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Despite pushback, 'retail protection' law passes

Original post made on Feb 14, 2017

Every day, brick-and-mortar shops along Palo Alto's main commercial strips engage in a life-or-death battle against online retailers, big-box stores and shopping malls. But in passing its new “retail-protection” law early Tuesday morning, the City Council was mainly focused on a competition from a different source: offices that take over spaces that had previously been occupied by stores.

Read the full story here Web Link posted Tuesday, February 14, 2017, 2:57 AM

Comments (42)

39 people like this
Posted by More Developer Giveaways
a resident of Crescent Park
on Feb 14, 2017 at 6:08 am

The city-wide retail protections are great, but the sad part of last night (and this morning) was when certain councilmembers voted to grant special favors to specific properties. Developers once again gleefully reaped what their targeted campaign contributions sowed, namely the council votes needed to gain exemptions for their buildings. For example, one long-time neighbor-serving auto repair facility will become offices. Sleazy politics is alive and well in Palo Alto.

8 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 14, 2017 at 6:42 am

Two separate points.

Since Office Depot left the area beside Costco, we have been forced to shop online for school supplies, etc. When retail goes so far away that driving in ridiculous traffic for items that can't be found in drug stores or Target, there is no alternative. We desperately could do with a decent school/office supplies store locally for last minute homework projects and office needs. Boutique stationers are not the answer either.

Midtown retail is useful and well utilized. I hope the same retail guidelines which are supposed to be citywide according to the article are followed in respect to Midtown.

49 people like this
Posted by Motivated by Greed
a resident of Crescent Park
on Feb 14, 2017 at 8:35 am

I sat through the moaning of developers and the Chamber last night about retail and what I heard was clear; don't touch our cash cow.

Converting retail to office dramatically increase revenue for property owners and that is their primary concern. If they thought they could get away with bulldozing the Aquarius theater and developing office space, they would do it in a heart beat.

I am thankful that 6 Council members saw through their self-serving misinformation. But the votes also confirm what we've recently learned about campaign contributions: Fine, Tanaka and Kniss are clearly in the developers' camp.

39 people like this
Posted by Fooled BIG TIME
a resident of Downtown North
on Feb 14, 2017 at 10:00 am

Liz Kniss actually moved to vote to EXCLUDE other areas from this ordinance, she said it should not be citywide. Of course, she was supported by Tanaka and Fine.

BTW, did you hear what Kniss said? Paraphrasing...dentists and medical are all good but retail provides sales tax... where is your dentist? where is your psychologist? Are they in Palo Alto? How do you even separate community/resident serving retail and services?

Liz Kniss can, especially advocating for the developers and property owners. Mind you, property owner reap huge profits renting to the likes of Palantir, Amazon and it is much more lucrative to have even basements turned into offices, as Tanaka and Fine were advocating for which only keeps lease price high and causes displacement.

If you voted for them thinking they had residents' best interest, you were fooled BIG TIME.

9 people like this
Posted by upside down world
a resident of Another Palo Alto neighborhood
on Feb 14, 2017 at 10:03 am

Roxy Rapp's message was that massive change is
happening and we need to prepare for it - but unfortunately that change doesn't include a facade remodel of The Cheesecake Factory on University Ave.

10 people like this
Posted by Crescent Park Dad
a resident of Crescent Park
on Feb 14, 2017 at 10:30 am

There's an Office Depot at the EPA shopping center

31 people like this
Posted by Unbelievable
a resident of Fairmeadow
on Feb 14, 2017 at 11:15 am

You really can't make this stuff up. Council members Fine, Tanaka, and Kniss kept making motions to gut the retail ordinance and kept getting voted down, prolonging the meeting for no reason. The give-aways to individual properties was stomach-turning, no respect for putting in place a system of rules.

Earlier in the evening the council discussion of a market-rate housing project requesting to upzone from RM15 to RM30 (double the zoning) on El Camino was even more illuminating:

Adrian Fine "I wantRM40. Want even more density"

Kniss - Talking about South Palo Alto “I like the intensification of the area. We ought to look at more”.

