When Angela Dellaporta learned about Palo Alto's effort to come up with a new vision for her neighborhood, Ventura, she happily signed up to help.
"I wanted to see something beautiful in our community," Dellaporta, a retired Gunn High School teacher, told the Weekly. "I wanted to see us come together rather than become isolated. I wanted to see a place where people can be attracted to a beautiful area and get a strong sense of community that people in general crave."
In April 2018, Dellaporta was one of 14 residents chosen to serve on a working group charged with crafting a new vision for her centrally located but generally underserved neighborhood just south of California Avenue. At a March 2019 meeting with the City Council, which took place at the Ventura Community Center, she was one of about 100 residents who attended to learn about the process and offer feedback. Dellaporta pointed to a recent survey of the neighborhood showing that most people support adding housing, particularly for teachers, nurses and middle-income families.
"They also want to see some of this housing go to low-income families. They want to see a reduction in car traffic, and they want to see a lot of green space — accessible and welcoming to the public," Dellaporta told the council.
Council members were similarly full of hope as they entertained ideas from residents. They also encouraged the consultants and the working group to really explore the possibilities, even if it meant considering options that would not be politically popular.
"I want one of those alternatives to be a real challenge to all of our thinking," Councilwoman Alison Cormack said at the meeting.
If the council was trying to inspire staff to stretch the possibilities, it seems to have succeeded beyond its wildest dreams. On Jan. 21, the North Ventura Concept Area Plan working group received a new proposal from staff and its consulting firm, Perkins & Will: three alternatives that made their collective jaws drop.
The plans, which will be refined in the coming months and which are scheduled to go to the council in May, show alternatives for the 60-acre site that would turbo-charge development. The plans, as expected, call for more housing. But what caught most members of the group off-guard was the type of residential development being proposed.
The numbers in the new alternatives exceed by orders of magnitude what the council has been previously considering for the site. The city's Housing Element identifies the former location of Fry's Electronics at 340 Portage Ave. as a site capable of accommodating up to 249 new units. For the broader North Ventura area, the number of new units is 354. (This is in addition to the 128 homes that currently exist.)
By contrast, the least intense alternative of the ones presented by Perkins & Will calls for 952 new apartments and townhomes, while the most ambitious one would add 2,646 housing units to the area, which is bounded by Page Mill Road, Lambert Avenue, El Camino Real and Park Boulevard.
Like most of her colleagues, Dellaporta said she was surprised by the numbers.
"Most people are worried about higher density and more people, and I have reassured them, 'Don't worry. We probably won't go much above 30 units per acre because that's what the zoning is (RM-30).' It's not quite clear to me why we would go so far above the 30 units per acre and make it so much more dense," Dellaporta said at the Jan. 21 meeting, after hearing the Perkins & Will presentation.
Becky Sanders, moderator of the Ventura Neighborhood Association, said she was in "shock and awe" when she saw the new alternatives, with one scenario recommending more than 2,600 housing units — an intensity beyond what any of the city's zoning designations allow.
Doria Summa, a member of the city's Planning and Transportation Commission who also serves on the working group, said she too was shocked by the new proposal. The most ambitious alternative, known as "Designed Diversity" calls for building homes for 6,300 new residents.
That, Summa noted, amounts to squeezing about 10% of the city's population into an area that makes up just 0.5% of the city.
"It so far exceeds (the Housing Element numbers) and it's so far from anything we've talked about — I don't think any of these bear any resemblance to reality," Summa said.
Former City Councilwoman Gail Price was the only member of the working group who spoke in favor of "Designed Diversity," which would add new office buildings and retail in addition to housing.
Unlike the other two alternatives, which seek to preserve (either partially or fully) the old cannery that until recently housed Fry's Electronics, "Designed Diversity" envisions tearing down the Fry's building, adding 567 new housing units at 340 Portage Ave., and creating new multifamily developments throughout the planning area, including 628 units at the site of the Cloudera office building, at the intersection of Park Boulevard and Page Mill Road.
