News

Business registry proposed in Palo Alto

City hopes new system will bring in elusive data on employee counts

With offices filling up in downtown Palo Alto and parking shortages spurring tension between employees and residents, city officials are proposing to start a business-registry program that they hope will help them solve the growing problem.

The proposal, which the City Council will consider Tuesday, April 29, would require local businesses to participate in the Business Registry Certificate program, which would require annual updates on data like employee count, square footage occupied and the number of employees who live in Palo Alto. Businesses would be able to register and make their updates through an online database that the city plans to set up.

The proposal is a response to a memo that was issued in February by council members Marc Berman, Pat Burt, Karen Holman and Larry Klein. The council quartet stated in the memo that the "impacts of commercial development activity, such as traffic and parking impacts, are at the forefront of community concerns" and that the city "lacks adequate, reliable and updated data to analyze the issues, structure best policies and programs and to measure their effect."

The memo recommends an online business registry, with fees limited to cost recovery.

The staff proposal, which was released Wednesday afternoon, aims to have such a registry in place by the end of this year. A report from the office of City Manager James Keene notes that Palo Alto is one of of a small number of cities in the state that do not have a business registry or a business tax. The city's last attempt to institute a business tax fizzled in 2009, when voters rejected a proposal that would tax businesses based on gross receipts. Keene's report notes that as the demand for office space in Palo Alto has increased, so has the density of use in commercial space, particularly in high-tech offices.

"The changing nature of office use has come with more people occupying buildings in new open floor plan configurations," Keene's report states. "This has had a perceived deleterious effect on the parking and traffic situations as well as the quality of the environment around our business district."

The need for the registry, Keene said, is clear.

"With such data, the City can begin to measure employment trends and business activity throughout the City in a cohesive and coordinated manner," the report states. "Its availability is vital for developing and measuring the effectiveness of transportation demand programs, and other transportation planning efforts."

Currently, a business that is occupying a commercial space in Palo Alto is required to take out a one-time "Certificate of Use" for a fee of $413. Staff estimates that about 2,000 local businesses currently comply with this provision and about 1,000 operate without a certificate. The new program would try to capture both of these groups, as well as new businesses coming to the city. Unlike in the 2009 proposal, the business registry would not come with a tax on receipts but would include an annual fee of $35 to $75, provided the business is in compliance with the certificate-of-use requirement.

A business that is not compliant will be given a grace period of 120 days to obtain a certificate of use (which would still come with a $413 fee). After that, it would be required to provide annual updates.

One issue that still has to be worked out revolves around privacy. According to Keene, some businesses expressed concern that the information they share with the city would become public. Keene noted that, in general, staff's goal is to collect data that would be made publicly available for third-party use. But the report indicates that at least some of the data could remain private.

"Staff has committed to having conversations with the businesses to explore mechanisms for keeping certain data confidential," Keene's report states.

Enforcement of the registry requirement would be conducted through spot checks. Businesses would be required to post their certificates in plain site and penalties would be "significant," ranging from administrative fees to prohibition of occupancy, according to the report.

Staff expects that developing the new online interface for the registry will cost about $125,000 and that the costs of marketing, training staff and outreach to the business community will come out between $150,000 to $250,000. Staff expects the fees for the registry to ultimately offset these expenses and keep the new system sustainable on an ongoing basis.

Comments

 +   Like this comment
Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 24, 2014 at 9:59 am

How do we define a business? What about some high school students with a start up in a garage? Or someone running a gardening business or a baking business or a retiree doing tutoring?


 +   Like this comment
Posted by KP
a resident of South of Midtown
on Apr 24, 2014 at 10:50 am

@ Resident...Good Point!

If the city council would stop allowing over sized commercial building and over crowding with new unnecessary housing structures in our little city, we wouldn't have to worry about all this.
But now, since they allowed all this excess crap to go on, they will need to get paid for more research and charge the small businesses more money to do business.
I don't even want to mention one great little neighborhood, with nice housing and small businesses, for fear the city council and investors/contractors might try to move in on us with huge structures, etc.
Stop now! You may get a hold of this runaway city!!
Just ridiculous.


