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HomeMy WebLinkAbout0157.094Febru~ry 17, 1994 THE HONORABLE CITY COUNCIL Palo Alto, Calif'ornia 11 REVISICNS 1'0 THE CITY'S DOWNTOWN REGULATION (;O"ttERNING INCENTIVES FOR SEISMIC UPGRADES AND HISTORIC PRESERVATION OF EXISTING BUILDINGS "ambers of the Cou.."lci 1 : REPORT IN BEl E.t This report conoerns a request for City Council direction to initiate a zoning text amendment to the City'S downtown regulations to allow incentives tor seismic upgrade and bistoric preservation to be combined for those structures falling within cateqories I , II for seismic upqrade and Categories 1 and 2 for historic preservation. BACKCROl1ND In Auquet ~98S, ~e City adopted a comprehensive set of zoning regulations governinq commercial uses and physical aevelopment patterns for the c:!owntown. The requlations were intended to substantially curtail major new development occurrinq within the aowotown area that haa been driven by the 1980's proliferation of commercial financing. In addition to restricting new development, the regulations addressed ground floor retail uses and associated pedestrian activity; building seismic upgrade requirements; and historic preservation. A fundamental goal ot the regulations was to discourage new development; thereby not increasing' the substantial existing parking deficit evidenced in the do~~town. A total new additional square footaqe cap of 300,000 was established, with a 235,000 square foot threshold that requires city Council revie~ of the regulations on~~ that number had been reached (Policy 6c. Comprehensive Plan Transpol~ation Elemen~). To date, approximately 46,000 new square feet have been added in th~ downtown area since the adoption of the regulations. CMR:l57:94 ...... • .,.- (") 'P Page 2' Retention of existing structures w~s an important aspect of the requlations l in order ~o preserve the scale, character and proportion of the downto~n and for histo~ic preservation! aesthetic purposes. To provide incentives to property oYners of buildings in need of seis-mic O~ historic upg~ade, the: regulatio11s were crafted to allow a 25 percent increase in floor area in conj~~ction with either a seismic upgrade (for Seismic Category I ~ II buildin;s) or the historic preserv~tion of category 1 or 2 structures. Buildings that tall into both cataqories, of which there are nine total in the downtown area, cannot take advantage of both provisions in the regulations by increasinq existing floor area more than 25 percent; i.e., the allowance is not additive. Chop Keenan, owner of the Varsity Theater located at 456 University Avenus 1 has writt~n a lett--er to the City prcposinq to convert the existing theater into a hiqh sales volume, 2-3 story bookstore with an attendant cappucino/esp~esso bar. (See enclosed February 15# 19~4 letter of request.) The owner advised City staff that the existinq theate~ lease is up fer rene~al, and that the current theater operator cannot afford the high cost of rehabilitatinq the existinq structure, which is in dire need of repairs. Nationwide, single screen theater operators have found it increasingly difficult to compete yith multi-screen theater complexes. Theater operators lack control o'\~er ind.ustry distribution of first run movies, operating costs have risen, and consumer preferences for the greater choice available in multi­ acreen theater complexes have resulted in the demise o£ single screen theaters across the country. The owner desires to seismically upgrade the building, and restore the historic facade on the front or the structure and within the columned arcade area. Hr. Keenan estiaates th~t the total cost of seismic and historic upgrade will be approximately $2,200,000. The rear of the building would be expanded sliqhtly for otfice use. Major reconstruction would occur within the interior of the existing theater area, where two or thrae floors would b@ constzucted to accommodate the bookstore. The O"liner plans to rehabilitate the structure to national historic upgrade standards, thereby permitting reversion to theater use, should there be a future desire to do SO~ With the exception of a proposed addition to L'e rp~r, the buildinq envelope would remain essentially unchanged; i.e., the increased floor are would be accommodated within the existing buildinq~olume. New qross square footage not excQecing 7,48C square feet would be possible if the 25 percent bonus incentive tor seismic upgrade was combined with the 25 percent bonus for historic preservation. The requast is fer an additional 3700 square feet. The owner was advised by statf thdt a Planned community (PC) crdinance process CMR:1S7:94 . I .l ., " ~ , ~ ~ ~ " ~ r~ , • page 3 was one available mechsnism for gaining additional entitlement or that a zoninq text amendment would be necessary. In discussions with Mr. Keenan, it was clear that a PC zone would not be pursued. While the "public