HomeMy WebLinkAbout2026-06-03 Economic Development Committee Agenda PacketECONOMIC DEVELOPMENT COMMITTEE
Special Meeting
Wednesday, June 03, 2026
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5:30 PM
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1 Regular Meeting June 03, 2026
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ACTION ITEMS
1.Recommendation to the City Council on an Ordinance to Amend Various Sections of Title
16 (Building Regulations) and Title 18 (Zoning) of the Palo Alto Municipal Code to
Implement Retail Vitality Policies in the Comprehensive Plan, including changes to the
Zoning Map for parcels zoned CN(GF). CEQA Status: The Ordinance is Consistent with and
Represents Implementation of Adopted Policies in the Comprehensive Plan, for Which an
Environmental Impact Report (Comprehensive Plan EIR) was Certified on February 5,
2016.
2.Recommendation to the City Council on an Ordinance to Amend Palo Alto Municipal
Code Title 18 (Zoning) Section 18.18.120 (Noncomplying Uses and Facilities) to Allow
Existing Floor Area to be Replaced in New Buildings Without Increasing the Degree of
Existing Non-Compliance. CEQA Status: Exempt from CEQA per Section 15061(b)(3)
(Common Sense). Late Packet Report Added
3.Economic Development Activity Report June 2026
FUTURE MEETINGS AND AGENDAS
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ADJOURNMENT
2 Regular Meeting June 03, 2026
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3 Regular Meeting June 03, 2026
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public inspection at www.paloalto.gov/agendas.
California Government Code §84308, commonly referred to as the "Levine Act," prohibits an
elected official of a local government agency from participating in a proceeding involving a
license, permit, or other entitlement for use if the official received a campaign contribution
exceeding $500 from a party or participant, including their agents, to the proceeding within the
last 12 months. A “license, permit, or other entitlement for use” includes most land use and
planning approvals and the approval of contracts that are not subject to lowest responsible bid
procedures and have a value over $50,000. A “party” is a person who files an application for, or
is the subject of, a proceeding involving a license, permit, or other entitlement for use. A
“participant” is a person who actively supports or opposes a particular decision in a proceeding
involving a license, permit, or other entitlement for use, and has a financial interest in the
decision. The Levine Act incorporates the definition of “financial interest” in the Political Reform
Act, which encompasses interests in business entities, real property, sources of income, sources
of gifts, and personal finances that may be affected by the Council’s actions. If you qualify as a
“party” or “participant” to a proceeding, and you have made a campaign contribution to a
Council Member exceeding $500 made within the last 12 months, you must disclose the
campaign contribution before making your comments.
4 Regular Meeting June 03, 2026
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for
public inspection at www.paloalto.gov/agendas.
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Economic Development Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: June 3, 2026
Report #: 2605-6403
TITLE
Recommendation to the City Council on an Ordinance to Amend Various Sections of Title 16
(Building Regulations) and Title 18 (Zoning) of the Palo Alto Municipal Code to Implement Retail
Vitality Policies in the Comprehensive Plan, including changes to the Zoning Map for parcels
zoned CN(GF). CEQA Status: The Ordinance is Consistent with and Represents Implementation
of Adopted Policies in the Comprehensive Plan, for Which an Environmental Impact Report
(Comprehensive Plan EIR) was Certified on February 5, 2016.
RECOMMENDATION
Staff recommends that the Economic Development Committee recommend the City Council
adopt an ordinance to amend various sections of Titles 16 and 18 of the Palo Alto Municipal
Code (PAMC) (Attachment A) to implement retail vitality measures related to Comprehensive
Plan policies and the City Council's 2025 Enhance Business Vibrancy Priority. A unanimous
decision from the Committee would result in the ordinance being placed on the City Council
consent calendar for adoption.
EXECUTIVE SUMMARY
The draft ordinance in Attachment A builds on retail conditions and strategies considered in
2023 and 2024, and an interim retail ordinance adopted in December 2024. Approval of this
updated ordinance is intended to:
Codify interim ordinance provisions;
Address other topics raised by the City Council in November 2024 while considering the
interim ordinance (such as expanding retail-like and office uses, and considering
amendments to the retail preservation ordinance);
Allow a broader range of retail and other commercial uses;
Reduce confusion from overlapping/conflicting regulations;
Rename the Conditional Use Permit to Administrative Use Permit to better reflect the
current permit process;
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Add standard conditions for specific uses and remove overly subjective findings;
Streamline parking requirements and permit approvals;
Reduce ground-floor vacancies; and
Encourage vibrancy in the City’s commercial areas; including Downtown and California
Avenue.
Amendments to the zoning code are shown as underlined/strikeout in Attachment A.
Annotations in the margin guide the reader to the rationale behind substantive changes. The
analysis section summarizes key topics addressed in the draft ordinance.
This item was originally on the May 18, 2026 City Council agenda, but was not heard during the
meeting due to time constraints and was continued to a date uncertain. If the Committee
makes a unanimous recommendation on the ordinance, this item will be placed on the consent
calendar at the June 15, 2026 City Council meeting for first reading.
BACKGROUND
The current ordinance is the culmination of multiple sequential efforts.
Previous Work Effort
In 2023 and 2024, the City engaged commercial retail consultants to analyze the retail market
and develop a retail zoning strategy. 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 retail environment. This work effort culminated
in a retail revitalization study in May 2024 and series of zoning amendment options in August
2024.
On September 18, 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;
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
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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.
These amendments were adopted on November 18, 2024 (first reading) and December 16,
2024 (second reading),3 and will remain effective until December 31, 2026, or upon adoption of
a replacement ordinance.
Current Work Effort
This current work effort aims to replace the interim ordinance with codified amendments and
support the 2026 Council priority to Enhance Business Vibrancy. The ordinance also aims to
address topics discussed by the City Council during consideration of the interim ordinance in
November 2024 and identified by staff based on 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);
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;
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.
3 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
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This ordinance is still a focused effort to address major issues and commonly occurring uses.
Additional amendments may be warranted in the longer term through the comprehensive
zoning code update.
PTC & Council Retail Committee Review
Consider allowing bars (without food), but with limitations or conditions, and an
entertainment zone on California Avenue.
Enforce transparency and other design standards to ensure that all ground-floor uses
are activated, including medical offices or personal services uses.
Add ground-floor flexibility by allowing offices in certain locations if they are
neighborhood-serving.
Consider more blended parking rates.
Avoid merging of retail and retail-like use categories.
Limit changes to the Retail Preservation regulations to potential exemptions for
multifamily residential and office/manufacturing zones.
The PTC was generally supportive of the draft regulations including expanded uses, such
as bars; and permit streamlining, such as allowing certain uses by right and replacing
subjective findings with objective regulations and standard conditions.
The PTC discussed at length the ways that medical office, including hybrid
medical/retail/personal service uses, could be regulated on University and California
Avenues. The PTC ultimately deferred to the City Council to make this determination,
asking the Council to clarify which types of medical office uses are appropriate on these
key retail corridors. See Analysis section below for further details.
The PTC suggested modifications that could be addressed by the staff in the revision of
the ordinance prepared for the City Council, herein, regarding topics such as parking,
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fees, PC zones, and retail preservation regulations. These comments, staff responses,
and changes to the draft ordinance in response to these comments are summarized in
Attachment F.
ANALYSIS
The draft ordinance, including amendments to the zoning code shown as underlined/strikeout
is provided as Attachment A. A summary of the draft ordinance is provided in Attachment B.
The discussion below analyzes the key themes addressed in the ordinance.
Eating and Drinking Services
The draft ordinance modifies how eating and drinking uses are regulated to reflect
contemporary uses, expand potential revenue sources, and streamline review and approvals.
Currently, the Zoning Ordinance includes one explicit eating and drinking classification. In
practice, staff interpret food service uses with limited seating (e.g., ice cream shop) as
“intensive retail service.” Because this is not an intuitive use classification for potential retailers,
it results in confusion and uncertainty. However, this use classification allows for a lower and
more appropriate parking ratio compared to the eating and drinking service classification that
regulates restaurants with seating and full kitchens. Additionally, the current Zoning Ordinance
does not contemplate stand-alone bars—such uses must include food service that generates at
least 50% of its sales.
The draft ordinance creates three use classifications to reflect the different levels of potential
impact of each use and a parking standard that better aligns supply and demand. Table 1
summarizes the three definitions. To address potential noise and other impacts associated with
the new bar use classification (or other uses with alcohol sales or service), the draft ordinance
expands operational conditional regulations and requires a CUP to regulate hours and other
site-specific conditions.
Table 1: Proposed Eating and Drinking Use Classifications
Use
Classification Description Examples Locations
Eating and
drinking, full
service
Refine existing definition to capture
restaurants with table service and
seating.
Sit-down
restaurant
All
commercial
districts
Eating and
drinking,
limited service
Create new definition to capture quick
service food that's ready to eat within 15
minutes. Currently, such uses are
interpreted as “intensive retail service”
which is not an intuitive use classification
for potential retailers.
Deli, coffee
shop, ice
cream shop,
fast casual
salads
All
commercial
districts
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Bars Create new definition to capture bars
with no or limited food service
Wine bar,
cocktail bar,
beer garden
CD(C), CC,
CC(2), CS, -R,
-GF, NV-MXH
The draft ordinance also removes “take out” as a separate use classification acknowledging that
most eating and drinking uses include take out.
Medical Offices and Medical-Related Personal and Retail Services
Currently, Palo Alto’s zoning ordinance allows medical office in most commercial zones, but
prohibits it in the most desirable retail areas on California and University Avenues, as shown in
Table 2.
Table 2: Ground-Floor Medical Office Permitted Uses, by District (Current Zoning Regulations)
Zoning District/Location <5,000 sq. ft.5,000+ sq. ft.
Midtown CUP*XCNElsewherePCUP
-R Combining District
(California Ave.)X XCC, CC(2)
Elsewhere P CUP
-GF Combining District
(University Ave.)X XCD(C), CD(N), CD(S)
Elsewhere P X
CS P CUP
NV-MXL, NV-MXM, NV-MXH P X
Legend: P = Permitted; CUP = Conditional Use Permit; X = Not Permitted
* Midtown has conflicting regulations. While the CN regulations allow medical office with a CUP up to
2,500 sq. ft., the applicable -GF regulations prohibit medical office uses in Midtown.
As the health and wellness industry expands regionally and nation-wide, there has been an
increase in hybrid uses, such as medical spas, botox providers, body scans, and IV lounges, that
do not fit neatly into the City’s definition for medical office5 or personal services.6 However,
5 PAMC 18.04.030(95): “Medical office” means a use providing consultation, diagnosis, therapeutic, preventive, or
corrective personal treatment services by doctors, dentists, medical and dental laboratories, and similar
practitioners of medical and healing arts for humans, licensed for such practice by the state of California. Incidental
medical and/or dental research within the office is considered part of the office use, where it supports the on-site
patient services...
6 PAMC 18.04.030(114) “Personal service” means a use providing services of a personal convenience nature, and
cleaning, repair or sales incidental thereto, including:
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(D) Quick printing and copying services where printing or copying for the particular service is done on site, so
long as no quick printing or copying for any off-site printing or copying service is done on the same site;
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generally, most of these uses are likely to fall under the category of “medical office” if they
require a license by the State.
Table 3: Options for Regulating Medical Office Uses, Benefits and Drawbacks
Potential
Regulation Benefit Drawback In Draft Ordinance?
Streamlines review and
approval
May lead to less
desirable uses that
could detract from
retail vibrancy
Provides opportunity to
apply specific
conditions (e.g., design,
hours)
Adds time for
tenants and staff
resources
Creates more clarity in
the code
May quickly become
out of date as new
uses and
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Potential
Regulation Benefit Drawback In Draft Ordinance?
unanticipated uses
arise
Establish quotas.Prevents one use from
overtaking a location
Requires staff
resources to track
Creates uncertainty
for retailers
No
Regulate design.Ensures that tenant
space looks like retail
(e.g., require customer-
facing counter or retail
facing street; waiting
areas and treatment
areas in rear)
May require
monitoring/code
enforcement
Yes
Require retail
sales component.
Creates visual interest
and revenue
generation
Attracts potential walk-
in customers
May generate token
retail uses
May require
monitoring/code
enforcement
Yes, when fronting
University and
California Avenues
Require personal
services
component.
Allows flexibility to
expand medical office
to more hybrid use
types (e.g., body scans)
May lead to less
desirable uses that
could detract from
retail vibrancy
No
Expanding Permitted Uses
The draft ordinance expands permitted and conditionally permitted uses across commercial
districts to reduce vacancies, improve retail vitality, and increase revenue generation.
Specifically, this includes the following changes to the draft ordinance:
Neighborhood-Serving Offices. Allow neighborhood-serving offices9 in Downtown and the
California Avenue areas, but only fronting side streets or in the rear of retail spaces. Offices
would not be permitted within the first 40 to 50 feet of the building frontage on California and
University Avenues, respectively. Allowing non-retail uses in the rear of buildings and on side
9 PAMC 18.14.040(e) "Neighborhood-serving offices" are medical offices, professional offices, travel agencies, and
insurance agencies that fit the definition of a neighborhood-serving use.
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and parallel streets adds flexibility in the broader commercial districts and could help reduce
vacancies in larger tenant spaces, older buildings, and historic buildings. The public comment in
Attachment E highlights how historic buildings Downtown with unique architectural features
that provide identity to Palo Alto are not always conducive to 100% ground-floor retail. At the
same time, this provision aims to narrow office prohibitions to focus on California and
University Avenues only where retail and retail-like uses are preferred.
Similar impacts on the neighborhood such as traffic generation, deliveries, noise, and
lighting as listed uses; and
Similar characteristics such as building type, site arrangement, floor area, number of
employees, indoor and/or outdoor uses, customer traffic, equipment use, hours of
operation, parking, vehicle trips and signage as listed uses.
Streamline Use Regulations (Example: Midtown and Charleston Shopping Centers)
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As shown in Attachment C, in the Charleston and Midtown Shopping Centers, potential tenants
must review four separate code sections (CN district use 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 results in extensive and inconsistent regulations, creating
confusion and frustration for applicants, staff, community members and decision-makers.
Administrative Use Permits (AUP) vs. Conditional Use Permits (CUP)
Retail Preservation Ordinance
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a. There are at least two sites where retail preservation regulations would need to
be enforced in the event of a redevelopment project. In order to develop
multifamily housing, a project would need to trigger an exemption from retail
preservation regulations. Exempting multifamily districts would support Housing
Element policies and programs to reduce constraints to housing development for
existing and future projects.
b. Notably, a project proposed under State Density Bonus Law could request a
waiver from ground-floor retail requirements related to the retail preservation
ordinance. A project proposed under the City’s housing incentive program would
not have that option.
2. Office/manufacturing zones (except within the San Antonio Road Area Plan area): ROLM
ROLM(E), RP RP(5), and GM.
a. There are at least 21 sites with office/manufacturing designations where retail
preservation regulations would need to be enforced in the event of a
redevelopment project. Parcels located within the San Antonio Road Area Plan,
an ongoing project by the City to guide redevelopment in a 275.3-acre portion of
Palo Alto adjacent to the Mountain View border, would be excluded from this
exemption. This exclusion allows the City to complete the San Antonio Road Area
Plan process before deciding how to apply retail preservation in the GM zone.
Transportation and Parking
The draft ordinance proposes to streamline transportation demand management (TDM)
requirements and streamline parking regulations in light of changes in State law and concerns
from some retailers that they cannot meet parking requirements when proposing a change of
use to a classification with a higher parking standard.
California Avenue Parking Assessment District: The existing zoning ordinance identifies a
blended rate of 1 space per 250 sq. ft. for sites in the Downtown University Avenue Parking
Assessment District. The draft ordinance proposes the same blended rate for California Avenue
Parking Assessment District, which would acknowledge that:
City parking ratios are generally unenforceable for most uses on California Avenue
because of the applicability of AB 2097 (Gov. Code Section 65863.2);
Visitors to California Avenue likely park once and walk between uses whether parking on
the street or within garages; and
Existing buildings and tenant spaces typically do not provide on-site parking and cannot
physically provide additional parking in the event of a change of use application that
triggers additional parking spaces.
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Eating and Drinking Services’ Parking Ratios: The draft ordinance modifies parking ratios for
existing and new proposed new eating and drinking services definitions to acknowledge that
full service restaurants generate higher parking requirements than limited service
establishments, which have greater turnover.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
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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.
That the perception of a Conditional Use Permit as a hurdle is a legitimate concern. An
Administrative Use Permit is perceived as a more manageable permit to obtain.
Terms like “revitalization” and “interim ordinance” create uncertainty and the sense
that conditions are in flux; consider better messaging about proposed changes and
liaisons that support retail, such as a retail ambassador.
Retail needs are getting smaller and the deep retail space, especially Downtown, can
benefit from more flexible use allowances.
ENVIRONMENTAL REVIEW
NEXT STEPS
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ATTACHMENTS
Attachment A: 2026 Retail Vitality Ordinance (Annotated)
Attachment B: Summary of Draft Ordinance
Attachment C: Midtown & Charleston Shopping Centers Overlapping Use Regulations
Attachment D: Retail Preservation and Businesses in Residential Multi-family, Office, and
Industrial Zones
Attachment E: Public Comment
Attachment F: March 25, 2026 PTC Comments on the Draft Ordinance and Staff Responses
APPROVED BY:
Jonathan Lait, Planning and Development Services Director
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*NOT YET APPROVED*
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Various Chapters of
Title 18 (Zoning) and Chapter 16.59 (Citywide Transportation Impact Fee of the
Palo Alto Municipal Code, and the Zoning Map, to Implement Retail Vitality
Measures
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A.Like many communities, the City of Palo Alto has experienced high vacancy rates in retail
districts, which have been compounded by challenges associated with the COVID-19
pandemic as well as ongoing retail trends. Accordingly, the City Council has included retail
revitalization as a Council priority for the past several years.