Tanaka - "Should consider more than RM15, wants higher density here."

23 people like this
Posted by Shopaholic
a resident of University South
on Feb 14, 2017 at 11:19 am

Enough with the anti-developer rhetoric! I live in a home built by developers. I shop at stores built by developers. My guess is you do as well. Developers are essential to providing housing and retail.
Enough with the hypocrisy.
If we want to maintain our neighborhoods and also maintain a vibrant environment for retail, then retail should be concentrated. I couldn't agree more with Ms. Kleinberg's statements. Thank you Fine, Kniss & Tanaka for actually listening to the valid concerns of those impacted and taking a stand to protect retail.

28 people like this
Posted by Mama
a resident of Crescent Park
on Feb 14, 2017 at 11:22 am

[Post removed.]

18 people like this
Posted by Resident
a resident of Crescent Park
on Feb 14, 2017 at 11:28 am

I'd like to know how much we are paying in overtime to staff because the Council can't get their act together.

13 people like this
Posted by Be Pragmatic
a resident of Downtown North
on Feb 14, 2017 at 12:43 pm

"Forcing" retail at ground level sounds great, but it doesn't force land owners to set affordable prices and by itself, ground level retail protection is not actually going to incentivize more people to start up small mom and pop shops that sell physical things. Retail is mostly under assault from online establishments and will continue to be. Between rent, labor costs, and a whole host of other economic pressures, you're just going to need more and more customers to keep retail operations afloat. Unless we increase the number of people who can shop there (ie through housing) it's hard to sustain brick and mortar retailers of stuff.

The important thing is an active ground floor to support a healthy, interesting public sphere. To that end, we should really consider expanding allowable uses at ground floors - small client-oriented professional service companies should be a legitimate use (non-profits, accountants, psychiatrists) as should senior oriented services (home care or medical services), childcare or child-oriented services (like MyGym, or a MakerSpace) or public facilities (library, community center)? These bring people and foster community, encouraging people to partake in experiences together, rather than consuming things.

3 people like this
Posted by Even Malls Don't Sell Stuff
a resident of Stanford
on Feb 14, 2017 at 12:46 pm

Who are we kidding? Retail isn't viable anymore. Stanford Shopping Center has gotten that message. They have expanded to a wider range of cafes, restaurants, gym concepts and other uses. Looking toward the future, hotels and occupancy taxes are going to be a higher percent of our tax base. Not retail sales tax.

8 people like this
Posted by Annette
a resident of College Terrace
on Feb 14, 2017 at 1:23 pm

Annette is a registered user.

I watched much of the discussion. The argument that certain areas are not retail friendly is valid, with the former site of Anthropologie being a good example. And of course parking came up as a deterrent to downtown shopping even for those of us who prefer retail to e-tail. Each week it becomes increasingly clear that cumulative impact was given short shrift and now CC faces the Sisyphean task of trying to remedy past land use decisions. Hopefully those CC members (+ Staff) who participated in decisions that brought us to this untenable place will not repeat that mistake.

4 people like this
Posted by jh
a resident of Evergreen Park
on Feb 14, 2017 at 2:27 pm

"life-or-death battle against online retailers, big-box stores and shopping malls"

In Palo Alto add rent to the top of that list.

Landlords keep raising the rents to unsustainable levels for retail, which essentially evicts them, with expectations of leasing to more lucrative businesses. If Palo Alto allows this it is their right to do so.

In the core retail locations along University Avenue and California Avenue, when property owners claim then they can't find retailers to rent to, then they are setting their expectations too high. Most commercial properties seldom change hands and reap the profit from property taxes set at 2% since 1975. If a building with retail like uses does change hands the new owner's financial model for buying should reflect that the street level use is restricted.

