Seeking grants, Palo Alto designates downtown as ripe for growth

Despite a shared desire to further development near Palo Alto’s downtown transit hub, the City Council clashed on Monday over the role that regional planning agencies should play in shaping that vision.

After a robust debate, the council voted 4-3 to designate downtown as a “preferred development area,” a label that could help the city attract funding from the Metropolitan Transportation Commission. At the same time, some city leaders believe the new designation may spur the agency to increase the city’s regional housing allocation and require it to plan for more units.

The narrow vote means that downtown now joins the California Avenue business district as the city’s only two preferred development areas. The four members who supported the designation, most notably Mayor Adrian Fine, touted the financial benefits that the move could bring, including funding for bike improvements and for planning efforts involving the downtown transit center and Caltrain station.

Fine, who had worked at the MTC before joining the council, said the agency’s goal — to concentrate growth near transit — is perfectly consistent with the city’s plans, as articulated in the Comprehensive Plan. The agency, he noted, has already given out about $630 million in planning grants. If Palo Alto competes for the agency’s funding, it’s share would amount to about $5.5 million, he said.

“If we choose to go ahead with this, it gives us the ability to seek planning money to focus development downtown, which I think makes eminent sense,” Fine said.

Councilwoman Alison Cormack agreed that the city should move ahead with the designation, which could help it obtain funding for grade separation, the redesign of grade crossings so that the railroad tracks would not intersect with local streets. The city is in the process of narrowing down design options for grade separation at three crossings: Churchill Avenue, Charleston Road and Meadow Drive.

The council also decided last year a fourth crossing, at Palo Alto Avenue, should be explored through a broader area plan for the downtown area.

“Soon we will have many people here saying we need grant money,” Cormack said. “Where will we get the grant money to do all these things?”

But while council members Greg Tanaka and Liz Kniss joined Fine and Cormack in supporting the new designation from the downtown area, the three council members in the “residentialist” camp strongly disagreed. Rather than focusing on the funding, Councilman Eric Filseth emphasized the strings that would be attached to that funding. Approving the designation would likely increase the number of housing units in Palo Alto’s regional allocation.

The grants may include onerous conditions such as deadlines that, if unmet, would require the city to pay back the grant funding, he said.

Palo Alto has a history of getting shifted by state agencies, he said, citing transportation measures that direct local tax funds to other parts of Santa Clara County (usually San Jose) and transit agencies that keep shrinking their footprint in the northern section of the county (a reference to the Santa Clara Valley Transportation Authority’s recent service changes). The council, he argued, should be very careful about “deliberately building more dependency on remote agencies.”

“God gave people two legs to walk away from deals they shouldn’t sign,” Filseth said. “I think we’re already capable of planning and zoning and I think our inclination ought to be: Live within our means, be careful about getting involved in these regional agencies, especially the MTC, and focus on executing the stuff we’re committed to.”

Councilwoman Lydia Kou and Vice Mayor Tom DuBois both joined Filseth in dissent. Kou argued that the funding would be too constrained and that it would come with “huge strings” attached.

“The trade-off at this point is way too high to have another priority development area designated,” Kou said. “It kind of puts the writing on the wall that there will be more jobs, which means that the RHNA (Regional Housing Needs Allocation) numbers are going to be higher.”

There was far less debate on Monday about a proposal to designate 2,629 acres in the Baylands and 5,260 acres in the foothills as “priority conservation areas,” making them eligible for conservation funding. According to Planning and Development Services staff, the funding could be used to study and address the impacts of sea level rise and the preservation of open space.

With little discussion and no drama, the council unanimously agreed to make the designation for the open space preserves.

View an interactive map of the downtown priority development area here.