After more than two years of planning for change in the dynamic but underserved Ventura neighborhood, Palo Alto officials struggled on Monday to reconcile the community's vision for the planning area with the wishes of the two biggest property owners.

The Sobrato Organization, which owns the campus on Portage Avenue that until recently housed Fry's Electronics, and Jay Paul Company, owner of the commercial property at 395 Page Mill Road that houses Cloudera, both submitted to the city last week their own proposals for their respective properties, which in both cases include a combination of residential and commercial use.

Sobrato is proposing preserving and rehabilitating a major portion of historic cannery building at 340 Portage Ave. that formerly housed Fry's Electronics and retaining commercial use in the building, which occupies the largest parcel in the 60-acre area that is the focus of the city's North Ventura Coordinated Area Plan. Sobrato is also advancing a plan to build 91 townhouses at 200 Portage Ave., next to the Fry's site.

Tim Steele, Sobrato's senior vice president for real estate, emphasized Monday that its plan shares some characteristics with the proposals that had been developed over the past two years by city staff, consultants and a working group of neighborhood residents and other stakeholders. This includes housing, a path along Matadero Creek and no new office space beyond what's already there.

"Sobrato, much like the city, takes a long-term view in our real estate ownership and investment," Steele told the council. "We also share the desire for projects to be of high quality and successful in their execution and long-term viability."

Jay Paul's proposal, which the city received last week, aims even higher when it comes to office space. The developer has proposed building an eight-story office development with 200,000 square feet of office space at 395 Page Mill, as well as two residential buildings with a total of 508 residences between them. All three buildings would occupy a block bounded by Page Mill Road, Olive Avenue, Park Boulevard and Ash Street, which they would share with a small neighborhood park.

The proposal for office space is based on Jay Paul's calculations of how much it would cost to build 508 housing units, create a park and shift 95% of the site's parking underground, said Maia Harris, director of special projects at Jay Paul. Architect Tom Gilman, representing Jay Paul, told the council on Monday that under the company's proposed concept, 60% of the site at 395 Page Mill Road would consist of open space — compared to 25% today.

"We believe this plan really embodies a lot of the features and can achieve a number of the elements that the vision of the NVCAP seems to have," Gilman said.

But while council members lauded some elements of the Sobrato plan — namely, the proposed improvements to the preserved cannery building — they roundly rejected Jay Paul's concept.

The biggest dispute is over office space. When the council embarked on the Ventura planning process in 2018, it adopted a list of project goals that included elements such as housing, a connected street grid and new pedestrian, bicycle and transit amenities. It conspicuously did not mention office growth, a trend that the city has been actively trying to discourage over the past decade through creation of an annual office cap and a reduction in the citywide limit on nonresidential development. Citing the original goals of the planning exercise, Vice Mayor Pat Burt called Jay Paul's proposal for an office tower and residential complex "nonstarters."

"They don't get to first base in my mind," Burt said. "It's completely out of the ballpark and, really, I'm kind of mystified why the owners of that property would come forward with something like that after hopefully paying attention to our city's zoning rules and this process throughout."

Mayor Tom DuBois concurred and suggested that the idea of adding a significant office component to the planning area is "way off from what the community really wants." DuBois championed a more cautious approach on redeveloping Ventura and advocated for the least intense of the three redevelopment alternatives that staff and consultants presented to the council. Known as Alternative 1, the alternative calls for gradually phasing out office use and creating about 500 new housing units. The other two options would add a "realistic capacity" of 1,170 and 1,490 housing units, respectively. The most ambitious of the three, known as Alternative 3B, also acknowledges the challenging economics of constructing affordable housing and, as an incentive to property owners, includes 126,000 square feet of new office space.

With DuBois leading the way, the council identified Alternative 1 as its preferred option and directed staff to explore other zoning incentives — most notably a reduction in parking requirements — to encourage new retail. The direction, which advanced by a 6-1 vote, also calls for amortization of some office uses and maintaining a 50-foot height limit for new developments, with the sole exception of affordable housing projects, which would be subject to various bonuses and exemptions. The council also favored "adaptive reuse" — rather than demolition — of the Fry's building, which was constructed by Thomas Foon Chew in the 1920s and which served as a cannery until 1949.

In choosing the most modest path, the council rejected arguments from housing advocates and some residents who supported Alternative 3B, which according to an analysis from staff and consultants is the only option on the table that actually has a chance of coming to fruition. But while economically feasible, the option is also relatively unpopular among members of the North Ventura Coordinated Area Plan Working Group. Gail Price, board president at Palo Alto Forward and former council member, was the only working group member who supported Alternative 3B.

Having an aspirational vision without funding sources will not result in construction of new homes, she told the council Monday.

"It is time to be more proactive to meet our new and changing needs," Price said.

Council member Alison Cormack, the lone dissenter in the council vote, similarly suggested that the alternative favored by the council majority falls well off the mark and does not provide the wide range of housing options that the community needs.

"My fear is we're going to spend a lot more money and a fair amount more time and we're going to have a plan that isn't going to get implemented," Cormack said. "And it's going to leave a bad taste in the community's mouth."

Most members of the working group, including those who live in Ventura, roundly rejected the office-heavy proposals submitted by Sobrato and Jay Paul. Kirsten Flynn, who served on the working group, argued that the two proposals, if implemented, would make it nearly impossible to naturalize the creek or add any other neighborhood amenities. She called the planning process a "once in a lifetime effort" and urged the council to include parks in its plans for Ventura.

"Developers are in the business of making money, so they want office space because in the past it's been terribly profitable," Flynn said. "Citizens have the role of asking for amenities — that's our job — that improve the quality of life.

"We want parks, we want access to nature, schools, housing for our community."

The council's vote on Monday creates a path forward for a planning process that has been stuck in limbo since the three alternatives were released more than a year ago. Where the path leads, however, remains uncertain. Council member Greg Tanaka, who supported the council majority's directions on adding housing, voted against the elements of the motion that pertained to limiting office use. He also suggested that a plan that seeks to eliminate office space and that, as such, is opposed by the two largest property owners in the area, is unlikely to succeed.

"Inherently, what we're trying to do is we're trying to merge the desire of the community with the desire of the property owner," Tanaka said. "If we're doing one and not the other, or vice versa, nothing is really going to happen. We're all going to have to work together somehow."