May 18, 2026 www.paloalto.gov
156 California
Project Update / Direction
Regarding Housing Sites Inventory
Presenter:
Jonathan Lait, Director
1 Purpose
• Provide update on the filed Builder’s Remedy project
• Present Ad Hoc negotiated revised concept plan
• Explain implications of adding Lot A to Housing Element Sites Inventory • Receive public input
• Provide direction to staff
Key Decision
• Whether to add Lot A to the Housing Element Sites Inventory. 2 Project Location
3 Location:
156 California Avenue
Two lots (1.14 acres + 0.29 acres) at California & Park Avenue, and Park & Cambridge Avenue.
CC(2)(R) Zoning District
Existing Uses:
Parking lot and Mollie Stone’s grocery store.
Proposed Use:
Mixed-use multifamily redevelopment replacing
existing uses.
Lot B
Lot A
Builder’s Remedy Background
4 Year Legislation Relevance
1982 Housing Accountability Act Foundation law
1990 HAA amendments Added noncompliant Housing
Element trigger
2017 SB 167 Strengthened enforcement
2019 SB 330 Expanded vesting protections
2024 AB 1893 Established Builder’s Remedy 2.0
2025 AB 130 Added CEQA infill exemptions
Legislative Context
State Certification Deadline: January 31, 2023
City of Palo Alto Housing Certified: August 20, 2024
156 California Avenue: Project Timeline
5 Date Milestone
March 2023 SB 330 Preliminary Application filed
April 2024 Major Architectural Review application filed August 2024 Tentative Parcel Map filed
August 2025 – February 2026 Ad Hoc negotiations
May 4, 2026 Settlement agreement authorized
May 18, 2026 Council consideration of Lot A inventory action 6 Current Builder’s Remedy (1.0) Application
Original v. Revised Conceptual Project Comparison
9 Category BR 1.0 Original BR 2.0 Revised
Maximum Height 177 ft, 120 ft, 77 ft 144 ft, 129 ft, 124 ft Stories 17 / 11 / 7 14 / 12 / 12
Total Units 382 390
Affordable Units 78 (20%) 50 (13%)
Market Rate Units 304 340
Density 267 DU/ac 272 DU/ac
Grocery Store 14,519 SF 15,260 SF
Parking 290 266
4-A
Concept Builder’s Remedy (2.0) Project
11 12
What Changes if Lot A is Added
If Council Adds Lot A
• Applicant may pursue revised BR 2.0 concept
• Revised application due within 120 days
• Courtesy Architectural Review Board review
• Council consideration of final approvals
If Council Does Not Add Lot A
• Applicant likely proceeds with original BR 1.0 project • Original project timelines resume
13 Adding Lot A to the
inventory allows for
greater floor area and
therefore increased
project density (unit
count).
Without this action, the
applicant cannot achieve
the unit density reportedly
needed to make the
project feasible.
Agreement Overview
Agreement Purpose: Resolve threatened litigation and establish framework for consideration of revised concept.
Important Clarifications
• No project approval granted
• No predetermined Council outcome
• Conditional release of legal claims
Additional T erms
• Expedited processing (within 120 days of application submittal) • Fee structure adjustments (no development impact fees applied to inclusionary units) • CEQA exemption under AB 130
14 Affordable Housing and Fiscal Considerations
Additional Notes
• Estimates are preliminary
• Fees may be deferred to project completion
• In addition to above impact fees; applicant to pay housing inpact fees of approximately $1.1M for difference between local affordability requirement and 13% inclusionary units • Estimated contribution to housing fund is approximately $2.6M, including redirected art fees
15 Category Original Project Revised Project
Estimated Impact Fees $15.8M $14.1M
Affordable Units 78 50
Public Art Contribution Standard
Portion (~$1.5M)
redirected to Affordable
Housing Fund
Key Policy Considerations
• Relative merits of original vs. revised project
• Height and massing tradeoffs
• Affordability tradeoffs
• Fiscal implications
• Community objectives
16 Recommendation
Consider directing staff to:
• Add Lot A (APN 124-28-045) to the Housing Element Sites Inventory, which would enable consideration of a revised Builder’s Remedy 2.0 project 17 Builder’s Remedy 2.0Builder’s Remedy 1.0