Agenda packet — Palo Alto City Council, May 18, 2026 (part 1 of 2)

CITY COUNCIL
Regular Meeting
Monday, May 18, 2026
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED
Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. The meeting will be broadcast on Cable TV Channel 76, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org.

VIRTUAL PARTICIPATION
CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900-6833

PUBLIC COMMENTS
General Public Comment for items not on the agenda will be accepted in person for up to three minutes or an amount of time determined by the Chair. General public comment will be heard for 30 minutes. Additional public comments, if any, will be heard at the end of the agenda.

Public comments for agendized items will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. Requests to speak will be taken until 5 minutes after the staff’s presentation or as determined by the Chair. Written public comments can be submitted in advance to [email protected] and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line. Multiple individuals who wish to speak on the same item may designate a spokesperson. Spokespersons must be representing five or more verified individuals who are present either in person or via zoom. Spokespeople will be allowed up to 10 minutes, at the discretion of the presiding officer. Speaking time may be reduced if the presiding officer reduces the speaking time for individual speakers.

PowerPoints, videos, or other media to be presented during public comment are accepted only by email to [email protected] at least 24 hours prior to the meeting. Once received, the Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted. Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that:
(1) sticks, posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not create a facility, fire, or safety hazard; and (3) persons with such items remain seated when displaying them and must not raise the items above shoulder level, obstruct the view or passage of other attendees, or otherwise disturb the business of the meeting.

TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. 1 May 18, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.

CALL TO ORDER

SPECIAL ORDERS OF THE DAY (5:30 - 5:40 PM)

1. Recognizing May as Asian American, Native Hawaiian, and Pacific Islander (AANHPI) Heritage Month and May 10, 2026 as AANHPI Mental Health Awareness Day

AGENDA CHANGES, ADDITIONS AND DELETIONS

PUBLIC COMMENT (5:40 - 6:10 PM)
Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (6:10 - 6:20 PM) Members of the public may not speak to the item(s).

CONSENT CALENDAR (6:20 - 6:25 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

2. Approval of Minutes from May 4, 2026 Meeting

3. 2026 Council Priorities & Objectives Q1 Update

4. Adoption of a Resolution Vacating a Portion of a Public Utility Easement at 590 Maybell Avenue; CEQA Status – Exempt under Cal. Code Regs. Title 14, Section 15305

5. Adoption of a Resolution for Senate Bill 1, the Road Repair and Accountability Act, for Fiscal Year 2027, Providing the Project List for the Street Maintenance Project, Capital Improvement Program Project PE-86070; CEQA Status – Not a Project

6. Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto Business Improvement District (BID) Assessment for Fiscal Year 2027; CEQA status – not a project.

7. Adopt a Resolution Approving Amendment Number 1 to California Board of State and Community Corrections Agreement Number BSCC 1164-23 for Organized Retail Theft Grant to Extend the Term One Year with No Change to the Not-To-Exceed Total; CEQA status—not a project.

2 May 18, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

8. Adoption of a Resolution Authorizing the Borrowing of Funds on an Interim Basis for Improvements to the City's Regional Water Quality Control Plant and Authorizing the Execution and Delivery of a Revolving Credit Agreement and Related Note; CEQA Status - Not a Project

Item Removed Off Agenda

9. Approval of Construction Contract No. C26197232 with Selway Construction, Inc. in the Amount Not-to of $261,600 and Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders for Related Additional but Unforeseen Work that may Develop During the Project Up to a Not-to-Exceed Amount of $26,160 for Site Work for a New Modular Restroom Building at Mitchell Park for the Park Restroom Installation Capital Improvement Project (PG-19000); CEQA status – Exempt Under CEQA Guidelines Section 15303

10. Approval of Construction Contract No. C26197180 with Casey Construction, Inc. in the Not-to-Exceed Amount of $544,556 and Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders for Related Additional but Unforeseen Work that May Develop During the Project Up to a Not-to-Exceed Amount of $54,456 for the Storm Drainage System Replacement and Rehabilitation Project (SD- 06101); CEQA status – Exempt under CEQA Guidelines Section 15301(c)

11. Approve Amendment Number 2 to Contract C3780 with Stanford University, to Extend the Contract Term to September 30, 2027 for Public Safety Dispatch Services Provided to the Main Campus of Stanford University; CEQA status—not a project.

12. PUBLIC HEARING / QUASI-JUDICIAL. 4103 Old Trace Road [25PLN-00298]: Request for Approval of a Tentative Map to Allow for the Subdivision of a Vacant 1.02-Acre Lot to Create Nine Residential Lots and One Private Street to Facilitate Construction of Nine New Single-Family Residences and Seven Junior Accessory Dwelling Units (25PLN- 00296). CEQA Status: Exempt Pursuant to Assembly Bill 130 (Public Resources Code Section 21080.66). Zone District: RE (Residential Estate) Supplemental Report added
CITY MANAGER COMMENTS (6:25 - 6:35 PM)

BREAK (15 MINUTES TO BE TAKEN AFTER ITEM 13)

ACTION ITEMS (Item 13: 6:50 - 7:50 PM, Item 14: 7:50 - 8:50 PM; Item 15: 8:50 - 9:50 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

3 May 18, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

13. Cubberley Project: Adopt the Cubberley Conceptual Master Plan and a Resolution Adopting the CEQA Mitigated Negative Declaration and Mitigated Monitoring and Reporting Program; Receive the Fourth Round of Community Polling Results; and Provide Direction on Next Steps for a Possible Sales Tax Ballot Measure. CEQA Status - A Draft Initial Study/Mitigated Negative Declaration (IS-MND) Report Circulated for Public Review from March 2, 2026, to April 1, 2026. The City published the Final IS-MND on April 9, 2026.

14. Update Regarding the Builder’s Remedy Project at 156 California Avenue and Consideration of Adding Lot B (APN 124-28-003) Associated with the Development to the City’s Housing Element Sites Inventory.

15. FIRST READING: Adoption of an Ordinance to Amend Various Sections of Title 16 (Building Regulations) and Title 18 (Zoning) of the Palo Alto Municipal Code to Implement Retail Vitality Policies in the Comprehensive Plan, including changes to the Zoning Map for parcels zoned CN(GF). CEQA Status: The Ordinance is Consistent with and Represents Implementation of Adopted Policies in the Comprehensive Plan, for Which an Environmental Impact Report (Comprehensive Plan EIR) was Certified on February 5, 2016.

ADJOURNMENT

INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action or discussion during this meeting’s agenda.

Investment Activity Report for the Third Quarter (January – March), Fiscal Year 2026.

CEQA Status – Not a Project.

OTHER INFORMATION
Standing Committee Meetings this week

Finance Committee May 19, 2026
Economic Development Committee May 20, 2026 CANCELED

Public Comment Letters
Schedule of Meetings

4 May 18, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

SUPPLEMENTAL / AMENDED AGENDA ITEMS

Item Removed Off Agenda

5 May 18, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

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6 May 18, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

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7 May 18, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
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City Council
Staff Report
Report Type: SPECIAL ORDERS OF THE DAY
Lead Department: City Clerk
Meeting Date: May 18, 2026
Report #:2605-6336
TITLE
Recognizing May as Asian American, Native Hawaiian, and Pacific Islander (AANHPI) Heritage Month and May 10, 2026 as AANHPI Mental Health Awareness Day

ATTACHMENTS
Attachment A: Recognizing May as Asian American, Native Hawaiian, and Pacific Islander (AANHPI) Heritage Month and May 10, 2026 as AANHPI Mental Health Awareness Day APPROVED BY:

Mahealani Ah Yun, City Clerk
Item 1
Item 1 Staff Report

Item 1: Staff Report
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RECOGNIZING MAY AS ASIAN AMERICAN, NATIVE HAWAIIAN, AND PACIFIC ISLANDER (AANHPI) HERITAGE MONTH AND MAY 10, 2026 AS AANHPI MENTAL

HEALTH AWARENESS DAY

WHEREAS, Asian American, Native Hawaiian, and Pacific Islander (AANHPI) Herita ge Month is observed during the month of May to recognize the contributions and influence of AANHPI communities on the history, culture, and achievements of the United States, and to raise awareness of important issues affecting these communities, including mental health; and
WHEREAS, the month of May was selected to commemorate the arrival of the first Japanese immigrants to the United States on May 7, 1843, and to mark the anniversary of the completion of the transcontinental railroad on May 10, 1869, the majority of the workers being Chinese immigrants, including but not limited to Asian American, Native Hawaiian, and Pacific Islander communities; and
WHEREAS, citizens of Asian American, Native Hawaiian, and Pacific Islander descent represent more than 35 percent of Palo Alto’s population and are part of the more than 6 million AANHPI individuals residing in California, making these communities an invaluable part of the rich fabric of our City and State; and WHEREAS, for more than 200 years, AANHPI individuals have lived and worked in the United States and have made significant contributions across all sectors, including the economy, culture, education, government, the arts, law enforcement, the military, literature, s cience, and technology, despite institutional and systemic injustices that have been designed to silence and cover up these achievements and contributions; and WHEREAS, May 10, 2026, is recognized as AANHPI Mental Health Awareness Day, highlighting the need to increase awareness of mental health, reduce stigma associated with seeking care, and improve access to culturally and linguistically responsive services within AANHPI communities, which continue to experience some of the lowest rates of mental health service utilization among all racial and ethnic groups, due in part to stigma as well as cultural and linguistic barriers faced by individuals, families, and communities; and WHEREAS, raising awareness about the mental health of all individuals, and this month, especially of Asian American, Native Hawaiian, and Pacific Islander communities past and present, encourages professional interest in health and human services careers and fosters a diversified workforce that reflects the community.

NOW, THEREFORE I, Vicki Veenker, Mayor of the City of Palo Alto, on behalf of the entire City Council, do hereby proclaim May as Asian American, Native Hawaiian, and Pacific Islander Heritage Month, and recognize May 10, 2026 as AANHPI Mental Health Awareness Day, and encourage all community members to celebrate the contributions of Asian American, Native Hawaiian, and Pacific Islander communities, and reaffirm the City of Palo Alto’s commitment to fostering an inclusive community, supporting culturally responsive mental health resources and well-being for all residents.

Presented: May 11, 2026

______________________________
Vicki Veenker
Mayor

Proclamation
Item 1
Attachment A - Recognizing
May as Asian American,
Native Hawaiian, and Pacific
Islander (AANHPI) Heritage
Month and May 10, 2026 as
AANHPI Mental Health
Awareness Day

Item 1: Staff Report
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: May 18, 2026
Report #:2605-6343
TITLE
Approval of Minutes from May 4, 2026 Meeting

RECOMMENDATION
Staff recommends that the City Council review and approve the minutes.

ATTACHMENTS
Attachment A: May 4, 2026 Draft Action Minutes
APPROVED BY:

Mahealani Ah Yun, City Clerk
Item 2
Item 2 Staff Report

Item 2: Staff Report
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CITY COUNCIL

DRAFT ACTION MINUTES

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Regular Meeting
May 4, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M.

Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely:

Absent:

Special Orders of the Day

1. Proclamation of May 2026 as Affordable Housing Month. CEQA Status: Not a project.

NO ACTION

Closed Session

2. CONFERENCE WITH CITY ATTORNEY-POTENTIAL LITIGATION
Subject: Potential litigation regarding 156 North California Avenue, as set forth in letter(s) from Holland & Knight LLP dated September 3, 2025 Authority: Government Code Section 54956.9(d)(2)
Number of potential cases: 1, as Defendant

3. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Authority: Government Code Section 54956.8.

Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators:
(Ed Shikada, Kiely Nose, Kristen O'Kane, Lauren Lai)
Subject of Negotiations: Purchase, Exchange, and/or Lease, Price and Terms of Payment MOTION: Councilmember Lythcott-Haims moved, seconded by Councilmember Reckdahl to go into Closed Session.

MOTION PASSED: 7-0
Council went into Closed Session at 5:45 P.M.

Item 2
Attachment A - May 4, 2026
Draft Action Minutes

Item 2: Staff Report
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DRAFT ACTION MINUTES

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City Council Meeting
Draft Action Minutes: 05/04/2026
Council returned from Closed Session at 7:45 P.M.

No reportable action.

Agenda Changes, Additions and Deletions

Public Comment

Council Member Questions, Comments and Announcements

Study Session

4. City Manager Transmittal of the Fiscal Year 2027 Proposed Operating and Capital Budgets

NO ACTION

Consent Calendar
MOTION: Council member Reckdahl moved, seconded by Council member Lythcott-Haims to approve Agenda Item Numbers 5-13.

MOTION PASSED: 7-0

5. Approval of Minutes from April 13, April 15, and April 20, 2026 Meeting

6. Adopt a Resolution Making Required Findings in Support of the City’s Application for FY 2026/27 Transportation Development Act (TDA) Article 3 Funds in the Amount of $326,590 for the South Palo Alto Bikeways Demonstration Project and Authorize Staff to Submit the Application; CEQA status - not a project.

7. Approval of Contract Amendment Number 1 to Contract Number S23187797 with Stephen Galloway Studio, LLC to Extend the Contract Term Through April 1, 2029, for Concept Design Development, Fabrication and Delivery to the Site and Placement of Artwork; CEQA Status – categorically exempt.

Item 2
Attachment A - May 4, 2026
Draft Action Minutes

Item 2: Staff Report
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DRAFT ACTION MINUTES

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City Council Meeting
Draft Action Minutes: 05/04/2026

8. Approve Supplement No. 2 to Master Funding Agreement with the Metropolitan Transportation Commission for the City to receive an Amount Not to Exceed $1 Million for the Palo Alto Transit Center Quarry Road Connection; CEQA status - statutorily exempt.

9. Approval of Professional Services Contract Number C26196239 with Triple HS, INC (dba H. T. Harvey & Associates), in an Amount Not to Exceed of $399,239 Over a 5 -year Term for Annual Wetland Mitigation Monitoring, Reporting, and Improvements, and Approval of a Budget Amendment in the Capital Improvement Fund; CEQA Status - This project is part of the Mitigation Monitoring and Reporting Program approved on February 3, 2014 as part of the Golf Course Reconfiguration EIR.

10. Approval of Contract Amendment No. 3 to Contract Number C21179340 with Baker Tilly US, LLP to Extend Term to June 30, 2028 with no increase to the not to exceed amount based on CAO Committee Recommendation; CEQA Status – Not a Project.

11. Approval of Second Amendment to the Lease Between the City of Palo Alto and Community Skating, Inc. for the Tennis Facility at 3005 Middlefield Road, Extending the Term to January 1, 2040; CEQA Status – Categorically Exempt

12. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter

9.73 (City Policy Against Arbitrary Discrimination) of Title 9 (Public Peace, Morals and Safety) of the Palo Alto Municipal Code to Add Sections 9.73.050 (Local CEDAW Principles) and 9.73.060 (Private Right of Action) and Amend Associated Sections (FIRST READING: March 23, 2026, PASSED: 7-0)

13. SECOND READING: Ordinance of the Council of the City of Palo Alto Creating New PAMC Chapter 9.05 (Entertainment Zones) and Establishing an Entertainment Zone on a Portion of California Avenue (FIRST READING: April 20, 2026; PASSED: 7-0)

City Manager Comments
Ed Shikada, City Manager

Action Items
Agenda Item Number 15 heard out of order.

14. Receive Update and Provide Direction to Staff on the Implementation of Senate Bill 79 (SB 79) and Work Related to the Downtown Housing Plan. CEQA Status: Exempt Under CEQA Guidelines Section 15262.

Item 2
Attachment A - May 4, 2026
Draft Action Minutes

Item 2: Staff Report
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DRAFT ACTION MINUTES

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City Council Meeting
Draft Action Minutes: 05/04/2026
Agenda Item Number 15 not heard and deferred to a date uncertain.

15. PUBLIC HEARING: Report on City Vacancies and Recruitment Efforts, Pursuant to Assembly Bill 2561; CEQA Status – Not a Project.

NO ACTION

Adjournment: The meeting was adjourned at 10:17 P.M.

ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)

2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section

2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.

Item 2
Attachment A - May 4, 2026
Draft Action Minutes

Item 2: Staff Report
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: May 18, 2026
Report #:2604-6258
TITLE
2026 Council Priorities & Objectives Q1 Update

RECOMMENDATION
That the City Council receive the 2026 Council Priority & Objectives Q1 Update and approve Objective 4.2.4.

BACKGROUND
On March 9,1 2026, the City Council discussed and approved the 2026 Priority Objectives, following its January 24, 2026,2 retreat in which the City Council adopted the following Priorities:
Achieve Near-Term Housing Milestones
Cubberley Acquisition and Renovation Funding
Enhance Business Vibrancy
Government Efficiency
A total of 43 objectives within each priority were discussed, with several objectives being supported by the revised and adopted Council Values:

1. Vibrant Community

2. Fiscal Responsibility

3. Accountable Governance

4. Strategic Innovation
1 March 9, 2026 City Council Meeting:
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=11219&meetingTemplateType=2&com piledMeetingDocumentId=18769
2 January 24, 2026 City Council Meeting:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18520 Item 3
Item 3 Staff Report

Item 3: Staff Report
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5. Shared Prosperity and Housing Leadership

6. Climate Leadership and Environmental Stewardship

7. Community Well-Being & Belonging
The City Council provided feedback on the objectives and requested that staff return with modifications to Objective 36 (renumbered as Objective 4.2.4) on the update to the City’s Traffic Calming Policy. This report provides a Q1 update on objective milestones and estimated completion dates.

ANALYSIS
This report focuses on Group 1 objectives, which are categorized as mission-critical, and must be achieved to meet legal, operational, safety, or strategic requirements. Objectives in this group require City Council engagement. Progress on Council Priorities is measured by the accomplishments of its subset objectives and reported on a calendar quarterly basis. Calendar Q1 spans the months January through March 2026. A summary table of all 43 objectives is listed in Attachment A, including an estimated completion date, which is also measured in calendar quarters. A narrative on each objective update is found in Attachment B, it includes:

Project Description- Describes overall project goals and outcomes. 2026 Milestone- Describes activities and outcomes planned for the calendar year as some projects are multi-year in length and are broken up into phases.

Project Status-
Completed - Project as described in the 2026 milestone is overall complete, though some minor/non-substantive follow-up may still be needed. On-Track- Project is expected to be completed as specified. Any changes in project scope or timing due to Council direction or action will remain labeled On Track with the new estimated timeframe.
Behind - The project estimated completion date may be delayed due to operational issues, capacity constraints (such as vacancies in staffing), or project has not started by the estimated completion date.
Hold/Dropped - Project is not actively in progress or will no longer move forward in the current year. Reasons may include the issue is no longer relevant, operational constraints, or is stalled/dropped due to City Council direction.

Estimated Completion - The calendar quarter in which the objective is expected to be completed.

Department Lead - Identifies the lead department and project manager responsible for coordinating progress.

Quarterly Update - a brief progress update on the project describes work reflected in the respective calendar quarter. Any delays or project issues will be reflected in this section.

Item 3
Item 3 Staff Report

Item 3: Staff Report
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To date, of the 43 Council objectives supporting Council priorities, in the first quarter, a total of 2 (5%) have been completed, 41 (95%) are on track with new Council direction, no objectives are behind schedule, and none are on hold.

Traffic Calming Policy Objective
During its March 9 meeting, Council provided feedback that staff return with modifications to Objective 36, renumbered as Objective 4.2.4, on the update to the City’s Traffic Calming Policy. Explore options to streamline delivery of low-cost, high-value (aka quick build) traffic safety improvements and update the City’s Traffic Calming Policy to align with Safety Action Plan, Bicycle/Pedestrian Transportation Plan (BPTP) and Safe Routes to School.

Council requested that staff provide more momentum this year on outcomes, as the objective as written focused too much on reviewing and exploring options. The revised language now reads:

Objective 4.2.4
Streamline delivery of low-cost, high-value (aka quick build) traffic safety improvements including updating the City's Traffic Calming Policy in alignment with the City's Safety Action Plan, Bicycle/Pedestrian Transportation Plan (BPTP), Safe Routes to School and California's Daylighting Law (AB413).
2026 Milestone:

By Q4, Council review of Draft Update to Traffic Calming Policy and curb painting for corner daylighting at 25 intersections along school routes.

An update to the revised objective is included in Attachment B.

FISCAL/RESOURCE IMPACT
City Council approval of Priority Objectives does not have an immediate fiscal impact; however, resources will need to be allocated to implement City Council Priorities. Opportunities to allocate resources to projects include the FY 2027 annual budget process, with adoption scheduled for June 2026. In addition, the City Council may amend the budget throughout the year.

STAKEHOLDER ENGAGEMENT
On March 9, 2026, Council approved the community engagement strategies associated with the 2026 Priorities and Objectives. There are various levels of community engagement and communication strategies to support each project, including internal coordination among City departments. There is a dedicated website for the 2026 and prior years Council Priorities, as well as a dashboard that summarizes progress achieving priorities for the year at www.paloalto.gov/councilpriorities

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ENVIRONMENTAL REVIEW
The Council informational report on this item is not a project as defined by CEQA because the Council review of 2026 Priority Objectives is continuing administrative or maintenance activity.

CEQA Guidelines section 15378 (b)(2).

ATTACHMENTS
Attachment A: 2026 Council Priorities and Objectives Summary Table Attachment B: 2026 Council Priorities and Objectives Q1 Update Summary APPROVED BY:

Ed Shikada, City Manager
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ATTACHMENT A
#
ANPHM
CA&RF
EBV
GE

1.1.1 x
Adopt an updated Accessory Dwelling Unit (ADU) ordinance to comply with State law and implement additional policy alternatives, including increased allowable square footage and condominium conversions, consistent with City Council direction (05.15.23). x 1

1.1.2 x
Develop and adopt Objective Development Standards for the South of Forest Area Coordinated Area Plan (SOFA), and present plan amendment options to replace subjective standards with objective standards for Planning and Transportation Commission and City Council consideration, consistent with Housing Element Program 3.7. Explore alignment opportunities with SB 79 work and Downtown Housing Plan. x 1

1.1.3 x
Codify the R1/SB 9 interim ordinance by establishing objective development standards and increasing the maximum floor area for SB 9 units from 800 to 1,200 square feet, consistent with Housing Element Program 6.3A, and evaluate implications for R1 and SB 9 projects within the City’s Individual Review Program. x 1

1.1.4 x
Conduct and complete a study of short‐term rentals and adopt housing and neighborhood preservation regulations that prioritize long‐term occupancy, consistent with Housing Element Programs 4.2D–E (anticipates ordinance adoption by July, 2027). x 1

1.1.5 x
Adopt zoning incentives and development standards that support innovative housing typologies, including micro‐units, intergenerational housing, housing for aging adults, students, and lower‐income households, consistent with Housing Element Program

6.5B. x 1

1.2.1 x
Select a preferred alternative for the San Antonio Road Area Plan land use and transportation alternatives based on community input and City Council direction. x 1

1.2.2 x
Receive Council direction on optional SB 79 implementation strategies and, as appropriate, present scenario Downtown Housing Plan scenarios to Council and initiate environmental review. x 1

1.3.1 x
Partner with Santa Clara County Housing Authority to achieve construction timeline milestones for the Palo Alto Homekey project (which will provide transitional housing and services for unhoused residents). x 1

1.3.2 x
Issue Requests for Information or Requests for Proposals (RFI/P) to develop approximately 218 affordable or workforce housing units on City‐owned surface parking lots. (Housing Element Program 1.4A). x 1
Achieve Near‐Term Priority Housing Milestones (ANTPHM)‐ 15 Total

1.1 Housing Code and Zoning Updates

1.2 Area Plans and Long‐Range Housing Strategy

1.3 Affordable, Supportive, and Publicly Enabled Housing Delivery 2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
Priority
CC Value #
OBJECTIVES (43 Total)
Sorted by:

Council Priority, Group #, estimated completion date, and finally by additional resource needs.

Q1
Q2
Q3
Q4
Group #
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#
ANPHM
CA&RF
EBV
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2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
Priority
CC Value #
OBJECTIVES (43 Total)
Sorted by:

Council Priority, Group #, estimated completion date, and finally by additional resource needs.

Q1
Q2
Q3
Q4
Group #

1.4.1 x
Receive a Prohousing Designation from the California Department of Housing and Community Development in order to enhance the City's competitive advantage for qualifying grants. x 1

1.4.2 x
Identify and designate additional Housing Element site capacity to maintain RHNA compliance and buffer by evaluating new opportunity sites to address anticipated capacity shortfalls in 2026, including impacts from development on faith‐based sites and downtown parking lots. x 1

1.5.1 x
Update and adopt development impact fees for public safety, government facilities, housing, transportation, parks, and community services, including completion of nexus and feasibility studies and establishment of fee waivers for low‐income inclusionary units. (Housing Element Programs 2.1B; 3.1B & C). x 1

1.5.2 x
Evaluate opportunities that make multi‐family housing an attractive alternative to commercial office development, consistent with Housing Element Program 3.9A. x 1

1.6.1 x
Implement Oversized Vehicles (OSV) Phase 1 work, including options for RV buyback and storage, new recruiting safe parking and enforcement/signage relating to detached/inoperable vehicles prohibition. x 1

1.6.2 x
Initiate and advance Oversized Vehicles Phase 2 work, including oversized vehicle permit pilot (e.g., collecting count data, designing permit process & terms, conducting informal RFI/Q to operate pilot). x 1

2.1.1 Continue to advance the Cubberley Project focusing on anticipated purchase of 7 acres from PAUSD and community polling for potential placement of a measure on the November 2026 ballot and other funding source(s). x 1

2.1.2 Continue to explore and develop partnership opportunities with community nonprofit organizations to advance certain elements of the master concept plan through a combination of city and private investments. x 1

1.5 Housing Incentives, Fees, and Market‐Activation Tools

3.1 Business Development and Vitality

1.6 Unhoused Resident and Oversized Vehicle Housing Response Cubberley Acquisition and Renovation Funding (CA&RF)‐ 2 Total

2.1 Strategies to Support Cubberley Acquisition and Renovation Enhance Business Vibrancy (EBV)‐ 5 Total

1.4 State Compliance, Housing Capacity, and Grant Competitiveness Item 3
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ANPHM
CA&RF
EBV
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2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
Priority
CC Value #
OBJECTIVES (43 Total)
Sorted by:

Council Priority, Group #, estimated completion date, and finally by additional resource needs.

Q1
Q2
Q3
Q4
Group #

3.1.1 x
Develop a formal business retention/expansion/attraction program focused on supporting existing Palo Alto businesses seeking to diversify the local economy, increase the tax base that pays for essential public services, job creation, support placemaking and special events, and enhance the Palo Alto brand in innovation and entrepreneurship globally. x 1

3.1.2 x
Adopt an ordinance expanding retail opportunities and strengthening retail resiliency, including refining retail and retail‐like definitions and updating the retail preservation ordinance. X 1

3.2.1 x
Implement the California Avenue near‐term signage plan replacing the El Camino Real (October 2026) and Oregon Expressway (August 2026) signs—by completing their procurement and installation. x 1

3.2.2 x Continue design work on new parking structure in Downtown core (Lot D). x 1

3.2.3 x
Secure City Council approval for the California Avenue Outdoor Activation Guidelines.

These guidelines will be finalized through continued stakeholder engagement that includes a representative mix of business owners and residents and a formal Architectural Review Board (ARB) review. x 1

4.1.1 x
Develop and balance FY 2027 budget by June 30 prioritizing government efficiency, ongoing solutions and balancing fiscal impacts of policies and practices including consultant contracts, downtown parking and general fund subsidies, nonprofit partnerships and revenue enhancements. x1

4.1.2 x
Implement a standardized Citywide Consultant Stewardship Framework—covering the lifecycle from the decision to outsource and scope drafting to contract close‐ out—to develop and manage scope of services and enhanced reporting on use of professional services. x1

4.1.3 x
Improve City processes by streamlining approval of revised procurement thresholds and contract authority. x1

4.1.4 x
Council support position allocation as a short‐term pilot (6‐12 months) funded from the Council Contingency fund. x1

4.2.1 x x
Improve and streamline staff work on homelessness, housing and services for vulnerable residents. x1

3.2 District Activation and Access Improvements
Government Efficiency (GE)‐ 9 Total

4.1 Fiscal Stewardship and Operational Efficiency

4.2Process Modernization and Service Delivery
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#
ANPHM
CA&RF
EBV
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2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
Priority
CC Value #
OBJECTIVES (43 Total)
Sorted by:

Council Priority, Group #, estimated completion date, and finally by additional resource needs.

Q1
Q2
Q3
Q4
Group #

4.2.2 x
Leverage the Palo Alto 311 staff working group workplan, vendor support and City Auditor benchmarking advice to improve clarity and timing of constituent response and satisfaction, and enhance staff efficiencies by aligning report categories with constituent expectations, and implementing vendor‐proposed 2026 system upgrades—including integrating AI tools. x1

4.2.3 x
Modify the municipal code to remove the requirement for planning entitlement approval (such as architectural review) or compliance with zoning regulations and procedures for capital improvement or other city‐initiated projects on publicly owned right of way and land. x1

4.2.4 x
Streamline delivery of low‐cost, high‐value (aka quick build) traffic safety improvements including updating the City's Traffic Calming Policy in alignment with the City's Safety Action Plan, Bicycle/Pedestrian Transportation Plan (BPTP), Safe Routes to School and California's Daylighting Law (AB413). x1

4.3.1 x
Relocate City operations in Utilities and the Development Center back to City Hall in order to reduce rent expense to third party landlords, maximizing revenue to the General Fund, and consolidating property and facility management within City owned land. x 1

5.1.1 3,4
Open 429 Bryant Street Community Center. Complete construction and any necessary partnership agreements to begin La Comida Senior Lunch Program at the facility by end of July, 2026; plan further work for general community center operations concurrently. x 1

5.1.2 4
Pursue a natural grass athletic field pilot project to determine the best management practices to enhance playability and durability. x 1

5.2.1 2
Adopt ordinance updates establishing additional Green Building Standards and Energy Reach Codes. x 1

5.2.2 2
Complete 2026 Bicycle and Pedestrian Transportation Plan (BPTP) with City Council adoption of the plan. x 1

5.2.3 2
Advance recommendations for the Regional Water Quality Control Plant Biosolids Facility Plan. x 1

5.2.4 2
Implement the strategies contained in the 2026‐2027 Sustainability and Climate Action Plan Work Plan. x 1
Council Values‐ 12 Total

5.1 Vibrant Community

5.2 Climate Leadership and Environmental Stewardship

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#
ANPHM
CA&RF
EBV
GE
2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
Priority
CC Value #
OBJECTIVES (43 Total)
Sorted by:

Council Priority, Group #, estimated completion date, and finally by additional resource needs.

Q1
Q2
Q3
Q4
Group #

5.2.5 2
Develop and recommend for Council approval a multi‐year grid modernization capital improvement plan focused on improving reliability and facilitating city‐wide customer electrification by upgrading sub‐transmission, substation, and distribution infrastructure. Issue the first tranche of debt financing in 2026. x1

5.3.1 3,4
Execute MOU with Santa Clara County for assignment of clinician to PD Psychiatric Emergency Response Team (PERT) in Jan 2026. x 1

5.3.2 2
Advance design of Grade Separation projects at Charleston Road, Meadow Drive and Churchill Avenue. x 1

5.3.3 4
Update the Safety Element and develop an Evacuation Plan pursuant to SB 99, AB 747, and AB 1409. x 1

5.3.4 3,4
Support Community Mental Health through provision of support for all ages through community partnerships, programs, and initiatives. x 1

5.3.5 4
Advance Quiet Zones at Palo Alto Avenue, Churchill Avenue, Meadow Drive, and Charleston Road Rail Crossings. x 1

5.3 Community Well‐Being & Belonging
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2026 Council Priorities & Objectives
Q1 Update (January 1- March 31)

ATTACHMENT B
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5 Priority
15 Focus Area
43 Objective
Executive Summary
Overall Summary
%
On Track 95
Completed 5
Status
To date, of the 43 Council objectives supporting Council priorities, in the first quarter, a total of 2 (5%) have been completed, 41 (95%) are on track with new Council direction, no objectives are behind schedule, and none are on hold.

The four Council Priorities are:

Achieve Near-Term Housing Milestones
Cubberley Acquisition and Renovation Funding
Enhance Business Vibrancy
Government Efficiency
Of the 41 objectives, 12 are supported and organized under the City Council's values, listed here as a fifth priority.

ATTACHMENT B
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% #
On Track 100 15
Priority 1
Achieve Near-Term Priority Housing Milestones
% #
On Track 100 2
Priority 2
Cubberley Acquisition and Renovation Funding
% #
On Track 100 5
Priority 3
Enhance Business Vibrancy
% #
On Track 100 9
Priority 4
Government Efficiency
% #
On Track 83 10
Completed 17 2
Priority 5
Council Values Supported Objectives
Plan Summary
Status
Status
Status Status
Status

ATTACHMENT B
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Achieve Near-Term Priority Housing Milestones
Owner: Lupita Alamos
% #
On Track 100 15

Housing Code and Zoning Updates
Owner: Lupita Alamos
% #
On Track 100 5

Adopt an updated Accessory Dwelling Unit (ADU) ordinance to comply with State law and implement additional policy
alternatives, including increased allowable square footage and condominium conversions, consistent with City Council
direction (05.15.23).

Owner: Garrett Sauls
Objective Milestone
Planning and Transportation Commission recommendation
and City Council consideration of draft ordinance by Q3.

Achievements:

Draft report and ordinance have been prepared; ongoing discussions are planned to ensure prior Council direction is incorporated for Planning and Transportation Commission discussion and recommendation.

Roadblocks:

The project is competing with other ongoing initiatives, with higher priority work taking precedence and resulting in a slight delay.

Next Steps:

Review by the Planning and Transportation Commission is anticipated in Q2, followed by City Council review in Q3.

Develop and adopt Objective Development Standards for the South of Forest Area Coordinated Area Plan (SOFA), and present plan amendment options to replace subjective standards with objective standards for Planning and Transportation
Commission and City Council consideration, consistent with Housing Element Program 3.7. Explore alignment opportunities with SB 79 work and Downtown Housing Plan.

Owner: Leslie Velasquez
Objective Milestone
Planning and Transportation Commission recommendation
and City Council consideration of amended SOFA CAP and/or municipal code amendments by Q4 of 2026.

Achievements:

Staff evaluated the existing design standards and requirements included in SOFA I and II. Sent out call for solicitations in order to hire consultant as technical support.

Roadblocks:

None as of Q1.

Next Steps:

In Q2 staff will select a consultant to provide technical support and prepare for a study session with the PTC; anticipated in early Q3.

Priority 1
Focus Area: 6 Objective: 15
Focus Area 1.1
Objective: 5
Objective 1.1.1
Jan 01, 2026 - Jun 30, 2026 On Track
Objective 1.1.2
Jan 01, 2026 - Dec 31, 2026 On Track

ATTACHMENT B
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Area Plans and Long-Range Housing Strategy
Owner: Lupita Alamos
% #
On Track 100 2

Codify the R1/SB 9 interim ordinance by establishing objective development standards and increasing the maximum floor area for SB 9 units from 800 to 1,200 square feet, consistent with Housing Element Program 6.3A, and evaluate implications for R1 and SB 9 projects within the Cityʼs Individual Review Program.

Owner: Jennifer Armer
Objective Milestone
Planning and Transportation Commission consideration of draft ordinance in Q3; Council consideration in Q4.

Achievements:

N/A
Roadblocks:

N/A
Next Steps:

Work on this objective is scheduled to begin in Q2 with a hearing before the Planning and Transportation Commission in Q3.

Conduct and complete a study of short-term rentals and adopt housing and neighborhood preservation regulations that
prioritize long-term occupancy, consistent with Housing Element Programs 4.2D–E (anticipates ordinance adoption by July, 2027)
Owner: Kelly Cha
Objective Milestone
Present policy options to Policy and Service Committee in Q3.

As applicable present possible ordinance or findings to the Planning and Transportation Commission and City Council in Q4.

Achievements:

Initiated data collection process to support the City Council study session tentatively scheduled for Q3.

Roadblocks:

N/A
Next Steps:

Continue data collection and analysis in alignment with study session and timeline.

Adopt zoning incentives and development standards that
support innovative housing typologies, including micro-units, intergenerational housing, housing for aging adults, students, and lower-income households, consistent with Housing
Element Program 6.5B.

Owner: Vishnu Krishnan
Objective Milestone
Study session with Planning and Transportation Commission in Q1 and Policy & Services Committee in Q3; recommendations for Architectural Review Board consideration in Q2; Planning and Transportation Commission recommendation and City
Council consideration of draft ordinance in Q4.

Achievements:

Staff presented the analysis to the Planning and Transportation Commission on April 08, 2026. The PTC provided direction on the preferred typology of alternative housing and the geographic locations that can accommodate them.

Roadblocks:

N/A
Next Steps:

Present the recommendations to the Architectural Review Board for consideration in Q2. The Planning and Transportation Commission recommendation and City Council consideration of draft ordinance in anticipated to occur in Q4.

Objective 1.1.3
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 1.1.4
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 1.1.5
Jan 01, 2026 - Dec 31, 2026 On Track
Focus Area 1.2
Objective: 2

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Affordable, Supportive, and Publicly Enabled Housing Delivery Owner: Lupita Alamos
% #
On Track 100 2

Select a preferred alternative for the San Antonio Road Area Plan land use and transportation alternatives based on
community input and City Council direction.

Owner: Robert Cain
Objective Milestone
Stakeholder input for alternatives (PTC, community, and advisory bodies') in Q1, Council selection of preferred alternative(s) in Q2, and Council review of policy
recommendations in Q4.

Accomplishments:

Developed multiple land use and transportation alternatives for the plan area.

Executed comprehensive community engagement, including a workshop, online survey, pop-up event at the Cal Ave Farmers Market, and meetings with various advisory groups and commissions.

Roadblocks:

The accelerated project timeline is challenging for both staff and consultants.

Diverse stakeholder perspectives require clear Council direction at timely touchpoints to maintain project momentum and schedule.

Next Steps:

Recommendations will be presented to City Council in Q2 to confirm alignment on the Area Plan, followed by a return in Q4 with further analysis and a request to finalize policy direction.

Receive Council direction on optional SB 79 implementation strategies and, as appropriate, Downtown Housing Plan
scenarios to Council and initiate environmental review.

Owner: Vishnu Krishnan
Objective Milestone
Work with SB 79 and Downtown Housing Plan City Council Ad- Hoc Committee on next steps in Q1 and Q2; advance SB 79 implementation in 2026 and Downtown Housing Plan based on direction received from City Council for adoption in 2027.

Achievements:

Staff has engaged with the SB 79 / Downtown Housing Plan Council Ad-Hoc during Q1 and Q2 to explore various options for SB 79 implementation and future direction of the Downtown Housing Plan.

Roadblocks:

None at this time.

Next Steps:

A Council discussion will be scheduled in Q2 to deliberate and provide direction on SB 79 implementation and next steps for the Downtown Housing Plan.

Objective 1.2.1
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 1.2.2
Jan 01, 2026 - Dec 31, 2026 On Track
Focus Area 1.3
Objective: 2

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State Compliance, Housing Capacity, and Grant Competitiveness Owner: Lupita Alamos
% #
On Track 100 2

Partner with Santa Clara County Housing Authority to achieve construction timeline milestones for the Palo Alto Homekey project (which will provide transitional housing and services for unhoused residents).

Owner: Melissa McDonough
Objective Milestone
Formal opening of the Palo Alto Homekey facility at 1237 San Antonio Rd in Q2.

Achievements:

Key construction milestones have been achieved, including the completion of coordination with PG&E for pole removal and AT&T for phone line installation and review of temporary occupancy permit. Landscaping is finalized, and inspections for elevators and rooftop photovoltaic systems are scheduled.

Roadblocks:

Testing of the waste and vent system, initiated due to concerns from another modular site, is underway. Since this test is generally conducted when walls are open, locating the leak is more complex at this stage. The construction team began smoke tests using scented smoke to identify any leaks within the system.

Next Steps:

Once construction activities are completed, there will need to be installation of furniture, fixtures, and equipment. A community celebration and open house is scheduled for May.

Issue Requests for Information or Requests for Proposals (RFI/P) to develop approximately 218 affordable or workforce housing units on City-owned surface parking lots. (Housing Element Program 1.4A).

Owner: Julia Knight
Objective Milestone
Review draft RFI/P with Policy & Services Committee by Q3 2026 to issue the solicitation process by year end.

Achievements:

Project initiation anticipated for Q2.

Roadblocks:

N/A.

Next Steps:

Evaluate RFI/P approaches and present options to Policy and Service Committee.

Receive a Prohousing Designation from the California
Department of Housing and Community Development in order to enhance the City's competitive advantage for qualifying grants.

Owner: Julia Knight
Objective Milestone
Submit an application to the state department of Housing and Community Development in Q2; receive HCD approval in Q3.

Achievements:

Staff completed a draft application this winter and received technical assistance from HCD. The application is currently being updated based on HCD feedback.

Roadblocks:

There is no established timeline for HCD to review the pro-housing application, which may impact overall timing.

Next Steps:

Upon completion, staff will post the draft application for 30 days, hold at least one public hearing, seek City Council adoption of a formal resolution, and submit the application to HCD in late Q2.

Objective 1.3.1
Jan 01, 2026 - Jun 30, 2026 On Track
Objective 1.3.2
Jan 01, 2026 - Dec 31, 2026 On Track
Focus Area 1.4
Objective: 2
Objective 1.4.1
Jan 01, 2026 - Jun 30, 2026 On Track

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Housing Incentives, Fees, and Market-Activation Tools
Owner: Lupita Alamos
% #
On Track 100 2

Identify and designate additional Housing Element site
capacity to maintain RHNA compliance and buffer by evaluating new opportunity sites to address anticipated capacity shortfalls in 2026, including impacts from development on faith-based sites and downtown parking lots.

Owner: Coleman Frick
Objective Milestone
Select technical analysis consultant, Q1; City Council resolution allowing site inventory changes, Q2; identify replacement sites for to meet RHNA requirements, Q3/4; evaluate downtown
parking lot and faith-based replacement sites, if necessary, Q4.

Achievements: Staff initiated identification and evaluation of new housing element opportunity sites. Consultant selected in Q1 to provide technical analysis of site suitability for housing development sites. Suitable sites will be considered by staff to meet Regional Housing Need Assessment (RHNA) requirements .

Roadblocks: N/A.

Next Steps: In April 2026 staff will provide the Council with a resolution authorizing the Planning and Development Services Director to make modifications to the Housing Element site inventory to meet state requirements.

If approved, staff will continue to analyze potential housing opportunities and update the sites inventory.

Update and adopt development impact fees for public safety, government facilities, housing, transportation, parks, and community services, including completion of nexus and
feasibility studies and establishment of fee waivers for low- income inclusionary units. (Housing Element Programs 2.1B;

3.1B & C).

Owner: Julia Knight
Objective Milestone
Present development scenarios and growth assumptions to Policy and Services for feedback by Q2. Adopt Parks, Library & Community Facility Fee Updates by Q3. Adopt additional fee updates by Q1 2027.

Achievements: Staff kicked-off interdepartmental working group efforts in January and presented a project update to Policy and Services on 4/14/26.

Roadblocks: N/A
Next Steps: Receive and review facilities needs assessments from consultant team and present nexus and feasibility study findings to Policy and Services in Q3.

Evaluate opportunities that make multi-family housing an attractive alternative to commercial office development, consistent with Housing Element Program 3.9A.

Owner: Robert Cain
Objective Milestone
Feedback from Policy & Services Committee in Q1 and Q3.

Recommend ordinance amendments to City Council in Q4.

Achievements:

Presented policy options to Policy & Services Committee and received direction.

Roadblocks:

NA
Next Steps:

Further explore policy direction provided by Policy & Services Committee, return to the Committee in Q3 for final recommendation before presenting ordinance to City Council in Q4.

Objective 1.4.2
Jan 01, 2026 - Sep 30, 2026 On Track
Focus Area 1.5
Objective: 2
Objective 1.5.1
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 1.5.2
Jan 01, 2026 - Jun 30, 2026 On Track

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Unhoused Resident and Oversized Vehicle Housing Response Owner: Lupita Alamos
% #
On Track 100 2

Cubberley Acquisition and Renovation Funding
Owner: Lupita Alamos
% #
On Track 100 2

Strategies to Support Cubberley Acquisition and Renovation Owner: Lupita Alamos
% #
On Track 100 2

Implement Oversized Vehicles (OSV) Phase 1 work, including options for RV buyback and storage, new recruiting safe parking and enforcement/signage relating to detached/inoperable vehicles prohibition.

Owner: Melissa McDonough
Objective Milestone
In coordination with the OSV Ad hoc, seek Council direction on preferred option(s) on RV buyback and storage in Q2.

Implement signage and enforce detached/inoperable vehicles prohibition in Q2. Work with OSV Ad Hoc on recruiting new safe parking and bring
Achievements:

Phase 1 street sweeping and cleaning is scheduled for completion by the end of April. Signage installation and enforcement of detached/inoperable vehicle prohibitions are in progress. Initial research on RV buyback and storage options has been conducted.

Roadblocks:

No roadblocks identified at this time.

Next Steps:

The Oversized Vehicle (OSV) Ad Hoc committee will review the findings from the RV buyback and storage research. The Ad Hoc committee is expected to report back to Council on Phase 1 progress in Q2.

Initiate and advance Oversized Vehicles Phase 2 work, including oversized vehicle permit pilot (e.g., collecting count data, designing permit process & terms, conducting informal RFI/Q to operate pilot).

Owner: Melissa McDonough
Objective Milestone
Develop OSV permit pilot, including enhanced services and bring to Council for consideration by Q3. (related to 2025 Objective 3.3.4).

Achievements:

February 23, 2026 Council study session conducted to review OSV Ad Hoc progress and gather feedback on proposed permit pilot concepts.

Roadblocks:

No current roadblocks identified.

Next Steps:

Further development of pilot in collaboration with the OSV Ad Hoc, with the intent to present a recommended course of action to Council in Q2.

Focus Area 1.6
Objective: 2
Objective 1.6.1
Jan 01, 2026 - Sep 30, 2026 On Track
Objective 1.6.2
Jan 01, 2026 - Dec 31, 2026 On Track
Priority 2
Focus Area: 1 Objective: 2
Focus Area 2.1
Objective: 2

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
18 Packet Pg. 32 of 390

Page 9 ends

Enhance Business Vibrancy
Owner: Lupita Alamos
% #
On Track 100 5

Business Development and Business Vitality
Owner: Lupita Alamos
% #
On Track 100 2

Continue to advance the Cubberley Project focusing on
anticipated purchase of 7 acres from PAUSD and community polling for potential placement of a measure on the November 2026 ballot and other funding source(s).

Owner: Kristen O'Kane
Objective Milestone
Finalize a plan to purchase 7 acres from PAUSD by end of Q2.

Achievements:

Two community polls were conducted in Q1 to inform voter support of a potential ballot measure to fund the project, the Draft Cubberley Conceptual Master Plan and Mitigated Negative Declaration were released for public comment and included presentations to the Parks and Recreation Commission, Planning and Transportation Commission, and Architectural Review Board.

Partnerships with community-based organizations were announced.

Roadblocks:

The project continues on a condensed timeline in order to meet specific deadlines for potential placement of a ballot measure in November 2026.

Next Steps:

Prepare a ballot measure for approval. Additional next steps will be determined at the May 18th City Council meeting.

Continue to explore and develop partnership opportunities with community nonprofit organizations to advance certain elements of the master concept plan through a combination of city and private investments.

Owner: Kristen O'Kane
Objective Milestone
Continue to explore partnerships and funding opportunities.

Achievements: Partnerships with the Friends of the Recreation Wellness Center, TheatreWorks, Avenidas, Maker Nexus, and Palo Alto Community Child Care have been announced. Staff and the Cubberley Ad Hoc continue to explore and develop these partnerships as the project advances.

Roadblocks: The project continues on a condensed schedule in order to meet certain deadlines.

Next Steps: Staff will bring Letters of Intent to Council for approval at a date to be determined.

Objective 2.1.1
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 2.1.2
Jan 01, 2026 - Dec 31, 2026 On Track
Priority 3
Focus Area: 2 Objective: 5
Focus Area 3.1
Objective: 2

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
19 Packet Pg. 33 of 390

Page 10 ends

District Activation and Access Improvements
Owner: Lupita Alamos
% #
On Track 100 3

Develop a formal business retention/expansion/attraction program focused on supporting existing Palo Alto businesses seeking to diversify the local economy, increase the tax base that pays for essential public services, job creation, support placemaking and special events, and enhance the Palo Alto brand in innovation and entrepreneurship globally.

Owner: Alex Andrade
Objective Milestone
With the Economic Development Ad Hoc Committee, review
and solidify for Council approval a Business Retention, Expansion, and Attraction (BRE/A) Strategy with various implementation actions; an initial draft is attached to this staff report in Q2.

Achievements:

The Business Retention, Expansion, and Attraction (BRE/A) strategy workplan has been drafted, and several initiatives are already underway to support the Councilʼs priority of enhancing business vibrancy.

Roadblocks:

None.

Next Steps:

Scheduled for Economic Development Committee review on May 20, 2026 for City Council consideration in June 2026.

Adopt an ordinance expanding retail opportunities and
strengthening retail resiliency, including refining retail and retail-like definitions and updating the retail preservation ordinance.

Owner: Jennifer Armer
Objective Milestone
PTC review and recommendation in Q1; City Council review and action in Q2. Continued engagement with stakeholders prior to implementation.

Achievements:

Retail Committee review and recommendations on January 22, 2026. Planning and Transportation Commission consideration and recommendation on a draft ordinance on March 25, 2026.

Roadblocks:

None
Next Steps:

Scheduled for Council consideration on May 18, 2026.

Implement the California Avenue near-term signage plan
replacing the El Camino Real (October 2026) and Oregon
Expressway (August 2026) signs—by completing their
procurement and installation.

Owner: Holly Boyd
Objective Milestone
By Q3 Oregon Expressway sign will be installed. By Q4 the El Camino Real sign will be installed.

Achievements:

Staff issued an Invitation for Bids in March and received one responsive bid. The contract will be executed in early May and fabrication of signs will begin.

Roadblocks:

None reported.

Next Steps:

None reported.

Objective 3.1.1
Jan 01, 2026 - Jun 30, 2026 On Track
Objective 3.1.2
Jan 01, 2026 - Jun 30, 2026 On Track
Focus Area 3.2
Objective: 3
Objective 3.2.1
Jan 01, 2026 - Dec 31, 2026 On Track

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
20 Packet Pg. 34 of 390

Page 11 ends

Government Efficiency
Owner: Lupita Alamos
% #
On Track 100 9

Fiscal Stewardship and Operational Efficiency
Owner: Lupita Alamos
% #
On Track 100 4

Continue design work on new parking structure in Downtown core (Lot D).

Owner: Holly Boyd
Objective Milestone
Complete entitlement process and design development phase by the end of 2026.

Achievements:

Staff conducted a study session with ARB in December 2025, submitted for formal ARB review in March, and anticipates going to ARB in May 2026.

Roadblocks:

None reported.

Next Steps:

Upon receiving ARB approval, staff will present the planning entitlements and EIR addendum to Council for approval.

Secure City Council approval for the California Avenue Outdoor Activation Guidelines. These guidelines will be finalized through continued stakeholder engagement that includes a
representative mix of business owners and residents and a formal Architectural Review Board (ARB) review.

Owner: Bruce Fukuji
Objective Milestone
Q1 Stakeholder engagement, Q2 ARB and Council review and consideration.

Achievements:

Completed preparation of Outdoor Activation Standards and Pre-Approved Parklet Plan set. Conducted ongoing outreach to merchants and community members at the Sunday Farmers' Market and up-coming Earth Day event.

Completed ARB ad hoc committee engagement on outdoor dining and parklet design, comprised of meeting two times a month over the last 7 months. ARB 5- 0 vote to approve recommendation for City Council adoption of Outdoor Activation Standards, permit requirements and Pre-Approved Parklet Plans with Standardized Parklet Designs. ARB provided feedback on Pedestrian Priority Public Space Concept where bikes are allowed.

Roadblocks:

None
Next Steps:

The following events and meetings are planned for Q2:
• April 19 - Earth Day Festival 2026
• April 19 - Evergreen Park Neighborhood Association meeting • April 21 - Cal Ave merchants meeting
• May 20 - Economic Development Ad Hoc Committee recommendations to City Council
• June 8 - City Council consideration
Objective 3.2.2
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 3.2.3
Jan 01, 2026 - Jun 30, 2026 On Track
Priority 4
Focus Area: 3 Objective: 9
Focus Area 4.1
Objective: 4

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
21 Packet Pg. 35 of 390

Page 12 ends

Develop and balance FY 2027 budget by June 30 prioritizing government efficiency, ongoing solutions and balancing fiscal impacts of policies and practices including consultant
contracts, downtown parking and general fund subsidies, nonprofit partnerships and revenue enhancements.

Owner: Lauren Lai
Objective Milestone
Q1- Council approval of Long-Range Financial Forecast and FY 2026 Mid-Year. Q2- Develop fee updates for Finance Committee review and Council recommendation. Year-end review of open purchase order balances and associated contracts. Present Nonprofit Partnership Workplan FY 27 Phase I
recommendations to Finance Committee and Council. Present FY2027 Budget for Council adoption.

Achievements:

On January 20, 2026, the City Council approved the Long Range Financial Forecast that included the base budget guidelines to address a projected FY27 deficit, staff recommended a multi-year comprehensive budget balancing strategies and made permanent the FY26 budget reductions. The strategies included revenue enhancement, expenditure reduction, CIP reduction, one-time funding, and Section 115 trust (for pension cost and liability). With greater effort on government efficiencies, these strategies yield better outcomes, minimizing community impacts.

On February 23, 2026 the Council approved the FY 2026 Mid-Year Budget Review; and Approve 1) Budget Amendments in Various Funds, and 2) a $10.0 Million Additional Discretionary Payment (ADP) from the PARS Pension Trust. The Council also consolidate the remaining $6.0 million in the Uncertainty Reserve with the Budget Stabilization Reserve (BSR) to streamline reserve administration, closing the Uncertainty Reserve.

Roadblocks:

Continued economic and Federal government uncertainty could impact forecast assumptions.

Next Steps:

Continue to broadly monitor fiscal drivers in the development of revenue enhancements and a balanced budget. Work with departments and key stakeholders to develop a FY 2027 balanced budget.

Implement a standardized Citywide Consultant Stewardship Framework—covering the lifecycle from the decision to
outsource and scope drafting to contract close-out—to develop and manage scope of services and enhanced reporting on use of professional services.

