Palo Alto’s Downtown: Splendid? Satisfactory? Declining?

How is Palo Alto’s downtown doing? It all depends on whom you talk to. Some city council members boast that most of the downtown is still a great “go to” place, while other members say that’s not true anymore, we’re losing businesses and we have problems. Palo Alto is deteriorating, retail is moving out, and the city is reaching a crisis level.

No consensus seems to exist.

These comments were part of a recent council discussion on improving downtown University Avenue shopping area some way, somehow, and certainly sooner, not later. The retail and office vacancies are now running near 20 percent.

Under the heading of improving the “streetscape,” was consideration are a variety of ideas — widen sidewalks, design more small gathering areas, create bicycle lanes and add bike stands, change from diagonal to parallel parking– although that would result in a loss of about 50 spaces, provide more greenery and flower beds, and certainly clean up the area, because it looks unkempt. 

All this would cost, well, about $40 million—or more.

Some refreshing thoughts

This council downtown discussions came the same day that I heard developer Chop Keenan talk at the Rotary Club of Palo Alto. “Chop,” as everyone calls him, is a long-time personality in Palo Alto. He says what he thinks and what he thinks is very interesting. It’s refreshing to hear someone not necessarily PC, particularly when he talks about our fair city.

Keenan is a candid man, who knows what’s going on in the retail and commercial scene. Yes, the downtown has problems, retail stores really are leaving (Restoration Hardware relocated to Stanford Shopping Center last Thursday) and, alarmingly, several more notable retail shops are also planning to move out. Chop did not name names. But he did warn that if most of these move-out plans materialize, we should all be scared.

The Covid pandemic was the start of the problem, followed by the number of employees who decided to work from home. And now, more than three-fourths of city employees are frequently not at their desks at City Hall, while companies with large work forces also have employees who work at home. Stanford Research Park, Keenan said, is about 30 percent vacant. 

As a result, restaurants and retailers have lost a lot of business.

Palo Alto is not considered business friendly, he said, because of the high rents, high city permit fees and bureaucratic delays, and a sense that the concerns of retail and commercial businesses are not a high priority for city officials.

In order to get people to shop downtown, there needs to be a sense of vitality, not of a declining downtown. Shoppers go to Stanford because it is a attractive place, filled with people – young and old, flowers, amenities and lots of shops. 

The latest “in” thing is outdoor dining, which is great, he said, at least for five months a year. But both business areas (University Ave and Cal Ave) are losing shoppers. 

Outdoor dining thrives during lunch and dinner times, but they can turn into a desert, especially during afternoons – – so retailers suffer. That’s a warning sign of things to come. He warned that outdoor eating is simply not enough to sustain a business district, especially at California Avenue, where the street is closed to cars.

To draw more people downtown, parking must be easily available, because most shoppers come in cars, not on bikes. Thus, bikers’ interests of riding downtown should not take precedence in determining the street configuration on University Avenue.  

Chop complained that if the state decides to have bike lanes on El Camino and eliminate all street parking, which has been proposed, retail there will suffer — citing the owner of Sundance restaurant, who told the council that he fears he may have to shutter because he needs on-street parking to accommodate his diners. 

He suggested outdoor eating is simply not enough to sustain a business district, especially when the California Avenue, where street is closed to cars.

He suggested outdoor eating is simply not enough to sustain a business district, especially when the California Avenue, where street is closed to cars.

That old idiom, the tail wagging the dog (something important or powerful being controlled by something less so) is applicable. The tail, the desires of the bicycle advocates, Chop quipped, seem to be a driving force in determining transportation decisions in town. 

Keenan ended by saying he was optimistic things will get done – plus, this city has wonderful weather

Yet my alarm bells started ringing after I heard Chop’s description of what our retail businesses may soon face. For me, that word “action’ is critical, and I am happy to see the council clearly state that it wants improvements to take place soon — not five or 10 years from now, as city staffers estimated.

By the end of the downtown discussion, council members began to set deadlines (!) for staff so that retailers and residents can soon feel that something positive is actually happening in the downtown.

But I still have some nagging feelings.

What about all those other pricey consultant studies about improving the downtown? Are they all shelved? And while the current staff focus is seemingly on the streetscape, much more than t is needed to revitalize the downtown, like getting new retailers to move to Palo Alto.