Edgewood Plaza builder loses $94,200, wins green light

City Council penalizes Sand Hill Property Company for demolishing Eichler building

After inadvertently destroying a physically decrepit but symbolically precious piece of Palo Alto history, the developer behind Edgewood Plaza will have to pay a fine of $94,200, the City Council ruled Monday night.

With a 7-1 vote, the City Council on Monday gave the developer, Sand Hill Property Company, the final green light to complete the long-awaited construction project at Edgewood Plaza. The development at 2080 Channing Ave. includes a renovated grocery store, now occupied by Fresh Market, two commercial Eichler-style buildings and 10 homes. Sand Hill will also have to pay for an illegal demolition, though the amount will be far smaller than two council members deemed appropriate.

The council had initially approved the proposed "planned community" zone change to enable the development in March of 2012. As part of the agreement, which granted Sand Hill the right to exceed zoning regulations, the developer was required to provide a series of public benefits. These include the grocery store, a small park and preservation of the two smaller commercial buildings, which were designed by A. Quincy Jones and constructed by iconic developer Joseph Eicher.

As part of the council's approval, one of the buildings was to be rehabilitated at the site. The other was to be taken apart and reassembled at a different location. When the council learned in September 2012 that Sand Hill's contractors had demolished the building they were supposed to disassemble, members weren't happy. Councilman Marc Berman said he was "heated" when he first heard about the demolition -- so heated that would've signed off on a $1 million or a $2 million fine. He's had "six months to come down off that point," Berman said.

His colleagues seemed to reach the same level of forgiveness. With Mayor Greg Scharff absent and Councilwoman Karen Holman dissenting, the council granted Sand Hill a fresh approval, though instead of reassembling the commercial building the developer will have to reconstruct it out of new materials. Sand Hill will also be required to install replicas of original wood window frames and contribute $94,200 to the city for a cause to be determined.

The decision largely adhered to recommendations from the city's Historic Resources Board and Planning and Transportation Commission. Both advisory bodies agreed that the demolition, while highly regrettable, shouldn't impede the long-awaited reconstruction of the long dilapidated plaza, which once housed a Lucky's supermarket and which had fallen into disrepair in recent years.

It helped that that the city's historical consultant had assessed the building as badly damaged before the demolition. In fact, the city's decision to retain it had less to do with its condition or appearance and more to do with its style and character. The shopping plaza, which was constructed in the mid-1950s, is a very rare example of an Eichler-style commercial building. The modern style, common in many areas of Palo Alto, is characterized by post-and-beam construction, sliding doors and large windows.

The big dilemma for the council had to do with deterrence. Developers of "planned community" projects haven't always been scrupulous about providing the agreed-upon public benefits (in several cases, for example, plazas that were supposed to be public were appropriated by nearby businesses). In this case, Sand Hill didn't simply skimp on a public benefit, it bulldozed it. What's to stop the next developer to do the same thing, council members asked?

Holman argued that it would take more than $94,200. Given Palo Alto's astronomical land values, she said, future developers could just look at such fines as "the cost of doing business in this community."

"The demolition of the building, for whatever reason, was a violation of CEQA (California Environmental Quality Act), the PC zone ordinance, the project approvals and the provision of public benefits," Holman said. "That's a lot of violations to have happened."

Holman also argued that Eichler was for Palo Alto and surrounding areas a "real engineer of social change," a developer who had built affordable homes middle-class Americans and who allowed no discrimination on the basis of race, color or creed at his homes during a period of tense integration. She argued that the fine for demolishing an Eichler commercial building should be about $170,000, roughly half of the estimated increase in Edgewood Plaza's value. Councilman Greg Schmid agreed and reasoned that replacing a historical resources isn't the same thing as retaining it.

"I think sharing the increased valuation between the developer and the city makes sense," Schmid sense.

After the rest of the council rejected the larger fine, Schmid joined the majority in approving the staff-recommended fine of $94,200, which is about 10 percent of the total construction cost. The Planning and Transportation Commission had also recommended a $94,200 fine, which was at the high end of the penalties initially proposed by staff.

Berman stressed that the penalty in this case should in no way be seen as a precedent for future fines.

"I like it being an X factor," Berman said of the fine. "If another developer does this, I'll be happy to sign off on a payment four times this amount."

The developer chalked up the demolition to an unfortunate misunderstanding. John Tze of Sand Hill said the company's contractor heard the assessment from the consultant about the building's poor condition and proceeded to knock it down of his own accord.

"We had no intent to disregard a known public benefit," Tze said. "There was no advantage to us for demolishing the building."

