Palo Alto Weekly

News - December 6, 2013

Restaurants, techies spur boom on California Avenue

With big changes on the way, Palo Alto's 'second downtown' shows steady revenue growth

by Gennady Sheyner

As Palo Alto officials prepare to give California Avenue an extreme makeover, the arty, eclectic and under-maintained thoroughfare has been quietly undergoing an economic resurgence, with restaurant activity on the upswing and tax-revenues climbing steadily.

Once the most prominent thoroughfare of the Town of Mayfield, the commercial strip near the city's geographical center has long filled a role as the smaller, funkier and slightly more disheveled sibling of downtown's University Avenue.

But California Avenue's economic engine has been quietly revving up since 2010, according to a commissioned report from the firm MunicServices, LLC. The cash receipts from the California Avenue area have risen 24 percent between the second quarter (the period from April and June) of 2010 and the second quarter of 2013, when they totaled $1.1 million.

Though that still pales in comparison to Stanford Shopping Center (which brought in $5.5 million in the second quarter of 2013) and downtown (which brought in $3 million), the commercial district around California Avenue is the only area that has seen growth in every single quarter since 2010.

Tommy Fehrenbach, the city's economic-development manager, told the Weekly that the consistently strong numbers on California Avenue reflect the solid performance of the area's dining scene. He noted that the receipts include not just California Avenue but the areas around it, including the portion of El Camino Real where Chipotle Mexican Grill, Jack in the Box and the Olive Garden do business. The economic performance of other types of businesses, he noted, have remained relatively flat.

"Restaurant activity has been increasing, and that pretty much tells the story of the increase in the area," Fehrenbach told the Weekly.

The numbers spell good news for the City Council, which has taken a series of actions in the past four years aimed at turning California Avenue into the city's "second downtown," on par with University Avenue and Mountain View's Castro Street. The most costly and controversial component of this effort is the ambitious streetscaping project, which is set to unfold next year and which will shrink California Avenue to two lanes, expand the sidewalks, add new streetlights and create flexible "plaza" spaces capable of accommodating major public events.

The area also figures prominently in the city's long-term vision. Because of its proximity to a Caltrain station and to El Camino, city officials have designated it as Palo Alto's sole "priority development area," making it eligible for regional grants to support projects that include new housing. Over the past four years, the city has also been crafting a plan for the broader California Avenue area, which includes Fry's Electronics. The plan's vision is to create an "attractive, transit-rich neighborhood shopping district," and its proposals include a design competition for new parking structures; new incentives for mixed-use developments; more bike parking and improved shuttle connections between California Avenue and the Stanford Research Park.

At a Planning and Transportation Commission meeting last week, Commissioner Michael Alcheck waxed ecstatic about the California Avenue area, calling it "an epicenter" and urging the city to "start to appreciate" the area's critical role.

"When people say real estate is about three things — location, location, location — this is the kind of thing we're talking about." Alcheck said at the Nov. 20 meeting.

Even without the city's grand plans, the area has been undergoing a market-driven transformation, with young technology companies, including Groupon and Yelp, recently opening offices near the prominent commercial strip and developers pitching new office projects, some of which involve density that far exceeds zoning regulations. One potentially transformative project for the area is Jay Paul's proposed development at 395 Page Mill Road, which would add 311,000 square feet of office space next to AOL's headquarters. The project also involves building the city a new police headquarters at a nearby site, 3045 Park Blvd.

These changes promise to beget others. Almost every large new development in the area, — including Harold Hohbach's research space and housing project at 195 Page Mill Road and the recently approved four-story building around Equinox Gym at 3159 El Camino Real — includes as part of the package new plazas, bike lanes and various pedestrian improvements. One change proposed by Jay Paul, for example, is a new pedestrian route that would fill a void between the Caltrain station and the proposed development. And in the latest nod to the area's growing high-tech prominence, the bus company RidePal in September announced its new operation around California Avenue, which promises to give area commuters a "Google shuttle" experience.

