​​Despite recognizing the cultural significance of the old cannery on Portage Avenue, Palo Alto is poised to reject a resident's request to designate it as a historical property, a move that would have complicated a developer's plan to demolish a portion of the building as part of a townhome project.

The city may, however, evaluate a historic designation for the remaining portion of the building, which Sobrato is looking to preserve and rehabilitate.

The City Council is scheduled to consider on Oct. 16 an application from Terry Holzemer, a local teacher, to place the cannery at 340 Portage Ave. on the city's historical inventory as either a Category I or a Category II resource. Doing so would create a new obstacle for The Sobrato Organization, which is preparing to demolish the portion of the cannery along Park Boulevard to construct a 74-townhome development as part of an agreement that the council approved last month.

The issue of historic significance has been extensively debated, with opponents of the development agreement criticizing the plan to partially demolish the old cannery, which was developed in 1913 by Chinese immigrant Thomas Foon Chew and which became one of the nation's largest canneries. The city's own historical analysis concluded that its historical impact is "significant" because of its role as an example of Santa Clara Valley agriculture.

Even though the council voted on Sept. 12 to approve the Sobrato deal, Holzemer made a case two days later to the Historical Resources Board for formally recognizing the cannery's historic significance.

"There is value (in designation), even in buildings that look like old factory buildings, particularly if they do provide a sense of place, especially for the Chinese American community," Holzemer told the board. "And I really think that's really important in our society today, with all the angst that people have against immigrants and migrants today."

The development agreement, which took more than a year to negotiate and review, recognizes the historical role of the cannery. As part of the deal, Sobrato is allowed to maintain commercial uses within the remaining cannery building, which formerly housed Fry's Electronics. It will also be required to maintain the building's main architectural feature, its monitor roofs, and to create space for the public in a small retail area in front of the building to survey the 1913 cannery.

The developer is also donating 3.25 acres to the city for a future park and an affordable-housing project.

The council's approval of the agreement made it unlikely, however, that members would approve the placement of the building on the historic inventory, which would have required extensive analysis and mitigations before the building could be demolished or modified.

Given that the deal with Sobrato has already been approved, both, the Historic Resources Board and planning staff, agreed last month that the bid to place the cannery on the state or local registry would serve little purpose at this point. The analysis identified the loss of the historical resources as a "significant and unavoidable" impact of the development agreement and the council acknowledged this loss when it adopted a statement of overriding consideration, effectively finding that the benefits of the deal outweigh this impact.

City planner Clare Raybould suggested that designating the entire cannery as historical at this point would conflict with the council's direction.

"It simply creates confusion because the development agreement has already been approved and a portion of the building will be demolished and it will lose its eligibility for the California register in doing that," Raybould said.

Mayor Lydia Kou, who attended the hearing, also acknowledged the historical importance of the cannery but argued that the council's options for protecting it are limited.

"There is absolute evidence that there are historical factors, but the unfortunate thing is that this is a private property and also that it was never registered," Kou said at the Sept. 14 meeting. "So, it's a little bit late to do that and based on the facts that the applicant and development agreement have shown, they will be preserving the monitor roofs, they're keeping most parts of the buildings."

The board voted 3-1, with Michael Makinen dissenting, to recommend that Holzemer's proposal to designate the entire cannery as a historic resource be rejected. At the same time, board members agreed that the remaining portion of the building should be considered for historic designation on the local inventory.

The board also voted 3-1, with Chair Alisa Eagleston-Cieslewicz dissenting, to recommend designating just the remaining central portion of the building with the monitor roofs as a historic resource on the local registry. Board member Carolyn Willis was among those who strongly supported moving ahead with designation.

"I understand the entire building would no longer be eligible but because the building was built in sections; I firmly believe the monitor roof section would stand alone as a historical resource," Willis said.

City staff is pushing back against the recommendation. A report released on Oct. 5 notes that the central portion of the cannery building is not, currently, a standalone building.

"Nominations and designations to a register must be based on the condition in which a resource exists, not based on a future condition in which it may exist," the report states. "Further, the redevelopment of the site does not include approval of demolition such that it would become a standalone building."