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About this blog: So much is right — and wrong — about what is happening in Palo Alto. In this blog I want to discuss all that with you. I know many residents care about this town, and I want to explore our collective interests to help ...  (More)

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PA's downtown business problems not simple to solve

Uploaded: Sep 15, 2021
Some businesses are closing in Palo Alto's downtown; city business revenues the past two years have dropped significantly, and the town's main street connecting 101 to Stanford -- University Avenue -- has been closed to traffic for the past several months to provide outdoor space for restaurants. Hotels remain unfilled, hotel taxes to the city have dropped, boarded storefronts are apparent around the downtown.

So, the downtown business issues for council members to decide are: a) whether the city should hire an economic development person, b), what months should University Avenue be closed to cars, c) should the city impose a new business tax, and d) if restaurants use sidewalks and a parking spot for extra outdoor eating space, should the city charge businesses rent for these "parklets."

University Avenue has seen its tax receipts drop by 32.2 percent between 2019 and 2020, and by another added 1.5 percent drop between 2020 and 2021, according to recent reports from the city's consultant, Avenu Insights, and from city staff. The financial problems are real and there's fear that more businesses may be forced to close if the city doesn't focus on what to do.

The reasons for the downfall are several: the pandemic causing people to shop and dine less, the decline of full-time workers downtown daily -- many people are finding it better to work at home some or all of the week, and the increase in online shopping in lieu of trips to local retail stores.

Today, I'll tackle the hiring of an economic development director (EDD). This position has certainly been fluid over recent years in Palo Alto. The first EDD I remember talking with in the early 1990s tried to recruit a couple of new businesses (she brought a few in), talk to Midtown shopping district's owners to try to increase retail stores and spruce up the visual ambience (she failed), and develop a plan to improve retail downtown. Two of the succeeding directors thought their job was to be chummy with the Chamber of Commerce -- attend board meetings, store openings and Parties! And one director tried to redevelop the business directory (which still needs work).

Along the way, I met with the EDD of Menlo Park, an aggressive, friendly guy, who analyzed the retail mix on Santa Cruz Avenue and decided certain businesses were missing at the time, like a children's clothing store, a paint and wallpaper place, an art gallery, etc. He used his contacts, met with a couple of retailers he thought might belong in MP downtown and got them to relocate. Then he realized the block on El Camino just south of Santa Cruz would be a good spot. His big coup was in recruiting Pendleton -- a women's and men's woolen clothing specialty store. He convinced them they would get more eyeballs on ECR and there was parking in front. Pendleton set up an outlet, three other retailers moved into adjacent space and voila!

He is my model now for an active economic development director. He brought in a lot of new retail.

PA's city council is now struggling with the hire. Led by Mayor Tom DuBois and councilmember Lydia Kou, they hope to have a director who would work on wooing retail.

That director position would cost about $275K or so, but if a person with connections, business acumen and convincing skills was found, I believe s/he would be worth it.

City Manager Ed Shikada has a different point of view He sees the job as a research analyst. His description of the job includes analyzing the business registry, studying demographics and economic indications as well as "existing and emerging clusters," and creating an "economic snapshot' of the city. That job would warrant a $160 to $190k (plus benefits). I am not sure what this jargon really means.

To me that sounds more like an assistant /business position, The city needs to look for a leader, not a clerk. Shikada said the position would report to him.

This hire of an economic development director is crucial, in my estimation, and this role is one of the biggest and most-needed and necessary jobs for our downtown's future. As one council member pointed out, this is one of the few jobs, if done properly, that pays for itself.

Palo Alto's financial future is at stake. It's time for the council to decide what kind of EDD it wants, and then go out quickly and hire the right one. Easy to say, I know. But we have to decide and act now, not a year from now, which is how long staff predicts this hire will take.


