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City Council faces pushback over Sobrato deal for former Fry's site

Critics demand more affordable housing, retail in key area of Ventura neighborhood

A conceptual rendering for the former Fry's building at 340 Portage Ave. in Palo Alto shows a small cafe area in what would otherwise be a research-and-development building. Courtesy city of Palo Alto.

When Palo Alto City Council members struck a deal with The Sobrato Organization in June to transform the former site of Fry's Electronics, they framed it as a win-win situation that creates opportunities for park space and affordable housing in the heart of Ventura.

But Terry Holzemer and other residents who have spent more than a year trying to develop a new vision for that portion of the neighborhood argued Monday that the proposed agreement falls well short of their vision and expectations. In their first opportunity to publicly comment on the plan since its June 21 announcement, he and others expressed disappointment with various components of the deal, which allows Sobrato to demolish a third of the historic cannery building at 340 Portage Ave., retain research-and-development uses in the preserved portion of the building and construct 70 townhomes.

For Holzemer, one of the biggest flaws with the agreement is the planned removal of a portion of the old cannery building, which was built more than a century ago by Thomas Foon Chew, a Chinese entrepreneur who created what was then the third largest cannery of fruits and vegetables in the country. The city's historic consultant, Page & Turnbull, described the former building in its report as "a rare surviving example of Palo Alto's and Santa Clara County's agricultural past."

"This is not just another old industrial building that stands in the way of progress," Holzemer said. "This site and this building are very likely the last segments of a history that is very significant not only to us in the Bay Area but to California history."

He likened the prospect of demolishing the former cannery to removing a section of the HP garage or Hearst Castle.

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Others took issue with the council's plan for affordable housing, a key priority identified by the North Ventura Coordinated Area Plan Working Group, a panel of stakeholders that included property owners, neighborhood residents and other community members who worked on creating a concept plan for a 60-acre area bounded by El Camino Real, Lambert Avenue, Page Mill Road and the Caltrain tracks. Under the proposed deal, Sobrato would construct 74 townhome developments. Rather than dedicate 15% to below-market-rate housing, as developers would typically be required to do, it would donate an acre of land to the city for a future affordable housing development.

Several council members argued that this represents a victory for the city, which could now potentially build more dwellings and offer them at a deeper level of affordability than Sobrato would through the inclusionary housing program, which would have required about 14 townhouses at "affordable" rates. Council member Alison Cormack pointed to the new 59-apartment development on El Camino Real known as Wilton Court, which was constructed on a half-acre site. A similar project on the donated land near the cannery building could potentially net 120 units, she suggested.

"There's a pretty big difference between 14 and 120," Cormack said.

A breakdown of the framework to redevelop the former Fry's Electronic site under a tentative agreement reached by the city of Palo Alto and The Sobrato Organization in June 2022. Map by Jamey Padojino.

And whereas the city's inclusionary zoning program allows developers to offer affordable units at 100% or 120% of area median income, the city's future project could target a lower income level, something in the range of 60% to 80% of AMI, she said.

Not everyone was swayed. Bob Moss argued that the best way to get affordable housing is to force the developer to actually build it. In this case, Sobrato is providing land and $5 million in fees for affordable housing and park improvements.

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"If you build it, you got it. If you take the money, it just sits. Bad idea," Moss said.

Council member Tom DuBois, who along with Vice Mayor Lydia Kou negotiated the deal with Sobrato over six months of morning meetings, said he and Kou "struggled mightily" with the question of generating affordable housing in Ventura but ultimately agreed that the land dedication is the best way to go.

He acknowledged the policy disagreement and said the concept "would provide an opportunity for potentially substantially more affordable housing units at a more deeply affordable level of 60% to 80% AMI if the city were able to partner with a nonprofit or other low-income housing provider at that 1-acre portion that's been identified in that area."

"No compromise is going to be perfect," DuBois said. "I think council member Kou and I both wanted to ensure this would be a livable neighborhood and that key historic pieces of the building would be preserved and recognized."

The concept also calls for Sobrato donating 2.25 acres land for park space near Matadero Creek, which is currently a concrete channel cut which the city hopes to open up and naturalize. Mayor Pat Burt argued that these future improvements would create a "really desirable" location for an affordable housing development.

"This is one of the few opportunities we've actually had for a development agreement where we can negotiate terms that are even greater than what we'd be able to have through our standard zoning," Burt said. "I believe that's exactly what's happening here."

