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Businesses blast proposed office restrictions in Palo Alto

Stanford Research Park companies concerned about plans to limit employee density, restrict facility expansions

As Palo Alto prepares to adopt a new plan to guide future development, some of the city's largest companies are rising up against proposed policies that would regulate employee numbers and require businesses to obtain special permits before they could build new office facilities.

This week, a group of major Stanford Research Park employers submitted letters arguing that the new restrictions will threaten their businesses and deter new companies from setting up shop in the city. Representatives from some of the major employers also attended the Tuesday meeting of the City Council to reinforce their concerns about the city's proposed zoning changes, which seek to address Palo Alto's worsening traffic congestion and parking shortages.

The proposed zone changes are identified in the Draft Environmental Impact Report (EIR) that the council recently commissioned as part of an ongoing upgrade of the city's land-use bible, the Comprehensive Plan. The council held a long, wide-ranging and, at times, tense discussion on the document and agreed to continue the debate to a future meeting.

The EIR considers four different planning scenarios for Palo Alto's future, with varying degrees of job and housing growth (two other planning scenarios will be considered in a supplemental report). Three of these scenarios in the current EIR call for zoning amendments, including one that would require a "conditional -use" permit for new office and research-and-development uses "in order to regulate employment densities," according to the document.

But while the zone changes are still a long way from being implemented, it is already stoking fear among large companies, particularly those in Stanford Research Park. The list of companies protesting the new policies, includes Lockheed Martin, VMware, Palo Alto Research Center, Jazz Pharmaceuticals and Machine Zone. Each has argued that the proposals to require conditional-use permits for new office space and to limit employment density would carry unintended consequences that would threaten the prosperity of both the Research Park and the city at large.

These concerns are amplified in a letter from Tiffany Griego, manager of Stanford Research Park, and Jean McCown, Stanford University's associate vice president for government and community relations.

Commenting on the draft EIR, Griego and McCown argued that the document's proposed trip-reduction measures "could have detrimental and perhaps unintended consequences for the economic vitality of the Stanford Research Park."

Specifically, the letter stated, density regulations and conditional-use permits would "discourage new companies from locating in the SRP."

"If business leaders believe they may be hindered from hiring new employees as their business needs change, or hindered form sub-leasing space if their business contracts, they will certainly consider locating elsewhere," the letter stated. "For a company to decide to locate in Palo Alto, their leaders need predictability and flexibility to grow and/or contract within existing space, repurpose existing space to meet evolving business needs, or 'exit' space by sub-leasing excess space to another entity, whose employee headcounts would be outside of their control."

The new restrictions would also impair the Research Park's ability to support "the most vibrant and broad mix" of research-and-development businesses, which over recent decades transitioned from goods to services to "innovation industries," which reflect the "convergence between technology and content," according to the letter. In addition, the policies could require companies to build larger facilities elsewhere to accommodate job growth.

"Such a policy cuts against current thinking about sustainability land use, and could result in an inefficient increase in energy consumption of building materials associated with new buildings elsewhere," the letter states. "Equally important, concentration of employee density is a necessary factor in achieving successful trip reduction programs."

The companies in the Research Park offered their own critiques of Palo Alto's proposed traffic-management solutions. Marshall Case, vice president for infrastructure services at Lockheed Martin, said the company is "continually investing in our facilities to perform renovations or updates to respond to changes in our business operations."

"Not being able to depend upon a consistent process or timeline has the potential to negatively impact our ability to perform our operations within our current facility," Case wrote.

Ronald Malouf, director of facilities at Jazz Pharmaceuticals, expressed concerns about what he called in a letter "quotas on headcounts," a policy that he said would "restrict our ability to hire professionals required to guide a new drug through clinical trials and FDA approval."

He noted that on March 30, the FDA approved the company's new drug, Defitelio, which is used to treat patients with hepatic veno-occlusive disease (a life-threatening organ dysfunction following stem-cell transplantation."

The company, he said, had hired dozens of specialists in Palo Alto to "design, administer and manage the clinical trials and approval to ensure Defitelio would be available for patients in dire need of the life-saving drug.

"Having the ability to ramp up our headcount for special projects is very important to us," Malouf wrote.

VMware, meanwhile, took issue with the city's ongoing exploration of a possible tax measure that would fund transportation improvements. The measure, which could potentially appear on the November ballot (the city is in the midst of polling), would likely establish a business tax based on employee headcount.

LindaMarie Santiago, VMware's director for real estate and workplace, wrote that the company is concerned that it will be forced to divert "a substantial share" of the financial resources it currently uses to fund traffic-reduction efforts to pay for the new tax. The company has recently joined other major employers at the Research Park to work on new transportation-demand-management (TDM) programs aimed at reducing the rate of solo drivers.

