HomeMy WebLinkAboutStaff Report 2511-5570CITY OF PALO ALTO
Retail Committee
Regular Meeting
Thursday, January 22, 2026
9:00 AM
Agenda Item
1.Consider and Provide Feedback on Retail Revitalization Measures and Initiatives Related
to the City Council's Economic Development and Retail Vibrancy Priority. CEQA Status:
Not a Project Presentation
Retail Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: January 22, 2026
Report #:2511-5570
TITLE
Consider and Provide Feedback on Retail Revitalization Measures and Initiatives Related to the
City Council's Economic Development and Retail Vibrancy Priority. CEQA Status: Not a Project
RECOMMENDATION
Consider options and recommendations for a retail revitalization strategy and provide feedback
to staff on preparation of an ordinance.
BACKGROUND
This item is being presented to the Retail Committee to provide an update on this effort, report
on the Planning and Transportation Commission’s (PTC) recent discussion. The Committee may
offer additional feedback for staff and for the Commission’s consideration.
On October 29, 2025, the PTC held a Study Session to review options and recommendations for
a retail revitalization strategy and to provide feedback to staff on preparing a permanent
ordinance to replace the interim ordinance adopted by the City Council in late 2024. This work
supports the 2025 Council Priority on Economic Development and Retail Vibrancy, specifically
Objective 4: “Council consideration of an ordinance that expands retail opportunities and
promotes retail resiliency. Consider further refinement to the retail and retail-like definition
and explore changes to the retail preservation ordinance.” Additional background is provided in
the PTC Staff Report included as Attachment A.
The October 29, 2025 PTC staff report outlines options and recommendations for replacing the
interim regulations with a permanent ordinance and requests feedback on key topics.
Attachments to that report include:
A. Issues and Options for Zoning Amendments Workbook
B. Overlapping Use Regulations Applicable to Charleston and Midtown Shopping Centers
C. Retail Maps
A summary of the feedback from the PTC study session is included in Attachment B.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
CITY OF PALO ALTO
Planning & Transportation Commission
Regular Meeting
Wednesday, October 29, 2025
6:00 PM
Agenda Item
3.STUDY SESSION: Consider Retail Revitalization Measures and Initiatives Related to the
City Council's Economic Development and Retail Vibrancy Priority. CEQA Status: Not a
Project Staff Presentation
Item No. 3. Page 1 of 7
Planning & Transportation Commission
Staff Report
From: Planning and Development Services Director
Lead Department: Planning and Development Services
Meeting Date: October 29, 2025
Report #: 2509-5202
TITLE
STUDY SESSION: Consider Retail Revitalization Measures and Initiatives Related to the City
Council's Economic Development and Retail Vibrancy Priority. CEQA Status: Not a Project
RECOMMENDATION
Consider options and recommendations for a retail revitalization strategy and provide feedback
to staff on preparation of an ordinance.
EXECUTIVE SUMMARY
This report identifies zoning regulatory barriers that may restrict retailers from locating in
certain commercial districts and suggests options for how to address these issues. These
options build on consultant reports prepared in 2023 and 2024 to support the City Council’s
priority to develop a retail zoning strategy. The City Council adopted an interim ordinance to
implement this strategy in December 2024. That ordinance will remain effective until December
31, 2026, or upon adoption of a replacement ordinance. This work effort aims to refine the
retail strategy and adopt a permanent ordinance.
Attachment A to this report presents existing code language and suggests options for how to
modify code language to address these issues. It is intended to be used as a workbook for
Planning and Transportation Commission (PTC) members to make notes, come up with ideas,
and make recommendations. City staff will return with an ordinance based on the PTC
feedback.
BACKGROUND
In 2023 and 2024, one of the City Council’s priorities was Economic Development and
Transition, including development of a retail zoning strategy. To implement this priority,
Streetsense prepared a comprehensive economic development strategy report in June 2023.
Subsequently, Michael Baker International conducted local outreach, review of peer city
initiatives and other policies to identify land use regulations that would support a more robust
Item No. 3. Page 2 of 7
retail environment. This work effort culminated in a retail revitalization study in May 2024 and
series of zoning amendment options in August 2024.
1 the City Council Retail Committee
reviewed the final retail revitalization study and provided direction to staff on several zoning
amendments that should be implemented immediately to support retail and retail-like uses in
the City. Recommendations included ways to streamline retail zoning regulations, increase
flexibility in permitted land uses, and update parking policies to meet current needs. Although
the PTC had held six hearings on the Retail Study (in addition to four meetings of the PTC retail
ad hoc committee), the PTC had not yet considered or recommended specific zoning
amendments. In the interest of time, the City Council therefore adopted an interim ordinance
to adopt the following amendments identified by the City Council Retail Committee:
Modifying the formula retail definition to allow for larger enterprises;
Increasing flexibility for “retail-like” uses and expanding permissible uses for ground
floor spaces, including personal services, allowances for pet grooming, financial
institutions, and automobile showrooms; and
Replacing the high threshold required for waivers and adjustments to meeting use
regulations.
2 and will remain effective until December 31, 2026, or upon adoption of
a replacement ordinance.
refinement to retail and retail-like definition and explore changes to retail preservation
ordinance. (12)"
1 City Council Retail Committee September 18, 2024 agenda:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14946; staff report and attachments:
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=5833&meetingTemplateType=2&comp
iledMeetingDocumentId=11747
2 City Council December 16, 2024 agenda:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14537; staff report and attachments:
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=6659&meetingTemplateType=2&comp
iledMeetingDocumentId=12596
Item No. 3. Page 3 of 7
ANALYSIS
This staff report provides options and recommendations to replace the interim regulations with
a permanent ordinance and requests the PTC’s feedback key topics. This report’s
recommendations were prepared by City staff and land use consultants in coordination with a
retail broker with over 30 years' experience. The recommendations are informed by
conversations with Palo Alto's retail community.
Palo Alto continues to experience persistent vacancies in retail storefronts throughout the City
and at higher rates than some comparable cities on the peninsula. Reducing regulatory barriers
can help attract businesses by making it easier for tenants to apply and gain approval for zoning
permits. These shorter permitting timelines reduce the amount of time and money retailers
spend on their monthly leases before they are allowed to occupy and build out their tenant
spaces.
