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CITY COUNCIL
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: September 14, 2026
Report #: 2604-6296
TITLE
PUBLIC HEARING / QUASI-JUDICIAL. 375 Hamilton Avenue [26PLN-00050]: Request for Major Architectural Review Approval for the Construction of a New Six-Story Parking Garage with a Total of 265 Parking Spaces on the Existing Surface-Level Parking Lot D. CEQA Status: Prior Environmental Impact Report Certified (Council Resolution No. 9818, February 11, 2019). An Addendum to the Previously Certified Environmental Impact Report (SCH# 2017052040) has Been Prepared in Accordance with CEQA Guidelines Section 15164. Zoning District: PF (Public Facilities).
RECOMMENDATION
Staff recommends that the City Council (CC):
1. Consider the Addendum to the previously certified Environmental Impact Report (EIR) (Council Resolution No. 9818, February 11, 2019); and
2. Approve the Major Architectural Review (AR) application based on findings and subject to conditions of approval in the Record of Land Use Action (RLUA) in Attachment B.
EXECUTIVE SUMMARY
The subject application is a request from City of Palo Alto Public Works Engineering for Major Architectural Review for a new six-story parking garage with 265 parking spaces at 375 Hamilton Avenue (Capital Improvement Project PE-15007), on an existing 86-space surface parking lot (Lot D, APN 120-15-086). The proposed project location is provided in Attachment A.
The project description is provided in Attachment D and project plans are provided in Attachment E.
Staff finds that the project is consistent with relevant plans, policies, and regulations adopted by the City and recommends that the City Council recommend approval of the project based on findings and subject to conditions of approval in the Record of Land Use Action (RLUA).
BACKGROUND
The Downtown Parking Garage project was first introduced in the City Council’s 2014 Infrastructure Plan as part of the City’s broader effort to improve downtown parking availability.
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Between 2017 and 2018, Watry Design, Inc. (Watry) completed the preliminary design and environmental review for a 338-space, six-level parking structure, which included five levels above grade and one level below grade, on Lot D (Hamilton Avenue and Waverley Street). The City Council certified the Environmental Impact Report (EIR) and approved the Major Architectural Review application for the parking garage in February 2019. Shortly thereafter, the project was placed on hold to allow further evaluation of alternative parking management strategies.1 A timeline and history of the previous application and recent discussions is available online.2 However a brief summary of Council’s previous actions as well as the various boards and the Planning and Transportation Commission (PTC)’s feedback on the previously approved project is provided for informational purposes:
December 12, 2016: Council directed cost and impacts analysis and directed staff to proceed with design and environmental review.3
April 11, 2017: Council provided direction on legislative approach. 4 May 31, 2017: PTC Scoping Meeting. 5
August 24, 2017: Historic Resources Board (HRB) Study Session. 6 September 7, 2017: Architectural Review Board (ARB) Study Session. 7 February 15, 2018: ARB hearing to review the project plans and hear public testimony regarding the Draft EIR.8
June 21, 2018: ARB hearing to consider the Draft EIR published May 18, 2018, and provide comments on the proposed design. 9
1 City Council, February 11, 2019; SR #9263
https://portal.laserfiche.com/Portal/DocView.aspx?id=101477&repo=r-704298fc 2 Parking Garage Timeline and History is available online at: https://www.paloalto.gov/Departments/Public- Works/Engineering-Services/Engineering-Projects/Downtown-Parking-Garage-Project 3 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2016/id.-7418-downtown-parking-garage-site-and-design-contract-approval.pdf 4 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/planning-and- transportation-commission/2017-agendas-minutes-and-reports/ptc-05.31.17-3.pdf 5 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/planning-and- transportation-commission/2017-agendas-minutes-and-reports/may-31-2017-staff-report-8026.pdf; https://midpenmedia.org/planning-transportation-commission-49/ 6 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/historic-resources- board/2017/375-hamilton-ave-
