News

Chain-store limit adopted for California Avenue in Palo Alto

Ordinance aims to protect independent retailers — and area's eclectic character

No area in Palo Alto has seen as much change during the past few years as California Avenue, which has just undergone a full-scale makeover and which remains at the epicenter of the local construction boom.

Yet there's one thing that city officials and residents are hoping to preserve about the city's "second downtown": the eclectic, independent and neighborhood-serving vibe.

To that end, the City Council on Monday unanimously passed a law that would regulate chain stores on the bustling strip — an idea that was sparked by a grassroots effort from California Avenue merchants last year.

The law would apply to "formula retail," businesses with 10 or more locations in the United States with standardized characteristics, including "merchandise, menu, services, décor, uniforms, architecture, facade, color scheme, signs, trademark or servicemark," according to the ordinance.

Such businesses would be required to obtain conditional-use permits from the city before they could open on California Avenue. Residents would also have the ability to appeal the approval of the permit.

The new law would not apply to California Avenue's existing chain-store tenants, including Benjamin Moore Paints, The Counter, FedEx, Starbucks and Subway.

In supporting the new law, council members emphasized that they're not trying to solve an existing problem but preventing a potential one. With property values skyrocketing and rents increasing, many long-standing mom-and-pop operations have left California Avenue in recent years. This includes Avenue Florist, Bargain Box, Club Illusions and Cho's Mandarin Dim Sum.

"We don't want retail and personal services to have to compete with today's office rates and get driven out," Councilman Pat Burt said during Monday's discussion. "That's really what has been a big concern."

He noted that offices on California Avenue are now reaching rates of $5 per square foot and "small retail folks who've been there a long time can't compete."

Burt also stressed that the goal isn't to rid California Avenue of chain stores but to "prevent formula retail from overwhelming California Avenue — to have the right balance between formula and local retails."

The council's action has plenty of precedent across the state with a long list of cities that currently regulate chain stores, including Calistoga, Los Gatos and San Francisco. Each city has its own definition of formula retail and a mechanism for regulating such stores.

Jessica Roth, owner of The Cobblery on California Avenue and a leading proponent of limiting formula retail (Roth submitted a petition with more than 700 signatures from people supporting a ban on chain stores last year), was present at Monday night's meeting.

"I hope we can continue the success of something like this (chain-store regulation) in Palo Alto," Roth told the council.

In addition to regulating chain stores on California Avenue, the ordinance would also extend to Cambridge Avenue, effectively requiring redeveloped properties on the street to include ground-floor retail.

This provision proved to be among the most controversial and debated. Council members struggled to determine whether the extension to Cambridge would produce the desired results of producing more retail.

While agreeing to extend the retail district, the council directed staff to return at a future meeting with more information about the "depth of retail" that should be required on Cambridge to make businesses viable.

Steve Pierce, the applicant behind a proposed development at 380 Cambridge Ave., was among the skeptics.

Pierce said while he supports the general drive to support independent businesses and limit chain stores, he opposes the extension of the retail zone to Cambridge Avenue, which he said is ill-suited for shopping. Most potential retailers, he argued, will look at the "retail on one side and parking lots across the street ... and say, this is not where we can survive."

"Retail is kind of a unique use and it's not one of those things where you can say zone it and they shall come," Pierce said. "Retail needs a lot of nuanced things to be able to locate."

But Larry Skarset, who owns Cambridge Barber and Beauty Salon at 382 Cambridge Ave., disagreed. His business is one of three that currently operates at the site of the proposed development by Pierce.

"Maybe it's not great retail, but it's been good to me," Skarset said.

The area, he said, is "changing too fast."

"It affects me and I hate to see some of the small businesses being taken out," Skarset said.

Several council members said they were cautious about bringing new rules to Cambridge Avenue, including Councilwoman Liz Kniss who said the proposed ordinance "isn't fully cooked yet."

