Featured in this issue:
- Council to decide about new rail committee
- Mixed-use project on San Antonio Road seeks expansion of Housing Incentive Program
- Business tax favored to fund “transportation and/or affordable housing” investments
- Want to keep your underground utilities? Reach for your wallet.
Council to decide on new Rail Blue Ribbon Committee
Discussion of a new Rail Blue Ribbon Commission to advise the council on political and funding strategies was mostly deferred on August 19. City Council and many public speakers were unenthusiastic about staff’s proposal to comprise the RBRC of former mayors and council members, and many questions were raised about the roles and interaction between the proposed RBRC and the existing Expanded Community Advisory Panel, or XCAP. Staff returns to City Council on September 9 for a full discussion.
The recommendation for exclusive appointment of former elected officials has been softened, but staff still urges a non-voting role for the Chamber of Commerce, Stanford, Caltrain, the Valley Transportation Authority (VTA) and the Silicon Valley Leadership Group.
A revised staff report clarifies that the XCAP is primarily involved in building an informed understanding of grade separation options – developing and evaluating grade separation alternatives reflective of neighborhood perspectives. As that process wraps up, the RBRC will engage to consider the political viability of the alternatives and potential funding strategies, leading to a design and funding strategy recommendation to City Council. Unlike the XCAP, the RBRC will report directly to council and be subject to the Brown Act and conflict of interest rules to ensure the RBRC’s recommendations are not tainted by potential real estate or financial interests of its members.
Monday’s continued discussion is scheduled for 6:45 pm on September 9 and will focus on the RBRC’s scope of assignment, its composition, and how members would be selected.
Mixed-use project on San Antonio Road seeks expansion of city’s Housing Incentive Program
When City Council approved a new Housing Incentive Program early this year for Downtown, California Avenue, and El Camino Real area commercial zones, at least one property owner was paying attention.
Where applicable, the HIP allows for significant increases in built floor area relative to lot size, known as Floor Area Ratio, along with other housing development incentives. In October 2018, council had prescreened a project at 788-796 San Antonio Avenue that sought a zoning change from CS (Commercial Service) to RM-40 (Residential Mixed Use) to allow redevelopment of the site as a four-story, 54-unit residential project. Subsequent passage of the Housing Incentive Program (HIP), however, gave the applicant a better idea: if I stick with CS zoning and can get the city to extend the HIP to this part of town, I can build a much bigger project.
The property owner pitched City Council the idea of extending the HIP in May 2019. Despite last year’s sizable controversy over approval of two nearby Marriott hotels due to anticipated congestion impacts, City Council appeared open to the prospect, even though it would further densify the immediate area. So the applicant submitted new plans and requested zoning code amendments extending the HIP to all CS zoned properties adjacent to San Antonio Road between Middlefield and Charleston Roads. The new plans envision a mixed-use project with 102 for-sale housing units, including 16 restricted to below-market rate. The Architectural Review Board provided initial feedback on the project’s architecture, massing and site design on August 15.
This week the Planning and Transportation Commission will hold a public hearing on the scope of a required Environmental Impact Report for the project and will offer initial comments on the proposed zoning amendments which include the following:
- Establishing a HIP that includes a waiver to allow up to a 2.0 FAR for housing projects (doubling the current FAR for combined residential and commercial use in that CS zoned site) and changes to lot coverage restrictions;
- Eliminating unit density limits;
- Allowing rooftop gardens to count towards required open space;
- Excluding the first 1,500 square feet of retail floor area from parking requirements;
- Amending the citywide retail preservation requirements to:
- Modify waiver standards to allow exceptions for housing projects; or
- Establish minimum retail floor area replacement requirements for housing projects, but not require full replacement; or
- Waive all or part of the required replacement retail floor area from the maximum FAR for housing projects.
Though not subject to PTC review, the project also seeks approval of a nine percent parking reduction and a partial waiver of retail space requirements. In addition, the project requires demolition of a building that appears to be eligible for listing on the California Register for Historic Resources.
The PTC hearing will begin at 6:00 pm on September 11. More detail about the project is available in the staff report.
