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By Jay Thorwaldson

About this blog: I was editor of the Palo Alto Weekly from June 2000 to January 2011, capping a more than 50-year career in journalism and writing since Los Gatos High School, where I was editor of the student newspaper and president of the speech...  (More)

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Are TDRs the new 'Planned Community' zoning hot potato?

Uploaded: May 2, 2015
In planning shorthand, a TDR is simply a "transfer of development rights" -- wherein a property owner or developer can buy rights from someone building less than a zone allows or earning the rights by specifically defined actions.

The rights can be inherent in a zone or earned by doing historic rehabilitation or providing lower-income housing. TDRs once could be used to reduce the number of required onsite parking spaces for a project, but no longer due to a recent City Council action.

But there the simplicity hits the wall. Palo Alto citizens and city officials are now finding themselves in a double whammy situation where residents concerned about overdevelopment, traffic and overflow parking (meaning loss of daytime curbside parking in residential areas to people working in nearby commercial areas) are mobilizing against use, or perceived overuse, of TDRs, particularly in some already-dense parts of town.

Downtown Palo Alto and the California Avenue commercial area come to mind.

Overall, there seems to be a feeling that "suburban" Palo Alto is just becoming too dense, too "urban," and many residents want to put on the brakes. Now. Granted, many (or most) residents are simply confused by the jargon and complexities or just too busy in their own lives to get involved, or even follow the issues.

Yet the concern has an immediacy that will surface Monday night (May 4) when the City Council takes up a residents' appeal of an office development proposed for 424 University Ave., known as the "Shady Lane site" because of the business there.

Normally, the size building proposed would require 92 spaces except for two things. First, it is part of the decades-old downtown parking assessment district, which releases projects from providing some parking in return for assessments to help fund parking structures. Because of the district, the parking requirement drops to 55 spaces.

Second, because the project has purchased TDRs (before the recent change) it can avoid an additional 20 spaces.

Thus it is required to provide just 35 spaces, although the developer plans to build 40.

Another project is bringing TDRs to the fore: The Palo Alto History Museum, stalled for years by inadequate funding, has been granted the right by the city to sell TDRs, from which museum backers hope to raise up to $2 million to move the $20 million vision forward. The city has pledged several million to help repair and stabilize the 1932-era Roth Building (the former Palo Alto Medical Clinic) to house the museum. An advertisement for the TDRs sale was in Weekly this month, so the bidding is on.

The concern of residents is not so much with the sale of TDRs but in where they will show up in terms of extra density for a new project or projects.

TDRs are not new. They've been used for decades, as has the controversial "Planned Community" zone and other zoning/planning tools.

But both the PC zone and TDRs seem to be more popular these days of Palo Alto's astronomically-high property values and increasingly limited developable space for commercial (or residential, for that matter) projects.

City officials under harsh pressure have placed a moratorium on the PC zone, which essentially allows property owners or developers to negotiate design and density issues in exchange for a "public benefit" of some type, often negotiated in non-public meetings with city staff -- sometimes with small groups of City Council members.

But the city's past handling of such benefits has been dismal. The benefits, essentially promises by the developer or owner, have not been either tracked or enforced. Several examples stand out of promised "public plazas" becoming outdoor seating areas for restaurants, or a simple piece of public art.

The city is now developing -- at long last! -- a process to assess the cost of the public benefit compared to the economic benefits of extra density or size to the developer.

In a broader sense, some residents and neighborhood activists feel that the PC zone has been a backward step in controlling density, bending back toward the 1950s when zoning itself was being challenged by property owners, politically and in courts. It was a hard time for planning directors, and some suffered severe burnout during the battles to establish zoning firmly as a tool to guide development in a community.

Palo Alto currently, during the moratorium, is in the process of patching up the PC zone to make it less negotiable and more transparent, according to Hillary Gitelman, director of planning and community development.

The revised PC zone ordinance is targeted to come up in early June, and it is almost a guarantee to come under meticulous examination by residents still suspicious of the months of "secret" discussions involving staff and council members on the major proposed development at 27 University Ave., since withdrawn. No records were even kept of how many meetings occurred, who attended or what was discussed at specific meetings (some involving council members) over many months.