The council, Kniss said, is "indicating that retail has to go in there and yet we're really not providing for the parking" in the congested business area.

Councilman Burt was more confident about the move, though he also acknowledged his "sense of caution."

"I just don't want to be overconfident that just because we desire an outcome, we can mandate it," he said.

Vice Mayor Greg Schmid acknowledged that the city is "experimenting" with new things and suggested that the council revisit the ordinance in two years, a recommendation that the rest of the council accepted.

Mayor Karen Holman, meanwhile, was among the most enthusiastic proponents of the new law and argued that after many months of discussion, the time has come to move forward. Kicking the can down the road, she said, would be "inviting more intrusion."

"I think we have promised the community and the California Avenue merchants and businesses along there that we'd take actions," Holman said.

Comments

13 people like this
Posted by common sense
a resident of Midtown
on Sep 22, 2015 at 4:06 am

Basically the city government is now going to decide which businesses are "deserving" of being in Palo Alto - I guess they didn't learn their lesson from their past decisions of trading off PC zoning for having grocery stores, or capping grocery stores at 20,000 feet (remember the Lucky/Albertson fiasco lead to what happened to Alma Plaza)?


15 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Sep 22, 2015 at 7:19 am

Rents will be the most deciding factor whether a small mom and pop business will survive. Second deciding factor will be minimum wage.

On a second note, I went to an event on a Saturday evening on Cal Ave recently. As the event ended shortly after 10.00 pm, the place was empty. The only people were other eventees returning to their cars. No night life in Cal Ave.


26 people like this
Posted by Nonnie Mouse
a resident of Another Palo Alto neighborhood
on Sep 22, 2015 at 8:05 am

This is dumb as dirt!


15 people like this
Posted by Ellie
a resident of College Terrace
on Sep 22, 2015 at 8:30 am

Thank you city council for protecting indy businesses and retail! And for capping office development that is making our need for housing and traffic worse. This is so appreciated by those of us that rely on and love Cal Ave. and thank you for including Cambrige ave - Developer Pierce argued that for retail to thrive there needed to be enough retail to attract customers and on Cambridge there were so many office buildings - he offered this to justify getting to build his own office building there and to not protect the retail there - so cynical and manipulative. The council didn't buy it though. Thank goodness we elected this council that cares about residents more than rich developers.


4 people like this
Posted by Downtown Worker
a resident of Menlo Park
on Sep 22, 2015 at 9:47 am

Well, actually, it may be in his own interest, but Pierce is clearly right that office workers help support restaurants and retail where they work. According to downtown retailers, about half of customers are office workers, with the other half being residents who walk or drive in. The Chamber of Commerce found that the city's high sales tax base is a consequence of office workers spending money on their way to and from work.

Just because the Chamber of Commerce represents "business" or someone who spoke to council is a "developer" doesn't mean their arguments are wrong.


5 people like this
Posted by Seems to be a bad idea
a resident of Barron Park
on Sep 22, 2015 at 10:00 am

Is there any clear evidence that this has worked elsewhere? The city's planners cited various cities where a formula retail ban has been enacted but didn't cite the outcome. The city provided no evidence or planning reviews with business minded results. This appears to be because the outcomes of these types of business unfriendly bans don't really work.


3 people like this
Posted by RB
a resident of University South
on Sep 22, 2015 at 10:04 am

"According to downtown retailers, about half of customers are office workers, with the other half being residents who walk or drive in."

I doubt office workers are shopping at clothing boutiques. Coffee yes, but not the retail that most of us miss like art galleries, boutiques, and book stores.


Posted by six of one
a resident of Another Palo Alto neighborhood

on Sep 22, 2015 at 10:28 am


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4 people like this
Posted by Nayeli
a resident of Midtown
on Sep 22, 2015 at 10:42 am

Nayeli is a registered user.

I miss Quiznos on California Ave.

