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To combat vacancies, Palo Alto may repeal 'retail protection' law

Original post made on Sep 16, 2020

With businesses buckling during the economic shutdown, a bitterly divided City Council took a step on Monday toward reversing a law that bars the conversion of ground-floor retail space to offices.

Read the full story here Web Link posted Tuesday, September 15, 2020, 3:36 PM

Comments (19)

76 people like this
Posted by DtnNorth
a resident of Downtown North
on Sep 16, 2020 at 11:07 am

DtnNorth is a registered user.

I am outraged by the suggestions that Palo Alto should consider repealing -- in the midst of an economic and health catastrophe -- its already feeble retail protection and minimum wage laws. Calling it "somewhat immoral" is just a start. Given its recent history, I didn't think our city council could be less representative of its ordinary citizens than it already was but this group and its development influencers have set a new low bar. The election can't come soon enough.


66 people like this
Posted by Who funds these candidates matters.
a resident of Another Palo Alto neighborhood
on Sep 16, 2020 at 11:20 am

Who funds these candidates matters. is a registered user.

Greg Tanaka has taken a lot of developer money in this campaign. Look for candidates who are not bought and paid for. Kniss, Cormack (who both support Templeton) and Fine all fall into that category. They are 4 members of our 7 member City Council. If it's true that they all support this, they have the majority. It will pass.

We have an opportunity this year to fix that. There are FOUR Council seats up for grabs--a majority. If you don't like this, vote thoughtfully. Follow the money. Pay attention to who is funding the candidates. Web Link

Palo Alto Weekly. Please stay on the funding story.


69 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Sep 16, 2020 at 11:23 am

Online Name is a registered user.

I too am outraged at the Gang of 4 who as usual throw residents and our needs under a bus.

If you want to help retail, how about cutting utility rates and eliminating the $20,000,000 "surcharge" aka over-charges that PA Utilities has been charging each and every year for the past few years. By the way, how's the lawsuit against this procedure going?

As for Town & Country, the landlords and the city have a long history of failing to help long-term tenants when they're struggling. A case in point is the Prestige boutique, a family-owned business that operated at T&C for decades and which was moved into a bigger space right before the recession hit and NOT allowed to move back into a vacant smaller space. The city did nothing to help. At their going-away party, they sent some uninformed intern who was shocked at surprised at the turnout by loyal customers upset at the city's shameful inaction.

Look at some of the rents that are being charged and do something to protect residents who need resident-serving businesses and services. You can no longer find, say, a framer in Palo Alto. My cleaner/tailor is working out of the back of the cobbler on Cal Ave because she can no longer afford the outrageous rents with business down.

And Mr. Fine and his enablers want RESIDENTS to pay a surcharge to restaurants because there aren't enough COMMUTERS to support the restaurants. If they care so much, why didn't they ban company cafeterias downtown?? If he wants to alleviate parking problems, let him/them stop encouraging more offices whose workers are working. not shopping!


76 people like this
Posted by Stop the "Growthers" in coming city council election
a resident of Downtown North
on Sep 16, 2020 at 11:32 am

Stop the "Growthers" in coming city council election is a registered user.

This is just another example of the "growther" majority on the council letting the developers run the city. They are trying to drive out what little retail we have left and replace it with office space.

We need to elect city council members who look at the viability of this city long term and do not sell out to developers. Luckily Fine and Kniss will be gone soon. DO NOT vote for Tanaka - he is wholly funded by developers and in their employ. And Templeton is in the "growther" camp and supported by Fine, Cormack and Kniss.

Watch for city council candidate who are supported by Palo Alto for Sensible Growth and those who will fight against developer give-aways. Kou is wonderful for residents! Burt and Lauing may be reasonable. Ask them about limiting growth at their Facebook appearances this election.


71 people like this
Posted by Noooooo!!!
a resident of Fairmeadow
on Sep 16, 2020 at 11:38 am

Noooooo!!! is a registered user.

I can't believe this. Please please please do not continue to destroy our downtown areas. Companies now need less office space, not more. And we are adding residents. So why are we removing retail protection? This seems so poorly motivated, I almost can't believe it. I am deeply disappointed. I would like to know an explanation from the councilmembers who voted for this. I wish this article had a bit more depth because I just see one side and would like to have a clue what is behind the four votes.


72 people like this
Posted by Downtown
a resident of Downtown North
on Sep 16, 2020 at 11:50 am

Downtown is a registered user.