Such sessions have occurred for decades, as "staff level" meetings, not subject to the state's Ralph M. Brown Act public-meetings law.

The revised PC ordinance "will be along the lines the council directed staff to develop," Gitelman said this week, rather than picking up on several recent suggestions by members of the Planning and Transportation Commission that would loosen the ordinance a bit.

But the TDRs differ from the PC zone in a significant manner. Instead of opening up a field for negotiation, the TDRs proscribe specific density benefits (development rights) in exchange for specific actions, such as providing historic preservation features or below-market housing.

"TDRs have much more specific regulations," Gitelman noted of the difference.

Nevertheless, the damage done to the public's perception of the city being non-transparent has yet to be fully repaired, despite pledges by officials promising more transparency and outreach when projects are proposed.

The city's political landscape has been altered by the transparency issue, and the "new" post-election City Council reflects a stronger "residentialist" control-growth outlook, both from new members and existing members who have a new perspective due to last year's City Council election outcome.

(Former Weekly Editor Jay Thorwaldson can be e-mailed at He also writes periodic columns for the Weekly print edition.)

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Posted by Put-The-Brakes-On-Now, a resident of Another Palo Alto neighborhood,
on May 2, 2015 at 2:01 pm

> No records were even kept of how many meetings occurred,
> who attended or what was discussed at specific meetings
> (some involving council members) over many months.

> Such sessions have occurred for decades, as "staff level" meetings,
> not subject to the state's Ralph M. Brown Act public-meetings law.

This behavior in the past of City employees (at the highest level) and the willingness of the Council to not object, or set policy that required some sort of meeting minutes be maintained, and published, is why it's hard not to call the actions of the City of Palo Alto corrupt, at times.

Since the policy for TDRs seems to be local--then there is no reason it should not be put on a future ballot with the goal of prohibiting the practice.

The following is a link to an announcement of the offer for sale of city-owned developent rights dating back to 2009:

Web Link

Certainly it is high time that the residents are provided more details about this program, such as many City-owned properties have TDRs associated with them, where these properties are located, who has been purchasing these TDRs, how much money has the City made with such transfers, and where has the money gone? No doubt many other questions will follow, once the residents begin to think about this.

TDRs seem to be a scam that rivals PC-zoning. Way past time having the Council explain why this program seems to have been so poorly administered, from a paper-trail point-of-view, at least, and why it exists at all.

Posted by Abitarian, a resident of Downtown North,
on May 2, 2015 at 5:47 pm

It seems to me that TDRs offer no tangible benefits to the city or its residents. This kind of incentive may be needed to attract development in economically depressed areas, but we do not need such giveaways in Palo Alto. Developers already want to build here!

Council should encode appropriate regulations for size and density, historic rehabilitation, seismic safety, parking, etc. into city ordinances so they are applied fairly across all projects. Developers should not be able to buy their way out of their civic responsibilities.

Posted by Robert, a resident of another community,
on May 3, 2015 at 8:48 pm

TDRs are the reason there are parking garages downtown, rather than half the hisoric buildings being torn down just to satisfy the requirements for parking. If these "concerned residents" got everything they wanted, the built evironment of Palo Alto would be indistinguishable from that of Fresno.

Posted by Confused, a resident of Evergreen Park,
on May 4, 2015 at 3:09 am

It is so good that the former, but still know-it-all, Weekly Editor tells us simple minded citizens:

Many (uneducated) residents want to put on the brakes (to TDRs). Now! Granted, many (or most) residents are simply confused.

That's what he said!

See you are confused. You are only against the all solving new construction.

Just like you did not understand the PC system, you did not understand how the 1984 created parking bonus (no parking needed for the ground floor population, as in no spots / 250 sqft), was good, as was taking retail stores out of office conversion protection in 2009. Who cares about a few victims: Jungle Copy, Rudy's Pub, Zibbibo, The Bargain Box, Avenue Florist. But we have several 100 more office spaces and jobs downtown! We are dumb, the City Elders, like Thorwaldson know it better.

The dumb have a proposal: stop digging, correct the mistakes of the past. If needed buy the TDRs and related boondoggles back from the developers.