I wouldn't miss it if Ike's or the Sandwich Spot moved to California Avenue. However, would that be considered a "chain?" Ike's recently opened its 16th location -- but most of their locations are relatively new and it still looks and feels like a "mom and pop" store rather than a chain. The sandwiches are unique to each location. Something similar can be said about The Sandwich Spot.

While there are some decent sandwich restaurants in Palo Alto (e.g., Driftwood, Ace of Sandwiches, etc...), they just aren't the same as places like Ike's. A place on California Ave. would be perfect for their large, eclectic and, yes, local menus.


14 people like this
Posted by grumpy
a resident of College Terrace
on Sep 22, 2015 at 10:46 am

We have an entire street dedicated to mom and pop retail. It's called El Camino and it is full of nail salons, karate dojos, chinese restaurants, and computer repair shops. And it is spectacularly ugly. Chain retail tenants (like the Counter) can afford to pay the higher rents that allow landlords to build-out nice spaces. If you want a beautiful streetscape, you need to allow for higher rents to justify landlord tenant improvements. Was this really a problem the neighborhood wanted addressed?


Like this comment
Posted by Reader
a resident of another community
on Sep 22, 2015 at 10:47 am

Ike's Place is moving into the former John's Cafe on Lytton Avenue in downtown Palo Alto.

Palo Alto Online blog entry: Web Link

They're renovating the space right now.


5 people like this
Posted by 38 year resident
a resident of Old Palo Alto
on Sep 22, 2015 at 11:00 am

To RB...Art galleries and book stores would be a guaranteed fail on California Ave. Boutiques? Probably the same outcome, though Leaf and Petal has survived over the years. Rents are too high for these types of endeavors to make a profit and survive. Think of the recently departed Chez Franc that needed to charge $8 and more for gourmet hot dogs (and they were really good dogs).

To Nayeli...According to the new policy, Ike's would be a no go.

Look for the council to rethink and revise this as long time tenants leave due to inevitable rent increases. Those local small shops would most likely benefit from more foot traffic stimulated by one or two successful chain operations, like Ike's or similar.


14 people like this
Posted by whatever
a resident of Evergreen Park
on Sep 22, 2015 at 11:29 am

whatever is currently in place on California Avenue is working great!! this is the most energized, fun, active, full, place to meet and shop, eat, drink, and whatever else. every day we see new people having a great time on California Avenue--all the shops seem to be doing very well and lots of people on the streets and in the shops. As opposed to down town Palo Alto--which is very cold, unfriendly, oppressed. all the big developers have ruined the rest of Palo Alto--but, leave this neighborhood as it is. it is a fun, productive time for businesses and families and get togethers which create more business.


5 people like this
Posted by Sophia
a resident of College Terrace
on Sep 22, 2015 at 12:07 pm

To Resident:
Except University Ave, the nightlife dies after 10 pm in every city on the Peninsula, except the large ones.


4 people like this
Posted by Sophia
a resident of College Terrace
on Sep 22, 2015 at 12:09 pm

I have a question that no one i asked so far can answer:
On California Ave, why there are only portions of the sidewalks fixed, why not all of them? Why there are old, dirty, cracked portions left?


15 people like this
Posted by Reader
a resident of another community
on Sep 22, 2015 at 12:43 pm

@38 Year Resident:

The new city policy allows for chain business owners to apply for an exception. Being a chain does not automatically rule you out. It would be up to the City to waive any given chain business owner. My guess is that Ike's Place would very much be the type of place that the City might grant an exception.

Note that this new program is basically a pilot to be revisited in two years time. There's nothing that says that the city can't revoke the policy at any time or change it.


13 people like this
Posted by NIMBYWORLD
a resident of Gunn High School
on Sep 22, 2015 at 1:27 pm

Is there anything the Council doesn't know ? They are now Urban Planners and retail experts ... just because a Socialist on the Council has his office on Calif Ave ( how about we ban biotech co's ... they can be very dangerous you know --- Council person out of business ? ) doesn't make him a real estate expert. Such evil empires such as Togo's , Kirk's Burgers , and Erik's Deli will all be 'banned' from Calif Ave...well done NIMBYs . A few more rules like this and the street will be a ghost land. Are Walgreens and Pete's Coffee enemies of The People? In most things, less is more. Less regulation! let the market decide what retailers should be there ... that is America.


