City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: Planning and Development Services
Meeting Date: May 19, 2025
Report #:2503-4399
TITLE
788-796 San Antonio Road [25PLN-00062]. Request for Council Prescreening to Rezone the Subject Property from Commercial Services to Planned Community/Planned Home Zoning and to Allow Construction of 168 Rental Units in an Eight-Story Structure on a 43,414-Square-Foot (One-Acre) Site. CEQA Status: Not a Project.
RECOMMENDATION
Staff recommends that Council conduct a prescreening and provide informal comments on the applicant’s request to rezone 788 San Antonio Road from Service Commercial (CS) to a Planned Home Zoning (PHZ).1 Comments provided during the prescreening process are not binding on the City nor the applicant.
EXECUTIVE SUMMARY
This prescreening is a request by the applicant to rezone the subject property, which is currently zoned Service Commercial (CS) to Planned Community (PC)/Planned Home Zoning (PHZ).1 The project site consists of two parcels totaling 43,414 square feet, and includes construction of a 189,884-square-foot building with 168 residential rental units. The site currently has an approved planning entitlement for 102 housing units and 1,803 square feet of commercial space. A location map of the proposed site is included in Attachment A.
In accordance with Palo Alto Municipal Code (PAMC) Section 18.79.030(A), a prescreening review is required for legislative changes, including Rezoning, prior to submittal of a formal application. Prescreenings are intended to solicit early feedback on proposed projects and, like all study sessions, cannot result in any formal action. Since this proposal may return to the City Council as a formal application, Councilmembers should refrain from forming firm opinions supporting or opposing the project.
1 Referred to in this report as "Planned Home Zoning" to emphasize the focus on housing as the benefit to the community. PAMC Section 18.38, which outlines the requirement and process for Planned Community (PC) Zoning, remains the underlying code supporting application of this policy.
Following this prescreening, the applicant may choose to file a formal application to amend the zoning for the site. Planned Community Rezoning applications require an initial review by the Planning and Transportation Commission followed by a formal recommendation from the Architectural Review Board, a formal recommendation from the Planning and Transportation Commission, and Council’s final decision as set forth in PAMC Chapter 18.38.
BACKGROUND
On February 3, 2020, Council unanimously endorsed using the Planned Community (referred to here as Planned Home Zoning (PHZ)) for housing and mixed-use housing development projects to help spur housing production. In exchange for deviation from certain standards as allowed under the rezoning, if approved by Council, a PHZ application must meet two initial qualifying criteria established by the City Council: 1) provide 20% of the total units as affordable housing selected from a prescribed menu of options, and 2) provide housing units that meet or exceed the demand generated by any net new jobs.
Approved Entitlement
In 2020 Council approved a four-story, 86,614-square-foot mixed-used project with 102 condominium dwelling units, 1,803 square feet of commercial, and 102 parking spaces (19PLN- 00079). For informational purposes, Attachment D includes a comparison of the required zone standards, the approved entitlement project, and the proposed project. As detailed in the Project Description letter (Attachment C), the applicant states that the approved entitlement is no longer viable, and the property owners desire to build a denser project.2 The planning entitlement is valid through July 6, 2025, and is entitled to an additional 18-month extension in accordance with Assembly Bill (AB) 2729.
Project Description
The preliminary schematic drawings, included in Attachment D, are conceptual, as is appropriate at this stage of project consideration. As shown in these schematic drawings, the applicant is proposing an approximately 189,884-square-foot multi-family residential building with 168 rental units. The units would be a mix of studio (47), one-bedroom (90), and two- bedroom (31). As part of the project, two parcels currently addressed 788 San Antonio Road and 796 San Antonio Road would be merged. The proposed project would have a lot coverage of 29,467 square feet, consistent with the approved entitlement. The footprint of the building complies with the special setbacks.
The proposed development would be eight stories of residential wrapping two levels of above grade parking, with a proposed height of 85 feet. This does not include the height of the rooftop mechanical equipment, which may add up to 15 feet in height and is not included in the 2 The applicant has repeatedly stated that entitled project’s viability was negatively impacted by an increase in Park Impact Fees in 2022. This is incorrect, as the entitled project has never been subject to Park Impact Fees.
Rather, the entitled project is subject to Parkland Dedication In-Lieu fees, which did not experience a similar increase in recent years.
conceptual plans.
A pedestrian entrance to the building would be provided from San Antonio Road. Access to the parking garage would be provided along Leghorn Street from a single entrance/exit. The above- grade parking structure would include 73 parking spaces (.43 spaces per dwelling unit).
Sheet A0.3 compares the proposed development standards to the approved entitlement. This project provides 66 more units than the prior entitlement, in a building with approximately double the floor area.
