The Palo Alto City Council will get its first, long-awaited crack Monday at reforming the city's contentious planned-community zoning, which the council last year put on hold following a citizen referendum that pushed back on development.

The zoning, which has been in existence since the early 1950s, allows developers to seek exceptions to land-use rules in exchange for public benefits that are negotiated on an ad hoc basis. Over the years, the public benefits have included everything from public plazas and grocery stores to sculptures and affordable housing units.

The Palo Alto Municipal Code is intentionally vague in its definition of public benefits. Leaving it open, the thinking goes, gives the council the maximum leeway in demanding whatever they deed appropriate. Now, with the planned-community (PC) zoning suspended and residents rising up against denser projects (the most recent one, a proposed housing development on Maybell Avenue, was overturned by the referendum), the council is preparing to either reform the process or abolish it altogether.

The Planning and Transportation Commission has already held two public hearings on the topic and offered a list of recommendations, including better definitions of public benefits; routine use of an independent economic analysis to review the value on PC requests; and clarification of the roles and responsibilities of local commissions.

"The general consensus of the group was that PC zoning provides a unique opportunity for flexibility to be used to facilitate community needs and, while the process may need refining in a number of areas, PC zoning or something like it should remain in the community's development tool box," a city staff report notes.

The planned-community zoning district has been in place since 1951 and has been used to approve about 100 projects, according to planning staff. The city revised the process in 1978, specifying that the zoning would be used when more traditional zoning districts don't provide sufficient flexibility to allow the proposed development; when the development will provide a benefit "not otherwise attainable"; and when the development is consistent with the Comprehensive Plan, the city's land-use bible.

Both the planned College Terrace Centre at 2180 El Camino Real and the new four-story building at 101 Lytton Ave. relied on planned-community zoning to create projects with large amounts of office space.

A new report from the planning department includes a list of the changes for the council to consider in its reform effort. One is to set specific criteria for where PC projects could be allowed, either by designating geographic locations or by creating a minimum land requirement. Another idea is to create a menu of public benefits that would be allowed a reform that would add predictability at the expense of flexibility. The planning commission has extensively discussed a possible menu, which would include such things as affordable and senior housing, and most commissioners have expressed support for the idea.

Also on the list of reforms is the creation of a schedule to monitor the benefits gained through planned-community projects, though staff warns that some benefits may not be enforceable in the long run. Staff lists as one such public benefit a requirement that a specific business remain open.

The city can also rely more on development agreements -- a process that Palo Alto used in approving the massive expansion of the Stanford University Medical Center.

One alternative would create a two-tier system in which some types of projects would use development agreements and others would choose public benefits from a menu.

Though the council unanimously agreed that reforms are needed, there is currently no clear consensus on what those reforms would look like. Mayor Nancy Shepherd, who is seeking re-election, said at Tuesday's candidate forum that she would favor forming a citizens committee to vet all of the city's previous PC projects and make a recommendation on how to move ahead.

During the forum, she asked another candidate, attorney A.C. Johnston, how he would change the planned-community process. He said he would "use it very rarely."

"We have to be very clear that whenever we will grant variances from zoning, we will ensure there are real public benefits that are delivered to the community in return for getting that variance and we will make sure that we get the benefits that have been promised to us," Johnston said.

He also argued later in the forum that the city should update its Comprehensive Plan (the city's land-use bible, which is in the midst of an update) before it considers changing planned-community zoning.

Though Shepherd said she didn't believe Johnston's proposal to use PC zones rarely would give "enough security to the PC process as we know it today," the two agreed that the zoning should remain in place in some form or other.

Not everyone shares this view. Councilman Greg Scharff, who is also running for a second term, said at Tuesday's candidates forum that he believes it's time to eliminate the zoning. In a recent interview with the Weekly, he argued that the community no longer has any confidence in the process. No matter what benefits are offered, residents will be unhappy about the city allowing developers to exceed height and density regulations.

"I don't really see how we can reform it," Scharff said. "And if we can't reform it, we need to eliminate it. I'd completely support eliminating the PC process."

Right now, there is only one PC project in the city's pipeline: a proposed commercial development at 2755 El Camino Real, near the busy corner of El Camino and Page Mill Road. That project has been in limbo since the end of 2013, when the council put a moratorium on planned-community projects.

The developer, Pollock Realty Corporation, argued in a recent letter to the city that the development should be approved even despite the ongoing timeout on planned-community zoning. The project, the letter argued, is a "modest proposal," far smaller than the office projects recently proposed by Jay Paul Co. for 395 Page Mill Road and by John Arrillaga for 27 University Ave. (the former application was later withdrawn; the latter was never formally submitted). The project has also already undergone hearings before the council, the Architectural Review Board and the planning commission.

The reviewing boards, Pollock argues, "should have indicated their unwillingness to proceed with a PC zone for 2755 ECR if anybody held such a strong discouraging view of our PC zone application."

"This feels like being told in the ninth inning of a ballgame you're winning that games are now changed to 14 innings, and some of the rules of the game are going to change," Pollock's letter states.

The council's Monday discussion is scheduled as a study session, which means no formal votes will be taken and no changes made.