but no formal action will be taken. Therefore, no review under the California Environmental Quality Action (CEQA) is required at this time. A full review in accordance with CEQA would be initiated with the formal filing of a development application. ATTACHMENTS Attachment A: Location Map Attachment B: Zoning Comparison Attachment C: Applicant’s Description Letter Attachment D: Project Plans APPROVED BY: Jonathan Lait, Planning and Development Services Director 24 15 15 15 24 ding 4 uilding 1 Building 1 Building 3 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 73.8' 95.3' 50.0' 94.1' 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242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 50.0' 275.9' 148.9' 242.4' 73.8' 94.1' 169.6' 60.1' 165.8' 60.0' 165.8' 60.2' 160.8' 60.0' 160.8' 107.0' 148.9' 105.9' 95.0' 129.4'32.0' 74.4' .1' 149.9' 244.42' 197.0' 244.42' 171.8' 50.0' 169.6' 50.0' 219.3'219.3' 90.1' 209.1' 89.2' 209.1' 94.1' 198.5' 93.2' 198.5' 98.7' 187.4' 21.3' 76.4' 187.4' 103.5' 178.2' 102.6' 178.2' 107.3' 172.2' 106.7' 172.2' 147.6' 147.0' 34.3' 124.2' 136.6' 118.1' 159.4' 102.4' 27.9' 159.4' 219.8' 180.6' 126.6' 97.2' 107.4' 409.8'409.8' 180.6' 8' 4062 808- 814 796 800 809 777 790 801 799 797 795 821 815 824 816 788 780 762 760 4074 SAN ANTONIO ROAD LEGHORN STREET CS CS (AD) This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Special Setback Frontages Park School abc Building Roof Outline Underlying Lot Line abc Easement abc Lot Dimensions Zone Districts abc Zone District Labels City Jurisdictional Limits: Palo Alto City Boundary Tree Highlighted Features 0' 73' Attachment ALocation Map788-796 San Antonio Road CITY OF PALO ALTOINCORPORATED CALIFORNIA P a l o A l t oT h e C i t y o f APRIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Altoekallas, 2025-04-30 08:22:38 (\\cc-maps\Encompass\Admin\Personal\Planning.mdb) ATTACHMENT B ZONING COMPARISON TABLE 788 San Antonio Road, 25PLN-00062 Table 1: COMPARISON WITH CHAPTER 18.16 (CS DISTRICT) Residential Development Standards Regulation CS w/HIP Zoning 19PLN-00079 Proposed PC Minimum Site Area, width and depth None APN 147-03-041 (788 San Antonio Road): 22,622 sf APN 147-03-043 (796 San Antonio Road): 21,267 sf Resulting parcel: 43,414 sf .99 acre No change Minimum Front Yard (Leghorn Street) Street Side Yard (San Antonio Road) 24 feet special setback 25 feet 26 feet Rear Yard 10 feet for residential portion of proposed project; none for commercial 10 feet No change Interior Side Yard None 10 feet No change Min. yard for lot lines abutting or opposite residential districts or residential PC districts 10 feet (2)Complies/Not applicable Complies adjacent to the 800 San Antonio PC Max. Site Coverage 50% (21,707 sf) Or as approved by the Director of PDS as a part of a discretionary review under the HIP. 67.9% (29,467 sf)67.9% (29,467 sf) Max. Building Height 50 feet 49 feet 5 inches 85 feet PC Special Requirements for height 50 ft when adjacent to RM-30, RM-40, 35 ft when adjacent to RE, R-1, R-2, RMD, RM, or PC Complies/Not applicable 85 feet Daylight Plane for lot lines abutting one or more residential zone districts other than an RM-40 or PC Zone None, as this site is not abutting a residential zone (6) Not Applicable Not Applicable PC Special Requirements for Daylight Plane Non-residential uses abutting any RE, R-1, R- 2, RM or any residential PC district – 10 ft and a 3:6 slope For >60% residential PC, the daylight planes may be identical to the daylight plane requirements of the most restrictive residential district abutting the site Not Applicable Not Applicable Residential Density 30 du/ac per CS Zone No maximum density per Housing Incentive Program 102 DU/AC (102 units proposed) 168 DU/AC (168 units proposed) Maximum Floor Area for HIP 2.0:1, inclusive of a minimum of 1,500 sf commercial area (86,828 square feet) 2.0:1 (86,614 sf total) 2.98:1 (84,811 sf Residential) 0.02:1 (1,803 sf Commercial) 3.3:1 (189,884 sf total) 0 commercial proposed Minimum Useable Open Space 150 sf per unit Common Open Space Provided: 6,587 sf or 64.6 sf per unit Combined Total Private Balcony Open Space: 8,788 sf or 86.2 sf per unit Average total per unit meets 150 sf min sf Common Open Space Provided: 6,474 sf or 38.5 sf per unit Private Open Space: 12,864 sf or 77 sf per unit Average total per unit 100 sf Minimum Mixed-use Ground Floor Commercial FAR 1,500 sf (c)1,803 sf 0 sf (1) No parking or loading space, whether required or optional, shall be located in the first 10 feet adjoining the street property line of any required yard. (2) Any minimum front, street side, or