If approved by the City Council, the new building would stand at the site formerly occupied by a Shell gas station, and the tower would be one of the first local landmarks to greet Caltrain commuters entering University Avenue. Originally proposed a year ago, the project has since become bigger and more ambitious, growing from four floors to five, adding nine apartments and incorporating the new tower element at the prominent corner of Alma Street and Lytton Avenue.
Under the proposal, the fifth floor of the 64-foot building would house 14 apartments, five of which would be affordable housing (though the applicants said they would be willing to make seven of the apartments affordable housing). The project would also include 1,500 square feet of retail space on the ground floor (up from 800 square feet in the prior version) and office space on the ground, second, third and fourth floors. The idea, from the developer's perspective, is to attract cutting-edge startups and further enhance the city's reputation for innovation. Another objective is to give Caltrain commuters a prominent "gateway" into the city — a goal that the 84-foot tower would help achieve.
"The main intent of the tower element is for aesthetic purposes and to help identify the mixed-use building as a landmark for downtown Palo Alto," city Planner Jason Nortz wrote in a report on the project. "The mixed-use building is intended to serve as a promenade entry to downtown beginning with the crosswalk from the University Avenue."
The city's Planning and Transportation Commission held its third hearing on the project Wednesday night. After a wide-ranging discussion that lasted longer than four hours and stretched past midnight, the commission once again requested revisions from the applicant. The commission voted 6-1, with Vice Chair Susan Fineberg dissenting, to send the project back to the drawing board, despite recognition from several commissioners that the project is perfect for the site. The applicants had already acceded to prior suggestions from various commissioners to add height, include more affordable housing and increase the retail space. The earlier version of the project had four stories, three units of affordable housing and 800 square feet of retail.
Commissioners said Wednesday that the project still doesn't offer enough "public benefits" — an ambiguous requirement that developers must satisfy to get the city's approval for a "planned community" (PC) zone. The zoning designation allows developers to exceed the city's regulations in exchange for negotiated benefits. Commissioner Arthur Keller argued that the building owners should offer Caltrain and VTA passes to all residents. Commissioner Samir Tuma advocated requiring the building to include below-market-rate commercial space (in addition to the affordable-housing units). Commissioner Greg Tanaka said the project should include more parking and suggested that the developers make the building's parking spaces available to the public.
After hours of discussion and disagreement among commissioners about what types of benefits the developer should provide, Commissioner Daniel Garber appeared frustrated by the increasing demands of his colleagues. He and Planning and Community Environment Director Curtis Williams both said that the proposal is consistent with the City Council's push to encourage more dense developments near transit hubs. The council had previously directed staff to allow projects to exceed the city's 50-foot height limit if they are located near Caltrain stations — a policy aimed at promoting walking and use of public transit to relieve traffic congestion. The building's location across from the Caltrain station is also a leading reason for why the League of Women Voters and the Sierra Club both submitted letters in support of the project. Neighboring property owners also attended Wednesday's hearing to urge approval.
"It is one of the prime sites for redevelopment — immediately adjacent to transit," Williams told the commission. "If not here, then where would we do it?"
Garber agreed and argued that the project is perfect for the proposed site at 355 Alma St. The building's size, he said, is exactly what the city is trying to encourage around train stations.
"I find it somehow astounding that we keep trying to find other things to add on to this," Garber said. "We're just piling on."
"I'm finding myself very frustrated with the fact that we have a project that's done everything we wanted it to do, and it doesn't seem like there's any consensus around it," he added. "I'm astounded by it."
Chair Eduardo Martinez agreed with Garber that higher density should be encouraged near transit but argued that there is an imbalance between the benefits to the developer and to the public.
Fineberg argued that the applicant didn't follow the commission's prior instructions to come back with more benefits.
"We as a body asked you to come back with substantive public benefits, and it didn't happen," Fineberg said. "We're making lots of additional suggestions tonight."
The commission agreed that the developer doesn't need to make any more changes to the building's design. When the application returns, the focus of the discussion will be solely on public benefits.
If the city doesn't approve the PC zone, the developer would have the option of building a standard two-story commercial building at the site under the existing zoning.