id8329.pdf?_gl=1*1mtcheg*_gcl_au*MTgzMTEyOTQ0Ni4xNzYyNDkzMDg2*_ga*NjU3MTA1ODUyLjE3NjI0OTMwO Dk.*_ga_G4NQGK6D25*czE3NjI1NTU3MjgkbzYkZzEkdDE3NjI1NTY3MDckajE5JGwwJGgw; https://midpenmedia.org/historic-resources-board-42/;
https://www.cityofpaloalto.org/civicax/filebank/documents/62562 7cityofpaloalto.org/civicax/filebank/documents/61802
8 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/architectural- review-board/2018/375-hamilton-id8776.pdf
9 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/architectural- review-board/2018/375-hamilton-id-8918.pdf
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February 11, 2019: Council certified the Final EIR and Approved a Record of Land Use Action (RULA) approving Architectural Review Application 17PLN-00360. 19 In December 2023, Council directed staff to resume work on the Downtown Parking Garage project, with a new goal of integrating it with future affordable housing development on the site.20 This direction aligns with the City’s 2023–2031 Housing Element,21 specifically Program
1.4, which identifies the redevelopment of up to six City-owned surface parking lots to accommodate approximately 290 affordable housing units. The Housing Element also states that any displaced public parking should be replaced to maintain downtown access. In this context, the proposed redevelopment of Lot T (existing 52 surface parking spaces) with a seven- story affordable housing project has further reinforced the interest in replacement parking capacity.
To advance these objectives, Council authorized a contract with Watry Design, Inc. in December 2024 to provide design, environmental review, and construction administration services for a new parking garage.22 The scope included development of preliminary design options that maximize parking supply while accommodating a future residential component.
On April 14, 2025,23 staff presented multiple design options to Council. Council directed staff to proceed with Option 1a, which included a six-level, above-ground parking structure with 274 spaces and a reserved area for future affordable housing with separate access from Waverley Street.
As project design has advanced, the total number of parking spaces has been reduced from 274 to 265 spaces, primarily due to design modifications required to accommodate updated electrical infrastructure. Changes in regulations no longer allow certain electrical services to be located below grade, necessitating additional above-grade space for these utilities and resulting in the loss of approximately one parking stall per level. The design also includes expanded electrical room space at Level 1 to support emergency power and future electrical capacity for the anticipated residential component. In addition, the project incorporates a larger trash enclosure to accommodate refuse storage and collection for the adjacent property at 560 Waverley Street, which currently has a zero-lot-line condition.
On December 4, 2025,24 the ARB conducted a study session to review preliminary design concepts, including three façade options based on Council’s selected scheme. The ARB provided 19 https://www.paloalto.gov/files/assets/public/v/1/public-works/engineering-services/webpages/pe-15007- downtown-parking-garage/375-hamiltion-rlua-executed.pdf?t=40790.62 20 City Council, December 11, 2023; Item #8; SR #2309-2043 https://portal.laserfiche.com/Portal/DocView.aspx?id=69368&repo=r-704298fc 21 Housing Element, Chapter 5, page 5-9: https://www.paloalto.gov/files/assets/public/v/1/planning-amp- development-services/housing-element/housing-element_2023_2031/palo-alto-housing-element.pdf 22 City Council, December 2, 2024, SR#2410-3609
https://portal.laserfiche.com/Portal/DocView.aspx?id=111841&repo=r-704298fc 23 April 14, 2025, City Council Report: https://portal.laserfiche.com/Portal/DocView.aspx?id=162794&repo=r- 704298fc&searchid=59ac5e2c-f44f-498a-90b5-a542bb41464a
24 December 4, 2025, ARB report:
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generally supportive feedback on the project’s overall direction, materials, and pedestrian- oriented design. The Board Members preferred Option 2 and 3, however, the ARB emphasized the need for some refinement as discussed further in the Analysis.
