City creates 'Hospital District' for Stanford expansion

Planning and Transportation Commission recommends creating new zoning designation to allow hospital expansion; backs proposed development agreement

The largest development project in Palo Alto's history now has a brand new zoning district designed specifically to meet its needs.

The city's Planning and Transportation Commission voted unanimously Wednesday night to revise the city's official land-use bible, the Comprehensive Plan, to create a new "Hospital District" that would accommodate the massive expansion of the Stanford University Medical Center. The city's newest zoning district will allow Stanford's hospital facilities to dramatically exceed regular height and density limits. It also includes guidelines for such things as parking facilities and tree preservation.

Palo Alto is creating the new zone to allow Stanford to rebuild Stanford Hospital and Clinics, expand the Lucile Packard Children's Hospital, reconstruct various buildings at Stanford University School of Medicine, renovate Hoover Pavilion and build new medical-office buildings. The project would add about 1.3 million square feet of new development to Palo Alto and allow Stanford to add 144 beds to its main hospital, add 104 beds to the children's hospital and seismically retrofit all the buildings to meet state requirements.

The ordinance creating the Hospital District specifies that the district is designed to accommodate Stanford's hospital, medical office and research facilities "with the need to minimize impacts to surrounding areas and neighborhoods." The new zoning district will allow building heights of up to 130 feet for the main hospitals -- far above the 50-foot height limit in other parts of the city. The Hoover Pavilion site will allow a maximum height of 60 feet, not including helicopter pads.

The establishment of the new hospital zone is the latest milestone for the colossal Stanford project, which has already been the subject of close to 100 public hearings from the council and various boards and commissions. Last week, the Planning and Transportation Commission voted to approve the project's Final Environmental Impact Report -- a comprehensive document that analyzes the project's impacts and proposes mitigations.

The commission also unanimously endorsed on Wednesday Palo Alto's proposed "development agreement" with Stanford -- a document that lays out the benefits Stanford is required to provide in exchange for building the new facilities. To get the city's approval, Stanford has agreed to provide $7 million in health-care programs and services, $23 million in payments for housing programs and $12 million for climate-change initiatives. Stanford would also buy Caltrain Go Passes for all hospital workers and give the city $3.4 million for improvements to bicycle and pedestrian paths near the hospital facilities.

Stanford also agreed to guarantee a payment of $8.1 million to ensure the project would not have a negative impact on the city's budget.

While Stanford estimates its benefits package to total about $173 million, the city values the proposed benefits at about $40 million. The main difference is Stanford's assertion that the Go Passes constitute public benefits, while the city maintains that they are mitigations required by state law. Both sides agree, however, that Stanford's purchase of Go Passes is a valuable component of the package.

The planning commission generally supported the agreement, though some members offered a few additions. Vice Chair Lee Lippert recommended tying some of Stanford's entitlements to its status as a nonprofit institution. Commissioner Susan Fineberg said Stanford should start a historical-restoration fund to compensate for its demolition of the historic hospital building designed by Edward Durell Stone. Arthur Keller suggested including more details about the potentially escalating cost of the Go Passes.

But the commission concurred that after more than two years of negotiations, the two sides reached a fair agreement.

The commission also watched a video fly-through of the proposed facilities and commented on the project's design, which had been extensively vetted by the Architectural Review Board over 29 public hearings. The planning commission on Wednesday expressed a few slight resignations, though generally supported Stanford's plan. Commissioner Daniel Garber said he wished Stanford would have done a better job integrating Quarry Road with the surrounding area, while Keller said the project would've been better if the Hoover Pavilion site were less crowded.

Still, after dozens of meetings and more than two years of negotiations, the commission agreed that the project has come a long way.

"I think on the whole we have probably the best project we can possibly have at this point in time," Keller said.

Vice Chair Lee Lippert said he was concerned about the lack of way-finding elements in the design of the proposed Stanford Hospital and Clinics building and said he was disappointed in the design of the main entrance. But like others, he said the project merits approval.

"What an incredible journey," Lippert said.

The City Council is scheduled to review and possibly approve all the documents relating to Stanford's expansion at its June 6 meeting.

