Agenda packet — Palo Alto City Council, November 18, 2024 (part 2 of 3)

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Job Code FLSA Status Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective Pay period inclusive of 07/01/2024 (4% Increase) Hourly Rate Annual Salary
72 Exempt Director Community Services 45E $96.01 $120.01 $144.02 $199,701 $249,621 $299,562 1012 Exempt Director Development Services 145A $84.40 $105.50 $126.60 $175,552 $219,440 $263,328 133 Exempt Director Human Resources/Chief People Officer 55E $96.26 $120.32 $144.39 $200,221 $250,266 $300,331 128 Exempt Director Information Technology/Chief Information Officer 25E $105.09 $131.36 $157.64 $218,587 $273,229 $327,891 131 Exempt Director Libraries 60E $89.93 $112.41 $134.90 $187,054 $233,813 $280,592 2028 Exempt Director of Emergency Medical Services 215D $75.80 $94.75 $113.70 $157,664 $197,080 $236,496 2005 Exempt Director Office of Emergency Services 215D $75.80 $94.75 $113.70 $157,664 $197,080 $236,496 49 Exempt Director Office of Management and Budget 120A $86.80 $108.49 $130.19 $180,544 $225,659 $270,795 134 Exempt Director Planning & Community Environment 40E $101.20 $126.50 $151.80 $210,496 $263,120 $315,744 135 Exempt Director Public Works/City Engineer 30E $102.49 $128.11 $153.74 $213,179 $266,469 $319,779 121 Exempt Director Utilities 10E $126.91 $158.63 $190.37 $263,973 $329,959 $395,970 2002 Exempt Division Head Library Services 260D $65.68 $82.10 $98.52 $136,614 $170,768 $204,922 172 Exempt Division Manager Open Space, Parks & Golf 245D $68.27 $85.33 $102.40 $142,002 $177,486 $212,992 2031 Exempt Division Manager Planning 220D $73.37 $91.71 $110.06 $152,610 $190,757 $228,925 1005 Exempt Executive Assistant to the City Manager 705M $40.07 $50.08 $60.10 $83,346 $104,166 $125,008 139 Exempt Fire Chief 35E $114.17 $142.71 $171.26 $237,474 $296,837 $356,221 163 Exempt Hearing Officer 480M $56.20 $70.25 $84.30 $116,896 $146,120 $175,344 101 Exempt Human Resources Representative 735P $37.52 $46.90 $56.28 $78,042 $97,552 $117,062 90 Exempt Landscape Architect Park Planner 510M $53.55 $66.93 $80.32 $111,384 $139,214 $167,066 2015 Exempt Legal Fellow 755P $47.15 $58.93 $70.72 $98,072 $122,574 $147,098 171 Exempt Management Analyst 585M $48.62 $60.77 $72.93 $101,130 $126,402 $151,694 401 Exempt Management Fellow 750P $35.53 $44.41 $53.30 $73,902 $92,373 $110,864 79 Exempt Manager Accounting 235D $66.32 $82.89 $99.47 $137,946 $172,411 $206,898 2007 Exempt Manager Airport 210D $76.05 $95.06 $114.08 $158,184 $197,725 $237,286 2023 Exempt Manager Budget 360M $70.34 $87.92 $105.51 $146,307 $182,874 $219,461 38 Exempt Manager Communications 525M $53.86 $67.32 $80.79 $112,029 $140,026 $168,043 154 Exempt Manager Community Services 630M $50.11 $62.63 $75.16 $104,229 $130,270 $156,333 169 Exempt Manager Community Services Sr Program 585M $53.80 $67.24 $80.69 $111,904 $139,859 $167,835 1013 Exempt Manager Development Center 495M $60.72 $75.90 $91.08 $126,298 $157,872 $189,446 63 Exempt Manager Economic Development 220D $70.04 $87.55 $105.06 $145,683 $182,104 $218,525 44 Exempt Manager Employee Benefits 450M $60.00 $75.00 $90.00 $124,800 $156,000 $187,200 45 Exempt Manager Employee Relations & Training 235D $66.32 $82.89 $99.47 $137,946 $172,411 $206,898 93 Exempt Manager Environmental Control Program 419M $65.24 $81.54 $97.85 $135,699 $169,603 $203,528

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Job Code FLSA Status Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective Pay period inclusive of 07/01/2024 (4% Increase) Hourly Rate Annual Salary
1116 Exempt Manager Facilities 445M $57.61 $72.01 $86.42 $119,829 $149,781 $179,754 2030 Exempt Manager Finance 223D $69.58 $86.97 $104.37 $144,726 $180,898 $217,090 127 Exempt Manager Fleet 255D $58.19 $72.73 $87.28 $121,035 $151,278 $181,542 2018 Exempt Manager Human Services 540M $56.45 $70.56 $84.68 $117,416 $146,765 $176,134 32 Exempt Manager Information Technology 230D $67.79 $84.73 $101.68 $141,003 $176,238 $211,494 2006 Exempt Manager Information Technology Security 230D $64.14 $80.17 $96.21 $133,411 $166,754 $200,117 158 Exempt Manager Laboratory Services 495M $54.86 $68.57 $82.29 $114,109 $142,626 $171,163 78 Exempt Manager Library Services 565M $53.12 $66.40 $79.68 $110,490 $138,112 $165,734 92 Exempt Manager Maintenance Operations 469M $53.76 $67.19 $80.63 $111,821 $139,755 $167,710 26 Exempt Manager Transportation Planning 345M $70.44 $88.05 $105.66 $146,515 $183,144 $219,773 51 Exempt Manager Planning 415M $64.41 $80.51 $96.62 $133,973 $167,461 $200,970 103 Exempt Manager Real Property 235D $62.74 $78.42 $94.11 $130,499 $163,114 $195,749 454 Exempt Manager Recruitment Division 235D $66.32 $82.89 $99.47 $137,946 $172,411 $206,898 2011 Exempt Manager Revenue Collections 250D $59.00 $73.74 $88.49 $122,720 $153,379 $184,059 160 Exempt Manager Solid Waste 330M $68.96 $86.20 $103.44 $143,437 $179,296 $215,155 57 Exempt Manager Treasury, Debt & Investments 235D $64.68 $80.84 $97.01 $134,534 $168,147 $201,781 86 Exempt Manager Urban Forestry 436M $59.84 $74.79 $89.75 $124,467 $155,563 $186,680 178 Exempt Manager Water Quality Control Plant 205D $78.04 $97.55 $117.06 $162,323 $202,904 $243,485 39 Exempt Manager Watershed Protection 330M $70.26 $87.82 $105.39 $146,141 $182,666 $219,211 1008 Exempt Office of Emergency Services Coordinator 525M $52.26 $65.32 $78.39 $108,701 $135,866 $163,051 2024 Exempt Performance Auditor I 750P $35.53 $44.41 $53.30 $73,902 $92,373 $110,864 100 Exempt Performance Auditor II 585M $48.62 $60.77 $72.93 $101,130 $126,402 $151,694 148 Exempt Police Chief 15E $117.85 $147.31 $176.78 $245,128 $306,405 $367,702 2021 Exempt Chief Assistant City Attorney 101A $103.95 $129.93 $155.92 $216,216 $270,254 $324,314 2016 Exempt Principal Business Analyst 310M $66.81 $83.51 $100.22 $138,965 $173,701 $208,458 2029 Exempt Principal Planner 469M $54.18 $67.72 $81.27 $112,694 $140,858 $169,042 2003 Exempt Principal Management Analyst 360M $66.55 $83.18 $99.82 $138,424 $173,014 $207,626 2009 Exempt Project Manager 570M $54.92 $68.64 $82.37 $114,234 $142,771 $171,330 2012 Exempt Public Safety Communications Manager 495M $54.86 $68.57 $82.29 $114,109 $142,626 $171,163 166 Exempt Public Safety Program Manager 585M $48.62 $60.77 $72.93 $101,130 $126,402 $151,694 117 Exempt Senior Accountant 525M $58.65 $73.31 $87.98 $121,992 $152,485 $182,998 2013 Exempt Senior Business Analyst - M 420M $58.23 $72.78 $87.34 $121,118 $151,382 $181,667 187 Exempt Senior Engineer 300M $74.81 $93.51 $112.22 $155,605 $194,501 $233,418

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5 8
5 2
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Auditor
Meeting Date: November 18, 2024
Report #:2411-3739
TITLE
Policy and Services Committee Recommends that City Council Accept the City Auditor's Quarterly Status Report for July - September 2024 and Approve Work to Begin on FY2025 Task 6: Evaluation and Benchmarking

RECOMMENDATION
The Policy and Services Committee Recommends that City Council accept the City Auditor’s Quarterly Status Report for July through September 2024 and approve work to begin on Task 6:

Evaluation and Benchmarking with a budget of $21,500.

ANALYSIS
In accordance with the agreement between the City of Palo Alto and Baker Tilly Advisory Group (Baker Tilly)1, Baker Tilly is required to conduct recurring activities each year. One of these activities is Task 6: Evaluation and Benchmarking.

Various audit specific task orders are approved annually in alignment with the Annual Council Approved Audit Workplan. Task Orders approved by the Council are executed by the Policy and Services Committee Chair as the Project Manager for the Baker Tilly contract as stipulated in the contract terms.

Additionally, the Policy and Services Committee received and unanimously approved the City Auditor’s Quarterly Status Report that was presented to the Committee on October 8, 2024.2 1 Baker Tilly US, LLP, Agreement for Professional Services, C21179340; https://www.cityofpaloalto.org/files/assets/public/v/5/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220509/20220509pccsmamended-linked.pdf 2 October 8, 2024 Policy and Services Committee Item #2, Presentation of the Office of the City Auditor Quarterly Report for the Period of July - September 2024:
https://portal.laserfiche.com/Portal/DocView.aspx?id=98421&repo=r-704298fc&searchid=e0d4c19d-d6ce-4d25- 8c71-35e7768000e6
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FISCAL/RESOURCE IMPACT
Work recommended in this task order is within both the approved scope and compensation of the agreement with Baker Tilly and funding levels for Fiscal Year 2025 operating budget for the Office of the City Auditor.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the Auditor task orders are administrative activities that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5)

ATTACHMENTS
Attachment A: FY2025 Task Order 6: Evaluation and Benchmarking APPROVED BY:

Kate Murdock, City Auditor
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PROFESSIONAL SERVICES TASK ORDER
TASK ORDER FY25-06 Evaluation and Benchmarking
Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below.

CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK ORDER NO.: FY25 – Task 6

2. CONSULTANT NAME: Baker Tilly US, LLP

3. PERIOD OF PERFORMANCE: START: November 20, 2024 COMPLETION: June 30, 2025 4 TOTAL TASK ORDER PRICE: $21,000

BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD

5. BUDGET CODE_______________
COST CENTER________________
COST ELEMENT______________
WBS/CIP__________
PHASE__________

6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:

Lydia Kou, Chair of the City Council’s Policy and Services Committee

7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A)
MUST INCLUDE:
▪SERVICES AND DELIVERABLES TO BE PROVIDED
▪SCHEDULE OF PERFORMANCE
▪MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) ▪REIMBURSABLE EXPENSES, if any (with “not to exceed” amount)

8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A I hereby authorize the performance of the
work described in this Task Order.

APPROVED:

CITY OF PALO ALTO
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
I hereby acknowledge receipt and acceptance of
this Task Order and warrant that I have authority to
sign on behalf of Consultant.

APPROVED:

Baker Tilly Advisory Group, LP
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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Task Order 6: Evaluation
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Attachment A

DESCRIPTION OF SCOPE OF SERVICES
Introduction
Attachment A, the Description of Scope of Services, contains the following four (4) elements:
•Services and Deliverables To Be Provided
•Schedule of Performance
•Maximum Compensation Amount and Rate Schedule (As Applicable) •Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables
Baker Tilly’s approach to undergoing a peer review involves three (3) primary steps:
•Step 1: Preparation for a peer review
•Step 2: A peer review by and independent auditor
•Step 3: Cost per audit analysis
Step I – Preparation for a peer review
The Office of the City Auditor (OCA) will conduct a self-assessment before a peer review.

Step 2 – A peer review by a qualified organization
OCA will undergo a peer review conducted by an independent evaluator. In order to accomplish this task, OCA will:
•Request a peer review from the Association of Local Government Auditors (ALGA) •Provide documents and answer questions as requested by ALGA •Obtain a peer review report from ALGA
Step 3 – Cost per audit analysis
OCA will prepare a cost per audit analysis.

Deliverables:

Legislative documents will be prepared to present a peer review report from an independent evaluator:

Schedule of Performance
Anticipated Start Date: November 20, 2024
Anticipated End Date: June 30, 2025
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Task Order 6: Evaluation
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Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $21,000. The not-to-exceed budget is based on an estimate of 85 total project hours, of which 20 are estimated to be completed by the City Auditor.

Reimbursable Expenses
Baker Tilly anticipates no travel costs. All procedures including interviews and documentation reviews are expected to be completed remotely.

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Task Order 6: Evaluation
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: November 18, 2024
Report #:2410-3672
TITLE
FIRST READING: Adoption of an Ordinance Continuing the Temporary Program to Expand Outdoor Dining, Retail and Other Activities on Public and Private Property through June 30, 2025; Adoption of a Resolution Continuing the Pilot Parklet Demonstration Program through June 30, 2025; CEQA status - Exempt under Sections 15301, 15303, and 15304 of the CEQA Guidelines

RECOMMENDATION
Staff recommends that the City Council adopt the attached ordinance and resolution to extend the outdoor dining and parklet program for parklets and at-grade dining on the car-free portions of California Avenue and Ramona Street through June 30, 2025; or until outdoor dining standards are adopted for either or both areas, whichever comes sooner.

EXECUTIVE SUMMARY
The current ordinance that enables outdoor dining on the car-free portion of California Avenue expires December 31, 2024. The proposed ordinance and resolution enable outdoor dining to continue there and on the car-free portion of Ramona Street through June 30, 2025. These extensions ensure that outdoor dining will be able to continue on the City’s two car-free streets while outdoor dining standards are developed, brought before City Council for discussion and approval, and implemented. Additionally, staff will implement changes to the current administrative guidelines for outdoor dining on California Avenue to improve the outdoor dining experience during the upcoming winter months.

BACKGROUND
On June 10, 2024, 1 Council approved ongoing parklet program regulations. The ongoing parklet program regulations apply to most of the streets within the City’s University Avenue and California Avenue downtowns, but do not apply to the car-free portion of Ramona Street (between University Avenue and Hamilton Avenue) nor to the car-free street portion of California Avenue (between El Camino Real and Birch Street).
1 City Council, June 10, 2024; Agenda Item #AA1, SR #2406-3126 https://portal.laserfiche.com/Portal/DocView.aspx?id=72812&repo=r-704298fc Item 6
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At the June 17 Council meeting, Council approved extending the interim parklet ordinance for the car-free portion of Ramona Street through March 31, 2025 2. The interim ordinance also applies to the car-free portion of California Avenue and parklets in public parking lots; the elements of the ordinance applying to car-free California Avenue and Public Parking Lots currently expire on December 31, 2024.

ANALYSIS
The proposed ordinance and resolution preserve the status quo through June 30, 2025 so that outdoor dining can continue while standards are developed for the car-free portions of California Avenue and Ramona Street.

The only change from the current ordinance regards the use of public parking lots for outdoor dining; the current ordinance permits this through a process very similar to the parklet program, while the recommended ordinance would enable this use through a lease instead.

Parking lot conditions are different from streets with outdoor dining, making neither the existing Ongoing Parklet Standards nor the anticipated car-free street standards appropriate. Given the extremely limited circumstances for this use--there is only one as of the date of this staff report-- staff recommends using a lease to develop these parklets on a case-by-case basis with standards suiting the parking lot’s conditions. This will still facilitate the use of public space by a private entity, but staff believes a lease is a better mechanism for the particular business case. Staff has already discussed this potential approach with the one business currently using a parking lot for outdoor dining and they are amenable to developing a lease.

The actions recommended in this report are necessary to enable outdoor dining to continue while standards are developed for the car-free portions of California Avenue and Ramona Street. Staff anticipates these standards to be adopted in early to mid-2025 and is thus recommending extending the interim ordinance for both car-free streets through June 2025. This will allow adequate time for the ordinance governing outdoor dining standards to be discussed, adopted, and implemented.

Location Current Proposed
University Ave. and California
Ave. Downtowns (other than
areas listed below)
Ongoing Parklet Program
adopted by Council on
6/10/2024
No Changes
Car-free Ramona Street Interim Parklet Program
adopted by Council on
6/17/2024 – expires on
3/31/2025
Interim Parklet Program
adopted by Council on
6/17/2024 – expires on
6/30/2025
Car-free California Avenue Interim on-street outdoor
dining adopted by Council on
Interim on-street outdoor
dining adopted by Council on
2 City Council, June 17, 2024; Agenda Item #AA1, SR #2406-3148 https://portal.laserfiche.com/Portal/DocView.aspx?id=73975&repo=r-704298fc Item 6
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11/6/2023 – expires on
12/31/2024
11/6/2023 – expires on
6/30/2025
Along with the development of outdoor dining standards for the car-free portion of California Avenue, staff has identified an immediate solution to help restaurants there operate through inclement weather months. Staff will be identifying changes in the administrative guidelines for California Avenue to improve patrons’ experience during inclement weather months. These are anticipated to include allowing sidewalls to be used on tents during dining hours and allowing appropriate heating elements in conjunction with those sidewalls. Tents will continue to be limited to 400 square feet, but sidewalls will ensure some protection from the elements in inclement weather months. Restaurants can also continue to use permitted propane heaters, but these cannot be sited within five feet of any structure and cannot be used within a tent (regardless of whether that tent has sidewalls or not).

There have also been questions from restaurants about whether they can build parklets on the car-free portion of California Avenue. Parklets are most appropriate for streets that have traffic alongside dining – the parklet standards include enclosures and barriers to help protect patrons.

Parklets also require a significant capital investment. Given ongoing discussions regarding the layout and configuration of the street and the remaining need for formal City Council action to permanently close the street, such an investment might be premature. However, if a restaurant would like to build a parklet on the car-free portion of California Avenue, staff will accept and process the application based on the current Ongoing Parklet Program guidelines.

FISCAL/RESOURCE IMPACT
Fees for the parklet program are included in the Fiscal Year 2025 Adopted Operating Budget.

There are no additional fiscal impacts related to this action.

STAKEHOLDER ENGAGEMENT
Stakeholder engagement has been underway to develop outdoor dining standards for the car- free portion of California Avenue throughout 2024. Staff has met monthly with California Avenue merchants and has discussed outdoor dining standards to hear feedback and input from merchants on the street. This feedback will be incorporated into the long-term standards for California Avenue. The consultant selection for the car-free portion of Ramona Street is currently underway, and it is anticipated that stakeholder engagement for the outdoor dining standards and street design will be initiated in December, pending Council approval of the consultant contract.

ENVIRONMENTAL REVIEW
The recommended actions are categorically exempt from environmental review pursuant to CEQA guidelines sections 15301 (existing facilities), 15303 (new construction or conversion of small structures), and 15304(e) (minor alterations to land).

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ATTACHMENTS
Attachment A: Interim Ordinance of the Council of the City of Palo Alto Temporarily Continuing the Expansion of Outdoor Dining, Retail and Other Activities on Public and Private Property and Relaxing Regulations Regarding Onsite Parking, On-Sale of Alcohol, Design/Architectural Review, Permit Fees, and Alcohol Consumption in Public Places, All to Facilitate Such Outdoor Use Attachment B: Resolution of the Council of the City of Palo Alto Continuing the Pilot Parklet Demonstration Program as Continued by Resolution 10171
APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
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*NOT YET APPROVED*
119_20241030_ts24 1

Ordinance No. _____
Interim Ordinance of the Council of the City of Palo Alto Temporarily Continuing the Expansion of Outdoor Dining, Retail and Other Activities on Public and Private Property and Relaxing Regulations Regarding Onsite Parking, On-Sale of Alcohol, Design/Architectural Review, Permit Fees, and Alcohol Consumption in Public Places, All to Facilitate Such Outdoor Use.

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Findings and Declarations. The City Council finds and declares as follows:

A. On June 23, 2020, the City Council adopted Ordinance 5500, an emergency ordinance, in response to COVID -19 and its effects on local businesses. At that time and since then, county and state regulations related to COVID -19 have limited or curtailed many indoor activities, including dining, bars, retail, performances, and other recreational uses.

B. In June 2021, the City Council adopted Ordinance 5526, which amended and restated Ordinance 5500 on a non-emergency basis (among other changes).

C. On November 8, 2022, the City Council adopted Ordinance 5533, which amended and restated Ordinance 5526 with a sunset date of June 30, 2022.

D. In May 2022, t he City Council adopted Ordinance 5551, which amend ed and restate d Ordinance 5533 to extend its provisions through December 31, 2022.

E. In October and November 2022, the City Council adopted Ordinance 5572, which amended and restated Ordinance 5551 to extend its parklet provisions through June 30, 2023 and the remainder of its provisions through December 31, 2023.

F. In May 2023, the City Council adopted Ordinance 5584 to extend the parklet provisions of this ordinance until March 31, 2024. The remainder of the ordinance will sunset on December 31, 2023 as previously adopted.

G. In November 2023, t he City Council adopted Ordinance 5603 to extend the on -street dining provisions of this ordinance until December 31, 2024.

H. In March 2024, the City Council adopted Ordinance 5618 to extend the parklet provisions of this ordinance until August 1 , 2024; delay aspects of enforcement of the permanent (ongoing) parklet ordinance 5594 to November 1, 2024 for parklets in transition ; and extend parking lot uses through December 2024.

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Attachment A - Interim
Ordinance Extending
Outdoor Dining through
June 2025

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119_20241030_ts24 2

I. On June 17, 2024, the City Council adopted Ordinance 5630 to allow the provisions to continue to be applied to the area of Ramona Avenue currently closed to vehicular traffic through March 2025, and apply license fees to this area consistent with the fees imposed under the ongoing parklet program.

J. The City Council now desires to allo w this ordinance to continue through June 30, 2025, subject to Council amendment or repeal . It also now desires to end the provisions allowing certain uses of public and private parking lots authorized by previous versions of this ordinance in favor of issuing leases under existing law to businesses that do not have street frontage for a parklet or at- grade uses under this ordinance or under PAMC Ch.

12.11. SECTION 2. City Manager Authorization
The City Manager or his or her designee(s) may promulgate guidelines and implementing regulations for the uses and programs described in this Ordinance as long as such regulations do not conflict with this Ordinance.

SECTION 3. Fees and Fee Waivers for Encroachment Permits and Parking Space Closures A. The permit fees set forth in the Municipal Fee Schedule are temporarily waived for applications for encroachment permits under Palo Alto Municipal Code Section 12.12.010 and Section 12.12.020, as modified by this Ordinance, to place structures and equipment in the public right-of-way (including closed streets and sidewalks) for purposes of outdoor dining and outdoor retail sales and display of wares.

B. The parking space closure fee in the Municipal Fee Schedule collected by the Department of Planning and Development Services is temporarily waived for the use of a parking space(s) on-street or in a parking lot for purposes of outdoor dining and outdoor retail sales and display of wares as authorized through an encroachment permit, license, or agreement with the City.

C. As a requirement for a permit issued under this Ordinance, a fee shall be imposed and collected to use the right -of-way on the portion of Ramona Avenue closed to vehicular traffic. The fee imposed shall be same fee and rate established for the license fee for parklets under PAMC Chapter 12.11.

SECTION 4. Modified Review Process for Commercial Sidewalk Encroachment Permits Notwithstanding contrary provisions of PAMC Section 12.12.020, permits may be granted for commercial sidewalk encroachments for outdoor retail sales and display areas and outdoor eating areas. Permits for these purposes shall not be required to undergo and complete design review by the Planning Department described in subsection (d) of Section 12.12.020. Except as expressly modified herein, the provisions of Section 12.12.020 shall apply to commercial sidewalk encroachments.

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Attachment A - Interim
Ordinance Extending
Outdoor Dining through
June 2025

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119_20241030_ts24 3

SECTION 5. Eating and Drinking Establishments
Eating establishments, and drinking establishments may temporarily relocate some or all of their existing indoor seating capacity to outdoor seating capacity, as follows:

A. Location. Outdoor eating areas may be placed in one or more of the following areas:

1. Public streets temporarily closed by the City of Palo Alto, through issuance of an encroachment permit under PAMC Section 12.12.010;

2. Sidewalks through issuance of an encroachment permit under PAMC Section

12.12.020, as modified by Section 4 of this Ordinance;

3. In on -street parking spaces approved for use as temporary parklets , in accordance with the Pilot Parklet Demonstration Project as first approved by Council Resolution No. 9909 and continued by subsequent resolutions;

4. [Reserved].

5. Other outdoor areas on the eating /drinking establishment site not originally permitted for outdoor seating in the establishment’s approved site plan or planning entitlement ( such as landscaped areas ), through issuance of an approval by the Director of Planning, or his or her designee, in accordance with subsections C and D of this Section, below; and

6. In other areas that the Council identifies by resolution or ordinance.

B. [Reserved].

C. Application. A n application in a form approved by the Director of Planning shall be submitted to the Planning and Development Services Department to relocate some or all of an eating /drinking establishment’s permitted indoor restaurant seating to outdoor seating in privately-owned areas on the eating/drinking establishment site not originally permitted for outdoor eating. The Director of Planning is authorized to establish submittal requireme nts and procedures. Temporary Use Permit s (TUP) under PAMC Section 18.42.050 may be utilized for this purpose. A TUP issued for this purpose may be valid for a specified period longer than 45 days, notwithstanding subsection (d) of Section

18.42.050. The Planning Director may extend a TUP issued prior to the effective date of this Ordinance to be valid beyond 45 days.

D. Seating Layout Review. A Seating Layout Review is required to relocate some or all of an eating/drinking establishment’s permitted indoor seating to outdoor seating in privately- owned areas on the eating /drinking establishment site not originally permitted for outdoor eating. The Seating Layout Review shall be conducted by a transportation Item 6
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Ordinance Extending
Outdoor Dining through
June 2025

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planner, planner, and/or fire inspector who will review and either approve or require modifications to the proposed outdoor seating layout based on the following criteria:

1. Seating layout does not create a safety risk and adequate pedestrian and vehicular separation is maintained, including with movable barriers as appropriate where outdoor seating is to be placed in parking lots or on-street parking spaces.

2. Seating layout accommodates appropriate vehicle and pedestrian circulation and maintains adequate paths of travel and complies with accessibility requirements of the Americans with Disabilities Act.

3. Any tents must comply with fire codes and Palo Alto Fire Department issued standards for tents, and safety standards set forth by the National Fire Protection Association for fire-resistant tents and must include an affixed manufacturer’s label stating the tent meets NFPA requirements. A State Fire Marshal seal on the tent or a certificate is needed to prove treatment.

4. Any heaters must comply with fire codes.

5. An adequate and visible barrier is placed that clearly separates the retail area from the parking area and provides sufficient protection for patrons. Adequacy shall be defined in standards and guidelines issued by the Director of Planning.

6. Other requirements established in the standards and guidelines issued by the Director of Planning.

E. Fee. No fee will be charged for submittal and review of the Application and for conducting a Seating Layout Review.

F. Occupancy. Total seating occupancy (including all indoor and outdoor seating) shall not exceed the overall occupancy for which the restaurant is permitted.

G. Alcohol Service. Establishments that are allowed by the City to serve alcohol for onsite consumption by issuance of a conditional use permit (“CUP”) as required by PAMC Section

18.42.090 or as a legal nonconforming use, and that both have an on -sale license from the Department of Alcoholic Beverage Control (“ABC”) and are duly authorized by ABC to serve alcohol in outdoor areas, shall be allowed to serve alcohol for onsite consumption in such outdoor areas, notwithstanding any prohibition on outdoor alcohol service or consumption in the PAMC or planning entitlement issued under Title 18 (Zoning) of the PAMC. During the effecti ve period of this Ordinance, establishments that meet the preceding requirements may expand their footprint to outdoor areas without an amendment of the CUP, notwithstanding PAMC Section 18.42.090(c). Outdoor alcohol service shall be in full compliance with ABC regulations, as amended.

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Ordinance Extending
Outdoor Dining through
June 2025

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H. No Architectural Review . Notwithstanding PAMC Sections 18.77.077 and 18.76.020, architectural review shall not be required for proposed outdoor eating areas or signage related to such areas during the effective period of this Ordinance.

SECTION 6. Retail Establishments
Retail establishments may temporarily relocate some or all of their existing customer-accessible square footage to outdoor spaces as follows:

A. Location. Outdoor retail sales and display areas and outdoor eating areas may be placed in one or more of the following areas:

1. Public streets temporarily closed by the City of Palo Alto, through issuance of an encroachment permit under PAMC Section 12.12.010;

2. Sidewalks through issuance of an encroachment permit under PAMC Section

12.12.020, as modified by Section 4 of this Ordinance;

3. [Reserved]

4. Other outdoor areas on the retail establishment site not originally permitted for retail sales and display or dining in the retail establishment’s approved site plan or planning entitlement (such as landscaped areas), through issuance of an approval by the Director of Planning or his or her designee in accordance with subsections C and D of this Section, below; and

5. In other areas that the Council identifies by resolution or ordinance.

B. [Reserved].

C. Application. An application in a form approved by the Director of Planning shall be submitted to the Planning and Development Services Department to relocate some or all of a retail establishment’s customer-accessible square footage to outdoor retail sales and display in privately-owned areas on the retail establishment site not originally permitted for outdoor retail sales and display . The Director of Planning is authorized to establish submittal requirements and procedures. Temporary Use Permits (TUP) under PAMC Section 18.42.050 may be utilized for this purpose. A TUP issued for this purpose may be valid for a specified period longer than 45 days, notwithstanding subsection (d) of Section

18.42.050. The Planning Director may extend a TUP issued prior to the eff ective date of this Ordinance to be valid beyond 45 days.

D. Merchandise or Seating Layout Review. A Layout Review is required to relocate some or all of a retail establishment’s permitted indoor customer -accessible square footage to privately-owned areas on the retail establishment site not originally permitted for retail.

The Layout Review shall be conducted by a transportation planner, planner, and/or fire Item 6
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inspector who will review and either approve or require modifications to the proposed retail layout based on the following criteria:

1. The placement of the merchandise, displays, or other items does not create a safety risk and adequate pedestrian and vehicular separation is maintained, including with movable barriers as appropriate where outdoor seating is to be placed in parking lots or on-street parking spaces.

2. The layout accommodates appropriate vehicle and pedestrian circulation and maintains adequate paths of travel and complies with accessibility requirements of the Americans with Disabilities Act.

3. Any tents must comply with fire codes and Palo Alto Fire Department issued standards for tents, and safety standards set forth by the National Fire Protection Asso ciation for fire-resistant tents and must include an affixed manufacturer’s label stating the tent meets NFPA requirements. A State Fire Marshal seal on the tent or a certificate is needed to prove treatment.

4. Any heaters must comply with fire codes.

6. Other requirements established in the standards and guidelines issued by the Director of Planning.

E. Fee. No fee will be charged for submittal and review of the Application and for conducting a Layout Review.

F. No Architectural Review . Notwithstanding PAMC Sections 18.77.077 and 18.76.020, architectural review shall not be required for proposed outdoor retail areas or signage related to such areas during the effective period of this Ordinance.

SECTION 7. Compliance with Other Regulations, Orders and Approvals The uses of public and private property allowed in this Ordinance shall be conducted in compliance with any applicable state or county mandate (including executive orders and health orders), this Ordinance, Resolution No. 9909 and its successors, and all other local and state regulations, orders, and approvals, as applicable (collectively, “Applicable Law”). Any approval, allowance or permit to conduct such temporary outdoor use(s) shall be subject to revocation by the issuing City official if the use is conducted in violation of Applicable Law, or poses a threat to public health, safety or welfare.

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Ordinance Extending
Outdoor Dining through
June 2025

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SECTION 8. No Vested Rights
The outdoor uses of public and private property allowed in this Ordinance are temporary and shall be terminated upon the earlier of the date stated in the applicable permit/approval or the expiration of this interim Ordinance , unless earlier revoked by the City Manager or other authorized official (or their designee) or terminated by action of the City Council . The City may discontinue one or more, or all, of the allowed outdoor uses at any time if the City Manager or designee determines that the public health, safety or welfare warrant such action. Nothing in this Ordinance shall establish a vested right.

SECTION 9. Suspension of Prohibition on Alcohol Consumption in Lytton Plaza and Cogswell Plaza
Notwithstanding PAMC Sections 22.04.330 and 22.04.331, the City Manager is authorized to suspend the prohibition on consumption of alcoholic beverages in the parking lots adjacent to Lytton Plaza and Cogswell Plaza.

SECTION 10. Reserved.

SECTION 11. Personal Services, Indoor Recreation and Other Uses The authorized outdoor uses of public and private spaces authorized in this Ordinance may be applied to personal services, indoor recreation and other uses. Prior to authorizing these additional activities to occur, the City Manager, or his or her designee (“City Manager”), shall adopt rules, regulations, guidelines, and standards for these uses, and publish them on the City’s website.

SECTION 12. Severability
If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional.

SECTION 13. Environmental Review
The Council finds that the Ordinance is categorically exempt from CEQA under CEQA Guidelines Sections 15301 (existing facilities) , 15303 (new construction of small structures), and 15304(e) (minor temporary use of land having negligible or no permanent effects on the environment).

SECTION 14. Effective Date and Sunset Dates
This Ordinance shall be effective 31 days after adoption and remain in effect until June 30, 2025 subject to Council amendment and/or repeal.

The City may adopt regulations for the orderly wind-down of the programs implemented by these provisions, including setting deadlines for teardown and removal.

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Ordinance Extending
Outdoor Dining through
June 2025

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SECTION 15. Uncodified
This Ordinance shall not be codified.

SECTION 16. Supersedes Ordinance 5630
As of the effective date of this Ordinance, this Ordinance shall supersede Ordinance 5630, and any conflict shall be resolved in favor of this Ordinance.

SECTION 17. Fee is not a Tax
The fee in this Ordinance is a charge imposed for the use of local government property. Pursuant to Art. XIII C, Section 1(e)(4) of the California Constitution, this fee is not a tax.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

NOT PARTICIPATING:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Public Works

____________________________
Director of Planning & Development
Services
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Ordinance Extending
Outdoor Dining through
June 2025

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Resolution No. _____
Resolution of the Council of the City of Palo Alto Continuing the Pilot Parklet Demonstration Program as Continued by Resolution 10171

R E C I T A L S

A. On June 23, 2020, the City Council adopted Resolution 9909 in response to COVID-19 and its effects on local businesses. Resolution 9909 created a Pilot Parklet Demonstration Program and also permitted the City Manager to temporarily close certain streets. At that time and since then, county and state regulations related to COVID -19 have limited or curtailed many indoor activities, including dining, bars, retail, and other recreational uses.

B. On June 7, 2021, the City Council adopted Resolution 9962, which amended and rest ated Resolution 9909 on a non -emergency basis (among other changes).

C. On October 18, 2021, the City Council adopted Resolution 9992, which amended and restated Resolution 9962 to continue the pilot program until June 30, 2022.

D. On May 9, 2022, the City Council adopted Resolution 10036, which amended and restated Resolution 9962 to continue the pilot program until December 31, 2022.

E. On October 24, 2022 the City Council adopted Resolution 10081, which amended and restated Resolution 10036 to continue the pilot program until June 30, 2023.

F. On May 8, 2023, t he City Council adopted Resolution 10106, which amended and restated Resolution 10081 to continue pilot program through March 31, 2024.

G. On May 6, 2025, the City Council adopted Resolution 10158, which amended and restated Resolution 10106 to continue the pilot program through July 31, 2024.

H. On June 17, 2024, the City Council adopted Resolution 10171, which amended and restated Resolution 10158 to continue the pilot program through March 2025.

I. The City Council now desires to amend and restate Resol ution 10171 to continue the pilot program through June 2025.

Item 6
Attachment B -
Resolution Continuing
Interim Parklet Program
through June 2025

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J. This Resolution, like its predecessors, implements a temporary parklet program authorized by Ordinance 5526 and its successor ordinances.

NOW THEREFORE THE CITY COUNCIL OF THE CITY OF PALO ALTO RESOLVES AS FOLLOWS:

SECTION 1. Findings and Declarations . The Council hereby adopts the above Recitals as findings of the Council.

SECTION 2. Pilot Parklet Program and Design Requirements . The City Council hereby approves the temporary use of on-street parking spaces in Palo Alto for parklets under the Pilot Parklet Demonstration Program as first described Resolution 9909 and continued by its successor resolutions.

A. The Director of Public Wo rks/City Engineer , or his or her designee (the “Director”), is delegated the authority to exercise their discretion to approve specific parklet locations, plans, designs, materials, and standards, and amendments thereto . The plans and designs shall be signed by the Director. Any existing parklet locations, plans, designs, materials, standards, and amendments to the Parklet Standards and Requirements approved by the Director under the authority of Resolution 9909 and/or its successors shall remain valid under the authority of this Resolution unless otherwise amended, rescinded, or modified in any other way.

B. The Director is authorized to issue implementing guidelines and regulations for the Pilot Parklet Demonstration Program, and to approve amendments to the Parklet Standards and Requirements as the Director in his or her discretion deems necessary and proper. Any existing guidelines, regulations, or amendments issued by the Director under the authority of Resolution 9909 and/or its successors shall remain valid under the authority of this Resolution unless otherwise amended, rescinded, or modified in any other way.

C. A valid encroachment permit issued under Palo Alto Municipal Code Section 12.12.010 is required to operate a parklet under this Program. The Director may approve a parklet application through issuance of an Encroachment Permit , subject to the general regulations in Palo Alto Municipal Code Section 12.12.010 and the following criteria and procedures:

1. Use. Parklets shall be restricted to outdoor eating areas of eating establishments.

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Attachment B -
Resolution Continuing
Interim Parklet Program
through June 2025

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2. Application and Review. A complete application for a parklet encroachment permit shall be reviewed by City staff for a determination as to whether such application complies with the Parklet Standards and Requirements. The application shall include all information necessary for a determination on the application including, but not limited to a certificate of insurance and a hold harmless and indemnity agreement in favor of the C ity shall be submitted in accordance with the provisions of Palo Alto Municipal Code Section 12.08.120. The Director shall grant or deny the application.

3. Conditions. Conditions of approval may be imposed on parklet encroachment permits to maintain the public health, safety and welfare.

4. Revocation. The Director may revoke a parklet encroachment permit if he or she determines that the conditions of the permit, the provisions of this Resolution, or any applicable regulation, ordinance, or provision of the Municipal Code are being violated, or if the municipal use of the area is required for reasons of public health, safety, welfare or convenience. The permittee shall be notified of an intent to revoke the permit and shall be entitled to a hearing before the Dir ector whose decision shall be final.

5. Existing Permits. Any parklet encroachment permit issued under the authority of Resolution 9909 and/or its successors shall remain valid under the authority of this Resolution unless such a permit is otherwise amended, revoked, or modified in any other way.

SECTION 3. Rules and Regulations . In addition to the authority given to the Director of Public Works and his or her designee in Section 2 of this Resolution, the City Manager is authorized to enact any rule or regulation or implementing guidelines to effectuate and implement this Resolution.

SECTION 4. Compliance with Other Regulations, Orders and Approvals . The uses of public and private property allowed in this Resolution shall be conducted in compliance with any applicable state or county mandate (including executive orders and health orders), and all other local, county, and state regulations, orders, and approvals, as applicable (collectively, “Applicable Law”). Any approval, allowance or permit to conduct such temporary outdoor use(s) shall be subject to revocation by the issuing City official if the use is conducted in violation of Applicable Law, or poses a threat to public health, safety or welfare.

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Attachment B -
Resolution Continuing
Interim Parklet Program
through June 2025

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SECTION 5. No Vested Rights . The uses allowed in this Resolution are temporary and shall be terminated upon the earlier of the date stated in the applicable permit/approval or the expiration of this Resolution, unless earlier revoked by the City Manager or other authorized official (or their designee) or terminated by action of the City Council. The City may discontinue one or more, or all, of the allowed uses at any time if the City Manager or designee determines that the public health, safety or welfare warrant such action. Nothing in this Resolution shall establish a vested right.

SECTION 6. The Council finds that this Resolution is categorically exempt from CEQA under CEQA Guidelines Sections 15301 (existing facilities) and 15304(e) (minor temporary use of land having negligible or no permanent effects on the environment).

SECTION 7. This Resolution supersedes Resolution 10171. Any conflict between this Resolution and Resolution 10171 shall be resolved in favor of this Resolution.

//
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Attachment B -
Resolution Continuing
Interim Parklet Program
through June 2025

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SECTION 8. This Resolution shall become effective immediately upon approval and shall remain in effect until June 30 , 202 5 unless otherwise modified, repealed or extended by the City Council.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

__________________________ _____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

__________________________ _____________________________ Assistant City Attorney City Manager

_____________________________
Director of Public Works

_____________________________
Director of Planning and
Development Services
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Attachment B -
Resolution Continuing
Interim Parklet Program
through June 2025

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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: November 18, 2024
Report #:2411-3765
TITLE
SECOND READING: Ordinance of the Council of the City of Palo Alto Renewing the Military Equipment Use Policy in Compliance with Govt. Code Section 7070 et seq. (2024‐2025) (FIRST READING: November 4, 2025 PASSED 7-0)

BACKGROUND
The City Council heard this item on November 4, 2024 for a first reading and approved it on a 7- 0 vote. No changes were made to the ordinance, and it is now before the City Council for a second reading.

ATTACHMENTS
Attachment A - Ordinance Renewing the Military Equipment Use Policy in Compliance with Govt. Code Section 7070 et seq.(2024‐2025)
APPROVED BY:

Mahealani Ah Yun, City Clerk
Item 7
Item 7 Staff Report

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1 Ordinance No. _____

Ordinance of the Council of the City of Palo Alto Renewing the Military Equipment Use Policy in Compliance with Govt. Code Section 7070 et seq. (2024‐2025)

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Findings and declarations. The City Council finds and declares as follows:

1. In 2021, the California Legislat ure and the Governor approved A B 481, which requires the City Council to approve a “Military Equipment Use Policy” in order to acquire, use, or seek funds for the use of certain equipment used by law enfo rcement. AB 481 is codified at Gov. Code section 7070 et seq.

2. The City Council adopted Ordina nce 5562 in September 2022 to a pprove the City’s first Military Equipment Use Policy. The Ordinance was renewed on November 13, 2023 in Ordinance 5604.

3. A s r e q u i r e d b y G o v t . C o d e s e c t i o n 7 0 7 2 , t h e P a l o A l t o P o l i c e D epartment submitted an annual military equipment report for each type of military equipment approved by the City Council. This report was posted publicly on the Depar tment’s website in September 2024. The Department also held a community engagement meeting on October 9, 2024.

4. As required by Govt. Code sectio n 7071, the City Council now in tends to renew and restate Ordinance 5604 to implement the Military Equipment Use Policy for another year.

SECTION 2. The City Council makes the foll owing required findings in compliance with Gov. Code section 7071(d)(1) and (e) as to the attached Military Equipment Use Policy:
(A) The military equipment is nec essary because there is no rea sonable alternative that can achieve the same objective of officer and civilian safety. (B) The proposed military equipment use policy will safeguard t he public’s welfare, safety, civil rights, and civil liberties.
(C) The equipment is reasonably cost effective compared to avai lable alternatives that can achieve the same objective of officer and civilian safety. (D) Prior military equipment use complied with the military equ ipment use policy that was in effect at the time.

SECTION 3. The City Council hereby approves the attached Military Equipme nt Use Policy incorporated as Exhibit A to this ordinance.

SECTION 4. If any section, subsection, sentence, clause, or phrase of th is Ordinance is for any reason held to be invalid or unconstitutional by a deci sion of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.

The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequ ently declared invalid or unconstitutional.

Item 7
Attachment A - ORD
Renewing the Military
Equipment Use Policy in
Compliance with Govt.

Code Section 7070 et seq.
(2024-2025)

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2 SECTION 5. The Council finds that adoption of this Ordinance is not a “p roject” within the meaning of CEQA.

SECTION 6. This Ordinance shall be effective on the thirty‐first date aft er the date of its adoption. This Ordinance shall then supersede Ordinance 56 04, and any conflict shall be resolved in favor of this Ordinance.

SECTION 7. This Ordinance shall be uncodified.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

NOT PARTICIPATING:

ATTEST:

____________________________ ________ ____________________ C i t y C l e r k M a y o r

APPROVED AS TO FORM: APPROVED:

____________________________ ________ ____________________ A s s i s t a n t C i t y A t t o r n e y C i t y M a n a g e r

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Chief of Police

Item 7
Attachment A - ORD
Renewing the Military
Equipment Use Policy in
Compliance with Govt.

Code Section 7070 et seq.
(2024-2025)

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3 Exhibit A
Palo Alto Police Department Military Equipment Use Policy (Updated October 2024)

PURPOSE

This policy is provided to fulfill the obligations set forth in Assembly Bill No. 481 as codified at Govt. Code section 7070 et seq., and establishes guidelines for the acquisition, funding, use and reporting of “military equipment”, as the term is defined in Government Code section 7070.

These obligations include but are not limited to seeking approval on specific items deemed, by statute, to be military equipment and requirements related to compliance, annual reporting, cataloging, and complaints regarding these items.

PROCEDURE

A. DEFINITIONS

1. Governing Body – The City Council of the City of Palo Alto.

2. Military Equipment – Shall have the same meaning as defined by California Government Code § 7070(c).

B. GOVERNING BODY APPROVAL

1. The Department shall obtain approval of the governing body prior to engaging in any of the following activities:
a. Requesting military equipment made available pursuant to Section 2576a of Title 10 of the United States Code.
b. Seeking funds for military equipment including, but not limited to, applying for a grant, soliciting or accepting private, local, state, or federal funds, in‐kind donations, or other donations or transfers.
c. Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
d. Collaborating with another law enforcement agency in the deployment or other use of military equipment within the territorial jurisdiction of the governing body. e. Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body pursuant to general order f. Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of, military equipment.
g. Acquiring military equipment through any means not provided in a. through f.

2. In seeking the approval of the governing body, the Department shall comply with Gov. Code § 7071, which requires that the Department submit a proposed military equipment use policy, or subsequent amendments, to the City Council and the public via the law enforcement agency’s internet website at least 30 days prior to any public hearing concerning the military equipment at issue.

Item 7
Attachment A - ORD
Renewing the Military
Equipment Use Policy in
Compliance with Govt.

Code Section 7070 et seq.
(2024-2025)

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4 3. The governing body must be able to make the following findings in approving the Military Equipment Use Policy as required by Gov. Code § 7071(d)(1) in order to use military equipment:

a. The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety. b. The proposed military equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties.
c. If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety. d. Prior military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.

C. MILITARY EQUIPMENT ANNUAL REPORT

The Department shall submit an annual military equipment report to the governing body that addresses each type of military equipment possessed by the Department in compliance with Gov. Code § 7072.

1. The Department shall also make each annual military equipment report publicly available on its internet website for as long as the military equipment is available for use.

2. The annual military equipment report shall, at a minimum, include the following information for the immediately preceding calendar year for each type of military equipment:
a. A summary of how the military equipment was used and the purpose of its use. b. A summary of any complaints or concerns received concerning the military equipment.
c. The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. d. The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. e. The quantity possessed for each type of military equipment. f. If the Department intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.

The Department will document each use of military equipment and, via administrative review, ensure compliance with this policy. Any instances of non‐compliance will be reported to the City Council via the annual military equipment report, and to the Independent Police Auditor where appropriate.

Item 7
Attachment A - ORD
Renewing the Military
Equipment Use Policy in
Compliance with Govt.

Code Section 7070 et seq.
(2024-2025)

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5 D. MILITARY EQUIPMENT USE POLICY COMPLAINTS AND CONCERNS

Pursuant to Gov. Code § 7070(d)(7), members of the public may register complaints or concerns or submit questions by any of the following means:

1. Via email to: [email protected]

2. Via phone call to: (650) 329‐2406

3. Via mail sent to: Palo Al to Police Department
Attn: Personnel and Training
275 Forest Avenue
Palo Alto, CA 94301
The Department is committed to responding to complaints, concerns and/or questions received through any of the above methods in a timely manner.

E. MILITARY EQUIPMENT TRAINING

Military equipment shall only be used after applicable training, including any course required by the Commission on Peace Officer Standards and Training (P.O.S.T.), has been completed, unless exigent circumstances arise.

F. MILITARY USE EQUIPMENT POLICY CONTENTS

All military use equipment kept and maintained by the Department shall be cataloged in a way which addresses each of the following requirements in compliance with Gov. Code § 7070(d):

1. A description of each type of military equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the military equipment.

2. The purposes and authorized uses for which the law enforcement agency or the state agency proposes to use each type of military equipment.

3. The fiscal impact of each type of military equipment, including the initial costs of obtaining the equipment and estimated annual costs of maintaining the equipment.

4. The legal and procedural rules that govern each authorized use.

5. The training, including any course required by the Commission on Peace Officer Standards and Training, that must be completed before any officer, agent, or employee of the law enforcement agency or the state agency is allowed to use each specific type of military equipment to ensure the full protection of the public’s welfare, safety, civil rights, and civil liberties and full adherence to the military equipment use policy.

6. The mechanisms to ensure compliance with the military equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy.

Item 7
Attachment A - ORD
Renewing the Military
Equipment Use Policy in
Compliance with Govt.

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Qualifying Equipment Owned/Utilized by the Department

Equipment Type: 37mm Less Lethal Launchers and Kinetic Energy Munitions ‐ CA Gov’t Code §7070(c)(14)
Quantity Owned/Sought: 30 owned Lifespan: Approximately 15 years Equipment Capabilities: The 37MM Less Lethal Launcher is capable of firing 37MM Kinetic Energy and Chemical Agent Munitions. Palo Alto PD only possesses “KO1” impact baton rounds in its inventory.

Manufacturer Product Description: Sage Control Ordinance 37MM launchers are rugged, reliable, and simple to operate less lethal launchers. These launchers are light weight, versatile and used worldwide by police officers. The 37MM launcher family of products is available in single‐shot (“Ace”), double‐shot (“Deuce”), or magazine fed configurations. Palo Alto PD possesses the “Ace” and “Deuce” models.

Purpose/Authorized Uses: The 37MM Less Lethal Launchers and Kinetic Energy Munitions are intended for use as a less lethal use of force option. Kinetic energy projectiles, when used properly, are less likely to result in death or serious physical injury and can be used in an attempt to de‐escalate a potentially deadly situation.

Circumstances appropriate for deployment include, but are not limited to, situations in which:

(a) The suspect is armed with a weapon and the tactical circumstances allow for the safe application of approved munitions.
(b) The suspect has made credible threats to harm him/herself or others. (c) The suspect is engaged in riotous behavior or is throwing rocks, bottles or other dangerous projectiles at people and/or officers.
(d) There is probable cause to believe that the suspect has already committed a crime of violence and is refusing to comply with lawful orders.

Fiscal Impacts: The initial cost of this equipment was approximately $27,000. The ongoing costs for munitions will vary and maintenance is conducted by departmental staff.

Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy §§ 300 (Use of Force) and 308 (Control Devices and Techniques). Use will continue to be subject to an administrative Use of Force review.

Training Required: Officers must complete a department certified 37mm course as well as regular training and qualifications as required by law and policy.

Other Notes: None.

Equipment Type: Long Range Acoustic Device (LRAD) ‐ CA Gov’t Code §7070(c)(13) Quantity Owned/Sought: 1 Lifespan: Unknown.

Equipment Capabilities: LRAD systems are a type of Acoustic Hailing Device (AHD) used to send messages over long distances. LRAD systems produce much higher sound levels (volume) than normal loudspeakers or megaphones, and can be more narrowly directed.

Manufacturer Product Description: LRAD systems are a type of Acoustic Hailing Device (AHD) used to send messages over long distances. LRAD systems produce much higher sound levels Item 7
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7 (volume) than normal loudspeakers or megaphones. Over shorter distances, LRAD signals are loud enough to cause pain in the ears of people in their path.

Purpose/Authorized Uses: Primarily used to communicate, from a safe distance, with armed and/or barricaded subjects, for the purpose of negotiation. Can also be used in furtherance of search and rescue operations, and to communicate lawful dispersal orders.

Fiscal Impacts: The initial cost of this equipment was approximately $10,000. The ongoing cost for maintenance will vary.

Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy § 414 (Hostage and Barricade Incidents). Use will be subject to an administrative review.

Training Required: The Palo Alto Police Department provides internal training for staff members prior to allowing them to use this equipment.

Other Notes: This equipment is maintained and operated by members of the Department’s Crisis Negotiation Team (CNT).

Equipment Type: Diversionary Devices and Chemical Agents (tear gas) and pepper balls ‐ CA Gov’t Code §7070(c)(12)
Quantity Owned/Sought: 108 Lifespan: 5 years
Equipment Capabilities: Capable of creating auditory/visual distractions, and/or deploying tear gas or pepper chemical to distract potentially dangerous individuals.

Manufacturer Product Description:

The Palo Alto Police Department uses Diversionary Devices and Chemical Agents produced by Defense Technology (DT) and Combined Tactical Systems (CTS). All Chemical Agents utilized by PAPD contain CS (Orthochlorobenzalmalononitrile) or OC (Oleoresin Capsicum).

Diversionary Devices:

1. Mini‐Bang (CTS‐7290M)
a. The Model 7290M Flash‐Bang exhibits all of the same attributes of its larger counterpart but in a smaller and lighter package. Weighing in at just 15 ounces the new 7290M is approximately 30% lighter than the 7290 but still has the same 180db output of the 7290 and produces 6‐8 million candela of light.

Chemical Agents:

1. CS 37mm Liquid Ferret Barricade Round (CTS‐3330)
a. 3330 – Liquid CS filled projectile penetrates intermediate barriers and delivers irritant agents into an adjacent room.

2. CS 37mm Liquid Ferret Barricade Round (DT‐1162)
a. The Ferret® 37 mm CS Round is a frangible projectile filled with chemical agent. Upon impacting the barrier, the nose cone ruptures and instantaneously delivers the .16 oz. agent payload inside a structure.

3. CTS 5230b Baffled CS
a. The design of the Baffled CS allows the contents to burn within an internal can and external baffling, and disperse the agent safely with reduced risk of fire.

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8 and/or dislodge a barricaded subject. This grenade can be hand thrown or launched from a fired delivery system.

4. CTS 5230 Riot CS
a. The CTS Riot CS is specifically designed for outdoor use. It discharges a high volume of smoke and chemical agent through multiple emission ports. This grenade can be hand thrown or launched from a fired delivery system.

5. CS Riot Control (DT‐1082)
a. The Riot Control CS Grenade is designed specifically for outdoor use in crowd control situations with a high volume continuous burn. . This grenade can be used to conceal tactical movement or to route a crowd. The volume of smoke and agent is vast and obtrusive. .

Smoke:

1. CTS 5210 White Smoke
a. The CTS 5210 White Smoke Grenade is designed specifically to conceal tactical movement or to route a crowd. The volume of non‐irritant smoke and agent is vast and obtrusive.

PepperBall:

Less lethal launchers are designed for minimum time between launches and quick reload speed, so whether in a crowd control scenario, tactical or even Mobile Field Force situation, the PepperBall system offers flexibility, safety and security, all within one platform. Each launcher is air powered, with either carbon dioxide (CO2), nitrogen, or compressed air powering the launch of projectiles.

Purpose/Authorized Uses: creating explosive distractions, and/or deploying chemical agents.

Fiscal Impacts: The initial cost of the Pepperball equipment was approximately $7,920. The ongoing costs for munitions will vary and maintenance is conducted by departmental staff.

The initial cost of the distraction devices and chemical agents was approximately $2,400. The ongoing costs for munitions will vary and (minimal, if any) maintenance is conducted by departmental staff.

Legal/Procedural Rules Governing Use Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy §§ 300 (Use of Force), 308 (Control Devices and Techniques), and 408 (Crisis Response Unit).Use of tear gas or pepper balls will continue to be subject to an administrative Use of Force review. Use of distraction devices will be subject to an administrative review to ensure policy compliance.

Training Required: A P.O.S.T. certified Control Devices and Techniques Department chemical agent and distraction device instructor provides internal training for all members of the SWAT team prior to allowing them to use flashbang grenades or tear gas. The Department provides internal training for all members prior to allowing them to use pepper balls.

Other Notes: Distraction devices and chemical agents are exclusively maintained and operated by members of the Department’s Special Weapons and Tactics Team (SWAT).

Equipment Type: Bolt Action Rifle and Ammunition ‐ CA Gov’t Code §7070(c)(10) Quantity Owned/Sought: 1 owned Lifespan: Approximately 15 years Equipment Capabilities: Accuracy International rifle is capable of firing a 7.62mm/.308 cal projectile bullet.

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9 Manufacturer Product Description: Accuracy International (AI) Accuracy Tactical bolt action rifle .308 Winchester/7.62mm NATO.

1. 20" barrel threaded 5/8x24

2. Nightforce:C622 Scope .250 MOA

3. AI Adjustable cheek piece

4. AI Two‐stage trigger

5. AI 10‐round .380 caliber magazine

6. AI Three‐position safety

Purpose/Authorized Uses: This rifle is authorized for use by a specially‐trained, SWAT marksman only and may be deployed in any circumstance where the officer can articulate a reasonable expectation that the rifle may be needed. Examples of some general guidelines for deploying the rifle may include but are not limited to:

1. Situations where the officer reasonably anticipates an armed encounter.

2. When the officer is faced with a situation that may require accurate and effective fire at long range.

3. Situations where an officer reasonably expects the need to meet or exceed a suspect's firepower.

4. When an officer reasonably believes that there may be a need to fire on a barricaded person or a person with a hostage.

5. When an officer reasonably believes that a suspect may be wearing body armor.

6. When authorized or requested by a supervisor.

Fiscal Impacts: This equipment was purchased by the Palo Alto Police Department at an initial cost of $6500.00. The ongoing costs for ammunition will vary and maintenance is conducted by departmental staff.

Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy §§ 300 (Use of Force), 312 (Firearms), and 408 (Crisis Response Unit).Each use will continue to be subject to an administrative Use of Force review.

Training Required: In addition to CA P.O.S.T. certified patrol rifle and CA P.O.S.T. certified standard SWAT Operator training, SWAT marksmen must successfully complete a CA P.O.S.T. certified course as well as regular SWAT marksmanship training and qualifications as required by law and policy.

Other Notes: None.

Qualifying Equipment Owned/Utilized by Palo Alto OES

Equipment Type: Command and control vehicle – CA Gov’t Code §7070(c)(5) Quantity Owned/Sought: 1 Lifespan: Approximately 20 years Equipment Capabilities: The City of Palo Alto Office of Emergency Services (OES) has a Mobile Emergency Operations Center (MEOC) vehicle.

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10 Manufacturer Product Description: The MEOC is built on a 40’ Freightliner chassis, 2010 Model Year.

Purpose/Authorized Uses: The MEOC serves as a resource for public safety and coordinates with other such vehicles operated by other agencies. It is deployed to “all hazards” ranging from natural disasters, wildfires, crime, special events, and planned and unplanned disruptions to 9‐1‐1 and Emergency Operations Center systems and facilities.

Fiscal Impacts: The MEOC was acquired in approximately 2010 with grant funding of $300,000 and City funding of $375,000. The ongoing costs for maintenance and operation will vary and most maintenance is conducted by City staff.

Legal/Procedural Rules Governing Use: It is the policy of OES to use the MEOC in accordance with California State law regarding the operation of motor vehicles. Furthermore, since the MEOC is grant‐funded and since the MEOC is a rare resource, the City may support mutual aid with the MEOC (for example wildfire response). Use will be subject to an administrative review to ensure policy compliance.

Training Required: The MEOC is a highly complex system. City staff are provided with requisite training and licensing, depending on their role in supporting the MEOC.

Other Notes: The MEOC is not a “military vehicle” but could support coordination with the National Guard, FEMA, and other cooperating agencies after a major earthquake or other disaster.

Qualifying Equipment known to be owned and/or utilized by law enforcement units with which the Palo Alto Police Department c ollaborates and/or participate s for law enforcement purposes

Equipment Type: Unmanned Aircraft Systems (UAS/Drones) – CA Gov’t Code §7070(c)(1) Quantity Owned/Sought: None (outside owned) Lifespan: Various Equipment Capabilities: Remotely piloted aerial vehicles capable of providing live and recorded video images captured from aerial positions, including images enhanced by Forward Looking Infrared (FLIR) and optical zoom lenses.

Manufacturer Product Description: Various. Dependent upon the availability of mutual aid equipment and personnel at the time of need.

Purpose/Authorized Uses: UAS/Drones may be utilized to enhance the Department’s mission of protecting lives and property when other means and resources are not available or are less effective. Uses may include but are not limited to: search and rescue; suspect apprehension; crime scene documentation; tactical operations; scene security; hazard monitoring, identification and mitigation; response to emergency calls; crisis communications; legally authorized surveillance.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency.

Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, Federal Aviation Administration (FAA) regulations, and PAPD policy, including but not limited to PAPD policy §§ 322 (Search and Seizure) and 352 (Outside Agency Assistance).Federal Aviation Administration (FAA) regulations . Absent a warrant or exigent circumstances, operators and observers shall adhere to FAA altitude regulations and shall not intentionally record or transmit images of any location where a person would have a reasonable expectation of privacy (e.g., residence, yard, enclosure). Operators and observers shall take reasonable precautions to avoid inadvertently recording or transmitting images of Item 7
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11 areas where there is a reasonable expectation of privacy. Upon mutual aid or other request from PAPD, UAS/Drone will be operated by the deploying agency’s staff pursuant to their own policies and review.

Training Required: Prior to piloting any UAS/Drone staff members must secure an FAA Remote Pilot License and complete all training required by our FAA COA.

Other Notes: None.

Equipment Type: Unmanned, remotely piloted, powered ground vehicles ‐ CA Gov’t Code §7070(c)(1)
Quantity Owned/Sought: None (outside owned) Lifespan: Various Equipment Capabilities: Robots are capable of being remotely navigated to provide scene information and intelligence in the form of video and still images transmitted to first responders.

Manufacturer Product Description: Various. Dependent upon the availability of mutual aid equipment and personnel at the time of need.

Purpose/Authorized Uses: To enhance the safety of potentially dangerous situations by providing first responders with the ability to capture video and still images of hazardous areas prior to, or in lieu of, sending in personnel.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency.

Legal/Procedural Rules Governing Use: Absent a warrant or exigent circumstances, operators and observers shall adhere to all applicable privacy laws and shall not intentionally record or transmit images of any location where a person would have a reasonable expectation of privacy (e.g., residence, yard, enclosure). Use governed by applicable State, Federal and Local law, Federal Aviation Administration (FAA) regulations, and PAPD policy, including but not limited to PAPD policy §§ 322 (Search and Seizure) and 352 (Outside Agency Assistance). Upon mutual aid or other request from PAPD, vehicle will be operated by deploying agency’s staff pursuant to their own policies and review.

Training Required: Subject to the policies of the deploying agency.

Other Notes: While the Palo Alto Police Department does not own or operate this equipment, it could be deployed to an incident within city limits.

Equipment Type: Wheeled vehicles that have a breaching apparatus attached ‐ CA Gov’t Code §7070(c)(3)
Quantity Owned/Sought: None (outside owned) Lifespan: Various Equipment Capabilities: Capable of breaching doors, gates, and other points of entry; facilitating the safe transport of officers or civilians facing an armed suspect.

Manufacturer Product Description: Various. Dependent upon the availability of mutual aid equipment and personnel at the time of need.

Purpose/Authorized Uses: Breaching doors, gates, and other points of entry. Safely transporting police personnel or evacuating civilians, when facing with an armed suspect.

Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency.

Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy §§ 322 (Search and Seizure) and 352 (Outside Agency Assistance). Upon mutual aid or other request from PAPD, vehicle will be operated by deploying agency’s staff pursuant to their own policies and review.

Training Required: Subject to the policies of the deploying agency.

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12 Other Notes: While the Palo Alto Police Department does not own or operate this equipment, it could be deployed to an incident within city limits.

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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: November 18, 2024
Report #:2411-3766
TITLE
SECOND READING: Ordinance of the Council of the City of Palo Alto Amending the Fiscal Year 2025 Municipal Fee Schedule to Amend Existing Fees for City’s Palo Alto Link OnDemand Transit Service (FIRST READING: November 4, 2024 PASSED 7-0)

ATTACHMENTS
Attachment A - Ordinance Amending the Fiscal Year 2025 Municipal Fee Schedule to Amend Existing Fees for City's Palo Alto Link On-Demand Transit Service APPROVED BY:

Mahealani Ah Yun, City Clerk
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1 115_20240822_ts24
Ordinance No.

Ord
inance of the Council of the City of Palo Alto Amending the Fiscal Year 2025 Municipal Fee Schedule to Amend Existing Fees for City’s Palo Alto Link On- Demand Transit Service
The
Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Findings and Declarations. The City Council finds and declares as follows:

A. Thro
ugh this ordinance, the City desires to increase on-demand transit service fees for its Palo Alto Link service in October 2024. The City will remove discounted fares, increase Monthly Passes to $130 per month, charge a fee from free up to $4.00 per passenger trip, and increase Weekly Passes to $40.00 per week.

B. The i
ncrease of fees will assist the City in continuing sustainable operations of the Palo Alto Link after the successful majority grant-funded pilot in which the VTA provided $2 million has concluded.

SECTION 2. The Council of the City of Palo Alto amends the Fiscal Year 2025 Municipal Fee Schedule by adopting the amended fees for on-demand transit as set forth in Exhibit “A” and incorporated here by reference.

SECTION 3. The fees in this Ordinance are for a specific government service provided directly to the payor that is not provided to those not charged and which does not exceed the reasonable costs to the local government of providing the service or product. Pursuant to Art.

XIII C, Section 1(e)(2) of the California Constitution, this fee is not a tax.

SECTION 4. The Council finds that this ordinance is not a “project” under CEQA because it has no potential for resulting in either a direct or reasonable foreseeable indirect change in the environment.
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SECTION 5. This ordinance shall be effective upon adoption as an amendment to the City’s FY25 budget and shall be implemented within 60 days of adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager

Chief Transportation Official

Director of Administrative
Services
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Demand Transit Service

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Attachment A

Fiscal Year 2025 Municipal Fee Schedule
Office of Transportation Fees

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: November 18, 2024
Report #:2410-3732
TITLE
FIRST READING: Adoption of an Ordinance Amending the Municipal Fee Schedule to Modify the Calculation for Park, Community Center and Library Development Impact Fees From a per Unit to per Square Feet Basis for Residential Development. CEQA Status: Exempt Pursuant to 15061(b)(3).

RECOMMENDATION
Staff recommends that City Council:

1. Review the attached Supplement to the Development Impact Fee Justification Study (Attachment A); and

2. Adopt an ordinance amending the City’s FY2025 Adopted Municipal Fee Schedule to update the Parks, Community Center, and Library impact fees from a per unit to per square feet basis for residential development (Attachment B).

EXECUTIVE SUMMARY
Based on prior Council direction, staff recommends that the City Council adopt an ordinance amending the FY2025 Municipal Fee Schedule to modify the calculation of Park, Community Center, and Library Development Impact Fees for residential development from a per dwelling unit basis to a per square foot basis. This change is in response to Assembly Bill (AB) 602, which mandates that impact fees be charged on a square footage basis, unless the City makes specified findings explaining why square footage is not an appropriate metric. This amendment aligns with the City’s newly certified Housing Element and addresses Program 3.1: Fee Waivers and Adjustments, aimed at balancing the need for public facility funding with the promotion of housing affordability. The new fee structure, if adopted, would take effect in early 2025.

On September 23, 2024, this report was pulled from the City Council consent calendar by Councilmembers Lythcott-Haims, Veenker, and Mayor Stone based in part on public written comments received prior to the meeting (Attachment C). The report has been updated to provide additional context and a modified staff recommendation.

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BACKGROUND
Under the Mitigation Fee Act (AB 1600), cities can charge new development for its relative share of the cost to fund the acquisition of land and improvements to public facilities. These fees are established based on the nexus between impacts caused by new development and the improvements needed to mitigate those impacts that would be funded by the established fee.

In 2020, the Community Services Department retained DTA, formerly David Taussig & Associates, to prepare a nexus study to update the Parks, Community Center, and Library Impact Fees. The initial study1 was implemented in August 2021, and in May 2022, DTA prepared and presented a supplemental analysis2 to address several policy items based on Finance Committee’s request. This included direction to update the fees from the initial analysis to address new legislation, AB 602, which came into effect in January 2022. AB 602 was designed to provide new statewide requirements for local jurisdictions seeking to impose development impact fees and articulated additional guidance on how local agencies comply with their impact fee obligations.

In June 20223, Council directed staff to convert residential Parks, Community Center, and Library Impact Fees from the existing per unit basis, to a per square foot basis. The current report and staff recommendations respond to the specific, discrete direction provided by Council on that date.

In February 2024, the Planning and Development Services Department engaged DTA to prepare the conversion analysis.

In April 2024, the Supreme Court of the United States issued an opinion in Sheetz v. County of El Dorado, California, applying the “unconstitutional conditions doctrine“ to development impact fees, creating some uncertainty over the level of scrutiny courts will apply to such fees going forward.

ANALYSIS
Prior to the initial nexus study that was implemented in August 2021, the City’s Park, Community Center, and Library Development Impact fees had not been updated since their inception in 2001. As a result of the updated nexus study and Council adopted fee levels, beginning FY2022, Palo Alto developments were subject to a substantial increase in the Parks Impact Fee driven by the current fair market value of land as well as comparatively modest increases to the Community Center and Library Impact Fees (Table 1). 1 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2021/id-12163.pdf
2 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/finance- committee/2022/20220503/20220503pfcslinked.pdf
3 https://www.cityofpaloalto.org/files/assets/public/v/6/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220613/20220613pccsm-final-amended-linked.pdf#page=53 Item 9
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Table 1: Impact of Initial Nexus Study on Development Impact Fees - FY2021 vs FY2022 Year Residential Land Use
Type
Parks
(Per Unit)
Community
Center (Per Unit)
Library
(Per Unit) Total
Single-Family $ 13,103 $ 3,499 $ 1,187 $ 17,789 Single-Family > 3,000 SF $ 19,565 $ 5,086 $ 1,766 $ 26,417 Multi-Family ≤ 900 SF $ 4,337 $ 1,128 $ 390 $ 5,855 FY2020 -
2021
Multi-Family > 900 SF $ 8,577 $ 2,235 $ 710 $ 11,522 Single-Family per unit $ 57,420 $ 4,438 $ 2,645 $ 64,503 FY2021 - 2022 Multi-Family per unit $ 42,468 $ 3,283 $ 1,956 $ 47,707 Source: City of Palo Alto, FY2021 and FY2022 Municipal Fee Schedule Conversion of residential impact fees aligns with AB 602 and the relative impacts of new residential development more proportionately based on development size rather than a single amount per dwelling unit, regardless of size. For further details on the nexus study methodology and guidance on AB 602, refer to Attachment A: Second Supplement to the Development Impact Fee Justification – Assembly Bill (“AB”) 602 Compliance.

Using Palo Alto’s building permit data from 2013 to 2024, DTA calculated the average residential square footage for single-family and multi-family residential units constructed in the Palo Alto within the last 11 years. The average square footage per single-family and multi-family unit was determined to be 3,602 and 1,124 square feet, respectively. Based on these average unit sizes, DTA converted the existing Park, Community Center, and Library Impact Fee from a per unit to per residential square foot fee.

Table 2: FY2025 Council-Approved Development Impact Fees – Current Fees Current Fees Parks Community
Center Library Total
Single-Family (Per Unit) $ 67,650 $ 5,229 $ 3,116 $ 75,995 Multi-Family (Per Unit) $ 50,034 $ 3,868 $ 2,304 $ 56,206 DTA’s analysis resulted in two frameworks for implementation – distinct rates and a consolidated rate. Staff recommend the distinct rates, however, as a more accurate and equitable reflection of impacts caused by new development.

A distinct residential fee structure for single-family and multi-family fees is generally used when (1) there is sufficient building permit data available and (2) a jurisdiction can anticipate the number of projected units per residential land use type. When a jurisdiction has sufficient data available, the distinct fee structure is preferred because it more proportionately reflects the size and impact of the residential units. Table 3 provides the recommended fees in this framework as well as sample impact fees based on residential land use type and square footage.

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Table 3: Framework 1 – Distinct Rates and Sample Impact Fees Distinct Fees Parks Community
Center Library Total
Single Family (Per SF) $ 18.78 $ 1.45 $ 0.87 $ 21.10 3000 $ 56,340.00 $ 4,350.00 $ 2,610.00 $ 63,300.00 3602 $ 67,645.56 $ 5,222.90 $ 3,133.74 $ 76,002.20 4000 $ 75,120.00 $ 5,800.00 $ 3,480.00 $ 84,400.00 Multi-Family (Per SF) $ 44.50 $ 3.44 $ 2.05 $ 49.99 850 $ 37,825.00 $ 2,924.00 $ 1,742.50 $ 42,491.50 1124 $ 50,018.00 $ 3,866.56 $ 2,304.20 $ 56,188.76 1400 $ 62,300.00 $ 4,816.00 $ 2,870.00 $ 69,986.00 A single consolidated residential fee structure is generally used when (1) a jurisdiction may not have sufficient building permit data or (2) may not be able to project the type of future development. Table 4 illustrates what a fee could be in this framework as well as sample impact fees based on residential square footage. This structure decreases the fee paid by the typical multi-family unit and increases the fee paid by the typical single-family unit.

Table 4: Framework 2 – Consolidated Rate and Sample Impact Fees Consolidated Fees Parks Community
Center Library Total
Residential (Per SF) $ 22.68 $ 1.75 $ 1.04 $ 25.47 850 $ 19,278.00 $ 1,487.50 $ 884.00 $ 21,649.50 1124 $ 25,492.32 $ 1,967.00 $ 1,168.96 $ 28,628.28 2000 $ 45,360.00 $ 3,500.00 $ 2,080.00 $ 50,940.00 3602 $ 81,693.36 $ 6,303.50 $ 3,746.08 $ 91,742.94 4000 $ 90,720.00 $ 7,000.00 $ 4,160.00 $ 101,880.00 Staff recommends implementation of the Parks, Community Center, and Library Impact Fees using the distinct rate fee structure because this framework more proportionately reflects the size and impact of the land use type and is in further compliance with AB 602. The intent of AB 602 is to ensure that impact fees are more proportional to the size of new development and distinguishing the rates by land use type allows for a more precise assessment of impact fees.

Notably, both frameworks will lower the fees for smaller developments regardless of land use type.

As noted in the City’s newly certified Housing Element4, high fees can impede housing production by increasing the per unit cost of development, impacting projected returns and 4 https://paloaltohousingelement.com/wp-content/uploads/2024/07/Palo-Alto-Housing-Element-6.pdf Item 9
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potentially discouraging new home building. Conversion of this fee will complete one of the objectives under Program 3.1: Fee Waivers and Adjustments in the Housing Element.

Subsequently, as part of the Housing Element program implementation, the City will be preparing an economic feasibility study to analyze implications that all development impact fees may have on housing production. These fees will be included in the assessment, and based on the study, Council may adjust fees and/or development standards to enable a reasonable return on investment and ensure sufficient fee collection to support City services.

Response to Public Comments
Since the initial publication of this report in September, the City Council received correspondence expressing concern about the recommended fee schedule and ordinance (Attachment C). In summary, the letters assert:
•The recommended action is a positive step in the right direction but the proposed fee structure disproportionately affects smaller housing units such as apartments and ADUs compared to larger single-family homes.
•High impact fees could deter the production of housing, particularly multi-family units, which are already disadvantaged under the current and proposed systems. •The staff report is unclear about the treatment of ADUs, home additions, demolitions, and basements under the revised fee structure.
•The report fails to include adequate data to assess policy impacts and lacks detailed information on past and future allocation of impact fee revenues. •The Council should consider excluding the first 750 square feet of all housing types from fee calculations, enhancing transparency regarding the use of impact fees, and offering refunds for fees previously assessed.
•The attached letter from Grubb Properties further illustrates that an 850-square-foot rental unit would pay the same fee as a much larger 2,014-square-foot single-family home and asserts this disparity inequitable and counter to the goals of AB 602, which aims to make impact fees fair and proportional.

Staff disagrees that the proposed fee structure (with distinct fees) disproportionately and inequitably affects smaller housing units such as apartments. Development impact fees are charged to offset the impacts created by new residents on City resources. The combined fee structure assumes that all types of housing have the same population density per square foot.

In other words, it assumes that a 1,500 square foot single-family home and a 1,500 square foot apartment will house the same number of residents. Alternatively, it assumes that a 4,500 square foot single-family home will house three times the number of residents as a 1,500 square foot apartment. Because, in fact, apartments will typically house more residents in the Item 9
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same square footage, it is more equitable to charge distinct fees to multi-family and single- family development. The distinct fees recommended by staff are based on the consultant’s analysis of average unit and household sizes.

Similarly, because development impact fees are charged to offset the impacts of new residents, they are not charged to renovations or replacement of existing units. While there may be cases where a renovation or replacement does result in new residents, the current nexus study does not support application of impact fees to these situations. Should the Council desire to explore application of impact fees to renovations and replacements, it could direct staff to initiate a new nexus study that calculates fees on a per-bedroom basis. While this would be a departure from the per-square foot scheme set forth in AB 602, staff believe the Council could make the required findings to adopt this alternative measure of impact.

Development impact fees are not collected for ADUs containing 750 square feet or less. For larger ADUs, the recommendation in this report applies the per square foot feet fee, which is preferrable to the current approach which applies a fee based on the size of the ADU compared to the primary residence. The average size of permitted ADUs in Palo Alto for 2024 is approximately 565 square feet.

With respect to other suggestions in the public comment, such as fee refunds and charging fees below the level authorized in the nexus study, staff would defer to Council for guidance. Staff acknowledges more work, analysis, and policy recommendations are needed to assess the development impact fee structure for residential development.

In fact, this work is scheduled to begin next calendar year. Consistent with the City’s certified Housing Element Program 3.1B the City will prepare an economic feasibility study to analyze implications that development impact fees, may have on housing production and adjust fees or development standards as appropriate to enable a reasonable return on investment and ensure sufficient fee collection to support City services.

Finally, the City Council does have the option of imposing a lower fee for multi-family housing development in this action while staff initiates a more comprehensive analysis as described above. The concern, however, about lowering the fee is that the City does not collect sufficient revenue to support further park, community center, and library services needs for an increasing population. This concern may be somewhat mitigated depending on how many permits for new home construction are permitted over the intervening period and how timely the updated fee study can be completed.

FISCAL/RESOURCE IMPACT
Development impact fees provide funding for capital improvements in parks, community facilities, and libraries to mitigate the impacts of new development in the community.

Revenues fluctuate each year based on the amount of residential and non-residential development occurring in Palo Alto. Currently, staff and DTA are not able to forecast revenue impacts due to the variability of development and changing economic conditions. DTA has Item 9
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provided an illustrative example using last fiscal year’s permitting data to demonstrate the financial impact of the fee conversion. The transition to the recommended fee structure may result in decreased revenue for the parks, community facilities, and library impact fees as smaller multi-family units are built but this too could be offset in part with greater housing density in multi-family projects.

Table 5: Estimated Revenue Calculation – Current Fee Schedule Table 6: Estimated Revenue Calculation – AB 602 Compliant Fee

POLICY IMPLICATIONS
City Council has the authority to charge new development for its relative share of the cost of specific public facilities, as calculated based on a nexus study and pursuant to state law requirements. Council also has the authority to restructure fees based on articulated City policies within legal limits and economic feasibility. The information provided in this report Fee Category Land Use Type Proposed Fee per Unit Total Est. Revenues1 Park SFD $67,650.00 $1,353,000.00Community Center SFD $5,229.00 $104,580.00Library SFD $3,116.00 $62,320.00Total SFR2 $1,519,900.00Park MFD $50,034.00 $0.00Community Center MFD $3,868.00 $0.00Library MFD $2,304.00 $0.00Total MFR3 $0.00$1,519,900.00Notes:1. Estimate, subject to change based on actual new development that occurs in FY 2024-25.2. Assumes approximately 20 new single-family residential units in FY 2023-24.3. Based on actual number of new multi-family units in FY 2023-24; however, these figures are for illustrative purposes only, as the City anticipates that MFD will increase in future fiscal years and subsequently, the revenues for multi-family development.

Total Estimated Residential Revenues
Fee Category Land Use Type Proposed Fee per Sq. Ft. Total Est. Revenues1 Park SFD $18.78 $699,273.30Community Center SFD $1.45 $53,990.75Library SFD $0.87 $32,394.45Total SFR2 $785,658.50Park MFD $44.50 $0.00Community Center MFD $3.44 $0.00Library MFD $2.05 $0.00Total MFR3 $0.00$785,658.50Notes:1. Estimate, subject to change based on actual new development that occurs in FY 2024-25.2. Assumes approximately 37,235 square feet of new single-family residential development occurred in FY 2023-24.

Total Estimated Residential Revenues

3. Based on actual number of new multi-family square footage in FY 2023-24; however, these figures are for illustrative purposes only, as the City anticipates that MFD will increase in future fiscal years and subsequently, the revenues for multi-family development.

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allows Council to evaluate and adjust the City’s Development Impact Fees for Parks, Community Centers, and Libraries.

Based on Government Code §66017, new or increased development impact fees go into effect no sooner than 60 days after adoption. Should Council adopt the recommended fee conversion, these fees are expected to be effective on January 18, 2025.

STAKEHOLDER ENGAGEMENT
The Community Services Department presented the initial nexus study and supplemental report for review to the Parks and Recreation Commission and Finance Committee between December 2020 and May 2022. On June 13, 2022, Council directed supplemental work related to the conversion of fees outlined in this report.

ENVIRONMENTAL REVIEW
The recommended actions are not considered a project as defined by the California Environmental Quality Act pursuant to CEQA regulation 15061(b)(3). The projects in the original 2021 nexus study associated with these fees have been fully analyzed as part of City’s 2030 Comprehensive Plan and its Environmental Impact Report as well as the City’s Parks and Open Space Master Plan and its Mitigated Negative Declaration; no further CEQA analysis is necessary.

ATTACHMENTS
Attachment A: Second Supplement to the Development Impact Fee Justification – Assembly Bill (“AB”) 602 Compliance
Attachment B: Ordinance of the Council of the City of Palo Alto Amending the Fiscal Year 2025 Municipal Fee Schedule to Transition Certain Development Impact Fees from Per-Unit to Per- Square Foot Fees
Attachment C: Correspondence
APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 9
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MEMORANDUM
August 20, 2024
To: City of Palo Alto
From: DTA
Subject: Second Supplement to the Development Impac t Fee Justification Study – Assembly Bill (“AB”) 602 Compliance

A Background
DTA, formerly David Taussig & Associates, was retained by the City of Palo Alto (the “City”) to prepare a Development Impact Fee (“DIF” or “Fee”) Justification Study (the “Study”) in 2020. This Study was adopted by the City Council and the proposed fee schedule was implemented in August 2021. In January 2022, DTA prepared a follow-up analysis in the form of a Supplement to the Development Impact Fee Justification Study (the “Supplement”) that addressed a number of items requested by City Council. Additional detail related to these tasks can be found in Attachment 2.

B Second Supplement to DIF Study
In September 2023, the City requested that DTA prepare and issue this Second Supplement to the Development Impact Fee Justification Study (the “Second Supplement”) to address the requirements of Assembly Bill (“AB”) 602, which was approved by the California State Legislature and signed by the Governor in 2021 and provides new statewide requirements for local jurisdictions seeking to impose development impact fees on development projects.

The Mitigation Fee Act, AB 1600, establishes specific requirements that local officials must follow in establishing, increasing, or imposing development fees. Specifically, local officials must conduct a “nexus study” to demonstrate a “reasonable relationship” between the fees and public facilities funded by the fees, and the development project on which the fees are assessed. AB 602 is designed to provide additional guidance on how local agencies comply with their impact fee obligations, which affects the methodology used to calculate DIFs. Key portions of the bill affecting future DIF calculations are summarized below:

On or after January 1, 2022, fee justification studies must identify the existing level of service (“LOS”) for each public facility, identify the proposed new LOS, and (if proposed new LOS is greater than existing LOS) include an explanation of why the new LOS is necessary.

For housing development projects, nexus studies adopted after July 1, 2022, must calculate the amount of fees based on square footage of proposed units of the development, unless the local agency demonstrates that another metric is more appropriate. The bill would require that a “local agency that calculated fees proportionally to the square footage of the proposed units be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by development.” This would also apply to multi-family residences.

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2 City of Palo Alto August 20, 2024
Second Supplement to the Development Impact Fee Justification Study

The bill also requires the Department of Housing and Community Development (“HCD”), on or before January 1, 2024, to create an impact fee nexus study template that may be used by local jurisdictions to calculate their fees. The bill requires that the template include a method of calculating the feasibility of housing being built with a given fee level. The template must be compl eted by 2024, and local jurisdictions will have the option (it will not be required) to use the HCD template.

The bill authorizes any member of the public, inclu ding an applicant for a development project, to submit evidence that the city, county, or other local agency had failed to comply with the Mitigation Fee Act. The bill requires the legislative body of the city, county, or other local agency to consider any timely submitted evidence and authorize the legislative body to change or adjust the proposed fee or fee increase, as specified.

If a nexus study supports the increase of an existing fee, the local agency shall review the assumption of the nexus study supporting the original fee and evaluate the amount of the fees collected under the original fee.

Large jurisdictions (county population greater than 250,000) and cities within those counties must adopt a capital improvement plan as part of the nexus study.

Nexus studies shall be updated at least every 8 years from the period beginning January 1, 2023.

Importantly, AB 602 does not apply to (i) water and sewer connection and capacity charges, (ii) school fees, (iii) Quimby fees for parks, and (iv) Mello-Roos or other taxes. These other fees, taxes, and charges are subject to their own statutory accountability measures.

B.1 Standards -Based Fee Methodology
The methodology used to establish the Park, Community Center, and Library Fees outlined in the Study adopted in 2021 was based on “standards,” where costs are based on existing LOS. This Standards-Based Methodology establishes a generic unit cost for capacity which is then applied to each land use per the existing LOS. The LOS is based on the existing number of applicable units, such as square feet of building space or acres of land or per resident for each facility. This standard is not based on cost but rather on a standard of service. The Standards-Based Methodology ensures that City facilities are appropriately developed and sized so that future residents and employees do not cause a reduced LOS by unduly burdening the infrastructure system, thus leading to decay and deterioration. This methodology provides several advantages, including not needing to know the cost of a specific facility, how much capacity or service is provided by the current system, or having to commit to a specific size of the facility. Another advantage of this methodology is that it does not involve the planning of any future facilities. This methodology assigns 100% of the fees to new development and allows the City to apply the fee revenue to any project. Additionally, this methodology complies with the requirements of AB 602.

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17000-02975 1/25/2019 Residential New - SF Finaled
LOT 3 575 MAYBELL: PLAN 1, NEW SINGLE FAMILY DWELLING (2275 SF) WITH BASEMENT (1670 SF), ATTACHED GARAGE (216 SF) AND COVERED PORCHES (495 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. ***Plan check done under 17000-02973***
4,161
17000-02976 1/25/2019 Residential New - SF Finaled
LOT 4 587 MAYBELL: PLAN 4, NEW SINGLE FAMILY DWELLING (2296 SF) WITH BASEMENT (1978 SF), ATTACHED GARAGE (218 SF) AND COVERED PORCHES.

SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. ***Plan check done under 17000-02974***
4,492
17000-02983 11/8/2018 Residential New - SF Finaled
LOT 10, 4135 ORCHARD: PLAN 3, NEW SINGLE FAMILY DWELLING (2304 SF) WITH BASEMENT (1773 SF), ATTACHED GARAGE (214 SF) AND COVERED PORCHES (667 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. ***Plan review done under 17000-02980***
4,291
17000-02984 6/27/2019 Residential New - SF Finaled
LOT 11, 4139 ORCHARD: PLAN 3, NEW SINGLE FAMILY DWELLING (2304 SF) WITH BASEMENT (1773 SF), ATTACHED GARAGE (214 SF) AND COVERED PORCHES (584 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. ***Plan review done under 17000-02980***
4,291
17000-02985 7/12/2019 Residential New - SF Finaled
LOT 12, 4150 ORCHARD: PLAN 3, NEW SINGLE FAMILY DWELLING (2304 SF) WITH BASEMENT (1773 SF), ATTACHED GARAGE (214 SF) AND COVERED PORCHES (650 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. ***Plan review done under 17000-02980***
4,291
17000-02986 7/25/2019 Residential New - SF Finaled
LOT 13, 4158 ORCHARD: PLAN 3, NEW SINGLE FAMILY DWELLING (2304 SF) WITH BASEMENT (1773 SF), ATTACHED GARAGE (214 SF) AND COVERED PORCHES (624 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. ***Plan review done under 17000-02980***
4,291
17000-02990 8/28/2019 Residential New - SF Finaled
LOT 16, 4188 ORCHARD: PLAN 8, NEW SINGLE FAMILY DWELLING (2308 SF) WITH BASEMENT (1533 SF), ATTACHED GARAGE (214 SF) AND COVERED PORCHES (217 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. ***Review done under 17000-02979***
4,295
16000-02610 9/30/2021 Residential New - SF Permit Issued NEW 2 STORY SFR 5169 SF W/ BASEMENT 3008 SF AND ATTACHED GARAGE 571 SF 8,748
16000-03225 6/16/2020 Residential New - SF Finaled NEW 2-STORY SFR (4,045 SF), FULL BASEMENT (3060 SF), WITH ATTACHED TWO CAR GARAGE (447 SF) 7,552
17000-01002 6/6/2019 Residential New - SF Finaled ONE STORY HOUSE (2213 SF) (WITH 17000-01211 DETACHED GARAGE (223 SF)) 2,213 17000-02833 9/17/2018 Residential New - SF Finaled
NEW SINGLE FAMILY HOME (2431 SF) WITH BASEMENT (1184 SF) ADD (N) BOILER WATER HEATING SYSTEM 3,615
17000-02981 5/7/2019 Residential New - SF Finaled
LOT 9, 4131 ORCHARD: PLAN 7, NEW SINGLE FAMILY DWELLING (2290 SF) WITH BASEMENT (1476 SF), AND COVERED PORCHES (188 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER.
3,766
17000-02987 8/28/2019 Residential New - SF Finaled
LOT 14, 4168 ORCHARD: PLAN 6, NEW SINGLE FAMILY DWELLING (1986 SF) WITH BASEMENT (1276 SF), AND COVERED PORCHES (166 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER.
3,428
17000-02989 8/28/2019 Residential New - SF Finaled
LOT 15, 4178 ORCHARD: PLAN 2, NEW SINGLE FAMILY DWELLING (2185 SF) WITH BASEMENT (1787 SF), ATTACHED GARAGE (214 SF) AND COVERED PORCHES (424 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. 4,186
17000-03128 9/27/2018 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE WITH ATTACHED GARAGE 237SF 3,704 18000-02300 12/3/2018 Residential New - SF Finaled
NEW 2-STORY SINGLE FAMILY RESIDENCE (2418 SF) WITH COVERED PORCH (347 SF) ATTACHED GARAGE (232 SF) WITH TANKLESS WATER HEATER AND A/C. 2,650 19000-02306 10/27/2021 Residential New - SF Permit Issued NEW SFR (FACTORY BUILT) APPROXIMATELY 2667 SQ FT WITH SITE BUILT ATTACHED GARAGE 297 SF AND SITE BUILT SCREEN PORCH 695 SF **Two approved plan set one is the state approved stamped set one is the PA approved set for the porch and garage, inspectors to review both*** 2,964
17000-01543 9/20/2018 Residential New - SF Finaled NEW 2 STORY SFR 3440 SF W/ BASEMENT 2082 SF AND ATTACHED GARAGE 312 SF 5,834
18000-02385 9/30/2021 Residential New - SF Permit Issued TWO-STORY HOUSE (3272 SF) WITH ATTACHED GARAGE (68 SF), UNCONDITIONED BASEMENT (199 SF) 3,539
18000-03079 4/15/2019 Residential New - SF Finaled NEW 2-STORY HOUSE (2486.7 SF) WITH ATTACHED GARAGE (213 SF) 2,700 18000-03246 4/17/2019 Residential New - SF Finaled
NEW TWO-STORY SFD (2548 SF), WITH ATTACHED GARAGE ( 293 SF) No grading permit required/PW will stamp plans when all departments have approved and building is ready to issue.
2,841
18000-03250 8/2/2019 Residential New - SF Finaled NEW 2-STORY WOOD FRAMED HOUSE (2472 SF), WITH ATTACHED GARAGE (214 SF) WITH FULL BASEMENT (1702 SF) 18-3250 4,388
19000-00322 7/25/2019 Residential New - SF Finaled NEW TWO-STORY HOUSE (4313 SF) WITH ATTACHED GARAGE (427 SF), WITH BASEMENT (2932 SF), 7,672
19000-00396 6/5/2019 Residential New - SF Finaled NEW TWO-STORY HOUSE (2758 SF) WITH BASEMENT (1668 SF) 4,426 19000-01258 9/18/2019 Residential New - SF Finaled NEW TWO-STORY HOUSE (3521 SF) WITH BASEMENT (2216 SF) 5,737 17000-02973 11/8/2018 Residential New - SF Finaled
LOT 1: PLAN 1, NEW SINGLE FAMILY DWELLING (2275 SF) WITH BASEMENT (1670 SF), ATTACHED GARAGE (216 SF) AND COVERED PORCHES (497 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. ++++Structural calcs and supplemental documentation in Annie's overhead bin+++
4,658
17000-02974 11/8/2018 Residential New - SF Finaled
LOT 569 MAYBELL 2: PLAN 4, NEW SINGLE FAMILY DWELLING (2296 SF) WITH BASEMENT (1978 SF), ATTACHED GARAGE (218 SF) AND COVERED PORCHES.

SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER.
4,492
17000-02977 1/25/2019 Residential New - SF Finaled
LOT 5, 589 MAYBELL: PLAN 5, NEW SINGLE FAMILY DWELLING (2283 SF) WITH BASEMENT (1616 SF), ATTACHED GARAGE (220 SF) AND COVERED PORCHES (450 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. 4,119
Building Permit Data - Single-Family Residential
Total Sq. Ft.

Incl. Basement
and Garage
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17000-02978 4/11/2019 Residential New - SF Finaled
LOT 6 4103 CLEMO AV: PLAN 9, NEW SINGLE FAMILY DWELLING (2303 SF) WITH BASEMENT (1616 SF), ATTACHED GARAGE (220 SF) AND COVERED PORCHES (450 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. 4,139
17000-02979 4/11/2019 Residential New - SF Finaled
LOT 7, 4121 ORCHARD: PLAN 8, NEW SINGLE FAMILY DWELLING (2308 SF) WITH BASEMENT (1533 SF), ATTACHED GARAGE (214 SF) AND COVERED PORCHES (229 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER.
4,055
17000-02980 5/7/2019 Residential New - SF Finaled
LOT 8, 4123 ORCHARD: PLAN 3, NEW SINGLE FAMILY DWELLING (2304 SF) WITH BASEMENT (1773 SF), ATTACHED GARAGE (214 SF) AND COVERED PORCHES (542 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER.
4,291
18000-00572 10/4/2018 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2254 SF AND CONDITIONED BASEMENT 1426SF 3,680
18000-00789 9/6/2018 Residential New - SF Finaled NEW ONE-STORY SINGLE HOUSE (2067 SF), WITH ATTACHED GARAGE (320 SF) (Bone Structure) 2,387
18000-00817 10/26/2018 Residential New - SF Finaled NEW TWO STORY HOUSE (3257 SF) 3,257 18000-00936 1/16/2019 Residential New - SF Finaled NEW ONE-STORY SINGLE FAMILY RESIDENCE 4056SF WITH ATTACHED GARAGE 235SF 4,250
18000-01006 11/9/2020 Residential New - SF Permit Issued ONE-STORY HOUSE (3247 SF), WITH ATTACHED GARAGE (504 SF), NEW BASEMENT (3097 SF) 6,848
18000-01219 12/11/2018 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 3847SF WITH ATTACHED GARAGE 213SF. 4,060
18000-01223 10/9/2018 Residential New - SF Finaled NEW SINGLE STORY RESIDENCE 1545SF (DETACHED GARAGE 223SF SEPARATE PERMIT) 1,768
18000-01227 9/27/2018 Residential New - SF Finaled NEW ONE-STORY SINGLE FAMILY RESIDENCE 1,545SF (DETACHED GARAGE 223SF) 1,768
18000-01307 10/1/2018 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2023SF 2,023 18000-01312 9/27/2018 Residential New - SF Finaled NEW TWO STORY HOUSE (2030 SF). SCOPE OF WORK INCLUDES TANKLESS WATER HEATER. ***PW to stamp plans prior to permit issuance*** 2,030 18000-01316 10/2/2018 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2023SF 2,023 18000-01365 9/18/2018 Residential New - SF Finaled NEW TWO STORY SFD (2711 SF) WITH AN ATTACHED GARAGE (224 SF) 2,935 18000-01392 3/19/2019 Residential New - SF Finaled NEW TWO-STORY FAMILY (1672 SF) WITH ATTACHED GARAGE (443 SF) 2,115 18000-01395 3/19/2019 Residential New - SF Finaled NEW TWO-STORY HOUSE (1672 SF) WITH ATTACHED GARAGE (443 SF) 2,115 18000-01398 10/2/2018 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2670SF WITH ATTACHED GARAGE 227SF 2,896
18000-01420 5/23/2019 Residential New - SF Finaled ONE STORY HOUSE (2459 SF) AND ATTACHED GARAGE (258 SF) 2,712 18000-01447 9/10/2018 Residential New - SF Finaled
NEW 2-STORY HOUSE (2519 SF) WITH ATTACHED GARAGE (335 SF) CURRENTLY REVIEW WITH IR PLANNING PROJECT 18PLN-59 (address to be changed to 3219 Waverley after final inspection - see pending address assignment in documents tab)
2,854
18000-01511 7/22/2019 Residential New - SF Finaled NEW 2-STORY HOUSE (2084 SF) AND ATTACHED GARAGE (223 SF) 2,307 18000-01583 9/20/2018 Residential New - SF Finaled NEW TWO STORY HOUSE (3867 SF) SCOPE OF WORK INCLUDES A NEW TANKLESS WATER HEATER. 4,082
18000-01663 9/25/2018 Residential New - SF Finaled NEW TWO-STORY HOUSE (2985 SF) WITH ATTACHED GARAGE (304 SF) 3,289 18000-01680 8/27/2019 Residential New - SF Finaled TWO-STORY HOUSE (5,799 SF) WITH BASEMENT (2551 SF) WITH ATTACHED TRELLIS (662 SF) 8,350
18000-01718 11/2/2018 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2,620SF WITH ATTACHED GARAGE 225SF 2,845
18000-01804 11/6/2018 Residential New - SF Finaled
NEW SFR (4380 SF) WITH ATTACHED GARAGE (419 SF) A/C AND TAKNLESS WATER HEATER (2 QTY) AND NEW LANDSCAPE***Modified scope of work to add install VIF sewerage ejector pump to be installed per plan notes on sheet C-2 dt 7/16/19***
4,799
18000-01832 10/23/2018 Residential New - SF Finaled NEW TWO-STORY HOUSE (2390 SF) WITH BASEMENT (1798 SF)***Add 400 amps to scope of work is approved by utilities dt*** 4,188
18000-01849 1/7/2019 Residential New - SF Finaled UNIT 1: NEW 2-STORY HOUSE (1803 SF) WITH ATTACHED GARAGE (212 SF) (356 & 358 Hawthorne at front of lot - 357 Bryant Court at rear of lot) 2,015 18000-01850 1/7/2019 Residential New - SF Finaled UNIT 2: NEW 2-STORY HOUSE (1791 SF) WITH ATTACHED GARAGE (212 SF) (356 & 358 Hawthorne at front of lot - 357 Bryant Court at rear of lot) 2,003 18000-01851 1/7/2019 Residential New - SF Finaled UNIT 3: NEW 1-STORY HOUSE (967 SF) WITH ATTACHED GARAGE (237 SF) (357 Bryant Court at rear of lot - 356 & 358 Hawthorne Ave at front of lot) 1,204 18000-01877 10/11/2018 Residential New - SF Finaled NEW 2-STORY SFR WITH ATTACHED 2-CAR GARAGE, TANKLESS WATER HEATER AND A/C 3,437
18000-01960 11/16/2018 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2047 SF. (DEMO RESIDENCE IN PREPARATION FOR NEW HOME CONSTRUCTION. UNDER SEPARATE PERMIT) 2,047 18000-02003 11/1/2018 Residential New - SF Finaled NEW 2-STORY SFR (3341 SF) WITH ATTACHED GARAGE (256 SF) TANKLESS WATER HEATER AND A/C 3,597
18000-02056 4/5/2019 Residential New - SF Finaled NEW TWO-STORY HOUSE (2672SF) WITH A/C AND TANKLESS WATER HEATER. 2,672 18000-02073 12/17/2018 Residential New - SF Finaled NEW TWO-STORY HOUSE (2264 SF), WITH ATTACHED GARAGE (213 SF) 2,477 18000-02173 7/29/2019 Residential New - SF Finaled
NEW 2-STORY SINGLE FAMILY RESIDENCE 2366 SF WITH BASEMENT 1640 SF AND ATTACHED SINGLE CAR GARAGE 231SF. INCLUDES LEVEL 2 ELECTRIC VEHICLE CHARGING UNIT ON SIDE OF GARAGE.
4,237
18000-02215 12/2/2019 Residential New - SF Finaled NEW 2-STORY SFD (3452 SF) WITH ATTACHED GARAGE (2227 SF) 3,679 18000-02235 2/6/2019 Residential New - SF Finaled NEW 2-STORY SFR (1643 SF) WITH ATTACHED GARAGE (225 SF) AND TANKLESS WATER HEATER. 1,868
18000-02236 2/6/2019 Residential New - SF Finaled
NEW 2-STORY SFR (1652 SF) WITH ATTACHED GARAGE (225 SF) AND TANKLESS WATER HEATER. HOUSE IS AT REAR OF LOT (FRONT HOUSE UNDER 845

WEBSTER)
1,877
18000-02291 8/28/2019 Residential New - SF Permit Issued RES: FRONT HOUSE: 2-STORY SINGLE FAMILY RESIDENCE, 2102 SF WITH ATTACHED GARAGE 230 SF 2,332
18000-02292 8/28/2019 Residential New - SF Permit Issued RES: REAR HOUSE: 2-STORY SINGLE FAMILY RESIDENCE 2102 SF AND ATTACHED GARAGE 230 SF 2,332
18000-02294 1/8/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE. (NEW DETACHED GARAGE 372 SF UNDER SEPARATE PERMIT) 2,949
18000-02324 3/27/2019 Residential New - SF Finaled NEW 2-STORY HOUSE (3993 SF) WITH BASEMENT(2066 SF) 6,059 18000-02401 7/1/2019 Residential New - SF Finaled
NEW 2-STORY SINGLE FAMILY RESIDENCE 2955SF WITH BASEMENT 1971SF. ***grading permit and letter regarding dewatering required to be submitted, reviewed and approved prior to building issuance***
4,926
18000-02568 4/19/2019 Residential New - SF Finaled NEW 2-STORY FAMILY HOUSE (2908 SF) WITH ATTACHED GARAGE (235 SF) 3,143 Item 9
Attachment A - Second
Supplement to
Development Impact Fee
Justification AB 602

Item 9: Staff Report
Pg.
21 Packet Pg. 223 of 435

18000-02617 4/12/2019 Residential New - SF Finaled NEW 2-STORY HOME (2101 SF) WITH ATTACHED GARAGE (223 SF) AND BASEMENT (1459 SF) INCLUDES A/C AND TANKLESS WATER HEATER. 3,783 18000-02657 12/10/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 5800SF (NEW DETACHED 4-CAR GARAGE WITH WORKSHOP ON 2ND FLOOR 2040SF SEPARATE PERMIT 18-2658) 5,800 18000-02733 4/15/2019 Residential New - SF Finaled
NEW ONE STORY SINGLE FAMILY RESIDENCE 2,277SF WITH ATTACHED GARAGE 221SF. 2,498
18000-02819 2/1/2019 Residential New - SF Finaled
NEW SINGLE STORY SFD (2920 SF) WITH ATTACHED ONE CAR GARAGE (244 SF).

SCOPE OF WORK INCLUDES TANKLESS WATER HEATER. ****PW to stamp approved sets****
3,164
18000-02840 6/28/2019 Residential New - SF Finaled NEW ONE STORY SINGLE FAMILY RESIDENCE 2706SF AND ATTACHED 211SF GARAGE. 2,917
18000-02940 4/16/2019 Residential New - SF Finaled NEW TWO STORY SINGLE FAMILY DWELLING (2474 SF) AND ATTACHED GARAGE (702 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER 3,176 18000-03023 6/11/2019 Residential New - SF Finaled NEW ONE STORY SINGLE FAMILY DWELLING (1479 SF). 1,479 18000-03059 6/17/2019 Residential New - SF Finaled
NEW 2-STORY ACCESSORY HOUSE (2689 SF) WITH ATTACHED ONE CAR GARAGE (300 SF) ***4/2/19 Scope of work modified to New two story main house (2731 sf) with attached garage (300 sf)
3,031
18000-03123 6/3/2019 Residential New - SF Finaled NEW TWO STORY SINGLE FAMILY RESIDENCE 2856 WITH BASEMNT 2025SF AND ATTACHED GARAGE 211SF 5,092
18000-03177 10/15/2020 Residential New - SF Finaled TWO STORY SFR (2784 SF) WITH ATTACHED GARAGE (269 SF) TANKLESS WATER HEATER AND A/C. 3,053
18000-03265 8/21/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2,730 SF WITH BASEMENT 1,515 SF AND ATTACHED GARAGE 241SF 4,486
19000-00005 9/17/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 1957 SF WITH BASEMENT 991 SF. 2,948 19000-00123 5/20/2019 Residential New - SF Finaled NEW 2-STORY HOUSE WITH ATTACHED GARAGE, A/C AND TANKLESS WATER HEATERS (QTY 2) 2,855
19000-00202 5/24/2019 Residential New - SF Finaled NEW SINGLE STORY HOME (2380 SF) WITH ATTACHED GARAGE (441 SF) WITH A/C AND TANKLESS WATER HEATER. 2,821
19000-00332 6/26/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2772 SF WITH BASEMENT 1643 SF 4,415 19000-00339 9/4/2019 Residential New - SF Permit Issued 2-STORY SINGLE FAMILY RESIDENCE 5796 SF WITH BASEMENT 3301 SF. 9,097 19000-00387 6/12/2019 Residential New - SF Finaled NEW ONE STORY HOUSE (2355 SF) WITH ATTACHED GARAGE (220 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. 2,575
19000-00410 7/19/2019 Residential New - SF Finaled NEW 2-STORY HOUSE (2330 SF) WITH ATTACHED GARAGE (221SF) INCLUDING A/C AND TANKLESS WATER HEATER. 2,551
19000-00508 6/19/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE (2561 SF) INCLUDES INSTALL (N) A/C, TANKLESS WATER HEATER AND 200 AMP UPGRADE. 2,561
19000-00531 10/28/2019 Residential New - SF Finaled RES: TWO STORY HOUSE (2092.6 SF) WITH BASEMENT (1401 SF) 3,494 19000-00575 7/12/2019 Residential New - SF Finaled NEW 2-STORY (2422 SF) WITH ATTACHED GARAGE (275 SF) TANKLESS WATER HEATER AND A/C. 2,697
19000-00588 2/12/2022 Residential New - SF Permit Issued SINGLE STORY SFD (2725 SF) WITH ATTACHED ONE CAR GARAGE (259 SF) AND COVERED PORCHES (370 SF). SCOPE OF WORK INCLUDES TWO TANKLESS WATER HEATERS.
2,984
19000-00627 8/19/2019 Residential New - SF Finaled SINGLE STORY SFR (2918 SF) WITH ATTACHED GARAGE (290 SF),TANKLESS WATER HEATER, A/C AND HEAT PUMP. 3,208
19000-00641 9/6/2019 Residential New - SF Finaled NEW TWO-STORY HOUSE (2696 SF) WITH ATTACHED GARAGE (213 SF) G& E not required 2,909
19000-00723 8/6/2019 Residential New - SF Finaled NEW TWO-STORY HOUSE (3660 SF) WITH ATTACHED GARAGE (410 SF) 4,070 19000-00765 8/6/2019 Residential New - SF Finaled NEW 2 STORY SINGLE FAMILY RESIDENCE WITH ATTACHED GARAGE 219SF 3,370 19000-00811 10/10/2019 Residential New - SF Finaled NEW 2-STORY 3083SF SINGLE FAMILY RESIDENCE. ***change in scope of work to remove the basement*** 10/7/19 oc 3,083
19000-00850 7/18/2019 Residential New - SF Finaled NEW 2-STORY SFR (2371 SF) WITH ATTACHED GARAGE (273 SF) WITH A/C (QTY 2) AND TANKLESS WATER HEATER. 2,644
19000-00851 8/9/2019 Residential New - SF Finaled NEW TWO STORY SFD (2248 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. 2,688
19000-00888 8/6/2019 Residential New - SF Finaled NEW TWO STORY HOUSE (3672 SF), WITH BASEMENT (1,177.27 SF) 4,849 19000-00898 10/22/2019 Residential New - SF Finaled
ONE STORY HOUSE WITH A BASEMENT (3282 SF) WITH ATTACHED GARAGE (231 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. 3,513 19000-00902 10/25/2019 Residential New - SF Finaled NEW ONE STORY (3509 SF) WITH ATTACHED GARAGE (479 SF) 3,988 19000-00907 7/18/2019 Residential New - SF Finaled NEW (2) STORY SINGLE FAMILY 2250 SF RESIDENCE AND BASEMENT 1440 SF WITH ATTACHED GARAGE 224 SF. 3,914
19000-00918 8/29/2019 Residential New - SF Finaled NEW ONE STORY HOUSE (1943 SFT) WITH BASEMENT (1330 SF) 3,272 19000-00936 1/10/2020 Residential New - SF Finaled NEW 2-STORY SFR (2319 SF) WITH ATTACHED GARAGE (229 SF) WITH TANKLESS WATER HEATER AND A/C. 2,548
19000-00938 9/10/2019 Residential New - SF Finaled
NEW SINGLE STORY SFD (2453 SF) WITH ATTACHED GARAGE (223 SF). SCOPE OF WORK INCLUDES A TANKLESS WATER HEATER. 2,676
19000-00994 9/3/2019 Residential New - SF Finaled
NEW 2-STORY SINGLE FAMILY RESIDENCE 4,606SF WITH BASEMENT 2421SF AND ATTACHED GARAGE 223SF. INCLUDES (1) LEVEL 2 EVSE AND (1) LEVEL 3 EVSE AT GARAGE AREA. PHOTOVOLTAIC SYSTEM DEFERRED TO SEPARATE PERMIT.
7,250
19000-01004 10/28/2019 Residential New - SF Finaled NEW TWO STORY HOUSE (2575 SF) WITH ATTACHED GARAGE (260 SF) 2,835 19000-01043 10/11/2019 Residential New - SF Finaled NEW TWO-STORY HOUSE (2493 SF) HOUSE IS ALL ELECTRIC 2,493 19000-01092 9/18/2019 Residential New - SF Finaled NEW SFR (3116 SF) WITH BASEMENT (2834 SF) ATTACHED GARAGE (441 SF) A/C AND TANKLESS WATER HEATER. 6,391
19000-01111 9/9/2019 Residential New - SF Finaled ONE-STORY HOUSE (3358 SF) WITH ATTACHED GARAGE (340 SF) AND BASEMENT (3161 SF) 6,859
19000-01142 9/13/2019 Residential New - SF Expired NEW TWO-STORY HOUSE (3021 SF) WITH BASEMENT (1821 SF) 4,842 19000-01236 10/7/2019 Residential New - SF Finaled NEW TWO STORY HOUSE (2104 SF), WITH ATTACHED GARAGE (211 SF) AND BASEMENT (1435 SF) 3,750
19000-01310 8/22/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2185 SF WITH ATTACHED GARAGE 218 SF 2,403
19000-01381 1/30/2020 Residential New - SF Finaled NEW ONE STORY HOUSE (3787 SF) WITH ATTACHED GARAGE (216 SF) 4,003 19000-01417 8/19/2019 Residential New - SF Finaled NEW 2-STORY SFD (2228 SF) WITH ATTACHED GARAGE (221 SF) 2,449 19000-01453 2/13/2020 Residential New - SF Finaled 2-STORY SFR (3247 SF) WITH BASEMENT (871 SF) ON EMPTY LOT. TO INCLUDE HEAT PUMP FOR COOLING AND BOILER UNIT FOR WATER HEATING 4,423 19000-01479 11/26/2019 Residential New - SF Finaled NEW 1-STORY WOOD FRAMED HOUSE (3032 SF) WITH ATTACHED GARGE (219 SF) 3,251
Item 9
Attachment A - Second
Supplement to
Development Impact Fee
Justification AB 602

Item 9: Staff Report
Pg.
22 Packet Pg. 224 of 435

19000-01485 9/6/2019 Residential New - SF Finaled NEW 2-STORY SFD (2482 SF) WITH ATTACHED GARAGE (232 SF) AND BASEMENT (1558 SF) COVERED PORCH (265 SF) AND AMMR FOR BOOSTER FAN 4,272 19000-01501 9/23/2019 Residential New - SF Permit Issued 2-STORY HOUSE (2729 SF) WITH ATTACHED GARAGE (213 SF) 2,942 19000-01519 7/14/2020 Residential New - SF Finaled NEW TWO-STORY HOUSE (3166 SF) 3,166 19000-01608 3/6/2020 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2,265 SF. INCLUDES TANKLESS WATER HEATER. DETACHED GARAGE UNDER SEPARATE PERMIT. 2,265 19000-01723 10/3/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2,687 SF AND 220 SF ATTACHED GARAGE. 2,907
19000-01844 1/10/2020 Residential New - SF Finaled
NEW 2-STORY SINGLE FAMILY RESIDENCE 3,970 SF CONDITIONED SPACE AND 698 SF AGGREGATE COVERED PATIO. (NEW DETACEHED GARAGE 257 SF WITH

HALF BATH UNDER SEPARATE PERMIT)
4,227
19000-01879 11/15/2019 Residential New - SF Finaled NEW 2 STORY SINGLE FAMILY RESIDENCE 2217 SF (DETACHED GARAGE 221 SF UNDER SEPARATE PERMIT) 2,438
19000-01922 6/2/2020 Residential New - SF Finaled NEW 2-STORY HOUSE (2419 SF) WITH ATTACHED GARAGE (220 SF), ATTACHED COVERED PORCH AND PATIO (428 SF) (Batched Outside to Shum Coda) 2,639 19000-01955 7/2/2020 Residential New - SF Finaled NEW TWO-STORY HOUSE (2773 SF) WITH ATTACHED GARAGE (237 SF) 3,010 19000-01959 12/9/2019 Residential New - SF Finaled NEW ONE STORY HOUSE ATTACHED ONE CAR GARAGE (3015 SQFT) 3,015 19000-01986 12/13/2019 Residential New - SF Finaled 2-STORY HOUSE (5557 SF), WITH ATTACHED GARAGE (443 SF), BASEMENT (3518 SF) 9,519
19000-01989 12/12/2019 Residential New - SF Finaled NEW 2-STORY HOME (3521 SF) WITH A/C AND TANKLESS WATER HEATER. 3,863 19000-02110 2/12/2020 Residential New - SF Finaled NEW 2-STORY SFR (3349 SF) WITH ATTACHED GARAGE (289SF) TANKLESS WATER HEATER, A/C AND 200 AMP SERVICE. 3,638
19000-02122 1/28/2020 Residential New - SF Finaled NSFR 1697SF SINGLE STORY 1,697 19000-02156 1/15/2020 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 3,686 SF WITH ATTACHED GARAGE 451 SF. ***no grading permit required** 4,137
19000-02210 11/12/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY HOUSE (2463 SF) WITH ATTACHED GARAGE (214 SF) 2,677
19000-02213 2/19/2020 Residential New - SF Permit Issued SFR 2 STORY 3088 SF WITH ATTACHED GARAGE (220 SF) AND BASEMENT (1600 SF) 4,908
19000-02237 5/28/2020 Residential New - SF Finaled SINGLE STORY SFR WITH ATTACHED GARAGE (3730 SF) TO INCLUDE A/C, TANKLESS WATER HEATER, HEAT PUMP, 400 AMP ELECTRICAL SERVICE 3,730 19000-02290 7/2/2020 Residential New - SF Permit Issued 2-STORY SFR (4257 SF) WITH A/C UNITS (2) TANKLESS WATER HEATER (2) AND EVSE (BATCHED 4LEAF) 4,257
19000-02312 6/16/2020 Residential New - SF Finaled
NEW SFR (2276 SF) CONDITIONED SPACE WITH ATTACHED GARAGE (256 SF) A/C, TANKLESS WATER HEATER AND EVSE. (BATCHED OUTSIDE PLAN CHECK 4LEAF)
2,532
19000-02491 12/18/2019 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 3,527 SF WITH BASEMENT 2,063 SF WITH 400 AMP SERVICE 5,591
19000-02750 8/18/2020 Residential New - SF Finaled NEW 2-STORY HOUSE (3799 SF) WITH ATTACHED GARAGE (391 SF) AND BASEMENT (2507 SF) PORCH (586 SF) 6,697
19000-02797 8/20/2020 Residential New - SF Finaled
2-STORY SFR (2766 SF) WITH BASEMENT (1877 SF) COVERED PORCH AREAS (676 SF) TO INCLUDE TWO (2) A/C AND TWO (2) TANKLESS WATER HEATERS. [BATCHED SHUM CODA] - Grading Permit Required-See Attached in documents. 5,224
19000-02817 2/24/2020 Residential New - SF Finaled NEW 2-STORY SFR (2725 SF) WITH ATTACHED GARAGE (214 SF) COVERED PORCH AREAS (742 SF) TANKLESS WATER HEATER AND A/C. 2,939 19000-02858 1/29/2021 Residential New - SF Finaled TWO-STORY HOUSE (2999 SF) WITH ATTACHED GARAGE (210 SF) 3,209 19000-02895 5/7/2020 Residential New - SF Finaled NEW 2-STORY HOUSE (2753 SF) WITH ATTACHED GARAGE (217 SF) - no grading permit required. 2,970
19000-02922 6/25/2020 Residential New - SF Finaled NEW 2-STORY SFR (2292 SF) WITH ATTACHED GARAGE (200 SF) 2,493 19000-02925 9/8/2020 Residential New - SF Finaled 2-STORY SFR (2062 SF) WITH A/C AND TANKLESS WATER HEATER. 2,062 19000-03036 6/9/2020 Residential New - SF Finaled NEW TWO STORY RESIDENCE (2784 SF) WITH ATTACHED ONE CAR GARAGE (224 SF) 19PLN-00227 (BATCHED TO 4LEAF) 3,006
19000-03112 10/15/2020 Residential New - SF Permit Issued RES: 1 STORY HOUSE (4889 SF), ATTACHED GARAGE (524 SF), WITH BASEMENT (3833 SF), AND COVERED PORCHES (300 SF) **GRADING PERMIT REQUIRED - P.

