156 California Avenue, Palo Alto, CA 94306
Redco Development and Mollie Stone's owner Mike Stone proposed redeveloping the Mollie Stone's grocery site at 156 California Avenue, plus a small lot at Park Boulevard and Cambridge Avenue, in Palo Alto (city file 24PLN-00100). The SB 330 preliminary application, filed November 8, 2023 by Midar Investment Co. through Holland & Knight, invoked the builder's remedy: 382 units, 77 of them income-restricted at 80 percent of area median income, in buildings of 17, 11 and 7 stories (177, 120 and 77 feet) on land with a 50-foot height limit. The city said on November 21, 2023 that the builder's remedy did not apply because it had an adopted housing element it believed was compliant. HCD certified that element on August 20, 2024. The city began an environmental impact report in December 2024 and on August 20, 2025 rejected the developer's request for a CEQA exemption under AB 130; the developer answered with an AB 1633 notice and accused the city of slow-walking the project. The city later found the project exempt (date not confirmed). A council ad hoc committee then negotiated an alternative: 390 units, 50 of them affordable, in towers of 14, 12 and 12 stories with a two-level grocery store. On May 18, 2026 the council voted 4-2 to pursue it, with Pat Burt and Keith Reckdahl opposed and Mayor Vicki Veenker absent. The alternative still needs an Architectural Review Board courtesy review and a later council vote, and the original application remains on file with its deadlines paused. Unit and floor figures above are for the original application.
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On May 18, 2026 the council voted 4-2 to pursue a negotiated version: 390 units (50 affordable) in towers up to 14 stories, down from the 17-story builder's remedy filing, which stays on file as a fallback. Architectural review, then a council vote later in 2026.
Holland & Knight, for Midar Investment Co., files an SB 330 preliminary application arguing that Palo Alto's May 2023 housing element did not comply with state law.
Holland & Knight letterThe city says it has an adopted housing element "which it believes is compliant."
City of Palo AltoThe developer files a pre-application for an alternative design without withdrawing the original.
City of Palo AltoHCD finds the adopted housing element in substantial compliance, nine months after the city said it already complied.
HCDThe city posts a notice of preparation for an EIR, with comments open until Jan. 16, 2025.
CEQAnetThe city rejects the request on Aug. 20. The Daily Post reports that the developer's letter raised the possibility of a lawsuit.
Palo Alto Daily PostThe notice follows the city's Aug. 20 ruling that the exemption does not apply.
Holland & Knight letterA council ad hoc committee led by Ed Lauing and the developer announce an alternative: 390 units, 50 affordable, in towers of 14, 12 and 12 stories.
City of Palo AltoPat Burt and Keith Reckdahl vote no; Mayor Vicki Veenker is absent. The alternative still needs an Architectural Review Board review and a final council vote.
Palo Alto Daily PostLetters for the applicant sought a CEQA exemption under AB 130 (Aug. 6, 2025) and served an AB 1633 notice (Sept. 23, 2025). "Communication with staff has been, and continues to be, spotty."
Of the negotiated alternative: "we've agreed together on a set of steps to expeditiously process" the project (city release, May 7, 2026).
Supported the alternative and said the city's negotiators had no leverage.
"It is still a huge, massive structure which looms over the neighborhood."
"I don't think we came out with a net (gain) for the community with that tradeoff." Objected that the deal cut income-restricted units from 77 to 50.
Called the original builder's remedy proposal "the lesser of the two evils."
"The state's Builder Remedy law provides authority to a developer for massive height and density without local control." (May 7, 2026.) After the vote: "You don't always get everything you want in a negotiation."
Said the alternative goes next to an Architectural Review Board courtesy review, then back to the council.
The city stated that the builder's remedy did not apply because it had an adopted housing element it believed was compliant; HCD did not certify that element until Aug. 20, 2024. The claim did not stop the application, and the city later negotiated an alternative.
The city began an EIR and on Aug. 20, 2025 rejected the developer's AB 130 exemption request; it later found the project exempt (date not confirmed). The developer accused the city of slow-walking the project.
The 50-foot height limit framed the negotiation. The committee got the tallest tower cut from 177 to 144 feet, while income-restricted units fell from 77 to 50.