News

Palo Alto to sell development rights to pay for new EcoCenter

City Council agrees to sell density bonuses to raise $300,000 for restoration of old Sea Scout building

Shaped like a ship forever moored in the Baylands, the EcoCenter is a building like no other in Palo Alto.

Known in its previous life as the Sea Scout building, the center was successfully rehabilitated and enhanced by the nonprofit Environmental Volunteers before re-opening to the public in 2012. Today, it attracts about 5,000 nature lovers annually, many of them students looking to experience the wildlife wonders of the marshy nature preserve.

For the City Council, the EcoCenter also epitomizes a successful public-private partnership. Under an agreement that the city reached with Environmental Volunteers in 2007, the group raised $3.8 million to restore the damaged, sinking, flood-prone building that the city was on the verge of demolishing in the late 1980s. Today, the nonprofit uses the restored EcoCenter as its headquarters and to stage exhibits about science and nature.

On Tuesday night, the council recognized the group's accomplishments with words of praise and a commitment of money. By a 8-0 vote, with Liz Kniss absent, the council agreed to pay Environmental Volunteers $300,000 for serviced rendered, as was agreed on in 2007. In agreeing to pay the nonprofit, Councilman Greg Scharff called the new EcoCenter a "fabulous building," Councilman Tom DuBois said it looks "great" and Mayor Pat Burt called it a "real community gem."

"The building was both literally and figuratively taken out of the mud by the process and restored to real grandeur and a facility that ... the community will treasure for decades and decades to come," Burt said.

Councilwoman Karen Holman recalled that before the group intervened, the building was "falling into the Bay."

"It was flooding," Holman said. "It was in really bad shape."

But while council members lauded the project, they were far less enthused about the proposed method for compensating the Environmental Volunteers for services rendered. Under the 2007 agreement, the money would be raised through sale of "transferable development rights," a financing mechanism that allows developers that buy these rights to add density to new projects elsewhere in the city.

In today's climate of parking frustration, traffic rage and growth anxiety, the practice of selling density bonuses to developers is far less popular than it was in 2007. Most council members agreed Tuesday that it's time to re-evaluate the program and see if it should be scrapped or reformed.

Three council members took it a step further and argued that the city should avoid this mechanism altogether and just pay the group $300,000 out of the city's General Fund. Councilmen DuBois, Eric Filseth and Greg Schmid, all affiliated with the council's slow-growth "residentialist" wing, took a hard-line stance against the practice of selling density bonuses. DuBois said doing so would set a bad precedent at a time when there is widespread concern about downtown density. Filseth argued that paying with cash is the simpler and more transparent route.

"I think the group has done a tremendous job," Filseth said. "This is exactly the kind of thing that makes sense for the city and I think we ought to invest in it.

"In general, our job is – if something is worth paying for, we should pay for it. We shouldn't muck around with TDRs (transferable development rights), we should just pay for it in cash. It's simpler. We have it. It's the right kind of project."

Other council members also had some misgivings about the transferable rights, though most agreed that they should honor the commitment of their predecessors in 2007 and proceed with the sale of 2,500 square feet of development.

Given the hot real estate market, staff projects the sale of these rights to raise about $562,000. In 2009, when the city tried to auction off these rights for $90 per square foot, there were no takers, the city's Chief Financial Officer Lalo Perez said. Today, the city is expecting to do much better. Last year, the city successfully sold 9,600 square feet of development rights at $300 per square foot.

Burt said that while it would be appropriate for the council to reconsider the policy, it would constitute bad governance to abandon it in this case, given the prior council's decision.

"I just think it's not good governance to use what may be opposition to a policy and an ordinance as a basis to change a prior council's action and look for ways to do backdoor changes to ordinances rather than front-door changes," Burt said.

The council ultimately voted 5-3, with Liz Kniss absent and DuBois, Filseth and Schmid dissenting, to reject a proposal from Filseth to use the General Fund for the payment. After that vote, all eight members voted to pay back the nonprofit from proceeds raised through the sale of development rights.

The council also acceded to several other requests from the nonprofit group. Namely, it absolved the group from its prior agreement to build a bathroom near the EcoCenter (a task that will now fall to the city) and agreed to refund the fees the group had spent for various permits relating to the project.

Allan Berkowitz, executive director of Environmental Volunteers, said the group had spent more than $40,000 in fees.

"It feels unfair for us to have paid fees to the city to restore the city's property," Berkowitz said.

He also told the council that while the group has an obligation to partially fund the construction of the new bathroom, they would prefer to have the city manage the project.

"Our core competence is education," Berkowitz said. "We believe city staff can better manage the development process and they can do so more efficiently and at a lesser cost."