CHUN**
9,246
19000-03145 9/9/2020 Residential New - SF Finaled NEW 2-STORY HOUSE (2796 SF) WITH ATTACHED GARAGE (220 SF) 3,016 19000-03177 8/7/2020 Residential New - SF Finaled
NEW 2-STORY SFR (2625 SF) WITH ATTACHED GARAGE (242 SF) WITH TANKLESS WATER HEATER, A/C AND 200 AMP ELECTRICAL SERVICE. (BATCHED TO 4 LEAF) 2,867 19000-03181 6/2/2020 Residential New - SF Finaled NEW TWO STORY SINGLE FAMILY HOME, WITH A/C AND BOILER. NEW LANDSCAPING THROUGHOUT.(Batched Outside to Shum Coda) 3,357 19000-03201 7/2/2020 Residential New - SF Finaled NEW 2-STORY HOUSE WITH ATTACHED 1 CAR GARAGE 3,431 19000-03206 11/4/2020 Residential New - SF Finaled
NEW 2-STORY SFR (2835 SF) WITH ATTACHED GARAGE (237 SF) TO INCLUDE TANKLESS WATER, A/C AND 200 AMP ELECTRICAL SERVICE.(Batched Outside Shum Coda )
3,072
19000-03224 9/2/2020 Residential New - SF Finaled NEW 2-STORY SFR (2403 SF) TO INCLUDE A/C (QTY 2) (BATCHED OUTSIDE 4 LEAF) 2,483
19000-03275 11/4/2020 Residential New - SF Finaled NEW CONSTRUCTION OF 2,400 SF TWO STORY HOUSE WITH ATTACHED GARAGE 308 SF 18PLN-00318 (BATCHED OUTSIDE 4 LEAF) 2,708 19000-03292 8/18/2020 Residential New - SF Finaled NEW CONSTRUCTION OF A 2390 SF ONE STORY HOUSE WITH ATTACHED GARAGE 214 SF 2,604
19000-03297 2/8/2021 Residential New - SF Finaled TWO STORY SINGLE FAMILY DWELLING (2103 SF ) WITH BASEMENT LEVEL (1601 SF ) , NEW HARDSCAPING AND LANDSCAPING. ( CHANGE OF SCOPE 10/6/20 ) 3,704 19000-03301 8/16/2021 Residential New - SF Permit Issued 2-STORY HOUSE (4509 SF) WITH BASMENT (3070 SF) AND ATTACHED GARAGE (425 SF) (grading and excavation permit required) 8,004 19000-03307 1/20/2021 Residential New - SF Finaled NEW TWO STORY HOUSE (2984 SF) WITH ATTACHED GARAGE (459 SF) 3,443 19000-03329 8/17/2020 Residential New - SF Finaled CONCURRENT REVIEW WITH ARB 19PLN-00390 NEW 2-STORY HOUSE (3088 SF) WITH BASEMENT (1161 SF) 4,249
19000-03344 10/23/2020 Residential New - SF Finaled ONE-STORY HOUSE (2154 SF) WITH ATTACHED GARAGE (256 SF), FRONT/BACK PORCHES (62 SF) 2,410
19000-03350 9/3/2020 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 2,841 SF WITH ATTACHED GARAGE 233 SF. INCLUDES 350 SF COVERED PORCH(BATCHED OUTSIDE 4 LEAF) 3,074 19000-03366 8/13/2020 Residential New - SF Finaled RESIDENTIAL CONSTRUCTION OF NEW ONE STORY HOUSE (~3314 SF), AND ATTACHED GARAGE (425 SF) INSTALL TANK LESS WATER HEATER. 3,739 20000-00282 8/18/2020 Residential New - SF Finaled NEW ONE-STORY HOUSE (3660 SF) WITH ATTACHED GARAGE (504 SF), COVERED PORCHES (75 SF) 4,164
Item 9
Attachment A - Second
Supplement to
Development Impact Fee
Justification AB 602

Item 9: Staff Report
Pg.
23 Packet Pg. 225 of 435

20000-00337 6/10/2020 Residential New - SF Finaled BUILD NEW TWO STORY HOUSE WITH ATTACHED GARAGE [BATCHED 4LEAF] 6,000 20000-00465 7/15/2020 Residential New - SF Finaled CONSTRUCTION OF 2 STORY SINGLE FAMILY HOUSE (~2456 SF) WITH ASSOCIATED LANDSCAPE AND SITE WORK. (BATCHED SHUMS CODA) 2,456 20000-00469 11/18/2020 Residential New - SF Finaled TWO STORY HOUSE 2696 SF WITH ATTACHED GARAGE 213 SF 19PLN-00308 2,909 20000-00487 10/27/2020 Residential New - SF Finaled NEW 2-STORY SFR WITH ATTACHED GARAGE. TO INCLUDE A/C AND TANKLESS WATER HEATER. (BATCHED SHUMS CODA) 2,644
20000-00525 7/14/2021 Residential New - SF Finaled 1-STORY HOME (1705 SF) ON A FLAG LOT WITH ATTACHED GARAGE (229SF) 1,934 20000-00548 10/27/2020 Residential New - SF Finaled NEW 2-STORY SINGLE FAMILY RESIDENCE 3575 SF AND BASEMENT 2403 SF AND 206 SF ATTACHED GARAGE. 6,183
20000-00579 9/4/2020 Residential New - SF Finaled NEW CONSTRUCTION OF A 2637 SF TWO STORY HOUSE WITH ATTACHED GARAGE 214 SF 19PLN-00316. 2,851
20000-00594 9/1/2020 Residential New - SF Finaled
2-STORY SFR (2200 SF) WITH ATTACHED GARAGE (230 SF). A/C, TANKLESS WATER HEATER, 200 AMP SERVICE. PV DEFERRED. [BATCHED 4LEAF] **No grading permit required**
2,430
20000-00624 6/25/2020 Residential New - SF Finaled NEW 2 STORY SFR 2720 SF WITH ATTACHED GARAGE 223 SF. 2,942 20000-00665 5/3/2021 Residential New - SF Finaled
ONE STORY, SINGLE FAMILY RESIDENCE ~5799 SF WITH FULL BASEMENT. ~5239 SF AND ASSOCIATED LANDSCAPING (GRADING PERMIT WILL BE REQUIRED) 11,038 20000-00668 1/8/2021 Residential New - SF Finaled
SFR (4200 SF) WITH ATTACHED GARAGE (281 SF) TO INCLUDE COVERED PORCHES (545 SF) 3 TANKLESS WATER HEATERS AND 2 A/C UNITS. ***basement (905 SF) to be removed from scope, given valuation to change from $1,250,000 to $1,000,000 and calculated valuation to change from $665,409.28 to $554,582.98 per applicant revision 1/22*** ***21BLD-00033: REVISION TO

INCLUDE REMOVAL OF BASEMENT AND ASSOCIATED ASPECTS (LIGHTWELL, SUMP PUMPS) FROM APPROVED SCOPE OF WORK. ADDING POWDER ROOM, MECHANICAL ROOM. DOORS AT FAMILY AND MECHANICAL ROOM. UPDATED DOOR & WINDOW SCHEDULE, T24, FOUNDATION PLAN AND LOCATION OF A/C***
4,481
20000-00670 7/2/2020 Residential New - SF Finaled CONSTRUCT A NEW SINGLE STORY RESIDENCE ~2376 SF WITH ATTACHED GARAGE ~221 SF 2,601
20000-00701 6/7/2021 Residential New - SF Permit Issued 2-STORY SFR (2800 SF) AND ATTACHED GARAGE (446 SF) WITH A/C, TANKLESS WATER HEATER ON AN EMPTY LOT. 3,246
20000-00712 9/3/2020 Residential New - SF Finaled NEW 2-STORY SFR (2767 SF) WITH ATTACHED GARAGE (257 SF) AND BASEMENT (1781 SF) A/C (QTY 3) AND TANKLESS WATER HEATERS (QTY 2) 4,805 20000-00791 11/17/2020 Residential New - SF Finaled RESIDENTIAL NEW ONE STORY 5 BEDROOM, 5 BATH, 1 HALF BATH HOUSE OF 3,505.03 S.F. AND 460.49 S.F. GARAGE TOTALING 3,965.52 S.F. 3,965 20000-00870 11/3/2020 Residential New - SF Finaled SFR (2548 SF) WITH ATTACHED GARAGE (227 SF) COVERED REAR PATIO (140 SF) ATTACHED TRELLIS AT ENTRY (94 SF) TANKLESS WATER HEATER AND A/C. 2,775 20000-01012 2/8/2021 Residential New - SF Expired RESIDENTIAL 2-STORY SFR (2811 SF) 2,811 20000-01017 3/25/2021 Residential New - SF Finaled 19PLN-00199: TWO-STORY SINGLE FAMILY RESIDENCE WITH ATTACHED ONE- CAR GARAGE 2,900
20000-01198 11/19/2020 Residential New - SF Finaled CONSTRUCTION OF A NEW 1,549 SF ONE-STORY SINGLE FAMILY RESIDENTIAL STRUCTURE. **No Grading permit required** 1,777
20000-01479 7/12/2021 Residential New - SF Permit Issued TWO STORY RESIDENCE ( 2287 sf ) WITH FINISHED BASEMENT ( 1715 sf ) AND ATTACHED GARAGE. ( 431 sf ) NEW LANDSCAPING THROUGHOUT. Do not issue- Grading permit required.
4,433
20000-01552 2/9/2021 Residential New - SF Permit Issued TWO STORY HOUSE 2995 SF 19PLN-00301 2,995 20000-01949 3/8/2021 Residential New - SF Finaled NEW 2 STORY HOUSE (2364 SF), WITH ATTACHED GARAGE (236 SF) 2,600 20000-01979 3/22/2021 Residential New - SF Finaled
TWO (2) STORY, SINGLE FAMILY RESIDENCE WITH ATTACHED GARAGE ~2343 SF

AND CORRESPONDING SITE ALTERATIONS, INCLUDING NEW HARDSC - REVISION TO 20000-01979: MAIN ELECTRICAL PANEL CONNECTION REVISED

TO BE UNDERGROUND
2,343
20000-02004 5/14/2021 Residential New - SF Finaled ONE STORY SFR 2950 SF WITH ATTACHED GARAGE 3,232 20000-02072 3/22/2021 Residential New - SF Finaled TWO-STORY HOUSE (2660 SF), WITH ATTACHED ONE CAR GARAGE (270 SF) No Grading permit required. 2,930
20000-02136 6/16/2021 Residential New - SF Permit Issued NEW TWO STORY SFR WITH ATTACHED GARAGE 18PLN-00269 3,230 20000-02634 8/16/2022 Residential New - SF Permit Issued TWO STORY HOUSE (2771 SF) WITH BASEMENT (1,632 SF), FRONT, BACK, AND SIDE PORCHES (326 SF) 4,403
21BLD-00090 3/25/2021 Residential New - SF Finaled NEW 1-STORY SINGLE FAMILY HOUSE (1364 SF) *no grading permit required* 1,364 21BLD-00473 12/13/2021 Residential New - SF Finaled ONE-STORY SINGLE FAMILY RESIDENTIAL STRUCTURE, 1,455 SF 1,455 21BLD-00548 9/20/2021 Residential New - SF Finaled ONE STORY SFR 1,170 SF 1,170 21BLD-00668 10/6/2021 Residential New - SF Permit Issued ONE STORY SINGLE FAMILY RESIDENCE ~3626 SF WITH ATTACHED CARPORT 3,626 21BLD-00699 9/8/2021 Residential New - SF Finaled TWO STORY HOUSE OF 2549 SQ.FT WITH ATTACHED SINGLE CAR GARAGE (200 SF) 2,749
21BLD-00704 2/23/2022 Residential New - SF Permit Issued 2-STORY HOUSE SINGLE FAMILY RESIDENCE ON A 6475 SF LOT. WITH 2474 SF LIVING AREA, 217 SF GARAGE, TOTALING 2692 SF. 2,691
21BLD-00791 6/28/2021 Residential New - SF Finaled 2-STORY SINGLE FAMILY RESIDENCE WITH 1 CAR ATTACHED GARAGE 2,592 21BLD-00837 8/4/2021 Residential New - SF Finaled
NEW 2-STORY SINGLE FAMILY RESIDENCE 3,344SF CONDITIONED SPACE WITH ATTACHED GARAGE 488SF. 156 SF COVERED PORCH. NEW ELECTRIC SERVICE 400AMPS. (SEPARATE RELATED PERMITS FOR 219 SF PERGOLA,
DECONSTRUCTION OF EXISTING HOUSE 1389SF AND DETACHED GARAGE 476

SF) (DEFERRED SOLAR AND ELECTRIC VEHICLE EQUIPMENT)
3,792
21BLD-00919 9/7/2021 Residential New - SF Expired CONSTRUCTION OF A NEW TWO STORY RESIDENCE 2861 SF WITH AN ATTACHED GARAGE OF 454 SF 3,315
21BLD-00964 10/6/2021 Residential New - SF Permit Issued NEW 2-STORY RESIDENCE 5,537SF WITH ATTACHED GARAGE 459SF (NEW DETACHED ADU 897SF UNDER PERMIT 21BLD-00965 AND NEW ACCESSORY BUILDING 120SF WITH COVERED PATIO 21BLD-00967)
5,996
21BLD-01006 9/28/2021 Residential New - SF Finaled 2-STORY RESIDENCE ~2095 SF WITH BASEMENT ~1447 SF AND ATTACHED GARAGE ~228 SF. **Do not issue-grading permit required** 3,770 21BLD-01192 1/3/2022 Residential New - SF Permit Issued 2-STORY SFR (2564 SF) WITH BASEMENT (1636 SF) 400 AMP ELECTRICAL SERVICE, HEAT PUMP AND TRASH ENCLOSURE. 4,530
21BLD-01391 4/8/2022 Residential New - SF Permit Issued TWO STORY HOUSE (3938 SF), ATTACHED GARAGE (237 SF) , FULL BASEMENT (3511 SF)***The approved plans and document are for permit #21BLD-01393*** 7,686 Item 9
Attachment A - Second
Supplement to
Development Impact Fee
Justification AB 602

Item 9: Staff Report
Pg.
24 Packet Pg. 226 of 435

21BLD-01621 1/20/2022 Residential New - SF Finaled 2-STORY HOUSE (3127 SF) WITH ATTACHED GARAGE (215 SF) WITH LANDSCAPE 3,342 21BLD-01684 1/13/2022 Residential New - SF Permit Issued TWO STORY SFR 2550 SF 20PLN-00239 2,776 21BLD-01805 12/8/2021 Residential New - SF Finaled 1-STORY HOUSE (2254 SF) WITH ATTACHED GARAGE (418 SF) 2,672 21BLD-01821 10/14/2021 Residential New - SF Permit Issued 2 STORY SINGLE FAMILY RESIDENCE (5330 SF) WITH PARTIAL BASEMENT (1831 SF) WITH BREEZEWAY, ATTACHED ADU (800 SF) **Grading permit required** 7,161 21BLD-01956 12/1/2021 Residential New - SF Permit Issued SFR (2521 SF) WITH ATTACHED GARAGE (226 SF) 200 AMP ELECTRICAL SERVICE, HEAT PUMP AND HEAT PUMP WATER HEATER. 2,747
21BLD-02207 12/15/2021 Residential New - SF Finaled SINGLE STORY RESIDENCE 2202 SF. & ATTACHED GARAGE 514 SF WITH 579 S.F.

COVERED PORCHES 2,716
21BLD-02385 2/2/2022 Residential New - SF Finaled 2-STORY HOUSE ~3258 WITH ATTACHED GARAGE ~200 3,458 21BLD-02434 6/21/2022 Residential New - SF Permit Issued NEW SFR (2865 SF) WITH BASEMENT (2805 SF) AND ATTACHED GARAGE (564 SF)

TO INCLUDE HEAT PUMP, HEAT PUMP WATER HEATER, OUTDOOR KITCHEN AND 400 AMP ELECTRICAL SERVICE.
6,235
21BLD-02783 10/20/2022 Residential New - SF Permit Issued TWO-STORY SINGLE FAMILY HOME WITH A SINGLE STORY (3,554 SF), ATTACHED GARAGE (789 SF), BASEMENT (1625 SF) [DETACHED ACCESSORY UNIT IN REAR YARD (691 SF) on separate permit]
5,968
21BLD-02944 2/17/2022 Residential New - SF Finaled RES: SINGLE STORY SFR (3158 SF) WITH ATTACHED GARAGE (462 SF), HEAT PUMP AND HEAT PUMP WATER HEATER. 3,620
21BLD-03052 6/7/2022 Residential New - SF Permit Issued ONE STORY HOUSE 2,253 SF, WITH ATTACHED GARAGE 310 SF 2,563 22BLD-00019 5/11/2022 Residential New - SF Permit Issued SFR 2,778 SF WITH ATTACHED SINGLE STALL GARAGE. GRADING, LANDSCAPING, & HARDSCAPE PER CIVIL & LANDSCAPE DRAWINGS. 2,778 22BLD-00107 4/28/2022 Residential New - SF Permit Issued RES: 3,954 SF. 2-STORY, 3-BED, 3.5 BATH SFR 4,208 22BLD-00129 10/24/2022 Residential New - SF Permit Issued TWO-STORY HOUSE (2420 SF), WITH ATTACHED GARAGE (434 SF), PORCH (221 SF) 2,854
22BLD-00302 8/18/2022 Residential New - SF Permit Issued TWO-STORY HOUSE 4655 SF, WITH ATTACHED TWO-CAR GARAGE (424 SF).

ALSO PERMIT 22BLD-00302, 22BLD-00303 AND 22BLD-00304 5,079 22BLD-00433 8/24/2022 Residential New - SF Permit Issued 2-STORY HOUSE ~2244 SF AND 434 SF ATTACHED GARAGE 2,675 22BLD-00502 7/13/2022 Residential New - SF Permit Issued Res: 2-STORY SFR (2489 SF) WITH ATTACHED GARAGE (263 SF) TO INCLUDE HEAT PUMP, HEAT PUMP WATER HEATER AND 200 AMP ELECTRICAL SERVICE. 2,752 22BLD-00603 6/5/2023 Residential New - SF Permit Issued SFR 2119 SF WITH BASEMENT 1758 SF AND ATTACHED GARAGE 347 SF 4,224 22BLD-00773 6/23/2022 Residential New - SF Permit Issued NEW 2-STORY SFR (2,600 SF) WITH CONDITIONED BASEMENT (1,700 SF) AND ATTACHED GARAGE (400 SF) TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATER, OUTDOOR KITCHEN, OUTDOOR FIREPLACE, AND 400 AMP ELECTRICAL SERVICE.
4,700
22BLD-00781 12/7/2022 Residential New - SF Permit Issued Res: ONE-STORY SFR ~1448 SF 1,448 22BLD-00992 9/6/2022 Residential New - SF Permit Issued RES: 2-STORY SFR (4,018 SF) WITH HEAT PUMP AND HEAT PUMP WATER HEATER. 400 AMP ELECTRICAL SERVICE, EVCS 4,018
22BLD-01044 10/25/2022 Residential New - SF Permit Issued SFR (1883 SF) WITH BASEMENT (1868 SF) 3,982 22BLD-01048 11/17/2022 Residential New - SF Permit Issued Res: TWO STORY SFR 21PLN-00144 3,244 22BLD-01165 7/11/2023 Residential New - SF Permit Issued SFR: (3092 SF), ATTACHED GARAGE (231 SF) AND ATTACHED PORCH (76 SF) 3,323 22BLD-01219 11/17/2022 Residential New - SF Permit Issued TWO STORY SFR 3026 SF WITH ATTACHED GARAGE 231 SF 3,257 22BLD-01368 2/22/2023 Residential New - SF Permit Issued TWO STORY HOUSE (2515 SF)WITH ATTACHED GARAGE (247 SF) AND UNCOVERED PARKING SPACE 2,772
22BLD-01371 9/27/2022 Residential New - SF Finaled NEW ONE-STORY HOUSE (717 SF) WITH 2 ATTACHED GARAGE (390 SF) 1,107 22BLD-01580 12/1/2022 Residential New - SF Permit Issued 1-STORY HOUSE WITH 2646 OF HABITABLE AREA, WITH ATTACHED GARAGE 227 SF, 87SF PORCH 2,873
22BLD-01643 11/4/2022 Residential New - SF Permit Issued NEW CONSTRUCTION OF A SINGLE STORY 3 BED AND 3 BATH HOUSE.

DETACHED GARAGE / ADU UNDER PERMIT 1,948
22BLD-01675 3/7/2023 Residential New - SF Permit Issued RES: SINGLE STORY HOME OF ~3436 SF. 3,436 22BLD-01760 4/19/2023 Residential New - SF Permit Issued TWO STORY SFR 3239 SF WITH BASEMENT 1368 SF 21PLN-00337 4,607 22BLD-01880 8/1/2022 Residential New - SF Finaled
NEW SINGLE STORY SFR 1500SF WITH ATTACHED GARAGE 232 SF ***THIS PERMIT RECORD WILL TAKE PLACE OF 16000-02545, REFERENCE REVIEW, FEE, DOCUMENT AND INSPECTION HISTORY IN 16000-02545
1,732
22BLD-01882 10/20/2022 Residential New - SF Permit Issued SINGLE STORY SFR (2399 SF) WITH ATTACHED GARAGE (226 SF) HEAT PUMP, HEAT PUMP WATER HEATER, 200 AMP ELECTRICAL SERVICE. 2,625 22BLD-02107 12/14/2022 Residential New - SF Permit Issued RES: 2-STORY SFR (3070 SF) WITH ATTACHED GARAGE (228 SF) HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 400 AMP ELECTRICAL SERVICE. 3,298 22BLD-02191 5/2/2023 Residential New - SF Permit Issued 2-STORY SFR (3515 SF) WITH BASEMENT (2,275 SF) ATTACHED GARAGE (227 SF) HEAT PUMP, HEAT PUMP WATER HEATER, AND 400 AMP ELECTRICAL SERVICE. 6,017 22BLD-02198 4/12/2023 Residential New - SF Permit Issued BUILD SFR (3108 SF) WITH ATTACHED GARAGE (455 SF) HEAT PUMP, HEAT PUMP WATER HEATER, SOLAR WATER HEATER, PV (5.1 kW) 12 MODULE SYSTEM, EVCS (32 AMP/ LEVEL 2) AND 400 AMP ELECTRICAL SERVICE.
3,563
22BLD-02407 8/28/2023 Residential New - SF Permit Issued RES: 2-STORY SFR WITH ATTACHED GARAGE, HEAT PUMPS, HEAT PUMP WATER HEATER AND 400 AMP ELECTRICAL SERVICE. 2,930
22BLD-02890 3/29/2023 Residential New - SF Permit Issued NSFR ~4,422 S.F.WITH ATTACHED TWO CAR GARAGE ~ 574 S.F. 4,996 22BLD-02965 8/28/2023 Residential New - SF Permit Issued CONSTRUCTION OF A NEW TWO STORY HOME ~2270 SF W/ ATTACHED ONE CAR GARAGE & AN ATTACHED ADU ~797SF. 2,470
22BLD-03061 8/9/2023 Residential New - SF Permit Issued RES: BUILD SFR WITH HEAT PUMP, HEAT PUMP WATER HEATER, LANDSCAPING, AND 200 AMP ELECTRICAL SERVICE. 2,623
22BLD-03081 6/22/2023 Residential New - SF Permit Issued 2-STORY SFR (3327 SF) WITH ATTACHED GARAGE, ENCLOSED HEAT PUMPS, HEAT PUMP WATER HEATER, GREY WATER SYSTEM, AND 400 AMP ELECTRICAL SERVICE.
3,327
22BLD-03175 8/22/2023 Residential New - SF Permit Issued CONSTRUCTION OF A NEW TWO-STORY 3,824 SF HOUSE WITH 2,166 SF BASEMENT. NEW COVERED PORCHES, HARDSCAPING AND LANDSCAPING. (shares plans with new garage 22BLD-03176)
5,990
22BLD-03217 6/30/2023 Residential New - SF Permit Issued CONSTRUCT A NEW 1 STORY SINGLE FAMILY RESIDENCE WITH ATTACHED GARAGE. 2,623
22BLD-03252 7/12/2023 Residential New - SF Permit Issued NEW 2-STORY SFR (2096 SF) WITH ATTACHED GARAGE (449 SF) HEAT PUMP WATER HEATER, AND 200 AMP UNDERGROUND ELECTRICAL SERVICE.2,545 23BLD-00219 6/28/2023 Residential New - SF Permit Issued RES: TWO STORY SFR 2966 22PLN-00389 2,966 23BLD-00422 9/5/2023 Residential New - SF Permit Issued CONSTRUCTION OF A (N) SINGLE STORY SFD OF ~2,372 INCLUDING A ONE CAR ATTACHED GARAGE 2,372
23BLD-00490 7/18/2023 Residential New - SF Permit Issued SFR (1831 SF) WITH HEAT PUMP, ELECTRICAL WATER HEATER, AND 200 AMP ELECTRICAL SERVICE. 1,831
23BLD-00563 7/3/2023 Residential New - SF Permit Issued New two-story house ~2398 sf. (permits 23bld-00564/00565 are part of this plan set) 2,398
Item 9
Attachment A - Second
Supplement to
Development Impact Fee
Justification AB 602

Item 9: Staff Report
Pg.
25 Packet Pg. 227 of 435

20000-00706 9/25/2020 Residential New - SF Finaled NEW SINGLE FAMILY ONE-STORY HOUSE 2430 SF. **DETACHED GARAGE UNDER SEPARATE PERMIT** 2,430
20000-00703 1/21/2022 Residential New - SF Permit Issued ONE STORY HOUSE ~3524 SF WITH BASEMENT ~3551 SF AND ATTACHED GARAGE ~225 SF (needs grading permit) 3,749
Average Sq. Ft. 3,602
Item 9
Attachment A - Second
Supplement to
Development Impact Fee
Justification AB 602

Item 9: Staff Report
Pg.
26 Packet Pg. 228 of 435

20000-00728 10/15/2020 Residential New - MF Finaled 59
WILTON COURT APARTMENTS: NEW 4-STORY, MULTIFAMILY AFFORDABLE HOUSING COMPLEX (56,143

SF) TO INCLUDE LAUNDRY FACILITIES, COMMUNITY SPACES, PROPERTY MANAGEMENT OFFICES, SUPPORT SPACES AND PARKING AT THE BASEMENT AND GRADE LEVEL. SOLAR WATER HEATING UNITS AT ROOF LEVEL. SITE WORK TO INCLUDE BIO TREATMENT AREA WITH ASSOCIATED FENCING, OUTDOOR BBQ/KITCHEN AREA, BIKE RACKS AND SEATING AREAS.

WILTON COURT APARTMENTS: INSTALL (N) SOLAR WATER HEATING SYSTEM 2,495 952 3.73% 35
18000-03077 2/14/2020 Residential New - MF Permit Issued 57 NEW FOUR STORY APARTMENT BUILDING (37,929 SF) WITH 57 UNITS AND ONE LEVEL OF UNDERGROUND PARKING (15,593 SF). THERE IS ONE WATER AND GAS METER FOR THE BUILDING WITH SEPARATE ELECTRIC METERS PER APARTMENT.
*** U&O REQUIRED ***
37,929 665 3.60% 24
22BLD-02633 8/10/2023 Residential New - MF Permit Issued 6 MF: BLDG 3: CONDOMINIUM BUILDING TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 600 AMP ELECTRICAL SERVICE. 10,362 1,727 0.38% 7
22BLD-02634 TBD Residential New - MF Permit Not Yet Issued 6 MF: BLDG 1: CONDOMINIUM BUILDING TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 600 AMP ELECTRICAL SERVICE. 10,362 1,727 0.38% 7
22BLD-02636 TBD Residential New - MF Permit Not Yet Issued 6 MF: BLDG 4: CONDOMINIUM BUILDING TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 600 AMP ELECTRICAL SERVICE. 10,102 1,684 0.38% 6
22BLD-02637 TBD Residential New - MF Permit Not Yet Issued 6 MF: BLDG 5: CONDOMINIUM BUILDING TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 600 AMP ELECTRICAL SERVICE. 10,102 1,684 0.38% 6
22BLD-03149 TBD Residential New - MF Permit Not Yet Issued 102 ****SAFEBUILT*****LINK APARTMENTS: BUILD NEW FOUR STORY 102 UNIT APARTMENTS WITH RETAIL SPACE ON THE GROUND FLOOR AND A BELOW GRADE PARKING GARAGE 19PLN-00079 (UPDATE 4/24:

GRADING PERMIT REQUIRED PRIOR TO BLD ISSUANCE, AHMAD)
92,736 909 6.44% 59
22BLD-02635 10/3/2023 Residential New - MF Permit Issued 6 MF: BLDG 2: CONDOMINIUM BUILDING TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 600 AMP ELECTRICAL SERVICE. 10,362 1,727 0.38% 7
22BLD-02638 12/18/2023 Residential New - MF Permit Issued 6 MF BLDG 6: CONDOMINIUM BUILDING TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 600 AMP ELECTRICAL SERVICE. 10,362 1,727 0.38% 7
22BLD-02639 12/18/2023 Residential New - MF Permit Issued 6 MF BLDG 3: CONDOMINIUM BUILDING TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 600 AMP ELECTRICAL SERVICE. 10,102 1,684 0.38% 6
22BLD-02640 12/18/2023 Residential New - MF Permit Issued 6 MF BLDG 8: CONDOMINIUM BUILDING TO INCLUDE HEAT PUMPS, HEAT PUMP WATER HEATERS, AND 600 AMP ELECTRICAL SERVICE. 10,102 1,684 0.38% 6
22BLD-02330 1/24/2024 Residential New - Mixed Use Permit Issued 50 MF: BUILD 4-STORY AFFORDABLE HOUSING COMPLEX (45, 411 SF) WITH SUPPORTING SPACE ON THE GROUND FLOOR. VARIOUS LANDSCAPE AND SITE IMPROVEMENTS. 2000 AMP ELECTRICAL SERVICE.

DEMOLITION OF EXISTING BUILDING DONE UNDER SANTA CLARA COUNTY JURISDICTION. 38,348 767 3.16% 24
18PLN-00043 TBD - Entitled 4 190 CHANNING AV 4,551 1,138 0.25% 3 19PLN-00079 TBD - Entitled 102 788 SAN ANTONIO AVE 83,466 818 6.44% 53 19PLN-00347 TBD - Withdrawn 4 486 HAMILTON AVE 5,375 1,344 0.25% 3 21PLN-00108 TBD - Withdrawn 91 200 PORTAGE 194,128 2,133 5.75% 123 21PLN-00341 TBD - Under Review 70 660 UNIVERSITY 39,876 570 4.42% 25 22PLN-00201 TBD - Under Review 12 739 SUTTER AVE 18,256 1,521 0.76% 12 22PLN-00229 TBD - Entitled 129 3001 EL CAMINO REAL 88,872 689 8.15% 56 23PLN-00010 TBD - Under Review 76 800 SAN ANTONIO RD 89,228 1,174 4.80% 56 23PLN-00058 TBD - Entitled 16 420 ACACIA 33,833 2,115 1.01% 21 23PLN-00136 TBD - Under Review 380 3150 EL CAMINO REAL 441,817 1,163 24.01% 279 24PLN-00012 TBD - Under Review 44 3265 EL CAMINO REAL 24,256 551 2.78% 15 12000-02374 12/10/2013 Residential New - MF Finaled 82
PARK PLAZA: NEW THREE STORY MIXED USE BUILDING WITH ONE LEVEL UNDERGROUND PARKING.

AREA OF UNDERGROUND GARAGE 104,000 SF. COMMERCIAL WARM SHELL ON THE FIRST FLOOR (47,000 SF) AND RESIDENTIAL ON THE SECOND AND THIRD FLOOR (101,500 SF) 82 RESIDENTIAL UNITS. PERMIT ORIGINALLY ISSUED FOR FOUNDATION ONLY. REMAINDER OF STRUCTURE UNDER 13REV-00764 AND

WAS OPENED FOR THOSE DEPARTMENTS WHICH STILL HAD COMMENTS AT ISSUANCE OF FOUNDATION ONLY PERMIT.
101,500 1,238 5.18% 64
Total Res Sq. Ft.Ave. Sq. Ft. per
Unit
Percent of
Total Units
Combined
Weighted
Average
Building Permit Data - Multi-Family Residential
Permit No. Date Issued Construction Type Description Status Units Description Item 9
Attachment A - Second Supplement
to Development Impact Fee
Justification AB 602

Item 9: Staff Report
Pg.
27 Packet Pg. 229 of 435

14000-01528 2/13/2015 Residential New - Mixed Use Finaled 70 STANFORD AFFORDABLE HOUSING: NEW FOUR (4) STORY MIXED USE BUILDING (128,682 SF). FIRST FLOOR INCLUDES PARKING (14,900 SF) AND COMMERCIAL SPACE (33,034 SF). FLOORS 2-4 CONSIST OF 70 RESIDENTIAL UNITS (80,748 SF). STRUCTURE CONSISTS OF TWO SEPARATE BUILDINGS CONNECTED BY A WALKWAY. U&O SUBMITTED FOR APARTMENTS.
80,748 1,154 4.42% 51
14000-01553 7/14/2015 Residential New - MF Finaled 58
MULTI-FAMILY BUILDING 1: NEW FOUR STORY MULTI-FAMILY BUILDING WITH 58 UNITS AND ONE LEVEL OF BASEMENT FOR PARKING. AREA BREAKDOWN - UNITS: 69,510 SF, COMMUNITY ROOM: 1,133 SF, PARKING: 45,713 SF, COVERED WALKWAYS/STAIRS: 36,165 SF. INCLUDES PLAZA SURROUNDING FITNESS

BUILDING
69,510 1,198 3.66% 44
14000-01554 7/14/2015 Residential New - MF Finaled 54
MULTI-FAMILY BUILDING 2: NEW FOUR STORY MULTI-FAMILY BUILDING WITH 54 UNITS. PARKING IS LOCATED ON THE PARTIALLY SUBMERGED FIRST FLOOR. AREA BREAKDOWN - UNITS: 70,634 SF, LIBRARY: 1,400 SF, PARKING: 50,783 SF, COVERED WALKWAYS/STAIRS: 27,308 SF. 70,634 1,308 3.41% 45
16000-01781 11/22/2016 Residential New - MF Finaled 11 NEW 11 UNIT MULTIFAMILY RESIDENTIAL BUILDING. 17968 SF (BASEMENT/UNDERGROUND GARAGE UNDER 15000-03076) **address changed to 430 Forest, Apts A-J & 432 Forest for 3rd floor condo**17,968 1,633 0.69% 11 12000-01204 2/28/2013 Residential New - MF Finaled 8 NEW THREE STORY MIXED USE BUILDING. WITH UNDERGROUND PARKING, FIRST FLOOR OFFICE SPACE AND EIGHT TWO-STORY RENTAL APARTMENT UNITS ON THE SECOND & THIRD FLOORS.14,271 1,784 0.51% 9 13000-03361 8/26/2015 Residential New - MF Finaled 6
NEW THREE STORY, SIX (6) UNIT TOWNHOUSE BUILDING. ALL SIX UNITS HAVE THE SAME SQUARE FOOTAGE: AREA PER UNIT RESIDENTIAL: 1237 SF, GARAGE: 460 SF. ALL UNITS TO HAVE SEPARATE WATER, GAS, AND ELECTRIC METERS. **Application extended to 9/10/15** 7,425 1,238 0.38% 5
07000-00000-027551/23/2013 Residential New - MF Permit Issued 3 NEW 3-UNIT CONDO BLDG (3795 SF) WITH ATTACHED GARAGES (1044 SF) no fees per settlement with CPA 3,795 1,265 0.19% 2
07000-00000-027561/23/2013 Residential New - MF Permit Issued 3 NEW 3-UNIT CONDO BLDG (3795 SF) WITH ATTACHED GARAGES (1044 SF) no fees per settlement with CPA 3,795 1,265 0.19% 2
11000-03261 6/14/2013 Residential New - Duplex Finaled 2 NEW 2-STORY RESIDENCIAL DUPLEX WITH BASEMENT AND ATTACHED GARAGE. (DEMO PERMIT UNDER 11-3262) ADDRESS CHANGE SUBMITTED 12.10.14 JC 3,405 1,703 0.13% 2 12000-02841 5/14/2013 Residential New - Mixed Use Permit Issued 2

NEW THREE STORY MIXED-USE BUILDING WITH COMMERCIAL AND PARKING AT THE GROUND FLOOR AND TWO RESIDENTIAL CONDOMINIUM UNITS ABOVE. TRASH ENCLOSURE AND SITE IMPROVEMENTS. (TI FOR FIRST FLOOR TO BE SHALL BE A SEPARATE PERMIT)ADDITIONAL ADDRESS REQUESTED

06.04.2014 JC
3,840 1,920 0.13% 2
13000-02317 2/26/2014 Residential New - Mixed Use Finaled 2 CORE AND SHELL INCLUDES 4 LEVELS ABOVE GRADE FOR MIXED USE; FIRST 3 LEVELS COMMERCIAL AND 4TH FOR RESIDENTIAL. INCLUDES 3 LEVELS BELOW GRADE PARKING. TENANT IMPROVEMENTS UNDER SEPARATE PERMITS.**VALUATION INCREASED ON MAIN PERMIT FOR 15REV-00134 BY $250K AND ASSOCIATED FEES COLLECTED.**
4,831 2,416 0.13% 3
13000-02823 9/17/2014 Residential New - Mixed Use Finaled 2 BUILD (N) (10,299 SF) FOUR-STORY, MIXED USE COMMERCIAL/RESIDENTIAL (APTS) BUILDING W/BELOW GRADE PARKING. (DEMO ON 13000-02824) PV & EV TO BE SUBMITTED SEPARATELY. 5,477 2,739 0.13% 3 13000-03386 7/11/2016 Residential New - Duplex Finaled 2 NEW DUPLEX 2-STORY MAIN RESIDENCE WITH BASEMENT ~4600SF. (DEMO UNDER 13-3387) (567 STANFORD AVE, ATTACHED SECOND DWELLING UNIT ~ 748SF (13-3401 : NEW DETACHED GARAGE ~427 SF)
4,600 2,300 0.13% 3
14000-01488 11/21/2014 Residential New - Mixed Use Finaled 2 NEW 4-STORY MIXED USE COMMERCIAL / RESIDENTIAL STRUCTURE ~17500SF. (14-1489- DEMO COMMERCIAL STRUCTURE) 3,005 1,503 0.13% 2
14000-01582 3/3/2017 Residential New - Duplex Finaled 2 LOTS 26 AND 27: PLANS 11 AND 12, ELEVATION: K, STYLE: ENGLISH ARTS AND CRAFTS. THE STRUCTURE ON LOTS 26 AND 27 ARE ATTACHED SINGLE FAMILY DWELLINGS AND IS BEING BUILT AND PLAN CHECKED AS A SINGLE STRUCTURE, AREA OF HABITABLE 4,168 SF, AREA OF GARAGE 976 SF, AND AREA OF COVERED PORCHES 155 SF. FOR LOT 26 (PLAN 11) AREA OF HABITABLE 1951 SF, AREA OF GARAGE 520 SF, AND AREA OF COVERED PORCH IS 93 SF. FOR LOT 27 (PLAN 12) AREA OF HABITABLE 2,217 SF, AREA OF GARAGE IS 456 SF, AND AREA OF COVERED PORCH IS 68 SF. Lot 26 previously plan 5 and plan checked under 14000-01562
4,168 2,084 0.13% 3
14000-01584 3/3/2017 Residential New - Duplex Finaled 2 LOTS 28 AND 29: PLANS 11 AND 12, ELEVATION: L, STYLE: LANE WOODS. THE STRUCTURE ON LOTS 26 AND 27 ARE ATTACHED SINGLE FAMILY DWELLINGS AND IS BEING BUILT AND PLAN CHECKED AS A SINGLE STRUCTURE, AREA OF HABITABLE 4,168 SF, AREA OF GARAGE 976 SF, AND AREA OF COVERED PORCHES 155 SF. FOR LOT 28 (PLAN 11) AREA OF HABITABLE 1951 SF, AREA OF GARAGE 520 SF, AND AREA OF COVERED PORCH IS 93 SF. FOR LOT 29 (PLAN 12) AREA OF HABITABLE 2,217 SF, AREA OF GARAGE IS 456 SF, AND AREA OF COVERED PORCH IS 68 SF. Lot 28 was previously Plan 5. Plan check being done for same model under 14000-01603 (lots 47 and 48) 4,168 2,084 0.13% 3
14000-01588 3/3/2017 Residential New - Duplex Finaled 2 LOTS 32 AND 33: PLANS 11 AND 12, ELEVATION: L, STYLE: LANE WOODS. THE STRUCTURE ON LOTS 26 AND 27 ARE ATTACHED SINGLE FAMILY DWELLINGS AND IS BEING BUILT AND PLAN CHECKED AS A SINGLE STRUCTURE, AREA OF HABITABLE 4,168 SF, AREA OF GARAGE 976 SF, AND AREA OF COVERED PORCHES 155 SF. FOR LOT 32 (PLAN 11) AREA OF HABITABLE 1951 SF, AREA OF GARAGE 520 SF, AND AREA OF COVERED PORCH IS 93 SF. FOR LOT 33 (PLAN 12) AREA OF HABITABLE 2,217 SF, AREA OF GARAGE IS 456 SF, AND AREA OF COVERED PORCH IS 68 SF. Lot 32 was previously Plan 8. Plan check being done for same model under 14000-01603 (lots 47 and 48) 4,168 2,084 0.13% 3
Item 9
Attachment A - Second Supplement
to Development Impact Fee
Justification AB 602

Item 9: Staff Report
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14000-01603 3/3/2017 Residential New - Duplex Finaled 2 LOTS 47 AND 48: PLANS 11 AND 12, ELEVATION: K, STYLE: ENGLISH ARTS AND CRAFTS. THE STRUCTURE ON LOTS 26 AND 27 ARE ATTACHED SINGLE FAMILY DWELLINGS AND IS BEING BUILT AND PLAN CHECKED AS A SINGLE STRUCTURE, AREA OF HABITABLE 4,168 SF, AREA OF GARAGE 976 SF, AND AREA OF COVERED PORCHES 155 SF. FOR LOT 47 (PLAN 11) AREA OF HABITABLE 1951 SF, AREA OF GARAGE 520 SF, AND AREA OF COVERED PORCH IS 93 SF. FOR LOT 48 (PLAN 12) AREA OF HABITABLE 2,217 SF, AREA OF GARAGE IS 456 SF, AND AREA OF COVERED PORCH IS 68 SF. Lot 47 was previously lot 6X and plan check and plan check fees for this lot number are still in reference to plan 6X. Currently the only plan 6X is now Lot 53.
4,168 2,084 0.13% 3
15000-01683 9/25/2015 Residential New - Duplex Finaled 2 125 AND 127 HAWTHORNE: NEW TWO STORY DUPLEX (3234 SF) WITH ATTACHED GARAGE (458 SF) AND TRELLIS (185 SF). SCOPE OF WORK INCLUDES NEW TANKLESS WATER HEATERS. EACH UNIT HAS 1617 SF CONDITIONED AND 229 SF GARAGE.
3,234 1,617 0.13% 2
16000-02134 11/22/2016 Residential New - Duplex Finaled 2 NEW 2 UNIT DETACHED CONDO BUILDING (4495 SF) WITH ATTACHED GARAGE 778 SF **address changed to 434 & 436 Forest for 2 attached townhouse units** 4,495 2,248 0.13% 3 16000-02768 8/7/2017 Residential New - MF Finaled 2 NEW 3 STORY (2) UNIT CONDO 5608 SF W/ ATTACHED GARAGE 920SF 5,608 2,804 0.13% 4 14000-01000 9/11/2015 Residential New - Mixed Use Finaled 1 NEW 9571 SQ FT (3) STORY MIXED USE BUILDING TO INCLUDE A GROUND FLOOR FINANCIAL SERVICE, SECOND FLOOR OFFICE SPACE AND THIRD FLOOR RESIDENTIAL SINGLE UNIT; SHELL AND CORE WITH M.E.P., LANDSCAPING AND SITE IMPROVEMENTS. DEMO EXISTING SINGLE STORY RESTAURANT ON 14000-01001
3,336 3,336 0.06% 2
13000-03096 7/17/2014 Residential New - Mixed Use Finaled 1 COLD SHELL FOR NEW THREE STORY MIXED USE BUILDING (7705 SF). FIRST STORY IS GARAGE AND LOBBY (2438 SF), SECOND FLOOR IS COMMERCIAL (2165 SF), AND THE THIRD FLOOR IS RESIDENTIAL (2152 SF). SEPARATE PERMIT WILL BE SUBMITTED FOR BUILD OUT OF COMMERCIAL AND RESIDENTIAL FLOORS. ELECTRIC SERVICE TO BE 500 AMPS. DEMO PERMITS UNDER 13-3097/3098/3099. LOT LINE MUST BE ADJUSTED AND UTILITY EASEMENT CREATED PRIOR TO PERMIT ISSUANCE. 2,152 2,152 0.06% 1
16000-00632 4/12/2017 Residential New - Mixed Use Finaled 16

CONSTRUCTION OF A NEW THREE STORY MIXED USE BUILDING WITH ONE LEVEL OF UNDERGROUND PARKING (71,075 SF). SCOPE OF WORK INCLUDES 16 APARTMENTS ON THE SECOND AND THIRD FLOORS, OFFICE ON THE SECOND FLOOR, AND RETAIL ON THE FIRST FLOOR. RESIDENTIAL UNITS TO HAVE

SEPARATE ELECTRICAL METERS AND SHARED GAS METERS
19,086 1,193 1.01% 12
Weighted Average Sq. Ft. 1,124
Item 9
Attachment A - Second Supplement
to Development Impact Fee
Justification AB 602

Item 9: Staff Report
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Item 9
Attachment A - Second
Supplement to
Development Impact Fee
Justification AB 602

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Summary of Previous Work Performed for the City
A Development Impact Fee Justification Study
On January 15, 2021, DTA issued a Development Impac t Fee (“DIF” or “Fee”) Justification Study (the “Study”) to the City of Palo Alto (the “City”), reflecting the updated fee recommendations outlined in Table 1 below. The Stu dy was reviewed by the City’s Finance Committee, Parks and Recreation Commission, and City Council on December 12, 2020, February 23, 2021, and April 12, 2021, respectively. The fees recommended in the Study were approved by the City Council and implemented as of August 23, 2021, with the understanding that DTA would evaluate the impact of various City Council recommendations on the fee calculations and provide an update to the Study accordingly.

Table 1: 2021 Development Impact Fee Summary Adopted by the City Council 1,2 Land Use Type 3 Park Community
Center Library Total Fees
Single-Family
Residential (Per Unit) $57,420 $4,438 $2,645 $64,504
Multi-Family Residential
(Per Unit) $42,468 $3,283 $1,956 $47,707
*Notes :

1. Some figures may not sum due to rounding.

2. Fees increase annually by adopted escalator to acco unt for inflation in acquisition and construction costs.

3. Only residential fees are shown, as the focus of this analysis is on the impact of AB 602 on residential development.

B First Supplement to the Development Impact Fee Justification Study In January 2022, the City requested that DTA prepare the follow-up analysis outlined in the Supplement to the Development Impact Fee Justification Study (the “Supplement”) that was brought to the Parks and Recreation Commis sion, Finance Committee, and City Council on February 22, 2022, May 3, 2022, and June 13, 2022, respectively. This Supplement addressed the items below:

Task A – Update land acquisition costs;
Task B – Differentiate the fee structure for retail space versus office space; Task C – Update office density from 250 sq. ft. per employee to 190 sq. ft. per employee;
Task D – Recommend the frequency with which these s chedules should be updated;
Task E – Evaluate whether the multi- and single-family fee categories should be divided into multiple categories based on total squ are feet or some other measure; and
Task F – Evaluate options for a reduction in fees for new multi-family housing construction for projects that exceed required percentages of below market rate (“BMR”) units.

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Attachment A - Second
Supplement to
Development Impact Fee
Justification AB 602

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***NOT YET APPROVED***
1 0160153_kb2_20240829_ay
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending the Fiscal Year 2025 Municipal Fee Schedule to Transition Certain Development Impact Fees from Per-Unit to Per-Square Foot Fees
The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Findings and Declarations. The City Council finds and declares as follows:

A. On September 28, 2021, the Governor of the State of California signed Assembly Bill 602, effective January 1, 2022, amending the Mitigation Fee Act (California Government Code Section 66000 et seq.). AB 602 set forth a number of standards and practices for a local government conducting a nexus study to support a development impact fee.

B. One of the requirements of AB 602 is that a study adopted after July 1, 2022 must either calculate the proposed fee proportionately to the square footage of the proposed units or make specified findings explaining why square footage is not an appropriate metric.

C. The City of Palo Alto currently imposes Park, Community Center, and Library development impact fees on a per-dwelling unit basis.

D. Program 3.1 (Fees Waivers and Adjustments) of the City of Palo Alto 2023-2031 Housing Element calls for development impact fees for residential development to be converted from a per-dwelling unit to a per-square foot standard.

E. The City Council has determined that square footage is an appropriate metric for calculating Park, Community Center, and Library development impact fees imposed on residential development and desires to amend the Fiscal Year 2025 Municipal Fee Schedule accordingly.

SECTION 2. The Council of the City of Palo Alto amends the Fiscal Year 2023 Municipal Fee Schedule by adopting the new fee for on-demand transit as set forth in Exhibit “A” and incorporated here by reference.

SECTION 3. The Council finds that this ordinance is not a “project” under CEQA because it has no potential for resulting in either a direct or reasonably foreseeable indirect change in the environment.
//
//
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Item 9
Attachment B - ORD
Amending the Fiscal Year
2025 Municipal Fee
Schedule to Transition
Certain Development
Impact Fees from Per-
Unit to Per-Square Foot
Fees

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***NOT YET APPROVED***
2 0160153_kb2_20240829_ay
SECTION 4. This ordinance shall be effective upon adoption as an amendment to the City’s Fiscal Year 2025 budget.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:
____________________________
City Clerk
APPROVED AS TO FORM:
____________________________
Assistant City Attorney
___________________________
Mayor
APPROVED:
___________________________
City Manager
___________________________
Director of Planning and
Development Services
Item 9
Attachment B - ORD
Amending the Fiscal Year
2025 Municipal Fee
Schedule to Transition
Certain Development
Impact Fees from Per-
Unit to Per-Square Foot
Fees

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***NOT YET APPROVED***
3 0160153_kb2_20240829_ay
Attachment A
Planning and Development Services
Impact and In-Lieu Fees
Development Impact Fees - Residential
Single Family Multi-Family
Community Center Impact Fee
Note: ADUs under 750 sf exempt.
$1.45 per sq. ft. $3.44 per sq. ft.

Library Impact Fee
Note: ADUs under 750 sf exempt.

$0.87 per sq. ft. $2.05 per sq. ft.

Park Impact Fee
Note: ADUs under 750 sf exempt.

$18.78 per sq. ft. $44.50 per sq. ft.

Item 9
Attachment B - ORD
Amending the Fiscal Year
2025 Municipal Fee
Schedule to Transition
Certain Development
Impact Fees from Per-
Unit to Per-Square Foot
Fees

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TO: Palo Alto City Council (City Council)
RE: Recommendations re Agenda Item #3 (Consent Calendar item #2) “Adopt an Ordinance Amending the Municipal Fee Schedule to Modify the Calculation for Park, Community Center and Library Development Impact Fees From per Unit to per Square Feet for Residential Development. [etc.]” and Comments re Staff Report 2408-3404 (Staff Report) DATE: Sept. 22, 2024
FROM: John Kelley

RECOMMENDATION
Because the Staff Report and its attachments fail to provide essential information, present a restricted set of policy options, and contain apparent inconsistencies, the City Council should (a) defer consideration of this matter, (b) solicit additional data and other input, and (c) direct City Staff to present a revised report before reconsidering this matter in early November.

DISCUSSION
While a half-step forward in the right direction, the
proposed ordinance does not take Palo Alto far enough to end its inequitable, irrational, and possibly improper impact fee regime.

Especially when evaluating public policies, it is vital to distinguish between a bearing and a vector. The Staff Report moves in the right direction, but not far enough.

It would be uncharitable not to recognize City Staff’s attempts to reform the Municipal Fee Schedule regarding impact fees. The City has admitted in its recently approved Housing Element that Palo Alto’s current, per-unit impact fees have “led to some inequitable results….” 1 City Staff have headed in the right direction in recommending that the City Council “modify the calculation of Park, Community Center, and Library Development Impact Fees for residential development from a per dwelling unit basis to a per square foot basis.” Staff Report, p. 2. But knowing that one must move in a certain direction is different from recognizing how far one must travel to reach one’s appropriate destination.

The newly proposed impact fees in the Staff Report remain remarkably and intolerably high. Should one building a 1400-sf apartment or condominium be required to spend almost $70,000 for supposed impacts to Palo Alto’s parks, community center facilities, and libraries? Is it fair to demand such fees from contractors and others building multi-family projects, which are generally more environmentally friendly, when those building single-family homes more than twice as large — 4000 sf — would only be 1 “ 2023-2031 Housing Element, City of Palo Alto (~July 2024, "Palo-Alto-Housing-Element-6") (Housing Element V6),” Staff Report, p. 5, Housing Element V6, p. 4-65.
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charged about 20% more, $84,000? Proposed impact fees ranging from approximately $42,000 to $84,000 for sample projects – based upon a combined, per-square-foot rate of $21.10, or higher (Staff Report, p. 4, “Table 3: Framework 1 – Distinct Rates and Sample Impact Fees”) – are economically onerous and will depress housing production.

They perpetuate implicit and explicit fiscal discrimination against smaller homes, including apartments, condominiums, etc., and act as an anti-multi-family housing tax.

Palo Alto can and should do better, and the City Council should be presented with a more robust set of policy options.

A revised report should make clear whether the proposed Municipal Fee Schedule actually embodies a per-square-foot impact analysis .