Below are key issues for the PTC to consider. Attachment A provides a workbook that details
existing regulations, and options for the PTC’s consideration to address these issues.
1. Refine and Make Permanent Interim Regulations: Since the interim ordinance will
sunset in December 2026, the new retail revitalization ordinance will need to make
these changes permanent. There is also an opportunity to revisit these changes and
refine them, as needed.
2. Address Other Topics Identified by City Council in its November 2024 Motion and
Subsequent Discussions: During consideration of the interim ordinance, the City Council
discussed several topics that require consideration for the permanent ordinance.
Additionally, City staff have identified issues that have come up in discussions with
potential tenants and as part of permit applications:
Pedestrian-Orientation: Continue to refine the definition of retail-like land uses to
establish a performance-based criteria that promotes pedestrian activity in
commercial areas (e.g., for medical office uses such as ophthalmologists that have a
glasses sales’ component). Change retail-like use definition to substitute “high level”
with a word(s) comparable to “substantive”.
Expanded Uses: Expand the range of permitted uses allowable in the Ground Floor
(GF) and Retail (R) combining districts, and include standards to allow non-retail like
uses in certain circumstances;
Retail Preservation Ordinance: Review and recommend whether to amend retail
preservation ordinance and evaluate changes to the geographic extent or
applicability;
Allowed Office Uses in Rear: Consider allowing office or other uses in the rear
portion of deep commercial suites, or locations that are accessed off of side streets
or alleys;
Item No. 3. Page 4 of 7
Planned Communities: Allow Director authority to interpret list of allowed uses in
commercial Planned Community zones that allow "retail" to allow some of these
"retail-like" uses; and
Pet-Related Uses: Consider where pet grooming, cat cafes, and pet stores should be
allowed, and whether any of these uses are considered overnight "boarding" and
therefore only allowed in a few zones.
Retail Preservation Ordinance Applicability. The Retail Preservation Ordinance
applies to all zoning districts that allow retail as a permitted or conditional use, as
shown in Attachment C. Only Housing Element opportunity sites are exempted.
Therefore, to the extent that any retail is located in a RM-30 or RM-40 zoning
district, it would need to be replaced following redevelopment of a site. Especially
given concerns about vacancy rates and retail viability, the City should consider
strengthening retail where it can be most successful, regulating ground-floor retail in
those locations (e.g., -GF and -R combining district locations), and allow more
flexibility outside those areas. Attachment C also illustrates zones where ground-
floor retail is required, separate from Retail Preservation requirements.
3. Consider Other Amendments that Align with Streetsense and Michael Baker
International Recommendations: There are several other ways that the City can revise
regulations to reduce regulatory barriers and send signals to retail brokers and potential
tenants to encourage them to locate in Palo Alto:
Parking Requirements Limit Change of Use Applications: Outside of transit-rich
locations that are subject to Assembly Bill (AB) 2097 parking exceptions, retailers
must provide additional parking if their use category contains a higher parking ratio
that exceeds the existing parking supply. This may be infeasible due to site
constraints and limiting when minimum parking ratios exceed parking demand.
For example, if an existing tenant space on El Camino Real converts from an
“extensive” retail use like a bookstore to an “intensive” retail use like a hair salon,
the parking requirement increases from 1 per 350 sq. ft. to 1 per 200 sq. ft. For a
2,100 square foot space, this would increase the parking requirement from 6 to 11
spaces. If this is not physically feasible on the site, the intensive retail use is not
considered code compliant and will not be approved under the current regulations.
Complicated Zoning Map: When choosing where to locate, brokers and retailers will
look at the zoning ordinance and zoning map to understand where they are
permitted to locate. Palo Alto’s 18-page zoning map makes it challenging to identify
individual zoning districts where specific uses are permitted.
Complex Layers of Regulations: Commercial use regulations are located in many
sections of the code, which can create confusion for brokers and retailers to
understand the rules. For example, in the Charleston and Midtown Shopping
Centers, potential tenants must review four separate code sections (CN district use
Item No. 3. Page 5 of 7
regulations, CN district tenant size regulations, Charleston and Midtown use
regulations, and Ground Floor (GF) use regulations) to identify which uses are
permitted and at what sizes, only to find out that the -GF use regulations supersede
the other regulations. This issue is analyzed in Attachment B which reveals several
issues:
There are inconsistencies across the use regulations and an exceptional number
of regulations which create confusion and a burden for applicants, staff,
community members and decision-makers to determine which uses are allowed
and at what permit levels.
The GF combining district regulations states that “Where the ground floor
combining district is combined with a commercial district, the regulations ...
apply in lieu of the uses normally allowed in the underlying district.” That means
that the CN use regulations and size limitations, and Charleston Shopping Center,
and Midtown Shopping Center in Palo Alto Municipal Code Chapter 18.16 are
moot for the purposes of these two neighborhood centers.
In several instances, the GF combining district is more permissive than the base
zoning use regulations, suggesting that the CN district regulations might be too
restrictive.
Conditional Use Permits (CUPs) are Perceived as Burdensome: In many
communities, CUPs are typically reviewed at a public hearing by a decision-body
such as a planning commission. Administrative Use Permits (AUPs) are the term of
art for permits that are reviewed and approved by the City staff. In Palo Alto,
however, CUPs are a Director decision that may only be heard by the PTC (and
subsequently the City Council) upon request. In practice, most CUPs in Palo Alto do
not rise to the level of public hearing by the PTC. This CUP term may be
unnecessarily warding off potential tenants who are not familiar with the City’s
processes.
See Attachment A for a workbook of interim/existing regulations and options for modifications
and for making them permanent.
FISCAL/RESOURCE IMPACT
This study session has negligible fiscal or resource impacts. Ultimately, adoption of an
ordinance that increases permitted uses and reduces regulatory hurdles may reduce permitting
timelines, staff and decision-maker time, and commercial vacancy rates, and in turn increase
sales tax revenues.
POLICY IMPLICATIONS
This initiative will support implementation of the following Comprehensive Plan policies:
Item No. 3. Page 6 of 7
B4.2.1: Revise zoning and other regulations as needed to encourage the preservation of
space to accommodate small businesses, start-ups and other services.
B4.2.2: Consider planning, regulatory, or other incentives to encourage property owners
to include smaller office spaces in their buildings to serve small businesses, non-profit
organizations, and independent professionals.
