City Council looks to protect Palo Alto's retail

With office growth booming, City Council to consider 'near-term' revisions to zoning code

Concerned about office buildings squeezing out local neighborhood-serving retailers, Palo Alto officials on Monday proposed revising the city's zoning code to offer small businesses a little help.

The City Council debated a variety of proposals for relieving some of the pressure that small businesses have experienced in recent years, as rents have continued to soar in downtown and California Avenue. While the council didn't make any decisions, members agreed that the challenges caused by too much large-scale commercial growth demand solutions sooner rather than later. Several council members, including Pat Burt and Larry Klein, were particularly interested in near-term changes that can be implemented before the city completes the update of its land-use bible, the Comprehensive Plan.

Burt proposed a long list of zone changes for the city to explore, including putting more emphasis on housing in the downtown areas.

"My interest would be to look at reducing commercial zoning downtown and replacing it to some degree with residential," Burt said.

This would not be a "wholesale change" but a set of small adjustments, he said.

Burt also raised concerns about new businesses taking over basements in traditional retail buildings and filling them with office employees.

"Our code does not have anything that governs retaining basement areas as supporting retail," Burt said. "What we're seeing is large-scale conversion of retail-supporting basement to office."

His colleagues voiced similar concerns about retail's struggles and the need to offer stores near-term relief. Councilman Greg Scharff said it's important to make sure buildings on University and California avenues keep their retail spaces because once the use of those sites changes, it's hard to get retail back. He recited a catalogue of small downtown businesses that have recently left and were replaced by offices: Fraiche Yogurt (which moved down the block on Hamilton Avenue), Zibibbo, Rudy's Pub, and Jungle Copy.

Scharff said he'd like to see the city "expand retail" in downtown and California Avenue.

"Once you break the block, it gets so much harder to get it back," Scharff said. "I'm thinking the longer we dither on this and not take the bull by the horns on retail, the harder it is to solve the problem down the road."

He also agreed with Burt that "fake retail" is a "real issue."

"We want to make sure people don't run an office in the back and put fake retail in the front, basically," Burt said.

But Councilwoman Gail Price argued that the city should stay the course with its "Our Palo Alto" effort, a broad outreach initiative aimed at getting public feedback about the Comprehensive Plan update. It's not feasible, she said, to expect staff to proceed with this complex endeavor while at the same time managing dozens of different plans and initiatives relating to traffic, parking and zoning. She made a case for considering changes in the context of the broader discussion.

"We keep acting as if we have to do everything and do it perfectly by next week," Price said.

Councilman Marc Berman also said the different near-term initiatives should be pursued under the one "umbrella." Making big changes before the Comprehensive Plan effort is complete, he said. would be "totally unfeasible, and it's also the wrong way to go about achieving the changes that we all think are necessary in the community."

But most of their colleagues felt that the city needs to drastically rethink its zoning rules and that this should happen soon. Councilman Greg Schmid spoke at length about the predominance of offices in new downtown development. Just about every other city, including Mountain View, Menlo Park and San Francisco, creates plans that couple commercial developments with residential ones. Palo Alto, by contrast, seems to be only attracting offices.

"Everywhere in the west Bay, where the economy is booming, they are building mixed-use neighborhoods, with one exception: downtown Palo Alto, with it's 2 percent residential portion," Schmid said.

On Oct. 8, planning staff is scheduled to return to the council with a list of options for possible near-term zoning revisions.

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5 people like this
Posted by Silly
a resident of Embarcadero Oaks/Leland
on Sep 9, 2014 at 4:00 pm

Maybe the city should just stop approving huge office buildings and offices with no parking like they've very recently done on Hamilton at Emerson and Hamilton at Ramona, just to name a few.

PS: "Residences" aren't retail and current residents have no place to park now because of all the new offices.

Like this comment
Posted by Robert
a resident of another community
on Sep 9, 2014 at 4:03 pm

>current residents have no place to park now because of all the new offices

Its called a driveway/garage

2 people like this
Posted by musical
a resident of Palo Verde
on Sep 9, 2014 at 4:05 pm

But I converted my garage into an office. :)

Like this comment
Posted by Resident
a resident of Another Palo Alto neighborhood
on Sep 9, 2014 at 4:39 pm

"Fake Retail" Please can we have a definition for this.

Is this going to be the new catchphrase for Palo Alto businesses that don't make it?

