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HomeMy WebLinkAbout2026-03-18 Economic Development Summary MinutesECONOMIC DEVELOPMENT COMMITTEE SUMMARY MINUTES Page 1 of 16 Regular Meeting March 18, 2026 The Retail Committee of the City of Palo Alto met on this date in the Community Meeting Room and by virtual teleconference at 4:16 p.m. Present In-Person: Councilmember Reckdahl (Chair), Councilmember Lu, Vice Mayor Stone Absent: None Call to Order Councilmember Reckdahl called the Economic Development Committee meeting to order, which was formerly known as the Retail Committee. Public Comment Charlie Weidanz from the Palo Alto Chamber of Commerce commented on the challenges businesses faced due to the unhoused population. Economic development was a key strategic priority, and the current situation negatively impacted vibrancy. Safety concerns made it more difficult to attract and retain staff. Incidents of harassment toward customers, as experienced on Saturday morning, were concerning. There were environmental issues arising from people misusing private alleys and doorways, creating physical barriers for both staff and customers. The police were actively addressing these issues. The Chamber and its board requested the creation of a task force that included City staff and the Council to collaborate with the Chamber and the business community to establish a framework for effective measures and policies that foster a thriving business community while showing compassion for the unhoused population. Action Items Alex Andrade, Economic Development Manager, provided an overview of tonight’s agenda. The first 2 agenda items were time-sensitive due to the approval process. 1. Recommendation to the City Council to Adopt an Entertainment Zone Ordinance to Establish an Entertainment Zone on California Avenue SUMMARY MINUTES Page 2 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 Ruth Carias, an Economic Development Specialist in the City Manager's Office, addressed the Committee. California Senate Bill 969, which took effect on January 1, 2025, allowed cities to establish entertainment zones within designated geographic areas to activate public streets, support businesses, attract more visitors, promote economic development, and foster a festive, vibrant atmosphere. This bill required Cities to enact local ordinances defining the entertainment zone's geographic boundaries and operating hours, and to consult with law enforcement. The staff talked to the Palo Alto Police Department (PAPD). The proposed location for the entertainment zone was the car-free section of California Avenue, extending from El Camino Real to Birch Street. Implementation would follow a phased approach, starting with the car-free segment of California Avenue. Over the next 6 to 12 months, staff would assess the California Avenue Entertainment Zone and explore other potential locations for establishing additional entertainment zones. The World Cup and other major events in the region were approaching in the coming months. Management Specialist Nanci Hochroth mentioned that the proposed process and regulations were developed after multiple meetings with staff and the California Avenue merchants, with guidance from Charlie Weidanz of the Palo Alto Chamber of Commerce, and consultation with the Acting Police Chief. The proposal was in alignment with the requirements of SB 969. The entertainment zone would be implemented through the City’s special event permit process. This existing process was successful and could be modified slightly if needed. Entertainment zone activities would be allowed during the specified timeframe in the special event permit application. The proposed operating hours for the entertainment zone were from noon to 10 p.m. on Mondays through Saturdays, and from 10 a.m. to 10 p.m. on Sundays. SB 969 permitted merchants to sell alcohol in accordance with their ABC licenses, and patrons were allowed to carry alcoholic beverages within the entertainment zone. Under SB 969, each participating business was responsible for checking identification to verify that individuals were of legal drinking age and all participants must wear wristbands of the same color. Alcoholic beverages had to be served in approved non-glass, non-metal containers as specified in the special event permit. Economic Development Specialist Carias outlined the next steps. If supported by the Economic Development Committee, the ordinance would move forward to the City Council for consideration, with the first reading scheduled for April 6 and the second reading on April 20. In the meantime, City staff was preparing a webinar to inform California Avenue merchants about the requirements for the entertainment zone. Staff recommended that the Economic Development Committee recommend to the City Council that it adopt an entertainment zone ordinance and establish an entertainment zone on California Avenue. Councilmember Lu inquired whether staff had other ideas for the entertainment zone, besides 3rdThursday festivals, farmers markets, and a World Cup event. Councilmember Lu encouraged prioritization of community-focused events. Councilmember Lu asked whether approval of special event applications would be discretionary or granted by right, and whether any community group could apply or if it was limited to businesses on the block. Councilmember Lu expressed concern regarding the complicated special event permit process, questioning the SUMMARY MINUTES Page 3 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 associated costs and the amount of staff time dedicated to reviewing each event, as he was worried about cost recovery. Councilmember Lu assumed that the reason for not expanding the entertainment zone further was the concern that the City would approve any special event permit applications that met the requirements, which might lead to excessive or rowdy special events. Councilmember Lu expressed support for expanding the entertainment zone and requested an explanation for the staff's cautious approach. Councilmember Lu suggested that if staff wanted to conduct a pilot program, they could gather insights from the closed sections of California Avenue and Ramona Street. Management Specialist Hochroth