July 25, 2018 Newsletter

Summer is blissfully upon us, but somehow newsworthy stuff keeps happening. In the final days of July you have a chance to weigh in on:

  1. Whether to delete a cumulative downtown office cap from the city code (PTC meeting on Wednesday, July 25 at 6:00 pm);
  2. Whether Stanford should reduce its growth ambitions and/or take greater responsibility for building housing, meeting affordable housing needs, or supporting transportation infrastructure (GUP public comment deadline Thursday, July 26); and
  3. What position the city should take regarding a citizens’ initiative to control office growth citywide (City Council meeting tentatively set for Monday, July 30, staff report will be posted on July 26).

Evictions from President Hotel Apartments unchanged, but community support for housing preservation stirs renewed concern about elimination of the Downtown Development Cap.

PTC to hold public hearing on cumulative office cap Wednesday, July 25.

President Hotel Apartments

The roller coaster ride for the tight-knit community of residents at the historic downtown President Hotel Apartments took some sharp turns in the past week. On July 17, the city issued a letter to the new owners stating that conversion of the building to its original hotel use is “impermissible based on existing zoning regulations and site characteristics.” Nonetheless, within a week the new owners of the property notified current residents that their eviction notices remain in effect.

Following an initial June statement by City Manager Jim Keene that conversion to a hotel could proceed “by-right,” land use watchdog Jeff Levinsky, co-chair of the Development, Zoning, and Enforcement Committee for the umbrella residents group Palo Alto Neighborhoods, asked the city to look more closely at grandfathering laws designed to prevent conversion of overly large, non-conforming buildings to new uses. The city’s review concluded that “grandfathering” rules did indeed preclude changing the use of the property (from residential to hotel) without bringing the building up to code. Current code regarding ground floor retail and lot density (FAR) would severely restrict how much of the existing building could be used as a hotel. While that development buoyed the hopes of a reprieve for current President Hotel residents, the new owners of the property were quick to state that they disagree with the city’s interpretation and still expect all residents to vacate the building by November.

Downtown Office Cap

Though the outlook remains grim for President Hotel residents, their plight has galvanized community concern about housing preservation and generated renewed interest in the fate of the city’s 32-year old law limiting new nonresidential space downtown. If retained, the Downtown Development Cap could impose a one-year moratorium on new nonresidential uses such as the President Hotel conversion. Shortly after the proposed conversion was announced, however, city staff put forward a recommendation to remove the Downtown Cap from the municipal code. That recommendation will get its first public hearing at the Planning and Transportation Commission on Wednesday, July 25.

In 1986, concerned about potential negative impacts from unfettered commercial growth downtown, the city enacted an ordinance setting a cumulative 350,000 square foot cap on downtown nonresidential growth. Under the law, once the cap was reached a one-year moratorium on new downtown nonresidential space would be imposed to allow the city time to evaluate impacts and design new policies as appropriate. The Downtown Development Cap was incorporated as a long term policy in the 1998 Comprehensive Plan. In a contentious January 2017 vote, a slim 5-4 council majority led by Cory Wolbach and Greg Scharff  (DuBoise, Filseth, Holman and Kou dissenting) opted to eliminate the downtown cap from the city’s updated Comprehensive Plan, but did not direct that the ordinance be repealed.

According to city staff, in January 2017 there were approximately 45,000 square feet remaining under the cap. The staff report for the upcoming PTC hearing states that as of July 12, 2018, “the cap has not been reached,” but it does not indicate how much square footage remains. Furthermore, there is some ambiguity about what square footage should be counted. According to Jeff Levinsky, the city’s tally fails to count “parking and common areas of many new buildings.” If such square footage is counted, he says the 350,000 square foot limit has been reached and the moratorium should have been triggered.

