With office developments on the rise in downtown Palo Alto, three City Council members are calling for the city to consider zoning changes that would protect the character of the shopping area by restricting ground floors to retail use at streets throughout downtown.
The city already requires ground-floor retail in the most prominent section of downtown, mostly along University Avenue. This requirement, however, is restricted to the narrow "Downtown Ground Floor Retail Overlay" district and not the neighborhood as a whole. Three years ago, the council decided to narrow the area where ground-floor retail is protected by removing the restriction from 13 "peripheral" properties along University and Hamilton avenues and Alma and High streets.
The council's 2009 revision to downtown zoning was prompted largely by economic forces. With downtown vacancies on the rise in the aftermath of the Great Recession and hovering above 5 percent, the council voted to scrap a law that allowed developers in the "downtown core" to seek exceptions from the city's ground-floor-retail requirement. At the same time, the city removed the retail requirement from downtown's "peripheral areas" to allow offices to move in to these areas. The goal at the time was to maintain the vitality of downtown and stem the loss of revenue as the retail sector faltered, a planning department report noted.
Now that downtown economy is once again thriving and applications for office developments are on the rise, Vice Mayor Greg Scharff, Councilman Greg Schmid and Councilwoman Karen Holman are urging the city to reconsider the 2009 decision and examine other areas in which retail should again be required at street level.
The three council members cite several downtown properties that have shifted from retail to office since the 2009 decision, including the buildings once occupied by Fraiche Yogurt, the Blue Chalk Cafe and Jungle Copy. Other stores, including long-standing Palo Alto retailers, "are rumored to be under consideration for conversion to office use," the trio wrote in a colleagues memo that the council is scheduled to discuss Monday night, Nov. 5.
"In particular, the Emerson Street corridor provides a rich retail-restaurant corridor, including Gordon Biersch, Mantra, Empire Grill and Tap Room, Buca de Beppo, Stanford Florist, Richard Sumner Gallery and other establishments, all of which are now vulnerable to office conversion."
The topic of downtown office development has taken on greater urgency in recent months as the city has received several major applications for large office buildings. These include the four-story Lytton Gateway project that the council approved in May, which includes retail at street level but consists mostly of office space.
Offices also comprise the lion's share of Charles "Chop" Keenan's proposed four-story development at 135 Hamilton Ave.
Both of these proposals are dwarfed, however, by John Arrillaga's proposal for a new "arts and innovation district" on University Avenue, which would include a theater and four office towers, one of which would be 10 stories tall.
Arrillaga's proposal also includes dramatic changes to the area around the downtown Caltrain station, including redesigned transit connections and new pedestrian paths and bikeways. With these improvements in mind, the three council members advise that the city "examine the pedestrian-retail environment in the Downtown Area and consider an extention of the (Ground Floor retail) Zone to the emerging 'gateway' areas of Lytton, University, Alma, Hamilton and High streets."
"Given the changes in the economic climate in Palo Alto and Silicon Valley, particularly recent and proposed substantial increases in downtown office space, the city should examine options to assure a vital retail environment and services to support Downtown and the community," the memo concludes. "This is an appropriate time to re-evaluate the rules for Ground Floor Retail in the Downtown Commercial District."