benefit-aspects of the combined seismic upgrade and historic preservation of the building were considered SUfficient for a positive statf recom~endation, Mr. Keenan was still unvlllnq to pursue the PC. He has instead requested a zoninq text amencment to ~ffer both the seismic and historic bonuses to be utilized. Staff advised the applicant that under the code only the City co~n~il or Planninq Commission can initiate a text amendment. In considerinq the policy implications of Mr. Keenan's request, staft otfers the following: 1. The intent of the downtown regulations vas to preserve and upgrade buildings of historic significance l and to prevent widespread demolition and redevelopment of the d~wntown, aaintaininq its traditional scale and character. Incentives were put in place to seismically upgrade existinq structures. The proposal includes seismic upgrade, historic preservation, no increase in building height, and only minor exp~,sion on the non-historic rear facade. A co~parable expansion to the rear Yas approvec by the Historic Resources Board (HRS) and the Architectural Review Boar~ (ARB) approxi.ately six years ago; but the project was considered economically infeasible by the owner and did not pr¢ceed. Since that timef the HRB and city Council have adopted the National Historic Stan4arOs of historic rehabilitation. Tbe owner had aqreed to comply with all of those standards in the renovation of the building. HRB and ARB review of the project i. required. 2~ conversion of one permitted use to another within the Co-c zoning district is non-discretionary undsr the downtown requlations. Both theaters and bookstores, as well as cott~e shopsl are permissible uses within the district. 3. Concern with -intensification-of uses in the downtown was expressed frequently throughout the discussions on the downtown regulations in the 1980's. While never defined, ·intensi~ication· vas most often expressed in generalized terms of increaoed parking needs. Although a -blended­ parking rate is applied to the downtown area regardlas& of use, standard ordinance parking requirements for the Varsity Theater would be nearly twice that required for the proposed bookstore/cappucino ~r. CMR:157:94 •. I o Page 4 4. The economics of continued theater operation ere tenuous. Atten~ance ratas at single theaters is qenerally going downward. Historic reh&bilitation and seismic upgrade costs of the building are quite high, regardless ot its re-use potential. At present, reveno..:es to the City .from the existing use are minimal, as there is no entertainment tax in Palo Alto. The proposed bookstore is anticipated by the buildinq owner to achieve $2G,OOO,ooc in annual sales once it becomes fully operational, which could result in as much as $200,000 in additional retail sales tax to Palo Alto. S. A zoning text amen~ent that would allow the applicant to take advantaqe of both seismic upgrade and historic preservation incentives would technically be applicable to other properties falling within those categories. There a~e currently S s~ctures which Deet both the seismic and historic classification~ An attached memo from the Cityls Plann'inq Department indicates the status of those buildings; fo~ have been upgraded using one of the bonuses; one 1s an eXisting church,. and or.e is in residential \lse~ It a.ppears unlikely that any of the other 9 structures could expand substantially and still meet criteria for historic presgrvation. This raises the policy issue ot whether the text change, without 5~e stipulation to the contrary, would encouraqe SO parcent enlargements to historic structures that could be in conflict with the National Historic Standards and city policy. If the code amendment is pursued I it is recommended that lan~~aqe be incorporated statinq that building expansions not in keeping with applicable biB~oric praservation standards be prohibited. In relation to the total amount of development in the dovntown. the effect of the text change is anticipated to be JIIinor. While reqrettinq the loss of the theater due to market consideraticns l staff supports the applicant's proposal~ We believe the conversion will be a positive downtown addition,. and in a location where increased pedestrian activity associated with a bootstore ~nd cappucino bar will be welcome~ Impact on Planning Staff Resources The Comprehensive Plan update severely limits the amount of staff time available for City-initiated assignments such as emendment of the Zoninq Ordinance~ For larger development applications, Council has authorized use of contract planners and has established a full cost reccvery fee schedule~ As a developcent CMR:1S7:94 t Page S application, a Varsity Theater development application would be & full coat recovery application ana assigned to a contract pla.nner. If the council directs st.aff to draft and process the zoning text amenc!ments requested by Mr. Keenan r processinq 'Will of necesaity mean the US9 or a contract planner. Mr. Keenan has agreed to treat his request as a full cost recovery application and provide the funds necessary for the contract planner. 