Developer drops housing plan near California Avenue | July 23, 2021 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - July 23, 2021

Developer drops housing plan near California Avenue

Smith Development opts to go with a three-story office building at 123 Sherman Ave.

by Gennady Sheyner

A developer who was preparing to build 75 apartments as part of a mixed-use project near the California Avenue Caltrain station in Palo Alto earlier this year has dropped the proposal and is now looking to construct an office complex at the site.

Smith Development, which owns numerous properties in the Mayfield and Ventura neighborhoods near the Caltrain station, had proposed in January a development that would occupy three of its parcels at 123 Sherman Ave., 150 Grant Ave. and 2501 Park Blvd. and that would include 75 apartments and 35,996 square feet of office space. Because the properties are zoned for commercial use, the developer requested a rezoning of the site to "planned home," which would allow it to request concessions to development standards in exchange for the public benefit of housing.

The zone change would also, however, require Smith to undergo an extensive plan review process that includes a prescreening hearing in front of the City Council and formal reviews by both the Planning and Transportation Commission and the council. In its application, the developer noted that the site's zoning already allows Smith to build up to 70,858 square feet of commercial space. The firm had elected at that time "not to pursue an exclusively commercial redevelopment so (we) can provide housing units for the community," Boyd and Lund Smith wrote in a letter to the city accompanying the application.

Now, however, that plan appears to be dead in the water. Last month, Smith Development submitted a new application that complies with underlying zoning and, as such, will not need to go through the "planned home" process. Smith's new project is a three-story building that is 37 feet tall and includes offices on the top two floors and retail on the ground floor, along Sherman Avenue. The building will have 52,661 square feet of commercial space and a two-level underground garage, according to the project application.

Because the project falls well within the density limits of the CC2 (community commercial subdistrict) zone near California Avenue and complies with the city's 37-foot height limit for the commercial zone, the development will only need to be approved by the Architectural Review Board and the city's planning staff before it gets constructed.

"Smith Development looks forward to completing a high-quality project (that) will serve our community for years to come," Boyd and Lund Smith wrote in a June 15 letter to Planning Director Jonathan Lait.

The Smith project was one of several developments seeking to add housing to the centrally located area near the California Avenue Caltrain station through the city's newly established "planned home" zoning process. The most recent of these is a 49-condominium proposal that Roger Fields has applied for at 280 and 300 Lambert Ave.

While the council has yet to review Fields' plan, members signaled tentative support in January for another planned-home project close to the area: a 113-apartment proposal from Acclaim Companies for a three-parcel site at 2951 El Camino Real, between Olive and Pepper avenues.

Most of the other applicants have not been as successful. In February, the council criticized a proposal by Jeff Farrar to build 290 apartments at 3997 Fabian Way as being too tall and dense. The 62-foot-tall building had designated 29 apartments for individuals in the "very low" income level. And in April, the council flatly rejected a proposal by Cato Investments to build a three-story apartment building with 24 apartments at 2239 and 2241 Wellesley Ave. in the College Terrace neighborhood. Even though the council didn't take any formal votes during the project's prescreening hearing, members agreed on April 12 that the use of planned-home zoning will be prohibited in single-family neighborhoods and largely restricted to commercial and high-density residential areas.

Vice Mayor Pat Burt also noted at that time that density limits on and around California Avenue strongly encourage developers to move ahead with office projects, which are far more lucrative, rather than residential ones. He suggested adjusting these limits to make housing more attractive.

"I don't see any circumstances that we'll see residential in the California Avenue area under this formula," Burt said.

Email Staff Writer Gennady Sheyner at [email protected]


Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 20, 2021 at 10:05 am

Online Name is a registered user.

Oh, goodie. More offices! Thank heavens. If there's one thing Palo Alto needs, it's more offices and more commuters and more workers pushing up the price of existing housing.

As if we don't already have enough empty offices. FEH.

Posted by ALB
a resident of College Terrace
on Jul 20, 2021 at 10:48 am

ALB is a registered user.

