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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Public Works
Meeting Date: April 14, 2025
Report #:2501-3991
TITLE
Review and Provide Direction on a Preferred Option for a New Parking Structure and Reserved Space for Future Affordable Housing at 375 Hamilton Avenue and Direct Staff to Pursue Preliminary Design and Environmental Review for the New Downtown Parking Garage Capital Project (PE-15007) for the Preferred Option; CEQA Status - Not a Project
RECOMMENDATION
Staff recommends that the City Council review the proposed options and direct staff to proceed with preliminary design and environmental review for Option 1a, a new 274-space parking garage, featuring six levels of above-ground parking with a reserved area to allow for future construction of affordable housing on the site with separate access on Waverley Street.
EXECUTIVE SUMMARY
In 2014, City Council approved an Infrastructure Plan that initially included nine projects, one of which was a new Downtown Parking Garage aimed at supplementing parking capacity as part of the City’s efforts to address parking and traffic congestion. However, following processing of an entitlement application for the new garage and adoption of the environmental analysis, Council placed the project on hold to evaluate further parking management strategies. In December 2023, Council directed staff to resume work on the Downtown Parking Garage project.
Staff recommends building a six-level above-ground parking garage, with designated space for a developer to construct a future affordable housing project on Waverley Street, in alignment with the City’s housing development goals. As part of this recommendation, staff has evaluated design options to balance parking capacity, housing integration, and overall project feasibility.
These options, along with their respective benefits and trade-offs, are being presented for review and consideration to ensure alignment with City priorities and community needs.
BACKGROUND
The Downtown Parking Garage project was initially included in the Council’s 2014 Infrastructure Plan. In 2017-18, Watry Design, Inc. (Watry) conducted the preliminary design and environmental review for a six-level parking structure on the surface lot at Hamilton Avenue and Waverley Street (Lot D). City Council certified the Environmental Impact Report (SCH #
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2017052040) and approved the project’s planning application in February 2019. However, the project was put on hold to allow for further evaluation of alternative parking management strategies.1 In December 2023, Council directed staff to resume work on the Downtown Parking Garage project, integrating it with plans for affordable housing development on the site.2 Program 1.4 of the City’s Housing Element establishes an objective of producing 290 affordable housing units by redeveloping up to six City-owned surface lots during the 2023-2031 planning cycle. In the first such effort, the City recently selected Alta Housing as its preferred partner for the potential redevelopment of surface parking Lot T, at the southwest corner of Lytton Avenue and Kipling Street.
The implementing objective for Program 1.4 states that any future project on a City-owned surface parking lot will include replacement public parking. The majority of the surface lots in downtown, including Lot T, contain approximately 50 spaces. The amount of replacement parking will vary by lot and the configuration of the housing development (i.e., how many on- site public parking spaces will be retained and how many new spaces will be provided for residents). However, between replacement public parking and the additional parking demand generated by the new housing stock, Housing Element Program 1.4 could result in a parking deficit compared to current conditions. The Downtown Parking Garage would provide a significant boost to the City’s stated objective of providing replacement parking as City-owned surface lots are redeveloped with housing.
In December 2024, Council authorized a contract with Watry to provide design, environmental review, and construction administration services for the New Downtown Parking Garage.3 The contract included an initial task to develop preliminary design options that include space for a future residential component to align with the City's housing and economic development goals, in addition to an option that maximized parking.
ANALYSIS
Concept Design Options Overview
Following the award of the contract to Watry, several conceptual options were developed for the Downtown Parking Garage, resulting in three primary options:
Option 1: Waverley Residential
This option reduces the garage's parking footprint, with the assumption that future residential housing will be developed next to the parking structure, facing Waverley Street.
Option 2: No Residential
1 City Council, February 11, 2019; SR #9263
https://portal.laserfiche.com/Portal/DocView.aspx?id=101477&repo=r-704298fc 2 City Council, December 11, 2023; Item #8; SR #2309-2043 https://portal.laserfiche.com/Portal/DocView.aspx?id=69368&repo=r-704298fc 3 City Council, December 2, 2024, SR#2410-3609
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This option excludes a residential component and focuses on maximizing parking within the available footprint.
Option 3: Dogleg Residential
This option reduces the parking footprint of the garage, with the assumption that future residential housing will be located between surrounding buildings, with the garage fronting both Waverley Street and Hamilton Avenue.