The council agreed and directed staff to return at a later date for a discussion about funding sources for the new bathroom. The facility is expected to cost about $300,000.

Related content:

VIDEO: EcoCenter opens at Palo Alto Baylands

EcoCenter's program introduces kids to the Baylands

Comments

14 people like this
Posted by Resident
a resident of University South
on Jan 20, 2016 at 8:10 am

For many renters in the downtown, our "concern about density" is that downtown isn't dense enough. More housing is good for Palo Alto residents, especially renters, in a time when there's a severe shortage - just not enough housing to go around.

Sell TDRs, but make them apply only to housing. The city raises money to pay for infrastructure, the residents get they housing we need. We all win.


17 people like this
Posted by Chip
a resident of Professorville
on Jan 20, 2016 at 10:45 am

Unfortunately, we haven't adequate infrastructure to support increased housing density & subsequent transportation needs. Navigating narrow streets with clogged traffic on major "thoroughfares" (Embarcadero, University) is miserable. It's easy to say "bike or walk" but that is not viable for local residents who have 1) multiple young children to transport, 2) physical impairments or advanced ages, 3) needs to regularly provision their homes, families, & pets with foods & sundries. Delivery trucks regularly block traffic on downtown streets as they supply businesses (or deliver Amazon goods to those of us who can no longer tolerate the congested streets.)


21 people like this
Posted by Puzzled
a resident of Downtown North
on Jan 20, 2016 at 11:17 am

I am totally in sympathy with the need for housing, whether rental or not. However, that boat has sailed. Rental housing built by developers is going for upwards of $6K for a small 2-bedroom. That's more than $80K per year in rental costs that return no tax advantage--all outgo, in other words. How sustainable is that? People look at the current economic boom and think they can spend half their income on housing, but what goes up comes down (this is from 40 years of watching Palo Alto cope with these ups and downs). When the inevitable downturn occurs (maybe in the works now?), the economy contracts and businesses leave for cheaper places; Palantir, which occupies much of downtown now, might pull up stakes and leave a ghost town behind. Workers will be stuck with expensive leases they can no longer afford as wages stagnate or sink. Those who bought homes or condos at the height of the market will scramble to get out of their underwater mortgages. This doesn't make me happy, but it's inevitable--no boom lasts forever. Palo Alto has already turned into a town of haves, as the lower-income teachers, retail workers, and pretty much anyone not affiliated with technology or real estate are priced out and now drive long distances. Building more expensive housing doesn't make our neighborhoods more diverse, and developers of course want top dollar for everything they build. Rent control doesn't appear to be in the cards. Our past wild development spree now takes on a life of its own as the developers cry foul on any attempt to rein it in. How can this be fixed?


16 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jan 20, 2016 at 11:31 am

There are possibly a few areas around town which can cater for some dense development, but there are many areas that cannot. I hope that this development deal does nothing to make traffic worse, parking worse, clog up schools, or anything else that makes the quality of life for existing residents any worse.

I am not a NIMBY, but expansion without infrastructural improvements makes absolutely no sense.


1 person likes this
Posted by Resident
a resident of University South
on Jan 20, 2016 at 11:47 am

So for those of you who want no growth until infrastructure is improved, what are you thinking of? Improved buses? BRT?

The newcomers to Palo Alto who paid the high home prices are the ones paying all the taxes (that's just how Prop13 works). They don't rent, but the ones I know did until pretty recently and they are quite sympathetic to growth. We also just passed a hotel tax measure to pay for infrastructure.

So if you want more infrastructure, let's talk about it. Let's have more housing AND more infrastructure.


12 people like this
Posted by Crescent Park Dad
a resident of Crescent Park
on Jan 20, 2016 at 12:33 pm

Infrastructure before expansion.

As anyone will tell you, there is a long list of repair/replacement items for CPA infrastructure. This must take the highest priority --- how can you add on greater stress to an infrastructure system that is at or above capacity and then isn't even functioning properly as it is today?

And don't forget school capacity while we're having this conversation. We are maxed out there as well.


2 people like this
Posted by resident
a resident of another community
on Jan 20, 2016 at 1:07 pm

Why can't Mountain View become the new Palo Alto? I mean in terms of DESIRABILITY, no slam on Mountain View intended. That's what eventually happens when the radius around a central institution like Stanford is full, it expands.


10 people like this
Posted by Keep it simple.
a resident of Greenmeadow
on Jan 20, 2016 at 3:05 pm

I think transferable development rights are a messy way to finance something like this, a relatively small sum in the scope of things. Keep it simple.