The inequitable treatment of smaller homes, whether on multi-family or single-family parcels, results not only from the comparatively enormous housing taxes placed on apartments, condominiums, and larger ADUs, but also from Palo Alto’s current policies of only imposing impact fees on “new” single-family homes. Additions, and even complete “scrapes,” receive free passes. As explained previously, 2 Under Palo Alto’s current per-unit impact fee regime as applied to parcels with existing single-family homes, a property owner substantially adding to or completely scraping a 2,000 sf primary dwelling and replacing it with a 5,000 sf or larger primary dwelling will pay no impact fees at all, whereas the builder of ten 500 sf studios — having a total of 5,000 sf — might pay over $500,000 in FY2025 for Park Impact Fees alone.

The Staff Report fails to make clear, among other things, (a) how ADUs will be treated under the proposed, new Municipal Fee Schedule, (b) whether additions to single-family homes or complete scrapes will be assessed impact fees, and (c) whether basements will be included in the calculation of square footage. From the current Staff Report, one might suppose that City Staff recommend assessing ADUs that are greater than 750 sf in size at a flat rate of $21.10 per square foot (or $16,880 for an 800-sf ADU), thus ignoring other policy alternatives (discussed below), and failing to consider the prodigious economic effects of such a housing tax on relatively smaller homes. But Staff Report’s actual treatment of single-family homes remains obscure. A single emphasized word in a footnote to Table 5, among other things, suggests that adoption of the proposed new Municipal Fee Schedule would not alter Palo Alto’s current practice of giving additions and scrapes free passes: “20 new single-family residential units in FY 2023-24.” Staff Report, p. 6, fn. 2 (emphasis in the original). What does the emphasis signify? Although actual data are not presented in the Staff Report, it is difficult to imagine that the totalnumber of single-family homes in Palo Alto constructed during FY 2023-2024 that were either (a) “ new ,” (b) “newly expanded,” or (c) scraped was only 20.

Unless otherwise indicated in an updated report, one must assume that the recommendations in the Staff Report continue to privilege single-family homes in crucial ways, thus failing to embody a truly comprehensive per-square-foot impact analysis. 2 Letter to City Council dated June 17, 2024 (June 12, 2024 Letter), Attachment A, at p. 2. 2 Item 9
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A revised report should provide vital
data upon which reasonable decisions will ultimately depend .

City Staff should be commended for at least acknowledging that the City Council could decide to further change and reduce the proposed impact fees, both to end inequities and to cease privileging single-family homes. The Staff Report notes, for example:

DTA was able to evaluate and present both frameworks due to the large sample of building permit data available from Palo Alto. Because these are proposed maximum fee levels, City Council has the discretion to determine which framework and fee level to adopt, including imposing a lower fee. Staff Report, p. 5.

That said, it is disappointing that the Staff Report does not provide the types and the requisite detail of data to evaluate vital policy alternatives. A revised report should provide:
● A revised Attachment 1, covering at least the same time periods as the current version for both single-family and multi-family homes, but also ○ including (a) new construction, (b) additions, (c) demolition permits (showing the size of existing structures being demolished), and (d) ADUs, ○ for each type of project,
■ showing impact fees actually assessed, and
■ how, if at all, they were partially assessed between new construction, scrapes, and additions, and
○ for each payment of impact fees, showing the date, fiscal year, and basis upon which the impact fees were imposed.
● A detailed explanation of how money from impact fees has been spent since the tremendous increases first went into effect in FY 2022 ( compare Staff Report, p. 3).
● Data showing changes in Palo Alto’s estimated population by year from 2020 through 2031.
○ At a fundamental level, residential impact fee analyses rest upon an assumption that demand for civic services grows with increased housing.

But there is at least anecdotal evidence that Palo Alto’s population, in addition to rapidly aging, has stabilized, if not declined, despite the residential construction detailed in the Staff Report.
● At least a brief update on the implications of Sheetz v. County of El Dorado, California , Syllabus (601 U. S. ____ (2024)), and its progeny, because that case, and likely future appellate decisions, may substantially alter the entire framework within which impact fees may be assessed. 3
3 Attachment A, at p. 2.
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A revised report should examine, and,
as necessary resolve, apparent inconsistencies in the Staff Report .

Certain statements in the Staff Report appear to be either internally or externally inconsistent.
● The Executive Summary states in part, at p. 2 of the Staff Report:
○ This amendment aligns with the City’s newly certified Housing Element and addresses Program 3.1: Fee Waivers and Adjustments, aimed at balancing the need for public facility funding with the promotion of housing affordability.
○ At the same time, the Staff Report
■ provides little information about the specifics of the asserted “need for public facility funding,” and
■ suggests that impact fees for larger multi-family units could increase from $56,206 to $69,986.00 or more. Compare Tables 2 and 3 at p. 2 of the Staff Report.
○ If City Staff believe that Program 3.1 will be advanced by imposing ever greater housing taxes on two- and three-bedroom apartments and condominiums — precisely the types of multi-family housing in which younger generations might desire to start families and into which older generations might seek to downsize, thus freeing up existing single-family homes — additional discussion and analysis would be warranted. ● In comparing the Distinct Rate and Consolidated Rate frameworks, the Staff Report states, at p. 5, “Conversion of this fee will complete one of the objectives under Program 3.1: Fee Waivers and Adjustments in the Housing Element.” Respectfully, this remains to be seen, depending, to a large extent on how other issues raised by the Staff Report are resolved.
○ “PROGRAM 3.1: FEE WAIVERS AND ADJUSTMENTS,” objective C, states in part, “By September 2024, complete and implement studies to convert existing park, community center, and library development impact fees that are applied on a per unit basis to a per square foot basis.” ○ As discussed above at p. 2, unless otherwise indicated in an updated report, the Staff Report appears to continue to privilege single-family homes in crucial ways, thus failing to embody a truly comprehensive per-square-foot impact analysis.
○ Thus, in the absence of additional information and clarification, adopting the proposed ordinance will be insufficient to satisfy the explicit requirements of Program 3.1, objective C.
● Attachment A to the Staff Report, the August 20,2024 DTA memorandum, “Second Supplement to the Development Impact Fee Justification – Assembly Bill (“AB”) 602 Compliance” (August 20,2024 DTA Memo), appears (a) not to consider ADUs as a distinct land use type, and (b) imply that the City will produce considerably fewer housing units in the 2021-2040 period than the RHNA targets in Housing Element V6. Housing Element V6, p. 2-75.
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○ Compare August 20,2024 DTA Memo, p.4, Table 3, and especially “Land Use Type” column and fn. 2, with “TABLE 2-34 ABAG’S NEW

CONSTRUCTION NEED BY HOUSEHOLD INCOME LEVEL IN PALO
ALTO, 2023-2031,” Housing Element V6, p. 2-75.
○ Given the distinct characteristics of ADUs, their relative importance in Housing Element V6 to Palo Alto’s meeting its RHNA goals, and the specificity of those goals in the Housing Element V6, such apparent inconsistencies should be resolved.

A revised report should provide the City Council with a broader range of policy alternatives and a bolder vision for advancing impact fee reform to meet Palo Alto’s commitments in the approved Housing Element V6 .

Again, City Staff should be applauded for at least noting the City Council’s power to reduce the proposed impact fees, but the Staff Report would be improved greatly were it to make additional, specific recommendations to achieve such ends, including the following:
● It could exclude 750 sf from the calculation of all impact fees, treating that size threshold as a minimum home size — whether single-family, condominium, apartment, or ADU — that should be free of all housing taxes, particularly in an era of possibly declining and likely aging population change, and reduced public school enrollment. Over the life of Housing Element V6, the real problem that Palo Alto may face is not overutilization, but rather underutilization of parks, community center facilities, and libraries. Without utilization, public support for such civic assets may wither. In these respects, a revised report ought to make clear the difference between use of impact fees for capital expenditures, as opposed to operating expenses.
● Public confidence in the overall level of impact fees requires that a revised report demonstrate (a) the actual purposes to which revenues from the greatly heightened impact fees over the last few years have been put, and (b) the specific projects that might be funded in the future after further changes are made in the Municipal Fee Schedule. Although not detailed in the Staff Report, recent annual reports on development impact fees make it difficult to assess (a) the percentage of such fees assessed on single-family homes, on the one hand, versus apartments, condominiums, and ADUs, on the other hand, and (b) the precise ways in which such funds have been used.
○ The Staff Report shows no estimated park, community center, or library impact fee revenues from multi-family homes in FY 2023-24 (Staff Report, p.6, Table 5, fn. 3).
○ The “Building Permit Data - Single-Family Residential” data in the Staff Report, August 20,2024 DTA Memo, Attachment 1, p. 6, show approximately 22 FY 2023 single-family projects, which at approximately $66,000 per project, would yield approximately $1,450,000 in impact fee revenue, but the “ City of Palo Alto Development Impact Fee Report for Period Ending June 30, 2023 ” (FY 2023 Development Impact Fee Report) 5 Item 9
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pp. 3-4, shows only about $495,000 in parks ($439,967), community center (“$34,559), and library ($20,398) impact fees collected. ○ Palo Alto’s “PROPOSED CAPITAL BUDGET, FISCAL YEAR 2023,” believed to be only an interim document, showed a proposed total of $2,300,000 to be transferred from community center, library, and parks development impact fee funds to a “Roth Building Rehabilitation Phase 1” project in FY 2023. It is unclear whether any substantial portion of such amounts were actually spent on that project or, if so, when such expenditures were made. In particular, the FY 2023 Development Impact Fee Report, p. 9, shows actual FY 2023 expenditures of about $725,000 from parks impact fees for projects at Boulware Park and Rinconada Park, and for Park Restroom Installation, without any expenditures from community center or library impact fees in FY 2023. But that report does not show the types of housing that were taxed, nor the extent of such housing taxes by type of housing, corresponding to such expenditures. ● What is needed every fiscal year is a clear and concise summary of fiscal inputs and fiscal outputs with respect to the parks, community center, and library impact fees. One should be able to know, by fiscal year, (a) what types of housing are being subjected to impact fees, (b) what amounts of impact fees, by type of housing and by type of impact fee, are being paid for each fiscal year, and (c) how those fees are ultimately being spent, whether in a current or future fiscal year. Transfers of money between different, specified funds to specific projects, capital spending plan adjustments during the course of a year, and withdrawals from and additions to reserve accounts all make it difficult for the public to understand how, and to what extent, revenues from residential housing impact fees are being raised, and how those revenues are ultimately being spent. ● Particularly because of the City’s express admission to the HCD that Palo Alto’s current, per-unit impact fees have “led to some inequitable results…,” Housing Element V6, p. 4-65, and particularly because the City has continued to charge impact fees for larger ADUs since that admission was first made — now several quarters ago — the City Council should provide refunds from the date that the City first acknowledged the problems with its current residential impact fee regime to those homeowners and others who have paid improperly large ADU impact fees. A revised report should detail the number of such projects, the amount of all such payments and estimates of the amount of such refunds.

Finally, to allow for reasonable public input in light of the HCD-approved Housing Element, the City Council should (a) direct the Planning and Transportation Commission to allow for public comment on these issues at its October 09, 2024 meeting, (b) direct City Staff to prepare a revised report, and (c) continue this matter to the City Council’s November 4, 2024 meeting.

Attachment
6 Item 9
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TO: Palo Alto City Council (City Council)
RE: Recommendations re Agenda Item #28, “PUBLIC HEARING: Adoption of Budget Ordinance for Fiscal Year 2025 [etc.]” and Comments re Staff Report 2406-3140 (Staff Report)
DATE: June 17, 2024
FROM: John Kelley

RECOMMENDATION
Because the likelihood of the City Council’s modifying the FY2025 budget tonight is low, and because Palo Alto’s impact fees are inequitable, irrational, and may fail to take account of a recent United States Supreme Court decision, the City Council should (a) thoroughly examine and revise the City’s impact fees at its first or second meeting in August and (b) recalculate the fees charged to all applicants in recent years, providing refunds as appropriate.

DISCUSSION
Palo Alto's inequitable, irrational, and possibly improper impact fee regime should be suspended or quickly changed, and refunds should be granted.

Palo Alto’s Housing Element acknowledges that the City’s current, per-unit impact fees have “led to some inequitable results….” 1 It also notes that “Palo Alto’s development impact fees/capacity fees are amongst the highest in the region for both single-family and multi-family home construction.” 2 Some members of the City Council and City Staff appear to recognize that the current per-unit impact fee regime needs to be changed. 3 Based upon the discussion at the City Council’s April 15, 2024 meeting, it appears that City Staff anticipated presenting a new proposal to the City Council in May, 2024, but, for unknown reasons — likely because of other work being undertaken by members of City Staff — it appears that this did not occur. As a result, the proposed FY 2025 budget not only maintains the same, inequitable, per-unit impact fee regime, but it also increases those fees. 4 This is an extremely unfortunate result.

What should be done about this problem? Given the City Council’s vacation schedule and the City Staff’s current workflows, it seems quite unlikely that the City Council will vote tonight to adopt a new, non-per-unit impact fee regime. Even that 4 Staff Report, Attachment A, Ex. 5, at p. 7, and Attachment A , Ex. 6,at pp. 1-2. 3 See , e.g., “ Sp. City Council Meeting, Summary Minutes : 04/15/2024,” at 11. 2 Id . at 4-2
1 “ 2023-2031 Housing Element, City of Palo Alto ,” April 2024, Adopted, at 4-64. 1 Item 9
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action, however, would be sub-optimal, because it ignores other significant problems with Palo Alto’s current approach to impact fees.

In somewhat the same way that the City Council reacted to a judicial decision concerning the use of natural gas earlier this year, the City Council could temporarily suspend impact fees until this matter can be taken up after the City Council’s vacation.

That might be the most respectful approach, especially towards current applicants. But it, too, would be incomplete.

Whether or not the City Council temporarily suspends impact fees tonight, I strongly recommend a rapid and fulsome analysis of the multiple problems presented by the current impact fee regime.
● The current regime adversely affects not only ADUs, but also apartments, condominiums, and SB9 units (collectively, New Smaller Homes). All of these, generally smaller, homes are subjected to a “Palo Alto housing tax.” For some homes, that housing tax is now approaching $80,000. If Palo Alto is committed to building both more and more affordable housing, such draconian housing taxes must end.
● As to ADUs, as mentioned above and as discussed in the attached April 14, 2024 letter to the City Council, the current impact fee regime leads to particularly inequitable results.
● In addition, as to all New Smaller Homes when compared with single-family homes, inequity becomes irrationality. Under Palo Alto’s current per-unit impact fee regime as applied to parcels with existing single-family homes, a property owner substantially adding to or completely scraping a 2,000 sf primary dwelling and replacing it with a 5,000 sf or larger primary dwelling will pay no impact fees at all, whereas the builder of ten 500 sf studios — having a total of 5,000 sf — might pay over $500,000 in FY2025 for Park Impact Fees alone. ● Moreover, the United States Supreme Court held on April 12, 2024 that the Fifth Amendment’s Takings Clause “does not distinguish between legislative and administrative land-use permit conditions.” 5 Since the United States Supreme Court vacated the judgment of the California Court of Appeal and remanded the case for further proceedings, it is not clear how emerging federal law affecting impact fees will develop. The City Council can and should, however, take notice of this decision.
● Finally, the problems with the “Palo Alto housing tax” have been known essentially since the current impact regime was put into place by a prior council a few years ago. Once a new, equitable, rational, and forward thinking approach to 5 Sheetz v. County of El Dorado, California , Syllabus (601 U. S. ____ (2024)) ( Slip Opinion , at p. 1). 2 Item 9
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impact fees has been adopted by the City Council — preferably at the first or second City Council meeting in August - all of the impact fees that have been charged since the current regime was established should be re-calculated, and the difference between the fees previously paid and those that would have been assessed under newly adopted rules should be refunded to applicants with interest.

Whether or not the City Council suspends the current impact fee regime before adopting the FY2025 budget, these issues deserve quick and thorough attention at the first or the second City Council meeting in August. At that meeting, besides adopting a new approach to impact fees, the City Council should refund the difference between the fees that applicants have paid in recent years under the current impact fee regime and the fees that would have been charged under a proper approach.

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TO: Palo Alto City Council (City Council) and Planning & Transportation Commission (PTC)
RE: Recommendations re Agenda Item #13, “Joint City Council and Planning and Transportation Commission Meeting to Adopt a Resolution Amending the Comprehensive Plan by Adopting a Revised 2023-31 Housing Element [etc.]” and Comments re Staff Report 2312-2450 (Staff Report) DATE: April 14, 2024
FROM: John Kelley

RECOMMENDATION
City Staff have improved the prior version of the 2023-2031 Housing Element (Housing Element) in important ways, but the PTC and the City Council should direct City Staff to make further changes in the revised Housing Element prior to adopting it and delivering it to the California Department of Housing and Community Development (HCD).

DISCUSSION

1. ADUs Play a Crucial Role in the City’s Housing Element The City relies heavily on accessory dwelling units (ADUs) in attempting to meet its RHNA. For example, when comparing the “ADUs” row with the “Total Unit Surplus” row in Table 3-27, “Adequacy of Residential Site Inventory,” of the revised draft “Palo Alto Housing Element 2023-2031 (Redlined),” 1 for both (a) the combination of the “Very Low-Income” and the “Low-Income” columns and (b) the “Moderate Income” column, one can see that the “ADUs” values exceed the “Total Unit Surplus” values. Thus, if the City fails to produce very low-income, low-income, and moderate-income ADUs to the extent predicted, much of the “buffer” may disappear, the City may fail to satisfy its RHNA. Accordingly, assessing the City’s constraints on ADU production is vital in analyzing the sufficiency of the Revised Redline Housing Element.

2. The City’s ADU Projections Still Ignore Important Constraints The City relies on ABAG’s technical guidance for estimating the future distribution of ADUs by income category based on actual Palo Alto production figures from 2019-2021. 2 Yet the ABAG technical memo articulates its own limits: “ABAG conducted 2 https://abag.ca.gov/sites/default/files/documents/2022-03/ADUs-Projections-Memo-final.pdf , RRHE, p. 3-8.
1 “Revised Redline Housing Element” or “RRHE,”
https://paloaltohousingelement.com/wp-content/uploads/2024/04/Palo-Alto-Housing-Element-1.pdf , p. 3-72.
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an analysis of ADU affordability and concluded that in most jurisdictions , the following assumptions are generally applicable.” 3 “Generally applicable,” however, does not necessarily mean “applicable in Palo Alto” (especially if one considers the “Palo Alto premium,” among other things). Thus, in assessing the RRHE, one must scrutinize the unique constraints that Palo Alto imposes on ADU production. 4 A. Impact Fees
Since an earlier draft of the Housing Element was submitted to the HCD in 2022, the City Council again raised the impact fees imposed on 750+ sf ADUs. 5 Today the FY2024 facial — essentially “MSRP,” because proportionality discounts apply to such ADUs — total of Community Center, general government, library, park, and public safety facilities fees for “Single Family” in Palo Alto totals $76,385, more than $3,000 greater than the base, $72,562 figure discussed in the RRHE. 6 Because Palo Alto changed both the categories used to calculate impact fees and the magnitude of the fees, 7 their effects were not reflected in 2019-2021 baseline ADU production figures that the City has relied upon in its RHNA projections. 8 Furthermore, as applied especially to ADUs, 8 https://www.paloaltoonline.com/news/2021/04/15/palo-alto-hikes-development-impact-fees-for-first-time-in -20-years Compare the figures on RRHE, p. 3-8.
7 Staff report for 4/20/2021 meeting , p. 8
6 FY2024 Fee Schedule, p. 65, and RRHE p. 4-64. Please note: in the RRHE, a range of values is provided, “$72,562 - $302,362.” See pgs. 4-63 – 4-64 for a discussion of how the $302,362 figure is calculated. The City acknowledges that such “larger projects involving detached single-family homes…..are rare….” RRHE p. 4-64. (Perhaps ADU impact fees could even exceed the “MSRP.”). 5 “ADOPTED MUNICIPAL FEE FISCAL YEAR SCHEDULE 2024,” “Impact & In-Lieu Fees,” “Development Impact Fees - Residential,” (FY2024 Fee Schedule)
( https://www.cityofpaloalto.org/files/assets/public/v/1/administrative-services/city-budgets/fy-2024-city-bud get/adopted/fy24-muni-fee-book-final.pdf , p. 65.
4 Until recently, Palo Alto’s Tree Ordinance, PAMC Chapter 8.10, “TREE AND LANDSCAPE PRESERVATION AND MANAGEMENT,”
https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-65934#JD_Chapter8.10 , was among the most important, Palo-Alto-specific constraints on ADU production. At the City Council meeting on April 1, 2024, the City Council considered a Staff Report incorporating an important finding from the City Attorney:

During passage of the tree ordinance updates in January, staff confirmed during the Council Questions that based on CAO analysis of PAMC Chapter 18.09, the updated Title 8 and applicable state law, the tree ordinance would not apply to stand alone Table 1 ADU’s .

Staff Report 2403-2809,
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=4688&meetingTemplateType=2& compiledMeetingDocumentId=9485 , p. 1 (emphasis added). (Since this statement was attributed to the City Attorney’s Office, it is assumed that the City will follow that guidance and no longer apply the Tree Ordinance to what are, in effect, statewide exemption ADUs.) Attachment A, the ordinance proposed by City Staff, was amended at the April 1, 2024 meeting. See the video of the April 1, 2024 meeting, https://www.youtube.com/watch?v=s2PxdunJHco , beginning at approximately 6:06:59. 3 https://abag.ca.gov/sites/default/files/documents/2022-03/ADUs-Projections-Memo-final.pdf , p. 1 (emphasis added).
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the City’s impact fee structure is (a) inequitable, for multiple reasons, only one of which is discussed in the RRHE, and (b) a significant impediment to production of ADUs, a point not addressed in the City’s RRHE financial feasibility analysis. Pgs. 4-64 - 4-65.

The City itself acknowledges that the basic, per-unit fee architecture is inequitable, but it promises to make amends:

In accordance with state law, fees for ADUs are only charged on ADUs larger than 750 square feet, and are charged in proportion to the fee that are or would be assessed on the primary unit. Because Palo Alto has historically charged per-unit fees for residential development, this has led to some inequitable results, as the fees for an ADU will depend not only on the size of the ADU, but also on the size of the primary unit, with higher fees required under state law when the primary unit is smaller. To avoid this scenario, the City will implement Programs

3.1 and 3.5 to convert fees to a per square foot calculation. 9 That is a step in the right direction but remains insufficient to correct past and continuing harms. This promise lacks a specific deadline, but Program 3.1 refers to December 2024. RRHE, p. 5-15. Still, that program omits some of the impact fees identified above, is not offered as a specific condition for present acceptance of the RRHE, and offers nothing to those previously saddled with inequitable housing impact fees to obtain permits for ADUs in Palo Alto. The City should:
● not submit a further revised Housing Element to the HCD until the current per-unit system is replaced;
● immediately place a moratorium on charging new impact fees for ADUs until such a new system is adopted; and, after its adoption,
● recalculate the impact fees for any ADU built after the revised fee schedule was first adopted in April, 2021, refunding the difference between the previously charged fees and those that would have been due under the new system to homeowners.

Even with such changes, however, the City would only be addressing one half of the inequities built into its current impact fee structure as applied to ADUs.

In the FY2024 Fee Schedule at p. 65, the phrases “Single Family” and “per unit” tell only a partial story. The City asserts that “the burden of housing costs is being more equitably distributed across project types,” pg. 4-65, but the discussion in the “DEVELOPMENT IMPACT FEES AND IN-LIEU FEES'' section, RRHE pgs. 4-63 – 4-65, 9 RRHE p. 4-64.
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fails to make clear that, as currently implemented, “Single Family” and “per unit” essentially mean “brand new single-family on a vacant parcel.” This implicit meaning of the fee schedule language is noteworthy given the City’s observation that there is a “lack of vacant land in Palo Alto.” RRHE pgs. 4-64. It is inequitable to impose impact fees on ADUs that vary with the size of the primary dwelling on a parcel — such that a person with an 800 sf house might have to pay $76,385 to build an 800 sf ADU, whereas a neighbor with a 3,200 sf house would only pay a quarter of such fees to build an identical 800 sf ADU. But a far more fundamental inequity becomes evident when one compares single-family homes and ADUs.
● Instead of building an 800 sf ADU, the hypothetical homeowner with an 800 sf house could instead add 2,400 sf to the house, but since there was a pre-existing home on the lot, Palo Alto would not currently charge $76,385 in impact fees, nor indeed any of the park or other impact fees detailed above, on that home addition, even though it would be three times the size of the 800 sf ADU alternative.
● If the hypothetical neighbor, with a 3,200 sf house, had the capital and the desire, the neighbor might “scrape” the entire existing house, rebuild at or above grade 3,200 sf more luxuriously, and then add a basement, perhaps 2,400 sf in size, and, again, not pay any impact fees.

The City may “implement Program 3.1 Fee Waivers & Adjustments ” before New Year’s Eve 2024, RRHE pgs. 4-65, but this does not appear to include a commitment to alter the fundamental discrimination in Palo Alto’s impact fee architecture as implemented:
the City privileges substantial additions to and even complete “scrapes” of single-family homes, while seeking to shift the vast majority of all housing impact fees to new ADUs, apartments, condominiums, and townhomes. Palo Alto’s impact fees are, in essence, housing taxes on smaller, non-R-1 dwellings. Such taxes constrain ADU production.

As HCD has recognized, 10 one of the merits of ADUs as a housing production strategy is their low costs. This “lower denominator” means that the impact fees charged by Palo Alto constitute an outsized percentage of costs for ADUs. As a corollary, the financial feasibility analysis offered by the City, RRHE pgs. 4-64 - 4-65, is not applicable to ADUs. Rather than building four dozen townhomes, a Palo Alto homeowner may only be seeking to build a single 800 sf ADU. Adding even tens of thousands of dollars to an ADU project may make it significantly less attractive to an individual homeowner, who generally would have lower access to capital than the developer of 48 townhomes.

Even without reaching the full $76,385 amount, many homeowners with smaller homes 10 “ACCESSORY DWELLING UNIT HANDBOOK UPDATED JULY 2022” (“HCD 2022 ADU Handbook”)( https://www.hcd.ca.gov/sites/default/files/docs/policy-and-research/ADUHandbookUpdate.pdf ), p. 4.
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will end up being charged $25,000, $30,000 or even more in “Planning Impact Fees'' before they can receive a building permit for an ADU from the City. Not everyone in Palo Alto can put $25,000 on a credit card or send an e-check for $30,000 to the City.

Thus the architecture of City’s housing impact fees — already heavily disadvantaging ADUs — further privileges more economically advantaged homeowners. The City’s financial feasibility tests will be cold comfort for many homeowners building ADUs.

The burden of the City’s impact fees on ADUs — whether $25,000 or $75,000 — will also affect the City’s ability to meet its RHNA, particularly for more affordable housing. This is especially true given the current interest rate environment. If one were able to obtain — which could be quite difficult — a 30-year fixed mortgage at 7% to build an ADU, $30,000 in marginal fees paid to Palo Alto would translate into an approximately $200 greater monthly payment. 11 $200 per month translates into a sizable percentage of the 1- and even 2-person rents described in “TABLE 2-18 MAXIMUM AFFORDABLE HOUSING COSTS, SANTA CLARA COUNTY, 2021” for the “Extremely Low Income,” “Very Low Income,” “Low Income,” and even “Median Income rental limits.

RRHE pg. 2-39. Thus the the City’s reliance on ADUs to meet its affordable housing goals is incoherent if not completely inconsistent:
● while relying on ADUs to provide a significant percentage of its more affordable units, and while knowing that any such tax will constitute a relatively larger proportion of project costs in comparison with, for example, R-1 developments, the City nonetheless taxes ADU production; and
● Program 3.1 does not appear to commit the City to correcting the taxation disparity between new smaller housing units — ADUs, apartments, etc. — and new additions to or “scrapes” of single-family homes.

Both the magnitude and the architecture of Palo Alto’s impact fees significantly constrain ADU production, particularly production of more affordable ADUs.

B. Utilities Policies
City of Palo Alto Utilities (CPAU) policies further constrain ADU production.

While the UAC may take up this issue at some point in the future, at present the City follows what is, in essence, a “one-parcel, one service” policy in R-1 neighborhoods.

This means that, for example, electrical, water, and sewer services for a primary 11 https://www.google.com/search?q=mortgage+calculator&oq=mortga&gs_lcrp=EgZjaHJvbWUqDQgAEAA YgwEYsQMYgAQyDQgAEAAYgwEYsQMYgAQyDQgBEAAYgwEYsQMYgAQyBggCEEUYPDIGCAMQR Rg8MgYIBBBFGD0yBggFEEUYPDIGCAYQRRhBMgYIBxBFGEGoAgCwAgA&sourceid=chrome&ie=UTF -8
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dwelling and an ADU (or JADU) on the same lot will be provided and billed under one CPAU account. If a homeowner is seeking to build and rent an ADU (or JADU), this can cause several types of problems.
● Tiering problems. If a utility’s prices are tiered based on consumption (for example, higher per unit rates above one or more thresholds), then two households on a single account will be billed at a marginally higher rate than they would be billed on two separate accounts.
● Overhead and collections problems. Even with sub-metering equipment, a homeowner renting an ADU will be left with the tasks of calculating charges, billing, and receiving payment.
● Fundamental capital cost problems, especially with electrical services. Many existing single-family homes in Palo Alto have existing 100A or 200A electrical services. Adding even an 800 sf ADU may, based on the normal electrical load calculation methods followed by CPAU at present, and especially if a homeowner is seeking to build an all-electric ADU, result in approximately 100A (or more) of additional electrical load. While other techniques may be used, if one simply seeks to increase one’s electrical service capacity, present CPAU forms and policies can result in the need for an application to increase the existing electrical service to 400A, even though some of this capacity is not necessarily needed for the ADU. Such an electrical upgrade, including both the fees charged by CPAU and those charged by a contractor, can sometimes cost $10,000 or more. ● “Loser lottery.” That first $10,000 cost may not be the biggest cost. CPAU may, in addition, determine that there is not sufficient capacity in its local distribution system for a new 400A service, in which case an ADU applicant may have “won” a “loser lottery”: CPAU may determine that, because the ADU would exhaust local distribution capacity, the ADU applicant should bear the cost of, for example, upgrading a transformer, or, sometimes, even having also to place a large pedestal for new CPAU-owned electrical equipment in the applicant’s front yard. 12 The “winners” of such a “loser lottery” might have to pay tens of thousands of additional dollars to CPAU.

Returning to the prior mortgage cost analysis, all of these costs might add another $70, $140, $210, or more in monthly costs to an ADU project, further undermining its potential to help the City meet its housing affordability goals.

Other policies could and should be adopted by the City. 12 Requiring such payments and siting equipment on a homeowner’s land as conditions for obtaining a building permit may be quite improper, e.g., as requiring a “public benefit” from a building permit applicant. 6 Item 9
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● CPAU could and should give homeowners building ADUs the option — as determined solely by the homeowner, and at the homeowner’s expense — to build a new ADU (or JADU) with its own utilities, particularly electrical and water utilities. The homeowner should decide if such capital investments make sense. ● CPAU could and should bear the costs of maintaining its own distribution capacity, a n issue that will probably return to the City Council in other contexts (e.g., future deliberations regarding S/CAP and electrical infrastructure). ● CPAU could and should move more quickly in accepting, working with, and even supporting alternative means of calculating electrical loads under the NEC.

With such changes, the City would begin to eliminate some of the most important constraints on ADU, and especially affordable ADU, housing production resulting from current CPAU policies.

C. Permitting Policies
Government Code sub-section 66314(a) allows a local agency to designate areas in which ADUs may be permitted based on “on the adequacy of water and sewer services and the impact of accessory dwelling units on traffic flow and public safety.” 13 Government Code sub-section 66317(c) provides: “No local ordinance, policy, or regulation, other than an accessory dwelling unit ordinance consistent with this article shall be the basis for the delay or denial of a building permit or a use permit under this section.” 14
Despite these and other limits on which types of considerations a local agency may consider in reviewing an ADU permit application ministerially, the City routinely routes ADU permit applications to multiple departments whose reviews are not specifically authorized under the California statute, including, Urban Forestry, Electrical Utilities, and the gas portion of WGW Utilities. Individualized reviews of ADU permit applications by such departments, particularly involving non-objective standards, frustrate the ministerial ADU permit application process. The City’s routinely subjecting 14 https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=GOV&division=1.&title=7.&part =&chapter=13.&article=2 . (formerly Government Code sub-section 65852.2(a)(7), see https://codes.findlaw.com/ca/government-code/gov-sect-65852-2/https://codes.findlaw.com/ca/governmen t-code/gov-sect-65852-2/ ).
13 https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=GOV&division=1.&title=7.&part =&chapter=13.&article=2 .
(formerly Government Code sub-section 65852.2(a)(1)(A), see https://codes.findlaw.com/ca/government-code/gov-sect-65852-2/https://codes.findlaw.com/ca/governmen t-code/gov-sect-65852-2/ ).
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ADU applications to such reviews is another way in which it constrains ADU production, delays ADU permit issuance, and increases costs to those seeking to build ADUs.

D. Disavowing HCD’s AFFH Tools
The HCD has provided tools for determining whether certain types of ADUs are allowed in particular areas. The “Affirmatively Furthering Fair Housing Data and Mapping Resources” is an example of one such tool. 15 Using it, one can identify, for example, “High Quality Transit Stop Areas” within Palo Alto: 16 16 https://affh-data-and-mapping-resources-v-2-0-cahcd.hub.arcgis.com/datasets/636e3f917b3445929f4aa0 647afc4085_2/explore?location=37.436345%2C-122.134573%2C12.94 15 https://affh-data-and-mapping-resources-v-2-0-cahcd.hub.arcgis.com/ 8 Item 9
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Such a map should allow one, before filing an ADU building permit application, to determine with precision whether one can build, for example, an 18’ detached ADU on one’s property. See PAMC 18.09.030, Table 1, fn. 5. 17 Despite the availability of such tools, Palo Alto appears not to recognize their accuracy, and appears to base its determination of such areas based on its own compilation of data, which may well be inadequate and incomplete.

Failing to acknowledge and accept the legitimacy of such HCD-provided AFFH tools is another significant constraint on ADU production, because it makes it more difficult, more expensive, and more time-consuming to determine whether one can build the type of ADU that one might seek to build in Palo Alto; even more unfortunately, it can result in an incorrect determination of whether a particular design is permissible.

3. Compounding Effects and Cumulative Financial Metrics Extremely high and inequitable impact fees, costly utilities policies, onerous permitting practices, and disavowal of recognized AFFH tools are all, when considered individually, significant constraints on ADU production and especially on production of more affordable ADUs in Palo Alto. Considering them collectively compounds and multiplies deleterious effects, further reducing the likelihood of the RRHE being sufficient to meet Palo Alto’s RHNA mandates.
● Regulatory uncertainty, such as that caused by the City’s failure to acknowledge HCD-provided AFFH tools may keep an ADU project from ever commencing.

Knowing that friends or neighbors in other parts of Palo Alto can build 18’ detached ADUs (e.g., over an existing detached garage) may set an expectation for prospective ADU applicants that cannot be verified at the outset of a project. ● Prospective ADU applicants that live in smaller homes and that may also be less capital advantaged may be dissuaded from building larger ADUs when they can spend the money in better ways simply by adding onto their existing houses without incurring enormous impact fees. Why let the City charge $50,000 or $75,000 for an 800 sf ADU when the same overall budget might support an extra bedrooms or even more in a 900 sf or larger addition?
● How much will it actually cost, over the lifetime of an ADU, to pay higher marginal electrical and water service rates with single accounts for both primary dwellings and ADUs? Who will bear that financial risk?
● Would one decide not to build an all-electric ADU or even drop a project if CPAU failed to pay the costs for upgrading a transformer in its distribution plant? 17 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-76751 9 Item 9
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● Who, indeed, would ever want to be the grand-prize “winner” in a “loser lottery,” having to pay $10,000, $20,000, or even more to install a 400A electrical service, with the special bonus of housing a CPAU transformer in one’s front yard? ● Why should there be any review by Urban Forestry, Electrical Utilities or gas utilities of 800 sf or smaller ADUs? Why are such reviewing departments in Palo Alto also sometimes the very last to approve an ADU application, delaying what is supposed to be a maximum 60-day, completely objective, and ascertainable-in-advance, ministerial review process?
● Obtaining an ADU building permit from any local agency in California should be quick, easy, and inexpensive. Those are not the adjectives that many homeowners who have built, or who would like to build, ADUs in Palo Alto would use to describe the City’s permitting processes. Instead, as a result of other City policies and practices, those seeking to build ADUs and other residential dwellings often come face-to-face with the “Palo Alto Premium,” the implicit surcharge that contractors and others may impose for working in Palo Alto.

All of these effects, especially when considered in combination, take their cumulative toll, particularly on production of more affordable ADUs in Palo Alto. Yet the RRHE assumes, based on ABAG’s conclusions about circumstances in “most jurisdictions,” 18 that over 300 ADUs will be built in Palo Alto over the next several years, apparently for rental at the “Extremely Low Income,” “Very Low Income,” and “Low Income” prices described in Table 2-18. RRHE, pg. 2-39.

In the “AFFORDABILITY” section of the RRHE, the City seems almost to concede that this is fanciful.

When comparing the home prices and rents shown earlier in Figure 2-17, Figure 2-18, and Table 2-16 with the maximum affordable housing costs presented in Table 2-18 below, it is evident that extremely low-, very low- and low-income households in Palo Alto have almost no affordable housing options without substantial subsidies.

RRHE, pg. 2-39. How is the City intending to provide such subsidies for ADUs? While Section 2.6 of the RRHE, “HOUSING STOCK CHARACTERISTICS,” discusses, among other things, means of addressing expiring Section 8 project-based subsidies, RRHE, pgs. 2-83 - 2-88, it is unclear whether, and if so how, these or other discussions of potential subsidies would or could apply to the 300+ ADUs the RRHE assumes would be available at extremely low-, very low- and low-income rental prices. 18 https://abag.ca.gov/sites/default/files/documents/2022-03/ADUs-Projections-Memo-final.pdf , p. 1. 10 Item 9
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What is known is that the combination of extremely high and inequitable impact fees, costly utilities policies, onerous permitting practices, and disavowal of recognized AFFH tools operates as an anti-subsidy, as a housing tax, especially on ADUs.

The City does not appear to have offered an ADU-specific financial analysis of such constraints. What metrics might one use to assess the City’s policies and practices on ADU housing production? At least two come to mind.

One standard has a proven track record of success at the state level. During those parts of a fiscal year when its funding has not been fully allocated, and for eligible recipients, the maximum $40,000 grants offered by CalHFA appear to have been successful in stimulating ADU production.

CalHFA’s ADU Grant Program has already created more housing units in California by providing grants up to $40,000 to reimburse pre-development and non-recurring closing costs associated with the construction of an ADU.

Pre-development costs include site prep, architectural designs, permits, soil tests, impact fees, property surveys, and energy reports. 19 Under the 2023-24 state budget, which provided $25 million for the project, there appears to have been “high demand” 20 for such grants. As a first approximation, and certainly one that would appear to be more relevant to ADU construction than a survey of four dozen townhomes, a $40,000 marginal cost might be more than sufficient to have negative implications for ADU production.

A second method of calculation might be based upon the Santa Clara County ADU “Accessory Dwelling Unit Calculator.” 21 Assuming that one were seeking to build a “0 Bed / 1 Bath / 0 / 400 sqft” studio in Palo Alto, the calculator projected $184-224K in development costs, an estimated monthly rent of $1,600 - $2,000, monthly expenses of $1,500 - $1,900, based upon a capital structure of a $60,000 cash investment and a $144,000 loan with a 20 year term and an 8% interest rate, yielding an estimated monthly mortgage payment of $1,194. Since the estimated monthly rent was quite comparable to the estimated monthly expenditures with this capital structure, it appears that most of the economic benefit was projected to be realized as an increase in property value. “It is estimated that your ADU will increase your home value by $214,000.” 22 But using $60,000 in cash, and leveraging it with a $144,000 mortgage — even if one could obtain such a mortgage — to produce an increase in value of 22 https://santaclaracounty.aducalculator.org/
21 https://citiesassociation.org/documents/santa-clara-county-adu-calculator/ 20 https://www.calhfa.ca.gov/homeownership/bulletins/2023/2023-12.pdf 19 https://www.calhfa.ca.gov/adu/index.htm
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$214,000 in a relatively illiquid asset with relatively high sales transaction costs would appear, on its face, to be only modestly attractive as an investment opportunity when 10-year Treasury bonds are yielding, at least at this time, over 4.5%. 23 As a result, one might expect an economically motivated ADU applicant to strive to increase rents higher, potentially to levels above what the City has contemplated in Table 2-18.

There is a substantial chance that Palo Alto’s constraints on ADU production will cause the City to fail to meet its projected targets for extremely low-, very low- and low-income ADUs. As a result, the City’s “Buffer above Remaining RHNA After Credits,” RRHE, pg. 3-72, for those categories of affordable housing units may be lost.

In addition to the policy changes discussed above — eliminating or greatly reducing impact fees on ADUs; returning previously inequitably levied impact fees to homeowners; allowing, at a homeowner’s option and expense, for separate electrical and water utilities services for ADUs; ending Urban Forestry, Electrical Utilities, and WGW gas-related departmental reviews; and accepting the results of HCD’s AFFH tools — this analysis points towards the types of policy interventions to which the City should commit itself if it truly intends to rely upon ADUs as an important source of extremely low-, very low- and low-income housing during the current RHNA cycle. It could and should:
● replicate the maximum $40,000 grants offered by CalHFA, perhaps in cooperation with CalHFA itself.
● offer qualifying ADU applicants, perhaps using the same income and other qualifications established by CalHFA, to provide, e.g., $200,000 - $300,000 loans at the City’s cost of capital to those applicants willing to offer rentals at federally approved rates for a period of 10 years with “on-bill payments,” perhaps through the CPAU’s own billing system; and
● immediately implement AB 1033: “ Accessory dwelling units, also referred to as ADUs and “granny flats,” have been available in California only as rentals. But a new law, Assembly Bill 1033 , is giving Californians the opportunity to buy and sell them as condominiums,” creating an important innovation to foster actual ownership of smaller homes in Palo Alto.

Palo Alto has the capability, the credit rating, and the spirit of innovation to provide capital and new forms of ownership for more affordable housing in our community. The City can augment ADU production, especially of more affordable ADUs, should the City Council demonstrate leadership and commitment to such goals. 23 https://www.bloomberg.com/markets/rates-bonds/government-bonds/us 12 Item 9
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From: Megan Watson
To: Council, City
Cc: Ted O"Hanlon; Lait, Jonathan
Subject: Sep. 23rd, 2024 - City Council Special Meeting - Agenda Item #3 Date: Monday, September 23, 2024 4:08:29 PM
Attachments: image001.png
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CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking on links.

To Members of the City Council,
This e-mail is being submitted in response to Agenda Item #3 on the Consent Calendar, which proposes to amend the Development Impact Fees from a per Unit basis to a per Square Foot basis for Residential Development. This is a necessary issue to be considered by City Council and we are grateful for the efforts that have been put forth to evaluate it tonight. Grubb Properties has been vocal about the City’s need to reduce its impact fees. At their current level, these impact fees pose a direct barrier to the City’s housing production goals. The Park Fees specifically have had an outsized effect on this and have rendered our 102-unit project at 788 San Antonio impossible to build in its current form.

The most troubling aspect of this proposal before you tonight, is that the recommended Framework 1 – Distinct Rate, imposes an all-in rate of $21.10 per Sq. Ft. on Single Family projects while Multi-Family would be assessed at $49.99 per Sq. Ft. Under this framework, an 850 sq. Ft. Rental Unit would pay the exact same fee as a 2,014 sq. ft. Single Family Home. Not only is this blatantly inequitable, but it also sends a clear message that residents in Multi-Family dwellings are responsible for subsidizing residents in Single-Family homes.

The entire point of AB 602 is to make impact fees fairer and more proportional. Framework 1 flies in the face of that goal.

Amid an unprecedented housing crisis, the last thing Palo Alto should do is penalize smaller rental residences, in denser projects, while encouraging sprawl and widening the equity gap between renters and homeowners. Framework 1 does not go far enough, and we strongly encourage City Council to move in favor of something more akin to Framework 2 – Consolidated Rate. As Staff reports, this option would encourage an increase in housing inventory and would be more beneficial to multi-family development, where a greater impact to more residents can be made.

This is a tremendously important issue and we appreciate Council’s careful consideration on how the matter will impact Palo Alto’s future housing goals.

Sincerely,

Megan Watson
Senior Director | Grubb Properties

10000 West Washington Blvd
WeWork, 6th Floor
Culver City, CA 90232

Mobile: 405-973-5229
[email protected]

grubbproperties.com

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: November 18, 2024
Report #:2410-3587
TITLE
FIRST READING: Adoption of an Interim Ordinance Amending Chapters 18.04, 18.16, 18.30(A), and 18.30(C) of the Palo Alto Municipal Code to Implement High Priority Retail Revitalization Measures and Direction; Adoption of an Identical Emergency Ordinance; and Direction to Staff to Advance Other Initiatives Related to the City Council's Economic Development and Transition Policy. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3).

RECOMMENDATION
The Retail Ad Hoc Committee, Planning and Transportation Commission, and Staff recommends the City Council:

1. Adopt the attached emergency ordinance (Attachment A) and interim ordinance (Attachment B);

2. Direct staff to work with the Planning and Transportation Commission on the following:
a. continued refinement of the definition of retail-like land uses to establish a performance-based criteria that promotes pedestrian activity in commercial areas
b. expansion of the permitted uses in the ground floor (GF) and retail (R) combining districts and standards to allow non-retail like uses in certain circumstances; c. review and recommend changes to the geographic extent or applicability of the City’s retail preservation ordinance; and,

3. Direct staff to include a comprehensive update to the City’s zoning code as an objective for Council consideration in 2025 work plan.

EXECUTIVE SUMMARY
The report and accompanying urgency ordinance propose changes to streamline zoning regulations, increase flexibility in permitted land uses, and update parking policies to meet current needs.

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Key recommendations include modifying the formula retail definition, increasing flexibility for “retail-like” uses, introducing practical waivers, and expanding permissible uses for ground- floor spaces. Additional provisions address the inclusion of pet grooming, financial institutions, and automobile showrooms as potential retail-like uses. Staff has also incorporated an ordinance to allow for practical waivers, replacing the high threshold required for waivers with a “practical difficulty” standard to facilitate space adaptations. This report seeks Council’s direction on these recommendations to enhance the city’s commercial district vitality and better meet evolving market demands.

These actions transmit the Planning and Transportation Commission and Retail Ad Hoc recommendation for specific zoning code changes to advance the objectives of the City’s Economic Development and Transition priority. The recommendations in this report are informed by prior work prepared by the City related to its retail resiliency interests and supplemented with professional services provided by Michael Baker International.

The Planning and Transportation Commission held multiple meetings from October 2023 through August 2024, examining various aspects of the Michael Baker International report.

These discussions led to prioritized recommendations for zoning code adjustments, which were subsequently reviewed by the City Council’s Retail Ad Hoc Committee in September 2024.

BACKGROUND
Staff have been working with the Planning and Transportation Commission and professional service contractor, Michael Baker International, to respond to the City Council’s Economic Development and Transition priority. Specifically, implementation of Objective ED&T 12 to conduct stakeholder outreach and present recommendations to Council for a citywide retail zoning strategy and receive direction for ordinance implementation.

This work ties into earlier efforts, including the City Council’s reinstated economic development position as part of the fiscal year 2023 budget and review of a comprehensive economic development strategy report prepared by Streetsense and presented to the Council in August 2023. Michael Baker International expanded upon the Streetsense report conducting additional local outreach, peer city reviews and policy review to identify strategies that support a more robust retail environment at the land use regulatory level.

The Planning and Transportation Commission reviewed various components of the Michael Baker International report at the following meetings and additionally formed an ad hoc group to examine the strategies more deeply on four other occasions:
•October 25, 2023: Introduction/check in including reviewing the scope of work •January 31, 2024: Peer cities comparison and stakeholder interviews results •February 28, 2024: The PTC met to create a PTC Ad Hoc
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•March 13, 2024: Presentation regarding strategies and policy recommendations •March 27, 2024: Reviewed strategy recommendations
•April 24, 2024: Continued discussion on retail strategies •May 8, 2024: Continued discussion and initial recommendation development •August 14, 2024: Prioritization of recommendations to Council The culmination of this work was presented to the City Council’s Retail Ad Hoc on September 18, 2024.1
The Michael Baker International report (Attachment C) highlights Palo Alto's high retail and office vacancy rates, complex regulatory framework and market shifts as key factors impacting the city’s retail resiliency and includes recommendations to streamline zoning regulations with flexible land use definitions and updated parking policies to address these challenges. The specific, prioritized, zoning recommendations are provided in Attachment D and were the focus of the Retail Ad Hoc’s discussion in September.

The City Council’s Retail Ad Hoc met to consider the recommendations that would facilitate the establishment of retail and retail-like uses in the City in support of the City’s Economic Development and Transition Policy. The ad hoc voted unanimously to support the following motion:

MOTION: Council Member Lythcott-Haims moved, seconded by Council Member Burt, to recommend the City Council:

1. Direct staff to bring an urgency ordinance with the following recommendations:
a. Approve Recommendation # 2, raising formula retail threshold from 10 to 50 (based on number businesses in California)
b. Approve Recommendation #8 but excluding gyms directly on California Ave c. Approve Recommendation #7.1 of retail-like definition d. Approve Recommendation # 6

2. Direct staff to:
a. Analyze Recommendation #1 with analysis of AB 2097 and interchangeability of uses and evaluate reactivation of parking assessment district. b. Analyze Recommendation #3 to amend retail preservation ordinance and evaluate geographic boundaries for its application and permitted uses for what remains within potentially amended boundaries.
1 Staff Report, dated September 18, 2024:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=14948&compileOutputType=1 Action Minutes, dated September 18, 2024:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=14947&compileOutputType=1 Meeting Recording from September 18, 2024:
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c. Analyze Recommendation #7.2
d. Carry out Recommendation #5
e. Recommend dation #11 and 13 to merge with Recommendation #15 f. Carry out Recommendation #15

3. Reject the following recommendations:
a. Recommendation #4
b. Recommendation #9
c. Recommendation #10
This report advances components of the first multi-part portion of motion (#1) and provides an update on the other recommendations.

ANALYSIS
The attached urgency and interim ordinances makes a few discrete changes to the City’s land use policies as set forth in the zoning code, including:
•modification to the formula retail requirements;
•changes to the retail-like definition and addition of an automobile showroom definition; •adjustments to the permitted land uses in the ground floor (GF) and retail (R) combining districts; and,
•relaxed standards to request a waiver or adjustment from the requirement to establish a retail or retail-like use in the GF and R combining districts.

Formula Retail (Recommendation 2, Attachment D)
The City’s formula retail requirements only apply to commercially zoned property on California Avenue. The ordinance was established in 2015 with the intent to preserve the unique character of the shopping district by restricting the proliferation of chain stores while also supporting an environment conducive to small local business owners.

Formula retail is defined in the zoning code as a business with 10 or more locations in the United States that share standardized characteristics such as menu, services, décor, uniforms, architecture, façade, color schemes, signs, trademarks or servicemark. While formula retail is not prohibitive, the requirement for a discretionary conditional use permit is a deterrent to applicants seeking to establish these uses.

The Michael Baker International report recommends changes to the formula retail requirements to increase flexibility and encourage a balance between local and franchise businesses in this district. Specifically, the consultant recommends revising the definition of formula retail to apply only to restaurant uses and raising the threshold from 10 to 50 United States locations before a conditional use permit is required. The recommendation also encouraged the City to go further and change the standard from a national perspective to just California; the Retail Ad Hoc agreed and the attached ordinance has been drafted accordingly.

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Adjust Conditional Use Permit Threshold From 1,800 to 3,000 Square Feet (Recommendation 8, Attachment D
One of the recommendations in the Michael Baker International report was to relax the threshold for when a conditional use permit was required for gyms. Throughout much of the city where gyms are permitted, there is a requirement for a conditional use permit when the space for the gym exceeds 5,000 square feet or at any size when fronting University Avenue.

Only on California Avenue itself is the threshold set to 1,800 square feet. The consultant recommendation was to raise the 1,800 square foot threshold for gyms on California Avenue to 3,000 square feet. It is unclear from the Retail Ad Hoc’s motion if the intent was to eliminate gyms from occupying any space on California Avenue or to not adjust the conditional use permit threshold. Accordingly, there is no change in the attached ordinance. The City Council can give direction to staff on what if any changes it would like to make concerning gyms and conditional use permit thresholds for inclusion in the ordinance.

Retail-Like Definition and Changes to GF and R overlays (Recommendations 7.1 and 8, Attachment D)
The Michael Baker International report recommends expanding the retail-like definition to include uses that generate pedestrian activity. This change aims to allow greater flexibility filling ground floor vacant spaces with businesses that contribute foot traffic and vibrancy, even if the use does not fit traditional retail definitions. This approach is intended to help reduce persistent vacancies, support a lively commercial environment, and adapt to evolving consumer behaviors that may prefer a wider range of services and experiences in commercial shopping districts.

Providing increased flexibility however suggests moving away from detailed lists of land uses that defines what is permitted at a given tenant space and enabling staff to exercise judgement when deciding if a proposed use meets the intent of the code to generate pedestrian activity.

The Retail Ad Hoc supported the consultant recommendation to add language to the retail-like definition to allow commercial uses that are accessible to the general public, generate walk-in pedestrian clientele, and contribute to a high level of pedestrian activity. The Retail Ad Hoc did not get into sufficient discussion to further define retail-like uses and this report and ordinance provides an opportunity to do so. However, the staff recommendation in this report would have the City Council make a minor but meaningful adjustment to the definition to allow financial institutions and add a catch-all category. Staff recommends deferring a more in-depth conversation to the Planning and Transportation Commission to review and recommendation.

Based on the Michael Baker International report, staff has also made some changes in the proposed ordinances to allow pet grooming and financial institutions as permitted land uses in the GF floor (University & Middlefield Avenues) and R (California Avenue) combining districts.

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These changes were not explicitly discussed by the Retail Ad Hoc and are presented to the City Council for deliberation and direction to staff.

Pet Grooming
Pet grooming services can attract regular foot traffic and contribute to activity within mixed-use urban areas. These services bring consistent, repeat visits from pet owners who return for routine grooming and care, which may increase nearby foot traffic. Customers often utilize nearby retail or dining options while waiting, potentially benefiting surrounding businesses.

Additionally, pet grooming meets a practical need in urban environments, especially for residents in apartments who may have limited space for pet care. This service aligns with efforts to create a pedestrian-friendly, community-oriented downtown setting.

Pet grooming would also be permitted as a retail-like use in other parts of the City with the proposed changes to that definition.

Financial Institutions
Financial institutions are also listed in the attached ordinance and recommended by the consultant for inclusion in the retail-like definition and staff has also added it to the GF and R combining districts. Historically, this City has resisted allowing financial institutions or banks in the core retail zones for a number of reasons. While banks generate pedestrian traffic, it’s clientele may be more limited generating less foot traffic than other retailers. It may also result in less cross-shopping creating fewer synergistic opportunities with other land uses in the area.

Bank storefronts can be uninviting compared to the visual appeal of retailers with changing storefronts. Bank hours are also not generally aligned with evening or nighttime activity potentially reducing a retail area’s liveliness or appeal.

While banks may not have the dynamic storefront appeal of certain retailers, their presence in a pedestrian retail area can bring stability, economic support, and a steady flow of potential customers, fostering an environment where other businesses can thrive. The City Council could consider concentration limits if there was concern about too many banks being located in an area but this too begins to reduce some of the flexibility that brokers, property owners and property managers have been seeking.

Automobile Showroom
A new definition is proposed in the ordinance to allow automobile showrooms as a retail-like use. This definition is narrower than and replaces “automobile dealership” as a retail-like use.

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but it creates additional opportunities to potentially fill vacant tenant spaces. As drafted, the ordinances do not permit automobile showrooms in the GF and R overlay areas, but the Council could direct their inclusion.

Practical Waivers and Hardships
The Michael Baker International report highlights that the City’s current waiver standard, which allows the replacement of a retail space with a non-retail or retail-like use, is overly restrictive.

This standard requires property owners to prove an “unconstitutional taking of all economic value” to qualify for relief, presenting a major obstacle to adapting spaces to evolving market needs. This high threshold limits flexibility, contributing to increased vacancies as property owners struggle to meet the stringent requirements for waivers.

To address this issue, Recommendation 6 in Attachment D proposes amending zoning regulations for the ground floor and retail combining districts to incorporate more practical waivers and adjustments. Key changes include replacing the high unconstitutional taking standard with a more accessible “practical difficulty” standard, enabling property owners to seek relief more easily. Additionally, it incorporates an existing provision from the retail preservation ordinance to establish an Alternative Viable Active Use standard, permitting alternative active ground-floor uses that promote pedestrian activity and align with district goals. A request for a waiver is reviewed and approved by the City Council.

These adjustments aim to reduce vacancies, increase flexibility in space adaptation, and ultimately support the economic vitality of commercial areas.

Other Retail Ad Hoc Recommendations
The Michael Baker International report included a number or other recommendations that the Planning and Transportation Commission and Retail Ad Hoc reviewed. One of these items related AB 2097 is already scheduled for Council review, discussion and direction. Two other recommendations related to evaluating the retail preservation ordinance and exploring opportunities to allow non-retail or non-retail-like uses in the back portion of an existing retail- oriented tenant space requires further research and analysis. The recommendation in this report is for staff to work with the Planning and Transportation Commission to further develop these policies and report back to Council. Recommendation 5 in Attachment D does not require Council action and staff will follow up by preparing a handout that provides clarity on what land uses are permitted in the City’s various commercial zoning districts. There are three other recommendations that are mid- to long-term work related to comprehensively updating the City’s zoning code. This is an overdue, costly and time-consuming effort that staff intends updating the Council further during the priority setting and budget update for next fiscal year.

