Fixes proposed for divisive zoning tool

Palo Alto planners, commissioners weigh reforms for 'planned-community' zoning

Supporters call it a valuable tool for allowing flexibility and encouraging the creation of much needed housing for seniors and low-income families.

Opponents call it a "racket" that allows developers to line their pockets by exceeding zoning regulations and providing meager "public benefits" that at times never materialize.

Everyone on the City Council agrees that the "planned-community" process is broken. Now, fixes are on the way.

A year after Palo Alto put a halt on planned-community (PC) proposals, the city is moving ahead with reforms that officials hope will add some clarity and predictability to the city's most controversial zoning process. The reforms, which the Planning and Transportation Commission wrestled with on Wednesday night, aim to revamp a process that allows developers to exceed zoning regulations in exchange for benefits that are negotiated between the council and the builder.

When it premiered in 1951, the planned-community zone was used primarily for affordable-housing and senior-housing complexes. On occasion, that's still the case in the modern era.

The Opportunity Center and the recently expanded Palo Alto Commons, for example, both relied on the PC zone. Over the past few years, however, it's been used just as often for office complexes that are far more dense than existing zoning would allow.

Recent developments that have relied on the PC zone include 2180 El Camino Real (around the former JJ&F market); 101 Lytton Ave. (now home of Survey Monkey); the renovated Edgewood Plaza; Alma Village; the Taube-Koret Center for Jewish Life; and 488 Charleston Road (the affordable-housing complex known as Tree House). It was also used by the Palo Alto Housing Corporation in 2013 for its proposed housing development at 567 Maybell Ave., a project that voters shot down in November of that year after a successful referendum.

Another PC zone proposal for a four-story building at 2755 El Camino Real, at the busy corner of El Camino Real and Page Mill Road, was withdrawn last year after the council put the freeze on the zone-change process. The mixed-use building with a heavy office component has since been resubmitted under a different zone-change proposal.

The zoning process has long been criticized for offering insufficient benefits in exchange for lucrative zoning exemptions that exacerbate the city's traffic and parking problems. But as the planning commission demonstrated on Wednesday night, fixing the process is a complex affair. Over a wide-ranging discussion that stretched for more than three hours and featured more than a dozen informal votes, the commission grappled with a list of changes offered by staff that aim to make planned-community proposals feel more predictable and less transactional.

One improvement is creating an actual definition of "public benefit," a term that over the years has encompassed everything from sculptures and bike paths to cash payments and affordable-housing units. The proposed ordinance also includes a new rule that requires a developer to submit an economic analysis for the project -- a pro forma document that would help the council weigh the value of public benefits against the profit the developer would earn as a result of the zoning exemptions.

Yet while it offers a definition of "public benefits," the proposed ordinance doesn't go as far as to actually create a menu of benefits that could be considered in exchange for the requested entitlements. The definition remains open-ended: "specific improvements or amenities for the local community or neighborhood provided by the developer in exchange for uses, densities, and/or a development configuration specific to the PC district that would be unattainable in general zoning districts or combining districts."

"Public benefits shall include affordable housing, significant monetary or 'in kind' contributions toward meeting goals of the City's adopted infrastructure plan or human services needs assessment with a nexus to the proposed project, or other similar amenities or improvements identified by the City Council," the ordinance states.

It also notes that "from time to time, the City Council may adopt by resolution a menu of public benefits that represents current City priorities."

The commission agreed with many of the proposed reforms, though it quibbled with a few and split on two. Members generally agreed that the menu isn't necessary but Commissioners Kate Downing and Eric Roseblum both favored including "preferred uses" such as affordable housing and senior housing.

Downing argued that PC projects should have "intrinsic value" – that is, be beneficial in of themselves. She gave as an example amenities like affordable housing and community centers. She also argued against allowing developers to make cash payments because this gives the city an incentive to "underzone" and turns the process into a "huge negotiation, like buying a used car."