B5.1.14: Revise zoning and other regulations as needed to encourage the revitalization
of aging retail structures and areas. Encourage the preservation of space to
accommodate small, independent retail businesses and professional services.
L1.6.1: Review regulatory tools available to the City and identify actions to enhance and
preserve the livability of residential neighborhoods and the vitality of commercial and
employment districts, including improved code enforcement practices.
L4.2.1: Study the overall viability of ground-floor retail requirements in preserving retail
space and creating an active street environment, including the types of locations where
such requirements are most effective.
L4.2.2: Evaluate the effectiveness of formula retail limits adopted for California Avenue.
Develop incentives for local small businesses where warranted.
L4.2.3: Explore and potentially support new, creative and innovative retail in Palo Alto.
L4.5.1: Revise zoning and other regulations as needed to encourage the preservation of
space to accommodate small businesses, start-ups and other services.
L4.5.2: Consider planning, regulatory, or other incentives to encourage property owners
to include smaller office spaces in their buildings to serve small businesses, non-profit
organizations, and independent professionals.
L4.16.1: Maintain distinct neighborhood shopping areas that are attractive, accessible
and convenient to nearby residents.
L4.10.2: Create regulations for the California Avenue area that encourage the retention
or rehabilitation of smaller buildings to provide spaces for existing retail, particularly
local, small businesses.
T5.1.2 Consider reducing parking requirements for retail and restaurant uses as a way to
encourage new businesses and the use of alternative modes.
As part of the implementation of Housing Element Program 3.2 (Monitor Constraints to
Housing), the City is required to analyze how potential new regulations may impact housing
production, if at all, and recommend solutions to address any adverse impacts. This retail
revitalization initiative is anticipated to reduce retail vacancies, primarily at the ground-level. It
is not expected to impact the rate of housing production, but may have the effect of making
ground-floor retail uses within residential mixed-use buildings more flexible and viable.
STAKEHOLDER ENGAGEMENT
As part of the larger economic development initiative, the project team conducted stakeholder
interviews with landowners, businesses, the Chamber of Commerce, and interviewed peer
cities in 2022 and 2023. The PTC and PTC ad hoc held over a dozen study sessions and hearings
Item No. 3. Page 7 of 7
to discuss these initiatives leading up to a recommendation on the interim ordinance in 2024.
These meetings have informed this current work effort. As part of this specific task in 2025, the
project team interviewed local retailers and brokers to confirm key issues and seek feedback on
recommended changes.
ENVIRONMENTAL REVIEW
ATTACHMENTS
AUTHOR/TITLE:
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3
2
4
Attachment A: Issues and Options for Zoning Amendments Workbook
This document is intended as a workbook to review existing regulations and consider options for amendments. These
zoning changes would expand allowed uses and visual interest, and reduce regulatory barriers and vacancies.
PAMC Topic Existing Regulation Potential Modification
18.04.030 Definitions
"Animal care"Existing definition:
(12) "Animal care" means a use providing grooming,
housing, medical care, or other services to animals,
including veterinary services, animal hospitals, overnight or
short-term boarding ancillary to veterinary care, indoor or
outdoor kennels, and similar services.
Potential definitions:
"Animal care, daytime" means a use providing care and
services during the daytime only, including grooming,
socializing, housing, and veterinary services.
“Animal care, overnight” means a use providing care and
services that includes overnight or short-term boarding,
such as kennels, animal hospitals, and pet hotels.
Split existing definition to distinguish between pet-
related uses that operate during the day (e.g., pet
grooming), which may be allowed in more locations,
vs. pet-related uses that have boarding and operate
overnight, and may be more regulated.
AND/OR
As new uses like cat cafes arise, staff will still need to
determine whether these uses will have boarding, what
types of animals are accommodated (and in turn what
levels of noise or waste may be generated), and if the
primary use is a café or animal care. Consider whether
to make this more explicit in the zoning code.
AND/OR
Add performance standards for noise and waste.
“Retail
financial
service”
Interim ordinance added new definition:
(A) “Retail finance service” means financial service use
operating in a retail-oriented manner, offering face-to-face
interactions, and convenient in-person transactions in
locations designed for public access. These services
includes retail banks, savings and loan institutions, loan and
lending offices, credit unions, and similar services that
prioritize walk-in customers with access to immediate
financial solutions or combined with a publicly accessible
retail component.
Fix typo (see strikeout)
Make definition from interim ordinance permanent
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3
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4
PAMC Topic Existing Regulation Potential Modification
“Automobile
showroom”
Interim ordinance added new definition:
(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.
Make definition from interim ordinance permanent
Fast Casual
Restaurants
Potential modification, as shown in strikeout/underline:
(47) “Eating and drinking service” means a use providing
preparation and retail sale of food and beverages with a full
menu and providing indoor seating area. Eating and
drinking service include presence of a full commercial
kitchen and commercial dishwasher. For establishments
with incidental sale alcoholic beverages, a minimum of 50%
of revenues from an “eating and drinking service” must be
derived from the sale of food. Related definitions are
provided in subsections (45) (Drive-in/drive- through service,
(125)(B) (Intensive retail service) and (136) (Take-out
service).
Existing definition:
(136) “Take-out service” means a characteristic of an eating
or drinking service which encourages, on a regular basis,
consumption of food or beverages, such as prepared or
prepackaged items, outside of a building, in outdoor seating
areas where regular table service is not provided, in
vehicles parked on the premises, or off-site. Take-out
service does not include intensive retail service uses, as
defined in subsection (125)(B).
Acknowledge that many existing restaurants and most
new restaurant concepts are fast casual/quick serve
with limited kitchens and take-out service. (see
suggested strikeout)
AND
Consider removing “take-out service” definition or
allowing it in additional zoning districts (see district
regulations below)
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4
PAMC Topic Existing Regulation Potential Modification
“Retail-like
use”
Interim ordinance refined definition, as shown in
strikeout/underline:
(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) Retail financial services, as defined in subsection
(56)(A);
(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.
Potential definitions:
(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.
Make definition from interim ordinance permanent.
AND/OR
Refine subsection (K) from “high-level” per Council
motion to “substantive” or similar; or consider removing
the subjective qualifier altogether (see strikeout at left).
OR
Revise bullet (K) to be objective (e.g., storefront
windows, displays, lack of window coverings, public-
facing, open for drop-in service, support pedestrian
activity) to clarify whether an unlisted use meets this
definition.
