The City Council voted 7-2 early Tuesday morning, with Councilman Greg Schmid and Councilwoman Karen Holman dissenting, to approve a zone change for Lytton Gateway, a four-story building at the corner of Lytton and Alma streets that would include offices on the top three stories and space for retail and a nonprofit group on the ground floor. The vote followed months of negotiations between the applicants, Lytton Gateway LLC, and Palo Alto's planning commission and council members. During that time, the project was scaled down from five stories to four and the developer was asked to scrap the plan to include 14 affordable-housing units in the project and to provide space for retail at below market rate.
Once built, the project will transform a site that was once occupied by a Shell gas station and become the most prominent example of the city's recent push toward development that encourages people to use public transportation, a key tenet of New Urbanism. The building at 355 Alma St., would be 50 feet tall and would include a corner tower about 70 feet in height. The council agreed with the applicants' assertion that the building's location near a major transit hub justifies its large size and high density.
"There are certain locations where you do need mass to create anchors and scale for public spaces and for the community to use those spaces," said Jim Baer, a developer who was a member of the application team along with Lund Smith, Boyd Smith and Scott Foster.
Lund Smith called the project "progressive" and said it is "an example of what an urban development can provide."
But the project met a mixed reaction. Some lauded it as perfect for its location and others argued the new building would further exacerbate the parking problems in the adjacent Downtown North neighborhood.
Michael Griffin, a former planning commissioner who lives in Downtown North, told the council he would be willing to support the idea of transit-oriented developments downtown but not if they add to parking congestion. He urged the council to specify in its approval that the developer's fees be used only to develop a program for Downtown North restricting parking to those with permits.
Barron Park resident Winter Dellenbach lambasted the entire "planned community" zone designation, which allows developers to exceed zoning regulations in exchange for negotiated "public benefits." The benefits offered by Gateway developers can hardly be considered such, she argued. She cited the developers' proposal for ground-floor retail space, which they earlier said could include a financial-services provider such as a bank.
"There's no one in this town who really thinks that a bank is a public benefit in exchange for this hugely dense, tall building," Dellenbach said.
Others downplayed the parking problem and asked the council to green-light the development. Irwin David, who lives nearby on Alma, said it's time for Palo Alto to start charging for parking. Steve Langdon, who also lives downtown, stressed that downtown parking spaces are public and should not be restricted to neighborhood residents through a parking program. To do so, he said, would unfairly punish downtown workers.
"The streets in our neighborhood aren't deeded to anyone," Langdon said. "They're public. They're adjacent to a commercial area, which everyone in the neighborhood benefits from."
But the council sided with the Downtown North residents and agreed that parking is a major problem that needs to be addressed. Council members accepted Vice Mayor Greg Scharff's proposal to take some of the funds that the developers must contribute to the city's affordable-housing fund and to use them instead for parking improvements. The agreement the council approved includes close to $2 million for future parking improvements such as a new garage. Chief Transportation Official Jaime Rodriguez said a new garage would cost between $5 million and $10 million, depending on the location.
Scharff praised the package of public benefits and said that the building itself can be considered beneficial.
"I think this is a prime site and having an office building — a Gateway project — is itself a public benefit," Scharff said.
The council's approval followed more than five hours of wrangling over details, with numerous motions and amendments dealing with everything from the nature of ground-floor retail and the amount of money the applicants should contribute. The approval included Holman's suggestion that the building's below-market-rate rents for nonprofits last for the lifetime of the project rather than for 10 years, as was initially proposed. It also included Scharff's proposed provision that the retail portion be restricted to such businesses as restaurants and coffee shops — not banks.
Holman ultimately voted against the project, saying she doesn't consider the corner of Alma and Lytton a real "gateway site." But all her colleagues with the exception of Schmid praised downtown's newest development.
"This is an exciting and appropriate building for this site," Councilman Sid Espinosa said. "I'm excited to see this become a reality. This is a great day for Palo Alto."