The Palo Alto Chamber of Commerce jumped into the the city's growth debate Friday when it submitted a letter co-signed by 15 business owners urging the city not to adopt an annual cap on office development.
The Chamber, which up to this point had not taken an official position on the subject, issued its letter just days before the City Council is set to take up the topic. At its meeting tonight, the council will consider whether to explore an annual cap in the range of 35,000 to 50,000 square feet as part of the city's update of its Comprehensive Plan. The council will also debate whether to adopt an interim ordinance that would temporarily reduce allowable office density.
Both proposals were sparked by years of complaints from residents and some council members about too much traffic, not enough parking and conversion of retail establishments to office space in the city's commercial districts.
Earlier this month, Mayor Karen Holman highlighted the lattermost trend in her "State of the City Speech," noting that since 2008 the city gained 537,144 square feet of office and research-and-development space. Over the same period of time, it has lost 70,514 square feet of retail, with recent departures including Rudy's Pub, Zibbibo, Cho's and Jungle Copy.
While the council and staff see an annual office cap as a possible mitigation to this trend, the idea has attracted intense opposition from the business community. As the Weekly reported last week, several high-tech companies based at Stanford Research Park including SAP, Hewlett-Packard and VMWare have come out against the cap. So has Stanford University, which owns the sprawling research park. The citizens group Palo Alto Forward, which advocates for more housing and more transportation options, also submitted a letter opposing an annual cap.
The Chamber's letter brings some of the city's smaller businesses into the opposition coalition. In addition to downtown giants Palantir, SurveyMonkey and RelateIQ (a subsidiary of Salesforce), the list of businesses that support the Chamber's letter includes Pizza My Heart, Watercourse Way, Palo Alto Laser & Skin Care, and Lippert & Lippert Design. Patty McGuigan of Cornish and Carey is on the list, as is Susan Graf of S. Graf Limited and travel consultant Bobbi Fox. The letter also includes signatures from current and former Chamber leaders Rebecca Teutschel, Peter Stone, immediate past Chair John Kiya and current board Chair Jeffery Phillips of Garden Court Hotel.
The letter argues that while the city's concerns about growth are valid, the city's office development "has not been factually shown to be excessive, in fact just the opposite." The city's approach, the letter states, "poses a serious threat to the ongoing vitality of the critical business sector that directly supports the city's prosperity."
The group is calling on the city to "engage in a more strategic examination of facts and surveys before imposing an annual office development cap that could threaten the City's prosperity." It also pointed to a recent employee survey jointly administered by Palantir, SurveyMonkey and Real IQ indicating that only 38 percent of the companies' workers drive alone to work.
The letter also argued that a cap on office development would be "a disincentive to mixed-use development, the possibility of additional living spaces being created near commercial and transit centers, and the reduction of car trips that would result." It urges the city "to identify the real problems first and then seek carefully formatted policies and practices to address them."
"Rushing to institute solutions for undefined problems not based on all available data is not the deliberative approach that is the hallmark of Palo Alto government," the Chamber's letter states. "We believe the Palo Alto process, sometimes derided as too slow, is exactly the correct process to establish facts, evaluate options, include all stakeholders and arrive at a thoughtful, deliberative approach to these concerns."
In a statement, Chamber president and CEO Judy Kleinberg said that the group is "not opposed to productive measures to address the underlying issues of parking and traffic congestion."
"But we urge the city to identify the real problems first and then seek carefully formulated policies and practices to address them," Kleinberg said. "As stakeholders in the city's future, the business sector wants to work with the city to develop workable and well-thought-out measures."
In her statement, Kleinberg said the cap would have a "chilling effect on business productivity, with the possible unintended consequence of forcing businesses that want to grow to move to more business-friendly cities.
"This would mean the loss of the very office workers who now support Palo Alto's vibrant economy and robust retail environment and who are a major source of revenue for the City's General Fund," Kleinberg said.