12 people like this
Posted by Paying Customer
a resident of Mountain View
on Sep 22, 2015 at 1:38 pm

I'm not a resident, but I'm glad to see there will be islands in PA where the common stores that are on seemingly EVERY street corner will be absent.
We've gotten out of the habit of heading up there recently due to the construction, but we'll continue to keep CA Ave on the "Go to" list when ride up from Mtn View for meals and some sidewalk strolling/shopping.
If the chains moved in we likely wouldn't keep coming back...we can get the chains everywhere.
Happy to be able to continue to add to the PA tax base.


6 people like this
Posted by Abitarian
a resident of Downtown North
on Sep 22, 2015 at 1:50 pm

In recent years, the Planning and Community Environment Department as well as the Planning and Transportation Commission have been averse to using the word "no". It will be interesting to see how they respond to conditional use permit applications.


2 people like this
Posted by the_punnisher
a resident of Mountain View
on Sep 22, 2015 at 4:20 pm

the_punnisher is a registered user.

Dang! Someone mentioned TOGO'S already. TOGO'S were in the DTC. Then I think high rents forced them out to Westminster. But a TOGO'S survives in Palo Alto East, I mean Boulder ( home of Mork&Mindy ) CO! Yes, our 10 Square Miles surrounded by REALITY HAS A TOGO'S! Just remember to ride a bike ( scooters & MCs are OK too ) because they hate cars there.
Yes, our People's Republic of Boulder has even Nationalized Excel's Power Station and infrastructure...after their FAILED Smartmeter Project P.O.ed their town Council. Where the anger about police started when they killed a local favorite elk ( Samson ) and LIED about it! ( even after they posted trophy pictures all over the Internet! )
So get busy, Palo Alto, you have a lot of catchup ( or should I say Ketchup ) to do! Your reputation is at Steak!
)


4 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Sep 22, 2015 at 4:42 pm

@NIMBYWORLD:

Don't make us guess. Who is that Socialist Councilman? Name him please. Let him defend himself online. Don't hide behind your post comments.

And, unless I'm mistaken, Kirk's isn't a chain yet. I don't know what drove them to move off California Ave but I'm guessing it was rent. I know nothing about Erik's deli. I'm with you on 'let the market decide' and believe me it will, and soon, but my gut feeling is the mom and pops we all remember, and loved so fondly, can't compete and afford $5/sq ft/monthly rents. So, most of them will be gone forever and the chains with proper credentials will be gladly received, in the end, to fill up those empty spaces on California Ave.

And don't forget, this is just one of the many grand experiments we do in PA, with Council taking the lead. If it doesn't work out, then just pass a new ordinance to make adjustments.

That's okay. That just shows that feedback from the local citizenry was heard by Council and listened to. So, power to the people.

Let the experiment go forward. No test tubes, bunsen burners required.

Hopefully more facts and input will be provided!


4 people like this
Posted by Annette
a resident of College Terrace
on Sep 22, 2015 at 5:18 pm

Thank you, Grumpy from College Terrace, for the best description ever of El Camino: SPECTACULARLY UGLY. How about spending some beautification dollars on this royal road? That would be a significant public benefit.


2 people like this
Posted by 38 year resident
a resident of Old Palo Alto
on Sep 22, 2015 at 5:24 pm

Thanks, Reader. I didn't know about the exception. As I stated, I'm sure they'll have to adapt and play it by ear. That would be good policy for everybody.


2 people like this
Posted by Robert
a resident of another community
on Sep 22, 2015 at 6:36 pm

Why not just have the city council dictate which stores they think should be allowed to exist on Cal avenue, and which shouldn't? This seems to be an exercise in doing that, without explicitly "doing that".


