November 18, 2024 Mr. Jonathan Lait Director Planning & Development City of Palo Alto 250 Hamilton Avenue, 5th floor Palo Alto, CA 94303 Re: Proposed text Amendment to PAMC §18.18.120 Noncomplying (Grandfathered) Facilities Dear Mr. Lait, Hayes Group Architects has been working for building owners in the Palo Alto community since 1989. During this time, I have witnessed a natural evolution of Palo Alto’s downtown with new buildings replacing older buildings unable to support the requirements of our modern lifestyle and workstyle. Even old buildings that were rendered non-complying because of Floor Area Ratio limits changing over time, were allowed to be replaced in newly configured buildings without losing floor area -- until 2016, when the City’s 25-year old interpretation of the zoning ordinance was abruptly changed, without adequate analysis or public input. It is respectfully submitted that it is time to reconsider that poorly-conceived 2016 action and move forward with a corrective text amendment to the Palo Alto Municipal Code, particularly § 18.18.120. History In 1986, the City Council adopted Ordinance 3696, put in place as a reaction to the intensification of development and traffic congestion in Palo Alto’s downtown. The ordinance reduced the amount of floor area allowed on a parcel in the CD-C, CD-N and CD-C zoning districts from what had previously been allowed. It also prudently made provisions for buildings which were rendered “non-conforming” as a result of the changes in the zoning ordinance, because those buildings now exceeded the newly-reduced floor area allowed on a parcel. Ordinance 3696 provided that those buildings should be deemed to be “compliant facilities” and allowed their owners to remodel and replace their floor area in new or renovated buildings that better served the community and the built environment.
Ordinance 3696 as adopted 1986: (c) Noncomplying Facilities. Chapter 18.94 notwithstanding, a noncomplying facility existing on the effective date of this chapter and which, when built, was a complying facility, shall be deemed to be complying. Such a facility shall be permitted to be remodeled, improved or replaced without necessity to comply with site development regulations. Any such remodeling, improvement or replacement shall result in increased floor area, height, length or any other increase in the size of the facility only pursuant to the exceptions to floor area ratio regulations set forth in section 18.48.060. The text of the Ordinance written above could have been clearer with regards to the restrictions for remodeling, improvement or replacement, as its interpretation initially led to some confusion in the Planning Department. In March 1988, to mitigate this lack of clarity, staff prepared a formal interpretation of Ordinance 3696 and issued CMR185:8 for review by city council. The CMR reasonably concluded that buildings could be reconfigured in terms of length, height and width so long as the existing floor area was not increased. One benefit of this interpretation, among others listed in the CMR, was that it will: “Permit reasonable flexibility for buildings undergoing remodeling and/or replacement so that improved building design, that the City has identified over time as contributing to the enhancement of Downtown Palo Alto, will be encouraged.” Staff also concluded that such an interpretation would not result in increased non-conformity or non-compliance in terms of floor area permitted in the rezoned areas, since floor area would not be allowed to increase- it would only be replaced. And staff further explained that the interpretation adopted in CMR 185.5 would not result in increased non-compliance in terms of building height since any size building (floor area) is limited to 50 feet in height. For more than 25 years the City followed the interpretation set out in the CMR above (according to a 2022 staff report) and the City repeatedly approved projects in the CD Districts consistent with this interpretation until 2015. A partial list of pre 2015 projects (just by Hayes Group Architects) approved by the City using this interpretation includes the following: 171 University 1996 100 Forest (705 Alma) 1998 317-323 University 2002 101 Forest (657-663Alma) 2004 270 University 2005 278 University 2006 265 Lytton 2006 248 Hamilton 2012 301 High 2012 611 Cowper 2012 There were other projects, in addition to those listed above, that the City approved during this period designed and built by others. All these City approved projects had at least two things in common: 1) they all replaced existing non-complying floor area in the replacement building and, 2) they all increased the height of the building over the building that had previously existed. And, consistent with staff’s rationale
for issuing the CMR in 1988, these new buildings were better buildings contributing to the enhancement of the Downtown. However, on January 11, 2016, the City Council adopted Ordinance 5373 that changed the long-standing interpretation afforded by CMR 185:8 and inserted new language in PAMC §18.18.120. Below is an excerpt from the January 11, 2016, staff report indicating the changed text: of the ordinance: 18.18.120 (a) Noncomplying (Grandfathered) Uses (1) The following uses and facilities may remain as legal noncomplying (grandfathered) uses, and shall not require a conditional use permit or be subject to the provisions of Chapter 18.70: (A) Any use which was being conducted on August 28, 1986; or (B) A use not being conducted on August 28, 1986, if the use was temporarily discontinued due to a vacancy of 6 months or less before August 28, 1986; or (C) Any office use existing on April 16, 1990 on a property zoned CD and GF combining, which also existed as a lawful conforming use prior to August 28, 1986, notwithstanding any intervening conforming use. (2) The grandfathered use in subsection (1) shall be permitted to remodel, improve, or replace site improvements on the same site, for continual use and occupancy by the same use, provided such remodeling, improvement, or replacement complies with all of the following: (A) shall not result in increased floor area: (B) shall not relocate below grade floor area to above grade portions of the building shift the building footprint; (C) shall not result in an increase in the height, length, building envelope, building footprint or any other increase in the size of the improvement. For purposes of this section, “building envelope” shall mean the three-dimensional shape and size occupied by an existing building. It is not the maximum, buildable potential of the site; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070; or (E ) in the case of medical, professional, general business or administrative office uses of a size exceeding 5,000 sf in the CD-S or CD-N district that are deemed grandfathered pursuant to subsection (1), such remodeling, improvement, or replacement shall not result in increased floor area devoted to such office uses. (F) The Director may approve minor changes to the building’s footprint, height,
