Palo Alto Weekly

News - September 20, 2013

Developer's offer of police HQ might not trump traffic woes

City officials welcome new economic analysis but say traffic will be key to approval of Page Mill project

by Gennady Sheyner

Palo Alto officials on Monday both lauded and criticized a new tool for appraising proposed developments an economic analysis intended to determine whether the city is getting a fair deal when it allows developers to exceed zoning limits in exchange for public benefits.

The focus Monday night was a proposal by Jay Paul Company to construct two four-story office towers next to the AOL headquarters at 395 Page Mill and also to build the city much-coveted new police headquarters.

It didn't take long for the City Council to realize that the independent economic analysis was both imperfect and insufficient for making a decision on the Jay Paul development. Most council members agreed the deciding factor will not be economics but something much closer to the hearts of most Palo Altans traffic problems.

At 311,000 square feet, the development is the largest in the recent wave of "planned community" proposals, which are required to offer the public-benefits trade. In this case, development would be allowed to add the office complex to a site that is already built out. In exchange, the new police station would be built across the street at 3045 Park Blvd.

Several council members lauded the "first of its kind" report from the firm Applied Development Economics as a welcome addition to the council's decision-making tool kit. The report estimates Jay Paul would get a 17 percent profit from the development over a 30-year period, though this projection is based on assumptions that are far from certain, including a low interest rate and a hot real estate market.

But council members also found flaws in the appraisal, most notably that it included land costs of $33 million, despite the fact that the company already owns the site.

Some question the report's assumption that trimming the size of the office development would force Jay Paul to significantly shrink the public benefit in order to still realize a reasonable return on investment.

Everyone agreed that the real conversation will begin only after the traffic-impact analysis for the development is released early next year.

Councilman Pat Burt was the lead skeptic Monday, taking aim at both the economic report and the city's process for reviewing the Jay Paul proposal. The former planning commissioner said he was "baffled" by the consultant's decision to include the cost of land in the analysis.

Burt also rejected the report's finding that cutting the new development's size by half would make it financially impossible for the developer to offer the police building. He challenged the idea that a developer who constructs 150,000 square feet of prime office space in Palo Alto would not be able to afford public benefits.

"We've done this for years for developers of all kinds of projects for Palo Alto," Burt said. "We know there's big dollars left over for public benefits for projects well smaller than this."

Burt also voiced broader concerns about the city's process for reaching a decision on the Jay Paul project. Getting a new police building, Burt said, remains "an extremely high priority for the city," but the city's process for reaching this priority is backwards. He argued that the "planned community" zoning was traditionally used to encourage projects that have "intrinsic" benefits but that cannot be accommodated under existing zoning. The public benefits are amenities that go beyond these intrinsic benefits.

The zone change, he said, should not be a basis to "throw out zoning entirely" and allow something that's twice the size of what's allowed. The Jay Paul proposal, he said, "is not even in the ballpark for what the PCs have been about in our community, at least for the past 40 years."

He lobbied for the council to revisit the project after the economic analysis is updated, the traffic study is complete, the council gets a draft concept plan for California Avenue (which includes the Jay Paul site) and staff holds outreach meetings with the community. The primary question should be: What development is appropriate for the site?

"We need a time-out on this process so that we're making decisions on what we think is the right design for this area," Burt said.

Right now, he said, the city isn't having that kind of a discussion.

"We're reacting to a developer who comes forward and offers us a huge gift horse, and everything else is a reaction to the gift horse," Burt said. "That's not what the community wants."

Councilwoman Karen Holman, also a former planning commissioner, agreed the process is "backwards" and argued that by approving projects like Jay Paul's on a "piecemeal" basis, the council is effectively precluding development of the community's soon-to-be-adopted vision.

"We're eliminating what that vision might be or might become because we're doing this project by project," Holman said.

Even so, most council members found some value in the debate over Jay Paul's economics.

Councilwoman Gail Price called the economic analysis a useful and important exercise as the city tries to find the balance between development bonuses and community benefits. Vice Mayor Nancy Shepherd called the report "exactly what we should be doing so that we don't have to justify something that is very quantifiable and qualifiable."

In this case, the stakes are particularly high. The proposed buildings would have more square feet of office space between them than the entire downtown has seen in the past three decades, and they would stand a short stroll from the city's most congested intersection: El Camino Real and Page Mill Road. It doesn't help that the city is now weighing another planned-community-zone proposal that would enable a four-story office building at the intersection.

The proposed benefit is also unprecedented. The police building, valued at close to $50 million, is the council's top infrastructure priority, one that the city has been grasping for but failing to reach for more than a decade. For this reason, Shepherd argued Monday, the Jay Paul project should be taken very seriously, despite the glaring unknowns involving traffic.