Council members who opposed including the downtown cap in the Comp Plan argued that downtown’s transit resources make it a good place for commercial growth and that a city-wide 1.7 million square foot office cap together with an annual limit that regulates the pace of downtown office growth makes the downtown cap unnecessary. Supporters of the cap contend that the concerns that led to its enactment have been born out, with downtown commercial growth exacerbating the jobs/housing imbalance, creating major traffic and parking problems, and contributing to spiking rents by squeezing out housing. They further emphasize that if the President Hotel owners prevail in challenging the grandfathering rules governing conversion of oversized buildings, the downtown cap may be the only way to preserve that housing stock and prevent the conversion of other downtown residential buildings..

You can weigh in on whether or not the Downtown Development Cap ordinance should be retained by speaking up at the Planning Commission meeting  on July 25 at 6:00 pm in City Hall or sending an email to the Commission at Planning.Commission@CityofPaloAlto.org.

School Board takes forceful stand on new Stanford growth analysis. City also submits substantial concerns, but with limited council input.

Santa Clara County will accept public comments until July 26.

In response to the recirculated Draft Environmental Impact Report for Stanford’s proposed academic expansion, commonly referred to as the GUP, the PAUSD hired a lawyer to assess the sufficiency of the analysis and held a special meeting during their summer break to weigh in on the district’s draft comment letter to Santa Clara County, the body responsible for approving Stanford’s General Use Permit. In contrast, after hearing a rough summary of projected impacts from two newly proposed housing alternatives in the recirculated DEIR, City Council offered general comments and delegated the city’s formal letter to staff with no further council review or public meeting prior to the close of the comment period. Despite their different approaches, both the school district and the city found the recirculated DEIR to be sorely inadequate, both in its analysis of likely impacts and the sufficiency of offered mitigations.

Also relevant to the GUP, in addition to a recent proposal to raise the county’s housing impact fees to $143 per square foot for Stanford’s academic growth, Santa Clara County is now considering an inclusionary housing ordinance that would require new rental or for-sale faculty and staff housing projects to designate 16 percent of units as below-market-rate housing. If located more than six miles from campus, the inclusionary rate would increase to 20 percent of total units. As currently drafted, the ordinance would not allow Stanford to pay in lieu fees instead of building the BMR units. The County Planning Commission will consider the draft ordinance on July 26.

The comment letters submitted by the PAUSD and the City of Palo Alto, attached and summarized below, along with the recent Palo Alto Matters article on the recirculated DEIR offer details and food for thought about Stanford’s proposed expansion. Don’t miss your chance to make sure your voice is heard too. The final EIR must address every comment submitted. Public comments will be accepted via email until July 26:

County of Santa Clara
Department of Planning and Development Attention: David Rader
County Government Center
70 West Hedding Street, San Jose, CA 95110
Email: David.Rader@pln.sccgov.org

Key conclusions outlined in the PAUSD letter include:

Newly identified significant and unavoidable impact to housing, Impact 5-17, “obfuscates the Project’s scale and impact.”  Impact 5-17, concludes that “construction and/or operation of off-site housing would result in off-site environmental impacts,” referring to an unspecified amount of affordable housing in unspecified locations that would “disproportionately” affect Palo Alto, Menlo Park and Mountain View, but makes no effort to quantify those effects.The district argues that Impact 5-17 “changes the nature, scope and scale of the project … without providing any detail as to what are the precise changes” and finds it “so fundamentally and basically inadequate and conclusory in nature” that the DEIR must be revised and recirculated in its entirety.”

Mitigation Measure 5.17.1 is so vague and unenforceable that it amounts to “improperly deferred mitigation.”  The Measure offers no enforcement mechanisms, merely stating that other local governments “can and should mitigate the impacts caused by the project’s off-campus housing.”

Analysis understates current and future enrollment impacts and threatens to impose a major funding burden on Palo Alto taxpayers. By using outdated student generation rates (SGR), the DEIR analysis “understates future enrollment demand by almost 50 percent.” The district estimates that Alternative A (all new housing need met on-campus) would generate 2,834 additional PAUSD students.

The cost of educating 2,834 new students at current per-student expenditures would “exceed $51 million per year.” Furthermore, as a basic aid district, PAUSD operations are funded directly by property taxes, not state funding. “Much of Stanford’s development is on land that is exempt from paying property tax, yet the … project documentation is silent [on] how PAUSD and the people of PA can be expected to educate the incoming students created by Stanford’s development.

