The city and the university are in the midst of negotiations over a development agreement that would allow Stanford to rebuild Stanford Hospital and Clinics and the Lucile Packard Children's Hospital, bringing 1.3 million square feet of new development to Palo Alto.
The project hit a milestone last week when the city released a Draft Environmental Impact Report for the project, which lists how the project would affect traffic, housing, pollution and numerous other quality-of-life factors. It also recommends how those consequences could be limited or prevented.
But as Monday's discussion of "Project Renewal" indicated, the two sides still don't see eye-to-eye on the expansions' potential impacts, including fiscal impacts. An analysis by the city's consultant, Applied Development Economics, found that the project would cost the city about $1.1 million in annual ongoing expenses. Stanford's consultant, CBRE Consulting, concluded that the taxes and fees generated by the project would exceed the costs of municipal services by about $7.6 million.
Council members Greg Schmid and Nancy Shepherd both said making sure the project is "revenue neutral" should be a major focus of the ongoing negotiations. The city is facing a projected deficit of $7.3 million in fiscal year 2011 and is in the midst of cutting programs and renegotiating employee contracts.
"My top priority is to make sure we don't end up subsidizing the project over time," Schmid said Monday night.
The two sides took a major step toward a development agreement in June, when Stanford offered a menu of "community benefits" to Palo Alto, including a $23.1 million payment to the city's housing fund, subsidized health-care programs for low-income residents and Caltrain Go Passes for all hospital employees.
On Monday night, Vice Mayor Sid Espinosa said the city has "really turned a corner in having entered into a much more collaborative process with Stanford."
But some council members argued the city should demand more benefits from Stanford. Councilwoman Karen Holman said the city should ask Stanford to allow the San Francisquito Creek Joint Powers Authority to build a detention basin on Stanford land.
Len Materman, executive director of the creek authority, said a detention basin west of Highway 280 would protect about 3,200 Palo Alto homes from floods and save millions of dollars in flood insurance. The authority is charged with protecting Palo Alto and neighboring communities from the flood-prone San Francisquito Creek.
Norman Beamer, president of the Crescent Park Neighborhood Association, agreed.
"It doesn't cost Stanford any money," Beamer said. "It seems to me to be a natural candidate for offsetting the costs of the tremendously large developments in a way that doesn't hurt either side and would greatly benefit Palo Alto."
The university had consistently maintained that the medical facilities are themselves a major community benefit and has opposed benefits that don't relate to the hospitals.
In the next two months, the council and the Planning and Transportation Commission plan to delve into each chapter of the massive Draft Environmental Impact report over a series of 11 meetings.
One impact that the report states cannot be mitigated is increased traffic at three Menlo Park intersections: Middlefield and Willow roads; Bayfront Expressway and Willow; and University Avenue and Bayfront. Menlo Park City Councilman Heyward Robinson told the Palo Alto council Monday that he hopes Stanford's mitigation measures would include "very, very aggressive trip reductions."
"We certainly recognize benefits of having a world-class medical facility in our midst and having it expand and be even better than it is, but we have to figure out how to manage this flow of folks," Robinson said.