However, I do believe in order to have viable retail it needs to be in very close proximity. I believe a strict definition of retail should only be allowed on University Avenue and California Avenue, with the broader definition applying to the adjacent streets. That way shopping is attractive and foot traffic is maximised. Retailers aren't competing with businesses that have no retail component and which break up the flow and vibrancy of the street. The other uses in the council's definition should be allowed on the adjacent streets.

2 people like this
Posted by Out to Pasture
a resident of Downtown North
on Feb 14, 2017 at 2:54 pm

[Post removed.]

2 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on Feb 14, 2017 at 5:06 pm

Gale Johnson is a registered user.

So the grand experiment will continue. I watched a lot of the CC meeting and heard many speakers with arguments that made sense to me, for not approving the ordinance. I didn't stay up to the end of the meeting, however. There were many very knowledgeable speakers on what it takes to attract and preserve good robust retail. Retail, as I remember it on University Avenue, has been gone for many years and will never come back unless rental rates drop. And that won't happen until there are many vacancies, boarded up store fronts, etc. Bookstores, clothing stores, sporting goods stores, furniture stores, hardware stores, shoe stores, five and dimes, candy stores, florists, a theater, many very good restaurants are gone...replaced by coffee shops, boutiques, trendy restaurants/bars, salons, maybe a carpet store that has been going out of business for at least 20 years, et al. I remember the days of walking on University Avenue and window shopping...looking into clear/transparent store windows, and seeing clad mannequins wearing the latest fashions, toys, sporting goods, and other wares they offered.

So where is all the optimism coming from that retail can come back and that an ordinance that mandates and restricts the use of property will help bring it back? On this issue I side with the 3 members who voted against it, and a first for me, I liked what Judy Kleinberg had to say.

On the one hand I think the owners and developers have it right, but on the other hand they are also the prime suspects in causing the problem in the first place. High rents have driven many out of business or to relocate. And Prop 13, which should have only benefited homeowners/residents by its design, also had a side benefit to commercial property owners, whose properties have generally been in family ownership for generations and doesn't change hands.

So here we are. I was so much hoping for a report on how downtown retail has done since the 2015 ordinance. Did that work out well so far? How many retail stores have moved many have moved out or gone out of business? Sometimes CC moves too fast with so little good information.

22 people like this
Posted by Wow
a resident of Midtown
on Feb 14, 2017 at 5:09 pm

If there is any way you were unclear as to what Kniss, Fina and Tanaka stand for, you've got your answers now.

There are no legal restrictions to taking campaign donations and then voting away to your heart's content on issues and projects that you sold to the highest bidder.

There are, of course, moral and ethical considerations to behaving this way, but I guess we're all clear on how the Conflicted 3 are going to roll.

[Portion removed.]

11 people like this
Posted by Unending attacks
a resident of Duveneck/St. Francis
on Feb 14, 2017 at 5:26 pm

[Portion removed.] This vocal minority seems to forget that the voters had their say in November elected these members that are subjected to non stop vilification on this forum. And remember that the main target of attack, Liz knows, received the most votes in the election.
For those posters, like mama, that are clamoring for a recall- I say go for it. You may be in for a surprise!!!!!

20 people like this
Posted by long view
a resident of South of Midtown
on Feb 14, 2017 at 6:33 pm

long view is a registered user.

Without a retail ordinance, downtown Palo Alto may convert to all office. With a retail ordinance, and if the City Council stands strong, property owners will eventually realize they have a choice of no retail renter if they keep their rates high, or the choice of lowering their rates so their properties will be rented by new retail. City Council - good job and don't blink when you hear that properties can't be rented. Yes they can if rents go down.

4 people like this
Posted by jh
a resident of Evergreen Park
on Feb 14, 2017 at 6:59 pm

The property owners made an extremely good case for retail no longer being viable. Very compelling arguments, they are speaking to their self-interests. Of course they are going to do their darndest to convince the council not to regulations what businesses they can rent to, which is absolutely understandable. That's why council needs to protect retail, but in very close proximity to each other.

15 people like this
Posted by john_alderman
a resident of Crescent Park
on Feb 14, 2017 at 8:34 pm

john_alderman is a registered user.