Underscoring the importance of the area and the council's desire to turn it into a second University Avenue, council members in February officially adopted "the future of downtown and California Avenue" as one of its three official priorities for 2013.

Staff Writer Gennady Sheyner can be emailed at gsheyner@paweekly.com.

Comments

Posted by Wondering?, a resident of Another Palo Alto neighborhood
on Dec 6, 2013 at 10:06 am

> The cash receipts from the California Avenue area have risen
> 24 percent between the second quarter (the period from April and June)
> of 2010 and the second quarter of 2013, when they totaled $1.1 million.

Ahhhh .. this comparison is not particularly helpful, since there are twelve quarters in the 2010-2013 time frame. On a quarter by quarter basis--we would see that the California cash receipts are about 91,000 as opposed to the 5.5 million of Stanford Shopping Center--a 50X difference.

> At a Planning and Transportation Commission meeting last week,
> Commissioner Michael Alcheck waxed ecstatic about the California Avenue
> area, calling it "an epicenter" and urging the city to
> "start to appreciate" the area's critical role.

Got to wonder why Mr. Alcheck thinks why the business activities of California Avenue can be considered as "crucial"--when it is producing so little in terms of financial benefit to the local governement's coffers?

Also got to wonder how people like Alcheck ended up on the P&TC with so little ability to see reality as it is. Stanford Shopping Center is "crucial" to Palo Alto's financial well being. California Avenue is not. It might be a convenient shopping area for people living close by, but it is in no way important to the City as a whole. Restaurants are nice--but they don't produce much in the way of sales tax revenues.


Posted by Hmmm, a resident of East Palo Alto
on Dec 6, 2013 at 10:47 am

Hmmm is a registered user.

Calif Ave is "arty"? Wow, that's sad.


Posted by John, a resident of Barron Park
on Dec 6, 2013 at 10:51 am

It is not necessary and sometimes not desirable to fill in every void.


Posted by parent, a resident of Midtown
on Dec 6, 2013 at 11:02 am

I'm looking forward to the city's planned pedestrian safety project to be completed on California Ave. Four lane streets with no stop lights are tremendously dangerous for pedestrians. Car drivers hunting for addresses or stores are not paying attention to the crosswalks and the wide streets make pedestrians harder to see, as well as exposing them to danger for a much longer period of time. I'm sure our family will visit California Ave much more often when it is safer.


Posted by Jeanie Smith, a resident of Evergreen Park
on Dec 6, 2013 at 11:08 am

Yay! I've loved Calif. Ave. since I was a kid-- nice to see it getting kudos and attention it deserves. Can't wait for all the improvements to get underway!


Posted by CroissantLover, a resident of Barron Park
on Dec 6, 2013 at 11:13 am

Streetscaping sounds great to me. Outdoor seating. Good lighting. Makes up for the hack job done on the street trees years ago. And goodness knows we need this kind of tax revenue growth.

I'm surprised, btw, the article didn't mention the Sunday Farmers Market that closes part of Calif Ave. While I prefer the tight confines and "hidden gem" nature of the saturday downtown Palo Alto market, more people go to the Cal Ave market. Surely this boosts visibility for the restaurants/etc.


Posted by long time user of CA Ave, a resident of Midtown
on Dec 6, 2013 at 11:19 am

The parking situation may stall additional development and use of CA Ave. It has taken several circles of the parking lots on both Cambridge and Sherman Avenues to find a spot the last two times I attempted to reach a merchant on CA Ave. Both times were around 3 PM. Lunch time it is impossible to find a parking situation. The reworking of CA Ave will require some re-working of those lots and the addition of parking if patronage of those merchants and restaurants is to be achieved.


Posted by Mikey Palo Alto, a resident of Gunn High School
on Dec 6, 2013 at 12:01 pm

Mikey Palo Alto is a registered user.

Still sore about the tree massacre that took place here a couple of years ago... the street really lost its charm after that... not hopeful that the Disneyfication project will be an improvement... but the fact business is good is encouraging.