B.Throughout 2023 and 2024, City staff, the Planning and Transportation Commission (PTC),
and the City’s consultant Michael Baker International (MBI) worked together to develop a
Retail Study Report intended to inform a citywide retail zoning strategy.
C.On September 18, 2024, the City Council Retail Committee reviewed the Final Draft Retail
Study Report and provided direction to staff on several zoning amendments should be
implemented immediately to support retail and retail-like uses in the City.
D.The PTC held six hearings on the Retail Study (in addition to four meetings of the PTC retail
ad hoc committee).
E.In December 16, 2024, the City Council adopted interim ordinance no. 5642, temporarily
implementing some of the recommendations of the Retail Study, while directing further
work by staff and the PTC on a permanent ordinance.
F.On October 29, 2025, the PTC reviewed additional analysis and recommendations prepared
by staff and the City’s consultant Lexington Planning.
G.On March 25, 2026, the PTC reviewed issues and options to encourage ground-floor retail,
provided comments, and recommended that the City Council adopt an ordinance.
H.The City Council now desires to adopt a retail revitalization to replace interim ordinance no.
5642.
SECTION 2. All references in the Palo Alto Municipal Code to “Conditional Use Permit” shall be
amended to read “Administrative Use Permit.” All references in the Palo Alto Municipal Code to
“CUP” shall be amended to read “AUP.” All references in the Palo Alto Municipal Code to
“conditionally permitted” shall be amended to read “administratively permitted.”
SECTION 3. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) of the
Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions struck-
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through; text omitted but unchanged noted by bracketed ellipses; unannotated text indicates prior,
temporary amendments that would expire if not restated herein):
18.04.030 Definitions
(a) Throughout this title the following words and phrases shall have the meanings ascribed in this
section.
(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.
(12) “Animal care, daytime” means a use providing care and services during the daytime only,
including grooming, socializing, housing, veterinary services, and animal hospitals that do not
provide overnight care.
(12.1) “Animal care, overnight” means a use providing care and services that includes overnight
or short-term boarding, such as kennels and animal hospitals with overnight care.
[. . .]
(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.
[. . .]
(47)“Eating and drinking service” means uses primarily engaged in serving prepared food and/or
beverages for consumption on or off the premises. Related definitions are provided in
subsections (45) (Drive-in/drive- through service).
(47) (A) “Eating and drinking service, full 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 This use typically includes presence of a full commercial kitchen, and
commercial dishwasher, and table service. 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, and (125)(B) (Intensive retail service) and (136) (Take-out service).
(B) “Eating and drinking, limited service” means a use where food and beverages are ready
to consume within approximately 15 minutes of the time of sale whether on the premises,
taken out, or delivered. Typically, limited seating area and no commercial kitchen are
provided. Examples may include delis, bakeries, frozen dessert shops, pizza shops, counter
service restaurants, and coffee shops. For establishments with incidental sale alcoholic
beverages, a minimum of 50% of revenues must be derived from the sale of food.
(C) “Bars” mean establishments devoted to serving alcoholic beverages and for which the
serving of food is incidental to the consumption of such beverages, with less than 50% of
revenues derived from the sale of food.
Split definition to distinguish between less
impactful daytime uses vs. overnight uses
which may require additional conditions
due to noise or other impacts.
Make interim ordinance regulation permanent.
Create three categories of eating and drinking services, which generate different parking
requirements: full service restaurants with table service and seating, food service with limited seating
(replaces "intensive retail service" below), and a new classification to allow bars.
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[. . .]
(56) “Financial service” means a use providing financial services to individuals, firms, or other
entities. The term “financial service” includes banks, savings and loan institutions, loan and
lending institutions, credit unions and similar services.
(A)“Retail finance service” means a 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.
[. . .]
(57.6) “Formula retail business” means a retail, personal, or eating and drinking service that is
one of fifty (50) or more business locations in the State of California 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 identifies and distinguishes the source of a service
from one party from those of others.
[. . .]
(102.6) "Neighborhood-serving offices" are medical offices, professional offices, travel agencies,
and insurance agencies that fit the definition of a neighborhood-serving use.
Make interim ordinance regulations permanent.
Relocate definitions from Section 18.16.030
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(102.7) A "Neighborhood Serving Use" is not a separate use classification, but describes the
class of uses that primarily serve individual consumers and households, not businesses, are
generally pedestrian oriented in design, and do not generate noise, fumes or truck traffic greater
than that typically expected for uses with a local customer base. A neighborhood-serving use is
also one to which a significant number of customers and clients travel, rather than the provider
of the goods or services traveling off-site.
[. . .]
(125) “Retail service” means a use open to the public during typical business hours and
predominantly engaged in providing retail sale, rental, service, processing, or repair of items
primarily intended for consumer or household use.
(A)“Extensive retail service,” as used with respect to parking requirements, means a retail
sales use having more than seventy-five percent of the gross floor area used for display,
sales, and related storage of bulky commodities, including household furniture and
appliances, lumber and building materials, carpeting and floor covering, air conditioning
and heating equipment, and similar goods, which uses have demonstrably low parking
demand generation per square foot of gross floor area.
(B)“Intensive retail service” as used with respect to parking requirements, means any retail
service use not defined as extensive retail service, such as boutiques, bookstores, and
small goods retail shops. and including limited food service (i.e. ‘ready-to-eat’ food
and/or beverage shops without a full commercial kitchen, where food and/or beverages
are ready to consume at the time of sale and any seating area is limited; examples include
sandwiches, frozen desserts, non-alcoholic beverages, and baked items).
(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, but distinct from, 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, as defined in subsection (12.6);
(I)Day care centers, as defined in subsection (42);
(J)Retail financial services, as defined in subsection (56)(A); and
(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 substantially to a high level of pedestrian activity, and meet the
intent of the 18.30(B).040 (Pedestrian Shopping) design standards.
Not all retail-like uses are permitted in zoning districts that allow retail-like uses. Refer to use
tables within each zoning district for specific permitted retail-like uses.
Replaced by "eating and drinking,
limited service" new use classification
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[. . .]
(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).
[. . .]
SECTION 4. Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby
amended by changing the zoning of the properties identified in Exhibit A by removing the Ground
Floor (GF) combining district.
SECTION 5. Sections 18.16.030 (Definitions), 18.16.040 (Land Uses), 18.16.050 (Office Use
Restrictions), and 18.16.060 (Development Standards) of Chapter 18.16 (Neighborhood,
Community, and Service Commercial (CN, CC and CS) Districts) of Title 18 (Zoning) of the Palo Alto
Municipal Code are hereby amended as follows (additions underlined; deletions struck-through;
text omitted but unchanged noted by bracketed ellipses):
18.16.030 Definitions
[. . .]
(e)"Neighborhood-serving offices" are medical offices, professional offices, travel agencies, and insurance
agencies that fit the definition of a neighborhood-serving use.
(f) A "Neighborhood Serving Use" is a use that primarily serves individual consumers and households, not
businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic
greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also
one to which a significant number of customers and clients travel, rather than the provider of the goods or
services traveling off-site.
[. . .]
18.16.040 Land Uses
The uses of land allowed by this chapter in each commercial zoning district are identified in the
following tables. Land uses that are not listed on the tables are not allowed, except where
otherwise noted. Where the last column on the following tables (“Subject to Regulations in”)
includes a section number, specific regulations in the referenced section also apply to the use;
however, provisions in other sections may apply as well. For properties with combining district
zoning designations, refer to combining district use regulations for additional or superseding
requirements.
Acknowledge that most restaurants offer takeout;
remove definition and classification from use tables.
Removing this overlay from Midtown and Charleston will remove the
confusion over the three different use tables that apply to these areas.
See Section 18.16 for how uses are proposed to be regulated.
Relocated to Section 18.04.030 (Definitions) so
that this term is generally applicable across
multiple zoning districts
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(a)Commercial Zones and Land Uses
Permitted and conditionally permitted land uses for each commercial zone are shown in Table 1:
TABLE 1
PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use CUP = Conditional Use Permit Required
LAND USE CN (4) CC, CC(2) CS (4)
Subject to
Regulations
In:
ACCESSORY AND SUPPORT USES
Accessory facilities and activities customarily associated with
or essential to permitted uses, and operated incidental to
the principal use.
P P P 18.42
Drive-in services or take-out services associated with
permitted uses(3) CUP CUP CUP 18.42
Tire, battery, and automotive service facilities, when
operated incidental to a permitted retail service or shopping
center having a gross floor area of more than 30,000 square
feet.
CUP 18.42,
18.40.160
Safe Parking 18.42.160
EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Business and Trade Schools CUP P P
Churches and Religious Institutions P P P
Private Educational Facilities CUP P P
Private Clubs, Lodges, or Fraternal Organizations CUP P P
MANUFACTURING AND PROCESSING USES
Recycling Centers CUP CUP CUP
Warehousing and Distribution CUP
OFFICE USES
Administrative Office Services P 18.16.050
Medical Offices PCUP(5)(7) PCUP(5) PCUP(5) 18.16.050
Professional and General Business Offices P(7) P P 18.16.050
PUBLIC/QUASI-PUBLIC USES
Utility Facilities essential to provision of utility services but
excluding construction or storage yards, maintenance facilities,
or corporation yards.
CUP CUP CUP
RECREATION USES
Commercial Recreation CUPP(5) CUPP(5) CUPP(5) 18.40.160
Outdoor Recreation Services CUP CUP CUP
RESIDENTIAL USES
Revised permit levels and added uses to
provide more flexibility. Expanded allowed
uses in Midtown and Charleston that are
currently permitted with the -GF overlay.
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LAND USE CN (4) CC, CC(2) CS (4)
Subject to
Regulations
In:
Multiple-Family P(1) P(1) P(1) 18.16.060(b)
and (c)
Home Occupations P P P
Residential Care Homes P P P
RETAIL USES
Automobile Showroom P P P
Bars CUP CUP 18.42.090
Eating and Drinking Services, excluding drive-through drive-in and
take-out services
P(8) P P 18.40.160
18.42.090
Retail Services, excluding liquor stores P(8) P P 18.40.160
Liquor stores CUP P P 18.40.160
Shopping Centers P 18.16.060(c),
18.40.160
SERVICE USES
Ambulance Services CUP CUP CUP
Animal Care, daytime excluding boarding and kennels P P P 18.42.130
Animal Care, overnight CUP CUP CUP 18.42.130
Automobile Service Stations CUP CUP CUP 18.30(G)
Automotive Services CUP
Convalescent Facilities CUP P P
Day Care Centers P P P 18.40.160
Small Family Day Care Homes P P P
Large Family Day Care Homes P P P
Small Adult Day Care Homes P P P
Large Adult Day Care Homes CUP P P
Banks and Financial Services V CUP P(2) P(2) P(2)
General Business Services CUP CUP P
Hotels P P 18.16.060(d),
18.40.160
Mortuaries CUP P P
Neighborhood Business Services P 18.16.060(f)
Personal Services P P(6) P 18.16.060(f),
18.40.160
Reverse Vending Machines P P P
TEMPORARY USES
Item 1
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LAND USE CN (4) CC, CC(2) CS (4)
Subject to
Regulations
In:
Farmer’s Markets CUP CUP CUP
Temporary Parking Facilities, provided that such facilities shall
remain no more than five years.
CUP CUP CUP
TRANSPORTATION USES
Parking as a principal use CUP CUP
Transportation Terminals CUP CUP
P = Permitted Use CUP = Conditional Use Permit Required
(1)Residential is only permitted in the following instances and pursuant to 18.16.060(b) and (c):
(i)Aas part of a mixed use development, pursuant to the provisions of Section 18.16.060(b), or
(ii)Oon sites designated as housing inventory sites in the Housing Element of the Comprehensive
Plan; and
(iii)Oon CN or CS sites on El Camino Real, or
(iv)On CN sites in the Midtown Shopping District and Charleston Shopping Center, except on the
ground-floor fronting public streets, or
(iv)Oon CC(2) sites.
(2) Except drive-through drive-in services.
(3) So long as drive up facilities, excluding car washes, provide full access to pedestrians and bicyclists.
A maximum of two such services shall be permitted within 1,000 feet, and each use shall not be less
than 150 feet from one another.
(4) For properties in the CN and CS zone districts, businesses that operate or have associated activities
at any time between the hours of 10:00 p.m. and 6:00 a.m. require a conditional use permit.
(5) Except, a A conditional use permit is not required for medical office or commercial recreation uses
up to 5,000 square feet of gross floor area, with the following exceptions, for which a conditional use
permit is always required for:
(A)ground-floor medical office fronting on California Avenue and, in the Charleston Shopping
Center, in the Midtown Shopping District, and Town and Country Shopping Center;
(B)commercial recreation uses fronting on California Avenue and in the Town and Country
Village Shopping Center.
(6) A conditional use permit is required for the following uses when fronting on California Avenue: (A)
Fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area; and (B)
Learning centers intended for individual or small group settings. A conditional use permit is required for
fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area in Town and
Country Village Shopping Center.
(7) In the Midtown Shopping District and Charleston Shopping Center, only “neighborhood serving
office” uses are permitted, and a CUP is required for office uses exceeding 2,500 sq. ft.
(8) In the Midtown Shopping District and Charleston Shopping Center, a conditional use permit is
required for eating and drinking services above 5,000 sq. ft and for other retail uses above 20,000 sq. ft.
[. . .]
Table 2 below currently prohibits residential uses in Midtown
and Charleston; this revision would allow residential on upper
floors and behind commercial uses.
Regulations
for California
Avenue have
been moved
to the -R
combining
district
18.30(A).040
Revises and
replaces
Table 5 (below)
in section (f) of
Section
18.16.060
Development
Standards
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(c) CN District: Special Use Requirements in the Charleston and Midtown Shopping Centers
The following regulations shall apply to areas of Charleston Center and the Midtown Shopping
Center as defined in Section 18.16.030.
Table 2 shows the uses permitted and conditionally permitted on the ground floor of the
applicable areas of the Charleston Center and Midtown Shopping Center. Permitted and
conditional uses specified in subsection (a) of this section shall only apply to the ground floor of
the areas of the Charleston and Midtown Shopping Centers as listed in Table 2. Uses lawfully
existing on January 16, 2001 may be continued as non-conforming uses but may only be replaced
with uses permitted or conditionally permitted under this subsection.
TABLE 2
CHARLESTON AND MIDTOWN SHOPPING CENTERS GROUND FLOOR USES
P = Permitted Use CUP = Conditional Use Permit Required X = Prohibited Use
LAND USES
Charleston
Shopping
Center
Midtown
Shopping
Center
Subject to
Regulations in:
ACCESSORY AND SUPPORT USES
Accessory facilities and uses customarily incidental to
permitted uses. P P
EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Churches and Religious Institutions CUP CUP
Private Educational Facilities CUP CUP
MANUFACTURING AND PROCESSING USES
Recycling Centers CUP CUP
OFFICE USES
Neighborhood-serving offices that do not exceed 2,500 square
feet in floor area. P 18.16.050
Neighborhood-serving offices exceeding 2,500 square feet in
floor area. CUP 18.16.050
Administrative office uses and general business office uses (other
than neighborhood-serving travel agencies and insurance
agencies) other than those legally in existence on January
16,2001
X X 18.16.050
Medical offices not exceeding 2,500 square feet in area,
professional offices, travel agencies, and insurance agencies CUP 18.16.050
PUBLIC/QUASI-PUBLIC USES
Utility Facilities essential to provision of utility services but
excluding construction or storage yards, maintenance facilities,
or corporation yards.
CUP CUP
RECREATION USES
Commercial Recreation CUP CUP 18.40.160
Outdoor Recreation Services CUP CUP
Private Clubs, Lodges, or Fraternal Organizations CUP CUP
Integrated Charleston and Midtown use
allowances into Table 1 above. Deleting this
section means that Table 1 and the related
footnotes will regulate uses in Midtown Shopping
District and Charleston Shopping Center
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LAND USES
Charleston
Shopping
Center
Midtown
Shopping
Center
Subject to
Regulations in:
RESIDENTIAL USES
Residential uses of any nature X X
RETAIL USES
Eating and Drinking Services, excluding drive-in and take-out
services
P P 18.40.160
Retail Services, excluding liquor stores P P 18.40.160
Liquor stores CUP CUP 18.40.160
SERVICE USES
Ambulance Services CUP CUP
Animal Care, excluding boarding and kennels P P
Automobile Service Stations CUP CUP 18.30(G)
Convalescent Facilities CUP CUP
Day Care Centers P P 18.40.160
Financial Services CUP CUP
Mortuaries CUP CUP
Neighborhood Business Services P P
Personal Services P P 18.40.160
Reverse Vending Machines P P
TEMPORARY USES
Farmers’ Markets CUP CUP
Temporary Parking Facilities, provided that such facilities shall
remain no more than five years.
CUP CUP
P = Permitted Use CUP = Conditional Use Permit Required X = Prohibited Use
(d) Charleston Shopping Center Additional Use Restrictions
(1)Any office use first occupying space at the Center on or after January 16, 2001, shall obtain a
written determination from the director of planning and development services that it qualifies as
a neighborhood serving use, as defined in this chapter, before occupying its premises. The
applicant shall submit such information as the director shall reasonably require in order to make
the determination, and the director shall issue the determination within 30 days of receiving a
complete application. Failure to submit the required information shall be grounds for
determining that a business is not neighborhood-serving.