For Sobrato, the deal would deliver some certainty that the former cannery building and other structures at the site can continue to function as research-and-development companies. For years, council members have discussed the possibility of amortizing the commercial uses at the site and replacing them with housing. The area is zoned for medium-density housing and Palo Alto had listed the site in its Housing Element as one that could accommodate up to 249 dwellings.

A man walks in front of the historic cannery at 340 Portage Ave., Palo Alto, more recently known as the site of Fry's Electronics. Photo taken Aug. 2, 2022, by Jocelyn Dong.

But city leaders have been loath to make that switch out of concern that Fry's Electronics would depart, a fear that became realized in late 2019. The store's shuttering prompted renewed calls for land use changes at the site, including the prospect of requiring Sobrato to find new retailers to achieve the same type of uses that had been in effect before Fry's closed down.

The proposed deal, which will be vetted in the coming months by the Historic Resources Board, the Architectural Review Board and the Planning and Transportation Commission, effectively halts all talk of amortization and allows the cannery to operate primarily as a research-and-development building. The cannery would, however, be renovated and it would include 2,600 square feet of retail space that would allow visitors to view the building's historic elements and an exhibit recognizing its significance.

Rebecca Sanders, moderator of the Ventura Neighborhood Association, said she was disappointed with the decision and suggested that amortization of commercial uses should remain on the table. Resident Jeff Levinsky urged the council to publicly release the financial studies it had used to develop the concept with Sobrato and other alternatives that had been evaluated as part of the negotiations.

More information is expected to be released in the coming months, as the proposed development plan goes through the environmental review process. Karen Holman, a former mayor who currently serves on the Midpeninsula Regional Open Space District board of directors, urged the council to clearly define the review process for the development and the financial benefits that both sides will receive as part of the deal.

"No one is going to get everything they want but it's essential that good analysis and process be followed that allows the public to evaluate this or any proposal," Holman said.

She also suggested that the council recognize the historic significance of the cannery by renaming Portage Avenue to Thomas Foon Chew Cannery Way.

Julie Lythcott-Haims, who is running for a council seat, highlighted another area in which Ventura is historically significant: its status as one of few neighborhoods where Black and Asian residents could live back when Palo Alto engaged in "redlining" and when many parts of the city had restrictive covenant that prevented racial minorities from moving in.

"As the nation reckons with understanding and atoning for systemic discrimination against Black, Asian, Latinos and other racial minorities, when this project comes to fruition I hope it includes a recognition and celebration not just of the historic cannery but of the fact that this is where Black and Asian people have historically made their home in Palo Alto," Lythcott-Haims said.

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Gennady Sheyner covers the City Hall beat in Palo Alto as well as regional politics, with a special focus on housing and transportation. Before joining the Palo Alto Weekly/PaloAltoOnline.com in 2008, he covered breaking news and local politics for the Waterbury Republican-American, a daily newspaper in Connecticut. Read more >>

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City Council faces pushback over Sobrato deal for former Fry's site

Critics demand more affordable housing, retail in key area of Ventura neighborhood

by / Palo Alto Weekly

Uploaded: Tue, Aug 2, 2022, 9:44 am

When Palo Alto City Council members struck a deal with The Sobrato Organization in June to transform the former site of Fry's Electronics, they framed it as a win-win situation that creates opportunities for park space and affordable housing in the heart of Ventura.

But Terry Holzemer and other residents who have spent more than a year trying to develop a new vision for that portion of the neighborhood argued Monday that the proposed agreement falls well short of their vision and expectations. In their first opportunity to publicly comment on the plan since its June 21 announcement, he and others expressed disappointment with various components of the deal, which allows Sobrato to demolish a third of the historic cannery building at 340 Portage Ave., retain research-and-development uses in the preserved portion of the building and construct 70 townhomes.

For Holzemer, one of the biggest flaws with the agreement is the planned removal of a portion of the old cannery building, which was built more than a century ago by Thomas Foon Chew, a Chinese entrepreneur who created what was then the third largest cannery of fruits and vegetables in the country. The city's historic consultant, Page & Turnbull, described the former building in its report as "a rare surviving example of Palo Alto's and Santa Clara County's agricultural past."

"This is not just another old industrial building that stands in the way of progress," Holzemer said. "This site and this building are very likely the last segments of a history that is very significant not only to us in the Bay Area but to California history."