Shepherd said she is concerned that in her four years on the council, the city hasn't made any progress on the new police building. A bond that would fund the police building would require support from two-thirds of the voters, a high threshold that she said would be difficult to reach. Recent surveys commissioned by the city showed about 60 percent of the voters expressing support for a new police headquarters.

"That is driving me to take this project very seriously, until public opinions can change," Shepherd said. "Based on the information we have from polling, we're not sure (they) changed enough. We know we have a 50 percent majority to go forward. We need a supermajority."

Berman, who had served on the citizens Infrastructure Blue Ribbon Commission before joining the council, agreed the police building is a top priority, though he was a bit hesitant to look to Jay Paul for answers. The council's Infrastructure Committee, which includes Berman, Shepherd, Mayor Greg Scharff and Councilman Larry Klein, is now considering a variety of possible measures, including raising the hotel-tax rate, to fund the police headquarters.

"I'm ... 100 percent confident that we can build a new public-safety building without this project," Berman said.

For Klein, much like for most of the council and for the handful of residents who addressed the council Monday night, traffic was the paramount concern. Staff was scheduled to present on Monday a preliminary look at the project's traffic impacts, but that presentation was deferred until early 2014 because of staff's concern with the assumptions on which the traffic report was to be based. Klein said he was concerned that evaluating the project's economics before getting a look at traffic is out of order.

"To me, the traffic study is a determining factor," Klein said. "We don't even get to a discussion of public benefits in my view until we decide that the traffic is something we can handle."

Comments

Posted by Doubtful, a resident of Another Palo Alto neighborhood
on Sep 17, 2013 at 8:52 am

> "A new public-safety building is vital to the future of
> our city," Berman said.

Right. Without a new public safety building, Palo Alto is going to wither, and just drop off the map.

The inmates have truly taken over the asylum.

Well, at least the bulk of the Council weren't fooled by this report.


Posted by pavoter, a resident of Barron Park
on Sep 17, 2013 at 8:52 am

The big problem with this is the rezoning to accommodate a new huge office building. That project would add even more strain to our traffic woes. Worse still, ABAG will demand even greater density to our city because of the jobs/housing imbalance.

The city is pushing rezoning at Maybell to appease ABAG. Removal of R-1 compatible homes and replace with tall townhouses. So the rezoning at Maybell is going to be a pattern for our city leaders to urbanize Palo Alto.

The problem is the willy-nilly rezoning R-1 homes to accommodate high density housing. The Maybell project sets a precedent for all of Palo Alto if the city prevails with its current wishes.


Posted by curmudgeon, a resident of Downtown North
on Sep 17, 2013 at 9:18 am

If the referendum fails, R-1 zoning is toast.


Posted by Bob , a resident of Community Center
on Sep 17, 2013 at 10:50 am

It's time for Palo Alto and all California cities to tell ABAG "where to go", and get legal help if necessary to do it!! Already popular California cites are overburdened by those who think it is their legal right to live where they choose... including this state in general. Our roads, our schools, our medical services cannot handle the influx - legal and illegal. There's plenty of room waaaay up in the Sierras or the desert or in the Valley, but not in the good-weather areas overpopulated now. Palo Alto has NO MORE ROOM. The overflow is squeezing the life of this town - not Atherton, not Portola Valley, not Los Altos and LA Hills, not Saratoga... and the list is quite long. The developers have spread their suffocating wings over our city - with help from the inside. This City Council must get some 'guts' - or find another job. And yes, if the Maybell referendum wins, R-1 re-zoniing can happen ALL OVER TOWN. WAKE UP PEOPLE!!


Posted by JS, a resident of Another Palo Alto neighborhood
on Sep 17, 2013 at 10:59 am

- The University North neighborhood suffers from parking problems and cut through traffic.
- University Avenue (downtown) is a traffic and parking disaster.
- The University South neighborhood suffers from parking problems (created by downtown problems)
- California Avenue suffers from parking problems.
- The Arastradero/Charleston Road corridor suffers from excess traffic
- The Page Mill corridor from 280 to El Camino Real is a traffic disaster in AM and PM
- The Oregon Expressway from 101 to El Camino Real is a traffic disaster
- Crossing town on Middlefield Road in AM and PM is filled with traffic
- Embarcadero Road at Paly and Town & Country is a traffic disaster almost all hours of the day.
- Park Blvd. (within 50 feet of project) is already an afternoon traffic gridlock not counting the Hohbach project that will be adding hundreds of cars to the mess.


I apologize for not listing all of the other bad parking and traffic areas within the City.

