"I don't think it is often that we get that many landowners to show up and say 'Something is not working here,'" said council member Tom Means.
About a half dozen property owners talked about having major problems bringing in tenants since 2001, when the city cracked down on the dot-com real estate boom in the neighborhood. At that time, the council wanted to prevent auto shops and other lower-rent uses from being pushed out of the area, but the owners say the dot-com bust quickly solved that problem. Today, they say, the policy has backfired, causing new office buildings to remain vacant for years while strict parking regulations and expensive conditional use permits are threatening the existence of small retail businesses.
"The dot-com scare never happened, it was a chimera," said property owner Gary Cook.
Council member Mike Kasperzak was on the City Council in 2001, and says there were several auto shops seeing their rents raised at the time. Many said outcry from Larry's Autoworks almost single-handedly brought about the change after his landlord wanted to raise rents to $6 a square foot to bring in offices, even as nearby auto shops were paying 70 cents a square foot. Larry's eventually moved to Leghorn Avenue, and his old building remained vacant.
Times have changed, Kasperzak said, and "another dot-com real estate boom is probably not going to happen again in our lifetimes."
City attorney Michael Martello explained that the 2001 City Council direction wasn't a new policy, but that for years the Planning Department mistakenly interpreted language in the CS zone, previously known as the CG zone, to mean that commercial (including offices) and retail uses were allowed. But actually the zoning ordinance said "commercial retail," he said, which is exemplified by places like Kelly Paper and Baron Park Plumbing Supply.
So several restaurants and non commercial retail stores went in, and large office buildings were built mistakenly, such as the Kobza building on the corner of Rengstorff and Old Middlefield Way.
"To me that seems like a pretty big mistake," Means said, pointing to the Kobza building.
The owner of the building, architect Dennis Kobza, said he built it 23 years ago.
"We're talking about fairness here," Kobza said, adding that he pays $1,700 for a conditional use permit every five years to stay in his own building.
Owners of a small TV repair shop on Rengstorff Avenue complained that business is down significantly after the city told them to remove signs from sidewalk. Now, he said, they can't pay their conditional use permit, which allows them to sell the TVs they repair.
Property owners also said they want more "flexibility" in what is allowed in their buildings, as they can't afford to rebuild them to suit the current zoning requirements. Charles Gardyn, owner of the La Costena building at Rengstorff Avenue and Old Middlefield Way, said many small businesses that will fit in some places can't afford the studies the city is requiring for conditional use permits in the CS zone.
"I've had to forgo rent for months," said building owner Russ Chagal. "I've had tenants have to move out after they were shut down," by the city.
The Peninsula Youth Theater had slightly different concerns. PYT rents an industrial building on Old Middlefield Way, as it is affordable and located in the only zone that allows them to construct theater sets.
"If the zoning changes, where would we go?" asked executive director Karen Simpson. "Because there is no place else."
Council member Jac Siegel shared the concern that the areas zoned CS were already relatively small, with a small area on Yuba Drive being the only alternative to Old Middlefield Way for construction- and repair-related businesses. But, he said, "If we don't do anything we're essentially putting them [office owners and retail stores] out of business, and I don't think that's right."
The council found difficulty zeroing in on what exactly should be done, but voted to have the Planning Department study whether it is possible to provide some emergency relief for the owners. The area will be studied in depth for the ongoing update to the city's General Plan, which guides future development in the city.
This story contains 754 words.
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