explained that the entertainment zone complemented the Council-authorized activation activities and served as a tool for merchants to attract more visitors. Out and About (previously known as 3rdThursday) would be a near-term activation. Plans for additional events in 2026 include potential World Cup watch parties. Individual merchants, a group of merchants, or the Chamber could apply for a special event permit. The applicant must notify neighboring merchants of the event. The language of the proposed ordinance indicated that events should support local businesses. Therefore, products sold during events should come from businesses within the entertainment zone with no outside food or drink; however, staff could reevaluate this policy based on successful operations in San Francisco and San Jose, where they allow a mix of items sold by the event sponsor and adjoining businesses. The Council had directed staff to focus on executing these plans effectively. Staff conducted outreach to gather input from local businesses, with the intention of doing the same for each zone. This process required time from the Economic Development staff and staff from other City departments. A pilot period would help assess what was needed from other City departments, allowing Economic Development staff to determine the necessary coordination. Economic Development Specialist Carias explained that the PAPD initiated the special event permit process. The permit requirements included layout plans, safety measures, insurance, a description of the event, letters of notice to surrounding businesses, and the completion of a noise exemption permit application. A City team would review the special event permit application to ensure that all applicable City departments were in agreement with the event. Economic Development Specialist Carias mentioned that the special event permit fee varied based on the number of attendees; for example, events with fewer than 200 attendees would incur a fee of $230. In Economic Development Specialist Carias's experience with permit applications for California Avenue, the staff ensured that each City department addressed the specific aspects relevant to them. Assistant Police Chief James Reifschneider stated that the level of staff attention and time to process permit applications varied significantly based on the specific event. Permit applications were considered on an individual basis and assessed on their merit. Many were straightforward and involved smaller crowds without safety concerns, making the review process simple. However, evening events expected to attract hundreds of attendees, particularly those serving alcohol in open areas and blocking traffic or affecting nearby businesses, would require more consideration. Generally, a special event permit was not very time-consuming for the PAPD. SUMMARY MINUTES Page 4 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 During this pilot activation period, Assistant Police Chief Reifschneider anticipated that there would likely not be an overwhelming number of special event permit applications. This pilot program would enable assessment of the impact of the permit process on staff time. Economic Development Manager Alex Andrade mentioned that the staff wanted 6 to 12 months to assess and evaluate what was working and what was not on the closed portion of Cal Ave. While some businesses outside that area might be interested in an entertainment zone, the staff recommended proceeding with the car-free portion for public health and safety, to prevent situations in which individuals might walk out of a business with an open container and cross a street with moving traffic. City Manager Ed Shikada acknowledged that the proposed area was a good starting point. Car- free California Avenue was an ideal location to try this ordinance and gain experience with operational requirements for containers and similar wristbands. The review process for special events would take into account the provision of alcoholic beverages, porta-potties, safety measures, parking, and trash. Special event permits were not by right; however, the City intended to support special events. Vice Mayor Stone was comfortable with limiting the pilot program to the closed portion of Cal Ave. Vice Mayor Stone had hoped that activation would become a regular feature of Cal Ave rather than being restricted to a special event permit, a process which he considered overly burdensome for staff and local businesses. Vice Mayor Stone emphasized the need for a regularly scheduled entertainment zone on Cal Ave for activation of the street, where people could enjoy a beverage and stroll, reserving special event permits for events expected to draw large crowds. Vice Mayor Stone noted the lack of well-activated entertainment zones around the Bay presented an opportunity for Palo Alto to lead and make Cal Ave a vibrant and special destination. Vice Mayor Stone suggested allowing business owners to apply for special event permits to host ongoing events on designated days for 1 year or other specified timeframe, and the City could revoke the permit if the business owner violated the policies. Vice Mayor Stone believed that ongoing permits would facilitate a more permanent activation of the street, enhancing the vibrancy on select nights and attracting visitors, thus making the area newsworthy. Vice Mayor Stone was concerned that many business owners could interpret the language of the ordinance as being for one-time events, so he felt it was essential for the Committee or the Council to provide clear direction to staff to ensure that business owners understood that they had the option to hold regularly scheduled events. Management Specialist Hochroth explained that the proposed ordinance aligned with the specifications outlined in the legislation. Because the legislation initially envisioned individual events and ABC expressed concerns about allowing alcohol in the public right-of-way, the legislation specified that a special event permit was required. Management Specialist Hochroth found Vice Mayor Stone’s idea very exciting for a special event permit in collaboration with merchants to allow, for example, activation every Friday night under certain