Palo Alto's ambitious quest to turn California Avenue into the next University Avenue or Mountain View's Castro Street is facing major delays and uncertainty over funding because of legal challenges from a small group of merchants opposed to the proposal.
The long-debated project was unanimously approved by the City Council a year ago after public testimony from dozens of area residents and business owners, with most speakers enthusiastically supporting the proposal and urging the council to adopt it. Council members argued that the largely grant-funded project would make California Avenue more vibrant, walkable and economically prosperous.
Now, the much-touted project is in danger of losing its funding because of two lawsuits brought by a handful of area business people. The courts have rejected many of the arguments in these lawsuits, but the project's opponents have succeeded in at least one important respect: By tying up the project in litigation, they have forced the city to delay construction and to forego the $1.2 million grant from the Metropolitan Transportation Commission (MTC) that officials were banking on to implement the lane-reduction plan.
Planning Director Curtis Williams told the Weekly in an interview that the city is still confident it can get the state money for the project in the next round of grant applications. City officials are now looking at other grant sources as well.
"The MTC won't move forward until we clear the lawsuit," Williams said. "But we're still very comfortable that we'll move forward with the project and have a grant."
Officials had hoped to launch construction this spring and complete it by fall. Now, it looks like the project will be pushed forward by at least six months to a year, Williams said.
While Williams called the delay "disappointing," he said the project still enjoys enthusiastic support from the Santa Clara Valley Transportation Authority (VTA), the agency that disperses MTC funds to local jurisdictions.
Opponents of the streetscape project -- a group that includes owners of Mollie Stone's supermarket, Antonio's Nuthouse, the camera store Keeble & Shuchat Photography and the California Paint Company -- have argued in their lawsuits that reducing lanes on California Avenue would slow down traffic and, as a result, decrease their business. They have also maintained that the city violated state law in its environmental analysis of the impact of the streetscape project.
The courts have already dismissed the first lawsuit that challenged the project -- one that was filed by Terry Shuchat and resident Joy Ogawa. But Santa Clara County Superior Court Judge Patricia Lucas determined that the city approved its environmental documents and grant applications in the wrong sequence, a ruling that forced the council to revote on these documents in November. Lucas also upheld the validity of the city's environmental analysis, which indicated that the streetscape project would bring with it few traffic impacts.
Related story: Judge dismisses challenge to California Ave lane reduction (April 13, 2011)
But the city's legal victory in the Shuchat case rings somewhat hollow these days. First of all, Shuchat and Ogawa are now appealing the court's dismissal of their case. They are now joined in their appeal by the owner of Antonio's Nuthouse and by former Vice Mayor Jack Morton, an accountant whose office is located in the business district.
William Ross, who is representing the plaintiffs, recently submitted a notice to the city stating the plaintiff's intent to appeal the court's decision to dismiss the Ogawa suit.
Then there's the second case, filed by Robert Davison of the California Paint Company. Earlier this month, Lucas agreed to hear his challenge, despite the city's prior argument that it does little more than rehash the arguments from Ogawa and Shuchat's suit.
Related story: Plan to cut lanes on California Avenue challenged again
Davidson argues that the city violated the California Environmental Quality Act by splitting the streetscape project into segments rather than evaluating the impacts of the full project. It also argues that the city failed to evaluate the full impacts of the proposed lane reduction.
The city's environmental analysis, Ross had argued, "did not consider either the temporary or permanent impact of the Project construct, which is still undefined, or the permanent lane reduction that would impede access to existing businesses."
"Specifically, customers would be unable to reach businesses in the Project area, which could result in business disruption and closure," Ross wrote. "Business closures and resulting economic blight is an impact on the physical environment that must be assessed in an environmental document."
In a response to the Davidson lawsuit, City Attorney Molly Stump argued in a March 15 brief that the suit should be dismissed because Davidson did not bring his concerns forward at the "administrative level" during the planning process. She also contested Davidson's arguments (which were also the arguments brought forward in the Ogawa case) that the city failed to accurately describe the project in its environmental documents and that it illegally "segmented" the project (that is, split it into phases) to get environmental clearance.
"Planning, funding, designing and constructing a project is not segmentation; it is the logical course of events for completing a public improvement," Stump wrote in the March 15 response.
Stump acknowledges in her response to the Davidson suit that the merchants had provided "substantial evidence in the form of personal observations" that the lane reduction would create traffic and economic impacts. But "mere observations without factual support that contradicts an analysis or study do not rise to the level of substantial evidence that the agency must consider," she wrote. Palo Alto's analysis concluded that the lane reduction would have a "less than significant" traffic impact.
"In this case, the personal observations consist only of speculative lay opinions challenging a highly technical traffic engineering report," Stump wrote.
While the court cases slog ahead, city planners are proceeding with design work on the streetscape project. In addition to the $1.2 million in grants Palo Alto hopes to receive, the city is chipping in about $500,000 in local funds for the project. The council had recently asked staff to consider widening sidewalks at California Avenue and explore other improvements -- including creation of a new plaza -- on the commercial strip that stretches from El Camino Real to the Caltrain tracks.
Williams said staff is tentatively scheduled to discuss the project with the Planning and Transportation Commission on April 25 and with the council in late May. The city hopes to finalize the design, he said, "so that once we get the grant funding renewed, we are ready to roll."
He said staff is also meeting with merchants to discuss the phasing of construction.
"Regardless of when it begins, it will involve a certain level of disruption," Williams said. "We want to get their input before we proceed."