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Like this comment
Posted by Wayne Martin
a resident of Fairmeadow
on May 19, 2011 at 9:14 am

> While Stanford estimates its benefits package to total about $173
> million, the city values the proposed benefits at about $40 million.
> The main difference is Stanford's assertion that the Go Passes
> constitute public benefits, while the city maintains that they are
> mitigations required by state law.

The following two papers looking at the subsidy issues of Go-Passes were sent to the City of Palo Alto, as well as most elected officials in the Bay Area that are members of VTA or MTC:

Problem With Go-Pass Subsidies:
Web Link

Caltrain Go-Pass Subsidies As Corporate Welfare:
Web Link

The papers document that the Go-Pass program has sold over 22,000 passes, offering 365-day service to Caltrain, while collecting a little over $3M in revenue. How many people actually use the passes on a daily basis is unknown, although there have been some seemingly valid claims that the ridership is over 3,000 people a day for Stanford alone--out of the 18,000-19,000 people a day who use the system. The rest of the cost, with its $30M deficit this year, is picked up by the tax payers.

This Go-Pass component of this "package" is supposed to run for over 50 years. Who in the City of Palo Alto will be tracking these expenditures over that time-frame?

> Both sides agree, however, that Stanford's purchase of Go Passes
> is a valuable component of the package.

Based on 250-day ridership, the cost to Stanford is about $.50/day. Of course that seems a good thing for them, since the likely cost-of-service, based on current ridership, is probably in the $25-30/two-way-ride range. The difference between this $.50/ride cost to Sanford, and the actual cost, is picked up by the taxpayers, and other riders. But why would the City think that shifting this much cost to the taxpayers is a "good thing"? Of the $92M in this "package" component, not one penny goes directly to the City of Palo Alto, and there is no way of knowing precisely how many people are "removed from the streets" by this arrangement.

> Arthur Keller suggested including more details about the
> potentially escalating cost of the Go Passes.

The current cost model for Go-Passes is a bit of a mystery. The cost to employers with more than about eighty employees is $155/year (unlimited 365-day service). The second paper contains a list of the employers, and the number of Go-Passes purchased, that suggest that perhaps as few as five Silicon Valley employers contribute to upwards of 50% of the Caltrain ridership. With a $30M deficit, it's difficult to believe that the Caltrain Board will not have to eventually address the question as to why the Go-Pass discounts are so steep. However, that is not currently an on-going discussion, at least in public.

At any rate, this claiming that shifting $92M (plus the millions in subsidy) of Stanford's operational costs should be considered a "public benefit" speaks volumes about politics, money, and "the Palo Alto Process".

Like this comment
Posted by Bob
a resident of Community Center
on May 19, 2011 at 9:48 am

How i wish that Palo Alto would create a 'residence district' for the good and benefit of the Palo Altans already living here and not the world that would like to come!! We have no more room. Maybe Stanford should annex Palo Alto.Then maybe the streets potholes would get fixed.

Like this comment
Posted by svatoid
a resident of Charleston Gardens
on May 19, 2011 at 10:03 am

svatoid is a registered user.

"Maybe Stanford should annex Palo Alto.Then maybe the streets potholes would get fixed.'

Well, we all know that Stanford is not plagued with the financial mismanagement that Palo Alto has. In addition, Stanford has goals set, a plan for the future and the people that are in charge of taking care of it do not have their own set of agendas, unlike the people elected to "serve" the public in Palo Alto (who have their own agendas of climate change, higher public office, traffic calming, vilifying stanford)
So yes, if you want the potholes fixed, then have Stanford annex Palo Alto

Like this comment
Posted by Mitch
a resident of Greater Miranda
on May 19, 2011 at 10:32 am

Looks like our bloated bureaucrats will seize any opportunity to shake down a potential revenue source. Stanford is the reason Palo Alto is great, not the other way around.

Like this comment
Posted by Pressue tactics
a resident of Another Palo Alto neighborhood
on May 19, 2011 at 10:56 am

The acting chairman of the planning commission pushed the approval through like a true believer in the Big Boss. I assume he will expect some reward. Since he is an architect, we can guess what form the reward will take.
Never saw such pressure on colleagues to vote his way since.. since Liz Kniss put the heat on the city council to approve the Summerhill development. Her reward was developer support for higher office. We shall see what his is.
Humiliating your colleagues like a punishing parent, trying to get them to change their votes, when in fact they are working for the community they serve, not such a good thing.

