New office building gets green light New office building gets green light (December 24, 2003)

Structure would replace three other office buildings, plus restaurant

by Don Kazak

Despite gaping office vacancy rates, developer Richard Peery is putting together a deal for a big -- really big -- new office building.

The city's Planning and Transportation Commission voted 5-1 last week to approve the 73,932-square-foot building at Embarcadero and East Bayshore roads. The City Council will make the final decision. But since the project meets all zoning and building requirements, the city has little discretion in approving the project.

The Peery project would be built on 5.66 acres and replace four smaller, vacant office buildings at Watson Court and East Bayshore Road totaling 33,200 square feet and the former site of Scott's Seafood Grill & Bar, which relocated to Town & County Village. The new office building would be two stories and built on 5.66 acres. The office buildings were most recently occupied by the Palo Alto Medical Foundation. There will be 300 parking spaces in a surface lot. There was no number given for the estimated number of people who will work in the building.

Developer Owen Byrd called Peery the "smartest guy in the valley," in terms of developers, and added that Peery "can see over the hill" when it comes to economic trends.

"If he's building, that's a good sign," Byrd said. The office vacancy rate in Palo Alto was 14.6 percent a year ago, but still lower than the 24.8 percent rate for the Midpeninsula (San Mateo through Mountain View).

Peery couldn't be reached for comment on whether he has a master tenant, which is often a key requirement in getting construction financing.

The Peery development was questioned closely by commissioners last week, especially about traffic impacts, since the nearby Embarcadero Road/East Bayshore Road intersection gets jammed up during commute hours.

"We did think it was a problem," Commission Chairman Michael Griffin said of the intersection.

Another concern was the northbound off-ramp from the Bayshore Freeway to San Antonio Road. During commute hours, there is often a long line of traffic backed up almost onto the freeway, as the off-ramp is regulated by a stop sign.

"There's an unacceptable level of delay" at the intersection, said Joe Kott, the city's chief transportation official. He said it is the one of the most congested intersections in town controlled by a stop sign.

Caltrans, Mountain View and Palo Alto are jointly funding an $850,000 project to put a traffic signal at the off ramp's San Antonio Road intersection and add a turning lane. Kott said the project, which will be done by Caltrans, will be started before July 1.

Because of traffic concerns, the commission mandated that the Peery project have a transportation demand management program, which encourages employees to carpool and use public transit.

The dissenting commission vote on the project came from Pat Burt because of the mass and scale of the building and a question of its compatibility with the city's Baylands Master Plan, which stipulates that views of the foothills from the baylands should be protected.

Don Kazak can be e-mailed at dkazak@paweekly.com

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