She acknowledged that the process, as it stands, has been a cause of much anxiety.

"People, when they talk about zoning or a project out of zoning (compliance), they talk about it like a crime is being committed, like we're violating the law when we're doing something outside zoning," Downing said.

Zoning laws, she argued, are different from other types of laws in that they reflects the community's aesthetics and cultural preferences, which change over time. In Palo Alto's case, the process of updating the official community vision, the Comprehensive Plan, has been dragging since 2006 and is still about two years away from completion. The planned-community zone, Downing said, can "bridge that gap."

"It allows you to build things that maybe we all agreed that we like and that are going in the direction that we like, and we haven't had a chance for our processes to catch up with it," Downing said.

Przenek Gardias was the only commissioner who supported limiting planned-community projects to particular geographical areas of the city and capping the exemption that a developer could request. Downing and Vice Chair Adrian Fine both argued against these proposal, as did Michael Alcheck.

"Common sense will help guide these developers," Alcheck said, adding that the City Council would still have the discretion to approve or shoot down the projects if it doesn't like what it sees.

Alcheck also lobbied for removing a requirement proposed by staff that developers establish a fund that would be used to support the city's compliance reviews on an annual basis. He argued that this requirement would be "too burdensome" for some property owners and developers.

Another requirement that Alcheck opposed is one that forces developers to provide an economic analysis for the projects. In both cases, the commission took the opposite view. He also disagreed with Downing and made an argument for allowing developers to offer cash and other "extrinsic benefits" in exchange for zoning exemptions, a proposal that split the six commissioners down the middle (Mark Michael was absent). Chair Greg Tanaka and Gardias generally agreed with Alcheck, while Vice Chair Adrian Fine, Downing and Rosenblum disagreed.

"I feel that we don't want to sell zoning," Rosenblum said. "It's an attractive thing, because everyone likes the money. But it's a slippery slope."

The commission didn't vote on the ordinance Wednesday but directed staff to return on March 11 with a revised proposal. After the commission votes on its recommendation, the ordinance would go to the council for adoption.

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7 people like this
Posted by midtown
a resident of Palo Verde
on Feb 12, 2015 at 9:13 am

I would like to make sure that someone from the City is working with palo alto unified school district to make sure new PUDs have considered schooling overcrowd issue.

Any new developments should have a approval from the school district to insure proper teachers and class room size are accommodated. Unless they are over 55+ development then we can see the exceptions.

19 people like this
Posted by Anonymous
a resident of Another Palo Alto neighborhood
on Feb 12, 2015 at 9:41 am

The PC reform which would mean something is if every PC zoning project should be voted on by the entire city. Anything less and whatever language the politicians and developers pass will be tirelessly gamed.

6 people like this
Posted by Been there
a resident of Duveneck/St. Francis
on Feb 12, 2015 at 10:56 am

Let's be very clear: Palo Alto Commons is a business, not a public or nonprofit entity. Its owner is a developer, and he makes plenty of money through operating this business -- it is profit-making. People who live there pay high fees to cover the costs. That doesn't mean it's not good quality, but it is only available to those who can afford to pay those fees. If not, you're out on the street. There are nonprofit senior residences, but in our area, they are fewer and farther between, due to the high costs of real estate and living. The waiting lists for nonprofit senior residences, particularly those who accept seniors who have exhausted all their assets paying for care, are VERY long. If there are public benefits to be gained, Palo Alto should be looking at nonprofits to operate them in a responsible way that does not have to pad their budgets with additional profit for owners or shareholders.

10 people like this
Posted by Midtown
a resident of Palo Verde
on Feb 12, 2015 at 12:06 pm

We continue to take our eyes off the ball. The problem, my friends, is PARKING and TRAFFIC!
Every new development should be required to provide 30% more parking that the anticipated occupancy. Why?
As we can see, anticipated commercial occupancy doesn't incdlude clients and customers.
As for housing, everyone fills their garage with personal storage and parks their cars in the street. Due to condo developments the streets are parked full and even guests must walk for blocks to visit.
And that's a residential problem!