 +   Like this comment
Posted by Liberty
a resident of University South
on Apr 24, 2014 at 10:55 am

They claim they need this data to figure out the parking problem, but this data will be useless for that. At my company the square footage and number of employees has absolutely no relation to the amount of parking we use.

You'd also have to do a similar registry for residents if you really were trying to figure out parking.


 +   Like this comment
Posted by Oldman
a resident of Old Palo Alto
on Apr 24, 2014 at 10:56 am

[Post removed.]


 +   Like this comment
Posted by Say-NO-To-A-Business-Registry!
a resident of Another Palo Alto neighborhood
on Apr 24, 2014 at 11:29 am

This is another attempt to tax local businesses. The Council has NEVER showed how it, or the so-called Planning Department, intend to use this information. They have plenty of information now--which they obviously don't understand how to use.

This is what happens when retreads--like Liz Kniss--end up being on the Council.

It would make more sense to push the envelope a bit--and set a number for the businesses that can occupy some physical space. This might prove contentious--but it would offer the City an opportunity to demonstrate what a "carrying capacity" is--which they currently do not seem to understand.

BUSINESS REGISTRY--BAD IDEA!!!


 +   Like this comment
Posted by Self-employed
a resident of Crescent Park
on Apr 24, 2014 at 11:43 am

I'm nearing my 30th anniversary of self-employment in my home-based office. Would my solo practice be required to register as well, even though I'm not using commercial space?


 +   Like this comment
Posted by Enough already
a resident of Leland Manor/Garland Drive
on Apr 24, 2014 at 11:44 am

I agree with Say-NO. This is another tax. If council and staff were sincere about needing this information, they can have it without a "fee" = TAX.


 +   Like this comment
Posted by Say-NO-to-A-Business-Registry
a resident of Another Palo Alto neighborhood
on Apr 24, 2014 at 12:16 pm

> Would my solo practice be required to register as well, even
> though I'm not using commercial space?

It's an open question at the moment. Given that the City's presumptive reason for this registry is to monitor traffic, then people in home businesses can be expected to generate some traffic--although obviously nothing like we see in the main business zones.

Since it will only take a sneaky consent calender vote to increase those required to register, and there is nothing to keep the fee from getting to be huge, it's only a matter of time before the Council will most likely be sticking it to home business operators for a cut of your income.


 +   Like this comment
Posted by Jana
a resident of Crescent Park
on Apr 24, 2014 at 12:43 pm

Why can't our incompetent city council understand this simple concept. All the new hideous office buildings being built in town must have adequate underground parking for the employees.


 +   Like this comment
Posted by Judith
a resident of Leland Manor/Garland Drive
on Apr 24, 2014 at 5:12 pm

Every other city has a business tax, fee, registration requirement - whatever you want to call it. I pay $125 to the City of Los Altos every year because I submit for building permits. The same for Cupertino, Los Gatos, etc. Why shouldn't I pay my own city who provides my services?


 +   Like this comment
Posted by Midtown
a resident of Palo Verde
on Apr 24, 2014 at 6:01 pm

Yes, this is just another tax and boondoggle. Yes, every new structure should be required to have its own adequate parking (underground if needed). Yes, since Palo Alto is an "industrial" city, the old suburban rules don't apply. In a recently published survey Palo Alto has more daily incoming traffic than any other Bay area city. The City Council and the Planning Commission seem to be ignoring the survey that shows we are importing more and more car traffic.
There's an idiot's logic to this.
More businesses have offices in Palo Alto. Employees can't afford to live here. They have to drive from somewhere else. They have to park in Palo Alto. Palo Alto has not enough parking space. However,the Palo Alto Council continues to encourage new business development and new saturation housing
in the vain hope that workers will bicycle in from Fremont or Stockton where housing is less expensive.
Wow! In a supposedly intelligent city there almost cannot be a greater lack of logic.
Hey!
I dig the Palo Alto Online News ... read it every day.
I agree with many of the opinions expressed, but I don't know how much of this is getting through to our City Council.
Can you ... Palo Alto Online, find a way to let us know that our message is being delivered to the City Council?
Can you ask for (or publicly demand) and publish the Council's response on those issues that seem to concern the community?
If you, as representatives of the local press, cannot give us voice, what is left of our democracy?
Does that sound dramatic? Sure!
Is it true?
Damned right!
Can you dig out the facts?
Depends on YOU!!!


