City Council - September 14, 2026

Council approves architectural review for 265-space downtown garage

The City Council voted 7-0 to approve Major Architectural Review for a six-story, 265-space parking garage at 375 Hamilton Ave., advancing plans to replace the 86-space Lot D surface lot. Staff expects to return with construction-management and additional design contracts. Construction is anticipated to start in late 2027 and take 18 to 24 months.

The plans include more than 4,000 square feet of temporary public open space on an area reserved for a potential 15-unit affordable-housing development. Staff said the garage would have 52 long-term and about 10 short-term bicycle spaces, 120 electric-vehicle-capable stalls and 60 EV spaces installed initially. Another 25 parking spaces would be reserved for the potential housing.

Council members pressed staff on the cost, street configuration and provisions for future housing. The fiscal year 2027 budget includes $34 million for the project, including about $15 million in parking funds and $17 million expected from certificates of participation. Staff said a full updated project cost was not yet available; the discussion referenced a May estimate of $41 million.

Transportation staff said conceptual plans could narrow the street from 50 feet to 43.5 feet while retaining two travel lanes, the bus stop and Class IV bicycle facilities, although detailed design remains to be completed. Public commenters objected to the garage's scale and appearance and raised environmental-review and pedestrian-safety concerns.

City reports $8 million public safety building settlement

Council reported that a settlement finalized Sept. 10 requires the city to pay $8 million to resolve contractor and subcontractor claims arising from construction of the recently opened public safety building. Council had authorized the payment during an Aug. 17 closed session.

In a separate consent-calendar action involving the building, Council unanimously approved an increase of up to $7,374,367 in the construction contingency for Swinerton Builders and an amendment to the fiscal year 2027 Capital Improvement Fund appropriation.

Council authorizes water bond refinancing to free reserves

Council voted 7-0 to authorize the sale of up to $20 million in tax-exempt water revenue refunding bonds to refinance the city's 2009A Water Revenue Bonds. The refunding bonds would retain a final maturity of 2035 and be repaid from net revenues of the water utility.

Staff estimated net-present-value savings of about $255,000, or 1.46% of the refunded principal, below the city's usual 3% refinancing guideline. Staff said the primary reasons for proceeding were to eliminate a cross-utility reserve requirement and remove the risk of reductions in federal Build America Bond subsidies.

The reserve requirement currently ties up roughly $13 million and could grow to about $75 million as Palo Alto plans nearly $300 million in future borrowing for electric-grid modernization, according to staff. The city will proceed with a competitive bond sale under the terms Council authorized.

Speakers urge city to preserve Palo Alto Link

Multiple speakers urged the city to retain Palo Alto Link, delay its anticipated October cessation or operate it alongside ride-hailing vouchers during a transition period. Council took no action on the service during the meeting.

Speakers said the service supports medical, shopping, work, volunteer and social trips, particularly for seniors, people with disabilities and lower-income riders. Some also criticized its reliability, wait times and driver training while arguing for improvements rather than elimination. City staff will follow up with speakers, and a transition to the Palo Alto Transportation Management Association is expected in October.

Council finalizes oversized-vehicle parking permit districts

Council unanimously gave final approval to an ordinance adding oversized-vehicle parking permit districts to the municipal code and amending the city's parking rules. A public commenter opposed additional RV parking restrictions and argued that Palo Alto should expand safe-parking capacity and regional coordination instead.

City awards $2.47 million sewer-lateral contract

Council unanimously approved a citywide sewer-lateral replacement contract with A3 Pipeline for up to $2,466,255. The authorization also allows related change orders totaling no more than $246,600.

Primary sources

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