With one more house turned over for commercial use and a guaranteed grocery store, Alma Plaza is a step closer to transforming from a virtual ghost-town shopping center to 37 homes, 14 apartments and around 27,000 square feet of commercial space.

Additional retail and the grocery store guarantee came out of a Monday night proposal by Vice Mayor Larry Klein at the Palo Alto City Council meeting, which pushed developer John McNellis’ plans closer to what many neighbors demanded.

“It feels like a step in the right direction,” said Jeff Greenfield, one of the members of the Friends of Alma Plaza group that had gathered around 900 signatures requesting that the vacant shopping center remain “primarily retail.”

He said he was happy the council’s decision sided more closely with the Planning and Transportation Commission’s recommendation than before -- with more retail.

“That’s what we’re looking for,” Greenfield said.

Last month, the council narrowly approved a plan for 38 homes, about 25,000 square feet of retail and 14 below-market-rate apartments.

Council members John Barton, Peter Drekmeier, Dena Mossar, Jack Morton and Judy Kleinberg voted in favor of the plan, though Kleinberg said Monday night that she “had not meant to vote for the ordinance as it was” and thought there would be more discussion last month.

Dissatisfied with last month’s outcome, Kleinberg Monday quickly seconded Vice Mayor Klein’s proposal to alter McNellis’ plan for the 4.2-acre site on Alma Street and East Meadow Drive.

She called the Alma Plaza decision a “legacy vote.”

Klein agreed.

“I, for one, don’t want us to be rushed into it. It’s more important we have it right,” explaining the need for his changes to McNellis’ plan.

Unlike last month’s close vote, Monday night’s vote was unanimous, with Mossar absent. It represented the first reading of an ordinance approved last month.

Following Klein’s proposal, the revised plan raised the minimum grocery store size from 10,000 to 15,000 square feet and removed one of the 38 homes in exchange for an additional 1,800 square feet of retail.

The changes also addressed a concern about ensuring that the retail building would indeed contain a functional grocery store instead of sitting vacant for an extended period. The city would require a grocery store to be up and running within 15 months of signing a lease agreement.

McNellis agreed to the proposed changes, though he objected to 15,000 square feet as the minimum grocery size.

“A 12,000-square-foot market is probably much closer to what we’re going to get,” McNellis told the council. He has long maintained that grocery chains aren't building stores in that size range.

"I have to somehow pull that off," he said of the 15,000-square-foot market.

More than 20 people spoke at the meeting on both sides of the issue.

Edgewood Plaza neighbor Larry Clark supported McNellis’ plan and not expanding the grocery store because “everybody goes to Costco.”

Councilwoman LaDoris Cordell was among the four council members -- including Klein, Mayor Yoriko Kishimoto and Councilman Bern Beecham -- who switched to approve the project this time around.

Yet she admonished McNellis for a late compromise proposal at last month’s meeting -- to exchange another home for a retail building -- as “not appropriate.”

“I regret that I did not object strenuously,” Cordell said of McNellis’ proposal that did not provide advance notice to the public.

Several council members unsuccessfully tried to amend Klein’s proposal throughout the night. Councilman Morton hoped to trade the 38th house for open space instead of retail and Mayor Kishimoto called for a higher diversity of housing types.

Klein’s proposal contained an or-else clause: if McNellis did not agree to the zone restrictions, the council would direct the Planning and Transportation Commission to rezone Alma Plaza to a “Neighborhood Commercial” zone, or something similar.

“What I do not want to do is send it back to Never Never Land,” Beecham said, warning of allowing broader zoning options beyond Neighborhood Commercial.

In addition to the 37 single-family homes, about 27,000 square feet of commercial space and 14 below-market-rate apartments the site will have a half-acre dedicated park.

After the council approves the ordinance in a second reading, both the Architectural Review Board and the Planning Commission will conduct further reviews of the design of the site before returning it to the council.

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