While Palo Alto negotiates with billionaire developer John Arrillaga over a proposal to build a large office complex and theater next to the downtown Caltrain station, the city and Arrillaga are also engaging in behind-the-scenes talks about a separate deal that involves an undeveloped parcel next to Foothills Park.
The council met in a closed session Tuesday night, Sept. 18, to discuss the price and terms of the sale, details that the city officials declined to discuss. Deputy City Manager Steve Emslie said the discussion was prompted by an offer the city received from Arrillaga, a philanthropist who owns properties on each side of the city-owned 7.7-acre parcel.
Emslie said the site is an undeveloped property adjacent to Foothills Park. The only vehicle access to the landlocked property is through a dirt road off Los Trancos Road.
The closed session discussion is the first time that the current council discussed the potential sale of the property to the prominent developer, who is a donor to Stanford University's athletic programs. The council took no action after its discussion, which preceded its regular council meeting. The negotiation centered on "price and terms of payments" for the city-owned property, according to the council's agenda.
City Attorney Molly Stump said the city isn't required to disclose the terms of Arrillaga's proposal for the property because of an exception in the Ralph M. Brown Act, which governs open meetings and requires public notification prior to council actions. The act allows city officials to discuss real estate negotiations behind closed doors without publicizing the terms, Stump said.
"These are the kinds of things that can be sensitive," Stump said. "The law allows a public entity to have negotiations over price and terms without publicly disclosing its bargaining position."
While the Tuesday discussion took place behind closed doors, city officials are now preparing to hold a public discussion of the proposed land sale. City Attorney Molly Stump told the Weekly that the city plans to hold a public hearing on Arrillaga's offer in October.
City officials said the sale is not related to the much more ambitious proposal that Arrillaga pitched last year, which would add four office towers at 27 University Ave., along with a new theater that would potentially house TheatreWorks. That project also includes relocating the historic MacArthur Park restaurant, which currently occupies the University Avenue site.
The magnitude of the University Avenue project is such that the council is considering bringing it to the voters in 2014. The City Council is tentatively scheduled to discuss at its Sept. 24 meeting a proposal to direct staff to prepare language for the possible ballot measure. The council also plans to approve a series of design, architectural and environmental-consulting contracts for work relating to the University Avenue project.