BY BRADEN CARTWRIGHT
Daily Post Staff Writer
Palo Alto City Council wants more types of businesses — such as bars, cat cafes, medical spas and larger gyms — to have an easier path to opening.
The city is working to relax its permitting rules in an attempt to fill vacancies around downtown and California Avenue.
For bars, the city currently requires businesses selling alcohol to have at least half of their revenue come from food sales.
But members of the Retail Committee said they’d be open to allowing pure bars and were surprised that such a ban existed. “We have to try to balance having evening vitality, including for younger people, without having it be an over-the-top scene in our downtown,” Councilman Pat Burt said at the Retail Committee meeting Thursday (Jan. 22).
Burt questioned how The Rose & Crown at 547 Emerson St. follows the city’s rules.
“Maybe I’ve had a snack there,” he said.
Councilwoman Julie Lythcott-Haims said Bar Underdog at 299 California Ave. also looks like a bar with snacks.
“I don’t want it to go away, because I hear good things about it,” she said.
The city allows open containers at times on California Avenue, so it’s strange to not allow bars there, Lythcott-Haims said.
Councilman Keith Reckdahl also said he was open to having bars.
“I don’t understand how we have concerns that a bar would have rowdy patrons, but if we serve nachos those issues go away,” he said at the meeting.
Confusion over cat cafes
On cat cafes, the city ran into some confusion when Mini Cat Town opened a pop-up at the Stanford Shopping Center where customers could come in, play with cats and potentially adopt them.
The city threatened to shut down Mini Cat Town because the operation was considered “kennel and boarding” and not a retail pet store, according to code enforcement officers.
The city ended up backing down, and Mini Cat Town reopened in August at 429 California Ave.
Now city planners are working to clarify the rules about what’s considered boarding, the types of animals that are allowed and the rules they’ll face for noise, odors and waste.
Hard time for spas
Medical spas have also had a difficult time opening in Palo Alto, Assistant Director of Planning and Development Services Jennifer Armer told the Retail Committee.
These businesses are usually considered personal services, but sometimes they offer treatments that involve a doctor, like Botox or laser procedures.
The city considers a business a medical office if there’s a doctor on site, and they can’t open in retail areas.
“There’s a lot of interest in these types of services,” Armer said.
The city currently limits gyms to less than 1,800 square feet, but retail consultant Christine Firstenberg recommended allowing gyms up to 5,000 square feet.
Fitness is one of the most active retail categories throughout the Bay Area, and most classes are offered in spaces around 5,000 square feet, Firstenberg said. That’s also about the size of Palo Alto’s median vacant space, she said.
“What is the higher priority — a concern about fitness, or a concern about vacancy?” she asked the Retail Committee.
Reckdahl and Burt said they’d be open to larger gyms off the main street.
Car showrooms OK
The Retail Committee also endorsed the idea of allowing car showrooms and financial services that are open to the public.
Their recommendations will go to the full Palo Alto City Council for approval.
“We can really have a better narrative for our residents and for prospective retailers and brokers so that they understand things aren’t the way they were five or 10 years ago, and we’re on a path to being even better,” Burt said.
why on earth do we need more spas????
Because the beautiful people of Palo Alto like to be pampered?
Some sort of penalty to landlords for vacancy that might even look like encouraging them to provide incentives to potential renters might increase more vibrancy and innovative retail and services, especially on calave.
These places are vacant because a business doesn’t want to rent where they are drowning in different regulations, not because the landlords don’t want to lease the sites.
Re our 41% decline in sales tax revenues, aren’t most spa/medical services still as tax exempt as when former CC member Allison Cormack was pushing them as great replacements for Town & Country’s traditional retail business back in 2021 just before the pandemic lockdown ended?
Maybe Assistant Director of Planning and Development Services Jennifer Armer and/or our CC Retail/Finance “leaders” could comment on the expected Sales TAX revenues from these proposed new med/spas taking into account current laws requiring an in-house doctor to provide many of those services our “leaders” find so interesting.
Re attracting more bars, note many struggling downtown restaurants have never restored their pre-pandemic lunch service. Do our leaders think they’ll welcome competition from new bars? Do they their proposal to attract all-day drinkers will buck the NATIONAL decline in alcohol consumption and reverse last year’s 41% decline in sales tax revenue?
Remind me how these bars will afford downtown PA rents.
“The Retail Committee also endorsed the idea of allowing car showrooms and financial services that are open to the public.”
Huh? So people can now go into BofA, Republic Title and Fidelity to stare at brokers, tellers and the stock tickers! Tough choice between this fun activity or using the consultants’ recommended sleeping pods.
So PA expects these proposals to reverse the 41% sales tax revenue decline while surrounding communities with their modest sales tax revenue increases get popular new Asian markets raising both their sales tax revenues and downtown foot traffic.
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Where are you getting that there is or has been a 41% decline in sales tax revenues? I’m looking at the city’s 2026-FY 2035 Long Range Financial Forecast (LRFF), Table 3, and it doesn’t show anything of the sort. Here are the sales tax numbers from that table (add 000 to each figure):
Actual 2023 $39,926
Actual 2024 $37,482
Adopted 2025 $39,577
Projected 2025 $39,577
Projected 2026 $39,827
Projected 2027 $41,105
Councilperson Julie Lythcott-Haims said she doesn’t want the Bar Underdog to go away. That’s good. But the council has too much power if it can cause any business to go away. That power shouldn’t be vested in a seven-member panel of people who are completely ignorant of what it takes for a business survive. Let’s let businesses thrive without interference from the city.
In reply to Paula.
Isn’t Julie Lythcott Haims the council member who said we should give back all the land within the city limits to the Muwekma Ohlone people? How did we get a kook like that in a position to make important decisions about other peoples livelihoods?