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HomeMy WebLinkAbout2025-10-22 City Council Summary MinutesCITY COUNCIL SUMMARY MINUTES Page 1 of 10 Special Meeting October 22, 2025 The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M. Present In Person: Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely: Burt Absent: None Call to Order Mayor Lauing called the meeting to order. The clerk called roll. Councilmember Burt invoked the Just Cause Provision of AB 2449 due to traveling while on business of the agency. Boards, Commissions, and Committees Appointments 1. Appointment of Candidates to the Human Relations Commission (HRC), Parks and Recreation Commission (PRC), and Public Art Commission (PAC); CEQA Status: Not a Project Christine Prior, Assistant City Clerk, explained the voting process. Paper ballots would be passed out to the Councilmembers along with an email ballot for Councilmember Burt. Human Relations Commission First Round Voting for Three (3) Vacancies (Seats 2, 3, 7) on the Human Relations Commission ending on October 31, 2028 Allyson C. Rosen: Bridget Algee: Burt, Lythcott-Haims (2) Mare Lucas: Michelle Kraus: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker (7) Raizel Rosenberg: Lauing, Lu, Stone (3) SUMMARY MINUTES Page 2 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 Salwa Ansari: Burt, Lu, Lythcott-Haims, Reckdahl, Veenker (5) Sridhar Karnam: Lauing, Reckdahl, Stone, Veenker (4) Sunny Dykwel: None of the Above: Candidate Michelle Kraus receiving seven votes is appointed to the full-term expiring on October 31, 2028. Candidate Salwa Ansari receiving five votes is appointed to the full-term expiring on October 31, 2028. Candidate Sridhar Karnam receiving four votes is appointed to the full-term expiring on October 31, 2028. Parks and Recreation Commission First Round Voting for Three (3) Vacancies (Seats 2, 3, 4) on the Parks and Recreation Commission ending October 31, 2028. Bobi Adle: Burt, Reckdahl (2) Brenton Hanlon: Drew Pearson: [Application withdrawn by applicant] Hurjane Vongsachang: [Application withdrawn by applicant] Marc Schoenen: Lu, Lythcott-Haims, Veenker (3) Nellis L. Freeman, Jr.: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker (7) Roger V. Smith: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone (6) Vadim Axelrod: Lauing, Stone, Veenker (3) None of the Above: Candidate Nellis L. Freeman, Jr. receiving seven votes is appointed to the full-term expiring on October 31, 2028. Candidate Roger V. Smith receiving six votes is appointed to the full term expiring on October 31, 2028. No other candidate received four votes required to be appointed to the full-term expiring October 31, 2028. A second round of voting is required. Second Round Voting for One (1) vacancy on the Parks and Recreation Commission ending October 31, 2028 Marc Schoenen: Burt, Lu, Lythcott-Haims (3) Vadim Axelrod: Lauing, Reckdahl, Stone, Veenker (4) None of the Above: SUMMARY MINUTES Page 3 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 Candidate Vadim Axelrod receiving four votes is appointed to the full term expiring on October 31, 2028. Public Art Commission First Round Voting for Three (3) Vacancies (Seats 1, 4, 7) on the Public Art Commission ending October 31, 2028. Anjana Joshi: Burt, Lauing, Stone (3) Claude Ezran: Reckdahl (1) Donny Foley: Eedit Bareket: Marilyn Gottlieb Roberts: Lu, Lythcott-Haims, Veenker (3) Robin Mullery: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker (7) Simon Tran: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker (7) None of the Above: Candidate Robin Mullery receiving seven votes is appointed to the full-term expiring on October 31, 2028. Candidate Simon Tran receiving seven votes is appointed to the full-term expiring on October 31, 2028. No other candidate received four votes required to be appointed to the full-term expiring on October 31, 2028. A second round of voting is required. Second Round Voting for One (1) Vacancy on the Public Art Commission ending on October 31, 2028. Anjana Joshi: Burt, Lauing, Reckdahl, Stone, Veenker (5) Marilyn Gottlieb Roberts: Lu, Lythcott-Haims (2) None of the Above: Candidate Anjana Joshi receiving five votes is appointed to the full-term expiring on October 31, 2028. Agenda Changes, Additions and Deletions None. SUMMARY MINUTES Page 4 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 Public Comment None. Council Member Questions, Comments and Announcements None. Study Session 2. City Council Feedback on an Updated Housing Project Design Concept and Other Project Updates Related to the City and Alta Housing Partnership to Develop the Downtown Surface Parking lot at the Corner of Kipling Street and Lytton Avenue (Lot T) for Affordable Housing. CEQA Status – Not a Project. Item Heard Out Of Order After #3 Julia Knight, Senior Program Manager, Department of Planning and Development, provided a slide presentation including an agenda, Lot T location, policy context, January 2025 direction, study session purpose, design options, option comparison table, cost comparisons, City contribution, project review process, project timeline, Kipling Street axon, Kipling Street north elevation, interior lot line axon, ground level plan, podium level plan, upper level plans, contextual massing diagrams, and study session. Councilmember Stone inquired if Staff has heard anything as far as the county's plans moving forward on affordable housing funding given their financial problems caused by HB1. Carlos Castellanos, Vice President of Development, Alta Housing, replied the idea of the gap was to show there are other alternative sources to look at instead of the county. The county would be a one-stop place to cover the $2 million gap. Councilmember Stone asked if shifting from 