8 people like this
Posted by neighbor 99
a resident of Barron Park
on Feb 12, 2015 at 12:13 pm

Been there,
Agreed. Unfortunately, Barron Park banded together and said no way, not 60 low income residents in their back yard. Now they'll get 25 or 30 houses with lots of kids to crowd the schools and lots of cars to crowd the roads. That was a huge lost opportunity to help some of our most in need seniors.

16 people like this
Posted by We've had enough
a resident of Embarcadero Oaks/Leland
on Feb 12, 2015 at 1:04 pm

The building regulations were designed to protect the community, not to be sold away to rich developers who want to make huge amounts of money while clogging our streets and bringing traffic to a standstill. The Council should not be spending time coming up with a plan to help developers get around the regulations. If anything they should be tighten up in response to overburdened roads and services. What are they thinking? Don't they ever drive on Page Mill or Oregon at the end of the day?? Where is all the new traffic they are creating going to go?

14 people like this
Posted by The POINT
a resident of Another Palo Alto neighborhood
on Feb 12, 2015 at 1:55 pm

The point that has been made, and ignored, many times before is that there is simply NO ROOM for more housing, more businesses, more roads, or even wider roads.

This town is constricted by the surrounding geography: the mountains on one side, the bay on another side, and other cities on the two remaining sides.

What part of NO MORE DEVELOPMENT don't they understand? It means zero, nada, absolutely nothing more to be built for a very, very long time. Or til old buildings crumble and enough people die of old age to make room.

4 people like this
Posted by Grumpy girl
a resident of Crescent Park
on Feb 12, 2015 at 2:44 pm

The only new building that should be allowed is a parking garage!

4 people like this
Posted by Pricilla
a resident of College Terrace
on Feb 12, 2015 at 3:09 pm

Could the city stop all development? What if the developer gives finders fees?

Like this comment
Posted by Crescent Park Dad
a resident of Crescent Park
on Feb 12, 2015 at 7:15 pm

@ neighbor 99: It's not nice to spread rumors that aren't exactly true...try 24 houses total, not 25-30.

"Developer Golden Gate Homes is proposing to build five single-family homes along Maybell; three single-family houses on Clemo Avenue; and 16 homes on the interior along a new, L-shaped street, including four "duet" homes (two pairs of houses whose garages are connected). "

Web Link

2 people like this
Posted by CW
a resident of Downtown North
on Feb 13, 2015 at 12:42 pm

I'm willing to let council start approving PC projects again. I'm also OK with the idea of developers paying "finders fees" to council members for multiple years. I know those council members will be totally objective when it comes to projects proposed by people who paid them off. Let's give it another go. What could go wrong?

Like this comment
Posted by neighbor too
a resident of Another Palo Alto neighborhood
on Feb 14, 2015 at 1:29 am

@ neighbor 99,

Crescent Park Dad makes a good point. Even at 24 houses, that's only 6 more than PAHC originally had slated for the for-profit side of that development (only without a 4-story building next to it), and only 9 more the last plan. That's assuming neighbors don't fight 24 in the subdivision process and they may.

The $8 million the County just made available to try to help at Buena Vista is the same $8 million that was freed up because that deal fell through. Personally, I think the much larger number of low-income Palo Altans at BV is the priority.

2 people like this
Posted by Guy_Fawkes
a resident of Old Palo Alto
on Feb 14, 2015 at 6:24 pm

Guy_Fawkes is a registered user.

"People, when they talk about zoning or a project out of zoning (compliance), they talk about it like a crime is being committed, like we're violating the law when we're doing something outside zoning," Downing said.

Wow...a planning commissioner who doesn't believe in ordinances. It's not like an ordinance is a law (heavy sarcasm).

Posted by Name hidden
a resident of another community

on Feb 14, 2015 at 9:55 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?