Owner: Meghan Horrigan-Taylor
Objective Milestone
By Q3, implement a standardized and citywide Consultant Management resource and framework to advance efficiencies and best practices from lifecycle of City/consultant interactions such as decision to outsource, scope of services, community engagement, performance tracking and contract closeout.

Resources will enhance training, reporting and overall use of professional services citywide.

Achievements:

A study session was conducted with the City Council on October 22, 2025, to review and provide feedback on the proposed process and planned work for developing a citywide consultant management resource. Staff engagement to date has included defining the consultant management lifecycle, implementing practice improvements, and identifying skill and training gaps. As part of the budget process, the City Manager and Administrative Services Department (ASD) led a departmental audit of contract services to identify opportunities for in- house staff support.

Roadblocks:

No roadblocks have been identified at this time.

Next Steps:

Completion of the Consultant Management resource guide, including the development of citywide training and supporting tools.

Objective 4.1.1
Jan 01, 2026 - Jun 30, 2026 On Track
Objective 4.1.2
Jan 01, 2026 - Sep 30, 2026 On Track

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
22 Packet Pg. 36 of 390

Page 13 ends

Process Modernization and Service Delivery
Owner: Lupita Alamos
% #
On Track 100 4

Improve City processes by streamlining approval of revised procurement thresholds and contract authority.

Owner: Lauren Lai
Objective Milestone
Q1- Analyze improvements to the Municipal Code on policy and procedures based upon the Baker Tilly report. Hold focus group discussions on proposed revisions. Q2- Develop revisions to the Muni Code policy and procedures for Council approval. Q3.

Develop new processes and systems to implement and manage the new purchasing thresholds and contract authority.

Achievements:

In March the Administrative Services Department held focus group meetings with City departments and the executive team to review purchasing thresholds, which includes P-cards (City issued credit cards) and advise on improvements to the process.

Roadblocks:

Staff has begun to identify policy and system updates however, updating the systems and processes are time consuming.

Next Steps:

Staff is on track to present Municipal Code updates to Council in Q2.

Hire a Council half-time limited term support position
allocation as a short-term pilot (6 to 12 months) funded from the Council Contingency fund.

Owner: Mahea Ah Yun
Objective Milestone
By Q2, hire a part-time limited term position, non-benefited, to assist the Council such as constituent communication,
scheduling and calendar management and other efficiencies.

Achievements:

The position recruitment closed on April 29, 2026 and interviews are tentatively scheduled for May.

Roadblocks:

Hiring success may be a challenge due to the limited term and non-benefit nature of the position.

Next Steps:

Interviews will conclude in May and an offer will be made to the top candidate, for a tentative start in June 2026.

Improve and streamline staff work on homelessness, housing and services for vulnerable residents.

Owner: Melissa McDonough
Objective Milestone
Centralize in City Manager's Office by Q1, Identify and implement ways to improve processes and reporting (e.g., consolidating contracts, standardizing reporting, HSRAP) by Q3 Achievements:

The Office of Human Services now reports to the Assistant to the City Manager for Housing and Homelessness within the City Managerʼs Office. The Human Services team has collaborated closely with other City Managerʼs Office staff on the Nonprofit Partnership Plan, with a particular focus on the Human Services Resource Allocation Process (HSRAP) and Emerging Needs grants.

Roadblocks:

No current roadblocks identified.

Next Steps:

Review all HSRAP contracts and associated reporting.

Objective 4.1.3
Jan 01, 2026 - Sep 30, 2026 On Track
Objective 4.1.4
Jan 01, 2026 - Jun 30, 2026 On Track
Focus Area 4.2
Objective: 4
Objective 4.2.1
Jan 01, 2026 - Sep 30, 2026 On Track

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
23 Packet Pg. 37 of 390

Page 14 ends

Organizational Alignment and Facilities Optimization
Owner: Lupita Alamos
% #
On Track 100 1

Leverage the Palo Alto 311 staff working group workplan, vendor support and City Auditor benchmarking advice to
improve clarity and timing of constituent response and
satisfaction, and enhance staff efficiencies by aligning report categories with constituent expectations, and implementing vendor-proposed 2026 system upgrades—including integrating AI tools.

Owner: Meghan Horrigan-Taylor
Objective Milestone
By Q4 Implement public facing changes to PaloAlto311 to enhance constituent response and establish citywide response standards.

Achievements:

Enhancements and updates to PaloAlto311 have been implemented, following the establishment of a cross-department working group in fall 2025 supporting constituent response and citywide response. Old requests prior to December 2024 have been closed, new citywide standards increasing constituent follow- up established, and streamlined report types and categories to align community expectations of service requests available and began internal staff user training.

Roadblocks:

Existing platform is old, and staff are exploring options balancing staffing and budget limitations.

Next steps:

Continue cross-department collaboration, monthly tracking and reporting to review and elevate complex issues, monthly staff user trainings; initiate City Auditor benchmarking; and facilitate existing platform upgrades planned this calendar year including new AI features.

Modify the municipal code to remove the requirement for planning entitlement approval (such as architectural review) or compliance with zoning regulations and procedures for capital improvement or other city-initiated projects on publicly owned right of way and land.

Owner: Jonathan Lait
Objective Milestone
Present an ordinance to the Planning and Transportation Commission in Q3; City Council review in Q4.

Achievements:

None.

Roadblocks:

None.

Next Steps:

Project initiation in Q2; Planning and Transportation Commission review and City Council action in Q3.

Streamline delivery of low-cost, high-value (aka quick build) traffic safety improvements including updating the City's Traffic Calming Policy in alignment with the City's Safety Action Plan, Bicycle/Pedestrian Transportation Plan (BPTP), Safe Routes to School and California's Daylighting Law (AB413).

Owner: Sylvia Star-Lack
Objective Milestone
Council review of Draft Update to Traffic Calming Policy, and curb painting for corner daylighting at 25 intersections along school routes in Q4.

Achievements:

Corner daylighting has been incorporated into City repaving and roadway projects. Recruitment for an Associate Engineer to lead the initiative has commenced, and a junior staff member is receiving AutoCAD training in preparation for the program update.

Roadblocks:

No current roadblocks identified as of Q1.

Next Steps:

Proceed with hiring the Associate Engineer and initiate research into best practice programs to inform the update of the existing Traffic Calming program.

Work on these initiatives is in progress.

Objective 4.2.2
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 4.2.3
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 4.2.4
Jan 01, 2026 - Dec 31, 2026 On Track
Focus Area 4.3
Objective: 1

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
24 Packet Pg. 38 of 390

Page 15 ends

Council Values Supported Objectives
Owner: Lupita Alamos
% #
On Track 83 10
Completed 17 2

Vibrant Community
Owner: Lupita Alamos
% #
On Track 50 1
Completed 50 1

Relocate City operations in Utilities and the Development Center back to City Hall in order to reduce rent expense to third party landlords, maximizing revenue to the General Fund, and consolidating property and facility management within City owned land.

Owner: Brad Eggleston
Objective Milestone
Please add milestones
Achievements:

The project was identified as a priority in early 2026. Initial steps included determining staff from the Elwell Court and Development Center spaces that will move to the Civic Center building. Existing office spaces in the Police Building were also inventoried. Public Works and Planning and Development Services staff began discussions about the project scope.

Roadblocks:

No roadblocks have been identified at this time.

Next Steps:

A new capital improvement program has been proposed for the FY 2027 Capital Budget to provide funding for the project. Staff and architectural consultant will work to allocate workgroups to available spaces and plan for completing incremental improvements to prepare spaces for the staff moves.

Open 429 Bryant Street Community Center. Complete
construction and any necessary partnership agreements to begin La Comida Senior Lunch Program at the facility by end of June, 2026; plan further work for general community center operations concurrently.

Owner: Kristen O'Kane
Objective Milestone
By Q2 finalize construction and permitting needed to operate the Bryant Street Community Center at full occupancy. Evaluate options for future improvements.

Achievements:

On March 25, 2026, the Bryant Street Community Center received final inspection approval for its construction work. The downstairs Sycamore Room will be occupied by La Comida to host a daily senior lunch program from 10AM- 2PM starting May 1. The Teen Space has been cleared for full occupancy, is now fully furnished, and has expanded programming underway. The Bryant Street Community Center will also be available for community classes and rental space.

Roadblocks:

No roadblocks have been identified.

Next Steps:

A grand opening is tentatively scheduled for June 3, 2026.

Objective 4.3.1
Jan 01, 2026 - Dec 31, 2026 On Track
Priority 5
Focus Area: 3 Objective: 12
Focus Area 5.1
Objective: 2
Objective 5.1.1
Jan 01, 2026 - Jun 30, 2026 Completed

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
25 Packet Pg. 39 of 390

Page 16 ends

Climate Leadership and Environmental Stewardship
Owner: Lupita Alamos
% #
On Track 100 5

Pursue a natural grass athletic field pilot project to determine the best management practices to enhance playability and durability.

Owner: Ben Heistein
Objective Milestone
Q1 work with the Parks and Recreation Commission (PRC) to develop a workplan for the Turf Pilot. Q2 seek Council approval of work plan and funding. Q3 Conduct enhanced maintenance pilot and feasibility study at two locations. Q4 Conduct stakeholder engage
Achievements:

Q1 Achievements include:

In collaboration with the PRC, development of a workplan for the Pilot that aligns with Council intent
Inclusion of the Pilot as a proposed FY27 PRC workplan priority that mirrors and implements the Council Priorities & Objective 5.1.2 Formation of a PRC Natural Grass Pilot Ad-Hoc Group and holding an Ad-Hoc kickoff meeting in February
Scoping of required Agronomist services
Inclusion of the Pilot in the FY27 Proposed CIP Budget as a project entitled "High-Performance Natural Grass Fields" to secure funding for the project.

Roadblocks:

Limited funding available for the pilot in context of City Budget deficit, limits the overall scope, so the Pilot workplan is phased. Future year phases are contingent on securing external funding
Condensed Timeline to complete Pilot to inform upcoming FY28 Cubberly Synthetic Turf Replacement Capital decisions is a very high level effort and may be challenging.

Next Steps:

For Q2, next steps include:

Responding to Council's 4/6 request for additional policy development in the PRC Grass Pilot Work Plan by incorporating an additional task in the PRC workplan
Secure Council approval of Pilot workplan through the adoption of the FY27 PRC Workplan
Secure Council approval of funding through the FY27 City budget process
Secure Agronomist services for the Enhanced Maintenance & Operations portion of the Pilot
Collect stakeholder feedback on Conceptual Design portion of pilot to inform task scoping
Objective 5.1.2
Jan 01, 2026 - Dec 31, 2026 On Track
Focus Area 5.2
Objective: 5

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
26 Packet Pg. 40 of 390

Page 17 ends

Adopt ordinance updates establishing additional Green
Building Standards and Energy Reach Codes.

Owner: Julia Knight
Objective Milestone
City Council consideration of ordinance for adoption by June 2026.

Achievements:

Staff continues to monitor the policy landscape to understand strategic opportunities to adopt new Green Building Standards.

Roadblocks:

The statewide working group has not yet produced the materials necessary to implement this priority objective; this may potentially delay project advancement.

Next Steps:

Continue to monitor and initiate local amendments once the statewide working group has completed the requisite analyses.

Complete 2026 Bicycle and Pedestrian Transportation Plan (BPTP) with City Council adoption of the plan.

Owner: Ozzy Arce
Objective Milestone
Council review of 2026 Bicycle and Pedestrian Transportation Plan (BPTP) Final Report
Achievements:

Work in progress.

Roadblocks:

None as of Q1.

Next Steps:

Submit the Final 2026 BPTP to PABAC for endorsement on May 7, 2026, followed by presenting the Final Plan to the City Council for adoption on June 1, 2026.

Advance recommendations for the Regional Water Quality
Control Plant Biosolids Facility Plan.

Owner: Karin North
Objective Milestone
Conduct community engagement, refine and review
recommendations with Council Committee in 2026, and further develop implementation strategies in preparation for Council acceptance of the Biosolids Facility Plan in 2027.

Achievements:

Staff conducted a Public Meeting on February 24, 2026, to present and discuss the Regional Water Quality Control Plant's Biosolids Facility Plan recommended alternatives. A separate Measure E wetland/wildlife corridor feasibility assessment was initiated prior to finalizing recommendations regarding potential Measure E site rededication to parkland. Additionally, staff advanced the development of implementation strategies for the recommended alternatives as part of the draft Biosolids Facility Plan report.

Roadblocks:

No roadblocks identified as of Q1.

Next Steps:

Staff will finalize draft recommendations for Biosolids Facility Plan and prepare for the Parks and Recreation Commission meeting in mid-2026. Feedback will be incorporated, and recommendations will subsequently be presented to the Climate Action & Sustainability Ad Hoc Committee in Q3 2026 and to Council for review later in 2026.

Objective 5.2.1
Jan 01, 2026 - Jun 30, 2026 On Track
Objective 5.2.2
Jan 01, 2026 - Jun 30, 2026 On Track
Objective 5.2.3
Jan 01, 2026 - Dec 31, 2026 On Track

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
27 Packet Pg. 41 of 390

Page 18 ends

Implement the strategies contained in the 2026-2027
Sustainability and Climate Action Plan Work Plan.

Owner: Jonathan Abendschein
Objective Milestone
Complete progress on strategies implementation in substantial alignment with the Target Completion Dates contained in the Work Plan.

Achievements: The City Council adopted the 2026-2027 S/CAP Work Plan on March 2, 2026.

Building and Vehicle Electrification: Staff is already working on design and launch of various climate programs and pilots. The "full service" component of the Advanced Home Electrification Pilot Program has been launched, providing fixed price, direct installation services for homeowners for space and water heating (Work Item CA1). Commercial and multi-family programs and pilots are being designed, with goals to launch in Q2 and Q3 2027 (CA4, CA6, CA8, CA11, CA12) . Financing programs are being designed for launch, with the timeline still under development (CA2, CA5, CA9). The first discussions about strategies and funding for community-wide electrification, including potential regulatory measures, are starting at the April 17 City Council Climate Action and Sustainability Committee meeting (CA13, CA14). Carbon Neutrality discussions are planned for Q3 2027 (CA15). The City released an RFP for City facility electrification in March 2026 (CA26) and City fleet electrification is ongoing (CA27).

Mobility: Four bicycle and pedestrian infrastructure projects are in progress (CA21). Staff is seeking Council feedback on the Micromobility Feasibility Study Q2 2026 (CA22), and continues to implement the housing element (CA24) and coordinate traffic signal improvements with various transit providers (CA23).

Sustainability: Water efficiency and conservation measures are being implemented and adjusted as needed (S1), with water distribution system adaption measures on track to be completed this year (S3). Sea level rise planning is proceeding (S4-S5), with construction of the horizontal levee underway and on schedule to be completed this year (S6). Implementation of the Foothills Fire Management Plan (S8), tree canopy coverage (S9), and reduction of pesticide use is on-going (S10). The City is developing an EPA‑funded green stormwater infrastructure project for Juana Briones Park (S11). Zero waste efforts are continuing, with ongoing public education and outreach initiatives (S14-S16).

Communications: The Cityʼs overarching sustainability and climate action communications strategies seek to build community awareness around City goals and progress. Staff presented a status update on Work Plan items C1, C2, and C3 at the April 17, 2026 Climate Action and Sustainability Committee meeting and intends to provide quarterly updates.

Roadblocks: Promotions in 2025 related to retirements among Utilities management led to vacancies among Climate program staff, particularly in the multifamily and single-family space, which may slow program launches as these vacancies are filled.

Next Steps:

Staff will continue to implement the 2026-2027 S/CAP Work Plan.

Develop and recommend for Council approval a multi-year grid modernization capital improvement plan focused on improving reliability and facilitating city-wide customer electrification by upgrading sub-transmission, substation, and distribution infrastructure.

Owner: Terry Crowley
Objective Milestone
Issue the first tranche of debt financing by end of calendar year 2026
Achievements:

Staff continue to move the proposed capital improvement program for Grid- Mod and other Electric CIPs through the internal approval process.

Roadblocks:

None
Next Steps:

Support proposed CIP through the formal budget approval process, including final approval by the City Council.

Objective 5.2.4
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 5.2.5
Jan 01, 2026 - Jun 30, 2026 On Track

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
28 Packet Pg. 42 of 390

Page 19 ends

Community Well-Being & Belonging
Owner: Lupita Alamos
% #
On Track 80 4
Completed 20 1

Execute MOU with Santa Clara County for assignment of
clinician to PD Psychiatric Emergency Response Team (PERT) in Jan 2026.

Owner: James Reifschneider
Objective Milestone
MOU drafted and circulated for signatures by Q1.

Achievements:

MOU approved by City Council and Santa Clara County; clinician has been on- boarded.

Roadblocks:

Securing a clinician from the county was time-consuming but, once assigned, on-boarding was seamless.

Next Steps:

Objective has been completed.

Advance design of Grade Separation projects at Charleston Road, Meadow Drive and Churchill Avenue.

Owner: Ripon Bhatia
Objective Milestone
Complete 15% design and select Locally Preferred Alternative for 35% design at each crossing.

Achievements:

On December 15, 2025 City Council has selected the preferred alternatives for the crossings at Churchill Avenue, Meadow Drive, and Charleston Road, and directed staff to further evaluate the hybrid options (earthen berm vs. podium) for Meadow Drive. On March 10, 2026, the Rail Committee reviewed the structural and design considerations for both the earthen berm (retaining wall) and long-bridge (podium) options associated with the Meadow Drive hybrid alternative.

Roadblocks:

Next Steps: Staff is currently advancing the 15% design plans, which are anticipated to be presented to the Rail Committee and City Council for review in Fall 2026.

Focus Area 5.3
Objective: 5
Objective 5.3.1
Jan 01, 2026 - Mar 31, 2026 Completed
Objective 5.3.2
Jan 01, 2026 - Dec 31, 2026 On Track

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

Item 3: Staff Report
Pg.
29 Packet Pg. 43 of 390

Page 20 ends

Update the Safety Element and develop an Evacuation Plan pursuant to SB 99, AB 747, and AB 1409.

Owner: Nathaniel Rainey
Objective Milestone
Initiate evacuation plan, Q1; present draft Safety Element amendments to PTC and City Council consideration with final submittal to state for review in Q3; Anticipated evacuation plan completion, Q4.

Achievements:

OES initiated a task order with Tetra Tech to complete the Evacuation Plan. An internal staff planning team has been established to assist with the development of the Evacuation Plan. A kick-off meeting was held on March 23, 2026, and the team has accomplished Task 1 of the 7 tasks outlined in the scope of work. Staff is working with Cal Fire to complete the assessment of the Safety Element for Board of Forestryʼs review.

Roadblocks:

None.

Next Steps:

Proceed in accordance with our planning roadmap for the evacuation plan; anticipated completion Q4. Upon receiving a conditional approval from the Board of Forestry, staff will present the Safety Element update to the Planning and Transportation Commission for recommendation in Q3. The Safety Element is expected to be reviewed and adopted by the City Council in Q4.

Support Community Mental Health through provision of
support for all ages through community partnerships,
programs, and initiatives.

Owner: Kristen O'Kane
Objective Milestone
Continue work with the Jed Foundation engagement to
support youth mental health and suicide prevention efforts.

Achievements:

Work with the Jed Foundation continues along with Project Safety Net and community partners, including holding a series of teen focus groups, community workshops, a community healing session, and trainings.

Roadblocks:

None identified.

Next Steps:

Continue to advance the tasks identified in the Jed contract and support the community.

Objective 5.3.3
Jan 01, 2026 - Dec 31, 2026 On Track
Objective 5.3.4
Jan 01, 2026 - Dec 31, 2026 On Track

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

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Page 21 ends

Advance Quiet Zones at Palo Alto Avenue, Churchill Avenue, Meadow Drive, and Charleston Road Rail Crossings.

Owner: Shahla Yazdy
Objective Milestone
Council approval of Notice of Establishment and Quiet Zone implementation at Palo Alto Avenue; and identification of funding and procurement of professional services for design of required improvements to establish Quiet Zones at Churchill, Meadow and Charleston.

Achievements: For Palo Alto Avenue crossing, the approved improvements required for Quiet Zone implementation were completed in January. Following construction, a post-installation review was conducted with FRA, CPUC, Caltrain, and City staff. For Churchill Avenue, Meadow Drive, and Charleston Road crossing. The City Council approved the conceptual plans requiring four quadrant gate systems to implement quiet zone at these crossings in November 2025.

Roadblocks: For Palo Alto Avenue crossing, during the post installation review, FRA identified additional improvements including extension to the median island and signage for implementation. For other crossing, the availability of funding and participation of other agencies will be the key to success.

Next Steps: For Palo Alto Avenue, the additional improvements are now being coordinated and are expected to be completed by end of May. A follow-up review will then be conducted prior to seeking Rail Committee consideration and City Council authorization to submit the Notice of Implementation. For other crossings, Staff is working to procure consultants for the design of required improvements and to secure funding through the upcoming budget process. More recently, during Finance Committee review of the budget, the funding for establishing Quiet Zone including at Churchill Avenue, Meadow Drive, and Charleston Road was now expedited to be scheduled in FY 2027 for design and in FY 2028 for construction from Measure K Funds.

Objective 5.3.5
Jan 01, 2026 - Sep 30, 2026 On Track

ATTACHMENT B
Item 3
Attachment B - 2026
Council Priorities and
Objectives Q1 Update
Summary

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: May 18, 2026
Report #:2601-5855
TITLE
Adoption of a Resolution Vacating a Portion of a Public Utility Easement at 590 Maybell Avenue; CEQA Status – Exempt under Cal. Code Regs. Title 14, Section 15305

RECOMMENDATION
Staff recommends that the City Council adopt the attached resolution ordering the summary vacation of a portion of a public utility easement located on the residential property at 590 Maybell Avenue in Palo Alto, CA.

ANALYSIS
The public utility easement affecting the property at 590 Maybell Avenue was dedicated for public utility purposes as shown on the map recorded on June 2, 1948, in Book 18 of Maps at

Page 34 ends

The Real Estate Division in the Administrative Services Department received the property trustee’s request that a portion of this easement be vacated. The City’s Utilities, Planning, Public Works Departments and City Attorney’s Office, have reviewed and approved the vacation of this portion of the easement. The proposed action would reduce the width of the existing 10-foot easement down to 5 feet. The 5-foot portion being vacated is excess and no longer needed for public utility purposes. Therefore, this portion of the easement may be vacated in accordance with the summary proceeding authorized in Section 8333 of the California Streets and Highways Code.

FISCAL/RESOURCE IMPACT
The Summary Easement Vacation processing fee of $3,295, as set forth in the FY 2026 Municipal Fee Schedule, has been paid by the property trustee.

STAKEHOLDER ENGAGEMENT
The Real Estate Division in the Administrative Services Department collaborated with the property trustee and their representatives, the City’s Utilities, Planning, Public Works Departments and City Attorney’s Office, for necessary reviews of language and exhibits.

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ENVIRONMENTAL REVIEW
Council action on the summary vacation of the public service easement is exempt from review under the California Environmental Quality Act pursuant to Title 14, California Code of Regulations, Section 15305 as a minor alteration in land use limitations.

ATTACHMENTS
Attachment A: Resolution Vacating a Portion of a Public Service Easement at 590 Maybell Avenue
APPROVED BY:

Lauren Lai, Administrative Services Director
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Recorded at no charge in accordance with
Streets & Highways Code Section 8336 at
the request of and when recorded return to:

City of Palo Alto
Real Estate Division
250 Hamilton Avenue
Palo Alto, CA 94301

SPACE ABOVE LINE FOR RECORDER’S USE

APN: 137-25-088
Address: 590 Maybell Avenue
Palo Alto, CA 94306

SUMMARY VACATION
RESOLUTION NO. ____

RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO

SUMMARILY VACATING A PORTION OF A PUBLIC SERVICE EASEMENT AT 590 MAYBELL AVENUE, PALO ALTO, CA

WHEREAS, Section 8333 of the Streets and Highways Code authorizes the City Council to summarily vacate a public service easement in any of the following cases: (a) the easement has not been used for the purpose for which it was dedicated or acquired for five consecutive years immediately preceding the proposed vacation, (b) the date of dedication or acquisition is less than five years, and more than one year, immediately preceding the proposed vacation, and the easement was not used continuously since that date, (c) the easement has been superseded by relocation, or determined to be excess by the easement holder, and there are no other public facilities located within the easement; and

WHEREAS, on June 19, 1905, the map of Maybell Tract Mayfield, of which the property is a portion of Lot 11, was filed for record in Book “K” of Maps at Page 88, Records of Santa Clara County; and

WHEREAS, an easement on said property was dedicated for public utility purposes as shown on the map recorded on June 2, 1948, in Book 18 of Maps at Page 34, Records of Santa Clara County; and

WHEREAS, the City of Palo Alto Utilities, Planning, Public Works Departments and City Attorney’s Office, have evaluated and determined that a 5-foot portion of the 10-foot public utility easement located on said property is excess and no longer required for public utility purposes; and
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Attachment A - Resolution
Vacating a Portion of a
Public Service Easement at
590 Maybell Avenue

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WHEREAS, the City Council of the City of Palo Alto intends to summarily vacate a portion of the public utility easement as more particularly described in Exhibit “A” attached to this resolution and depicted on the plat map attached as Exhibit “B” to this resolution; and

NOW, THEREFORE, the City Council does hereby RESOLVE as follows:

SECTION 1. This vacation is made under the authority of California Streets and Highways Code Chapter 4 of Part 3 of Division 9, commencing at Section 8333 et seq. The portion of the public utility easement described herein on Exhibit “A” and depicted on the plat map attached as Exhibit “B” is excess and no longer required for public utility purposes.

SECTION 2. Based upon the findings made in Section 1 of this Resolution and the provisions of Section 8333 of the Streets and Highways Code, the City Council does hereby order that the portion of the public utility easement as shown on the said Exhibits “A” and “B” shall be summarily vacated.

SECTION 3. The City Clerk, acting by and through the Real Property Manager, is hereby directed to record at the Santa Clara County Clerk-Recorder’s Office a certified copy of this Resolution, including the Map.

SECTION 4. The portion of the public utility easement described in Exhibit “A” and depicted in the plat map attached as Exhibit “B” will no longer constitute a public utility easement from and after the date of recordation of the documents identified in Section 3 of this Resolution.

SECTION 5. The Council finds that the summary vacation of the portion of the public utility easement is exempt from review under the California Environmental Quality Act pursuant to Title 14 California Code of Regulations Section 15305 as a minor alteration in land use limitations.

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Attachment A - Resolution
Vacating a Portion of a
Public Service Easement at
590 Maybell Avenue

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INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

______________________________ ______________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

______________________________ ______________________________ Deputy City Attorney City Manager

______________________________
Director of Administrative Services
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Attachment A - Resolution
Vacating a Portion of a
Public Service Easement at
590 Maybell Avenue

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EXHIBIT 'A'

LEGAL DESCRIPTION

VACATION OF A PORTION OF A PUBLIC UTILITY EASEMENT
590 MAYBELL AVENUE, PALO ALTO,

SANTA CLARA COUNTY CALIFORNIA

ALL THAT CERTAIN REAL PROPERTY, SITUATE IN THE CITY OF PALO ALTO,

COUNTY OF SANTA CLARA , STATE OF CALIFORNIA BEING A PORTION OF THE LANDS OF 590 MAYBELL TRUST, DATED DECEMBER 26, 2019 OF THAT CERTAIN GRANT DEED RECORDED JULY 18, 2023 AS DOCUMENT NUMBER 25502066 ,

OFFICIAL RECORDS OF SANTA CLARA COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE MOST SOUTHERLY CORNER OF SAID LANDS, THENCE

ALONG THE NORTHERLY RIGHT OF WAY OF MAYBELL AVENUE, WIDTH VARIES, NORTH 28°48'00 " EAST 5.00 FEET TO THE POINT OF BEGINNING; THENCE LEAVING SAID RIGHT OF WAY, NORTH 61 °07'50 " WEST 120.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID LANDS;
THENCE ALONG THE WESTERLY LINE OF SAID LANDS , NORTH 28°48' 00" EAST 5.00 FEET;
THENCE LEAVING SAID LINE, SOUTH 61 °07'50 " EAST 120.00 FEET TO A POINT ON SAID NORTHERLY RIGHT OF WAY;
THENCE ALONG SAID RIGHT OF WAY, SOUTH 28°48'00" WEST 5.00 FEET TO THE POINT OF BEGINNING.

CONTAINING 600.00 SQUARE FEET;

AS SHOWN ON PLAT ATTACHED HERETO LABELED ' EXHIBIT B' AND BY THIS

REFERENCE MADE A PART HEREOF

END OF DESCRIPTION

PREPARED BY OR UNDER THE SUPERVISION OF
~27-Z-t'
DANIEL J. NAMYST, LS 9831
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Vacating a Portion of a
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590 Maybell Avenue

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30 I
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EXHIBIT 'B'

PLAT TO ACCOMPANY LEGAL DESCRIPTION

FOR VACATION OF A PORTION OF A PUBIJC
UTIIJTY EASEMENT. 590 MAYBELL AVENUE
PALO ALTO. CAIJFORNIA
JOB NO 2260140 SCALE: 1 "= 30'
DRAWN BY: ON PAGE 2 OF 2 FEBRUARY 2026
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Attachment A - Resolution
Vacating a Portion of a
Public Service Easement at
590 Maybell Avenue

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VACATION OF A PORTION OF THE PUE
North: -369.2805'
Segment #1 Line
Course: N61° 07' 50"W
North: -311.3427'
Segment #2 Line
Course: N28° 48' 00"E
North: -306.9611'
Segment #3 Line
Course: S61° 07' 50"E
North: -364.8990'
Segment #4 Line
Course: S28° 48' 00"W
North: -369.2805'
Perimeter: 250.00'
Error Closure:

Error North:

East: 1154.4521'
Length: 120.00'
East: 1049.3655'
Length: 5.00'
East: 1051.7742'
Length: 120.00'
East : 1156.8609'
Length: 5.00'
East: 1154.4521'
Area: 600.00 Sq. Ft.

0.0000 Course: N00° 00' 00"E

0.00000 East: 0.00000
Precision 1: 250000000.00
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Attachment A - Resolution
Vacating a Portion of a
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: May 18, 2026
Report #:2603-6140
TITLE
Adoption of a Resolution for Senate Bill 1, the Road Repair and Accountability Act, for Fiscal Year 2027, Providing the Project List for the Street Maintenance Project, Capital Improvement Program Project PE-86070; CEQA Status – Not a Project

RECOMMENDATION
Staff recommends that the City Council adopt the attached resolution for the Fiscal Year 2027 Street Maintenance Project, providing a project list funded by Senate Bill 1, the Road Repair and Accountability Act.

BACKGROUND/ANALYSIS
Senate Bill 1 (SB 1) established the Road Maintenance and Rehabilitation Account (RMRA) in 2017 to address deferred maintenance on the state highway and local streets and roads systems, with funding to be approved annually. Palo Alto's RMRA funding estimate for FY 2027 is $1,930,258. SB 1 funding requires that Council approve a resolution (Attachment A) providing a project list that includes four components:
Project description;
The locations of each proposed project;
Schedule for completion; and
Estimated useful life of improvement.

The adopted resolution must be sent to the California Transportation Commission by July 1, 2026. Staff recommends the RMRA funding for Fiscal Year 2027 be recognized in the Gas Tax Fund and transferred to the Capital Improvement Fund to be added to the Street Maintenance Project, PE-86070.

The SB 1 funding supported the City's goal of achieving an average citywide Pavement Condition Index (PCI) of 85 by 2019 with no street having a PCI less than 60. The City reached the 85 PCI goal in December 2018, and the additional funding helps enable the City to address streets that still have PCI scores less than 60. The funding will be used on the Fiscal Year 2027 Asphalt Paving Project for the streets shown in Attachment B. Work on this project is Item 5
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anticipated to be completed by Summer 2027. An award of construction contract is anticipated to be brought to Council for approval in Winter 2026. The estimated useful life of a street overlay is 30 years.

The City uses StreetSaver, the Metropolitan Transportation Commission’s (MTC) pavement management system which is used by almost all Bay Area jurisdictions. The PCI is calculated by evaluating a sample pavement section of each block for different rating variables from mild to severe – including raveling, potholes, amount of trenches, and base failures. These factors are entered into the StreetSaver program and a PCI is calculated. All staff who evaluate street conditions and pavement distresses have multiple years of experience and have been trained by MTC.

While staff uses the PCI scores to prioritize streets, staff also takes into consideration additional information including coordination with Utilities projects and Office of Transportation planned striping improvements. Staff also takes into consideration whether the street has bicycle lanes or is a bicycle boulevard. Staff tries to group multiple streets in a neighborhood whenever possible, so that construction is not occurring over multiple years if it can be avoided.

Additionally, each block has its own estimated repair cost, which impacts how many streets can be included in each project given the annual funding amounts.

FISCAL/RESOURCE IMPACT
Monthly appropriations from the State Controller's Office will begin in July 2026 for Palo Alto's Fiscal Year 2027 RMRA funding. The SB1 funding estimate for Fiscal Year 2027 is $1,930,258.

There is $1,848,523 budgeted in SB 1 funding in the Street Maintenance project (PE-86070) as part of the Fiscal Year 2027 Proposed Capital Budget and subject to Council adoption of the Fiscal Year 2027 Capital Budget, currently scheduled for June 15, 2026. Ongoing funding is estimated to be $1.9 million annually. The Street Maintenance project (PE-86070) budget will be aligned as needed when the revenue is fully realized and will be adjusted to actuals at mid- year Fiscal Year 2027 as needed and with Fiscal Year 2028 budget development. Funding from RMRA in future fiscal years will be recognized and appropriated as part of the annual CIP budget process.

STAKEHOLDER ENGAGEMENT
All streets have been coordinated with the City’s Utilities Department and the Office of Transportation to minimize the cutting of newly resurfaced streets. Additionally, staff reviews the proposed five-year paving plan streets annually with the Pedestrian and Bicycle Advisory Committee (PABAC) Repaving Subcommittee with an emphasis on the streets included in the first year of the plan.

ENVIRONMENTAL REVIEW
The adoption of this resolution does not meet the definition of a project under Public Resources Code Section 21065, thus no environmental assessment under the California Environmental Quality Act is required.

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ATTACHMENTS
Attachment A: SB 1 FY 2027 Resolution
Attachment B: FY 2027 Project Overlay List
APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
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Attachment A
Not Yet Approved
180321 cc 0260111
Resolution No. ________
Resolution of the Council of the City of Palo Alto to Adopt a List of Projects for Fiscal Year 2026-2027 Funded by SB 1: The Road Repair and Accountability Act of 2017

R E C I T A L S
A. Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 in order to address the significant multi-modal transportation funding shortfalls statewide; and
B. SB 1 includes accountability and transparency provisions that will ensure the residents of the City of Palo Alto (City) are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and C. The City must adopt a list of all projects proposed to receive funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1 by resolution, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and D. The City, will receive an estimated $1,930,258 in RMRA funding in Fiscal Year 2026-2027 from SB 1; and
E. This is the tenth year in which the City is receiving SB 1 funding which enables the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and F. The City used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the community’s priorities for transportation investment; and G. The funding from SB 1 will help the City maintain and rehabilitate various streets throughout the City this year and many similar projects into the future; and H. The 2024 California Statewide Local Streets and Roads Needs Assessment found that the City’s streets and roads are in “excellent” condition and this revenue will help us maintain the overall quality of our road system and implement complete streets projects over the next decade; and
I. The SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive co-benefits statewide.

NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:

SECTION 1. The foregoing recitals are true and correct.

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Attachment A - SB 1 FY
2027 Resolution

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Attachment A
Not Yet Approved
180321 cc 0260111
SECTION 2. The City of Palo Alto hereby adopts the following list of streets planned to be funded in-part or solely with fiscal year 2026-2027 with Road Maintenance and Rehabilitation Account revenues:

FY 2027 Street Resurfacing Project includes pavement repair, sidewalk, valley gutter, curb and gutter replacement, upgraded curb ramps, and street paving. The following streets are included in the FY2026 Street Resurfacing Project: Bibbits Drive (Louis Rd to Gailan Ave), Curtner Avenue (El Camino Real to Park Blvd), Downing Lane (Forest Ave to Homer Ave), Embarcadero Road (Middlefield Road to Fulton St), Faber Place (Embarcadero Rd to End), Fabian Way (West Bayshore Rd to Charleston Rd), Fabian Street (Charleston Rd to San Antonio Rd), Fielding Drive (Fielding Dr to End), La Mata Way (Matadero Rd to End), McKellar Lane (Kelly Wy to Lorabelle Ct), Palo Alto Avenue (Byron St to Middlefield Rd), Park Avenue (Ash St to Park Blvd), Saint Michael Drive (Saint Claire Dr to Saint Claire Dr), Saint Michael Court (Saint Michael Dr to End), Stanford Avenue (City Limit to Amherst St), Walter Hays Drive (Stanley Wy to Walnut Dr), Wintergreen Way (Ross Rd to End).

The estimated useful life is 30 years. Construction of FY2027 Street Resurfacing Project will start in Fall 2026 and be completed in Summer 2027.
//
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Attachment A - SB 1 FY
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Attachment A
Not Yet Approved
180321 cc 0260111
SECTION 3. The Council finds that the adoption of this resolution does not meet the definition of a project under Public Resources Code Section 21065, thus no environmental assessment under the California Environmental Quality Act is required.

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 Administrative Services
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Attachment A - SB 1 FY
2027 Resolution

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FY2027 OVERLAY LIST
Street From Street To Street PCI
Bibbits Drive Louis Road Gailen Avenue 50
Curtner Avenue El Camino Real Park Boulevard 42
Downing Lane Forest Avenue Homer Avenue 47
Embarcadero Road Middlefield Road Fulton Street 50
Faber Place Embarcadero Road End 42
Fabian Way West Bayshore Road Charleston Road 27
Fabian Street Charleston Road San Antonio Road 51
Fielding Drive Fielding Drive End 35
La Mata Way Matadero Road End 72
McKellar Lane Kelly Way Lorabelle Court 44
McKellar Lane Lorabelle Court End 53
Palo Alto Avenue Byron Street Middlefield Road 45
Park Avenue Ash Street Park Blvd 48
Saint Michael Drive Saint Claire Drive Saint Michael Court 51 Saint Michael Drive Saint Michael Court Saint Claire Drive 50 Saint Michael Court Saint Michael Drive End 54
Stanford Avenue City Limit Amherst Street 46
Walter Hays Drive Stanley Way Walnut Drive 46
Wintergreen Way Ross Road End 36
Average PCI: 47
FY 2027 Overlay (July 2026 - June 2027)
1 of 1
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Attachment B - FY 2027
Project Overlay List

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: May 18, 2026
Report #:2603-6186
TITLE
Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto Business Improvement District (BID) Assessment for Fiscal Year 2027; CEQA status – not a project.

RECOMMENDATION
Staff recommends that Council adopt the attached resolution suspending the levy of the Palo Alto Downtown Business Improvement District assessment for Fiscal Year (FY) 2027 (Attachment A).

BACKGROUND
The Palo Alto City Council established the Palo Alto Downtown Business Improvement District (BID) in 2004 pursuant to the California Parking and Business Improvement Area Law to maintain economic vitality and physical maintenance of the Palo Alto Downtown business district. The Council appointed the Palo Alto Downtown Business and Professional Association (PADBPA), a non-profit corporation, as the advisory board and administrator of the BID.

PADBPA, acting through its independent Board of Directors, has historically advised the Council on the method and basis for levy of assessments in the BID and has managed the expenditure of revenues derived from the assessments.

In response to organizational changes at PADBPA and changes resulting from the COVID-19 pandemic, and with the concurrence of the City Council, the City allowed the contract with PADBPA to expire on June 30, 2020. The Chamber and PADBPA identified a need to build support for a resumption of the BID assessment within the business community before collecting a new assessment and establishing a new management agreement.

On March 1, 2022, the Finance Committee discussed options for the FY 2023 Business Registry Certificate (BRC) and BID processes (CMR 1390211). The Committee reviewed three options for 1 03/01/2022 Finance Committee, Review the Business Registry Certificate and Business Improvement District FY 2023 Processes and recommendation to City Council on the Renewal Processes Item 6
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the BRC and BID and forwarded their recommendation to the City Council on April 4, 2022, CMR 1390123, to restore the BRC in the 2022-2023 collection timeframe, using the established structure used in pre-pandemic years, while continuing the pause of BID assessments again in FY 2023. The Palo Alto City Council supported the Finance Committee recommendation and approved a resolution to not levy an assessment for FY 2023. The BID was subsequently paused again in FY 20244, FY 20255, and FY 20266. Staff continues this recommendation for FY 2027.

ANALYSIS
Staff recommends that the Council approve the recommendation for FY 2027 and continue the suspension of the Downtown Business Improvement District assessment for one additional year. This approach remains consistent with prior City Council direction7 and reflects the City’s ongoing work to evaluate the future structure and funding framework for business district support.

In recent years, the City has advanced several related efforts, including the Comprehensive Economic Development Strategy approved by the City Council in August 20238, continued work on the University Avenue Streetscape Project, and expanded economic development resources within the City Manager’s Office. These efforts include ongoing coordination with businesses, property owners, and community stakeholders and support broader City-led initiatives focused on activation of downtown and commercial areas, enhancing public spaces, and consideration of district management approaches. Continuing the waiver for FY 2027 allows this work to progress as the City further develops and evaluates a long-term approach to downtown 3 04/04/2022 City Council, Approve Finance Committee Recommendation for FY 2023 to (a) Return to the Customary Pre- Pandemic Business Registry Certificate Requirement and Fee, and (b) Pause for One Year the Downtown Business Improvement District Assessment Program
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendasminutes/2022/20220404/20220404pccsmamendedlinked1.pdf 4 04/14/2023 City Council, PUBLIC HEARING: Adoption of a Resolution Providing that the City will Not Levy Assessments for the Downtown Business Improvement District for FY 2024
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=1974&meetingTemplateType=2 5 05/20/2024 Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto Business Improvement District (BID) Assessment for Fiscal Year 2025; CEQA status – not a project https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateTypeid=4957&meetingTemplateType=2&compiledMeetingD ocumentId=10006
6 05/27/2025 City Council, Adoption of Resolution Suspending the Levy of Assessments on the Downtown Palo Alto Business Improvement District (BID) Assessment for Fiscal Year 2026; CEQA status – not a Project
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83417&dbid=0&repo=PaloAlto&searchid=3341e503-9252-4292- 958f-d659a44d09a7&cr=1
7 Prior Council Decisions: FY 2021 (CMR 11219) and in FY 2022 (CMR 12255) in response to the pandemic, along with the Finance Committee’s recommendation to not levy assessments for FY 2023 (CMR 13901) and FY 2024 (CMR 2303-1184) and Council in FY 2025 (CMR 2403-2822) and FY 2026 (CMR 2503-4251). 8 08/14/2023 Adoption of a Comprehensive Economic Development Strategy to Guide City Priorities, Initiatives, and Project Outcomes
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82422&dbid=0&repo=PaloAlto Item 6
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economic development, including the future role of the Business Improvement District. Staff continue to hold regular meetings with downtown businesses to engage on business retention, concerns, and future investments. Some downtown businesses have recently expressed interest in enhanced services to address homelessness outreach and cleanliness, so staff anticipate engagement over the upcoming year to determine if the BID might have a role in addressing these issues.

Under the Parking and Business Improvement Area Law of 1989, a public hearing is not required if no assessment is levied. If the City Council elects to resume BID assessments in a future year, a noticed public hearing will be required prior to doing so.

FISCAL/RESOURCE IMPACT
The BID is set up as a separate fund within the City’s budget. In prior years, when active, the BID required a General Fund subsidy as collected assessments fell short of the costs of operating the BID. The subsidy amounted to $70,000 in FY 2020. Historically, the City acts as the collection agent for BID revenues and reimburses PADBPA’s expenses after receipt and verification of invoices. While the BID is paused, an estimated $80,000 in annual revenue will not be collected, and no BID business activities will be provided. In the past, business activities have included the streetlight banner program, Lytton Plaza enhancements, and summer concerts, among others.

In prior years, staffing resources have included staff time from the City Manager’s Office and Administrative Services Department to provide oversight to the BID, administer the contract with HdL (the third-party administrator for both BID and BRC), liaise with stakeholders, and prepare the annual reauthorization.

STAKEHOLDER ENGAGEMENT
Staff continues to discuss the potential options for the future of the BID with downtown business stakeholders, including former leaders of PADBPA and the Chamber of Commerce.

Additionally, Economic Development staff has started to reengage downtown stakeholders (property and business owners) and commenced monthly meetings in April 2026. The May 2026 downtown stakeholders meeting will include a BID agenda item to begin discussions on the assessment district’s future for economic vitality and downtown activation.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act because suspending imposition of BID assessments is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).

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ATTACHMENTS
Attachment A: Resolution Declaring Intention to Not Levy Assessments APPROVED BY:

Lauren Lai, Administrative Services Director
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Attachment A

NOT YET ADOPTED

1 Resolution No.

Resolution of the Council of the City of Palo Alto Declaring Its Intention to Not Levy Assessments Against Businesses Within the Downtown Palo Alto Business Improvement District for Fiscal Year 2027

R E C I T A L S
A. The Parking and Business Improvement Area Law of 1989 (the "Law"), California Streets and Highways Code Sections 36500 et seq., authorizes the City Council to levy an assessment against businesses within a parking and business improvement area which is in addition to any assessments, fees, charges, or taxes imposed in the City.

B. Pursuant to the Law, in 2004 the City Council adopted Ordinance No. 4819 establishing the Downtown Palo Alto Business Improvement District (the "District") in the City of Palo Alto.

C. The City Council, by Resolution No. 8416, appointed the Board of Directors of the Palo Alto Downtown Business & Professional Association (“PADBPA”), a California nonprofit mutual benefit corporation, to serve as the Advisory Board for the District (the "Advisory Board").

D. Beginning in March of 2020 and continuing through the present, Downtown businesses have been substantially impacted by the COVID- 19 pandemic, the public health measures taken to reduce the spread of the virus, and the resulting statewide economic contraction. In recognition of these impacts, the City Council refunded fiscal year 2020 BID assessments and declined to levy assessments in fiscal years 2021, 2022, 2023, 2024, and 2025.

E. The Advisory Board for the District is currently defunct, and therefore the Council has not had the opportunity to review or approve the annual report on the District’s improvements and activities, as well as the proposed assessments.

F. In recognition of the challenges continuing to effect downtown businesses and understanding the need for a new direction on BID management, the City Council has determined not to levy BID assessments for fiscal year 2027 (July 1, 2026 through June 30, 2027).

G. Because no assessment is proposed for fiscal year 202 7, a public hearing on the assessment is not required under the Parking and Business Improvement Area Law of 1989.

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

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

SECTION 2. Based on the findings herein, no assessments shall be levied for the District for fiscal year 2027 (July 1, 2026 through June 30, 2027). The District

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Attachment A

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2 shall remain in effect and the Council will consider the levy of assessments for following fiscal years.

SECTION 3. The Council finds that the adoption of this Resolution does not meet the definition of a project under Section 21065 of the California Environmental Quality Act and, therefore, no environmental review is required.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager

Director of Administrative Services

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: May 18, 2026
Report #:2604-6278
TITLE
Adopt a Resolution Approving Amendment Number 1 to California Board of State and Community Corrections Agreement Number BSCC 1164-23 for Organized Retail Theft Grant to Extend the Term One Year with No Change to the Not-To-Exceed Total; CEQA status—not a project.

RECOMMENDATION
Staff recommends that City Council approve a Resolution (Attachment A) to approve and authorize the City Manager, or their designee, to execute Agreement Amendment No. 1 with State of California Board of State and Community Corrections (BSCC) for the Organized Retail Theft grant to extend the ending date one year (June 1, 2027 to June 1, 2028), with no change to the original funding amount.

BACKGROUND
The State of California’s Budget Act of 2022 (SB 154) established the Organized Retail Theft Prevention Grant Program to support local law enforcement efforts to prevent and respond to organized retail theft, motor vehicle theft, motor vehicle accessory theft, and cargo theft. In July 2023, the City submitted an application for grant funding. In September 2023, the Board of State and Community Corrections approved the City’s application and awarded the City $5.2 million, subject to City Council acceptance. The City Council accepted the grant on December 4, 20231. The grant period began on October 1, 2023, with grant operations scheduled to end on December 31, 2026, and final work to be completed by June 1, 2027.

The grant supports targeted efforts to reduce organized retail theft and related offenses, including motor vehicle theft and license plate theft. Since implementation, staff has observed a measurable reduction in theft-related incidents. Reported retail theft in 2025 decreased by 1 City Council City Council, December 4, 2023; Agenda Item #4; SR #:2309-2066 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13062 Item 7
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72% compared with 2022, including both organized retail theft incidents and shoplifting incidents. Staff’s analysis also shows a steady decline in reported retail theft over the past 2.5 years during the active grant period; with losses as high as $1.5M in CY2022 to $429K in CY2025. Program activity, scope of work, and results are reported through the State’s Organized Retail Theft Prevention Grants dashboard administered by the Board of State and Community Corrections3.

ANALYSIS
In February 2026, the BSCC approved an amendment extending the grant activity period by one year and adding policy language regarding the use of generative artificial intelligence (AI)4. The extension is intended to address staffing challenges being experienced by agencies throughout the State and to provide additional time to complete grant-funded activities for the highest and best program impact. The amended grant term extends the deadline for grant activity to June 1, 2028.

In March 2026, the Department was notified, via email from the BSCC, requesting City Council approval by resolution to accept the extension and the new AI clause. The amendment revises the agreement by replacing Exhibit A, Scope of Work -Reporting timelines (extending all dates one year); replacing Exhibit B - Invoicing and Payments timeline (extending all dates one year); and adding Exhibit C-Generative AI Disclosure obligations, which did not exist in the original agreement, but would require the City, or its subcontractors, to disclose the use of Generative AI if used in reports related to this grant. The original agreement, scope of work and timelines are in the dashboard but can be found directly at this link (https://www.bscc.ca.gov/wp- content/uploads/68-Palo-Alto-Police.pdf).

3 State Organized Retail Theft Prevent Grants Dashboard https://www.bscc.ca.gov/organized-retail-theft-grant-program/ 4 California Board of State and Community Corrections Board Meeting, February 12, 2026, Item B https://www.bscc.ca.gov/s_boardmeetingscheduleagendasminutes/ Item 7
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FISCAL/RESOURCE IMPACT
This grant is structured on a reimbursement basis, meaning the City is reimbursed for eligible expenses after they are incurred. Through calendar year 2025, the City has received $2.57 million in reimbursements for grant-related activities and has an available remaining grant balance of approximately $2.6 million. To date, grant funding has primarily supported overtime costs for directed patrol and investigations in retail districts; staff time dedicated to investigating stolen vehicles and license plates; training in investigative methods and practices; acquisition of automated license plate reader (ALPR) technology; alternative pursuit technology, including GPS tracking devices deployed from patrol vehicles; a patrol vehicle for retail patrol; electric bicycles for retail patrol; and a vehicle immobilization spike system.

Staff anticipates using the remaining funds to continue supporting directed patrol and investigative activities, as well as additional technologies that assist with investigations and apprehensions of retail crimes. Consistent with all City procurements, any purchases funded through the grant will be subject to the City’s purchasing procedures, including review under the City’s surveillance technology policy, if applicable, and compliance with AB 481 military equipment disclosure requirements. Grant-related appropriations and expenditures are incorporated into the City’s budget development process and may be updated periodically during the fiscal year, including through mid-year adjustments as needed.

STAKEHOLDER ENGAGEMENT
Staff continues to work directly with the retailers and stakeholders.

ENVIRONMENTAL REVIEW
The California Public Resources Code § 21065 includes a definition of a “project” as subject to the California Environmental Quality Act (CEQA) if it is an activity directly undertaken by a public agency which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. This project is exempt from the provisions of the CEQA, pursuant to Section 15061(b)(3) of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the activity will have a significant effect on the environment.

ATTACHMENTS
Attachment A: Resolution approving Amendment No. 1 to Grant Agreement BSCC 1164-23 (including the Amendment itself).

APPROVED BY:

James Reifschneider, Police Chief
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156_20260423_ts24 1

Resolution No. _____
Resolution of Council of the City of Palo Alto Approving and Authorizing the City Manager to Execute Amendment 1 to the State of California’s Board of State and Community Corrections Grant Agreement BSCC 1164-23 for the Organized Retail Theft Grant Program

R E C I T A L S

A. The City and the State of California’s Board of State and Community Corrections entered into a grant agreement from October 1, 2023 through June 1, 2027, awarding approximately $5.17 million to the City to combat organized retail theft. The agreement number is BSCC 1164-23. (“Grant Agreement”).

B. The City now desires to approve Amendment 1 to the Grant Agreement to extend the term for one year to June 1, 2028, among other amendments to the terms (“Amendment 1”).

NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:

SECTION 1. Amendment 1 to the Grant Agreement as attached as Exhibit A to this Resolution is hereby approved. The City Manager is hereby authorized and directed, for and in the name and on behalf of the City, to execute Amendment 1 in substantially said forms.

SECTION 2. Upon City Council approval of any other amendments to the Grant Agreement, the City Manager is hereby authorized and directed, for and in the name and on behalf of the City, to execute such amendments.

SECTION 3. In the case the City Manager is absent or unavailable, any person holding such office in an interim or acting capacity is authorized to execute any amendments described in Sections 1 and 2 above.

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156_20260423_ts24 2

SECTION 4. This resolution shall take effect upon its adoption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

__________________________ _____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

__________________________ _____________________________ Assistant City Attorney City Manager

_____________________________
Chief of Police

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156_20260423_ts24 3

Exhibit A
Amendment No. 1 to Grant Agreement BSCC 1164-23
(see following pages)
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STATE OF CALIFORNIA – DEPARTMENT OF GENERAL SERVICES SCO ID: 5227-BSCC116423-A1 STANDARD AGREEMENT AGREEMENT NUMBER AMENDMENT NUMBER Purchase Authority Number STD 213A (Rev. 07/2019)
☒ CHECK HERE IF ADDITIONAL PAGES ARE ATTACHED
BSCC 1164-23 1 BSCC-5227

1. This Agreement is entered into between the Contracting Agency and the Contractor named below:

CONTRACTING AGENCY NAME

BOARD OF STATE AND COMMUNITY CORRECTIONS

CONTRACTOR NAME
City of Palo Alto

2. The term of this Agreement is:

START DATE
OCTOBER 1, 2023

THROUGH END DATE
JUNE 1, 2028

3. The maximum amount of this Agreement after this Amendment is:
$5,176,812.00

4. The parties mutually agree to this amendment as follows. All actions noted below are by this reference made a part of the Agreement and incorporated herein:

This amendment adds one year to the term of the grant agreement. The new end date is June 1, 2028.