interior yard shall be planted and maintained as a landscaped screen excluding areas required for access to the site. A solid wall or fence between 5 and 8 feet in height shall be constructed along any common interior lot line. (6) The initial height and slope shall be identical to those of the most restrictive residential zone abutting the site line in question. (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. Table 2: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) for Existing Commercial and Proposed Residential* Type Required 19PLN-00079 Proposed Vehicle Parking 1/1-bedroom unit 126 spaces required 126 spaces provided 199 spaces required 73 proposed 2/2-bedroom or larger unit No parking required for commercial Bicycle Parking 1 LT space per unit .1 ST space per unit 102 LT and 12 ST required 102 LT and 18 ST provided 199 LT and 20 ST required 132 LT and 18 ST proposed Loading Space 1, for residential structures with >50 units Not applicable at time of approval None proposed CHARLOTTE 4601 Park Road, Charlotte, NC 28209 T. 704 372 5616 F. 704 372 9882 CARY 117 Edinburgh S Drive, Cary, NC 27511 T. 919 461 3950 F. 919 461 3939 WINSTON-SALEM 500 W 5th Street, Winston-Salem, NC 27101 T. 336 923 7650 F. 336 777 0624 ATLANTA 47 Perimeter Center East, Atlanta, GA 30346 T. 770 604 3387 F. 770 604 3959 grubbproperties.com Grubb Properties, LLC 4601 Park Road, Suite 450 Charlotte, NC 28209 March 06, 2025 Jonathan Lait, Director of Planning Planning and Community Environment Department 250 Hamilton Avenue Palo Alto, CA 94301 jonathan.lait@cityofpaloalto.org RE: Pre-Screen Application for 788 San Antonio Road Project Dear Mr. Lait, On July 27, 2022, Grubb Properties acquired the property located at 788 San Antonio Road with an existing entitlement in place for that certain 102-unit housing project that was approved by City Council on 11/16/2020. Since that acquisition, Grubb made a good faith effort to see that project through as entitled and submitted the building permit application that December 2022. In April 2023, we made the tough decision to put this project on hold as it was no longer economically viable. This was the result of three key factors: 1. Extreme Rate Hike in Park Impact Fees that went into effect in 2022. This project’s feasibility and subsequent design were decided at a time when these fees were at the highest $4,116/unit ($419,832 total). In 2022, the new rate hike went into effect increasing the rate to $42,468/unit ($4,331,736 total). These fees are now $48,302.43 per unit, representing an increase of $4,507,015 on this single impact fee. 2. Worsening Economic Conditions in Construction Costs. In the aftershock of Covid, construction escalation jumped to 14% in 2021 followed by 15.8% in 2022 - the highest escalation on record in decades. On top of the unprecedented escalation, The Fed has sustained it’s high-interest rate policy making the cost of capital for housing projects prohibitively expensive. 3. Structural Design Modifications for Sub-grade Parking. As the team progressed through the permitting phase of the existing 102-unit project, the structural design of the subgrade parking garage was required to be enhanced to accommodate the groundwater conditions present. While this parking was originally budgeted at $70,000 per stall, a typical cost for subterranean parking, the required structural modifications increased the cost to $110,000 per stall. With 126 parking stalls, this represents a $5,040,000 increase to cost. grubbproperties.com Grubb is submitting a new project application that responds to these factors outlined and represents a feasible housing project in the year 2025. Increased building height, increased FAR, and reduction to parking ratios are the core aspects of the modification requested. Despite Builder’s Remedy being an available avenue for us, Grubb never felt this was the appropriate pathway for our project as our intent is to move forward in partnership with Palo Alto. As you begin the process of crafting the San Antonio Road Area Plan, our intent is to work in collaboration with you for the broader vision of this area while upholding our needs as a Stakeholder in its future. We understand that this project requires bold change from the City of Palo Alto; however, the requested changes are deeply rooted in our shared commitment to contribute meaningfully to the Housing Goals of this community. We look forward to bringing 788 San Antonio Road back to life. Sincerely, Megan Watson Senior Director, Grubb Properties mwatson@grubbproperties.com CC: Ted O’Hanlon, Consulting