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Home My WebLink About0573.000·, ~. .... . •. ', ~,I, '."-:' .November IS, 1990 HONORABLE CITY COUNCIL Palo Alto, Califcrnia '~ttent1on: finance and Publ fc WorKs Committee Memben of the Council: Beoort in ar7ef ' ___ C:" TnE SUBJECT OF [ THIS REPORT ISA COUNCil PRIORJTY On rebruary 13, 1990, the Finance and Public Works Committee (F&PW), after reviewing Hayer Cobb's outline on economic trends and issues. requested that tne Planning staff provide information on revenue impacts and redevelopment options. The finan,e and Public Works Committee reviewed and made recommendations in iI Revenue I!!1J!Jll...Anah'sis-Report (OfR:493:0 c-f 9/6/90) on Sept~~ber 11, 1990. The (ity Council acted on t~ese Ccmrnittee recommendations on October 22, 1990. This report ~ddr~sse! potential redevelopment options available to the City. ReGson and BaSis for Public Bedeyelo~ rn CiliforB;a~ a public redeyelopment process may be u~dertaken by local agenci~s in order to eliminate blight within a defined area and achieve desired development patterns. Such desirea development patterns within corrmenial areas can include provision of accessible and environmentally attractive sites for !'lew businesses and mechanisms for existing businesses to upgrade and possibly expand. The public redevelop~ent process permits local agencies not only to determine desired development and 1and use patterns withiD a deffn~d area, but it also provi1es local agencies with .dditional powers to ~chieve th€se developmert ~bjectives. e.g., t~ acquire existing properties and assist in financing naw projects. However, before i redevelcpment process can be implemented for a defined area, the targeted area must meet criteria of a ~blig~ted area· as defined i~ the state's Community R~deyelop~nt law. CTiteri~ for blighted areas address both condition of bliildin9s and the prope-rt'es where such buildings are located. 8uilding criteria include defective design and character of building construction as well as b~ildin9 obs~Tescence. deterioration or dilapidation within the defined area. Property criteria include lots of irregular form and inadequate sizt! for proper <ieyelopment~ as well as prevalence of depreciated values and impaired investments. CI4R:573:0 .. ," " , '- . ,.j. . ' , c Qualftv of Cammercia' anq lndustrfa' DeveloDme~ When viewed fram a city~ide perspective. the condition of most com~ercial and industrial districts 1:"1 Palo Alto are good to excellent. Palo AHo h:lS heen fortunate-throughout its hi story to have f~vor1ib1e market forces th.!t <:ontributed' to th'2 economic health of the City and upgrading of the tity's principal commercial, indus.trial and research "reJ.5. In recent years, the Cfty experienced substantial private remodelling and redevelop~~nt in its Downtown ~~ea~ a major remodelling of the Stanford Shopping Center and the beginning of redevelopment within t~e Stanford Research Park. In addttion, large tracts of relatively underutilized lan~ on £1 Camino Real south ~f Matadero Creek are experiencing prfvate redeveloprnent~ much of it in moderate density housing. While private market forces have constituted the prlnclpal impetus for the upgrading of many of the City~s commercial districts~ City regulations also have accommodat~d and encouraged rede~elopment by illo~ing most existing (Dmmercial and industrial buildings that exceed cvrrent site development regulations {particularly (1oor area ratio regulationsj to rebuild up to their pres.ent size. As such, these sa-called noncomplyin9' use pro'y'isiof'.s in the C1ty r s zoning regul~t;ons permit owners of such buildings to remain competitive with owners of !li!wer buildings by enabling t.hem to remcdel and even rebuild floor area that i~ many commertial and industrial areas would no longer be allowed. Nonetheless, commercial and industrial areas exist in Palo Alto that ha~e not experfenced the upgrading experienced iA Downt.OW!'1 Palo A1to~ Stanford Shopping Center and t~e Stanford Research Park. These areas include the three neighborhood shopping centers (Edgewood Plaza, Charleston Center, Alma Piaza). sections of [1 (amino frontage (south of St~nford A~enue), the Comme~cial/Transport/rndustrial area east of San Antonio Road, and posslb1y Town and Country Village. However, staff believes that none of these areas would Feet the trjt~r1a for a -blighted