With prospects for housing at the former site of Fry's Electronics fading, Palo Alto leader and Ventura neighborhood residents are preparing to accept a far more modest proposal for the old cannery building on Portage Avenue: an assortment of retail and office uses anchored by a small Target store.
The question of what will happen to the sprawling complex at 340 Portage Ave. has been — and remains — at the heart the city's yearslong debate over Ventura's future and the city's housing strategy. The City Council has for more than decade eyed the Fry's building and the surrounding area as the city's most suitable site for new housing, given that it's zoned for multifamily residential use and is generally deemed to be underdeveloped. The city's Housing Element identifies the property as an opportunity site for housing, with the ability to accommodate 249 units.
Yet for a residentially zoned site, the property remains exceptional. The council granted Fry's Electronics in 1999 a zoning exemption to remain in operation at the old cannery building. While the zoning exemption was initially set to expire in 2009, the council voted in 2006 to make it permanent, a move that was designed to give Fry's some assurances about its future.
Even with Fry's departing from the neighborhood last December, the exemption remains in effect. The city's code states that the 340 Portage Ave. building, as well as adjoining areas at 3200 Park Blvd. and on Olive Avenue, can continue to be used for retail, storage and research and development. Code also requires, however, that these uses are permitted in "approximately the same ratio" of uses existing in October 2006. This restriction means that the retail component of the 90,000-square-foot building cannot exceed 60,000 feet.
Last month, however, the city received a request from the property owner, The Sobrato Organization, that would give the developer more flexibility and dash any hopes for a significant housing project at the Fry's site for the foreseeable future. Sobrato has requested a change in the zoning code that would eliminate the requirement for the site to retain the same ratio of uses as it did in 2006.
The trigger for the request is Target's proposal to set up a 30,000-square-foot store at the Fry's building. Tim Steele, senior vice president for residential development at Sobrato, pitched the idea of bringing a Target to Ventura at a January community meeting, where he cited the company's history of building small stores tailored to the communities and neighborhoods where they are established. He pointed to examples in Berkeley and Cupertino.
"This is a company that's finding ways to blend in with each community differently," Steele said at the January meeting.
The ensuing pandemic and economic shutdown, which has rattled Palo Alto's retail industry, has not deterred Target from pursuing its plans. Steele noted in a July 6 letter to Planning Director Jonathan Lait that Target is "very interested in opening an approximately 30,000-square-foot store at this location."
"This store would be designed by Target to the specific needs of Palo Alto and would reflect Target's desire to craft their brand to the neighborhood," Steele wrote. "However, without more clarity and flexibility from the city of Palo Alto on what is permitted here, the Target store is unlikely to come to fruition as the program we develop for the site will need to account for the full 90,000 square feet of space that is currently vacant."
The city has yet to make any determinations on the Target application. According to a written update City Manager Ed Shikada provided to the City Council earlier this month, the request from Sobrato seeks to remove code language that precludes the expansion of other land uses, including offices, at the former cannery.
Steele noted in his letter that retaining the Fry's building — and its commercial uses — need not preclude the construction of housing elsewhere in the north Ventura area. If the building at 340 Portage Ave. were to be retained for office and retail use, residential buildings can be constructed on the south side of the property, along with a parking structure on the north side, Steele wrote.
"We strongly believe that this zoning code text amendment will achieve multiple City objectives including the preservation of this historic structure while still allowing for a significant amount of future housing," Steele wrote. "This includes the preservation and utilization of at least 30,000 square feet of community serving retail space — something that is significant in the current economic environment."
While Sobrato has resisted building housing at 340 Portage Ave., neighborhood residents Terry Holzemer and Becky Sanders and Parks and Recreation Commissioner Keith Reckdahl are pitching another alternative: having the city buy the site and build hundreds of units of housing. Holzemer and Reckdahl, members of the North Ventura Coordinated Area Plan working group, and Sanders, moderator of the Ventura Neighborhood Association, have proposed preserving the Fry's building but converting it into multifamily housing.
Under their proposal, the city would build about 400 below-market-rate housing units for teachers, seniors and people with disabilities as well as 770 other housing units. This would be accomplished by converting both the Fry's building and a newer office building at 3250 Park Blvd. to housing, as well as constructing several smaller apartment buildings along Park, between Olive and Lambert avenues. The plan also calls for converting the small office building at 3201-3205 Ash St. to a community center.
The city would finance the purchase through 30-year municipal bonds, which will be repaid through tenant rents and by revenues from a business tax that the city is looking to adopt (the council in March halted its effort to place the business tax on the November ballot because of the economic shutdown, but the tax could make an appearance on the 2022 ballot).
In presenting the proposal, the trio cited the city's history of allowing high-tech firms to replace local retail and community-serving officers such as health providers. These tenants, the proposal states, "increase peak-hour traffic, price out local businesses" and force neighborhood residents to go farther to shop, dine and receive professional services.
"We propose to end this trend by converting the zoning along El Camino and other streets in Ventura to allow only housing and true local-serving businesses," the proposal states. "This will benefit residents, open up new housing opportunities, and benefit many local firms priced out of our community."
Unlike Sobrato's proposal, the trio's plan would prohibit offices at the Fry's building.
"With Fry's now gone, we think it's time the site became housing, just as the city's zoning and housing inventory intended," Holzemer, Reckdahl and Sanders wrote in the proposal.
Despite the city's historical yearning for housing at the site, Palo Alto is unlikely to go along with the plan. The City Council passed a budget in June that cuts expenses by $40 million and, as the city's recent abandonment of renovation plans for Cubberley Community Center demonstrates, city staff and council members have little appetite for new infrastructure projects or big-ticket purchases.
Even though the city has traditionally opposed — and banned — big-box stores, numerous Ventura residents said at the July 28 meeting of the working group that they would support having a mix of retail operations at the Fry's building that combines neighborhood-serving offices and a small Target. Kirsten Flynn, a Ventura resident who serves on the working group, said she would support continuing retail use at the site.
She also said that if she were to support the extension of commercial activities, she would like a "good fail-safe" that the space intended for retail doesn't get converted to offices.
While residents continue to cite below-marking-rate housing as a top priority for the North Ventura plan, many have grown hesitant to replace the Fry's building, which was constructed more than 80 years ago by Thomas Foon Chew and which has served as a cannery until 1949. Some, including Holzemer, have advocated for retaining the Fry's building and commemorating it as an important part of local, state and national history.
Others, including Flynn, said they were open to redeveloping some portions of the Fry's building to facilitate housing but preserving most of the old cannery. Both said they would support having a mix of retail, which could include a Target, at the site.
Lakiba Pittman, an Olive Avenue resident and working group member, expressed a similar sentiment. A Target could "add some excitement" to the neighborhood, she said during the July 28 discussion.
"I don't want to put down Fry's in any way, but at least it was a store that people could go to for some things," Pittman said. "I didn't think it would be missed, but it kind of is missed, so I think having a store — not just a little, itty-bitty store, but a small Target — would be good for the area."