Project Manager Project Description - 788 San Antonio Road Scope - The request for the City Council Pre-Screen is to review an updated 168 rental unit plan, with 8 floors above grade consisting of a 2 story podium of mixed indoor parking with 73 car stalls, amenities and residential units and 6 U-shaped floors on top of residential units providing an open court yard in the middle, with maximum heights of 85'-0". Uses - The property currently has 2 vacant commercial/light industrial buildings on a 1-acre parcel. In 2020 the property was approved to build a 50’ high multi-family project with 102 total units on 4-levels and a 2-level subterranean garage. The proposed use of 68 units would consist of (31) 2-bedroom/2 bath units, (90) 1-bedroom units and (47) studios. As required by the City, 15% of these (25 units) will be designated for Below-Market Rate qualified users or an in-lieu fee would be paid. Purpose of Change - The 788 San Antonio Road project was the “catalyst” project for the Housing Incentive Program (HIP). The project was approved in 2020 using the HIP program from 2019, which presently is no longer feasible due to several market changes: • Increased construction costs (materials, labor, and below-grade parking) • Higher interest rates that create more significant financing burdens • Significant increases in Developer Impact Fees implemented in 2021, for example, park impact fees increased 10x • The need, call and demand for more housing in a new housing element cycle with new state laws promoting housing development as well as Palo Alto’s own focus on housing Design, Materials, Landscaping, Lighting – The 2020 project was approved for 102 units by Palo Alto Architectural Review Board including a final Subcomittee review. While the new project proposes more units, height and above grade parking, the intent of the project is to maintain the approved design intent, materials, colors and construction methods. If you need assistance reviewing the above documents, please contact the Project Planner or call the Planner-on-Duty at 650-617-3117 or email planner@cityofpaloalto.org Project Plans In order to reduce paper consumption, a limited number of hard copy project plans are provided to Council members for their review. The same plans are available to the public, at all hours of the day, via the following online resources. Directions to review Project plans and environmental documents online: 1. Go to: bit.ly/PApendingprojects 2. Scroll down to find “788 San Antonio” and click the address link 3. On this project-specific webpage you will find a link to the project plans and other important information Direct Link to Project Webpage: https://www.paloalto.gov/Departments/Planning-Development-Services/Current-Planning/Projects/788-San- Antonio-Road-Pre-screening May 19, 2025 www.paloalto.gov 788-796 San Antonio Avenue Pre-screening Presenter Emily Kallas, Senior Planner 2 COUNCIL PRE-SCREENING PROCESS •Required for legislative changes, including rezonings, before a formal application. •Provides early feedback only; no formal decisions are made. •Councilmembers are expected to refrain from forming firm opinions, as the proposal may return for future formal action. 3 •Prescreening for a proposal to rezone from Commercial Service (CS) to Planned Home Zoning (PHZ) to allow for: o Construction of 168 rental units in an eight-story structure with above grade parking o Replaces the Housing Incentive Program (HIP) project approved in 2021 (19PLN-00079) CONCEPTUAL PROJECT 4 PROJECT LOCATION Location •San Antonio Road near Leghorn Street •In the Housing Incentive Program (HIP) area Other nearby housing projects •762 San Antonio •800 San Antonio •824 San Antonio •3997 Fabian COMPARISON TO PREVIOUSLY APPROVED PROJECT 5 Previously Approved Project Proposed Prescreening Unit Count 102 (ownership units)168 (rental units) Setbacks Complies with Special Setback and Zoning Code No change Height 49 ft 5 in 85 ft FAR 2.0:1 (86,614 sf)3.31:1 (189,884 sf) Retail Space 1,802 sf 0 sf Parking 126 spaces (avg. 1.25 spaces per unit)73 spaces (avg. 0.43 spaces per unit) Unit Mix 32 studio, 66 1-bed, 4 2-bed 47 studio, 90 1-bed, 31 2-bed BMR Distribution 6 very-low, 5 low, 4 moderate TBD COMPARISON TO PREVIOUSLY APPROVED PROJECT 6 COMPARISON TO NEIGHBORING PROPOSED PROJECT 7 788 Proposed Prescreening (Current Study Session Discussion) 800 Proposed Prescreening (Next Study Session Discussion) Unit Count 168 (rental units)120 (undecided if owner or rental) Setbacks Complies with CS zoning district, including special setback Below grade encroachment into