8B'92'O'DPutOlf Direct statt to prepare the appropriate text amendments and ~efer to tha Planninq Commission and Historic Resources Boara consideration of appropriate text amendments to allow both seismic and historic presB--vation square footage incentives to apply in the downtown. The referral is reco~nded by staff with tbe understand inc; tbat Mr. Xeen~n 'Will provide the funding­ necessary to process this request as a full cost recovery application. Respectfully submitted, Manager, Economic Resources Planning ~~ Assistant city Manager ~!~, KENNETH R. SCHREIBER ___ Director of Planning and Community Environment Atta~~ents: Memorandum from Planning Department Letter from Reenan Land Company CI!R:157: 94 -----"--_ .. o CITY OF PALO ALTO I'IEMORANDllM December 3, 1993 TO: carol FROM; Ken SUBJECT: Sei§picIHi§toric Sites The city's Seismic Or-dinance cl£ssifies buildinclS in seismic categories I, II ~nd III, and they do not leave the category after beinq upgraded. Definitions are; category I Any bUilding elements; with unrair.forced masonry category II -Any buildinq constructed prior to 1936 with an occupancy load of 100 or more; and category III -Any building ccnstructed. prior to 1976 with an occupancy load. of 300 or more. The only category III building in the downtown CD-C 3rea is 525 university, and the bonus does not &pply because the buildinq excaeds a 3~1 P~~. Buildings zoned CD-C and categories I and II include: Approxinate Seismic Historic Building- !~m::f!~§ ~t~g2:ry ~.at§!gQ:t:t Sw.lsU:e feet Commef'l.t.s 525 Alma I 2 6,600 529 Alma I 2 6,2:ClO Has bee n strengthened 401 Florence I 2 2,500 Has obtained 25\ increa.se 520 Ramona r 1 4,14-6 Repaired 140 u.niversity I 2 1.2,500-Repaired 8 t adsb::I!!1 661 Bryant 205 Hamilton 456 Uni VerB i ty 480-496 University cc: Ariel 5errtie Fred Nancy seia.ic ~AteSilSU::l 11 n II II Historic ~iII:tB9or~ 2 2 1 2 9 Approxi-mate Building ~~ comments 10,000 1.8,000 10,000 46}000 He· ... Varsity Preaident Apartments o KE E~AX L.&.Xn (lO~II'A!\''''y February 15, 1994 June F!eming City Manager Palo Alto Planning Commission City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Dear Ms. Fleming: Please consider this letter as a formal request. for a zoning text change allowing owners of category I and II Historic Structures wf1ich also require seismic; retrofits to take.b2l.h available f,A.R. incentives rather than only one as currentlv permitted. The F.A.R. kf'lCentives for historical and seismic retrofits were created to help defray the costs and provide Incentive to property owners to preserve these unique structures. The uncertainty of the additive effect of these incentives on downtown square footage was unprecfictable at the time the zOf1ing was created. However. wfth the passage of time experience indicates very little new square footage of any kind. much less increments in histortcal buildings, has occurred. The cost of histOfK:allv and seismicarty retrofining t.:'1e Varsity Theatre is approximately $2,200,000. The incrementsl square footage over what is currentty ano"''e(j from F.A.R. incentives is 3,743 square feet. If allowed to use both F.A.R. incentives the costs par foot is $96.30 per square foot. if only one F.A.R. incentiva is allowed the cost per foot is $115.17. The difference is $18.87 per square foot which translates into approximately 28¢ per square frot per month of additional rent required for the added costs per foot. Although the 3,743 square feet T9quested is not even a blip statisticai'ly in the downtown L'lventory. it is rather significant in defraying the high costs of historic and seismic renovation. The Varsity is currently in need of both seismic and historic r-enovatfo.l1. The F.A.R. bonus is as.sent1al to accomplishing the renaissance of this superb building. There is no current kJgfc of creating the incentivB for eithe{ of these desired goals but not both. Furthermore. as you know. the parking demand is significantly kJwer with the proposed retail than tt.a theatre. Therefore, the issue of -intensification-is a non-issue. I I June Fleming Februa ry 15, 1 994 Page -2· o , I have Iook.ed et the list ot nine other bu!Jdings which could conceivably Qualify under the proposed text change. My guess is thet m3ybo a fraction of the 31~400 square feet of incremental footage if both bonuses were eva~able will aver be built. For example, I just finished a historic and seismic renovation of 529 Alma. I didn't add any square footage due to function end cost considerations of a complete new second floor. However, it the incrementsl bonus helps accomprish seismic and hmor;c rehabs then let's hope these buildings are saved. That's the g0811 Thank you for your attention to this request. Very truly you r., c?f. ~eenan, III Iwf i 0"