Surrounding Uses
This property is located within the boundaries of the proposed San Antonio Road Area Plan, as well as the Housing Incentive Program area. It is adjacent to the approved projects at 800 San Antonio Road (which also recently applied for a new prescreening) and 824 San Antonio Road to the north, as well as a proposed builder’s remedy development at 762 San Antonio Road. In addition to those projects, other nearby zoning and uses include other CS zoned parcels to the north (Enterprise and Hertz car rentals) and south (service station). To the west, across San Antonio Road, are commercial uses within the GM Zone District, and a multi-family residential use within a PC zone (the Greenhouse) at the intersection of Leghorn and San Antonio Road.
The property abuts industrial land uses in the City of Mountain View to the east. Adjacent buildings are generally single-story buildings; however, the approved and pending residential projects are four-to-seven stories tall.
ANALYSIS
Staff will prepare a thorough analysis of the Zoning Code and Comprehensive Plan compliance upon submittal of a formal application, if filed. A review of the conceptual plans, below, summarizes staff’s preliminary review of the proposal and highlights key policy considerations associated with the applicant’s request.
Comprehensive Plan Compliance
The Comprehensive Plan designation is Service Commercial. High-density housing is identified as an allowed use in some locations within this land use designation. These properties are not Housing Element sites; however, the approved project is included as 102 “Entitled Units” in the City’s 2023–2031 Housing Element to demonstrate the adequacy of the Residential Sites Inventory. While the properties contributed to the City’s planned capacity to meet its Sixth Cycle RHNA obligations, no RHNA credit has been claimed, as such credit is only granted upon building permit issuance. The newly submitted application, which includes 66 additional units beyond the previous entitlement, would increase the City's available site capacity buffer.
San Antonio Road Area Plan
The San Antonio Road Area Plan was initiated by the City Council on March 10, 2025, and is scheduled to be completed in late 2027/early 2028. It is currently in the initial stages of community outreach and assessing current conditions. The plan will seek to transform 275.3 acres along the Palo Alto and Mountain View border, creating an opportunity for cohesive mixed-use neighborhoods with safe access to transportation, employment, community services, and recreation. This will be achieved by a holistic approach to the plan area, including examining allowed land uses, increasing housing capacity, and improving mobility and interconnectivity within the plan area, as well as to the San Antonio CalTrain station and city amenities such as the Cubberley Community Center and Baylands Nature Preserve. To allow the plan the maximum flexibility in designing streets, bikeways, sidewalks, and related facilities to meet the demands of existing and new residents and visitors, it is important to maintain the existing special setbacks along San Antonio Road as much as possible during this time prior to plan adoption by the City Council.
Council may consider how the pending area plan may impact this project, and vice versa. Major considerations include transportation improvements and placemaking needs within the easement area and public right of way.
Zoning Compliance
In 2020 as a part of the original planning entitlement, Council amended the Zoning Code to encourage housing within several blocks of San Antonio Road, and modified the Palo Alto Municipal Code (Ordinance 5512) to enable the Housing Incentive Program (HIP) to apply to housing projects within these blocks. This code was updated in April 2024. The HIP incentives include a 2.0 FAR, no maximum density or lot coverage, and reduced parking requirements.
For PHZ rezoning projects, Council has the authority to set the parameters for most development standards, which would be reflected in the tailored ordinance for the new PHZ District. However, for informational purposes, Attachment B compares the development standards under the current CS zone district with HIP with the proposed project in order to assist Council in considerations of how these deviations relate to the proposed public benefits of the project.
In comparison to the existing zoning, the applicant is requesting that the new PHZ zone allow for the following. A full zoning code comparision is in Attachment B:
•A 3.31:1 Floor Area Ratio (FAR) where 2.0 FAR is allowed (as a housing incentive program compliant project);
•85 foot height where 50 feet is allowed;
•100 square feet per unit of private and common useable open space where 150 square feet per unit is required;
•No commercial space, where 1,500 square feet of commercial open space is required; •73 parking spaces where 199 parking spaces are required; •The project currently does not include a loading space, where one is required for multi- family buildings with 50 or more units. The loading space is intended to serve ride share vehicles, delivery vehicles, and moving trucks.
The project is also encouraged to meet the Objective Design Standards in PAMC Chapter 18.24.
Some notable diviations from the Objective Standards include:
•The building massing is not stepped back where it is more than 20 feet taller the average height of an adjacent building. This step back would start within two vertical feet of the height of the adjacent building. The step back would be a minimum depth of six feet along both the façade on the primary building frontage and the facing façade of the adjacent building, and the step shall occur for a minimum of 70% of each façade length.
•Privacy requirements within 30 feet of a residential use (800 San Antonio), including landscape screening, obscured glazing, angled or high silled windows, etc. •The building lacks façade articulation at least 4 feet deep that extends the full height of the building.
•Certain streetscape improvements such as street trees and bike racks may need additional consideration with the San Antonio Road Area Plan.
Special Setback
This project fully complies with the 24-foot San Antonio Road Special Setback and the 25-foot Leghorn Street Special Setback.