length, and the building envelope through Architectural Review of minor aesthetic architectural improvements and to improve pedestrian orientation provided there is no increase to the degree of any non-complying feature. (b) Grandfathered Facilities: (1) Any noncomplying (grandfathered) facility existing on August 28, 1986 and which, when built, was a complying facility, may remain as a grandfathered facility and shall not be subject to the provisions of Chapter 18.70. (2) The Grandfathered facilities in subsection (1) shall be permitted to remodel, improve, or replace site improvements on the same site, for continual use and occupancy by the same use, provided such remodeling, improvement, or replacement complies with all of the following: (A) shall not result in increased floor area; (B) shall not shift the relocate below grade floor area to above grade portions of the building; (C) shall not result in an increase of the height, length, building envelope, building footprint, or any other increase in the size of the improvement; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070; (E) The Director may approve minor changes to the building’s footprint, height, length, and the building envelope through Architectural Review of minor aesthetic architectural improvements and to improve pedestrian-orientation provided there is no increase to the degree of any non- complying feature. The addition of a new and more restrictive definition of the “building envelop” and the addition of a new limitation to the existing “building footprint” (highlighted in red) in the 2016 Ordinance severely and unreasonably constrain the potential options for replacing floor area that previously had been allowed to be replaced in a new, modern building. That new text virtually locks in the existing three dimensional structure, regardless of how out-of-date or in need of replacement it may be. The current version of the Ordinance has become colloquially (and not admiringly) known as Palo Alto’s “shrink wrap” rule because the only building that can replace the existing building with the same floor area is one that matches the existing building’s envelop as though covered by a thin layer of plastic shrink wrap. The current ordinance impairs the vested rights of the owners of lawful non-conforming buildings, and essentially takes a building owner’s previously recognized right to replace their floor area in a new, modern building, something they had enjoyed since 1986 when the city made the deal with them. As noted above the 1986 ordinance states that they were still “Complying Facilities” despite their floor area exceeding the new floor area limits enacted in the 1986 ordinance. The impact of the ill-considered amendment in 2016 (Ordinance 5373) on the natural evolution of the Downtown is clear. Since 2016, there has only been one new commercial building approved and built under the new rules: Design within Reach. The Mills Florist building was approved under the new rules,
but because existing floor area had to be forfeited in the new building, it could not pencil and was abandoned. We have seen other buildings constructed since 2016, but they had been approved under the old rules or the existing floor area did not exceed the allowable 1:1 so no floor area had to be forfeited to build the new building. It is highly unlikely that an owner would choose to demolish an old building (even if no longer functional) in order to construct the same building in its place, or to erect a smaller building, forfeiting floor area of the existing building. The effect of the 2016 amendment has been paralyzing on our building stock and the natural evolution of the downtown. Downtowns need to be alive and change for the better. As staff reasoned 1988 in their CMR, buildings that exceeded the floor area limits were still “complying facilities” allowing them to remodel and replace their floor area in new buildings that better serve the community and the built environment. PROPOSED TEXT AMENDMENT To restore the rights of owners of buildings that exceed the floor area limits of the current site development regulations in PAMC §18.18.060, we respectfully suggest a minor, but effective, amendment to the zoning ordinance: subsections 18.18.120(a)(2)(C) and 18.18.120(b)(2)(C) should be removed. Removing these two sections will allow existing floor area to be replaced in new buildings that better respond to the natural and built environment. These new buildings may have different footprints, heights and envelops but they will be able to maintain their existing floor area without increasing the degree of existing non-compliance. BENEFITS The benefits to the downtown are new buildings that respond to the needs of the community, that connect with the street and sidewalk, that are consistent with the environmental and community initiatives of our time, and that can provide housing on upper floors. There is no downside. The commercial floor area exists. There is no increase in the amount of office space, just better buildings, fit for our time. Here are some additional benefits that will result from this text amendment: • Incentivize the building of housing in mixed-use buildings. If an owner can replace their existing commercial floor area, they are more likely to think about building a new building with housing on upper floors. If commercial floor area cannot be replaced this eliminates many, many, properties from redevelopment or as potential sites for housing • No increase in office space • Access for all those with disabilities • Meet all current building and life safety codes • Increased property taxes • Better buildings with daylighting and highly efficient HVAC systems and solar arrays • Better pedestrian experience and relationships to the public realm We are seeking a zoning code text amendment that addresses the benefits of retiring outdated, noncomplying buildings and encourages building owners to consider new opportunities for their properties without losing the existing floor area.
We look forward to continuing this discussion. Please call me at (650) 365-0600x15 if you have any questions. Sincerely, Ken Hayes, AIA Principal cc: Steve Reller, R&M Properties Mark Moragne, R&M Properties