In a bid to boost two popular community projects, Palo Alto officials agreed on Tuesday night to sell off a highly valued asset: the right to develop.
The City Council voted 7-2, with Vice Mayor Eric Filseth and Councilwoman Lydia Kou dissenting, to authorize raising more than $3 million through its "transfer of development rights" (TDR) program to help fund the pending reconstruction of the historic Avenidas building at 450 Bryant St. The program uses density bonuses as way to pay for seismic upgrades and rehabilitations of historic buildings.
In addition to pledging $5 million in TDR cash and impact fees for the $19-million renovation of Avenidas, the council also agreed Tuesday to raise its stake in the soon-to-commence expansion of the Junior Museum and Zoo. The nonprofit Friends of the Junior Museum and Zoo had raised $25 million for the zoo revamp, with $15 million coming from Dick Peery.
The City Council had previously pledged $3.9 million for the project, which is set to begin this summer. On Tuesday night, the council voted 8-1, with Kou dissenting, to add another $1 million so as to restore some of the features that had been recently cut from the project to save money, including an outdoor "loose in the zoo" area that allows children to mingle with birds and other species; and a "treehouse."
The two features, which Peery favored, will cost about $2 million, a sum that will be split between the Friends group and the city.
The council's decision to commit more funds to the two projects came at a time when officials are struggling to keep up with the escalating costs of infrastructure projects. The council's list of infrastructure priorities, which includes (among other projects) a new police building, two new garages and a bike bridge over U.S. Highway 101, has a funding gap of more than $70 million. This sum does not include the city's pledge to the Junior Museum and Zoo construction or the $5 million that the council had promised to Avenidas.
The sale of TDRs should help. Staff expects to sell the development rights at a rate no lower than $275 per square foot, which should fetch about $3.12 million (if they sell at $350 per square foot, the sale would raise $4 million). These proceeds, coupled with the $3.5 million in the city's Community Center Impact Fee Fund, will be earmarked toward supporting the two projects.
Mayor Liz Kniss strongly supported moving ahead with both projects and lauded Peery for his $15-million donation, which she called "groundbreaking." She also lauded the Avenidas project and noted that the existing Birge Clark building has "outgrown its capacity" at a time when the city's senior population is on the rise.
"We're functioning at both ends of the spectrum -- covering the seniors and covering the school kids at the same time," Kniss said.
Most of her colleagues agreed. Councilman Cory Wolbach said it's important for the city to take care of an important community assets like Avenidas, the city's prime provider of senior services. And Councilman Greg Scharff, who made the motion to sell the development rights, fully backed the funding plan proposed by staff.
"It's interesting that it's coming together simultaneously because if we only got one of those done -- it really would have been a huge accomplishment," Scharff said. "To get both done is really a testament to what Palo Alto spirit is like and I think it's something we should be really proud of."
Not everyone shared his joy. Councilwoman Karen Holman and Councilman Tom DuBois each hesitated to approve funding allocations for the two projects without having more information about the city's larger infrastructure picture. Holman said the council is "not being well served" when it is asked to consider projects without the greater context.
Both of them, however, ultimately voted for the projects.
Kou, meanwhile, voted against the TDR sale after voicing objections about the design of the new Avenidas building, which once housed the city's police station. Kou said the approved design is at odds with the original building.
"It desecrates the historical aspect of this building," Kou said.
The city's program allows the sale of TDRs equal to 50 percent of the floor area of building being developed. In the case of Avenidas, which has a floor area of 18,375 square feet, the city could sell 9,188 square feet of development rights.
The council also approved on Tuesday the sale of 2,500 square feet from the 2010 renovation of the College Terrace Library on Wellesley Street.
While the sale of development rights for 11,688 square feet is expected to help fill the gap, not everyone favored this approach. Filseth and Kou both objected to the very concept of selling development rights to pay for community facilities, a process that Filseth described as "using zoning exceptions as currency."
"If you want to buy something, you've got to find a way to pay for it with actual money," Filseth said.