circumstances. The pilot program would serve as a learning opportunity for staff to understand what holding ongoing events entailed and the demands it would place on the PAPD, trash collection, and other resources. Merchants needed to meet the insurance requirements. Currently, San SUMMARY MINUTES Page 5 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 Francisco and San Jose do not have ongoing events. Discussions among Cities have indicated that ongoing events could be a possibility in the future. The approval of the proposed ordinance would enable Vice Mayor Stone’s suggestion. Staff aimed to coordinate with merchants on what they envisioned. Assistant City Attorney Tim Shimizu stated that Vice Mayor Stone's proposal for ongoing events was legally feasible. One important consideration for any event was determining who was responsible. For instance, if a restaurant applied for a special event permit to sponsor ongoing events, the City could decide how to respond to that request. If the entertainment zone is always open without a permit, such as in Las Vegas, the City is responsible for managing that area by default. In San Francisco, permittees took responsibility for ongoing events, such as the neighborhood block business association or a similar organization that collectively spread out the cost of insurance among their members. Coordination among Cal Ave businesses could facilitate events. City Manager Shikada expressed uncertainty about whether the City's current special event permits were designed for ongoing events. City Manager Shikada heard there were concerns regarding how the California Department of Alcoholic Beverage Control (ABC) would respond, and local merchants were apprehensive about potential negative consequences. City Manager Shikada recommended that staff take the Committee's feedback into account, do some follow- up to ensure there were no unanticipated obstacles in implementation, and seek the Council's authorization if needed. Councilmember Reckdahl expressed his desire to see this initiative grow over time. The staff packet mentioned that organizers must submit detailed safety plans, provide clear signage, and implement identification measures. Therefore, Councilmember Reckdahl questioned the extent of the work required to organize an event, the amount of paperwork needed for the application, and the cost of insurance. Councilmember Reckdahl sought clarification on the definition of participating businesses and whether businesses would have the option to opt out of participation. Councilmember Reckdahl inquired about the frequency of special events held in San Jose and San Francisco. Councilmember Reckdahl asked how Country Sun’s off-sale license would work with the proposed ordinance. Councilmember Reckdahl wanted to know who would provide the required wristbands, the event organizer or the City. Management Specialist Hochroth stated that the special event permit process was doable. There were templates available for merchants or the Chamber of Commerce to create the required signage at all entry and exit points to clearly indicate that people could not take alcohol outside of the entertainment zone. For the safety plans, there had been many activations on Cal Ave and learnings from those experiences. Management Specialist Hochroth mentioned that general liability insurance typically covered up to $1M, and the cost of an insurance policy for a single event was not astronomical. Management Specialist Hochroth explained that the legislation required the permit holder to notify all other businesses in the zone about their planned event, allowing those businesses the option to participate. San Jose mostly had one-time events, such as for March Madness, gymnastics, or San Pedro Square may SUMMARY MINUTES Page 6 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 host a watch party during the week of FIFA. Country Sun's ABC license permitted the sale of alcohol for consumption off-premises. SB 969 allowed individuals to carry their drinks within the designated entertainment zone. The most streamlined approach was for all participating businesses to agree upon a wristband color. Assistant Police Chief Reifschneider noted that the special event process was generally not burdensome. Depending on the type of event, the size of the expected crowd, and planned activities, the PAPD considered whether the applicant would have their own security and whether that security would be armed. Staff did not include a request for additional PAPD funding to support this proposed ordinance, nor was there a presumption to charge the permit holder a fee for police presence at events. The PAPD would collaborate with applicants to develop a safety plan without necessitating dedicated police resources for the event. The small footprint of the entertainment zone was beneficial because it allowed for a pilot of this proposal. If many large-scale event applications arise that require dedicated police support, staff may need to consider how that would be funded. Assistant Police Chief Reifschneider believed the current special permit application was 1 or 2 pages. Economic Development Specialist Carias added that special events required a certificate of insurance but businesses already had insurance as part of their ABC permits. The recording did not capture Charlie Weidanz's comment regarding the cost of an insurance policy for a one-night event. Assistant City Attorney Shimizu clarified that only on-sale licensees were eligible to participate in the entertainment zone, as state law currently prohibited off-sale licensees from doing so. Item 1 Public Comment: J.C. spoke on behalf of a business located on Cal Ave. J.C. inquired about insurance and whether the City would assist with refuse and cleaning services for properties on Cal Ave. J.C. mentioned that he cleaned on Mondays but expressed concern about being unable to manage additional ongoing cleanup efforts. J.C. asked who would be responsible for property damages. While J.C. generally supported the idea of an entertainment district, he was worried about the potential insurance liabilities that may arise and how the City could provide assistance so that business owners were not left fully responsible. Councilmember