Exhibit A: Scope of Work, Item 5. Reporting Requirements is amended by replacing the prior schedule with the attached Exhibit A; Scope of Work, Item 5. Reporting Requirements.

Exhibit B: Budget Detail and Payment Provisions is amended by replacing the prior Exhibit B, Item 1.

Invoicing and Payments with the attached Exhibit B, Item 1. Invoicing and Payments.

Exhibit C: General Terms and Conditions is amended by adding the attached Exhibit C, Item 21.

Generative AI Disclosure Obligations.

All other terms and conditions shall remain the same.

IN WITNESS WHEREOF, THIS AGREEMENT HAS BEEN EXECUTED BY THE PARTIES HERETO.

CONTRACTOR
CONTRACTOR NAME (if other than an individual, state whether a corporation, partnership, etc.) City of Palo Alto

CONTRACTOR BUSINESS ADDRESS CITY STATE ZIP
250 Hamilton Avenue Palo Alto CA 94301

PRINTED NAME OF PERSON SIGNING TITLE
Ed Shikada City Manager

CONTRACTOR AUTHORIZED SIGNATURE DATE SIGNED


CONTRACTING AGENCY

CONTRACTING AGENCY NAME

BOARD OF STATE AND COMMUNITY CORRECTIONS

CONTRACTING AGENCY ADDRESS CITY STATE ZIP
2590 Venture Oaks Way, Ste 200 Sacramento CA 95833

PRINTED NAME OF PERSON SIGNING TITLE
COLLEEN CURTIN Deputy Director

CONTRACTING AGENCY AUTHORIZED SIGNATURE DATE SIGNED

CALIFORNIA DEPARTMENT OF GENERAL SERVICES APPROVAL: EXEMPT PER SCM, VOLUME 1, CH. 4.06 Exhibit A
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BSCC 1164-23 A1

Page 1 of 3 ends

EXHIBIT A: SCOPE OF WORK

5. REPORTING REQUIREMENTS
A. Grantee will submit quarterly progress reports in a format prescribed by the BSCC.

These reports, which will describe progress made on program objectives and include required data, shall be submitted according to the following schedule:

Quarterly Progress Report Periods Due no later than:

1. October 1, 2023 to December 31, 2023 February 15, 2024

2. January 1, 2024 to March 31, 2024 May 15, 2024

3. April 1, 2024 to June 30, 2024 August 15, 2024

4. July 1, 2024 to September 30, 2024 November 15, 2024

5. October 1, 2024 to December 31, 2024 February 15, 2025

6. January 1, 2025 to March 31, 2025 May 15, 2025

7. April 1, 2025 to June 30, 2025 August 15, 2025

8. July 1, 2025 to September 30, 2025 November 15, 2025

9. October 1, 2025 to December 31, 2025 February 15, 2026

10. January 1, 2026 to March 31, 2026 May 15, 2026

11. April 1, 2026 to June 30, 2026 August 15, 2026

12. July 1, 2026 to September 30, 2026 November 15, 2026

13. October 1, 2026 to December 31, 2026 February 15, 2027

14. January 1, 2027 to March 31, 2027 May 15, 2027

15. April 1, 2027 to June 30, 2027 August 15, 2027

16. July 1, 2027 to September 30, 2027 November 15, 2027

17. October 1, 2027 to December 31, 2027 February 15, 2028

B. Evaluation Documents Due no later than:

1. Local Evaluation Plan April 1, 2024

2. Final Local Evaluation Report June 1, 2028

C. Other Due no later than:

Financial Audit Report June 1, 2028

Grantees that are unable to demonstrate that they are making sufficient progress toward project goals and objectives and show that funds are being spent in accordance with the Grant Agreement could be subject to a withholding of funds.

EXHIBIT B: BUDGET DETAIL AND PAYMENT PROVISIONS

1. INVOICING AND PAYMENT
A. The Grantee shall be paid quarterly in arrears by submitting an invoice (Form 201) to the BSCC that outlines actual expenditures claimed for the invoicing period.

Quarterly Invoicing Periods: Due no later than:

1. October 1, 2023 to December 31, 2023 February 15, 2024

2. January 1, 2024 to March 31, 2024 May 15, 2024

3. April 1, 2024 to June 30, 2024 August 15, 2024
Exhibit A
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4. July 1, 2024 to September 30, 2024 November 15, 2024

5. October 1, 2024 to December 31, 2024 February 15, 2025

6. January 1, 2025 to March 31, 2025 May 15, 2025

7. April 1, 2025 to June 30, 2025 August 15, 2025

8. July 1, 2025 to September 30, 2025 November 15, 2025

9. October 1, 2025 to December 31, 2025 February 15, 2026

10. January 1, 2026 to March 31, 2026 May 15, 2026

11. April 1, 2026 to June 30, 2026 August 15, 2026

12. July 1, 2026 to September 30, 2026 November 15, 2026

13. October 1, 2026 to December 31, 2026 February 15, 2027

14. January 1, 2027 to March 31, 2027 May 15, 2027

15. April 1, 2027 to June 30, 2027 August 15, 2027

16. July 1, 2027 to September 30, 2027 November 15, 2027

17. October 1, 2027 to December 31, 2027 February 15, 2028

Final Invoicing Periods*: Due no later than:

18. January 1, 2028 to March 31, 2028 May 15, 2028

19. April 1, 2028 to June 1, 2028 August 15, 2028
*Note: Project activity period ends December 31, 2027. The period of January 1, 2028, to June 1, 2028 is for completion of Final Local Evaluation Report and financial audit only.

B. All project expenses must be incurred by the end of the project activity period, December 31, 2027, and included on the final invoice due February 15, 2028. Project expenditures incurred after December 31, 2027 will not be reimbursed.

C. The Final Local Evaluation Report is due to BSCC by June 1, 2028. Expenditures incurred for the completion of the Final Local Evaluation Report during the period of January 1, 2028, to June 1, 2028, must be submitted during the Final Invoicing Periods, with the final invoice due on August 15, 2028. Supporting fiscal documentation will be required for all expenditures claimed on during the Final Invoicing Periods and must be submitted with the final invoice.

D. The Financial Audit Report is due to BSCC by June 1, 2028. Expenditures incurred for the completion of the financial audit during the period of January 1, 2028, to June 1, 2028, must be submitted during the Final Invoicing Periods, with the final invoice due on August 15, 2028. Supporting fiscal documentation will be required for all expenditures claimed during the Final Invoicing Periods and must be submitted with the final invoice.

E. Grantee shall submit an invoice to the BSCC each invoicing period, even if grant funds are not expended or requested during the invoicing period.

F. Upon the BSCC’s request, supporting documentation must be submitted for project expenditures. Grantees are required to maintain supporting documentation for all expenditures on the project site for the life of the grant and make it readily available for re view during BSCC site visits. See Exhibit A. Scope of Work, Item 6. Project Records.

Exhibit A
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approving Amendment No.
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1164-23 (including the
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EXHIBIT C: GENERAL TERMS AND CONDITIONS

21. GENERATIVE AI DISCLOSURE OBLIGATIONS:

A. The following terms are in addition to the defined terms and shall apply to the Contract:
1) “Generative AI (GenAI)” means an artificial intelligence system that can generate derived synthetic content, including text, images, video, and audio that emulates the structure and characteristics of the system's training data. (Gov. Code § 11549.64.)
B. Contractor shall immediately notify the State in writing if it: (1) intends to provide GenAI as a deliverable to the State; or (2), intends to utilize GenAI, including GenAI from third parties, to complete all or a portion of any deliverable that materially impacts: (i) functionality of a State system, (ii) risk to the State, or (iii) Contract performance. For avoidance of doubt, the term “materially impacts” shall have the meaning set forth in State Administrative Manual (SAM) § 4986.2 Definitions for GenAI.

C. Notification shall be provided to the State designee identified in this Contract.

D. At the direction of the State, Contractor shall discontinue the provision to the State of any previously unreported GenAI that results in a material impact to the functionality of the System, risk to the State, or Contract performance, as determined by the State.

E. If the use of previously undisclosed GenAI is approved by the State, then Contractor will update the Deliverable description, and the Parties will amend the Contract accordingly, which may include incorporating the GenAI Special Provisions into the Contract, at no additional cost to the State.

The State, at its sole discretion, may consider Contractor’s failure to disclose or discontinue the provision or use of GenAI as described above, to constitute a material breach of Contract when such failure results in a material impact to the functionality of the System, risk to the State, or Contract performance. The State is entitled to seek any and all remedies available to it under law as a result of such breach, including but not limited to termination of the contract.

Exhibit A
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Attachment A - Resolution
approving Amendment No.
1 to Grant Agreement BSCC
1164-23 (including the
Amendment itself).

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: May 18, 2026
Report #:2602-5986
TITLE
Adoption of a Resolution Authorizing the Borrowing of Funds on an Interim Basis for Improvements to the City's Regional Water Quality Control Plant and Authorizing the Execution and Delivery of a Revolving Credit Agreement and Related Note; CEQA Status - Not a Project

RECOMMENDATION
Staff recommend that the City Council adopt the attached resolution (Attachment A) authorizing the borrowing of funds on an interim basis for improvements to the City's Regional Water Quality Control Plant and Authorize the Execution and Delivery of a Revolving Credit Agreement and Related Note for a total not to exceed $31 million for five years.

EXECUTIVE SUMMARY
The City of Palo Alto and its partner agencies are advancing more than $460 million in essential capital improvements at the Regional Water Quality Control Plant, and staff recommend approval of a $31 million Line of Credit (LOC) agreement with US Bank to ensure efficient project delivery and maintain flexible cash flow. Debt service obligations have been incorporated into the City’s financial forecast and upcoming utility rate planning, with all partner agencies—except the City of Mountain View, which will cash-fund its portion— participating in the LOC. The LOC is secured by net revenues of the City’s Wastewater Treatment Fund and the Wastewater Collection Fund.

BACKGROUND
The Regional Water Quality Control Plant (RWQCP), originally constructed in 1934 and substantially expanded in 1972 with funding from the Federal Clean Water Act, is an advanced tertiary treatment facility that provides wastewater treatment for Palo Alto, Mountain View, Los Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University. Palo Alto owns the RWQCP infrastructure and administers the Wastewater Treatment Fund on behalf of all the partner agencies under the Basic Agreement between the Cities of Palo Alto, Mountain View, and Los Altos executed in 1968 and subsequent agreements with the minor partner agencies Item 8
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(hereby collectively referred to as the “partner agreements”). The Wastewater Collection Fund is Palo Alto’s partner to the Wastewater Treatment Plan; the Wastewater Collection Fund develops the wastewater rate proposals based on Palo Alto’s share of the treatment plus the expenses that include operating and maintenance (O&M) and capital costs for the collection system.

The RWQCP is currently implementing over $460 million in capital improvements identified in the 2012 Long Range Facilities Plan (LRFP), including major projects such as the Secondary Treasury Upgrades (WQ-190001), Advanced Water Purification System (WQ-19003), and Headworks Facility Replacement (WQ-16002). These projects are in various stages of design and construction and are funded through a combination of State Revolving Fund (SRF) loans, grants, and debt financing.

Staff initiated a comprehensive update to the LRFP in 20241. The LRFP Update, currently underway, will reassess and reprioritize capital improvement needs over the next 50 years, incorporating consideration of updated regulatory requirements, emerging contaminants, and the current condition and performance of existing RWQCP infrastructure. The update will refine project scopes and cost estimates for remaining projects from the 2012 LRFP and identify additional capital improvements necessary to maintain reliable and compliant plant operations.

The LRFP Update is expected to significantly increase RWQCP’s overall capital needs, highlighting the importance of flexible financing tools such as the proposed LOC.

On November 4, 2025, the Finance Committee received an update of the capital improvement program, LRFP Update, capital and O&M cost allocations, program funding strategies and reserve policy2. Staff’s funding strategies include the following sources:
State Revolving Fund (SRF) loans administered by the State Water Resources Control Board
U.S. Environmental Protection Agency Water Infrastructure Finance and Innovation Act (WIFIA) loans
Utility revenue bonds issued through capital markets
Line of Credit (LOC)
Capital budget for smaller or shorter-term projects.

The selection of the funding source for each project depends on program eligibility (for SRF and WIFIA), prevailing interest rates at the time of the loan or bond issuance, repayment terms, and cash flow needs. Annual debt service payments are shared among all RWQCP partner agencies, with the exception of the City of Mountain View, through amendments to their partner agreements. Partner amendments are scheduled to be presented to the City Council in late 1 City Council, June 10, 2024; Agenda Item #6; SR# 2405-2993, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82887&dbid=0&repo=PaloAlto 2 Finance Committee, November 4, 2025:
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summer/early fall. Palo Alto is responsible for 38.16% share of debt-financed costs. These obligations directly affect the City’s Wastewater Collection Fund and are the primary driver for projected rate adjustments.

The LOC provides flexibility that is critical for project delivery by smoothing cash flow requirements and accommodating uncertainty in the timing and scale of capital expenditures.

The November 2025 Finance Committee report2 includes and LOC cost analysis. In June 2024, Council authorized staff to obtain a $31 million Line of Credit for the Wastewater Treatment Fund5; this authority allows the City Manager to negotiate and execute the LOC however per Palo Alto Municipal Code (PAMC) section 12.28, the LOCs must be approved by Council via resolution (Attachment A).

ANALYSIS
In late February 2026, the City’s municipal advisor, Public Financial Management (PFM) released a request for proposal (RFP) for an LOC. To provide the City with flexibility and distinct rates, the RFP requested proposals for both taxable and tax-exempt draws. The RFP was distributed to 19 banks and received two proposals. Staff evaluated and discussed both proposals with the City’s financial advisor, PFM. Pricing for both proposals is comparable to other proposals received for other agencies of similar facility size and projects (i.e. water or water treatment). Staff recommend and has negotiated a five-year LOC with US Bank. Table 1 summarizes the pricing and fees received from BMO and US Bank. As of May 5, 2026, the one- month SOFR rate is 3.6%.

Table 1: Pricing and Fee Comparison
BMO
US Bank
(Recommended)
Pricing Tax-Exempt Rate: 82% 1M SOFR + 1.45%
Taxable Rate: 1M SOFR + 1.20%
Undrawn Fee: 0.30% of unutilized amount
5 Year
Tax-Exempt Rate: 80% 1M SOFR + 1.19%
Taxable Rate: 1M SOFR + 1.19%
Undrawn Fee: 0.25% of unutilized amount
Terms & Conditions Rate Covenant - 125% of Debt Service Additional Bonds Test - 125% of Debt Service
Rate Covenant - 125% of Maximum Annual
Debt Service*
Additional Bonds Test - 125% of Debt Service
Minimum Ratings of A3/A- for City's GO Debt
Bank Ratings Long-Term (S/M/F): A+/A1/AA-
Short-Term (S/M/F): A-1/P-1/F1+
Outlook (S/M/F): Stable/Stable/Stable
Long-Term (S/M/F): A+/A2/A+
Short-Term (S/M/F): A-1/P-1/F1
Term Out Provisions Base Rate + 2.00% fixed for 3 years Base Rate + 3.00% fixed for 3 years 5 City Council, June 17, 2024:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82897&dbid=0&repo=PaloAlto&searchid=a71833e6 -80d5-4688-8ab4-cd9a7edc4503 and Supplemental Memo:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82929&dbid=0&repo=PaloAlto&searchid=a71833e6 -80d5-4688-8ab4-cd9a7edc4503
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Table 1: Pricing and Fee Comparison
BMO
US Bank
(Recommended)
Relevant Experience Los Angeles County Metropolitan
Transportation Authority, City of Pasadena,
City of Modesto, Chicago Housing Authority,
and Citizens Energy Group
Santa Clara Valley Water District, SFPUC -
Water Enterprise, SFPUC Wastewater
Enterprise, Gainesville Regional Utilities, CO,
Lower Colorado River Authority
Fees
Legal Expenses Capped at $35,000 Estimated at $45,000; Capped at $50,000 Upfront Fee $0 $0
Termination Fee $0 One-year make whole termination provision *The Wastewater Treatment Fund compiles with the 125% of Maximum Annual Debt Service.

Under both proposals, security for the LOC is net revenues of the RWQCP system, on parity with the existing State Revolving Fund (SRF) install sale agreements.

Regarding the City’s Debt Policy7, the Enterprise Funds have a debt service limit of 15% of operating expense. The estimated debt service limit for FY 2026 is 7.6%. Conservatively assuming a fixed $21 million drawn amount, with $10 million unutilized, issuance of a $31 million LOC would increase the fund’s debt service limit by approximately 2.2 to 2.6 percentage points between FY 2027 and FY 2028. The City Council approved an exception to the debt limit on December 5, 2022 upon approving the budget amendment to fund the Secondary Treatment Upgrade (STU) project using the 2022 SRF loan. Based on the estimated interest and cost forecast budget, the WWT Fund is estimated to exceed the 15% debt limit due in FY 2028 due to repayment of the 2022 SRF loan.

FISCAL/RESOURCE IMPACT
Amendments to the agreements with partner agencies are scheduled for City Council consideration in August 2026. Palo Alto, Los Altos, East Palo Alto Sanitary District, Standford, and Los Altos Hills will participate in the LOC; City of Mountain View has elected to contribute cash for its share of project costs and not participate in the LOC. Table 2 estimated annual parter cost, which is lower than the approximately $1.3 to $1.5 million range communicated to the City Council and partners fall 2025.

Table 2: Estimated Annual Parter Cost (in thousands)
Partner Tax-Exempt Taxable
Palo Alto $516 $602
Mt. View n/a n/a
Los Altos $128 $149
EPUSD $103 $121
Stanford $72 $83
L.A. Hills $21 $25
TOTAL $840 $980
7 City Debt Policy, Adopted by City Council on April 11, 2017:
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The City of Palo Alto, as a parter to the RWQCP, has assumed the impact of the LOC in its Financial Forecast and utility rates for FY 2027, as presented to the Finance Committee on March 17, 20269.

STAKEHOLDER ENGAGEMENT
The Administrative Services Department (ASD) and Public Works Department (PWD) work in close collaboration on the RWQCP capital improvement plan and its financing strategy. Staff in the ASD and PWD have also been meeting regularly with partner agencies to review financing needs, explain the structure of the LOC, and discuss repayment obligations.

ENVIRONMENTAL REVIEW
This item is not a project as defined by the California Environmental Quality Act (CEQA) because approval of a LOC is a government funding mechanisms or fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). The Individual capital improvement projects described in this report are exempt from CEQA review under section 15301 of the CEQA Guidelines because they involve the operation, repair, maintenance, permitting, or minor alteration to an existing facility with negligible or no expansion in use.

ATTACHMENTS
Attachment A: Resolution Authorizing the Borrowing of Funds on an Interim Basis for the RWQCP
APPROVED BY:

Lauren Lai, Administrative Services Director
9 Finance Committee, March 17, 2026:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86854&dbid=0&repo=PaloAlto&searchid=da736b0 9-2d2f-4bc1-ac2c-38a18f34577e
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ATTACHMENT A
Resolution No. __
Resolution of the Council of the City of Palo Alto Authorizing the Borrowing of Funds Pursuant to Chapter 12.28 of the Palo Alto Municipal Code to Finance on an Interim Basis Improvements to the City’s Regional Water Quality Control Plant, Authorizing the Execution and Delivery of a Revolving Credit Agreement, a Fee Letter and Related Notes, Authorizing and Ratifying Execution and Delivery of Related Documents, and Authorizing Related Actions

RECITALS
A. The City of Palo Alto (the "City"), acting under and pursuant to the powers reserved to the City under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and Article II of the Charter of the City, operates and maintains facilities for the collection, pumping, transport, treatment, storage and disposal of wastewater (the "Wastewater System") B. The City is empowered pursuant to Chapter 12.28 of the Palo Alto Municipal Code to issue bonds, notes and other obligations, to provide funds for the acquisition, construction, improvement or financing of the Wastewater System.

C. Chapter 12.28 authorizes the City Council to exercise all of the powers set forth in the Revenue Bond Law of 1941, being Chapter 6, commencing with Section 54300, of Part 1 of Division 2 of Title 5 of the California Government Code, subject to the restrictions set forth therein, except as provided in Chapter 12.28.

D. The City previously issued or incurred the following outstanding obligations for the purpose of financing and refinancing, as applicable, certain improvements to the Wastewater System (the “Outstanding Obligations”):
(i) a Project Finance Agreement No. 07-814-550-0 between the City and the California State Water Resources Control Board (“State Water Board”), as amended,
(ii) a Project Finance Agreement No. 09-814-550 between the City and the State Water Board, as amended,
(iii) an Installment Sale Agreement No. D16-01034, dated as of March 20, 2017 by and between the City and the State Water Board, as amended, (iv) an Installment Sale Agreement No. SWRCB0000000000D2001009, executed as of July 12, 2021 by and between the City and the State Water Board, as amended,
(v) an Installment Sale Agreement No. D2101050, executed as of May 9, 2022 by and between the City and the State Water Board, as amended, and (vi) an Installment Sale Agreement No. D2401001, executed as of March 27, 2025 by and between the City and the State Water Board.

E. The Outstanding Obligations are secured by a first priority pledge of and payable from net revenues of the City’s Wastewater Treatment enterprise and its Wastewater Collection enterprise.

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F. The City has determined that it is a necessary and proper municipal affair to finance on an interim basis certain additions, betterments, extensions and improvements to the City’s Regional Water Quality Control Plant.

G. The City wishes to secure such financing by a first priority pledge of net revenues of the City’s Wastewater Treatment enterprise and its Wastewater Collection enterprise.

H. Pursuant to Government Code Section 5852.1, certain information relating to the revenue bonds is set forth in Appendix A attached to this Resolution, and such information is hereby disclosed and made public.

NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES, as follows:

SECTION 1. Findings and Determinations. The City Council hereby finds, determines and declares that the Recitals are true and correct.

SECTION 2. Approval of Credit Agreement, Fee Letter and Notes; Terms of the Credit Agreement, Fee Letter and Notes; Security. The Council is adopting this resolution under the powers reserved to the City under Sections 3, 5 and 7 of Article XI of the Constitution and Article II of the Charter. Pursuant to Chapter 12.28, and for the purpose of financing on an interim basis certain additions, betterments, extensions and improvements to the City’s Regional Water Quality Control Plant, the City Council hereby approves the borrowing of funds by the City in the form of a revolving credit agreement (the “Credit Agreement”), a letter confirming certain terms related to the calculation of the interest rate payable by the City under the Credit Agreement and related fees (the “Fee Letter”) and one or more notes to evidence the City’s obligations under the Credit Agreement (the “Notes”).

The maximum principal amount outstanding under each of the Credit Agreement and the Notes at any time shall not exceed $31,000,000.

The interest rate under the Credit Agreement, the Fee Letter and the Notes shall not exceed the maximum rate of interest authorized by law. The interest rate under the Credit Agreement, the Fee Letter and the Notes may be fixed, variable, exempt from federal income taxation or subject to federal income taxation, in each case, as determined by the City Manager, Administrative Services Director or a designee appointed in writing by any such officer (each, an “Authorized Officer”) in consultation with Jones Hall LLP, the City’s bond counsel, and PFM Financial Advisors LLC, the City’s municipal advisor.

The initial term of the Credit Agreement and the Notes shall not exceed five years, but the Credit Agreement and the Notes may have a succeeding term that shall not exceed three years.

The City’s payment obligation under the Credit Agreement, the Fee Letter and the Notes shall be secured by a first priority pledge of and payable solely from the net revenues of the City’s Wastewater Treatment enterprise and its Wastewater Collection enterprise. The pledge shall be on a parity basis with the pledge securing the Outstanding Obligations, as determined by an Authorized Officer. The general fund of the City is not liable for the payment of the City’s obligations under the Credit Agreement, the Fee Letter or the Notes. The credit or taxing power of the City is not pledged for the payment of the City’s obligations under the Credit Agreement, the Fee Letter or the Notes. The Lenders (as defined in the Credit Agreement) may not compel the exercise of the taxing power of the City or the forfeiture of its property.

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The City Council hereby determines that the Credit Agreement, the Fee Letter and the Notes are conclusively deemed valid and executed, delivered and issued, as applicable, in conformity with Chapter 12.28.

SECTION 3. Selection of U.S. Bank. The City Council hereby approves U.S. Bank National Association as Agent (as defined in the Credit Agreement) and the initial sole Lender, which staff has recommended following a competitive selection process.

SECTION 4. Approval of Credit Agreement, Fee Letter and Notes. The City Council hereby approves the Credit Agreement, the Fee Letter and the Notes in substantially the forms on file with the City Clerk, with such changes approved by an Authorized Officer, acting alone, after consultation with City staff, bond counsel and the municipal advisor.

An Authorized Officer, acting alone, is authorized and directed for and in the name and on behalf of the City to execute and the City Clerk is hereby authorized and directed to attest the final form of the Credit Agreement, the Fee Letter and the Notes, and the execution of the Credit Agreement, the Fee Letter and the Notes by an Authorized Officer shall be conclusive evidence of their approval by this City Council.

SECTION 5. Authorization and Ratification of Amendments to the Outstanding Obligations. The City Council hereby authorizes and ratifies the execution and delivery of amendments to the Outstanding Obligations as may be required to facilitate the proposed interim financing. The execution of such amendments by an Authorized Officer shall be conclusive evidence of such approval and ratification.

SECTION 6. Official Actions. Each Authorized Officer, the City Attorney, the City Clerk and all other officers of the City are each authorized and directed in the name and on behalf of the City to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants, promissory notes and other documents, which they or any of them might deem necessary or appropriate in order to consummate any of the transactions contemplated by the agreements and documents approved under this Resolution.

Whenever in this Resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable.

Any and all acts of each Authorized Officer, the City Attorney, the City Clerk and all other officers of the City in furtherance of the transactions contemplated by the foregoing resolutions that were taken prior to the adoption of these resolutions, are hereby ratified, confirmed, approved, and adopted.

SECTION 7. California Environmental Quality Act. The foregoing resolutions and the execution and delivery of the Credit Agreement, the Fee Letter and the Notes are not a project for purposes of the California Environmental Quality Act because the additions, betterments, extensions and improvements to the City’s Regional Water Quality Control Plant to be financed as described herein are categorically exempt under CEQA Guidelines Section 15301.

SECTION 8. Effective Date. This Resolution shall take effect immediately upon its adoption.

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* * * * * *
INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST: APPROVED:

City Clerk Mayor
APPROVED AS TO FORM: APPROVED
Jones Hall LLP
By:

Christopher K. Lynch, City Manager
Jones Hall LLP
Bond Counsel
Director of Administrative Services
City Attorney
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ATTACHMENT A

APPENDIX A
Government Code Section 5852.1 Disclosure
The following information consists of estimates that have been provided by the City’s municipal advisor which has been represented by such party to have been provided in good faith. The information assumes that the City will borrow funds in the form of a revolving line of credit in the principal amount not to exceed $31,000,000 at any time with a five-year maturity date.
(A) True Interest Cost of the Financing: 3.416%
(B) Finance Charge of the Financing (Sum of all fees/charges paid to third parties):
$127,000
(C) Net Proceeds to be Received (net of finance charges, reserves and capitalized interest, if any): $30,873,000
(D) Total Payment Amount Through Maturity: $33,943,027 The foregoing estimates constitute good faith estimates only. The principal amount, the true interest cost, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the financing being different than the date assumed for purposes of such estimates, (b) the actual principal amount being different from the estimated amount used for purposes of such estimates, (c) the actual amortization of the principal being different than the amortization assumed for purposes of such estimates, (d) the actual interest rate being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan (including the mix of tax-exempt and taxable obligations), or a combination of such factors. The actual timing of the financing and the actual principal amount of the financing will be determined by the City based on the timing of the need for proceeds and other factors. The actual interest rates paid by the City will depend on market interest rates and the terms of the financing. The actual amortization of the principal will also depend, in part, on market interest rates. Market interest rates are affected by economic and other factors beyond the control of the City.

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: May 18, 2026
Report #:2603-6146
TITLE
Approval of Construction Contract No. C26197232 with Selway Construction, Inc. in the Amount Not-to of $261,600 and Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders for Related Additional but Unforeseen Work that may Develop During the Project Up to a Not-to-Exceed Amount of $26,160 for Site Work for a New Modular Restroom Building at Mitchell Park for the Park Restroom Installation Capital Improvement Project (PG-19000); CEQA status – Exempt Under CEQA Guidelines Section 15303

RECOMMENDATION
Staff recommends that the City Council:

1. Approve and authorize the City Manager or their designee to execute Construction Contract No. C26197232 with Selway Construction, Inc. in the amount of $261,600 for site work for a new modular restroom building at Mitchell Park for the Park Restroom Installation Project (PG-19000); and

2. Authorize the City Manager or their designee to negotiate and execute change orders to the contract with Selway Construction, Inc. for related, additional but unforeseen work that may arise, the total value of which shall not exceed $26,160.

BACKGROUND
Mitchell Park, a 21.4-acre community park, offers a variety of recreational activities for the community including recreational fields, a recently expanded dog park, picnic areas, playgrounds, multiple sports courts, and walking and biking trails. In 2015, the Magical Bridge Playground, an all-inclusive play space was added to the park near the tennis and pickleball courts, attracting a high volume of users daily.

There are currently three public restroom buildings within the park including a two-stall restroom that mainly serves the south side of the park where the dog park, Magical Bridge Playground, two smaller playgrounds, athletic fields, a couple of picnic areas, and tennis and pickleball courts are located. Due to the heavy usage of the existing restroom, temporary Item 9
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portable restrooms funded by Friends of the Palo Alto Parks have been placed near the sports courts since June 2025. To accommodate increased demand, this project replaces the existing two-stall restroom with a four-stall modular restroom building at the same location.

On September 8, 2025, Council approved a contract for the purchase and installation of a modular restroom building at Mitchell Park.1 The restroom building will consist of four universal stalls, be about 14 feet by 28 feet in size, and match the style and color of the existing restroom building. The building is currently being fabricated offsite by the restroom vendor, Public Restroom Company, and is estimated to be ready for delivery in late summer 2026.

The site work for the restroom that will be performed under this construction contract includes site preparation, demolition, removal and disposal of the existing two-stall restroom building, concrete paving, utility work, light pole removal, and coordinating with the restroom vendor for delivery and installation of the new modular building.

ANALYSIS
Procurement Process
On March 18, 2026, an invitation for bids (IFB) for site work for the Mitchell Park Restroom Project was posted to the City’s OpenGov online procurement system. The bidding period was 23 calendar days. The City received 11 responsive bids from qualified contractors on April 10, 2026, as listed on the attached bid summary (Attachment A).

Table 1: Summary of Invitation for Bids
Project Bid Name/Number
Mitchell Park Restroom Site Work PG-
19000 / IFB# 197232
Proposed Length of Project 90 calendar days
# of Bid Packages Downloaded by Contractors 63
# of Bid Packages Downloaded by Builder’s Exchanges 6
Total Days to Respond to Bid 23 calendar days
Pre-Bid Meeting Yes (non-mandatory)
Number of Bids Received 11
Base Bid Price Range $261,600 - $544,754
Base Bid Engineers Estimate $287,125
Public Link to Solicitation https://procurement.opengov.com/portal/palo- alto-ca/projects/247078
Base bids ranged from $261,600 to $544,754 and from 9% below to 90% above the base bid engineer’s estimate of $287,125. Staff has reviewed all bids and recommends that the Base Bid of $261,600 submitted by Selway Construction, Inc. be accepted and that Selway Construction, 1 City Council, September 8, 2025; Agenda Item #5, SR# 2507-4968, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83570&dbid=0&repo=PaloAlto&searchid=98faf61c- 0eb3-483a-8abc-1148b868b690
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Inc. be declared the lowest responsible bidder. Staff recommends approval of Construction Contract No. C261972323 with Selway Construction, Inc. The construction contingency amount of $26,160, which equals 10% of the contract value, is requested for related, additional but unforeseen work which may arise during the project, implemented via City-approved change orders.

Staff confirmed with the Contractor’s State License Board that the contractor has an active license on file. Staff also contacted the listed references for Selway Construction, Inc. and found that they performed satisfactorily on past construction projects for other clients.

FISCAL/RESOURCE IMPACT
Funding for this contract is available in the Fiscal Year 2026 Adopted Capital Improvement Program Fund Park Restroom Installation (PG-19000) project.

STAKEHOLDER ENGAGEMENT
The proposed project replaces an existing smaller restroom with a larger restroom matching the style and aesthetics of the existing building and in relatively the same location. Appropriate measures will be taken to keep the existing restroom in operation until its replacement is ready as feasible. The community will be notified with construction updates and timeline when appropriate. A Park Improvement Ordinance (PIO) is not required because the proposed replacement of a smaller restroom building with a larger restroom building in the same location is not considered a substantial improvement to the park. Minor Architectural Review Board approval was provided for the project in October 2025.

ENVIRONMENTAL REVIEW
The installation of a modular restroom building is categorically exempt from the California Environmental Quality Act (CEQA) under Section 15303 (Construction of Small Structures) of the CEQA guidelines.

ATTACHMENTS
Attachment A: Bid Summary
APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
3 Construction Contract for the Mitchell Park Restroom Site Work Project C26197232; https://www.paloalto.gov/files/assets/public/v/1/public-works/engineering-services/c26197232-selway- construction-mitchell-park-restroom-final.pdf
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ATTACHMENT A

MITCHELL PARK RESTROOM SITE WORK

BID SUMMARY
Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost 1 Mobilization 1 Lump Sum 20,000.00$ 20,000.00$ 12,300.00$ 12,300.00$ 15,000.00$ 15,000.00$ -$ 50,000.00$ 22,400.00$ 22,400.00$ 19,732.00$ 19,732.00$ 5,000.00$ 5,000.00$ 31,500.00$ 31,500.00$ 25,000.00$ 25,000.00$ 42,000.00$ 42,000.00$ 30,000.00$ 30,000.00$ 62,000.00$ 62,000.00$ 2 Traffic Control 1 Lump Sum 12,000.00$ 12,000.00$ 3,690.00$ 3,690.00$ 15,000.00$ 15,000.00$ -$ 9,500.00$ 12,000.00$ 12,000.00$ 6,100.00$ 6,100.00$ 6,000.00$ 6,000.00$ 6,950.00$ 6,950.00$ 16,000.00$ 16,000.00$ 17,500.00$ 17,500.00$ 5,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 3 Prepare Building Pad/Subgrade 1 Lump Sum 20,000.00$ 20,000.00$ 19,676.00$ 19,676.00$ 40,000.00$ 40,000.00$ -$ 128,875.00$ 13,200.00$ 13,200.00$ 25,280.00$ 25,280.00$ 18,500.00$ 18,500.00$ 32,700.00$ 32,700.00$ 17,400.00$ 17,400.00$ 21,000.00$ 21,000.00$ 41,000.00$ 41,000.00$ 10,000.00$ 10,000.00$ 4 Stockpile Coarse Mason Sand 8 Cubic Yard 500.00$ 4,000.00$ 107.00$ 856.00$ 120.00$ 960.00$ 310.00$ 2,480.00$ 150.00$ 1,200.00$ 134.00$ 1,072.00$ 350.00$ 2,800.00$ 240.00$ 1,920.00$ 162.00$ 1,296.00$ 350.00$ 2,800.00$ 462.50$ 3,700.00$ 350.00$ 2,800.00$ 5 Temporary Construction Fencing 1 Lump Sum 6,000.00$ 6,000.00$ 6,150.00$ 6,150.00$ 6,000.00$ 6,000.00$ -$ 2,500.00$ 3,000.00$ 3,000.00$ 5,850.00$ 5,850.00$ 7,500.00$ 7,500.00$ 8,350.00$ 8,350.00$ 3,800.00$ 3,800.00$ 10,500.00$ 10,500.00$ 3,550.00$ 3,550.00$ 3,000.00$ 3,000.00$ 6 Tree Protection (Type I) 1 Each 1,500.00$ 1,500.00$ 738.00$ 738.00$ 1,500.00$ 1,500.00$ -$ 1,850.00$ 3,000.00$ 3,000.00$ 750.00$ 750.00$ 3,300.00$ 3,300.00$ 1,600.00$ 1,600.00$ 1,600.00$ 1,600.00$ 1,400.00$ 1,400.00$ 1,500.00$ 1,500.00$ 1,000.00$ 1,000.00$ 7 Tree Protection (Type III) 1 Each 1,000.00$ 1,000.00$ 738.00$ 738.00$ 2,500.00$ 2,500.00$ -$ 850.00$ 3,000.00$ 3,000.00$ 800.00$ 800.00$ 3,000.00$ 3,000.00$ 1,300.00$ 1,300.00$ 1,600.00$ 1,600.00$ 980.00$ 980.00$ 1,500.00$ 1,500.00$ 1,000.00$ 1,000.00$ 8 Demolish and Dispose Existing Restroom Building 1 Lump Sum 35,000.00$ 35,000.00$ 31,980.00$ 31,980.00$ 40,000.00$ 40,000.00$ -$ 32,500.00$ 38,161.75$ 38,161.75$ 29,265.00$ 29,265.00$ 28,000.00$ 28,000.00$ 61,200.00$ 61,200.00$ 27,400.00$ 27,400.00$ 63,000.00$ 63,000.00$ 15,000.00$ 15,000.00$ 40,000.00$ 40,000.00$ 9 Remove Existing Concrete 1200 Square Foot 10.00$ 12,000.00$ 11.07$ 13,284.00$ 17.00$ 20,400.00$ 17.92$ 21,504.00$ 20.29$ 24,348.00$ 6.00$ 7,200.00$ 15.00$ 18,000.00$ 18.90$ 22,680.00$ 10.00$ 12,000.00$ 28.00$ 33,600.00$ 10.90$ 13,080.00$ 17.00$ 20,400.00$ 10 4" Thick Concrete Paving (12" base) 700 Square Foot 55.00$ 38,500.00$ 51.66$ 36,162.00$ 38.00$ 26,600.00$ 37.00$ 25,900.00$ 62.77$ 43,939.00$ 35.00$ 24,500.00$ 42.00$ 29,400.00$ 19.40$ 13,580.00$ 38.00$ 26,600.00$ 49.00$ 34,300.00$ 35.29$ 24,703.00$ 10.00$ 7,000.00$ 11 4" Thick Concrete Paving (6" base) 1200 Square Foot 40.00$ 48,000.00$ 33.21$ 39,852.00$ 27.00$ 32,400.00$ 34.10$ 40,920.00$ 47.38$ 56,856.00$ 27.00$ 32,400.00$ 32.00$ 38,400.00$ 21.60$ 25,920.00$ 28.00$ 33,600.00$ 28.00$ 33,600.00$ 20.59$ 24,708.00$ 10.00$ 12,000.00$ 12 Remove Existing Light Pole and Associated Components and Backfill with Native Soil1 Lump Sum 5,000.00$ 5,000.00$ 1,230.00$ 1,230.00$ 5,000.00$ 5,000.00$ -$ 2,750.00$ 1,800.00$ 1,800.00$ 1,850.00$ 1,850.00$ 3,000.00$ 3,000.00$ 3,670.00$ 3,670.00$ 4,500.00$ 4,500.00$ 7,000.00$ 7,000.00$ 5,000.00$ 5,000.00$ 3,500.00$ 3,500.00$ 13 Remove Electrical Feeder to Existing Restroom Building 1 Lump Sum 4,000.00$ 4,000.00$ 5,535.00$ 5,535.00$ 6,000.00$ 6,000.00$ -$ 8,300.00$ 1,200.00$ 1,200.00$ 3,900.00$ 3,900.00$ 2,500.00$ 2,500.00$ 3,200.00$ 3,200.00$ 2,250.00$ 2,250.00$ 4,900.00$ 4,900.00$ 3,500.00$ 3,500.00$ 4,000.00$ 4,000.00$ 14 Remove Secondary Electrical Box 1 Each 1,000.00$ 1,000.00$ 1,230.00$ 1,230.00$ 2,000.00$ 2,000.00$ -$ 2,750.00$ 1,800.00$ 1,800.00$ 3,500.00$ 3,500.00$ 4,500.00$ 4,500.00$ 2,900.00$ 2,900.00$ 1,000.00$ 1,000.00$ 980.00$ 980.00$ 2,380.00$ 2,380.00$ 4,000.00$ 4,000.00$ 15 Cap and Remove Section of Existing Water Line 40 Linear Foot 50.00$ 2,000.00$ 92.25$ 3,690.00$ 150.00$ 6,000.00$ -$ 17,500.00$ 60.00$ 2,400.00$ 37.00$ 1,480.00$ 95.00$ 3,800.00$ 34.50$ 1,380.00$ 60.00$ 2,400.00$ 63.00$ 2,520.00$ 118.75$ 4,750.00$ 10.00$ 400.00$ 16 Remove Water Utility Box 1 Each 500.00$ 500.00$ 923.00$ 923.00$ 1,500.00$ 1,500.00$ -$ 3,850.00$ 2,400.00$ 2,400.00$ 600.00$ 600.00$ 2,400.00$ 2,400.00$ 1,830.00$ 1,830.00$ 750.00$ 750.00$ 1,050.00$ 1,050.00$ 2,380.00$ 2,380.00$ 2,000.00$ 2,000.00$ 17 Cap and Remove Section of Existing Sewer Line 15 Linear Foot 50.00$ 750.00$ 205.00$ 3,075.00$ 200.00$ 3,000.00$ -$ 24,250.00$ 160.00$ 2,400.00$ 75.00$ 1,125.00$ 160.00$ 2,400.00$ 68.00$ 1,020.00$ 85.00$ 1,275.00$ 140.00$ 2,100.00$ 218.00$ 3,270.00$ 200.00$ 3,000.00$ 18 Remove Existing Sewer Cleanout 2 Each 500.00$ 1,000.00$ 615.00$ 1,230.00$ 1,500.00$ 3,000.00$ -$ 5,500.00$ 300.00$ 600.00$ 300.00$ 600.00$ 1,000.00$ 2,000.00$ 275.00$ 550.00$ 500.00$ 1,000.00$ 980.00$ 1,960.00$ 750.00$ 1,500.00$ 500.00$ 1,000.00$ 19 Furnish and Install 4" Sewer Pipe Connection 1 Lump Sum 5,000.00$ 5,000.00$ 8,241.00$ 8,241.00$ 20,000.00$ 20,000.00$ -$ 22,450.00$ 12,000.00$ 12,000.00$ 2,000.00$ 2,000.00$ 13,500.00$ 13,500.00$ 1,160.00$ 1,160.00$ 17,000.00$ 17,000.00$ 7,000.00$ 7,000.00$ 6,890.00$ 6,890.00$ 6,000.00$ 6,000.00$ 20 Install Sewer Cleanout 2 Each 1,000.00$ 2,000.00$ 1,048.00$ 2,096.00$ 2,000.00$ 4,000.00$ -$ 8,575.00$ 450.00$ 900.00$ 1,250.00$ 2,500.00$ 1,900.00$ 3,800.00$ 1,490.00$ 2,980.00$ 2,500.00$ 5,000.00$ 1,400.00$ 2,800.00$ 1,500.00$ 3,000.00$ 2,000.00$ 4,000.00$ 21 Furnish and Install 1-1/2" Water Pipe Connection 1 Lump Sum 4,000.00$ 4,000.00$ 10,332.00$ 10,332.00$ 15,000.00$ 15,000.00$ -$ 16,800.00$ 14,400.00$ 14,400.00$ 2,560.00$ 2,560.00$ 15,500.00$ 15,500.00$ 1,760.00$ 1,760.00$ 15,000.00$ 15,000.00$ 7,000.00$ 7,000.00$ 6,890.00$ 6,890.00$ 5,000.00$ 5,000.00$ 22 Install Water Valve/Box 1 Each 2,000.00$ 2,000.00$ 1,476.00$ 1,476.00$ 2,000.00$ 2,000.00$ -$ 8,500.00$ 900.00$ 900.00$ 1,100.00$ 1,100.00$ 2,800.00$ 2,800.00$ 1,250.00$ 1,250.00$ 1,500.00$ 1,500.00$ 1,400.00$ 1,400.00$ 3,000.00$ 3,000.00$ 2,500.00$ 2,500.00$ 23 Install New Electrical Feeder 1 Lump Sum 15,000.00$ 15,000.00$ 16,605.00$ 16,605.00$ 25,000.00$ 25,000.00$ -$ 19,500.00$ 25,480.00$ 25,480.00$ 42,777.00$ 42,777.00$ 15,000.00$ 15,000.00$ 6,900.00$ 6,900.00$ 9,600.00$ 9,600.00$ 35,000.00$ 35,000.00$ 11,000.00$ 11,000.00$ 18,000.00$ 18,000.00$ 24 Install Electrical N36 Pull Box 3 Each 1,000.00$ 3,000.00$ 615.00$ 1,845.00$ 2,500.00$ 7,500.00$ -$ 8,850.00$ 1,000.00$ 3,000.00$ 4,700.00$ 14,100.00$ 1,800.00$ 5,400.00$ 6,370.00$ 19,110.00$ 2,000.00$ 6,000.00$ 1,400.00$ 4,200.00$ 3,000.00$ 9,000.00$ 1,500.00$ 4,500.00$ 25 Splice/Relocate Electrical Line 1 Lump Sum 10,000.00$ 10,000.00$ 52,890.00$ 52,890.00$ 6,000.00$ 6,000.00$ -$ 18,800.00$ 6,000.00$ 6,000.00$ 17,541.00$ 17,541.00$ 4,000.00$ 4,000.00$ 2,600.00$ 2,600.00$ 25,000.00$ 25,000.00$ 4,900.00$ 4,900.00$ 5,000.00$ 5,000.00$ 9,500.00$ 9,500.00$ 26 Irrigation Reconfiguration 1 Lump Sum 10,000.00$ 10,000.00$ 9,225.00$ 9,225.00$ 10,000.00$ 10,000.00$ -$ 27,800.00$ 2,400.00$ 2,400.00$ 7,670.00$ 7,670.00$ 7,500.00$ 7,500.00$ 4,990.00$ 4,990.00$ 7,990.00$ 7,990.00$ 14,000.00$ 14,000.00$ 28,000.00$ 28,000.00$ 3,500.00$ 3,500.00$ 27 Grass Seeding 375 Square Foot 5.00$ 1,875.00$ 4.00$ 1,500.00$ 5.00$ 1,875.00$ -$ 2,850.00$ 9.55$ 3,581.25$ 10.56$ 3,960.00$ 11.00$ 4,125.00$ 8.60$ 3,225.00$ 7.00$ 2,625.00$ 2.80$ 1,050.00$ 85.50$ 32,062.50$ 4.00$ 1,500.00$ 28 Compact Native Soil Backfill at Grade Differences 1 Lump Sum 2,000.00$ 2,000.00$ 2,214.00$ 2,214.00$ 8,000.00$ 8,000.00$ -$ 8,850.00$ 1,800.00$ 1,800.00$ 4,265.00$ 4,265.00$ 5,500.00$ 5,500.00$ 6,880.00$ 6,880.00$ 4,800.00$ 4,800.00$ 14,000.00$ 14,000.00$ 6,000.00$ 6,000.00$ 5,000.00$ 5,000.00$ 29 Allowance for Unforeseen Underground Work 1 Lump Sum 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 20,000.00$ 287,125.00$ 308,763.00$ 346,235.00$ 544,754.00$ 324,166.00$ 284,477.00$ 277,625.00$ 293,105.00$ 293,986.00$ 392,540.00$ 317,363.50$ 261,600.00$ -3% 2% 2% 37% 11% -9%
McNabb Construction, Inc.North Bay Design and Build, Inc.Selway ConstructionEngineer's Estimate BASE BID TOTAL (Items 1 through 29)
Kerex EngineeringiDrill Engineering Inc JJ Construction and Design Inc.101 Builders, Inc. Guerra Construction GroupApprox.

Qty. UnitDescriptionBid
Item
CWS Construction Group Inc. Golden State Municipal ConstructionLLGradetech Inc 13% -1%PERCENT OVER BASE BID ENGINEER'S ESTIMATE 8% 21% 90% Item 9
Attachment A - Bid Summary

Item 9: Staff Report
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: May 18, 2026
Report #:2604-6220
TITLE
Approval of Construction Contract No. C26197180 with Casey Construction, Inc. in the Not-to-Exceed Amount of $544,556 and Authorization for the City Manager or Their Designee to Negotiate and Execute Change Orders for Related Additional but Unforeseen Work that May Develop During the Project Up to a Not-to-Exceed Amount of $54,456 for the Storm Drainage System Replacement and Rehabilitation Project (SD-06101); CEQA status – Exempt under CEQA Guidelines Section 15301(c)

RECOMMENDATION
Staff recommends that the City Council:

1. Approve and authorize the City Manager or their designee to execute Construction Contract No.

C26197180 with Casey Construction, Inc. in the amount of $544,556 for the Storm Drainage System Replacement and Rehabilitation Project (SD-06101); and

2. Authorize the City Manager or their designee to negotiate and execute one or more change orders to the above construction contract with Casey Construction, Inc. for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $54,456.

BACKGROUND
The Storm Drainage System Replacement and Rehabilitation Project (SD-06101) proposes to increase the existing 12-inch storm drain line to a 36-inch line on Alester Avenue from Hamilton Avenue to Dana Avenue to convey rain water and provide additional storage capacity, and to repair a broken storm drain lateral on Lambert Avenue and Birch Street. Increasing the pipe along Alester Avenue would help to mitigate flooding along Duveneck Elementary School in an event similar to the December 31, 2022 storm and creek overflow.

This scope was solicited as an add-alternate bid item on the Hamilton Avenue Capacity Upgrades Item 10
Item 10 Staff Report

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Project.1 Precision Engineering, Inc.’s bid for the add-alternate work was 257% over the original engineer’s estimate of $402,188 and this scope of work was not included in Contract No. C25195264.2

ANALYSIS
Project Description
The project locations are on Alester Avenue from Hamilton Avenue to Dana Avenue, and at Lambert Avenue and Birch Street, depicted on the attached Location Map (Attachment A). Staff recommends approval of Contract No. C26197180 for the Storm Drainage System Replacement and Rehabilitation Project. 3 The scope of work includes the replacement of 283 linear feet of 12-inch concrete pipe with 36-inch high density polyethylene pipe (HDPE) on Alester Avenue, replacement of 117 linear feet of 12- inch HDPE, replacement of 3 catch basins, and installation of 1 storm drain junction box. Concrete work includes removal and replacement of 3 curb ramps, curb and gutter, and sidewalk. Pipe replacement in the streets may require additional work such as pavement restoration and striping due to the location of the work. Although the project has been designed to avoid utilities conflicts, the contract includes an allowance for the cost of potential utility service relocations in locations where the existing utilities services (water, gas, cable, electric, and sanitary sewer) may conflict with the installation of the new storm drain pipes. Prior to bidding, staff updated the engineer’s estimate to reflect the most recent bid prices received as part of the Hamilton Avenue Capacity Upgrades Project Solicitation Process
On March 10, 2026, an Invitation for Bids (IFB) for the Storm Drainage Replacement and Rehabilitation Project at Various Locations was posted on OpenGov, the City’s eProcurement platform. The bidding period was 23 days. Bids were received from eight qualified contractors on April 2, 2026, as listed on the attached Bid Summary (Attachment B).

Table 1: Summary of Invitation of Bids
Project Bid Name/Number Storm Drainage System Replacement and Rehabilitation Project at Various Locations and IFB #197180
Proposed Length of Project 60 days
# of Bid Packages Downloaded by Contractors 49
Total Days to Respond to Bid 23 days
Number of Bids Received 8
Base Bid Price Range $544,556 to $1,712,025
Public Link to Solicitation https://procurement.opengov.com/portal/palo-alto- ca/projects/244946
1 City Council, October 6, 2025; Agenda Item #5, Report #2507-5009, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83624&dbid=0&repo=PaloAlto&searchid=ac4bc027-cb44-4220- 9222-105b0b4e5fd5
2 Precision Engineering, Inc. Hamilton Avenue Capacity Upgrades Project Contract No. C25195264; https://www.paloalto.gov/files/assets/public/v/1/public-works/staff-reports-all/2025/precision-engineering-hamilton-ave- capacity-upgrades-c26195264.pdf
3 Casey Construction, Inc. Storm Drainage System Replacement and Rehabilitation Project Contract No. C26197180 https://www.paloalto.gov/files/assets/public/v/1/public-works/engineering-services/cip-contracts/engineering-forms-and- downloads/c26197180-casey-construction-final.pdf
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Bids ranged from $544,556 to $1,712,025 and from 28% below to 127% above the engineer’s estimate of $755,102. Staff reviewed the bids submitted and recommends acceptance of the bid submitted by Casey Construction, Inc. in the amount of $544,556 and that Casey Construction, Inc. be declared the lowest responsible bidder. The contingency amount of $54,456, which equals 10% of the contract value, is requested for related, additional but unforeseen work which may develop during the project, implemented via City-approved Change Order.

Staff confirmed with the Contractor's State License Board that the contractor has an active license on file. Staff also contacted the listed references for Casey Construction, Inc. and found that they performed satisfactorily on past construction projects for other clients.

FISCAL/RESOURCE IMPACT
Funding for the project is available in the Fiscal Year 2026 Stormwater Management Fund Capital Budget for the Storm Drainage System Replacement and Rehabilitation Project (SD-06101).

STAKEHOLDER ENGAGEMENT
Staff presented to the Storm Water Management Oversight Committee (SWMOC) on the progress of the Storm Drain Rehabilitation and Replacement Project. Once the construction contract is awarded, staff will continue to notify and update the SWMOC during construction. Extensive public outreach will be conducted before and during the construction phase to keep the community informed throughout the process, including flyers sent to adjacent residences, schools, and businesses, and notices posted online on Nextdoor and the City’s website.

ENVIRONMENTAL REVIEW
This project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) under Section 15301 (d) (repair, maintenance and/or minor alteration of existing facilities and 15302 (c) (replacement of existing structures) of the CEQA Guidelines and no further environmental review is necessary.