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concerning AB 2097 (Recommendation 4). The other two recommendations (9 and 10) relate to changes in long standing City policies concerning office floor area. Staff concurs and notes that direction to follow up on these two recommendations represents a distinct planning initiative that is not accounted for in the current department work plan and would compete with other Council priorities in the upcoming priority setting discussion.

FISCAL/RESOURCE IMPACT
The recommendation in this report does not have any significant fiscal or resource impacts.

Preparation of the ordinance and implementing policies can be absorbed through existing department funding.

STAKEHOLDER ENGAGEMENT
Michael Baker International and staff conducted stakeholder interviews with landowners, businesses, the Chamber of Commerce, and interviewed peer cities. In addition to agendized action item discussions, the PTC held six study sessions and held four PTC ad hoc meetings. As discussed in this report, the City Council‘s Retail ad hoc committee also met to discuss this on September 18, 2024.

ENVIRONMENTAL REVIEW
The recommended action is exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Section 15061(B)(3) of the CEQA Guidelines in that it can be seen with certainty that the project will not have a significant impact on the environment.

ATTACHMENTS
Attachment A: Emergency Interim Ordinance Implementing Near-Term Retail Items Attachment B: Temporary Interim Ordinance Implementing Near-Term Retail Items Attachment C: Final Retail Revitalization Report (May 2024) Attachment D: Michael Baker International Report Prioritized Recommendations APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 10
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Ordinance No. _____

Emergency Ordinance of the Council of the City of Palo Alto Amending Chapters

18.04, 18.16, 18.30(A), and 18.30(C) of the Palo Alto Municipal Code to Immediately Implement High Priority Retail Revitalization Measures

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Findings and Declarations. The City Council finds and declares as follows:

A. Like many communities, the City of Palo Alto has experienced high vacancy rates in retail districts, which have been compounded by challenges associated with the COVID-19 pandemic as well as ongoing retail trends. Accordingly, the City Council has included retail revitalization as a Council priority for the past several years.

B. Throughout 2023 and 2024, City staff, the Planning and Transportation Commission (PTC), and the City’s consultant Michael Baker International (MBI) worked together to develop a Retail Study Report intended to inform a citywide retail zoning strategy.

C. On September 18, 2024, the City Council Retail Committee reviewed the Final Draft Retail Study Report and provided direction to staff on several zoning amendments should be implemented immediately to support retail and retail-like uses in the City.

D. Although the PTC held six hearings on the Retail Study (in addition to four meetings of the PTC retail ad hoc committee), the PTC has not yet considered or recommended specific, proposed amendments to Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC).

E. The City Council finds that there is insufficient time for the PTC to consider and recommend those amendments identified by the City Council Retail Committee for immediate implementation. The Council therefore finds that an interim ordinance pursuant to PAMC Section 18.80.090 is an appropriate measure, pending consideration of a permanent ordinance by the PTC. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto desires to adopt regulations responding to and implementing these state laws.

F. In addition, the City Council finds that an emergency ordinance enacting the following amendments to Title 18 of the PAMC is necessary to preserve the public peace, health, or safety, because the measures contained herein are necessary to support a thriving retail sector, which is an essential priority for the City.
//
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SECTION 2. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions struck-through; text omitted but unchanged noted by bracketed ellipses):

18.04.030 Definitions

(a) Throughout this title the following words and phrases shall have the meanings ascribed in this section.
[. . .]

(12.5) "Automobile dealership" means a use primarily engaged in sale, lease, service, or minor repair of new and used automobiles and trucks. Other accessory services incidental and supporting auto sales include service bays for engine, transmission, air conditioning, and minor painting, body and fender repair, car wash, auto rental, and similar services.

(12.6) “Automobile showroom” means a use primarily engaged in the sale of new and used automobiles and trucks, or the display and demonstration of automobiles and trucks for the purpose of facilitating sales, but which does not involve on-site storage of inventory, except as incidental to the showroom use. Automobile showroom serves primarily pedestrian clientele and is distinct from Automobile Dealership.

[. . .]

(57.6) “Formula retail business” means an retail, personal, or eating and drinking service that is one of ten (10) fifty (50) or more business locations in the State of California United States required by contractual or other arrangement to maintain any of the following standardized characteristics: merchandise, menu, services, decor, uniforms, architecture, facade, color scheme, signs, trademark, or servicemark. For purposes of this definition:
(A) “Standardized merchandise, menu and/or services” means 50% or more of in- stock merchandise from a single distributor bearing the same or similar markings; 50% or more of menu items identical in name and presentation with other locations; or 50% or more of services offered identical in name or presentation with other locations. (B) “Decor” means the style of interior furnishings, which may include but is not limited to, style of furniture, wall coverings or permanent fixtures. (C) “Color Scheme” means the selection of colors used throughout, such as on the furnishings, permanent fixtures, and wall coverings, or as used on the facade. (D) “Uniforms” means standardized items of clothing including but not limited to standardized aprons, pants, shirts, smocks or dresses, hats, and pins (other than name tags) as well as standardized colors of clothing.
(E) “Facade” means the face or front of a building, including awnings, looking onto a street or an open space.
(F) “Trademark” means a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of the goods from one party from those of others.

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(G) “Servicemark” means a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of a service from one party from those of others.

[. . .]

(125.1) “Retail-like use” means a use generally open to the public during typical business hours and predominantly engaged in providing services closely related to retail services, including but not limited to:
(A) Eating and drinking services, as defined in subsection (47); (B) Hotels, as defined in subsection (73);
(C) Personal services, as defined in subsection (114); (D) Theaters;
(E) Travel agencies;
(F) Commercial recreation, as defined in subsection (33); (G) Commercial nurseries;
(H) Automobile showrooms dealerships, as defined in subsection (12.5 12.6); and (I) Day care centers, as defined in subsection (42). ; (J) Financial services, as defined in subsection (56); (K) Other commercial uses, services, or activities determined by the Director of Planning and Development Services to be accessible to the general public, generate walk-in pedestrian clientele, and contribute to a high level of pedestrian activity.

[. . .]

SECTION 3. Sections 18.30(A).040 (Permitted Uses) and 18.30(A).050 (Conditional Uses), and 18.30(A).070 (Waivers and Adjustments) of Chapter 18.30(A) (Retail Shopping (R) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are hereby amended as follows (additions underlined; deletions struck-through; text omitted but unchanged noted by bracketed ellipses):

18.30(A).040 Permitted Uses
Except to the extent a conditional use permit is required pursuant to Section 18.30(A).050, the following uses shall be permitted in an R district:
(a) Eating and drinking services, except drive-in and take-out services. (b) Personal services, except the following on California Avenue: beauty shops; nail salons; barbershops; laundry and cleaning services as defined in Section 18.04.030(114)(B); fitness or exercise studios exceeding 1,800 square feet in gross floor area; and learning centers intended for individual or small group settings.
(c) Retail services.
(d) Financial services, except drive-in services.
(e) Pet grooming services.
(d)(f) All other uses permitted in the underlying commercial district, provided they are not located on a ground floor.

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18.30(A).050 Conditional Uses
The following uses may be conditionally permitted in an R district, subject to the issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approval):
(a) Financial services, except drive-in services, on a ground floor. (b) (a) All other conditional uses allowed in the underlying commercial district provided they are not located on a ground floor.
(c) (b) Formula retail businesses on California Avenue. (d) (c) Beauty shops, nail salons, barbershops, f Fitness or exercise studios exceeding 1,800 square feet in gross floor area on California Avenue; and learning centers intended for individual or small group settings.

[. . .]

18.30(A).070 Waivers and adjustments.
(a) The following shall be grounds for a request for waiver or adjustment of this Ordinance Chapter:
(a) (1) Economic Hardship. An applicant may request that the requirements of this Ordinance Chapter be adjusted or waived only upon a showing that strict application would result in an unreasonable financial burden on the property. applying the requirements of this Ordinance would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property.
(2) Alternative Viable Use. An applicant may request that the requirements of this Chapter

18.30(A) be adjusted or waived based on a showing that: the permitted retail or retail-like use is not viable; the proposed alternative use will support the purposes of the combining district and Comprehensive Plan land use designation; and the proposed use will encourage active pedestrian-oriented activity and connections.
(b) Documentation. The applicant shall bear the burden of presenting substantial evidence to support a waiver or modification request under this section and shall set forth in detail the factual and/or legal basis for the claim, including all supporting technical documentation. Any request under this section shall be submitted to the Planning and Development Services Community Environmental Director together with the fee specified in the municipal fee schedule and an economic analysis or other supporting documentation. A request under this section shall be acted upon by the City Council.

SECTION 4. Sections 18.30(C).020 (Permitted Uses) and 18.30(C).030 (Conditional Uses) of Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are hereby amended, and Section 18.30(C).050 (Waivers and adjustments) is hereby added as follows (additions underlined; deletions struck-through; text omitted but unchanged noted by bracketed ellipses):

18.30(C).020 Permitted Uses
(a) The following uses shall be permitted in the GF combining district, subject to restrictions in Section 18.40.180:
(1) Eating and drinking;
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(2) Hotels;
(3) Personal services, except for the following on parcels with frontage on University Avenue:
fitness and exercise studios exceeding 3,000 square feet in gross floor area, where uses defined in Section 18.04.030(114)(B), (G),(H), and (I) are not permitted; (4) Retail services;
(5) Theaters;
(6) Travel agencies;
(7) Commercial recreation up to 5,000 square feet in gross floor area, except for parcels with frontage on University Avenue;
(8) Financial services, except drive-in services;
(9) Pet grooming services;
(8) (10) All other uses permitted in the underlying district, provided such uses are not on the ground floor.
(b) Elimination or conversion of basement space currently in retail or retail-like use or related support purposes is prohibited.
(c) Entrance, lobby, or reception areas serving non-ground floor uses may be located on the ground floor to the extent reasonably necessary, provided they do not interfere with the ground floor use(s), and subject to the approval of the Director.

18.30(C).030 Conditional Uses
(a) The following uses may be conditionally allowed on the ground floor in the GF ground floor combining district, subject to issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approvals) and with the additional finding required by subsection (b), subject to restrictions in Section 18.40.160:
(1) Business or trade school;
(2) Commercial recreation over 5,000 square feet in gross floor area or with frontage on University Avenue;
(3) Day care;
(4) Financial services, except drive in services;
(5 4) General business service;
(6) Learning centers intended for individual or small group settings; (7 5) All other uses conditionally permitted in the applicable underlying district, provided such uses are not on the ground floor.
(b) The director may grant a conditional use permit under this section only if he or she makes the following findings in addition to the findings required by Chapter 18.76 (Permits and Approvals):
(1) The location, access or design of the ground floor space of the existing building housing the proposed use, creates exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district.
(2) The proposed use will not be determined to the retail environment or the pedestrian- oriented design objectives of the GF combining district. (c) Any use conditionally permitted pursuant to this section shall be effective only during the existence of the building that created the exceptional circumstance upon which the finding set forth in subsection (b) was made.

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18.30(C).050 Waivers and adjustments.
(a) The following shall be grounds for a request for waiver or adjustment of this Chapter:
(1) Economic Hardship. An applicant may request that the requirements of this Chapter be adjusted or waived upon a showing that strict application would result in an unreasonable financial burden on the property.
(2) Alternative Viable Use. An applicant may request that the requirements of this Chapter

18.30(A) be adjusted or waived based on a showing that: the permitted retail or retail-like use is not viable; the proposed alternative use will support the purposes of the combining district and Comprehensive Plan land use designation; and the proposed use will encourage active pedestrian-oriented activity and connections.
(b) Documentation. The applicant shall bear the burden of presenting substantial evidence to support a waiver or modification request under this section and shall set forth in detail the factual and/or legal basis for the claim, including all supporting technical documentation. Any request under this section shall be submitted to the Planning and Development Services Director together with the fee specified in the municipal fee schedule and an economic analysis or other supporting documentation. A request under this section shall be acted upon by the City Council.

SECTION 5. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. //
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SECTION 6. The Council finds that the Ordinance is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the foregoing amendments to reduce retail vacancies will have a significant effect on the environment.

SECTION 7. This Ordinance shall be effective upon adoption by a vote of four-fifths of the council members present and shall remain in effect until December 31, 2026 or upon adoption of replacement legislation by the City Council, whichever occurs first.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor

APPROVED AS TO FORM: APPROVED AS TO CONTENT:

Assistant City Attorney City Manager

Director of Planning and
Development Services
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Ordinance No. _____

Temporary Ordinance of the Council of the City of Palo Alto Amending Chapters

18.04, 18.16, 18.30(A), and 18.30(C) of the Palo Alto Municipal Code to Immediately Implement High Priority Retail Revitalization Measures

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Findings and Declarations. The City Council finds and declares as follows:

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18.04.030 Definitions

(a) Throughout this title the following words and phrases shall have the meanings ascribed in this section.
[. . .]

[. . .]

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located on a ground floor.

[. . .]

18.30(C).020 Permitted Uses
(a) The following uses shall be permitted in the GF combining district, subject to restrictions in Section 18.40.180:

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(1) Eating and drinking;
(2) Hotels;
(3) Personal services, except for the following on parcels with frontage on University Avenue:
fitness and exercise studios exceeding 3,000 square feet in gross floor area, where uses defined in Section 18.04.030(114)(B), (G),(H), and (I) are not permitted; (4) Retail services;
(5) Theaters;
(6) Travel agencies;
(7) Commercial recreation up to 5,000 square feet in gross floor area, except for parcels with frontage on University Avenue;
(8) Financial services, except drive-in services.
(9) Pet grooming services.
(8) (10) All other uses permitted in the underlying district, provided such uses are not on the ground floor.
(b) Elimination or conversion of basement space currently in retail or retail-like use or related support purposes is prohibited.
(c) Entrance, lobby, or reception areas serving non-ground floor uses may be located on the ground floor to the extent reasonably necessary, provided they do not interfere with the ground floor use(s), and subject to the approval of the Director.

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forth in subsection (b) was made.

[. . .]

18.30(A) be adjusted or waived based on a showing that: the permitted retail or retail-like use is not viable; the proposed alternative use will support the purposes of the combining district and Comprehensive Plan land use designation; and the proposed use will encourage active pedestrian-oriented activity and connections.
(b) Documentation. The applicant shall bear the burden of presenting substantial evidence to support a waiver or modification request under this section and shall set forth in detail the factual and/or legal basis for the claim, including all supporting technical documentation. Any request under this section shall be submitted to the Planning and Development Services Director together with the fee specified in the municipal fee schedule and an economic analysis or other supporting documentation. A request under this section shall be acted upon by the City Council.

SECTION 5. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. //
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SECTION 7. This Ordinance shall be effective from the thirty-first day after the date of its adoption until December 31, 2026 or upon adoption of replacement legislation by the City Council, whichever occurs first.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor

APPROVED AS TO FORM: APPROVED AS TO CONTENT:

Assistant City Attorney City Manager

Director of Planning and
Development Services
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Draft: May 2024
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PALO ALTO RETAIL REVITALIZATION STUDY
Acknowledgements
City Council Members Commissioner Keith Reckdahl Thoits Bros., Inc. – John Shenk Mayor Greer Stone
Vice Mayor Ed Lauing
Chamber of Commerce – Charlie Weidanz
Performance Gaines – Chris Gaines
Italico – Franco Campilongo
Ad Hoc Committee Members
Commissioner Allen Akin
Commissioner Bryna Chang
Commissioner Keith Reckdahl
Council Member Greg Tanaka
Council Member Julie Lythcott-Haims
Council Member Lydia Kou
Council Member Patrick Burt
Council Member Vicki Veenker
Taste Buds Kitchen – Scott Andersen
Peer City IntervieweesCity Staff City of Santa Monica: Jennifer Taylor- Economic Development Manager City of Santa Monica: Roxanne Tanemori- Principal Planner City of Los Altos: Nick Zornes- Development Services Director City of Redwood City: Evelyn Garcia- Associate Planner
Jonathan Lait- Planning and Development Services Director Amy French- Chief Planning Official
Bruce FukujiPlanning and Transportation Commission
Chair Doria Summa
Commissioner Allen Akin
Commissioner Bart Hechtman.

Commissioner Bryna Chang
Commissioner Carolyn Templeton
Commissioner George Lu
Steven Guagliardo- Assistant to the City Manager – Economic Development Consultants
Michael Baker InternationalStakeholders
Premier Property Management – Jon Goldman, Brad Ehikia
Ellis Partners – Jim Ellis Cover Image Credit: Palo Alto online Table of Contents
Executive Summary.................................................................................. 1 Introduction ............................................................................................ 2 Approval Process ........................................................................................14 AB 2097 Implications and Recommendations ..........................................15 Zoning Analysis and Recommendations...................................................18 Market Profile.......................................................................................... 7 Demographic Profile .................................................................................... 7 Purpose ........................................................................................................ 2 Relationship to Comprehensive Economic Development Strategy ............. 2 Top Tier.................................................................................................... 7 Urban Chic ............................................................................................... 7 Laptops and Lattes .................................................................................. 7 Zoning Review and Comparison.................................................................18 Zoning Recommendations..........................................................................18Guiding Principle 3 ................................................................................... 2 Strategy 9................................................................................................. 2 Action Items ............................................................................................. 2 Leakage and Surplus .................................................................................... 8 Leakage (Demand)................................................................................... 8 Surplus (Supply) ....................................................................................... 8 Stanford Shopping Center........................................................................ 8 List of AppendicesStudy Area............................................................................................... 3 Downtown/University Avenue..................................................................... 3 California Avenue......................................................................................... 3 Midtown....................................................................................................... 3 El Camino Real.............................................................................................. 3 Appendix A: Outreach Summary
Appendix B: Market Study
Appendix C: Implications of AB 2097
Appendix D: Zoning Review and Comparison
Summary...................................................................................................... 8 Vacancy Trends and Findings .................................................................... 9 Outreach ................................................................................................. 4 Stakeholders............................................................................................ 4 Peer Cities ............................................................................................... 4 Retail Space Trends and Findings ................................................................ 9 National Trends ....................................................................................... 9 Palo Alto Findings .................................................................................. 10 Comparison with Peer Cities.................................................................. 11City of Santa Monica .................................................................................... 4 City of Los Altos............................................................................................ 4 Redwood City ............................................................................................... 5 Office Space Trends and Findings.............................................................. 12 National Trends ..................................................................................... 12 Palo Alto Findings .................................................................................. 12 Comparison with Peer Cities.................................................................. 13 Changing Nature of Retail ........................................................................ 6 Rise of E-Commerce..................................................................................... 6 Palo Alto Specific Trend............................................................................ 6 Experience-based Retail............................................................................... 6 Best Practices......................................................................................... 14 Land Use and Zoning Ordinance................................................................ 14 Parking and Curb Management................................................................. 14 City of Palo Alto i
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PALO ALTO RETAIL REVITALIZATION STUDY
Executive Summary
The City of Palo Alto seeks to retain, attract, and reinvigorate existing commercial areas, particularly areas that provide retail services. The purpose of this study is to recommend zoning strategies to help retain, strengthen, and facilitate retail in the key commercial areas of Palo Alto.

This study complements and furthers the Comprehensive Economic Development Strategy adopted by the City Council in August 2023.

There was a remarkably strong consensus among the stakeholders with respect to the opinions about the problems and recommended improvements. The zoning analysis revealed an extremely complex, complicated, confusing, and difficult to comprehend and navigate set of regulations, which poses significant challenges for staff, property owners, and prospective businesses, alike. The code contains many overlapping, redundant, and narrowly targeted provisions. Altogether, it creates a negative, overly protective, and business-adverse regulatory environment.

The good news is that there are many opportunities to make improvements that will reduce and eliminate deterrents and unreasonable constraints on existing and future investments in retail uses in Palo Alto. to provide the foundational analysis, policy, and strategic recommendations to authorize and enable the development and adoption of future specific zoning amendments.

This study contains approximately 20 recommendations organized around the following 7 primary strategies:

1. Conduct a Comprehensive Zoning Cleanup of Mature, Complex CodeThis study includes:

Several immersive reviews of the Palo Alto Zoning Code 2. Create Streamlined and Predictable Approval Processes

3. Limit the Retail Preservation Ordinance (RPO) (18.40.180)

4. Allow Non-retail Uses on Ground Floor with Limitations

5. Repeal the Office Conversion and Construction Limitations

6. Relax the Formula Retail Restrictions
Several rounds of stakeholder interviews, including business and property owners, and property managers, peer city staff

Reviews and summaries of best retail revitalization practices The recommendations of this study reflect the overall consensus on the following general principles:A review and summary of national and local retail and office market trends 1. It is better to have occupied spaces, patrons, customers, and services for the community than the deleterious effects of vacant ground-floor spaces.

7. Ease the Parking Regulations

Market and demographic profile of Palo Alto
Implementation of these recommendations will take time. Some may be able to be implemented quickly, while others will require considerably more time. It is important that the City take swift action to execute actions as soon as possible. The recommended zoning strategies in this study provide a coordinated framework to identify and implement individual and coordinated sets of revisions in phases.

Review of past City planning efforts and correspondence, including the recent Streetsense Comprehensive Economic Development Strategy study and the Car-Free California Avenue Engagement Reports

2. It is extremely difficult, if not impossible, and often counterproductive to try to outsmart or manipulate the free market.

Multiple meetings and workshops with the Planning and
Transportation Commission
This study recommends a variety of modifications to the Zoning Code to eliminate or reduce regulatory constraints, conflicts, and outdated zoning strategies that deter, discourage, or overcomplicate the attraction, retention, and adaptation of retail business in Palo Alto.

Multiple meetings and reviews with Palo Alto Planning and Economic Development department staff
The trend analyses show significant and persistent vacancies in Palo Alto in both office and retail spaces. Some of the vacancy trends are consistent with larger regional and national trends, particularly the impacts of the COVID- 19 pandemic. However, some of the local trends and patterns appear to be unique to Palo Alto.

The recommendations include strategies for future specific zoning amendments. This study provides the background conditions, understanding, best practices, community and stakeholder engagement, and policy discussions and regulatory implications that led to the development of the recommended zoning strategies. This study is intended City of Palo Alto 1
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PALO ALTO RETAIL REVITALIZATION STUDY
Introduction
Purpose
Action ItemsLike many retail districts throughout the United States, the City of Palo Alto is struggling with high rental and vacancy rates in addition to challenges elicited by the COVID-19 pandemic and emerging retail trends. The City requested evaluation of its land use controls relative to the evolving economic and market conditions for the City's major retail areas and corridors. Regulatory and procedural complexities play a significant role in the retail challenges for the City. The main focus of this report is to analyze, understand, and recommend changes to these land use controls and, to a lesser extent, discuss procedural hindrances. strategies identified in the Comprehensive Economic Development Strategy aim to reflect the delicate ecosystem that drives the vibrancy of the City’s downtown and commercial centers with a focus on the retail and hospitality sectors significantly affected by the COVID-19 pandemic and resulting hybrid work environment. Three guiding principles emerged from this study.
Action 9.1 Consider removing or consolidating zoning overlays, incorporating an at a glance permitted use table and design standards, and an interactive online map with quick links to relevant regulations.

Action 9.2 Consider amending Section 18.76.20, Architectural Review, of the municipal code to enable more over the counter approvals for minor changes.

Each guiding principle has recommended strategies accompanied by one or more distinct actions. Guiding Principle 3, Strategy 9, and action items 9.1 – 9.4 of the Comprehensive Economic Development Strategy report are directly relevant to the purposes of this study and noted below.

Action 9.3 Reevaluate the city-wide Retail Preservation Ordinance and consider refocusing its applicability to targeted areas of existing retail concentration while also allowing flexibility in non-street facing portions of buildings.

The report also reviews national and regional trends as well as best practices. In addition, local business owners, City staff, and neighboring communities were interviewed to understand the local trends and climate. Appendix A includes the outreach summary and lists the individuals and businesses/agencies that were interviewed.

Guiding Principle 3
Action 9.4 Enable growth in Neighborhood Goods and Services along California Avenue by updating the Formula Retail
Ordinance and easing use restrictions on in demand
neighborhood serving uses that are currently heavily regulated or prohibited.

Adopt policies that reflect changing market conditions by easing the regulatory burden for businesses, removing outdating restrictions that create hurdles to tenancy, and focus retail and retail like uses in places where they are market-supported.

Relationship to Comprehensive Economic
Development Strategy
Strategy 9This study complements and furthers the Comprehensive Economic Development Strategy adopted by the City Council in August 2023. The Streamline, update and/or remove unnecessary use restrictions and pursue regulatory reform to enable tenancy and competitiveness.

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PALO ALTO RETAIL REVITALIZATION STUDY
Study Area
Four major retail areas and corridors were identified and analyzed to understand the current retail trends and land use conditions across the retail landscape of Palo Alto. The areas that were reviewed are Downtown Palo Alto/University Avenue, California Avenue, Midtown, and El Camino Real.

These areas are depicted in Figure 1.
multifamily housing, auto dealerships, veterinary services, gas stations, banks, fitness centers, public parks, and retail services.

Figure 1 Palo Alto Retail Study Area
Downtown/University Avenue
Downtown Palo Alto, defined by the boundaries of Alma Street, Lytton Avenue, Hamilton Avenue, and Webster Street, is a mixed-use commercial district consisting of a variety of service industry land uses, including hotel, eating and drinking services, retail services, laundry services, theaters, beauty salons, public parks, places of worship, fitness studios, single- and multifamily housing, office, and parking.

California Avenue
California Avenue from El Camino Real to the California Avenue Train Station is a four-block-long commercial corridor consisting of a large mix of commercial and retail uses, including eating, and drinking services, banks, optometrists, offices, retail, health and wellness services, fitness studios, beauty salons, post office, hotel, and parking structures. The City Council authorized California Avenue as a temporary car-free street early in the COVID-19 pandemic as an economic recovery effort and to provide community members with outdoor spaces to gather. In December 2023, City Council determined California Avenue will permanently remain a car-free street.

Midtown
The Midtown retail district is located along Middlefield Road between Sutter Avenue and Moreno Avenue. Midtown is a traditional American horizontal mixed-use retail complex comprising multiple buildings accessed largely by vehicle trips intended to attract patrons from outside the immediate area.

Land uses include eating and drinking services, offices, civic/institutional, barber shops, fitness studios, retail services, beauty salons, dance, and music studios, and learning centers.

El Camino Real
El Camino Real is a 4-mile-long commercial highway corridor that runs the entire length of Palo Alto from Sand Hill Road to Los Altos Road. The corridor is a major thoroughfare supported by auto-oriented uses and large retail complexes, including hotels, banks, medical and dental services, eating and drinking services, learning centers, car rental shops, beauty salons, City of Palo Alto 3
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PALO ALTO RETAIL REVITALIZATION STUDY
City of Santa Monica City of Los AltosOutreach
The City passed an extensive list of emergency orders during the pandemic.

These included both planning and building/safety emergency orders, many of which have been formally adopted or extended. The following are key policy and zoning changes identified in the interview with City staff.

The following are key policy and zoning regulations and permitting procedures identified in the interview with City staff.Outreach efforts included interviews with six stakeholders and three peer cities. The outreach efforts are summarized in Appendix A of this document. Los Altos has an active Chamber of Commerce that supports and works with businesses. Using a Downtown Vacancy matrix, the Chamber of Commerce tracks vacancies, allowed uses, and building floor area/square footage.

Stakeholders

Changes in zoning included allowing a wider variety of uses by right in areas that were historically more restrictive, such as pop-ups and creative commercial uses.

Six stakeholders—landowners, businesses, and the Chamber of Commerce—were interviewed in order to understand the restrictions or hindrances to development; they then provided recommendations to mitigate them. There was a strong consensus on many issues among all of the stakeholders. Below are the main takeaways from these interviews. The City’s streamlined permit processing via online submittals take days, not months.The City eliminated the need for conditional use permits (CUP), minor use permits, and other discretionary approvals for several uses.

The City made alcohol sales an ancillary use allowed by right.

The City does not typically use CUPs; uses are either allowed or prohibited.

Provide flexibility in the reuse of ground-floor space.

Rescind ground-floor Retail Protection Ordinance.

The City staff stressed the importance of City staff being a known, visible, and trusted figure in the community.

Figure 3 Los Altos - Downtown Triangle - Commercial Retail Sales (CRS) Figure 2 Third Street Promenade - Bayside Conservation District (BC)Remove ground-floor retail restrictions on side streets and blocks away from the main commercial corridor.
Expand the definition of “retail-like use” to include uses that generate pedestrian activity.

Remove restrictions on formula retail.

Make permitting process simple, quick, and predictable.

Reduce in-lieu parking fee to allow new development or
intensification.
Allow transfer between uses without requiring parking.

Peer Cities
To gain a broader understanding of Palo Alto's regulatory provisions and procedures and inform the recommendations, three communities were interviewed to identify gaps and differences in approaches to retail development as well as to review the zone districts most similar to Palo Alto.

The jurisdictions were identified during the Planning and Transportation Commission and stakeholder interviews as having flexible zoning codes, efficient permit procedures and processing, and similar or desired retail districts. These were the following:

City of Santa Monica (focus was on Third Street Promenade – Bayside Conservation District)
City of Los Altos (focus was on Downtown Triangle – CRS Zone) City of Redwood City (focus was on Downtown area)
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Redwood City Figure 4 Redwood City Zoning Map
The following are key policy and zoning regulations and permitting procedures identified in the interview with City staff.

Any changes to use in the downtown area, including retail, can be done by right.

The City provides a floor area ratio increase if the applicant provides housing or mixed uses in their development project.

The City has several vacancies in the downtown and they are trying to attract other active uses, not just retail.

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Changing Nature of Retail
Rise of E-Commerce Experience-based Retail
Retail has changed significantly over the last decade with the evolution of online retailer platforms and flexible mixed-use spaces. The pandemic has exacerbated this evolution, increasing the quantity of purchasing of goods and services via a myriad of avenues, especially via e-commerce. This trend is less of an anomaly and more of a paradigm shift in retail. As consumers diversify the ways they purchase goods and services, the role of brick-and- mortar establishments and traditional retail districts are transitioning.

While there are always consumers who prefer e-commerce, many businesses remain important physical anchors in retail districts, such as grocery stores, eating and drinking establishments, personal services, exercise studios, medical services, and theaters.

The growth rate of e-commerce is significantly higher compared to the growth rate of total retail sales in the US, indicating a strong preference for online shopping versus brick-and-mortar stores. The US e-commerce grew

7.6 percent in 2023 and total sales grew 3.8 percent. This trend is projected to continue and create competition for and innovation in local retail and commercial spaces.

Experiential retail aims to provide customers with unique and memorable experiences beyond traditional shopping. The desire for retail experiences is on the rise with millennials saying that 52 percent of their spending goes on experience-related purchases. 2 “Retailtainment” is a subset of experiential retail that elevates the customer experience through entertainment by offering immersive retail experiences, where brands are able to provide customers with fun, unique, and in-person experiences that elevate shopping to new heights. Key features of experiential retail include:Palo Alto Specific Trend While specific statistics on the share of e-commerce in Palo Alto may not be readily available, it is important to recognize that national trends significantly influence local communities. Palo Alto, like many other cities, experiences the effects of broader economic shifts. The Comprehensive Economic Development Strategy, done by Streetsense and adopted by the Council in 2023, indicated that there is an oversupply of 460,000 square feet of retail space in the City. While the shift to e-commerce is one of the factors, the study also indicates that hybrid work has reduced the demand for retail in Palo Alto by over 100,000 square feet.

Unique Spaces and Objects: Retail spaces that stand out, interesting displays, and creative use of physical environments.

High Customer Engagement: Interactivity, personalization, and emotional connections.E-commerce has and continues to grow as a percentage of total retail sales.

It grew from 8 percent to 19.1 percent of total retail sales from 2012 to 2021. The growth was significant during the pandemic. In 2022, US e- commerce represented 21.2 percent penetration total retail sales and that in 2023 was 22.0%, according to Digital Commerce 360 analysis of US Department of Commerce data. 1
Technology Integration: Leveraging tech to enhance customer interactions.

According to a recent report from Forrester and Adobe, brands defined as “experience-driven” are seeing an average growth rate of 19 percent per year, compared to 13 percent for other types of retailers. That study also found that retailers utilizing experiential tactics are driving repeat purchases at rates nearly twice those of traditional retail. 3
Figure 5: US E-commerce Sales as a Percentage of Total Sales Source: Digital Commerce 360
1 Digital 360, US ecommerce sales penetration hits new high in 2023, accessed April 18, 2024, https://www.digitalcommerce360.com/article/us-ecommerce-sales/. 2 Washington Post, “Shoppers are choosing experiences over stuff, and that’s bad news for retailers,” accessed April 18, 2024, https://www.washingtonpost.com/business/economy/shoppers-are- choosing-experiences-over-stuff-and-thats-bad-news-for-retailers/2016/01/07/eaa80b5a-b4a7-11e5- a76a-0b5145e8679a_story.html.
3 Experiential Retail: What You Need to Know in 2020, accessed April 18, 2024, https://www.commercialsearch.com/news/experiential-retail-what-you-need-to-know-in-2020/.

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Market Profile
Market research was conducted to understand the area's demographics and office and retail market conditions, as well as retail demand and supply. ESRI Business Analyst- demographic mapping software tool and CoStar- a real estate information tool, were used for this research; the information was supplemented by City staff and stakeholder interviews. The data used to summarize the market study can be found in Appendix B
Top Tier
These are the residents of the wealthiest Tapestry market and earn more than three times the median US household income. They have the purchasing power to indulge in any choice. Aside from the obvious expense for the upkeep of their homes, consumers select upscale salons, spas, and fitness centers for their personal well-being and shop at high-end retailers for their personal effects. They take lavish vacations and fill their weekends and evenings with opera, classical music concerts, charity dinners, and shopping. They mostly shop at high-end retailers such as Nordstrom, but also at other meddle-end stores such as Target, Kohl's, Macy's, and Bed Bath & Beyond. They also shop online.

This section is divided into three sections:

Demographic Profile: An understanding of demographics, their purchasing power, and the products they consume helps businesses located in the area to cater to these groups and, in turn, increase their chances of success. Source: ESRI
Urban ChicLeakage and Surplus: An analysis of leakage and surplus provides a snapshot of the type of retail that is missing in the area. This information, along with the demographic makeup of the areas, helps business owners target the retail stores that will cater to the population in the area.

Urban Chic residents are professionals that live a sophisticated, exclusive lifestyle. Half of all households are occupied by married-couple families, and about 30% are singles. These are busy, well-connected, and well-educated consumers—avid readers and moviegoers, environmentally active, and financially stable. This market is a bit older, with a median age of 43 years, and growing slowly but steadily. They shop at stores such as Trader Joe's, Costco, or Whole Foods. They like to eat organic foods, drink imported wine, Summary: This section summarizes key observations and findings from the market profile.

Demographic Profile and truly appreciate a good cup of coffee. They travel extensively (domestically and internationally) and shop at upscale establishments. They embrace city life by visiting museums, art galleries, and movie theaters for a night out. In their downtime, they enjoy activities such as skiing, yoga, hiking, and tennis.

ESRI provides a system of market segmentation built by using a large, well- selected array of attributes of demographic and socioeconomic variables to identify numerous unique consumer markets throughout the United States.

This system is called Tapestry Segmentation. The data can provide insight on essential consumer variables, such as age, education level, the likeliness of car or home ownership, a consumer's willingness to buy or purchase certain products, and their overall economic purchasing power. This is an important aspect of market research and helps create an understanding of the types of land uses that will best serve the neighboring population in a 10-minute drive time.

Source: ESRI
Laptops and Lattes
These residents are predominantly single, well-educated professionals in business, finance, legal, computer, and entertainment occupations. They are affluent and partial to city living—and its amenities. Many residents walk, bike, or use public transportation to get to work, a number work from home. Laptops and Lattes residents are cosmopolitan and connected— technologically savvy consumers. They are active and health conscious and care about the environment. They spend money on nice clothes, dining out, travel, treatments at day spas, and lattes at Starbucks. Physical fitness is a priority, exercising at a club or other facility on a regular basis. They enjoy sports such as jogging/running, biking, tennis, soccer, skiing, yoga, and Pilates, as well as participating in fantasy sports leagues. They favor organic food and purchasing groceries at higher-end markets.

More than 70 percent of the population living in the 10-minute drive time of the commercial areas in Palo Alto falls in one of these three tapestry segments:

Source: ESRI
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Leakage and Surplus
ESRI's Retail MarketPlace database includes a leakage/surplus factor that measures the balance between the volume of retail sales (supply) generated by retail businesses and the volume of retail potential (demand) produced by household spending on retail goods within the same industry. Analysis of the data has led to the following results for supply and demand within a 10- minute driving time of California Avenue and University Avenue (Trade area).
restrictions, or City approval. All of this results in key advantages and competition for Downtown and California Avenue.

Summary
There seem to be several gaps in the market based on the leakage/surplus reports. These include personal services and grocery stores. At the same time, the demographics of the area seem to use upscale salons, spas, and fitness centers for their personal well-being and shop for groceries at Trader Joe's, Whole Foods, and other organic stores. Hence, such retail and retail- like uses, if provided in the area, have chances of success, and can help lower vacancies indicated in the findings section. Based on such findings, there are opportunities for possible code and regulatory changes to help capture the market.

Leakage (Demand)
Leakage in an area represents a condition where demand exceeds supply.

In other words, retailers outside the market area are fulfilling the demand for retail products; therefore, demand is “leaking” out of the trade area.

Such a condition highlights an opportunity for new retailers to enter the trade area or for existing retailers to extend their marketing outreach to accommodate the excess demand.

Trade area leakage includes- Auto parts, motor vehicle dealers, auto accessories, building materials, lawn and garden equipment, other general merchandise stores, florists, vending machine operators, direct selling establishments, special food services, drinking places, used merchandise stores, office supplies, stationery, and gift stores, gasoline stations, health and personal care stores, specialty food stores, and grocery stores.

Surplus (Supply)
Surplus in an area represents a condition where supply exceeds the area’s demand. Retailers are attracting shoppers that reside outside the trade area. The “surplus” is in market supply. Brand positioning and product mix are key differentiators in these types of markets.

Trade area surplus includes- Shoe stores, book, periodical, and music stores, furniture stores, department stores, home furnishings stores, electronics and appliance stores, jewelry, luggage, and leather goods store.

Stanford Shopping Center
It should be noted that the commercial areas along California Avenue and University Avenue receive direct competition from the Stanford Shopping Center due to being in its close vicinity. The Stanford Shopping Center is successful and attracts clientele from the region. The retail areas in the City can learn from the success of the professionally managed shopping center, which does not have the same zoning constraints. The mall emphasizes continuous pedestrian activation and comfort, and more non-exclusive retail on the ground floor, such as spas, personal services, restaurants, and food and convenience. It should also be considered that parking is set, and tenants can change usage without triggering parking fees, construction, City of Palo Alto 8
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Vacancy Trends and Findings
Retail Space Trends and Findings
National Trends
Figure 6: US Retail Vacancy Trend
According to a CoStar report, “The US retail market has demonstrated remarkable resilience over the past three years, culminating in historically tight availability at the end of 2023 with the national average vacancy rate hitting a new low of just 4.0 percent. Current demand and supply-side factors are likely to persist regardless of economic conditions. On the demand front, the retail sector has benefited significantly from a marked decrease in bankruptcies and large-scale store closures over the past three years, resulting in a 20 percent reduction in the amount of retail space vacated compared to pre-pandemic norms.

With retail tenants no longer moving out of spaces at the same robust clip seen in 2017 through 2020 and demand supported by a historic surge in consumer spending, the amount of available retail space tightened quickly as less and less backfill space became available. Supply-side factors equally drove the rapid contraction in vacancy, as very little new retail development coupled with an active pace of demolitions resulted in the lowest levels of net retail space deliveries seen in decades.” 4
This trend appears likely to remain in place for the foreseeable future based on the current range of outcomes. In only the two most adverse scenarios, the Depression and Severe Downside alternatives, does retail vacancy increase above 5 percent.

The boost in consumption coming out of the pandemic, retail sales, excluding e-commerce, stand 10 percent higher than pre-pandemic levels, even after accounting for inflation. This increased sales potential suggests closures will likely be limited to a select few underperforming stores and those stemming from bankruptcies. Source: CoStar
4 CoStar reports, “Retail Supply and Demand Likely To Remain in Balance for Foreseeable Future,” accessed April 18, 2024, https://www.costar.com/article/523238330/retail-supply-and-demand-likely- to-remain-in-balance-for-foreseeable-future.

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Palo Alto Findings

An evaluation of recent changes in vacancy rates over the last year (2023-2024) shows improvement in the California Avenue area and Midtown areas.5

All areas except Midtown show an increase in period of months vacant since the pandemic with some retail spaces being vacant for 20 to 30 months in the Downtown and California Avenue areas.

Data derived from CoStar illustrates retail vacancy trends in Palo Alto.

Detailed ten-year trend tables and graphs for study areas in Palo Alto as well as peer cities are documented in Appendix B. Below are key observations and findings from the CoStar data.

Vacancy rates vary considerably quarterly, particularly in smaller market areas where one vacancy represents a significant percentage of the total.

Retail space vacancy in the Town and County area has increased dramatically since the COVID-19 pandemic from an average of 4.5 months in 2019 and 2020 to over 40 months in Q1 of 2024. Retail and office vacancy rates have increased significantly in each of Palo Alto's retail districts in the last decade, specifically in the Downtown, California Avenue, and El Camino Real-Town and Country area.

The Town and Country area was hit particularly hard by the COVID- 19 pandemic, with vacancy rates increasing from among the lowest rates in Palo Alto to the second highest after Downtown.

Landowners seem to be willing to forgo rents and keep their properties vacant for longer periods of time. According to a Harvard study, “Why Do Urban Storefronts Stay Empty for So Long?” 6 storefronts often remain empty for months or years at a time, even in some of the world’s highest-rent retail districts. The study concluded that, eventually, a primary driver of retail vacancy in dense urban areas is the fact that landlords are willing to forgo rents today to preserve the option to lease their space to someone else (who might pay higher rents) tomorrow. The study found that while a vacancy tax would decrease the vacancy rate and rents, it would also lower tenant quality and lead to faster churn in the city’s storefronts.

The rents for the retail spaces in the commercial areas that were studied have been on a steady rise despite increases in the vacancy rate, with the highest rent per square footage in the Downtown and Town and Country areas.

Unlike national trends, the trend in Palo Alto shows a rise in vacancy rates since the end of the COVID-19 pandemic.

Vacancies seemed to have been rising several years before the pandemic began. This could be due to a combination of factors such as changes in regulatory environment, rise of e-commerce, and a continued and latent expression of weakness in the retail sector following the Great Recession.

All retail areas still have vacancy rates greater than what they were pre-COVID.

Midtown has performed well regardless of the COVID-19 pandemic, likely due to being isolated and supported as local service to surrounding residential areas with a strong customer base.

Table 1: Retail Vacancy Trends as of 2024 Q1
Vacancy Rate Change*
(2023-2024)Area Total Retail Space (SF) Vacant Retail Space (SF) Vacancy Rate Rent per Square Foot Downtown 740,000
295,000
175,000
54,300
463,000
104,000
1,831,300
112,000
28,200
21,400
5,000
8,100
3900

15.1%

9.6%

12.2%

9.1%

1.8%

3.8%

9.8%

6.90% $77.11
$54.47
$76.70
$48.81
$53.65
$55.67
California Avenue
ECR - Town and Country
ECR - California Avenue
ECR - South
Midtown
TOTAL
-4.10%

0.50%

8.20%

0.20%
-0.4%
178,600
Source: February 2024 CoStar Group Analytical Reports
ECR = El Camino Real
* Indicates one-year change. A negative percentage indicates that the vacancy has reduced in a one-year period. Positive numbers indicate an increase in vacancy in one-year period. 5 CoStar Data Analytical Reports accessed February 9, 2024, https://www.costar.com/. 6 Moszkowski, Erica and Daniel Stackman, “Why Do Urban Storefronts Stay Empty for So Long?”, 2023, accessed February 7, 2024,
https://emoszkowski.github.io/ericamoszkowski.com/Moszkowski_JMP.pdf.

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Figure 7: Retail Vacancy Rate (2014 Q1 to 2024 Q1) Comparison with Peer Cities As a part of the study, the retail vacancy trends were compared to peer cities Santa Monica and Los Altos. Detailed graphs of these trend comparisons can be found in Appendix B.
Similar to Palo Alto, unlike national trends, the vacancy rate significantly increased in Santa Monica in both areas studied, i.e., the Third Street Promenade and the Main Street area.
The Third Street Promenade was hardest hit, post-COVID-19, of all the retail areas studied. One contributing factor could have been the pedestrian nature, which became less favorable due to limited in- person interactions during the pandemic. As a result, foot traffic and business activity declined, impacting the Promenade’s overall performance.
The vacancy rate in downtown Los Altos increased only slightly post- pandemic but has showed signs of recovery since 2021. It remains below 3 percent.

Figure 8: Retail Rent per Square Foot (2014 Q1 to 2024 Q1) City of Palo Alto 11
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Office Space Trends and Findings
National Trends According to Office News, Class A office space in highly prestigious and well- connected locations is still in demand, especially where new or newly renovated offices are concerned. Premiums for high-end offices have increased nationwide by more than 30 percent since the onset of the pandemic, although it has not affected demand. 8
2023 Q4, reducing the vacancy by approximately seven percentage points, the vacancy increased again in the last quarter. This could be due to office closures or offices not reinstating lease agreements and shrinking office space in a hybrid work environment.

The US office vacancy rate has reached an all-time high due to the impact of remote work arrangements. It rose to a record-breaking 19.6 percent in the fourth quarter of 2023. This is the largest quarterly increase since the first quarter of 2021, and larger than the 19.3 percent level reached twice in 40 years. In conjunction, the new construction of office space has cooled to the lowest levels since 2012. 7
El Camino Real retail areas, except for Town and Country, show a drop-in vacancy rate post-COVID-19 pandemic. A relatively small amount of vacant office space in Town and Country (5,800 square feet) could result in a high vacancy percentage due to limited overall inventory.

Palo Alto Findings
Vacancy rate data derived from CoStar illustrates retail vacancy trends in Palo Alto. Detailed ten-year trend tables and graphs for study areas in Palo Alto as well as peer cities are documented in Appendix B. Below are the findings.

The remote work trend is seen as the foremost reason for high vacancy rates. The COVID-19 pandemic accelerated the adoption of remote work.

Many companies shifted to telecommuting, reducing the need for physical office spaces.

Similar to Town and Country, Midtown shows a high vacancy rate with actual vacant square footage of only 8,900 square feet.

Similar to national trends, the office vacancy rate has been increasing in Palo Alto. Vacancy rates are greater than 10 percent in most areas, post-COVID-19 pandemic.

Office rents have also dropped, with peak asking rents being right before the COVID-19 pandemic. However, this has not helped with net absorption. Overall, Downtown and Town and Country have the highest rents per square foot in Palo Alto.

Industries like tech and finance have embraced remote work more readily, affecting office demand. Sectors that rely heavily on in-person collaboration (e.g., creative agencies, legal firms) may still require office space. Most office space in Palo Alto catered to tech companies. The demand for office space has been impacted by tech companies readily embracing remote work and lease expirations.

Lease expirations also provide opportunities for companies to renegotiate terms or explore alternative spaces. Some businesses choose not to renew leases, contributing to higher vacancies. Sustainability and environmental awareness are also influencing office design. Some companies prioritize green buildings or energy-efficient spaces. Older, less efficient buildings may struggle to attract tenants.
x Most office buildings in the four-district study area are older. There is limited Class A building space in the study areas, the largest of which is in the Downtown area with 85,000 square feet. However, this is an older building, built in 1980s. 9
Downtown has the highest overall inventory of office space and highest square footage of vacancy. The vacancy rate has continued to increase post-COVID-19 pandemic with no sign of recovery.

California Avenue has the highest vacancy rate as of February 2024.

While there has been some absorption of space from 2022 Q4 to Table 2: Office Vacancy Trends as of February 2024
Vacancy Rate Change
(2023-2024) *Area Total Office Space (SF)
2,100,000
712,000
Vacant Office Space (SF) Vacancy Rate

16.0%
Rent per Square Foot
$93.77Downtown 339,000
166,000
5,800

3.7%

1.0%

2.3%
-4.6%
-5.6%
-0.2%
California Avenue
ECR - Town and Country
ECR - California Avenue
ECR - South

23.4% $72.23
49,800 11.6% $87.63
192,000 15,500
20,900
8,900

8.1% $72.45
219,000 9.6% $66.11
Midtown 43,200 20.7% $65.13
TOTALS/AVERAGE 3,316,000 556,100 16.8% -1% $76.22
Source: February 2024, CoStar Group Analytical Reports
ECR=El Camino Real
* Indicates one-year change. A negative percentage indicates that the vacancy has reduced in a one-year period. Positive numbers indicate an increase in vacancy in a one-year period. 7 CNN Business, “Office vacancy rate hits record high,” January 8, 2024, https://www.cnn.com/2024/01/08/economy/office-space-vacancies-hit-a-record- high/index.html#:~:text=The%20national%20office%20vacancy%20rate,vacancy%20rate%20was%20ar ound%2016.8%25.
8 Office News, US Office Market Trends 2022 – Statistics, Challenges and Outlook, February 24, 2022, https://offices.net/news/us-office-market-trends-2022-statistics-challenges-and-outlook/. 9 Commercial Café, Commercial Listings Palo Alto, accessed February 7, 2024, .

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Figure 9: Office Vacancy Rate (2014 Q1 to 2024 Q1) Comparison with Peer Cities Similar to Palo Alto, the peer cities show increases in office vacancies post- COVID-19 pandemic. Detailed graphs of these trend comparisons can be found in Appendix B.
The vacancy square footage and the trend of increases in vacancy in the Third Street Promenade area is similar to Downtown Palo Alto but the vacancy rate is higher. For 2024 Q1, it is 27.1 percent for the Third Street Promenade area compared to 16.5 percent in Downtown Palo Alto.

Santa Monica Main Street also experienced a remarkably high vacancy rate of 29.9 percent, as of 2024 Q1.

The vacancy rate has increased significantly in Los Altos since peaking in 2021 Q3 at 24.3 percent to 13.7 percent in 2024 Q1. This is besides the fact that the rents in Los Altos are comparable to California Avenue and El Camino Real while being lower than Downtown Palo Alto. This is also despite the fact that retail areas in Palo Alto have closer proximity to regional transit facilities compared to Los Altos.

However, it should be noted that absorption of one office space in Los Altos could result in a significant drop in the vacancy percentage due to significantly lower overall inventory, compared to the Downtown Palo Alto and California Avenue areas.

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Best Practices
The best practices summarized here are derived from respected leading industry resources such as the Urban Land Institute and the National League of Cities. In addition, several jurisdictions in the state (Santa Monica, Santa Cruz, and San Diego) that have adopted retail revitalization plans and strategies were also studied. Some of these may already be in practice in Palo Alto. The Recommendation Section provides detailed suggestions specific to Palo Alto
services, museums/galleries, health/fitness, performing arts, commercial recreation, and entertainment.

6. Create a parking relief program for businesses that have outdoor dining, are undergoing a change of use, or currently have off-site parking conditions.6. Encourage Complementary Uses. Non-retail complementary uses such as professional services and restaurants attract and allow people to stay in the area for longer and, in turn, support retail sales and street and district vitality.

7. Designate strategic zones with clear signage for rideshare uses and curbside delivery (e.g., Lyft, Uber, taxi).

8. Provide short-term and long-term bicycle parking at key locations throughout the commercial district.7. Encourage New Office and Residential Uses. Office workers create a demand for retail along the street, especially in the morning and at noontime. Residential development in and adjacent to the commercial areas also generate customers, pedestrian activity, and retail demand. Office uses generate significantly more persons per square foot than residential uses.

These best practices and principles are summarized and organized into the following key categories: 9. Use technology to provide parking signage indicating "where" and "how many" spaces are available for parking.1. Land Use and Zoning Ordinance

2. Parking and Curb Management

3. Approval Process
Approval Process
Time, fees, complexity, and clarity/certainty of the approval process play a vital role in a developer's or business owner's decision to locate or invest in a particular area. Below are some best practices for improving the process and creating a business-friendly environment in a community.

8. Extend Retail and Restaurant Hours. Longer hours equal stronger Land Use and Zoning Ordinance sales, and strong sales define a successful shopping street.

1. Attract and Retain People. Allow land uses that can attract and 9. Concentrate Retail on Blocks and Nodes. Shoppers typically willretain people throughout the day and evening hours. walk for only three or four city blocks. 10

1. Work with property and business owners and applicants to allow and make changes of uses and tenant improvements quickly to adapt and respond to changing market demands.

2. Prioritize People. Focus longer-term land-use code adjustments on efforts that put people's use (not vehicles or parking) of public space first.

10. Create Attractive Spaces. Incentivize privately owned public spaces and improve physical access to the public space.

Parking and Curb Management 2. Amend use regulations, development standards, and approval processes to earn a reputation for quick, efficient, predictable, and business-friendly service and approvals.

3. Create Flexible, Permissive Zoning. Eliminate restrictive zoning for potential low-impact uses of vacant spaces and reduce regulatory hurdles.

While the focus of this report is not specifically on parking ordinance reform, parking is closely related to land use and retail recovery. Below are some best practices for creating healthy commercial areas. 3. Ensure that the business licensing and permitting process is not an impediment to good retail activity.

Fill ground-floor vacant spaces by allowing the use of space to incubate small or start-up businesses. 1. Create a program to provide credits for municipal parking spaces to reduce the overall development burden.Allow pop-ups, incubators, and temporary uses that can operate with short-term leases.

4. Ensure that zoning regulations are designed with flexibility in mind and that changes can happen administratively during times of need.2. Preserve on-street spaces for customers.

Allow artisan shops that create and sell products on site such as handmade candle shops, hand crafted jewelry and so on.

5. Allow most uses and improvements without discretionary approval (i.e., by right or ministerially). Retail and supportive uses should be allowed by right, without discretionary approval, to the extent possible.

3. Promote shared parking that can support multiple different uses throughout the day.

4. Create Certainty with Objective Standards. Replace vague and 4. Adjust (reduce) minimum requirements to better align with demand and reduce construction costs for developers. Minimums should be less than the actual demand.
subjective standards with objective development standards.

6. Consider reducing or waiving fees associated with building construction or redevelopment in the focus area.5. Include Active Use as a Part of Retail Use. Broaden the definition of retail to include active uses—those that generate activity on the street, such as eating and drinking, hotels, entertainment, personal

5. Create a flat rate for parking regardless of use to provide flexibility in the change of use.
10 Urban Land Institute, “Ten Principles for Rebuilding Neighborhood Retail,” January 1, 2003, accessed February 7, 2024, https://americas.uli.org/ten-principles-for-rebuilding-neighborhood-retail-2/.

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AB 2097 Implications and Recommendations
The purpose of this portion of the study is to review the implications of recently adopted Assembly Bill (AB) 2097 on the City of Palo Alto’s parking regulations and management strategies, the adequacy of the existing parking inventory and potential impacts on retail establishments. The full AB 2097 analysis is contained in Appendix C.

Figure 10: AB 2097 Relief Areas
Effective January 1, 2023, AB 2097 prohibits public agencies from imposing minimum automobile parking requirements on most types of development within a half-mile of a major transit stop. However, this reduction does not apply to projects that designate any portion of the project as a hotel, motel, bed and breakfast inn, or other transient lodging use, or reduce parking spaces designated for this purpose.

Exceptions are allowed in limited circumstances. The bill authorizes a city, county, or city and county to impose or enforce minimum automobile parking requirements on a housing development project if the public agency makes written findings, within 30 days of the receipt of a completed application, that not imposing or enforcing minimum automobile parking requirements on the development would have a substantially negative impact, supported by a preponderance of the evidence in the record, on the public agency’s ability to meet its share of specified housing needs or existing residential or commercial parking within 1/2 mile of the housing development.

Figure 10 identifies the areas of Palo Alto that are affected by and subject to the provisions of AB 2097.

There are approximately 6,677 public parking spaces across the four retail districts in the study area. Of these, 2,125 are on-street spaces and 4,552 are off-street public parking spaces within the public parking lots and public parking garages that existed at the time of this study. Based on the limited data received from the City as well as on interviews with the City’s Office of Transportation and stakeholders, there seems to be surplus parking in the commercial core areas of the City, especially the Downtown and California Avenue areas. The stakeholders did not express any concern related to availability of parking. However, as development occurs, the adequacy of the existing parking supply may be challenged from new or intensified land uses without construction of new on-site parking due to AB 2097.

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Below are some of the recommended strategies from the AB 2097 parking and retail impact assessment.

Figure 11: Commercial Zoned (CD-C) Parcels Outside AB 2097 Impacted Areas- Downtown/University Ave

1. Extend AB 209 to Entire CD-C Zone for Equity. Within Downtown, there are 16 parcels in the CD-C district on University Avenue that lie just north of the half-mile radius from a high-quality transit stop that are not exempted from the parking requirements by AB 2097.

Unless the provisions of AB 2097 are extended, these parcels will remain subject to minimum parking requirements and the
Commercial Downtown Assessment District standards of 18.52 of the PAMC. To ensure equitable development conditions for all parcels in the Downtown area, it is recommended that uniform regulations be applied to the entirety of the CD-C districts in the Downtown area.

2. Allow Retail Flexibility Without Requiring Additional Parking: In retail areas outside the influence of AB 2097, the conversion of retail space to other retail or retail-like uses (for example, changing a boutique store into a restaurant or art gallery) should not impose restrictions on developers to provide parking in accordance with the converted uses, as long as the square footage is not increased.