Project Description
The proposed project, as shown in Attachment E, consists of a six-story above-grade parking structure containing 265 parking spaces and a designated area along Waverley Street reserved for future affordable housing, consistent with City Council’s direction and preliminary ARB review on December 4, 2025. The project would replace the existing surface parking lot on the site, which currently provides 86 public parking spaces. In addition to replacing on-site parking, the project is intended to offset the anticipated loss of 52 public parking spaces from the redevelopment of Lot T, resulting in a net increase of 128 parking spaces in the downtown area.
Of this total, 25 spaces are planned to support the future affordable housing component.
As the current proposal does not include construction of the housing component, the reserved area is proposed to function as a temporary public plaza. The plaza design incorporates expanded landscaping, seating opportunities, and hardscape areas to support flexible outdoor use. The project also includes street improvements along the Hamilton and Waverley street frontages to modify the sidewalks as well as new street trees to reinforce the streetscape and support the Hamilton Avenue District design goals.
At the roof level, the structure includes a steel lattice framework designed to accommodate photovoltaic panels. In addition, a public art installation is proposed along the Hamilton Avenue façade, to be developed by artist Amy Landsberg in coordination with the City’s Public Art Program.
Requested Entitlements, Findings, and Purview:
The following discretionary applications are being requested:
Architectural Review – Major (AR): The process for evaluating this type of application is set forth in Palo Alto Municipal Code (PAMC) Section 18.77.070. Major AR applications are reviewed by the ARB, and recommendations are forwarded to the Planning & Development Services Director for action. In accordance with PAMC Section 18.40.170, the director may forward a decision for final action to the City Council, which is the process used for this application. AR projects are evaluated against specific findings. The findings for approval are provided in Attachment B.
Development Standards Exception: PAMC Section 18.28.060 (e) allows for an increased floor area ratio and building height, as well as reduced setbacks, to accommodate public parking garages within the Downtown District. Additional findings for approval of this exception are not required. The project is a parking garage in the Downtown District and therefore is eligible by right for this exception.
Neighborhood Context
The project site is located within Palo Alto’s Downtown business district and within the Downtown Parking Assessment District at the intersection of Hamilton Avenue and Waverley Street, in an area characterized by a mix of civic, commercial, office, residential, and public parking uses. The site is currently developed with a surface level parking lot with 86 spaces and 9 8
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is surrounded by a variety of low to mid-rise buildings. Immediately surrounding the site are commercial buildings and restaurants along Waverley Street, All Saints Episcopal Church to the east, the AT&T building to the west and U.S. Post Office across Hamilton Avenue to the south.
The proposed six-story parking garage would replace the existing surface parking lot.
ANALYSIS
Staff evaluated the project in accordance with the Comprehensive Plan, Zoning Ordinance, and other applicable goals and policies of the City and found the project consistent with all applicable standards, as detailed further herein.
Comprehensive Plan, Area Plans, and Guidelines31
The Comprehensive Plan designation for this site is Regional/Community Commercial. This designation is intended for larger shopping centers and districts that have a wider variety of goods and services than the neighborhood shopping areas. Examples include Stanford Shopping Center, Town and Country Village, and University Avenue/Downtown. In some locations, residential and mixed-use projects may also locate in this category. The proposed parking garage replaces existing surface parking Lot D within the Downtown area.
This net increase in parking capacity supports several key Comprehensive Plan goals related to mobility, economic vitality, and land use efficiency, including:
Mobility (Policy T-3.1 and T-3.4): Expanding parking supply in the downtown core enhances access for residents, visitors, and employees, and supports the City’s transportation management and parking efficiency goals. Business and Economic Vitality (Goal B-1): Improved downtown parking availability supports local businesses by facilitating customer access and sustaining the economic health of the Downtown area.
Land Use (Goal L-1 and Policy L-2.5): The project efficiently utilizes publicly owned land to accommodate both public parking and future housing, aligning with the City’s strategy to integrate civic and residential uses within the downtown.