ATTACHMENTS
Attachment A: Location Map
Attachment B: Bid Summary
APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
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SD Rehab at Various Locations (SD-06101)
Scope of Work
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Attachment A - Location
Map

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ATTACHMENT B. Storm Drainage System Replacement and Rehabilitation Project At Various Locations (SD-06101) IFB 197180 IFB Post Date: 3/10/2026
IFB Due Date: 4/2/2026

BASE BID SUMMARY

QTY UNIT
UNIT PRICE BID TOTAL UNIT PRICE BID TOTAL Δ UNIT PRICE BID TOTAL Δ UNIT PRICE BID TOTAL Δ UNIT PRICE BID TOTAL Δ UNIT PRICE BID TOTAL Δ 1 MOBILIZATION AND DEMOBILIZATION 1 LS $10 0,000.00 $ 100,000.00 $ 25,000.00 $ 25,000.00 -75% $ 30,000.00 $ 30,000.00 -70% $ 45,000.00 $ 45,000.00 -55% $ 50,000.00 $ 50,000.00 -50% $ 81,000.00 $ 81,000.00 -19% 2 PUBLIC NOTIFICATION AND POSTING 1 LS $ 1,000.00 $ 1,000.00 $ 3,000.00 $ 3,000.00 200% $ 4,454.00 $ 4,454.00 345% $ 2,000.00 $ 2, 000.00 100% $ 3,152.47 $ 3,152.47 215% $ 1,500.00 $ 1,500.00 50% 3 TRAFFIC CONTROL 1 LS $ 50,000.00 $ 50,000.00 $ 14,000.00 $ 14,000.00 -7 2% $ 20,000.00 $ 20,000.00 -60% $ 3 9,082.00 $ 39,082.00 -22% $ 22,000.00 $ 22,000.00 -56% $ 25,000.00 $ 25,00 0.00 -50% 4 SHEETING, SHORING AND BRACING 1 LS $ 5 0,000.00 $ 50,000.00 $ 5,000.00 $ 5,000.00 -90% $ 20,000.00 $ 20,00 0.00 -60% $ 4,500.00 $ 4,500.00 -9 1% $ 50,000.00 $ 50,000.00 0% $ 22, 000.00 $ 22,000.00 -56% 5 INERT SOLIDS RECYCLING 244 TON $ 12 .56 $ 3,064.64 $ 12.00 $ 2,928.00 -4% $ 115.00 $ 28,0 60.00 816% $ 0.01 $ 2.44 -100% $ 55.00 $ 13,420.00 3 38% $ 42.00 $ 10,248.00 234% 6 INERT SOLIDS RECYCLING WITH FABRIC 244 TON $ 21.25 $ 5,185.00 $ 18.00 $ 4,392.00 -15% $ 135.00 $ 32,940.00 535% $ 5.00 $ 1,220.00 -76% $ 65.00 $ 15 ,860.00 206% $ 40.00 $ 9,760. 00 88% 7 STRIPING 1 LS $ 5,000.00 $ 5,000.00 $ 26,000.00 $ 26,000.00 420% $ 30,000.00 $ 30,000.00 500% $ 15,00 0.00 $ 15,000.00 200% $ 25,875.00 $ 25,875.00 418% $ 18,675.00 $ 18,675.00 274% 8 UNFORESEEN UTILITY ALLOWANCE 1 LS $ 20 ,000.00 $ 20,000.00 $ 4,800.00 $ 4,800.00 -76% $ 5,000.00 $ 5 ,000.00 -75% $ 1.00 $ 1.00 -100% $ 10,000.00 $ 10,000.00 -50 % $ 50,000.00 $ 50,000.00 150% 9 INSTALL 12-INCH HDPE PIPE 117 LF $ 46 8.75 $ 54,843.75 $ 400.00 $ 46,800.00 -15% $ 315.00 $ 36,855. 00 -33% $ 365.00 $ 42,705.00 -22% $ 622.13 $ 72,788.93 33% $ 380.00 $ 44,460.00 -19% 10 INSTALL 36-INCH HDPE PIPE 283 LF $ 7 90.78 $ 223,790.74 $ 560.00 $ 1 58,480.00 -29% $ 412.00 $ 116,596.00 -48% $ 640.00 $ 181,120.00 -19% $ 900.91 $ 254,958.68 14% $ 1,0 55.00 $ 298,565.00 33% 11 INSTALL 12-INCH C900 PIPE 1 LF $ 400.00 $ 400.00 $ 1,500.00 $ 1,500.00 275% $ 9,424.00 $ 9,424.00 2256% $ 1,000.00 $ 1,00 0.00 150% $ 6,381.30 $ 6,381.30 14 95% $ 2,000.00 $ 2,000.00 400% 12 VIDEO INSPECTION OF NEW SD PIPELINE 401 LF $ 10.00 $ 4,010.00 $ 3.00 $ 1,203.00 -70% $ 15 .00 $ 6,015.00 50% $ 10.00 $ 4,010.00 0% $ 5.74 $ 2,300.00 -43% $ 12.00 $ 4, 812.00 20% 13 TYPE A CATCH BASIN 4 EA $ 6,875.00 $ 27,500.00 $ 14,000.00 $ 56,000. 00 104% $ 8,550.00 $ 34,200.00 24% $ 12,500.00 $ 50,000.00 82% $ 7,89 1.21 $ 31,564.83 15% $ 11,000.00 $ 44,000.00 60% 14 INSTALL NEW SDMH JUNCTION BOX 1 EA $ 27,500.00 $ 27,500.00 $ 28,000.00 $ 28,000.00 2% $ 16,000.00 $ 16,000.00 -42% $ 18,500.00 $ 18,500.00 -33% $ 20,290.60 $ 20,290.60 -26% $ 30,000.00 $ 30,000.00 9% 15 TYPE A CURB AND GUTTER 65 LF $ 133 .00 $ 8,645.00 $ 80.00 $ 5,200.00 -40% $ 88.00 $ 5,720.00 -34% $ 228.00 $ 14,820.0 0 71% $ 64.46 $ 4,189.90 -52% $ 120.00 $ 7,800.00 -10% 16 TYPE B CURB AND GUTTER TRANSITION 34 LF $ 133.00 $ 4,522.00 $ 80.00 $ 2,720.00 -40% $ 98.00 $ 3,332.00 -26% $ 192.00 $ 6,528.00 44% $ 83.42 $ 2,836.28 -37% $ 120.00 $ 4,080. 00 -10% 17 SIDEWALK 107 SF $ 20.00 $ 2,140.00 $ 30.00 $ 3,210.0 0 50% $ 80.00 $ 8,560.00 300% $ 30.00 $ 3,210.00 50% $ 18.35 $ 1,963.45 -8% $ 25.00 $ 2,675.00 25% 18 CURB RAMP 3 EA $ 13,000.00 $ 39 ,000.00 $ 12,000.00 $ 36,000.00 -8% $ 9,300.00 $ 27,900.00 -28% $ 9, 950.00 $ 29,850.00 -23% $ 6,497.96 $ 19,493.88 -50% $ 5,500.00 $ 16, 500.00 -58% 19 GAS SERVICE BACKFILL 1 EA $ 3,000.0 0 $ 3,000.00 $ 1,000.00 $ 1,000.00 -67% $ 5,100.00 $ 5,100 .00 70% $ 3,500.00 $ 3,500.00 17% $ 1,449.37 $ 1,449.37 -52% $ 5,000.00 $ 5,000.00 67% 20 AC MILLING 13,015 SF $ 0.73 $ 9,500.95 $ 1.50 $ 19,522.50 105% $ 2.00 $ 26,030.00 174% $ 3.00 $ 39,045.00 311% $ 0.63 $ 8,199.45 -14% $ 0.55 $ 7,158.25 -25% 21 3-INCH AC OVER 8-INCH PCC OVERLAY 244 TON $ 250.00 $ 61,000.00 $ 200 .00 $ 48,800.00 -20% $ 298.00 $ 72,712.00 19% $ 265.00 $ 64,66 0.00 6% $ 295.00 $ 71,980.00 18% $ 257.50 $ 62,830.00 3% 22 COORDINATION FOR SDMH JUNCTION 1 EA $ 5,000.00 $ 5,000.00 $ 1,000.0 0 $ 1,000.00 -80% $ 10,000.00 $ 10,000.00 100% $ 250.00 $ 2 50.00 -95% $ 1,150.00 $ 1,150.00 - 77% $ 11,937.00 $ 11,937.00 139% 23 EMERGENCY SUPPORT 1 LS $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 0% $ 50,000.00 $ 50,000.00 0% $ 50 ,000.00 $ 50,000.00 0% $ 50,000.00 $ 50,000.00 0% $ 50,000.00 $ 50,000.00 0% Base Bid Total: $ 755,102.08 $ 544,555.50 $ 598,898.00 $ 616,003.44 $ 739,854.14 $ 810,000.25 10% Contingency: $ 75,511.00 $ 54,456.00 $ 59,890.00 $ 61,601.00 $ 73,986 .00 $ 81,001.00 Total Base Bid: $ 830,613.08 $ 599,011.50 $ 658,788.00 $ 677,604.44 $ 813,840.14 $ 891,001.25 Over Engineer's Estimate: -28% -21% -18% -2% 7%

BASE BID SUMMARY CONTINUED

QTY UNIT AVG
UNIT PRICE BID TOTAL UNIT PRICE BID TOTAL Δ UNIT PRIC E BID TOTAL Δ UNIT PRICE BID TOTAL Δ UNIT PRICE 1 MOBILIZATION AND DEMOBILIZATION 1 LS $10 0,000.00 $ 100,000.00 $ 40,000.00 $ 40,000.00 -60% $ 153,976.52 $ 153,976.52 54 % $ 250,000.00 $ 250,000.00 150% $ 50,2 50.00 2 PUBLIC NOTIFICATION AND POSTING 1 LS $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 0% $ 9,932.42 $ 9,932.42 893% $ 5,000.00 $ 5,00 0.00 400% $ 2,526.62 3 TRAFFIC CONTROL 1 LS $ 50,000.00 $ 50,000.00 $ 30,000.00 $ 30,000.00 -4 0% $ 99,596.24 $ 99,596.24 99% $ 150, 000.00 $ 150,000.00 200% $ 24,250.00 4 SHEETING, SHORING AND BRACING 1 LS $ 5 0,000.00 $ 50,000.00 $ 25,000.00 $ 25,000.00 -50% $ 35,785.69 $ 35,785.69 -28% $ 150,000.00 $ 150,000.00 200% $ 29,250.00 5 INERT SOLIDS RECYCLING 244 TON $ 12 .56 $ 3,064.64 $ 30.00 $ 7,320.00 139% $ 55.34 $ 13 ,502.96 341% $ 100.00 $ 24,400.00 696% $ 60.50 6 INERT SOLIDS RECYCLING WITH FABRIC 244 TON $ 21.25 $ 5,185.00 $ 50.00 $ 12,200.00 135% $ 86.08 $ 21,003.52 305% $ 150.00 $ 36,600.00 606% $ 72.50 7 STRIPING 1 LS $ 5,000.00 $ 5,000.00 $ 22,000.00 $ 22,000.00 340% $ 30,566.73 $ 30,566.73 511% $ 40,00 0.00 $ 40,000.00 700% $ 24,137.50 8 UNFORESEEN UTILITY ALLOWANCE 1 LS $ 20 ,000.00 $ 20,000.00 $ 10,000.00 $ 10,000.00 -50% $ 23,543.88 $ 23,543.88 18% $ 1,000.00 $ 1,000.00 -95% $ 18,750.00 9 INSTALL 12-INCH HDPE PIPE 117 LF $ 46 8.75 $ 54,843.75 $ 650.00 $ 76,050.00 39% $ 900.92 $ 105,407.64 92% $ 650.00 $ 76,050.00 39% $ 491.78 10 INSTALL 36-INCH HDPE PIPE 283 LF $ 7 90.78 $ 223,790.74 $ 1,200.00 $ 33 9,600.00 52% $ 817.66 $ 231,397.78 3 % $ 1,200.00 $ 339,600.00 52% $ 891.98 11 INSTALL 12-INCH C900 PIPE 1 LF $ 400.00 $ 400.00 $ 2,000.00 $ 2,000.00 400% $ 12,573.51 $ 12, 573.51 3043% $ 2,500.00 $ 2,500.00 525% $ 4,951.33 12 VIDEO INSPECTION OF NEW SD PIPELINE 401 LF $ 10.00 $ 4,010.00 $ 15.00 $ 6,015.00 50% $ 122.96 $ 49,306.96 1130% $ 5.00 $ 2,005.00 -50% $ 11.94 13 TYPE A CATCH BASIN 4 EA $ 6,875.00 $ 27,500.00 $ 5,000.00 $ 20,00 0.00 -27% $ 26,751.68 $ 107,006.72 289% $ 30,000.00 $ 120,000.00 336% $ 8,11 0.30 14 INSTALL NEW SDMH JUNCTION BOX 1 EA $ 27,500.00 $ 27,500.00 $ 35,000.00 $ 35,000.00 27% $ 26,630.06 $ 26,630.06 -3% $ 180,000.00 $ 180,000.00 555% $ 2 5,322.65 15 TYPE A CURB AND GUTTER 65 LF $ 133 .00 $ 8,645.00 $ 50.00 $ 3,250.00 -62% $ 316.88 $ 20, 597.20 138% $ 150.00 $ 9,750.00 13% $ 80.62 16 TYPE B CURB AND GUTTER TRANSITION 34 LF $ 133.00 $ 4,522.00 $ 75.00 $ 2,550.00 -44% $ 261.95 $ 8,906.30 97% $ 150.00 $ 5,100.00 13% $ 94.11 17 SIDEWALK 107 SF $ 20.00 $ 2,140.00 $ 20.00 $ 2,140.0 0 0% $ 105.84 $ 11,324.88 429% $ 25.00 $ 2,675.00 25% $ 35.84 18 CURB RAMP 3 EA $ 13,000.00 $ 39 ,000.00 $ 3,000.00 $ 9,000.00 -77 % $ 7,019.99 $ 21,059.97 -46% $ 7,500.00 $ 22,500.00 -42% $ 6,074. 49 19 GAS SERVICE BACKFILL 1 EA $ 3,000.0 0 $ 3,000.00 $ 4,000.00 $ 4,000.00 33% $ 14,266.88 $ 14,266.88 3 76% $ 10,000.00 $ 10,000.00 233% $ 3,887.34 20 AC MILLING 13,015 SF $ 0.73 $ 9,500.95 $ 2.00 $ 26,030.00 174% $ 1.89 $ 24,598.35 159% $ 3.00 $ 39,045.00 311% $ 1.30 21 3-INCH AC OVER 8-INCH PCC OVERLAY 244 TON $ 250.00 $ 61,000.00 $ 500 .00 $ 122,000.00 100% $ 316.82 $ 77,304.08 27% $ 700.00 $ 170,800. 00 180% $ 337.63 22 COORDINATION FOR SDMH JUNCTION 1 EA $ 5,000.00 $ 5,000.00 $ 5,000.0 0 $ 5,000.00 0% $ 2,519.04 $ 2,519.04 -50% $ 25,000.00 $ 25,000.0 0 400% $ 7,021.75 23 EMERGENCY SUPPORT 1 LS $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 0% $ 50,000.00 $ 50,000.00 0% $ 50 ,000.00 $ 50,000.00 0% $ 50,000.00 Base Bid Total: $ 755,102.08 $ 850,155.00 $ 1,150,807.33 $ 1,712,025.00 10% Contingency: $ 75,511.00 $ 85,016.00 $ 115,081.00 $ 171,203.00 Total Base Bid: $ 830,613.08 $ 935,171.00 $ 1,265,888.33 $ 1,883,228.00 Over Engineer's Estimate: 13% 52% 127%

LOWEST BIDDER
WestRock Engineering
John Boyland Engineering, Inc. A3 Pipeline Casey Construction, Inc. Kerex Engineering Precison Engineering, Inc.

BID
# DESCRIPTION Engineer's Estimate Golden Bay Construction Frontline General BID
# DESCRIPTION Engineer's Estimate
1 of 1
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: May 18, 2026
Report #:2604-6227
TITLE
Approve Amendment Number 2 to Contract C3780 with Stanford University, to Extend the Contract Term to September 30, 2027 for Public Safety Dispatch Services Provided to the Main Campus of Stanford University; CEQA status—not a project.

RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or designee to execute Amendment No. 2 (Attachment A) to Contract C3780 (Attachment B), with Stanford University to extend the contract term to September 30, 2027 for dispatch services provided by the City of Palo Alto Police Department.

BACKGROUND
For several decades, the City of Palo Alto has provided the Stanford community with 911 call- taking, call processing, and public safety radio dispatch services. Within this engagement, the City also provides special services, including alarm monitoring, dispatching alarm technicians to address false alarms, and handling general information calls from Stanford community members and visitors. While the original executed Contract No. C-3780 has not been located by either party, historical records confirm its existence, including Budget Ordinance No. 2948, executed October 4, 1976, and Amendment No. 1, executed August 7, 1987. Those documents are provided in Attachment B and also online1.

ANALYSIS
Amendment No. 1 established a termination date of September 30, 2026. Although Stanford and the City have been in discussions to update the service agreement, those negotiations will not be concluded by that date. Accordingly, both parties have agreed to extend the current 1 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87932&dbid=0&repo=PaloAlto Item 11
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arrangement for one additional year and work toward a finalized agreement by September 30, 2027.

FISCAL/RESOURCE IMPACT
Stanford currently pays the City of Palo Alto approximately $1.2 million annually for this service and both the revenue and costs are recognized in the budget development process annually, subject to Council approval.

The City invoices a fixed quarterly amount calculated using the formula established in Amendment No. 1, applied against the adopted budget. Any variance between the estimated and actual costs is reconciled through a true-up adjustment included with the second-quarter invoice of the following fiscal year.

STAKEHOLDER ENGAGEMENT
Public safety staff from both parties have been meeting to discuss the engagement.

ENVIRONMENTAL REVIEW
The approval of this contract is exempt from review under the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15061(b)(3) because it can be seen that there is no possibility that the activity in question may have a significant effect on the environment.

ATTACHMENTS
Attachment A: Contract No. C3780 Amendment No. 2
Attachment B: Contract No. C3780 Dispatch services (including Amendment No. 1) APPROVED BY:

James Reifschneider, Police Chief
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C3780 Amendment No. 2

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• .
... '
• • • • ORIGINAL
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ORDINANCE NO. 2948
Ol<.Dit~ANCE 0~ THE COUNCIL OF THE CI'rY Or' PALO ALTO
.. AMEWDING THE BUDGET FOR THE FISCA,:L YEAR 1976:;:·77 TO . ~NABLE THE CITY TO PROVIDE Et-i.ERGENCY COt-tMUNICAIJl!0~1S SERVICES 1'0 STANFORD UNIVFRSITY
NhERBAS 1 th,e Council intends to provide· t'!mergency .communica tidns services to Stanford Universitv ·pursuant to a contiac~; \ ~ and
. 'WHLREAS'f it i.s antici.eated that +-he :;;rc·vi.siCJn uf said corr.- rm.ttiic~.t.i:o;i; ::;~.I·,vices\~·J.l.l r~sult · irr lowP.r costs \';ith the same l~vel of service to bo~h Stanford Univ2rsity and the City of Palo Al t\:);·
1;)
A/· NO\!?, THJ:.;RcFORE, the Counci 1 of the City of Pc.lo Alto does .

ORDAIN as. :i:ollows:
· . ·'SECTION 1~ The_'l976-'77 General
dommun:tc'il~ons ·Division is increased
Thirtt"'·tnree Dollars ($40,,433). The
tril:mteC;:(.a$ follows·: ' · ~. · ·.

Fund Ap~ropriations for the ·
by Fort~~· Thousand Four Hundred
budget ~r1crease shall be dis-
,,, I .

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.COJ:i'.m:ur;.i·ca tions Di vj.sioo
·Sala'riiE:s and. Benefits
._. G~na.t:ii:.l ·~xpeh.sas ·
· M.a ter ial§ . '· · · ·.
·Te~~~ica~ Services
W . .Total
,l,, •) ,, 1')•;
$39,243
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13.3 667'
$40,443
'" .. · ~PJ7't'T0~ 2 _ The positions lis ted hereunder shall be ·/Jd~d .'_:-::· .. ·:.tp ~h:e /tab+,~ "of. organization for the C9fii1Ilunipations .Oivi~:ion·~ ' ' ,. '" ' ~ ' 1·.: ·, ' ' ' : "" " • '::" ' ' ' ,C ' ' < " : • ' ' > ~ ~ • .'' .• .. ··.
1 '}· · communi9ato~ Lead
.... · 2 commU:nio.ators
... SECTION :L ': Dept.;rtmental revenues for the Co.rr~Tnunic;lti~wi ···· o'ivii3~Qn are fncio.:~.sad l,Jy SE:venty'~three' ·ThoUl::r~~d 'rl1.ree H!.L"1clred . uo:tlar.a·r:($7 3, 3oo > . • · ·
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.. 'SECTION 4 •. The'·:council finds that th.is project will have ql1o '~igi{fffca-"n t. adverse ei;1vi~·orlltlental impact. . ' ,,
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1 : sm;TION .5. Th.is ordinance shall become etfective immediately ·as prov~aecl In Section 12 of Article III of the Charter and Sec tiori 2. 0 4. 3'7 5 ·of the P~lo Alto 'Municip.=il Code. ' ~ '' ...
. INTRdDtJCEiQ AND PASSED:
.. · AYES: ~s, Benlald, ~Y~ Cc:llBtock, E.}~1 fly, ~, ifit.herstXXD ;."'' ,,
A~STE~TIONS: Sher
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r--
Stanford lfn .... ersilY I"/ill pay 19.3% of Ihc costs of .111 Ulpit.al equipment to be purc.hased o\ler the 1. fe of this agreement. P.llo Alto wi II be re"pons ible for the cost .. of ddd'ng one CQ"'lnunkdtiorl station (console) to the Co:lY'1unicatio!ls Center. "II other ;')Itlal capital and instJllatiofl <osts .... /ill be paid for by Stanford l'n~"er 50. t)"
PerSO(}Il<2" I
In ordc( f'\,( P.110 Alto to pr(]"ltide com~unicatioi'l s.::rvices to Stanford University's Police Dcp<'lftrnent. lhree addillol1at COWlunicators are neede_d. These positions are required to staff the addrticnal console ""hic.h will be added to our present c<n:vniCdllon::. faeil it)'. The_ nC'r{ cO[)5.ole is needed because the Palo Alto Police Oepdr~~elH i~, oper<Hlng on a UHf frequency \·;hile the Stanford University Police Oep.art~et\l IS <)per<ltinq on a Vf!F frcQuen<:.y.

As in the (ire consol~ddljon, the personnel iS5ue5 ~re the more rime consuming is".> .. es of rtlls contract, The staff is being very careful to assul-e thdt any .ajditl,,-~I,jl people hired bec-lus.e of thl~ corHracl \.rill in no \ ... a~' jeopardize the lJpCl)-olng ~lQnh County co.r.'"'tmications consolidation. Staff has been meeting with Poi'- (OUr'll)' re.gardlng the details 01 our partr(ular staffing plan.

Slafr IS proposing to fill t\';O of the three pOSitions by transferrinq employees frO! the MO<Jntdln Vie,", co·~.-'un~cat)()n<; center to Palo Alto. The Mountain Viel'l City tOJncll h~5 appro~ed of thiS transfer to help Palo Alto ensure that thi~ partlcul.lr cuntra<.t \,'dh Stdnford UI,iversity ~'iOuld not jeopardize the future coosolidation I-lith the County, He arc presently in the process of disc<Js.sinq the operational i<;.s.ue5 ,-lith SfIU.

Enl,l[roor;:('nl<1i If'lpac.t Statement
fhis.-C()fttrdct ho'> received') de<.Iaration of negiHive cnl,lirOnrnel1tdI il!'!pact as indicated in Appendix 8_
Rccl")('Tl1endal i on
Staff rC<'O'TYnencfs approval of the aU:a(.hed (.ontraCl and budget amcndrl,ent' (Appendix A)_
Re~pectfully submitted,
ED EyERETT
P(ogra~ and Operations Analyst
C~ARtES E. WALKEK
Assistant Cicy Hanager
AttachmenlS
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I I I '
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APPENDIX a
EHVIRONHENTAL DOCUM[NTS - l',\to "I.TO
(including cO!:;llunlctit:JoM servIces)
Location Palo Alto -- St·tl)ford _________ ~ ________ ; ______________ , _______ ~ Applir.ation for Council ,'PIlTO\'.'\l
(c. g.. bu ild 1~ g -per;-i-t;~-.s-c -p-e-l-~Tt-:-~o;j ;l-i·-~h~ 1\ b Ii • ---;J ~ 1! T\~i;-i~-;:;--;,~;:--t:tZ) ».ased upon the in[on:~lltioll on the enVll"O:1::cnt.1.1 \.·od:sh(,(,f~. th! lJ;dc"l"~ir.nl2j ,·_ .... I'I:>('T of the Planning Deparl~ent has ,,<Ide an rn\'iro;).u:,nlt.11 ".s:~('s:S:-.. !IH • ~ lh.e j'r.."Jec{ anJ h.lS c.or..::::"u~.;!..:::
llegntive'DccLuation: "Tne project h.J:~ no ~ir,nific.'nt '(::-1',oiI'('J,~~rHJl ir-p;;ct.

No environI:H::llt.;.·-:.l impact report is l"cqu fred. Th,:, rC;;S(H'l~ i." .lo ~"i1"~.H l\'i' Declaration .a r e no chanp~.!L..i.'~c.a 1 s t r.J£t __ ~!.t:.~·_~ ___ ~E __ J~_~:~~_ :~!_,:: ___ 1 __ '2.~·~ ~.:.:....J ____ ~_':.~ __ _ No governmental a.::tion will be taken on this ytojcc.t for {h(t~e d.1)'5 tollo ... ·inrt IhI.5 date.

R!!vj ewed D<J't" ing
Processing By:

Agency or
Dcpartoent
-
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CITY COUNCIL
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: May 18, 2026
Report #: 2603-6103
TITLE
PUBLIC HEARING / QUASI-JUDICIAL. 4103 Old Trace Road [25PLN-00298]: Request for Approval of a Tentative Map to Allow for the Subdivision of a Vacant 1.02-Acre Lot to Create Nine Residential Lots and One Private Street to Facilitate Construction of Nine New Single-Family Residences and Seven Junior Accessory Dwelling Units (25PLN-00296). CEQA Status: Exempt Pursuant to Assembly Bill 130 (Public Resources Code Section 21080.66). Zone District: RE (Residential Estate)

RECOMMENDATION
Staff recommends that Council take all of the following actions:

1. Consider the project exempt from the California Environmental Quality Act (CEQA) in accordance with Assembly Bill 130 (Public Resources Code section 21080.66); and,

2. Approve the Tentative Map application pursuant to findings and subject to conditions of approval set forth in Attachment B.

EXECUTIVE SUMMARY
The applicant requests approval of a Tentative Map to allow the subdivision of a vacant 1.02- acre parcel into nine (9) residential lots served by a new private street located at 4103 Old Trace Road. Through a separate, Streamlined Housing Development Review (SHDR) application, the applicant proposes to construct five detached single-family residences with Junior Accessory Dwelling Units (JADUs), two attached single-family residences with JADUs, and two attached single-family residences (without any accessory units) for a total of 16 units. The attached single-family residence on Lot 9 is proposed at below market rate, made affordable to moderate income households earning no more than 100% of the Area Median Income (AMI).

The project is exempt from CEQA pursuant to Assembly Bill (AB) 130 for Qualifying Infill Housing Projects and is proposed in accordance with State Density Bonus Law.

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BACKGROUND
The proposed application is a request from Steel Bridge Homes Palo Alto for approval of a Tentative Map to subdivide a vacant 1.02-acre lot into nine (9) residential lots served by a new private street (designated as Lot 10 in the proposed plans) located at 4103 Old Trace Road.

Through a separate, Streamlined Housing Development Review (SHDR) application, the applicant proposes to construct five detached and two attached single-family residences, each with JADUs, as well as two attached single-family residences for a total of 16 units. One of the single-family residences is a bonus unit under State Density Bonus law. The applicant is proposing one unit at below market rate made affordable to moderate income households earning no more than 100% of the Area Median Income (AMI).

The map also includes the offer of dedication for proposed drainage and public utility easements, which are required per the City of Palo Alto Utility and Public Works Engineering Department standards. A private street is proposed on the map to serve the proposed residences. A location map is included in Attachment A. A link to the proposed Tentative Map is included in Attachment G.

Requested Entitlements, Findings, and Purview:

The following discretionary applications are being requested:
Tentative Map and Final Map for lot subdivision purposes: The process for evaluating this type of application is set forth in Title 21 of the Palo Alto Municipal Code (PAMC) and California Government Code 66452. The process for approval of a Tentative Map for a lot subdivision is outlined in PAMC Section 21.12.090. Tentative maps require Planning and Transportation Commission (PTC) review. The PTC reviews and makes a recommendation on whether the proposed subdivision is consistent with the Subdivision Map Act (Government Code 66474), Title 21 of the PAMC, the Palo Alto Comprehensive Plan, and other applicable provisions of the PAMC and State law. The PTC’s recommendation is forwarded to the City Council for final approval.

Council’s discretion over the formal application is limited by the following State laws:
Housing Accountability Act (Government Code 65589.5): The project constitutes a “housing development project” under the Housing Accountability Act. The Housing Accountability Act Section 65589.5(j) requires that when a proposed housing development project complies with applicable, objective general plan and zoning standards, a local agency may only deny or reduce the density the project or reduce its density if the agency first finds that, (1) the development would have a specific adverse impact on public health or safety unless disapproved, or approved at a lower density; and (2) there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact, other than the disapproval, or approval at a lower density. For purposes of the Housing Accountability Act, the receipt of a density bonus, incentive, concession, waiver, or reduction of development standards shall not constitute a valid basis on Item 12
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which to find a proposed housing development project is inconsistent with objective standards.
State Density Bonus Law (Government Code Section 65915): State density bonus law defines “base density” to mean the greatest density permitted in either the zoning code or general plan land use designation, including the top of the range, when a range of densities is provided. In addition, when an applicant agrees to provide a specified percentage of units at affordable prices/rents, the applicant is entitled to unlimited waivers of development standards that physically preclude the project and a number of concessions/incentives that result in actual and identifiable cost reductions. Senate Bill (SB) 330 (Government Code Section 65943): California SB 330 (Housing Crisis Act of 2019) allows applicants to freeze local standards at the time a compliant pre- application is submitted and limits the number of public hearings of housing projects to five hearings. SB 330 requires a formal submittal to be provided within 180 days of filing the pre-application.
State ADU Law (California Government Code Sections 66314-66331): This State code establishes a statewide baseline for how cities and counties in California may regulate ADUs by local ordinance and what ADUs/JADUs must be approved regardless of conflicting local regulations. It authorizes ADUs on lots zoned for single-family or multi- family residential use with an existing or proposed dwelling; permits separate rental while generally prohibiting separate sales of ADUs/JADUs except where ADU sales provisions apply; and sets size limits for detached and attached ADUs and JADUs. It also restricts conditioning approval on correcting unrelated nonconformities, limits sprinkler triggers and requires rentals for a period greater than 30 days (i.e., restricts short-term rentals). State law requires that proposals to construct ADUs/JADUs be considered ministerially; even when an ADU/JADU is proposed as part of a larger project subject to discretionary review, the ADU/JADU must be considered separately and ministerially after the discretionary review is complete.

A separate SHDR application is proposed. The process for evaluating this type of application is set forth in PAMC Section 18.77.073. SHDR applications require a study session with the Architectural Review Board (ARB) and recommendations are forwarded to the Planning & Development Services Director for action following the review. Action by the Director is appealable to the City Council if filed within 14 days of the decision. Pursuant to PAMC Section

18.40.170, the Director may also defer to a final decision to City Council. Streamlined Housing projects are evaluated against specific findings. Both of the findings must be made in the affirmative to approve the project. Failure to make any one finding requires project re-design or denial.

Neighborhood Setting and Character
The project is located on Old Trace Road in the Esther Clark Park neighborhood and is surrounded on the east, west, and south by single-family residences within the Residential Item 12
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Estate (RE) zone district. To the north of the property is a research facility and office within the Research Park zone district. Surrounding development is primarily two-story. The site is located near research facilities to the west and four public schools within one mile distance to the east.

ANALYSIS
The proposed project currently under consideration, and relevant discussion and findings herein, reflect the Tentative Map, not the new houses proposed to be built on the proposed parcels. Staff is currently reviewing the associated SHDR application for construction of the proposed housing units. The map does include dedication of relevant public utility and drainage easements associated with the new development.

On April 29, 2026, the PTC considered the Tentative Map and voted unanimously to recommend approval to Council with minor edits to the tentative map findings and to the conditions of approval, as follows:
Ensure that condition #4 requires deed restriction for a BMR unit; Consider allowing public participation in street naming as described in condition of approval #6;
Ensure Conditions #8, and 41-48 include all transportation improvements; Ensure Conditions #50 and 51 are consistent with Public Works recommendations; Include a requirement for a Construction Management Plan for the construction of future housing;
The PTC also recommended the following for Council’s consideration:
Consider future investigation and development of fire safety standards to protect against impacts on adjacent neighbors;
Consider future update to parking requirements for guests and ADUs; Consider other regulations to address cumulative/compounding impacts on neighbors; and
Consider reduction in maximum density allowed for this area under the Comprehensive Plan.

The PTC discussed cumulative impacts of the proposed housing development on existing neighborhood circulation and safety concerns. They expressed concern about potential unintended consequences of these improvements, including drivers attempting to turn right from Arastradero Road onto the private street despite the no-right-turn restriction, which could slow traffic, and the possibility that red-striping along the Old Trace Road frontage could shift parking impacts farther into Old Trace Road. As an alternative to the proposed two-way private street, the PTC discussed the possibility of a one-way private street configuration. However, based on the applicant’s traffic analysis, a one-way private street operating from Old Trace Road to Arastradero Road, combined with the existing median on Arastradero Road, would not Item 12
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allow residents of the new development to make left turns onto Arastradero Road. Instead, westbound traffic would be required to exit onto Arastradero Road and continue to the next location where a U-turn is permitted; however, U-turns are not allowed at the Foothill Expressway intersection.

Additional comments focused on whether the proposed subdivision and associated housing development would disrupt the area’s semi-rural character and preserve the scenic views along Arastradero Road, one of the City’s scenic gateways. The Commissioners emphasized that safety issues should be further evaluated by Council in the context of the broader community, not just within the project boundaries, particularly with respect to objective fire and safety standards, access and circulation on the private street and Arastradero Road, neighborhood ingress and egress on Old Trace Road, and guest parking on the subject site.

Summary of Response to PTC Comments
Conditions #4 requires deed restriction of the affordable housing unit in accordance with State Density Bonus Law and the City’s affordable housing requirements. Condition #6 has been updated to require that PAHA consider any recommendations submitted by residents for the naming of the private street. Historically, the Palo Alto Historical Association has been open to considering any suggestions submitted for the name; though, ultimately, the selected name is reflective of historical research of the property or area. Conditions #8 and 41-48 include all transportation improvements. Conditions #50 and 51 are consistent with Public Works recommendations. Condition #52 has been added to note that the Stormwater Management Plan will be finalized at the time of the SHDR application. A construction management/logistics plan will be required as a condition of approval for the SHDR application per the City’s standard conditions of approval for a development.

Additional recommendations from the PTC are intended for Council’s consideration to modify existing City plans and/or standards.

Consistency with the Comprehensive Plan, Area Plans, and Guidelines1 The proposed Tentative Map is consistent with the Comprehensive Plan, in that the land use designation for the property is “Single Family Residential”, which allows for detached single- family residential uses, as is currently proposed for each resulting parcel. Net densities ranging from 1-7 units per acre and can increase up to 14 units per acre on parcels that include a second unit or a duplex. Pursuant to State Density Bonus Law, the Comprehensive Plan results in a base density of eight units for this parcel,2 consistent with the proposed density prior to density bonus and JADUs.
1 The Palo Alto Comprehensive Plan is available online: http://bit.ly/PACompPlan2030 2 “Base density” means the greatest number of units allowed under the zoning ordinance, or land use element of the general plan, or, if a range of density is permitted, means the highest density in that range. In addition, all Item 12
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5 The proposed map facilitates development of a vacant parcel within the City’s urban service area which is consistent with Policy L-1.3 wherein, “infill development shall be compatible with its surroundings and the overall scale and character of the city.” Moreover, the proposed project complies with Housing Element Policy 3.2 to, “provide adequate sites, zoned at appropriate densities and development standards to facilitate both affordable and market-rate housing production.” The findings for approval of the subdivision map in Attachment B include a complete analysis of the project’s consistency with the relevant Comprehensive Plan policies.

Zoning Consistency6
The site is zoned RE (Residential Estate). The project includes single-family use of each resulting lot, which is a permitted use within the RE zone district. As allowed pursuant to ADU law, JADUs are proposed on seven of the nine resulting lots as accessory uses to the primary dwelling units.

These units do not count toward maximum density and may be constructed in accordance with the provisions pursuant to ADU law under California Government Code Sections 66314 through 66331 and the City’s ADU regulations as set forth in PAMC Chapter 18.09.

Attachment C includes a summary of the Tentative Map’s consistency with zoning development standards, including the base RE zoning standards, as they relate to the lots to be created.

Pursuant to State Density Bonus Law, the City must grant any number of development waivers needed to avoid standards that would physically preclude the project at the allowed density.

Under State Density Bonus Law, the City may request reasonable documentation to confirm eligibility but may not require a new study or report. The City bears the burden of identifying a valid basis to deny a concession or waiver. For concessions, the City may request documentation showing that the requested concession results in a cost reduction. For waivers, the City may request documentation explaining how the standard would otherwise physically prevent construction at the proposed density.

The application includes the following waiver requests related to the approval of the Tentative Map:7

1.Lot Size: Reduce the minimum lot size as set forth in the RE zone and Title 21 from one acre (PAMC Section 18.10.040(a), Table 2) and 6,000 square feet (PAMC Section

21.20.100), to allow for proposed lots to range in size from 1,570 square feet to 6,907 square feet.

2.Setback: Reduce the special setback on Arastradero Road from 53 feet to:
9 feet, 6 inches, on Lot 5; and
calculations under State Density Bonus law are rounded up to the next whole number. The Comprehensive Plan Land Use designation allows up to seven units per acre; 7 du/ac * 1.02 ac = 7.14 du, which is rounded up to 8 units. 6 The Palo Alto Zoning Code is available online: https://bit.ly/PAZoningCode 7 Additional waivers are required for the SHDR application and are detailed in Attachment F.

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15 feet on Lots 6 and 9.

3.Street width: Reduce the minimum width of the private street from 32 feet (PAMC Section 21.20.024 (b)(4)) to 20 feet.

4.Site depth: Reduce the minimum site depth from 100 feet (PAMC Section 18.10.040 (a), Table 2) to 59 feet.

With respect to the setback on Arastradero Road, staff research indicates that it is possible that at the time this special setback was established, the setback may have been measured from the centerline of the street. Nevertheless, the special setback under the current code provisions is measured from the edge of the drainage easement on Arastradero Road. Therefore, although no setback is proposed for Lots 6 and 9, when measured from the drainage easement, the physical improvements on those properties would be set back 15 feet from Arastradero Road.

The applicant’s project description is provided in Attachment F and includes a list of requested waivers and concessions in accordance with State Density Bonus Law and the justification for the requests. As detailed further in this report, if the project is designed to comply with all relevant development regulations, after application of density bons incentives, concessions and waivers, the City cannot impose conditions that would preclude construction of the project as proposed.

Multi-Modal Access
Vehicular Circulation
The project site is currently vacant and has no existing curb cuts. The project proposes a new 20-foot-wide private street to provide access to the residential lots. Although the proposed private street width does not meet the 32-foot minimum required by PAMC Section 21.20.240, the applicant has requested a waiver from this development standard pursuant to State Density Bonus Law. As documented in the traffic study provided in Attachment E, the proposed street width would accommodate the turning movements of passenger vehicles, emergency vehicles, and refuse trucks.

Although a single driveway connection from Old Trace Road would be preferable from a pedestrian and bicycle safety perspective (i.e. eliminating the curb cut on Arastradero Road), the proposed through-access configuration would improve on-site circulation and better accommodate emergency vehicles and refuse collection operations. Without the connection to Arastradero Road, refuse service would need to be staged along the Old Trace Road frontage rather than serviced in front of the individual residences/lots. The curbs along the private street would be painted red to designate a fire lane to support fire apparatus and staging and maintain unobstructed access for emergency vehicles.

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Due to the reduced width of the private street, staff identified a potential conflict point for vehicles turning into the new private street from Arastradero Road. In response to concerns raised by the ARB and public commenters at the March 5, 2026, ARB study session, the applicant revised the map to restrict right-turn movements from Arastradero Road into the new private street. This restriction would be implemented through a reduced curb radius design to physically restrict right-turn movements, in conjunction with proper signage and striping at the west corner of the Arastradero Road entrance.

Driveway Configuration and Parking
The project shows individual driveways for Lots 1, 4, and 5 and shared driveways for Lots 2, 3, and 6 through 9. The private access easements for shared driveways will either be reflected on the Final Map or recorded through separate instrument in conjunction with the Final Map, as reflected in the conditions of approval. Parking configurations for each lot would be clarified as a part of the SHDR application and are anticipated to comply with the City’s parking regulations set forth in PAMC Chapter 18.52.

Parking configurations for each lot would be clarified as a part of the SHDR application and are anticipated to comply with the City’s parking regulations set forth in PAMC Chapter 18.52. The Municipal Code requires two parking spaces per single-family unit, including at least one covered space and one uncovered space. No visitor parking is required or proposed as a part of this project. Although the applicant is encouraged to consider providing additional parking for guests as part of the project design under the SHDR application, particularly in response to neighbor comments, there is no code requirement to provide guest parking in the code.

Emergency Vehicle Access
Per the recommendation of the Office of Transportation (OOT) and Public Works Department, the applicant is evaluating parking restrictions along one or both sides of Old Trace Road adjacent to the project site. This would prevent on-street parking from impeding emergency vehicles and refuse truck access to the private street (as shown in the transportation analysis) in addition to addressing an existing condition raised by commenters at the ARB hearing, which noted that when cars are parked on Old Trace Road near Arastradero Road, access for certain emergency vehicles may be temporarily restricted. It should also be noted that parking within 20 feet of the approach side of any marked or unmarked crosswalk is already prohibited under California's Daylighting Law (Assembly Bill 413, California Vehicle Code 22500(n)), which took effect January 1, 2024, and has been fully enforceable since January 1, 2025. As such, parking within the 20- foot approach is not permitted under state law, regardless of curb markings or signage. The proposed red curb markings will provide clear delineation of this existing legal restriction, ensuring drivers are aware of parking restrictions. The applicant is coordinating with both departments and the project civil engineer regarding installation of red curb markings and/or signage along the Old Trace Road frontage.

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It is important to note that the existing curb to curb condition on Old Trace Road is 30 feet, with parking allowed on both sides and no sidewalk. The proposed curb-to-curb width would be maintained, with parking now restricted on Old Trace Road between Arastradero and the new private street, and the addition of a sidewalk adjacent the 4103 Old Trace Road property beyond that 30-foot curb-to-curb. Therefore, the project addresses an existing safety condition raised by residents about emergency vehicles access and adds pedestrian improvements, which improve emergency vehicle access in comparison to existing conditions.

Bicycle and Pedestrian Improvements
The project proposes new bicycle lane markings along the existing bikeway on Arastradero Road, including green pavement markings at the Arastradero Road site entrance. New four-foot sidewalks are proposed along the property edges and on the north side of the private road to improve pedestrian circulation, accessibility, and safety. The sidewalk along Old Trace Road was added in response to neighbor comments at the ARB hearing to further improve pedestrian safety. The City’s Office of Transportation has identified this area as a potential bicycle conflict zone and the proposed multi-modal circulation changes would improve conditions for both bicyclists and pedestrians.

Several residents either contacted staff or provided comments during the ARB and PTC hearing, expressing concerns about pedestrian safety along Arastradero Road, particularly highlighting the increased use of the corridor by school-aged children and older adults. The OOT had previously evaluated this intersection as a part of a separate analysis. At that time, additional crossing treatments were not warranted according to state standards (such as CA-MUTCD). For this project, staff applied engineering judgment to incorporate contextual considerations related to school routes and anticipated pedestrian activity associated with the proposed development. Based on these factors, staff find the project proposed improvement of a Rectangular Rapid Flashing Beacon (RRFB) at the existing marked crosswalk to be a beneficial safety measure along Arastradero Road as these devices increase driver yield compliance at crossings on roads with speed limits under 40mph.

ARB members requested that staff evaluate the feasibility of a STOP-controlled intersection in response to public comment. Upon review of the current expected traffic volumes and applicable warrant criteria, OOT staff does not recommend installation of a stop control device at this location; the RRFB is an appropriate traffic calming measure that is proposed to address the concerns about pedestrian safety raised by residents.

Trip Generation
The proposed subdivision would result in nine single-family residential parcels with nine primary residences and JADUs on seven of the nine lots. JADUs do not have an established trip generation rate in the Institute of Transportation Engineers (ITE) Manual because they generally function as an extension of the primary residence or as guest accommodations, with Item 12
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lower vehicle ownership and trip generation than primary dwellings. Therefore, the subdivision, which would develop one single-family residence on each resulting lot, is expected to increase net PM peak trips from zero to nine, as detailed in Attachment E. Even using a conservative assumption, the seven JADUs would generate approximately four additional PM peak hour trips, including two inbound and two outbound trips. However, pursuant to SB 54310, impact fees may not be imposed on ADUs of 750 square feet or less or on JADUs since they are always less than 500 square feet. Accordingly, no transportation impact fees would be required for trips attributed to the proposed JADUs, consistent with the conclusions derived in Attachment E.

FISCAL/RESOURCE IMPACT
Processing of this application has no fiscal impact, as the applicant is responsible for all staff and consultant costs through applicable fees established per the 2026 Municipal Fee Schedule.11 The project would be required to pay Development Impact Fees, currently estimated at $931,404.74, in addition to the applicable public art fee. Further, pursuant to PAMC Section 16.65.030(c), a housing in-lieu fee, currently estimated at $588,316.67, would be required for the fractional affordable housing unit. The parkland dedication fee must be paid prior to Final Map approval. All other fees associated with the streamlined development application would be due prior to issuance of building permits. Fees may be deferred to occupancy in accordance with PAMC Section 16.65.030(c) and State law.

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 this subject property at least ten (10) days in advance. Notice of public hearing for this project was published in the Daily Post and postcard mailing occurred on May 8, 2026, which is 10 days in advance of the meeting.

Public Comments
At the ARB Study Session on March 5, 2026, approximately 20 members of the public commented on the project. Key comments included:
Lack of bicycle and pedestrian infrastructure along Old Trace Road. Congestion and queuing along the Old Trace Road and Arastradero Road intersection. Limited ingress and egress to and from Old Trace Road onto Arastradero Road with added traffic impact from the proposed development.
Emergency services access.
Potential construction impacts.
10 SB 543 Bill Text: Bill Text - SB-543 Accessory dwelling units and junior accessory dwelling units. 11 Link to 2026 Municipal Fee Schedule: Adopted Municipal Fee Schedule.book Item 12
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Several members of the public who attended the ARB Study Session were also present at the PTC hearing on April 29, 2026, and reiterated their concerns on the aforementioned topics. One concern raised at the PTC hearing was regarding the potential impacts on homeowners’ insurance as a result of the new development, a concern which was also voiced by several Commissioners. While staff cannot speak to the experience of individual public commenters, staff did reach out to an insurance agent for more insight into this statement and were informed that the proposed development should not have an impact on the availability of insurance on neighboring properties. The public also requested to stay involved in the naming of the private street which per City of Palo Alto Resolution 5739 requires a recommendation from the Palo Alto Historical Association (PAHA) and approval by Council prior to recordation of Final Map. Historically, PAHA has considered any names put forth by neighbors or developers.

However, in accordance with this resolution, PAHA selects and recommends a name for the street based on historical research of the area. Therefore, staff will convey any naming suggestions from the neighbors to PAHA, but no changes have been made to the City’s standard condition of approval.

Overall, members of the public urged the applicant and City staff to consider existing safety and accessibility conditions at this location, including the street right-of-way width and emergency vehicle access. The applicant has revised the Tentative Map to include transportation safety improvements listed above and is currently revising the proposed housing improvements based on feedback from the ARB as well as neighboring residents. The applicant has agreed to a tolling agreement for the Streamlined Housing Development Review application to extend the strict timelines imposed on the City by AB 130. This extension will allow for additional meaningful changes to address comments raised by members of the public and the ARB.

However, the applicant has not agreed to a tolling agreement for the Tentative Map.

All public comments received till date are included in Attachment D.

ENVIRONMENTAL REVIEW
The subject project has been assessed in accordance with the authority and criteria contained in CEQA, the State CEQA Guidelines, and the environmental regulations of the City. On January 25, 2026, the applicant requested that the project be considered exempt under AB 130 (Public Resources Code Section 21080.66). AB 130 exempts certain urban infill housing projects from CEQA and additionally sets strict timelines for City review and decision. Under California Government Code Section 55421 and the definitions of “urbanized area” and “infill site” pursuant to Public Resources Code (PRC) Sections 21094.5 and 21061.3, all properties within the City of Palo Alto are considered to be located in an urbanized area because they are within an incorporated city. While the City may adopt its own context definitions for planning and zoning purposes, those local definitions do not govern project eligibility under AB 130.

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On February 4, 2026, following the applicant’s submittal of additional information and revised plans, the City determined that the project meets the definitions of “urbanized area” and “infill site” under the PRC sections referenced above and is exempt from CEQA pursuant to AB 130.

Accordingly, the City sent notification letters inviting tribes to participate in consultation on the project.

The City received one request for consultation from Tamien Nation and consultation was completed May 3, 2026. The City is required to make a decision on this project within 30 days following the completion of consultation, in accordance with the streamlined process timelines set forth in AB 130.

ATTACHMENTS
Attachment A: Location Map Attachment
Attachment B: Draft Record of Land Use Action
Attachment C: Zoning Consistency
Attachment D: Public Comments
Attachment E: Transportation Study
Attachment F: Project Description Letter
Attachment G: Project Plans
APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 12
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DRAFT ACTION NO. 2026-__

RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION FOR 4103 OLD TRACE ROAD: TENTATIVE MAP, 25PLN-00298
At its meeting on ____________, the City Council of the City of Palo Alto (“City Council”) _____________the Tentative Map to subdivide a vacant lot into nine residential lots, making the following findings, determinations and declarations:

SECTION 1. Background.

A. On November 7, 2025, Steel Bridge Homes Palo Alto submitted a subdivision map application for a Tentative Map to subdivide a vacant lot into nine residential lots at 4103 Old Trace Road (“The Project”).

The project site is a vacant 1.02-acre lot situated at the intersection of Arastradero Road and Old Trace Road (APN 175-20-078). Adjacent uses include a mix of one- and two-story single- family residences to the east, west and south and a research facility to the north.

B. Following staff review, the Planning and Transportation Commission reviewed the project and recommended unanimous approval on April 29, 2026, subject to conditions of approval.

C. On _____________2026, the City Council held a public hearing in accordance with the City Council’s policies and procedures and __________the project subject to conditions of approval.

SECTION 2. Environmental Review. The City, as the lead agency for the Project, has determined the project is exempt from California Environmental Quality Act (CEQA) in accordance with AB 130 [Public Resources Code section 21080.66]. Documentation to support the streamlined review is available as part of the public record on file with the Planning and Development Services Division.

SECTION 3. Tentative Map Findings. A legislative body of a city shall deny approval of a Subdivision Map, if it makes any of the following findings (California Government Code Section 66474). The City Council cannot make these findings for the following reasons:

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1.That the proposed map is not consistent with applicable general and specific plans as specified in Section 65451:

There is no adopted specific plan for this project site. The site is consistent with the Comprehensive Plan as described below.

2.That the design or improvement of the proposed subdivision is not consistent with applicable general and specific plans:

There is no adopted specific plan for this project site. The proposed Tentative Map and related improvements are consistent with the Comprehensive Plan in that it facilitates housing development on a site designated for single-family use within the urban services area, consistent with Policy L-1.3 of the Land Use Element and Policy 3.2 of the Housing Element. The proposed density is consistent with the range of densities provided in the Land Use Element, as modified by State Density Bonus law. The Project includes nine residential lots, each with a single-family residence; seven of the nine residences include Junior Accessory Dwelling Units (JADUs). One of the single-family residences is provided at a rate affordable to moderate- income households earning no more than 100% of the Area Median Income (AMI). The Project proposes in-fill development and contributes to the housing inventory.

3. That the site is not physically suitable for the type of development:

The Project site is suitable for single-family residential development in that the Comprehensive Plan land use designation of “Single Family Residential allows for detached single-family residential neighborhoods with net densities ranging from 1-7 units per acre and can increase up to 14 units per acre on parcel that include a second unit or duplex. The proposed number of single-family units created on the resulting parcels complies with the applicable densities set forth in the land use element and zoning code. In addition, the Project is proposed pursuant to the State Density Bonus Law and Housing Accountability Act (Government Code section 65589.5) and is consistent with the standards set forth therein.

4.That the site is not physically suitable for the proposed density of development:

The proposed project consists of one single-family residence on each of the nine resulting lots, which is permitted use within the Residential Estate (RE) zoning district. In addition, Junior Accessory Dwelling Units (JADUs) are proposed on seven of the nine lots. Pursuant to State ADU law, the JADUs are considered accessory to the primary dwelling units and are not counted toward the maximum allowable residential density. The base density for the site is calculated at 7 dwelling units on a 1.02-acre lot, resulting in a fractional density of 7.14, rounded up to 8 dwelling units per acre pursuant to Palo Alto Municipal Code (PAMC) Section 18.15.020(u). The applicant proposes a total of 9 dwelling units, including one affordable unit, and is therefore entitled to a 7% density bonus pursuant to State Density Bonus Law. Accordingly, the proposed Item 12
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density of 9 dwelling units per acre is consistent with the density permitted under State Density Bonus Law.

Additionally, pursuant to State Density Bonus Law, the City is required to grant one concession and any number of waivers or reductions of development standards necessary to avoid physically precluding the project from being constructed at the permitted density. The applicant has requested waivers from the minimum lot size, minimum lot depth, and minimum private street width requirements which are within the allowances of State law. The applicant has also requested a waiver to reduce the special setback along Arastradero Road from 53 feet to 15 feet as measured from the property line to the proposed improvements; the 15 feet would be inclusive of the proposed drainage easements on Lots 6 and 9.