OR
Expand the (125) “retail service” definition to include
retail-like uses and remove distinction between “retail”
and “retail-like”. This could streamline the code and
broaden the range of permitted commercial uses. This
would require modifying several sections of code to
remove the terminology “retail-like”.
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4
PAMC Topic Existing Regulation Potential Modification
“Formula retail
business”
Interim ordinance refined definition, as shown in
strikeout/underline:
(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.
G. “Servicemark” means a word, phrase, symbol or design, or a
combination of words, phrases, symbols or designs that
Consider removing definition and use from the
conditionally permitted list in the (R) Combining District
on California Avenue. This action would expand viable
uses, potentially reduce vacancy rate, and increase tax
revenues. Many formula retail food businesses are
franchises and owned by local business persons.
OR
Make definition from interim ordinance permanent
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4
PAMC Topic Existing Regulation Potential Modification
identifies and distinguishes the source of a service from one
party from those of others.
18.30(A) Retail Shopping (R) Combining District Regulations (Applicable on California Avenue)
Permitted and
Conditional
Uses on
California
Avenue
Interim ordinance added/modified permitted uses, as
shown in strikeout/underline:
(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.
…
(d) Retail financial services;
(e) Pet grooming services;
(f) Automobile showroom;
Interim ordinance added/modified conditional uses, as
shown in strikeout/underline:
(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, fFitness or
exercise studios exceeding 1,800square feet in gross floor
area on California Avenue; and learning centers intended
for individual or small group settings.
Expand permitted retail uses in addition to interim
ordinance additions to reduce vacancies and increase
customers on California Avenue, such as:
o Allow fitness and exercise studios at any size (or
capped at 5,000 sq. ft. which is the threshold at
which fitness is reclassified from personal service to
commercial recreation). Fitness/training/exercise is
one of the most active tenants today in both small
and large spaces.
o Allow take-out eating and drinking services. Most
new food concepts are quick service, but could
continue to restrict drive-throughs.
o Allow animal care uses, daytime, as permitted uses
and animal care uses, overnight, as conditional
uses.
AND/OR
o Allow office uses that face side and rear yards (i.e.,
not California Ave.). This would accommodate more
tenants and foot traffic without detracting from
California Ave. active storefronts.
AND/OR
o Allow medical offices that contain at least 35 sq. ft.
of retail sales facing on the street (e.g.,
ophthalmologists, medical spas, acupuncturists).
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4
PAMC Topic Existing Regulation Potential Modification
Waivers and
Adjustments
Interim ordinance revised provisions to modify economic
hardship threshold and add alternative viable use, as shown
in strikeout/underline:
(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 Chapter18.30(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.
Expand permitted uses and remove these provisions
entirely to broaden the types of commercial uses and
clarify the rules, without exceptions. The
documentation requirements are too onerous to be
used by retailers, especially owners/tenants new to
Palo Alto, and they don’t provide the certainty most
business are seeking.
OR
Make interim regulation permanent
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4
PAMC Topic Existing Regulation Potential Modification
18.30(C) Ground Floor (GF) Combining District Regulations (Applicable in Downtown core, Midtown, and Charleston Shopping
Centers)
Permitted and
Conditional
Uses in -GF
Overlay
Interim ordinance added/modified permitted uses, as
shown in strikeout/underline:
(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;
…
(8) Retail financial services, except drive-in services;
(9) Pet grooming services;
(10) Automobile showroom;
Interim ordinance added/modified conditional uses, as
shown in strikeout/underline:
(4)Financial services, except drive in services;
…
(6)Learning centers intended for individual or small
group settings;
Add more permitted uses in the GF overlay, based on
allowed CD(C) uses:
o Allow office uses that face side and rear yards (i.e.,
not University Ave.)
o Allow fitness/exercise studios and commercial
recreation up to 5,000 sq. ft. on University Ave.
o Allow daytime pet-related uses, beyond grooming
(see options for “animal care” definition above)
OR
Make interim regulation permanent
Waivers and
Adjustments
Interim ordinance added provisions to accommodate cases
of economic hardship and alternative viable uses, and
specify required documentation. (see previous page)
Expand permitted uses and remove these provisions
entirely to broaden the types of commercial uses and
clarify the rules, without exceptions. The
documentation requirements are too onerous to be
used by retailers, especially owners/tenants new to
Palo Alto, and they don’t provide the certainty most
business are seeking.
OR
Make interim regulation permanent
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4
PAMC Topic Existing Regulation Potential Modification
Commercial District Use Regulations
Expand
Permitted and
Conditional
Uses
Existing regulations, see:
18.18.050 Downtown CD-C, CD-S, CD-N Land Uses
18.16.040 Neighborhood, Community, And Service
Commercial (CN, CC and CS) Districts
Make selective changes to base zoning district land
use regulations since area plans are underway for
Downtown and San Antonio Road, such as allowing:
o Take-out eating and drinking services.
o Animal care uses, daytime, as permitted uses and
animal care uses, overnight, as conditional uses.
o Medical office
o Other uses that are permitted in the -GF and -R
districts (e.g., automobile showrooms, retail
financial services, theaters)
Midtown & Charleston Shopping Centers
Consistent
Use
Regulations
Existing regulations, see:
Midtown & Charleston Shopping Centers allowed uses are
regulated in four separate sections, but GF combining
regulations supersede other use regulations (see
Attachment B for details)
18.16.040 Table 1: CN zoning use regulations
18.16.060 Table 5: CN size of establishments
18.16.040 Table 2: Midtown & Charleston use regulations
18.30(C): GF Combining District use regulations
Remove Midtown and Charleston Shopping Center
specific use regulations. This retains status quo.
OR
Remove GF combining district zoning designation; this
could increase ground-floor office, though office uses
are limited by zoning regulations.
AND/OR
Maintain P combining district to retain pedestrian-
oriented design standards.
9
3
2
4
PAMC Topic Existing Regulation Potential Modification
18.52.030 Basic Parking Regulations
Change of
Use Parking
Requirements
Potential modification, as shown in strikeout/underline:
18.52.030: Basic Parking Regulations
(d) Additions or Changes of Use
For additions or enlargements of any existing building or
use, or any change of occupancy or manner of operation
that would increase the number of parking, loading or
bicycle spaces required, the additional parking shall be
required only for such addition, enlargement, or change and
not for the entire building or use.