Lu inquired whether the applicant for the special event permit was responsible for cleaning the street. Councilmember Lu preferred to be proactive and trust staff to try a few events on Cal Ave and Ramona Street. If staff was not ready to allow any events on Ramona within the next 6 months, Councilmember Lu recommended communicating to the Ramona business community that the ordinance included Ramona and events could take place 3 or 4 months after Cal Ave had a couple of pilot events, for example. Councilmember Lu suggested that staff report the results of 4 or 5 pilot events at a future Committee meeting but the Acting Police Chief did not need to attend. Councilmember Lu advised staff to deny subsequent applications if there were too many special event permits for the week of FIFA. Councilmember Lu did not have a strong opinion on whether to extend the entertainment zone boundary SUMMARY MINUTES Page 7 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 beyond the car-free area; however, he recalled that there were some ABC issues related to crossing the street. Councilmember Lu noted that the farmers' market extended beyond the pedestrianized portion, so he questioned whether the proposed ordinance would restrict the farmers' market from having an entertainment zone. City Manager Shikada responded that cleanup was an important issue to address when issuing a permit and ensuring that subsequent permits were not granted if problems arose. City Manager Shikada stated that staff had work to do to incorporate the Committee’s direction to include Ramona, and he expressed uncertainty about whether staff would be ready to present the ordinance for full Council approval as a consent calendar item on April 6. Management Specialist Hochroth advised ensuring that the staff follows up on the topics raised in tonight’s discussion, including having a conversation with the Ramona merchants. Economic Development Manager Andrade was concerned about the strain on staff resources if the City proceeded with an entertainment zone on Cal Ave and Ramona and merchants from both business districts wanted to host a FIFA event. Economic Development Manager Andrade mentioned that he spoke to a couple of Ramona merchants who would likely be very interested; however, the staff needed to determine the scale of events. Economic Development Manager Andrade noted that if the Economic Development Committee unanimously voted in favor of a motion to approve an ordinance this evening, the plan was to include the ordinance as a consent calendar item on April 6. Economic Development Manager Andrade reminded everyone that we were operating under an open container resolution that would expire on May 31. To avoid a gap in time, staff was working under a schedule to ensure the entertainment zone was ready for events occurring after May 31. Economic Development Manager Andrade made note of the interest in extending the boundary of the entertainment zone beyond the car-free portion of California Avenue. Item 1 Public Comment: Elizabeth Wong suggested that the merchants on Ramona Street be informed, counted, and engaged in discussions to determine how they would like to approach special events on Ramona Street. Management Specialist Hochroth appreciated the idea of expanding the entertainment zone beyond the car-free area; however, staff would need to investigate how to address the responsibilities of the merchants, as expansion would likely lead to increased costs for merchants. The most common solution was to close the street for events. The legislation had 2 dates for report-outs each year. The legislation mandated that the ordinance specify the location of the entertainment zone. Assistant City Attorney Shimizu stated that participating businesses must be located within the entertainment zone. If desired, staff could change the location of the entertainment zone to include the footprint of the farmers' market that extended beyond the regularly closed section of Cal Ave. SUMMARY MINUTES Page 8 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 MOTION: Councilmember Lu moved, seconded by Vice Mayor Stone, to recommend the City Council adopt an ordinance adding Chapter 9.05 to the Palo Alto Municipal Code to establish and regulate an entertainment zone pursuant to Senate Bill 969 to allow for the sale of certain alcoholic beverages by licensed establishments for consumption outside in the public right-of- way on the car-free portion of California Avenue subject to a special event permit, including Ramona Street, and direct staff to implement the following changes: 1. Allow for ongoing activation of the entertainment zone by allowing for ongoing permits from business owners. 2. Provide staff the flexibility to expand the entertainment zone to the closed portion of Ramona Street after outreach to Ramona Street merchants. 3. Modify the special event permit if necessary to effectuate this direction. MOTION PASSED: 3-0 2. Update on Car-Free California Avenue Outdoor Activation Program and Slow Bicycle Lanes Economic Development Manager Alex Andrade stated that the City Council approved the permanent closure of a portion of California Avenue just over a year ago. The Car-Free California Avenue Outdoor Activation Program and Slow Bicycle Lanes had been an ongoing project. Since the first meeting that Economic Development Manager Andrade attended on December 16, staff met with local merchants at least once a month during the time he has been with the City. Bruce Fukuji, Assistant to the City Manager, delivered a presentation. In 2023, there was a request to create a two-way, slow bike lane in the center of the car-free area. In February 2025, the City Council held a study session to discuss bike speeds, how to manage conflicts between cyclists and pedestrians, as well as parallel routes such as Cambridge Avenue. The City Council had a study session in June 2025 to review plans for activating California Avenue, to consider Cambridge Avenue as an alternative, and the use of signage and other measures to reduce speeds. The Council directed staff to establish standards for parklets that would support year- round outdoor dining, utilize the Architectural Review Board (ARB) for design