Tze apologized for the act.

"We made a mistake and I take responsibility," Tze said.

The council didn't make any decisions Monday about how the money would be spent. The two most popular proposals that were kicked around by the planning commission last month involved spending it on a historical-rehabilitation project elsewhere or building a sidewalk on one side of West Bayshore Road, between the plaza and East Palo Alto. The council agreed to save that discussion for a future meeting within 90 days.

In the mean time, neighbors have a reason to celebrate. After years of negotiations and revisions to the development plans and the unexpected demolition, the plaza is finally on its way to getting completed. Gail Olsen, who has lived near Edgewood Plaza for 46 years, said she and her neighbors are excited about seeing the site's revitalization.

"After years of living around the corner from this blighted shopping center, it was a thrill the day that Fresh Market opened," Olsen said.

"I'm really looking forward to seeing the rest of the shops and services that will go in there," she added.

Councilman Larry Klein, who made the motion to fine Sand Hill $94,200, echoed her enthusiasm.

"It's certainly a big improvement over the derelict shopping center we had there for many years," Klein said. "I look forward to the rest of it being complete."

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Like this comment
Posted by resident
a resident of Duveneck/St. Francis
on Oct 8, 2013 at 8:26 am

The fact that the City is imposing a fine is sufficient response
to what happened here as a deterrent to it happening again. However, the amount of the fine imposed here is far too high based on the facts, and the outcome for the project is the same or better than what would have occurred. What the Council should be far more concerned about is why there was no sign/design control over the renovation of the gas station earlier this year at this location. This actually has an impact on the project and says a lot more about Palo Alto to everybody who drives down Embarcadero each day than the amount of the fine leveled against Sand Hill.

Like this comment
Posted by Cassie
a resident of Downtown North
on Oct 8, 2013 at 9:00 am

Out with the old in with the new!

Like this comment
Posted by Kate
a resident of Duveneck/St. Francis
on Oct 8, 2013 at 9:46 am

One thing that is badly needed is a stop sign at the entrance FROM the parking lot TO St. Francis Drive. I almost got killed by a driver barreling out of the parking lot, making a left turn onto St. Francis, and speeding toward Embarcadero. This ivery dangerous situation should be remedied asap. And yes, the Shell Station is an eyesore. Just detracts from the shopping center.

Like this comment
Posted by 35 year resident
a resident of Old Palo Alto
on Oct 8, 2013 at 10:18 am

It was a run down, cinder block box for God's sake. Who cares?

Like this comment
Posted by 35 year resident
a resident of Old Palo Alto
on Oct 8, 2013 at 10:19 am

Forgot one thing....another money grab by the city.

Like this comment
Posted by A neighbor
a resident of Duveneck/St. Francis
on Oct 8, 2013 at 11:33 am

Reducing by two the number of homes the developer is allowed to build on the site would have sent a meaningful message to deter other developers from acting illegally and later accepting trivial symbolic consequences.

Like this comment
Posted by Nayeli
a resident of Midtown
on Oct 8, 2013 at 11:50 am

It would be nice if they could bring back EDGEWOOD EATS! I really miss it -- and I felt that it did more for the fraternal nature of the city than any pile of bricks.

Like this comment
Posted by Erik
a resident of Another Palo Alto neighborhood
on Oct 8, 2013 at 12:23 pm

What was behind this was the "planned community" again. Looks like this PC thing is spinning out of control and make me feel disgusted. Do we, residents, still have any control over it at all? Or do we just count on the city council that doesn't seem to be dependable.

Like this comment
Posted by Resident
a resident of Another Palo Alto neighborhood
on Oct 8, 2013 at 12:34 pm

Does anyone get the feeling that the City are really more interested in the money they garner from this fine and how to spend it more than the fact that we now have got rid of blight. Remember, blight was the hot topic just a week ago. Perhaps they want more blight so that they can get some more fines to spend!!!!

Like this comment
Posted by Reimburse the dude
a resident of Leland Manor/Garland Drive
on Oct 8, 2013 at 12:36 pm

That developer should be rewarded, if not reimbursed, for ridding of us of a crumbling, delapidated, derelict eyesore. Eichler buildings were meant to be TEMPORARY ( according to an elderly friend who used to work for Joe Eichler ), never intended to last long enough to become historic buildings! That's why they were built on the cheap, why they have a single-wall construction, and why they are made of toxic materials. Also why they burn to the ground in the blink of an eye ( never inhale the smoke).

Like this comment
Posted by Boyd
a resident of Greenmeadow
on Oct 8, 2013 at 12:51 pm

Everybody came out ahead on this one.

