Builder looks to replace Palo Alto motel with housing

Taking advantage of a new housing law that went into effect last week, a developer is preparing to demolish the Coronet Motel on El Camino Real in Palo Alto and replace it with a six-story residential project.

The San Francisco-based builder Bayhill Ventures just became the first developer in Palo Alto to take advantage of Senate Bill 79, a new law that relaxes height and density standards for projects in transit-friendly areas. The law went into effect on July 1.

The Palo Alto City Council considered last month adopting an urgency ordinance that would delay the implementation of SB 79 while the city explores an alternate plan for encouraging housing. But councilmembers ultimately declined to do so, creating a two-week window in which developers can propose SB 79 projects before the city’s other efforts to soften the impacts of the law kick in.

The local ordinances, which take effect July 16, exempt historic sites from SB 79 and limit height and density at 50% of what would normally be allowed.

The proposal from Bayhill Ventures for 2455 El Camino Real is taking advantage of that window. The 65-foot-tall building would feature 76 apartments, 12 of which would be designated as affordable housing. Because the project is located within half mile of the Caltrain station on California Avenue, it would be able to exceed typical zoning regulations.

Nick Roosevelt, an attorney with J. Abrams Law, which is representing the applicant, cited in his letter to the city the council’s June 15 decision not to adopt an urgency ordinance, which means “SB 79 is currently fully effective in Palo Alto, except at certain sites designated as local historic resources as of January 1, 2026.”

The proposal also invokes Senate Bill 330, which streamlines the approval process and freezes the development standards that are in place at the time of the application submittal, preventing cities from changing the law to hinder new projects. Bayhill plans to submit a formal application within 180 days, Roosevelt wrote.

“The plan set submitted with the preliminary application lists applicable developments standards that would clearly physically preclude the permitted density under SB 79 and the state density bonus law, based on the level of design detail required for a SB 330 preliminary application,” Roosevelt wrote. “A comprehensive list of requested waivers and concessions will be included with complete development application materials for the project.”

Located between Sherman Avenue and Jacaranda Lane, just south of California Avenue, the site is owned by Brender Commercial Land Holdings, LLC, which has authorized the filing of the application, according to submitted documents. The 0.38-acre site currently includes the 22-room motel and 15 surface parking spots.

The proposed development would include parking in the basement and on the ground level, with five stories of housing above. The building would include 152 parking spaces, plans show. The proposed unit mix includes 48 one-bedrooms, 23 two-bedrooms and five studios.

The project is part of a wave of residential proposals targeting El Camino Real, an area where the city has been implementing zone changes over the past two years to encourage housing. The vast majority of these proposals are south of Page Mill Road.

The nonprofit Charities Housing is building an affordable-housing complex with 129 apartments at the former Mike’s Bikes site at 3003 El Camino Real, while Acclaim Company is preparing to build a 368-apartment complex at 3150 El Camino Real, former site of The Fish Market.

This story originally appeared in Palo Alto Weekly. Gennady Sheyner is the editor of Palo Alto Weekly and Palo Alto Online. As a former staff writer, he has won awards for his coverage of elections, land use, business, technology and breaking news.