So Jay Paul wants to add a project that incrementally adds over 1,000 parking stalls. Because they are not planning to provide the full 4 stalls per 1,000 of new office space, we presume that they will be running bus shuttles to/from this project (read additional traffic). The project also includes a new Public Safety Building that will have police vehicles coming and going all day/night long (read additional traffic).

Jay Paul wants to create 311,000 sf of new office space. Who is going to work in this office space? Existing Palo Alto residents? Likely not; the space will likely be filled by predominantly by non-residents who commute to and from other cities. Palo Alto already suffers from a jobs/housing imbalance.

Do we really need to wait for a traffic report to tell us what is going to happen??? These cars can only come/go to the project from El Camino Real and Page Mill Road because the project is blocked by the railroad tracks to the east and the Ventura neighborhood to the south (no project access from the east and south). El Camino Real, Page Mill Road, Park Blvd and California Avenue are going to be what get impacted by this project and the traffic impacts will be HUGE. There are no significant mitigations that the Jay Paul can offer that are going to lessen the traffic impacts from this project because they don't exist.

Our City Council is composed of Palo Alto residents. The Council is (or should be) accountable to the residents and voters of Palo Alto. Every neighborhood is sensitive to traffic and parking. No neighborhood in Palo Alto wants anymore traffic and parking problems and no residents want the ability to travel around town impacted by even more traffic than we already have now. This should not be a case where Council decides to load this neighborhood with traffic/parking problems so that this neighborhood has as much problems as other bad traffic/parking areas.

The California Avenue and Park Blvd. corridor has been studied for years and a comprehensive plan study is well underway. The proposed Jay Paul project completely ignores the direction and goals of that planning process. If Jay Paul does any projects, any and all projects should be consistent with the studies and planning efforts for the California Avenue and Park Blvd. Corridor region of Palo Alto. The Sobrato Companies own the 75-acre Fry's site. The Fry's site is a site where re-development might want to be encouraged. If Jay Paul's project is approved there may be no infrastructure (road/traffic capacity, etc.) remaining to accommodate a future housing/mixed-use re-develoment of the Fry's site. Wouldn't we rather see the Fry's area upgraded than see jay Paul add 311,000 sf of office space?

Jay Paul is seeking to "redevelop" a property that is only 15 years old and is already 100% fully built out. Jay Paul wants to City to give him precious approval that will allow them to build "three decades" worth (311,000 sf - a huge amount) of additional office space. This City should NOT be encouraging redevelopment of properties that don't need re-development. Re-development incentives should be reserved for properties that have become functionally obsolete or blighted over time.

The City has been in "need" of a new police building for over 20 years (over 20 years ago, the City first initiated studies on inadequate police facilities, etc.). The fact that the City still does not have a new police building demonstrates a long term failure by many, many City Councils to find a long term infrastructure solution. Far too many financial resources of this City have been squandered in bloated salaries/benefits and unnecessary City services. The City should have started a capital replacement fund years ago for the eventual replacement/upgrade of the police station.

Allowing an out of town developer to grossly overbuild a neighborhood, reap a HUGE profit in the process and leave our community with a PERPETUAL traffic/parking problem in the wake is wrong and needs to be prevented. This City does not "need" this project from virtually anyway that anyone wants to view the project. Our City Council needs to stop this nonsense immediately. If this community really needs a Public Safety Building, this is NOT the responsible way to obtain one.


Posted by DO NOT be lured, a resident of Meadow Park
on Sep 17, 2013 at 11:00 am

It is NOT, NOT, NOT right to approve a building of this size. The Council is again being lured, in this case by a police building. The police building isn't even the most desirable design or in the most desirable location.


Posted by Midtown, a resident of Midtown
on Sep 17, 2013 at 11:06 am

The solution to traffic problem is to quickly approve both 27 University and the Page Mill project. The streets will be solid cars and we will all have to walk like God intended us to.


Posted by Longtime resident, a resident of Green Acres
on Sep 17, 2013 at 11:10 am

@JS,
Don't forget Maybell, where the City is trying to steamroll a high-density rezone for a large development on a major school commute corridor that is seriously substandard in width and has no space for even a single full-width bike lane or sidewalk.

They approved a development with only 47 parking spots (36 for a 60-unit rental apartment, 6 for visitors, and 5 for employees), even though the surrounding neighborhood has no capacity to absorb excess parking.

The excess will take up the few spots by the park at the heart of the neighborhood, as well as compete with families of disabled kids who attend the OH across the street from the park and take their kids for rehab at the county rehab facility there. Parking is already tight! I hope the rest of Palo Alto will vote AGAINST Measure D just to avoid putting another residential area at the top of the parking problem list!