4 people like this
Posted by Citizen
a resident of Barron Park
on Sep 9, 2014 at 4:40 pm

Sigh. As if Downtown and Cal Ave are the only places we need retail and they can continue to treat pockets of Palo Alto such as Greenacres/Barron Park (which are right by many of our schools) and Midtown like they are to be used as a repository for everything nasty they don't want on their side of town.

We need retail and amenities near where many of us live. We've taken your development, now we need some of the retail they displaced back.

3 people like this
Posted by Rupert of henzau
a resident of Midtown
on Sep 9, 2014 at 4:49 pm

I thought we lived in a free market economy. I and many other Palo Alto resident shop in MV and MP. Why? Because that is where you can find affordable general and grocery shopping- I.e. Real sized grocery stores, target, wal mart , best buy etc. the city tried " protecting " local retail,years ago,when they forced grocery stores to be extra small so as not to compete too much with JJ&F and look what that got us. Local neighborhood serving retailers means higher prices.

5 people like this
Posted by Midtown
a resident of Midtown
on Sep 9, 2014 at 5:12 pm

I shop where there is parking and no grid lock, that is not Palo Alto.

5 people like this
Posted by Lila
a resident of Crescent Park
on Sep 9, 2014 at 5:49 pm

Again, city council creates a mess and then it dawns on them that we have a problem. They never supported small retail before and now that most of it is gone, they are concerned? A little late in my opinion. There is simply no looking at the big picture and no vision for this city. Still counting the days until we can elect and new city council. And now Pat Burt wants to add more housing to downtown!!! November can't get here soon enough....

1 person likes this
Posted by resident 3
a resident of Another Palo Alto neighborhood
on Sep 9, 2014 at 6:16 pm


I agree with you. Hilarious option to switch to housing, with a magic wand?

How is housing somehow better than office space from an infrastructure point of view? Housing needs parks, schools, services, and if you have one slumlord with a property that he/she pays next to nothing in property taxes, the revenues will never add up.

At least the office people leave.

Never thought I'd agree with Price and Berman, is this the twilight zone?

NO to switching to housing. And yes IT IS TOO LATE to solve the problem.

I'll tell you who you can lean on - the office lords. Convince them to give cool respectable retail a chance. Don't gouge them with rents, and make them interesting for residents.

The last big retail venture I heard opening a flagship store downtown Palo Alto, other than a restaurant, was a sex shop. That must be doing great in the business district. Or has that also closed?

Let's just forget University and Cal Ave. And maybe we can open a residential type downtown in the Palo Alto areas which are asking for more retail.

Funny how PACC has hijacked the public areas to give away to developers. When we bought into Palo Alto, we thought the public spaces came with the deal, but apparently not. We're supposed to stay in our little neighborhood enclaves and drive away somewhere else for the town feel.

5 people like this
Posted by Janette Herceg
a resident of College Terrace
on Sep 9, 2014 at 8:12 pm

Council members neglected to mention University Arts leaving Palo Alto after 60 year in downtown...they're now in Redwood City. A huge loss for Palo Alto and an example of PA's fading image of a hip shopping destination.

Like this comment
Posted by musical
a resident of Palo Verde
on Sep 9, 2014 at 8:35 pm

Oh, I think University Arts was mentioned, while lamenting that the location is now the "Institute for the Future," and something about the basement space, which previously supported retail, now becoming office space.

2 people like this
Posted by Silly
a resident of Embarcadero Oaks/Leland
on Sep 9, 2014 at 10:32 pm


The Institute for the Future is one block closer to Alma where Diddams-Waterworks were; part of IFI faces the Creamery at Emerson and the rest runs almost to Osteria, 3/4 of the the block.

University Art -- now vacant -- was a block away at Ramona and Hamilton just across from City Hall. It was diagonally across from the furniture store faces City Hall on the other side of Hamilton and that will soon disappear since the city JUST approved a big office building

Yup, the city obviously is worried about keeping retail, Feh.

1 person likes this
Posted by resident 3
a resident of Another Palo Alto neighborhood
on Sep 9, 2014 at 11:34 pm


"The Institute for the Future is one block closer to Alma where Diddams-Waterworks were; part of IFI faces the Creamery at Emerson and the rest runs almost to Osteria, 3/4 of the the block."

These work space arrangements sound like they should be inspected by some health office. I remember the Diddams basement, they must be stuffing a bunch of workers in there. Do they also sleep there?

For the high rents these companies pay, they must be getting their money's worth somehow.

Oh and that furniture store building is going to be Osteria's new view.