3 people like this
Posted by Long Time Resident
a resident of Old Palo Alto
on Feb 16, 2015 at 11:41 pm

Just wondering, is this the same "Golden Gate Homes" which markets properties to International buyers, primarily from China and other parts of Asia?

"Golden Gate Partners, Inc. focuses on marketing distressed residential properties in the United States. It intends to market properties to international buyers, primarily from China and other parts of Asia. The company was formerly known as Golden Gates Homes, Inc. and changed its name to Golden Gate Partners, Inc. in January 2014. Golden Gate Partners, Inc. was founded in 2005 and is based in New York, New York. As of June 18, 2013, Golden Gate Partners, Inc. operates as a subsidiary of Ta Partners, Inc."

Like this comment
Posted by resident 1
a resident of Adobe-Meadow
on Feb 17, 2015 at 10:18 am

The city needs to look at how many schools it has and what the maximum number students is relative to fire requirements per location. That is your upper limit as to how you are awarding new development. I am seeing aggravation on other lines on this platform that there are too many students which is breaking down the performance of the school system. We are now throwing money at the system to reduce the aggravation and growing disorganization and student distress. People get paid to fix a problem - but many times those are the same people who create the problem so they can get paid to fix it. That is a business art form.

The city needs to assess at the top level how many residences there are, how many commercial business, how much attributed to government connected properties (schools, parks, city hall, etc.) and how many non-profits which do not contribute to the tax base. How much money is coming in the door from taxes, and how much is going out the door for schools, fire, police, city employees. Are we ahead of the game or behind the game and losing ground? That includes their pensions which tree up to CALPERS.

My suspicion is that we are losing ground very fast but there are too many moving parts to be sure. That is the Barnum & Bailey circus approach keep the eye moving off center in a continual process.

I appreciate that attention is being directed to this overall planning and strategy as to how we proceed. But we all need to understand what is the maximum level we can cover at the total city level to keep this all in balance.

And please do not bring up ABAG. ABAG is in a state of disgrace due to the chief finance person making off with some funding. Now there is going to be an audit of all programs that depend on bond funding. Just do not use that as an excuse for any new development - "ABAG made me do it" does not work. The taxpayers vote to support an effort but there is no accountability with what is going on with that money. That is getting harder to do in the instant information age.

Like this comment
Posted by Jerry Underdal
a resident of Barron Park
on Feb 17, 2015 at 11:18 am

Jerry Underdal is a registered user.

Long Time Resident,

Yes it is.

The proposal described in this article has been withdrawn. A new proposal will come forward some time in the near future, I expect.

I'd like to comment on the extent that Golden Gate has communicated with the neighborhood. One of the major complaints during the Maybell debate was that residents' voices weren't listened to in the early stages. In this case, the community has been informed and engaged in an effort to get a project done that would please residents, make a profit for the developer and mark a successful entry for the corporation into residential development in the Palo Alto region. It's proving hard to do.

Like this comment
Posted by resident 1
a resident of Adobe-Meadow
on Feb 17, 2015 at 12:53 pm

What school will support this development effort? Is that school oversubscribed for students? Does it have a good student / teacher balance?
There is a maximum number that can fit into that area. What is it?
It is not about pleasing the residents so that they can build more homes - it is about the impact of the additional homes in that specific area on the services that the city is required to provide based on the budget available.

And ABAG does not provide funding from where I am sitting - it provides a carrot of future funding - which in reality it does not have.
Someone needs to put the facts down of the city can support. I do not believe that the residents are on top of what the impact will be based on the number of movable parts.

2 people like this
Posted by resident 1
a resident of Adobe-Meadow
on Feb 17, 2015 at 6:15 pm

I think there is a lot of micro-management of the city resources - if you are looking at only one project then you are isolating the specifics for that project with no bigger impact on the total city.

We would benefit from some macro-management - under stand from the top level what you can support then address the micro-projects within the framework of the macro city availability of resources - top level.

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

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