When the Palo Alto City Council struck a deal with The Sobrato Organization earlier this year to redevelop the Portage Avenue campus once anchored by Fry's Electronics, both the city and the developer hailed the outcome as a welcome breakthrough after two years of tension and uncertainty.

But for residents and neighborhood activists who have spent the better part of the past two years preparing a new vision for a broader Ventura neighborhood, both the Sobrato agreement and the council's long-term plans for the area fall well short of expectations. With the council preparing to adopt the North Ventura Coordinated Area Plan, which will revise land use designations and design standards in a 60-acre section of Ventura bounded by Park Boulevard, Lambert Avenue, Page Mill Road and El Camino Real, critics contended Monday night that the proposed document fails to meet key goals that the city had established when it embarked on the exercise.

The council began discussing on Monday night the latest iteration of its preferred alternative for the North Ventura Coordinated Area Plan, an exercise that it launched in 2020 with the goal of adding affordable housing, retail, park space and other amenities to the chronically underserved Ventura neighborhood. While council members have generally coalesced around a relatively modest growth alternative — one that would result in about 620 dwellings in the planning area while reducing both office and retail space — residents remained far apart when it came to their preferred vision for Ventura. The only thing they agreed on Monday was that the one on the table isn't it.

Gail Price, who co-chaired the North Ventura Coordinated Area Plan working group and who sits on the board of directors of the nonprofit Palo Alto Forward, argued that the plan now being considered is far too modest. During the planning process, Price was the only working group member who supported an alternative known as "3B," which would have added about 1,500 new dwellings and 126,600 square feet of new office space to the Ventura area. That was the only alternative that city staff and consultants deemed to be financially feasible.

The refined alternative that the council favors comes with relatively modest ambitions. A report from the Department of Planning and Development Services notes that, overall, "It is not anticipated that there would be significant turnover or growth in the plan area." While the 60-acre area currently includes 142 dwellings, that number would go up to 670 thanks to addition of three-story townhomes and four-story multifamily buildings.

Office space would gradually diminish from the current level of 744,000 square feet to 466,000 square feet at full build out. Existing offices would be allowed to continue until the buildings are demolished, at which point office space would not be rebuilt. The plan makes exceptions, however, for small professional offices such as dentists and clinics, with 5,000 square feet of space or less.

Retail, however, would also see a dip. The city staff projects that the total retail square footage will decline from 111,2000 square feet to 103,700 square feet. As part of the city's deal with Sobrato, the developer will be allowed to retain the research-and-development space inside the Fry's building. This virtually ensures that one of the largest retail spaces in Ventura — the former home of Fry's — will see only minor retail uses in the foreseeable future.

Price characterized the proposed plan as a wasted opportunity. The area plan, she said, could have been a model of sustainability and a subregional hub for housing, jobs, recreation, art and transportation.

"With future-thinking and innovation in Palo Alto, we deserve better," Price said. "We are disappointed.

"The refined preferred alternative has lost this opportunity for generations to come and it is looking to the past and not to the future."

Her co-chair on the working group, Angela Dellaporta, also had some misgivings about the preferred alternative, which she argued falls below the city's goals of creating a thriving community with neighborhood retail, enhanced dining and housing for various income groups.

"In contrast, the proposal made recently features: unneeded office space; a tiny spot of retail; very little housing; and strict segregation of market rate and below-market-rate units," Dellaporta wrote to the council. "I wish I understood exactly why the council is seriously considering wasting the wonderful potential of the area."

Most of their colleagues on the working group similarly opposed the council's preferred option, but for other reasons. Some argued that office space is the last thing the neighborhood needs. Some supported a scenario with less new housing while others suggested that the plan should have done more to preserve the historic cannery building at 340 Portage Ave. that used to house Fry's.

Terry Holzemer, a member of the working group, complained that the plan doesn't do enough to prioritize the cannery, which was built by Thomas Foon Chew more than a century ago and which in 1920 served as the third-largest cannery of fruits and vegetables in the world, according to the city's historic consultants. While the city's deal with Sobrato ensures that the public will have access to the historic portions of the building, it also allows Sobrato to retain its research-and-development tenants rather than convert it to retail or housing.

The Sobrato deal also provides the city with land to build a future affordable-housing complex and a small park next to Matadero Creek. The developer, meanwhile, will be allowed to build 74 townhomes on the section of the Fry's building that runs near Park Boulevard.

Holzemer criticized the city's latest plan, which proposes raising permitted heights in the neighborhood from 35 feet to 45 feet on parcels close to single-family homes and to allow heights of up to 65 feet for developments that consist of below-market-rate housing.

"We did not ask for additional office development," Holzemer said. "We did not ask for significant height impacts on existing homes. We didn't ask for a huge increase in housing density that is 2.5 times what the city allows in other parts of the city."

The council did not take any actions on the plan, opting to defer its discussion until Nov. 14. Among the questions that it plans to consider at that time are: Should the city change its parking standards? How tall should affordable housing projects be allowed to be? And to what extent should the city rely on "transportation demand management" programs to manage traffic impacts of new developments?

Once the council opines on these matters, staff plans to draft the plan and move ahead with environmental analysis, with the goal of completing the planning exercise and adopting the plan by August.

Rebecca Sanders, moderator at the Ventura Neighborhood Association, argued that the plan includes too much residential density and complained about the council trying to turn the neighborhood into a "mini-Manhattan."

"Why must Ventura be asked to absorb a lion's share of housing when Ventura is a virtual mouse as far as receiving city amenities like code enforcement, and cleaned and maintained streets and sidewalks?" Sanders asked. "Have you driven through Ventura lately?"

But while too dense for some, the concept proposed by staff doesn't meet the Metropolitan Transportation Commission's standards when it comes to density in transit-oriented communities. The Ventura vision being advanced by the council would allow a residential density of 30 dwelling units per acre, while the state standard calls for 75 units per acre. The city's parking requirements would also be far too stringent to qualify for the state designation, with Palo Alto's preferred alternative requiring a parking space for every residential bedroom and for every 250 square feet of commercial space. The state standard calls for a parking maximum of one parking space per residential dwelling and one space per 400 square feet of commercial space.

The plan's inconsistency with MTC standards for transit-oriented communities means that the Ventura area will not be eligible for MTC grants associated with such developments, according to staff.

One aspect of the plan that will likely have to undergo significant revisions is parking requirements. Thanks to the recent passage of Assembly Bill 2097, cities are no longer allowed to establish parking minimums in areas close to transit, a rule that will impact the Ventura area because of its proximity to the California Avenue Caltrain station. To accommodate the new law, planning staff is proposing switching the city's parking policies from parking minimums to "parking maximums," establishing a ceiling for how much parking new developments can provide. That is one of the changes that the council plans to consider on Nov. 14.

Resident Jeff Levinsky cautioned the council not to eliminate or reduce parking requirements, AB 2097 notwithstanding. The law, he noted, still allows the city to mandate parking in situations where it can demonstrate that not demanding it would have a "substantial negative effect" on nearby areas, a situation that Levinsky argued exists in Ventura.

Levinsky also argued that the city should start charging developers impact fees for parking that is not being built.

"We already have impact fees that vary based on how the building will be used, how big it is, where it is located, how much it costs to construct and how many units it has," Levinsky said. "Why not have impact fees based on how many spaces the building isn't providing? I'm sure we can justify that there will be cost impacts to the city for insufficient parking. For example, we may have to provide the parking that the building isn't providing."