Stanford Shopping Center may experience another growth spurt soon, if Palo Alto officials pushing for increased sales-tax revenue -- to the tune of $2.25 million a year -- get their way.

Early talks between the city and the shopping center's management company, Simon Property Group, have looked at the possibility of expanding the mall by nearly 20 percent, which would follow suit with other growing area malls such as Valley Fair in San Jose.

Additions to the shopping center could also include a hotel.

"We need to talk and work with the center to understand what they need," said Councilman Bern Beecham. "I don't expect something to happen overnight."

The talks between the city and Simon Property Group about growing the city's largest sales-tax revenue generator are "very, very preliminary," said Susan Arpan, the city's manager of economic development and redevelopment.

"Nothing has moved forward yet," she said.

However preliminary, such talks are in line with the "Revenue Creation and Expense Reduction" study session held July 31 by the City Council. Looking out past July 2008, two of the major ideas discussed at that meeting included increasing Stanford Shopping Center's sales-tax revenues and attracting a new hotel to Palo Alto.

"I would love to see their sales tax increase by a third," Beecham said. However, he added, "I don't see that as growing in square footage by a third."

City staff, in its July 31 presentation, had targeted a $2 million increase in shopping center tax revenue, along with $250,000 from the hotel. Stanford Shopping Center, currently at 1.4 million square feet, could expand by another 250,000.

"It means a great deal for our economic health," said Planning Director Steve Emslie. "We depend a lot on sales-tax revenue."

Approximately one-fifth of the city's $100 million revenue stream is derived from sales taxes, according to 2004-05 figures.

The location of a new, medium-sized hotel is uncertain, but Emslie said the mall's expansion would probably be in following with growth from seven years ago.

"When they expand, like other centers that have done this, they'll take up some additional footprint in the parking lot and they'll make up the parking by building a parking structure," he said.

If the shopping center were to expand, it would have to coordinate with the "imminent redevelopment" at Stanford Medical Center, said Bill Phillips, managing director of real estate for the Stanford Management Company.

Phillips noted that the hospital itself will need to meet new state earthquake safety standards soon, which may include expansion of the medical center.