The city needs HOUSING not office. Sherman Avenue is ideal for housing as it is walkable to the train and California Avenue
business district. The developer is hiding behind the false excuse of ‘process.’ This council in my opinion would endorse housing at this site and not office. Palo Alto is saturated with office buildings. Look around town and take in the signage for vacant offices that abound. Smith must step up and construct needed housing which the city needs NOW.

Posted by chris
a resident of Ventura
on Jul 20, 2021 at 10:48 am

chris is a registered user.

Who would live above retails....right next to train tracks...mentioned there many empty office bldgs and there lots of land nothing on them...

Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Jul 20, 2021 at 11:51 am

Resident 1-Adobe Meadows is a registered user.

Someone may think that the initial going in offer of housing was just a way to get a foot in the door. Engage the city so that it blocks other potential builders. The city has no requirement to entertain this offer since housing is what is required. More office space is just undermining the whole residential structure of this city. More justification then to cause continual discombobulation in the residential sector.

Posted by Cal Ave resident
a resident of College Terrace
on Jul 20, 2021 at 12:18 pm

Cal Ave resident is a registered user.

More insanity from the city council and NIMBYs. I live around the corner and this neighborhood needs more homes and more residents, not barren streets and offices. What on earth is wrong with people? Look at the dreadful lifeless street with the $50M 600-space parking garage and compare it to Cal Ave without cars. Get rid of parking minimums and BUILD MORE HOMES NOW!!

Posted by Alex
a resident of Barron Park
on Jul 20, 2021 at 12:30 pm

Alex is a registered user.

So what I'm reading is that because Palo Alto's existing laws for zoning are so dumb, despite the City Council whining about "we don't need more office buildings!", offices are still being built because they refuse to easily green light housing. Looks like DuBois & the rest of the circus are finding out that playing stupid games wins you stupid prizes.

Posted by JB
a resident of Evergreen Park
on Jul 20, 2021 at 12:46 pm

JB is a registered user.

We don't need more office complexes! This has created big traffic problems. Now ABAG (I think it's the Association of Bay Area Governments) has decided we need to build 6000 housing units in Palo Alto because of the large number of office developments already completed. California bills 9 and 10 would allow single family home lots to be bought by developers and split into 2-4 housing units (including accessory dwelling units), with 4 foot setbacks and no environmental protection (trees and landscape could be removed). If I read the bills correctly, the developers would not be required to pay for sidewalks, sewers, parks, or other public amenities. Parking could also be a big problem. I am not an expert or a lawyer. Please look up the texts of these state senate bills and contact Assembly member Marc Berman if you are opposed to these bills. This office development insanity must stop. Where can we find room for 6000 housing units and water to supply to the new tenants?? Don't people living in single family home neighborhoods (I rent, so I am not one of these people) want to preserve the nature of their neighborhoods? At the incredibly high price of land in Palo Alto, I don't see how these newly developed housing units in single family lots could be affordable housing. Thank you.

Web Link

Web Link

Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Jul 20, 2021 at 12:49 pm

Resident 1-Adobe Meadows is a registered user.

This city is filled with empty office buildings on both east and west Bayshore - more "for lease". We do not lack empty buildings. Someone needs to put together a recap of all of the empty buildings we have. Maybe some of those empty buildings need to be converted to housing. At commute time the streets are totally blocked with cars now. People do not want to use Caltrin. Now we have the white busses in our residential streets. We are out-of-control.

Posted by Eric Filseth
a resident of Downtown North
on Jul 20, 2021 at 3:51 pm

Eric Filseth is a registered user.

Correct – these zoning-override bills generally contain a clause absolving responsibility for the costs of these state mandates, on the explicitly-stated grounds that cities can tax themselves for it. Other state constraints limit cost recovery in a variety of ways; for example, school districts have long been barred by the State of California from assessing developers even a fraction of the actual school costs created by their projects.

