The Seven-Story Shockwave: 5 Things You Didn't Know About Town & Country Palo Alto's $100M Transformation

Town & Country Village in Palo Alto is not just a beloved, historic shopping center anymore; it is the epicenter of a massive, multi-million dollar mixed-use development battle that is fundamentally changing the face of Silicon Valley retail. As of late 2025, the iconic site—known for its charming outdoor atmosphere and mix of independent and national retailers—is locked in a high-stakes political and planning conflict over a controversial proposal to add a significant amount of housing to the property. This dramatic shift from a pure retail hub to a mixed-use residential and commercial space is the newest chapter in the center’s decades-long history, reflecting the intense pressure of California’s housing crisis and the evolving needs of the Peninsula community.

The current conversation surrounding the Village is dominated by this ambitious residential plan, which has created a shockwave through the local community and the Palo Alto Planning and Transportation Commission. The outcome of this proposal will not only redefine the center's physical landscape but will also set a precedent for how historic commercial properties adapt to a new era of urban density in the Bay Area. Despite the political turmoil, the Village remains a vibrant destination, constantly refreshing its tenant mix with exciting new shops and restaurants, ensuring its continued relevance as a premier Silicon Valley shopping spot.

The Shockwave: Inside the Controversial Seven-Story Housing Proposal (2025 Update)

The biggest and most recent news surrounding Town & Country Village is the dramatic push by its owners, Ellis Partners, to construct two seven-story apartment buildings on the property. This proposal represents a monumental shift for the retail center, which has long been a low-rise landmark at the critical intersection of El Camino Real and Embarcadero Road.

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The 158-Unit Plan and the Planning Roadblock

The ambitious plan calls for the addition of 158 new homes, transforming the Village into a true mixed-use development. The rationale behind the proposal is a direct response to the State of California's push for increased housing density, particularly in transit-rich areas like Palo Alto. However, this vision hit a significant roadblock in March 2025 when it was reviewed by the Palo Alto Planning and Transportation Commission.

The proposal, sometimes referred to in planning documents as the "70 Encina Avenue" project, has been the subject of intense debate. While proponents argue it addresses the desperate need for housing and revitalizes an aging retail asset, critics worry about the impact on traffic, the loss of the center's historic, low-profile charm, and the potential displacement of existing businesses. The current status, following the commission's review, indicates the project is undergoing an updated design process and further community negotiation to address the concerns raised.

The Irony of the Adjacent Townhome Battle

Adding a layer of complexity and high drama to the situation is the fact that the Village's owners fiercely opposed a smaller, recently approved development of 10 condominium townhomes on an adjacent lot. The owners' opposition to the neighboring project, followed almost immediately by their own much larger, denser proposal, has been a key point of controversy. This move suggests a strategic shift: rather than simply fighting development, Ellis Partners is asserting their own vision for the future of the land surrounding their property, leveraging state housing laws to their advantage.

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The Modern Mix: New Tenants and Essential Services Driving Topical Authority

Despite the housing drama, Town & Country Village continues to thrive as a premier destination due to its carefully curated mix of tenants, which blends high-end specialty retail with essential daily services. This blend is what gives the center its unique topical authority in the competitive Silicon Valley market.

Fine Dining and Culinary Anchors

The dining scene at Town & Country is a major draw, featuring a blend of local favorites and upscale concepts. The most exciting culinary news for 2025 is the impending arrival of Horsefeather, an American-style restaurant and cocktail bar opening its second location in the Village. This new addition promises to diversify local flavors and enhance the center's nightlife.

Other popular culinary entities that anchor the Village include:

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• Manresa Bread: A celebrated bakery known for its artisan loaves and pastries.
• Teleferic Barcelona: An upscale Spanish tapas and paella restaurant offering a vibrant dining experience.
• Antoine's Cookie Shop: A local favorite providing sweet treats and desserts.

Retail and Wellness Powerhouses

The retail mix is designed to cater to the affluent Palo Alto demographic, offering everything from high-fashion apparel to unique home goods. The center's ability to attract and retain both national brands and small, independent businesses is a testament to its enduring appeal.

Key retail and service entities include:

• Trader Joe's: A major grocery anchor that drives significant foot traffic to the entire center.
• CVS Pharmacy: Providing essential daily services and convenience.
• Athleta: The popular women's athletic apparel brand, catering to the active Peninsula lifestyle.
• Books Inc.: A long-standing independent bookstore, a critical component of the center's local charm.
• Sur La Table: Offering high-end kitchenware and cooking classes.
• Bluemercury: A luxury beauty and cosmetics retailer.
• LaBelle Day Spa & Salon: A full-service spa and salon, reinforcing the center's focus on wellness and self-care.

This dynamic roster of tenants, including four new stores welcomed in late 2023, ensures that Town & Country Village remains a relevant and essential shopping destination for the Palo Alto community and Stanford University area, providing a compelling mix of retail, services, and fine restaurants.

A Heritage of Specialty Retail: The Village’s Enduring Appeal

The current housing debate is set against a rich historical backdrop. Town & Country Village was originally completed in the 1950s, conceived as one of the region's first "town & country" specialty retail shopping center concepts. Its open-air design and village-like layout were groundbreaking at the time, offering a relaxed and integrated shopping experience that contrasted sharply with enclosed malls.

The Ellis Partners Revitalization

The center's enduring quality is partly due to strategic management. Ellis Partners, the current owner, has overseen significant renovations to maintain its appeal. A major renovation took place in 2007, ensuring the facilities and tenant spaces remained modern and attractive while preserving the center's classic architectural style. This commitment to revitalization has helped the Village maintain a relatively low retail vacancy rate, even as other retail centers have struggled.

Location as a Competitive Advantage

The Village's prime location at the gateway to Palo Alto, near Stanford University and the Palo Alto Medical Foundation, is a significant competitive advantage. Its central position makes it easily accessible to both local residents and the constant flow of students, academics, and medical professionals. This strategic location is precisely what makes the property so valuable for a mixed-use development, as it is perfectly situated for high-density housing near major employment and educational centers.

The ongoing battle over the seven-story apartment buildings is more than just a local planning dispute; it is a microcosm of the larger struggle in Silicon Valley to balance historic preservation, community character, and the urgent demand for housing. The ultimate decision will determine whether Town & Country Village remains primarily a specialty retail landmark or evolves into a fully integrated residential and commercial hub, a transformation that will define its legacy for the next generation of Palo Alto residents.