Posted by Mary G, a resident of Duveneck/St. Francis
on Sep 17, 2013 at 11:56 am

Okay - Let's see - developers sometimes described as philanthropists, who have already become rich off of the city development, want to build huge office buildings with inadequate parking and they want to give us a police station or theater in exchange for extra tradeoffs? Why doesn't one of these wealthy "philanthropists" just give us a police building (theater optional - I don't really think we need it as badly as a police station) and pay back the city for some of what they already have gleaned from their other developments.


Posted by Counsel the Council, a resident of Evergreen Park
on Sep 17, 2013 at 12:49 pm

[Post removed.]


Posted by helene, a resident of Midtown
on Sep 17, 2013 at 1:08 pm

Bottom Line: TRAFFIC. It is already a huge problem on Oregon Expressway leading up to
Page Mill Road. Get real. We live here and are tired of developers not giving a care as to our
quality of life. A new police station is a bribe and nothing more.


Posted by John, a resident of another community
on Sep 17, 2013 at 2:34 pm

Maybe improving the roads in PA should be the priority versus a new police building. An overpass at El Camino & Oregon/Page Mill and a traffic light at the 280 exit to Page Mill come to mind as urgent needs.

I have lived in this area for many years and see that PA wants the cachet of having corporate headquarters but does not want to provide the infrastructure required. The parking restrictions PA places on corporate campuses are a laughingstock. In many PA corporate campuses, if you do not drive in by 9:00am, you are out of luck for finding a parking space.

PA has high visibility nationwide. Provide the infrastructure to make it also a city for the 21st century. Cars are not going away anytime soon.


Posted by palo alto resident, a resident of Embarcadero Oaks/Leland
on Sep 17, 2013 at 5:20 pm

Is there any reason not to simply knock down the police department and rebuild it where it is now? If there is not enough room, move all the administrative non-security needing functions into the City Hall building.


Posted by Resident, a resident of Downtown North
on Sep 17, 2013 at 6:36 pm

@John says, " ... PA wants the cachet of having corporate headquarters ..."

Who exactly in PA wants that? Is it anybody who actually lives here?

Maybe certain nonresident city staffers want big buildings on their resume. Maybe nonresident downtown restaurant owners want a source of customers. Maybe a swing vote of council members want developer contributions when they run for Supervisor someday.

But of people who actually live (and vote) here, who?


Posted by Offices in Palo Alto should remain garages, a resident of Another Palo Alto neighborhood
on Sep 17, 2013 at 9:29 pm

Resident,

on @John says, " ... PA wants the cachet of having corporate headquarters ..."

I would agree that nobody in PA wants the "cachet" of corporate headquarters. QUite the opposite.

@ John

Sorry John, corporate headquarters is what one builds in a town that is dying. Or on some gigantic piece of land somewhere with no (less) zoning restrictions.

PA is a center of innovation and capital, but that does not mean offices (desks, parking lots, City Council incentives, or invitations to move HQ offices here). At the most, you need a garage to do business here.

The garages are getting fancier, and yes everybody wants Palo Alto to rub off on their venture, but unless the buildings are to house HQ for a venture of 3-5 people, I see no logic to cater to developers who want to build, build, build.

You are correct we have no infrastructure to house massive amounts of corporate headquarters, and who would be paying for that anyway?

Not to mention, does the CIty even make any money on offices long term? Where is that economic analysis, compared to retail.
















Posted by resident, a resident of Another Palo Alto neighborhood
on Sep 17, 2013 at 9:41 pm

Oddly,almost all of the discussion at the Council meeting was on the economic feasibility of the developer's proposal. That is the developer's concern. What they should be focusing on is the traffic impacts of the proposed project. Staff says the traffic study is delayed and is coming early next year because the assumptions were wrong. If the Council took a field trip some weekday afternoon to that section of town, they would not need a traffic study. They might expand the field trip to other sections of town and the neighborhoods too. I think the "assumptions" have been wrong the
past 10+ years.


Posted by Elaine, a resident of Ventura
on Sep 17, 2013 at 11:33 pm

As we analyze this project's impact on traffic and gridlock in our community, let's remember the negative impact of the traffic on safety. Park Blvd. is a designated bike boulevard. It is already unsafe for bicyclists at the current level of traffic, and I can only imagine how that will change if this project goes through.

Different topic: Can someone tell me what the huge construction pit is on Park Blvd. in this area? Has it been approved, or is it being excavated in hopes of approval? Is it too late to stop it?


