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Page 9 of 12 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org Moreover, based on conversations with industry professionals, it is estimated that five to six large employers have expressed interest in leasing existing commercial space in the City but ultimately decided not to, in part due to the GI requirements. 2.Competitiveness with Neighboring Jurisdictions: Since the City Council meeting on September 23, 2024, staff has researched whether neighboring jurisdictions have GI requirements for commercial remodels. Although some jurisdictions indicated they are analyzing this approach, staff has not identified any cities to date with similar requirements. 3.Current Commercial Vacancy Rates: Per data published by Cushman & Wakefield on July 31 for the second quarter of 2025, Redwood City’s commercial vacancy rate in and around downtown reached 35%, significantly higher than Palo Alto (9.4%), Menlo Park (24.5%), and Mountain View (28.5%). In the same period, Redwood Shores’ vacancy rate rose slightly to 17.1% from 16.8%. Vacancy rates in Redwood City are expected to increase further in the second half of 2025 as large office developments, such as Elco Yards, become fully available. Rationale for Staff Recommendation In asking the City Council to consider suspending the GI requirements for commercial remodels, staff seek to balance two of the Guiding Principles in the City’s Strategic Plan: economic development and sustainability. Staff offers the following rationale for the staff recommendation: 1.Current Policy Exceeds Requirements: The City’s GI policies, particularly those for new development, have allowed the City to exceed the minimum MRP requirements. In other words, the City has effectively captured and treated more runoff from new developments than required by the MRP, helping to compensate for runoff that was not captured through alternate commercial remodel means. 2.Current Policy Puts Redwood City at a Competitive Disadvantage for Investment: There are no other cities with a similar requirement at this time. It is possible that the Regional Water Board will eventually require all jurisdictions with MRPs to adopt policies mandating GI requirements for all commercial remodels. If that occurs, all jurisdictions would implement these policies simultaneously, placing agencies on equal footing. Until and unless that occurs, Redwood City is at a competitive disadvantage to other cities, forsaking the private investment that could strengthen the City’s economy and tax base. 3.Current Policy is Cost-Prohibitive: Small tenant improvement projects often have limited budgets. Requiring green infrastructure could place an additional financial burden on businesses, especially those already facing economic strain. Additional Measures Staff is Researching In addition to the GI requirements outlined in this report, staff—responding to feedback from businesses and other stakeholders—are reviewing other policies that may impede the leasing of commercial space in Redwood City. One area of particular concern for many small businesses is the City’s policy requiring extensive upgrades when improvements are made to more than 50% of an existing building’s square 10.A. - Page 9 of 31 218