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Home My WebLink About0518.094TO: City of Palo Alto City Manager's Report HONORABLE CITY COUNCIL FROM: CITY MANAGER DEP.~TlIfENT: Planning aDd ComDlIIDtty EIt\'lrol1mrat AGENDA DATE: SUBJECT: REQUEST Novo. be< 11, 1'1'14 CMR:~18.94 '-'a..ibility Study for SiBglt Room OccapaDey (SRO) Hou.ing oi 753 AI ... St~t PNpartd b~' tb. Polo Alto Housing COrpilMltion (irlder Contract to the-Cit)' of Palo Alto ('('ur.ci! i::. r"'i\"!(;"~leJ lo r-:\ i:::',\ tr.c CDmrr,cnrs (T ... ,m the l'!a..rming Comf11is~in!1 and the f.ltLa,;r.ed report ii-om th~ Palll A.lt(1 HOl.!.,in~ CC':yo,..'rJtion (r ... \11C'} em the "F.:.asihility of S:ng!e l{c.."Om O.:wpanc ..... {SRO) HOlt;in~ DeYc-1L'pincl1t at 153 Alrn~ Street" Direction should b-e givCTI :0 staff and PAHC as 10 the nt".'\1 steps. 10 be taken, RECOllfMENDA TIQ;'\'S St2ff Te(',on" .. ,'.nends that tll!: Couficil: I) Appro ... C' in coocept the acqutsitic.n of the 753 Alma Street site; for dneiopm<nt of SRO-!)-p< hwsing; and 2) Direct staff to ~ the appropriate environmental documentation in coot'crmanct with CEQA and NEPA to permit exeroising the option to purchase; and 3) Direct staff to prepa:e • funding and dtveJopment agreement with P AHC to !) assign the option to PAHC, 2) provide $650,000 for PAHC 10 purchase [he site. and 3) provide f\mding f{)T preparation of the entitlement application (Planned Community zoning). including environmental review, and financing applicatioos. roUeY IMPLICATIONS The key policy issue is; the need fo~ additional housing i!1 Palo Alto, particularly for very low income working Lndi\'iduals, arid me po~sible in1PClCt sllch housing may have on the existing bus.inesses in ~ area. especially the automotive service busincs.'ies, The attaChed Pq:t J 014 • \ 8 .-~- .. ___ .~.~tu o Planning Commission staffreport, dated October 26, 1994, pro\'ides additional discussion on the p",fcrred proj""t. EXECUTIVE SUMMARY PAHC has been pursuing a location for SRO houslng sillce 19'11. TIl< "Pportunit)' to consider the :;ite at 753 Alma Screet 8!'QSC during considerntitm of a corr~et'Cial project at lQSQ Anstradero Road. The Council se<:ured • 00< year option on tile 753 Alma SIre<' property to allow time for prepa.""Ition of a feasibtlity study on the lmp.acl~ !.nd JX~ible design ofSRO housing. PAHC, v.i!h \he assistar>.ce of1l1Chitect Rob Wellington Quigle~' and other COIISultanL', has completed the study. The ottach«l rep<lr1 from PAHC titl«l "Feasibility of SRO Housing Deyelopm<nl " 753 AI!lU! SOttl" and daled October 14. 1994, finds that comtruct;on of SRO housing on th, ,ite il feasible and "ddI= the known key impacts elf the preferred alternate' project The Planning ("l';r;mrssinn stall report and the PAHC study address the issu~ ofprojC'Ct de~ig;n, f'J..'1l(""S., nlli~e. j"'I.:irj.:m~ a'ld solar access. The feasibility stud)' was reYlcweti by the P:3.ru1in~ ("(1mmi:,~[(·ri :3\ their !T1'{>,:IITle' ilf Octobei 26, 1994. c\l1e Commlss.':on. O!i a 3 t() '2 \Wt.:. r~'\.\:i',m'':l,dd i~2.\ ~h;' C,-,;\\"!(~I (a) approve in concepl the C1cquisilior'. of the 75:{ Alrl!il. Slr ... ·l·t :;..i~ .. ' L'cr d .. H:1[lfm,::-~t I:>L~.R() type housing and (b) diiect staff to prepare an(~ 't"ri.r,r 'N,C',.., h' Iii'':: L'r'!.ll,ci\ d,..;:tm1<m:.:Hi,)n necessary fOT e;..:erdsing the option :0 purchase Ihe site, Cc':nmi:,,,,iL'rlt":-5 S':'hmidl, C~~s.;1 and Ojakian vote-d in favor, Glazier and Beecham oppos.~d Cnmmis.sioner ("Jlazjer was opposed be.cause he felt that further stud,\' was nt:eded on <;(:"\-'eral areas Df concern. particularly the displact;d parking. Commissloner Beecham ..... <i-<;, l)f'P,,)5.Cd ~,-ause he dij not believe thai the r~identiat and ~u~omoii\'e uses wen: CoJmp{1l~bk Cornmis,siont'f"S Schink and Carrasco were absent. The foHo~ing discussion Is tn ~ponse to concerns raised at [he: Plan.rling CC'mmission review: 1) A concern that new SRO ho~ing m.8)' compete for tenants ,",th \he pnvately o''''l''Ied Palo Alto and Craig Hotels, The Palo Alto HOlel, 425 High S~ 59 rooms, and the Craig Hotel, 1M Hamiltoo Avenue, 63 rooms, currently mlt rooms on a daily or weekly b .. is for appro><imately S18 per night. The (wo hOlds primarily >--no a transient market, although rome of their =idents "'" long tc,"". A profile of SRO residents prepared in 1989 by a SUnford cla!~ found thaI o,;'er 53 per~I;:Ilt of the residents interviewed paid Transient Oc'"panc)' Tax. The propos«l SRO will be n ...... will have kitcbens and bathrooms in all units and, because of the tax credit financing, will rent for an average of S405 per month, or approximaleiy S 13 .50 per night, The SRO is inlended as permanent ..... or.er housing and, due to the requirements ofta.li: credit financing, rental of the SRO units \\ill ~ on a monthly basis. In order to rent a unit. arl application proce~s \~'ill be n:quired, income verified, references checked, etc. The 1)]>< of housing and (ho clients for the various dO\\'Jltown housing projects, including the L)1ton projects, the Barker, CMJWI8:!14 . , , 2) -.