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HomeMy WebLinkAbout2026-01-22 Retail Committee Summary MinutesRETAIL COMMITTEE SUMMARY MINUTES Page 1 of 16 Special Meeting January 22, 2026 The Retail Committee of the City of Palo Alto met on this date in the Community Meeting Room and by virtual teleconference at 9:01 a.m. Present In-Person: Chair Reckdahl and Councilmember Burt Present Remotely: Councilmember Lythcott-Haims (Just Cause Alternative Teleconference) Absent: None Call to Order Chair Reckdahl called the meeting to order. The clerk called roll. Councilmember Lythcott-Haims invoked the just-cause position of AB 2449 due to not feeling well. Councilmember Lythcott-Haims was at her home and Dan Lythcott-Haims, who was over 18, might occasionally be in the room. Public Comment: 1. Deb G. (Presentation) did a lot of work with business owners on Cal Ave and the condition of retail had been a concern. Deb G. suggested bike racks be put in parallel, a pedestal be removed, sidewalks be free of obstacles and restaurants not obstruct retail and not use more space relative to their store frontage. Agenda Items Assistant to the City Manager Kiely Nose introduced Economic Development Manager and Assistant to the City Manager Alex Andrade. The first 3 items on the agenda were time sensitive as they were in a part of a process and the Committee’s feedback would help inform next steps. Item 4 was an information-only item and could be taken as information for the Committee’s awareness. SUMMARY MINUTES Page 2 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 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 Economic Development Manager Alex Andrade commented that staff might provide a consideration on a future ordinance. Assistant Director of Planning & Development Services Jennifer Armer mentioned that Lexington Planning Jean Eisberg had presented to the PTC. Planning & Transportation Commission Chair Allen Akin was available to respond to questions and share thoughts from the PTC discussion. Lexington Planning Jean Eisberg voiced the work built off analysis done over the last few years. The PTC had looked at data over several meetings. The Retail Committee and Council had adopted an interim ordinance to put into effect some initial zoning changes. The ordinance would sunset in December 2026, so it needed to be made permanent or it would be rescinded. Key zoning issues included redundancy and inconsistency and in some cases it was restrictive in terms of uses and size of uses. The PTC supported expanding different types of uses across different districts and allowing small office, particularly those serving the neighborhood, in the back of a space. Particular to the Midtown and Charleston shopping centers, there were 3 use tables applied, which was confusing to retailers, so the PTC supported streamlining that with 1 set of uses applying to specific districts. A change of use could trigger a higher parking requirement even if it was not physically feasible. Lexington Planning suggested different ways to regulate parking and the PTC supported some of them, including making adjustments to commercial parking ratios and removing the use concept of take-out restaurants, so eliminating that parking requirement. The PTC supported potentially limiting the applicability of the Retail Preservation Ordinance (RPO) to certain locations but wanted to seek additional analysis. Chair Reckdahl asked where the RPO was in GM on the map and if Loma Verde and Middlefield were covered by the RPO. Lexington Planning Eisberg answered that the RPO in GM was in the East Meadow area and along Bayshore but was not reflected on the map, which needed to be corrected. The RPO could apply to a GM district because it did not specifically apply to certain districts. There were a number of wholesale retail uses along the Bayshore area that were GM zoned and the retail uses would need to be replaced generally on a 1:1 basis if a redevelopment project were to go in those locations. Lexington Planning Eisberg needed to ascertain if Loma Verde and Middlefield were covered by the RPO. The PTC’s feedback included revising definitions, which the interim ordinance did; streamlining use regulations across commercial districts; looking at changes to parking and to process administration; and allowing more discretion for the Director to make certain interpretations for similar uses as it related to the Planned Community districts. There was more analysis of the RPO in progress. Lexington Planning Eisberg requested the Retail Committee’s feedback so an ordinance could be prepared for the PTC and full Council to consider. SUMMARY MINUTES Page 3 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Assistant to the City Manager Kiely Nose stated the next step would be staff drafting an ordinance. The Retail Committee’s feedback should address how staff should craft the ordinance, which would be presented to the PTC for review. Councilmember Burt inquired if there had been a discussion related to allowing existing retail to be split into smaller retail. Assistant Director Armer answered that existing retail being split into smaller retail was not prohibited under current regulations. Also being considered in the ordinance was a deep retail space with a small frontage on the primary street allowing the back half to be a different use if there was access from a side street. Planning & Transportation Commission Chair Allen Akin stated, regarding allowing existing retail to be split into smaller retail, a concern was access on the primary frontage, so addressing the possibility of subdividing spaces without access to the primary frontage should take care of that concern. A space divided into 2 spaces could have 1 shared access. Councilmember Burt was concerned that by converting back-end spaces to office that a retailer would have to use shop floor space for necessary office and inventory space. Councilmember Burt asked if an additional door could be added if a space was split into 2. Public Comment: 1. Alex G. from Vittoria Management suggested that the external messaging be improved as it related to language referencing things being terrible, there being a lot of vacancy and the word interim related to negotiating leases. Alex G. hoped to signal a break point from how things used to be to how they currently were and suggested there be a sign in City Hall stating Palo Alto loved retail. 