The city is now in the midst of putting together the North Ventura Coordinated Area Plan, a document that will lay out a new vision for a roughly 50-acre section of the Ventura neighborhood bounded by El Camino Real, Page Mill Road, the Caltrain tracks and Lambert Avenue. The Comprehensive Plan, which articulates Palo Alto's long-term land use vision, specifically calls for reimagining the area "as a walkable neighborhood with multi-family housing, ground floor retail, a public park, creek improvements and an interconnected street grid."
At the heart of the site is 340 Portage Ave., a large parcel that is anchored by Fry's Electronics and that city leaders have identified as an ideal site for future housing.
Yet plans to redevelop the Fry's site — as well as the broader area — have run into some trouble of late. Despite a December 2020 deadline set by a state grant, the planning effort slowed to a crawl this spring, thanks in part to disagreements between the city and its consultant, Perkins + Will. The city only recently resolved its dispute with the consultant over its responsibilities and compensation.
In addition, Perkins + Will recently determined that the Fry's building, a former cannery, is "historically significant," potentially complicating the redevelopment plans. The Sobrato Organization, which owns the Portage Avenue property, has signaled to the city that it has no desire to demolish or renovate the building, adding another blow to the city's grand plans.
The delay has frustrated the Working Group, a 14-member stakeholder panel of residents and others that is helping to put the plan together. The group met this week, but its last meeting was held in April. Some members recently called for changes in how meetings are conducted.
Despite all of these setbacks, the City Council reluctantly agreed by a 4-3 vote to add $367,112 to its contract with Perkins + Will contract and to extend the planning process by another 11 months, with a goal of finishing it by fall 2021.
Mayor Eric Filseth and council members Alison Cormack and Greg Tanaka dissented and argued that the council should stay within its budget, even if that means a less robust planning process and fewer planning alternatives on the final menu of options.
Even those who supported the expanded contract weren't particularly thrilled about where the project currently stands.
"We're 10 months into the project, we're about a year behind and we want to almost double the budget," Councilman Tom DuBois said.
Planning Director Jonathan Lait told the council that Sobrato's position on the Fry's site reflects today's economic climate. He cited the area's hot construction market, high labor costs and returns on rents as factors in Sobrato's position on the Fry's building.
A representative from Sobrato has indicated that "the conditions at the moment are not ripe" for the type of development that the city was hoping to see at Portage Avenue site, Lait said. The organization indicated that housing would not be economical at the heights and densities that Palo Alto has historically tolerated for residential projects, Lait said. Sobrato did not respond to the Weekly's request for comment.
The Fry's site isn't just at the heart of the North Ventura plan; it is also a central component of Palo Alto's overall vision for housing. The city's Housing Element identifies the Fry's site as one that could accommodate up to 249 units.
It's now unclear how the city would be able to achieve that many new units while also preserving the Fry's building, Lait said.
At its Wednesday meeting, members of the Working Group acknowledged that Sobrato's position likely means that the area's redevelopment won't net the types of benefits many had hoped for, at least in the short term. Even so, members and staff said, in the long run the plan would allow for economic conditions — and Sobrato's position — to change years from now.
Lait told the group on Wednesday that as the planning process continues to unfold, it will require some uncomfortable conversations, including a discussion of how much additional height and density the city should tolerate in exchange for getting affordable housing, park space and other sought-out community amenities.
The city plans to study three scenarios, at least one of which will evaluate the retention of the Fry's building and another that will consider its redevelopment. The third one will try to strike a compromise between the two options.
Several residents urged the Working Group on Wednesday to support adding housing on the Fry's site. Annette Isaacson made a case for building housing for teachers and other public employees, who have essentially been priced out of the city. Downtown resident Don Barr, a longtime advocate for affordable housing, proposed a clinic on the ground floor of a new development that would also include four stories of below-market-rate housing.
Others, including some members of the Working Group, said the Fry's building should be preserved, even if its function changes.
"I think we can certainly consider repurposing the building for all types of purposes, whether it be housing, a community center, an aquatic center or whatever else it might be," Working Group member Terry Holzemer said.
But the process should also respect the building's historic significance, he said.
"I think the historical structure itself does provide an opportunity, especially for young people, to learn that well before there was Silicon Valley, this was a significant area to the valley and to the United States."
Councilwoman Lydia Kou also welcomed the idea of preserving the Fry's site. She argued Monday that it's important to honor the legacy of Thomas Foon Chew, who bought the site in 1918 and built a cannery that became the region's largest employer.
Former Mayor Karen Holman, a longtime proponent of historic preservation, disputed the idea that historic preservation and housing production are necessarily incompatible. The building, she suggested, could be repurposed without being entirely redeveloped.
Other cities, Holman said Monday, have turned their industrial buildings into modern hubs. Palo Alto can similarly create places that contain brew pubs, art galleries, wine tasting roOms and other amenities.
Vice Mayor Adrian Fine and Councilwoman Liz Kniss both supported investing more money in the Ventura planning process, even under the changing circumstances. DuBois and Kou were somewhat more reluctant but joined them in directing staff to bring back a new contract with Perkins + Will.
Filseth made the case for staying within the original budget. The planning process, he noted, was up until now funded largely with grant money and a contribution from Sobrato. Adding funding to the planning process would require the city to dip, for the first time, into the general fund. And it would be doing so at a time when the project's goals seem less likely to be achieved than in the past.
"There is such a thing as giving a startup too much money," Filseth said, in making the case not to add another contract.
The council was more united about the prospect of removing the concrete channel from Matadero Creek and restoring the creek to its natural state. It unanimously approved a $93,000 contract with the firm Water Resources Associates Environmental Consultants to explore the idea of converting the channel into an open space corridor.
Lait said the study will consider both the prospect of enhancing the existing channel by building recreational amenities around it and the more ambitious idea of removing the concrete and returning Matadero to a natural creek.
The council generally agreed that the Ventura area plan is still worth doing, even with Sobrato's position being what it is. Cormack said she feels the city has lost "a big component of this that is driving urgency."
"I understand we committed to doing this in the Comprehensive Plan (and) we probably need to keep going," Cormack said. "But it's not clear to me it will achieve the things many people in the community have been hoping for in the medium-run."