area-under rede~elopment law. I~ this context, perhaps only the Urba~ lane Ar~a. between the Holiday ]nn and Town and Coun~ry Village, WJuld qualify as a blighted area, given its man} deteriorated buildings. irregular parcel sizes~ substandard public rights-of way and restricted access. Haw~ver. it should be noted that the CS-zoned Urtan lane Area contains a number of b~siness services which could not affGrd tligher rents if the area were sL:bstantiill1y upgraded. in additi<ll't, it is quite unlikely tnat these busines';)es would be able to find alternative sites in Palo Alto if they ~p.re forced to relocate. Thus, the City faces optiOM regarding the Urban Lane Area and other underutilized ~ommercial ar€as in Palo Alt~ on ~hether to inltiate public actions to upgrade these areas and ~a:iten displacement of business service I.!ses or allow thell to remain for a poss,bl), longer pt!riod until pr;~ate mari.et forces ultimately ~ndertake upgrading or redevelopment. CMR,S73:0 Rede,Op/gz .. ,. 11/15/90 Fage 2 • •• / o MiQMS on __ RedevelQpm'i:l1t As noted earlier, "lstorica11y. the private sector "as been very responsive in ~inta1ning the high qualitJ development and level of maintenance found in many of P~10 Alto's commercial and industrial areas. Moreover~ such upgrading of existing prGperties or developing new projects has occurred in a manner consistent with botn Comprehensive Plan development policies a~d zoning regulations. Continue ExistinU.Q,Jjcies and Regulations One 'Option on TlO>development strategies would be to allow private market forces to continlJe functioning as they have 'in the past. 'Sud! an appr-oi3.:::n assumes that private market forces wouTd continue to upgrade many of Palo Alto's commercial and industrial districts. In additfon~ Qiven the overall demand for land fn Palo Alta, it ;:s unlikely the City would experience significant deterioration in its underutilized commercial or industrial distr;'t~ und~r such an approach. Another option would be to proceed with special studies, which the City agteed to do as follol!(-up actions Uporl completlon of the Citywide land Use and Transportatfon Study. At that time, the City CounGil directed staff to initiate spethl studies for ff\le areai ';n the City. ne Urban lane CS Area ~as assigned first priority and the East Meadow (ircle lM Area as a sec~nd priority. Once the East Meadow Circle study was completed} st~ff was expected to r~turn to Council for further direction before initiating an analYSis of the last three areas t~at ir.cludec the COlTlllercfill/Transport/lndustrial GM Area, 395 PagE 14;11 Road GM sHe and the vacant LM(5) site at 1050 Arastradero Road. Staff e.rects to initiate tne CS Urban lane Area stud~ fn ]991-92~ The areas ider.t1fied for Citywide follow-up studies gen€rally ~ere underutilized. e.g., Urban Lan~~ or aging industri~l areas, e.g., [ist Meadow Circle~ The site at 1050 Arastradero Road, hawev~r, ~as 'Wat;ant. The studies were inte"d~d to determine if changes in land use a~d public improvements would be appropriate so that future uses and functions in these areas respon4ed to community needs and expettations_ The-tiHimat.e use and 'u'iabil ity of these areas would reflect a proacti\le approacn on the C;ty's part, but the level of public sector in .... Cilvement 'WouTd not be as ext~ns'jve as a redevelopment process approach. Public Red€ .... eloDment The second option available in terms of targeting certain cDmrnercial and industrial areas of the City for upgrdoing wouTd be for the City to init1ate a public redevelopment process for bTighted areas. As noted earlier, staff believes the only commercial or indu~trial area i~ Palo ATto that may qualjf~ as a bl ighted area would b.e the CS zoned Urban Lane Area. The object ive of a public redevelopment process would be to eliminate a blighted area_ The public redevelopment process is comprehensive and frequently co .... ers an extended ti~ frame. A summary of the publfc redevelopment process includes CMR: 573:3 RedevOp/gz 11/15/90 Page 3 1) formal establishment of a rede~e'opment agency whose governing board cou1d be the City (our.ell; 2J adoption of a redevelopment plan for a project area; and 3) impl.el'lentat1on of the redevelopment p'an. Plan implementation includes: i) lssembl,)' of land (if nece-s.sary. through eminent domain) and s·:te preparation; 2) disposition of land for private ~nd pubtic