Funding is essential not just for infrastructure but for Affordability; even Plan Bay Area 2050 acknowledges that zoning measures impact only Market Rate housing. Yet these bills focus exclusively on who controls zoning – Sacramento, or local voters through their councils? -- and not on funding or other measures essential to making a real difference. I thought Assemblyman Kevin Riley’s recent remarks on this point were informative:

“you have in favor of a bill like [SB9], some very powerful interests that have a lot of pull on both sides of the aisle frankly, and there’s enough political muscle to overcome the strong opposition, and quite legitimate opposition in some cases, of local government.

“And so because it’s Sacramento interests on one side, and just local government on the other, that’s a battle we’re willing to fight, to some extent. But in order to address any of the other parts of the housing problem, suddenly then you have Sacramento special interests on both sides, and you have even more powerful special interests on the opposition side. And so we’re not willing to fight those battles.

“And so I’ve supported measures like this, but I’ve also started to ask myself, am I, you know, enabling a strategy of avoidance, where we look like we’re doing something to address housing, but actually avoiding the much bigger issues that are responsible for us having by far the worst housing situation in the country.”

(June 22, 2021 Assembly Housing and Community Development Committee Hearing)

Posted by Eric Filseth
a resident of Downtown North
on Jul 20, 2021 at 3:57 pm

Eric Filseth is a registered user.

It’s also worth noting that SB10 actually extends this conflict: it skips local government altogether and carries the Legislature’s zoning fight to voters directly, with a clause that grants local City Councils the discretionary power to overturn voter initiatives on land use, even if they pass at the ballot box.

Many of us in those City Councils feel this to be outrageously hostile to voters and do not want such a power. We also worry that if Sacramento grants such a power to city councils, it’s only a matter of time before other government entities will want the same power; some of which entities may be influenced by the same special interests Assemblyman Kiley is talking about above. We wonder how any elected official who represents voters could possibly support such a measure? Yet it’s making its way to the Assembly floor.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 20, 2021 at 4:58 pm

Online Name is a registered user.

Thanks, Eric.

I believe that Planning Director Lait and the city attorney still need to make their arguments -- as directed by city council -- for what Palo Alto is rejecting the ABAG housing targets.

Where does that stand? Isn't ABAG required to hold community hearings?

Posted by eileen
a resident of College Terrace
on Jul 20, 2021 at 6:48 pm

eileen is a registered user.

My biggest fear with the passage of SB9, SB10, or any other bill restricting local zoning or control, is that our area will become an asphalt jungle devoid of trees, landscaping, or green space. Can we have both? More housing and a beautiful, shady city? The weather is hotter now and we need shade TREES!! The existing tree canopy can withstand the drought as long as we take care of our precious trees. All the new construction I see cuts down the trees to make more space. We need to welcome new residents and also give them a beautiful, nature filled environment too! Local control can hopefully protect what makes Palo Alto livable.

Posted by Vapa
a resident of Midtown
on Jul 20, 2021 at 7:35 pm

Vapa is a registered user.

This is nuts!
No more offices - We have too much empty office space already.

Posted by RDR
a resident of another community
on Jul 20, 2021 at 10:10 pm

RDR is a registered user.

It's sad not to see the housing be built, but the housing project included 35,000 sf of office space when it had housing. That's enough space to have 150 people working in the offices. It was a lot of new office workers already. The new project is only a little more office space, if any. It also adds some retail space. Neither project is that good. Why not all housing?

Posted by Andy
a resident of Stanford
on Jul 21, 2021 at 12:06 am

Andy is a registered user.

This is a great example of how public policy fails to encourage maximum mixed use and to solve the housing crisis.

Developer should be given fast-track priority IF it includes maximum housing and mixed-use.

Posted by Marty Keller
a resident of College Terrace
on Jul 21, 2021 at 8:35 am

Marty Keller is a registered user.

If people want to change, instead of whining in paper, why not use that energy to campaign for candidates who support housing? I'm just saying...

Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Jul 21, 2021 at 8:48 am

Resident 1-Adobe Meadows is a registered user.

The city needs to report on how many empty buildings there are in the city, who owns them, and what they are doing to make them available for use. Trying to charge too much? Then the city needs to find out if empty buildings are being used in the ABAG report to bolster the requirement for new housing.

