With residents of President Hotel bracing for displacement, Palo Alto officials are rushing to draft an urgency ordinance before the end of August that would require owners of apartment buildings to provide relocation assistance to evicted tenants.

City Manager James Keene said on Monday that the new law would focus on "mitigating the impact of no-fault evictions on large multifamily rentals." It will address situations in which "the landlord decides to take those rentals off the market."

Keene said staff has begun work on the emergency ordinance in response to recent comments from the council and the general public. Tenants of the historic building at 488 University Ave. and their supporters from the broader community have been petitioning the City Council for the past two months to do what it can to prevent the conversion of the 75-unit building into a hotel.

The conversion plan proposed by the building's new owner, Adventurous Journeys Capital Ventures, already faces one obstacle. On July 17, about a month after the company purchased the 1929 Birge Clark-designed building, the city sent AJ Capital a letter informing it that the proposed conversion would violate a zoning code provision that requires property owners who remodel "grandfathered buildings" (those that were built before the zoning code provisions were adopted) to retain the same use as part of the renovation. The city had determined that shifting the use from residential to hotel would violate the provision; AJ Capital is protesting this determination.

Even as this issue remains in dispute, AJ Capital has informed residents that their Nov. 12 eviction date still stands. With that in mind, the council is now planning to pass a law that would increase the level of compensation that these residents would receive.

Karen Kao, who lives at President Hotel, was part of a group of residents who addressed the council on the topic on Monday. She urged the city to stand by the city's zoning laws pertaining to grandfathered buildings and to not grant AJ Capital any exceptions.

Kao, who moved to the apartment building 14 years ago, characterized President Hotel as a safe and cohesive place that affords its residents both privacy and a sense of community. She requested that the council pass an ordinance that would halt the evictions until all legal and policy issues are resolved.

"We are your humble voter-residents who voted you into office so you can do the right thing," Kao said. "So we appeal to you to guard us against this Goliath."

Nick Selby, a resident of Melville Avenue, also asked the council to ensure that the residents are treated fairly by AJ Capital as part of the eviction. Many residents had complained that the $3,000 relocation payments that the company had offered are woefully insufficient to cover their moving costs.

"If AJ Capital does not act fairly for residents of the city, it deserves nothing from the city," Selby said. "Many of the residents of the (President Hotel) apartment building have lived there for 20 years. It's not fair treatment of those residents to treat them as a mere inconvenience and to evict them on a basis of a few months' notice and a small payment of money -- as if that is all their lives are worth -- just for the sake of having an empty building while they seek permits for their project."

Keene said that staff hopes the new ordinance, which the council is tentatively scheduled to take up on Aug. 27, will "help to soften the blow" during what everyone realizes is a difficult time for residents.

"The ordinance should be able to address the process for rendering assistance that might be appropriate," Keene said.

At the same time, city officials are taking a more cautious approach about approving further laws to bolster rental protections. Staff is now reviewing a colleagues memo on the subject that was submitted last month by council members Tom DuBois, Karen Holman, Lydia Kou and Cory Wolbach. Keene said he expects the council to take up this memo in September.

City Attorney Molly Stump said Monday that there are "significant limitations" on what the city can do under state and federal law to determine tenant arrangements in the private building. While the zoning code can prevent certain uses at the site, the city has little ability to require that President Hotel remain an apartment building, Stump said. One action it can take, however, is adopt mitigation measures.

"There is a window, provided by the city, under the Ellis Act, that does allow municipalities to enact reasonable mitigations when the owner chooses to go out of the rental business, which they have the right under state law to do," Stump said.