He likened the prospect of demolishing the former cannery to removing a section of the HP garage or Hearst Castle.

Others took issue with the council's plan for affordable housing, a key priority identified by the North Ventura Coordinated Area Plan Working Group, a panel of stakeholders that included property owners, neighborhood residents and other community members who worked on creating a concept plan for a 60-acre area bounded by El Camino Real, Lambert Avenue, Page Mill Road and the Caltrain tracks. Under the proposed deal, Sobrato would construct 74 townhome developments. Rather than dedicate 15% to below-market-rate housing, as developers would typically be required to do, it would donate an acre of land to the city for a future affordable housing development.

Several council members argued that this represents a victory for the city, which could now potentially build more dwellings and offer them at a deeper level of affordability than Sobrato would through the inclusionary housing program, which would have required about 14 townhouses at "affordable" rates. Council member Alison Cormack pointed to the new 59-apartment development on El Camino Real known as Wilton Court, which was constructed on a half-acre site. A similar project on the donated land near the cannery building could potentially net 120 units, she suggested.

"There's a pretty big difference between 14 and 120," Cormack said.

And whereas the city's inclusionary zoning program allows developers to offer affordable units at 100% or 120% of area median income, the city's future project could target a lower income level, something in the range of 60% to 80% of AMI, she said.

Not everyone was swayed. Bob Moss argued that the best way to get affordable housing is to force the developer to actually build it. In this case, Sobrato is providing land and $5 million in fees for affordable housing and park improvements.

"If you build it, you got it. If you take the money, it just sits. Bad idea," Moss said.

Council member Tom DuBois, who along with Vice Mayor Lydia Kou negotiated the deal with Sobrato over six months of morning meetings, said he and Kou "struggled mightily" with the question of generating affordable housing in Ventura but ultimately agreed that the land dedication is the best way to go.

He acknowledged the policy disagreement and said the concept "would provide an opportunity for potentially substantially more affordable housing units at a more deeply affordable level of 60% to 80% AMI if the city were able to partner with a nonprofit or other low-income housing provider at that 1-acre portion that's been identified in that area."

"No compromise is going to be perfect," DuBois said. "I think council member Kou and I both wanted to ensure this would be a livable neighborhood and that key historic pieces of the building would be preserved and recognized."

The concept also calls for Sobrato donating 2.25 acres land for park space near Matadero Creek, which is currently a concrete channel cut which the city hopes to open up and naturalize. Mayor Pat Burt argued that these future improvements would create a "really desirable" location for an affordable housing development.

"This is one of the few opportunities we've actually had for a development agreement where we can negotiate terms that are even greater than what we'd be able to have through our standard zoning," Burt said. "I believe that's exactly what's happening here."

For Sobrato, the deal would deliver some certainty that the former cannery building and other structures at the site can continue to function as research-and-development companies. For years, council members have discussed the possibility of amortizing the commercial uses at the site and replacing them with housing. The area is zoned for medium-density housing and Palo Alto had listed the site in its Housing Element as one that could accommodate up to 249 dwellings.

But city leaders have been loath to make that switch out of concern that Fry's Electronics would depart, a fear that became realized in late 2019. The store's shuttering prompted renewed calls for land use changes at the site, including the prospect of requiring Sobrato to find new retailers to achieve the same type of uses that had been in effect before Fry's closed down.

The proposed deal, which will be vetted in the coming months by the Historic Resources Board, the Architectural Review Board and the Planning and Transportation Commission, effectively halts all talk of amortization and allows the cannery to operate primarily as a research-and-development building. The cannery would, however, be renovated and it would include 2,600 square feet of retail space that would allow visitors to view the building's historic elements and an exhibit recognizing its significance.

Rebecca Sanders, moderator of the Ventura Neighborhood Association, said she was disappointed with the decision and suggested that amortization of commercial uses should remain on the table. Resident Jeff Levinsky urged the council to publicly release the financial studies it had used to develop the concept with Sobrato and other alternatives that had been evaluated as part of the negotiations.

More information is expected to be released in the coming months, as the proposed development plan goes through the environmental review process. Karen Holman, a former mayor who currently serves on the Midpeninsula Regional Open Space District board of directors, urged the council to clearly define the review process for the development and the financial benefits that both sides will receive as part of the deal.

