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RIUlUEST
City of Palo Alto
City Manager's Summary Report
HONORABLE CITY COUNCIL
CITY MANAGER.
January S, 1995
DEPARTMENT: PIlIIIDIDc and
Commllility Envlromnent
CMR:l00:9S
FOl'Dler Maxlmart Site and the Contiguous, FOl'Dler Railroad
Right-of-Way -3200 Park Boulevard/J40 Portage Avenue
This is an infonmtioDal starus report. No City Council action is necess ary. based on the
April •• 1994 City Council action identified in the Background section o(!he attached In
Depth staff report. Staff anticipates that !he Plaooing Commission will consider the irems
discussed in this report on February 8. 1995 with City Council review likely in March
1995,
. The items 10 be coosidered by !he Commission and Council include:
1, ExleJlSion of !he noo-residential use amortizdtion schedule for !he former Maximart
site;
2, Amendment to !he Comprebensive Plan designation o(!he former railroad rigbt-of
way from Single-Family ResidentiaJ and Ugbt Industrial 10 Multiple-Family
Residential ;
3, AmendmenllO!he property zoning of !he former railroad rigbt-of-way from R-t
(Single-Family Residential) District and GM-B (General Mannfacturing) District
10 RM-30 (Multiple-Family Residential) District;
4. AmeOOmeoI 10 !he Zoning Ordinance leX! 10 allow for parking lots {as a
conditional use) on former/abandoned railroad right-of-way properties loca!ed in
RM-30 and RM-40 Districts; and
S, Consider a companion coodiLooal use permit and design review applicalion 10 be
filed by !he property owners (the design review application w11l be reviewed by
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!he Architectural Review Board ()IJ. February 16, 1m with t"" ARB's design
recommendations 10 be Included ill the Council'. March review).
The property owners hove indicated 1hey are no! willing 10 enter into a developmenl
agreement.
RECOMMENDATIONS
AJ noted above, this is an infurma60nal status report and no City Council action is
necessary.
POLICY IMPLICATIONS
The above actions include an amendment 10 tbe Palo Alto Comprebensive Plan.
Therefo<e, this action woold have dh-ect policy implications for the City thaI will be
.'lalxlrated on in future staff reports 10 the Planning Commission and City Coon";!.
EXECTITlYE SUMMARy
On April 4, 1994, the City Council discussed the non-residenlial amortization scbedule
for !he former Mnimart site (Fry's Electronic. and other non-residentiai uses) and !he
inco<poration 0( the adjacent, former railroad right-of·way inIo !he zoning for the former
Maximart site. AI 1lW: meeting, Council voted 10 direct !he Comprehensive Plan
Advisory Committee (CPAC) 10 assume continued commercial nse 0( these two
properties, through !he durationo(!he new C<>mprehensiv. Plan. SecondIy,!he Council
directed CPAC 10 identify .alternative housing siJes and develop inceDlive
poIiciesIprogra for ronstruction 0( housing units In addition, the Council directed
staff 10 oegotiate with the property owoers an amortizalioc. extension and/or deve10pmenl
agreement and property upgrades.
Consistent with Council direction, the following actions and activities have been taken:
I. A California Avenue 10 Venrura Neighborbood Workshop was beld by CPAC in
April 1994. Many of !he workshop p21ticipants Celt strongly that !he former
Muimart site should he nsed primarily for housing and the adjacent former
railroad right-of-way be maintained as an open space buffer ar..) potential
transportation corridor.
2. The Planning Commission and CPAC bave presented recommendations for
Comprehensive Plan Community Design Element Policies and Programs. Policy
recommendations confirm that in !he long lerm, !he former Maximart site should
be nsed primarily for housing and that • program he developed addressing use of
this site in the DeXlIS years, including the continuation of retail activity. CPAC
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recommended !bat !be former railroad right-cf-way be maintained as an open space
bufferlpotenl:i.al transportation corridor, with surface parldllg being an accepIable
interim use.
City staff representatives bave met with :be property owners and representatives
of Fry's Electronics 10 cf:scuss extension of !be non-residential use amortization
scheclule, several p~lng options (mcludlng a devel<Jilmetll agreement) and
possible property improvement!. The property owners request<d an extension of
IIie DOlI-residential amortization sohedule for 20 years beyond the year 1999
(cum:!ll commercial use termination date). This request would eslablish • new
commercial use termination schedule dale of 2019.