@Even Malls Don't Sell Stuff - The Stanford shopping center is mostly retail. and it is crowded as heck. You know what there isn't a lot of? Ground floor office space. like none, and that's what this ordinance is trying to prevent downtown. The displacement of retail (including cafes, restaurants, and gyms), by office space.

15 people like this
Posted by Downtown North Resident
a resident of Downtown North
on Feb 14, 2017 at 8:43 pm

Many of my friends voted for these phony Kniss, Fine and Tanaka because they pretended to be pro resident when it is clear they are pro development. Try buying a present for a birthday downtown now. Where do you go? Except for PA Toy and Sport there is nothing. Nothing. Office space should never be on the ground floor ever. Thank you Eric Filsef for trying to keep downtown a vibrant place and not an office park. Shame on you Kniss, Fine and Tanaka. Kniss is so out of line, she should be recalled.

7 people like this
Posted by Chris
a resident of University South
on Feb 14, 2017 at 8:57 pm

Why are some residents trying to bring back the 1950's? Palo Alto is not a museum. Check the stores that populated University Avenue then and I think most of the people trying to live in the past would agree that most of them could not make it today. The world has been changing and the US is vastly overstored. The country and a Palo Alto in particular needs MORE housing and LESS retail.

8 people like this
Posted by Curmudgeon
a resident of Downtown North
on Feb 14, 2017 at 9:24 pm

"This vocal minority seems to forget that the voters had their say in November elected [sic] these members [the Gang of Three]"

What was elected was their campaign pretense. Palo Alto voted Residentialist. It got the opposite.

5 people like this
Posted by Kettle is black
a resident of College Terrace
on Feb 15, 2017 at 7:58 am

[Post removed.]

5 people like this
Posted by Thomas Paine IV
a resident of Green Acres
on Feb 15, 2017 at 8:55 am

Why not adopt Menlo Park policies that drive all business out of the area. Then there would be plenty of parking. What do they do there? Enforce parking laws to the exact letter of the law. If your car tire touches (even a tiny bit) a white parking line you get a $37 ticket. I only wish all municipal services were as efficient as Menlo Park's traffic enforcers.

5 people like this
Posted by Me 2
a resident of Old Palo Alto
on Feb 15, 2017 at 11:05 am

This wailing and teeth gnashing is very entertaining. Who knew the side effective of supporting Kniss, Tanaka and Fine would bring out the crazies in everyone. It's almost Trump like!

Just waiting for the inevitable application of Godwin's Law.

10 people like this
Posted by Be Positive
a resident of Leland Manor/Garland Drive
on Feb 15, 2017 at 11:18 am

Be Positive is a registered user.

If downtown Mountain View and Los Altos can support retail and restaurants - with plenty of foot traffic - why can't Palo Alto?

6 people like this
Posted by Reject online junk. Buy local.
a resident of Another Palo Alto neighborhood
on Feb 15, 2017 at 11:32 am

I hate buying things online. It made me crazy when I ordered things online in the past and junk appeared on my doorstep. I have stopped doing this.

I am back in the stores because I like to see the quality of materials and construction of things before I buy them. In the store I can see the actual color of an object, not a proximate color that is produced badly on my computer screen. I can try things on and see how they fit. I can see if a jacket is fully or partially lined, and how it is stitched. I can feel fabric to see if it is scratchy or soft. I can see if darts and folds are sewn in a way that suits my body's shape. I want to know that a tool I am about to buy is sturdy enough for the tasks I have planned.

There is so much garbage passed off online. It looks nice in pictures, but then you have to waste time returning it because it is junk. So much waste in packaging and moving things around this way. Online shopping has its place, but it will not replace brick and mortar. People like the experience of shopping.

I will shop to retain local retail because it is convenient for me. When I need to do an emergency repair, I am glad to have a local hardware store that enables me to get supplies quickly. I will frequent that store always because I want the convenience of its presence in my community when I need it. Join me. Reject the junk. Buy local. Save local retail for our local pleasure and convenience. Be smart. Use it or lose it. Remember, if you don't use local retail all of time, it won't be there when you need it.

