The city initiated a Smart Cities program to expand business and technology partnerships in China and Germany. In the same vein, it reconsidered its existing cultural-exchange relationships with six "sister cities," even as the program that maintains the ties, Neighbors Abroad, celebrated its 50th anniversary.
Unexpectedly, the city reached out to one of its sisters when Typhoon Haiyan devastated first sister city Palo, Leyte, in the Philippines, on Nov. 8.
The world also descended on Palo Alto in previously unimagined ways. The city became an investment destination for Chinese homebuyers with ready cash, who were courted by local Realtors.
Palo Alto became the locus for a bizarre international incident, after North Korean officials arrested 85-year-old resident Merrill Newman on espionage and "war crimes" charges while he was visiting as a tourist.
On more neutral ground, Stanford University's — and Palo Alto's — international prestige again gained prominence after university professors Thomas Südhof and Michael Levitt won the Nobel Prize in physiology/medicine and in chemistry respectively.
The year's events, in addition to signaling that Palo Altans are "not in Kansas anymore," are sure to have a major influence on the city's economic and cultural growth in the coming decades.
Palo Alto boosted its international clout
While the hyperlocal problems of parking and traffic dominated City Council agendas, this has been a year filled with jetlag and passport stamps for council members.
In October, Vice Mayor Shepherd took her second trip to Shanghai in a year to attend the "Smart City Symposium," an event focused on sustainability and featuring elected officials and members of various regional boards. Local students also got to spend some time in Shanghai as part of a new "smart partnership" between Palo Alto and the Yangpu district of Shanghai.
For Palo Alto, the concept of a "smart partnership" is novel. Unlike its "sister city" program, the new deals focus on sustainability and technology rather than cultural exchanges. In August, the council held a wide-ranging discussion about its various international partners and agreed to sign such an agreement with the German city of Heidelberg. The non-binding agreement states that the goal is to "exchange ideas and value, especially in the areas of environmental sustainability and innovation-driven economic development." The two cities, the agreement states, will ultimately seek to "create mutual programs with measurable results."
In October, Mayor Greg Scharff and City Manager James Keene took a trip to Heidelberg and to one of Palo Alto's six sister cities, Enschede, Netherlands. At a council meeting later that month, Scharff recapped the trip and said the main message he took back was how much other cities, from China to Europe, want to be like Palo Alto, particularly when it comes to the city's startup culture and sustainability efforts.
"It's really interesting to see how much they look up to Palo Alto as a world leader in all of these items," Scharff said.
Chinese homebuyers honed in on Palo Alto
With home prices rising and days on the market shrinking, potential Palo Alto homebuyers were hit with another challenge in 2013: cash-wielding buyers from China.
Stymied by limits on home ownership in their country, Chinese homebuyers came in droves to pick up local real estate.
Some were attracted by the investment opportunities: A 3,000-square-foot house in Palo Alto for under $4 million would have gone for $20 million in Hong Kong, one buyer reported. Others in China's rising middle class were seeking educational options for their children.
Realtor Ken DeLeon went out and bought a 14-seater Mercedes limo bus to show his potential clients around. DeLeon's buses tour both Palo Alto and nearby cities, running twice a week.
He said he expected Chinese homebuyers to represent 15 percent of local sales in 2013, compared to 5 percent just two years earlier.
Many buyers are attracted to new construction — thus increasing the competition for what is already a rarity in Palo Alto.
And, Deleon said, the impact of these buyers will be felt for years to come, as they tend to hold onto their properties, thus lowering future inventory even further.
North Korea arrested Palo Altan Merrill Newman
The arrest in North Korea of Merrill Newman, an 85-year-old Palo Alto grandfather, on Oct. 26 for alleged "war crimes" thrust Palo Alto onto the world stage.
Newman and a friend, Bob Hamrdla, took a 10-day tour of the secretive country through a Beijing, China, tourist agency. Newman was curious about the country and sought closure of his Korean War experiences, his family said.
The North Koreans saw his visit differently. Newman had trained the Kuwol, a guerilla group that fought against the North during the war. He was in touch with and had visited ex-members of the troop, who now reside in South Korea, and he had hoped to connect with some of their family members who still live in the North.
Although North Korean officials had given him permission to visit the region where they had fought, his guides reported his innocent request to visit Kuwol family members. Newman had a tense meeting with North Korean officials, who grilled him about his war activities. The next day, Oct. 26, just five minutes before his return flight to Beijing was to take off, military officials demanded to see his passport and removed him from the plane.
Newman was not heard from for weeks; North Korean officials were silent, and without diplomatic ties, U.S. officials could do little. The U.S. State Department put out a warning against traveling to North Korea, and the international media put the Newman's Channing House residence on the map.
The State Department response was muted; officials tried not to link Newman's arrest to ongoing disputes over North Korea's nuclear-weapons and a United Nations resolution condemning the country's human rights policies. Behind the scenes, the Swedish Embassy in Pyongyang worked for Newman's release and to bring him needed heart medicine.
On Nov. 29, North Korean officials formally announced they had Newman, and in a bizarre video and four-page "confession," Newman admitted his "crimes" and begged for forgiveness.
North Korea deported him to Beijing on Dec. 6, and he returned to the Bay Area on Dec. 7. Two days later, he released a statement that he was coerced into making the apology.
A super typhoon brought Palo Alto, Philippines closer
Fifty years after forming Palo Alto's first sister-city relationship, with Palo, Leyte, Philippines, local residents jumped to their sister city's aid after a devastating natural disaster struck the country.
Typhoon Haiyan devastated Palo on Nov. 8, and Palo Alto Mayor Greg Scharff urged local residents to contribute to relief funds. He also pledged to have the city work together with nonprofit organizations to get money and assistance directly to Palo. The City Council pledged $10,000 for relief efforts, which the nonprofit Neighbors Abroad distributed to two aid agencies in Palo.
"As a community we've often come together to lend a hand," Scharff said at the council meeting, which was ceremonially closed in honor of Palo. "I think as a community we really need to come together on this and help out our sister city."
By early December, Neighbors Abroad raised an additional $18,000 for Palo, with a large contribution by the Teen Advisory Board from local high schools through their "Glow for the Philippines" event on Nov. 26.
Dozens of doctors, nurses and medical staff from the Palo Alto Medical Foundation and Stanford Hospital and Clinics took time off to render professional assistance in the ravaged country. They flew to Palo and other areas in an ongoing campaign to provide medical aid amid the devastation.