Business tax favored to fund “transportation and/or housing investments”
The city aims to decide in the next couple of months on the core attributes of a local tax measure for the 2020 ballot. To that end, staff and the Finance Committee have been analyzing and evaluating alternatives and narrowing the parameters for a tax proposal. On September 16, City Council will weigh in on the Finance Committee’s efforts and confirm identified next steps and areas for further staff analysis.
Over three meetings since June, the Finance Committee narrowed its focus to direct further analysis toward a general business tax based on either number of employees or square footage and a parcel tax based on square footage, with an overall goal of generating between one and six percent of General Fund revenues.
Both flat and tiered pricing structures remain on the table and agreement has not been reached on whether to pursue a general tax (with non-binding advisory language on intended use of funds) or a special tax (designating specific uses). A general tax can be approved by a simple majority of voters while a special tax requires a two-thirds majority of voters to pass. The business community strongly encouraged the city to pursue the special tax route.
Analysis and costing for possible exemptions or phase-in strategies remains to be done, but the Finance Committee is interested in exemptions for public utilities, hospitality, retail, restaurants, and small medical facilities/clinics. Full discussion of desired exemptions will have to wait until an ongoing review of potential financial conflicts of interest is completed.
Transportation (grade separations and expanded city shuttles are most often cited), infrastructure improvements, and affordable housing are all on the city’s wish list for use of business tax revenues, but targeted allocations will be determined at a later date and informed by polling. Potential uses of new tax revenues will also consider the nexus between the use of the funds and those paying the tax. The Finance Committee agreed that unfunded infrastructure projects like the Cubberley redevelopment, the Palo Alto History Museum, and expansion of the animal shelter should wait for a parcel tax or general obligation bond at a future date.
Council discussion of this topic will begin at 8:00 pm on September 16. More information can be found in the staff report.
Want to keep your underground utilities? Reach for your wallet.
Green Acres I may have to self-fund keeping their electric utilities equipment underground.
Under a program started in 1965, 33 districts in Palo Alto had their utility wires undergrounded, with transformers and other equipment placed in subsurface vaults. As utilities standards have changed over the years, most of those subsurface vaults have been converted to above-ground, pad-mounted installations, but nine districts still enjoy fully underground electric utilities in their neighborhood. One of those, Green Acres I, is due for a system rebuild. Citing aesthetics, safety and property values, many residents want to keep their system fully undergrounded.
City of Palo Alto Utilities says meeting current functional and safety requirements while keeping the infrastructure fully underground would require costly and extensive new subsurface construction. So if the neighborhood wants to avoid the switch to pad-mounted, above ground equipment boxes, city staff and the Utilities Advisory Commission recommend making the neighborhood responsible for raising funds and paying up front for the cost difference.
A resolution going to City Council for a vote on September 16, would amend city regulations to allow a community to keep the equipment underground if they pay both the incremental installation costs and ongoing ownership costs for undergrounding. CPAU roughly estimates that for the Green Acres I project, property owners would have to prepay a total of about $475,000. The remaining eight districts that have not already been converted to above ground equipment boxes would also have access to the self-funding option when their area comes due for a system rebuild.
To initiate subsurface installation under the proposed self-funding option, a proponent would have 45 days to collect signatures from owners of at least 60 percent of the affected parcels and gather funds sufficient to cover the cost of developing a cost estimate for non-standard, subsurface improvements. CPAU would then prepare a cost estimate for the installation and the neighborhood would have 90 days to collect and prepay the difference between the planned standard installation and the fully subsurface installation (including the net present value of the higher continuing ownership costs).
Council discussion will begin at 7:00 pm on September 16. For more information about the thinking behind the self-fund option, read the staff report.
What just happened?
City doubled down on North Ventura Coordinated Area Plan despite misgivings
Despite concern about the waning prospects for housing development at 340 Portage, commonly known as the Fry’s Electronics site, on August 19 City Council voted 4-3 (Cormack, Filseth, and Tanaka dissenting) to add $367,112 and extend the planning process for developing a coordinated area plan for future redevelopment in and around that location. Shortly thereafter, news emerged confirming that Fry’s Electronics would vacate the property on January 31 when its lease expires.