3. Parking Management & Optimization. Without the ability to require on-site parking or require in-lieu payments toward public parking, the City will need to focus primarily on management and optimization of the existing parking supply. An optimal parking threshold for commercial areas is typically around 85 percent occupancy11. Beyond this point, parking availability becomes strained, leading to inconvenience for visitors and potential business impact. To address this, the City should actively monitor and manage parking utilization. At some point, future growth and intensification may challenge the adequacy of the existing supply.

4. Develop Ordinance to Unbundle Parking. The city should update the parking ordinance to include provisions of AB 1317 that will go into effect on January 1, 2025, which requires developers to unbundle parking from residential developments. The benefits of unbundling include more efficient use of existing parking spaces, cost savings for non-drivers, and clearer market valuation of land used for parking. It is especially helpful in areas not subject to minimum parking requirements.
11 Shoup Donald, 2011, The High Cost of Free Parking, Routledge City of Palo Alto 16
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5. Create Employee Parking Plan and Program. Business owners should encourage employees to not park in the most convenient customer parking spaces.

8. Enhance City’s Transportation Demand Strategy (TDM) Strategy.

The City has an ordinance granting the Planning and Development Services Director the authority to require TDM strategies. However, a developer’s influence is limited to the site. The City can be more effective in implementing area-wide TDM strategies such as public transit improvements, pedestrian-friendly infrastructure, and promotion of active transportation and mixed-use development as suggested by the Comprehensive Economic Development Strategy- Guiding Principle 2.

10. Improve Signage and Wayfinding for Parking: Effective signage ensures visitors can find their way without confusion. Palo Alto has signage directing to the parking areas, but they don’t provide information on parking availability in particular garages or lots or directions to garage or lot. The existing APGS and emerging technologies can be integrated with digital signage at strategic locations, which can provide real time information on parking. This will reduce the time spent to find parking in the retail areas.

6. Pursue Shared-Use Agreements. The City can facilitate a shared parking between landowners by creating ready to use shared parking agreements. The City can also enter into parking agreements with the landowners to use private parking during hours that it typically goes unused. These areas can be advertised on-site and, on the website, as available parking spaces during certain times of the day.

11. Curb Space Management. Increasing the opportunity to walk and bike to various locations and to complete short distance trips can alleviate pressure on parking. Adopting a micromobility program for shared bicycles and/or scooters and providing adequate curb space may also reduce the need for car for shorter trips.

9. Explore Emerging Technologies. As innovative technologies emerge, it is advised that the City explore and implement technologies that can deliver real time information via app or website. These can be applicable to parking garages, lots and on- street parking spaces and can help patrons find and receive directions to the nearest available space.

7. Reevaluate City’s Paid On-Street Parking Program. The City could implement incremental increase in rates instead of a flat $25 per day for public parking garages and lots 12. The City could also evaluate implementing a paid on-street parking program instead of moving the vehicle every
threshold is reached.
2 hours when a parking utilization
12 Parking Work Plan, https://www.cityofpaloalto.org/Departments/Transportation/Parking/Palo-Alto- Parking-Action-Plan/Parking-Work-Plan, Accessed April 22, 2024 City of Palo Alto 17
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Zoning Analysis and Recommendations
Zoning Review and Comparison RECOMMENDATION 1.1 laundry and cleaning; art and dance studios; fitness or exercise studios, and similar uses; learning centers.]The current state of the code suggests that a comprehensive review, revision, and update is warranted to ensure the code functions efficiently, equitably, and as intended.

A detailed review of the Palo Alto Zoning Ordinance was conducted to review the permitted uses, development standards, and procedures. This is documented in Appendix D. The purpose of the analysis is to identify likely and potential constraints and opportunities to improve the health and function of retail uses and the main commercial retail and commercial corridors and provide recommendations for improvement. In addition, the analysis and recommendations are derived from the interviews with stakeholders, including developers, the Chamber of Commerce, and business owners (refer to Appendix A). Following the interviews with the cities of Santa Monica and Los Altos, the zoning for all commercial areas was reviewed and compared with zoning for the Palo Alto study areas. Appendix D contains excerpts and notes on the most relevant portions of the code.

CD-N Zone: "A conditional use permit is required for the following uses when fronting on University Avenue: (A) Fitness or exercise studios, and similar uses; and (B) Learning centers intended for individual or small group settings."Examples of some symptoms and characteristics that suggest comprehensive review and update are warranted include:
a
CS Zone: "A conditional use permit is not required for medical office, or commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a conditional use permit is always required: (A) medical office fronting on California Avenue and in the Midtown Shopping District; (B) commercial recreation uses fronting on California Avenue and in the Town and Country Village Shopping Center." a. Many and overlapping combining districts.
b. Complex listings of permitted uses with multiple exclusions, exceptions, and footnotes
c. Inconsistent language and many variations of similar regulations
d. Reliance on subjective standards, findings, and determinations e. Complaints and frequent requests from applicants
f. Lengthy processing times, difficult implementation, variable application and interpretation, and errors
CC, CC(2) Zones: "A conditional use permit is required for the following uses when fronting on California Avenue: (A) Fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area; and (B) Learning centers intended for individual or small group settings. A conditional use permit is required for fitness or exercise studios and similar uses exceeding 1,800 square feet in gross floor area in Town and Country Village Shopping Center."
Zoning Recommendations
The analysis resulted in the following findings, observations, and recommendations.

It is recommended that the code be reviewed and revised to make it more user-friendly. In an effort to understand and evaluate the use regulations and development standards, comparative use tables for the commercial districts and the combining districts were created. The tables make it easier to see which uses are permitted in each district and improve the overall understanding of the zones through the comparison of districts.

1. Conduct a Comprehensive Zoning Cleanup
of Mature, Complex Code. CD-C, S, N Zones: "A conditional use permit is not required for commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a conditional use permit is always required: (A) medical office fronting on University Avenue; (B) commercial recreation uses fronting on University Avenue."RECOMMENDATION 1.2The Palo Alto Zoning Ordinance is complex and robust. It is a mature code that reflects decades of cumulative modifications to address a variety of concerns. However, the overall structure and organization have grown to be intricate and complicated. As a result, it is difficult, even for a seasoned professional planner, to navigate, understand, and implement the many overlapping layers, sections, and exceptions, and unique, narrowly defined, and targeted provisions. This is common with older codes. They accumulate many targeted amendments and revisions over the years. This detracts from the original organization and can impact the overall functional integrity. The Zoning Ordinance is particularly complex with respect to the regulation of retail and office uses. It appears that numerous individuals, specific amendments to address many concerns over the years may now have the cumulative effect of overregulating and preventing the healthy reuse and improvement of sites and buildings.

The code could be made more user-friendly by integrating the use and development standards of the combining districts into the use and development standard tables.

CN, CC, CC(2), CS Zones: "Medical, Professional, and Business offices shall not be located on the ground floor unless any of the following apply to such offices:Below are examples of some of the subtle differences and restrictions on personal service uses that warrant evaluation of their need and effect on protecting or restricting a healthy commercial corridor: "Occupy a space that was not occupied by retail services, personal services, eating and drinking services.

R Retail Shopping Combining District: Permitted: "Personal services, except the following on California Avenue: beauty shops; nail salons; barbershops; laundry and cleaning services as defined in Section 18.04.030(114)(B); fitness or exercise studios exceeding 1,800 square feet in gross floor area; and learning centers intended for individual or small group settings." "Are located in new or remodeled ground floor area built on or after March 19, 2001, if the ground floor area devoted to housing, retail services, eating and drinking services, personal services."
These uses are typical and necessary components of a healthy commercial corridor. The complexity of the many variations and different applications suggests that these standards were created and adopted independently and may not be necessary or are unnecessarily restrictive.

GF Ground Floor Combining District: Permitted: "Personal services, except for parcels with frontage on University Avenue, where uses defined in Section 18.04.030(114)(B), (G), (H), and (I) are not permitted." [Prohibits:

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RECOMMENDATION 1.3 opinion and grievance could be favored or have a greater influence on the decision than compliance with objective standards of the Zoning Ordinance.

Combined with the many subjective standards, the approval process for even simple projects can easily become costly and cumbersome. In addition to the cost and risk to project applicants, this can dramatically increase the workload and resources on behalf of City staff as well as the PTC, City Council, and supporting staff.
otherwise be preferable to extensive and prolonged vacancies that detract from and impact the overall health and vitality of the larger district.A comprehensive review can streamline and standardize the standards where possible and reevaluate the need and effect of the precise standards and whether they are consistent with the broader goal of a healthy commercial corridor.

As noted in the 2023 Comprehensive Economic Development Strategy, there is a large amount of vacant commercial and retail space that exceeds the current and foreseeable market demand for retail. Large proportions of this space will remain vacant unless and until it is allowed to be converted to uses other than retail. By preventing the conversion of former retail spaces to non-retail uses, the RPO has contributed to the increasing vacancies. Because the RPO is applicable to all retail uses citywide, the restrictions also have the effect of interfering with the natural selection and adaption of the market. It treats all retail areas as equally important. As a result, there is no ability to adjust with and adapt to the market. Instead of allowing the market to concentrate the limited demand for retail on core areas of strength, the RPO effectively dilutes the limited retail demand citywide.

2. Create Streamlined and Predictable
Approval Processes
RECOMMENDATION 2.1
The approval processes should:

1. Create a ministerial approval process for certain projects (e.g., minor tenant improvements, sign permits, minor changes of use, expansions, or additions).Where possible, it is desirable to allow project approvals through a ministerial, non-discretionary process subject to compliance with objective standards. This saves time and money for applicants and staff and enables timely improvement and investments in private property and the public realm. Discretionary approval is necessary and appropriate where projects have unique features and circumstances that are beyond purely objective standards. In these cases, the decision-making authority should be kept at the professional staff level to the extent possible. Approval by the City Council should generally be limited to projects that involve policy and legislative matters such as general plans, specific plans, or zone changes, amendments, or deviations.

2. Keep the majority of typical discretionary approvals at the staff or Planning and Development Services Director approval authority.

3. Limit projects that require City Council approval to those that involve policy or legislative changes or formal appeals to the Planning and Development Services Director's decision.

Further, it has been noted multiple times in interviews with property owners and managers that the RPO (and the limitations on the creation and conversion to office uses) has created traps for property owners. Once a retail use is established, the property is effectively locked into only that retail use. This dramatically limits the ability of the property owner to manage and market the property and adapt to market conditions. This trap may have the unintended consequence of discouraging establishment of new retail uses for fear of the inability to ever change back to another use— at least without great difficulty, time, and cost.

3. Limit the Retail Preservation Ordinance
(RPO) (18.40.180).The Palo Alto Zoning Ordinance allows for approval of many projects by the Planning and Development Services Director. This is to be commended as this approach can significantly shorten the approval period and reduce processing costs. It also has the benefit of avoiding or minimizing politicization of a particular project and decisions that are based on anything other than the objective merits of the project. Keeping the approval decision with professional staff and subject to objective standards and procedures is preferable for most projects.

It is essential that restrictive regulations have standards and procedures to obtain relief for hardships. The standard for relief of this section allows waivers based on economic hardship. However, the current standard is among the highest possible and most difficult thresholds to achieve—an unconstitutional taking and deprivation of all economic value.

This section of the Zoning Ordinance is an example of the complexity and extremely strict nature of the zoning regulations. It appears that the effect of the regulations, standards, and process may, contrary to the implied intent of the regulations, actually contribute to the erosion and decline of the health of the prime retail corridors. While regulations are necessary and can create great places and value, they also often have unintended consequences. They need to be evaluated periodically to ensure that they continue to function as intended.

This waiver threshold is disproportionate to the perceived potential threat of allowing non-retail uses on the ground floor. It implicitly favors vacant former retail space over non-retail use.

However, every approval by the Planning and Development Services Director can be elevated to the City Council. While this is typical in the case of a formal appeal of a decision, the Palo Alto Zoning Ordinance encourages this elevation with a simple request from any party. This is allowed by Planning and Development Services Director decisions on relief from the Retail Preservation Ordinance (18.40.180[c][3]) and other normal staff approvals (18.77.060[c-f]).

Change among ground floor and retail and similar uses is common and a necessary part of a healthy commercial corridor. Without change, there is less investment and updating of commercial spaces that typically occurs with new tenant improvements. As noted, the nature of retail has been changing, which has increased turnover and vacancies of many retail spaces and commercial corridors. The COVID-19 pandemic accelerated some of the shift to e-commerce and led to the failure of many retail and other commercial businesses. The RPO regulations appear to have contributed to the increasing vacancy rate by preventing alternative uses, which would RECOMMENDATION 3.1
This standard should be reconsidered. A lower and easier threshold or otherwise more permissive standards based on a simple finding of practical difficulty and/or economic hardship would help increase the occupancy of vacant former retail spaces, which would contribute to the overall activity and vitality within the corridor.The process requires notification of all neighbors within 600 feet of the project and a hearing and recommendation by the Planning and Section 18.40.180(c) Waivers and Adjustments; and Exemptions for the RPO should be revised to delete the unconstitutional taking of all economic value standard of subsection (A) Economic Hardship in favor of the practical hardship standard of subsection (B) Alternative Viable Active Transportation Commission (PTC). The PTC recommendation is forwarded to the City Council for a final decision. This adds considerable time, cost, and risk to every project. This process appears to create an environment where City of Palo Alto 19
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Allow non-retail uses:Use. Further, it is recommended that subsection (B) be amended to delete the exception of the applicability to the Ground Floor (GF) and Retail (R) combining districts to allow Alternative Viable Active Uses in the Downtown/University (GF) and California Avenue (R) areas. balance of the City will allow the conversion of excess retail space over time, as well as a concentration in the Downtown and California Avenue areas. The changes should be clearly communicated with the business and property owners. The effect of the changes should be monitored to evaluate whether the focused RPO is having the desired effect. In back office, not street-facing locations (i.e., behind retail or store fronts)

On side streets, off University and California AvenuesParallel revisions are recommended for Section 18.30(A).070 Waivers and Adjustments applicable to the R combining district. Section 18.30(C) Ground Floor (GF) Combining District Regulations does not have any waiver or adjustment provisions. It should be amended to also have a practical difficulty standard as recommended for the RPO and R combining district.

The relief and waiver provisions of the RPO and R and GF combining districts should be eased to be based on achievable objective standards, to keep the decision-making authority at the Planning and Development Services Director level (unless formally appealed), and to allow the practical difficulty standard of the alternative viable active use waiver option.

When vacancies exceed threshold (by percentage and/or duration) E.g., when vacancies exceed 10% in district for more than 12 months.
Subject to limits (concentration, size, proximity), e.g.:

Minimum 25% ground-floor commercial (Palo Alto Mixed-
Use standards)
The alternative waiver option requires the applicant to demonstrate standards that are purely within the subjective determination of the City and potentially impossible, and are at least very costly and difficult, to prove:

Maximum 15% of total floor area (Town & Country office
standards)

4. Allow Non-retail Uses on Ground Floor with
Limitations.

Maximum 30% of all street frontage within 300-foot radius (San Francisco)

"The permitted retail or retail-like use is not viable; The proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation; and Maximum 50% of street frontage per building > 100-foot frontage (Thousand Oaks) The proposed use will encourage active pedestrian-oriented activity and connections." The Ground Floor (GF) and Retail (R) combining districts in the Downtown/University Avenue and California Avenue core commercial areas, respectively, add a level of complexity and regulation that may not be necessary. The extensive and persistent ground-floor vacancies in these areas suggest that alternatives or modifications to the restrictions may be appropriate. The overall objectives and outcomes are to reduce vacancies, increase occupancy, foot traffic and vibrancy.

Increase fitness, spas, exercise without a CUP from 1,800 to 3,000 square feet to match the industry average!The subjective, uncertain, and expensive waiver process is likely to deter many potential applicants from attempting the waiver or to give up before obtaining a decision. This has a chilling effect on the marketplace and contributes to a negative reputation for the City. This is particularly true for local, small, and sole proprietor uses that do not have the depth of resources and expertise to "fight City Hall."
Allow other viable active uses without a CUP:
Examples: pet grooming, beauty shops, nail salons, barbershops, small learning centers, day care
Medical office with retail component, lifestyle, health services Several strategies could be employed to allow more retail-supportive uses on the ground floor, such as personal service uses and small professional offices that bring employees and generate customers and foot traffic in the area to the benefit of overall activity and vitality. This objective could include a modification to the definition of “retail and/or retail-like” to allow a broader range of uses. The list of permitted uses in the relevant zone and combining district use tables can be amended.

If necessary, require a CUP for certain uses in excess of a maximum size (Palo Alto for offices, commercial recreation; CN district uses) Such restrictions appear to favor the national franchises and "formula retail" that Palo Alto has determined are problematic and should be restricted but are among the few that can afford to navigate the code and approval process. It is important to recognize that Palo Alto, while a strong and desirable market, is very much part of the larger competitive market.

Existing and prospective businesses have the ability and choice to locate in other cities where the regulatory environment is easier and more welcoming and supportive of their large and risky investments. Many suitable and desirable retail and other uses, even if allowed, may avoid locating in Palo Alto based on the knowledge of the code, complex process, and high costs and frustration that inevitably are experienced over the life of use.

RECOMMENDATION 4.1
Amend the zoning code with one or more of the above methods to allow more retail-supportive uses on ground floor. The selected methods should be part of a coordinated package of amendments.

There are many methods and mechanisms to manage such uses, if necessary, to ensure a balance of compatible and complementary uses and to preserve and encourage active street frontages. The following are examples of potential zoning strategies to permit non-retail or retail-like uses:

5. Repeal the Office Conversion and
Construction Limitations.

Amend the definition of “retail-like” to include the following performance- based uses: “commercial uses that are accessible to the general public, generate walk-in pedestrian clientele, and contribute to a high level of pedestrian activity.”
RECOMMENDATION 3.2
Consideration should be given to whether the RPO is beneficial or should be modified or repealed. As an initial step, we recommend that the RPO be limited to the essential core retail areas of businesses fronting on Downtown’s University Avenue and California Avenue. Removal from the There are two provisions of the code that limit office construction:

18.40.210 Annual Office Limit and 18.18.060 Development Standards for City of Palo Alto 20
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the Downtown Commercial (CD) District. These are notable in their own right, but also as they interact with the RPO.
facing façade to ensure a percentage for retail and retail-like uses. Ground- floor office uses that do not front on University or California Avenues, i.e., behind retail frontages, should be allowed. There should be no limit to upper-level office uses. Any limitation should be proportionate to the size of the site or building to ensure an equitable impact. Section 18.40.210 Annual Office Limit should be revised to replace the unconstitutional taking of all economic value standard of (e) Economic Hardship Waiver or Adjustment, with a practical difficulty standard like that recommended for the RPO, R and GF combining districts.
otherwise. The need to obtain a CUP is already a high standard and barrier, but the required findings are again subjective, numerous, and must all be met. Such standards make it easy to deny and prevent any use or applicant for nearly any reason or perceived objection by staff or City Council (Section

18.76.015):

Section 18.40.210 limits the conversion of existing non-office uses to office uses to 50,000 square feet per year. The annual limit serves as another constraint to the loss or conversion of retail space and appears to lessen any need for the RPO. Office workers represent a major portion of the retail customers, sales, and market base. The dramatic loss of office uses, and reduced occupancy and days workers spend in the office since COVID-19 has had a proportionately significant reduction on retail demand in Palo Alto.

While there has been some recovery, the long-term trend and reduced office occupancy is expected to persist for the foreseeable future. Office vacancy rates in Palo Alto have increased dramatically since COVID-19 to over 556,000 square feet, an average of 17 percent of all office space in Palo Alto. The total vacancy is project to increase over the next five years according to CoStar.
"A conditional use permit shall not be granted in an R-Combining district for a formula retail business, or a beauty shop, nail salon, barbershop, or financial services use, unless it is found, in addition to the findings required by section 18.76.010, that:
"(1) The retail or personal service business will offer merchandise and/or services that meet the underserved needs of the City's residents and visitors.6. Relax the Formula Retail Restrictions. "(2) The type of retail or personal service business will enhance the balance and diversity of businesses in the district and in the City as a whole.

The rationale for limiting “formula retail” on the basis of the franchise and standardized merchandise and branding on California Avenue is not clear and should be stated explicitly. The assumptions and perceived threats of ten or more of the same uses, standardized merchandise, décor, color scheme, uniforms, façade, and trademark use has been evaluated for current relevance and necessity. Research of and interviews with peer cities and business and property owners indicated only limited concern over such uses and a desire to limit and relax the formula retail restrictions. It was noted that formula retail or franchise businesses often represent and bring new innovations and trends and foot traffic that benefit other businesses in the vicinity.

The perceived threat of office outcompeting and converting ground-floor retail spaces to office uses, which was the basis of the regulation, is extremely low and effectively no longer exists. Conversion of vacant, formerly retail ground-floor spaces to personal service and office uses that generate customers for nearby retail is preferable to extensive and persistent vacancies that create a sense of failure and blight that remaining retail uses must combat. Occupancy of the vacant office spaces should be encouraged. Conversion of excess vacant retail spaces, particularly by uses that generate potential customers and pedestrian foot traffic, and those that do not front on University or California Avenues, should be allowed. "(3) The retail or personal service business will enhance the economic vitality of the district where the business is proposed to be located and of the City as a whole. In considering this finding, the director or city council may consider existing retail vacancy rates within the district and in the City as a whole. "(4) The retail or personal service business is consistent with the character of the district where the business is proposed to be located.

It is also noted that concerns over the impact of a standard and generic corporate franchise design can be regulated more directly and objectively through design standards rather than limiting or preventing use on the basis of the characteristics of formula retail. The regulation appears to prevent otherwise appropriate and desirable uses and occupancy of vacant spaces without a clear or superseding public benefit.
"(5) The design of the retail or personal service businessIt appears that Section 18.40.210 could be repealed as the conditions and circumstances and rationale for its existence no longer exist. will be compatible with the architectural and aesthetic character of the district where the business is proposed to be located." Section 18.18.060 limits the total amount of office to a total of 5,000 square feet per site in the CD-S and CD-N zones. The rationale, purpose, and public benefit of this limitation are not clear. It appears to establish an arbitrary limitation that may cause more harm than good. This provision is not proportionate to the size of the site or building—the larger the site, the greater the constraint and loss of development potential. Further, this provision appears to apply to all office spaces, both ground floor and upper floor. Upper-floor office space is supportive of ground-floor retail and other commercial uses. It is not clear why there should be a limit on an upper- floor commercial on any given site. Rather, such uses should be encouraged.

While always a best practice and feature of the best land use codes, an increasing number of cities have initiated the review and revision of their development codes in recent years to reduce and replace subjective standards with objective standards and certain and efficient approval processes. They recognize that such regulations allow and encourage desirable and necessary growth, as well as a continuous cycle of renewal and improvement, and are important to the overall health of the City.

RECOMMENDATION 6.1
Consideration should be given to modifying or eliminating this restriction.

Any restrictions should be demonstrated to be the minimum necessary to advance a legitimate public purpose. It is recommended that the threshold to qualify as a “formula retail” use be increased from 10 to 50 such businesses. It is also recommended to limit formula retail to restaurant uses. Another option the City may consider is to limit the number of formula retail establishments in certain areas. This method can ensure a balance between formula and non-formula uses.

RECOMMENDATION 6.2
The Palo Alto Zoning Ordinance and existing and future property owners, businesses, and uses would benefit from objective development standards and a streamlined approval process program.

RECOMMENDATION 5.1
The purposes, assumptions, and impacts of these provisions should be evaluated. If any limits are found to be necessary, they should be designed to minimize the restriction to the extent possible. They should only apply to ground-level office spaces, such as a maximum percentage of the street- Similar to the waiver provisions for the RPO, the code assumes that formula retail and certain other personal service uses are detrimental unless proven City of Palo Alto 21
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RECOMMENDATION 7.2
Reduce Minimum Requirements
and California Avenues as well as portions of El Camino Real. This requires Palo Alto to change its approach to parking in these areas. It will require a change from a regulatory approach to provide adequate parking to the active management and optimization of existing public and private parking spaces to meet the existing and projected long-term growth and parking needs in the affected areas. The areas not directly affected by AB 2097 and still subject to minimum parking requirements should still be evaluated for the parking relief and modifications described in this section.

7. Ease the Parking Regulations.

A parking use survey and approach should be evaluated to reset standards to appropriate levels. For example, the minimum of 16 to 30 spaces per 1,000 square feet of gross floor area for eating and drinking services is punitively high. It may be used to effectively prohibit fast-food franchises and drive-through facilities. These standards are based on the outmoded concept that restaurants are destination uses that operate and need to be parked independently of all other uses with no sharing of trips or parking.

This is inconsistent with the actual and preferred operation of most urban commercial districts and most certainly exceeds actual parking demand.

While not a major focus of this analysis, as a major development cost, design, and spatial constraint, excess parking supply and excessive minimum parking standards are among the most common deterrents to a healthy and vibrant commercial district. Many municipalities continue to rely on outdated parking standards that, more often than not, were based on reference to other adopted standards as opposed to actual demand and occupancy studies. Most standards are also based on low-density suburban land use patterns, not the more dynamic urban patterns like those in Palo Alto. The following are a few high-level observations and recommendations related to zoning code. See Appendix C for more comprehensive analysis and recommendations.

RECOMMENDATION 7.3
Allow Change of Use
If adequate parking is available in the vicinity of the use, allowing a change of use for existing spaces without a requirement to provide additional parking could be considered. Existing buildings and outdoor spaces could be exempted from providing parking for a change of use.

There are three typical approaches to improving downtown and main street parking standards:
i. Reduce outdated minimum requirements to require fewer spaces than the cumulative demand for the district.RECOMMENDATION 7.1 Promote Public Shared Parking Over Off-Street/On-Site Parking. RECOMMENDATION 7.4 Incentivize Priority Usesii. Eliminate minimum parking standards and let business and property owners provide the parking deemed necessary to support the uses.Private, off-street/on-site parking is the most inefficient type of parking. It generally is not appropriate for dense, pedestrian-oriented commercial and mixed-use districts where the majority of properties are developed with buildings and have little or no room for efficient parking. On-site parking is least likely to be shared. Shared public parking is most appropriate for such districts. It allows maximum access, utilization, and effective management to respond to changing conditions.

Reducing requirements for desired or priority uses like restaurants could be taken into consideration. Incentives could also be provided, such as increased credits and/or reductions in minimum requirements for shared parking.
iii. Establish maximum parking standards to limit and prevent oversupply and inefficient use of land at the expense of buildings and uses.

Recently adopted AB 2097 effectively codified these best practices by eliminating minimum parking requirements within one-half mile of High- Quality Transit Stop. As discussed in greater detail in Appendix C of this report, this exemption applies to the core commercial areas on University City of Palo Alto 22
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a. Retail zones and corridors are not 100 percent retail but rely on a mix of complementary uses (office, restaurants, personal services, professional services, residential and retail use). These uses provide the clientele for retail uses and allow people to spend time in the commercial areas, in turn supporting retail. commercial recreation and other uses that create pedestrian activity.

6. Rescind "Formula Retail" Ordinance on California Avenue.

7. Increase height limits on El Camino Real and in other areas.Stakeholder Interview Summary

8. Restaurant owner could not reduce the square footage from 8,000 square feet to 5,000 square feet.

Stakeholder interviews were conducted with developers and the Chamber of Commerce to understand how the City can support the retail revitalization efforts in the study area. The stakeholders discussed issues and recommended changes related to the zoning ordinance, parking, and administrative processes. Below is the list of stakeholders that were interviewed.
b. Need to repair and reverse the City's reputation with the industry (e.g., business/property owners, agents, etc.).

Businesses need predictability, and currently, they don't have that.

City Permit Process

1. Businesses are avoiding locating to Palo Alto as the permitting process is lengthy and unpredictable.6. Many retailers in Palo Alto are amazing but often time people are not aware of events/businesses. 2. Difficult to get a permit even for simple changes such as restriping, signage, and small additions (e.g., 3-6 months to receive a sign permit – AT&T).
•
•
•
•
•
•
•
Premier Property Management – Jon Goldman, Brad Ehikia
Ellis Partners – Jim Ellis
Thoits Bros., Inc. – John Shenk
Chamber of Commerce – Charlie Weidanz
Performance Gaines – Chris Gaines
Italico – Franco Campilongo
a. Businesses need a large online presence to attract customers.

7. Street closure on California Ave has improved business (up 40 percent). However, several retailers left the area due to street closure.
a. Delay in signage permits can hurt the business even before it starts.

8. Important to understand customer behavior and how it has changed over the last four years (2019-2023).

3. The determinations of code and process are inconsistent and, at times, conflicting among the staff.Taste Buds Kitchen – Scott Andersen 9. Window shopping is down, everything is destination based. a. Need to provide incentives for customers to visit.

4. There is a lack of staff continuity or institutional knowledge.

Discussion Summary 5. Fees are excessive (e.g., conditional use permit $15,000; sign permit $4,000).10. The City has been very helpful since business operations have begun, partnering with the City is the most important thing that a local business can do.

These interviews revealed several issues that the stakeholders viewed as restrictions or hindrances to development and provided recommendations to mitigate them. There was a strong consensus on many issues among all of the stakeholders. These discussions are categorized and summarized below based on common themes.

6. All permits go through the City Council which takes away power and undermines staff recommendations/determinations.

11. Times of business activity more inconsistent now, people are not coming in for lunch anymore from nearby offices.

7. Permitting process is not clearly described.

8. There is a stigma against national chains (e.g., Pete’s Coffee), yet the zoning and process do not make it easy for smaller local businesses to locate in the City.

12. Disconnect between the businesses that exist and what businesses are desired (e.g., medical retail/office)General
Retail Preservation Ordinance 9. Difficult to navigate the process as a single business/property owner.

1. Important to create an ecosystem of uses that generate trips and keep people downtown. 1. Rescind ground floor Retail Protection Ordinance (2009, 2017 amendment). It has created the very problems that it was intended to prevent.

10. Sentiment that City staff are disconnected from or understand the community they are working in (e.g., live outside Palo Alto) a. Services will drive people downtown.
b. There are fewer workers downtown due to transition to remote work. 11. The process makes it difficult to do any business in/startup a business in Palo Alto.

2. Leave it to the market to thrive, don’t force retail. Focus on the c. There has been a loss of office space, which is hurting retail. existing retail district.

12. Long permitting processing times (e.g., up to 18 months to get through the planning process for an event space).2. Need to actively attract and support growth and investment, renewal and maintenance, and improvement of existing buildings.

3. Ground floor retail restrictions on side streets and blocks away from the main commercial corridor are not practical as retail will not locate in these areas. 13. Needed a conditional use permit for beer and wine license ($11,000).3. There are significant assets downtown, the loss of retail is not a physical design issue. 4. Code is too rigid, very narrowly defined, and complex. The older system worked better and allowed for more flexibility. 14. Signage permit took longer than demolition and construction permit for event venue business.4. There needs to be more flexibility in the reuse of ground floor space.

Allowed uses should be flexible to accommodate the changes in the market in order to reduce vacancies.

5. ‘’The definition of “retail” is too restrictive on use. Expand it to be more inclusive and nuanced to include uses like personal services, medical professional/office, spas, fitness, insurance, restaurants,5. Perception of retail in Palo Alto:

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Parking City Interviews:

Palo Alto and Neighboring Communities
exactly into the existing use categories, including new alcohol services and pickleball. The City eliminated the restrictions on the number of restaurants per block on Main Street and expanded opportunities for outdoor dining.1. In-lieu parking fee is a hard cap on any new development or intensification.

The City has traditionally been very restrictive in requiring retail uses on the ground floor; however, due to the changing market and feedback from the community, the City has been re-evaluating what mix of uses will work in its retail areas. This is also in response to an increased focus on housing and the City’s larger efforts in its Housing Element. The City noted that being open to a wider mix of uses is important in serving the needs of residents.

To gain a broader understanding of Palo Alto's regulatory provisions and procedures and to also inform the recommendations, three communities were interviewed to identify gaps and differences in approaches to retail development. The jurisdictions were identified during the Planning and Transportation Committee and stakeholder interviews as flexible and efficient with permit processing. These include the Cities of Santa Monica, Los Altos, and Redwood City.

2. Reinstate the California Avenue Parking Assessment District. a. The City should allow transfer between uses.
b. Can't change uses currently and can't add parking for change in uses. This is making it difficult to fill the vacancies in the changing market conditions.
c. The City requires additional parking to comply with parking requirements. Many/most buildings cover the entire site and have no space for on-site parking.

Streamlined Permitting
Santa Monica The City eliminated the need for conditional use permits, minor use permits, and other discretionary approvals for several uses including childcare, cinemas and theaters, general retail sales (medium size), hotels and motels, medical and dental offices, food halls, and general personal services, among others. The City removed the public hearing requirements for a change of use from a restaurant to a different use. This streamlined permitting expedites and simplifies the permitting process. This provides certainty and predictability to existing businesses and prospective businesses considering locating in Santa Monica. As of July 2023, there are 38 new development projects in downtown Santa Monica comprised mostly mixed-use and housing, including affordable housing.
d. Buildings already paid for the parking garages, which were to support the district. Since it was paid off in 2017 and no longer charges payment fees, the City has reverted back to requiring on-site parking to comply. Fees were based on deficiency of parking. But the developers are not getting credit when changing uses or adding space.

Making COVID-Related Changes Permanent
The City discussed an extensive list of emergency orders during the pandemic. These include both planning and building/safety emergency orders, including time extension on open permits of up to four years. In October 2022, the City permanently adopted two zoning ordinance amendments with the intent of reducing regulatory barriers for small businesses, as described below. The economic recovery ordinance was extended for five years in September of 2023. In summary, the following proposed zoning changes focus on the Third Street Promenade area. e. The City created a parking fee if they cannot provide parking = $150,000 per space. This is excessive and not affordable. f. The City moved staff parking from on-street to the garages.

Now customers have to park in the neighborhoods instead of the garages. 1. allowing greater flexibility for restaurants that provide entertainment within the Third Street Promenade Area District, Communication and Outreach with Business Owners

3. A new, more flexible parking policy is needed as most customers (office workers, shoppers) are already in the district.

The interviewees discussed the importance of educating the public through comprehensive, consistent communication and outreach efforts. They stressed the importance of City staff being a known, visible, and trusted figure in the community. The City of Santa Monica highlighted a number of outreach efforts including working with community groups, business improvement districts, City staff, and City council. Efforts included an “open for business flyer,” blog, e-mail blasts, broker’s round table event, and a 3- 1-1 system where anyone can e-mail or call with questions. The City offers online planning services, and virtual counter reviews, and hosts an online appointment system to increase the number of permitting activities that can be done online.

2. expanding Alcohol Exemption (AE) permits to additional uses to further streamline the review of alcohol permits while also correcting and refining existing AE permit conditions,4. Hard for employees to get permits for the parking garages in California Ave.

3. allowing the Director of Community Development or designee to consider commercial uses that are not clearly defined in the Zoning Code,
a. Make it easier for employees who need to park – especially 2+ hours but not all day.
b. Pricing does not make sense for employees to invest in permits. 4. allowing a longer term for Temporary Use Permits, and

5. No parking issues in California Ave, there is enough parking to support all businesses and events at a variety of times (for lunch or dinner, weekends, and during the farmer’s market).

5. allowing outdoor rooftop commercial uses on public parking structures owned by the City.

Relaxing Restrictions on Uses
The City has extensively documented and advertised these zoning and regulatory changes on its City website 1 and provides comprehensive data regarding vacancies and employment on the Downtown Santa Monica website2.

Changes in zoning included allowing a wider variety of uses by right in areas that were historically more restrictive, including in the downtown and Third Street Promenade areas. Efforts highlighted by City Staff included allowing new uses such as pop-ups and creative commercial uses that do not fit 1 City Council Makes Pandemic-Era Zoning Changes Permanent to Support Business Success in Santa Monica.
pandemic-era-zoning-changes-permanent-to-support-business-success-in- santa-monica
2 Downtown Santa Monica, Third Street Promenade.
https://downtownsm.com/downtown-data#section-8666
https://www.santamonica.gov/press/2022/10/12/city-council-makes- City of Palo Alto Appendix A, Page 2
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Interview Questions and Responses focusing on making it a food, art, and entertainment district/hub.
(~8 million visitors/year prior to COVID, now 4.5-5 million visitors/year)

1. Have you evaluated the impact of COVID and/or online shopping on retail in Santa Monica? o The City is seeing alcohol licenses being paired with innovative and creative uses. (e.g. Pickleball).
▪ Residential is integrated and embedded in all commercial districts.

6. Are there any restrictions on the usage of ground floor space in the commercial areas?▪ The City started to see the impact of e-commerce prior to COVID-

19. ▪ The City is focusing on food establishments and assisting applicants through the permitting process. ▪ The City has historically been very restrictive on the ground floor with a focus on retail and restaurant.▪ The City created a “Buy Local” campaign in 2010 and increased messaging during COVID-19 to educate the public on the
importance of supporting local businesses.
• Where and how to allow business to expand into the
right-of-way to not access and circulation issues. ▪ The City has been rethinking strategy to allow more uses in certain configurations while still promoting retail and restaurant – the office is still restricted.Through the campaign the City identified and informed people which retailers had gift cards and how businesses were
operating during the Holidays.
• Restaurant owners voiced the need for expanded
permanent outdoor space to sustain business.
o
▪
▪
The City is trying to be flexible as property owners figure out the right mix of uses – having the choice is positive for all parties.3. How did the City work with the business owners during the zoning changes?▪ During COVID the City supported businesses through a variety of strategies which included: The City has utilized interim ordinances as an experimentation to see how effective/successful an ordinance can be (up to five (5) years). The economic recovery ordinance was extended for five years in September of 2023.
▪ The City along with Downtown Santa Monica Inc. (Property Based Assessment District) asked property owners and businesses what kind of new uses they were interested in and what challenges they were facing with the permitting process, the City then identified opportunities on how the emergency orders and interim zoning can start to address the issues.
o
o
Established pick-up and delivery zones,
Connected business owners with the Los Angeles Small Business Development Center for education and technical support, 7. Have developers used the provisions of AB 2097 in developments for parking? How is the City ensuring there will be parking for visitors and residents in the wake of AB 2097?
o
o
Waived fees (e.g. loading and pick-up zones),
Encouraged shopping locally through informing customers which businesses support gift cards during Holiday shopping, ▪ Held collective meetings with Business Improvement District (BID) leaders (Main Street, Montana Ave, and Pico Boulevard) to talk through zoning changes.
▪
▪
▪
State law has changed the City’s parking practices since a majority of the City exists within ½ mile of a major transit stop.▪ The City can track online versus in-store sales reports through a sales tax report and can track by geographic area and by sector. Before state law the City eliminated minimum parking requirements for a majority of active uses Downtown in 2017.▪
▪
The City created an “Open for Business” flyer.o Art gallery pivoted to online, had high sales, and started artists' Implemented a 3-1-1 system for businesses to ask questions to City staff regarding zoning.
talks and other events/features they didn’t have before. The City has major parking investment in the form of ten (10) City- owned public parking structures in the Downtown District – “well- served to over-served.”
o The city has anecdotal data that shows an increase in sales activity but is hard to isolate. 4. What types of metrics does the City utilize to track changes in business? ▪ The City tracks occupancy rates and pedestrian counts in association with Downtown Santa Monica Inc. (see Downtown Santa Monica data below)

2. What, if any, efforts did you undertake to preserve retail as a response to COVID-19?
o Parking structures were funded through bond financing in the 70’s – all but one (1) are paid off.
▪ The City passed several emergency orders during the pandemic related to both planning and building and safety.
o Parking structures were funded by revenue generated by parking and transportation impact fees (in-leu fee for
businesses) – the City has since eliminated this impact fee. ▪ The City also monitors sales tax data and business license permits.

5. Does the City allow residential Downtown or in other commercial districts?
o The City provided time extensions on open permits – up to 4 years in some cases. o
o
Parking structures have active ground floor retail space which the Economic Development Department manages (3 tenants) – provide revenue to the City.
▪ Downtown is a true mixed-use district – residential is permitted everywhere but particularly seen from 2nd Street to 7th Street. o The City allowed more uses to be permitted by right in the Downtown and Third Street Promenade areas.
▪ Several current Downtown housing projects (thousands of units) are in development to create a “24/7 community.”
The city is working to bring in a rooftop cinema company to lease the top floor of one of the parking garages (made possible by the interim temporary use ordinances).
▪ Allowed flexibility for creative and temporary uses that don’t fit the prescribed use categories in the Downtown and Third Street Promenade. o Downtown previously saw affordable housing and now a trend to mixed-income housing.▪ Positive feedback from stakeholders resulted in the interim ▪ The City has no parking requirements for businesses going into existing footprints.ordinances becoming permanent – codified in August 2023. Change in demand in the Downtown to more local serving useso like restaurants – previously tourism drove development trends The City prefers that there is no more parking built in the Downtown, they would like the business to invest in other ways. o One block in the Third Street Promenade had high vacancy rates, so the City has loosened the use restrictions – they are o
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o In terms of new mixed-use housing development, the City is seeing both zero (0) parking and proposed projects with parking – Projects tend to be dependent on lender and financing strategy to make the project marketable.

2. What, if any, efforts did you undertake to preserve retail as a response to COVID-19?

5. Is change of use by right or do you require discretionary approval? ▪
▪
It is by right unless it’s a major tenant improvement (i.e. structural). ▪
▪
▪
Small non-residential footprint, emphasis was focused on restaurants.

Only in rare instances are CUPs used, it’s either allowed or prohibited.
o
o
The City has a cap on parking in the Downtown that can’t be exceeded.

Los Altos has an active Chamber of Commerce that supports and works with businesses.
▪ The City has an online submittal process and a change of use permit can be processed in a couple of days – everything is pretty streamlined.The City has worked with developers to look at shared parking, shared mobility programs, bike parking, EV charging, carshare, automated driving companies (Waymo), and the integrations of the bike infrastructure as an alternative to parking.

Los Altos Village Association (LAVA) worked with downtown businesses to facilitate resiliency during COVID. 6. Who is the approving authority for the following and typical permit time for each of these?3. Have you made any changes to the zoning code during post-Covid? Are these changes permanent? Can you describe how some of these changes have helped maintain and encourage retail?
▪
▪
▪
If something had to go to a hearing body it would go to the planning commission which could be a 4 - 5 month process, especially due to incomplete applications.

8. Do you have recommendations for jurisdictions looking to preserve/encourage retail uses? ▪ The City is undergoing rezoning downtown to allow all mixed-use and to allow additional height; driven in part by the Housing Element.
▪ Review the zoning ordinance, permitting procedures, and how those factors affect the cost of doing business. The City hasn’t had any new commercial development in 10+ years – Housing Element rezonings will allow for a lot of newer commercial square footage allowed in tandem with residential.▪ Determine how your jurisdiction can support businesses operating outdoors.
o Nothing in the rezoning that is explicit for commercial but it will provide opportunity for new and existing commercial. Signage has never been beyond an administrative design review – o The City reviewed and contacted several jurisdictions for best practices regarding parklets and expanded outdoor dining. o Much of the downtown is currently old commercial in old buildings. We haven’t had new development in many years, just renovations. We expect new mixed-use developments in near future.
no issues.

7. Have developers used the provisions of AB 2097 in developments for parking? How is the City ensuring there will be parking for visitors and residents in the wake of AB 2097?
o Where possible, make operating outdoors permanent.
▪
▪
Provide certainty to businesses so they know what they can and can’t do. ▪ The City made alcohol an ancillary use allowed by right and made it permanent post covid. A business just needs an ABC license from state.
▪ Does not apply to downtown but does apply to an extremely small area on El Camino Real – mostly redeveloped with entirely residential.

Due to the small size of Santa Monica, City staff has seen the importance of relationship building, being visible, known, and a trusted figure in the community so people know who to contact for questions or issues.

4. Were there any other zoning changes that were considered but not made and why?
▪ The City is going to be conducting a comprehensive downtown parking ratio update for residential and commercial uses through a parking study.Important for jurisdictions to work together regionally and throughout the State to become competitive as whole (i.e. align programs and fees) – don’t try and steal from business.
▪ Office/administration uses on Main Street and State Street are not allowed on the ground floor. 8. Do you have a municipal public parking/parking district or any exemptions for parking?o The City wants this area to be the retail and restaurant core, there are some existing non-conforming uses like banks. ▪ The City has public parking plazas in addition to small parking lots -Los Altos ▪ The City is exploring an option of requiring use like hair and nail salons to get a CUP.
6 acres of parking lot to the north and south of Main Street and State Street.Interview Questions and Responses
o There is a proliferation of these uses in downtown competing with one another.
▪ In the 1950s downtown property owners passed a measure that any existing commercial square footage does not have to park their business use.

1. Have you evaluated the impact of COVID and/or online shopping on retail in Los Altos?
o The City does not need as many as they currently have – in some instances there are two next to each other.
▪ Yes, because of the physical limitations in the early/middle portion of COVID. 9. Do you have any other improvement districts such as the Business Improvement District (BID), Community Facilities District (CFD), or Enhanced Infrastructure Financing District (EIFD)?
▪
▪
The City is looking to address vacancy in terms of empty display windows and pop-up shops through a zone text amendment. ▪ Main commercial area in Los Altos is similar to California Ave in Palo Alto.
▪ The City doesn’t have a BID but will be exploring the creation of a Property Business Improvement District in the upcoming year (assessed against property owners not businesses).

Vacancies downtown last for 6-9 months outside of three (3) properties where businesses have closed due to ADA lawsuits. o No major commercial retail or national retailers – mom-and- pop and small businesses
o Businesses open quite easily in Los Altos but the length of occupancy is varied.
o “Downtown Triangle” is restaurant heavy with passive
businesses.

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o
o
There are three (3) big property owners who want to see major infrastructure improvements to improve the public realm. the business owner- personal services and pet stores are active uses.
▪ Community development incentives for open space include an increase in height or FAR.

Looking to reorient parking to be parallel to recapture half depth of angle parking to expand the sidewalks – property owners would like to see the expansion of the public realm in front of their properties to create more usable space.
o There is a stretch in the Downtown where office is not allowed on the ground floor.

6. Does the City have any parking programs to help reduce parking requirements?

2. How does the City process change of use permits, by-right or discretionary approval?
▪ No formal programs. If a use is converted to retail, they don't need to provide extra parking based on new retail use.

10. Does the City have any programs or incentives to attract retail? ▪ Any changes to use in the downtown, including retail, can be done by-right. No approval is needed, only a building permit from the building division is required.
▪ The City is currently exploring reductions to minimum parking. ▪ Some businesses may actually need to close to allow new uses, they are holding usable space for redevelopment.

7. Does the City have a municipal public parking/parking district or any exemptions for parking?
▪ The City probably would have lost most of the restaurants if they hadn’t deployed the parklet program.

3. Please identify the approving authority and typical permit time for the following:
▪ The City has municipal garages and lots. Also, visitors can park in any other retail parking lot. Offices open up their garages to visitors on the weekends. All parking garages are fee based.11. Are there best practices or efficient permitting and flexibility that your City follows and that have helped you retain and attract retail uses? ▪
▪
▪
Depends on complexity. Generally approved by Planning Staff (2 to 4 months) and building division (4 to 6 weeks). ▪ New technology installed around downtown to inform where and how many spaces are available.▪ Downtown Vacancy matrix created by the Chamber of Commerce to identify where the vacancies are located, what is allowed in those spaces, and what is the footprint.

New construction (permitted uses). Planning staff: 3 to 4 month planning approvals; Building division: 4 to 6 weeks. 8. Does the City provide information for developers explaining permitting process/timing expectation?New construction (CUP uses). Planning Commission if they exceed height limit or CUP outside DT. Within the DT, CUP can be approved by staff. 3 to 4-month planning approvals, building division 4 to 6 weeks.
▪ The Chamber of Commerce works to connect property owners with interested businesses, there are a lot of older buildings and old- school property owners and old school in how they lease space. ▪ The City has meetings with the developers and has a submittal checklist for new construction. If it is an existing building, they go directly to the building division.

12. Any recommendations for jurisdictions looking to preserve/encourage retail uses?
▪
▪
▪
Major remodeling/tenant improvement. Planning Staff:

Depending on the complexity, it can be done over the counter.

9. Has the City seen any trends in retail as it relates to permit applications? ▪ Parklet Program – had a sunset date to either make permanent or Minor Changes. Planning Staff: Depending on the complexity, it can be done over the counter.
▪ None for retail. Lately, the interest has been in daycares, restaurants, and offices.revisit and revamp.
o The City didn’t want the temporary COVID program to be the New Signage/Signage Change. Over the counter generally. If existing space is part of the Master sign program (3 or more retail/commercial generally have a master sign program), if it is a part of a commercial strip, then they just need a permit from the Building division. If not, they need to apply with planning and then to the Building division (3 to 4 months).

10. Please add any other information related to best practices or efficient permitting and flexibility your City follows that has helped you retain/attract retail.
permanent one.
▪ The City identified what has been working and what hasn’t been working. ▪
▪
▪
There is a lack of retail in the downtown, there are several vacancies including World Market which has been vacant for four years.▪ ▪
The City also didn’t want mismatch parklets.

The permanent program goes into effect in January with a new set of standards.

There are more retail vacancies but the City is open to attracting other active uses in those spaces.4. Does the City track and report permit approval times for development projects (submittal to approval)?
o
o
The City conducted outreach with several business owners and restaurant groups to discuss issues and needs.

The downtown retail task force is helping with attracting, educating, and retaining retail uses.▪ The City has a tracking system to input dates, but they don't really track processing times.

Some were very receptive and some pushed back because of the cost to change parklets. o They try to follow the Permit Streamlining Act. Review within 30 days and 60 days for a decision.

Redwood City 5. Does the City have other programs or incentives to attract retail? Interview Questions and Responses ▪
▪
▪
FAR increase if the applicant provides housing/ mixed-use.

The retail task force helps to attract retail.1. Does the City have ground floor use restrictions? Retail outreach efforts are conducted via the economic
development office.▪ Ground floor active uses are encouraged, not required. Active use definition: Uses that allow the public to walk in and interact with City of Palo Alto Appendix A, Page 5
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ESRI Report Data
California Avenue
•
•
•
•
•
Total sales: $301,350,000
Total employees: 1,562
Total businesses: 235
Retail: 6.5% businesses; 6.4% employees
Accommodation and food services: 10.4% businesses; 11.9% employees Demographic Summary
Population
Households
Families
Median Age
2021 2026 (Projected)
146,566
57,798
33,552

37.5 141,015
55,632
32,242

37.5 Median Household Income $161,252 $176,564
Top Tapestry Segments
Top Tier (1A)
Urban Chic (2A)
Laptops and Lattes (3A)
Trendsetters (3C)
Percent

25.5%

24.2%

21.1%

8.1%
Enterprising Professionals (2D) 5.8%
See reports at the end of this Appendix for detailed profiles of Top Tier, Urban Chic, and Laptops and Lattes. Other profiles can be found at https://doc.arcgis.com/en/esri-demographics/latest/regional-data/tapestry-segmentation.htm.

Retail Leakage
•
•
•
More than 40%: Auto parts, motor vehicle dealers, auto accessories, drinking places, direct selling establishments, florists, vending machine operators 20% to 40%: Lawn and garden equipment, healthcare stores, gasoline stores, used merchandise 10% to 20%: Grocery stores, specialty food stores, and services Retail Surplus
•
•
•
More than 40%: Shoe stores, book, periodical, and music stores 20% to 40%: Furniture stores
10% to 20%: Department stores, home furnishings stores, electronics and appliance stores Downtown/University Avenue
•
•
•
•
•
Total sales: $1,871,207,000
Total employees: 8,322
Total businesses: 1,063
Retail: 7.5% businesses; 4.6% employees
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PALO ALTO RETAIL REVITALIZATION STUDY
Demographic Summary
Population
Households
Families
Median Age
2021 2026 (Projected)
21,195
9,441
5,015

43.7 20,938
9,370
4,950

43.0 Median Household Income $186,084 $200,001
Top Tapestry Segments
Laptops and Lattes (3A)
Top Tier (1A)
Urban Chic (2A)
Social Security Set (9F)
Dorms to Diplomas (14C)
Percent

46.4%

34.6%

10.8%

8.2%

0.1%
See reports at the end of this Appendix for detailed profiles of Top Tier, Urban Chic, and Laptops and Lattes. Other profiles can be found at https://doc.arcgis.com/en/esri-demographics/latest/regional-data/tapestry-segmentation.htm.

Retail Leakage
• More than 40%: Auto parts, motor vehicle dealers, auto accessories, building material, lawn & garden equipment, other general merchandise stores, florists, vending machine operators, direct selling establishments, special food services, drinking places
• 20% to 40%: Used merchandise stores, office supplies, stationery, and gift stores, gasoline stations, health and personal care stores, specialty food stores, grocery stores Retail Surplus
•
•
More than 40%: Furniture stores, shoe stores, books, periodicals, and music stores 10% to 20%: Department stores, jewelry, luggage, and leather goods stores Midtown Shopping
•
•
•
Total sales: $101,684,000
Total employees: 451
Total businesses: 116
Demographic Summary
Population
Households
2021 2026 (Projected)
30,639
11,401
30,295
11,318
7,917Families 8,006
Median Age 44.0 44.0
Median Household Income $200,001 $200,001
Top Tapestry Segments
Urban Chic (2A)
Top Tier (1A)
Laptops and Lattes (3A)
Enterprising Professionals (2D)
Trendsetters (3C)
Percent

45.8%

38.9%

8.8%

5.5%

1.0%
See reports at the end of this Appendix for detailed profiles of Top Tier, Urban Chic, and Laptops and Lattes. Other profiles can be found at https://doc.arcgis.com/en/esri-demographics/latest/regional-data/tapestry-segmentation.htm.