Housing Element
The proposed garage is designed to accommodate a future residential building to the east, ensuring that the site contributes to a cohesive urban block and supports the long-term vision for Downtown livability. Although the project does not include construction of an affordable housing project, its design accommodates potential future residential development consistent with Housing Element Program 1.4, which identifies six City-owned surface parking lots for potential redevelopment with replacement public parking and affordable or workforce housing.
Collectively, these sites have an estimated capacity of approximately 290 housing units on 4.19 acres.
31 The Palo Alto Comprehensive Plan is available online:
https://www.paloalto.gov/files/assets/public/v/4/planning-amp-development-services/3.-comprehensive- plan/comprehensive-plan/full-comp-plan-2030_with-dec19_22-amendments.pdf 9 8
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The project site is also identified in the Housing Element’s Housing Inventory with a projected capacity of 44 units, including 22 low-income and 22 very-low-income units. This projected capacity is based on site acreage and density assumptions and does not require the site to be developed with exactly 44 units. The site may be developed with other uses, provided that the City continues to maintain adequate housing capacity to meet its RHNA obligations.
Downtown Urban Design Guidelines
The project is located within the boundaries of the Downtown Design Guidelines, within the Hamilton Avenue District. The Hamilton Avenue District Goals include:
Promote Hamilton Avenue as an active mixed-use district, which comfortably accommodates larger scale commercial office, civic, and institutional buildings. Maintain Hamilton Avenue as a pleasing, tree-lined pedestrian environment with complimentary outdoor amenities to offset the urban intensity which naturally results from the provision of transit service and convenient surface parking.
Key guidelines within the plan relevant to the proposed project include providing pedestrian links from Hamilton Avenue to University Avenue in conjunction with development of the alleys and parking lots. They also recommended “strong building volume” and “opportunity for pedestrian friendly use” at this corner.
The proposed project is consistent with the Downtown Urban Design Guidelines in that the project reinforces the established urban character, promotes pedestrian activity, and generally provides a cohesive relationship with the surrounding downtown context as illustrated in Figure
1. The six-story building replaces an existing surface parking lot with a more efficient land use that supports both public parking and future affordable housing. The design incorporates articulated façades, high-quality materials, and screening elements to break up massing and enhance visual interest, consistent with the guidelines’ emphasis on human scale and architectural quality. At the street level, the project improves the pedestrian experience through widened sidewalks, active ground-level elements, and landscaping/trees along Hamilton Avenue and Waverley Street consistent with the Hamilton Avenue District goals. Until the future housing is developed, the inclusion of a temporary public plaza east of the garage further contributes to downtown’s public realm, aligning with the City’s vision for an accessible, vibrant, and well-designed urban environment.
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Figure 1: Downtown Urban Design Guidelines, page 52
Zoning Consistency Analysis
The project site is zoned Public Facility (PF). Allowed uses within this zone district include public facilities and uses owned or leased by the City of Palo Alto. Both the parking garage and any future affordable housing on the site are permitted uses, so long as the site continues to be owned or leased by the City.
The proposed plans exceed the allowable height, floor area, and setbacks, including a seven- foot special setback on Hamilton Avenue. However, in accordance with PAMC Section
18.28.060(e), on PF zoned sites within the Downtown business district where the primary use is a parking facility and it is owned or leased and operated or used by the City of Palo Alto, Council may modify any development standard set forth in PAMC Section 18.28.050 and setbacks lines established by a special setback map to achieve community objectives. The code states that these exceptions shall be included in the review of the applicable development review process.
The project includes construction of a public parking garage to support parking for the downtown area. An analysis of the project’s consistency with the PF Zone District Development Standards is included in Attachment C.
Multi-Modal Access
Vehicular ingress and egress are proposed via a combined entrance and exit along Hamilton Avenue near the southern corner of the site. The existing one-way service access (Lane 21), with entry from Waverley Street and exit to Bryant Street, would be retained and enhanced with architectural paving, landscaped planters, and upgraded lighting as illustrated in Figure 2.