(2) No more than 7,850 square feet of total floor area at the Center shall be occupied by
office uses at any time.
(3) Prior to approving a conditional use permit for neighborhood-serving offices larger than
2,500 square feet in total floor area, the city shall find that the proposed use will be
neighborhood-serving, that it will be conducted in a manner that will enhance and strengthen
the Center as a neighborhood resource, and that it will not diminish the retail strength of the
center.
(e) Midtown Shopping Center: Additional Use Restrictions
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(1)An existing ground floor office may be replaced with another office if
(a)the new tenant or owner will continue the existing business or practice; or
(b) a conditional use permit is issued for the new office use.
(2) No conditional use permit shall be issued for any new office use on the ground floor
unless, in addition to the findings required for a conditional use permit as specified in Section
18.76.010, the city finds that the proposed use will be neighborhood serving, that it will be
conducted in a manner that will enhance and strengthen the Midtown Shopping District as a
neighborhood resource, and that it will not diminish the retail strength of the District.
(3) For properties at 711, 719, and 721 Colorado Avenue, and 689 Bryson Avenue , buildings
not fronting on Middlefield Avenue, designed and used for office purposes, and not well suited to
other uses are exempt from the provisions of this subsection (b).
18.16.050 Office Use Restrictions
The following restrictions shall apply to office uses:
(a) Conversion of Ground Floor Housing and Non-Office Commercial to Office
Medical, Professional, and Business offices shall not be located on the ground floor, unless any
of the following apply to such offices:
(1) Have been continuously in existence in that space since March 19, 2001, and as of such
date, were neither non-conforming nor in the process of being amortized pursuant to Chapter
18.30(I);
(2) Occupy a space that was not occupied by housing, neighborhood business service, retail
services, personal services, eating and drinking services, or automotive service on March 19, 2001
or thereafter;
(3) Occupy a space that was vacant on March 19, 2001;
(4) Are located in new or remodeled ground floor area built on or after March 19, 2001 if the
ground floor area devoted to housing, retail services, eating and drinking services, personal
services, and automobile services does not decrease;
(5) Are on a site located in an area subject to a specific plan or coordinated area plan, which
specifically allows for such ground floor medical, professional, and general business offices; or
(6) Are located anywhere in Building E or in the rear 50% of Building C or D of the property at
the southeast corner of the intersection of Park Boulevard and California Avenue, as shown on
sheet A2 of the plans titled “101 California Avenue Townhouse/Commercial/Office, Palo Alto, CA”
by Crosby, Thornton, Marshall Associates, Architects, dated June 14, 1982, revised November 23,
1982, and on file with the Department of Planning and Development Services.
(a)The following office use restrictions shall apply in the Midtown Shopping District and
Charleston Shopping Center:
(1)The only office uses permitted are “neighborhood serving office” uses.
(2)Prior to approving a conditional use permit for neighborhood-serving offices larger than
2,500 square feet in total floor area, the city shall find that the proposed use will be
neighborhood-serving and consistent with the purposes of the zoning district
(3)In the Midtown Shopping District, buildings at 711, 719, and 721 Colorado Avenue, and
689 Bryson Avenue, which do not front on Middlefield Road and are designed and used
for office purposes, are exempt from the provisions of this subsection.
Remove onerous and subjective findings, replace with "neighborhood-
serving" office limitation, size triggers for CUP, and finding related to district
purposes. Retail Preservation Ordinance will prevent office conversions
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(b)Size Restrictions on Office Uses in the CN and CS Districts (other than Midtown Shopping
District and Charleston Shopping Center):
(1)In the CN district, office uses shall be governed by the following regulations:
(A)Total floor area of permitted office uses on a lot shall not exceed 25% of the lot
area, provided:
(i)A lot shall be permitted to have at least a total floor area of 2,500 square feet of
office uses, provided the uses meet all other zoning regulations.
(ii)No lot shall be permitted to have more than a total floor area of 5,000 square
feet of office uses.
(B)Such uses may be allowed to exceed the maximum size, subject to issuance of a
conditional use permit in accord with the provisions of Chapter 18.76. The
maximum size for any conditional use shall be established by the director and
specified in the conditional use permit for such use.
(2)In the CS district, office uses shall be governed by the following regulations:
(A)No lot shall be permitted to have more than a total floor area of 5,000 square feet
of office uses.
(B)Such uses may be allowed to exceed the maximum size, subject to issuance of a
conditional use permit in accord with the provisions of Chapter 18.76. The
maximum size for any conditional use shall be established by the director and
specified in the conditional use permit for such use.
18.16.060 Development Standards
[. . .]
(f) Size of Establishments in the CN District
In the CN district, permitted commercial uses shall not exceed the floor area per individual use
or business establishment shown in Table 5. Such uses may be allowed to exceed the maximum
establishment size, subject to issuance of a conditional use permit in accord with Section
18.76.010. The maximum establishment size for any conditional use shall be established by the
director and specified in the conditional use permit for such use.
TABLE 5
MAXIMUM SIZE OF ESTABLISHMENT
Type of Establishment Maximum Size (ft 2 )
Personal Services 3,000
Retail services, except grocery stores 15,000
Grocery stores 20,000
Eating and drinking services 5,000
Neighborhood business services 3,000
[. . .]
Integrated the following into Table 1 above through footnotes.
CUP limitations have not been proposed on personal services or
neighborhood business services to provide more flexibility.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 27 Packet Pg. 31 of 98
13
*NOT YET APPROVED*
SECTION 6. Sections 18.18.050 (Land Uses) and 18.18.060 (Development Standards) of Chapter
18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code are
hereby amended as follows (additions underlined; deletions struck-through; text omitted but
unchanged noted by bracketed ellipses):
18.18.050 Land Uses
The uses of land allowed by this chapter in each commercial zoning district are identified in the
following table. Land uses that are not listed on the tables are not allowed, except where
otherwise noted. Where the last column on the following tables (“Subject to Regulations in”)
includes a section number, specific regulations in the referenced section also apply to the use;
however, provisions in other sections may apply as well. For parcels designed with the -GF
combining district, refer to 18.30(C) for ground-floor use regulations.
Permitted and conditionally permitted land uses for the CD district are shown in Table 1:
Table 1
CD Permitted and Conditionally Permitted Uses
P Permitted Use • CUP Conditional Use Permit Required
CD-C CD-S CD-N Subject to
regulations in:
ACCESSORY USES
Accessory facilities and activities associated with or essential
to permitted uses, and operated incidental to the principal
use
P P P
Drive-in or Take-out Services associated with permitted uses
(2) CUP CUP CUP
Tire, battery, and automotive service facilities, when operated
incidental to a permitted retail service or shopping center
having a gross floor area of more than 30,000 square feet CUP 18.40.160
Safe Parking 18.42.160
EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Business and Trade Schools P P
Churches and Religious Institutions P P P
Private Educational Facilities P P CUP
Private Clubs, Lodges, or Fraternal Organizations P P CUP
MANUFACTURING AND PROCESSING USES
Recycling Centers CUP CUP CUP
Warehousing and Distribution CUP
OFFICE USES
Administrative Office Services P 18.18.060(f)
Medical, Professional, and General Business Offices P P P 18.18.060(f)
PUBLIC/QUASI-PUBLIC FACILITY USES
Utility Facilities essential to provision of utility services but
excluding construction or storage yards, maintenance facilities,
or corporation yards
CUP CUP
Revised permit levels
and added uses to
provide more flexibility
in the types of uses
permitted.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 28 Packet Pg. 32 of 98
14
*NOT YET APPROVED*
Table 1
CD Permitted and Conditionally Permitted Uses
P Permitted Use • CUP Conditional Use Permit Required
CD-C CD-S CD-N Subject to
regulations in:
RECREATION USES
Commercial Recreation CUP(3) CUP(3) CUP(3)
Outdoor Recreation Services CUP CUP CUP
RESIDENTIAL USES
Multiple-Family P (1) P (1) P (1) 18.18.060(b)
Home Occupations P P P
Residential Care Homes P P P
RETAIL USES
Automobile Showrooms P P P
Bars CUP 18.42.090
Eating and Drinking Services, except drive-through drive-in or
take-out services
P P P 18.18.060(g) ,
18.40.160
18.42.090
Retail Services, excluding liquor stores P P P 18.18.060(g) ,
18.40.160
Shopping Centers P 18.18.060(g) ,
18.40.160
Liquor Stores P P CUP 18.40.160
SERVICE USES
Animal Care, excluding boarding and kennels daytime P P P 18.42.130
Ambulance Services CUP CUP CUP 18.30(G)
Automobile Service Stations CUP CUP CUP
Automobile Services CUP
Convalescent Facilities P P CUP
Day Care Centers P P P 18.40.160
Small Family Day Care Homes P P P
Large Family Day Care Homes P P P
Small Adult Day Care Homes P P P
Large Adult Day Care Homes
Financial Services, except drive-up services P P CUP
General Business Services CUP P P
Hotels P P P 18.18.060(d) ,
18.40.160
Mortuaries P P CUP
Personal Services P(4) P(4) P(3)(4) 18.18.060(g) ,
18.40.160
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 29 Packet Pg. 33 of 98
15
*NOT YET APPROVED*
Table 1
CD Permitted and Conditionally Permitted Uses
P Permitted Use • CUP Conditional Use Permit Required
CD-C CD-S CD-N Subject to
regulations in:
Reverse Vending Machines P P P
TRANSPORTATION USES
Parking as a principal use CUP CUP
Passenger Transportation Terminals CUP
TEMPORARY USES
Indoor Farmers’ Markets CUP CUP CUP
Temporary Parking Facilities, provided that such facilities shall
remain no more than five years
CUP CUP CUP
P Permitted Use CUP Conditional Use Permit Required
(1)Residential is only permitted as part of a mixed use development, pursuant to the provisions of Section
18.18.060(b), or on sites designated as Housing Opportunity Sites in the Housing Element of the Comprehensive Plan,
pursuant to the provisions of Section 18.18.060(c).
(2) Drive-up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such
services shall be permitted within 1,000 feet and each use shall not be less than 150 ft from one another.
(3) A conditional use permit is required for personal services over 5,000 sq. ft.
(3)A conditional use permit is not required for commercial recreation uses up to 5,000 square feet of gross floor
area, with the following exceptions, for which a conditional use permit is always required: (A) medical office fronting on
University Avenue; (B) commercial recreation uses fronting on University Avenue.
(4) A conditional use permit is required for the following uses when fronting on University Avenue: (A) Fitness or
exercise studios, and similar uses; and (B) Learning centers intended for individual or small group settings.
18.18.060 Development Standards
[. . .]
(g) Restrictions on Size of Commercial Establishments in CD-N Subdistrict
In the CD-N subdistrict, permitted commercial uses shall not exceed the floor area per individual
use or business establishment shown in Table 4. Such uses may be allowed to exceed the
maximum establishment size, subject to the issuance of a conditional use permit in accordance
with Chapter 18.76. The maximum establishment size for any conditional use shall be established
by the director and specified in the conditional use permit for such use.
TABLE 4
MAXIMUM SIZE OF ESTABLISHMENT
Type of Establishment Maximum Size (ft 2 )
Personal Services 3,000
Retail services, except grocery stores 15,000
Grocery stores 20,000
Eating and drinking services 5,000
Revises and
replaces Table 4
below
Moved personal services CUP
trigger to Table 1 above and
increased maximum size to 5,000
sq. ft. to increase flexibility.
Remaining CUP triggers are
unnecessarily restrictive given
that CD-N parcel sizes and
development standards will
generate smaller footprint
buildings and limited massing
(max 0.9 FAR and 35-foot building
height). Moreover, new buildings
will be subject to design review.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 30 Packet Pg. 34 of 98
16
*NOT YET APPROVED*
[. . .]
SECTION 7. Section 18.29.050 (Permitted Uses) of Chapter 18.29 (North Ventura (NV) District
Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows
(additions underlined; deletions struck-through; text omitted but unchanged noted by bracketed
ellipses):
18.29.050 Permitted Uses
The uses of land allowed by this chapter in each zoning district are identified in the following tables.
Land uses that are not listed in the tables are not allowed, except where otherwise noted. Where
the last column on the following tables ("Subject to Regulations in") includes a section number,
specific regulations in the referenced section also apply to the use; however, provisions in other
sections not specifically referenced may apply as well.
TABLE 1: PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use
CUP = Conditional Use Permit Required TUP = Temporary Use Permit Required
— = Not Permitted
LAND USE NV-R1 NV-R2 NV-R3 NV-R4 NV-MXL
(1)(5)
NV-MXM
(5)
NV-MXH NV-PF Subject to
Regulations In:
ACCESSORY AND SUPPORT USES
18.40
Accessory facilities and activities
customarily incidental to the P P P P P P P -
18.10.080
permitted use 18.12.080
Accessory Dwelling Unit & Junior
Accessory Dwelling Unit when
accessory to primary and permitted
residential use
P P P P P P P - 18.09
Home Occupations, when accessory
to permitted residential use
P P P P P P P P 18.42
Horticulture, Gardening, and Growing
of food products for consumption by
occupants of a site
P P P P P P P -
EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Private Clubs, Lodges, or Fraternal
Organizations, excluding any such
facility operated as a business for
profit
- - - CUP CUP - - -
Private Educational Facilities CUP CUP CUP CUP CUP P P -
Religious Institutions CUP CUP CUP CUP P P P -
OFFICE USES(2)
Administrative Office Services - - - - P P P - 18.29.050(a)
Medical Offices - - - - P P P - 18.29.050(a)
Revised permit levels and added uses
to provide more flexibility in the types
of uses permitted.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 31 Packet Pg. 35 of 98
17
*NOT YET APPROVED*
TABLE 1: PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use
CUP = Conditional Use Permit Required TUP = Temporary Use Permit Required
— = Not Permitted
LAND USE NV-R1 NV-R2 NV-R3 NV-R4 NV-MXL
(1)(5)
NV-MXM
(5)
NV-MXH NV-PF Subject to
Regulations In:
Professional and General Business
Offices
- - - - P P P - 18.29.050(a)
PUBLIC/QUASI-PUBLIC USES
Community Centers CUP CUP CUP CUP - - - CUP (3)
Utility Facilities essential to provision
of utility services but excluding
construction or storage yards,
maintenance facilities, or corporation
yards.
CUP CUP CUP CUP CUP CUP CUP -
RECREATION USES
Neighborhood Recreational Centers - - CUP CUP - - - CUP(3)
Commercial Recreation - - - - CUP CUP CUP CUP(3)
Outdoor Recreation Services CUP CUP CUP CUP - CUP CUP CUP(3)
Youth Clubs - - - - - - - CUP(3)
RESIDENTIAL USES
Single-Family P P - - - - - -
Two-Family P P - - - - - - 18.42.180
Multiple-Family - - P P P P P P (4)
Residential Care Homes P P P P P P P -
RETAIL USES
Automobile Showroom P
Bars CUP 18.42.090
Eating and Drinking Services, except
drive-through drive-in and takeout
services
- - P P P P P CUP (3) 18.40.160,
18.29.050(c)
Personal Services and Retail Services
of a neighborhood- serving nature - - P P P P P CUP (3)
18.40.160,
18.29.050(c)
Liquor stores - - - - - P P - 18.40.160,
18.29.050(c)
SERVICE USES
Animal Care, daytime excluding
boarding and kennels
- - - - P P P - 18.29.050(c)
18.42.130
Animal Care, overnight CUP CUP CUP 18.42.130
Convalescent Facilities - - - CUP P P P -
Day Care Centers CUP CUP CUP P P P P - 18.40.160
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 32 Packet Pg. 36 of 98
18
*NOT YET APPROVED*
TABLE 1: PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use
CUP = Conditional Use Permit Required TUP = Temporary Use Permit Required
— = Not Permitted
LAND USE NV-R1 NV-R2 NV-R3 NV-R4 NV-MXL
(1)(5)
NV-MXM
(5)
NV-MXH NV-PF Subject to
Regulations In:
Large Family Day Care Homes P P P P P P P P(3)
Small Family Day Care Homes P P P P P P P P(3)
Large Adult Day Care Homes CUP CUP P P P P P P(3)
Small Adult Day Care Homes P P P P P P P P(3)
Financial Services - - - - P P P - 18.29.050(a),
18.29.060(b)
General Business Services - - - - P P P - 18.29.050(a),
18.29.060(b)
Hotels - - - - - P P - 18.40.160,
18.16.060(d)
Personal Services and Retail Services
defined as a neighborhood- serving
use
- - P P P P P CUP (3) 18.40.160,
18.29.050(c)
Other Personal Services - - - - P P P - 18.40.160,
18.29.050(c),
18.29.060(b)
AGRICULTURAL AND OPEN SPACE USES
Park uses and uses incidental to park
operation
- - - - - - - P
All facilities owned or leased, and
operated or used, by the City of Palo
Alto, the County of Santa Clara, the
State of California, the government of
the United States, the Palo Alto
Unified School District, or any other
governmental agency, or leased by
any such agency to another party
- - - - - - - P
Utility Facilities - - - - - - - CUP
TEMPORARY USES
Temporary Uses - - TUP TUP - - - - 18.42.050
Farmer’s Markets - - - - - CUP CUP -
Temporary Parking Facilities,
provided that such facilities shall
remain no more than five years
- - - - - CUP CUP CUP (3)
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 33 Packet Pg. 37 of 98
19
*NOT YET APPROVED*
TABLE 1: PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use
CUP = Conditional Use Permit Required TUP = Temporary Use Permit Required
— = Not Permitted
LAND USE NV-R1 NV-R2 NV-R3 NV-R4 NV-MXL
(1)(5)
NV-MXM
(5)
NV-MXH NV-PF Subject to
Regulations In:
Notes:
For NV-MXL zoning district, the total floor area of non-residential uses permitted and conditionally permitted on a lot shall not
exceed 5,000 square feet.
