At Monday night's public hearing on the sale, the City Council signaled its strong interest in the 1932 building when it voted 7-0, with Greg Scharff and Karen Holman absent, to direct staff to appraise the property at 380 Hamilton Ave. and to begin evaluating possible uses for the site. City officials also plan to reach out to the decision makers in Washington to ensure Palo Alto remains in the mix as a potential buyer.
The hearing was the postal service's first chance to discuss with the public its plan for the downtown post office. As the Weekly reported in December, the agency is looking to sell the property and move its operations to a smaller location as part of its nationwide plan to cut costs. James Wigdel, spokesman for the postal service, said the agency had a $5.8 billion shortfall last year and is anticipating an even larger one this year.
The main reason for the budget crunch is changing consumer habits, with customers increasingly shifting to the Internet, Wigdel said. In 2006, the postal service processed 213 billion pieces of mail. The number dropped to 168 billion last year and is expected to plummet further, to between 118 billion and 150 billion by 2020. First-class mail, Wigdel said, is simply going away.
"We have to be able to cover our expenses, and so far we're having some financial difficulties because of the decline of first-class mail," Wigdel said.
Postal service officials held out the possibility that a post office will remain at its present location, though under this scenario it would occupy a much smaller portion of the Hamilton Avenue building than it currently does. The building has about 20,000 square feet of floor space. The postal service is looking to occupy only about 3,500 square feet.
Wigdel stressed that Palo Alto residents will still have a post office, though it might be a smaller one and at a different location.
"This is not a closure of the Palo Alto Hamilton station," Wigdel said. "It's a relocation.
"The community will still have the same retail services, the same P.O. boxes, everything that is available to them today. It just may not be in the Palo Alto Hamilton Station going forward."
The final decision, he said, will be made at the agency's headquarters in Washington. But even if officials choose to relocate the post office, they probably won't move it too far, said Diana Alvarado, property manager for the agency.
"We'd probably narrow it down to (within) three or four city blocks or even, if we could stay on Hamilton, that would be very beneficial to us because we do like the location."
Councilman Pat Burt suggested to the postal-service officials that the agency will have a hard time finding affordable space to rent in downtown Palo Alto, a place known for high prices and low vacancies.
"Why wouldn't you want to simply shrink it and stay where you are?" Burt asked, "Why wouldn't it be your first choice?"
Councilman Sid Espinosa called the Birge Clark-designed post office a "gorgeous building" and one that is historically significant to the city. But while he advocated preserving the building, he also urged staff to consider "creative uses" for areas around the building, including the parking lot. Councilwoman Gail Price asked staff to appraise the site, consider ways to adapt the space for other functions and plan strategically for its future. The rest of the council voted to support her proposal.
"I think this is a great opportunity for us to be creative," Price said. "This is a key facility and location — a very important site within the City of Palo Alto.
"For us to fully engage in the discussion, it seems that critical information at this point is an independent assessment of the value of the site before us."
Members of the public expressed a range of emotions about the post office's plan. Some conveyed sorrow at the potential closure of the iconic branch and others said they were heartened by the thought that, pending the agency headquarter's decision, there is still a chance the building won't be sold. City resident Priscilla Bates said she wouldn't object to the site's redevelopment as long as there's a post office downtown, at or near the existing site.
"To me it's an ideal location for the post office, and I hope it doesn't have to move anywhere else," Bates said. "I'd definitely like to see the post office remain where it is in some form. If it means using less of the building, that makes sense to me."
Another resident, Jean Bozeman, called the building "unique" and said it speaks to the city's "architectural soul." She said she's saddened to see a building that was built during the Great Depression get sold during another economic downturn and cited the building's "significance to architectural heritage to Palo Alto."
"It's the scale and also the setbacks and the landscape and the classic design that are really emblematic of Palo Alto and what it's been for the past 80 years," Bozeman said.
Members of the public have until March 7 to submit their comments to the postal service about the planned sale of the Hamilton Avenue branch. Comments should be sent to Diana Alvarado, Pacific Facilities Service Office, 395 Oyster Point Blvd., Suite 225, South San Francisco, CA 94080-1930.