H.L. Mencken would have said: parking assessment district payments are the ruse of the coward, avoiding the label taxes. But it robs the City of planning freedom. Just as BMR apartments do, see 411 Page Mill Construction. Mixed use construction my A$$.

More Thorwaldson: The damage done to the public's perception of the city being non-transparent. See Johnny, there is no real damage; it is only done to our perception.

The damage is done to the City close to parking and traffic grid lock. Now often El Camino between Page Mill and Churchill is a Parking lot even at 1PM.

Posted by Peter Carpenter, a resident of Atherton,
on May 4, 2015 at 12:06 pm

Peter Carpenter is a registered user.

The purpose of General Plans and the zoning derived from such plans is to provide a level of certainty for both property owners and citizens regarding how land can be developed.

The original PC ordinance was intended to only be used for large parcels that offered the opportunity to create a large site specific zone that would be beneficial to both the property owner and the citizens. That objective was destroyed when PC zoning began to be applied to small parcels that were embedded in a large zone that had different development standards.

The difficulty with TDR is that the current program lack certainty not with respect to the rights themselves but with respect to which specific sites any individual set of rights can be transferred. This is a solvable problem by adding restrictions to the current TDR ordinance.

Posted by Sylvia, a resident of Midtown,
on May 7, 2015 at 11:28 am

I really appreciated your blog post, Jay. Your many years of writing as a journalist definitely showed. It's one of the best things I've read that clearly explains an issue. I'm sure I'm not the only citizen of Palo Alto that feels exhausted by the conflicting arguments over property in a built-out city.

Posted by Uconfused, a resident of Evergreen Park,
on May 8, 2015 at 1:35 am

There is Robert who is really confused and writes:

" TDRs are the reason there are parking garages downtown, rather than half the hisoric buildings being torn down just to satisfy the requirements for parking".

Interesting the opposite is true. The only effect TDRs have is that the builder does not have to build a parking spot for each 250sqft. For example for 429University only 32 instead of 92. And where does some of the TDRs come from? By tearing down historic building which would need earth quake proofing. You get the same credit if you earthquake proof the building as
when you tear it down.

If you want to get a little inkling of it (and the opportunity for corruption) read Web Link , page 2.

So the result are:
1. There is not a single parking garage spot being build from TDRs.
2. The City gets about $5,000 for a TDR which save the developer to build a $30,000 parking spot.
3. The building where the TDRs are transferd to (429 University, e.g.) now has now the need to park 62 cars somewhere.

So the City gets a pitiful amount of money and looses control over granular zoning, the builder save a lot of money, and the cars spill over every where.

¿Si claro que si?

Posted by Roger Overnaut, a resident of Evergreen Park,
on May 18, 2015 at 6:27 pm

Unlike PC acreage, the supply of TDR is limited by donor site constraints. Does anybody know how much unrealized TDR is out there?

Posted by Howard, a resident of Crescent Park,
on Jun 3, 2015 at 6:45 pm

Re: "promised 'public plazas' becoming outdoor seating areas for restaurants"
What's wrong with that? It's an excellent use of the space. One of the best ways to keep the area vital. It's a lot better than the alternative -- riff-raff smoking pot and using it as a public toilet.

Posted by, a resident of Greater Miranda,
on Aug 28, 2015 at 6:28 am

Great blogger, professional author!
Thanks for your work )
Good luck )

Posted by Scott, a resident of Evergreen Park,
on Sep 1, 2015 at 1:56 am

At some point, property owners have to understand that people -- customers, office workers, anyone who actually comes to your property -- need parking. Yes, some will walk, some will bike, and some will ride the train. But, if you think that is the majority, particularly on a cold, wet, winter day, I beg to disagree.

I don't go to downtown Palo Alto because it is an exercise in frustration trying to find a place to park. Instead, I go to downtown Los Altos. Much easier to navigate and find close, convenient parking that doesn't require going around and around a big parking building. Main street is wide, clean, and very accessible. Compared to it, downtown Palo Alto pales. When I first moved here 20 years ago, downtown Palo Alto was a nice place to go. Now, not so much. Congratulations, developers. You now have the 'vibrancy' you wanted -- except that the place is a pit.

Posted by Ellyn Pavone, a resident of Charleston Gardens,
on Jun 27, 2016 at 10:59 pm

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