January 27, 2019 Newsletter

In this issue:

  • Guest Commentary: Proposed City Law Threatens Housing and Renters, by Palo Alto Neighborhoods (PAN) Committee on Development, Zoning, and Enforcement
  • Get Up To Speed: Housing ordinance, grade separations, and traffic management efforts move along.
  • Looking Ahead: 2019 city priorities, California legislative agenda, Stanford expansion, wireless cell equipment appeals, Downtown Commercial Cap and Cubberley redesign fill early February calendar.

Guest Commentary

Proposed City Law Threatens Housing and Renters

From the Palo Alto Neighborhoods Committee on Development, Zoning, and Enforcement (PANCODZE)

All Palo Altans should urge the Planning and Transportation Commission to reject a controversial staff proposal that would make it easier for Downtown residences such as the President Hotel Apartments at 488 University to become hotels or offices.  Scheduled for discussion this Wednesday, January 30, the staff proposal would create a new waiver process that vastly favors owners and developers of Downtown buildings over tenants.

Under the proposed waiver process, City staff could cast aside or “adjust” existing laws that require oversized Downtown buildings, such as the six-floor President Hotel, to retain the same mix of uses they have at present.   So while the rule, known as the Grandfathered Facility Law, currently protecting the residences would remain in place, owners and developers would need only to “assert” in writing that it conflicts with some state or federal law.  Staff would then need only to find that the “assertion has merit” and could then immediately grant the waiver.

The proposed process does not require that tenants of the buildings, the press, or the public at large be notified when a waiver is being sought.  No public hearing will necessarily occur and no written legal opinion from the City Attorney citing relevant case law for public review would necessarily be issued. Although the waiver could in theory be appealed to the City Council, tenants and others may not even know a waiver has been granted until after the appeal deadline expires.  Renters might instead find out only once their leases expire and be too late to appeal.

Palo Alto requires a much more open process for other waivers. For example, the law that buildings cannot convert existing ground floor retail and similar uses into offices requires that an exemption request be accompanied by financial data and be approved by the City Council at a public hearing.  Such exemptions might only affect thousands of dollars of rental income a year, yet the waiver enabling the President Hotel residences to become a hotel might be worth tens of millions of dollars. So why shouldn’t the waivers be decided by the City Council too, in full public view?

And why is a waiver process even needed for the law protecting Downtown residences? The staff report for Wednesday’s meeting states a waiver would be granted when the law preserving residences would lead to “a violation of state or federal law (i.e., Ellis Act).”  But preserving residences is legal and cities have long had the right to do so. Most of Palo Alto is already zoned to allow only residential and similar uses such as day-care facilities. Federal law allows cities to further restrict what is in buildings as long as some viable economic use remains.  Residential property in Palo Alto is surely viable, given that it often sells for over $2,000 a square foot. 

Staff has repeatedly cited the state’s Ellis Act to justify the need for a waiver process, as in the quote above.  Yet that law explicitly states the opposite of what staff claims, namely that it does not bar cities from controlling how properties are used.  The Ellis Act merely allows owners to cease renting out residences and instead have those become owner-occupied or company-owned housing if cities so allow.  If the Ellis Act actually required cities to allow residential buildings to convert to some other use contrary to local laws, apartment complexes in Palo Alto and all over the state would have long ago turned into office buildings. 

So why are senior City staff actually asking for the waiver process for this law and not for the hundreds of others in our municipal code?   Despite staff’s insistence that they are not favoring AJ Capital, the Chicago-based purchaser of the President Hotel, the waiver proposal seems crafted to allow AJ Capital to sidestep many City laws and replace the existing housing in the building with a hotel.

We urgently need to retain housing in Palo Alto.  We do not want tenants evicted and forced to find new places to live.  And we do not want staff to grant waivers worth perhaps tens of millions of dollars to developers when there’s no legal necessity and outside of public view.  Please email the Planning and Transportation Commission at Planning.Commission@CityofPaloAlto.org to urge them in your own words to reject the waiver process proposed by staff.  And please attend the Commission meeting if possible at 6 pm on Wednesday night at City Hall (250 Hamilton).  