5. That the design of the subdivision or the proposed improvements are likely to cause substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat:

The project is located within the built environment that does not contain quality habitat for fish or other wildlife on the site or within the vicinity of the site. The nearest creeks are Barron Creek approximately 230 feet to the northwest of the project site and Dry Creek approximately 400 feet to the northeast of the project site. The adopted Palo Alto 2030 Comprehensive Plan includes Map N-1, which identified sensitive animal and plant species within the Palo Alto quadrangle, a large geographic area that includes the urban portions along the bay and within the foothills, based on information in the California natural Diversity Database (CNDDB). Based on this map, and the urban nature of the site, the subject property does not contain any habitat for endangered, rare, or threatened species.

6. That the design of the subdivision or type of improvements is likely to cause serious public health problems:

The subdivision of this parcel and associated improvements would not have the potential to result in serious health problems. The proposed single-family use would not include use or storage of hazardous materials, and the use is located within the urban environment adjacent to other urban residential or commercial uses. The site is also not located within a plume or hazardous waste site pursuant to Government Code Section 65962.5. In addition, the proposed private street width is sufficient to accommodate turning movements of passenger vehicles, emergency vehicles, and refuse trucks. As conditioned, the project will restrict right turn movements from Arastradero Road, reducing the potential for vehicle conflicts.

7. That the design of the subdivision or the type of improvements will conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision. In this connection, the governing body may approve a map if it finds that alternate easements, for access or for use, will be provided, and that these will be substantially equivalent to ones previously acquired by the public. This subsection Item 12
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shall apply only to easements of record or to easements established by judgment of a court of competent jurisdiction and no authority is hereby granted to a legislative body to determine that the public at large has acquired easements for access through or use of property within the proposed subdivision.

There are no public access easements over the property currently. Therefore, the design of the subdivision will not conflict with any public easements for access through, or use of, the property. New public utility easements will be provided to existing and proposed electrical utilities as part of this subdivision map as required in accordance with City of Palo Alto Utilities standards. A new 20-foot private street will be provided to provide access to the proposed residential lots, including an additional 10 feet width along Lots 6, 7 and 8 to provide a 4-foot wide sidewalk, consistent with project plans.

SECTION 4. Tentative Map Approval Granted. Tentative Map Approval is filed and processed in accordance to PAMC Section 21.12.090 and granted by the City Council under PAMC Sections

21.12 and 21.20 and the California Government Code Section 66452, subject to the conditions of approval in Section 6 of this Record of Land Use Action.

SECTION 5. Final Map. The Final Map submitted for review and approval by the City Council shall be in substantial conformance with the Tentative Map prepared by Steel Bridge Homes titled “THE OAKS SUBDIVISION TENTATIVE SUBDIVISION MAP” consisting of eleven pages, dated and submitted May 5, 2026, except as modified to incorporate the conditions of approval in Section 6. A copy of the Tentative Map is on file in the Department of Planning and Development Services, Current Planning Division. Prior to the expiration of the Tentative Map approval, the subdivider shall cause the subdivision or any part thereof to be surveyed, and a Final Map, as specified in Chapter 21.08, to be prepared in conformance with the Tentative Map as conditionally approved, and in compliance with the provisions of the Subdivision Map Act and PAMC Title 21 and submitted to the City Engineer (PAMC Section 21.16.010[a]).

SECTION 6. Conditions of Approval.

Planning

1. PROJECT PLANS. The Final Map submitted for review and approval by the City Council shall be in substantial conformance with the Tentative Map titled “THE OAKS SUBDIVISION TENTATIVE SUBDIVISION MAP”, prepared by Steel Bridge Homes and submitted May 5, 2026, except as modified to incorporate the conditions of this approval.

2. FINAL MAP COVER PAGE. At such time as the Final Map is filed, the cover page shall include the name and title of the Director of Planning and Development Services.

3. DEVELOPMENT IMPACT FEES. The Property Owner or their designee shall pay all applicable development impact fees associated with the proposed development and Item 12
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subdivision prior to issuance of the building permit(s) or recordation of the Final Map. Impact fees may be paid prior to occupancy in accordance with the requirements under PAMC

16.64.030 and as permitted by Sb 937.

4. BELOW MARKET RATE (BMR) HOUSING. Prior to issuance of a building permit or recordation of the Final Map, whichever occurs first, the applicant shall execute and record a BMR regulatory agreement in a form satisfactory to the City Attorney. The regulatory agreement shall restrict the sale of at least one (1) lot and improvements at prices affordable to moderate income households earning no more than 100% of the Area Median Income (AMI). The project shall conform to the approved regulatory agreement, which shall be recorded prior to issuance of building permit or Final Map, whichever occurs first. All BMR units constructed under this condition shall be in conformance with the City’s BMR Program rules and regulations, Failure to comply with the timing of this condition and any adopted BMR Program rules and regulations shall not waive its later enforcement.

5. IMPACT FEE 90-DAY PROTEST PERIOD. California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY PERIOD

OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. If these requirements constitute fees, taxes, assessments, dedications, reservations, or other exactions as specified in Government Code Sections 66020(a) or 66021, this is to provide notification that, as of the date of this notice, the 90-day period has begun in which you may protest these requirements. This matter is subject to the California Code of Civil Procedures (CCP) Section 1094.5; the time by which judicial review must be sought is governed by CCP Section 1094.6.

6. STREET NAME. The applicant shall comply with City of Palo Alto Resolution 5739, which requires a recommendation from the Palo Alto Historical Association (PAHA) and approval by City Council for new street names prior to recordation of a Final Map.

7. HOUSING DEVELOPMENT APPROVAL. Prior to application for the Final Map, applicant shall obtain approval of a housing development project for at least sixteen (16) units on the site.

8. MULTIMODAL CIRCULATION IMPROVEMENTS. The applicant shall incorporate, either in the Final Map or the housing development project approval, as appropriate, at least the Item 12
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following multimodal transportation improvements as currently reflected in the Tentative Map:
a. Restricted right-turn movements from Arastradero Road into the private street.

This restriction shall be implemented through a reduced curb radius design to physically restrict right-turn movements, in conjunction with proper signage and striping at the west corner of the Arastradero entrance. b. New bicycle lane markings along the existing bikeway on Arastradero Road, including green pavement markings at the Arastradero Road site entrance. c. New four-foot sidewalks along property frontages on Arastradero Road and Old Trace Road, as well as the north side of the proposed private street. d. New Rectangular Rapid Flashing Beacon (RRFB) at the existing marked crosswalk on Arastradero Road.

9. CULTURAL SENSITIVITY TRAINING. Prior to any on-site grading work, the project applicant shall be required to submit evidence that a Cultural Awareness Training program has been provided to construction personnel. The training shall be facilitated by a qualified archaeologist in collaboration with a Native American representative registered with the Native American Heritage Commission for the City of Palo Alto and that is traditionally and culturally affiliated with the geographic area as described in Public Resources Code Section 21080.3.

10. SUB-SURFACE MONITORING. Prior to any tree removal, grading, demolition, and/or building activities, the applicant shall notify the Director of Planning, of grading and construction dates and activities that require a qualified archeologist and Native American monitor to be present on the project site. The City shall then notify the tribe via email correspondence 10 days prior to any grading or construction activities. If the tribe chooses not to send a monitor or does not respond within the 10 days, work shall continue without the monitor.

A qualified archaeologist and a Native American monitor, registered with the Native American Heritage Commission for the City of Palo Alto and that is traditionally and culturally affiliated with the geographic area as described in Public Resources Code Section 21080.3, shall be present during earthmoving activities including, trenching, initial or full grading, scraping or blading, lifting of foundation, boring, drilling, , or major landscaping. The qualified archaeologist and Native American monitor shall have the authority to halt construction activities in the event any cultural materials are encountered during ground-disturbing construction activities. The qualified archeologist and monitor shall keep a daily monitoring log on days that monitoring occurs documenting construction activities that were monitored, location of the monitoring, and any cultural materials identified. These daily monitoring logs shall be made available to the City upon request.

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11. EVALUATION. The project applicant shall notify the Director of Planning, Native American Monitor, and Archeological Monitor, of any finds during grading or other construction activities. Any historic or prehistoric material identified in the project area during excavation activities shall be evaluated for eligibility for listing in the California Register of Historic Resources as determined by the California Office of Historic Preservation. Data recovery methods may include, but are not limited to, backhoe trenching, shovel test, hand augering, and hand-excavation. The techniques used for data recovery shall follow the protocols identified in the approved treatment plan. Data recovery shall include excavation and exposure of features, field documentation, and recordation. All documentation and recordation shall be submitted to the Northwest Information Center, and the Director of Planning. The qualified archaeologist shall be responsible for submitting all required reports and documentation to the appropriate California Historical Resources Information System (CHRIS) Information Center.

12. TREATMENT PLAN. In the event that any significant cultural materials are encountered during construction, construction within a radius of 100 feet of the find would be halted, the Director of Planning shall be notified, and the on-site qualified archaeologist shall examine the find and make appropriate recommendations regarding the significance of the find and the appropriate treatment of the resource.

The qualified archeologist in collaboration with a Native American monitor, registered with the Native American Heritage Commission for the City of Palo Alto and that is traditionally and culturally affiliated with the geographic area as described in Public Resources Code Section 21080.3, shall prepare and implement a treatment plan that reflects permit-level detail pertaining to depths and locations of excavation activities.

The treatment plan shall contain, at a minimum:
Identification of the scope of work and range of subsurface effects (including location map and development plan), including requirements for preliminary field investigations.
Description of the environmental setting (past and present) and the historic/prehistoric background of the parcel (potential range of what might be found).
Monitoring schedules and individuals. While coordination will occur jointly, the consulting tribe monitors and archaeological staff shall be notified separately of all scheduling, updates, and field activities to ensure clear and direct communication. Development of research questions and goals to be addressed by the investigation (what is significant vs. what is redundant information). Detailed field strategy to record, recover, or avoid the finds and address research goals.
Analytical methods.
Report structure and outline of document contents.

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Disposition of the artifacts. All cultural materials and artifacts recovered during project-related activities shall remain the property of consulting tribe and shall be returned to the Tribe for final disposition, care, and curation in accordance with Tribal protocols.
Security approaches or protocols for finds. In the event that a significant quantity of cultural materials is encountered, the consulting tribe shall require the use of a secure, locked Conex box or equivalent storage unit, to be maintained on-site and managed by the consulting tribe monitor. All associated costs for security measures, including procurement and maintenance of the storage unit, shall be the responsibility of the project applicant/developer. Cultural materials shall remain secured on-site under the consulting tribe oversight until the completion of ground- disturbing activities, at which point the consulting tribe shall assume full possession and responsibility for curation.
Appendices: all site records, correspondence, and consultation with Native Americans, etc.

The treatment plan shall utilize data recovery methods to reduce impacts on subsurface resources. The treatment plan must be reviewed and approved by the Director of Planning, or the Director’s designee prior to implementation of the plan.

13. HUMAN REMAINS. If human remains are found, the State of California Health and Safety Code Section 7050.5 states that no further disturbance shall occur until the County Coroner has made a determination of origin and disposition pursuant to Public Resources Code Section 5097.98. In the event of an unanticipated discovery of human remains, the County Coroner must be notified immediately. If the human remains are determined to be of Native American origin, the Coroner will notify the Native American Heritage Commission, which will determine and notify a most likely descendant (MLD).

The MLD has 48 hours from being granted site access to make recommendations for the disposition of the remains. If the MLD does not make recommendations within 48 hours, the landowner shall reinter the remains in an area of the property secure from subsequent disturbance.

14. INDEMNITY. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice.

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15. PUBLIC WORKS APPLICATIONS, FORMS, AND DOCUMENTS: Applicant shall be advised that most forms, applications, and informational documents related to Public Works Engineering conditions can be found at the following link: https://www. paloalto.gov/Departments/Public-Works/Engineering-Services/Forms-and-Permits

16. OVERVIEW AND GUIDELINES FOR THE REVIEW OF SUBDIVISION PROJECTS. Developer shall familiarize themselves with the guidelines described in the November 2007 revision of the document titled “Overview and Guidelines for the Review of Subdivision Projects”. Particularly Section II (items 5 through 12) and Section V (items A through C). https://www.paloalto.gov/files/assets/public/planning-amp-development-services/file- migration/current-planning/forms-and-guidelines/overview-and-guidelines-for-the- review-of-subdivision-projects.pdf

17. SUBDIVISION IMPROVEMENT AGREEMENT. The applicant shall execute a Subdivision Improvement Agreement and provide improvement securities (Bonds) for all proposed public improvements. THE AGREEMENT SHALL BE EXECUTED PRIOR TO MAP

RECORDATION OR ISSUANCE OF ANY PERMITS FOR CONSTRUCTION, ONSITE AND OFFSITE. ADVISORY -- The applicant shall provide a detailed itemized stamped and signed engineer's estimate for all off-site public improvements which will be reviewed to determine the security amount.

18. FINAL MAP. This project is subject to, and contingent upon the approval of a tentative map and recordation of a Final Map. The submittal, approval and recordation of the Map shall be in accordance with the provisions of the California Subdivision Map Act and Palo Alto Municipal Code Title 21 Subdivision requirements. All existing and proposed property lines, easements, dedications shown on the tentative map are subject to City’s technical review and staff approval during the map process prior to issuance of any construction permits.

19. MAP THIRD-PARTY REVIEW. The City contracts with a third-party surveyor that will review and provide approval of the map’s technical correctness as the City Surveyor, as permitted by the Subdivision Map Act. The Public Works Department will forward a Scope & Fee Letter from the third-party surveyor and the applicant will be responsible for payment of the fee’s indicated therein, which is based on the complexity of the map.

20. STREETWORK PERMIT. The applicant shall obtain a Streetwork Permit from the Department of Public Works for all public improvements.

21. UPGRADE OF EXISTING PUBLIC IMPROVEMENTS. As part of the plan review for improvements within the public right-of-way, any existing improvements to be re-used by the project, which are not to current City standards and are not specifically in these project conditions (such as streetlights, utility covers and lids, etc.), shall be upgraded to current City standards as required by the Director of Public Works and the Director of Utilities.

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22. MODIFICATIONS TO EXISTING PUBLIC UTILITIES. The Developer is responsible for any changes or modifications to existing utilities, streets, and public infrastructure within or adjacent to the project site. This includes, but is not limited to, the relocation of utility facilities, conduits, or vaults required due to grade changes in the sidewalk area resulting from the development. The utility design as shown in the Tentative Map is not final. The utility design submitted for the development application (25PLN-00296) shall take precedent.

23. DAMAGE TO EXISTING PUBLIC IMPROVEMENTS. The Developer is responsible for repairing any damage to existing public improvements fronting or adjacent to the project site caused by construction, to the satisfaction of the Public Works Department.

24. EXISTING UTILITY ABANDONMENT AND/OR RELOCATION. The Developer is responsible for researching all existing utility lines to ensure there are no conflicts with the project.

Any existing utility lines (public or private) or their appurtenances that conflict with the project or do not serve it must be capped, abandoned, removed, relocated, or disposed of to the satisfaction of the City.

25. GRADING AND EXCAVATION PERMIT. A Grading Permit is required per PAMC Chapter

16.28. The permit application and all applicable documents (see Section H of application) shall be submitted to Public Works Engineering. Add the following note:
“THIS GRADING PERMIT WILL ONLY AUTHORIZE GENERAL GRADING AND INSTALLATION OF THE STORM DRAIN SYSTEM. OTHER BUILDING AND UTILITY IMPROVEMENTS ARE

SHOWN FOR REFERENCE INFORMATION ONLY AND ARE SUBJECT TO SEPARATE BUILDING PERMIT APPROVAL.” The grading design as shown in the Tentative Map is not final. The grading design submitted for the development application (25PLN-00296) shall take precedent.

26. ROUGH GRADING. Provide a Rough Grading Plan for the work proposed as part of the Grading and Excavation Permit application. The Rough Grading Plans shall including the following: pad elevation, elevator pit elevation, ground monitoring wells, limits of over excavation, stockpile area of material, overall earthwork volumes (cut and fill), temporary shoring for any existing facilities, ramps for access, crane locations (if any), tree protection measures, etc.

27. CIVIL ENGINEER CERTIFICATION. Upon completion of the rough grading work and at the final completion of the work, applicant shall provide an as-graded grading plan prepared by the civil engineer that includes original ground surface elevations, as-graded ground surface elevations, lot drainage patterns and locations and elevations of all surface and subsurface drainage facilities. The civil engineer shall certify that the work was done in accordance with the final approved grading plan.

28. DIRECT CONNECTIONS TO STORM DRAIN SYSTEM. If the project proposes to replace and/or add connections to the City maintained storm drain system, then the applicant Item 12
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may be responsible for improvements to the system. These improvements may include, but not limited to, upsizing the storm drain facility, replacing or adding City standard catch basins, pipes and manholes. THIS MAY INCLUDE REPLACING BRICK AND MORTAR MANHOLES. The extent of required improvements will be at the public works staff discretion and shall be consistent with Storm Drain Master Plan and Public Works Construction Standards. Any work on the city's storm drain systems requires permits and inspection by Public Works inspectors.

29. CCTV OF STORM DRAIN SYSTEM. Post construction the applicant may be required to provide CCTV inspection of the City’s storm drain facilities to verify that any lines were not broken, cracked or damaged during construction. The video shall be high resolution and done by professional who is familiar with the process and meticulous. A CCTV inspection video is required for new storm drain connection (s) to verify proper connections were made into the City’s system and that no construction material was left behind. Videos of storm drain system may also be required where construction occurred less than 5-ft from the city’s storm drain system. Videos shall be provided from structure to structure, such as manhole to manhole. Contractor may want to conduct their own inspection in advance of construction to verify the existing pipe integrity. If existing damages are located, they shall be reported to Public Works inspectors prior to the start of construction. If not reported, the contractor may be responsible to restore the pipe segment as determined by Public Works prior to final.

30. GEOTECHNICAL ENGINEER STATEMENT. The grading plans shall include the following statement signed and sealed by the Geotechnical Engineer of Record: “THIS PLAN HAS

BEEN REVIEWED AND FOUND TO BE IN GENERAL CONFORMANCE WITH THE INTENT AND PURPOSE OF THE GEOTECHNICAL REPORT”.

31. SWPPP. This proposed development will disturb more than one acre of land.

Accordingly, the applicant shall apply for coverage under the State Water Resources Control Board’s (SWRCB) NPDES general permit for storm water discharge associated with construction activity. A Notice of Intent (NOI) shall be filed for this project with the SWRCB in order to obtain coverage under the permit. The General Permit requires the applicant to prepare and implement a Storm Water Pollution Prevention Plan (SWPPP).

The applicant is required to submit two copies of the NOI and the draft SWPPP to the Public Works Department for review and approval prior to issuance of the building permit. The SWPPP should include both permanent, post-development project design features and temporary measures employed during construction.

32. ENCROACHMENT PERMIT. Prior to any work in the public right-of-way, the applicant shall obtain an encroachment permit from the Public Works Department for any work that encroaches onto the City right-of-way.

33. LOGISTICS PLAN. A construction logistics plan shall be provided addressing all impacts to the public including, at a minimum: work hours, noticing of affected businesses, bus Item 12
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stop relocations, construction signage, dust control, noise control, storm water pollution prevention, job trailer, contractors’ parking, truck routes, staging, concrete pours, crane lifts, scaffolding, materials storage, pedestrian safety, and traffic control. All truck routes shall conform to the City of Palo Alto’s Trucks and Truck Route Ordinance, Chapter 10.48, and the route map. NOTE: Some items/tasks on the logistics plan may require an encroachment permit.

34. STORMWATER POLLUTION PREVENTION. All improvement plan sets shall include the “Pollution Prevention – It’s Part of the Plan” sheet.

35. C.3 THIRD-PARTY CERTIFICATION. Applicant shall provide certification from a qualified third-party reviewer that the proposed permanent storm water pollution prevention measures comply with the requirements of Provision C.3 and Palo Alto Municipal Code Chapter 16.11. Submit the following:
a. Provide a stamped and signed C.3 data form (April 2024 version) from SCVURPPP. https://scvurppp.org/2024/09/19/provision-c-3-data-form-2024/ b. Final stamped and signed letter confirming which documents were reviewed and that the project complies with Provision C.3 and PAMC 16.11.

36. C.3 STORMWATER AGREEMENT. The applicant shall enter into a Stormwater Maintenance Agreement with the City to guarantee the ongoing maintenance of the permanent storm water pollution prevention measures. The City will inspect the treatment measures yearly and charge an inspection fee. The agreement shall be executed by the applicant team prior to building permit final.

37. C.3 FINAL THIRD-PARTY CERTIFICATION PRIOR TO OCCUPANCY. Within 45 days of the installation of the required storm water treatment measures and prior to the issuance of an occupancy permit for the building, the third-party reviewer shall submit to the City a certification verifying that all the permanent storm water pollution prevention measures were installed in accordance with the approved plans.

38. PRIOR TO PUBLIC WORKS FINAL/ACCEPTANCE (STORM DRAIN LOGO). The applicant is required to paint “No Dumping/Flows to Barron Creek” in blue on a white background adjacent to all onsite storm drain inlets. The name of the creek to which the proposed development drains can be obtained from Public Works Engineering. Stencils of the logo are available from the Public Works Environmental Compliance Division, which may be contacted at (650) 329-2598. Include the instruction to paint the logos on the construction grading and drainage plan.

39. PRIOR TO PUBLIC WORKS FINAL/ACCEPTANCE (RECORD DRAWINGS). At the conclusion of the project applicant shall provide digital as-built/record drawings of all improvements constructed in the public right-of-way or easements in which the City owns an interest.

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40. PRIOR TO PUBLIC WORKS FINAL/ACCEPTANCE (INDEFINITE ENCROACHMENT PERMIT).

An approved indefinite encroachment permit will be required for any private infrastructure constructed in the public right-of-way, easement or on property in which the City holds an interest, but that was not authorized by a building permit.

Office of Transportation

41. PLAN SET REVISION REQUIRED PRIOR TO TRANSPORTATION APPROVAL. All items shall be addressed and incorporated into a revised plan set prior to Transportation approval.

42. FIRE ACCESS AND PARKING RESTRICTIONS. The fire truck path of travel shall include a "No Parking" sign. Signs meet the City's Fire Department requirements.

43. PARKING RESTRICTIONS. The curb along Old Trace Road shall be red-striped on both sides of the street to prevent parking within the fire truck path of travel.

44. SIGHT DISTANCE AND VISIBILITY. Sight triangles shall provide clear sight lines in accordance with stopping sight distance requirements in the Highway Design Manual.

Landscaping, walls, or any features within sight distance triangles shall be restricted to a maximum height above the roadway surface. Per PAMC 16.24.020(5), fences exceeding four feet in height shall not be located within a sight distance triangle. a. The sight distance triangles shown on C1.2 shall be drawn to scale on the plan set and be prepared and signed by a traffic engineer.

45. BICYCLE FACILITIES. Dedicated bike lanes shown along the Arastradero Road frontage shall meet design standards and maintain a typical width of 5 feet. Green pavement markings are shown in the bicycle conflict zone on Arastradero Road. Per CA MUTCD 2026, green pavement is an optional treatment to alert users of a conflict zone but shall be accompanied by appropriate pavement marking patterns (dotted lines through the driveway). A detail showing dotted extension lines through the driveway apron per CA MUTCD 2026 shall be provided.
a. Sharrow markings shall be removed from the plans for Arastradero Road, as no existing sharrows are present on the roadway.

46. PEDESTRIAN FACILITIES. For continuous pedestrian connection, a sidewalk shall be provided along Lots 8 and 9. New sidewalk shown on the project frontage shall conform to meet the City’s minimum standards.

47. DRIVEWAY & ACCESS STANDARDS. The minimum spacing between the two driveways, measured from radius return to radius return, shall be no less than 20 feet per PAMC

12.08.060(9)(A).

48. SIGNAGE AND TRAFFIC CONTROL DEVICES. A one-way sign shall be provided below the Item 12
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stop sign on the new private street, and one sign shall be provided in the median island for right-turning traffic. All traffic control devices proposed in the public right-of-way (ROW) shall meet CA MUTCD requirements, including size, mounting height, and location. Review and approval shall be obtained as part of the offsite improvement plan. RRFB installation shall comply with CA MUTCD 2026, including any advance line markings or as otherwise required or recommended. A STOP bar shall be provided per CA MUTCD 2026 requirements. Offsite improvements shall be routed to Transportation for review and approval.

Electrical Engineering – Utilities Department

49. CPAU STANDARDS. The plans shall be revised to callout all applicable CPAU Standards.

Water Quality Division – Public Works Department

50. DETENTION GALLERY. The applicant shall clarify if a detention gallery will be required. If required, it shall be included as a part of the C3 Stormwater Treatment Plan.

51. STORMDRAIN CONNECTIONS. Direct connections to the storm drain system is not permitted. The plans shall be revised in accordance with Public Works Engineering standards and addressed at the time of the Streamlined Housing Development Review application.

52. STORMWATER MANAGEMENT PLAN. The proposed Stormwater Management Plan submitted under the Tentative Map application is not final and all stormwater treatment requirements for the project shall be adhered to in compliance with the Bay Area Municipal Regional Stormwater Permit. The Stormwater Management Plan in the development application (25PLN-00296) will take precedent.

Water-Gas-Wastewater (WGW) Engineering – Utilities Department

53. PRIOR TO PLANNING ENTITLEMENT APPROVAL. The following comments are required to be addressed prior to Planning entitlement approval:
a. A public utility easement for gas service on the private street for the gas main line will be recorded from property line to property line on the street.

54. PRIOR TO BUILDING PERMIT ISSUANCE. The following comments are required to be addressed prior to any future related permit application such as a Building Permit, Excavation and Grading Permit, Certificate of Compliance, Street Work Permit, Encroachment Permit, etc. These comments are provided as a courtesy and are not required to be addressed prior to the Planning entitlement approval:
a. The gas main line will be located 5 feet away from the sewer line shown on-site towards the center of the private street.

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b. The City of Palo Alto Utilities Department CPAU will design the gas main and provide the developer with an invoice for the design work by the City. Payment for the invoice is required before the City starts designing. Provide the WGW reviewer with a contact for the invoice to be sent.
i. Schedule a meeting with CPAU reviewer once the estimated gas loads have been determined. CPAU will go over the steps for adding gas mains to the project.

55. PRIOR TO DEMOLITION PERMIT (IF REQUIRED). The applicant shall submit a request to disconnect utility services and remove gas meters. The utilities demo is to be processed within 10 working days after receipt of the request. The demolition permit will be issued by the building inspection division after all utility services and/or meters have been disconnected and removed.

For Building Permit:

56. WGW SERVICE CONNECTION APPLICATION. The applicant shall submit a completed water-gas-wastewater service connection application - load sheet for the City of Palo Alto Utilities. The applicant must provide all the information requested for utility service demands (water in fixture units/g.p.m., gas in b.t.u.h, and sewer in fixture units/g.p.d.).

The applicant shall provide the existing (prior) loads, the new loads, and the combined/total loads (the new loads plus any existing loads to remain).

57. IMPROVEMENT PLANS FOR UTILITY CONSTRUCTION. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations, and any other required utilities. Plans for new wastewater laterals and mains need to include new wastewater pipe profiles showing existing potentially conflicting utilities especially storm drain pipes, electric and communication duct banks.

Existing duct banks need to be daylighted by potholing to the bottom of the duct bank to verify cross section prior to plan approval and starting lateral installation. Plans for new storm drain mains and laterals need to include profiles showing existing potential conflicts with sewer, water, and gas.

58. AUXILLARY WATER SUPPLY. The applicant must show on the site plan the existence of any auxiliary water supply, (i.e. water well, gray water, recycled water, rain catchment, water storage tank, etc).

59. UPGRADING EXISTING UTILITY MAINS/SERVICES. The applicant shall be responsible for installing and upgrading the existing utility mains and/or services, laterals as necessary to handle anticipated peak loads. This responsibility includes all costs associated with the design and construction for the installation/upgrade of the utility mains and/or services/laterals.

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60. RPPA BACKFLOW PREVENTER DEVICE. An approved reduced pressure principle assembly (RPPA backflow preventer device) is required for all existing and new water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPPA shall be installed on the owner's property and directly behind the water meter within 5 feet of the property line.

RPPA's for domestic service shall be lead free. Show the location of the RPPA on the plans.
a. An approved reduced pressure detector assembly (RPDA backflow preventer device, STD. WD-12A or STD. WD-12B) is required for all existing and new fire water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive.

The RPDA shall be installed on the owner's property and directly behind the City owned meter, within 5' (feet) of the property line or City Right of Way.

61. APPROVAL OF BACKFLOW PREVENTION DEVICE. All backflow preventer devices shall be approved by the WGW engineering division. Inspection by the city inspector is required for the supply pipe between the meter and the assembly.

62. PAYMENT OF CAPACITY AND CONNECTION FEES. The applicant shall pay the capacity fees and connection fees associated with new utility service/s or added demand on existing services. The approved relocation of services, meters, hydrants, or other facilities will be performed at the cost of the person/entity requesting the relocation.

63. FIRE SYSTEM USAGE. If a new water service line installation for fire system usage is required. Show the location of the new water service on the plans. The applicant shall provide to the engineering department a copy of the plans for fire system including all fire department's requirements.

64. WATER METERS. Each unit or building shall have its own water meter shown on the plans. Each parcel shall have its own water and sewer lateral connection shown on the plans.

65. SEWER LATERAL. A sewer lateral per lot is required. Show the location of the new sewer lateral on the plans. A profile of the sewer lateral is required showing any possible conflicts with storm, electric/communications ductbanks or other utilities.

66. ABANDONMENT OF EXISTING UTILITIES. All existing water, and gas. and wastewater services/laterals that will not be reused shall be abandoned at the main per the latest WGW utilities standards by CPAU.

67. LOCATION OF PROPOSED UTILITY CONNECTIONS. Utility vaults, transformers, utility cabinets, concrete bases, or other structures cannot be placed over existing water, gas, or wastewater mains/services. Maintain 1' horizontal clear separation from the Item 12
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vault/cabinet/concrete base to existing utilities as found in the field. If there is a conflict with existing utilities, Cabinets/vaults/bases shall be relocated from the plan location as needed to meet field conditions. Trees may not be planted within 10 feet of existing water, gas, and wastewater mains/laterals/water services/or meters. New water or wastewater services/laterals/meters may not be installed within 10' of existing trees. Maintain 10' between new trees and new water and wastewater services/laterals/meters.

68. COPY OF FIRE SYSTEM PLAN. The applicant shall provide to the WGW Utility Engineering department a copy of the plans for fire system including all fire department's requirements prior to the actual service installation.

69. PALO ALTO CODE COMPLIANCE. All utility installations shall be in accordance with the City of Palo Alto utility standards for water, gas, & wastewater.

SECTION 7. Term of Approval. Tentative Map. All conditions of approval of the Tentative Map shall be fulfilled prior to approval of a Final Map (PAMC Section 21.16.010[c]). Unless a Final Map is filed, and all conditions of approval are fulfilled within a two-year period from the date of Tentative Map approval, the Tentative Map shall expire and all proceedings shall terminate.

A request for an extension of time may be granted by the City Council after recommendation of the planning commission, after the written extension request of the subdivider is submitted, prior to the expiration of the Tentative Map approval, or any previous extension granted. Such extension(s) shall be subject to the maximum limitations set forth in the Subdivision Map Act. //
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INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

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ATTEST: APPROVED:
_________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
___________________________ ___________________________ Assistant City Attorney City Manager
___________________________
Director of Planning and
Development Services
PLANS AND DRAWINGS REFERENCED:

Those plans prepared by Steel Bridge Homes “THE OAKS SUBDIVISION TENTATIVE SUBDIVISION MAP” consisting of eleven pages, dated and submitted May 5, 2026.

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ZONING CONSISTENCY ANALYSIS
4103 Old Trace Road, 25PLN-00298
Table 1: COMPARISON WITH CHAPTER 18.10 (RE ZONE DISTRICT)1 Regulation
Required Proposed
Minimum Site Area,
Width and Depth
1 acre, 100-foot width, 100-foot
depth
Multiple irregular shaped lots; see gross lot
area for each lot below:

Lot 1: 5,555 Square Feet, ~79.60-Foot Wide,
~78.45-Foot Deep
Lot 2: 4,691 Square Feet, ~58.23-Foot Wide,
~83.20-Foot Deep
Lot 3: 6.907 Square Feet, ~87.76-Foot Wide,
~80.86-Foot Deep
Lot 4: 4,671 Square Feet, ~64.90-Foot Wide,
~71.97-Foot Deep
Lot 5: 5,213 Square Feet, ~71.97-Foot Wide,
~78.55-Foot Deep
Lot 6: 3,151 Square Feet, ~41.27-Foot Wide,
~ 67.85-Foot Deep
Lot 7: 2,218 Square Feet, ~33.96-Foot Wide,
~67.85-Foot Deep
Lot 8: 1,921 Square Feet, ~31.25-Foot Wide,
~64.83-Foot Deep
Lot 9: 2,551 Square Feet, ~64.83-Foot Wide,
~44.39-Foot Deep
Residential Density 1-2 units per acre per zoning.

However, the Single-Family (SF)
Residential Comprehensive Plan
designation allows 1-7 dwelling
units per acre
9 units
(1.02 acres x 7 DU/acre = 7.16, rounded up
to 8 units, plus 1 Density Bonus Law unit)
Minimum Usable Open
Space Not applicable None
1 Bold indicates an inconsistency with the requirement; however, where noted in the table the applicant is requesting a waiver to the development standards in accordance with allowances set forth under State Density Bonus Law.

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Type Required Proposed
Vehicle Parking 2 spaces, of which at least one space
must be covered.

No parking is required for ADU/JADUs
2 per single-family home = 9 covered
spaces + 9 uncovered spaces = 18 parking
spaces
Parking to be proposed at the time
of Streamlined Housing
Development Review application
and is anticipated to meet the
minimum code requirement.

Loading Spaces None None
Bicycle Parking None None
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The application contains clear errors in right-of-way calculations and setbacks that materially affect the feasibility and legality of the project. The distance to the creek is misstated as 200 feet when it is, in fact, 145 feet. In addition, the plans appear to misapply the roadway centerline as defined in the Palo Alto Road Centerline Data Map, where the center of the median establishes the correct reference point. When the proper 45-foot setback is measured from the true centerline, the encroachment into the property is approximately 23 feet—not the 13 feet represented in the application. This is not a minor discrepancy; it fundamentally undermines the site design, placing required setbacks within the proposed building footprint of Lot 5B. The plans, as submitted, are therefore materially misleading.

The proposal also fails to comply with the 53-foot special setback required along Arastradero Road, a designated scenic corridor. Four of the eight proposed homes are located within this protected setback area. The City’s Bonus Density provisions do not override these requirements under Section 20.08.020.

These protections exist to preserve the character, safety, and environmental integrity of the corridor and have been consistently enforced on neighboring properties. There is no justification for waiving them in this case.

Equally concerning are the public safety implications. Arastradero Road, west of Foothill Expressway, is a critical evacuation route for residents of Palo Alto and Los Altos Hills. Any development that compromises its function raises serious safety concerns. Internally, the project proposes a private roadway that is only 20 feet wide—far below the required 32 feet. This is inadequate for a subdivision of 5+ homes with driveway cuts of 16 feet instead of 20 feet. Safe two-way traffic and maneuvering will be nearly impossible during waste collection times, mail delivery or package drop off. The traf fic study
calculated 70 new trips a day for this development, which means during morning and evening commute times, any blockage along the short private road will cause cars to start backing up not on a side street but on the already congested Arastradero Road.

The biggest safety impact for this development will be the new access point onto Arastradero. Adding a new intersection so close to Old Trace Road will put kids riding their bikes to school in serious danger because it adds more turning movements and unpredictability to an already busy road. It creates an avoidable and unacceptable safety hazard.

While the need for housing is real, State housing laws do not exempt projects from complying with the Subdivision Map Act or from meeting basic health and safety standards. This proposal fails on both counts and is inconsistent with the City’s General Plan. Policy L-1.2 Retain undeveloped land west of Foothill Expressway and Junipero Serra as open space, with allowances made for very low-intensity development consistent with the open space character of the area.

Finally, the proposal to allocate only 4% (approximately 1,900 square feet) of a 44,449-square-foot site to below-market-rate housing is grossly disproportionate to the scale of concessions and waivers requested.

The public benefit does not justify the significant deviations from established standards. Additionally, consistent information throughout the submitted plans would be extremely helpful. As is, it’s impossible to know the exact plans. Perhaps that’s the intent.

For all of these reasons, I urge the City Council to deny this project in its current form. At a minimum, the applicant must be required to correct these errors and fully comply with all applicable regulations before any consideration of approval.

Thank you for your time and attention to this matter.

Sincerely,
Katherine Clancy
4146 Old Trace Road Palo Alto, CA 94306
Jeannie Clancy
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goals. I have copied the lead planner for the SCPO update on this email to raise awareness of this apparent inconsistency.

I look forward to your clarification on how the City intends to resolve this contradiction.

Best regards,
Jeff Watt (resident, Esther Clark Park neighborhood)
4/20/26, 6:01 PM CEQA exemption (AB 130) for 4103 Old Trace Road - Kandikuppa, Nishita - Outlook about:blank?windowId=SecondaryReadingPane18 2/2
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additional "road", which would allow for some increased density without creating such an anomaly in the neighborhood.

Gaile Gordon
Palo Alto resident on Manuela Ave.
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https://outlook.office.com/mail/inbox/id/AAQkADVmNWM1NDcyLWQ5YzYtNGI5OS05YmZkLTk0MjdlMmI5OWIwMQAQADl2dddcjzJNvIkGv1bJD%2B… 2/2 Item 12
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Memorandum

Date: April 20, 2026

To: Ms. Melanie Griswold, Trace Estates, LLC

From: Gary Black, AICP
Daniel Choi
Miles Henninger

Subject: VMT Screening Analysis and Design Review for a Residential Development at 4103 Old Trace Road in Palo Alto, California

Hexagon Transportation Consultants, Inc. has completed Vehicle Miles Traveled (VMT) screening analysis and a traffic design analysis for the proposed residential development located at 4103 Old Trace Road in Palo Alto, California. The project site location is shown on Figure 1. The project site plan is shown on Figure 2. The project proposes to construct 9 single-family homes (5 detached and 4 attached) on a vacant lot. Seven of the single-family homes would contain a junior accessory dwelling unit (JADU).

Project Trip Generation
Through empirical research, data have been collected that indicate the amount of traffic that can be expected to be generated by common land uses. Project trip generation was estimated by applying to the size and uses of the development the appropriate trip generation rates. The average trip generation rates for Single-Family Detached Housing (Land Use 210), Single-Family Attached Housing (Land Use 215), and Multifamily Housing (Low-Rise) (Land Use 220) as published in the Institute of Transportation Engineers (ITE) Trip Generation Manual, 12th Edition (2025) were applied to the proposed project. The JADUs are not expected to generate any trips on their own.

They are part of the main house and are typically used by family members or guests instead of long-term tenants.

Table 1
Trip Generation

Land Use Rate Trips Rate In Out Total Rate In Out Total Proposed Project
#210 - Single-Family Detached Housing 5 Dwelling Units 9.09 45 0.70 1 3 4 0.93 3 2 5 #215 - Single-Family Attached Housing 4 Dwelling Units 6.57 26 0.47 1 1 2 0.51 1 1 2 Total Project Trips 71 2 4 6 4 3 7
Source: ITE Trip Generation Manual (12th Edition, 2025) Trip generation rate for the proposed residential uses are based on average rates found in the ITE's Trip Generation Manual, 12th Edition rates for Land Use 210 "Single-Family Detatched Housing - General Urban/Suburban" and for Land Use 215 "Single-Family Attached Housing - General Urban/Suburban".

PM Peak HourAM Peak Hour
Size
Trips TripsDaily
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Palo
Alto
Arastradero RdArastradero Rd
Foothill ExpyFoothill Expy
Miranda AveMiranda Ave
Foothill ExpyFoothill Expy
Miranda AveMiranda Ave
Hillview AveHillview Ave
Old Trace RdOld Trace Rd
Old Adobe RdOld Adobe Rd
Arastradero Rd
Foothill Expy
Miranda Ave
Foothill Expy
Miranda Ave
Hillview Ave
Old Trace Rd
Old Adobe Rd
= Site Location
LEGEND4
103 Old Trace Road VMT Screening and Design Review
Figure 1
Site Location
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4 103 Old Trace Road VMT Screening and Design Review
Figure 2
Project Site Plan
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Based on the trip generation rates, it is estimated that the project would generate 71 daily trips, with 6 trips in the AM peak hour and 7 trips in the PM peak hour. The City’s Local Transportation Analysis (LTA) Policy requires an LTA for projects that generate more than 50 peak hour trips.

Since the project would generate fewer than 50 peak-hour trips, an LTA analysis is not required.

Vehicles Miles Traveled
The City of Palo Alto provides screening criteria to determine whether a development project would be required to conduct a VMT analysis. Projects that meet the screening criteria would be presumed to have a less than significant impact on VMT and would not be required to conduct a detailed VMT analysis. The city has the following screening criteria for development projects:

• Small Developments (projects that generate fewer than 110 trips per day) • Projects in Low-VMT Areas (projects located in low-VMT areas that have similar features to existing developments)
• Projects in Proximity to Major Transit Stops (projects located within ½ mile of an existing or planned high quality transit corridor or major transit stop) • Affordable Housing (100% affordable housing projects in infill locations) • Local-Serving Retail (retail projects of 10,000 s.f. or less) • Transportation Projects (roadway, transit, bicycle, and pedestrian projects that do not lead to a measurable increase in vehicle travel)

Since the project is anticipated to generate 71 daily trips, the project would meet the small development screening criterion and can be presumed to have a less than significant impact on VMT.

Palo Alto Comprehensive Plan and Housing Element Update The project site is included in the City’s 2030 Comprehensive Plan. The 2030 Comprehensive Plan included 13 additional housing units within the project’s zone. The City adopted their new Housing Element in May 2023, for which an environmental impact report (EIR) was prepared. The Housing Element was approved as an addendum to the Comprehensive Plan. Therefore, projects that are consistent with the Comprehensive Plan are presumed to have their transportation impacts included in the analysis conducted for the Housing Element Update.

The proposed project’s 9 single-family residences is within number of units included in the Comprehensive Plan and would not change the conclusions of the findings of the EIR prepared for the Housing Element Update.

Roadway Width Analysis
The development’s 9 lots would be served by a private roadway with a 30.5-foot-wide right-of-way and a 20-foot curb-to-curb width. No parking would be allowed along the entire length of the roadway. Section 21.20.240 of the Palo Alto Municipal Code requires a minimum right-of-way width of 32 feet for private roadways serving five or more lots, or a minimum of 22 feet for private roadways serving fewer than five lots.

Appendix D of the California Fire Code stipulates that fire apparatus access roads must be a minimum of 20 feet wide. Fire apparatus turning templates (shown in Figure 3) indicate that fire trucks could adequately navigate the proposed roadway. As such, the proposed road would not pose issues for fire truck access. Furthermore, the 2018 edition of the American Association of Item 12
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State Highway and Transportation Officials’ A Policy on Geometric Design of Highways and Streets stipulates that the minimum lane width for residential streets in developed areas should be 9-10 feet. Due to the small scale of the development and associated low traffic volume, the 20-foot width of the roadway would be suitable for vehicular circulation throughout the site.

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Figure 3
Fire Apparatus Turning Templates
4 103 Old Trace Road VMT Screening and Design Review
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HSW LLP

VIA ACCELA & EMAIL

March 30, 2026

Ms. Nishita Kandikuppa, Planner
Ms. Claire Raybould, Acting Planning Manager
City of Palo Alto Planning & Development
Department Development Center
285 Hamilton Avenue, Suite
100 Palo Alto, CA 94301

Re: Updated Project Letter for Tentative Map Component of Proposed Residential Subdivision (“The Oaks”) at 4103 Old Trace Road, Palo Alto, CA 94306 (APN 175-20-078)

Dear Ms. Raybould and Ms. Kandikuppa,

Enclosed you will the requested resubmittal information for the tentative map application (25 PLN-0296) for a “housing development project,” as defined in the Housing Accountability Act (“HAA”) (Gov. Code § 65589.5) and a proposed residential subdivision known as “The Oaks” located at 4103 Old Trace Road within the City of Palo Alto, California 94306. The specifics related to the Tentative Map application are set forth below. A Streamlined Housing Permit (25PLN-00298) is being processed separately and contains further detail on the proposed units.

I. PROJECT DESCRIPTION.

The proposed project (“Project”) is a “mixed-income”, all residential “housing development project” consisting of a tentative map application to subdivide one (1) 1.02 gross acre vacant lot at 4103 Old Trace Road, Palo Alto, CA into (9) residential lots and one (1) common area lot for a private street, utilities, access, stormwater treatment facilities, and other improvements. These lots are being planned to accommodate one single-family and junior accessory dwelling unit (“JADU”) (2 units each/10 units total) on each of Lots 1 through 5 and one attached single- family dwelling and JADU on each of Lots 6 and 7 (2 unit each/4 units total) and one attached single-family dwelling unit on each of Lots 8 and 9 (2 units total). The Applicant is seeking one (1) density bonus lot/unit based on its provision of one (1) lot/unit that will be deed-restricted to households earning no more than 100% of AMI. The Applicant is also seeking waivers, reductions in development standards, incentives and concessions consistent with State Density Bonus Law (“SDBL”) (Gov. Code § 69515, et seq.).

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4103 Old Trace Road – Subdivision App
Melanie Griswold
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II. CEQA EXEMPTION

The Project has been designed to be exempt from CEQA review under AB130. Detail was previously provided to the City establishing the Project’s eligibility. The Applicant seeks the City’s confirmation that the Project has been found to be exempt.

III. DENSITY BONUS INFORMATION.

A. Base Density & Density of the Project.

The base density of this site is 8 primary dwelling units per acre. The applicant is proposing to deed-restrict 12.5% of the units. At the tentative map stage, this translates into 1 lot (Lot 9), which will contain one (1) attached single-family dwelling unit that is deed-restricted as affordable to moderate-income households earning no more than 100% of AMI.

By providing this affordable unit, the Applicant is entitled to a 7% density bonus. This translates into one (1) additional primary dwelling unit, which is being planned for Lot 7. 0F
1 B. Assurances for the Affordability of Units.

Upon request, the Applicant will record a deed-restricted covenant prior to recordation of final map to ensure compliance with the proposed affordability and pre-conditions for eligibility for SDBL. If the Streamlined Housing Permit is approved first, the Applicant would also accept a condition of approval that regarding recordation of a deed-restriction before issuance of any building permits.

C. Density Bonus Waivers and Reductions in Development Standards.

The applicant requests the following waivers and reductions in development standards pursuant to SDBL:

1. Reduce minimum lot size in RE-1 zone as provided in PAMC § 18.10.040(a) at Table 2 from 1 acre and minimum 6,000 SF size in PAMC § 21.20.100 to a minimum of 1,921 SF (Gross) and 1,570 (Net). If the minimum lot area were not permitted, it would eliminate all of the residential lots except 1, thereby precluding the allowed density

2. Decrease front setback from 30’ provided in PAMC § 18.10.040(a) at Table 2 to a minimum of 9.5’ as measured from back of curb for Lots 1 through 5 and 5’ as measured from back of curb for Lots 6 through 9. As shown below in RED, a 30’ setback would substantially reduce the proposed buildable area of all lots, thereby reducing density.

1 As noted previously, for the purposes of base density and density bonuses, JADUs are disregarded unless they are being deed-restricted to obtain density bonus benefits
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3. Decrease interior side setbacks as provided in PAMC § 18.10.040(a) at Table 2 from 15’ to 5’. As shown above in GREEN, a 15’ interior setback would substantially reduce the proposed buildable area of each of lots, thereby reducing buildable area on all of the proposed lots.

4. Decrease rear setbacks as provided in PAMC § 18.10.040(a) at Table 2 from 30’ to 10’ on Lots 1 and 3 through 9. On Lot 2, decrease the rear setback to 5’. As shown below in PURPLE, a 30’ setback would substantially reduce the proposed buildable area of all lots, thereby reducing density.

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5. Reduce the special setback on Arastradero on Lot 5 from 53’ to 9.5’ and Lots 6 through 8 from 53’ to 15’.

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6. Reduce the minimum width of the private street from 32’ as required by PAMC §

21.20.240(b)(4) to 20’. As shown below in BLUE, increasing the street width would eliminate buildable area on Lots 1 through 5, thereby reducing density.

7. Reduce the requirement that no parking spaces are to be located in a required front yard per PAMC § 18.12.060(c)(1) to match the required front yards with the requested waivers herein for Lots 1 through 5. All of the garages are located in the required front yard for the R-E zone and, without a derivative waiver for this requirement, all of the garages would be eliminated on Lots 1 through 5.

8. Reduce the minimum site depth from 100’ as required by PAMC § 18.10.040(a) at Table 2 to 59’78’. If the minimum were imposed, it would only allow one conforming lot instead of the 9 residential lots proposed, thereby reducing density. If the minimum were imposed, it would only allow two (2) conforming lot as shown roughly below in RED instead of the 9 residential lots proposed, thereby reducing density.

9. Reduce the minimum site width from 100’ as required by PAMC § 18.10.040(a) at Table 2 and PAMC § 21.20.100 to the minimum on Lot 9 (approx. 30’). If the minimum were imposed, it would only allow two (2) conforming lot as shown roughly below in RED Item 12
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instead of the 9 residential lots proposed, thereby reducing density.

Further waivers are reserved pending comments and feedback on the proposed Project.

D. Incentives and Concessions.

The applicant anticipates requesting incentive related to the size of the affordable housing unit planned on Lot 9. This will be requested and developed during the Streamlined Housing Permit process and is reserved at this time.

************

We appreciate your assistance so far and look forward to bringing much-needed housing to the City of Palo Alto. If you have any questions or need further information, I can be reached at 415- 265-1086 or [email protected].

Kind regards,

Melanie Griswold, Partner

HSW LLP

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Order Number: 3630425-01971
Page Number: 1
Cornerstone Title Company
506 N Santa Cruz Avenue
Los Gatos, CA 95030
PH: (408) 354-0502 FX: (303) 323-6516
Melanie Griswold
Steel Bridge Capital LLC
206 Garden Hill Drive
Los Gatos, CA 95032
Escrow Officer: Charlene Ramos
Email: [email protected]
Assistant: Ramos Team
Email: [email protected]
Escrow Number: 3630425-01971
Owner: Steel Bridge Homes Palo Alto, LP
Property: Vacant Land, known as APN 175-20-078 also
knows as
4103 Old Trace Road
Palo Alto, CA 94306
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Order Number: 3630425-01971
Page Number: 2
Cornerstone Title Company

PRELIMINARY REPORT
In response to the above referenced application for a policy of title insurance, this company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception below or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms.

The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Exhibit B attached. The policy to be issued may contain an arbitration clause.

When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Exhibit B. Copies of the policy forms should be read. They are available from the office which issued this report.

Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit B of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered.

It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land.

This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested.

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Order Number: 3630425-01971
Page Number: 3
Cornerstone Title Company
Dated as of August 27, 2025 at 7:30 A.M.

The form of Policy of title insurance contemplated by this report is:

ALTA/CLTA Homeowner's Policy of Title Insurance (2013), if applicable, or CLTA/ALTA Standard Owner's Policy 1990; and/or ALTA Loan Policy (2021).

A specific request should be made if another form or additional coverage is desired.

Title to said estate or interest at the date hereof is vested in:

Steel Bridge Homes Palo Alto, LP, a California Limited Partnership The estate or interest in the land hereinafter described or referred to covered by this Report is:

A Fee
The Land referred to herein is described as follows:
(See attached Legal Description)
At the date hereof exceptions to coverage in addition to the printed Exceptions and Exclusions in said policy form would be as follows:

1. General and special taxes and/or assessments for the fiscal year 2025-2026, a lien, but not yet due or payable.

2. The lien of supplemental taxes, if any, assessed pursuant to the provisions of Section 75, et seq. of the Revenue and Taxation Code of the State of California.

Please note that there may be a supplemental or an escaped assessment of taxes which will possibly be assessed due to the conveyance of said land or may be triggered due to the death of a prior owner. The Company makes no representations and is not responsible for identifying the amount or time period in which said taxes will be assessed against the subject property.

3. Water rights, claims or title to water, whether or not shown by the public records.

4. Easements, recitals, setbacks, and other matters affecting that portion of said land for the purposes stated thereon and incidental purposes as shown upon a filed map Filed: Book 293, Page 29
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Order Number: 3630425-01971
Page Number: 4
Cornerstone Title Company

5. A Deed of Trust to secure an original indebtedness and any other amounts or obligations secured thereby Amount: $4,000,000.00
Dated: May 22, 2025
Trustor: Steel Bridge Homes Palo Alto, LP a California Limited Partnership Trustee: Chicago Title Company
Beneficiary Youland Inc., a California corporation
Recorded: May 30, 2025 as Instrument No. 25814693 of Official Records

6. Rights of parties in possession.

7. Rights of parties in possession of said land by reason of any unrecorded leases.

Please submit any such leases to this company for our examination.

8. Any facts, rights, interests or claims which would be disclosed by a correct ALTA/NSPS Survey and/or inspection of said land.

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Order Number: 3630425-01971
Page Number: 5
Cornerstone Title Company

REQUIREMENTS
Prior to closing this company will require the following:

1. The requirement that the owner's property statement be executed and upon review further requirements may be requested prior to the issuance of any policy of insurance.

2. This transaction may be subject to an order issued pursuant to the Bank Secrecy Act. The policy issuing agent may need to provide certain information necessary to comply with the order prior to the closing.

3. The requirement that underwriting approval be obtained if any policy of title insurance is requested other than a standard owners policy.

4. The company may require a copy of a valid government issued photo ID from the Principle(s) involved in this transaction subject to further requirements of this company.

5. Should this report be used to facilitate your transaction, we must be provided with the following prior to the issuance of the policy:

A. A certified copy of the certificate of limited partnership (form LP-1) and any amendments thereto (form LP-2) to be recorded in the public records;
B. A full copy of the partnership agreement and any amendments; Satisfactory evidence of the consent of a majority in interest of the limited partners to the contemplated transaction; C. Other requirements which the Company may impose following its review of the above material and other information which the Company may require.

6. The requirement that High Liability approval be obtained prior to the close and issuance of any policy of title insurance. The High Liability process must be completed according to the Policy Underwriter’s requirements.

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Order Number: 3630425-01971
Page Number: 6
Cornerstone Title Company

INFORMATIONAL NOTES
Note: The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than the certain dollar amount set forth in any applicable arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. If you desire to review the terms of the policy, including any arbitration clause that may be included, contact the office that issued this Commitment or Report to obtain a sample of the policy jacket for the policy that is to be issued in connection with your transaction.