2. John S. with Thoits Brothers felt there was a sense of being in flux, that decisions had not been made and that this was interim and things were being considered. John S. requested that decisions be made, there be implementation and that the code be changed and done with. Retailers were concerned with parking. Restaurant parklets were negatively impacting neighboring retailers. John S. supported splitting retail and using back spaces for office, etc. Chair Reckdahl requested comments related to animal care on Packet Page 15. The first bullet made sense but queried what was envisioned for the requirements as it related to noise and waste. Councilmember Burt expressed that it was important to clarify the difference between grooming, boarding and selling pets. SUMMARY MINUTES Page 4 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Lexington Planning Eisberg replied that the conditions on a Conditional Use Permit (CUP) would be incorporated as objective standards into the code itself. Basically translating the conditions the City already had into standards as it related to noise and odors would address those issues. Chair Reckdahl questioned how such standards would be written, if the current regulation would be more explicit or if there would be new regulations. The first bullet was sensible and needed to be well-written as it related to the second and third bullets. Assistant Director Armer responded that the existing regulations would be examined to determine if they covered noise and waste. Councilmember Burt was inclined to support the second option as it related to the potential modifications. Chair Reckdahl asked what the distinction was between the first and second bullets. Lexington Planning Eisberg explained that the nuance was important as it related to the levels of impacts but it should not always be prescribed in the definition in an ordinance. Chair Reckdahl found the second bullet to be the best option. Councilmember Burt stated performance standards might be needed as it related to noise and queried where the line would be drawn. Lexington Planning Eisberg stated noisier situations should be in a different category than a less impactful use. Lexington Planning Eisberg needed to review the standards the City was currently applying to impactful uses. More conditions might need to be applied to a CUP as it related to waste because it would be very specific and not addressed by the current code. Assistant Director Armer added that work would be done with Animal Control and the permits issued. The process should be simple but it should be made clear there would be a requirement to comply with the noise and odor restrictions in the code, which would allow staff to adjust a business if needed. Chair Reckdahl moved the conversation to retail financial services. Councilmember Burt queried if the current ordinance distinguished well enough between private financial consulting and retail. Planning & Transportation Commission Chair Akin replied that the PTC considered the definition sufficient but consideration was being given to ways to promote neighborhood- serving businesses. Chair Reckdahl felt it could be more explicit as it related to open-to-the-public as opposed to private consulting. SUMMARY MINUTES Page 5 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Councilmember Burt added that closed window treatments did not contribute to the vibrancy of a street. Director of Planning & Development Services Jonathan Lait stated window treatments and limiting the amount of window coverage were addressed with ground-floor overlays in core retail areas. There were no ground-floor overlays on other areas where there might be retail. Councilmember Burt questioned if window coverage was enforced well enough in the core retail areas and if the requirement should be extended to the other areas. Director Lait would follow up on the enforcement and egregious issues would be prioritized. As for extending the window covering requirement to the other areas, staff was trying to create more flexibility so uses could be easily established and it was more challenging with more regulations and controls. Regarding financial services, a link could be made to other provisions. Chair Reckdahl supported there being a link to provisions for financial services provisions. There should not be micromanagement but there should be encouragement for spaces to look and feel like retail. Councilmember Burt added that it was called retail-like and if it was not like retail it was not retail-like. Chair Reckdahl advanced the conversation to automobile showroom and considered it to be a good addition. Councilmember Burt felt an automobile showroom was a good contemporary evolution. Chair Reckdahl progressed the discussion to fast casual restaurants. Takeout should be allowed. Chair Reckdahl asked if