With office developments blooming in Palo Alto and downtown's traffic problems increasingly driving the City Hall agenda, city officials will evaluate on Monday a suite of options for slowing down commercial growth.
The immediate question that the council will consider is whether to unveil new slow-growth policies as part of the ongoing overhaul of the city's Comprehensive Plan or whether to proceed with more urgency and adopt an interim ordinance that would immediately restrict growth.
But at the heart of the matter looms the larger question of whether an annual growth cap is indeed the best panacea for solving downtown's traffic issues. On that, there is no clear community consensus.
Several council members, most notably Mayor Karen Holman and Councilman Pat Burt, have been vocal about the need to consider reining in office growth. In December, Burt proposed scheduling a discussion to consider "parameters of an annual office/R&D growth management program." He noted that during the development-rich years of the dot-com boom, the council had instituted a moratorium on retail buildings being used for offices.
"We're now at the same crisis level as we were at that time," Burt said on Dec. 8.
The city's existing policy, adopted in 1986, sets a cap on overall commercial development of 350,000 square feet in the downtown area and directs the city to re-evaluate that cap when it reaches 235,000 square feet. The city passed the latter threshold in 2012, triggering a two-phase study.
Citywide, Palo Alto added 1.2 million square feet of nonresidential development over the past 15 years, which amounts to about 83,539 square feet per year, according to city data. And this does not count the roughly 1.3 million square feet that will soon be added as part of the current massive expansion of Stanford University Medical Center.
The growth among different types of nonresidential development is far from even. Retail space, for instance, actually shrank by 37,463 square feet over the past 15 years, the only category that has experienced a decrease. Office space, by contrast, went up by 517,045 square feet in the same period, or about 34,370 square feet per year.
One option on the council's menu is an annual limit in the range of 35,000 to 50,000 square feet and a competitive process for evaluating projects that exceed this limit. Another option, according to a city staff report, is to impose a "more robust impact fee program," which ostensibly would slow down the pace of office and research-and-development projects.
Also under consideration is an interim ordinance that would temporarily reduce the amount of office development allowed or set new conditions on projects, such as providing on-site parking or funding for traffic-management program.
Not everyone is convinced that capping annual growth is the way to go. David Kleiman, who recently won approvals for mixed-use buildings at 636 Waverley St. and 240 Hamilton Ave., noted in a letter to the council that the idea of creating an annual cap arose in response to the city's traffic problems and pointed out that the recently approved residential-parking permit program has yet to kick in.
"The council should allow these measures time to work while it begins the process of considering various approaches to combat the traffic problem," Kleiman wrote.
Steve Pierce of the real estate firm Zane MacGregor made a similar point in a letter that argued that the proposal weighed by the council is "a solution with a vaguest connection to a problem." And Russell Hancock, president and CEO of the Joint Venture Silicon Valley, noted in his letter that 34,000 square feet of annual development is a "minuscule amount of growth against Palo Alto's 17.6 million square feet." The Joint Venture board of directors, he wrote, is interested in promoting the "continuing growth and expansion of the regional economy, the creation of quality jobs, and a balanced approach to housing and commercial development."
"Funding for Palo Alto's infrastructure is contingent upon businesses being able to grow," he wrote. "An annual office cap, particularly one that doesn't accumulate during recessionary periods, will create uncertainty and send business out of the city during the downturn," Hancock wrote.