How many buildings in the ABAG report are on SU proeprty and then being used in the Palo Alto allocation? The city and it's residents do not need to be compromised by the number of buildings on SU property that are used in the calculations.

The numbers that ABAG came up with do not make sense. The numbers are beng jockeyed by someone that no one voted for. For some reason we have become the dumping ground for other cities requirments. Push back against unelected agencies and push back against elected officials who are now running the state into the ground.

Posted by Reid
a resident of Midtown
on Jul 21, 2021 at 11:50 am

Reid is a registered user.

So, what actually went wrong here? I see Smith Development proposed the mixed use project in March 2021, and then submitted an office-only proposal in July 2021. It's not clear from the article what happened to the first proposal. Did the clock simply run out after four months, or did they receive negative feedback from the council?

It may be too late to add housing to this project, but we need to look to the next project and think about how we can make the planned housing zoning system actually work. In the absence of more info above, I'm assuming the council wasn't willing to grant PH zoning to the project, and that just seems like a mistake. We could have housing and office, or just office. Any housing is better than none.

On the positive side, office developments near transit are preferable to developments on the edge of town. Offices out in Stanford research park generate much more car traffic, and those workers cannot patronize Cal ave businesses on a walk during lunch.

Posted by mjh
a resident of College Terrace
on Jul 21, 2021 at 3:24 pm

mjh is a registered user.

Perhaps this is the perfect time for Palo Alto Forward (PAF) to get behind a moratorium on new office development and organize a voter referendum to limit approving new office construction throughout Palo Alto to until the jobs housing imbalance is reduced by half.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 21, 2021 at 4:54 pm

Online Name is a registered user.

@mjh, what a good idea. Let's see if Palo Alto Forward (PAF) is really more concerned about housing or its corporate donors.

Posted by Angie
a resident of Crescent Park
on Jul 22, 2021 at 10:35 am

Angie is a registered user.

Palo Alto Forward staff here. I've said this before but this myth continues to be spread. We are a membership organization. The small funds we have are from Palo Alto residents and philanthropic grants.

Check out our website to become a member and get in touch if you'd like to chat about office moratorium and other policy solutions. No one member, staff, or board representative determines our policy priorities. Rather we work toward solutions that meet the needs of the community and support a more inclusive, affordable, and sustainable Palo Alto.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 22, 2021 at 10:40 am

Online Name is a registered user.

PAF may be a membership organization bringing in an estimated $8,000,000 based on your published but are you denying that PAF has received 5-figure and 6-figure contributions / donations / grants from big tech executives? Or maybe I'm confusing PAF with the YIMBY party with its local, state, national and international chapters.

Posted by Angie Evans
a resident of Crescent Park
on Jul 25, 2021 at 9:03 am

Angie Evans is a registered user.

@Online Name

Definitely confusing us for someone else. I'd love to be able to work on housing affordability and tenants rights on a regional level with an $8M budget. Unfortunately our budget is MUCH, MUCH, MUCH smaller!

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 25, 2021 at 12:20 pm

Online Name is a registered user.

@Angie Evans, Ok. Must be the YUMBY's and their Housing For Everyone (or whatever) spin-off that puts up those horrible posters equating everyone who opposes density to Trump-loving gun-carrying thugs. See Wikipedia for funding info.

Ever since PAF and YIMBY pushed the Kate Downing pr campaign that Pat Burt opposed startups in Palo Alto when what he ACTUALY said was that big companies like Palantir -- Downing's employer -- were pricing small startups out the rental market, you've done a super job of leveraging whatever budget you have.

As we know from the covid vaccine fight, lies have staying power. I mention Kate Downing because she's cited in TODAY's San Francisco Chronicle article TODAY Web Link "Manhattanize Palo Alto"

Like the well-funded anti-vax lies, it's tough to fight this type of shameless misinformation.

Posted by Angie
a resident of Crescent Park
on Jul 25, 2021 at 8:34 pm

Angie is a registered user.

Then I'll set the record straight:

Palo Alto Forward is 100% for vaccines

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 26, 2021 at 10:10 am

Online Name is a registered user.