Exempt changes in use from parking requirements
(see example strikeout) to provide more flexibility on
existing sites/buildings that cannot physically
accommodate additional parking.
AND/OR
In the longer term (i.e., as part of comprehensive
zoning update), refine parking standards (18.52.040,
Table 1) to better align parking supply and demand for
specific uses.
Mixed-Use
and Shared
Parking
Requirements
Existing regulation:
18.52.040 Off-Street Parking, Loading and Bicycle Facility
Requirements
(c) …For mixed-use projects, the requirements for each land
use shall be applied and required for the overall project.
18.52.050 Adjustments by the Director
(a) Combining Parking Adjustments
Parking reductions may be granted for any combination of
circumstances, prescribed by this chapter, so long as in total
no more than a 30% reduction of the total parking demand
otherwise required occurs, or no less than a 40% reduction
for affordable housing projects (including Single Room
Occupancy (SRO) units).
Remove or increase shared parking threshold since
most commercial uses need parking during the day,
while residential parking peaks after commercial uses
are closed. This would support AB 894/Gov. Code
65863.1 which aimed to increase efficiency of
underutilized parking.
AND/OR
Cross-reference AB 2097/Gov. Code 65863.2 more
overtly to clarify where parking exemptions apply.
9
3
2
4
PAMC Topic Existing Regulation Potential Modification
18.76.010 & 18.77.060 Process and Administration
Conditional
Use Permit
Process
Existing regulation:
18.76.010 Conditions Use Permit (CUP)
(e) Application Review and Action
Applications for conditional use permits shall be reviewed
and acted upon as set forth in Section 18.77.060 (Standard
Staff Review Process).
Also see 18.77.060 Standard Staff Review Process for a
discussion of Director decisions, review by the PTC (upon
request) with final action by the City Council.
Prepare and post to the City’s website information
about typical permit processes and timelines for
potential retailers. Clarify that the CUP is reviewed and
approved administratively by staff.
OR
Rename “Conditional Use Permits (CUP)” to
“Administrative Use Permits (AUP)” to clarify that these
permits are reviewed and approved by the Director.
However, anyone may request that Director decisions
are reviewed by the PTC for a recommendation, with
final action by the City Council.
9
3
2
4
PAMC Topic Existing Regulation Potential Modification
18.40.180 Retail Preservation
Retail
Preservation
Ordinance
Applicability
See 18.40.180 for Retail Preservation Ordinance
requirements
See Attachment C for maps of where ground-floor retail is
required and where the Retail Preservation Ordinance
applies
Consider reducing geographic applicability so that the
ordinance applies more narrowly and to focus retail
requirements in areas where retail is most likely to be
successful. Possible exclusions include:
o Residential zones (e.g., RM-30, RM-40, NV-R3, NV-
R4)
o Office/manufacturing zones (e.g., ROLM ROLM(E),
RP RP(5), GM)
o Geographic locations, such as San Antonio Road
and El Camino Real
AND/OR
Consider reduced replacement requirement of less
than 1:1 square feet to increase site flexibility for
redevelopment projects.
AND/OR
Remove waiver request requirement to provide 10-
year history of the site's occupancy and reasons for
respective tenants vacating the site; this may not be
possible for a new buyer.
Also see options for “retail-like uses” in Definitions
section above.
AND/OR
Eliminate Retail Preservation Ordinance and require
ground-floor retail in specific locations (e.g., -GF, -R, -
NV, in nodes on El Camino Real)
9
3
2
4
PAMC Topic Existing Regulation Potential Modification
18.38 Planned Communities (PC) Districts
Permitted
Uses in
Planned
Communities
(PC)
18.38.030 Permitted uses.
Any use may be permitted in any specific PC district;
provided such use shall be specifically listed as a permitted
use and shall be located and conducted in accord with the
approved development plan and other applicable
regulations adopted pursuant to this chapter to govern each
specific PC district.
18.38.040 Conditional uses.
Any use may be established as a conditional use in any
specific PC district, provided such use shall be specifically
listed as a conditional use subject to the provisions of
Chapter 18.76 (Permits and Approvals), and shall be
located and conducted in accord with the approved
development plan and other applicable regulations adopted
pursuant to this chapter to govern each specific PC district.
To allow more flexibility in PC zones over time,
authorize the Director to allow “similar” uses as
permitted uses,
AND/OR
If the applicable PC is silent on a use allowed in
another commercial district, allow the use to be
conditionally permitted.
Zoning Map
Zoning Map Commercial zoning districts are illustrated in an 18-page
zoning map.
Prepare and post to the City’s website a one-page map
depicting commercial zoning districts, as guide for
where retailers can locate.
AND/OR
In the longer term (i.e., as part of comprehensive
zoning update), simplify zoning districts and overlays
to clarify regulations for retailers, staff, and decision-
makers.
9
3
2
5
Attachment B: Overlapping Use Regulations Applicable to Charleston and Midtown Shopping Centers
This document analyzes four sets of use regulations and size limitations that apply to the Charleston and Midtown
Shopping Centers. The -GF combining district use regulations stipulate that they supersede all other use regulations, so
columns two through four become moot.
Ground-Floor Use Regulations
18.16.040 Table 2
Land Uses
CN Use Regulations
18.16.040 Table 1
and CN Maximum
Size 18.16.060
Table 5
Charleston
Shopping
Center
Midtown
Shopping Center
GF Combining
District (18.30(C))
(Ground-Floor Use
Regulations)Comments
EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Business and Trade Schools X X X CUP
Private Educational Facilities CUP CUP CUP X
Private Clubs, Lodges, or
Fraternal Organizations CUP CUP CUP X
Inconsistent with same
use category under
“Recreation Uses” below
OFFICE USES
Medical Offices
P (<5,000 sq. ft.) -
Charleston
CUP – Midtown
X (except see
below)
CUP (<2,500 sq.
ft. only) X
Professional and General
Business Offices
P (<5,000 sq. ft.)
CUP (>5,000 sq. ft.)X X (except see
below)X
Neighborhood-serving offices
(including medical offices,
professional offices, travel
agencies, and insurance
agencies)
P
P (<2,500 sq.
ft.)