As the City Council has not yet determined whether the garage will operate as a paid facility, the design includes space to accommodate potential future gate infrastructure at the garage entry and exit. If a gate is provided, the EIR requires implementation of mitigation to prepare a queuing analysis to ensure that queuing onto Hamilton Avenue does not occur.
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The proposed electrical and trash rooms are strategically located to support efficient operations. This includes provisions for trash and recycling serving both the project site and an adjacent property on Waverley Street (Lot 85), as well as the publicly accessible plaza. Sidewalk improvements are proposed along both Hamilton Avenue and Waverley Street, with widths increased to approximately 12 feet and 17 feet and 10 inches, respectively, before tapering to match existing conditions, thereby enhancing pedestrian circulation and streetscape quality. A pedestrian pathway through the structure provides a connection from the bicycle parking area near Waverley Street to Lane 21 adjacent to the CVS building.
In addition, the proposed separation between the new garage and the building at 560 Waverley Street (lot 84) creates an opportunity for a pedestrian-oriented passageway aligned with the secondary stair and vertical circulation elements. This pedestrian alley provides a visual connection to All Saints Episcopal Church and is designed to include architectural paving, landscaping, seating, and decorative lighting as illustrated in Figure 3. As shown on Plan Sheet
2.1 (Attachment E), this interior accessway connects the public plaza to the garage and promotes pedestrian circulation.
Although there are currently no bicycle lanes along the project frontage, the 2026 Bicycle and Pedestrian Transportation Plan (BPTP) includes a planned Class IV bicycle lane along Hamilton Avenue as part of its long-term vision. The plan does not provide details such as which side of the road the bike lane may be placed. If implemented in the future, the project is not anticipated to preclude the City’s ability to accommodate bicycle improvements. The proposed project would result in more vehicles entering and exiting the site on Hamilton Avenue but would also reduce curb cuts on both Hamilton Avenue and Waverley Street. The proposed entrance is in approximately the same location as the entrance to the existing parking lot.
The proposed project would narrow the roadway width from the existing 50 feet to 43.5 feet.
The existing bus stop would remain but would be temporarily relocated during construction in accordance with VTA recommendations. This project also includes the installation of revised traffic signals and streetlights and new street trees to further improve the public right-of-way at the intersection.
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Figure2: Proposed Access &Circulation, Sheet 2.1
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Figure 3: Renderings from the Plan Set on Sheet 3.15 Attachment E Consistency with feedback received from ARB
At its December 4, 2025, study session, the ARB provided preliminary feedback on the proposed project, identifying key areas for further refinement.
At its June 4, 2026, hearing33, the ARB reviewed the revised project and recommended approval to the City Council based on required findings and subject to conditions of approval in the Record of Land Use Action (Attachment B). In the motion, the ARB also recommended considering a minimum 5-foot wide clear path adjacent to the staircase to facilitate pedestrian access and circulation. The intent of this recommendation was to ensure that the staircase and associated site improvements do not impede access to future development potential of the adjacent plaza area. The project plans have now been revised to reflect this recommendation.
Consistency with AR Application Findings
Pursuant to PAMC Section 18.77.070, approval of a Major AR application requires compliance with the required findings set forth in PAMC Section 18.76.020(d). Staff found the project to be consistent with these findings as detailed in Attachment B. 33 ARB, June 4, 2026, SR#: 2601-5814:
https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=4b737cf9-2819- 4306-b1ac-06c99276576b
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FISCAL/RESOURCE IMPACT
The existing contract with Watry Design Inc. covers the phases of the project design and environmental review work. Funding for this continued design is available in the Fiscal Year 2027 Adopted Capital Budget for the New Downtown Parking Garage project (PE-15007). The most recent cost estimate completed in May 2026 resulted in a total project cost of $41 million, an increase of $7 million from the funding programmed in the Fiscal Year 2027-2031 Adopted Capital Budget. Project construction is anticipated to be funded through issuance of Certificates of Participation (COPs). Staff will continue to review cost estimates at various stages of design and conduct value engineering as appropriate to reduce costs while delivering the project scope. The project’s funding plan will be updated as part of the Fiscal Year 2028 budget preparation.
