Palo Alto's push to limit growth in office space may jeopardize as many as 10 proposed developments, some of which have been going through the city's planning process for more than two years and are now on the verge of final approval.
The fate of these "pipeline" projects is one of the main questions that the City Council will debate on June 1, when it considers next steps for an emergency law capping office growth. The council unanimously endorsed in March a cap of 50,000 square feet for new office and research-and-development space downtown, in the California Avenue area and along El Camino Real.
The urgency law, which would require eight votes to pass, is part of a broad package of initiatives that the city is now undertaking to address the unwelcome consequences of recent office development. These consequences include more traffic, less parking and rising rents that make life difficult for small businesses. City data show that between fiscal year 2001 and today, the city has seen its office and research-and-development space increase by 346,322 square feet. The bulk of this growth, according to the data, took place in Stanford Research Park, the downtown area and around California Avenue. Over the same period, the city has lost 20,172 square feet of retail space, according to a report from the Department of Planning and Community Environment.
While the entire council agreed on March 23 that office growth needs to be curbed and that an annual cap is a good way to do it, the details have yet to be hammered out. Among the most crucial details are the 13 commercial and mixed-use projects currently in the pipeline, 10 of which are located in the three targeted commercial areas. Altogether, the developments would add close to 150,000 square feet of office and research-and-development space, with more than two-thirds going up in the California Avenue area.
Among the more prominent projects on the list is 441 Page Mill Road, a three-story mixed-use building that would replace four dilapidated single-family dwellings on a largely commercial block. After two years of public hearings, the project by Norm Schwab last year secured the blessing of the city's planning commissioners but ran into an obstacle in January, when the City Council declined to grant the developer a requested zone change and requested a new financial analysis. The building, which includes offices and 10 apartments, would add 16,006 square feet of net new development, according to planning staff.
Another long-simmering project that now finds itself in planning limbo is 2555 Park Blvd. The proposal has been in the pipeline since fall 2013 and has just made its way to the final step of the approval process, with the City Council set to make a decision on June 1. The developer, Campbell Avenue LLC, has proposed replacing an existing two-story office building with a new three-story one, adding 13,666 square feet of office space.
Two nearby projects, at 2747 Park and at [3045 Park 3045 Park, were proposed last fall, and each has an application that is currently deemed incomplete. The two developments would add 28,200 square feet and 29,120 square feet of new development, respectively.
If the council agrees on June 1 to go along with a staff recommendation, the new office cap would not apply to projects with pending applications that are deemed "complete" by the end of the fiscal year, June 30, even if they have yet to secure the final vote of approval from the council. This means that the proposed development at 429 University Ave., the former site of the Shady Lane boutique, and the projects at 441 Page Mill, 2555 Park and 3877 El Camino Real (the latter most of which would add a comparatively paltry 4,020 square feet) would all be exempt.
Though it has yet to be implemented, the proposal to cap office growth has already generated plenty of community debate, with some characterizing it as too weak and others saying it's too heavy-handed. The Chamber of Commerce came out strongly against the cap in March, with Chamber CEO Judy Kleinberg arguing it 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 in a statement before the council's earlier discussion.
Several high-tech giants, including Hewlett-Packard Co., SAP, Google and VMWare also issued letters slamming the proposed cap. Their concerns were largely addressed, however, when the council decided that the cap should only apply to three commercial areas and not to Stanford Research Park, where most high-tech campuses are based.
Others have argued that the cap doesn't go far enough and urged the council to adopt a moratorium on office growth. Local resident and land-use watchdog Jeff Levinsky called a moratorium the "simplest approach of all" and one that would give the city the needed "breathing room" to develop solutions to the problems of excessive growth. Barron Park resident and recent City Council candidate Lydia Kou made a similar point and said a temporary moratorium is needed to "close all the development loopholes and clean up zoning."
The council, for its part, has taken a hard line when it comes to new office developments. Last November's election brought a slow-growth "residentialist" majority to the council, which is now taking an increasingly skeptical and at times adversarial stance toward commercial proposals. In one of its first land-use actions, the council demanded a new financial analysis for the 441 Page Mill application. More recently, it upheld a citizen's appeal of a four-story mixed-use project at 429 University and mandated a host of design changes for the project.
In addition to deciding which way to go with the pipeline projects, the council is set to consider the exact boundaries of each commercial area where the cap would be in effect; the commercial uses that would be governed by the cap; and the criteria that the council would use in choosing between competing office projects.
If the council formally adopts the criteria that were proposed on March 23, applications would be judged based on their intensity of use, their parking and traffic impacts, quality of design, environmental quality and the "monetary and/or non-monetary value of public benefits offered."