CUP (>2,500
sq. ft.) not to
exceed 7,850
sq. ft
X X
Professional offices, travel
agencies, and insurance
agencies only
P X
CUP not to
exceed 7,850
sq. ft
X
Confusing and
inconsistent across
subsections
9
3
2
5
Ground-Floor Use Regulations
18.16.040 Table 2
Land Uses
CN Use Regulations
18.16.040 Table 1
and CN Maximum
Size 18.16.060
Table 5
Charleston
Shopping
Center
Midtown
Shopping Center
GF Combining
District (18.30(C))
(Ground-Floor Use
Regulations)Comments
RECREATION USES
Commercial Recreation P (<5,000 sq. ft.)
CUP (>5,000 sq. ft.) CUP CUP
P (<5,000 sq. ft.)
CUP (>5,000 sq.
ft.)
Inconsistent permit
thresholds
Outdoor Recreation Services CUP CUP CUP X
Private Clubs, Lodges, or
Fraternal Organizations X CUP CUP X
Inconsistent across
regulations and with same
use category under
“Education, Religious, and
Assembly Uses” above
RETAIL USES
Eating and Drinking Services,
excl. drive-in and take- out
services
P (<5,000 sq. ft.)
CUP (>5,000 sq. ft.)P P P (allows drive-ins
and take-out)
Inconsistent permit
thresholds
Retail Services, excl. liquor stores
P (<15,000 sq. ft.)
CUP (>15,000 sq.
ft.)
CUP (>20,000 sq.
ft.) for grocery stores
P P P Inconsistent permit
thresholds
Liquor stores CUP CUP CUP X
SERVICE USES X
Ambulance Services CUP CUP CUP X
Animal Care, excl. boarding and
kennels P P P X
Automobile Service Stations CUP CUP CUP X
Automobile showroom X X X P GF is most permissive
Convalescent Facilities CUP CUP CUP X
9
3
2
5
Ground-Floor Use Regulations
18.16.040 Table 2
Land Uses
CN Use Regulations
18.16.040 Table 1
and CN Maximum
Size 18.16.060
Table 5
Charleston
Shopping
Center
Midtown
Shopping Center
GF Combining
District (18.30(C))
(Ground-Floor Use
Regulations)Comments
Day Care Centers P P P CUP
Banks and Financial Services CUP CUP CUP X
Retail financial services, except
drive-in services; P P P P
Not explicitly listed in CN,
Charleston or Midtown,
but interpreted by staff as
retail/personal service
General Business Services X X X CUP
GF is most permissive
Also see “Neighborhood
Business Services” below
Hotels X X X P GF is most permissive
Mortuaries CUP CUP CUP X
Neighborhood Business Services P (<3,000 sq. ft.)
CUP (>3,000 sq. ft.)P P X
Inconsistent permit
thresholds (18.04
Definition limits use to
2,500 sq. ft.)
Personal Services P (<3,000 sq. ft.)
CUP (>3,000 sq. ft.)P P P Inconsistent permit
thresholds
Pet Grooming Services X X X P GF is most permissive
Reverse Vending Machines P P P X
Theaters P P P P
Not explicitly listed in CN,
Charleston or Midtown,
but interpreted as by staff
as retail/personal service
Travel agencies P P P P
Not explicitly listed in CN,
Charleston or Midtown,
but interpreted as by staff
as retail/personal service
October 29, 2025 www.paloalto.gov
RETAIL
REVITALIZATION
Planning & Transportation
Commission
2
RETAIL REVITALIZATION BACKGROUND
●City Council Priorities:
○Economic Development and Retail Vibrancy Priority,
including retail zoning strategy.
●Comprehensive Plan:
○Recommend zoning revisions to support small businesses,
parking reductions, active street environments, distinctive
shopping areas, and innovative retail.
3
RETAIL REVITALIZATION BACKGROUND
2023 - 2024:
PTC Retail Ad
Hoc
Committee
(4 Meetings)
2023 - 2024:
PTC
Hearings
(6 Meetings)
Sept 2024:
Council Retail
Ad Hoc
Recommends
Amendments
Nov-Dec 2024:
City Council
Adopts Interim
Ordinance
Streetsense and
Michael Baker
International Reports
Provide Background
Data and Analysis
4
INTERIM ORDINANCE
●Expands permissible uses for ground floor spaces, including:
○Personal services, pet grooming, financial institutions,
automobile showrooms, and other “retail-like” uses.
●Reduces threshold for waivers/adjustments to use regulations.
●Modifies formula retail definition to allow larger enterprises on
California Avenue.
●Sunsets December 31, 2026.
5
MEETING PURPOSE
1.Consider options and recommendations for a retail
revitalization zoning strategy.
2.Provide feedback to staff on preparation of an ordinance to
replace interim ordinance:
a.Refine and make permanent interim regulations.
b.Address other topics identified by City Council, staff, PTC.
c.Consider other amendments based on Streetsense and
Michael Baker International recommendations.
6
KEY ISSUES - RETAIL ZONING REGULATIONS
●Complicated
●Lengthy
●Text-heavy
●Restrictive
Tenants/brokers will
choose to locate in
Menlo Park and
Mountain View,
all else being equal.
7
ISSUE: USE REGULATIONS
Restrictions on uses that could support active streetscapes, reduce
vacancies, and increase revenues, such as:
●Fitness centers
●Medical spas
●Take out/quick serve restaurant
●Pet services
●Auto showrooms
●Formula retail
8
OPTIONS: USE REGULATIONS
●Take out/quick serve restaurant:
○Distinguish from drive-ins and allow in all zones.
●Revise “animal care” definition to distinguish between:
○Daytime uses: grooming, veterinary care, cat cafe
○Overnight uses: boarding, kennels, animal hospitals (noise
impacts)
●Automobile Showrooms:
○Allow in zones that don’t allow dealerships.
9
OPTIONS: USE REGULATIONS
●Fitness centers:
○Eliminate size limitation or increase up to 5,000 sq. ft.
(personal service vs. commercial recreation threshold).
●Medical office and spas:
○Expand medical office definition to include medical spa
since they are also licensed practitioners.
○Allow in retail districts with requirement retail sales at
storefront (e.g., acupuncturists, med spas, wellness).
10
OPTIONS: USE REGULATIONS
●Offices:
○Allow office uses that face side and rear yards (i.e., not on
California Avenue or University Avenue).