recommendations and the review process, explore edge materials in addition to planters, and allow outdoor seating equal to or close to the existing square footage. An ARB ad hoc committee, comprised of Marton Jojarth and Mousam Adcock, has been meeting twice a month since September. Staff regularly met with local merchants to discuss design standards for parklets and ideas for outdoor activation. The goal of outdoor activation was to support local businesses by permitting commercial use of the public right-of-way (sidewalks and the roadway) for dining, retail, and entertainment in a safe, accessible, equitable, and well-designed manner. The ARB ad hoc committee considered parklet design requirements, precedents for parklets throughout the Bay Area, constraints and issues related SUMMARY MINUTES Page 9 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 to the design of California Avenue, accommodating year-round weather conditions, and how to design preapproved parklet plans for merchants to use. The ARB ad hoc committee's findings were presented to the merchants to gather their feedback. The recommendations from staff and the ARB ad hoc committee included offering a variety of investment options, permits for parklets, and developing preapproved parklet plans. A key challenge with parklets on California Avenue was the presence of a gas main running along the southern side of the street, located 29 feet from the storefronts. As a result, a 2-foot setback from the gas main was proposed, along with measures to mitigate impacts on laterals. Some areas of California Avenue had sidewalks that were 22 feet wide, leaving approximately 5 or 6 feet available for parklets. One option was to have parklets with cantilevered roofs that extended over the sidewalk. Pergolas and cabanas were considered for the preapproved parklets. A cabana featured a roof, beams, and posts similar to those found in Eichler homes but with an overhang that gave it a more residential appearance. Pergolas had a more modern design, characterized by flat roofs and streamlined structures. To address weather conditions, options such as roll-down shades on 3 sides of the parklet and glass windows for wind protection were suggested. The car-free portion of the street would eventually be resurfaced to remove traffic markings. The permitted activation area for outdoor dining would primarily be in front of each business; however, encroachments in front of other businesses would be allowed with a letter of consent. The activation area could extend up to 34 feet from the building's facade to the center of the street. Assistant to the City Manager Fukuji displayed the permitted activation area and an illustrative potential layout for a preapproved parklet, café seating, and ADA accessibility. In 2024, the area was measured for outdoor dining and was measured again in 2025 to include seating. In 2024, there were 20 businesses but the number decreased to 19 in 2025 after Local Kitchens closed. There were currently 20 active restaurants, with an additional 2 coming soon (Croissanté and California Cafe by PerformanceGaines). The street had a total capacity of up to 35,000 square feet of potential activation space. Hotel California and 414 Cal Ave could provide an additional 4,700 square feet of dining. Staff met with the Pedestrian and Bicycle Advisory Committee (PABAC), which was very supportive of the proposed strategy. Staff conducted research with the National Association of City Transportation Officials (NACTO) to learn how to create shared environments for bicycles and pedestrians. In collaboration with Fehr & Peers, they examined Canadian examples to understand their experiences in closing streets for summer events and outdoor dining. The recommendation was to establish a 22-foot-wide accessway to accommodate emergency vehicles, which would allow 8 feet for pedestrians and 14 feet for bicycles (10 feet for two-way slow bike lanes in addition to 2-foot buffers on each side). California's emergency vehicle access was 20 feet but a width of 26 feet was necessary if there were mid-rise or high-rise developments. The entrances on Birch and El Camino would change travel directions to help slow down traffic. Assistant to the City Manager Fukuji presented illustrative plans for the west and east sides. The farmers' market could have between 77 and 83 stalls, with a design goal of 80 stalls. Next steps included ARB review on April 16, recommendations from the Economic Development Ad Hoc Committee to the City Council on May 20, and consideration by the City Council on June 8. SUMMARY MINUTES Page 10 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 Economic Development Manager Andrade clarified that this agenda item was for the Committee to receive the staff report and provide input. Councilmember Lu referred to Slide 7 and inquired about the gaps between parklets. Councilmember Lu requested clarification on the definition of encroachments as mentioned in Slide 8. On Slide 5, there was a note stating that parklets were limited to 350 square feet, with a maximum of 2 per business, and Councilmember Lu wondered how this would apply to Zareen’s. Assistant to the City Manager Fukuji mentioned that no structures could be built over the gas main; however, café seating and dining areas were permitted. The slide showed planters between the bike lanes and the dining area while ensuring adequate width for ADA access between the parklet and seating in the roadway. The parklet was approximately 6 feet from the curb and extended about 6 feet into the roadway, level with the sidewalk. Café seating consisting of chairs, tables, umbrellas, and planters could occupy the roadway above the gas main. If outdoor dining extended beyond the frontage of a business, a letter of consent from the tenant and building owner was required to occupy that space as part of the annual encroachment permit. Zareen’s had one of the largest frontages, measuring about 66 feet, and part of its property included the space between 2 buildings, giving Zareen’s additional area for use; however, widening the accessway would reduce some of Zareen’s available space and Zareen’s encroachment opportunities were limited. Due to setbacks from the storm drain