Like this comment
Posted by Chris
a resident of University South
on May 19, 2011 at 11:08 am

Wayne Martin posts his so-called "analysis" but does not address this point:

If GoPass is such a great example of corporate welfare, why are not hundreds more companies taking advantage of it. It would not just be a handful of socially advanced organizations.

Like this comment
Posted by Floyd
a resident of Greater Miranda
on May 19, 2011 at 12:12 pm

To bad that some commenters can't get their point across w/o vilifying Palo alto residents.

Like this comment
Posted by svatoid
a resident of Charleston Gardens
on May 19, 2011 at 1:15 pm

svatoid is a registered user.

"To bad that some commenters can't get their point across w/o vilifying Palo alto residents."

Why do you think we have potholes and we are $500 million behind on infrastructure repair? Our elected officials had their own agendas to push while in office and now we are in the situation we are in.
You do not see bad infrastructure on campus.
Maybe, for too long, we have been playing nice with those in charge f keeping the city in good shape--after all, any criticism of elected officials is considered a personal attack--good way to stifle cirticism

Like this comment
Posted by
a resident of Midtown
on May 19, 2011 at 3:13 pm

Several years ago at the beginning of the development of these projects I (and several other Palo Alto residents) were asked to serve on a focus group. The focus group sponsor was Stanford and administered by a third party company. The subject matter centered on what Stanford would need to do regarding the City of Palo Alto and neighboring cities (most likely Menlo Park)in order to gain support to proceed with the project.

At first I wary of the City perhaps attempting to "shake the trees" of a non-project endeavor in order to gain some economic gain or mitigation. However, I did end up supporting some possible mitigation.

I believe that Palo Alto received much more return than I expected. Stanford Hospital and Clinic, The School of Medicine, and Lucile Packard Children's Hospital offer tremendous benefits to the City and its residents. As our population ages and cures for the young and old alike become more important than ever, this project is a "jewel" not to be missed. Congratulations are in order for the City staff and Council for getting this one right

Like this comment
Posted by jd
a resident of Adobe-Meadow
on May 19, 2011 at 10:37 pm

Special Interests win - Palo Alto residents lose...again. Same results different day. Alma Plaza, Frontage Road, Jewish Community Center, Rickey's and on and on it goes.

The planning commission and city council does not have the kahunas to stand up to well-oiled machines. This hospital is poorly run and we are ruining our standard of living to further subside its ineptness. This can only happen if elected officials don't have the will or knowledge to plan and negotiate these deals.

And btw, the Go-Passes are a complete sleeves-out-of-the vest concession....what an embarassment to the Planning Commission and a 'bend-over thank you very much' to the people of Palo Alto.

Like this comment
Posted by Can't believe it!
a resident of Midtown
on May 21, 2011 at 8:49 am

This deal is the perfect example of everything that's wrong with Palo Alto governance.

Let's examine the "benefits" here. $7 Million for health-care programs and services. The vast, vast majority of Palo Altans are insured, so I'm not sure what benefit this will be for them. $23 Million for housing programs means even more housing welfare for the lucky or well-connected. We don't need "Section 8" style living in Palo Alto. Let the marketplace decide housing prices. If people want to live near here and find cheap housing, there's plenty in East PA. $12 Million for "Climate Change" initiatives. I'm all for dealing with Climate Change, but the city level is a laughably stupid place to do it. $100 million+ or so for Caltrain passes? Great-- so Stanford will manage to be blackmailed into providing financial support for a bloated and inefficient transit system that nobody wants to use. Caltrain should be privatized or at least taken over by BART-- not given $100 in welfare that could be supporting Palo Alto.

Oh, and while I myself bike to work at Stanford if we're worried about traffic, we could start by getting rid of the ridiculously excessive number of bike lanes in this town that slow traffic to a crawl. The space per passenger mile these take up is far, far, more than the auto lanes.

The entire process here is a monument to the almost incomprehensible stupidity of Palo Alto's political leadership. It sure would have been great to have had that money for our general fund to spend it on things that we could actually use in Palo Alto. Or just refund it to the taxpayers. Using Stanford's valuation, we could have received around $12,000 for each family of four in town over the life of the deal. That would have been infinitely better than the monument to social engineering stupidity we just signed. Vote all of these clowns out of office.

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