1. Said property appears to be Vacant Land, known as APN 175-20-078, also known as 4103 Old Trace Road, Palo Alto, CA 94306.

2. General and special taxes and/or assessments for the fiscal year 2024-2025, as follows:

Assessor’s Parcel Number: 175-20-078
TRA: 006-020
First Installment: $2,748.14 Paid
Second Installment: $2,748.14 Paid

3. There are no conveyances affecting said land within two (2) years of the date of this report, except the following:

A Deed recorded May 30, 2025 as Instrument Number 25814692, Official Records Dated: March 25, 2025
Grantor: Linda Jean Brennan, Successor Trustee under the Smithwick Living Trust, dated October 15, 1998
Grantee: Steel Bridge Homes Palo Alto, LP a California Limited Partnership

4. The map attached, if any, may or may not be a survey of the land depicted hereon. Cornerstone Title Company expressly disclaims any liability for loss or damage which may result from reliance on this map except to the extent coverage for such loss or damage is expressly provided by the terms and provisions of the title insurance policy, if any, to which this map is attached.

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Order Number: 3630425-01971
Page Number: 7
Cornerstone Title Company

LEGAL DESCRIPTION
All that certain real property situated in the City of Palo Alto, County of Santa Clara, State of California, described as follows:

All of Parcel 4, as shown upon that certain Map entitled, "Parcel Map, Portion of Lot 7, Briones Partition", which Map was filed for record in the Office of the Recorder of the County of Santa Clara, State of California, on November 26, 1971 in Book 293 of Maps, at Page 29.

APN: 175-20-078
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Order Number: 3630425-01971
Page Number: 8
Cornerstone Title Company
THIS MAP IS FOR YOUR AID IN LOCATING YOUR LAND IN REFERENCE TO STREETS AND OTHER PARCELS. WHILE THIS MAP IS BELIEVED TO BE CORRECT, THE COMPANY ASSUMES NO LIABILITY FOR ANY LOSS OCCURRING BY REASON OF RELIANCE THEREON.

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Order Number: 3630425-01971
Page Number: 9
Cornerstone Title Company
NOTICE
Section 12413.1 of the California Insurance Code, effective January 1, 1990, requires that any title insurance company, underwritten title company, or controlled escrow company handling funds in an escrow or sub-escrow capacity, wait a specified number of days after depositing funds, before recording any documents in connection with the transaction or disbursing funds. This statute allows for funds deposited by wire transfer to be disbursed the same day as deposit. In the case of cashier's checks or certified checks, funds may be disbursed the next day after deposit. In order to avoid unnecessary delays of three to seven days, or more, please use wire transfer, cashier's checks, or certified checks whenever possible.

If you have any questions about the effect of this new law, please contact your escrow office for more details.

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Attachment G
Project Plans
In order to reduce paper consumption, a limited number of hard copy project plans are provided to Council Members for their review. The same plans are available to the public, at all hours of the day, via the following online resources.

Directions to review Project plans online

1. Go to: bit.ly/PApendingprojects

2. Scroll down to find “4103 Old Trace Road” and click the address link

3. On this project specific webpage, you will find a link to the project plans and other important information
Direct Link to Project Webpage
4103 Old Trace Road – City of Palo Alto, CA
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Community Services
Meeting Date: May 18, 2026
Report #:2512-5750
TITLE
Cubberley Project: Adopt the Cubberley Conceptual Master Plan and a Resolution Adopting the CEQA Mitigated Negative Declaration and Mitigated Monitoring and Reporting Program; Receive the Fourth Round of Community Polling Results; and Provide Direction on Next Steps for a Possible Sales Tax Ballot Measure. CEQA Status - A Draft Initial Study/Mitigated Negative Declaration (IS-MND) Report Circulated for Public Review from March 2, 2026, to April 1, 2026.

The City published the Final IS-MND on April 9, 2026.

RECOMMENDATION
Staff and the Planning and Transportation Commission, Architectural Review Board, and Parks and Recreation Commission recommend the City Council:

1. Adopt a Resolution adopting the Final Initial Study Mitigated Negative Declaration for the Project and associated Mitigated Monitoring and Reporting Program (Attachment A); and

2. Adopt the Cubberley Conceptual Master Plan (Attachment B).

Staff recommend the City Council review and discuss results of the fourth community poll (Attachment C) and provide direction on next steps.

EXECUTIVE SUMMARY
The City of Palo Alto (City) is advancing a plan to redevelop a 15-acre portion of the Cubberley campus, including seven acres proposed to be purchased from the Palo Alto Unified School District (PAUSD) for $65.5M. The purchase and improvements are dependent on the City identifying funding, such as a successful ballot measure for a sales tax increase, development impact fees, grants, and private/public partnerships. A conceptual master plan for the 15-acre site was developed following a robust community engagement effort.

The conceptual master plan is a long-term vision for the Cubberley campus that could be completed incrementally over time or adjusted based on available funding and readiness of Item 13
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partner organizations. Since the timeline for full implementation is unknown, completing an environmental assessment of the complete conceptual master plan provides the regulatory foundation to move forward as funding is acquired. The Cubberley Conceptual Master Plan, in consideration with the Draft Initial Study Mitigated Negative Declaration (IS / MND), has been reviewed by the Planning and Transportation Commission, Architectural Review Board, and Parks and Recreation Commission and these commissions and staff are recommending the Council adopt both documents as a final step.

In anticipation of Council consideration of placement of a November 2026 ballot measure to fund the purchase of seven acres and advance the project or a portion of the project, staff engaged with a polling expert and ballot strategist to conduct community polls to gauge voter support for a bond or tax measure to fund the project. Four community polls have now been completed with the final occurring March 18 – March 26. Results of the fourth poll indicate that approximately 55% of surveyed voters support a general-purpose sales tax measure. While slightly higher than results for the third round of polling done in January 2026, 55% support is at the margin of error for passage of a sales tax measure. Polling demonstrates messaging impacts voter opinion; after hearing arguments in favor and against, 46% of respondents supported the tax.

BACKGROUND
The City of Palo Alto (City) is advancing a plan to redevelop a 15-acre portion of Cubberley, building on previous community engagement and re-engaging residents to reimagine and prioritize community uses of the campus. The City and the Palo Alto Unified School District (PAUSD) have a memorandum of understanding that would enable the City to purchase seven acres to support a reimagined community center and fund school improvements. The City currently owns eight acres at Cubberley; acquiring an additional seven acres would create an opportunity to update the ageing facility for the benefit of the community.

There has been extensive foundational work completed to support the advancement of the Cubberley Project, including several actions by the City Council. Attachment D shares a summary of actions to date and the history of the Cubberley site.

ANALYSIS
Conceptual Master Plan
The current master planning effort built upon the previous work completed in 2019 when a Cubberley Concept Plan was completed through a community co-design process led by Concordia and involving the community, City, and PAUSD.1 Building on that foundation, the current process moved forward with a series of three community meetings designed to refine 1 Cubberley Concept Plan 2019: https://www.pausd.org/about-us/committees-task-forces/archived- committees/cubberley-master-plan
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and update the vision for the site. Outcomes from the three community meetings culminated in a guiding vision for potential development of the Cubberley Community Center site with the completion of the Cubberley Conceptual Master Plan.

The phased concept is the culmination of feedback received during three community meetings, online input, and from Board, Commission, and City Council study sessions. At the community meetings, participants engaged in co-design activities related to building layouts, placement and amount of outdoor space, arrival and parking, and preferences between above- and below- ground parking, ultimately leading to discussion of program placement, phasing, and site circulation. The meetings reinforced the important elements of preserving some existing buildings, phasing the construction based on available funding, and ensuring programming spaces remain flexible.

Attachment B includes the final draft conceptual master plan and associated appendices. The plan highlights a phased approach to site development that includes a combination of new construction and building renovation. The site layout identifies and considers appropriate program adjacencies by grouping similar activities together, balances building space with outdoor space and site circulation, and accommodates phasing of construction over time. The phased approach is intentional as available funding may be a limiting factor in full site redevelopment, and phasing also allows the opportunity for some program and activity continuity during project construction.

Adopting the full conceptual master plan and Mitigated Negative Declaration ensures the entirety of potential impacts have been analyzed before advancing site improvements, including near-term improvements, and provides transparency with the community who participated in the planning process. The conceptual master plan represents a long-term vision that could be completed incrementally or adjusted as funding becomes available and as partnerships advance.

The vision outlined in the conceptual master plan models a three-phase implementation.

Phase I: Phase I of the Cubberley Conceptual Master Plan would focus on constructing a new Recreation and Wellness Center, a new Education Building and flexible event space, and renovating existing buildings to create a Performing Arts Complex and to ensure the full campus continues to be operational until full funding is secured. The different elements of Phase 1 could be completed incrementally as sub-phases to align with funding availability and partner readiness. To date, Letters of Intent with TheatreWorks Silicon Valley and the Friends of the Recreation Wellness Center have been approved by the City Council and those areas are likely to advance before other new construction in phase one.

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Recreation and Wellness Center: A new facility designed to serve multiple community needs. The building would include up to four multipurpose gymnasiums that could accommodate basketball, volleyball, indoor pickleball, and other recreational uses, along with fitness studio spaces, locker rooms, offices, and dedicated health and wellness areas. The facility would also incorporate storage space for emergency services and sheltering supplies such as cots and equipment, supporting the City’s emergency preparedness efforts.

Performing Arts: Both the Pavilion and Cubberley Theatre would be renovated to enhance the space as a community cultural hub. These improvements would create flexible spaces for performing arts, dance, martial arts, music, rehearsals, and related activities. Renovations would also include upgraded lobby areas to provide a more welcoming and functional gathering space for audiences and performers. On January 28, 2026, the City and TheatreWorks Silicon Valley announced a partnership to create a two-theatre complex that would include the renovation of the existing Cubberley theatre and Pavilion and adding new construction. The existing Cubberley theatre would be upgraded for continued community use and include new restrooms, expanded back of house and lobby space, and improved accessibility. The Pavilion would be renovated as the new home for TheatreWorks Silicon Valley.

Flexible Event Space: Adjacent to the Recreation and Wellness Center is a large, flexible event space capable of hosting a wide range of activities such as ballroom dancing, classes, community meetings and presentations, weddings, parties, and other community rentals and events. There is also a café and concessions area that would serve snacks for gym, pool, and athletic field events. The commercial kitchen could support cooking and nutrition classes, event catering for the large flex space and campus rentals, and food service during emergency shelter operations when the gyms are deployed.

Outdoor Programming: The current tennis courts would be elevated, with a surface- level parking lot constructed underneath and the tennis courts reestablished on top.

Additionally, Phase I could include the construction of a new outdoor swimming pool to expand aquatics programming and community recreation opportunities.

New Education Building: This building would support a range of educational and community programs. This facility could house early education offerings, after-school programs, and other lifelong learning opportunities, creating a dedicated space for youth and family enrichment.

Existing Building Renovation: The two-story “I” building would be renovated to improve functionality and extend its useful life. Phase I also includes renovation of remaining buildings, so the full site continues to be operational until funding for phases II and III is secured. Buildings and rooms currently used and occupied by PAUSD would become Item 13
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available for programming, visual arts, makerspace and workshops and flexible rental spaces.

Phase II: Phase II of the Cubberley Conceptual Master Plan would focus on the construction of visual arts and technology buildings, which includes makerspace and workshop areas for hands- on projects, as well as gallery space for city curated and community exhibitions. This area will also include artist creative studios, expanding opportunities for artists and community members to create, learn, and showcase their work.

Phase III: Phase III of the Cubberley Conceptual Master Plan would complete the Community Services section and provide a café and lounge gathering space, a popular request from the community, along with new community service and flexible spaces. The flexible space is especially valuable, as it provides the ability to adapt to changing program needs and future community priorities. It is designed to be future-proof, multi-purpose, and nimble—supporting staff-led programs, hourly rentals, office space, and potentially accommodating additional tenants. This intentional flexibility will ensure the campus continues to meet evolving needs long after construction is complete.

Overall, the conceptual master plan proposes to increase the amount of indoor space from the current 184,000 square feet to 232,250 square feet after Phase I, and ultimately to 284,000 square feet after Phases II and III. The increase in indoor square footage was informed by feedback received from the community and existing tenants during the 2019 co-design process and current conceptual master planning process, and opportunities to build upon existing public private partnerships for expanded community space. Examples where square footage increases are notable include:
Recreational space, including gyms and programmable spaces for health and wellness classes and activities;
Expanded theater and performing arts spaces with improved accessibility; Visual arts spaces for art programs, classes, and exhibits to the community, including a makerspace and creative workshops; and
Flexible spaces for city programming of classes and camps, and rental space.

Outdoor space also increases with the proposed plan from 250,000 square feet to 390,000 square feet after Phase I, and to 415,000 square feet after Phases II and III. This provides an opportunity to improve the quality of outdoor spaces at Cubberley and provide for more diverse uses, such as events, performances, outdoor programs, unstructured play and casual gathering spaces.

Overall, while the plan provides a distinct layout of the site with specific features, it represents a concept that should be considered adaptable and dynamic as the project phases continue to progress.

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Site circulation:

This Conceptual Master Plan includes a site circulation strategy that prioritizes pedestrian and bicycle safety while maintaining convenient vehicular access and parking. Walking and biking routes are designed to minimize conflicts with vehicles and connect to existing and planned regional bicycle and pedestrian networks, supporting both pass-through travel and trips to campus programs. The circulation framework was developed in coordination with broader City planning efforts, including the San Antonio Road Area Plan and Housing Element, Palo Alto Safety Action Plan, and Safe Routes to School initiatives, to ensure the campus integrates with existing and future transportation improvements in the surrounding area.

Vehicular circulation is organized through a looped roadway connecting the two perimeter access points, with distributed surface parking located near high-demand program areas and designated passenger drop-off zones throughout the site. The plan also identifies potential transportation improvements, including additional exit capacity at the Montrose Avenue signal, a potential signalized north access point, and evaluation of a center turn lane on Middlefield Road. At the completion of Phase 1, the campus would provide approximately 640 parking spaces, including City-owned and leased spaces. A detailed parking analysis prepared by transportation consultants Fehr & Peers determined that this supply would meet typical day-to- day demand based on nationally recognized standards and evaluation of the campus design, square footage, and anticipated uses. Additional traffic analysis would be conducted during future architectural design phases.

Recommendations from Planning and Transportation Commission, Architectural Review Board, and Parks and Recreation Commission
Staff presented the Cubberley Conceptual Master Plan and Draft Initial Study / Mitigated Negative Declaration (IS/MND) at a special joint meeting of the Planning and Transportation Commission (PTC) and Architectural Review Board (ARB) on March 11, 2026. Both the PTC and ARB voted separately and unanimously to recommend that City Council adopt the Cubberley Conceptual Master Plan, with considerations. The approved PTC and ARB motions are included in Attachment A and are generally focused on cost effectiveness of renovation versus new construction, parking adequacy, and site circulation for bikes and pedestrians.

Staff also presented the Cubberley Conceptual Master Plan and Draft Initial Study / Mitigated Negative Declaration (IS/MND) to the Parks and Recreation Commission on March 24, 2026.

The Commission voted 5–0 to recommend that City Council adopt the Cubberley Conceptual Master Plan, with one Commissioner abstaining. A summary of the meeting discussion is included in Attachment A and was centered around project phasing, funding strategy and flexibility, and timelines tied to land acquisition and partnership opportunities, as well as consideration of construction impacts on existing operations and ongoing community engagement efforts.

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Funding Strategy
Staff and the Cubberley Ad Hoc Committee are actively pursuing public-private partnership opportunities to advance key components of the project. Notably the City Council recently approved a Letter of Intent (LOI) for a partnership with TheatreWorks Silicon Valley which would create a two-theater complex through renovation and new construction, while preserving and upgrading the Cubberley Theatre for community use. In addition, the Friends of the Palo Alto Recreation and Wellness Center (Friends) continue to work with the City toward an agreement to help advance a future Recreation and Wellness Center. An LOI with the Friends was approved by City Council on December 2, 20243. Additional partnership developments underway include Maker Nexus, Palo Alto Community Child Care, and Avenidas.

Letters of Intent with these organizations are being developed and will be brought to Council for approval on a future date. These partnerships, together with existing City revenue streams, grants, and philanthropy, are intended to complement a future ballot measure and create a multi-part funding strategy to share in the cost of investment and not over burden taxpayers.

Poll Four Results
The City engaged with Fairbank, Maslin, Metz & Associates (FM3) to develop and conduct polling on public opinion in advance of potentially placing a measure on the November 2026 ballot. The City’s workplan includes four rounds of polling: the first released in April 2025, the second released in November 2025, the third released in January 2026, and the fourth released in March 2026.

The fourth survey focused on testing two sales tax ballot measure questions (a ½ cent (0.5%) sales tax measure and a ¼ cent (0.25%)); difference in support amount those who have visited Cubberley versus those who have not; and whether the measure would fund Cubberley upgrades, partnership contributions, sales tax paid by non-residents, and knowing that other regional sales tax measure would be on the same November 2026 ballot would change voter support.

Attachment C summarizes results of the poll, with 55% of surveyed voters in support of a sales tax measure. In addition, voter support after positive and negative messaging was measured.

Positive messaging did not stand out for voters who took the survey and a brief oppositive statement pushes support below majority with 46% voters supporting.

FISCAL/RESOURCE IMPACT
As discussed in this report, to fund critical community improvements at the Cubberley Campus, the City is evaluating a potential tax measure, together with funding from partnership opportunities, use of development impact fees, grants and philanthropy. The purchase of land 3 City Council, December 2, 2024; Agenda Item #18; SR #2410-3634, https://portal.laserfiche.com/Portal/DocView.aspx?id=112713&repo=r-704298fc Item 13
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from PAUSD totals $65.5 million. While cost estimates for phase one of the conceptual master plan are between $300 and $400 million, implementation can advance in phases with initial investments focusing on immediate repairs and partnerships. Project resources for work currently underway, including planning, administrative costs, and special studies are available in the FY 2026 Adopted Capital Budget, Cubberley Community Center Redevelopment Project (CB- 26000).

If the City Council chooses to place a measure on the November 2026 election ballot, the estimated cost of conducting the election is $100,293. Funding for this expense will be provided by the Real Property Investment Reserve.

STAKEHOLDER ENGAGEMENT
Community outreach and stakeholder engagement efforts for the project have been extensive and were a central component of the overall process. Following all community meetings, recordings of the presentations were uploaded to the project website to ensure broader access.

Community members who could not attend in person were invited to share their input through an online public comment card, providing additional opportunities for feedback to the broader community.

Additionally, staff, in coordination with the City Council Cubberley Ad Hoc Committee, developed a Strategic Activation Plan to guide near-term enhancements and activations at the Cubberley site. This plan builds upon the many events and activities already taking place daily at the Cubberley campus, including City-run programs, tenant-led offerings, rentals, special events, artist studio workshops and open studios. It is intended to complement and enhance the existing vibrancy of the site. The plan was inclusive of key stakeholders, and the document outlines a range of potential ideas to build community excitement and momentum for the project including a mix of short-term physical enhancements, community events, and temporary art installations that will be facilitated through the City’s Public Art 2026 ArtLift Community Grant program. Activations that have been completed include:
A 10- foot community canvas banner that was presented and signed by the community at the third community meeting and hung on the Cubberley campus, A three-part Family Movie Night series at Cubberley Theatre that averaged 100 participants per night and brought new families to campus, New banners featuring real-life participants,
Cubberley Artist Studio Program Open Houses and Workshops, and Launching of the 2026 ArtLift Community Grants which will include five temporary, interactive visual art experiences that will inspire joy, creativity and encourage community participation at Cubberley Community Center.

The new campus directory signs and tenant door painting initiative are nearing completion.

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In addition to community meetings and updates to the City Council, Project updates and ways to stay involved and informed are shared through:
Project website (www.paloalto.gov/improvecubberley),
Online comment card asking for priorities and open fields to share vision and service needs,
City updates via medium.com blog space,
Project updates sent via email newsletter to the project distribution list and project updates shared through City channels including Nextdoor and digital newsletters, and videos,
Utility bill inserts,
Resident mailers, and
Tabling at key City events.

ENVIRONMENTAL REVIEW
The proposed project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the City’s environmental regulations. Specifically, the City published a Draft Initial Study - Mitigated Negative Declaration (IS-MND) on March 2, 2026, which was circulated for a 30-day comment period ending on April 1, 2026. The City received seven written comments on the Draft MND, including one from a public agency, Valley Transportation Authority (VTA), and six from members of the public. The City also received verbal comments at the joint Architectural Review Board and Planning and Transportation Commission hearing on March 11, 2026. Most of the comments received expressed opinions about the project and did not raise concerns about the analysis or conclusions of the Draft IS-MND. Therefore, changes to the Final IS-MND were limited.

One commenter expressed concerns about the use of an MND for a long-term project, failure to analyze the whole of the project, aesthetics impacts, traffic impacts, cumulative impacts, and impacts to nearby residences. In accordance with CEQA Guidelines 15070(a), a public agency shall prepare an MND for a project when there is no substantial evidence that the project may have a significant effect on the environment. As identified in the MND, no unavoidable significant impacts were identified. Therefore, no changes to the Final IS-MND were made in response to these comments.

The VTA provided comments on the draft Transportation Analysis which included editorial comments on existing transit routes, a comment to include an analysis of transit delay, and a comment to include the Auto Trip Reduction Statement for the project. In response to these comments, the final TA report has been revised to make minor corrections, to include a discussion on the project’s effects on transit delay, and to provide the Auto Trip Reduction Statement for the project. The updated TA report is provided in Appendix G of the Final IS- MND. Changes to the Transportation Analysis did not identify new significant impacts or Item 13
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significant impacts of increased severity compared to the impacts identified in the Draft IS- MND. Because none of the changes to the IS-MND are considered substantial in accordance with Section 15073.5(b) and the information added merely clarifies and amplifies the information previously provided in the analysis, recirculation of the MND is not required.

CEQA does not require formal responses to comments be provided for an IS-MND. CEQA Section 15074(b) requires that prior to approving a project, the decision-making body of the lead agency shall consider the MND together with any comments received during the public review process. Therefore, written comments received during the public comment period are included in Appendix I of the Final IS-MND for consideration by City decision-makers.

ATTACHMENTS
Attachment A: Resolution adopting the Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program (including links to the documents) Attachment B: Project Documents Including Cubberley Conceptual Master Plan, Appendices, and Final Initial Study / Mitigated Negative Declaration Attachment C: Poll Four Analysis
Attachment D: Cubberley Project Background
APPROVED BY:

Kristen O'Kane, Community Services Director
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Resolution No. _____
Resolution of the Council of the City of Palo Alto Adopting the Cubberley Conceptual Master Plan Mitigated Negative Declaration and the Mitigation Monitoring and Reporting Program

R E C I T A L S
A. The City owns eight acres of the 35-acre Cubberley site, located at 4000 Middlefield Road, and currently operates the areas it controls as a community center, using some of the spaces for classes and activities in arts and culture, athletics, and sub-leases additional space at City-subsidized rates to various non-profit and community serving groups. PAUSD owns the remaining 27 acres, most of which are leased to the City, or used for education purposes, staff offices, or third-party tenants.

B. On October 7, 2024, the City Council and Palo Alto Unified School District (PAUSD or District) Board of Education approved a Memorandum of Understanding (MOU) outlining key terms and conditions for the City’s purchase of seven additional acres of land from PAUSD, contingent on voter approval of a bond measure in November 2026. The addition of the seven acres, plus the eight acres already owned by the City of Palo Alto provides an opportunity to develop a new community center and other improvements on a combined 15 acres at the Cubberley site to provide a range of City programs, including health, wellness, and recreational opportunities for residents.

C. On December 2, 2024, Council advanced the master planning effort of the future of the Cubberley site, approving a contract with Concordia, LLC, and associated budget actions for development of a revised Master Plan for the Cubberley Community Center site and a workplan for pursuit of a November 2026 local ballot measure to fund the purchase of land and development of a new community center at the Cubberley site. Subsequent Council actions included approving a five-year lease with PAUSD to continue the current use of the property, including playing fields, approval of a professional services agreement with Rincon for CEQA analysis, and approval of professional service agreements with Lew Edwards Group and Fairbank, Maslin, Metz & Associates for ballot measure strategy advisement and community polling. The Council also established the Cubberley Ad Hoc Committee (as a non-Brown Act body) to review and advise staff on efforts related to polling and development of a ballot measure that may be placed in November 2026.

D. From December 2024 through February 2026 staff held three community meetings and received additional input from Council at five additional hearings, as well as from the Planning and Transportation Commission, Architectural Review Board, Parks and Recreation Commission, and the Public Arts Commission at study sessions.

E. On March 2, 2026, the City released a Draft Mitigated Negative Declaration evaluating the environmental impacts associated with the proposed construction and operation of full build out under the Cubberley Conceptual Master Plan for a 30-day public comment period, ending on April 1, 2026.

F. On March 11, 2026, the Planning and Transportation Commission (PTC) and Architectural Review Board (ARB) held a duly noticed special joint meeting to consider the Cubberley Conceptual Master Plan and the Draft Initial Study/Mitigated Negative Declaration (IS/MND). Both the Planning & Transportation Commission and Architectural Review Board voted separately, considering the MND, Item 13
Attachment A - Resolution
adopting the Mitigated
Negative Declaration and
Mitigation Monitoring and
Reporting Program
(including links to the
documents)

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unanimously recommended that City Council adopt the Cubberley Conceptual Master Plan, with a list of considerations for Council and staff to evaluate as the project moves forward into future phases of planning and design.

G. On March 24, 2026, the Parks and Recreation Commission held a duly noticed public hearing and to consider the Cubberley Conceptual Master Plana and Draft MND and recommended approval of the project.

H. The City reviewed all comments received on the Draft MND and prepared a Final MND, which was published on April 9, 2026. Attachment C of the Final MND includes all written comments received on the project.

I. The City Council considered said recommendations after a duly noticed public hearing held on April 20, 2026, and, after considering all public comments on the project and the Final MND, now desires to Adopt the Cubberley Conceptual Master Plan MND and approve the associated Mitigation Monitoring and Reporting Plan, as set forth below.

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

SECTION 1.

1. The environmental effects of the Project have been analyzed in an Initial Study/Mitigated Negative Declaration (IS/MND) prepared in accordance with the requirements of the California Environmental Quality Act of 1970 (CEQA). The IS/MND is attached to this resolution as Attachment A.

2. The IS/MND identified one or more potentially significant effects of the Project on the environment as well as mitigation measures that would reduce the significant effects to a less than significant level. The City agrees to implement mitigation measures to mitigate the effects to a less than significant level as demonstrated through the adoption of the related Mitigation Monitoring and Reporting Program (MMRP) in Attachment B of this resolution.

3. Council has independently reviewed and considered the Initial Study/MND, together with any public comments received during the public review process and other information in the record, prior to acting upon or approving the Project.

4. The IS/MND reflects and represents the independent judgment and analysis of the City of Palo Alto as lead agency.

5. Based on the whole record of proceedings, Council hereby finds that there is no substantial evidence that the Project will have a significant effect on the environment and does hereby adopt the Mitigated Negative Declaration and related Mitigation Monitoring and Reporting Program prepared for the Project.

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6. The Director of Planning and Development Services at the Director’s Office at 250 Hamilton Avenue, Palo Alto, California 94301 is the custodian of records and documents of proceedings on which this decision is based.

SECTION 2. This resolution shall be effective upon adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSTENTIONS:

ABSENT:

ATTEST:

__________________________ __________________________
City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

__________________________ __________________________
Assistant City Attorney City Manager

__________________________
Director of Planning and
Development Services

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Attachment A
Final IS/MND

[Editor’s note: The final IS/MND is available for viewing at the link below and will be attached to this Resolution if approved.
https://www.paloalto.gov/Departments/Community-Services/Help-Us-Improve-Cubberley

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Reporting Program
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Attachment B
Mitigated Monitoring and Reporting Plan

[Editor’s note: The final MMRP is available for viewing at the link below and will be attached to this Resolution if approved.
https://www.paloalto.gov/Departments/Community-Services/Help-Us-Improve-Cubberley

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Attachment B
Project Documents:

1. Cubberley Conceptual Master Plan

2. Cubberley Conceptual Master Plan Appendices

3. Final Initial Study / Mitigated Negative Declaration Directions to review Project documents online

1. Go to: www.paloalto.gov/improvecubberley

2. To review the Conceptual Master Plan project documents, scroll down to find “Draft Cubberley Conceptual Master Plan Documents” and underneath you’ll find the following documents
Cubberley Draft Conceptual Master Plan
Cubberley Conceptual Master Plan Appendices
Final Initial Study / Mitigated Negative Declaration
Direct Link to Project Webpage
Help Us Improve Cubberley – City of Palo Alto, CA
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Documents Including
Cubberley Conceptual
Master Plan, Appendices,
and Final Initial Study
Mitigated Negative
Declaration

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220‐7878
Palo Alto Voter Views of a
Potential Ballot Measure
Key Findings of a Survey Conducted March 18‐26, 2026
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2 March 18‐26, 2026Dates
Dual‐mode Voter Survey Survey Type
Likely November 2026 Voters in Palo AltoResearch Population 411Total Interviews
(Full Sample) ±4.9% at the 95% Confidence Level
(Half Sample) ±6.9% at the 95% Confidence LevelMargin of Sampling Error Contact Methods
Data Collection Modes
2013, 2016, 2018, 2020, 2021, 2022,
April/May 2025, November 2025 & January 2026Survey Tracking Survey Methodology
(Note: Not All Results Will Sum to 100% Due to Rounding) Text
Invitations
Telephone
Calls
Email
Invitations
Telephone
Interviews
Online
Interviews
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3 Context
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4 Q1.
61%
43% 40% 41% 37% 39% 41%
36%25% 37% 34% 35%
27% 27% 25% 26%
14%
20%
27% 24%
36% 34% 34%
38%
2016 2018 2021 2022 April/May
2025
November
2025
January
2026
March
2026
Right Direction Wrong Direction Don't Know
First, would you say things in Palo Alto are generally headed in the right direction, or do you feel that things are headed in the wrong direction? Palo Alto voters hold mixed views about
the direction of life in the city overall.

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5 Q13 & Q14.

Yes
15% No
78%
Prefer
Not to
Say
7%
Yes
63%
No
36%
Prefer
Not to
Say
1%
Three in five likely voters have visited Cubberley Community Center, while about one in six have taken part in discussions about it.

First, have you ever taken part in past workshops,
community meetings, or town hall discussions about plans for the Community Campus at the Cubberley site?
Have you or has someone in your household
visited Cubberley Community Center to
participate in classes or programs there?
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6 Q5.
12%
34%
17%
18%
19%
Great need
Some need
A little need
No real need
Don't know
A Little/
No Real Need
35%
Great/
Some Need
46%
In your personal opinion, do you think that Palo Alto has a great need, some need, a little need, or no real need for additional funds to provide safety, electrical, and other basic updates for community center facilities? Fewer than half believe that the City has “a great need” or “some need” for additional funding to update community center facilities.

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7 Q3. Wording Slightly Different in Previous Survey
12%
4%
7%
6%
5%
5%
34%
24%
25%
26%
31%
35%
17%
18%
18%
20%
18%
19%
18%
32%
20%
32%
36%
31%
19%
21%
29%
15%
10%
11%
March 2026
January 2026
2020
2018
2016
2013
Great Need Some Need A Little Need No Real Need Don't Know Great/ Some Need
46%
29%
33%
32%
36%
40%
This is a greater share than those who believed there was a “great need” or “some need” for updated facilities to provide services.

In your personal opinion, do you think that Palo Alto has a great need, some need, a little need, or no real need for additional funds to provide safety, electrical, and other basic updates for community center facilities? In your personal opinion, do you think that Palo Alto has a great need, some need, a little need, or no real need for additional funds for updated facilities to provide services including classes, camps, fitness programs, or drop‐in casual spaces? Item 13
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8 Initial Views of a Ballot Measure
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9 Q2. Would you vote yes or no on this measure?
24%
23%
8%
4%
11%
23%
7%
Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
City of Palo Alto Community Safety/Services Measure . To provide general city services such as repairing Cubberley Community Center for current safety, earthquake, accessibility s tandards; upgrading deteriorating electrical systems, wiring, plumbing; acquiring outdoor space/sites; mainta ining streets, safe, clean downtown/commercial cores; preparing for natural disasters; repairing deteriorating com munity spaces, libraries, shall City of Palo Alto’s measure enacting a 0.5% (1/2¢) sales tax, providing approximately $15,600,000 annually until ended by voters, with published financial audits, all funds used locally, be adopted?
Total
Yes
55%
Total
No
37%
A sales‐tax measure begins with support from
a majority –r i g h t at the margin of error for passage.

Vote Threshold 50%+1 and Margin of Error ±4.9%
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10 Q2. Would you vote yes or no on this measure?
January 2026
City of Palo Alto Community Safety/Services Measure. T o provide general city services such as repairing Cubberley Community Center for current safety, earthquake, accessibility standards; upgrading deteriorating electrical systems, wiring, plumbin g; acquiring outdoor space/sites; maintaining streets, safe, clean downtown/commercial cores; preparing for natural disasters; repairing deteriorating community spaces, libraries, shall City of Palo Alto’s measure enacting a 0.5% (1/2¢) sales tax, providing approximately $15,600,000 annually until ended by voters, with published financial audits, all funds used locally, be adopted? March 2026
City of Palo Alto Community Safety/Services Measure. T o provide general city services such as repairing Cubberley Community Center for current safety, earthquake, accessibility standards; upgrading deteriorating electrical systems, wiring, plumbin g; acquiring outdoor space/sites; maintaining streets, safe, clean downtown/commercial cores; preparing for natural disasters/earthquakes; repairing deteriorating community spaces, libraries, shall City of Palo Alto’s measure enacting a

0.5% (1/2¢) sales tax, providing approximately $15,600,000 annually until ended by voters, subject to published independent audit, all funds used locally, be adopted?
Support is seven points higher than it was in January.
24%
22%
23%
14%
8%
12%
7%
11%
4% 11%
14%
23%
23%
March 2026
January 2026
Definitely Yes Probably Yes Undecided, Lean Yes Undecided Undecided, Lean No Probably No Definitely No Total No
Total
Yes
37%55%
41%48%
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11 Nearly two‐thirds of Democrats support the measure;
less than half of independent or Republican voters do.

Q2. Would you vote yes or no on this measure?
Initial Vote by Party, Gender & Age
29%
17%
14%
24%
25%
28%
20%
23%
25%
23%
13%
21%
26%
22%
24%
25%
9%
7%
9%
7%
6%
10%
8%
7%
8%
8%
6%
8%
5%
8%
9%
6%
4%
8%
8%
14%
14%
11%
11%
11%
12%
8%
18%
25%
49%
25%
21%
25%
25%
19%
Democrats
Independents
Republicans
Men
Women
18‐49
50‐64
65+
Definitely Yes Probably Yes Undecided, Lean Yes Undecided Undecided, Lean No Probably No Definitely No Total No
Total
Yes
29%64%
45%47%
62%29%
40%54%
35%57%
39%55%
37%55%
35%56%
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12 There is no difference in support among those who
have visited Cubberley versus those who have not.

Q2. Would you vote yes or no on this measure?
Initial Vote by Palo Alto Need for Funding & Taken Classes at Cubberly Community Center 34%
12%
23%
25%
24%
32%
16%
15%
21%
27%
11%
4%
6%
9%
5%
5%
6%
15%
7%
8%
4%
4%
4%
4%
6%
15%
13%
10%
12%
7%
44%
24%
24%
21%
Great/Some Need
A Little/No Real Need
Don't Know
Visited Cubberley
Have Not
Definitely Yes Probably Yes Undecided, Lean Yes Undecided Undecided, Lean No Probably No Definitely No Total No
Total
Yes
17%77%
62%32%
41%44%
38%55%
36%56%
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13 There is no difference in support between north and south areas.

Q2. Would you vote yes or no on this measure?
Initial Vote by North/South of Oregon Expressway
24%
24%
24%
23%
7%
9%
8%
7% 5%
11%
10%
22%
24%
South
North
Definitely Yes Probably Yes Undecided, Lean Yes Undecided Undecided, Lean No Probably No Definitely No Total
No
Total
Yes
37%55%
38%55%
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14 Q2. Would you vote yes or no on this measure?
Q3.
24%
23%
8%
4%
11%
23%
7%
Half‐Cent Quarter‐Cent
Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
Total
No
37%
Total
Yes
55%
28%
15%
11%
5%
7%
22%
12%
Lowering the amount of the tax does not increase support.

Total
No
34%
Total
Yes
54%
The final structure of this measure has not been determined. If it enacted a 0.25% (1/4¢) sales tax instead of a 0.5% (1/2¢) sales tax, providing approximately $7,800,000 annually instead of $15,600,000 annually, until ended by voters, would you vote yes or no? Item 13
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15 Q2. Would you vote yes or no on this measure?
Q4.
24%
23%
8%
4%
11%
23%
7%
Until Ended by Voters 30‐Year Sunset
Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
Total
No
37%
Total
Yes
55%
20%
10%
13%
7%
8%
27%
16%
Voters are less likely to support a measure with a 30‐year sunset than one that is in effect until ended by voters.

Total
No
43%
Total
Yes
42%
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16 The Impact of
Additional Information
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17 When informed that the measure would fund Cubberley upgrades, one in five “no” voters say they may be more likely to support it.

Q6.

If you knew that a portion of this measure’s revenue would be dedicated to repairing the 70‐year‐old Cubberley Center to meet current safety, earthquake, accessibility standards; upgrade outdated and deteriorating electrical systems and plumbing and purchase Cubberley Community Center land thereby preserving trees and outdoor space, would you be more likely or less likely to support this potential measure, or would it make no difference to you? 21%
33%
5%
9%
27%
34%
17%
28%
40%
25%
57%
61%
7%
7%
8%
5%
12%
All Voters
Among "Yes" Voters
Among "No" Voters
Among Undecided
Voters
Much More Likely to Support Somewhat More Likely to Support Makes No Difference Somewhat Less Likely to Support Much Less Likely to Support Total
Less
Likely to
Support
Total
More
Likely to
Support
12%48%
8%67%
21%22%
1%37%
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18 Three in five undecided voters say they would be more likely to support a measure knowing about the partnerships involved.

Q7.

The City is currently developing partnerships to bring tens of millions of dollars from private donors to the Cubberley Community Center for performing arts, wellness, maker space, and recreation facilities. Would knowing that these dollars would be leveraged to reduce the overall taxpayer cost while keeping the Cubberley Community Center property publicly owned, updated for basic safety and current accessibility requirements make you more or less likely to vote yes on the measure? 31%
48%
9%
21%
35%
34%
35%
41%
26%
15%
43%
14%
5%
6%
22%
7%
All Voters
Among "Yes" Voters
Among "No" Voters
Among Undecided
Voters
Much More Likely to Support Somewhat More Likely to Support Makes No Difference Somewhat Less Likely to Support Much Less Likely to Support Total
Less
Likely to
Support
Total
More
Likely to
Support
9%66%
3%81%
13%43%
24%62%
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19 Most undecided voters are “somewhat more likely” to support a measure knowing that non‐residents and businesses will pay, too.

Q8.

If you knew that non‐residents who shop in Palo Alto and businesses will pay a portion of the sales tax, meaning that close to 40% of the overall amount raised to meet essential city needs will be paid by non‐residents, would you be more likely or less likely to support this potential measure, or would it make no difference to you? 18%
27%
7%
29%
35%
18%
43%
44%
33%
64%
28%
6%
5%
4%
26%
7%
All Voters
Among "Yes" Voters
Among "No" Voters
Among Undecided
Voters
Much More Likely to Support Somewhat More Likely to Support Makes No Difference Somewhat Less Likely to Support Much Less Likely to Support Total
Less
Likely to
Support
Total
More
Likely to
Support
9%47%
5%62%
11%25%
26%45%
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20 One‐third of voters overall are less likely to support the measure knowing it is on the same ballot as the regional sales tax.

Q9.

If a regional transportation sales tax of one half‐cent were on the same ballot as a City of Palo Alto sales tax measure, would you be more likely or less likely to support the Palo Alto sales tax measure, or would it make no difference to you? 6%
11%
7%
9%
9%
53%
53%
59%
28%
17%
19%
15%
23%
17%
8%
24%
40%
All Voters
Among "Yes" Voters
Among "No" Voters
Among Undecided
Voters
Much More Likely to Support Somewhat More Likely to Support Makes No Difference Somewhat Less Likely to Support Much Less Likely to Support Total
Less
Likely to
Support
Total
More
Likely to
Support
34%13%
27%20%
39%2%
63%9%
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21 Messaging and Movement
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22 Support for the measure declines as voters learn more about it.

Q2 & Q11. Would you vote yes or no on this measure?
Q12. One last time: Would you vote yes or no on the measure titled: City of Palo Alto Community Safety/ Services Measure? 24%
25%
22%
23%
17%
15%
8%
9%
9%
7%
13%
12%
4% 11%
7%
11%
23%
28%
28%
Initial Vote
After Additional
Information and Positive
Messaging
After Negative Messaging
Definitely Yes Probably Yes Undecided, Lean Yes Undecided Undecided, Lean No Probably No Definitely No Total No
Total
Yes
37%55%
37%51%
42%46%
Vote Threshold 50%+1 and Margin of Error ±4.9%
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23 Ranked by Very Convincing
(STANDARDS) Most Cubberley Community Center buildings are more than 70 years old. They were built well before the internet, and do not meet current disabled access and earthquake safety standards.

Palo Alto residents deserve a community center that is modern, safe, and accessible to the entire community.29% *(OUTDOOR SPACE) As our city grows and changes, we must protect green space and trees for the value they provide. The funds used to update the Cubberley Community Center will also preserve outdoor space and trees on the site for all in the community to enjoy.27%
(WITHOUT) Without this measure, the Cubberley Community Center will continue to fall apart and become increasingly outdated and even more expensive to maintain. It will soon become unsafe and obsolete.

This measure invests in ensuring our community has a safe, up ‐to‐date place to gather, learn and play.27% (AFFORDABILITY) As the cost of living goes up, it is more important now than ever to invest in free or low ‐cost places for exercise and play that everyone can use close to home. Palo Alto should invest in creating an affordable, accessible place where people can gather to learn, play, read, enjoy the arts, experience joy, and connect with one another .
24%
(STREETS) Funding from this measure will ensure the City can better repair streets and sidewalks, improve traffic flow especially near trains, fix potholes, and provide safe routes to school for children.24% Q10. First, please consider the following statements from people who may support this measure. For each one, please indicate whether you find it very convincing, somewhat convincing, or not convincing as a reason to vote yes. *Split Sample
Messaging in Support of the Measure
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24 Ranked by Very Convincing
(ACT LOCAL) With state and federal budget cuts, we must act locally to protect Palo Alto’s unique quality of life.

This measure will help maintain the City’s fiscal stability by improving fire and police protection, emergency response, streets, parks, and youth and senior services, and address traffic with locally controlled funding that the State or Federal governments can’t take. 23%
(PARTNERS) This measure represents a unique opportunity for Palo Alto taxpayers to invest in an upgraded Cubberley Community Center for less money. Through partnerships with local nonprofits that are committing tens of millions of dollars to the project, we can reduce taxpayer costs.22% (REPAIRS) Cubberley Community Center facilities have significant structural issues with deteriorating electrical wiring and plumbing. That’s why we should prudently invest in a new, safe, accessible and modern facility for our community to share into the future.21%
(ACCOUNTABILITY) This measure will have strict accountability provisions, including independent financial audits, to ensure that funds are spent efficiently, effectively, and as promised.19% *(CHILDREN) There are too few affordable places for children and teens to gather, learn and play outside of school hours in our community. Upgrading and repairing the Cubberley Community Center will provide safe spaces for children and teens after school and in the summer so that they are off the street, near adult supervision, and staying out of trouble.
16%
Q10. First, please consider the following statements from people who may support this measure. For each one, please indicate whether you find it very convincing, somewhat convincing, or not convincing as a reason to vote yes. *Split Sample
Messaging, Continued
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25 Q10. First, please consider the following statements from people who may support this measure. For each one, please indicate whether you find it very convincing, somewhat convincing, or not convincing as a reason to vote yes. *Split Sample
29%
27%
27%
24%
24%
23%
22%
21%
19%
16%
33%
33%
32%
34%
30%
34%
40%
41%
36%
33%
62%
60%
59%
58%
54%
58%
61%
63%
55%
49%
Standards
*Outdoor Space
Without
Affordability
Streets
Act Local
Partners
Repairs
Accountability
*Children
Very Convincing Somewhat Convincing
Messaging in support of the measure
does not connect with much intensity.

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26 Voters also heard or read a brief statement opposed.

Q12. One last time: Would you vote yes or no on the measure titled: City of Palo Alto Community Safety/ Services Measure? Next, opponents of this measure say that at a time when the cost of living is skyrocketing, the last thing we should do is raise our taxes even more. We are already facing another potential half‐cent sales tax increase for Bay Area transit on the same ballot.

And anyway, our community has higher priorities right now than purchasing land and upgrading the community center . The City should cut waste and mismanagement of funds before asking to raise our taxes again.

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27 Q2. Would you vote yes or no on this measure?
Q12. One last time: Would you vote yes or no on the measure titled: City of Palo Alto Community Safety/ Services Measure? 24%
23%
8%
4%
11%
23%
7%
Initial Vote After Negative Messaging
Definitely yes
Probably yes
Undecided, lean yes
Undecided, lean no
Probably no
Definitely no
Undecided
Total
No
37%
Total
Yes
55%
22%
15%
9%
3%
11%
28%
12%
After this brief negative message, fewer than half support the measure, with more intensity on the “no” side.

Total
No
42%
Total
Yes
46%
Vote Threshold 50% +1, Margin of Error +/‐4.9%
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Curt Below
[email protected]
Miranda Everitt
[email protected]
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The Cubberley Site
The 35-acre Cubberley site, located at 4000 Middlefield Road in Palo Alto, operated as Cubberley High School from 1956 to 1979. Beginning in the late 1980’s, the City began leasing portions of the facilities from the Palo Alto Unified School District (PAUSD) at the site. Today, the City operates the areas of Cubberley it controls as a community center, using some of the space for classes and activities in arts, culture, athletics, and sub-leasing additional space at City-subsidized rates to various non-profit and community serving groups. The current lease agreement expires December 31, 2029.1 Today, the City owns eight acres of the 35-acre site. PAUSD owns the remaining 27 acres, most of which are leased to the City. There are currently 23 tenants and 24 artists leasing space at Cubberley from the City and dozens of groups renting the theater, pavilion, classrooms, and athletic fields from the City. Combined, these groups provide the community with programs that support health and wellness, childcare, education, and visual and performing arts. PAUSD uses its retained space for educational purposes and staff offices and has leases with some third-party tenants.

The parking lot in the southeast corner of the property houses portable trailers as a temporary site for Hoover Elementary School during construction at the school’s site. A current site map can be found on the City’s website.2
Several master planning efforts have been completed over the years to reimagine and improve the Cubberley site, with the most recent being completed in 2019.3 Memorandum of Understanding with PAUSD
In October 2024,4 both the City Council and Palo Alto Unified School District (PAUSD or District) Board of Education approved a Memorandum of Understanding (MOU) related to the future of the Cubberley site. The MOU outlines key terms and conditions for the purchase and future planning of Cubberley. The land purchase, which would transfer ownership of seven acres from PAUSD to the City, is contingent on voter approval of a bond measure in November 2026. This condensed timeframe requires development of a master plan for the site by March 2026, conduct stakeholder and community engagement and outreach, polling, financial analysis, CEQA analysis, and other critical tasks. The addition of the seven acres, plus the eight acres already owned by the City of 1 City Council, December 2, 2024: https://portal.laserfiche.com/Portal/DocView.aspx?id=112707&repo=r- 704298fc&searchid=c3e3ed6f-6cda-4dd3-ba35-5d8d4be5579e
2 https://www.cityofpaloalto.org/files/assets/public/v/1/city-manager/communications-office/cubberley- community-center_mappdf.pdf
3 Cubberley Concept Plan 2019: https://www.pausd.org/about-us/committees-task-forces/archived- committees/cubberley-master-plan
4 City Council, October 7, 2024; Agenda Item AA1; SR #2409-3500, https://portal.laserfiche.com/Portal/DocView.aspx?id=98415&repo=r-704298fc&searchid=e199f724-22ab- 472b8ad8-ca162c4dcf8a
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Palo Alto provides an opportunity to develop a new community center and other improvements on a combined 15 acres at the Cubberley site to provide a range of City programs, including health, wellness, and recreational opportunities for residents.

Master Plan Update and Pursuit of a Local Ballot Measure To advance the master planning effort the City Council took several actions on December 2, 20249 related to the future of the Cubberley site. These actions included approval of a contract with Concordia, LLC, and associated budget actions for development of a revised Master Plan for the Cubberley Community Center site, building on the previous master plan completed in 2019 by Concordia and guided by significant community input. Additionally, the Council approved a Letter of Intent with the Friends of the Palo Alto Recreation Wellness Center for the purpose of fundraising for a recreation wellness center (gymnasium) at the Cubberley site, and a workplan for pursuit of a November 2026 local ballot measure to fund the purchase of land and development of a new community center at the Cubberley site.

Subsequent Council actions included approving a five-year lease with PAUSD10 to continue the current use of the property, including playing fields, approval of a professional services agreement with Rincon for CEQA analysis,11 and approval of professional service agreements with Lew Edwards Group and Fairbank, Maslin, Metz & Associates12 for ballot measure strategy advisement and community polling.

Cubberley Ad Hoc Committee
The Council established the Cubberley Ad Hoc Committee (as a non-Brown Act body) to review and advise staff on efforts related to polling and development of a ballot measure that will successfully receive voter support in 2026. Efforts include polling, financial and revenue modeling for the community center, master planning, and community outreach to complete the Master Plan and place a measure on the November 2026 ballot.

The City Council will serve as the governing body for policy direction at key decision points. This includes direction to conduct polling, review of concept designs, direction on 9 City Council, December 2, 2024; Agenda Item 18, SR #2410-3634, https://portal.laserfiche.com/Portal/DocView.aspx?id=112713&repo=r-704298fc 10 City Council, December 2, 2024; Agenda Item 12; SR #2410-3651, https://portal.laserfiche.com/Portal/DocView.aspx?id=112707&repo=r-704298fc 11 City Council, December 16, 2024; Agenda Item 12; SR #2411-3813, https://portal.laserfiche.com/Portal/DocView.aspx?id=117742&repo=r-704298fc&searchid=96e9506b- f1bd-485e-a4cb-fc804b5893d1
12 City Council, February 24, 2025; Agenda Item 4; SR #2501-4039, https://portal.laserfiche.com/Portal/DocView.aspx?id=143364&repo=r-704298fc&searchid=fef509a6- 4d34-4060-bc7a-6ab87db7a0ae
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operating and financial models, and decisions on what should be placed on the November 2026 ballot.

April 21, 2025 City Council Meeting
At the April 21, 202517 City Council meeting, staff presented outcomes from the first community meeting held on March 19, an update on the Cubberley Master Plan Project workplan and sought Council authorization to initiate the first community poll.

First Cubberley Master Plan Community Meeting
The first community meeting for the Cubberley Master Plan Project was held on March 19, 2025, and was attended by over 120 community members and stakeholders.

Participants completed two activities in table groups of up to eight people with guided facilitation, focusing on the vision for the community center, programming, and place making. The first meeting goals included a review of the Vision from the City Council session and then using a list from the previous community engagement process, participants were asked to review and confirm desired programming and adjacencies for the future Community Center. The outcomes of the March 19 meeting were presented to the City Council on April 21, 202518 .

The first activity focused on a review of the Council Vision statement and participants were asked to expand the Vision statement with additional values and ideas.

Community members valued: Multipurpose, adaptable spaces to accommodate diverse uses over time; Gathering hubs for interconnectivity and communication between diverse social, cultural and generational groups; Accessibility for all ages, cultures and abilities to access holistic wellness resources; Integration of green space and sustainability features in experiential and infrastructural planning; and Affordability for local Palo Altans and for tenants who have a community focus. Overall, participants focused on flexibility, inclusivity, sustainability, and long-term community engagement as high-level themes.

The second activity focused on programming and adjacencies of indoor and outdoor spaces. The most selected indoor programs were Theater/Performance Space, Dance Classes, Art Studio, Art Classes, followed by Gym Facility, Flexible Rental Space, and a Café. For outdoor programs, Open Greenspace was the most selected program followed by Playground, Amphitheater, and Pool/Water Area. Compared to 2019, the most mentioned programs then (indoor and outdoor) were Adult Education, 17 City Council, April 21, 2025; Agenda Item 11; SR #2503-4310, https://portal.laserfiche.com/Portal/DocView.aspx?id=166428&repo=r-704298fc 18 Staff Presentation, April 21, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=71ade3d7-a57a-4195-a59b- c410d90832ea
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Theater/Performance Space, Greenspace, Makerspace, and Senior/Multigenerational Programs.

Feedback on First Community Poll
Polling experts, FM3 presented themes for the first community poll designed to test voter opinions on the community center’s goals, preferred uses, and willingness to support funding through a tax or bond21. The poll themes and questions were developed with input from the Cubberley Ad Hoc Committee and will inform critical upcoming milestones in the project. The Council did not take an action but supported proceeding with the poll.

April 22,2025 Parks & Recreation Commission Meeting
On April 22, 2025,22 staff presented an informational update to the Parks and Recreation Commission, offering a comprehensive overview of the project's overall workplan and timeline. The presentation included a detailed summary of Community Meeting #1, highlighting key themes and priorities that emerged from the community’s feedback. Staff also introduced Poll #1, which was launched at the end of April, and encouraged Commissioners to help promote the survey to ensure broad community participation. In addition, the presentation outlined several ways the Commission can remain engaged and support the project, including serving as ambassadors within the community, helping to share information, and providing feedback. The creation of a PRC Cubberley ad-hoc committee was discussed and it was decided that this topic will be further considered during the upcoming workplan revisions scheduled for the coming months.