"For VMware, a head count tax of $100 per person per year drastically undermines our ability to fund our own transportation management programs and SRP (Stanford Research Park) TDM programs, all of which are proving to be effective in reducing traffic impacts in SRP and beyond," Santiago wrote.

It's not just Stanford Research Park companies that are concerned. Judy Kleinberg, CEO of the Palo Alto Chamber of Commerce, joined them in criticizing the conditional-use permit idea, which she said would "hinder the ability to thrive in Palo Alto and damage how a business operates."

"We believe the city should focus on impacts and mitigations, not limiting employment density and jobs reduction," she said at Tuesday's meeting.

The council for its part gave little sign of abandoning these proposed zone changes. Its discussion was broad in scope and vague in content, with some members taking the opportunity to recite their long-standing philosophical positions about the city's high ratio of jobs to housing or to question the financial analysis of the four planning scenarios being evaluated (each would result in modest revenue growth, according to the analysis).

After more than two hours of debate, with several council members still not having spoken, the council voted unanimously to resume the hearing at a future date.

Vice Mayor Greg Scharff was one of the few council members to address the businesses' concerns. He concurred with the speakers that local businesses need "flexibility" for their research-and-development and office facilities. He also said he was concerned about creating "uncertainty in the process," with businesses not having a clear idea of what they can do with their properties.

"I think we can really damage the business environment by creating uncertainty," Scharff said. "Businesses need certainty more than anything else."

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Comments

19 people like this
Posted by Gus L.
a resident of Barron Park
on Jun 7, 2016 at 7:13 pm

Small Businesses are getting tired of City Hall also.
The regulations are increasing and making doing business more and more difficult.


67 people like this
Posted by Norman Beamer
a resident of Crescent Park
on Jun 7, 2016 at 7:14 pm

Palo Alto needs to go on an office diet, but the business interests are demanding more Double Quarter Pounders with Cheese.


29 people like this
Posted by Housing
a resident of University South
on Jun 7, 2016 at 8:25 pm

Palo Alto needs more housing. Talking about how many office workers can fit in a room is a distraction from the real issues.

The Malibu-ization of Palo Alto is ongoing. No matter how much office space is restricted within Palo Alto's borders, the whole Peninsula is going through a boom. This is one of the most productive places in the world. People want to live here. It shouldn't only be the very rich who are allowed to do so. It's not good for the people who are being forced out now by higher rents, and it's not good for those of us who remain.

Most of the families in my child's daycare class lived in Palo Alto four years ago when they were all babies. Now I can count on the fingers of one hand those who remain. It's no surprise elementary school enrollment is declining - ask anyone with young kids if their friends can afford to live in Palo Alto?

Do you want Palo Alto to be that kind of city? If you don't, stop playing around and solve the real problem: housing. Encourage condos and apartments downtown. Make new space for a new generation of families.


34 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 7, 2016 at 10:46 pm

"The regulations are increasing and making doing business more and more difficult."

Yes, we've all noticed the mass exodus of commerce. Everybody is moving to municipalities that don't require a business license. Downtown is looking like a ghost town, and all new construction activity has ceased. Cal Ave ain't doing no better.


21 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 7, 2016 at 10:57 pm

"...some of the city's largest companies are rising up against proposed policies that would regulate employee numbers and require businesses to obtain special permits before they could build new office facilities."

Yep. Their solution to the jobs-housing imbalance is to remove all restrictions on employment growth. Palo Alto got that Word bigtime from pro-development former mayor Judy Kleinberg, now Chamber of Commerce president and a Woodside resident.

Stanford ain't none too pleased with us either. Again. I think Palo Alto should de-annex the Stanford Industrial Park, and thereby jettison a major, very troublesome cause of its jobs-housing imbalance.


32 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jun 7, 2016 at 11:24 pm

Maybe businesses should be paying for the infrastructure and programs their employees use instead of making the taxpayers fund their corporate growth.

How about making Google et al fund the "iconic" bike bridge that primarily gets the employees to their jobs?

How about shifting the costs for the new carpool program where we pay for each car trip for commuters coming to and going from town to the employers and employees?


17 people like this
Posted by K
a resident of University South
on Jun 8, 2016 at 3:22 am

Unless you are a billionaire or already own a home, the housing situation is beyond horrible for new people relocating here for a job, especially the rental market. It's mostly downright depressing, really. We are not "quotas on head counts", a number or statistic. We are unique individuals, human beings and we want a place to call home. Otherwise what's the point of all this great business and innovation. Eh?