Overviews of the conceptual designs and assumed housing unit sizes are provided in Attachment A. The final unit sizes may vary based on the target housing market, with smaller units anticipated in these options. Variations in unit sizes will also impact overall parking demand.
Detailed floor drawings for each option and related alternative options can be found in Attachments B-D, along with a comparative analysis of advantages and disadvantages in Attachment E. Each option reflects a different approach to balancing parking and residential configurations, offering unique advantages and challenges. Table 1 provides a summary of the parking stall and residential unit counts and the benefits and drawbacks under the three options, including the minor differences between sub-options for the options with a residential component.
Table 1: Downtown Parking Garage Option and Sub-Option Benefits and Drawbacks Option Sub-Options
Option 1: Waverley Residential 1a: Separate Pedestrian Circulation - 274 stalls, 15 residential units
- Benefits: Increased stall count, potential for landscaped city space, clear separation between parking and residential.
- Drawbacks: Lower residential unit count, limited unit types, higher costs due to elevators and infrastructure.
1b: Shared Pedestrian Circulation
- 274 stalls, 15 residential units
- Benefits: Increased residential area by removing elevators and stairs. - Drawbacks: Shared pedestrian circulation may reduce residential space quality; code requirements for separation could increase costs and space needs.
1c: With Podium
- 278 stalls, 15 residential units
- Benefits: Slightly more parking.
- Drawbacks: Architectural challenges at Waverley, potential issues if residential development is delayed, openness issues at level 1 requiring further parking separation.
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Option 2: No Residential - 329 stalls, 0 residential units - Benefits: Maximizes parking.
- Drawbacks: No opportunity for residential development on this site.
Option 3: Dogleg Residential 3a: Separate Pedestrian Circulation - 209 stalls, 25 residential units
- Benefits: Maximized residential space and unit diversity, potential tax incentives.
- Drawbacks: Residential units placed along alleyway and behind adjacent buildings; increased costs due to required elevator and separation of building types.
3b: Shared Pedestrian Circulation
- 209 stalls, 25 residential units
- Benefits: Maximized residential area and unit types.
- Drawbacks: Shared pedestrian circulation may lower residential space quality; separation requirements increase costs.
3c: With Podium
- 213 stalls, 25 residential units
- Benefits: Provides additional structure.
- Drawbacks: Residential units placed along alleyway and behind adjacent buildings, significant planning adjustments to optimize the use of the space, openness issues at level 1 requiring planning adjustments.
Parking and Residential Capacity Comparison
Table 2 shows the calculations for the net parking added by each option. Note the housing demand parking stalls are assumed based on the typical unit sizes.
Table 2: Net Parking Added by Each Option
Option 1a Option 1b Option 1c Option 2 Option 3a Option 3b Option 3c Total Stalls in Garage 274 274 278 329 209 209 216
Existing Lot D Replacement -86 -86 -86 -86 -86 -86 -86
Estimated Housing Parking
Demand -25 -20 -22 0 -50 -40 -45
Net Added Public Parking
Stalls 163 168 167 243 73 83 85
In January 2025, Council supported a proposal to develop a seven-story affordable housing project with approximately 80 apartments on Lot T, located at Lytton Avenue and Kipling Street.4 To offset the 52 parking spaces displaced by this development, the Council has considered utilizing the new Downtown Parking Garage as a replacement. 4 City Council, January 21, 2025, SR#2409-3513
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Table 3 shows the calculations for the net parking added by each option when the loss of surface parking at Lot T is considered.
Fees collected from developers under the parking in-lieu fee program represent a significant funding source for the project. As such, both the number of stalls and their availability as public parking should reflect the expectation of public availability established under this funding program.
In March 2025, staff from Public Works Engineering and Watry met with Alta Housing staff to review the conceptual residential design options. Alta Housing staff expressed a strong preference for Option 1a Waverley Residential (Separate Circulation). Alta Housing staff highlighted the natural light, more prominent entrance, and overall improved livability of this option. They noted that a shared elevator in Option 1b would pose security concerns due to increased foot traffic from the garage. Option 1a's design also addresses potential financing challenges, which were a concern with the podium options. Additionally, the dogleg residential options were not favored due to issues with property management oversight and the suboptimal location of residential units along the alleyway. Alta Housing further confirmed that unit sizes and parking demand will vary based on the target tenant market.