Finally, we need dentists and doctors IN the community. This is another service that you may need in a hurry sometimes. Driving to another community when your kid is vomiting or choking or your dad is in pain is not acceptable. We need local primary care services to be housed locally, accessibly. Make it so.

I am not opposed to housing on top of these services, but we need ground floor services. We clearly have more than enough jobs. Palantir, it's time to move out of the nest and get big boy office space. You are all grown up.

Like this comment
Posted by Don
a resident of Evergreen Park
on Feb 15, 2017 at 12:01 pm

> Be Positive wrote:
> If downtown Mountain View and Los Altos can support retail and restaurants

Mountain View's Castro Street: restaurants, yes; retail, not so much.

7 people like this
Posted by john_alderman
a resident of Crescent Park
on Feb 15, 2017 at 5:09 pm

john_alderman is a registered user.

@ Chris - Let's look at your claim "Palo Alto in particular needs MORE housing and LESS retail," and assume that we do need more housing. How does preserving ground floor retail hurt housing? If ground floor retail continues to be converted to office space, that makes the housing imbalance WORSE, and drives costs even higher. And if you are a high density housing proponent, you want MORE retail downtown so people don't have to drive to shop.

What you are effectively arguing is Palo Alto needs more office space, and that make no sense unless you are a developer or tech startup feeding off the VC bubble. You are arguing to turn downtown into an office park, which doesn't make sense for high or low density housing advocates.

2 people like this
Posted by other
a resident of another community
on Feb 16, 2017 at 9:23 am

The vibe I'm hearing is MORE housing, SAME retail, LESS office, lower residential rents.

The town voted for several council members that were clearly in the developers camp, so just remember you get what people voted for. It wasn't exactly secret.

Like this comment
Posted by nearby neighbor
a resident of another community
on Feb 16, 2017 at 9:34 am

In-store retail. I see the quandry. I go online and can find 100 versions of whatever product I want, but frequently can't tell the quality. But hey, shipping is free and I don't have to battle traffic or parking (a really big deal for busy people with jobs, kids, responsibilities).

When I go in stores, the selection is so limited, and frequently the quality is either dime store China or uber-luxury. I can't find good quality at a reasonable price, or a reasonable selection. Retail stores do need to adapt, and most haven't been doing a great job of it. Meanwhile, landlords are pricing them out... there is little time for experimentation.

Retail is a business. Stores need to figure out the right model for attracting customers and generating revenue, and cities should preserve the town culture that it's citizen's want. It's a quandry. Please don't let big business and big developers determine the city's fate.

4 people like this
Posted by Gertrude
a resident of Crescent Park
on Feb 16, 2017 at 12:39 pm

Nearby neighbor, the problem is that many people do find products they want to purchase in stores, but then shop the internet for a better deal. I see people in stores all the time taking pictures of products with their smart phones and then leave the store without making a purchase, presumably to purchase the item online at a better price from a retailer who does not have the overhead of a retailer who has to pay astronomical rent prices in Palo Alto. I've heard many retailers complain about this. Remember The Bead Shop? It was a great place to purchase beads and take free jewelry making classes - a real treasure in Palo Alto. Problem was that customers would use the store to gather information about the beads they liked, and then purchased the beads for a better price online. The stores can't compete with the internet.

I love to shop as do many people, which is why you can't find a parking spot at Stanford Shopping Center on the weekends. It will truly be a tragedy if we loose our brick and mortar retail. I'm happy to hear that Amazon, who is partly responsible for so many bookstores closing, will open a brick and mortar store - - hopefully a trend for other giant online retailers.

2 people like this
Posted by Internet fools.
a resident of Another Palo Alto neighborhood
on Feb 16, 2017 at 12:43 pm

We will all will regret that behavior. When retail goes away, they will be dependent on the internet..and that will REALLY suck. But it will be the consumers' fault.