and the required separation between parklets, Zareen’s could have one 350-square-foot parklet and a second parklet less than 350 square feet. Staff was considering a 6-foot separation between parklets. One recommendation was to eliminate tents. Zareen’s currently has a tent over the gas line. Item 2 Public Comment: 1. Elizabeth Wong praised the staff for proposing a requirement that approval from neighbors was necessary before encroaching on the space in front of their business. Elizabeth Wong noted that the City was currently not enforcing this on Ramona Avenue. Elizabeth Wong was suing the City and Coupa Café for placing tables and chairs in front of her building and she urged the City Council and all who were listening to support her. 2. Michael Ekwall from La Bodeguita on California Avenue commented via Zoom that he was an advocate for reopening the street. Over the past couple of years, Michael Ekwall had discussed with the City Manager the lack of urgency and execution regarding wayfinding. For example, the orange construction signs on El Camino and the turn lane from Menlo Park that used to turn onto California Avenue had cones and signs. Michael Ekwall believed there could be a more thoughtful approach to indicate that California Avenue was closed to vehicular traffic and that drivers should use Sherman or Cambridge instead. Michael Ekwall feared that the City Council might not be willing to allocate the necessary funds to create the space the City envisioned, which was an issue he raised since the City decided to close the street a few years ago. Michael Ekwall SUMMARY MINUTES Page 11 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 noted issues when children rode their bikes to school, the cycle club, and Tour de Palo Alto, observing that very few people walked their bikes despite signs directing them to do so, which was a serious issue that was worse with e-bikes. Vice Mayor Stone thought the designs looked good and the proposed street layout mostly looked good. Vice Mayor Stone liked the idea of a preapproved parklet program and the flexibility of design modifications for individual parklets. Vice Mayor Stone wondered about the timeline for implementing the parklets if the Council approved the plan. Vice Mayor Stone raised concerns about how the removal of existing design elements and making permanent changes to the closed portion of California Avenue would impact the parklets that were in place. Vice Mayor Stone was particularly worried that a merchant might invest tens of thousands of dollars into a beautiful parklet, only for the City to tell them to remove it a year later for the transformation of the street into a pedestrian boulevard. Vice Mayor Stone felt that Cal Ave should be a pedestrian boulevard; however, a 14-foot bike lane and only 8 feet for pedestrians made it feel more like a bike boulevard. Vice Mayor Stone expressed frustration at witnessing bicycles speeding down Cal Ave. Vice Mayor Stone doubted that people would follow the recommendation for a slow bike lane and instead would continue to speed through. Vice Mayor Stone was concerned about the safety risks of having to constantly look both ways on a pedestrian boulevard in an entertainment zone, especially with the incorporation of alcohol, which he viewed as a potential disaster waiting to happen. Vice Mayor Stone suggested redirecting bikes to Cambridge. Assistant to the City Manager Fukuji stated that the parklet plan required an ordinance and a resolution. Implementation should start soon after a transition period. Staff needed to set a date for the new cycle of encroachment permits. The goal was for businesses to make their investments during the summer and fall so that everything was in place for next winter. Assistant to the City Manager Fukuji mentioned that staff was working on cost estimates for pedestrian and bike improvements, which were not funded as a capital improvement project (CIP). Exploring those costs would help determine the timeline for advancing that initiative. The street needed some preparation, including removing traffic markings and demarcating emergency egress, and perhaps markings to designate spaces for parklets and outdoor activation. Assistant to the City Manager Fukuji thought it would be helpful to complete this preparation as soon as possible to support locating outdoor dining. Removing bicycles from Cal Ave would emphasize it as a pedestrian environment. Outdoor dining could continue whether or not bikes were present. When staff spoke with the PABAC, the Committee noted that adding bike lanes on Cal Ave would make it a more attractive area for cycling, so you had to do something equivalent on Cambridge because it was not a direct route. Another issue to address was more bikes crossing El Camino Real. Cal Ave was a through route to the eastern part of the city, Caltrain, and Stanford Research Park. As a result, speed management was essential. One way to enhance safety and make pedestrians feel more secure was to separate pedestrian pathways from bike lanes. Assistant to the City Manager Fukuji believed that even without bike lanes on Cal Ave, cyclists would still use this direct route, leading to more complex enforcement issues. Studies from Canada showed that when you have SUMMARY MINUTES Page 12 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 a shared, closed street, cyclists maneuvered around pedestrians, resulting in a few incidents, mostly a result of teenagers biking recklessly. The consultant had suggested that staff consider strategies to slow down cyclists on Cal Ave, anything that made bikes change direction, such as a bike roundabout at the intersection of Ash. Before making a final decision, Assistant to the City Manager Fukuji noted that some experiments may be necessary to test various strategies and observe how people adapt their behavior. City Manager Ed Shikada explained that the work was progressing concurrently. Engineers were working on the necessary striping. Ideally, similar to what was done on Emerson, the staff would coordinate the timing of the striping and the slurry seal (or something similar) to ensure alignment of the street work with the plans presented in the slide, along with careful coordination