Kudos to the council for expanding the role of the outside police auditor, the OIR group. Director Michael Gennaco's concern about getting more information about the police department's work and making it public was refreshing, to say the least. No more departmental excuses that some cases were too minor to report, and indeed fewer police clashes will no longer be referred to the city's HR, but to OIR. Good work, council members. I think the public is relieved and believe the needed police oversight will happen


NOTE -- After my recent blog, "Is PAMF running amok?" at his invitation, I met with Dr. Robert Nordgren, who is Area CEO for Sutter Health, in charge of most of the Peninsula. He said he plans on hiring six to ten new MDs by the first of the year, focusing on finding more GPs. They are difficult to convince that they should move to this area while also paying off the medical school loans, he said. I wish him good luck, on behalf of all of us.

Local Journalism.
What is it worth to you?


Posted by Bystander, a resident of Another Palo Alto neighborhood,
on Sep 16, 2021 at 11:21 am

Bystander is a registered user.

Pleased that your blog got attention. Journalists obviously can make a difference. Thanks.

Posted by Consider+Your+Options.+, a resident of Another Palo Alto neighborhood,
on Sep 16, 2021 at 9:46 pm

Consider+Your+Options.+ is a registered user.

A's hire A's. B's hire C's and D's.

An analyst? Really?

We also need property owners to recognize that Covid and the shift to online work has changed the downtown business scene forever. It's time to recognize that and adjust rents to reasonable levels.

Greed is eternal.

Posted by DianaDiamond, a resident of Midtown,
on Sep 17, 2021 at 8:12 am

DianaDiamond is a registered user.


I agree high rents are a good part of the problem. My good friend, who owned University Art, Once complained to me that she just got a notice her rents were going up A LOT, and she would have to move out. "How many tubes more of oil color and water color must I sell to pay for this rent increase? We can't do it."

And that's how these things happen. Greed? Probably.
And I hope the work-at-home practice will not really last long. We need to work with others, who make us more creative. And we also work in an office more conscientiously, I think


Posted by Anna Delacroix, a resident of Leland Manor/Garland Drive,
on Sep 17, 2021 at 9:00 am

Anna Delacroix is a registered user.

Concurring with Tim R...removing ALL of the homeless from downtown Palo Alto would make the area both a safer and far more enjoyable place to shop or dine.

Los Alto doesn't seem to have this problem. Why has Palo Alto and Mountain View become havens for the indigent?

Posted by Jennifer, a resident of another community,
on Sep 17, 2021 at 10:45 am

Jennifer is a registered user.

The homeless are everywhere, especially in California. It's a bigger problem in liberal cities because liberal cities are more permissive. SF is a perfect example. Palo Alto is a liberal city as well. It's probably not the answer you're looking for, but it's the truth.

Posted by Skibum, a resident of Community Center,
on Sep 20, 2021 at 12:19 pm

Skibum is a registered user.

While crunching the relevant numbers and recruiting an effective development director should help, it may be premature to base policy decisions without observing the long-term shift to remote working and online shopping. The golden era of daily commuters and shoppers may not revert to pre-Covid patterns. A charismatic retail promoter might slow the decline, but we may have indications that land usage patterns have evolved. More clicks and few car trips. More Zoom meetings and less commuting. Work from anywhere means affordable housing options may be elsewhere. It doesn't seem the Council is seriously considering that the new normal will change the character of the City. Further impacts on City budgets and infrastructure planning.

Posted by Anna Delacroix, a resident of Leland Manor/Garland Drive,
on Sep 20, 2021 at 1:20 pm

Anna Delacroix is a registered user.

Concurring Jennifer.

Los Altos is noticeably more conservative than Palo Alto and is not confronted with social issues (like homelessness, vagrancy, and
unwarranted public disturbances) because their residents (multi-ethnic,
upper middle class and/or upwardly
mobile) will not stand for it.

Palo Alto and Mountain View could
take a lesson from this mindset and erradicate all of the homeless from their immediate vicinities.

Palo Alto should

Posted by dana hendrickson, a resident of Menlo Park: Central Menlo Park,
on Sep 21, 2021 at 8:07 pm

dana hendrickson is a registered user.

Menlo Park has not had an economic development manager for several years but now has a recruiting effort underway and a ED consultant. It has never had an economic development plan nor a downtown development manager who had broad responsibility for the vitality of its downtown. The latter role would extend beyond economic development and deal with the challenges of making downtown a hub for a variety of social activities. Downtown should not be viewed solely as a place to shop.

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