Palo Alto ARB reviews preliminary design for new commercial building at 530–540 University Ave., flags zoning and rooftop issues

The Palo Alto Architectural Review Board on April 17 reviewed a preliminary proposal to demolish the buildings at 530 and 540 University Avenue and construct a new three‑story commercial building with ground‑floor retail, office space above and a private rooftop terrace.

City planner Christina Dupkaviches told the board the project as shown would be about 30,375 square feet and would use roughly 7,799 square feet of transferred development rights (TDRs). Dupkaviches said the proposal exceeds the zoning district height limit and would reach about 57 feet where the downtown code limits buildings to 50 feet: “The proposed improvements exceed the height of both the existing buildings and the height, restrictions in the zoning district, which is 50 feet, ... they’re proposing 57 feet.”

Why it matters: the design raises multiple code and permitting issues that must be resolved before a formal application — including whether the applicant will rely on costly TDRs, pursue a downtown zoning text amendment, or change the project to meet current envelope and daylight‑plane rules. Those choices affect whether the board’s future design comments can be implemented as shown.

What the board reviewed and what staff said

Dupkaviches said the applicant presented two lot‑merger options: (1) merge 530 and 540 University only, or (2) merge 530, 540 and the adjacent 500 University (the “companion” building at the corner). Both options would demolish the two commercial buildings and replace them with a single new building. The site sits across from a 14‑story office center, beside the seven‑story Cowper‑Webster Public Garage and is zoned CDC‑GFP (Commercial Downtown Community; ground floor pedestrian combining district).

Staff noted the site is within a half‑mile of a major transit stop, so the proposal has no minimum parking requirement under Assembly Bill 2097, but a transportation demand management plan will be required with any formal application. Dupkaviches also told the board a conditional use permit (CUP) would be required to allow rooftop open‑space elements that encroach into the code’s 45‑degree daylight plane.

Key technical and policy points discussed

- Floor‑area and the “shrink‑wrap” rule: staff explained the project mixes legal nonconforming floor area with newly allowable floor area and that the downtown code’s Section 18.18.120 (the so‑called shrink‑wrap rule) constrains how existing nonconforming floor area can be reallocated. The applicant’s team said it intends to use a combination of allowed 1:1 FAR, moved floor area, and purchased TDRs to reach the shown envelope; consultant Ken Hayes said TDRs can be expensive (“TDRs go for about $400 a square foot”).

- Zoning text amendment: staff and the applicant confirmed there is a separate, recently filed text‑amendment application to modify 18.18.120 to give more flexibility for moving floor area within downtown parcels. Dupkaviches said the text amendment is not project‑specific — if adopted it would apply across the downtown code — and would require council prescreening and subsequent ordinance steps.

- Rooftop deck and height: the project shows rooftop amenities and trellis/canopy elements that extend above the district’s 50‑foot height limit. Staff said those rooftop elements currently conflict with the 45‑degree daylight‑plane requirement and would need either a CUP or a design‑enhancement exception; staff cautioned a design‑enhancement exception would be difficult to justify because the code’s intent was to avoid additional visible massing.

- Fire separation, openings and lot merger: the board and staff discussed the rear elevation facing the garage and the firewall/openings rules. Staff noted that if openings (glazed windows) are proposed near a property line they must meet a three‑foot setback to avoid fire‑rated assemblies; several board members asked for plan dimensions and said applicants should show the firewall/opening calculation in future submittals.

- Parking and housing questions from the public: a public commenter asked whether an underground garage would be built; applicant James Stefan said, “We are not proposing a underground parking garage since the site is within a half mile to Caltrain. And we did look at residential for the site, but it wasn't economically viable.” A second public speaker asked whether the project’s effect on Palo Alto’s jobs‑housing balance had been considered; the applicant said the site had been studied but office was currently proposed.

Board feedback and next steps

Board members focused on scale, massing, pedestrian activation of the breezeway to the garage, and the prominence and scale of the rooftop trellis/canopies. Several members urged simpler, more refined rooftop elements and asked for alternatives that would meet the daylight‑plane rule. Members asked staff and the applicant to return with: (a) complete FAR/TDR calculations and referenced plan sheets, (b) firewall/opening dimensions and sections, (c) clear lot‑merger documentation if 500 University is proposed to be combined, and (d) a clearer analysis of design‑enhancement or CUP pathways for rooftop features.

Discussion versus decision

This item was a study session only. Staff recommended, and the board proceeded, to provide informal comments; no final board action or vote was taken on the project.

Ending

Staff and the applicant were instructed to return with revised materials and the board’s written informal comments when a formal submittal is prepared.