Eager to spur more housing production, members of the Palo Alto City Council signaled their support Monday night for one of the most ambitious projects that the city has seen in many years: a mixed-use development that would bring 187 apartments to a site on the edge of Stanford Research Park.
The development proposed by Sand Hill Property Company would occupy a site at 3300 El Camino Real, just south of Hansen Way and The Fish Market. If it wins approval, it would be the first project to advance under the "planned home zone," a designation that the council recently created to provide incentives to residential developments. Modeled after the "planned community" zone of yesteryear, the new zone allows developers to exceed development standards in exchange for negotiated public benefits.
But while the "planned community" zone famously left open the question of what constitutes a "public benefit," the "planned home zone" offers a clear answer: housing. In February, the council authorized staff to use of the zoning tool to encourage more housing and to bring the city closer to the elusive goal of building more than 300 units per year.
The council's Monday discussion was a "pre-screening" hearing that allows members to give early feedback and enables applicants to modify their proposals before submitting a formal application.
Despite recent efforts by the council to encourage housing projects, Planning Director Jonathan Lait underscored on Monday that the city remains well short of its target.
"We're still not there," Lait said, "We're still not meeting the goals of the council in the Comprehensive Plan and we're only barely meeting our above-market-rate housing numbers that we're expecting to make in order to meet the (Senate Bill) 35 standards that we adopted a couple of years ago."
While the council has yet to define the exact parameters of the new zoning district — including the affordable-housing requirements that qualifying projects must meet — members were mostly receptive to Sand Hill's tentative plan.
The proposed development would consist of a two-story office building just south of a five-story residential complex. Twenty percent of the housing units would be offered at below market rate.
Allison Koo, managing director for Sand Hill, said the proposed housing, with its proportion of affordable units, doesn't add any financial value to the project. Earlier this year, the company was considering moving ahead with a more typical Stanford Research Park proposal consisting of office and research-and-development space. That proposal would have been consistent with the zoning code and, as such, would not require a council review.
The company decided to add the housing component after the council agreed in February to create the new "planned home zone."
"We're here tonight because we believe it's the right thing to do," Koo said. "This is the right place for housing to go."
The project, if approved, would be by far the largest housing project that the city has approved in more than a decade. Despite their repeated insistence that housing remains a top city priority, the council has only approved one significant multifamily development in the past two years: a 59-unit affordable-housing project called Wilton Court that is set to break ground later this year. The city also approved in 2018 a 57-unit development on El Camino and Page Mill Road with small apartments geared toward the workforce.
In discussing the Sand Hill proposal, council members found plenty to like in the housing component, though they were far less enthusiastic about the proposal to include 55,153 square feet office space.
"With COVID-19, I'm not really eager to approve more office. … I'm completely game for significant housing at this site. I'm not supportive of additional office space," Vice Mayor Tom DuBois said.
Councilwoman Lydia Kou was critical of the proposal, which she said doesn't include any amenities for the residents in the nearby neighborhoods of Ventura and Barron Park. She also said she has some concerns about partnering with Sand Hill, alluding to the city's ongoing dispute with the developer over the recently redeveloped Edgewood Plaza. The city and Sand Hill have been involved in numerous disputes over the plaza, stemming from the developer's demolition of a historic building that it was required to preserve and disagreements over the fine amount that the city imposed on Sand Hill over a prolonged vacancy in the plaza's grocery store.
She said she would like to see "more thinking for the community, rather than just for the developer."
"I do have concerns with this developer because there are other projects that we have — that we are not operating through in good faith at this time," Kou said. "I'd like to see some conditions imposed on the developer if we do go forward on this."
Others, however, suggested that the Sand Hill project is exactly the type of development that the city was hoping to see when it began soliciting proposals earlier this year.
"This is the first time we have seen something coming to us," Councilwoman Liz Kniss said. "I'm very enthused about the mixed use and think this is the ideal corner to do it."
Even supporters, however, acknowledged that the project could be better. Councilman Eric Filseth said that given the significant zoning concessions, the developer should provide more than 20% of the units at below market rate. Mayor Adrian Fine also acknowledged that the project isn't "perfect," but lauded it for including significant housing.
"Maybe this isn't the perfect project that we want, which is 100% housing, but it's playing catch-up and not making our problems worse," Fine said. "Overall, I'm pleased by this."
Residents who spoke at the meeting or who submitted letters were also largely enthusiastic about Sand Hill's proposal. Palo Alto Forward, a nonprofit that advocates for housing, submitted a letter expressing strong support for the Sand Hill Properties proposal, which it argued would increase housing choices for community members and help the city meet state requirements for new homes at all income levels.
"Meeting our community's housing needs will require more creative planning solutions, including converting underutilized commercial land to mixed-use, inclusive, walkable neighborhoods," the letter states. "If the City of Palo Alto intends to keep housing as a priority in 2020, we must move proposals forward that generate new homes."
Barron Park resident Art Liberman, who lives near the project sites, also noted that the neighborhood needs more homes. He and most of his neighbors support adding residences, he said, though they generally oppose new offices.
"Every day there are campers and RVs parked bumper-to-bumper on El Camino alone the side of the 3300 El Camino Real property," Liberman said. "These people need housing. But we, neighboring residents, think the entire 3300 El Camino Real site should be used for housing. Palo Alto does not need another office building."
Both Fine and Cormack noted, however, that the developer doesn't need the council's permission to build offices, which are already allowed in Stanford Research Park. The question is: should the city also get housing as part of this project.
"I'm grateful to the applicant for bringing this forward," Cormack said. "I think we have a pretty clear choice between an office building and parking, and an office building and housing."