Like this comment
Posted by Not an issue
a resident of Community Center
on Oct 8, 2013 at 4:22 pm

Bravo to the developer for ridding us of this eyesore. The keywords here " physically decrepit". If this was such an Important structure why was it nt taken care of? Where was Karen Holman, who in her usual out of touch wants a larger fine, while this structure that she was waxing about at the meeting was falling into a state of disrepair?
Good bye and goof riddance to this piece of junk.
And mark Berma needs to get a grip-- he won't deal with real issues facing the city but is ready to levy a $2 million dollar fine?
What a council!!!!!

Like this comment
Posted by What a bunch of
a resident of Green Acres
on Oct 9, 2013 at 12:59 am

I'm sure they will happily use the fine money to try to force the huge vioation of residential zoning down the throats of the Maybell neighbors.

Like this comment
Posted by Not Buying It
a resident of Old Palo Alto
on Oct 9, 2013 at 8:17 am

Anyone involved in the project, even the guy on the bulldozer, would know what the project entailed. It is IMPOSSIBLE to imagine that the entire crew out there that day would not have known that the buildings weren't set for demolition. The developer purposely tore that building down with minimal repercussions: a tiny fine and the lucrative contract to build a new building where the old one was.

Like this comment
Posted by Totally corrupt
a resident of College Terrace
on Oct 9, 2013 at 9:35 am

The Council says that this $94k fine will "send a message" to future developers.... yeah, the message is if you illegally tear down a historical building in the city of Palo Alto you'll face a tiny fine and then be rewarded by getting the contract to build a brand new building in it's place. So sick of this same old story being played out time and time again.

Like this comment
Posted by oh well
a resident of Old Palo Alto
on Oct 9, 2013 at 2:49 pm

Guess it doesn't matter that the city hired an outside "historical consultant" who neither lives in Palo Alto and who has no credentials to support their claim as a "historical consultant". This supposed "historic consultant" was on site during the demolition process and failed to notify the contractor and/or those working for Sand Hill Property Company that demolition of this historic building was not approved. Seems the outside consultant forgot which party they were representing and favored Sand Hill Property Company's influence. What a pity! The sad part is that the Chief Building Official and the Planning Director failed to place a stop work order on the site until they were told to do so by the city attorney. Guess this speaks volumes about the incompetency in these two city departments.

Like this comment
Posted by historymatters
a resident of Old Palo Alto
on Oct 9, 2013 at 5:27 pm

There is no doubt that Edgewood was in disrepair and an eyesore, however, it was Joseph Eichler's only commercial project ever. He is a significant and important historical figure to the bay area (and California) and because of this, this whole debacle deserved much more attention than it got. Shame on Palo Alto for letting this and other buildings (Juana Briones house for one, as well as Birge Clark homes, Eichler homes and simply other architecturally interesting homes like the one razed on Waverley and Santa Rita recently) get demolished at all. This town is well on it's way to looking like a new track home suburb with its bloated, ugly stucco and red tile roof mcmansions popping up. Yuck. And I don't think for ONE MINUTE that Sand Hill Properties didn't plan it this way all along. $94,200 is nothing to them.

Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Oct 9, 2013 at 7:46 pm

Eichler had no direct involvement on this project, his partner did. Strike one on "only commercial building that Eichler built."

Beyond the dereliction of the buildings, they were not earthquake safe, did not have modern electrical (and safe) infrastructure, instant fire traps given the building materials, no energy saving features, etc. The buildings were not fit for habitation nor for modern shopping/grocery store applications. Strike two.

The demolished building in question was going to be moved and then made over. Apparently there were many renovations and repairs made previously, leaving very little that was original (and salvageable). Given the plans, you would have no idea or visibility to any of the remaining/stable materials (e.g., framing 2x4s). The reality is that the new building will have the same footprint, will look better than one will know the difference. Strike 3.

Move on and be thankful that this project is finally on its way towards the finish line.

Like this comment
Posted by PaloAltan
a resident of Barron Park
on Oct 9, 2013 at 9:03 pm

The city took all the money from fining school, developer.. and the residents get the tax initiative. Don't let that one slip under the election in Nov my friend!

Like this comment
Posted by SteveU
a resident of Barron Park
on Oct 10, 2013 at 7:23 am

SteveU is a registered user.

You know, there may be a reason this was the only 'Eichler Commercial' venture: They realized it was a mistake.

The developer probably could have avoided the fine by building a few Senior Housing Units .

PC Zoning must go. It is just askin to be abused.

Sorry, but further commenting on this topic has been closed.

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