This proposal is incredibly disappointing to hear about.

Rescinding "Retail Protection" ordinances for ground floor retail space is wrong.

There may be a seductive argument on the surface, but the proposal will create an unacceptably perverse incentive that may not be immediately obvious. Namely:

--Landlords are allowed to hike rents beyond the level that is commercially viable for a retailer to profitably operate

--Landlords are then able to claim that "retail can't make it" around here. (They were saying this before the crisis. Now they are using the crisis to press it further).

--Landlords are then allowed to convert ground-floor retail space into non-retail space, thanks to the proposed accommodations

--The impacted ground-floor retail/restaurant space is then lost forever...it does not come back!

--As this occurs in multiple cases, the aggregate effect is to drain services, vitality, and vibrancy out of the commercial cores.

Many, many spaces have been lost in the past, as local landlords exploited temporary downturns in 2000 and 2008 to ask for -- and receive -- latitude from our elected officials to convert ground floor retail and services. Jungle Copy, Zibibbo, Diddams, Fraiche's original location, Blue Chalk, Miele Vacuums, Water Works, Darshana Yoga, California Yoga Center, and many many other ground-floor retail and restaurant spaces have been allowed to be converted to non-retail -- and they never came back! Those spaces are now unwelcoming, frosted-glass, locked-door, private office spaces -- the kind of spaces that should be above ground-floor.

We want, and must demand and protect, a vibrant retail community. Landlords need to accept lower ground-floor retail rents in exchange for owning prime locations. In fact, many other cities wisely penalize landlords if their space is vacant for more than 3 to 6 months -- because it means that the landlord is asking too much rent and thus the landlord is actually the one who is creating the vacancy. (Note: this provision for "vacancy penalties" could of course be waived during the pandemic -- but it should be in place during normal times).

Without a doubt, everything hurts and is distorted during this current Covid-19 crisis. There will be many vacancies during this period, and we simply have to accept that. Do NOT exploit this tragedy to further undermine retail vibrancy and viability in a lasting way. Do NOT hand more power and money to wealthy landlords while reducing the overall future quality of life in our commercial retail districts.

And don't even get me started on that heartless proposal from the wealthy landlord to reduce the minimum wage during this time of suffering. Is that constituency really the side that the city council wants to align with?!?

Let's do the right thing. Our future selves will thank our current selves for protecting quality of life in and around our commercial districts. The solution to temporary retail challenges is not to convert to office spaces.


9 people like this
Posted by chris
a resident of University South
on Sep 16, 2020 at 12:36 pm

chris is a registered user.

These so-called retail supporters don’t understand that you can’t repeal economics. In the long-run, it does not make sense to provide wholesale subsidies to retailers.

Having fewer retailers will allow the remaining retailers to become stronger.

Worrying about increasing rents is a ridiculous concept in this environment going forward. The problem is that Palo Alto like the rest of the US is vastly overstored and the retail square footage needs to be right sized for the future.


11 people like this
Posted by Metasequoia
a resident of Ventura
on Sep 16, 2020 at 1:48 pm

Metasequoia is a registered user.

Council shouldn't make decisions that permanently impact our business districts until we see how many commuters return to Palo Alto. Our daytime population has dropped at least 66% AND most everyone is staying home and not going out to shop and eat. We're going to see fewer businesses that catered to commuters.

I agree with Council member Cormack who said we should focus on policies that serve our RESIDENTS!


38 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Sep 16, 2020 at 3:20 pm

Online Name is a registered user.

What evidence do you have that Ms. Cormack wants to serve residents?

If she wanted to serve residents, she wouldn't have pushed for her big costly construction projects at the expense of resident-serving services like the libraries and she wouldn't still be pushing for more offices/commuters.


30 people like this
Posted by Staying Young Through Kids
a resident of Old Palo Alto
on Sep 16, 2020 at 4:49 pm

Staying Young Through Kids is a registered user.

Reducing rents until retail becomes viable? That's not an option for the owners and developers?

We should instead change the rules so they can turn profits?

How about the retailers and restaurants that have gone out of business thus creating these vacancies? Can we change the rules for them? Sorry...too late!

Oh no, I forgot, it's the living wage requirements that are putting these places under? Give me a break! How about the outrageous per sf leases and even more outrageous revenue share demands?