14 people like this
Posted by Concerned Resident for Business
a resident of Midtown
on Jun 8, 2016 at 11:19 am

I'm concerned that there are such negative and intrusive restrictions being proposed for businesses, like limits on employee head counts. That's ridiculous. The anti-business movement in Palo Alto has gone way too far!!


20 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 8, 2016 at 12:25 pm

"Unless you are a billionaire or already own a home, the housing situation is beyond horrible for new people relocating here for a job..."

Apparently Silicon Valley is gone.

When it existed people came here with bold ideas, did their startup, IPOed it, and bought whatever house they pleased in the high end districts paying as much as a million dollars over the asking price. Their successors just whine about how the world owes them a living. How far the once-legendary Valley has fallen.

They ought to try Chattanooga. The home prices are low, and they'd even got high bandwidth fiber to the home to deliver beaucoup HD streams from Netflix, which is one of those Silicon Valley startups I alluded to.


40 people like this
Posted by CM
a resident of Downtown North
on Jun 8, 2016 at 12:28 pm

This city needs to stop most growth. We need to work towards a sustainable community. We are over capacity and the growth in office space in the city combined with massive growth on the Stanford campus and the hospital area are destroying the character of Palo Alto. Looking forward long term we need to plan for a future where we consider that each person here will require many acres of land and resources to support their lifestyle, just cramming in more people doesn't make them use less electricity, eat less, use less water, drive less or stop using city resources, parks, schools, pools etc. It just makes life more miserable when all of our facilities are overcrowded and the worlds resources are overtaxed. We need to have a business registry and a head count of workers so that we can set density limits in some of the downtown office buildings. We need to stop all growth until our roads are driveable - not build more and then try to fix the problem. We should not add more people to the city until we add more park space, pools, meeting rooms etc. It is ridiculous to listen to some of the consultants to the city, who claim you can add more people to the city and it won't "cost" more. They only look at dollars but the cost to the members of the community in overcrowded roads, schools and facilities is staggering. We need more parks, pools and community spaces not more office buildings. It is OK to say the city is full and we don't want to be smothered by any more development. We should set the standard for a sensible style of living and enforce it in Palo Alto. Let's show the state and the world how to limit population and provide a better life to residents.


29 people like this
Posted by ellie
a resident of College Terrace
on Jun 8, 2016 at 12:55 pm

Expanding big businesses is self-defeating. We already have over 3 jobs for each dwelling in Palo Alto. Corporations such as Palantir put employees to work lobbying the City to bust our height, parking and density limits in order to house their workers. Yet these businesses also demand to expand more and more and more. Palantir alone occupies 20 buildings downtown and surely will press for more. This is insanity. Former Mayor Klein reminds us that we have been a jobs center for decades and decades - a good thing that won't change. It is not a matter of reaching the impossible parity between jobs and housing, though we hear that drumbeat all the time. We would need to add over 92,000 dwellings given we now have 46,000. It is a matter of not creating a still greater need for housing while adding more below market rate housing that will remain affordable longterm while fostering small and retail business that truly serve the City and its residents.


12 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Jun 8, 2016 at 1:49 pm

Gale Johnson is a registered user.

To many of you: Thanks for the good stimulating posts! That kicks in the adrenaline of this 79 year old long time resident, enough to cause him to respond! lol

I would first want to hear how effective the traffic mitigation ideas and those implemented so far are working out in SRP. If those companies raising fusses about this could give the city some idea of how bad this could affect them, numbers please, that would be helpful. Let's face it...the kickback is a result of many years of uncontrolled growth, mostly building offices for the tech companies, most of them startups, in downtown PA. Solving the other problems were pushed aside or never addressed, and so here we are.

A lot of posts drifted back to the familiar topic of housing costs and the shortage of it. It's only natural to want to talk about it. Companies have moved here and grown without any thought about their responsibility to mitigate the housing problem, traffic congestion, parking, etc.

And now they're blaming the city for making it harder to do business here, expand, etc.r big Trust me on this...there is no magical solution in this and it's not just in our wonderful Hetch Hetchy water. Those bright innovative people can move to other areas and their brains will still be intact and functioning very well. There is nothing about PA that makes people smarter just by living or working here.

And now to companies...Palo Alto residents (voting citizens) have the right to vote and determine their destiny. Thank god companies don't have a vote, although some of our current and past CC members were business owners, but nothing on the scale of SRP's companies.


9 people like this
Posted by Robert
a resident of another community
on Jun 8, 2016 at 2:13 pm

This is definitely a good first step in making Palo Alto a less attractive place to do business, though hopefully the rules surrounding hiring/headcount apply equally to everyone (not just "tech" employers).