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PALO ALTO RETAIL REVITALIZATION STUDY
CoStar Retail and Office Summary (February 2024)
Retail
Table 1: Retail Overview - Palo Alto, Los Altos, and Santa Monica (2024 Q1) Palo Alto
El Camino Real –
Town & County
(CC)
Palo Alto
El Camino Real
– California Ave
(CN, CS)
Palo Alto Palo Alto
California Ave
(CC2/R)
295,000
0 Palo Alto
El Camino
Real – South
463,000
0 Palo Alto
Midtown
(CN/GF)
104,000
0 Total/Average
Palo Alto
1,831,300
0 Downtown
(CD-C/GF)
740,000
0 112,000
-51,300
Los Altos
CRS Zone
433,000
0 11,074
-282
Santa Monica
Main Street
461,000
0 Santa Monica
3rd Street
1,300,000
50,000
Retail
INVENTORY SF 175,000
0 21,400
54,300
Under Construction Square Feet
Vacant Square Feet
12 Month Net Absorption Square Feet
12 Month Net Absorption Square Feet
(one year change)
0 178,600
-44,851
28,200
12,200
5,000
-4,500
8,100
-832
3,900
434
47,700
-12,800
340,000
-32,800-853
-1543%

9.8%
-381%

15.1%

6.90%
504%

9.6%
-158%

12.2%

0.50%
-9277%

9.1%
-110%

1.8%
164%

3.8%
27%

2.6%

0.10%
-35%

10.3%

2.80%
33%

VACANCY RATE
Vacancy Rate
(one year change)

25.9%

2.50%1.9% -4.10% 8.20% 0.20% -0.40%
Market Asking Rent/ Square Feet
Market Asking Rent/ Square Feet (one year change)
Market Sale Price/ Square Feet
Market Sale Price/ Square Feet
(one year change)
$61.07
-0.52%
$828
$77.11
-0.50%
$1,129
$54.47
-0.70%
$788
$76.70
-0.40%
$593
$48.81
-0.30%
$913
$53.65
-0.70%
$797
$55.67
-0.50%
$748
$49.05
-0.40%
$767
$67.56

1.30%
$916
$79.85
-1.80%
$909
-0.83% -2.00% -0.80% 0.20% -1.60% -1.20% 0.40% -0.70% 2.10% -0.80% Market Cap Rate
Market Cap Rate (one year change)

4.45%

0.85%

4.20%

0.10%

4.50%

5.00%

0.20%

4.20%

0.10%

4.50%

0.10%

4.30%

0.10%

4.60%

0.10%

4.60%

0.10%

4.90%

0.10%
City of Palo Alto Appendix B, Page 3
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
54 Packet Pg. 312 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Table 2: Retail Vacancy Rate - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) Palo Alto Palo Alto
El Camino Real –
California Ave
(CN, CS)
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real –
South
Palo Alto
Midtown
(CN/GF)
El Camino Real –
Town & County
(CC)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rdPERIOD Street

9.1%

9.1%
0%9%
13%
15%
13%
14%
15%
13%
15%
13%
12%
12%
11%
11%
9%
9%
6%
6%
6%
6%
3%
3%
1%
2%
6%
1%
7%
6%
0%
2%
1%
3%
4%
0%
2%
2%
2%
2%
0%
0%

0.00%

1.6%
2%
2%
2%
0%
0%
0%
0%
4%
4%
4%
4%
17%
19%
0%
1%
0%
0%
0%
0%
0%
0%
0%
0%
2%
2%
0%
0%
0%
0%
0%
0%
0%
6%
5%
4%
4%
4%
4%
5%
4%
5%
3%
3%
3%
4%
4%
4%
6%
2%
3%
1%
3%
1%
1%
1%
2%
1%
0%
3%
1%
5%
5%
6%
2%
4%
4%
5%
5%
6%
5%
4%
4%
3%
2%
3%
2%
2%
1%
1%
1%
1%
0%
1%
1%
9%
8%
10%
9%
7%
8%
7%
4%
4%
3%
3%
4%
5%
3%
4%
5%
5%
4%
4%
5%
6%
6%
4%
0%
0%
16%1% 0% 4%
City of Palo Alto Appendix B, Page 4
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
55 Packet Pg. 313 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Figure 1: Retail Vacancy Rate - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) 30%
25%
20%
15%
10%
5%
0%
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rd Street
City of Palo Alto Appendix B, Page 5
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
56 Packet Pg. 314 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Table 3: Retail Vacancy Square Footage - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) Palo Alto
El Camino Real –
Town & County
(CC)
Palo Alto
El Camino Real –
California Ave
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
Midtown
(CN/GF)
Total Square Feet
Palo Alto
Palo Alto
El Camino Real – South
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd StreetPERIOD
(CN, CS)
TOTAL SF 1,831,300
178,597
173,194
155,957
168,361
143,381
127,229
146,933
152,945
168,125
160,156
140,829
149,691
133,446
114,225
98,700
77,103
71,609
68,273
64,283
61,946
56,015
53,397
34,381
31,228
36,373
51,354
32,545
57,323
74,259
25,103
34,582
17,374
37,919
24,547
12,725
27,143
34,214
18,344
20,198
29,786
36,931
740,000
111,905
105,375
100,547
101,016
67,478
56,165
73,475
69,354
86,236
73,735
58,301
82,789
69,048
44,786
39,340
32,350
29,528
32,146
32,578
35,423
26,552
35,982
19,785
20,830
22,483
29,687
26,296
33,513
43,793
15,915
20,515
10,500
23,261
4,350
295,000
28,235
27,999
26,293
38,228
43,128
38,353
41,897
43,158
39,326
44,743
39,325
34,225
33,721
29,321
29,573
25,526
23,666
17,349
17,349
17,149
17,149
9,250
9,465
3,017
6,317
17,651
2,797
18,832
18,332
-
5,191
2,986
175,000
21,425
21,425
20,493
20,493
23,606
17,732
17,830
19,652
21,032
22,812
24,337
21,761
21,761
24,340
19,554
12,541
10,967
5,226
-
54,300
4,960
4,960
463,000
8,132
8,132
3,321
3,321
4,241
10,164
8,916
15,316
16,066
15,866
15,866
7,916
7,916
12,716
7,321
3,774
4,536
3,300
3,300
5,100
5,640
2,830
3,220
3,670
3,236
3,236
1,300
3,688
3,538
4,962
2,738
1,788
4,871
7,171
3,588
9,488
7,513
3,512
6,992
6,492
10,813
104,000
3,940
5,303
5,303
5,303
4,928
3,940
3,940
4,590
4,590
3,000
3,000
3,000
1,000
1,000
850
850
850
850
850
850
1,600
-
433,000
11,074
13,710
9,107
9,753
10,178
11,274
6,696
13,825
10,651
10,248
15,648
11,339
6,789
13,349
15,605
12,040
14,077
9,964
5,667
2,913
1,383
-
461,000
47,714
48,409
48,227
36,496
52,416
21,180
26,681
34,620
26,314
24,212
38,160
49,132
41,828
50,688
49,298
31,726
25,024
22,153
26,343
11,286
19,971
20,559
24,870
23,992
27,425
23,648
16,706
17,421
15,621
11,311
13,268
9,427
1,300,000
339,654
326,979
337,217
312,798
305,582
307,835
293,504
310,164
291,790
261,303
298,801
283,694
158,202
158,302
161,951
143,160
157,851
122,571
126,847
109,811
127,702
114,843
94,342
111,338
92,497
54,170
47,270
46,153
37,648
55,410
60,582
42,179
51,035
65,780
67,286
54,211
59,104
72,902
80,946
83,840
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
-
-
-
875
875
875
875
-
-
-
-
2,062
2,062
2,062
2,062
9,402
10,206
3,424
4,324
5,335
1,911
3,711
4,337
780
-
750
-
-
-
-
-
-
-
-
-
-
-
3,100
-
250
1,800
7,344
8,344
11,280
9,944
4,290
10,500
9,990
10,172
9,515
11,428
10,092
1,000
2,500
3,200
5,124
2,152
-
-
1,290
1,845
915
3,999
-
6,751
2,436
1,264
2,100
2,429
2,429
2,429
329
-
875
875
-
-
-
-
-
-
7,358
10,597
1,358
6,158
6,158
4,800
4,800
310
2,200
-
-
-
9,142
6,166
3,150
3,322
5,350
8,084
17,459
5,226
3,600
3,084
3,084
3,084
3,084
3,084
3,084
- 5,172
1,722
1,722
-
-
-
-
-
4,260
6,175
18,144
19,900
10,402 - 10,432 57,548
City of Palo Alto Appendix B, Page 6
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
57 Packet Pg. 315 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Figure 2: Retail Vacancy Square Footage - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) 400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
-
Total Square Feet
Palo Alto
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rd Street
City of Palo Alto Appendix B, Page 7
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
58 Packet Pg. 316 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Table 4: Retail Market Asking Rent Per Square Foot - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) Palo Alto
El Camino Real –
Town & County
(CC)
Palo Alto
El Camino Real –
California Ave
(CN, CS)
54,300
$49
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real –
South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rdPERIOD Street
TOTAL SF 740,000
$77
$78
$76.8
$77.1
$77.7
$77
$77
$77
$76
$76
$76
$75
$74
$74
$74
$74
$73
$73
$72
$72
$71
$71
$70
$70
$69
$69
$68
$68
$67
$67
$66
$65
$65
$64
$63
$63
$62
$61
$61
$60
$60
295,000
$54
$55
$54.3
$54.5
$54.9
$55
$54
$54
$54
$54
$53
$53
$53
$52
$52
$52
$52
$52
$51
$51
$51
$50
$50
$50
$49
$49
$49
$48
$48
$47
$47
$46
$46
$45
$45
$44
$44
$44
$43
$43
$42
175,000
$77
463,000
$54
$54
$53.3
$53.6
$54.1
$54
$54
$53
$53
$53
$53
$52
$52
$51
$51
$51
$51
$50
$50
$50
$49
$49
$49
$48
$48
$47
$47
$47
$46
$46
$45
$45
$44
$44
$43
$43
$42
$42
$41
$41
$40
104,000
$56
$56
$55.2
$55.6
$56.0
$56
$56
$55
$55
$55
$54
$54
$53
$53
$53
$53
$52
$52
$52
$51
$51
$51
$50
$50
$49
$49
$49
$48
$48
$47
$47
$46
$46
$45
$44
$44
$43
$43
$42
$42
$41
433,000
$49
$49
$49.0
$49.2
$49.3
$49
$49
$49
$49
$48
$48
$48
$47
$47
$47
$47
$46
$46
$46
$46
$45
$45
$44
$44
$44
$43
$43
$43
$42
$42
$42
$41
$41
$40
$40
$39
$39
$39
$38
$38
$37
461,000
$68
$68
$67.3
$67.0
$66.8
$67
$66
$66
$65
$65
$64
$64
$64
$64
$64
$64
$64
$64
$64
$63
$63
$63
$62
$62
$62
$61
$61
$60
$60
$59
$59
$59
$58
$57
$57
$56
$55
$55
$54
$54
$53
1,300,000
$80
$81
$80.9
$81.2
$81.4
$82
$81
$81
$79
$79
$79
$78
$78
$78
$79
$79
$80
$80
$81
$81
$80
$80
$78
$78
$78
$77
$79
$80
$80
$80
$79
$75
$73
$72
$71
$70
$69
$68
$67
$66
$66
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
$77 $49
$75.7
$76.4
$77.1
$77
$77
$76
$75
$75
$74
$74
$73
$73
$73
$73
$72
$71
$71
$70
$69
$69
$68
$68
$67
$66
$65
$65
$65
$64
$63
$62
$61
$60
$59
$59
$49.0
$48.8
$49.1
$49
$49
$48
$48
$48
$48
$48
$47
$47
$46
$46
$46
$46
$46
$45
$45
$45
$45
$44
$44
$43
$43
$43
$43
$42
$42
$41
$41
$40
$40
$39
$58
$57
$57
$56
$39
$39
$38
$38
$55 $37
City of Palo Alto Appendix B, Page 8
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
59 Packet Pg. 317 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Figure 3: Retail Market Asking Rent Per Square Foot - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) $90
$85
$80
$75
$70
$65
$60
$55
$50
$45
$40
$35
$30
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rd Street
City of Palo Alto Appendix B, Page 9
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
60 Packet Pg. 318 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Table 5: Retail Vacancy by Months - Palo Alto, Los Altos, and Santa Monica (2014 - 2024 Q1) Palo Alto
El Camino Real – Town
Palo Alto
El Camino Real –
California Ave
(CN, CS)
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
Midtown
(CN/GF)
Palo Alto
El Camino Real – South
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica 3rdPERIOD & County
(CC)
175,000

40.6 39.2

32.1 27.8

24.8 23.4

19.1 16.3

15.9 12.8

13.3 12.2

9.2 Street
TOTAL FA 740,000

8.5 11.5

13.0 11.5
295,000 54,300

2.3 0.9
463,000

23.1 21.7

18.7 15.6

12.6 9.7

12.4 11.5

8.5 104,000 433,000 461,000 1,300,000
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1

15.1 22.3

2.2 11.1

20.8 6.4

15.1 0.5

2.4 6.8

12.6 4.8

10.9 4.0

23.1 3.8

12.1 10.0

16.5 10.5

2.1 29.2

5.1 5.8

29.6 6.8

15.5 6.3 10.9

7.9 4.8

5.7 5.7

4.9 13.6

17.4 6.0

14.6 7.6

14.2 11.4

2.6 10.2

10.4 5.7

6.1 1.8

7.4 4.4

16.9 31.0

7.48.3 13.3

10.3 17.4

14.4 11.4

8.4 7.4

4.4 18.8

3.8 0.9

13.3 4.26.3

5.2 4.1

2.0 4.4

1.8 3.2

1.7 17.2

14.2 11.2

8.2 5.2

2.2 17.4

3.9 8.2

5.06.0 17.8

3.8 9.4

5.015.1

7.0 4.0

4.1 3.5

5.1 2.5

3.0 4.0

8.0 2.7

6.0 2.0

8.8 10.1

4.3 2.9

4.7 1.1

3.4 8.1

6.5 3.6

3.1 1.0

0.4 6.2

16.4 5.2

5.3 6.4 5.5

4.1 9.5

5.5 3.6

2.1 10.2

7.2 3.2

6.7 6.7

3.7 6.9

3.9 0.9

3.3 0.2

15.5 2.9

19.2 8.9

9.4 10.2

7.2 4.2

4.1 8.6

6.4 6.1

7.4 4.3

1.8 7.6
5 2.5

5.5 16.5

2.3 13.8

6.3 4.2

2.4 12.0

6.5 1.6

15.4 6.7

4.8 6.5

0.3 16.1

5.5 10.0

0.5 4.4

3.8 7.0

6.9 11.5

6.9 7.0

4.6 5.3 6.2

3.2 7.0

9.3 5.0

5.0 34.6

4.9 5.6

1.6 2.7

3.9 2.9

6.1 3.3

0.317.1

3.5 6.0

18.1 9.0 1.4

4.5 4.0

5.8 10.1

4.3 17.0

3.9 8.5

2.1 5.1

3.8 5.1

1.4 1.8

4.5 9.3

9.8 5.0

6.0 0.9
City of Palo Alto Appendix B, Page 10
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
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PALO ALTO RETAIL REVITALIZATION STUDY
Figure 4: Retail Vacancy by Months - Palo Alto, Los Altos, and Santa Monica (2014 - 2024 Q1) 24 22
20 18
16 14
12 10
8 6
4 2
0 Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd Street
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Linear (Palo Alto
Downtown
(CD-C/GF))
Linear (Palo Alto
California Ave
(CC2/R))
Linear (Palo Alto
El Camino Real – South)
Linear (Palo Alto
Midtown
(CN/GF))
Linear (Los Altos
CRS Zone)
Linear (Santa Monica
Main Street)
Linear (Santa Monica
3rd Street)
Linear (Palo Alto
El Camino Real – Town & County
(CC))
Linear (Palo Alto
El Camino Real – California Ave
(CN, CS))
City of Palo Alto Appendix B, Page 11
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
62 Packet Pg. 320 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Office
Table 6: Office Overview - Palo Alto, Los Altos, and Santa Monica (2024 Q1) Palo Alto Palo AltoPalo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real
– South
Palo Alto
Midtown
(CN/GF)
Santa
Monica
Main Street
Total/Average El Camino Real – El Camino Real –
Town & County
(CC)
Los Altos
CRS Zone
Santa Monica
3rd StreetOffice Palo Alto California Ave
(CN, CS)

INVENTORY SF
Under Construction Square Feet
Vacant Square Feet
12 Month Net Absorption Square Feet
12 Month Net Absorption Square Feet
(one year change)
3,316,000
-
556,100
(59,913)
2,100,000
0 339,000
-77,600
712,000
0 166,000
-6,500
49,800
0 5,800
-1,100
192,000
0 15,500
8,800
219,000
0 20,900
16,400
43,200
0 8,900
87 188,000
0 24,300
-4700
247,000
0 77,400
-26,800
1,300,000
0 364,000
-122,000
42%
17%
-1%

8.8%

16.0%

3.7%

89.5%

23.4%

1.0%

69.2%

11.6%

2.3%

26.4%

8.1%
-46.5%

9.6%
102.7%

20.7%
-0.2%
-126.2%

12.9%

2.5%
-164.0%

31.4%

11.0%
-89.8%

28.3%

9.5%

VACANCY RATE
Vacancy Rate
(one year change) -4.6% -5.6%
Market Asking Rent/ Square Feet
Market Asking Rent/ Square Feet (one year change)
Market Sale Price/ Square Feet
Market Sale Price/ Square Feet
(one year change)
$76.22
-1%
$928
$93.77
-0.8%
$1,077
$72.23
-1.6%
$894
$87.63
-1.0%
$1,149
$72.45
-1.6%
$969
$66.11
-1.3%
$749
$65.13
-1.8%
$727
$71.82
-0.5%
$679
$59.36

0.6%
$840
$66.34

0.4%
$734
-7% -6.4% -7.4% -8.3% -7.9% -7.1% -7.8% -7.0% -5.6% -7.2% Market Cap Rate
Market Cap Rate (one year change)

5.9%
0%

5.9%

0.4%

5.8%

0.4%

5.7%

0.4%

5.7%

0.4%

5.9%

0.4%

6.5%

0.4%

6.1%

0.4%

5.7%

0.3%

5.8%

0.3%
City of Palo Alto Appendix B, Page 12
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
63 Packet Pg. 321 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Table 7: Office Vacancy Rate - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) Palo Alto Palo Alto
El Camino Real –
California Ave
(CN, CS)
192,000

8.1%
Palo Alto California
AvePalo Alto Downtown
(CD-C/GF)
El Camino Real –
Town & County
(CC)
Palo Alto
El Camino Real – South
Palo Alto Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
3rd StreetPeriod Santa Monica Main Street
(CC2/R)

16.0%

17.6%

16.8%

16.2%

14.0%

10.8%

9.6%

8.6%

7.8%

8.7%

9.4%

11.7%

10.7%

11.6%

9.3%

5.1%

4.8%

3.5%

2.9%

2.1%

1.9%

2.0%

2.3%

2.1%

3.2%

4.4%

3.4%

3.0%

5.1%

3.9%

3.6%

3.2%

2.1%

1.6%

3.0%

3.4%

3.2%

3.0%

2.7%
712,000

23.4%

17.6%

18.2%

23.4%

25.1%

20.0%

26.4%

15.5%

16.3%

17.7%

14.8%

10.0%

9.6%
49,800

11.6%

7.2%

0.0%

3.8%

5.6%

7.8%

5.9%
219,000

9.6%
43,200

20.7%

20.0%

19.8%

22.0%

19.9%

19.1%

19.6%

7.7%
188,000

12.9%

13.4%

13.7%

13.0%

10.2%

10.6%

17.5%

17.9%

19.5%

20.4%

24.3%

13.3%

14.2%

13.7%

14.1%

14.6%

11.8%

13.3%

2.7%

2.0%

1.5%

0.9%

1.0%

2.7%

3.4%

4.2%

3.3%

5.1%

5.5%

2.7%

4.7%

5.9%
247,000

31.4%

30.1%

26.2%

23.0%

24.0%

17.2%

18.6%

19.9%

15.3%

14.4%

15.7%

22.5%

15.8%

16.7%

15.2%

5.2%

3.9%

5.1%

3.8%

0.6%

0.5%

2.2%

5.2%

3.2%

9.6%

11.1%

4.5%

6.4%

3.7%

6.3%

3.1%

3.4%

1.2%

1.7%

2.1%

2.6%

5.3%

2.7%

8.5%
1,300,000

28.7%

26.6%

21.9%

21.4%

19.2%

18.5%

21.1%

16.4%

13.0%

14.5%

12.6%

12.4%

10.8%

9.2%

9.7%

7.6%

4.7%

4.0%

6.3%

5.2%

4.5%

2.8%

2.9%

7.6%

5.7%

7.6%

7.2%

7.3%

8.4%

8.0%

8.1%

7.0%

6.1%

7.7%

10.3%

9.4%

7.8%

7.2%

7.1%

4.6%

6.0%

8.1%

14.9%

14.3%

13.9%

14.4%

16.0%

17.5%

29.5%

29.2%

29.9%

22.1%

18.9%

17.4%

9.2%

13.3%

16.5%

14.7%

6.7%

6.6%

6.9%

5.4%

4.8%

4.5%

10.4%

3.7%

4.1%

2.2%

5.3%

4.7%

16.9%

12.3%

15.3%

17.4%

16.2%

15.8%

17.7%

14.8%

13.9%

3.7%

8.8%

14.7%

26.6%

12.3%

7.7%

8.5%

5.2%

4.6% 4.6%

4.6%6.9%

4.0%

5.7%

8.3%

7.5%

3.5%

11.0%

9.6%

8.2%

5.9%

5.6%

4.5%

3.4%

1.5%

2.4%

3.0%

0.0%

2.0%

5.8%

4.7%

0.0%

0.9%

0.0%

3.2%

5.7%

3.7%

2.9%

6.9%

33.3%

3.2%

6.3%

8.3%

7.3%

7.6%

5.9%

9.8%

6.5%

7.0%

9.2%

5.0%

3.5%

13.1%

14.4%

0.0%

4.6%

3.6%

1.3%

2.9%

1.3%

4.3%

4.7%

2.1%

1.5%

5.3%

10.6%

6.3%

5.8%

3.5%

4.5%

4.0%

10.1%

16.8%

5.5%

0.0%

1.7%

6.5%

14.1%

0.0%

4.0%

12.9%

15.9%

9.6%

3.7%

4.5%

3.6%

1.3%

9.2%

7.5%0.0%
City of Palo Alto Appendix B, Page 13
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
64 Packet Pg. 322 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Figure 5: Office Vacancy Rate - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) 35%
30%
25%
20%
15%
10%
5%
0%
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd Street
City of Palo Alto Appendix B, Page 14
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
65 Packet Pg. 323 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Table 8: Office Vacancy Square Footage - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) Palo Alto
El Camino Real – Town &
Palo Alto
El Camino Real –
California Ave
(CN, CS)
192,000
15,473
8,914
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
Midtown
(CN/GF)
Palo Alto
El Camino Real – South
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd StreetPeriod County
(CC)
49,800
5,768
5,768
5,768
5,768
5,768
3,600
-

INVENTORY SF
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2,100,000
338,980
373,997
356,287
343,975
296,317
228,762
204,888
182,597
166,536
183,733
200,319
249,472
227,481
246,443
198,350
108,452
102,288
75,003
60,668
45,072
39,774
41,800
48,961
44,085
67,447
93,961
72,062
63,375
106,579
81,137
75,143
67,517
43,012
32,332
60,015
67,695
67,094
63,266
63,406
59,714
52,525
712,000
166,439
125,480
129,448
166,543
178,598
142,548
195,380
115,147
120,902
130,842
109,783
109,639
74,063
71,183
62,618
38,263
34,426
51,261
29,639
42,238
61,431
55,749
55,552
25,221
79,176
68,883
58,663
42,736
40,027
32,422
21,830
9,857
219,000
20,880
32,472
31,271
30,435
30,775
34,099
37,370
62,987
62,363
63,940
47,138
40,471
37,202
19,680
28,531
35,197
31,497
14,396
14,206
14,773
11,621
10,271
9,678
43,200
8,939
8,939
8,653
8,533
9,499
8,583
8,253
8,461
8,461
3,326
3,810
6,359
11,471
11,471
5,315
3,315
2,000
2,000
5,671
5,671
5,671
6,203
188,000
24,340
25,297
25,884
24,435
19,192
20,027
33,036
33,642
36,703
38,424
45,703
25,046
26,801
25,741
26,599
27,434
22,155
24,972
5,146
5,052
3,804
2,910
1,624
1,944
5,010
6,451
8,006
8,006
6,251
9,671
10,448
5,109
8,950
8,950
11,154
3,186
12,328
26,489
-
247,000
77,431
74,240
64,601
56,739
59,219
42,506
45,998
48,241
36,982
34,829
38,130
54,411
38,412
40,470
36,802
12,606
9,504
12,476
9,324
1,470
1,195
1,195
5,217
5,217
12,484
7,733
23,331
26,922
11,000
15,459
8,946
15,248
7,480
8,110
2,942
4,023
4,942
6,319
1,300,000
369,593
342,659
281,799
274,774
246,795
237,438
271,948
211,668
167,152
186,772
157,999
156,037
135,137
115,644
121,745
94,942
59,198
50,570
79,541
65,206
56,110
35,511
36,305
95,083
72,085
95,575
91,024
91,771
105,311
101,340
102,816
88,763
77,429
98,179
130,653
119,298
98,873
91,257
90,162
11,514
11,514
15,488
32,520
23,713
23,713
29,313
33,353
31,153
30,313
34,056
28,380
28,380
26,713
4,743
4,743
4,759
3,775
8,959
61,500
6,000
11,650
15,364
13,423
14,058
10,856
18,051
12,038
12,938
17,017
9,158
-
-
1,881
1,881
1,881
1,881
1,881
2,803
3,872
2,950
-
-
-
-
-
- -
-
-
-
-
-
-
-
-
-
-
-
1,006
1,006
1,006
1,006
2,878
2,337
2,337
-
22,255
7,977
8,834
4,729
11,262
10,110
7,730
2,870
6,170
2,870
9,217
9,951
4,516
3,224
8,560
27,325
33,604
20,112
-
15,710
19,032
34,390
70,579
41,829
36,802
22,370
23,692
28,587
464
464
464
464
-
6,199
8,019
7,166
19,238
36,015
11,684
7,773
2,000
-
-
-
-
-
-
-
- 12,848
6,471
20,364
1,595
2,859
-
-
117,272
95,6592,865
City of Palo Alto Appendix B, Page 15
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
66 Packet Pg. 324 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Figure 6: Office Vacancy Square Footage - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) 400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0 Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd Street
City of Palo Alto Appendix B, Page 16
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
67 Packet Pg. 325 of 435

PALO ALTO RETAIL REVITALIZATION STUDY
Table 9: Office Market Asking Rent per Square Foot - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) Palo Alto Palo Alto
El Camino Real –
California Ave
(CN, CS)
192,000
$72
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
Midtown
(CN/GF)
El Camino Real – Town
& County
(CC)
Palo Alto
El Camino Real – South
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd StreetPeriod

INVENTORY SF
2024 Q1
2023 Q4
2023 Q3
2023 Q2
2023 Q1
2022 Q4
2022 Q3
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
2020 Q3
2020 Q2
2020 Q1
2019 Q4
2019 Q3
2019 Q2
2019 Q1
2018 Q4
2018 Q3
2018 Q2
2018 Q1
2017 Q4
2017 Q3
2017 Q2
2017 Q1
2016 Q4
2016 Q3
2016 Q2
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2,100,000
$94
712,000
$72
$72
$72
$73
$73
$74
$76
$76
$76
$78
$78
$77
$77
$78
$80
$80
$82
$82
$82
$82
$82
$80
$80
$80
$79
$77
$75
$76
$77
$78
$78
$77
$79
$77
$76
$73
$70
$67
$64
$61
$60
49,800
$88
219,000
$66
$66
$66
$67
$67
$67
$68
$70
$69
$71
$71
$70
$70
$72
$75
$76
$78
$79
$78
$78
$79
$78
$79
$80
$79
$77
$76
$77
$77
$78
$77
$76
$78
$76
$75
$73
$69
$66
$63
$60
$61
43,200
$65
$65
$65
$66
$66
$67
$67
$68
$68
$69
$69
$68
$68
$68
$70
$71
$73
$73
$73
$73
$74
$72
$72
$73
$73
$70
$69
$70
$71
$73
$72
$72
$74
$71
$71
$68
$65
$62
$59
$56
$56
188,000
$72
$72
$72
$72
$72
$72
$73
$74
$74
$75
$75
$74
$75
$78
$78
$79
$79
$80
$79
$78
$78
$77
$76
$73
$72
$71
$71
$71
$70
$71
$71
$70
$69
$67
$66
$65
$62
$60
$57
$55
$53
247,000
$59
$59
$59
$59
$59
$59
$59
$59
$59
$58
$58
$58
$59
$59
$60
$62
$63
$63
$63
$62
$62
$61
$62
$61
$59
$59
$59
$59
$58
$57
$56
$56
$55
$54
$53
$51
$50
$49
$48
$47
$46
1,300,000
$66
$66
$66
$67
$66
$66
$66
$65
$65
$64
$63
$63
$64
$65
$66
$69
$71
$72
$71
$69
$68
$67
$67
$67
$66
$65
$64
$64
$63
$62
$62
$61
$60
$58
$58
$56
$55
$53
$52
$51
$51
$94
$94
$94
$94
$95
$96
$97
$97
$99
$99
$98
$98
$88
$88
$88
$88
$89
$90
$92
$92
$95
$94
$92
$93
$72
$72
$73
$73
$74
$76
$77
$78
$80
$80
$79
$79
$80
$82
$82
$84
$84
$84
$84
$84
$83
$83
$83
$82
$80
$79
$80
$80
$81
$80
$79
$81
$99 $96
$102
$103
$106
$105
$104
$104
$104
$103
$104
$104
$103
$100
$99
$100
$103
$105
$107
$105
$104
$105
$103
$106
$107
$107
$104
$102
$102
$101
$102
$100
$97
$101
$97
$97
$93
$88
$84
$80
$76
$76
$99
$100
$102
$101
$100
$105
$101
$99
$96
$92
$88
$85
$78
$77
$75
$71
$68
$66
$64
$63
$82
$81
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Figure 7: Office Market Asking Rent per Square Foot - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) $110
$105
$100
$95
$90
$85
$80
$75
$70
$65
$60
$55
$50
$45
$40
Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd Street
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Table 10: Office Vacancy by Months - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1) Palo Alto
El Camino Real –
Town & County
Palo Alto
El Camino Real –Palo Alto
Downtown
(CD-C/GF)
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real –
South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Santa Monica
3rd StreetPeriod California Ave
(CN, CS)
192,000

11.6 10.2

7.0 (CC)
49,800

15.3 13.9

10.9 7.9

9.5 712,000

11.0 4.4
219,000

5.5 43,200 188,000 247,000

4.3 1,300,000

4.7 10.7

10.1 3.9

32.0 3.2

7.6 9.8
25 6.2 6.2

2.8 2.3

1.4 9.2

1.9 4.4

12.4 1.0

5.1 2.6

21.6 10.6

16.9 5.6

9.1 15.9

15.0 14.4

12.8 13.6

19.0 7.6

3.9 4.6

2.2 24.2

17.7 14.7

9.7 6.7

7.4 5.0

5.04.4 1.9

10.9 17.7

16.8 15.8

12.8 12.3

12.2 11.3

10.4 7.6

6.0 8.8

19.0 18.9

6.1 8.7

3.5 5.4 15.0

13.8 17.4

3.5 3.3

9.5 7.4

3.6 3.7

11.9 6.1

5.0 2.7

4.2 4.8

6.6 6.3

5.6 3.7

7.6 4.5

3.9 5.8

2.0 0.5

8.5 5.3

4.6 15.2

7.1 2.7

4.2 5.7

3.5 10.4

10.5 16.5

11.2 5.3

21.3 18.2

15.2 12.2

9.3 2.1

16.9 11.1

14.3 8.1

7.3 12.4

19.8 9.5

10.36.2 7.2

4.1 6.1 20.1

11.5 3.7 12.0

1.85.5 4.6 2.3

12.2 6.7

5.1 8.5

6.2 4.8

6.4 4.6

4.3 3.1

8.4 4.6

3.7 2.5

7.7 3.6

5.6 10.1

2.7 0.2

3.7 1.4

3.4 0.8

3.6 0.9

18.8 15.8

1.3 9.8

6.8 4.1

2.6 7.9

5.3 5.0

2.2 8.3

17.9 7.5

4.4 6.8

4.4 2.9

2.5 1.2

2.8 4.7

3.4 12.2

8.8 13.7

10.1 6.1

7.1 2.9

5.2 2.6

5.8 4.5

2.4 5.3

3.7 5.6

5.4 11.8

4.1 5.7

5.7 4.6

5.6 4.0

3.2 4.2

4.5 1.3

7.4 3.3

6.8 3.5

3.9 6.7

4.1 7.1

4.3 9.6

6.4 5.2

7.4 9.1

3.3 4.4

1.9 3.9

4.7 3.7

9.4 9.8

2.4 7.0

6.4 31.1

2.2 5.4

3.4 4.2

3.8 0.8

12.7 9.8

6.8 3.8

4.5 4.1

1.1 4.0

3.7 4.8

5.3 6.9

3.9 0.9

1.8 0.8

41.9 11.7

6.0 6.1

4.0 6.7

10.9 3.0

2.6 1.8

11.0 2.9

4.4 3.6

2.5 3.3

2.9 2.3

6.1 4.5

1.6 22

10.6 7.4

6.2 2.8

3.4 4.6

1.6 4.0

2.2 4.8

5.03.0 9.2
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Figure 8: Office Vacancy by Months - Palo Alto, Los Altos, and Santa Monica (2014 Q1 - 2024 Q1 12 10
8 6
4 2
0 Palo Alto
Downtown
(CD-C/GF)
Palo Alto
El Camino Real – California Ave
(CN, CS)
Palo Alto
El Camino Real – South
Palo Alto
Midtown
(CN/GF)
Los Altos
CRS Zone
Santa Monica
Main Street
Palo Alto
California Ave
(CC2/R)
Palo Alto
El Camino Real – Town & County
(CC)
Linear (#REF!) Linear (Palo Alto
Downtown
(CD-C/GF))
Linear (Palo Alto
El Camino Real – California Ave
(CN, CS))
Linear (Palo Alto
El Camino Real – South)
Linear (Palo Alto
Midtown
(CN/GF))
Linear (Los Altos
CRS Zone)
Linear (Santa Monica
Main Street)
Linear (Palo Alto
California Ave
(CC2/R))
Linear (Palo Alto
El Camino Real – Town & County
(CC))
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development projects, including those with specific income thresholds or fewer than 20 dwelling units.

AB 2097 does not prohibit off-street parking from being built if that is desirable. Voluntary parking may be provided at a ratio less than what would otherwise have been required by the Zoning Ordinance.

Introduction
Purpose
AB 2097 Parking Relief AreasThe purpose of this study is to review the implications of the recently adopted Assembly Bill (AB) 2097 on the City of Palo Alto’s parking regulations and management strategies, the adequacy of the existing parking inventory and potential impacts on retail establishments.

The study areas subject to relief from enforcement of minimum parking standards provided by AB 2097 are shown in Figure 1 and described below.

Detailed maps for each area can be found in Attachment 3.

This parking review was conducted for the four major retail areas and corridors in Palo Alto: Downtown Palo Alto/University Avenue, California Avenue, Midtown, and the El Camino Real corridor. The study area boundaries are shown in Figure 1. Parking supply and occupancy data is based on limited city survey data from 2018 and 2019. The study areas included public on- and off-street parking. Downtown and California Avenue have the majority of the parking capacity, which resulted in their being the primary focus of the analyses and recommendations.

Downtown/University Avenue: The Downtown/University Avenue study area is within a half-mile of the Palo Alto Caltrain Station and the Palo Alto Transit Center and hence is subject to AB 2097. This High-Quality Transit Area nearly encompasses all but a half-block with 16 parcels of the Downtown/University Avenue commercially zoned (CD-C) study area.

California Avenue: The entire California Avenue study area is within a half- mile of the California Avenue Caltrain Station, a High-Quality Transit Stop, and hence is subject to AB 2097 provisions.

AB 2097 Summary Midtown: Midtown is not within a half-mile of a High-Quality Transit Stop and therefore is not impacted by AB 2097. Development in this area is subjected to the parking standards set forth in the City’s zoning code.

AB 2097 was signed by Governor Gavin Newsom in September 2022, and went into effect January 1, 2023. AB 2097 prohibits public agencies from imposing minimum automobile parking requirements on most types of development within a half-mile of a major transit stop. AB 2097 does not apply to projects that designate any portion of the project as a hotel, motel, bed and breakfast inn, or other transient lodging use, or reduce parking spaces designated for this purpose. AB 2097 does not reduce, eliminate, or preclude the enforcement of any requirement for parking spaces that are accessible to persons with disabilities or electric vehicle spaces and supply equipment for new multifamily residential or nonresidential development that is located within one-half mile of public transit. Additionally, AB 2097 does not affect event center parking requirements for employees and other workers as required by local ordinance.

El Camino Real Corridor: The northern portion of the El Camino Real corridor, north of Acacia Avenue which includes Town and Country and areas around California Avenue, is within a half-mile of the California Avenue Train Station, a High-Quality Transit Stop, and hence is subject to AB 2097 provisions. AB 2097 is not applicable to the rest of the corridor. There are over 200 commercial parcels where the City can continue to impose minimum parking requirements, between Acacia Avenue and Los Altos Avenue.

The bill authorizes jurisdictions to impose or enforce minimum automobile parking requirements on a housing development project if the public agency makes written findings, within 30 days of the receipt of a completed application, that not imposing or enforcing minimum automobile parking requirements on the development would have a substantially negative impact, supported by a preponderance of the evidence in the record, on the public agency’s ability to meet its share of specified housing needs or existing residential or commercial parking within 1/2 mile of the housing development. These findings cannot be made against certain housing City of Palo Alto Appendix C, Page 1
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Figure 1: AB 2097 Parking Relief & Study Areas
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Existing Conditions
Parking Supply
At the time of this study, there are approximately 6,677 total public parking spaces, which includes public parking lots, public parking garages and on- street spaces within the four retail districts in the study area. Of these, 2,125 (32%) are on-street spaces and 4,552 (68%) are off-street public parking spaces. Detailed maps and tables for each area can be found in Attachment

2. These are summarized in the following table.

Table 1: Study Area Public Parking Supply
Public Parking
Study Area On-street Parking* Off-street Parking Total per Study Area 4,255
Notes
76 percent of off-street parking is provided by structured parking.

Excludes 14 spaces as a result of permanent vehicular closure of a segment of Ramona Street, between Hamilton Avenue and University Avenue. Parking data received from Office of Transportation based on 2019 survey data. 62 percent of off-street parking is provided by structured parking.

Excludes 65 spaces as a result of permanent vehicular closure of California Avenue, between El Camino Real and Birch Street). Parking data received from Office of Transportation based on 2019 survey data.

Downtown/ University Avenue 1,035 3,220
California Avenue
Midtown
756
25 1,239
93 1,995
118 All off-street parking spaces are provided by parking lots. Parking data has been counted manually from Google Earth (February 2024).

One public parking lot was identified; however, it provides parking for the Stanford/Palo Alto Community Playing Fields and was not counted. It should be noted that the Palo Alto City Council is considering a resolution to remove parking on El Camino Real to install bike lanes as a part of the upcoming repaving project per Caltrans’ request. Parking data derived for the study area from April 1, 2024 El Camino Real 309 0 309
staff report (item 11) presented to City Council,
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14217.

Total per Parking Type 2,125 4,552 6,677
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Outreach
about parking supply, adequacy, regulatory approach, impacts and responses to AB 2097, and recommendations.
x
x
Costs of issuance or debt service associated with bonds, notes or other security instruments issued to fund transportation improvements identified.

Reimbursement for administrative costs incurred by the City in establishing or maintaining the transportation impact fee reserve account required by this Chapter, including, but not limited to, the cost of studies to establish the requisite nexus between the fee amount and the use of fee proceeds and yearly accounting and reports.1
This study included outreach to business owners and peer cities to obtain input on parking issues and regulatory approaches and recommendations to inform this study. Santa Monica, CA
The City of Santa Monica has developed a robust parking program that maintains the walkable character of the downtown while providing ample parking for those who need it. Prior to the adoption of AB 2097, the City eliminated minimum parking requirements for a majority of active uses in the downtown. The City also developed 10 public parking structures in the downtown district funded by in-lieu fees for businesses, which provide plenty of parking for the area. The following describes a few of Santa Monica’s parking demand management strategies.

Stakeholder Input Summary
Interviews were conducted with six business/property owners who operate their businesses in Palo Alto to identify any regulatory constraints they have experienced. The list of business and property owners that were interviewed can be found in Appendix A of this report. The following is a summary of the comments, issues, and concerns regarding parking. It should be noted that the City of Palo Alto also has a Citywide Transportation impact fee (Chapter 16.59 of Municipal Code). These funds are expended only on the installation, acquisition, and construction of eligible citywide transportation enhancement including but not limited to bicycle and pedestrian improvements, and roadway and intersection improvements. Citywide transportation enhancements do not include intersection improvements designed primarily to accommodate increased traffic generated by a specific development or the addition of through- traffic lanes designed for primary use by private motorized vehicles.

1. Excessive in-lieu parking fees.

2. Allow parking transfer between uses. Unbundling Parking: One parking strategy Santa Monica uses is unbundling parking. The municipal code requires that parking spaces be leased or sold separately from residential or commercial structures. This way, non-drivers are not required to pay for parking they do not need, and the parking spaces that exist will be used more efficiently. For commercial developments, requiring that parking be unbundled helps facilitate the State’s Parking Cash-Out Program.

3. Unable to add parking for a change in use.ꢀ ꢀ

4. City staff parking is occupying valuable off-street parking spaces.

Customers have to park on-street in the neighborhoods instead of the garages.

5. Need more flexible parking regulations when it is not feasible to provide required on-site parking.

Transportation Demand Management Plan Requirements for New Developments: The City of Santa Monica also requires Transportation Demand Management (TDM) plans for new developments with 16 or more residential units or at least 7,500 commercial square feet.2 Strategies to reduce vehicle travel may include both programmatic measures and site improvements.

6. There is ample parking in California Avenue.

7. On-street parking time limit is a hindrance for employees.

8. Hard for employees to get permits for the garages due to limited number of permits available.

Transportation Impact Fees: Santa Monica has a transportation impact fee program that requires developers to pay a fee based on the number of residential units or on the amount of square footage for nonresidential developments. Establishing this program required a nexus study9. Provide range of times for pricing to accommodate a mix of users. demonstrating the relationship between the expected transportation impacts of new developments and the fees required to address those impacts through transportation improvements and trip reduction strategies. Santa Monica utilizes the funds from transportation impact fees for projects that reduce vehicle traffic which also helps manage parking demand. Such expenditures may include, but are not necessarily limited to the following:

It should be noted that the comments 1, 2, 3 and 5 summarized in the list above are no longer applicable for AB 2097 implications areas. Also permit availability was an issue pre COVID-19 pandemic. Since then, the demand has decreased for parking permits.

Palo Alto also has TDM requirements per Section 18.52.050 (d) of Municipal Code that grants the Director of Planning and Development Services the authority to require including TDM strategies for any project requesting a reduction in parking or generating 50 or more net new weekday (AM or PM peak hour) or weekend peak hour trips.

Peer City Parking Management Best Practices
Los Altos, CAx Reimbursement for all direct and indirect costs incurred by the City to construct transportation improvements pursuant to this Chapter, including, but not limited to, the cost of land and right-of-way acquisition, planning, legal advice, engineering, design, construction, construction management, materials, and equipment.

The following are parking management best practice strategies identified from the following jurisdictions through staff interviews (Cities of Santa Monica and Los Altos) and research (City of Pasadena). City staff were asked The City of Los Altos has a three-block by three-block downtown with two parallel commercial corridors, referred to as the Downtown Triangle. This retail district includes mostly single-story retail and restaurants, which is comparable in scale and character to California Avenue in Palo Alto. The City 1 Santa Monica Municipal Code- Section 9.66.070, Accessed May 1, 2024, 2 Transportation Demand Management: a set of strategies aimed at improving transportation efficiency, reducing congestion, and promoting sustainable travel options.
https://ecode360.com/42752344#42752425
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owns six acres of parking in the form of parking plazas and smaller lots (10 total) located north and south of the two commercial streets, which along with on-street parking provide all of the parking for the existing uses. The following describes a few of Los Altos’ parking strategies.

Parking Maximums and Public Parking in Transit-Oriented Development Areas: Pasadena’s Municipal Code establishes maximum parking requirements for new development in its transit-oriented development areas. The strategy of limiting parking provision is meant to help the City achieve long-term sustainable mobility goals and reduce private vehicle ownership and use. The City allows an exception for commercial parking in excess of the maximum, provided that the parking is available for public use, that signs advertise the availability of public parking on the property, and that rates do not exceed the City garage rates by more than 150 percent. In this way, parking maximums can help incentivize the provision of publicly available parking 3.

Customer Parking Permits - "Yellow Book Passes": Los Altos offers downtown businesses the option to purchase a book of 25 all-day parking permits at a $25 fee, to be used in any of the 10 downtown parking plazas.

Parking is free downtown, but is subject to time limitations ranging between 20 minutes and 3 hours. The passes allow customers to exceed the time limits in the respective off-street parking lots. Permits are expected to be provided to customers free of charge and are not to be resold to customers.

Downtown Employee Parking Permit Program: This program provides all- day parking for downtown business owners and employees in designated spaces on an annual and quarterly basis at $100 and $40 fee respectively.

Pasadena, CA
The City of Pasadena has a thriving business district, Old Pasadena, which includes shopping and dining establishments. The following describes a few of Pasadena’s parking demand management strategies.

Park and Walk: Pasadena parking rates are more expensive for on-street parking than for its Park and Walk garages. The Park and Walk garages were intended to provide those more convenient on-street spaces for customers visiting specific businesses. The following lists the City’s parking rates. x
x
x
The on-street metered rate in Old Pasadena is $1.25 per hour and $0.75 per hour on the edges of Old Pasadena.

The Park and Walk garages are $1 for the first 2 hours; $2 per hour thereafter; $12 daily max.

Visitors can use the Passport Parking app, which allows a driver to pay for the metered parking, extend the parking sessions from anywhere, and get reminders for time limits.
3 Transit Oriented Development Amendment, Accessed May 1, 2024, https://www.cityofpasadena.net/Planning/Transit-Oriented-Development- Amendment/
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Findings Table 2 provides the parking supply and occupancy ratio for the study areas.

The following findings listed here are relative to 2024 data received from the City.
average of 50% leaving many buildings underutilized. The lack of office utilization has also led to a decrease in overall parking demand.” 41. Parking Availability
There is significant public parking availability in the study areas. The stakeholders that were interviewed expressed no concern regarding parking availability. Data received from City’s Office of Transportation (2023) show that the average sale of parking permits per month in Downtown was 1,989 out of 3,878 available permits (51 percent) and for California Avenue they sold 510 out of 1,075 available permits (47 percent). A parking occupancy study conducted in 2019 (pre-COVID-19) by the Palo Alto Office of Transportation indicated occupancy of 47 to 76 percent in the Downtown area for off street public parking spaces, with the highest occupancy around noon. The same study indicated on California Avenue area ranged between 35 to 88 percent with peak occupancy during noon. A majority of this occupancy can safely be assumed to be from office workers in the pre- COVID-19 era. Hybrid schedules and vacant office space has significantly reduced the parking demand post-COVID-19. While a parking demand study has not been done for the commercial areas in Palo Alto post-COVID-19 except for El Camino Real, the interview with the Office of Transportation indicated that there is ample availability of parking of more than 40 percent in parking garages in both Downtown and California Avenue area. x There is excess capacity in the Downtown even during the peak hour with 76% occupancy and a 3.7% vacancy rate in 2019. Hence, there is a growth potential of 9% in Downtown. Note that the vacancy rate in Downtown in 2024 is 16.5% compared to 3.7% in 2019.
x There may be the possibility of growth in both Downtown and California Avenue areas without building new parking since the potential lack of office utilization may have led to a decrease in overall parking demand. More up-to-date data is required to determine change in parking demand.x There was optimum parking capacity during the peak hour with 88% occupancy and 6.7% vacancy in 2019. Parking management
strategies can be applied to manage parking to keep it at an optimum level. Note that the vacancy rate in Downtown in 2024 is 11% compared to 6.7% in 2019.

2. Parking Assessment Districts
AB 2097 essentially invalidates the Downtown/University Avenue Parking Assessment District regulated by Section 18.52.070 of the Palo Alto Municipal Code. Since the commercial and residential uses in the affected area are no longer required to meet the minimum one parking space for each 250 gross square feet of floor area requirement provide parking, rendering the parking assessment district in the affected areas not enforceable or applicable. Downtown/University Avenue has a Parking x It should be noted that the data is from 2019 when hybrid work was not prevalent. The shift towards hybrid work and flexible workspaces due to the pandemic has led to a decrease in overall parking demand. As employees split their time between home and the office, fewer people are commuting daily, resulting in less pressure on parking spaces while occupying office space. "According to a survey by Leesman, 66% of employees expect to work from their organization’s workplace two days or less per week.

While many companies are still perfecting and evolving their working models, office occupancy hovers around a nationwide Assessment District regulated by Section 18.52.070 of the Palo Alto Municipal Code5, which states that,
“Any new development, any addition or enlargement of existing development, or any use of any floor area that has never been assessed under any Bond Plan G financing pursuant to Title 13, shall provide one parking space for each 250 gross square feet of floor Table 2: Parking Supply and Occupancy Ratios
Growth Potential at
85% 0ccupancy
(2019)
Floor Area
Vacancy Rate
2019*
Floor Area
Vacancy Rate
2024*
Total Public
Parking
(2024)
Public Parking
Supply Ratio
per 1,000 SF
(2019)
Public Parking
Occupancy Ratio
per 1,000 SF
(2019)
Total Floor Area-
(SF)*
Off-Street Public On-Street PublicArea Peak Hour Public Parking
Occupancy***
Parking Parking
Downtown/
Avenue**
University 2,900,000 3.7% 16.5% 3,220 1,035 4,255 76% 1.47 1.12 9% California Avenue
El Camino Real
Midtown
1,000,000
1,306,000
149,000

6.7%

2.2%

1.9%

11.0%

9.9%

8.6%
1,239
0 756
309
25 1,995
309
88%
47%

2.00 0.24

1.76 0.11
-3%
NA****
93 118
Notes: * Floor area and vacancy rates are for all property types based on CoStar classification and include office, retail, multi-family, hospitality, health care, specialty, industrial, sports, and entertainment. ** In 2019, 52 percent of total Downtown off street parking spaces were restricted to permit-only parking. Eight of the 19 parking facilities did not have any permit-only parking. The percentages of permit parking spaces in the remaining 11 facilities varied between 32 and 98 percent.
***Peak hour occupancy for both Downtown and California Avenue area was during noon based on 2019 data received from the City. Hence, the worst-case scenario is analyzed. Due to lack of data availability peak hour occupancy for off-site spaces was applied to on-street spaces for Downtown and California Avenue. Data for El Camino Real is from Staff Report #2403-2745 which refers to data collected on Saturday February 24, 2024, from 1pm-2pm. No occupancy data is available for Midtown area. **** Growth potential cannot be calculated confidently since off-street parking is unknown and on-street parking is a very small proportion of the total parking demand. 4 How Hybrid Work has Impacted Parking, January 23, 2024, Accessed April 24, 2024, https://www.vendpark.io/post/how-hybrid-work-has-impacted-parking 5 Palo Alto Municipal Code, Accessed February 7, 2024,
https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-81074.

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area, except as may be exempt from such requirement… In connection with any expansion of the supply of public parking spaces within the CD commercial downtown district, the city shall allocate a number of spaces for use as "in-lieu parking" spaces to allow development to occur on sites which would otherwise be precluded from development due to parking constraints imposed by this chapter. Off-site parking on such sites may be provided by payment of an in-lieu monetary contribution to the city to defray the cost of providing such parking.”
The RPPP areas in the Downtown study area are shown in Figure 2. RPPP requires all vehicles to have a permit to park on designated streets for more than two hours between 8 a.m. and 6 p.m., Monday through Friday. A permit is not needed to park for less than two hours. AB 2097 does not directly impact the existing RPPP areas because it specifically targets minimum parking requirements for new developments near transit stops.

Existing residential permit parking regulations can remain unaffected by AB 2097.

Installing conspicuous signage is essential. There are several signs indicating RPPP zone in Downtown. However, some signs are not visible due to the vegetation growth. Signs are also small, and some information is displayed in small fonts that can easily be missed (refer to Figure 3). Enhanced design and proper placement can make these signs more visible. It is also important to indicate the consequences on the signs. Additionally, educating both residents and visitors about the RPPP hours and consequences is crucial.

Effective communication ensures that visitors understand the rules and potential repercussions.

Figure 2: Downtown Permit Parking Areas
Based on stakeholder interviews, the participants were more concerned with parking regulations and fees than availability of existing parking needed to support business.

It should be noted that a pending SB 834 that was introduced during the 2023-2024 legislative session, if passed, will prohibit local authorities from issuing permits for preferential parking privileges to residents or vendors of developments within 1/2 mile of public transit and exempt developments from parking minimums. The bill would require the local authority to revise the boundaries of any such preferential parking district to exclude all preferential parking within 1/2 mile of public transitǤ 6

3. Curb Parking Space Management
It is expected that AB 2097 will reduce the creation of new off-street parking spaces. This reduction may create more competition for limited on-street parking spaces. Among other things, reducing the number of parking spaces increases competition for the curb space from residents that may want to use on-street parking spaces, employees and visitors looking to park, and rideshare drivers dropping off the passengers. In addition, curb space is used for bike parking, parklets, landscaped islands and so on.

Figure 3: Downtown Permit Parking Signage
While there may be parking spaces in garages and lots, there will always be competition for on-street spaces that are be more convenient. The City currently regulates the long-term use of curb space in Downtown and California Avenue areas by imposing a two-hour time limit. The City also has designated bike spaces allocated along University Avenue and California Avenue.

Curb space is also covered by parklets- outdoor dining area using parking spaces. These have become prevalent during COVID-19 pandemic and are well received by the patrons. These also create much needed vibrancy in the area. However, they reduce the number of spaces available for parking. 5. Retail Locations Outside of the AB 2097 Areas Retail locations outside the designated AB 2097 areas are not subject to the parking reduction requirements specified by this law. These areas can continue to follow existing parking regulations without the constraints imposed by AB 2097. Additionally, sixteen parcels in Downtown area are just outside the AB 2097 radius and will need to comply with parking regulations per zoning code. These parcels are at a disadvantage compared to rest of

4. Residential Permit Parking Program
The Palo Alto Residential Permit Parking Program (RPPP) aims to provide parking availability for residents and employees living and working in RPPP areas. The RPPP allows residents and employees to obtain permits for on- street parking. These permits grant permit holder a priority access to on- street parking spaces within designated zones for certain time periods.

However, despite the RPPP designating specific hours for residents, visitors may still choose to park in these zones due to the lack of alternative options or lack of knowledge of RPPP zones. The City must actively enforce RPPP regulations to discourage unauthorized parking. Regular patrols, ticketing, and penalties can serve as deterrents.
6 SB 834: Vehicles: preferential parking: residential, commercial, or other development project. Accessed May 1, 2024,
https://digitaldemocracy.calmatters.org/bills/ca_202320240sb834 City of Palo Alto Appendix C, Page 7
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the parcels within Downtown. For equity purposes, it is advised that the City consider extending the provisions of AB 2097 to these parcels. maximums to incentivize public parking provision, instituting employee parking programs, and implementing demand-based pricing. parking reductions as a tool to incentivize desired uses or improvements.

This possible tool will be very limited or not otherwise available in areas covered by AB 2097 provisions.

6. Peer City Management Strategies 7. Eliminates Possible Incentive Tool Parking management strategies from peer cities include integrating parking with TDM development standards, unbundling parking, establishing parking By removal of the parking requirements, AB 2097 creates and incentive for new development within the affected areas. However, many cities use City of Palo Alto Appendix C, Page 8
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Recommendations Figure 4: Downtown / CD-C Zoned Parcels Outside AB 2097 AB 2097 will dramatically limit and reduce the creation of new privately constructed or funded parking spaces associated with new or expanded development within the affected areas. This will require a shift from creation of new parking with development projects to a focus on management and optimization of the existing parking inventory to balance the supply of parking with the demand for parking from existing and future uses and development.

Management and optimization will require ongoing monitoring of the use of the existing supply. The supply includes not only public parking garages, surface lots and on-street spaces, but also the private off-street parking.

This section will discuss a number of the tools and methods to manage and optimize parking both in and outside of areas affected by AB 2097.

Based upon the findings of this report, the following section provides further detail of specific recommendations for the identified impacts on parking for retail business in the four study areas of Palo Alto.

1. Extend AB 2097 to Entire CD-C Zone for Equity
Within Downtown, there are 16 parcels in the CD-C district on University Avenue that lie just northeast of the half-mile radius from a high-quality transit stop that are not exempt from the parking requirements by AB 2097 (refer to Figure 4). Unless the provisions of AB 2097 are extended, these parcels will remain subject to minimum parking requirements and the Commercial Downtown Assessment District standards of 18.52 of the PAMC. To ensure equitable development conditions for all parcels in the Downtown area, it is recommended that uniform regulations be applied to the entirety of the CD-C districts in the Downtown area.

2. Allow Retail Flexibility Without Requiring Additional Parking In retail areas outside the influence of AB 2097, restrictions on retail conversion to retail or retail-like uses (for example, changing a boutique store into a restaurant or art gallery) can be removed due to provision of parking in accordance with the new use as long as the square footage is not increased. This will remove restrictions on developers and allow them to experiment with new uses to fill in vacancies.

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3. Parking Management & Optimization The City can use time limits and parking fees to manage and balance the use and occupancy of the parking supply at or near the optimum levels. Shorter parking periods can encourage more turnover and higher hourly parking fees are generally increased in the most popular areas while longer parking periods and lower parking fees are allowed in less popular areas. unused, it will reduce the perception of a parking shortage and need to oversupply parking. The City could collaborate with business owners and employees to understand parking needs and work schedules.

Based on the initial findings, there is currently an ample supply of parking to absorb significant new development and to fill existing vacancies in both Downtown and California Avenue. However, as redevelopment occurs, the combination of intensification and the lack of parking requirements due to AB 2097 will begin to impact the existing parking supply. Optimum parking occupancy is approximately 85%. This ensures excellent utilization of a precious resource, but adequate availability to ensure reasonable access without excessive search and delay 7. Beyond this point, parking availability becomes strained, and visitors may find it challenging to locate suitable parking spaces. When parking spaces are consistently occupied beyond this threshold it can lead to:

During interviews, the stakeholders expressed concerns about employees encountering challenges when obtaining permits for parking garages. These permits come in various types (three-month, six-month, and annual) and can be purchased during specific periods of the year. In addition, the City charges flat $8 daily rate for garages and lots beyond the free 2-to-3-hour parking. Their suggestion is that the City should offer a variety of pricing options for different time periods. It is recommended that the City work with business owners to find solutions that are acceptable to both City and business owners.

Recommendations 3 to 9 listed in this section include other methods to help manage and optimize the parking resources.

4. Develop Ordinance to Unbundle Parking
AB 1317, passed in October 2023, focuses on unbundling parking in California, requiring owners of qualifying residential properties 8 to separate parking costs from rent, i.e., renting or selling parking separately rather than automatically including it with the price of building space. The law goes into effect on January 1, 2025. Unbundling parking is the set of policies and actions to create a balance between the supply and demand of parking, reducing the inefficiencies that result in both high concentrations of localized parking demand in some areas and underutilized spaces in other areas.
x
x
Inconvenience: Visitors may struggle to find available parking spots.

Reduced Foot Traffic: High parking demand might discourage potential customers.

Stakeholders also expressed that the time limit for on-street parking poses challenges for employees. As previously recommended, employees should refrain from using on-street parking spaces, reserving them instead for visitors. Educating business owners about the impact of employee use of on-street parking could foster an understanding of the necessity for parking in off-site garages and parking lots.
x Business Impact: Commercial areas could lose business due to parking constraints.

In order to understand this impact, it is recommended that the City conduct a parking supply and demand study of these areas at least once a year or as significant development or changes to mobility options occur in these areas.

Below are some parking trends and factors to explore in such a study.

Benefits of unbundling include:

6. Pursue Shared-Use Agreements
x
x
x
The parking spaces that exist will be more efficiently used.

Non-drivers are not required to pay for parking they don’t need.

The market value of land used as parking becomes clear.

Owners of private parking facilities may be willing to enter an agreement that allows public parking outside of certain established hours. For example, if adequately compensated, offices may be willing to allow public parking in the evenings and on weekends, or religious institutions may be willing to allow public parking on weekdays. The City can facilitate shared parking between landowners by creating ready-to-use shared parking agreement.

On-Street and Off-Street Parking
Unbundling is especially helpful in areas that are not subject to minimum parking requirements, which now includes most of the Downtown and all of California Avenue study areas, due to their proximity to High Quality Transit Stop as defined by AB 2097. The success of this strategy also hinges on parking management, which seeks to ensure that concentrated locations of high parking demand are efficiently disbursed to locations where parking availability is plentiful.
x
x
What is the supply and demand of on street and off-street parking conditions during the peak hours, on weekdays, and on weekends? Who are the parking user groups using these spaces—customers, business owners, employees, delivery drivers, or others? The City can enter into parking agreements with the landowners to use private parking during hours that it typically goes unused. These areas can be advertised on-site and, on the website, as available parking spaces during certain times of the day.

Peak Parking Demand
x
x
What time does peak parking demand occur on a typical weekday and on a typical weekend?
What is the overall parking occupancy rate for the study area on these typical days?