For office uses, total floor area of permitted office uses on a lot shall not exceed 5,000 square feet.
Provided such use is conducted on property owned by the City of Palo Alto, the County of Santa Clara, the State of California, the
government of the United States, the Palo Alto Unified School District, or any other governmental agency, and leased for said uses.
Only a 100% Affordable Housing Project is permitted. Development shall follow NV-R4 standards.
Ground floor uses shall comply with the ground floor edge framework set forth in NVCAP section 2.3.
…
SECTION 8. Chapter 18.30(A) (Retail Shopping (R) Combining District Regulations) of Title 18 (Zoning)
of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions
struck-through; text omitted but unchanged noted by bracketed ellipses):
18.30(A).010 Specific Purposes
The retail shopping combining district is intended to modify the uses allowed in a commercial
district, where applied in combination with such district, to allow only retail, eating, and service-
oriented, and neighborhood-serving office commercial development on the ground floors
[. . .]
18.30(A).040 Permitted Uses Land Uses
Except to the extent a conditional use permit is required pursuant to Section 18.30(A).050, the
following uses shall be permitted in an R district:
(a)Eating and drinking services, except drive-in and take-out services.
(b)Personal services, except the following on California Avenue: fitness or exercise studios
exceeding 1,800 square feet in gross floor area
(c)Retail services.
(d) Financial services, except drive-in services.
(e) Pet grooming services.
(f) Automobile showroom.
(g) All other uses permitted in the underlying commercial district, provided they are not located
on a ground floor.
Permitted and conditionally permitted land uses in the combining district are identified in Table
1.Where the last column on the following tables ("Subject to Regulations in") includes a section
number, specific regulations in the referenced section also apply to the use. Conditional use
permits shall be issued in accordance with Chapter 18.76 (Permits and Approvals), subject to
restrictions in Section 18.40.160.
Replace narrative list of P/CUP uses, with table. Revised
permit levels and added uses (e.g., bars, neighborhood-
serving office, medical office) to provide more flexibility.
Table 1 below removes this exception for fitness. This
change would allow fitness studios up to 5,000 sq. ft.
by right. Beyond 5,000 sq. ft. fitness is classified as
commercial recreation which would require a CUP.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 34 Packet Pg. 38 of 98
20
*NOT YET APPROVED*
Table 1
P Permitted Use • CUP Conditional Use Permit Required (R) Subject to regulations in:
OFFICE USES
Medical offices, that include retail services, fronting California Avenue CUP 18.30(A).055(b)
Neighborhood-serving offices, except fronting California Avenue. P 18.30(A).055(c)
RECREATION USES
Commercial recreation, fronting California Avenue CUP
Commercial recreation, other locations P
RETAIL USES
Automobile showrooms P
Bars CUP 18.42.090
Eating and drinking services, except drive-through services P 18.42.090
Formula retail businesses on California Avenue CUP
Retail financial services, except drive-through services. P
Retail services P
SERVICE USES
Animal care, daytime P 18.42.130
Personal services P
OTHER
All other uses permitted in the underlying commercial district, provided
they are not located on a ground floor.
CUP See underlying district
regulations
18.30(A).050 Conditional Uses
The following uses may be conditionally permitted in an R district, subject to the issuance of a
conditional use permit in accord with Chapter 18.76 (Permits and Approval):
(a)All other conditional uses allowed in the underlying commercial district provided they are not
located on a ground floor.
(b)Formula retail businesses on California Avenue.
(c)Fitness or exercise studios exceeding 1,800 square feet in gross floor area on California Avenue.
18.30(A).055050 Design Standards
(a)The following design standards shall apply in the R combining district:
(a) (1) Window Transparency. Exterior windows on the ground floor shall use transparent
glazing to the extent feasible. Low-e glass or minimal tinting to achieve sun control is
permitted, so long as the glazing appears transparent when viewed from the ground
level.
(b) (2) Visual Access. Window coverings are not permitted on the ground floor during typical
business hours. Where operations preclude transparency (e.g., theaters) or where
privacy requires window coverings, sidewalk-facing frontage shall include items of
visual interest including displays of merchandise or artwork; visual access shall be
provided to a minimum depth of 3 feet.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 35 Packet Pg. 39 of 98
21
*NOT YET APPROVED*
(b) Medical Office Uses. For ground-floor medical office uses located within 40 feet of the
back of sidewalk on California Avenue, such uses shall include a retail services component
that occupies a minimum 15-foot depth, as measured from the California Avenue ground
floor building frontage.
(c) Neighborhood-Serving Office Uses. Ground-floor neighborhood-serving office uses may be
located in the rear of lots with frontage on California Avenue or fronting on side streets, if
retail or retail-like uses occupy a minimum 40-foot depth of the ground floor, as measured
from the back of sidewalk on California Avenue, and occupy the full extent of the California
Avenue building frontage, excluding required utilities, driveways, pedestrian access and
residential lobby.
[. . .]
18.30(A).070 Waivers and adjustments.
(a) The following shall be grounds for a request for waiver or adjustment of this Chapter:
(1)Economic Hardship. An applicant may request that the requirements of this Chapter be
adjusted or waived upon a showing that strict application would result in an unreasonable
financial burden on the property.
(2) Alternative Viable Use. An applicant may request that the requirements of this Chapter
18.30(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 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.
SECTION 9. Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations) of Title 18 (Zoning)
of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions
struck-through; text omitted but unchanged noted by bracketed ellipses):
[. . .]
18.30(C).020 Permitted Uses Land Uses
(a) The following uses shall be permitted in the GF combining district, subject to restrictions in
Section 18.40.180:
(1) Eating and drinking;
(2) Hotels;
(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;
(4) Retail services;
Allows
neighborhood-
serving office,
but not
fronting
California
Avenue.
Remove Waiver and Adjustments section entirely
to make regulations unambiguous and acknowledge
that the City is expanding permitted uses.
Allows medical office on California Avenue, if
the front of the space includes retail sales.
Replace narrative list of P/CUP uses, with table. Revised
permit levels and added uses (e.g., bars, neighborhood-
serving office, medical office) to provide more flexibility.
Table 1 below removes this exception for fitness. This
change would allow fitness studios up to 5,000 sq. ft.
by right. Beyond 5,000 sq. ft. fitness is classified as
commercial recreation which would require a CUP.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 36 Packet Pg. 40 of 98
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*NOT YET APPROVED*
(5) Theaters;
(6) Travel agencies;
(7) Commercial recreation up to 5,000 square feet in gross floor area, except for parcels with
frontage on University Avenue;
(8) Financial services, except drive-in services.
(9) Pet grooming services.
(10) Automobile showroom;
(11) All other uses permitted in the underlying district, provided such uses are not on the
ground floor.
(a)Permitted and conditionally permitted land uses in the combining district are identified in
Table 1 and, subject to restrictions in Section 18.40.180. Where the last column on the
following tables ("Subject to Regulations in") includes a section number, specific
regulations in the referenced section also apply to the use.
(b)Elimination or conversion of basement space currently in retail or retail-like use or related
support purposes is prohibited.
(c)Entrance, lobby, or reception areas serving non-ground floor uses may be located on the
ground floor to the extent reasonably necessary, provided they do not interfere with the
ground floor use(s), and subject to the approval of the Director.
18.30(C).030 Conditional Uses
(a) The following uses may be conditionally allowed on the ground floor in the GF ground floor
combining district, subject to issuance of a conditional use permit in accord with Chapter 18.76
(Permits and Approvals) and with the additional finding required by subsection (b), subject to
restrictions in Section 18.40.160:
(1) Business or trade school;
(2) Commercial recreation over 5,000 square feet in gross floor area or with frontage on
University Avenue;
(3) Day care;
(4) General business service;
(5) All other uses conditionally permitted in the applicable underlying district, provided such
uses are not on the ground floor.
(b a) The director may grant a conditional use permit under this section only if he or she makes
the following findings in addition to the subject to the findings required by Chapter 18.76
(Permits and Approvals) and a finding that:
(1) The location, access or design of the ground floor space of the existing building housing
the proposed use, creates exceptional or extraordinary circumstances or conditions
applicable to the property involved that do not apply generally to property in the same
district.
(2) Tthe proposed use will not be determined to the retail environment or the pedestrian-
oriented design support the objectives of the GF combining district.
(c b) Any use conditionally permitted pursuant to this section shall be effective only during the
existence of the building that created the exceptional circumstance upon which the finding
set forth in subsection (b) was made.
Remove
onerous and
subjective
findings.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
Item 1: Staff Report Pg. 37 Packet Pg. 41 of 98
23
*NOT YET APPROVED*
Table 1
P Permitted Use • CUP Conditional Use Permit Required (GF) Subject to regulations in:
EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Business or trade school CUP
OFFICE USES
Medical offices, that include retail services, fronting University Avenue CUP 18.30(C).035(b)
Neighborhood-serving offices, except fronting University Avenue. P 18.30(C).035(c)
RECREATION USES
Commercial recreation, up to 5,000 sq. ft. P
Commercial recreation, more than 5,000 sq. ft. CUP
Commercial recreation, fronting University Avenue CUP
RETAIL USES
Automobile showrooms P
Bars CUP 18.42.090
Eating and drinking services, except drive-through services P 18.42.090
Retail financial services, except drive-through services. P
Retail services P
SERVICE USES
Animal care, daytime P
Day care centers CUP
General business service CUP
Personal services P
Theaters P
Travel Agencies P
OTHER
All other uses permitted in the underlying commercial district, provided they
are not located on a ground floor.
CUP See underlying district
regulations
18.30(C).035030 Design Standards
(a)Where the GF combining district is combined with the CD-C subdistrict, the following
design standards shall apply:
(a) (1) Window Transparency. Exterior windows on the ground floor shall use transparent
glazing to the extent feasible. Low-e glass or minimal tinting to achieve sun control is
permitted, so long as the glazing appears transparent when viewed from the ground
level.
(b) (2) Visual Access. Window coverings are not permitted on the ground floor during
typical business hours. Where operations preclude transparency (e.g., theaters) or
where privacy requires window coverings, sidewalk-facing frontage shall include items
of visual interest including displays of merchandise or artwork; visual access shall be
provided to a minimum depth of 3 feet.
Replace narrative list of P/CUP uses, with table.
Revised permit levels and added uses (e.g., bars,
neighborhood-serving office, medical office) to
provide more flexibility.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
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(b) Medical Office Uses on University Avenue. For ground-floor medical office uses located
within 50 feet of the back of sidewalk on University Avenue, such uses shall include a retail
services component that occupies a minimum 15-foot depth, as measured from the
University Avenue ground floor building frontage.
(c) Neighborhood-Serving Office Uses on University Avenue. Ground-floor neighborhood-
serving office uses may be located in the rear of lots with frontage on University Avenue or
fronting on side streets, if one of the following conditions are met:
(1) Retail or retail-like uses occupy a minimum 50-foot depth of the ground floor, as
measured from the back of sidewalk on University Avenue, and occupy the full extent of
the University Avenue building frontage, excluding required utilities, driveways, pedestrian
access and residential lobby; or
(2) For buildings that do not have tenant spaces within 50 feet of University Avenue (e.g.,
flag lots, deep setbacks), neighborhood-serving offices are located a minimum of 50 feet
from University Avenue, as measured from the back of sidewalk.
[. . .]
18.30(C).050 Waivers and adjustments.
(a)The following shall be grounds for a request for waiver or adjustment of this Chapter:
(1) Economic Hardship. An applicant may request that the requirements of this Chapter be
adjusted or waived upon a showing that strict application would result in an unreasonable
financial impact on the property.
(2) Alternative Viable Use. An applicant may request that the requirements of this Chapter
18.30(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 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.
SECTION 10. Section 18.38.030 (Permitted Uses) of Chapter 18.38 (PC Planned Community District
Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows
(additions underlined; deletions struck-through):
18.38.030 Permitted uses.
Any use may be permitted in any specific PC district; provided:
(a)Such such use is 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; or
Remove Waiver and Adjustments section entirely
to make regulations unambiguous and acknowledge
that the City is expanding permitted uses.
Allows medical office on University Avenue, if
the front of the space includes retail sales.
Allows neighborhood-serving office,
but not fronting University Avenue.
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Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
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(b)Except for uses identified as being part of a PC community benefit, the Director may
determine that an unlisted use is materially similar to a listed use in the specific PC district
and may be allowed in the same extent and subject to the same standards as a listed
permitted use, if it has:
(1)Similar impacts on the neighborhood such as traffic generation, deliveries, noise and
lighting as listed uses; and
(2)Similar characteristics such as building type, site arrangement, floor area, number of
employees, indoor and/or outdoor uses, customer traffic, equipment use, hours of
operation, parking, vehicle trips and signage as listed uses.
SECTION 11. Section 18.40.180 (Retail Preservation) of Chapter 18.40 (General Standards and
Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows
(additions underlined; text omitted but unchanged noted by bracketed ellipses):
18.40.180 Retail Preservation
(a)Conversion of Retail and Retail-Like Uses Prohibited.
(1)Any ground floor Retail or Retail-Like use permitted or operating as of March 2, 2015
may be replaced only by another Retail or Retail-Like use, as permitted in the applicable
district.
(A)A ground floor Retail or Retail-Like use in the RT-35 district on properties with
frontage on Alma Street between Channing Avenue and Lincoln Avenue may
additionally be replaced by a Private Educational Facility use, provided that such use
shall not be thereafter replaced by an Office use.
(B)This subsection shall not apply to the following zoning districts:
(I)Residential zones: RM-30, RM-40, NV-R3, NV-R4
(II)Office/manufacturing zones, except within the San Antonio Road Area Plan
area: ROLM, ROLM(E), RP, RP(5), GM
[. . .]
SECTION 12. Section 18.42.090 (Alcoholic Beverages) of Chapter 18.42 (Standards for Special Uses)
of Title 18 (Zoning) of the Palo Alto Municipal Code are hereby amended and Section 18.42.130
(Animal Care) is hereby added as follows (additions underlined; deletions struck-through; text
omitted but unchanged noted by bracketed ellipses):
18.42.090 Alcoholic Beverages
(a)Purpose
This subsection establishes permit requirements and standards for establishments with
alcoholic beverage sales or service.
(b)Licensing
Establishments with alcoholic beverage sales or service shall comply with all applicable
regulations of the California Department of Alcoholic Beverage Control.
Allows the Director to determine whether an
unlisted use may be permitted in a PC district,
based on similar impacts and characteristics.
This provision would remove sites from RPO
applicability, including two residentially zoned -
sites, occupied by a hotel and daycare.
Allows alcohol incidental to food by right
and applies regulations for bars.
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Vitality Ordinance
(Annotated)
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(c)Permits Required
Table 1 shows permits required for alcoholic beverage service depending on the use
classification and type of alcohol service.
Table 1 Permits Required for Alcoholic Beverage Services
Use Classification Beer and Wine Distilled Spirits
Eating and Drinking Service P P
Bar CUP CUP
(a) Conditional Use Permit Required in Tandem with On-Sale License
In any district where otherwise permitted by this title, any eating and drinking establishment or
other use having any part of its operation subject to an on-sale license required by the State of
California shall be subject to securing a conditional use permit.
(b) Conditional Use Permit Required with New On-Sale License
A conditional use permit shall be obtained in the case of premises for which no conditional use
permit is in force, whenever a new on-sale license is required by the State of California.
(c)(d) Amendment to Conditional Use Permit Required with Expansion
In the case of premises for which a conditional use permit is in force, which permits the sale of
alcohol, but Table 1 permits less restrictive requirements, an administrative amendment to
such permit shall be required whenever such use is intensified or is expanded in square
footage.
(d)(e) Amendment to Conditional Use Permit Required with New On-Sale License
In the case of premises for which a conditional use permit is in force, but such use permit does
not permit sales of alcohol, compliance with the permit level identified in Table 1 an
amendment to such permit shall be required whenever a new on-sale license is required by the
State of California.
(e)(f) Alcohol Service in Parklets on Rights-of-Way
Establishments that are allowed by the city to serve alcohol for onsite consumption by
issuance of a conditional use permit (“CUP”) as required in pursuant to this section or as a legal
nonconforming use, and that have both an on-sale license from the California Department of
Alcoholic Beverage Control (“ABC”) and are duly authorized by ABC to serve alcohol in outdoor
areas, shall be allowed to serve alcohol for onsite consumption without an amendment of the
CUP in parklets on public property approved via permit per PAMC Chapter 12.11 or other
outdoor uses approved via permit per any other relevant section of the PAMC. Outdoor
alcohol service shall be in full compliance with all applicable regulations, including ABC
regulations, as may be amended.
(g)Findings. To approve a CUP for alcoholic beverage sales or service, the decision-making
body must make the following findings:
(1)The applicant has not operated a licensed establishment that has been the subject of
violations regarding alcohol, or violations of public safety or nuisance statutes or
regulations in Palo Alto. In making this finding, the decision-making body may consider
the number, frequency, and severity of prior violations, the time elapsed since the last
violation, and other relevant factors; and
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(2)At least one of the following:
(A)The proposed establishment will promote the City’s economic health, contribute to
Comprehensive Plan or area plan policies, or further the zoning district purpose; or
(B)The economic benefits associated with the establishment could not reasonably be
achieved without the proposed alcohol sales or service.
(h)Operational Conditions. Owners and operators of Bars or Eating and Drinking Services
with alcohol beverage service must meet the following performance standards:
(1)Hours. Hours of operation are subject to review and amendment by the review
authority as necessary to avoid detriment to the neighborhood or to achieve
conformance with revised City of Palo Alto standards or policies.