A neighborboocl meeting was held on November 2, 1994. For the JOOSt part,
oeigbbors who aaended expressed concern and opposition over extension of !be
non-reside!llial use amortization !chedu\e. A summary of meeting CQmmeIlIS is
attached. .
fiSCAl, IMPACT
Fry's Electronics is. significan! sales laX generawr for the City. State law precludes
discIol:ing the actual amount of sales laX which Fry's generates, but i! is accurate 10 say
that they contribute significantly 10 !be City's sales tax reve!llle$. If commercial nse
canno! continue beyond 1999, !he property owners bave indicated that, for Jegalliabilily
reasons, they would not redevelop !be site with hooslng until the ground-i."&ter
comamination problems are resolved, whitb is likely 10 toke 25 or more years. If !be site
is 00( redeveloped, the City would el<pCrience !he loss of the sales laX revenne, wilhout
any increase in property laX and other revenues associated with residential development.
ENVIRONMENTAL ASS!§5MENT
An enviromnental assessment will be prepared for the project in compliance with the
California Enviromnental Quali!y Act. Sec In-Depth report for discussion of possible
enviromnental issues.
PREPARED BY: Anne Moore and Paul knsen. Contract Planners for the City of Palo
Alto
DEPARTMENT HEAD REVIEW, ~Kl'd;('LLY4;>,
eTH R-SCHRElBER
Director of Planning and
Commuiliry Environment
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CITY MANAGER .tJ>PROVAL'~-
. STROJNY
Assistanl: Manager
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City Manager's Report (In-Depth)
S1.JB)ECT: Status of CoUDdI AsslgmMul reI EIIensIon of Noo-Resldeutlal
Amortl!ation ScbeduIe roc the FOnMr Mada,art Site (Fry's
EIectronks} and Use of the CoolI&uoos. Fonner Railroad Right-m-Way
-3200 Park BouIevard/340 Portace Avenue
RF£QMMENDADONS
This is an informational sIalu5 report. No City CounciJ action is necessaty based on the
April 4, 1994 Cooncil aCtion identified in !he following Background section. Staff
andcipates !bat the following interrelated KOOns will be scheduled for Planning
Commission review on February 8, 1995:
1. Extension 0( the non-residential use amortizalion scheduie for Ihe former Mllimart
site;
2. AnJendmeDlIO!he Compre'-..ensive Plan designation oflhe former railroad right-of
way from Single-Family ResideDlial aad Light Industrial 10 Multiple·Family
Residenlial;
3. Ame1Idmen!.1O the property zoning 01 !he former railroad right-of·way from R·I
(Single-Family Residential) District and GM-B (General Manufacturing) District
10 RM-30 (Multiple-Family Residential) District;
4. AnJendmem 10 the Zoning Ordinance Iext 10 allow for parking lots (as a
conditionalUJe) on formerTabandoned railroad righl-of-v.'3y properties located in
RM-30 and RM -40 Districts; and
S. Consider companion conditional u..., and design review applications filed by the
property OWIlCrs. The desip review application will be considered by the ARB
011 February 16. 1995 wllh the ARB's design recommendatiom 10 be included in
!he C<luncil's March review. .
BACKGBOlJN)
CRy CooneR Direction of April 4 1994
AI the regular meetings 0( March 7,1994 and April 4. 1994, !he City Cooncil olSCUSsed
!he non-residential amortization schedule for the former Muimart (Fry's Electronics) site
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and !be incorporation of !be adjacent, former railroad righ!~f·w.y into !be zoning for !be
former MaxiInart site. Discussion of Ihis item bad been initialed by three members of
1he City ~i1 because of ihe foilowing reasons:
I. Current zoning ordinallce provisions require termination of !be former Maximart
site', IlOO-l'C'lideutialuses in 1999.
2. Fry', EIcctronic:s ownero Deed 10 roake • decision in !be near turure regarding their
locatioo for !be next 25-30 years.
3. The presence of IOxic groundwater that migrates under the site c:001d make
deveklping a residential re-use of the property difficult in \he foreseeable turure .
.(. The property owners of the former Ma.<imart site ha"e purchased the adjacenl,
former railroad right4·",.y, which coold address the Deed for Fry', employee
parking.
