ATTACHMENT 11: Project Site and Settlement Agreement Background The project site, historically referred to as Whiskey Gulch, for its many liquor stores during the decades after prohibition, was the primary business district of East Palo Alto until the 1980s when the City’s Redevelopment Agency received multiple proposals to redevelop the area. The proposals envisioned new offices, retail, and hotel buildings in the area and promised to bring much needed tax revenues to the City.
In November 1988, the University Circle Redevelopment Plan (University Circle Project Phase I) was approved with plans to replace the existing one- and two-story retail buildings that lined University Avenue with a 10-story, 230-room hotel and 475,000 square feet of office space. The Final EIR prepared for the project concluded that the project would result in significant unavoidable impacts to aesthetics, cultural resources, and transportation. On November 28, 1988, the City adopted a Statement of Overriding Considerations and certified the Final EIR.
Subsequently in December 1988, two lawsuits were filed against the City by the City of Palo Alto and the Crescent Park Neighborhood Association. In July 1991, a Comprehensive Settlement Agreement (Settlement Agreement) resolved these lawsuits and established limitations on building size, height, and location within the site, as well as construction operations and vehicle trips. The terms of this agreement remain in effect until December 15, 2023. Per the Settlement Agreement, no building permits can be issued for significant new construction on-site (beyond what was permitted under the Phase I project) until after the Settlement Agreement expires.
A third lawsuit was filed by the City of Menlo Park in March 1990 which alleged deficiencies in the Final Supplemental Environmental Impact Report under CEQA. This lawsuit was also resolved with a Settlement Agreement restricting the square footage of the proposed buildings consistent with the prior Settlement Agreement, and additional requirements such as reimbursement of the City of Menlo Park for preparation of a traffic study and compliance with the resulting traffic improvement project recommended in the traffic study. The terms of this agreement remain in effect until December 15, 2023.
In August 2016, the City Council certified an Environmental Impact Report and adopted an updated Vista 2035 General Plan designating the University Site as Office which expressly contemplates office development similar in scale and intensity for the pending application.
The General Plan provides a comprehensive framework for the physical development of the city through 2035 and highlights two primary areas within the city suitable for future office development: Ravenswood area and along University Avenue, including the University Circle site. Further, the General Plan includes specific policies to direct future development at the University Circle site. Land Use Policy 2.7, University Circle, for example, calls for intensification of either office or hotel uses at the site consistent with the established planning and legal framework. Additionally, Westside Area Plan Policy 4.6, University Circle, calls for better integration of the University Circle site into the surrounding neighborhoods through roadway and pedestrian improvements.