full commercial kitchens and dishwashers were stricken from the interim ordinance and if other cities had a requirement for such. Lexington Planning Eisberg responded that the interim ordinance did not strike out full commercial kitchens and dishwashers. The PTC wanted more thought given to intended consequences. Assistant Director Armer answered that many cities had requirements for commercial kitchens and dishwashers for fast casual restaurants when trying to distinguish between a bar and a restaurant. Since Palo Alto did not allow bar uses, it was less important. Chair Reckdahl asked if restaurants having 45 percent food sales and 55 percent alcohol sales would be considered. Assistant Director Armer replied that restaurants with 45 percent food sales and 55 percent alcohol sales were not allowed and considered to be a bar. Restaurant uses required that 50 percent of revenues be from eating and nonalcoholic drinking. SUMMARY MINUTES Page 6 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Councilmember Burt would be surprised if many of the City’s establishments with a bar component had 50 percent revenue from food. Councilmember Burt was concerned that the code contained something the City did not have compliance with and the City might not want to go that far. Councilmember Burt questioned what the food component should be for bars. Assistant Director Armer suggested removing the specific provision requiring 50 percent but still require food service to allow the recognition that alcohol-only bars were not desired. Councilmember Burt spoke of possibly requiring nominal food service, which could promote evening vitality. The code went too far. Maybe there should be circumstances allowing a non- street-facing bar. Assistant to the City Manager Nose stated that staff could investigate the options for bars having nominal food service. Councilmember Lythcott-Haims was surprised to hear that bars were not allowed because Bar Underdog appeared to be a bar with snacks. Councilmember Lythcott-Haims wanted to ensure that everything was acting in concert as there had been discussion about an entertainment zone on California Avenue to yield more vitality. It was strange to allow open containers at certain times but yet not allow bars. The fast casual restaurant item needed work. Chair Reckdahl encouraged staff to relax the requirement. Assistant to the City Manager Nose asked if there should be flexibility on the ratio of food for bar-type services or pure bar-type services. Councilmember Burt was open to pure bar-type services but it would depend on the framing of it. Limiting the number of establishments in a district might be a mechanism to place guardrails. Takeout should be allowed in any zoning district. Chair Reckdahl agreed that takeout should be allowed in any zoning district. Chair Reckdahl moved the conversation to retail-like use and noted that K had been added to the interim ordinance. Councilmember Burt was inclined to have the language for K along the lines of the second bullet. Retail-like should be thought of in terms of look and feel being retail-like. Chair Reckdahl addressed the final bullet and noted there was retail and retail-like and inquired if University Avenue was the only place where retail-like was not allowed. Lexington Planning Eisberg clarified that the retail-like use definition related to the RPO and could replace existing uses. Assistant Director Armer understood that the intention of the definition was to broaden the types of uses that would be allowed in retail zones. SUMMARY MINUTES Page 7 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Chair Reckdahl queried what would change if retail and retail-like were merged. Planning & Transportation Commission Chair Akin stated the PTC discussed merging retail and retail-like at some length. It was identified that there should be different behaviors in certain areas, such as there not being too many hotels along El Camino. As a rule, the PTC was not willing to merge retail and retail-like. If that path was taken, consideration might be given to area-specific requirements being overlayed. Councilmember Burt voiced that if there should be an increase in hotels, consideration should be given to it not being done in the retail nodes unless a hotel included true ground-floor retail. Chair Reckdahl supported the third bullet but not merging them. Chair Reckdahl was open to expanding retail. Councilmember Burt asked if retail-like would be supported in a core retail zone like University Avenue. Assistant Director Armer replied that retail-like was defined in the code but it was not a separate use in the land use tables. Lexington Planning Eisberg added that retail-like being supported in a core retail zone like University Avenue would depend on the retail-like use. Retail-like would only apply in an RPO situation when a retail or retail-like use was being replaced. Councilmember Burt wanted to ensure that certain blocks of very core retail areas and that certain blocks of University be as close to true retail as possible. Lexington Planning Eisberg responded that the GF combining district, which applied to University Avenue and a few other places, would be honed in on. Chair Reckdahl agreed and wanted high pedestrian on University, lower going to Hamilton and Lytton and even less farther out. It would be good to have dental offices near downtown but not on University. Chair Reckdahl advanced the discussion to formula retail and preferred to make the interim ordinance permanent. Councilmember Burt supported making the interim ordinance permanent. Chair Reckdahl progressed the discussion to