Planning Commission Agenda for January 30, 2019 Meeting: https://www.cityofpaloalto.org/civicax/filebank/documents/68695

Staff Report on the Proposed Change in the Law https://www.cityofpaloalto.org/civicax/filebank/documents/68694

Palo Alto Weekly December 7, 2018 Editorial Critical of Changing Laws to Help AJ Capital https://www.paloaltoonline.com/news/2018/12/07/editorial-a-stealth-agenda

Palo Alto Weekly Story on the December 10, 2018 City Council Action on the Waiver https://www.paloaltoonline.com/news/2018/12/11/proposed-law-would-prevent-president-hotel-conversion

Minutes of the December 10, 2018 City Council Meeting https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=52082.73&BlobID=68210

Palo Alto Weekly January 25, 2019 Update on the President Hotel https://www.paloaltoonline.com/news/2019/01/25/nonprofit-tries-to-get-reprieve-for-president-hotel-tenants

Do you have thoughts to share about goings on in local government? Palo Alto Matters welcomes guest opinion pieces and calls-to-action from the community. Email editor@paloaltomatters.org for further information.

Get Up To Speed

Massing concept for 1.5 FAR project on El Camino Real

Completion of housing ordinance expected on January 28

On Monday night, January 28, City Council is expected to complete its review of a proposed ordinance making comprehensive changes to the city’s zoning code designed to incentivize new housing construction. The ordinance has been taken up in separate geographic pieces to accommodate several council member recusals. The final section, set for Monday night, will focus on changes to (1) allow denser residential developments on California Avenue and along El Camino Real, (2) clarify and expand Council’s December direction regarding usable open space and rooftop open space requirements for residential projects citywide, and (3) eliminate the ground floor retail requirement for most 100 percent affordable housing projects in multi-family residential (RM) districts, citywide.

A Housing Incentive Program (HIP) is proposed for both the California Avenue and El Camino Real area that would allow the Director of Planning to grant waivers tripling the allowable Floor Area Ratios for eligible properties. (FAR represents the ratio of usable building floor area to the size of the lot.) For California Avenue, the FAR would jump from 0.6 to 2.0, and in the El Camino area it would climb from 0.5 (in Neighborhood Commercial, CN, zones) and 0.6 (in Service Commercial, CS, zones) to 1.5. An HIP was approved last month for the Downtown Commercial district allowing FAR limits to increase from 1.0 to 3.0.

Around El Camino, the HIP would also allow waivers to eliminate or reduce an existing requirement that prevents buildings from covering more than 50 percent of a parcel. A streamlined approval process, approved citywide in December, eliminates Site and Design review by the Planning and Transportation Commission for HIP projects, but discretionary review by the Architectural Review Board would be retained. The HIP program is intended to offer an alternative to the State Density Bonus Law and streamlined, ministerial approvals under State Senate Bill 35 passed last year.

In addition to the HIP program, Monday’s votes will likely allow rooftops to qualify for up to 60 percent of the usable open space requirement for the multi-family residential portion of a project, allow housing-only projects (currently housing must be part of a mixed-use development), and eliminate maximum unit density requirements. Unit density is currently capped at 30 units per acre in the California Avenue district and caps range from 15 to 30 units per acre in the El Camino Real zoning districts.

Major changes already approved in December 2019 also include significant modifications to parking requirements, including a one-year moratorium on use of the in-lieu parking program for Downtown office uses above the ground floor (parking would be required on-site instead of paying into an in-lieu fund for future parking construction), a citywide exemption from parking requirements for the first 1,500 square feet of retail in residential mixed-use buildings, and citywide opportunity for affordable multi-family developments to reduce parking requirements by up to 100 percent based on maximum anticipated demand. A proposal to reduce parking standards within 1/2 mile of a fixed rail station was continued to a date uncertain.