6 people like this
Posted by Reader
a resident of another community
on Sep 22, 2015 at 7:18 pm

@38 Year Resident:

It is covered in this article as well as previous Palo Alto Online articles about this topic:

"The law would apply to "formula retail," businesses with 10 or more locations in the United States with standardized characteristics, including "merchandise, menu, services, décor, uniforms, architecture, facade, color scheme, signs, trademark or servicemark," according to the ordinance.

Such businesses would be required to obtain conditional-use permits from the city before they could open on California Avenue. Residents would also have the ability to appeal the approval of the permit."


Posted by Agenda
a resident of Another Palo Alto neighborhood

on Sep 22, 2015 at 8:10 pm


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2 people like this
Posted by PAmoderate
a resident of Old Palo Alto
on Sep 23, 2015 at 1:03 pm

PAmoderate is a registered user.

Nice. I always wanted boarded up storefronts on California Ave.


4 people like this
Posted by OPar
a resident of Duveneck/St. Francis
on Sep 23, 2015 at 1:22 pm

Kirk's moved because its lease was up and the owner wanted to tear down the Kirk's building and put up a building that could have more tenants. Which is exactly what happened. Kirk's found a smaller location at Town and Country, where it gets lines out the door at lunch thanks to being across the street from Paly.

PAModerate,

There's *no* reason to have boarded-up storefronts on Cal Ave unless a landlord is being extra-greedy about rents. Cal Ave. has quite a bit of well-established local retail--Keeble and Shugat, Village Stationers, two supermarkets, Accent Arts, Leaf and Petal--along with some new ones and, of course, several restaurants. It's clearly viable. Now that independent bookstores are having a bit of a comeback, I hope a bookstore can open and succeed there.


2 people like this
Posted by PAmoderate
a resident of Old Palo Alto
on Sep 25, 2015 at 7:52 am

PAmoderate is a registered user.

"There's *no* reason to have boarded-up storefronts on Cal Ave unless a landlord is being extra-greedy about rents. "

That's hilariously delusional. Just need to see how well these restrictions work in San Francisco (i.e. not well). And, one of those supermarkets would not be allowed on Cal Ave moving forward.

Old Palo Altans need to get over their desire to put 1984 Palo Alto in amber and hope it doesn't change. That's how a neighborhood starts to decline.


2 people like this
Posted by OPar
a resident of Duveneck/St. Francis
on Sep 25, 2015 at 3:27 pm

PAModerate,

Chains *are* allowed, there's just an extra hoop to get through for approval. And, yes, greedy landlords *are* a problem--we see storefronts in the downtown stay empty for years because landlords don't want to drop the rents (because it screws up the assessed values of the buildings).

This isn't San Francisco, we have a much more limited retail space here.

I'd say the one who's living in a time warp is you, not me. The idea that making everything look like a strip mall is the right idea for development is 20 years out of date.

Fact is--Cal Avenue *isn't* full of chain stores and it *is* economically viable. I listed several independent tenants that have been there for years. (I didn't come close to mentioning them all.) Yes, Chez Franks didn't make it. Guess what? It's a restaurant--restaurants *often* don't make it. It's a high-risk business with low margins.

I have to wonder if the people who think Cal Ave isn't functional actually ever spend any time on the street. There are no boarded-up storefronts and there is (despite what 38-year resident thinks) an art gallery that's been there for years.


2 people like this
Posted by Curmudgeon
a resident of Downtown North
on Sep 25, 2015 at 4:01 pm

"Old Palo Altans need to get over their desire to put 1984 Palo Alto in amber and hope it doesn't change. That's how a neighborhood starts to decline."

Uh-uh. A business neighborhood starts to decline when its elements become disposable pieces of large outside interests that have no connection or commitment to the community.

City hall called this one right.


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