Seeking to protect neighborhood-serving retailers from the recent boom in office development, Palo Alto is considering a range of new zoning policies, including ones that would restrict commercial densities downtown and limit chain stores on California Avenue.
The new rules, which the City Council will consider Monday, seek to address what the council believes to be one of the most troubling trends to emerge during the city's recent economic recovery: the tendency of offices to replace mom-and-pop shops in the city's two primary commercial districts. With Palo Alto's rents among the highest in the country, numerous small businesses have been priced out of their longtime locations in recent years.
The list of departures is long. Zibibbo and Rudy's Pub both left town in the past year. Before them, there was Jungle Copy and Empire Tap Room. The old location for Fraiche Yogurt, which moved from Emerson Street to a more prominent location on Hamilton Avenue,was immediately repurposed as an office, a use that typically fetches higher rent. Zibibbo's old space on Kipling Street was similarly snapped up by a non-retailer.
That's the trend Palo Alto officials are now trying to curb. Council members agreed in September that the situation is so urgent, changes must be made now, without waiting for the city to update its official land-use bible, the Comprehensive Plan. Councilmen Pat Burt, Greg Scharff and Karen Holman were particularly adamant. Burt noted that it might take another two years to complete the Comprehensive Plan update and pointed out that last time the city updated the document, it took another five years for its policies to be turned into actual zoning laws.
"We're looking at a good number of years to get done what we and the community are hoping to accomplish a lot sooner than that," Burt said.
Burt and Scharff both argued that the longer the city waits to deal with the retail protection, the more difficult it will be to find a solution. Scharff advocated strengthening retail protections in downtown, California Avenue and other commercial areas. This could mean expanding the ground-floor-retail requirement that is already in place from downtown's commercial core to its more peripheral areas (the council already did this in 2012, when the boundary moved to include the block of Emerson Street between Hamilton and Forest Avenue). This could also mean amortizing big commercial buildings that don't have retail components and that "break the block," such as the Wells Fargo building on University Avenue.
"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," Scharff said.
It's not just the departure of longtime establishments that's been troubling the council. It's also the new businesses that take their places, bringing more employees with them. Scharff, Burt and Holman all raised flags in September about offices taking over basements that were once used to support retail. This, they argued, further exacerbates downtown's parking and traffic problems.
A new report from the Department of Planning and Community Environment indicates that solving the retail problem will be one of the city's top land-use priorities. The report proposes consideration of the basement problem in the near-term, along with a look at regulating chain stores on California Avenue by setting a quota for "formula retail." Restricting chain stores has become a popular idea among the city's planning commissioners, council members and candidates for council. The goal, by and large, is to preserve California Avenue's status as a funky, arty and eclectic district filled with community-serving establishments.
To preserve retail variety, staff also proposes to consider limiting the number of restaurants downtown and on California Avenue. The idea was championed by Holman, who described University Avenue in September as a "restaurant grotto."
"What you want in a healthy thriving retail district is a mix of uses," Holman said.
While retail protection is one major theme of the proposed near-term changes, reducing commercial development is another. Burt said at the September meeting that he would be interested in looking at "reducing commercial zoning downtown and replacing it to some degree with residential."
That, however, promises to be a lengthier and possibly more contentious endeavor. In the coming months, staff plans to explore the idea and to consider both the best locations for new residential projects and the types of residential development that should be encouraged. Planners will also explore the idea of reducing the density of certain commercial zones on El Camino Real and near California Avenue. They will also consider shrinking a density bonus that the council approved several years ago for a hotel zone and ultimately adopting zoning-code changes that would slow down the pace of development.
Some council members, including Mayor Nancy Shepherd and Councilwoman Gail Price, advocated during the September meeting sticking with the more typical timeline: completing the Comprehensive Plan update and then going forward with the zoning changes. Price said the city should focus on its Our Palo Alto initiative and not try to do too many things at once.
"If we start going sideways on different approaches to zoning and start picking away on zoning issues ... it will just increase the scope of the effort required," Price said.
One of the things that the council will discuss on Nov. 3, in the first of two scheduled meetings on the Comprehensive Plan, is the city's next steps on updating the document. After the council rejected four "planning scenarios" that staff proposed exploring in August, city planners have returned with a revised list of scenarios. The list could include a "business as usual" scenario, in which no policies are changed; a "slow growth" scenario, in which the pace of job growth is slowed; and a third that focuses on adding more housing around downtown and California Avenue.
The plan is to hold a series of community meetings next spring to further explore these scenarios and to consider changes in goals, policies and programs that should be included in the new Comprehensive Plan.