A divisive proposal to eliminate the limit on commercial development in downtown Palo Alto ran into a wall of resistance Wednesday night, when the city's Planning and Transportation Commission opted not to advance the change.
In a decision that ran counter to wishes of the City Council majority and that overruled the recommendation of planning staff, the commission voted 4-0 to keep in place -- at least for the time being -- the existing 350,000-square-foot cap on non-residential development in downtown.
Commissioner Michael Alcheck abstained from the vote, while commissioners Przemek Gardias and William Riggs were absent.
The vote followed testimony from about 20 residents, including members of the group Palo Altans for Sensible Zoning, which favors slow-growth policies and which is spearheading a November initiative that would halve the citywide cap on non-residential growth. Every speaker urged the commission to keep the cap in place. They pointed to downtown's ongoing parking and traffic problems and argued that taking up the issue at this time -- just months before the voters are set to opine on the issue of office growth -- is an affront to democracy.
"Why are we rushing to do this?" asked Arthur Keller, a former planning commissioner who co-chaired a citizens group that helped revise the Comprehensive Plan. "You should say no and not implement this change. Instead, implement changes that we need, like rental protections."
Some pointed to the pending evictions of residents from President Hotel, an apartment building on University Avenue that the new property owner, Adventurous Journeys Capital Partners, is looking to convert back to a hotel. By eliminating the limit on downtown's non-residential growth --- which covers new hotels -- the city is just making it easier for the new property owner to proceed with its plan and eliminate 75 housing units, said Joe Hirsch, a member of the PASZ steering committee and one of the leaders of the November initiative.
Though it's not clear what impact, if any, the downtown cap will have on the President Hotel proposal (which is subject to a zoning dispute between the city and AJ Capital), Hirsch and others argued that removing the cap would only make it easier for property owners to convert downtown's residential buildings into commercial ones.
"We urge you not to be a part of the process that will in essence evict the residents of (President Hotel) apartments, some of whom have been living in downtown Palo Alto for a long period of time," Hirsch said.
The tense tenor of the discussion -- and the fact that this item was even being debated -- seemed to catch some of the planning commissioners and city staff off guard. Commissioner Doria Summa, who vehemently opposed the removal of the downtown cap, said the commission didn't learn that the item will be on its agenda until reading about it in a newspaper on Friday. Deputy City Attorney Albert Yang acknowledged after the hearing that staff did not expect the issue to be this controversial.
The proposal to scrap the cap was prompted by the City Council's 5-4 vote in January 2017 to remove from the Comprehensive Plan a long-standing policy that established the 350,000-square-foot limit and that required the city to perform a study on growth impacts when development reaches 235,000 square feet, which it did in 2013.
Now, with the new Comprehensive Plan in place, planning staff is going through the process of turning the plan's guidance into actual zoning laws. For the downtown cap, this would mean eliminating a program that has been in existence since 1998 and that is based on a study that the council performed in 1986.
Rather than doing that, members of the planning commission argued that they don't have enough information to remove the cap and that doing so would be inconsistent with other council priorities, including encouraging more housing and protecting residential neighborhoods from the traffic and parking impacts of too much commercial development.
Furthermore, given the politically delicate nature of the exercise -- as evidenced by a crowd of residents protesting the change -- the planning commission agreed that the decision is best left to the council.
Summa noted that 18 months had passed since the council's controversial 5-4 vote. Since then, she said, the council has taken a unified stance to encourage more housing and curtail the impacts of commercial development. Given its new focus, the direction from January 2017 should be reconsidered, she said.
"Removing the commercial cap from downtown will disincentive housing and create more offices that will contribute to the existing problems that our former council members in 1986 were smart enough to see," Summa said.
Some of her colleagues argued that the commission should focus on more important priorities -- namely, reforming the zoning code to support below-market-rate housing -- rather than remove an existing restriction on commercial growth. With its vote, the commission effectively threw the hot-potato issue back to the council to deal with.
The five members who supported the removal of the downtown cap -- Mayor Liz Kniss and council members Adrian Fine, Greg Scharff, Greg Tanaka and Cory Wolbach -- argued that the restriction is unnecessary because of other restrictions that the city has in place.
The Comprehensive Plan already includes a citywide cap of 1.7 million square feet on new commercial development -- a threshold that would be halved to 850,000 square feet if the November initiative is successful. In addition, the city had recently adopted an annual cap of 50,000 square feet on new office and research-and-development growth in the downtown area, around California Avenue and along El Camino Real.
Commissioner Asher Waldfogel led the charge Wednesday by making a motion to support the staff recommendation to remove the downtown cap. He then immediately said that he plans to vote against his motion. The council, he argued, has created a number of contradicting policies in the new plan, which seeks to (among many other goals) promote housing and reduce the intrusion of downtown employees into residential neighborhoods. By eliminating the downtown cap, as the council's five-member majority had recommended 18 months ago, the city is "solving a non-problem."
He also pointed to the unfortunate timing.
"Taking this one right now just looks like it's undermining the democratic process and we shouldn't do that," Waldfogel said.