Residents concerned about downtown's parking shortage are calling for Palo Alto officials to hit the brakes on approving the latest office development that relies on zoning exemptions to reduce the number of parking spots it must provide.

The development at 240 Hamilton Ave. has already secured the approval of the Architectural Review Board and is set to get its final green light at tonight's City Council meeting. The project is listed on the council's consent calendar, which means it will be approved automatically and with no discussion unless three council members choose to remove it from the calendar.

The new four-story building would stand next to Reposado Restaurant, across the street from City Hall. In granting approval, the city exempted the applicant, Hayes Group Architects, from providing 20 parking spots that would normally have to be included in the project. That's because the new development would be replacing an existing commercial building. As a result, 7,000 square feet of the new development would be exempt from parking regulations because of a "grandfather" clause in the city code.

For project critics, that's a problem. The existing building, they note, is only 5,000 square feet. In coming up with the 7,000-square-foot figure, the developer and the city included a 2,000-square-foot "mezzanine" that was not considered usable space at the time of the initial assessment. Now, with the developer seeking parking exemptions, it is used in the application to increase the square footage of the existing building and reduce the number of spaces the new building would have to provide by eight.

Overall, the office building would provide four parking spaces on site, though it would also create a curb cut that would reduce the number of street spaces by two. With downtown already facing a steep parking shortage and officials scrambling for solutions, residents are appealing the approval and crying foul over the scope of the parking exemptions granted to 240 Hamilton Ave. In a strongly worded letter, Palo Alto Neighborhoods (PAN), a coalition of neighborhoods, raised flags about what it called "significant problems with the project proposal, including the inappropriate loss of $486,000 of taxpayer money," the organization's estimate for what it would cost to provide those eight parking spaces.

"As you well know, the downtown parking crisis is getting worse month by month and city funds are always in short supply," Sheri Furman, the group's chair, wrote in the letter. "For an applicant to be given an exemption for eight parking spaces and not have to pay almost half-a-million dollars due to an erroneous project description and determination is unconscionable."

Jeff Levinsky, who brought up the parking issue at the Architectural Review Board meeting in July, sensed there might be a problem with the application when he saw the existing building being described as both a 5,000- and a 7,000-square-foot one. He and Doria Summa, a land-use watchdog from College Terrace, investigated the issue further and after visiting the building found that the extra 2,000 square feet refer to what basically amounts to a small attic, not a "usable space" that would trigger the exemption. The space has no windows and, until 2012, had no staircase access, Levinsky said. It was recently renovated by Inhabiture, a design firm that currently occupies the building, he said. Levinsky also cited numerous reports that peg the existing building at 5,000 square feet. These include the staff report from the July 18 meeting of the Architectural Review Board, which calls the new building a "5,000 sq. ft., two-story commercial building" (the report provided to the council for tonight's meeting says the building will "replace a 7,000 sq. ft. one-story building").

From critics like Levinsky, the difference amounts to a giveaway to the developer who does not wish to pay for adequate parking. He criticized the city for allowing the applicant to get a parking exemption for what he called a "phantom second floor."

"What they're claiming is that they have another 2,000 square feet of 'mezzanine' or 'partial second floor' and they don't," Levinsky said. "What is there is an attic that has been there since the building was built and that was only recently put into use."

The staff report states that the 2,000-square foot space was not included in the initial parking assessment because it was "considered as 'incidental office' to the previously permitted retail use or vacant at the time of the engineer's report ..."

The residents' appeal of 240 Hamilton Ave. was filed by Douglas Smith, a downtown resident concerned about the glassy, modern design of the new building, which he said isn't compatible with the more traditional buildings around the site. His appeal was co-signed by 23 other residents, including Ken Alsman and Neilson Buchanan, both of whom have long decried the spillover of cars from downtown's commercial core to the residential blocks.