When Jeff Farrar proposed a plan last April to build a 350-apartment complex on Fabian Way, near the southern edge of Palo Alto, he became part of a wave of developers relying on the state provision known as builder’s remedy to circumvent local zoning laws and opposition.
Prior to this August, the city didn’t have a state-certified Housing Element, which made it vulnerable to builder’s remedy application. As of this month, it had received 10 proposals, the most ambitious of which is a three-building complex with two residential towers at 156 California Ave., site of Mollie Stone’s. City Council members have adamantly opposed builder’s remedy projects and city staff has maintained that these projects are not legal because the council had already certified its own Housing Element, a position broadly rejected by many housing advocates.
This week, Farrar and his development partner, Juno Realty Partners, indicated that they are setting aside the builder’s remedy plan for 3997 Fabian Way and pursuing a smaller, zone-compliant project. To do that, they are relying on the city’s newly established “housing focus area” around San Antonio Road, an area where the Housing Element envisions about 2,000 new dwellings. As part of the city’s change, commercial and industrial sites in this area are now able to accommodate housing with relatively loose development standards.
The new application is relying on these relaxed standards, as well as the State Density Bonus Law, to propose a seven-story development with 295 apartments at the corner of Fabian Way and East Charleston Road. The buildings would have a height of 88-feet and the bottom two stories would be designated for parking. The development would include 19 apartments for households in the “very low” income category, between 30% and 50% of area median income. The unit composition will be 133 one-bedroom apartments, 85 two-bedroom apartments and 77 studios, according to the plans.
Attorneys for Farrar’s company, the Far Western Land and Investment Company, argued in a letter that the developer has a legal right to move ahead with the builder’s remedy application, which was submitted months before the state Department of Housing and Community Development approved the city’s housing plan. But to be “cooperative with the City,” the applicant agreed to “toll” the builder’s remedy project for the time it takes to review the new one.
“Because the applicant has invested significant resources to comply with the City’s Comprehensive Plan and Zoning Code and pause the Builder’s Remedy Project, we hope that expect that the project can proceed on a streamlined and efficient path forward … ,” attorneys Genna Yarkin and Chelsea Maclean of the firm Holland & Knight wrote.
The Far Western project isn’t the only developer that walked away from builder’s remedy to pursue a zone-compliant project. Acclaim Companies last year pitched a builder’s remedy project to build a 380-apartment complex at 3180 El Camino Real, former site of Fish Market. The council responded by rezoning a stretch of El Camino Real to allow for much higher and denser buildings, revisions that in many ways mirrored the development standards in the Acclaim project.
In August, Acclaim submitted a new application that is designed to comply with the rules of the new El Camino Real focus area. The seven-story project would have a height of 79 feet, according to the application. It would include 76 “low income” units. The project would also have ground-floor amenities such as a fitness area, a club room, co-working space and a bike-storage room.
Holland & Knight is also representing Acclaim in its development for the former Fish Market site.
The Fabian Way project, like the Acclaim one, is hoping to get swift approval through a streamlined process that would be limited to a single hearing in front of the Architectural Review Board followed by a decision by the planning director.
This is a sharp break from the city’s historical approach, in which major developments go through a series of architectural review hearings and get vetted by the Planning and Transportation Commission and the City Council before they could get approval. Under the streamlined process, the project will only go to the council if someone appeals the director’s decision.
The two applications represent an truce of sorts. Palo Alto gets to avoid the builder’s remedy process, which officials say robs them of local control. The developers can now get pretty much everything they want without the need to rely on builder’s remedy, thanks to the city’s new zone changes. Developments with seven or eight stories, that just a few years ago were broadly viewed as excessive by most council members, are now seen as perfectly palatable, provided they are in the areas that the Housing Element envisions for housing.
That said, some builder’s remedy projects, like the Mollie Stone’s one, remain well outside the council’s comfort zone. During a recent forum sponsored by Palo Alto Neighborhoods, Council member Pat Burt described the Mollie Stone project as an “abomination.” Planning commissioner Cari Templeton said builder’s remedy’s function is to “intimidate the community into building projects in areas that are considered more obstructionist than permissive.”
Planning commissioner George Lu, who is also running for council, said at that forum that while builder’s remedy does not solve any problems for the city, it does solve one for the state, which is trying to get communities to build more housing.
“It wants carrots and sticks to build housing. Builder’s remedy is a stick,” Lu said.
