HomeMy WebLinkAboutStaff Report 2607-6521CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, August 17, 2026
Council Chambers & Hybrid
5:30 PM
Agenda Item
A.2100 Geng Road [24PLN-00356 & 24PLN-00357]: Determination of Impact Fees Following
Fee Protest
CITY COUNCIL
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Planning and Development Services
Meeting Date: August 17, 2026
Report #: 2607-6521
TITLE
2100 Geng Road [24PLN-00356 & 24PLN-00357]: Determination of Impact Fees Following Fee
Protest
RECOMMENDATION
This report is informational and does not require action by the City Council.
BACKGROUND
On March 16, 2026, City Council approved a Site and Design application, Conditional Use
Permit, and Vesting Tentative Map for development of 145 for-sale townhome units located at
2100 Geng Road. The effective date of the approval was April 16, 2026, corresponding with the
effective date of the related Park Improvement Ordinance No. 5696 for project improvements
located on City park land.
A March 16, 2026, supplemental report informed the City Council that the applicant had
identified a potential issue with the calculation of Parkland Dedication in-lieu fees and intended
to file a fee protest pursuant to the City's fee protest procedures while staff evaluated whether
recent legal developments warranted a revision to the fee calculation.
On May 13, 2026, the applicant submitted a timely fee protest pursuant to Palo Alto Municipal
Code (PAMC) Sections 16.64.060 and 16.64.070 regarding the impact fees applicable to the
proposed residential development, which includes 36 detached units and 109 attached units.
The fee protest requested that the impact fee calculation recognize the site’s existing baseline
condition, including demolition of the existing 191,900 square feet of office gross floor area, so
that the project’s park-related fee obligation reflects the net new impact generated by the
proposed development (Attachment A).
ANALYSIS
Pursuant to PAMC Sections 16.64.060 and 16.64.070, an applicant may protest the imposition
of an impact fee by submitting a written notice identifying the factual and legal basis for the
protest. Following review of the protest, supporting evidence, and any additional information,
the Director of Planning and Development Services issues a written determination establishing
whether the fee should remain unchanged or be increased or decreased.
FEE CATEGORY PREVIOUS FEE APPLICABLE FEE CREDIT NET FEES DUE
General Government
Library
Public Safety
Community Center
Parkland Dedication /
Parks Impact
Public Art In-Lieu*
TOTAL $ 6,344,604.55
*Based on estimated construction valuation of $58.5 million, per application submitted 2/12/2026, and not
included in previous total fee calculation.
adjustments to apply the appropriate residential impact fee rates, and establishes the impact
fees due for the project based on the information currently available to the City.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
Ashley Weinstein-Carnes
D (415) 293-6470
aweinstein-carnes@coblentzlaw.com
May 13, 2026
VIA E-MAIL
Jonathan Lait
Director of Planning and Development
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
Jonathan.Lait@paloalto.gov
Re: 2100-2400 Geng Road - Impact Fee Credit
Dear Director Lait:
We represent Strada Investment Group in connection with the approved residential project at
2100-2400 Geng Road (“Project”). We appreciate the City's continued work with the applicant
team to finalize the Project's impact fee calculation.
Consistent with Palo Alto Municipal Code Sections 16.64.060 and 16.64.070, this letter is
submitted to document our understanding of the approach to calculating fee credits as
discussed with the City Attorney's Office, and to request an updated determination from the
Planning Department of the impact fees due for the Project.
Project and Applicable Fee Framework
The Project will replace the existing office improvements at the site with 145 new residential
units, including 36 detached units and 109 attached units. The Project submitted its SB 330
preliminary application on July 8, 2024, and the requested fee determination reflects the
applicable vested FY2025 fee schedule as of that date, except that, at the City Attorney’s
Office’s request, the park fee credit has been calculated using the FY2026 commercial parks
impact fee rate.
The impact fee calculations should recognize the site's existing baseline condition, including the
191,900 square feet of existing office gross floor area to be demolished, so that the Project's
park-related fee obligation reflects its actual net new impact after accounting for demolition of
the existing office buildings. In practical terms, the existing office use already generated park-
related demand, and the Project will remove that demand when the office buildings are
demolished; that reduction should be taken into account when evaluating the new park demand
attributable to the redevelopment of the site.
Jonathan Lait
May 13, 2026
Page 2
This approach is consistent with the City's treatment of the Project's other impact fee categories,
where Planning’s fee calculations already appropriately recognize credit for removal of the
existing office space, which aligns with the broader legal framework that impact fees should be
based on the Project’s net new impacts.
We also want to highlight that the Project will add meaningful residential open space where
none exists today and will be immediately adjacent to Baylands Athletic Center. While we
acknowledge that the Project's on-site open space will be private common open space for the
new residents and will not substitute for City parkland, we offer those details as further context
for why it is appropriate to view the site holistically when finalizing the Project's park-related fee
obligation.
Requested Updated Determination
Based on the approach discussed with the City Attorney's Office, Strada understands that the
Project's fee calculation will include a credit of $3,781,663.92 against the Parkland Dedication
fee. That credit reflects the City's published commercial parks impact fee rate of $19,706.43 per
net new 1,000 square feet as applied to the 191,900 square feet of existing office space to be
demolished.
With that credit reflected, the Project's total net fees due are $6,404,414.03. This total is
calculated by applying the FY 2025 fee schedule in effect when the Project's SB 330 preliminary
application was submitted, assigning the single-family rate to the Project's 36 detached units
and the multifamily rate to the remaining 109 attached units, consistent with City direction, and
applying credits for the demolished office space.
Process and Next Steps
We respectfully request that the Director issue an updated written determination under Palo Alto
Municipal Code Section 16.64.070 confirming the impact fees due for the Project consistent with
the calculation above.
At this time, and assuming the City is in agreement with the above calculations, we are not
requesting an informal hearing. However, we are available for an informal hearing if the City
determines that one is required or appropriate under Palo Alto Municipal Code Section
16.64.070.
* * *
Jonathan Lait
May 13, 2026
Page 3
We appreciate the City’s collaborative work on the Project and this issue specifically. We
believe this approach achieves the right result for both the Project and the City by recognizing
the site’s existing baseline, ensuring the fee obligation is appropriately tied to the Project’s
actual net new impacts, and allowing much-needed housing to move forward quickly and
feasibly.
Sincerely,
Ashley Weinstein-Carnes
Coblentz Patch Duffy & Bass LLP
cc: Albert Yang, Assistant City Attorney
Steven Switzer, City of Palo Alto