30 to 60 percent to 30 to 120 percent would be for the entire project or just for the units the gap funding would be able to cover. Vice President Castellanos responded it would be a mixture of units. There would still be some at a much lower AMI level. A range of affordability will still be maintained. Councilmember Lythcott-Haims wanted to hear why the applicant thought studios would not be desirable. Randy Tsuda, President and CEO, Alta Housing, answered that input to Council was based on experience in other apartments where there is a mixture of bedroom sizes including studios. The units that tend to take the longest to rent up are the studio units. Councilmember Lythcott-Haims asked what a studio proposed in option three rent for monthly. President Tsuda responded it would depend on the allocation of AMIs by unit by funding source. At the 30 percent AMI level, a studio would rent for $867 per month. At that SUMMARY MINUTES Page 5 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 same AMI level, one bedroom would be $919 per month. At the 60 percent AMI level, studios would be $1835 a month and a one bedroom $1956. Councilmember Lu asked how much the City contribution would change for each option. Vice President Castellanos answered a range for the three different scenarios was provided being respectful of a per unit amount being set aside knowing that the City has a certain finality as to how much funds are available. The gap is what the difference is and it is felt there are other sources that can be found to make up those funds. The financing situation has not changed much from January to present. The state has continued to provide a financing source this year and hopefully next year. There is a bond measure that could be on the ballot that could increase that. Projects that are being deemed as surplus land from cities tend to have an advantage over projects that are privately owned. Councilmember Burt wanted clarification from Staff that this goes through the approval process for affordable housing. Jonathan Lait, Director, Department of Planning and Development, responded it does not mandate the process since they are partners in the application but that would be the application process that would apply. Through the partnership, there could be more engagement with the Architecture Review Board if the Council thought it appropriate. Councilmember Burt asked for clarification on how much Lot L is currently parked and that there would not be a net loss in public parking. Director Lait stated replacement parking would be provided for in the Hamilton Garage. The utilization for this lot currently is 40 percent. Caio Arellano, Chief Assistant City Attorney, added Lot T is currently striped for 52 spaces about half of which are all-day employee permit parking. The proposed garage is on Lot D and would provide 274 spaces and Lot D currently has 88 spaces. Roughly 190 spaces will be gained. Councilmember Burt wanted to know how many spaces will be for retail customers. Mr. Arellano responded there is currently no housing component proposed for the Lot D garage. The 274 figure will be for public parking for the businesses in the downtown area. Councilmember Burt about talk of a loan rather than the grant. Ms. Knight said a long-term loan is just a typical tool and how most cities support affordable housing projects like this. It is common the loan is forgiven. Vice Mayor Veenker inquired if option two could be flipped around to have the courtyard come off the street. Adrianne Steichen, PYATOK Architecture, explained flipping the courtyard to face the street would result in losing potential building square footage. To keep the unit count higher, smaller units have to be provided. Public Comment: 1. Adam S. expressed appreciation for the project and was in favor of Option 2. 2. Winter (Zoom) was lifted up by the progress of the project. SUMMARY MINUTES Page 6 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 3. Jeremy L. (Zoom), Executive Director of Palo Alto Forward, expressed the organizations appreciation for the project and hopes for Council to streamline permitting and promote the project that is most financially feasible to build. NO ACTION 3. Reinforcing Best Practices in Managing Consultant Services Item Heard Out Of Order Before Item #2 Ed Shikada, City Manager, provided a slide presentation including the purpose, overview, progress to date, consultant engagement overview, consulting services approved in 2024 (Attachment A), current example, and next steps. Councilmember Stone asked for an estimate on how much consultant services for 2024 would have cost if they had been done in-house. City Manager Shikada explained the alternative would be to hire people with the expertise creating long-term liabilities of pensions and retirement obligations on work that is finite. Councilmember Stone encouraged finding ways to leverage the expertise of community residents rather than hiring expert consultants. City Manager Shikada assured that Council does utilize that expertise when possible. Councilmember Stone thought this was an opportunity to address the need for the consultant to be responsive to Council and community and not defensive of the recommendations received. City Manager Shikada agreed this is an area that could be improved. Councilmember Lu asked if data for 2025 consultants will be available. City Manager Shikada agreed to make sure that information is brought forward next time it is brought back to the Council. Councilmember Lu expressed curiosity on the take of the department heads and leaders on potentially in-housing some of these positions. City Manager Shikada thought the interviews conducted focused more on the contracting process. The departments are interested