San Antonio Road special setback Height 85 ft 60 ft 8 in FAR 3.31:1 (189,884 sf)3.0:1 (114,888 sf) Retail Space 0 sf 1,087 sf Parking 73 spaces 179 spaces Unit Mix 47 studio, 90 1-bed, 31 2-bed 23 studio, 41 1-bed, 50 2-bed, 6 3-bed BMR Distribution TBD (20% of units at 80% AMI)TBD (20% of units at 80% AMI) 8 Project Timing •In advance of the San Antonio Coordinate Area Plan Scale and Design •Proposed height 3 stories taller than 800 San Antonio •Does not include step-backs KEY CONSIDERATIONS Parking and Services​ •Reduced parking​ •No on-site commercial use Housing Tenure and Affordability​ •BMR not specified​ •Ownership vs. Rental​ 9 BELOW MARKET RATE PHZ OPTIONS Council endorsed four PHZ BMR options: •20% BMR evenly distributed across all income levels •20% BMR weighed distribution (average 80% AMI, and no less than 15% of actual units) •10% units at Very-Low Income (31-50% AMI) plus full payment of Housing Impact Fees •Off site housing, provided in a concurrent project with 100% BMR units 9 RECOMMENDED MOTION Staff recommends that Council conduct a prescreening and provide informal comments regarding the applicant’s request to rezone the properties at 788-796 San Antonio from Service Commercial (CS) to a Planned Home Zoning (PHZ). Comments provided during the prescreening process are not binding on the City or the applicant. Emily Kallas, AICP Senior Planner Emily.Kallas@paloalto.gov 650-617-3125 788 San Antonio Road | 05.19.25 Palo Alto City Council Pre-Screen Application grubbproperties.com2 Grubb Properties | Mission, Vision and Values CONFIDENTIAL - NOT FOR DISTRIBUTION. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The principles that guide everything we do Our Mission Creating place to live and work that inspire community, enable mobility, encourage well- being and deliver value. Our Vision Working together to make a meaningful impact on America’s housing crisis. Our Values Integrity, Respect, Customer Focus, Continuous Improvement, Creating Community Our Company 60+ years operating, over 8,500 units in 13 markets 1 Price Point More affordable target rents for an expanding demographic 2 Location Urban, transit-oriented, close to employers and amenities 3 Design Efficient, Environmental, desired lifestyle experience Operating Principles •Millennials and Generation Z. •We see a generational opportunity as these age groups are now faced with a critical housing shortage. •‘Essential Housing’ asset class that sits between luxury and government subsidized affordable housing, and targets those who want to live in urban or infill communities and need a moderately priced option. grubbproperties.com 788 San Antonio Road | Pre-Screen Request 3 The request for the City Council Pre-Screen is to review an updated 168 rental unit plan, with 8 floors above grade consisting of a 2-story podium of mixed indoor parking with 73 car stalls, amenities and residential units and 6 U-shaped floors on top of residential units providing an open courtyard in the middle, with maximum height of 85'-0". Project Overview grubbproperties.com 4 788 San Antonio Road | Pre-Screen Request •D •C •B •A The need, call and demand for more housing in a new housing element cycle with new state laws promoting housing development as well as Palo Alto’s own focus on housing Housing Element Need Significant increases in Developer Impact Fees implemented in 2021, for example, park impact fees increased 10x Impact Fees Higher interest rates that create more significant financing burdens Interest Rates Increased construction costs (materials, labor, and below- grade parking) Construction Costs The 788 San Antonio Road project was the “catalyst” project for the Housing Incentive Program (HIP). The project was approved in 2020 using the HIP program from 2019. Grubb acquired the property in 2022 and put the permitting on hold in April 2023 due to several factors that leave the existing project infeasible. Purpose of Change grubbproperties.com 788 San Antonio Road | Pre-Screen Request 5 The 2020 project was approved for 102 units by Palo Alto Architectural Review Board including a final Subcommittee review. While the new project proposes more units, height and above grade parking, the intent of the project is to maintain the approved design intent, materials, colors and construction methods. Design, Materials, Landscape, Lighting grubbproperties.com 6 788 San Antonio Rd | Contextual Map + Elevation grubbproperties.com 788 San Antonio Road | Project Comparison 7 Project Site Area (Ac) Units (DU)DU/Ac Avg Unit SF FAR Height Above Grade Stories Below Grade Stories