FoIIoIl'ing public testimooy and a lengthy disc<Jssion, the Council, on a VOle of 6-1 (2
absent) adopted the following motion:
). Direct the Comprebensive Plan Advisory Committee (CPAC) that, for the duration
0: the new Comprebensive Plan, COIJIinucd cornmer::ia1 use of the 10.:1ner
MaJtimart property (and adjaceO! former railroad righ!~f·way) shoold be assumed;
2. Give CP AC the task of Wentifying alternative housing sites and deveklping
proposed policies and programs 10 provide incentives 10 owners of Ihis, and similar
properties, 10 actually COOStrucl bcusing units;
3. To refer the issue, after staff negotiation of an amortization el!ension and/or
development agreement, 10 the P\anning Commission for aPl"opriate public
hearings and deveIopment of recommendations and request m., presence of the
Planning Commission at the CPAC design workshop of April 23, 1994; and
4. Dir~ staff 10 negOliaJe with the owners of the former Maximart site the specifics
of clteOOmg commercial nse of the site beyond 1999, upgrading the physical
appearance of the site, and mitigating impacts of the site on nearby properties.
The starus of follow-up 10 the Cily Cluneil action of the April " meeting is provided in
the foIlOII.-ing Discussion section of Ihis report.
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Follow-up lo CIty CouocD DiredWn
Rrfgtjqrylri/l Iq Cqmpr.fJesj.., PIwt Update -at:y Q?uncil Djaction !g cpde
Since !be April 4 City Council meeting, there has been some significant progress on the
Comprebemive Plan Update. On April 23, 1994, CPAC sponsored a design workshop
Ie> study furure land lISe, tnmsportation, and urban design in the "California 10 Ventura
Neighborhood". an area exreodin& from C&Jifornia A vonuo Ie> Fornando Avenue and
bounded by EI Camino Rea! and the CalTrain tracks. The workshop was attended by
85-90 participaDls, City staff and coosultanlS. The findings in !be workshop were
published in June 1994.
CqooIjrwri"" !tit ... Proomy OWl' OIl Amortizaljon ExJension qn4 ProPerTY /mprovemmt.F
Coosistent with the City Council's action of April 4, 1994, staff has met willI WSJ
~, property owners, and Fry's Electronics representatives 10 discuss oxrension
of the non-residemial use amortization scbedule and possible property imprcvemeDls.
The property owners have requested an exrension of the non-residenfilll amonization
scbedulc for 20 years beyond the year 1999 (cu' rent commen:W use termination date}.
TI.i$ request would esf>1bIish. new =W use termination schedule date of 2019.
The 0Wll&m indi<:ate thaI this time frame wcuId be coosisteDt with the time periods
established UDder the currently pending lease agreemell1 with Fry's Electronics and with
their swed loDg-fenn intention 10 redevelop the property with multi-family housing, after
cleanup cf the gt!lIIDdwater cootamination thaI is migrating under the site.
The proper\} owners have also agreed thaI certain improvements 10 the property would
have 10 be D!lIde if!be IlOIl-COIJlIJleW amortization period is exrencWI by the City. WSJ
Properties has hired a Ioca! arclJiIect and landscape architect and has developed a
proposed improvemeo! program 10 be inc<xporated iDlo conditional use permil and design
review applications.
improvementS being proposed by the property "woelS include:
• New paIIUng l<lt striping, surfacing and circulation. as weD all 3SS<lCiated grading
Ie> improve site drainage.
• Establishment of an employee parking l<lt <l!l the adjacent former railroad right-of
way (primarily for Fry's and Cable Co-vp employees) with new employee access
10 the rear of the building. This improvement woold help reduce the amount of
employee vehicles parked <l!l 10cal City ,,~eets.
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• New Iand"""Ping and lighting as part of the prCJ!'O""l OII-si~ parking and
ci."CIlIalioo plan. I ~ndsc.;iing is also suggested 10 assist in screening the existing
commercial building from the rear yards 0( the Olive A.enue residences.
• An eigbt·root high masonry noise wan along the northernmost boundary of the
~ raiJroad right-of·way, 10 reduce the amount of noise and gJare 10 Olive
Avewe residences.
Proiwt:J OwMr Ikac!io!! 10 Potemja] Deye~ AgrmnenJ
WSI Properties representa:ives have indicated that they couJd not participate in a
deveJopmell!ag;'l:eII1eII! tying the amortization extension 10 a long-~rm Fry', occuponcy.
Tbclr position is that wbile they must provide significant si~ improvements now, they
cannot guaran~ occupancy by Fry's for the extended amortization period.
Summ4r.;t q{ Ngyprbg 2 1994 Ndfhborhggd M«ti1!.