13 people like this
Posted by Laughable
a resident of Downtown North
on Jan 20, 2016 at 3:10 pm

Thanks, Resident, for the laugh of the day:
>For many renters in the downtown, our "concern about density" is that downtown isn't dense enough

P.S. I also have a bridge for sale at a good price.


28 people like this
Posted by PA for Sale
a resident of Stanford
on Jan 20, 2016 at 3:13 pm

Mayor Burt's rational for going ahead with the sale of TDR's to pay off Environmental Volunteers just doesn't make sense.

A sitting city-council has no legal or ethical responsibility to any previous city-council. The sitting city council's legal and ethical responsibility is to represent the residents of the city.

Question for Mayor Burt: if a previous city council made a blatant bad decision, that was currently creating a serious problem for the city, would it be "not good governance" to reverse the previous council's decision?

The real "bad governance" is feeling bound to any previous council's decision... that is why we have elections every two years. Honoring a previous council's decision is actually obstructing the democratic process of governance.

I doubt very much that the Environmental Volunteers care how PACC pays them off, and it is interesting to note that it looks like PACC is going to make an extra $200K by selling the TDRs, instead of paying the Environmental Volunteers out of the general fund.


7 people like this
Posted by Ben
a resident of Crescent Park
on Jan 20, 2016 at 8:39 pm

Going forward with a TDR sale seems a lot like a pay to play operation has just sprung to life in city hall. A variant of the planned community: Developers pay chump change for a pay day down the road at residents expense.

Bravo city hall.


11 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jan 20, 2016 at 10:22 pm

"For many renters in the downtown, our "concern about density" is that downtown isn't dense enough. More housing is good for Palo Alto residents, especially renters, in a time when there's a severe shortage - just not enough housing to go around."

You have met the enemy and it is you. There is plenty of housing for a population comparable to the housing stock. Rents are high because too many people are trying to move in and are bidding up the rents.

So back off. Palo Alto owes you nothing. That's the real world. Get used to it.


2 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jan 20, 2016 at 10:31 pm

Oops, forgot an alternative. Palo Alto builds low cost housing for very low income residents. Contact the Palo Alto Housing Corporation, find out what the income limit for that housing is, and have your employer adjust your compensation so you qualify. No sympathetic boss would decline such a request.


4 people like this
Posted by Prepared Speeches
a resident of Another Palo Alto neighborhood
on Jan 21, 2016 at 5:29 am

"Our past wild development spree now takes on a life of its own as the developers cry foul on any attempt to rein it in. How can this be fixed?"

There are many things you can do to fix it, you just have to remember that talk is cheap and every person has to take it on themselves to do simething or nothing gets done. Menlo Park had a similar situation in which the Brown Act was used to nullify their mayoral election. Why didn't it get done here? This action was just a salvo, the beginning. Want to keep it from getting worse? Then act. Every action of Council can be referended, and if you get enough signatures, election is not inevitable. Remember Maybell? They got two referendums (referenda?) together, one they didn"t have to go to election and got enough signatures in 10 days. Which is an interesting thought - these development rights coukd be bought up by someone wanting to make razing BV more attractive. Remember Prometheus pulled out at BV just after the Maybell referendum when it bcame clear they couldn't upzone? Now they can. Once it hapoens, it's too late. If you don't like it, you can act.

Then of course there is recall - one only has to look at Scharff's false election promises both times.

The development arm gave the town a bone and sat waiting to pounce figuring the town is naive and has a short attention span. Burt was never really a residentialist but played along maybe to lull things further for no recount. The ball is in your court if you care.


Like this comment
Posted by Kazoo
a resident of Old Palo Alto
on Jan 21, 2016 at 12:08 pm

Did I miss something or was this story not about the EcoCenter? Guess y'all can read between the lines which makes Palo Altans truly bizarre. Regarding the statement that current council members are not obligated to uphold old deals made by former council members, well, it' called contract law. The only exception to this is a "promise" that former council members made to a former city manager that he would be allowed to stay in a city paid for house (including paying property taxes and house maintenance) until 2015 but yet he still continues to occupy the residence at the expense of Palo Altans.


Like this comment
Posted by Curmudgeon
a resident of Downtown North
on Jan 21, 2016 at 12:37 pm

"The only exception to this is a "promise" that former council members made to a former city manager that he would be allowed to stay in a city paid for house (including paying property taxes and house maintenance) until 2015 but yet he still continues to occupy the residence at the expense of Palo Altans."

Frank Benest, aka King Frank I, ruled then and apparently rules now. During his reign, our starstruck councilmembers could not do enough to please him. In return, he treated them with overt contempt. Go figure.


Sorry, but further commenting on this topic has been closed.

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