Editorial: Stretching the Brown Act

Tight-lipped, city staff defends closed council sessions to discuss selling small foothills parcel

In the end, the idea of selling a small, seven-acre land-locked city-owned parcel in the foothills above Arastradero Preserve may have merit. The parcel is almost completely surrounded by private land, is inaccessible to the public and would presumably be required to permanently remain undeveloped as a condition of the sale. It could bring the city some welcome revenue without any obvious negative impacts.

But, alas, it's not that simple.

For one, there has been no policy discussion, at least in open session where the law requires it must occur, about whether or why the city should even consider selling this parcel. Yet for unexplained reasons, city staff is already negotiating the terms and price of a sale in private meetings with the potential buyer, long-time Palo Altan and Stanford benefactor John Arrillaga, who owns the large foothills estate adjacent to the parcel under discussion.

Since the matter has only been discussed by the City Council in closed session, there is no way to determine how the idea of this land being sold even arose, or who authorized negotiations without first having a public discussion on the concept of or reasons for selling this property, located past the rear emergency access gate at the far end of the large meadow in Foothills Park.

But more troublesome is that these closed-door negotiations with Arrillaga are taking place at the same time the city staff is also negotiating with him over his ambitious proposal to build a huge office and theater complex next to the train station in downtown Palo Alto.

The office-theater complex, on which the city planning staff has been quietly working with Arrillaga for months, would require unprecedented zoning exceptions through the controversial planned community (PC) zoning process, in which a developer may exceed the normal zoning limits in exchange for providing important public benefits.

First disclosed in March, a refined plan calling for four office towers all in excess of the city's height limit was released last week and will be discussed Monday by the City Council.

Introducing the sale of the small foothills parcel into this process, whether coincidental in timing or somehow related to the office project, should have raised all kinds of red flags for both the council and staff. In the absence of any information, what is the public to think when one of the community's most wealthy and influential citizens is negotiating two different land deals with the city simultaneously?

It's possible that Arrillaga thought the office-theater project negotiations were a good time to achieve the purchase of the foothills parcel as a further buffer between his property and city open space. Or perhaps the idea wasn't his at all, and the city staff proposed it, getting needed revenue for a parcel that is almost as valuable to the city under private ownership as long as no development is permitted.

Or perhaps there is some other explanation as to why this is coming up now, at a critical time in the process of refining Arrillaga's office-theater project.

Whatever the explanation, there is a danger to both Arrillaga and the city to the lack of transparency. As we know from many previous PC projects, great public controversy is guaranteed when the city prepares to grant additional development rights in exchange for difficult-to-quantify public benefits. And the city has historically operated from a position of weakness in these negotiations because it lacks the economic expertise to properly evaluate and value the developer's profit from an up-zoning of property.

The proposed Arrillaga office complex, with some 260,000 square feet, is at once both exciting for its possibilities and overwhelming for its complexity and impacts on traffic flow and congestion. It also could be the largest act of philanthropy in the history of Palo Alto, since Arrillaga reportedly will donate the finished buildings to Stanford University and the theater shell to TheatreWorks, putting the issue of "profit" in a completely different context.

The stakes and debate will be quite intense as this ambitious proposal moves forward, and as often happens with PC projects, the city staff that negotiated the proposal can become advocates for it and lose its ability to provide the essential neutral advice to decision-makers and the community.

Transparency always helps to mitigate and counterbalance the danger of staff bias, which is why we're disappointed in the handling of the possible sale of the small foothills parcel.

There may be a bird in the hand for Palo Alto from John Arrillaga. Or it may be a fantasy overreach. Let's not jeopardize a good analysis, discussion and outcome by a lack of full disclosure.

Related story:

Palo Alto mulls sale of land near Foothills Park

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Posted by Confused
a resident of Midtown
on Sep 21, 2012 at 9:11 am

I read in one of the other Palo Alto papers that this was coming back in open session in early October. If so it seems that we will very soon know the details. Not sure what the concern is?

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Posted by Timothy Gray
a resident of Charleston Meadows
on Sep 21, 2012 at 10:07 am

This is a fair and balanced viewpoint that raises very valid questions about following principles of transparency and openess in City Government without criticism. Thank you Editor for the nice public service.

Remove the identities of both the city and the developer from the story and view it as an academic case study. The key principles are as follows:

1. Before any Government asset is considered for disposal, there should be a policy that is followed. Imagine what would happen to our City's assets if a piece of land was sold every time the Council didn't have the political will to exercise fiscal discipline and balance the budget?

2. Avoiding the appearance of a conflict of interest is as valid as avoiding a conflict of interest. Even if the developer has a charitable and benevolent approach and offer, having both conversations going on at once shows, at the very least, a lack of judgement from the City. If they are linked, then let's package the conversations together and offer full disclosure.

3. And finally, even when viewing a benevolent proposal, from a developer who has a stellar charitable track record, we must apply an objective and consistent standard in valuing the price of piercing our skyline that we have so jealously protected, and awarding density credits. (How does it impact our jobs to housing balance, what is the value of community benefits we should expect, and how do the Citizen's want to spend that Community Benefit vs. being dictated by the project.?)

I appreciate that the Editor brings this to our attention, as the issues and principles can be applied to all project. The current proposal is just illustrative of the need for an objective standard of transparency and an objective standard of valuing and spending Community Benefit.


