Offices on Los Gatos' Royce Street?

Los Gatos Planning Commission will consider tonight whether to amend the downtown's central business district zone to allow for some minor office use.

Planners will consider a request tonight from the owners of a building located at 114 Royce St. in downtown Los Gatos to allow offices on the ground floor.

However, before recommending such use, they will have to decide whether changing the town's zoning code in Los Gatos' central business district is a good idea.

The commercial area features a variety of retail businesses that cater to visitors on foot and it restricts offices to protect the prime retail locations that have made the area one of the most popular shopping destinations in the South Bay.

San Jose-based Hallway Partners LLC has owned the small building since 2007, which has commercial uses on the ground level and a small apartment on the second floor.

Located on Royce Street, between Santa Cruz and University avenues, it has four tenants and two vacancies in six spaces that include the Hearing Aid Device Company, the Len's Barber Shop and O Spa Salon.

The problem is that in the time Hallway Partners has owned the building there have been no lessees in one of the vacant spots, and the building owner has received 69 inquiries from possible lessees in the past four years, with 47 of them requesting office space.

Allowing office use on the building's bottom floor will bring customers to benefit  Santa Cruz Avenue retailers, the building's owners said. They explained amending the code will add service professionals such as consultants, psychotherapists, lawyers, designers and others, which will bring clients who will patronize the nearby restaurants and shops.

The building owners said they've had to pass on office tenants only to have the space sit vacant, and that modifying the town's code will allow them fill their empty spaces and bring pedestrians to the downtown area.

If the zone is amended by the Los Gatos Town Council at a future meeting, the C-2 zone will permit personal service businesses and office activities with a conditional-use permit at the rear of the building, which won't have street frontage.

Currently, office activities in the area are allowed on Lyndon Avenue, properties abutting Wood Road, the west side of Victory Lane and the south side of Los Gatos-Saratoga Road, with some exceptions. They're also permitted on the east side of South Santa Cruz Avenue across from Wood Road and the north and south side of West Main Street west of Victory Lane.

According to Marni Moseley, an associate planner with the Town of Los Gatos, there are about 1,800 square feet in the back of the building that encompass two suites, which are accessed through the rear.

If the request is granted, the owners could split the suites into several offices, Moseley explained.

