When Palo Alto voters struck down in 2013 a proposed housing development on Maybell Avenue, they also inadvertently put a halt to the highly contentious zoning process that made the development possible.
Now, the "planned-community" (PC) zone -- which has helped to spur some of the city's most valued and most controversial developments over the past half a century -- is preparing to make a comeback. The big question that the Planning and Transportation Commission wrestled with on Wednesday: What will it look like in its new incarnation?
In its second exhaustive discussion in a month, the commission debated, crafted legal language, challenged planning staff and reached a near-consensus on how to alter the polarizing and emotionally charged zoning designation. The commission voted 6-1, with Przemek Gardias dissenting, to make a host of minor changes to the ordinance, including a new definition of "public benefits," a pre-screening requirement for developers, a mechanism for enforcing the public benefits and a clarification that benefits such as affordable and senior housing would be given preference over other types.
Yet even with these changes, the commission stopped well short of recommending the types of broad and sweeping changes that land-use critics, slow-growth "residentialists" and some council members have been calling for in the aftermath of the 2013 referendum. By choosing mild revisions over a broad revamp, the commission supported continuing to allow developers to pay for zoning exemptions and to propose projects that aren't intrinsically beneficial to the community, provided that they offer an "extrinsic" benefit instead.
First adopted in the 1950s, the PC process was initially used primarily for affordable housing, senior housing and other valuable amenities that would be difficult to build under other zoning. It allows a developer to exceed zoning regulations in exchange for "public benefits,"
More recently, it has enabled mixed-use developments with large commercial components, including the College Terrace Centre at 2180 El Camino Real and the new office building at 101 Lytton Ave., now home of SurveyMonkey.
The City Council suspended PC zoning in February 2014 in response to increased community concern over the way the process has been used.
While its supporters call PC zoning a valuable tool for giving developers flexibility and permitting projects that provide important community amenities, detractors denounce it as a scam and refer to it as "zoning for sale," citing promised public benefits that never materialized.
One point of debate on the commission is whether the public benefit in a planned-community project should be intrinsic to the development, as is the case with senior-housing communities such as Lytton Garden and low-income developments like the Treehouse project on West Charleston Road built by the Palo Alto Housing Corporation. While Commissioner Kate Downing initially favored requiring these developments to contain amenities like low-income and senior housing, the majority sided with Commissioner Michael Alcheck, who argued that the project shouldn't have to be beneficial in itself, as long as the developer pays the right price, either in terms of cash or other amenities.
Alcheck favored an approach that allows developers to effectively propose anything they want in exchange for zoning exceptions, with the understanding that the council can always reject the package it receives if it doesn't like it. The city, he said, should welcome "out-of-the-box thinking" from developers.
"We're not just the epicenter of disruption in technology," Alcheck said. "We want to welcome, maybe, disruptive concepts in land use."
His colleagues generally bought this argument, with Downing ultimately saying she was swayed by Alcheck's call for flexibility (Commissioner Eric Rosenblum was the only member who didn't go along with the majority). They also largely agreed with Alcheck's subsequent argument that these extrinsic benefits can include cash.
Rosenblum strongly objected to the latter proposal and called it "the definition of zoning for sale." Downing was the only commissioner who joined him in dissent.
"This item, handing out cash in exchange for zoning exceptions, is not out of the box. It's an old practice. This is one that makes me uncomfortable," Rosenblum said.
Others didn't share his view and went along with the idea that a significant cash payment can constitute a benefit, particularly if it's used to finance infrastructure improvements or pay for other city priorities.
Even though the "public benefits" section remains largely open-ended, it would now be defined in the zoning code as improvements or amenities that would be "unattainable in general zoning districts or combining districts." This would include things like affordable housing and "significant monetary or 'in kind' contributions" toward infrastructure.
The commission also favored a new "pre-screening" phase in which a developer makes an early public pitch for the concept being proposed. The pre-screening would, in theory, gauge the council's and the community's interest in the project before the details are worked out.
Commissioner Mark Michael stressed that the pre-screening hearings should be fully transparent and include economic analyses and discussions of the development's compatibility with the Comprehensive Plan. Otherwise, a highly unpopular idea can advance to a public hearing and lead to community distrust, much like what happened with John Arrillaga's proposal for 27 University Ave. in 2012 and with Jay Paul Co.'s proposal for 395 Page Mill Road in 2013. Both developers proposed projects that the council and many in the public felt were too massive. Each project was ultimately withdrawn after much criticism and tension in the community.
Michael said he'd like to make sure council is not "embarrassed" like it was with those two projects and with the Maybell development, noting that the council "didn't have a rigorous process" in considering the developments during preliminary screenings.
During a discussion lasting nearly four hours, the commission also questioned staff's thoroughness in presenting feedback to the council, which is set to make a decision on planned-community reforms next month.
Commissioners insisted that all of their input be included in the report to the council, including a draft ordinance that contains all of its added verbiage. Downing was one of several commissioners who argued that their input isn't being sufficiently captured in staff reports, telling staff that the commission "created something and you'll give the council half of it."
Chair Greg Tanaka agreed, saying that simply summarizing the commission's feedback would be a "disservice to the City Council."
He tried at one point to make a formal motion calling for staff to craft an ordinance including all of the commission edits but ultimately withdrew the proposal.
Members were particularly insistent that staff accurately transmit the commission's feedback on the main issue of disagreement: height limits. The commission felt planned-community projects should be able to exceed the 50-foot height limit. Planning staff disagreed.
In a report, city planners argued that exceeding the height limit does not "reflect the direction of the City Council or the concerns raised by the community."
"The 50-foot height limit has been a time-honored community value," the report states. "Departure from this policy should be made at the City Council level."
Alcheck, in a highly unusual move, lobbied planning staff to change its stance toward the 50-foot height limit, which he has criticized in the past.
He requested that city planners "consider rephrasing their position" and at the very least support having buildings with five stories (the 50-foot limit typically restricts developments to four stories).
"You have an opportunity here to engage the City Council in a discussion that the ARB (Architectural Review Board) has suggested for so long now," Alcheck told staff, referencing a common refrain from ARB Chair Randy Popp, a vehement critic of the height limit.
Gardias was the only commissioner who supported staff's position on this matter, calling the city's height limit a "sensitive aspect."
"Removing this will remove unreasonable expectation that pretty much now anyone can build whatever he or she pleases to," Gardias said.
Rosenblum sided with Alcheck on this issue and said he struggled to understand why the city would be willing to compromise on things like density or setbacks but not on height.
"It does seem odd to me in this exceptional process that this is one area where there will be no exceptions," Rosenblum said.
One idea proposed in past discussions of the PC zone was the creation of a menu of public benefits from which developers can choose. The mechanism was seen as a way to take the wildcard aspect out of planned-community projects, making them more predictable. In the past, the term "public benefits" has encompassed everything from sculptures to grocery stores.
The commission opted not to go forward with the menu. By allowing extrinsic benefits such as cash, the adopted definition of "public benefit" remains open-ended enough to allow developers to propose almost any benefit in exchange for zoning exemptions.
The commission's recommendations will now be forwarded to the council, which is scheduled to consider the topic on April 20.