Palo Alto's polarizing debate over office growth hit a stalemate Monday night when a deeply divided City Council agonized over the topic for more than four hours before deciding not to move ahead with any dramatic development restrictions just yet.
After a marathon discussion that stretched to midnight, the council unanimously agreed that the city urgently needs to take steps to protect ground-floor retail from conversion to office space. That, however, was a rare point of consensus during an evening that featured competing motions, clashing philosophies, complex amendments riddled with bullet points and deep disagreement among both the public speakers and the council on the big question of the night: whether Palo Alto should set an annual cap on office development.
Two long public meetings were not enough to answer this question and the council ultimately decided at the end of Monday's discussion to schedule another hearing on the topic for March 23. Even that procedural decision came after two votes and a vigorous debate over whether the next discussion should start with a clean slate or whether it should set as its starting point a proposal by Councilman Marc Berman not to move ahead with an annual limit on new office development.
The debate roughly split into two camps. On one side was Berman, Cory Wolbach and Greg Scharff, all of whom opposed moving forward with an office cap. All three said that the city's time and resources would be better spent on addressing not so much new development itself, but rather its impacts on traffic and parking. The argument echoed the view of the Palo Alto Chamber of Commerce and numerous business leaders who urged the council not to move ahead with a building restriction, which they argued would threaten downtown's vitality without achieving anything useful.
Berman ticked off a list of initiatives that the city is already pursuing to address these issues, which include a new downtown Residential Parking Permit Program that would restrict the amount of time employees can park in residential areas; a new Transportation Management Association that would offer businesses incentives to switch from cars to other modes of transportation; and an expansion of the city's shuttle system.
"We need to dedicate those resources to the programs and policies that will get the biggest bang for our buck and that will not complicate things and will not distract us," Berman said. "I'm worried that a cap will absolutely distract us for minimal gains and, frankly, for detriment and damage in some areas."
Wolbach agreed and said that while he is in favor of "slowing" office construction, he opposes capping development unless it is accompanied by really significant efforts to control traffic, transportation and promote housing. Berman's motion, which was seconded by Wolbach, directed staff to consider ways to extract revenue from new and existing developments to support the city's trip-reduction efforts.
"Saying we're going to cap office development or stop office development and somehow we'll find resources to deal with transportation, deal with housing isn't going to work," Wolbach said.
Scharff, like Wolbach, said that the city probably doesn't need much more office space. But the problem isn't the development itself but rather its impacts. That, he said, should be the focus.
"I don't think the cap would make any difference in these negative impacts, frankly," Scharff said. "Or such minimal impacts that you really won't notice. We need to solve congestion, address parking issues and protect retail."
On the other side of the scale were the council members who favor slow-growth policies: Tom DuBois, Eric Filseth and Vice Mayor Greg Schmid. All three supported directing planning staff to explore an office cap as part of the city's update of its Comprehensive Plan. Under the proposal, which ultimately fizzled, the cap would be set in the range of 20,000 to 40,000 square feet of new office or research-and-development space per year.
Supporters of the cap sided with the residents, neighborhood leaders and land-use watchdogs who argued that the rapid pace of office development is the root cause of the city's worsening traffic and parking woes and should be addressed in conjunction with all the parking and traffic initiatives. Filseth said that the idea of setting an office cap isn't that complicated, a proposition that Berman fiercely contested. By exploring an annual cap on office development, the city would be attacking the problem at its very source, the three proponents of the idea argued.
"We all know traffic is terrible, that housing prices are ridiculous and that retail is hurting. ... The idea of slowing down office growth and letting housing catch up, (providing) relief for retail, this is not a complicated idea," Filseth said.
DuBois warned that the city is in danger of a "monoculture in zoning," with office development gradually spreading and retailers being priced out. The trend was one of the major themes of Mayor Karen Holman's "State of the City" address. She noted in the speech last month that since 2008 city has gained 537,144 square feet of office and research-and-development space while losing 70,514 square feet of retail.
"The status quo is driving us toward an environment dominated by office space," DuBois said. "It's pushing out diversity."
DuBois also proposed a series of amendments to Schmid's proposal that staff explore an office cap. These included a revision to the city's parking requirements based on assumptions of a higher employee density and an elimination of all zoning exceptions. The two amendments were ultimately rejected by the council for being too arbitrary and too broad, respectively. Mayor Holman, who normally supports slow-growth policies, declined to support Schmid's proposal primarily because of the tacked-on amendments.
Councilman Pat Burt criticized both competing motions, calling them "premature" and chiding his colleagues for hastily proposing "polarizing alternatives" and "mischaracterizing" each other's positions. He vehemently opposed DuBois' proposal to change the city's assumption about employee density), a shift that would lead to more stringent parking requirements (the change would shift the requirement from one parking space per 250 square feet of development to one space per 175 square feet) and said that more time is needed to digest the various proposals and fully think through these issues. He also provided his colleagues with a memo containing more than 20 bullet points and laying out the problems, issues and options that the council should consider.
"We have a bunch of half-baked ideas," Burt said. "I don't feel we've gone through an adequate process to make a really thoughtful, adequate recommendation."
At least one idea, however, had no trouble winning consensus. The council unanimously agreed that the city should expand protections for ground-floor retail to prevent office conversions. Though the idea was quickly embraced and adopted almost as an afterthought, Burt called it a "very significant measure."
Specifically, it directed staff to come back with an interim ordinance prohibiting the conversion of retail and service to any other use. It also requested that staff consider options to expand ground-floor retail locations and "reconsider definitions of retail and services along with their location throughout commercial areas as quickly as possible."
The council's decision not to move ahead with an office cap provides at least a temporary reprieve for the businesses owners, Chamber of Commerce executives and local architects who attended the meeting to blast the proposal.
Architect Dan Garber, a former planning commissioner, argued that the council's consideration of an office cap is already changing the market place and prompting higher rents. He cited various service businesses that have recently departed because they were priced out, including a local plumber whom he called when he had a problem with hot water. Like other critics, Garber argued that restricting the supply of office space will inevitably lead to higher rents.
"When you say 'office cap,' all I hear is, 'I got mine and the rest of you can take a walk,'" Garber said.
Randy Popp, an architect who chairs the city's Architectural Review Board (but who specified that his comments represent his personal views and not the board's) took a similar stance and characterized the proposed cap as "metaphorically slamming a door shut" and predicted that the proposal would fail.
"I believe capping growth as you have suggested staff study would be a tragic misstep. ... More people will cram into existing buildings and the problem will be exacerbated in ways we cannot predict," Popp said.
But for residents like Ben Lerner, a restriction on office developments was a perfectly reasonable solution to the problems of worsening traffic congestion and parking.
"We need to immediately stop permitting more office development until the problems of recent office development have been solved," Lerner told the council.
In the end, neither side could claim a victory. Though the council didn't adopt an office cap Monday, members indicated that they may do so in the near future. In addition to the three council members who advocated for adopting it on Monday night, two others expressed support for creating a cap even as they criticized the specific proposals on the table. Burt said a cap is something he's been "very interested in."
"It's not an onerous tool but something we can use as a carefully crafted measure that would potentially add quality to what we do and ability to control our future," Burt said.
Holman agreed and said that it's time to act. Palo Alto, she said, "is known for studying things to death and sometimes we do it to such an extent that things happen that we can't reverse.
"If we don't make any changes about office development at this time, it seems like the data we're trying to collect is being collected in a mercurial environment," Holman said. "We can't sit here and not act."