Staff anticipates returning to Council at a subsequent Council meeting with an award of contract for a construction manager and a contract amendment with Watry for additional design services associated with utility relocation to a joint trench and other design changes needed to advance the project.
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 the subject property at least ten days in advance. Notice of a public hearing for this project was published in the Daily Post and postcard mailing occurred on September 4, 2026, which is 10 days in advance of the meeting.
As of the writing of this report, no written comments have been received. During the ARB preliminary application review in 202535 the property owner at 560 Waverley Street provided verbal comments regarding concerns about trash pickup and storage limitations created by the new parking garage. Trash collection would occur along Lane 21, with service vehicles entering from Waverley Street and exiting onto Bryant Street through a one-way circulation pattern. The project also proposes a new trash enclosure to accommodate trash and recycling service for the adjacent property on Waverley Street (Lot 85), as well as waste generated from the project’s publicly accessible plaza area.
On June 3, 2026, a resident submitted written comments regarding the project prior to June 4, 2026 ARB meeting. The commenter expressed concern that the proposed parking garage at 375 Hamilton Avenue and the redevelopment of Lot T at 450 Lytton Avenue should be considered together for purposes of CEQA because the parking garage is intended, in part, to replace public parking spaces displaced by the redevelopment of Lot T. The commenter also requested that the project include a public restroom to serve pedestrians in the area, noting that a previously existing public restroom at the site was removed in anticipation of the parking garage development. In addition, the commenter raised concerns regarding vehicular and pedestrian circulation at the Hamilton Avenue and Gilman Street intersection and requested that the City evaluate the existing traffic signal operations and require any necessary modifications or future 35 ARB, December 4, 2025, SR#: 2510-5376:
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signal changes to be reviewed as part of the project. With respect to the CEQA concern, staff have determined that the parking garage at 375 Hamilton Avenue and proposed housing project at 450 Lytton Avenue are sufficiently independent – in that they serve different purposes and can be implemented independently – that it is appropriate to analyze them separately under CEQA.
ENVIRONMENTAL REVIEW
On February 11, 2019, City Council certified the Final Environmental Impact Report (EIR) for the Downtown Parking Garage Project at 375 Hamilton Avenue (Resolution No. 9818), and adopted findings, a statement of overriding considerations, and a Mitigation Monitoring and Reporting Program (MMRP) in accordance with the California Environmental Quality Act (CEQA). The certified EIR evaluated a project consisting of a five-level above-grade parking structure with one level of below-grade parking, totaling 338 parking spaces.
The current proposal differs from the previously approved project in that it includes a six-level above-grade parking structure with no below-grade parking and a reduced total of 265 parking spaces. It also includes removal of the retail space and inclusion of a new plaza area. To evaluate these changes, an Environmental Checklist (EIR Addendum) has been prepared pursuant to CEQA Guidelines Sections 15162–15164 to determine whether the project would result in new or more severe significant environmental impacts than those identified in the certified EIR.
Based on this analysis, the proposed modifications do not result in new significant impacts or a substantial increase in the severity of previously identified impacts. The project remains within the scope of the impacts analyzed in the 2019 EIR, and all applicable mitigation measures continue to apply. Accordingly, preparation of a subsequent or supplemental EIR is not required, and an Addendum to the previously certified EIR has been prepared in accordance with CEQA Guidelines Section 15164.
ATTACHMENTS
Attachment A: Location Map
Attachment B: Draft Record of Land Use Action
Attachment C: Zoning Consistency Analysis
Attachment D: Applicant’s Project Description
Attachment E: Project Plans and EIR Addendum
APPROVED BY:
Jonathan Lait, Planning and Development Services Director