●Retail-Like:
○Expand existing “retail service” definition to include
“retail-like” uses to streamline the code and broaden the
range of permitted commercial uses.
11
PERCEPTION OF CONDITIONAL USE PERMIT
Issue:
●In Palo Alto, CUPs are a
Director decision vs. other
cities, where CUPs are
reviewed by a Planning
Commission.
●“CUP” threshold may deter
potential tenants.
Options:
●Clarify typical CUP process and
timelines for potential
retailers on the City’s website.
●Change Conditional Use
Permit (CUP) to
Administrative Use Permit
(AUP) to better reflect
threshold of review.
12
ISSUE: LAYERS OF USE REGULATIONS
Midtown & Charleston Shopping Centers
Three subsections
regulate uses in these
neighborhood shopping
centers!
13
PARKING RESTRICTIONS
Issue:
●Parking regulations may
restrict changes in use
within existing retail
spaces.
Options:
●Modify commercial parking ratios.
●Exempt change of use applications
from parking requirements.
●Increase shared parking reductions.
●Cross-reference AB 2097/Gov. Code
65863.2 to clarify where parking
exemptions apply.
14
RETAIL PRESERVATION ORDINANCE
Issue:
●Applies in all locations
where retail is a
permitted use (even if
retail is unlikely to be
successful in that
location).
Options:
●Limit applicability (e.g., Downtown
only)
●Reduce replacement threshold
●Modify waiver thresholds
●Eliminate Retail Preservation
Ordinance and require ground-floor
retail in specific locations
15
* RPO applies if there are
existing retail/retail-like uses
* Housing Element opportunity
sites are exempted from RPO
16
ZONING MAP
Issue:
●18-page zoning map makes it
difficult to identify where
retailers can locate
Options:
●Publish 1-page commercial
district map on the City’s website
●Streamline commercial districts
and overlays
18
STAKEHOLDER OUTREACH
●Conversations with Palo Alto retailers, potential retailers, a
South Bay broker representing tenants interested in Palo
Alto, and a local Palo Alto developer.
Previous Work Effort:
●2022 - 2023: Interviews with landowners, businesses, the
Chamber of Commerce, and peer cities
●2023 - 2024: PTC and PTC retail ad hoc held over a dozen
study sessions and hearings
19
STAFF RECOMMENDATION & NEXT STEPS
Recommendation:
●Consider options and recommendations for a retail revitalization
strategy and provide feedback to staff on preparation of an
ordinance.
Next Steps:
●Bring PTC an ordinance to consider a recommendation to the City
Council.
Extra Slides
20
21
DISCUSSION TOPICS
1.18.04.030 Definitions
2.18.30(A) Retail Shopping (R) District (California Avenue)
3. 18.30(C) Ground Floor (GF) District (Downtown, Midtown, and Charleston Shopping Centers)
4.Commercial District Use Regulations
5.Midtown & Charleston Shopping Centers
6.18.52.030 Basic Parking Regulations
7. 18.76.010 & 18.77.060 Process and Administration
8.18.40.180 Retail Preservation
9.18.38 Planned Communities (PC) Districts
10.Zoning Map
22
RETAIL SIZES ARE SHRINKING
23
RESTRICTIVE SIZE THRESHOLDS
Issue:
●Palo Alto has many vacancies in the
4,000 - 8,000 sq. ft. range.
Options:
●Not regulating “size of establishment”
or at least increasing thresholds.
●Personal services especially limiting
since most tenants exceed 3,000 sq. ft.
24
AVAILABILITY:
PALO ALTO
37 spaces available
25
AVAILABILITY:
UNIVERSITY AVE
26
AVAILABILITY:
MENLO PARK
13 spaces available
27
AVAILABILITY:
MOUNTAIN VIEW
30 spaces available
Planning & Transportation Commission - October 29, 2025
Commissioners generally supported making permanent the interim ordinance
definitions for Retail Financial Service and Automobile Showroom.
For Formula Retail Business uses, Commissioners expressed some concerns
about effects on California Avenue small boutique character, but generally
supported making permanent the interim ordinance definition.
For Animal Care uses, Commissioners requested additional consideration of
potential odor, waste, and noise impacts, but were supportive of distinguishing
between use types to allow less impactful Animal Care uses in more locations.
For Eating and Drinking Service uses, Commissioners acknowledged that
restaurant “take out services” are standard practice and should be permitted, but
requested additional review of any unintended consequences of removing take-
out restrictions and the potential removal of the “commercial kitchen and
commercial dishwasher” threshold in the current definition.
For Retail-Like Uses, Commissioners provide a range of feedback including a
desire to streamline and simplify retail and retail-like uses, interest in
acknowledging the differences between the uses (e.g. hotels and services vs.
retail sales) and expressed interest in different proposals for how these uses
could be treated in the code.
Commissioners generally supported adding more permitted uses, including office
uses (especially community-serving uses) as long as they do not front on primary
streets; fitness studios up to 5,000 sq. ft.; and daytime animal care uses.
Commissioners generally did not support retail sales requirements at the front
window for service uses.
Commissioners generally supported either removing Waiver and Adjustment
economic hardship allowances or at least making consistent across applicable
zones.
Commissioners supported removing inconsistencies and confusion between
base and overlay district use regulations.
Commissioners generally supported adding more permitted uses in commercial
zones, including take-out eating and drinking services, medical office, daytime
animal care, and automobile showrooms.
Parking Regulations
Commissioners generally did not support exempting change of use applications
from triggering additional parking requirements, nor being more explicit in the
code about the applicability of AB 2097/Gov. Code 65863.2 parking exemptions.
Rather, Commissioners supported updating parking standards and shared
parking allowances, asked about restaurant parking requirements in particular,
and expressed support for alternative modes of travel.
Process and Administration
Commissioners generally supported renaming the Conditional Use Permit (CUP)
to Administrative Use Permit (AUP) to acknowledge that this is typically a staff-
level permit.
Retail Preservation Ordinance (RPO) Applicability
Commissioners expressed some support for excluding residential and
office/manufacturing zones from the RPO, but wanted to understand how many
retail businesses would potentially be affected.
Permitted Uses in Planned Communities (PC)
Commissioners expressed support for more flexibility in the PC zones, but
recommended a more specific criteria for what could be interpreted as “similar
uses” (e.g. neighborhood-serving, indoor vs. outdoor uses).
