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By Jay Thorwaldson

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 [email protected] He also writes periodic columns for the Weekly print edition.)