(2)Preventing Disturbances. The owner or operator of the establishment shall take
reasonable measures to prevent disturbances by patrons in the immediate vicinity.
Such measures shall include:
(A)Signs reminding patrons of nearby sensitive receptors, such as residences, and
requests not to congregate or loiter near such residences nor operate vehicles in a
noisy manner on public streets; and
(B)Sightlines to public areas near the establishment, keeping public areas free of trash
and litter, providing lighting, and otherwise preventing conduct that might disturb
the peace and quiet of residences in the vicinity.
(C)The operator shall assume reasonable responsibility for ensuring that patrons do
not block the entrance or interfere with pedestrian activity on the adjacent public
sidewalk.
(3)Training. All employees selling and/or serving alcoholic beverages, or directly
supervising such sales and/or service, shall finish the Licensee Education on Alcohol and
Drugs program, or another equivalent program offered or certified by the California
Department of Alcoholic Beverage Control within 90 days of employment at the
establishment. Employees who have finished the course within the last 12 months are
exempt from this requirement.
[. . .]
18.42.130 Animal Care
(a)Purpose
Conform with State licensing requirements and City regulations, regulate operations, and
ensure compatibility with other allowed uses in the applicable zoning district.
(b)Performance Standards
Animal Care uses shall be subject to the following standards. Animal care uses subject to a
conditional use permit may be required to meet additional standards such as hours of
operation, drop-off and pick-up regulations, fencing and privacy standards, in particular for
businesses with outdoor uses when adjacent to residential or other sensitive uses.
Identifies performance standards for
animal care uses.
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(1)Animal Control Permit. The facility shall maintain a valid permit with Animal Control at
all times, if required, and follow the guidelines of said permit all times.
(2)Nuisances and noise. The business shall be operated in a manner to protect any nearby
properties from excessive noise, odors, lighting or other nuisances from any sources
during the business hours. Noise levels emanating from the use shall not exceed the
maximum level established in Chapter 9.10.
(3)Interior materials. The interior building surfaces of indoor housing facilities shall be
constructed and maintained so that they are substantially impervious to moisture and
may be readily sanitized.
(4)Drainage. Adequate drainage facilities shall be installed and maintained to facilitate
proper sanitation and disposal of natural precipitation and water used to clean the
facility.
(5)Ventilation. Indoor housing facilities shall be adequately ventilated to provide for the
health and comfort of the animals at all times. Such facilities shall be provided with
fresh air either by means of windows, doors, vents, or air conditioning and shall be
ventilated so as to minimize drafts, odors, and moisture condensation.
(6)Waste. Provision shall be made for the removal and disposal of animal and food wastes,
bedding, dead animals, and debris, in accordance with applicable laws. Disposal
facilities shall be covered and operated as to minimize odors and disease hazards.
SECTION 13. Sections 18.52.030 (Basic Parking Requirements), 18.52.040 (Off-Street Parking,
Loading and Bicycle Facility Requirements), and 18.52.050 (Adjustments by the Director) of Chapter
18.52 (Parking and Loading Requirements) of Title 18 (Zoning) of the Palo Alto Municipal Code are
hereby amended as follows (additions underlined; deletions struck-through; text omitted but
unchanged noted by bracketed ellipses):
18.52.030 Basic Parking Regulations
[. . .]
(i)Transportation Demand Management Plan
(1)Requirement for TDM Plan: A Transportation Demand Management (TDM) Plan to
reduce and manage the number of single-occupant motor vehicle trips generated by the
project shall be prepared and submitted by the applicant in the following circumstances:
A.For all projects that generate 50 or more net new weekday (AM or PM peak hour) or
weekend peak hour trips; or
B.For all projects claiming a reduction in net new trips due to proximity to public transit,
exclusive of subsection (D); or the implementation of a TDM plan; and
C.For all projects requesting a parking reduction, except a retail or retail-like use
proposing an addition of less than 1,500 sq. ft. or change of use to other retail or
retail-like; or
Exempts small
retail
additions and
changes in
retail use
from onerous
TDM
requirements.
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(Annotated)
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D.For all projects with reduced parking pursuant to California Government Code
Section 65863.2 (AB 2097, 2022), except a retail or retail-like use proposing an
addition of less than 1,500 sq. ft. or change of use to other retail or retail-like.
(2)The Director shall have the authority to adopt guidelines for preparing TDM plans and
when applicable shall coordinate such guidelines with the Transportation Management
Association.
[. . .]
18.52.040 Off-Street Parking, Loading and Bicycle Facility Requirements
[. . .]
(c)Tables 1, 2, 3 and 34: Parking, Bicycle, and Loading Requirements
Tables 1, 2 and 23 below outline vehicle and bicycle parking requirements in general and for
Parking Assessment Districts, respectively. Where bicycle parking standards differ from
California Green Building Standards for bicycle parking, the more stringent standards shall apply.
Table 34 outlines loading requirements for each land use.
For mixed-use projects, the requirements for each land use shall be applied and required for the
overall project.
Table 1
Minimum Off-Street Parking Requirements
Use
Vehicle Parking
Requirement
(# of spaces)
Bicycle Parking Requirement
Spaces
Class 1 Long
Term (LT) and
Short Term (ST)
…
Eating and Drinking Services:
(a) With drive-through drive-in
or take-out facilities
1 per 200 sq. ft. of gross floor area, plus
minimum queue line for 10 cars, subject to
further evaluation for higher demand drive-
through uses. 3 per 100 sq. ft. of gross floor
area
3 per 400 sf 40% - LT 60% - ST
(b)All othersFull Service 1 space for each 15060 sq. ft. gross floor
area sq. ft. of public service area, plus 1
space for each 200 gross sq. ft. for all other
areas.
1 per 600 sf of
public service
area, plus 1 per
2,000 sf for other
areas
40% - LT 60% - ST
(c)Limited Service 1 space for each 250 sq. ft. gross floor area 1 per 2,000 sf 40% - LT 60% - ST
(d)Bars 1 space for each 150 sq. ft. gross floor area 1 per 1,000 sf 40% - LT 60% - ST
[. . .]
Updates use classifications to match new
definitions; modifies ratios to align with demand.
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(Annotated)
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4.For residential mixed-use developments in the CD-C zone, CC(2) zone, on CN and CS zoned sites abutting
El Camino Real, and on CS zoned sites abutting San Antonio Antonia Road between Middlefield Road and
East Charleston Road, the first 1,500 square feet of ground-floor retail uses shall not be counted toward the
vehicle parking requirement.
[. . .]
Table 2
Minimum Off-Street Parking Requirements for Parking Assessment Districts
Use Vehicle Parking Requirement (# of spaces) 1
For Downtown University Avenue Parking Assessment District:
Residential Uses See Table 1
All Other Uses 1 per 250 square feet
For California Avenue Parking Assessment District:
Residential Uses See Table 1
Hotel/Motel/Inn See Table 1
All Other Uses 1 per 250 square feet
1.For residential mixed-use developments in the CD-C zone, CC(2) zone, and on CN and CS
zoned sites abutting El Camino Real, the first 1,500 square feet of ground-floor retail uses shall
not be counted toward the vehicle parking requirement.
[. . .]
Table 23
Minimum Off-Street Bicycle Parking Requirements for Parking Assessment Districts (IF USE IS
NOT LISTED, REFER TO TABLE 1 FOR REQUIREMENTS)
Use Vehicle Parking Requirement
(# of spaces)
Bicycle Parking Requirement
Class1 Spaces
For Downtown University Avenue Parking Assessment District:
All uses (except residential) 2 1 per 250 square feet 1 per 2,500
square feet
40% - LT 60% -
ST
Residential Uses See Table 1
For California Avenue Parking Assessment District:
Automobile Service Stations
1 per 310 square feet of gross
enclosed floor area, plus queue
capacity equivalent to the service
capacity of gasoline pumps
1 per 10
employees 100%-ST
Automotive Services
1 per 150 square feet of gross
floor area, display, or storage on
site
1 per 10
employees 100%-ST
Eating and Drinking Services:
Establish blended rate for California
Avenue, consistent with
Downtown, to simplify regulations
and acknowledge that parking
standards for these areas cannot be
enforced pursuant to AB2097/Gov.
Code Section 65863.2
Maintain bike
parking
standards
by use
classification.
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(Annotated)
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Use Vehicle Parking Requirement
(# of spaces)
Bicycle Parking Requirement
Class1 Spaces
(a)With drive-through drive-in or
take-out facilities
3 per 100 sf of gross floor area 3 per 400 sf 40% - LT 60%-ST
(b) All others 1 per 155 sf of gross floor area 1 per 1,550 sf
Financial services:
(a)Bank, savings and loan offices
with 7,500 square feet of floor
area or less:
1 per 180 sf of gross floor area 1 per 1,800 sf 40%-LT 60% - ST
(b) Banks, savings and loan offices
with more than 7,500 square feet
of floor area:
1 per 310 sf of gross floor area
(c)Others 1 per 180 sf of gross floor area 1 per 1,800 sf
General Business Services:
(a)Enclosed 1 per 360 sf of gross floor area 1 per 3,600 sf 80%- LT 20%- ST
(b)Open lot 1 per 500 sf of sales, display or
storage site area
1 per 5,000 sf 100%- ST
Medical, professional, and
general business offices
1 per 310 sf of gross floor area 1 per 3,100 sf 60%-LT 40% - ST
Personal Services 1 per 450 sf of gross floor area 1 per 4,500 sf 20% - LT 80% -
ST
Retail:
(a) Intensive 1 per 240 sf of gross floor area 1 per 2,400 sf 20%-LT 80% -ST
(b) Extensive 1 per 350 sf of gross floor area 1 per 3,500 sf
(c)Open lot 1 for each 500 square feet of
sales, display, or storage site area.
1 per 5,000 sf 100%-ST
OTHER USES
Any use not specified See Table 1
1.Long Term (LT) and Short Term (ST) bicycle spaces as described in Section 18.54.060.
2.For residential mixed-use developments in the CD-C zone, CC(2) zone, and on CN and CS zoned sites
abutting El Camino Real, the first 1,500 square feet of ground-floor retail uses shall not be counted
toward the vehicle parking requirement.
Table 34
Minimum Off-Street Loading Requirements
[. . .]
Item 1
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Vitality Ordinance
(Annotated)
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18.52.050 Adjustments by the Director
Automobile parking and off-street loading requirements prescribed by this chapter may be
adjusted by the director in the following instances and in accord with the prescribed limitations in
Table 4, when in his/her opinion such adjustment will be consistent with the purposes of this
chapter, will not create undue impact on existing or potential uses adjoining the site or in the
general vicinity, and will be commensurate with the reduced parking demand created by the
development, including for visitors and accessory facilities where appropriate. No reductions may
be granted that would result in provision of less than ten (10) spaces on a site. The following are
adjustments that apply to developments not located within a parking assessment district.
Adjustments within the parking assessment districts are contained in Section 18.52.080. The
decision of the regarding parking adjustments may be appealed as set forth in Chapter 18.78
(Appeals).
Table 4 Allowable Parking Adjustments
Purpose of
Adjustment
Amount of Adjustment Maximum Reduction 2
[. . .] [. . .] [. . .]
Combined Parking
Adjustments
Parking reductions may be granted for any
combination of the above circumstances as
prescribed by this chapter, subject to limitations on
the combined total reduction allowed.
3060% reduction of the total
parking demand otherwise
required
40% reduction for affordable
housing projects
[. . .] [. . .] [. . .]
1.See Section 18.52.050(d) below regarding requirements for TDM programs.
2.No parking reductions may be granted that would result in provision of less than ten (10) parking spaces
on site.
2.3. No parking reductions may be granted for projects that are entitled to the reduced parking standards
in Table 1 of Section 18.52.040 for senior housing.
3.4. Applies to 100% affordable housing projects and the residential component of 100% affordable
housing mixed-use projects. "100% affordable housing" as used herein means a multiple-family housing
project consisting entirely of affordable units, as defined in Section 16.65.020 of this code, available only
to households with income levels at or below 120% of the area median income, as defined in Chapter
16.65, except for a building manager's unit.
(a)Combining Parking Adjustments
Parking reduc ons may be granted for any combinaon of circumstances, prescribed by this chapter, so
long as in total no more than a 3060% reduc on of the total parking demand otherwise required occurs,
or no less than a 40% reduc on for affordable housing projects (including Single Room Occupancy (SRO)
units).
[. . .]
Allow more
flexibility
for shared
parking
arrangements.
Item 1
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Vitality Ordinance
(Annotated)
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SECTION 14. Section 18.76.015 (Additional Findings for Specified Retail Uses) of Chapter 18.76
(Permits and Approvals) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby deleted in its
entirety.
SECTION 15. Section 16.59.040 (Exemptions) of Chapter 16.59 (Citywide Transportation Impact
Fee) of Title 16 (Building Regulations) of the Palo Alto Municipal Code are hereby amended as
follows (additions underlined; deletions struck-through; text omitted but unchanged noted by
bracketed ellipses):
16.59.040 Exemptions.
The provisions of this chapter shall not apply to:
(a)City buildings or structures.
(b)Public school buildings or structures.
(c)Affordable units, either for sale or rental, that exceed the minimum number required for
projects under the city's below market rate (BMR) housing program or other provisions of
this code, which units are, by recordable means, obligated to be and remain affordable units
for a period consistent with the requirements of Section 16.65.075(c) of this code.
(d)Day care centers used for childcare, nursery school or preschool education.
(e)Accessory dwelling units (ADU).
(f)Junior accessory dwelling units (JADU).
(g)Retail service, eating and drinking service, personal service, or automotive service when the
total additional square footage is 1,500 square feet or less. This exemption shall apply only
when the additional square footage of new development does not exceed 1,500 square feet.
New development that is larger than 1,500 square feet shall pay a fee for all square footage,
including the first 1,500 square feet.
(h)(g) New development which is exempt from the fee by virtue of the Constitution of the
United States or California or by virtue of other applicable state or federal law.
SECTION 16. If any section, subsection, clause or phrase of this Ordinance is for any reason held to
be invalid, such decision shall not affect the validity of the remaining portion or sections of the
Ordinance. The Council hereby declares that it should have adopted the Ordinance and each
section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid.
SECTION 17. The Council finds that the Ordinance is exempt from the California Environmental
Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with
certainty that there is no possibility that the foregoing amendments to reduce retail vacancies will
have a significant effect on the environment.
Removes
subjective
findings
Add fee exemption for small retail additions, consistent with
fee exemptions in Section 16.45.050 and 16.58.030.
Item 1
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
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*NOT YET APPROVED*
SECTION 18. This Ordinance shall be effective from the thirty-first day after the date of its
adoption. Once effective, this Ordinance shall repeal Ordinance no. 5642.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:APPROVED:
__________________________
City Clerk
APPROVED AS TO FORM:
__________________________
Assistant City Attorney
_________________________
Mayor
_________________________
City Manager
__________________________
Director of Planning and
Development Services
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Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)
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Exhibit A (Remove Ground Floor (GF) Combining District)
Charleston Shopping Center
Midtown Shopping District
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1
4
9
Attachment B: Summary of Draft Ordinance
PAMC Chapter/Section # Proposed Amendments
Ch. 18.04.030:
Definitions
Make permanent changes to definitions.
Split “Animal Care” definition into two use
classifications, based on impact.
Split “Eating and Drinking Services” into three use
classifications, to create distinct parking requirements,
and allow bars without food service.
Remove “take out service” as it pertains to food service
Relocate “neighborhood-serving” use definitions here
Ch. 18.16:
Neighborhood,
Community, and Service
Commercial (CN, CC and
CS) Districts
Streamline overlapping, confusing, and contradictory
use regulations for Midtown and Charleston Shopping
Centers.
Allow neighborhood-serving offices and residential uses
in the Midtown and Charleston Shopping Centers
(except along public frontages).
Expand allowed uses in the CC and CS districts,
including some from the “retail-like” category, and bars
with a CUP.
Revised permit levels (i.e., by right vs. CUP) to expand
by right uses.
Ch. 18.18: Downtown
Commercial (CD) District
Streamline overlapping use regulations.
Expand allowed uses, including some from the “retail-
like” category, and bars with a CUP.
Ch. 18.29 North Ventura Expand allowed uses, including some from the “retail-
like” category, and bars with a CUP.
Ch. 18.30(A): Retail
Shopping (R) Combining
District Regulations
(Applicable on California
Avenue)
Ch. 18.30(C): Ground
Floor (GF) Combining
District Regulations
(Applicable in Downtown
core)
Make permanent 2024 additions to allowed uses.
Expanded allowed uses.
Remove subjective findings, and Waiver and
Adjustments.
Allow neighborhood-serving offices, except along
University Ave. and California Ave. frontages.
Allow medical office, with a retail sales component, on
University Ave. and California Ave.
Ch. 18.38: Planned
Communities (PC)
Districts
Allow Director authority to interpret list of allowed uses
in commercial PCs and allow "similar" uses, except
where use is listed as a community benefit.
Item 1
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Draft Ordinance
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Ch. 18.40.180: Retail
Preservation
Exempt multifamily residential and office/manufacturing
zones from retail preservation regulations.
Ch. 18.42: Standards for
Special Uses
Modify Section 18.42.090 (Alcoholic Beverages) to
streamline permitting and apply conditions for bars and
restaurants with alcohol service, regarding noise,
training, hours of operation, etc.
Establish Section 18.42.130 (Animal Care) to create
generally applicable conditions for animal care uses,
regarding nuisances, drainage, ventilation, waste, etc.