Uncertainty about the owner’s future intentions for the 340 Portage property, potential constraints on redevelopment due to the historic significance of the site, and the ever present reality that office space is more profitable than housing or retail represent big wrenches in the gears moving a vision for the coordinated area plan forward. Nonetheless, the city and the working group will continue their work, with a focus on long range goals and likely increasing attention to zoning amendments, tackling controversial questions about what the community is willing to give up in order to incentivize the kind of new development it wants to attract.
New Residential Permit Parking program for Old Palo Alto moves on to Council amid strong minority opposition
The new one-year pilot RPP would establish two-hour parking limits for users without resident permits in an area on the east side of the California Avenue bike/pedestrian tunnel frequently overrun with commuter parking likely associated with Caltrain users and California Avenue business employees. Planning and Transportation Commission Chair Billy Riggs and Commissioner Michael Alcheck repeatedly argued that the goals of the city’s overall RPP program lack policy justification and that data collected to justify the pilot was inconclusive. Commissioner Alcheck also vehemently challenged the notion that neighborhood residents should have favored access to public street parking.
Keep your eye on…
- Pilot program: safe overnight parking for vehicle dwellers (Policy and Services Committee September 10, 2019 at 6:00 pm, Community Meeting Room, City Hall) Read the staff report and news coverage.
- Opening Foothill’s Park to non-residents (Tentative: Parks and Recreation Commission September 24, 2019)
- Colleagues’ Memo on affordable housing elements of Housing Work Plan (Tentative: City Council September 23, 2019)
- Labor Transparency Work Plan (Tentative: Finance Committee, October 1, 2019)
- “Transportation and Traffic” Work Plan (Tentative: City Council, October 7, 2019)
Notable Upcoming Action
September 9, 2019
New Rail Committee: City Council will continue consideration of a new Rail Blue Ribbon Committee to recommend a preferred grade separation alternative and funding strategy to council. Beginning at 6:45 pm (City Hall). Click here for staff report.
September 10, 2019
Safe Overnight Parking Program: Council’s Policy and Services Committee will provide direction to staff regarding parameters, general locations and regulatory process for a future safe parking program for vehicle dwellers. Meeting begins at 6:00 pm (Community Meeting Room, City Hall). Click here for staff report.
September 11, 2019
788-796 San Antonio Road: The Planning and Transportation Commission will hold a public scoping meeting for an Environmental Impact Report evaluating a project that would extend the city’s Housing Incentive Program to CS (Commercial Service) zoned properties along San Antonio Road between Middlefield and Charleston Roads. The property owner hopes to use the HIP development incentives to add about 40 additional housing units to a mixed use project proposed for the site. The 102 unit project, if enabled by HIP, is proposed to be comprised of for-sale units, with 16 of them restricted to below-market rate. Meeting begins at 6:00 pm (City Hall). Click here for staff report.
Septemer 16, 2019
Underground Utilities: Council will consider a resolution creating an option for neighborhoods with underground electric facilities to self-fund new underground construction to avoid conversion of subsurface equipment vaults to pad-mounted (above ground) installations. Beginning at 7:00 pm (City Hall). Click here for staff report.
2020 Tax Ballot Measures: Council will discuss Finance Committee recommended parameters for tax structure and further research. Beginning at 8:00 pm (City Hall). Click here for staff report.
Caltrain Business Plan: Council will direct staff regarding comments on Caltrain’s Draft Long Range Service Vision. Beginning at 9:15 pm (City Hall). Click here for staff report.
September 23, 2019 – Tentative
City Council is tentatively scheduled to hold a study session on recycled water expansion and regional treated wastewater opportunities. In addition, the tentative schedule calls for a public hearing on a new Residential Parking Program in Old Palo Alto and discussion of a Colleagues’ Memo to address affordable housing elements of the city’s Housing Work Plan.
September 24, 2019 – Tentative
Opening Foothills Park to non-residents: The Parks and Recreation Commission is tentatively scheduled to discuss a possible pilot program allowing non-resident entry into the park. Meeting begins at 7:00 pm (City Hall). Staff report is not yet available.