Use it or lose it. Think about the consequences of your consumer choices.

Like this comment
Posted by resident
a resident of College Terrace
on Feb 16, 2017 at 2:11 pm

Well we all know that horse left the barn sometime ago. The only way to lure it back is to make it "profitable" for the horse to return. Small retailers cant pay Palo Alto rents. All the ordinances won't change this fact. Rent control might.
The rest is yada, yada.

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Posted by Gale Johnson
a resident of Adobe-Meadow
on Feb 16, 2017 at 4:10 pm

Gale Johnson is a registered user.

@ nearby neighbor

You said it very well. Yes, a quandry indeed, and 'there is a nice dilemma...we have here'...from Gilbert and Sullivan! It's beyond the capability of retailers to become suddenly innovative and save retail in places where it's been missing/gone for years, doesn't belong, and will never come back. Sad, but it's the new reality. In the end, owners and developers will have their way unless they get hurt in their pocketbooks and are forced to lower rents on their properties. My guess is they will just wait it out now that the owners/developers have lots of friends on CC.

Nice try CC, and you really think you are in control? Your voices sound strong, but do you personally have anything on the line in all these debates? If you don't, your voices are weak and the property owners and developers know that and their voices are strong.

All the reasons I believe, and that others have stated, of why retail in downtown will never be vital again, are sound. Let's just wait and see how the new ordinance will play out, impact the situation, and CC's decision.

Waiting and watching!

2 people like this
Posted by Pat Burt
a resident of Community Center
on Feb 16, 2017 at 5:21 pm

It is correct that small local serving retailers cannot compete for space in our prime retail locations such as around University Avenue. That ship has sailed and those locations have been increasingly occupied by high end restaurants and chain stores. However, city zoning can help sustain local serving retail by including some less than prime locations in our ground floor retail zones. That is why last year the Council expanded the California Ave ground floor retail district to include much of Cambridge Ave.
Such areas allow less lucrative retail to not have to compete with office or chain store rents. Developers make the case that these are not strong, vibrant retail locations where retail is most successful and they are correct, but they are locations (such as along El Camino) where local serving retailers can survive.
Lastly, it's important to note that retail in Palo Alto continues to thrive as is exhibited in our sales tax revenues. Stanford Shopping Center and University Ave are among the highest sales revenue per square foot anywhere. Our primary problem is retaining normal local services for the people who live here.

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Posted by Gerturde
a resident of Crescent Park
on Feb 16, 2017 at 5:34 pm

Gale, I concur with what you are writing. Although specified areas in the downtown are now zoned for retail, if the property owners won't lower the rents, which are out of reach for many retailers, how can a retailer survive? It seems that property owners can afford to not rent their property, and I'm wondering if out of stubbornness they won't just let their property stand vacant for years. Maybe they'll just let their property rot and become a blight, hoping that people will get sick of looking at it and reverse the retail-protection law.

I know some of the property owners, and they are very wealthy indeed. Many of them who grew up in Palo Alto when it was a wonderful place to live have purchased homes in other towns where they will retire because they don't like what Palo Alto has become. They became wealthy for turning this area into an office park and now don't want to live here because it's not the quaint town they grew up in.

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Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 16, 2017 at 6:34 pm

Pleased that sales tax revenue is so good. Any idea how much percentages are from regular retail rather than high end car sales such as Tesla?

2 people like this
Posted by john_alderman
a resident of Crescent Park
on Feb 16, 2017 at 7:07 pm

john_alderman is a registered user.

@Gerturde - They'll have to lower the rent to a level that works for retail, or else they make 0 money. The problem is that city has been wishy washy about this, so owners have been incentivized to raise rents or wait, or sneak in offices under false pretenses (see: Institute for the Future).

2 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Feb 16, 2017 at 8:28 pm

Re ground floor "retail: in what are clearly offices, I love strolling into those places and asking for a pound of multi-client studies and a gallon of survey methodology.

Sorry, but further commenting on this topic has been closed.

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