June 9, 2025 City Council Meeting
On June 9, 2025,23 staff presented to City Council the results of the first community poll, community engagement milestones coming up and updates to the workplan. The focus of the first poll was to survey voter input on the goals and future of the community center and possible support for a tax or bond measure. Staff also shared community engagement. Overall, the poll found broad majority support for improvement at the Cubberley site. Surveyed voters place highest priority on bringing the facility up to modern standards for electrical, plumbing, safety, and accessibility early childhood 21 FM3 Presentation, April 21, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=83ec6422-b6e4-4e83-9ca3- ca746a5971a0
22 Staff Presentation, April 22, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=dae0543c-e007-4fc1-9a69- fd08b156ee94
23 City Council, June 9, 2025, Agenda Item 2; SR#2503-4313, https://portal.laserfiche.com/Portal/DocView.aspx?id=182790&repo=r-704298fc&searchid=57dac2b5- 5c42-4ef0-978a-be940766f395
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education; affordability and efficient use of taxpayer dollars; and overall repairs for the facility. Lastly, staff shared with the City Council the community revised Vision Statement for the future of the Community Center.

June 12, 2025 Second Cubberley Master Plan Community Meeting On June 12, 2025, the City held the second community meeting for the Cubberley Community Center Master Plan, facilitated by Concordia. At the outset of the meeting, Concordia shared a revised Vision Statement based on community input gathered at the March 19 community meeting. The revised Vision Statement is, A vibrant, beloved, and adaptable destination that promotes learning, connections, joy, and wellbeing where all cultures and generations belong. Following this, staff provided an overview presentation to orient attendees to the three 3-D concept plans being presented. Each conceptual design includes an A, B, and C variations exploring different configurations of building placement, new construction vs renovation, green space, bike and pedestrian circulation, and parking—both above and below ground.

In the first activity community members were invited as a group to share their feedback on what aspects from all nine designs they liked and wanted “keep” and did not like and wanted to “leave behind”. They indicated aspects they liked with green dot stickers and aspects they did not like with red dot stickers. They were then asked to expand on their choices by writing explanations on the activity sheet provided for the table.

In the second activity, following the group discussion of the three concept designs—The Promenade, The Grid, and The Plaza—participants individually reviewed key design elements using a provided handout. They were asked to evaluate each concept’s primary layout across six categories: arrival & parking, pedestrian circulation, building scale & physical space organization, landscape & greenspace organization, balance of building & greenspace, and being a good neighbor. Each category was rated on a scale from 1 (not successful at all) to 5 (very successful).

Approximately 130 community members attended the second Cubberley Community Meeting and were highly engaged in providing feedback on the three presented concept designs. Attendees shared a wide range of reactions to various aspects of the designs, particularly discussing building layouts, the placement and amount of green space, parking structures, and preferences between above- and below-ground concepts. While perspectives varied, there was clear consensus around the excitement for the project’s progress and enthusiasm to see the plans taking shape. Community members expressed eagerness to continue the conversation, particularly around program placement, at the next meeting. A Meeting Summary can be found on the project website27.
27 Community Meeting #2 Summary, www.paloalto.gov/files/4280f185-ca1d-4965-940f-1e4fcaf6cb11/M2- Summary-Report-Final.pdf
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June 19, 2025 Public Art Commission Meeting
On June 19, 2025,29 City staff presented to the Public Art Commission and discussed potential opportunities to support the City’s Strategic Activation Plan for the Cubberley site, which was developed by staff in coordination with the City Council’s Cubberley Ad Hoc Committee. The plan outlined phased enhancements and activations aligned with the broader master planning process, community engagement efforts, and the anticipated November 2026 ballot initiative. As part of the discussion, Commissioners explored how the ArtLift grant program—previously identified at their January retreat as a potential tool—could be leveraged to support temporary public art installations at Cubberley and other key locations. Ideas included murals, ground art, freestanding sculptures, and performance-based activations to help generate community excitement and reinforce the role of the arts in creating vibrant, inclusive public spaces.

June 24, 2025 Parks & Recreation Commission Meeting
On June 24, 2025,30 City staff provided the Parks and Recreation Commission with an informational update on the Cubberley Community Center Master Plan. The presentation included a recap of the second community meeting held on June 12, where Concordia unveiled three concept designs for the site and invited community feedback. Staff also presented the results of the first community poll, released in late April, and shared a list of proposed near-term activation ideas for the Cubberley site, inviting the Commission’s input. In addition, staff sought feedback from the Commission on the three concept designs. The newly formed PRC Cubberley Ad Hoc Committee will continue to refine the activation plans in July.

July 9, 2025 Planning and Transportation Commission Meeting On July 9, 2025,31 the Planning and Transportation Commission (PTC) received an update on the Cubberley Master Plan and was asked to provide input to help inform the next phase of the planning process. Staff requested feedback on several key aspects recently reviewed by the community, including arrival and parking, pedestrian circulation, building scale and space organization, greenspace layout, the balance of 29 Staff Presentation, June 19, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=a036e199-31cd-4d94-8214- 7fb0170e39ac
30 Staff Presentation, June 24, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=ac29aa36-1b3a-4403-b8b2- cc403685865d
31 Staff Presentation, June 9, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=49fc32cf-caa1-4dd9-97f9- 5d5d02150256
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built and open space, and how the site can be a good neighbor. Additional PTC feedback emphasized the importance of clear cost comparisons between renovation and new construction, interest in public-private funding models, and support for a future bond measure and donor engagement. Commissioners favored partial underground parking and better integration with transit and surrounding neighborhoods. There was broad interest in maintaining flexible green space for events, ensuring safe and separate bike/pedestrian circulation, and preserving multigenerational, inclusive programming. Suggestions also included clearer diagrams, more tangible use examples, and consideration of impacts from surrounding development.

July 17, 2025 Architectural Review Board Meeting
On July 17, 202535, the Architectural Review Board (ARB) received a presentation on the Cubberley Master Plan and provided early feedback to help shape the next phase of planning. The Board expressed strong support for phased development and emphasized minimizing disruption to existing tenants and programs. Members praised pedestrian and bike circulation, supported the proposed balance of buildings and green space, and encouraged improvements to vehicle access and mobility hubs. There was general support for new construction over renovation and interest in enhancing the site's identity through public art and flexible community spaces. The ARB also encouraged a welcoming design that reflects Cubberley’s civic and cultural significance while being a good neighbor to the surrounding community.

September 17, 2025 Third Cubberley Master Plan Community Meeting On September 17, 2025, the City held the third and final community meeting for the Cubberley Master Plan, facilitated by Concordia. Approximately 150 community members attended and were highly engaged in reviewing the refined concept design. At the outset, City staff and Concordia recapped the first two community meetings, provided a project overview, and highlighted updates to the concept plan, including phasing strategies. Following this presentation, participants engaged in two interactive activities to provide focused feedback.

A draft concept design was presented in phases to demonstrate that the project will need to be constructed over time based on available funding, and to ensure that programs and services are not disrupted during construction. Phase 1 includes a mix of constructing new buildings and renovation of existing buildings to reflect likely timing needed between phases while additional funding is secured.

Activity 1- Phase 1 Concept Design: Recreation Wellness and Performing Arts 35 Staff Presentation, July 17, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=2a9a7988-768f-465b-bcf9- 68166ff9af6f
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Phase 1 consists of two parts: a Recreation Wellness Center and a Performing Arts Center. Phase 1 also includes renovation of remaining buildings so the full site continues to be operational until phases 2 and 3 can be completed. Community members were invited to assess the Phase 1 concept designs for the recreation wellness and performing arts area and were asked to reflect on three key questions:

1. What is working well and excites you?

2. What is not working well or could be improved?

3. What creative ideas do you have to make the space exciting? Activity 2- Phase 2 and 3 Concept Design: Visual Arts & Technology and Community Services
In the second activity, community members were asked to provide feedback on Phase 2 and Phase 3, which includes the Visual Arts & Technology (Phase 2) and Community Services spaces (Phase 3). Participants responded to the same guiding questions as in the first activity: what is working well and is exciting about the proposed designs, what aspects are not working or could be improved, and what creative ideas, such as new events, programs, or installations—could make these areas more vibrant and impactful.

This exercise allowed the community to reflect on future phases of development and share ideas that will help shape a cohesive, dynamic, and inclusive vision for the campus.

Overall, the meeting reflected strong community engagement and generated valuable input on both programming and site circulation. Community members expressed enthusiasm about seeing program placement within the proposed buildings and noted their appreciation for the phased approach, which allows for continuity of programs during construction. The discussion was lively and engaging, with particular interest around the café, the outdoor amphitheater, parking access, and pedestrian and bicycle circulation pathways. The feedback gathered informed refinement of the preferred concept plan. The full meeting summary is included on the project website37.

September 23, 2025 Parks and Recreation Commission Meeting On September 23, 202538, the Parks and Recreation Commission (PRC) received a presentation on the refined Cubberley Community Center Master Plan concept following the third and final community meeting held on September 17, 2025. Commissioners reviewed updates on program placement, phasing, and site circulation, and were asked 37 Community Meeting #3 Summary; www.paloalto.gov/files/assets/public/v/1/community- services/cubberley-project/2025.11.11_m3-summary.pdf
38 Staff Presentation, September 23, 2025;
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=efbb1418-4bbe-49b2-b786- 165e29017ca3
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to provide input on the same questions posed to the community: what is working well, what could be improved, and what creative ideas could enhance the campus experience.

Commissioners engaged in a thoughtful discussion that highlighted both enthusiasm for the project and areas for refinement. They praised Phase I improvements—especially the café, amphitheater, and integration with existing buildings—and noted strong community excitement about program continuity during construction. Key suggestions included lighting for the tennis courts, enhancing pedestrian and bicycle circulation, and incorporating creative placemaking features such as gardens and artistic infrastructure.

Concerns focused on the cost and feasibility of large-scale facilities (e.g., the partial underground parking), potential displacement impacts in Phase I, and how to communicate a phased plan if bond funding only covers the first phase. Commissioners also stressed sustainable design choices and raised questions about circulation, office space, gym design, and pool impacts.

Overall, the PRC expressed appreciation for the progress made and reinforced the importance of balancing community goals, funding realities, and long-term sustainability.

October 20, 2025 City Council Meeting
Staff presented an updated concept plan41 with an emphasis on the first phase of site development showing a combination of renovated and new building construction. The focus on the first phase recognizes that funding will likely be a limiting factor in full site redevelopment. At this meeting, staff shared objectives and themes for the second community poll to determine voter support for a bond or tax measure to finance the land purchase, and the extent of how much voters are willing to pay annually. Following the October 20 meeting the second poll was conducted.

December 15, 2025 City Council Meeting
City Council received an update on the Cubberley Community Center Project42, including results from the second community poll and discussed next steps. Council discussed key findings from Poll #2, which indicate broad voter support for the City acquiring the Cubberley property and willingness to invest in limited funding focused on basic repairs, safety upgrades, and accessibility improvements. Results showed relatively higher support for parcel tax and sales tax funding mechanisms, with a $250 average annual parcel tax testing above 50% support and a 0.5% sales tax increase capable of supporting significantly greater capital financing, pending state authorization. 41 City Council, October 20,2025; Agenda Item #1; SR #2503-4353, https://portal.laserfiche.com/Portal/DocView.aspx?id=231071&repo=r-704298fc 42 City Council, December 15, 2025; Agenda Item #3; SR #2503-4355, https://portal.laserfiche.com/Portal/DocView.aspx?id=246305&repo=r-704298fc Item 13
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Council expressed alignment with staff and the Ad Hoc Committee’s recommendation to continue refining ballot measure options and to launch a third poll in January 2026 to further test potential parcel tax and sales tax scenarios.

Overall, Council affirmed the importance of a phased, long-term approach to redevelopment that balances community priorities, funding realities, and opportunities for partner contributions, while continuing to advance the master plan toward presentation in March 2026. Following the December 15 meeting, the third poll was finalized and released in early January 2026.

February 9, 2026 City Council Meeting
City Council received an update on the Cubberley Community Center Project45, including results from the third community poll and progress on public-private partnerships to advance key components of the project. Staff shared that, in anticipation of possible Council consideration of a November 2026 ballot measure to fund the purchase of seven acres from PAUSD and advance all or portions of the project, three of four planned community polls have been completed. Results show both parcel tax and sales tax funding options testing at approximately 48% support—an improvement from the prior poll, though still below the thresholds required for approval (two-thirds for a parcel tax and a simple majority for a general-purpose sales tax). Despite these challenges, Councilmembers remained optimistic, noting that support levels are approaching viability, particularly for a sales tax option, and that emerging public-private partnerships could strengthen the overall funding strategy.

Council also discussed partnership efforts being coordinated by staff and the Cubberley Ad Hoc Committee. A partnership with TheatreWorks was presented and would create a two-theater complex through renovation of the existing Community Theatre and Pavilion, with new construction to support TheatreWorks, and upgrades to the Cubberley Theatre for continued community use, including new restrooms, an expanded lobby, and improved accessibility. Staff recommended approval of a Letter of Intent with TheatreWorks to formalize this joint commitment, which Council approved. In addition, staff shared that the Friends of the Recreation and Wellness Center and the City are continuing to develop terms for an agreement to advance a future recreation and wellness center with new multi-court gymnasium space on the Cubberley campus.

Avenidas Executive Director, Kristina Lugo, was also in attendance and publicly 45 City Council, February 9, 2026; Agenda Item #11; SR#2512-5774, https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=fd6f9939-83a3-4ea7-817a- e7719c9194a4
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expressed interest in exploring partnership opportunities with the City at the Cubberley site.

Council directed staff to develop Poll #4 to include information about the two major anchor tenants, explore community sentiment around expanding City programs at Cubberley, and provide clearer messaging about community benefits and funding strategies. Council also directed the City Manager to discuss contingency plans and alternative acquisition terms with the School District, and asked staff to return with options for acquiring the seven acres through mechanisms other than a ballot measure.

March 11, 2026 Planning and Transportation Commission and Architectural Review Board Special Joint Meeting
The Planning and Transportation Commission (PTC) and Architectural Review Board (ARB) held a special joint meeting to receive a presentation from staff47 on the proposed Cubberley Conceptual Master Plan and the Draft Initial Study/Mitigated Negative Declaration (IS/MND) prepared under the California Environmental Quality Act (CEQA).

Staff presented the City’s long-term vision to redevelop approximately 15 acres of the Cubberley campus, including the potential purchase of seven acres from the Palo Alto Unified School District (PAUSD) for $65.5 million. Staff noted that the purchase and implementation of the plan will depend on identifying funding sources, which may include a potential sales tax ballot measure in November 2026, development impact fees, grants, philanthropic contributions, and public-private partnerships.

Staff requested that the commissions review the Draft IS/MND and provide a recommendation to the City Council regarding adoption of the Conceptual Master Plan.

City Council is tentatively scheduled to consider adoption of the plan in April 2026, while staff continue advancing environmental review, partnership discussions, and funding and financing strategies.

Commissioners and Board members discussed topics including project phasing and funding, the status of the PAUSD lease and land acquisition, parking and circulation, recreation facilities such as the proposed pool, sustainability goals, long-term campus connectivity, elements of the site layout, the potential renovation versus replacement of existing buildings, and opportunities for philanthropic funding. Following discussion and public comment, both the Planning & Transportation Commission and Architectural Review Board voted separately, and unanimously (5–0) to recommend that City Council adopt the Cubberley Conceptual Master Plan, with a list of considerations for Council 47 Staff Presentation, March 11, 2026;
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=c9289f37-122b-455b-959c- febb294cc3c1
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and staff to evaluate as the project moves forward into future phases of planning and design. Below are the approved motions:

Architectural Review Board:

Moved by Board member Rosenberg, seconded by Board member Jojarth to move the staff recommendation and to recommend that City Council consider the following:
- Consider competition friendly pool size of 50 meters by 25 yards - Consider the phasing within Phase 1
- Revisit the cost effectiveness of buildings S, T, V, E, F, C, D - Consider the value of saving Building I, versus reutilizing that space as part of another program
- To review bike and pedestrian routes including the intent and use of the diagonal promenade as well as defining the existing safe routes to school on the property - To clarify that the City lease agreements with PAUSD provide flexibility to the City to make parking improvements including landscaping and paving and have a sufficient duration to adequately provide access to the improvements contemplated in the Master Plan
- Modify the preface and executive summary to include language from page 52 about flexibility and to add the words modern, safe, and sustainable to the project goals
- To encourage a formal process to raise funding from private sources - Review adequacy of parking
Planning and Transportation Commission:

Moved by Commissioner Templeton, seconded by Commissioner Chang to move the staff recommendation and to recommend that City Council consider the following:
- Consider competition friendly pool size of 50 meters by 25 yards - Revisit the cost effectiveness of buildings S, T, V, E, F, C, D - To review bike and pedestrian routes including the diagonal promenade and the existing safe routes to school on the property
- To clarify that the City lease agreements with PAUSD provide flexibility to the City to make parking improvements including landscaping and paving and have a sufficient duration to adequately provide access to the improvements contemplated in the Master Plan
- Modify the preface and executive summary to include language from page 52 about flexibility and to add the words modern, safe, and sustainable to the project goals
- To encourage a formal process to raise funding from private sources Item 13
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March 24, 2026 Parks and Recreation Commission Meeting
The Parks and Recreation Commission received a presentation from staff49 on the proposed Cubberley Conceptual Master Plan and the Draft Initial Study/Mitigated Negative Declaration (IS/MND) prepared under the California Environmental Quality Act (CEQA), and results of the second and third community polls. Staff presented the City’s long-term vision to redevelop approximately 15 acres of the Cubberley campus, including the potential purchase of seven acres from the Palo Alto Unified School District (PAUSD) for $65.5 million. Staff noted that the purchase and implementation of the plan will depend on identifying funding sources, which may include a potential parcel or sales tax ballot measure in November 2026, development impact fees, grants, philanthropic contributions, and public-private partnerships.

Staff requested that the commission review and consider the Draft IS/MND and provide a recommendation to the City Council regarding adoption of the Conceptual Master Plan. City Council is scheduled to consider adoption of the plan in April 2026, while staff continue advancing environmental review, partnership discussions, and funding and financing strategies.

Commissioners expressed strong appreciation for the work completed to date and shared overall excitement about the vision and direction of the project. Discussion included the use of a Mitigated Negative Declaration under CEQA and the level of detail at the conceptual stage, particularly related to architectural and landscape design, including tree preservation and future planting strategies. The Commission also considered key program elements such as recreation amenities and amphitheater capacity, as well as project phasing, funding flexibility, and timelines tied to land acquisition and partnership opportunities. Commissioners also discussed construction impacts on existing operations and opportunities to support the project through grants, partnerships, and continued community engagement and activation efforts. Following discussion and public comment, Commissioner Smith made a motion to approve, it was seconded by Vice Chair Wei, and the vote passed (5–0) with 1 commissioner choosing to abstain. Below is the approved motion:
Motion: Recommend that City Council adopt the Cubberley Conceptual Master Plan
Moved by: Commissioner Smith
49 Staff Presentation, March 24, 2026;
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=247caade-d1e4-47ca-b8e1- bc3f8694739e
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Seconded by: Vice Chair Wei
Vote: 5–0, with 1 abstention
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CITY COUNCIL
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: May 18, 2026
Report #: 2604-6318
TITLE
Update Regarding the Builder’s Remedy Project at 156 California Avenue and Consideration of Adding Lot B (APN 124-28-003) Associated with the Development to the City’s Housing Element Sites Inventory.

RECOMMENDATION
The 156 California Avenue Ad Hoc Committee recommends that the City Council consider directing the Planning and Development Services Director to add Lot B (APN 124-28-003) to the Housing Element Sites Inventory.

EXECUTIVE SUMMARY
This report provides an update on the proposed Builder's Remedy mixed-use development at 156 California Avenue and presents an alternative concept for City Council consideration to the originally filed application. The City Council’s action to add Lot B to the Housing Element Sites Inventory, or not, likely determines which project will move forward. The original project, filed by Redco Development under California Government Code Section 65589.5(d)(5), proposes 382 residential units (20 percent affordable) across three integrated structures with a maximum height of 177 feet. Following a threat of litigation, the City Council’s Ad Hoc committee, comprised of Vice Mayor Stone and Councilmember Lauing, engaged in negotiations with the applicant, resulting in a revised conceptual project consisting of three towers with 390 residential units (50 affordable, or 13 percent) and a maximum height of 144 feet.

On May 4, 2026, the City Council authorized staff to enter into a settlement agreement with the applicant to resolve the threatened litigation and set forth a process for public consideration of the revised conceptual project. The agreement between the City and the applicant represents a conditional release of claims and does not predetermine any Council action or project outcome.

The Council’s decision on whether to add Lot B to the Housing Element Sites Inventory will signal its interest in pursuing the revised project; if the Council declines, the applicant would likely proceed with the originally filed application.

BACKGROUND
In March 2023, Redco Development submitted an SB 330 Preliminary Application establishing vesting rights under the Housing Accountability Act for a Builder's Remedy project. A formal Major Architectural Review application was filed in April 2024 that is substantially consistent with Item 14
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the Preliminary Application in scope, unit count, building configuration, and affordability commitment. A Tentative Parcel Map application for a vertical airspace subdivision was filed in August 2024.

The filed application proposes a mixed-use, multifamily development on two lots totaling approximately 1.43 acres at 156 California Avenue (Lot A, 1.14 acres) and Park Boulevard (Lot B,

0.29 acres). Both lots are within the CC(2)(R) Community Commercial (Retail) zoning district. The site is currently developed with a Mollie Stone's Market grocery store and surface parking lot.

As proposed, the filed project consists of three integrated structures: a seven-story podium building at 77 feet that includes approximately 14,709 square feet of ground-floor commercial space dedicated to a relocated Mollie Stone's grocery store and 112 residential units; a 17-story tower (Tower A) at 177 feet with approximately 3,317 square feet of commercial space and 192 residential units; and an 11-story tower (Tower B) at 120 feet with approximately 1,423 square feet of commercial space and 78 residential units. The project includes 382 total residential units, of which 77 (20 percent) are proposed to be affordable, consistent with the affordability threshold required under Government Code Section 65589.5(d)(5). Vehicle parking totals 290 stalls, and 400 bicycle parking spaces are proposed.

Following a threat of litigation by the applicant, then Mayor Lauing established the 156 California Avenue Ad Hoc committee consisting of himself and current Vice Mayor Stone to determine whether a negotiated outcome could be reached that addressed the interests of both parties.

Following several meetings with the applicant and separate closed sessions of the City Council to discuss the threatened litigation and explore potential resolution options, a final concept project was presented to the City Council for consideration on May 4, 2026. During the closed session, the Council directed the City Attorney to enter into an agreement with the applicant to release claims arising from the threatened litigation and to document the conceptual project development parameters and the negotiated terms. The agreement does not predetermine any Council action or project outcome. The City Council further directed the City Manager to schedule this report to inform and engage the public of the revised concept plan and to summarize the terms of the agreement.

Revised Concept Project
The negotiated alternative concept consists of three towers totaling 390 residential units on the same two lots and reduces the overall development from 17 stories to 14 stories. Tower 1, located on the California Avenue site (Lot A), is 12 stories and 124 feet in height and includes 116 residential units and a 15,260 square foot grocery store on the ground floor. Tower 2, also on Lot A, is 14 stories and 144 feet in height and includes 170 residential units, with a bar/restaurant use on the top (14th) floor. Tower 3, located on the Park Boulevard site (Lot B), is 12 stories and 129 feet in height and includes 104 residential units. Of the 390 total units, 50 units (13 percent of the base density) are designated affordable. Residential density is approximately 272 dwelling units per acre across the two sites. The project provides 266 total parking stalls, including 200 residential stalls (187 on Lot A and 13 on Lot B) and 66 commercial stalls on Lot A.

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Comparison of Original Project and Revised Concept
The following table compares key parameters of the original Builder's Remedy 1.0 application to the revised Builder's Remedy 2.0 concept. Project plans for the original project and revised concept proposal are available online.1
Category BR 1.0 (Original Application) BR 2.0 (Revised Concept) Change Configuration Two towers and a podium Three towers -
Stories 17 / 11 / 7 (podium) 12 / 14 / 12 -
Maximum height 177 feet 144 feet -33 ft
Site area 1.436 acres 1.436 acres -
Total residential units 382 390 +8
Affordable (BMR) units 78 (20%) 50 (13%) -28
Market-rate units 304 340 +36
Density (combined,
DU/acre)
267.1 271.6 +4.5
Development impact fees
(see Fiscal Impact section)
Full payment required Exempt the 50 BMR units; fees
for Public Art not on-site paid
to Affordable Housing Fund
-
Grocery store 14,519 SF 15,260 SF +741 SF
Bar/restaurant 2,570 SF (Level 17, Tower A) Level 14, Tower 2 - Retail 1,624 SF None -1,624 SF
Proposed parking stalls 290 266 -24
Term Sheet Summary
The terms of the agreement between the City and the applicant require the City to consider adding Lot B to the Housing Element Sites Inventory, which would enable the applicant to process the revised project as a Builder's Remedy 2.0 project in accordance with Government Code Section 65589.5 enacted by AB 1893 (2024). This law reduces the minimum affordability requirement from 20 percent to 13 percent of total units and establishes new objective standards governing project density, height, and other development parameters. The action to list the parcel on the inventory must occur within 45 days of the signed agreement. If the City Council acts to direct staff to add Lot B to the Housing Element Sites Inventory, it is signaling its support to process the alternative project under the agreement for the revised Builder's Remedy 2.0 1 View the Original Project (Builder’s Remedy 1.0) plans and revised conceptual project (Builder’s Remedy 2.0) at:
https://www.paloalto.gov/Departments/Planning-Development-Services/Current-Planning/Projects/156- California-Avenue.

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project, and the City would have approximately 60 to 90 days to act on the project after the application is deemed complete. In accordance with state law (AB 130), the project would be statutorily exempt from environmental review under the California Environmental Quality Act (CEQA) as an urban infill housing development project.

Additionally, the City would consider a request to exempt the 50 inclusionary units from development impact fees, consistent with the City's existing approach to impact fees in the El Camino Real Focus Area; the applicant would pay all other applicable development impact fees.

The public art requirement would be partially satisfied by on-site art, with the remainder paid into the City's Affordable Housing Fund rather than the Public Art Fund. The City commits to expedited application processing, including a courtesy review by the Architectural Review Board prior to final action by the City Council.

The project would require approval of a Major Architectural Review Permit and a Tentative Subdivision Map, if the applicant elects to pursue an airspace subdivision. The applicant is expected to utilize provisions of the State Density Bonus Law to request a concession permitting the inclusionary units to be located on Levels 1 through 10, rather than distributed throughout the development.

All timelines related to the original application would be tolled until the city acts on the revised project.

Alternatively, the agreement also provides that if the City fails to perform certain actions – including, for example, a failure to add Lot B to the Housing Element Sites Inventory – and the applicant subsequently reverts to the original builder’s remedy project, the City would agree not to contest the use of the urban infill housing CEQA exemption established by AB 130 (2025) for the original builder’s remedy project. In that scenario, the City would have a similarly constrained time to take final action on the original project (60-90 days after the project is reactivated).

ANALYSIS
The purpose of this report is threefold. First, it informs the public of the results of a good-faith negotiation between the City and the applicant to resolve a legal dispute and presents an alternative development option for community awareness and Council consideration. Second, it invites public input to help inform the City Council’s decision on weighing the two project options. Third, it presents for Council consideration the question of whether to add Lot B to the Housing Element Sites Inventory, an action that would signal the Council’s interest in pursuing the alternative concept project and would enable the applicant to pursue its project under Builder’s Remedy 2.0. If the Council does not take this action, the applicant would likely proceed with the original project. There is no predetermined outcome as result of the negotiation and the Council is encouraged to weigh public input alongside the merits of each alternative.

If the Council votes to add Lot B to the inventory, the applicant would have up to 120 days to file revised application materials. The project would be presented to the Architectural Review Board for a courtesy review, and the applicant, to the extent feasible, would incorporate feedback Item 14
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received from the Board. The project would then be presented to the City Council for final action with findings and conditions of approval.

Under Government Code Section 65589.5, the City Council may only deny a qualifying Builder's Remedy project if it makes written findings, supported by a preponderance of the evidence on the record, that the project would have a specific, adverse impact upon public health or safety and that there is no feasible method to satisfactorily mitigate or avoid that impact other than disapproval of the project. Absent such a finding, either builder’s remedy project must be approved.

FISCAL/RESOURCE IMPACT
The recommendation in this report has no direct fiscal impact. However, the projects described herein are estimated to generate approximately $15.8 million (original project) or $14.1 million (revised project) in development impact fees to support city services and future affordable housing development. For the revised project, the developer would fund an on-site public art installation at an estimated cost of $500,000; the remaining balance of approximately $1.5 million in public art impact fees would be directed to the City's Affordable Housing Fund rather than the Public Art Fund, pursuant to the agreement. These fee estimates are preliminary and subject to change when more project details are known, and payment may be deferred to project completion.

STAKEHOLDER ENGAGEMENT
Internal coordination with applicable City staff and departments has occurred throughout the negotiation process and in preparation of this report. The City Council Ad Hoc subcommittee held several meetings with the applicant between August 2025 and February 2026 to develop the negotiated terms summarized herein. Notice of this meeting was published on May 7, 2026, providing 11 days of public notice in advance of the May 18, 2026 meeting. Members of the public will have the opportunity to provide comments at the meeting or email feedback directly to the City Council.

ENVIRONMENTAL REVIEW
The action recommended in this report (direction to add Lot B to the Housing Element Suitable Sites Inventory) is exempt from CEQA under the “common sense” exemption set forth in CEQA Guidelines Section 15061(b)(3). The recommended action is administrative in nature, does not authorize any physical change to the environment, does not redesignate or rezone the property, and does not entitle any specific development. It can be seen with certainty that there is no possibility that the action will have a significant effect on the environment. Any subsequent housing development project filed for the site will be evaluated for the appropriate level of environmental review at the time of application, which may include the statutory urban infill housing exemption established by AB 130 (2025).

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ATTACHMENTS
Attachment A: Project Renderings of Builder's Remedy 1.0 and 2.0 Projects APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 14
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3 Builder’s Remedy 2.0 Project – Viewed from California Avenue Item 14
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CITY COUNCIL
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: May 18, 2026
Report #: 2603-6113
TITLE
FIRST READING: Adoption of an Ordinance to Amend Various Sections of Title 16 (Building Regulations) and Title 18 (Zoning) of the Palo Alto Municipal Code to Implement Retail Vitality Policies in the Comprehensive Plan, including changes to the Zoning Map for parcels zoned CN(GF). CEQA Status: The Ordinance is Consistent with and Represents Implementation of Adopted Policies in the Comprehensive Plan, for Which an Environmental Impact Report (Comprehensive Plan EIR) was Certified on February 5, 2016.

RECOMMENDATION
Staff recommends that the City Council adopt an ordinance to amend various sections of Titles 16 and 18 of the Palo Alto Municipal Code (PAMC) (Attachment A) to implement retail vitality measures related to Comprehensive Plan policies and the City Council's 2025 Enhance Business Vibrancy Priority.

EXECUTIVE SUMMARY
The draft ordinance in Attachment A builds on retail conditions and strategies considered in 2023 and 2024, and an interim retail ordinance adopted in December 2024. Approval of this updated ordinance is intended to:
Codify interim ordinance provisions;
Address other topics raised by the City Council in November 2024 while considering the interim ordinance (such as expanding retail-like and office uses, and considering amendments to the retail preservation ordinance);
Allow a broader range of retail and other commercial uses; Reduce confusion from overlapping/conflicting regulations; Rename the Conditional Use Permit to Administrative Use Permit to better reflect the current permit process;
Add standard conditions for specific uses and remove overly subjective findings; Streamline parking requirements and permit approvals;
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Reduce ground-floor vacancies; and
Encourage vibrancy in the City’s commercial areas; including Downtown and California Avenue.

Amendments to the zoning code are shown as underlined/strikeout in Attachment A.

Annotations in the margin guide the reader to the rationale behind substantive changes. The analysis section summarizes key topics addressed in the draft ordinance.

BACKGROUND
The current ordinance is the culmination of multiple sequential efforts.

Previous Work Effort
In 2023 and 2024, the City engaged commercial retail consultants to analyze the retail market and develop a retail zoning strategy. Streetsense prepared a comprehensive economic development strategy report in June 2023. Subsequently, Michael Baker International conducted local outreach, review of peer city initiatives and other policies to identify land use regulations that would support a more robust retail environment. This work effort culminated in a retail revitalization study in May 2024 and series of zoning amendment options in August 2024.

On September 18, 2024,1 the City Council Retail Committee reviewed the final retail revitalization study and provided direction to staff on several zoning amendments that should be implemented immediately to support retail and retail-like uses in the City.

Recommendations included ways to streamline retail zoning regulations, increase flexibility in permitted land uses, and update parking policies to meet current needs. Although the PTC had held six hearings on the Retail Study (in addition to four meetings of the PTC retail ad hoc committee), the PTC had not yet considered or recommended specific zoning amendments. In the interest of time, the City Council therefore adopted an interim ordinance to adopt the following amendments identified by the City Council Retail Committee:
Modifying the formula retail definition to allow for larger enterprises; Increasing flexibility for “retail-like” uses and expanding permissible uses for ground floor spaces, including personal services, allowances for pet grooming, financial institutions, and automobile showrooms; and
Replacing the high threshold required for waivers and adjustments to meeting use regulations.
1 City Council Retail Committee September 18, 2024 agenda:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14946; staff report and attachments:
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=5833&meetingTemplateType=2&comp iledMeetingDocumentId=11747
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These amendments were adopted on November 18, 2024 (first reading) and December 16, 2024 (second reading),3 and will remain effective until December 31, 2026, or upon adoption of a replacement ordinance.

Current Work Effort
This current work effort aims to replace the interim ordinance with codified amendments and support the 2026 Council priority to Enhance Business Vibrancy. The ordinance also aims to address topics discussed by the City Council during consideration of the interim ordinance in November 2024 and identified by staff based on issues that have come up in discussions with potential tenants and as part of permit applications:
Pedestrian-Orientation: Continue to refine the definition of retail-like land uses to establish a performance-based criteria that promotes pedestrian activity in commercial areas (e.g., for medical office uses such as ophthalmologists that have a glasses sales component);
Expanded Uses: Expand the range of permitted uses allowable in the Ground Floor (GF) and Retail (R) combining districts, and include standards to allow non-retail like uses in certain circumstances;
Retail Preservation Ordinance: Review and recommend whether to amend retail preservation ordinance and evaluate changes to the geographic extent or applicability; Allowed Office Uses in Rear: Consider allowing office or other uses in the rear portion of deep commercial suites, or locations that are accessed off of side streets or alleys; Planned Communities: Allow Director authority to interpret list of allowed uses in commercial Planned Community zones that allow "retail" to allow some of these "retail- like" uses; and
Pet-Related Uses: Consider where pet grooming, cat cafes, and pet stores should be allowed, and whether any of these uses are considered overnight "boarding" and therefore only allowed in a few zones.

This ordinance is still a focused effort to address major issues and commonly occurring uses.

Additional amendments may be warranted in the longer term through the comprehensive zoning code update.
3 City Council December 16, 2024 agenda:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14537; staff report and attachments:
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=6659&meetingTemplateType=2&comp iledMeetingDocumentId=12596
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PTC & Council Retail Committee Review
On October 29, 2025, the PTC held a Study Session to review options and recommendations for a permanent retail ordinance and to provide feedback to staff on preparing a permanent ordinance to replace the interim ordinance.

On January 22, 2026, the Council Retail Committee—composed of Keith Reckdahl, Pat Burt, and Julie Lythcott-Haims)—held a Study Session to review recommendations for a permanent ordinance, including the PTC’s feedback. The Retail Committee supported many of the recommendations put forward by City staff and supported by the PTC and had the following additional comments:
Consider allowing bars (without food), but with limitations or conditions, and an entertainment zone on California Avenue.
Enforce transparency and other design standards to ensure that all ground-floor uses are activated, including medical offices or personal services uses. Add ground-floor flexibility by allowing offices in certain locations if they are neighborhood-serving.
Consider more blended parking rates.
Avoid merging of retail and retail-like use categories. Limit changes to the Retail Preservation regulations to potential exemptions for multifamily residential and office/manufacturing zones.

Staff and consultants addressed these comments and integrated these ideas into the draft ordinance in Attachment A.

On March 25, 2026, the PTC considered a draft retail vibrancy ordinance, and recommended unanimously that the City Council adopt the ordinance. A summary of the discussion, areas of concern, and topics deferred to the City Council are as follows. The PTC was generally supportive of the draft regulations including expanded uses, such as bars; and permit streamlining, such as allowing certain uses by right and replacing subjective findings with objective regulations and standard conditions. The PTC discussed at length the ways that medical office, including hybrid medical/retail/personal service uses, could be regulated on University and California Avenues. The PTC ultimately deferred to the City Council to make this determination, asking the Council to clarify which types of medical office uses are appropriate on these key retail corridors. See Analysis section below for further details. The PTC suggested modifications that could be addressed by the staff in the revision of the ordinance prepared for the City Council, herein, regarding topics such as parking, fees, PC zones, and retail preservation regulations. These comments, staff responses, and changes to the draft ordinance in response to these comments are summarized in Attachment F.

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ANALYSIS
The draft ordinance, including amendments to the zoning code shown as underlined/strikeout is provided as Attachment A. A summary of the draft ordinance is provided in Attachment B.

The discussion below analyzes the key themes addressed in the ordinance.

Eating and Drinking Services
The draft ordinance modifies how eating and drinking uses are regulated to reflect contemporary uses, expand potential revenue sources, and streamline review and approvals.

Currently, the Zoning Ordinance includes one explicit eating and drinking classification. In practice, staff interpret food service uses with limited seating (e.g., ice cream shop) as “intensive retail service.” Because this is not an intuitive use classification for potential retailers, it results in confusion and uncertainty. However, this use classification allows for a lower and more appropriate parking ratio compared to the eating and drinking service classification that regulates restaurants with seating and full kitchens. Additionally, the current Zoning Ordinance does not contemplate stand-alone bars—such uses must include food service that generates at least 50% of its sales.

The draft ordinance creates three use classifications to reflect the different levels of potential impact of each use and a parking standard that better aligns supply and demand. Table 1 summarizes the three definitions. To address potential noise and other impacts associated with the new bar use classification (or other uses with alcohol sales or service), the draft ordinance expands operational conditional regulations and requires a CUP to regulate hours and other site-specific conditions.

Table 1: Proposed Eating and Drinking Use Classifications Use
Classification Description Examples Locations
Eating and
drinking, full
service
Refine existing definition to capture
restaurants with table service and
seating.

Sit-down
restaurant
All
commercial
districts
Eating and
drinking,
limited service
Create new definition to capture quick
service food that's ready to eat within 15
minutes. Currently, such uses are
interpreted as “intensive retail service”
which is not an intuitive use classification
for potential retailers.

Deli, coffee
shop, ice
cream shop,
fast casual
salads
All
commercial
districts
Bars Create new definition to capture bars
with no or limited food service
Wine bar,
cocktail bar,
beer garden

CD(C), CC,
CC(2), CS, -R,
-GF, NV-MXH
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The draft ordinance also removes “take out” as a separate use classification acknowledging that most eating and drinking uses include take out.

Medical Offices and Medical-Related Personal and Retail Services Currently, Palo Alto’s zoning ordinance allows medical office in most commercial zones, but prohibits it in the most desirable retail areas on California and University Avenues, as shown in Table 2.

Table 2: Ground-Floor Medical Office Permitted Uses, by District (Current Zoning Regulations) Zoning District/Location <5,000 sq. ft. 5,000+ sq. ft.

Midtown CUP* XCN Elsewhere P CUP
-R Combining District
(California Ave.) X XCC, CC(2)
Elsewhere P CUP
-GF Combining District
(University Ave.) X XCD(C), CD(N), CD(S)
Elsewhere P X

CS P CUP

NV-MXL, NV-MXM, NV-MXH P X
Legend: P = Permitted; CUP = Conditional Use Permit; X = Not Permitted * Midtown has conflicting regulations. While the CN regulations allow medical office with a CUP up to 2,500 sq. ft., the applicable -GF regulations prohibit medical office uses in Midtown.

As the health and wellness industry expands regionally and nation-wide, there has been an increase in hybrid uses, such as medical spas, botox providers, body scans, and IV lounges, that do not fit neatly into the City’s definition for medical office5 or personal services.6 However, 5 PAMC 18.04.030(95): “Medical office” means a use providing consultation, diagnosis, therapeutic, preventive, or corrective personal treatment services by doctors, dentists, medical and dental laboratories, and similar practitioners of medical and healing arts for humans, licensed for such practice by the state of California. Incidental medical and/or dental research within the office is considered part of the office use, where it supports the on-site patient services...
6 PAMC 18.04.030(114) “Personal service” means a use providing services of a personal convenience nature, and cleaning, repair or sales incidental thereto, including:
(A) Beauty shops, nail salons, day spas, and barbershops; (B) Self-service laundry and cleaning services....
(C) Repair and fitting of clothes, shoes, and personal accessories; (D) Quick printing and copying services where printing or copying for the particular service is done on site, so long as no quick printing or copying for any off-site printing or copying service is done on the same site; (E) Internet and other consumer electronics services; (F) Film, data and video processing shops, including shops where processing for the particular shop is done on site, so long as no processing for any other shop is done on the same site; (G) Art, dance or music studios intended for an individual or small group of persons in a class (see “commercial recreation” for other activities); and
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(H) Fitness and exercise studios, or similar uses, in a space having 5,000 square feet or fewer of gross floor area (see “commercial recreation” for uses exceeding 5,000 square feet). (I) Learning centers intended for individual or small group settings, including tutoring, standardized test preparation, language classes, after-school programs, cooking classes, and similar uses.

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generally, most of these uses are likely to fall under the category of “medical office” if they require a license by the State.

Both the PTC and Council Retail Committee have expressed interest in allowing these types of hybrid uses on California and University Avenues — to the extent that they look and feel like retail (e.g., have transparency into windows, allow some walk-in clientele, incorporate retail sales) and do not proliferate to the point that they overtake other retail, services, and restaurants, and change the character of a district.

Table 3 explores different ways that the City could regulate medical offices, and their relative benefits and drawbacks, such as staff resources, tenant attraction, code enforcement, and revenue generation.

The draft ordinance proposes to expand locations where medical office is permitted to include the R and GF Combining Districts (i.e., California and University Avenues), regulate design, and require a retail component. This would allow certain uses, such as optometrists with eye glass sales, but not traditional doctors’ offices.

Table 3: Options for Regulating Medical Office Uses, Benefits and Drawbacks Potential
Regulation Benefit Drawback In Draft Ordinance?
Allow medical
office by right.
Streamlines review and
approval
May lead to less
desirable uses that
could detract from
retail vibrancy
Yes, in certain
locations (see Table 2)
Allow medical
office with CUP.
Provides opportunity to
apply specific
conditions (e.g., design,
hours)
Adds time for
tenants and staff
resources
Yes, in certain
locations (e.g.,
Charleston, Midtown,
Town & Country,
Downtown)
Define specific
desired medical-
related uses.
Creates more clarity in
the code
May quickly become
out of date as new
uses and
unanticipated uses
arise
No
Establish quotas. Prevents one use from
overtaking a location
Requires staff
resources to track
Creates uncertainty
for retailers
No
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Potential
Regulation Benefit Drawback In Draft Ordinance?
Regulate design. Ensures that tenant
space looks like retail
(e.g., require customer-
facing counter or retail
facing street; waiting
areas and treatment
areas in rear)
May require
monitoring/code
enforcement
Yes
Require retail
sales component.
Creates visual interest
and revenue
generation
Attracts potential walk-
in customers
May generate token
retail uses
May require
monitoring/code
enforcement
Yes, when fronting
University and
California Avenues
Require personal
services
component.
Allows flexibility to
expand medical office
to more hybrid use
types (e.g., body scans)
May lead to less
desirable uses that
could detract from
retail vibrancy
No
Expanding Permitted Uses
The draft ordinance expands permitted and conditionally permitted uses across commercial districts to reduce vacancies, improve retail vitality, and increase revenue generation.

Specifically, this includes the following changes to the draft ordinance:

Neighborhood-Serving Offices. Allow neighborhood-serving offices9 in Downtown and the California Avenue areas, but only fronting side streets or in the rear of retail spaces. Offices would not be permitted within the first 40 to 50 feet of the building frontage on California and University Avenues, respectively. Allowing non-retail uses in the rear of buildings and on side and parallel streets adds flexibility in the broader commercial districts and could help reduce vacancies in larger tenant spaces, older buildings, and historic buildings. The public comment in Attachment E highlights how historic buildings Downtown with unique architectural features that provide identity to Palo Alto are not always conducive to 100% ground-floor retail. At the 9 PAMC 18.14.040(e) "Neighborhood-serving offices" are medical offices, professional offices, travel agencies, and insurance agencies that fit the definition of a neighborhood-serving use. (f) A "Neighborhood Serving Use" is a use that primarily serves individual consumers and households, not businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, rather than the provider of the goods or services traveling off- site.

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same time, this provision aims to narrow office prohibitions to focus on California and University Avenues only where retail and retail-like uses are preferred.

Animal Care. Split the current “animal care” definition into two use classifications, based on impact (e.g., noise, odors), to acknowledge that use regulations already distinguish between “animal care, excluding boarding and kennels” and “boarding and kennels” and allow these uses in appropriate locations with appropriate permit levels (i.e., permitted by right vs conditionally permitted). The draft ordinance also creates new standards in PAMC Section

18.42.130 (Animal Care) to prevent potential negative impacts.

Permit Levels. Modify permit levels (i.e., Permitted by right vs. CUP) to streamline review and approval of uses that do not generate substantial impacts. For example, the draft ordinance allows fitness studios by right up to 5,000 sq. ft. in the GF district (vs. up to 3,000 sq. ft. currently), but requires a CUP for spaces 5,000 sq. ft. or more. This modest shift would allow more flexibility for fitness uses in the mid-size range of tenant sizes, reserving the expanded CUP process for larger tenants.

Similar Uses in PC Zones. Allow Planning and Development Services Director authority to interpret list of allowed uses in commercial PCs and allow "similar" uses, defined as uses that have:
Similar impacts on the neighborhood such as traffic generation, deliveries, noise, and lighting as listed uses; and
Similar characteristics such as building type, site arrangement, floor area, number of employees, indoor and/or outdoor uses, customer traffic, equipment use, hours of operation, parking, vehicle trips and signage as listed uses.

Uses that are identified as part of the community benefit in a PC (e.g., grocery store) would not be subject to this provision.

Waivers, Exceptions, Findings. Given these more expanded use allowances, conditions, and design criteria, the draft ordinance proposes to remove waivers, adjustments, and overly subjective findings from the -GF and -R combining district regulations, that create uncertainty for potential tenants and require more staff resources.

Streamline Use Regulations (Example: Midtown and Charleston Shopping Centers) Regulations pertaining to the Charleston and Midtown Shopping Centers exemplify some of the complexity of the Zoning Ordinance. Commercial use regulations are located in many sections of the code, which can create confusion for brokers and retailers trying to understand the rules.

As shown in Attachment C, in the Charleston and Midtown Shopping Centers, potential tenants must review four separate code sections (CN district use regulations, CN district tenant size regulations, Charleston and Midtown use regulations, and Ground Floor (GF) use regulations) to identify which uses are permitted and at what sizes, only to find out that the GF use regulations supersede the other regulations. This results in extensive and inconsistent regulations, creating confusion and frustration for applicants, staff, community members and decision-makers.

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The draft ordinance proposes to remove the GF combining district and use the base district use regulations for the CN district (Table 1 in Chapter 18.16) to regulate these neighborhood shopping centers. The addition of footnotes allows for modified standards specific to these locations.

Administrative Use Permits (AUP) vs. Conditional Use Permits (CUP) In many communities, CUPs are required to be reviewed at a public hearing by a decision-body such as a planning commission. Administrative Use Permits (AUPs) are the term of art for permits that are reviewed and approved by the City staff. In Palo Alto, however, CUPs are a Director decision that may only be heard by the PTC (and subsequently the City Council) upon appeal or as elevated by the Director. In practice, most CUPs in Palo Alto do not rise to the level of public hearing by the PTC. This CUP term may be unnecessarily warding off potential tenants who are not familiar with the City’s processes.

The draft ordinance proposes to change all references of Conditional Use Permit or CUP, to Administrative Use Permit or AUP to better reflect the administrative nature of this permit process and send a signal to potential tenants that the permitting process is not necessarily onerous or lengthy. The discussion above and draft ordinance continue to use the term CUP, consistent with current usage, but all references are proposed to be replaced with the new term through Section 2 of the Draft Ordinance (Attachment A).

Retail Preservation Ordinance
The Retail Preservation Ordinance currently applies to all zoning districts that allow retail as a permitted or conditional use, as shown in Attachment D. Therefore, to the extent that any retail is located in a RM-30 or RM-40 zoning district or an office/industrial district (e.g., GM, ROLM), it would need to be replaced following redevelopment of a site.

Attachment D also illustrates zones where ground-floor retail is required, separate from Retail Preservation requirements. To proactively plan for retail where it is most desired, the City may want to consider strengthening retail requirements where retail can be most successful and allowing more flexibility outside these locations.

As an interim strategy, the draft ordinance proposes to exempt the following locations from the retail preservation ordinance:

1. Residential zones: RM-30, RM-40, NV-R3, and NV-R4
a. There are at least two sites where retail preservation regulations would need to be enforced in the event of a redevelopment project. In order to develop multifamily housing, a project would need to trigger an exemption from retail preservation regulations. Exempting multifamily districts would support Housing Element policies and programs to reduce constraints to housing development for existing and future projects.

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b. Notably, a project proposed under State Density Bonus Law could request a waiver from ground-floor retail requirements related to the retail preservation ordinance. A project proposed under the City’s housing incentive program would not have that option.

2. Office/manufacturing zones (except within the San Antonio Road Area Plan area): ROLM ROLM(E), RP RP(5), and GM.
a. There are at least 21 sites with office/manufacturing designations where retail preservation regulations would need to be enforced in the event of a redevelopment project. Parcels located within the San Antonio Road Area Plan, an ongoing project by the City to guide redevelopment in a 275.3-acre portion of Palo Alto adjacent to the Mountain View border, would be excluded from this exemption. This exclusion allows the City to complete the San Antonio Road Area Plan process before deciding how to apply retail preservation in the GM zone.

Transportation and Parking
The draft ordinance proposes to streamline transportation demand management (TDM) requirements and streamline parking regulations in light of changes in State law and concerns from some retailers that they cannot meet parking requirements when proposing a change of use to a classification with a higher parking standard.

California Avenue Parking Assessment District: The existing zoning ordinance identifies a blended rate of 1 space per 250 sq. ft. for sites in the Downtown University Avenue Parking Assessment District. The draft ordinance proposes the same blended rate for California Avenue Parking Assessment District, which would acknowledge that:
City parking ratios are generally unenforceable for most uses on California Avenue because of the applicability of AB 2097 (Gov. Code Section 65863.2); Visitors to California Avenue likely park once and walk between uses whether parking on the street or within garages; and
Existing buildings and tenant spaces typically do not provide on-site parking and cannot physically provide additional parking in the event of a change of use application that triggers additional parking spaces.

Eating and Drinking Services’ Parking Ratios: The draft ordinance modifies parking ratios for existing and new proposed new eating and drinking services definitions to acknowledge that full service restaurants generate higher parking requirements than limited service establishments, which have greater turnover.

Transportation Demand Management: The existing zoning ordinance requires TDM programs in cases where uses request parking reductions of just 1 or 2 spaces. This requirement has been burdensome for small retailers in particular. The draft ordinance modifies TDM thresholds, Item 15
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exempting retail and retail-like tenants who are proposing small retail additions (less than 1,500 sq. ft.) or changes in use to other retail or retail-like use.

Shared Parking Reduction: The draft ordinance proposes increasing the discretionary shared parking reduction from 30% to 60% if an applicant can demonstrate that it is warranted. For example, this would allow an applicant to combine a reduction based on the “Joint Use (Shared) Parking Facilities” standard and the “Transportation and Parking Alternatives" or other categories.

Summary
In summary, this draft ordinance aims to boost retail vibrancy in Palo Alto's commercial areas, including University and California Avenue, through a package of regulatory reforms. It expands the range of permitted commercial uses (e.g., bars, hybrid medical/retail uses, pet-related uses, and other personal services), creates clearer and more intuitive use classifications for eating and drinking establishments, and reduces perceived friction by renaming Conditional Use Permits to Administrative Use Permits. It streamlines and consolidates overlapping parking and zoning regulations, allows neighborhood-serving offices in rear or side-street portions of buildings to reduce vacancies, and exempts certain residential and office/manufacturing zones from the Retail Preservation Ordinance. Together, these changes implement many of the zoning reforms highlighted in the previous Streetsense and Michael Baker International reports in an effort to reduce ground-floor vacancies, attract a wider variety of tenants, and encourage active, pedestrian-oriented street frontages in the City's key commercial corridors.

FISCAL/RESOURCE IMPACT
City Council adoption of the draft ordinance, which proposes to increase permitted uses, allow more uses by right, and reduce regulatory hurdles may reduce permitting timelines, staff and decision-maker time, and commercial vacancy rates, is anticipated to increase sales tax revenues. Staff will continue to monitor sales tax revenues closely and report out on a quarterly basis to the City Council.

STAKEHOLDER ENGAGEMENT
As part of the larger economic development initiative, the project team conducted stakeholder interviews with landowners, businesses, the Chamber of Commerce, and interviewed peer cities in 2022 and 2023. The PTC and PTC ad hoc held over a dozen study sessions and hearings to discuss these initiatives leading up to a recommendation on the interim ordinance in 2024.

These meetings have informed this current work effort. As part of this specific task in 2025, the project team interviewed local retailers and brokers to confirm key issues and seek feedback on recommended changes.

The City has received one public comment letter (Attachment E), which highlights the need for flexibility for older and historic buildings, which may not be conducive to 100% retail uses. In Item 15
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these locations, allowing office or other non-retail uses could increase occupancy without detracting from the vitality of the street frontage.

Additionally, two major property owners with retail tenants provided feedback on preliminary ideas for the ordinance at the January 22, 2026, City Council Retail Committee meeting. These property owners agreed with many of the comments expressed in the previous staff reports and emphasized the following:
That the perception of a Conditional Use Permit as a hurdle is a legitimate concern. An Administrative Use Permit is perceived as a more manageable permit to obtain. Terms like “revitalization” and “interim ordinance” create uncertainty and the sense that conditions are in flux; consider better messaging about proposed changes and liaisons that support retail, such as a retail ambassador. Retail needs are getting smaller and the deep retail space, especially Downtown, can benefit from more flexible use allowances.

The City will continue to engage stakeholders as part of its priority to enhance business vibrancy. Staff will partner with stakeholders including businesses, brokers, property owners, and partners like the Chamber of Commerce to leverage their expertise and further advance this important work.