"No one is going to get everything they want but it's essential that good analysis and process be followed that allows the public to evaluate this or any proposal," Holman said.

She also suggested that the council recognize the historic significance of the cannery by renaming Portage Avenue to Thomas Foon Chew Cannery Way.

Julie Lythcott-Haims, who is running for a council seat, highlighted another area in which Ventura is historically significant: its status as one of few neighborhoods where Black and Asian residents could live back when Palo Alto engaged in "redlining" and when many parts of the city had restrictive covenant that prevented racial minorities from moving in.

"As the nation reckons with understanding and atoning for systemic discrimination against Black, Asian, Latinos and other racial minorities, when this project comes to fruition I hope it includes a recognition and celebration not just of the historic cannery but of the fact that this is where Black and Asian people have historically made their home in Palo Alto," Lythcott-Haims said.

Comments

Native to the BAY
Registered user
Old Palo Alto
on Aug 2, 2022 at 11:50 am
Native to the BAY, Old Palo Alto
Registered user
on Aug 2, 2022 at 11:50 am

This area is ripe for use for housing at all income levels. Don’t can it & send the plan by packing the low hanging fruit of our past’s labor by the train car load. Make history part of the present reality. We need affordable, quality, safe housing now. We, multi generational residents of this city have worked service jobs, retail, store front biz owners (like shoe cobblers, and grocery store clerks) contributing to this town’s economy, for decades. Now certain residents desire to chew up what is a real need. Now disregard the labor force (work force housing) by demonizing and metaphorically demolishing good, sound plans for housing. Did Chew provide work force housing for his cannery crew? Once he sold it, did the new owners? So hypercritical and typical. Canned goods became a staple for families and soldiers during WWII. Guess what? We are fighting a war of a different kind now. While snobby Palo Altans demolish buying or eating canned goods. They want to honor a canned fruiting past? Bizarre times indeed.

Take part of the building over to Cubberely and use its structural and cultural value for a community center there — perfect for indoor pickleball courts or community pool.


Citizen
Registered user
College Terrace
on Aug 2, 2022 at 11:57 am
Citizen , College Terrace
Registered user
on Aug 2, 2022 at 11:57 am
Bystander
Registered user
Another Palo Alto neighborhood
on Aug 2, 2022 at 2:35 pm
Bystander, Another Palo Alto neighborhood
Registered user
on Aug 2, 2022 at 2:35 pm

Very much against the idea of labeling any area as suitable for any particular race. Isn't that the exact opposite of what we want?

As for the comment about Hearst Castle, words fail me.


Native to the BAY
Registered user
Old Palo Alto
on Aug 2, 2022 at 3:56 pm
Native to the BAY, Old Palo Alto
Registered user
on Aug 2, 2022 at 3:56 pm

Is the work labeling a can of fruit or a labeling a building by definition our history? We deserve honoring of this neighborhood by providing hard working service and low wage workers their due — housing for all. @Citizen (Cain) @bystander — low standard view of current need ! Honoring the past with housing is making use of the present. You woke me up by your baseless red scaring, mean tactics using words to frighten our city governance. Protect and proceed our leaders for good will prevail over the stench of fermenting stale processed thought. So last Century!


Annette
Registered user
College Terrace
on Aug 2, 2022 at 3:59 pm
Annette, College Terrace
Registered user
on Aug 2, 2022 at 3:59 pm

"Sobrato is providing land and $5 million in fees for affordable housing and park improvements."

What is the $ value of what Sobrato is providing and how does it compare to what Sobrato gains from the deal? Something tells me that the City is not on the winning side here. The $5M in fees, is not a huge amount of money to an organization like Sobrato which is, I believe, worth billions.


Native to the BAY
Registered user
Old Palo Alto
on Aug 2, 2022 at 4:30 pm
Native to the BAY, Old Palo Alto
Registered user
on Aug 2, 2022 at 4:30 pm

Lack of suitable land to put needed workforce housing isa huge win for City and its citizenry. A city hall who continue to cry land poor. Sobrato is land AND cash rich. That’s the net win win @Annette. Finally decent, quality housing plan in a perfectly suited site for for our normal wage earner families. Don’t forget to remove a portion of the production warehouse to Cubberly for use for pickle ball courts and community indoor pool! Win, win, win.


tmp
Registered user
Downtown North
on Aug 2, 2022 at 5:41 pm
tmp, Downtown North
Registered user
on Aug 2, 2022 at 5:41 pm

2.5 acres for park space and much of it a concrete channel that may or may not ever turn into useable space is not worth adding thousands of more people to the city every day. The city is more than 100 acres of park space behind in what they claim in the comprehensive plan they want to provide for residents of the city.

