Business may be booming in some parts of Palo Alto, but Chris Hansen and Robert Wheatley have spent nearly two years trying to find a retailer to rent out their building at 999 Alma St., former site of Anthropologie.
The reaction so far? Crickets.
On Tuesday night, the property owners came to plead their case to the City Council, which two years ago banned the conversion of ground-floor retail to other uses. For Hansen and Wheatley, whose building stands on a peripheral downtown site in what is known as South of Forest Avenue (SOFA 2), this creates an insurmountable challenge, they said.
"I feel like I'm in the middle of an ocean and treading water," Hansen said, describing his fruitless quest to land a tenant. "I'm drowning and I'm literally asking for aid -- for a life preserver."
For Lund Smith, retail has also been a hard sell. Smith made his case for an exception from the law on Monday night, when he tried to get a waiver for his building at 425 Portage Ave., a former warehouse that recently housed Pet Food Depot. Smith cited the lack of parking at the site (nine total spots), its poor visibility and shabby infrastructure as reasons for the fact that there were no takers. He described the squat building in the Ventura neighborhood as a "70-year-old corrugated metal shed."
"If there's someone who wants retail right now, come talk to me," Smith said. "I'd like to lease it to somebody. It's just sitting there vacant."
Neither Smith nor Hansen got everything that they wanted from the council, where lauding retail is a popular position. At the same time, neither walked away empty-handed. After some debate, the council voted 6-3, with Mayor Greg Scharff, Vice Mayor Liz Kniss and Councilman Adrian Fine dissenting, on Monday night to allow warehouse use for the Portage Avenue building. All three dissenters wanted to give the property owner even more flexibility on future development.
And on Tuesday night, they followed suit by throwing Hansen a lifeline and making medical offices an allowed use at 999 Alma St. by an 7-1 vote, with Councilwoman Karen Holman dissenting and Councilman Tom DuBois absent.
For some council members, the requests for waivers from the two property owners were a sign of the law's limitation. Fine, who as a member of the Planning and Transportation Commission voted against the retail-protection ordinance, continued to argue during both public hearings that the law is too blunt and that it puts an onus on council members to decide whether particular locations are suitable for retail -- a task for which they aren't well equipped.
"Are we really going to legislate the retail use of every single property in the city? Because that's what we're doing in this city," Fine said.
Vice Mayor Liz Kniss, who supported the retail-protection law when it was enacted, indicated Tuesday that she is having second thoughts about it.
"Even though I'm one of those who voted for the emergency retail ordinance, I'd certainly like to revisit that," Kniss said, adding that she thinks it's a "shame" that the city is requiring the Alma Street building to be retail.
Councilwoman Karen Holman took the opposite view. If Anthropologie lasted this long on the Alma site, why can't another retailer do the same, she asked Tuesday. She was also skeptical about the claims from Alma Street Partners that they solicited all offers for the property and even listed it with an unmarked price (they still didn't get any offers). Holman said that she herself had called the broker to inquire about the property and was told, without hesitation, that the price is $6 per square foot.
"Nothing was offered about negotiating a rate," Holman said. "I don't find that as something that's going to make me sympathetic to changing the rule on this property."
She was the only dissenting vote, however. Others sympathized with Hansen's and Wheatley's tribulations, though they didn't go as far as Fine and Kniss in attacking the retail-preservation ordinance. Mayor Greg Scharff said he favored the law, which he argued probably saved many retail establishments from converting to offices or other uses that fetch higher rents than retail.
He acknowledged that in some cases, developers will seek waivers because their properties are in peripheral areas with little foot traffic and significant restrictions. He said he doesn't feel the need to be "rigid" in his thinking about granting them their requests.
It was Scharff who proposed expanding the allowed uses at 999 Alma St. to include medical offices -- a recommendation that the council majority accepted. However, Scharff was less successful in convincing his colleagues to remove the retail-protection requirement at 425 Portage Ave. altogether, should redevelopment occur. That proposal fell by a 4-5 vote, with Kniss, Fine and Councilman Greg Tanaka voting joining him.
On the Portage property, the council favored a proposal by Councilman Tom DuBois, which denied Smith's request for a waiver from the retail-protection ordinance but allowed him to add warehouse to the list of allowed uses. DuBois agreed that given the property's history, some flexibility should be warranted. But he opposed scrapping the requirement entirely, saying he'd hate to see it redeveloped and converted to office space.
"I think we have to enforce our retail ordinance," DuBois said.