@Angie, how special you support vaccines which I only mentioned to highlight the lasting damage done by sustained disinformation campaigns.

Back to the issue, how do you defend the lasting damage done Kate Downing's lies years ago and more recently those horrible posters in College Terrace characterizing people who disagree with you as Trump-supporting terrorists bearing guns to keep undesirables out of their neighborhoods?

When will PAF/ YIMBY / Peninsula for Everyone start address how big tech contributes to homelessness and spent hundreds of millions of dollars in the last selection lobbying to deny basic benefits to gig workers and that workers need 4 minimum wage jobs here to afford even a basic apartment?

Where are your protests as developers keep knocking down affordable housing complexes to build more multi-million dollar "market rate" for highly paid tech workers?

Until you start pushing back on the reasons WHY housing is so unaffordable here, you'll continue to be seen as hypocritical lobbyists for your big tech and big development backers.

Posted by Joe in Green Acres
a resident of Green Acres
on Jul 26, 2021 at 11:57 am

Joe in Green Acres is a registered user.

I am intrigued by the comment by the ED of Palo Alto Forward Angie Evan's comment about the "small funds" it has, given that its Form 990-EZ for the period July 1, 2018 to June 20, 2019 shows that it received $62,843 in grants, contributions and membership fees for that period and $86,371 since its inception in 2016 through June 30, 2019. The form does not list its donors, particularly any person or group that may have made significant donations. The above information is available online, but it would be good to know who are the major donors to Palo Alto Forward given the "small funds" (not) it has.

As I'm sure some one will ask, those Palo Alto Forward amount(s) is/are orders of magnitude+ the money that Palo Altans For Sensible Zoning currently has. We really do operate on a very, very small budget, with volunteers who care deeply about Palo Alto and the quality of life residents desire to maintain.

Joe Hirsch

Posted by ALB
a resident of College Terrace
on Jul 26, 2021 at 2:00 pm

ALB is a registered user.

Ms Evans, the ED of Palo Alto Forward, needs to specify who the major donors are that fund her organization. My sense is they include developers, VC, real estate investment firms, and politicians. The credibility of this nonprofit SUFFERS for the lack of transparency. Which begs the question, what are you and your fellow members afraid of?

Posted by stephen levy
a resident of University South
on Jul 26, 2021 at 3:28 pm

stephen levy is a registered user.

I have been Treasurer of Palo Alto Forward since we started.

We have no corporate donors.

We are a 501(c)3 non-profit membership organization

We have now received two grants--one from the Silicon Valley Community Foundation and a new one from [email protected] tied to activities supporting voices underrepresented in most housing discussions (or city committees) primarily focused on renters who live here.

We have received a large anonymous donation from a charitable trust organization.

Our board has donated generously. We also receive a few donations from other individuals through their charitable trusts.

We are required to report donations and grants above $5,000 and do so and all are listed here.

We have members donating at the $50-$100 range.

Our events are open to the public and free.

More information is available on our website.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jul 26, 2021 at 5:19 pm

Online Name is a registered user.

@Mr, Levy

Thanks You say "We are required to report donations and grants above $5,000 and do so and all are listed here." Please provide that link. Thanks.

Isn't Silicon Valley Community Foundation -- Web Link -- is the non-profit arm of Silicon Valley Leadership Group Web Link which itself says includes 350 "member businesses throughout Silicon Valley."

So yes, you're well-staffed and well-funded with large anonymous donations, from board members and from all those small donors.

Your pr muscle and lobbying clout is formidable. The fruits of your labor in advocating for your backers are obvious as you work tirelessly to shift the costs of their expansion onto the residents.

Nice job of deflecting blame onto elitist NIMBY's and perpetuating the Kate Downing /Palantir spin while your backers spend hundreds of millions of dollars lobbying against paying business taxes, the costs of their development and benefits for gig workers... (Reminder that the top-paid CEOS in the US are from Palantir and DoorDash, respectively.)

Love the drum-beat claim that density will cause prices to drop while all the affordable apartment complexes get destroyed and that 90% of all the new housing is market rate for your backers' workers ...

Kudos, sir.

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