Posted by Jack, a resident of Barron Park
on Sep 17, 2013 at 11:52 pm

Elaine, That "pit "on Park Boulevard will be 50,000 SF of research and development space (what is research and development space used for nowadays?) plus 200 apartments. No worries though, they are painting the building yellow and blue so it will blend with the neighborhood. No way to stop Hobach now for he would likely just file a lawsuit against anyone in his path.


Posted by Elaine, a resident of Ventura
on Sep 18, 2013 at 12:00 am

Jack, thanks for the info about the pit. Do you know if there was a traffic study done, and what the impact is likely to be?


Posted by Jack, a resident of Barron Park
on Sep 18, 2013 at 12:55 am

Elaine, I apologize if the answer comes across as sarcastic, but...

There will be increased traffic when Hohbach's project is fully leased (about two years from now). There will be approximately 400 cars coming from and/or going to the Hohbach project in the AM and the same 400 cars coming from and/or /going to the Hohbach. The Park Blvd and Page Mill Road intersection will become even more of a disaster. There are no significant traffic mitigations required of Hohbach. No one needs a traffic report to tell us that the traffic will be far worse than it is now.


Posted by Longtime Resident, a resident of Green Acres
on Sep 18, 2013 at 1:31 pm

And let's not forget the questionable wisdom of taking the police station as a "gift" where we will probably end up with less discretion about the details of it than if we just did it ourselves.

City Council can find $2.1million for a cosmetic facelift of Council chambers, and $8million for a gym by their boondoggle golf course, they can find money for a safety building. Same on Maybell, if they want affordable housing, they should just build the affordable housing, and not sell off more than half the property for densely packed market-rate housing, then call neighbors NIMBYs for not wanting the 50-foot building the affordable component gets squeezed into because of the for-profit developer giveaway.

Which is why EVERYONE should vote AGAINST Measure D, even if they - like me - support affordable housing. City Council should not be using affordable housing to break the zoning codes in residential neighborhoods and get high-density developments they could never get any other way. City Council should not be using our need for a public safety building to let a developer to whatever the H#$#$% they want! We are not exactly without the means to do it ourselves.

You could justify murder, euthanasia, and prostitution by economic tradeoffs such as these. That's not the standard by which a City Council should operate.


Posted by clie, a resident of Barron Park
on Sep 19, 2013 at 9:31 am

State mandate ABAG says: If you make More Jobs, you must build more housing.

To the city council I'd like to say: Use common sense.
Do you expect the economic study to include the MULTIPLIED housing/traffic/parking effects from building this gigantus? Of course not.

No "economic evaluation" existing today CAN include the cost to the residents of cramming in more of the required ugly housing units all over Palo Alto. Yet we feel the effects.

Why isn't very smart Palo Alto capable of curtailing this insanity? Shouldn't we expect the City Council to listen to the voices of the residents when we are telling them
1. WE don't believe the old and self-serving story that we will die if we don't grow, and,
2. WE are sick of ugly-dense-in-your-face buildings being plunked down in our neighborhoods.

I am voting AGAINST MEASURE D and please, reader, if you are concerned about the direction of development, I invite you to join me to make your voice count in the coming election. I want the city to STOP granting special high density privileges to developers.
www.voteagainstD.com


Posted by Tsk tsk, a resident of Downtown North
on Sep 20, 2013 at 8:51 am

Jay Paul and his company should be told " NO!" In no uncertain terms, and then shown the door!
Palo Alto has no more room for any more big developments, no more room for the extra parking they require, and no more room for the roadway improvements to handle the extra traffic these developments bring in from out of the area.
Why don't Palo Alto residents, who have invested in homes here, have any say in the living and traffic conditions of our city??


Posted by another resident, a resident of Another Palo Alto neighborhood
on Sep 21, 2013 at 11:43 pm

resident said: "Oddly,almost all of the discussion at the Council meeting was on the economic feasibility of the developer's proposal."
It sound like the city council is trying to find a way to rubber-stamp the proposal. Admittedly a new and "free" police station is a pretty big carrot. Unless PA residents and those who commute to and from PA via Oregon Expressway/Page Mill Road stand up to loudly oppose this project, it will undoubtedly be quietly given the green light.


Posted by resident, a resident of Another Palo Alto neighborhood
on Sep 22, 2013 at 8:17 am

The planning process in Palo Alto must be based on a set of
constraints- access, the reality of the public transportation
system that we have, residential areas surrounding our commercial
areas without separation, an attribute which became a vulnerability,
design constraints in terms of scale and historic districts and
properties, an architectural heritage. All of this was thrown out the
window in the last ten years as a basis for land use decision-making
in Palo Alto. Anybody on the Council/ARB/staff see anything wrong with this yet?


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