Click here for a complete summary of previous council action on the Housing Ordinance.

Other housing news

  • City Council unanimously approved a proposal from nonprofit Palo Alto Housing to build a 59 unit affordable housing development at 3705 El Camino Real. The Wilton Court project is the first to take advantage of relaxed development standards in the Affordable Housing Combining District established last year. It will include at least 21 apartments for adults with developmental disabilities and all units in the project (except the manager’s apartment) will be dedicated to serving residents earning from 30 to 60 percent of the area median income ($28,000 per year to $55,000 per year for an individual). The project received enthusiastic support not only from City Council and housing advocates, but also from many representatives of the Ventura neighborhood who praised Palo Alto Housing’s new leadership for working closely with Ventura residents and city staff to address neighborhood concerns.
  • State Senator Joe Simitian’s vision for a multi-district teacher housing project on county land in Palo Alto continues to gain support. On January 15, the PAUSD School Board joined the City of Palo Alto and three other school districts in taking action to find funding to support the project. The 60 to 120 unit project would be located at 231 Sherman Avenue, across from the Palo Alto Courthouse.

3-D visuals give context to grade separation options

Rail section - South Palo Alto

With Mayor Filseth and Councilmember Kniss recused from grade separation discussions, a council of five voted unanimously on January 22 to remove the Palo Alto Avenue crossing and a possible bike and pedestrian crossing at Loma Verde Avenue from the current grade crossing discussion. Both will be deferred to a future planning process. The new council reaffirmed a decision not to separate rail from the roadway at Churchill Avenue and chose not to reduce alternatives under consideration for South Palo Alto crossings, including trench, tunnel, viaduct, and hybrid approaches, as well as the possibility of a citywide tunnel.

3-D animation is now available for the major alternatives. They provide illuminating visual context, but are for discussion only and should not be interpreted as specific plans. Click on the images below to view the animation.

Meadow Drive and Charleston Road – Hybrid (lowered road and raised rail)

Meadow Drive and Charleston Road – Trench

Meadow Drive and Charleston Road – Viaduct

Citywide Tunnel

(This animation should be viewed as a concept for discussion only and not a specific proposal)

Because only five council members may vote on rail issues, it remains unclear whether a smaller Council Rail Committee will be named for this year.

Traffic safety and management efforts take root.

Traffic safety modifications at Palo Alto’s north end of Middlefield Road are here to stay and Palo Alto’s downtown Traffic Management Association is getting ready to expand into the California Avenue business district. After a one-year pilot, roadway modifications designed to improve safety on Middlefield Road were adopted as permanent on January 14. The “road diet” on Middlefield Road between Forest Avenue and the Menlo Park border was implemented after that stretch of road saw approximately 100 collisions between January 2014 and April 2017. The roadway modifications are credited with bringing collisions to a ‘five-year low compared to historic data for the corridor between 2012 and 2016,” according to the city’s consultant, Alta Planning and Design.

Meanwhile, the downtown Traffic Management Association, formed in 2015, has begun to secure private funds and enjoy growing success. The percentage of downtown workers who use alternative transit went up from 18 percent in 2015 to 27 percent in 2018, according to the city, while the percentage of employees who drive alone to work has slipped from 57 percent to 49 percent.

Looking Ahead

In addition to the housing ordinance and waivers of the Grandfathered Use and Facilities law discussed above, city officials will address several other issues of significant Palo Alto concern in the next few weeks. On February 2, City Council will set its priorities for the coming year and discuss 2018 National Citizen Survey results showing growing dissatisfaction among residents. On February 4, the council will meet with its state lobbyists to discuss the 2019 State legislative agenda, presumably including SB-50 and other proposals that could significantly limit local control over land use decisions.

That same night they will hone in on possible terms for inclusion in a Development Agreement related to Stanford’s General Use Permit (GUP) application and rule on appeals related to installation of wireless cell equipment in University South. Finally, on February 11, City Council is tentatively set to consider repeal of the Downtown Commercial Cap (a longstanding ordinance that impedes conversion of the President Hotel Apartments into a hotel), and offer feedback on a program and design concept for redevelopment of Cubberley.