While planning for the site, Price said, it's important to consider what Palo Alto's needs would be for the next 10, 15 and 20 years.
"Our children and grandchildren are moving away. Seniors are moving if they can't afford a place here. That's a real driver for me. This particular area in my view presents opportunities that are significant, and I think that can be done very beautifully and with some sensitivity," she said.
A moving target
The release of the three alternatives is the latest milestone for a planning effort that has already run into numerous obstacles.
The Fry's building, the centerpiece of the planning area, was last year deemed a "historical site" owing to its roots as a cannery. The designation makes it eligible for listing in the California Register of Historical Resources and guarantees that any potential redevelopment would require extensive analysis — and ensure political pushback.
Then the Fry's property owner, The Sobrato Organization, indicated that it does not plan to demolish the building or to build housing on the site any time soon — a serious blow to the city's goals of building more than 220 units there.
And the City Council's commitment to the area plan's success has wavered, with three council members voting in December against expanding the consultant's contract (even though four of the seven council members supported the contract, passing the budget amendment required five votes, so the money was not authorized).
"If the property owner isn't on board, what are we doing here?" Councilman Greg Tanaka said at the Dec. 2 meeting. "That's a big problem."
Yet even if the council does nothing, change is on its way for 340 Portage, a campus of connected commercial buildings that has long stood out as one of the city's most glaring zoning wildcards.
Even though the site is zoned RM-30, which means it allows up to 30 residential units per acre, the land has been used for industrial and commercial purposes ever since 1918, when Thomas Foon Chew first constructed a cannery there. Eager for tax revenues, the council formally agreed in 1999 to allow Fry's Electronics to continue its "nonconforming" commercial use at the residentially zoned site for 20 more years.
But in 2006, the council voted to eliminate the 20-year amortization provision, which would have required the Fry's site to revert to residential use in July 2019. At the time, planning staff had determined that the proposed revision to the zoning code would be "minimal in scope but would provide a positive and welcoming message to Fry's from the city," according to a 2006 report from planning staff.
Efforts to maintain Fry's are "most important," the report noted, given that it was one of the city's top 10 sales tax generators.
This "minimal" change has had profound effects. By eliminating the amortization date to please Fry's, which closed this past December, the council effectively stripped away its leverage to demand residential uses for the city's most promising housing site. Mindful of this possibility, members of the Planning and Transportation Commission in 2006 opted not to vote on the proposed elimination of the amortization clause. Weeks before the council was set to consider the change, then-Planning Commissioner Lee Lippert called it "a very hasty decision." Fry's Electronics, he presciently noted, will eventually leave.
"There are no guarantees as to what that retail would be," Lippert said at the Oct. 4, 2006, meeting. "That retail could very well wind up ... being a supermarket or for that matter it could be a Walmart. ... Can you live with that? So that's what it boils down to: What are the rights here of the property owner and what is the best use for the citizens of Palo Alto — not the fact that there is fiscalization of land use here?"
Thirteen years later, his anxieties are playing out. Housing at the site is now an unlikely possibility given Sobrato Organization's lack of interest in redeveloping the building or converting it to residential use. Residents and council members have proposed "adaptive" commercial uses that would preserve the most important sections of the historic cannery and transform it into an eclectic gathering spot filled with art, music and food. But the new building occupant is more likely to resemble the type of tenant Lippert had warned about than a community hub like "The Barlow" in Sebastopol (a former applesauce cannery that is now an outdoor market) or Drake's Dealership in Oakland (a former auto dealership that is now a beer garden).
Earlier this month, Tim Steele, Sobrato's senior vice president for real estate development, informed the Ventura working group about a prospective tenant who has been itching to set up shop in Ventura: Target.
The store, he said, would be small in scale (about 30,000 square feet) and would cater to the particular needs of the area, he said.
"I know some people will bristle at the word, but we've done a lot of research and we looked very closely, and in the context of the location, we were surprised that any retail would be interested in going into a mid-block type of space," Steele said at the Jan. 21 meeting.