--_\ Channing House, the Hamilton and others, will each be different and \\ill Ii:1 a diffe,.,,, niche in the variety of needed housing. Marketing srudies, prepared for P ARC in 1992, indicated that a market does exist for a variety of housing types, including permanent SRO housing at affordable reets. 'This conclusion is confirmed by the experience in San Diego, where the construction of over 2,000 new SRO units (both by the private sector and with public subsidies) has shown that the demand far exceeds the supply. As expected, discussion also centered on the parking issue. Whole Foods Market currenUy reets the site, :m a temporary basis, for employee parking. About 40 cars park 00 the site on a daily basis. Of particular concern is where these employees will park if SRO housing is built. On-street parking in this area is very limited, especiaily for all day parking. Some vacant sites exist that might be secured by 'Vholc Foods for 3dditional parking, and some of the employees may <;:yen b.eccme residents of the SRO. Hmvever, it i5 likely that some of the <.:ars now p:l-rklng on the 153 Alma Street site will reJoCll.Le to street par!o.:ing, Thi~ will lx the case regardJess of what project is constructed on the sile. TIle project provides parking to :<;atisfy its OVI'11 demand. At.5 parking spa~'es per Ut]lt. plus 12 visitor spac::-s and 8 ~paces for the lea«,ed office space (total of 73 spaces), staff and PAHe bcHcve that the projec! will have some exc':;;';; parking. However, parkins constructed with tJ.)i credit fmandng musl b=:: for the e.~_clusi\'e use of the SRO residehts. 'Financing for any additional parking beyond L'1at required by the proj~t ,,'auld have to come from other SOUiC.es. Such sources might include a SOFA parking assessment district, an e>'1ension of the dOV.l:tO'.'l-TI assessment district Qr City general funds.. The fea'iibHity stJJdy induded a preliminary look at including an additional, third level of parking below grade. A net g-ain of approxiru&tely 43 spaces could be added with a third I<ve!, at • cost of $15,000 to $20,000 per space, or approximately $650,000 to $850,000. To help alleviate any parking problems that the project might create, PAHC and staff could explore the fellSibility of two ideas; 1) giving preference to people who currently work in Palo Alto but do not live here, and 2) limiting rentals to person' without cars if the available spaces in the project life fuji. FISCAL IMPACT With completion of the SRO feasibility s~Jdy, the City will have expended $149,328 to option the site and \0 investigate its .uilability lor SRO housing. In order to tomply with CEQA and NEPA, preparation of enviroruneotal documentation prior to the Council's decision 10 exercise: the purchase opti.on will be required. The option to purchase will have to be extended beyond January 6. 1995 at a monthl)' cost of S5,416.67. If the Council appro .... es.. in concept, the purchase of the site, staff will return 10 the COUJ1cil in December with a Budget Amendment Ordinan,,,, appropriating additional City HOUSh,g Re5erVe Funds for the option extenslon. CMiW18,i/4 • . , .. ! I .. I . I I o Site purchase will require $650,000 in City housmg funds. If the SRO housmg alternalive proposed by P AHC L, ultimately developed, a total City subsidy of approximately $2 million (~Iuding the land cost) will be required. Sources for the City's ftmdmg "ill ~Iude !be Cornmm:iaJ Housmg Reservo Fund and, possibly, federal HOME fimds. The City's subsidy will lev ..... g. about $4 million of Low Income Housmg Tax Credit investments and • $l.5 million bank lear, to make up the Iotal estimated project cost of $7.5 million. ENVIRONMENTAL ASSESSMENT. Feasibility studies ore stalutorily exempt under Section 15262 of the California Environ=ta! Quality Act (CEQA) Guidelines. However. exercise of the option 10 purcha'" ",iil require appropriate environmental review. Additionally, environmental review under the National Environmental Policy Act (NEPA) wiJl be required for federal fimdmg, such as HOME funds, which may be sought in the future. ~;TEPS FOLl.QWING ~PROVAL Should the CO\JJ1cil decide to approve in concept the purchase of the site, staff wili 1) prepare for Council action in Dec~mber ~ Budget Amendment Ordinance appropriating additional City Housing R-esrrve Funds for c:o.1ending the option, and 2) prepare for Coun~il action, after the fiTh! of the yCll!, ~n\'ironm¢ntat documentation fOT p~rchase of the property and a de .... elopment agr~rnent witb PARe for design and construction of the project. Followirig purchase, FAIle will fully develop rhe project design and process a Planned ,Community zOIle application :hrnugh the City. ATIACHMENTS Nom:. PREPARED BY: Jim Gilliland DEPARlMENT HEAD REVIEW: j1~ .1£z4z KENNETH R. SCHREIBER Director of Planning and Community Environment CITY MAt"AGER APPROVAL: CMR:S18~ Page 4or4