With increasing concern about the health and future of small retail businesses in Palo Alto, the City Council is scheduled to vote Monday on whether to implement temporary measures to prevent building owners from converting ground-floor retail into offices or other non-retail uses.
The staff-recommended "interim" ordinance, which requires eight votes to take effect immediately as an urgency measure, is based on policy direction the council unanimously approved a month ago.
If adopted, the ordinance would apply citywide and remain in effect for 45 days, but it would then be extended through adoption of a "regular" ordinance in order to provide time for further analysis and outreach to property owners and businesses as part of designing permanent changes to zoning requirements.
If the proposal doesn't receive eight votes, then it will have to go through the normal process for zoning changes, including consideration by the Planning and Transportation Commission, two meetings of the City Council and then a 30-day period before it becomes effective. This would potentially allow some property owners to take advantage of the delay and lease vacant ground-floor space for office use.
Currently, ground-floor-retail uses are already required downtown on University Avenue, on limited additional streets in the core downtown business district and on California Avenue. But in other commercial areas in the city, including Midtown and along El Camino, current zoning rules impose few if any limits on the types of ground-floor uses.
The challenges facing Palo Alto retailers should be a major concern to Palo Altans, and the City Council is right to take more aggressive steps to protect them. Retail businesses, and especially those that are independent and locally owned, contribute immensely to the character of the community and of the appeal of our commercial districts.
Most retailers are already suffering from consumers shifting to online shopping or to big-box chain stores, and unprecedented high rents are now creating more pressure.
Without tougher restrictions preventing ground-floor-office uses in commercial shopping areas, these market forces threaten to make such space unaffordable for most retail businesses.
Ambiguous retail definitions and staff interpretations of current restrictions have contributed to the problem, as certain prime ground-floor locations such as the space occupied at Hamilton Avenue and Emerson Street by Institute for the Future have been converted to what is being called "fake retail," uses that may involve some public activity but that don't contribute to a retail shopping environment.
Significant retail space has been lost since the Great Recession began in 2008. One study estimated that approximately 70,000 square feet of retail-type uses in Palo Alto switched to office use in the last six years.
The council's impending action on Monday is only the first step toward addressing the health of retail in our city. On May 18 the council will discuss retail conditions specifically in the California Avenue business district, and other retail preservation policies will be considered down the road, including possible limits on chain-owned businesses and limitations on the number of restaurants and other food-oriented retailers in specific shopping districts.
Among the retail protection strategies that should be considered is a policy that requires conversion of ground-floor offices and other non-retail use back to retail when the building owner undertakes a major redevelopment of a property located in a shopping district.
For example, several old California Avenue office buildings currently have offices on the ground floor and under current rules could remain offices if torn down and redeveloped. That should not be permitted.
Similarly, the council should consider changes that would make the list of qualifying types of retail businesses more strict and require that as tenants turn over, the replacement tenants meet new retail definitions.
There are no easy answers to ensuring vibrant shopping districts in Palo Alto, and the city needs to be careful not to create new problems while solving others. But a strong interim ordinance that prevents any further loss of retail is essential to buying the time needed to put in place a comprehensive set of better policies.