Steele said Sobrato had turned Target away a few months ago, but the company persisted.
"They came back and essentially parked on our front door and said, 'We're not leaving because we think we have a product that we think will work," Steele said.
He pointed to examples of smaller Target stores throughout the nation, including in Cupertino, Berkeley and Boston. In some cases, the stores are only 12,000 square feet. And to blend in with neighborhoods, particularly in historically significant areas, the stores have minimal exterior signage.
"This is a company that's finding ways to blend in with each community differently," Steele said.
Looking at the economics
Housing advocates in a city that is famously opposed to chains and big-box stores are unlikely to welcome a Target — even a baby Target — with open arms. But it's not hard to see why Sobrato is so reluctant to convert the site to housing.
The economics of Silicon Valley continue to strongly favor commercial development over residential, even before one considers Palo Alto's height limits, density restrictions and parking requirements.
A new analysis by the firm Strategic Economics determined the cost of developing a market-rate apartment in a four-story building to be about $770,270. This includes $429,000 in construction costs; $128,000 in "soft costs" (including city fees and financing); and $95,071 in land costs. The figure also includes $117,499 in estimated profits for the developer, which represents a rate of return of about 15%, said Sujata Srivastava, principal at Strategic Economics.
The figure also assumes that the residential developments are rented primarily at market rate rather than at the below-market rate that Ventura residents said they would like to see for their neighborhood, even though the city's "inclusionary housing" law will require 15% of the new units to be offered at below market rate.
"Construction costs for these kinds of projects are high enough that there's not a huge gap between what you can charge for market rate units and how much is left over in terms of revenues for you to then be able to subsidize a lot of units," Srivastava told the working group.
The report from Strategic Economics concluded that when one considers the city's fees and below-market-rate requirements, a developer spends about $988 per square foot of an apartment and receives $928 in value (which represents a net value of -$59). For office construction, a developer spends about $1,097 per square foot and gets a net value of $127.
Sobrato also has personal experiences to fall back on. In October 2017, the council approved the company's proposal to build a 50-apartment development at 3001 El Camino Real, a site just west of the Fry's site that used to be occupied by Mike's Bikes. It took three and a half years to get the project approved, costing the company about $4 million, Steele said at the Jan. 21 meeting of the working group.
Last year, the company notified the city that the development is not penciling out and requested an extension on the project. Sobrato has also shifted its sights away from the rental sector, Steele said.
"I will suggest that the rental market is not supportive economically, but possibly ownership" housing would be, Steele said. "We're exploring maybe partnering with a for-sale builder to build it, since Sobrato does not build for-sale housing of any kind."
The new alternatives from Perkins & Will try to reflect the city's stark economic reality: Housing has become so expensive to build that in order to encourage it, the city will have to either completely blow up the zoning code, provide massive financial subsidies or allow some office development as an incentive for the builder to construct homes.
Long-held zoning standards such as parking requirements and the 50-foot height limits would have to be amended or scrapped for the ambitious proposals to come to fruition. The most pro-housing scenario calls for "mid-rise blocks" with 85-foot-tall apartment buildings and underground garages with one parking space per unit.
Not surprisingly, the dramatic proposals have attracted dramatic — and divergent — reactions.
Former Mayor Karen Holman, who chaired the working group that put together the South of Forest Avenue 2 (SOFA 2) area plan in downtown, said she has grave concerns about the Ventura process, which she argued has strayed far from the council's goals for the project. These goals include developing "human-scale urban design strategy, and design guidelines that strengthen and support the neighborhood fabric."
Rather than considering how growth can accommodate existing residents and businesses, including the historic cannery building, the new plans view this eclectic area as effectively a blank slate, she argued.
"They're treating it like it's a brownfield or something of that nature — which it's not," Holman told the Weekly. "There's no regard for existing developments and how people would live in this area — no weaving of how that works together to create a livable area. There's not a cohesive aspect to it that creates livability."
These flaws, Holman told the working group on Jan. 21, will likely doom the planning process once it gets to the council.