2 people like this
Posted by Sherry Bijan
a resident of Old Palo Alto
on Sep 10, 2014 at 10:44 am

This Council is now back peddling, they are never proactive but reactive.
The Chamber & Business Association whose mission is advocacy on behalf of the downtown district businesses, are MIA, and the property owners continue to make policy.
From a grander economic perspective retail in a traditional sense has been changing for awhile now and consumers have determined how they will shop. Web Link

7 people like this
Posted by South Palo Alto
a resident of Charleston Gardens
on Sep 10, 2014 at 11:08 am

I agree with the need for more residential development. The obvious answer, denied by the "residentialists", is new development with retail on the first floor or two, and then the upper floors being residential units. Santana Row, The Village at San Antonio, and other developments implement this combination. It is the future.

1 person likes this
Posted by Carol Gilbert
a resident of University South
on Sep 10, 2014 at 12:35 pm

It is up to the city council to preserve/encourage independent retail in downtown and California Ave. and Midtown. Office buildings and restaurants do not make for a vibrant business area. We need council encouragement and pushback to keep retail viable!

Like this comment
Posted by Resident
a resident of Another Palo Alto neighborhood
on Sep 10, 2014 at 12:42 pm

What happened to the proposal to make a couple of areas for big box stores near Bed Bath & Beyond and opposite OSH?

We need to allow Palo Alto residents to shop in Palo Alto for useful, affordable, items that we all need - often at short notice.

We really miss Office Max and now have to use Target for last minute homework/project supplies and they do not have the sale selection.

We need an inhouse bread bakery, affordable kids clothes and shoes, a decent sports store and auto supplies.

3 people like this
Posted by goodbye
a resident of Barron Park
on Sep 10, 2014 at 12:55 pm

Funny the article or council never really address why we are losing retail and the role the council plays in it. This council voted the spot zoning that changed the site of Zibbibo into office from restaurant thus allowing the owner to sell it for $11 million dollars. Now right before an election they have a "debate" about what to do. Totally disingenuous. What a bunch of political theater. The residents lose from the greed and ham handed efforts of council.

7 people like this
Posted by Kate Downing
a resident of Ventura
on Sep 10, 2014 at 1:01 pm

The city council seemed to focus a lot on protecting mom and pop shops. I have to agree with other commenters here that while I like quirky non-chains, it often actually means expensive boutiques with $800 dresses and not affordable everyday stores. Los Altos has a lot of this - it's lovely and interesting, but I also just can't shop there. Like others, I go to the Safeway in Menlo Park because the one in Palo Alto is tiny and doesn't carry a lot of brands and if I need clothes I go to the Stanford Mall - or, even more often, the mall near Santana Road.

I think it's odd to talk bout trading retail for housing and/or office space though. I don't know why we need to make this sort of trade. If more buildings on university, for example, had more than one floor (and many have just one floor), you'd have room both for retail AND housing or office space on top.

1 person likes this
Posted by Carl
a resident of Greendell/Walnut Grove
on Sep 10, 2014 at 1:52 pm

Bijan has a very good point. However, my opinion is that there are a few commercial property owners in downtown Palo Alto (lets see: Keenan, Rapp, and Giovanotto) who command too much power, and are allowed to do whatever they want vis-a-vis the planning department and architectural boards who seem to cater to their needs.

The Chamber and Business Association have very little control or influence over these matters; and as a matter of fact Keenan and Giovanotto's interests are represented there too. As long as there is no central planning commission with a mission; we'll continue to see the long chain of coffee shops/cafes, 'fake retail', converted office spaces in place or retail, and a general lack of places that attract the general public and community. We're a real mess.

It's about time the City Council make a Central Planning Commission with real power.

2 people like this
Posted by The-Chamber-of-Commerce-is-Pro-Development-And-Anti-Residentialist
a resident of Another Palo Alto neighborhood
on Sep 10, 2014 at 2:35 pm

> The Chamber and Business Association have very little
> control or influence over these matters;

The Business Improvement District (BID) was not chartered by the City Council to engage in downtown politics. As for the Chamber, it has a well-concealed sub-group called the GAC (Government Action Committee) which offers developers (who are members of the Chamber) a platform to present their ideas in a private sessions with City Officials. The Assistant City Manager, and the Director of Planning, often attend these meetings, where they often present ideas to help developers get their projects approved more quickly.

1 person likes this
Posted by KP
a resident of South of Midtown
on Sep 10, 2014 at 2:58 pm

KP is a registered user.