5. Create an Employee Parking Plan and Program 7. Paid Parking Program Businesses can encourage employees not to park in the most convenient customer parking spaces. If patrons must drive around the block several times to find parking, they could potentially leave to seek another similar business with better parking space options. This situation often arises because employees use the on-street and off-street spaces that are most convenient to business patrons. If employees are encouraged to not park in these parking spaces and instead use the spaces that would otherwise be Paid on-street parking can effectively increase turnover rates and the supply of convenient parking spaces. Both California Avenue and University Avenue offer free on-street parking for the first two hours and then the visitors mustTurnover of Parking Spaces move their vehicle. Downtown has a system of color zones- x How long are cars staying and how often are spaces turning over and where?
purple, coral, lime, and blue, once the time limit expires in a given color 7 The High Cost of Free Parking, Donald Shoup.
8 The bill would define “qualifying residential property” as any dwelling or unit that is intended for human habitation that (1) is issued a certificate of occupancy on or after January 1, 2025, (2) consists of 16 or more residential units, and (3) is located within the County of Alameda, Fresno, Los Angeles, Riverside, Sacramento, San Bernardino, San Joaquin, Santa Clara, Shasta, or Ventura. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1 317, Accessed April 29. 2024.

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zone you must move your vehicle out of that zone. Reparking is not allowed in the same zone on same enforcement day once the time limit expires 9. alternative source of access to the single occupant vehicle as well as a first, last, and/or only mile link to destinations, especially for locals. These are essential ingredients of TDM strategy. The report found that there is a robust regional bus network, but there is a lack of bus redundancy in parts of the City around neighborhood serving districts. This gap is being addressed to some degree with the recently instated on-demand transit service pilot program. While there is a robust bicycle network, some critical routes connecting commercial districts with neighborhoods and other destinations lack adequate signage and lane markings. Lastly, there is no micro mobility program for shared bicycles and/or scooters, which are now common and widely used services for people of vastly ranging ages and socioeconomic status.

As new technologies emerge, it is advised that the City explore and implement technologies that can deliver real time information via an app or website. These can be applicable to parking garages, lots and on-street parking spaces and can help patrons find and receive directions to the nearest available space.

The off-street parking is free for first 2 to 3 hours depending on the lot or garage. It jumps to a flat rate of $8 per day after that. The City could implement incremental increase in rates instead if a flat $8 per day 10. This recommendation was brought to the PTC in 2019. At the time of recommendation, the flat rate was $25 per day. This was reduced to $8 during COVID 19 pandemic.

This strategy is also applicable for areas not covered by AB 2097.

10. Improve Signage and Wayfinding for Parking
Effective signage ensures visitors can find their way without confusion. Palo Alto has signage directing to the parking areas, but they don’t provide information on parking availability in particular garages or lots or directions to particular garage or lot.

It is recommended that the City evaluate implementing a paid metered on- street instead of moving the vehicle every 2 hours when a parking utilization threshold is reached. While colored zones system may be a financially viable option for frequent turnover it requires familiarity and can be confusing for the visitors who may not be aware of the zones. The report recommended several strategies under Guiding Principle 2, all of which will help the City enhance its TDM strategy and reduce the need for parking.

Figure 5: Downtown Parking Signage
Similar to Pasadena, the City of Palo Alto can also implement higher rates for on-street parking and lower rates for public garages and lots to encourage long-term visitors and employees to park in the off-site garages and lots and leave more convenient parking for short-time visitors.

Guiding Principle 2: Improve accessibility by embracing walking and biking solutions to/from/within all of the City's commercial districts and addressing parking policies and systems.

8. Enhance the City’s Transportation Demand Management (TDM) Strategy
This strategy is also applicable for areas not covered by AB 2097.

9. Explore Emerging TechnologiesTDM refers to a set of strategies aimed at improving transportation efficiency, reducing congestion, and promoting sustainable travel options.

These strategies encourage a shift away from single-occupancy vehicle trips and prioritize alternative modes of transportation, thereby reducing the need for parking spaces.

Palo Alto actively embraces technology to manage parking efficiently and enhance urban mobility. Palo Alto has deployed
automated parking guidance system (APGS) in its Downtown and California Avenue area garages. These systems feature ceiling-mounted multi- function camera sensors that monitor and display the status of up to six parking spaces per aisle. Integrated LED indicators indicate space availability and permitted parking types. This real-time information helps drivers find available parking spots more efficiently.

Palo Alto’s Municipal Code Section 18.52.050 (d) grants the Director of Planning and Development Services the authority to require including TDM strategies for any project requesting a reduction in parking or generating 50 or more net new weekday (AM or PM peak hour) or weekend peak hour trips. While the developer is limited to the project site for the implementation of a TDM program/strategy the City can implement a TDM program/strategy at neighborhood or citywide scale which can have a more significant impact on the parking impacts in Downtown and California Avenue.

In 2015, Palo Alto installed 545 Internet of Things (IoT) sensors throughout the city most of which were installed in Downtown 11. These sensors are equipped to provide real-time data via website and app on vacant parking spots in the Downtown area. The goal is to reduce congestion and enhance the overall parking experience. However, there is no information on the data received by these sensors on the website and there is no app available to find parking spaces. Currently these sensors are nor active.An assessment by Comprehensive Economic Development Strategy adopted by the City Council in August 2023 focused on city-wide access and connectivity of transit and bike networks as these systems provide an 9Downtown Color Zone Parking,
https://www.cityofpaloalto.org/Departments/Transportation/Parking/Parking- 10 Parking Work Plan,
https://www.cityofpaloalto.org/Departments/Transportation/Parking/Palo-Alto- 11 Government Technology, California Cities Turn to Internet of Things to Solve Parking, Traffic Problems, October 27, 2015,
Programs/Downtown-Color-Zone-Parking, Accessed April 29, 2024 Parking-Action-Plan/Parking-Work-Plan, Accessed April 22, 2024 https://www.govtech.com/fs/california-cities-turn-to-internet-of-things-to-solve- parking-traffic-problems.html
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Most garages in Downtown and California Avenue area have APGS as discussed in previous recommendation. Hence, once the patron reaches the garage, they can have the information on availability of parking. The existing APGS and emerging technologies can be integrated with digital signage at strategic locations, that can provide real time information on parking. This will reduce the time spent to find parking in the retail areas.

11. Curb Space Management will reduce the burden on curb space. Lastly, paid parking effectively increases turnover rates and the supply of convenient parking spaces.

Leveraging technology to provide real-time information on parking availability can play an important role in efficient parking management These strategies are discussed in the Recommendation section of this report.

Increasing the opportunity to walk and bike to various locations and to complete short distance trips can alleviate pressure on parking. Adopting a micromobility program for shared bicycles and/or scooters and providing adequate curb space may also reduce the need for car for shorter trips.

Other strategies, such as encouraging employees to not park in the most convenient customer parking spaces and instead use the off-street parking, This strategy is also applicable for areas not covered by AB 2097.

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Attachment 1 - Parking Requirements
The following are the minimum off-street parking requirements for retail establishments.

Table 3: Minimum Off-Street Parking Requirements
Use Parking Requirement
Retail
Intensive (retail not defined as extensive) 1 per 200 sq. ft. of gross floor area 1 per 350 sq. ft. of gross floor area
Extensive (retail with more than 75% of gross floor area used for display, sales, and related storage, with
demonstrably low parking demand generation per
square foot of gross floor area)
1 space for each 500 square feet of sales, display, or
storage site areaOpen lot
Shopping Center 1 per 275 sq. ft. of gross floor area
Table 4: Minimum Off-Street Parking Requirements for Parking Assessment Districts Use Parking Requirement
Downtown University Avenue Parking Assessment District
All uses (except residential) 2 1 per 250 square feet
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Attachment 2 - Existing Parking
Downtown/University Avenue
Figure 6: Off-Street Parking - Downtown/University Avenue Figure 7: On-Street Parking - Downtown/University Ave City of Palo Alto Appendix C, Page 14
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Table 5: Downtown/University Avenue Public Parking Supply California Avenue Type Parking Spaces Size (Acres)
Figure 8: Off-Street Parking - California AvenueOff-Street Structure High/Alma South Garage (R)
High/Alma North Garage (Q)
Ramona/University Garage (B)
Bryant/Lytton Garage (SL)
Webster/Cowper Garage (WC)
Civic Center Garage (CC)
Total Off-Street Structure
Off-Street Lot
210
130

0.5 0.8

0.5 1.1

1.4 2.0

6.3 133
681
587
721
2,462
Emerson/Ramona Lot (N)
Cowper/Hamilton (H)
High/Hamilton Lot (P)
Lytton/Kipling Lot (T)
Lytton / Waverley Lot (K)
Hamilton/Waverley Lot (D)
Gilman/Waverley Lot (G)
Gilman/Bryant Lot (E)
Florence/Lytton Lot (F)
Ramona/Lytton Lot (C)
Emerson/Lytton Lot (A)
Emerson/High Lot (O)
Total Off-Street Lot
48 93

0.4 0.6

0.4 0.4

0.7 0.7

0.3 0.9

0.4 0.5

0.5 0.5

6.3 12.6
-
52 52
97 84
53 35
47 52
68 77
758
3,220
1,035
4,255
Total Off-Street
Total On-Street
Grand Total 12.6
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Figure 9: On-Street Parking - California Avenue Table 6: California Avenue Public Parking Supply Type Parking Spaces Size (Acres)
Off-Street Structure
Lot 5 - Cambridge E/Garage (A)
Lot 3 - Cambridge W/Garage (B)
350 Sherman Garage (C)
157
182
627
966

0.7 0.7

1.0 2.4Total Off-Street Structure
Off-Street Lot
Lot 9 - Birch/Cambridge (D)
Lot 1 - Cambridge/Park (E)
Lot 2 - Cambridge/Birch (F)
Lot 8 - Sherman/Ash Lot (G)
Lot 4 - Cambridge/Birch (H)
Total Off-Street Lot
28 27

0.2 0.2

0.2 0.8

0.5 1.9

4.3 -
28 103
87 273
1,239
756
1,995
Total Off-Street
Total On-Street
Grand Total 4.3
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Midtown
Figure 11: On-Street Parking - MidtownFigure 10: Off-Street Parking - Midtown Table 7: Midtown Public Parking Supply
Type Parking Spaces Size (Acres)
Off-Street Lot
Colorado/Midtown Ct Lot (A)
Total Off-Street Lot
Total On-Street
93 93

0.7 0.7
-25
Grand Total 118 0.7
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El Camino Real
Figure 12: On-Street Parking - El Camino Real Table 8: El Camino Real Public Parking Supply Type Parking Spaces Size (Acres)
PAMF Drive to Galvez St. /
Embarcadero Rd. 26 -
-Serra St./ Park Blvd. to College Ave.

Sheridan Ave. to San Antonio Rd.

Total On-Street
61 222
309
309
-
-Grand Total
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Attachment 3 - AB 2097 Relief Areas
Figure 13: AB 2097 Relief Area - Downtown/University Avenue and El Camino Real- Town and Country Figure 14: AB 2097 Relief Area - California Avenue City of Palo Alto Appendix C, Page 19
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Figure 15: AB 2097 Relief Areas - Midtown Figure 16: AB 2097 Relief Area - El Camino Real s City of Palo Alto Appendix C, Page 20
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Downtown Commercial (CD) Combining Districts
The CD district is designed to cover the entirety of downtown Palo Alto and support a wide variety of uses to support local and regional businesses with the following key objectives:

Retail Shopping (R)
Modifies the CN, CC, and CD districts to allow only retail, eating, and service- oriented commercial on the ground floors.Introduction • •
•
•
•
Control the rate and size of commercial development
Preserve and promote ground-floor retail
Enhance pedestrian activity
Pedestrian Shopping (P)A detailed review of the Palo Alto Zoning Ordinance was conducted to review the permitted uses, development standards, and procedures. The purpose of the analysis is to identify likely and potential constraints and opportunities to improve the health and function of retail uses and the main commercial retail and commercial corridors and provide recommendations for improvement.

Modifies the CN, CC, and CD districts to require pedestrian site design amenities, including:Create transitions from commercial to retail uses Preserve historic buildings •
•
Display windows or retail display areas
The CD district includes the following subdistricts: Pedestrian arcades, recessed entryways, or any covered pedestrian areas•
•
•
CD-C (Community)
CD-S (Service)Zone Districts •
•
Landscaping or architectural design features
Vehicular restriction on pedestrian areasThere are five primary zone districts with several subdistricts and combined districts layered on the base districts, as follows:

CD-N (Neighborhood)
Neighborhood Commercial (CN)
Figure 1: Palo Alto Layers of RegulationThe CN district is designed to create neighborhood shopping areas primarily accommodating retail sales, personal service, eating and drinking, and office uses of moderate size serving and compatible with the immediate neighborhood.

Community Commercial (CC)
The CC district is designed to create major commercial centers accommodating a wide range of uses intended to support the greater Palo Alto and regional community identified in the General Plan.

Community Commercial 2 (CC[2])
The CC (2) subdistrict is designed to modify the site development regulations of the CC district and has a different approval process compared to the CC district.

Service Commercial (CS)
The CS district is designed to accommodate local and regional services that generally require vehicular access and convenience.

Source: Streetsense
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Ground Floor (GF) Definitions
The district provides design standards when combined with the CD-C subdistrict and permits the uses allowed in the commercial districts and subdistricts to promote active, pedestrian-oriented uses, with a high level of transparency at ground level. Office not allowed.

Formula Retail Business
Retail, personal, or eating and drinking service that has more than 10 locations throughout the United States and are standardized in character and function, typically known as a franchise or chain. Standardized merchandise, menu and/or services are defined as having 50 percent or more of in-stock merchandise from a single distributor bearing the same or similar markings, and 50 percent or more of menu items identical in name and presentation with other locations.

Pedestrian and Transit Oriented Development (PTOD)
The PTOD district permits a mix of uses and densities through development standards as well as providing context-based design criteria standards aimed to activate and create an attractive pedestrian-level environment along the California Avenue corridor. The objectives of the PTOD district include: Retail Service
Retail service in Palo Alto is defined as open to the public during typical business hours and relates to retail sale, rental, service, processing, or repair of items intended for consumer or household use. Retail services are further separated into two categories:
•
•
Supporting use of public transportation
Encouraging a variety of housing types, commercial retail, and limited office uses
•
•
Encouraging context-based project design • Extensive retail service: A retail sales use that has more than 75 percent of the gross floor area used for display, sales, and related storage.

Requiring streetscape design elements that support pedestrian and bike infrastructure
• Intensive retail service: Any retail service use that is not defined as extensive retail service, including limited food services such as premade food and packaged items.

Retail-like Use
Retail services and closely related services are open to the public during typical business hours, and include the following type of uses: eating and drinking services, hotels, personal services, theaters, travel agencies, commercial recreation, commercial nurseries, auto dealerships, and daycare centers.

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Permitted Uses
The following table details the permitted retail uses for each district, subdistrict, and combining district.

Table 1: Permitted Uses by Area and Zone Dsitrict

PALO ALTO RETAIL ZONING STUDY
Land Use
El Camino Real, Midtown California Ave University Ave El Camino Real Combining Districts

GFR PTOD
(Cal Ave)CN(1) CC, CC(2) CD-C CS (ground floor use restrictions) (ground floor use restrictions) (Cal Ave) (Univ Ave)
Retail Use
Eating and Drinking Service, except drive-in or take-out services
Retail Service
Shopping Center
Liquor Store
P
P
P P P
P
P
P
P
P
P
PP
P
P
P
P
PCUP
P
P
Retail-like Services
Hotel
Personal Services
Travel Agency
P
P(6)
P
P(4)
P
P
P
P(3)
P
P
PP(2)
Commercial Recreation
Less than 5,000 sf
Over 5,000 sf
Day Care Centers
CUP(5)
P
CUP(5)
P
P(7)
CUP(7)
P
P
P
CUP
CUP(5)
P
P P
P
P
CUP
CUP
CUP
CUP
CUP
CUP
Business or Trade School
Financial Services (no drive-in)
General Business Service
Learning Center (small)
Formula Retail on California Avenue
Beauty Shops, Nail Salons, Barbershops, Fitness Studios > 1,800 gfa, Small Learning Centers
Professional, and General Business Offices
CUP
CUP
CUP
(6) (4) CUP
P*
CUP(5)
P*
CUP(5)
P
P
P*
CUP(5)Medical Offices
NOTES:

California Ave R Combining District in conflict with this footnote - R Combining District doesn't list and therefore prohibits where explictly allowed with a CUP in CC(2) zone.

Conflicts between GF and underlying zone - Combining/overlay supersedes base zone.

PTOD is limited to approximately 2 small properties on/near CalIfornia Ave.

FOOTNOTES:
(1) For properties in the CN and CS zone districts, businesses that operate or have associated activities at any time between the hours of 10:00 p.m. and 6:00 a.m. require a conditional use permit (CUP).
(2) Personal services, except the following on California Avenue:
(6) A CUP is required for the following uses when fronting on California Avenue:
(A) fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area; and (B) learning centers intended for individual or small group settings.

Beauty shops; nail salons; Barbershops; Laundry and cleaning services as defined in Section 18.04.030(114)(B); Fitness or exercise studios exceeding 1,800 square feet in gross floor area; and Learning centers intended for individual or small group settings. (3) Personal services, except for parcels with frontage on University Avenue, where uses defined in Section 18.04.030(114)(B), (G),(H), and (I) are not permitted. (4) A CUP is required for the following uses when fronting on University Avenue:

A CUP is required for fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area in Town and Country Village Shopping Center.
(7) A CUP is not required for commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a CUP is always required:
(A) fitness or exercise studios, and similar uses; and (A) medical office fronting on University Avenue; (B) learning centers intended for individual or small group settings. (B) commercial recreation uses fronting on University Avenue. (5) A CUP is not required for medical office or commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a CUP is always required:
* Per 18.16.050(a), Medical, professional, and business offices shall not be located on the ground floor, unless any of the following apply to such offices:

1. Occupy a space that was not occupied by retail services, personal services, eating and drinking services.

2. Are located in new or remodeled ground floor area built on or after March 19, 2001, if the ground floor area is devoted to housing, retail services, eating and drinking services, personal services.
(A) medical office fronting on California Avenue and in the Midtown Shopping District; (B) commercial recreation uses fronting on California Avenue and in the Town and Country Village Shopping Center.

City of Palo Alto Appendix D, Page 3
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
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PALO ALTO RETAIL REVITALIZATION STUDY
Development Standards an unconstitutional taking of property or otherwise have an unconstitutional application to the property; orGrandfathered Uses CN District Office Uses CN, CC, CC(2), CS, and CD districts have development standards for exclusively nonresidential and mixed-use and residential. The following table identifies the maximum size of retail establishments by type. A comprehensive list of the development standards for the CD district can be found in Table 4.
b. Alternative Viable Active Use. Except in the GF or R combining districts, an applicant may request that the requirements of the retail ordinance be adjusted or waived based on a showing that: the permitted retail or retail-like use is not viable; the proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation, and the proposed use will encourage active pedestrian-oriented activity and connections.

In the CN district, all office uses existing as of August 1, 1989, which were conforming permitted uses or conditional uses operating subject to a conditional use permit and exceeding 5,000 square feet in size or 25 percent of lot area, may remain as legal nonconforming uses and shall not require a conditional use permit. Table 2: Maximum Size of Retail Establishment by Type Maximum Size of Establishment (sq ft)CS District Office Uses 4. Exemptions.

Type of Establishment
Personal Services
Retail Services, except grocery stores
Grocery Stores
Eating and Drinking Services
Neighborhood Business Services
CN CD
3,000
15,000
20,000
5,000
-
a. A 100% affordable housing project not within the Ground Floor (GF) and/or Retail (R) combining districts or on a site abutting El Camino Real (households with income levels at or below 120% of the area median income).
b. A 100% affordable housing project on a site abutting El Camino Real in the CN and CS zone districts outside the Retail (R) combining district(households with income levels at or below 120% of the area median income and where the average household income does not exceed 80% of the area median income level).

In the CS district, medical, professional, or general business or administrative office uses existing on August 1, 1989, and which, as of such date, were lawful conforming permitted uses or conditional uses operating subject to a conditional use permit may remain as nonconforming uses and shall not require a conditional use permit or be subject to termination. 3,000
15,000
20,000
5,000
3,000
Retail Preservation Ordinance 18.40.180
(Relevant portions excerpted)
c. A high-density residential or mixed-use project in the CS zone district, but not within the Ground Floor (GF) or Retail (R) combining districts, shall be required to replace only 1,500 square feet of an existing retail or retail-like use. For the purposes of this partial exemption, high-density shall mean 30 or more dwelling units per acre.
d. Reconstruction. Any ground floor Retail use existing on or after March 2, 2015 may be demolished and rebuilt provided that the portion of square footage used as Retail use on or after March 2, 2015 is not reduced except that Retail square footage may be reduced by the minimum amount needed to provide access to any new upper floor and/or lower level.

1. Conversion of Retail and Retail-Like Uses Prohibited. a. Any ground floor Retail or Retail-Like use permitted or operating as of March 2, 2015, may be replaced only by another Retail or Retail- Like use, as permitted in the applicable district.

2. Non-conforming Uses.
a. The requirements imposed by the retail ordinance do not apply to Retail or Retail-like uses that are no longer permitted or conditionally permitted in the applicable district.

3. Waivers and Adjustments; and Exemptions.
a. Economic Hardship. An applicant may request that the requirements of this section be adjusted or waived based on a showing that applying the requirements of this section would force City of Palo Alto Appendix D, Page 4
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
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PALO ALTO RETAIL REVITALIZATION STUDY
Parking Requirements
Table 3: Minimum Off-Street Parking Requirements by Use Minimum Off-Street Parking Requirements Minimum Off-Street Parking Requirements for Parking Assessment Districts
Use Vehicle Parking Requirement (# of spaces)
For Downtown University Avenue Parking Assessment
District:

All uses (except residential) 1 per 250 sf
For California Avenue Parking Assessment District:

Retail Uses1
Intensive 1 per 200 sf of gross floor area 1 per 240 sf of gross floor area Extensive 1 per 350 sf of gross floor area 1 per 350 sf of gross floor area Open lot 1 space for each 500 sf of sales, display, or storage site area 1 for each 500 sf of sales, display, or storage site area Eating and Drinking Services
With drive-in or take-out 3 per 100 sf of gross floor area facilities
3 per 100 sf of gross floor area
1 per 450 sf of gross floor area
All others 1 space for each 60 gross sf of public service area, plus 1 space 1 per 155 sf of gross floor area for each 200 gross sf for all other areas.

Personal Services
Hotel/Motel/Inn
1 per 200 sf of gross floor area
1 space per guestroom; plus the applicable requirement for eating and drinking, banquet, assembly, commercial or other as required for such uses, less up to 75% of the spaces required for guestrooms, upon approval by the director based on a parking study of parking generated by the mix of uses.
1 For residential mixed-use developments in the CD-C zone, CC(2) zone, on CN and CS zoned sites abutting El Camino Real, and on CS zoned sites abutting San Antonia Road between Middlefield Road and East Charleston Road, the first 1,500 square feet of ground-floor retail uses shall not be counted toward the vehicle parking requirement.

Parking Regulations for CD Assessment District 18.52.070 (Relevant portions excerpted)
residential use. Conversion must not eliminate any existing on-site parking.

In-lieu parking

2. In connection with any expansion of the supply of public parking spaces within the CD commercial downtown district, the city shall allocate a number of spaces for use as "in-lieu parking" spaces to allow development to occur on sites which would otherwise be precluded from development due to parking constraints imposed by this chapter. Off-site parking on such sites may be provided by payment of an in-lieu monetary contribution to the city to defray the cost of providing such parking.

Criteria to be eligible for in-lieu parking program:
c. Vacant parcels shall be exempt from the requirements at the time when development occurs. Development shall be exempt to the extent of 0.3 parking spaces 1,000 square feet of site area, provided that such parcels were at some time assessed for parking under a Bond Plan E financing or were subject to other ad valorem assessments for parking.

On-site parking

1. On-Site Parking Requirement
a. Any new development, addition, or any use of any floor area that has never been assessed under any Bond Plan G financing pursuant to Title 13, shall provide one parking space for each 250 gross square feet of floor area. Off-site parking
a. On site parking would impact historic structure
b. Site is >10,000 sf
c. Site is located in an area where curb cuts are prohibited d. Physical constraints

2. Exceptions 1. Must be within a reasonable distance of the site using it or, if the site is within an assessment district, within a reasonable distance of the assessment district boundary and approved in writing by the director of planning and community environment. Any development occurring on the site where parking is provided shall not result in a net reduction of parking spaces provided, considering both the parking previously provided and the parking required by the proposed use.
a. Square footage for handicapped access, which does not increase the usable floor area, and square footage for at or above grade parking, though such square footage is included in the FAR calculations b. A conversion to commercial use of a historic building shall be exempt from the on-site parking requirement in subsection provided that the building is fifty feet or less in height and has most recently been in City of Palo Alto Appendix D, Page 5
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
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PALO ALTO RETAIL REVITALIZATION STUDY
Table 4: Palo Alto Zoning Comparison Matrix - Santa Monica and Los Altos

SANTA MONICA
ZONING STANDARD/ Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# APPROACH PALO ALTO LOS ALTOS 1 Level of regulation – Zone Districts Downtown Districts Zone Districts Zone Districts Zone Districts 


Downtown Commercial (CD)
Neighborhood Commercial (CN)
Community Commercial (CC)
 Bayside Conservation (BC) – Third Street
Promenade Area
 Neighborhood Commercial (NC) 


Commercial Downtown (CD)
•
•
•
•
Main Street Commercial Retail Sales (CRS)






Mixed-Use Boulevard (MUB)
Neighborhood Village (NV)
Transit Adjacent (TA)
Pico Boulevard Commercial Retail Sales/Office (CRS/OAD) • Community Commercial 2 (CC[2]) Ocean Park Boulevard
Montana Avenue Service Commercial (CS)
Ocean Transition (OT) 


Mixed-Use Boulevard Low (MUBL)
Mixed-Use Boulevard (MUB)
General Commercial (GC)
Wilshire Transition (WT)
Lincoln Transition (LT)
Design Guidelines
2 Overlay Districts Combining Districts Neighborhood Conservation (NC) Loyola Corners Specific Plan (LCSP) 


Retail Shopping (R)  Purpose of identifying, conserving, maintaining, strengthening, and enhancing a neighborhood’s cohesive and distinctive architectural or physical characteristics.

LC/SPZ overlay (14.42) applies to CN zoned areas
surrounding Miramonte Ave and Fremont Ave.

Special requirements in addition to base zoning.

Pedestrian Shopping (P)
Ground Floor (GF) Off-Street Parking (A)
Intended to provide adequate parking facilities to support important commercial corridors and neighborhood commercial areas.



Certain restrictions on expansion of existing
office/administrative and retail uses under a
master use permit
Pedestrian and Transit Oriented Development
(PTOD)
Parking requirements encourage of non-
conforming uses to turn over to conforming
uses
Ground floor retail uses encouraged in
LC/SPZ overlay through restricting new net
square footage of other ground floor uses
City of Palo Alto Appendix D, Page 6
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
97 Packet Pg. 355 of 435

PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
Active Uses3 Ground floor use
regulations/restrictio
ns
Combining Districts

 Restaurants, bars/nightclubs/lounges, car
showrooms, offices, personal services,
food and beverage sales, and instructional
services allowed with CUP or specific
limitations.

Active Ground Floor Use and Design 9.11.030(A)
Ground Floor (GF) - The district provides
design standards when combined with the CD-
C subdistrict and permits the uses allowed in
the commercial districts and subdistricts to
promote active, pedestrian-oriented uses,
with a high level of transparency at ground
level.

Active Use Requirement  Active uses and active ground floor uses are required/encouraged in certain commercial
districts.
 Active use requirements on the ground floor
street frontage on Main Street and Montana
Ave. 

Design guidelines to promote active ground
floor uses (e.g. transparency requirements)

Office and residential limited to upper
floors or behind ground floor tenants. •
•
•
•
•
•
•
Cultural facilities;
Sites over 5,000 sq. ft. with existing retail or
restaurant space on the ground floor must
retain the existing sq. ft. of those uses (CD
district)
Food and beverage sales;
Eating and drinking establishments;
Grooming and pet stores;
Banks and credit unions;
Business services;
Franchise restaurants (+150 locations)
prohibited on the ground floor.• Prohibits ground floor office Downtown and Midtown unless grandfathered.
 Retail Shopping (R) - Modifies the CN, CC, and
CD districts to allow only retail, eating, and
service-oriented commercial on the ground
floors.






Office uses restricted to upper floors (CN,
except for new development)
Commercial entertainment, recreation,
and Instructional Services;
Housing restricted to upper floors (CD,
CRS/OAD districts)
• Prohibits ground floor office on California
Ave. • General personal services and personal
physical training;
Trade schools restricted to upper floors (CRS,
CRS/OAD districts)
Retail Preservation Ordinance (RPO) (18.40.180) •
•
General retail sales; and
Childcare facilities.

Certain uses restricted on ground floor on
Main Street or State Street (CRS district) Any ground floor Retail or Retail-Like use permitted or operating as of March 2, 2015,
may be replaced only by another Retail or
Retail-Like use, as permitted in the applicable
district.

Minimum ceiling height on ground floor to
promote active uses (CT, CD/R3 districts)
Active Commercial Design
 Design standards (i.e., façade) for ground floor
street frontage active uses. Retail expansion limited, but more encouraged than office/administrative uses
in LC/SPZ overlay district
Pedestrian-Oriented Design
 Design standards to improve the ground floor
level environment for pedestrians.

City of Palo Alto Appendix D, Page 7
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
98 Packet Pg. 356 of 435

PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
4 Change of Use/
Intensification
process
Change from retail use prohibited in Ground Floor
(GF) and Retail Shopping (R) combining districts.

Minor Use Permits and Conditional Use Permits (9.41) Certain districts allow commercial expansion only under specific circumstances or of specific sizes.

Certain districts encourage turn-over of non-
conforming uses in active use areas.
 All Minor Use or Conditional Use Permits must meet the following criteria:
• The proposed use is conditionally allowed within the applicable Zoning District and complies with all other applicable provisions of this Ordinance and all other titles of the Municipal Code. •
•
•
The proposed use is consistent with the General Plan and any applicable specific plan.

The subject parcel is physically suitable for the type of land use being proposed.

The proposed use is compatible with any of the land uses presently on the subject parcel if the land uses are to remain.
•
•
The proposed use is compatible with existing and permissible land uses within the district and the general area in which the proposed use is to be located (e.g. size, intensity, hours of operation, number of employees, or the nature of the operation).

The physical location or placement of the use on the site is compatible with the surrounding neighborhood.
•
•
No significant environmental impacts
Not deemed detrimental to the public interest, health, safety, convenience, or general welfare. 5 Retail Definition Retail Service Retail Sales Use Classification 9.51.030 Retail Uses Retail service in Palo Alto is defined as open to the
public during typical business hours and relates to
retail sale, rental, service, processing, or repair of
items intended for consumer or household use.

Retail services are further separated into two
categories:
 General Retail Sales, Small-Scale. The retail sale or rental of merchandise not specifically listed under another use classification. This classification includes retail establishments with 25,000 square feet or less of sales area; including department stores, clothing stores, furniture stores, pet generally for consumer or household use. Retail Defined as: uses that predominantly sell products
rather than services, directly to the public, and
supply stores, small hardware, and garden supply/nurseries stores (with 10,000 square feet or less uses are designed to attract a high volume of walk- of floor area), and businesses retailing goods including, but not limited to, the following: toys, hobby materials, handcrafted items, jewelry, cameras, photographic supplies and services (including portraiture and retail photo processing), medical supplies and equipment, pharmacies, electronic equipment, sporting goods, kitchen utensils, hardware, appliances, antiques, art galleries, art supplies, and services, paint and wallpaper, carpeting and floor covering, office supplies, bicycles, video rental, and new automotive parts and accessories (excluding vehicle service and installation). Retail sales may be combined with other services such as office machines, computers, electronics, and similar small-item repairs. in customers and have floor space that is devoted
predominantly to the display of merchandise to
attract customers. Retail businesses may also
provide incidental after-sales services, such as
repair and installation, for the goods sold.
 Extensive retail service: A retail sales use that
has more than 75 percent of the gross floor
area used for display, sales, and related
storage.  “Extensive retail” as used with respect to
parking requirements, means a retail use
primarily selling large commodities such as
home or office furniture, floor coverings,
stoves, refrigerators, other household
electrical and gas appliances, including
televisions and home sound systems, and
outdoor furniture, such as lawn furniture,
movable spas and hot tubs.
 Intensive retail service: Any retail service use
that is not defined as extensive retail service,
including limited food services such as
premade food and packaged items.


General Retail Sales, Medium-Scale. Retail establishments with more than 25,000 square feet - 80,000 square feet of sales area.

General Retail Sales, Large-Scale. Retail establishments with over 80,000 square feet of sales area.Retail-like Use Retail services and closely related services are open
to the public during typical business hours, and
include the following types of uses: eating and
drinking services, hotels, personal services, theaters, travel agencies, commercial recreation, commercial
nurseries, auto dealerships, and daycare centers.
 “Intensive retail” as used with respect to
parking requirements, means any retail use
not defined as an extensive retail use.

City of Palo Alto Appendix D, Page 8
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
99 Packet Pg. 357 of 435

PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
6 Approval Processes
(ministerial, principal
permitted use, CUP,
Special Permits,
Review Procedures – Summary (18.77.050) Administrative Approval (9.39) Design and Transportation Review—Multiple- Family, Public and Community Facilities, Office
and Administrative, and Commercial Districts
(14.78)
 Variance, Conditional Use Permits, and
Neighborhood Preservation Exception
Required for non-housing projects of more than 1,000 square feet, all new construction, and new additions to existing buildings that do not exceed the following:
•
•
•
Staff - Review 


Tier 1 maximum limits;variances, deviations)  Staff level review (Director or designee); or Planning Commission review if larger than
500 sq. ft., 50% increase in size, or increasing
height.

Director – Tentative Decision In Neighborhood Commercial and Oceanfront Districts, 7,500 square feet; In the Pico Neighborhood Area 7,500 square feet.Planning Commission – Hearing and Recommendation (upon request) Chapter 9.40 Development Review • City Council – Final Decision (upon
request)
Intended to allow the construction of certain projects for which the design and siting could result in an adverse impact on the surrounding area.

Required if the following thresholds are met:

Director can require administrative design
review based on special circumstances.



Major Architectural Review Multimodal transportation review (14.78.090) • Architectural Review Board - Hearing and
Recommendation



Tier 1 maximum limits;  Required for projects subject to Planning Commission design reviewIn Neighborhood Commercial and Oceanfront Districts, 7,500 square feet; In the Pico Neighborhood Area 7,500 square feet.•
•
Director – Decision  Complete Streets Commission review at public meeting and recommendation to
Planning Commission
City Council – Final Decision on Appeal Chapter 9.42 Variances Minor Architectural Review  Mechanism for relief from the strict application of zoning code where it will deprive the property Variances (14.78.070)
Variances reviewed by Planning Commission
•
•
Staff – Tentative Decision owner of privileges enjoyed by similar properties because of the subject property’s unique and special conditions.Architectural Review Board - Hearing and Recommendation (upon request)

at public hearing based on special
circumstances of the property
 Property owner must provide required findings to prove special conditions. •
•
Director – Decision (if ARB hearing is
requested)
Waivers (9.43.40)
Use Permits (14.80)Waiver may be granted from the following requirements. 

Director or designee initial reviewCity Council – Final Decision on Appeal  




Upper-story stepbacks.

Use permits reviewed by Planning
Commission at public hearing
Build-to lines.

Active commercial design standards, including transparency.

Active use requirement.  Appeals or call-ups to City Council Unit mix.

Pedestrian-oriented design standards
7 Approving Authority New construction (permitted uses)  








Zoning Conformance Review — Director 


Conditional Use Permit — Planning
Commission& Approval Times
(Ministerial/Building
department, Planning
Staff, PC, City Council)
 Director — Varies
New construction (CUP uses)
Director — Varies
Major remodeling/tenant improvement
Director — Varies
Minor changes
Administrative Approval — Director
Design & Transportation review (minor) —
Director
Conditional Use Permit — Planning Commission
Development Review Permit — Planning Commission
Minor Use Permit — Director Hearing (Zoning Administrator) Temporary Use Permit — Director

Design & Transportation review (major) —
Planning Commission (with Complete Streets
Commission recommendation)
Minor Modification — Director 

Temporary Use Permit — Director
Variance — Planning Commission Director — 6+ Months Major Modification — Director Hearing - (Zoning Administrator) Waiver — Director Hearing (Zoning Administrator)
Variance — Planning Commission
New signage/signage change
 Director — 6+ months
City of Palo Alto Appendix D, Page 9
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
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Packet Pg. 358 of 435

PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
8 Permitted Uses Downtown Commercial (CD-C) Bayside Conservation (BC) - Third Street Promenade Area
Neighborhood Commercial (NC) – Main St, Pico Blvd, Commercial Retail Sales (CRS) – Main St, State St Montana AveRetail Use 



Business, professional, and trade schools
Office-administrative services
Personal services
Commercial Uses Commercial Uses Eating and Drinking Services, except drive-in or take-out services 

Animal Care, Sales, and Services
Grooming and Pet Stores
Commercial Entertainment and Recreation
 Eating and Drinking Establishments



Retail Service
Shopping Center
Liquor Store
• • Restaurants, Full-Service, Limited Service &
Take-Out (2,500 – 5,000 square feet and
smaller, including Outdoor Dining and
Seating)
Private clubs, lodges, or fraternal
organizations
•
•
Cinemas & Theaters 



Restaurants, excluding drive-through services
Retail-like Services Convention and Conference Centers Retail 






Hotel 

Eating and Drinking Establishments
Food Hall (up to 175 seats)
Food and Beverage Sales
Cocktail lounges
Personal Services • Uses which are determined by the
community development director to be of
the same general character
Commercial Recreation – Day Care Centers
Business or Trade School
Financial Services (no drive-in)
Professional, and General Business Offices
Medical Offices
•
•
Farmer’s Market
Liquor Stores
 Lodging
•
•
Bed and Breakfast
Hotels and MotelsCommunity Commercial (CC, CC(2))
Retail Use 

Personal Services
General Personal Services
Retail Sales
General Retail Sales, Small- and
Medium-Scale
 Eating and Drinking Service, except drive-in or
take-out services
•



Retail Service
Shopping Center
Liquor Store
•
Retail-like Services



Hotel
Personal Services
Commercial Recreation – Day Care Centers
Professional, and General Business Offices
City of Palo Alto Appendix D, Page 10
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
Pg.
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Packet Pg. 359 of 435

PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
9 Conditional/
Limited Uses
Downtown Commercial (CD-C) Bayside Conservation (BC) - Third Street Promenade Area
Neighborhood Commercial (NC) – Main St, Pico Blvd, Commercial Retail Sales (CRS) – Main St, State St Montana AveRetail-like Services 






New building >7,000 sf
Commercial recreation
Day care centers
Commercial Uses Commercial Uses

Commercial Recreation – Over 5,000 sf
 Automobile/Vehicle Sales and Service  Eating and Drinking EstablishmentsGeneral Business Service •
•
Automobile Rental L(10) • Restaurants, Full-Service, Limited Service & Take-Out (greater than 5,000 square feet,
including Outdoor Dining and Seating)
(10)(11)
Community Commercial (CC, CC(2)) Hotels
New Automobile/Vehicle Sales and
Leasing L(8), L(5)
Retail-like Services Housing
 Commercial Recreation – Less than 5,000 sf Medical and dental clinics or offices >5,000 sf 

Business Services L(15)Medical Offices Uses which are determined by the planning commission to be of the same general
character.


Food Hall (up to 175 seats)
Food and Beverage Sales
Commercial Entertainment and Recreation
•
•
Large-Scale Facility L(21)
Small-Scale Facility L(5) •
•
•
•
Convenience Market
Farmers Markets
General Market L(12)
Liquor Stores
 Eating and Drinking Establishments
•
•
Bars/ Nightclubs/ Lounges
Restaurants, Full-Service, Limited
Service & Take-Out (2,500 square feet
and smaller, including Outdoor Dining
and Seating) L(22)





Instructional Services L(17)
Live-Work L(14)
Maintenance and Repair Services L(2)
Nurseries and Garden Centers L(17)
Offices
•
•
Restaurants, Full-Service, Limited
Service & Take-Out (2,501 -5,000
square feet and smaller, including
Outdoor Dining and Seating) L(22) •
•
•
•
Business and Professional L(21)
Creative L(21)Restaurants, Full-Service, Limited
Service & Take-Out (greater than
5,000 sq ft, including Outdoor Dining
and Seating) L(22)
Medical and Dental L(21)
Walk-In Clientele L(21)
 Retail Sales
 Food and Beverage Sales • General Retail Sales, Small-Scale L(2) •
•
Convenience Market
General Market



Instructional Services L(1), L(5)
Live-Work L(1), L(13)
Offices
•
•
•
Business and Professional L(1)
Creative L(1)
Walk-In Clientele L(1)
 Personal Services
• Physical Training L(17), L(5)
City of Palo Alto Appendix D, Page 11
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
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PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
10 Major remodeling/
tenant improvement
process, limits
N/A Major Modifications (9.43.030) N/A


For uses permitted by right or by discretionary review.

May be granted relief on no more than 2 of the following. •
•
•
•
•
•
Setbacks
Build-To Line
Parcel Coverage
Height
Ground Floor (Floor-to-Floor) Height
Landscaping. Up to 10% of the required landscaping
 May not be granted for the following.
•
•
•
•
•
Parcel area, width, or depth;
Maximum number of stories;
Minimum or maximum number of required parking spaces;
Residential density; or
Maximum floor area ratio (FAR).
11 Minor change
process,
requirements
Design Enhancement Exception (DEE) Minor Modifications (9.43.020) N/A  Granted to site development and parking and
loading requirements to enhance the design
of commercial development – subject to
architectural review.


For uses permitted by right or by discretionary review.

May be granted relief on no more than 2 of the following. •
•
•
•
•
•
•
•
•
Setbacks
Build-To Line

Design enhancement include minor
architectural elements and design features. Parcel Coverage HeightExceptions limited to minor changes to the
setback, daylight plane, height, lot coverage,
parking lot design and landscaping
Transparency
Parking, Loading, and Circulation
Outdoor Living Area
Bicycle Parking
Parcel Lines
configuration, and additional flexibility in the
required proportion between private and
common open space.
 May not be granted for the following.
•
•
•
•
•
Parcel area, width, or depth;
Maximum number of stories;
Minimum or maximum number of required parking spaces;
Residential density; or
Maximum floor area ratio (FAR).

City of Palo Alto Appendix D, Page 12
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
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PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
12 New signage process, Signs (16.20) Signs (9.61) Signs on Private Property (Chapter 14.68) requirements 


Design review required by Architectural
Review Board.
 Sign Permit application requirements include:  Initial review by Director. Successive reviews:
(1) Staff (2) Architectural and Site Review
Committee and/or Board of Adjustments (3)
Planning Commission (4) City Council
•
•
•
•
Site Plan.

Master sign program for multiple signs as part
of one building project.

Existing Building Elevation.

Proposed Building Elevations.

Sign Illustration.
 Master Sign Program required for all multiple
tenant sites, nonresidential projects and
buildings
Prohibited signs include flashing or moving
signs and roof signs that have not been
grandfathered. 

Sign permit application reviewed by The Secretary of the Architectural Review Board The Planning and Community Development Director can administratively approve sign permits if the type of sign is permitted.

Regulations vary by district.



Signs are prohibited on public property.

Sign Permit not required for certain sign face
changes, wayfinding/informational signs
Specific requirements for fuel price signs,
freestanding signs, wall signs, projecting signs,
and awning signs.
 Prohibited signs include:
•
•
•
•
Animated signs  Prohibited signs: animated, upper floors, emitting, billboards, A-frames (unless
permitted in Downtown Outdoor Display
Permit Guidelines)
Emitting signs
Miscellaneous signs
Paper, Cloth, or Plastic Streamers and Bunting  Digital signs permitted in windows of stores in the downtown commercial district under
certain circumstances


Total sign area regulated by District.

Provisions for portable signs and upper-level signs in the Bayside Conservation District (Third Street Promenade).

City of Palo Alto Appendix D, Page 13
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

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PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
13 Parking strategy -
minimum
requirements?
Parking Regulations for CD Assessment District
(18.52.070)
 No minimum off-street parking
requirements for all land uses within the
Downtown Community Plan area.

Parking, Loading, and Circulation (9.28.40) Off-Street Parking and Loading (Chapter 14.74)  Projects Outside of One-Half Mile of a Major
Transit Stop (minimum parking required)
 Regulations vary for commercial vs.
residential uses in districts which allow
mixed-use
Minimum Off-Street Parking Requirements
 Retail Sales (Maximum parking allowed) Retail Uses • •
•
Retail, less than 2,500 sq. ft.- 1 space per
300 sq. ft.•
•
5,000 SF or less = 1 space per 500 SF
5,001 SF or more = 1 space per 300 SF
 Public Parking District: allows participating
properties not to require parking for new or
changed uses for the first 1.0 of floor area
ratio. Parking required if square footage
exceeds lot area.
•
•
•
Intensive - 1 per 200 sf of gross floor area
Retail, 2,500 – 5,000 sq. ft. - 1 space per
300 sq. ft.

Extensive - 1 per 350 sf of gross floor area
Open Lot - 1 space for each 500 sf of
sales, display, or storage site area. Retail, 5,000 sq. ft. or more - 1 space per 300 sq. ft.Minimum Off-Street Parking Requirements for
Parking Assessment Districts
 If not subject to Public Parking District
regulations the following ratios apply:

Projects Within One-Half Mile of a Major
Transit Stop: no minimum parking required. Retail Uses • •
Office: 1/300
Commercial
Location of Parking for Mixed- Use and
Nonresidential Districts above ground
restricted to Interior Side and Rear Setbacks
and Rooftops except in Neighborhood
Commercial Districts.
•
•
•
Intensive - 1 per 240 sf of gross floor area
Extensive - 1 per 350 sf of gross floor area ▪
▪
Intensive: 1/200
Extensive: 1/500Open Lot - 1 space for each 500 sf of
sales, display, or storage site area. • Bars, cafes, nightclubs, restaurants: 1 per 3 employees and 1 per 3 seats

Provisions for required setbacks, openings, and
parking podium heights for subterranean and
semi-subterranean parking structures. •
•
Assembly/recreation uses: varies
Residential (in mixed-se commercial
district): 1-2 depending on size, and 1
visitor per 4 units
All off-street parking spaces associated with
new nonresidential projects in the
Neighborhood Commercial District require
unbundled parking.

City of Palo Alto Appendix D, Page 14
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

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PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
14 Improvement
Districts
(BID/Promotion/
Economic
Development
Programs/
Departments)
Palo Alto Downtown Business Improvement
District
Downtown Santa Monica, Inc. 

Improvement district mechanism in place for
neighborhoods, however this seems to have
limited applications.





Bayside and Downtown Mall Operations & Maintenance District Central Business District - Business Promotion Assessment Colorado Avenue Property Based Assessment District PBAD Overlay Zone Downtown Santa Monica Property-Based Assessment District (PBAD) Lincoln Boulevard Property-Based Assessment District
Downtown BID feasibility study considered in
2018, but not ultimately funded.

Main Street


Main Street Business Assessment
Main Street Light and Sidewalk Cleaning Assessment Area Montana Avenue
 Montana Avenue Assessment
Pico Boulevard
 Pico Boulevard Assessment
Santa Monica Alliance
The Santa Monica Alliance is a collaborative effort of the City of Santa Monica and the Santa Monica Chamber of Commerce dedicated to nurturing a vibrant, healthy, and profitable business climate in Santa Monica working to attract, retain, and to help grow Santa Monica businesses. 15 Housing - allowed?
Min. max.;


Residential not allowed in Ground Floor (GF)
or Retail (R) Combining districts.
 Residential limited to upper floors on Third
Street Promenade.
 Residential limited to upper floors for parcels
located on Main Street, Montana Avenue, Pico
Boulevard, and Ocean Park Boulevard.

Varies by district:


CD/R3: Permitted use
encouraged? 100% affordable housing projects are exempt from the Retail Preservation Ordinance, but
can’t be within the Ground Floor (GF) and/or
Retail (R) combining districts or on a site
abutting El Camino Real.
 If development is approved above the
base FAR and height, it must be
accompanied by a range of community
benefits from 4 priority categories:

Affordable Housing, Trip Reduction and
Traffic Management, Community Physical
Improvements, and Social and Cultural
Facilities.

CN and CT: Mixed-use residential
conditionally permittedPermitted on all floors for all other parcels. 

CD, CRS, CRS/OAD: Residential above ground
floor conditionally permitted
Not permitted in LC/SPZ
City of Palo Alto Appendix D, Page 15
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

Item 10: Staff Report
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PALO ALTO RETAIL REVITALIZATION STUDY

SANTA MONICA

ZONING STANDARD/

APPROACH
Downtown Community Plan
(Bayside Conservation - 3rd Street Promenade)
Mixed-use and Commercial Districts
(Neighborhood Commercial)# PALO ALTO LOS ALTOS
16 Formula (i.e.

Franchise) retail
regulations
Conditional use permit required for formula retail
business in a R-Combining district - five required
additional findings.

Regulations in place before the pandemic. N/A No limit on chain stores in our downtown area. The City doesn’t have chain stores in the downtown
currently. They would like to attract some through
new redevelopment projects in downtown to help
facilitate some bigger companies and retailers to
come to town which will in turn support the other
businesses.

Restaurant, Limited-Service, and Take-Out
establishments with frontage on the Third Street
Promenade are prohibited if:Formula retail business - one of ten (10) or more business locations in the United States. 

More than 150 locations nationwide; and
Restaurants where orders are placed at a
walk-up window, counter, or machine;
payment prior to food consumption; and
food served with disposable, one-time, or
limited-use wrapping, containers, or
utensils.
 Regulation in place for 5 years and can be
updated or continued after that by council
approval.

Neighborhood Commercial NC
(2) Limitation shall only apply to new construction and alterations to existing buildings that result in a combination or enlargement of tenant spaces: Limited to facilities with no more than 7,500 square feet of floor area and/or 40 linear feet of ground floor street frontage; greater area and/or width requires approval of a Conditional Use Permit. (10) Limited to restaurants with 50 or fewer seats.
(11) Limited to 2 restaurants greater than 5,000 square feet per block along Main Street. A block is defined as both sides of Main Street and the adjacent sides of adjoining side streets. Portions of Main Street to be designated a “block” for the purpose of this Section are as follows:
•
•
•
•
•
•
•
•
•
•
Block 1: South City limits to Marine Street.

Block 2: Marine Street to Pier Avenue.

Block 3: Pier Avenue to Ashland Avenue.

Block 4: Ashland Avenue to Hill.

Block 5: Hill to Ocean Park Boulevard.

Block 6: Ocean Park Boulevard to Hollister Avenue (total of 4 restaurants and bars permitted in this block). Block 7: Hollister Avenue to Strand.

Block 8: Strand to Pacific.

Block 9: Pacific to Bicknell.

Block 10: Bicknell to Bay.

Block 11: Bay to Pico Boulevard.
(12) General markets greater than 15,000 square feet require a Conditional Use Permit. In the Neighborhood Commercial District, establishments shall not exceed 25,000 square feet of floor area. (14) If the commercial use requires a MUP or CUP, an application shall be required in accordance with Chapter 9.41. Even if the commercial use would otherwise be permitted, no such use shall be approved where, given the design or proposed design of the live-work unit, there would be the potential for adverse health impacts from the proposed use on the people residing in the unit. An example of a potential health impact is the potential for food contamination from uses that generate airborne particulates in a unit with an unenclosed kitchen.
(17) Limitation shall only apply to new construction and alterations to existing buildings that result in a combination or enlargement of tenant spaces: No individual tenant space in the NC District shall occupy more than 7,500 square feet of floor area and/or exceed 50 linear feet of ground floor street frontage without the approval of a Conditional Use Permit. (21) Permitted if within buildings existing as of July 24, 2015, subject to the active use requirement set forth in Section 9.11.030(A)(1), except:
• All new construction, including new additions of 50% or more additional square footage to an existing building at any one time, or incrementally, after the effective date of this Ordinance, requires approval of a Conditional Use Permit.

City of Palo Alto Appendix D, Page 16
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

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PALO ALTO RETAIL REVITALIZATION STUDY
•
•
•
In the NC District, ground floor, street-fronting, tenant space occupied by non-media production, support facility uses shall not be changed to an individual office use or media production, support facility use occupying more than 12,500 square feet of floor area and/or exceeding 75 linear feet of street frontage without the approval of a Conditional Use Permit.

In the NC District, no non-medical or non-dental office use tenant space shall be changed to an individual medical or dental office use anywhere in an existing building occupying more than 7,500 square feet of floor area and/or exceeding 50 linear feet of ground floor street frontage without the approval of a Conditional Use Permit.

In the MUBL, MUB, and GC Districts, no non-medical or non-dental office use tenant space shall be changed to an individual medical or dental office use anywhere in an existing building occupying more than 12,500 square feet of floor area and/or exceeding 75 linear feet of ground floor street frontage without approval of a Conditional Use Permit.

Bayside Conservation (BC) Third Street Promenade Area
(1) Limited to upper floors, and on the ground floor where the entire tenant space shall be located at least 25 feet from the front property line, except for residential units shall be limited to upper floors only. (5) Permitted if within buildings existing as of the date this Ordinance effective. Permitted in new buildings, except:
(a) No individual ground floor tenant space shall occupy more than 7,500 square feet of floor area and/or exceed 50 linear feet of ground floor street frontage without a Conditional Use Permit. (b) Ground floor tenant spaces in the Santa Monica Place are not subject to size limitations. (10) Permitted as an ancillary use to support a primary use. (13) If the commercial use requires a MUP or CUP, an application shall be required in accordance with SMMC, Chapter 9.41. Even if the commercial use would otherwise be permitted, no such use shall be approved where, given the design or proposed design of the live-work unit, there would be the potential for adverse health impacts from the proposed use on the people residing in the unit. An example of a potential health impact is the potential for food contamination from users that generate airborne particulates in a unit with an unenclosed kitchen. (15) Limited to the ground floor with frontage along 2nd Court and 3rd Court alleys or to upper floors. (21) No individual Fitness Center tenant space shall exceed 100 linear feet of ground floor street frontage without the approval of a Conditional Use Permit. (22) Restaurant, Limited-Service and Take-Out establishments with frontage on the Third Street Promenade and the following characteristics shall be prohibited:
(a) More than 150 locations nationwide at the time that the application for the establishment is deemed complete by the City; and (b) Characteristics, including, but not limited to, orders placed at a walk-up window, counter, or machine; payment prior to food consumption; and food served with disposable, one-time, or limited-use wrapping, containers, or utensils.

Palo Alto Retail – Zoning Comparison with Santa Monica Summary/Key Takeaways

1. Level of regulation – Zone Districts
a. Santa Monica’s primary retail/commercial areas are Downtown (Third Street Promenade), Main Street, Pico Boulevard, Ocean Park Boulevard, and Montana Ave. b. The Downtown Community Plan provides development standards as well as design guidelines for new development projects. c. Zone districts are very prescriptive but clear in intent and procedure.

2. Overlay Districts
a. Santa Monica has two primary overlay districts but aren’t applicable in the established retail/commercial corridors.

3. Ground floor use regulations
a. Santa Monica allows for a variety of uses other than retail on the Third Street Promenade, however there are specific limitations per use. b. Santa Monica also provides active ground floor use and design provisions for the Mixed Use and Commercial Districts.

4. Change of Use/Intensification process
a. Santa Monica doesn’t prohibit change of use from retail.

5. Retail definition
a. Santa Monica defines Retail Sales as any establishment that allows the retail sale or rental of merchandise.

6. Approval Processes
a. Santa Monica has administrative review and development review (discretionary) and provides the option for variances and waivers from development standards.

7. Approving Authority
a. All Planning related permits are approved by either the Planning and Community Development Director or the Planning Commission, the Director has approval authority in Palo Alto unless appealed in which case the final approval is from City Council in Palo Alto.

City of Palo Alto Appendix D, Page 17
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

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PALO ALTO RETAIL REVITALIZATION STUDY

8. Permit Process
a. New construction (permitted uses and CUP uses)
i. Santa Monica allows by right and conditionally allows a variety of uses in their Downtown and Mixed Use and Commercial Districts. b. Major remodeling/tenant improvement and Minor changes i. Santa Monica allows for relief on up to two development standards. c. New signage
i. Santa Monica’s sign standards are very prescriptive.

9. Parking strategy
a. Santa Monica has parking maximums for Downtown and minimum parking requirements for projects outside of one-half mile of a major transit stop.

10. BID/Promotion/Economic Development Programs / Departments a. Santa Monica has property based assessment districts for all of their commercial/retail corridors.

11. Housing
a. Residential is limited to upper floors along the Third Street Promenade and along the primary retail corridors.

12. Formula retail regulations
a. Restaurants with 150 locations are prohibited on the Third Street Promenade.

City of Palo Alto Appendix D, Page 18
Item 10
Attachment C - Final Retail
Revitalization Report (May 2024)

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Palo Alto Retail Revitalization – Zoning Recommendations August 6, 2024 1 NUMBER ZONING RECOMMENDATION RATIONALE AND JUSTIFICATION START-COMPLETION TIME 1 Amend Parking Regulations (18.52.030)
Amend 18.52.030(d) Additions or Changes of Use to
allow/exempt change of use or conversion of existing floor area to retail or retail-like uses from minimum parking requirements.

Removes a major constraint on changes of use to respond to market demands.

Effectively incentivizes retail and active, popular, retail-supportive uses.

Sites are already developed. Increased parking would come at expense of building area, desired uses, or amenities.

Demand in excess of parking capacity is largely self-regulating in urbanized environments. People will use more distant alternative parking or not patronize the location. Becomes a business decision for the property owner.

Palo Alto City CouncilNovember 18, 2024

Palo Alto City Council
November 18, 2024