where it might make sense to bring the work in-house. It is a balance of where the work may not be sustainable in the long term. Councilmember Lu suggested there would be value in spending money on consultants if there were great reports that elucidated key issues and inquired if there are ways to assess or grade the 2024 consultants in this dataset. City Manager Shikada responded there is no standardized way to provide that type of evaluation. Work is being done to generate that product. That information is sensitive and needs to be done in a way that is appropriate and not punitive for companies. Councilmember Lu thought consultants should push back against Staff and the SUMMARY MINUTES Page 7 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 community when it is their expert opinion that Council is wrong in some way. Councilmember Lu was interested in taking some of these things in-house especially around planning, inspection, project management, or IT and hoped something concrete could be generated for the next budget cycle. Councilmember Burt concurred with Councilmember Stone's comments about public outreach and wanted to see more of a deliberate process of leveraging local domain expertise. One concern is there is an expensive public outreach process and in many circumstances of consultant uses, it appears as if the input from the public, boards and commissions, and Council is largely disregarded and then the end product inadequately reflects a lot of the input that is based upon context knowledge and not just the important domain expertise. It is more like checking boxes than authentically integrating the value of that contextual knowledge and in the understanding of the boards, commissions and the Council of the community and policy recommendations. That goes into looking at how to better leverage local domain expertise. The genesis of this review was the Finance Committee looking to figure out how to use consultant services, public outreach, and AI more effectively. There was question if this review process was an effort to ferret out perceptions and concerns over the years in practices. City Manager Shikada stated it has not been obvious how best to do that and was open for suggestions. There might be a special community that might be a way to invite feedback. Vice Mayor Veenker wondered if there is a set of criteria that can be used across departments to standardize the decision to outsource. City Manager Shikada indicated tools are being worked on to assist in that evaluation. Councilmember Reckdahl said a big problem with consultants is not having local knowledge. An employee would know the City in order to have better context in recommendations. Another problem is regurgitating an analysis that had been done before but still charging full price. There is some good expertise that is not available in-house. It was suggested to make contracts smaller and offload some of the work to a full-time employee. Councilmember Lythcott-Haims was curious to what extent it is hard to bring certain expertise in-house. City Manager Shikada replied it varies in terms of discipline over time. Reviewing this on an annual basis provides the opportunity to regularly test when it makes sense to do it in- house versus continue to outsource. Public Comment: 1. Jeffrey S. underlined the virtue of calling on local or area resident experts with one caution. During deliberations where an independent expert was not engaged or not available, officials have called upon and relied upon resident experts who are paid advocates as if they are independent. NO ACTION SUMMARY MINUTES Page 8 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 Action Items 4. Update and Direction to Staff on the Downtown Housing Plan Project and Implementation of Senate Bill 79 (2025-2026). CEQA Status: Exempt Under CEQA Guidelines Section 15262. Vishnu Krishnan, Senior Planner, provided a slide presentation including the Downtown Housing Plan objective, favorable conditions that support housing, challenges to housing production, community engagement efforts, market snapshot today, mid-rise housing can perform as well as conditions change, and preliminary considerations for the Downtown area. Director Lait joined the presentation including SB 79 (2025-2026), transit-tiering and applicable standards, TOD alternative plan, Downtown Housing Plan/SB 79 implementation 3 options, nd Council direction. Mayor Lauing had questions about the order and how this would mesh with the approved housing element. Director Lait responded SB 79 does not change the RHNA allocation. It tracks to the program about surface parking lots Downtown. If they are not on pace to meet the numbers they planned to build by the time the Downtown Housing Plan is complete, they would look to find where lower income affordable housing will be placed. That is something that might be done regardless of the Downtown Housing Plan. It could be a part of the Downtown Housing Plan or a part of the SB 79 Alternative Plan. Councilmember Reckdahl wanted to know the intended scope of the Downtown Housing Plan. Senior Planner Krishnan explained design standards, infrastructure that might be upgraded to accommodate the increased growth, transportation, project feasibility when market conditions get better, and environmental appeal will all be part of the scope. Director Lait noted those things were all a part of the MTC Grant requirements. Councilmember Reckdahl had questions about the TOD Alternate Plan. Director Lait explained it would give an opportunity for a more nuanced application of the law and provide a gentler transition in scale. It would give visibility to shift the floor area and density from one of the nodes to another node which might offer greater protections