Just as long as the city council leaves our Midtown area alone, I don't give a hoot.
We still eat at downtown PA restaurants, but I shop at our Safeway-sure it doesn't have the selection of MV & MP, but it has the necessities. My husband goes to the new Urban Style Barber Shop, I always try to go to Peninsula Hardware, etc. I love our neighborhood, let's keep it this way!!

1 person likes this
Posted by musical
a resident of Palo Verde
on Sep 10, 2014 at 3:07 pm

@Silly -- thanks for clarifying the old University Arts location. I'm still waiting to replay parts of the meeting webcast.

@Sherry -- your final point, the changing face of traditional retail, is certainly in the mix. My recent on-line purchases of physical items include Reebok shoes, Levis jeans, car parts, electronics, batteries, and hiking/camping accessories, all of which I once bought at brick-and-morter stores. Specific items, styles, sizes, colors, or exact replacement parts for older household appliances, are now just a few clicks away, not a major hunting expedition down El Camino Real. There's just no way physical stores can compete on selection and inventory, not to mention overhead and prices and 24/7 hours. Service and atmosphere, however, are a different matter and seems to me one key to storefront survival. That said, there will always be a need for sundries as stocked downtown by CVS, Walgreens, or even 7-11. It's a broad topic.

2 people like this
Posted by mj
a resident of Evergreen Park
on Sep 10, 2014 at 5:48 pm

In theory, Palo Alto has a zoning rule that says existing ground floor retail has to remain retail.

However, a special exemption to downtown retail remaining retail during economic downturns was approved by the council a long while ago, during 1980's I think, to justify converting downtown retail space along the side streets off of University Avenue into offices. And used again during the bust, and possibly during the last economic downtown,

If a certain percentage of downtown retail space remains un-rented, our Planning Department can approve the conversion of these empty retail spaces into “temporary” offices, for a term of four or five years. At the end of which term our Planning Department is supposed to review the situation. If the economy has recovered and the percentage of downtown un-rented retail space has dropped below a certain percentage, the “temporary” office space is to revert back to retail.

Over the years this has been a nice little loophole because, unless someone knows otherwise, after each economic recovery the Planning Department has appeared to look the other way and never undertaken the required review of these “temporary” office conversions.

Almost looks like this could be an incentive during an economic downturn for the big property owners to raise retail rents artificially high to keep the space vacant to justify an office conversion. The upside to an economic downturn.

Now downtown is such a boom town, perhaps it’s finally time for the Planning Department to undertake the required review of all the “temporary” office conversions it has given permission for over the years. So long overdue.

Like this comment
Posted by resident 3
a resident of Another Palo Alto neighborhood
on Sep 10, 2014 at 6:05 pm


I agree, I prefer midtown too.

Don't let anyone touch it!

I have to say though, the midtown Safeway needs a face lift. If you go to the one in Menlo Park, it's incredible in comparison - great lighting, shiny.

I wish instead of tearing down and replacing buildings with something 3X the size, why they don't just upgrade existing buildings.

4 people like this
Posted by Kabuki
a resident of Professorville
on Sep 10, 2014 at 9:31 pm

Oh now they care about retail...after their sweetheart deal in 09 to convert retail to office...oh we didn't know this would happen. Bunch of ninnies in the pocket of developers. Show them the door in November!!!!

3 people like this
Posted by Fake Retail = HanaHaus @ Varsity Theater
a resident of Downtown North
on Sep 11, 2014 at 12:20 pm

"Palo Alto City Council members are concerned about the increase in 'fake retail' downtown, which they say is replacing retail space with predominantly office space." Is the City Cuncil aware of what is going on at the Varsity Theater? Perfect example of "fake reatil."

Web Link

2 people like this
Posted by Citizen
a resident of Barron Park
on Sep 12, 2014 at 3:57 am

Just like their fake concern for affordable housing when the Maybell fiasco happened. They used it to beat up the neighbors and get the affordable housing ideologues into a froth, while tying up all the money from the affordable housing fund so it wasn't available to help at BV. In the choice between doing something for existing low-income residents, or pushing a project that would have bust the zoning right through the heart of an R-1 neighborhood with 60% of it for-profit anyway, guess which they pushed? And now they have the ideologues carrying water for the developers to further the very policies and Councilmembers that favored developers pushing out BV in the first place.

[Portion removed.]

1 person likes this
Posted by Pichlerova
a resident of Southgate
on Sep 12, 2014 at 5:31 pm

Too little too late!

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

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