In order 10 obtain neigbborhoodll'e'lidell! feedback on property use impacts and site
improvements, a neighbo<hood meeting was hosted by Cily staff OD November 2, 1994.
The meeting held al the Veullm!. School was attended by twenty-two people, coosisIing
primarily of area residenlS. The pu!p(l5e of the meeting was 10 solicit COIlIDleuIS OIl use
conrerns and i!npacI5 and 10 obIlIin feedback OIl possible property improvements. A
summary 0( nieeting comments is attached. aloog with. meeting a~ list.
For the most part, neigbboB expressed COD<:ern and opposition oyer extension 0( the
non-residential amortization period OIl this site. Several neigblxn believe that the
property should be redeveloped afrer the currell! uses are due 10 terminate in 1999. Some
neigblxn suggested that Fry's Electrooics find anoIher location, if additional space is
needed 10 expand.
FISCAl· 1MrM:T
Fry's Electronics is a significant saJes tax generator for the City. State law precludes
disclosing the actuaI amoun/. of sales tax which Fry's generates, but it is accurate 10 say
that they COOlribute significantly 10 the Cily's saJes 1aX revenues. The property owners
have indicated that, for legal liability reasons, they would not redevelop the site with
housing un!iI the groundwater contamination problems are resolved, which is likely 10
take 25 10 30 or more years. Ii the site is not redeveloped. the Cily woold experience
the loss of the saJes tax revenue, without any increase in properly tax and other revenUes
associated with residential deyelopment.
ENYJ1tONMENTAL N§R'!SMENT
The project will be subjed 10 the provisions of the CaJifomia Environmental Qualily Act.
Coosistent with CEQA guidelines. an initial environmental study will be prepared on the
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appIic&tioas. Key issues 10 be reviewed f<>r impacts and mitigatiOns include the
1bIlowiDs:
I. Land UseIHousing
2. Transportatioo!C
3. AestheticsNlSlI.O! ImpacIs
4. Noise
S. Drainage
6. 0e0I0gy1Soils and Groundwater
1. Public SafetylServices
\TIACJJMF.NTSIEXHIB
Map showing subject property boundary. surroundIng properties and streets
Sumniary of November 2. 1994 Neighborhood Meeting and meeting attendance sheet
CC: Archi!A:>cIuraI Review Board
Planning Commission
Chamber c( Commerce
WSJ Properties
John Fry. Fry'. ~
. Attendees at Neighborhood Meeting
Venlura Nelgi1borhood Association (Odile Disch Bhadkankar)
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Sum...". or CORlIDCD!> rro .. N.igllborbood M .e.in, bold DD N ovcmbu 1, 19')4
A oeigb1>orhoocl meeting wu held on November 2. 1994 10 eliseu" tlI< F'ts Elccl1o~
u .. and tlI< statLi' of extending :he eoaunerclol usc amortizatioo pcrio<! fuc the Fry's
(1Ormor MaxIman) sile. The purpose of~'" meeting ,. .. 10 pro"';c!e the ocighlxxhood
with current information 00 Fry's Elcruonie< and of the property 0,"""" plans fuc the site
and canliguous rIllroad rish! of way. The meeting was aT", inlendcd '0 sor1cil c~nLs
00 uae concerns and posstble property improvement •.
The meelins ..... DOIiced 10 property OWDCtl and residents within 300 (eet of:he site, in
additiol1 I<> those in~ in the CI'AC CaI-Veo<u<a Workshop (appro'""'lte!y 250
ooti=). The meetins _. attended !ry 22 neighbors. A ,ummary of meed og comment! is
provided as follows
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City Council has already made • decision in favor of Fry'.. The City is just 's0in8
Illrougll the motions'. This meetlog IIld the P''''''''' is meanLngless.
Neighbor. already gave ;".put on til •• property as part of the CPAC Cal-Ventura
Workshop. Residential L!SC of the: site: is fl\loced. Workshop c:o~nls included
tho "'cas oeed for 'Iow..:ost' housins.
CP AC ..... told what 10 rc:cOl!l/lleJ1d for this site by the C~y COUIK'K
Neighbors have waited patiently fuc the site \0 be redeveloped with rcoidcnuat use.
City ""ould stacd by ii', oommitment.
Neighbors are aogcred at bow !he City has isnored the neighborhood.
The proposal and the procC5. strongly favor. Fry', and .LSCrim",at., again.q smaU
busi .......
Neighi>ori wore angered tho! no representative from fry's wu present. It leaves
the impression that this meeting and 1M prOCes5 is OO! inlportant to Fry'.