There is no will among the city council to secure large open spaces for recreation and sanity of the residents they serve. We need to push back against constant growth and destruction of open spaces. Heck, at this point even a flat parking lot with a few scrubby trees is about the best open space we can count on since these spaces are now supporting giant developments.

We need more park space in this plan not more development. Where it the park space funding in the business tax measure? Not everything that city council deals with is about building things.


Native to the BAY
Registered user
Old Palo Alto
on Aug 2, 2022 at 6:55 pm
Native to the BAY, Old Palo Alto
Registered user
on Aug 2, 2022 at 6:55 pm

@tmp. Hmmm. The city is 40 years behind its housing allocation. SFHomes in R1Zones with average 3 cars, big front back yards, want more open space not less, want 11 pickle ball courts and less skateboard/park activities for kids, want more police to keep the “bad” ones out and not less , want more public parking for one or more or more of their high priced vehicles - not less, want less people even though these people are already here, want less airplane noise unless personally flying to Cabo. Want less RV dwellers and more nice things to look like bees and trees and leaves of grass. Want more for you and less for our youth, want less taxes and more services for you. Just because a city ignores its housing needs for half a Century does not follow you’ll get more personal ownership and privacy than you already have. If all private homeowners gave up just six inches of their personal space, one of their cars, got active for change for the good of all — that would add up to lots of space for the many already here, struggling with a painful economy that is crushing our community like the aluminum fruit can you may , or may not recycle. How about Stanford Le(Land) giving u some of its vast acreage of land and wealth to help soften the blow we endure every day of every hour... Here’s a thought. Since Stanford recruits only about .5 % of our Gunn and Paly grads they get an escrow account for land/housing swaps. So while trying to keep our kids safe, healthy calm from the brink of climate and income disparity disasters per economics, yes yes yes to housing. Kids see these cruel despair ties in housing prices. Kids see the unhoused, the needy the poor. Can’t hide forever. Or is teaching tolerance and empathy and inclusion a dream of another era of horror. These may seem dramatic, yet my kids watching famines run out of gas on our streets is a sad, pathetic reality. It so feels like the garden of good and evil. Anyone earning less than $125Grand a year is being citizen caned in this town. Even those that have resided here in family name 100 or more years.


Native to the BAY
Registered user
Old Palo Alto
on Aug 2, 2022 at 7:05 pm
Native to the BAY, Old Palo Alto
Registered user
on Aug 2, 2022 at 7:05 pm

@tmp — has anyone seen the Golden Eagle subsisting off rich peoples scraps over Stanford Research Park? Beautiful. Skies the limit in Pa. make it possible for us terrestrials. I watched the bird grow from infancy to adult. Go see for yourself. There is room if we make room.


Carl Jones
Registered user
Palo Verde
on Aug 2, 2022 at 9:26 pm
Carl Jones, Palo Verde
Registered user
on Aug 2, 2022 at 9:26 pm

We don't need to save an old run-down cannery building. We CAN put up a plaque that details what happened at this site and why it was important. But we do NOT have to waste valuable land to keep a building that can not be made to serve for what we desperately need today. So lets get over it and move on.


Mondoman
Registered user
Green Acres
on Aug 2, 2022 at 9:58 pm
Mondoman, Green Acres
Registered user
on Aug 2, 2022 at 9:58 pm

To me, the former cannery building looks pretty dumpy without any attractive architectural features. @Carl Jones is right to suggest honoring the historical event itself and replace the old building with something both better-looking and more useful.


Native to the BAY
Registered user
Old Palo Alto
on Aug 3, 2022 at 2:19 am
Native to the BAY, Old Palo Alto
Registered user
on Aug 3, 2022 at 2:19 am

So brought O land O in time of desperate need ove greed. V-rent asks outlandish data sets to determine eligibility for our most vulnerable as a barter t0o. Hu


Native to the BAY
Registered user
Old Palo Alto
on Aug 3, 2022 at 11:23 am
Native to the BAY, Old Palo Alto
Registered user
on Aug 3, 2022 at 11:23 am

[Post removed; successive comments by the same poster are not permitted.]


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