Posted by KP, a resident of South of Midtown
on Dec 6, 2013 at 12:45 pm

Give our city council enough time and they will screw Cal Ave up as bad as they have downtown...they already started with the tree issue and trying to narrow the streets!
Give it a rest!
It's the only place that we can continue to drive while people wait for a parking spot!


Posted by Robert, a resident of another community
on Dec 6, 2013 at 1:11 pm

@KP

Downtown screwed up? From what I can see, downtown is a destination and is busy mornings to nights. If that doesn't constitute success, what does?


Posted by Future of Palo Alto, a resident of Another Palo Alto neighborhood
on Dec 6, 2013 at 1:14 pm

"Underscoring the importance of the area and the council's desire to turn it into a second University Avenue, council members in February officially adopted "the future of downtown and California Avenue" as one of its three official priorities for 2013."

This Council is an arrogant mess and a disaster for this City. I would like to see Cal Ave revitalized, but not in the image of University. Or Manhattan, as this Council seems to want to make us.

Given all the density they are foisting on us, we desperately need retail on this side of town. Any plan for the Fry's area should retain it as retail. I was once on board with retail and housing, but that seems to mean things like Alma Plaza and that monstrosity at San Antonio in Mountain View. That's a good location to retain as RETAIL.

Let's vote out these arrogant people who think democracy is beside the point. If they want dense City living, they could move rather than destroying Palo Alto. Someone made the claim that Marc Berman said he hoped someone built the ugliest thing possible at Maybell -- this from a guy who came out here and admitted the situation wasn't safe for the kids as it is -- if it's true he said that, he should be recalled. Anyone have a way to verify that? Please post.


Posted by spirit, a resident of Monroe Park
on Dec 6, 2013 at 5:18 pm

[Post removed.]


Posted by parent, a resident of Midtown
on Dec 6, 2013 at 5:34 pm

If the city wants California Ave to thrive as much as University Ave, they have to install multi-store parking garages like they have already done on University Ave. Until then, California Ave will primarily be for locals who can walk there from nearby offices and neighborhoods. This is why pedestrian safety improvements are so important.


Posted by like that funky aspect, a resident of Nixon School
on Dec 6, 2013 at 10:22 pm

Gee, I kinda like Cal Ave the way it is. Although I'm in favor of the reduction of lanes and the street-scape changes, I don't want to aim for Cal Ave to be "another University Ave".


Posted by Chrisc, a resident of College Terrace
on Dec 6, 2013 at 11:39 pm

I want to cry.


Posted by Frank, a resident of another community
on Dec 7, 2013 at 6:48 am

How to offend your colleagues? Try calling them techies

Web Link


Posted by Jacob, a resident of Barron Park
on Dec 8, 2013 at 9:40 am

By the time the city decides to act , high tech companies nearby will go out of business.


Posted by Please, Mr Custer, a resident of Old Palo Alto
on Dec 8, 2013 at 11:07 am

Please do NOT try to make Cal Ave another University Ave. University is for the tourists and out-of-towners. Cal Ave is the last bastion for the locals.

More and more of us are dropping our tax dollars in Mtn View or Menlo Park, so please don't take Cal Ave!


Posted by marty klein, a resident of another community
on Jan 30, 2014 at 10:05 pm

How pathetic to run what is essentially a developer's press release as "news". How pathetic to run an article about what's happening to California Avenue without quoting a single business owner or resident of the area. And what a cute oversight to not mention the petition signed by dozens and dozens of California Avenue's top businesses begging the city to slow down the development process being shoved down our throats.
Soon California Avenue will look and feel like every other "developed" section of our area--crowded, expensive, with little character. And who will benefit? The developers who took a nice little area and created a pointless big area.
Remember that the next time you're stuck in traffic at the corner of El Camino and Page Mill, or you can't get a parking space anywhere near what used to be your favorite restaurant on California Ave.
Our City Council


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