ENVIRONMENTAL REVIEW
The proposed amendments are consistent with the Comprehensive Plan and Comprehensive Plan EIR which was certified on February 5, 2016 (State Clearinghouse #2014052101). No new or unanticipated levels of development or adverse impacts could be anticipated that were not previously identified in the Comprehensive Plan and Comprehensive Plan EIR. Consistency findings are identified in the attached adopting ordinance.

ATTACHMENTS
Attachment A: 2026 Retail Vitality Ordinance (Annotated) Attachment B: Summary of Draft Ordinance
Attachment C: Midtown & Charleston Shopping Centers Overlapping Use Regulations Attachment D: Retail Preservation and Businesses in Residential Multi-family, Office, and Industrial Zones
Attachment E: Public Comment
Attachment F: March 25, 2026 PTC Comments on the Draft Ordinance and Staff Responses APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 15
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1 *NOT YET APPROVED*
Ordinance No. _____
Ordinance of the Council of the City of Palo Alt
o Amending Various Chapters of
Title 18 (Zoning) and Chapter 16.59 (Citywide Transportation Impact Fee of the Palo Alto Municipal Code, and the Zoning Map, to Implement Retail Vitality Measures
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 reta il trends. Accordingly, the Ci ty Council has included retail revitalization as a Council priority for the past several years.

B. Throughout 2023 and 2024, City staff, the Pl anning and Transportation Commission (PTC), and the City’s consultant Michael Baker Intern ational (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 Reta il Committee reviewed the Final Draft Retail Study Report and provided direction to sta ff on several zoning amendments should be implemented immediately to support retail and retail-like uses in the City.

D. The PTC held six hearings on th e Retail Study (in addition to fo ur meetings of the PTC retail ad hoc committee).

E. In December 16, 2024, the City Council adop ted interim ordinance no. 5642, temporarily implementing some of the recommendations of the Retail Study, while directing further work by staff and the PTC on a permanent ordinance.

F. On October 29, 2025, the PTC reviewed additional analysis and recommendations prepared by staff and the City’s consultant Lexington Planning.

G. On March 25, 2026, the PTC reviewed issues and options to encourage ground-floor retail, provided comments, and recommended that the City Council adopt an ordinance.

H. The City Council now desires to adopt a retail revitalization to replace interim ordinance no. 5642.

SECTION 2. All references in the Palo Alto Municipal Code to “Conditional Use Permit” shall be amended to read “Administrative Use Permit.” All references in the Palo Alto Municipal Code to “CUP” shall be amended to read “AUP.” All references in the Palo Alto Municipal Code to “conditionally permitted” shall be amended to read “administratively permitted.” SECTION 3. Section 18.04.030 (Definitions) of Chapter 18.04 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code is he reby amended as follows (additio ns underlined; deletions struck- Item 15
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2 *NOT YET APPROVED*
through; text omitted but unchanged noted by bracketed ellipses; unannotated text indicates prior, temporary amendments that would expire if not restated herein):

18.04.030 Definitions
(a) Throughout this title the fo llowing words and phrases shall have the meanings ascribed in this section.
(12) “Animal care” means a use providin g grooming, housing, medical care, or other services to animals, including veterinary services, animal hospitals, overnight or short-term boarding ancillary to veterinary care, indoor or outdoor kennels, and similar services. (12) “Animal care, daytime” means a use provid ing care and services during the daytime only, including grooming, socializing, housing, veterina ry services, and animal hospitals that do not provide overnight care.
(12.1) “Animal care, overnight” means a use providing care and services that includes overnight or short-term boarding, such as kennels and animal hospitals with overnight care. [. . .]
(12.6) “Automobil
e showroom” means a use pr imarily engaged in the sale of new and used automobiles and trucks, or the display and demo nstration of automobiles and trucks for the purpose of facilitating sales, but which does not involve on-site st orage of inventory, except as incidental to the showroom use. Automobile sh owroom serves primarily pedestrian clientele and is distinct from automobile dealership.
[. . .]
(47) “Eating and drinking service” means uses primarily engaged in serving prepared food and/or beverages for consumption on or off the premises. Related definitions are provided in subsections (45) (Drive-in/drive- through service).
(47) (A) “Eating and drinking service, full se rvice” means a use providing preparation and retail sale of food and beverages with a full menu and providing indoor seating area. Eating and drinking service This use typically includes presence of a full commercial kitchen, and commercial dishwasher, and table service. For establishments with incidental sale alcoholic beverages, a minimum of 50% of revenues from an “eating and drinking service” must be derived from the sale of food. Related definitions are provided in subsections (45) (Drive- in/drive- through service, and (125)(B) (Intensive retail service) and (136) (Take-out service). (B) “Eating and drinking, limited service” means a use where food and beverages are r eady to consume within approximately 15 minutes of the time of sale whether on the premises, taken out, or delivered. Typica lly, limited seating area and no commercial kitchen are provided. Examples may include delis, bakeries, frozen dessert shops, pizza shops, counter service restaurants, and coffee shops. For esta blishments with incidental sale alcoholic beverages, a minimum of 50% of revenues must be derived from the sale of food. (C) “Bars” mean establishments devoted to se r ving alcoholic beverages and for which the serving of food is incidental to the consumpt ion of such beverages, with less than 50% of revenues derived from the sale of food.

Split definition to distinguish between less
impactful daytime uses vs. overnight uses
which may require additional conditions
due to noise or other impacts.

Make interim ordinance regulation permanent.

Create three categories of eating and drinking services, which generate different parking requirements: full service restaurants with table service and seating, food service with limited seating (replaces "intensive retail service" below), and a new classification to allow bars.

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[. . .]
(56) “Financial service” means a use providing financial services to individuals, firms, or other entities. The ter
m “financial service” includes banks, savings and loan institutions, loan and lending institutions, credit unions and similar services. (A) “Retail finance service” means a financial service use operating in a retail-oriented manner, offering face-to-face interactions, and convenient in-per son transactions in locations designed for public access. These services includ es retail banks, savings and loan institutions, loan and lending offices, credit unions, and similar services that prioritize walk-in customers with access to immediate financial solutions or combined with a publicly accessible retail component.
[. . .]
(57.6) “Formula retail business” means a retail, personal, or eating and drinking service that is one of fifty (50) or more business locations in th e State of California 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 bear ing the same or similar markings; 50% or more of menu items identical in name and pr esentation 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 co lors 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.
(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.
[. . .]
(102.6) "Neighborhood-serving offices" are medical offices, professional offices, travel agencies, and insurance agencies that fit the definition of a neighborhood-serving use.

Make interim ordinance regulations permanent.

Relocate definitions from Section 18.16.030
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Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

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(102.7) A "Neighborhood Serving Use" is not a separate use cl assification, but describes the class of uses that primarily serve individual consumers and households, not businesses, are generally pedestrian oriented in design, and do not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, rather than the provider of the goods or services traveling off-site.
[. . .]
(125) “Retail service” means a use open to the public during typi cal business hours and predominan
tly engaged in providing retail sale, re ntal, service, processing, or repair of items primarily intended for consumer or household use.
(A) “Extensive retail service,” as used with respect to parking requirements, means a retail sales use having more than seventy-five percent of the gross floor area used for display, sales, and related storage of bulky commod ities, including household furniture and appliances, lumber and building materials, carpeting and floor covering, air conditioning and heating equipment, and similar goods, which uses have demonstrably low parking demand generation per square foot of gross floor area.
(B) “Intensive retail service” as used with respect to parking requirements, means any retail service use not defined as exte nsive retail service, such as boutiques, bookstores, and small goods retail shops. and including limit ed food service (i.e. ‘ready-to-eat’ food and/or beverage shops without a full commercial kitchen, where food and/or beverages are ready to consume at the time of sale and any seating area is limited; examples include sandwiches, frozen desserts, non-alcoholic beverages, and baked items). (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, but distinct from, 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, as defined in subsection (12.6); (I) Day care centers, as defined in subsection (42);
(J) Retail financial services, as defined in subsection (56)(A); and (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 substantially to a high level of pedestrian activity, and meet the intent of the 18.30(B).040 (Pedestrian Shopping) design standards.

Not all retail-like uses are permitted in zoning di stricts that allow retail-like uses. Refer to use tables within each zoning district for specific permitted retail-like uses.

Replaced by "eating and drinking,
limited service" new use classification
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Vitality Ordinance
(Annotated)

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[. . .]
(136) “Take-out service” means a characteristic of an eating or drinking service which encourages, on a regular basis, consumption of food or beverages, such as prepared or prepackaged items, outside of a building, in outdoor seating areas where regular table service is not provided, in vehicles parked on the premises, or off-site. Take-out service does not include intensive retail service uses, as defined in subsection (125)(B). [. . .]
SECTION 4. Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of the properties identified in Exhibit A by removing the Ground Floor (GF) combining district.

SECTION 5. Sections 18.16.030 (Definitio ns), 18.16.040 (Land Uses ), 18.16.050 (Office Use Restrictions), and 18.16.060 (Development Standards) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code are hereby amen ded as follows (additions underlin ed; deletions struck-through; text omitted but unchanged noted by bracketed ellipses):

18.16.030 Definitions
[. . .]
(e) "Neighborhood-serving
offices" are medical offices, professional offices, travel agencies, and insurance agencies that fit the definition of a neighborhood-serving use. (f) A "Neighborhood Serving Use" is a use that primarily serves individual consumers and households, not businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of customers and clients travel, rather than the provider of the goods or services traveling off-site.
[. . .]

18.16.040 Land Uses
The uses of land allowed by this chapter in each commercial zoning district are identified in the following tables. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables (“Subject to Regulations in”) includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may apply as well. For properties with combining district zoning designations, refer to combining district use regulations for additional or superseding requirements.

Acknowledge that most restaurants offer takeout;
re
move definition and classification from use tables.

Removing this overlay from Midtown and Charleston will remove the confus
ion over the three different use tables that apply to these areas.

See Section 18.16 for how uses are proposed to be regulated.

Relocated to Section 18.04.030 (Definitions) so
that this term is generally applicable across
multiple zoning districts
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(a) Commercial Zones and Land Uses
Permitted and conditionally permitted land uses for each commercial zone are shown in Table 1:

TABLE 1

PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use CUP = Conditional Use Permit Required LAND USE CN (4) CC, CC(2) CS (4)
Subject to
Regulations
In:

ACCESSORY AND SUPPORT USES
Accessory facilities and activities customarily associated with or essential to permitted uses, and operated incidental to the principal use.

P P P 18.42
Drive-in services or take-out services associated with
permitted uses(3) CUP CUP CUP 18.42
Tire, battery, and automotive service facilities, when
operated incidental to a permitted retail service or shopping center having a gross floor area of more than 30,000 square feet.

CUP 18.42,

18.40.160
Safe Parking 18.42.160

EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Business and Trade Schools CUP P P
Churches and Religious Institutions P P P
Private Educational Facilities CUP P P
Private Clubs, Lodges, or Fraternal Organizations CUP P P

MANUFACTURING AND PROCESSING USES
Recycling Centers CUP CUP CUP
Warehousing and Distribution CUP

OFFICE USES
Administrative Office Services P 18.16.050
Medical Offices PCUP(5)(7) PCUP(5) PCUP(5) 18.16.050
Professional and General Business Offices P(7) P P 18.16.050

PUBLIC/QUASI-PUBLIC USES
Utility Facilities essential to provision of utility services but excluding construction or storage yards, maintenance facilities, or corporation yards.

CUP CUP CUP

RECREATION USES
Commercial Recreation CUPP(5) CUPP(5) CUPP(5) 18.40.160 Outdoor Recreation Services CUP CUP CUP

RESIDENTIAL USES
Revised permit levels and added uses to
provide more flexibility. Expanded allowed
uses in Midtown and Charleston that are
currently
permitted with the -GF overlay.

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LAND USE CN (4) CC, CC(2) CS (4)
Subject to
Regulations
In:

Multiple-Family P(1) P(1) P(1) 18.16.060(b)
and (c)
Home Occupations P P P
Residential Care Homes P P P

RETAIL USES
Automobile Showroom P P P
Bars CUP CUP 18.42.090
Eating and Drinking Services, excluding drive-through drive-in and take-out services
P(8) P P 18.40.160

18.42.090
Retail Services, excluding liquor stores P(8) P P 18.40.160 Liquor stores CUP P P 18.40.160
Shopping Centers P 18.16.060(c),

18.40.160

SERVICE USES
Ambulance Services CUP CUP CUP
Animal Care, daytime excluding boarding and kennels P P P 18.42.130 Animal Care, overnight CUP CUP CUP 18.42.130
Automobile Service Stations CUP CUP CUP 18.30(G)
Automotive Services CUP
Convalescent Facilities CUP P P
Day Care Centers P P P 18.40.160
Small Family Day Care Homes P P P
Large Family Day Care Homes P P P
Small Adult Day Care Homes P P P
Large Adult Day Care Homes CUP P P
Banks and Financial Services V CUP P(2) P(2) P(2)
General Business Services CUP CUP P
Hotels P P 18.16.060(d),

18.40.160
Mortuaries CUP P P
Neighborhood Business Services P 18.16.060(f)
Personal Services P P(6) P 18.16.060(f),

18.40.160
Reverse Vending Machines P P P

TEMPORARY USES
Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

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LAND USE CN (4) CC, CC(2) CS (4)
Subject to
Regulations
In:

Farmer’s Markets CUP CUP CUP
Temporary Parking Facilities, provided that such facilities shall remain no more than five years.

CUP CUP CUP

TRANSPORTATION USES
Parking as a principal use CUP CUP
Transportation Terminals CUP CUP
P = Permitted Use CUP = Conditional Use Permit Required (1) Residential is only permitted in the following instances and pursuant to 18.16.060(b) and (c):
(i) Aas part of a mixed use development, pursuant to the provisions of Section 18.16.060(b), or (ii) Oon sites designated as housing inventory sites i n the Housing Element of the Comprehensive Plan; and
(iii) Oon CN or CS sites on El Camino Real, or
(iv) On CN sites in the Midtown Shopping District and Charleston Shopping Center, except on the ground-floor fronting public streets, or
(iv) Oon CC(2) sites.
(2) Exce pt drive-through drive-in services.
(3) So long as drive up f acilities, e xcluding car washes, provide full access to pedestrians and bicyclists.

A maximum
of two such services shall be permitted within 1,000 feet, and each use shall not be less than 150 feet from one another.
(4) For pro
perties 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. (5) Exce
pt, a 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 for:
(A) ground-floor medical office fronting on California Avenue and, in the Charleston Shopping Center, in the Midtown Shopping District, and Town and Country Shopping Center; (B) commercial recreation uses fronting on California Avenue a nd in the Town and Country Village Shopping Center.
(6) 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.
(7) In the Mi
dtown Shopping District and Charleston Shopping Center, only “neighborhood serving office” uses are permitted, and a CUP is required for office uses exceeding 2,500 sq. ft. (8) In the Mi dtown Shopping District and Charleston Shopping Center, a conditional use permit is required for eating and drinking services above 5,000 sq. ft and for other retail uses above 20,000 sq. ft. [. . .]
Table 2 below currently prohibits residential uses in Midtown and Charleston; this revision would allow residential on upper floors and behind commercial uses.

Regulations
for California
Avenue have
been moved
to the -R
combining
district

18.30(A).040
Revises and
replaces
Table 5 (below)
in section (f) of
Section

18.16.060
Development
Standards
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Attachment A - 2026 Retail
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(c) CN District: Special Use Requirements in the Charleston and Midtown Shopping Centers The following regulations shall apply to areas of Charleston Center and the Midtown Shopping Center as defined in Section 18.16.030.

Table 2 shows the uses permitted and conditionally permitted on the ground floor of the applicable areas of the Charleston Center and Midtown Shopping Center. Permitted and conditional uses specified in subsection (a) of this section shall only apply to the ground floor of the areas of the Charleston and Midtown Shopping Centers as listed in Table 2. Uses lawfully existing on January 16, 2001 may be continued as non-conforming uses but may only be replaced with uses permitted or conditionally permitted under this subsection.

TABLE 2

CHARLESTON AND MIDTOWN SHOPPING CENTERS GROUND FLOOR USES P = Permitted Use CUP = Conditional Use Permit Required X = Prohibited Use

LAND USES
Charleston
Shopping
Center
Midtown
Shopping
Center
Subject to
Regulations in:

ACCESSORY AND SUPPORT USES
Accessory facilities and uses customarily incidental to permitted uses. P P

EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Churches and Religious Institutions CUP CUP
Private Educational Facilities CUP CUP

MANUFACTURING AND PROCESSING USES
Recycling Centers CUP CUP

OFFICE USES
Neighborhood-serving offices that do not exceed 2,500 square feet in floor area. P 18.16.050
Neighborhood-serving offices exceeding 2,500 square feet in floor area. CUP 18.16.050
Administrative office uses and general business office uses (other than neighborhood-serving travel agencies and insurance agencies) other than those legally in existence on January 16,2001
X X 18.16.050
Medical offices not exceeding 2,500 square feet in area, professional offices, travel agencies, and insurance agencies CUP 18.16.050

PUBLIC/QUASI-PUBLIC USES
Utility Facilities essential to pr ovision of utility services but excluding construction or storage yards, maintenance facilities, or corporation yards.

CUP CUP

RECREATION USES
Commercial Recreation CUP CUP 18.40.160
Outdoor Recreation Services CUP CUP
Private Clubs, Lodges, or Fraternal Organizations CUP CUP Integrated Charleston and Midtown use
allowances into Table 1 above. Deleting this
section means that Table 1 and the related
footnotes will regulate uses in Midtown Shopping
District and Charleston Shopping Center
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LAND USES
Charleston
Shopping
Center
Midtown
Shopping
Center
Subject to
Regulations in:

RESIDENTIAL USES
Residential uses of any nature X X

RETAIL USES
Eating and Drinking Services, excluding drive-in and take-out services
P P 18.40.160
Retail Services, excluding liquor stores P P 18.40.160
Liquor stores CUP CUP 18.40.160

SERVICE USES
Ambulance Services CUP CUP
Animal Care, excluding boarding and kennels P P
Automobile Service Stations CUP CUP 18.30(G)
Convalescent Facilities CUP CUP
Day Care Centers P P 18.40.160
Financial Services CUP CUP
Mortuaries CUP CUP
Neighborhood Business Services P P
Personal Services P P 18.40.160
Reverse Vending Machines P P

TEMPORARY USES
Farmers’ Markets CUP CUP
Temporary Parking Facilities, provided that such facilities shall remain no more than five years.

CUP CUP
P = Permitted Use CUP = Conditional Use Permit Required X = Prohibited Use (d) Charleston Shopping Center Additional Use Restrictions (1) Any office use first occupying space at the Center on or after January 16, 2001, shall obtain a written determination from the director of planning and development services that it qualifies as a neighborhood serving use, as defined in this chapter, before occupying its premises. The applicant shall submit such information as the director shall reasonably require in order to make the determination, and the director shall issue the determination within 30 days of receiving a complete application. Failure to submit the required information shall be grounds for determining that a business is not neighborhood-serving. (2) No more than 7,850 square feet of total floor area at the Center shall be occupied by office uses at any time.
(3) Prior to approving a conditional use perm it fo r neighborhood-serving offices larger than 2,500 square feet in total floor area, the city shall find that the proposed use will be neighborhood-serving, that it will be conducted in a manner that will enhance and strengthen the Center as a neighborhood resource, and that it will not diminish the retail strength of the center.
(e) Midtown Shopping Center: Additional Use Restrictions Item 15
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(1) An existing ground floor office may be replaced with another office if (a) the new tenant or owner will continue the existing business or practice; or (b) a conditional use pe rmit is issued for the new office use. (2) No conditional use permit shall be issued for any new office use on the ground floor unless, in addition to the findings required for a conditional use permit as specified in Section

18.76.010, the city finds that the proposed use will be neighborhood serving, that it will be conducted in a manner that will enhance and strengthen the Midtown Shopping District as a neighborhood resource, and that it will not diminish the retail strength of the District. (3) For properties at 711, 719, and 721 Colorado Avenue, and 689 Br yson Avenue , buildings not fronting on Middlefield Avenue, designed and used for office purposes, and not well suited to other uses are exempt from the provisions of this subsection (b).

18.16.050 Office Use Restrictions
The following restrictions shall apply to office uses:
(a) Conversion of Ground Floor Housing and Non-Office Co mmercial to Office Medical, Professional, and Business offices shall not be located on the ground floor, unless any of the following apply to such offices:
(1) Have been continuo usly in existence in that space since March 19, 2001, and as of such date, were neither non-conforming nor in the process of being amortized pursuant to Chapter

18.30(I);
(2) Occupy a space that was not occupi ed by housing, neighborhood business service, reta il services, personal services, eating and drinking services, or automotive service on March 19, 2001 or thereafter;
(3) Occupy a space that was vacant on March 19, 2001;
(4) Are located in new or remo deled 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, and automobile services does not decrease;
(5) Are on a site located in an area subj ect to a specific plan or coordinated area plan, which specifically allows for such ground floor medical, professional, and general business offices; or (6) Are located anywhere in Building E or in the rear 50% of Building C or D of the prope rty at the southeast corner of the intersection of Park Boulevard and California Avenue, as shown on sheet A2 of the plans titled “101 California Avenue Townhouse/Commercial/Office, Palo Alto, CA” by Crosby, Thornton, Marshall Associates, Architects, dated June 14, 1982, revised November 23, 1982, and on file with the Department of Planning and Development Services. (a) The following office use restrictions shall apply in the Midtown Shopping District and Charleston Shopping Center:
(1) The only office uses permitted are “neighborhood serving office” uses. (2) Prior to approving a conditional use permit for neighborhood-serving offices larger than 2,500 square feet in total floor area, the city shall find that the proposed use will be neighborhood-serving and consistent with the purposes of the zoning district (3) In the Midtown Shopping District, buildings at 711, 719, and 721 Colorado Avenue, and 689 Bryson Avenue, which do not front on Middlefield Avenue and are designed and used for office purposes, are exempt from the provisions of this subsection.

Remove onerous and subjective findings, replace with "neighborhood- serving" office limitation, size triggers for CUP, and finding related to district purposes. Retail Preservation Ordinance will prevent office conversions Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

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(b) Size Restrictions on Office Uses in the CN and CS Districts (other than Midtown Shopping District and Charleston Shopping Center):
(1) In the CN district, office uses shall be governed by the following regulations:
(A) Total floor area of permitted office uses on a lot shall not exceed 25% of the lot area, provided:
(i) A lot shall be permitted to have at least a total floor area of 2,500 square feet of office uses, provided the uses meet all other zoning regulations. (ii) No lot shall be permitted to have more than a total floor area of 5,000 square feet of office uses.
(B) Such uses may be allowed to exceed the maximum size, subject to issuance of a conditional use permit in accord with the provisions of Chapter 18.76. The maximum size for any conditional use shall be established by the director and specified in the conditional use permit for such use.
(2) In the CS district, office uses shall be governed by the following regulations:
(A) No lot shall be permitted to have more than a total floor area of 5,000 square feet of office uses.
(B) Such uses may be allowed to exceed the maximum size, subject to issuance of a conditional use permit in accord with the provisions of Chapter 18.76. The maximum size for any conditional use shall be established by the director and specified in the conditional use permit for such use.

18.16.060 Development Standards
[. . .]
(f) Size of Establishments in the CN District
In the CN district, permitted commercial uses shall not exceed the floor area per individual use or business establishment shown in Table 5. Such uses may be allowed to exceed the maximum establishment size, subject to issuance of a conditional use permit in accord with Section

18.76.010. The maximum establishment size for any conditional use shall be established by the director and specified in the conditional use permit for such use.

TABLE 5

MAXIMUM SIZE OF ESTABLISHMENT
Type of Establishment Maximum Size (ft 2 )
Personal Services 3,000
Retail services, except grocery stores 15,000
Grocery stores 20,000
Eating and drinking services 5,000
Neighborhood business services 3,000
[. . .]
Integrated the following into Table 1 above through footnotes.

CUP limitations have not been proposed on personal services or neighborhood business services to provide more flexibility.

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SECTION 6. Sections 18.18.050 (Land Uses) and 18. 18.060 (Development Standards) of Chapter

18.18 (Downtown Commercial (CD) District) 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):

18.18.050 Land Uses
The uses of land allowed by this chapter in each commercial zoning district are identified in the following table. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables (“Subject to Regulations in”) includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may apply as well. For parcels designed with the -GF combining district, refer to 18.30(C) for ground-floor use regulations.

Permitted and conditionally permitted land uses for the CD district are shown in Table 1:

Table 1
CD Permitted and Conditionally Permitted Uses
P Permitted Use • CUP Conditional Use Permit Required
CD -C CD-S CD-N Subject to
regulations in:

ACCESSORY USES
Accessory facilities and activities associated with or essential to permitted uses, and operated incidental to the principal use

P P P
Drive-in or Take-out Services associated with permitted uses (2) CUP CUP CUP
Tire, battery, and automotive service facilities, when operated incidental to a permitted retail service or shopping center having a gross floor area of more than 30,000 square feet CUP 18.40.160
Safe Parking 18.42.160

EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Business and Trade Schools P P
Churches and Religious Institutions P P P
Private Educational Facilities P P CUP
Private Clubs, Lodges, or Fraternal Organizations P P CUP

MANUFACTURING AND PROCESSING USES
Recycling Centers CUP CUP CUP
Warehousing and Distribution CUP

OFFICE USES
Administrative Office Services P 18.18.060(f)
Medical, Professional, and General Business Offices P P P 18.18.060(f)

PUBLIC/QUASI-PUBLIC FACILITY USES
Utility Facilities essential to provision of utility services but excluding construction or storage yards, maintenance facilities, or corporation yards

CUP CUP
Revised permit levels
and added uses to
provide more flexibility
in the types of uses
permitted.

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Table 1
CD Permitted and Conditionally Permitted Uses
P Permitted Use • CUP Conditional Use Permit Required
CD -C CD-S CD-N Subject to
regulations in:

RECREATION USES
Commercial Recreation CUP(3) CUP(3) CUP(3)
Outdoor Recreation Services CUP CUP CUP

RESIDENTIAL USES
Multiple-Family P (1) P (1) P (1) 18.18.060(b)
Home Occupations P P P
Residential Care Homes P P P

RETAIL USES
Automobile Showrooms P P P
Bars CUP 18.42.090
Eating and Drinking Services, except drive-through drive-in or take-out services
P P P 18.18.060(g) ,

18.40.160

18.42.090
Retail Services, excluding liquor stores P P P 18.18.060(g) ,

18.40.160
Shopping Centers P 18.18.060(g) ,

18.40.160
Liquor Stores P P CUP 18.40.160

SERVICE USES
Animal Care, excluding boarding and kennels daytime P P P 18.42.130 Ambulance Services CUP CUP CUP 18.30(G)
Automobile Service Stations CUP CUP CUP
Automobile Services CUP
Convalescent Facilities P P CUP
Day Care Centers P P P 18.40.160
Small Family Day Care Homes P P P
Large Family Day Care Homes P P P
Small Adult Day Care Homes P P P
Large Adult Day Care Homes
Financial Services, except drive-up services P P CUP
General Business Services CUP P P
Hotels P P P 18.18.060(d) ,

18.40.160
Mortuaries P P CUP
Personal Services P(4) P(4) P(3)(4) 18.18.060(g) ,

18.40.160
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Table 1
CD Permitted and Conditionally Permitted Uses
P Permitted Use • CUP Conditional Use Permit Required
CD -C CD-S CD-N Subject to
regulations in:

Reverse Vending Machines P P P

TRANSPORTATION USES
Parking as a principal use CUP CUP
Passenger Transportation Terminals CUP

TEMPORARY USES
Indoor Farmers’ Markets CUP CUP CUP
Temporary Parking Facilities, provided that such facilities shall remain no more than five years

CUP CUP CUP
P Permitted Use CUP Conditional Use Permit Required
(1) Residential is only permitted as part of a mixed us e development, pursuant to the provisions of Se ction 18 .18.060(b), or on sites designated as Housing Opportunity Sites in the Housing Element of the Comprehensive Plan, pursuant to the provisions of Section 18.18.060(c).
(2) Drive-up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such services shall be permitted within 1,000 feet and each use shall not be less than 150 ft from one another. (3) A conditional use permit is required fo r p ersonal services over 5,000 sq. ft . (3) A conditional use permit is not required for commercial recreation uses up to 5,000 square feet of gross fl oor 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. (4) 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 ce nters intended for individual or small group settings.

18.18.060 Development Standards
[. . .]
(g) Restrictions on Size of Comme rcial Establis
hments in CD-N Subdistrict
In the CD-N subdistrict, permitted commercial uses shall not exceed the floor area per individual use or business establishment shown in Table 4. Such uses may be allowed to exceed the maximum establishment size, subject to the issuance of a conditional use permit in accordance with Chapter 18.76. The maximum establishment size for any conditional use shall be established by the director and specified in the conditional use permit for such use.

TABLE 4

MAXIMUM SIZE OF ESTABLISHMENT
Type of Establishment Maximum Size (ft 2 )
Personal Services 3,000
Retail services, except grocery stores 15,000
Grocery stores 20,000
Eating and drinking services 5,000
Revises and
replaces Table 4
below
Moved personal services CUP
trigger to Table 1 above and
increased maximum size to 5,000
sq. ft. to increase flexibility.

Remaining CUP triggers are
unnecessarily restrictive given
that CD-N parcel sizes and
development standards will
generate smaller footprint
buildings and limited massing
(max 0.9 FAR and 35-foot building
height). Moreover, new buildings
will be subject to design review.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
29 Packet Pg. 293 of 390

16 *NOT YET APPROVED*
[. . .]
SECTION 7. Section 18.29.050 (Permitted Uses) of Chapter 18.29 (North Ventura (NV) District Regulations) of Title 18 (Zoning) of the Palo Al to Municipal Code is he reby amended as follows (additions underlined; deletions struck-through; text omitted but unchanged noted by bracketed ellipses):

18.29.050 Permitted Uses
The uses of land allowed by this chapter in each zoning district are identified in the following tables.

Land uses that are not listed in the tables are not allowed, except wher e otherwise noted. Where the last column on the following tables ("Subjec t to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections not specifically referenced may apply as well.

TABLE 1: PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use
CUP = Conditional Use Permit Required TUP = Temporary Use Permit Required — = Not Permitted
LAND USE NV-R1 NV-R2 NV-R3 NV-R4 NV-MXL
(1)(5)
NV-MXM
(5)
NV-MXH NV-PF Subject to
Regulations In:

ACCESSORY AND SUPPORT USES

18.40 Accessory facilities and activities
customarily incidental to the P P P P P P P -

18.10.080
permitted use 18.12.080
Accessory Dwelling Unit & Junior
Accessory Dwelling Unit when
accessory to primary and permitted
residential use
P P P P P P P - 18.09
Home Occupations, when accessory
to permitted residential use
P P P P P P P P 18.42
Horticulture, Gardening, and Growing
of food products for consumption by
occupants of a site

P P P P P P P -

EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Private Clubs, Lodges, or Fraternal
Organizations, excluding any such
facility operated as a business for
profit
- - - CUP CUP - - -
Private Educational Facilities CUP CUP CUP CUP CUP P P - Religious Institutions CUP CUP CUP CUP P P P -
OFFICE USES(2)
Administrative Office Services - - - - P P P - 18.29.050(a) Medical Offices - - - - P P P - 18.29.050(a)
Revised permit levels and added uses
to provide more flexibility in the types
of uses permitted.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
30 Packet Pg. 294 of 390

17 *NOT YET APPROVED*
TABLE 1: PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use
CUP = Conditional Use Permit Required TUP = Temporary Use Permit Required — = Not Permitted
LAND USE NV-R1 NV-R2 NV-R3 NV-R4 NV-MXL
(1)(5)
NV-MXM
(5)
NV-MXH NV-PF Subject to
Regulations In:

Professional and General Business
Offices
- - - - P P P - 18.29.050(a)

PUBLIC/QUASI-PUBLIC USES
Community Centers CUP CUP CUP CUP - - - CUP (3)
Utility Facilities essential to provision
of utility services but excluding
construction or storage yards,
maintenance facilities, or corporation
yards.

CUP CUP CUP CUP CUP CUP CUP -

RECREATION USES
Neighborhood Recreational Centers - - CUP CUP - - - CUP(3) Commercial Recreation - - - - CUP CUP CUP CUP(3)
Outdoor Recreation Services CU P CUP CUP CUP - CUP CUP CUP(3) Youth Clubs - - - - - - - CUP(3)

RESIDENTIAL USES
Single-Family P P - - - - - -
Two-Family P P - - - - - - 18.42.180
Multiple-Family - - P P P P P P (4)
Residential Care Homes P P P P P P P -

RETAIL USES
Automobile Showroom P
Bars C U P 18.42.090
Eating and Drinking Services, except
drive-through drive-in and takeout
services
- - P P P P P CUP (3) 18.40.160,

18.29.050(c)
Personal Services and Retail Services
of a neighborhood- serving nature - - P P P P P CUP (3)

18.40.160,

18.29.050(c)
Liquor stores - - - - - P P - 18.40.160,

18.29.050(c)

SERVICE USES
Animal Care, daytime excluding
boarding and kennels
- - - - P P P - 18.29.050(c)

18.42.130
Animal Care, overnight C U P CUP CUP 18.42.130
Convalescent Facilities - - - CUP P P P -
Day Care Centers CUP CUP CUP P P P P - 18.40.160
Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
31 Packet Pg. 295 of 390

18 *NOT YET APPROVED*
TABLE 1: PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use
CUP = Conditional Use Permit Required TUP = Temporary Use Permit Required — = Not Permitted
LAND USE NV-R1 NV-R2 NV-R3 NV-R4 NV-MXL
(1)(5)
NV-MXM
(5)
NV-MXH NV-PF Subject to
Regulations In:

Large Family Day Care Homes P P P P P P P P(3)
Small Family Day Care Homes P P P P P P P P(3)
Large Adult Day Care Homes CUP CUP P P P P P P(3)
Small Adult Day Care Homes P P P P P P P P(3)
Financial Services - - - - P P P - 18.29.050(a),

18.29.060(b)
General Business Services - - - - P P P - 18.29.050(a),

18.29.060(b)
Hotels - - - - - P P - 18.40.160,

18.16.060(d)
Personal Services and Retail Services
defined as a neighborhood- serving
use
- - P P P P P CUP (3)

18.40.160,

18.29.050(c)
Other Personal Services - - - - P P P - 18.40.160,

18.29.050(c),

18.29.060(b)

AGRICULTURAL AND OPEN SPACE USES
Park uses and uses incidental to park
operation
- - - - - - - P
All facilities owned or leased, and
operated or used, by the City of Palo
Alto, the County of Santa Clara, the
State of California, the government of
the United States, the Palo Alto
Unified School District, or any other
governmental agency, or leased by
any such agency to another party
- - - - - - - P
Utility Facilities - - - - - - - CUP

TEMPORARY USES
Temporary Uses - - TUP TUP - - - - 18.42.050
Farmer’s Markets - - - - - CUP CUP -
Temporary Parking Facilities,
provided that such facilities shall
remain no more than five years
- - - - - CUP CUP CUP (3)
Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
32 Packet Pg. 296 of 390

19 *NOT YET APPROVED*
TABLE 1: PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use
CUP = Conditional Use Permit Required TUP = Temporary Use Permit Required — = Not Permitted
LAND USE NV-R1 NV-R2 NV-R3 NV-R4 NV-MXL
(1)(5)
NV-MXM
(5)
NV-MXH NV-PF Subject to
Regulations In:

Notes:

For NV-MXL zoning district, the total floor area of non-residential uses permitted a nd conditionally permitted on a lot shall n ot exceed 5,000 square feet.

For office uses, total floor area of permitted office uses on a lot shall not exceed 5,000 square feet.

Provided such use is conducted on property owned by the City of Palo Alto, the County of Santa Clara, the State of California, the government of the United States, the Palo Alto Unified School District, or any other governmental agency, and leased for said uses.

Only a 100% Affordable Housing Project is permitted. Development shall follow NV-R4 standards.

Ground floor uses shall comply with the ground floor edge framework set forth in NVCAP section 2.3. …
SECTION 8. Chapter 18.30(A) (Retail Shopping (R) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby am ended as follows (additions underlined; deletions struck-through; text omitted but unchanged noted by bracketed ellipses):

18.30(A)
.010 Specific Purposes
The retail shopping combining district is intende d to modify the uses a llowed in a commercial district, where applied in combination with such district, to allow only retail, eating, and service- oriented, and neighborhood-serving office commercial development on the ground floors [. . .]

18.30(A)
.040 Permitted Uses Land 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 Ca lifornia Avenue: fitness or exercise studios exceeding 1,800 square feet in gross floor area
(c) Retail services.
(d) Financial services, except drive-in services.
(e) Pet grooming services.
(f) Automobile showroom.
(g) All other uses permitted in the underlying co mmercial district, provided they are not located on a ground floor.

Permitted and conditionally permitted land uses in the combining district are identified in Table

1. Where the last column on the following tables ("Subject to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use. Conditional use permits shall be issued in accordance with Chapter 18.76 (Permits and Approvals), subject to restrictions in Section 18.40.160.

Replace narrative list of P/CUP uses, with table. Revised permit levels and added uses (e.g., bars, neighborhood- serving office, medical office) to provide more flexibility.

Table 1 below removes this exception for fitness. This
change would allow fitness studios up to 5,000 sq. ft.
by right. Beyond 5,000 sq. ft. fitness is classified as commercial recreation which would require a CUP.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
33 Packet Pg. 297 of 390

20 *NOT YET APPROVED*
Table 1
P Permitted Use • CUP Conditional Use Permit Required (R) Subject to regulations in:

OFFICE USES
Medical offices, that include retail services, fronting California Avenue CUP 18.30(A).055(b) Neighborhood-serving offices, except fronting California Avenue. P 18.30(A).055(c)

RECREATION USES
Commercial recreation, fronting California Avenue CUP
Commercial recreation, other locations P

RETAIL USES
Automobile showrooms P
Bars CUP 18.42.090
Eating and drinking services, except drive-through services P 18.42.090 Formula retail businesses on California Avenue CUP
Retail financial services, except drive-through services. P Retail services P

SERVICE USES
Animal care, daytime P 18.42.130
Personal services P
OTHER
All other uses permitted in the underlying commercial district, provided they are not located on a ground floor.

CUP See underlying district
regulations

18.30(A)
.050 Conditional Uses
The following uses may be conditionally permitted in an R dist rict, subject to the issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approval):
(a) All other conditional uses allowed in the underlying commercial district provided they are not located on a ground floor.
(b) Formula retail businesses on California Avenue.
(c)Fitness or exercise studios exceeding 1,800 square feet in gross floor area on California Avenue.

18.30(A)
.055050 Design Standards
(a) The following design standards shall apply in the R combining district:
(a) (1) Window Transparency. Exterior wi ndows on the ground floor shall use transparent glazing to the extent feasible. Low-e glass or minimal tinting to achieve sun control is permitted, so long as the glazing appears transparent when viewed from the ground level.
(b) (2) Visual Access. Window coverings ar e not permitted on the ground floor during typical business hours. Where operations preclude transparency (e.g., theaters) or where privacy requires window coverings, sidewalk-facing frontage shall include items of visual interest including displays of merchandise or artwork; visual access shall be provided to a minimum depth of 3 feet.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
34 Packet Pg. 298 of 390

21 *NOT YET APPROVED*
(b) Medical Office Uses. For ground-floor medica l office uses located within 40 feet of the back of sidewalk on California Avenue, such uses shall include a retail services component that occupies a minimum 15-foot depth, as measured from the California Avenue ground floor building frontage.
(c) Neighborhood-Serving Office Uses. Ground-fl oor neighborhood-serving office uses may be located in the rear of lots with frontage on California Avenue or fronting on side streets, if retail or retail-like uses occupy a minimum 40-foot depth of the ground floor, as measured from the back of sidewalk on California Avenue, and occupy the full extent of the California Avenue building frontage, excluding required utilities, driveways, pedestrian access and residential lobby.
[. . .]

18.30(A).070 Waivers and adjust
ments.
(a) The following shall be grounds for a re quest 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

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 9. Chapter 18.30(C) (Ground Floor (GF)
Combining District Regulations) of Title 18 (Zoning)
of the Palo Alto Municipal Code is hereby am ended as follows (additions underlined; deletions struck-through; text omitted but unchanged noted by bracketed ellipses):
[. . .]

18.30(C).020 Permitted Uses Land 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;
(2) Hotels;
(3) Personal services, except for the follo wing on parcels with frontage on University Avenue :
fitness and exercise studios exceeding 3,000 square feet in gross floor area; (4) Retail services;
Allows
neighborhood-
serving office,
but not
fronting
California
Avenue.

Remove Waiver and Adjustments section entirely
to make regulations unambiguous and acknowledge
that the City is expanding permitted uses.

Allows medical office on California Avenue, if
the front of the space includes retail sales.

Replace narrative list of P/CUP uses, with table. Revised permit levels and added uses (e.g., bars, neighborhood- serving office, medical office) to provide more flexibility.

Table 1 below removes this exception for fitness. This
change would allow fitness studios up to 5,000 sq. ft.

by right. Beyond 5,000 sq. ft. fitness is classified as commercial recreation which would require a CUP.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
35 Packet Pg. 299 of 390

22 *NOT YET APPROVED*
(5) Theaters;
(6) Travel agencies;
(7) Commercial recreation up to 5,000 squa re feet in gross floor ar ea, except for parcels with frontage on University Avenue;
(8) Financial services, except drive-in services.
(9) Pet grooming services.
(10) Automobile showroom;
(11) All other uses permitted in the underlying district, provided such uses are not on the ground floor.
(a) Permitted and conditionally permitted land uses in the combining district are identified in Table 1 and, subject to restrictions in Section 18.40.180. Where the last column on the following tables ("Subject to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use. (b) Elimination or conversion of basement space cu rrently in retail or retail-like use or related support purposes is prohibited.
(c) Entrance, lobby, or reception areas serving no n-ground floor uses may be located on the ground floor to the extent reas onably 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 al lowed on the ground floor in the GF ground floor combining district, subject to issuance of a condi tional 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) General business service;
(5) All other uses conditionally permitted in the applicable underlying district, provided such uses are not on the ground floor.
(b a) The director may grant a conditional use permit under this section only if he or she makes the following findings in addition to the s ubject to the findings required by Chapter 18.76 (Permits and Approvals) and a finding that:
(1) The location, access or design of the gr ound 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) Tthe proposed use will not be determined to the retail environment or the pedestrian- oriented design support the objectives of the GF combining district. (c b) 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.

Remove
onerous and
subjective
findings.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
36 Packet Pg. 300 of 390

23 *NOT YET APPROVED*
Table 1
P Permitted Use • CUP Conditional Use Permit Required (GF) Subject to regulations in:

EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES
Business or trade school CUP

OFFICE USES
Medical offices, that include retail services, fronting University Avenue CUP 18.30(C).035(b) Neighborhood-serving offices, except fronting University Avenue. P 18.30(C).035(c)

RECREATION USES
Commercial recreation, up to 5,000 sq. ft. P
Commercial recreation, more than 5,000 sq. ft. CUP
Commercial recreation, fronting University Avenue CUP

RETAIL USES
Automobile showrooms P
Bars CUP 18.42.090
Eating and drinking services, except drive-through services P 18.42.090 Retail financial services, except drive-through services. P Retail services P

SERVICE USES
Animal care, daytime P
Day care centers CUP
General business service CUP
Personal services P
Theaters P
Travel Agencies P
OTHER
All other uses permitted in the underlying commercial district, provided they are not located on a ground floor.

CUP See underlying district
regulations

18.30(C).035030 Desig
n Standards
(a) Where the GF combining district is combined with the CD-C subdistrict, the following design standards shall apply:
(a) (1) Window Transparency. Exterior wi ndows on the ground floor shall use transparent glazing to the extent feasible. Low-e glass or minimal tinting to achieve sun control is permitted, so long as the glazing appears transparent when viewed from the ground level.
(b) (2) Visual Access. Window covering s are not permitted on the ground floor during typical business hours. Where operations preclude transparency (e.g., theaters) or where privacy requires window coverings, sidewalk-facing frontage shall include items of visual interest including displays of merchandise or artwork; visual access shall be provided to a minimum depth of 3 feet.

Replace narrative list of P/CUP uses, with table.

Revised permit levels and added uses (e.g., bars,
neighborhood-serving office, medical office) to
provide more flexibility.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
37 Packet Pg. 301 of 390

24 *NOT YET APPROVED*
(b) Medical Office Uses on University Avenue . For ground-floor medical office uses located within 50 feet of the back of sidewalk on University Avenue, such uses shall include a retail services component that occupies a minimum 15-foot depth, as measured from the University Avenue ground floor building frontage.
(c) Neighborhood-Serving Office Uses on University Avenue. Ground-floor neighborhood- serving office uses may be located in the rear of lots with frontage on University Avenue or fronting on side streets, if one of the following conditions are met:
(1) Retail or retail-like uses occupy a mi nimum 50-foot depth of the ground floor, as measured from the back of sidewalk on University Avenue, and occupy the full extent of the University Avenue building frontage, excluding required utilities, driveways, pedestrian access and residential lobby; or
(2) For buildings that do not have tenant spac es within 50 feet of University Avenue (e.g., flag lots, deep setbacks), neighborhood-serving offices are located a minimum of 50 feet from University Avenue, as measured from the back of sidewalk. [. . .]

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 reques t that the requirements of this Chapter be adjusted or waived upon a showing that strict application would result in an unreasonable financial impact 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 sh owing that: the permitte d 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, includi ng 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 10. Section 18.38.030 (Permitted Uses) of Chapte r 18.38 (PC Planned Community District Regulations) of Title 18 (Zoning) of the Palo Al to Municipal Code is he reby amended as follows (additions underlined; deletions struck-through):

18.38.030 Permitted uses.

Any use may be perm
itted in any specific PC district; provided:
(a) Such such use is shall be specifically liste d as a permitted use a nd shall be located and conducted in accord with the approved develo pment plan and other applicable regulations adopted pursuant to this chapter to govern each specific PC district; or Remove Waiver and Adjustments section entirely
to make regulations unambiguous and acknowledge
that the City is expanding permitted uses.

Allows medical office on University Avenue, if
the front of the space includes retail sales.

Allows neighborhood-serving office,
but not fronting University Avenue.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
38 Packet Pg. 302 of 390

25 *NOT YET APPROVED*
(b) Except for uses identified as being part of a PC community benefit, the Director may determine that an unlisted use is materially sim ilar to a listed use in the specific PC district and may be allowed in the same extent and subject to the same standards as a listed permitted use, if it has:
(1) Similar impacts on the neighborhood such as traffic generation, deliveries, noise and lighting as listed uses; and
(2) Similar characteristics such as building type , site arrangement, floor area, number of employees, indoor and/or outdoor uses, cu stomer traffic, equipment use, hours of operation, parking, vehicle trips and signage as listed uses.

SECTION 11. Section 18.40.180 (Retail Preservation) of Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; text omitted but unchanged noted by bracketed ellipses):

18.40.180 Retail Preservation
(a) Conversion of Retail and Retail-Like Uses Prohibited. (1) 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 permitte d in the applicable
district.
(A) A ground floor Retail or Retail-Like use in the RT-35 district on properties with frontage on Alma Street between Channing Avenue and Lincoln Avenue may additionally be replaced by a Private Educational Facility use, provided that such use shall not be thereafter replaced by an Office use.
(B) This subsection shall not apply to the following zoning districts:
(I) Residential zones: RM-30, RM-40, NV-R3, NV-R4
(II) Office/manufacturing zones, except within the San Antonio Road Area Plan area: ROLM, ROLM(E), RP, RP(5), GM
[. . .]
SECTION 12. Section 18.42.090 (Alcoholic Beverages) of Chapter 18.42 (Standards for Special Uses) of Title 18 (Zoning) of the Palo Alto Municipa l Code are hereby amen ded and Section 18.42.130 (Animal Care) is hereby added as follows (additions underlined; deletions struck-through; text omitted but unchanged noted by bracketed ellipses):

18.42.090 Alcoholic Beverages
(a) Purpose
This subsection establishes permit requirements and standards for establishments with alcoholic beverage sales or service.
(b) Licensing
Establishments with alcoholic beverage sales or service shall comply with all applicable regulations of the California Department of Alcoholic Beverage Control.

Allows the Director to determine whether an
unlisted use may be permitted in a PC district,
based on similar impacts and characteristics.

This provision would remove sites from RPO
applicability, including two residentially zoned -
sites,
occupied by a hotel and daycare.

Allows alcohol incidental to food by right
and applies regulations for bars.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
Pg.
39 Packet Pg. 303 of 390

26 *NOT YET APPROVED*
(c) Permits Required
Table 1 shows permits required for alcoholic beverage service depending on the use classification and type of alcohol service.

Table 1 Perm
its Required for Alcoholic Beverage Services
Use Classification Beer and Wine Distilled Spirits
Eating and Drinking Service P P
Bar CUP CUP
(a) Conditional Use Permit Required in Tandem with On-Sale License In any district where otherwise permitted by this title, any eating and drinking establishment or other use having any part of its operation subject to an on-sale license required by the State of California shall be subject to securing a conditional use permit. (b) Conditional Use Permit Required with New On-Sale License A conditional use permit shall be obtained in the case of premises for which no conditional use permit is in force, whenever a new on-sale license is required by the State of California. (c)(d) Amendment to Conditional Use Permit Required with Expansion In the case of premises for which a conditional use permit is in force, which permits the sale of alcohol, but Table 1 permits less restrictive requirements, an administrative amendment to such permit shall be required whenever such use is intensified or is expanded in square footage.
(d)(e) Amendment to Conditional Use Permit Required with New On-Sale License In the case of premises for which a conditional use permit is in force, but such use permit does not permit sales of alcohol, compliance with the permit level identified in Table 1 an amendment to such permit shall be required whenever a new on-sale license is required by the State of California.
(e)(f) Alcohol Service in Parklets on Rights-of-Way
Establishments that are allowed by the city to serve alcohol for onsite consumption by issuance of a conditional use permit (“CUP”) as required in pursuant to this section or as a legal nonconforming use, and that have both an on-sale license from the California 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 without an amendment of the CUP in parklets on public property approved via permit per PAMC Chapter 12.11 or other outdoor uses approved via permit per any other relevant section of the PAMC. Outdoor alcohol service shall be in full compliance with all applicable regulations, including ABC regulations, as may be amended.
(g) Findings. To approve a CUP for alcoholic beverage sales or service, the decision-making body must make the following findings:
(1) The applicant has not operated a licensed establishment that has been the subject of violations regarding alcohol, or violations of public safety or nuisance statutes or regulations in Palo Alto. In making this finding, the decision-making body may consider the number, frequency, and severity of prior violations, the time elapsed since the last violation, and other relevant factors; and
Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
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27 *NOT YET APPROVED*
(2) At least one of the following:
(A) The proposed establishment will promote the City’s economic health, contribute to Comprehensive Plan or area plan policies, or further the zoning district purpose; or (B) The economic benefits associated with the establishment could not reasonably be achieved without the proposed alcohol sales or service. (h) Operational Conditions. Owners and operators of Bars or Eating and Drinking Services with alcohol beverage service must meet the following performance standards:
(1) Hours. Hours of operation are subject to review and amendment by the review authority as necessary to avoid detriment to the neighborhood or to achieve conformance with revised City of Palo Alto standards or policies. (2) Preventing Disturbances. The owner or operator of the establishment shall take reasonable measures to prevent disturbances by patrons in the immediate vicinity.

Such measures shall include:
(A) Signs reminding patrons of nearby sensitive receptors, such as residences, and requests not to congregate or loiter near such residences nor operate vehicles in a noisy manner on public streets; and
(B) Sightlines to public areas near the establishment, keeping public areas free of trash and litter, providing lighting, and otherwise preventing conduct that might disturb the peace and quiet of residences in the vicinity.
(C) The operator shall assume reasonable responsibility for ensuring that patrons do not block the entrance or interfere with pedestrian activity on the adjacent public sidewalk.
(3) Training. All employees selling and/or serving alcoholic beverages, or directly supervising such sales and/or service, shall finish the Licensee Education on Alcohol and Drugs program, or another equivalent program offered or certified by the California Department of Alcoholic Beverage Control within 90 days of employment at the establishment. Employees who have finished the course within the last 12 months are exempt from this requirement.
[. . .]

18.42.130 Animal Care
(a) Purpose
Conform with State licensing requirements and City regulations, regulate operations, and ensure compatibility with other allowed uses in the applicable zoning district. (b) Performance Standards
Animal Care uses shall be subject to the following standards. Animal care uses subject to a conditional use permit may be required to meet additional standards such as hours of operation, drop-off and pick-up regulations, fencing and privacy standards, in particular for businesses with outdoor uses when adjacent to residential or other sensitive uses.

Identifies performance standards for
animal care uses.

Item 15
Attachment A - 2026 Retail
Vitality Ordinance
(Annotated)

Item 15: Staff Report
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28 *NOT YET APPROVED*
(1) Animal Control Permit. The facility shall maintain a valid permit with Animal Control at all times, if required, and follow the guidelines of said permit all times. (2) Nuisances and noise. The business shall be operated in a manner to protect any nearby properties from excessive noise, odors, lighting or other nuisances from any sources during the business hours. Noise levels emanating from the use shall not exceed the maximum level established in Chapter 9.10.
(3) Interior materials. The interior building surfaces of indoor housing facilities shall be constructed and maintained so that they are substantially impervious to moisture and may be readily sanitized.
(4) Drainage. Adequate drainage facilities shall be installed and maintained to facilitate proper sanitation and disposal of natural precipitation and water used to clean the facility.
(5) Ventilation. Indoor housing facilities shall be adequately ventilated to provide for the health and comfort of the animals at all times. Such facilities shall be provided with fresh air either by means of windows, doors, vents, or air conditioning and shall be ventilated so as to minimize drafts, odors, and moisture condensation. (6) Waste. Provision shall be made for the removal and disposal of animal and food wastes, bedding, dead animals, and debris, in accordance with applicable laws. Disposal facilities shall be covered and operated as to minimize odors and disease hazards.

SECTION 13. Sections 18.52.030 (Basic Parking Requirements), 18.52.040 (Of f-Street Parking,
Loading and Bicycle Facility Requirements), and 18.52.050 (Adjustments by the Director) of Chapter

18.52 (Parking and Loading Requirements) 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):

Palo Alto City CouncilMay 18, 2026

Palo Alto City Council
May 18, 2026