Height
The 85-foot proposed height is significantly taller than other buildings in the area, and is taller than the proposed Builder’s Remedy project at 762 San Antonio Road. The project complies with the required CS setbacks, including a proposed 10-foot setback from the 800 San Antonio Road site. A building of this height in this context might be expected to provide stepbacks on the upper floors to transition from the neighboring building height(s).
Floor Area Ratio (FAR)
The proposed FAR of 3.31 is more than the allowed FAR of 2.0 in the CS Zone.
Special Standards
The project would be subject to the special standards for PCs as set forth in PAMC Section
18.38.150, as a result of it now being adjacent to a residential PC. This condition did not exist when the project was previously entitled. The proposed project exceeds the 50-foot height limit, and the code would require, unless modified by the PC ordinance, landscape screening adjacent to 800 San Antonio. Other special requirements for setbacks and daylight plane are met as shown in the conceptual plan.
Multi-Modal Access & Parking
Valley Transit Authority (VTA) bus line 21 and ACE transit orange line are the nearest bus lines to the project site. The San Antonio Road Caltrain Station is located approximately 1.4 miles from the project site. This project has not yet been analyzed for consistency with the City’s Bicycle and Pedestrian Transportation Plan and other transportation policies such as Council’s Local Transportation Impact Analysis Policy adopted on June 15, 2019 (CMR 11256). This analysis would be conducted as a part of any formal application and reviewed by the Office of Transportation.
Parking
The building would include two levels of above-grade parking. Access to the parking garage would be provided from Leghorn Street from a single entrance/exit, consistent with the prior approval. The parking garage would include 73 stalls. Under the Zoning Code, 199 stalls would be required based on the sizes of the housing units, representing a 63% reduction. While the code allows for up to a 30% maximum reduction using combined measures such as a Transit Demand Management Plan, off site parking, or other measures, a 63% reduction would not be allowed under the zoning code without approval of a PHZ application.
Bicycle parking is currently shown within the ground level parking garage, with access from within the garage and outside of the building in the utility corridor. The proposed bike parking area holds 132 bikes, where 199 long term bike spaces is required. The bike room meets or can be designed to meet the requirements of a Restricted-Access Bicycle Enclosure as defined in PAMC 18.54.060(a)(2)(B). Eighteen short term bicycle racks will also be available.
Inclusionary Requirement and Jobs Housing Imbalance
The intent of limiting PHZ projects to residential and residential mixed-use is to address the job/housing imbalance. PHZ projects are required to provide more housing than jobs on site. As this is a 100% residential project, no new jobs would be created.
The project is required to provide 20% of the units at Below Market Rate at an average of 80% AMI in accordance with Council’s requirements for projects seeking to rezone using the PHZ process. The applicant is currently proposing 15% (24 unit) at an unspecified affordability level.
While the entitled project was for condominiums, the proposed project is for rental units. A rental project is not required by code to provide BMR units on site, and could instead pay development impact fees, however the established PHZ requirements include 20% of the 120 units (24 units) be provided onsite as BMR units, per the set formula.
POLICY IMPLICATIONS
Pre-screenings are intended to solicit early feedback on proposed projects and, like all study sessions, cannot result in any formal action. Therefore, informal comments from Councilmembers would not impact policy.
The San Antonio Road Area Plan is also in its initial planning stages. The projects that are pending or approved during the preparation of the plan may impact some of the policies of the plan.
FISCAL/RESOURCE IMPACT
The proposed project would eliminate planned ground-floor retail space, resulting in the loss of potential sales tax revenue. However, the increase in residential units would likely generate higher property tax revenue.
The prescreening and any future formal application are funded by applicant fees. The project would also be subject to impact fees to address its effects on public services and infrastructure.
STAKEHOLDER ENGAGEMENT
The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper and mailed to owners and occupants of property within 600 feet of the subject property at least ten days in advance. Notice of a public hearing for this project was published in the Daily Post on May 9, 2025, which is 10 days in advance of the meeting. Postcard mailing occurred on May 7, 2025, which is 12 days in advance of the meeting.
As of the writing of this report no project-related public comments were received. The prior entitlement also included the HIP Ordinance. At those public hearings, there were comment letters in support, and well as a couple expressing concern about vehicle circulation and traffic on San Antonio Road. These comments noted that San Antonio Road does not have bus service, lacks bike safety features, and is gridlocked at certain times of day.
ENVIRONMENTAL REVIEW
The prescreening is a preliminary review process in which Councilmembers may provide comment, but no formal action will be taken. Therefore, no review under the California Environmental Quality Action (CEQA) is required at this time. A full review in accordance with CEQA would be initiated with the formal filing of a development application.
ATTACHMENTS
Attachment A: Location Map
Attachment B: Zoning Comparison
Attachment C: Applicant’s Description Letter
Attachment D: Project Plans
APPROVED BY:
Jonathan Lait, Planning and Development Services Director