Sheila Sanchez (Editor) October 10, 2012 at 04:11 PM
The concern here is that a mix of retail and office is supposed to be discouraged in this sensitive part of down. The central business district is supposed to be focused on retail uses ... but we're seeing more and more conditional uses such as restaurants, which have caused controversy and now this small request for this type of use. I'm wondering what people are thinking ...
Brenda Hammond October 10, 2012 at 05:14 PM
The importance of balance between residential, retail, restaurant and office use in downtown is critical to the economic vitality. When exceptions are requested it brings up a debate, those on either side of the debate always agree that the benefit to the community is the number one goal. I think it is important to take each request on a case by case basis. Royce is a great spot for a few office spaces so maybe the answer is to give the property owner an allowance of 20% office with 80% retail. Over the last few weeks I have been asked for my opinion about the recent approval of the restaurant space in the old Domus building and the Tapas restaurant in the Zunardis shopping center. (I own a restaurant in town) I agreed with both approvals and here's why: the Zunardi's center is a great spot for this use because it has its own parking lot and because that end of town could use some more excitement. The other end of town has a bit more energy. If I owned a retail business I would be chomping to get into this center right now. As far as Stephen and Jimmie at Lexington House, the Farwell property was one retail space that was too large for small business owners so they did a great thing for our community by dividing the space into smaller units, this adds three additional more viable retail spaces to town so in keeping with the ratio of restaurant to retail, the approval of the restaurant use makes sense. I'm looking forward to dining at both new restaurants.
Sheila Sanchez (Editor) October 10, 2012 at 05:35 PM
Hi Brenda ... thanks for the comment and your thoughtful analysis of this issue. I attended both these Council meetings and was impressed with the level of support from the local merchants for both the new tapas bar and the upcoming Lexington House restaurant. The good argument in favor of one restaurant at the old Domus building was that the other four spaces were for retail uses! And yes, the tapas bar is perfect for the Los Gatos Shopping Center. I, too, would love to own a business there! It seems like that part of town continues to improve and become more vibrant each year! That's a great thing!
AR October 10, 2012 at 05:59 PM
agreed, 20% office allocation is certainly fair. los gatos is a town, not a shopping center. some low-impact office space would generate weekday foot traffic without detrimentally impacting the vitality of santa cruz ave during nights and weekends.
Mckenna Smith October 10, 2012 at 07:51 PM
There messing with a very fragile balance in the downtown ... too many exceptions being made ... what's next?? more offices since the zoning will be change. I say make this bldg a one time case.
Julian Groft October 10, 2012 at 08:47 PM
never liked the look of offices in a downtown area, takes away from the beauty
Larry Arzie October 10, 2012 at 09:57 PM
There are always exceptions to the rules. It depends who you know, and what kind of arguments you can back up your position; like being just a little bit pregnant. Both office space and restaurants add for more cars in our lots and streets. You figure how pregnant that will make it. If we did not have enough sewage capacity in town we would put a moratorium on new toilets. But this town likes spillage into the residential neighborhoods. So we will do what we normally do and end up drowning in our own effluence. If you don't think this is a health and welfare issue then think again.
AR October 11, 2012 at 03:31 AM
i don't see the issue. the offices will see peak use from 9-5 weekdays, when the rest of downtown is typically dead.
Irene Aida Garza-Ortiz October 11, 2012 at 03:58 AM
Don't know, but if it works there go for it!
Brenda Hammond October 11, 2012 at 06:51 AM
Julian, that's why I feel that Royce is a good spot for office use. I did a bit of research a few years ago about how and why policy makers make the decisions they do for a balance of use. There is a term used called walkability which is what you are talking about. The distance people walk in a town between exciting window displays that keep them interested. As a small side street this walkability is obviously challenged which is why the property owner is finding it hard to lease the space.
Julian Groft October 11, 2012 at 07:00 AM
O man, thanks so much for doing that research. i would of never known that Brenda....its always nice to learn something new everyday
Larry Arzie October 11, 2012 at 03:26 PM
AR the issue is there are more employees and office workers downtown than there are parking spaces. So where do retail customers park during the "peak use" hours you mention. By 11 a.m. except for mondays parking in this area is tough.
Brenda Hammond October 11, 2012 at 05:05 PM
I heard there was an effort years ago to build another parking garage under the lot at Victory Lane. This would be expensive but it seems apparent that eventually we will do it. Does office use generate more parking needs than a retail store? I wouldn't think so, so the transition from retail to office on Royce would not have an impact on parking? This discussion is heading a little off the actual topic but I know there was also discussion about using shuttle busses to bring Netflix and Community Hospital employees to and from downtown during the day for lunch and shopping. I still think it's a great idea and if expanded to loop through the all day lot behind the Zunardi property this could encourage more employees to use that lot. Or maybe they could park at the Netflix building? I think the original idea for this came from Barbara Spector which was presented to the Chamber of Commerce. Still seems like an interesting possibility to me.
Larry Arzie October 11, 2012 at 09:02 PM
Brenda, balance is not only factor in making land use law, noise, traffic, parking, and compatibility are just as important. Parking lots are paid for primarily by property owners. I am still paying assessments on lots that date back 40 years. .w The last attempt to build a parking garage there failed because it was unfair primarily to property owners who had retail store fronts. It benefited primarily property owners with the largest office buildings in town. Your surmise of office generating less usage of parking spaces is incorrect. They generate more parking spaces. More than twice as many. Office usage is the highest intensification you can get. Employees come to work and park and stay for 8 hours. Thejd clients come to see them and mostly do not shop at the same time. The building in question was historically home our local newspaper. When sold, non-conforming office space was added not to code. The building was purchased again (possibly a foreclosure) by a San Jose group who are trying (i speculate) to bring it up to code by applying for a zone change to make it legal and sell it for a tidy profit. Anyone who has purchased this property was aware of the zoning. It would make a great retail specialty location such as a consignment center, imports, as opposed to a destination location office space. BTW I have sat on many parking committees for the past 40 years and shuttles have come up time and again. The problem is money. Who is going to pay for it.