Site Cvg Parking Parking Type Pkg Ratio 788 San Antonio 1.00 168 169 725 3.31 85’0”8 0 68%73 Podium 0.43 762 San Antonio 1.78 198 112 878 3.33 79’0”7 0 80%253 Podium 1.28 800 San Antonio 0.88 120 137 756 3.00 55’0”5 2 60%179 Subgrade 1.49 3997 Fabian 2.16 295 135 827 3.19 88’0”7 0 79%343 Podium 1.16 4015 Fabian 0.66 100 152 736 3.43 81' 10"7 0 87%100 Podium 1.00 3150 El Camino Real 2.55 368 144 895 4.00 79’0”7 2 64%455 Subgrade 1.24 3606 El Camino Real 2.61 335 128 863 3.30 83'5"7 0 79%416 Podium 1.24 3781 El Camino Real 1.45 177 123 833 3.11 90'3"7 0 76%213 Podium 1.20 Project Averages:137 814 3.33 80’0”6.88 74%1.13 Project Comparison Matrix San Antonio Rd HIP --N/A -2.0 50’0”4 -70%--1.0 - 1.5 Less TDM GM/RLOM Focus Area --N/A -2.5 60’0”5 -70%--1.0 - 1.5 Less TDM El Camino Focus Area --N/A -4.0 85’0”7 -70%--1.0 Less TDM grubbproperties.com 788 San Antonio Road | Key Modifications 8 While site coverage is within the San Antonio Rd HIP requirements as result of special setbacks along both San Antonio & Leghorn, this impacts overall potential density onsite. A consistent theme with recent projects is the 3.0+ FAR ask, which is not currently supported in the GM/RLOM or San Antonio Rd HIP Zoning requirements. Site Coverage & FAR Project FAR Site Cvg 788 San Antonio 3.31 68% 762 San Antonio 3.33 80% 800 San Antonio 3.00 60%* 3997 Fabian 3.19 79% 4015 Fabian 3.43 87% 3150 El Camino Real 4.00 64%* 3606 El Camino Real 3.30 79% 3781 El Camino Real 3.11 76% Project Averages:3.33 74% San Antonio Rd HIP 2.0 70% GM/RLOM Focus Area 2.5 70% El Camino Focus Area 4.0 70% San Antonio Road *Subgrade Parking grubbproperties.com 788 San Antonio Road | Key Modifications 9 This proposal calls for a reduction to allow for a 0.43/per unit parking ratio. As a company who supports and builds car free communities throughout our portfolio, Grubb would propose even further reductions that are paired with robust multi-modal transportation options such as bike rooms, scooters, EV Car Share program, Ride-Share drop off, and Shuttle stop in coordination with local employers. Parking Project Parking Type Pkg Ratio 788 San Antonio Podium 0.43 762 San Antonio Podium 1.28 800 San Antonio Subgrade 1.49 3997 Fabian Podium 1.16 4015 Fabian Podium 1.00 3150 El Camino Real Subgrade 1.24 3606 El Camino Real Podium 1.24 3781 El Camino Real Podium 1.20 Project Averages:1.13 San Antonio Rd HIP -1.0 - 1.5 Less TDM GM/RLOM Focus Area -1.0 - 1.5 Less TDM El Camino Focus Area -1.0 Less TDMLevel 2 Floor Plan grubbproperties.com 788 San Antonio Road | Key Modifications 10 In order to move this project forward, building height maximum needs substantial change. Our proposal for 85’0” is consistent with the El Camino Focus Area maximum. This height requirement is a consistent request among recent multi-housing development proposals, with the average number of stories above grade being 7. Due to Site coverage limitations, Grubb is requesting 8 stories. Height Project Height Above Grade Stories 788 San Antonio 85’0”8 762 San Antonio 79’0”7 800 San Antonio 55’0”5 3997 Fabian 88’0”7 4015 Fabian 81' 10"7 3150 El Camino Real 79’0”7 3606 El Camino Real 83'5"7 3781 El Camino Real 90'3"7 Project Averages:80’0”6.88 San Antonio Rd HIP 50’0”4 GM/RLOM Focus Area 60’0”5 El Camino Focus Area 85’0”7 Thank you. From:Palo Alto Forward To:Council, City Subject:5/19 - Agenda Items #3 & #4 Date:Sunday, May 18, 2025 9:09:27 PM Attachments:San Antonio Support Ltr (05.18.25) - Google Docs.pdf CAUTION: This email originated from outside of the organization. Be cautiousof opening attachments and clicking on links. Please find our attached support letter for the two housing projects (items #3 and #4) on SanAntonio that are on the agenda for Monday, May 19th. Thank you, -- Amie AshtonExecutive Director Palo Alto Forward650-793-1585 May 18, 2025 SUBJECT: Agenda Items #3 and #4 - San Antonio Road Housing Projects Honorable Mayor Lauing and Council Members, We write in support of the projects at 788-796 San Antonio Road and 800-814 San Antonio Road. Both projects would provide much-needed housing units in our city, in an area specifically planned for growth. The PHZ applications for the projects will take years to process, including hundreds of staff hours for the minimum four to seven (or more) public hearings, associated staff reports, public notification, packet production, and analysis. We hope these projects will be subject to a more efficient review process. They both come close to meeting the GM/ROLM zoning development standards, a designation that happens to be located across the street from these