CITY COUNCIL
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Planning and Development Services
Meeting Date: August 17, 2026
Report #: 2607-6521
TITLE
2100 Geng Road [24PLN-00356 & 24PLN-00357]: Determination of Impact Fees Following Fee Protest
RECOMMENDATION
This report is informational and does not require action by the City Council.
BACKGROUND
On March 16, 2026, City Council approved a Site and Design application, Conditional Use Permit, and Vesting Tentative Map for development of 145 for-sale townhome units located at 2100 Geng Road. The effective date of the approval was April 16, 2026, corresponding with the effective date of the related Park Improvement Ordinance No. 5696 for project improvements located on City park land.
A March 16, 2026, supplemental report informed the City Council that the applicant had identified a potential issue with the calculation of Parkland Dedication in-lieu fees and intended to file a fee protest pursuant to the City's fee protest procedures while staff evaluated whether recent legal developments warranted a revision to the fee calculation.
On May 13, 2026, the applicant submitted a timely fee protest pursuant to Palo Alto Municipal Code (PAMC) Sections 16.64.060 and 16.64.070 regarding the impact fees applicable to the proposed residential development, which includes 36 detached units and 109 attached units.
The fee protest requested that the impact fee calculation recognize the site’s existing baseline condition, including demolition of the existing 191,900 square feet of office gross floor area, so that the project’s park-related fee obligation reflects the net new impact generated by the proposed development (Attachment A).
ANALYSIS
Pursuant to PAMC Sections 16.64.060 and 16.64.070, an applicant may protest the imposition of an impact fee by submitting a written notice identifying the factual and legal basis for the
protest. Following review of the protest, supporting evidence, and any additional information, the Director of Planning and Development Services issues a written determination establishing whether the fee should remain unchanged or be increased or decreased.
After reviewing the information provided and in consultation with the City Attorney's Office, the City accepted the fee protest and agreed that the impact fee calculation should account for the demolition of the existing 191,900 square feet of office gross floor area by applying a credit towards the Parkland Dedication fee. In addition, staff updated the fee calculations to apply the appropriate residential fees, with the single-family residential rate applied to the 36 detached units and the multi-family residential rate applied to the 109 attached units. These residential fee adjustments affected the General Government, Library, Public Safety, and Community Center impact fee categories.
The following table details the revised determination of fees applicable to the project:
FEE CATEGORY PREVIOUS FEE APPLICABLE FEE CREDIT NET FEES DUE General Government $ - $213,408.55 ($249,661.90) $ -
Library $152,061.00 $363,374.41 ($175,396.60) $187,977.81 Public Safety $ - $169,481.68 ($211,665.70) $ -
Community Center $255,759.00 $609,836.84 ($294,182.70) $315,654.14 Parkland Dedication /
Parks Impact $7,898,408.10 $9,037,636.52 ($3,781,663.92) $5,255,972.60 Public Art In-Lieu* $585,000.00 $ 585,000.00 $585,000.00 TOTAL $ 6,344,604.55
*Based on estimated construction valuation of $58.5 million, per application submitted 2/12/2026, and not included in previous total fee calculation.
Consistent with Government Code Section 65589.5, subd. (o)(2)(A), the General Government, Library, Public Safety, and Community Center impact fees and corresponding fee credits are based on the FY 2025 fee schedule in effect on July 8, 2024, the date the project's SB 330 preliminary application was submitted. The Park Dedication impact fees and associated credits are based on the FY 2026 fee schedule because those fees are adjusted annually for inflation and are not subject to SB 330 fee freeze provisions. The resulting impact fee calculations reflect application of the appropriate residential fee rates and applicable fee credits, including the proportional credit associated with demolition of the existing office building applied to the park fees. This approach carries that proportional credit through to the park fee actually being charged, so the final parks obligation more closely reflects the Project’s net new parks impact rather than treating the site as if it were being developed from a vacant baseline. This determination resolves the fee protest submitted by the applicant, incorporates staff's adjustments to apply the appropriate residential impact fee rates, and establishes the impact fees due for the project based on the information currently available to the City.
FISCAL/RESOURCE IMPACT
All associated staff costs associated with processing this application are recovered through applicant-paid fees established in the Fiscal Year 2026 Adopted Municipal Fee Schedule. The previous assumed total impact fee amount for the proposed development was $8,306,259.
With the applied credits and adjustments for the appropriate residential impact fee rates the revised total impact fee is $6,344,604.55. Staff applied the appropriate residential fee rates, including the single-family residential rate for the 36 detached units and the multi-family residential rate for the 109 attached units, and applied the applicable credits to the affected the General Government, Library, Public Safety, and Community Center impact fee categories.
STAKEHOLDER ENGAGEMENT
The proposed project went to multiple hearing bodies including the Architectural Review Board, Planning and Transportation Commission, and City Council.
ENVIRONMENTAL REVIEW
This informational report is not a project under the California Environmental Quality Act (CEQA) and does not require environmental review.
ATTACHMENTS
Attachment A: Applicant Fee Protest Letter
APPROVED BY:
Jonathan Lait, Planning and Development Services Director