Planning commission urges council to preserve in‑lieu fee premium, create dedicated art fund

The Cupertino Planning Commission recommended on Sept. 23 that the City Council retain the existing premium on art in‑lieu payments, create a separate city art fund for any in‑lieu payments, and remain the final decision maker on allocations.

The recommendation arrived after a staff presentation reviewing an Arts and Culture Commission proposal to amend Chapter 19 of the municipal code and adopt an art‑in‑lieu fee policy. John Martier, senior planner with Cupertino’s Community Development Department and liaison to the Arts and Culture Commission, told commissioners the item was before planning because it includes changes to the zoning code. "The purpose was because it involves changes to chapter 19, which is the zoning ordinance," Martier said during the meeting.

The Arts and Culture Commission recommended a single 1% valuation for either providing on‑site public art or making an in‑lieu payment, and proposed creating and maintaining a separate art fund to collect any in‑lieu payments. Commissioners and staff reviewed other Bay Area jurisdictions and how they treat on‑site art, in‑lieu payments, maintenance set‑asides and decision authority.

Kiran Dora, chair of the Arts and Culture Commission, described the commission’s intent as widening options for how art dollars can be used while keeping public oversight. "We are saying the art in lieu fee would be also 1%... we are opening up the opportunity to have an art fund with a balance more than 0, for our community," Dora said, adding that potential uses could include programming, education, or multiple smaller pieces instead of a single large sculpture.

Commissioners debated whether a lower in‑lieu rate would encourage developers to pay cash rather than provide visible, on‑site art. Several commissioners urged keeping a financial premium on in‑lieu payments to discourage waivers of on‑site public art and preserve placemaking benefits. Vice Chair Casolcheron and Commissioner Scharf both argued for retaining stronger incentives for on‑site installations; Commissioner Linscott supported parity and argued a fund could be used to consolidate smaller amounts into larger, more visible works.

After discussion, Chair Rao moved that the commission recommend the City Council (1) retain the premium on in‑lieu payments (i.e., not reduce the in‑lieu percentage to 1%), (2) create a separate art fund for collected in‑lieu fees, and (3) keep final allocation authority with the City Council. A second was recorded. Commissioners then amended the motion to specify the proposed separate art fund should be used solely for the creation of public art. The planning commission approved the motion; the city clerk recorded that the motion carried with Fung and Linscog voting no.

Next steps: staff will include the commission’s recommendations in the package tentatively scheduled for the City Council’s first reading on Oct. 21. City Council will make any final decisions on code amendments, the in‑lieu fee rate and fund policies.

Context and background: Cupertino’s current municipal code (Chapter 19) contains standards for required artwork in private and public developments. Martier told the commission that earlier municipal language explicitly discouraged in‑lieu payments and set an in‑lieu valuation higher than on‑site art (1.25% vs. 1% in some language), a factor staff and the Arts and Culture Commission reviewed against other cities' practices. Staff reported the city currently has very little, if any, balance in restricted in‑lieu funds held in the general fund and that the proposed change would create a dedicated fund and clearer guidelines for how to spend it.

The record: commissioners and the Arts and Culture Commission discussed outreach (the Arts and Culture Commission held multiple study sessions on the topic), the role of development agreements in locking fees, and whether any change should be retroactive (staff said changes would be prospective and apply to future applications). The commission suggested additional community outreach could be useful if City Council requests it before action.