project sites. We ask you to think creatively here, as you have with the GM/ROLM and El Camino Real Focus Area zoning changes for housing. While our housing pipeline is robust, even if every project was approved by 2026 – we would still be less than half-way to our Housing Element goal. We simply need more units in more places across the city. The 288 units proposed as part of these two projects are a welcome addition to our housing pipeline. Sincerely, Amie Ashton, Executive Director And on Behalf of the Board of Palo Alto Forward From:slevy@ccsce.com To:Council, City; Lait, Jonathan Subject:Agenda items 3 and 4 Date:Saturday, May 17, 2025 1:02:31 PM CAUTION: This email originated from outside of the organization. Be cautiousof opening attachments and clicking on links. ! Dear Mayor Lauing and council members, Applicants at 788 and 800 San Antonio are considering new applications on these sites to replace the council approved applications that were in the city's housing pipeline. Each project would now include more housing units and have other differences from the approved projects but are on the same sites in the same location adjacent to the GM/ROLM sites that have been identified for housing. The applicants cite increases in the cost of construction in seeking additional units. Council is aware of the impact of recent increases in labor and construction materials costs as they have increased construction costs for many projects that the city is pursuing. These increases may continue as a result of new tariff and immigration/deportation policies. None of this is the fault of council or staff but the increases are an economic reality. Since each site has a previously approved project, I hope council can give advice toapplicants that move these concepts forward consistent with economic feasibility. I am concerned that the review process will start anew and could take a long time and further increase costs. As these sites have already been reviewed, I am hopeful that council and staff can find ways to shorten the review process should the owners submit new applicaions. I would hate to lose these sites from our housing pipeline. Stephen Levy Director Center for Continuing Study of the California Economy This message could be suspicious The sender's email address couldn't be verified. Mark Safe Report Powered by Mimecast From:Planning and Development Services To:Council, City Subject:San Antonio Area Plan - Community Advisory Group Applications Date:Thursday, May 15, 2025 4:56:53 PM CAUTION: This email originated from outside of the organization. Be cautious of openingattachments and clicking on links.     San Antonio Road Area Plan Community Advisory Group (CAG)   Community Advisory Group (CAG) are still open through May 30! The San Antonio Road Area Plan is an initiative to reimagine land use, transportation, and community development along and around San Antonio Road. The project is scheduled to run through late 2027 or early 2028. Community engagement is a key priority of the planning effort underway. A Community Advisory Group (CAG) will serve as an advisory body to the project team. The application process is now open! Apply by 5 p.m. on Friday, May 30, 2025 to be considered. The San Antonio Road Corridor has been designated for mixed-use residential and multi-family housing in the City’s 2023-2031 Housing Element Update. Creating new opportunities for residents, businesses, and visitors, the San Antonio Road Area Plan objectives are to establish policies, development and design standards, and to plan for necessary public infrastructure, including improving bike and pedestrian access along and across San Antonio Road. The CAG will provide perspectives from multiple stakeholders during the planning process. The group will meet up to six times throughout the project. Meetings will be open to members of the public and held on weekday evenings for approximately 1.5 to 3 hours. Meetings are anticipated to occur over a 2-3 year period. While not a decision-making body, the CAG will provide valuable insight and take on the following roles: Discuss vision and principles. Review and respond to key information collected for the plan. Provide input on goals and policies; housing, land use, and transportation options; and key issues and trade-offs. Provide feedback on the draft plan. If you are interested in participating in the CAG, apply now! Apply Now!   Connect with us!   Planning and Development Services | 250 Hamilton Ave 5th Floor | Palo Alto, CA 94301 US Unsubscribe | Update Profile | Constant Contact Data Notice Constant Contact