With several longtime retail establishments recently shutting down to make way for offices in downtown Palo Alto, city officials are looking to adopt an emergency law to halt the practice.
The City Council will consider on April 6 an interim ordinance that would ban retail conversion to office space in the city's main commercial areas, including University Avenue and California Avenue. If approved, the "urgency" ordinance would take effect for about 45 days, though the council would have the option of extending it up to two years if the conditions that necessitated it persist.
The interim law was sparked by widespread concern among the council about retail establishments getting priced out of their locations and getting replaced by offices. In downtown, Jungle Copy, Rudy's Pub and Zibbibo are some of the notable retailers that have recently left to make way for offices. City officials are also concerned that a similar pattern will take place around California Avenue, which has already lost several retail establishments, including Bargain Box and Avenue Florist.
The council has also been increasingly concerned about the overall loss of retail, a subject that Mayor Karen Holman highlighted in her "State of the City" speech in February.
According to a report from planning staff, the city had a net loss of about 37,500 square feet of retail space between 2001 and 2015. The problem appears to have gotten worse in the past seven years, with the city losing about 70,500 square feet of retail between 2008 and 2015.
If the council moves ahead with the interim ordinance, it will become the city's second stop-gap law aimed at the recent office boom. Earlier this month, the council directed staff to craft an interim ordinance that would cap new office construction around University Avenue, California Avenue and El Camino Real at 50,000 square feet, annually.
A new staff report points to the recent numbers around retail loss and notes that "existing ground-floor retail protections may not be sufficient where they exist, and may be needed where they do not."
The core area around University Avenue already has a "ground-floor retail" requirement and in recent years, several council members have proposed spreading this requirement to some of downtown's peripheral blocks.
Holman, Vice Mayor Greg Schmid and Councilman Greg Scharff have been pushing for increased protection for retail space since November 2012, when they released a memo urging the council to expand the requirement.
The new proposal resulted in the council ultimately agreeing in 2013 to protect a vibrant block of Emerson Street, between Hamilton and Forest avenues.
At the time, the move to shield retail space had plenty of critics. Several developers argued against the proposal, noting that some sections of downtown aren't well-suited for retail. The Emerson Street regulation passed by a 6-3 vote, with former council members Nancy Shepherd, Larry Klein and Gail Price all dissenting.
Today's political climate suggests that the new proposal will sail through with little opposition. During the council's March 2 discussion, the council was split on the subject of capping new office development (members ultimately adopted a revised proposal on March 23), but every council member voted to move ahead with a law to protect retail from office conversion.
Scharff said during the March 2 discussion that he felt bad that the prior proposal to protect retail was not passed and noted that the council members who voted against it are no longer on the council.
"It should be a no-brainer to go back and expand ground-floor retail throughout the city," said Scharff, who then proceeded to add the interim ordinance to staff's work list.
"I want to have an emergency ordinance as soon as possible to stop retail conversion," he said.
The issue of retail being displaced is far from new. The council had previously grappled with it in 2001, when the city adopted several interim ordinances that ultimately made way for a permanent one. The 2001 law required certain commercial areas to have ground-floor retail, though it also allowed certain "conditional" uses (including financial services, day care and trade schools) subject to a permit.
In the current effort, staff is proposing that the council adopt an interim ordinance based on the prior laws but with broader applicability. This could either mean "all commercial zones" or designated zones where the problem of retail conversion has been most acute.
Permanent policies, meanwhile, should each be tailored to specific districts "after consultation with property owners, merchants and restaurants in the vicinity." The long-term effort, the report notes, would prioritize the rapidly changing California Avenue, with downtown as the second priority.