Calendar of Notable Upcoming Action

January 28, 2019

Midpeninsula Community Media Center: Council will vote to authorize negotiations to purchase the Media Center building at 900 San Antonio Road and a new agreement with the Media Center for Public Education and government (PEG) Access Channel Support Services. Beginning at 7:40 6:40 pm (City Hall). Click here for staff report. Note: this item was recently moved up by one hour.

Housing Ordinance: Council will continue deliberations on amendments to the zoning code that would reduce development standards related to parking, Floor Area Ratios, height limits, unit size and density, usable open space, and retail preservation, in order to incentivize construction of more housing. Discussion will focus on Neighborhood Commercial, Community Commercial, and Service Commercial zone districts and wrap up remaining citywide changes that have not yet been addressed. Beginning at 8:45 7:45 pm (City Hall). Click here for staff report. (Continued from December 3, 2018.)

Note: This item was recently moved up by one hour. Also, Council heard public comment on this topic on November 26 and closed the public hearing. While the public is always welcome to write to City Council, no further oral comments are likely to be heard on this topic.

January 30, 2019

Storm Drain Infrastructure: The Planning and Transportation Commission will hold a study session on the city’s draft Green Stormwater Infrastructure Plan. Meeting begins at 6:00 pm (City Hall). Click here for staff report.

Grandfathered uses in noncompliant buildings/President Hotel: The Planning and Transportation Commission will hold a public hearing on amendments to section 18.18.120 of the zoning code, Grandfathered Use and Facilities, that formed a basis for the city’s conclusion that the President Hotel could not legally be converted from residential to hotel use. Meeting begins at 6:00 pm (City Hall). Click here for staff report

February 2, 2019

City Council Retreat: City Council will hold its annual retreat to review the City’s 2018 National Citizen Survey results and set council priorities for the coming year. Beginning at 9:00 am (Community Meeting Room, City Hall). Click here for agenda.

February 4, 2019 

State Legislation: Council will hold a study session with the City’s state lobbyists regarding the 2019 legislative session. Beginning at 5:00 pm (City Hall)

Stanford Expansion: Council will provide direction on a draft letter to Santa Clara County requesting terms for inclusion in a possible Development Agreement related to Stanford’s General Use Permit (GUP) application. The GUP proposes to add 3.5 million square feet of new development over the next 15 years. Beginning at 7:10 pm (City Hall). Click here for staff report.

Wireless Cell Antennas: Council is tentatively set to hear appeals of Verizon’s plans to install wireless cell equipment in the public right of way. The planned installations are called Cluster 2, and would be located in Downtown South. (Cluster 1 was already approved despite appeals in South Palo Alto). Beginning at 8:15 pm (City Hall). Click here for staff report.

February 11, 2019 (Tentative)

Cubberley Master Plan: Council is tentatively scheduled to hold a study session on the Cubberley Co-design progress to date.  Click here for the Program Document synthesizing input and proposals to date.

Downtown Parking Structure: Council is tentatively scheduled to  certify the Final Environmental Impact Report and Approve the Architectural Review Application for the Downtown parking garage at 375 Hamilton Avenue.

Downtown Commercial Cap: Council is tentatively scheduled to consider repealing the current cap on downtown non-residential development. Current commercial development is at or near the cap. When reached, the cap triggers a one-year moratorium on new non-residential development downtown. The Downtown Commercial Cap currently presents a major obstacle to the conversion of the President Hotel Apartments from residential to hotel use.

Transportation Impact Fees: City Council is tentatively scheduled to consider Finance Committee recommendations for a new ordinance that would impose a one time fee for new development and redevelopment city-wide to fund transportation improvements to accommodate and mitigate the impacts of future development in the city. (Continued from May 7 and August 13, 2018).