Timothy Gray (full disclosure: Palo Alto Council Candidate)

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Posted by Trying to understand
a resident of Palo Alto Hills
on Sep 21, 2012 at 10:34 am

Developers have figured out that if the proposal is long and complex the public can't figure it out and respond. Documents are several inches thick.
Drekmeier poisoned the well with his project, getting the public to agree to his "noble" project, now all our parkland is up for exploitation.

Like this comment
Posted by Wayne Martin
a resident of Fairmeadow
on Sep 21, 2012 at 10:35 am

Unless there is a formalized procedure, or extant State law, that the City must follow when considering real estate matters, then the City is free to do what it wants—even if it seems like it flies in the face of openness, and transparency. So, is the Weekly going to call for a formalization of the City’s internal/external procedures, or just spin its wheels with another editorial that does not make much of a point?

Consider the possibility of all projects being posted on-line, with the name of the project manager, a description of the project and milestone dates for the project, so everyone can see what the City is doing, and when to expect to be able to provide public comment on these projects? Matters concerning real estate would be considered a project, so we would at least know which City employee is “calling the shots” on deals like this one—which may well have been decided behind closed doors before the public has the slightest idea what is going on.

Like this comment
Posted by Marcie
a resident of Barron Park
on Sep 21, 2012 at 2:35 pm

We need to eliminate the public benefit portion of new projects otherwise Palo Alto will soon be full of looming buildings and way too much traffic. Presently developers can build anything they desire in Palo Alto.

Like this comment
Posted by Trying to understand
a resident of Palo Alto Hills
on Sep 21, 2012 at 10:12 pm

Marcie I think you mean eliminate the Planned Community zone. That is the big loophole the developers enjoy which allows them to build anything at all, they just use flowery language to describe what ends up big and ugly. They make additional millions of dollars using the PC zone.

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Posted by Herb Borock
a resident of Professorville
on Sep 22, 2012 at 4:38 pm

The City Council Closed Session on September 18, 2012, for real estate negotiations regarding the 7.7 acre parcel next to the Oak Grove Group Picnic Area in Foothills Park was the second Closed Session the Council held for real estate negotions regarding this parcel.

On June 4, 2012, the Council also met in Closed Session on the same subject.

The newspaper's reporting of the upcoming discussions in Closed Session said the negotiations were with Arrillaga, but did not identify the property under discussion, because the Council's agenda description identified the parcel by its Assessor's Parcel Number, rather than by a text description that would have made the parcel's location next to Foothills Park obvious.

The September 14, 2012, newspaper report said, "The council plans to meet in a closed session for a property negotiation with John Arrillaga, who has proposed building a new office development and theater at 27 University Ave."

That description of the September 18, 2012, meeting identified who Arrillaga is, but it was vague about whether the property being discussed was at 27 University Avenue or some other place.

The June 1, 2012, newspaper report said, "The council will also meet with property negotiators to discuss the city’s negotiations with John Arillaga."

That description of the June 4, 2012, meeting did not identify the negotiations.

The Minutes of the June 4, 2012, City Council meeting are at: Web Link

Like this comment
Posted by Tom
a resident of South of Midtown
on Sep 23, 2012 at 3:28 am

Does acting in the best interest of the City mean anything more than enriching developers and their lawyers and architects?

The majority of the City Council is FAILING to serve the public.

DO NOT sell City assets to fund operating expenses. It's not a sustainable way to operate any organization!

Like this comment
Posted by Will
a resident of Embarcadero Oaks/Leland
on Sep 23, 2012 at 7:44 pm

Our elected and employed public officials letting us down yet again. Clearly, money talks and relegates legal issues and open govt to the s**t can.

City Manager: who exactly do you work for, the highest bidder, or the public interest of Palo Alto?

Yet another massive FAIL by the city of Palo Alto.

Like this comment
Posted by SP
a resident of East Palo Alto
on Sep 24, 2012 at 3:30 pm

The Brown Act has pretty much been gutted anyway. The state legislature has defunded it, and since its a state mandate, local jurisdictions can ignore its posting requirements. There is a petition to restore it here: Web Link.

Like this comment
Posted by curmudgeon
a resident of Downtown North
on Sep 24, 2012 at 6:01 pm

The Brown Act allows closed meetings when personnel issues are being discussed. Monetary compensation is a personnel issue. Therefore closed-door meetings in which the developer negotiates campaign contribution amounts with the council members do not violate the Brown Act.

Like this comment
Posted by resident
a resident of Another Palo Alto neighborhood
on Oct 3, 2012 at 9:34 am


"Does acting in the best interest of the City mean anything more than enriching developers and their lawyers and architects?

The majority of the City Council is FAILING to serve the public.

DO NOT sell City assets to fund operating expenses. It's not a sustainable way to operate any organization!"

I completely agree. Can anyone explain how voting anyone in or out of Council help? Developers are like infestations, everyone in office is corruptible.

Aren't there committees or commissions, with broad representation from major stakeholders in PAlo Alto, to supervise any sale of land or issues of land use?

For example, the Parks commission, how does that work, aren't they involved in land use?

We need at least 2 or three babysitting oversight committees and commissions on these issues. At least make the corruption process interesting.

Sorry, but further commenting on this topic has been closed.

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