 +   Like this comment
Posted by Carol Gilbert
a resident of University South
on Apr 24, 2014 at 6:08 pm

The changing nature of office use has come with more people occupying buildings in new open floor plan configurations," Keene's report states. "This has had a perceived deleterious effect on the parking and traffic situations as well as the quality of the environment around our business district."

Whoa, maybe some effect, but less than permitting less than the required number of parking spaces for the square footage being built out!


 +   Like this comment
Posted by common sense
a resident of Midtown
on Apr 24, 2014 at 6:23 pm

1) according to a recent article in the PA Weekly there is a "3.13 to 1" jobs to housing imbalance. Obviously someone knows how many jobs there are in Palo Alto to cite a ratio to an accuracy of 2 decimal places; see weblink Web Link

2)Judith @ Leland Manor - Between 10 - 15% of your utility bill goes to the city's general fund, which pays for city services.


 +   Like this comment
Posted by Say-NO-To-A-Business-Registry
a resident of Another Palo Alto neighborhood
on Apr 25, 2014 at 10:15 am

> why shouldn't I pay for city-provided services?

This is a fair question, and one whose answer should be known—if we had a competent, and well-run, City government. For years now, the City has tried to offer up a simple-minded cost-of-services by dividing the cost-of-government by the number of residents. Such a model is hopelessly inadequate, since services to businesses, and other government agencies (schools and County) are not identified in such a model.

So, what services does the City provide the typical business? Certainly that's a difficult question to answer—since small businesses are less likely to require services like police and fire, as are larger businesses. So—it would be interesting for those businesses believing that they should pay additional taxes to identify the taxes that they are currently paying—and then offset those taxes with the services they receive. It's hard to believe any small business has made that effort—but if they did, they would see that the City is receiving money from their businesses in terms of: sales tax (if retail), TOT (Transit Occupancy Tax) if a hotel/motel, UUT (Utility Users Tax), Property Tax, Ambulance Service (if called), any number of fees associated with business start-up, and possibly fines for violating any number of City ordinances.

As to services—everyone expects some sort of police response (unless a faulty burglar alarm is involved), fire suppression/EMS response, street sweeping, and reasonably rapid response to utility outages. Beyond that—how many services are you receiving from the City of Palo Alto?

So—please take the time to determine your taxes vs services ratio – and let us know what it might be.

BTW—you can always write them a check any time you feel that you have oversubscribed your fair share of services. Any chance you might be inclined to do that?


 +   Like this comment
Posted by JS
a resident of Another Palo Alto neighborhood
on Apr 25, 2014 at 10:40 am

Quote from article:

"The need for the registry, Keene said, is clear."

"With such data, the City can begin to measure employment trends and business activity throughout the City in a cohesive and coordinated manner," the report states. "Its availability is vital for developing and measuring the effectiveness of transportation demand programs, and other transportation planning efforts."


So the City is going to collect $413/business x 3,000 businesses (or $1,2390,000) for a registry fee and the City is going to collect another $150,000.00/year in annual fees (average of $50/business x 3,000 businesses). The article states that the City staff plans to create a data base (read large contract for outside consultant to create). Of course, City Staff will have to expand in order to staff the new positions required to administer and maintain the program (as well as study all of the data collected. The increased City Staff will be paid excessive salaries (higher than a comparable private sector position) and benefits and be able to retire early at full salary compensation for the rest of their lives.

This is another financial boondoggle that will exacerbate the City's underfunding of pensions.

Say NO to this idea. Keene is not making full sense.


 +   Like this comment
Posted by Such Nonsense
a resident of Professorville
on Apr 25, 2014 at 3:32 pm

Just another way to extort money! Why don't they find a way to extort it fron developers instead???? They're the ones with the really deep pockets.


 +   Like this comment
Posted by JS
a resident of Another Palo Alto neighborhood
on Apr 25, 2014 at 3:53 pm

Dear Such Nonsense,

The cost of implementing a dumb idea on the City's part should not be bourne by anyone (including Developers). Scrap the dumb idea altogether and it won't cost anyone.


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