We should run in the opposite direction. Instead of eliminating the requirement for ground floor retail, we should instead levy a sizeable tax on vacant retail space in the city. There's even a precedent. If John McNellis can find a suitable retailer for Alma Plaza (Grocery Outlet is a fine addition to Midtown / Ventura) then so can these other owners.

Even though the developers are going to grumble, providing the right incentive will get us the kind of "growth" we need to keep our city vibrant. And...no matter what we do, the developers are going to grumble!


33 people like this
Posted by alarmed resident
a resident of Duveneck/St. Francis
on Sep 17, 2020 at 12:40 pm

alarmed resident is a registered user.

What a terrible idea it is to repeal the retail protection in our commercial areas. What in a downtown area would be appealing for residents and eventually when they return, for commuters, if the only presence is offices and more offices. That is not how to create a vibrant and healthy city. Now that malls have fallen out of favor among the shopping public, it is an opportunity to revitalize our town's retail. Do not repeal the retail protection ordinance. And furthermore, do not make any such far-reaching changes in the midst of the pandemic. The idea that a temporary repeal could work is ludicrous.


21 people like this
Posted by Dick D.
a resident of Crescent Park
on Sep 17, 2020 at 2:26 pm

Dick D. is a registered user.

I find it unconscionable to give any thought to reducing the minimum wage to those already hardly making it . . . hand to mouth. I say this as one of our many neighbors in their multi-million dollar homes.

With extraordinary, ultra-low rates why are the "hard pressed" landlords not refinancing and passing those savings along to renters. The renters claim rent is a major expense – wouldn't lower rents make their ability to continue in business much better.


26 people like this
Posted by jc
a resident of College Terrace
on Sep 17, 2020 at 4:20 pm

jc is a registered user.

Just another excuse to get rid of retail.

Past City council majorities, with campaign donations heavily supported by commercial property owners, have long pushed to weaken retail. They have rewarded their donors by broadening the definition of what is considered retail to include businesses that can afford to pay higher rents than traditional retail. Great for commercial property owners in the retail corridors but not for traditional retail and residents.


16 people like this
Posted by jc
a resident of College Terrace
on Sep 17, 2020 at 4:27 pm

jc is a registered user.

Also, much of downtown has been owned by the same individuals and families for decades, and in quite a few cases for generations, with property taxes tied to 1975 rates because of sweetheart deals included in Prop 13 which allowed commercial properties to change hands without prompting a new property tax assessment. Bet quite a few owners of residential properties wish they could have had such a sweetheart property tax deal when they purchased their homes!


18 people like this
Posted by CGPA
a resident of Downtown North
on Sep 17, 2020 at 5:58 pm

CGPA is a registered user.

What makes this truly ridiculous is the fact that offices are all closed and will be for the duration of the pandemic. No one is going to rent an office space at all until this is over, so the idea that this is somehow some sort of temporary accommodation just for the duration of the pandemic and not a case of "never let a good crisis go to waste" is laughable.


22 people like this
Posted by SRB
a resident of Mountain View
on Sep 18, 2020 at 8:25 am

SRB is a registered user.

A bit bizarre, there was no mention of proximity retail being a key component of making cities more walkable and reducing car dependency. Very hard to be car less in a retail/food desert.


24 people like this
Posted by More transparency
a resident of Palo Verde
on Sep 18, 2020 at 10:38 am

More transparency is a registered user.

Who are the commercial property owners in Palo Alto? I've heard most is owned by a few wealthy individuals. If so, why can't rents be reduced to weather this pandemic downturn?

It's absurd to de-vitalize downtown by adding more offices in place of storefronts for a business model. How about rent cuts by the billionaire landlords?


11 people like this
Posted by ALB
a resident of College Terrace
on Sep 21, 2020 at 1:31 pm

ALB is a registered user.

I know of a landlord in a another town who has cut the rent for her retail tenants by half since April 1st. Why can't the guys downtown and the landlord for T&C show support for tenants? The council must support retaining retail in our city. Once four individuals on the council drive changing the code to permit offices on the ground floor to appease their donors and supporters we the constituents will lose. Once retail is gutted it is gone forever. So Cormack, Tanaka, Kniss and Fine listen to the constituents and keep our current retail zoning intact.


Like this comment
Posted by chris
a resident of University South
on Sep 21, 2020 at 11:52 pm

chris is a registered user.

Most of the retail establishments closing could not make a profit if their rent was cut in half or in some cases zero. Rent is only one of the costs of doing business.

Some businesses have reasons to try and hang on but many others are better off clo.sing


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