combining district regulations and requested an overview of the issues. Lexington Planning Eisberg outlined what the interim ordinance allowed and removed. Councilmember Burt asked if the size of fitness should be limited. Having some fitness on a retail street might be okay but proliferation of it would choke off retail and food and beverage. Councilmember Burt asked if fitness up to 5,000 square feet was considered personal service and if over 5,000 was considered commercial recreation. SUMMARY MINUTES Page 8 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Lexington Planning Eisberg answered that under 1,800 square feet was currently permitted by right and over 1,800 square feet required a CUP. Fitness up to 5,000 square feet was classified as personal service and over 5,000 was classified as commercial recreation. Lexington Planning Christine Firstenberg added that fitness was one of the most active categories in retail throughout the Bay Area and the country. Most personal service fitness facilities were typically 5,000 square feet. Limiting fitness to under 5,000 square feet could create more vacancies. An October study revealed that the median size of vacancies in Palo Alto was within 3,000 to 6,000 square feet. Councilmember Burt would be open to fitness if core retail areas were excluded. Chair Reckdahl generally concurred with Councilmember Burt. If there should be too many gyms in the future, it could be addressed then. Chair Reckdahl would rather have too much flexibility as opposed to not enough. It would be good to have a gym off California or University but not on the storefront. Assistant Director Armer asked if a particular street should be used to delineate upper and lower University Avenue. Councilmember Burt did not know which street should be used to delineate upper and lower University Avenue. Planning & Transportation Commission Chair Akin remarked that the PTC had considerable interest in having consistency across a wider range of areas. It was not understood what the effects of SB 79 would be and if it would increase demand for fitness or demand for traditional retail. Chair Reckdahl addressed the second bullet, allowing office uses that face side and rear yards. Office could be accommodated if it was neighborhood-serving office, which was defined in the code. Chair Reckdahl did not support it being general office. Councilmember Burt agreed with Chair Reckdahl in general but did not know if it should apply to downtown. However, regarding SB 79, significantly more housing in the downtown area might warrant walkable services in the area. Councilmember Burt wanted to know what the current retail needs were for back-office space for inventory, etc., and what surplus would not result in a shrinkage of retail floor space. Councilmember Burt suggested taking tours of downtown establishments to see how the spaces were currently being utilized and whether the change would shrink retail. Councilmember Burt was concerned that property owners might rent ground-floor space as more valuable office space to maximize revenue as opposed to facilitating retail. Chair Reckdahl referenced the last bullet, medical offices, and asked if medical offices with 35 square feet of retail were considered retail. SUMMARY MINUTES Page 9 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Assistant Director Armer replied that uses considered to be personal service wanted to come in but bringing in treatments involving a medical professional bumped them into medical office requirements and were not allowed in these areas. Assistant Director Armer asked if there was an interest in allowing some of these types of uses with a certain amount of personal or retail service. Chair Reckdahl asked what type of uses would involve a doctor. Assistant Director Armer replied that med spas and facilities doing body scans would require a medical professional. There was a lot of interest in such services. Councilmember Burt wanted to draw a line between there being a medical professional involved and it being a medical office. The medical professional should be supplementary. Councilmember Burt would be open to it but was inclined to not allow it in core retail areas. Chair Reckdahl concurred with Councilmember Burt and would be more inclined to allow it if it looked and felt like retail. Chair Reckdahl advanced the discussion to the waivers and was hesitant to make waivers easier and would rather revise the regulations and not route folks into waivers. Chair Reckdahl preferred the second bullet. Councilmember Burt agreed with Chair Reckdahl. Chair Reckdahl addressed the GF Combining District and wanted the first bullet with the same caveats noted earlier. Councilmember Burt inquired where the mini shopping center at Loma Verda and Middlefield was addressed and if there were areas not in the RPO but were assumed to be in the RPO. Planning & Transportation Commission Chair Akin stated the PTC had provided feedback to staff related to the mini shopping center at Loma Verda and Middlefield. Director Lait added that the mini shopping center at Loma Verda and Middlefield was governed by a Planned Community Ordinance. If a housing developer was interested in developing the site, it was possible that there might be limits on retail requirements. Staff was investigating what authority the City had in requiring retail. It could potentially supersede a PC. Chair Reckdahl addressed Midtown and Charleston on Packet Page 22. Lexington Planning Eisberg explained the complications related to Midtown and Charleston. It needed to be determined which use regulations would apply to this location. Planning & Transportation Commission Chair Akin expressed that, as a rule, the PTC hoped for 1 base district and 1 overlay. Assistant Director Armer added that consideration should be given to what would be allowed under each overlay and district and choosing the most permissive. SUMMARY MINUTES Page 10 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Chair Reckdahl inquired if Midtown and Charleston would go together into a single zoning. Assistant Director Armer responded there was a table showing many different overlapping regulations that would supersede each other, so it should be simplified to reflect 1 set of rules. Councilmember Burt stated there could be substantive changes but the perception among perspective retailers and brokers might be that things were complicated or interim, so consideration should be given to the language used to frame the issues in more effective ways. It would not be in the code but Councilmember Burt suggested there be a narrative on the improvements made in permit-related streamlining and what was on the horizon, which could maybe be addressed by the Economic Development Manager and the Planning Director. Economic Development Manager Andrade replied that staff was discussing flexible provisions that would hopefully spur more economic development. Perhaps there could be a discussion related to branding and messaging at the retreat on January 24. It was important to share with real estate brokers and the development community how Palo Alto was being more business- friendly. Chair Reckdahl progressed to the parking requirements. Assistant to the City Manager Nose noted that the PTC generally did not support exempting change of use applications from triggering additional parking requirements nor being more explicit on the code about applicability of AB 2097 and Commissioners supported updating parking standards and shared parking allowances and specifically asked about restaurant parking requirements. Chair Reckdahl stated use did not matter downtown because there was only so much parking per square foot and preferred that that be applied to other places so not to change parking whenever use was changed. Planning & Transportation Commission Chair Akin mentioned that the PTC was receptive to the idea that the standards were too high but wanted to raise the issue that it might be area specific. There might be more flexibility in reducing standards on Cal Ave than along El Camino. Assistant Director Armer explained that it could come in with businesses on El Camino Real, for example, and outlined an option that would provide flexibility. Staff tried to provide options to allow new businesses to come in when dealing with an existing building outside the radius of the train stations. Councilmember Burt thought the greater transformation was from goods retail to eating and drinking, which was within the AB 2097 zones so it was not known what would be faced outside those zones. Councilmember Burt was open to some flexibility to the extent it would be applicable outside the zones. SUMMARY MINUTES Page 11 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Chair Reckdahl addressed mixed use parking requirements and queried if this applied to adjacent developments sharing a lot or to mixed-use purposes and how it would be implemented. Lexington Planning Eisberg answered that it applied to 2 or more uses on the same lot. Projects were required to demonstrate parking demand, so there had to be evidence that shared parking would work and that the uses had different times of day. It was currently capped at 30 percent, so the idea was to increase the cap so more than 30 percent of the parking could be shared. Chair Reckdahl remarked that increasing the cap was reasonable. Chair Reckdahl moved to CUPs on Packet Page 24 and thought changing the name was a good idea. Councilmember Burt concurred with renaming the CUPs. Councilmember Lythcott-Haims was concerned that Items 1 through 3 were urgent and needed to be addressed at this meeting and asked how the Committee could be most helpful with the feedback with the number of items and the time remaining. Assistant to the City Manager Nose answered that Attachment B contained the PTC’s feedback on the detail tables and it was suggested that the Committee give a thumbs up or down as to agreeing the PTC’s feedback and/or indicate whether there should be more or fewer restrictions. City Manager Ed Shikada commented that the item would return to Council. Staff wanted to ensure that the feedback provided to the PTC would align with what the PTC was doing and their recommendations. The Committee and colleagues would have an opportunity to go through the topics very specifically when it returned for action. The PTC’s work was focused on the right areas and feedback did not need to be specific. Councilmember Burt expressed that the Retail Committee providing alignment between its recommendations and the PTC would make Council discussion much more productive, so that the Council discussion would not address every minute detail. There was value in flushing it out here. Chair Reckdahl progressed the conversation to the RPO and asked if there should be modifications. Chair Reckdahl saw retail being more area based as opposed to parcel based. The RPO was not a problem as rental rates downtown were 50-percent higher than neighbors, which equated to demand in Palo Alto. Chair Reckdahl did not support repealing the RPO. The 1:1 should be kept at 1:1. Councilmember Burt suggested amending the RPO, not discarding it. SUMMARY MINUTES Page 12 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Chair Reckdahl