39 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 8, 2016 at 2:21 pm

"Thank god companies don't have a vote, ..."

Actually, they have as many votes as they can buy. Like, recall who paid for all those Berman mailers, then correlate the number of mailers with yesterday's election outcome.


23 people like this
Posted by Ed
a resident of Community Center
on Jun 8, 2016 at 7:18 pm

Uncontrolled growth hasn't worked very well, everyone can see that, except corporate ditto heads who it seems could not care less about quality of life in Palo Alto.


17 people like this
Posted by Mike Alexander
a resident of St. Claire Gardens
on Jun 8, 2016 at 10:33 pm

I'd expect every company in town to argue against any restraints on their growth. To do so, though, without acknowledging the profound impacts of growth on quality of life in Palo Alto lacks grace. If changes to the Comp Plan cause companies to consider locating somewhere else, so be it. Almost anyplace else in the country would welcome them with open arms. Palo Alto will be just fine.


31 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Jun 9, 2016 at 11:08 am

mauricio is a registered user.

Businesses are tripping all over themselves trying to move into Palo Alto. Building more offices will create more employees who will complain there is a huge job to housing imbalance, the they can't afford to live in Palo Alto and demand help. In my naiveté, I though that a fire is extinguished with water, not by adding fuel to it. The solution is for companies to relocate. Other areas need jobs, we have too many and can't provide housing for employees without completely changing the quality off life and lifestyle of Palo Alto. Other areas in the country are desperate for economic development, the companies who insist on staying and moving to Palo Alto should do the patriotic thing and help them out.


4 people like this
Posted by Me
a resident of Old Palo Alto
on Jun 9, 2016 at 11:59 am

[Post removed.]


22 people like this
Posted by Ugh!
a resident of Another Palo Alto neighborhood
on Jun 9, 2016 at 12:07 pm

I can't imagine why so many companies want to pay such a huge portion of their profits on the outrageous rents here. Why not move and lease or build where their workforce can afford to live? Company expenses would be so much lower in terms of rents and wages paid out!

That said, what some Bay Area cities have done is to put the responsibility of building schools and infrastructure on incoming businesses and home builders! Those builders and companies either pay to make improvements, build schools and services, OR go somewhere else more suitable. Growth is controlled, accommodations and improvements are made, and a modicum of stability and quality of life are assured.


8 people like this
Posted by Judith
a resident of Barron Park
on Jun 9, 2016 at 12:47 pm

What an eye opener when Mayor Burt casually mentioned during a recent council meeting that the downtown commercial zoning does not allow office buildings to be occupied by big tech companies like Palantir.

It was cute when Facebook was a start up downtown, but by the time they grew to several hundred employees they moved to the Stanford Research Park (or is it Stanford Office Park now?) until they had so many employees a huge campus was needed and they moved on. If Palantir were to move to Stanford Research Park, or Stanford Industrial Park as it was originally called, think of all the space that could be occupied by small start ups, and the other types of companies that used to be located downtown.


8 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jun 9, 2016 at 3:28 pm

I wish I knew how to respond to all this.

Something about it smacks of 1984. Big Brother is Watching You and don't dare employ one more person or start a business in your garage.


4 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 9, 2016 at 6:16 pm

Curmudgeon is a registered user.

"I can't imagine why so many companies want to pay such a huge portion of their profits on the outrageous rents here. Why not move and lease or build where their workforce can afford to live?"

Ego, pure ego. The corporate suits want a Palo Alto address; employee needs be [bleeped].


14 people like this
Posted by No More Offices
a resident of Barron Park
on Jun 9, 2016 at 11:37 pm

Please NO MORE office spaces. NO MORE tech companies or big businesses in Palo Alto. There should be huge taxes on them (but not small retail businesses) to pay for all the massive infrastructure drain, traffic, congestion, and parking problems they create and leave behind at the end of each work day. There's no reason for Palo Alto to double its population during the workday. Instead of more office buildings, use the limited land available to build some housing since we have 3 jobs for each resident.


Like this comment
Posted by Me
a resident of Old Palo Alto
on Jun 10, 2016 at 10:35 am

Sometimes the pointed truth hurts?


3 people like this
Posted by The opposition
a resident of Evergreen Park
on Jun 10, 2016 at 10:35 pm

One of Machine Zone's much ballyhooed products is a game called
"Game of War - Fire Age." "Fire age the first truly global online game"

Great. Creative minds at work. OK with me if they move away.

Another opponent is Jean McCown who swung through the wide revolving door from the Palo Alto City Council into the Development office at Stanford from which she lobbies the City Council.

