City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: April 20, 2026
Report #:2602-6009
TITLE
FIRST READ: Adopt an Entertainment Zone Ordinance to Establish an Entertainment Zone on California Avenue as Recommended by the Economic Development Ad Hoc Committee; CEQA status – Categorically Exempt.
RECOMMENDATION
The Ad Hoc Economic Development Committee and staff recommends that the City Council adopt an Entertainment Zone Ordinance to Establish an Entertainment Zone on California Avenue.
BACKGROUND AND ANALYSIS
During the March 18 Ad Hoc Economic Development Committee meeting1, the committee reviewed the recommendation presented by staff and unanimously voted the following motion2:
Recommend the City Council adopt an ordinance adding Chapter 9.05 to the Palo Alto Municipal Code to establish and regulate an entertainment zone pursuant to Senate Bill 969 to allow for the sale of certain alcoholic beverages by licensed establishments for consumption outside in the public right of way on the car-free portion of California Avenue subject to a special event permit including Romona Street, and direct staff to implement the following changes:
1. Allow for ongoing activation of entertainment zone by allowing for ongoing permits from business owners
1 March 18th Economic Development Agenda:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=19967 2 March 18th Economic Development Committee Action Minutes:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=19968&compileOutputType =1
2. Provide staff the flexibility to expand the entertainment zone to the closed portion of Ramona Street after outreach of Ramona Street merchants
3. Modify the special event permit if necessary to effectuate this direction The Economic Development Staff Report 2602-5984 5 provides additional context. The proposed recommendations are intended to support the Council’s priority to enhance business vibrancy efforts.
This report implements a portion of the Committee’s recommendation to advance the Entertainment Zone Ordinance on Car-Free California Avenue. Staff will return to the full City Council to consider expanding permissive use to the downtown area, specifically Car-Free Ramona Street, as well as any needed modifications to permitting requirements. This approach supports California Avenue merchants in time for the World Cup and upcoming Cal Ave activations, while allowing additional outreach regarding Car-Free Ramona Street and further review of the Special Event permit.
Due to the unanimous vote, the first reading of the ordinance has been provided on the consent calendar for approval. If approved on consent, the second reading would be taking place May 4, 2026, on the City Council’s consent calendar. The ordinance will become effective 30-days after the second reading, which means the entertainment zone may commence in early June.
FISCAL/RESOURCE IMPACT
Establishment of an Entertainment Zone requires the one-time administrative costs associated with ordinance and administrative guideline development. Staff will recommend that ongoing costs to support Entertainment Zone operation be recovered through permitting fees to the extent necessary. No additional funding is needed at this time.
STAKEHOLDER ENGAGEMENT
Economic Development staff met with representatives from the California Department of Alcoholic Beverage Control, County of Santa Clara Department of Public Health and the City of San Jose Office of Economic Development to gain a comprehensive understanding of how an entertainment zone operates. Staff met multiple times with California Avenue merchants to ensure the Zone supports California Avenue merchants. The proposed hours, boundary, and additional recommended requirements reflect coordination with the merchants. In addition, internal coordination took place with the Police Department to assess operational, and enforcement considerations specific to Palo Alto. Additional outreach with the Ramona Street stakeholders is forthcoming.
5 Economic Development Staff Report 2602-5984:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86868&dbid=0&repo=PaloAlto
ENVIRONMENTAL REVIEW
This action is categorically exempt under California Environmental Quality Act (CEQA) regulations 15305 (minor alterations in land use limitations) and 15323 (normal operations of facilities for public gatherings).
ATTACHMENTS
Attachment A: Entertainment Zone Ordinance
APPROVED BY:
Ed Shikada, City Manager