A more inlcns.~ ~a! use of the site would destroy Ihe neighborhood
E)densioa of the commercial use imortization period. <xpinding fry'. and
develoj)ing I par1Jr>g lot on t.1Je r.,lroad <ish! of way would creole an 'island' of
te$idential use along Olive Avenue. Many property o .. ners bought bouses aI~ng
O!lve Avenue knowin8 that the Maximarl .ite waul d be uhimatcly redeveloped
with a fe!Udcntial land use.
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Otive "venue is 1Ir~ irnpa<led by d.~very tnock traffic and diversions This
cond"lIions w""ld only incr .... with tile •• "",sian of Fry'l.
The p<OpOSaI is 110( re<pO!lsillO to the recornmernf.oon. for the DciShborbood
presented ill !he CPAC Col· Ventura Workshop.
Propett)r Ownerl have Lriec! 10 seD their born .. along OC",. Avenue but have been
unsueces.sfirl because 0( tllc existing ~mmercial u!.eS
n...e is DO land Ie!lIO develop from California Avenue souo. 10 Char1estolL The
area is already heavily develop«! .rnl heavily impacled Tbe street. in the area
were !lOt designed 10 carY)' (he trafl"P< from c,", .. ;"mB uses.
Neighbors «pressed concerns ~~I!l it the CiI}< CJ<lends the commercial use
amortization period. it stiD does DOl gunnl .. that Fry'. win stay at this 1ccaf.orL
Replacement of the raClTIry with ,"other similar. comm..-cial use(s) coold be mOre
impaCling 10 the ncijlhborbooc!
All extension of the commercial use amortization per~ cook! cause pressure for
more intense commercial development ill lhc neiShbo<~ooc!
Wby can' Fry'. pu~e otller. more suitably sized sit ... fur their expansion ""eds'
Other site. are .""la'le along EJ Camino Reo! (Il0l ne=sarily .. Palo Alto}
It is time fix Frj's to mOve as\hey have out-grown this sile.
Iftbe commercial use amortizaOOD period is extCllded. it s!:-ou!d renee! a shone'
period ofum<! (exlend only .. long os Fry', OCCllpies this ,;tei
Fry's has bee. I be:>efit 10 the area by promoting busin<:>s for other mcrohams.
'The site is perfectly safe for eveo • day-care use. The CiIy's environmental
consultant eve. concluded I1Il1! (11. ,it< is not a hazard (9011" geokll!)l and
ground_I'" ....... ).
Fry's knew thaI their lease would end in 1999 arnl thaI the site was limited b) the
C"1f)"s eommercial' use amortization. n'lquir~ents
Existing Fry', operation oreales noi.<e, light and glare 10 th< residCTIl! in the a,ea
Thls is primarily due to deti'lleJ)' vehicles ulitizing Owe Avenue and hour:>. of
delNery.
The CiI}< Cound has grnnted extensions 10 the arnon; ,.ti<ln period' fo<-other
commerciaf uses in the aru only k) have the uses ci1anse 1m! create more irnpacts.
to the ncighborl1ood.
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OIhct COIIlIY1"fcial uses zl<Jng EI Qmi"" Real have compr .. d wil~ the City',
lItlOItization requirement., Wby can~ Fry"?
Has !he Cily Alt~ been "waived in the roview of this pcop0saJ7 What
euvironmentaJ review wi1I be ~ by the Cily 10 .. <eoo the amortization
period. '
The e>derior of the bu~di"8 should be re-Uce<I
hr!r.ing could be accommodated by rcmovins one of the bui1dinSS This could
reduce the DOCd 10 crC1le par!r.ing Cn the railroad rigl1t of ... y.
The I'8Ilroad riSht of way should be u.ed fOr open .pace and ~t."'" use, 001 •
parking lot
Ac.cess Ie> Ih. site JboUld be cllanged !O rellett <be CPAC Cal-Ventura Work,nop
=ommcndalioos. Truck traffic along 06ve A venue should be reduced or
eliminated. .
ee.e!opment oftbe f1Illroad right of way could create oome >ocurily problem< for
Fry'. and the residents along Oliw Avenue Creates an or .. wher. people couTd
loiler, ,
property owners 1lOI< that there is need for ne'" 1andscaping, I r.oise barrlcrlwall
along ·the rear of the bu:1dinS and some bu~ding improvemenL. thilt do no! involve
majOi' renovations
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