Fry’s site owner reluctant to redevelop just as city’s NVCAP costs may escalate

August 16, 2019 – Palo Alto Matters

The North Ventura Coordinated Area Plan will return to City Council for endorsement of an expanded planning process for the 60 acre area surrounding the Fry’s Electronics property. The Fry’s Electronics site, a 12 acre parcel at the core of the study area for the NVCAP is coveted in the city’s Housing Element for its potential for a “realistic yield” of 221 new housing units. Indeed, the potential redevelopment of the site following the upcoming expiration of the Fry’s Electronics lease was a driving factor in initiating the NVCAP to ensure the area evolves into a vibrant, well connected, mixed-use neighborhood. The city received a two-year grant from Caltrans in 2018 to develop the coordinated area plan, with local matching funds provided by the Sobrato organization, the property owners for the Fry’s site. 

To accommodate council direction from a March 11 Town Hall meeting, process concerns expressed by NVCAP Working Group members, and an expanded environmental analysis related to the Fry’s site’s historical significance, staff hopes to receive a one-time, two year extension of the project deadline under the Caltrans grant. 

March council direction included study of alternatives for naturalizing Matadero creek, analysis of stronger housing, displacement prevention, and office size limits, and objective accounting to assess impacts of potential zoning changes on both property owners and community amenities.

On Monday August 19, staff will seek council endorsement of a revised overall approach and schedule for the project and staff’s response to Working Group members’ concerns as well as authorization to expand the scope (and cost) of the planning consultant’s contract and add a new contract to study the feasibility of naturalizing the creek.

If approved, the expanded scope of the NVCAP project will escalate costs by 40 percent, including up to $367,112 that will not be covered by the Caltrans grant. In order to fund the expanded scope, staff proposes exploring opportunities to share plan development costs with large property owners in the study area. 

Recent indications that the Sobrato organization has little interest in redeveloping the Fry’s site suggests a change of heart since their 2018 investment of $138,000 in the NVCAP planning process. Whether that is due to the direction the NVCAP is heading, a hardening negotiating position, or other factors remains to be seen. However it does complicate the framework for council’s August 19 decision making. 

Without redevelopment of the Fry’s property, the NVCAP’s housing potential would be significantly diminished as would opportunities for enhanced neighborhood amenities and mobility across the 60-acre plan area. The city must nonetheless complete the NVCAP within one to three years (depending on extension of the Caltrans grant) or assume responsibility for moneys already paid out of the grant. Adding new investment in the NVCAP, despite diminished expectations regarding the Fry’s site, entails risk. But opting out of the proposed new scope for the project could undermine credibility and limit the future promise of the plan. 
This item is scheduled for council action on August 19, beginning at 6:50 pm. Click here for the staff report.

Historic significance of Fry’s Electronics site may complicate redevelopment options as NVCAP planning process advances

August 5, 2019 – Palo Alto Matters

In October 2018, the city kicked off a formal planning process to create a community-driven, integrated plan for redevelopment of the 60 acre area including and surrounding the Fry’s Electronics site in the North Ventura neighborhood. The North Ventura Coordinated Area Plan, or NVCAP, process is intended to produce a plan and regulatory framework for a walkable, mixed-use neighborhood with multifamily housing, commercial services, green space, and well-defined connections to transit, bicycle and pedestrian facilities.

With the data collection and community “visioning and priorities” stage of the process wrapping up, the city and community working group are shifting their attention to the development of plan alternatives. On August 19, City Council is tentatively scheduled to provide direction on anticipated changes in the scope of consultant services, including a likely budget increase. Staff also plans to seek an extension of the funding deadline in order to address the historic significance of the property, explore options to re-naturalize Matadero Creek, and finalize a contract for feasibility and cost estimates for open space options.

As part of the initial assessment of the plan area, the city commissioned an evaluation of the project area for potential historic resources. The evaluation found that the Fry’s Electronics building at 340 Portage Avenue and an associated office building on Ash street are historically significant due to association with the historic Santa Clara County cannery industry and retain integrity in six of the seven required categories, making the property eligible for listing in the California Register of Historical Resources. According to city staff, “the cannery is associated with the Bayside Canning Company, which was owned by a prominent Chinese immigrant [Thomas Foon Chew] and a groundbreaking figure in the canning industry. Mr. Chew was able to make the Bayside Canning Company the third largest fruit and vegetable cannery in the world in the 1920s, only behind Libby and Del Monte.”

As such, the property qualifies as a historic resource for the purposes of review under the California Environmental Quality Act and will be subject to supplemental environmental analysis. Whether the property’s historic significance will demand preservation of all or parts of the buildings themselves remains to be seen. However, the city’s Historic Resources Board was in agreement on July 25 that the buildings needed to be preserved and incorporated into the new project in some way. How to accomplish that while optimizing the underlying housing potential in that area, located in the core of the NVCAP, adds a new challenge to the planning process.