Zoning Map
Commissioners supported simplified zoning districts and overlays in the longer
term and a simple one-page commercial zoning map to post to the City’s website
in the shorter term.
January 22, 2026 www.paloalto.gov
RETAIL
REVITALIZATION
City Council
Retail Committee
2
RETAIL REVITALIZATION BACKGROUND
2023 - 2024:
PTC Retail Ad
Hoc
Committee
2023 - 2024:
PTC
Hearings
Sept 2024:
Council Retail
Ad Hoc
Recommends
Amendments
Nov-Dec 2024:
City Council
Adopts Interim
Ordinance
Streetsense and Michael
Baker International
Reports Provide
Background Data and
Analysis
Dec 2026:
Interim
Ordinance
Sunsets
3
MEETING PURPOSE
1.Consider key retail zoning issues and review Planning &
Transportation Committee feedback (October 2025).
2.Review summary of draft ordinance contents.
3.Provide feedback to staff on preparation of an ordinance to
replace the interim ordinance.
4
KEY ISSUES - RETAIL ZONING REGULATIONS
●Complicated
●Lengthy
●Text-heavy
●Restrictive
Tenants/brokers may
choose to locate in
other markets,
all else being equal.
5
RECOMMENDATION: EXPAND USE REGULATIONS
PTC supported expanding permitted uses. For example:
●Allow take out/quick serve restaurants in all zones.
●Revise animal care definition to distinguish levels of potential impact.
●Allow automobile showrooms in zones that don’t allow dealerships.
●Allow larger fitness/exercise studios (e.g., up to 5,000 sq. ft.)
●Allow small office uses in the rear of retail spaces (i.e., not fronting
primary streets in the -GF, -R combining districts); prioritize
neighborhood-serving uses.
6
ISSUE: LAYERS OF USE REGULATIONS
Midtown & Charleston Shopping Centers
Three subsections
regulate uses in these
neighborhood shopping
centers!
PTC Support:
●Streamline use
regulations,
eliminate confusion
●Expand allowed uses
7
PARKING RESTRICTIONS
Issue:
●Parking regulations may
prevent changes in use
within existing retail
spaces.
PTC Support:
●Modify commercial parking ratios.
●Remove higher “take-out”
services parking ratio.
●Increase shared parking
reductions.
8
RETAIL PRESERVATION ORDINANCE
Issue:
●Applies in all locations
where retail is a permitted
use (even if retail is unlikely
to be successful in that
location).
PTC Support:
●Potentially limit applicability
(e.g., exempt RM, RP, GM
zones).
9
SUMMARY OF POTENTIAL ORDINANCE
(Based on PTC Feedback)
●Definitions - refine and make permanent interim ordinance definitions
●Commercial District & Overlay Use Regulations - expand permitted uses, increase tenant
size limitations, revise or remove overly subjective findings and waiver processes
●Midtown & Charleston Shopping Centers - provide one set of applicable regulations
●Parking Regulations - streamline parking regulations (e.g., blended rates), expand shared
parking opportunities
● Process and Administration - rename CUP as AUP (will require updates to all zones)
●Retail Preservation - remove applicability to RM/RP/GM zones if supported by analysis
●Planned Communities (PC) Districts - allow more discretion for Director to interpret
additional similar uses
10
STAFF RECOMMENDATION & NEXT STEPS
Recommendation:
●Consider options and recommendations for a retail revitalization strategy.
●Provide feedback to staff on preparation of an ordinance.
Next Steps:
●Bring PTC an ordinance to consider a recommendation to the City Council.
Extra Slides
12
13
RETAIL SIZE FACTORS
Palo Alto has many
vacancies in the 4,000 -
8,000 sq. ft. range.
14
AVAILABILITY:
PALO ALTO
37 spaces available
Note: Symbology colors indicate data
provider only
(October 2025)
15
AVAILABILITY:
UNIVERSITY AVE
Note: Symbology colors indicate data
provider only
(October 2025)
16
AVAILABILITY:
MENLO PARK
13 spaces available
Note: Symbology colors indicate data
provider only
(October 2025)
17
AVAILABILITY:
MOUNTAIN VIEW
30 spaces available
Note: Symbology colors indicate data
provider only
(October 2025)
18
OTHER POTENTIAL ZONING CHANGES
●Parking: Exempt change of use applications from parking requirements if no
additions are proposed. Remove TDM requirement for parking reductions
<10 spaces.
●Parking: Cross-reference AB 2097/Gov. Code 65863.2 to clarify where parking
exemptions apply.
●Alcohol Service: Refine use regulations to allow alcohol service without a full
kitchen (e.g. wine bars)
●Retail Preservation Ordinance: Limit to key retail locations (e.g., Downtown);
apply only to frontage of retail space (i.e., rear area could be replaced by
other uses); and/or revisit citywide regulations to identify locations where
retail should be required.
19
2024 INTERIM ORDINANCE
●Expands permissible uses for ground floor spaces, including:
○Personal services, pet grooming, financial institutions,
automobile showrooms, and other “retail-like” uses.
●Reduces threshold for waivers/adjustments to use regulations.
●Modifies formula retail definition to allow larger enterprises on
California Avenue.
●Sunsets December 31, 2026.
20
ISSUE: USE REGULATIONS
Restrictions on uses that could support active streetscapes, reduce
vacancies, and increase revenues, such as:
●Fitness centers
●Medical spas
●Take out/quick serve restaurant
●Pet services
●Auto showrooms
●Formula retail
21
PERCEPTION OF CONDITIONAL USE PERMIT
Issue:
●“CUP” terminology may deter
potential tenants.
●Although in Palo Alto, CUPs are
a Director decision, in other
cities, CUPs are reviewed by the
Planning Commission.
PTC Support:
●Change Conditional Use
Permit (CUP) to Administrative
Use Permit (AUP) to better
reflect threshold of review
(will require updates to use
regulation tables in all zones).
22
ZONING MAP
Issue:
●18-page zoning map makes it difficult to
identify where retailers can locate
PTC Support:
●Publish 1-page commercial district map
on the City’s website (short-term)
●Streamline commercial districts and
overlays (long-term)
23
* RPO applies if there are
existing retail/retail-like uses
* Housing Element opportunity
sites are exempted from RPO