Preliminary Rough Order of Magnitude (ROM) construction cost estimates for these garage options range from $20-24 million, with Option 2 being the most costly and Options 3a and b being the least. These preliminary cost estimates have not been thoroughly reviewed by staff and do not include a number of other costs that would ultimately be part of a full project budget. They are provided here for Council’s understanding of the relative differences between the options and sub-options.
Table 4: Construction Cost of Each Option for the Garage Portion Only Option 1a Option 1b Option 1c Option 2 Option 3a Option 3b Option 3c Construction Cost $23,078,776 $23,146,692 $24,030,137 $24,069,177 $20,642,976 $20,642,976 $22,549,314 Cost per Stall $84,229 $84,477 $86,439 $73,159 $98,770 $98,770 $104,395 The proposed parking garage supports the City’s broader downtown goals by improving parking availability, supporting local businesses, and enhancing mobility. By incorporating designated space for a future affordable housing development, the Waverley Residential and Dogleg Residential options also align with the City’s housing development objectives. As the City moves forward with affordable housing initiatives, the demand for replacement public parking will Table 3: Net Parking Added by Each Option Considering Parking Lot T Option 1a Option 1b Option 1c Option 2 Option 3a Option 3b Option 3c Added Public Parking Stalls
(From Table 2) 163 168 167 243 73 83 85
Lot T Replacement -52 -52 -52 -52 -52 -52 -52
Net Added Public Parking
Stalls 111 116 115 191 21 31 33
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increase. By the time the housing is constructed, the additional parking capacity provided by the garage will be essential to offset the public parking lost to redevelopment. This proactive approach ensures that access to downtown businesses and services remains convenient while advancing key priorities in housing and urban development.
Staff recommends Option 1a Waverley Residential (Separate Circulation) as the preferred option. This option offers the best balance of parking capacity and residential development. It includes 274 stalls, with the added benefit of creating landscaped public space prior to construction of the residential phase. The separation of parking and residential areas enhances the development's structure and clarity. Additionally, the flexibility in residential floor height allows for varied unit types, making the design more adaptable.
Zoning Consistency
The project site is zoned public facility (PF). Allowed uses within this zone district include public facilities and uses owned or leased by the City of Palo Alto. Both the parking garage and any future affordable housing on the site, so long as the site continues to be owned or leased by the City, would be permitted.
The proposed parking garage does not comply with all of the relevant development standards for the Public Facilities (PF) Zone District, including lot coverage, floor area ratio, height, and setbacks. However, PAMC Section 18.28.060(e) allows Council to amend any of the development standards for the PF Zone District for a public parking garage, and appurtenant structures, where the parking facility is the principal use and is owned or leased and operated or used by the City of Palo Alto, within the Downtown business district, in order to achieve community objectives. The zoning development standards for the proposed parking garage and any housing component, so long as the parking structure remains the principal use of the site, may therefore be modified at the discretion of Council. Council’s feedback on the anticipated exceptions will help inform the preliminary design.
Following preparation of a preliminary design, Public Works Engineering will file an application for Architectural Review, which will be brought forth to the ARB for a recommendation and Council for decision.
FISCAL/RESOURCE IMPACT
The existing contract with Watry covers the next phase of the project design and environmental review work. Funding for this continued design is available in the Fiscal Year 2025 Adopted Capital Budget for the New Downtown Parking Garage project (PE-15007). This project will require additional funding sources in addition to the $17.6 million project budget for the construction of the garage.
Watry will provide updated construction cost estimates at the completion of the schematic design, design development, and construction document phases. Staff will use this information to prepare and analyze funding options for the construction phase of the project, which will be presented to the Council in the future.
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STAKEHOLDER ENGAGEMENT
Staff will engage stakeholders for feedback through the design development process.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA). Council direction on a preferred option does not constitute approval of the New Downtown Parking Garage project. The scope of work for the design contract includes preparation of an environmental review document. The environmental review will be based off the Environmental Impact Report (EIR) for the Downtown Parking Garage, which was certified by the Council on February 11, 2019.5
ATTACHMENTS
Attachment A: Option Overview
Attachment B: Option 1 - Waverley Residential
Attachment C: Option 2 - No Residential
Attachment D: Option 3 - Dogleg Residential
Attachment E: Option Appraisal
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
5 Resolution No. 9818, February 11, 2019
https://portal.laserfiche.com/Portal/DocView.aspx?id=18286&repo=r-704298fc