progressed to planned use and communities and would have no problem with uses changing as long as the look and feel were the same. The zoning map should be simplified as it was not good to have overlays on top of overlays. NO ACTION 2. Recommendation to the City Council on a Resolution Amending the El Camino Real Retail Node Map for Purposes of Palo Alto Municipal Code Section 18.40.180: Retail Preservation. CEQA Status: Addendum to the Comprehensive Plan Environmental Impact Report (EIR), adopted November 17, 2023 (SCH #2014052101) Economic Development Manager Alex Andrade mentioned that 3 specific geographic areas would be presented in relation to this item. Planning & Development Services Assistant Director Jennifer Armer explained why staff wanted to have strategic locations on El Camino Real retaining the full protections of the RPO. The map adopted by Council included the nodes recommended by PTC but also retained the preservation protections basically for the entire area from Page Mill to the southern border. In the interim, PTC recommended a reduction in the complexity where there were overlapping rules, that the RPO ordinance not apply to future housing if 100 housing was developed and that the focus be on areas particularly valuable as retail. PTC’s recommendation focused on 3 nodes – a portion of El Camino Real referred to as the central node, an area referred to as the triangle node and a new bike-to-school node. Public Comment: There were no requests to speak. Planning & Transportation Commission Chair Allen Akin noted that the PTC was looking for the best places to apply an RPO. It was felt that other sites were appropriately zoned or were PCs or not ideal for local retail, which was the general concept behind the elimination of the California Avenue and the NVCAP nodes. The central nodes expanded in some respects and contracted in others. Staff would investigate the interaction between State law of the Housing Element and the node definitions. State law required 100-percent residential development for opportunity sites identified as yielding BMR units. For administrative simplicity, the PTC extended the concept to other sites to which it might not apply and research should be done to determine if that should be revisited. Assistant Director Armer clarified that these nodes were not the only areas where the RPO applied but were the areas with the full 1:1 replacement along with a couple ground-floor and pedestrian overlay areas. Chair Reckdahl asked whether the allowance for 100-percent housing could be applied to only those listed as having a certain amount of low affordability rather than any parcel included on the list. Chair Reckdahl was concerned that the impact to retail could be large even with adding SUMMARY MINUTES Page 13 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 a small number of units. It would not be assumed that the Housing Elements should not require RPOs. Assistant Director Armer answered that the housing allowance could be investigated with the City Attorney’s office. Councilmember Burt shared the concern that adding a small number of units could largely impact retail. Nodes should be created and not eliminated by new development. Councilmember Burt asked how the name was arrived at for the bike-to-school node. Planning & Transportation Commission Chair Akin explained how the name for the bike-to- school node was decided. Councilmember Burt suggested that the name be reconsidered. Planning & Transportation Commission Chair Akin did not object to reconsidering the name. Chair Reckdahl queried if the PTC had discussed mandating ground-floor retail in the area. Planning & Transportation Commission Chair Akin did not recall consideration being given to mandating ground-floor retail as there were many opportunity sites with good development potential. The sites in the Sub-node A area could be good mixed-use opportunities. Councilmember Burt questioned if ground-floor retail in the area could be mandated. Councilmember Burt wanted to replace the bulk of ground-floor retail as high-density housing was enabled. Chair Reckdahl remarked that the options were having a ground-floor overlay or removing the small opportunity sites by having 2 buckets or replacing them with things in the buffer to ensure critical mass of retail. Chair Reckdahl was concerned about losing retail. Planning & Transportation Commission Chair Akin added that the lower lease costs in this area meant certain kinds of retail were viable and even if the floor area was replaced that same kind of retail might not be viable. Councilmember Burt stated there were retail functions on El Camino that could not afford to be elsewhere in the city and occupancy had been high in general. Retail vibrancy was not necessarily measured by high revenue-generating retail that could pay top dollar for space. Chair Reckdahl asked if consideration had been given to trimming down or breaking the central node into 2. Planning & Transportation Commission Chair Akin explained why the PTC decided to consolidate the central node into 1 node. SUMMARY MINUTES Page 14 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Chair Reckdahl liked the concept but questioned if some of the Housing Element sites should be removed as opportunity sites and replaced with something in the buffer. Councilmember Burt stated it was important to align with the SB 79 mandates and asked if some of the sites could be removed as housing opportunity and replaced, in some cases 2 to 1, with housing opportunity sites in the greater downtown areas. Assistant Director Armer mentioned that in the coming year there would