Ch. 18.52: Parking and
Loading Requirements
Establish blended parking rate for the California Avenue
Parking district (similar to Downtown).
Modify ratios for eating and drinking services.
Modify thresholds for when a transportation demand
management (TDM) program is required.
Increase shared parking opportunities.
Ch. 18.76.010 &
18.77.060 Process and
Administration (and
throughout PAMC)
Replace all references from CUP to Administrative Use
Permit (AUP) to better reflect the primarily
administrative nature of this permit process.
Ch. 16.59: Citywide
Transportation Impact
Fee
Exempt small retail uses from the citywide
transportation fee, consistent with other fee exemptions,
in Sections 16.45.050 and 16.58.030.
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Attachment B - Summary of
Draft Ordinance
Item 1: Staff Report Pg. 52 Packet Pg. 56 of 98
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Attachment C: 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
Item 1
Attachment C - Midtown & Charleston
Shopping Centers Overlapping Use
Regulations
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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
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Attachment C - Midtown & Charleston
Shopping Centers Overlapping Use
Regulations
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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
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Attachment C - Midtown & Charleston
Shopping Centers Overlapping Use
Regulations
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Attachment C - Midtown & Charleston
Shopping Centers Overlapping Use
Regulations
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Item 1
Attachment D - Retail Preservation and Businesses in Residential
Multi-family, Office, and Industrial Zones
Item 1: Staff Report Pg. 57 Packet Pg. 61 of 98
2657 Spring Street, Redwood City, CA 94063 | thehayesgroup.com 650.365.0600 | 350 Sansome Street, Suite 750, San Francisco, CA 94104
Architecture & Interiors
March 25, 2026
Planning Commission Chair Aikin
and fellow Planning Commissioners
SENT VIA EMAIL
Planning.Commission@paloalto.gov
jennifer.armer@paloalto.gov
Re: Agenda Item 3
PTC Meeting March 25, 2026,
Dear Chair Aikin and fellow commissioners,
As you evaluate and discuss the staff recommendations regarding policies to increase retail vitality in the
city, I would like to address policies related to historic properties which appear to have been overlooked.
Historic properties are a treasure. We want to preserve them as part of the fabric and history of Palo Alto.
These properties are often building types that are unusual or present with architectural nuances
associated with their historic use. Examples include historic churches, civic buildings, and old theaters.
To keep these buildings viable and part of the community after a change from their original use there
needs to be flexibility in permitted uses. Having these buildings occupied with tenants is imperative to the
financial health of the maintenance of the historic building and its ongoing disposition. And, having them
occupied increases the vitality of the neighborhood.
The Palo Alto Comprehensive plan has policies and programs that address this need for flexibility and
historic preservation.
Policy L-7.8
Promote Adaptive reuse of historic buildings.
Program L7.8.1
Promote and expand available incentives for the retention and rehabilitation of buildings with historic merit
in all zones and revise existing zoning and permit regulations to minimize constraints to adaptive reuse.
Policy L-7.9
Allow compatible nonconforming uses for the life of historic buildings.
These excerpted policies and programs around historic properties needs to be addressed in these
revised ordinances under consideration.
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Attachment E - Public
Comment
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2657 Spring Street, Redwood City, CA 94063 | thehayesgroup.com 650.365.0600 | 350 Sansome Street, Suite 750, San Francisco, CA 94104
Architecture & Interiors
An example of one historic property, a Category I historic property, the highest historic integrity, is the
Varsity Theater. Since Hana Haus moved out this building has about 2/3 of the ground floor vacant. Blu
Bottle continues to operate. The theater is a perfect example of an historic building with an architectural
nuance or impediment to the permitted uses under PAMC in the GF overlay (retail or retail like uses).
Entering from University Avenue, there is a ninety-foot-long courtyard before there is any entry to the
building. The frontage along University Avenue is only 35 feet but the property widens at the rear to three
times this distance where there are no street facing walls or windows facing the sidewalk. Retailers are
not interested in this building because of this lack of frontage, the size of the ground floor and the
courtyard in front and I believe this is a perfect example of where there needs to be flexibility in the
permitted uses as envisioned in Program L7.8.1.
For the Varsity Theater, allowing office as a permitted use in the non-street facing rear portion of the
building while requiring retail in the portion where Blu Bottle is located will open up the options for tenants.
It is better for Palo Alto, and specifically the University Avenue corridor, to have all buildings occupied but
especially these beautiful historic buildings in our downtown. Allowing flexibility in the permitted uses for
these properties will allow them to be occupied by different uses that will all add to the vitality of the
downtown with more people walking the streets and alleyways, supporting our retailers and restaurants.
Please consider tonight a Retail Vitality Policy that encourages adaptive reuse and flexibility in permitted
uses for historic properties.
Yours truly,
Ken Hayes, AIA
Principal
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Attachment E - Public
Comment
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(continued on next page)
Dear Members of the Palo Alto City Council,
My family are Palo Alto residents and own a long-vacant building at 451 University Avenue, at the far end
near Kipling Street. We finally have a great prospective tenant to fill this space that offers AI-based health
screening. This is a modern personal service that has proven highly popular among residents of downtown
London and Stockholm, and soon in New York City. However, presently in Palo Alto, our University Avenue
(GF) zoning has not kept pace with newer personal service uses, and as a result, their service does not fit
into any of the definitions.
Please consider the following narrow and precise definition as the 10th entry in the “Personal Services” list
for the University Avenue (GF) District [the underlining highlights the operative terms]:
Health screening, including biometric body scanning, imaging, or other health testing services directly
serving the public, so long as no medical treatment and not primarily fulfilling outside medical orders.
The Existing Permitted “Personal Service” Uses in the GF Zone:
For context, below are the current allowed Personal Services in the University Avenue GF zone
(items A - I), with the addition of this new item (item J):
(114) “Personal service” means a use providing services of a personal convenience nature, and cleaning,
repair or sales incidental thereto, including:
(A) Beauty shops, nail salons, day spas, and barbershops;
(B) Self-service laundry and cleaning services; laundry and cleaning pick-up stations where all cleaning
or servicing for the particular station is done elsewhere; and laundry and cleaning stations where the
cleaning or servicing for the particular station is done on site, utilizing equipment meeting any applicable
Bay Area Air Quality Management District requirements, so long as no cleaning for any other station is
done on the same site, provided that the amount of hazardous materials stored does not at any time
exceed the threshold which would require a permit under Title 17 (Hazardous Materials Storage) of this
code;
(C) Repair and fitting of clothes, shoes, and personal accessories;
(D) Quick printing and copying services where printing or copying for the particular service is done on
site, so long as no quick printing or copying for any off-site printing or copying service is done on the same
site;
(E) Internet and other consumer electronics services;
(F) Film, data and video processing shops, including shops where processing for the particular shop is
done on site, so long as no processing for any other shop is done on the same site;
(G) Art, dance or music studios intended for an individual or small group of persons in a class (see
“commercial recreation” for other activities); and
(H) Fitness and exercise studios, or similar uses, in a space having 5,000 square feet or fewer of gross
floor area (see “commercial recreation” for uses exceeding 5,000 square feet).
(I) Learning centers intended for individual or small group settings, including tutoring, standardized
test preparation, language classes, after-school programs, cooking classes, and similar uses.
(J) Health screening, including biometric body scanning, imaging, or other health testing services
directly serving the public, so long as no medical treatment and not primarily fulfilling outside medical
orders.
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Comment
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WHAT IS AI-BASED HEALTH SCREENING?
• Customers walk in and receive a full body scan using the latest visual scanning technology
• A massively detailed 3D model of your body is generated
• Their AI-based software analyzes the model and a staff member with proper medical training
explains the results
• If a previously unknown health concern is discovered, on exit the customer is handed clear
documentation to bring to their preferred healthcare provider
• Total time: in-and-out in less than an hour
WHY HAS AI-BASED HEALTH SCREENING BECOME SO POPULAR?
• This new AI-technology works very well: About 1 in 10 tests discovers a previously unknown
health concern. In particular, the tech is amazing at detecting early-stage skin cancer.
• They have solved the historic barriers to mass participation in preventative health: The service
is non-invasive, convenient, priced reasonably, and delivered in an attractive, welcoming facility.
• In Europe, they have already performed over 10,000 AI-based health screenings.
WHAT ARE THE ECONOMIC VITALITY BENEFITS?
This service would advance the economic vitality of the University Avenue (GF) zone by strongly
aligning with key objectives:
• Showcase high technology: As the birthplace of Silicon Valley, Palo Alto should lead, not be
left behind, in the new wave of technology-based personal services offerings.
• High pedestrian activity: Filling this long empty space with a very popular service would be a
major boost to foot traffic and dynamism at University Avenue’s sleepy far east end.
• Regional draw: This unique flagship service will draw customers from across the Bay Area,
many who have not experienced University Avenue’s offerings for some time.
• Evening vitality: Their operating hours and demand for the service will ensure strong
pedestrian traffic from morning through the evening.
• Façade and Pedestrian Visual Experience: Their beautiful, transparent, high-tech façade design
would be a fine addition to the University Avenue streetscape.
I thank you for the effort to modernize the GF zoning code, and for the outreach to the business
community for ideas to bring enhanced vitality to downtown Palo Alto.
Sincerely,
Alex Giovannotto
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Comment
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Attachment F: March 25, 2026 PTC Comments on the Draft Ordinance and Staff
Responses
This table identifies specific issues where the PTC requested further consideration and
provides staff’s responses, including changes to the draft ordinance in Attachment A.
PTC Comments Changes to Draft Ordinance
Ch. 18.30(A) & Ch. 18.30(C):
Contemplation about which types of
medical office uses might be appropriate
on California and University Avenues;
ultimately, the PTC deferred to the City
Council which types of medical and
medical office uses may be appropriate.
For further discussion by the City
Council. See discussion in the staff
report for options and staff
recommendations regarding medical
offices.
Ch. 18.52: Concerns about streamlining
office parking ratios across districts.
Removed proposed changes to office
parking ratios.
Ch. 18.38: Concerns about effects that
allowing flexibility in Planned
Communities (PC) zones could have on
community benefits.
Specified that uses identified as being
part of the PC’s community benefit (e.g.,
grocery store) are excluded from being
changed to a similar use.
Ch. 16.59: Concerns about small retail
additions piecemealing development
proposals to avoid impact fees.
No change proposed since this is not
anticipated to be a major issue, but
would require staff resources to track. If
the Council would like to regulate
piecemealing, the ordinance could
include a trigger date (e.g., as of May 1,
2026).
Ch. 18.40.180: Remove retail
preservation modifications to the ROLM
and GM-zoned parcels in the San
Antonio Road corridor; allow the San
Antonio Road Area Plan to determine
appropriate regulations in that location.
Revised retail preservation exemptions
to exclude parcels within the San
Antonio Road Area Plan area, while that
planning effort is still underway.
Various Sections: Minor edits and
clarifications to definitions, standards for
alcohol sales and service, and other
zoning text.
Revised.
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Attachment F - March 25,
2026 PTC Comments on the
Draft Ordinance and Staff
Responses
Item 1: Staff Report Pg. 62 Packet Pg. 66 of 98
Economic Development Committee
Staff Report
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: June 3, 2026
Report #:2605-6412
TITLE
Recommendation to the City Council on an Ordinance to Amend Palo Alto Municipal Code Title
18 (Zoning) Section 18.18.120 (Noncomplying Uses and Facilities) to Allow Existing Floor Area to
be Replaced in New Buildings Without Increasing the Degree of Existing Non-Compliance. CEQA
Status: Exempt from CEQA per Section 15061(b)(3) (Common Sense).
This item will be a late packet publication released on 5/28/26.
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Economic Development Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: June 3, 2026
Report #:2603-6166
TITLE
Economic Development Activity Report June 2026
RECOMMENDATION
Staff recommend that the Economic Development Committee receive this Economic
Development Activity Report for the month of June 2026.
EXECUTIVE SUMMARY
This June 2026 Economic Development Activity Report presents information on the City’s retail
landscape, business district updates, Employee Reports, and business openings/closings.
BACKGROUND
The Economic Development Committee, established in 2024 (under the name Retail
Committee) and continued in 2025, is a Council Ad Hoc committee that follows the California
Brown Act procedures. The Committee provides a regular forum for business and community
stakeholders to engage with Council members on implementation of the City’s economic
development initiatives. The Economic Development Committee makes recommendations to
the City Council on economic development and business vibrancy efforts, such as additional
business support, proposed University and California Avenue improvements, and citywide retail
zoning code changes, to name a few work plan efforts.
At the January 24, 2026, Council Retreat meeting1 on values and priorities the City Council
reached consensus on adopting a 2026 Economic Development priority titled, “Enhance
Business Vibrancy” and renamed the Retail Ad Hoc Committee to the Economic Development
Ad Hoc Committee, reflecting a broader focus on supporting business districts in Palo Alto. This
1 City Council Retreat Meeting Agenda:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85283&dbid=0&repo=PaloAlto&searchid=c7ff9802-
2ad6-4705-a142-e2246d02dd70&cr=1
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priority emphasizes continued engagement with business districts and the hospitality sector
through proactive outreach, collaboration, and partnership to strengthen the city’s overall
business environment.
ANALYSIS
CoStar Information
California Avenue Business District
Expressway on the South, Park Boulevard on the
East, and El Camino Real on the West side. The map of this is
shown as Figure 1.
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Business District per the Q1 2026 report from CoStar, an increase of 1,146 square feet from
18,145 square feet a year ago. Also, a decrease of 29,471 square feet from 48,762 square feet
in Q1 of 2022 as the high in the previous ten years.
University Avenue Business District
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Downtown University Avenue Updates
On April 29, staff from various departments met with the Downtown University Avenue
stakeholders to discuss the potential of an Entertainment Zone Ordinance for the closed
portion of Ramona Street, Public Safety in the Downtown, and University Ave Streetscape
Project update. It should be highlighted that the downtown stakeholder group would like to
continue thinking about the possibility of an entertainment zone ordinance in Downtown
University. The Police Department presented new efforts underway in the downtown area,
including the addition of a dedicated patrol officer. This enhancement was made possible
through organized retail theft grant funding awarded to the department. Public Works staff also
provided a brief update on the total project cost and engaged stakeholders in a discussion
regarding their interest in continuing the project.
On May 18, staff brought forward a waiver of the Downtown Business Improvement District
(BID) assessment fees for FY 2027 on the City Council’s consent calendar, which was approved
by the Council. Staff will also engage Downtown stakeholders in discussions to determine how
to proceed for FY 2028.
On April 21, staff met with California Avenue merchants to provide an update on the
discussions from the April 16 Architectural Review Board meeting and to continue
conversations regarding the proposed outdoor activation program and bicycle lanes on
California Avenue. Many businesses expressed support for the proposed standards and
provided feedback during the discussion.
On May 4, the City Council approved the second reading of the Entertainment Zone Ordinance
for the car-free portion of California Avenue. The ordinance will go into effect in June 2026 to
support California Avenue activations. The Palo Alto Recreation Foundation, in partnership with
the City and other community organizations, will kick off the California Avenue event series on
May 28th from 5-8pm on the Car Free Portion of California Avenue. The series is expected to
include six monthly events between May 2026 and October 2026 to help activate the street and
support the Entertainment Zone.
Economic Development staff monitor employment data to identify growth sectors, emerging
workforce trends, and informing policy and investment. Employment data is a key economic
activity indicator because it illustrates if the economy is expanding or contracting. The following
summarizes a portion of the memo prepared by Stephen Levy of the Center for Continuing
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Study of the Californian Economy on the California Employment Development Department’s
(EDD) employment data (Attachment A).
The number of Palo Alto jobs increased by approximately 3,000 between Q2 2024 and
Q2 2025. Palo Alto’s workforce totaled just over 100,000 jobs in Q2 2025 (including self-
employment trends). While the trend today consists of adding jobs, after the pandemic
Palo Alto lost roughly 15,000 jobs through Q2 2024.
The pandemic exacerbated the work for home environment, which peaked in 2021 with
approximately 15,000 jobs locally. However, the number of Palo Alto jobs that were
worked from home has been on a steady decline at fewer than 8,000 jobs in 2024
though it remains far above the pre-pandemic level of around 3,000 in 2019.
The largest employment sector in Q2 2025 was Health Care and Social Assistance (e.g.,
non-government hospitals, medical services, nursing homes and social assistance) in
Palo Alto with just over 25,000 jobs. This was followed by the professional, scientific and
technical services sector (e.g., tech-related services and legal, accounting and
architectural services) with over 21,200 jobs and the Information sector (e.g., web
hosting and data services) consisting of over 13,800 positions.
Palo Alto’s unemployment rate in February 2020 was roughly 2.2% but increased to
over 4% after the pandemic in 2021. The 2026 unemployment rate is just less than 4%,
which is similar to the pandemic unemployment percentage height.
Over 90% of Palo Alto businesses have fewer than 20 employees. EDD data includes
information on the number of firms by number of employees. In terms of Palo Alto’s
larger employers, there were 13 businesses who had more than 1,000 employees in Q1
2020. In Q2 2025, there are now 9 businesses who employ more than 1,000 people.
Mr. Levy’s memo includes data comparing jobs, population, and housing. Historically,
Palo Alto has been home to many jobs, but the trends illustrate a declining ratio of jobs
relative to the population. For example, the jobs/population percentage decreased from
1.69 in 2020 to 1.47 in 2025, the jobs/households ratio decreased from 4.28 in 2020 to
3.67 in 2025, and the jobs/housing units ratio decreased from 3.95 in 2020 to 3.39 in
2025.
