Sign up for our newsletter.

Atlanta TDR Margaret Mitchell House 9490 WestLampeter San-Diego-Receiving-Zone South-Street-Seaport-154 San-Francisco-Actual-Certified-Sending-Site-635-Pine jefferson West_Hempfield HistoricDowntown

Palo Alto, California

Palo Alto, population 58,598 (2000), lies on the western shores of San Francisco Bay, 30 miles southeast of downtown San Francisco and 15 miles northwest of downtown San Jose. It is the home of Stanford University and the headquarters of several high-tech companies including Hewlitt-Packard.

Palo Alto uses various incentives to protect its historic resources, including a TDR program that encourages property owners to perform seismic and historic rehabilitation in the City’s Downtown Commercial District (DCD). The program also allows qualified City-owned historic properties located in any zoning district to transfer TDRs to eligible receiving sites in the Downtown Commercial District.

The DCD portion of Palo Alto’s zoning code creates five categories of floor area bonuses. One of these floor area bonuses, not discussed below, cannot be transferred to a qualified receiving site. Of the remaining four categories, the first three bonuses discussed below may be transferred to a qualified receiving site or used on site at the owner’s option. Bonuses gained in the fourth category, Historic Bonus for Over-Sized Buildings, must be transferred off-site to a qualified receiving site.

  • Seismic Rehabilitation Bonus – Buildings in Seismic Categories I, II or III that undergo seismic rehabilitation may receive a bonus of up to 2,500 square feet or 25 percent of existing floor area (whichever is greater). (This option cannot be used on buildings that exceed specified FAR limits in specified districts.)
  • Historic Rehabilitation Bonus – Buildings in Historic Categories 1 or 2 that undergo historic rehabilitation may receive a bonus of up to 2,500 square feet or 25 percent of existing floor area (whichever is greater). (Again, this option cannot be used on buildings that exceed specified FAR limits in specified districts.)
  • Combined Historic and Seismic Rehabilitation Bonus – Buildings in Historic Category 1 or 2 undergoing historic rehabilitation which are also in Seismic Categories I, II or III and undergoing seismic rehabilitation may receive a bonus of up to 5,000 square feet or 50 percent of existing floor area (whichever is greater) . (Once again, this option cannot be used on buildings that exceed specified FAR limits in specified districts.)
  • Historic Bonus for Oversized Buildings – Buildings in Historic Category 1 or 2 undergoing historic rehabilitation that exceed FAR 3.0 (or FAR 2.0 in specified sub-districts) can obtain a floor area bonus of 50 percent above the maximum that would otherwise apply within the applicable sub-district. As mentioned above, this bonus can only be used by transferring it to a qualified receiving site.

When a City-owned property is proposed, the City Council must designate the property as an eligible sending site. The property must be in Historic Category 1 or 2 and/or in Seismic Categories I, II or III. Concurrent with designation of the sending site, the City Manage must create a special fund for the proceeds of the TDR sales. This money must be committed to the rehabilitation of the sending site property or any other city-owned property in Historic Category 1 or 2 and/or in Seismic Categories I, II or III.

To be certified as a receiving site, a property must meet all of the following criteria.

  • Within the Downtown Commercial District
  • Not a historic site or a site with a historic structure
  • Various requirements for distance from residential zones

When receiving sites are outside the downtown parking assessment district, the additional development allowed through TDR is limited to floor area ratio of 0.5 or 10,000 square feet of additional floor area, whichever is greater. When receiving sites are within the downtown parking assessment district, the additional development allowed through TDR is limited to floor area ratio of 1.0 or 10,000 square feet of additional floor area, whichever is greater. In no event can TDR transfers cause the site to exceed FAR 3.0 in the CD-C sub-district or FAR 2.0 in the CD-S and CD-N sub-districts. As an added incentive, the first 5,000 square feet of floor area transferred to a receiving site are not subject to parking requirements.

Transfers can be made directly to receiving sites or to intermediaries as long as the conveyance is evidenced by a recorded document that identifies the sending site.

In 2007, a 2,500 square foot bonus generated by the rehabilitation of the Children’s Library was sold for $237,500 or $95 per square foot. In 2009, two additional TDR sales were awaiting improvement in real estate market conditions. One of these sales involved TDRs from the former Sea Scout Building. The other sale dealt with TDRs from the rehabilitation of the College Terrace Library and Palo Alto Child Care Center, built in 1936. In 2008, the City changed the designation of the College Terrace Library property to a Category 2 historical structure, making it eligible to become a sending site under the TDR program.  In 2009, the City Council considered a resolution designating this city-owned property as an eligible TDR sending site. Assuming the price paid for the Children’s Library TDRs, the City could earn another $230,000 to $250,000 by selling the 2,500 square feet of bonus floor area generated by the rehabilitation of College Terrace Library.