be a discussion related to additional housing opportunity sites to avoid no net loss for RHNA compliance, so the recommendation today could address whether El Camino would be the right area for the higher protections. Councilmember Burt considered El Camino to be the right area and would be interested in exploring some of the adjustments later. Chair Reckdahl concurred. Assistant to the City Manager Kiely Nose suggested making a motion so it could be put on consent with the full Council. Councilmember Burt asked how the future adjustment or latitude would be allowed for if a motion was made. Assistant Director Armer understood there was an interest in considering the Housing Element sites and having retail in the area, which would be a factor staff would consider when looking at new Housing Element sites and whether there would be flexibility. The motion should address this being the appropriate node. Chair Reckdahl noted there was a node in the code that included all of El Camino, which would be trimmed down but the rules would not be changed. Councilmember Burt added that trimming it down would not preclude subsequent changes. MOTION: Councilmember Burt moved, seconded by Chair Reckdahl, to recommend the City Council adopt a Resolution (Attachment A) amending the El Camino Real Retail Node Map for the purposes of Palo Alto Municipal Code Section 18.40.180: Retail Preservation unanimously recommended for adoption by the Planning and Transportation Commission. MOTION PASSED: 3-0 3. Development Services Permitting Operations Update Economic Development Manager Alex Andrade voiced that the item was to provide an update on permitting specifically focused on operational, staffing and technology improvements. SUMMARY MINUTES Page 15 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 Planning & Development Services Director Jonathan Lait stated the item was to provide an update on improvements being made to the Development Center and the permitting process. Over the past several years, the focus had been on people, process and technology. More recently, there had been more focus on customer service and engagement with constituents and shifting from a transactional hands-off approach to more of a partnership. Over the last several years, there had been a transition to a fully in-house inspection program and there had been positive feedback. A number of mandatory customer service trainings had been implemented. The interface between customers and staff was currently being investigated to better realize goals. A number of technology improvements had been made, which included the permitting process. The Planning and Development Services and Economic Development Departments were having regular meetings. Customer satisfaction metrics had been gathered and the information would be published after assembling some historical information. Slides were provided showing overall satisfaction ratings. The surveys indicated that 85 percent of folks found service to be good or excellent. Feedback could be provided via QR codes, through feedback cards provided by inspectors and staff and through emails sent out upon issuing a building permit. Chair Reckdahl asked if the 10-percent poor ratings were being addressed. Director Lait responded that the 10-percent poor ratings were being addressed and there were resources dedicated to improvement. Councilmember Lythcott-Haims requested that the 2022 column be removed from the slide related to customer satisfaction percentages as the information was not comparative. Director Lait stated the 2022 column did not contain comparative data but the information was helpful and staff wanted to be transparent but the information could be removed in the future. Councilmember Burt noted that the 2022 information should not be hidden but it did not appear that the data reflected reality. Director Lait stated staff was tracking a number of areas of improvement related to permitting performance and there was opportunity to expand instant permits. Staff would continue to focus on technology improvements and refining staffing models and the touch points with customers. Chair Reckdahl asked what the green and black represented on the slide related to instant permits. Senior Operations Manager Sarah McRee answered that the green highlighted the 3 new instant permits that had been added in the last 3 years. Public Comment: SUMMARY MINUTES Page 16 of 16 Sp. Retail Committee Meeting Summary Minutes: 01/22/2026 1. John S. with Thoits Brothers considered the changes helpful but requested that Council make the permitting topic equal with some of Council’s other priorities. Councilmember Burt queried what the next steps would be. Manager McRee replied that in the upcoming calendar year the focus would be on technology. Staff was in an RFP process for the land use management system and once complete staff would look to investing in customer-facing buildouts. Expanding on instant permits would be a huge investment in terms of staff time. Staff was looking at the project coordinator series to optimize appointments and other interactions throughout the process. Councilmember Burt asked if staff had the resources needed to accomplish the next steps. These processes had several audiences and there needed to be different narratives to communicate with brokers, perspective retailers, residents, etc., and Councilmember Burt suggested using AI for the first drafts. Director Lait replied that staff had the resources to achieve the next steps. NO ACTION 4. Economic Development Activity Report January 2026 ITEM NOT HEARD Adjournment: The meeting was adjourned at 11:31 a.m.