"What's going to happen when the plan that's being encouraged by staff and consultants gets to the council ... and the council looks at goals that they established and looks at this and says, 'What happened?' ... I just don't see how this will be a productive process if this continues along the path of super, super density."
Others, however, see the proposed influx of housing as exactly what the city needs at a time of sky-high rents and barely existent housing construction. A new report from the Department of Planning and Development Services notes that the median sales price for all homes in Palo Alto increased from $2.24 million in November 2017 to $2.72 million in November 2019. Rental listings over the same time rose from $3,500 per month for a two-bedroom apartment to $4,280 a month.
Mark Mollineaux, a renter and local housing advocate, said the proposal from Perkins & Will is an indication of a larger problem: "absurdly low density" throughout most of Palo Alto, which has resulted in exorbitantly expensive rents. He said he strongly supports increasing density in Ventura, in line with the consultants' recommendations.
Kelsey Banes, also a renter in Palo Alto, said she's moved every year because of rising rents. Most recently, her rent went up by 18%, she said.
"When you hear on a daily basis stories about people getting priced out of their homes and pushed into more and more desperate situations, the urgency of this crisis we're in becomes very, very salient," Banes said. "If you say to someone, 'I want this neighborhood to change in dramatic fashion, that will cause anxiety. ... You can empathize with that anxiety and then bring it back to our values as a community and why this is important. We want to have an inclusive community. We want to have different ages of people being a part of our community and serving our the community."
Planning Director Jonathan Lait said he's heard a variety of opinions about the newly released scenarios, which he said aim to reflect the council's desire to "go big." In proposing scenarios with many new housing units — well beyond the number in the Housing Element — city planners are trying to prepare for the next cycle of the Regional Housing Allocation Needs (RHNA) process, which sets housing targets for every city. Lait said he expects the process to result in significant new allocations for Palo Alto.
"As we look ahead, we wanted to imagine one scenario — what might be an outlier scenario — if the RHNA numbers doubled," Lait said. "What would that look like here, in this area?"
He also said that the goal was to present options that would get a reaction from folks and then narrow down options to what the community deems to be an "acceptable range." He rejected the notion that the scenarios are "unrealistic."
"We'll hear from council, and the working group members and the community. And if we need to pull back and focus on something closer to the lower alternatives, we're happy to do that," Lait said.
The debate will unfold in the coming months, as the city holds community meetings and the working group continues its review of the new alternatives, which would then go to the council.
But even though the broader community has yet to weigh in, the reaction in Ventura has been less than enthusiastic. Dellaporta said that while she and her neighbors fully support the goal of adding housing, they were hoping to see plans with housing numbers more in line with the existing Housing Element. Many are concerned that the housing scenarios proposed by Perkins & Will would worsen traffic and not produce the housing that would accommodate moderate and low-income people.
"We want to make sure that teachers and nurses and firefighters and other people who provide services to our community can actually live in our community," she told the Weekly.
How much housing?
Plans proposed in December by city consultants Perkins & Will for the North Ventura area of Palo Alto recommend hundreds if not thousands of new townhomes and apartments.
Currently, the neighborhood bounded by Page Mill Road, Lambert Avenue, Park Boulevard and El Camino Real includes 128 housing units.
Three basic types of housing developments have been outlined in the plans: townhomes (three stories), low-rise (four or five stories) and mid-rise (eight or more stories). Heights of mid-rise buildings typically reach 85 feet or more.
Here's a breakdown of the housing proposed in each plan as well as examples of Palo Alto buildings that are considered low-rise and mid-rise.
• Leading with Legacy (version A) - New housing: 952 units.
• Leading with Legacy (version B) - New housing: 1,581 units.
• Adaptive Core - New housing: 1,674 units.
• Designed Diversity - New housing: 2,646 units.
• Mid-rise example - Tan Plaza Continental, 580 Arastradero Road.
• Low-rise example: 800 High St.
View maps of each plan and photos of the mid-rise and low-rise examples here.