Brenda Hammond October 11, 2012 at 09:35 PM
Larry, Could you elaborate a bit more on how that lot would have benefited office buildings and not retail stores? I park in the existing lot frequently for shopping and dining. There is one large office building across the street that has its own parking, correct? And Lyndon Plaza has some offices but also its own lot which is properly managed with valet service. As far as the shuttle service, the conversation I was a part of discussed several ideas for merchant participation as a partial means of support by way of a validated ticket for making a purchase, by selling ad space on the shuttle and a nominal fee to the rider. We also received a bid from a shuttle company that was very reasonable for two busses to run from 11am to 2pm. If expanded hours were negotiated for use to shuttle employees at a small fee I think my employees would end up paying less than the cost of a parking ticket every month. Do you build reimbursement for those fees into your lease agreements? I will surmise that most parking assessment fees paid for by property owners are covered by the merchants in most cases.
Larry Arzie October 11, 2012 at 11:40 PM
Your right, landowners generally pass on fees. Merchants pay an average of 4.00 a foot triple net included in the price. Up to 5.00 at the south end of Santa Cruz Ave to 3.75 at the north end. Most have sales at approx 1 to 1.5 million. with a 40% profit on the goods less rent, salaries, insurance utilities etc. They can not afford the pass through for parking or shuttle. Do the math and you will see why landowners have pushed for higher density ordinances for the past 30 years. Office space actually rents for 20 to 30% higher, and is in such short demand it is bootlegged into anywhere there used to be a storeroom. In one large building 400 sq foot spaces have been chopped up into 4 spaces charging even more. The monetary benefits for the landlord would be higher for this space if legally allowed to convert from retail to professional and the building value wood soar. The Lyndon plaza was had smoke and mirrors for parking. It was allowed to be built with parking provided offsite, which is now an office building. So in order not to have to shut down they came up with valet parking which does not take care of it's needs. It has legal office space upstairs and in the basement. It is a classic example of poor planning. We have no money in this town for parking lots. Even the one just opened behind Mt.Charlies is not secure as it was purchased with re-development money for ultimate use as low cost housing. LOL. Less density is our only answer at the moment.
Brenda Hammond October 12, 2012 at 08:28 PM
So the people really paying for the parking structures are the people that park, shop and dine in downtown since the merchants pass on their overhead costs to them. I talk to a lot of people everyday in my business. I think it is an accurate estimate that about 90% of the residents I talk to say that they don't think we have a parking problem in town. Some out of town visitors do call from cell phones to ask us if we can recommend where they can park. We guide them to the lots between University and NSC and they arrive within a few minutes so their difficulty appears to be lack of knowledge as opposed to lack of spaces. People must be finding spots all over town since I see the sidewalks full of people. I think every business owner in town would agree that we could use more customers. Not because we are greedy but because it is difficult to be successful even with the bustling town we already have. There are solutions to this problem but if we don't have a parking problem then we don't survive. Even if we built another $10m parking garage we would fill it and then wish for more. Which brings me back to the shuttle. A way to satisfy you and me.
Brenda Hammond October 12, 2012 at 08:31 PM
My thoughts on merchant participation for a shuttle were that a portion of their marketing budget be diverted to advertise on the shuttle in order to encourage the riders to make a purchase in their business. The proceeds from the ads would be used to pay for part of the shuttle. There are hundreds of employees at Netflix and the hospital and many are already coming downtown in their cars. I can appreciate that when you do the math it sounds impossible however as a business owner when I do the math it seems possible. Maybe that's because I know how much the shuttle company was going to charge and I know that there are some businesses in town that would love the chance to offer hundreds of people a ride to their front door without impacting parking.
Brenda Hammond October 12, 2012 at 08:40 PM
I don't know why you call the valet/parking at Lyndon Plaza a smoke and mirror trick. I see it working and I see a successful center with great and many long term tenants. Something must be working because I have been frequenting that center for over 20 years along with everyone else. You don't like a lot of the decisions made over the years and I don't necessarily agree with all of them either. The bigger picture and the reality in my opinion is that we have a successful and vibrant downtown. It requires decisions that are innovative, out of the box and with a vision for what the future brings. Growth happens. Some of the busiest and most beautiful cities in the world have historic ruins in the middle of contemporary new architecture and have been transitioning for 1000's of years. I think we are capable as a town to do the same thing and we're still so young. Maybe it just comes down to perception and attitude. I have confidence in our future and I appreciate everything that our policy makers have done and will continue to do. All of them really care about this community just like you and I. If we only focus on our own perception of mistakes we could end up spinning in circles. Larry, we could go around and around right here for weeks and we would all get some history lessons!! Maybe you would like to stop by for a cup of coffee some time for a one on one. I've survived here for almost seven years and you've not been in. Consider this a formal invitation. ;)
Larry Arzie October 12, 2012 at 10:00 PM
To make the shuttle work, you need everyone to get on board. The Business Improvement District was shelved in the 90s because of the unhappy merchants having to participate. If you can present a viable reason for the District to be started up again and can gain support, then the shuttle program may have a chance. Good Luck
Larry Arzie October 12, 2012 at 10:28 PM
Alternative (creative) and ghost parking have been he bane of our existence.Even with the Valet parking at the Lyndon Plaza they use more than what would be needed because the town allowed them to turn retail space into higher use classifications.. With three restaurant, and the rest mostly office spaces they far exceed their parking needs. Vibrancy by the way is not more restaurants, more office uses, more traffic and circulation, and less parking. Vibrancy is not turning our downtown into an entertainment district. It is not intentionally pushing rents up through policy actions of increased intensification. Yes perception is often a defining factor and to some it is totally different than for others. The central business district can only handle so much. Coffee sounds good. I'm listed in the phone book.


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