Fails to fully mitigate impacts related to school operations. Even though development fees are automatically deemed sufficient (under state law) to mitigate need for new school facilities, “the EIR must still examine environmental impacts that affect school operations but are not directly related to the need for new school facilities.” Those secondary impacts include exacerbating traffic (changing traffic patterns), noise, GHG emissions, air quality, and safety concerns.

For every 400-500 new elementary students generated by Stanford, PAUSD would have to build an additional neighborhood school, with each requiring a 3-4 acre site. The RDEIR “ignores the secondary potential environmental impacts associated with this new development that would be needed as a direct result of Stanford’s development.”

Key conclusions outlined in the City letter include:

Newly identified significant and unavoidable impact to housing lacks specificity and wrongly suggests that the city’s updated Comprehensive Plan accounted for the Stanford project’s growth. The city contends that such a conclusion is “unfounded and there is no evidence in the administrative record to support [the] assertion.” Furthermore, [c]iting the City’s Comprehensive Plan and suggesting it anticipated this additional population growth is not only wrong, failure to disclose impacts renders the document inadequate” under CEQA.

Like the school district, the city finds mitigation measure 5.17.1 sorely deficient. Stating that local agencies “can and should” mitigate the environmental impacts from off-campus housing is “not a satisfactory mitigation under CEQA and irresponsibly shifts the [mitigation] burden from the University to Palo Alto and surrounding communities.” The letter asks the county to require “greater analysis of how induced population growth will impact Palo Alto” as well as specific mitigation measures, citing three potential examples.

Findings regarding Vehicle Miles Traveled impacts are flawed. The DEIR finds that  VMT will increase and air quality will worsen under Alternative A (housing needs met on-campus) as compared to the base project (only 550 units/beds provided on-campus). However, no analysis was undertaken regarding the VMT and air quality impacts of off-campus housing necessitated by the base project, despite the mitigation requirement that local communities absorb Stanford’s unmet housing need. In the absence of proper analysis of the VMT and air quality impacts from off-campus housing demand caused by the base project, “[a]ny comparison between the Project and the Alternatives is meaningless and misrepresents the environmental impacts to decision-makers.”

The No Net New Commute Trips mitigation does not adequately address direct and indirect traffic-related impacts. The city reiterates its concerns regarding the methodology and feasibility of NNNCT and cites the significant strain Stanford’s growth has placed on the City’s transportation network and resident satisfaction. “By not identifying the true traffic-related impacts of the Project, the burden of responsibility shifts from the University to Palo Alto and surrounding communities. Not only is this not equitable, it is inconsistent with CEQA.” Three additional mitigation measures are suggested, including funding for transportation infrastructure, coordination and enhanced connections between the Marguerite and City Shuttles, and fair share payments in line with the city’s transportation impact fee requirements.

Other Concerns: The city also takes issue with the sufficiency of the DEIR’s housing alternatives analysis regarding aesthetics, project objectives and public services and offers support to PAUSD, calling for “the impacts to PAUSD, new school sites and funding for increased enrollment [to be] more clearly disclosed to the public in an updated environmental document.”

If any of those concerns strike a chord with you, or if you have alternative issues to raise, be sure to get your own comments in by Thursday July 26.


Should the city offer an alternative to the citizen’s initiative to control office growth? If so, what should it look like?

The council majority made clear last month that it was not wild about the citizens’ initiative to hold citywide office growth to a 15 year total consistent with its historical average. They hired a consultant to provide a comprehensive analysis of the initiative’s potential impacts and appointed an ad hoc council committee (whose membership has not been disclosed) to develop a separate ballot measure that would amend the initiative. The results are due in on Monday, July 30 when Council is tentatively scheduled to hear the consultant’s findings and vote on the details of any competing measure. The agenda and staff report will be posted here on July 26.

If you would like to influence their decision, be sure to show up at City Hall on July 30.