As did Judy Kleinberg who is now head of the Chamber of Commerce and now lobbies the City Council for big business.


1 person likes this
Posted by Kazu
a resident of Downtown North
on Jun 13, 2016 at 12:37 am

Remove the building height limits in Downtown, Cal Ave and Stanford Business Park. We need lots more office space, lots more housing, and a large amount of parking. Two or three stories just doesn't cut it anymore.


8 people like this
Posted by Mike
a resident of University South
on Jun 13, 2016 at 8:41 am

Kazu says, "We need lots more office space..."

Assuming this is serious, why?


1 person likes this
Posted by Curmudgeon
a resident of Downtown North
on Jun 13, 2016 at 10:57 am

Curmudgeon is a registered user.

[Post removed.]


1 person likes this
Posted by Kazu
a resident of Downtown North
on Jun 13, 2016 at 12:17 pm

Because Palo Alto,along with the rest of the Bay Area, has an acute shortage of both office space and housing.


5 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jun 13, 2016 at 3:00 pm

I don't think Palo Alto has an acute shortage of either housing or office space.

I do think Palo Alto has a shortage of recreational facilities, affordable shopping, sensible parking options, efficient traffic flow, public transit and common sense.


7 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 13, 2016 at 5:40 pm

Curmudgeon is a registered user.

I remember the Old Days, just over fifteen years ago, when techies quickly made their million$ at the IPO or Microsoft buyout, then bought whatever house they wanted. No whining about what the city that never invited them owes them for tgeir august presence.

As we said in the Old Valley, the first twenty million is the toughest; the rest just rolls in.

So why are our nexgen techies unable to quit whining, man up, show some initiative, and hop onto a startup with some real promise, instead of sweating dead end government contracts in a pseudocompany that will not only never make them rich, but also never pay them a living wage before it spits them out?

Get moving people, or at least pick out your future home on the University Avenue sidewalk.


2 people like this
Posted by Rasied in PA
a resident of Greenmeadow
on Jun 15, 2016 at 11:50 am

I think it's great that only the rich are able to live in Palo Alto. The City is dong a great job curbing development so rents in commercial and residential soar up. Thank you Palo Alto!


Like this comment
Posted by Kazu
a resident of Downtown North
on Jun 16, 2016 at 8:46 am

"Unless you are a billionaire or already own a home, the housing situation is beyond horrible for new people relocating here for a job, especially the rental market."

And that is exactly how the "Residentalists" / NIMBYs want it to remain. New arrivals seem to be very unwelcome as far as they are concerned. How ironic considering that most of them were also once new arrivals. Their solution is to tell subsequent waves of immigrants to go home, or at least go away.

"I don't think Palo Alto has an acute shortage of either housing or office space."

See what I mean? It would be nice if the anti-business / anti-housing faction would leave and the newcomers would stay.


4 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jun 16, 2016 at 10:01 am

Kazu if you are going to quote me then use my context. Jobs and homes can't both be acutely short if you want a balance and what is acutely short in my opinion is the infrastructure to support both.


6 people like this
Posted by Curmudgeon
a resident of Downtown North
on Jun 16, 2016 at 4:13 pm

"And that is exactly how the "Residentalists" / NIMBYs want it to remain. New arrivals seem to be very unwelcome as far as they are concerned. How ironic considering that most of them were also once new arrivals. Their solution is to tell subsequent waves of immigrants to go home, or at least go away."

Well, certainly the recent "entitled" ones with their annoying whining that the world owes them a living. Get your sweet little bippy in gear and buy in like the locals did.


Like this comment
Posted by Kazu
a resident of Downtown North
on Jun 16, 2016 at 4:50 pm

"Well, certainly the recent "entitled" ones with their annoying whining that the world owes them a living. Get your sweet little bippy in gear and buy in like the locals did."

I am a Palo Alto native, and paid off my house many moons ago. Your point?


Like this comment
Posted by Curmudgeon
a resident of Downtown North
on Jun 16, 2016 at 5:29 pm

"I am a Palo Alto native, and paid off my house many moons ago. Your point?"

Well, make up your mind. Meantime I'll accept the point. Thanks.


8 people like this
Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 17, 2016 at 12:18 pm

How can anyone want to build higher and denser when:
- our roads are already choking
- Caltrain is running at capacity already
- our schools are maxed out
- our water supply is limited and we have a multi-year drought
- we don't have the infrastructure (pipes, etc.) to support more people

And another thought - people want to move to Palo Alto for many reasons, of which one would have to be that they love the town as they see it today. Manhattanizing PA will eliminate the town they see today.


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

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