Open Streets to Save Palo Alto
A shorter version was first published as an Op-Ed in the Palo Alto Weekly:
How a community comes together in a crisis defines how it thrives in better times. I’ve had the good fortune of volunteering with Frontline Foods, which helps save restaurants and their jobs, and feeds the frontlines impacted by the crisis. Inspired by my wife and working with Palo Alto restaurants, I came to realize how essential they are to my hometown.
Nationally, over 50% of restaurants will not survive COVID-19. 25% of the currently unemployed come from the restaurant industry. Most restaurants had to lay off 95% of their staff and shift to take-out and delivery only, while the industry trend of aggregators like DoorDash take a untenable 30% cut into their margin. The industry is the second largest employer, employs more minority managers than any other, with 90% of those managers getting their first job at a restaurant. These are hard and good jobs for many, and surely better than the gig economy’s pathway to poverty.
Palo Alto’s University Ave and Cal Ave downtowns have always been large part of what makes our community a desirable place to live, work and visit. And now they face an existential threat.
As a tech entrepreneur, I’ve worked on collaboration software and remote teams for over 18 years. Trends for remote work that would have taken years, took weeks under Work From Home orders. Real estate has been a leading cause of death for startups. Now large employers are shifting to remote work, at least with a hybrid model, because it saves costs, can be more productive and for many knowledge workers, preferred. Right now you may feel this is a temporary shift, say through the end of the year. But it is likely that half of office space may go unused, not just for distancing sake. And the ripple effects, for commercial and residential real estate, for local tax revenue, and more, will not be cured with a vaccine.
Retail was already shifting to Amazon and Instacart. Small retailers were not prepared for pick-up or delivery, as their differentiation was goods best experienced in person. Now 25% of shopping malls may close. It’s uncertain what the future holds for Stanford Shopping center, a major contributor to Palo Alto tax revenue. In the current phase of opening, retailers are constrained to a number of customers who can be in the store for sake of distancing. PPP kept many retailers (and other small businesses afloat), and as it comes due this summer, we’ll see a wave of closures and spike in unemployment.
Other parts of the service sector (gyms, salons, and more) haven’t even had a chance to open in months, and if they do, when the second wave kicks in they will be the first to close for safety sake.
The future of our downtowns and small businesses is uncertain. There is no V-shaped recovery, as we’ve seen in states that low cases and rapid opening, people gradually return to drive in-person revenue. If we don’t as a community rapidly act to help them survive they will not.
I commend the City of Palo Alto for taking the right step with the Summer Streets program to enable outdoor dining and retail, through closing University Ave and Cal Ave to cars, and enabling Parklet (restaurant dining space built upon parking spaces).
The Cal Ave closure by all accounts is a success. One restaurant owner, from Terun, reported a significant increase in revenue and was able to hire back 95% of his staff, because of open street dining.
University Ave followed later, initially with a 3 day closure. A fistful of property owners has been against Open Streets, and it became clear it was being treated as a pilot and the city could reverse course. Seeing a lack of data to inform a good decisions, I manually surveyed 50 Palo Alto downtown businesses on the week over week revenue effect of opening the streets.
- Average +24% increase, even with last weekend being father’s day
- 400% is the greatest restaurant revenue increase, -25% greatest decline
- 30.4% for all food businesses, 37.7% on University, -2.5% off University
- 71.8% increase if street dining, 4.8% if sidewalk only, -8.7 if neither
- Retail increased 7.7%, 9.1% if on University
Palo Alto Weekly covered the results of the survey:
Now University Ave is an Open Street seven days a week through August 2nd.
4 Recommended Actions to Save Our Downtowns
1Keep gathering data. Revenue, Parking and Traffic. Traffic (currently 50% of pre-covid levels downtown) and Parking went from being top issues to non-issues. As I’ve suggested above, it likely it will never return to previous levels. But we need to be respectful to downtown businesses and residents, and monitor changes through phases of opening.
2Permit Parklets for 2 Years. Parklets (converted parking spaces for outdoor dining) are a good solution for helping restaurants survive. Data shows how they have increased revenue in Palo Alto for those who invested in them. There’s a problem with the program so far, and a good solution. Parklets cost ~$10k or more. They are exploring a lower cost option suggested by Tom Dubois like at the plastic barriers at Town and Country. But restaurants are at the brink of death, Paycheck Protection Program (PPP) about to run out, hard to make the investment.
Menlo Park subsidized permanent Parklets with up to $40k. While some restaurants are advocating and holding out for that, it’s not likely here. The city has funds available for crisis response like this, but major forces (esp second order effects) are causing a budget crisis. Also subsidizing them may mean picking winners. And losers, as nationally 50% of restaurants are projected to die. Investing in a Parklet which may have to be removed with 30 day notice is one way to die.
The solution is for the city to grant Parklet permits for 2 years, with rapid approval. This incentivizes restaurants to invest in a quality Parklet, with greater return, and time to amortize the capital expense.
This is a win-win that extends the Open Streets (Summer Streets needs a rebrand) program broadly beyond Univ and Cal Ave. Negligable effect on parking. And I know Parklet permit holders that would invest immediately.
3Extend Open Streets though year-end. This allows consumers to establish the new demand pattern, and for businesses to plan and invest. The more time allowed, the more likely businesses will invest in quality furniture and design the experience. And staff their needs, providing needed employment. Yes, near the end weather may be a barrier, but local entrepreneurs will find a way to make safe use thrive.
4Promote the Open Street program and refine the experience. Re-brand the Summer Streets program into something more inviting, such as Open Streets. Use funds available to promote through paid advertising like neighboring cities are doing. Enable citizens to help shape the public space and experience. For example, volunteers got their street performer friends to come play, and one restaurant reported that the ambiance created peak-hour revenue. Another volunteer encouraged a high school band to come play in Lytton Plaza. Would be great if we could fund them, but at least put out the call and make it easy for performers. Engage the city arts program like they did with volunteers to pain the Black Lives Matter mural. Create wayfinding art projects that point to restaurants, retails and parks just off the street. Enable restaurants and retailers to post signage in the public space in allotted areas and means. Work towards save use of public spaces by gyms and yoga studios.
How to get involved
- Come out, enjoy safely — and spend some money.
- The Palo Alto City Council is out of session, but reading their emails. Please reach out to them individually in support of Open Streets, or email them all at city.council@cityofpaloalto.org
- Share your feedback to city staff through this survey.
- The city is hosting a Zoom for community feedback July 20, 5–6 p.m. and August 3, 5–6 p.m. Webinar ID: 99536028186 or call in by Phone: 1 (669) 900–6833
- Local businesses can participate in the weekly Downtown or Cal Ave business round table Zooms.