in some areas maybe also focusing on where there is greater ridership on some of the different train stations versus others. Conversely, there will be additional costs to the City to develop the plan. There are significant unknowns with regard to implementation. The HCV review process is unknown. It is uncertain what level of environmental review might be required. There is judgment that needs to be applied when deciding which parcels will receive lower density and which ones will have a greater scale of intensity potentially setting up the perception of winners and losers. The density shifts require more height, floor area, and density on parcels that are designated for greater density and development. State law currently allows up to 75 feet or 65 feet but if some of those parcels are reduced in half, that resulting area density has to be shifted to another area that might be at 75 feet and now needs to be at 100 and x feet. A 5 over 2 type of construction anticipated at 75 feet to make up the difference from the less dense areas now has to increase in height. There is a provision in the state law that talks about a preponderance of to demonstrate a barrier is not being created to make it infeasible for the state law implementation to occur. With the alternative plan, it might be SUMMARY MINUTES Page 9 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 possible to go higher. A suggestion was made to form an ad hoc to sit with Staff to flesh out the pros and cons giving a chance to work up a better understanding of the state law and talk to regional partners. After that discussion, Staff could report back to City Council with the ad hoc's recommendation on what should be done. Councilmember Burt asked if the deadline for the Alternative Plan is July 1. Director Lait did not believe that is a deadline for approval. If it were in effect before then, the Alternative Plan would take precedence and apply. Councilmember Burt inquired if a rough estimate has been done of how many additional units would result from SB 79 if it was fully built out. Director Lait replied that analysis has not been done. Councilmember Burt queried if SB 79 will allow the restriction of lot combining. Director Lait said SB 79 did not change that local requirement. Albert Yang, Assistant City Attorney, agreed with Director Lait. Councilmember Burt wanted to know if there are obligations under SB 79 to allow lot combining in commercial areas. Assistant City Attorney Yang responded as long as it complies with the objective limits in place, a lot merger would need approval. Councilmember Burt wanted explanation why there is doubt that there would be an EIR. Director Lait did not know the level of environmental review that may be required. The reason it is uncertain is this is implementation of state law and it does not require environmental review. The density described has already been approved. If something were to be adopted by ordinance, there are other provisions of state law where it would qualify for an exemption. There may be other areas where if the comprehensive plan has to be amended to align with the zoning code changes being anticipated under the alternative plan, that might trigger environmental review. SB 79 allows developers to take advantage of state density bonus law. More waivers can be requested. State law specifically says the height of the building cannot be increased beyond the SB 79 standard if the local jurisdiction has a lower height limit. On the alternative plan, a developer would be able to take advantage of state density bonus law and increase height. Councilmember Lu wanted expansion on what is left for the Downtown plan and what would be lost if that were deprioritized. Director Lait explained during the housing element, Staff was trying to identify opportunity sites. The Transit Center was a great area to locate greater density. That would include conversations taking place with the ULI Study with the Stanford owned lands of the Transit Center. There was no way to complete that process in time to meet the state deadline so other sites were located in the City for housing. As part of interest in doing the Downtown Housing Plan was to think about incentivizing more housing near the Transit Station. Councilmember Lu asked if there is anything specific on the short list that would be lost. Director Lait responded the shrink wrap rule is a frustration for Downtown property owners who want to redevelop buildings that area already exceeding the gross floor area allowed by code. They are allowed to rebuild in the same form envelope but that does not create an incentive to actually redevelop the property. Staff was pondering the idea of a way to encourage a downtown property owner who may have multiple properties to send their non- conforming floor area or even conforming floor area to a conforming or non-conforming site so SUMMARY MINUTES Page 10 of 10 Sp. City Council Meeting Summary Minutes: 10/22/2025 that the sender site could then be redeveloped as housing, multi, high density, or medium density housing. That would be a topic to be discussed by the ad hoc. Vice Mayor Veenker was supportive of an ad hoc to counsel Staff but leaned toward option two. Mayor Lauing advised being aggressive about looking into the alternative plan options. Councilmember Stone agreed with the mayor and vice mayor's comments. Public Comment: 1. Deborah G. asked spoke in support of SB 79 and hoped Council would take leadership presenting feedback received to the people pushing back on it. Mayor Lauing observed there are two ad hocs that need created requiring four to six Council members and asked the members to send preferences to work on them to Christine. NO ACTION Adjournment: The meeting was adjourned at 8:38 PM