deve'opm~nt; 3) prOVision of special public works impro~ements; and 4) facilitating the development or rehabilitation of housing, commercial or industria' us~s in the proje-ct area depending up<ln the nature of the red'evelopmi!nt plan. Funding redevelopment a(tiyities originates from an extraordinary range of sources including: 1) community funds; 2) tax i~crement financir,g; 3} le~s~ revenue bond'S; 4) II1crtgage revenue bonds; 5) ind·jstrial dev!Tcpment bonds; 5) spedal assessment districts; 7J federal sources; and 8) pri ... ate de..,eloper assistance-. As noted earlier, the public redeve10pment process is ccmprehe~sive and iengthy. Within California, the success of commercial and industrial rede~elopment projects have varjed substantially as have t~e time frames required between plan adoption and project completion. In many situations, (leared sites within a redeyeTopment area ha~e remained vacant for years while fc~r businesses in these ar!a~ either relocated if aTteroat1ve sites were avaiiable or simply ceased operating. Summary and Conclusion: As noted earlier, Palo Alto, thro~ghout its hfstory, has been fortunate in havfng its principal c:orm1ercfai end industria1 areas maintain and renew themselves thr[}ugh the dynamics of private economic forces. A fe'w( areas, e.,]., Urban lane~ h-3.ve not experienced the level of mainterlance and upgrading as other commer(;al districts in Palo Alto nave. Yet many of these L:nderutilized areas contain essential busir:ess sen-lees th3t cotJld not afford rents charged in the City's more prestigious (ommercial and fndustri.l areas. Potential strategies that address future development needs in these sa-called underlltilized cr agir,g c.Q;Tmerclal/indu'Strial areas extend from essentially continuing present pOlicies to designating a blighted irea or area for a public redevelopment process. A 2fddle option WQuTd be to initiate the special area studies identified in the C1t,Y'llide Land Use and Transportation Study. Given the re11thely small staTe (If such potentially bnghted areas in Palo A1to~ s.taff bel ieves that tre prOte5S p!"evfously approved by the C.ity (ourcil, to initiate special area studies, is tM~ most effective strateg1 in determinlng appropriate future use, de ... elopment and publ ic improv&ments within these design~ted (ommer~ial areas of Palo Alto. Such studies could address both desired use and development patterns as we11 as mechanisms for retention of needed business services. RecomT!1endat i9n Based on the preceding di snssion, staff recorrrnel'lds that the Finance and P~blic Wcrks Committee recommend that the City continue to proceed with CMR: 573:0 RedeyOp/gz • '. , 11/15/90 Page • • . . ' ./: special area studies id~ntified at the conclusion of the Citywide Study. begInnIng in the fall of 1991 ·.1th • study of the CS Urban Lan. Ar •• to be followed by ~ study of t~e lM fast ~eadaw Circ1e Area. Respectfull, s"b~;tt.d, • ~; I ' (Oe V tfOR ZI~ER! Ass;~tant Ph 1::~,/U?;{ ;[_kA.uh,/ KE~NETH R. SCHREIBER Dir~ctor of Planning and Community Environment cc: Planning to~ission Architectural Relliew .Board Chamber of Commerce Stanford University (5u Shaffer, Andy Doty, Phil Williams) 8arron Bark ASSDc;ation Chestn~t-Wjlt~n Homeowners Association College Terrace Neighborhood Association Greenacres lmprovement Association Woover Park Neighborhood Association Interdale Way Homeowners Assoc'ation leland Manor Association Hi dtown West Old Trace Neighborhood Palo Alta Hills H~~owners Association (~n'ttee for Green Foothills Vent~ra Neighborhood Assaciat1un. David Jeong VentlJra Ne;ghb(}rho~d Association, Denny Petras ian walnut G~oye Homeowners Association Webster Court HQmEO~nErs Association Charleston Meadows Neighborhocd Association, Jane Barrett Charleston Meadows Neighborhood Associatfon. Jean Almsted Downto __ n N.ort" Npighborhood Association [vergreen Park Neignborhood Association Green Meadow Community As~ociation Creater ~irinda Communit) Association Southgate Neighborhood Stanford Mid-Peninsula Urban Coalition West 8ayshore Residents Association Greenacres lr Jordon/Garland Neighborhood CHR: 573:0 Red.vOr/gl 11/15/90 Page 5 Menta Loma Neighborhood Association Southgate Neigh~orhood UnIversity Park Association Uotyersit~ a~d Crescent Park Association Pa10 A1tCl Housing Co,"paratlcn Steve Player Oavid Jur) James Baer keenan Land Compani '''ILS73 :0 RedevOp!gz 11/15/90 Page 6