When August comes to a close, it will spell the end of an era for the roughly two dozen Palo Alto businesses that have been occupying one of the city's most conspicuous and unusual buildings.
Here, DeLeon Realty, a real estate firm at the forefront of the city's exploding housing market, occupies the same building as Project Happiness, a nonprofit that teaches locals to find happiness within. There are small law firms, accounting practices, anesthesiologists and wealth managers. Peter LeVine, whose company Vencoa is a vendor of vending machines, will be leaving after 30 years in the building.
The move has been months in the making and it doesn't come as a surprise to anyone. The land, located between Page Mill Road and California Avenue, is owned by Stanford University, and the building has long been owned and managed by the property-management company Allhouse Deaton. In October, the long-term ground lease will expire and Sand Hill Property Company will take over a new long-term ground lease with Stanford. To set the stage of the takeover, Sand Hill filed an application in January to demolish the building a construct a new one in its stead.
In describing the project to the Architectural Review Board last fall and in an email exchange with the Weekly, company officials have emphasized the positive attributes of the replacement. The old building, they note with justification, would not have met current codes and design guidelines. Built before the city established its 50-foot height limit, it exceeds the restriction by nearly 30 feet. If built today, it would also be required to have larger setbacks, offer more parking spaces and be less dense. As such, the building is considered a "non-complying" facility.
At an Architectural Review Board last September, the project's architect, Clifford Chang, described the existing building as "incredibly antiquated in almost every aspect" and an example of what one could construct "if you wanted to make the least expensive building the fastest."
The replacement building, he said, would be "a great improvement." Though the floor area would remain the same (as is allowed for replacement of non-complying facilities), other aspects of the building would be made more consistent with the city's zoning rules. The new 62,616-square-foot, four-story structure would be 50 feet tall, include the required parking and incorporate sustainable features, including solar panels.
This view found some sympathy on the board, with Vice Chair Alex Lew saying he is happy to see the Sand Hill project.
"This building is so big and non-conforming that I thought we'd be stuck with it forever," Lew said at the September meeting.
Allison Koo, Sand Hill's project manager, told the Weekly in an email that the new building would be "more consistent with the surrounding area and buildings."
The project would also include a comprehensive program to limit the amount of traffic its employees generate, which would include Caltrain passes and VTA Go Passes for workers, Koo said. It will have retail on the ground floor and a more friendly environment for pedestrians, she added.
But for some of the current tenants, the replacement project does not represent progress. For LeVine and others, it means an exodus of small businesses from Palo Alto and the latest chapter in the city's transition into an exclusive enclave for wealthiest of the wealthy. Several tenants told the Weekly that they cannot afford any other offices in Palo Alto and are moving to other cities.
When the new Class A office building is developed, most expect it to be occupied by a high-tech giant with pockets deep enough to afford the exorbitant rents the new building will surely fetch -- much like the new office development at 101 Lytton Ave., which serves as headquarters to SurveyMonkey, or the College Terrace Centre, a mixed-use development that is now being constructed 2100 El Camino Real that until recently was eyed by Yelp as a possible site for its new headquarters.
Jan Cummins, an attorney at 2600 El Camino who specializes in elderly law, knows she is unlikely to fit the profile of the new occupant. After scouring for a new location, Cummins is moving to San Mateo after 10 years of practicing in Palo Alto.
"I do think it's not good for Palo Alto because it's basically knocking out small operators, the solo attorneys and the small CPAs," Cummings said. "There's really nothing available in Palo Alto."
Others also are looking elsewhere. And even though they had ample warning that they will have to move out by the end of August, finding a new location in the current real-estate market has proven near impossible, they said.
Project Happiness is moving to Cupertino when the lease expires, the nonprofit's founder, Randy Taran, told the Weekly. Roger P. Kokores, a real estate attorney whose practice has been at 2600 El Camino for more than four decades, will be switching to a home office, though he told the Weekly that he was planning to downsize anyway. LeVine is doing the same, though not voluntarily.
LeVine said he has spent six months looking for a new location in Palo Alto and worked with two different Realtors. He said he currently pays $4 per square foot, which amounts to $2,100 in monthly rent for his office, which he acknowledges is well below the market rate. He is willing to pay twice that, but he couldn't find anything within that price range. (The average asking rate for office space in downtown Palo Alto was $8.74, according to a June Colliers International's report.) Unless a location miraculously emerges in the next month and a half, LeVine said he will work from his home in Menlo Park.
LeVine takes issue with the assertion that the Brutalist building is "ugly" or "unsightly" and contends that many residents he has spoken to do not share this view. The new building, he concedes, will likely be an architectural gem. It will also stand as a "monument to venture capitalists" and "a symbol of ultimately wealth." In some parts of the city, such a project might make sense, LeVine said -- for example, if it were replacing one of El Camino's motels.
"But what's unique about this project is that in this building you have so many small businesses," LeVine said. "Almost all of them are being dislocated out of Palo Alto."
Yet he acknowledges that the Sand Hill proposal, while problematic for existing tenants, is consistent with the zoning code and will likely be approved. The Architectural Review Board is scheduled to hold a formal hearing on the project in the next few months (its September 2015 discussion was a preliminary review, which took place before the application was filed and featured no votes) and make a recommendation.
If the board recommends approval and the city's planning director OKs the project, Sand Hill will be able to obtain building permits without any additional reviews by the council or the Planning and Transportation Commission, barring an appeal.
---
Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.
This story contains 1364 words.
If you are a paid subscriber, check to make sure you have logged in. Otherwise our system cannot recognize you as having full free access to our site.
If you are a paid print subscriber and haven't yet set up an online account, click here to get your online account activated.