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Business Openings/Closings
Through a separate report, staff are also able to track all businesses that apply for a Certificate
of Use and Occupancy. This report allows Economic Development staff to connect with
businesses as they begin navigating the development process. This includes upcoming openings
like Bistro Demiya (407 Lytton Ave), Rikyu (121 Lytton Ave), and Fireclay Tile (261 Hamilton
Ave).
In addition to the information previously included, staff have identified other notable business
activity. Yutori at 3375 El Camino Real hosted their opening in April 2026. The Pro hosted their
grand opening on May 12 at 541 Ramona Street. Also, Zingster‘s located at 220 University Ave
opened for business on May 15th. Staff are also tracking expected closures. As of the writing of
this Staff Report, an anticipated business closure includes Provident Credit Union located at
2390 El Camino Real #110.
No additional funding is needed at this time for the information provided in this report. The
City’s Economic Development and Retail Vibrancy efforts may result in changes to revenues,
which will be incorporated into future projections and budgets as appropriate.
Stakeholder engagement is a critical component of the City’s economic development function.
Economic Development staff continue to meet and connect with business stakeholders through
individual conversations, monthly meetings with business districts, and through the monthly
Business Connect Newsletter.
This is not a project under CEQA because it is a continuing administrative activity under CEQA
regulation 15378(b)(2).
Attachment A: Summary of Recent Job Trends in the City of Palo Alto
:
Ed Shikada, City Manager
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1
CENTER FOR CONTINUING STUDY OF THE CALIFORNIA ECONOMY
365 FOREST AVENUE 5A • PALO ALTO • CALIFORNIA • 94301
TELEPHONE: (650) 814-8553
www.ccsce.com
Alex Andrade
Assistant to the City Manager
Economic Development Manager
City of Palo Alto
Dear Alex,
This memo summarizes trends in jobs in Palo Alto using data acquired by the
City from the California Employment Development Department (EDD) and
includes other data requested by staff. The memo was prepared by Stephen
Levy at the request of and in consultation with Alex Andrade, Palo Alto’s
economic development director. The Center did this work on a volunteer basis
with no compensation.
Principal Results
Total Jobs
Palo Alto added jobs between the 2nd quarters of 2024 and 2025. This is in line
with recently released data for the Bay Area and Santa Clara County. The city
added nearly 3,000 jobs and had just over 100,000 jobs in the 2 nd quarter of 2025
including self-employment trends.
Total Jobs
Q2 2024 Q2 2025 Change
Payroll Jobs 95,394 98,302 2,908
Self Employed 2,144 2,144 0
Total Jobs 97,538 100,446 2,908
Source: EDD and ACS
EDD reported government jobs for only 2023, 2024 and 2025 so the analysis
below analyzed trends for all payroll jobs except government jobs as self -
employment was virtually the same during this period. After rising between Q2
2019 and Q1 2020 (pre-pandemic), Palo Alto jobs declined by roughly 15,000
through Q2 2024 before rising in Q2 2025. In comparison, the Bay Area lost
87,000 jobs during this period while Santa Clara County added 4,000 jobs.
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Attachment A - Summary of
Recent Job Trends in the
City of Palo Alto
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Work From Home
The ACS collects data on workers with jobs in Palo Alto that work from home.
These jobs are also included in the payroll data reported above. The number of
Palo Alto jobs that were worked from home has steadily declined though it
remains far above the pre-pandemic level. Work from home is self-reported as
the primary method of getting to work. The decline in work from home means
employees spend more days in Palo Alto where they can spend money on retail
and dining.
Largest Industry Sectors in 2025
The largest sector in Palo Alto was Health Care and Social Assistance, which
includes non-government hospitals, medical services, nursing homes and social
0
2000
4000
6000
8000
10000
12000
14000
16000
2019 2021 2022 2023 2024
Worked From Home
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Recent Job Trends in the
City of Palo Alto
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3
assistance. Next was professional, scientific and technical services that included
tech-related services and legal, accounting and architectural services.
Information consists primarily of web hosting and data services. Government
includes federal, state, county and local government jobs including school
districts. Accommodation and Food Services includes hotels, restaurants, cafes
and bars.
EDD cannot provide data on industries within these categories or data by zip
code within Palo Alto without violating confidentiality rules.
A guide to sub-industry categories is included in the notes.
Jobs in Q2 2025
Health Care and Social Assistance 25,144
Professional, Scientific, and Technical Services 21,258
Information 13,846
Manufacturing 7,029
Government 6,620
Accommodation and Food Services 5,277
Finance, Insurance and Real Estate 4,840
Retail Trade 3,709
Unemployment Rate
The data below shows the Palo Alto unemployment rate for February starting
with the last pre-pandemic month in 2020 through February 2026. The data are
estimates based on historical relationships to the county data. The Palo Alto rate
is lower than the national, state and Bay Area rates but higher than the city rate
between February 2015 and 2019
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2020 2021 2022 2023 2024 2025 2026
February Unemployment Rate
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Recent Job Trends in the
City of Palo Alto
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4
Companies by Number of Employees
The EDD data includes information on the number of firms by number of
employees though industry detail is severely limited by confidentiality rules. Other
information collected by the city may help in identifying the names of firms with a
large number of employees. The EDD data is complete for all industries
combined.
Companies by Number of Employees
250-499 500-999 1000+
Q1 2020 27 8 13
Q2 2023 24 6 10
Q2 2024 24 6 9
Q2 2025 29 9 9
Job, Population and Housing Comparison
Given the recent interest in the relationship between jobs and housing, the data
below is shown to provide context for continuing discussion. The population and
housing data is from the California Department of Finance (DOF) from the 2020
Census and annual estimates as of January 1. The jobs data above was used for
the calculations of jobs relative to population and housing. The trends all point to
a high but declining ratio of jobs relative to population in the city.
Population, Housing and Jobs Data
2020 2023 2024 2025 2026
Households 26,677 27,030 27,121 27,363 27,576
Housing Units 28,904 29,285 29,383 29,645 29,876
Population in HH 67,683 67,499 67,700 68,328 68414
Person per HH 2.54 2.50 2.50 2.50 2.48
Jobs 114,096 103,370 97,538 100,446
2020 2023 2024 2025
Jobs/Population 1.69 1.53 1.44 1.47
Jobs/Households 4.28 3.82 3.60 3.67
Jobs/Housing Units 3.95 3.53 3.32 3.39
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Recent Job Trends in the
City of Palo Alto
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5
For comparison, the Bay Area 2025 ratios were .58 for jobs in relation to
population and 1.52 for jobs in relation to households.
Notes
Data for the number of payroll jobs were provided to the city by the California
Employment Development Department (EDD).
Jobs on the number of self-employed residents comes from the American
Community Survey (ACS) published by the Census Bureau and the same source
provides data on Palo Alto jobs held by people who primarily work from home.
The ACS data is self-reported by a sample of residents. The ACS data was not
available for 2025 so the self-employment 2025 estimate on page 2 assumes the
same level as in 2024.
Data on city population, households and housing units is published by the
California Department of Finance (DOF).
The payroll jobs data comes from form DE9 used by employers to report
employment and payroll on a quarterly basis. It is considered a complete count
and is the same data used to report national, state and county job trends. Final
data are published with a 3-quarter lag and the latest data available when these
analyses were done is for Q2 2025.
The total job estimate for 2020 was developed by adding the 2025 estimate for
government jobs to the EDD estimate of payroll jobs and ACS estimate of self -
employment.
The file EDD provided to the city for Q2 2025 contains data on companies by
number of employees and payroll data in addition to the jobs data.
EDD required data to be reported as confidential if disclosing it could identify the
name of a firm. This occurred in many cases for data on the size of firms.
In the files sent by EDD government jobs are called public administration.
A detailed list of the sub industries within the major industry categories shown in
this memo can be found at naics.com.
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Attachment A - Summary of
Recent Job Trends in the
City of Palo Alto
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Economic Development Committee
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: June 3, 2026
Report #: 2603-6068
TITLE
Recommendation to the City Council on an Ordinance to Amend Palo Alto Municipal Code Title
18 (Zoning) Section 18.18.120 (Noncomplying Uses and Facilities) to Allow Existing Floor Area to
be Replaced in New Buildings Without Increasing the Degree of Existing Non-Compliance. CEQA
Status: Exempt from CEQA per Section 15061(b)(3) (Common Sense).
RECOMMENDATION
Staff recommends that the Economic Development Committee recommend that the City
Council adopt an ordinance to modify Palo Alto Municipal Code (PAMC) Section 18.18.120
consistent with the applicant’s request. A unanimous decision from the Committee would
result in the ordinance being placed on the City Council consent calendar for adoption.
EXECUTIVE SUMMARY
On August 15, 2022,1 City Council held a prescreening for an applicant proposed text
amendment to PAMC Section 18.18.120 to allow modifications to the City’s requirements for
non-complying uses and facilities in the Commercial Downtown (CD) District. Although the
applicant chose not to pursue the code change at that time, a formal application for that text
amendment has since been filed.
On October 8, 2025, the Planning and Transportation Commission (PTC) held a study session
and provided feedback on the proposed code change.2 On February 25, 2026, the PTC voted
unanimously to recommend Council approval of the applicant’s proposed text amendment
(Attachment A).
The proposed amendment removes PAMC Section 18.18.120(a)(2)(C) and (b)(2)(C), allowing
replacement of existing noncomplying floor area through renovation or new construction
1 Link to the August 15, 2022, City Council Meeting Study Session (Agenda Item 3):
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=9028&compileOutputType=1
2 Link to the October 8, 2025, PTC Staff Report (Agenda Item 3):
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without restriction to the existing building envelope (the three-dimensional shape and size
occupied by an existing building), currently referred to as the “shrink wrap rule.”
BACKGROUND
5 which established the CD District and codified its respective
development standards. Notably, parcels within the newly created CD district had their
allowable floor areas significantly reduced, resulting in many existing buildings exceeding newly
established gross floor area standards. Understanding this, Council adopted amendments to the
PAMC to include a provision allowing for the replacement of noncomplying floor area.
Consistent with a 1988 informational report to Council, buildings were historically permitted to
be remodeled or replaced, even in a manner that modified the building length, height, or width,
provided there was no increase in the building’s non-complying floor area or other non-
complying feature (e.g. height).
However, in 2015 Council raised concerns with how the code was being interpreted and
amended the code through adoption of Ordinance 5373 to better define “building envelope”
and to more clearly specify that noncomplying floor area may not be demolished and replaced
in a manner that results in a change to the three-dimensional shape of the existing building.6
This code was adopted in January 2016. Staff understands that the most recent code
amendments were generally intended to clarify the code, rather than to further specific
policies. The project that precipitated the change was relocating below grade floor area to
above grade locations creating greater building mass and expanding the existing building’s
building envelope.
Prescreening Application
On August 15, 2022, City Council held a prescreening for an applicant proposed text
amendment to PAMC Section 18.18.120. At the time, the applicant requested the change as a
means of allowing modifications to the building envelope at 616 Ramona Street. Although the
current proposal is not tied to a specific development application, the proposed code
amendments are consistent with the broader text amendment proposed at that time. Council
5 Ordinance 3696 is available online at:
6 Ordinance 5737 is available online at:
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provided the following high-level feedback that they would be seeking if the proposed text
amendment returned as a formal application:
Provide the number of properties potentially impacted by a code change.
Highlight the pros and cons of a code change (e.g., Historic impacts, Seismic and ADA
improvements, additional open spaces/roof top terraces, etc.).
Opportunities for Council to incentivize the rebuilding of these noncomplying structures
to include housing.
Relationship with Transfer of Development Rights program, and how they would relate
to this change.
9 the PTC held a study session on the proposed code amendment and
provided general feedback supporting efforts to clarify the Zoning Code and reduce barriers to
reinvestment in existing buildings, while noting concerns about avoiding unintended increases
in redevelopment flexibility beyond pre-2016 standards. The Commission did not take formal
action and continued the item to allow additional staff analysis and coordination with other
ongoing policy initiatives.
10 the PTC considered the revised Zoning Text Amendment in the context
of broader downtown planning efforts, including the Downtown Housing Plan, Senate Bill (SB)
79 implementation, and the Housing Element update. Discussion focused on the implications of
modifying the “shrink wrap rule” on redevelopment feasibility, including effects on
noncomplying buildings, potential housing production, mixed-use redevelopment, and
commercial reinvestment, as well as related considerations around seismic safety and building
modernization. Commissioners also discussed uncertainty regarding the scale of potential
redevelopment and housing outcomes, and the appropriate timing of advancing the
amendment relative to other City initiatives.
Downtown Housing Plan
The City initiated the Downtown Housing Plan to accelerate housing production and expand
9 October 8, 2025, PTC Meeting Agenda Item 3:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16596
10 February 25, 2026, PTC Meeting Agenda Item 3:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=19288
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opportunities at all income levels pursuant to the adopted Housing Element 2023 to 2031
Program 1.4. The Downtown Housing Plan focuses on identifying strategies to facilitate new
housing in approximately 90 acres of downtown, generally encompassing properties along
Lytton Avenue, University Avenue, and Hamilton Avenue between Alma Street and Cowper
Street.
13 This report identifies several market and regulatory conditions that have
contributed to limited housing production in the downtown area. Despite its proximity to
employment centers, transit, and services, downtown has produced very little new residential
development in recent years. The few projects that were built largely consisted of high-end
ownership units delivered as part of office development. The assessment explains that high
land values, rising construction costs, and relatively small parcel sizes create significant
feasibility challenges for standalone residential projects. Moreover, commercial office uses
have historically remained financially feasible, contributing to the limited supply of new
residential units downtown. The “shrink wrap rule”, which limits the opportunity to redevelop a
parcel as mixed use, was identified as a challenge to increased housing production downtown.
Senate Bill (SB) 79
This bill, which will become effective on July 1, 2026, allows taller and denser multi-family
housing within one-half mile of major transit stops, that are currently zoned residential,
commercial, and/ or mixed-use. The City Council will consider SB 79 implementation options
affecting policy planning on June 1, 2026.
Housing Element Program 3.9
To implement Housing Element Program 3.9, staff is exploring options to amend the Municipal
Code to create incentives at strategic locations which would shift the economic benefit of
redevelopment toward housing. On March 10, 2026, The Policy and Services Committee
considered policy options14 and recommended the following items be forwarded to City Council
for consideration:
13 The Downtown Housing Plan Community Assessment Report is available online at:
https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/long-range-planning/area-
plans-and-studies/downtown-housing/padhp_community-assessment-report_no-appendix_20250605.pdf
14 Link to the March 10, 2026, Policy and Services Committee Staff Report (Agenda Item 2):
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86692&dbid=0&repo=PaloAlto&searchid=5bb2015
e-ca14-41e6-907d-cca2f80d801e
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Project Description
The applicant requests approval of a Zoning Text Amendment, which would amend PAMC
Section 18.18.120 [Noncomplying (Grandfathered) Uses and Facilities] by removing subsections
18.18.120(a)(2)(C) and 18.18.120(b)(2)(C). While PAMC 18.18.120 currently allows
noncomplying uses and facilities to be repaired, renovated, or rebuilt, it requires that any
reconstructed noncomplying floor area remain within the original building envelope. The
proposed amendment would allow greater flexibility in how noncomplying floor area is
replaced. Specifically, buildings could maintain their respective non-complying floor areas, but
could have differing heights, footprints, and building envelopes when redeveloped. However,
below-grade floor area still cannot be moved above grade. These building changes would still
be subject to the governing CD District regulations and would not increase the degree of
existing non-complying floor area.
ANALYSIS
302 total parcels zoned CD (228 Property Parcels and 74 airspace subdivisions)
66 parcels with historic resources (Not subject to text amendment)
66 parcels with more than 1:1 FAR (Subject to text amendment)
87 parcels with commercial remodels/additions from building permits from 2011-2025
35 parcels built within the last 30 years (unlikely to rebuild soon), 19 of which are over
1:1 FAR
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Policy Considerations
Historically, Council has taken a conservative approach to noncomplying structures, balancing
the preservation of existing development patterns with opportunities for reinvestment and
modernization. From 1988 to 2016, the City allowed noncomplying buildings to be remodeled
or replaced provided that noncomplying floor area or other noncomplying features did not
increase. Ordinance 537317 in 2016, added more specificity and defined “Building Envelope”,
which had the effect of limiting redevelopment. Staff anticipates the applicant’s proposed
amendment would restore redevelopment flexibility that existed prior to 2016, rather than
introduce new development potential beyond what was historically allowed.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
17 Ordinance 5373 is available online at:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=47244&dbid=0&repo=PaloAlto
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ENVIRONMENTAL REVIEW
ALTERNATIVE ACTIONS
The Committee may also:
ATTACHMENTS
APPROVED BY:
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APPLICANT PROPOSED TEXT AMENDMENT
18.18.120 Noncomplying (Grandfathered) Uses and Facilities
(a) Noncomplying (Grandfathered) Uses
(1) The following uses and facilities may remain as legal noncomplying
(grandfathered) uses, and shall not require a conditional use permit or be subject to the
provisions of Chapter 18.70:
(A) Any use which was being conducted on August 28, 1986; or
(B) A use not being conducted on August 28, 1986, if the use was temporarily
discontinued due to a vacancy of 6 months or less before August 28, 1986; or
(C) Any office use existing on April 16, 1990 on a property zoned CD and GF
combining, which also existed as a lawful conforming use prior to August 28, 1986,
notwithstanding any intervening conforming use.