with the timing of when individual restaurant owners would have their plans ready for implementation. Councilmember Lu asked what the merchants’ feedback and concerns had been. Councilmember Lu inquired whether there were any discussions regarding the use of electricity or gas heating for parklets and if the City would establish rules about this. Aside from the removal of tents, Councilmember Lu was interested in understanding the impact on existing outdoor dining setups. Councilmember Lu commented that the Country Sun parklet was beautiful and artistic. Councilmember Lu emphasized that the City should encourage custom- designed parklets. When staff presents this item to the Council, Councilmember Lu would like to see qualitative feedback on the decision to allow encroachments on neighboring properties without explicit consent on University Avenue. Councilmember Lu inquired about the specificity of the illustrative plan, especially concerning funding and the exact widths of the bike and pedestrian areas. Councilmember Lu expressed support for allowing people to gently and slowly ride their bike to park it on Cal Ave or slowly ride through, noting that reckless teenagers and e-bikers would ride through the area regardless. Having observed that the street was largely empty except for several peak hours each day, Councilmember Lu felt that restricting bikes on an otherwise vacant street would not be beneficial to businesses or pedestrians. Councilmember Lu requested a future discussion on the bike lane implementation. Councilmember Lu noted that a slide presented an example of a bike lane separated by planters. Without thoughtful design, Councilmember Lu thought it would be confusing to distinguish between the bike lane and pedestrian lane, unless there were bike icons approximately every 3 feet. Councilmember Lu was concerned that without clear visual cues, it would be difficult for pedestrians to know where they needed to exercise additional caution. Councilmember Lu believed additional discussion was necessary regarding the cost of painting and implementing the bike and pedestrian lanes. Councilmember Lu hoped to receive input from the ARB because if the project could not be executed well, then the City might need to reconsider it. Councilmember Lu referenced successful examples of similar streets in Europe. Councilmember Lu planned to visit Canada this summer. Councilmember Lu had watched YouTube videos from Montreal showcasing a Dutch-style street that functioned effectively without bike lane striping, allowing bikes to proceed slowly without defined lanes. Councilmember Lu expressed his disapproval of the idea of replacing a beautiful artistic mural SUMMARY MINUTES Page 13 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 with Cal Ave in a white millennial font. Councilmember Lu preferred to maintain the beautiful flower artwork rather than striping it over with Cal Ave without any other visual indicators of that design language. Assistant to the City Manager Fukuji reported that merchants expressed support for a range of investment options, a Council action to allow parklets on the street, interest in preapproved parklets to streamline the process, options for year-round dining, and raised the issue of speeding bikes. One point raised was that if a merchant was paying for the use of the space, they wanted to ensure the best possible customer experience. Some businesses were concerned about losing patrons if their indoor capacity was full and customers had to wait outside in cold weather. The City policy encouraged the use of electricity to promote sustainability and reduce greenhouse gas emissions. The City was considering requiring electrical service for lighting and radiant heating for preapproved parklets. Merchants may continue using existing gas or propane heaters as long as they meet the permit requirements. The purpose of the illustrative plans was for an urban design proposal, not a detailed CAD design. Assistant to the City Manager Fukuji shared the following issues raised by the ARB. Unused heaters cluttered the streets. Therefore, staff may request that heaters not in use be kept off the street to keep the area as open as possible. Pop-up tents may be used only during events. The intent was for parklets to replace pop-up tents. Parklets should not use residential fencing or other residential items for commercial purposes; instead, there should be commercial-grade investments in the street. Assistant to the City Manager Fukuji mentioned seeing 3 metal shed structures; if merchants wished to continue using them, they must comply with all requirements for custom-designed parklets. Kiely Nose emphasized that the staff would make every effort to collaborate with each business individually, ensuring that they respect each business's existing operations and setups. City Manager Shikada noted that the proposed colored bike lanes in the design concept would create a visual impact and give the impression of a bike boulevard. City Manager Shikada stressed the importance of feedback from the Committee and the Council on any concerns or preferences related to the bike lanes. Referring to Slide 11, Councilmember Reckdahl wanted a pedestrian-bike path that allowed slow bikes. Councilmember Reckdahl noted that when he biked on the Stevens Creek Trail, bicyclists had to monitor their speed and navigate around pedestrians. Councilmember Reckdahl pointed out that during 3rdThursday events, there was only 9 feet of space between Palo Alto Sol and Joanie's Cafe, and he wanted to know how staff would address this. Councilmember Reckdahl suggested removing the traffic divider if possible, as he felt it was unnecessary on a car-free street and made the area appear more like a closed street rather than a pedestrian-friendly plaza. Councilmember Reckdahl asked what other methods could slow down bike traffic besides roundabouts. Councilmember Reckdahl raised concerns that the barriers separating bike lanes from pedestrian areas posed tripping hazards. Councilmember SUMMARY MINUTES Page 14 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 Reckdahl agreed with providing options for preapproved and custom parklets. The City wanted to encourage investment