(2) The legal noncomplying uses in subsection (1) shall be permitted to remodel,
improve, or replace site improvements on the same site, for continual use and
occupancy by the same use, provided such remodeling, improvement, or replacement
complies with all of the following:
A) shall not result in increased floor area;
B) shall not relocate below grade floor area to above grade portions of the
building;
C) shall not result in an increase of the height, length, building envelope, building
footprint or any other increase in the size of the improvement. For purposes of
this section, “building envelope” shall mean the three dimensional shape and
size occupied by an existing building. It is not the maximum, buildable
potential of the site;
D)C)shall not increase the degree of noncompliance, except pursuant to the
exceptions to floor area ratio regulations set forth in Section 18.18.070; or
E)D)in the case of medical, professional, general business or administrative
office uses of a size exceeding 5,000 square feet in the CD-S or CD-N district
that are deemed legal noncomplying pursuant to subsection (1), such
remodeling, improvement, or replacement shall not result in increased floor
area devoted to such office uses.
F)E)The Director may approve minor changes to the building’s footprint,
height, length, and the building envelope through Architectural Review of
minor aesthetic architectural improvements and to improve pedestrian-
orientation provided there is no increase to the degree of any non- complying
feature.
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APPLICANT PROPOSED TEXT AMENDMENT
(3) If a legal noncomplying use deemed existing pursuant to subsection (1) ceases
and thereafter remains discontinued for 12 consecutive months, it shall be considered
abandoned and may be replaced only by a conforming use.
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Proposed Text Amendment
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APPLICANT PROPOSED TEXT AMENDMENT
additional information including, without limitation, third party peer review paid for
at the applicant’s expense.
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Proposed Text Amendment
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November 18, 2024
Mr. Jonathan Lait
Director Planning & Development
City of Palo Alto
250 Hamilton Avenue, 5th floor
Palo Alto, CA 94303
Re: Proposed text Amendment to PAMC §18.18.120
Noncomplying (Grandfathered) Facilities
Dear Mr. Lait,
Hayes Group Architects has been working for building owners in the Palo Alto community since 1989.
During this time, I have witnessed a natural evolution of Palo Alto’s downtown with new buildings
replacing older buildings unable to support the requirements of our modern lifestyle and workstyle. Even
old buildings that were rendered non-complying because of Floor Area Ratio limits changing over time,
were allowed to be replaced in newly configured buildings without losing floor area -- until 2016, when the
City’s 25-year old interpretation of the zoning ordinance was abruptly changed, without adequate analysis
or public input.
It is respectfully submitted that it is time to reconsider that poorly-conceived 2016 action and move
forward with a corrective text amendment to the Palo Alto Municipal Code, particularly § 18.18.120.
History
In 1986, the City Council adopted Ordinance 3696, put in place as a reaction to the intensification of
development and traffic congestion in Palo Alto’s downtown. The ordinance reduced the amount of floor
area allowed on a parcel in the CD-C, CD-N and CD-C zoning districts from what had previously been
allowed. It also prudently made provisions for buildings which were rendered “non-conforming” as a
result of the changes in the zoning ordinance, because those buildings now exceeded the newly-reduced
floor area allowed on a parcel. Ordinance 3696 provided that those buildings should be deemed to be
“compliant facilities” and allowed their owners to remodel and replace their floor area in new or renovated
buildings that better served the community and the built environment.
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Request Letter
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Ordinance 3696 as adopted 1986:
(c) Noncomplying Facilities. Chapter 18.94 notwithstanding, a noncomplying facility existing on
the effective date of this chapter and which, when built, was a complying facility, shall be deemed
to be complying. Such a facility shall be permitted to be remodeled, improved or replaced without
necessity to comply with site development regulations. Any such remodeling, improvement or
replacement shall result in increased floor area, height, length or any other increase in the size of
the facility only pursuant to the exceptions to floor area ratio regulations set forth in section
18.48.060.
The text of the Ordinance written above could have been clearer with regards to the restrictions for
remodeling, improvement or replacement, as its interpretation initially led to some confusion in the
Planning Department. In March 1988, to mitigate this lack of clarity, staff prepared a formal interpretation
of Ordinance 3696 and issued CMR185:8 for review by city council. The CMR reasonably concluded that
buildings could be reconfigured in terms of length, height and width so long as the existing floor area was
not increased. One benefit of this interpretation, among others listed in the CMR, was that it will:
“Permit reasonable flexibility for buildings undergoing remodeling and/or replacement so that improved
building design, that the City has identified over time as contributing to the enhancement of Downtown
Palo Alto, will be encouraged.”
Staff also concluded that such an interpretation would not result in increased non-conformity or non-
compliance in terms of floor area permitted in the rezoned areas, since floor area would not be allowed to
increase- it would only be replaced. And staff further explained that the interpretation adopted in CMR
185.5 would not result in increased non-compliance in terms of building height since any size building
(floor area) is limited to 50 feet in height.
For more than 25 years the City followed the interpretation set out in the CMR above (according to a 2022
staff report) and the City repeatedly approved projects in the CD Districts consistent with this
interpretation until 2015. A partial list of pre 2015 projects (just by Hayes Group Architects) approved by
the City using this interpretation includes the following:
171 University 1996
100 Forest (705 Alma) 1998
317-323 University 2002
101 Forest (657-663Alma) 2004
270 University 2005
278 University 2006
265 Lytton 2006
248 Hamilton 2012
301 High 2012
611 Cowper 2012
There were other projects, in addition to those listed above, that the City approved during this period
designed and built by others. All these City approved projects had at least two things in common: 1) they
all replaced existing non-complying floor area in the replacement building and, 2) they all increased the
height of the building over the building that had previously existed. And, consistent with staff’s rationale
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for issuing the CMR in 1988, these new buildings were better buildings contributing to the enhancement
of the Downtown.
However, on January 11, 2016, the City Council adopted Ordinance 5373 that changed the long-standing
interpretation afforded by CMR 185:8 and inserted new language in PAMC §18.18.120. Below is an
excerpt from the January 11, 2016, staff report indicating the changed text: of the ordinance:
18.18.120
(a) Noncomplying (Grandfathered) Uses
(1) The following uses and facilities may remain as legal noncomplying (grandfathered)
uses, and shall not require a conditional use permit or be subject to the provisions
of Chapter 18.70:
(A) Any use which was being conducted on August 28, 1986; or
(B) A use not being conducted on August 28, 1986, if the use was temporarily
discontinued due to a vacancy of 6 months or less before August 28, 1986; or
(C) Any office use existing on April 16, 1990 on a property zoned CD and GF
combining, which also existed as a lawful conforming use prior to August 28, 1986,
notwithstanding any intervening conforming use.
(2) The grandfathered use in subsection (1) shall be permitted to remodel, improve, or
replace site improvements on the same site, for continual use and occupancy by the
same use, provided such remodeling, improvement, or replacement complies with all of
the following:
(A) shall not result in increased floor area:
(B) shall not relocate below grade floor area to above grade portions of the
building shift the building footprint;
(C) shall not result in an increase in the height, length, building envelope, building
footprint or any other increase in the size of the improvement. For purposes of
this section, “building envelope” shall mean the three-dimensional shape and
size occupied by an existing building. It is not the maximum, buildable potential
of the site;
(D) shall not increase the degree of noncompliance, except pursuant to the
exceptions to floor area ratio regulations set forth in Section 18.18.070; or
(E ) in the case of medical, professional, general business or administrative office
uses of a size exceeding 5,000 sf in the CD-S or CD-N district that are deemed
grandfathered pursuant to subsection (1), such remodeling, improvement, or
replacement shall not result in increased floor area devoted to such office uses.
(F) The Director may approve minor changes to the building’s footprint, height,
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length, and the building envelope through Architectural Review of minor
aesthetic architectural improvements and to improve pedestrian orientation
provided there is no increase to the degree of any non-complying feature.
(b) Grandfathered Facilities:
(1) Any noncomplying (grandfathered) facility existing on August 28, 1986 and which, when built,
was a complying facility, may remain as a grandfathered facility and shall not be subject to
the provisions of Chapter 18.70.
(2) The Grandfathered facilities in subsection (1) shall be permitted to remodel, improve, or
replace site improvements on the same site, for continual use and occupancy by the same
use, provided such remodeling, improvement, or replacement complies with all of the
following:
(A) shall not result in increased floor area;
(B) shall not shift the relocate below grade floor area to above grade portions of the building;
(C) shall not result in an increase of the height, length, building envelope, building footprint,
or any other increase in the size of the improvement;
(D) shall not increase the degree of noncompliance, except pursuant to the exceptions to
floor area ratio regulations set forth in Section 18.18.070;
(E) The Director may approve minor changes to the building’s footprint, height, length, and
the building envelope through Architectural Review of minor aesthetic architectural
improvements and to improve pedestrian-orientation provided there is no increase to the
degree of any non- complying feature.
The addition of a new and more restrictive definition of the “building envelop” and the addition of a new
limitation to the existing “building footprint” (highlighted in red) in the 2016 Ordinance severely and
unreasonably constrain the potential options for replacing floor area that previously had been allowed to
be replaced in a new, modern building. That new text virtually locks in the existing three dimensional
structure, regardless of how out-of-date or in need of replacement it may be.
The current version of the Ordinance has become colloquially (and not admiringly) known as Palo Alto’s
“shrink wrap” rule because the only building that can replace the existing building with the same floor area
is one that matches the existing building’s envelop as though covered by a thin layer of plastic shrink
wrap. The current ordinance impairs the vested rights of the owners of lawful non-conforming buildings,
and essentially takes a building owner’s previously recognized right to replace their floor area in a new,
modern building, something they had enjoyed since 1986 when the city made the deal with them. As
noted above the 1986 ordinance states that they were still “Complying Facilities” despite their floor area
exceeding the new floor area limits enacted in the 1986 ordinance.
The impact of the ill-considered amendment in 2016 (Ordinance 5373) on the natural evolution of the
Downtown is clear. Since 2016, there has only been one new commercial building approved and built
under the new rules: Design within Reach. The Mills Florist building was approved under the new rules,
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but because existing floor area had to be forfeited in the new building, it could not pencil and was
abandoned.
We have seen other buildings constructed since 2016, but they had been approved under the old rules or
the existing floor area did not exceed the allowable 1:1 so no floor area had to be forfeited to build the
new building. It is highly unlikely that an owner would choose to demolish an old building (even if no
longer functional) in order to construct the same building in its place, or to erect a smaller building,
forfeiting floor area of the existing building. The effect of the 2016 amendment has been paralyzing on
our building stock and the natural evolution of the downtown.
Downtowns need to be alive and change for the better. As staff reasoned 1988 in their CMR, buildings
that exceeded the floor area limits were still “complying facilities” allowing them to remodel and replace
their floor area in new buildings that better serve the community and the built environment.
PROPOSED TEXT AMENDMENT
To restore the rights of owners of buildings that exceed the floor area limits of the current site
development regulations in PAMC §18.18.060, we respectfully suggest a minor, but effective, amendment
to the zoning ordinance: subsections 18.18.120(a)(2)(C) and 18.18.120(b)(2)(C) should be removed.
Removing these two sections will allow existing floor area to be replaced in new buildings that better
respond to the natural and built environment. These new buildings may have different footprints, heights
and envelops but they will be able to maintain their existing floor area without increasing the degree of
existing non-compliance.
BENEFITS
The benefits to the downtown are new buildings that respond to the needs of the community, that connect
with the street and sidewalk, that are consistent with the environmental and community initiatives of our
time, and that can provide housing on upper floors. There is no downside. The commercial floor area
exists. There is no increase in the amount of office space, just better buildings, fit for our time. Here are
some additional benefits that will result from this text amendment:
• Incentivize the building of housing in mixed-use buildings. If an owner can replace their existing
commercial floor area, they are more likely to think about building a new building with housing on
upper floors. If commercial floor area cannot be replaced this eliminates many, many, properties
from redevelopment or as potential sites for housing
• No increase in office space
• Access for all those with disabilities
• Meet all current building and life safety codes
• Increased property taxes
• Better buildings with daylighting and highly efficient HVAC systems and solar arrays
• Better pedestrian experience and relationships to the public realm
We are seeking a zoning code text amendment that addresses the benefits of retiring outdated,
noncomplying buildings and encourages building owners to consider new opportunities for their properties
without losing the existing floor area.
Item 2
Attachment B - Applicant’s
Request Letter
Item 2: Staff Report Pg. 15 Packet Pg. 93 of 98
We look forward to continuing this discussion.
Please call me at (650) 365-0600x15 if you have any questions.
Sincerely,
Ken Hayes, AIA
Principal
cc: Steve Reller, R&M Properties
Mark Moragne, R&M Properties
Item 2
Attachment B - Applicant’s
Request Letter
Item 2: Staff Report Pg. 16 Packet Pg. 94 of 98
Item 2
Attachment C - Parcel Disposition Map
Item 2: Staff Report Pg. 17 Packet Pg. 95 of 98
*NOT YET APPROVED*
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Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Section 18.18.120 of
Title 18 (Zoning) of the Palo Alto Municipal Code to Allow Greater Flexibility for
Noncomplying Facilities in the Commercial Downtown District
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Section 18.18.120 (Noncomplying (Grandfathered) Uses and Facilities) of
Chapter 18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) of the Palo Alto
Municipal Code is amended as follows (additions underlined; deletions struck-through):
18.18.120 Noncomplying (Grandfathered) Uses and Facilities
(a) Noncomplying (Grandfathered) Uses
(1) The following uses and facilities may remain as legal noncomplying (grandfathered) uses,
and shall not require a conditional use permit or be subject to the provisions of Chapter 18.70:
(A) Any use which was being conducted on August 28, 1986; or
(B) A use not being conducted on August 28, 1986, if the use was temporarily discontinued
due to a vacancy of 6 months or less before August 28, 1986; or
(C) Any office use existing on April 16, 1990 on a property zoned CD and GF combining,
which also existed as a lawful conforming use prior to August 28, 1986, notwithstanding
any intervening conforming use.
(2) The legal noncomplying uses in subsection (1) shall be permitted to remodel, improve, or
replace site improvements on the same site, for continual use and occupancy by the same
use, provided such remodeling, improvement, or replacement complies with all of the
following:
(A) shall not result in increased floor area;
(B) shall not relocate below grade floor area to above grade portions of the building;
(C) shall not result in an increase of the height, length, building envelope, building
footprint or any other increase in the size of the improvement. For purposes of this
section, “building envelope” shall mean the three dimensional shape and size occupied
by an existing building. It is not the maximum, buildable potential of the site;
(D)(C) shall not increase the degree of noncompliance, except pursuant to the exceptions
to floor area ratio regulations set forth in Section 18.18.070; or
Item 2
Attachment D - Draft
Ordinance
Item 2: Staff Report Pg. 18 Packet Pg. 96 of 98
*NOT YET APPROVED*
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(E)(D) in the case of medical, professional, general business or administrative office uses
of a size exceeding 5,000 square feet in the CD-S or CD-N district that are deemed legal
noncomplying pursuant to subsection (1), such remodeling, improvement, or
replacement shall not result in increased floor area devoted to such office uses.
(F)(E) The Director may approve minor changes to the building’s footprint, height, length,
and the building envelope through Architectural Review of minor aesthetic architectural
improvements and to improve pedestrian orientation provided there is no increase to the
degree of any non- complying feature.
(3) If a legal noncomplying use deemed existing pursuant to subsection (1) ceases and
thereafter remains discontinued for 12 consecutive months, it shall be considered abandoned
and may be replaced only by a conforming use.
(4) A use deemed legal noncomplying pursuant to subsection (1) which is changed to or
replaced by a conforming use shall not be reestablished, and any portion of a site or any
portion of a building, the use of which changes from a legal noncomplying use to a conforming
use, shall not thereafter be used except to accommodate a conforming use.
(b) Noncomplying (Grandfathered) Facilities
(1) Any noncomplying (grandfathered) facility existing on August 28, 1986 and which, when
built, was a complying facility, may remain as a legal noncomplying facility and shall not be
subject to the provisions of Chapter 18.70.
(2) The legal noncomplying facilities in subsection (1) shall be permitted to remodel, improve,
or replace site improvements on the same site, provided such remodeling, improvement, or
replacement complies with all of the following:
(A) shall not result in increased floor area;
(B) shall not relocate below grade floor area to above grade portions of the building;
(C) shall not result in an increase of the height, length, building envelope, building
footprint, or any other increase in the size of the improvement;
(D)(C) shall not increase the degree of noncompliance, except pursuant to the exceptions
to floor area ratio regulations set forth in Section 18.18.070;
(E)(D) The Director may approve minor changes to the building’s footprint, height, length,
and the building envelope through Architectural Review of minor aesthetic architectural
improvements and to improve pedestrian-orientation provided there is no increase to the
degree of any non- complying feature, except as provided for rooftop access and
amenities in Section 18.18.060(e).
(F)(E) The residential portion of any legal noncomplying facility shall not be converted to
a non- residential land use or reduced in gross floor area or number of units. An applicant
asserting that the operation of this subsection (F) is preempted by state or federal law
Item 2
Attachment D - Draft
Ordinance
Item 2: Staff Report Pg. 19 Packet Pg. 97 of 98
*NOT YET APPROVED*
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shall submit a statement of its position with all claims and all supporting documentary
evidence at the time it applies for a change of use. The City Council shall hold at least one
noticed public hearing in accordance with the procedures set forth in PAMC 18.77.080 to
consider whether to waive or adjust the requirements of one or more provisions of Titles
18 or 21. The City Council may seek additional information including, without limitation,
third party peer review paid for at the applicant’s expense.
SECTION 2. The Council finds that this Ordinance is exempt from the California
Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it
can be seen with certainty that there is no possibility that it will have a significant effect on the
environment.
SECTION 3. This Ordinance shall be effective on the thirty-first date after the date of
its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning and
Development Services
Item 2
Attachment D - Draft
Ordinance
Item 2: Staff Report Pg. 20 Packet Pg. 98 of 98