in Cal Ave. Therefore, if individuals were willing to invest, Councilmember Reckdahl wanted them to have as much flexibility as possible. Councilmember Reckdahl asked whether the 350 square feet mentioned on Slide 5 applied to preapproved parklets or to all parklets. Councilmember Reckdahl inquired if a gas shutoff valve could shut off gas in the event of a leak. In reply to Councilmember Reckdahl's query, staff confirmed that bicycles would be banned from the entertainment zone during special event hours. Assistant to the City Manager Fukuji explained that fire department vehicles coming from Ash Street and turning onto California Avenue toward El Camino needed sufficient space to accommodate their turning radius. Due to the gas main on the same side as Joanie's Cafe, any structure would need to be set back by 2 feet. The parklets for Palo Alto Sol and Sun of Wolf would be positioned within the intersection but not extend beyond it. The distance between Palo Alto Sol and Joanie's Cafe was nearly 44 feet. The new ordinance would prohibit Joanie's metal roof structure because it extended 8 feet from the centerline of the street. Assistant to the City Manager Fukuji stated that there were no plans to remove the landscaped median with a concrete curb that was in the street. If the City approved a mid-rise or high-rise development, the accessway would need to increase to 26 feet for emergency vehicle access. Due to emergency access and the farmers' market, Assistant to the City Manager Fukuji noted that staff did not believe it was advisable to follow Fehr & Peers' recommendation to install planters to slow bike speeds. Splitting bike lanes at pedestrian crossings was another strategy to reduce bike speeds because of the change in direction; however, pedestrians would need to look both ways. Assistant to the City Manager Fukuji clarified that the barriers between the bike lanes and the pedestrian area would not create tripping hazards. The maximum size for any parklet was 350 square feet, as exceeding this limit would require fire sprinklers. To create the illusion of more space, businesses could propose a custom parklet with something over the sidewalk that was not attached to the sidewalk. City Manager Shikada mentioned that the foundation under the pavement of the existing concrete island would presumably need to be removed and replaced, which would be costly and eliminate the landscaping in that area. City Manager Shikada noted that electrification was the only solution to prevent leaks from existing gas mains or laterals and the associated safety risks. Kiely Nose emphasized that the process for removing the island required a thoughtful design effort to maximize its use and the visual aesthetic you want to achieve, which would involve spending money on a major CIP. Vice Mayor Stone noted that the pedestrian boulevards he visited in Europe lacked designated bike lanes, yet they still functioned well. Vice Mayor Stone expressed his willingness to SUMMARY MINUTES Page 15 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 compromise on the absence of a dedicated bike lane on Cal Ave, provided that the City encouraged slow biking. Councilmember Lu agreed with Vice Mayor Stone’s comments. Councilmember Reckdahl urged that the City emphasize slow biking. NO ACTION 3. Business Retention, Expansion, and Attraction (BRE/A) Strategy Staff wanted an opportunity to discuss Item 4 tonight. Therefore, although it was an important topic, Economic Development Manager Alex Andrade suggested postponing Item 3 until May because there was not enough time to address it. ITEM NOT HEARD 4. Designation of City Council Liaisons with Local Business Stakeholders and the March 2026 Economic Development Activity Report Economic Development Manager Alex Andrade indicated that Committee Members and City Council Members had shown interest in attending business district stakeholder meetings organized by the staff. To keep these meetings informal, only 1 Committee Member may participate at a time. City Council Members who were not part of the Economic Development Committee could observe the business stakeholder meetings without participating. The Economic Development Committee liaison groups were the Palo Alto Chamber of Commerce, University Avenue/Downtown, California Avenue, El Camino Real, Midtown, and Hotels. Since Councilmember Lu lived near Cal Ave, Councilmember Reckdahl wanted to know if there were any legal constraints that would prevent Councilmember Lu from interacting with those retailers. Councilmember Lu mentioned that he had consulted with Attorneys Caio Arellano and Molly Stump, who informed him that it was acceptable for him to participate in today's discussions regarding California Avenue because he lived approximately 1,000 feet away, which was well outside the relevant radius. Cal Ave's economic development efforts would not change Councilmember Lu's condominium's character by substantially altering traffic levels, intensity of use, parking, views, privacy, noise levels, or market value. Councilmember Lu shared Attorney Arellano's response: I think it is reasonable to conclude that Cal Ave economic development efforts would not affect either of those 2 factors, given that Cal Ave's longtime status as the City's second downtown and various efforts over the years to encourage business activity, walkability, etc. Councilmember Lu understood that while he could generally engage with SUMMARY MINUTES Page 16 of 16 (Rg.) Economic Development Committee Meeting Summary Minutes: 03/18/2026 matters related to Cal Ave, there may be specific projects that he would need to refrain from participating in. Assistant City Attorney Tim Shimizu will follow up on the issue raised by Councilmember Lu; however, limited outreach was appropriate in the meantime. City Council Liaisons with Local Business Stakeholders: Vice Mayor Stone: Midtown and El Camino Real. Councilmember Lu: Cal Ave and Hotels. Councilmember Reckdahl: Palo Alto Chamber of Commerce and University Avenue/Downtown. Councilmember Reckdahl offered to swap liaison assignments in the future if any Committee Members wanted to do so. Item 4 Public Comment: None NO ACTION Adjournment: The meeting was adjourned at 6:48 p.m.